CPL Limited and Anor v DSS Designs Limited (APPEAL/319/2023) [2024] ZMCA 310 (19 November 2024)

IN THE COURT OF APPEAL HOLDEN AT NDOLA (CIVIL JURISDICTION) BETWEEN: CPL LIMITED APPEAL/319 / 2023 1 9 NOV 2024 I ,,, 1 ST APPELLANT CHAMINUKA WILDLIFE ESTATES LIMITED 2ND APPELLANT AND DSS DESIGNS LIMITED RESPONDENT CORAM: KONDOLO SC, MAJULA, BANDA-BOBO JJA On 13 th and 19th November, 2024 For the Appellants: Not in Attendance For the Respondent: Mr. D. Sichombo of Messrs D. M. Sichombo & Associates JUDGEMENT KONDOLO SC JA, delivered the Judgment of the Court. CASES REFERRED TO: 1. Base Chemicals Zambia Limited, Mazzonites Limited v Zambia Airforce & The Attorney General (2011) ZR 34 at p. J26-27 2. Zambia Extracts Oils & Colorants Ltd & Another v Zambia State Insurance Pension Trust Fund Board of Trustees SCZ/ Appeal/ 181/2009 p.26-27 3. Griffiths v Evans ( 1953) 2 All ER 1365 4. Ohaba v Akiba Bank Limited (2008) 1 EA 300 at p. 304 5. KBF & Partners v Sabbir Suleman Patel & Idris Suleman Patel 2012/HP/1363 6. Mohammed S. Itowala v Variety Beureau De Change SCZ/1 7. Zambia Railways Ltd v Pauline S Mundia (2008) 1 ZR 8. Khalid Mohamed v The Attorney General SCZ/26/1982 5/2001 9. British Steele Corp v Cleveland Bridge & Engineeriung Co. Ltd (1984] 1 All ER 504 10. The Rating Valuation Consortium & Another v Lusaka City Council & Another (2004) ZR 109 11. The Rating Valuation Consortium & Another v Lusaka City Council & Another STATUTE AND OTHER WORKS REFERRED TO 1. Zambia Institute of Architects Act, Chapter 442, Laws of Zambia 2. Banking & Financial Services Act, Chapter 387 Laws of Zambia. 3. The Limitation Act 1939 4. Law Reforms (Limitation of Actions, ETC) Act Chapter 72 of the Laws of Zambia 5. The Legal Practitioners Act, Chapter 30, Laws of Zambia 6. Halsbury's Laws of England 4 th Edition, Vol 9, Butterworth's, London p.475, para 695 1. INTRODUCTION. 1. 1. This is an appeal against the judgement of the High Court delivered by the Honorable Mr. Justice K. Chenda on 11th August 2022. 1.2. In the High Court the Respondent was the Plaintiff and the 1st and 2nd Appellant were the 1st and 2nd Defendants. 2 . BACKGROUND 2.1. The Respondent claims that it was approached by the 1st Appellant to provide architectural and design services for a project it was developing called Chaminuka Wildlife Estate (CWE). After some disagreements, the Respondent issued an invoice in the sum of USD738,000 which the 1st Appellant refused to pay. 2.2. The 1st Appellant stated that there was no contract between the parties and that the Respondent did not provide any architectural and design services. 2.3. That the 1st Appellant actually ended up engaging a third party at the cost of K300,000. 2. 4. The 2 nd Appellant was incorporated after the alleged negotiations and stated that it never utilized the documents generated by the Respondent. 2.5. The Appellants declined to pay the invoice and the Respondent reacted by filing a writ of summons claiming the following reliefs; 1. Payment of the sum of USD738,000 representing the outstanding amount owed to the Plaintiff for the design/ architectural professional services rendered on behalf of the Defendants, which sum has been outstanding since July 2011; 2. In the alternative, an order that the Defendants pay the Plaintiff on a quantum men.tit basis for professional services rendered; 3. Damages for breach of contract and loss of business from 27th July 2011 to the date the Defendants pay the sum of USD738,000 in full; 4. Interest; 5. Further or other relief; and 6. Costs 2.6. Respondent's (Plaintiff) Arguments in the High Court 2.7. The Respondent called one witness Donald Sichombo PWl who filed a witness statement stating that he had rendered several consultancy and architectural works for the 1st Appellant prior to the CWE project and incorporation of the 2nd Appellant. 2.8. That the 1st Appellant engaged the Respondent in or about May 2010 and constantly communicated with, engaged, instructed, consulted and received deliverables from the Respondent for the development of the concept, master plan and provision of working designs and drawings for the CWE Project. 2.9. That the 1st Appellant undertook to pay the Respondent with "sweat" equity in the form of 30% shares in the 2 nd Appellant. This never transpired and the Respondent demanded that he be paid either in cash or land. 2.10. PWl stated that there was no written contract between the parties. That the only agreement was an oral agreement with the 1st Appellant but he was unable to confirm the year when the verbal agreement was entered into as it was not made in one day but during the course of the project. The point at which the respondent would receive the 30% equity was not agreed upon in the verbal agreement, but after a period of five years, he was asked whether he be paid through shares or money. 2.11. PWl stated that the invoice rendered to the 1st Appellant was only about 4% of the project value while the "Architectural Act" allows architects to charge up to 12% of the value of the project. 2.12. When cross examined on this point PWl stated that the Respondent was not a registered architect but used the Act to charge its clients. That this was the mode the parties had used for previous works. 2.13. He further stated that he was not aware that the Act required the architect to agree on the fees with the client in advance of the works, have a written agreement with the client, and agree on the fees. 2.14. Appellants Arguments in the High Court 2.15. The 1st Appellant filed a defence denying the Respondents claims and filed a witness statement given by Stelios Sardanis DWI. 2 .16. DW 1 stated that PW 1 was at the time employed as an architect for the 1st Appellant's lodge. He was invited to participate in the project to design and engineer all aspects of development. 2.17. That the Respondent would be remunerated by earning a 30% stake in the development by contributing sweat or cash. The agreement was oral. 2.18. That PWl lost interest in equity participation and asked to be compensated with a large piece of land. The negotiations broke down, no contract was signed and the parties went their separate ways. 2.19. He agreed that PWl presented him with a concept development drawing. He also agreed that PW 1 developed the site plan which was completed by a quantity surveyor Charles Pole. That Mr. Pole was paid but no payment was given to PW 1. 2.20. That PWl was not paid for the work done because the plots were not the right size and their lawyers advised that any payment would amount to an admission that the work was in good order. 2.21. DWl agreed that his lawyer's response to the invoice rendered by PWl was that PWl had partially done the works. 3. HIGH COURT DECISION 3.1. The learned trial judge analyzed the evidence presented by the parties in relation to the claims and made the following findings and decisions. 3.2. That the letter from the 1st Appellants lawyers to the Respondents debt collectors dated 7 th September, 2015 was a clear admission that the Master Plan was done by PW 1. 3.3. That DWl conceded in cross-examination that PWl had presented the project concept/feasibility. 3.4. That DWl conceded that the Site Plan was developed by PWl. 3.5. The learned trial judge rejected PWl's assertion that over time the parties had developed a method for calculating the bills rendered by PWl. This meant that the chargeout rate was not agreed by the parties. 3.6. That PWl was not a registered architect, meaning that he could not charge fees using the scales provided under the Zambia Institute of Architects Act (ZIA Act) nor by using the regulations made under the Act. That therefore, there was no basis upon which to validate PWl 's invoice of USD738,000. 3.7. The learned trial judge noted that the 1st Appellant approached the Respondent to provide some services and not the other way round. The lower Court referred to Halsbury's Laws of England 4 th Edition, Vol 9, Butterworth's, London p.475, para 695 where it provides that a Plain tiff may recover on a quantum meruit basis in respect of work done under a contract which 1s unenforceable, void or illegal; or, where work is done at the request of the Defendant and of which he has had the benefit; or, where a plaintiff has rendered services under a contract which is void as being made without authority. 3.8. The lower Court also cited the case of Base Chemicals Zambia Limited, Mazzonites Limited v Zambia Airforce & The Attorney General 111 where the Court held that the Appellants were entitled to damages on a quantum meruit basis because the respondents benefited from works carried out by the appellants at the request of the respondents. 3.9. The learned trial Judge observed that the Appellants had raised two additional grounds upon which the Court was asked to reject the Respondents claims; 1. That the services for which the Plaintiff seeks remuneration are tainted with illegality due to the registration status of the Plaintiff and PWl; 2. The Plaintiffs action is statute barred having been commenced in December 2015 for alleged contractual breach pre-dating 2011, which it has been argued is beyond a permissible time limit of 3 years. 3 .10. On the first ground the learned trial judge referred to the case of Zambia Extracts Oils & Colorants Ltd & Another v Zambia State Insurance Pension Trust Fund Board of Trustees 121 where the Supreme Court considered the prov1s10n of secured lending services by an unlicensed entity contrary to section 17 of the then Banking & Financial Services Act, Chapter 387 Laws of Zambia (BFS). 3 .11. That section 17 of the BFS Act and section 35 of the ZIA Act are similar in that they both prohibit unlicensed persons from providing services, the breach of which attracts criminal sanctions. 3.12. In the cited Case the Supreme Court held that the BFS Act provided for regulation of banking and financial services and for safeguarding consumers of those services but did not prohibit the entry into and performance of secured lending contracts and did not invalidate such contracts if entered into by an entity that did not meet the licensing requirement in section 17. 3.13. The learned trial judge opined that the said guidance was applicable in casu as section 35 of the ZIA Act and section 17 of the BFS Act were similar and consequently found that section 35 of the ZIA Act did not prevent the Respondent from seeking remuneration from the 1st Appellant who received services at its request. 3.14. On the second ground that the matter was statute barred, the learned trial judge referred to section 2 ( 1) of the Limitation Act 1939 which provides a statutory limitation period of 6 years on claims founded on simple contract. 3.15. The learned trial judge dismissed this ground for the reason that the statutory limitation was not 3 years as claimed by the 1st Appellant. 3.16. The learned trial Court ordered that the Respondent be paid the successful claims on a quantum meruit basis and costs were also awarded to the Respondent. 4. APPEAL 4.1. Dissatisfied with the judgement, the Appellant has appealed on five grounds as follows; 1. The Court erred in law and fact when it held that the Respondent was entitled to its costs despite finding that there was no basis on which the Respondent could validate the said costs. 2. The Trial Court erred in law and fact when it awarded costs to the Plaintiff despite finding that costs fall under the auspices of Zambia Institute of Architects Acts, chapter 442 of the Laws of Zambia which fees are a preserve of duly registered firms and persons. 3. The Trial Court erred in law and fact when it held that the action was brought by the Respondent within the 6 years' time limit set by the limitation Act, 1939 which is contrary to the evidence. 4. The Court erred in law and fact when it held that the Respondent did provide some services and a site plan to the 1st Appellant which is contrary to the evidence on record. 5. The Court erred in law and fact when it held that the Respondent did provide some services and a site plan to the rt Appellant which is contrary to the evidence on record by reviewing the Order for costs awarded to the 2 nd Appellant. 4.2. 1st APPELLANTS ARGUMENTS 4.3. Grounds 1 and 2 4.4. Grounds 1 and 2 were argued together. The 1st Appellant reproduced the preamble and sections, 28, 29, 32 and 35 and 37 of the ZIA Act. 4.5. The 1st Appellant submitted that the Respondent had admitted that he was not a registered Architect and it was illegal for such a person to seek remuneration under the Act. 4.6. That over and above that, the parties had not even entered into an agreement specifying the fees and that the Respondent was precluded from applying the chargeout mechanism provided by the Act. 4.7. It was argued in this regard that the lower court stated that there was no basis upon which to imply any chargeout rates based on unsubstantiated previous course of dealing between the parties. 4.8. The Appellant cited the case of Griffiths v Evans 131 in which Lord Denning held that where a solicitor does get a written retainer from his client, in the event of disagreement on the fees, he risks his client's word being taken over his. 4.9. The Appellant also cited the case of Ohaba v Akiba Bank Limited (4l in which it was held that where there is no evidence of a retainer and the client contradicts the advocates oral statement, the Court will treat the advocate as having acted without authority /permission. The High Court case of KBF & Partners v Sabbir Suleman Patel & Idris Suleman Patel 151 was cited as additional authority on this point. 4.10. The 1st Appellant referred to the case of Mohammed S. Itowala v Variety Beureau De Change 161 on the principle of ex turpi causa mon oritur action and submitted that the Respondents claim was unenforceable because the contract upon which it was based was illegal. 4.11. Further that the trial judge had himself stated that there was no basis upon which the Respondent could validate the fees and he therefore erred when he awarded fees to the Respondent who was not a duly registered architect. 4.12 . Ground 3 4.13. In ground 3 on the statutory limitation period the Appellant argued that section 3 of the Law Reforms (Limitation of Actions, ETC) Act provides that actions purporting breach of contract, must be brought within three years of the said breach and the action in casu was brought outside the limitation period. 4.14. That in any event the writ of summons was filed on 16th December, 2016 and a period of 6 years had passed from the time when the Respondent ought to have brought his claim and we are urged to allow this ground and find that the matter was statute barred. 4.15 . Grounds 4 and 5 4.16. In these two grounds, it was argued that the trial court awarded the Respondent fees for works it had failed to prove that it had carried out. It was pointed out that the evidence at pages 19-24 showed that the Respondent admitted that it had not rendered any survey services. 4.17. That the Respondent was required to prove its case with evidence even where the defence fails. The cases of Zambia Railways Ltd v Pauline S Mundia 171 and Khalid Mohamed v The Attorney General (81 were cited on these points. 4.18. The 1st Appellant referred to the Order Varying Judgement at pages 372 and 373 of the record of appeal and submitted that the trial judge had proceeded to review the judgement without fresh evidence. That in view of the fact that the Respondent had failed to prove any works that it did, the trial court erred by reviewing the order for costs awarded to the 2 nd Appellant. 4.19. RESPONDENTS ARGUMENTS 4.20. Grounds 1 and 2 4.21. It was submitted in grounds 1 and 2 that the trial Court was on firm ground to order that the Respondent be paid for its services on a quantum meruit basis after correctly observing that the services were not volunteered by the Respondent but requested by the 1st Appellant. The Respondent sought refuge in the excerpt from Halsbury's Laws of England supra referred to by the learned trial judge. 4.22. The Respondent has cited vanous other cases where payment for services was ordered on a quantum meruit basis. These include British Steele Corp v Cleveland Bridge & Engineering Co. Ltd l9 ) and The Rating Valuation Consortium & Another v Lusaka City Council & Another 110 • where the Supreme Court held that the respondents were estopped from talcing shelter in the doctrine of illegality on the costs incurred by the Appellants. 4.23. That the issue of illegality was raised by the Appellant to escape paying for works rendered. That even though the question of illegality was not part of the agreed issues for determination, the trial judge addressed the issue conclusively at pages 5.48 to 5.50 of the record of appeal. 4.24. The Respondent pointed out that the invoice rendered to the 1st Appellant was on account of the 1st Appellant's failure to honor its commitment to remunerate the Respondent with a 30% shareholding on the project. 4.25. Ground 3 4.26. The Respondent submitted that the learned trial judge correctly held that the action was not statute barred because it was covered by section 2 (1) of the Limitation Act which provides that simple contracts shall have a limitation period of 6 years. 4.27. Grounds 4 and 5 4.28. That the trial court was on firm ground when it made its findings after reviewing several documents and provided reasons for its finding that the Respondent had produced a site plan. 4.29. We were reminded that appellate courts do not easily interfere with a trial court's findings of fact and only do so where they are either perverse or made in the absence of any relevant evidence or upon misapprehension of the facts. 4.30. The Respondent has stated that the issue of the Variation of Judgement ordered by the lower Court is actually on appeal under appeal No. 263/ 2023 and to raise it at this point is a multiplicity of proceedings. 4 .31. We have been urged to dismiss the appeal with costs. 5. HEARING 5 . 1. The Appellants were absent from the hearing without notice despite having been served with the Notice. We therefore decided to proceed in their absence. 5.2. Learned counsel for the Respondent Mr. Sichombo submitted that the Respondent was placing reliance entirely on the respondent's heads of argument filed on 20th November, 2023. 6. ANALYSIS AND DECISION 6.1. We have considered the record of appeal and the arguments advanced by the parties and shall proceed by addressing grounds 1 and 2 together and thereafter consider ground 4 and followed by ground 5 and conclude with ground 3. 6.2. Grounds 1 and 2 6.3. In arguing these grounds, the Appellants have dwelt purely on the issue of illegality based on the fact that the Respondent was not a registered architect and therefore not entitled to render fees for his services using a chargeout derived from the ZIA Act . 6.4. It was further argued that the problem is compounded because there was no written contract and no evidence was provided that the parties had agreed on a method of calculating the chargeout. 6.5. We are however surprised that the Appellant has not commented on the finding by the trial judge that section 17 of the BFS Act and section 35 of the ZIA Act are similar and thereafter proceeded to rely on the Supreme Court's guidance in the case of Zambia Extracts Oils & Colorants Ltd & Another v Zambia State Insurance Pension Trust Fund Board of Trustees supra where it was held that the BFS Act regulated banking and financial services but did not prohibit entry into and performance of secured lending contracts and did not invalidate such contracts if entered into by an entity that did not meet the licensing requirements. 