Joseph Chipeta v Divine Cargo Services Limited and Ors (Appeal No.85/2022) [2024] ZMCA 125 (25 January 2024)

IN THE COURT OF APPEAL OF ZAMBIA AppealNo.85/2022 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: JOSEPH CHIPETA AND 7 ~ I<\ N 2024 DIVINE CARGO SERVICES LIMITED 1 ST RESPONDENT EDWARD SIMWINGA DAVID MWIINGA 2ND RESPONDENT 3RD RESPONDENT Coram: Chashi, Makungu and Sichinga, JJA on 17th January, 2024 and 25th January, 2024 For the Appellant: Mr. M. Chitundu of Messrs Barnaby Chitundu & Khunga Advocates For the 1st Respondent: Ms. M. Kumwenda of Messrs Ventus Legal Practitioners For the 2 nd Respondent: No Appearance For the 3,d Respondent: No Appearance JUDGMENT Sichinga, JA, delivered the Judgment of the Court. Cases referred to: 1. Rinford Habwanda v Zambian Breweries (2012) ZR 252 2. Zambia Bata Shoe Company Limited v Vin-Mas Limited SCZ judgment No. 4 of 1994 3. Nkhata and Others v the Attorney-General (1966) ZR 124 .., 4. Lt. Gen. Geojago Robert Musengule and Amon Sibande v The People HPA/ 16 of 2009 5. Royal British Bank v Turquand (1856) 6 E & B 327 6. Printing and Numerical Registered Company v Simpson (1875) 19 Eq 7. Friday Mwamba v Sylvester Nthenge and Others SCZ Judgment No. 5 of2013 8. Rudnap (Zambia) Limited v Spyron Entreprises Limited (1976) ZR 326 9. Cavmont Merchant Bank Limited v Agricultural Development Company Limited SCZ Judgment No. 12 of 2001 10. Augustine Kapembwa v Danny Maimbolwa and The Attorney General (1981)ZR127 11. 12. The Attorney-General v Marcus Kampumba Achiume (1983) ZR 1 Credit Lyonnais Bank Nederland NV v Export Credits Guarantee Department (2000) 1 AC 486 13. The Attorney-General v Kakoma (1975) ZR 216 Other works referred to: 1. Ewan McKendrick's Contract law: Text, Cases and Materials, 9th Edition, Oxford University Press 1.0 Introduction 1.1 Joseph Chipeta, the appellant who was the plaintiff in the court below, has appealed against the decision of Mr. Justice Charles Zulu which decided that the plaintiff failed to adduce evidence that there was a contractual relationship with the 1st defendant to clear his motor vehicle. The decision was rendered at the Lusaka High Court on 1st February, 2022. J2 1.2 The issues in this appeal are whether the lower court arrived at correct findings upon evaluation of the evidence and appropriately held that the 1st defendant was not vicariously liable for the actions of its alleged employee. 2.0 Background 2.1 In narrating the background, we shall refer to the appellant as the plaintiff. The 1st respondent, Divine Cargo Services Limited, 2 nd respondent, Edward Simwinga and 3 rd respondent, David Mwiinga are referred to as 1st defendant, 2 nd defendant and 3rd defendant respectively, as they were in the court below. 2.2 As deciphered from the record, in June, 2012, the plaintiff purchased a Toyota Mark X motor vehicle from Be Forward Company Limited for a sum of US$ 5,993.00. He allegedly engaged the 1st defendant company through its employee, one Collins Simukoko to provide customs and clearing services for the plaintiffs motor vehicle. After the vehicle was cleared, the 1st defendant purportedly without the plaintiffs authority, consent and knowledge assigned its employee, one Edward Simwinga, the 2 nd defendant to deliver the vehicle from Nakonde border to Lusaka. The J3 plaintiff alleged that his authorized agent to collect the vehicle was one Teddy Chipeta. 2.3 Edward Simwinga drove the said motor vehicle and was involved in an accident which caused extensive damage to the motor vehicle, rendering it a write off. Following some discussions by the parties, Collins Simukoko took personal responsibility for the damaged motor vehicle and replaced it in 2016. 2.4 The plaintiff alleged that the 1st defendant was vicariously liable for the actions of its employee who drove the motor vehicle in the course of his duties. He took out an action against the 1st defendant claiming the following: i) An Order for the 1st defendant to pay the total replacement value of the motor vehicle in the sum of US$5,993.00; ii) An Order for the 1st defendant to repay the duty paid on the motor vehicle in the sum of K21, 194,299.00; iii) An Order for the repayment by the 1st defendant for the cost to transport the motor vehicle from Dar-es-salaam to Nakonde in the sum of US$600; iv) An Order for the 1st defendant to pay the sum of K3,500,000.00 being the amount used by the plaintiff's agent to travel from Lusaka to Nakonde and back to collect the motor vehicle inclusive of lodging and meals; v) The defendant to pay the profit lost by the plaintiff in the sum of K20,000,000.00 arising from the 1 st defendant's negligence; vi) Any other relief the Court deems fit under the given circumstances; J4 vii) Interest on the amounts due and payable to the plaintiff; and viii) Costs of and incidental to the action herein. 2.5 The 1st respondent, Divine Cargo Services Limited, filed its amended defence on 17th February, 2017. It admitted that the said Collins Simukoko is its employee, but denied that it agreed to provide customs clearing and forwarding services to the plaintiff. That the said Collins Simukoko without the knowledge of the 1st defendant undertook to provide customs clearance only as a private job, at the instruction of one David Mwiinga, the 3 rd defendant, who was the plaintiffs agent. It was alleged that the said Mwiinga caused the release of the vehicle to the plaintiff's designate, Edward Simwinga, for the forwarding of the vehicle. The 1st defendant denied all liability caused to the plaintiff's vehicle. 