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IN THE SUPREME COURT OF ZAMBIA SCZ Judgment No.15 of 2008
HOLDEN AT LUSAKA APPEAL NO. 163 OF 2005
(CIVIL JURISDICTION)
B E T W E E N:
BANK OF ZAMBIA APPELLANT
AND
AARON CHUNGU 1ST RESPONDENT
ACCESS LEASING LIMITED 2nd RESPONDENT
ACCESS FINANCIAL SERVICES LTD 3rd RESPONDENT
CORAM: Sakala, CJ., Chibesakunda and Mushabati, JJS.
On 5th July 2007 and 24th April 2008
For the Appellant : Mr. N. Nchito with Mr. M. Nchito of
MNB Chambers
For the Respondent : Mr. J.P Sangwa of Simeza Sangwa
& Associates
__________________________________________________________________
J U D G M E N T
__________________________________________________________________
Sakala, CJ., delivered the Judgment of the Court.
Cases referred to:
1. Chitala V. The Attorney-General [1995-97] ZR91
2. Zinka V. Attorney-General [1990-92] ZR 70
3. Attorney-General of Zambia for and on Behalf of the
Republic of Zambia and Meer Care and Desai (a Firm) and Others (unreported)
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4. Zambia Democratic Congress Vs Attorney-General [2000] ZR 9
5. Council of Civil Service Unions and Others Vs Minister of Civil Service [1988] AC 374
6. Chiluba Vs Attorney-General Appeal No.125 of 2002
7. Chief Constable of North Wales Police Vs Evans [1982]1 W.L.R.1155
8. Council of Civil Service Unions V. Minister for the Civil Service [1984] 3ALL ER 950
9. Avalon Motors Limited (in receivership) Vs Bernard Leigh Gadsen and Motor City Limited [1998] ZR 58
10. Access Financial Services Limited and Access Leasing Limited Vs Bank of Zambia SCZ No. 7 of 2005
11. Kabimba Vs. Attorney-General and Lusaka City Council [1995/97] ZR 152
12. R Vs Huntington [1984] 1 ALL ER 63
13. Bone Vs Mental Health Tribunal [1985] 3 ALL ER 330
14. New Plast Industries Vs The Commissioner of Lands and Attorney-General SCZ No.8 of 2001
Legislation referred to:
The Banking and Financial Services Act, Cap 387
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This is an appeal against the Judgment of the High Court dated 1st September 2004, and the subsequent Order dated 3rd September 2004, signed by the trial Judge.
For convenience, the Appellant will be referred to as the Respondent Bank and the Respondents will be referred to as the 1st, 2nd and 3rd Applicants, respectively, which designations the parties were in the Court below.
The events leading to this appeal were not indispute. On 13th January, 2003, by a resolution of a special meeting held on the same date, the Respondent Bank resolved to take possession of the 2nd and 3rd Applicants pursuant to Section 81 of the Banking and Financial Services Act, Cap 387 of the Laws of Zambia. On the same date, the Governor of the Respondent Bank wrote to the Chairman of the 2nd Applicant informing him that the Respondent Bank had taken possession of the two Applicant Companies. One of the reasons given for taking the 2nd Applicant Company was that it was conducting its business in breach of the Banking and Financial Services Act and other laws as well as engaging in unsafe and unsound practices. Subsequent to the taking possession of the 2nd and 3rd Applicant Companies, correspondence with the Respondent Bank followed.
Thereafter, on 11th April, 2003, at another special meeting, the Respondent Bank passed another resolution that the 2nd and 3rd
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Applicant Companies be closed with immediate effect; that both Applicant Companies be wound up by way of compulsory liquidation; and that the Governor of the Respondent Bank be empowered to appoint a Liquidation Manager from among the staff of the Bank. This second resolution was made pursuant to Section 84B and 101 of the Banking and Financial Services Act, Cap. 387 of the Laws of Zambia.
On 17th of April, 2003, the Applicants applied and were granted leave to apply for Judicial Review in terms of Order 53, Rule 3, of the Supreme Court Rules. The application for leave was supported by an affidavit verifying the facts. The Originating Notice of Motion for Judicial Review was filed on the same date. The application for leave to apply for Judicial Review set out the facts, the reliefs and the grounds on which the reliefs were sought. The ground for review was stated to be illegality. Suffice it to mention that the Applicants also sought an interim relief for stay of the decisions of the Respondent Bank and also claimed for damages.
The Respondent Bank filed a lengthy affidavit in opposition, sworn by one Mr. Joseph Munyoro, a Senior Inspector in the Respondent Bank. The affidavit in opposition, outlined the breaches of the law and unsafe and unsound banking practices that formed the basis of the decision to close the Applicant Companies and place them under compulsory liquidation. Various documents, including the Inspection Report, were attached to the
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affidavit to support the breaches committed by the Applicants and the decision to close and place them under compulsory liquidation.
It was pointed out in the affidavit, in opposition that because of the seriousness, gravity and nature of the breaches allegedly committed by the 2nd and 3rd Applicants and in order to safeguard and preserve the integrity and suitability of the financial system, the Respondent Bank resolved on 13th January 2003, to take possession of the 2nd and 3rd Applicant Companies in accordance with Section 81(1)(c)(i) of the Banking and Financial Services Act; that in accordance with the provisions of Section 84B of the said Act, the notice announcing the Respondent’s action was posted in each of the Applicant Companies’ branch and to the Chairman of the Applicant Companies; that subsequent to the posting of the notice, the Respondent Bank proceeded to prepare the statement of the affairs of the assets and liabilities of the Applicant Companies as required by Section 84B of the Banking and Financial Services Act. The affidavit in opposition contained four pages of the breaches of the law and the unsafe and unsound practices.
It was also pointed out in the affidavit in opposition that after the statutory 90 days possession period, the Respondent Bank resolved to close and place under compulsory liquidation the Applicant Companies in accordance with Sections 84B and 101 of the Banking and Financial Services Act; that the decision to also place the 2nd Applicant Company, which appeared to be solvent,
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into compulsory liquidation, was necessitated by the extent and the nature of the unsafe and unsound practices which, in the Respondent’s opinion, facilitated criminal activities. The affidavit in opposition exhibited restriction notices from the Anti-Corruption Commission, freezing properties that were controlled by the Director of the Applicant Companies. That the unreliability of the financial records of the Applicant Companies contributed to making the decision of placing the 2nd Applicant Company under compulsory liquidation as well. That the decision was made in accordance with the Respondent Bank’s powers under Section 84B (a) (iv) of the Banking and Financial Services Act. That the Shareholders and the Directors of the Applicant Companies were informed of the Respondent’s decision in accordance with Section 101(2) of the Banking and Financial Services Act.
