Zambia Railways Ltd v Dani Freight Services Ltd (Appeal 197 of 2003) [2005] ZMSC 52 (18 October 2005)

IN THE SUPREME COURT FOR ZAMBIA - APEAL NO. 197/203 HOLDEN AT KABWE (CIVIL JURISDICTION) BETWEEN: ZAMBIA RAILWAYS LIMITED - APPELLANT AND DANI FREIGHT SERVICES LTD RESPONDENT Coram: Sakala, CJ, Mambilima and Silomba, JJS, On the 7th of April 2004, and 18th October, 2005 For the Appellant For the Respondent - - Mr. C. Muneku of Charles and Charles Associates. Mr. K. Mukata of Nemesisi Chambers. JUDGMENT Mambilima JS, delivered the Judgment of the Court. Authorities referred to: (1) Stewards Company (Z) Ltd and Apollo Enterprises Ltd vs the Attorney-General SCZ Ruling No. 1 of2000. (2) Wilson Masauso Zulu vs Avondale Housing Project Ltd (1982) ZR 172. This is an appeal against an assessment of damages by the Deputy Registrar of the High Court, sitting at Lusaka. The background of this matter is that the Respondent took out a Writ of Summons against the Appellant and a Company called Grand Logistic Limited claiming the following reliefs: (1) Specific performance of an Oral Agreement between the Plaintiff and the 1st and 2nd Defendants made on or about the 27th day of October 2000 wherein the Plaintiff pledged its bond with the Zambia Revenue Authority as security for removal from bond by the 1st Defendant of an un cleared Locomotive Engine Number U20 C 01-263 and wherein the 1st and 2nd Defendants were required to acquit the Plaintiff’s bond within thirty (30) days of removal from bond of the said Locomotive by paying the required taxes to the Zambia Revenue Authority AND wherein the 1st and 2nd Defendants were required to pay the Plaintiff the sum of K39,270,514.25 being commission calculated at 2.5% of KI,570,820,570.00 being the value of the Locomotive declared by the 1st Defendants for the thirty (30) days period aforesaid; (2) The sum of K274,893,599.75 being further commission for each of the additional seven (7) months the 1st and 2nd Defendants wrongfully utilised the Plaintiff’s bond and further additional commission for each of the months the 1st and 2nd Defendants will continue to utilise the bond aforesaid; (3) Damages for loss of business; (4) Further or other reliefs the Court may deem suitable to grant; (5) Interest and costs.” On 11th October 2001, the High Court entered judgment in favour of the Respondent and ordered the Appellant to pay the Respondent the following sums of money: (a) K39,270,514.25, being 30 days commission for the usage of the Plaintiff’s bond; (b) K274,893,599.75, being additional commission for 7 months that the Appellant wrongfully utilised the Respondent’s bond. (c ) Interest accrued on these sums of money at the average short term deposit rate from the date of the Writ, up to 11th October 2001, and thereafter, at the average lending rate as determined by the Bank of Zambia. On 4th April 2002, the Appellant and the Respondent executed a Consent Order in which it was directed that the amount of K314,164,114, plus interest in the sum of K58,905,771.37, due to the Respondent from the Appellant by virtue of the judgment of 11th October 2001 be settled in instalments. The 1st instalment of K103 million was to be paid in April 2002; to be followed by another instalment of K100,000,000.00 which was to be paid by 2nd May 2004. The balance of K170,069,885.37 was to be paid in three equal instalments of K56,689,961.79, the first of which was to be paid on 1st June 2002, and the last instalment was to be paid on 2nd August 2002. It was also ordered in the Consent judgment that damages for loss of business were to be assessed by the Deputy Registrar. The Appellant was ordered to acquit the Respondents bond from the Zambia Revenue Authority as per Court’s order on specific performance. In August 2002, the Respondent applied for assessment of damages before the Deputy Registrar. According to the affidavit in support of the application for assessment of damages which was sworn by one, Sharon Mwale, the Appellant had continued to use the Respondent’s bond up to the date of the application, a period amounting to about 8 months. The said Sharon Mwale further deposed that the Appellant had refused or neglected to pay for this usage. She stated further that the actions of the Appellant had resulted in loss of business to the Respondent from other clients which included Zambia Bottlers Limed, Zambia Sugar Company and Hybrid Poultry Farms Limited. She tabulated the losses occasioned by the breach as: (i) (ii) Loss in commission For the period 23rd July 2001 to 20th March 2002 K39,270,540.00 x 8 months @ Business lost from other clients between 27th October, 2002 to 20th March, 2002 on average @ K 314,164,320.00 K 994,603,040.00 Total Loss KI,308,767,360.00 The Respondent was thus claiming this sum of money from the Appellant. The Appellant opposed the application for assessment of damages. It contended, through an affidavit in opposition sworn by one, Millo Abel Alick Nsefu, that all the monies owed to the Respondent in the suit had been paid. According to the Appellant, the Respondent was even over paid in that sum of money, amounting to K83,653,450.14 had been paid to the