Mijoni v Zambia Publishing Company Ltd (Appeal 10 of 1986) [1987] ZMSC 35 (27 July 1987)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO. 10 OF 1986 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: VINCENT MIJONI Appellant and ZAMBIA PUBLISHING COMPANY LIMITED Respondent CORAM! Ngulube, D. C. J., Gardner and Sakala JJ. S 2nd June, 1987 and 27tn July, 1987 For the Appellant : Mr. F. Kongwa of Kongwa and Company For the Respondent : Mr. J. M. Mwanakatwe of MMW and Company JUDGMENT Sakala, J. S. delivered the judgment of the court. Cases referred to: (1) Bonweil v. Jenkins (1878) 8 ch. D.70 (2) Gideon Mundanda v. Timothy Mulwani and Agriculture Finance Company Limited and S. S. S. Mwiinga SCZ Judgment No. 10 of 1987 For convenience we will refer to the appellant as the plaintiff and the respondent as the defendant which they were in the action. This is an appeal against a judgment of a High Court judge holding that the plaintiff's dismissal was not wrongful and refusing to grant an order for specific performance of a contract of sale of a house between the parties. The facts of the case were that by a contract dated 28th September, 1970 the plaintiff was employed by the defendant company as an Editor­ in-Chief of the defendant's publication known as the Zambia Daily Mail. There was in the contract of employment a clause setting out breaches, the commission of which entitled the defendant company to dismiss the plaintiff summarily from his employment without notice or payment of salary. It was common cause that sometime in 1979 the plaintiff was J2 - suspended from his employment as an Editor-in-Chief of the Zambia Daily Mail following upon allegations brought to the attention of His Excellency the President. After the plaintiff's suspension investiga­ tions were conducted against him. On 1st August, 1980 His Excellency the President wrote the plaintiff as follows: "It pained me gravely when I had to make the unpalatable decision to suspend you from duty as Editor-in-Chief of the Zambia Daily Mail when serious allegations against you were brought to my attention. Due to the complexity of the allegations, it was unfortunately not possible for the law enforcement officers to speedily conclude investigations into them. This led to your having to be on an inordinately long suspension. I regret this and wish to assure you that I did not derive any joy out of it. I have now received a report of the investigations and although these do not disclose any criminal misbehaviour upon \^ich a prosecution could be based, they have, on the other hand, disclosed that your conduct as Editor-in-Chief left much to be desired. For example: (a) It has been found that you are in the habit of frequently obtaining advances from petty cash. In the majority of cases the purpose for vXiich the advances were required was not disclosed. (b) During one period of time, you had unwarranted the use of two motor vehicles, one owned by the Company while the other, a landrover, is said to have been yours. Both these vehicles were allocated no doubt, at your request or direction with petrol supplied by the Company. To this end, almost ten thousand litres of petrol was allocated in respect of the two motor vehicles in 1978. These drawings of petrol were very excessive and do smack of extravagance on your part. (c) Further still, knowing what your motor vehicle loan entitlement was, you allowed a loan which was far in excess of that entitlorent to be granted to you wlien you purchased the landrover mentioned in (a) above. (d) It is also disclosed that you excessively made air trips both internally and overseas. Sometimes you allowed even members of your family to travel on the authority of tickets purchased v/ith Company money. Needless for me to mention that this was a gross mis-application of Company funds. These are only four examples of a number of irregularities which have been uncovered. In the light of all these, I an of the view that you are not a fit and proper person to continue in the service of a public enterprise, particularly so in a commanding position. I consequently find it to be in the public interest that the Board of Directors be directed to terminate your contract of service forthwith. This termination will, however, allow/ for your reinstatement retrospective to the date when you were suspended as Editor-in-Chief. This is done to enable you to be paid the balance of the aggregate of your monthly salaries from the time of suspension to the time of termination. Other terminal benefits will be similary paid to you." J3 - Follow:ic upon this letter the defendant's company secretary wrote the plaintiff as follows: "Dear Pr. Mijoni, 1 aference to Ute President's letter to you of 1st August, 1960, I have been directed by the Board of Directors of this Conpany to inform yet b;at at their meeting of today, they resolved that your employment be terminated with effect from 1st August, 1980 in terms of clause 5 of the contract of service. 1 l Board, i-oever, adopted His Excellency the President’s directive that you be paid the balance of the aggregate of your monthly salaries and other benefits from the time of suspension to ’the time of ■termination. The Board further allows you to stay in the Company house until the 31st October. 