Mohammed Azim Ticklay v Total Zambia Limited (APPEAL N0.50/2021) [2023] ZMCA 393 (29 June 2023)

IN THE COURT OF APPEAL OF ZAMBIA APPEAL N0.50/2021 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: MOHAMED AZIM TICKLAY AND TOTAL ZAMBIA LIMITED .. ~ " ' ?l.ll'>uc OF ZAMs . /~fA°rPE:K"- ~:r . v - fij '. 2 9 JUi~ 2~11 4 ;- -~-1.:;jj· ~H-;i~·rw%· • ~ .,I 8~~--- . -0. X .50067, \_\)~ - 1 J C "-"'-"' • ~ - - ; , ..... I •I '\ • • . APPELLANT RESPONDENT CORAM: MAKUNGU, NGULUBE AND SHARPE-PHIRI, JJA. On 1 gth January, 2023 and 29th June, 2023. · For the Appellants: Mr. M. J Katolo Messrs. Milner and Paul Legal Practitioners. For the Respondent: Mr. M. Ndalameta, Mr M. Ndalameta Messrs Musa Dudhia & Company JUDGMENT NGULUBE, JA, delivered the Judgment of the Court. Cases referred to: 1. Clementina Banda Emmanuel Nzanze vs Bomiface Mudimba (2011) ZR Vol. 2. Hughes vs M etropolitan Railway Company (1977) 2 AC 439. 3. Central London Property Trust Limited vs High Trees House Limited (1947) IKB 130 4. Ogilvy and others vs Hope - Davies (1976) 1 All ER 653. 5. Zambia Horticultural Products Limited vs Nepta Tempo (1988-1989) ZR 214. 6. Holmes Limited vs Buildwell Construction Company Limited (1973) ZR 97 -J2- (H.q 7. 8. 9. Communications Authority vs Vodacom Limited (2009) ZR 196. Stanbic Bank Zambia Limited Vs Trade Kings Limited (2011) Vol ZR 402 Darlington Futures Limited Vs Delco Australia Proprietary Limited (1986) 161 - CLR 500 (HCA) 10. North Western Energy Company Limited Vs Energy Regulation Board (2011) Vol 2 ZR 513 11. Valentine Webster Chansa Kayope vs A_ttomey General (2011)2 ZR 425 12. Collet Vs Van Zye Brotnus Limited (1966) ZR 65 13. YB and F Transport Limited vs Supersonic Limited (2000) ZR 22 14. General Nursing Council of Zambia Vs Mbangweta (2008) ZR 105 15. Eastern Co-operative Union Limited vs Yamene Transport Limited (1988 - 1989) ZR- 126 Legislation referred to: 1. Halsbury's Laws of England, Volume 9 2. Halsbury 's Laws of England, Volume 27, Fourth Edition 1.0 INTRODUCTION 1.1 This is an appeal against a decision of the High Court delivered by Mr. Justice G. S . Phiri, on 16th September, 2020. The Court dismissed the appellant's claim for specific performance of a written Marketing Licence Agreement dated 14th J anuaty, 1994, claims for damages for loss of business, earnings and good will for the service station, as well as special damages, for lack of -J3- merit. The Court also dismissed the respondent's counterclaim for lack of merit. 1.2 The appeal questions the learned trial Judge's finding that the respondent cannot be held liable for losses that were incurred in running the filling station because of the extraordinary protection that the respondent enjoyed under the Marketing Licence Agreement. 2.0 BACKGROUND 2.1 The respondent was the owner of a service station at Plot No . 1568, Freedom Way. It entered into an agreement with the appellant and granted him licence and permission to use the premises known as Freedom Way service station. The appellant was a holder of a dealer's license and engaged in the retail sale of petroleum products at Plot Number 1568, Freedom Way /Kalambo Road Junction, Lusaka, and leased the service station from the respondent. 2.2 The lease was governed by a Marketing License Agreement and the appellant operated the service station from 14th January, 1995 to 2 nd December, 1998. During this period, the appellant -J4- experienced losses and was unable to meet capital requirement for the aforestated reasons. 2.3 Following discussions over losses the appellant was purportedly incurring at the station the parties reached an agreement, to the effect that the respondent would run the service station for a period of three months as a trial to ascertain the status of the business. After the period of three months elapsed, the respondent continued to operate the service station for a further six months. 2.4 On 10th December, 1998, the respondent had the pumps at the service station assized but continued to incur losses. The appellant later vacated the premises and commenced an action by way of writ of summons, for specific performance of the written Marketing Licence Agreement dated 14th January, 1994. The appellant further sought damages for loss of business, earnings and good will on the service station. The appellant also sought special damages. 2.5 The respondent denied liability and filed a counter-claim in the sum of US$3,050.00 as rent arrears from 30t h August 1999 to -JS- November, 2001 the time when the appellant vacated the premises. 