principals of the Respondent, Ground Logistics Limited, who were 2nd Defendants in the Court below. He exhibited vouchers showing some of the payments which had been made to the Respondent and deposed that the claim for loss of business was vexatious and should be dismissed because it had no basis. In the affidavit in Reply to the Appellant’s affidavit in opposition, Sharon Mwale deposed that the Respondent had been taken aback by the assertions of the Appellant. She deposed that the Respondent was not aware of payments made to Ground Logistics Limited and that if such payments had been made, the Appellant should take issue with Ground Logistics Limited. She went on to state that the claim in this case was firstly, for additional commission for the usage of the bond by the Appellants for 8 months, i.e. from the commencement of the court action to the date of the Consent Order when the Appellant finally agreed to acquit the bond and secondly; for commission lost as a result of the inability by the Respondent to transact any business with other clients due to the non acquittal by the Appellant of its bond. She ended by stating that the issues in this case are clear and could be resolved expeditiously at less cost to both parties, if only the Appellant could desist from employing their tactics of glossing over the issues and buying time. The learned Deputy Registrar found, on the evidence which was before him, that the Respondent was entitled to additional commission for the extended period of 8 months. He was of the view that the failure by the Appellant to acquit the bond as required kept the Respondent out of the use of its commission. On the allegation by the appellant that the Respondent had been over paid, the learned Deputy Registrar found for the Respondent because, according to him, DW1 failed to tell the Court the dates, amounts, and receipts on which the payments were made. After accepting that not all clearing agents charge the same percentage as commission, the learned Deputy Registrar found that the commission which the Respondents was claiming in this case was a percentage which they normally charge their clients. He went on to state that in the absence of any other evidence to the contrary, he assessed the damages to be paid under this head at K22,500,000.00 per month for the period of 8 months. He ordered that the amount to paid would attract interest at the current Bank of Zambia lending rate from the 23rd July 2000 to the date of full payment. On the claim for loss of business, the learned Deputy registrar found in favour of the Respondent. He found that the Appellant’s failure to acquit the bond as ordered, caused the Respondent to suffer financial loss. He also found that as a result of this failure, the Zambia Revenue Authority suspended the Respondents licence. He rejected the contention by the Appellant that there was no evidence of the suspension of the Respondents licence. On the amount of K924,603,040 being claimed under this head, the learned Deputy Registrar noted in his judgment, that the Respondent had arrived at this figure by “relying and including potential clients”. He observed, “it is hardly true that the Plaintiff suffered financial loss to that extent because it could not trade with ‘dream clients’ He then went on to assess damages for the breach of contract at K100,000,000.00 and stated that in arriving at this amount, he had taken into account all the circumstances that gave rise to the matter. At the hearing of the appeal, Mr. Muneku, on behalf of the appellant, withdrew the Notice of Appeal and the Memorandum of appeal which were on record, and replaced them with a Notice of Appeal and a Memorandum of Appeal containing one ground of appeal; which was that the Court below erred in awarding the Respondent K100,000,000.00 as damages for loss of business without giving reasons. According to Mr. Muneku, the gist of the appeal is that the Appellant is questioning how the Court arrived at the sum of K100,000,000.00 because there is no reasoned decision. He went on to state that the absence of a reasoned decision deprived the Appellant of its right to challenge the decision because no merits or de-merits had been discussed or addressed. He went on to state that although the Court was conscious of making an award on what it called “dream or potential clients”, it did not explain how the decision was arrived at. He referred us to a Ruling by the Court in an unreported case of Stewards Company (Z) Limited and Apollo Enterprises Limited vs the Attorney-General. In reply, Mr. Mukata, on behalf of the Respondent contended that the Deputy Registrar did address his mind to the issue raised. He expressed surprise with the ground of appeal and stated that if anything, it was the Respondent who should have appealed against the award because at assessment, the Respondent led evidence which showed that they were entitled to over K900,000,000.00. He pointed out that the Respondent exhibited its audited accounts in the last two years before the suspension of the licence which showed that the Appellant was not the only client. He also referred us to page 13 of the record of appeal and submitted that the Respondents did not advance any ground to dissuade the learned Deputy Registrar from reaching the conclusion he did. We have considered the submissions of Counsel and the judgment of the court below. From the submissions of Mr. Muneku and the Memorandum of appeal, which was filed on the date of hearing, the Appellant is only contending with the award of K100,000,000.00 to the Respondent by the learned Deputy Registrar in respect of damages for loss of business. The Respondent had claimed K994,603,360.00 as damages for loss of business. According to the evidence of PW1, Sharon Mwale, on page 16 of the record of appeal, this claim came about because the Respondent lost business with other clients. According to her, the Respondent did not trade in 2001 and 2002 because its licence was not renewed by the Zambia Revenue Authority. The Respondent did not adduce any documentary evidence of the revocation or non renewal of its licence. To arrive at the figure claimed, they looked at the money the company made in 1999 and 2000 and settled for the average amount. The Appellants’ contention, on the claim for K994,603,360.00 for loss of business was that there was no loss of business. DW1 told the Court below that this was a wrong claim. In his affidavit in opposition to the assessment of damages appearing on pages 136 and 137 of the supplementary record of appeal, DW1 deposed inter alia “9. That indeed the loss of business was correctly related to the amount of K39,270,514.25 per month which was the maximum commission from the bond and consequently there is no basis for any extra damages being claimed for. 10. That there is no such other business which has been disclosed further and above the K39,270,514,25 which the Plaintiff could possibly have made from the bond and consequently there is no basis for any extra damages being claimed for. 11. That the First Defendant has paid the Plaintiff for the bond and loss of business for seven months in full as claimed in the specially endorsed writ herein and that as stated in paragraph 8 to 10 above to claim for further loss of business is a double claim which is without any basis. 12. That the first Defendant also paid the Plaintiffs principals the 2nd Defendant an amount of K83,653,450.14 being the 2.5% on the bond a fact the Plaintiff are aware of although it chooses to harass the 1st Defendant. [There are produced marked MAAN 12-16 payments to Grand Logistics]. 13. That the Plaintiff are aware that this claim for loss of business is vexatious as conceded in their letter dated 13th March, 2001 to the 1st Defendant referred to in paragraph 8 above. This claim should be dismissed as one without basis.” Counsel for the Appellant submitted in the Court below that there was no evidence of the Respondent’s licence having been revoked because of delays caused by the Appellant. According to Counsel, it was highly speculative to associate the Appellant with the suspension of the licence, if in fact it was actually suspended. In her testimony to the Court, the Respondent’s witness told the Court below that the Respondent was claiming for loss of business because ZRA did not renew its licence. According to her, the Respondent lost the licence in December 2000. She told the Court however that she had no document from the Zambia Revenue Authority on the cancellation of her licence. On this evidence, the Court below made a finding of fact that the Respondent’s licence was suspended on account of the Appellant’s failure to acquit the bond and consequently, the Respondent was unable to transact with other clients. In our view, it is a question of fact whether or not the Respondent’s licence was revoked as a result of failure by the Appellant to acquit the bond. The onus to prove this fact lay on the Respondent. We would like to believe that any such cancellation would not be done by word of mouth, but in writing. The cancellation of the licence having been seriously challenged, it was incumbent upon the Respondent to adduce cogent evidence to support the fact. It is trite law that while an Appellant Court may draw its own inferences from the evidence on record, it will not lightly reverse findings of fact. In the case of Wilson Masauso Zulu vs Avondale Housing Project Limited/2) we held that an Appellate Court will only reverse a finding of fact made by a trial Court if it is satisfied that the finding in question is perverse or made in the absence of any relevant evidence or upon a misapprehension of facts. In our view, the finding by the Court below, that the Respondent lost business on account of being unable to trade due to the revocation or suspension of its licence was not supported by the evidence on record. The suspension or the revocation of the licence was not proved. This finding was therefore made in the absence of relevant evidence. Consequently, this appeal is allowed. The award of KI00,000,000 for loss of business is therefore set aside. The costs of this appeal are awarded to the Appellant, to be taxed in default of agreement. E. L. SAKALA CHIEF JUSTICE I. C. MAMBILIMA SUPREME COURT JUDGE S. S. SILOMBA SUPREME COURT JUDGE 12