Inland Investment Limited v Arm Secure Limited and Ors (2023/HPC/0664) (19 September 2024) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA 2023/HPC/0664 AT THE COMMERCIAL DIVISION HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN " ~:.1 m.. INLAND INVESTMENTS LIM! ED l ~ 2::'.i ~'- PLAINTIFF AND REG RV oa ARM SECURE LIMITED P.O. BOX 500~7. LUSAKA DEFENDANT SWAN GENERAL INSURANCE COMPANY ZAMBIA LMITED 3RD PARTY Coram: Hon. Mr. Justice L. Mwanabo on the 19th day of September, 2024 For the Plaintiff: Mr. S. Chipompela of Messrs. Joseph Chirwa & Co. V For the Defendant: Mr. M. Ndalameta of Messrs. MAY & Co For the 3rd Party: Mr. C. Nhari of Messrs. Nhari Advocates JUDGMENT Cases Referred to: 1. Miller Vs Minister of Pensions (1947) 2 ALL ER 372 2. 'rhomas Sinkala v Engen Petroleum Zambia Limited (Appeal No. 208 of 3. Nyimba Investments Limited v Nico Insurance Zambia Limited (Appeal No. 130/2016) [2017] ZMSC32 4. MTN Zambia Limited v Olympic Milling Company Limited (2011) ZR (1) 5. Colgate Palmolive (Z) v Able Shemu Chuka and 110 Others (Appeal No. 181 of 2005 Jl 6. Aisa Craig Fishing Company Limited v Malvern Fishing Company Limited ( 1983) 1 WLR 964 7. Jarvis v Moy, Davis, Smith, Vanderell & Co (1936) 1KB 399 8. Diego Casilli v Access Bank (Zambia) Limited and 4 Others Appeal No. 259 of 2022 Legislation and Books Referred To: 1. A Concise Law Dictionary by P. G. Osborn 5th edition 2. Halsbury's Laws of England 4th edition Volume 16 3. Section 53 of the Competition and Consumer Protection Act No. 24 of 4. Commercial Law in Zambia: Cases and Materials, Dr. Mumba Malila, SC 5. G.H. Trietel, The Law of Contract, 12th edition, (London: Sweet and Maxwell, 2007) 6. Black's Law Dictionary, 11th Edition, Thomson Reuters, 2019 1.0 INTRODUCTION 1.1 The Plaintiff herein sued the Defendant claiming the following reliefs: 1.1.1 An Order for payment of Forty-Four Thousand Two Hundred Twenty-Eight United States Dollars (USD 44,228), 1.1.2 Damages for Misrepresentation; 1.1.3 Further and in the alternative, an order that Clause 12 of the First Contract amounts to an unfair term of the Contract, taking into account the worth of goods lost and amount paid for security per month; 1.1.4 An order that Contraperentum (sic) rule of Contract Law apply in the construction of the First and Extended Contracts as read together with the addendum and the parties' past dealings, J2 1.1.5 Interest on all sums found due; 1.1.6 Any other relief the court deems fit; and 1.1.7 Costs. 1.2 The history of this matter is that the Plaintiff in 2017 engaged the Defendant to provide security services at its premises in Lusaka. During the pre-contract negotiations the Plaintiff raised concerns over the issue of limiting liability to ZMW2,500.00 in the event of theft or other loss sustained by the Plaintiff owing to the negligence of the Defendant's employees claiming that it had high value goods to be safeguarded. According to the Plaintiff, it was orally informed by the Defendant that the Defendant had insurance cover of up to ZMWl,000,000.00 that could cover the Plaintiffs loss or damage. The parties proceeded to enter into a contract on 1st March, 201 7 which the Plaintiff referred to as the first contract and the Defendant issued an addendum to the contract of even date. 1.3 On 1st October, 2018 the Plaintiff and the Defendant entered into a similar contract relating to the Plaintiffs Ndola office along Nakambala Road, Industrial area which the Plaintiff referred to as the extended contract. The Plaintiff claimed that the extended contract took the same form and content as the first contract in order to meet the specifications of the Defendant's oral assurances and the addendum. 1.4 Plaintiff averred that during the tenure of the two contracts a few theft incidents occurred at the premises and the Defendant compensated the Plaintiff in accordance with the Defendant's oral and written representation. Between 11th and 15th March, 2022 a theft took place at the Plaintiff's Ndola premises and property valued at US$44,228.00 was lost. Investigations revealed that the theft was perpetuated by the Defendant's employees who were prosecuted and convicted. However, the Defendant refused to compensate the Plaintiff beyond ZMW2,500.00 based on clause 12 of the extended or Ndola contract which according J3 to the Defendant had no addendum. The Defendant contended further that the Plaintiff just like any of its clients was supposed to have its own insurance cover and that the Defendant's insurance with the 3rd Party was to cover the Defendant against loss or theft by the Defendant's employees over money and property for which the Defendant was responsible (the Fidelity Guarantee Insurance). The Defendant contended however that even though some claims were met in the past on discretionary basis it does not control the 3rd Party and that the 3rd Party rejected the claim in issue. The Defendant further insisted that the incident happened in Ndola therefore the addendum did not apply to that contract as it only applied to the Lusaka contract. 1.5 The Defendant averred that the Plaintiff, in breach of the contract, on 30th August, 2023 informed the Defendant that it was not going to utilize the Defendant's services beyond 31st August, 2023: hence the counterclaim for payment of monthly fees for security for the period 1st February to 31st August, 2023 in respect of the Lusaka and Ndola contracts in the total sum of ZMW224,651.51 unpaid by Plaintiff. 