The case of the Applicants in the Court below was that the decision to close and place the Applicant Companies under compulsory liquidation was ultra vires as the said Applicants had never been declared insolvent; that there was a duty on the part of the Respondent Bank to consult the Shareholders of the Applicant Companies, since the decision to close the Companies was going to affect the Shareholders’ interest in the said Companies; that the Applicant Companies had legitimate expectation that the Shareholders would be consulted over the matters following the exchange of correspondence and several meetings held with the Respondent Bank, at which one meeting it was agreed that the
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affairs of the Applicant Companies would be discussed as soon as a report was ready.
The Applicants also contended that queries sent to the Applicants, the Shareholders and the Directors over the affairs of the Applicant Companies were answered, aimed at finding an amicable solution to the concerns raised by the Respondent Bank.
The case for the Respondent Bank was based on the lengthy affidavit in opposition in which it outlined the breaches of the law and unsafe and unsound banking practices which formed the basis of the decision to close the 2nd and 3rd Applicant Companies and placing them under compulsory liquidation.
The trial Judge noted that Judicial Review was not concerned with the merits of the decision giving rise to the application for Judicial Review; but with the decision making process itself. The trial Court reviewed the various authorities on Judicial Review and noted that in taking possession of the Applicant Companies, the Respondent exercised its powers under Section 81 of the Banking and Financial Services Act. Thereafter, the Court then set out the provisions of Section 81 of the Act and noted that where a bank or financial institution commits any of the breaches set out in Section 81, then the Respondent Bank may take any one of the supervisory actions set out in that Section; namely:
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Take possession of the Bank or Financial Institution;
Suspend it for a period not exceeding six months;
Restrict its licence or;
Revoke its licence.
The trial Judge pointed out that he should not be drawn into inquiring into the merits of the decision of the Respondent Bank; that Section 81(1)(i)(c) of the Act specifically provided that where in the opinion of the Respondent Bank, a bank or financial institution conducts business in breach of any written law or engages in a course of conduct that is unsafe and unsound then it can take supervisory action which includes taking possession of such institution or Bank under Section 81(2)(a). The trial Judge accepted that if the Respondent Bank was satisfied that the Applicant Companies had breached some laws and committed unsafe and unsound practices as outlined in its affidavit in opposition and as contained in the documents attached thereto, then the Respondent Bank was entitled to take possession of the Applicant Companies.
The Court noted, however, that where the Respondent Bank has taken possession of a bank or financial institution, a further action ought to follow, in the instant case, under Section 84B. The Court noted that it was common ground that in closing and placing the two Applicant Companies under compulsory liquidation, the Respondent Bank invoked Section 84 B as read
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with Section 101 of the Banking and Financial Services Act.
After setting out the provisions of Section 101, the Court found that in closing the Applicant Companies, the Respondent Bank acted by virtue of the powers conferred on the Respondent Bank by Section 84B (b) and Section 101(1) of the Act; that Section 84B gives the Respondent Bank powers to act in either of the two ways when it has taken possession of a bank or financial institution, namely:
(a) if a bank or financial institution is found to be solvent, the Respondent Bank would take one of the four actions listed under Section 84B(a); and
(b) if it is found that a bank or financial institution is insolvent, the Respondent Bank will take action under Part 4 of the Act which deals with insolvency, dissolution and liquidation.
According to the trial Judge, the meaning of Section 84B (b) as read with Section 101( 1) of the Act, is that if a bank or financial institution is found to be insolvent, the Respondent Bank may order it to be placed under compulsory liquidation; that the prerequisite of placing a bank or financial institution under compulsory liquidation; is that it is insolvent; and that conversely a bank or financial institution can not be placed under compulsory
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liquidation if it is solvent, but that the Respondent Bank would act under Section 84 B (a) of the Act.
The Court, however, found that from the documents and the affidavit evidence none of the events that constitute insolvency of a company happened or took place in terms of Section 86 of the Act; that it had not been argued that any demand for a debt to be paid by the two Applicant Companies had been made; and that they failed to pay such debt; or that a judgment creditor issued a process of execution but returned unsatisfied.
The Court noted that the alleged misappropriated US$9 million from the Intelligence Service was being contested in criminal proceedings and, in the circumstances, not a proven debt; that it had not been established that the Applicant Companies’ assets were not sufficient to meet its obligations; that the inspections the Respondent Bank conducted only revealed “disturbing evidence of wrong doing” at the two institutions, which included unsafe and unsound banking practices; that this did not constitute insolvency and could not be reason for placing the two Applicant Companies under compulsory liquidation.
The Court held that the Respondent Bank erred in placing the two Applicant Companies under compulsory liquidation when it was not established that they were insolvent; that similarly, the Respondent Bank committed an error of law when it purported to
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place the Applicant Companies under compulsory liquidation, when it was not established that they were insolvent.
The trial Judge then pointed out that where there was an error on the part of the decision maker, who acts without or beyond jurisdiction, the Court is entitled to intervene in the matter.
In conclusion, the trial Judge granted the Applicants the Order of Certiorari. The decision of the Respondent Bank to close the two Applicant Companies was quashed as being invalid and void and for being ultra vires. The trial Judge, however, pointed out that the Respondent Bank had an alternative remedy under Section 84 B (a) of the Act, if they wished to take any action. The Court ordered costs to follow the event to be taxed in default of agreement. Subsequent to the judgment, Counsel for the Applicants drew up a formal Order of Certiorari for the signature of the Court, which Order included an award for damages; hence the appeal to this Court.
The memorandum of appeal contained five grounds; namely:
that the Court below misdirected itself in law when it held that the Respondent could only order the compulsory liquidation of a bank or financial institution under Section 84B(b), as read together with Section 101(1) of the Banking and Financial Services Act. The
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Court below thus failed to appreciate that under Section 84B (a)(iv), the Bank was empowered to take any action which is necessary to enable it carry out its functions under the Banking and Financial Services Act, thus taking away the Respondent Statutory powers;
that the Court below misdirected itself in law and fact when it held that the Respondent failed to establish the insolvency of the second and third applicants before them;
that the Court below also misdirected itself when it dismissed the Respondents preliminary application challenging the use of the companies’ names (while the companies were in possession) in the suit against the Respondent;
that the Court below erred in law when it allowed the Applicant to be heard by way of Judicial Review instead of ordering them to Appeal as provided for in the Banking and Financial Services Act; and
that the Court below erred in law and in fact when it ordered, in the Order of Certiorari, that the Respondent pays damages to the Applicant occasioned or caused when they placed the 2nd Applicant and 3rd Applicant
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into compulsory liquidation a remedy not awarded in the Court’s original judgment.
