Mega Market (Private) Limited v Zikrag Investments (Private) Limited and Zimside Logistics (Private) Limited and Elliot Matanga and Charles Mathe

### Preamble
1
HH 785-18
HC 7513/17
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MEGA MARKET (PRIVATE) LIMITED

versus

ZIKRAG INVESTMENTS (PRIVATE) LIMITED

and

ZIMSIDE LOGISTICS (PRIVATE) LIMITED

and

ELLIOT MATANGA

and

CHARLES MATHE

HIGH COURT OF ZIMBABWE

MUZOFA J

HARARE,17,18 September 2018 and 23 November 2018

Civil Trial

A.F Bimha, for the plaintiff

J.T Mafongoya, for the 1st defendant

Tambanewenyu, for the 2nd &4th defendants

MUZOFA J: The plaintiff’s claim is for damages in the sum of $35 442.00 for loss of goods and $140-00 for costs incurred in the recovery of goods. The plaintiff is in the business of distribution of fast moving goods. It transports such goods by trucks which are predominantly hired from other companies. According to plaintiff it entered into an oral agreement with the first defendant through the fourth defendant its employee for the provision of trucks. In terms of the agreement the first defendant was to transport 1 260 boxes of cooking oil from plaintiff’s warehouse in Mutare to its client in Checheche. The truck that carried the cooking oil, driven by the third defendant was involved in an accident and nothing could be salvaged. The plaintiff lodged a claim with the first defendant and when payment was not made the plaintiff issued out summons.

The first defendant denied liability in that it did not contract with plaintiff. It did not authorize the fourth defendant to contract with plaintiff or authorize the third defendant to carry the goods. The second defendant is unknown to first defendant. The fourth defendant must have contracted on his behalf and in the process abused the first defendant’s trucks. The second and fourth defendants also denied liability. The fourth defendant said he contracted on behalf of the first defendant and he did not make any arrangement for payments to be made to the second defendant. The third respondent did not file any response to the plaintiff’s claim.

At the pre- trial conference the parties agreed that a determination of the following issues will dispose of the matter;

Whether or not there was an agreement between the plaintiff and the defendant and the terms thereof.

Whether or not there was a contract of employment between the first and fourth defendants.

Whether or not the third defendant was negligent.

Whether or not the first defendant is vicariously liable due to the actions of the third and fourth defendants.

Plaintiff’s case

The plaintiff called three witnesses to prove its claim. Kelvin Mwaziyeni ‘Mwaziyeni’ was called as the first witness. He said he is employed by the plaintiff as transport logistics officer. His duties include contracting trucks to ferry plaintiff’s goods to clients throughout the country. On a date he could not remember he received a call from the fourth defendant requesting for hire from Mutare to Chiredzi, he said he had a truck that ferried sugar from Chiredzi to Mutare. The fourth defendant indicated that he was looking for work for the first defendant. He agreed because fourth respondent was referred to him by a senior employee at Tongaat Hullet. There was an oral agreement for first defendant to carry goods from Mutare to Chiredzi. A 20% deposit was payable as cash or through ecocash, the balance was to be paid on  delivery of the goods. He was advised that first defendant was insured. In the event of non delivery the balance payable would not be paid if that did not satisfy the amount payable, a claim would be made from the insurance company. The fourth defendant advised him to make all payments to the second defendant since the two companies were the same. The trucks that carried the goods were clearly marked Zikrag Investments (Pvt) Ltd. From then on plaintiff’s goods were transported by the first defendant and payments made to the second defendant. On the fateful day, the third defendant the driver from the first defendant loaded the goods. He assigned a person from plaintiff to accompany the third defendant to confirm delivery. However the third defendant left the person. The driver was involved in an accident at night. He was only advised of the accident in the morning. He contacted fourth defendant who had already been advised of the accident. He sent a rescue team to salvage undamaged goods but there was none. He advised fourth defendant that they wanted compensation and the fourth defendant confirmed that compensation would be made. He occasionally saw fourth defendant at the plaintiff company. Different drivers would ferry goods. The drivers were given all the paper work. He denied that fourth defendant acted on his own accord because the trucks which ferried the goods belonged to first defendant, he did not know whether the second and fourth defendants connived to fraudulently use the first defendant’s trucks.

