King Quality Meat Products Limited v Panorama Alarm System Security Services Limited (Appeal 46 of 2012) [2018] ZMSC 322 (31 August 2018)

J 1 ~v .. l£ COURT OF 7LJ. A-:;:, ~..:,~ JU D\C1 ARY --- .......... f4 1 3 SEP 2018 ..,,_,,.., ~"<' ~EM~ . . UR1 Rf-G\S ~~ ..;..;~~o~. ~s2ox~r.::o~o~a1"!_;..~\..\J~s_,,,,. 'fHE SUPREl\llE C OlJI,l'f Oft· ZAfvlBIA H OLD EN AT LUSAKA (CNIL JURISD ICTION) ~~·· - -- . PPE A L N0.046/2012 c?uBL\ OF lAA,1 /4 CZ/8/054/2012 ~ '?,. fc)'11 -: V Vf /:J tq BETWEEN : KING QUALITY MEAT PRODUCTS LIMITl AND PANORAMA ALARM SYSTEM SECURITY SERVICES LIMITED APPELLANT :RESPONDENT Coram: Chibomba, Musonda and Hamaundu, JJS On the 4th December, 2012 and 31 st August, 2 01 8 For the Appellants For the Respondent • • • • Mr C. Sianondo, Me ssrs Malambo & Co Mr K. Nsofu and Mr C. Kayela, Messrs Katongo & Co JUDGMENT Hamaundu, JS delivere d the Judgment of the Court: Cases ref erred to: 1. Brogden v Metropolitan Railway Company [1877] 2 App. Cas. 666 2. Rating Valuation Consortium and D W Zyambo & Associates v Lusaka City Council [2004] ZR 109 3 . Smith v Hughes [1871] LR 6QB 597 4. Galaunia Farms Limited v National Milling [2002) ZR 135 (H. C) . 5. Attorney General v Achiume (1983) ZR 1 6. Mususu Kalenga Building and Another v Richman's Mone y Lenders Enterprises ( 1999) ZR 27 7. Mazoka & Ors v Mwanawasa & Ors (2005) ZR 138 8. A. M. I. Za mbia Limited v Peggy Chibuye (1999) ZR 50 9. Ace Audit Expertise (Z) Limited v Africa Feeds Limited (2009) ZR 1 • J 2 Wh e 1 \,\TC h ai-d this oppe· 1, 'N \ sat \\ritl1 Mr Justic =>. MUS<)l d .a. M1- Ju tic · I\/lusond · has sine: f tir d. rr"l1 r - fo1 :\, ll1i ·. jLtd cr 111e 11t i:s bv _, This is an appeal by both the appellant nd the respond nt against the judgmen·t of the High Court. As 1-egards the appellant, the appeal is in respec t of the trial court's holding that the respondent's standard contract was binding on the appellant and the trial court's implementation of the limitation clause in that. contract after finding that the r,espondent's guards misconducted themselves. As t~egards the :respondent, the appeal is in resp,ect of the holding by the trial court that the respondent's guards were negligent. The fac·ts leading to this appeal are these: The appellant was under common managernent with its siste1~ company Dar Farms Limited, \Vhicl1., incidentally, is also an appellant against the respondent on the same facts • 1n cause No. SCZ/8/053/2012, also known as Appeal No. 47 of 2012. In April, 2012, the common ·management of the two sister companies engaged the respondent to provide security guard services. at premises belonging to the two co,mpanies. In the case of the appellant company, the premises were in Lusaka and Kafue. In the case of Dar Far4 ms Limited , the premises were in I{itwe. Tl1 ngagement was • .. f1-om l st April, i11 Lusaka, Kafue and Kitwe J 3 prec -d ed lJ)r a q1-to l':l t ion f C)I~ tl1e se r,1icc-~ s \~.-J-1ic l 1 ll 1c 1·<~ s J)C> d -11 l ga \1e t c) t 11 ma 11 a g ~ 1 c _ 1 1 . ,~ h e 111 , r1 age n1. e n t 11 \' i 1 1 ,er .. g 1- d \1\ it h t 11. e quotatio11, tl1-e respo·nder1t sta1-ted provid.ing sec~l1:ity services a·t the premises 12010. Subseque11tly, the r-espor1d,ent sent to tl1e appella11t for sigr-iature a standard contract. The appella·nt refused t,o sigr1 the standard co,ntract on the ground tl1at it wa11t,ed some clauses to be changed. 111 particular, the appellant felt that the li1n.itati·on clause provided the respondent's the form of com·pensat.ion for very little in Tl1.e responde.nt refused to change the clause. The negligence. appellant still did not sign the standard contract.. Hiowever, the resp,ondent con·tinued providing security guard services .. There \\ras evidence that between 1st April, 2010 and 6th April, 201,0 a number· of items such as wheel axles, rims, hu·bs and tyre fitting ma,chines were stolen from the premises ·of Dar Farms Limited in Kitwe. The matter was reported to the police who issued a report. Ther,e was evidence agai11, in respect of the alleged th,eft, that t·he respondent's guard is alleged to have confe,.ssed to a colleagu·e that he had taken part in ·the theft. That evide·nce was in the form of a r·eport ~rhich the respondent's Di1~ector of