RB Technical Services Limited v Dar Farms and Transport Limited (APPEAL NO. 123/2017) [2018] ZMCA 406 (24 May 2018)

I' IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT LUSAKA (Civil Jurisdiction) APPEAL NO. 123/2017 BETWEEN: RB TECHNICAL SERVICES LIMIT AND ••tl_,.,.. ,.._.,. _ 2 4 MAY 2018 ---- ~, REGISTRY ~ O. Box 50067, L~ DAR FARMS AND TRANSPORT LIMITED RESPONDENT CORAM: CHASHI, SIAVWAPA AND NGULUBE, JJA On 23rd January 2018, 9th, 15th February 2018 and 24th May 2018 FOR THE APPELLANT: MR R. MAINZA OF MESSRS MAINZA & CO. FOR THE RESPONDENT: MR. KAUNDA OF MESSRS ELLIS & CO. J U D G M E N T SIAVWAPA, JA, delivered the Judgment of the Court. CASES REFERRED TO: 1. Wilson Masauso Zulu v Avondale Housing Project (1982} ZR 172 2. Attorney General v Marcus Kampum.ba Achiume (1983) ZR 3. Banda v Chief Immigration 0[fi.cer (1994) ZR 4. Galaunia Farms Limited v National Milling Company & Another (2002) ZR 135 5. Lazarus v Ndimangele (1913} CPD 732. 732 6. Botha v Giyose TIA P~ragon Fisheries (2007} SCA 73 (RSA} This is an appeal against the Judgment of the Court below dismissing all the Appellant's claims against the Respondent. The Appellant advanced fourteen grounds of appeal as listed in the Memorandum of Appeal filed into Court on 8 th August 2017. The following are the grounds of appeal; 1. The learned trial Judge misdirected himself in law and in fact when he held that PWl confirmed in cross-examination that there are no delivery notes in respect of the amounts claimed inKwacha. 2. The learned trial Judge in assessing and evaluating the testimony of the Plaintiff's witnesses misdirected himself in law when he took into account in his Judgment hypothetical answers given by PWl, PW3 and PW4 in response to hypothetical questions put to them by the advocate for the Defendant under cross-examination despite the said hypothetical answers not constituting evidence. 3. The learned trial Judge misdirected himself in law and in fact when he failed to take into account in his judgment documentary evidence in form of delivery notes appearing at pages 4 7 to 78 of the Plaintiff's bundle of documents and the official Referee's Report which, inter alia con.firms that goods worth K366, 769,847.00 are supported by delivery notes. 4 .................... (sia). 5. The evaluation of the demeanours of the two key witnesses namely PWI and DWI by the learned trial Judge was imbalanced in that the learned trial Judge concentrated only on the demeanour of PWI while glossing over the demeanours of DWI, DW2 and DW3. 6. The holding by the learned trial Judge that DWI 's demeanour was truthful and that he was inclined to accept his evidence that the spare parts in respect of the claim denominated in Kwacha were not delivered is against the weight of oral and documentary evidence adduced by PWI, PW4 and the official Referee's Report. 7. The learned trial Judge misdirected himself in law and inf act when he held that the argument by Counsel for the Plaintiff that the Plaintiff had proved its claim for the sum of K894, 447,6I2.00 contradicts the evidence of PWI which was that the Plaintiff had not produced supporting documents for the deliveries. 8. The learned trial Judge misdirected himself in law and in fact when he relied on the principle established by the Supreme Court in the Galaunia Farms Ltd v National Milling Company and Another case, that silence does not constitute consent or agreement in the face of evidence that the letters written to the Defendant by the Plaintiff did not constitute an offer which is capable of being ignored but a demand requiring an answer from the addressee. 9. The learned trial Judge misdirected himself in law and in fact when he held that the Plaintiff had no proprietary interest in the spare parts whose value is denominated in foreign currency and that it was not privy to the contract between the Defendant and the foreign suppliers in the face of oral and documentary evidence that the Plaintiff was an agent of foreign suppliers and further evidence that the Def end ant effected payment due to foreign suppliers through the Plaintiff 1 0. The learned trial Judge misdirected himself in law and in fact when he held that the fact that the Plaintiff produces a statement of account does not prove the Defendant's indebtedness and in holding that the admission by DWI that he endorsed on one of the statements in the Plaintiffs bundle of documents the words ''paid and balance of K26, 739.01" does not prove the Defendant's indebtedness to the Plaintiff 11. The learned trial Judge misdirected himself in law and in fact when he held that if indeed there is an admission of the claim, it is only the particular foreign suppliers who can benefit from them in the face of evidence that the Plaintiff was an agent for foreign suppliers as evidenced by payments made by the Defendant through the Plaintiff 12. The learned trial Judge misdirected himself in law and in fact when he held that his finding that the statement relates to moneys owed to third parties indicated therein negates the argument by the Plaintiff that the limitation period was J4 interrupted by payments made by the Def end ant towards the claim denominated in foreign currency. 13. The learned trial Judge fell into error when he failed to take into account DWI 's admission under cross-examination in his judgment that the said witness was not sure whether payments paid to the Plaintiff through PWl were personal loans to PWl as alleged in the Defence and DWI 's witness' statement'. 