Andrew Mulimba and Anor v Attorney General (APPEAL NO. 117/2005) [2013] ZMSC 72 (27 November 2013)

\ , J1 IN THE SUPREME COURT FOR ZAMBIA HOLDEN AT LUSAKA APPEAL NO. 117/2005 BETWEEN: ANDREW MULIMBA JOHN MULIMBA AND 1 ST APPELLANT 2ND APPELLANT ATTORNEY GENERAL RESPONDENT - Coram: Chibesakunda, Ag. CJ, Phiri and Muyovwe, JJS, On 20th February, 2013 and 27th November 2013 For the Applicants: Mr. Chitambala Chambers of Messrs Lukona For the Respondents: N / A JUDGMENT Chibesakunda, Acting CJ., delivered the Judgment of the Court. Case referred to: 1. Ng'ona Mwelwa Chibesakunda and Attorney-General, Appeal No. 101/2013 Legislation referred to: 1. Order 37 Rules 8 of the High Court Rules 2. Section 74 of the Supreme Court Act of the Laws of Zambia 3. Section 20 of the State Proceedings Act Cap 71 4. Order 36, Rule 8 5. Cap 81 of the Laws of Zambia • ' I J2 This matter came before us by way of Motion pursuant to Rules 18(1), 48(5) and 74 of the Supreme Court Rules, Cap 25 of the Laws of Zambia. The brief history of this matter is that on 21 st June, 2010, this court delivered a judgment in an appeal wherein it allowed the Applicants' appeal against the judgment of the High Court and awarded the said Applicants damages in the sum of Kl00,000,000 each (unrebased now Kl00,000 rebased). The Respondent has since paid the Applicants that sum of Kl00,000.00 each with interest at 6% from date of judgment to date of payment. The Respondent has, however, refused to pay interest on the sum due from the date of the Writ of Summons to the date of judgment on the ground that the State is not liable to pay the same pursuant to Section 20 of the State Proceedings Act3 • This has prompted the Applicants to come back to court seeking the interpretation of the portion of our order which states: "We order that the State pays the two Appellants a sum of KlOO million plus interest to each." J3 Before us , the Applicants submitted that the proper interpretation of the portion of our judgment quoted supra is that the Respondent is liable to pay interest on the judgment debt from the date of the summons to the date of the judgment. According to the Applicants, Section 20 which says: "The Minister responsible for finance may allow and cause to be paid out of the general revenues of the Republic to any person e entitled by a judgment under this Act to any money or costs, interest thereon at a rate not exceeding six per centum from the date of the judgment until the money or costs are paid." does not make a provision which bars the State against payment of interest from the date of commencement of the action to date of judgment. In their view, Section 20 of the State Proceedings Act3 only operates to vitiate the application of the provisions of the e Judgment Act, Cap 81 of the Laws of Zambia as it makes specific provision of payment of post judgment interest by the State. It was further contended that Section 20 only provides guidelines to the Minister of Finance to exercise authority to pay post judgment interest to any successful litigant on behalf of the State. Neither Section 20 nor any other provision under the State Proceedings Act3 -' ' J4 makes any prov1s1on for insulating the State against payment of interest from the date of commencement of action to date of judgment. It is, therefore, their argument that the State is liable to pay interest to the Applicants from the date of the commencement of the action to the date of the judgment. The Applicants referred to Section 9 of the State Proceedings Act3 which says: " Subject to the provisions of this Act, all Civil proceedings by or against the State in the High Court shall be instituted and proceeded in accordance with the rules of Court and not otherwise." Further, that Order XX. XVII Rules 8 of the High Court Rules, Cap 27 also says: "Where a judgment or order is for a sum of money, interest shall be paid thereon at the average of the short term deposit e rate per annum prevailing from the date of the Cause of action or Writ as the Court or judge may direct to the date of judgment." And that Rule 74 of the Supreme Court Rules 2 which also says: "On any appeal, interest on any sum remaining due or damages payable as a result of the termination of the appeal shall be allowed for such time as satisfaction of the judgment shall have JS been delayed by the appeal, unless the Court otherwise orders, at the rate recognized by the High Court and the Registrar of the High Court may compute such interest without any order for that purpose." (emphasis our own) It was submitted that all these support the view that the State is liable to pay interest from the commencement of the action to the judgment date. The Respondent on the other hand argued that since the court did not explicitly state whether interest was to be paid from the date of the writ to the date of judgment (pre-judgment interest) or from the date of judgment until the date of final payment, the Respondent was right to have relied on Section 20 of the State Proceedings Act3 when he refused to pay pre-judgment interest. 