Chihwa Chipwere v Manyame Milling Company (Private) Limited

### Preamble
Judgement No. SC 68/20
1
Civil Appeal No. SC 705/17
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REPORTABLE  (59)

CHIHWA     CHIPWERE

v

MANYAME     MILLING     COMPANY    (PRIVATE)     LIMITED

SUPREME COURT OF ZIMBABWE

PATEL JA, MAVANGIRA JA & MATHONSI JA

HARARE: MARCH 20, 2020 & JUNE 8, 2020

J. Koto, for the appellant

P. Ranchhod, for the respondent

MATHONSI JA:  This is an appeal against the whole judgment of the High Court (the court a quo) granting absolution from the instance with costs, at the close of the appellant’s case (he was the plaintiff in the court a quo). The judgment was handed down on 30 August 2017.

BACKGROUND FACTS

The appellant instituted summons proceedings against the respondent in the court a quo. The final claim was particularized in the appellant’s amended declaration filed on 5 September 2016 in which he prayed for an order directing the respondent to produce its company secretarial files and a debatement of those files. He sought an order for the allotment to himself, of the same number of shares “as have been allotted to George Paliouras”. Alternatively he sought an order for payment of the fair market value of those shares. The appellant also sought an order for the production of the respondent’s financial statements of account, their debatement and that he be paid “the same amount as has been paid to George Paliouras.”

He alleged that he had entered into an agreement for services with the respondent, which was duly represented by George Paliouras, about October 2008. The respondent, a milling company, required the appellant to source wheat for its operations in consideration for shares in the respondent company. According to the appellant, it was a term of the said agreement that in return for his services, he would be allotted the same number of shares in the respondent company as those allotted to George Paliouras. He would hold the position of director of the company and would receive the same remuneration as that of George Paliouras.

The respondent’s case was that no such agreement was ever entered into and as such it had no obligation to allot any shares or remunerate the appellant in any amount. Instead the appellant had a personal agreement with George Paliouras, a director of the respondent, which the respondent was not privy to. Such agreement did not give rise to any obligations on the part of the respondent at all. The respondent maintained that the appellant was neither an employee nor a director but was employed by Shumba Milling, a separate legal entity from the respondent.

The respondent also took the view, in any event, that the appellant’s claim as framed, had prescribed in terms of the Prescription Act [Chapter 8:11], the cause of action having arisen in October 2008. The summons was only issued on 18 November 2013 and served on the respondent on 26 November 2013 well after the prescriptive period of 3 years had lapsed.

At the trial, the evidence led by the appellant centred around proving that he had been appointed director of the respondant company. This evidence included letters, mainly authored by the appellant himself, wherein he referred to himself as director of the respondent. He also produced one letter dated 27 October 2008 written by D. B. Forster-Jones, who was listed on the respondent’s letter head as its managing director.

Owing to its centrality in the resolution of this appeal, the letter which was addressed to the marketing manager of Grain Marketing Board, is reproduced hereunder:

“Attention: The Marketing Department

SUBJECT: MANYAME MILLING-NEW APPOINTMENT.

For the sake of good order, we would like to introduce Mr C. Chipwere who is now in charge of our buying requirements and to this end we would ask that you afford him your assistance when discussing Manyame’s wheat requirements.

Thank you for your assistance in this matter.

Yours sincerely

MANYAME MILLING CO LTD

D. B. FORSTER-JONES”

In addition, the appellant produced minutes of management meetings of the respondent showing that he had attended those meetings. He also produced a copy of a toll milling agreement entered into between the respondent and Grain Marketing Board on 26 November 2008. The appellant signed the toll milling agreement on behalf of the respondent while A. Mandizha, the General Manager, signed on behalf of Grain Marketing Board.

During cross-examination of the appellant counsel for the respondent drew his attention to a letter dated 7 June 2010 addressed to George Paliouras by the appellant. He had conveniently not discovered that letter and had not referred to it at all. It became apparent that indeed the appellant’s involvement with the respondent had been a personal arrangement between himself and Paliouras.

Again, because of its importance in the determination of this appeal, parts of the letter are quoted below:

“Remember I lost my job and (sic) Persian because of you George then you (want) to treat me like a broom. No I don’t accept this not in my lifetime. Then the formation of the Manyami (sic) Milling you came to me we discussed at length about it. And I started pushing or working for Manyame Milling that was between you and me, and the agreement was you have shares out of your shares you will advise me what percentage was going to be mine.

The formation of Manyame Milling you came to me and we discussed about it and you George asked me and (sic) to start pushing for Manyame. I remember very well you told me you were going to have shares in Manyame out of your shares you promised to give me a (sic) shares from your side. Then I started working towards that and I managed to do my best from allocation to toll Milling.