1390. Yours faithfully, FOP ZAMBIA* PUBLISHING CO. LTD. R. A. MDA CaVAW SECRETARY" There is evidence on record that before the suspension and the dismissal the plaintiff had accepted an offer from the defendant company to purchase the company's house at Plot No. 4099 Sunningdale in which ne liveo. The plaintiff applied for a mortgage from the Building Society which he was given. The defendant applied for State consent to sell their house to the plaintiff. This was granted. Bo+h parties engaged the same firm of advocates, M/S D. H. Kemp and Company, to represent their interests. The plaintiff sued the defendant company claiming damages for wrongful termination of employment and for an order for specific performance of a contract of sale of the property situate at Stand No. 4099, Lusaka. ‘ Paragraph 11 of the amended statement of claim reads as follows: "11 As a result of the said wrongful termination of eiploymsrit and breach of the agregnerrt fof the sale of the property situated at stand noiter 4099 Lusaka the plaintiff has suffered damages and loss and he claims for the following:- J4 - HARTICULARS i. Salasj in lieu of notice for six months 2. Pension contributions at the rate of 15% of the annual salary 3. ijaave nays 4. Specific Perfonrence by the Defendant in the sale of the property mentioned above, in the alternative any order which the Court may deem fit under the ci resistances. fl© the plaintiff claims damages" Paragraph 5 of the defence to the amended statement of claim reads in part as follows: "the defendant will say that after the said contract, and before the lege.’ breach, the plaintiff misconducted himself in the said service by habitually obtaining advance from petty cash for undisclosed purposes, by dishonestly allowing a loan to himself far in excess of his entitlement when the plaintiff purchased a landrover and by extravagant expenditure of funds belonging to the Defendant's subsidiary carpany, Zambia Daily Mail Limited, through excessive f trips for himself and members of his family, arid the Defendant, therefore, discharged the plaintiff which is the alleged breach. 'Rie defendant will say that the particulars of the plaintiff's misconduct were conveyed to the plaintiff in a letter addressed by His Excellency the President to the plaintiff on the 1st day of August, 1920, following an investigation by the Audi tor-General's staff who established the plaintiff's involvement in the mismanagemait of the Company." The learned trial judge in a detailed judgment found f om the evidence and pleadings that the defendant did not purport to terminate the contract but that the defendant summarily dismissed the plaintiff under clause 5 of the contract of service for misconduct. The trial judge a found that on the basis of the wording of the letter of dismissal it was quite clear that the plaintiff was summarily dismissed and, therefore, no notice was required and no terminal benefits had to be paid apart from those accrued. The trial court observed that in cases of dismissal an employer need not allege any misconduct, negligence or incompetence provided that such a ground exists and the employer satisfied the court at trial that he was justified to terminate the services. The trial judge further observed tiiat the plaintiff must have been aware of all the investiga­ J5 - tions that were being carried out against him and that he must have known that his employers were awaiting the results of the investiga­ tions as they had suspended him pending those investigations. According to the trial judge it did not matter how the information of misconduct or negligence came to the notice of the defendant, the criterion being whether or not there was such a misconduct or negligence to justify the dismissal. The trial judge also found that the plaintiff was dismissed by the Board of Directors of the defendant company and not by His Excellency the President. The trial court was satisfied that the defendant had proved the serious acts of misconduct set out in the defence. The court concluded on the issue of dismissal that the dismissal was not wrongful and that there was no wrongful termination nor any termination at all holding that in the circumstances the dismissal was justified. Turning to the prayer for an order for specific performance the trial judge reviewed the evidence and correspondence between the Managing Director of the defendant company and their advocates who were also the plaintiff's advocates. He also reviewed the correspondence from the Building Society as well as the State consent form. He found that the parties had not entered into any form of agreement and had still been negotiating and none of the conditions for the purchase had been fulfilled. He held that there was no evidence satisfying Section 4 of the Statute of Frauds as amended by the Lw Reform (Enforcement of Contracts), Act of 1954 which provides that a contract relating to land, tenements or hereditaments or any interest in or concerning them shall not be enforceable unless it is evidenced by some memorandum or note thereto in writing signed by the party