Ayoun Energy Limited And Anor v Mount Meru Petroleum Zambia Limited (2023/HPC/0143) (5 March 2025) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA 2023/HPC/0143 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: AYOUN ENERGY LIMITED 0 5 MM{ 2025 1 ST PLAINTIFF . AYOUN TELECOM SOLUTIONS COMPANY LIMI1}ED 2ND PLAINTIFF =~=- Am ~ .MOUNT MERU PETROLEUM ZAMBIA LIMITED DEFENDANT Before: The Honourable Mr. Justice L. Mwanabo on 5th March, 2025 For the Plaintiff: Mr. I. Simbcye with Mr. D. Ncube of Messrs. Malisa & Partners Legal Practitioners and Mr. L.C. Zulu of Messrs. Malambo & Company For the Defendant: Mr. L. Linyama with Mr. J. Chileshe and N. Silwamba of Messrs. Eric Silwamba, Jalasi & Linyama Legal Practitioners JUDGMENT Cases referred to: l. Zambia Breweries Plc v Betternow Family Limited Selected Judgment No. 48 of 2016 2. Wilson Masauso Zulu v Avondale Housing Project Limited (1982) ZR 175 3. Rapid Global Freight Limited V Zambia Railways CAZ Appeal No. 216/2019 4. Power Equipment Limited v Goldtronics Limited and Barclays Plc {2021) Vol 3 358 5. Febian Musialela v Evans Chipman (HPC 256 of 2020) 2011 ZMHC 29 (20 July 2011) 6. Mhango v Ngulube and others (1983) ZR 61 7. Zambia National Building Society v Ernest Mukwamataba Nayunda SCZ Judgment 11 of 1993 8. Zambia Industrial and Mining Corporation Limited (In Liquidation) v Lishomwa Muuka (1998) ZR 1 9. Lombe Chibesakunda v Rajan Lekhraj Mahtani (1998) ZR 60 10. Barclays Bank Zambia Plc v Patricia Leah Chatta Chipepa SCZ Appeal 131/2014 11. Finance Bank Zambia Limited and Anor v Simataa Simataa (Selected Judgment No. 21 of 2017) 12. Mutale v Zambia Consolidated Copper Mines (1993-1994) ZR 94 Legislation Referred to: 1. Sale of Goods Act, 1893 2. Regulation 182 of the Public Procurement Regulations, 2022 3. The Public Procurement Act, 2020 (Act No. 8 of 2020) Other Materials referred to: 1. Sangwani P. Ng'amhi and Chanda Chungu, Contract Law in Zambia 2nd Edition (Claremont, Juta and Compainy (Pty) Ltd, 2021) 2. Gardner, Black's Law Dictionary, 11th Edition, Thomson Reuters 1.0 INTRODUCTION 1.1. The Plaintiffs herein commenced this action by way of writ of summons accompanied by statement of claim on 27th February, 2023 against the Defendant. On 1st June, 2023 the Plaintiffs filed amended writ of summons and statement of claim. According to the amended writ of summons, the Plaintiff claims the following: r. Damages for fraudulent misrepresentation. zr. An Order that the Defendant pays the sum of ZMW 10,983,900.00 being compensation for loss of profit/ commercial opportunity as a result of the Defendant's failure to deliver the contractual quantities of diesel. m. Damages for breach of contract. w. Damages for reputational damage. J2 V. Interests on all sums found payable to the Plaintiffs. vi. Costs. vn. Further and any other relief that the Court may deem fit. 1.2. The Defendant filed a defence on 14th March, 2023 and later, following amendments by the Plaintiff, it filed an amended defence on 19th July, 2023. 2.0 BACKGROUND 2 .1. The background of this matter as disclosed in the amended statement of claim is that between 6th and 7th January, 2023, a Mr. Liyakati Meghani, the Defendant's Distribution Manager, contacted the 1st Plaintiff's Managing Director by telephone offering diesel for sale on behalf of the Defendant. That following this telephone conversation, the Defendant's representative and the Plaintiff's Managing Director engaged m WhatsApp conversations mainly negotiating the pricing, payment terms, quantity and delivery period within which the Defendant would deliver the diesel once the Plaintiffs expressed interest to purchase the diesel from the Defendant. 2.2. The Plaintiffs averred that the Plaintiffs and the Defendant entered into an agreement by which the Plaintiff would order and the Defendant would supply quantities of diesel at prices agreed upon by the parties and were to be specified in each purchase order issued by the Plaintiffs. That on 6th January, 2023, the Plaintiffs ordered 520 cubic metres (520,000 litres) at a price of ZMW 11,762,400.00 by way of Purchase Order Number PO.00036 from the Defendant ("the 1st Purchase Order"). The Plaintiff indicated that it was a further condition of the 1st Purchase Order that once the 1st Plaintiff paid full price of the 1st Purchase Order, the Defendant would deliver the entire consignment of 520 cubic metres of diesel to the Plaintiffs on or before 9th January, 2023. J3 2.3. The Plaintiffs averred that in line with the terms of the Purchase Order, the 1st Plaintiff proceeded to make a full purchase of the 1st Purchase Order on 7th January, 2023 but contrary to the terms of the 1st Purchase Order, by 9th January, 2023, the Defendant had only delivered 74 cubic metres (74,000 litres) of the 1st Purchase Order, with 426,000 litres of the 1st Purchase Order remaining unsupplied ("unsupplied quantity"). 2.4. It was alleged by the Plaintiffs that when they demanded for delivery of the unsupplied quantity, the Defendant committed to delivering the same within the days and that the Defendant implored the Plaintiffs to order more diesel while assuring the Plaintiffs that the Defendant had a number of diesel tankers awaiting clearance at the border capable of delivering the unsupplied quantity as well as any new orders that the Plaintiff would make within the agreed time frame. 2.5. According to the Plaintiff, on 16th January, 2023, relying on the Defendant's representations and assurances, the 1st Plaintiff proceeded to make another purchase order of 500 cubic litres (500,000 litres) of diesel at a purchase price of ZMW 11,252,000.00 ("The 2nd Purchase Order"). The Plaintiff indicated that the terms of the 2nd Purchase Order were that the Plaintiffs would pay 50% of the purchase price in advance and the balance upon the Defendant delivering the 2nd Purchase Order in full on 20th January, 2023. 2.6. On 17th January, 2023, the Plaintiffs advanced the sum of ZMW 7,000,000.00 to the Defendant as part payment for the 2nd Purchase Order. The 2nd Plaintiff, on 17th January, 2023, ordered another 500 cubic metres of diesel from the Defendant at a total consideration of ZMW 11,252,000.00 ("The 3rd Purchase Order") premised on the Defendants representations on capacity to supply. 2. 7. The Plaintiffs indicated that the terms of the 3rd Purchase Order were that the Defendant would deliver the consignment of the 3rd J4 Purchase Order to Plaintiff immediately the Plaintiff paid the sum ZMW 8,300,000.00 as advance payment towards the 3rd Purchase Order price and that the Plaintiff would settle the balance of the 3rd Purchase Order purchase price upon the Defendant delivering the full consignment thereof. The 2nd Plaintiff asserted that it proceeded to pay the sum of ZMW 8,300,000.00 by 18th January, 2023 according to the terms of the 3rd Purchase Order. The Plaintiffs contended that despite receiving the payments from the Plaintiffs as agreed, the Defendant only started delivering the contracted diesel on 19th January, 2023 but further assured the Plaintiffs that the Defendant had enough diesel in stock deliverable within the coming days and encouraged the Plaintiffs to make further orders and make advance payments. 2.8. According to the 1st Plaintiff, it relied on the Defendant's further assurance and the repeated representations that the Defendant had enough stocks of diesel to satisfy further orders immediately, and on 20th January, 2023, the 1st Plaintiff proceeded to make a further order of 1000 cubic metres of diesel ("The 4th Purchase Order") at a total cost of ZMW 22,620,000.00. The conditions of the 4th Purchase Order were said to be that, the Plaintiff would make an advance payment totalling ZMW 14,320,000.00 by 24th January, 2023 and the Defendant was obliged to deliver all outstanding consignments by 25th January, 2023. The 1st Plaintiff complained that despite making the advance payment of ZMW 14,320,000.00 in line with the conditions of the 4th Purchase Order, the Defendant did not honour its obligations under the 4th Purchase Order. 2.10. The Plaintiffs averred that by relying on the Defendant's representations and assurances as before, on 20th January, 2023, the Plaintiff ordered a total of 1,000 cubic metres of diesel ("The 5th Purchase Order"). The conditions of the 5th Purchase Order were said to be that, the 2nd Plaintiff would make an JS advance payment of ZMW 14,252,000.00 and the Defendant would supply all outstanding consignments including the 5th Purchase Order by 25th January, 2023. However, the Defendant is said not to have honoured its obligations under the 5th Purchase Order. 2.10. The Plaintiffs indicated that in fuel business, time is of the essence as price reviews are carried out by the Energy Regulation Board ("ERB") on a monthly basis and the Plaintiffs did in fact, on 31st January, 2023, inform the Defendant of the price reviews via WhatsApp messages. 