Tokyo Vehicles Ltd v Competition and Customer Protection Commission (Appeal 179 of 2015) [2018] ZMSC 595 (18 August 2018)

IN THE SUPREME COURT OF ZAMBIA HOLDEN AT KABWE Appeal No. 179/2015 SCZ/8/261/2015 (Civil Jurisdiction) BETWEEN: TOKYO VEHICLES LIMITED APPELLANT AND COMPETITION AND CONSUMER PROTECTION COMMISSION RESPONDENT Coram: Mambilima, CJ, Malila and Musonda, JJS, on 8th August, 2018 and......................... , 2018 For the Appellant: Mr. K. Chenda, Messrs Simeza Sangwa & Associates For the Respondent: Mrs. M. Banda-Mwanza, Director, Legal and Corporate Affairs, Competition and Consumer Protection Commission (CCPC) JUDGMENT MALILA, JS, delivered the Judgment of the Court. Cases referred to: 1. Pamodzi Hotel v. Godwin Mbewe (1987) ZR 56 2. Michael Mabenga v. Sikota Wina, Mafo Wallace Mafiyo and George Samulela (2003) ZR 110. 3. Bater v. Bater (1950) 2 ALL ER 458. 4. Sithole v. The State Lotteries Board (1975) ZR 106. 5. Communications Authority of Zambia v. Vodacom Zambia Limited (2009) ZR 196 at 211. 6. Musuku Kalenga Building Ltd., Winnie Kalenga and Richman’s Money Lenders Enterprises SCZ No. 4 of 1999. 7. Re B (2008) UL HL3. Other works referred to: J2 1. Black’s Law Dictionary (8th edition 2004). 2. Halsbury’s Laws of England (4th edition) Vol. 17(1). This appeal implicates the interpretation of some provisions of the Competition and Consumer Protection Act No. 24 of 2010 (the Act). Though not the most pellucid of statutes, the Act has made a direct and wide ranging impact upon trade, industry and consumer affairs in Zambia, bringing significant innovation in the field of consumer protection and equally substantial changes in the area of competition law. Enforcement of consumer rights can now occur at two levels: first, at a purely private, self -help level, where an aggrieved consumer is at liberty to invoke common or statutory law principles such as those pertaining to the law of tort or sale of goods, to pursue private civil remedies. Second, at the public level where public institutions, such as the respondent in the present appeal, are mandated to undertake measures to protect consumers. Here remedies could be both civil and criminal in nature. J3 In this appeal, an aggrieved consumer chose to invoke the public level machinery to redress his grievances. The appellant is in the business of selling used and new motor vehicles, including agricultural equipment such as tractors. In April 2012, a Mr. Webster Shamfuti (the buyer) purchased from the appellant a Massey Ferguson Tractor, Model 375. Two days after collecting it, he experienced unusual problems with it. The tractor could not start. He thus lodged a complaint with the appellant who promptly dispatched a mechanic to attend to the fault. The mechanic replaced the battery and the tractor was functional again. This, however, was not the end of the buyer’s irritation with the tractor. It in fact was just the first of the many agonizing experiences the buyer was to endure with his ‘new’ acquisition. Some five months after taking possession of the tractor, (on or about the 1st November 2012), the buyer once again had a distressing experience with it. He called the appellant to report a multitude of faults that he had discovered with the tractor. The catalogue of the problems included a hard stirring wheel, a non­ functional indicator and a defective night light. Once again at the J4 request of the buyer a mechanic was sent by the appellant to the buyer’s place. He duly rectified the faults. The buyer’s troubles with the tractor were, however, not over. On 12th November 2012, he reported further faults with the tractor to the appellant. These included a burst water pipe, defective breaks, oil leakages, loose grill bolts and a punctured rear tyre. Yet again, the appellant sent its mechanic to attend to the tractor. The buyer must, however, have had enough of it. Feeling that his patience had been fully tested, he returned the tractor to the appellant on 18th June, 2013 together with the ownership registration document. He did not leave matters there. He also proceeded to lodge a complaint with the respondent in his quest to compel the appellant to refund the purchase price. The respondent considered the buyer’s complaint and, in particular, whether the appellant had violated the provisions of the Act, more specifically section 46(1) and 49(1). It came to the conclusion that the appellant had not engaged in an unfair trade practice contrary to section 46(1) read together with section 45(b) of the Act, nor did it falsely represent that the tractor it sold to the buyer was new, contrary to section 47(a)(iii). However, the J5 respondent held the view that the appellant did engage in the sale of a defective product contrary to section 49(1) of the Act. In consequence of this finding, the appellant was given a written warning to desist from supplying defective products to consumers. The appellant was also ordered to refund to the buyer the sum of KI 16,400 being the purchase price for the tractor. The respondent went further to advise the buyer to pursue in Small Claims Court compensation in the sum of K20,000 from the appellant. The appellant was unhappy with the decision of the respondent and