On behalf of the parties detailed written heads of argument were filed with the Court based on these grounds. The written arguments were supplemented by oral submissions. In the oral submissions, Mr. N. Nchito argued grounds 3,4 and 5; while Mr. M. Nchito argued grounds 1 and 2. Mr. Sangwa, both in the written heads of argument and in the oral submissions, responded to grounds 1 and 2 together; and thereafter argued the rest of the grounds.
The summary of the written heads of argument on behalf of the Respondent Bank on ground one is that the Resolution passed by the Respondent Bank on 11th April, 2003, closing and placing the Applicant Companies in compulsory liquidation made no reference to insolvency; that Section 84B of the Banking and Financial Services Act, Cap 387 of the Laws of Zambia, is divided into two, namely: Section 84B(a), which refers to actions that can be taken if a company is solvent, and Section 84B(b), which refers to insolvent companies.
It was pointed out that the disputed portion of the judgment is the interpretation placed by the trial Judge on Section 84 B(b) as read with Section 101(1) of the Act, namely that:
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“……The prerequisite of placing a bank or a financial institution under compulsory liquidation is that it is insolvent. Conversely, a bank or financial institution cannot be placed under compulsory liquidation if it is solvent. In that case, the Respondent will act under Section 84B(a) of the Act.”
It was submitted that the above interpretation of the law and the Act by the trial Judge was not correct on three fronts. Firstly; that the trial Judge failed to appreciate that Section 101 of the Act is a provision distinct from Section 84 B(b). Secondly, that the trial Judge failed to appreciate the whole spectrum of the law of liquidation. And thirdly, that even if the Respondent Bank must proceed under Section 84 B(a) of the Act, in dealing with a solvent company, the Section still empowers the Respondent Bank to take any action necessary to carry out its functions.
It was submitted that this umbrella authority enables the Respondent Bank to place, under compulsory liquidation, a solvent company if doing so would mean fulfillment of its functions under the Act.
Dealing specifically with Section 101 of the Act, it was submitted that Section 101 of the Act gives the Respondent Bank a general power to place a financial institution under compulsory liquidation irrespective of its financial status; and that there is no
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requirement under the Act that Section 101 be read only in conjunction with Section 84B(b) of the Act; nor is there any requirement in the Act that Section 101 can only come into operation if a financial institution is insolvent. It was further submitted that pursuant to Section 101 of the Act alone, the Respondent Bank was within its powers to place any financial institution into compulsory liquidation; and that when Section 101 is invoked, as was the case here, the issue of insolvency does not come into play; and that the Section is there to allow the Respondent Bank to protect depositors from charlatan shareholders, who may hide behind ordinary company law to defraud depositors.
It was finally submitted, on Section 101, that the trial Judge was thus in error in holding that a solvent company cannot be placed under compulsory liquidation; and that such a position was contrary to Section 101 of the Banking and Financial Services Act.
On the law of liquidation, it was contended that the position that a financial institution can only be placed under compulsory liquidation if it is insolvent is also contrary to company law; that Section 272 of the Company’s Act, CAP 388 of the Laws of Zambia, lays a general foundation of when a company may be liquidated; that insolvency or inability to pay debts is one of the reasons; but that various other reasons can lead to compulsory liquidation of a company, such as where a Court may wind up a company if it is just and equitable to do so; and where the company
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has persistently failed to comply with the provisions of the Act. It was submitted that the trial Judge’s holding that insolvency was the prerequisite of placing a financial institution under compulsory liquidation was therefore a gross misdirection and a departure from well established principles of company law.
Turning to Section 84B(a)(iv) of the Act, it was pointed out that the Section empowers the Respondent Bank to take any action necessary to enable it fulfill its functions under the Act. It was contended that placing a solvent financial institution under compulsory liquidation would, in certain circumstances, amount to fulfilling the functions under the Act. It was submitted that the trial Judge failed to appreciate this argument and to address this Section of the law in his judgment. In support of this submission, a number of the functions of the Respondent Bank under the Act were cited. Also the case of Chitala V. The Attorney-General(1)was cited in which we said:
“……a decision which does not promote but frustrates the objects of the law would be an improper exercise of discretion”.
It was submitted that various Sections of the Act demonstrate that the power the Respondent Bank exercised was under the Act and that it is traceable to a legitimate source; and that the solvency of the 3rd Applicant did not invalidate the Respondent Bank’s
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decision. The case of Zinka V. Attorney-General(2) was cited in support of the submission. In that case, we observed that the President’s exercise of the power was traceable to a legitimate source; that the fact that he purportedly exercised that power under a wrong source did not invalidate his action.
It was contended that when the Respondent Bank took possession of both Applicant Companies, it conducted an inspection of the two companies; that the inspection revealed criminal breaches of the law and unsafe and unsound banking practices; that the inspection revealed that the two companies were used as special purpose vehicles to launder public funds misappropriated from government; and that the Report prepared by the Respondent Bank, exhibited in Court, gave a catalogue of breaches on the part of the Applicant Companies of unsafe and unsound banking practices.
It was further contended that the matters of unsafe and unsound practices and other breaches of the law on the part of the 2nd and the 3rd Applicants are matters of public record as per findings of the High Court of Justice, Chancery Division in the case of the Attorney-General of Zambia for and on Behalf of the Republic of Zambia and Meer Care and Desai (a Firm) and Others,(3) wherein the Court found that the 3rd Applicant acting through the 1st Applicant defrauded the Republic of Zambia of Billions of Kwacha.
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It was submitted that the Court’s findings in The Attorney-General of Zambia Case,(3) reveal significant proportions of wrong doing which formed a determining factor for taking possession of the 3rd Applicant Company. We were urged to address our minds to the findings which border on matters of public importance and directly relevant to this case.
It was pointed out that the trial Judge in his judgment acknowledged, that the Respondent Bank had sufficiently established “wrong doing” by the two financial institutions; but did not consider them sufficient ground to compulsorily liquidate the two institutions. It was submitted that it was wrong for the trial Judge to have concluded that “wrong doing” which bordered on crime was insufficient ground to liquidate a financial institution.