2.6 The 2nd and 3 rd defendants did not file any defences so far as the record before us reveals. 3.0 Decision of the High Court 3. 1 The learned trial Judge found that the negligence attributed to Edward Simwinga for driving the plaintiff's car could not be transferred to the 1st defendant because he was not an employee of the 1st defendant. All claims pursued against J5 the 1st defendant having failed, the lower court found the joining of the 2nd and 3rd defendants to the suit redundant because there was no legal basis for the 1st defendant to be indemnified by them. 4.0 Appeal before this Court 4.1 Displeased with the Judgment, the plaintiff appealed to this Court advancing the following grounds of appeal: i} The learned trial Judge erred in law and fact when he held that there was no contractual agreement between the appellant and the 1st respondent for the latter to clear the farmer's motor vehicle which holding is contrary to the documentary evidence on the court's record; ii} The Honourable Judge in the court below was wrong in both law and fact when he found that the clearing of the appellant's motor vehicle was secretly done by Collins Simukoko, an employee of the 1st respondent ant that the appellant was privy to the same (secret arrangement} when there was no evidence to support such a holding and if anything, the evidence on record was to the contrary; iii)The Court below misdirected itself both in law and fact when it held that one Collins Simukoko repaired/replaced the appellant's motor vehicle because the clearing of the motor vehicle was a personal arrangement which findings are at variance with the evidence on record; and iv) The Honourable Judge in the Court below erred both in law and in fact when he made a finding that Edward Simwinga, the driver who damaged the appellant's motor vehicle was not an employee of the 1st respondent and that even if he was, J6 liability of the damaged motor vehicle could not be absorbed by the 1st respondent as it was a private job when the evidence on record was to the contrary. 5.0 Appellant's arguments 5.1 At the hearing, Mr. Chitundu, counsel for the appellant relied on the appellant's heads of argument filed on 29 th April, 2022. The submissions contain a detailed background of the matter and the testimonies of the witnesses which is sufficiently captured in the introductory part of this judgment. 5.2 In support of the first ground of appeal, we are referred to the case of Rinford Habwanda v Zambian Breweries1 where the Supreme Court held that a valid contract requires an agreement, an intention to create legal relations and consideration. It was argued that the 1st respondent provided an invitation to treat being the business of providing customs clearance and forwarding services and the appellant requested to use the services provided. That the 1st respondent agreed to the offer at a fee, which was paid and the services provided. The appellant contends that there was a binding contract between the 1st respondent and himself. J7 5.3 We were urged to reverse the lower court's finding and hold that there was indeed a contract between the said parties. 5.4 In support of the second ground of appeal, the appellant challenged the basis upon which the trial Judge found that the clearing of the appellant's motor vehicle by the 1st respondent was secretly done by Collins Simukoko as a private job to which the appellant was privy and to which the 1st respondent cannot be held liable. It was argued that the appellant paid for the service provided by the 1st respondent and it was the 1st respondent which issued him a receipt in its name. We were referred to page 37 of the record of appeal. In support of this submission we were referred to the case of Zambia Bata Shoe Company Limited v Vin-Mas Limited2 where the Supreme Court in addressing the relationship of a client and institution held: "The rule in Royal British bank v Turquand which provided that third parties who had dealings with the company need not inquire into the regularity of the indoor management but could assume that its requirements had been complied with." 5.5 It was argued that the appellant dealt with Collins Simukoko as an employee of the 1st respondent and that the issue of illegally using the 1st respondent's Zambia Revenue JS -- Authority platform to clear the motor vehicle does not affect the appellant as that is an internal issue. That the same logic applies to the acts of Edward Simwinga who caused the accident. That Simwinga was an employee of the 1st respondent, and whether he was a casual worker or not a driver was none of the appellant's concern. It was submitted that the 1st respondent was responsible for his actions as it availed him the motor vehicle which was in its control. 