Arm Secure Limited v Astro Holdings Limited and Ors (2021/HPC/200) [2023] ZMHC 67 (11 July 2023)

IN THE HIGH COURT FOR ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: 2021/HPC/200 ARM SECURE LIMITED PLAINTIFF AND ASTRO HOLDINGS LIMITED FURNITURE HOLDINGS LIMITED 1 ST DEFENDANT 2ND DEFENDANT ADDIT TOURS AND TRAVEL LIMITED JRD DEFENDANT Before : Hon Lady Justice Irene Zeko Mbewe Appearances For the Plaintiff: . Mr. M. Ndalemeta & Ms. D. Nalishuwa of Messrs Musa Dudhia & Company For the Defendants: Mr. C. M. Sianondo & Mr. G. Mileji of Messrs Malambo & Company JUDGMENT Cases referred to: 1. Colgate Palmolove Zambia Inc v Able Shemu Chuka (Appeal No.181 of lndeni Petroleum Refinery Company Limited v VG Limited (2007) ZR 197 2. Amanita Milling Limited v Nkhosi Breweries Limited 2008/HPC/0241 3. 4. Mhango v Ngulube (1983) ZR 61 5. Mary Musambo Kunda v Attorney General (1993-94) ZR 1 6. Victor Koni v Attorney General Appeal No. 7 of 1990 7. Savenda Management Services Limited v Stanbic Bank Zambia Limited (Selected Judgment No. 10 of 2018 8. China Henan International Technical Corporation v Mwange Contractors Limited (2002) ZR 29 J1 I Page 9. Pioneer Pleasure Container Limited v Commissioner of Customs and Exercise (1967) 1 ALL ER 1053 10. Chazya Silwamba v Lamba Simpito (2010) ZR 475 11. Chimwenda Investment Ltd v Carmine Investment Ltd, CAZ Appeal No. 69 of2021 12. The Rating Valuation Consortium and Another v Lusaka City Council and Another (2004) Z. R 109 13. Premesh Bhai Megan Patel v Rephidim lnsitute Limited SCZ Appeal No.3 of 2011 14. John Musanje v Family Health Trust 15. JZ Car Hire Limited v Malvin cha/a and Another 16. Harbutt's Plasticine Limited v Wayne Tank and Pump Co. Limited [1970] 1 QB447 17. Zyambo v Abraham Sichalwe - SCZ Judgment No. 16 of 2016, 18. Mwila v BP Zambia Pie ([2013) ZMHC 17 19. Securicor Zambia Ltd v William Jacks & Company (Zambia) Ltd- SCZ Appeal No.24/1990 20. Pre Secure Limited v Union Bank Zambia Limited & 1/akumari Grishi Desai- SCZ Appeal No. 13/2003 21. Hanak v Green [1958} 2 ALLER 141 22. Kunda v Konkola Copper Mines Pie- SCZ Appeal No.48 of 2005 (unreported) 23. Wilson Masauso Zulu v Avondale Housing Project Limited (1982) ZR 172. Other works referred to: 1. Judgment Act, Cap 81 of the laws of Zambia 2. Limitation Ac2, 1939 UKt 3. Halsbury's Laws of England, 4th Edition, Volume 9 [1.0] Introduction [1.1] This claim concerns a contract between the Plaintiff and 1st Defendant for the provision of security services to various locations of the 1st Defendant and its subsidiary companies. [1.2] The Plaintiff commenced an action by way of writ of summons seeking the following reliefs: J2 I P age i. An order for the immediate payment of the sum of K8, 455,157.80 as fees for the security services provided to the Defendant from 1st September 2016 to 30th March 2021; ii. Damages for breach of contract; iii. Interest on the outstanding amount at 5% above First Alliance Bank Zambia Limited base lending rate from the date when the cause of action arose to the date of judgment and thereafter pursuant to section 2 of the Judgments Act, Chapter 81 of the Laws of Zambia; Further or other relief; and iv. v. Costs of and incidental to this action. [2.0] Plaintiff's case (2.1] According to the statement of claim, both the Plaintiff and Defendant are companies incorporated under the Companies Act No.10 of 2017. (2.2] By an oral agreement between the parties herein, the Plaintiff provided security services to the Defendant at various locations on the following terms: 1. The Defendant would pay initial monthly sum of K95,642.00 for provision of security services; ii. Monthly fees for services were to be paid in advance at the 111. beginning of every month; The Plaintiff was not liable for any loss, damage or injury suffered by the Defendant during provision of the services. In the event of loss, damage or injury suffered by the Defendant was proved to have been a result of the Plaintiff's negligence, the Plaintiff's liability was limited to K2,500.00 per incident for as long as the Defendant reported to the Plaintiff within 3 days of its occurrence; and iv. The Defendant like the Plaintiff's other clients, was to have it was adequate insurance cover for its property and understood the Plaintiff's services were not meant to be a substitute for such occurrence. J3 I Page [2.3] According to the Plaintiff, the Defendant knew or ought to have known the above terms governed its relationship with the Plaintiff as at the time of entering into the agreement, Mr. S. R. Patel, the Defendant's Chief Executive Officer (CEO), was given a copy of the contract. The CEO promised to return the contract upon signing, however this was not done until 2015 when the new CEO, Mr. Nitesh Patel joined the Defendant company. [2.4] From 2014 to May 2015, the Defendant consumed services worth K1, 964,685.66. On 2nd July, 2015 parties formalised their dealings in a written contract which contained the following terms: 1. Clause 1- the contract was effective from 1st May 2015 and was to remain in force for an initial period of 12 months and thereafter, it was to continue until terminated by either party by giving one ( 1) month written notice. 11. Clause 3 - the Defendant would pay an initial total monthly sum of K95,642.00 for provision of security services at various agreed locations. iii. Clause 4 - the monthly fee for the services were to be paid in advance at the beginning of every month. It was further agreed that any payment not made in accordance with clause 4 would attract interest at 5% above the First Alliance Bank Zambia base lending rate. iv. Clause 12 - exempted the Plaintiff and its servants from any liability whatsoever for loss, damage or injury suffered by the Defendant during provision of the services. In the event that loss, damage or injury suffered by the Defendant was proved to have been a result of the Plaintiff's negligence, the Plaintiff's liability was limited to K2,500.00 per incident for as long as the Defendant reported the incident to the Plaintiff within 3 days of its occurrence. v. Clause 16 - the Defendant to have adequate insurance cover for its property and it was understood that the Plaintiff's services were not meant to be a substitute for such insurance. J4 I Page [2.5] [2.6] [2.7] [2.8] [2.9] vi. Clause 17 - entitled the Plaintiff to increase the monthly fee for security services by giving 30 days' written notice to the Defendant. The contract further provided for how security officers were to guard the 1st Defendant's various premises as set out in Annexure A. The 1st Defendant requested for security services to its additional locations as such the service fee increased. The Plaintiff provided rapid response and monitoring at the 1st Defendants' various location. However, according to the Plaintiff, the 1st Defendant has not paid for security services from May 2015 to date, and the liability as at 30th March 2021 stands at accrued unpaid K8,455, 157.80. The Plaintiff wrote demand letters for the outstanding sum and in response vide a letter dated 19th March 2021, the 1st Defendant admitted owing the Plaintiff. Further, the 1st Defendant claimed set off against a larger amount allegedly owed by the Plaintiff to the 3rd Defendant and for loss suffered as a result of theft that occurred at one of the 1st Defendant's locations. The 1st Defendant claimed it is owed K13, 477,837.22 after set off, an amount which the Plaintiff denied. The 3rd Defendant provided services to the Plaintiff between 1st August 2014 and 1st April 2017 at the total sum of K3,783,340.12 which the Plaintiff settled in full. The said K3, 783,340.12 was taken into account by the Plaintiff in arriving at the claimed sum of K8, 455,157.80. The Plaintiff denies liability for loss caused by theft which occurred between 1st December 2014 and 29th December 2014. It avers that the claim ought to have been made before 29th December, 2014 however, the 1st Defendant brought the claim after 6 years as such it is statute barred. Further, that investigations revealed the value of stolen goods was K3,699, 135 which is less than K8,455, 157.80 and cannot extinguish the Defendant's debt. JS I Page [2.1 0] The