It was further submitted that the decision of the Respondent Bank of placing the two Applicant Companies into liquidation was in furtherance of its functions under the Act; and that had it not done so; it would have frustrated the aim of the Banking and Financial Services Act; that it would have been wrong for the Respondent Bank, having found evidence of criminal misconduct to have handed back the financial institutions to wind them up themselves.
Further submissions on ground one were that in the light of the unsafe and unsound banking practices and persistent breaches
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of the law on the part of the two financial institutions; there remained no doubt that the two Applicant Companies needed to exit from the financial market irrespective of whether they were solvent or not; that Section 84 B(a)(iv) of the Banking and Financial Services Act empowers the Respondent Bank to make such a decision irrespective of the financial standing of the institution.
In conclusion on ground one of the appeal, it was submitted that the Court below erred in holding that a financial institution can only be placed under compulsory liquidation only pursuant to Section 84B(b) as read with Section 101(1) of the Banking and Financial Services Act.
In his oral submissions, Mr. M. Nchito explained that ground two was in the alternative; but that he would place emphasis on ground one. In supplementing the written heads of argument on ground one, Mr. M. Nchito pointed out that the trial Judge decided to delve into the question of whether or not the two Applicant Companies were insolvent; thereby delving into the merits of the state and the well being of the two Applicant Companies.
On the question of solvency or insolvency, he pointed out that the Respondent Bank had carried out its own assessment that the 3rd Applicant was insolvent; that the Respondent Bank applied its own regulatory yardstick, where loans given were not performing; that if contingent claims being made against the Applicants by
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government on account of fraud were proved, the insolvency was going to be worse.
It was submitted that the trial Judge substituted the decision of the Respondent Bank on the Applicant Companies with his own decision that the two Applicant Companies were not insolvent; and that the determination of solvency or insolvency is a technical matter best handled by institutions like the Respondent Bank.
It was contended that having allowed, wrongly, the matter to proceed by Judicial Review, the trial Judge went on wrongly to open the decision of the Respondent Bank, which he was not competent to do as he was not sitting as an Appellate Court.
It was submitted that the Respondent Bank, as the protector of the public, is entitled to liquidate a bank under Section 101 when found wanting; that it was wrong to suggest that only when there is insolvency it’s when a financial institution can be closed.
The gist of the written heads of argument on behalf of the Respondent Bank on ground two is that the statement by the trial Judge in his Judgment that “in closing the Applicant Companies, it is agreed that the Respondent acted by virtue of powers conferred upon it by Sections 84(b) and 101(1) of the Act” was not a correct reflection of the issues.
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It was pointed out, as already noted in ground one, that Section 84B was made up of two subsections: Section 84B(a) and Section 84B(b). It was submitted that in the circumstances, the trial Judge laboured under a misdirection that the Respondent Bank acted pursuant to Section 84B(b) of the Act only, and thus did not address himself to Section 84(a) (iv) of the Act; and that as a result of this error, the trial Judge concentrated solely on the law of insolvency and made a determination appealed against.
It was further pointed out that Section 84B(a) was relevant in relation to the 3rd Applicant Company which was placed under compulsory liquidation pursuant to Section 84 B(a) (iv); while not proceeding with 2nd Applicant under Section 84B(b).
Further submissions on ground two were that the Court’s desire to have insolvency established beyond that already in the Report was misplaced as these were Judicial Review proceedings; that in Judicial Review proceedings, no further burden rested on the Respondent Bank to prove the financial status of a financial institution beyond that which appeared in the statement of affairs of assets and liabilities; that Judicial Review proceedings are limited in scope to addressing the decision making process; that the Court is not permitted to delve into the merits of a case, neither is the Court permitted to substitute the decision made by a lawful authority with one of its own. The case of Zambia Democratic Congress Vs Attorney-General,(4) was cited in support of these submissions.
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It was also submitted that in Judicial Review proceedings, a decision can be challenged on grounds of illegality as was done in the case at hand; but that the duty of the Court in the instant case was merely to establish that the decision maker understood the law that regulated its decision making power and gave effect to it. The case of Council of Civil Service Unions and Others Vs Minister of Civil Service(5) as followed by this Court in Chiluba Vs Attorney-General(6) was cited in support of these submissions.
It was pointed out that the law that regulated the decision made by the Bank of Zambia to liquidate the Applicant Companies is Section 84B and Section 86 of the Banking and Financial Services Act. It was contended that from the two Sections, the Bank of Zambia is empowered to take the following actions; namely: take possession of a financial institution (which they did and the Court below, even acknowledged that possession was lawfully done); prepares a statement of affairs of the assets and liabilities within ninety days – (which they did and the Applicants’ Attorney acknowledged the preparation of this document; but denied it that it did not meet the standards); and in the event the statement of affairs reveals insolvency, to place such an institution under compulsory liquidation.
It was submitted that in terms of the law and the steps taken by the Respondent Bank, the Bank complied with the directives of
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the law; and it understood the law that regulated its decision making process and gave effect to it.
In conclusion on ground two, it was pointed out that the trial Judge obviously overlooked the type of proceedings before him in arriving at his decision that insolvency had not been proved; that for the Respondent Bank to attempt to prove insolvency beyond what was already in the statement of affairs of assets and liabilities, was to demand of them to justify their findings in the Report; that such an attempt was tantamount to reopening the case and looking at its merits; but that these being Judicial Review proceedings, all parties were restricted in what they had to prove; that the Respondent Bank was restricted to prove that it understood the law relied upon and gave effect to it. It was submitted that this, they sufficiently did; and that the trial Judge erroneously required that they should have gone further; and that in so doing, the trial Judge substituted the finding of insolvency with one of his own; and thus acted in excess of his jurisdiction.
The combined written response to grounds one and two of appeal, which runs into twenty six pages commenced with setting out the facts common to both parties, followed by an academic critic of the development of the law on Judicial Review by making reference to various cases that included Zambia Democratic Congress V. The Attorney-General(4), observations of Lord Hailsham in Chief Constable of North Wales Police Vs Evans(7),
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the restatement of the law on Judicial Review by Lord Diplock in Council of Civil Service Unions V. Minister for the Civil Service(8); and statements of authors of Judicial Review of Administrative Action, London: Sweet and Maxwell, 1995. It was submitted that the proposition that Judicial Review is concerned with the procedure as to how the decision, which is the subject of the review was arrived at, provides only a very narrow basis for Judicial Review. It was pointed out that what Lord Diplock and not what Lord Hailsham said constitutes the universal current position of the law on Judicial Review of administrative action.
