Rakir Husein Motala v Jabir Ali Bux (APPEAL NO. 158/2018) [2019] ZMCA 308 (18 September 2019)

J l IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT NDOLA (Civil Jurisdiction) APPEAL NO. 158/2018 BETWEEN: /7 / RAKIR HUSEIN MOTALA APPELLANT AND JABIR ALI BUX RESPONDENT CORAM: MAKUNGU, SICHINGA AND NGULUBE, JJA On 20th February, 2019 and 18th September, 2019 For the Appellant: M. Siansumo, Messrs Malambo and Company For the Respondent: M. J. Katolo, Messrs Milner and Paul Legal Practitioners JUDGMENT NGULUBE, JA delivered the judgment of the Court. Cases referred to: 1. Hellen Wangari Wangechi vs Carumera Mathoni Gathua, Civil Appeal Number 15 of 2. Re Megevand; Ex Parle Delhasse (1878) 7 Ch D 511 3. Musaku Mukumbwa vs Rody Musatwe, Northern Breweries Limited and Kailande Trading Limited, SCZ Appeal Number 102/ 2007 4. Christopher Lubasi Mundia vs Sentor Motors Limited (1982) ZR 66 5. Nkhata andfive others vs Attorney General (1966) ZR 124 6. Cox V H ickman (1860) 8-H -L-C, 26B Legislation referred to: 1. Partnership Act 1890 2. Money Lenders Act, Chapter 398 of the Laws of Zambia 1.0 Introduction J 2 1.1 This appeal is against a High Court Judgment delivered by Mrs. Justice I. Z Mbewe of the Commercial Division on 28th August, 2018. The court found that there was no partnership existing between the appellant and the respondent and that the respondent lent K2,500,000=00 (rebased) to the appellant for a business venture. The Court fu rther found that the appellant paid the respondent KS00,000=00 (rebased) a year for two consecutive years as profits, and that the third instalment of KS00,000=00 (rebased) was not paid. 1.2 In essence, the appeal calls for a determination on whether the relationship between the appellant and the respondent was a partnership and whether the respondent was entitled to profits that were realized from the business venture. 2.0 Background to the dispute in this appeal 2.1 The respondent, who was the plaintiff in the lower Court, commenced an action by way of writ of summons on 28th January, 2016, seeking the following reliefs- (i) Payment of the sum of K3,300 ,000=00 (rebased) being money due and owing to the plaintiff by the defendant; J3 (ii) Interest at bank lending rate; (iii) An order to account for all profits made; (iv) Any other relief the Court may deem fit; (v) Costs. 2.2 In the statement of claim, the respondent averred that by oral agreement in 2010, he lent K2,500,000=00 (rebased) to the defendant, who is the appellant herein, for the purchase and sale of commodities on the understanding that the appellant would pay the respondent profits annually, while the capital would be re invested. 2.3 The respondent averred that the appellant made three consecutive profits of K500,000=00 (rebased) in the years 2011, 2012, and 2013, but only made two payments of K500,000=00 (re based) to him for the years 2011 and 2012, respectively. He stated that the appellant failed to make a payment of K500,000=00 (rebased) for the year 2013. 2.4 The respondent averred that the appellant made a payment of K200,000=00 (rebased) to him in October, 2015 and did not state whether he encountered any challenges in the execution of the business. J 4 2.5 The respondent prayed that the appellant be ordered to pay the capital of K2,500,000=00 (rebased), plus profits for the years, 2013 to 2015, amounting to K3,300,000=00(rebased), with interest and costs. The respondent also prayed that the appellant be ordered to account for all profits made in the business. 2 .6 The appellant filed an amended defence and averred that the K500,000=00 (rebased) that was paid to the respondent was from a different source as the venture between the parties did not yield any profit. He averred that huge losses were made due to the challenges he encountered which the respondent was aware of. The appellant contended that the acknowledgment note dated 20 th December, 2013 was partially written by the respondent, particularly the words "profit made" which wer e inserted after the appellant had signed the document. 2.7 The appellant denied the respondent's claims and counterclaimed for a refund. 3. 0 Evidence before the High Court 3.1 The respondent testified that he lent the appellant a sum of K2 ,500,000=00 (rebased) for the appellant to pay him a profit of J 5 K500,000=00 (rebased) per annum 1n addition to the principal amount borrowed. 