Franco Russo v Brown Banda (Appeal No. 114/2005) [2006] ZMSC 47 (6 June 2006)

IN Tl.-11~ . SV. Pl<l~ME COURT FOR ZAMBIA APPEAL No.114/2005 J. IQLDl.~l'LAT N DOLA (Civil ,Jurisdiction) FRANCO RUSSO (MALE) APPELLANT AND BROWN BANDA (MALE) RESPONDENT Coram: Sakala, CJ., Chitengi and Mushabati JJS ~Marchand 6 th June, 2006. For the Appellant: N/A For the Respondent: Mr. J. Kabuka of Kabuka and Company Sakala, C. J., delivered the Judgment of the Court. JUDGMENT Cases ref erred to:- 1. Attorney~General Vs Valetine Shula Musakanya 1981 ZR. 2. Mata le Vs ZCCM ( 1993/94) ZR 94. 3. Water Wells Limited Vs Wilson Samuel Jackson (1983) ZR 98. ' 4. Hermina Collet Vs Van Zyl Brothers LIMITED (1966) ZR 65. 5. Zulu Vs Avondale Housing Project ( 1982) ZR 172. 6. AMI Zambia Limited Vs Bimzi Limited SCZ Appeal No. 213 of 2000. This is an appeal against a Judgment of the High Court in which the court entered judgment in favour of the Respondent f• J 1n the net sum of Kl 7,306,600.00 for works completed; executed extra works; and damages for breach of contract. The amount attracted interest at the average short-term deposit rate from the date of the writ of summons to the date of Judgment; and thereafter at the current bank-lending rate. The Respondent was also awarded costs. The facts of the case which were not in dispute are that the Respondent, a businessman, carried out business of designer and contractor in Ndola and elsewhere. The Appellant is a registered owner of the residential property situated at plot No. 786, also known as house No. 16 Cross-Crescent Kansenshi, Ndola. By a written agreement dated 10th August, 1999, the Respondent was appointed as the Appellant's Contractor to renovate the Appellant's house No. 16 Cross-Crescent, Kansenshi, Ndola at agreed rates. . Jt was further agreed that the Appellant would provide all the necessary building mc;terials. The contract was itemized in terms of the work schedule of all the artisans, contractors, carpenters, electricians and plumbers. It was agreed that the Respondent be entitled to 15°/o of what was payable to the artisans. The contract was for three months. The total contract amount was KlS,520,000.00. The evidence of the Respondent was that he moved with his team on the site; while the Appellant's family was still there. It took about three weeks before the last person vacated the house. This affected the three months time frame. While at the site, according to the Respondent's evidence, the Appellant asked his workmen to pick the bricks, brick by brick so that they be preserved, This, according to the Respondent, amounted to extra works, which were not agreed on in the original contract. The extra works also included the extension of windows. These extra works were finally quantified and amounted to K12,795,000.00. The evidence of the Respondent was also that he complained about the causes of the delay namely, the materials and the ,. equipment not being at site. Further, the workers were not paid for. The Respondent explained that when 80% of the work was done up to roof level, no materials were forthcoming. When he wrote the second letter of complaint; he and his workmen were expelled from the site. The Respondent explained that 80% of the total contract sum to be paid was K13, 116,000.00 and the value of the extra works was K12,795,000.00; making a total claim of K25,91 l,OOO. OO. The Respondent explained that out of the· contract s~m, he received K6, 715,000.00. He did not collect the salvage materials valued at K2,250,000.00 because he had no transport. He explained that out of a total claim; K6, 715,000.00; already paid to him, should be deducted. The Respondent also claimed damages for breach of contract, interest and costs. Under cross-examination, the Respondent testified that the contract involved the demolition and renovation of the property. He explained that he was a friend of the Appellant. He testified that the variation orders were made verbally while at the site. He denied receiving a total sum of Kl 1,015,000.00 on the contract sum. He denied accusations of bad workmanship. He explained that he could not complete the contract without the _,, materials being available. He stated that it was the Appellant's failure to supply materials, which led to the termination of the contract. The Appellant testified that the agreed· contract price was KlS,520,000. He agreed with the design as well as the scope of the work to be undertaken. He also testified that the Respondent prepared the schedule of materials required; while he was required to provide the materials. The Appellant further testified that the Respondent made two claims for works done and that payments were made. He testified that the Respondent worked well at the beginning; but later things started declining. Sometimes there was no full workforce or the workforce was taken elsewhere. He explained that the