1.6 The 3rd Party disputed the claim on the basis that according to the contract between the Plaintiff and the Defendant, it limited the liability of the Defendant to ZMW2,500.00 which is less than the excess policy amount of ZMW25,000.00 to trigger settlement of the claim by the 3rd Party according to policy insurance number P / 5102 / 102 / 20 / 505 / 106. 2.0 EVIDENCE ON BEHALF OF THE PLAINTIFF 2.1 The Plaintiff called one witness by the name of Ozair Abbas Shaikh (PWl) the General Manager for the Plaintiff. The gist of his evidence in chief was that the parties entered into a contract on 1st March, 2017 for provision of security services and that prior to signing the contract the Plaintiff had raised concerns with clause 12 of the contract given the high value of the goods the Plaintiff required to be safeguarded but it limited liability to ZMW2,500.00. He stated that the Defendant assured J4 the Plaintiff orally and by letter that it had an insurance cover of up to ZMWl ,000,000.00 that would cover the Plaintiffs loss or damage to its goods. PW 1 further stated that the Defendant assured the Plaintiff that its personnel was well trained to safeguard its property after which the contract was signed based on those assurances. 2.2 PW1 testified further that on the same date of 1st March, 2017 the Defendant provided a general addendum to amend clause 12 of the first contract. He said that his understanding of the agreement was that in the event of any robberies or thefts that might occur, the insurance company would take responsibility for the loss if caused by the Defendant's employees. 2.3 PWl in his continued evidence in chief stated that on 1st October, 2018 the Plaintiff extended the first contract to cover its Ndola premises and that the parties signed what he called the extended contract. According to PW1, he made it known to the Defendant verbally that the goods on the premises were quite unique and expensive. He further testified that when he asked the Defendant if the insurance policies were still place it was affirmed to him that there was insurance for any loss that maybe occasioned by loss or theft due to gross negligence of the Defendant's employees. 2.4 During the course of the contracts, PWl said that, the Plaintiff experienced a few thefts at its premises owing to the negligence of the Defendant's employees which were compensated by the Defendant in accordance with the oral and written representation concerning clause 12 of the contract. PW 1 went on to testify that, between 11th and 15th March, 2022 a theft took place at the Plaintiffs Ndola premises and that steel structures worth around US$44,228.00 were stolen. That after investigations it was discovered that the Defendant's employees were responsible and they were convicted after being prosecuted though the goods were never recovered. The Plaintiff lodged a claim with the Defendant but the Defendant offered to pay only ZMW2,500.00 as JS settlement despite the earlier promises to follow up the issue with the insurance broker. PWl indicated that he reminded the Defendant of the assurances and the previous payments after which the Defendant made an offer to pay ZMW25,000.00 but the Plaintiff declined the offer for being too low. It was PWl 's conclusion that the refusal by the Defendant to honour the undertaking amounted to misrepresentation which led the Plaintiff to sign the contract. 2.5 In XXN P\Vl stated that he joined the Plaintiff in December, 2016 and that the action herein was based on the document on page 1 of the Plaintiff's bundle of documents. He admitted that the Plaintiff had no insurance cover for the stolen goods. He also confirmed that he was part of the team that negotiated the contract. On the representation by the Defendant, PWl said that originally the representations were oral and later reduced into writing by addendum which came after the contract but on the same day. PWl admitted that there was nothing false or untrue contained in the letter (the addendum) at page 6 of the Plaintiffs bundle of documents and agreed that the Defendant had a fidelity guarantee insurance in place. He also agreed that the said letter was not by any of the directors of the Defe nda nt. Upon being referred to page 5 paragraph 18 of the Plaintiffs bundle of documents, PWl agreed that the letter was written by someone not authorized to alter the contract. 2.6 PWl admitted in further XXN that for the Ndola office there was no letter like the one at page 6 of the Plaintiffs bundle of documents but disagreed with the question suggesting that the Ndola contract was separate from the Lusaka contract. He nevertheless admitted that there was nothing in the Ndola contract appearing at pages 1 and 2 of the Plaintiff's bundle of documents referring to the Lusaka office. According to PWl there was reference to the Ndola contract in the Lusaka contract by virtue of the name of the company being mentioned in both. He admitted that he was not part of the negotiations for the Ndola contract and that according to clause 12 of the Ndola contract there is limitation J6 of liability to ZMW2,500.00. PWl insisted that there was a letter from the Defendant to pay liabilities through insurance according to paragraph one of the letter on page 6 of the Plaintiffs bundle of documents. After being referred to paragraph 12 of his witness statement, PWl agreed that there was no proof of payment of the incidences referred to in that paragraph. PWl was referred to page 6 of the Defendant's supplementary bundle of documents and admitted issuing the e-mail in issue and giving the Defendant one day's notice. 2.7 When cross examined by Mr. Nhari and on being asked to read the whole document on page 6 of the Plaintiff's bundle of documents, PWl said that theft was mentioned in the document by virtue of the word loss which covers thefts. 2.8 In re-examination, PWl stated that what was involved in the transaction is the company and that they work as a company despite the signatory to the contract being by one person only. 3.0 EVIDENCE FOR THE DEFENDANT AND 3RD PARTY 3.1 The Defendant also called only one witness by the name of Mohammad Patel (DWl) the majority shareholder and Chief Executive Officer of the Defendant. He confirmed entering into contract with the Defendant to provide security services at the Plaintiffs offices in Lusaka and highlighted some of the terms of the contract relating to termination notice, payment terms and liability. He stated that where liability was applicable as a result of Defendant's negligence it was limited to ZMW2,500.00. 3.2 DWl testified further that according to the contract, the Plaintiff was not supposed to withhold payments to the Defendant and to self-assess any loss and was supposed to have adequate insurance cover for its properties. DWl contended that the authority to alter any terms and conditions was vested in the directors of the Defendant. He referred to the letter dated 1st March, 201 7 and said that it was issued by the J7 marketing and sales officer though unfortunately termed addendum to the Lusaka contract when in truth it was just a letter explaining to the Plaintiff that in spite of clause 12 on limitation of liability in the Lusaka contract, the Defendant has fidelity insurance that covers the Defendant up to an amount of ZMWl,000,000.00 for incidents arising from dishonesty or theft by its employees. 3.3 According to DWl, the clarification letter stated that the Defendant could submit a claim for compensation with its insurance company in the event of loss to the Plaintiff arising from the Defendant's gross negligence subject to assessment by its insurers. He said that the said letter did not amend or vary any of the clauses of the contract. DWl further testified that the letter of 1st March, 201 7 was not authored by a director of the Defendant and that the limit of liability remained at ZMW2,500.00 while the Plaintiff was required to take out adequate insurance for itself. DW 1 went on to state that the claim by the Plaintiff was rejected by its insurers and that since the incident happened in Ndola it was not subject to the addendum that applied to the Lusaka contract. He then referred to the fidelity insurance obtained by the Defendant to cover the stated events. 3.4 According to DWl, the fact that the parties already had a contract for Lusaka, the terms for the Lusaka contract did not automatically apply to the Ndola contract. He set out the Ndola contract terms and the limitation of liability to be only ZMW2,500.00. He alluded to the loss that the Plaintiff suffered at its Ndola premises in the sum of ZMW785,931.56 which the Defendant tried to help the Plaintiff by lodging the claim with the 3rd Party and that the Third Party engaged loss adjusters, Blue Light Risk Services Limited, who prepared a report confirming the value of the loss as indicated by the Plaintiff. DWl stated that several discussions were held by the parties but the claim was eventually rejected by the 3rd Party in September, 2023. DWl insisted that the 3rd Party was liable to pay the claim because that was the J8 reason the Defendant obtained the fidelity insurance: to protect itself from adverse consequences of employees stealing money or property during the relevant period of cover. st 3.5 In support of the counterclaim, DWl stated that on 31 August, 2023 the Defendant received a notice from the Plaintiff terminating its services as of 31st August, 2023 in breach of the contracts. He said that the Defendant provided security services to the Plaintiff up to 31st August, 2023 but the Plaintiff had not paid for the services from 1st February, 2023 to date of termination on both contracts with a sum of ZMW140,750.39 for the Ndola contract and ZMW83,901.12 for the Lusaka contract remaining unpaid bringing the total to ZMW224,651.51. DWl indicated that according to the contract, the Plaintiff was not supposed to withhold the amount in issue. 3.6 Under XXN DWl and upon being referred to page 1 of the Defendant's bundle of documents and paragraphs 7 and 8 of his witness statement, he insisted that the letter in issue was a clarification letter but said that he didn't have sight of the letter before it was sent to the Plaintiff. He confirmed the contents of the letter as is but that the 3rd Party was to assess the claim independently. 