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On 14 February 2008 the Respondent’s Board passed a resolution that the Appellants be placed under compulsory liquidation pursuant to section 85 (1) of the Banking and Financial Services Act Chapter 387 of the Laws of Zambia. The Appellants appealed against the resolution of the Respondent’s Board. The High Court stayed the decision of the Board on the basis that the Board of the Respondent had not followed the correct procedure and that the Appellants should proceed to conduct “normal business operations pending the decision of this matter”. The High Court also awarded the Appellants both general and consequential damages. The Respondent then appealed the High Court’s decision to the Supreme Court. The Supreme Court upheld the High Court’s decision and the issue on assessment of damages was referred to the Deputy Registrar. At assessment, the Appellants alleged that because of the Respondent’s resolution, they had been prevented from carrying on their business from 2008 up to 2012 and as such claimed as loss of business a sum of K 88 197 344 880 (Old currency) for the four-year period, and consequential losses under several heads of damages in the sum of K 44 566 369 637. 25 (old currency). The Respondent on the other hand alleged that the Appellants’ application for a general insurance licence for the year 2008 was rejected in 2007. They appealed against this rejection to the Minister of Finance who dismissed the appeal in December 2008. The Appellants did not challenge that decision. As for the resolution to place the Appellants under compulsory liquidation, the Respondent argued that this was made on the 14 February, 2008 but on 20 February, 2008, the Appellants obtained a court order which permitted them to carry on normal business until their challenge was determined. The Appellants in fact resumed operations immediately and continued operating, without renewing their licences, up to 2011. and therefore the Appellants did not suffer the damages as claimed. The learned Deputy Registrar held that, in the absence of a licence, the only business that the Appellants were permitted to carry on under the High Court's order was the collection of debts that fell due during the period that they had operated with a licence. Consequently, the Deputy Registrar held that the Appellants were entitled only to nominal damages for the 6 days that they remained closed as a result of the annulled decision to place them under compulsory liquidation, and awarded the sum of K 10 000 000 (K10 000 rebased) as nominal damages. The Appellants appealed against the Deputy Registrar’s award, contending among other things, that the order of stay allowed them to carry on normal operations until the appeal was disposed of, without the requirement to obtain the requisite licences; and further that in the Respondent’s initial appeal to the Supreme Court, the Respondent raised objection to the award of damages on the ground that the Appellants did not have insurance licences. Since that was not raised in the High Court and could, therefore, not be raised in that appeal, once the Supreme Court decided that the issue of the licences was not a consideration in deciding the Respondent's liability, it could not thereafter be a consideration in deciding the quantum of such liability.
1. The meaning of the order staying the Respondent’s decision and allowing the Appellants to continue normal operations could only be discerned properly from the context in which it was made. On the face of the order, it is clear that it was obtained for the purpose of staying the decision that had been taken by the Respondent's board to compulsorily liquidate the two Appellant companies. When the High Court issued the ex parte order staying the resolution of the respondent's board, and also ordered the Appellants to carry on their normal business operations, it meant that, for the time being, the Respondent's resolution could be ignored and the Appellants could continue operating as before. Prior to the Respondent's board's resolution, the Appellants were
carrying on normal business operations, which entailed compliance with all relevant laws including the Insurance Act. This meant that whenever due, the Appellants were required to apply for renewal of their licences.
2. Given the context in which it was made, the High Court order does not support the Appellant's notion that it permitted them to operate without a licence up to 2012, when the matter had even been disposed of in the Supreme Court. The High Court determined the matter within 2008 and therefore, the High Court order expired when the matter was determined by the High Court in 2008. There was no evidence that the Appellants obtained a similar order pending Supreme Court determination.
3. In the Respondent's initial appeal, the real challenge to the damages was only mounted in the Supreme Court, hence, the Respondent's ground of appeal which raised issue with the award of damages when the Appellants had not been trading with a licence was not entertained. That was because that issue had not been raised in the High Court. The refusal to entertain that ground did not amount to an endorsement of the Appellant's misconceived notion that they were entitled to operate without a licence.
4. In Tort one of the major principles that define the scope of damages that can be awarded to a person is that of "remoteness of damages". It is not always realised that there are two aspects of remoteness. The first aspect of remoteness concerns causation: the question to be answered is whether the defendant caused the particular damage to the plaintiff. The second aspect of remoteness, which on a strict analysis arises only after the issue of causation has been settled and settled in the plaintiffs favour, concerns the extent of the protection which is afforded by the plaintiff: the question to be answered is whether the law protects the plaintiff from the particular damage that he has suffered.
5. Indeed in this case, the principle of remoteness in its causation aspect was or ought to have been the primary concern in assessing damages. The order sought by the Appellants with regard to damages was strictly for the damage caused by the closure of their business, seizure of their property and freezing of their accounts when the Respondent's board passed the resolution to liquidate the Appellants. The High Court found the resolution to have been unlawful and, consequently, awarded the Appellants damages and consequential losses arising from the unlawful closure of business. The damages to be assessed were only to be those arising from the unlawful closure of the Appellant’s business as a result of the unlawful resolution by the Respondent’s board. Any other damages sought from outside of this scope would be said to be remote