This is an appeal against the whole judgment of the High Court handed down on 24 September 2018 wherein it granted the first respondent's claim against the appellant.

The following facts are common cause;

The second respondent, Bernard Chiswa (“Bernard”), entered into a car hire agreement with the first respondent, Car Rental Services (Private) Limited (“Car Rental Services”), in October 2015. In terms of the agreement, he was issued with a motor vehicle, a Ford Everest, and was expected to make payments as per the vehicle hire agreement. He failed to do so until the motor vehicle was withdrawn from him.

The first respondent sought the services of the police for the second respondent to return the motor vehicle by laying criminal charges against him.

The appellant, sister to the second respondent, offered to settle the debt and the criminal charges were withdrawn. She signed an acknowledgement of debt and a payment plan. In due course, she withdrew the offer to settle the debt. The first respondent thereafter caused summons to be issued against the appellant and Bernard, jointly and severally, claiming the sum of US$13,868=90.

The appellant applied for the appointment of a curator ad litem on behalf of Bernard on the grounds that he was not of sound mind. On 17 March 2017, a provisional order was granted and a curator ad litem was appointed.

The matter was not prosecuted further.

As a result of the provisional appointment of a curator ad litem, the first respondent withdrew its claim against Bernard and proceeded against the appellant.

Car Rental Services sued the appellant, and Bernard, jointly and severally, for the payment of US13,868=90 for the rental charges due to it. The basis for the claim, in respect of Bernard, was that he had entered into an agreement with Car Rental Services for the hire of a motor vehicle and had failed to pay in terms of the agreement.

In respect of the appellant, it was averred that she had agreed “to take over the debt due by the first defendant (Bernard) and had assumed full responsibility of it which undertaking the plaintiff (Car Rental Services) agreed and accepted (sic).”

In their joint plea the appellant and Bernard disputed liability.

Bernard pleaded that he did not have the requisite mental capacity to enter into a contract. The appellant put in issue the validity of the acknowledgement of debt she signed on the basis that the initial agreement, which gave rise to the acknowledgement of debt, was void ab initio.

1. Whether or not the agreement entered into between Bernard and Car Rental Services was valid.

2. Whether the obligation assumed by the appellant, in an acknowledgement of debt and payment plan, dated 2 March 2016, is valid and binding.

Regarding the first issue, the court found that the agreement of sale between Car Rental Services and Bernard was invalid for the reason that he was not compos mentis at the time he entered into the contract.

In respect of the second issue, the court a quo quoted from the declaration the basis of the appellant's liability as follows:

“The second defendant (appellant) herein agreed, on 2 March 2016, to take over the debt due by the first defendant (Bernard) and assumed full responsibility of it which undertaking the plaintiff agreed and accepted.”

The court found that the validity or otherwise of the agreement between Car Rental Services and Bernard is irrelevant.

The appellant, after being advised of how investigations proceeded in respect of mentally incapacitated persons, offered to pay the debt to avoid the incarceration of her brother.

It opined that the debtor was replaced and that it was a case of delegation. It defined delegation as a form of novation in which, by agreement between all parties concerned, a third party is introduced as a debtor in substitution of the original debtor, who is discharged. It further opined that the new agreement was not dependent on the validity of the agreement between Car Rental Services and Bernard. It, therefore, found the appellant liable and made an order that she pays the respondent the amount due in terms of that agreement.

Aggrieved by this decision, the appellant noted an appeal to this Court seeking an order reversing the decision of the court a quo.

The appellant attacks the judgment of the court a quo on the following grounds: I quote these verbatim;

“1. The Honourable court a quo erred when it found, as it did, that the second defendant was liable to the plaintiff in the sum of US$13,868=90 with interest at the rate of 3.5 percent from 1 April 2016 after having made the finding, as she did, that the agreement between the plaintiff and the first defendant was invalid due to his mental incapacity to contract.

1.1 For the stronger reason that once a finding was made that the initial agreement was null and void, the subsequent agreement, which purported to replace the non-existent agreement, was itself null and void, it being premised on a nullity.

2. The Honourable court a quo erred at law when it found, as it did, that the parties had novated the initial agreement by delegation.

2.1 For the stronger reason that novation by delegation requires agreement of all parties to the initial agreement, which the first defendant, in his mental state, could not possibly give. To that end, there was no novation to talk about.

3. The Honourable court a quo erred at law when it concluded, as it did, that the plaintiff had sued the second defendant based on the novated agreement when the summons and declaration clearly show that the defendants were sued jointly and severally with one paying the other to be absolved.

3.1 For the stronger reason that if the plaintiff was suing the second defendant based on the subsequent agreement, it would not have sued the first defendant or demanded judgment against them jointly and severally, and, more important, it would have been apparent from the pleadings.

4. The court a quo erred when it found, as it did, that the second defendant was liable for payment of anything or at all when regard is had to the fact that she unilaterally offered to pay the debt and subsequently unilaterally withdrew the offer which fact was not disputed by the plaintiff.”

Counsel for the appellant submitted as follows;

The court a quo could not competently come to the conclusion that there was a delegation. Delegation is a novation which pre-supposes that there is a pre-existing agreement which is binding - which was not the case in this matter. It found that the agreement between the respondent and Bernard was not binding. No rights or obligations could be transferred from the agreement. It could not be novated. In any event, for delegation to take place, all the parties have to agree. This could not competently take place as when the acknowledgement of debt was signed, Bernard was admitted into a mental institution. The acknowledgement of debt is a unilateral document. It cannot be an agreement which falls in the confines of delegation.

Counsel for the respondent filed extensive heads of argument where he advanced argument that there was a compromise in the circumstances of this matter. In the last paragraphs of the heads of argument, under the heading: “Whether the court order can be supported on grounds which were rejected by the trial court” he advanced argument that when the second respondent signed the Acknowledgement of Debt an expromissio occurred. He concluded by submitting that the doctrine of compromise was applicable in the circumstances of the present matter. Alternatively, the judgment of the court can be supported on the basis of expromissio.

In his submissions before this Court, he totally abandoned the argument in respect of the doctrine of compromise.

