Irene Chinjavata v The Administrator-General (SCZ No. 20/2004) [2004] ZMSC 150 (16 July 2004)

(285) IN THE SUPREME COURT OF ZAMBIA SCZ No. 20/2004 HOLDEN AT KABWE AND LUSAKA Appeal No. 168/99 BETWEEN: IRENE CHINJAVATA Appellant AND THE ADMINISTRATOR-GENERAL Respondent CORAM: Sakala, CJ., Mambilima and Silomba JJs 5th November 2003 and 16th July 2004 For the Appellant: Mr. M. P. Muyawala ofZdekezdeke and Company For the Respondent: Mr. M. Kashewe, Deputy Administrator General and Official Receiver Sakala, CJ., delivered the Judgment of the Court. JUDGMENT Cases referred to: 1. Davison and Oliver V. The Administrator-General [1970] ZR 38 2. Appolo Enterprises Ltd V. Enock Percy Kavindele, Appeal No. 98/1995 3. Zambia Industrial and Mining Corporation Ltd (In liquidation) V. Lishomwa Muuka SCZ Judgment No. I ofl998 (286) 4. Ozokwo V. The Attorney-General [1985] ZR 218 5. Duly Motors (Z) Ltd V. Katongo and Livingstone Motor Assembles [1986} ZR 61 6. Banda V. Siame [1988/1989] ZR 81 The delay in delivering this Judgment is very much regretted. It was caused partly by pressure of work and partly due to the nature of the issues raised in the appeal. This is an appeal from a judgment of a High Court Judge dismissing the appellant's claim for damages for negligence in the management of the estate of the late Leonard C. Chinjavata and for a declaration that the sale of the premises for which the respondent has failed to account for since 1985 be rescinded for want of consideration. This appeal has a long history. The writ was filed sometime in 1995. At the trial, only the appellant adduced evidence. The facts, however, were Q common cause. The appellant's husband died intestate in 1979, leaving, among other things, the matrimonial home. Due to problems in the family, it was agreed that the matrimonial home be sold. The respondent was then appointed the administrator of the estate. Among the administrator's duties for the management of the estate, was to sell the matrimonial home. The respondent administrator subsequently instructed Messrs Lusaka Partners to sell the matrimonial home. The house (287) was sold at K62, 000 in 1984. After the deduction of legal fees for Messrs Lusaka Partners, the balance that remained was K45, 921.13. It was not in dispute that Messrs Lusaka Partners, by letter dated 2ih February 1985, sent a cheque in the sum ofK45, 921.13 to the Respondent in full settlement of the proceeds of the sale of the matrimonial home. It was common cause that the cheque could not and was not encashed because Messrs Lusaka Partners' Bank Account had been frozen. Consequently, the respondent held on to the cheque. From the facts not in dispute, it is clear that the full settlement of the sale of the matrimonial home has not been done to date. On 12th September 1995, the Deputy Registrar, in cause No. 1985/HP/84 between the respondent and Lusaka Partners, ordered . Lusaka Partners to pay the respondent the sum ofK45, 921.13 and K120.00 costs at 20% interest from 26th July 1985 to 14th June 1995 and thereafter, at 6% to date of payment of the principal sum. This fact was communicated to the appellant's advocates. The appellant's advocates rejected, through very strong acrimonious correspondence, to accept the amount ordered by the Deputy Registrar, instead they made counter proposals based on ~ecalculating the sum ofK45, 921.13 in dollars then and multiplying it at the then current exchange rate as at April 1995. This worked out to be K109, 855,045.00 as representing the value of the matrimonial home in 1995. The appellant demanded this amount. It must be mentioned at this juncture, that the appellant was not a party to cause No. 1985/HP/84. (288) The learned trial Judge considered the pleadings and the appellant's evidence on record. On the facts not in dispute, the court found that the respondent was not negligent in the management of the estate of the late Leonard Chinjavanta and that the retention of Messrs Lusaka Partners by the respondent was in fact lawful and necessary to effect the process of the sale expeditiously for the benefit of the estate. The court found that there was no dereliction of duty and citing Section 30 of the Administrator General's Act, the court found that the respondent had not committed any tortious or wrongful acts in the management of the estate, but that in fact, in pursuance of the duty imposed on them by the law, they went ahead and sued Messrs Lusaka Partners in cause No. 1985/HP/84 to recover the sale proceeds owing to the estate. The court noted that on 26th July 1995, the respondent obtained judgment in the sum of K45, 921.13. This was communicated to the appellant's advocates. The court concluded that it was unable, in these circumstances, to find that the respondent had failed and refused to account to the beneficiaries of the estate. On the recalculated claim of Kl 09, 859,045 based on the dollar value or the return of the house to the appellant, the court held that the claim was unconscionable and unattainable. The appellant's claims were all dismissed with costs. On behalf of the appellant, a memorandum of appeal was filed containing two grounds; that the learned Judge erred in law when he held that the respondent was not tortious nor negligent in the management of the estate, 0 (289) and that the court below failed to see the three ingredients that constitute negligence. The appellant's advocates filed written heads of argument in which the two grounds were argued as one ground. These written heads were augmented by brief oral arguments. The gist of the submissions on behalf of the appellant is that the failure of the respondent to release the proceeds of the sale of the house on time, leading to loss of value of the money realized, amounted to negligence disentitling the respondent to the protection of Section 30 of the Administrator-General's Act as interpreted in the case of Davidson and Oliver Vs. The Administrator-General.(l) According to the submission, the appellant does not dispute the bona fides of the respondent but the legal effects of the legal acts. It was submitted that the sale took place in 1985; 10 years before the writ was issued. It was contended that at that time, whatever was realized, had value. It was pointed out that the negligence was the failure to release the proceeds of the sale of the house, which proceeds have now lost value; and that all the appellant wants now are the proceeds from the sale of the house at correct value or the return of the house itself. In the oral submissions, it was contended that the value of the house should be as at the date of the writ. And in the written submissions, it was argued that the order of the Deputy Registrar, granting the respondent K45, 921.13 with interests at 20% should have been challenged because it was totally inadequate. The submission was that it was negligence on the part of the Administrator-General to remain quiet. It was further argued in the written heads that section 30 of the Administrator-General's Act, cited by the (290) lower Court in its judgment, should have been used in favour of the appellant as the agent of the Administrator-General, Messrs Lusaka Partners, acted willfully and with gross negligence, as the period between the sale of the house and the release of the proceeds of the said sale was long and inordinate. It was contended that this was negligence which compelled the Administrator-General, the respondent, to sue the agent in cause No 1985/HP/84 to which the appellant was not a party. It was thus submitted that the court erred in holding that the appellant had already been heard. On behalf of the respondent, Mr. Kashewe also filed written heads of argument. In the short oral submissions, he explained that the respondent brought an action against Lusaka Partners and obtained judgment. However, the appellant refused to accept the money unless paid in dollars. In the written heads of argument, Counsel argued that the trial Judge did not err in law when he held that the respondent was not tortious nor negligent in the management of the estate; pointing out that the house was sold by consent of the beneficiaries including the appellant; the purpose having been to distribute the proceeds of the sale to all the beneficiaries. But a cheque in full payment of the proceeds of sale was by "force majeure," a court order, freezing the accounts of Lusaka Partners, rendered incapable of being cashed in 1985; followed by the respondent, in the same year, suing for the recovery of the sale proceeds of the said sale in cause No. 1985/HP/84. It was submitted that the order of the Deputy Registrar granting the respondent K45, 921.13 with interest at 20% was reasonable. It was contended that the decisions of this Court in Appolo Enterprises Ltd V. Enock Percy (291) Kavindele,<2 > and Zambia Industrial and Mining Corporation Ltd (In liquidation) V. Lishomwa Muuka<3 > cannot be distinguished from the current case as the question in all the cases depends on determining loss in the transactions that involve the Zambian Kwacha. We have anxiously addressed our minds to the pleadings and the evidence on record as well as to the Judgment and the submissions by both learned counsel. The facts in this case, as we understand them, are very straightforward. Hence, we do not intend to address ourselves to the submissions at great length. The respondents were appointed as Administrator of the estate of the late Leonard C. Chinjavata. In 1984, the respondent sold the premises owned by the estate through Lusaka Partners at K45, 921.13. This money was not handed over to the appellant because the cheque in that amount could not be encashed because the Accounts of Lusaka Partners had been frozen. The appellant had nothing to do with this development. However, in 1995 the CJ Deputy Registrar, in an action brought