BP Zambia PLC v Interland Motors Limited (SCZ 5 of 2001) [2001] ZMSC 7 (12 February 2001)

BP ZAMBIA PLC AND INTERLAND MOTORS LIMITED SUPREME COURT NGULUBE, CJ, CHIRWA AND LATE MUZYAMBA JJS TH NOVEMBER, 2000 AND 13 (SCZ JUDGMENT No. 5/2001) TH FEBRUARY, 2001 Flynote Headnote For the Appellant: M. N. Nchito, of Messers MNB For the Respondent: Mr. C. K. Banda, SC, of Messers Chifumu Banda and Associates _________________________________________________________ Judgment Ngulube, CJ., delivered the judgment of the Court. Although our late brother the Honourable Mr. Justice Muzyamba had indicated before his untimely demise his agreement with the conclusion we reach in this appeal, this judgment may be treated as being by the majority since it was written afterwards. The salient facts of the case may be stated quite briefly. The parties signed a licence agreement under which the respondent (the plaintiff) was licenced to run a service station belonging to the appellant (the defendant) and at which the defendant’s products would be sold to the motoring public. The licence agreement required the plaintiff to purchase and resale stocks of the defendant’s products and to, among other things, meet set minimum targets in terms of volumes or quantities sold (in the agreement called “volumetric targets”). The licence agreement was for st th May 1997 to 30 one year from the 1 June, 1998 and there was a permissive clause that it may be renewed if certain conditions which were set out were met. Apparently, the defendant tried to terminate the agreement after a few months because in December 1997, the plaintiff launched proceedings in the High Court under cause number 1997/HP/2877. In that action (despite this being a licence agreement and not a lease agreement), the plaintiff claimed for a declaration that there was a protected tenancy under the Landlord and Tenant (Business Premises) Act and also for an injunction to restrain the defendant from evicting the plaintiff. That matter came up before Phiri, J, who made the following order---- “UPON hearing both Counsel for the Plaintiff and Defendants and upon Counsel for the Defendants giving undertaking that his client B. P. Zambia P. L. C and its workers, agents and whatsoever shall not evict the Plaintiff Company from the premises known as 6400 Burma Road, Libala, Lusaka and shall not interfere with its June, 1998 when the smooth running of the business on the said premises until 30 current Licence expires, this court hereby discharge the Interim Injunction and costs in the cause.” th In a move obviously calculated to obtain a tactical advantage of sorts and to avoid the consequences of the expiry of the protection given by the order which Phiri, J, had made in February 1998 the plaintiff launched fresh proceedings on 2 June, 1998 under cause number 1998/HP/1201; this time claiming a declaration that the plaintiff was entitled to the renewal of the licence to run the service station and also asking for an injunction to restrain the defendant from evicting the plaintiff until trial of the action. There was a counterclaim in this case for the unpaid price of certain products said to have been sold and delivered apparently not at the request of the plaintiff but at the defendant’s own initiative. Trial of this action took place before Mutale, J, and it is against his decision that this appeal is brought. nd The fresh action prevented the defendant from proceeding under the order of Phiri, J, after the expiry of the licence. In response to an objection by the defendant to this multiplicity of actions, the learned judge distinguished the case at hand from that of DEVELOPMENT BANK OF ZAMBIA AND ANOTHER –v- SUNVEST LTD AND ANOTHER (1995-97) ZR 187 in which this Court said courts should frown upon such multiplicity. At the conclusion of the trial, the learned judge held to the effect that the plaintiff had performed its part of the agreement and was entitled to renewal of the licence. He found that the problem that had arisen was that of a bad personal and working relationship involving the defendant’s retail manager and the plaintiff’s Managing director; the judge holding the view that the retail manager (who granted the licence) did not show that he had the approval of his board of directors to the termination of the licence agreement. He rejected the counterclaim. The judge then ordered renewal of the licence agreement or in the alternative compensation of K20 million in respect of fuel which was in the underground tanks when the defendants uprooted the pumps, no doubt on the strength of the order by Phiri, J. All these formed the basis for the various grounds of appeal. The very first ground of appeal criticizes the award of a judgment in the alternative, that is to say, for either the licence to be renewed or for compensation to be paid. Counsel for the defendant submitted that it was not possible for the parties to force one remedy or the other upon the opponent and that it was wrong for the court below to leave the matter this way. On the other hand, counsel on the other side argued that the judge was not wrong to say that the licence be renewed or compensation be paid and suggested that, rather than come on appeal, the defendant could have applied to the learned trial judge for clarification. We wish to state that there is basically nothing wrong in principle in the award of remedies in the alternative where the one is in default of the other provided that, in the circumstances of the particular case, this does not leave room for further controversy and litigation. In some cases, it is possible to put out one of the two parties to her/his election so that the selected remedy will be at that party’s option while in other cases this would not be workable. The court should have regard to the facts and circumstances disclosed in the individual case. In the case at hand where the parties have even sued each other, the defendant has been trying to terminate the relationship while the plaintiff has tried to keep it going. It is impossible to force unwilling owner of a service station to retain a licence and keep on supplying goods for resale on