ZAL ELEVATORS LIMITED V KAYONGO KAYONGO (2022/HPC/068 7) [2025] ZMHC 66 (29 May 2025)

IN THE HIGH COURT FOR ZAMBIA 2022/H PC/068 7 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: ZAL ELEVATORS LIMITED PLAINTIFF AND KAYONGO KAYONGO DEFENDANT Coram: Hon Lady Justice Irene Zeko Mbewe For the Plaintiff For the Defendant Mr. C Musengwa of Messrs Ellis & Co Mrs. C. Mumba-Katemabwe, Legal Aid Board JUDGMENT Cases referred to: 1. Maskell v Horner [1915] 3 KB 106 2. Broodryk v Smut 1142 T PD 47 3. DC Builders v Rees [1966} 2 QB 617 4. Barton v Armstrong [1976] AC 104 5. Moses Muteteka and Naomi Muteteka v Bliss Financial Services Limited 6. Hely Hutchinson v Brayhead Limited and Another [1968} 1 QB 549 7. Daniel Peyala v Zambia Consolidated Copper Mines 8. Isaac Tentameni C Chali (Executor of the Will of the Late Mwalla Mwalla) v Mwala 9. Khalid Mohammed v Attorney-Genera! [1982] ZR 49 10. Wellington Mwanza v The Registered Trustees of Baker Heights Church COMPIIRCLK/ 72/2022 Jl! Page · References: 1. Ng 'ambi and Chungu Contract law in Zambia 2nd Edition 2. Halsbury's Laws of England, 4th Edition, Volume 37 para 442 [1.0] Introduction [1.1] This case has been in the judicial corridors for a considerable period of time the Plaintiff having commenced proceedings by way of writ of summons on 7th November, 2022. In between there have been several applications, adjournments and an appeal to the Court of Appeal. At commencement of trial, the Plaintiff was absent and their action dismissed for want of prosecution. Therefore, this Judgment is on the Defendant's counterclaim . [1.2] The Defendant counterclaims against the Plaintiff the following: 1. An order to compel the Plaintiff to refund the one million six hundred and seventeen thousand one hundred and six Kwacha thirty-one ngwee (K1,617,106.31) owed to the Defendant through cash and bank transfer payments. 2. An Order that the Plaintiff refunds the one hundred and ten thousand Kwacha K110,000.00 deducted from the Defendant for a period of 25 months. 3. Damages for inconvenience suffered. 4. Interest on the claimed amount at the current lending bank rate. 5. Costs of and incidental to these proceedings. 6. Any other relief the Court may deem fit. J2 I Page • [1 .3] In his counterclaim, the Defendant averred that during his tenure his main duty was to ensure the Plaintiff had at all times money for its operations. [1 .4] The Defendant further averred that in early 2013, the Plaintiff suffered financial distress as a result of the loss suffered in the tune of K750,000.00 for the supply of lifts to various clients such as Goldman Insurance. [1.5) In early 2014, the Plaintiff received a claim of K10,600,000.00 from its main supplier Otis Elevator South Africa for the supply of the new lifts and spare parts dating as far back as 2007. The Plaintiff without the approval of the board of directors acquired bank loans from Banc ABC in order to clear the debts. [1 .6] Due to the loan repayments, the Plaintiff failed to meet its daily financial operation requirements and in 2014 the Plaintiff defaulted which resulted in the bank putting a stop order on the Plaintiff's account. [1.7] The Plaintiff engaged the bank to restructure and due to the delay in restructuring, the Plaintiff resorted to obtaining loans from its employees for operational purposes. The transactions were verbal but witnessed by the managing director, accounts clerk and technicians handling any assignments. On several occasions the managing director approached the Defendant to finance various pending projects if it turned out that the accounts clerk had no petty cash for such assignments. J3 I Page [1 .8] Furthermore, the managing director would prepare cheque books for each voucher which would be given to the Defendant who would return the cheque to the Plaintiff once he was paid cash, or would deposit the cheque once the Plaintiff had funds in the account for his refund. [1.9] The Defendant averred that he lent the Plaintiff money in the form of cash and was issued with cheques and also through bank transfers to the appointed banking agents in the tune of K2, 136,146.31. [1.1 O] On 30th June 2022, the Defendant was arrested for theft by servant of K2,000,000.00 and released on 1st July 2022 on condition he signed a payment agreement which the Plaintiff now seeks to claim from. [1 .11] From the K2,000,000.00 the Plaintiff deducted K750,000.00 which the Plaintiff borrowed from the Defendant's wife leaving a balance of K1 ,250,000.00. [1 .12] The Plaintiff further deducted the sum of K30,960.00 which the Defendant transferred to the clearing agent to enable Zambia Revenue Authority (ZRA) release the Plaintiff's truck which was impounded at the border leaving a balance of K1 ,219,040.00. [1.13] The Defendant averred that the Plaintiff demanded to get K750,000.00 from the Defendant's pension of K801,560.00 leaving the balance now claimed of K519,040.00. J4 I Page [1 .14] The Defendant averred that