thus appealed to the Competition and Consumer Protection Tribunal (the Tribunal), alleging a series of misdirections and errors on the part of the respondent. In particular, the appellant complained that the respondent was wrong to find that it had committed an offence under section 49(1) of the Act; that the respondent should have considered whether the appellant had made any representations to the buyer prior to the purchase of the tractor and/or whether the buyer had made known to the appellant the particular purpose J6 for which the tractor was required so as to show that the buyer had relied on the appellant’s skill or judgment. The appellant also accused the respondent of failing to investigate and consider evidence of the storage, use and maintenance of the tractor by the buyer or his servants or agents, and the bearing which that might have had on the state of the tractor. Additionally, that the respondent should have considered evidence pertaining to the experiences of other purchasers of similar tractors from the appellant. It was the further contention of the appellant before the Tribunal that the respondent was wrong to have accorded credibility to the buyer’s unsubstantiated claim for compensation in the sum of K20,000 by volunteering advice to the buyer to pursue a claim for such compensation against it in the Small Claims Court. After hearing the parties’ respective cases, the Tribunal made a number of findings. Its view was that section 49(1) of the Act made it a criminal offence for any person to supply to a consumer, goods that are defective or are otherwise not fit for the purpose for which they are normally used. Such offence required J7 to be investigated and proved beyond reasonable doubt. In this case, the respondent did not have sufficient evidence to support the conclusion which it came to that the tractor was inherently defective. The finding of the respondent that the appellant had violated the provisions of the Act was thus reversed. The Tribunal also held that both the respondent and the Tribunal have power and jurisdiction to make a determination that an offence of selling defective goods had been committed under section 49(1) and 49(2) of the Act. As regards the grievance by the appellant relating yo representation, or the absence thereof, by the appellant to the buyer in respect of the condition of the tractor, the Tribunal held that any such representations were irrelevant to answering the question whether a crime had or had not been committed under section 49(1). The Tribunal dismissed the claim by the appellant that the respondent could only have properly come to the conclusion it did if it had cared to consider the experiences of other purchasers of similar tractors from the appellant. In doing so, the Tribunal pertinently observed that the fact that there is absence of defects J8 in tractors sold to other buyers by the appellant did not confirm that the appellant could not sell a defective tractor to the buyer. Concerning the advice given by the respondent to the buyer to seek compensation before the Small Claims Court, the Tribunal held that the respondent was entitled to give such advice by way of, what it called ‘obiter recommendations.’ Aggrieved by the decision of the Tribunal, the respondent appealed to the High Court on three grounds. The first related to the jurisdiction of the respondent and the Tribunal. It was contended that the Tribunal erred both in law and in fact by finding that both the Tribunal and the respondent have criminal jurisdiction pursuant to section 49(1) and 49(2) of the Act. The second ground of appeal was that the Tribunal erred in fact and, therefore, misdirected itself at law by failing to take into account the evidence filed to support the investigations that had been conducted by the respondent. In the final ground, the respondent claimed that the Tribunal erred both in law and in fact by finding that the J9 claimant must seek redress in his individual capacity through another forum, to writ, the Small Claims Court. After hearing the parties and considering the submissions made on their behalf, the learned High Court judge formed the view that the appeal hinged on the broad question whether the respondent and/or the Tribunal, as the case may be, is empowered to hear, make recommendations and determine matters arising under section 49(1) and (2) of the Act. On the issue whether both the Tribunal and the respondent have criminal jurisdiction under the Act, the learned judge held, construing the law as she understood it, that neither the Commission nor the Tribunal had authority to preside over criminal proceedings. As regards the question whether there was a misdirection on the part of the Tribunal when it did not take into account the evidence filed to support the investigations that had been conducted by the respondent, the learned judge agreed that the Tribunal failed to take into account the evidence that supported the investigations conducted by the appellant and thus J10 misdirected itself. In sum the High Court upheld the appeal by the respondent. The appellant was unhappy with the High Court judgment and hence the current appeal. Seven grounds of appeal were enlisted. They were