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REPUBLIC OF ZAMBIA
THE DEEDS OF ARRANGEMENT ACT
CHAPTER 84 OF THE LAWS OF ZAMBIA
CHAPTER 84 THE DEEDS OF ARRANGEMENT ACT
THE DEEDS OF ARRANGEMENT ACT
ARRANGEMENT OF SECTIONS
PART I PRELIMINARYPART I
PRELIMINARY
Section
1. Short title
2. Interpretation
3. Deeds of arrangement to which this Act applies
PART II AVOIDANCE OF DEEDS OF ARRANGEMENT WHERESTATUTORY
CONDITIONS NOT COMPLIED WITHPART II
AVOIDANCE OF DEEDS OF ARRANGEMENT WHERE
STATUTORY CONDITIONS NOT COMPLIED WITH
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4. Avoidance of unregistered deeds of arrangement
5. Avoidance of deeds of arrangement unless assented to by a majority of
creditors
PART III REGISTRATION OF DEEDS OF ARRANGEMENTPART III
REGISTRATION OF DEEDS OF ARRANGEMENT
6. Mode of registration
7. Form of register
8. Rectification of register
9. Time for registration
10. Inspection of register and registered deeds
PART IV PROVISIONS AS TO TRUSTEESPART IV
PROVISIONS AS TO TRUSTEES
11. Security by trustee
12. Penalty on trustee acting when deed of arrangement void
13. Transmission of accounts to official receiver
14. Transmission of accounts to creditors
15. Audit of accounts
16. Payment of undistributed moneys into court
17. Preferential payment to creditor an offence
Section
18. Power to High Court to appoint new trustee
19. Protection of trustees under void deeds
20. Notice to creditors of avoidance of deed
21. Payment of expenses incurred by trustees
22. Application of Part IV
PART V GENERALPART V
GENERAL
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23. Courts in which applications for enforcement of trusts to be made
24. Relation to bankruptcy law
25. Office copies
26. Prescribed fees
27. Rules
28. Affidavits
29. Repeal and savings
CHAPTER 93
DEEDS OF ARRANGEMENT 58of 1968
13of 1994
An Act to make provision for and to regulate deeds of arrangement made in respect
of the affairs of a debtor otherwise than in pursuance of the law relating to
bankruptcy; and to provide for matters connected with the foregoing.
[3rd January, 1969]
PART I PRELIMINARYPART I
PRELIMINARY
1. This Act may be cited as the Deeds of Arrangement Act. Short title
2. (1) In this Act, unless the context otherwise requires- Interpretation
"creditors generally" includes all creditors who may assent to, or take the benefit
of, a deed of arrangement;
"official receiver" means the official receiver appointed under the Bankruptcy Act; Cap. 82
"prescribed" means prescribed by rules made under this Act;
"property" includes money, goods, things in action, land and every description of
property whether real or personal and whether situate in Zambia or
elsewhere; and also obligations, easements, and every description of
estate, interest and profit, present or future, vested or contingent, arising
out of or incidental to property as above defined;
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"registrar" means the registrar appointed under the Lands and Deeds Registry Act; Cap. 185
"rules" includes forms.
(2) For the purpose of determining the number of creditors for whose benefit a deed
is made, any two or more joint creditors shall be treated as a single creditor.
3. (1) A. deed of arrangement to which this Act applies shall include any instrument
of the classes hereinafter mentioned whether under seal or not-
Deeds of arrangement
to which this Act
applies
(a) made by, for or in respect of the affairs of a debtor for the benefit of his
creditors generally;
(b) made by, for or in respect of the affairs of a debtor who was insolvent at the
date of the execution of the instrument for the benefit of any three or more
of his creditors;
otherwise than in pursuance of the law for the time being in force relating to bankruptcy.
(2) The classes of instrument hereinbefore referred to are-
(a) an assignment of property;
(b) a deed of or agreement for a composition; and
(c) in cases where creditors of the debtor obtain any control over his property
or business-
(i) a deed of inspectorship entered into for the purpose of carrying on
or winding up a business;
(ii) a letter of licence authorising the debtor or any other person to
manage, carry on, realise or dispose of a business with a view to the
payment of debts; and
(iii) any agreement or instrument entered into for the purpose of carrying
on or winding up the debtor's business, or authorising the debtor or
any other person to manage, carry on, realise or dispose of the
debtor's business with a view to the payment of his debts.