3.2 The respondent stated that on 20th December, 2013, the appellant wrote a note in his own handwriting acknowledging that he collected a sum of K2,500,000=00 (rebased) from the respondent and that he owed K2,500,000=00 (rebased) as at 20th December, 2013, less the remitted profit amounting to Kl,000,000=00 (rebased). The respondent denied entering into a joint venture with the appellant as he ran his own transport business in Lundazi. He averred that any losses that the appellant incurred in carrying out his business were for him to bear alone and that the appellant was supposed to pay the respondent profits every six months from the business venture. 3.3 The respondent prayed that the appellant pays him K3,300 ,000=00 (rebased), being capital inclusive of profits as he only paid the respondent KS00,000=00 (rebased) twice and did not pay the third instalment amounting to KS00,000=00 (rebased). 3.4 The appellant, in his testimony averred that a partnership or joint venture existed between him and the respondent. He stated that they agreed to enter into a joint venture of buying maize and that J 6 the respondent provided the capital of K2,500,000=00 (rebased) . The parties further agreed to share profits in the sum of KS00,000=00 (rebased) p er annum based on their proj ections. He averred that the respondent only deposited K 2,000,000=00 (rebased) in the account of Elipama Enterprises, the agent for the said joint venture and that no profit was made from the project due to poor collection of m a ize from the traders. The a ppellant averred tha t the parties s hould h ave shared the profits and losses inspite of him refunding the respondent the a mount of ZMWl,000,000=00 (rebased). 3.5 The appellant committed to p aying the sum owed. He h owever, contended that the respondent is not entitled to a n y claim and counterclaimed for the sum of K2,000,000=00 (rebas ed) as he contended that the respondent was overpaid by this amount since the parties were supposed to share losses in the business. 4 .0 Decision of the court below 4.1 After considering the eviden ce a nd submissions of the parties, the learned trial Judge found that the issues that required determination were whether there was a contractual relationship b etween the parties, what the purpose of the monies that were J 7 availed to the appellant was and whether the respondent was entitled to the reliefs claimed. The court was also asked to determine whether the appellant was entitled to his counterclaim. 4. 2 The trial Court found that a legal relationship was consummated with an offer and acceptance as stated by both parties but was of the view that there was no partnership as the monies that were obtained by the appellant from the respondent were not for any joint business but for the appellant to carry out the business of buying and selling of maize singularly. 4.3 The Court also found that there was no evidence to suggest that the parties agreed to share profits and losses as the appellant paid the respondent KS00,000=00 (rebased) twice as profit. That the parties also agreed to a fixed profit, and that the appellant would bear the risk of any associated costs and resultant profit. 4.4 The Court concluded that the legal relationship between the parties was that of creditor and debtor and found that on a balance of probabilities, the respondent had partially proved his claim. Judgment was therefore entered for the respondent in the sum of K2,800,000 (rebased) with interest at short term deposit rate from the date of summons to date of Judgment and thereafter J 8 at commercial lending rate until full payment. The Court dismissed the appellant's counterclaim for the refund of K200,000=00 (rebased), as it was of the view that it lacked merit. 5.0 Grounds of Appeal 5.1 Dissatisfied with the lower Court's decision, the appellant has appealed to this Court on sixteen grounds couched as follows- (i) The Court below erred both in law and fact in holding that the said relationship between the parties was not a partnership. (ii) The trial Court erred both in law and fact 1n equating partnership to the control of business. (iii) The trial Court erred both in law and fact by holding that the respondent was a lender and the a ppellant a borrower when the respondent in his pleadings asserted that the amount advanced was capital investment. (iv) The court below erred both in law and fact in holding that the respondent was entitled to a fixed profit in the absence of any such agreed term. J 9 (v) The learned trial Court erred both in law and fact when she held that the respondent was entitled to profit without evidence of the said profit being proved. (vi) The trial Court erred both in law and fact when she held that what was paid to the respondent was profit when the respondent's documentary evidence showed otherwise. (vii) The Court