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High Court dismisses Nefussy’s application in Gemcanton case

THE Ndola High Court has dismissed Franco Finance Limited and Eliezer Nefussy’s application to set aside, for irregularity, abuse of court process and multiplicity of actions, summons and claims in a Gemcanton accounts case.

In a ruling passed on December 19, 2018 in Ndola, judge M. C. Mulanda dismissed the application to set aside the writ of summons and statement of claim as it was not properly authenticated, being registered outside Zambia.

The plaintiffs, Gemcanton Investments Holdings Limited and Wolle Mining Limited) on October 22, 2018 filed a notice to raise a Preliminary issue on a point of law.

Wolle Mining Limited is a 50 per cent shareholder in Gemcanton Investments Holdings Limited and commenced a derivative action against Frango Finance Limited and Nefussy, seeking various reliefs.

Nefussy was representative of Frango Finance Limited, which nominated him as the chief executive officer and director of Gemcanton Investments Holdings Limited.

On September 26, 2018, an ex-parte order of Interim Injunction was granted by the court, restraining Nefussy, whether by himself or by his servants or agents from exercising his duties as a signatory for the Gemcanton Investments Holdings Limited. The said injunction further ordered and directed that the other signatory, Ba Abdoul, be allowed to make payments on Gemcanton account.

In both cases, the Order was to remain in force pending the inter-partes hearing of the application for an interlocutory injunction.

However, before hearing of application for interlocutory injunction could take place, the defendants, on October 10, 2018 filed an application to set aside the writ of summons and statement of claim for irregularity, abuse of court process and multiplicity of actions.

They argued that the writ of summons and statement of claim was filed in breach of section 331 of the Companies Act No. 10 of 2017 thereby rendering the entire originating process a nullity.

They stated that the claims in the Writ of Summons and statement of claim partly formed the basis of another derivative action under cause number 2018/HN/164 and therefore amount to multiplicity of court actions.

The plaintiffs, on the other hand, challenged Nefussy and Frango’s application through notice of intention to raise preliminary issue on a point of law.

They submitted that the application to set aside their writ of summons and statement of claim was highly irregular before court [in Ndola] and should be set aside with costs.

In his ruling, judge Mulanda said he would only address the notice of intention to raise Preliminary Issue on a Point of Law that the Plaintiffs filed on October 22, 2O18.

Mr Z. Muya, according to the documents, had informed the court that at the time the preliminary application was filed, the affidavit in support of the application to set aside the writ of summons and statement of claim and the affidavit in opposition to the injunction application, were filed as a combined affidavit.

“He also stated that, later on, the affidavit was split into two, and, therefore, that the two affidavits were answering to either of the applications. He also indicated that in raising this preliminary application, the Plaintiffs would only be attacking the affidavit dated the 16th of November 2018. I have noted that this affidavit is the one that supports the application to set aside writ of summons and statement of claim for abuse of court process and multiplicity of actions,” judge Mulanda said.

He said the consented argument by the plaintiffs, against the affidavit filed on November 16, 2O18, was that it was not a valid affidavit as it was not notarized in accordance with provisions of the Laws of Zambia, which requires that the notarized document must have a signature and a seal of office of the notary public.

He noted that the plaintiffs argued that the affidavit should be expunged from the record for flouting, not only the procedure, but the law relating to authentication of documents executed outside Zambia.

“I have scrutinised the manner in which this affidavit was executed in Windhoek. Even though the country where the said Windhoek is situated was not mentioned in the said affidavit, I take judicial notice that Windhoek is the capital city of the Republic of Namibia, and, therefore, that it is situated outside the Republic of Zambia. That being case, Section 3 of the Authentication of Documents Act, Cap. 75 of the Laws of Zambia, comes into play in as far as the affidavit that was executed in Windhoek is concerned,” judge Mulanda stated. “I have noted that although this affidavit is purported to be signed by a notary public, it is bearing a stamp, and not a seal of a notary public as required by law. Having scrutinised all the paragraphs tabulated in the said Section 3, I have noted that they all make it clear that for a document executed outside Zambia, to be deemed to be sufficiently authenticated for the purpose of use in Zambia, it has to be duly authenticated by a notary public under his signature and seal of office.”

Judge Mulanda noted that the plaintiffs had urged the Court to take judicial notice of their position that a seal was either embossed and accompanied by a wafer or hot-wax and that the said seal, commonly in Zambia, was usually red in colour and, if it is the embossed one, the embossment was not in ink, but was an impression on a paper sought to be notarized and that the description on the seal of office appears other than in ink.

“I take judicial notice of this fact, as it is a matter that is commonly and publicly known to be so, for which no further proof is required before this Court. Having already noted that there is no seal of a notary public, but only a stamp of the notary public on the said affidavit, I have further noted that there is no mention, in Section 3 of the Authentication of documents Act, Cap 75 of the Laws of Zambia, of authentication by a notary public under his signature and ‘stamp’ of office,” judge Mulanda said.

