Chisamba Grain Company Limited v Sasol Fertilizer Zambia (Appeaal No. 193/2003) [2006] ZMSC 45 (24 February 2006)

IN THE SUPREME COURT OF ZAMBIA Appeal No. 193/2003 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: CHISAMBA GRAIN COMPANY LIMITED Appellant AND SASOL FERTILIZER ZAMBIA Respondent Coram: Chirwa, Chitengi and Silomba, JJS. on 28th April, 2005 and 24th February, 2006. For the Appellant : Mr. M. Malila of Messrs Phoenix Partners For the Respondent: Mr. P. H. Yangailo of Messrs P. H. Yangailo & Company JUDGMENT Chitengi, JS, delivered the judgment of the court. Cases ref erred to: - 1. Nchimunya V Michela (1995 - 199_7} ZR 203 2. Joseph Jarmain The Elder V Hopper Pilcher and Henan (1843) 134 ER 1120 3. Morris V Salberg (1889) 22 QBD 614 4. Zambia National Building Society V Legan Equipment Supplies Limited SCZ Appeal No. 79 (2000(Unreported). . J2 - In this appeal, we shall refer to the Appellant as the Plaintiff and the Respondent as the Defendant which is what they were in the High Court. The facts of this case can be briefly stated. A company called Cropex Limited, which has ~ommon shareholders and Directors with the Plaintiff, owed the Defendant, a company dealing with supply and sale of fertilizer, U$ 41,000.00 for fertilizer supplied. The Defendant brought an action against Cropex Limited in the High Court under Cause Number 2002/HP/0315 to recover the US $41,000.00. It appears the Defendant obtained Judgment against Cropex Limited who, according to the evidence, had no farm of its own to carry on farming activities but was usmg the Plaintiffs farm called Farm 636A, Chisamba to carry on its f~ing activities. According to a statement by Mrs. Mary Ann Laungley Spyron, ... the Managing Director of the Plaintiff, Cropex Limited had leased the farm from the Plaintiff and the lease expired on 30th September, 2002. The registered office of Cropex Limited was also at the Plaintiffs farm. Cropex Limited failed to pay the US $41,000.00 judgment sum necessitating the Defe~dant to issue a Writ of fieri faceas against Cropex Limited in order to realize the judgment sum. Bailiffs went to the Plaintiff's farm, which on the documents appeared to the Defendant to be Cropex Limited's place of - J3 - business, and seized three tractors and other items under protestations from some workers of the Plaintiff that the property seized did not belong to Cropex Limited but to the Plaintiff. Before the execution there appears to have been some discussion between Mr. Christos Andrew Spyron one of the Directors of Cropex Limited and PWS in this case, and the Defendant to try to stop the execution but in vain. According to ·Mrs. Mary Ann Langley Spyron, the Plaintiffs advocates failed to secure release of the seized goods. She said it was after proof of ownership in court that the Defendant's advocates allowed them to retrieve the goods. The bailiffs sold some of the seized property to realize their execution fees. On this evidence the learned trial Judge found as a fact that Cropex Limited carried out its business at Farm 636A Chisamba and that the Writ of fieri facias was regularly issued in order for Defendant to recover its debt in the sum of US $41,000,000 from Cropex Limited. After making these findings of fact the learned trial Judge said he was bound by our decision in Nchimunya V Michelof1J where we said that: - "...... where a Writ of Execution is regularly issued and goods of a judgment debtor are seized then the question of - J4 - wrongful execution or seizure does not arise. This is so even where goods of a third person in possession of the judgment debtor are seized in execution thereof '' On strength of the Nchimunya case the learned trial Judge dismissed the Plaintiff's claim artd ordered each party to bear its own costs. Dissatisfied with the Judgment of the court below, the Plaintiff appealed to this court. The Appellant filed a Memorandum of appeal with four grounds but when we heard the appeal the Plaintiff abandoned ground three of appeal. The first ground of appeal is that the Judge completely misunderstood the evidence before him and replaced his own perception with what could have been the evidence of DW 1. In so doing the Judge fell into grave error. The Second ground of appeal is that .. the Judge failed to appreciate that the real issue for d etermination in this case I wa s not whether or not the fifa was regularly issued, but rather whether execution of the Writ of Fifa was levied on the goods of the right party to that cause. The learned trial Judge misapprehended and misapplied the principle that was so clearly laid down by this