Ye Xudong (Male) v Glenn Wright (Male) and Anor (2018/HPC/0279) [2020] ZMHC 436 (30 August 2020)

IN THE HIGH COURT FOR ZAMBIA 2018/HPC/0279 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: YE XUDONG (MALE) PLAINTIFF AND GLENN WRIGHT (MALE) AIDEN GEORGE WRIGHT 1 ST DEFENDANT 2ND DEFENDANT Before the Hon. Mrs. Justice Irene Zeko Mbewe in Open Court Appearances: For the Plaintiff: Mr Z Sinkala of Messrs Muleza Mwiimbu and Company For the Defendants: Mr George C Musonda of Messrs Dzekedzeke & Company JUDGMENT Cases referred to: 1. Mahabir Kishore & Madhya Paradesh (1990) AIR 313 2. Moses v Mac/er/an [1760} 2 BURR 3. Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Limited (1943) A. C. 32 4. Zambia Extracts Oils v ZSIC Pension Scheme Board of Trustees 5. Edman Banda v Lungu Selected Judgment No 22 of 2017 6. Mohamed ltowala v Variety Bureau De Change Limited SCZ Judgment No 15 o/2001 7. Patel v Mirza[2016] UKSC 42 8. Saunders v Edwards [1987] 1 WLR 1116 at 1134 9. Neville v Wilkinson [1782} 1 Br CC 543 at 547 J1 I Page I I i I I I I 10. BV Nederlandse Jndustrie Van Eiproduckten v Rembrandt Enterprises Limited [2018) EWHC 1857 Legislation and other works referred to: 1. Control of Goods (Import and Export) (Forest Produce) Prohibition of Importation) Order No.13 of 2017 2. Hals bury Law 's of England 3rd Edition Volume 8 By writ of summons and statement of claim the Plaintiff claims for: (i) Payment of the sum of US$481 ,050.00 ZMW70,054.00 and South African Rand R20,000.00 respectively on account of money had and received by the Defendants for use of the Plaintiff. Damages for fraudulent misrepresentation Damages for loss of use of funds. Any other relief the Court may deem fit. Interest on sums payable at the current Bank of Zambia lending rate; (ii) (iii) (iv) (v) and (vi) Costs. Plaintifrs case The Plaintiffs claim as pleaded in the statement of claim is that he met the Defendants and entered into a contract where the Defendant would secure and export 21 containers of mukula logs CIF from Lusaka to China through Dubai. According to the Plaintiff, the contract was partially in writing, orally and by conduct. In a written agreement dated 29111 May 2016 between the Plaintiff, Lucy Xe on the one part and the Defendants on the other part, the terms of payment was US$24,000.00 for each container payable to the Defendant of which a down J2 I Page payment of US$15,000.00 consideration would be made by the Plaintiff, with a further US$5,000.00 upon the container reaching Durban, South Africa and a final payment of US$4,000.00 upon receiving the requisite bill of lading. The Plaintiff pleaded that the Defendant had made out that the timber to be conveyed was properly licensed for export whilst not. According to the Plaintiff in complete reliance of the Defendants fraudulent misrepresentation, the Plaintiff made several payments covering the period 29th May 2016 to 26th February 2018 totaling US$481,050.00. It is further pleaded that some amounts were paid to the 1 st Defendant's wife and daughter who signed and collected payments from the Plaintiff on behalf of the 1 st Defendant. It is the Plaintiff's case that on 2nd February 2018, the Defendants delivered two 40-foot containers whose content on the bill of lading No. 320830003014 was described as containing 600 pieces of African wood and on arrival in China it was discovered to contain concrete 6" blocks. It is the Plaintiffs case that the Defendants have refused, failed or neglected to deliver the timber or refused to pay the Plaintiff the sum of US$481,050.00, ZMW70,054.00 and South African Rand R20,000.00 despite making undertakings to settle the said amounts. (• Consequently, the Plaintiff suffered loss and damage. Defendants' case The Defendants' filed a defence and counter claim on 8th August 2018 in which it is pleaded the Plaintiff introduced himself as a businessman living in Botswana and supplied plastic shoes on wholesale to various markets in Lusaka. According to the Defendants, they never introduced themselves as duly registered businessmen dealing in raw timber or as having a licence to export mukula logs. J3 I P age It is pleaded that the Plaintiff approached the 2nd Defendant seeking information on exportation of mukula logs and the 2nd Defendant indicated to the Plaintiff he did not know much about the timber industry and introduced the Plaintiff to James Chamanangwe a timber dealer whom he later learnt that his real name was Bright Chipisa. According to the Defendants, the Plaintiff asked the 2nd Defendant to act as his agent. Although there was no contract entered into between the parties, the Plaintiff agreed to buy 10 containers of mukula logs from the said James Chamanangwe out of which the 2nd Defendant was to get US$13,500.00 per container as agent fees. It is stated that the containers were to be delivered to South Africa then to China, and at the time of contracting, 6 containers were already enroute to South Africa whilst 4 containers were at Chirundu border post. According to the Defendants, the Plaintiff, James Chamanangwe and the 2nd Defendant travelled to Chirundu to check on the 4 containers. When the containers were transported the Plaintiff gave the 2nd Defendant US$7,000.00 for logistics as the 2nd Defendant had to travel to South Africa. In addition to that, the Plaintiff purchased 3 more containers of mukula logs from James Chamanangwe and all the 13 containers were delivered to South Africa. In respect to the contract dated 29th May 2016, it is pleaded that the same related to an earlier agreement between the Plaintiff and the 2nd Defendant wherein the Plaintiff contracted Ackson Tembo a timber dealer to purchase 3 containers of mukula Jogs. In the said contract the 2nd Defendant played the role of an agent. The Defendants denied the assertion that they presented documents purporting to be valid licences for the trade and exportation of mukula logs. The Defendants alleged the subsequent money the 2nd Defendant received was for costs incurred in his capacity as the Plaintiffs agent whilst in police custody in Namibia. J4 IP age The Defendants alleged it was agreed the Plaintiff would pay 2nd Defendant US$13,500.00 per container of mukula logs and 13 containers were delivered to South Africa bringing the total sum payable to the 2nd Defendant to US$144,000.00 out of which the Plaintiff only paid US$31,500.00 leaving a balance of US$112,500.00. According to the Defendants at the instance of the Plaintiff the 1 st Defendant was arrested and detained at Kabwata Police Station for a period of 14 days without charge. The Defendants stated that their names had been put in disrepute by the Plaintiff's accusations published on various social media platforms which publication had caused the Defendants anguish, shame and loss of business as companies and individuals were reluctant to do business with them. Further, that the 2nd Defendant was arrested and detained in