erred in law and fact in holding that the appellant would be unjustly enriched due to the respondent not having a money lenders' licence. (viii) The trial Court erred in law and fact 1n holding that the amount advanced to the appellant was K2,500,000=00(rebased) in total disregard of the sum deposited by the respondent. (ix) The Court below erred both in law and in fact by holding that there was an agreed fixed profit without evidence to that effect. (x) The trial Court erred both in law and in fact in relying on the plaintiffs witness statement when the same was contradictory to the pleadings filed. JlO (xi) The trial Court erred both in law and fact in holding that the only amount paid to the respondent was Kl ,200 ,000=00 (re based) when the Court found as a fact that the respondent conceded to having received KB00 ,000=00 (rebased), K400,000=00 (rebased) and KS00,000=00 (rebased), respectively. (xii) The learned trial Court erred in law and fact to believe the respondent h aving found that the respondent was callous in his conduct. (xiii) The trial Court erred both in law and in fact in not disclosing how the partnership was not disclosed by the appellant. (xiv) The Court erred in law and fact in connecting paragraph 3 and 11 (ii) of the re-amended defence to the profit sha ring without regard to paragraph 7 of the Defence which was responded to . (xv) The trial Court erred both in law and in fact when it failed to recognize that in the absence of profits losses needed to b e shared. J l 1 (xvi) The Court erred in both in law and fact in exercising the discretion of costs having found the respondent guilty of misconduct. 6.0 Arguments on behalf of the appellant 6.1 In the h eads of argument, the appellant filed further grounds of a ppeal couched as follows- (i) The Court below erred both in law and fact in holding that the said relationship between the parties was not a partnership. (ii) The trial Court erred both in law and fact 1n equating partnership to the control of a business. (iii) The trial Court erred both in law and fact in not disclosing how the partnership was not disclosed by the appellant. 6.2 Learned Counsel for the appellant submitted that the three grounds of appeal would be argued together as they raise interrelated issues. 6.3 It was submitted that the lower Court took the view that the money advanced by the respondent was not intended for a joint business and more so that the respondent could not be said to have control over the business. Counsel contended that the lower Court J 12 ignored the respondent's position as put in his reply and defence to cou nterclaim on page 119 to 20 1 of the record of appeal that- "8. The plaintiff denies the content of paragraph 14 of the counterclaim and will aver that the defendant was fully paid the sum of K2,500,000=00 as Capital Investment." 6.4 It was submitted that in cross-examination, on pages 292 and 293 of the record, th e respondent maintained that he put in capital investment in the appellant's busin.ess and that he was supposed to receive KS00,000=00 (rebased) from the pr ofits that would be made. Counsel submitted that the lower Court fell into grave error when it held that the appellant and respondent were not in a joint venture and attributed control to partnership. 6.5 We were referred to Section l(i) and the Partnership Act 1890, which defines a partnership as- "the relationship which subsists between persons carrying on a business in common with a view of profit," J 13 We were also referred to the case of Hellen Wangari Wangechi vs Carumera Muthoni Gathua 1 , where the Court stated that there are three essential facts without which no partnership can exist, these being (i) a business (ii) carried on in common (iii) with a view of profit. The Court stated that the conduct of the parties is relevant in determining whether or not there is a partnership. Counsel submitted that the respondent was aware that the venture which the parties engaged in was that of buying and selling maize. 6. 6 We were further ref erred to the case of Re Megeva nd; Ex parte Delhasse2 whose facts are that Delhasse agreed to advance money to two others. Provisions were made for Delhasse to share in the profits, have a right to inspect the accounts a nd the option of dissolving the partnership in specific circumstances. When a dispute arose, the Court of Appeal held that this arrangement constituted a partnership as there was the right to control, the right to receive profits and the liability to share in losses. 