Under cross examination he said he made reference checks for the fourth defendants from Tongaat Hullet a company in Chiredzi he was satisfied by the recommendations given. He said the agreement was that in the event of damage to goods the insurance company would pay. The value of goods ferried to Checheche was $45 000. He never spoke to the managing director of the first defendant, his boss did. He was referred to a template contract that first defendant uses and asked if such a contract existed between plaintiff and first defendant ,he indicated that fourth defendant had promised to furnish him with a written contract and the insurance documents which never materialized until the day of the accident. He conceded that he did not ask for first defendant’s certificate of incorporation to verify if it was the same company with second defendant. He paid $100 to the driver for the repair of the truck that fourth defendant indicated had broken down. It was suggested to him that by contracting with an uninsured party plaintiff took the risk, he could not answer, but later said the first defendant’s seniors confirmed that it was insured. It was suggested that the money was for toll gates and an incentive since this was a private arrangement. He denied this. It was also suggested that the charge of $434.78 for goods worth $45 000 was too low because this was a private arrangement, he denied, and said they were the normal rates. The witness gave his evidence on his job profile but it was clear that in contracting with the first defendant as he alleged he did not follow the expected procedure as a result he was evasive in addressing certain direct questions. It remained unclear whether a written agreement was in the making; whether the parties agreed on insurance but it was clear that he did not check the company profile from the managing director as expected.

Muhommad Ahmed was called as the second witness. He is the Plaintiff’s managing director. He said the plaintiff has a fleet of trucks for distribution of goods but it also hires trucks from transporters. In identifying potential transporters, the plaintiff conducts a due diligence by checking the company profile and seeking references. When satisfied with the checks, the transporter is listed in the records to provide service. First defendant was referred to the plaintiff by someone at Tongaat Hullet. There was no written contract between the parties; they did not anticipate any problems. The first witness negotiated the contract, the third and fourth defendants were employees of the first defendant. In the transport industry, transporters always look for back loads. He denied that fourth defendant and his employee connived to defraud the first defendant. He said the first defendant was liable due to its employees’ conduct. There was no discussion about insurance with first defendant. After the accident he was advised and he spoke to the first defendant’s managing director who indicated the plaintiff should make a claim, he then handed over the issue to the claims department.  He was not aware that the first and second defendants were separate entities. He did not know that fourth defendant was the sole director of the second defendant. It was suggested that, had the plaintiff done a proper due diligence it could have established that. In response he said yes there was room for improvement. He confirmed that payments were made to the second defendant. Nothing much came out of his cross examination. The witness struck me as a truthful witness who accepted the possible loopholes in the system.

The third witness was Luxon Makusha, the claims officer of the plaintiff company. His duties included making claims from transporters in the event of damage to goods or undelivered goods. After the accident he was advised by his boss, the second witness to make a claim against  the first defendant. He was given the fourth defendant’s contact details. He contacted him, however fourth defendant advised him to contact the first defendant’s owner. He did, he advised the owner about the claim. He wrote a letter to the first defendant advising of the claim but he did not get a response. The managing director told him to call him later when he tried to call later the phone was not reachable. He did not know how the agreement between the plaintiff and the first defendant was entered. He referred to a book signed by the first defendant’s drivers at plaintiff which cited first defendant trading as Zimside the second defendant. He conceded that the first defendant might not have known that he was described as such by the plaintiff. He was not aware that the fourth defendant was the sole director of the second defendant. The claim was directed to the first defendant and not the second defendant because the contract was between plaintiff and the first defendant. The witness struck me as a credible witness who did not exaggerate issues. However the evidence showed that Ahmed did no talk to the managing director of the first defendant because when he instructed the witness to make a claim he gave the witness the fourth defendant’s number. He could have easily given him the managing director’s number. The plaintiff then closed its case.

