Southern Cross Truck & Crane Hire Limited T/A Coastal Hire v Mubende Mining Services Limited (2019/HN/003) [2020] ZMHC 462 (18 September 2020)

-J-1 IN THE HIGH COURT FOR ZAMBIA AT THE NDOLA DISTRICT REGISTR HOLDEN AT NDOLA (CIVIL JURISDICTION) BETWEEN: AND MUBENDE MINING SERVICES LIMITED DEFENDANT BEFORE HONOURABLE LADY JUSTICE M. CHANDA THIS 18TH DAY OF SEPTEMBER, 2020 APPEARANCES: For the Plaintiff Mrs /\. D Gray Kunda, of A. D Gray and Partners For th e Dcfcnd,.rnl Ms 13 Mapan i ap pearing with Ms K Nalondwa c.1nd Mr ,J Ha ra of Muya a nd Company . ·;·-~ \ :-. ~ -) . . . '' l ', : . ' • . l , ' Authorities Referred to: London, Sweet and M axwell 2. T Comedy (UK) Limited v Easy Managed Transport Limited (2 007) EWHC 6 11 3 . Cowey v Liberian Operations Limited (196 6) 2 Lloy d's Rep 45 -J-2 The plain tiff Southern Cross Truck and Crane Hire Limited T / A Coastal Hire commenced this action by way of writ of summons supported by a statement of claim on 11 th January, 2019 against Mubende ·Mining Services Limited, the defendant herein. On 16 th August, 2019 , the plaintiff filed an amended writ of summons and statement of claim seeking the following reliefs: 1. 11. D a m ages for breach of con tract. Payment of the sum of K143,963.39 being the a mount due and owing to the Pla intiff by the Defe nda nt a s a t 16th January, 2 019 in respect of the hire c harges and or fees a ris ing from the hire of the plaintiff's concrete m ixers al the De fe n d a nt 's own instance and reque st which sums of money the defendant h us foil ed re fused and/or n eglected to pay the Pl a intiff. 111. A Mandatory Inju nc tion com pe lling the d e fendant w h e the r by itself, se r vants und / <Jr age nts o r otherwise ceas es lo using the Plaintiff's eq uipm ent be in g t h e con crc:le mixers and re turn the said Plaintiff's e quipm e nt lo the Pla intiff. 1v. Inte rest on th e sums du e:. v . Any o th e r or furth e r re lief the Court might d eem fit. v1. Legal cos ts h e reof and inc id e n la l h e reto. The plaintiff's amended statement of claim set out that the plaintiff was in the business of hiring out various equipment to the public. That by agreement made on or about the 26 th October, 2017, the plaintiff hired out two (2 ) concrete mixers to the defendant at the defendant's own request and instance for an unspecified period at a specia l rate of K 677.00 for both per day . That pursuant to the -J-3 aforementioned agreement the defendant had possession and use of the said concrete mixers for a period of about fourteen (14) months. Contrary to the agreement, the defendant failed, refused and or neglected to pay daily fees or charges as agreed. That out of a total sum of K250, 448. 7 from the date of hire of the equipment to 18th December 2018, the defendant only paid a total sum of Kl 26, 474.25 only leaving a sum of K143, 963.39 outstanding and due to the plaintiff as at 16th January, 2019. The plaintiff stated that as a result of the defendant's willful failure or neglect to pay the said rnonies, it had suffered loss and damage. In its defence filed on 26 th April, 2 019 the defendant essentially a dmitted th at on 26 th October, 20 17 the plaintiff hired out two con crete rr1ixe rs to the defend ant for a n unspecified period at a rate of K677.00 for both mixers per d ay. The defendant further admitted ta king possession of the concrete mixers in question but asserted tha t th e equipment was according1y returned to the plaintiff. The defendant asserted that the plaintiffs entire claim of K250, 448.7 was duly settled prior to the commencement of this action. The defendant further stated that it bought the equipment it hired from the plaintiff being two ladders, one genset, one water pump, two concrete mixers, two extention cables and one drilling machine with drill bits. The defendant insisted that the plaintiff was not entitled to any of the reliefs sought. -• -J -4 'fhc matter was heard on 21 s t November, 2019 and both parties were before Court. To buttress their respective positions, each party called one witness. Mwansa Pikiti Lombe the accounts assistant testified as the first plaintiffs witness (PWl). It was his testimony that in October, 2017, the plaintiff entered into a verbal contract with the defendant to hire concrete mixers at the rate of K677.00 per day. According to PWl, the defendant hired one concrete mixer and was given an extra one in case of a break down . The witness further testified that the parties agreed that the d efendant would make monthly upfront payments. The \vitne ss said that, in the genesis, the defendant fulfill ed its contrac tua l obligations with regard to upfront payments ,Nithout any re minders but la ter, invoices had to be sent to remind the defend a nt of its inde btedness to the plaintiff. The witness went on to say that, the d efendant n1ade an upfront payment of K 8624 on 26 th October, 2017 as exhibited at page 5 of the plaintiffs bundle of documents . The witness asserted that page 6 of the plaintiff's bundle of documents showed that the defendant had