court in Nchimunya V Miehe lo (1995/1997 ZR 203f1J. - JS - The fourth ground of appeal is that having found that the Plaintiff's goods had been seized in execution process issued against different party, the Judge should have found in favour of the Appellant at least in respect of the goods that were seized from the Plaintiff and later returned to the Appellant in a dam.aged state. Both counsel filed detailed written heads of argument which they augmented with oral submissions. Mr. Malila, learned counsel for the Plaintiff, also relied on his submissions in the court below. The thrust of these submissions is basically the same as Mr. Malila's submissions before us. Mr. Malila's written and oral submissions on ground one are that there was no evidence that the fertiliz.er purchases by Cropex Limited was delivered to Farm 636A, Chisamba as the learned trial Judge observed in his judgment. He said that DW 1 did not in her evidence say that the fertilizer was delivered to farm 636A Chisamba. It was Mr. Malila's submission that although farm 636A at o~e time had been the registered office of Cropex Limited the evidence was that the ownership of the farm vested in the Plaintiff. Further, Mr. Malila submitted that the learned trial Judge ignored evidence that the Plaintiff had documents of title to the tractors and other equipment seized by the bailiffs. - J6 - On ground two Mr. Malila submitted that while the real issue before the learned trial Judge was whether the Writ of fieri facias regularly taken out against Cropex Limited was executed on the rightful party, the learned trial Judge dealt with only the issue of whether the Writ of Fieri Facias taken out against Cropex Limited W?-S regularly issued. It was Mr. Malila's submission that the learned trial Judge had to find the answer to the question whether the Writ of fiere facias was executed on the rightful party, but he did not. He said instead the learned trial based his judgment on the Nchimunya casef1J which is not applicable to this case because the goods seized were not in possession of the judgment debtor as was in the Nchimunya casef1J. Mr. Malila submitted that a litigant who issues court process and directs bailiffs to a wrong address or party is liable to the party who suffers damage as a result. As authority for this statement, Mr. Malila cited the cases of Joseph Jarmain The Elder V Hopper Pilcher and Henanf2J, Morris V Salberg<3 J and Zambia National Building Society V Legan Equipment Supplies Limitedf4J. He ended on this ground of appeal by saying that if the learned trial ,• Judge had correctly identified the issues he would have appreciated these authorities on wrongful execution of a writ of fieri facias which is otherwise regularly issued. In respect of ground four the sum and substance of Mr. Malila's submissions is that there was ample evidence that the - J7 - Plaintiffs goods and not Cropex Limited's goods were seized in execution and that the seizure was wrongful. In view of this, Mr. Malila submitted, the learned trial Judge should have found the Defendant liable in damages for trespass to goods. Like Mr. Malila, Mr. Yangailo's 'written heads of argument and oral submission are basically the same. On ground one, Mr. Yangailo submitted that the issue of where the fertilizer was delivered was not material because Cropex Limited admitted collecting fertilizer from the Defendant on credit. It was Mr. Yangailo's submission that the real issue is whether the endorsement on the writ of fieri facias stated the proper and correct address of Cropex Limited. He said that the learned trial Judge was on firm ground when he said that Cropex Limited carried on business at Farm 636A Chisamba. He said this is supported by sufficient and compelling evidence. Mr. Yangailo gave as an example, the records at the Companies and Patents Office which give the registered office of Cropex Limited as Farm 636A, Chisamba, the address endorsed on the writ of fieri facieas. Mr. Y angailo pointed out that PWS, the Managing Director of Cropex Limited testified that Cropex Limited used to car:ry on business at Farm 636A Chisamba some ten years ago but he did not know whether Cropex Limited changed its registered office. Further, Mr. Yangailo pointed - J8 - out that PW6 1 another Managing Director of Cropex Limited and shareholder in the Plaintiff, said Farm 636A Chisamba was the registered office of Cropex Limited up to the time it was put under Receivership sometime in 2002. He pointed out that this witness further said that he informed the Defendant's representative that the only way Cropex Limited could be