His submissions were as follows:

The appellant interposed herself as between the first and second respondents. This is where an outsider intervenes between two parties and undertakes to satisfy that which is demanded by one party from the other party. Such an undertaking is independent of the underlying obligations or issues between the parties. He relied on the authority of Baker NO vs Total South Africa (Pvt) Ltd 1990 (3) SA 159 for this proposition. It is a step through which a novation can be achieved. The one who originally owed can plead that the debt was extinguished by the interceder. This arrangement does not depend on whether the underlying agreement was valid or not.

On being engaged by the court regarding the issue of the doctrine of compromise, he conceded that there was no involvement of Bernard when the new agreement was entered into. He could not, therefore, argue, with confidence, that a proper compromise was concluded when the original debtor was not involved. He could not argue that the acknowledgement of debt was a compromise but rather that it was an expromissio.

In rebuttal, counsel for the appellant took note of the concession made that there was no compromise in the circumstances of this matter.

On the doctrine of expromissio, he relied on Black's Law Dictionary, 2nd ed, where it was defined as an act in which a creditor accepts a new debtor who becomes bound instead of the old debtor with the latter being released. It is a species of novation. The underlying agreement has to be valid. The creditor must accept the new debtor.

Nothing was advanced in this matter to show that the new debtor was accepted by the creditor. The first respondent went on to sue both the old and the new debtor jointly and severally.

With the argument regarding the doctrine of compromise having been abandoned, the issue for determination is whether the doctrine of expromissio applied to the circumstances of this matter.

An expromissio is a type of novation by which a creditor accepts a new debtor in place of a former one, who is then released; Black's Law Dictionary, 8th ed. 2004…,..

The new debtor, known as an expromissor, becomes solely liable for the original debtor's debt. Thus, an expromissio has been described as an assumption of liability for the debt of another; See Total South Africa (Pty) Limited v Bekker NO 1992 (1) SA 617.

An expromissio has the following characteristics:-

(i) It occurs with the consent of the creditor.

(ii) At the instance of the new debtor.

(iii) The effect being that the old debtor is released from the obligation.

An expromissor differs from a surety in that a surety is bound together with his principal to the creditor. See Bouvier Law Dictionary, 6th ed, CHILDS & PETERSON, Philadelphia, 1856…,. Since an expromissio is a form of novation, it is dependent on the validity of the principal agreement.

An expromissio was defined in Total South Africa (Pty) Limited v Bekker NO 1992 (1) SA 617 where the court, in contextualizing the concept of intercessio, quoted with approval the following extract from WESSELS' Law of Contract in South Africa, 2nd edition..,:

"3778. There are several ways in which a person, without being compelled to do so by law, may intervene in a contract between two parties ob maiorem creditoris securitatem. The Roman jurists called this intervention an intercessio on the part of the stranger to the contract ('per intercessionem aes alienum suscipiens' (D.14.3.19.3). 'Se medium inter debitorem et creditorem interponere' (Voet, 16.1.8)).3779.

3779. The term intercession is a convenient one to denote the intervention of one person (intercessor) in the obligation of another either by way of substituting or adding a new debtor (Nov., 4.1; C.8.40 (41).19).

3780. The stranger may either intervene by contracting with the creditor in such a way that the original debtor is completely liberated, or else he may promise the creditor to become liable for the debt, the original debtor continuing to remain bound.

In the former case, called expromissio by the glossators, there is a complete novation - the old debtor and intercessor are liable, they may either both be principally bound to the creditor or else the debtor may be principally liable, whilst the intercessor is only bound in subsidium, ie., in case the creditor cannot obtain payment from the principal debtor."…,.

An expromissio is, therefore, a form of intercessio.

Intercessio is the general act of assuming liability for another person's debt by contract with his creditor. It can either be privative or cumulative depending on the extent of intervention.

With privative intercessio, the intercessor takes upon himself an existing obligation of a debtor thereby liberating the debtor of his obligations in the principal agreement. Thereafter, the debtor can, if sued, plead that the debt was extinguished by the intercession of the third party. Such is the case of an expromissio.

While, with cumulative intercessio, the intercessor, together with the original debtor, become principally bound to the creditor as in cases of suretyship; see SMITH et AL, A Dictionary of Greek and Roman Antiquities, 1890.

Since an expromissio is a species of novation, the principles applicable to novation are apposite in determining the fate of an expromissio where the original agreement is invalid.

In Mupotola v Southern African Development Community SC07-06 ZIYAMBI JA made the following pertinent remarks regarding novation…,:

“Novation means replacing an existing obligation by a new one, the existing obligation being thereby discharged; see, The Law of Contract in South Africa, Third Ed, by R.H. CHRISTIE at p498.

The above definition pre-supposes that both the existing obligation and the new one arise out of valid contracts.

'When parties novate, they intend to replace a valid contract by another valid contract.' See Swadif (Pvt) Ltd v Dyke 1978 (1) SA 928 (A) at 940 quoted by CHRISTIE in the Law of Contract in South Africa, supra.

The starting point, therefore, in determining this issue is to consider whether the first agreement constituted a valid contract.

This being so, the first agreement was a non-event and there could be no novation of a contract which did not exist...,.”...,.

It is evident that the validity of the former obligation determines the validity of an expromissio.

In line with the reasoning adopted by the court in Mupotola v Southern African Development Community SC07-06, it would mean that the original agreement has to be valid for an enforceable expromissio to come into existence.

An expromissio cannot, therefore, stand on an invalid principal agreement.

The court, in Hamilton v Van Zyl 1983 (4) SA 379 (ECD)…, in distinguishing between novation and compromise stated:

“In pointing out the difference between novation and compromise (transactio) WESSELS on The Law of Contract in South Africa, 2nd ed. Vol. II para. 2458 states:

'There is a great similarity between transactio and novation, and, as a rule, the principles which apply to the latter apply to the former. (Voet 46.2.3).