by the respondent, ordered Lusaka Partners to pay the respondent this sum with interest at 20% from 1985 which at April, 1995 brought the amount to be paid to K276, 433.00. This amount was rejected by the appellant as being totally inadequate and too low. The appellant then recalculated the amount by quoting the principal sum in Dollars and multiplying it by the then current exchange rate bringing the amount as at April 1995 to K109, 855,04. It is common cause that the respondent has not to date paid either the amount ordered by the Deputy Registrar or the recalculated amount based on the US Dollar rate. - - - - - - - - - - - - - - - - - - - - - - - (292) We must quickly deal with the recalculated amount of K109, 855,045.00 based on the then dollar rate. This issue was first considered in l We said in the unreported case of Apollo Enterprises Ltd V. Kavindele. < that case: "We have also given consideration to the submissions and arguments regarding the sudden and dramatic changes in the internal value of the Kwacha. The transaction was in Kwacha terms and no question of any foreign currency, damages or debt arises. We can find no authority for departing from the general rule that where the loss is a money loss, the award to the Plaintiff should be taken on the value of the money at the rate of breach in the case of contract rather than at the time that the loss was determined - a Kwacha in Zambia is a Kwacha whatever its international value, it is the constant unit of value by which we have to measure everything; prices of things may go up or down; other currencies may go up and down, but the Kwacha remains the same." CJ In 1998, in the case ofZIMCO V. Muuka, < 3l we also said "There is in our considered view clearly discernible from the cases ample authority and reason for disallowing attempts in transactions expressed in Kwacha to hedge against the depreciation of internal value of our currency notionally storing the same in a foreign currency at an earlier and more favourable rate of exchange and then reconverting the foreign sum at today's rate. It is unrealistic to ',, (293) look at our currency in that~- Accordingly, we 6o not adopt that approach." ',~~ The principles of law enunciated in those two cas~I stand as good law. We cannot allow transactions expressed in K wacha ~~~e against the d€preciation of internal value of our currency, no'donally storing,t,,1-i.,s. same in a foreign currency at a favourable rate. () Having said so, we want to make it clear that we are not oblivious to the facts of this case. In 1984, K45, 921.13 was very good money in terms of value than today. The truth of the situation is that for whatever reason, the respondent has not paid this money to the appellant to date and neither has the same been paid into court. Indeed, we are mindful that a house which fetched K45, 921.13 in 1984 could have fetched far more in 1995. The learned Judge dismissed the appellant's claim on the grounds that the claim for damages for K109, 855,045 or return of the house was (_) unconscionable and unattainable; and that the appellant's case had been heard and determined in cause No. 1985/HP/84. While we cannot allow the amount ofK109, 855,045 as damages, but for different reason, we do not agree that the appellant's case had been heard and determined in cause No. 1985/HP/84. That action was between the respondent and Lusaka Partners. The appellant was not a party to that cause. It follows that, while the learned trial Judge was on firm ground in rejecting the recalculated claim of Kl 09, 855,045, he misdirected himself in rejecting - - - - - - - - - - - - - - (294) the appellant's claim on the ground that the appellant's case had been already heard and determined in cause No. 1985/HP/84. The appellant has to date not been paid for the sale of the premises. The sum of K45, 921.13 was not paid into Court. The appellant contended that the respondent was negligent by not appealing against the award by the Deputy Registrar of this sum in 1995, as it was too low, inadequate and wrong in principle. Whether the respondent was negligent or not, the fact is ' that to date, the respondent has not accounted for the sale of the matrimonial home of the estate of the late Chinjavata. The issue for consideration is, therefore, not straightforward. What then would be a conscionable and just award of damages for a house that was sold in 1984 but proceeds not accounted for up to date? In our view, to uphold K45, 921.13 today for a house in Roma Township, would not reflect the reality and justice in the case. In the case of Ozokwo V. The Attorney General, <4 > the facts are not relevant to the present case; but this Court () considered the effect of inflation on the cost of airfares at the time of payment. The Court said "Mr. Kinariwala has argued that, if the appellant was paid too little, that he cannot claim anything other than interest for money which he should