Defendant failed and refused to pay the owed sum which is still due and owing to the Plaintiff. As a result of the foregoing, the Plaintiff has lost the benefit of the contract and suffered loss and damage. [3.0] Defendants' case [3.1] [3.2] [3.3] The defence discloses that the oral agreement was only with regard to the provision of service and the amount to be paid, and not the other alleged terms. The Defendants were not given a copy of the agreement neither did the parties deal with each other based on the alleged terms of the agreement. The written contract was executed on 2nd July 2015. The Plaintiff cannot use an exemption or limitation clause (12), to escape liability from its own wrong doing, or misconduct on the part of its employees. Insurance was not intended to cover thefts by the Plaintiff's employees. Further, that the Plaintiff did not provide security services in accordance with the contract, as the Plaintiff's security employees continued to steal and the Plaintiff gave notice of withdrawal of services. [3.4] During provision of services by the Plaintiff, the Defendants' premises were broken into and the 1st and 2 nd Defendants' property valued at K3,699, 135.00 was stolen. The said property was lost through theft by the Plaintiff's security personnel. When the set off is applied, the Defendants are owed a total sum of K40, 189,309.68 which is likely to increase. [3.5] Contrary to the contention that the claim for theft should have been made before 29th December, 2014, the Defendants aver the perpetrators of the theft were only found guilty on 13th June, 2017 as such the matter is not statute barred. Furthermore, the goods stolen were for business hence the Defendants were denied profit of 34% from usage of the said goods, which continues to accrue until the loss is made good. JG I Page [3.6] The Defendant denies that the Plaintiff has not lost any benefit of the contract nor put in considerable trouble, inconvenience, suffered loss and damage. In the circumstances, the Plaintiff is not entitled to any relief sought as it is not owed anything but instead it owes the Defendants. [4.0] Plaintiff's evidence [4.1] [4.2] [4.3] The Plaintiffs case stands on the evidence of PW, Mohammed Patel, a majority shareholder and Chief Executive Officer of the Plaintiff company. He adopted his witness statement and his averments are essentially a replication of the statement of claim and it will be of no value to rehash the same. During the trial the witness was cross examined on the content of their witness statement and re-examined. In cross examination, when referred to page 8 of the Plaintiff's bundle of documents, PW confirmed the amount of K3,783,340.12 was admitted as having been paid. He avers page 229 of the Defendant's bundle of documents contains an invoice for payment of K2, 850,000.00 to the Plaintiff by the 1st Defendant which is reflected on the statement of account appearing at page 228 of the Defendant's bundle of documents. PW explained that the contract relating to security services is evidenced at pages 8 to 11 of the Plaintiff's bundle of documents. Whilst, page 227 shows the 1st Defendant paid K1 ,000,000.00, meaning a total of K3,850,000.00 has been paid by the 1st Defendant. [4.4] When asked about the thefts that occurred, PW admitted thefts happened at premises guarded by the Plaintiff and the Plaintiff was informed of the theft in a letter dated 28th December, 2014. However, the Plaintiff could not comment on the theft as it was awaiting completion of investigations after which it would give a detailed report. He stated the Plaintiff did not issue a written report but a verbal one. J7 I P age [4.5] He was asked about the stolen items and admitted the Plaintiff had described the stolen items in the letter and that the Plaintiff's employees involved in the theft were convicted in 2017 as per Judgment appearing at pages 144 to 148 of the Defendant's bundle of documents. [4.6] Relating to the value of goods, his response was the value of the stolen items as at 2015 was US$649,769.00 and told the Court the 2 nd Defendant has not been compensated for the loss by the Plaintiff. The witness was referred to the 2nd Defendant's audited accounts for 2014 to 2017 on pages 152 to 226 of the Defendant's bundle of documents where he explained the gross profit as at 2017 was K9,555,204.00 at the average of 34%. [4.7] It was put to the witness that according to his evidence there is no bank statement showing US$27,309.60 reflected on page 26 of the Plaintiff's bundle of documents s having been paid to the 3rd Defendant to which he conceded. The witness reiterated that the 3rd Defendant has a separate account from the 1st Defendant as per letter dated 9th May 2017. He further explained the Plaintiff's payment to the 3rd Defendant was not through the bank but by consent, although there was no acknowledgment of receipt of money. [4.8] PW further explained there was no letter from the Plaintiff disputing the occurrence of thefts, the value of stolen goods in 2018 was US$84,061.02 as per page 237 of the Defendant's bundle of documents and page 239 of the same bundle shows partial payment through insurance. However, there is no evidence the insurance company paid. [4.9] When referred to page 241 of the bundle of documents, PW response was it was a receipt for payment of missing sprinkler heads which is in the name of Prologner Properties and not the 1st Defendant, and page 243 shows receipt issued in 1st Defendant's name. He went further to refer to page 16 of the Plaintiff's bundle of documents which details receivables showing the amount for JS I Page loss sustained for 6 years as US$1,325,523.76. PW maintained the 1st Defendant paid the Plaintiff K3,850,000.00. [4.10] PW converted US$27,309.60 at the exchange rate of K19.20 to K524,344.22, which when added to the admitted sum of the K3,783,340.12, K3,850,000.00 paid to the Plaintiff, and converted US$649,769.00 at an exchange rate of K19.20 to K12,475,564.80 gave a total of K20,633,249.20 without loss of profit. [4.11] PW testified that the total loss of profit indicated on page 25 of the bundle is K25,450, 152.20. On page 9 of the Plaintiff's bundle of pleadings, the Plaintiff is claiming K8,455, 157.80 which when from K20,633,249.20 gives a difference of subtracted K12,178,091.40 payable to the Defendant. [4.12] PW went on loss of profit to state K20,633,249.20 plus (K25,450, 152.20) equals K46,083.401.40 minus K8,455, 157.80 leaving K37, 628,243.60 to the credit of the Defendant. That K37,628,243.60 plus K684,061.02 is K37,712,3.04.62. He avers no invoice was issued after 2007 and admitted that in view of the sum of K37,712,304.62 payable to the Defendant, the Plaintiff would not be in a position to issue an invoice to demand payment. [4.13] In re-examination, he explained page 227 of the Defendants' BOD shows an invoice indicating various security and page 229 does not refer to any security service but merely states a transfer. He clarified the sum of US$27 ,309.60.00 owed to the 3rd Defendant was paid by consent and by way of set-off. [4.14] In reference to documents on page 23 and 24 of the Plaintiff's bundle of documents, PW explained the statement was prepared by the 3rd Defendant as the debtor and it shows the amount was set-off leaving a difference which is being claimed by the Plaintiff. [4.15] He clarified there was no direct acknowledgment by Mr. Patel of any debt owing as they were dealing with entities and not individuals. The Plaintiff has to date not presented a different value of the stolen air conditioners. J9 I P age This marked the end of the Plaintiff's case. [5.0] Defendant's case [5.1] The Defendants case stands on the evidence of two witnesses. [5.2] DW1, Dharmendra Solanki, the management control and system coordinator for the 1st Defendant, relied on his witness statement filed on 29th September, 2022. It mirrors the averments in the defence and for brevity will not rehash the same. [5.3] In cross examination, DW testified he started worked for the 1st Defendant from October 2016 to October 2022. He was not working for the 1st Defendant the time the agreement was entered into with the Plaintiff, neither