Zambia Radiological and Imaging Co. Ltd and Ors v Development Bank of Zambia (Appeal 28 of 2016) [2016] ZMSC 286 (22 August 2016)

JI IN THE SUPREME COURT OF ZAMBIA HOLDEN AT LUSAKA Appeal No. 28/2016 (Civil Jurisdiction) BETWEEN: ZAMBIA RADIOLOGICAL AND IMAGING CO. LTD. 1st APPELLANT NEIL WILLIAM NKANZA ARTHUR NDHLOVU YIKONA ISAIAH ERNEST YAMBANJI 2nd APPELLANT 3rd APPELLANT 4th APPELLANT ZAMBIA VENTURE CAPITAL FUNDS (2012) LTD. 5th APPELLANT JANET NDHLOVU 6th APPELLANT AND DEVELOPMENT BANK OF ZAMBIA RESPONDENT Coram: Hamaundu, Malila and Kabuka, JJS On 26th May, 2016 and 22nd August, 2016 For the Appellants: Mr. P. Chungu, Ranchold Chungu Advocates For the Respondent: Mrs. N. Mumba, Legal Counsel, Development Bank of Zambia JUDGMENT Malila, JS, delivered the judgment of the court. Cases referred to: 1. Minister of Home Affairs and Attorney-General v. Lee Habasonda (2007) ZR 207. 2. NFN Africa Mining Pic. v. Lofoyi Enterpries Limited, SCZ Appeal No. 27 of2006. 3. Zulu v. Avondale Housing Project (1982) ZR 172. 4. Konkola Copper Mines Pic. v. Chiyeni Kanswata, SCZ Appeal No. 91 of 2002. J2 5. Kanjala Hills Lodge Ltd. and Veronica Namakau Jayetileke v. Stanbic Bank (supra) SCZ/119/2013. 6. Pandoliker & Sons Ltd. and Others v. Africa Banking Corporation Limited (supra), SCZ Judgment No. 17 of 2012. 7. Mususu Kalenga Building Limited and Another v. Richmans Money Lenders Enterprises (1999) ZR 27. 8. Attorney-General v. Nigel Kalonde Mutuna and Others (SCZ/8/185/2015. 9. Newston Siulanda and 36 Others v. Foodcorp Products Limited (SCZ/9/2002). 10. City and Westminster Properties (1934) Limited v. Mudd (1958) 2 All ER 733. Other works referred to: 1. Chitty on Contracts, 28th edition Vol. 1 page 1230, 1158 and 1159. 2. Lewison K (1997) Interpretation of Contracts, 2nd edition (Sweet and Maxwell, London). 3. Cheshire, Fifoot and Furmstones, Law of Contract, 13th edition Butterworth’s (1996) at page 29. The respondent agreed to extend to the first appellant a long term loan in the sum of K18,750,000.00 and equity capital in the sum of K6,250,000.00 bringing the total facility sum to K25,000,000.00. This facility was to be secured by legal mortgages over various properties, some of which belonged to the appellants. Furthermore, the second, third, fourth and fifth appellants were to provide personal guarantees as further security for the facility. In pursuance of the said agreement, the respondent disbursed a total sum of K9,894,188.63 but refused to disburse the rest of the agreed amount, justifying such refusal on the J3 premise that the first appellant had breached some condition of the facility, namely the creation of a mortgage over Stand No. 2404, Kabelenga Road, Lusaka. Following the first appellant’s default in their repayment obligations, the respondent took out proceedings in the High Court, seeking in the main, repayment of the K9,894,188.63 plus interest accrued thereon, and an order of foreclosure on the mortgaged properties. The first respondent opposed the claim on grounds that the long term loan and equity capital were required to finance the purchase by the first respondent of radiological and imaging equipment for purposes of conducting its business and from which the facility with the respondent would be repaid; that the first appellant’s default was attributable to the respondent’s failure to disburse the funds in full as agreed; that the term of the facility was still running and as such the agreement was still capable of being fully performed and, therefore, that the respondents’ action in the High Court was premature. After considering the evidence before him and the arguments of the learned counsel for the parties, the learned J4 High Court judge, in the judgment which is now being assailed in this appeal by the appellants, upheld the respondent’s claim. The learned judge held that in determining whether or not there was breach on the part of the appellants, he was obliged to confine himself to the contractual documents. He found that the first appellant had defaulted in paying the installments as agreed, and had also failed to surrender Stand No. 2404, Kabelenga Road, Lusaka, for purposes of it being mortgaged as provided for in the contractual documents. In other words, that the first appellant was in default of a condition precedent. The learned trial judge dismissed the first appellant’s plea that Stand No. 2404, Kabelenga Road, Lusaka, could not be provided as security because the said property had since been sold to a third party. The judge reasoned that on a proper construction of the contractual documents before him, the first appellant was in inexcusable breach of the conditions of the facility. He entered judgment in the sum of K12,828,170.76 due as at 31st March, 2015 in favour of the respondent against the first appellant, the same to attract interest at the agreed rate of 9.25% per annum being the Bank of Zambia policy rate and subject to fluctuations from time to time, plus a margin of 1.75% J5 from date of the originating summons to date of judgment, thereafter, at the current lending rate as determined by the Bank of Zambia till date of payment. The learned judge further directed that the judgment sum and interest be paid within 90 days from the date of the judgment, failure to which the respondent would be at liberty to repossess and sell the mortgaged properties. The respondent was also granted the liberty to pursue all the guarantors for payment of the monies due