have been paid and of which he has been deprived. There is an abundance of authority and especially the case of Jefford and Another v Gee (1970) (1) All E. R. 120 (1), which, although it has been qualified by later judgments, remains in effect in this respect, ·• (295) that a plaintiff who has been deprived of his money must he paid a reasonable rate of interest from the time when he was first wrongfully deprived, in order to recompense him. We agree entirely with this authority and this court has always applied that principle. However, in the extraordinary circumstances, which apply today whereby inflation has made old values meaningless, awards of a plaintiff who has been wrongly deprived of something must he realistic and afford a fair recompense. We accept Mr. Zulu's argument that, at the time it was needed, insufficient payment was made to cover the cost of air passages at the date of such payment, and we also accept that the purpose of his claim is to provide for the actual cost of air passages when the money is paid. In order to give sensible effect to the learned trial judge's original judgment we allow this ground of appeal and we order that the respondent pay to the appellant the cost of air passages by Aeroflot direct between Lusaka and Moscow at the rate applicable when the actual payment is made." And in the case of Duly Motors (Z) Ltd V. Katongo and Livingstone Motor Assembles,<5l again facts not relevant to the present case, this Court affirmed the principle in Ozokwo case when it said:- "As to the quantum of damages, as we said in the case of Ozokwo v The Attorney-General (6) where there has been inflation, as there has been in this country, a plaintiff who has been deprived of something must he awarded realistic damages which · will afford him a fair recompense for his loss. " 0 - - - - - - - - - - - - - - - - - - - (296) Thus in Muuka <3> case we said: "It was not suggested in the APOLLO case that the decline in the internal value of the Kwacha cannot he considered in appropriate situations. Indeed, the courts reflected this reality especially whenever general damages for non-pecuniary losses are awarded and also when guidance for an award is sought from the old case - precedents. " In Banda V. Siame,<6>this Court observed that: "Since the 5th of October, 1985, there has been a devaluation of Kwacha, and future awards for pain and suffering must take that devaluation into account. However, as we have emphasized before in this court, this is not a simple matter of multiplying previous awards by the amount to which the Kwacha has been devalued. Courts must take into account the general cost of living in this country and the real value that will he received. In calculating damages in future, therefore, awards should he less than what would result from a simple multiplication of previous awards as compared with the devalued Kwacha." In our view, the facts of this case present an appropriate situation in which the decline of the internal value of the Kwacha for real property must be considered. (297) The extraordinary circumstances of the present case demand that it would be conscionable and just. that whatever has to be awarded to the appellant must be realistic in order to give sensible effect to the order of the Deputy Registrar of K45, 921.13 in 1995 by taking into account the devaluation to afford a fair recompense. This means that the Court ought to have taken into account the general cost and the value of the property at the time the Deputy Registrar made his order. In the present case, we are satisfied that the leaned trial Judge, in dismissing the appellant's claims on the basis of being unconscionable and having already been heard in cause No. 1985/HP/84, fell into serious error and misapprehended the gist of the appellant's claim that the respondent had since 1984 not accounted for the proceeds of the sale of the house. As we are not in a position to determine the value and the cost of the property at the time the Deputy Registrar made his order, we have no alternative but to allow the appeal and order that there be an assessment before the Deputy Registrar to determine the value of the house as at the time the Deputy Registrar made his order in 1995. This will require evidence from a qualified professional valuer. The amount to be assessed should be paid with interest at the average short-term deposit rate from lih September 1995 up to date of this judgment and thereafter, at the average lending rate as determined by Bank of Zambia up to date of payment. CJ - - - - - - - - 14 . (298) The Appeal is therefore allowed. Costs are awarded to the appellant to be taxed in default of agreement. ¼Of,\ .......... ~W. .................. . E. L. Sakala CIDEF JUSTICE r'\ c=:o/~ c:·} ...... 1: ................................ . I. C. Mambilima SUPREME COURT JUDGE t. ;tv~ ........... ~ ......................... .. S. S. Silomba SUPREME COURT JUDGE 0