Namibia whilst performing his duty as the Plaintiff's agent and upon learning about the 2 nd Defendant' s arrest the Plaintiff sent money to the I st Defendant which money was insufficient leading to the 2nd Defendant borrowing money from the 1 st Defendant for legal fees relating to his case in Namibia. It is the Defendants! case that when the 2nd Defendant was arrested, the pt Defendant rented a motor vehicle BMW X5 registration number AJD 3104 which he used to travel to Namibia to assist the 2nd Defendant. Further, the said vehicle had a damaged gear box resulting in the 1 st Defendant incurring repair costs of R45,000.00 and the 2nd Defendant had additionally suffered special damages for transport, lodging, legal representation for trips to Namibia to attend Court. The 2nd Defendant stated the Plaintiff assigned him to source mukula logs in the Democratic Republic of Congo and Uganda, and a sum of ZMW4,000.00 was advanced by the Plaintiff which was not enough prompting the 2nd Defendant to borrow more money from the l st Defendant. Premised on the foregoing, the Defendants counterclaimed for: JS I Page v,fl 1. Payment ofUS$112,500.00 being the outstanding amount owed to the 2nd Defendant as agent fees for the delivery of 13 containers of mukula tree logs. 11. Damages for trespass on the home of the Defendants. Ill. Damages for ruining the Defendants' business reputation and loss of business amounting to ZMW7,685,000.00. IV. Payment of ZMW389,958,000.00 being special damages incurred m Namibia. • V . Payment of ZMW8,400.00 being special damages incurred m the Democratic Republic of Congo and Uganda. VI. Payment of ZMW66,000.00 being special damages for causing malicious article to be published. vn. Interest. vm. Any other relief the Court may deem fit. 1x. Costs. PJaintifrs evidence At the trial the Plaintiff was the sole witness. He adopted his witness statement as his evidence in chief which had similar averments as in the statement of claim. In cross examination, PWI stated he was in Zambia at the time the agreement was signed (page 2 Plaintiffs bundle of documents). When queried as to whether he was physically present at the time the contract was executed, the Plaintiff denied inserting his name after the contract was already executed by the other parties. The Plaintiff admitted including the claim for transportation of maize bran from Botswana to Zambia. He conceded he had no contract with Enviro Options Limited but that it is the 1 st Defendant that instructed him where to pay the money and relied on the receipts whose narrative showed logistics. J6 I P age In respect to the sum of US$2400, PWl stated the 1 st Defendant had told him of the 2nd Defendant' s arrest in Namibia and borrowed money for purposes of assisting the 2nd Defendant. As to the payment of US$28,000.00, PWI testified it related to the purchase of timber from Namibia hence the lump sum (page 4 7 Plaintiff's bundle of documents). PWl maintained that in 2015 the Defendants delivered timber to him once, whilst the timber delivered in 2016 by the Defendants was not included in his current claim. When asked whether he received 2 containers of timber in 2017, PWI responded negatively and stated the concrete blocks were instead supplied after paying a sum of US$47,000.00. According to PWl , the Defendants had different tricks of obtaining money from him by alleging it was for logistics. He maintained that in 2018 he only received one container of mukula logs where he paid US$30,600.00. As to whether he had a licence to deal in mukula logs, the Plaintiff responded in the negative and stated that at the material time there was no restriction in dealing (ff with mukula. He further maintained the Defendants had intimated to him they had a special licence for moving goods to South Africa and that the mukula logs were to be exported to China through Durban. The Plaintiff told the Court that whilst in Durban he was shown a sealed container in a warehouse but never inspected the containers. He maintained that what he saw in Durban was timber and not concrete blocks. As to the US$37,000.00 he advanced to the 2nd Defendant, he testified the 2nd Defendant pledged a Mercedes Benz vehicle as collateral which vehicle was J7 I Pa g e taken away by the 1 st Defendant, Subsequently, the 1 st Defendant signed an agreement that he would pay back the loan. In re-examination, PW 1 stated he was in constant touch with the 1 st Defendant. He maintained he was physically present at the initial signing of the contract and that is why he had a copy of the contract. Further, that on 8th February 2018, the 1 st Defendant took him to a certain office and told him to pay for the shipping of 2 containers but what he received were concrete blocks instead. The Plaintiff further stated the 1 st Defendant made him make payments to Enviro Options Limited. In respect to the 2 containers received in China, he reiterated one had firewood which the 1 st Defendant refunded whilst the other later 2 containers had concrete blocks. 1 st Defendant's evidence The I st Defendant Glenn Wright (DWl) filed a witness statement which is similar to the averments in his defence and counterclaim. Under cross examination, DWI confirmed he had no proof before Court to show that the 2nd Defendant was engaged in a business transaction with a gentleman named Richard. The witness also admitted he did not have evidence to prove the money sent by the Plaintiff through him was meant to assist with the 2nd Defendant's legal fees. DW1 equally did not have proof that he hired a motor vehicle to Namibia or he spent R45,000.00 to repair the said vehicle. He further admitted he was not privy to the contract between the Plaintiff and the 2nd Defendant, neither did he confirm from the Plaintiff if the 2nd Defendant was owed money. In respect to his averment in the witness statement that the Plaintiff went to his residence and forced himself in DWI 's house in search of the 2nd Defendant, J8 IP age DWI stated he reported the incident to Inspector Phiri at Kabwata Police Station but had not taken the matter to Court. DWI confirmed he is currently charged with one count of obtaining money by false pretences in which the Plaintiff is claiming money paid to the 1 st Defendant for timber. DWI confirmed he had no evidence before Court that the Plaintiff was behind the publication of the malicious articles on social media platforms particularly the Zambian Watchdog and Mwebantu media. When queried as to whether he had proof the US$47,000.00 for timber was collected by James Chamanangwa, the !51 Defendant responded in the negative. He conceded he did not produce any evidence to show the logistics expenses of shipping, transportation and accommodation as alleged. He also conceded he had no proof he gave the Plaintiff any bill of lading in respect to the timber as the 2nd Defendant had all the documents and it was not his responsibility to procure the said documentation. In re-examination, DWI reiterated that the Plaintiffs claim was frivolous. 