14. The learned trial Judge misdirected himself in law and in fact when he held that to say that the Plaintiff's case is murky is an understatement and that it was totally bereft of merit. Counsel for the Appellants filed heads of argument on 9 th October 201 7 through which he argued the grounds of appeal in the following clusters namely; Grounds 1, 3, 7, 13 and 14 together. Ground 2, alone, Grounds 5 and 6 together, Ground 8 alone and Grounds 9, 10, 11 and 12 together. Counsel for the Respondent only filed the heads of argument on 6 th February 2018 and Counsel for the Appellant filed heads of argument in reply on 12th February 2018. At the core of the first cluster of grounds of appeal is the question whether or not the Appellant proved its claim for both the kwacha and foreign currency denominated claims. The argument advanced by the Appellant attacks the lower court's Judgment in so far as it JS states that the kwacha denominated claim had not been proved largely because there were no delivery notes to support supply and that the payments made to the Appellant claimed as payments towards the liquidation of the amounts due to foreign suppliers were in fact personal loans to PWl, the Appellant's Chief Executive Officer. In his Judgment, the learned trial Judge in the court below made the following findings of fact as reflected at page 26 lines 4 to 14 of Volume 1 of the Record of Appeal; "In cross-examination, in relation to claim denominated in Kwacha, PWl indicated that there were no delivery notes in the Plaintiff's bundle of documents to evidence deliveries allegedly made against various proforma invoices and letters of delivery ..... " At page 48 lines 14 to 1 7 and page 49 lines 1 to 6 of the same volume, the learned trial Judge in the court below made the following finding of fact; "The evidence of PWl the key witness for the Plaintiff, in cross-examination confirmed that there were no delivery notes in respect of the amounts claimed. He however, insisted that the spare parts were delivered just like DWl insisted that the spare parts were not delivered. PWl and the other Plaintiff's witnesses were, however, J6 magnanimous and did concede that in the absence of proof of delivery the Defendant was entitled to refuse to pay for the alleged delivery. I have taken this fact into consideration in delivering on this claim". The objection advanced by the Appellant to the learned Judge 's findings is that they do not reflect what PW 1 said on the record. In supporting that position, Counsel for the Appellant referred to pages 1747 to 1777 which pages contain that part of cross examination of PWl during which he was shown a number of proforma invoices in the Plaintiffs bundle of documents after which he was asked to show the court delivery notes relating to each proforma invoice to which PW 1 replied that he did not have delivery notes relating to those proforma invoices. The Appellant argues that the proforma invoices PW 1 was cross examined upon were not the only proforma invoices exhibited by the Appellant and that PWl was not cross-examined on many other proforma invoices and delivery notes exhibited in the Plaintiffs bundle of documents. In the Appellant's arguments , the Appellant did not rely on the proforma invoices PW 1 was cross-examined upon to justify the kwacha denominated claim but on the delivery notes exhibited at pages 4 7 to 78 and proforma invoices exhibited at pages 1 to 46 of the Plaintiffs bundle of documents and reliance was placed on J7 PWl 's witness' statement at page 386 volume two of the Record of Appeal. On account of the foregoing, we are called upon to interfere with the lower Court's findings of fact on account that the findings were perverse and premised on a misapprehension of the facts. The cases of Wilson Masauso Zulu v Avondale Housing Proiect Ltd1, Attorney-General v. Marcus Kampumba Achiume2 and Banda v Chief Immigration Offlcer and the Attomey-General3 were relied upon. The cases lay down the principle that an Appellate Court will not reverse findings of fact unless the findings were perverse, not supported by evidence or based on a misapprehension of the facts. With regard to the official Referee's Report the argument is that the learned trial Judge ought to have taken into account the official Report in his judgment which found that the sum of K366, 769,847.00 was supported by delivery notes on the kwacha denominated claim. As a starting point in dealing with the Appellant's arguments in the first five grounds of appeal, we re-affirm the position of the law that an appellate court shall not interfere, with a trial Judge's findings of fact except on account of perversity, misapprehension of the facts or such findings not being based on evidence on the record. It is also important to stress that only findings of fact by the trial Judge that form the basis of the decision are liable to be interfered with. In this case, after analysing the evidence before him, the learned trial Judge came to the conclusion that the Plaintiffs case was totally bereft of merit (see page 56 volume one of the record of appeal). The learned Judge dismissed the whole claim accordingly. The above conclusion by the learned trial Judge is based on his earlier statement at page 48 line 11 to page 