able to repay the debt would be by continuing to grow crops and the threatened legal action by Sasol could only be , able to ensure that Cropex Limited would not be able to continue farming. It was Mr. Y angailo's submissions that these statements do not expressly state where Cropex Limited was farming but lead to the only reasonable and irresistible conclusion that Cropex Limited was operating at Chisamba Farm. Mr. Y angailo also pointed out that the Plaintiffs witnesses did not mention any other farm or plac_e at which Cropex Limited was farming. It was Mr. Yangailo's submission that while it is not in dispute that the Plaintiff owns Farm 636A Chisamba, the evidence clearly shows that the Plaintiff and Cropex Limited were operating from the same farm. He said that it is not a legal requirement that for one to use a place as a registered office one must also own it. Mr. Y angailo ended on this ground by emphasizing that the learned trial Judge was on firm ground - ]9 - when h e made a finding that Cropex Limited was carrying out its business at Farm 636A Chisamba. On ground two, Mr. Yangailo submitted that for a party to be liable for wrongful seizure, the directions in the endorsement n the Writ of fieri facias must mislead the Sheriff into seizing the wrong person's goods. In support of this proposition Mr. Yangailo cited the Morris case<3J and Joseph Jarman The · Elder Case(2J which Mr. Malila also relied upon. It was Mr. Yangailo's submission that the Defendant in the Morris case<31 was liable because the wrong name and the wrong address were endorsed on the writ of fieri facias. With regard to the Joseph Jarman The Elder case<2 J Mr. Yangailo said the basis for liability was that wrong and misleading directions were endorsed on the writ. According to Mr-. Yangailo these cases are not a pplicable to the present case. It was Mr. Y angailo 's contention that the Nchimunya case<1J is applicable to the facts of this case. He said in this case the proper address of Cropex Limited was given by Farm 636A Chisamba where the Plaintiff was also situated. He said this being the case, the Plaintiffs could not be in a position to know which party was in possession of what goods. It was Mr. Yangailo's submission that the writ of fieri facias having been executed at Farm 636A where Cropex Limited was carrying on business the action for wrongful seizure cannot be -JlO- sustained. According to Mr. Y angailo, the learned trial Judge was, therefore, on firm ground when he held that a writ of fieri facias was regularly issued. At the end of this ground Mr. Y angailo offered legal advice to the Plaintiff on how they can recover their loss. We do not intend to say more on the submissions giving legal advice to the Plaintiff. Mr. Yangailo's submissions on ground four are basically a repeat of the submissions on ground two. We have carefully considered the evidence that was before the learned trial Judge, the submissions of counsel and the judgment appealed against. ... The complaint in ground one is that the learned trial Judge fell into error when he found as a fact that Cropex Limited carried on business at Farm 636A Chisamba. ' We have considered the evidence on this issue and the submissions of counsel and after this consideration we find ourselves unable to accept Mr. Malila's submission that the learned trial Judge erred when he found that Cropex Limited carried on its business at Farm 636A Chisamba. Mr. Malila raised issues of ownership of Farm 636A. We agree, just as - Jl l - Mr. Yangailo conceded, that Fann 636A Chisamba belongs to the Plaintiff. But ownership of Farm 636A Chisamba is not the critical issue in this case. There is also a complaint about the finding by the learned trial Judge that the fertilizer was delivered to Farm 636A Chisamba. We agree with Mr. Malila that there was no evidence to support such a finding by the learned trial Judge. But, as Mr. Yangailo rightly submitted, that also is not a critical issue in this case. The critical issue is whether Cropex Limited got fertilizer from the Defendant on credit facility. The fact that Cropex Limited got fertilizer from the Defendant credit facility is beyond dispute. Talcing and considering all the evidence together it is clear to us that Cropex Limited and the Plaintiffs were companies run by the same persons. And going by the names of the Directors and Shareholders we have been driven to the conclusion that the two are family businesses. Indeed, two of the directors live at Farm 636A Chisamba. It is also clear to us that Cropex ' Limited was running its offices from Farm 636A Chisamba. There is