operations g,ave t.o t.he a·ppellant's m,anager by wayr of a lette1- datecl 26th April, 2010. There was e,,idence~ also, • • J 4 t.hat thie\1e -broke i11l<) tl1e 'f)})t~llant's rr1e~tt JJl·t11t i . .1 t ... us21k( anci .stol · meat a11d c si , ·gs~ 01-tJ1 1<30,000,000 (<>ld CLt1-r-cr1c}') bet\\ ecn 21st :11d 22 11(i June, 2010. Th n1atte1- ~ as repo1~ted to tl1e f)olice who issued police i-epo1-t stating that some uspects 11.aci l)ee11 ~=t.pprehe11ded while another suspect, ar1 e.mployee o,f the 1- spondent, was still on tl1e run. There was als,o e·vidence ·that the appellant reported. the theft of 140 metres o.f copper cable for elec.t1~icity a·t its Kafue plant 011- 28tl1 December, 201 O; and tl1at, upon tl1e ·discovery ,of that theft, the respondent's security gu.ard le.ft the premises, neve1- to return. The respo,nde11.t was, issuing bills for tl-ie servic,es that it pro,vided. Th,e management of the two companies, for its part, p,aid the bills, but would make some deductions to·wards the value of the items that t.he companies had lost as a result of the thefts. Dissatisfied wit.h that arrangement, the. respondent terminated the the relationship in December, 2010. When ma·nageme11t for companies pro:tested that the respondent had not given notice for the termination, the .respo11dent extended the pro·vision of ,security services for one .mo:nth. Hence, the relationship ended i·n January, 201.1. The responde11t sued the two sister companies separately. In both cases, the responde,11t sought; (i) a declaration that the star1dard • .. J 5 c_:ontract \A·}1ich it nt lo ll1e apJJella11t \i\''lS lJir1di11g <-J11 tl1·e lJ · 1·tie·s a11.c1 (ii) darnages for lJ1-e' . h ofcont.1-act. In tl1is par-ticula1-case, tl'1e 1- SIJ011de11.t cla.imed a sum ot-1{28,492,800 (old cur-rency) as the sum which tl1e appellar1t's r.nai1agement had t1nilate1-ally withl1eld to cover for the v.alu.e of the item lost. The appellant's defence was to contend that there exist,ed an oral contract 011.ly; and not the standard . con ti-act which it had r~efused to sign. The ap·pellant ;contended also that it withh,eld the value of the items that were stolen as a set off again.st tl1.e bills, and that this position l1ad bee:n agreed to by bo·t}1 p1arties. Consequently, the appellant counter-claime·d a sum of Kl67,851,000 as t.he value. o·f the items stolen. It also counter-claimed da·mages. The learned trial judge reduced the issues that aros 1e for determination to the following que·sti,ons: (i) Whether the contract on page 2 of the appellants bundle was legally binding; (ii) Whether th.e appellant was bound by estoppel t.o pay in full for the guard services provided by the respondent; and, (iii) Whether tl-ie resp,o·ndent's guards were negligent in executing their duties to the appellant. • -. J 6 1-he ie· rncd ti-i I Judge ;:111, v\e1·ed the fir-st c1uestio11 ir1 tl1e affirrr1ative ()11 tl1f~ fcJll· \v1110 g1-c)L1t1cls: '1~h;. t, c:tltl1ou gl1 t.l-1<:; a ·ppellant's c0Ltr1ter-1~1-01Josal to tl1e tern1 lir11iting liabilit}' 'A' . s r-ej ct d b)' the responde11t, it still co,nti11ued to acce1Jt the respor1dent's security guard se1-vice . , fo.r \Vhich the appellant !)aid ove1- a p 1~iod of n.i11.e montl1s. I11 the learned judge's view, the appella11t, by that co1~.duct, accepted tl1e te1-ms as co11taineci in the standard contract and was e·stopped from denying t.hat it accepted the t,erms of the standard contract. The learned. judge relied on a couple of au.tho.rities on the subject of estoppel in ar1-ivi.ng at that con.clusion, s.ucl1. as; Brogden v Metropolit.an Railway Con1pany' 1l, Ra.ting V'aluation Consortium and D W z.yarnbo & . Ass,ociates v Lusaka City Council(2 }, Smith v Hughes,t3 ), and Galaunia Farnis Litnited v National Milling(4 l. Having re.solved the first que·stion, the learned trial judge held that the appellant was liable ·to, pay the defendant in full. By' that holding, the court below granted the respondent's declaratory claim and the. claim for refund o.f the money v\,ithheld. The learned. judg·e, l1owever, dismissed the claim for damages for breach of co11 tract on the ground that it l1ad not bee·n substantiated. • J 7 \Vith r b 14 d t tl-i c u1 r -claim t11 th r l1ad b n .. ckn \i\ 1 d 0 m ~11t f1~0.m n · of tl e r spo·n · ' t . • _1,.n ~s - hat n e it wa proved ,h .t th lo ar s u ·f th re · p·ond .