Signing deals on behalf of you George not as Manyame Milling.”

(The underlining is for emphasis)

At the close of the appellant’s case the respondent made an application for absolution from the instance and also motivated its special plea of prescription. The application was premised on the fact that the appellant had failed to establish its claim as particularized in the amended declaration. He had failed to make out a prima facie case for the relief sought. Regarding prescription, it was submitted for the respondent that the appellant’s claim for allotment of shares and indeed for director’s remuneration were predicated upon an agreement allegedly entered into in October 2008.

To that extent, so it was averred, the claim for allotment of shares prescribed at the expiration of the period of 3 years from October 2008. His claim for remuneration which fell outside the prescriptive period of 3 years was also prescribed.

DETERMINATION OF THE COURT A QUO

The court a quo noted that counsel for the appellant had made a concession that the appellant’s claim for amounts allegedly due to him in October 2010 had prescribed by reason that, according to the appellant payment was due after two years from October 2008 when the agreement was allegedly concluded. Those claims should have been made within 3 years from October 2010 and therefore prescribed in October 2013. The court a quo found that the concession was correctly made. It dismissed the appellant’s attempt to withdraw the concession and found that the appellant’s claim for shares should have been brought within 3 years from October 2010 as well and therefore was prescribed.

The court a quo upheld the special pleas of prescription in respect of the claim for remuneration for the period between October 2010 and October 2013 leaving only the appellant’s claim for remuneration in respect of the period between November 2010 and March 2012 when the parties allegedly parted ways. It is that portion of the appellant’s claim which became the subject of the application for absolution from the instance. This is so because the court a quo also dismissed the appellant’s claim for allotment of shares in its entirety because it was also prescribed.

It is significant, as correctly stated by Mr Ranchhod for the respondent, that that part of the judgment of the court   a quo has not been contested at all in the grounds of appeal. Be that as it may, the court a quo found that the appellant’s evidence did not establish a prima facie case which the respondent could be called upon to answer.  It granted absolution from the instance. Needless to say, the appellant was aggrieved and noted this appeal on the grounds set out below.

GROUNDS OF APPEAL

1.        The court a quo seriously misdirected itself at law by concluding on the basis of the appellant’s letter to George Paliouras dated 7 June 2010 that the appellant had a private agreement with George Paliouras and not the respondent.

2.    The court a quo seriously misdirected itself on the facts which amounts to a    misdirection on the law when it concluded that the appellant failed to show that George Paliouras concluded the agreement with him on behalf of the respondent when the appellant established a prima facie case that there was an oral agreement with Paliouras representing the respondent.

3.    The court a quo erred and seriously misdirected itself in law by granting absolution from the instance despite representations made by the respondent on documentary evidence produced at the trial that the appellant was a director who attended management meetings with other directors of the respondent other than Paliouras prima facie indicating that he was a director.

The appellant would like the judgment of the court a quo set aside and substituted with an order dismissing the application for absolution from the instance and a remittal of the matter to the court a quo for continuation of trial. He craves an award of costs against the respondent.

ISSUES

The appellant’s 3 grounds of appeal are unduly wordy and long winding. They however only boil down to two issues namely;

1. Whether the factual findings of the court a quo were grossly unreasonable.

2. Whether the court a quo misdirected itself when it granted    absolution from the instance.

I shall proceed to relate to each of the two issues in turn.

WHETHER THE FACTUAL FINDINGS OF THE COURT A QUO WERE GROSSLY UNREASONABLE

The first and second grounds of appeal challenge what are essentially factual findings of the court a quo. The court     a quo found that the appellant had a private arrangement or agreement with Paliouras. He did not have an agreement with the respondent. In that regard the court a quo found, at p 9 of the cyclostyled judgment;

“As submitted by Mr Ranchhod, this letter materially and fatally damages the plaintiff’s case. If anything, it confirms the defendant’s defence which is that the plaintiff and George Paliouras had a private arrangement between themselves and that arrangement excluded the defendant. It is in terms of this private arrangement that the two agreed that George Paliouras would give some of his shares to the plaintiff and also pay him. This is evidenced by the payment vouchers that the plaintiff signed as far back as 2008 as he collected money from George Paliouras’ director’s fees.”

It is settled that an appeal court will not lightly interfere with the factual findings of a lower court. It will only interfere where the factual findings are so grossly unreasonable that no sensible person applying his or her mind to the facts would have reached the same decision. See Zinwa v Mwoyounotsva 2015 (1) ZLR 935 (S) para 16. Indeed, whether there was an agreement between the parties in which the respondent was duly represented by Paliouras is a factual issue.