to it. The judge also awarded costs to the respondent. Discomposed by this judgment, the appellants launched the present appeal, fronting five grounds of appeal framed as follows: “1. The learned judge in the court below erred and misdirected himself in law when he glossed over or ignored the plaintiff (now respondent) ’s breach of its own obligation under its contract with the appellants (“the said contract”) to its advantage while pronouncing judgment against the defendants (now appellants) on account of the breach by the latter of some of the obligations which had been assumed by them under the said contract; 2. The learned judge erred and misdirected himself when he failed to hold that given that the respondent ((plaintiff below) had proceeded to disburse some of the agreed funds under the said contract to the 1st appellant (1st defendant below) in spite of the non-fulfillment of some of the J6 conditions-precedent on the part of the appellants (defendants below), the court ought to have treated the respondent (plaintiff below) as having waived its right to insist on the fulfillment, on the part of the appellants (defendants below), of the said conditions-precedent before it could disburse the funds in question to the 1st appellant. 3. As the court below is statutory mandated to administer law and the principles of equity concurrently, it ought not to have resolved its power of equitable intervention in favour of one wrong-doing party (i.e. the plaintiff, now respondent) to the detriment of another wrongdoer (the defendants, now appellants). 4. The learned judge in the court below erred and misdirected itself when it took the critical but fundamentally flawed view that: “The relationship between the plaintiff and defendants is governed by the four comers of the agreements they entered into. As such the determination of whether or not the first defendant is in breach is dependent on whether or not first defendant (sic) has complied with the agreements” (at page JI 2 of its judgment), which is completely at odds with the salutary rule of construction which holds that: “In construing any written agreement the court is entitled to look at evidence of the objective factual background known to the parties at or before the dates of the contract including evidence of the ‘genesis’ and objectively the ‘aim’ of the transaction. ” 5. The learned judge in the court below erred and misdirected himself in law when he failed to adjudicate upon or to reveal his mind upon all the issues which were actually presented before him on behalf of the defendants (now appellants). J7 6. Such further or other grounds as counsel shall consider or deem appropriate upon perusal of the record of appeal.” The appellant filed written heads of argument in support of the six grounds of appeal. The learned counsel for the appellant indicated that the appellant was placing reliance on these heads of argument. Under grounds one and three, which were argued together, four sub-arguments were made, namely; first, that the trial judge emphasized the appellants’ breaches and glossed over or ignored the breaches that were committed by the respondent. In this respect, it was suggested that by failing to disburse the full facility amount as agreed, the respondent was in breach. The consequence of that breach was that the first appellant’s business proposition which, to the knowledge of the respondent, had animated the search for the facilities in question, was literally still-born. The learned counsel submitted that the trial judge, who is statutorily mandated to administer law and equity concurrently, chose in the present case, to exercise his power of equitable intervention in favour of one wrong-doing party (i.e. the respondent) to the detriment of another wrong-ding party (the appellant). By so doing, the judge fell into error. J8 The second point counsel for the appellant made under ground one of the appeal was that where parties to a contract are both in breach, as was the case here, the court should be guided by the position as given by the authors of Chitty on Contracts, 28th edition volume 1 at page 1230 as follows: “Where both parties are alleged to have committed a breach of contract, and it is asserted that each breach (taken independently) gives rise to a right to terminate further performance of the contract, regard must be had to the order in which the breaches occurred.” In the present case, it was the respondent which was first in breach. Under these circumstances, a court of equity such as the court below, should not have resolved its power of equitable intervention in favour of a party which had gone to court with soiled hands. The third point made by counsel for the appellants is that the learned trial judge did not reveal his mind upon the first appellant’s primary contention, that the first appellant’s failure to meet its repayment obligations under the facility was directly and inextricably linked to the respondent’s refusal to disburse the banking facility in full. According to the learned counsel for the appellant, in the context of the judgment of the lower court, J9 there is nothing to suggest that the trial judge had seriously analysed or evaluated the evidence which had been deployed before him on the issue of the effect on the appellant’s repayment obligation, of the respondent’s breach, nor is there anything in the said judgment which confirms, or can confirm, that the court below revealed its mind on whether