6.7 Counsel also referred to the case of Musaku Mukumbwa vs Rody Musatwe, Northern Breweries Limited and Kailande Trading Limited3 where it stated that- J1 4 "The evidence on the record of appeal, in our view clearly establishes that the appellant and the 1st respondent entered into a business partnership whereby they obtained beer from the 2 nd respondent for resale. The duo would share profits realized from the beer sales." Counsel submitted that in casu, the appellant and respondent were in a partnership and they were to share the profit. It was contended that the Court therefore erred in finding that the relationship between the parties was not a partnership. 6.8 In arguing whether the relationship between the parties was that of lender and borrower, Counsel submitted that the finding by the lower Court was not supported by the pleadings of the respondent as on page 114 of the record of appeal, the respondent averred that what he contributed was capital investment. Reference was made to the case of Christopher Lubasi Mundia vs Sentor Motors Limited4 where the Court stated that- "Where the pleadings are at variance with the evidence adduced in Court, the case fails since the J 15 plaintiffs case is completely re-cast w ithout actua l amendment of the statement of claim. " It was submitted that the evidence of the respondent was at variance with the pleadings and that there was no basis upon which the Court could find that the appellant was a borrower as the respondent stated that the money he gave to the appellant was capital investment. 6.9 In arguing grounds (iv), (v), (vi) and (xii), it was submitted that the aspect of the lower Court dealing with the payment of profit related to the Court analyzing the documents on pages 155 and 143 of the record of appeal. Th e documents on page 155 of the record had the insertion "profit made and collected" while the one on page 143 did not have any insertion. It was submitted that the Court should have found that no profit was made as the Court even found the respondent's evidence untruthful and callous regarding the document which he used to show that profit was made. We were urged to reverse the lower Court's finding of fact as it was not supported by the evidence. 6.10 In arguing ground (vii) it was submitted that the lower Court, at page 28 of the record of appeal pronounced itself that the respondent would be unju stly enriched on an unenforceable J 16 contract. Counsel submitted that there would be no unjust enrichment on the part of the appellant as the respondent would still be receiving his money which would not be affected by the Money Lenders Act2 . We were urged to reverse the lower court's finding as it was not supported by the evidence. 6. 11 Ground (viii) was that the trial court erred in law and in fact when it held that the amount advanced to the appellant was K2,500.000=00 (rebased) in total disregard of the sum deposited by the respondent. It was submitted that the respondent advanced K2,000,000=00 (rebased), to the appellant which was paid on 14th February, 2012 in the sum of K800,000=00 (rebased) and K400,000=00 (re based) on 20th February, 2012 and K800 ,000=00 (rebased) on 7 th March, 2012. It was argued that no evidence was led to show that the respondent gave an additional KS00,000=00 (rebased) to the appellant. We were referred to the case of Nkhata and five others Vs Attorney General5 and urged to reverse the finding of fact that was made by the lower court that an extra KS00,000=00 (rebased) was given to the appellant. 6.12 Ground (v) was that the trial court erred both in law and fact in relying on the respondent's witness statement when the same was J 17 contrary to the pleadings filed. It was argued that paragraph 3 of the Statement of Claim referred to "Capital" and that there was a difference between the pleadings and the evidence. That the lower court ought to have upheld the pleadings as the aspect of lender was not supported by the pleadings. We were urged to allow this ground of appeal. 6. 13 On ground (xi), it was argued that the trial court erred both in law and fact in holding that the only amount paid to the respondent was Kl,200,000.00 (rebased) when the court found as a fact that the respondent conceded to having received K800,000=00 (re based), K400,000=00(rebased) and KS00,000=00 (rebased) . We were urged to reverse the lower court's holding that the appellant only paid Kl ,200,000=00 (rebased) to the respondent. 