Graphic Press Ltd v Zambia Airways Corporation Ltd and Anors (Appeal 16 of 1990) [1991] ZMSC 42 (18 February 1991)

IN THE SUPRSt COURT OF ZWBIA HOLDEN AT LUSAKA (Civil Jurisdiction) Appeal No. 16 of 1990 GRAPHIC PRESS LIMITED Appellant and '■ ■■ ■ ■ ZAM3IA AIRMANS CORPORATION LTD. 1st Respondent KENPRESS LIMITED 2nd fespcnfent ' CORAM: Ngulube, D. C. J., ^Gardner, AJ. S., and:Chaila, J. S.» 7th November, 1990 and 18th February, 1991. L. P. Mwanawasa of Mwanawasa and Co., for the appellant■ A. G. Kinrariwara, Acting Director of Legal Services Corporation for ; the 1st Respondent • .■ ■' ■ ■ No appearance on behalf of the 2nd Respondent ’ • JUDGMENT. ’• ? << < Gardner, AJ. S., delivered the judgment of the court..... . This is an appeal from a dismissal of a claim in the High Court for payment .for work done. '. - . ' The facts of this case are that the first respondent gave a purchase order to the second respondent for the printing and supply of baggage tags according to a sample supplied by the first respondent. The second respondent'requested the appellant to. fulfil the order, and, accordingly the appellant printed some, of the tags before delivering the goods. The appellant in its statement of claim alleged that the appellant’s managing director approached the first respondent's accountant at the Ndola office of the.first respondent which is the national airline of the Republic. The director asked for a new order direct to the appellant so that payment would be made directly to the appellant. The director was told that the goods must be delivered to Ndola airport as they were urgently requiredand the director was informed, according to'his evidence, / that so long as the price was the same the goods would be accepted directly from the appellant. The appellant accordingly delivered ■ * : ,../J2 ... : J2 : the first consignment of baggage tags to Ndola airport on the 8th of • October, 1986, and two days later the appellant's director received a telephone call from the respondent to the effect that the Initials on the tags for^aba Bay and Lubumbashi were wrong. .. Although the initials were In accordance with the sample supplied by the first resP°ndent, the appellant made the necessary corrections at Ms own cost and supplied fresh tags as requested. The tags for other ■ i. destinations were accepted as were the corrected tags. When supplying the tags each consignment was accompanied by a delivery note, indicating that the tags were delivered on behalf of the second respondent. In his evidence the appellant's director said that this was so because he had not yet received verbal confirmation of the direct order to the appellant which had been orally agreed by the first respondent's accountant.. On the 20th”of October, the appellant delivered a statement of account for K23.335-80 to the second.respondent . On the 25th of November, 1986, the first respondent wrote a letter to \ .; the appellant purporting to withdraw the original purchase order on ' the grounds , . ■, / ,U’h ' . ;; (a) (b) • that delivay had not been within four days as agreed, ■ that the tags did not have a slit at the back for peeling off __ u ■ and . v ■ (c) that the rurbers an the tags were not in sequence. ; / • . " The letter then went on to say that the. foregoing reasons . •,! .‘I- -..'I. ‘ • ■ coupled with some mishandling and the transfer of the contract from • one company to another left doubt and' led to a lot Of mistrust.. . The first respondent called one witness namely. Mr*. Kanchaya . the general stores controller to confirm that .he had initiated the •; • first purchase order to the second respondent. This witness said he had had no dealings with the appellant and that he had'only seen one packet of about 500 tags for various destinations which were wrongly printed. In cross-examination .he suggested that the delivery notes ■ with the signature of one Kaleya as recipient were fakes because they had no Zambia Airways stamp. He further said that he did, not . .. know that the goods had been delivered to Ndola airport because they .,, were urgently required. .. ; There was no appearance at the trial on behalf of the second respondent. • /J3, The learned trial judge held that there was. no privity of contract between the appellant and the first respondent. He further said that the second respondent had never been served with a statement claim and he therefore struck out the case against the second respondent In this respect our attention was drawn to an affidavit in support of an application to enter judgment against the second respondent in default of defence, sworn on the 18th of October, 1988 which was apparently not drawn to the attention of the trial judge when he . heard the adjourned hearing of the case on the 2nd November, 1988, The appellant appeals against the finding of the learned trial judge on the grounds that there was in fact a new relationship between the appellant and the respondent whereby the two parties dealt directly with each''other and therefore there was the necessary privity of the contract. The first respondent opposes the>appeal on the grounds that all the evidence indicated that the appellant was acting only as a sub-contractor for the second respondent and that in any event the goods supplied were unsatisfactory'and, were properly rejected. As to the question of whether or not there was a novation by the direct dealing between the director of the appellant and the Ndola accountant of the first respondent, the essence of novation is that the original contract should have been extinguished and replaced by another and of course for that to occur both parties to the original contract must agree. On