Luapula Energy Limited v Exxon Petroleum Limited and Ors (2021 /HPC / 0362) (8 May 2024) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA 2021 /HPC / 0362 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: LUAPULA ENERGY LIMITED PLAINTIFF AND 0 8 MAY ,n24 MMERCIAL REGIS EXXON PETROLEUM LIMITED 1 DEFENDANT ST PETRO TECH ENERGY LIMITED 2ND DEFENDANT KAFULA MUBANGA 3RD DEFENDANT Before Honourable Lady Justice Chilombo Bridget Maka For the Plaintiff: Mr. G. Tembo - Messrs James and Doris Legal Practitioners. For the Defendants: Ms. L. Namwinga with Ms. K. Hachileye (LLP) - Messrs Ferd Gere and Company. RULING Legislation Referred to: 1. The High Court Rules, Chapter 27 of the Laws of Zambia. 2. The Corporate Insolvency Act No. 9 of 2017. 3. The Companies Act No. 10 of 2017. Cases Referred to: 1. Salomon vs. Salomon & Company Limited ( 1897) AC, 22. 2. Associated Chemicals Limited vs. Hill & Delamain and Ellis & Company(as a Law Firm) ( 1998) S.J, 7 (S.C). 3. Ethiopian Airlines vs. Sunbird Safaris Limited SCZ Judgment No. 26 of 2007. 4. Kitwe Supermarket Limited vs. Southern Africa Trade Limited 2007/ HK/243. 5. Jones vs. Lipman ( 1962) 6. Zambia National Building Society vs. Budget Insurance Brokers Limited & 2 Others (2020) ZMHC, 116. 7. Lazarus Estate Limited vs. Easly(sic) (1956) 1 QB 702. 8. Re a Company (1985) BCLC, 333 (CA). 9. Magnum Zambia Limited vs. Basit Quadri (Receiver/ Manager) & Grindlays Bank International Zambia Limited (1981) Z.R, 141. IO.Goodwell Siamutwa vs. Southern Province Co-operative Union and Another SCZ Appeal No. 114 of 2002. 11.Ben Hashem v. Ali Shayif (2008) EWHC 238. 12.Madison Investment, Property and Advisory Company Limited vs. Peter Kanyinji SCZ Selected Judgment No. 48 of 2018. 13.Prest vs. Petrodel Resources Limited (2013) UK SC 34. Other Works Referred to: 1. Gower's Principles of Company Law, 10th Edition (2016) Sweet and Maxwell, London. 2. B.A Garner's Black's Law Dictionary, 9th Edition. 1. Introduction. 1.1. This Ruling addresses the Plaintiffs application to pierce the corporate veil of the 1st Defendant, made pursuant to section 175 of the Corporate Insolvency Act and Oder 3 Rule 2 of the High Court Rules. 1.2. The 1st and 3rd Defendants opposed the application by submitting an affidavit and skeleton arguments on April 8, R2 2024. However, it seems that the 2nd Defendant did not engage in the proceedings. 2. Background. 2.1. On June 23, 2021, the Plaintiff commenced the primary legal action against the Defendants through a Writ of Summons accompanied by a statement of claim, seeking the following remedies:- i. The sum ofZMW3,506,195.90, the same being the amount due and owing to the Plaintiff ii. Special damages as pleaded iii. Damages for loss of business iv. Damages for loss of opportunity to reinvest its revenue v. Interest vi. Costs 2.2. The Defendants neither entered appearance nor settled their defence. 2.3. On May 12, 2022, a Judgment in Default of Defense was rendered in favor of the Plaintiff, appointing a Receiver and granting the pleaded sum. The Defendants sought to set aside this default Judgment, but their attempt was dismissed by this Court. R3 2.4. The Plaintiff attempted to enforce the default Judgment through garnishee proceedings, but same failed on account of insufficient funds in the 1st Defendant's account. 3. Affidavit evidence in support. 3.1. The affidavit in support was sworn by Dorothy Chubo, the Managing Director in the Plaintiff Company. 3.2. Ms. Chubo stated that the Plaintiff is a licensed company authorized to handle, distribute, transport, and/ or market petroleum products and hydrocarbons. She further explained that pursuant to an agreement with its Mozambican collaborating partner, ShoPetrol Limited, for the delivery of 52 tankers of petroleum on credit, the Plaintiff received an initial batch of 20 tankers, which it promptly introduced to the oil market. 3.3. The 1st Defendant, acting through the 3rd Defendant, who served as its majority shareholder and managing director, expressed interest in purchasing 110,000 liters of diesel and 400,000 liters of petrol from the Plaintiff, totaling ZMW7,383,000.00. At the request of the 1st Defendant, the Plaintiff prepared and issued a pro forma invoice on February 24, 2021, specifying that 50% of the purchase price was to be paid before delivery, with the remaining amount to be settled upon delivery of the petroleum. R4 The 3rd Defendant accepted the terms outlined in the invoice, a copy of which was provided as exhibit "DC 3". 3.4. Accordingly, the 3rd Defendant provided the Plaintiff with a letter instructing the bank, Ecobank Zambia, to transfer 50% of the purchase price, totaling ZMW3,391,500.00, to the Plaintiffs account. Relying on this letter and under the direction of the 3rd Defendant, the Plaintiff delivered 14 trucks of petroleum products to the 1st Defendant. A copy of the letter sent to the bank and availed to the Plaintiff was submitted as evidence and marked "DC 4". 