structured thus: GROUND ONE That the court below erred both in law and fact by holding that the whole appeal hinged on the question of whether the Commission and the Tribunal (as the case may be) was empowered to hear, make recommendations, or determine matters arising under section 49(1) and (2) of the Competition and Consumer Protection Act. GROUND TWO That the court below erred in both law and fact by holding that the sanctions which the respondent (herein) or the Tribunal usually imposes on enterprises or persons who have violated any of the provisions of the Act are not criminal but administrative in nature and do not therefore require adjudication by a court of competent jurisdiction. GROUND THREE That the court below erred in law and fact by rejecting the submission that the Tribunal’s remarks which formed the subject of ground 1 of the appeal (below) were made obiter and did not affect the substantive decision of the Tribunal. Jll GROUND FOUR That the court below erred both in law and fact by holding that the Tribunal failed to take into account the evidence that supported the investigations conducted by the respondent herein. GROUND FIVE That the court below erred both in law and fact by holding that the case before it was a proper case in which it could interfere with the findings of fact. GROUND SIX That the court below erred both in law and fact by holding that based on the documentary evidence and even without observing the demeanor of the witnesses, it was clear that the Tribunal misdirected itself. GROUND SEVEN That the court below misdirected itself in law and fact by upholding the appeal and reversing the holding of the Tribunal. At the hearing of the appeal, Mr. Chenda, learned counsel for the appellant, indicated that he was placing reliance on the heads of argument filed in support, as well as the heads of response filed in reply to the arguments in opposition filed on behalf of the respondent. In those heads of arguments grounds 1 and 3 were argued together; grounds four and six were equally considered together while grounds five and seven were argued compositely. J12 In arguing the first set of grounds, we were referred to the meaning of obiter dictum as given in Black’s Law Dictionary and to our decisions in Pamodzi Hotel v. Godwin Mbewe1 as well as Michael Mabenga v. Sikota Wina, Mafo Wallace Mafiyo and George Samulela2. All these authorities do no more than stress the obvious point that an obiter dicta remark is a judicial comment made in the course of rendering a judicial opinion but which is made as a by-the- way comment, not necessary going to the actual decision, and which therefore does not have precedential significance. Turning to the judgment of the lower court, the appellant’s counsel took umbrage with the framing of the issue for determination by the trial judge. He quoted a portion of the lower court’s judgment which reads as follows: Ignoring arguments on the fringes, the question on which this whole appeal hangs is whether the Commission and or the Tribunal as the case may be in empowered to hear, make recommendations or determine matters arising under section 49(1) and (2) of the Act. The point the appellant made was simply this; that the lower court misapprehended the issue that was laid before it for determination. That issue was whether or not the Tribunal was right to hold that both the Tribunal and the respondent have J13 criminal jurisdiction pursuant to section 49(1) and 49(2) of the Act. The learned counsel further quoted what he considered was the ratio decidendi of the decision of the Tribunal in the following statement in the Tribunal’s ruling: We must again emphasize that the Respondent must seriously look into the manner in which, investigations are conducted. As the required standard of proof has not been met, we have no choice but to reverse the finding of the Commission that the tractor was inherently defective. According to the appellant’s learned counsel, it was only after the decision of the Tribunal (in the specific sense of the ratio) that the Tribunal made the statement which apparently was the basis of the trial judge’s formulation of the issue for determination as we have already quoted it. The remark by the Tribunal, coming, according to the learned counsel for the appellant, after the ratio, read as follows: We also hasten to add that we are of the opinion that both the Commission and the Tribunal have the power and jurisdiction to make a determination that an offence of selling defective goods has been committed pursuant to section 49(1) and 49(2) of the Act. This remark by the Tribunal was, in counsel’s view, obiter. It could, therefore, not be the basis for framing by the lower court of the main issue determinative of the appeal as the lower court J14 made it appear to be. The result was that the court was barking up a wrong tree. A further contention on behalf of the appellant was that whatever the answer to the issue raised by the learned judge could not provide the legal basis for reversing the ruling of the Tribunal. Assuming the issue were resolved in the negative, the implication would be that the Commission did not have power to make its decision that the appellant had breached section 