conflict between them was precipitated over the carpenters who took too long to finish the trusses and that the trusses were not straight for lack of supervision. According to the evidence of the Appellant; the Respondent did not complete the works. He only finished between 55% and 60% of the works. He admitted not paying the Respondent money for extra works. He also admitted that it was agreed, that 15% would be paid to the Respondent for supervision. He maintained that he paid the Respondent the sum of Kl l,015,000.00 as advance for the works done at House No. 16 Cross-Crescent, Kansenshi, Ndola. The Appellant further testified that the Respondent had agreed to pay K2,250,000.00 for salvage materials on site; which materials were collected. He testified that the Respondent was paid K8,765,000.00 in cash; the balance of K2,250,000.00 was the value of the second hand building materials which the claimed and damages for breach of contract and whether the Appellant's counter-claim had merits. On the evidence, the court found as a fact that the Respondent was appointed as a contractor to carry out renovations to house No. 16 Cross-Crescent, Kansenshi, Ndola; that the contract was signed on 10th August, 1999; that the contract sum was KlS,520,000.00; and that the expected completion period was three months. The court also found that it was common cause that prior to the signing of the contract, the Respondent designed the planned renovations at the Appellant's request. The court further found that it was common cause that under the contract, the Appellant was to provide all the materials and equipment required for works and that in the event that the Appellant terminated the contract, the Respondent was to be paid in proportion to the works carried out. The trial judge noted that the Appellant admitted that the works carried out by the Respondent reached roof level; the only complaint being that the trusses were bent. The court observed that the Respondent appeared to be frank, confident, honest and straightforward. On the other hand, the court found that the Appellant was shifty and uncomfortable 1n cross examination; particularly when it came to the question of completed works. The court accepted the Respondent's evidence that 80% of the works were completed at the time the contract was terminated by the Appellant. On extra works, the court observed that the Appellant admitted making changes to the plan as the original contract was being executed; the objection being that the Respondent used same labourers. The court also observed that the objection on using same labourers was not raised in the Defence; which was that there were no extra works executed by the Respondent on the site. The court found as a fact that there was a verbal agreement that the Respondent should carry out extra works. The court accepted the estimate of the extra works as testified to by the Respondent as being Kl2, 795,000.00. The court further believed the evidence of the Respondent and found as a fact that the Respondent was paid K6, 715,000.00. From the evidence, the court held that the Appellant was in breach of the contract by failing to supply building materials which failure also affected the period within which the Respondent was expected to complete the works. On the question of damages for breach of contract; the court found that there was no evidence led, but awarded a sum of K360,600 as damages for breach of contract on the basis that the Respondent was a contractor, who worked for profit. On the counter-claim for the sum of K2,250,000.00 for the salvage materials, the court observed that there was no dispute that the parties had agreed that the Respondent would take the salvage materials from the site valued at K2, 250,000.00, which were to be paid in kind; the bone of contention being whether these materials were collected from the site by the Respondent. According to the court, the Respondent had claimed that since the Appellant did not provide transport, he did not collect them. But the Appellant on the other hand maintained that the materials were collected, as they were not at site. The court pointed out that there was no indication from both parties that they had agreed that the Appellant would provide transport for the salvage materials. Neither did the Respondent testify that he had been prevented from collecting the salvage materials from the site. The court found no good reason why the Respondent failed to collect the materials. The court found as a fact that the Respondent collected the salvage materials from House No. 16, Cross-Crescent, Kansenshi, Ndola and entered judgment in favour of the Appellant on the· counter-claim in the sum of K2, 250,000.00. In the main action, judgment was entered 1n favour of the Respondent as follows: - (l)The sum of Kl3, 116,000.00 being 80% of the works completed; (2)The sum of Kl2,790,000.00 