was he an employee of the 1st Defendant when thefts occurred. He learnt the 1st and 2nd Defendants lost property of US$649, 765.00 equivalent to K3,699, 135.00. He confirmed clause 12 on page 9 of the Defendant's bundle of documents. [5.4] DW1 confirmed the 2nd Defendant suffered loss of K4,800,000.00 and stated page 212 of the Defendant's BOD shows the 2nd Defendant suffered loss of K3,700,000.00. The computation on page 149 of the Defendant's bundle of documents relates to what was lost. He did not recall the 1st Defendant making a claim to the Plaintiff following judgment of the subordinate court. DW1 was not a party to the oral agreement, and was not aware the relationship for security services started in 2012. Page 227 and 229 of the Defendants BOD shows advance payments. [5.5] that when K2,966,630.00 In reference to paragraph 12 of his witness statement he confirmed from K11,387,823.59 the difference is about K8,000,000.00. Further, as regards figures in row 1, 2, 3 and 4 of the table, he confirmed it was money due from the Plaintiff, whereas the sum in row 4 was paid to the Plaintiff. is subtracted [5.6] DW1 could not confirm the total receivables in paragraph 12 of his witness statement of K51,000,000.00 was claimed from the JlO I Page [5.7] [5.8] Plaintiff. Further, that the amount indicated on page 38 of the Plaintiff's BOD was never demanded from the Plaintiff. In re-examination DW1 clarified the averments in paragraphs 1, 2, 3 and 11 of his witness statement were premised on reports he read after joining the 1st Defendant. He explained paragraph 5 of his witness statement was confirming the theft and that the Defendants got more than K2,500.00. In reference to page 198 he explained gross profit does not include expenses directly or indirectly related to trading. After gross profit, there is a narration of administrative and operating and finance costs and the outcome is net profit which can be a loss or profit. Further, he explained that K3,850,000.00 was paid to the Plaintiff as an advance payment. [5.9] DW2 Sannmukh Ramanlal Patel, the Chairman of Astra Group of Companies placed reliance on his witness statement filed on 29th September, 2022. [5.1 O] In cross examination he denied referring PW to Swesh Gupta as CEO of the 1st Defendant in 2015 or Mr. Joory of Ronex Supplies. He confirmed the letter on page 1 of the Plaintiff's BOD was addressed to Mr Joory. The Plaintiff suggested to insure the goods after the theft, which was not done by the Defendants. DW2 testified that the 1st Defendant has been in existence since 1980 and insures some goods but not all goods. He admitted the Plaintiff is not an insurance company. [5.11] The Plaintiff guaranteed no theft would occur. He confirmed the Plaintiff has not been found liable for negligence in a civil matter for the theft, neither has the 1st Defendant sued. Page 12 of the Plaintiff's BOD shows a letter from the 1st Defendant to the Plaintiff for the claim of US$520,000.00. Despite there being no receipt to prove the Defendants purchase of goods lost in the thefts or a register showing the goods were stored, the Plaintiff was provided with the necessary information. Jll I P age [5.12] DW2 pointed at page 170 of the Defendant's BOD which shows the 2nd Defendant's audited accounts for 2014 and there is no entry for stock losses. This was approved by the 2nd Defendant's board of directors on 10th August, 2015 and was signed by DW2 as director a few months after claiming loss of stock in a letter to the Plaintiff dated 16th April, 2015 (page 162 of the Defendant's BOD). [5.13] He confirmed the theft occurred in 2014 and the claim for the value of stolen goods was only brought in 2021, as per amended defence and counterclaim, which is more than 6 years. [5.14] DW2 confirmed claims for theft of carpets shown in a letter dated 14th March, 2018 and missing sprinklers on 20th September, 2017 occurred after execution of the contract in 2015. It is his understanding, that according to clause 12, the Plaintiff's liability was K2,500.00, and this clause was not applicable to later events of theft, that is why they were paid. [5.15] Receipts from Micmar showing for payment for missing sprinklers on page 241 and insurance claim on page 239. He was not aware the payments were less than 10% of the monthly guarding service fee of K95,642.00. [5.16] In re-examination, DW2 explained he has never seen the contract the Plaintiff allegedly left with him in 2014. He stated the Plaintiff's employees were arrested for theft. In line with page 170 of the Defendant's BOD, he clarified that in accounting, loss is verified and confirmed the following year. [5.17] The Plaintiff continued to offer security services until 2021 when this matter was commenced. The thefts occurred in 2014 and the contract was signed on 2nd July, 2015. He explained the Plaintiff paid K2,500.00 in line with clause 12 of the contract on the basis the Plaintiff was involved in the theft. [6.0] Plaintiff's submissions [6.1] On behalf of the Plaintiff, it was submitted it is entitled to the sum of K8,455, 157.80 for the services provided to the 1st Defendant, J12 I Page which services are not denied. Counsel referred the Court to page 1202 of the learned authors of Chitty on Contracts, 27th Edition Volume 1, where it states as follows: "A debt is a definite sum of money fixed by the agreement of for the the parties as payable by one party in return performance of a specified obligation by the other party ... the Plaintiff who claims payment for a debt need not prove anything other than his performance ... " [6.2] Counsel argued that parties are bound by their contractual terms and the court is enjoined to enforce terms of an agreement freely entered into by the parties. To augment this, Counsel for the Plaintiff cited the case of Colgate Palmolive Zambia Inc v Able Shemu Chuka <1 ) and Amanita Milling Limited v Nkhosi Breweries Limited < 2l. [6.3] On the issue of interest, Counsel submitted that the Plaintiff is entitled to payment of interest on the outstanding amount as per the holding in the case of lndeni Petroleum Refinery Company Limited v G Limited !3 In the present case, parties agreed delayed payment would attract 5% monthly interest. )_ [6.4] As regards the Defendants' counterclaim, it is submitted the pleadings do not reveal any claim arising from tort or contract, as there is no pleading the alleged loss of goods valued at US$1,975,297.76 was as a result of the Plaintiff's negligence. It is the Plaintiff's position that the 2nd Defendant's claim for theft is statute barred as the alleged thefts occurred between 1st and 29th December, 2014. [6.5] It is further submitted that pursuant to clause 12 of the contract, the Plaintiff's liability is limited to K2,500.00 and the 1st Defendant is aware of this limitation. Counsel went on to submit that the Defendants have not proved their claim for loss of profit resulting from the theft. The following cases were called in aid: i. Mhango v Ngulube (4J; ii. Mary Musambo Kunda v Attorney General (5J; and J13 I Page iii. Victor Koni v Attorney General <6J. [6.6] It is argued that the Defendants did not put forward any documentary and independent evidence to substantiate their claim for loss of profit as such it should not be entertained. [6.7] Counsel further submitted the counterclaim for payment of K2, 966,630.00 and US$27,309.60 by the 3rd Defendant was a set-off as stated by PW and confirmed by DW1 as per his table appearing on page 25 of the Plaintiff's bundle of pleadings. [6.8] Counsel submitted there cannot be a liquidated demand for a tortious claim as per the Supreme Court holding in the case of Savenda Management Services Limited v Stanbic Bank Zambia Limited (7l_ The Defendants' claim is unliquidated as such they cannot exercise a right of set-off against sums admittedly owing to the Plaintiff. [7.0] Defendants' submissions [7.1] for that the Defendants submitted Learned Counsel the Defendants are separate entities. The 1st Defendant paid K3,850,000.00 as shown at pages 227 to 230 of the Defendants' BOD. It is not in dispute the Plaintiff's employees were found guilty for thefts that occurred at the Defendant's premises, therefore