Shepande and Company has dragged Copper Harvest Foods Limited, Sabrina’s Farmers Harvest Limited and the State to court claiming damages for breach of agreement and an order directing the defendants to pay K23,110,203 plus interest, as fees for pursuing and collecting a debt.
The law firm laments that they have suffered loss and damage as a result.
They have sued Copper Harvest Foods Limited as the first defendant; Sabrina’s Farmers Harvest Limited as the second defendant; Tapan Kumar Choudhuri as the third defendant, sued in his capacity as Managing Director of the first defendant; Avulanandum Ramesh as the fourth defendant, sued in his capacity as Financial Director of the first and second defendant; and the Attorney General as the fifth defendant.
In a statement of claim filed in the Lusaka High Court, the plaintiffs stated that the first, second, third and fourth defendants employed the plaintiffs to pursue and collect a debt, which stood at K97,222,036, a debt whose principal sum was only K2,680,937 by 2005.
They stated that the said debt was procured by former subsidiaries of ZCCM, namely Konkola Blades Limited and Mufulira Wanderers Limited.
“By a letter dated March 3, 2014 written to the plaintiff and sent via e-mail dated March 14, 2014, the first, second, third and fourth defendants retained the plaintiffs to pursue and collect a debt, which stood at ZMW 97,222,036.00 (rebased amount) as at the date of issue of instructions. The plaintiff will aver that the instructions of March 3, 2014, from the defendants to the plaintiffs herein were to pursue and collect the long-outstanding debt of ZMW 97,222,036.00, a debt whose principal sum was only K2,680,937=96 by the year 2005. The said debt was procured by former subsidiaries of the defunct Zambia Consolidated Copper Mines (ZCCM) namely Konkola Blades Limited and Mufulira Wanderers Limited,” read the statement of claim.
“At the time, the said ZCCM subsidiary procured the debt, in or around the year 2001 to 2003, the principal debt for both companies totalled a paltry K2,680,937=96. By an e-mail dated 15th March, 2014, to the defendant, the plaintiff duly accepted the instructions to pursue and collect the said debt of ZMW 97,222,036.00 with interest.”
The plaintiffs further stated that having accepted the defendants’ instructions, it was agreed that the fees for pursuing and collecting the debt would be 10 per cent of the total debt, plus interest.
The plaintiffs stated that prior to the judgment on assessment, they kept reminding the defendants about the written commitment on the 10 per cent fee for collecting the debt, but the defendants kept assuring them that they were honest people.
“The plaintiffs will aver that between March 13, 2014, to around June 22, 2017, the plaintiffs and the defendants exchanged several e-mails and correspondence, as well as WhatsApp messages, pertaining to instructions and conduct of this matter till judgment on assessment amounting to K313,796,267, plus interest, was procured by the plaintiffs. During the period, the plaintiffs travelled several times to Kitwe, both by air and by road, to prosecute the defendants’ case, and on several occasions spent nights in Kitwe and Ndola,” read the statement of claim.
“Prior to the judgment on assessment, the plaintiffs kept reminding the defendants on several occasions about a written commitment on the 10 per cent fee for pursuing and collecting the debt, but the defendants kept assuring that they would not renege on their commitment and that they were honest people who just needed to speak to the senior member of the Bar who was the referral in order for them to write a firm commitment to the plaintiffs.”
The plaintiffs stated that after seeing that the defendants were being evasive on reducing the agreement on fees in writing, they approached the senior member of the Bar at the time to understand why the clients were being evasive.
They stated that the referral told them that he had advised the defendants that by law, the plaintiffs would not charge them more than 10 per cent and that they should go ahead with the agreement made at the meeting at Pamodzi Hotel in March, 2014.
“The plaintiffs will aver that they went to the defendants to try and obtain the written agreement on several occasions, but as previously, the defendants said they would write upon getting an instruction from the referral as they are not the ones who retained the plaintiffs, but the referral despite their letter of March 3, 2014, which retained the plaintiffs,” read the statement of claim.
The plaintiffs stated that after noticing the evasive nature of the defendants, they wrote a letter informing the defendants that if they did not respond to their letter pegging the fee note at 10 per cent, the plaintiff would take 10 per cent as the agreed fee for pursuing and collecting the debt.
They stated that despite receiving the letter via e-mail, the defendants ignored, failed or neglected to respond to it.