to be charged or by some person lawfully authorised by him to sign. The trial judge concluded on the purchase issue that there was no agreement prepared. He held that the correspondence between a lawyer and his client is not sufficient to satisfy Section 4 of the Statute of Frauds. - On behalf of the plaintiff Mr. Kongwa argued two grounds ; the first related to the trial court's refusal to grant the application for an order for specific performance and the second related to the trial court's finding that there was no wrongful dismissal. Mr. Kongwa's submissions and arguments on the first ground were that Section 4 of the Statute of Frauds as amended by the Law Reform (Enforcement of Contracts) Act 1954 requires that there is in fact a concluded contract and a sufficient note or memorandum. Counsel argued that a formal cont­ ract was not a requirement. But a written statement identifying the parties, the subject matter.the consideration and price leaving nothing open to future treaty was enough to satisfy the statute. He argued that in the instant case there was sufficient documentary evidence satisfying the requirements of Section 4 of the statute. Counsel contended that the learned trial judge having decided that nothing but a formal contract will satisfy the statute did not advert to the correspondence that ♦ passed between the parties. He submitted that the totality of the documents in particular document 14 providing the exact purchase price satisfied Section 4. Mr. Kongwa also argued that the guarantee which was to be given by the defendant company had nothing to do with the contract of sale. It was also counsel's contention that there were no further conditions precedent to the excution of the contract. Counsel submitted that even if the guarantee for the shortfall had not been granted that would not have been fatal to the contract of sale which had been complete from the correspondence. Mr. Kongwa submitted that the trial judge misdirected himself by ignoring the correspondence. He also submitted that although specific performance is a discretionary remedy the present case is one of those cases where damages would not be an adequate remedy. He further pointed out that under Order 18 Rule 8 of the Rules of the Supreme Court the defendant to rely on the Statute of Frauds must have specifically pleaded it, which was not the case. J7 - Turning to the ground relating to the plaintiff's claim for wrongful dismissal counsel submitted that the learned trial judge mis­ directed himself in holding that the defendant had proved the acts of misconduct set out in the defence. Counsel contended that the defendant gave no evidence to prove the alleged misconduct, the trial judge, therefore, misdirected himself by shifting the burden of proof in respect of the alleged misconduct onto the plaintiff. He submitted that it was for the defendant to prove his averment of the misconduct, particularly when the plaintiff traversed the misconduct in the reply and in his evidence. Counsel argued that the plaintiff was not given a chance to be heard and that this failure robbed the investigators of the opportunity to hear the plaintiff's side. He submitted that it was incumbent upon the Board of Directors to prove the plaintiff's misconduct since they were responsible for the dismissal of the plaintiff and not His Excellency the President. It was contended on behalf of the plaintiff that the Board was responsible to frame the charges and to give the plaintiff the opportunity to be heard on these charges. Counsel also contended that even if no charges had been preferred against the plaintiff the Board had to prove that the misconduct did exist either at the investi­ gations stage or at the trial stage. Counsel further argued that the President's letter was not proof of the plaintiff's misconduct but that the defendant should have produced documentary evidence to prove the misconduct since Mr. Manda's evidence was merely a general repetition of the President's letter. Mr. Kongwa submitted that it was for the court to decide on the evidence whether there had been misconduct or not. Reacting to Mr. Kongwa's submissions on the issue of specific performance Mr. Mwanakatwe submitted that specific performance is a discretionary remedy based on established legal principles, arguing that in the present case the trial judge took into account all the relevant facts and in the exercise of his discretion refused to J8 - grant the order. Mr. Mwanakatwe pointed out that the thrust of the plaintiff's submission is that according to the Statute of Frauds there was a memorandum and the court should have granted specific performance. Counsel submitted that the terms of the contract must have been clearly defined and from the evidence on record the necessary elements satisfying the Statute of Frauds were not present in this case and the court would be unable to enforce the contract if specific performance was granted. Mr. Mwanakatwe invited the court to consider the totality of the documents in the supplementary record of appeal. He argued that the court will find that there was no precision on price, the parties agreed to a formal contract only after all the