6.6. The learned trial judge held that likewise, the ZIA Act regulates provision of architectural services and protection of consumers but does not prohibit the creation and performance of a contract whereby one party provides architectural services to another for a fee. 6. 7. We are even more surprised that the Appellant has provided no arguments with regard to quantum meruit but dwelt purely on the principle of ex turpi causa non oritur actio which means, a person will not be able to pursue a cause of action if it arises from his own illegal act. 6.8. The 1st Appellant also cited foreign cases involving solicitors and advocates who fail to prove a retainer agreement. The cited judgements speak towards illegality and unenforceability in the context of the laws and regulations guiding lawyers in those countries. The KBF case cited by the Appellant is also in relation to legal fees but the Appellant did not compare the relevant provisions of the ZIA Act to similar provisions in the Legal Practitioners Act and its subsidiary legislation as it relates to persons who practice law and render bills without practicing certificates. 6.9. As explained 1n the excerpt from Halsbury's laws of England referred to by the learned trial judge ( see page 48 of the record of appeal) where it states that . . . . In some circumstances, a Plaintiff may, recover on a quantum meruit in respect of work done under a contract which is unenforceable, void or illegal. The Appellant has offered no arguments as to why quantum meruit should not apply in casu. 6.10. In the The Rating Valuation Consortium & Another v Lusaka City Council & Another 1101 it was demonstrated that illegality will not militate against quantum meruit because the principle simply operates to ensure that where a party has requested that works be performed and they are in fact performed, even where no contractual terms were agreed, the actual work done can be assessed to ensure that the services are paid for. 6 . 11 . The trial Court referred to the letter from the 1st Appellants lawyers to the Respondents debt collector and found as a fact that the Appellant had admitted that the Respondent had done some work on the master plan. 6.12. After analyzing the evidence, the learned trial judge further found as a fact that the Respondent worked on the project concept/feasibility and Site Plan. The trial court's findings are at pages J33 - J35 of the judgement (pages 41-42 of the record of appeal). 6.13. There being no contract 1n place and no method of calculating the fees agreed by the parties, the learned trial judge ordered that the services be paid for on a quantum meruit basis. We agree with the learned trial judges approach and grounds 1 and 2 are consequently dismissed. 6.14. Ground 4 6.15. The argument 1n ground 4 essentially challenges the finding of fact by the lower Court that the Respondent worked on the master plan, without explaining why the learned trial judges reasoning must be disturbed. The trial judge explained how he arrived at this finding in paragraph 5.18 at page J34-35 (pages 42-43 of the record of appeal. 6.16. The Appellant instead dwelt on pages 19-24 of the record of appeal (Jl l-J16 of the judgement) which basically recounts the Respondents evidence. No arguments have been offered as to why the learned trial judge's finding in paragraph 5.18 should be interfered with. 6 . 17. We find nothing perverse nor see any findings made in the absence of any relevant evidence and we therefore decline to exercise our power to interfere with the learned trial judge's finding of fact that the Respondent worked on the site plan. Ground 4 is therefore dismissed. 6.18. Ground 5 6.19. According to the Respondent this ground is actually the subject of appeal in another appeal before this Court in appeal no. 263/2023 and the Appellant has not opposed the assertion. Going by the cause number that appeal was filed before this one and we shall therefore not deal with this ground because it amounts to a multiplicity of actions. 6.20. Ground 3 6.21. We have considered ground three and note that the provision of law referred to by the 1st Appellant applies to actions in tort and actions for breach of duty whether arising from contract or statute. It does not apply to actions founded on simple contracts such as in casu where the action was not for breach of duty but for breach of contract which is captured by section 2 (11) of the Limitation Act of 1939 and for which the limitation period is 6 years. 6.22. The Appellant has at paragraph 3.2 of its amended heads of argument submitted that the cause of action arose on 27th July, 2011 and the writ was filed on 16th December 2016, a period of about 5 years and 6 months which is less than the 6-year limitation period. Ground 3 consequently fails. 7 .0. CONCLUSION 7.1 This appeal is dismissed in its entirety with costs to the Respondent. . ..........................•••.•....•.. M. M. KONDOLO SC COURT OF APPEAL JUDGE B. M. AJULA COURT OF APPEAL JUDGE ........ ~ .............. . A. M. BANDA-BOBO COURT OF APPEAL JUDGE