49(1) and was a first offender. In that event, the High Court would have been bound to uphold the ruling of the Tribunal which reversed the decision of the Commission. On the other hand, if the question were resolved in the affirmative, then the court below would have had no basis for disagreeing with the obiter remarks of the Tribunal or indeed to use its disagreement with the Tribunal as a basis for reversing the decision of the Tribunal. The argument by the appellant was, in a word, that the lower court framed for itself, an issue which had no bearing on the overall outcome of the matter before it. J15 The final instalment of the appellant’s argument against the lower court as regards ground one was that despite framing for itself an issue it considered as constituting the plinth of the grievance before it, the lower court did not make any determination as to whether the Tribunal and the Commission could hear, make recommendation or determine matters arising under section 49(1) of the Act. It instead focused its energies on section 49(2) of the Act. According to the learned counsel for the appellant, this constituted a critical lapse on the part of the court as the decision of the Commission which caused grief to the appellant was expressed to have been founded on section 49(1) so that by reason of its own question, the court was obligated to pronounce itself on that very section. For the foregoing reasons, we were urged to uphold grounds one and three. The appellant’s learned counsel then turned to argue grounds four and six. The grievance captured in the two grounds is evidentiary in substance. The first point made in support of these grounds was that the standard of proof required in civil matters is not fixed but varies depending on the seriousness of J16 the subject matter. We were referred to paragraph 426 of Halsbury’s Laws of England which states that: To succeed on any issue the party bearing the legal burden of proof must (1) satisfy the judge or jury of the likelihood of the truth of his case by adducing greater weight of evidence than his opponent; and (2) adduce evidence sufficient to satisfy them to the required standard and degree of proof The standard differs in criminal and civil cases. In civil cases the standard of proof is satisfied on a balance of probabilities. However, even within this formula variations in subject matter or in allegations may affect the standard required. It is commonly said that the more serious the allegations, for example fraud, crime or professional misconduct or the sexual abuse of children, the higher will be the required degree of proof. The learned counsel also cited the cases of Bater v. Bater3 and Sithole v. The State Lotteries Board4 to buttress the point. The argument that counsel makes is that a contravention of section 49(1) of the Act is criminalized by section 49(2). It should, therefore, follow that the civil proceedings based on alleged violation of section 49(1) call for a higher standard of proof than simply on a balance of probabilities. Counsel argued that although the Tribunal should not have adopted the criminal standard of proof in a civil matter, it should nonetheless have J17 adopted a higher standard since the allegations were so serious as to be criminalized by law. For this reason, counsel submitted that the court should have upheld the ruling of the Tribunal as the evidence showed that the Commission’s investigations did not bring up sufficient evidence to muster the higher threshold required in the circumstances. The learned counsel referred us to portions of evidence adduced before the Tribunal by a Mrs. Eunice Phiri Hamavhwa, a Research Analyst of the respondent, to persuade us to accept his view that the evidence before the Tribunal did not reach the higher degree of proof dictated by the circumstances of the case. According to counsel for the appellant, the Tribunal had its own serious misgivings with the quality of evidence adduced as weighed against the higher standard required and clearly stated so in its ruling, and yet, the court below concluded that the Tribunal failed to take into account the evidence that supported the investigations conducted by the appellant. He submitted that the evidence was insufficient as it did not even involve the physical inspection of the tractor. The Commission’s J18 investigation, according to the appellant’s counsel, was casual and involved ‘mere desk work exercise’. We were thus implored to uphold grounds four and six. Grounds five and seven both related to overturning findings of fact by an appellate court. In paraphrase, the two grounds take issue with the court’s decision to interfere with the Tribunal’s findings of fact and reversing them. Counsel cited the case of Communications Authority of Zambia v. Vodacom Zambia Limited5 where we re-echoed the point that findings of fact by a lower court will only be reversed where they are perverse or made in the absence of relevant evidence, or upon a misapprehension of facts, or where the findings are such that on a proper view of the evidence, no trial court acting correctly cold reasonably make. According to the learned counsel, none of the established conditions for reversal of a lower