It was contended, on behalf of the Applicant Companies, that the decision to close and place the two companies into liquidation was illegal, whereas the position of the Respondent Bank was that the said decision was legal. It was submitted, on behalf of the Applicant Companies, that such dispute, according to Lord Diplock, can only be resolved by the Court. It was pointed out that the question for determination by the Court, in the instant case, was whether the Respondent Bank contravened or exceeded the terms of the powers which authorize the making of the decision, when it made the decision to close and liquidate the Applicant Companies. It was contended, on behalf of the two companies, that the Respondent Bank contravened the terms of the power which authorizes the making of the decision pursuant to Section 84B and 101 of the Banking and Financial Services Act.
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It was conceded that the law as it stands, authorizes the Respondent Bank to place a bank or financial institution into compulsory liquidation, subject to a number of pre-conditions, which must be met before it can happen. It was, however, contended, on behalf of the Applicant Companies, that the pre-conditions were not satisfied in the present case, thereby making the decision to close and liquidate the two companies ultra-vires the empowering provisions of the Banking and Financial Services Act.
It was contended that Section 84B provides three conditions before it can be evoked; namely: first, once a bank or financial institution has been taken over by the Bank of Zambia, a statement of affairs of the assets and the liabilities of the financial institution must be prepared; second requirement is in Section 84B(a), that is if the statement of affairs of the assets and liabilities of the financial institution shows that the institution is solvent, then Bank of Zambia has authority to do any of the following:
to restructure or reorganize the bank or financial institution;
to sell the bank or financial institution as a going concern;
to close the bank or financial institution, and
to take any action which is necessary to enable the Bank
of Zambia to carry out its functions under the Act.
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The third situation is under Section 84B(b), where a bank or financial institution is insolvent, then to take such action as considered appropriate under Part 4 of Chapter VII of the Act which provides for compulsory liquidation.
It was submitted that the situation provided for under Section 84B(a) and 84B(b) have to be construed disjunctively and not conjunctively; and that depending upon what is revealed by the statement of affairs, one can proceed either under Section 84B(a) or under Section 84B(b). It was further submitted that “any action” does not include compulsory liquidation covered under Section 84B(b) as read with Section 101; that “any action” in this context means “any action” similar to those outlined in (a) (b) and (c).
It was contended that even if a bank or financial institution is involved in unsafe and unsound practices or in breaches of the Act and other laws, it cannot be the basis of action under Section 84 B (a), which can only be relied upon if the statement of affairs of the assets and liabilities reveal that the bank or financial institution is solvent. It was submitted that the decision of the Bank of Zambia was not within the four concerns of Section 84B(a)(iv) of the Banking and Financial Services Act.
It was pointed out on behalf of the Applicant Companies that from the affidavit in opposition and the arguments there were
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serious contradictions showing that the Respondent Bank did not understand the law which they purported to act upon. It was submitted that breaches of the Banking and Financial Services Act and other laws; engaging in unsound practices is not and cannot be the basis for activating the powers of Bank of Zambia under Section 84B of the Act.
It was contended that the consequences of engaging in breaches of the Banking and Financial Services Act and other laws and for engaging in unsafe and unsound practices is provided for under Section 81(c)(i); and that a bank or financial institution cannot be placed under compulsory liquidation for breaches of the Banking and Financial Services Act and other laws and for engaging in unsafe and unsound practices. It was submitted that where in the opinion of Bank of Zambia, an inspection instituted under the Act shows that a bank or financial institution conducts its business in breach of any law or engages in unsafe and unsound practices, the Bank of Zambia shall take supervisory action against the bank or the financial institution.
It was pointed out that the supervisory action the Bank of Zambia may take, as a consequence of engaging in unsafe and unsound practices includes taking possession, suspending the licence for a period not exceeding six months, restricting and revoking of the licence of the bank or the financial institution.
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It was submitted that the supervisory action does not include closure and liquidation of a bank or a financial institution involved; that if Parliament wanted the Bank of Zambia to have power to place a bank or a financial institution into liquidation for being in breach of the act or any other laws or for engaging in unsafe and unsound practices, it would have expressly so provided; and that in the instant case; the allegations made against the two companies for taking them over were engaging in unsafe and unsound practices and breaching the Act and other laws and that these allegations could not be the basis for closure and liquidation of the two Applicant Companies, otherwise to agree on this issue would render Section 84 B redundant.
It was further submitted that for the Bank of Zambia to rely on the two companies being insolvent was a contradiction.
The rest of the written response to ground one and two were a repetition of the earlier submissions and a criticism of the Respondent Bank’s reliance on the provisions of the Companies Act when they purported to act pursuant to the provisions of the Banking and Financial Services Act.
In his combined brief responses to grounds one and two, Mr. Sangwa, on behalf of the Applicants pointed out that insolvency is provided under Section 85 of the Banking and Financial Services Act and it is an issue for the Court to decide and not the
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Bank of Zambia and that under Section 84B one cannot have it in both (a) and (b) as a solvent institution cannot be liquidated.
Counsel also pointed out that Section 101(1) of the Banking and Financial Services Act does not set out the circumstances, as the trigger in Section 84B; and that concerns of “wrong doing” are addressed in Section 81(C). It was submitted that the only time a Bank can be liquidated is in the case of insolvency; and that in the instant case, there was no allegation of insolvency as defined in Section 86. It was submitted that the trial Judge was on firm ground when he held that the closing and liquidating of the two Applicant Companies was ultra vires Sections 84B and 101(1) of the Act.
In his short reply to the responses, Mr. M. Nchito pointed out that although Section 81 takes care of “wrong doing”, possession is just the beginning of the process; but what happens after 90 days is provided for in Section 84 B.
The written responses further delved into the merits of the decision taken by Bank of Zambia in closing and placing the two Applicant Companies under liquidation. We do not, therefore, intend to delve into them as Judicial Review is not intended to discuss the merits of the decision; but with the procedure as to how the decision was arrived at.
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On account that a great deal of the arguments and submissions in this appeal have centred on grounds one and two, we propose to dispose of the two grounds first and as we see it, this appeal succeeds or fails depending on the view we take of the two grounds. We have, thus, deliberately reviewed the two grounds in great detail to narrow down the issue for determination, namely: Whether insolvency is the only ground upon which the Bank of Zambia can place a bank or financial institution under liquidation?