· 's negli ·ence, · hen it would pay for tl1 · 1 s · , · .ubject to th clau· e in the con rac t w hich limi ed comp n atic) : o US$1 0 00. In this cas e, th, learn e d ju d ge fou nd ·h ·t th e loss 1 cca ion d to the app e llant was d u e to the negligence or misconduct of the respon d ent's guard s . Th ,e cour enter ed ju dgmen for the appellant on its counte r -claim, b u t lim ited compen s ation to US$100 0. The appellant's gr ound s of a ppeal ar as fo.llows: 1. The court bel,ow erred both in law and in fact i·n holding that the st.andard co,ntrac.t w.as binding on the parties despite the evidence to th.e effect that the standard contract was not signed; a.nd m ,ore so that t :he standard contract came after the parties ha,d already concluded a binding contract bas ed on the quotation. 2. The cou.rt below .erred both in law and in fact whe ·n , having fo·und that the respondent's guards mis-con.ducted themselves, it gave effect to the limitat ion claus,e in the standard contract. The r e spon d ent cross-app ealed on the following two gr ounds: 1. The learned judg,e erred in law and in fact when s .he upheld the appellant''s counter claim based on the trial court's find.ing of facts w h en there wa.s no evidence to sup,port th.at the responde.nt was negl.igent. 2 . The learned trial judg,e erred in law a.nd in fact in awarding t.he ap.pellant's claim for negligence when the appellant did not adduce • J 8 any evidenc·e which le.d to the finding that t.h.e respondent ·was negligent nor did the appellant set out partic·ulars of negligence in the p,leadings in the c ,ou.rt below, neither did they rais,e or prove otherwise at trial. As we l1ave said at tl1.e begin.ning , tl1is matter a r ises 01-1t of tl1e same set of facts as the matter lJetween the app,ellant's sister company, Dar Farming Limited, and the respondent. We hav,e held in that matter that the court below wa s on firm grou11-d when it held that the standard contract was bindi·ng on the parties. We have provided the grounds for our decision i11 that n1atte1·; which are essentially that the court below fou11d as a fact that th.e parties had cont.emplated signing a written contract and t:hat this. was backed by the appellant's conduct in continuing to accep,t guard services on the terms contained in the written con·tract. We find it unnecessary, therefore, to deal with the appellant's first ground of appeal herein. We can only say that. it has no merit. That leaves only the appellant's ground relating to damages. The respondent's, cross -appeal is also on the issue of ·drunages,. The appellant's position is that it has no grievance with the finding by the court below of misco,nduct o,n the part of the ·respondent:'s guards, but it is aggrieve·d by the quantum of damages awarded, namely, the equivalent in kwacha of US$ I 000 as provid ed in the • • J 9 standa14 d contract. Tli_ 1~ . p d I l , , t} . th 1- h nd , i . :agr1 . V by the finding of mi · co1~du t it · If. I iti I i I V\f - fold: first, it is the responden 's cont n t i n that it w wr .. g f ,r th court below to make that finding when the a :ppellant did no v n set out the particulars of negligence in its pleadings. Secondly, it is , he resp·ondent's contention that the appellant did not even have evidence to suppor·t the finding of negligence. The appeals on this issue will be dealt with together. 1Consequently, it is convenient to deal with the contention in the .cross-appeal first. The arguments on behalf of the respondent on the cross-appeal were these: That the appellant in the court below did not plead any particulars of negligence on the part of the respondent's guards but only claimed a self-assess,ed quantum in the sum of Kl67 ,,000,000. That the only evi,dence that the app,ellant had adduced before· the court was a police report issue·d by Zone 1 7 p ·olice post and a state.ment which the appellant's employee ha·d made t,o th·e police when reporting th.e alleged th.efts. That, negligence on the part of the respondent's guards could not be inferred from the co,ntents of these two do,cuments. That, int.he circumstances, the finding ·by the court b·elow was made either in the absence of rel vant ,evid nee o·r on a • • J 1:0 mi pp1 , 11 n i ,n of the f cts. 