2 nd Defendant's evidence Aiden George Wright (DW2) in his examination in chief equally placed reliance on his witness statement filed into Court on 15th January 2019. In cross examination, DW2 admitted he is a dual citizen being Irish and Zambian. It was his testimony that he had known James Chamanangwa since February 2016 with whom he shared a business relationship. DW2 testified he dealt in sourcing and selling timber particularly mukula and rosewood together with James Chamanangwa and never had a special licence for the said business hence he subcontracted James Chamanangwa. DW2 testified he was no longer in that line of business and his last business transaction was in 2016 when he dealt with the Plaintiff. J9 I P a ge In further cross examination, DW2 stated he did not have proof before Court to show he had been retained by the Plaintiff to act as his agent. Further, he discovered in 2017 the real name of James Chamanangwa was in fact Bright Chipisa. When questioned as to his alleged duty as an agent of the Plaintiff, DW2 admitted that as an agent he owed the Plaintiff a duty of conducting a due diligence on James Chamanangwa regarding his name, validity of licence and whether or not he was a fraud before introducing him to his principal the Plaintiff. In further cross examination, DW2 stated the containers used to transport the mukula logs belonged to James Chamanangwa although there was no evidence to support this assertion. DW2 admitted he had not produced any documentation from Zambia Revenue Authority such as bills of lading or export permits to show that 10 containers left Zambia through the Chirundu border and were delivered in South Africa. He further stated that whilst in South Africa he used a shipping company owned by a lady called Ashney to move the containers from Durban to China at the cost of about R120,000.00 but he had no evidence before Court to prove this. Still in cross examination, DW2 stated he engaged a gentleman called Tiven Ganesh with the hope of contracting him to ship containers from Durban to China and money was paid to his company known as Kand K Solutions Limited. DW2 stated that four containers were shipped to China through MSC shipping line, however DW2 did not produce evidence to support this assertion. When asked as to whether he had shipped a container of concrete blocks to China, DW2 responded in the negative. DW2 further admitted that when the containers were opened in China it was discovered there were 300 concrete building blocks and 600 pieces of African wood instead of timber which was declared at the time of shipping. JlO I Pag e Additionally, DW2 stated he did not have evidence to show the containers which were loaded with timber were tampered with or that the seals were broken. DW2 confirmed he checked with P ACRA to verify that FTZ logistics belonged to James Chamanangwa though he did not have proof to substantiate this claim. In respect to the contract dated 29th May 2016, DW2 stated the Plaintiff was not the buyer and despite the Plaintiffs signature and name appearing on the contract, the Plaintiff was never present when it was signed. DW2 told the Court he delivered 3 containers to Lucy Xe who was the other buyer stated on the contract. It was DW2's testimony that according to his witness statement he had indicated that the 3 containers were delivered to the Plaintiff and Lucy Xe instructed DW2 to give the bills to the Plaintiff. Further, DW2 confinned he did not have proof to show he was tasked by the Plaintiff to go and source for mukula logs in Namibia. DW2 admitted that in Namibia he was charged with the offence of theft of timber and the Plaintiff did not task him to steal the said timber. Further, DW2 confirmed he did not have proof he was tasked by the Plaintiff to go to the Democratic Republic of Congo and Uganda to source mukula logs. He stated he informed the authorities in Namibia he was acting on behalf of the Plaintiff and conceded that the Plaintiff had never been questioned by the said t, authorities. In continued cross examination DW2 stated he is a director and majority shareholder of Enviro Options Limited which had a verbal contract with the Plaintiff for the supply of maize brand. While answering further questions under cross examination, DW2 admitted he issued a receipt to the Plaintiff on 6th June 2016 following which the Plaintiff advanced a sum of ZMW20,000.00 to DW2 on behalf ofEnviro Options Limited. Further, DW2 stated he issued a receipt ofUS$300.00 to the Plaintiff for booking Jll I P a g e 3 containers from CMCJ shipping line on behalf of the Plaintiff and that this agreement was a verbal one. It was DW2's testimony that all payments to Enviro Options Limited were based on verbal contracts. DW2 stated that Ms. Hassen from South Africa in her presence gave the Plaintiff 3 copies of a bill of lading for some containers that were to be shipped to China. DW2 testified that prior to this incident he had spoken to Ms. Hassen on the phone but only met her for the first time when she handed the bill of lading number MSCU 4875792 issued on 9 th July 2017 to the Plaintiff. DW2 admitted that the system showed the original bill oflading issued ~ on that number was for a different cargo, different parties and particulars. In conclusion in respect to his counterclaim, DW2 admitted he had not produced any receipt or document to support the special damages. He further confirmed having received the specified amounts (pages 17 to 47 of the Plaintiffs bundle of documents). In re-examination, DW2 clarified that the Plaintiff had attached his signature and name beforehand and not in the presence of DW2. When queried on the email from Tiven Ganesh explaining what had transpired in Durban, DW2 stated that it came from tiven.g06@gmail.com (page 105 of the Plaintift's bundle of (. documents). This marked the end of the Defendants' case. The parties filed their respective written submissions. Plaintiff's submission The gist of the Plaintiffs submission in the circumstances of this case, the Defendant is obliged by the rules of natural justice and equity to make restitution as the Plaintiffs case is premised on the principle of unjust enrichment. My attention was drawn to the persuasive Indian case of Mahabir Kishore & Madhya J12 I Pa g e Paradesh (1990) AIR 3 J 3(1), where the requirements of unjust enrichment were stated as follows: "First that the Defendant has been enriched by the receipt of a benefit, secondly that this enrichment is at the expense of the Plaintiff and thirdly that the retention of the enrichment is unjust. " The Plaintiff submits the claim is for money had and received given to the Defendants as consideration for acquisition of timber and due to the Defendants' failure to provide consideration by providing timber as agreed, the Defendants have no cause to continue retaining the money