49 line 6 of volume one of the Record of proceedings which reads as fallows; "In regard to the amounts claimed in kwacha, the Defendant has denied the claim because it alleges that there is no evidence of delivery in the form of delivery notes. The evidence of PWl, the key witness for the Plaintiff, in cross-examination confirmed that there are no delivery notes in respect of the amounts claimed. He however, was insistent that th:e spare parts were delivered just like DWl insisted that the spare parts were not delivered. PWl and the other Plaintiffs witnesses were however, magnanimous and did concede that in the absence of proof of delivery the Defendant was entitled to refuse to pay for the alleged delivery. I have taken this fact into consideration in deliberating on this claim." Clearly, the learned Judge made a finding of fact that PW 1 and the other witnesses for the Plaintiff conceded that the claims were not supported by delivery notes and as such the Defendant had no obligation to pay. We have considered this finding in light of the Appellant's heads of argument which clearly show that the Appellant has exhibited more than thirty delivery notes which occur from page 193 to 224 volume one of the Record of Appeal. It is clear from his witness statement that PWl pointed to delivery notes exhibited in the Plaintiffs bundle of documents in support of the claim denominated in kwacha. We also noted that in cross examination, which runs from page 1746 volume six to page 1886 volume seven of the Record of Appeal, nowhere does PW 1 concede that the Plaintiffs claim is not supported by delivery notes. PWl only conceded lack of delivery notes in respect of the specific proforma invoices on which he was challenged to show the court the delivery notes in respect thereof. Having carefully examined the record of proceedings in the court below and the Appellant's heads of argument, we find nothing as would inform the learned trial Judge that the Appellant's witnesses conceded to lack of proof of delivery in respect of all the invoices. To the contrary, there is evidence that some deliveries were supported by delivery notes in the Plaintiffs bundle of documents. We therefore come to the conclusion that the learned trial Judge failed to analyse the evidence before him properly, resulting in his finding that the Appellant's claim was not supported by deliveries by way of delivery notes. That finding of fact is not supported by the evidence on the record by reason of which we are entitled to interfere with the learned trial Judge's findings of fact. We accordingly uphold the first cluster of grounds of appeal and allow the appeal to that extent. The second ground of appeal attacks the learned trial Judge's reliance on answers to hypothetical questions put to PW 1, PW3 and PW 4 in cross-examination. In the heads of argument, from page 59 to 61, the following questions were extracted from the record of proceedings. 1. Do you accept that my client is perfectly entitled to ask for proof of delivery, when you demand payments? PW 1. It is correct my lord 2. Now given that Dar Farms and Transport Limited is saying we did not receive the spare parts relating to this claim of K894, 000,000 plus, should it pay for things it has not received? PW2. If never received you cannot pay. Jl 1 3. Let me put it this way Mrs Kachamba, Dar Farms is saying it cannot pay for spares that have not been supplied to it. That is the position that it has taken. Should it pay for things it has not received, Mrs Kachamba in this context? Just tell the Court if Dar Farms and Transport Limited should pay for spare parts which it says it never received? PW3. They should pay for spare parts that they have received. 4. Their position is that they have paid for all the spare parts that they have received. The spare parts making the claim before this honourable court were not received by them so should they still nonetheless pay for spare parts that were not received by them? PW3. No It is submitted that it was on the basis of the above cited questions and answers that the learned trial Judge made the following finding of fact reflected at page 49 lines 1 to 6 volume one of the Record of Appeal as earlier alluded to. We have already considered the previous grounds, but we shall add that the questions asked to the witnesses by Counsel for the Respondent were crafted in such a way that they elicited answers that would look like admissions on the part of the witnesses. It is J12 however clear that the said questions were based on the position taken by one side, the Respondent. In making his findings of fact in that regard, the learned trial Judge failed to see that the witnesses' answers were based on the assumption that, what the Respondent was saying was the correct position and not that the witnesses had accepted the Respondent's position as correct. In arriving at the conclusion that the Appellant's witnesses had conceded to the Respondent's denial of liability, the learned trial Judge failed to take into account the appellant's position and evidence relating to the invoices and delivery notes exhibited in the Appellant's bundle of documents. To that extent, we take the view that, had the learned trial Judge taken into account the Appellant's evidence and the said exhibits, he would have arrived at a different conclusion. We therefore agree with Counsel for the Appellant