6 .14 On ground (xiv), which was that the court erred in law and in fact in connecting paragraphs 3 and 11 (ii) of the re-amended defence to the profit sharing without regard to paragraph 7 of the Defence which was responded to, it was submitted that the court made a finding of fact to the effect that the appellant was supposed to pay the respondent profits which amounted to Kl,500 ,000=00 (rebased) over three years . Counsel submitted that there was an J 18 unbalanced evaluation of the evidence and urged us to interfere with the same and allow this ground of appeal . 6 . 15 Ground (xv) was that the trial court erred both in law and in fact when it failed to recognize that in the absence of profit, losses need to be shared. It was submitted that since no profits were made, the parties were supposed to share the losses. That the court erred in holding that the appellant and the respondent could not share profits and losses as there were no agreed terms on it. We were urged to allow this ground of appeal. 6 .16 Ground (xvi) was that th e court erred both 1n law and fact in exercising its discretion to award costs having found that the respondent misconducted himself. Counsel submitted that in awarding costs, the court must consider the conduct of the parties and that the court should not have awarded costs to the respondent because of his callous behaviour. We were urged to reverse the court's decision in that regard. 7 .0 Arguments on behalf of the respondent 7 .1 Responding to grounds (i), (ii) and (xiii), it was submitted that the trial court was on firm ground when if found that there was no partnership because no evidence was led to show that the parties J 19 shared profits. It was further argued that the mere fact that parties shar e profit from a business does not entail that there is a partnersh ip. We were referred to the case of Cox vs Hickman6 where the court held th at- " Although the gross takings were divided between the parties, there was no partnership as each of them had to discharge his own separate liabilities in respect of the venture." 7 .2 It was submitted that the three elements of a partnership are that the parties must have an intention to carry on a business in common with a view of profit. Counsel submitted that the appellant failed to prove the s h aring of profits between the parties and that as such , th e learned tr ial Judge was on firm ground when she held that there was no partnership between the appellant and the respondent. Counsel went on to submit that the trial court was on firm ground when it found that there was no intention to carry out a business in common between the parties and that as such, there was no partnership. 7 .3 We were referred to page 143 of the record of appeal, a document showing that the appellant owed the respondent K2,500,000=00 J 20 (rebased). Counsel argued that the appellant was 1n business without the respondent's involvement and that as at 20th December, 2013, the appellant owed the respondent K2,500,000=00 (rebased). It was argued that no evidence was led to show that the respondent ever had control or power in the business as he merely lent money to the appellant which would attract an annual fixed profit of KS00,000=00 (rebased). Counsel urged this court to dismiss grounds (i) , (ii) and (xiii) of the appeal for lack of merit. 7.4 In arguing grounds (iii) and (x) , it was submitted that the plea dings showed that the appellant lent money to the respondent and that the trial Judge was within her powers to rely on the evidence before her and come to the conclusion that the respondent lent money to the appellant. It was argued that the respondent's pleadings were not at variance with his evidence adduced in court. We were therefore urged to dismiss grounds (iii) and (x) of the appeal for lack of merit. 7 .5 Responding to grounds (iv), (v), (vi) and (xii), it was submitted that the trial court relied on the appellant's evidence and pleadings to come to the conclusion that there was a profit of Kl,500,000.00 J 21 (rebased) due to the respondent. It was contended that the trial Judge properly directed herself when she accepted the appellant's own admission of an existing profit payable to the respondent. We were urged to dismiss grounds (iv), (v), (vi) and (xii) of the appeal for lack of merit. 7 .6 In arguing ground (vii) of the appeal which was that the court erred in law and fact in holding that the appellant would be unjustly enriched because he did not have a money lender's licence, it was submitted that courts are reluctant to strike down the making and performance of contracts which may result in the unjust enrichment of the other party and that the trial Judge was on firm ground when she found that the appellant would be unjustly enriched if the court were to enforce the contract which would provide a windfall to him. We were urged to dismiss ground (vii) of the appeal for lack of merit. 