3.0 DECISION OF THE LOWER COURT 3.1 The Court found that the termination of the dealership agreement was in accordance with the agreement as the appellant defaulted in payments and vacated the service station after the trial run. The lower Court was of the view that there was no supporting evidence to sustain the claims for specific performance and injunction. The Court found that the dealership agreement was frustrated by the abnormal losses and dishonoured cheques. 3.2 The lower Court opined that the dealership was eventually abandoned by mutual efforts and the appellant's claims were accordingly dismissed. Regarding the claims for damages for loss of business on the dealership, damages for loss of business earnings and good will on the service station as well as special damages, the lower Court found that there were abnormal losses which occurred for a long period. 3 .3 The Court stated that the issue of liability for the losses under the respondent's Marketing Licence Agreement was provided for -J6- and defined the relationship between the appellant and the respondent. The Court referred to clause 8 (p) of the Agreement which provides that: "The dealers shall not in any way hold Total liable for losses of petroleum products at the station resulting from any cause whatever including defective equipment such as storage tanks, dispensing pump and meters." 3.4 The lower Court stated that the claim for damages for loss of business was unsustainable as there was an exclusion clause in the Marketing Licence Agreement which was signed by the parties. 3. 5 The learned trial Judge considered the evidence before him and came to the conclusion that no particular evidence was led to prove that the respondent lost rentals during the period specified in the counter-claim. The lower Court further stated that it would not allow the counter-claim because the respondent's premises were in disrepair. 3.6 The lower Court found that, the initial termination of the agreement was due to the unpaid cheques of the appellant as a result of the loss which the respondent was investigating. -J7- 3.7 The lower Court opined that the respondent's counterclaim for rentals was supposed to be proved and that no evidence was led to prove this claim. The lower Court declined to allow the counterclaim. The Court then dismissed the appellant's claims and also dismissed the respondent's counterclaim. The Court then ordered each party to bear its own costs. 4.0 GROUNDS OF APPEAL TO THIS COURT AND ARGUMENTS BY THE PARTIES 4 .1 The appellant, being dissatisfied with the decision of the lower Court appealed to this Court, advancing three grounds couched as follows- 1. The Court below erred in law and fact when it held that the defendant cannot be held liable/or losses because of the extra ordinary protection they enjoyed under the Marketing Licence Agreement without due regard to the contents of the letter of 3 r-d December, 1998 under clause (b) where parties agreed to settle the liability for losses after trial run and the letter of 17th November, 1999 wherein the defendant acknowledged that the losses experienced by them were above normal acceptable losses. 2. The Court below erred in law and fact when it dismissed the plaintiffs claim/or loss of business earnings and goodwill, in spite of the findings of abnormal losses arising from sub standard repair jobs by the defendant causing a fundamental breach of the Marketing Licence Agreement. -J8- 3. The Court below erred in law and fact when it failed to hold that the defendant was disentitled to rely on the exemption clause in the Marketing Licence Agreement by reason of having failed to maintain the service station resulting in abnormal losses to the plaintiff. 5.0 APPELLANT'S HEADS OF ARGUMENT 5.1 The parties filed heads of argument prior to the hearing which they relied upon and augmented with viva voce arguments. Counsel for the appellant Mr Katolo argued ground one alone, while grounds two and three were argued together. 5.2 In arguing ground one, it was submitted that the lower Court should have directed its mind to the contents of the letter dated 3 rd December, 1998 under paragraph 1 clause b which states that: "If on the other hand it shall be discovered the pumps, underground tanks and suction pipes have been leaking, TOTAL shall undertake repairs to the equipment and continue running the station for one more month. In the meantime a meeting shall be convened at TOTAL Head office to discuss the same before dealership of the station is reverted to Mr. Azim Ti.ck lay." -J9- 5.3 The Court's attention was drawn to the contents of the letter dated 17th November, 1999 particularly clause 5 which states that: "It was acknowledged by TOTAL that the losses experienced at the station were above "normal" acceptable losses although the service of the losses was not discussed. This shall be discussed during the next meeting." 