9 They made references to Section 12 of the State Proceedings Act which provides for institution of proceedings by and against the Attorney-General. They submitted that if this is the law from which the power to sue the Attorney-General is derived, then it follows that this is the law under which interest should be paid once the J6 party is successful against the Attorney-General particularly where the Court is silent as from what period the interest is to be paid. They further relied on Section 29(1) of the State Proceedings Act3 which provides that: " .... any power to make rules of court shall include power to make rules for the purposes of giving effect to the provisions of this Act ... " It was argued that provisions of this Act must therefore be given effect as provided for under Section 20 of the State Proceedings Act3 in regards to payment of interest. In response to the argument on Section 74 of the Supreme Court Act, Cap 25 of the Laws of Zambia2 , the Respondent argued that in its view this Section refers to a scenario where a party is successful at the High Court and has a judgment in their favour and then the losing party appeals against that judgment to the Supreme Court and loses that appeal thereby causing delay in executing the judgment of the High Court. In contrast in the case in casu, it would only have applied if the Applicants had been J7 successful at the High Court and the judgment was given in their favour and the Attorney-General had appealed against that judgment and lost the appeal, thereby delaying the satisfaction of the High Court judgment. In the case before the court, the Attorney-General was a successful party at the High Court stage. It is the Supreme Court which has reversed that judgment. Therefore, at the High Court level, there were no damages or interest due to the Applicants as they had lost the case and that was the reason why they appealed against the High Court judgment. They, therefore, cannot claim the interest under this section as that would be a misconstruction as there was no delay in satisfaction of the High Court judgment. The Respondent, therefore, urged this Court to dismiss the motion. We have considered the arguments before us. It is true that 1n our Judgment of the 21 st June, 2010, we did not specify the period of interest. We were asked to look at the provisions of Section 20. We agree entirely with the Applicants that as we have held in a recent case of Ng'ona Mwelwa Chibesakunda Vs J8 Attorney-General1, the State is liable to pay for interest pre judgment as provided in the judgment Act. Cap. 71 Order 36 Rule 8 of the High Court Rules 1 provides in mandatory terms for an award of interest to a successful litigant. It provides as follows: "Where a judgment or order is for a sum of money interest shall be paid thereon at the average of the short-term deposit-date per annum prevailing from the cause of a·ction or writ as the court or Judge may direct to the date of judgment" For the foregoing reasons, we hold that the proper interpretation of our judgment is that the State is liable to pay interest as stated in Order 36, Rule 8 i.e from the commencement of the action to the date of the judgment. @ L. P. Chibesakunda ACTING CHIEF JUSTICE G · v iri E. N. Muyovwe SUPREME COURT JUDGE SUPREME COURT JUDGE IN THE SUPREME COURT FOR ZAMBIA J1 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: SCZ/8/328/2007 Appeal No 88/2009 ZAMBIA PRIVATISATION AGENCY APPELLANT AND AMON BARNABAS MWEWA RESPONDENT CORAM: Chibesakunda, Ag CJ, Mwanamwambwa and Phiri, JJS On 17th May, 2012, and 27th November, 2013 li'OR THE APPELLANT Ms P. Goma, Legal Counsel FOR THE RESPONDENT Mr F. Nsokolo of Messrs Legal Resources Chambers Chibesakunda, Ag. C. J, delivered the Judgment of the Court. · JUDGMENT Cases referred to: 1. Musamba v Simpemba (T / A Electrical and Building Constructors ( 1978) ZR 1 78 2. Attorney General v Mpundu (1984) ZR 62 (SC) 3. Ilkiw v Samuels [1963] 2 All ER 879 4. Cargill v Bower [18.78] 10 Ch D 502 5. Ridley v De Geerts [1945] 2 All ER 645 Works referred to: 1. McGregor on Damages 18th Edition 2. Halsbury's Laws of England 4 th Edition Reissue Vol 12(1) 3. Whitebook 1999 Edition Order 18/ 15/4 The delay in delivering this Judgment is regretted but this 1s due to a number of factors beyond our control. J2 This is an appeal against the decision of the High Court in which the Respondent (Plaintiff in the Court below) was awarded damages for breach of equitable right of first refusal as a sitting tenant in the purchase of Stand No 859/52 Obote Avenue in Livingstone. In this matter, the Respondent was claiming the following: (i) A declaration that the Respondent had a vested right of first refusal in the purchase of the Stand No 859/52 Obote Avenue, Livingstone. (ii) A declaration that the purported sale of the Stand No 859/52 Obote Avenue, Livingstone to Jagdish Patel (the 2 nd Defendant in the Court below) was ultra vires and a nullity. (iii) An order directing that the Respondent be offered to purchase Stand No 859/52 Obote Avenue, Livingstone (iv) Costs (v) And any other relief the Court may think fit." The undisputed facts were that the Respondent was an employee of National Home Stores and a sitting tenant of Stand No 859 / 52 Obote Avenue, Livingstone. The Respondent, though entitled as an employee and sitting tenant, was not offered to purchase the house under the government housing empowerment scheme in 1994. He was not informed that the house was being sold and only found out from colleagues. Neither was his offer in a letter dated 4 th November, 1994 at page 202 to buy the house at Kl0. lm responded to. The house was instead advertised by the J3 estate agent, DW Zyambo and Associates, who was engaged to act on behalf of the Appellant (the 1st Defendant in the Court below). It was then sold to Jagdish Patel who offered K20.0m, which was above the reserve price of K18.0m. The Respondent was forced to render vacant possession of the house to Jagdish Patel in 