PART II AVOIDANCE OF DEEDS OF ARRANGEMENT WHERE STATUTORY
CONDITIONS NOT COMPLIED WITHPART II
AVOIDANCE OF DEEDS OF ARRANGEMENT WHERE STATUTORY CONDITIONS NOT
COMPLIED WITH
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4. A deed of arrangement shall be void unless it is registered with the registrar
within ninety clear days after the first execution thereof by the debtor or any creditor, or if it
is executed in any place out of Zambia, then within ninety clear days after the time at
which it would, in the ordinary course of post, arrive in Zambia, if posted within one week
after the execution thereof, and unless it is duly stamped with the proper stamp duty.
Avoidance of
unregistered deeds of
arrangement
5. (1) A deed of arrangement which either is expressed to be or is in fact for the
benefit of a debtor's creditors generally, shall be void unless, before or within six weeks
after the registration thereof, or within such extended time as the High Court may allow, it
has received the assent of a majority in number and value of the creditors of the debtor.
Avoidance of deeds of
arrangement unless
assented to by a
majority of creditors
(2) The list of creditors annexed to the affidavit of the debtor filed on the registration
of the deed of arrangement shall be prima facie evidence of the names of the creditors
and the amounts of their claims.
(3) The assent of a creditor for the purposes of subsection (1) shall be established
by his executing the deed of arrangement or sending to the trustee his assent in writing
attested by a witness, but not otherwise.
(4) The trustee shall file with the registrar at the time of the registration of a deed of
arrangement, or, in the case of a deed of arrangement attested to after registration, within
eight weeks after registration or within such extended time as the High Court may allow, a
statutory declaration by the trustee that the requisite majority of the creditors of the debtor
have assented to the deed of arrangement, which declaration shall, in favour of a
purchaser for value, be conclusive evidence, and, in other cases, be prima facie evidence,
of the fact declared.
(5) In calculating a majority of creditors for the purposes of this section, a creditor
holding security upon the property of the debtor shall be reckoned as a creditor only in
respect of the balance (if any) due to him after deducting the value of such security, and
creditors whose debts amount to sums not exceeding one hundred kwacha shall be
reckoned in the majority in value, but not in the majority in number.
PART III
REGISTRATION OF DEEDS OF ARRANGEMENT
6. (1) The registration of a deed of arrangement under this Act shall be effected in
the following manner:
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A true copy of the deed, and of every schedule or inventory thereto annexed, or
therein referred to, shall be presented to and filed with the registrar within ninety clear
days after the execution of the deed, together with an affidavit verifying the time of
execution and containing particulars of the residential and postal addresses and
occupation of the debtor, and of the place or places where his business is carried on, and
the name or names under which he carries on such business, and an affidavit by the
debtor stating the total estimated amount of property and liabilities included under the
deed, the total amount of the composition (if any) payable thereunder and the names and
addresses of his creditors.
Mode of registration
(2) No deed shall be registered under this Act unless the original of the deed, duly
stamped with the proper stamp duty, is produced to the registrar at the time of such
registration.
7. The registrar shall keep a register wherein shall be entered, as soon as
conveniently may be after the presentation of a deed for registration, an abstract of the
contents of every deed of arrangement registered under this Act, containing the following
and any other prescribed particulars:
Form of register
(a) the date of the deed;
(b) the name, residential and postal addresses and occupation of the debtor,
and the place or places where his business was carried on at the date of
the execution of the deed, and the name or names under which the debtor
carried on business, and the name and postal address of the trustee (if any)
under the deed;
(c) a short statement of the nature and effect of the deed, and of the
composition in the kwacha payable thereunder;
(d) the date of registration; and
(e) the amount of property and liabilities included under the deed, as estimated
by the debtor.
8. The High Court, upon being satisfied that the omission to register a deed of
arrangement within the time required by this Act or that the omission or misstatement of
the name, residential or postal addresses, occupation or business name and address of
any person was accidental, or was due to inadvertence, or to some cause beyond the
control of the debtor and not imputable to any negligence on his part, may, on the
application of any party interested, and on such terms and conditions as are just and
expedient, extend the time for registration, or order the omission or misstatement to be
supplied or rectified by the insertion in the register of the true name, residential and postal
addresses, occupation and business name and address.
Rectification of register
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9. Where the time for registering a deed of arrangement expires on a Sunday, or
other day on which the registration office is closed, the registration shall be valid if made
on the next following day on which the office is open.