5.4 It was argued that the contents of the letters highlighted above formed part of the agreement which both parties were bound to. It was further submitted that the respondent accepted to settle liability for losses, as evidenced in the letter dated 3 rd December, 1998 under clause 6 and that .by acknowledging receipt of the demand letters which were formally submitted to the respondent as evidenced by letter dated 19th November, 1994 under clause 4, the respondent could not rely on the extraordinary protection under the Marketing Licence Agreement. The appellant's Counsel contended that the respondent waived its protection under clause (b) of the Marketing Licence Agreement and could therefore not rely on the clause that protected it form liability. -JlO- 5.5 The case of Clementina Banda and Emmanuel Nzanze vs Bomiface Mudimba 1 was referred to, where the Court considered the doctrine of waiver and stated that: "There are two separate doctrines which are often referred to as "waiver". These two doctrines are also associated with the doctrine of "estoppel". These two types of waiver are distinguished by the terms "waiver by election" and "equitable waiver". According to the learned authors of Phipson on Evidence, a "waiver by election" occurs when a party acts with the knowledge of another party in that it is consistent with choosing to rely on one or two alternative and mutually exclusive rights. The effect of such an election ts that the party will be precluded from asserting the other rights. However, a party will only be held to such an election if he knew or had the means of knowing the existence of the alternative rights. Equitable waiver occurs when the party leads another to believe that he will not rely on a particular right. This doctrine is closely associated with the doctrine of promissory estoppel. The doctrine requires a clear representation, though usually on a future conduct and action in relevance to the representative". 5.6 The case of Hughes vs Metropolitan Railway Company2 was also cited, which was referred to by Lord Denning in the cases of Central London Property Trust Limited vs High Trees House Limited3 where Lord Justice Cairns stated that: -Jll- " ........... but it is the first principle upon which all Courts of equity proceed, that if parties have entered into definite and distinct terms involving certain legal results, certain penalties or legal forfeiture, afterwards by their own act or will, their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense or held in abeyance, the person who otherwise might have enforced these rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have taken place between the parties." 5.7 Reference was also made to the case of Ogilvy and others vs Hope - Davies4 where the Court stated that: "The principle of waiver is simply this: if one party by his conduct leads another to believe that the strict rights arising under the contract will not be insisted on, intending that the other should act on that belief and he does act on it, then the first party will not afterwards be allowed to insist on the strict legal rights when it would be inequitable for him to do so". 5 .8 It was submitted that the respondent's conduct of entering into negotiations for the settlement of losses suffered by the appellant and requesting the appellant to put his claims in writing and acknowledging receipt of the letter of demand, led the appellant to believe that the respondent will not rely on the -Jl2- exclusion clause in the Marketing Licence Agreement, but would settle the losses of the appellant. 5.9 The case of Zambia Horticultural Products Limited vs Nepha Tembo5 was referred to, where the Court held that an offer to discuss the quantum of damages suffered by the plaintiff amounted to a waiver of the exemption clauses which was to the effect that: "The company will bear no responsibilities on conclusion of the commodities stored in the cold room by yourselves." 5.10 According to Counsel, had the learned trial Judge directed his mind to the authorities cited above, and the contents of the letters referred to, he would have found that the respondent could not rely on the extraordinary protection afforded under the Marketing Licence Agreement to deny liability for the losses that the appellant suffered. 5.11 On the· issue of extrinsic evidence, it was submitted that extrinsic evidence is not admissible and the exception to the rule is as was stated in the case of Holmes Limited vs Buildwell Construction Company Limited6 where the Court stated that:- -J13- "Where the parties have embodied the terms of their contract in a written document, extrinsic evidence is not generally admissible to add or vary, subtract from or contradict the terms of the written contract." 