that the learned trial Judge's evaluation of that part of the evidence was erroneous as such evidence speaks to a hypothetical as opposed to an established position as between the parties. We can also state that, the answers were factual in so far as they relate to the invoices which the Appellants' witnesses admitted to not being backed by any delivery notes but not to the rest of the invoices backed by the delivery notes referred to earlier in our Judgment. This ground is equally allowed. Jl3 , ' . Grounds five and six attack the learned trial Judge evaluation and reliance on the demeanours of PWl and DWI in his Judgment. In his Judgment, at page 49 line 7 of volume one of the Record of Appeal, the learned trial Judge made the following statement; "There being no evi.dence of deliveries I was therefore, left with no choice but to make my decision by examining the demeanours of the two key witnesses being PWl and DWl in deciding whether or not spare parts in relating to the claim in kwacha were delivered". At the same page at line 15 the learned trial Judge went on to state as follows; "The record attests to the fact that the demeanour of PWl was questionable because throughout cross examination, he was evasive and un co-operative. This prompted me to intervene on a number of occasions and remind him that he was obliged to answer the questions as put to him and that his demeanour was on test. On the other hand, DWl's demeanour was truthful and I am inclined to accept his evi.dence that the spare parts in respect of the claim denominated in kwacha were not delivered". The Appellant has taken issue with the learned trial Judge's apparent one sided or biased evaluation of the two key witnesses in Jl4 so far as evasiveness 1n answenng questions during cross examination is concerned. The Appellant has submitted that DWI was equally evasive and a few instances where the court intervened were cited but added that on a number of occasions, the court did not intervene. Pages 2076, 2081 and 2120 of volume 7 of the Record of Appeal were cited in the Appellant's heads of argument as instances where the learned trial Judge either intervened or chose not to when DWI gave evasive answers during cross-examination. We have perused the record of proceedings in the court below and we agree with the Appellant that the learned trial Judge did intervene and guide both PWland DWI during cross-examination for being evasive in responding to questions put to them. It would therefore appear to us that the learned trial Judge's evaluation of the demeanours of the two witnesses based on evasiveness and lack of co-operation is unjustifiably unbalanced and tipped in favour of DWI, contrary to the evidence on the record. In any case, we find the credibility imputed to DWl's testimony based on his demeanour at variance with the facts on the record as argued by the Appellant. This is so because in paragraph 2 of his witness' statement, DWI avers that no goods relating to the kwacha denominated claim were delivered as no delivery documents were furnished to the J15 ' . \ Respondent. However, in cross-examination, at page 2071 volume seven of the Record of Appeal, DWl concedes delivery but disputes the amount being claimed. Another point of dispute as to DWl 's credibility as assessed by the learned trial Judge relates to the foreign currency denominated claim. The argument by the Appellant is that where as in his witness' statement, at paragraph 4, DW 1 categorically states that the part payments made to PWl were loans to him, in cross-examination, when referred to the specific amounts, his answers were that he did not know whether the amounts in issue were paid to PW 1 as loans or not. The cross-examination in that respect is contained at page 2082 to 2085 volume seven of the Record of Appeal. We therefore agree with the Appellant that in fact, DW 1 's testimony was exposed as being untruthful in cross-examination contrary to the learned trial Judge's finding that he was a truthful witness. We therefore allow grounds five and six as well. Ground 8 was argued as a standalone as it seeks to impugn the learned trial Judge's reliance on the case of Galaunia Farms Limited V National Milling Company and anothe-r4 in so far as it holds that silence does not constitute consent or agreement. This ground only seeks to distinguish the facts thereof to the facts in this case and the argument is that the cited case dealt with the principle of offer and acceptance and held that an offeree who does nothing about an offer is not deemed to accept it by his silence. J16 ' . In this case, the Appellant wrote to the Respondent claiming the kwacha amount but the Respondent did not respond and the learned Judge found that the silence did not constitute acceptance of its indebtedness. We however, do not find it necessary to address this ground because in our view, it is not at the core of the learned Judge's decision to dismiss the appeal as highlighted earlier in our Judgment. The last grounds argued together are 9, 10, 11 and 12 which all relate to the claim denominated in foreign currency. The learned trial Judge dismissed this claim after finding that the Appellant, not being party to the contracts, could not benefit from them. The Appellant has argued that it was an agent of the foreign suppliers and as such had the locus standi to claim on behalf of its principal foreign