The court a quo resolved that factual issue in favour of the respondent. As shown above, it concluded, owing to the letter authored by the appellant on 7 June 2010, that the agreement existed only between the appellant and Paliouras. This Court will only interfere with the factual findings of the lower court in exceptional circumstances. Those circumstances were set out in RBZ v Granger & Anor SC 34/01 as:

“There must be an allegation that there has been a misdirection on the facts which is so unreasonable that no sensible person who had applied his mind to the facts would have arrived at such a decision. A misdirection of fact is either a failure to appreciate a fact at all, or a finding of the fact that is contrary to the evidence actually presented.”

See also Zvokusekwa v Bikita Rural District Council SC 34/15.

The evidence led on behalf of the appellant did not come anywhere near establishing the existence of an agreement between the appellant and the respondent. It did not even begin to set out the terms of such agreement. The number of shares which were to be allotted to the appellant was not pleaded and neither was it shown by the evidence. The same goes for the remuneration to be accorded to the appellant.

The evidence itself did not advance the appellant’s case anywhere beyond “the same number of shares as George Paliouras” and “the same as the remuneration received by George Paliouras”, which were pleaded in the declaration. Against that obviously inadequate evidence was the tangible evidence of what the court   a quo referred to as an “arrangement” between the appellant and Paliouras. This is contained in the letter written by the appellant himself which I have already alluded to.

The court a quo cannot be faulted for finding that the only agreement which existed was between the appellant and Paliouras. That factual finding was reasonable and supported by evidence. Therefore, the requirements for interference with factual findings of a lower court set out in the authorities cited above have not been satisfied. The first and second appeal grounds cannot succeed.

This is so because none of the other documentary evidence relied upon by the appellant as indicative of his appointment as director of the respondent proves anything. The letter of introduction to the Grain Marketing Board does not go beyond showing that he was allowed to buy wheat for the respondent. The letters written by the appellant himself, which appear to have been computer generated and significantly different from those with the official letterhead of the respondent, do not show that he was appointed director.

This is particularly so given that it is common cause that the CR 14 form containing the list of directors was never changed to include the appellant. The appellant failed dismally to shake off the claim that even the management meetings he attended were only those at which Paliouras was in attendance. This is consistent with the contents of his letter of 7 June 2010.

WHETHER THE COURT A QUO MISDIRECTED ITSELF WHEN IT GRANTED ABSOLUTION FROM THE INSTANCE.

The test to be applied in an application for absolution from the instance is well established in this jurisdiction. At that stage of the trial the question which arises for the consideration of the court is: Is there evidence upon which a reasonable person might find for the plaintiff? It means that at the close of the case for the plaintiff, the court must answer the question whether there is before the court, a prima facie case against the defendant upon which a reasonable person might, not should, give judgment against the defendant. See Gascoyne v Paul & Hunter 1917 TPD 170 at 173.

That case has been consistently followed in this jurisdiction for a long time. See Supreme Service Station (1969) (Pvt) Ltd v Fox & Goodridge (Pvt) Ltd 1971 (1) RLR 1(A); Walker v Industrial Equity Ltd 1995 (1) ZLR 87 (S); United Air Charterers v Jarman 1994 (2) ZLR 341 (S).

The essence of an application for absolution at the close of the plaintiff’s case is for the court to determine whether there is sufficient evidence upon which it might make a “reasonable mistake” and find for the plaintiff. If there is none, absolution should be granted. I have said that the court a quo was correct to find that there was no agreement between the parties and that what existed was one between the appellant and Paliouras.

To the extent that the evidence adduced by the appellant failed to establish an agreement, it means that the appellant did not establish a prima facie case upon which the respondent could be required to present a defence. I hold the view that, as much as the courts are generally loath to decide upon questions of fact without hearing all the evidence from both sides, where clearly there is no chance at all of the court making a reasonable mistake from the evidence led and granting judgment for the plaintiff, it would be unfair to saddle the defendant with the task of answering to a non-existent case merely to satisfy the need to hear all the evidence.

The appellant did not make out a prima facie case. None of the essentials of his claim was established. The court a quo cannot be faulted for granting absolution from the instance as there was nothing before the court for the respondent to answer to. The appeal is lacking in merit in its entirety.

In the result, it is ordered that:

1. The appeal be and is hereby dismissed.

2. The appellant shall bear the costs.

PATEL JA			I agree

MAVANGIRA JA		I agree

Hussein & Ranchhod, appellant’s legal practitioners

Gahadzikwa & Mupunda, respondent’s legal practitioners