1995 after he was retired. The learned trial Judge found that being an employee and a sitting tenant, the Respondent was vested with the right of first 4I refusal. As the Respondent had acquired an equitable interest, he ought to have been given the first option to buy the house when it was put up for sale. The learned trial Judge, however, found that she could not direct that the house be offered to the Respondent. She said that although Jagdish Patel's plea of innocent purchaser for value without notice had been defeated on account that he had constructive notice or at least ought to have inquired of the Respondent since he was a tenant, the sale of the house was not null and void as there was no proof of malice or fraud. The learned - trial Judge was convinced that the Respondent's relief lay in damages against the Appellant or whatever institution that would have taken over the affairs of the Appellant. Consequently, she directed that the proper measure of damages would be calculated at the current value of the house in question, less the price for which it was sold to J agdish Patel. Also to be deducted were costs such as improvements to the house over J4 the period from May 1995, when the Respondent yielded vacant possession to date , property transfer tax and any other charges and taxes, which were part of the cost of purchase and which the Respondent would have incurred if the right of first refusal had been fulfilled and he had purchased the property, as well as incidental legal costs. Dissatisfied with the Judgment, the Appellant raised before this Court the following two grounds of appeal: (i) That the learned trial Judge erred in law when she awarded the Plaintiff (Respondent) which was not relief to a specifically pleaded. (ii) That the measure of damages awarded to the Plaintiff (Respondent) are excessive and do not reflect the relief sought by the Plaintiff. At the hearing of this appeal, both Counsel relied entirely on their filed written heads of argument. The gist of the submissions from Counsel for the Appellant on ground one was that by ordering damages the lower court had departed from the case that the Respondent had set out. That the proper course for the Court would have been to refuse the reliefs sought and advised the Respondent to draw up appropriate reliefs . In response to ground one , Counsel for the Respondent submitted that the learned trial Judge was on firm ground when she awarded compensatory damages, notwithstanding that they were not specifically pleaded. Counsel submitted that these JS damages were general, and therefore ought not to have been specifically pleaded like special damages. That apart from the wide powers given to the High Court to grant all such remedies and reliefs in a legal or equitable claim, the Court could award any other relief which it deemed fit as prayed by the Respondent. The submissions for Ground two were essentially a repeat of those for ground one. Counsel for the Appellant submitted that the lower court's decision should be quashed because it awarded '9 damages that were not specifically pleaded. She argued that according to Black's Law dictionary damages were defined as "money claimed by or ordered to be paid to a person as compensation for loss or injury." Counsel, however, made no submission on the excessiveness of the award. In response, Counsel for the Respondent submitted that the guiding principle for the award of damages "was to put the Plaintiff in the same financial position, so far as money could e do it, as he would have been if the contract had been performed." Counsel submitted that an amount of Kl20m was neither excessive nor wrong in principle. In the alternative, if damages ought not to have been awarded, Counsel urged this Court to offer the Respondent the house in question at the reserve price in 1994. J6 We have considered the issues raised in the submissions and the evidence on record. In essence , this Court is being asked to determine whether the Court below was in order to award compensatory damages to the Respondent. In order to do this, we will have to determine whether compensatory damages are special damages , and therefore ought to have been specifically pleaded for it is trite law that if special damages are not pleaded they are not recoverable. (Musamba v Simpemba (TIA Electrical and Building Constnictors1) . • Counsel for the Appellant argued before this Court that the damages awarded to the Respondent were special while Counsel for the Respondent contended that they were ordinary or general damages . What then is the difference between special and general damages? This Court has previously drawn a distinction between general and special damages. We have in mind the ratio decidendi in the case of The Attorney General v Mpundu2 . In that case , Silungwe CJ cited the learned authors of McGregor on Damages at It page 22 , para 1-033 where they stated , "General damages ... are such as the law will presume to be the natural or probable consequence of the action complained of. Special damage, on the other hand, are such as the law will not infer from the nature of the act. They do not follow in ordinary course. They are exceptional in character and therefore they must be claimed specially and proved strictly. Further in the same case , J7 (Special damages) must therefore always be explicitly claimed on the pleadings and at the trial it must be proved by evidence both that the loss was incurred and that it was the direct result of the defendant's conduct. His