terms had been agreed. He contended that documents 14 and 16 in the supplementary record do suggest that the price was discussed and document 10A in the suppleme­ ntary record reveals that the required guarantee conditional to the granting of a mortgage and precedent to the sale of the house had not been obtained. Mr. Mwanakatwe, however, did concede that if the plaintiff had had the money then he would have purchased the house. But counsel pointed out that in the present case there were other extraneous matters affecting the sale, for instance, that the offer to sell the house to the plaintiff was on the basis that he was the defendant company's employee. Turning to the submissions on wrongful dismissal Mr. Mwanakatwe pointed out that the law of master and servant relationship was clear and, the plaintiff having not disputed that he had been employed on a contract, his dismissal was in terms of that contract which provided for dismissal on the ground of misconduct. He submitted that the grounds contained in the Presidential letter addressed to the plaintiff amounted to misconduct in law and were brought to the plaintiff's attention in the clearest terms but never challenged by writing to the President or by adducing evidence at the trial denying or repudiating those grounds. Mr. Mwanakatwe argued that the only onus on the defendant company was J9 - to bring the alleged misconduct to the attention of the plaintiff in the clearest terms. He submitted that in the amended defence the defendant company gave details of the misconduct, while in cross-exami­ nation the plaintiff was vague and completely equivocal. Counsel further argued that on record the plaintiff does not deny the allega­ tions. He submitted that in civil matters a determination is made upon a balance of probabilities and that in the instant appeal the argument that the trial judge shifted the burden of proof onto the plaintiff was not tenable bearing in mind that the defendant's board at which the decision to dismiss the plaintiff on the ground of misconduct was made. We have very carefully considered the arguments and the submissions by both learned counsel. At this stage we wish to express our indebted­ ness to both learned counsel for the most helpful authorities they referred to us. This appeal raises two issues of whether there was infact between the parties a concluded and enforceable contract of sale of the house in issue satisfying section 4 of the Statute of Frauds to warrant this court to grant the order for specific performance being sought by the plaintiff and whether the defendant company proved the acts of misconduct on the part of the plaintiff as pleaded in the amended defence to have justified the summary dismissed. We entirely agree with the submissions by both learned counsel as to the legal principles governing the remedy of specific performance. We must, however, emphasise that this remedy is discretionary and will not be granted where damages would be an adequate remedy. The question, however, is whether the legal principles ably argued by both counsel applied to the facts of this case. The material facts which we have already outlined are not in dispute. We have also in this judgment summarised the provisions of section 4 of the Statute of Frauds. As we see it this appeal in so far as it relates to the trial judge's J10 - refusal to grant the order for specific performance centres, in our view, on the construction we must at the end place on one crucial document which is not in dispute. This document appears at page 14 of the supplementary record of appeal. In the light of what we are going to say it is appropriate that this document should be set out in full. The document reads: "3nd March 1978 D. H. Karp and Carpany, P. O. Box 1,000, Chester House, Cairo Road, LUSAKA Dear Sirs, PLOT 4099 SUTWINGDALE, LUSAKA-ZAMBIA PUBLISHING COMPANY LIMITED TO V. G. MIJONI Our Mr,. Vincent Mijoni wuld like to buy the company house he currently occupies in Sunningdale, Lusaka. Tne price will be K32.000 (thirty two thousand kwacha). He has applied for a mortgage with the Zantia National Building Society. Ite, therefore, ask you to act on our behalf on this sale. M". Mijoni will ccmrwicate with you personally as he lias indicated that he would also like you to act on his behalf. Applications for state consent to assign and to mortgage ha« already been made. Tne deeds for this house are with Zanbia National Provident Fund on security for a loan. An application is being made to substitute this property with anotter property in order that ZNPF release aocirents. Yours faithfully • ZAMBIA PUBLISHING COMPANY LIMITED (SIGNED) R A MAMTA COMPANY SECRETARY" From the supplementary record of appeal this document is preceded by several other documents which show that the defendant company had made an offer to the plaintiff to buy the house and that the plaintiff had accepted the offer. Other documents show that the plaintiff through his lawyers applied for a mortgage to the Zambia National Building Society which was granted. We observe that the learned trial judge referred to the above - J11 - document in his judgment but held that the parties had not entered into any