the basis of a non-consensual contractual relationship to be forced upon one of the parties by the court. This was undoubtedly not a suitable case in which to leave it to the parties to settle for one of the two remedies. This ground succeeds; the plaintiff will only have the compensation awarded in respect of the fuel that was left in the tanks, to be assessed by a deputy registrar if not agreed. In view of the foregoing conclusion on the first ground, there is very little point in dealing at any great length with the reminder of the grounds apart from the one relating to the unsuccessful counterclaim. Thus, the second ground complained about the way the court dismissed the retail manager’s evidence, even describing him as being without the board’s authority in his actions and not representative of the company. The point was well taken that a company can only act through its human agents when Counsel cited our remarks to this effect in ASSOCIATED CHEMICALS LTD –v- HILL ABD DELAMAIN ZAMBIA LTD AND ANOTHER SCZ judgment No. 2 of 1998. As a metaphysical entity or fiction of law which only has legal but no physical existence, a company (though being a separate and distinct legal person from its members or shareholders) can only act through the humans charged with its management and the conduct of its affairs. Mr. Banda quite properly conceded that it was a misdirection for the court to have said in effect that because the retail manager was not the company, what he did could not bind the company. This ground too had to succeed. The third ground alleged a misdirection when the learned trial judge allegedly failed to take heed of the licence agreement which did not have an automatic right to renewal. The learned trial judge in fact found that the plaintiff did not breach the volumetric targets requirement nor was it a breach when once they used a third party’s cheque to buy product, despite protests from the defendant. It was submitted that having been given notice of termination, the agreement ought to have been held to have come to an end. Counsel for the plaintiff’s response was that the judge did not misdirect himself because he was alive to the fact that the licence agreement provided for conditions for renewal. Furthermore, the judge disbelieved the defendant’s evidence of breaches. Mr. Nchito’s reply to this was that the licence agreement not ever having been renewed in fact, it was wrong for the plaintiff to keep rushing to the court and fir business bargains to be conducted by the court instead of the business community themselves. All we can say is that there can be no such thing as an interminable licence agreement. As with any other contract, it can be terminated whether for good cause or for bad cause; whether in keeping with the termination clauses (if any) or even in breach in which event damages would be payable. In this case, there was no evidence that the defendant was in any way in breach when they terminated the agreement. The plaintiff rushed to court in the first action where an order was made which allowed the agreement to run its full term when it expired by effluxion of time. Twenty-eight days before the expiry and the end of the protection ordered by Phiri, J, the plaintiff again launched fresh litigation; prompting the fourth ground of appeal which criticized the court’s refusal to consider the second action to be an abuse of the process of the court. For our part, we are satisfied that, as a general rule, it will be regarded as abuse of process if the same parties relitigate the same subject matter from one action to another or from judge to judge. This will be so especially when the issues would have become res judicata or when they are issues which should have been resolved once and for all by the first as enjoyed by Section 13 of the High Court Act which reads ------- “S.13. In every civil cause or matter which shall come in dependence in the Court, law and equity shall be administered concurrently, and the Court, in the exercise of the jurisdiction vested in it, shall have the power to grant, and shall grant, either absolutely or on such reasonable terms and conditions as shall seem just, all such remedies or reliefs whatsoever, inter locutory or final, to which any of the parties thereto may appear to be entitled in respect of any and every legal or equitable claim or defence properly brought forward by them respectively or which shall appear in such cause or matter, so that, as far as possible, all matters in controversy between the said parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of such matters avoided; and in all matters in which there is any conflict or variance between the rules of equity and the rules of the common law with reference to the same matter; the rules of equity shall prevail.” In terms of the Section and in conformity with the court’s inherent power to prevent abuses of its processes, a party in dispute with another over a particular subject should not be allowed to deploy his grievances piecemeal in scattered litigation and keep on hauling the same opponent over the same matter before various courts. The administration of justice would be brought into disrepute if a party managed to get conflicting decisions or decisions which undermined each other from two or more different judges over the same subject matter. This is what happened here when the defendant who was entitled to possession after the end of June 1998 under Phiri, J’s order ended up being found liable by Mutale, J, to compensate the plaintiff for loss of business when the defendant took such possession and uprooted their pumps. In principle, our decision in the SUNVEST case was not distinguishable. This ground also succeeds. We reverse the findings of liability for loss of business. The only compensation as already stated will be for the petrol left in the tanks. This leaves the fifth ground related to the counterclaim. The evidence before the learned trial judge was hotly contested and having reviewed the same, we are unable to say that the judge had misdirected himself. In sum, the appeal succeeds only to the extent indicated. Costs follow the event.