2.11. The Plaintiffs averred that on 16th January, 2023, the Defendant, by way of WhatsApp messages sent by its representative, Liyakati Meghani did make representations that were calculated to induce the Plaintiffs into placing more orders with the Defendant by creating the impression that the Defendant did have in its possession the quantity of diesel required by the Plaintiffs and that the Plaintiffs relied on the same representations to make further orders and payments to the Defendant. The Plaintiffs particularised the Defendant's fraudulent representation as follows: 1. At 11 :40 AM on the 16th of January 2023, the Defendant represented to the Plaintiffs, through a WhatsApp message sent by Liyakati Meghani that it had 10 trucks ready to deliver diesel to a place designated by the Plaintiffs at the same time. 11. The Defendant, on the 16th day of January 2023 by way of a WhatsApp message sent by Liyakati Meghani at 6: 11 PM, did represent to the Plaintiffs that it has 25 trucks of diesel which were ready to be delivered to the Defendant at once. 2.12. According to the Plaintiffs, the said representations by the Defendant were made fraudulently and deceitfully, in that the Defendant knew or ought to have known that it did not have the quantities of diesel in stock nor the ability to supply the J6 quantities of diesel it undertook to supply in satisfaction of the 1st to 5th Purchase Order on specific dates and timelines, thus the representations were false or made recklessly, not caring whether it was true or false thereby occasioning damage and loss on the Plaintiffs. 2.13. The Plaintiffs contended that in clear breach of terms of the purchase orders, the Defendant delivered the diesel erratically and haphazardly without due regard to the time frames stated in specific purchase orders therein despite being reminded on numerous occasions by the Plaintiffs that due to the nature of the business, time was of essence and the Plaintiffs also had agreements with their clients that they needed to honour. 2.14. The Plaintiffs further contended that when they pressed the Defendant to make good on the purchase orders by 31st January, 2023 because of the monthly fuel price reviews undertaken by the ERB, the Defendant assured the Plaintiffs that it would deliver the remaining quantities of diesel before 31st January, 2023. That despite the Defendant making the aforesaid assurances and commitments, it failed to deliver the agreed quahtities of diesel by 31st January, 2023 and 3rd February, 2023, after having delivered only 1,203.93 cubic metres (1,203,932 litres) of diesel, out of the total ordered 3,500 cubic metres (3,500,000 litres) and that the Defendant completely stopped delivering the ordered diesel to the Plaintiffs. 2.15. On 10th February, 2023, the Defendant is said to have unilaterally rescinded the agreement to supply diesel by cancelling the Purchase Orders indicating that the Defendant had no diesel in stock to supply the Plaintiffs in accordance with the terms and conditions of the purchase orders and offering to refund the Plaintiffs only the amount the Plaintiffs paid for the purchase of the fuel less the value of the fuel it had already supplied. J7 2.16. The Plaintiffs stated that they rejected the Defendant's offer to refund them citing the fact that the Defendant was contractually obliged to supply the 3,500 cubic metres of diesel that had been contracted for and that because of currency fluctuations, price changes and the length of time that the Defendant had held on to their money and not supplied them with the diesel, the Plaintiffs had suffered colossal losses. According to the Plaintiff, it was agreed as a form of compromise on 14th February, 2023 that in order to cushion the Plaintiffs from losses occasioned by foreign currency exchange fluctuations, the Defendant would convert the amounts due to the Plaintiffs to United States Dollars (USD) at an agreed rate of 18.60 Kwacha to the USD and would then pay the Plaintiffs a total of USD 1,526,327.63 (USD 677,626.79 to the 1st Plaintiff and USD 848,700.84 to the 2nd Plaint iff). 2 .17. The Plaintiffs contended that in breach of the agreement referred to above, the Defendant, by email dated 15th February, 2023 communicated to the Plaintiffs that the Defendant would not pay the Plaintiffs in USD as agreed but would instead pay in Kwacha. It was further averred that concerted efforts were made by the Plaintiffs to engage the Defendant for an amicable settlement and compromise and the Plaintiffs offered that the Defendant to pay the entire amount in Kwacha within 24 hours and settle the exchange fluctuations at a later stage but the Defendant did not act upon. 2.18. The Defendant is said to have made payments amounting to ZMW 28,511,800.14 in six (6) instalments over a period of one (1) week between 21st February and 25th February, 2023 contrary to the agreements. The Plaintiffs claimed that by reason of the Defendant's said fraudulent misrepresentations and breach of contract, the Plaintiffs have suffered great economic loss and damage. The economic loss and damage were particularised as follows: J8 1. The difference between the quantity of diesel ordered and agreed to be delivered (3,500,000 litres) to the Plaintiffs and the quantity actually delivered (1,163,000) leaves total undelivered diesel at 2,337,000 litres and the Plaintiffs will show that during the period that the Defendant failed to deliver the diesel, the Plaintiff's markup per litre was ZMW 4.70 and that the Plaintiffs had confirmed orders for the said diesel from their customers which they failed to fulfil on account of the Defendant's misrepresentation and breach thereby resulting in an economic loss of ZMW 10,983,900.00. 11. As a result of the Defendant's breach and fraudulent misrepresentation, the Plaintiff suffered reputational damage due to their failure to deliver commitments to their clients as a consequence. 111. Failure by the Defendant to return the Plaintiffs' money in one USD payment as agreed on 14th February, 2023, led to the Plaintiffs losing a total of USD 79,028.28 (USD 35,085.24 for the 1st Plaintiff and USD 43,942.89 for the 2nd Plaintiff) 2.19. In its amended defence, the Defendant denied the Plaintiffs' claim. It was averred that the Defendant's representative Mr. Liyakati Meghani entered into discussions and not negotiations with the Plaintiffs Managing Director solely for purposes of soliciting business. The Defendant denied making any representations to the Plaintiff whether by itself or through any of its representatives that could have a binding effect on any future agreement between the parties. 2.20. The Defendant contended that there was no formal written agreement entered into between the Plaintiffs and the Defendant but that it entered into an oral agreement with the Plaintiffs whereby the Plaintiffs would order and the Defendant would supply various quantities of diesel at rates to be decided between J9 the parties. The Defendant insisted that there was no formal agreement which expressly stipulated the amount of fuel required, the purchase price and the intended delivery date for the supply of the diesel from the Defendant to the Plaintiffs. 2.21. The Defendant admitted receiving the following Purchase Orders from the Plaintiffs which contained the following terms, prices, volumes, delivery dates and prices: Purchase j Dale of Supposed Vo!ume Price (ZMW) Date of Amount Order order delivery (litres) Payments (ZMW) nurnber date Advanced from Plaintiffs to the Defendant 1. 6/1/2023 9/1/2023 520,000 11,762,400.00 09.01.2023 11,762,400.00 2. 16/01/2023 20/01/2023 500,000 11,252,000.00 18.01.2023 9,500,000.00 3. 17/01/2023 17/01/2023 500,000 11,252,000.00 19.01.2023 10,052,000.00 4. 20/01/2023 25/01/2023 500,000 11,368,000.00 24.01.2023 2,952,000.00 5. 20/01/2023 25/01/2023 1,000,000 14,320,000.00 25.01.2023 21,368,000.00 2.22. The Defendant averred that the terms and conditions contained in the five (5) Purchase Orders were unilaterally decided by the Plaintiffs. According to the Defendant, the Plaintiffs prematurely advanced sums of money being payment for the supply of diesel by the Defendant into the Defendant's accounts by sending the Defendant numerous Purchase Orders in quick succession of which the terms and conditions were not mutually agreed upon. 2.23. The Defendant denied receiving a WhatsApp message from the Plaintiffs on 31st January, 2023 informing it of the ERB price revje'\vs. The Defendant denied the Plaintiffs' assertion that its representatives made fraudulent and deceitful representations to the Plaintiffs indicated in the amended statement of claim. The Defendant averred that it endeavoured to deliver the outstanding amounts of diesel but at no time did it give any reassurances that the remaining quantities of diesel would be delivered on before 31st January, 2023. no 2.24. The Defendant further indicated that it made it clear to the Plaintiffs that there were supervening events beyond their control that could impact the supply of diesel to them and that the Plaintiffs desire to unilaterally make orders in quick success without getting the consent of the Defendant was not practically feasible for the Defendant to achieve. 