paid by the Plaintiff. It is therefore the Plaintiffs contention he has sufficiently demonstrated to the Court that payments were made to the Defendants herein and the Plaintiff must be allowed to recover his monies back. Lending his support to this proposition, reliance was placed on the case of Moses v Mac/er/an [1 760} 2 BURR(2), where it was stated that: "This kind of equitable action to recover back money which ought not in justice to be kept is very beneficial, and therefore much encouraged. It lies for money which, ex aequo et bona, the Defendant ought to refund; it does not lie for money paid by the Plaintiff, which is claimed of him as payable in point of honour and honesty, although it could not have been recovered from him by any course of law,· ... the gist of this kind of action is that the Defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money. " Counsel for the Plaintiff further relied on the English case of Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Limited (1943) A. C. 32r1J, where it was held that: "When one is considering the law of failure of consideration and of the quasi-contractual right to recover money on that ground, it is generally J13 I Pa ge speaking, not the promise which is referred to as the consideration, but the performance of the promise. " Premised on the foregoing, Counsel for the Plaintiff submits that the Plaintiff has discharged the onus of proof on a balance of probabilities on the claims laid against the Defendants whilst the Defendants have failed to prove their claims as raised in the counterclaim against the Plaintiff, as such the same should be dismissed with costs to the Plaintiff. Defendants' submission Counsel for the Defendants submits that the Plaintiff admitted in Court of receiving some containers of mukula logs from DW2 but did not show the Court which of the two contracts were performed. Further, the evidence on record as testified by DWI is that both contracts were performed to the satisfaction of the Plaintiff and that had the first contract failed, he would have not been releasing more funds to the Defendants. Counsel argues that Enviro Options Limited is a separate legal entity capable of being sued, hence the Plaintiffs claim against the Defendants should be rendered irregular at law. It is further submitted the transactions entered into between July 2017 and March 2018 are void and illegal as there was a ban on licences for harvesting, trading and exportation of mukula logs and that permits for importation of mukula were equally revoked. Lending his support to this argument, Counsel for the Defendants referred to the Control of Goods (Import and Export) (Forest Produce) Prohibition of Importation) Order No.13 of 2017. Counsel for the Defendants further submits that where the illegal purpose has been substantially carried out, there can be no recovery of money or property passing under illegal contract. The Defendants' prayed the Court should find in their favour and dismiss the Plaintiff's claim with costs. J14 I Page • Analysis From the pleadings, the evidence led by the parties, arguments raised and the written submissions, the issues for determination can be succinctly distilled as follows: 1. Whether there is illegality in the contract between the parties and whether a party can rely on the illegal aspect of the contract to avoid liability more especially where he has derived some benefit. 2. Whether there was fraudulent misrepresentation on the part of the Defendants . 3. Whether the Plaintiff is entitled to the claims. 4. Whether the Defendants are entitled to their claims stated m the counterclaim. By way of a contract dated 29th May 2016, the Plaintiff and Xu Lucy both as buyer entered into a contract with the 2nd Defendant as a supplier for the export of 21 containers of mukula logs between the parties. The written contract states as follows : Contract 1. The timber should have no holes and straight 2. The timber must have no white colour circle 3. The length of the timber must be 2.5m lo 3m 4. The diameter mist be 2 5cm and above 5. The container must be 24 tons and above 6. Each container will be sold to the buyer at $24000 7. The buyer will pay $15,000 first then $5000 second when the container is in South Africa (Durban) and the final of $4000 When the bill of lading is issued to the buyer J15 I Page 8. The supplier will provide all the goods and transportation to the buyer's port of choice upon receiving the first payment of $15000. Illegality of contract For starters, as raised by Counsel for the Defendants who made heavy weather of it, I shall deal with the issue of illegality of the contract between the parties Depending on my findings the issue of illegality if proved may terminate the matter almost immediately. The background to the issue on illegality is premised on the fact that at the material time the Plaintiff and Defendants contracted, the selling and exportation of mukula logs required a special licence pursuant to the Control of Goods (Import and Export) (Forest produce) Prohibition of Importation Order No 13 of 2017. I have taken judicial notice of the Control of Goods (Import and Export) (Forest Produce) Prohibition of Importation} Order No.13 of 2017. According to the Plaintiff and the avennents in paragraph 6 of his statement of claim, it was an express term of the oral contract premised on the Defendants representation that the timber to be conveyed was properly licensed for export. At trial, the Plaintiff testified he believed the Defendant had the necessary permits to sell the mukula logs. The Plaintiff further testified that in 2016 there was no restriction on the sell and export of mukula logs in Zambia which position I agree with. He further testified the 2nd Defendant infom1ed him that he had a special licence for moving goods to South Africa and in 2017 he stopped due to the ban. Low and behold, it is the Defendants that have brought up the issue of illegality. Both Defendants denied having any special licence to export mukula. Where does this leave the Plaintiff? J16 I Page In discussing illegality, the Supreme Court in the case of Zambia Extracts Oils and Colourant v ZSJC Pension Trust Board of Trustees Selected Judgment No 31 of 2016 r4J, observed that: "What is required in each case is an intense analysis of the particular facts and of the proper application of the various policy considerations underlying the illegality principle so as to produce a just and proportionate response to the illegality. " The same issue was similarly addressed in the case of Edman Banda v Lungu Selected Judgment No 22 of 2017r5J after referring to the case of Mohamed Jtowala v Variety Bureau De Change Limited SCZ Judgment No 15 of 2001(6 ), where the Supreme Court stated as follows: " The mere fact of proof of illegality having tainted a contract would not always render such a contract void and unenforceable. Put differently, an othenvise illegal