There is, however, this difference between the two;

When parties novate they intend to replace a valid contract by another valid contract, and, if therefore the novated contract is invalid, the novating contract is, as a general rule, of no effect. If, however, a claim is made upon a contract, about the validity of which the defendant has a doubt, and a transactio follows, the defendant cannot upset the compromise on the ground that the agreement which was compromised was in fact invalid.'”…,.

Consequently, the principal agreement has to be valid for a legally enforceable expromissio to ensue. Where the initial agreement is invalid, the subsequent contract is of no force and effect.

The remarks of LORD DENNING, in MacFoy v United Africa Co Ltd [1961] 3 All ER 1169 (PC)…, to the effect that nothing can ensue from a nullity, apply.

The first respondent, in paragraph 36 of the Heads of Argument, sought to argue as follows:

“The undertaking by the appellant was based on the appreciation that second respondent was liable to first respondent such liability exposed the second respondent to a potential detention.

On the appellant's part, the undertaking was an overture to the first respondent to stop the process that might lead to the second respondent detention. Rather, the undertaking was made on the basis of the appellant's belief that second respondent might not survive detention in a mental institution. It was motivated by the desire to protect the second respondent; it cannot be invalidated by the same condition that motivated its being made.

What the appellant did, in her undertaking, was to independently assume an obligation for the payment of money in favour of the plaintiff. It therefore is of no consequence if the second respondent was under a mental incapacity when he took the plaintiff's vehicle in terms of the rental agreement.”

All he has succeeded in doing is clouding an otherwise very clear issue.

Once the court a quo made a finding that the agreement between the first respondent and Bernard was void, no expromissio can ensue. Expromissio is a species of novation which entails the replacing of an existing obligation by a new one.

In casu, the court a quo having found that the original agreement was void, there was no obligation in existence and therefore the appellant could not intervene or intercede in a non-existent obligation.

Further, as is clear from the summons, the second respondent was not released as a debtor by the alleged intercession by the appellant. The first respondent sued both the original debtor and the intercessor jointly and severally in terms of the original agreement and in terms of the new agreement.

In an expromissio, the debtor is liberated of his obligations in terms of the original agreement. The debt is extinguished by the intercession and he cannot, therefore, be sued on the basis of that debt. The suit against both the intercessor and the original debtor also demonstrates that the creditor, the first respondent, had not accepted the new debtor in the place of the former one.

As is clear from the above, the first respondent did not manage to establish that an expromissio ensued. He abandoned the argument regarding compromise. The appeal has merit and must succeed. There is no basis why costs should not follow the cause.

In the result, I will make the following order:

1. The appeal succeeds with costs.

2. The judgment of the court a quo be and is hereby set aside and substituted with the following:

“The plaintiff's claim be and is hereby dismissed with costs.”

The plaintiff in this matter claims the sum of US$24,100 as special damages, being loss of profits arising from an alleged breach of contract by the defendants.

It also claims restitution of US$10,000 paid as a deposit to the first defendant under the same contract.

The defendants deny any breach on their part and allege that it was in fact the plaintiff that acted in breach of contract.

Wayne Victor Moss is the Chief Executive Officer of the plaintiff company which, together with CCC Pigs (Pvt) Ltd, is a subsidiary of Colcom Foods Limited. He testified as follows:

On the 18th of January 2010, he signed the Agreement in casu with the defendants. In essence, the Agreement was for the sale of 500 tons of maize (at US$235 per ton) for a total purchase price of US$117,500. The maize was to be sourced by the first defendant from the Grain Marketing Board (the GMB).

On the same date, the second defendant signed a contract of suretyship guaranteeing the delivery of maize in terms of the Agreement. He said that the first defendant had a credit facility with the Grain Marketing Board (GMB) for 2,000 tons.

On the 21st of January, he withdrew a total of US$100,000 from the bank. He paid the agreed deposit of US$10,000 to the second defendant and then proceeded with him to the Grain Marketing Board (GMB) with US$90,000 in cash.

The Grain Marketing Board (GMB) was not aware of the transaction and had no release orders in the name of the first defendant. He was told by the GMB's Credit Controller (Mawanza) that he could obtain only 300 tons of maize at a higher price of US$300 per ton if he paid the US$90,000 into the first defendant's account with the GMB. This was because the first defendant's facility was for a maximum of 300 tons and because its account with the GMB was in debit at that time.

The second defendant then undertook to resolve the matter the following day.

The witness subsequently visited the Grain Marketing Board (GMB) on four consecutive days and was given the same explanations by Mawanza. He then met the GMB Marketing Manager (Mandizvidza) who cautioned him against dealing with the first defendant. Mandizvidza later furnished a letter confirming the first defendant's credit standing with the GMB at the relevant time.

The plaintiff did not proceed with the transaction as it became evident that the first defendant did not have the capacity to deliver as agreed.

The Agreement was cancelled on the 2nd of February and this was confirmed by the plaintiff's lawyers in their letter of the 4th of March to the first defendant. The defendants offered to restitute the US$10,000 deposit in January and October 2010, but have not made any payment to date.

The plaintiff had a contract with CCC Pigs (Pvt) Ltd, signed immediately after the Agreement with the defendants, for the onward supply of 500 tons of maize at a price of US$290 per ton. This represented a profit margin of US$55 per ton equating to a total profit of US$22,500. The plaintiff had arranged for the transportation of the maize at a cost of US$200 per truck. In order to meet its contract with CCC Pigs the plaintiff had to order 508 tons of maize from South Africa at a price of US$317 per ton.

Under cross-examination, the witness conceded that the deposit of US$10,000 was not paid on signature of the Agreement but on the 21st of January and that the sum of US$90,000 was not deposited into the GMB's bank account as agreed. The payments were a few days late and not strictly in accordance with the terms of the Agreement. However, this was not unreasonable in the circumstances of the transaction and the second defendant had accepted the delays. Moreover, the witness did not have the Grain Marketing Board's (GMB) bank account details.

Odson Dzanga is the plaintiff's Financial Manager. He accompanied Wayne Victor Moss to the Grain Marketing Board (GMB) on the 22nd of January 2010. He confirmed that the GMB would only have released 300 tons of maize upon payment of the US$90,000 in cash. He added that the first defendant's account with the GMB was in arrears standing at about US$54,000 as at the 8th of January 2010.