suppliers. We note and agree with the Appellant that on the documentary evidence and the conduct of the Appellant, there was an agent and principal relationship between the Appellant and foreign suppliers. It is however trite law that an agent cannot sue the third party on behalf of the principle who is known as the agent is not a party to the contract and therefore lacks locus standi. This was as stated by Hopley Jin Lazarus v Ndimangele 5. J17 "When an agent enters into a contract openly and notoriously for a principal and it is known that he is acting as a known principal, that principal is the person, if any objection is taken, who should be the Plaintiff when anything has to be recovered from his side of the contract. There are exceptions, however, to this rule; one of them is the exception which story puts, where the agent is the only known or ostensible principal, and therefore, in the contemplation of the law, is the real contracting party ......... " This principle was upheld in case of Botha v Giyose t/ a Paragon Fisheries 6 . Clearly therefore, the learned trial Judge was on firm ground to find that the Appellant had no locus standi and for that reason alone this cluster of grounds fails. We however wish to further state that from the record and the arguments before us, it is clear that the claim denominated in foreign currency was not supported by delivery notes as being the key ingredient for proof of delivery of the goods as per the tax invoice and the value thereof. So we find that, even assuming that the Appellant had the locus standi, the claim would still fail on that account. In conclusion, we wish to address the issue relating to the official Referee's Report. In that regard the learned trial Judge stated in J18 his Judgment at page 49 line 11 volume one of the Record of Appeal as follows; "The problem was compounded by the fact that the Referee's Report does not address one of the questions placed before him of determining which of the invoices have been paid". This issue is particularly canvassed in ground three and the learned trial Judge's statement in that regard is clearly at variance with the official Referee's Final Report which appears from page 1597 to page 1636 volume six of the Record of Appeal. We start by noting that the letter dated 6 th October 2016 which appears at page 1598 of volume six of the Record of Appeal by the official referee addressed to the Marshal to the learned trial Judge states in the last paragraph that the Report was discussed and agreed by both parties. None of the parties disputed that fact through its witnesses. It is therefore, our considered view that the learned trial Judge should have accepted that statement as a fact. Secondly, the learned trial Judge should have accepted that the official Referee's Report does indicate at page 1606 paragraph 21.2 volume six of the Record of Appeal that of the total Kwacha claim of K892,836, 922 (as adjusted by the referee) the sum of K366,769,847 was supported by delivery notes. This was after the Jl9 .. official Referee had matched the invoices with delivery notes pursuant to the first term of reference. We also note that pages 1613 to 1636 volume six of the Record of Appeal present a detailed matching of the invoices with delivery notes starting with the Plaintiffs bundle of documents ending with the Defendant's bundle of documents. It is therefore surprising that the learned trial Judge came to the conclusion that the official Referee had not addressed the term of reference requiring him to determine which of the invoices had been paid in the face of a clear indication in that regard by the Report. We do not know why the learned trial Judge overlooked the Report which we believe was done in accordance with the terms of reference. We also note that the provisions of Order XXIII of the High Court Rules under rule 9 treats the proceeding and written report of the referee as evidence to be received by the trial court unless the court has reason to exclude the same. In this case, the court below received the report and as such it was obliged to treat it as part of the evidence on the record. It is therefore, our firm view that had the learned trial Judge taken into consideration the Official Referee's Final Report, he would have found that in fact, a sum of K366, 769, 847.00 had been found to be the amount supported by delivery notes on the tax invoices produced by the Appellant J.. • -f l t °' The overall result is that we partially allow the appeal relating to the kwacha denominated claim and order that the Respondent pays the Appellant the sum of K366, 769,847, which amount was found to have been supported by delivery notes by the Official Referee. The amount shall attract interest at the average short term deposit rate as determined by Bank of Zambia from the date of the writ until Judgment of this court and thereafter at the current commercial lending rate as determined by the Bank of Zambia until full payment. As for the claim denominated in foreign currency, the appeal 1s dismissed accordingly as it is not supported by delivery notes. Costs in the Court below and in this Court shall be for the Appellant as may be agreed by the p din default to be taxed by the Registrar. J. CHASHI COURT OF APPEAL JUDGE M. J. SIAVWAPA COURT OF APPEAL JUDGE ······ ·~ ·········· ······· ~ ···· P. C. M. NG UL UBE COURT OF APPEAL JUDGE J21