contract would be enforced by a Court of law where factors or considerations exist which militate against refusal to enforce. " • At common law, the enforcement of illegal contracts has been addressed in the case of Patel v Mirza [2016} UKSC 42r7J a persuasive authority where the Supreme Court stated that: ''just as policy considerations would bar a claimant from enforcing an illegal contract, the same considerations should not allow a defendant who has benefitted from such a contract to possess or keep what he has been paid under the contract in the Court's view a cause based on unjust enrichment is sustainable. J17 IP age In the same case, Lord Toulson proceeded to state that: "Looking behind the maxims, there are 2 broad discernible policy reasons for the common law doctrine of illegality as a defence to a counterclaim. One is that a person should not be allowed to profit from his own wrongdoing. The other, linked consideration is that the law should be coherent and not self-defeating, condoning illegality by giving with the left hand what it takes with the right hand" Bingham LJ in Saunders v Edwards [I 987} I WLR 1116 at 1134(BJ addressed the issue of illegality as follows: " Where issues of illegality are raised, the Courts have as it seems to me to steer a middle course between 2 unacceptable positions. On the one hand it in unacceptable that any court of law should aid or lend its authority to a party seeking to pursue or enforce an object or agreement which the law prohibits. On the other hand, it is unacceptable that the court should on the first indication of unlawfulness affecting any aspect of a transaction, draw up its skirts and refuse all assistance to the Plaintiff, no matter how serious his loss nor disproportionate his loss to the unlawfulness of his conduct." The above excerpts are true statements of the law and I totally agree and adopt them as my own. It is not lost to this Court that the subject Order was promulgated in 2017 and the effect of Orders 3 and 4 made it illegal to deal, export or import mukula without a permit. In my considered view, the legislative intent is to penalize those who do so without a permit and it is so expressly stated. The fact that defaulters are criminally culpable and liable to conviction clearly underscores the gravity attached to dealing with mukula logs. J18 I Page In looking at public policy and as stated in the cited authorities, I cannot allow the Defendants to profit from their own wrongdoing as that will defeat the course of justice. The other linked consideration is that the law should be coherent and not self-defeating condoning illegality by giving with the left hand what it takes with the right hand. I am equally mindful that I must abide by the terms of the subsidiary legislation and have regard to the nature and circumstances of the illegal conduct, if any, in determining whether the public interest in preserving the integrity of the justice system should result in denial of the relief claimed. I do not accede to the illegality argument advanced by Counsel for the Defendants as I am satisfied that the parties entered into several agreements which by the parties' conduct were intended to be binding on the parties. Any dealings between 29th May 2016 and 2017 when the subsidiary legislation was promulgated were permissible under the law. A reading of the Order shows that a person could still deal, export and import mukula under a special permit. It is my finding that the onus of proof of illegality shifted to the Defendants who had to establish the truth but failed to substantiate that contention beyond merely alleging illegality. The Court shall not shy away and refuse assistance to the • Plaintiff. I shall proceed on the basis that the dealings between the parties herein was legal and binding. Money had and received The Plaintiff claims for the payment of the sum of US$481,050.00 ZMW70,054.00 and South African Rand R20,000.00 respectively on account of money had and received by the Defendants for use of the Plaintiff. J191P ag e For the Plaintiff to recover there must be evidence of the payment sought to be recovered. According to the learned authors of Halsbury 's Laws of England, 3'd Edition Volume 8 paragraph 408: "The principle is one where one person has received money from another under circumstances and is regarded in law as having received it to the use of that other. The law implies a promise on his part and imposes an obligation upon him to make payment to the person entitled. In default the rightful owner may maintain an action for money had and received." As guided by the exposed excerpt, a claim for the return of money paid over in an illegal contract may take the form inter alia of a personal restitutionary claim for money had and received. It is on record that the Plaintiff approached the Defendants for the supply of mukula logs. It is not in dispute that there was a contractual relationship between the Plaintiff and Defendants herein. There was offer, acceptance and consideration, including intention to create legal obligation as discerned from the contract of29th May 2016, and the receipts tendered as evidence in the Plaintiff's - bundle of documents prove a contractual relationship between the parties and generally from the parties' ~onduct. According to the Defendants the contract dated 29th May 2016 related to an earlier agreement between the Plaintiff and 2nd Defendant where the Plaintiff contracted with Ackson Tembo to purchase 3 containers ofmukula tree logs. I quickly dispel this assertion as from the terms of the written contract dated 29th May 2016, there is no evidence to suggest a Ackson Tembo was involved. J20 I Page Counsel for the Defendants further argued that the Plaintiff admitted in Court of receiving some containers of mukula logs from DW2 but did not show the Court which of the two contracts were performed. DWI testified that both contracts were performed to the satisfaction of the PWl and had the first contract failed, PW 1 would not have released more money to the D~fendants. I find this reasoning flawed as will become apparent. • In determining which contract was performed and the amounts being claimed by the Plaintiff, in cross examination he was categorical that in 2016 the Defendants delivered timber once and he had not included it in his claim before Court. In 2015, the Plaintiff received some containers of timber and monies paid were not part of this claim. The Plaintiff clarified that on the 8th February 2018 he received 2 containers of concrete blocks which is inter alia the subject of his present claim. I am inclined to believe the Plaintiff that he excluded monies paid. Conversely, DW2 testified he had delivered as per contract though he had no proof or any documentation pertaining to the four containers he alleged left Zambia nor did he have any proof of the exportation of a further six containers to the Plaintiff. At one point the 2nd