ZDA- Henan Guoji Development Company v Alex Mothusi Kufi (APPEAL NO. 118 OF 2022) (29 February 2024) – ZambiaLII

u, Tn~ \,;UUKT u11· .A..t'.t'~.A.L .A..t'.t'.ti.A.L .NU. l HS U.14' ~U~~ HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN: APPELLANT AND ALEX MOTHUSI KUFI RESPONDENT CORAM: KONDOLO SC, MAJULA AND PATEL, JJA ON: 22nd and 29th February, 2024 For the Appellant: Not in attendance For the Respondent: Not in attendance JUDGMENT KONDOLO SC JA, delivered the Judgment of the Court. Cases referred to: 1. Kitwe City Council v N'guni (2005) ZR 57 2. Zambia Consolidated Copper Mines v Jackson Munyika Siame & Others (2004) ZR 193 3. Celtel Zambia Limited (T / A Zain Zambia) v Zambia revenue Authority (2022) ZR Vol. 2. b. Colgate Palmolive (Z) Inc, V Abel Shemu Chuka & l IU Others SCZ/ 181/2005 (unreported). 7. Dangote Industries Zambia Limited v Enfin Limited SCZ/53/2020 8. Berry v Berry (1929) 2KB 316 9. Woodhouse A.C. Israel Cocoa Limited SA v Nigerian Produce Marky Company A.C. 741. 10. Holmes Limited v Buildwell Construction Limited (1973) ZR97 11. The Attorney General v Marcus Kampumba Achiume (1983) ZR, 1 12. National Drug Company Limited and Zambia Privatization Agency v. Mary Katongo SCZ/79/ 2001 Statutes & Publications referred to: 1. Section 23 (1) and (2) of the Employment Code Act No.3 of 2019 2. Chitty on Contracts: General Principles, volume 1, 29th Edition by H.G. Beale General Editor, Sweet & Maxwell & Thomson Reuters, London page 42 3. Mckedrick's Contract Law, 3rd Edition 1.0 INTRODUCTION 1.1 This is an appeal against the Ruling of Justice Mrs. M.K. Makubalo delivered on 30th November, 2021 under Cause COMP IRC LK/2021. 2.1 The Respondent was employed by the Appellant as a property consultant. He was entitled to a salary and a commission when customers he introduced to the Appellant company made a purchase. 2.2 He was dismissed from employment and sued seeking payment for the following; 1. Unfair dismissal 2. Commission from clients he sourced 3. Costs and any other benefits the Court may deem fit 2.3 The trial Judge dismissed the claim with regard to unfair dismissal but allowed the claim for commission. 3.0 HIGH COURT PROCEEDINGS 3.1 Appellant's Arguments in the High Court 3.2 The Appellant testified as CWl and told the Court that he was employed by the Appellant but on 16th November 2020 he submitted a 30-day notice that he was resigning from employment. V.V J.J.J.0 OU..1::-'\..,J. VJ.OVJ. a..:>n.\..-U. J.J.J.J.J.J. LV Lan.\..- aii Lii\..- \..,VJ.iJ..1::-'a.J.J..J .1::-'i V.1::-'\..-J. L.J LV their offices in Silverest. Since he was using his personal car, he asked for money for fuel but his supervisor refused to provide him with the money. He told the supervisor that in that case he would be unable to go to Silverest. 3.4 To his surprise, the following day he received a dismissal letter and he was subsequently paid all his dues except his comm1ss10n. 3.5 He stated that when initially engaged he was entitled to commission at the rate of .003% of the sales from customers he introduced to the company. The contract of service was varied by a letter dated 12th September 2020 increasing the commission to 2%. 3. 6 CW 1 explained that his commission was normally paid in full with respect to customers who paid in full. However, with regard to customers making partial payments, the comm1ss10n would be calculated and paid on the basis of each particular deposit. However, because he had now separated from employment, he expected to be paid all his dues with regard to the commission regardless of whether or not the customers had paid the Appellant. ~. 1 n.pptanuu. ::; n..£1,uuuau.::; .1.11 1..11c .a.J.1,.11 '-'VUJ. 1. 3.8 The Appellants called one witness, Mr. Francis Chiketa who denied that the Respondent was wrongfully dismissed. He stated that that the Respondent had previously been given a final warning for the same offence for which had now been dismissed. 3. 9 He stated that the Respondent had been paid his terminal benefits and the Appellant was willing to pay him his commission at the rate .003% in respect of sales made before 1st September, 2020 when the letter varying the contract took effect and thereafter at the rate of 2% as per variation of contract. 4.0 HIGH COURT DECISION 4 .1 The trial Court found that the Respondent was properly dismissed and the claim for unfair dismissal was refused. The trial Judge further found that the Respondent had been paid his terminal package in line with the case of Kitwe City Council v N'guni 111. 