'l\fe \\ 1-e r fe1-re · to tl1e ~, s .f Attorney General v Achiun1et 5 } in ur rt f tl1.e 1 .m nt .. Responding to ihose argu nts, · he ppell . 11t ar ued tl-iat, ir-ifact, evidence o·f ne ligenc was rev led in h stimony of the respondent's witness in cross-examinati n and also in the ·testimony of th 1e appellant's sole witness. Th app,ellant also argued that in any even ·, · he i sue r .. arding the particulai-s of negligence was never raised at the trial and that, consequently, it could not be raised now. W were referred to the cas .of Mususu Kalenga Buildin,g and Another v Richman's Money Len,ders Enterp,ris,e,s(6 l for that argument. We have considered the fo,regoing argum,ents. Regarding the finding of negligence, the court below relied on the respondent's witness who outlined th,e procedure regarding claims for losses resulting from the actions or n ,egligen,ce of the respondent's guards. That witness said that when claims for los,ses were received, the police would be informed and a docket would be opened. The witness said that once it was pro,ved that the respondent was negligent, then it wo,uld pay for 'the loss in accordance with the co1ntract, which limited the liability to US$1000. On . h ,e strength of that t stimony, th COUrt below ex , mined the Cont I S O•f he police • • J 11 on 1· co1·d and found tl1':1.t acco1-dir1g t<J tl1at t·c1),01-t, th su -pects \~ ho stole 111 at casin~s \~1e1-e in p,olice c:::u.stoc])r \}/t1il -\ t.l1e guard \vl10 had been C).n duty on the matE~r~ial 11.ight \Vas or1 the rL1n. Anotl1er police 1·eport which tl1e court below examined. stated that tl1e cables went missing when the guai-d had left his station. From tl1at conduct, tl-ie court below concluded that the respondent's guards were ,either negligent or Inisconducted themselves.; and that the respond.ent was,, co,nsequently, liable. Or1 examination of the docume11ts on record, we find that there was indeed sufficient evidence upon ~rhich the court came to the conclusio,n tha.t the respondent's gu.ards eith·er misconducted themselves or were negligent. The police reports were coinpiled by an independent investigative wing- the Zambia Police S,ervice. An,d these are the reports which, for example, stated that ever since the theft of the meat casings, the respondent's guard was on the run; meaning that the police were lo,oking for him. The respondent did not adduce any evidence ·to rebut that imputation. Surely, what other e'vid,ence did the court below need in order to come to the conclusio·n that it arrived at? We, therefore, do not agree wi·th th,e respon.dent's argume·nt that ther,e was 11.0 evide11ce to suppor·t the lowe·r court's conclu.sion .. • • J 1 / 1~1~1e se 1-i(1U , que tio11- i11 tl-1e 1-<: SJ=-)<)11ci t1 t' c 1-c)ss-appea l tl1 u ,nh, lies i11 the 1-e pond e nt 's ar-gum nt tl1at tl-ie ap1Jell' nt had ncJt set ut any particulars of ne . ligence i11. it . IJleaciings. Th e a ppellant l1as, o.f course , cou11t,e1-ed this argurn.ent wi tl1 the submi ssion that the evidence of thef~t and negligence wa led by the appellant ar1d yet the respondent d.id not o'bject to its in.tr-oduction. Accordi.ng to the appellant, the trial court was consequently, entitled tc) consider it. The authority relied on for the appella.nt's argument was the case of Mazoka & Q,rs v Mwanawasa & Orsf 7 ). We agree with t.he responde,nt that the appellant did I1o·t plead its cas.e for negligence in the classical style whereby the conduct or omiss,io11.s which amount to negligence are set out as particulars. However, th.e appellant's defe11.ce and co,unter-claim did contain averments on neglige·nce and th,eft. In the defe11.ce against the respondent's claim, for example, the appellant averr·ed that i.t was, entitled to a ·set-off of all amounts representing the value .of the properti,es which were either stolen or lost through the respondent's negligence. Again, in th·e counter-claim, the appellant averred that it was cl,aiming the value of all tl1e goods lost due to the negligence of the respondent and the direct involve·rnent of its guards in the theft o.f ·those