being the value of · executed extra works; and ,, (3)The sum of K360,600.00 being damages for breach of contract. The total sum of the award came to K26,271,600.00. From the total sum, the amount of KB,965, 000.00 (representing K6,715,000.00 advance payment on the contract and K2,250,000.00 as value of salvage materials) was subtracted, making the net sum of judgment entered in favour of the Respondent to be Kl 7,306,600.00. This amount was ordered to attract interest at the average short-term deposit rate from the date of the writ of summons to the date of judgment. Thereafter, to attract the current bank lending rate. The Respondent was also awarded costs. The Appellant appealed to this court against the whole judgment. The memorandum of appeal contained three grounds, namely:- 1. That the trial Judge failed to interpret the contractual relationship between the parties and consequently came to a wrong conclusion; 2. That the interest awarded on the Judgment sum should have been at short-term deposit rate; and 3. That having determined that the Appellant's counter-claim had succeeded, the trial court ought not to have condemned the Appellant to bear the costs of the suit. At the hearing of the appeal; counsel for the Appellant filed a notice of non-appearance and written heads of.argument for the consideration of the court. The gist of the written heads of argument on ground one is that the contractual relationship between the Appellant and the Respondent was spelt out and reduceq in writing in which the salient features were: that the contract was for the renovation of property; that the contractual sum was KlS,520,000.00; that all payments to the contractor would be made upon measurement and valuation of the works executed; that the contract period was three months; and that the Appellant ,, reserved the right to terminate the contract at any time if there was no progress or that the works being executed were substantial. It was pointed out in ground one that the contract signed by the parties had provided a clause which states:- "All payment will be made upon valuation of successful works done and measured. .. ,, It was submitted that no evidence was led as to the value and measurement of the works completed by the Respondent at the time the contract was terminated; that it was necessary for the value to have been supported by an independent assessment in the face of the conflict between the Appellant and the Respondent as to the value and extent of the works executed; and that after the court found that the value of the completed works was K13, 116,000.00, the amount of K6,715,000.00 found to have been paid to the Respondent should have been deducted and also the sum of K2,250,000.00 the value of the salvage building materials collected from the site by the Respondent should have been deducted to leave the balance of K4, 151,000.00, which the court should have found as being due to the Respondent in terms of the contract. At the outset, we must immediately indicate that the correct position in the Judgment is that the sums of K6,715,000.00 and K2,250,000.00 were actually deducted from what the trial court ascertained and found as the total sum of the award. We, therefore, do not see the basis of raising the issue of deduction . in this appeal. Further, written submissions on ground one, were that failure by the Respondent to provide independent assessment of the value of the works done and failure by the court to apply the I arithmetic set out, resulted in a wrong award being made; that although the court found that the Appellant admitted making the changes constituting the extra works, the parties did not agree on the costing; that the issue of extra works did not depend on the demeanor of the Appellant or the Respondent but on the express written agreement; that the amount of .,, K12,795.000.00 as value of extra works was nearly the contract sum of KlS,520,000.00; that the Respondent should not have undertaken the extra works without reducing them in writing; and that it would be unsafe to uphold the claim for extra works which were denied in the pleadings. The summary of the written heads of argument on ground two is that the award of interest at current bank lending rate after date of judgment was not in accordance with some judgments recently pronounced by this court. On ground three the summary of the written heads of argument is that the court ought to have ordered that each party bears its own costs as against condemning th~ Appellant to bear the costs of the suit. It was argued that the accepted and undisputed legal position is that costs follow the event as stated 1n the case of Attorney-General Vs Valentine Shula Musakanya1 and later in Matale. Vs ZCCM2 that there has to be default traceable to a party against whom the order for costs is made, and as stated in the case of Water Wells Limited Vs ,, ,, Wilson Samuel Jackson3 that it is also an accepted tenet of law that award of costs is in the discretion of court and that there are certain canons the court must conform with in exerc1s1ng its discretion; and that the order will be interfered with on appeal if this court is satisfied that no weight or sufficient weight was given to the circumstances necessitating the award of costs (See Hermina Collet Vs Van Zyl Brothers UMITED4. It was pointed out that in the present case, the court found as a fact that the Appellant had paid the Respondent, during the course of the performance of the contract by the Respondent, some money out of the contract price; and that the trial court further found that the Appellant's counter-claim for salvage building materials was proved. It was submitted that the Appellant was thus equally a successful litigant; but denied the benefit of this success by being condemned to pay costs of the whole suit. It was further submitted that the court did not attach sufficient weight to those aspects. " Counsel concluded by urging this court to allow the appeal and set aside the orders made. Counsel also asked for costs in this court in the event that the appeal was allowed. In response to the written heads of argument, Mr. Kabuka filed written heads of argument supplemented by oral submissions. The gist of the written response to ground one is that the court was on firm ground in the interpretation of the contract and the respective rights and obligations of the parties thereunder on the evidence adduced. Counsel relied on the case of Zulu Vs Avondale Housing Projects where it was stated:- ''Before this court can reverse findings of fact made by a trial judge, we would have to be satisfied that the findings in question were either perverse or made tn the absence of any relevant evidence or upon a misapprehension of the facts, or that they were findings which, on a proper view of the evidence no trial court acting correctly can reasonably make." It was submitted that evidence on record showed that the stage of the contract renovations had reached roof level; that from the common ground evidence, the court was entitled to make reasonable inference of the completed value from the contract sum to determine the matter with finality; that on extra works, the Appellant denied in Defence that any extra works -were done, but the denial was contradicted in his viva voce evidence, when he admitted in cross-examination that "From time to time we made changes to the planned renovations. The schedule .. Itemizes the changes which were made;" that apart from itemizing the extra works done, the schedule had a breakdown of the cost involved amounting to Kl2,795,000.00; and that the only reason advanced by the Appellant for refusing to pay was that "the (Respondent) used the same workers to do the extra works." It was submitted that in the circumstances, after evaluating the evidence and assessing the demeanor of the witnesses, the court was entitled to make a finding of fact on the issue. It was further submitted that the trial court was on firm ground by ,, first establishing the valid competing claims between the parties; then effecting a set off before the net judgment was entered in favour of the Respondent. The case of AMI Zambia Limited Vs Bimzi Limited6 was cited in support of the submission. The short response to ground two is that Section 2 of the Judgment Act, Cap 81 stipulates the parameters of the discretion which the trial court adhered to. The brief response to ground three is that the trial court exercised its jurisdiction as to costs judiciously; and that the Respondent having substantially succeeded with his action and there being no aspersion in the proceedings against him, he was entitled to costs in the court below and this court. The oral submission on all three grounds of appeal by Mr. Kabuka were a repetition of the written Respondent's heads of argument in a summary form. We have addressed our minds to the evidence on record, the judgment of the trial court and the written heads of argument by both learned counsel. On ground one, the argument was that the trial court failed to interpret the contractual relationship between the parties and consequently came to a wrong conclusion. We have examined the provisions of the contract. Among the provisions of the contract is one relating to Schedule of Rates which provided the total cost of the renovations to be KlS,520,000.00. This figure was common cause. The Appellant, in his own evidence, admitted that this was the agreed contract price. Another clause in the contract accepted by the trial court was that "In the event of the client terminating the contract, the I contractor will be paid for all successful works carried out until such time". The court found that the Appellant admitted that the works carried out reached roof. level; that the only complaint