Emson Mandizvidza has been employed by the Grain Marketing Board (GMB) as its Marketing Manager since 2003. His duties include checking the credit facilities of customers, and, in conjunction with the Credit Controller, authorising release orders on credit sales. He corroborated the testimony of Wayne Victor Moss and Odson Dzanga regarding their visit to the GMB on the 22nd of January and his discussion with Moss in the presence of the second defendant. He also confirmed the contents of his letter of the 13th of May 2010 concerning GMB prices and the first defendant's credit status.

Between the 18th and 22nd of January 2010, the first defendant's credit facility was on hold because of its outstanding arrears of US$54,000, and, in any event, that facility did not enable it to buy 500 tons of maize from the Grain Marketing Board (GMB). At that time, the first defendant's credit facility was limited to 300 tons per month.

In practice, a credit customer wishing to increase its credit limit would have to apply, in writing, and the application would then be assessed by the Risk Management Committee (the RMC) which meets once a week.

In December 2009, the first defendant applied to increase its credit limit to 2,000 tons per month. This application was turned down by the Risk Management Committee (RMC) before the 18th of January. As at that date, there was no application from the first defendant to increase its credit limit. Even if it had lodged an application, this would only have been processed the following week and it would not have been possible to approve any increase on the 22nd of January. The Grain Marketing Board (GMB) sued the first defendant for the outstanding US$54,000 in April 2010 in Case No. HC2191/10. At the present time, the first defendant is no longer a credit client of the Grain Marketing Board (GMB).

Wanda van den Bergh is a grain broker. Her evidence was that she introduced Wayne Victor Moss to the second defendant in January 2010. The agreement between them was for the first defendant to supply maize to the plaintiff for onward sale to CCC Pigs (Pvt) Ltd. She was not aware of the first defendant's credit facility with the Grain Marketing Board (GMB).

Nelson Mahupete, the second defendant, is the Chairman and Managing Director of the first defendant.

His evidence was that in December 2009 he applied to the Grain Marketing Board's (GMB) credit controllers (Mawanza and Pfumbidza) to increase the first defendant's credit facility from 300 tons to 2,000 tons per month. They agreed to increase the facility to 1,500 tons - provided the outstanding debt of US$54,000 due to the GMB was cleared.

After the Agreement was concluded with the plaintiff, Wayne Victor Moss only paid the deposit of US$10,000 after three (3) days. Moreover, he did not effect transfer of the US$90,000 into the Grain Marketing Board's (GMB) account but arrived at the GMB offices with the cash equivalent. He then declined to pay that amount towards the first defendant's account with the GMB. If he had done so, the first defendant would have fulfilled the contract to deliver 500 tons of maize.

As regards the debt of US$54,000 owed to the Grain Marketing Board (GMB), the first defendant has already paid US$33,250 towards this and the balance is to be cleared as per an agreed payment plan.

Under cross-examination, the second defendant conceded that the 500 tons of maize in question was for pig feed but denied that it was intended for CCC Pigs (Pvt) Ltd.

He disputed the averment to that effect made by Mandizvidza in his statement to the CID Serious Fraud Squad on the 12th of February 2010.

As regards the release orders for 500 tons of maize, he admitted that he did not have them in his possession on signature of the Agreement on the 18th of January or at the Grain Marketing Board (GMB) offices on the 21st of January.

He has been charged with fraud in respect of the present contract. The criminal trial has commenced and is yet to be completed.

Vavavirayi Mawanza has been the Grain Marketing Board's (GMB) Credit Controller since January 1999.

His evidence was that Grain Marketing Board (GMB) release orders are first signed by him and then by the Marketing Manager before they are issued. In August 2009, the first defendant applied for a credit facility, and, in September, it was granted a facility for 150 tons per fortnight or 300 tons per month. In December 2009, the GMB released a total of 268 tons of maize to the first defendant. The latter then applied for a facility of 2,000 tons per month. On the 18th or 19th of December, he verbally advised the second defendant that he could only approve a facility of 1,500 tons on condition that the first defendant paid an additional US$200,000 towards its account with the GMB.

As at the 8th of January 2010, the first defendant's account was in debit of about US$54,000. On the 22nd of January 2010, Wayne Victor Moss came to the Grain Marketing Board (GMB) wanting to pay US$90,000 into the first defendant's account. The witness refused his request and said that the first defendant should make the payment itself. Moreover, it would not have been possible for Moss to have paid the GMB through its own bank account.

In his statement to the CID Serious Fraud Squad, dated the 15th of February 2010, he declared that “the accused (second defendant) has a buying limit of 150 tonnes at a time.”

There was no mention of an increased limit of 1,500 tons having been conditionally approved.

Tatenda Pfumbidza is an Assistant Credit Controller with the Grain Marketing Board (GMB).

He confirmed that an existing credit client must apply, in writing, for any increase in its credit facility and that, if its application is approved, the Marketing Department and the client must be advised of the increased limit in writing.

When the first defendant applied for an increased limit of 2,000 tons, in December 2000, it was told to make an additional payment of “more than US$100,000” towards its account with the Grain Marketing Board (GMB). This application was not approved because the additional payment was not made.

In February 2010, the second defendant approached him for a credit reference. He then wrote two reference letters dated the 5th and 8th of February. He conceded that the letters were silent as to the conditions of release and the tonnage that could be released to the first defendant. Moreover, he accepted that the letters were not addressed to the plaintiff or to Wayne Victor Moss and that they were written after the events giving rise to the plaintiff's action in casu.

It is a fundamental premise of every contract that both parties will duly carry out their respective obligations. See Green v Lutz 1966 RLR 633; ESE Financial Services (Pty) Ltd v Cramer 1975 (2) SA 805 (C)…,.

As is explained by CHRISTIE: Business Law in Zimbabwe…,.:

“There is a presumption that in every bilateral or synallagmatic contract, i.e. one in which each party undertakes obligations towards the other, the common intention is that neither should be entitled to enforce the contract unless he has performed or is ready to perform his own obligations….,.