5.12 Counsel argued that the case falls within the exception to the extrinsic evidence rule as the circumstances that arose and led to the writing of the letters were due to the Marketing Licence Agreement, as both, parties were bound to it and that the respondent was obliged to undertake repairs for the pumps and building at the premises. 5.13 We were urged to consider the arrangements that were made by the parties and the consequences that they had on the parties as well as the Marketing Licence Agreement. 5.14 In arguing grounds two and three, it was submitted that the respondent had a duty to maintain the service station in a good condition for the appellant's use, which was in accordance with the Marketing Licence Agreement. According to Counsel, the respondent breached its obligations under the agreement and the Court ought to have found that the respondent breached a fundamental term of the agreement and could therefore not rely on the exemption clause. -Jl4- 5.15 It was further argued that the respondent's substandard repairs were a fundamental breach of contract and the respondent should have been disentitled to rely on the exemption clause. 5.16 Paragraph 996 of Halsbury's Laws of England, Volume 9(1) was referred to, which states that- ''It has been said that a fundamental term is no more than a condition that is a term which the parties have agreed either expressly or impliedly and goes to the root of the contract so that any breach of that term without reference to the circumstances will allow the innocent party to treat himself as discharged if the breach has produced a situation fundamentally different from anything which the parties as reasonable persons had contemplated when the contract was made." 5.17 It was contended that the respondent's obligations to maintain the service station was a fundamental condition and that the performance of the appellant depended on the proper functioning of the service station. Counsel reiterated that the respondent should have been prevented from relying on the exemption clause. 5.18 It was contended that the appellant made several complaints on the state of the service station and that most of the equipment -JlS- was defective and malfunctioning. It was submitted that there was a legitimate expectation on the part of the appellant, based on the correspondence with the respondent, that his claims regarding the losses would be considered, despite the clause in the Marketing Licence Agreement. 5 .19 The case of Communications Authority vs Vodacom Limited7 was cited, where the Court stated that: - "Legitimate expectation arises where a decision maker has led someone to believe that they will receive or retain a benefit or advantage, including that a hearing will be held before a decision is taken". 5.20 It was submitted that it would be unfair to allow the respondent to depart from the state of affairs it induced as that would prejudice the appellant who expected that his claim for losses would be considered. 5.21 In light of the foregoing, Counsel prayed that the appeal be allowed and that costs be awarded to the appellant in this Court and in the Court below. 6.0 RESPONDENT'S ARGUMENTS -J16- 6.1 The respondent filed heads of argument 1n opposition to the appellant's appeal. Responding to ground one, it was submitted that the only wavier that existed was in relation to the notice period for terminating the Marketing Licence Agreement and that there was no waiver or variation in relation to the exclusion clause in favour of the respondent. 6.2 Our attention was drawn to the letter on page 175 of the record of appeal, and it was submitted that there was no agreement to settle the appellant's losses. Page 176 of the record was referred to, where the contents of the letter in issue are that- "6. It was finally agreed that your action to have the working ARREARS written off should be discussed at a meeting to be held after three months' period of TOTAL running the station. During the same meeting, the claim for shortages should the above equipment be found to be leaking will be discussed.,, 6.3 It was contended that there was no agreement to settle losses experienced by the appellant. The only agreement was to discuss the appellant's claim for shortages if there was confirmation that the equipment was leaking. 6.4 It was contended that the respondent did not waive its right to -Jl7- terminate the Marketing Licence Agreement. According to Counsel, the appellant claimed that the loses that he suffered at the service station commenced in 1994 and lasted up to 1998. It was argued that he took no steps to mitigate the alleged losses. It was also contended that the Marketing Licence Agreement did not have any provisions for compensation for loss of business by the appellant. Further, there was no provision for compensation of any losses suffered by the appellant above the accessible loss margin. 