2.25. The Defendant claimed that it unilaterally rescinded the oral agreement by letter/ email to the Plaintiffs on account of the fact that at no material times did the Defendant agree to the terms and conditions of the Purchase Orders despite acknowledging them. The Defendant further averred that the Plaintiffs concealed the fact that the Defendant reimbursed the Plaintiffs the sum of ZMW 28,511,800.14 being the monies advanced to the Plaintiffs for the outstanding supply of 1,596 cubic metres of diesel which payments is relative to the refund of all funds transmitted to it by the Plaintiffs. The funds received and refunded by the Defendant to the Plaintiffs were shown as follows: Breakdown of Total Payment Received by the Defendant ·-· Date Amount received (ZMW) 09/01/2023 1,762,400.00 18/01/2023 2,500,000.00 18/01/2023 7,000,000.00 19/01/2023 5,800,000.00 19/01/2023 4,252,000.00 24/01/2023 2,952,000.00 25/01/2023 11,368,000.00 25/01/2023 10,000,000.00 Total 55,122,599.86 Amount of Total Fuel Supplied 27,122,599.86 Balance refunded 28,511,800.14 Breakdown of disbursements for balance to be refunded to Plaintiffs Date Bank Amount refunded (ZMW) 20/02/2023 Stanbic 4,900,000.00 Jll 21/02/2023 Stanbic 4,000,000.00 22/02/2023 ZANACO 2,000,000.00 22/02/2023 Stanbic 9,000,000.00 22/02/2023 ZANACO 3,758,068.48 22/02/2023 ZANACO 4,853,731.66 Total Balance refunded: 28,511,800.14 2.26. The Defendant denied the Plaintiffs' allegations that it made assurances and commitments that it would deliver the agreed quantities of diesel by 31st January, 2023 and indicated that by 3rd February, 2023 it completely stopped delivering the ordered diesel to the Plaintiffs after only delivering 1,203.93 cubic metres (1,203,932 litres) of diesel out of the total ordered 3,500 cubic metres (3,500,000 litres). According to the Defendant it was agreed that it would reimburse the Plaintiffs the sum of ZMW 28,511,800.14 but it was never agreed that the monies owed to the Plaintiffs would be reimbursed in United States Dollars currency. The Defendant contended that the consideration of the transactions between the Plaintiffs and the Defendant was at all material times to be in Zambian Kwacha contrary to the attempt by the Plaintiffs to seek to enforce the said transaction by introducing United Stated currency in order to unjustly enrich itself and enjoy the fluctuations of the Zambian Kwacha. The Defendant denied agreeing at any material time to settle any differences regarding any exchange rate fluctuations. 2.27. Furthermore, the Defendant denied the allegation that the Plaintiffs have suffered reputational damage or economic loss on account of the actions of the Defendant because at no material time did the Defendant enter into a formal contract with the Plaintiffs which could have enabled them to foresee any financial or reputational loss that could be suffered as results of breach of contract. According to the Defendant, the 1st Plaintiff is still a new company which was only incorporated on 24th June, 2021 and J12 has only been operating for 628 days (less than 2 years) from incorporation till the filing of the Defendant's amended defence. Further that the 2nd Defendant company is also a new company which was only incorporated on 13th August, 2020 and has only been operating for 943 days (less than 3 years) from incorporation to the date filing of the Defendant's amended defence. The Defendant averred that the Plaintiffs are still infant companies and are yet to develop a significant market reputation in: the Republic of Zambia. 3.0 EVIDENCE AND SUBMISSIONS BY THE PLAINTIFF 3 .1. The Plaintiffs called two witnesses during. PW 1 was Afzal Moosa Patel, the Director of Sales in the employ of the Plaintiffs. PWl relied on his witness statement for his evidence in chief which was produced and marked "Pl". I will not reproduce PW l's evidence in chief as it was a repetition of what is in the amended statement of claim with further reference to the Plaintiffs' bundle of documents, which I will refer to later. The only new major fact that PW 1 added was that in January 2023, the pump price per litre for diesel was ZMW 26.4412, which was adjusted to ZMW 29.2495 in February 2023 by ERB as evidence in support of Plaintiffs' claim for economic loss. 3.2. In XXN PWl confirmed that the Plaintiffs conducted business with the Defendant from 2021. PW 1 confirmed that the Plaintiffs had similar transactions with the Defendant before the 2023 transaction which included transportation if they wanted fuel from them or business and that the parties would communicate and do business. PWl indicated that the business with the Defendant was documented by email, WhatsApp and phone calls. He further testified that in the transaction with the Defendant, the Purchase Orders had conditions for the transaction. The conditions were: date, delivering day, ERB regulations and entries in Kwacha or Dollar. J13 3.3. PWl confirmed that the Purchase Orders for the transactions were all in Kwacha and that the agreements were in the Purchase Orders, emails, phone calls and WhatsApp: the four contained terms of the transaction. He stated that once a purchase Order was issued, parties could vary the terms via WhatsApp, Email or phone conversation. PW 1 confirmed knowing Mr. Meghani for 6 to 7 years and said that he was a Deport Manager at the Defendant company. 3.4. In further XXN, PWl testified that on 6th and 7th January, 2023, Mr. Meghani called and told him that they had fuel, diesel, which he offered at the price of ZMW 19.50 per litre and that they should transact immediately and deliver the product. PWl was referred to Pages 1 to 4 of the Plaintiffs' bundle of documents and after reading the WhatsApp message on page 33 of the Plaintiffs' bundle of documents indicating the price "19.85 + vat" and "19.50 + vat", he stated that he did not agree to the terms requested by the Defendant appearing on page 33. He however, confirmed that he issued a Purchase Order after the agreement and further that after the message above, he called Mr. Meghani. PWl went on to say that the proof of what they agreed on was in the phone call. He admitted that if he had phone records it would have shown that there was a call but he didn't have it. 3.5. PWl confirmed reading the Defendant's defence and said that it was not correct that the Plaintiffs issued the Purchase Order and payment before confirmation from Defendant. PW 1 confirmed knowing Mr. Dharmesh, the Director of the Defendant but he did not know that he had final say on the transaction. When referred to the message exchange with Mr. Liyakati Meghani on page 82 of Plaintiff's bundle of documents, PWl agreed that he was being referred to Mr. Dharmesh. 3.6. PWl told the Court that he had experience in the petroleum industry for 6 to 7 years and stated that the practice of purchase orders was that if one had a Purchase Order, one had to deliver the product to the client regardless of price variation. He denied J14 knowing and dealing with the parent company for the Defendant in Dubai and that he did not know that there were discussions with parent company over price variation which made the Defendant fail to deliver the product. 3. 7. When referred to page 2 of the Plaintiffs' bundle of documents, PW 1 indicated that the payment terms differed from what was agreed and added that there was no uniformity in all the orders. PWl could not recall any discussion of purchasing consignment from Beira and stated further that before proposal for refund by Defendant there were no proposals made. PW 1 told the Court that the Plaintiffs were making the claim in Dollars because they agreed to be refunded in Dollars by email. He referred to page 21 of the Plaintiffs' bundle of document which showed the agreed reconciliation in Dollars. 3.8. When referred to page 23 of the Plaintiffs' bundle of documents which contained an email response from Mr. Dharmesh, PWl confirmed that Mr. Dharmesh wrote an email refusing to pay in Dollars. PW l admitted that the Plaintiffs do not accept interest according to their practice. He stated that the Plaintiffs were losing the Dollar due to exchange rate. He agreed that product worth about ZMW 28 million was not delivered and the money was refunded. He confirmed that the parties dealt with Kwacha only. According to PW 1, the exchange rate arose because when the Plaintiffs went to the Defendant on 14th February, 2023, the Defendant agreed that there was exchange rate and the offered or proposal was made by the Defendant but later the Defendant came back and said that they were not going to pay in Dollars. According to PWl indicated that the exchange loss was USD 79,028.29 which was unilaterally calculated by the Plaintiffs. 3.9. PWl further testified that the claim for the USD 79,028.29 was as a result of price change by ERB. PWl claimed that the Defendant sold Plaintiffs' product at higher price after using their money because, according to him, the same product which the Defendant JlS was to deliver to the Plaintiffs was used for its filling station at a time when there was an increment coming. PWl stated that him and his brother were shareholders of the Plaintiff companies which were founded in 2021 but he did not know their market share. 