Time for registration
10. Any person shall be entitled, at all reasonable times, to search the register on
payment of such fee as may be prescribed, and subject to such regulations as may be
prescribed, and shall be entitled, at all reasonable times, to inspect, examine, and make
extracts from any registered deed of arrangement, without being required to make a
written application or to specify any particulars in reference thereto, upon payment of such
fee as may be prescribed:
Inspection of register
and registered deeds
Provided that the extracts shall be limited to the dates of execution and of
registration, the names, addresses, and occupations of the debtor and of the parties to the
deed, the business name and address of the debtor, a short statement of the nature and
effect of the deed, and any other prescribed particulars.
PART IV PROVISIONS AS TO TRUSTEESPART IV
PROVISIONS AS TO TRUSTEES
11. (1) The trustee under a deed of arrangement shall, within seven days from the
date on which the statutory declaration certifying the assent of the creditors is filed, give
security in the prescribed manner to the Registrar of the High Court in a sum equal to the
estimated assets available for distribution amongst the unsecured creditors as shown by
the affidavit filed on registration, to administer the deed properly and account fully for the
assets which come to his hands, unless a majority in number and value of the debtor's
creditors, either by resolution passed at a meeting convened by notice to all the creditors,
or by writing addressed to the trustee, dispense with his giving such security:
Security by trustee
Provided that, when such a dispensation has been so given, the trustee shall
forthwith make and file with the registrar a statutory declaration to that effect, which
declaration shall, in favour of a purchaser for value, be conclusive evidence, and in other
cases, be prima facie evidence, of the facts declared.
(2) If a trustee under a deed of arrangement fails to comply with the requirements of
this section, the High Court, on the application of any creditor and after hearing such
persons as it may think fit, may declare the deed of arrangement to be void, or may make
an order appointing another trustee in the place of the trustee appointed by the deed of
arrangement.
(3) A certificate that the security required by this section has been given by a
trustee, signed by the Registrar of the High Court and filed with the registrar, shall be
conclusive evidence of the fact.
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(4) All moneys received by a trustee under a deed of arrangement shall be banked
by him to an account to be opened in the name of the debtor's estate.
(5) In calculating a majority of creditors for the purposes of this section, a creditor
holding security upon the property of the debtor shall be reckoned as a creditor only in
respect of the balance (if any) due to him after deducting the value of such security, and
creditors whose debts amount to sums not exceeding one hundred kwacha shall be
reckoned in the majority in value but not in the majority in number.
12. If a trustee acts under a deed of arrangement-
(a) after it has to his knowledge become void by reason of non-compliance with
any of the requirements of this Act or any enactment repealed by this Act;
or
(b) after he has failed to give security within the time and in the manner
provided for by this Act or any enactment repealed by this Act;
he shall be liable on conviction to a fine not exceeding fifteen penalty units for every day
between the date on which the deed became void or the expiration of the time within
which security should have been given, as the case may be, and the last day on which he
is proved to have acted as trustee, unless he satisfies the court that his contravention of
the law was due to inadvertence, or that his action had been confined to taking such steps
as were necessary for the protection of the estate.
(As amended by Act No. 13 of 1994)
Penalty on trustee
acting when deed of
arrangement void
13. (1) Every trustee under a deed of arrangement shall, at such times as may be
prescribed, or as he directs, transmit to the official receiver, an account of his receipts and
payments as trustee, in the prescribed form and verified in the prescribed manner.
Transmission of
accounts to official
receiver
(2) If any trustee fails to transmit such account, he shall be liable on conviction to a
fine not exceeding fifteen penalty units for each day during which the default continues,
and a Judge of the High Court may, for the purposes of enforcing the provisions of
subsection (1), exercise, on the application of the official receiver, all the powers conferred
on the court by the Bankruptcy Act in cases of bankruptcy.
Cap. 82
(3) The accounts transmitted to the official receiver in pursuance of this section shall
be open to inspection by the debtor or any creditor or other person interested, on payment
of the prescribed fee, and copies of or extracts from the accounts shall, on payment of the
prescribed fee, be furnished to the debtor, the creditors, or any other interested persons.
(4) In this section, "trustee" shall include any person appointed to distribute a
composition or to act in any fiduciary capacity under any deed of arrangement, and
"prescribed" means prescribed by rules under the Bankruptcy Act.
(As amended by Act No. 13 of 1994)
Cap. 82
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14. Every trustee under a deed of arrangement shall, at the expiration of six
months from the date of the registration of the deed, and thereafter at the expiration of
every subsequent period of six months until the estate has been finally wound up, send to
each creditor who has assented to the deed a statement in the prescribed form of the
trustee's accounts and of the proceedings under the deed down to the date of the
statement, and shall, in his affidavit verifying his accounts transmitted to the official
receiver, state whether or not he has duly sent such statements, and the dates on which
the statements were sent; and, if a trustee fails to comply with any of the provisions of this
section, the High Court may, for the purpose of enforcing those provisions, exercise, on
the application of the official receiver, all the powers conferred on the court by subsection
(3) of section ninety-eight of the Bankruptcy Act in cases of bankruptcy.
Transmission of
accounts to creditors
Cap. 82
15. (1) Where, in the course of administration of the estate of a debtor who has
executed a deed of arrangement, or within twelve months from the date when the final
accounts of the estate were rendered to the official receiver, an application in writing is
made to the official receiver by a majority in number and value of the creditors who have
assented to the deed for an official audit of the trustee's accounts, the official receiver may
cause the trustee's accounts to be audited, and in such case all the provisions of
theBankruptcy Act relating to the institution and enforcement of an audit of the accounts of
a trustee in bankruptcy (including the provisions as to fees) shall, with necessary
modifications, apply to the audit of the trustee's accounts, and the official receiver shall
have power on the audit to require production of a certificate for the taxed costs of any
legal practitioner whose costs have been paid or charged by the trustee, and to disallow
the whole or any part of any costs in respect of which no certificate is produced.
Audit of accounts
Cap. 82
(2) The official receiver may determine how and by what parties the costs, charges
and expenses of and incidental to the audit (including any prescribed fees chargeable in
respect thereof) are to be borne, whether by the applicants or by the trustee or out of the
estate, and may, before granting an application for an audit, require the applicants to give
security for the costs of the audit.
16. At any time after the expiration of two years from the date of the registration of
a deed of arrangement, the High Court may, on the application of the trustee or a creditor,
or on the application of the debtor, order that all moneys representing unclaimed dividends
and undistributed funds then in the hands of the trustee or under his control be paid into
court.
Payment of
undistributed moneys
into court
17. If a trustee under a deed of arrangement pays to any creditor out of the
debtor's property a sum larger in proportion to the creditor's claim than that paid to other
creditors entitled to the benefit of the deed, then, unless the deed authorises him to do so,
or unless such payments are either made to a creditor entitled to enforce his claim by
distress or are such as would be lawful in a bankruptcy, he shall be guilty of an offence
and liable on conviction to a fine not exceeding three thousand penalty units or to
imprisonment for a period not exceeding twelve months, or to both.
(As amended by Act No. 13 of 1994)
Preferential payment
to creditor an offence
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18. (1) The High Court may, whenever it is expedient to appoint a new trustee
under a deed of arrangement and it is inexpedient or impracticable so to do without the
assistance of the court, make an order for the appointment of such new trustee; and, in
particular and without prejudice to the generality of the foregoing provision, the court may
make an order for the appointment of a new trustee in substitution for a trustee who is
convicted of felony, or is a mentally disordered person, or a defective, or is a bankrupt, or
is a corporation which is in liquidation or has been dissolved.,
Power to High Court to
appoint new trustee
(2) An order under this section, and any consequential vesting order or conveyance,
shall not operate further or otherwise as a discharge to any former trustee than an
appointment of a new trustee under any power for that purpose contained in any deed of
arrangement would have operated.
19. (1) Where a deed of arrangement is void by reason that the requisite majority of
creditors has not assented thereto, or, in the case of a deed for the benefit of three or
more creditors, by reason that the debtor was insolvent at the time of the execution of the
deed and that the deed was not registered as required by this Act, but is not void for any
other reason, and a receiving order is made against the debtor upon a petition presented
after the lapse of three months from the execution of the deed, the trustee under the deed
shall not be liable to account to the trustee in the bankruptcy for any dealings with or
payments made out of the debtor's property which would have been proper if the deed
had been valid, if he proves that at the time of such dealings or payments he did not know,
and had no reason to suspect, that the deed was void.
Protection of trustees
under void deeds
(2) Where a receiving order is made in lieu of commital against a debtor under the
Bankruptcy Act, this section shall apply if the receiving order was made after the lapse of
three months from the execution of the deed.
Cap. 82
20. When a deed of arrangement is void by virtue of this Act for any reason other
than that, being for the benefit of creditors generally, it has not been registered within the
time allowed for the purpose by this Act, the trustee shall, as soon as practicable after he
has become aware that the deed is void, give notice in writing thereof to each creditor
whose name and address he knows, and file a copy of the notice with the registrar, and, if
he fails to do so, he shall be liable on conviction to a fine not exceeding six hundred
penalty units.