the evidence before the trial \ court we have no difficulty inffddlng that the second respondent wished to transfer.'the whole of the contract to the.appellant. We note that the evidence of the first respondent’s witness was to the effect that only he could enter into contracts, but this we regard as a domestic restriction relating to the internal affairs of the first respondent and we have no doubt, that the accountant of the first respondent was held out to have and in. fact had, authority to enter directly into a contract with the appellant in order to make • the first respondent liable to pay monies due to the appellant. There is no doubt that after this arrangment the two parties had v direct dealings with each other. That is to say, because of the urgency on the matter the appellants were instructed to.deliver to Ndola airport, when some of the tags needed to have . Initials altered , the appellant was Instructed directly and did in fact make the alterations and the altered tickets were accepted / ...r ' : J4 : direct from the appellant without complaint. It is appreciated that ' all these communications between the appellant and the first respondent could have taken place even if the appellant was no more than a sub-contractor for the second respondent. However, the evidence of the appellant's director that he had approached the first respondent's accountant in Ndola with a request that there should be a direct order to the appellant and the acquiescence by the accountant, as set out in the uncontradicted evidence of the director, indicated that there was a novation of the contract. We do not consider that the indication on the delivery notes that the goods were delivered on behalf of the second respondent weakens the appellant's case, having regard to the director's explanation that at the time he was making those delivery notes he was awaiting written confirmation of the verbal agreement between himself and the accountant. Whatever the director may have thought was required, the novation did in fact take place by the verbal agreement between the director and the accountant and there was no need for a written confirmation. • ■ . # » • For the reasons we have given we, therefore, find, that there was a novation of the contract with ' the consent of the parties and there was in consequence a direct contract between the appellant and the first respondent. We now turn to the question of the, attempted withdrawal of the purchase order by the first respondent's letter dated 25th November, 1986. As to the complaint about late delivery, we. nbte that|the time of the discussion between the appellant's director and the first respondent's accountant in October the original time for the delivery had already expired)and immediately after that discussion on the 7th of October deliveries were commenced and were completed by the 20th of October, 1988, which completion included ; the correction of the mistakes on some of the tickets. We have no doubt tiiat^y the time the letter dated the 25th of November,’1988 • had been written the goods had been delivered and, subject to what we have to say hereafter, accepted, so that the condition as to time if any was waived. As to the complaint that the tags did not have the appropriate slit at the back the evidence was that at the time of the complaint about the worn^ printing of the initials on the tags no complaint of the omission of the slit was pointed out to the respondent. In his evidence the appellant's director demonstrated with samples in court that the tags which were printed had what Is known a crack back and that, on pulling, part of the tag came off, , : J5 ; which was gummed and ready for use. As to the complaint that a number of tickets were not in sequence the same director in his evidence pointed out that serial numbers were printed mechanically and It was incorrect to say that the printing was not in correct sequence. Again this witness pointed that no tags had been rejected because of incorrect printing of numbers. With regard to the whole question of the alleged rejection of the goods, it is noted that the first respondent's witness himself said that he only saw a packet of about 500 tags for various destination which he said were wrongly printed. This was a very small proportion of the total of over 50,000 supplied. According to the delivery notes, 4,000 in respect of Kasaba Bay and 2,000 in respect of Lubumbashi ■ were rejected and reprinted. This witness could not give evidence about the bulk of the consignment because he never saw the rest of ' the tags. In any event we should have thought that where there was a complaint that goods did not comply with a sample this should have ' been proved by exhibits in court. In our view of the evidence the appellant did in fact deliver the number of tags for which payment is claimed, and where there was any cause for complaint the defects were rectified at no cost to the respondent. . For the reasons which we have given the appeal is allowed and judgment is entered against the first respondent in the sum of. K23,335-89 with Interest at the rate of 12% from the 20th of October, 1986 until the date'of this judgment. We do not intend to Interfere with the order of the court below striking out the claim against the second respondent except to make an order of clarification that the costs referred to as being payable by the appellant shall be limited to the costs up to and including the receipt and perusal of the statement claim. Costs in this court and in the court below to the appellant. .3? •V-. d; M. M. S. W. Ngulube DEPUTY CHIEF JUSTICE B. T. Gardner ACTING SUPREME COURT JUDGE ; M. S. Chaila SUPREME COURT JUDGE