court’s findings of fact existed in the present case. We were thus prodded to uphold grounds five and seven of the appeal. The respondent, for its part, filed heads of argument on 7th July, 2016. It is upon those heads of argument that Mrs. Banda- Mwanza, learned counsel for the respondent, intimated she J19 would rely upon to oppose the appeal. Additionally, Mrs. Banda- Mwanza made extensive oral submissions. In reacting to grounds one and three of the appeal, counsel for the respondent supported the decision of the learned High Court judge. She invited us to consider the relief sought by the appellant before the Tribunal following the initial decision of the respondent. According to the leaned counsel, the appellant had implored the Tribunal to make a finding that the respondent had no jurisdiction to determine that the offence of sale of a defective product had been committed contrary to section 49(1) of the Act, and further that a determination be made that an offence in contravention of section 49(1) could only be made by a court of competent jurisdiction. Only upon conviction could the provision of section 49(3) be invoked for a refund to a complainant. The respondent’s position, according to counsel, has always been that as an administrative body, it could not make any determination on issues bordering on criminality as that was a preserve of courts of competent jurisdiction; that the respondent was clothed with authority under section 49(3) of the Act to make determinations without recourse to courts of law as the J20 provision, read together with section 49(1), imputed civil liability which could be effectively dealt with by the respondent using its administrative powers. It was the issue of jurisdiction raised by the appellant that the Tribunal dealt with when it concluded that both the Tribunal and respondent had jurisdiction to determine criminal liability under the Act. Counsel further argued that had the appellant not raised issue with the jurisdiction of the respondent under section 49(3), the Tribunal would not have dealt with the issue in the first place. The short point that counsel for the respondent made was that the framing by the High Court of the issue on jurisdiction arose directly from the finding of the Tribunal, which finding was predicted on the appellant’s challenge of the respondent’s statutory power under the Act in the manner described. The decision on jurisdiction was, according to the appellant’s counsel, not obiter. On a general note it was submitted by the learned counsel for the respondent that the cases cited by counsel for the J21 appellant regarding obiter dicta remarks were inapplicable to the present case. Concerning the argument by the appellant that the lower court made no determination as to whether the respondent and the Tribunal could hear, make recommendations or determine matters arising out of sections 49(1) of the Act, it was contended on behalf of the respondent that the court did in fact address its mind to the question. According to counsel, jurisdiction under section 49(1) can be asserted from two fronts; the criminal front; dictated by the wording of section 49(2), and the civil front, dictated by section 49(3). The court correctly used section 49(2) in dealing with the issue of jurisdiction. We were thus urged to dismiss grounds one and three. Turning to grounds four and six of the appeal, counsel for the respondent again argued that the lower court could not be faulted for the decisions it made as regards the issue of evidence. She referred us to the case of Re B7 on the meaning of proof on a balance of probability and quoted the following passage: If a. legal rule requires a fact to be proved (a fact in issue), a judge or jury must decide whether it happened or not...... if the Tribunal is left J22 in doubt, the doubt is resolved by a rule that one party or the other carries the burden of proof if the party who bears the burden of proof fails to discharge it ..... the fact is treated as not having happened. The learned counsel submitted that the court below properly handled the issue of the standard of proof in the circumstances of the case. That standard was on a balance of probability. She went on to state that this issue was settled by way of submission and at no time did the appellant argue that the evidence should have been considered using a higher standard than on a balance of probabilities. Although the appellant had every opportunity to raise this issue in the lower court, it did not in fact do so. Counsel submitted that on the authority of Mususu Kalenga Building Ltd., Winnie Kalenga and Richman’s Money Lenders Enterprises6, that issue cannot be raised for the first time on appeal and should thus be discounted. Alternatively, counsel argued that the circumstances of the case did not warrant a higher standard of proof than the ordinary civil law one. On the available evidence, the court was able to make an assessment that the tractor supplied to the buyer was more likely than not to be defective. Grounds four and six were J23 to the respondent thus without merit. Counsel prayed that we dismissed them. As regards grounds five and seven, counsel for the respondent agreed with her counterpart’s submission regarding the circumstances in which findings of fact may be upset by an appellate court. She argued however, that this was a proper case to interfere with findings of fact. Counsel quoted a portion of the Tribunal’s ruling which states that had this been a civil offence, it ‘would have ordinarily concluded that the faults in the tractor were as a result of inherent defects on the balance of probability.’ Given that the Tribunal proceeded on the footing that it had jurisdiction to determine criminal cases when in fact not, it made a determination upon a misapprehension of facts which led it to clothe itself with authority that it in fact did not legally have. Its findings were thus amenable to be upset. We were urged to dismiss grounds five and seven as well. Heads of argument in reply were filed on 27 July, 2018. Our reading of those heads of argument reveals that they restated the arguments already made by he appellant’s learned counsel and thus do not take the appellant position any further. J24 The argument of counsel as structured create an impression that the issues for determination in this appeal is unremittingly complex. They are not. Under ground one, the question posed is whether the appeal from the Tribunal to the high Court was about the power of the Commission and the Tribunal to hear, made recommendations, or determine matters arising under section 49(1) and (2) of the Act. In other words, did the lower court’s identification and formulation of the issue, correct - all circumstances considered? Mr. Chenda for the appellant, thinks it was not. Mrs. Banda-Mwanza thinks it was. We do appreciate the logic in Mr. Chenda’s argument that because the lower court wrongly formulated the issue for determination she did not address the real points in contention. Our immediate reaction is that indeed, a wrong prognosis often leads to a wrong prescription. We should, however, hasten to qualify our observation; the prescription is bound to be wrong if and only if the prognosis is wrong. J25 Mrs. Banda-Mwanza did indeed shed some useful light in her submission when she posited that whether the formulation of the issue was appropriate or not. Should be looked at in the context of the appellant’s claim before the Tribunal. The appellant had sought: (a) A declaration that the Competition and Consumer Protection Commission had no jurisdiction to make a determination that the offence of sale of a defective product has been committed contrary to section 49(1) of the Competition and Consumer Protection Act No. 24 of 2010. The Tribunal was asked to make the aforesaid declaration. The focus of the Tribunal’s decision should, therefore, be viewed within the context of the appellant’s prayer in the lower court. Whatever else may have been said or submitted before the Tribunal, the question of the Tribunal’s jurisdiction was, to us, paramount. Indeed, an examination of the remainder of the appellant’s prayers before the Tribunal reveals that they were all related to, or connected to the declaration sought on the issue of the jurisdiction of the Tribunal. They were structured thus: (a) A declaration that a determination that an offence has been committed by contravention of section 49(1) of the Competition and Consumer Protection Act No. 24 of 2010 can only be made by a court J26 of competent jurisdiction and only upon conviction, can the provisions of section 49(3) be invoked for a refund to a complainant; (b) Alternatively, a declaration that the circumstances of the case do not support a finding that the appellant had breached the provisions of section 49(1) of the Competition and Consumer Protection Act No. 24 of 2010; and (c) An order that the relevant parts of the decision of the Competition and Consumer Protection Commission delivered at Lusaka on 26 August, 2013 in respect of a complaint by Webster D. Shamfuti be guashed or set aside. Can it then be said that by stating, as it did, that the appeal rested on whether or not the Commission and the Tribunal could make determinations under sections 49(1) and (2) of the Act, the lower court missed the essence of the appeal? We think not. In our view, this formulation of the issue speaks to the question of the jurisdiction of the respondent. Put differently the question was whether the respondent had jurisdiction, civil or criminal to make determinations under the stated sections. This was a fundamental issue in the determination of the whole appeal. Arising from the broad question regarding the mandate of the Commission generally were the subsidiary issues whether such mandate covered the exercise of judicial junctions, or J27 anything like it; or was confined to administrative action. Further, subsidiary questions arising had to do with the preconditions for exercising any powers that the Act conferred on the respondent. It is in this connection that we see questions of the standard of proof being relevant. We, therefore, hold the view that the lower court did not formulate a wrong issue when it stated that the appeal hinged on whether or not the Commission or the Tribunal was empowered to hear and determine complaints under sections 49(1) and 49(2) of the Act. Ground one has no merit and it is dismissed.