no evidence whatever to suggest that Cropex Limited was running its business somewhere else, although its registered office was at Farm 636A Chisamba. We cannot, therefore, fault the learned trial Judge when he found that Cropex Limited was carrying on its business from Farm 636A Chisamba. As Mr. Yangailo submitted 1 this finding was amply - Jl2 - supported by evidence. In the event, ground one of appeal fails. We now deal with ground two. We agree that the issue was not whether the writ of fieri facias issued against Cropex Limited was regularly issued. Nor was the issue whether the Writ of fieri facias issued against Cropex Limited was executed on the rightful party, as Mr. Malila argued. The critical issue is whether the execution levied on the goods of the Plaintiff was wrongful as pleaded by the Plaintiff. Issues like the party on which execution was levied are matters to be taken in consideration in deciding whether the execution was wrongful. Both counsel have addressed us at length on this ground of appeal. With hindsight it is easy to argue wisely. But in deciding this case we have to look at the matter as it stood on the day of execution. As we have already said, Cropex Limited was operating from Farm 636A Chisamba where the Plaintiff also was. Cropex Limited was canying on the business of farming which goes with implements like the ones seized and fertilizer. When the Defendant threatened legal action the Managing Director of Cropex Limited pleaded with the Defendant not to proceed with the action so that Cropex Limited could continue to farm to raise money to pay the debt. These pleas were ignored by the Defendant who -113 - instructed bailiffs to levy execution. The writ of execution was regularly issued out of the High Court, properly directed at Cropex Limited at Farm 636A Chisamba where Cropex Limited carried on business and also had its registered office and executed at Farm 636A Chisamba. In the circumstances, the cases cited by Mr. Malila do not support the Plaintiffs case because the facts of those cases do not say that the writs of fieri facies were directed at the correct party at the correct place like in this case. Rather, as Mr. Y angailo submitted the facts of this case are similar to those of the Nchimunya casef1J subject to what we say below. In the Nchimunya casef 11 we laid down the principle that where a writ of execution was r egularly issued and goods of a judgment debtor are seized then the question of wrongful execution or seizure does not arise. The reference to goods of a third party which are in possession of a judgment debtor was an extension of the general principl~. But this extension was not exhaustive because there are many situations where goods of a third party which are not in possession of a judgment debtor may be seized in execution without the execution necessarily being wrongful. In this case, counsel have argued before us to show that Cropex Limited was or was not in possession. We find the - Jl4 - issue whether Cropex was in possession of the implements seized not a critical issue to the determination of this appeal and we cannot rest our judgment on it. We have already stated the state of affairs at the time the bailiffs went to the Plaintiff's farm. In our view, this is a case where a party lives with a judgment debtor operating from his premises and when I the bailiffs come they levy execution on the party's property under the mistaken belief that the property belongs to the party. In this case the Plaintiff in fact put the Defendant and anybody dealing with Cropex Limited in a position they could think Cropex Limited owned the equipment seized. The thought by the bailiffs that the equipment belonged to Cropex Limited brings this particular case within the principle in the Nchimunya Casef1J. Of course, there is evidence that some workers of the Plaintiff told the bailiffs tji~t the property belonged to the Plaintiff and not Cropex Limited. The simple answer to that is that no bailiff would halt execution on mere protestation of a person. In our view, the execution was not wrongful and, therefore, the Plaintiffs action was not maintainable. Having reached this conclusion we do not find it necessary to consider the fourth ground of appeal and matters relating to interpleading. - J15 - We find no merit in this appeal and we dismiss it. The Defendant will have his costs in this court to be taxed in default of agreement . .................. L .......................... . D. K. CHIRWA SUPREME COURT JUDGE GI JUDGE ...••......•......................................... S. S. SILOMBA SUPREME COURT JUDµE I I