3.10. When referred to page 29 of the Plaintiffs bundle of documents and asked about the four email attachments indicated there he admitted that they were not there. PWl was further referred to page 9 of Plaintiff's bundle of documents which contained an email with two purchase orders attached namely, PO-00037 and PO00038 and also to the email attachments on page 11, he admitted that attachments for most of the emails were not part of his bundles. He indicated that the computation of loss was computed on the litres and stated that there was a mark up of ZMW 4.70 based on the February price for the January transaction. PWl was referred to his witness statement and said that the pump price increase indicated in paragraph 4 of his witness statement was for Diesel. He admitted that he did not have any document for the pump price adjustment. According to PWl, the Defendant did not offer USD 15,000.00 or anything at all. He further stated that no one from the Defendant stated that the Plaintiffs were going to be paid the USD 79,020.00. 3 .11. When referred to pages 61 to 65 and 70 of the Plaintiffs bundle of documents, PW 1 indicated that the images were not readable because of the camera. PW 1 could not confirm the exact date of receipt of refund. PW 1 recalled making a statement that Defendant behaved fraudulently. He insisted that the refund was agreed to be in Dollars. However, he admitted that there was nothing to show that any third party was waiting for the fuel. He confirmed that they consumed some of this fuel. 3.12. PW2 was Edward Kananji, the Finance and Operations Officer in the employ of the Plaintiffs. He relied on his witness statement for his evidence in chief, which was produced and marked as "P2". PW2 indicated that during the period in which the Plaintiffs J16 transacted with the Defendant, his responsibilities included the processmg of payments, reconciliation of accounts, and preparations of purchase orders. 3.13. PW2's testified that between the dates of 15th and 21st January 2023, he was tasked by Mr. Afzal Moosa Patel, the Director of Sales, to prepare the purchase orders for procurement of diesel from the Defendant and that to the best of his recollection, a total of 5 Purchase Orders were issued by the Plaintiffs to the Defendant during the aforementioned period. He specified that 3 Purchase Orders were issued by the 1st Plaintiff while the remaining 2 were issued by the 2nd Plaintiff. The other details of PW2's evidence in chief was mainly a repetition of the amended defence. 3.14. Under XXN PW2 indicated that he was not involved m the negotiations relating to the transaction and that he was not aware of the price discussions. PW2 stated that he was aware of part of the discussion between PW 1 and Mr. Meghani and referred to paragraph 7 of his witness statement to confirm that he was tasked to prepare the 2nd and 3rd Purchase Orders. 3.15. PW2 was referred to paragraph 9 of his witness statement stating the payments for the 2nd and 3rd Purchase Orders and the 336,068 litres that was never delivered by the Defendant. According to PW2, the total uncollected fuel was 1.3 million litres. When PW2 was referred to paragraph 44 of PW l's witness statement and paragraph 9 of his witness statement, he admitted that there was a discrepancy between the figure he gave and the one given by PW 1. PW2 further indicated that his involvement with the Defendant started after the issue of computation of exchange rate. He was referred to page 1 7 of Plaintiff's bundle of documents which contains an email to the Defendant and stated that he was doing a reconciliation. He admitted that he did not produce the attachment to his emails before Court. He agreed that there was back and forth communication on the issue of refund between the parties and that the parties failed to agree. J17 3.16. On the issue of payment of interest, PW2 indicated that he was not aware of the Plaintiffs refusing interest because they are Muslims. However, when he was referred to page 24 of Plaintiffs' bundle of document where there is an email from PW 1 to the Defendant stating that the Plaintiffs do not get interest. He conceded that Plaintiffs do not accept interest. PW2 testified that on this case, the Defendant did not receive any money apart from that in Kwacha and confirmed that the Defendant partially performed the contract and made a refund to the Plaintiffs in the sum of ZMW 28 million. He stated that the parties agreed on a mutual refund. According to PW2, whenever the Plaintiffs were giving prices to a customer, they took into consideration the exchange rate of the day and that the Plaintiffs had exchange losses in the Kwacha transaction. He went on to state that the exchange rate came about because of the agreement of parties as indicated on page 21 of Plaintiff's bundle of documents. 3 .17. Further under XXN, PW2 was referred to page 23 of the Plaintiffs' bundle of documents which had an email sent by him requesting that the USD 677,626.79 (ZMW 12,658,068.48) and USD 848,700.84 (ZMW 15,853,731.66) be paid to two separate accounts. However, he denied coming up with those figures while admitting that he sent the email in issue. PW2 further indicated that the parties to discussion leading to the email at page 21 containing the agreed reconciliation were himself, PWl, Mr. Rajesh Shah from the Defendant and Mr. Meghani. He stated that the Plaintiffs were claiming loss of business but admitted that there was nothing before Court showing that there were third parties waiting for this payment and that there was no one to attest that there was reputational damage. PW2 narrated that the Plaintiffs wanted to be paid ZMW 10 million as market up price increase and aJso USD 100,000.00 based on the exchange rate. He further stated that the Plaintiffs also wanted to be paid interest. He gave a mark up of 2.8. J18 4.0 EVIDENCE AND SUBMISSIONS BY THE DEFENDANT 4.1. The Defendant called one witness. DWl was Dharmesh Patel, the Managing Director for the Defendant Company. He relied on his witness statement for his evidence in chief, which was produced and marked "D1". DWl's evidence in chief was basically a repetition of the amended defence with further reference to the Defendant's bundle of documents. I will not reproduce it here but will refer to it later on where necessary. 4.2. Under XXN, DWl confirmed going by paragraph 4 of his witness statement that he knew Liyakati Meghani and said that at the material time, he was their Sales person. DWl further confirmed that he had sight of the conversation Mr. Meghani had with the Plaintiffs as shown in Plaintiff's bundle of documents. When referred to paragraph 9 of his witness statement where he outlined the five Purchase Orders, DWl confirmed that the Defendant received the Purchase Orders. 4.3. DWl was referred to page 33 of Plaintiff's bundle of documents where there is WhatsApp message exchange between Mr. Meghani and PW 1. He confirmed that at the end of the conversation the same Purchase Order (PO-00036) was sent. PWl explained that the 19.85 and 19.50 referred to prices of diesel as appearing on page 34 of Plaintiff's bundle of documents and that the one who sent the message thereon is Mr. Liyakati Meghani. When referred to page 35 and asked to read the first four paragraphs, DW 1 confirmed that communication was through those chats and phone calls. Later, DWl was referred to page 47 of the Plaintiff's bundle of documents and he confirmed that Mr. Meghani promised to send 10 trucks or more if needed. Furthermore, when referred to page 49, DW 1 confirmed that he could see that a Purchase Order (PO-00037) was sent. 4.4. DWl was referred to the WhatsApp messages between PWl and Mr. Meghani on pages 50 (concerning Purchase Orders PO-00037 and PO-00036) and 56 (concerning Purchase Order PO-0037 /0038 J19 (sic)) and confirmed what was written on those pages. When referred to page 65 of the Plaintiff's bundle of documents, DWl indicated that in the conversation between Mr. Meghani and the Plaintiffs, orders were discussed and some Purchase Orders were confirmed by Mr. Meghani. He further admitted that the purchase price was also discussed. He admitted that from the chats he did not see anywhere where Mr. Meghani complained that the purchase orders were sent without confirmation by the Defendant. He confirmed seeing where in the chats Mr. Meghani said he discussed with his boss and stated that the boss was either Head of Department or CEO. 4.5. In further X,,'(N DWl narrated that he could not remember receiving word from Meghani that he received a Purchase Order which the Defendant did not confirm and admitted that he had nothing to show the Court that any purchase order was sent without confirmation. DWl confirmed the parties engaged in various · business transactions of this nature involving oil and diesel supply and purchase and that in these transactions they had contracts. He, however, stated that in this transaction there was no contract. DWl agreed that the understanding was through chats and phone calls and that he had a chat with Meghani regarding this matter. He revealed that he did not ask Mr. Meghani to be a witness in this matter while admitting that he did not have access to the phone for Meghani to look at the conversations. DW 1 confirmed knowing PW 1. 