5.6 In support of the third ground of appeal, we were referred to the case of Nkhata and Others v The Attorney-General3, regarding when an appellate court can reverse findings of fact of a trial Judge. It was submitted that the finding by the trial Judge that Collins Simukoko repaired and replaced the appellant's motor vehicle because it was a personal arrangement was not supported by the evidence on record. It was contended that Collins Simukoko replaced the vehicle because he had personally sold it after the appellant declined to collect it after the accident. 5.7 The fourth ground is essentially attacking the finding that Edward Simwinga, the driver at the time of the accident, was not an employee of the 1st respondent, and that even if J9 he was, liability of the damaged vehicle could not be absorbed by the 1st respondent as it was a private job, because it was contrary to the evidence on record. In support of this ground, we were urged to consider the testimony of PW1 and the documentary evidence at pages 39 to 40 and 77 to 79 of the record of appeal. The appellant further relied on the case of Lt. Gen. Geojago Robert Musengule and Amon Sibande v The People4 wherein the Supreme Court held that documentary evidence has more weight and by far outweighs oral evidence. We were urged to set aside the finding of the court below. The case of Nkhata and Others v The Attorney-General referred to. 5.8 In conclusion, it was submitted that the 1st respondent was vicariously liable for the misdeeds/actions of its employees. The appellant has urged the Court to award him damages of K20, 000.00 which would have been the purported profit he would have made but for the accident occasioned to his motor vehicle. The appellant abandoned the claim for the replacement of the vehicle as Collins Simukoko replaced it. JlO 6.0 1st Respondent's arguments 6.1 The 1st respondent filed its heads of argument on 3rct June, 2022. The 1st respondent equally filed detailed submissions covering the background and the evidence at trial. Ms. Kumwenda, learned counsel for the 1st respondent, relied on the filed submissions and urged the Court to dismiss the appeal with costs. 6.2 In response to the first and second grounds of appeal, the 1st respondent submitted that: the learned trial Judge was on firm ground when he held that there was no contractual relationship between the appellant and the 1st respondent for the latter to clear the farmer's motor vehicle which holding is in keeping with documentary evidence on record; and that the learned Judge correctly found that Collins Simukoko secretly cleared the motor vehicle to which the appellant was privy to the same arrangement. 6.3 It was submitted that Collins Simukoko assumed the position of an agent as he lacked the authority to bind his principal in a transaction made without the authority of the principal, in a bid to make a profit. The 1st respondent stated that it was alive to the principles espoused in the Jll case of Royal British Bank v Turquand5 to the effect that third parties dealing with a company need not inquire into its regulatory indoor management but could assume its requirements have been complied with. However, we were referred to consider the exceptions to the Turquand case as held by the House of Lords in the case of Mahogany v East Holyford Mining Company6 where it was stated that: " ... each outsider contracting with a company in good faith is entitled to assume that the internal requirements and procedures have been complied with. The company will consequently be bound by the contract even if the internal requirements and procedures have not been complied with. The exceptions here are: if the outsider was aware of the fact that the internal requirements and procedures have not been complied with (acted in bad faith); or if the circumstances under which the contract was concluded on behalf of the company were suspicious." 6.4 It was submitted that the appellant was aware that the said transaction was suspicious. We were referred to his testimony at page 230 of the record of appeal, and further at page 229 of the record of appeal to show that he admitted that there was no documentary evidence that a contract existed between the parties. J12 6.5 We were referred to the case of Printing and Numerical Registered Company v Simpson6 and the learned authors of Evan McKendrick's Contract law 1 on the freedom and sanctity of contract. That the principle of sanctity of contract was espoused by the Supreme Court in the case of Friday Mwamba v Sylvester Nthenge and Others7 where it stated that: " ... one can therefore see that where eligible persons voluntarily and unanimously enter into a contract, the contract will be personally binding and will be honoured by the courts except where there is a legal impediment ... " 6.6 It was submitted that the legal impediment in casu was premised on want of authority owing to the fact that the said contract was allegedly entered into by a person who lacked eligibility to contract within the meaning espoused in the Sylvester Nthenge case as he acted on a frolic of his own. 6. 7 In the event that the Court holds that there was an oral contract, it was submitted that such an agreement could not have bound the 1st respondent for want of freedom of contract. It was argued that no legal rights and obligations could have arisen from the oral agreement as there was no valid contract to begin with. 6.8 It was further submitted that reference to a receipt at page 37 of the record of appeal by the appellant is an attempt to mislead the Court because the same was not before the lower court as demonstrated by PW 1 's testimony at paragraph 1 to 5 of the 230 of the record of appeal. 6.9 To buttress the submission on agency, we were referred to the case of Rudnap (Zambia) Limited v Spyron Entreprises Limited8 where the Supreme Court stated the following: "When a contract is made with an alleged agent of a company, the onus is on the claimant to prove that the agreement was made with an employee or agent of that company who was held out to be authorized to enter into such an agreement." 6.10 And 1n summing up liability relating to an unauthorized acts of an agent, the case of Cavmont Merchant Bank Limited v Agricultural Development Company Limited9 was referred to where the Supreme Court stated as follows: "Indeed, the law on agency is very clear. Where an agent is the contracting party, he will be held personally liable even if he names his principal." 6.11 It was submitted that the appellant failed to prove his claims in the court below as the person to sue was Collins Simukoko, who took a positive step by replacing the subject J14 property. It was contended that grounds one and two must fail by reason of damnum sine injuria (damage without injury, without infringement of any legal right) with respect to the 1st respondent. 6.12 With respect to grounds three and four, it was advanced that the same are grounded in findings of fact as determined by the trial court. The Court was urged to consider the cases of Augustine Kapembwa v Danny Maimbolwa and The Attorney-General10 and Attorney-General v Marcus Kampumba Achiume11 on when an appellate court will reverse findings of fact made by a trial Judge. 6.13 On whether the doctrine of vicarious liability had been established, reliance was placed on the case of Credit Lyonnais Bank Nederland NV v Export Credits Guarantee Department12 where the House of Lords held: " ... an employer has no liability in tort for his employee's acts, done in the course of employment to assist in the fraudulent scheme devised by its employee and a third person. The mere fact that his employment provided the employee with the opportunity to facilitate fraud was not sufficient to render an employer vicariously liable." 6.14 It was submitted that it was an undisputed fact that the mastermind behind the transaction in casu was Collins JlS Simukoko, who was an employee of the 1st respondent at the material time. That it was an undisputed finding of fact that the 2 nd respondent was between 2008 and 2010 retained as a casual worker under the logistics department as seen from DWl's testimony at page 235 of the record of appeal. 6.15 It was argued that the appellant, by his own admission, at paragraph 10 of page 230 of the record of appeal testified that he had no proof that the 2 nd respondent was an employee of the 1st respondent at the material time. 6.16 It was further contended that the said Collins Simukoko assumed full responsibility of the matter as he proceeded to replace the appellant's vehicle. The 1st respondent supported the findings of the trial court. We were urged to dismiss grounds three and four for being devoid of merit. 6.17 In conclusion, it was submitted that the appeal 1s misplaced in its entirety as the appellant was unsuccessful in proving his claims in the court below. 6.18 We were urged to uphold the decision of the court below and dismiss the appeal with costs. J16 7 .0 The 2 nd Respondent's submissions 7 .1 The 2nd respondent neither filed any heads of argument nor appear at the hearing. 8.0 The 3 rd Respondent's submissions 8.1 The 3 rd respondent did not file any heads of argument. He equally did not appear at the hearing. 9.0 Considerations and decision of this Court 9.1 We have carefully considered the record of appeal together with the arguments for the appellant and 1st respondent. 9.2 At the centre of this appeal are two issues, as highlighted by the grounds of appeal. The first issue is whether or not the appellant entered into a contract with the 1st respondent through its employee to customs clear the farmer's motor vehicle and forward it to him. The second is whether or not the learned trial Judge made findings inconsistent with the evidence on record. We shall address each ground separately. 9.3 With respect to ground one, the appellant contended that there was a contract between the appellant and the 1st respondent. The learned trial Judge based his decision that there was no contractual agreement between the appellant and the 1st respondent on the evidence adduced at trial. In his examination in chief, the appellant asserted that he had a contract with the 1st respondent. Under cross-examination from lines 11 to 15 at page 229 of the record of appeal, the appellant stated that he did not have proof of any payment he made to the 1st respondent. He had no documentary proof to assert his claim that he entered into an agreement with the 1st respondent. 9.4 Au contraire the 1st respondent via DWI gave an elaborate account of how it enters into agreement with its clients. DWI produced copies of contracts it executed with its clients. Pages 115 to 126 of the record of appeal refer. She explained that all correspondence with the client was done using the company's email address and not personal email accounts. 9.5 After hearing both parties the learned trial Judge stated at page R8 (page 15 of the record of appeal) as follows: "In the present case, the plaintiffs motor vehicle was cleared using Divine Cargo's electronic platform with ZRA. And this was done through Divine Cargo's employee, Collins Simukoko. I have no hesitation to hold that there was no contractual agreement between the plaintiff and Divine Cargo, for the latter to clear the said motor vehicle on behalf of the former. 9.6 After a careful review of the evidence, we cannot fault the learned Judge for the findings he made that there was no contract between the parties. We are guided by the Supreme Court in the case of The Attorney-General v Kakoma13 where it held that: "A court is entitled to make findings of fact where the parties advance directly conflicting stories and the court must make those findings on the evidence before it having seen and heard witnesses giving that evidence. " 9. 7 We find no basis to upset the findings of the lower court as guided by a plethora of celebrated cases including The Attorney-General v Marcus Kampumba Achiume supra and Nkhata and 4 others v The Attorney-General supra. We accept the 1st respondent's argument and dismiss ground one accordingly. 9.8 As regards the second ground of appeal, the appellant's challenge is against the learned Judge's finding at page R8 (page 15 of the record of appeal) as follows: "Notwithstanding the fact that the motor vehicle was cleared in the name of Divine Cargo, it is not remote to reasonably infer, given the shortcomings of the clearing system then, that the clearing process herein was secretly J19 .. done by Collins Simukoko, without the consent of his employer." 9.9 Stemming from the finding that the parties had no contractual relationship, the learned Judge accepted the fact that Collins Simukoko was an employee of the 1st respondent, which fact was not in dispute. Further, DWl told the trial court that it was possible for Simukoko to get a private job (PJ). Under cross-examination, DWl testified that Simukoko could not clear the vehicle in his own name so he used the 1st respondent's name. That he used the platform of Divine Cargo Services. The relevant portions of her testimony are at pages 239 to 240 of the record of appeal. 9.10 Further, the appellant in asserting his submission that he entered into a contract with the 1st respondent, pointed to a receipt purportedly issued to him by the 1st respondent. The same appears at page 37 of the record of appeal. A perusal of the said document shows that it is in fact an invoice issued to the appellant by Be Forward Company Limited, the seller of the motor vehicle and not the 1st respondent as alleged. J20 9.11 Ultimately, there is evidence on record from the appellant's own testimony that Collins Simukoko replaced the damaged motor vehicle in 2016. He personally took a positive step to replace the vehicle. 9.12 Given this evidence, the finding of the learned Judge that Collins Simukoko secretly cleared the appellant's motor vehicle and that the appellant was privy to the transaction was not farfetched. We find that ground two lacks merit and it is accordingly dismissed. 9.13 The appellant's complaint 1n ground three is that the learned Judge was wrong to hold that Collins Simukoko repaired/replaced the appellant's motor vehicle because the clearing of the motor vehicle was a personal arrangement. Our view is that this ground is a repetition of ground two put differently. The reasons given for rejecting ground two are applicable to this ground. It suffers the same fate. It is dismissed. 9.14 Turning to the final ground of appeal, the appellant is dissatisfied with the learned Judge's holding at page 16 of the record of appeal to the effect that Edward Simwinga, the JZl "" driver of the subject motor vehicle at the material time, was not an employee of Divine Cargo. 9.15 The evidence on record at page 235 which the lower court appeared to accept is that of DW 1 who testified that Edward Simwinga was an employee of the 1st respondent from 2008 to 2010. That at the material time in 2012 he was not the 1st respondent's employee. DWl produced a list of the 1st respondent's employees at page 18 of the defendant's bundle of documents, which bundle does not grace the record of appeal. However, a list of the 1st respondent's employees is found at page 108 of the record of appeal. 9.16 From our careful perusal of the record, the learned Judge's finding that Simwinga was not an employee of the 1st respondent is backed by the evidence on record. The learned_ Judge cannot be faulted as his findings are neither perverse nor made in the absence of evidence, nor made upon a misapprehension of facts. This ground is devoid of merit. 9.0 Conclusion 9.1 In the net result, we find that all the grounds of appeal are unsustainable. We accordingly dismiss the appeal in its J22 r • entirety with costs to ·P9tldent, to be taxed 1n default of agreement. COURT OF APPEAL JUDGE C. K. Makungu u" COURT OF APPEAL JUDGE inga, SC )23