…,. Conversely, a party who has caused the other to commit a breach cannot found a claim on the breach…,.”

In terms of clause 3 of the Agreement in this case, the plaintiff undertook to pay a deposit of US$100,000 “upon the signing of this agreement”, US$90,000 into the bank account of the Grain Marketing Board (GMB) and US$10,000 in cash to the defendants.

It is common cause that Wayne Victor Moss did not pay the deposit of US$10,000 and did not transfer the sum of US$90,000 into the Grain Marketing Board's (GMB) bank account upon signature of the Agreement. Instead, he paid the US$10,000 deposit only on the 21st of January, and, on the same date, tendered US$90,000 in cash to the GMB.

It is therefore clear that the plaintiff did not perform its obligations strictly in accordance with clause 3 of the Agreement.

However, it is equally clear that the defendants accepted the late payment of the US$10,000, and, furthermore, they actively attempted to pressurise Wayne Victor Moss to pay the US$90,000 in cash to the Grain Marketing Board (GMB), particularly as it was not practically possible for him to make that payment into the GMB's bank account.

At that stage, he was obviously willing and able to make both payments in performance of the plaintiff's obligations.

Given the attitude and conduct of the parties, the delay of three (3) days in tendering the payments and the departure in the mode of payment to the Grain Marketing Board (GMB) were not material to the plaintiff's undertakings under the Agreement; and, although the plaintiff did not strictly comply with its payment obligations, such non-compliance was accepted by the defendants.

In short, they positively acquiesced in that non-compliance and are therefore estopped from raising it as a defence to the plaintiff's claim.

Turning to the defendants' undertakings, these were spelt out in clauses 4 to 7 of the Agreement.

(a) Firstly, once the plaintiff had paid the deposit, the first defendant was obliged, under clause 4, to cede its release orders for 500 tons of maize “which it has already received or will shortly receive from GMB.”

(b) Secondly, after paying the deposit, the plaintiff was authorised, by clause 5, “to immediately upload the maize from GMB.”

(c) Thirdly, by virtue of clause 6.1, the first defendant warranted that “it does currently, or it will, by Tuesday 19 January 2010, have a release order or release orders in its name from GMB for 500 tons of maize.”

(d) Finally, clause 7.1 entitled the plaintiff to cancel the contract “should the seller not have a release offer [sic] or release offers [sic] in its name by Friday 22 January 2010.”

It is submitted, for the defendants, that the undertakings stipulated in the Agreement are dubious in their meaning. Consequently, in as much as the Agreement was drafted by the plaintiff's lawyers, its provisions must be construed strictly as against the plaintiff on the one hand and leniently as against the defendants on the other.

While this may be the general purport of the so-called contra proferentem or contra stipulatorem rule of interpretation, it is trite that this rule may only be invoked where the provision to be applied is ambiguous in its meaning or effect. See CHRISTIE: Business Law in Zimbabwe…,.

In the instant case, I do not perceive any such ambiguity in the terms of the Agreement. In my view, the combined effect of clauses 4 to 7 of the Agreement was this:

The defendants warranted that they either had the requisite release orders or would have them in their possession by the 19th of January; they undertook to cede the release orders to the plaintiff upon payment of the stipulated deposit; the plaintiff would then take delivery of 500 tons of maize; and, in the event that the defendants did not have the release orders by the 22nd of January, at the latest, the plaintiff was entitled to cancel the Agreement.

The test for determining the repudiation of a contract by way of anticipatory breach was expounded by NIENEBAR JA in Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd 2001 (1) SA 581 (A)…, as follows:

“…, the emphasis is not on the repudiating party's state of mind, on what he subjectively intended, but on what someone in the position of the innocent party would think he intended to do; repudiation is, accordingly, not a matter of intention, it is a matter of perception.

The perception is that of a reasonable person placed in the position of the aggrieved party. The test is whether such a notional reasonable person would conclude that proper performance (in accordance with a true interpretation of the agreement) will not be forthcoming. The inferred intention accordingly serves as the criterion for determining the nature of the threatened actual breach.

…, due to the co-contractant's repudiation, the innocent contractant is excused from any steps that he must take in preparation for his own performance…,. In these circumstances, the purchaser will not fall into mora by failing to tender performance…, as long as he signifies his willingness to perform.”

Similarly, LORD WRIGHT, cited with approval in Chinyerere v Fraser N.O. 1994 (2) ZLR 234 (H)…, observed as follows in Ross T. Smyth & Co. Ltd v T.D. Bailey, Son & Co. [1940] 3 All ER 60 (HL)…,.:

“I do not say that it is necessary to show that the party alleged to have repudiated should have an actual intention not to fulfil the contract. He may intend in fact to fulfil it, but, may be determined to do so only in a manner substantially inconsistent with his obligations, and in no other way.”

The evidence before the Court shows that the first defendant did not have the requisite release orders from the Grain Marketing Board (GMB), either by the 19th or the 22nd of January, nor did it hold a credit facility with the GMB for 500 tons of maize at that time. Conversely, on the 21st of January, the plaintiff had paid the cash deposit of US$10,000 to the defendants and was prepared to pay the remaining deposit of $90,000 in cash to the GMB.

It follows that the defendants were patently in breach of the warranty contained in clause 6.1, and, because of their evident inability to fulfil the contract timeously, they were in anticipatory breach of their obligations under clauses 4 and 5 to cede the release orders and deliver 500 tons of maize. Consequently, the plaintiff was entitled to withhold any further payment under the Agreement.

At common law, an anticipatory breach ordinarily entitles the innocent contractant to cancel the contract. As is observed by KERR: The Principles of Contract Law (6th ed.)…,.:

“…, repudiation before the due date for performance by a party prospectively in default constitutes anticipatory breach of contract on which the aggrieved party may take action if he so elects.”

In the instant case, clause 7.1 of the Agreement expressly allowed the plaintiff to cancel the contract in the event of the first defendant's failure to have the requisite release orders in its name by the 22nd of January 2010.