4.6. DWl was referred to paragraph 4, 5, 7, 9, 10, 13, 18, 19, 22, 30, 31, 33, 34, 36, 38, 40 and 41 of PWl's witness statement and after looking at the paragraphs in issue he conceded that he had no basis for disputing what is stated in those paragraphs and confirmed that he did not engage in sale conversation relating to this transaction. 4.7. DWl confirmed attending the meeting held on 14th February, 2023 where the Defendant informed the Plaintiffs that it did not have J20 fuel in stock to supply the Plaintiffs. He narrated that the meeting was to reconcile the money received and fuel supplied and that at the meeting, it was found that the Defendant was owing the Plaintiffs some money. He confirmed that the Plaintiffs raised the issue that they were going to incur loss due to Dollar exchange rate. According to DWl, the issue of the loss indicated by the Plaintiffs on repayment due to exchange rate was not agreed on at the meeting while admitting that it was agreed that there were going to be loss due to exchange rate. He stated that payment was received in Kwacha not in Dollars and that they maintained Kwacha. DWl confirmed that the transactions with the Plaintiffs happened in January 2023 and that he could not recall whether the pump price was increased in the following month of February 2023. It was DWl's further testimony in XXN that the diesel was being brought on wholesale and that he did not know if the Plaintiffs supplied diesel on retail because they did not have filling stations. 4.8. When referred to paragraph 43 of PWl 's witness statement concerning the upward adjusted of the pump price of diesel, DWl could not confirm what is mentioned there. He, however, agreed that when their customers bought fuel on wholesale and sale on retail, they made a profit if they had a filing station but he did not know whether the purpose by the Plaintiffs was to supply to retail sellers. When referred to his witness statement at page 14 and 19, DW 1 indicated that it took about 3 weeks to refund money to the Plaintiffs and that no interest was added on the refund. DWl could not recall the exact date when the Defendant realised that it could not supply fuel to Plaintiff and added that when they became aware it took them two days to pay back the money. When referred to paragraph 44 of PW l's witness statement where PW 1 indicated that the diesel was for sale at retail, DW 1 said that he did not dispute what PWl said in the paragraph. However, he disputed the claim that the Plaintiffs were making a mark..,up of ZMW 4.70 J21 because they did not have a filing station. DW 1 confirmed that he was not privy to the quantities of what was not delivered but that he knew the amount of ZMW 28,511,800.14. 4.9. After being referred to pages 1 to 5 of Plaintiff's bundle of documents, DWl stated that he could not confirm that those were the Purchase orders that were received by the Defendant. When referred to paragraph 9 of his witness statement, he confirmed receiving Purchase Orders on pages 1, 2, 3 and 5 contained in the Plaintiffs' bundle of documents but disputed Purchase Order on page 4. Under RXN, DWl clarified that Mr. Meghani was part of sales team who reported to the head of sales team. 4.10. The Defendant was directed to file submissions by 15th November, 2024 and serve on the Plaintiffs by 18th November, 2024. However, the Defendant filed only its submissions on 25th November, 2024 after due date without leave of the Court. The Defendant basically referred to the reliefs sought by the Plaintiffs and narrated the background to this case after which Counsel outlined the Plaintiffs' core claims and analysed the evidence of the respective witnesses for the Plaintiffs. Counsel contended that the claims made by the Plaintiffs lacked merit and should be dismissed. It was further submitted that the Plaintiffs did not provide sufficient evidence to support their claims for fraudulent misrepresentation, breach of contract, economic loss and reputational damage. The Defendant prayed for costs. 5.0 ANALYSIS AND DECISION 5.1. I have duly considered the evidence on record and the submissions filed on behalf of the Defendant. The Plaintiffs claim the following reliefs: z. Damages for fraudulent misrepresentation. iz. An Order that the Defendant pays the sum of ZMW 10,983,900.00 being compensation for loss of J22 pro.fit/ commercial opportunity as a result of the Defendant's failure to deliver the contractual quantities of diesel. m. Damages for breach of contract. w. Damages for reputational damage. u. Interests on all sums found payable to the Plaintiffs. uz. Costs. un. Further and any other relief that the Court may deemfiL 5.2. According to the evidence in this matter, it is not in dispute that in January, 2023, the parties were engaged in several transactions for supply of fuel to the Plaintiffs by the Defendant. The 1st Plaintiff issued three purchase orders while the 2nd Plaintiff issued two purchaser orders to the Defendant for fuel purchases. Between 9th and 25th January, 2023, the Plaintiffs made several payments to the Defendants in the total sum of · ZMW 55,122,599.86 for 3,520,000 litres of diesel but the Defendant did not deliver in full the fuel paid for by the Plaintiffs. After reconciliation it was shown that the total value for the fuel supplied was ZMW 27,122,599.86 while the value for the shortfall was ZMW 28,511,800.14 which the Defendant refunded to the Plaintiffs between 20th and 23rd February, 2023. However, the parties failed to agree on the Plaintiffs' desire to covert the refund to United States Dollars at a proposed rate in order to save as compensation for the undelivered fuel. 5.3. According to the Plaintiffs, the parties entered into an agreement by which the Plaintiffs would order and the Defendant would supply quantities of fuel at prices agreed upon by the parties which were to be specified in each purchase order issued by the Plaintiffs. However, the Defendant disputed entering into negotiations or any written formal agreement with the Plaintiffs to expressly stipulate the amount of fuel required, the purchase price and the intended delivery date. The Defendant further disputed giving any fraudulent representation to the Plaintiffs leading to reputational damage and economic loss on the part of J23 Plaintiffs. In determining this matter, I propose to address the issues as follows: (i) Whether there was a contract between the parties; (ii) Whether there was breach of contract by the Defendant; and (iii)Whether there was fraudulent misrepresentation on the part of the Defendant. The determination of these questions will help in establishing whether the Plaintiffs are entitled to all or some of the reliefs sought. 5.4. According to the learned authors of Contract Law in Zambia 2nd Edition1 at page 11, a contract can either be express or implied and they explained the two types of contracts as follows: "1. 5.1.1 Express contract An express contract is a contract whereby the parties specifically agree on the nature and terms that will govern their relationship. 1.5.1.2 Implied Contract An implied contract is a contract where there is no specific agreement between the parties. The agreement is not as a result of any express promise by the parties, but is merely interpreted or inferred from the acts or conduct of the parties and all the surrounding circumstances." 5. 5. In the case of Zambia Breweries Plc v Betternow Family Limited the Supreme Court considered the question of implied 1, contract where the Appellant did not sign its part of the distributorship agreement. The Supreme Court at page 1724 held that: "For our part, we fully endorse the trialjudge's view. On a proper conspectus of the evidence on record, we form the inescapable view that there was indeed a J24 distributorship agreement between the parties which arose from their conduct." 5.6. The burden of proving that there was indeed a contract between the Plaintiffs and the Defendant rests on the Plaintiffs as was guided in the case of Wilson Masauso Zulu v Avondale Housing Project Limited2. A perusal of the Plaintiffs' bundle of documents shows the various WhatsApp messages exchanged between Mr. Liyakati Meghani and PWl on 6th January 2023 relating to the 1st Purchase Order. On page 33, two prices were mentioned "19.85 + VAT diesel" and "19.50 + VAT diesel". On the same page there is a Purchase Order from 1st Plaintiff numbered PO-000036 after the mention of "19. 50 + VAT diesel". On page 34 there is a message from Liyakati Meghani which reads: "Chat with boss Even he want bit up I convinced 19.50" And on page 35, there is a message saying Purchase Order (PO00036) sent by PW 1 and a follow up message saying, "Make it stamp". Mr. Meghani responded as follows: "Ok will do tomorrow morning". PW 1 then said "Payment is ready". 