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The Appellant and Respondent were in a banker/customer relationship. The Respondent obtained several loan facilities from the Appellant, including a term loan facility obtained to consolidate the existing facilities into a single loan of US$10 000 000. 00. The term loan facility was also meant to settle the balance sum of US$3 408 624.65. The tenor was 60 months, equating to 60 monthly instalments.
During the course of the banking relationship, the Appellant bank was acquired by Atlas Mara Group on 30 June 2016. On 24 January 2017, a letter of demand for the full settlement of the sum of US$12.229 065.63 million was made to the Respondent. The Respondent was to pay the sum owed within 14 days, failure to which a receiver and a manager would be appointed to ensure recovery of the debt.
The Respondent subsequently commenced an action against the Appellant, seeking, amongst other things, an injunction to restrain the bank from prematurely appointing a receiver to manage its affairs. Upon the Respondent filing a defence to the counter claim, the Appellant applied for entry of judgment on admission, deposing in its affidavit that the Appellant had admitted to owing the counter claimed sum of US$12 229 065.63.
The High Court Judge held that granting the judgment on admission would fly in the teeth of his ruling dated 13 July 2017 which held that the issues raised could only be determined at trial. In addition, the Court further stated that granting the remedy and relief sought by would be tantamount to terminating the Plaintiffs’ action without being given an opportunity to be heard as dictated by one of the rules of natural justice audi alterem patem.
The Appellant appealed.
1. The Court has discretionary power to enter judgment on admission under Order 27 of the High Court Rules. This power is exercised in only plain cases where admission is clear and unequivocal.
2. An admission has to be plain and obvious, on the face of it without requiring a magnifying glass to ascertain its meaning. Admissions may be in pleadings or otherwise. A court cannot refuse to grant judgment on admission in the face of clear admissions.
3. A judgment on admission can be entered before determining whether the admitted sum can be liquidated in instalments. The entry of judgment on admission has no bearing on other claims.
4. An applicant must satisfy the threshold for issuance of interlocutory injunctions, that is: there must be a prima facie case with a probability of success, that the applicant will suffer irreparable injury which would not adequately be compensated by an award of damages and if the court is in doubt, it will decide the application on the balance of convenience.
5. A prima facie case is one in which on the material presented, a court properly directing itself, will conclude that there exists a right which has apparently been infringed by the other party.
6. A debenture security provides for the appointment by the secured creditor upon any default by the debtors or occurrence of specified events, of a receiver with powers to carry on the company’s business with the view of reviewing the company or to the beneficial sale of the entity as a going concern.
7. A debenture holder has the right to exercise its contractual right pursuant to the debenture upon clear default.
8. The court will not normally interfere with the appointment of a receiver under the terms of a debenture holder, unless it is not for the benefit of the holder or the appointment was in bad faith. A debenture often gives power to appoint a receiver and manager in specified events.
9. Parties in a contractual relationship are bound by the contract. The value of the security is not a basis to challenge the appointment of a receiver where the bank intends to realize the security as a debenture holder.
10. A debtor cannot restrain the appointment of a receiver by a creditor pursuant to a debenture, where there is a clear default by the debtor. The default disentitles the applicant from seeking the aid of equity.
The Brief facts leading to this appeal are that Willard Solomon ' Nthanga and 52 others commenced an action against the, respondent in the High Court on 28th November, 2000. The learned Deputy Registrar then ordered the joinder of 201 more plaintiffs and the number of plaintiffs increased from 53 to 254. On 8th September, 2003, the learned Judge also granted an application allowing the plaintiffs to amend the writ of summons to add 81 more individuals as plaintiffs, which further increased the number of plaintiffs to 334. The events that followed are at the centre of the dispute in this appeal. It is not clear whether the plaintiffs made a subsequent application to join 68 more individuals as plaintiffs. However, the record shows that on 10th February, 2005, Counsel for the plaintiffs filed an application to amend the writ of summons to add 68 more plaintiffs.
The application was supported by an affidavit in which Mr. Mukande SC deposed that he had received further instructions that a number of former employees were not included on the amended writ of summons which the plaintiffs had filed earlier. It should be noted that there is nothing on record to show that this application was heard or that it was granted by the Court. The matter proceeded to trial and the 68 individuals participated in the proceedings as if they had been formally joined. The number of plaintiffs on record also increased from 334 to 402. After trial, the High Court found in favour of the plaintiffs.
The plaintiffs were again successful when the matter went on appeal to the Supreme Court and it was referred to the learned Deputy Registrar for assessment. At assessment, a preliminary issue was raised by State Counsel Silwamba on behalf of the appellant that the 68 individuals were wrongly before Court because there was no Court order joining them to the proceedings as plaintiffs. The learned Deputy Registrar heard the preliminary objection and dismissed it. He found that the plaintiffs filed an application for leave to amend the writ of summons, which was intended to achieve the joinder of the 68 individuals to the proceedings. He noted that although the application was filed, there was no order granting the application but the 68 individuals were subsequently treated as part of the proceedings.
The learned Deputy Registrar found that the erroneous joinder 1 of the 68 individuals was a pure procedural failure, which could not be wholly blamed on them. He took the view that striking out the 68 individuals as plaintiffs would entail a total failure or defeat of the suit, which would be at odds with Order 14 rule 5(3) of the High Court Rules which provides that no suit shall be defeated by reason of non-joinder or misjoinder of parties. The appellants appealed to a Judge of the High Court against the decision of the Deputy Registrar. The learned Judge found that while the application to join the 68 individuals was made, there was no Court order granting the application. He took the view that the learned Deputy Registrar's decision which was based on Order 14 rule 5(3) of the High Court Rules was invalid in that striking out the 68 individuals would not have resulted in the defeat of the suit as assessment would still have proceeded with the valid parties to the suit. In his view, the fact that the 68 individuals took part in the prosecution of their claim both in the High Court and the Supreme Court was sufficient proof that their application was made before Judgment.
He was satisfied that this was a proper case in which to exercise his inherent jurisdiction to formalize the addition of the 68 persons as Plaintiffs. He therefore dismissed the appellant's appeal and ordered that the 68 individuals be formally deemed to have been added to the suit with effect from a date which was 21 days after they filed their application to amend the writ of summons. It is against the decision by the learned Judge that the appellant appealed to this Court advancing two grounds of appeal expressed in the following terms:
In view of the glaring irregularities that we have highlighted in this matter, it is our considered view that the learned Judge in the Court below did not properly exercise his inherent jurisdiction. We shall therefore allow this appeal and set aside the decision of the learned Judge and that of the learned Deputy Registrar. We make no order as to costs.
This appeal was against the ruling of the High Court in which the appellant's application for joinder of the second respondent as a party to the proceedings was declined. This followed, the Minister of Mines, Energy and Water Development’s decision to cancel the petroleum exploration issued to the Appellant in respect to Block 31. The appellant appealed the decision of the minister to the High Court and whilst the appeal was pending, Block 31 was re-advertised by the minister and a licence was issued to the second respondent. This prompted the appellants to make an application for an order for joinder of the second respondent to the proceedings.
The court had to decide whether the joinder was necessary and whether the lower court had erred in its findings.
The court held that for a party to be joined to the proceedings it must either be a person who may be entitled to, or claim some interest in the subject matter of the suit or who may likely be affected by the result or outcome of the suit.
The cancellation of the appellant’s licence and the granting of a licence to the second respondent, related to the same subject matter, being Block 31. This gave the second respondent sufficient interest in the matter and was likely to be affected by the outcome of the decision in the court below.
The appeal was consequently allowed.