Thus, as at that date, the plaintiff was entitled to cancel on two separate grounds, viz;

(i) The defendants' actual breach of warranty as well as;

(ii) Their anticipated failure to cede the release orders and deliver the stipulated tonnage of maize in breach of clauses 4 and 5 of the Agreement.

In the event, the plaintiff lawfully cancelled the Agreement on the 2nd of February 2010, as was confirmed by its lawyers in their letter of the 4th of March 2010 to the defendants.

Clause 7 of the Agreement stipulates the plaintiff's remedies in the event of cancellation.

Both counsel for the plaintiff and counsel for the defendants have opted not to proffer any enlightenment on what was intended by the parties, presumably because that intention is not easily discernible from the vague and seemingly contradictory elections set out in this clause.

It then becomes necessary to consider the plaintiff's rights and remedies at common law.

It is trite that an aggrieved contractant is entitled to claim damages arising from his co-contractant's breach of contract - including any breach of warranty.

As was stated in Evans & Plows v Willis & Co. 1923 CPD 496…,:

“In our law, if an express warranty…, has been given by the seller and this turns out to be untrue an action for damages for breach of contract lies.”

The plaintiff in casu has elected not to claim the expenses actually incurred by it in replacing the 500 tons of maize at US$317 per ton from the alternative source in South Africa. The difference in prices alone would derive a net loss of US$158,500 less US$117,500 amounting to US$41,000.

Instead, the plaintiff claims a lesser sum of US$24,100 as special damages, based on its anticipated loss of profits consequential upon the defendants' breach of contract. This amount is calculated as follows: the gross profit of US$145,000 that the plaintiff would have received from its contract with CCC Pigs (Pvt) Ltd less US$120,900, being the contract price of US$117,500 under the Agreement plus the notional cost of transport totalling US$3,400.

In United Air Charters (Pvt) Ltd v Jarman 1994 (2) ZLR 341 (S)…, cited with approval in Collective Self Finance Scheme v Asharia 2000 (1) ZLR 472 (S)…, GUBBAY JA described special damages as follows:

“Special damages…, are ordinarily regarded in law as being too remote to be recoverable unless, in the special circumstances attending the conclusion of the contract, it can be deduced that the parties actually or presumptively foresaw that they would probably flow from its breach (and thus, that it was within their contemplation).

…,. To ascertain what the parties actually contemplated, or may be supposed to have contemplated, it is of assistance to look to:

(a) The subject matter and terms of the contract itself;
(b) The special circumstances known to both parties at the time they contracted.”

The evidence in this case shows that the defendants were aware of the plaintiff's onward contract with CCC Pigs (Pvt) Ltd and the contemplated profit that the plaintiff would accrue from that contract. They therefore foresaw, either actually or presumptively, that the plaintiff would suffer loss of profits in the event of their breaching their undertakings in terms of the Agreement. They are accordingly liable for the special damages claimed by the plaintiff.

In the event of non-delivery of the goods sold under a contract, the right of the aggrieved party to claim restitution from the defaulting party is ordinarily unchallengeable.

As was held by KORSAH JA in Nissan Zimbabwe (Pvt) Ltd v Hopitt (Pvt) Ltd 1997 (1) ZLR 569 (S)…,:

“Whether the wrongful act arises out of contract or tort, where there has been actual pecuniary loss which is capable of precise quantification, the rule which the law adopts is restitutio in integrum – the injured party is entitled to claim to be placed back in the same position as he would have been in had it not been for the defendant's wrongful act.”

In the present matter, the plaintiff's right to recover the deposit paid in the event of cancellation is also affirmed in clause 7 of the Agreement, notwithstanding the ambiguities in that clause that I have earlier referred to.

The evidence clearly shows that the plaintiff paid US$10,000 as a deposit to the defendants and that the latter gave nothing in return for that amount.

Indeed, the defendants specifically acknowledged their liability to refund the deposit in the subsequent dealings between the parties and their respective lawyers.

It follows that there is no defence to the plaintiff's right to restitution and that this claim must also be upheld.

The contract of suretyship attached to the Agreement, which contract was admittedly signed by the second defendant, binds him “as surety and co-principal debtor…, for the due performance by [the first defendant] of all its obligations under the agreement.”

Again, “in the event of [the first defendant] failing to perform any of its obligations under the said agreement”, the second defendant explicitly accepted “liability for the balance of its indebtedness and for all interest, costs, damages, losses and expenses which [the first defendant] might be liable for in terms of the said agreement.”

Having regard to these unambiguous provisions, I am unable to comprehend why it is necessary to determine the second defendant's status as surety under the Agreement or the joint and several liability of both defendants thereunder.

It is undeniably clear that the second defendant stood as surety for the first defendant, and, thereby, rendered himself liable for the full performance of the first defendant's obligations under the Agreement. It is also unquestionable that the first and second defendants are jointly and severally liable for the damages and legal costs incurred by the plaintiff.

As a rule, the courts are loathe to accede to a prayer for an award of costs beyond the ordinary scale. However, this rule may properly be departed from where the unsuccessful party's conduct has been particularly unreasonable and reprehensible; for instance, by obstinately refusing to resolve the dispute amicably and inexpensively. Such vexatious conduct fully justifies an award of costs on a higher scale in favour of the successful party. See Borrowdale Country Club v Murandu 1987 (2) ZLR 77 (H); Chioza v Sawyer 1997 (2) ZLR 178 (S); NUST v NUST Academic Staff & Others 2006 (1) ZLR 107 (H).

The evidence before the Court shows that this matter could, and should, have been resolved in January or soon thereafter. It was obvious, at that stage, that the defendants were unable to fulfil the terms of the Agreement, largely because of their own default in sustaining their credit account with the Grain Marketing Board (GMB). In light of their failure to deliver under the Agreement, there should have been no question of their liability to refund the deposit of US$10,000 to the plaintiff. Their exposure to an additional claim for damages might also have been averted had they restored that deposit or demonstrated their preparedness to restitute. Their recalcitrance was simply designed to delay and frustrate the plaintiff and compel it to seek recourse before this Court at considerable legal expense.