7. 7 Responding to ground (viii) , which was that the trial court erred in law and in fact in holding that the amount advanced to the appellant was K2,500,000=00 (rebased) in total disregard of the sum deposited by the respondent, it was submitted that th e appellant drafted and executed the document on page 143 of the J 22 record of appeal and it was established that the document was written freely and willingly. It was contended that the appellant acknowledged receipt of K2 ,500,000=00(rebased) and not K2,000 ,000=00 (rebased) and that the trial court was on firm ground when she found that the appellant's denial of having received a cash payment of KS00,000=00 (rebased) was an afterthought. We were urged to dismiss this ground of appeal for lack of merit. 7 .8 Responding to ground (ix), it was submitted that the evidence before the trial court was that the appellant only managed to pay Kl ,200 ,000=00 (rebased) as admitted in his own pleadings and that the trial court was on firm ground when it h eld that the appellant paid Kl,200,000=00 (rebased) to the respondent. We were urged to dismiss ground (ix) of the appeal for lack of merit. 7 . 9 On ground (xiv), it was submitted that the court relied on the acknowledgm ent document which was signed by the appellant when he indicated that he paid the respondent Kl,500,000=00 (rebased) and that he still owed the respondent a sum of K2 ,500,000.00 (rebased) . It was contended that the appellant's pleadings spelt out his liability and that the court followed his own J 23 admission that he would pay a profit of K500 ,000=00 (rebased) per annum. It was submitted that the trial court was on firm ground wh en it found that the appellant would pay the respondent profit amounting to K500,000=00 (rebased) per annum. We were urged to dismiss this ground of appeal for lack of merit. 7. 10 In arguing ground (xv), which was that the trial court erred both in law and in fact when it failed to recognize that, in the absence of profit, losses were to be shared, it was submitted that although the respondent shared profits with the appellant, he was not expected to share the losses as no evidence was led by the appellant to show that the parties were to share losses as well. Counsel submitted that the trial court was therefore on firm ground when it held that there was no agreement to share losses. The appellant was supposed to pay the profits which were due to the respondent in the sum of Kl ,500,000=00 (rebased) of which K300,000=00 (rebased) was found to be unpaid and due to the respondent. We were urged to dismiss this ground of appeal for lack of merit. 7 .11 Ground (xvi) was that the trial court erred 1n law and fact in exercising the discretion of costs having found misconduct J 24 behaviour against the respondent. Counsel submitted that the trial court pr operly exercised its discretion in granting the respondent costs and having considered the respondent callous on one issue did not estop the court from exercising discretion in the manner it did. That the respondent had proved his case while the appellant had not and as such, the respondent was entitled to costs. Counsel submitted that the appeal in its entirety lacked merit and prayed that it be dismissed with costs. He also urged us to take judicial notice of the lower court's order that the appellant pays fifty percent of the judgment sum pending hearing and determination of the appeal. 8 .0 Our decision 8 .1 We have considered the record of appeal and the written and oral submissions by counsel for both parties. As we see it, the pertinent issues to be determined in this appeal are: 1. Whether there was a partnership between the parties; 2. Whether the parties agreed to share the losses that would be incurred in the joint venture. J 25 8.2 A partnership is a voluntary association of two or more persons who carry on business with the sole aim of making profit. There are three essential elements of a partnership namely that: (a) It is a business (b) There must be common interest; (c) It must be profit oriented. Under the Partnership Act of 18901 , partners are more than contracting parties as they owe fiduciary duties to each other. They are expected to behave towards each other as if they were trustees for each other, making full disclosure and being scrupulously fair in their dealings. Partners enjoy the benefit of honest and full disclosure and a partner cannot make unauthorized personal profits. They also enjoy hierarchy in management, control of the business as well as a well spelt-out profit sharing formula. The common purpose of the partnership will exist where the parties entered into a valid partnership setting out their respective rights and obligations as partners. The existence of "a view to profit" is determined by an inquiry into the intention of the parties. J 26 8.3 Paragraph 3 of the statem en t of claim in the lower court states that- "By an oral agreement, the plaintiff and the defendant agreed that the defendant obtain a sum of K2,S00,000=00 from the plaintiff to be used in the purchase and sale of commodities on the understanding that the Defendant would pay the Plaintiff profits made annually while the capital was re-invested." 