“The case of LUMUS AGRICULTURAL SERVICES COMPANY AND OTHERS VS GWEMBE DEVELOPMENT COMPANY LIMITED (In Receivership) (1) cited by the Plaintiffs, fortifies the provisions of Section 3 when it held that for a document executed outside jurisdiction to be admissible in evidence in Zambia, it must be authenticated in accordance with the provisions of Section 3 of the Authentication of Documents Act, Cap. 75 of the Laws of Zambia.”

Judge Mulanda further noted that apart from not bearing a notarial seal, the affidavit in contention, filed into Court on November 16, 2018, did not bear the address of the notary public.

“Further the stamp of the notary public does not indicate the country where the notary public was at the time of stamping the affidavit. All these inadequacies, question the notarization or the authentication of that affidavit. For this reason, it becomes a paramount duty of a Notary Public to strictly, and with due care, observe, the requirements of the relevant law on authentication of documents in the execution of his duties as a Notary Public,” judge Mulanda said. “Further, when a document is notarized by a Notary Public, and he affixes his notarial seal on it, he converts that document into a public document. Consequent to this, the Court will have faith in the document, as it will have credit upon its face. Accordingly, I am in agreement with the Plaintiffs’ submission that if an affidavit executed outside Zambia as in the current case, is not properly authenticated, it cannot be admitted in evidence before the Zambian courts, as it does not meet the criteria for authentication as provided for under Section 3(c) of the Authentication of Documents Act, Cap. 75 of the Laws of Zambia.”

Judge Mulanda said he found the affidavit in support of the application to set aside the Writ of Summons and statement of claim was not properly authenticated.

He also dismissed an argument by Dickson Jere, counsel for the defendants, that the court had jurisdiction to admit a document even if it was not properly executed.

“I have noted that Order 5 rule 13 of the High Court Rules, Cap. 27 of the Laws of Zambia gives the Court or a judge discretion to permit an affidavit to be used notwithstanding that it is defective in form according to these rules, if the Court or a Judge is satisfied that it has been sworn before a person duly authorised. However, in the case of affidavits sworn outside Zambia, there is an additional requirement, which is prescribed under Section 3 of the Authentication of Documents Act, Cap. 75 of the Laws of Zambia quoted above.

Judge Mulanda said the said affidavit could not, on the basis of that order and rule, be admitted into evidence and used by his court.

“Mr Jere argued that authentication deals with the actual documents, that is, the Share Agreement and not the affidavit. I totally disagree with this submission, because, under Section 3 of the Authentication of Documents Act, Cap. 75 of the Laws of Zambia, an affidavit is included in the definition of documents that are required to be authenticated,” he said.

On Jere’s submission that authentication of documents was only an issue where a third party wanted to rely on a document executed outside the country, Judge Mulanda said he was inclined to accept the plaintiffs’ submission that the affidavit in issue was being tendered into court which knew nothing about the parties, other than the issues that were brought before it and, therefore, there is need for authentication.

He also dismissed as flowed Jere’s argument that authentication was not necessary where parties had been dealing with each other.

He also concurred with the plaintiffs’ submission that it was not in the interest of justice for court to admit documents that do not adhere to laid down or established rules, because such rules might be of no purpose if documents that flout them are admitted in evidence.

“In this regard, I concur with the Plaintiffs, and wish to emphasise, that where the law has specifically made provision as to the manner of admissibility of documents, the Court has no latitude to admit a document that is improperly filed into court. In any such case, a Zambian Court has no jurisdiction to even read or interpret any of the contents of that affidavit. Accordingly, counsel’s argument on this aspect is misguided and contrary to the principle of law laid down in section 3 of the Authentication of Documents Act, cap. 75 of the Laws of Zambia,” judge Mulunda said.
“Since the said affidavit was not executed in accordance with the provisions of Section 3 of the Authentication of Documents Act, and does not fall under the exception provided for in Section 5 of the said Act, legally, it is improperly before this Court. In other words, there is no affidavit before this Court and, accordingly, the issue of admitting the same and using it in evidence before this Court does not arise. However, for the avoidance of doubt, and for the purpose of making this Court’s record straight, I expunge from the record of this Court, the affidavit in support of the application to set aside the writ of summons and statement of claim, which affidavit is dated 16th November 2O18. Where an affidavit is not admitted into evidence, no application raised in form of summons should be heard by this Court. I, therefore, set aside the Summons to Set Aside the Writ of Summons and Statement of Claim and the supporting affidavit.”

Judge Mulanda said even though he was not dealing with application for an injunction, which was still pending, the Affidavit in Opposition to an Order of Interim Injunction, filed by the Defendants, on 16th November 2O18, had the same defects which the affidavit in support of the application to set aside the writ of summons and statement of claim had.

He noted Order 5 rule 14 of the High Court Rules, Cap. 27 of the Laws of Zambia, which provides for amendment and re-swearing of a defective affidavit, by leave of the court or judge.

“Accordingly, if the Plaintiffs still wish to challenge the regularity of the Writ of Summons and Statement of Claim filed in this matter, they are at liberty to file a properly executed affidavit to replace this defective affidavit, before the hearing of the application to set aside the writ of summons and statement of claim can take place,” he advised. “In that light, I order that the said affidavit be filed into Court within 21 days from today. I also order costs of this application to be paid by the Defendants to the Plaintiffs within 21 days from today (December 19, 2018).”

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