3.7 DWl confirmed that he was not part of the negotiation team over the contracts but he could not remember the person he assigned to do so. He indicated that not all the contracts by the Defendant have an addendum but that there could be others that have in addition to the one in issue. He confirmed that the Defendant has an insurance policy which covers the company and that covered all premises under its protection including the Ndola one. DWl did not recall the specifics around the terms, discussions and any other claims by the Plaintiff held between the Plaintiff and the Defendant because the defendant has so many contracts and that he didn't deal with every incident. He however confirmed that a Mr. Bristol was the Defendant's General Manager in the Northern Region and that it was possible that he is the one who was J9 communicating with the Plaintiffs witness and also that he may have engaged the insurance company over the claim by the Plaintiff. DWl said that he recalled seeing a report declining the claim from the insurance and he thought its because the Ndola contract had a limit. 3.8 When cross examined by Counsel for the Third Party, DWl stated that the limit for liability for the Ndola office was ZMW2,500.00. After being referred to page 1 of the Defendant's bundle of documents and reading the letter thereon he said that theft is not directly stated in the 1st paragraph in issue. 3.9 The 3rd Party called one witness Chinyama Loloji (TPWl) a Claims Manager in its employ. He made reference to the contract entered into between the Plaintiff and the Defendant and the limitation of liability to ZMW2,500.00. He indicated further that by letter dated 1st March, 2017 the Defendant broadened its limit to ZMWl,000,000.00 for liability to the Plaintiff for Lusaka premises. TPWl reproduced the liability limitation clause. He confirmed that the Defendant reported a claim for loss suffered by the Plaintiff at its Ndola premises to the tune of ZMW741,648.01 and explained the process the 3rd Party undertakes after receiving a claim which includes requesting for documents and depending on the claim, the loss is adjusted either internally or through an independent adjuster. 3.10 As regards the claim in issue, TPWl stated that after receiving the claim, Bluelight Risk Services Limited was engaged as an independent loss adjuster as a huge amount was being claimed and that the loss adjuster confirmed the value of the claim. TPWl testified further that the Bluelight recommended that the claim was not payable because under the contract the limit of liability for the Defendant is ZMW2,500.00 which is below the minimum policy excess ofZMW25,000.00. According to TPWl, the 3rd Party's liability is only limited to the liability of its insured: the Defendant herein. JlO 3.11 Under XXN, TPWl confirmed that the 3rd Party was not a party to the contract referred to in paragraph 2 of his witness statement. He disagreed with the suggestion in the question that there was a difference between negligence and fidelity guarantee policy. After being referred to page 8 of the Defendant's bundle of documents, TPWl confirmed that it was the policy that the Defendant had with the 3rd Party. He further stated that he knew that the loss was due to thefts by Defendant's employees and that the loss adjuster's report confirmed so. He also stated that the ZMW667,483.20 was within the policy limit. According to TPWl, the loss adjuster didn't classify the loss as negligence and that the adjuster's report was submitted to the 3rd Party and the 3rd Party submitted it to the Defendant. TPWl indicated that the 3rd Party classified the incident as theft and not negligence under the fidelity guarantee clause. When referred to paragraph 3 of his witness statement, TPWl stated that liability under Lusaka contract was increased to ZMWl ,000,000.00. 3.12 When XXNed by Counsel for the Plaintiff, TPWl stated that the policy covered liability of its client against theft where the premises were and that the premises could be anywhere in Zambia. TPW 1 confirmed that at the time of entering into the policy with the Defendant the 3rd Party was aware of the contract betvveen the Plaintiff and the Defendant including the addendum though he could not recall how that communication was done. 4.0 SUBMISSIONS BY THE PARTIES 4.1 The parties through their respective advocates filed written submissions which I have duly noted but I will not reproduce them save to refer to them in my decision as and if considered necessary. 4.2 The summary position from the submissions of the parties is as follows: 4.2.1. The Plaintiff contends that there was misrepresentation by the Defendant concerning clause 12 of the contracts in issue and the Jll letter by the Defendant of 1st March, 2017 by which the Plaintiff was made to enter into the contracts in issue and that the contra proferentem rule of interpretation should apply against the Defendant. 4.2.2. The Defendant contends that liability limitation under clause 12 of the contract applies as the parties are bound by the contract entered into voluntarily and that the letter of 1st March, 2017 did not apply to the Ndola contract and also that the 3rd Party is liable to pay the claim as there was a policy in place that protected the Defendant for losses caused by its employees as provided by the insurance policy document. 4.2.3. The 3rd Party's position is that its liability is limited to the liability of its client the Defendant herein and that since the contract limited the liability of the Defendant to ZMW2,500.00 the 3rd Party was only liable to the same extent. However, it was further contended that since the excess according to the policy is ZMW25,000.00 and the liability in issue is only ZMW2,500.00 there is nothing to be paid by the 3rd Party going by the terms of the policy. 