3.5. Nonetheless, the amounts corresponding to 50% of the purchase price were never deposited into the Plaintiffs account. Upon investigation, it was revealed that the 3rd Defendant had halted the instruction due to insufficient funds in the 1st Defendant's account. 3.6. That upon further investigation into the petroleum products delivered to the 1st Defendant, the 3rd Defendant claimed that they had been supplied to Rubis Energy and Kobil Energy, asserting that these companies had not yet settled payment for the products. However, both Rub is Energy and Ko bil Energy informed the Plaintiff that they had already paid the 1st Defendant for the supplies. 3.7. On March 23, 2021, the Plaintiff, through its legal representatives, sent a demand letter for the outstanding amount of ZMW4,908,879.30. The 3rd Defendant, representing the 1st Defendant, pledged to settle this sum RS by March 26, 2021. Exhibits "DC 5" and "DC 6" were provided, showcasing the demand letter and the response from the 3rd Defendant, respectively. However, only a partial payment of ZMWl,402,683.40 was made, leaving a remaining balance of ZMW3,506,195.90. 3.8. That as a result of the 1st Defendant's failure to settle the outstanding amount, the Plaintiff initiated the main action, resulting in the delivery of a Judgment in default of defense on May 12, 2022. That this default Judgment had not been challenged through either setting it aside or filing an appeal. A copy of the Judgment was presented and labeled as "DC 7". 3.9. Ms. Chuba was advised by the Plaintiff's Advocates that enforcing the default Judgment was not feasible due to the absence of a known trading location for the 1st Defendant. That despite records at PACRA indicating the 1st Defendant's registered address as Shoprite Building, Cairo Road, P.O. Box 132w, Chipata, Eastern Province, Zambia, no trading location could be confirmed. A PACRA printout was presented to the Court and labeled as "DC 8". Furthermore, a search conducted at the registered office revealed that the 1st Defendant is not located there. Additionally, it was discovered that there is no Cairo Road in Chipata. 3.10.Ms. Chuba further asserted that she strongly believes the 1st Defendant possessed no assets and was merely utilized R6 to deceive potential suppliers like the Plaintiff. An attempt to garnish the 1st Defendant's account proved fruitless, as evidenced by a copy of a letter from its bank, marked "DC 9-11," indicating the absence of funds in its account. 3.11. Furthermore, despite receiving the Default Judgment, the st 1 Defendant made no attempts to settle the Judgment debt; rather, it unsuccessfully sought to have it set aside. Additionally, the Defendants appealed against the appointment of a Receiver, but their appeal was dismissed by the Court of Appeal, as demonstrated by the Judgment exhibited as "DC12". 3.12. Ms. Chuba outlined the reasons for seeking an Order to pierce the corporate veil as fallows:- z. That the 3rd Defendant is the majority shareholder and a director of the 1st Defendant company and as such is in control of the business of the l st Defendant. This is seen in the PACRA print out "DCB". zz. The 3rd Defendant being in control of 1st Defendant company knowingly allowed the 1st Defendant to carry on the business fraudulently and/o r wrongly in relation to the Plaintiff m. That the 3rd Defendant was at all material times aware of the 1st Defendant's financial position and inability to pay the Plaintiff's debt but allowed the 1 st Defendant to carry on the business; R7 iv. That the 3rd Defendant decided to escape liability by registering an address that is fictional and having the 1st Defendant operate without a registered address and without assets; v. That as a result of the aforesaid, the 3rd Defendant cannot escape the legal obligation to pay the Plaintiff's debt; and vi. That it would be in the interest ofj ustice to pierce the 1st Defendant' corporate veil. 3.13.Ms. Chuba further affirmed that the 1st Defendant lacks independence and has been utilized by the 3rd Defendant to evade liability. She emphasized that unless the veil of incorporation is pierced, the Plaintiff would be unable to recover the fruits of its Judgment. Additionally, she noted that a demand for the settlement of the Judgment debt addressed to the 1st Defendant remained unanswered. Marked "DC 13" is a copy of the said demand letter. 4. Skeleton Arguments in Support. 4.1. The application was made with the aim of holding the majority shareholder of the 1st Defendant accountable for the Judgment debt against the 1st Defendant. 4.2. The Plaintiff recognized the legal principle that an incorporated company is legally separate from its directors and shareholders due to the veil of incorporation. Reference was made to the cases of Salomon vs. Salomon R8 & Company Limitedl1l and Associated Chemicals Limited vs. Hill & Delamain and Ellis & Company(as a Law Firm)1 as well as section 16 of the Companies Act, which serve as authorities establishing this principle 4.3. However, it was argued that while the principle of separate legal personality of a company and its shareholders or directors is generally upheld, it is not absolute. The veil of incorporation may be lifted in cases of fraudulent conduct against third parties. The Plaintiff directed the Court's attention to the learned authors of Principles of Company Law, 10th Edition, paragraph 8, which outlines instances when the corporate veil could be lifted. 4.4. It was argued that according to section 175 of the Corporate Insolvency Act, the veil of incorporation can be lifted in cases of fraud. This section empowers courts to hold individuals accountable if they knowingly and fraudulently conducted business under the guise of a company with third parties. 4.5. The Plaintiff contended that it adequately demonstrated the fraud perpetrated by the 3rd Defendant, who served as a director and shareholder in the 1st Defendant. This was evident in his actions, such as providing a letter marked "DC 4" in the affidavit, purportedly instructing the bank to pay 50% of the purchase price to induce the delivery of the consignment. Relying on this letter, the Plaintiff delivered the petroleum products and expected full payment as R9 agreed. However, the Plaintiff never received the full payment, leading it to initiate legal proceedings, resulting in a default Judgment in its favor. The Plaintiff characterized the 3rd Defendant's conduct as fraudulent. The definition of fraud from page 731 of Black's Law Dictionary, 9th Edition, was cited in support. 4.6. It was emphasized that the 3rd Defendant knowingly permitted the 1st Defendant to obtain petroleum from the Plaintiff despite being aware of the 1st Defendant's incapacity to pay for same. That as the individual overseeing the operations of the 1st Defendant, the 3rd Defendant should be held accountable for the debts incurred by the 1st Defendant. This submission was supported by the case of Ethiopian Airlines vs. Sunbird Safaris Limited(3l. 4. 7. It was further highlighted that the 1st Defendant violated the provisions of section 28 of the Companies Act, which mandates companies to maintain a registered office and inform the Registrar about any change of address. That it was evident that the 1st Defendant was not operating from the office it registered at PACRA, nor was there any notice of change of address filed at PACRA. In fact, the registered address was fictitious, and it was used to evade liability from third parties. Such conduct warrants piercing the corporate veil, as demonstrated in the High Court case of RlO Kitwe Supermarket Limited vs. Southern Africa Trade Limited'4 '. 4.8. To further buttress its submission on instances when the veil of incorporation could be pierced, the Plaintiff referenced the cases of Jones vs. Lipman151, Zambia National Building Society vs. Budget Insurance Brokers Limited & 2 Others161 in which the Court cited with approval the case of Lazarus Estate Limited vs. Easly (sic)!7 1 and Re a Company!81. 4.9. The Plaintiff argued that the trading conducted by the 1st Defendant was fraudulently orchestrated by the 3rd Defendant and urged the Court to recognize this fact. The Plaintiff requested the Court to lift the corporate veil of the 1st Defendant and hold the 3rd Defendant accountable for the debts incurred by the 1st Defendant, as determined in the main action. Additionally, the Plaintiff prayed for costs. 5. 1st and 3rd Defendants' Affidavit Evidence in Opposition. 5.1. The affidavit in opposition was deposed by the 3rd Defendant. 5.2. The 3rd Defendant provided an overview of the factual background and the current status of the proceedings in the main action. He asserted that he was sued in his capacity as a majority shareholder and managing director, suggesting that the corporate veil had been lifted implicitly. Rll 5.3. He deposed that he was advised by his Advocates that the Plaintiff cannot seek the to pierce the 1st Defendant's corporate veil on grounds which he outlined as follows:- An order to appoint an interim receiver was granted. i. zz. That the 3rd Defendant despite being the majority shareholder and a director of the Jst Defendant company has no control of the business of the 1st Defendant as seen by the PACRA print out, owing to the fact that the company was placed under the receiver upon appointment. lll. That the 3rd Defendant did not allow the 1st Defendant to carry on the business fraudulently and or wrongly in relation to the Plaintiff but that the Plaintiff performed in accordance with the corporate offer. w. That the 3rd Defendant was not at any time aware of the 1st Defendant's inability to pay as the 1st Defendant was ready to pay as and when the Plaintiff performed in accordance with the full corporate offer. v. That the first Defendant is a registered company and well established company with assets. vi. That the 3rd Defe nda nt had not in any way escaped the legal obligation to pay the Judgment debt. vn. That in the interest of justice, the Receiver should be compelled to render a detailed account. R12 rd 5.4. The 3 Defendant refuted the assertion that he used the st 1 Defendant to evade liability, stating that the 1 st Defendant had not engaged in any actions warranting the lifting of the corporate veil. Additionally, he highlighted that the Court had ordered the appointment of a Receiver, whose responsibility would be to assume control of the 1 st Defendant's operations and who needed to provide a comprehensive account to the Court. st rd 6. 