this is a proper case to enter judgment on admission regard the claim for thefts. To augment this, Counsel cited the case of China Henan International Technical Corporation v Mwange Contractors Limited (Bl. [7.2] Counsel asserted that the claim for theft is not statute barred as the cause of action arose when the elements supporting the case came into existence on 13th June, 2017 vide the Judgment convicting the Plaintiff's employees. Therefore, the Plaintiff cannot escape liability as the thefts were done by its employees. Counsel argued the limitation of liability under clause 12 is not applicable because the contract was not signed at the time. [7.3] Counsel indicated that the 2nd Defendant being a trading entity was denied the opportunity to make profit due to the thefts. By exhibits J14 I Page at pages 152 to 226 and 149, 160, 179, 198 and 216 of the Defendants' BOD, the 2nd Defendant had demonstrated how it was making profit. The 2nd Defendant is therefore entitled to the value of stolen goods and loss of business on the said value. [7.4] It is submitted that the Plaintiff admitted the sum of K3, 783,340.20 to the 3rd whilst the sum of US$27,309.60 is outstanding Defendant, hence there is no issue to be resolved in respect of this. In support of this proposition, Counsel called in aid the following cases: i. Pioneer Pleasure Container Limited v Commissioner of Customs and Exercise (9 ) ii. Chazya Silwamba v Lamba Simpito (10l; and iii. Chimwenda Investment Ltd v Carmine Investment Ltd (11 l [7.5] In the absence of evidence that the Plaintiff paid the said amounts, the Court should enter Judgment of the admitted sums in favour of the 3rd Defendant. [7.6] Counsel contends the Plaintiff's witness further conceded a total amount of K37,628,243.60 is due to the Defendants following a deduction of the Plaintiff's claimed sum. Therefore, the Court should sustain this figure together with profit. [8.0] Consideration [8.1] [8.2] I have considered the pleadings before me, witness statements, oral and documentary evidence, and written submissions by Counsel. The resolution of the issues herein is substantially factual. The determination of the claims is based on the interpretation of the agreements and activities surrounding the contracting parties and the effect on the 2nd and 3rd Defendant. [8.3] It is not in dispute some time in 2012, the Plaintiff and 1st Defendant entered into an oral agreement for provision of security services. This was prior to execution of a written contract on 2nd July, 2015. J15 I Page [8.4) [8.5) [8.6) The Plaintiff contends it provided security services to the 1st Defendant in accordance with the terms of the oral agreement, which terms were reinforced in the written contract. According to the Plaintiff, some of the terms of the oral agreements were that the 1st Defendant was to pay a monthly sum of K95,642.00 for provision of security services; the Plaintiff was not liable for any loss, damage or injury suffered by the Defendant during provision of the services; the Plaintiff's liability for loss suffered as a result of its negligence was limited to K2,500.00; and the Defendant was to have adequate insurance cover for its property. Premised on the terms of the oral agreement, the Plaintiff provided security services at the 1st Defendants' various locations. This relationship continued until the parties executed a written contract on 2nd July, 2015 which was effective from 1st May, 2015. However, the Defendants did not make some payments for the services provided and as at 30th March, 2021 the Defendants were allegedly indebted in the sum of K8,455, 157.80. The Defendants postulated that the oral agreement only related to provision of security services and amounts payable, and not any other terms. The Defendants lamented that although the Plaintiff provided services as per agreement, they lost goods at their various locations due to thefts perpetuated by the Plaintiff's employees. On this basis, the Defendants denied being indebted to the Plaintiff and instead counterclaimed that they are owed the sum of K40, 189,309.68. [8.7) the pleadings, From the foregoing, and having considered evidence, written submissions of the parties herein, in respect of the Plaintiff's claims, the issues I frame for determination are as follows: (i) Whether the terms of the oral agreement were the same as the ones in the written contract; (ii) Whether the Defendants breached the contract by its failure to pay for security services rendered by the Plaintiff; and (iii) Whether the Plaintiff is entitled to the reliefs sought. J16 I Page [9.0] Oral agreement/ written contract [9.1] [9.2] I have the task of deciphering the terms of the oral agreement and determining whether the same are reflected in the written contract as asserted by the Plaintiff. It is trite law that the intention of parties can be determined by considering the evidence presented which may be in the form of express terms of an agreement or implied from their conduct. In analysing this position, I am guided by the case of The Rating Valuation Consortium and Another v Lusaka City Council and Another (12 > where the Supreme Court stated that: in analyzing business the Court "what should guide relationship should be whether or not the parties' conduct and communication between them, amounted to an offer and acceptance." [9.3] Pages 1 to 3 of the Plaintiff's bundle of documents (BOD) contains letters addressed to the 1st Defendant by the Plaintiff. A reading of the letter on page 1 of the Plaintiff's BOD reads as follows: "2rh July 2012 The General Manager- Mr. Raj Joory Ranae Supplies Ltd Astra Holdings Ltd Plot 11871, Chandwe Musonda Road P. 0. Box 32423 LUSAKA Dear Sir, RE: STANDARD OPERATING PROCEDURES (SOP'S) AND SERVICE CONTRACT Further to our various discussions and negotiations we thank you for choosing us for the provision of our services to your various sites throughout Lusaka. J17 I Pa g e We have now been informed by your Mr. S. Gupta that you will be the liaison and co-ordinating contact person on behalf of your group for all matters related to security services to be rendered to your various locations under the Astra Group. To enable us provide you with quality service we have hereby attached the following for signing: 1. The Draft Standard Operating Procedure (SOP'S) which outlines specific site instructions for each of your sites. Kindly sign each one of them on top right hand corner "Client Sign" and return the signed copy for our file. 2. Our Standard Contract number (Agreement Relating to Guarding Services). Kindly sign and return copy for our file. Please be advised that we shall commence our services pending signing of the SOP'S and our attached contract. We request you to sign and return these important documents soonest. Until you sign and return the attached SOP'S and the contract, our terms and conditions stated in these attached documents shall apply. The fact that you have not executed the contract we shall proceed to deploy our services premised on the terms and conditions contained in the contract as the same are not amenable to variation. members from our operations team will soon contact you to coordinate the deployments at your various sites as requested. Once again we thank you for engaging us and await the return of our copies of our attached SOP'S and the service contract. Yours sincerely. For Arm Secure Ltd Hitler Njobvu Human Resource Manager" J18 I Page [9.4] [9.5] From the content of the reproduced letter, it shows that as at 27th July 2012, the Plaintiff and 1st Defendant had an agreement for provision of security services. The 1st Defendant was served with a standard contract which was to be returned to the Plaintiff upon execution. Further, that during the pendency of such execution of the standard contract, the terms and conditions contained therein were applicable. [9.6] Upon consideration of the correspondence between the Plaintiff and 1st Defendant and their conduct, it is axiomatic that the oral agreement for security services was governed by the terms of the contract sent to the 1st Defendant for execution. Therefore, the Defendants' argument that the oral agreement only