5.0 ANALYSIS AND DECISION 5.1 I have duly considered the evidence adduced and the submissions by the parties. The Plaintiffs claims and the Defendant's counterclaims are as stated in the introduction. Therefore, I will resolve the disputes among the parties based on the evidence they have adduced in this matter. The standard of proof required in civil matter was as succinctly spelt out in the case of Miller Vs Minister of Pensions1 where it was stated that: "The evidence adduced must carry a reasonable degree of probability, not as high as is required in a criminal case. If the evidence is such that the tribunal can say: 'we think it more J12 probable than not', the burden is discharged, but if the probabilities are equal it is not" 5.2 According to the evidence adduced in this matter, the following issues are not in dispute: 5.2.1 That the Plaintiff and the Defendant entered into two contracts for provision of security services by the Defendant at the Plaintiffs Lusaka and Ndola premises. The Lusaka contract was entered into on 1st March, 201 7 and was followed by a letter of even date titled addendum to the agreement. The Ndola contract was entered into on 1st October, 2018. 5.2.2 That prior to execution of the Lusaka contract, the Plaintiff raised concerns over clause 12 of the contract hence the follow up letter by the Defendant of even date to the contract. 5.2.3 That both contracts contained a clause 12 which limited the Defendant's liability to ZMW2,500.00 for its negligence or that of its employees. 5.2.4 That the Defendant had a fidelity insurance policy of up to ZMWl,000,000.00 for each and every event with the 3rd Party to cover the Defendant against loss or theft by its employees of money and other property for which the Defendant was responsible for due to gross negligence or connivance. 5.2.5 That between 2nd February and 14th March, 2022 the Plaintiffs property for which the Defendant was responsible was stolen by the Defendant's employee who were convicted after prosecution. 5.2.6 That following the loss of property suffered by the Plaintiff, the Defendant was informed of the incident and in turn lodged a claim with the 3 rd Party. The 3rd Party engaged a loss adjuster who confirmed the loss but the 3rd Party declined to pay the claim on advice from the loss adjuster to the effect that its client's (the Defendant) liability was limited to ZMW2,500.00 and that since the minimum excess amount in the policy was ZMW25,000.00, J13 the claim was not payable as it was below the minimum excess amount. 5.3 In light of the pleadings and evidence adduced herein, I am of the view that the following are the issues that require determination: 5.3.1 Whether the Defendant's liability under the Ndola contract was limited to ZMW2,500.00 by virtue of clause 12 of that contract and whether the Defendant is not liable for the actual loss suffered by the Plaintiff? 5.3.2 Whether the 3rd Party's refusal to honour the claim lodged by the Defendant by reference to clause 12 of the Ndola contract and the minimum excess provision in the insurance policy is legally valid? 5.3.3 Whether the Defendant is entitled to payment by the Plaintiff of the sum of ZMW224,651.51 for the services rendered from February, 2023 to August, 2023? 5.4 On the 1st issue, the Plaintiffs basis for the claim that the Defendant is liable for the full lose suffered is based on the Defendant's oral representation and letter of 1st March, 2017 termed addendum and on some compensation made by the Defendant for previous losses suffered by the Plaintiff. The Plaintiff further claimed that after the incident in issue the parties held discussions where the Defendant had made promises to take care of the claim but changed its position much later. 5.5 According to the Plaintiff, the Defendant made a false statement of material facts to the Plaint iff before or at the time of the cont ract which made the Plaintiff to accept the contract and cited the following cases to fortify its position: Thomas Sinkala v Engen Petroleum Zambia Limited2 Nyimba Investments Limited v Nico Insurance Zambia , Limited3 and MTN Zambia Limited v Olympic Milling Company Limited4 The Plaintiff further contended that the contract had an • unfair term included by the Defendant. J14 5.6 The Defendant's position is that, the letter of 1st May, 2017 did not apply to the Ndola contract and that there was no consistent mode dealing between the parties to support the Plaintiffs claim that the parties had a course of dealing. The Defendant insisted that clause 12 of the contract was binding on the parties and relied on the case of Colgate Palmolive (Z) v Able Shemu Chuka and 110 Others5 where it was held that men of full age and competent understanding are bound by contracts entered into freely and voluntarily. My attention was further drawn to the case of Aisa Craig Fishing Company Limited v Malvern Fishing Company Limited6 concerning a limitation and where it was held inter alia that: "Clauses of limitation are not regarded by the Courts with the same hostility as clauses of exclusion. This is because they must be related to other contractual terms, in particular to the risks to which the defending party may be exposed, the remuneration which he receives and possibly the opportunity of the other party to ensure:" 5.7 In order to put the dispute between the Plaintiff and the Defendant in proper context, I will begin by looking at clause 12 of the contracts and the letter of 1st March, 201 7. Clause 12 provides as follows: "The company or any of it's employees shall not be liable for any loss or damage to the clients, the clients customers or visitors property or injury or death. However, if the loss, damage, injury or death is caused due to negligence (underlining for my own emphasis) by the company or any of it's employees, the refund/compensation amount shall not exceed ZMW2, 500. 00 per event or incident on condition that the said damage/loss is reported in writing to the company within 3 days of its occurrence." (Quoted as is with all the grammatical errors) The letter of 1st March, 201 7 reads as follows: "ARM SECURE JlS LIMITED 'Without Prejudice' OUR REF: MM/em/01032017 1st March, 2017 Inland Investments Limited {Address for the Plaintif.fl For the Kind Attention of: Mr. Arshad Sayed Dear Sir, Ref: ADDENDUM TO THE AGREEMENT WITH ARM SECURE LIMITED Regarding the liability clause number twelve (12) of our standard contract agreement, we would like to confirm that we have in place insurance policies which cover us in terms of our liability arising from claims for loss of client's assets, only where such loss is as a direct result of our gross negligence or connivance. (Underling for my own emphasis) This cover has a current limit of up to ZMWl,000,000.00 (Kwacha 1 million only). It is the client's responsibility to provide the necessary information and documentation to the company's insurer through the company for any such compensation claims. Should you require more clarification on this matter please do not hesitate to contact the undersigned. Yours Sincerely, For/Arm Secure Limited Signed Mirriam Mwanyungwi Sales & Marketing Executive J16 5.8 Clause 12 of the contracts is clear and unambiguous in its meaning and if read alone the case of Aisa Craig6 would apply with equal force. However, in this matter it is clear that the Plaintiff had raised concerns over the application of clause 12 leading to issuance by the Defendant of the letter dated 1st March, 2017 titled addendum but DWl said that it was a clarification letter. My view is that whatever title one may give to the letter does not matter: what is true about the letter is that it was meant to address the concerns raised by the Plaintiff over clause 12. The letter of 1st March, 201 7 is clearly a representation given to the Plaintiff by the Defendant addressing its concerns on the limitation of liability. Therefore, this case can be distinguished from the Aisa Craig6 case because in that case there was no representation similar to the one herein clarifying the limitation clause. Furthermore, there was no reference to a 3rd Party in the Aisa6 case. Furthermore, DWl confirmed that some claims were paid by the 3rd Party though using its discretion. 5. 9 Having looked at clause 12 and the letter of 1st March, 2017 I am of the view that the two cannot be applied to the same limitation because by doing so one will have to yield to the supremacy of the other. What I find to be the acceptable position is that the letter of 1st March, 201 7 was a clarification that ZMW2,500.00 applied to liability of the Defendant for losses caused by mere negligence while for losses caused by gross negligence or connivance the ZMW2,500.00 did not apply because there was an insurance cover of up to ZMWl,000,000.00 to take care of losses caused in that manner. 5.10 The issue in this matter is not about fraudulent representation as submitted by the Plaintiff because there is nothing false about the representation made by the Defendant. The issue is whether the Defendant is bound by that representation. I have no hesitation to conclude that the representation was made in order to make the Plaintiff believe that the Defendant had put in place an insurance to circumvent the global application and harshness of clause 12 in the J17 contract. The representation which was made orally and also confirmed by the letter of 1st March, 201 7 stated the truth as evidence of such insurance was produced. TPWl confirmed that the letter in issue increased the Defendant's liability under the contract to ZMWl,000,00.00. An objective reading of the letter in issue clearly shows that the intention of issuing that letter was to make the Plaintiff comfortable in entering into and continuing with the contract. The Defendant is therefore estopped from making that representation of no effect. Estoppel is defined by the learned authors of A Concise Law Dictionary1 at page 126, as follows: "The rule of evidence or doctrine of law, which precludes a person from denying the truth of some statement formerly made by him, or existence off acts which he has, by words or conduct, led others to believe in. If a person by a representation induces another to change his position on the faith of it, he cannot afterwards deny the truth of his representation. ..." . Furthermore, Halsbury's Laws of England2 at page 1505 (b) stated the position regarding a representation by a party as follows: ''Where a person by words or conduct made to another, a clear and unequivocal representation off act, either with knowledge of its falsehood or with intentions that it shall be acted upon, or less so conducted himself with another who as a reasonable man understands that a certain representation off act was intended to be acted on and the other has acted on the representation and thereby altered his position to his prejudice, an estoppel against the party who made the representation and he is not allowed to aver that a fact is otherwise than he represented it to be." 5.11 The Defendant argued that letter of 1st March, 2017 was not signed by a director as such it could not alter or amend the contract as required by clause 18 of the contract. However, I note that the person who authored the letter is also the same person who signed the contract on J18 behalf of the Defendant. Moreover, there was no evidence adduced of who the Defendant's directors were at the time in order to satisfy me that the author of the letter was not one of them. In any case, DWI stated that the letter in issue was mistakenly titled addendum because it was a clarification letter. As earlier stated the title of the letter does not matter: what matters is the intention of issuing it and its effect on the Plaintiff. Additionally, the Defendant did not distance itself from the said letter. Therefore, the argument of the Defendant on this score lacks merit. 5.12 The Defendant further argued that the letter of 1st March, 2017 does not apply to the Ndola contract and that it was limited to the Lusaka contract. The view I take is that, it is not in dispute that the letter in issue was written more than a year to the date of the Ndola contract. However, the contents and therefore spirit of that letter does not limit its clarification to clause 12 of the Lusaka contract. As earlier stated, DW l's evidence was that it was a clarification letter around the application of clause 12. Clause 12 appeared in both contracts in exact same words. The clarification in the letter was of general nature around the issue of clause 12 as the letter did not state that it was giving special treatment to the Lusaka contract only. The letter went on to state that clause 12 was part of its standard contract and that the Plaintiff had insurance in place. Evidence was adduced showing that the said insurance was not only for the Lusaka contract as confirmed by DWI who said that the Defendant's insurance covered all palaces in Zambia of its security provision: including the Ndola one. Therefore, since the Plaintiff had already raised concerns over that clause and general clarification surrounding the said clause was given in the said letter, the Plaintiff was entitled to take it as a given that the same clarification applied to clause 12 of the Ndola contract. Moreover, there is overwhelming evidence that after the Ndola incident in issue the parties were in positive talks for a considerable period with a view to J19 compensate the Plaintiff. The Defendant even lodged the claim with the 3rd Party and the 3rd Party engaged a loss adjuster to assess the loss. This shows that the three parties herein were in one accord as regards making good the loss suffered by the Plaintiff. The spoiler of the whole process was the loss adjuster who brought in the issue of clause 12 of the contract. 5.13 Furthermore, DWl's evidence on the issue is still that the 3rd Party must pay the claim. However, before the 3rd Party can pay there must be liability attributable to the Defendant covered by the insurance. In light of the foregoing, I find that the Defendant is blowing hot and cold in its contention that the letter of 1st March, 2017 did not apply to the Ndola contract. I am therefore satisfied that the Defendant's overall liability under the Ndola contract is not limited to ZMW2,500.00 but extends to its insured liability under the fidelity insurance as envisaged by its letter st of 1 March, 2017. There is no contention to the evidence that loss was caused by the gross negligence/ connivance of the Defendant's employees over property for which the Defendant was responsible. The loss in issue is therefore covered by the Fidelity insurance policy issued by the 3rd Party to the Defendant. 5.14 As regards the Plaintiffs contention that clause 12 amounts to an unfair term of the contract, nothing much was said by the Plaintiff other than the background given on the concerns raised at the time of entering into the contract. The Defendant contended that Section 53 of the Competition and Consumer Protection Act3 does not apply because the Plaintiffj ust like the Defendant is an enterprise and not a consumer. I find it unnecessary to delve into this issue as the parties already agreed on the way around clause 12 as already determined hereinbefore. I equally find determination of the contention by the Defendant that the Plaintiff was supposed to have its own insurance to have been rendered redundant as that was just extra caution to be J20 taken by the Plaintiff: it did not absorb the Defendant from liability as clarified in its letter of 1st May, 201 7. 5.15 The answer to the 2nd question cannot be divorced from the answer to question one. The maximum cover to the Defendant for the loss in issue is ZMWl,000,000.00. The Defendant's evidence is clear on the purpose of the insurance in issue. DWl stated that it was to protect the Defendant from claims such as the one in issue. Furthermore, the 3rd Party after receiving the claim proceeded to engaged the loss adjuster. There is also no evidence to suggest that when the Defendant lodged the claim with the 3rd Party it indicated that it was only liable for ZMW2,500.00. The 2nd Defendant submitted the whole claim as received from the Plaintiff. 5.16 I therefore agree with the citation by the Defendant from the book by the learned author of Commercial Law in Zambia: Cases and Materials4 to the effect that an insurer is liable to indemnify the insured for loss from a direct consequence of a peril insured against. The 3rd Party is therefore duty bound to honor the claim. Moreover, the 3rd Party's reliance on clause 12 of the contract is defeated by the letter of 1st March, 2017 as such the argument on sanctity of contract must be read bearing in mind the letter in issue. Furthermore, since the liability of the 3rd Party is dependent on its insured, the Defendant herein having been found to liable already, as a consequence so is the 3rd Party. To accept the Party's reliance on clause 12 and the contention that 3rd claims of ZMW2,500.00 cannot be paid because they are below the agreed minimum excess would render the fidelity insurance redundant as no claim would be paid since clause 12 is part of the Defendant's standard contracts with its clients: the insurance would utterly save no purpose. In any case, as already stated, the 3rd Party paid some of the claims without bringing in clause 12. 5.17 On the value of goods lost, the Plaintiff's evidence is that the value of property lost is US$44,228.00. That figure was not disputed by the J21 Defendant and was actually confirmed by the loss adjuster engaged by the 3rd Party but converted to the kwacha equivalent of ZMW785, 931.56 at the time (page 19 of the 3rd Party's bundle of documents). The Plaintiff is therefore entitled to the sum of US$44,228.00. 5.18 As regards the 3rd question, the Defendant claims the sum of ZMW224,651.51 for the security services rendered between February, 2023 and August, 2023. The Plaintiff did not dispute owing the Defendant this amount but contended that it is unfair to pay the Defendant this amount when it has not been compensated for its loss. According to clause 15 of the contract between the Plaintiff and the Defendant, the Plaintiff was not entitled to deduct or withhold any amount due to the Defendant for any loss or damage. The Plaintiff was therefore, wrong to have withheld the payments to the Defendant as the act was in breach of the contract. I am fortified by the book by the learned authors G.H. Trietel, The Law of Contract5, paragraph 17049 at page 832 where breach of contract is described as follows: "A breach of contract is committed when a party without lawful excuse fails or neglects to perform what is due to him under the contract ... the breach may entitle the injured party to claim damages, the agreed sum, specific performance or an injunction." 5.19 Furthermore, in the case of Jarvis v Moy, Davis, Smith, Vanderen & Co7 at pages 404 - 405 Greer W it was held that: "Breach of contract occurs where that which is complained of is a breach of duty arising out of the obligations undertaken by the contract." 5.20 And according to Black's Law Dictionary6 breach of contract 1s described as follows: "A breach may be one by non-performance, or by repudiation, or by both. Every breach gives rise to a claim/or damages, and may give rise to other remedies .... " J22 5.21 The Plaintiff herein therefore breached its duty to pay the charges for provision of the security services as provided by the contract. The Defendant is entitled to payment of ZMW224,651.51 by the Plaintiff. 6.0 CONCLUSION 6.1 According to the evidence before me, I am satisfied that the Plaintiff has proved its claims against the Defendant as demonstrated above. I accordingly enter Judgment in favour of the Plaintiff against the Defendant as follows: a. US$44,228.00 as compensation for the loss suffered at its Ndola premises. b. The sum awarded shall attract interest at 5% per annum before and after Judgment from the date of the writ as the amount claimed is in hard currency. c. The claim for damages for misrepresentation is denied as there was no evidence to prove it. I equally find the other claims to have fallen off based on the determination I have made around clause 12 of the contracts. 6.2 The Defendant's claim against the 3rd Party by way of third-party proceedings has also succeeded for its liability to the Plaintiff for the sum of US$44,228.00. The 3rd Party is therefore liable to pay the claim either directly to the Plaintiff or through the Defendant less applicable deductions which the Defendant should pay to the Plaintiff. 6.3 The Defendant's counterclaim against the Plaintiff also succeeds for the sum of ZMW224,651.51 plus interest at short term deposit rate from the date of counterclaim to the date of judgment and thereafter at current bank lending rate as advised by the Bank of Zambia until full payment. I find the interest rate stated in the contract for delayed payment to be unconscionable as this was an ordinary contract that should attract only reasonable interest. I rest my decision on this score on the recent J23 supreme Court decision in the case of Diego Casilli v Access Bank (Zambia) Limited and 4 Otherss. 6.4 Parties shall bear their respective costs as the Plaintiff and the Defendant, who were the main contestants, have both succeeded in their respective claims. Lastone Mwanabo HIGH COURT JUDGE J24