We have very carefully considered the judgment of the trial Judge, the affidavit and documentary evidence on record as well as the arguments and submissions on grounds one and two of appeal.
The Respondent Bank’s complaint in ground one is that the trial Judge misdirected himself in law when he held that the Bank of Zambia could only order compulsory liquidation of a bank or financial institution under Section 84 B(b) as read together with Section 101(1) of the Banking and Financial Services Act; and that in so holding the trial Judge failed to appreciate that under Section 84B(a)(iv), the Bank of Zambia is empowered to take any action which is necessary to enable it carry out its functions under the Act and thus taking away the Bank of Zambia’s Statutory Powers.
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The complaint on ground two is that the trial Judge misdirected himself in law and in fact when he held that the Bank of Zambia failed to establish the insolvency of the Applicant Companies.
The contention on behalf of the Applicants on the two grounds of appeal is that the decision to close and place the two Applicant Companies under liquidation was illegal and that the issue of illegality could only be resolved by the Court. It was, however, conceded that the law as it stands authorizes the Respondent Bank to place a bank or financial institution into compulsory liquidation but subject to a number of pre-conditions which must be met. It was submitted that the pre-conditions in the instant case were not satisfied; thereby making the decision to close and liquidate the two Applicant Companies ultra vires the empowering provisions of the Banking and Financial Services Act. Thus, the voluminous submissions on behalf of the Applicants centred on showing that the Respondent Bank did not establish insolvency before closing the two Applicant Companies.
At this juncture, we must point out that the law governing Judicial Review is very well settled. We accept that what Lord Diplock propounded constitutes the current position of the law on Judicial Review of Administrative Action. The trial Judge, very early in the judgment, correctly pointed out that:
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“Judicial Review is not concerned with the merits of the decision giving rise to the application for Judicial Review, but with the decision making process itself”
We totally agree with him.
In the case of Chief Constable of North-Wales Police Vs Evans(7), a case cited by the trial Judge, Lord Hailsham L.C. aptly stated the functions of Judicial Review as follows:
“It is important to remember in every case that the purpose of the remedy of judicial review is to ensure that an individual is given a fair treatment by the authority to which he has been subjected and that it is not part of the purpose to substitute the opinion of the Judicial officer or individual judges for that of the authority constituted by the law to decide the matters in question”.
In the case of Frederick Jacob Titus Chiluba Vs the Attorney-General(6), also cited by the trial Judge, this Court had this to say on Judicial Review:
“The Court will not… on a judicial review application act as “a court of appeal” from the body concerned, nor will the court interfere in any way in the exercise of any power, discretion which had been conferred on that body
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unless it has been exercised in a way which is not within that body’s jurisdiction”.
Indeed, Lord Diplock, in the case of Council of Civil Service Union Vs the Minister of Civil Service(8), answered the question of when a Court will subject decisions of inferior tribunals to Judicial review as follows:
“One can conveniently classify under three heads the ground on which administrative action is subject to control by judicial review. The first ground I would call ‘illegality’, the second ‘irrationality’ and the third ‘procedural impropriety’. That is not to say that further development on a case by case may not in due course of time add further grounds.”
And in the Chiluba case we said:
“Thus a decision of an inferior court or public authority may be quashed (by an order of certiorari made on an application for judicial review) where that court or authority acted without jurisdiction or exceeded its jurisdiction or failed to comply with the rules of natural justice in a case where all those rules are applicable or where there is an error of law on the face of the record or the decision is unreasonable in the Wednesbury sense.”
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In the instant case, after setting out and reviewing the provisions of Section 81 of the Act, the trial Judge accepted that where a bank or financial institution commits breaches under Section 81(1) of the Act, the Respondent Bank may take any one of the supervisory actions under Section 81(2).
Section 81(1) reads:
“81(1) where
a bank or financial institution refuses to comply within an Order or directive of the Bank of Zambia under this Act;
a bank or financial institution refuses to permit an inspection to be made as provided under this Act or obstructs an inspection;
in the opinion of the Bank of Zambia an inspection instituted under this Act shows:
that the bank or financial institution concerned conducts its business in breach of any written laws or engages in a course of conduct that is unsafe and unsound;
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that for any reason the bank or financial institution is under or is likely to become unable to continue its operations in the ordinary course of business;
the bank or financial institution’s capital is less than the prescribed minimum; or
the bank or financial institution is insolvent; the Bank of Zambia shall take supervisory action against the bank or the financial institution.”
And Section 81(2) reads as follows:-
“The supervisory action the Bank of Zambia may take includes:-
(a) taking possession of the bank or financial institution;
(b) suspending the bank’s or financial institution licence for a period not exceeding six months;
(c) restricting the bank’s or financial institutions’ licence; and
(d) revoking the bank’s or financial institution’s licence".
The court, properly so in our view, refused to be drawn into inquiring into the merits of the decision the Respondent Bank arrived at and which was the subject of Judicial Review. The Court
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accepted that if the Respondent Bank was satisfied that the Applicant Companies breached some laws and committed unsafe and unsound practices as outlined in the affidavit as contained in the documents attached thereto, then it was entitled to take possession of the Applicant Companies.
The taking possession of the Applicant Companies was not therefore in dispute.
The Court analyzed the further actions that follow taking possession. The Court found that the Respondent Bank closed and placed the Applicant Companies under compulsory liquidation by virtue of powers under Section 84B(b) as read with Section 101(1) of the Act.
The crux of the complaint in grounds one and two of appeal is against the passage, in the judgment, where the trial Judge stated as follows:
“The meaning of Section 84 B (b) and as read with Section 101(1) of the Act is that if a bank or financial institution is found to be insolvent the Respondent may order it to be placed under compulsory liquidation. The prerequisite of placing the bank or financial institution under compulsory liquidation is that it is insolvent. Conversely a bank or financial institution cannot be
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placed under compulsory liquidation if it is solvent. In that case the Respondent will act under Section 84B (a) of the Act”.
Section 84 B of the Act reads as follows:
“Upon taking possession of a bank or financial institution the Bank of Zambia shall prepare a statement of affairs of the assets and liabilities and shall within ninety days from the effective date of taking possession take any of the following actions:
Where the statement of affairs of the assets and
liabilities shows the bank or financial institution to be solvent:-
to restructure or reorganize the bank or financial institution;
to sell the bank or financial institution as a going concern;
to close the bank or financial institution;
to take any action which is necessary to enable the Bank of Zambia to carry out its functions under this Act: or
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(b) where the bank or financial institution is insolvent, to take such action as it considered appropriate under part 4 of Chapter VII of the Act.”