The first defendant called one witness Efias Munodawafa ‘Munodawafa’. He is the Managing Director of the first defendant. He is in charge of the day to day operations of the first defendant and contracts on behalf of it. The first defendant is in the transport business. It owns trucks for hire. The first defendant had a contract with Tongaat Hullet, the contract was produced. One of the terms of the contract was that trucks used to ferry sugar should not be used to ferry other goods to avoid contamination. In line with that clause, the truck from Mutare was supposed to return with no load. He was not aware that the truck carried goods belonging to the plaintiff on its return. After the accident in this case, he was called by the third defendant advising of the accident. After arranging a rescue team he called the driver but the driver was not reachable. However the recovery team proceeded to the scene of accident, they did not find the driver but there was evidence of oil spillage on the road. He was later called by one Makusha about a claim, he told Makusha that he was not liable but was contemplating making a claim for unlawful use of his truck. He received the claims letter but did not respond to it.

He denied that the first defendant contracted with the plaintiff. The fourth defendant could not contract on behalf of the first defendant because he was not an employee of the first defendant. He knew the fourth defendant, they attend the same church. He offered the fourth defendant office space to do his transport broking business. His business was to identify companies with loads and indentify companies with trucks and then connect the two. He requested the fourth defendant to assist him in respect of the Tongaat Hullet contract only. He was paid for services rendered in transacting with Tongaat Hullet. For whatever services he rendered the fourth defendant would raise an invoice and would be paid $80. He was not on a salary. He did not know about second defendant especially that the fourth respondent was the sole director of the second defendant. He said he could not have contracted with the plaintiff because of a prior commitment with Tongaat Hullet, also that the amount charged did not make sound business sense. If fourth defendant contracted with the plaintiff it was a frolic of his own and third defendant, plaintiff’s driver was not furthering first defendant’s work when he transported the goods. He said in his investigations he discovered that the plaintiff and the fourth defendant had a relationship since 2012 before the registration of the first defendant. The fourth defendant was a transport broker. His drivers were given money for tollgates fees only, fuel was provided by Tongaat Hullet. Since the third and fourth defendant did not act on behalf of the first defendant the first defendant is not liable.

Undercrosss examination Munodawafa was shown letters written by the fourth defendant in which he signed either as logistics officer or logistics manager. He said he instructed fourth defendant to write the letters but said his designation was not as signed off, he said he actually reprimanded the fourth defendant for such conduct. He did not admit liability to the plaintiff’s Managing Director neither did he talk to him at all. A resignation letter by one of the first defendant’s employee was shown to him, it was suggested that the letter was copied to the fourth defendant because he was an employee of the first defendant. Munodawafa denied this and said it is the fourth defendant who had misinformed the employee. He could not refer to the clause he relied on to substantiate his evidence that the first defendant’s trucks were exclusively for use by Tongaat Hullet. Despite the exposure by the fourth defendant he has retained him as the contact person for Tongaat Hullet he could not dismiss him because he was not an employee. However he has evicted the fourth defendant from the shared office. He said he did not take any action against the third defendant. No explanation was given for this non action.	The first defendant then closed its case.

Charles Mathe gave evidence on his behalf and the second defendant’s behalf. He said  he was  the sole director of the second defendant. He was employed by the first defendant as the logistics officer. Letters he wrote on behalf of the first defendant and schedules he prepared during the course of his employment were produced as exhibits. There was no written employment contract between the parties. He entered into an oral agreement with the plaintiff on behalf of the first defendant for carriage of goods. The second defendant generated invoices on behalf of the first defendant in respect of the contracts between plaintiff and the fourth defendant because first defendant did not have a tax certificate. Payments would be made to the second defendant and Munodawafa was aware of this arrangement. Munodawafa would get the bulk of the money and the second defendant was paid a commission. Every time the plaintiff had a load, he would engage Munodawafa and agree on the charges. The contracts with the plaintiff were not written contracts because the first defendant’s trucks were contracted for the transportation of sugar by Tongaat Hullet. So it was only on the return journey that they could ferry the plaintiff’s goods.	According to him Munodawafa denied that he had employed him because of this claim otherwise he knew the truth

Under cross examination he said he was not evicted from the first defendant’s offices and was still performing his duties. He conceded that his evidence was different from his plea, in his plea he did not mention the commission payable to second defendant. He said the evidence in court was the truth. The second and fourth defendants’ case was closed.

I now turn to deal with issues that will dispose of the matter and analyze the relevant evidence in the process. I prefer to start with the issue on the employment of the fourth defendant.

Whether or not there was a contract of employment between the first and fourth defendants.

Section 2  of Labour Act [Chapter 28:01], defines an employee as;

“any person who performs work or services for another person.”

And an employer as

“any person whatsoever who employs or provides work for another person and remunerates or expressly or tacitly undertakes to remunerate him and remunerates or expressly or tacitly undertakes to remunerate him, and includes—

a) the manager, agent or representative of such person who is in charge or control of

the work upon which such other person is employed;….”.

An employment contract requires no formalities and need not be in writing Section 12(1) of the Act provides;

“ 12 Duration, particulars and termination of employment contract

(1) Every person who is employed by or working for any other person and receiving or entitled to

receive any remuneration in respect of such employment or work shall be deemed to be under a

contract of employment with that other person, whether such contract is reduced to writing or 	not.”

The wording of the Act implies that the parties must agree on the work and there must be an agreement on remuneration. According to Madhuku, Labour Law in Zimbabwe, 2015 three elements must exist an agreement to make personal services available, remuneration and subordination.

In order to understand the true meaning of an employee as defined in the Act, courts have developed accepted tests to identify the relationship between parties. The judicial tests include the control test, the organization test, dominant impression test and the economic test. Courts have increasingly accepted the multiple or dominant impression test which has a more realistic approach in the assessment of the relationship. In Medical Association of South Africa and others v Minister of Health and Another 1997 BLLR 562 (LC) the Court said

‘The dominant impression test , it seems , entails that one should have  regard to all those considerations or indicia which would contribute towards an indication  whether the contract is that of service or a contract of work and react to the impression one gets upon a consideration of all such indicia.”

In SA Broadcasting Corporation v Kenzie 1999 20 ILJ 585 (LAC) the court summarized the differences between the contract of employment proper and a contract of work location conductio operis. In a contract of employment the object is the provision of personal service between the parties, the services provided by the employee are by command of the employer and the employer decides whether it wishes the employee to render service and how it is rendered. On the other hand the contract of work targets a specified result, the independent contractor is not obliged to perform work personally unless agreed and to produce specified result within a specified or reasonable time.

A court making a determination on a relationship has to consider a number of factors which indicate the existence of a contract of employment or otherwise. The dominant impression test is a hybrid of the other tests so regard must be had of factors like the extent on control, the conditions and terms of service provision in order to come up with a dominant impression of the relationship. In Southampton assurance Company of Zimbabwe Ltd v Mutuma and Another 1990 (1) ZLR 12 the court considered the conditions of service of the respondent to determine the type of relationship between the parties.

Bearing in mind those principles I now consider the facts of this case. The plaintiff alleged that the fourth defendant was employed by the first defendant because he said so and the first defendant’s trucks were used to carry the goods. The fourth defendant confirmed that he was employed by the first defendant as a transport logistics officer. The fourth defendant alleged that he was employed by the first defendant and contracted with the plaintiff on behalf of the first defendant. That the first defendant and the fourth defendant had an oral agreement for the provision of work or service is not in dispute. Munodawafa confirmed this in his evidence although he tried to coin a term that the fourth defendant was a contact person although under cross examination he said he was a contractor, for the Tongaat Hullet contract to make sure the contract was executed seamlessly. He therefore deposed certain priviledges on fourth defendant like accepting deliveries for fuel on behalf of the first plaintiff, dispatching trucks and monitoring the drivers. That was confirmed by the fourth defendant through his evidence of his alleged work that relates to the sugar deliveries, receipts for fuel received by the first defendant and evidence that he also managed the first defendant’s drivers. Even at the time of trial fourth defendant was still engaged by the first plaintiff providing his services. There is no doubt that there was an agreement between the parties for services. I accept the plaintiff and the fourth defendant’s evidence on this aspect. Munodawafa’s evidence actually corroborated their evidence.

No evidence was given by the fourth defendant on his remuneration, even after probing under cross examination, he did not disclose whether he was on a salary or not. Munodawafa said he was paid for services rendered. I shall not be drawn to the technicalities as what services were rendered because Munodawafa’s evidence was not even clear on what he meant. At one point he said he was paid for mentoring an employee yet there is evidence that fourth defendant provided services beyond mentoring the said employee.

Whether there was subordination or not also depends on the evidence. What is clear is that the fourth defendant was provided with the tools of trade; he operated from the first defendant’s office, he was provided with stationary, he managed the first defendant’s drivers and he could write letters on behalf of the first defendant. It is also evident that all the paperwork produced by the fourth defendant relate to transactions with the Zimbabwe Sugar Sales Company (ZSS) which l believe was being referred to as the Tongaat Hullet contract. Munodawafa actually had some control as to how the work was done. He confirmed that he directed the fourth defendant to write certain letters to ZSS and fourth defendant would sign on behalf of first defendant. The letters produced by the fourth defendant show his designation. The resignation copied to the fourth defendant show that he was an employee of the first defendant. I reject Munodawafa’s explanation that he reprimanded the fourth defendant for calling himself some transport logistics officer. This happened twice and there was no evidence of this reprimand. The conduct by fourth defendant was risky to the first defendant yet no stern measures were taken against him. Also why would another employee believe that fourth defendant was an employee if there was no such dominant impression that he was? To my mind even those drivers that fourth defendant managed, believed he was an employee. Fourth defendant was more than a contact person, whatever that is. From the facts of this case the dominant impression is that the fourth defendant was an employee of the first defendant for the Tongaat Hullet contract.

Whether or not there was an agreement between the plaintiff and the defendant and the terms

thereof.

I have already made a finding that the fourth defendant was an employee of the first defendant in respect of the Tongaat Hullet contract. The question is was the act of contracting with the plaintiff within the scope of his employment and authority? Put differently was the fourth defendant on a frolic of his own in pursuit of personal interests instead of his employer’s interest? The plaintiff’s witness said he believed that the fourth defendant had the authority to contract. However that confirmation was not sought from the managing director of the first defendant. He said he confirmed with a person from Tongaat Hullet whose name was not even disclosed. One wonders why the plaintiff through Mwaziyeni conducted itself that way. The plaintiff failed to satisfy itself whether or not the fourth defendant had such authority to contract and to confirm whether or not the first and the second defendants are same company. A company such as the plaintiff should be able to conduct proper due diligence in order to avoid fraudsters contracting with it. It is not in dispute that fourth defendant was in charge of the transport at first defendant and managed the drivers thereof. It is not in dispute that the first defendant’s trucks would make deliveries of sugar and after delivery the trucks would have no loads. The delivery for the plaintiff’s goods was part of what they term in the industry back loads. By contracting with the plaintiff he acted outside his duties. It is clear that the fourth defendant was on frolic of his own.

The fourth defendant’s demeanour and evidence on the making of the contract left a lot to be desired, he contradicted himself and introduced new evidence which all the other parties could not respond to. In court he said the payments in respect of the contract were to be made to the second defendant and he was to be paid a commission after the delivery of the goods. In his plea and summary of evidence he said the second defendant had nothing to do with the contract and would not benefit from it. What is more telling is that fourth defendant is the sole director of the second defendant where payments were being made. He tried to explain that this arrangement was made with Munodawafa because the first defendant did not have a tax clearance certificate. To Mwaziyeni he said the two companies were the same, he did not challenge that evidence by Mwaziyeni. The contradicting evidence by the fourth defendant shows that he certainly entered into the agreement to use first defendant’s trucks without authority and the payments to his company confirm that he was the sole beneficiary of this agreement.