1 and 3 Defendants' Skeleton Arguments in Opposition. 6.1. It was submitted that a company enjoys the fruits of a separate and distinct personality from its shareholders and directors. Relying on the principle established in the cited case of Salomon vs. Salomon & Company Limited( , it was emphasized that the veil of incorporation imposes liability on the 1st Defendant company to settle its Judgment debt. Reference was also made to section 16 of the Companies Act and the Associated Chemicals Limited case to underscore the independent or autonomous status of incorporated companies. 6.2. It was argued, however, that the 1st Defendant was placed under receivership by Court Order, effectively placing the Receiver in the position of the company's shareholders. It was clarified that receivership entails a creditor assuming control of the debtor's assets following a default on a secured debt. It was also highlighted that the appointment R13 of a Receiver was granted in the Default Judgment, which placed the operations of the 1st Defendant under the appointed Receiver. 6.3. Moreover, it was argued that upon appointment, the Receiver assumes the responsibility to liquidate the company's assets and settle the outstanding debt on behalf of the creditor. Additionally, that the Receiver is obligated to provide a detailed account of the company's affairs. 6.4. This Court was urged to consider the role of a Receiver, as elucidated in relevant case law, such as Magnum Zambia Limited vs. Basit Quadri (Receiver/Manager) & Grindlays Bank International Zambia Limited19l and Goodwell Siamutwa vs. Southern Province Co operative Union and Another110l. 6.5. Furthermore, the implications of section 175(1) of the Corporate Insolvency Act were acknowledged, and it was conceded that those engaged in fraudulent conduct must be held accountable. However, the Defendants asserted their dissociation from any such conduct. It was contended that the 3rd Defendant did not engage in fraudulent dealings with third parties and that despite his role in relation to the 1st Defendant, should not be held responsible for any fraudulent activities. 6.6. The submissions concluded with an explanation of the nature of the contractual relationship between the R14 Defendants and the Plaintiff. The Defendants prayed that the Court finds in their favour with costs. 7. Hearing. 7.1. The Plaintiffs application was heard on April 11, 2024, with legal representatives from both sides in attendance. 7.2. Representing the Plaintiff, Mr. Tembo informed this Court the he was relying on the affidavit and skeleton arguments filed in support of the application. 7.3. Ms. Namwinga equally relied on the filed affidavit and skeleton arguments in opposition. 7.4. In reply, Mr. Tembo pointed out that the assertion by the 3rd Defendant regarding the existence of assets for the 1st Defendant lacked evidential support. He further argued that the amounts owed to the Plaintiff stemmed from the actions of the 3rd Defendant, who authored the letter that deceived the Plaintiff into delivering fuel to the 1st Defendant. 7.5. Mr. Tembo reiterated his prayer that the application be granted with costs. 8. Consideration and Determination. 8.1. I have thoroughly reviewed the Plaintiffs application along with its supporting documents, as well as the opposing documents from the Defendants. Additionally, I have taken into account the oral submissions made by Counsel at the hearing. RlS 8.2. The Plaintiff has moved this Court to compel it to Order the removal of the 1st Defendant's corporate veil. This application is anchored on the provisions under section 1 75( 1 I of the Corporate Insolvency Act which enacts as follows:- "If, in the course of the winding up, receivership or business rescue proceedings or in any other proceedings against a company, it is shown that business of a company has been carried on for fraudulent purposes, or with intent to defraud creditors, the Court shall, on the application of an insolvency practitioner or creditor, order that any person who was knowingly a party to the carrying on of the business in that manner shall be personally responsible, without any limitation of liability, for the debts or liabilities of the company as the Court orders." 