5.7. From these conversations it is evident that Mr. Liyakati Meghani was speaking on behalf of the Defendant with aparent authority to represent the Defendant in the transaction. In my considered view, the discussions highlighted above were not mere discussions but negotiations which subsequently led to the parties entering into some contractual relationship actualized by the issuing of the 1st Purchase Order by the Plaintiffs. The Plaintiffs then made their first payment to the Defendant which was not disputed by the Defendant. It can be inferred from the conduct of the parties that the Defendant through Mr. Meghani offered to supply fuel to the Plaintiffs and the Plaintiffs accepted the offe r hence the issuance of the Purchase Order and the payments made towards the same. J25 5.8. The Defendant contend that there was no formal written agreement that expressly stipulated the amount of fuel required, the purchase price and the intended delivery date for the supply of the fuel. However, in his evidence in chief at paragraph 8, DWl stated that, " ... On the contrary, the parties entered into an oral agreement where the Plaintiffs would order and the Defendant would supply of various quantities of diesel at rates to be decided between the parties. ... ". DW 1 then acknowledged that five Purchase Orders were received from the Plaintiffs as outlined in paragraph 9 of the amended defence. 5.9. In the case of Rapid Global Freight Limited V Zambia Railways3, the parties entered into an agreement in which the appellant was to transport thirty (30) rail wagons from Chipata to the respondent's main workshop in Kabwe within a 15-day period. The agreement of the parties was embodied in various documents that included order issues, purchase orders and an award letter. The Court of Appeal considered the terms and conditions in the purchase orders to determine which of the parties breached the contract. In casu, it is clear that there were Purchase Orders with terms and conditions issued by the Plaintiffs to the Defendant. 5.10. Further, in paragraph 27 of the amended defence, the Defendant averred as follows: "The Defendant will aver the (sic) it endeavored to, at all material times, supply the Plaintiff with diesel pursuant to the Sale of Goods Act, 1893". The above assertion is repeated in paragraph 29 of DWl 's witness statement. Section 3 of the Sale of Goods Act, 18931 provides that a contract of sale may be made in writing (either with or without seal) or orally or partly in writing and partly by word of mouth or may be implied from the conduct of the parties. 5.11 Additionally, a Purchase Order is generally accepted as a contract in some transactions. One example to that effect can be picked J26 from Regulation 182 of the Public Procurement Regulations, 20222 made pursuant to The Public Procurement Act, 2020 providing as follows: "182. ( 1) A Procurement Unit shall, where a procurement is conducted using simplified bidding or simplified selection after the contract award decision by an approvals authority and the commitment of funds, prepare a written purchase order and send it to the successful bidder. (2) A purchase order prepared under subregulation (1) shall include the following: (a) start and end date; (b) date of the purchase order; (c) purchase order number; (d) quotation reference number; (e) description of the goods, works or services; and lf} any other terms and conditions as agreed by the parties. (3) Despite subregulation (2), a purchase order shall not contain any terms, conditions or requirements which differ from the bidder's quotation, unless those terms, conditions or requirements have been agreed, in writing, with the bidder. (4) A purchase order shall constitute a contract between the procuring entity and the bidder." 5.12 Although the regulation relates to government procurement, the point being driven is that a Purchase Order is generally treated to constitute a contract. This was demonstrated in the case of Rapid Global Freight (Supra). According to the amended statement of claim and pages 1 to 5 of the Plaintiffs bundle of documents, the following Purchase Orders were sent to the Defendant: Purchase Order Date Date of Quantity Total Amount No. Delivery (ZMW) PO-00036 6 Jan 9 Jan 2023 520,000 11,762,400.00 2023 litres J27 PO-00037 16 Jan 20 Jan 2023 500,000 11,252,000.00 2023 litres PO-00036 17 Jan 17 Jan 2023 500,000 11,252,000.00 2023 litres PO-00037 20 Jan 25 Jan 2023 1,000,000 22,736,000.00 2023 litres PO-00038 20 Jan 25 Jan 2023 1,000,000 22,736,000.00 5.13 Under XXN, DWl disputed the 4th Purchase Order produced by the Plaintiffs. A perusal of the Defendant's bundle of documents on pages 13 to 16 shows that the 4th Purchase Order above is not included. The Defendant only produced the following Purchase Orders from the Plaintiffs: Purchase Order Date Date of Quantity Total Amount No. Delivery (ZMW) PO-00036 6 Jan 9 Jan 2023 520,000 11,762,400.00 2023 litres PO-00037 16 Jan 20 Jan 2023 500,000 11,252,000.00 2023 litres PO-00036 17 Jan 17 Jan 203 500,000 11,252,000.00 2023 litres - PO-00038 20 Jan 25 Jan 2023 500,000 111,368,000.00 202:3 litres I --- 5.14 However, on paragraph 7 of the amended defence and paragraph 9 of DWl's witness statement, the Defendant admitted receiving the five Purchase Orders through a table showing the purchase order number, date of order, supposed delivery date, volume, price, date of payments and amount advanced from the Plaintiffs to the Defendant. I will not reproduce the table as it has already been shown above but I have noted the contradiction in the Defendant's evidence on that aspect. I further note that although the Defendant acknowledged receiving the 4th and 5th Purchase Orders in its amended defence and DW 1 's evidence in chief, the quantity and total cost indicated in terms of the 4th Purchase Order are not the same as those of the Plaintiffs. Both parties J28 indicated the same quantity under the 5th Purchase Order but the total cost is different. 5.15 The Plaintiffs in their bundle of documents have produced the following proofs of payment: Payment Amount (ZMW) Date Ayoun Energy Limited to 11,762,400.00 09/01/2023 Mount Meru Ayoun Telecom Solutions 2,500,000.00 11/02/2023 to Mount Meru Ayoun Energy Limited to 7,000,000.00 18/01/2023 Mount Meru Ayoun Telecom Solutions 5,800,000.00 19/01/2023 to Mount Mcru Ayoun Energy Limited to 4,252,000.00 19/01/2023 Mount Meru Ayoun Solutions to Mount 2,952,000.00 24/02/2023 (sic) Meru Ayoun Telecom Solution 11,368,000.00 23/01/2023 to Mount Meru Ayoun Telecom Solution 10,000,000.00 23/01/2023 to Mout Meru -- These payments are acknowledged by the Defendant under the Purchase Orders received from the Plaintiffs and the breakdown of total payment received by the Defendant according to the amended defence and DW 1 's evidence in chief. 5.16 I have taken the liberty to consider the terms and conditions stated by the Plaintiffs for each Purchase Order in the amended statement of claim highlighted above and the manner in which the Plaintiffs made payments towards each of the five Purchase Orders. According to the Plaintiffs, the advance payments for the 4th and 5th Purchase Orders of ZMW 13,320,000.00 and ZMW 14,252,000.00 were to be paid by 24th January, 2023. I find that the total amount ofZMW 14,252,000.00 and ZMW 14,320,000.00 the Plaintiffs claimed to have paid are within the total amount of the following payments on pages 88, 89, 6 and 7 of the Plaintiffs J29 bundle of documents: ZMW 4,252,000.00, ZMW 2,952,000.00,. ZMW 11,368,000.00 and ZMW 10,000,000.00. Therefore, I am satisfied that the Plaintiffs made payments against each of the five Purchase Orders as stated in the amended statement of claim though fully paid a day after the date in the Purchase Order. These payments do not contradict the payments that have been acknowledged by the Defendant. Furthermore, under XXN, DWl testified that he had nothing to show the Court that any Purchase Order was sent without confirmation. This refutes the Defendant's contention that the terms and conditions contained in the five (5) Purchase Orders were unilaterally decided by the Plaintiffs. What I find to have transpired in this matter is that the Plaintiffs initiated the Purchase Orders that contained terms and conditions and sent them to the Defendant and after receipt of the same, the Defendant never rejected them as there is no evidence to that effect. The Defendant is, therefore, deemed to have accepted those terms and conditions as it proceeded to supply part of the fuel following receipt of the Purchase Orders and payments from the Plaintiffs. 5.17 In light of the foregoing, the Defendant's assertion that there was no contract between the parties cannot stand. Therefore, my answer to the 1st question is that there was a contract between the parties as affirmed by the shared correspondence, Purchase Orders and the general conduct of the parties. The amount of diesel required, the purchase price and the intended delivery date were stated in the respective Purchase Orders. 5.18 I now turn to the issue whether there was a breach of contract on the part of the Defendant. The terms and conditions of the 1st Purchase Order was that payment was to be made in full and the Defendant would deliver the entire consignment of diesel on or before 9th January, 2023. The Plaintiffs adduced evidence on page 85 of their bundle of documents that full payment of ZMW 11,762,400.00 was made for the entire consignment of 520 cubic J30 metres (520,000 litres) of fuel. However, the Defendant by 9th January, 2023 only delivered 74 cubic metres (74,000 litres) of diesel, with 426 cubic metres (426,000 litres) remaining unsupplied. The question is whether the Defendant performed the contract in line with the 1st Purchase Order. 5.19 The issue of breach of contract was considered by the Court of Appeal in the Rapid Global Freight Limited case3 (supra). The Court of Appeal at paragraph 10.30 held as follows: "It is trite that a breach of contract occurs when a contracting party (the defaulting party) fails to perform, without lawful excuse a contractual obligation or term of contract, whether by late performance or defective performance etc. It is essentially the breaking of the obligation which a contract imposes and confers a right of action in damages to the injured party entitling him to treat the contract as discharged." 5.20 Further, Black's Law Dictionary2 defines breach of contract as follows: "A breach may be one by non-performance, or by repudiation, or by both. Every breach gives rise to a claim for damages, and may give rise to other remedies .... " 5.21 The Defendant prior to further engagements with the Plaintiffs was in breach of the initial contract when it did not deliver the fuel according to the terms of the first Purchase Order. However, according to the Plaintiffs, when they demanded that the Defendant delivers the unsupplied quantity to the Plaintiffs within the days that followed, the Defendant convinced the Plaintiffs to order more diesel. The Plaintiffs stated that the Defendant assured them that it had a number of diesel tankers awaiting clearance at the border and that the Defendant would deliver the unsupplied quantity as well as satisfy any new orders that the Plaintiff would make within the agreed timeframe. J31 Consequently, the Plaintiffs went on to make another order and issued the 2nd Purchase Order on 16th January, 2023. The Plaintiffs continued to make orders until the 5th Purchase Order despite the Defendant not delivering the quantities as agreed and on time. Therefore, according to the conduct of the parties, it can be inferred that the parties continued varying the terms of the contract as regards the dates for delivery of the product for each Purchase Order. 5.22 In making this conclusion, I find useful persuasion in the case of Power Equipment Limited v Goldtronics Limited and Barclays Plc4, where it was stated that a contract can be varied by conduct of the parties. In that case the 2nd Defendant wanted to buy a 950 KVA 3 Phase generator but accepted a 930-60 KVA generator. Matibini J, as he then was, held that: "In any event, according to the learned authors of Chitty on Contract, Volume 1, General Principles (Thomas Reuters (Legal) Limited, 2008) paragraph 22032, at page 1465: "The parties to a contract may effect a variation of the contract by modifying or altering its terms by mutual agreement." In this case by their conduct the parties modified or altered the terms of the agreement. Furthermore, the learned authors of Chitty on Contracts Volume 1, General Principles (supra), state in paragraph 22-040, at page 1469 that: "Where one party voluntarily accedes to a request by the other he should forbear to insist on the mode of performance fixed by the contract, the court may hold that he has waived his right to require that the contract be performed in this respect according to its original tenor. ... " 5.23 The Plaintiffs are therefore deemed to have waived their right to insist on the delivery dates stated in the Purchase Orders because after discussions the. parties entered into new. and further transactions and they kept changing the delivery dates. However, after the 5th Purchase Order, the Defendant on 10th February, 2023 unilaterally rescinded the agreement to supply diesel by cancelling the Purchase Orders indicating that the Defendant had no diesel in stock to supply to the Plaintiffs in accordance with the terms and conditions of the Purchase Orders. The Defendant offered to refund the Plaintiffs the amount they paid for the purchase of the fuel less the value of the fuel it had already supplied. Consequently, the Plaintiffs were refunded a total amount of ZMW 28,511,800.14 for the unsupplied fuel. 5.24 Although the parties kept on negotiating and varying the terms of the contract under each Purchase Order, at no point did they agree to terminate their contractual relationship. In my considered view, the Defendant's sudden and unilateral change of position by refusing to supply the outstanding fuel amounted to breach of contract. The. 2nd question is equally answered in the affirmative. 5.25 On the issue of fraudulent misrepresentation, the Plaintiffs adduced the following evidence to be what constituted fraudulent misrepresentation on the part of the Defendant: z. At 11 :40 AM on the 16th of January 2023, the Defendant represented to the Plaintiffs, through a WhatsApp message sent by Liyakati Meghani that it had 10 trucks ready to deliver diesel to a place designated by the Plaintiffs at the same time. iz. The Defendant, on the 16th day of January 2023 by way of a WhatsApp message sent by Liyalcati Meghani at 6:11 PM, did represent to the Plaintiffs that it has 2 5 trucks of diesel which were ready to be delivered to the Defendant at once. 5.26 The claim of by the Plaintiffs is not mere misrepresentation but fraudulent misrepresentation. The learned author of Contract Law in Zambia1 at page 204 define fraudulent misrepresentation as follows: J33 "In Febian Musialela v Evans Chipman, fraudulent misrepresentation was defined as false statement that is known to be false, or is made necessarily without knowing or caring whether it is true or false, and that is intended to induce a party to detrimentally rely on it. Where this is alleged, the courts have held that the party alleging fraud bears the onus of proving it and stating the particulars when making their claim. Fraudulent misrepresentation was defined in the seminal case of Derry v Peek as a statement 'made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless as to whether it to be true or false'. Thus, if one makes a statement which they honestly believe to be true, then it cannot be fraudulent." 5.27 Therefore, in order to prove fraudulent misrepresentation two elements must exist in the statement made, that is, the maker of the statement must know it to be false and should have been made recklessness or carelessly. In the case of Febian Musialela v Evans Chipman5, the standard of proof in cases alleging fraud was explained as follows: "As counsel for the Defendant has argued, the standard of proof in cases alleging fraud is higher than that of the usual balance of probabilities prescribed in civil matter. This is as per the case cited by counsel for the Defendant of Sithole -VS- The State Lotteries Board (4) which states at page 106 as follows; "If a party alleges fraud the extent of the onus on the party alleging is greater than a simple balance of probabilities." J34 It is however not proof beyond reasonable doubt as prescribed in criminal matters, as counsel for the Defendant has argued." 5.28 The only evidence adduced by the Plaintiffs concernmg the fraudulent misrepresentation in this matter are two WhatsApp messages. The first one is on page 4 7 of the Plaintiffs bundle of documents which reads "I will send 10 truclcs one time offload at ashrami" and the other one is on page 49 reading: "Trucks are ready Even 25 you can geS(sic)". However, no evidence was led by the Plaintiffs to show that the said trucks were not in existence. It is not in dispute that part of the fuel was delivered after the date of those messages (16th January). The number of trucks that delivered the received quantities was not disclosed or shown to be less than 10 or 25. The burden of proof to expose the falsehood and carelessness in making the said statements rests on the Plaintiffs. That burden is higher than that of balance of probabilities. I find that the elements of the alleged representation being false and reckless have not been proved to the standard set out in the cases cited above. Therefore, the Plaintiffs' claim for fraudulent misrepresentations fails. 5.29 As earlier stated, the reliefs sought by the Plaintiffs are the following: Damages for fraudulent misrepresentation 1. zz. An Order that the Defendant pays the sum of ZMW 10,983,900.00 being compensation for loss of profit/ commercial opportunity as a result of the Defendant's failure to deliver the contractual quantities of diesel. iii. Damages for breach of contract. iv. Damages for reputational damage. v. Interests on all sums found payable to the Plaintiffs. vi. Costs. vii. Further and any other relief that the Court may deem fit J35 5.30 The pt relief is anchored on fraudulent misrepresentation which the Plaintiffs failed to prove. Consequently, the relief has equally failed. 