or not the respondent was also in breach as the first appellant had contended. This failure by the court constituted a misdirection. To buttress this submission the cases Minister of Home Affairs and Attorney-General v. Lee Habasonda1, NFN Africa Mining Pic v. Lofoyi Enterprises Limited2, Zulu v. Avondale Housing Project and Konkola Copper Mines Pic v. Chiyeni Kanswata4, were relied upon. The final point made under this ground is that of waiver. Here, it was contended that although the Facility Letter between the respondent and the first appellant had specified some conditions precedent for the disbursement of the K25,000,000.00 facility, these conditions precedent were clearly and distinctly waived by the respondent when it disbursed the K9,894,188.63 partial facility amount. Following the waiver, the respondent became disentitled to insist upon having the conditions precedent fulfilled in accordance with the original J10 terms of the Facility Letter. Counsel referred us to Chitty on Contracts (supra), on the meaning, form and the legal nature of a waiver. Under ground two of the appeal, which also raises the issue of waiver, the appellants’ counsel repeated the arguments made in respect of grounds one and three. In arguing ground four, counsel for the appellant impugned the trial judge’s view that the relationship between the respondent and the appellants was governed by the four corners of the agreements they entered into. It was the learned counsel’s submission that the approach taken by the learned judge in construing contractual documents was, in his words, “too simplistic and completely out of tune” with modern approaches towards this subject. In the present case, counsel argued, quite apart from the Facility Letter, there were many associated activities which had to take place and all parties were alive to the genesis and purpose of the transaction. The first appellant was to receive the full funds which the respondent had agreed to avail so that, in turn, the first appellant could have the necessary capacity to generate resources to repay the loan. The Jll learned counsel quoted a passage from the book entitled the Interpretation of Contracts2, by Lord Kim Lewison as follows: “in the construing any written agreement the court is entitled to look at evidence of the objective factual background known to the parties at or before the date of the contract, including evidence of the “genesis” and objectively the “aim” of the transaction. However, this does not entitle the court to look at evidence of the parties’ subjective intentions.” The learned counsel argued that the trial judge should have been guided by an interpretation consistent with the interpretation by Lord Kim Lewison in the passage we have just quoted. In regard to ground five of the appeal, the learned counsel for the appellant adopted the arguments that he advanced in respect of grounds one, two and three. We are urged to uphold the appeal. The learned counsel for the respondent robustly opposed the appeal and relied on the heads of argument filed in court on 27th April, 2016. In regard to grounds one and three, she supported the judgment of the lower court arguing that the court below did fully address its mind to all the facts and issues laid before it J12 and was right in finding that the failure by the first appellant to fulfill the conditions precedent entitled the respondent to enforce its rights. The learned counsel observed that the first appellant did not deny and does not now deny, that it breached its loan repayment obligations to the respondent. Referring to the Facility Letter in the record of appeal, the learned counsel pointed to the provision requiring the first appellant to make available Stand No. 2404, Kabelenga Road, Lusaka, to the respondent as security for the facility. Counsel also referred to the e-mail from the respondent to the first appellant on page 193 of the record of appeal in which the first appellant was reminded that in order for the respondent to disburse the full facility amount it required to register the mortgage over Stand No. 2404, Kabelenga Road, Lusaka, so as to cover its exposure. Mrs. Mumba agreed with the learned trial judge that in determining whether or not the first appellant had complied with the agreement as set out in the Facility Letter the court was confined to the four corners of the contractual document. She contended further that whenever a borrower is in breach the J13 lender is justified to refuse any further drawdowns by the borrower. In the present case although there were some funds disbursed without the mortgage over Stand 2404, Kabelenga Road, Lusaka, being created, that disbursement was done with the understanding that the first appellant would ensure that the mortgage was created and, in any case, the resultant exposure after the initial disbursement was adequately covered by the existing security. She submitted that any further disbursement without the said mortgage being created would have resulted in the respondent being exposed beyond the security cover and that would have been imprudence on the respondent’s part. The learned counsel further argued that even if the court were to find that the respondent had in fact breached the terms of the Facility Letter by declining to make further disbursements, such finding would not defeat the respondent’s rights as mortgagee. She cited Order 88/5/14 of the Rules of the Supreme Court (1999) Edition as authority for