8.4 From the p aragraph highlighted a bove, we are of the view that the agreement was entered into by th e parties to en gage in the business of the purch a s e and sale of commodities in comm on with a view of profit. The eviden ce in the lower court was that the respondent invest ed capital of K2,500,000=00 (rebased) into the business venture with th e appellant, who invested the labour of carrying on with the business of the purchase and sale of maize. This was indeed a partnership. We a re ther efore of the view that the lower court erred in law and fact when it found that the relationship between the p a r ties was n ot in partnership. The court also erred when it found that the respondent was a lender J 27 and the appellant a borrower as the respondent in paragraph 3 of the statement of claim stated that the money he gave to the appellant was capital which would be re-invested. The lower court's findings mentioned above are is accordingly reversed. We find m erit in grounds (i), (ii), (iii) of the appeal and they are allowed . 8.5 Grounds (iv), (v) , (vi) and (xii) of the appeal attack the lower court's finding that the respondent was entitled to profit in the absence of any evidence to that effect. On this issue, the appellant's witness statement at page 215 of the record of appeal in paragraph 1 indicates that the parties agreed to enter into a joint venture of the purchase of maize. Paragraph 2 of the witness statement states that the parties would share profits and the respondent would be paid the sum of K500,000.00 (re based) per annum based on their projection. There was ample evidence that the respondent was entitled to a share of the profits. 8.6 We therefore do not find merit in grounds (iv), (v) and (vi) of the appeal and they are accordingly dismissed. 8.7 Ground (vii) that the appellant would be unjustly enriched due to the respondent's lack of a money lender's licence falls away, as we have found that the money that was given to the appellant was J 28 not a loan but capital investment which the respondent injected into the partnership. This ground is accordingly dismissed. 8.8 Ground (viii) of the appeal is that the court erred in law and in fact when it held that the amount advanced to th e a ppellant was K2,500,000.00 (rebased) in total disregard of the sum deposited by the r espondent. The evidence on record in the lower court was that the appellant acknowledged receipt of the sum of K2,500,000=00 (rebased) from the r espondent because h e was under the impression that the respondent h a d dep osited the said sum of K2,500,000=00 (reb ased) in his b ank account. The appellant disputed having received KS00 ,000=00 (rebased) from the appellant in cash but acknowledged receiving the sum of K2, 000 ,000=00 (rebased) which was deposited in his ba nk account. The lower court, in its analysis of the evidence found that th er e was an inconsisten cy in the contents of th e acknowledgm ent note which the appella nt alleged was a ltered by the r esp ondent. He a dmitted inserting the words "profit made collect" to the document. The court found that no eviden ce was led by the respondent to show that the a ppellant was aware of th e J 29 insertion. The court further found that the respondent was economical with the truth and found him callous. 8. 9 Having considered the court's findings on the conduct of the respondent, we are of the view that the respondent did not lead evidence to show that he did in fact give the appellant an additional amount of KS00,000=00 (rebased) as a top up on the amount of K2,000,000=00 (rebased), which he deposited in the appellant's bank account. It follows that the lower court's finding that the appellant denied receiving KS00,000.00 (rebased) cash from the respondent to reduce his debt burden was not supported by the evidence on record. We accordingly reverse the lower court's finding of fact that the respondent gave KS00,000=00 (rebased) to the appellant in cash. This being the case, we find merit in ground (viii) of the appeal and it succeeds. 