provided for provision of security services and is untenable. the amount payable, [9.7] [9.8] The general principle of law as enunciated by the Supreme Court in the case of Premesh Bhai Megan Patel v Rephidim lnsitute Limited (13l, is that any discussion of verbal conditions before the written agreement is completely suppressed by the written document. It is apparent that from inception, the intention of the parties was to have their relationship governed by the terms of the contract. Therefore, the applicable contract as regards the provision of security services is the written contract dated 2nd July, 2015. [10.0) Payment of KS,455,157.80 [10.1] The Plaintiff alleges there is an outstanding sum of KB,455, 157.80 for security services provided to the 1st Defendant between 1st September, 2016 and 30th March, 2021. [10.2] At page 8 of the Plaintiff's BOD is the contract entered into between the Plaintiff and 1st Defendant dated 2nd July, 2015. The same is for the provision of guarding/security services at the 1st Defendant's locations listed in annexure A. The contract number is GRD/15/99 and annexure A on page 11 shows the amount payable for the services as K95,642.00 which corresponds with J19 I Page the implied terms of the oral contract referred to by the parties. There is no dispute the 1st Defendant was provided with security services as agreed. [10.3] The issue is whether or not the 1st Defendant is owing the claimed sum of KB,455, 157.80. Paragraph 14 of the statement of claim contains a table tabulating the sums owed by the 1st Defendant from September 2016 to March 2021. [10.4] The Plaintiff wrote a demand letter for the sum of K9,754,895.60 inclusive of interest on 1st March, 2021 (page 35-36 of the Plaintiff's BOD). The pt Defendant vide a letter authored by its Advocates dated 19th March, 2021 responded as follows: "19 th March 2021 Messrs Musa Dudhia & Co. 3rd Floor, Mpile Office Park 74 Independence Avenue LUSAKA Dear Sir, RE: ARM SECURE LIMITED AND ASTRO GROUP COMPANIES The subject matter refers. Your letter of 1st and 2 nd instant have been passed on to us with instructions to respond. Our client's instructions are that when the amount owed to them with that of Audit Tours and Travel Limited is considered, together with the theft at the instance of the employees of your client, our client is owed the sum of K13,477,837.22. This amount outstanding is arrived at after the sum of K10, 439,690 which is set off against the amount owed to our client. We will be grateful to receive the proposals of how your client intend to settle the same. Kindly acknowledge safe receipt by signing a copy hereunder. J20 I Page Yours faithfully MALAMBO & COMPANY" [10.5] I find from the content of the above letter that the 1st Defendant admitted owing the demanded sum of K9,753,895.60 in the K10,439,690.00, which they considered as a set-off against the amount owed to the Defendant. [10.6] The alleged right of set-off came about as follows. When the amount owed to the Plaintiff is considered with the one the Plaintiff owes the 3rd Defendant together with that of loss due to theft, the Plaintiff the sum of K13,477,837.22 after a set-off of K10,439,690.00. However, the right of set-off shall be determined under the Defendants' counterclaim. the Defendants indebted to in is [10.7] In light of the foregoing particularly the cited letter, I am of the view the Plaintiff has proved it is owed a sum of K8,455, 157.80 which amount has been admitted by the 1st Defendant as shown in the preceding paragraph. The claim succeeds. [11.0] Damages for breach of duty [11.1] The Plaintiff contends the Defendants breached the contract as they failed or neglected to pay for the security services provided. [11.2] A breach of contract occurs if a party to a contract, without lawful cause, fails or refuses to comply with their obligations or perform what is due from them under the contract or performs their obligations in a defective manner. The learned authors of Halsbury's Laws of England, 4th Edition, Volume 9, at paragraph 117 4, state that: "In cases of breach of contract, the contract breaker is responsible for resultant damage which he ought to have foreseen or contemplated when the contract was made as being unlikely." [11.3] Damages for breach of contract are recoverable in respect of the loss actually resulting as was at the time of the contract reasonably J21 I Page foreseeable as liable to result from the breach. This depends upon the knowledge then possessed by the parties. It is assumed a party who commits a breach of contract had knowledge of the facts of everyday life when he made the contract. Such knowledge is imputed to him by law, and includes knowledge of the general circumstances of the business of the parties at that time and place. [11 .4) Clauses 3 and 4 of the contract provides as follows: "3. The monthly charge for the service shall be stipulated and tabulated in annexure A to this contract. 4. The monthly charges shall be paid in advance every month at the beginning of each month. All unpaid or delayed payments shall attract an interest cost of bank base lending rate (First Alliance Bank Zambia Ltd) plus 5% (five percent)." [11.5) From the above terms, it has already been established the Plaintiff provided services as agreed, therefore the issue is whether the 1st Defendant paid for the services provided in accordance with the terms of the contract. [11.6) The Plaintiff has shown that the 1st Defendant failed to fulfil its contractual obligation of paying monthly charges from September 2016 to March 2021. It is apparent the 1st Defendant breached clauses 3 and 4 of the contract. [11.7) In regard to damages, the Supreme Court in the case of John Musanje vs Family Health Trust !14l, stated that: "damages are the sum of money which will put the party who has been injured or suffered, in the same position as he would have been in if he had not sustained the damage for which he is now getting his compensation or reparation." [11.8) It follows that a party claiming damages should prove so as guided by the case of JZ Car Hire Limited v Malvin Chola and Another !15i, where the Supreme Court held that: "It is the party claiming any damages to prove damages." J22 I Page [11.9] The Plaintiff alleges it has lost the benefit of the contract, has been put to considerable trouble, inconvenience and expense and suffered loss and damage due to the 1st Defendant's breach of contract. However, it has not shown that it suffered actual damage as a result of such breach of contract. In the circumstances, I award nominal damages of K6,000.00. [12.0] Interest [12.1] The Plaintiff argues. it is entitled to payment of interest on the outstanding amount as per clause 4 of the contract. To the case of lndeni Petroleum Refinery substantiate Company Limited v G Limited (3l was called in aid. this, [12.2] Clause 4 of the contract shows that the Plaintiff and 1st Defendant agreed to charge 5% interest on delayed or unpaid monthly charges. This is an express term and it is trite law that parties are bound by the terms agreed to. In this case the 5% is chargeable on delayed or unpaid monthly charges up to the time of commencement of these proceedings. [12.3] In the English case of Harbutt's Plasticine Limited v Wayne Tank and Pump Co. Limited (151, Lord Denning, M. R., stated as follows: "An award of interest is discretionary. It seems to me that the basis of an award of interest is that the Defendant has kept the Plaintiff out of his money; and the Defendant has had the use of it himself. So he ought to compensate the Plaintiff accordingly. The reasoning does not apply when the Plaintiff has not been kept out of his money but has in fact been indemnified by an insurance company. I do not think the Plaintiff should recover interest for himself on the money when he has not been kept out of it." [12.4] Section 2 of the Judgments Act, Chapter 81 of the laws of Zambia provides that: "Every judgment, order, or decree of the High Court or of a subordinate court whereby any sum of money, or costs, charges or expenses, is or are to be payable to any person J23 I Page shall carry interest at the rate of six per centum per annum from the