(As amended by Act No. 13 of 1994)
Notice to creditors of
avoidance of deed
21. Where a deed of arrangement is avoided by reason of the bankruptcy of the
debtor, any expenses properly incurred by the trustee under the deed in the performance
of any of the duties imposed on him by this Act shall be allowed or paid him by the trustee
in the bankruptcy as a first charge on the estate.
Payment of expenses
incurred by trustees
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22. The provisions of this Part, except such of those provisions-
(a) as relate to the transmission of accounts to the official receiver;
(b) as provide for the protection of trustees under void deeds;
(c) as require a notice to be given to creditors of avoidance of deeds;
(d) as provide for the payment of expenses incurred by trustees;
shall not apply to a deed of arrangement made for the benefit of any three or more of the
debtor's creditors unless it is in fact for the benefit of the debtor's creditors generally.
Application of Part IV
PART V GENERALPART V
GENERAL
23. Any application by the trustee under a deed of arrangement, which either is
expressed to be or is in fact for the benefit of the debtor's creditors generally, or by the
debtor or by any creditor entitled to the benefit of such a deed of arrangement, for the
enforcement of the trusts or the determination of questions under it, shall be made to the
High Court.
Courts in which
applications for
enforcement of trusts
to be made
24. (1) If the trustee under a deed of arrangement, which either is expressed to be
or is in fact for the benefit of the debtors' creditors generally, serves in the prescribed
manner on any creditor of the debtor notice in writing of the execution of the deed and of
the filing of the statutory declaration certifying the creditors' assents with an intimation that
the creditor will not, after the expiration of one month from the service of the notice, be
entitled to present a bankruptcy petition against the debtor founded on the execution of
the deed or on any other act committed by him in the course or for the purpose of the
proceedings preliminary to the execution of the deed as an act of bankruptcy, that creditor
shall not, after the expiration of that period, unless the deed becomes void, be entitled to
present a bankruptcy petition against the debtor founded on the execution of the deed or
any act so committed by him as an act of bankruptcy.
Relation to bankruptcy
law
(2) Where such a deed of arrangement as aforesaid has become void by virtue of
this Act or any enactment repealed by this Act, the fact that a creditor has assented to the
deed shall not disentitle him to present a bankruptcy petition founded on the execution of
the deed of arrangement as an act of bankruptcy.
(3) Save as otherwise expressly provided by this Act, nothing in this Act shall be
construed as repealing or shall affect any provision of the law for the time being in force in
relation to bankruptcy or shall give validity to any deed or instrument which by law is an
act of bankruptcy or void or voidable.
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25. Subject to the provisions of this Act and to any rules made thereunder, any
person shall be entitled to have an office copy of, or extract from, any deed registered
under this Act, upon paying for it at the like rate as for office copies of judgments of the
High Court, and any copy or extract purporting to be an office copy or extract shall, in all
courts and before all arbitrators or other persons, be admitted as prima facie evidence
thereof, and of the fact and date of registration as shown thereon.
Office copies
26. There shall be taken, in respect of the registration of deeds of arrangement,
and in respect of any copies or extracts or official searches made by the registrar, such
fees as may be from time to time prescribed; and nothing in this Act contained shall make
it obligatory on the registrar to do, or permit to be done, any act in respect of which any
fee is specified or prescribed, except on payment of such fee.
Prescribed fees
27. The Attorney-General may, from time to time, by statutory instrument, make
rules for carrying into effect the objects of this Act, and may, from time to time, alter,
amend, or revoke all or any of such rules.
Rules
28. An affidavit required by or for the purpose of this Act may be sworn before any
person before whom such an affidavit may under any law for the time being in force, be
sworn.
Affidavits
29. (1) The Deeds of Arrangement Act, 1914, of the United Kingdom (hereinafter
referred to as "the Act of 1914") shall cease to apply in Zambia as part of the law thereof,
and the Interpretation and General Provisions Act shall apply in relation to this subsection
as if the Act of 1914 had been hereby repealed.
Repeal and savings
Cap. 2
(2) This Act shall apply to proceedings commenced under the Act of 1914 and
pending at the commencement of this Act, as if such proceedings had been commenced
under this Act.
(3) Until revoked or altered under this Act, rules made under the Act of 1914, and in
force at the commencement of this Act, shall continue in force, and shall have effect as if
made under this Act.
(4) The provisions of this Act shall apply to and in respect of a deed of arrangement
executed before the commencement of this Act if and so far as the corresponding
provisions of the Act of 1914 would have applied to or in respect of such deed had this Act
not been enacted.