form of agreement and were still negotiating. He found that there was no memorandum or note. Mr. Kongwa has argued and submitted that this was a misdirection because the letter we have just set out taken together with the other correspondence on record satisfy section 4 of the Statute of Frauds and, therefore, a formal contract was unnecessary. We have given our serious consideration to the letter we have just set out. We note from the letter written by the company secretary that in the first paragraph it states that the plaintiff had accepted to buy the company house he was currently occupying. We also note from the second paragraph that the defendant company stated the price of the house to be K3£,000.00. In the third paragraph we note that the firm of lawyers was being asked to act on the defendant's behalf and that the plaintiff had also expressed his wish that the same firm of lawyers should act for him. The contention by Mr. Kongwa was that the offer, acceptance, and the purchase price had been settled. Mr. Mwanakatwe1s argument was that the price had not been settled. It seems to us that it is now settled law that for a note or memorandum to satisfy section 4 of the Statute of Frauds the agreement itself need not be in writing. A note or memorandum of it is sufficient provided that it contains all the material terms of the contract such as names or adequate identification of the parties, the description of the subject matter and the nature of consideration (see Cheshire and Fitfoot's Law of Contract 9th edition at page 186 under the heading, The contents of the note or memorandum). It has also been said that letters may themselves constitute the contract and the written evidence of it. It follows that whether there is a binding contract or not it must depend on the construction of the letters. The old case of Bonwe11 v. Jenkins (1873) 8 ch. D.70 (1) was brought by a purchaser for specific performance. The brief facts from the headnote were that: J12 - "Tie defendant placed a leasehold property in the hands of a house agent for sale. Tne plaintiff i/rote to the agent, "In reference to J.'s property in Fleet Street, I think £800 for the lease, fixtunes, &c., is about vtiat I should be willing to give. Possession to be given me within fourteen days fran date. This offer is made subject to the conditions of the lease being modified to my solicitor's satisfaction." Shortly afterwands the agent wrote back, "Vfe are instructed to accept your offer of £800 for these premises, and have asked J.'s solicitor to prepare contract." Tne required modification in the lease was procured:- Held, by Fry, J., and by the Court of /'ppeal, that, notwith­ standing the reference to a future contract, the two letters constituted a complete contract." He entirely agree with Mr. Kongwa's submissions that the letter was a sufficient note or memorandum to satisfy the statute and was a concluded enforceable contract between the parties for the sale of the house. This letter discloses the existence of the offer and acceptance, named the parties, and identified the property; and contained the price. In our view the issue of the guarantee had nothing to do with the contract of sale. As a matter of fact the contract of sale had been concluded long before the issue of the guarantee. The guarantee as we see it was simply for the purpose of securing a mortgage from the Building Society. We also agree with Mr. Kongwa that had the plaintiff ready cash then the issue of guarantee would never have come in and could not have been a condition precedent to the purchase of the house. With regard to Mr. Mwanakatwe's argument that the offer to sell the property to the plaintiff was on condition that he should remain an employee of the defendant company we find that this condition was never referred to in the correspondence relating to the offer nor was it put forward in the defence. There was, therefore, nothing in the note or memorandum to substantiate Mr. Mwanakatwe's argument that any such condition was attached to the offer for sale. This ground of appeal, in our view, must succeed. The last question on this issue is whether we should grant the plaintiff the order for specific performance bearing in mind that this is a discretionary remedy. The court's discretion to make an J13 - order for specific performance was dealt by this court in a recent judgment in a case of Gideon Mundanda v. Timothy Mulwani and Agriculture Finance Company Limited and S. S. S. Mwiinga (2). We said in that case: "We will deal first with the question of the learned trial judge's discretion to make an order for specific performance. In this respect we are quite satisfied that the majority of the authorities cited to us related to specific performance of contracts other than contracts for the sale of land. The law concerning specific performance of contracts relating to the sale of land is quite clearly set out in paragraph 1764 of Chitty on Contracts 25th Edition, which reads in part: LAND. The law takes the view that damages cannot adequately compensate a party for breach of contract for the sale of an interest in a particular piece of land or of a particular house (however