The plaintiffs stated that after they complained to the referral that the defendants were being evasive and elusive to the plaintiffs’ fees commitment, the defendants decided to call a meeting in Kitwe.
“The defendants instead decided to approach the referral with the plaintiffs’ letter for reasons only known to the defendants. When the defendants approached the referral again, he told them for the second time that they should respond to the plaintiff’s letter and make a written commitment to the 10 per cent, which had earlier on been agreed or they could renegotiate a lower percentage if necessary. After the plaintiffs complained to the referral that the defendant were being evasive and elusive to the plaintiffs’ fees commitment, as they had done to one other law firm before, the defendants decided to call a meeting in Kitwe between themselves and the plaintiffs on August 30, 2017,” read the statement of claim.
The plaintiffs disclosed that at the said meeting, the defendants at first denied having retained the plaintiffs and said that the plaintiffs had been retained by the referral, who should be the one to tell them the fees to pay them.
“The meeting was duly held at Finance House in the boardroom of Leasing Finance Company Limited on August 30 aforesaid. Having realised the evasiveness of the defendants and their economy with the truth, decided to record the proceedings of the said meeting. At the said meeting, the defendants at first, denied having retained the plaintiffs and said that the plaintiffs had been retained by the referral, who should be the one to tell them the fees to pay the plaintiffs,” read the statement of claim.
The plaintiffs stated that when they insisted that they had been retained by the defendants in their letters of March 3, 2014, they then proposed to pay 7.5 per cent of total debt, plus interest, as fees of pursuing and collecting the debt as recorded in the audio, despite having agreed at 10 per cent in March, 2014.
“Despite reneging on the 10 per cent, and the plaintiffs having agreed to their proposal of 7.5 percent, the defendant later on gave a condition that 7.5 per cent would only be paid if the debt was collected outside the legally-constituted Compensation Fund Committee, something the plaintiff said was illegal and not possible. Having agreed to the defendants’ proposal of 7.5 per cent aforesaid, the plaintiffs issued a fee note to the defendants in or around March, 2018, amounting to K23,110,203.80, being the net of 7.5 per cent of the total debt after deducting interim fee payments and costs, as awarded by the Court,” read the statement of claim.
The plaintiffs averred that despite having caused this debt to crystallize and having been entered on the government’s data base, the defendants have refused, neglected or ignored to pay the plaintiffs’ agreed fees.
“Instead, the defendants produced a statement of disbursements and interim fees, which they claimed that they had paid all fees to the plaintiffs. The plaintiffs will aver that having noticed the defendant truancy in settling the fee note, wrote to the Attorney General on March 13, 2018, to stop paying the defendants directly, but the said correspondence has not been acted upon, nor replied to hitherto. Further on March 27, 2018, the plaintiffs wrote to the Permanent Secretary, Mr Andrew Nkunika, to stop paying the defendants directly so that they could recover their fees in accordance with the instructions given to us in March, 2014, again the plaintiffs’ letter has not been replied to,” read the statement of claim.
“The plaintiffs will aver that towards the end of March 2018, the chairman and majority shareholder of first and second defendants, one Dr. Rajan Mahtani, heard of the impasse on the plaintiff’s fees and called for a meeting with the plaintiffs. At the meeting aforesaid, Dr Rajan Mahtani assured the plaintiffs that he would call a meeting of the plaintiffs and the third and fourth defendants to resolve the matter of fees amicably in the month of April, 2018, after he returned from abroad. Despite the assurances from Dr. Mahtani of a scheduled meeting to resolve the issue of the plaintiffs fees amicably, such a meeting has not taken place hitherto.”
The plaintiffs stated that as a result of the actions of the defendants, the plaintiffs have suffered loss and damage.
The plaintiffs are now claiming for: A declaration that the plaintiffs have a legitimate expectation to collect the said debt in accordance with the first, second and third defendant’s instructions of March 4, 2014, and be paid their fees as appropriate; and an order directing the fifth defendant to pay the said debt through the plaintiffs as per instructions of the defendants from inception that the plaintiffs must pursue and collect the debt.
They are further claiming for an order directing the defendants to pay the plaintiffs the total fees of K23,110,203.80, plus Interest, thereto arising from interest accruing on the judgment sum of K313,716,207.00, an order directing the Attorney General to attach the debt to the plaintiffs’ fees, damages for breach of agreement, interest, costs and any other relief the court may deem fit.