time of entering up such judgment, order, or decree until the same shall be satisfied, and such interest may be levied under a writ of execution on such judgment, order, or decree." [12.5] In light of the foregoing, I find the Plaintiff is entitled to interest. The Judgment sum of K8,455, 157.80 shall attract interest at the short term deposit rate from date of writ of summons to date of Judgment and thereafter at the current bank lending rate as determined by the Bank of Zambia until full payment. [12.6] On the nominal damages, simple interest shall accrue from date of Judgment until full payment. [13.0] Costs [13.1] On the issue of costs, the Supreme Court in Zyambo v Abraham Sichalwe < 11l, stated that 'it is trite that costs follow the event.' [13.2] In the circumstances, I award costs to the Plaintiff against the Defendants herein which are to be taxed in default of agreement. [14.0] Disposal [14.1] On a balance of probabilities, the Plaintiff has proved its case against the Defendants to the extent stated. I make the following Orders: ii. 111. i. An order for the immediate payment of the sum of KB,455, 157.80 as fees for the security services provided to the Defendant from 1st September 2016 to 30th March 2021; I award nominal damages of K6000.00 for breach of contract; Interest on the outstanding amount under (i) shall be at the short term deposit rate from date of writ to Judgment and thereafter at the commercial lending rate until full payment; Simple interest shall accrue on the nominal damages of K6000.00 under (ii) from date of Judgment until full payment; I decline to grant any further or other relief; iv. J24 I Page v. Costs to the Plaintiff against the Defendants herein to be taxed in default of agreement; Leave to appeal granted. vi. [15.0] Defendants' Counterclaim [15.1] The Defendants counterclaim the following: i. Damages for breach of contract. ii. An order for the payment of the sum of K40, 189,309.68 being the amount the amount outstanding after deducting outstanding to the Plaintiff. iii. The sum being loss of business. iv. Interest from the date when the amounts fell due until payment. v. Any other relief the court may deem just. vi. Costs of and incidental to this action. [16.0] Factual background [16.1] [16.2] [16.3] By oral agreement and subsequent written agreement effective 1st May, 2015, the Plaintiff agreed to provide security services to the 1st Defendant's numerous entities. The 3rd Defendant issued air tickets to the Plaintiff and it was agreed the price of the tickets would be taken to the 1st Defendant's account. The Defendants lost goods valued at K3,699,769.00 through theft perpetrated by the Plaintiff's employees who were convicted of the said thefts. The profit for six years on the lost goods is US$1,325,528.26 which amount is likely to increase. The total outstanding amount is US$2,002,604.36 which consists of US$1,325,528.26 years, K3,699, 135.00 value for stolen goods and US$27,309.60 for air tickets. profit for six [16.4] At the time of commencement of this action, the outstanding amount on air tickets was equivalent to K2,966,630.00. The J25 I Page [16.5] [16.6] amount for other stolen items at the instance of the Plaintiff's employees is K102,426.02. The prevailing exchange rate at the time of commencement was K22.3 the sum of thus US$2,002,604.36 to K44, 658,077.23, and when added to the K6,919,056.02 bringing it to a total of K51,577, 133.25. translating to 1 USO The Defendants tabulate payments of K3,850,000.00 paid to the Plaintiff towards the provision of services and the amount due to the Plaintiff is K 10,962,278.14. When the outstanding amount is set off against the sum of K51,577, 133.25 owed by the Plaintiff, it leaves the sums of K40, 189,309.68 due to the Defendants. Premised on the Defendants the counter-claim the following: foregoing a. Damages for breach of contract; b. An order for the payment of the sum of K40, 189,309.68 being the amount outstanding after deducting the amount outstanding to the Plaintiff; c. The sum being loss of business; d. Interest from the date when the amounts fell due until payment; e. Any other relief the court may deem just; and f. Costs of and incidental to this action. [17.0] Reply and defence to counterclaim terms which governed The Plaintiff avers the parties' relationship prior to 2nd July, 2015 are the same ones contained in the contract signed on 2nd July, 2015. The Defendants had a copy of the contract at all times and were terms applied on several occasions reminded included the Plaintiff's limited liability. There was no further communication about the theft until 5 years later and the clause on the Plaintiff's liability is categorical that it applies to instances where the loss is occasioned by negligence and the that the [17.1] J26 I Page [17 .2] [17.3] [17.4] [17.5] requirement for the Defendants to take out insurance cover includes loss occasioned by theft. The Plaintiff was notified of significant incident of theft that took place between 1st December 2014 and 29th December, 2014, and the Defendants were compensated for other minor incidences of theft. The Plaintiff denies being indebted to the Defendants, as it set off all sums owed to the 3rd Defendant. The Defendants' illustration of the alleged sums owed by the Plaintiff is not articulate as to the exact period. Further, the Plaintiff was not made aware of theft of the Defendants' goods worth K102,426.02 and the claim related to theft is statute barred as the alleged breach of contract occurred in December, 2014 and not when the Plaintiff's former employees were convicted. Therefore, the Defendants are not entitled to any lost profits as there is nothing to support the same. It avers the agreement of 1st May, 2015 had the same terms as the agreement given to the Defendants on 27th July, 2012. The services provided by the 3rd Defendant between 1st August, 2014 and 1st April, 2017 were worth K3,783,340.12 which was paid in full. The Defendants did not make payment amounting to K3,850,000.00 and are not entitled to any reliefs sought in the counterclaim as the Plaintiff did not occasion any damage or loss on the Defendants. [18.0] Consideration and decision [18.1] Damages for breach of contract It is argued the Plaintiff breached the contract when its employees stole goods from the Defendants' premises. As earlier highlighted, a breach of contract occurs if a party to a contract, without lawful cause, fails or refuses to comply with their obligations or perform what is due from them under the contract or performs their obligations in a defective manner. [18.2] J27 I Page [18.3] It must be noted that making a case for an award for damages is twofold, firstly a party claiming damages must clearly plead such damages and secondly, must prove they suffered actual damage. [18.4] In applying the law on damages, the Defendants' pleadings and evidence do not specifically state the term or clause of contract breached by the Plaintiff. The Defendants' pleadings do not particularise how the alleged damages arise. In the circumstances I need not belabour the point and the claim fails. [19.0] Payment of the sum of K40, 189,309.68 [19.1] [19.2] The Defendants contend the Plaintiff is indebted in the sum of K40, 189,309.68. This sum comprises the value for the stolen goods, the amount due to the 3rd Defendant and profit for six years. The Plaintiff argues the claim in relation to theft by its employees is statute barred as it arose in December, 2014 and this action was commenced after the allowed 6 years, that is, in 2021. [19.3] I shall therefore address the issue of whether or not the claim the Plaintiff for acts perpetuated by arising out of theft is statute barred. The Defendants impute negligence on its employees during the provision of security services. Therefore, the claim is hinged on tort and section 2 of the Limitations Act provides that an action founded on simple contract or tort must be commenced within 6 years of when the cause of action arose. [19.4] In Mwila v BP Zambia Pie (18l, it was held that: "the court will not come to the aid of a litigant who has sat on his rights for such a long time. The Limitation Act 1939 (which applies