I am amply satisfied that they should recompense the plaintiff through a punitive award of costs.

In the result, it is ordered that judgment be entered in favour of the plaintiff as against the defendants, jointly and severally, the one paying the other to be absolved, for:

(i) Payment of the sum of US$24,100 as special damages for loss of profits;

(ii) Payment of the sum of US$10,000 as restitution;

(iii) Interest on the aforesaid amounts at the prescribed rate calculated from the date of judgment to the date of full and final payment;

(iv) Costs of suit on a legal practitioner and client scale.

This is an appeal against the judgment of the High Court granting an application for specific performance lodged by the first respondent against the appellants. Apart from granting the relief sought, including the payment of damages in the alternative, the court a quo also ordered the appellants to pay costs of suit on an attorney and client scale.

The first respondent is an association of residents of the Knowe Housing Development based in the town of Norton. These residents purchased Stands on the development site from the first appellant whose business is to develop and sell housing Stands.

The second appellant is apparently the only active director of the first appellant.

The second respondent is the Norton Town Council. It did not appear at the hearing of this appeal, having filed heads of argument indicating that it would abide by the decision of this Court.

The first appellant, as the owner and seller of Lot 2 of Knowe Suburb, entered into sale agreements with the first respondent's members in 1998 (Phase 2) and later in 2003 (Phase 3). The Phase 2 residents complied with their respective agreements by paying the first appellant in full over a period of 30 months. The Phase 3 residents also duly complied by paying the first appellant in full within the agreed period of 60 months that ended on 1 February 2008.

The first respondent averred that the first appellant had breached its contract of sale with the Knowe residents. It filed an application for specific performance or the payment of damages in the alternative.

The appellants opposed the application on the merits and also raised three points in limine at the hearing a quo.

The court a quo dismissed all three points in limine.

As regards the first point, relating to prescription, the court found that the permits granted to the first appellant did not give any time limit within which the infrastructural development was to be completed and that the contracts with the residents did not specify any time limits for suing the first appellant. Whatever was to be done by the first appellant was to be done within a reasonable time.

With respect to the second point, the court found that there were no material disputes of fact and that, therefore, it was proper for the first respondent to proceed by way of application rather than by way of action.

Lastly, the court dismissed the third point objecting to the citation of the second appellant in his personal capacity on the basis that he was responsible for the first appellant's administrative affairs.

On the merits, the court a quo found that the members of the first respondent had duly performed their part of the agreements. Conversely, the first appellant had performed some part of the agreements but had not fully complied with the agreements and development permits. The court was not satisfied that this failure to perform was mainly because of inflation. The court further found that the first appellant had failed to establish that performance was now impossible in the era of dollarisation.

If the first appellant had serviced the Stands at the time the purchase prices were paid, between 1998 and 2008, there would have been no difficulty in the performance of the contracts. The court rejected the defence of impossibility of performance on the basis that any hardships now encountered by the appellants were self-created.

Finally, the court held, that, if the appellants were unable to comply with an order for specific performance, they must, in the alternative, pay damages.

In the event, the court ordered the appellants to fully service the Stands in Phases 2 and 3 within 90 days to the second respondent's satisfaction and specifications. The latter was ordered to ensure that the relevant statutory requirements were met. Alternatively, the appellants were ordered to pay the sum of US$192,901,995 to the first respondent's members within 30 days. If they failed to pay, the Sheriff was authorised to attach and sell the appellants' property in execution in satisfaction of the damages awarded. Lastly, the appellants were ordered to pay the costs of suit on an attorney and client scale.

The 10 grounds of appeal hereunder are unduly prolix and repetitive. They attack the judgment a quo on the following broad bases:

(i) The appellants were not in breach of their obligations in the absence of a finding as to the time when performance was due, and, therefore, the application a quo was premature and not enforceable.

(ii) The claims in casu were prescribed following the execution of their obligations by the residents, and, in that respect, the court misconstrued the first appellant's contractual obligations and its duties in terms of the permits issued by the second respondent.

(iii) The claim for damages required the quantification of damages by way of action, and, consequently, the claim for damages was not proven according to law.

(iv) The court erred in ordering the second appellant to pay damages personally, and, in so doing, it mis-applied the doctrine of piercing the corporate veil.

(v) The court failed to deal with and pronounce upon the defence of currency nominalism and ordered the payment of damages in the currency of circulation and not the currency of performance.

(vi) The court improperly failed to consider the feasibility of performance against the defence of supervening impossibility.

The appellants pray that the appeal be allowed with costs and that the judgment a quo be set aside and substituted with an order dismissing the application with costs.

At the hearing of the appeal, counsel for the appellants moved an amendment to the relief sought, substituting the prayer for dismissal with one for remittal to the court a quo. Counsel for the first respondent had no difficulty with the prayer being substituted as amended. The prayer was accordingly amended, by consent, to provide for the remittal of the matter rather than the dismissal of the application a quo....,.

The remaining seventh and eighth grounds of appeal impugn the judgment a quo for having mis-applied the doctrine of piercing the corporate veil, and, consequently, visiting personal liability on the second appellant to pay damages as an alternative to the order for specific performance.

Counsel for the appellants submits, in this regard, that questions of fraud or dishonesty are relevant to lifting the corporate veil.

The only basis for citing the second appellant was that he is the director of the first appellant and responsible for the administrative affairs of the company. There was no evidence, whatsoever, to justify the citation of the second appellant in his personal capacity or lifting the corporate veil to render him personally liable.

Counsel for the first respondent submits that the courts can pierce the corporate veil in the interests of justice.

The founding affidavit clearly lays out the basis for piercing the corporate veil in casu and there is no specific attempt to contradict this in the opposing affidavit. The second appellant was the administrator of the company who took all the monies paid by the first respondent's members. The failure to hold him accountable would result in manifest injustice.

In response, counsel for the appellants reiterates that there is no basis for imputing liability to a director as opposed to a shareholder. It is only if the company was run grossly negligently that a director can be held personally liable. In casu, the doctrine of piercing the corporate veil simply does not apply.