Defendant testified he was not sure whether the seals were tampered with or broken. DW2 agreed that seals put on containers are only broken when they reached their final destination and each has a serial number. DW2 also failed to explain how the container had concrete blocks and not mukula logs. This leads me to conclude the containers were never tampered with from Durban to China. A careful perusal of the record shows a bill of lading No 320830003014 from Evergreen Line addressed to FTZ Logistics (page 2 Plaintiffs bundle of documents). The narrative shows 2 x 40 HC containers containing 600 pieces of African wood. I find DW2 was responsible for the consignment and its J21 I Page transportation from Lusaka to China and the bill of lading was prepared on his instruction. A cursory glance at the inspection certificate of quality shows the description of goods as mukula logs. The results of inspection show that the actual goods are cement bricks, 8 bundles and are inconsistent with the declaration, and the conclusion was that the situation of unmatched goods existed before discharge. The inspection certificate of quality also refers to the same bill of lading EGLV320830003014 (page 3 Plaintiffs bundle of documents). This supports my finding the containers that DW2 purport had a consignment of mukula logs did not actually have the mukula logs in it. Still on the bill of lading, the Plaintiff testified he was never availed a copy even though D W2 had assured him he would be given one. This assertion was vehemently denied by DW2 in cross examination and conceded he never gave the Plaintiff any bill of lading in his capacity as his purported agent. I accept the explanation of the shipping company which inter alia stated the role the 2nd Defendant played whilst the containers were in Durban, and that the • description of the goods on the bill of lading was inconsistent with what was found in the container when the carrier Evergreen Line docked in China (page I 05 Plaintiffs bundle of documents). I am disinclined to believe the evidence of DW2 that African timber was shipped to China as the documentary evidence proves otherwise. This clearly shows that the 2nd Defendant did not act in good faith. I find DW2 to be unreliable and flip flopped on many issues as is apparent in the body of this Judgment. All the while, the Court would have benefitted from DW2 's evidence which was never J22 I Page forthcoming. I believe the Plaintiffs evidence that he received containers of 6" concrete blocks and not the mukula logs. DW2 was emphatic he was purely the Plaintiffs agent in the supply of timber. On his part the Plaintiff denied ever appointing DW2 as his agent. Despite this assertion, DW2 had no proof of this agency relationship and I was unable to discern it from conduct or otherwise. • Coming back to the mam issue, the Plaintiff testified that despite several payments to the 2nd Defendant the Defendants have not delivered any of the mukula to the Plaintiff or the bill of lading as agreed. In paragraph 11 of the defence and counterclaim, the Defendants pleaded the timber in question was delivered and that monies paid by the Plaintiff went towards logistics and part payment of agent's fees owed to the 2nd Defendant. This position was also reiterated by DW2 in cross-examination. The purpose of which the money is received is relevant to the principle of money had and received. The Court weighed in on these principles in the persuasive case of Neville v Wilkinson [1782) 1 Br CC 543 at 547(9) where Lord Thurlow • LC declared his opinion that: "in all cases where money was paid for an unlawful purpose, the party, though particeps crimins, might recover at law,· and that the reason was, that if courts of justice mean to prevent the perpetration of crimes, it must not by allowing a man who has possession to remain in possession, but by putting the parties back to the state in which they were before. " The Plaintiff testified he paid the 2nd Defendant's agents Enviro Options where the 2nd Defendant is in fact a majority shareholder and director. The Plaintiff J23 IP age • • produced several receipts issued by Enviro Options with different narratives. I have perused the documentary evidence which shows that the receipt of money was acknowledged by the 2nd Defendant's daughter and wife who were acting as agents for the 2nd Defendant. I accept this as there is no evidence that there was any independent contract between the recipients of the money and the Plaintiff. There is evidence the Plaintiff was instructed by the Defendants where to make payments. I therefore cannot fault the Plaintiff for having followed the suppliers' instructions (DWl and DW2). The Defendants cannot detach themselves from having received the monies paid by the Plaintiff to their appointed agents . The Plaintiff itemized the amounts paid to the 1 st and 2nd Defendant on diver dates in 2016, 2017 and 2018 which I have put in a table as follows: Date Amount Receipt Description Page No on Plain tiff's bundle of documents 25/07/2016 US$5 150 28/07/20 17 US$4800 11 /08/2017 US$2400 1 st Defendant RSA logistics 2 1/08/2017 US$8200 1 st Defendant RSA logistics 7 26/08/2017 US$ l 5,000 l st Defendant RSA logistics 8 31/08/2017 US$ I 000 l s t Defendant RSA logistics 9 01/09/2017 US$20,000 1 s1 Defendant RSA logistics 10 15/09/2017 US$6000 1 st Defendant RSA logistics 11 19/09/2017 US$2000 1 st Defendant RSA logistics 12 26/09/2017 US$12,000 1 st Defendant RSA logistics 13 J24 I Pag e 30/09/2017 US$25,000 1 st Defendant RSA logistics 13 12/10/2017 US$7000 1 st Defendant RSA logistics 13 17/10/2017 US$ 16,000 1 si Defendant RSA logistics 14 6/ 10/2016 K15,000 1 si Defendant Owing to Plf 15 12/10/2016 K4200 1 st Defendant Travel to 15 12/10/2016 K2500 1 st Defendant 17/ 10/2016 K4000 151 Defendant 21/10/2017 Kl6,000 1 st Defendant 02/11/2017 Kl0,000 1 st Defendant 19/09/2017 US$300 151 Defendant • Walvis Bay 15 10/ 10/2017 US$47,000 1 st Defendant Received on 16 behalf of James for procurement of containers Undated US$7200 2nd Defendant Deposit for 2 17 • 17/ 11 /2017 K16,100, $900 containers On behalf of 18 James for COSCO payment 21/11/2017 US$ l 5,000 2nd Defendant RSA 17/01/2018 US$1460 2nd Defendant 8 containers 12/01/2018 US$3500 2nd Defendant 8 containers operations 19 J25 I P age • • 09/11/2017 US$7500 2nd Defendant Container to 20 17/06/2017 K2500 2nd Defendant Natalie china borrowing from 2nd Defendant 26/05/2017 K5400.00 2nd Defendant Loan to be 22 26/02/2018 US$900 repaid Collected on behalf of 2nd Defendant 19/01/2018 US$2000 Collected by 25 on Stanley behalf of 2nd Defendant 21 /01/2018 US$3000 Collected by 25/01 /2018 US$11,000 Stanley on behalf of 2nd Defendant Collected on behalf of 2nd Defendant by Sing Mark 08/02/2018 US$9 140 Collected by Shipping fees 25 2nd Defendant 29/05/20 16 US$10,000 Enviro Down payment 26 Options for 2 trncks J26 I Page 29/05/2016 US$300 received by 2nd Defendant Enviro Options received by 2nd Defendant For 3 containers 27 • 30/05/2016 US$8500 Enviro Part payment 28 Options for 2 containers 30/05/2016 US$6500 Enviro For 2 trucks 29 Options down payment received by 2nd Defendant 06/06/2016 Kl0,000 Enviro Options For maize bran 30 transport/border received by 2nd Defendant 08/06/2016 US$5000 Enviro Down payment 31 Options received by 2nd Defendant 16/06/2016 US$5000 Enviro Durban down 33 Options payment received by 2nd Defendant 17/06/2016 Kl 8,000 Enviro For fuel and 34 Options border permits received by 2nd Defendant J27 IP age 17/06/2016 US$5000 Enviro Payment for bill 35 Options of lading received by ECMU9227395 2nd Defendant 07/07/2016 US$25,000 Enviro Transport x 4 36 Options trucks down received by payment 2nd Defendant 08/07/2016 OS$2000 Enviro For timber 37 Options down received by payment 2nd Defendant 25/07/2016 US$ 10,000 Enviro Hire of trucks 38 Options to South received by Africa 2nd Defendant 25/07/20 16 US$4 100 Enviro For stock Options received by 2nd Defendant 25/07/2016 US$1400 Enviro For stock Options received by 2nd Defendant 02/08/2016 US$300 Enviro For loads and 41 Options driver received by 2nd Defendant J28 I Page • .. 02/08/2016 US$200 Enviro Options Payment for 42 Richard received by 2nd Defendant 02/08/2016 US$1500 Enviro Balance for 43 Options transport received by 2nd Defendant 05/08/2016 US$1000 Enviro Down 05/08/2016 US$100 Options payment for 3 received by trucks 2nd Defendant Enviro Options Refund US$5000 received by 2nd Defendant • 09/08/2016 US$4500 Enviro Payment of 3 46 Options containers received by 2nd Defendant 25/09/2016 US$28,000 Enviro containers 47 Options in Namibia received by 2nd Defendant The Plaintiff claims a total of US$481,050.00 paid to the Defendants on diver dates for supply of logs and other incidentals such as logistics. The Plaintiff testified that the Defendants used various ways to have him release money to J29 I Page them. In my considered view, the table above as deduced from pages 30-46 of the Plaintiffs bundle of documents shows the number of payments received by either the 1 st or 2 nd Defendant or paid through the 2nd Defendant's agents. In cross examination, the 2nd Defendant conceded that the money was received for his benefit. The Plaintiff further testifi~d he paid the 2nd Defendant a sum of R20,000 whilst in Namibia which he gave to the I st Defendant who purported it would be paid back by the 2nd Defendant. The 2nd Defendant refuted this claim stating the Plaintiff gave this amount as a fonn of assistance to the 2nd Defendant after he was arrested by the Namibian authorities when he went to purchase mukula for the Plaintiff. I find this assertion contrary to the narrative on the receipt which shows that the I st Defendant was to refund the Plaintiff and this never happened. The Plaintiff was categorical that he only claimed for what is outstanding contrary to the Defendants assertions. I have perused the invoices showing the monies paid to the Defendants and I accept them as the true position as the Defendants failed to discredit this evidence. I shall not refuse assistance to the Plaintiff by denying him the relief claimed of money had and received. From the Defendants conduct, it appeared to be a scheme to fleece the Plaintiff by purporting to sell him mukula logs when not. It is my finding that the Plaintiff paid the 2nd Defendant for timber which was never delivered and there was clearly a misdescription of the goods. The money received by the Defendants was never used for the purpose for which it was paid. In my view the Plaintiff has proved that money was had and received by the Defendants who failed to deliver mukula logs, and therefore it is obligatory on the Defendants who received it to refund the Plaintiff the claimed amounts of J30 IP ag e US$481,000.00, R20,000.00 and ZMW70,054.00 (pages 7- 46 of the Plaintiffs bundle of documents). Damages for fraudulent misrepresentation The Plaintiff claims against the Defendants damages for fraudulent misrepresentation. For an action of misrepresentation to succeed, a party must show that a representation was made by another party to him of a statement either oral, in writing or by conduct which is relied upon to his detriment. Where there has been a misrepresentation, it is fraudulent where the misrepresentation was made knowingly, without belief in its truth, or recklessly as to its truth. In the case of BV Nederlandse lndustrie Van Eiprodukten v Rembrandt Enterprises Inc [2018] EWHC 1857°0J, the Court held that the relevant test is whether 'but for' the representation, the representee would not have entered into the contract. In addition, the Court clarified that it is sufficient for a representee to establish that a misrepresentation was a factor in its decision to enter the contract but need not be the only or deciding factor. The alleged fraudulent misrepresentation arose from the Defendants' conduct and statement that they purported to supply mukula logs when they knew it to be false and the Plaintiff ended up with concrete blocks instead. DW2 denied any fraudulent misrepresentation on his part. In cross examination he failed to explain the entries on the bill of lading and failed to satisfy this Court that it had shipped the containers with the mukula logs as the inspection certificate showed otherwise. I accept the Plaintiffs evidence which is supported by documentary evidence showing what was shipped and received in China was different from what had J31 I Page been paid for by the Plaintiff. I have no hesitation in finding in favour of the Plaintiff for damages for fraudulent misrepresentation to be assessed by the Registrar. Damages for loss of use of funds The Plaintiff claims against the Defendants for loss of use of funds. The Plaintiff averred he paid monies to the Defendants for the supply of mukula which was never delivered. As I have awarded interest on the liquidated amount, this shall suffice for loss of use of funds. Therefore, the claim for damages for loss of use of funds is without merit. Counterclaim The Defendants have counterclaimed for the following: (1) payment ofUS$112,500.00 being the outstanding amount owed to the 2nd Defendant as agent fees for the delivery of 13 containers of mukula tree logs; (2) damages for trespass to the Defendants' home; (3)damages for ruining the Defendant's business reputation and loss of business amount to ZMW7,685,000.00; (4)payment of ZMW389,958 being special damages incurred in Namibia; payment of ZMW8400.00 being special damages incurred in the Democratic Republic of Congo and Uganda; (5) payment of ZMW66,000.00 being special damages for causing malicious article, interest and costs. J32 I P age Payment of agency fees of US$112,500 According to the 2nd Defendant the Plaintiff was to pay agency fees of US$144,000.00 of which the Plaintiff only paid US$31,500.00 leaving an outstanding balance of US$112,000.00 owed to the 2nd