4.2 With regard to the payment of commission, the trial Judge observed that the contract of employment initially provided Lilct.L Wllt:11 Lilt: ~t:::SjJUllUt:lll Ul uug1n llt:W CU::SLUlllt:l ::S LU purchase property, he would receive .003% from each sale. 4.3 The learned trial Judge observed that the contract was varied by a letter dated 12th September, 2020 which increased the commission from 0.003% to 2% per sale. 4.4 The trial Court found that the Respondent had made eight sales. That the variation was a new condition of service which affected all the conditions concerning percentage which were consequently varied. That therefore, the commission of 2% should be paid with respect to all the sales whether the clients were secured before or after the variation. 4.5 The learned trial Judge noted that the agreement between the parties provided that commission would be paid in full where the clients had paid the full purchase price. But, where partial payments were paid the commission would be calculated on the sums paid. 4.6 However, according to the trial Judge, in view of the fact that the Respondent had separated from employment it was not feasible for him to be hauling the Appellant to Court for failing to pay him what he rightfully worked for. 4. 7 On that basis, the trial Judge held as follows; "I am of the Lurnp ~urn JUT Ull Lne c;neni~ n~ nuu ~ec;urt:u wrw nuvt: commenced paying. It will cut costs and not having the same parties before Court now and again. )) 5.0 APPEAL 5.1 The Appellant was dissatisfied with the outcome and has appealed on two grounds as follows; 1. The learned trial Judge misdirected herself and fell into grave error when she found that the Respondent was entitled to a commission at the rate of 2% instead of 0.003% 2. The trial Court below erred in fact and law when it ordered for the immediate payment of the commission when it in fact falls due on the dates of payment as per instalment plan. 5.2 Appellant's Arguments 5.3 Ground 1 5.4 In ground one both parties agree that the contract of employment provided for the Respondent to be paid comm1ss10n on every property he sold on behalf of the Appellant at the initial rate of .003% which was increased to :::>.:::> n: was suomruea Illar: Ille Inai 0 uage erreu wnen :sne uruereu that all the interest arrears should be paid at the rate of 2% because that should only apply to sales made after 1 st September because variations to contracts cannot have retrospective effect. In support, the Appellant cited the cases of Zambia Consolidated Copper Mines v Jackson Munyika Siame & Others 12 , and Celtel Zambia Limited (T / A Zain Zambia) v Zambia revenue Authority 13 ,. 5.6 It was prayed that this ground of appeal be allowed as the learned trial Judge should have ordered that commission on sales made before 1s t September, 2020 be paid at the rate .002%. 5.7 Ground 2 5.8 In ground 2 it was contended that the trial Judge erred when she ordered that the Respondents commission be paid in a lump sum. It was pointed out that the Contract between the parties expressly stated that the commission would be calculated and paid from the principal sums actually paid by the customers. That parties. are bound by the terms of contract the entered into and the trial Court should have enforced the contract and the cases of Tijam Entterprise Febian Musialela v Evans Chipman 151 were cited. 5.9 That the trial Court erred by effectively altering the terms of the contract executed between the parties and this ground should therefore be upheld. 6.0 RESPONDENT'S ARGUMENTS 6.1 In grounds 1 and 2 the Respondent submitted that the Courts are duty bound to uphold the terms of a contract as agreed by the parties to it and the same applies to contracts of employment. In support of this he cited section 23 (1) and (2) of the Employment Code Act No.3 of 2019 and the case of Colgate Palmolive (Z) Inc, v Abel Shemu Chuka & 110 Others. 171 6.2 According to the Respondent, payment of commission was conditional upon the client commencing payment and the contract was clear that under clause 5 of the agreement the Respondent was entitled to full payment of the commission upon carrying out the full scope of his duties. 6.3 He submitted that the law on legal interpretation clearly states that words must be construed as they stand and it is not the function of the Court to ascertain the intention of the 1, 29th Edition by H.G. Beale General Editor, Sweet & Maxwell & Thomson Reuters, London page 42 and the case of Dangote Industries Zambia Limited v Enfin Limited. l7I 6.4 The Respondent pointed out that the parties were in agreement that the commission had been varied from .003% to 2% and the only question facing the Court when the variation would take effect and how it should be paid. 6.5 He further submitted that the letter varying the contract is silent on whether the variation affects- the commission to be paid over clients he took to the Appellant before the said variation. That the Appellant was aware of the pre-existing customers and yet offered to pay 2% commission in the variation which was accepted by the Respondent, meaning that there was agreement that the variation would apply to customers he took to the Appellant company before the variation was agreed. 