the Plaintiff is indebted to him in the sum of K1,617,106.31 being K2,136,146.31 less K519,040.00. [1.15] The Defendant further averred the K801,560.00 pension did not reflect his contribution for the months of January and February 2017, and the period of 23 months from August 2020 to June 2022 totalling K110,000.00. He averred that this is despite the same having been deducted from his monthly salary but not remitted to pensions. For the above reasons, the Defendant avers he has suffered loss, damages and convenience. [2.0] Plaintiff' defence to counterclaim [2.1] In the defence to counterclaim, the Plaintiff denied that the Defendant's main duty was to ensure the Plaintiff had money for its operations. Further, that the Defendant voluntarily executed the payment agreement of 6th July, 2022. [2.2] The Plaintiff denied owing the Defendant the sum of K1 ,617.106.31 or at all. The Plaintiff avers it has a right to set off the pension contribution to settle the Defendant's indebtedness to it. [3.0] Reply [3.1] In the Defendant's reply to the defence to counterclaim, he averred the payment agreement was not voluntarily executed and instead signed under duress. JS I Page • • [3.2] Relating to his indebtedness to the Plaintiff, the Defendant denied this assertion and maintained it is the Plaintiff owing him K1,617,106.31 . [4.0] Hearing [4.1] At the commencement of trial on 15th October, 2024 the Plaintiff and its Advocates were not in attendance. I dismissed their action for want of prosecution. For his counterclaim, the Defendant called a total of three witnesses. He adopted his witness statement and produced the Defendant's bundle of documents and supplementary bundle of documents (hereinafter referred to as "BOD"). [4.2] In augmentation, the Defendant added he was a victim of intimidation and threats. He was arrested at the instance of the Plaintiff and on police bond for over a year without prosecution. [4.3] In summation, I shall highlight the relevant averments in the Defendant's witness statement. He averred that the Plaintiff was in financial stress due to huge losses incurred as a result of cutting costs of lift supply and installation contracts which decisions were made by the managing director Mr Smart Phiri. [4.4] Over time, various loans were obtained from the banks to pay the supplier of elevator equipment in South Africa. The Plaintiff defaulted on its loan and the managing director urged him to lend money to the Plaintiff. The Defendant averred that a system was put in place where payment vouchers were raised for company J6 I Page expenses on a daily basis, and a company cheque would be issued in the Defendant until such a time the Plaintiff had sufficient fund to reimburse the borrowed personal funds. At which point the voucher and cheque would be returned to the assistant accountant for either cashing across the bank counter or direct bank transfer with the full authorisation of the managing director. [4.5] Salaries were processed through the continued borrowing of personal money for company operation and these accumulated over time. [4.6] The Defendant averred that in terms of the K750,000.00 borrowed from the Defendant's wife it was used for payment of a supplier and to top up on the account. The managing director made a further cash deposit of K52,000.00 from his personal fixed deposit account at Bayport and the equipment was paid for. [4.7] The Defendant further averred that Zambia Revenue Authority were waiting to be paid as the Plaintiff was in arrears, NAPSA had also put pressure on the Plaintiff. At some point the relationship between the Defendant and managing director degenerated leading to his summary dismissal on account of alleged theft by servant and embezzlement of funds. [4.8] The Defendant further averred he was taken to the police station, detained and made to sign a payment agreement and if he did not cooperate, the Drug Enforcement Commission and Anti- J7 I Page Corruption Commission would come in and ZICA would be notified so as to have him removed from the accountant's list and have his practising certificate cancelled. [4.9] The Defendant averred that the police investigated the matter and rendered a report (page 68-7 4 of the Defendant's BOD). [4.1 O] He averred there was a K30,960.00 paid to a clearing agent namely Customised Clearing and Forwarding Limited for a truck detained at ZRA in Chirundu and used his personal money with an undertaking from the Plaintiff that he would to recover the money later. [4.11] The Plaintiff alleged he had embezzled the sum of K2,000,000.00 and deducted his pension benefits of K?00,000.00 in addition to the K750,000.00 from his wife and the K30,960.00 leaving an outstanding amount due to the Plaintiff in the sum of K519,040.00 which he declined to refund as he never owed the Plaintiff this amount. There was no cross examination. [4.12] DW2 was Paul Zengeni who adopted his witness statement with 88 paragraphs. In summation, he