goods. In Mazoka & Ors v Mwanawasa & Ors(7l, ,ve held: • J 13 ''The functio .n of pleadings is to give fair notice of the case which has to be met and to define the issues on which the court will have to adjudicate in order to determine the matters in dispute be.tween the pa.rties'' I11 tl1e san1e case,. \Ve also 1-ield as follows: ''I.n a case where any matter n ·ot pleaded i·s let in evidence, and not objected to by the other side, the c ,ourt is not and s ·hould not be precluded. from considering it. The .resolution of the issue will depen·d on the weight the: court will atta.ch ·to the evidence of unpleaded issues.'' To start with, tl1e averrnents ir1 tl1e appellant's pleadings cleru~ly alleged involve1ne11t of the respondent's guards in the tl1efts at t.he premises; the averments alternatively alleged negliger1ce on the part of tl1e r,espondent's guards. Clearly, although tl1e appellant did 11ot se·t out particulars of negligence, the averments in p.lead.ings did give the respondent fair notice o,f that aspect of the appellai1t's claim. Secondly, the appellant did adduce evidence regarding the alleged theft and negligence of the respondent's guards. That evidence wa·s no,t objected to by tl1e respondent. So, the cou.rt was not precluded from considering it. And when the court did co11.sider the evidence, i·t found that evidence ·to be of such \\,eight as to warrant attaching • J 14 sta11da1-d co11.tract. For the foregoing 1-eason , ·we fi11d no mer~it in the reSJJOndent's c1-os,s-appeal. That brings us to the a1JIJella11t's appeal. As we have explair1.ed, t.he appellar1t's gi-ievance is only with regard to t.he limiting of t.he damages to US$1000. The aJJpellant's ar-gumen t hei-e was simply that a limitation clause can11ot cover wrongful acts or misconduct. Ir-i this case, the appellar1t submitted tl1.at since tl1.e1-e \~ras ample evide11.ce to show that the respondent's guards we1-e di1-ectly i.nvolved in the theft of the goods, the respondent could not bring into aid the limitation clause in order to limit its liability. For t.hat argument, we were referred to the case of A. M. I. Zambia Limited v Peggy Chibuye(8 ) and the cas,e of Ace. Au,dit Expertise (Z) Limi,ted v Africa Feeds L.• ~t - d 1(9) . 1.m1 e _~, Th,e position of the respondent on this issue v..ras that there was no evidence on record to. su.pport the trial court's conclusion that the respor-ident's guards either misconducted themselves 01- \\rere negligent with regard to the thefts that occurred. I • J J 5 guar·ds in the thefts. So v\rhat we onl)l n ed t.o conside1- now is 'J. .hethe'l~ the a .ppellant's pr-oposition is co1-rect. Indeed, in A. M. I. Za1nbia Limited v Peggy Chibuyef8 l, a .ltl1.ougl1 the app al \Vas I-esolved 011 tl-ie question whether o,·r not an exempti 10 ,n clause l1ad bee11 brought t.o the attention of tl1e respondent, we, neve.rtheless,. in p,assing, said tl1at 011 the facts in that ca.se we did not see how the appella11t could 11.ave had exemption fro.m its o~,n \Vror1gdoi11g by tl1e misconduct of its own staff. Again, in Ace Aud.it Exper·tise (Z)1 Limited v Africa Feeds . L:imited, we held: ''A person ca.nnot use an exem.ption or limit.ation clause in order to escape liability arising .from his o,wn wrong doing,. o,r misconduct on the part of their employees'' The two decisions above are clear. Therefore, we hold the view that the appellant is on firm ground in its argument that the court below erred when it limited th,e damages or compensation to the amount specified in the limitation clause. This is because it was clearly established at t.he trial that the respo11dent's guards we·re involved in the thefts. On that ground, the appellant's appeal has n1er·its. We set aside the judginent of the co:urt below in so fa_r as it • J 16 holds that the damages should be limi ed to the amount in the limita_tion clause. Instead, we order that the damage on the counter claim be assessed by the Deputy Register. With regard to costs, each party will bear their own costs of this appeal. . \. . , \ ·--·~- -'1 ""· .. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • H. Chibomba SUPREME COURT JUDGE ... , .............•.•.••.... ·• ........... . . E. M. Harnaundu SUPREM. E COURT JUDGE ~