8.3. The above prov1s1on unequivocally empowers Courts to hold any individual accountable if they knowingly conducted business for fraudulent purposes on behalf of the company. This essentially implies that the Court, under such circumstances, has the authority to pierce the corporate veil. 8.4. The background of this action is common cause. The Plaintiff secured a default judgment, yet its enforcement has proven unsuccessful. Garnishee proceedings yielded no results due to the absence of funds in the 1st Defendant's bank account. It has been asserted that the R16 st 1 Defendant lacks assets against which enforcement measures can be taken. Consequently, this application was initiated with the aim of holding the 3 Defendant, rd who purportedly exercised control over the 1st Defendant's business, accountable for the 1st Defendant's outstanding Judgment debt owed to the Plaintiff. 8.5. The Plaintiff contends that fraudulent dealings occurred when the 3rd Defendant misled the Plaintiff into delivering petroleum products to the 1st Defendant despite being aware of the latter's inability to pay for the said products. 8.6. On the contrary, the 3rd Defendant disputed the notion of being held accountable for the 1st Defendant's Judgment debt. While he did not contest being identified as a majority shareholder and managing director, the 3 rd Defendant emphasized the importance of maintaining the corporate veil intact. He asserted that the 1st Defendant indeed possessed assets and was desirous of settling the debt. Additionally, he highlighted the appointment of a Receiver, whose role was to assume control of the 1 st Defendant's affairs and provide an account of their actions. 8. 7. It is trite law that an incorporated company possesses a separate and distinct legal identity from its shareholders and directors. This principle, as exemplified in the Salomon case referenced by the parties, has been reaffirmed in numerous legal precedents. Courts typically R17 uphold and respect this principle. This stance was underscored in the case of Ben Hashem v. Ali Shayifl 11l in which it was stated that:- "There has always been a judicial concern not to create commercial uncertainty and undermine the benefits of incorporation. Having incorporated, the shareholders have a legitimate expectation, as do those who deal with the incorporated entity, that the courts will respect the status of the entity and apply the principle in Salomon v. Salomon & Co. in the ordinary way." 8.8. Nevertheless, as correctly asserted by the Plaintiff, the principle of separate legal personality for limited liability companies in company law is not inflexible. I recall the observations made by the Supreme Court on this matter in the case of Madison Investment, Property and Advisory Company Limited vs. Peter Kanyinji1121 wherein it was stated that:- "However, although the veil of incorporation of limited liability companies offers enormous commercial and legal benefits to the owners of corporate entities, it also gives even bigger worries to persons dealing with those corporate entities when the veil of incorporation is used fraudulently or improperly to shield wrong doing." 8.9. The above elucidates the Plaintiff's stance, which centers on the 1st Defendant's default in settling a debt for R18 supplied petroleum products and its failure to discharge the Judgment debt. The Plaintiff seeks to pierce the veil of incorporation, aiming to hold the individual(s) behind the 1st Defendant accountable. 8.10.Therefore, the key question to be resolved in this matter is whether it is appropriate to exercise the inherent power to pierce the veil of incorporation. It is worth noting that Courts do not frequently resort to this power. Specific conditions or circumstances must be fulfilled for its invocation. These were aptly outlined in the case of Madison Investment, Property and Advisory Company Limited case as follows:- "In this jurisdiction, as in England and Wales, the circumstances in which the corporate veil may be lifted can be classified into two categories; first under the common law through judicial interpretation, and second, under statute. The learned author, LC Gower in The Principles of Modem Company Law (3rd ed. Stevens & Sons) p. 216, gives four examples of situations when it will be justified for a court to pierce the corporate veil. These are: (a) where the veil of incorporation is being used for some fraudulent or improper purpose; (b) where it becomes necessary to determine the character of the company; (c) where a trust and agency relationship is involved; and (d) where the interests of third parties are at stake. The statutory instances are of course discernible from various pieces of legislation, section 1 75 of the Corporate Insolvency Act to which we have early alluded, being one of them." R19 8.11. In this application, the Plaintiff contends that fraud and improper conduct occurred on the part of the 3rd Defendant. This assertion is based on the evidence that pursuant to an agreement outlined in the proforma rd invoice, the 3 Defendant made representations on behalf of the 1st Defendant through a letter dated February 24, 2021, addressed to its bank, which induced the Plaintiff to deliver petroleum products to the 1st Defendant. 8.12.Moreover, it was contended that the 3rd Defendant continued the business operations of the 1st Defendant despite being aware of its incapacity to pay for the products supplied by the Plaintiff. Additionally, it was asserted that the 1st Defendant's business does not operate at the registered address rd 8.13. The 3 Defendant refuted having knowledge of the 1 st Defendant's financial capacity, despite his role as a managing director and shareholder. He maintained that the 1st Defendant possessed assets against which enforcement could be pursued. Furthermore, he denied being in control of the 1st Defendant's business, citing the appointment of a Receiver to oversee its affairs. However, this contention cannot be upheld, as the alleged improper conduct and fraud are alleged to have occurred prior to the Receiver's appointment. Additionally, it is pertinent to note that section 175(1) of the Corporate Insolvency Act allows R20 for the lifting of the veil of incorporation even during receivership. 8.14.Having reviewed the evidence from both parties, it is rd apparent that the 3 Defendant did not contest the assertions made in the Plaintiffs affidavit regarding the transaction's history that precipitated the legal action. The only aspect addressed by the 3rd Defendant pertains to the timing of payment for the supplied products. 8.15. The only evidence supporting this assertion by the 3rd Defendant is a letter dated March 23, 2021, provided in the Plaintiff's affidavit as exhibit "DC6". In this letter, the rd 3 Defendant proposed a payment plan, which he now contends was the initial agreement. 8.16. Undoubtedly, the 1st Defendant received petroleum products for which it failed to make full payment, prompting the initiation of this legal action. Subsequently, a default Judgment was entered on May 12, 2022. Regrettably, as of present, the 1st Defendant has not settled the Judgment debt, and attempts to enforce it have proven futile. 8.17. I have also observed from the PACRA printout labeled "DC 8" that the registered office of the 1st Defendant is listed as Shoprite Building Cairo Road, Chipata. This differs from the address provided on the 1st Defendant's bank statement labeled "DC 10 ", which indicates Cairo Road, Shoprite Building, 4th Floor, Lusaka, not Chipata. R21 This confirms the Plaintiff's contention that the 1st Defendant was not located at the registered office. 8.18. The 3rd Defendant's handling of the 1st Defendant's business undoubtedly constituted improper conduct, bordering on fraudulent misrepresentation. This is evident in the deceptive manner in which the Plaintiff was induced to deliver petroleum products through the provision of a letter instructing the bank to make payment, despite the 1st Defendant lacking the capacity to fulfill this obligation. Furthermore, the garnishee proceedings proved futile, revealing that the 1st Defendant had no funds in its account for an entire year, spanning from January 2022 to January 2023. 8. 19. I am thus satisfied that this is a proper case in which to exercise the power vested under section 1 75( 1) of the Corporate Insolvency Act. I am fortified in this finding by the dicta of Lord Clarke in the case of Prest vs. Petrodel Resources Limitedl13 l which was cited with approval in the Madison Investment Property and Advisory case. He stated that:- "The court only has power to pierce the veil when one of the more conventional remedies have proved to be of no assistance." 8.20.I am further fortified by the holding in the cited case of Ethiopian Airlines vs. Sunbird Safaris Limited and Others13 wherein it was held that:- R22 "The 3rd Respondent was the Managing Director of the 1 st Respondent and was responsible for the day to day running of the company. Therefore, the trial Judge ought to have found the 3rd Respondent liable for the 1st Respondent's debt." 9. Conclusion and Orders. 9.1. The Plaintiffs application holds merit. The 3rd Defendant's actions in managing the 1st Defendant's business were improper and fraudulent. Consequently, it is just and appropriate to hold the 3rd Defendant, who was evidently accountable for the daily operations of the 1st Defendant's business, liable for the debt owed to the Plaintiff. 9.2. Consequently, I hereby Order that the 1st Defendant's corporate veil be pierced and hold the 3rd Respondent personally liable for the Judgment debt herein. 9.3. Costs of this application are for the Plaintiff, to bet axed in default of agreement. 9.4. Leave to appeal is hereby granted. s Dated at Lusaka this th day of May, 2024. ···············~ ·~········· Chilombo Bridget Maka HIGH COURT JUDGE R23