And Section 101(1) reads as follows:
“101 (1) The Bank of Zambia may by resolution order the compulsory liquidation, winding up or dissolution of a bank or financial institution; and where the Bank of Zambia makes an order under this subsection, it shall record the date, hour and minute of the passing of the resolution.”
On behalf of the Respondent Bank, it was submitted that the interpretation of Section 84 B and 101 (1) of the Act by the trial Judge was wrong on three fronts; namely: that Section 101 of the Act is a provision distinct from Section 84 B(b); that the trial Judge failed to appreciate the whole spectrum of the law of liquidation; and that even if the Respondent Bank proceeded under Section 84 B(a) of the Act, in dealing with a solvent company, the Section empowers the Respondent Bank to take “any action”, which umbrella authority enables the Bank to place into compulsory liquidation a solvent company.
The argument on behalf of the Applicants is that Section 84 B(a) and 84 B(b) must be construed disjunctively. We agree. It
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was, however, argued that the phrase “any action” in Section 84 B(a) does not include compulsory liquidation which is covered under Section 84 B (b). We do not agree with this interpretation. In our view, “any action” must include compulsory liquidation which can be taken even against a solvent company.
The trial Judge, after interpreting Section 84 B(b), which he said must be read with Section 101(1), proceeded to analyze when a bank or financial institution is “insolvent” and set out Section 86 of the Act, which states:
“For the purposes of this Chapter (VII), a bank or financial institution is insolvent when it ceases to be able to meet its obligations as they fall due or when its assets are insufficient to meet its liabilities”.
The Court found that the Section was self-explanatory and then went on to consider when a company is insolvent. The Court concluded that the two Applicant Companies were not insolvent as the inspections conducted by the Respondent bank only revealed “disturbing evidence of wrong doing” at the two institutions, which included unsafe and unsound banking practices. According to the trial Judge, this did not constitute insolvency and could not be the reason for having placed the two Applicant Companies under liquidation. The trial Court stated as follows:
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“The Respondent therefore erred in placing the two Applicant companies under compulsory liquidation as it was not established that they were insolvent”
In our view, by this approach, the trial Judge delved into the merits of the decision made by the Respondent Bank. Equally, the trial Judge’s insistence to have insolvency established beyond that which was in the Report attached to the affidavit in opposition was a misdirection since these were Judicial Review proceedings which were limited in scope to addressing the decision making process. The Court was not permitted to delve into the merits of the case neither was the Court permitted to substitute the decision made by a lawful authority, the Respondent Bank, with one of its own.
We have anxiously considered the submissions on grounds one and two of the appeal. We agree that in terms of the provisions of the Banking and Financial Services Act, the trial Judge was in error in suggesting or holding that a solvent company cannot be placed under compulsory liquidation. We agree that such a position is contrary to Section 101 of the Act.
Section 101 does not require the Respondent Bank to establish insolvency of a bank or financial institution. It gives the Respondent Bank a general power to place a financial institution under compulsory liquidation irrespective of its financial status. We agree that there is no requirement under the Act that Section
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101 be read only in conjunction with Section 84 B(b) nor is there any requirement in the act that Section 101 can only come into operation if a financial institution is insolvent.
We agree that when Section 101 is invoked the issue of insolvency does not come into play. The trial Judge was thus in error in holding that a solvent company cannot be placed under compulsory liquidation.
In our view, insolvency was not the only issue in the instant case.
It is quite clear to us that apart from insolvency, the Respondent Bank has a number of options to take in dealing with a financial institution.
The trial Judge equally misdirected himself in holding that a financial institution can be placed under compulsory liquidation only pursuant to Section 84 B (b) as read with Section 101 (1) of the Act.
We allow grounds one and two of appeal. On these grounds alone this appeal ought to succeed and we so order.
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On account of what we have said on grounds one and two, we find it unnecessary to delve into the remaining grounds in great detail.
The complaint under ground three of appeal is that the Court misdirected itself when it dismissed the Respondent Bank’s preliminary application challenging the use of the company’s names while the companies were in possession in the suit against the Applicants.
The summary of the arguments is that a Company in liquidation has no Locus standii apart from its Liquidator. It was submitted that the face and personality of a Company changes the minute it is placed under possession/receivership and or liquidation; that this change in personality is recognized at law, hence the requirement that any Company under receivership or liquidation should so include the appropriate terminology after its name.
The case of Avalon Motors Limited (in receivership) Vs Bernard Leigh Gadsen and Motor City Limited(9) was cited in support of the arguments and the submissions which was also cited with approval in the case of Access Financial Services Limited and Access Leasing Limited Vs Bank of Zambia(10) in which this Court noted that a financial institution under possession is akin to one under receivership and as such, a Shareholder or Director had
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no Locus standii to sue in the name of the financial institution possessed by Bank of Zambia.
It was pointed out that in the instance case the same Shareholder has maintained an action in his own name and the names of the Companies; that the Companies are no longer under possession but under compulsory liquidation. It was submitted that by necessary implication the ratio in the earlier case of the Supreme Court involving similar parties should apply; namely: that a Shareholder or Director cannot be allowed to maintain an action in the names of the Companies under compulsory liquidation; whether the said action is in a civil matter or one commenced by way of Judicial Review. It was submitted that it was erroneous for the trial Court to uphold the use of the Companies names as if the Companies were not under compulsory liquidation.
The oral submissions of Mr. N. Nchito substantially repeated the written submissions.
The summary of the written response to the arguments on ground three is that the trial Court was on strong grounds in rejecting the preliminary issue; that what was before the Court was not a suit but an application for Judicial review as opposed to a suit. The case of Kabimba Vs. Attorney-General and Lusaka City Council(11) was cited in support of these arguments. It was pointed out that the case of Avalon Motors Limited(9) in
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receivership did not apply to the facts of the present case; that the observations made in that case were relevant in a case of a suit and not in relation to an application for Judicial Review; and that the question of the receiver suing himself did not arise. It was pointed out that it is important to note that at the material time, 16th April 2003, when the Applicant Companies applied for leave to apply for Judicial Review of the Respondent Bank’s decision of 11th April, 2003, the Applicant Companies were no longer in possession, the 90 day possession period having expired on 11th April 2003; that the Respondent Bank’s arguments in ground three are totally unfounded in that no receiver or liquidation manager was ever appointed in the case; that according to the resolution made by the Respondent Bank on 11th April, 2003, which resolution is the subject of Judicial review, it was resolved and ordered that:
THAT Access Financial Services Limited and Access
Leasing Limited be closed with immediate effect;
THAT both Access Financial Services Limited and Access Leasing Limited be wound up by way of compulsory liquidation; and
THAT the Governor of the Bank of Zambia be empowered to appoint a Liquidation Manager from among the staff of the Bank.
