Justice Abednego Tafa has said it is not the responsibility of the Court to make a determination on the fairness of the P110 million figure demanded by private company Infotrac from Debswana.
Delivering a judgement in favor of Infotrac recently Tafa said while the mining company may have raised reservations on the amount sought, that was not for the court to decide.
“It has been argued, on behalf of the defendant (Debswana) that the alleged agreement and the alleged fee for the consultancy services are highly improbable. I do not believe that the court, in the present case and on the evidence, is qualified to prescribe what is and what is improbable regarding consultancy fees.” Tafa said that was an issue to be negotiated and agreed by the contracting parties. “They would know the industry standard better than the Court.”
The Judge said if the court found it more probable than not that indeed the parties entered into a contract as contended for by Infotrac, the amount involved should not be a barrier to a judgment in favor of the private company.
“There is no doubt in my mind that the sum claimed is a large amount. However, when one has regard to the defendant’s business and stature, there is nothing improbable about the amount of the contract fee now being claimed,” Tafa said.
Infotrac filed a lawsuit against Debswana over an alleged oral consultancy agreement allegedly entered into between themselves and Debswana. The company says it was engaged by Debswana to provide consultancy services to ensure that the late Albert Milton would be appointed as Managing Director and that they would be paid P110 million for their services. The consultancy services involved lobbying and engaging with stakeholders for support.
The company was also engaged to investigate an alleged romantic affair between the late Milton and a junior employee, Candy Godie, following an anonymous tipoff.
Infotrac were appointed to investigate the alleged affair and any favoritism which might have been shown by Milton to Godie in the workplace as a result of the alleged affair. The company carried out the investigation and submitted its report.
The investigations, the Court heard, were instigated by Debswana represented by its executives (Group Head of Security based in Gaborone, Kewakae, and Head of security at Jwaneng, Keitumetse and Senior Human Resource Manager, Mazwigila) and the late Milton himself.
However Debswana argued that the agreement between the executives should not be found to be binding to the diamond company but rather to the individual employees (all three of who have since been sacked) because due process was not followed.
Debswana argued that should the court find that executives did enter into the contended contract with the Infotrac, such contract would be binding on the executives to the exclusion of the mining company. Tafa however invoked the ‘Turquand Rule’ which stipulates that each outsider contracting with a company in good faith is entitled to assume that the internal requirements and procedures have been complied with.
Tafa said the company would consequently be bound by the contract even if the internal requirements and procedures have not been complied with. In practice, the judge further explained, a company will usually enter into a contract with outsiders through its officers.
“The Indoor Management Rule allows outsiders dealing with a company to make assumptions about the international consistency of decisions made by a company with its rules. The Indoor Management Rule was first articulated in the English case of Royal British Bank V TURQUAND (156) 119 ER 86, and has not only been adopted in our courts but has since 2007 been codified in our law,” the judge said.
Tafa delivered an order in favor of Infotrac in the sum of P110 million plus interest at 10% per annum from the date of the demand for payment.