a balance of Kl 10 ' 822.08 and page 8 showed the opening balance of K26, 123.22. The witness further asserted that on 31 st July, 2018, the defendant n1ade a payment of K 50,000.00 through their lawyers which was reflected in the credit column as shown on page 1 O of the plaintiff's bundle of documents bringing the closing balance to K78,438.44. -J-5 PW 1 explained that as at 24th February, 2018 the closing balance was K26, 123.22 as exhibited at page 15 of the plaintiff's bundle of documents. It was his testimony that from that date, the defendant made no payments prompting the plaintiff to issue new invoices bringing the closing balance as at 12th July, 2018 to K 110,822.08. As at 6 th September, 2018 the closing balance was K 91 ,991.26. PWl explained that the K 50,000.00 paid by the defendant was used to cover invoices that were not paid for previously. It was his evidence that on 27th September, 2018, the defendant made a payment of $3000 .00 equivalent to K36, 000.00. The amount was a lso a llocated to unpaid invoices bringing the total balance to K86,000.00 as at 22 nd October , 2018. The witness further explained that the statement at page 17 of the plaintiff's bundle of documents captured the period from 1 ~a March, 2 018 to 13th November, 2018 and the closing balance ~as K96, 646 .72. PWl stated that page 20 of the plaintiffs bund le of documents showed a closing balance of K26, 123.22. The witness a lso s tated that on 14th December, 2018 the last invoice was issued bringing the closing balance to Kl 16,974.45. According to the witness , page 22 indicated an upfront payment of K8 ,624 made on 26th October, 2018 . The witness narrated that according to page 23, the last invoice was issued on 14th December, 2018 with a closing balance of K.1 23,974.45. PWl narrated that according to page 24 and 25 the last. invoice was issued on 7 th February, 20 19 and the closing balance was Kl37,526.27. The witness asserted that page 26 -J-6 showed that another invoice was issued on 16 th January, 2019 bringing the final and closing balance to K143,96.3.39. The I . I defendant returned the equipment on 16th January, 2019 after the plaintiff commenced Court action against it. The witness clarified that the only payments the plaintiff received from the defendant were K 50,000.00 and K 36,000.00. No further payments were made. ■ ■ During cross-examination, the witness asserted that there were only two payments made by the defendant to the plaintiff in the sum of KS0 ,000.00 and $3000.00 on 15th August,2018 and 27th C September, 20 18 respectively. The witness clarified that at page 20, the a mount of KS0 ,000.00 \Vas not appearing but that did not imply that the dcf e nd a nt was overcharged. The witness affirmed that wha tever was received should have been included in the statement. When re fe rred to page 15 of the plaintiffs bundle of documents, the witness explained that there was no acknowledgment of the amount of KS0,000.00 in the statement for the month of August 2018. Similarly, the amount of KS0,000.00 was not reflected in the statement for the month of August, 2018 at page 8 of the plaintiff's bundle of documents. At page 26, the amount of KS0,000.00 was not appearing implying there was an outstanding payment of KS0,000.00 by the defendant. When ask ed about the mixers in issue, the witness stated that he did not deal with the officers for the mixers but he confirmed that -J-6 showed that another invoice was issued on 16 th January, 2019 bringing the final and closing balance to K143,963.39. The I : I defendant returned the equipment on 16th January, 2019 after the plaintiff commenced Court action against it. The witness clarified that the only payments the plaintiff received from the defendant were K 50,000.00 and K 36,000.00. No further payments were made. During cross-examination, the witness asserted that there were only two payments made by the defendant to the plaintiff in the sum of KS0 ,000.00 and $3000.00 on 15th August,2018 and 27th C September , 2 018 r espectively. The witness clarified that at page 20, the a mount of K50 ,000.00 was not appearing but that did not imply I tha t the d e fe nda nt was overcharged. The witness affirmed that whatever was received s h ould have been included in the statement. When referred to p age 15 of the plaintiff's bundle of documents, the witness expla ined t h a t the re wa s no acknowledgment of the amount of KS0,000.00 in the sta tement for the month of August 2018. Similarly, the amount of K50,000.00 was not reflected in the statement for the month of August, 2018 at page 8 of the plaintiff's bundle of documents. At page 26, the amount of KS0,000.00 was not appearing implying there was an outstanding payment of KS0,000.00 by the defendant. When asked about the mixers in issue, the witness stated that he did not de al with the officers for the mixers but he confirmed that -J-8 \iVitness asserted that it was both a verbal and written agreement that the parties made. When referred to the closing balance as at 14th December, 2018, the witness