6.5 Counsel went on to argue that the obligation to maintain the premises was not a fundamental term of the Marketing Licence Agreement as the appellant agreed to rent the premises on an as is basis; as stated in the letter dated 21 st December, 1999. 6.6 Responding to ground three, the respondent repeated its submissions in ground one that the respondent was not liable to the appellant for any losses incurred and that the appellant cannot therefore claim that the respondent is disentitled from relying on the exemption clause. Reference was made to the Marketing Licence Agreement which provides that. -J18- "The Dealer shall maintain the station {forecourt, office, store, WC, service bay in perfectly clear and good condition and ensure that the forecourt and surroundings are at all times kept clear of vehicles other than those of customers" 6.7 It was contended that the appellant was responsible for maintenance of the station except for breakdown of the pumps and fuel storage equipment which was supposed to be promptly reported to the respondent. 6.8 The case of Stanbic Bank Zambia Limited Vs Trade Kings Limited8 was referred to, where the Court differentiated between contractual obligations that were essential against those not deemed to be essential. According to Counsel, the obligation to maintain the service station did not rest entirely on the respondent as the appellant also had an obligation to maintain some parts of the service station. 6. 9 Referring to the case of Darlington Futures Limited Vs Delco Australia Proprietary Limited9 , this Court was urged to consider the words in the exclusion clause using their natural meaning, as the same could be relied on by the respondent in excluding all forms of liability under the Marketing Licence Agreement. -J19- 6.10 On the appellant's argument that there was a legitimate expectation that his claim for losses would be considered, it was argued that the respondent is not an authority or a public body making public decisions. 6.11 The case of North Western Energy Company Limited Vs Energy Regulation Board10 , was referred to where the Court stated that a) "A legitimate expectation must be induced by the conduct of the decision maker. A representation by a different person or authority will therefore not found the expectation." b) "The representation must be made by a person with actual or ostensible authority to make the representation, the authority will not be bound if the promisee knew, or ought to have known that the person making the representation had no power to find the authority. 6.12 This Court was urged to dismiss the appeal in its entirety for the reason that. i. The letter dated 3 rd December, 1998 did not prevent the respondent from relying on the exclusion clause as it did not amount to a variation or waiver and the respondent was not liable to the appellant/or the losses he suffered; -J20- ii. The appellant cannot claim damages for loss of business opportunity and good will because he did not take any measures to mitigate the losses he allegedly suffered iii. The respondent did not by the action create an expectation in the mind of the appellant that it would terminate the Marketing Licence Agreement or that it would not rely on the exclusion clause. 6.13 The respondent also prayed for costs in this Court and in the lower Court. 7.0 CROSS APPEAL 7 .1 The respondent filed heads of arguments in support of its cross appeal against the High Court judgment made on 16th September, 2020. The 1st ground of cross appeal was that- 1. The Court below erred in law and/act when it held that the respondent was not entitled to rent for the period 30th August, 1999 to 30th November, 2022 when the appellant admittedly occupied the respondent's office, minimart kiosk and parking area, which were all not in a state of disrepair. 8.0 RESPONDENT'S ARGUMENTS IN SUPPORT OF THE CROSS APPEAL In support of the 1st ground of appeal, it was submitted that the 8.1 appellant operated as a licencee until the agreement which was terminated on 30th August 1999. It was argued that from that -J21- time, the appellant's status changed and he needed to pay rent to the respondent. It was contended that the appellant entered into the agreement for the rent of the workshops and the premises in the state they were in at the time of signing the agreement and was aware that the respondent did not intend to undertake any repairs of improvements on the premises. 