5.31 As regards, the 2nd relief for an order that the Defendant pays the sum of ZMW 10,983,900.00 being compensation for loss of profit/ commercial opportunity as a result of the Defendant's failure to deliver the contractual quantities of diesel, no evidence was adduced to support the particulars relating to that claim. According to the Plaintiffs, the quantity of diesel ordered and agreed to be delivered was 3,500,000 litres to the Plaintiffs while the quantity delivered was 1,163,000 litres leaving the total undelivered diesel at 2,337,000 litres. The Plaintiffs further stated that during the period the Defendant failed to deliver the diesel, the Plaintiffs' mark-up per litre was ZMW 4.70 and they had confirmed orders for the diesel from their customers which they failed to fulfil on account of the Defendant's misrepresentation and breach, thereby resulting in an economic loss of ZMW 10,983,900.00. 5.32 The Plaintiffs who had received part of the deliveries did not adduce evidence of the economic gains from the delivered fuel in order to show that they were able to make the corresponding economic gains from the undelivered fuel. Furthermore, there was no evidence adduced to support the ZMW 4.70 markup per litre neither was the evidence of the alleged confirmed orders produced. Authentic e.vidence of the revised pump price for the period in issue was not adduced. PW 1 in XXN confirmed that part of the fuel is consumed by the Plaintiff and that the Plaintiffs owned some trucks. The Plaintiffs did not advance any evidence of how much of the fuel they consumed and how much of it was meant for resale. In Mhango v Ngulube ·and others6 the , Supreme Court held that: "Any party claiming a special loss must prove that loss and do so with evidence which makes it possible for the J36 court to determine the value of that loss with a fair amount of certainty." The result of this is that the Plaintiffs' claim of ZMW 10,983,900.00 being compensation for loss of profit/ commercial opportunity also fails. 5.33 The third claim is for damages for breach of contract. In casu, the Plaintiffs have succeeded in proving breach of contract and are there entitled to damages. The Supreme Court in the case of Zambia National Building Society v Ernest Mukwamataba Nayunda7 gave the following guidance on the purpose of damages: "The essence of damages has always been that the injured party should be put as far as monetary compensation can go in about the same position he would have been, had he not been injured. He should not be in a prejudiced position nor unjustly enriched." According to the evidence before Court, the Plain tiffs were refunded in full the ;::i.mount for the undelivered fuel. What the Plaintiffs are seeking is compensation beyond the refund of the money. PW 1 confirmed to this Court that the Defendants do not accept interest. As a way of circumventing that, they demanded that the refund be made in dollars at rate of US$18.60 to a dollar. The Defendants after exploring the issue rejected the proposal. The Defendants contention is that the transactions by the parties were all done in kwacha. The Plaintiffs' claim that the failure by the Defendant to make a single US$ payment on 14th February, 2023 resulted in substantial loss of US$79,028.29 lacked clarification as to how the same was arrived at. Therefore, the Plaintiffs have not adduced evidence to prove their loss or damage as a result of the breach of contract. As earlier stated, the Plaintiffs were refunded in full within three or four days after the resolve to make refund in the same Kwacha currency in which the payments were received. The Supreme Court has guided in a J37 number of cases that where transactions are expressed in r Kwacha, it is not allowed to hedge them against depreciation of the internal value of the Kwacha in a foreign currency. The case of Zambia Industrial and Mining Corporation Limited (In Liquidation) v Lishomwa Muuka8 and the case of Lombe Chibesakunda v Rajan Lekhraj Mahtani9 are very instructive. 5.34 The Supreme Court in the case of Barclays Bank Zambia Pie v Patricia Leah Chatta Chipepa10 guided that in such circumstances where the Plaintiff has failed to prove the loss resulting from breach of contract, the successful party is entitled to nominal damages only. And in the case of Finance Bank Zambia Limited and Anor v Simataa Simataa11, it was held by the Supreme Court that: "In two recent cases, we were confronted with situations where parties to litigation proved that there was an infraction of their legal rights, yet loss or damage was not proved. In both David Chiyengele and Others v. Scaw Limited and Barclays Bank Zambia Plc v. Patricia Leah Chatta Chipepa we awarded nominal damages of KS00 to the successful parties. We owe it to the parties to explain that as was articulated by Kay L J in Mappouras v. Waldrons, nominal damages are 'not intended to compensate for anything at all' but are awarded simply to 'mark the fact that there has been a breach of contract.'" 5.35 In the circumstances of this matter and due to passage of time, I award to the Plaintiffs nominal damages in the sum of ZMW 5,000.00 with interest at the short-term deposit rate from the date of the writ, to the date of this judgment and thereafter at the average lending rate as determined by Bank of Zambia, up to date of payment. 5.36 The Plaintiffs further alleged that as a result of the Defendant's breach of contract and fraudulent misrepresentation, they J38 suffered reputation damage due to their failure to deliver commitments to their clients. The Plaintiffs' claim is for damages for reputational damage. However, no evidence was adduced to prove any loss as a result of said reputational damage. The duty to adduce evidence was espoused in the case of Finance Bank11 (supra) as follows: "The appellants, as we have already stated, did claim in their pleadings that they suffered loss as a result of the respondent's breach of the settlement agreement. Mr. Chenda informed us that the damage suffered by the appellant was reputational in character. No evidence was, however, led in the lower court to show this loss. The only witness for the appellants in the lower court, Mrs. Mutale Chilangwa Chisela, testified in cross-examination that: It is difficult to prove negative effects .. . . There is no proof because it is difficult to quantify reputational damage. I do not have evidence that the bank lost money or customers as a result of what Mr. Simaata said. Later in re-examination, the witness testified that: In relation to paragraph 16 of my witness statement, the Defendant's statement about insider lending can have adverse effects company customer confidence and attract sanctions from Bank of Zambia, the regulatory Authority. It is clear from the extract of the testimony of the appellants' witness in the trial court that there was no loss financially or otherwise proved to have been suffered by the appellants as a result of the respondent's breach of the settlement agreement, though potentially the respondent's unguarded disclosures could lead to adverse effects on customer confidence and could lead to sanctions from the J39 Bank of Zambia. This is, however, not a good enough basis for finding loss to justify compensatory damages. In his submission before us, Mr. Chenda requested that upon finding that the settlement agreement was breached, we should refer the matter to the Deputy Registrar for assessment. We think, with respect to the learned counsel, that such a course would be patently flawed. It is not the province of the Deputy Registrar to conduct a trial on the question whether or not there was loss following a breach of a contract. That responsibility belongs with the trial judge. The trial judge should find both the breach of contract and loss or damage resulting therefrom. It is only the monetary quantification of that loss that should, in appropriate cases, be referred to the Deputy Registrar. In the present case, no evidence was availed to ground a finding of loss resulting from the breach of the settlement agreement. " 5.37 Having applied the above guidance from the Supreme Court to the facts of this matter, I find that the Plaintiffs have not adduced any evidence to prove that there was reputational damage let alone any loss due to reputational damage. No evidence on the Plaintiffs' market share was adduced and no evidence of third parties from whom the Plaintiffs can be said to have suffered reputational damage was adduced. Thus, the claim for reputational damage also fails. 5.38 I now turn to the issue of costs. The Supreme Court in Mutale v Za~bia Consolidated Copper Mines12 held the following with regard to the argument on costs in a case where nominal damages are awarded: "With regard to costs, the general rule is that a successful party should not be deprived of his costs unless his conduct in the course of the proceedings merits the court's displeasure or unless his success is J40 more apparent than real, for instance where only nominal damages are awarded." 5.39 In this matter the Plaintiffs' claims have largely failed save for nominal damages. I ther e order that each party bears its own costs. Las e Mwanabo HIGH COURT JUDGE J41