that submission. That order provides as follows: J14 “Because the mortgagee is entitled to possession of mortgage premises a counter claim by the borrower for damages or a liquidated sum is not defence to the claim for possession.” The learned counsel also cited our decision in the case of Pandoliker and Sons Limited and Others v. African Banking Corporation Limited5 and also in the case of Kanjala Hills Lodge Ltd. and Veronica Namakau Jayetileke v. Stanbic Bank (Z) Ltd6, to support her submission that there can be no counter claim on a mortgage action and further that the late release of funds is not a valid excuse for default or failure to make timely payments. Counsel was quick to point out that although, in the present case, there was no counter claim, the principles enunciated in the authorities she had cited applied with equal force and effect to the extent that the appellants argued that the lower court glossed over the respondent’s breach. As regards the contention by the appellant that the respondent had waived the requirements of the mortgage over Stand 2404, Kabelenga Road, Lusaka, when it disbursed part of the loan before the mortgage was created, it was the contention of the learned counsel for the respondent that this issue was never raised in the court below. She cited the cases of Mususu J15 Kalenga Building Limited and Another v. Richmans Money Lenders Enterprises7, Attorney-General v. Nigel Kalonde Mutuna and Others8 and that of Newston Siulanda and 36 Others v. Foodcorp Products Limited9 to bolster her submission. Counsel urged us to dismiss the appellants’ argument in this regard on the basis of these authorities. Alternatively, the learned counsel was of the view that even if the court were to hold that the issue of waiver was properly before it, the truth is that no such waiver ever occurred. We were referred to the facility letter in the record of appeal, more specifically under the general terms and conditions, where it provided that no indulgence shown or extension of time given by the Bank was to be raised or could operate as an estoppel against the Bank or waiver of any of the Bank’s rights, unless recorded in writing and signed by the Bank. We were also referred to provision under ‘remedies and waivers’ in the Facility Letter to the effect that the Bank’s rights under that Facility Letter were not capable of being waived or varied otherwise than by express waiver or variation in writing. J16 In the present case, therefore, the respondent could not be said to have by conduct, waived its rights as set out in the Facility Letter. The learned counsel for the respondent did not leave matters there. She argued in the alternative that assuming there was valid waiver such waiver was revoked. If the respondent’s initial indulgence in disbursing funds prior to the creation of the security amounted to a waiver, the contents of the document at page 193 of the record of appeal show that the respondent revoked any such purported waiver. The persuasive case of City and Westminster Properties (1934) Limited v. Mudd was cited as instructive in this regard. In that case the plaintiff brought a claim against the defendant for forfeiture of a lease on the ground of breach of covenant against the use of the subject premises for dwelling purposes. The plaintiff had been aware of such contrary use. The defendant in response pleaded waiver and release of covenants. In deciding the plea for waiver the court stated as follows: “It may well be that if they accepted rent with knowledge they waived breaches of covenant from time to time, but I can see no reason why they should be prevented from demanding proper compliance as from the date they required it.” J17 It was Mrs. Mumba’s contention that the communication from the respondent to the first appellant by which the requirement for the mortgage was advised as a condition precedent to any further disbursement would, in light of the above cited authorities, have revoked any purported waiver, thereby justifying the respondent’s action. The learned counsel for the respondent also submitted that for waiver to be effective, it must be supported by consideration. In this case, no consideration for the purported waiver was forthcoming from the appellant. She also cited many other authorities in support of the submission that mere acts of indulgence will not amount to waiver nor can a party benefit from waiver unless he has altered his position in reliance on the waiver. In regard to ground two of the appeal, the learned counsel for the respondent made a very brief submission, namely that the learned judge was on firm ground when he proceeded to pronounce judgment against the appellants notwithstanding that the respondent had disbursed part of the funds prior to fulfillment by the first appellant of the condition precedent. She J18 relied on the arguments she had made in regard to failure by the appellants to raise that issue in the lower court, made in regard to grounds one and three of the appeal. With respect to ground four, the learned counsel for the respondent contended that the trial court was on firm grounds when it took the relationship between the appellant and the respondents to be one to be governed by the four corners of the Facility Letter and other loan documents. Those documents, according to the learned counsel, constituted the agreement between the parties and were freely and voluntarily entered into and accepted by the appellants who