The plausible explanation is that the fourth defendant used the first defendant’s trucks to carry the plaintiff’s loads as back loads. It would not be farfetched to draw an inference that the plaintiff’s first witness was aware of the illicit transportation of the goods that is why he abstained from doing a proper due diligence. Even his evidence did not match what actually transpired for instance he said the plaintiff would pay 20% deposit in this case he paid $100 to the driver and not to the first defendant. Why would that happen if the contract was between the plaintiff and the first defendant? The plaintiff was clumsy in its business dealings and therefore cannot fault the first defendant. I do not believe the fourth defendant contracted on behalf of the first defendant, this was his personal contract which was known by plaintiff’s employee.

This is a case of deviation from the scope of employment. It is accepted that there is no general rule when it comes to the question whether the act of the employee falls inside or outside the scope of employment. Each case depends of its facts. The deviation principle was expressed as an “intentional misconduct (wilful wrongdoing) where the employee did not act in furtherance of the employer’s business” see Feldman (Pty) Ltd v Mall 1945 AD 733. In the case of Minister of Safety & Security v Jordaan t/a Andre Jordaan Transport 2000 ILJ 2585 2588 D-F the South African Supreme Court of Appeal held that in each case, whether the employer is to be held liable or not must depend on the nature and extent of the deviation. Once the deviation is such that it cannot be reasonably held that the employee is still exercising the functions to which he was appointed or still carrying out some instruction of his employer, the latter will cease to be liable. Whether that stage has been reached is essentially a question of degree.

In this case the fourth defendant entered into this agreement with plaintiff and all the proceeds of the transactions were deposited into his company. Certainly he had ceased to further his employer’s interests. The plaintiff also was passively complicit in this scheme by its conduct. 	It is my finding that the fourth defendant contracted without authority with the plaintiff to his benefit. To that extent the first defendant cannot be held to be liable. The third and fourth defendants were the beneficiaries of this agreement l have no doubt that they should be made to meet this claim. .

Whether or not the third defendant was negligent.

Although there was no written agreement in this case, it is clear that there was an oral agreement of carriage. The onus to prove  proof that the driver of the consignment was negligent or not is on the carrier. It is for the carrier to prove ‘the loss was due to vis major or to damnum fatale, to inherent vice in the goods or to the negligence of the owner of the goods.’ There is no onus on the consignor of goods who brings an action for damages against the carrier to prove how the goods were damaged, lost or destroyed. All he can do is to establish that he handed over the goods in an undamaged condition and that they were damaged when in the custody of the carrier.  See Pohoomull Brothers v Rhodesia Railways 1921 SR 88.

In this case the plaintiff established that the first defendant’s truck driven by its driver the third defendant received cooking oil for delivery to a client. This was not disputed. Munodawafa only said this was not known by the first defendant. The third defendant was the driver of the truck. He did not file a plea. He therefore did not oppose the claim. The plaintiff’s assertion that he was negligent therefore remains unchallenged. The first defendant did not address its mind to this aspect maybe it sincerely believed it was not liable. The fourth defendant too did not address this aspect. The carrier in this case failed to discharge the onus placed on it. It follows then that the third defendant should be held to have been negligent on the day of the accident. Since l have made a finding that the fourth defendant was not within the scope of his employment when he contracted, it was up to the third defendant to satisfy this court that when he drove the truck he was within the scope of his employment. In the absence of evidence the court will grant the claim against the third defendant.

From the forgoing then, the second , third and fourth defendants’ liability is inescapable.

Accordingly the following order is made that,

The plaintiff’s claim is dismissed as against the first defendant with costs

The second, third and fourth defendants  jointly and severally the one paying the other to be absolved be are hereby ordered to pay $35 442.00 for loss of goods.

The second, third and fourth defendants jointly and severally the one paying the other to be absolved be are hereby ordered to pay 4140.00 for  costs incurred in the recovery of goods.

Interest on the amounts set out in paragraphs (2) and (3) at the prescribed rate from the date of summons to the date of payment in full.

Costs of suit.

Honey & Blanckenberg, plaintiff’s legal practitioners

Matsikidze & Mucheche, 1st defendant’s legal practitioners

Nyawo Ruzive Legal Practice, 2nd & 4th defendants’ legal practitioners