asserted that it was K123, 974.45 as shown on page 23 of the plaintiff's bundle of documents. With regard to page 20 of the plaintiff's bundle of document, the witness stated that the closing balance was Kl 16, 974.45 as at 14th December, 2018 and there was a difference of K7000.00. The witness went on to state that the difference did not entail that the defendant was overcharged. He clarified that h e ,vas directly involved in receiving the payments. I I . I In re-examination, the witness stated that page 5 of the plaintiff's bundle of documents showed that there were two payments made. The first being a ch eque payment o f K 7000.00 which bounced on 2 1 st Februa ry, 2 018 and on 24 th February, 2018 the defendant took cash payment of K7000.00 to the plaintiff. The witness clarified that the statement at p age 2 0 of the plaintiff's bundle of document was generated on 14th February, 2018 which included the bounced cheque while the statement at page 22 of the same document was generated on 18th February, 2018 without the K7000.00 bounced cheque. The K7000.00 was reversed. The above marked the close of the plaintiff's case. -J-9 Zachariah Muya, the Director of the defendant company, testified as the sole witness (DWl). DWl testified that he knew that a concrete mixer had been hired to be taken to Luwingu but he didn't know at what rate per day. He explained that the parties agreed that the mixer was only to be paid for the days it was in use. According to the witness the equipment was not in use for close to a year, a fact which was brought to the attention of the plaintiff. It was also his evidence that a Mr Wade and a Manager by the name of Jericho allowed the d efendant to keep the concrete mixer. He testified that while h e admitted that there were days when the machine worked and \Vere to be paid for, the defendant's position was that the days the mixer was not in use were to be hived off of the claims. It \,vas his further testimony that the machines in issue were bought from the plaintiff in 20 18 and not 2019 as alleged. According to the witness, Mr Wade and Jericho got the payment directly from him . Th e money was in respect of a water pump, parker mac hine cJnd concrete mixer. The witness explained that, while the agreement to buy off the equipment was made much earlier, he paid the money on behalf of the company in the first week of December, 2018. He further explained that all the contracts to buy and set off the d ebt were done verbally and the money he paid was acknowledged. With regard to the payments in issue, DW 1 asserted that on l5lh August, 2018, Mrs Kunda counsel for the plaintiff reminded him at Court that the defendant had outstanding amounts to b e paid to -J-10 the plaintiff. He stated that a sum of K50,000 was accordingly paid to the plaintiff's lawyer outside All~ance Bank. DWl asserted that due to misunderstandings which later arose, the plaintiff's counsel acknowledged receipt of the payment of K50,000.00 as exhibited at page 28 of the plaintiff's bundle of documents. DWl explained that prior to that, another sum of K50,000.00 had been paid to the plaintiff which was collected by Mr Jericho and Mr Wade on behalf ·of the plaintiff. The witness indicated that the said payment was made two days after the plaintiffs lawyer issued a letter of demand. He said Mr Wade advised that the payment would be acknowledged by the plaintiffs lawyer v.rhich was done. The witness went on to say that the days on which the machines were hired were a lways d e scribed in an invoice and not a statement. The statements produced before Court were documents generated by an officer of the pla intiff who never met or dealt v.rith the defendant's employers . The invoices should have been the basis of the cla im a nd would have been h elpful to lay to rest the dispute in issue. The witness emphasized that the documents b efore Court did not reflect what was obtaining at site. DW 1 narrated that all in all they were payments of K50,000.00, $ 3 000.00, K50,000.00 and $5000. 00 made by the defendant to the plaintiff. The witness asserted that he could not recall the date the $5000.00 was paid but he was sure it was collected from his office by the plaintiff. -J-11 With r egard to payment for the equipment listed 1n their defence , the witness stated that the defendant settled all the outstanding amounts plus the purchase price of the equipment. However, h e had a challenge to prove payment of$ 5000 .00 before Court. During cross-examination, the \i\ritness stated that he had no proof of the set off but he dealt with Jericho. The witness further stated that the agreement with regard to set off was verbal between the plaintiff and defendant. When referred to paragraph 5 of the statement of c la im, the witness asserted that it was not in dispute. When asked a bout p ayments for the use of the mixer, the witness testified that it v.ras to be pa id for on the days it was in use and the agreement was a lso ve rbal. Th e witness averred that he could not recall the period they agreed the mixers would n ot be paid for. But h e recalled it was the period the c ontract was suspended by the World Bank and during the ra iny season. He narrated that he did not query th e invoices they rece ived for the p eriod of time and that they were not s upposed to be c h a rged for that period. He didn't know whether the invoices were sent to him or not. When further referred to page 9 of the plaintiff's bundle of documents, the witness stated that it was an ackno\i\rledgm ent of paym ent of the sum of KS0,000.00 and the bala n ce as at 10th August, 201 8 was K78,439.44 . He clarified that the document on page 8 was sent under cover of the letter produced on page g a lluded to earlier. When queried about the payments, the \i\ritness -J-12 revealed that he made a payment of KS0,000.00 soon after r eceiving the letter of demand dated 12th August, 2018. The witness asserted that acknowledgment of payment made to Mr Wade came from the plaintiff's lawyer on 15th August, 2018. The witness also asserted that the payment of US$5000.00 to the plaintiffs lawyer Mrs Kunda was made in the presence of Mrs Chifuwe. When asked about the credit reflected at page 20 of the plaintiff's bundle of documents, it was his response that they repres ented the KS0,000.00 paid. When asked to clarify the alleged payment of $5000.00, the witness stated that he had no record for the same. When questioned what steps he took with regard to the discrepancies in the payments, the witness testified that he queried over the same including the person h e gave the money. To buttress his argument, the witness stated that the letter a t page 28 of the pla intiff's bundle of documents was written after he queried on the payment made. When directed to go through the le tter at page 28 of the plaintiff's bundle of documents h e conceded th at it only referred to the two payments he made. OW 1 a lso conceded that there was no other documentary evidence to show that h e paid the other monies he talked about. When reminded of paragraph 6 of the plaintiff's bundle of documents, the witness sta ted that they d enied all the plaintiff's claims because they settled all that was owed to lhe plaintiff b efore commencement of this Court action. -J-13 At the close of the c ase , only counsel for the d efendant filed in written submissions for which I am indebted. I shall not reproduce the same but shall only refer to them as may be necessary. From the evidence adduced on record it is common ca use that on 2 6 th October, 2017 the plaintiff hired out two concrete mixers to the d efendant for an unspecified p eriod at the rate of K677 .00 per day. It is common ground that the parties terms and conditions for the hire were governed by the coa s tal hire application for and condition s of accou n t/ hire facilities exhibited on pages 1 and 2 of the p laintiffs bu ndle of documents . It is my finding that for a period of 30 days the defenda nt used to accrue a sum of K20 ,3 10 in hi re ch a rges. It is a lso common ca u se:: that the d efe ndant was in possession of the two concre te mixers fro m the da te of hire up to 16 th January, 2019 when they wer e returned to the pla intiff. U pan considering the eviden ce in this case and the defendant's s ubn1issions I find tha t two is sue s have fallen for d e termination n a m ely: - whe ther there was a valid variation of contract allowing the def endant to pay hire charges only when the equipme nt was in use and whether th e hire charges for th e concrete mixe rs w ere fully liquidated by the defe ndant. -J-14 The position of the law with regard to any contractual relationship is that parties are free to negotiate such terms and conditions as they wish and once having done so, these will bind them until there is a mutually agreed variation. The learned Authors of Chitty on Contract Volume 1 General Principles1 rightly observes , on page 820 paragraph 1489 on variation that: The parties to. a contract may effect a variation of the contract by modifying or altering its terms by mutual agreement. A mere unilateral notification by one party to the other, in the absence of any agreement, cannot constitute a variation of contract. Further , in the case of T Comedy (UK) Limited v Easy Managed Transport Limited2 wherein the case of Cowey v Liberian Operations Limited3 was reaffirmed it was stated that: "For a variation to be effected there needs to be a mutual agreement between the parties." The plaintiff's witness in his evidence has categorically stated that the hire agr eement executed by the parties was to the effect that the d efendant was to pay K677 per d ay for the entire period of the hire. The defendant's witness, on the other hand has contended that the parties had further agreed that the hire charges were only to b e paid for the days the mixe r was in use . In addition, the evidence of i I, I I ! . i I 1, j• I -J -15 the defendant established that there were some variations in the course of the agreement when the plaintiff's representatives namely Mr Wade and Jericho permitted the defendant to retain the equipment