8.2 This Court was urged to enforce the terms of the Marketing Licence Agreement with respect to rent of the premises. Counsel referred to the learned authors of Halsbury's Laws of England, Volume 27, Fourth Edition2 , at paragraph 211 where it was stated that- "Rent is the recompense paid by the tenant to the landlord for the exclusive possession of corporeal hereditaments. The modern conception of rent is a payment which a tenant is bound by contract to make to his landlord for the use of the property let" 8.3 Counsel stated that where parties have agreed that rent must be paid by the tenant, the tenant must pay the rent unless there is an agreement to the contrary, that rent will not be paid for a certain duration. -J22- 8.4 The case of Valentine Webster Chansa Kayope vs Attorney General11 was referred to, where the Supreme Court ordered the appellant to pay mesne profits to the respondent for his continued occupation of the house, after the expiration of his legal right to occupy it. It was submitted that the appellant owes the respondent rentals for the period 30th August, 1999 to 30th November, 2002. 8.5 The second ground of appeal in the cross- appeal was that The Court below fell into error when it relied on one piece of evidence at trial to order that the respondent should bear its own costs instead of viewing the litigation as a whole and determining the substantial result. 8.6 It was argued that the respondent was substantially successful but was not awarded costs. The respondent was of the view that although the counterclaim was dismissed, the respondent was substantially successful and should have been awarded costs. The case of Collet Vs Van Zyl Brotnus Limited12 was referred to where the Court of Appeal stated that- "A trial Judge, in exercise of its discretion should as a matter of principle view the litigation as a whole and see what was the substantial result. Where he does not do -J23 - so, the Court of Appeal is entitled to review the exercise of discretion. 8.7 The case of YB and F Transport Limited vs Supersonic Limited13 was also referred to where the Supreme Court held that "The general rule is that costs shouldfollow the event. In other words, a successful party should normally not be deprived of his costs. Such an unusual turn of events should have an explanation/or example, if the successful party did something wrong in the action or in the conduct of it." 8.8 It was argued that there is nothing on record to show that the respondent conducted itself inappropriately before the lower Court. 8 .9 The respondent therefore prayed that the cross- appeal be allowed and that the appellant be ordered to pay the outstanding rentals. Further that the respondent who was substantially successful be awarded costs of the cross appeal in this Court and in the Court below. -J24- 9.0 APPELLANT'S ARGUMENTS IN OPPOSITION TO THE RESPONDENT'S CROSS APPEAL 9.1 Responding to ground one of the cross appeal, it was submitted that the learned trial Judge was on firm ground when he decided to dismiss the counterclaim and addressed his mind to the evidence that was presented before him as well as the testimonies of the witnesses in the lower Court. 9.2 It was contended that the appellant occupied the kiosk, office, mini-mart and parking area free of charge and that both parties were bound by the said agreement. The Court's attention was drawn to the letter dated 3 rd December, 1998 specifically paragraph 2 which reads: "During the test period you shall be allowed free occupation of the main office, mini mart and take away, but should dealership terminate, you shall immediately vacate the main office, mini-mart and take away" 9 .3 It was contended that the parties agreed that the appellant would occupy the main office kiosk, mini mart and take away rent free during the trial period. 9.4 It was submitted, regarding the workshop that the parties had agreed to have the rental arrears which had accumulated -J25- written off and that the accumulation of rent on the workshop had stopped. 9.5 The appellant referred to the state of disrepair of the workshop, which spoke against the testimony of DWl, who denied the assertion that the premises were in a state of disrepair. On the rental arrears, it was contended that they were subject to agreement between the parties who were yet to discuss the matter. We were urged to dismiss the first ground of the cross - appeal for lack of merit. 9.6 Turning to the second ground of the cross- appeal, it was submitted, in response that the learned trial Judge was on firm ground when he ordered each party to bear its costs, as they are awarded at the discretion of the Court. The case of General Nursing Council of Zambia Vs Mbangweta 14 was referred to in this regard. 9.7 It was contended that the lower Court was presented with enough evidence to show that the respondent should not be awarded costs. -J26- 9.8 This Court was urged to uphold the decision of the lower Court on the counterclaim and dismiss the cross- appeal as it lacks merit. 9.9 We were urged to award costs to the appellant. 10.0 ANALYSIS AND DECISION OF THIS COURT 10.1 We have considered the evidence on record and the arguments made by Counsel on behalf of both parties. We shall deal with the grounds of appeal in the order in which they were filed and argued. Thereafter, we will deal with the crossappeal. 10.2 At the core of the grounds of appeal is whether the respondent could rely on the protection that it enjoyed under the Marketing Licence Agreement and whether the appellant's claim for loss of business earnings and good will could succeed. 10.3 In arguing ground one, the appellant contended that the lower Court misdirected itself when it did not consider the letter dated 3 r d December, 1998 in which the respondent accepted to settle liability for losses. The appellant further argued that the respondent could not rely on the protection under the -J27- Marketing Licence Agreement because it waived the said protection. According to the appellant, the parties entered into negotiations for the settlement of losses that the appellant signed for. 10.4 The respondent, on the other hand contended that it did not undertake to settle any losses that were incurred and that the parties only agreed to enter into discussions if the equipment was found to be leaking or faulty. The respondent contended that it did not waive its right to terminate the Marketing Licence Agreement, contrary to the appellant's assertions. 10.5 The respondent further argued that it did not lead the appellant into believing that it would not rely on the Marketing Licence Agreement. 10.6 We have considered the arguments of the parties under ground one. We are of the view that a good starting point would be to reproduce parts of the letter dated 3rd December 1998, which reads- "(a} If it shall be discovered that the equipment (pumps underground tanks and suction pipes} have not been leaking, total shall immediately terminate the Marketing Licence Agreement -J28- (b) If, on the other hand it shall be discovered that the pumps and underground suction pipes have been leaking, total shall undertake repairs to the said equipment and continue running the station for one month. In the meantime, a meeting shall be convened at Total Head Office to discuss the same before dealership of the station is reverted to Mr. Azim Ttcklay" 10.7 From the contents of the letter highlighted above, we are of the view that the respondent did not agree to settle the losses that were allegedly incurred by the appellant. 10.8 What we decipher from the letter is that the respondent would repair the equipment at the service station in the event that the same would be found to be leaking. 10.9 The respondent further stated that it would terminate the Marketing Licence Agreement if it found that the equipment at the service station was not leaking. However, the respondent decided to conduct a trial run of the service station and operated it for an initial three months period, so as to ascertain the cause of the losses that the appellant experienced. 10.10 Regarding the protection that the respondent enjoyed under the Marketing Licence Agreement, we will reproduce the relevant clause in that Agreement, which is that- -J29- B(p) The dealer shall not in any way hold Total liable for losses of petroleum products at the station resulting from any cause whatsoever including defective equipment such as storage tanks, dispensary pumps and metres" 10.11 The clause highlighted above shows that the respondent was well protected under the Marketing Licence Agreement and could not be held accountable for any loss of petroleum products at the service station. 10.12 Further, the evidence on record is that the respondent did not waive its reliance on the Marketing Licence Agreement nor did it by conduct lead the appellant into believing that it had waived its reliance on the Marketing Licence Agreement. 10.13 The letters of 3 rd December, 1998 and 17th November, 1999 do not suggest that the respondent had agreed to settle liability of the appellant's losses after the trial run of the service station. Accordingly, we do not find any merit in the first ground of appeal and it fails. 10.14 Turning to ground two, the appellant attacked the lower Court for dismissing the appellant's claim for loss of business earnings and good will, because according to the appellant, he incurred abnormal losses which were due to the sub standard -J30- repairs that the respondent undertook at the service station. The appellant argued that this caused a fundamental breach of the Marketing Licence Agreement. 10.15 Responding to ground two, the respondent argued that the appellant did not mitigate his losses as he operated the service station from 1994 to 1998 but kept complaining that he was incurring abnormal losses at the service station. 