testified he had known the Defendant for 11 years and was with the Plaintiff for more than 10 years as assistant to the Defendant and was also appointed as bank agent for the Plaintiff and handled bank duties. There were instances where the Defendant would make funds available and would be given petty cash float cheques as surety for him yi be paid back. J8 I Page [4.13] When he resigned in September 2022 the Plaintiff rejected the resignation and instead suspended him. The Plaintiff promised that if could incriminate the Defendant, he would maintain his job and not be taken to the police. [4.14] DW2 stated he had nothing to do with the Defendant but was picked up and taken to Lusaka Central Police and the officer investigating the issue advised him there was a call out for the managing director Mr Smart Phiri who never went to the police station. [4.15] He was eventually suspended and them dismissed toward the end of September 2022. After dismissal they sent a letter which they stated he owed the Plaintiff. There was no cross examination. [4.16] DW3 was Kawana Mubukwanu a retired police officer. He adopted his witness statement as his evidence in chief which consisted of 52 paragraphs. [4.17] He narrated that in the month of June 2022 after receiving a report from the Plaintiff of a K2,000,000.00 that was stolen by the Defendant from the Plaintiff he conducted an investigation. The evidence gathered interviews conducted with the Plaintiff and accused person was in the report and his findings were that the money purportedly stolen was by the Plaintiff borrowing from the accused person the Defendant. There was no cross examination. Jg I Page [4.18] At the continued trial on January, 2025, DW4 was Daisy Nguni the wife to the Defendant who adopted her witness statement. In summation she averred that the Defendant requested for a loan from her of K750,000.00 for use by the Plaintiff. He assured her the Plaintiff would pay her back. She had K750,000.00 [4.19] In cross examination by Counsel for the Plaintiff, she testified she is the branch manager at Shoprite. With a net income of K18,000- 19.000.00. She reiterated she lent money to the Plaintiff of K750,000.00 but did not sign any loan agreement. [4.20] She testified she had evidence of the loan in the form of a bank transfer to the Plaintiff and a receipt showing money had been received (page 8 and 11 of the Defendant's BOD). But had no bank statement showing the money left her account. [4.21] DW4 testified that Paul Zengani signed the receipt but did not know who signed it. On the day she deposited the money she went to the bank around 13-14.00 hours and later met the Defendant. She received the receipt about a week later. When she went to collect the receipt, the Defendant was not present and testified it was on the 30 June 2022. [4.22] In further cross examination, DW4 stated that the Defendant was suspended on 30 June 2022 and could not recall if he had gone to work as she left the house before him. [4.23] On the source of money, DW4 testified her brother would sent her different amounts ranging from K50,000 to KS0,000. This was JlO I Page done for the last 20 years and told the Court he is based in Russia. [4.24] She testified she last received money before the war between Russia and Ukraine erupted and had sent K140,000.00 in January 2020 out of which K40,000.00 was allocated to her mum and the rest was to be put in a fixed deposit. She retireated that the money was sent on 3 June 2022 but could not see it on her account. [4.25] She told the Court she wanted the Defendant to pay her back. Though she was not a party to the proceedings. [4.26] In further cross examination she maintained that the Plaintiff requested for a loan for K750,000.00 through her husband but had no evidence to prove that aspect. [4.27] She had no evidence of a loan agreement and stated she had no proof that the Defendant had authority to request for money on behalf of the Plaintiff. [4.28] In further cross examination, she told the Court it was not the first time the Defendant requested for money on behalf of the Plaintiff as he knew she was keeping money for her brother and the Plaintiff would request and pay it back. [5.0] Written submissions [5.1] The Defendant filed written submissions which I am grateful for and parties should be rest assured they have been considered in Jll I P a g e the determination of th is matter and shall be referred to where necessary. [6.0] Analysis [6.1] I have considered the pleadings, evidence adduced and documentary evidence, witness statements including written submissions of the parties. I shall now proceed to determine each claim. [6.2] An order to compel the Plaintiff to refund the one million six hundred and seventeen thousand one hundred and six Kwacha thirty-one ngwee (K1,617,106.31) owed to the Defendant through cash and bank transfer payments [6.3] The Defendant seeks an order to compel the Plaintiff to refund the one million six