Defendant. During the evidentiary trial, the 2nd Defendant argued that he was an agent of the Plaintiff in the supply of timber. An agent is a person who is recognized by the law as having power to enter transactions creating legally binding rights and obligations for his principal. An agent is recognized as having power to affect the legal position of his principal only where he has authority to do so. From the conduct of the parties, I cannot find any express or implied authority for the 2nd Defendant to act as the Plaintiffs agent. This can be discerned from the fact that there was an agreement for the supply of mukula logs and there is no provision for an agency fee even in the receipts issued by the 2nd Defendant to the Plaintiff. I opine that the Plaintiff had to pay upfront for the logistics. It is from this advance amounts less logistics that the 2nd Defendant would make his profit and not from agency fees which is not supported by any evidence. The 2nd Defendant failed to adduce evidence as to how this claim of US$ l 12,000.00 arose and conceded he had no documentary evidence to prove the same. The claim is bereft of merit and fails. Damages for trespass In respect to damages for trespass to the Defendants' home. The 1 st Defendant testified that the Police came to his house at the instigation of the Plaintiff. The J33 I P a ge Defendant has the burden of proof of proving both the fact and the amount of damage before he can recover as he who alleges must prove. The object of damages is to give the Defendants herein compensation for the damage, loss or injury they have suffered. The preliminary issue that must be proved by the Defendants is whether the Plaintiff has committed a wrong. It is my finding that both Defendants failed to adduce evidence that the Plaintiff trespassed on their property and I dismiss the claim accordingly. Damages for ruining Defendant's business reputation and loss of business, special damages of K66,000.00 for causing publication of a malicious article The Defendants claim damages from the Plaintiff for ruining their business reputation and loss of business, and special damages of ZMW66,000 for causing the publication of a malicious article. The object of an award of damages is to give the affected party compensation for the damages, loss or injury he has suffered. The onus is on the Defendants to show that their business reputation has been ruined resulting in loss of business. The l51 Defendant testified that his reputation had been ruined following the publication online of the missing mukula logs. In paragraph 4 of the counterclaim, the Defendants averred that the Plaintiffs claim of the Defendants' swindling him was the subject of public discourse and the Zambia Daily Mail article of 30th May 2018 and various social media platforms like the Zambian Watchdog and Mwebantu reported on the Plaintiff's allegation. The Defendants allege this brought the name of the Defendants into disrepute as they belong to a well-known and respected business family. Further, that resulting J34 I Page • from this the family suffered anguish, shame and loss of business as companies and individuals are reluctant to engage in any business dealings with the Defendants. The Plaintiff accepted he reported the matter to the Police in Lusaka but was not responsible for how the Police conducted its investigations which led to a search at the l51 Defendant's property. The Plaintiff denied he was responsible for the media and online publications on the subject of the missing mukula logs which implicated the Defendants. DWI admitted in cross examination that he had no evidence before Court that the Plaintiff was behind the publication of the malicious articles on social media platforms particularly, the Zambian Watchdog and Mwebantu media. It is my finding that the Defendants herein have not led sufficient evidence to convince this Court that they had suffered loss of business and that companies were reluctant to have business dealings with them. I accordingly dismiss the claim for damages for business reputation and loss of business. Special damages The Defendants claimed for special damages of ZMW66000.00 arising from alleged expenses incurred in Namibia when the 2nd Defendant was incarcerated. These expenses emanated from the repair of the gear box and transport costs. I find that the Defendants have not adduced any evidence to support their claim for special damages and I see no basis to award the same. Special damages incurred in Namibia The Defendants claimed for special damages incurred in Namibia of ZMK389,958.00. This was itemized in the pleadings in paragraph 5, 6,7 8 and J35 I Page 9 of the Defendants' counterclaim. It is averred that the Plaintiff engaged the 2nd Defendant and Richard Chilungu to source and procure 3 containers of mukula logs from Namibia and consequently in September 2016 he travelled to Namibia but was subsequently arrested. The 2nd Defendant testified that the Plaintiff sent some money to the 1 st Defendant for purposes of assisting with legal fees but alleged he later abandoned the two prompting the 2nd Defendant to borrow money from the 1 st Defendant. According to the 2nd Defendant he made several trips to attend Court in Namibia and has suffered special damages for transport, lodging, legal representation and other logistics. Again, it appears the Defendants abandoned this claim as it failed to prove anything at trial. The claim is bereft of merit and is dismissed accordingly. Special damages for incurred in the Democratic Republic of Congo and Uganda In paragraph I O of its counterclaim, the 2nd Defendant averred that under instruction from the Plaintiff he travelled to the Democratic Republic of Congo and Uganda for purposes of sourcing the mukula tree logs to replace the failed Namibian transaction. Under cross examination, the 2nd Defendant conceded he had not evidence before Court to support his claim. Therefore, I shall pay scanty attention to it and dismiss the claim accordingly. The upshot is that the Defendants counterclaim is unmerited and dismissed accordingly. In conclusion, I make the following Orders J36 I Page .. 1. Judgment is entered in favour of the Plaintiff against the Defendants in the sum of US$48 l ,050.00, ZMW70,054.00 and SAR20,000.00 respectively on account of money had and received by the Defendants for use of the Plaintiff with interest at the short term deposit rate from date of writ of summons to Judgment and thereafter at the commercial lending rate as determined by Bank of Zambia until full payment. 2. Damages for fraudulent misrepresentation to be assessed by the Registrar 3. The claim for damages for loss of use of funds is declined. 4. The Defendants counterclaim is dismissed in its entirety. 5. Costs to the Plaintiff to be taxed in default of agreement. Leave to appeal granted. Delivered at Lusaka and dated this 30th August 2020 JRENE ZEKO MBEWE HIGH COURT JUDGE J37 I Page