related to bent trusses. On the evidence, the court accepted that 80% of the works were done before the contract was terminated. In money terms, this came to K13, 116,000.00. The court also found that the value of extra works which were quantified was Kl2,795,000.00. The Appellant denied in Defence any extra works. But in evidence admitted the extra works, which were actually itemized with the cost indicated. The question of an independent assessment of the value of the works done was never an issue before the trial court. We agree with Mr. Kabuka's submissions in response to ground one that on the pleadings and the evidence on record, the trial court was entitled to make a reasonable inference of the value of the completed works from the contract sum, which was agreed. As we have said in many cases, an appellate court is very reluctant and very slow to reverse findings of fact unless : certain conditions have been met. Thus, in the case of Zulu Vs Avondale Housing Project Limited5 this court held that "An appellate court will only reverse findings of fact made by a trial court if it is satisfied that the findings in question were either perverse or made in the absence of any relevant evidence or upon a misapprehension of the facts." ,. The court here made findings of fact on the pleadings and evidence. Although the contract contained a clause which provided that "All payment will be made upon valuation of successful works done and mea.sured. ... "; the court was still, in the circumstances of this case, where there was a breach of contract, entitled to make findings of fact. We cannot say that the findings of fact made were "either perverse or made in the absence of any relevant e~dence or upon a misapprehension of the facts or that they were findings which, on a proper view of the evidence no trial court acting correctly can reasonably make". As we see, the Appellant's arguments on ground one, the figures are not seriously challenged. His complaint seems to be concerned with the arithmetic and the deductions. We find no merit in ground one. We, therefore, dismiss ground one of appeal. • Ground two related to awarding of interest at current bank lending rate after judgment. According to counsel for the Appellant, this was not in accordance with some judgments recently pronounced by this court. No recent authority pronounced by this court was cited. But counsel's concern seemed to be that current lending rates are on the higher side and that the element of interest in the post judgment period could have the effect of increasing the amount finally payable to unmanageable proportions. That could be correct. But the awarding of post judgment interest is in the discretion of the court supported by law. Section 2 of the Judgment Act Cap 81 reads: "Every Judgment ..... shall carry interest as may be determined by the Court which rate shall not excee4 the current lending rate as determined by the Bank of Zambia from the time of entering up such judgment until the same shall be satisfied. .... " We find no merit in ground two. It is, accordingly, dismissed. Ground three is a complaint against the awarding of costs to the Respondent. The argument was that although the accepted legal position is that costs follow the event; it is also accepted legal position that there has to be default traceable to the party against whom the order of costs is made. It was also pointed out that the award of costs is discretionary; but that there are certain canons to which the trial court must conform in exercising the discretion. It was pointed out that in the present case, the trial court found as a fact that the Appellant had paid to the Respondent during the course of the performance of the contract by the Respondent the sum of K6,716,000.00 out of the contract sum of Kl5,520,000.00. Further, that the trial judge found that the counter-claim for K2,250,000.00 salvage building materials was proved. It was submitted that the Appellant was equally a successful litigant; but denied the benefit of this success by being condemned to pay the costs of the suit; and that the court did not attach sufficient weight to these aspects. ... This ground of appeal was well taken. We agree that the trial court, in awarding costs to the Respondent, did not attach sufficient weight to payments made during the performance of the contract and to the success on the counter-claim. We allow ground three of appeal. We set aside the order of costs made by the trial judge. The outcome of this appeal is that grounds one and two are unsuccessful and dismissed. Ground three is successful and allowed. The appeal, therefore, stands dismissed. But we order that in this court and in the court below each party will .bear their own costs. ~~ ........................ ............. E. L. Sakala CHIEF JUSTICE P. Chitengi SUPREME COURT JUDGE C. S. Mushabati SUPREME COURT JUDGE /rm.c