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It was pointed out that the Governor of the Bank of Zambia had been specifically empowered to appoint a liquidation manager from among the staff of the Bank; that there is no evidence that between 11th April and 16th April 2003, when the Order for leave to apply for Judicial Review was granted, a liquidation manager had been appointed by the Governor of the Bank of Zambia. It was further pointed out that the Respondent Bank’s decision was made on Friday 11th April 2003, while on Wednesday 16th April 2003, leave to apply for Judicial Review was granted; that the Order granting leave was signed on the 17th April 2003 and specifically provided that all proceedings in respect of the decisions to close and place into liquidation the two Applicant Companies be stayed until after the hearing of the motion for Judicial Review.
It was submitted that according to the evidence on record, the Respondent Bank complied with the Order and never took any steps to implement the decisions of 11th April 2003 and that the liquidation of the Applicant Companies was stayed by the Court before it could be implemented and that as a result no liquidation manager was ever appointed, who could be said to be the rightful person to sue on behalf of the Applicant Companies. In relation to the case in which the two Applicant Companies sued the Bank of Zambia, it was pointed out that the inclusion of the two Applicant Companies was made at the instance of the Court and not at the instance of the first Applicant.
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In his oral response to the argument on ground 3, again Mr. Sangwa repeated his written arguments; but pointed out that even if the inclusion of the two Applicant Companies was found to be wrong, there was still the first Applicant, who could have brought the action on his own.
We have addressed our minds to the issues raised in ground three. Our short answer is that while we accept the law that the Shareholder/Director cannot be allowed to maintain an action in the names of Companies under compulsory liquidation, its clear from the sequence of events in the instance case that the Respondent Bank at the material time had not yet appointed the liquidation manager. However, there was the first Applicant, who in our view, could still have proceeded with the action in the absence of the two Applicant Companies. We, therefore, dismiss this ground of appeal.
On ground four, the summary of the ground is that the trial Court erred in law when it allowed the Applicants to be heard by way of Judicial Review, instead of ordering them to appeal as provided by the Banking and Financial Services Act.
The summary of the arguments is that the Applicants were aware of the appeal procedure provided under Section 101 of the Banking and Financial Services Act; but opted for Judicial Review as it was, according to them, more convenient and effective given
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the nature of the relief sought. The cases of R Vs Huntington(12) and Bone Vs Mental Health Tribunal(13) were cited as supporting the procedure used by the Applicants in which it was said:
“There is no doubt that the case at hand is of much public interest as it is financial institutions which were closed and placed under compulsory liquidation. Judicial review is the more preferable than an appeal as it is more convenient especially taking into account public interest”.
It was pointed out that the holding of the trial Judge was contrary to the two decisions handed down by this Court in 2001 and 2005; namely: New Plast Industries Vs The Commissioner of Lands and Attorney-General(14) in which this Court held that:
“It is not entirely correct that the mode of commencement of any action largely depends on the relief sought. The correct position is that the mode of commencement of any action is generally provided for by statute”.
And also the case of Access Financial Services Limited and Access Leasing Limited Vs Bank of Zambia(10) in which this Court rejected the argument that Judicial Review Process can be resorted to on grounds that it is wider in terms of remedies. It was
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submitted that the holding of the court below was erroneous and should be set aside.
In the oral submissions Mr. N. Nchito repeated the written submission but pointed out that Judicial Review Process is not a buffet; that parties cannot come to Court and choose the method of commencing the action merely on the basis of a remedy; and that the Court Rules and Statutes provide guidance.
The summary of the written response to ground four was that while Section 101(3) of the Banking and Financial Services Act provides for the right of appeal, it is a qualified right; that it is the person so notified in terms of the Section who has the right of appeal under Section 101 of the Act; that in the instant case, there was no evidence that the Applicants received notice of the Order for compulsory liquidation to entitle them to the right of appeal.
In the oral response it was pointed out that the only person who had notice of the compulsory liquidation was the Chairman and that therefore, it was only him who had the right of appeal under Section 101 of the Act.
It was contended that if no notice was given, no right accrued and therefore that the 1st Applicant who did not receive the notice, no right accrued to him and therefore could not appeal.
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We have considered the arguments of both parties on ground four. The arguments in response are very attractive but not correct. Indeed, if the Chairman of the Applicants received notice, the Section is very clear. It states that “every person notified” should have a period of 30 days to file any objection or appeal to the Court. It does not say “everybody notified”. What we stated in New Plast Industries(14) and in the recent case of Financial Services Limited Vs Bank Zambia (10) still stands as good law. This ground of appeal is, therefore, allowed.
The gist of ground five is that the Court erred in law and in fact when it signed an Order of Certiorari that required the Respondent Bank to pay damages to the Applicants occasioned or caused when they placed the Applicant Companies into compulsory liquidation, a remedy it did not award in the original Judgment.
It was common cause that the Application included a claim for damages. But, the trial Court did not make a pronouncement on the award of damages. In their arguments, the Respondent Bank contended that the award of damages was in excess of the Court’s jurisdiction and should be quashed.
In response, it was pointed out that if the contention is that the Court should have expressly pronounced on the award of damages in favour of the Applicants then the matter should be remitted to the Court below so that such a pronouncement is made.
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At the outset, we want to observe that Counsel for the Applicants must have been in possession of the Judgment delivered by the Court. If they wanted the award of damages to be included in the Order of Certiorari, they should have moved the Court appropriately. It was a very serious move to take to file an Order, which included remedies, upon which the trial Judge did not make any pronouncement. This ground of appeal is also allowed.
In conclusion, out of the five grounds of appeal, four have been successful; while one has been unsuccessful. In the result, the whole appeal is allowed, the Judgment of the trial Court is set aside. Costs will follow the event to be taxed in default of agreement.
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E.L. Sakala
CHIEF JUSTICE
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L.P. Chibesakunda C.S. Mushabati
SUPREME COURT JUDGE SUPREME COURT JUDGE