to Zambia) in section 2 Part 1 provides for a limitation period of six years for all cases J28 I Page [19.5] [19.6] [19.7] [19.8] in tort and contract. The period runs from the point where the injury or problem was created." align myself with the cited passage. The Plaintiff denies liability for thefts that occurred in December 2014. The law clearly states that actions founded on tort and simple contracts should not be commenced after 6 years from when the cause arose. In respect of torts, the cause of action accrues immediately the tort is committed. In this regard, the cause of action arose when the theft occurred. I have noted the Defendants' argument that the claim is not statute barred as the perpetrators of the theft were only found guilty on 13th June, 2017. To agree with the Defendants' argument would be the tantamount Defendants seek to enforce a Judgment, which is not the case. to asserting that In light of the foregoing, any claims predicated on thefts that are time barred by virtue of section 2 of the Limitation Act shall not be entertained . I shall only deal with post 2015 incidences. The Plaintiff argues its liability is limited. A limitation clause was discussed in the case Securicor Zambia Ltd v William Jacks & Company (Zambia) Ltd (19l, where the Supreme Court observed that: limitation clause "A limitation clause is not to be construed as strictly as an exclusion clause and where as in the present case, the in clear and unambiguous language, the court is bound to give effect to it unless it is shown that the clause was not brought to the attention of the other party to the contract." is expressed [19.9] Specifically, clause 12 of the contract provides as follows: "The company or any of its employees shall not be liable for any loss or damage to the clients, the clients, customers or visitors property or injury or death. However, if the loss, damage, injury or death is caused J29 I Page due to the negligence by the company or any of its employees, the refund/compensation amount shall not exceed K2,500.00 per event or incident on condition that the said damage/loss is reported in writing to the company within 3 days of its occurrence." From a reading of the limitation clause, it places liability on the Plaintiff for any loss or damage caused by its negligence or its employees and shall not exceed K2500.00. The limitation clause is clear and unambiguous. It requires incidences to be reported in writing within 3 days. The Defendants are not disputing the clause but are instead argue that it does not exonerate the Plaintiff from liability as the loss suffered was perpetuated by its employees. On page 140 of the Defendants' bundle of documents is a letter to the Plaintiff dated 16th April, 2015 in which the Defendants informed the Plaintiff the value of the stolen good was K3,699, 135.00. The Supreme Court in the case of Pre Secure Limited v Union Bank Zambia Limited & llakumari Grishi Desai (20l, in considering a limitation clause held as follows: "We have examined the limitation clause contained in clause 5 of the contract entered into by the appellant and the respondent. It is stated in the widest possible terms and it is clear and unambiguous. there has also been no evidence or even a suggestion that its existence was not drawn to the attention of the respondents. This clause was binding on the respondents and the learned trial Judge was in error in holding that the limitation clause was ineffective by virtue of a 'fundamental breach' of contract on the part of the appellant. We would allow the appeal and set aside the award made by the court below, and hold that the appellant's liability under the contract is limited to the sum of K200, 000.00." the appellant and [19.10] [19.11] J30I Page [19.12] In line with the parties' freedom to contract, instructive is the case of Colgate Palmolive (Z) Inc v Shemu and Others (1l, cited by Counsel for the Plaintiff, where the Supreme Court held that: "parties shall have the utmost liberty in contracting and their contracts when entered into freely and voluntarily shall be enforced by courts of justice." I align myself with the above excerpt. It is not in dispute the substratum of the contract in question is provision of security services by the Plaintiff. Thus the Plaintiff owed a duty to safeguard the Defendants' premises and goods. Clause 12 clearly states the limit of the Plaintiff's liability in the event of loss or damage arising from its negligence or that of its employees. There is nothing to suggest the contract in question was not entered into freely and voluntarily by the parties, or that clause 12 was not brought to the attention of the Defendants. Therefore, the contract shall be enforced by this Court as agreed by the parties. The liability of the Plaintiff is limited to K2,500.00 per incident reported in accordance with clause 12 and notified in writing to the Plaintiff within 3 days of the loss. To that effect, the documentary evidence shows a letter was written by the 1st Defendant to the Plaintiff advising them of a theft that occurred in December, 2014 and another loss on 22 nd April 2015 followed by another letter dated 1st June 2015 (page 141 and 142 Defendants BOD). This period is statute barred as earlier stated in the preceding paragraphs. At page 236 of the Defendants BOD is a letter dated 19th March, 2018 authored by the Plaintiff to the 1st Defendant advising of a break-in that occurred during the public holiday period 8th March to 12th March 2018. The list of stolen items is valued at USD84,061.00 (page 237 of the Defendants BOD). [19.13] [19.14] [19.15] J31 I Page At page 238 of the Defendants BOD is a police report dated 24th March, 2018 relating to the complaint of a theft at Furniture Holdings Limited. [19.16] For the foregoing reasons, I see no basis to enter Judgment on admission in regard to the thefts as argued by the Defendants. The case of China Henan International Technical Corporation v Mwange Contractors Limited relied on by Counsel for the Defendants does not apply herein. [19.17] Having said that, the amount due to the Defendants for the [19.18] value of goods stolen within the period not barred by statute is at K2500.00 for every loss suffered. The lost items are as stipulated in the letter dated 1 yth March, 2018 (page 238 of the Defendants BOD). The same to be assessed by the Registrar. The second limb of contention by the Defendants is that the sum of K40, 189,309.68 consists of the money due to the 3rd Defendant for air tickets issued to the Plaintiff in the sum of US$27,309.60 equivalent to K2, 966,630.00. A perusal of pages 16 to 133 of the Defendants' BOD contains invoices issued by the 3rd Defendant in relation to air tickets issued to the Plaintiff. The same run from the period 2014 to 2017. [19.19] The Plaintiff argues it settled the money due to the 3rd Defendant in full. A careful scrutiny of the statement of account for the period January 2015 to September 2015 on pages 14 to 18 of the Plaintiff's BOD shows payments paid to the 3rd Defendant which correspond with invoices on pages 27, 28, 29, 30, 32, 33, 34 and 37 of the Defendants BOD. [19.20] Further, the correspondence between the parties vide emails on pages 19 to 22 of the Plaintiff's BOD illustrates that parties were not agreeable as to the amount due to the 3rd Defendant. On 9th May 2017, DW1 wrote to the Plaintiff as follows: "Dear Mr. Mohammed, We have reconciled the statement sent by you. You have clubbed the transactions for Addit T & T and AHL which J32 I Page we have separated as both being different companies and to be dealt separately. In Addit T & T the balance outstanding to your account is K3, 184,968 as on 31.03.2017 which may kindly be paid immediately along with the invoices issued in April. For your security bills outstanding in AHL and other group companies we will discuss as to how to dealt with it. However, in security account we have found some differences which are appearing the attached reconciliation statement. You are requested to kindly match these entries with our records and correct accordingly. " in [19.21] In response the Plaintiff via email dated 20th June, 2017 stated in part as follows: "Dear