In its founding affidavit, the first respondent avers that the first appellant is a family business with the second appellant being the sole active director for all practical purposes. According to the history of directorship in the company, as per the records availed in the Company's Registry, it is no more than the second appellant's alter ego. It is a one-man company with all its equipment, assets, and income belonging to the second appellant. Accordingly, the court a quo was urged to pierce the corporate veil to ensure that justice is done. The second appellant must not be allowed to benefit from his improper conduct by hiding behind the first appellant's corporate personality.

In his opposing affidavit, the second appellant does not dispute that he has been a director of the first appellant since 1980 and that the other directors, at different times, were or are his personal relations.

However, he denies that these allegations constitute an acceptable basis for lifting the corporate veil and disregarding the separate personality of the company. He contends that the first respondent does not cite a single incident in which the distinction between himself and the company was diluted. Consequently, none of the legal requirements for piercing the corporate veil have been pleaded or established. The first respondent's averments in this regard are characterised by nothing more than surmise and conjecture.

In its answering affidavit, the first respondent restates the averment that the second appellant is the sole active director of the first appellant and is responsible for taking up its administrative affairs. This reveals the capacity in which he was cited.

In any case, his citation was to ensure compliance with any order that the court a quo might have granted.

In Mkombachoto v CBZ Ltd & Anor 2002 (1) ZLR 21 (H)…, it was observed that the courts may lift the corporate veil and disregard the separate legal personality of a company in limited circumstances, for instance, so as to avoid manifest injustice.

Again, in Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd 1995 (4) SA 790 (A), at 802, it was held that a court would be justified, in certain circumstances, in disregarding a company's separate personality and lifting or piercing the corporate veil. The focus then shifts from the company to the natural person behind it or in control of its activities. Personal liability is then attributed to someone who misuses or abuses the principle of corporate personality. Each case involves a process of enquiring into the facts which may be of decisive importance.

However, at 803-804, it was cautioned that the courts should not lightly disregard a company's separate personality but should strive to give effect to and uphold it. But, where fraud, dishonesty, or other improper conduct is found to be present, the need to preserve the separate corporate identity would, in such circumstances, have to be balanced against policy considerations which arise in favour of piercing the corporate veil. A court would then be entitled to look to substance rather than form in order to arrive at the true facts, and, if there has been a misuse of corporate personality, to disregard it and attribute liability where it should rightly lie.

The decision in Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd 1995 (4) SA 790 (A) was followed in Deputy Sheriff Harare v Trinpac Investments (Pvt) Ltd & Anor HH121-11, and, more recently, by this Court in Chris Stylianou & Ors v Moses Mubita & Ors SC07-17.

In the latter case…, it was noted that no allegation of fraud, dishonesty, or other improper conduct was levelled against the first appellant which might have justified the lifting of the corporate veil of the other two appellants.

Indeed, no good explanation was given to justify the citation of the first appellant save to state that he was the owner of the two appellant companies.

In the instant case, the court a quo found that the second appellant had been properly cited in his personal capacity because he was solely responsible for the first appellant's administrative affairs.

On this basis, the court proceeded to hold the former jointly liable with the latter to fully service the residential areas in question, and, alternatively, to pay damages in the sum of US$192,901,995 within 30 days, failing which the appellants' property was to be attached and sold in execution in satisfaction of the damages.

In principle, the fact that the second appellant is the sole active director in charge of the first appellant's administrative affairs does not, per se, constitute an adequate basis for lifting the corporate veil.

There is no clear evidence on record to indicate that the second appellant was involved in any fraudulent or dishonest activity or other improper conduct. In the absence of such evidence, this Court should not lightly disregard the first appellant's separate corporate personality.

In this regard, I am mindful of the salutary caveat expressed in Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd 1995 (4) SA 790 (A)…, that, to do so “would negate or undermine the policy and principles that underpin the concept of separate legal personality and the legal consequences that attach to it.”

However, the enquiry does not necessarily end there, as “each case involves a process of inquiring into the facts which, once determined, may be of decisive importance: and, in determining whether or not it is legally appropriate, in given circumstances, to disregard corporate personality, one must bear in mind 'the fundamental doctrine that the law regards the substance rather than the form of things'…,.”– ibid, at 802.

In casu, given the history of the first appellant's corporate directorship from 1980 to the present, it is relatively clear that the second respondent is its sole active director. He is quite evidently its alter ego and its paterfamilias, so to speak.

He was and continues to be the principal protagonist in the administrative and contractual arrangements underlying the development of Knowe Suburb.

In these circumstances, it becomes difficult to sustain the juridical dichotomy between the two appellants and to uphold the façade of their separate legal personality.

I am persuaded to agree with the first respondent's submission, that, citing the second appellant in the proceedings a quo was the only way of ensuring compliance with any order that might have been granted against the first appellant. Any such order would otherwise have constituted nothing more than a brutum fulmen.

Moreover, in the exceptional circumstances of this case, it would be manifestly unjust if the members of the first respondent, having timeously fulfilled their contractual obligations, by paying the full purchase price, were to be deprived of the ability to secure the effective enforcement of any judgment granted in their favour.

In the event, I am satisfied that the court a quo, in the exceptional situation before it, quite correctly pierced the corporate veil of the first appellant so as to attribute its liability jointly to the second appellant, not only for the performance of its contractual obligations but also in respect of any damages payable in the alternative.

It follows that the seventh and eighth grounds of appeal cannot be upheld. They are accordingly dismissed.

The plaintiff claims a default judgment for sexual harassment. She is unrepresented.

The matter appeared on the unopposed motion roll on 20 October 2021. It was one of several such appearances. In the past, the matter would be removed from the roll for one reason or other. The matter has had a long and turbulent history. The plaintiff says the wheels of justice have turned ever so slowly for her.

There can be no denying that.

She has been to this court. She has been to arbitration. She has been to the Supreme Court. She is back in this court. She strives for closure. Any lesser mortal would probably have given up. Plainly, the plaintiff is no lesser mortal. Her tenacity and fighting spirit have moved mountains. She is still fighting. This judgment only settles half the case. The other half still continues.

I shall explain.