10. 16 In the case of Eastern Co-operative Union Limited vs Yamene Transport Limited15, the Supreme Court held, inter alia that - "We find that in keeping with the principles which require a plaintiff to mitigate his loss, a plaintiff who has a profit making chattel damaged beyond economic repair is under obligation to replace that chattel and in this regard, the poverty or otherwise of the plaintiff is quite irrelevant. 10.17 In line with the holding in the Yamene Transport case, we are of the view that the appellant should have mitigated the losses that he suffered in the four years ( 1994 to 1998) that he claims he operated the business at a loss. 10.18 We are further of the view that the Marketing Licence Agreement absolves the respondent from liability for any of the -J31- losses that the appellant would have incurred at the service station. The appellant, as a person who operated the service station as a business for at least four years had an obligation to maintain the service station to the best of his ability and cannot complain that the respondent's repair and maintenance works at the service station were substandard. 10 .19 We are of the view that the lower Court did not find that the abnormal losses that the appellant incurred were as a result of the substandard repair works at the service station. The appellant incurred losses at the service station but did nothing about it and took no steps to mitigate its losses. The appellant cannot claim damages for loss of business for the aforestated reasons. 10.20 We do not find merit in the second ground of appeal and it fails . Ground three attacks the lower Court for failing to hold that the respondent was disentitled to rely on the exemption clause in the Marketing Licence Agreement for having failed to maintain the service station, resulting in abnormal losses to the appellant. -J32- 10.21 The appellant contended that the respondent had a duty to maintain the service station in a good condition for the use of the appellant. 10.22 It was contended that this was a condition in the Marketing Licence Agreement. It was the appellant's argument that the respondent breached its obligation under the agreement. It was further argued that failing to maintain the service station was a fundamental breach of the contract and that the respondent should not have been allowed to rely on the Marketing Licence Agreement to absolve itself from liability. 10.23 The respondent's view under ground three is that it was not liable to the appellant for the losses incurred. Regarding the appellant's claim that there was a legitimate expectation that the respondent would consider the appellant's claim for losses, it was submitted that the claim for legitimate expectation cannot stand as the respondent is not an authority or public body making public decisions. 10.24 We have considered the submissions and arguments by counsel under the third ground of appeal. We note the appellant's arguments regarding legitimate expectation. -J33- However, we are of the view that they are misplaced. Further, the appellant failed to maintain the service station and continued to run the business at a loss without making any efforts to turn the situation around. 10.25 We are further of the view that the respondent did not conduct itself in any way that would have made the appellant have a legitimate expectation that the respondent would compensate him for his losses in running the service station. 10.26 In the view that we have taken, we find no merit in the third ground of appeal and it fails. 11.0 CONSIDERATION OF THE CROSS APPEAL 11.1 We have considered the grounds of appeal and the arguments of the parties under the cross appeal. We are of the view that the cross-appeal has no merit as the respondent did waive the appellant's obligation to pay rentals . 11. 2 Accordingly, we find no merit in the first ground of the cross appeal and it fails. 11 .3 Regarding the second ground of the cross-appeal, we are of the view that the lower Court was on firm ground when it ordered each party to bear its own costs as it was the most just decision -J34- in the circumstances. We note that both parties did not succeed in their claims and it was therefore in order for the lower Court to exercise its discretion and order each party to bear its costs. 11.4 Accordingly, we are of the view that the cross-appeal lacks merit and we dismiss it. 12.0 CONCLUSION 12.1 In the view that we have taken, we find no merit in this appeal and we dismiss it. Each party shall bear its own costs. ~ --£t::. C. K. MAKUNGU COURT OF APPEAL JUDGE P. C. M. NGULUBE COURT OF APPEAL JUDGE ~~ . SHARPE- PHIRf cOURTOFAP EALJUDGE