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The Road Development Agency (the Agency) is a statutory body that was established under the Public Roads Act No.12 of 2002 (Public Roads Act). It is tasked with planning, managing, and coordinating the road network in Zambia, as well as providing care, maintenance, and construction of public roads.
Following proposals made by the Ministry of Housing and Infrastructure Development as well as other stakeholders, the Parliament of Zambia enacted the Public Roads (Amendment) Act No. 9 of 2022 (Amendment Act) on 11 August 2022, which amended the Public Roads Act.
Section V6A – Immunity for Execution
The Amendment Act has introduced various sections to the Public Roads Act including section 76A, which provides as follows:
In essence, where a successful litigant has obtained a judgment against the Agency, section 76A (1) prohibits the issue of writs of execution against the Agency. Therefore, although a person can commence an action against the Agency and may obtain favourable judgment, such a person is precluded from enforcing such judgment or court order against the Agency by way of writ of execution.
In terms of section 76A (2), the Agency is required to pay judgment sums to successful litigants from its revenue. Thus, although successful litigants are precluded from issuing writs of execution against the Agency, the Amendment Act does not preclude the payment of a judgment sum by the Agency, and such payment of judgment sums is to be made out of the Agency’s revenues.
Analysis of Section 76A of the Public Roads Act
In terms of the Public Roads Act, the Agency, which is a body corporate, can sue and be sued in its own capacity. Accordingly, a person can bring an action against the Agency, and obtain judgment against the Agency. Prior to the Amendment Act, there was no provision that precluded the issue of writs of execution against the Agency and, therefore, in the absence of such an express preclusion, a successful litigant could issue a writ of execution against the Agency in order to enforce a judgment.
Although we are not aware of any matters in which a writ of execution was issued against the Agency, the proposals from the Ministry of Housing and Infrastructure Development, as well as other stakeholders in respect of the Amendment Act, allude to an increase in lawsuits being commenced by contractors and private individuals against the Agency on various grounds including non-payment of interim payment certificates and breach of contracts by the Agency due to non-availability of funds.
Following the Amendment Act, section 76A now grants the Agency protection from the execution of judgments obtained against it. This means that a person who obtains a judgment against the Agency cannot enforce the said judgment by issue of a writ of execution. The effect of section 76A (1) of the Amendment Act appears to be similar in nature to section 21 (4) of the State Proceedings Act Chapter 71 of the Laws of Zambia, which precludes the issue of writs of execution for the enforcement of judgments against the State.
In terms of Section 76A (2) the Agency is required to pay judgment sums made against it out of its revenue. Thus, the recourse available to a successful litigant is the payment of the judgment sum out of the Agency’s revenue.
According to the Report of the Committee on the Public Roads (Amendment), Bill N.A.B. 9 of 2022 issued in July 2022, one of the main reasons for the proposal by the Ministry of Housing and Infrastructure Development and other stakeholders for the amendment of the Public Roads Act was the upsurge of court actions by contractors or private individuals resulting from non-payment or interim breach of contracts by the Agency owing to the unavailability of funds. one can argue that the Agency has little control over its receipt of funds.
One can argue that the Agency has little control over the receipt of funds to facilitate its operations. Part 2 of the first schedule to the Public Roads Act provides what the funds of the Agency consist of, and these are three-fold:
a) money that may be appropriated to the Agency by Parliament
b) money that may be paid to the Agency by way of fees, grants or donations; and
c) money that may vest in or accrue to the Agency
It is from these funds that the Agency is required to carry out its mandate i.e., pay salaries, allowances, gratuities, pensions, etc.
Thus, from the Agency’s perspective, the enactment of section 76A can be said to be a protective mechanism, i.e., a way of protecting the property and assets of the Agency and thus allowing the Agency to carry out its mandate without apprehension of execution of judgments entered against it.
On the other hand, from a judgment creditor’s perspective, it can be argued that although section 76A (2) does not preclude the Agency from paying a judgment sum, in a practical sense payment of a judgment sum obtained against the Agency would depend on the availability of funds to the Agency as well as the discretion of the Agency to apply available funds to the payment of a judgment sum. Thus, it may be argued that in the event of unavailability of funds or where the Agency in its discretion elects not to pay the judgment sum out of its revenue there is a likelihood that the judgment creditor may be left with no further recourse and thereby rendering the judgment or court order obtained in its favour an academic exercise.
Further, where a person contracts with the Agency, section 76A may be seen to provide no protection for such a person in the instance of a breach of contractual obligations by the Agency. The only recourse available to persons that obtain judgment or court orders against the Agency is the payment of the judgment sum. However, as stated above, this is subject to the availability of funds and the discretion of the Agency.
This article has considered section 76A of the Amendment Act which confers immunity from the execution of judgments and the requirement to make payments of judgment sums by the Agency. It has also considered the arguments that may be made from the perspective of the Agency as well as that of a judgment debtor.
Should you have any questions on this legal alert, please do not hesitate to contact Arshad Dudhia.