could not now be allowed to resile from them. The learned counsel referred us to various authorities regarding interpretation of the contractual document. She ended by suggesting that interpreting the Facility Letter in the manner suggested by the appellants’ learned counsel would be to the disadvantage of the respondent and would go against good commercial sense. The appellant knew the grace period for the facility and should have attended to the fulfillment of the conditions precedent having regard to that grace period. J19 In responding to ground five of the appeal, again the learned counsel for the respondent was fairly brief. She submitted that the record of appeal evidently shows that the trial judge fully adjudicated upon all the relevant issues brought before him and, therefore, the arguments by the appellants in this regard were misplaced. She fervidly prayed all the grounds of appeal be dismissed for lacking merit and that an order of cost be made against the appellant. We have carefully considered the arguments so ably debated by the learned counsel for the parties in respect of each of the grounds of appeal. As regards ground one, the real question requiring determination, in our view, is whether both parties in this matter were in breach of their obligations under the facility letter, and if so whose breach was first in time. The point made by the learned counsel for the appellant is that the respondent breached its obligation to make further disbursement under the Facility Letter. This breach occurred after the initial disbursement was made. The first appellant was then induced J20 into a position where it failed to discharge its installment payment obligation in respect of the facility. Our understanding of the relationship between the parties was that the Facility Letter, which was produced in the record of appeal, stated precisely the amount required by the first appellant and the purpose for which it was required. It also defined, under clause 7.1, the security requirement for the facility. As it turned out from the provisions of the Facility Letter, the conditions precedent for the disbursement of the monies, included the creation of the legal mortgage over Stand No. 2404, Kabelenga Road, Lusaka. The appellants have argued, through their learned counsel, that the purpose of the facility was well known to the respondent. Failure to disburse that facility in full inevitably led to a situation of breach where the first appellant was unable to make arrangements to have Stand No. 2404, Kabelenga Road, availed as security. In our comprehension, the paradox brought forth by this situation is readily apparent and the dilemma posed to the first J21 appellant is straight forward. How could the first appellant deliver as security, Stand No. 2404, Kabelenga Road, Lusaka, before it had money disbursed to it by the respondent to facilitate the procurement of the subject property? The situation could easily liken itself to the proverbial chicken and egg tale, and the rhetorical question which one comes first. In this case should the disbursement of the full loan facility have come first or should the provision of the security have preceded the disbursement? In our considered view, the learned trial judge properly addressed the matter when he held that clause 8 sets out the conditions for making the facility available. All the three key conditions in clause 8(1), (2), (3) are that all financing documents, including the Facility Letter were to be signed; all the documents were to be submitted; and all securities to be perfected. It is beyond argument that the first appellant failed to surrender Stand No. 2404, Kabelenga Road, Lusaka, for purposes of creation of the mortgage. It seems to us to have been a matter purely for negotiation of the terms of the facility prior to their reduction into the Facility Letter. J22 The first appellant offered a splendid explanation as to its failure to furnish the security prescribed in the Facility Letter namely, a perfected mortgage in respect of Stand No. 2404, Kabelenga Road, Lusaka. That explanation however does not legally excuse the first appellant. There was, in our view, a clear breach on the part of the first appellant, and that breach, in itself and of itself alone, was actionable on the part of the respondent who could have opted to sue the appellants for damages for breach of the condition or to repudiate the contract for breach. Given that the initial amount had been disbursed, the respondent opted first to commence proceedings against the appellants for breach of contract and, as a direct reaction of the failure by the respondent to furnish the security required, declined to disburse further funds to the first appellant. We have no misgivings whatsoever that it was the first appellant that was in breach and not the respondent. The arguments raised by the learned counsel for the appellant which are premised on the assumption that both parties were in J23 breach, cannot in our view, be sustained. It follows that ground one of the appeal is bound to fail, and we dismiss it accordingly. The appellant’s learned counsel also contended that the learned trial judge fell into error when he did not reveal his mind upon the first appellant’s primary contention that its failure to meet its obligation under the facility was directly and inextricably linked to the respondent’s failure to disburse the banking facility in full. We accept the arguments in this respect