8.10 Ground (x) is to the effect that the lower court erred in law and in fact when it relied on the respondent's witness statement which was contradictory to the pleadings filed. A perusal of the respondent's witness statement on page 209 of the record of appeal indicates in paragraph 6 that the appellant borrowed K2,500,000=00 (rebased) from the respondent for the purpose of J 30 embarking on his own business, but would pay the respondent profits in addition to the principal amount borrowed. In paragraph 9, the respondent denied entering into a joint venture with the appellant and stated that he had no interest in a partnership with the appellant. 8.11 Paragraph 3 of the statement of claim indicates that the sum of K2,500,000=00 (rebased) that the appellant obtained from the respondent was for use in the purchase and sale of commodities with the appellant paying the respondent profits while the capital would be re-invested. We do agree with the appellant that the respondent's witness statement contradicts the statement of claim on the nature of the business that the parties engaged in. We reverse the lower court's finding of fact as it was not supported by the evidence on record. We find merit in ground (x) of the appeal and it succeeds. 8 .1 2 Ground (xi) was to the effect that the court erred in law and fact by holding that the appellant paid the respondent K2 ,000,000=00 (rebased) when the court found as a fact that the respondent conceded to having received K800,000=00, K400,000=00 and KS00,000=00 respectively . The lower court made a finding of fact J 31 that the appellant made two paym ents of KS00 ,000.00 (rebased) each and the sum of K200,000=00 (rebased) to the respondent on divers dates. The appellant in his witness statement stated 1n p a ragraph 10 t h at h e paid the respondent the sum of Kl, 500,000=00 (rebased) but went on to state that the respondent only acknowledged receipt of Kl ,000,000=00(rebased) . 8.13 The lower court which had the opportunity to observe the witnesses m a de the findings of fact that the app ellant paid two amounts of KS00,000=00 (rebased) to the r esp ondent , as well as an additional amount of K200,000=00 (rebased) as his share of the profits. We h ave no reason to find fault in the lower cou rt's finding of fact on this ground of appeal. We do not find m erit in this ground of appeal and we dismiss it. 8. 14 Ground (xiii) relates to the court's finding that the partnership was not disclosed by the appellant. Having found t hat the essential elem ents of a partnership were present in the r elationship b etween the parties, we find no m erit in this ground of app eal and accordingly disa llow it. 8.15 In ground (xiv) , the argument is that the app ella nt agr eed to pay the respondent a profit of KS00 ,000=00 (rebased) p er annum, and • • J 32 that the appellant in fact paid the respondent the sum of K l ,500,000=00 (rebased) . We do not find merit in this ground of appeal because th e eviden ce on record is that the appellant paid the plaintiff a total sum of Kl,200,000=00 (rebased). It is dismissed. 8. 16 Ground (xv) is on the issue of the lower court fail to recognize that in the absence of profits, losses needed to be shared. The law on partnerships in accordance with the Partnership Act of 18901 is that partners equally share profits, losses, control and management of the business. As such, we are of the view that the lower court erred in law and fact when it failed to recognize that the parties needed to share profits and losses in the business. This ground therefor e succeeds. 8.17 Ground (xvi) is that the court erred 1n law and fact when it awarded costs to the respondent after finding that he misconducted himself. Since the appellant has substantially succeeded in this appeal, that the lower court erred to find that there was no partnership agreement, we are of the view that the respondent was erroneously awarded costs by the lower court. We reverse the lower court's award of costs to the respondent. 9.0 Conclusion J 33 9 .1 The net result 1s that the appeal substantially succeeds . The matter is sent back to the learned Registrar for assessment to ascertain what is due t o either party in terms of profits and losses which th e parties incurred in the course of the business. 9 .2 The a ppellant is award ed costs to b e taxed in default of agr eement . . .... . . .... . ~R, >.~ c:iZMAKuN·og·· COURT OF APPEAL JUDGE ...... . 1Qr/J . . . . . . . . . .. .. ~ /' - . . . . . . . .. P. C. M NGULUBE COURT OF APPEAL JUDGE