hundred and seventeen thousand one hundred and six Kwacha thirty-one ngwee (K1,617,106.31 ) owed to the Defendant through cash and bank transfer payments. [6.4] From the pleadings and Defendant's arguments and written submissions, the issue that falls for determination is whether the Defendant is entitled to the claimed sum of K1,617,106.31. [6.5] The genesis of this claim as pleaded by the Defendant is that he would to lend money to the Plaintiff for its operations. DW2 and DW4 both confirmed this practice as the Plaintiff had established an informal lending from its employees including the Defendant, J121 Page his close family members and friends (page 13 of the Defendant's BOD). [6.6] The claimed amount calls for an interrogation of how the amount accrued and whether the Defendant has sufficiently proved his claim. On the part of the Plaintiff, the basis of its refusal to pay the Defendant was that it did not owe anything to him. It was further pointed out that there was an alleged embezzlement of K1,617,106.31 by the Defendant. Suffice to state, there was no evidence adduced to support this assertion. [6.7] The Defendant alleges that under duress at the police station, he was made to sign a payment agreement (page 21-22 Defendant's BOD). In the said agreement it inter alia states: "2. Party A acknowledges and agrees that it owes Party 8 an amount of ZMW780,960.00) the same being an amount received by the Company from Party B." [6.8] In the payment agreement it acknowledges that the Defendant owes the Plaintiff the sum of ZMW1 ,219,040.00 and agreed to liquidate it within a period of 3 months being July, August and September. [6.9] Counsel for the Defendant cited Ng'ambi and Chungu Contract Law in Zambia 2nd Edition where the learned authors observed that: J13 I Page "The courts have always been keen to preserve freedom of contract. A necessary element of this freedom is that the agreement should be reached voluntarily. This means that nor force or coercion should be used in order to secure an agreement. If a party does enter a contract because of coercion by the other party, then the Jaw accepts that the contract should be set aside and the party coerced should be relieved of their obligations." [6.1 O] In the case at hand, the Defendant alleges he was forced or was under duress in signing this payment agreement. Duress refers to being forced or coerced into signing a contract against one's will, typically due to threats or illegitimate pressure. If proven, duress can invalidate the agreement. If a party threatens to physically harm a person or their family, or damage their property, the contract is void because they did not sign the contract of their own free will. [6.11] In the case of Maskell v Horner (1l cited by Counsel for the Defendant, duress was defined as: "A coercion of the will so as to vitiate consent. The Court went further to state that in determining whether there was no true consent, iut is material to enquire whether or not the person alleged to have been coerced did or did not protest whether, at the time he was allegedly coerced into making the contract, he did not have an alternative remedy, J14 1Page whether he was independently advised, and whether after entering into the contract he took steps to avoid it." [6.12] Further, a persuasive case on duress as a defence is Broodryk v Smut (2l which sets out the elements necessary to set aside a contract on the grounds of duress. These are that there should be actual violence or reasonable fear; the fear must be caused by threat of considerable evil to the party or his family; it must be the threat of an imminent on inevitable evil; the threat or intimidation must be contra bono mores (extort something to which one otherwise was not entitled); and the moral pressure mused must have caused damage. [6.13] Counsel for the Defendant argued that the acknowledgment of debt was signed under duress by the Defendant. Counsel for the Defendant argues that the payment agreement was tabled by the Plaintiff as a ticket to his freedom. Reference was made to the case of DC Builders v Rees (3l where the House of Lords set aside a contract by the parties stating that the builders had been under duress to accept a reduced amount in lieu of the full bill due to their financial position which Rees was aware of and took advantage of. It was held that an acceptance arising from a threat does not amount to a settlement and therefore the agreement was invalid as there no consideration in favour of the Builders for reducing the value. JlS I P age [6.14] The circumstances under which the Defendant signed the payment agreement are set out in paragraph 85 of the Defendant's witness statement as follows: " he signed the payment agreement under duress through threats of being taken to the anti-corruption commission, Drug Enforcement Commission and ZICA to be removed from the accountant's list, so out of all the threats and to keep peace, I told my brother let's sign the agreement and after signing the agreement, I went directly to the police and showed the investigations officer that I had signed an agreement to pay back the money I did not owe and asked them to conduct a thorough investigation concerning this matter." [6.15] In addressing my mind to the principles on duress or coercion as espoused in the case of Maskell v Horner (supra), I find the Defendant was put under pressure to sign the payment agreement at the police station which can be intimidating more so that he had been detained. This was followed by summary dismissal by the Plaintiff. [6.16] When all these facts and circumstances are put together, the conclusion I arrive at is that he was coerced into signing the payment agreement and had at the material time protested. He took steps to avoid it. I am inclined to agree with the Defendant that he signed the payment agreement unwillingly. J16 I P a g e [6.17] What then is the consequence of signing a contract or agreement under duress? A contract under duress is voidable and a person can either affirm such contract or avoid such contract. I am fortified by the case of Barton v Armstrong (4l where it provided clarity on the principles of free will and consent in contractual agreements. Therefore, where there is duress, it can invalidate a contract especially where there was undue influence is involved like in the present facts. I find that the Plaintiff cannot rely on the payment agreement as it was signed under duress. [6.18] I am satisfied that the Defendant has shown and proved he gave money to the Plaintiff to facilitate smooth running of the Plaintiff's business and was never paid back. I must state I find the manner in which the Plaintiff was operating rather startling as it defied good governance and accountability principles in the management of resources for a limited liability company. [6.19] As observed by the Court of Appeal in the case of Moses Muteteka and Naomi Muteteka v Bliss Financial Services Limited (5l in corporate governance, policy matters are the preserve of the board of directors whereas the day to day management of the affairs of the company is left to management. [6.20] In this case the Plaintiff had a structure and head was the managing director. There was a technical manager, accountant, assistant accountant, technicians. The Plaintiff poses a question as to whether the managing director had authority to obtain loans J17j Page on behalf of the Plaintiff from the Defendant and other employees. [6.21] Counsel for the Plaintiff argued that a managing director cannot obtain or enter into a loan agreement on behalf of a company without approval from the board of directors who manage the business of the company and my attention was drawn to section 86 (1) and (2) of the Companies Act No 10 of 2017. In general, unauthorised borrowing or borrowing without proper authority can have significant consequences. [6.22] The board of directors may borrow money by passing a resolution at the meeting of the board. It may also delegate its borrowing powers. Is this the case herein? In paragraph 7, 8, 9, 1 O and 18, the Defendant avers the financial records were reflecting losses and were being reported to the board. Furthermore, for the past 8 to 11 years, the board had not been happy with management because of the poor decisions by the managing director putting the company's financial position in jeopardy. [6.23] The Defendant gave an account of how the Plaintiff was struggling with cash flows as all money was being channelled to pay supplier of equipment. It is then that the managing director opted to obtain several loans from banks and later from the employees including himself. J18 I Page [6.24] Did the managing director of the Plaintiff have the required authority of the Plaintiff's board of directors to enter into such lending agreements with the Defendant and whether this fact renders the lending unenforceable? In my view, the answer lies in whether the managing director had ostensible authority. [6.25] Ostensible authority flows from the appearance of authority created by the principal. It is the authority of an agent as it appears to others. In my view the managing director held out that he was entitled to do so on behalf of the Plaintiff and the Defendant acted on the said representation. Instructive is the case of Hely Hutchinson v Brayhead Limited and Another (6l. I opine that the company as principal is liable for the managing director's actions and there is agency by estoppel. In my view, the company is estopped extricating the managing director's actions. [6.26] Having assessed the evidence before me, I find the actions of the managing director over a long period of time in my view demonstrated he had implied and ostensible authority from the board of directors to do what he did, borrowings from employees including the Defendant. (6.27] The Defendant produced documentary evidence showing bank transfers and cheques