Nitesh Further to the below mail from Mr. Solanki and our subsequent meeting in your office, I wish to state the following: As per our numerous discussions/understandings (verbal and written) over the past 2 years or so, we agreed to offset all Addit T and T bills against our security bills. It is a result of these understandings that these two accounts (A TT & AS) have been conducted as "offsets" against each other. We have treated these amounts in our books accordingly. Therefore, for Mr. Solanki's below request to pay your bills and ignore our bills seems contrary to our agreements. We request that the final recon be agreed upon my Addit and ourselves and offset all outstanding amounts with each other. After the final recon is agreed and offset, we can formalise how we operated our accounts respectively, i.e. Addit vs Arm Secure on a monthly basis." J33 I Page [19.22] [19.23] From the documentary evidence, I am inclined to believe the Plaintiff's position as testified by PW that parties had agreed to set-off the amount due to the 3rd Defendant from what the Defendants owed the Plaintiff. I shall take a slight detour and discuss the equitable defence of set-off by the 1st Defendant. In the case of Hanak v Green 14l at page 153, Seller L J in discussing the right of set off said: ( [19.24] "I cannot, as I see it, make any difference which side commences proceedings in which a cross claim arises. If there is a set-off at all, each claim goes against the other and either extinguishes it or reduces it." Having contextualised the defence of set-off, in applying it to the facts, it is my considered view, the evidence before me does not state in clear terms how much is due to the 3rd Defendant for air tickets, or how much the Plaintiff paid in respect of the same. As there is uncertainty as to the amount, I Order the Registrar to assess the amount due to the 3rd Defendant for air tickets. [20.0] Loss of profits The third component of the amount claimed by the Defendants is in respect of the loss of profit for 6 years which is pegged at US$1,325,528.26. It is the 2nd Defendant's contention the goods stolen were used for business which was generating profit, thus it is entitled to claim for loss of profit. To substantiate this claim, financial statements for the years 2014, 2015, 2016 and 2017. However, it has already been established that claims in relation to thefts of 2014 are statute barred as such they shall not be taken into account. I appreciate the step taken by the 2nd Defendant in detailing the financial prospectus for the years 2015, 2016 and 2017, which show the revenue and profit in each respective year (pages 171 to 226 of the Defendants bundle of documents). However, I find the 2nd Defendant has not shown what goods [20.1] [20.2] [20.3] J341 Page were stolen and the impact the said goods had on its financial status or growth. A claim for loss of profits must be demonstrated with certainty that such damages have been caused by the breach. This principle has been stated in the case of Phillip Mhango v Dorothy Ngulube & Others (3l, where the Supreme Court in cautioning litigants stated that: " .. . any party claiming a special Joss must prove that Joss with a fair amount of certainty." It goes without saying that estimates of lost profits must be based on objective facts, figures or data from which the amount of the alleged lost profits can be ascertained. At pages 237 and 241 of the Defendants' BOD, it shows other items that were stolen. Page 243 shows payment by the Plaintiff in respect of items listed on page 241 and a further payment was made as shown at page 245. The items listed by the Defendants include office computer, DVD player, internet router, alarm fixing, 3 grill doors and sprinklers. There is no documentary evidence to prove the loss of profit claimed herein. The oral evidence of DW1 and DW2 do not offer any assistance in ascertaining the amount attached to this claim. The items highlighted by the Defendants have not been connected to the financial statements to show their loss caused a loss of profit. In the absence of cogent evidence, the claim for loss of profit fails. The sum total is that the claim for payment of the sum of K40, 189,309.68 fails. In its place, I order the amount payable for loss caused as a result of negligence as per clause 12 of the contract, value of goods stolen within the period not barred by statute shall be assessed by the Registrar. [20.4] [20.5] [20.6] [20.7] [20.8] [20.9] J35 I Page [21.0] Loss of business [21.1] The Defendants counterclaim a sum for the loss of business. However, this claim has not been supported by any form of evidence or facts. The pleadings simply state 'the sum being loss of business'. [21.2] It is trite law that he who alleges must prove as pronounced in the cases of Kunda v Konkola Copper Mines Pie (22l and Wilson Masauso Zulu v Avondale Housing Project Limited 23l_ This principle is so elementary. The Court has had on a ( number of occasions reminded litigants it is their duty to prove their allegations. This requirement extends to instances where a Defendant or opposing party fails to establish a defence. [21.3] From the earlier case of Phillip Mhango v Dorothy Ngulube and Others (3l, in illustrating the point on the need for parties to prove loss, the Supreme Court said: "It is, of course, for any party claiming a special a Joss to prove that loss and to do so with evidence which makes it possible for the court to determine the value of that Joss with a fair amount of certainty. As a general rule, therefore, any shortcomings in proof of a special Joss should react against the claimant. However, we are aware that, in order to do justice, notwithstanding the indifference and laxity of most litigants, the court have frequently been driven into making intelligent and inspired guesses as to the value of special losses on meagre evidence." [21 .4] The Defendants have not stated the sum they are claiming as being due to them for loss of business. It is the duty of litigants to clearly state the issues upon which the court is expected to pronounce itself. This means pleading with clarity what is due to a claiming party and establishing proof for that claim. This claim has not been proved, it therefore fails. J36 I Page [22.0] Interest [22.1] [23.0] [23.1] The Defendants claim interest on the sums due. Section 2 of the Judgments Act allows the award of interest on money judgments. In the premise, I order that the sum found payable on assessment shall attract interest at the short term deposit rate from date of counterclaim to date of Judgment and thereafter at the current bank lending rate as determined by the Bank of Zambia until full payment. Any other relief the court may deem just I am of the considered view, from the circumstances of this case, there is nothing to warrant the grant of any other reliefs to the Defendants. [24.0] Costs [24.1] Due to the partial success of the counterclaim, I award 50% costs to the Defendants to be taxed in default of agreement. [25.0] Disposal On a balance of probabilities, I find the Defendants have partially proved their case to the extent stated as follows: i. ii. iii. iv. v. vi. I decline to award damages for breach of contract; I decline to grant an order for the payment of the sum of the amount outstanding after K40, 189,309.68 being deducting the amount outstanding to the Plaintiff; I grant an Order for the Registrar to assess the amount due to the Defendants for the value of goods stolen within the period not statute barred at K2500.00 for every loss suffered; I grant an Order for the Registrar to assess the amount due to the 3rd Defendant for air tickets issued to the Plaintiff; I decline to award damages for loss of business; Interest on the amount due in (i), (iii) and (iv) shall accrue at the short term deposit rate from date of writ to Judgment J37 I Page and thereafter at the commercial lending rate until full payment; I decline to grant any other relief the Court; I allow 50% of the Defendants costs to be taxed in default of agreement; Leave to appeal is granted. vii. viii. ix. Delivered at Lusaka this 11 th day of July, 2023 IRENE ZEKO MBEWE HIGH COURT JUDGE J38 I Page