by the learned counsel for the respondent. We hold that as we did in Kanjala Hills Lodge Ltd. and Veronica Namakau Jayetileke v. Stanbic Bank5 (supra) and repeated in Pandoliker & Sons Ltd. and Others v. Africa Banking Corporation Limited6 (supra) that failure or refusal by the Lender to disburse the full loan does not absolve the borrower from his obligations. We do not think that having found that the first respondent was in breach, which breach entitled the respondent to decline to make further disbursements, the learned trial judge was obliged to give further consideration as to what induced that failure, or indeed to engage in an extensive foray of unravelling the reasons for the first appellant’s default. It is sufficient that J24 the court found that the breach of the conditions precedent had occurred which, under the law, entitle the respondent to resile from the contract. In our view it is not a question of the judge revealing his mind on all matters regardless of their relevance to the issue requiring determination. Ground five accordingly fails. The learned counsel for the appellant also raised the issue of waiver namely, that disbursement by the respondent of part only of the facility amount constituted waiver of its right to insist on the mortgage relating to Stand No. 2404, Kabelenga Road, Lusaka, being created. We have examined the Facility Letter and are satisfied that it provides, in forthright language, as the learned counsel for the respondent has demonstrated, that no indulgence shown or extension given by the Bank may be raised or could operate as a estoppel against the bank, or waiver of any of the bank’s rights unless it was recorded in writing and signed by the Bank. We have also seen the provision of the Facility Letter in regard to remedies and waivers. It provides that the Bank’s J25 rights under Facility Letter were not capable of being waived or varied otherwise than by express waiver given in writing. The learned counsel for the appellant did not point to the existence on any such waiver in writing signed by the Bank. In any case, as the learned counsel for the respondent correctly argued, any waiver ought to be supported by consideration - fresh consideration. No such consideration furnished by the first appellant is discernable from the facts of this case. We believe, therefore, that ground two of the appeal is bereft of merit and is bound to fail. We dismiss it accordingly. In ground three, the learned counsel for the appellant complained that as a court mandated to administer law and equity concurrently, the lower court fell into error when it exercised equitable intervention in favour of one wrong doing party, i.e. the respondent to the detriment of another wrong doing party, i.e. the appellants. We have already stated that, in our view, the wrong doing party was the first appellant and the trial court administered the J26 contractual common law principles in resolving the dispute. The respondent was not a wrong doing party as suggested in the submissions of the learned counsel for the appellant. Ground three is without merit and it is dismissed. Under ground four it is the contention of the appellants that the learned trial judge should not have confined himself to the four corners of the agreement concluded between the parties to the present dispute but should have considered other circumstances surrounding the agreement. The learned counsel referred us to a passage from Lord Kim Lewison’s interpretation of contracts. It is a cardinal principle of contract law that when the parties decide to reduce their agreement into writing such agreement is governed primarily by the written instrument or document. The intention of the parties will have to be discovered from the written document. Cheshire, Fitoot and Furmstones, the learned authors of Law of Contract, 13th edition Butterworth’s (1996) at page 29 state as follows: J27 “Behind all forms of contract, no doubt, has the basic idea of assent. A contracting party, unlike a tort feasor, is bound because he has agreed to be bound. Agreement, however, is nor a mental state but an act, and as an act, is a matter of inference from conduct. The parties are to be judged not by what is in their minds, but by what they have said or written or done.” In the present case, given that the parties chose to reduce their agreement into contractual documents including the Facility Letter which clearly evinces their intention, there is absolutely no reason to resort to the manner of interpretation that will take the court outside the contours of the agreement of the parties. The learned judge in the court below was, therefore, correct in holding, as he did, that the relationship between the appellant and the respondent was governed by the four corners of the agreement they entered into. Ground four has not slightest merit and it is dismissed. We pointed out earlier on that in ground five the learned counsel for the appellant effectively adopted and repeated the same arguments that were made in respect of grounds one, two and three. Given what we have said in regard to those grounds it follows that ground five inevitably has to suffer the same fate. It collapses and is hereby dismissed. J28 The net result is that this appeal is without merit and is hereby dismissed with costs to the respondent to be taxed in default of agreement. E. M. HAMAUNDU SUPREME COURT JUDGE M. MALILA, SC J. K. KABUKA SUPREME COURT JUDGE SUPREME COURT JUDGE