during the period they were not in use. I must expressly state from the outset that I found the defendant's evidence unreliable and not helpful to the Court. This is firstly so because the averments 1n the defence were replete with contradictions. While in paragraph 5 of the d efence, the defendant asserted that the hired con crete mixers were returned to the plaintiff, in paragraph 7 they prevaricated that the two concrete mixers were bought off from the plaintiff. Secondly, it is unbelievable that the defendant's witness who executed the contract in issue on behalf of his company did not know the agreed daily rate for the hire of the equipment. In view of the highlighted inconsistencies in resolving the issues in dispute I have therefore paid pa rtic ular attention to the contemporary documents filed on r ecord. I have already found as a fact that the document produced at page 2 of the plaintiff's bundle set out the parties terms and conditions of the hire of the equipment. In d etern1ining the genuiness of d efendant's asseveration of being allowed to retain the concrete n1ixers for a lmost a year and not to pay the hire charges when the equipment was allegedly not in use, I have looked at Clause 6 of the -J-16 coastal hire standards terms and conditions of hire. For ease of reference the said Clause 6 is reproduced hereunder. "No amount may be deducted from any invoices without Coastal Hire's authorization should any deduction be agreed to by Coastal Hire, a credit I note issued for such amount and will be proof that Coastal I-lire has agreed to same. In particular, the customer may not deduct any amount due by reason or fact that it contends .it has a counter claim of any nature whatsoever against Coastal Hire. It is apparent from the above stated clause that any authorised exemption relating to the payment of hire charges ought to be evinced by a credit note . In my judgment without the credit note it cannot be infe rred tha t the d efendant was indeed granted relief from se ttling the hire ch a rges for close to a year as purported . Furthermore, th e e1na il co mmunication dated 27th June, 2018 between Wa d e Seymo ur a nd Mr Muya produced at page 3 and 4 of the plajntiff's bundle of doc uments shows that the defendant's accrued hire charges stood at K 104,046.16. The email also reveals that the visit by DW 1 to Wade Seymour's office was m erely to request for a discount if he rnanaged to make full payment by 28th June, 20 18. The email signifies that no issues arose whatsoever regarding the deduction or release from payn1ent of hire fees for non-use of the equipment. On this score it is my holding that there was no valid mutual agreement between the parties a llowing the defendant not to pay hire charges for a period of close to a year when the concrete mixers were not in use. -J-17 I now turn to resolve the question as to whether the hire fees were paid in full by the defendant. It is clear from the letter of demand exhibited on page 7 of the plaintiff's bundle of documents that as at 12th July, 2018 the defendant had continued to retain the hired equipment and was indebted to the plaintiff in the sum of Kl 10, 8822.08. Page 9 of the plaintiffs bundle of documents establishes that on 15th August, 2 018 the defendant made a payment of K50, 000 towards the sums due through th e plaintiffs advocates and an official receipt was issued to that effect. As at 27 th September, 2 018 , page 12 of the plaintiff's bundle of documents sets out that a further sum of US$3000 of kwacha equivalent of K36 , 000 was paid by the defe nda nt. It is a lso apparent from the documents produced on record tha t the d e fendant was consistently appraised of its indebtedness to the pla intiff from 12 th July, 2018 up to the time of commencement of this action. Hence, I find the defendant's submission regarding the invoices being the only basis of determining the p la intiff's dues, to b e a d eliberat e ploy to mislead the Court. It is my observation that from the tin1e the demand notice was issued a ll the monies paid by the d efendant were duly receipted and accounted for by the plaintiff's lawyer. I am a lso satisfied that the state1nent of account produced before Court re11ected a ll the payments 1nade by the d efend a nt. I therefore find the claim by the d efenda nt's w itness regarding the a ddition -J-18 payments of KSO, 000 and US$5000 towards the liquidation of the amount owing to b e a mischievous a llegation for which there is not a shred of evidence. Thus, I am of the firm view that the plaintiff has proved its case on a balance of probability. For this reason, it is hereby adjudged that the hire fees in the sum of Kl43, 963.39 owed to the plaintiff as at 16th January, 20 19 be paid by the defendant, with interest thereon at the current bank lending rate from the date of the writ to the date of final settlement. Costs are awarded to the plaintiff to be taxed in default of agreement. Dated at Ndola this 18 111 day of September, 2020 11J---7lfd ............ I. ~-t ...... ~? ::: ... . M. CHANDA JUDGE