paid to their bank agent DW2. I can only infer this was for the Plaintiff's operations as averred by the Defendant and DW2 (pages 33 -39 Defendant's BOD). In its J19 I P a g e defence to counterclaim, the Plaintiff alleged the sum of K2,000,000.00 was embezzled by the Defendant who denied this as all monies were paid out for the benefit of the Plaintiff. [6.28] Coming back to the gist of the claim by the Defendant, he claims the sum of K1,617,106.31 for monies owed by the Plaintiff through cash and bank transfers. In paragraph 20 of the counterclaim, the Defendant averred he had during the tenure of his employment lent the Plaintiff money in the form of cash where he was issued with cheques and through bank transfers to the appointed banking agent in the sum of K2,136,146.31 out of which the Plaintiff deducted K?00,000.00 from his pension benefits, K750,000 borrowed from his wife DW4. [6.29] The Plaintiff claimed the sum of K2,000,000.00 from the Defendant and deducted K?00,000.00 (pension benefits) and K750,000.00 (DW4's money) and K30,960.00 (clearing agent) leaving a balance of K519,040.00. (6.30] The evidence points to the fact it appeared to be a normal practice for the Defendant and other members of staff to lend money to the Plaintiff. The Plaintiff would issue cheques to the Defendant which would be presented when there was sufficient money in the Plaintiff account. (6.31] The Defendant produced a number of cheques in the name of Paul Zengeni who was the Plaintiff's banking agent (pages 33-39 of the Defendant's BOD). In putting matters in context, DW2 J20 I Page admits that during the tenure of employment, the Defendant did lend money to the company and he was the Plaintiff's authorised agent. In paragraph 16-19 of his witness statement, he explained the modus operandi of the Plaintiff where petty cash was not sufficient and the Defendant would assist him with his personal cash and he would give him the petty cash float cheque. Further, DW2 would get back the cheque when he went to cash out the cheque and pay back the money. DW2 testified he would be in possession of those cheques indicating the personal money the Plaintiff owed the Defendant. [6.32] DW2 testified that reconciliations were done by the Defendant who kept most of the documents and knew what amounts would be for the company and what was lent to the Plaintiff. At this point, it is very difficult to ascertain what amounts the Defendant lent to the Plaintiff as the cheques are all in DW2's name and there is no corresponding narrative of what the cheques covered and whether the Defendant signed for the cash after withdrawal by DW2. (6.33] In his rather long-winded witness statement with 90 paragraphs in single spacing, the Defendant categorised incidences he would lend money to the Plaintiff. The Defendant alleges he requested the sum of K750,000.00 from his wife at the insistence of the managing director for use by the Plaintiff. In cross examination by Counsel for the Plaintiff, when DW4 was queried on the source of the K750,000.00, she explained it was from her J21 I Page brother who worked abroad and would send her money for various activities. [6.34] DW4 confirmed she had lent the Defendant the sum of K750,000.00 which money was from her brother who resides abroad. The money was transferred from DW4's account number 0400-1108991 held with ASSA to the Plaintiff's account 016-9879354 held at Atlas Mara, and a receipt dated 30th June 2022 was issued to her. [6.35] In respect to the sum of K750,000.00. I find the Defendant's evidence rather misleading as the documents prove the money went from DW4's account held with ASSA to the Plaintiff's account (page 14 of the Defendant's BOD). DW4 further instructed her bankers to make a transfer to the Plaintiff (page 8 of the Defendant's BOD). She was issued with a receipt by the Plaintiff dated 6th June, 2022 (page 11 Defendant's BOD). [6.36] In my view, despite the Defendant being the husband to DW4, he was not privy to this contractual arrangement between his wife as lender and the Plaintiff as borrower. In the case of Daniel Peyala v Zambia Consolidated Copper Mines (7), the Supreme Court held that the principle of privity of contract means a contract cannot confer rights or impose obligations on to other parties except parties to a contract. Flowing from this, I see no basis for the Defendant to claim the sum of K750,000.00 from the Plaintiff. J22 I Page [6.37] In this regard, I agree with Counsel for the Plaintiff that DW4 is not a party to the proceedings. Therefore, I find DW4 is the right party to demand for this money and I am precluded from considering the interests of a non-party as pointed out in the case of Isaac Tentameni C Chali (Executor of the Will of the Late Mwalla Mwalla) v Mwala (5l_ With that said, I find and hold that the Defendant is not entitled to the sum of K750,000.00. [6.38] Still on the claim, the Defendant alleges that after his dismissal by the Plaintiff, his pension benefits of K700,000.00 was deducted and applied towards the alleged embezzled money. [6.39] The Defendant produced a bank document/advice showing a transfer from the Defendant's account to the Plaintiff in the sum of K700,000.00 dated 19th August, 2022 (page 29 of the Defendant's BOD) and a subsequent receipt (page 30 Defendant's BOD). There is no clear narrative as to why the Plaintiff received this money from the Defendant and its use. [6.40] In paragraph 88 of the Defendant's witness statement, he averred that the Plaintiff sued him and had recovered his pension money of K700,000.00 in addition to the K750,000.00 from his wife. The Plaintiff on the other hand argued they had the right of set off which was not proved at trial and this defence is not available to the Plaintiff. On the issue of embezzlement by the Defendant and the withholding of monies, I find this has not been proved by the Plaintiff. J23 I Page [6.41] For the foregoing reasons, I am inclined to accept the Defendant's evidence that his pension of K?00,000.00 was withheld by the Plaintiff and applied towards the alleged amounts he owed the Plaintiff. As there is no basis for deducting this amount, I find and hold that the Defendant is entitled to the sum of K?00,000.00. [6.42] In respect to the payment of K30,960.00 to Customised Clearing and Forwarding Limited, the notice of payment instruction shows payment was from the Defendant in the sum of K30,960.00 (page 13 of the Defendant's BOD). Prior to that the Plaintiff had written an instruction to its bankers for a telegraphic fund transfer to Customised Clearing and Forwarding Limited (page 12 of the Defendant's BOD). The said party issued receipts to the Plaintiff (page 14 of the Defendant's BOD). [6.43] In this regard, I am inclined to accept the Defendant's evidence that he transferred money from his personal account to the Plaintiff which was paid to a third party for the benefit of the Plaintiff. This piece of evidence was not challenged and accepts its probity. I therefore find and hold that the Defendant is entitled to be refunded the sum of K30,960.00 paid to the clearing agent on behalf of the Plaintiff. [6.44] From the proved amounts, it leaves a balance of K136, 146.31 which I find has not been sufficiently proved by the Defendant. The Court will not act on speculation as he who alleges must J24 I Page prove as elucidated by the Supreme Court in the case of Khalid Mohammed v Attorney-General (9 )_ [6.45] In DW3's witness statement, he averred that he carried out an investigation on the alleged theft of monies at the Plaintiff company allegedly by the Defendant. Regarding the evidence of DW3, it is trite law that criminal proceedings cannot be used to prove a civil matter and shall therefore attach no weight to the police report. [6.46] For the above reasons, from the claimed sum of K1 ,617,106.31 , the Defendant has only proved he is owed K30,960.00 and K700,000.00 bringing the total amount to seven hundred and thirty thousand nine hundred and sixty thousand Kwacha only (K730,960,00). [6.4 7] For the above reasons, the claim for the refund of the sum of one million six hundred and seventeen thousand one hundred and six Kwacha thirty-one ngwee (K1,617,106.31) owed to the Defendant through cash and bank transfer payments fails. Suffice to state, the Defendant is only entitled to the sum of K730,960.00. To that extent, the claim succeeds. [7.0] An Order that the Plaintiff refunds the one hundred and ten thousand Kwacha K110,000.00 deducted from the Defendant for a period of 25 months J25 I Page (7 .1] The Defendant seeks an order that the Plaintiff refunds the One hundred and ten thousand Kwacha K110,000.00 deducted from the Defendant for a period of 25 months. (7.2] Counsel for the Plaintiff submitted that this Court has no jurisdiction to determine issues of an employment nature as it falls outside what is termed a commercial action. [7.3] The counterclaim as rightly observed by Counsel for the Plaintiff does touch on employment issues as the Defendant alleges inter alia that the Plaintiff withheld his pension benefits. Indeed, the Industrial Relations and Labour Division of the High Court has exclusive jurisdiction to hear labour and employment matters. [7.4] In my view, the issues before Court are purely not a labour matter but emanates from a somewhat unconventional commercial transaction between the Plaintiff as an employer and the Defendant as employee. The issue is whether arising from the commercial action, the Plaintiff was justified in deducting K700 ,000.00 of the Defendant's pension contributions on grounds he owed the Plaintiff money. I shall therefore proceed on that basis and to that effect reject Counsel for the Plaintiff's contrary argument. [7.5] Counsel for the Defendant referred to Article 187 (2) of the Constitution of Zambia to the effect that a pension shall not be withheld or altered to an employee's disadvantage. Further section 51 (1) of the Employment Code provides that an J26 I Page • employer who dismisses an employee under section 50 shall pay the employee, on dismissal, the wages and other accrued benefits due to the employee up to the date of the dismissal. [7 .6] The Defendant observed that in the case of Wellington Mwanza v The Registered Trustees of Banker Heights Church (10l on terminal benefits, it was held that: " Termination of terminal benefits relate to all the benefits due to an employee in terms of statute and the contract of employment when his/her contract of employment comes to an end. Where an employer summarily dismisses an employee, the employer has a duty, on dismissal to pay the employee the wages and other accrued benefits due to the employee up to the date of dismissal." [7.7] It is not in doubt that a pension is an accrued right as rightly submitted by Counsel for the Defendant. In my view pension contributions and benefits are an important aspect of an employee's tenure and eventual separation from employment. The evidence on record shows the Defendant was an employee of the Plaintiff as well as a contributing member of the Saturnia Regna Pension Scheme. [7.8] The basis of this claim is that the K801,560.00 pension contributions do not reflect his contribution for two months in 2017 namely January and February and the period of 23 months from August 2020 to June 2022 totalling K110,000.00 despite J27 I Page ' having been deducted from his monthly salary but not remitted to pensions. [7.9] In paragraph 10 of the Plaintiff's defence to counterclaim, it averred it had the right to set off the pension contribution to settle the Defendant's indebtedness to the Plaintiff. The Plaintiff did not support this assertion with evidence. [7.10] An employer who deducts contributions from an employee is under an obligation to remit the same as it is a statutory and contractual obligations. [7.11] I have carefully perused the member statement from Saturnia Regna Pension Fund (page 236). It does not show the contributions of January, February 2017 but runs from March to December 2017. In 2020 it only shows the months of January, February, March, May April, July and June and is missing August, September, October, November and December 2020. In 2021 there is no payment or contribution reflected including up to June 2022. This totals 23 months. This is despite deductions from the Defendant's salary. [7.12] From my reading of the member statement, I am left in no doubt that the Defendant is entitled to be paid the sum of K110,000.00 with interest. The claim succeeds. J28 I P a g e [8.0] Damages for inconvenience suffered [8.1] The Defendant counterclaims damages for inconvenience suffered. These are special damages which should be specifically claimed, particularised and proved. [8.2] From a perusal of the pleadings, these special damages have not been particularised. It is almost like the claim was abandoned by the Defendant. [8.3] I therefore decline to award damages for inconvenience as the same has not been proved. [9.0] Interest on the claimed amount at the current lending bank rate [9.1] The Defendant counterclaims for interest. The rationale behind the awarding of interest has been espoused in a plethora of cases. It is to compensate a party from loss of use of his money. I have no reason to depart from this well-established principle. [9.2] For the above reasons, I award interest at the commercial lending rate from date of writ until full payment. [10.0] Costs of and incidental to these proceedings [10.1] Costs are awarded at the discretion of the Court. [10.2] As the Defendant is successful in his counterclaim, I award costs to be taxed in default of agreement. J29 I Page • [11.0] Any other relief the Court may deem fit [11.1] The Defendant seeks any other relief the Court may deem fit. From the evidence on record, there is no other relief this Court will grant. [12.0] Decision [12.1] On a balance of probability, the Defendant has proved his counterclaim against the Plaintiff as follows: 1. I decline to grant an order to compel the Plaintiff to refund the one million six hundred and seventeen thousand one hundred and six Kwacha thirty one ngwee (K1,617,106.31) owed to the Defendant through cash and bank transfer payments. The Plaintiff shall instead pay the Defendant the sum of K730,960.00 plus interest. 2. I grant an Order that the Plaintiff refunds the one hundred and ten thousand Kwacha K110,000.00 deducted from the Defendant for a period of 25 months, 3. I decline to grant an order for damages for inconvenience suffered. 4. Interest on the claimed amount shall accrue at the commercial lending rate from date of writ until full payment. 5. Costs of and incidental to these proceedings to the Defendant to be taxed in default of agreement. 6. I decline to grant any other relief. J30 I Page 7. Leave to appeal granted. Delivered at Lusaka this 29th day of May, 2025 IRENE ZEKO MBEWE HIGH COURT JUDGE J31 I P a g e