ordinary)................" This authority is supported in countless other instances and in this case it is quite clear that the learned trial judge did not have his attention drawn to the fact that his discretion in relation to specific performance of contracts for the sale of land was decidedly limited." Damages in the present case cannot in our view adequately compensate the plaintiff. We, therefore, find that the plaintiff is entitled to specific performance and we make the following order: 1. The plaintiff shall be responsible for all the rates on the property from the 1st of February, 1981 and shall reimburse to the defendant company any such rates paid by them. 2. The plaintiff shall be liable to pay interest at the rate of 8% on the purchase money of K32.000 frcm the 1st February, 1981 to date of completion. 3. The defendant carpany shall within 14 days of this order make due application for consent to assign the property under Section 13 of the Land (Conversion of Titles) Act Cap. 288. And upon the plaintiff paying to the defendant company at the time and place to be agreed the balance of the purchase price, rates and interest. It is ordered that the defendant company do excute a proper assignment of the said property to the plaintiff or to whom he may appoint and the defendant company do deliver to the plaintiff the title deeds to the said property and the parties be at liberty to apply to a single judge of this court. J14 - Turning to the issue of wrongful dismissal, it is not in dispute that the plaintiff received the President's letter containing allegations of misconduct. The defendant company's letter terminating the plaintiff's services shows that the Board of Directors' decision was based on the President's letter of 1st August, 1980. Mr. Kongwa's contention is not that the allegations of misconduct were not communicated to the plaintiff in the clearest terms, but that the President's letter on its own was not evidence proving the alleged misconduct. He submitted tnat Mr. Manda's evidence did not prove any misconduct on the part of the plaintiff. We take note that the defendant company's letter of termina­ tion of services refers to the President's letter. Mr. Kongwa's further submission is that the defendant did not frame the charges against the plaintiff and did not prove any misconduct on the part of the plaintiff either at investigation or trial stage. Paragraph 5 of the amended defence has already been set out at the beginning of this judgment. The paragraph sets out the following allegations of misconduct on the part of the plaintiff: that he habitually obtained advances from petty cash for undisclosed purposes; that he dishonestly allowed himself a loan far in excess of his entitlement when he purchased a landrover; that he extravagantly spent funds belonging to the defendant's subsidiary company, Zambia Daily Mail Limited, and that he made excessive air trips for himself and members of his family. Mr. Kongwa submitted that there is no evidence on record showing that the plaintiff obtained advances from petty cash. He further submitted that there is no evidence on record showing that the plaintiff took a loan far in excess of his entitlement. Counsel also submitted that there is no evidence on record that he made excessive air trips for himself and members of his family. He pointed out that the defendant could easily have adduced evidence to I prove these allegations. We are satisfied that although the defendant I did not frame charges against the plaintiff, the allegations of I misconduct were brought to his attention and formed the basis for I J15 - his dismissal. We agree with Mr. Kongwa1s submissions that the defendant did not adduce evidence proving the alleged misconduct on the part of the plaintiff. The defendant made the allegations against the plaintiff, the burden of proof on the balance of probabilities was on them. This burden they did not discharge. We agree with Mr. Kongwa that it was for the court to decide on the evidence whether the misconduct alleged by the defendant company had been proved. The defendant having not proved the misconduct against the plaintiff at the trial, this ground of appeal must also succeed. We, therefore, hold that the defendant did not prove the allegations and there was no evidence to draw the inference that the plaintiff committed the alleged misconduct, We also hold that the dismissal was wrongful. The defendant had a right to terminate the contract of employment at any time for any reason, but the termination having been outside the provisions of the contract they breached the cont- ract and are, therefore, liable in damages for that breach, measure of damages in cases of this nature is the period of The normal notice provided in the contract. Clause 12 of the agreement in the instant case provides six calendar months notice. The plaintiff is, therefore, entitled to six months salary in lieu of notice, and judgment is entered in favour of the plaintiff accordingly. In the result we hold that the plaintiff's appeal succeeds with c both here and in the court below. M. M. S. Ngulube DEPUTY CHIEF JUSTICE B. T. Gardner SUPREME COURT JUDGE E. L. Sakala SUPREME COURT JUDGE