Lordship, Silungwe CJ citing a number of authorities including Ilkiw v Samuels and others3 in the Mpundu case made the following pronouncement: • in the pleadings that It is thus trite law that, if a plaintiff has suffered damage of a kind which is not necessary and immediate consequence of a wrongful act, he must warn the defendant the compensation claimed would extend to this damage, thereby showing the defendant the case he has to meet and assisting him in computing a payment into court. The obligation to particularise his claim arises not so much because the nature of the loss is necessarily unusual but because a plaintiff who had the advantage of being able to base his claim upon a precise calculation must give the defendant access to the facts which make such calculation possible. Consequently, a mere statement that the plaintiff claims "damages" is not sufficient to let in evidence of a is not a necessary particular kind of loss which consequence of the wrongful act and of which the defendant is entitled to a fair warning. In other words, usual, ordinary or general damages may be generally pleaded; whereas, unusual or special damages may not, as these must be speci(i.cally pleaded in a statement of claim for where necessary, in a counter-claim} and must be proved. (Emphasis ours) The principle established in the case cited above clearly defines and distinguishes general and special damages. Special damages are damages of a kind which are not a necessary and immediate consequence of a wrongful act. Special damages do not J8 follow in ordinary course. They are exceptional in their character and therefore must be claimed and proved strictly. In the present case, the damages occasioned to the Respondent flowed from a direct and immediate consequence of the Appellant's wrongful act. The wrongful act, being the failure to grant the Respondent, as an employee and sitting tenant, the right of first refusal in purchasing Stand No 859/52 Obote Avenue in Livingstone. This was done in blatant disregard of the Appellant's own instruction to the agent and resolutions passed at a meeting with appointed agents at pages • 189 and 193 of the record. The Appellant, in this case, required no warning as to what case he had to meet. We therefore do not agree with the Appellant that the damages awarded to the Respondent were special damages, and as such ought to have been specially pleaded. For this reason we did not find the authorities cited by Counsel to be of any help. The damages are, in our view, general damages. Even if we were to agree with the Appellant that they were wrong, which we do not, we would still - agree with the submissions of the Respondent that the claim for "any other relief' in the endorsement on the writ, gives the Court discretion to grant general or other relief to which the Plaintiff is entitled based on the facts as found, provided it be not inconsistent with the relief that is being expressly asked for. (See Order 18/ 15/4 of the RSC Whitebook 1999 Edition and Cargill v Bower+) J9 Furthermore, according to the learned authors of Halsbury's Laws of England, the normal function of damages for breach of contract is compensatory. Damages are awarded not to punish the party in breach or to confer a windfall on the innocent party, but to compensate the innocent party and repair the actual loss. Their (damages) function is to put the person whose right has been invaded in the same position as if it had been respected so far as the award of the sum of money can do so. Where compensation by way of damages would be inadequate remedy or is not possible, • equity may grant relief by ordering either an injunction or specific performance. (See Halsburys Laws of England paragraphs 818 note 3, 825 and 941 at pages 391,275 and 280) To this we add, that the converse is also true. Where specific performance or injunction cannot be granted, equity may grant damages. In this regard, we find no reason to disturb the well-reasoned judgment of the learned trial Judge. We uphold the finding that the Respondent's relief lies in damages. Given the long passage of time and the changed economic circumstances since 1994, a lapse of almost 20 odd - years, coupled with the reasons advanced by the learned trial Judge, it would not be tenable to order that Stand No 859 / 52 Obote Avenue, Livingstone be offered to the Respondent. As rightly pointed out by the learned trial Judge, the correct measure of damages is the market value of the property at the contractual time set for completion or when the purchaser lost his purchase, less the contract price. (McGregor on Damages 18th Edition para 22-005 page 869 and Ridley v De Geerts5) J10 Counsel for the Respondent had stated in his submissions that the learned trial Judge proposed damages of K120 million. We think not. The figure of K120 million might have been stated to demonstrate the changed economic circumstances in respect of property values. The learned trial Judge directed the parties to agree on the present market value bearing in mind the attendant costs for the purposes of conveyancing and that in default of agreement the value and amount payable should be assessed by the District Registrar . • We therefore dismiss this appeal for want of merit. We accordingly order that this matter be referred to the District Registrar for assessment. Costs in this Court are for the Respondent to be taxed in default of agreement. ai . L. P. Chibesakunda ACTING CHIEF JUSTICE =--..!:-~mwambwa 'J .- • Phiri SUPREME COURT JUDGE SUPREME COURT JUDGE