6.6 It was submitted that the employment contract and letter of variation ought to be read as one document because upon execution of the variation, the Appellant was not entitled to revert to the original terms of the commission rate. He cited Cocoa Limited SA v Nigerian Produce Marky Company. l9I 6.7 The Respondent further argued that the silence on whether the variation should apply to customers introduced before the variation was made should be construed in his favour. That no contrary indication was given by the Appellant company and he cited several case including the case of Holmes Limited v Buildwell Construction Limited 1101 on the general principle that parol evidence cannot be admitted to add to or contradict a written document. 6.8 That the trial Judge was on firm ground when she found that the varied commission of 2% applied to all commissions due to the Respondent. 6. 9 In ground 2 it was argued that the trial Judge was on firm ground to order that the commissions due should be paid as a lump sum. That the contract was silent on how the commission should be paid upon separation apart from the provision that the commission would be paid when clients commence payment. 6.10 That the trial Judge could therefore not be faulted for ordering payment of a lump sum to cut his costs and prayed that the ::1nn~::11 h~ rlismissed. 7.0 THE HEARING 7 .1 Neither party appeared at the hearing despite being aware of the hearing date and neither of them filed a notice of non attendance. 7.2 We decided that the appeal shall be determined on the basis of the record of appeal and the heads of argument filed by both parties. 8.0 ANALYSIS AND DECISION OF THE COURT 8.1 We have considered the record of appeal and the arguments advanced by the parties and observe that the two grounds of appeal are intertwined and we shall therefore address them together. 8.2 The entire appeal revolves around the issue of the how payment of the Respondents Commission should be treated and two questions for determination come to the fore; 1. After the commission was the increased from . 003% to 2%, how was the increment to be applied, i.e. was the new rate applicable to customers introduced by the Respondent after the contract of employment was varied? ..::.,. VV\A,,J L,IL,C.,.. L,f(,I.A,(, '-'VlA,fL, VILJUIIL, t:JIVlA,fl,1.,,,t, L,V VI\A,\..,,I L,fl,1,.,t,L, '-'IL\..,, commission be paid purely on the basis of the Respondent having secured a customer and not on the basis ofp ayments made by the customer. 8.3 The Respondent was originally entitled to commission at the rate of .003% on the value of property sold to customers he had secured. The amount was increased to 2% by a letter dated 12th September which in part stated as follows; "Hence, the purpose of this letter therefore is to detail the proposed changes to your salary and ask you to agree to those changes by signing this letter which varies your contract of employment with effect from 1st September, 2020." 8.4 There was nothing ambiguous about when the varied conditions of service would take effect. The letter said nothing about any of the variations having retrospective effect. 8.5 Despite the Respondents well-articulated arguments, in our view, with respect to sales which were concluded before 1 st September the commission was locked-in at the rate of .003% as the act of introducing the clients had been performed and agreed rate of .003%. 8.6 The trial Judge made the following finding at page 20 of the record of appeal; " . . . . . once the variation was made in writing and accepted by the Complainant [Respondent} by pending his signature it became a new contract binding the parties and neither of them could claim what was not agreed upon. Moreover the variation has not referred to pre-existing clients concerning the percentage to be paid. All the conditions concerning the percentage were varied as from 12th September 2020 and the Complainant is entitled to a payment at 2% for all the clients he secured for the Respondent. 11 8.7 This finding of fact was perverse because it was contrary to the evidence on record which shows that that the letter varying the contract1 at page was dated 12th September, 2020 but the trial Judge omitted to consider that the letter indicated the date of 1 st September, 2020 as the effective date which was actually a retrospective date agreed to by both .t-''-"'-"'-'-.1.'-'-• .I.'- ........... _ \.,.L.L...._,.L.....,.L.._, .... ....., .................................. J ........ .._,"' ............ "'_ ........ ___ - ..1 _.._ ___ r------ -- extend the retrospective effect further backwards. The implication is that the 2% commission would only apply to customers brought to the Appellant company by the Respondent after 1st September, 2020. 8.8 Ordering that the new 2% comm1ss10n be applied retrospectively amounted to the trial Court interfering with the unambiguous terms of the variation letter. We therefore exercise our power to interfere with this perverse finding of fact (See Attorney General v Marcus Achiume f11J) and we overturn it and find that the commission of 2% should only be applied to payments from customers who were brought to the Appellant company by the Respondent after 1 st September, 2020. 8. 9 On the second issue for determination, we note that neither the contract of employment nor the variation letter set out the manner in which the cornmission was to be paid but at page J 11 of the Judgement (page 21 of the record of appeal), the trial Court found as a fact that the established pattern was that the commission was paid according to the payments made by a client. This was supported by the evidence of both oarties. ----- ---- - } ---- ---------- -- ---- r--- ---- --- ---- r----.;------- -- interest was clearly an implied term of their contract and neither of them raised any issue over it during the course of their relationship. 8.11 The learned trial Judge, however, once again interfered with the contract when she ordered that the Respondent should be paid the commission due from every customer he had secured even before they made payment. The Court's rationale being that since the Respondent was no longer employed by the Appellant he should not be expected to come back to Court every time the Appellant did not pay the Respondent after one of his customers paid. 8.12 Quite apart from the law, the trial Court's order was wrong even from the perspective that the Appellant was being ordered to pay a commission against payments which might never be received. 8.13 It is trite that the role of the Court is only to enforce contracts and never to create, dissolve or change them. This rationale was highlighted in the case of Holmes Limited v Buildwell Construction Company Limited supra cited by the Respondent where the Court held that: 'where parties have embodied the terms of their contract in a written document) .,_,✓'--&.,I t,JL,-..Jt,'--' .,_,VL,\.A, ....... I L,'--'.,_, 1.,-..J IL,'-JL, ~.,_,IL,.,_,I \A.,L,&,~ \A.,L,t,\JVV'-'\.A, L,\,J' \A.,\.A,\,A, L,'-J V\A.,I ~ ) subtract from or contradict the terms of the written contract. ) 8.14 The point was emphasised much later 1n the case of National Drug Company Limited and Zambia Privatization Agency v. Mary Katongo 1121 where the Supreme Court held as follows; "It is trite law that once the parties have voluntarily and freely entered into a legal contract) they become bound to abide by the terms of the contract and that the role of the Court is to give efficacy to the contract when one party has breached it by respecting) upholding and enforcing the contract.)) In this appeal) it is apt to quote Evan Mckedrick)s Contract Law, at page 3) that: "The Law of contract is perceived as a set of power conferring rules which enable individuals to enter into agreement of their own choice on their own terms. Freedom of contract and sanctity of contract are the dominant ideologies. Parties should be as free as possible to make agreements on their own terms l,fl,'-"t,f vt.!:jl'-".._,lll,.._,ll,L,-.J ._,_JflAJLA,t,\A., A..J\-..- 1'-"._,_J_t-'.._,'-"l,.._,\.A.) lA,,_t-'fl,'-"L\.A. I.A,fl,I.Aenforced by the Courts." 8.15 The learned trial Judge fell into grave error because the orders she made had the effect of altering the terms of the employment contract. Whilst one might understand her concern on the manner of how the commission was to be paid, in view of the Respondents separation from -r~ employment, law is quite categorical that a Court cannot A vary the terms of a contract to suit the convenience of only one of the parties. 8.16 The sanctity of contracts 1s sacrosanct and the trial Court thus gravely erred when she interfered with the parties' contract of employment by either varying or altering the terms. 8.17 We note the genuine concern of the trial Judge that the Respondent should not be forced to commence an action every time a payment by one of "his" customers is made and the Appellant has omitted to pay him his comm1ss10n. 8.18 There must be an end to litigation and we therefore ---., ------•-------- --- -- •••••• WW .. ,.,AAAAA ■ ......., , .., '-'A ,._ ....... customer paying. 9.0 CONCLUSION 9 .1 This appeal succeeds but having emanated from the Industrial Relations Division of the High Court, each ~ party shall, ._t heir own costs. M.M. KONDOLO, SC COURT OF APPEAL JUDGE r ~ l. c,,q- .............. ······················ B.M. AJULA A.N. PATEL, SC COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE