We have already seen, that, case law establishes that the owner is entitled to possess the property which he/she owns. No one can take away that property from the owner without his/her consent save where the claimant has proved that he/she has some lawful residual right to possess the property such as contractual or retention rights.

The appellant, having failed to prove ownership of the disputed animals, the ball was squarely in her court to prove that she had the right to possess the animals despite not being the owner.

Her claim for the right to possess the animals was grounded on her claim of ownership of the animals.

Her failure to prove ownership of the animals automatically, by operation of law, divested her of the right to possess the animals because the law vested the right of possession on the owner.

Her lease agreement with the first respondent could not assist her because, according to her claim, the contract did not apply to the disputed animals. It only applied to the animals resident at the sanctuary on 1 October 2005.

These animals were not the subject of the dispute. The dispute only related to the animals that came to the sanctuary after 1 October 2005.

In any case, the lease agreement terminated when she was evicted from the sanctuary. She could therefore not continue to hold onto the first respondent's property on the basis of an expired contract.

In the final analysis, we find, that, the appellant, having failed to prove ownership of the disputed animals, had no legal basis to claim possession of the animals from the owner. That being the case, the learned judge a quo's judgment is unassailable.

In the result, it is ordered, that, the appeal be and is hereby dismissed with costs.

Similarly, amounts due in terms of some industrial law or regulations are treated as allowable deductions having been properly incurred during the year of assessment.

In no circumstances, however, are provisions for anticipated or contingent losses or expenditure allowed as deductions.

Thus, a car dealer cannot be allowed to deduct anticipated expenses to be incurred after his year-end on free services still to be given on cars sold before the year end - but see section 15(2)hh) (paragraph [148D]).

At the commencement of her testimony, she stated that the respondent's current practice was to disallow provisions for audit fees.

She then changed her evidence, and, thereafter, maintained, in both her remaining evidence in chief and under cross-examination, that, the respondent consistently allowed provisions for audit fees and leave pay in the tax year to which they related and added them back to income in the following tax year after they were approved at the Annual General Meeting.

This is an application for confirmation of a provisional order issued by the Honourable Mr Justice Kamocha on the 31st day of October 2013.

The applicant is a registered trade union representing the artisans employed by the first respondent. It has capacity to sue and be sued in its own name.

The first to fourth respondents (National Railways of Zimbabwe, National Association of Enginemen, Railways Association of Yard Operation Staff and Zimbabwe Amalgamated Railway Workers Union) are signatories to the Parterson Job Evaluation System used at the first respondent's place of employment.

On or about 7 July 2004, the applicant and the respondents entered into an agreement setting out how the job evaluation system was to be conducted.

A procedural manual was drafted and signed by the applicant and all the respondents in July 2006.

In terms of clause 2 of the Parterson Job Evaluation System Procedural Manual, the purpose of the manual is to “set down the principles and procedures to be observed in respect of the classification of all Railway jobs in bands A to F using the Parterson Job Evaluation System.”

Clause 6 sets up a Job Classification/Review Committee whose composition is set out in clause 6.1 as:

“…,. 16 members, 8 of whom shall be appointed by the employer and 2 by each of the registered trade unions who are members of the Railways Employment Council.”

The quorum is established in terms of clause 6.1.5 as follows:

“The quorum of this committee shall be at least 4 members from the employer and at least one member from each of the trade unions. In the event of lack of a quorum, the meeting shall stand adjourned to a date and time to be agreed upon.”

The parties conducted their business in terms of the above manual until problems surfaced, and, in a meeting held on 18 September 2012, wherein the applicant and the fourth respondent's representatives indicated, that, unless the Parterson Job Evaluation System was reviewed they would be uncomfortable to remain as members of the Job Classification/Review Committee.

The third respondent withdrew its members on 27 November 2009.

The applicant also did so on 12 January 2010.

Consequently, no meetings of the Committee were conducted since then.

However, on 10 October 2013, the respondents met, without the applicant's knowledge and consent, and a motion was moved that the Committee should convene its meetings, and, if a party is absent, the meeting should remain adjourned for seven (7) days, and, at the agreed date, those members present shall constitute a quorum.

This proposal was the idea of one Gibson Mhlophe: see annexure H…,.

Indeed, notices were sent out by the secretary to the Railway Employment Council, one W. Chitima, and G. Ndlovu, the HR Manager for the first respondent: see annexures I and J…,.

Pursuant to those notices, a meeting was scheduled for the 23rd of October 2013. However, the meeting was postponed to the 30th of October 2013.

The applicant then sought and was granted a provisional order in the following terms:

“Pending the determination of this matter, applicant is granted the following relief:

1. The respondents be and are hereby ordered not to proceed with the meeting of 30 October 2013 to evaluate jobs as it violates the procedural manual.

2. In the event the meeting has already been done, the results of such meeting be declared null and void.”

The terms of the final order sought are:

“That you show cause to this Honourable Court, if any, why a final order should not be made in the following terms:

1. The respondents be ordered to review the Parterson Job Evaluation Committee within 30 days of the order by subjecting it to an external evaluation.”

The applicant's argument is that there must be a review of the Committee's nature and functions in view of the corrupt manner in which it has been discharging its functions.

It was submitted, that, this Committee is a creature of the Manual and is strictly bound by the provisions of the manual in particular clause 6.1.5 thereof.

Further, it was submitted, that, where a quorum should be met in all such meetings, the failure to so comply renders those meetings conducted outside the requirements null and void: see L. Piros & Sons v Piros 1993 (2) ZLR 245 (H) and James North Ltd Can v Matrimson 1989 (1) ZLR 322 (HC).

The applicant also submitted, that, clause 6.1.5 of the Manual is clear and unambiguous in that the quorum of the committee shall be at least four (4) members from the employer and at least one member from each of the trade unions.

Also, it was argued, that, there is no provision in the Manual for the procedure proposed by Mhlophe and adopted by Chitima and Ndlovu.

Finally, it was submitted, that, the procedural manual is not subordinate to the Railway Employment Council constitution and any attempt to refer to it in order to resolve the impasse is a nullity.

The respondents opposed the confirmation of the provisional order on the following grounds:

(a) That, the applicant is barred from filing heads of argument because it did not, within one month of filing an answering affidavit, set the matter down for hearing in compliance with Order 32 Rule 236(4) of the High Court Rules 1971, and, as a result, the respondents have, under case number 272/14, applied for dismissal of this case for want of prosecution in terms of Order 32 Rule 236(4)(b) of this Court's rules.

(b) There is no urgency in that the decision the applicant seeks to be set aside was communicated to it on 10 October 2013 yet it waited until the 29th of October 2013 before approaching the court. Reliance was placed on Kuvarega v Registrar-General and Anor 1998 (1) ZLR 188.

(c) That the applicant has not exhausted domestic remedies provided for in terms of section 74(4) of the Labour Act [Chapter 28:01] before approaching this court.

(d) That the relief sought is incompetent in that the court has no authority to make an agreement for the parties.

(e) That constitutions of voluntary associations should be interpreted in a manner which gives effect to the objects of the association as was held in Mudzumwe & Ors vs MDC & Anor 2012 (1) ZLR 490; Mudzengi & Ors v Hungwe & Anor 2001 (1) ZLR 179; and Garment Workers Union v Vries & Ors 1948 (1) SA 1110…,.

(f) That, the decision the applicant complains of was taken when there was a full quorum and the applicant was simply out-voted.

In my view, the real issue is whether or not the respondents purported amendment of clause 6.1.5 is lawful.

The rest of the points raised by respondents are frivolities. However, I will consider them and provide reasons for their dismissal....,.

The fifth point is totally without merit because the basic rule of interpretation, namely, the literal rule, requires that words be given their ordinary grammatical meaning.

If this is applied to clause 6.1.5, the meaning becomes crystal clear.

The object of clause 6.1.5 is to ensure that all members of the Committee must be present when it conducts its business in line with sound industrial relations principles. 

Any other meaning would defeat the spirit of collective bargaining.

This was an appeal from a decision of the Magistrate's Court. We dismissed it soon after argument and gave reasons ex tempore. The appellant has now sought written reasons.

In the court a quo, the respondent, hereafter referred to as “the purchaser” where appropriate, sued for specific performance in respect of a property that she had bought from the appellant in terms of a written agreement of sale.

She proceeded by way of a court application.

The draft order, apart from costs, sought an order directing the appellant, hereafter referred to as “the seller” where appropriate, to sign forthwith all the documents necessary to enable transfer of the property to herself, failing which the Messenger of Court should be empowered to stand in his stead and sign.

She said, in terms of the agreement, the parties had consented to the jurisdiction of the Magistrate's Court.

In his notice of opposition, the appellant took a point in limine, that, the remedy sought was not one contemplated by the Agreement of Sale. He said in terms of it, in the event of a breach by himself, the only remedy available to the respondent was cancellation of the agreement upon a prior demand to make good the breach within 14 days, and that this had not been done.

He said specific performance was a remedy alien to the written agreement.

An adjunct to the above objection was that, in terms of the Magistrates Court Act [Chapter 7:10], a Magistrates Court has no jurisdiction to grant specific performance in the absence of an alternative claim for damages. He cited section 14(1)(d) of the Magistrates Court Act.

On the merits, the appellant's basic defence was that the respondent had only paid part of the purchase price; that, as such, she was in breach of the Agreement of Sale; and that therefore she was not entitled to specific performance. He prayed for the dismissal of the application with costs.

The court a quo felt there was a dispute of fact that was incapable of resolution on the papers. It referred the matter to trial.

After a full scale trial, the court a quo found in favour of the respondent and granted specific performance.

The appellant appealed.

We felt the appeal had no merit. We dismissed it as aforesaid.

The seller's argument, that the remedy sought by the purchaser was not one contemplated by the agreement of sale was premised on clause 11. It read:

“Should the Seller breach any of the conditions of the Agreement, the Purchasers, shall, in writing, within fourteen (14) days, call upon the Seller to remedy, failure to which the Purchasers shall be entitled to cancel the Agreement and claim the return of the Purchase Price or damages.”

The point in limine was all smoke.

The approach by the seller was to skin and disembowel the agreement, yank individual clauses out, and hang them up to dry. The result was to turn an otherwise reasonably worded commercial agreement into a vain document that was an end in itself, instead of it being a means to an end.

The agreement of sale was an instrument for the seller to transfer real rights in the property sold and the purchaser to acquire them.

That was the object. That was the purpose. The court had to give effect to it. Otherwise the law would be damned.

As ROBINSON J would put it, in Intercontinental Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd 1993 (1) ZLR 21 (H):

“Let me add that to have found in this matter that there was no contract between the parties would have been artificial in the extreme and, I am sure, would have prompted any reasonable businessman to remark that if, before, he had thought the law was an ass, he now knew for certain that it was, since it had shown itself to be the domain of niggling academics out of touch with reality and to have nothing to do with the cut and thrust of the business world where one is concerned, not with the legal niceties pertaining to, but with the perceived existence of a contract.”…,.

The point is, a purchaser who buys a property and performs his side of the bargain, or is ready to perform, is entitled to take title. The seller is obliged to deliver. If he fails or neglects or refuses to do so, the purchaser is entitled to sue for specific performance.

This is quite elementary.

As long ago as 1912 INNES JA said, in Farmers Co-operative Society (Reg) v Berry 1912 AD 343…,:

“Prima facie, every party to a binding agreement who is ready to carry out his own obligation under it has a right to demand from the other party, so far as it is possible, a performance of his undertaking in terms of the contract.”

A plaintiff has the right to choose whether to hold a defendant to his contract and claim performance by him of what he bound himself to do, or to claim damages for the breach: see Haynes v Kingwilliamstown Municipality 1951 (2) SA 371 (A)…,.

The defendant has no such right of election.

He cannot claim to be allowed to pay damages instead of having an order for specific performance entered against him. In the exercise of its discretion, the court may grant or refuse specific performance. Specific performance will be refused if it will lead to an injustice, or, if it will be unduly harsh and burdensome on the defendant.

There was nothing like that in this case.

The court exercises its discretion to grant or refuse specific performance judiciously, not whimsically. The discretion is not confined to specific types of cases. It is not circumscribed by rigid rules. Each case depends on its own set of facts: see Intercontinental Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd 1993 (1) ZLR 21 (H).

In the present case, clause 11 of the agreement did not oust the purchaser's right to sue for specific performance. It merely pronounced one of the remedies available to her in the event of a breach by the seller.

A proper and holistic study of the agreement shows, that, it was the intention of the parties, that, upon her performing her side of the contract she would get transfer of the property. Otherwise why would clause 1(ii)(4) refer to the payment of capital gains tax, if not in contemplation of transfer? Or clause 1(iii) that said the balance of the sale proceeds would be released to the seller upon the registration of transfer? Or clause 5 that said risk and profit in the property would pass to the purchaser on the date of registration of transfer?

The court a quo was right to dismiss the point in limine.

Its adjunct that the claim for specific performance was incompetent because it was not accompanied by a claim for damages was equally properly dismissed.

Applicants 1 to 10 (Berrington Zvanyanya, Samuel Jinjika, Nyararai Dembo, Madhuvura Emmanuel, Madzuro Stiriki, Lovemore Muteurwa, Vengai Masungwini, Ngonidzashe Mabina Mudambanuki, Joe Gasva and Masacha Tapiwa) are one faction of a trade union.

Respondents 2 to 6 (Godfrey Katerere, Brawl Chikandiwa, Tavanga Vandirai, Lucia Chirilele and Nokhutula Dube) are the other.

The trade union is the first respondent (Zimbabwe Sugar Milling Industry Workers Union).

The seventh respondent (Tongaat Hulett Ltd t/a Triangle Ltd or Hippo Valley Estates Ltd) is the undertaking or industry in which the trade union is established. It is the employer. It is cited as a nominal party. It did not file any papers, electing to abide by the decision of the court.

Respondents 2 to 6 (Godfrey Katerere, Brawl Chikandiwa, Tavanga Vandirai, Lucia Chirilele and Nokhutula Dube) are members of the National Executive Committee of the trade union.

The applicants allege respondents 2, 3 and 4 (Godfrey Katerere, Brawl Chikandiwa and Tavanga Vandirai) are no longer employees of the seventh respondent (Tongaat Hulett Ltd t/a Triangle Ltd or Hippo Valley Estates Ltd).

For that reason, they allege, these respondents are automatically disqualified from continuous membership of the trade union.

So, the applicants seek two inter-related orders as follows:

(i) That, respondents 2, 3 and 4 are no longer members of the trade union by virtue of the termination of their contracts of employment with the employer; and

(ii) That respondents 2, 3 and 4 are disqualified from holding positions in the trade union's National Executive Committee.

The applicants also seek two inter-related orders in respect of the trade union.

They want it to hold elections to choose members of its National Executive Committee and to hold Annual General Meetings in terms of its Constitution.

Costs of suit are sought against respondents 2, 3 and 4 on an attorney-client scale.

The applicants allege they derive their power to sue from their membership of the trade union and in terms of its Constitution.

The respondents, except the employer, have all vehemently opposed the application.

Their grounds are multiple and disparate. They are both technical and substantive....,.

Argument ensued on the substantive ground of opposition.

This was that the loss of employment by members of a trade union did not automatically translate into losing their membership of the trade union, or becoming ineligible to hold positions in the National Executive Committee.

The respondents expanded their argument on the substantive ground of opposition above.

They said membership to a trade union was not confined to employees in the respective undertaking only. Continued membership, or loss of it, depends on the wording of the Constitution of the trade union. Ex-employees can remain members of a trade union. Even students can become members of a trade union.

By custom and precedence, members of this particular trade union who in the past have lost their employment in the undertaking have continued with their membership, especially where they have been challenging their loss of employment and the case would be pending in the courts.

With respondents 2, 3 and 4 in particular, they are still challenging their termination of their contracts of employment, and, therefore, there is no basis for the applicants to pursue the orders they are seeking.

With regards the non-holding of general elections, the respondents argue that the issue has been relegated to the periphery owing to the endless legal fights that have dogged the trade union. But plans are underway to hold the general meetings.

It is common cause that respondents 2, 3 and 4 lost their employment three years ago in 2016. However, they allege they are challenging their dismissal and that their cases are pending at the Supreme Court.

The substantive issue before me is whether respondents 2, 3 and 4 forfeited their trade union membership upon their loss of employment. Corollary to that, or concomitantly, did they become ineligible to hold positions in the executive committee of the trade union?

I have dealt with a similar situation before, in Makarudze & Anor v Bungu & Ors 2015 (1) ZLR 15 (H).

I held that employment in the relevant undertaking or industry is a pre-requisite for membership by any person to a trade union in that undertaking or industry.

Counsel for the respondents argues that Makarudze & Anor v Bungu & Ors 2015 (1) ZLR 15 (H) is distinguishable in that the Constitution of the trade union in question excluded non-employees from becoming members of the trade union. She says, in contrast, the Constitution of the first respondent in casu, is wide enough to accommodate as members anyone who may be prepared to abide by its conditions of membership, moreso, ex-employees who may still be fighting against their dismissal.

Counsel fort the respondents further argues, that, the applicants have sought to rely on clauses of the trade union's Constitution on eligibility of membership instead of relying on those dealing with the termination of membership. She says once someone becomes a member of the trade union, his or her termination of that membership depends on those clauses dealing with termination of membership and that termination of employment is not one of the criteria.

The answer to this case lies in the wording of the Constitution of the first respondent and the Labour Act [Chapter 28:01].

I find no material difference between the scenario in Makarudze & Anor v Bungu & Ors 2015 (1) ZLR 15 (H) and the present.

The substantive provisions of the Constitution in that case, dealing with the eligibility of membership to a trade, are similar to those of the Constitution of the trade union in casu. For example, in casu, clause 6.0 of the Constitution says membership of the union shall be open to non-managerial employees in the sugar milling industry. Thus, first and foremost, one has to be employed in the sugar milling industry to be eligible for membership of the first respondent.

Counsel for the respondents says clause 6.0 is irrelevant.

She says it merely opens the door for membership. It does not shut it up against anyone, especially those that have already entered. She says the clauses dealing with shutting the door against members are 10.6 and 10.7.

Clause 10.6 of the first respondent's Constitution says a member of the National Executive Committee vacates his seat upon resignation, suspension, or expulsion from membership of the trade union. He or she also vacates his seat for absenteeism from any three consecutive meetings without reasonable cause or on non-payment of subscriptions for a period of more than three months.

Clause 10.7 says any member of the National Executive Committee may be removed from office if a vote of no confidence is passed against them by a majority of members at a general meeting.

Undoubtedly, none of these provisions is relevant to the respondents situation.

But, counsel for the respondent's argument is a ruse.

In Makarudze & Anor v Bungu & Ors 2015 (1) ZLR 15 (H) I said, opening up membership of a trade union to anyone not employed in the particular industry or undertaking is alien to trade unionism in Zimbabwe.

By virtue of section 4 of the Labour Act, the entitlement to membership of a trade union, and to hold any office in it, is that of someone called an employee.

An employee is not just any person.

In terms of section 2 of the Labour Act, he or she is any person who performs work or services for another person for remuneration or reward. A non-employee or ex employee is not an employee. In terms of section 27 of the Labour Act, the right to form trade unions is that of employees.

Clauses 10.6 and 10.7 of the first respondent's Constitution, that form the bedrock of counsel for the respondents argument, are irrelevant.

They are dealing with the wilful cessation of office by a member of the National Executive or upon breach by him or her of some term or condition of the Constitution or upon loss of confidence in him or her by members. But, before one gets to that, one has to have been qualified first to be a member of the trade union. If he or she was not, but had got in anyway, that does not stop disgruntled members, like the applicants, from challenging his or her eligibility.

At all relevant times, respondents 2, 3 and 4 were not employees in the sugar milling industry, or anywhere else for that matter.

They were ineligible to become or remain members of the first respondent.

How they might have lost their employment or that three years on they were still fighting their dismissal, are issues of no moment. Incidentally, the facts of the alleged appeal by the respondents have not been ventilated before me. All that the respondents have said is that the appeals for respondents 2 and 3 are pending at the Supreme Court and that respondent 4 has lodged an application for leave to appeal.

But, it is trite, that, an appeal against the decision of a judicial body or quasi-judicial body that is not a superior court does not suspend the decision.

It is also trite, that, an application for leave to appeal is not an appeal: Makarudze & Anor v Bungu & Ors 2015 (1) ZLR 15 (H).

Evidently, as a last-ditch effort, counsel for the respondents stitched together the argument that the spirit of the first respondent's Constitution was such that a member's loss of employment does not lead to an automatic cessation of membership of the trade union.

She pointed to clause 7.0 of the first respondent's Constitution.

This clause says a member shall be exempt from payment of subscriptions in respect of any particular months during which he is unpaid (his salary) on account of suspension without pay or is unemployed for two months.

But, even if this argument had any semblance of probity, which it does not, the cut-off period in terms of the clause is a maximum of two months - and this is only in relation to the payment of subscriptions.

Plainly, the applicants have a right to be represented by genuine trade union members.

One who is not a member, or one whose membership has lapsed for one reason or other, cannot hold a position on the first respondent's national executive. Clearly, the applicants are entitled to relief as against respondents 2, 3 and 4....,.

This is an application for rescission of a judgment of this court entered in default in favour of the first respondent on 26 June 2008 in terms of which the eviction of the applicant and those claiming occupation through him from premises known as 1495 Chiwaridzo Township Bindura was ordered together with costs of suit.

On 4 February 2008, the first respondent issued summons out of this court in case number HC642/08 alleging that the house in question had been leased to the applicant by written lease agreement signed by the parties on 20 December 2003, which lease could be terminated by the first respondent in the event that the applicant left employment with the first respondent.

The first respondent further averred, that, the applicant's employment having been terminated on 31 March 2007, a point which is now hotly disputed by the applicant who claims having retired from the first respondent's employ in October 2005, the lease had been terminated.

The first respondent then sought an order for eviction as a consequence of the applicant's failure to vacate the house following such termination.

According to the Deputy Sheriff's (second respondent herein) return of service filed of record in that matter, the summons was “served on defendant Enock Govha” on 29 February 2008.

On 12 May 2008, the first respondent submitted an application for default judgement which was granted on 26 June 2008 aforesaid. In due course, a writ of ejectment was issued and the applicant's eviction was sought.

It is that default judgment which the applicant seeks to have rescinded arguing that he was not in wilful default as he was never served with the summons.

The applicant has cited the Deputy Sheriff in this application as second respondent and attacked his return of service as being “false and misleading” given that on the day the second respondent alleges he served the summons personally upon him, he (the applicant), was enjoying the fruits of his retirement in his communal home, he having relocated there in January 2006 following his retirement either in October or December 2005.

It is not clear when, as he mentions two (2) different months in 2005 as his retirement date.

It is not clear whether this application was served upon the second respondent as no proof of such service was filed.

What is clear though is that the second respondent has not challenged the serious allegations made against him regarding service of the summons. His failure to do so may be due to the fact that he did not have notice of the application.

The applicant states, in his founding affidavit, that, he only became aware of the existence of the default judgment when the second respondent sought to evict his daughter from the house on 1 November 2008.

He goes on to say, that, he should be allowed to contest the eviction because he bought the house from the first respondent and he paid the full purchase price.

In support of that claim, he has filed documents showing that the first respondent, as employer, offered houses to its employees, including the applicant. Those documents also show that the housing units were valued, their values determined and what each employee was expected to pay as the purchase price assessed and agreed.

The applicant also submitted his payslip showing that deductions were made by the first respondent from his salary under the caption “rent to buy”. The same payslip also reflects the balance after each deduction of the said 'rent to buy' showing that the amount charged was being progressively reduced. In addition, he filed receipts issued by the first respondent for further lump sum payments marked “payment of House 1495.”

For that reason, the applicant is of the firm view, that, having paid the full purchase price for the house, he cannot be evicted from it and has prospects of success on the merits.

The first respondent strongly opposes the application on the basis that the applicant has not shown good and sufficient reasons for the rescission of the judgment entered in default.

It has been argued on behalf of the first respondent, that, as the owner of the house, with title, it is entitled to vindicate against the applicant and that there was never an agreement of sale between the parties involving the house in question.

Counsel for the first respondent insisted that the relationship between the parties was governed by the written lease agreement signed in December 2003, which document the applicant says only recorded the financial arrangement between the parties for the conveyance, to the first respondent, of the purchase price. He vehemently argued, that, in terms of that lease agreement, the applicant would only be eligible for consideration to purchase the house at the expiration of 60 months from the date of the signing of that lease agreement.

Regrettably, counsel for the first respondent did not explain what governed the relationship between the parties before the lease agreement of 29 December 2003 was signed.

He took the view, that, as the applicant retired in March 2007, before the 60 month period had expired, he was not eligible to purchase the house and the first respondent was entitled to reclaim it.

There is a dispute as to when the applicant retired and two (2) different letters purporting to inform him of his resignation have been produced.

The first respondent produced a letter dated 14 November 2007 recording the applicant as having resigned on 31 March 2007.

Counsel for the applicant insists that letter is a recent fabrication by the first respondent, and has produced a letter written by the applicant's Human Resources Manager, M. Nyamadzawo, on 22 June 2005, giving the applicant notice of his retirement on 31 December 2005.

The first respondent has not explained the circumstances under which that letter was written if the applicant had not resigned.

Rule 63 of the High Court of Zimbabwe Rules 1971 provides:

“(1) A party against whom judgment has been given in default, whether under these rules or under any other law, may make a court application not later than one month after he has had knowledge of the judgment, for the judgment to be set aside.

(2) If the court is satisfied, on an application in terms of subrule (1), that there is good and sufficient cause to do so, the court may set aside the judgment concerned and give leave to the defendant to defend or to the plaintiff to prosecute his action, on such terms as to costs and otherwise as the court considers just.”

Subrule (2) of Rule 63 was interpreted succinctly in the seminal case of Stockill v Griffiths 1992 (1) ZLR 172 (S)…, as follows:

“The factors which a court will take into account in determining whether an applicant for rescission has discharged the onus of proving 'good and sufficient cause' as required to be shown by Rule 63 of the High Court of Zimbabwe Rules 1971 are well established. They have been discussed and applied in many decided cases in this country: see, for instance, Barclays Bank of Zimbabwe Ltd v CC International (Pvt) Ltd SC16-86 (not yet reported); Roland and Anor v Donnell 1986 (2) ZLR 216 (S) at 226E-H. Songore v Olivine Industries (Pvt) Ltd 1988 (2) ZLR 210 (S) at 211C-F. They are:

(i) The reasonableness of the applicant's explanation for the default.

(ii) The bona fides of the application to rescind the judgment; and

(iii) The bona fides of the defence on the merits of the case which carries some prospects of success.

These factors must be considered not only individually but in conjunction with one another and with the application as a whole.”…,.

The explanation given by the applicant, for failure to respond to the summons, is not
convincing, especially as it does not appear that the second respondent, who claims to have served the summons personally on the applicant, has been served for him to responded to the accusations levelled against him.

I agree with counsel for the first respondent, who relies on the authority of Gundani v Kanyemba 1988 (1) ZLR 226 (S), that, the second respondent's return of service is prima facie proof of service and can only be rebutted by concrete evidence being placed before the court.

However, that is not the only factor to be considered in deciding whether the applicant for rescission of judgement has discharge the onus of showing “good and sufficient cause” for the rescission.

I had occasion, in Mazuva v Simbi and Ors HB155-11, a matter in which an applicant for rescission had not given a good explanation for failure to act, to comment…, that, even in such a situation such applicant can still discharge the onus if all the factors are taken together. In that matter, I stated:

“While the explanation for the first respondent's failure to respond to the application in HC905/10 is what MAKARAU JP (as she then was) referred to in Mwanyisa v Jumbo & Ors HH03-10 as 'a dog's breakfast' if the factors to be taken into account in deciding a rescission of judgment application, as set out in Stockill v Griffiths (supra), are taken in conjunction with one another, the applicant has discharged the onus of proving 'good and sufficient cause' for the rescission of the judgment entered on 1 July 2010. It simply cannot stand.”

Here is a company which avails to its employees an opportunity to purchase houses they are leasing from it. It signs an understanding with the employees representatives which has, appended to it, a list of beneficiaries which list sets out the value of each housing unit and the monthly instalment to be paid by each beneficiary - the applicant included. It goes on to deduct the equivalent of such instalment from the applicant's salary clearly stating that it is rent to buy the house and to also show the balance outstanding after such deduction.

The same instalment is reflected on a written lease agreement.

It must be understood, that, in an application of this nature, the applicant is not required to prove his case but merely to show a bona fide defence carrying prospects of success.

Counsel for the first respondent referred me to the case of Ashanti Goldfields Zimbabwe Ltd v Clement Kovi SC07-09 (unreported) in which the Supreme Court ruled, that, the agreement signed between the first respondent and its employees, on 1 December 2003, which the applicant relies upon, was not a sale.

That issue was considered by MAKARAU JP…, in: 1. Antonio v Ashanti Goldfields Zimbabwe Ltd & Anor; 2. Mujati v Ashanti Goldfields Zimbabwe Ltd & Anor; 3. Ashanti Goldfields Zimbabwe Ltd v Bonde 2009 (2) ZLR 371 (H); which matters involved the same arguments as in casu.

She distinguished that case and concluded…, as follows:

“I am bound by all decisions of the Supreme Court on points of law. Where, however, the facts that were placed before the Supreme Court are different from the facts before me, I believe I am at liberty to interpret those facts in light of the law handed down by the Supreme Court. The doctrine of stare decisis applies to points of law and not to factual disputes.”

I find myself in agreement with that postulation.

I am not aware if that judgment has been challenged, but, until such time that it is overturned, I am entitled to use it as I am persuaded by it.

Following the guidance given in Stockill v Griffiths 1992 (1) ZLR 172 (S), to consider the factors not only individually but in conjunction with one another and with the application as a whole, I am of the view, that, the applicant has discharged the onus resting on him to show 'good and sufficient cause' for the rescission of the default judgment.

Justice demands that the issues raised ought to be interrogated fully in a trial and that the applicant should not be shut out, as it were, on the technicality of default judgment.

In the result, I make the following order; that

1. The default judgement entered on 26 June 2008 be and is hereby rescinded.

2. The applicant should file his notice of appearance to defend in HC642/08 within ten (10) days of the date of this order.

3. The costs of this application shall be costs in the main action.

This is an opposed matter in which the applicant (defendant in the main matter) filed a special plea, that the respondent's (plaintiff in the main matters) action be stayed, pending the final determination of the dispute by the arbitrator in terms of the parties agreement.

Both parties are companies which are duly incorporated in accordance with the laws of Zimbabwe.

This case brings to the fore the vexing question of the effect, that, the raising of a special plea ought to have on the proceedings in the main matter.

Various other contentious issues come to mind, such as; whether a special plea should only be raised in circumstances where, if it is upheld, it is likely to dispose of the matter, and, what the purpose of a special plea is as a tool in litigation?

These interesting legal conundrums aside, the issue that arises for determination in this matter is simple.

Does the existence of an arbitration clause in an agreement between parties preclude one of the parties from instituting legal proceedings until the matter has been referred to and determined by an arbitrator?

The background to this special plea is that the respondent issued summons against the applicant on 16 February 2015 in which it claimed payment of the sum of USD$17,313=75 being the 5% retention fund held in terms of the agreement between the parties, as well as costs of suit.

On 5 February 2013, the parties entered into an agreement in terms of which the respondent undertook to supply and fix air-conditioning and mechanical ventilation systems as a nominated sub-contractor in the Nestle new laboratory and administration block project. The respondent averred in the summons, that, it completed its mandate by 4 February 2014 and that it was issued with a certificate of practical completion of works by the Architect.

It is common cause, that, on 13 May 2014, the final certificate of payment in the sum of USD$17,313=75, the 5% retention fund held in terms of the agreement, was issued to the applicant for onward transmission to the respondent. The respondent averred, that, the applicant had failed or refused to release this money to it, in breach of the parties agreement.

The applicant filed notice of entry of appearance to defend on 3 March 2015, and, on 24 June 2015, after further particulars and further and better particulars had been sought and supplied, the applicant filed its special plea.

The basis of the special plea was clause 27 of the CIFOZ Conditions of Building Subcontracts, which the applicant averred provided, that, any dispute or difference that arose between the parties would be referred to arbitration.

According to the applicant, the dispute between the parties arose from the fact that the retention money, to the value claimed by the respondent, was and is still being held in a retention fund trust at Tetrad Investment Bank Limited for Nestle Zimbabwe (Private) Limited (Nestle) and the respondent.

The retention fund was created on 16 November 2012 under the instruction of the respondent and a nominated architect, together with the applicant for the benefit of Nestle.

The applicant contended, that, the respondent ought to have sued Nestle in its summons.

The applicant contended further, that, in terms of clause 13(c) of the CIFOZ Conditions of Building Sub-contracts, the respondent accepted the cession of the retention money to it by the applicant, therefore its claim ought to be against Nestle.

It is common cause that Tetrad Investment Bank Limited (Tetrad) was placed under judicial management, that is why the applicant has not been paid from the retention fund.

The filing of a special plea is provided for as follows by Order 21 of the High Court Rules 1971;

“137. Alternatives to pleading to merits: forms

(1) A party may —

(a) Take a plea in bar or in abatement where the matter is one of substance which does not involve going into the merits of the case, and which, if allowed, will dispose of the case;

(b)…,.

(c)…,.

(d)…,.

(2)…”

In the case of Cabat Trade & Finance v Movement for Democratic Change SC50-12…, it was held that:

“A special plea is a plea in trial susceptible of a replication and must be heard separately on the adduction of evidence: Doelcam v Pitchanik and Ors 1999 1 ZLR 390 (H) 396G-E.”

The applicant contends, that, the dispute between the parties is premised on Clause 27(b) of the agreement between the parties which reads as follows;

“Arbitration

If either the contractor or the subcontractor is unwilling to accept mediation or is dissatisfied with or unwilling to accept the opinion expressed by the mediator, then, and in such case, either the Contractor or the Sub-Contractor may within twenty eight (28) days after receiving notice of such proposal or decision require that the matter shall be referred to arbitration and the final decision of some person to be agreed upon by the parties or failing agreement, to a person to be appointed by on a request of either party by the President for the time being of the Construction Industry Federation of Zimbabwe and the award of such arbitration shall be final and binding on the parties.

Such reference, except on the question of certificates and/or payments, shall not be opened until after the completion or alleged completion of the Contract works, unless with the written consent of the Architect or the Contractor; provided that in any such arbitration as is provided for in this clause any decision of the Architect is final and binding between and upon the contractor and the sub-contractor.

The provisions of this sub-clause shall not affect the sub-contractor's rights under sub-clause 12(c) hereof.”…,

I accept as correct, the submission made on behalf of the respondent, that, a close reading of Clause 27 will show that arbitration is not mandatory. The Clause is couched in permissive terms.

Before taking a look at what our own courts have had to say on the distinction between the word 'may' and 'shall' in the context of statutory interpretation, let us take a brief look at the approach which has been adopted in South Africa.

It has been held, that, language of a predominantly imperative nature is generally taken to be indicative of peremptoriness, and that the verb “shall” is one such word: see Messenger of Magistrates Court, Durban v Pillay 1952 (3) SA 678 (A); Maharaj & Ors v Rampestad 1964 (4) SA 638 (A)…,.

The cases have a common thread, that, a court called upon to determine whether a particular provision is peremptory or directory “must construe the language of the concerned provision in the context, scope, and object of the act which it forms part.”

Use of the word 'shall' has been held to be “…, a strong indication that the requirement was peremptory:” see Messenger of Magistrates Court, Durban v Pillay 1952 (3) SA 678 (A).

It has been held further, that, categorizing statutory requirements as 'peremptory' or 'directory' are concise and convenient labels to use for the purpose of differentiating between the two categories.

Peremptory requires exact compliance whilst directory requires substantial compliance, though the distinction between the two has now become blurred.

In Nkisimane & Ors v Santam Insurance Co Ltd 1978 (2) SA 430 (A), it was held that:

“Care must be exercised, therefore, not to infer from the use of such labels what degree of compliance is necessary and what the consequences are of none or defective compliance. These must ultimately depend upon the proper construction of the statutory provision, or, in other words, upon the intention of the lawgiver as ascertained from the language, scope, and purpose of the enactment as a whole.”

In Maharaj & Ors v Rampestad 1964 (4) SA 638 (A), the court said that:

“It is a recognized principle of statutory construction, that, a court, when determining which of these two alternative constructions is to be placed upon a statutory enactment, must seek to ascertain the real intention of the Legislature, and, in so doing, have regard to the scope and object of the enactment as a whole.”

In Charleston Town Board and Another v Vilakazi 1951 (3) SA 361 (AD)…, the court said the following:

“…, every enactment must be dealt with in light of its own language, scope, and object and the consequences in relation to justice and convenience of adopting one view rather than the other…,.”

Our own superior courts have given us sufficient guidance.

In the case of Diocesan Trustees for the Diocese of Harare v The Church of the Province of Central Africa SC09-10…, it was held that:

“…, the general rule is that, when the legislature uses the word 'may' in a statute by which it confers power on a public official to do a thing, the intention is to confer the power only without a duty to exercise it.

The statute must be construed as conferring on the repository of the power a discretion to decide whether or not to do the thing, unless, there is something in the subject-matter to which the statute relates which shows that the word 'may' is used in an imperative sense to impose a duty on the public official to exercise the power.

The something referred to in the general rule may be in the nature of the thing the public official is empowered to do; in the object for which the thing is to be done; in the condition under which it is to be done; in the title of the persons for whose benefit the power is to be exercised.

That something may couple the power to a duty and make it an obligation on the person in whom the power is reposed to exercise it when called upon to do so.

If, upon consideration of the subject-matter to which the statute relates, the only reasonable conclusion that can be reached is that the intention of the legislature is that the repository of the power would have no justification for failing to exercise the power, the word 'may' must, in such a case, be held to mean 'shall'”….,.

See CRAIES on Statute Law, 7ed…,.; Annison & Ors v District Auditor for St Pancras Borough Council & Anor (1962) 1 QB 489…,.; Salisbury Financial Holdings (Pvt) Ltd v Van Niekerk 1974 (1) RLR 333 (G)…,.”

It is accepted, that, the court in Diocesan Trustees for the Diocese of Harare v The Church of the Province of Central Africa SC09-10 made these remarks in connection with the wording of a statute, but, it is my view, that, the meaning attributed to the words 'may' and 'shall' applies to those words in any contex.

'May' implies permissiveness, as in a discretion or a choice, while 'shall' is an imperative, a duty or obligation to take the prescribed course of action: see also Jonathan Nathaniel Moyo & 2 Ors v Austin Zvoma N.O. & Anor SC28-10…, where the court made a similar distinction in the meaning of the words 'may' and 'shall' also in relation to statutory interpretation. It was held that;

“The learned author FRANCIS BENNION, in his work, Statutory Interpretation, suggests that the courts have to determine the intention of the legislature using certain principles of interpretation as guidelines. He had this to say at pp21-22:

'Where a duty arises under a statute, the court, charged with the task of enforcing the statute, needs to decide what consequence Parliament intended should follow from breach of the duty. This is an area where legislative drafting has been markedly deficient. Draftsmen find it easy to use the language of command. They say that a thing 'shall' be done. Too often they fail to consider the consequence when it is not done. What is not thought of by the draftsman is not expressed in the statute. Yet, the courts are forced to reach a decision.'

It would be draconian to hold, that, in every case, failure to comply with the relevant duty invalidates the thing done. So, the courts answer has been to devise a distinction between mandatory and directory duties.

Terms used instead of 'mandatory' include 'absolute' 'obligatory' 'imperative' and 'strict'. In place of 'directory' the term 'permissive' is sometimes used. Use of the term 'directory' in the sense of permissive has been justly criticised. [See Craies Statute Law (7th ed, 1971) p61 n74].”

The guidance that emanates from these cases is that when 'may' is used, it is merely directory, and, choosing not to act in the manner prescribed is permissible. When the word 'shall' is used it denotes mandatory action and compliance with the prescribed course of action is obligatory, imperative, and strict.

Failure to comply with a mandatory course of action invalidates the thing done whereas failure to comply with a directive is not fatal, it may result in some being sanction imposed: see Associated Newspapers of Zimbabwe (Private) Limited v Minister of Information and Publicity & 2 Ors SC111-04…,.; Association of Independent Journalists & 2 Ors v The Minister of State for Information and Publicity in the President's Office & 2 Ors SC136-02…,.; Doctor Daniel Shumba & Anor v The Zimbabwe Electoral Commission & Anor SC11-08…,.; Zellco Cellular (Private) Limited v Post & Telecommunications t/a Net One 1998 (2) ZLR 106 (H).

Counsel for the respondent correctly states the position, that, it is clear from a reading of Clause 27 in the Schedule of conditions that what is mandatory or imperative is the giving of notice of the dispute as evidenced by the use of the word 'shall' in relation to notice.

It is common cause that the applicant was given such notice in a letter dated January 2015.

It is clear from a reading of Clause 27 that mediation, or arbitration, is not mandatory. The wording is not couched in peremptory terms in terms of the meaning of peremptory, as opposed to permissive, which meaning is settled at law, as shown by the cases cited above. Referring the matter to arbitration is a choice, not an imperative, as evidenced by the use of the word 'may' in relation to the issue of arbitration.

This court also agrees with the statement of law, made on behalf of the respondent, that, the arbitration clause, in Clause 27, does not oust the inherent jurisdiction of this court: see Shell Zimbabwe (Private) Limited v Zimsa (Private) Limited & Anor 2007 (2) ZLR 366 (H); Zimbabwe Broadcasting Corporation v Flame Lily Broadcasting (Private) Limited 1999 (2) ZLR 448 (H); Recoy Investments (Private) Limited v Tarcon (Private) Limited 2011 (2) ZLR 65 (H).

These cases provide authority for the proposition, that, Article 8 of the UNICTRAL Model Law set out in the Schedule to the Arbitration Act [Chapter 7:15] is an alternative to litigation and cannot take away the inherent jurisdiction of the court.

It is only when an arbitration clause is clear and unequivocal that arbitration must proceed, at first instance, in resolving the dispute that such a clause can have the effect of staying proceedings.

Clearly, Clause 27 does not state, in no uncertain terms, that, arbitration must proceed first before litigation. This court's inherent jurisdiction is not ousted by the wording of Clause 27. If it had been, such ouster would have been legally permissible in terms of Article 8 of the UNICTRAL Model Law.

What is also clear is that the arbitration process must be set in motion by the existence of a dispute. The terms of the dispute must be set by the party wishing to have the matter referred to arbitration.

In the case before me, it is common cause that the main contractor has failed to pay the sub-contractor. It is also common cause that the parties agreed to place certain funds in an escrow account with Tetrad Investment Bank Limited which is now in liquidation. It is common cause that the reason why the main contractor is unable to pay the sub-contractor is that the escrow funds are stuck at Tetrad Investment Bank Limited, the account has been frozen in the process of liquidation. The amount due and payable is not disputed.

There is no dispute between the parties which requires resolution by arbitration.

The special plea is not properly before the court because it does not constitute a matter of substance which is capable of disposing of the matter as required by Order 21 Rule 137(a) of the rules of this court.

A special plea should only be taken in circumstances where it is likely to dispose of the matter without delving into the merits.

This special plea falls short of that requirement.

Clause 27 of the of the CIFOZ Conditions of Building Sub-contracts does not provide in clear and unequivocal terms that if there is a dispute between the parties it must be referred to arbitration first, before litigation. It does not oust the inherent jurisdiction of this court in clear and unequivocal terms, thereby denying the applicant the use of the Arbitration Act as a shield or the use of Article 8 of the Model Law as a sword.

The applicant knew, or ought to have known, that, the special plea would not dispose of the matter, because the law is clear. The applicant can simply petition the court that Nestle be joined as a party to the proceedings. This will alleviate its obvious difficulty. Raising a special plea was not the appropriate legal remedy in the circumstances.

The court awards a punitive order as to costs as a mark of its displeasure at this waste of its time.

For these reasons, the special plea be and is hereby dismissed with costs on a legal practitioner and client scale.

This is an application for summary judgment whose draft order reads:

“1. The respondent be and are (sic) hereby ordered to vacate the plaintiff's premises to wit House No. 1117 Haka Way, Chipadze Township, within seven (7) days of this order.

2. The respondent pays costs of suit.”

This is one of several similar matters in which the applicant is seeking the eviction of its former employees from company houses on the basis that the former employees were mere tenants whose employment has since terminated.

The former employees, just like the respondent herein, argue that the applicant sold the houses to them.

The respondent argues that he has a bona fide defence to the applicant's claim. That defence is explained as follows:

In 1998, the applicant, as part of its staff retention scheme, proposed to sell its housing units to its employees over a five year period. By then, the life-span of the mine had been projected to be around five years. The scheme would also help the applicant realize better value from the disposal of the houses in that manner as opposed to by selling them upon closure of the mine in an environment akin to a ghost town.

As a sequel to the proposal, a lot of deliberations were held on the issue and a Housing Committee was put in place composed of representatives of the employees and the applicant.

The relevant minutes were attached to the opposing papers.

Minutes of 8 May 2003 read:

“2.1 Sale of Residential Properties

The process was still ongoing and progressing well. The Finance Director, together with the workers representative went to consult a lawyer to resolve the outstanding issues. The lawyer came up with what he advised as the best option. Minor changes were made to what the lawyer proposed to suit the employee's needs. Whether that is acceptable will be determined when forms are taken back to the lawyers. IT WAS AGREED that the issue be pursued closely so that it comes to rest.”

Minutes of 24 August 2003 read:

“2.1 Sale of Residential Properties

There was a lot of progress on the sale of residential properties. A hurdle on the revaluation of the houses was cleared with Mr Kwaku-Akosah-Bempah when he visited the mine during the second quarter. The Finance Director, together with the worker's representative, had been to the lawyer with the final draft to which the lawyer had already responded….,.”

Thereafter, what was termed a Memorandum of Agreement BETWEEN Ashanti Goldfields Management and Employees was signed. It provided:

“Ashanti Goldfields Zimbabwe agrees to dispose of its housing units situated in Chiwaridzo, Grey Line Flats and Low Density to its employees who are sitting tenants effective 1 December 2003. Find the agreed prices attached.”

The attached schedule has names of the sitting tenants, house number, new valuation of the house, and monthly repayment amount.

On 12 December 2003, the respondent (and other employees) entered into what is headed Agreement of Lease with the applicant.

The material clauses of the “lease” state that the lease period would be for five years, monthly rent of not more than 25% of the lessee's basic salary which would escalate periodically at a rate and on the basis described in Annexure 'A' viz:

“The value of the property will be revalued each time the employee is awarded the annual salary increment. The outstanding balance as at the effective date of the increment is what is revalued. The revaluation will be calculated as follows:

50% of the salary increment (%) x the outstanding balance (as at that date). The revalued outstanding balance will then be divided by the remaining period to get the monthly payment.”

The purported lease agreement was simply a vehicle through which deductions would be made from the respondent's salary.

This explains why the applicant, on the respondent's payslip, put a deduction titled “Rent to Buy” and why the applicant accepted a lump sum payment in full and final settlement of the sums payable to it under the agreement of sale before the expiration of the purported lease period.

Also, the minutes of 16 December 2003 are apposite. The relevant part reads:

“3.0 Sale of Residential Properties

There was a lot of progress on the sale of residential properties. Management had approved and concluded the sale. The employees are busy filling in the contract forms.”

Pertinent to note here is that this was said after 12 December 2003 purported lease agreement.

While there exists a plethora of case law on the subject of summary judgment, the locus classicus is that of Maharaj v Barclays National Bank Limited 1976 (1) SA 418 (AD)…, where CORBETT JA said:

“Accordingly, one of the ways in which a defendant may successfully oppose a claim for summary judgment is by satisfying the court, by affidavit, that he has a bona fide defence to the claim. Where the defence is based upon facts, in the sense that material alleged by the plaintiff in his summons…, are disputed, or new facts are alleged constituting a defence, the court does not attempt to decide these issues or to determine whether or not there is a balance of probabilities in favour of one party or the other.

All that the court enquires into is:

(a) Whether the defendant has fully disclosed the nature and grounds of his defence and the material facts upon which it is founded; and

(b) Whether, on the facts so disclosed, the defendant appears to have, as to either the whole or part of the claim, a defence which is bona fide and good in law.”

On the facts so disclosed in casu, I am persuaded that the respondent's defence is bona fide and good in law.

I also derive solace in reaching this conclusion from the salutary words of GUBBAY JA…, in Jena v Nechipote 1986 (1) ZLR 29 (S)…, where the LEARNED JUDGE OF APPEAL held:

“All the defendant has to establish in order to succeed in having an application for summary judgment dismissed is that there is a mere possibility of his success; he has a plausible defence; there is a triable issue; or there is a reasonable possibility that an injustice may be done if summary judgment is granted.”

The respondent's explanation, expounded above, right through its chronology of events pertaining to the disposal of residential properties, does amount to a trial issue. There exists a reasonable possibility of an injustice being done if summary judgement were to be granted.

I am constrained to utter the following strictures concerning the applicant's obduracy.

As stated above, there are scores of similar cases involving the applicant and its former employees. One such is Ashanti Goldfields Zimbabwe Limited t/a Freda Rebecca Mine v Joachim C Nguwo HH58-12 wherein I dismissed a similar application on the same grounds.

The applicant seems to be engaged in a process of judge-hunting because several similar cases are either pending before other judges or have been dealt with meeting with the same fate of dismissal.

In 1. Simbarashe Antonio v Ashanti Goldfields Zimbabwe Limited & Registrar of Deeds; 2. Kingstone Mujati v Ashanti Goldfields Zimbabwe Limited t/a Freda Rebecca Mine & Registrar of Deeds; and 3. Ashanti Goldfields Zimbabwe Limited v Kwadzanayi Bonde HH135-09 MAKARAU JP…, following a full trial based on similar claims, distinguished Ashanti Goldfields Zimbabwe Limited v Clemence Kovi SC07-09 which the applicant seems to rely on in its claims and held that the facts in HH139-09 established a sale.

Those facts fall on all fours with the facts in casu as well as those in Ashanti Goldfields Zimbabwe Limited t/a Freda Rebecca Mine v Joachim C Nguwo HH58-12 in which I dismissed the application for summary judgment and gave the respondent unconditional leave to defend.

Although the judgment in 1. Simbarashe Antonio v Ashanti Goldfields Zimbabwe Limited & Registrar of Deeds; 2. Kingstone Mujati v Ashanti Goldfields Zimbabwe Limited t/a Freda Rebecca Mine & Registrar of Deeds; and 3. Ashanti Goldfields Zimbabwe Limited v Kwadzanayi Bonde HH135-09 was appealed against, and the appeal is still pending, it is only prudent and proper that the applicant should await its outcome and stop judge hunting in order to avoid creating a multiplicity of contradictory judgments involving the same issue thereby causing confusion and injustice.

Since the facts and argument in casu fall on all fours with the cases dealt with by MAKARAU JP…, cited supra, and Ashanti Goldfields Zimbabwe Limited t/a Freda Rebecca Mine v Joachim C Nguwo HH58-12 I dealt with supra, the present application for summary judgement be and is hereby dismissed and the defendant is given unconditional leave to defend the action.

The applicant is ordered to pay the costs of this application.

This is an application for summary judgment wherein the applicant seeks the eviction of the respondent and all those claiming occupation through him from House Number 1131, Chipadze Township, Bindura and costs of suit.

The facts of this matter are largely common cause:

The respondent was employed by the applicant. With the passage of time, the apparently benevolent employer, being the applicant, decided to sell some of the houses to some employees who were sitting tenants.

Some sort of agreement was entered between the applicant, represented by its General Manager and Financial Director, and the employees, represented by the Workers Committee members being the Chairman and two Committee members.

The said agreement or memorandum is dated 1 December 2003 and is in the following terms;

“MEMORANDUM OF AGREEMENT BETWEEN ASHANTI GOLD FIEDS MANAGEMENT AND EMPLOYEES

Ashanti Goldfield Zimbabwe agrees to dispose of its housing units situated in Chiwaridzo, Grey Line Flats, and Low Density to its employees, who are sitting tenants, effective 01 December 2003. Find the agreed prices attached.”

The said agreement is attached to the applicant's founding affidavit as Annexure F1 to F4.

Attached to this agreement is a schedule which has a list of the employees involved, the house they occupy, the value of each house (in Zimbabwe dollars) and the monthly instalments or repayment each employee was to pay.

The respondent occupied House No.1131 which was then valued at Zimbabwean dollars $1,200,000 and was to pay a monthly instalment of Zimbabwe $20,000.

Pursuant to the signing of the Memorandum of Agreement explained above, and on 12 December 2003, the applicant and the respondent entered into what is called “Agreement of Lease” in which the applicant agreed to lease House No.1131 Chipadze, Bindura (the house) to the respondent for a period of 60 months (5 years) commencing 1 January 2004 at the monthly rentals of Zimbabwean $20,000 which was reviewable in accordance with Annexure 'A' to that lease agreement (which provided for revaluation of the property whenever employees are awarded a salary increment).

These monthly rentals were deducted from the respondent's salary.

Clause 3 of the lease agreement provided for the option to buy the house. It provides as follows;

“3. OPTION TO PURCHASE

3.1. The lessee shall have the option to purchase the property after sixty months.

3.2. The rentals paid by the Lessee to the Lessor in terms hereof shall be taken and be deducted from the amount due in respect of the purchase price determined in accordance with the provisions of Clause 3.1. (above).”

The lease agreement is signed by a representative of the applicant and the respondent.

From other decided cases I have been referred to, dealt with by this court, it is common cause that a number of employees entered into such a lease agreement.

It would appear to my mind, that, the dispute in this case, and other cases already dealt with by this court, relates to interpretation to be accorded to the “Memorandum of Agreement” dated 1 December 2003 and the lease agreement dated 12 December 2003 and the relationship between the two documents.

I shall revert to this point later.

After the issuing of the Memorandum of Agreement, on 1 December 2003, and before the signing of the lease agreement, on 12 December 2003, the Workers Committee, through what was now called the Housing Committee, issued out a Memorandum to all employees of the applicant copied to the applicant.

This Memorandum explained the Agreement reached on 1 December 2003. Most importantly, it invited the employees who were sitting tenants to take up the offer to buy the houses.

The relevant part of this Memorandum, dated 2 December 2003, reads as follows;

“Please note that you have until February 29, 2004 to decide whether to purchase the house you are living in or not, after which date the offer will be extended to an employee who is willing to purchase the property. The offer is now open, therefore, employees who are ready can see the Members to formalise the purchase.”…,.

It was after this invitation that the respondent entered into the lease agreement with the applicant on 12 December 2003.

In addition to that, the respondent has attached as Annexures A1 to A3 his payslips which reflect that money was deducted from his salary which money is reflected as “rent to buy”.

The payslips are as follows;

A1, dated 31 October 2004, has a deduction indicated as “Bal rent to buy $52,755”

A2, dated 25 March 2004, has a deduction indicated as “Bal rent to but $116,000”

A3, dated 25 June 2004, has a deduction reflected as “Bal rent to buy $56,895”

The respondent has also attached to his opposing affidavit a memorandum from the applicant, written by the applicant's Financial Controller to the respondent and copied to the Housing Committee dated, 14 March 2004. Its contents are as follows;

“This memo serves as an acknowledgement that we have received $1,100,000 (one million one hundred thousand dollars) as payment towards yours house. The outstanding balance is now $60,000 (sixty thousand dollars).”

It is common cause that the respondent, who was employed by the applicant, and was the sitting tenant in this house as at 1 December 2003, was summarily dismissed on 15 July 2009 following a disciplinary hearing held in terms of their Code of Conduct.

This means, that, as at the date of his dismissal, the respondent has been in occupation of the house for a period of sixty seven (67) months - which is in excess of the sixty months stipulated in the Lease Agreement dated 12 December 2003.

After the dismissal, on 15 July 2009, the respondent, on 4 September 2009, was advised to vacate the house on the basis that the lease agreement which entitled him to occupy the house had lapsed due to the termination of the respondent's contract of employment (see Annexure D to the applicant's founding affidavit).

The respondent refused to vacate the house.

This prompted the applicant to issue summons out of this court in HC4395/09 (main matter) seeking the eviction of the respondent and all those claiming occupation through him and costs of suit.

The respondent entered an appearance to defend and filed a plea, which plea had been dismissed by the applicant as not raising a good prima facie defence, culminating in this application for summary judgement.

It is useful, at this stage, to deal with the respondent's plea (Annexure E to E4 to the applicant's founding affidavit).

In his plea, the defendant stated, that, prior to 1 December 2003, he was occupying the house in issue on the basis of the contract of employment and that since 1 December 2003 he was now occupying the house on the basis of a sale agreement.

The respondent said he has since fully paid for the house and awaits the transfer of the house into his name.

It is the respondent's contention, that, the lease agreement dated 12 December 2003 was the vehicle through which the respondent, and other employees, purchased the houses as they paid for the houses through the process of rent to buy with the monthly repayments deducted from their salaries.

The respondent, in his plea contends, that, he has now acquired rights and interest in the same house hence the applicant cannot evict him from the house.

In fact, the respondent proceeded to file a counter-claim seeking an order to compel the applicant to transfer its rights, interest, and title in the said house to the respondent within 30 days of the grant of such an order and costs of suit.

The question to be addressed in this matter is whether, given the facts I have painstakingly outlined, the applicant is entitled to this extraordinary remedy in the form of a summary judgment?

An application for summary judgment is made in terms of order 10 Rule 64 of the High Court Rules 1971 in circumstances where the applicant is of the belief that the respondent has no bona fide defence to his action.

The respondent may oppose such an application in terms of Order 10 Rule 66(1)(b) of the High Court Rules by showing that he has got a prima face defense to this action.

The law, in relation to the requirements for granting a summary judgment, is clear.

The old case of Roscoe v Stewart 1937 CPD 138 which is cited by the celebrated authors HERBSTEIN and Van WINSEN – Civil Procedure of The Superior Courts In South Africa, 2nd Edition…, makes the point, that, summary judgement is a remedy designed to eliminate or dispose of bogus defences and defences which are bad at law.

The mischief which is curbed by this drastic remedy is to prevent unscrupulous litigants seeking to delay a clear and just claim by raising frivolous defences: see Nedlaw Investments & Trust Corporation Limited v Zimbabwe Development Bank SC05-00 in which it was clearly stated that;

“…, the quintessence of the drastic remedy is that a plaintiff, whose belief is that the defendant's defence is not bona fide and entered solely for dilatory purposes should be granted immediate relief without the expense and delay of a trial.”

In order to successfully fend off an application for summary judgment, a defendant has to show that he has a good prima facie defense to the action.

Our courts have had the opportunity to define what constitutes a good prima facie defence.

In the case of Hales v Doverick Investments (Pvt) Ltd 1998 (2) ZLR 235 (H)…, MALABA J…, has this to say;

“…, he must at least disclose his defense, and material facts upon which it is based, with sufficient clarity and completeness to enable the court to decide whether the affidavit discloses a bona fide defence: Haharaj v Barclays National Bank Ltd 1976 (1) SA 418 at 426D…, the statement of material facts (must) be sufficiently full to persuade the court that what the defendant has alleged, if proved at trial, will constitute a defense to the plaintiff's claim.”

Having laid out these principals of law applicable to this case, I now proceeded to apply these principles to the facts of this case.

The applicant believes, that, the appearance to defend entered by the respondent, and his subsequent plea, do not disclose a bone fide defence but was solely entered for purposes of delay.

In argument, the applicant submitted, that, there was never an agreement of sale between the applicant and the respondent.

It is the applicant's view, that, the memorandum of agreement, dated 7 December 2003, cannot be construed as an agreement of sale, and, reliance was placed on the case of Ashanti Goldfields Zimbabwe Ltd v Clement Kovi SC07-09 in which CHEDA JA had to interpret this same document and clearly stated, that, it cannot be said to be an agreement of sale.

Similarly, the applicant submitted, that, the lease agreement, dated 12 December 2003, cannot be construed also on an agreement of sale as it merely provides, in Clause 3, that, an option to purchase this property would be offered to the respondent after sixty months.

The applicant's case, therefore, is that the agreement of lease, having been terminated after the respondent left the employ of the applicant, the respondent has no right, whatsoever, to remain in the house as the applicant remains the registered owner of the house.

While it is correct, that, the pronouncements of the Supreme Court are binding to this court, I believe the case in which the applicant seems to have reposed all his faith in, of Ashanti Goldfields Zimbabwe Ltd v Clement Kovi SC07-09, can be distinguished from the facts of this case.

In fact, MAKARAU JP…, in a number of cases involving the applicant and its employees, in Antonio v Ashanti Goldfields Zimbabwe & Anor; Mujati v Ashanti Golfields Ltd & Anor; Ashanti Goldfieds Zimbabwe Ltd v Bonde 2009 (2) ZLR 371 (H)…, distinguished Ashanti Goldfields Zimbabwe Ltd v Clement Kovi SC07-09 as follows;

“I am bound by all the decisions of the Supreme Court on points of law. Where, however, the facts that were placed before the Supreme Court are different from the facts before me, I believe I am at liberty to interpret their facts in light of the law handed down by the Supreme Court. The doctrine of stare decisis applies to points of law and not to factual disputes.”

A number of my brother and sister judges who have been seized with matters involving the applicant and its employees, in relation to these houses, have adopted the approach enunciated by MAKARAU JP…, in arriving at a different conclusion, on the facts presented in each particular case, despite the sentiments expressed in Ashanti Goldfields Zimbabwe Ltd v Clement Kovi SC07-09 in relation to the Memorandum of Agreement, dated 7 December 2003, and the Lease Agreement dated 12 December 2003.

Few examples are sufficient to illustrate this point.

In the case of Ashanti Goldfields Zimbabwe Ltd v Jhafati Mdala HC5664/07 CHATUKUTA J, after a protracted trial, did find, that, on the facts presented before her, inclusive of the Memorandum of Agreement dated 7 December 2003 and the Lease Agreement dated 12 December 2003, indeed, Ashanti Goldfields Zimbabwe Ltd had sold the house to the defendant.

In the case of Ashanti Goldfields Zimbabwe Limited t/a Freda Rebecca Mine v Shingirai Matimura & Ors HH54-11, GOWORA J…, declined to grant a summary judgment wherein the applicant had sought the eviction of the respondents; whilst the respondents had advanced a similar argument like in the instant case. Indeed, the Memorandum of Agreement dated 7 December 2003 and the Lease Agreement, similar to one dated 12 December 2003, were some of the documents in issue in that case.

Lastly, in the case of Govha v Ashanti Goldfields Zimbabwe t/a Freda Rebecca Mine & Anor HH48-12, and, in Ashanti Goldfields Zimbabwe Limited t/a Freda Rebecca Mine v Ephraim Pfidze HH347-12 MATHONSI J, in both cases, faced with facts almost on all fours with the present case, declined to grant a summary judgement in both cases for the eviction of the respondents (employees).

It is clear from the facts of this case that the respondent has raised a good prima facie defence to the action for eviction.

The Memorandum of Agreement, dated 1 December 2003, which I have alluded to in my introductory remarks, shows, that, the respondent was one of the sitting tenants who were eligible to purchase the house in issue. The respondent contends, that, he acted in terms of the Memorandum, dated 2 December 2013, which invited all employees who were sitting tenants to exercise the offer to purchase the houses as at 29 February 2004.

In fact, the respondent argues, that, he proceeded, in exercising this option, to enter into a lease agreement, dated 12 December 2003, which he described as the vehicle with which the employees were to purchase the houses, as they all started to pay what was called “rent to buy”.

Indeed, the respondent attached some of his payslips, for 2004, which show that monthly deductions in various amounts were made as “rent to buy”.

In addition to that, the respondent has included a memorandum from the applicant, addressed to him, acknowledging receipt of $1,100,000 towards the purchase of house, and indicating that outstanding balance as $60,000 only.

As already stated, the respondent was in occupation of this house (as a sitting tenant) for a period in excess of 60 months (Clause 3 of the lease agreement) before he was dismissed from work and the lease agreement purportedly terminated.

Considering all these the factors placed before the court by the respondent, one cannot say, with certainty, at this stage, that the respondent did not exercise the option to purchase the house in issue.

The applicant has not been able to meaningfully explain why, after a period of 60 months, and in view of the proof of monthly deductions and confirmation by the applicant of such payment as part of the purchase price, in March 2004, the applicant is still of the view that the respondent did not purchase the house.

I am satisfied that the respondent has presented an arguable case.

It cannot be said that the defence raised by the respondent is simply raised for purposes of delaying the inevitable. It would therefore be unfair and improper, and this stage, to close the door to the defendant and deny him the opportunity to defend the claim.

On the facts before me, it cannot be said, that, the applicant's case is unanswerable and unassailable.

The parties should be allowed to have their day in court and present evidence on whether the respondent exercised the right to purchase the house in issue and paid the full purchase price.

The claim for eviction, at this stage, is premature.

The application for summary judgment is therefore without merit. In the result, the summary judgement application is dismissed with costs.

If seems to me, that, the illegality conducted by the appellant would obviously impact the decision on whether or not to waive the penalty equivalent to the unpaid non-residents tax on fees under paragraph 6(2) to the Schedule. If adjudged illegal, then, it would not qualify for waiver as the intention on the part of the appellant would be to evade withholding such tax arising from any payments from its local foreign currency account.

The appellant averred, that, it made no payments to the agents. The agents simply deducted the fees due to them offshore before making telegraphic transfers into the evidence accounts at the appellant's local bankers.

Counsel for the appellant submitted, that, in those circumstances, there was no amount against which tax could be withheld.

Like in G Bank Zimbabwe Ltd v Zimbabwe Revenue Authority HH207-15, counsel for the appellant relied on the decision of this Court in Sunfresh Enterprises (Pvt) Ltd t/a Bulembi Safaris v Zimbabwe Revenue Authority 2004 (1) ZLR 506 (H) which appeared to suggest, that, the local safari operator was not a payer of the commission that was deducted offshore from the overall fees due to him in Zimbabwe.

The facts in that case are unclear.

They appear in the recitation of the taxman's arguments on pp508G and 509G of the report. It would appear, that, the safari operator provided the foreign independent operators with the gross value of its hunting services. Foreign prospective hunters paid this amount to the foreign independent operators who, in turn, deducted some agreed amounts as commission before remitting the balance to the account of the safari operator.

CHEDA J held, that, the source of the payment was from outside Zimbabwe, and, for that reason, the payment did not constitute fees. He also held, that, as the payment had been made to the agent by the prospective hunter and not by the safari operator, the safari operator was not the type of payer contemplated by the Seventeenth Schedule to the Income Tax Act.

In G Bank Zimbabwe Ltd v Zimbabwe Revenue Authority HH207-15 …, I said of Sunfresh Enterprises (Pvt) Ltd t/a Bulembi Safaris v Zimbabwe Revenue Authority 2004 (1) ZLR 506 (H)…,:

"If the commission in the Sunfresh case was deducted from the overall hunting fee remitted to the safari operator, as submitted by Mr de Bourbon, I would, with respect, differ from the finding of CHEDA J. The payment by the foreign client to the foreign based agent, in my view, would simply constitute a prepayment on behalf of the safari operator. It would have been subject to withholding tax."

I remain of the view, that, if the deduction of the commission was made from the total package charged by safari hunting services from Zimbabwe, then, it would constitute an the safari operator to the independent agent from moneys due to the I could have found that the source of the payment was from the originating cause of the payment was from the hunting services in Zimbabwe.

The words "from a source in Zimbabwe" denote the originating cause.

In K v Commissioner 1990 (1) ZLR (H)…, SMITH J stated that:

"I accept, that, it is settled law that the source of any payment means the originating cause thereof, and, prima facie, that would be where the work was performed - see Commissioner of Taxes v Shein 1958 R&N 384 (FSC) at 387E; 1958 (3) SA 14 (SC) at 16H (also (1958) 22 SATC 12) where TREDGOLD CJ said:

'It may be accepted, that, prima facie, the test of the source of a payment for services rendered is the place where those services are rendered.'

The learned CHIEF JUSTICE went on, however, to say, that, the ultimate test of source is the originating cause."

I would, for these reasons, disagree with the decision in Sunfresh Enterprises (Pvt) Ltd t/a Bulembi Safaris v Zimbabwe Revenue Authority 2004 (1) ZLR 506 (H) and would therefore decline to follow it.

There is also a more fundamental reason for rejecting Sunfresh Enterprises (Pvt) Ltd t/a Bulembi Safaris v Zimbabwe Revenue Authority 2004 (1) ZLR 506 (H) and the argument advocated by counsel for the appellant.

The provisions of paragraph 1(2)(c) to the Seventeenth Schedule of the Income Tax Act provide that "fees shall be deemed to be paid to the payee if they are credited to his account or so dealt with that the conditions under which he is entitled to them are fulfilled, whichever occurs first."

I understand this provision to mean, that, even though the actual payment is pending, if the payer, in this case the appellant, has credited the account of the payee, the agent, with the fees, the payer is deemed to have paid the fees.

This first rung does not apply to the facts of this case.

The second rung deems the fees paid where such fees are due and payable and the payer makes prior arrangements for their payment. The payer thus incurs an unconditional liability to pay and arranges for the payment of such fees.

In the present case, the fees became due and payable to the agent and the appellant incurred an unconditional liability to pay each time a sale was made.

The arrangements that were made, in respect of payment, before the payment took place were that the agent would retain the fees from the gross FCA value of the exports receipts.

It seems to me, that, the making of the sale, together with these prior arrangements, is deemed to constitute payment of the fees by the second rung of paragraph 1(2)(c) to the Seventeenth Schedule.

The argument advanced by counsel for the appellant, that liability for the appellant was based on actual payment, flounders on the provisions of the second rung of paragraph 1(2)(c) to the Seventeenth Schedule of the Income Tax Act.

In any event, the agreements in the present case, in terms of clause 5, are governed by the is inter alia applicable to this case. CHRISTIE, in Business Law in Zimbabwe (Juta 1998 reprinted 2014)…, provides the working definition of agency in these words:

"Agency may be defined as a contract whereby one person (the principal) employs another to enter into contractual relationships binding between him and third parties.”

LEE and HONORE in The South African Law of Obligations (Butterworths 1950) are to the same effect. In para 606 the learned authors write:

"A contract of agency is a contract whereby one person (termed the agent) agrees to represent another (termed the principal) in dealings with third parties."

The learned authors go on to explain, in para 658, that:

"An agent contracting as agent, whether for a named or unnamed principal, does not generally render himself personally liable or acquire rights under a contract made with third parties, but, he may contract in such terms as to do so."

Again, SILKE, in The Law of Agency in South Africa 3rd ed…, provides a more illuminating definition of agency in these words:

"The essence of the modern view of agency is that there must be a third party in contemplation and the agent acts purely as a channel bringing the principal into legal relations of a contractual nature with the third party. The acts of the agent are done in the name of the principal and are deemed to be the acts of the principal himself, ensuring to his benefit or rendering him liable, without any benefit accruing or liability attaching to the agent."

The academic writers make the self-evident point, that, an agent acts for the principal and its actions are ascribed to the principal.

The deduction of the commission from the gross FCA value of the exports by the agent, by operation of law, are attributed to the appellant, who, it is common cause, is resident within Zimbabwe.

It cannot lie in the mouth of the appellant to protest that it made no payment to the agents.

I find that it did.

It was obliged, by paragraph 2(1) of the Schedule, to withhold non-residents tax on fees. It failed to do so. It was therefore legally liable to pay such fees under the provisions of paragraph 6 of the same Schedule.

I therefore find, that, the Commissioner correctly fostered liability on the appellant.

The appeal, based on the decision of the Commissioner, is dismissed.

I do not find the grounds of appeal to have been frivolous. In accordance with the provisions of section 65(12) of the Income Tax Act, I therefore make no order as to costs.

Accordingly, the appeal is dismissed.

On 12 November 2019, the court sitting at Mutasa Magistrates Court granted a judgment in favour of the respondent herein and ordered as follows:

1. That the defendant be ordered to pay US$314,112=68.

2. That the defendant be ordered to pay interest at a present rate.

3. That the defendant pays costs of suit.

On 18 November 2019, the appellant noted an appeal against the whole final judgment and outlined the grounds of appeal as follows:

“GROUNDS OF APPEAL

1. The court a quo's finding is grossly erroneous in that it orders the appellant to pay interest twice to the respondent, contrary to the basic tenets of the law.

2. The award of 0.1% on the gross revenue to the respondent, by the court a quo, is erroneous and ought to be impeached on the following basis:

(a) That it was not sought and pleaded in the summons; and

(b) There is no evidence that supports the award.

3. The court a quo committed a gross misdirection in calculating 10% commission based on an incorrect figure.

4. The court a quo erred and committed a gross irregularity in failing to make a finding that the respondent was in breach and thus was not entitled to the commission awarded to it.

5. The court a quo erred and grossly misdirected itself in making a finding that the respondent reduced the tax obligation of the appellant to Zimbabwe Revenue Authority for the year 2013.

6. The court a quo grossly erred in awarding the claim in the denomination of United States Dollars instead of Real Time Gross Settlement denomination.

7. The court a quo erred in misinterpreting the meaning of 10% of the reduced debt.

8. The court a quo erred in making a finding a fact that the appellant was liable to pay to the respondent, a position of the various amounts claimed contrary to evidence on record that the respondent did not have expertise to carry out such works and that there was non-compliance by the respondent to cause a certificate to be issued by the respondent's accountants certifying reasonable terms of the amended agreement of service.”

The appellant prayed that the appeal succeeds and the order of the court a quo be set aside and substituted by one dismissing the plaintiff's claim with costs.

On 28 November 2019, the respondent filed a cross-appeal and sets out the grounds of the cross appeal as follows:

“GROUNDS OF APPEAL

1. The court a quo grossly misdirected itself in terms of the law wherein it granted costs of suit on ordinary scale despite the parties having agreed, that, in the event of litigation, costs were to be granted on attorney-client scale.

2. The court a quo grossly misdirected itself at law by failing to grant interest of 5% per month from the date of default to date of full payment which interest had been agreed by the parties.

3. The court a quo grossly misdirected itself in terms of the law by failing to grant the respondent the sum of US$500 being the agreed amount for monthly service fees which the respondent had proved to be due to it and appellant had not contested.

4. The court a quo grossly misdirected itself at law by failing to grant collection commission in terms of the Law Society By-Laws which the parties had agreed upon and respondent had claimed in the summons.

5. The court a quo grossly misdirected itself by erroneously calculating the 10% tax reduced fees for the year 2013.”

The respondent prays, in its cross-appeal, that, the cross appeal be upheld and that the relevant part of the judgment of the court a quo be set aside and substituted with the following:

“(a) The appellant be and is hereby ordered to pay costs of suit on attorney-client scale.

(b) The appellant be and is hereby ordered to pay interest at rate of 5% per month from the date of default until the date of full and final payment of the debt as agreed between the parties.

(c) The appellant be and is hereby ordered to pay US500 to respondent being the outstanding service fees for monthly returns VAT, PAYE and QDP.

(d) The appellant be and is hereby ordered to pay collection commission in terms of the Law Society By-Laws as agreed between the parties.

(e) The appellant be and is hereby ordered to pay for the tax reduction fees in the sum of the amount of US$40,848=21 for the year 2013.”

The plaintiff (now respondent) is Clearsky (Private) Limited trading as Fool-vest Financial Services, a company duly registered in terms of the law of Zimbabwe. The defendant (appellant) is Ayan Trading (Private) Limited, a company incorporated in terms of the laws of Zimbabwe whose registered business office is 113 Herbert Chitepo Street, Mutare.

Sometime in 2016, the appellant instructed the respondent, a tax accounting services contract and entered into a written agreement and key to the agreement:

(i) The respondent was to offer tax accounting service to the appellant.

(ii) The tax management fees for tax year 2009 to 2013 would be charged at 10% of the tax debt reduced for each year under audit.

(iii) The appellant would pay US$500 per month as services fees for monthly returns of VAT, PAYE and QPD.

(iv) Preparation of ITF12C Returns, including amended ITF12 for the previous years would be charged at 0.1% of Annual Gross Revenue.

(v) US$25 per hour would be charged for attending meeting and preparation of reports or any other correspondences.

(vi) That 5% interest per month shall accrue against any outstanding amount in the event of default of payment by the appellant.

(vii) That, in the event of termination of services, the respondent shall charge fees for service rendered until such termination and the appellant shall be liable to pay 10% of the tax debt reduced at the time of termination which shall be due and payable forthwith.

The respondent rendered its services to the appellant from the date of the agreement until 26 June 2017 when the appellant terminated the contract.

During the term of the contract, the respondent would raise its fees from time to time, but, the appellant defaulted payment such that interest, at the rate of 5% per month, had been accruing on the outstanding amount.

At the time of termination of the agreement, the appellant was cumulatively liable to the respondent in the sum of US$554,065=93 inclusive of default interest for services which had been rendered to the appellant.

In terms of the agreement between the respondent and the appellant, the parties agreed, that, the appellant shall be liable to pay costs of suit on a legal practitioner-client scale together with collection commission in terms of the tariff of the Law Society of Zimbabwe.

The respondent claimed for the following:

(a) Payment of US$554,065=93 by the appellant, being the outstanding fees for the services rendered to the appellant by the respondent.

(b) Collection commission in terms of the Law Society by-laws.

(c) Costs of suit on legal practitioner-client scale.

(d) 5% interest per month to be calculated on the outstanding amount on 27 June 2017 until full payment of the outstanding amount.

The appellant, in its plea to the respondent's claim, denied entering into any agreement with the respondent.

It further denied, that, the respondent was in the business of offering tax accounting services and lacked technical expertise to carry out such tax accounting services.

It denied that the respondent satisfied its mandate towards the appellant.

The appellant also denied that there was never any reduced tax debt after audit by Zimbabwe Revenue Authority (ZIMRA) during the period in question which entitled the respondent to a 10% charge on reduced debts.

The appellant contended, in its plea, that, the respondent did not specifically plead such reduced tax debts to justify the amount of $50,000; the appellant also blamed the respondent for miscalculating the amount.

The applicant further denied that the respondent rendered services to it.

The appellant pleaded, that, the respondent did a dis-service for it and contemplated a counter claim.

The agreement alluded was relating to provision of financial services as opposed to attending to Zimbabwe Revenue Authority (ZIMRA) tax matters.

It denied that any invoices were raised and denied owing the respondent any money.

It stated in its plea, that, the respondent was liable to it in the sum of US$6,000,000 (six million dollars).

It prayed that the respondent's claim be dismissed with costs on attorney-client scale.

It is necessary to briefly look at the respondent's evidence.

Daniel Mahonye, testifying for the respondent, told the court a quo, that, in 2016, the respondent was engaged by the appellant to do tax services; the operative agreement was signed on 1 April 2016 but was to become effective with effect from 1 July 2016.

He reiterated the terms of the agreement, that, the appellant was going to pay a premium of 10% of the reduced tax debt for the period stretching from 2009 to 2013. The appellant also agreed to pay the $500 per month for the services performed by the respondent in meeting the appellant's obligations towards the Zimbabwe Revenue Authority (ZIMRA).

The respondent prepared ITF12C as well as amended ITF12C returns and reiterated, that, the appellant undertook to pay 0.1% of the gross revenue for year accruing to the appellant, and, according to his evidence, the total for such gross revenue from 2010 to 2016 totalled $295,070=11.

Interest on that capital debt due to the respondent from the annexed schedule attached to the respondent's summons added up to $149,956=60.

In 2013, the Zimbabwe Revenue Authority (ZIMRA) raised a debt of $408,482=08 and the respondent's charges, according to the agreement, was 10% which computes to an amount of $40,848=20 due to the respondent.

Much of Mr Mahonye's evidence on these figures was not controverted by the appellant during trial and we take it as issues of common cause and should not detain us....,.

The tax audit for 2013 was $408,482=08; the respondent contends that its commission was 10% of this amount which would come up to $40,848=20.

The appellant contends, that, what was due to the respondent is 10% of the $40,848=20 which would be the figure of $4,084=82 on p20 of the record.

It now becomes a matter of rendition in our view.

Clause 3(1) of the agreement provides that:

“Tax management fees for tax year 2009 to 2013 is 10% of tax debt reduced for each year under audit…,.”

On p31 of the record of proceedings, the respondent clearly indicates, under the 5th column 'Tax Debt Reduced' the amount of $408,482=08 and Amount Due to the respondent under column 6 is $40,848=21.

The court a quo correctly granted the 10% collection commission, but, committed a miscalculation of 10% of the tax debt reduced coming out with the figure of $4,084=82.

We agree with the respondent in its cross appeal, that, there was a mathematical calculation error and conclude that the correct amount of collection commission due to the respondent is $40,848=21 not $4,084=82.

The appellant's third ground of appeal fails and the respondent's cross-appeal on that aspect ought to succeed.

The four applicants are the fathers and guardians of their respective minor daughters, all four of whom are pupils at Arundel School, a private girls school situated in Harare.

The first and second respondents are the Trustees and Headmistress of the School.

The third respondent is the Minister of Primary and Secondary Education, cited in his official capacity, and the fourth respondent is the Attorney-General, also cited in his official capacity.

The applicants seek various declarators and consequential relief in respect of the alleged violation of their daughters constitutional rights. They also seek an order for costs against the first and second respondents on a legal practitioner and client scale.

The first and second respondents are opposed to the application and aver that it be dismissed with costs.

The third and fourth respondents have indicated that they will abide by the Court's decision.

Before 2015, the long-established practice at the School was to commence the day with prayers in the School chapel. Pupils were free to attend if they so wished and a separate room was set aside for those of other faiths who did not attend chapel on religious grounds. This inter-denominational position was confirmed by the School's website on the internet.

The applicants and their daughters are all practising Jehovah's Witnesses. Their beliefs are not similar to those of other Christian denominations.

Upon application to the School for the admission of their daughters, each of the applicants completed a standard application form in which they indicated that they were Jehovah's Witnesses. Their daughters were duly accepted for admission.

At the beginning of 2015, a new Headmistress was appointed to run the School.

She sought to introduce compulsory chapel attendance for all pupils at the School in order to reinforce its collegiality. The applicants wrote several letters to the Headmistress as well as the School's lawyers to register their complaints. On 17 March 2015, after taking legal advice, the Headmistress wrote to the applicants insisting that their daughters were required to attend chapel and that, if they failed to comply, they would be deemed to have been voluntarily withdrawn and removed from the School.

On 19 March 2015, after the girls refused to attend chapel and surrendered their books, they were told to go home.

The applicants then filed an urgent application to the High Court, in Case No.2717/15. Following a consent order granted on 27 March 2015, the girls were allowed to continue to attend the School, without being compelled to attend chapel, pending the determination of the present application.

The applicants aver, that, freedom of conscience includes the right to practice and propagate one's religion as well as the right not to be compelled to subscribe to any religion.

In this respect, the actions of the Headmistress violate their daughters freedom of conscience and their right to protection against discrimination on the ground of religion.

Moreover, although any person is entitled to establish and maintain an independent educational institution, he or she cannot discriminate in the manner in which the institution is administered. Thus, the conduct of the Headmistress also violates their daughters right to education.

The applicants, accordingly, seek declarators that the respondents actions are in violation of their daughters freedom of conscience and religion, right to protection against discrimination, and right to education.

They also seek an order precluding the respondents from refusing the admission of their daughters to Arundel School on the basis of their religious beliefs and failure to attend chapel.

On behalf of the School, the Headmistress relies upon the standard enrolment form signed by the applicants upon the admission of their daughters into the School.

She avers, that, this agreement, which constitutes a binding contract, expressly provides, that, any latitude from chapel attendance is at her sole discretion and that her decision in that regard is final and binding.

The agreement also provides, that, any changes to the School rules must be observed and followed by the signatory parents and their daughters.

One of her functions is to articulate the values of the School, and, morning chapel is the only time when pupils come together in an environment most conducive for the values and ethos of the School to be properly impacted upon them.

It is not compulsory for any pupil to participate in any activity, such as singing or praying, or to abandon her beliefs during chapel. What is compulsory is that all pupils attend and evince respectful behaviour in chapel.

The applicants were not forced to enrol their daughters at the School.

They should respect the rights of the School's founding members who established an educational institution that conforms with and pursues their own values and beliefs. The School authority is constitutionally entitled to establish and maintain the School and impose reasonable rules to be followed at the School. It should not be precluded from pursuing its religious beliefs and insisting on anyone who joins the School to respect its views.

Such policy is reasonable and those who agree to join the School, despite their religious views, must be taken to have necessarily waived their own constitutional rights.

For the sake of completeness, it is necessary to set out the relevant provisions of the standard application form of admission to the School.

Upon signature, each of the applicants acknowledged and understood that his daughter had been accepted for entry as a day student at the School on the following express terms and conditions:

“4. That, the School's rules and regulations, as amended from time to time, shall bind and be observed by my daughter, and, insofar as they concern me, also by me. I further accept, that, by signing this enrolment contract I will be bound by the Arundel Parents Association constitution, which is available to me on request.

5. That, the School is founded on Christian principles, and all pupils are expected to comply with the rules and routines thus implied. No exemption from any part of the curriculum will be considered on religious grounds. Any latitude concerning Chapel attendance, holy days, special meal requirements, dress codes etc. will be at the sole discretion of the Head, whose decision will be accepted as final and binding on my daughter.”

Section 2 of the Constitution re-affirms the supremacy of the Constitution in terms that are significantly wider and more inclusive than those embodied in its precursor in the former Constitution, as follows:

“(1) This Constitution is the supreme law of Zimbabwe and any law, practice, custom or conduct inconsistent with it is invalid to the extent of the inconsistency.

(2) The obligations imposed by this Constitution are binding on every person, natural or juristic, including the State and all executive, legislative, and judicial institutions and agencies of government at every level, and must be fulfilled by them.”

Also relevant for present purposes is section 47 of the Constitution which recognises the existence of rights other than those contained in the Declaration of Rights:

“This Chapter does not preclude the existence of other rights and freedoms that may be recognised or conferred by law, to the extent that they are consistent with this Constitution.”

As I have already indicated, the specific relief sought by the applicants relates to the alleged violation of their daughters freedom of conscience and religion, right to protection against discrimination, and right to education, as enshrined in sections 60, 56 and 75 of the Constitution. These sections, in their relevant portions, provide as follows:

“56 Equality and Non-discrimination

(1) All persons are equal before the law and have the right to equal protection and benefit of the law.

(2)….,.

(3) Every person has the right not to be treated in an unfairly discriminatory manner on such grounds as their nationality, race, colour, tribe, place of birth, ethnic or social origin, language, class, religious belief, political affiliation, opinion, custom, culture, sex, gender, marital status, age, pregnancy, disability or economic or social status, or whether they were born in or out of wedlock.

(4) A person is treated in a discriminatory manner, for the purpose of subsection (3), if —

(a) They are subjected, directly or indirectly, to a condition, restriction or disability to which other people are not subjected; or

(b) Other people are accorded, directly or indirectly, a privilege or advantage which they are not accorded.

(5) Discrimination on any of the grounds listed in subsection (3) is unfair unless it is established that the discrimination is fair, reasonable and justifiable in a democratic society based on openness, justice, human dignity, equality and freedom.

(6)…,.”

“60 Freedom of Conscience

(1) Every person has the right to freedom of conscience, which includes —

(a) Freedom of thought, opinion, religion or belief; and

(b) Freedom to practice and propagate and give expression to their thought, opinion, religion or belief, whether in public or in private and whether alone or together with others.

(2) No person may be compelled to take an oath that is contrary to their religion or belief or to take an oath in a manner that is contrary to their religion or belief.

(3) Parents and guardians of minor children have the right to determine, in accordance with their beliefs, the moral and religious upbringing of their children, provided they do not prejudice the rights to which their children are entitled under this Constitution, including their rights to education, health, safety, and welfare.

(4) Any religious community may establish institutions where religious instruction may be given, even if the institution receives a subsidy or other financial assistance from the State.”

“75 Right to Education

(1) Every citizen and permanent resident of Zimbabwe has a right to —

(a) A basic State-funded education, including adult basic education; and

(b) Further education, which the State, through reasonable legislative and other measures, must make progressively available and accessible.

(2) Every person has the right to establish and maintain, at their own expense, independent educational institutions of reasonable standards, provided they do not discriminate on any ground prohibited by this Constitution.

(3) A law may provide for the registration of educational institutions referred to in subsection (2) and for the closing of any such institutions that do not meet reasonable standards prescribed for registration.

(4) The State must take reasonable legislative and other measures, within the limits of the resources available to it, to achieve the progressive realisation of the right set out in subsection (1).”

In support of their contention, that, their daughters right to education has been violated by the School, the applicants also rely upon section 4 of the Education Act [Chapter 25:04] which provides as follows:

“(1) Notwithstanding anything to the contrary contained in any other enactment, but subject to this Act, every child in Zimbabwe shall have the right to school education.

(2) Subject to subsection (5), no child in Zimbabwe shall —

(a) Be refused admission to any school; or

(b) Be discriminated against by the imposition of onerous terms and conditions in regard to his admission to any school;
on the grounds of his race, tribe, place of origin, national or ethnic origin, political opinions, colour, creed or gender.

(3)…,.

(4) Any person who contravenes subsection (2) shall be guilty of an offence and liable to a fine not exceeding level six or to imprisonment for a period not exceeding one year or to both such fine and such imprisonment.

(5) It shall be a defence in any criminal proceedings for an offence under subsection (2) for the accused person to show, that, though he committed the act alleged against him —

(a) He committed the act on the grounds of the creed of the child against whom the act was committed, but he did so because the school concerned is controlled by a bona fide religious organization and members of that religious organization or adherents of a particular religious belief are accorded preference in admission to that school; or

(b) He committed the act on the grounds of the gender of the child against whom the act was committed, but...,.”

Lastly, but very importantly, there is section 86 of the Constitution which permits the limitation of fundamental rights in the following circumstances:

“(1) The fundamental rights and freedoms set out in this Chapter must be exercised reasonably and with due regard for the rights and freedoms of other persons.

(2) The fundamental rights and freedoms set out in this Chapter may be limited only in terms of a law of general application and to the extent that the limitation is fair, reasonable, necessary and justifiable in a democratic society based on openness, justice, human dignity, equality and freedom, taking into account all relevant factors, including —

(a) The nature of the right or freedom concerned;

(b) The purpose of the limitation, in particular, whether it is necessary in the interests of defence, public safety, public order, public morality, public health, regional or town planning or the general public interest;

(c) The nature and extent of the limitation;

(d) The need to ensure that the enjoyment of rights and freedoms by any person does not prejudice the rights and freedoms of others;

(e) The relationship between the limitation and its purpose, in particular, whether it imposes greater restrictions on the right or freedom concerned than are necessary to achieve its purpose; and

(f) Whether there are any less restrictive means of achieving the purpose of the limitation.

(3) No law may limit the following rights enshrined in this Chapter, and no person may violate them —

(a) The right to life, except to the extent specified in section 48;

(b) The right to human dignity;

(c) The right not to be tortured or subjected to cruel, inhuman or degrading treatment or punishment;

(d) The right not to be placed in slavery or servitude;

(e) The right to a fair trial;

(f) The right to obtain an order of habeas corpus as provided in section 50(7)(a).”

As appears from sub-section (3) of section 86 of the Constitution, none of the rights allegedly violated in casu falls into the category of inviolable rights enumerated in that subsection.

Accordingly, in the event that the applicants are able to establish any violation of their rights, it will be necessary to measure such prima facie violation as against the rights and freedoms of others, in terms of subsection (1), and within the context of the permissible derogations contemplated in sub section (2)....,.

For the purpose of addressing the merits of this aspect of the matter, it is necessary to consider three separate but inter-related issues, to wit:

(i) The nature and scope of the applicants freedom of religion as guaranteed by section 60 of the Constitution.

(ii) Whether and the extent to which that freedom has been infringed by the School.

(iii) If so, whether any such infringement constitutes a permissible limitation by virtue of subsections (1), (2) or (3) of section 86 of the Constitution.

Subsection (1) of section 60 of the Constitution defines the right to freedom of conscience as including, inter alia, freedom of religion or belief and freedom to practise and propagate and give expression to one's religion or belief, whether in public or in private and whether alone or together with others.

Subsection (3) affirms the right of parents and guardians to determine, in accordance with their beliefs, the moral and religious upbringing of their minor children, provided they do not prejudice the constitutional rights of their children, including their rights to education, health, safety, and welfare.

The essence of the applicants religious credo, as appears from their founding papers, is that there is no hell of fire and torment; that places of worship should not contain any religious symbols; that religions and faiths should not be mixed; and that there can only be one truth from God - which truth they hold.

With specific reference to religious symbols at the School, they object to the three crucifixes atop, outside and inside the chapel, as well as the foundation stone at the entrance of the chapel. These symbols, so they believe, contravene the first Commandment against idolatry.

The fundamental doctrinal beliefs and practices of Jehovah's Witnesses may also be gleaned from the following article by JOHN GORDON MELTON in the online Encyclopaedia Britannica:

“Witnesses hold a number of traditional Christian views but also many that are unique to them. They affirm that God, Jehovah, is the most high. Jesus Christ is God's agent, through whom sinful humans can be reconciled to God. The Holy Spirit is the name of God's active force in the world. Witnesses believe that they are living in the last days, and they look forward to the imminent establishment of God's kingdom on earth, which will be headed by Christ and jointly administered by 144,000 human co-rulers (Revelation 7:4). Those who acknowledge Jehovah in this life will become members of the millennial kingdom; those who reject him will not go to hell but will face total extinction….,.

The Witnesses teachings stress strict separation from secular government.

Although they are generally law-abiding, believing that governments are established by God to maintain peace and order, they refuse, on biblical grounds, to observe certain laws. They do not salute the flag of any nation, believing it an act of false worship; they refuse to perform military service; and they do not participate in public elections….,.

The Witnesses distrust of contemporary institutions extends to other religious denominations, from which they remain separate. They disavow terms such as minister and church….,.

Witnesses also oppose certain medical practices that they believe violate Scripture. In particular, they oppose blood transfusions because of the scriptural admonition against the consumption of blood (Leviticus 3:17)….,.

In the early years of the movement, members met in rented halls, but, under Rutherford, the Witnesses began to purchase facilities that they designated Kingdom Halls….,. Each Kingdom Hall has an assigned territory and each Witness a particular neighbourhood to canvass….,.”

The following excerpt from Wikipedia, as at 19 December 2015, elaborates Jehovah's Witnesses aversion to the mixing of religions and their self-imposed injunction to remain separate from the world at large:

“Jehovah's Witnesses believe that the Bible condemns the mixing of religions, on the basis that there can only be one truth from God, and, therefore, reject interfaith and ecumenical movements. They believe, that. only their religion represents true Christianity, and that other religions fail to meet all the requirements set by God and will soon be destroyed. Jehovah's Witnesses are taught, that, it is vital to remain 'separate from the world'. The Witnesses literature defines the 'world' as 'the mass of mankind apart from Jehovah's approved servants and teach that it is morally contaminated and ruled by Satan. Witnesses are taught, that, association with 'worldly' people presents a 'danger' to their faith, and are instructed to minimize social contact with non-members to better maintain their own standards of morality.”

Counsel for the applicants places great reliance upon the case of Dzvova v Minister of Education, Sports & Culture and Others 2007 (2) ZLR 196 (S) for the broad submission, that, fundamental rights must invariably be respected.

In that case, the Supreme Court affirmed the general proposition, that, the rules of the school in question could not be applied to derogate from the constitutional rights of its pupils, including their freedom of religion.

However, the ratio decidendi of the Court was not predicated on any constitutional point, but, rather, on the principle that the power to make rules on school discipline and to regulate the admission, punishment, and expulsion of pupils was reposed in the Minister of Education and was therefore outside the remit of the school Head.

Consequently, Dzvova v Minister of Education, Sports & Culture and Others 2007 (2) ZLR 196 (S) does not, in my view, take the matter any further in resolving the issues at hand.

Moreover, it is also distinguishable from the factual situation in casu in that the applicant in that case had not subscribed to any contract of admission entitling the school to interfere with the enjoyment of his child's freedom of conscience and religion.

Another more recent case involving facts similar to those in Dzvova v Minister of Education, Sports & Culture and Others 2007 (2) ZLR 196 (S) is that of Kapasula & Others v The Headmistress Hermann Gmeiner High School N.O. & Others Case No. SC153-10.

The applicants daughters in that matter were allegedly excluded from enrolment to the first respondent's school because their heads had not been shaven or trimmed for religious reasons. This was in apparent contravention of the school's rules and regulations stipulating that all pupils must always be smart with short and neatly combed hair.

The first respondent's opposition, in the High Court, did not addresss the merits of the matter, but merely relied on the preliminary objections that the application was not urgent, and that, in any case, the laws prohibiting discrimination did not apply to the school since it was a private non-governmental institution.

On referral to the Supreme Court, under section 24(2) of the former Constitution, the Court was called upon to determine three issues:

(i) Whether the refusal to admit the children into the school on the basis of their failure to shave or trim their hair was discriminatory on the ground of creed in contravention of section 19(1) of the former Constitution;

(ii) Whether the decision of the school, to refuse admission into the school, was done under the authority of a law as envisaged in section 19(5) of the Constitution; and

(iii) If so, whether such law was reasonably justifiable in a democratic society.

The applicants argued, that, the first respondent's actions were clearly discriminatory and in contravention of section 19 of the Constitution. Furthermore, the school's rules and regulations did not constitute a law and were not made under the authority of any law, i.e. the Education Act or its subsidiary regulations.

The application before the Supreme Court was not opposed by any of the respondents.

In the event, the Court granted an order simply prohibiting the school from refusing the children's admission into the school on the basis of the length of their hair.

There appear to have been no written reasons for the judgment.

As with Dzvova v Minister of Education, Sports & Culture and Others 2007 (2) ZLR 196 (S), Kapasula & Others v The Headmistress Hermann Gmeiner High School N.O. & Others SC153-10 is clearly distinguishable from the situation in casu.

The school's rules and regulations were not authorised under any law within the contemplation of section 19 of the Constitution and were therefore patently ultra vires.

More significantly, the applicants in both cases had not subscribed to any binding contractual undertaking or commitment expressly and unequivocally relinquishing their rights and the rights of their children to abide by or enforce their religious beliefs and convictions without qualification.

Counsel for the respondents, submits, in reliance on a dictum drawn from Wittmann v Deutscher Schulverein Pretoria & Others 1998 (4) SA 423 (T)..., that “freedom of religion does not mean freedom from religion.”

In the instant case, so he argues, the applicants daughters are not being persuaded to change their religion or subscribe to other religious beliefs, but, are simply being required to attend an activity that forms part of the School's curriculum. Thus, the School cannot be said to have infringed any aspect of the right to freedom of religion as enunciated by the Canadian Supreme Court in R v Big M Drug Mart Ltd [1985] 1 SCR 295..., where it was stated that:

“The essence of the concept of freedom of religion is the right to entertain such religious beliefs as a person chooses; the right to declare religious beliefs openly and without fear of hindrance or reprisal; and the right to manifest religious belief by worship and practice or by teaching and dissemination.”

In Christian Education South Africa v Minister of Education 2000 (4) SA 757 (CC)..., freedom of conscience and religion was regarded as being integral to the dignity, growth, and self-worth of the individual:

“The right to believe or not to believe, and to act or not to act, according to his or her beliefs or non-beliefs, is one of the key ingredients of any person's dignity.

Yet, freedom of religion goes beyond protecting the inviolability of the individual conscience.

For many believers, their relationship with God or creation is central to all their activities. It concerns their capacity to relate in an intensely meaningful fashion to their sense of themselves, their community and their universe. For millions in all walks of life, religion provides support and nurture and a framework for individual and social stability and growth. Religious belief has the capacity to awaken concepts of self worth and human dignity which form the cornerstone of human rights. It affects the believer's view of society and founds the distinction between right and wrong. It expresses itself in the affirmation and continuity of powerful traditions that frequently have an ancient character transcending historical epochs and national boundaries.”

The importance of religious diversity in the educational sphere was highlighted by LANGA CJ in MEC for Education: Kwazulu-Natal & Others v Pillay 2008 (1) SA 474 (CC)..., as follows:

“As a general rule, the more learners feel free to express their religions and cultures in school, the closer we will come to the society envisaged in the Constitution. The display of religion and culture in public is not a 'parade of horribles' but a pageant of diversity which will enrich our schools, and, in turn, our country.”

Counsel for the applicants correctly notes, that, an essential component of the right to freedom of religion is the absence of coercion or restraint and that the freedom may be unjustly impaired by measures that compel anyone to act or refrain from acting in a manner contrary to one's religious beliefs.

This absence of compulsion is emphasised even in Wittmann v Deutscher Schulverein Pretoria & Others 1998 (4) SA 423 (T)...,.:

“Of course, the right of freedom of religion (in the case of religious minorities) and the right to freedom of thought, belief, and opinion (in the case of atheists and agnostics) entails that attendance may not be enforced. It must be voluntary. The right of non-attendance is expressly recognised in sections 14(2) of the interim Constitution and 15(2) of the Constitution. Attendance must be 'free and voluntary'. There may be no coercion, neither by rules nor by action, on the part of the authorities.”

Similarly, in MEC for Education: Kwazulu-Natal & Others v Pillay 2008 (1) SA 474 (CC)..., the underlying values of human dignity, equality, and freedom are underscored in the pursuit of religious practices:

“A necessary element of freedom and of dignity of any individual is an 'entitlement to respect for the unique set of ends that the individual pursues'. One of those ends is the voluntary religious and cultural practices in which we participate. That we choose, voluntarily, rather than through a feeling of obligation, only enhances the significance of a practice to our autonomy, our identity, and our dignity.”

These sentiments, against coercive conduct, are also sagaciously captured in R v Big M Drug Mart Ltd [1985] 1 SCR 295...,.:

“Freedom, in a broad sense, embraces both the absence of coercion and constraint, and the right to manifest beliefs and practices. Freedom means, that, subject to such limitations as are necessary to protect public safety, order, health, or morals or the fundamental rights and freedoms of others, no one is to be forced to act in a way contrary to his beliefs or his conscience.

What may appear good and true to a majoritarian religious group, or to the State, acting at their behest, may not, for religious reasons, be imposed upon citizens who take a contrary view. The Charter safeguards religious minorities from the threat of 'the tyranny of the majority.'”

To conclude on this aspect, there can be no doubt that the applicant's children are entitled to hold and practise their religious beliefs, whether within or without their homes, and within the precincts of the School.

It also cannot be doubted that the applicants are entitled, in accordance with their own beliefs, to shape the moral and religious upbringing of their children.

The applicants aver, that, to compel their daughters to attend chapel is contrary to their religious convictions because it entails the mixing of religious practices and attending church services in a building strewn with religious symbols. Therefore, their daughters do not wish to be present in the chapel.

Having regard to the authorities cited above, I take the view, that, the School's policy, of compelling the applicants daughters to attend chapel services, constitutes a prima facie infringement of their religious beliefs.

The practice and observance of their faith demands, that, they exclude themselves from any place of worship that contains any religious symbol, including the crucifix. It also demands that they abstain from any rite or ritual that involves the admixture of any religion other than their own.

By being compelled to enter the School chapel and attend the predominantly Anglican services conducted therein, they are being called upon to renounce, albeit temporarily, certain fundamental tenets of their faith that are designed to enhance their peculiar sense of religious and cultural identity as well as their dignity as self-professed Jehovah's Witnesses.

They can only be required to renounce those tenets if they choose to do so freely and voluntarily, or, in circumstances that are reasonable and justifiable having regard to the public interest or the rights and freedoms of others.

The critical question for determination in casu is whether or not the compulsion to attend chapel imposed upon the applicants daughters is constitutionally permissible in the circumstances under consideration.

In terms of section 86(2) of the Constitution, fundamental rights and freedoms may be limited “only in terms of a law of general application and to the extent that the limitation is fair, reasonable, necessary, and justifiable in a democratic society.”

In this respect, counsel for the respondents argues, that, the contract of admission signed by the applicants is the law envisaged in section 86(2) of the Constitution and that the School is entitled to enforce that contract accordingly.

Counsel for the applicants appears to implicitly accept this proposition by his lengthy written submissions interrogating the contract and the School's conduct under the criteria set out in section 86(2) of the Constitution.

The proposition, and its implicit acceptance, are clearly misplaced.

The term “law” is defined in section 332 of the Constitution to mean any provision of the Constitution, an Act of Parliament, or a statutory instrument, or any unwritten law in force in Zimbabwe, including customary law.

A private contractual stipulation is patently not a law as defined, or as generally understood; let alone a law of general application within the meaning of section 86(2) of the Constitution.

Accordingly, I take the view, that, section 86(2) of the Constitution has no direct bearing on the constitutionality or enforceability of the contract of admission and does not take the matter any further in upholding or impeaching the School's policy of compulsory chapel attendance.

As regards the extent to which the freedom of religion may be limited, counsel for the applicants contends, that, although it may be permissible to limit the right to manifest religious or other non-religious beliefs, the right to hold such beliefs is to be considered as being inviolable.

I am unable to discern any justification for this perceived distinction either in section 60 or in section 86 of the Constitution.

In terms of section 60(1) of the Constitution, the freedom of thought, opinion, religion or belief is accorded the same prominence and protection as the freedom to practice, propagate and give expression to one's thought, opinion, religion or belief.

Both are guaranteed in the same breath and without any express or implied differentiation as to the extent of their entitlement to protection.

Equally significantly, section 86(3) of the Constitution specifically enumerates those fundamental rights which “no law may limit” and which “no person may violate”.

These include the rights to life, human dignity, not to be tortured, not to be placed in slavery or servitude, to a fair trial, and to obtain an order of habeas corpus.

The right to freedom of conscience and religion is conspicuously absent from this list of absolutely sacrosanct and inviolable rights. The necessary implication is that freedom of religion is not inviolate or non-derogable.

The provision that I deem most apposite to the resolution of this matter, and which I now turn to consider, is section 86(1) of the Constitution. It declares that “fundamental rights and freedoms..., must be exercised reasonably and with due regard for the rights and freedoms of other persons.”

The analysis of conflicting rights postulated by section 86(1) of the Constitution calls for an essentially unitary approach. The question whether a given right is being exercised reasonably is inextricably intertwined with the question whether it is being exercised with due regard for the rights and freedoms of others.

What is required is the balancing of actually or potentially antagonistic rights, having regard to the nature of those rights, the manner in and the extent to which they impinge upon one another, and the circumstances in which they have been or are to be exercised.

It is trite, that, a contract concluded in contravention of the written or unwritten law, or one that is contrary to public policy, is susceptible to being struck down and rendered of no force or effect.

The doctrine of sanctity of contracts is obviously subject to constitutional limits.

As was observed in Bredenkamp and Others v Standard Bank of South Africa Ltd 2010 (4) SA 468 (SCA)..., every contract or institutional rule must pass constitutional muster.

Again, in Barkhuizen v Napier 2007 (5) SA 323 (CC)..., it was emphasised that:

“All law, including the common law of contract, is now subject to constitutional control. The validity of all laws depends on their consistency with the provisions of the Constitution and the values that underlie our Constitution. The application of the principle pacta sunt servanda is, therefore, subject to constitutional control.”

Counsel for the applicants submits, that, the School's contract of admission contains unlawful and onerous terms and conditions targeted against members of different faiths. They are contrary to public policy, and, therefore, cannot qualify as rules capable of enforcement.

Counsel for the respondents retorts, that, although the School's assemblies in chapel carry religious overtones, no pupil is obliged to participate in any religious activity. All the pupils are simply required to attend and be respectful. No one is victimised for not singing or praying. To this extent, the School is entitled to expect conformity and the applicants are equally entitled to remove their daughters to a school that does not offend their religious principles. This accords with the rights of establishment and maintenance explicitly preserved and conferred upon independent educational institutions by section 75(2) of the Constitution.

It is common cause, that, the religious status of the applicants children was known from the outset and that the previous policy of the School was one of religious tolerance and accommodation.

In this respect, I am unable to accept the submission by counsel for the respondents, that, the applicants acted fraudulently in signing the contract of admission simply to gain the admission of their daughters into the School. This is because the previous policy was highlighted in the School's website which, although out-dated, appears to have been relied upon by the applicants.

In this context, therefore, it cannot be said that their daughters refusal to attend chapel is unreasonable.

In any event, there is nothing in the opposing papers to show, that, the objective of collegiality that the Headmistress wishes to inculcate in the pupils was not previously attained. There is no evidence that the exemption from chapel attendance, that was previously granted, has negatively impacted on the collegiality or discipline of the applicants daughters or the other pupils. Nor is there anything to indicate that compulsory collective chapel attendance is the most appropriate vehicle to entrench collegiality.

This objective might be better achieved through regular attendance at social or sporting events or when all the pupils are gathered together in the dining hall, as happens at the School during the daily lunch break.

As counsel for the applicants correctly submits, coercion, as opposed to persuasion, does not necessarily build collegiality.

On the contrary, to forcibly conjoin persons of different faiths might serve to undermine the dignity of all concerned, the minority as well as the majority. As I have already noted, freedom of conscience and human dignity are inseparably linked and the denial of the former entails the denial of the latter.

As against the foregoing, it is not in dispute, that, the applicants were fully aware, from the time that they signed the admission forms, that their daughters had been accepted as pupils on the following terms and conditions:

(i) That, the School's rules and regulations, as amended from time to time, would be binding and had to be observed;

(ii) That, the School's founding Christian principles would entail adherence to its rules on chapel attendance;

(iii) That, no exemption from the curriculum would be considered on religious grounds; and

(iv) That, any latitude concerning chapel attendance was at the sole discretion of the School Head, whose decision was final and binding.

Thus, the applicants were cognisant of the fact, that, any previous latitude or exemption granted in relation to chapel attendance was subject to being reversed and that they, and their daughters, would be obliged to comply with any such change in policy.

In short, there can be no doubt, that, they willingly consented to the implementation and enforcement of the School's rules and regulations - even if they were altered after the admission of their daughters into the School.

In Wittmann v Deutscher Schulverein Pretoria & Others 1998 (4) SA 423 (T), the facts of which involved the enforcement of an enrolment contract in circumstances which are are very similar to those herein, Van DIJKHORST J..., opined as follows in relation to parochial community schools:

“In respect of these educational institutions, the fundamental freedom of religion of 'outsiders' is limited to the freedom of non-joinder. Outsiders cannot join on their own terms, and, once they have joined, cannot impose their own terms.

This indicates, that, the waiver of the freedom of religion (for the limited duration of one's membership and within the limits of the institution's constitution) is not contrary to the provisions of the Constitution in the case of private educational institutions. Waiver per se of that freedom is therefore not unconstitutional.”

I note that this decision was premised on specific provisions of the South African Constitution which are not identical to the corresponding provisions in our Constitution, and that, as far as I am aware, it has not been followed or applied by the Constitutional Court of South Africa.

I also note, with the utmost respect, that, the sentiments expressed by the learned judge might be criticised as being somewhat exclusivist, having been pronounced in the peculiar post-apartheid milieu of that country.

Nevertheless, I take them to be fairly instructive in the broader context of delineating the outer contours of religious freedom.

Another case of persuasive value is the decision of the European Court of Human Rights, apropos the European Convention on Human Rights, in Valsamis v Greece [1996] 24 EHRR 294, arising from facts which are not dissimilar to those in casu.

The applicants, in that case, were Jehovah's Witnesses. Pacifism was a fundamental tenet of their religion which forbade any conduct or practice associated with war or violence - even indirectly.

Following a written request, their daughter was exempted from attendance at religious education lessons and Orthodox Mass. However, in common with other pupils at her school, she was asked to take part in the celebration of the National Day, a day when the outbreak of war between Greece and Fascist Italy was commemorated with school and military parades. She requested the headmaster that she be excused from the celebration on religious grounds, in particular, on the basis of her pacifist convictions.

Her request was refused, but, she nevertheless did not participate in the school parade.

She was punished for her failure to attend with one day's suspension from school; a decision taken by the headmaster in accordance with a circular issued by the Ministry of Education and Religious Affairs.

She, and her parents, argued, that, they were the victims of a breach of the right to education under Article 2 of Protocol No.1, which requires the State to respect the right of parents to ensure that the education and teaching received by their children is “in conformity with their own religious and philosophical convictions.” They also complained that their “right to freedom of thought, conscience and religion” guaranteed by Article 9 of the Convention had been breached.

Their complaints, in relation to these two provisions, were dismissed by a majority decision of seven votes to two.

The dissenting judges took a robust view of the rights allegedly infringed. In their opinion, Mr and Mrs Valsamis's perception of the symbolism of the school parade and its religious and philosophical connotations had to be accepted because it was not obviously unfounded and unreasonable. Similarly, Miss Valsamis's statement, that, the parade she did not participate in had a character and symbolism that were clearly contrary to her religious beliefs also had to be accepted, and, there was no basis for seeing her participation in this parade as necessary in a democratic society.

The minority accordingly found, that, both Article 2 of Protocol No.1 and Article 9 of the Convention had been violated.

As regards the right to education and its corollary of parental convictions, the majority judges were of the opinion…, that:

“Such commemorations of national events, serve, in their way, both pacifist objectives and the national interest. The presence of military representatives at some of the parades which take place in Greece, on the day in question, does not in itself alter the nature of the parades.

Furthermore, the obligation on the pupil does not deprive her parents of their right 'to enlighten and advise their children, to exercise with regard to their children natural parental functions as educators, or to guide their children on a path in line with the parents own religious or philosophical convictions'….,.

It is not for the Court to rule on the expediency of other educational methods which, in the applicants view, would be better suited to the aim of perpetuating historical memory among the younger generation.….

In conclusion, there has not been a breach of Article 2 of Protocol No.1 (P1-2).”

On the freedom of thought, conscience, and religion, the majority adopted the earlier decision of the Commission and opined…,:

“The Commission considered that Article 9 (art. 9) did not confer a right to exemption from disciplinary rules which applied generally and in a neutral manner, and that, in the instant case, there had been no interference with the applicant's right to freedom to manifest her religion or belief.

The Court notes, at the outset, that, Miss Valsamis was exempted from religious education and the Orthodox Mass, as she had requested, on the grounds of her own religious beliefs. It has already held, in paragraphs 31-33 above, that, the obligation to take part in the school parade was not such as to offend her parents religious convictions. The impugned measure therefore did not amount to an interference with her right to freedom of religion either….,.

There has consequently not been a breach of Article 9 of the Convention (art. 9).”

Before balancing the respective rights and freedoms of the parties, it is necessary to consider the waiver of constitutionally entrenched rights.

Counsel for the applicants argues, that, it is possible to waive certain rights, depending upon the right in question; for example, the right to trade which can be subjected to restraint by agreement. However, the right to entertain and manifest religious beliefs cannot be waived because it is characterised by the absence of compulsion or coercion, including indirect control. Accordingly, clauses 4 and 5 of the School's admission form must be regarded as being contra bonos mores and therefore unlawful.

Counsel for the respondents accepts, that, public policy enables the scrutiny of private contracts in order to ensure their constitutionality. Nevertheless, it is possible to contractually waive one's religious precepts in order to achieve a specific social or material purpose - as the applicants have done by signing the contentious form of admission.

I am inclined to agree.

As I have indicated earlier, I do not perceive the right to freedom of religion as being absolute or non-derogable. On that basis, I can think of no objection to its being voluntarily waived in circumstances where such waiver does not entail the fundamental eradication of one's religious or conscientious beliefs.

The applicants cannot assert that their faith condemns the mixing of religious beliefs and practices, and, at the same time, enrol their daughters at a school with an Anglican ethos and practices.

The contract of admission that they signed categorically states, that, any latitude in chapel attendance granted to the pupils would not invariably exempt their attendance in future and that the decision of the Head in that regard would be final.

In effect, the applicants chose to bend the tenets of their faith to a limit determined by themselves so as to gain admission to the School for their daughters. Once that limit has been exceeded, they now invoke the right to religious freedom in order to demand that the School should conform to their religious dictates.

In other words, the applicants and their daughters, are prepared to remain “separate from a contaminated world” only to the extent that they deem it expedient to do so. To use a well-worn adage, they cannot approbate and simultaneously reprobate the School and its avowed ethos.

As I have already observed, freedom of religion is not an absolute right enforceable erga omnes, at all times and in every circumstance. It cannot override and must conform with the law of the land to the extent that such law is reasonably justifiable in a democratic society. Moreover, its exercise cannot justify interference with the rights of others or countenance any harm to public interests.

Thus, in the instant case, it is necessary to balance the religious freedom of the applicants, and their daughters, within their chosen educational environment, as against the rights and interests of the School and its institutional values as propounded by its founders.

The ethical foundation of freedom of conscience, as guaranteed by section 19 of the former Constitution, was lucidly expounded by GUBBAY CJ in In re Chikweche 1995 (1) ZLR 235 (SC)…,:

“…,. I am of the view, that, the reference in section 19(1), to freedom of conscience, is intended to encompass and protect systems of belief which are not centred on a deity or religiously motivated, but are founded on personal morality.”

Having regard to this ethical dimension, it seems to me, that, every religion, be it Judaeo, Christian, Muslim, Buddhist or Hindu, is essentially rooted in the precepts of morality. The forms of moral expression and observance adopted by each religion may vary according to time, place, culture, and tradition. But, the transcendent values that animate every religion are universal. They are embedded in the quintessential humanity of its protagonists.

Apart from each individual's personal relationship with his or her own deity, there is the collective bond of human commonality that informs and guides his or her relationship with others. In a libertarian society, what this bond demands is mutual respect and tolerance between individuals, social groups, and communities, with the ultimate objective of attaining a truly pluralistic polity.

Reverting to the question at hand, what is envisaged by section 86(1) of the Constitution is precisely, that, mutuality of rights and freedoms, to be enjoyed and exercised in a manner that is reasonably justifiable in a democratic society.

In the specific context of freedom of religion, what this entails is that the scope and extent of one's spiritual rights must be measured within the temporal environment in which they operate.

The position of the applicants and their daughters, in casu, is no different.

They have willingly chosen to join and participate in the communal ethos of the School, and, furthermore, to abide by whatever its broader curriculum implies. The principle of mutual respect and tolerance requires that they accommodate the institutional rights and interests of the School in pursuing its perceived objectives, so long as those objectives are not pursued unreasonably, and equally importantly, so long as they do not radically undermine the religious beliefs and convictions of any of its pupils.

In other words, the School's policy should not transmute into some tyranny of the majority, imposed without due regard for the rights and sensibilities of the minority.

From a purely neutral and secular standpoint, I do not think that attendance in chapel, for short stints, three times a week, would necessarily negate or deracinate the fundamental beliefs of the applicants daughters.

They are not being called upon to engage in prayer or participate in the Anglican rituals conducted in chapel. They are simply required to attend chapel and remain dispassionately respectful during its proceedings; not unlike the participants at an athletic event or diplomatic function, where everyone present is expected to stand in silence whenever the national anthem of any given country is played.

Indeed, it is perfectly possible, if they are prepared to open their hearts and minds in the true spirit of religious tolerance, that they might even derive some benefit from quietly observing the rites and rituals of another religion, without having to surrender their own convictions and succumb to the specific beliefs of that religion.

In the event, after considerable vacillation, and, not without some reservation, I have come to the conclusion, on the particular facts of this case, that, the applicants are not entitled to the declaratory and consequential relief that they crave.

What this means is that the School is entitled to enforce its policy of compulsory chapel attendance in respect of the applicants daughters.

However, in the event that they refuse to abide by this policy, they should not be removed from or required to leave the School:

(i) Firstly, unless the School takes the fully considered view that it is entirely necessary to do so; and

(ii) Secondly, until they are afforded a reasonable period of time to select and relocate to another school, having regard to their individual educational needs and circumstances....,.

In the result, it is ordered as follows:

1. The application be and is hereby dismissed with no order as to costs.

2. In the event that the first and second respondents take the decision to expel the applicants daughters from the School, they shall be afforded a reasonable period of time to select and relocate to another school.

This is an appeal against the whole judgment of the Fiscal Appeal Court HH20-20 dated 8 January 2020. The court a quo dismissed the appellant's appeal against the decision of the Commissioner in respect of assessed tax and confirmed its amended income assessment made by the Commissioner on 2 September 2015.

The appellant is a company, with limited liability, duly incorporated in terms of the laws of Zimbabwe. It carries on the business of mining platinum in an area known as Middleridge Claims in Zimbabwe.

The appellant and a related company, known as Southridge Limited, are subsidiaries of a registered company known as AmZim Holdings Limited Group ('Amzim'). Amzim is, in turn, a member of the Anglo American Group ('Amhold').

Anglo American Group (Amhold) is not a trading or operating entity and is also not a Zimbabwean company. It merely holds all the shares in the appellant.

The respondent is a statutory body established in terms of section 3 of the Zimbabwe Revenue Authority Act [Chapter 23:11]. Its mandate is, amongst others, to assess and collect revenue on behalf of Government.

The appellant is the holder of a Special Mining Lease issued to it in March 2008 by the Government of Zimbabwe ('GOZ') in respect of the mining of platinum in an area known as Middleridge Claims. The appellant and Southridge Limited, for the purpose of facilitating the participation of other players in the platinum industry, ceded platinum claims (Bougai and Kironde) to the Government of Zimbabwe (GOZ) in an agreement signed between the relevant parties on 25 March 2008 (the 'cession agreement').

On 1 November 2012, the Government of Zimbabwe (GOZ), the National Indigenisation and Economic Empowerment Fund, Anglo American Platinum Limited, AmZim Holdings Limited Group (Amzim), Southridge Limited and the appellant entered into an agreement to implement the indigenisation implementation plan and indigenisation transaction.

The agreement also provided for the 51 per cent equity ownership in Anglo American Group (Amhold) being issued to Indigenous Entities.

The founding document of the agreement was termed the Heads of Agreement ('Heads of Agreement'). The Heads of Agreement are part of an agreement in fulfilment of the indigenisation laws of Zimbabwe and was consequent upon the cessation agreement signed on 25 March 2008.

In 2007, the Government of Zimbabwe (GOZ) enacted the Indigenisation and Economic Empowerment Act No.14 of 2007 [Chapter 14:33] ('the Indigenisation and Economic Empowerment Act'). The Act came into operation on 17 April 2008.

On 23 November 2011, a Deed of Trust for the Tongogara Rural District Community Share Ownership Trust ('the Trust') was founded. The founders of the Trust were Saviour Kasukuwere, the then Minister of Youth Development, Indigenisation and Empowerment representing the Government of Zimbabwe (GOZ), July Ndlovu duly authorised to represent Anglo American Group (Amhold), Collin Chibata duly authorised to represent the appellant, Gilbert Dhaidhai, Christmas Ndanga, Toendepi Banga, Walter Nemasasi, and James Pasipano Maposa as founding trustees.

The Trust Deed was to be read together with the Indigenisation Implementation Plan signed on 12 August 2012.

On 15 April 2010, Anglo American Group (Amhold) submitted its initial indigenization implementation plan under the Indigenisation and Economic Empowerment (General) Regulations, 2010 Statutory Instrument 21 of 2010 ('the Regulations'), which also covered its local subsidiaries, to the Minister of Youth Development, Indigenisation and Empowerment for approval.

The indigenisation implementation plan was revised, initially on 7 June 2012, and finally approved on 10 August 2012.

In terms of the final approved indigenisation implementation plan, Anglo American Group (Amhold) committed to donate US$10 million as seed capital to the Tongogara Rural District Community Share Ownership Trust through the appellant, its subsidiary.

The actual payment of the US$10 million donation was thus made by the appellant.

On 30 May 2011, the appellant submitted its self-assessment for the tax year ending 31 December 2011 wherein it claimed, inter alia, the US$10 million as a deduction against its taxable income in terms of section 15 of the Income Tax Act [Chapter 23:06] (the 'Income Tax Act') as read with paragraph 4(1)(a) of the Twenty-Second Schedule to the Income Tax Act, thereby reducing its taxable income by that amount.

The assessment by the appellant showed an assessed loss of US$41,652,575.

The total expenses, excluding interest and tax, were in the sum of US$30,254,951 which included the sum of US$10 million donation categorised in its financial statements for the year ended 31 December 2011 as “Contribution to Community Share Trust”.

The respondent then carried out an investigation on the tax compliance of the appellant on 12 November 2012 for the period January 2009 to December 2012.

On 2 September 2015, the respondent issued to the appellant an amended Manual Notice of Assessment for income tax (Assessment Number 1/5114) for the year ending 31 December 2011, in which, inter alia, the respondent disallowed as a deduction the said sum of US$10 million donation.

A dispute arose between the appellant and the respondent as both parties disagreed over the nature of the appellant's payment of the US$10 million donation.

The appellant filed a notice of objection, on 11 November 2015, to the amended notice of assessment dated 2 September 2015.

In making the objection, the appellant argued that it had made the US$10 million payment in compliance with the Indigenisation and Economic Empowerment Act and the Indigenisation and Economic Empowerment Regulations.

The appellant alleged that it had an indigenisation implementation plan approved by the Minister of Youth Development, Indigenisation and Empowerment in terms of which it was obliged to make a payment of US$10 million to the Tongogara Rural District Community Share Ownership Trust. Consequently, the appellant contended that the payment was of a revenue nature, as it was incurred for the purpose of trade or in the production of income.

On 13 April 2016, the respondent disallowed the objection and reasoned that the US$10 million payment was not made wholly and exclusively for the purposes of the special mining lease operations but largely for obtaining approval of the indigenisation implementation plan. It also determined that the expenditure of the US$10 million was of a capital nature.

Aggrieved by the decision of the respondent, the appellant lodged an appeal with the court a quo on 11 July 2016.

The parties filed a Statement of Agreed Facts on 30 November 2017.

The parties were in agreement that the appellant paid the sum of US$10 million to the Tongogara Rural District Community Share Ownership Trust. The parties were also agreed that the appellant contended that the payment was made in part fulfilment of its legal obligation to indigenise in terms of the Indigenisation and Economic Empowerment Act, and, as such, the payment was a deduction against its taxable income in terms of section 15 of the Income Tax Act. It was agreed that the respondent, on the other hand, contended that the appellant did not have any legal obligation to pay the money to the Tongogara Rural District Community Share Ownership Trust, and, as such, the payment was of a capital and not revenue nature.

On 20 March 2017, a Pre-Appeal Meeting was held and a pre-appeal minute was agreed between the parties wherein the issue for determination was stated as follows:

“(a) Whether the expenditure (payment of US$10 million to the Tongogara Rural District Community Share Ownership Scheme made in 2011) claimed as a deduction is allowable as such.”

On 8 January 2020, the court a quo, in determining the appeal, found that the donation of US$10 million was not designed to establish, improve, or add to the income earning capacity nor did it generate any income for the appellant hence it was not of a revenue nature but capital. The court a quo agreed with the respondent, that, the disbursed US$10 million was designed to preserve the appellant's income-earning structure hence it was expenditure of a capital nature and not of a revenue nature.

The court a quo also dismissed the appellant's contention, that, the US$10 million was paid in compliance with the indigenisation implementation laws of Zimbabwe and on the provisions of the indigenisation implementation plan.

The court a quo found, that, the disbursement was a donation which had been made by the appellant on behalf of its holding company, Anglo American Group (Amhold), which was a separate legal entity, and, as such, the appellant could not claim a deduction of the same.

The court further found that the provisions of the Indigenisation Act, and its Regulations, did not require the appellant to make any donation in order to be indigenous compliant as it was a Zimbabwean company.

In the result, the court made the following order:

“1. The appeal be and is hereby is (sic) dismissed in its entirety.

2. The amended assessment issued by the Commissioner, on 2 September 2015, be and is hereby confirmed.

3. Each party shall bear its own costs.”

Dissatisfied by the decision of the court a quo, the appellant noted the present appeal on the following grounds of appeal:

“1. The learned Judge erred at law in finding, in the main, that the payment of US$10 million to a Community Share Ownership Trust was a donation to such trust. He ought to have found that the payment was made to satisfy Appellant's legal obligation to comply with Zimbabwe's indigenous laws.

2. The learned Judge erred at law in making the following incidental/ancillary findings against Appellant:

(a) The Appellant was not obliged to comply with indigenisation despite it being a business as defined and obliged to be indigenous compliant in terms of the law.

(b) Having earlier found, that, the Appellant's parent company had submitted an indigenisation plan for itself and its subsidiaries (including Appellant), later contradicted himself in finding that:

'Appellant could not rely on an indigenisation implementation plan that did not relate to it to claim the deduction in question.'

3. The learned Judge erred at law in finding that the payment of US$10 million to the Trust was expenditure of a capital and not of a revenue nature.”

The appellant's grounds of appeal, in my view, raise the following issues for determination:

1. Whether or not the appellant was obliged, at law, to donate the sum of US$10 million to the Community Share Ownership Trust?

2. Whether or not the court a quo erred in finding that the payment of US$10 million to the Tongogara Rural District Community Share Ownership Trust was expenditure of a capital and not of a revenue nature?

Counsel for the appellant submitted, that, the US$10 million donated by the appellant to the Tongogara Rural District Community Share Ownership Trust was not a donation in the strict sense considering the context in which the payment was made. He insisted that the appellant was obligated to make the donation in order to be compliant with the requirement for indigenisation in accordance with the indigenisation laws of Zimbabwe.

Counsel further submitted, that, the payment was a deductible expenditure of a revenue nature because it was for licensing purposes in order for the appellant to trade. He contended, that, had the appellant not made the donation, its mining license would have been revoked.

He thus urged the Court to allow the appeal.

Per contra, counsel for the respondent submitted, that, the donation was a donation proper which is not deductible in terms of part 4(a) of the Twenty Second Schedule of the Income Tax Act.

He contended, that, the donation did not benefit the appellant but was designed to benefit Anglo American Group (Amhold), its parent company, a third party.

In any event, it was his contention that there was no legal obligation on the appellant to make the donation or to be compliant with the indigenisation laws of Zimbabwe.

Counsel explained, that, no consequence would have befallen the appellant had it not made the donation, and, even if there would have been any such consequence, it would have befallen the parent company, Anglo American Group (Amhold), which had the obligation to indigenise and not the appellant.

He also submitted, that, the amendment to the Income Tax Act allowing deductions of payments made to Community Share Ownership Trusts was only made on 1 January 2013, hence, the appellant could not claim a deduction in its tax assessment report compiled in 2011 in relation to the donation as the amendment did not apply retrospectively.

The appellant's contention is that the payment of US$10 million to Tongogara Rural District Community Share Ownership Trust was made in compliance with the indigenisation laws of Zimbabwe to enable it to continue operating its special lease mining operations.

Further, that the payment was for purposes of trade or in production of income and not of a capital nature.

On the other hand, the respondent maintained that the payment of US$10 million by the appellant was strictly a donation as there was no legal obligation on it to make the donation.

Further, that the legal obligation to be compliant with the indigenisation laws was on the parent company, Anglo American Group (Amhold), and not the appellant.

It was also submitted, for the respondent, that, the payment could only have been of a capital nature as it was not paid for the purpose of trade or production of income.

The resolution of this appeal, in my view, revolves upon the determination of whether or not the appellant had a legal obligation to make the payment of US$10 million. In the event that it did, then, the court must then determine whether the payment was of capital or revenue in nature.

It should be borne in mind, from the onset, that, the relationship between the Government of Zimbabwe (GOZ), AmZim Holdings Limited Group (Amzim) and its subsidiary companies has always been regulated by different laws and agreements.

The Heads of Agreement were signed between the Government of Zimbabwe (GOZ), Anglo American Platinum Limited, Amzim Holdings Limited, Southridge Limited, and the appellant.

Clause 1.4 of the agreement provides for Amzim Holdings Limited, which is a member of the Anglo American Group ('Amhold'). The appellant and Southridge Limited are in turn members of the Anglo American Group.

Clause 2.15 of the agreement further defines 'Amhold Group' means “Amhold and all its direct and indirect subsidiaries including Unki Mine…,.”

Clause 4.2 of the agreement provides for the nature of the indigenisation transaction as follows:

“…,. 51% equity ownership of Amhold shall be issued to the indigenous entities, utilising a notional vendor funded mechanism to be facilitated by Amhold. The implementation of the Indigenisation Transaction will result in the Amhold Group being in compliance with the indigenisation Requirements for the duration of the Indigenisation Compliance Period.”

Clause 9.2.1 of the agreement is also worth quoting as it provides as follows:

“…, following the implementation of the Indigenisation Implementation Plan, through the Indigenisation Transaction, each member of the Amhold Group shall qualify as, and shall for the duration of the Indigenious Compliance Period continue to qualify as, an Indigenous Entity in compliance with the Indigenous Act…,.”…,.

An Indigenous Entity is further defined in the agreement, under clause 2.1.49, as follows:

“means a company in which issued shares are owned, directly or indirectly, by Indigenous Zimbabweans in the percentage proportion no less than that prescribed from time to time under the Indigenisation Act as the 'minimum indigenisation and empowerment quota'…,.”

Lastly, clause 3.4 of the agreement provides for the indigenisation implementation plan which was submitted by Anglo American Group (Amhold) and approved by the Minister of Youth Development, Indigenisation and Empowerment in accordance with the Indigenisation and Economic Empowerment Act.

The collective effect of the provisions of the Heads of Agreement show that Anglo American Group (Amhold) is the parent company which has subsidiary companies, being the appellant and Southridge Limited.

Further, it can be deduced that it is the parent company which submitted an indigenisation implementation plan which was approved by the Minister.

It should also be noted, that, it was an agreed provision between the parties to the agreement that the parent company was obligated to issue 51 per cent of its shares to indigenous entities in compliance with the Indigenization and Economic Empowerment Act.

The Heads of Agreement further make it clear, that, during the implementation of the indigenisation plan, the subsidiary companies of Anglo American Group (Amhold) were to be treated as indigenous companies owned by indigenous Zimbabweans.

It is thus apparent that the indigenisation laws and agreements placed an obligation on Anglo American Group (Amhold) to issue 51 per cent of its shares in order to comply with the indigenisation laws of Zimbabwe.

It was the parent company that was given that legal mandate as it is a foreign entity and not its subsidiary companies.

It thus follows, that, the Heads of Agreement and indigenous implementation plan were made for and on behalf of Anglo American Group (Amhold) so that it is able to fulfil its legal obligations, as a foreign company.

This is an appeal against the whole judgment of the High Court (“the court a quo”) handed down on 1 December 2020 dismissing the appellant's application for a declaratur....,.

The appellant is a company duly incorporated in Zimbabwe whilst the respondent is a foreign company duly incorporated in South Africa.

It is common cause that the appellant and the respondent have been doing business with each other for some time - albeit they are not agreed as to when they started doing business together.

The appellant alleged that it is since 2012 whilst the respondent contended that it is since 2007.

Nothing much turns on the date of commencement of their relationship. What is important to note is the fact that they have been in this relationship for many years.

On 11 June 2020, the appellant filed a court application for a declaratur before the court a quo in terms of section 14 of the High Court Act [Chapter 7:06]. It sought that the written Supply Agreement between the parties, dated 16 March 2018, be declared void, invalid, and of no legal effect on the basis that it was not its act and it was entered into in contravention of the laws of Zimbabwe.

The appellant alleged that the respondent had been its supplier in respect of plastic products since 2012 on an ad hoc basis. The appellant's Supply Chain Director, Cynthia Malaba (Cynthia), had signed an agreement with the respondent on 16 March 2018 when she had no authority to sign on its behalf.

It was the appellant's case that its senior officers did not know of the existence of the agreement up till an internal audit was conducted in July 2019.

As such, until the discovery of the agreement, the appellant operated under the belief that the respondent was being contracted on an ad hoc basis like other suppliers.

The appellant averred, that, the agreement had not undergone the standard review and approval processes in terms of the appellant's procurement processes. It further alleged that the respondent had previously made attempts to procure the conclusion of a supply agreement with the appellant by bribing the appellant's employees but it had failed.

The appellant averred, that, after discovering the agreement, it engaged the respondent and indicated that it did not recognise the validity of the contract for the following reasons:

(i) The contract committed the appellant to order a stipulated minimum quantity of goods from the respondent while the respondent was empowered to unilaterally increase the prices merely by giving the appellant 30 days notice.

(ii) The contract was in direct contravention of the Competition Act [Chapter 14:28] (Competition Act) in that it gave the respondent exclusive rights to supply the appellant with the products thus shutting out other competitors. It thus contained an unfair business practice.

(iii) The contract had not been approved in terms of the Exchange Control Regulations 1996 yet it required the appellant to pay the respondent in South Africa.

(iv) The contract gave the respondent the sole prerogative to terminate the agreement which right the appellant was denied and it compelled the appellant to accept defective goods from the respondent.

(v) The contract provided that the applicable law was South African law and yet the appellant is domiciled in Zimbabwe and bound by Zimbabwean laws.

The respondent opposed the application and contended that the contract was valid.

It averred that the relationship between the parties had commenced in 2007. Since that year, the appellant would place orders for flexible packaging materials with the respondent on an ad hoc basis. The respondent contended, that, the demand for the materials had increased, and, in 2018, its representatives met with the appellant's representatives to negotiate terms of a written agreement.

This resulted in the contract in question being entered into between the respondent and the appellant, represented by Cynthia Malaba, who held herself out as a lawfully appointed representative clothed with the authority to sign the agreement on the appellant's behalf.

The respondent also contended, that, there had been a similar prior written agreement between the parties wherein the said Cynthia Malaba had signed for the appellant and no issues of lack of authority or exchange control approval or breach of Zimbabwean laws had been raised, and, as such, the appellant could not be allowed to avoid its contractual obligations by claiming that the contract was unlawful and therefore invalid.

The respondent further averred, that, the agreement was to be construed under South African law as chosen by the parties, and, as such, it was valid.

It also asserted, that, the agreement provided for amendments in the case of difficulties and it had invited the appellant to discuss any issues of concern but the appellant had been unwilling to do so, and, as such, it could not then seek to invalidate the contract.

The respondent denied that the contract was unfair and oppressive and averred that both parties had performed their obligations under the agreement pursuant to its conclusion, and, as such, the appellant was estopped from contending that the agreement was invalid.

It thus sought the dismissal of the application with costs.

In its decision, the court a quo held, inter alia, that unless it was demonstrated that there was something in the foreign law which makes it inapplicable, it can be applied in our courts. The court proceeded to find, that, there was nothing submitted by the appellant which non-suited the application of South African law. It therefore held that the parties elected law in the agreement had to be applied.

The court a quo further found that there existed an agreement between the parties based on the fact that -

(i) Senior officials of the appellant knew about the existence of the agreement;

(ii) Cynthia Malaba, who had signed the agreement on behalf of the appellant, was a Supply Chain Director; and

(iii) The agreement she had signed was a supply agreement which served to prove that her job description gave her the authority to act on behalf of the appellant.

The court a quo held that Cynthia Malaba had ostensible authority and the appellant is estopped from denying this. The assertion by the appellant, that its internal process had not been followed, should not prejudice the respondent hence the application of the Turquand Rule.

In relation to the averments by the appellant that some clauses in the agreement infringed various statutes, the court a quo held, inter alia, that -

(i) There was no breach of section 43 of the Competition Act. It stated that the 'exclusivity' clause makes provision for minimum quantities that the appellant should order, beyond which it was at liberty to order from any other supplier. It further noted, that, from the evidence before it, there was precedent for operating outside the realm of exclusivity.

It also noted that clause 22.7 of the agreement permitted any offending clause, or part thereof, to be severed from the contract or to be construed in a manner that was in conformity with the law.

In casu, there was nothing stopping the parties from removing anything which suggested exclusivity.

(ii) On contravening section 11 of the Exchange Control Regulations 1996, the court a quo held that the contract did not breach that section. The section proscribes payment or incurring any obligation to make payment outside Zimbabwe without first obtaining authority from an Exchange Control Authority.

In this case, the clause on payment did not state that the payment was to be made into an account outside the country but stated that payment was to be made into an account to be nominated by the respondent.

(iii) On the question of The Control of Goods (Open General Import Licence) (Notice) RGN 766 of 1974 as amended by The Control of Goods (Open General Import Licence) (Amendment) Notice, Statutory Instrument No.122 of 2017, SI122 of 2017, the court a quo did not find in favour of the appellant. It, in effect, found that there was no breach as no evidence of such breach was proffered.

In essence, the court a quo held that there were no breaches of local statutes. Any complaints on perceived infringements of local statutes and regulations were capable of being addressed in terms of the provisions in the agreement which provided for the parties to seek amendments, including severance of any offending clause.

The court a quo noted, that, the respondent had invited the appellant to discuss the clauses alleged to be offensive but the appellant had been unresponsive.

The court a quo further found that no substantiated evidence had been submitted to prove the allegation of commercial bribery.

In the result, the court a quo concluded that the agreement was valid and there was no basis upon which it could nullify it. It therefore held, that, the appellant had failed to establish a basis upon which the court could grant the declaratory order sought and proceeded to dismiss the application with costs on the legal practitioner and client scale.

Aggrieved by the decision of the court a quo, the appellant noted the present appeal.

The appellant raised nine (9) grounds of appeal. The key issues arising from the grounds of appeal are:

(i) Whether or not the court a quo erred in finding that Cynthia Malaba had ostensible authority to enter into a valid agreement on behalf of the appellant thus making the contract binding on the appellant.

(ii) Whether the court a quo did not pronounce itself on the alleged breach of Zimbabwean laws and whether the contract is void for being contrary to such laws.

(iii) Whether there was justification for costs on a punitive scale.

In motivating the appeal, counsel for the appellant submitted, that, the pith of the appellant's case is that, firstly, the agreement is not of its act and it is therefore void ab initio. He submitted that the agreement was a product of the respondent's fraud and commercial bribery which was concluded with the appellant's junior employee who did not have the requisite authority to do so.

He thus submitted that the court a quo erred and misdirected itself by failing to make a determination that the contract was void on the basis that it was not of the appellant's making and there was lack of compliance with the appellant's internal processes, including Board resolutions, which gave Cynthia Malaba authority to enter into same.

In the second rung, counsel submitted that if this Court was to find that it is its act, the contract is void for breach of Zimbabwean laws. In this regard, he submitted that the contract was a nullity since it contained provisions which contravened -

(a) Section 43 of the Competition Act [Chapter 14:28] which prohibits unfair business practice, including exclusivity;

(b) Section 11 of the Exchange Control Regulations1996 which prohibits the making of any payment outside Zimbabwe or incurring of any obligation to make payment outside Zimbabwe without first obtaining authority or licence from an exchange control authority; and

(c) The Control of Goods (Open General Import Licence) (Notice) RGN 766 of 1974 as amended by S.I.122 of 2017 which requires an importer in the position of the appellant to obtain an import permit or licence to import goods from outside the country before it can do so.

He thus insisted that the court a quo erred and misdirected itself in holding that the contract was valid.

Counsel also submitted that the court a quo had failed to determine all the issues which the appellant had raised.

He argued that the court a quo had failed to pronounce its findings on whether the agreement was in direct contravention of the Competition Act, the Exchange Control Regulations 1996 and the Control of Goods (Open General Import Licence) RGN 766/74 as amended by S.I.122/2017.

Counsel argued, that, the court had an obligation to apply its own law and the onus was on the respondent to prove that South African law was applicable in this case.

He thus sought to have the appeal allowed and that an order be granted declaring the contract void and invalid.

Per contra, counsel for the respondent submitted, that, there was no misdirection on the part of the court a quo in holding that the contract was binding on the appellant on the basis of ostensible authority.

The finding that Cynthia Malaba had ostensible authority cannot be said to be in defiance of logic or contrary to the evidence placed before the court. Such a finding was in fact in tandem with the evidence placed before the court a quo.

Counsel also submitted, that, the court a quo correctly found that the applicable law, in terms of the parties agreement, was South African law. He submitted that the parties had, out of their free choice, agreed that the contract be governed by the law of South Africa.

As such, the appellant had the onus to prove that Zimbabwean law was applicable rather than the law chosen by the parties and yet it had omitted to do so.

He further submitted, that, the appellant's stance on the choice of law made by the parties would render the entire concept of choice of law and the freedom of contract nugatory and will severely hinder international trade between private corporations.

Counsel further argued, that, the appellant could not seek to benefit from its own wrong doing since it had benefited from the agreement by taking delivery of the goods it was now seeking to be absolved from paying for.

He further submitted, that, the severability clause allowed the parties to sever any offensive terms which therefore meant that there was no need to nullify the whole agreement.

He thus sought to have the appeal dismissed with costs.

The next issue is whether the court a quo did not pronounce itself on the alleged breach of Zimbabwean laws and whether the contract is void for being contrary to such laws.

Counsel for the appellant's submission that the court a quo did not make a determination on breaches of Zimbabwean laws was without merit.

As is evident from the findings of the court a quo alluded to above, the court pronounced itself on each of the alleged breaches:

(i) It found that the agreement was not in breach of section 43 of the Competition Act as the appellant could still buy from other suppliers as confirmed by its officials.

(ii) If there was any clause, or part thereof, which the appellant felt was now offensive, such could be severed in terms of the contract.

(iii) It also held, that, there was no breach of section 11 of the Exchange Control Regulations as the contract did not state that payment had to be made outside the country.

(iv) Equally, there was no breach of the Control of Goods RGN 766/74 as amended by SI122 of 2017.

In the light of the above findings, the issue should thus be whether the court a quo erred and misdirected itself in reaching its determination on these aspects.

This issue must be examined from the fact, that, this contract has international aspects. These include that each party is incorporated in its own country of domicile.

The respondent, as the seller/ supplier, signed the agreement in South Africa whereas the appellant, as the buyer/importer, signed the agreement in Zimbabwe.

Where there are international aspects to a transaction, it is imperative that parties include clauses in the contract on both the governing law and jurisdiction, i.e. which country's law shall govern the contract and in which country's courts will any dispute be finally decided.

In casu, it was within the parties rights to be precise as to which country's law shall govern their contract.

There are varying factors that parties would have taken into account in deciding on the law to govern their contract.

The law chosen by the parties will generally be respected by the courts of the other country in the spirit of sanctity and freedom of contract.

A caveat to this general approach is that matters of public policy and mandatory laws of that other country may take precedence over governing law clauses, such as in the area of employment and exchange control regulations, which are in the category of directly applicable statutes that override the choice of law.

In C F FORSYTH: Private International Law, 5th Edition, Juta..., the author states:

“For the avoidance of doubt, it should be made quite clear that the directly applicable statutes of the forum, as discussed above, stand outside the choice of law process. They apply according to their terms irrespective of the law the parties have chosen to govern the contract.”

In casu, the parties were alive to their freedom on choice of law and chose that the agreement was to be governed by and must be interpreted and construed in accordance with the laws of the Republic of South Africa.

However, cognisant of the circumstances of their agreement, including the mandatory laws or directly applicable statutes that may affect that choice of law, each party made certain warranties, representations, and undertakings in clause 16.1 of the agreement.

That clause provides, inter alia, that each party warrants, represents, and undertakes to the other party that:

“(c) The execution of and performance by it of its obligations under this Agreement does not contravene any law or regulation to which it is subject; and

(d) It will have all necessary consents, licences, and approvals required in connection with the entry into and performance of its obligations under this Agreement.”

Having made the above warranties, representations, and undertakings each party was obliged to ensure compliance with the peremptory laws of their respective countries.

Any challenges in compliance were ably catered for by clause 22.7 which provided for amendment of any provision of the agreement that becomes invalid, illegal, and unenforceable for reasons stated therein.

That clause states as follows:

“If any part of this Agreement is, for any reason whatsoever, including a decision by any court, any legislation, or any other requirement having the force of law, declared or becomes unenforceable, invalid, or illegal, the Parties must negotiate and effect an amendment of this Agreement such that it is lawful and enforceable, retaining its essential terms, or, failing such agreement between the parties, as far as possible this Agreement must be interpreted so as to exclude the offending provision but retain the essential terms of the Agreement.”

It is common cause that the parties have been doing business together for many years, albeit, on ad hoc basis.

In October 2017, the parties entered into a written supply contract, the precursor to the agreement in question.

The Zimbabwean statutes that the appellant wishes to hide behind in avoiding paying for goods supplied and consumed were in place. The appellant, nevertheless, met its obligations on the prior transactions. It was never argued that in the preceding agreement the appellant failed to meet its obligations due to a breach of the statutes in question.

As already alluded to above, the agreement in question came into effect on 16 March 2018 and was to run till 31 December 2019.

It was only when a demand for payment for goods supplied and consumed was raised, that, in July 2019, the appellant objected to the sum being claimed.

The audit it carried out was premised on its belief that it was being overcharged.

At that stage, its query was not lack of compliance with the domestic statutes.

Clearly, this is a case of a party who previously met its obligations, now seeking to avoid the accrued debt - yet it had consumed the goods for which payment was being demanded.

I am of the view that the appellant cannot succeed in that quest.

For instance, regarding the submission that the contract contravened section 43 of the Competition Act by reason of containing an exclusivity clause; given the evidence before it, the court a quo aptly noted, that, the clause only provided for minimum quantities and the appellant had continued to order from other suppliers on an ad hoc basis.

Mrs Mbelengwa, in her testimony before the audit team, confirmed that the appellant would still buy from other suppliers on an ad hoc basis as and when the need arose.

In any event, as properly noted by the court a quo, the agreement contained a clause which provided for the parties to cause the agreement to be amended so as to exclude any offending provision. As such, any offending clause, as suggested by the appellant on exclusivity, could be cured through an amendment of same without nullifying the contract.

The finding by the court a quo, that the 'exclusivity' clause complained of by the appellant can be expunged, cannot be faulted.

If the appellant was serious in its view that the 'exclusivity' clause was offensive, despite evidence from its officers that they did not treat this clause that way, it could simply have asked for an amendment to exclude that clause.

The test for severability, as articulated in Bligh-Wall v Bonaventure Zimbabwe (Pvt) Ltd & Another 1998 (2) ZLR 264 (SC)..., is basically whether the offending clause is substantially at the core of the contract or is subsidiary.

If it is subsidiary, and the parties would still have entered into the contract without the offending aspect of the clause, then, that part is severable.

In casu, the parties contractual relationship did not depend on the clause in question.

They had been trading for many years. The clause merely provided guarantee or assurance to the appellant that whenever it placed an order for certain quantities of goods it required, such goods would be available on the credit terms of the agreement.

Previously, the parties had traded without that clause and could still do so.

The court a quo can thus not be faulted for finding that the agreement was, in effect, not exclusive.

The finding that there was no breach of section 11 of the Exchange Control Regulations may also not be faulted.

The section proscribes the making of payments outside the country or the incurring of any obligation to make such payment without first obtaining authority from an Exchange Control Authority.

In casu, the clause on payment did not state that payment was to be made outside the country.

The onus was on the appellant to show, that, despite the absence of such a statement, it had in fact been asked to make payment outside the country.

This, the appellant did not do.

Instead, it sought to rely on an inference that since the respondent was domiciled in South Africa and the contract was to be governed by South African law, the court a quo should have inferred that payment had to be made in South Africa.

As aptly noted by the court a quo, the clause on payment (clause 12.5) simply stated that payment would be made 30 days after receiving a tax invoice into an account to be nominated by the respondent.

By the time the appellant raised issues, the contract had run three quarters of its lifespan with the appellant placing orders, receiving the goods, and consuming same on the basis of the credit agreement.

It was only upon receiving demand to pay outstanding sums for what it had consumed that it objected.

The record does not reflect that the respondent had nominated an account in South Africa.

As parties who had been trading with each other for many years, the appellant must surely know how it had been making payments, even in respect of the agreement in question, prior to the raising of the sum it deemed overcharged.

As the onus was on the appellant to prove the unlawfulness of that clause, one would have expected it to simply furnish the tax invoices with the nominated account into which the funds were to be paid as proof, that, though the clause was silent on the place of payment, such place was in fact in South Africa.

Clearly, the appellant failed to discharge the onus on it.

On 24 July 2013, the High Court granted judgment in favour of the respondent herein. Consequent thereto, the court ordered that the appellant vacate premises known as Shops 1 and 2 Benhay Art House, situated at 120 Chinhoyi Street, Harare and pay the sum of USD22,730=99 being arrear rentals, and holding over damages in the sum of USD5,000 together with operating costs from 1 November 2011 to the date of eviction.

The court ordered the appellant to pay interest on the abovestated sums at a rate that is 5 percent above the lending rate of commercial banks, and costs of suit at the ordinary rate.

The appellant was aggrieved and noted an appeal against the whole judgment.

The respondent was equally unhappy with part of the judgment and noted a cross-appeal against the finding by the court that it was required to give the appellant fifteen (15) days notice of cancellation of the lease in the event of failure by the appellant to pay rent on due date.

In addition, the respondent particularly appealed against the finding by the court, that, the letter dated 26 September 2011 by the respondent did not constitute a cancellation of the agreement.

The appellant and the respondent are private limited companies duly registered as such under the laws of Zimbabwe and carrying on business as such within the country.

On or about 30 March 2010, the respondent and the appellant entered into a written agreement of lease in terms of which the former leased to the latter commercial property known as Shops 1 and 2 Benhay Art House, situated at 120 Chinhoyi Street, Harare.

The agreement was initially for a period of six months and was terminable on 31 August 2010.

Although the lease agreement suggests that it commenced on 30 March 2010, evidence from the appellant during the trial reveals that it first occupied the premises sometime in 2005.

This fact is, however, of no moment as it was never disputed that there was a subsisting lease between the parties.

It is worth noting, that, while there is no specific clause providing for the renewal of the lease, clauses in the agreement suggest that it was to endure beyond the stated period of six months.

Indeed, when the dispute erupted, the appellant had been in occupation of the premises for over twelve months.

After the lease period expired, the parties continued with the lease on the same terms and conditions.

This is because the accepted sum due as rental, at that stage, was USD5,000 - an amount far in excess of the USD1,000 stated in the original written lease.

Moreover, from the manner in which the proceedings in the court below were conducted, it can be inferred that the lease was still subsisting.

The terms and conditions of the lease agreement are the bone of contention between the two.

The terms of the agreement that are pertinent to the dispute are to be found in clauses 3 and 12 of the agreement and relate to the payment of rentals and operating costs.

The parties agreed that the appellant would pay monthly rentals within the first seven days of each month, together with operating costs at agreed rates.

The respondent alleged, that, the appellant was in breach of a material term of the agreement by failing or neglecting to pay monthly rentals and operating costs within the time stipulated in the lease agreement.

Due to the breach, the appellant allegedly incurred arrear rentals in the sum of US$22,730=99.

As a consequence of the breach, the respondent averred that it had cancelled the lease agreement, demanded vacant possession of the leased premises, and payment of the arrear rentals and operating costs.

The respondent posits, that, it did so by letter dated 26 September 2011 from its legal practitioners to the appellant cancelling the said agreement.

On 12 October 2011, the respondent issued summons against the appellant in which it claimed the following relief:

“(a) An order for the eviction of the defendant together with its tenants, assignees, invitees, and all other persons claiming occupation through it from the plaintiff's premises known as Shops 1 and 2 Benhay Art House, located at 120 Chinhoyi Street, Harare.

(b) Payment of the sum of USD22,730=99 in respect of arrear rentals.

(c) Payment of holding over damages at a monthly rate of USD5,000 together with operating costs from 1 November 2011 to the date of eviction.

(d) Payment of interest on the sums of money claimed herein at a rate which is 5 percent above the commercial bank minimum lending rate per month, or part thereof, calculated from due date to date of payment in full.

(e) Payment of costs at the scale of legal practitioner and client.”

It is common cause that the parties thereafter attempted to enter into without prejudice negotiations.

A Deed of Settlement was drafted which required the appellant to acknowledge its indebtedness in the sum of US$16,980 and to discharge its indebtedness at the rate of US$2,500 a month with effect from 1 November 2011.

Further, the appellant was to continue to pay monthly rentals of US$5,000 in accordance with the terms of the lease agreement.

The respondent's legal practitioners signed the draft Deed of Settlement. The appellant's legal practitioners did not.

As it had threatened, the respondent proceeded with the suit culminating in the holding of a pre-trial conference before a judge in chambers.

At the pretrial conference, the matter was referred to trial on the following issues:

1.1 Whether or not the respondent properly cancelled the lease agreement in respect of Shops 1 and 2 Benhay Art House, No.120 Chinhoyi Street, Harare.

1.2 Whether or not any agreement for the out of court settlement of this matter was concluded between the parties.

1.3 If so, what were the terms of the agreement?

2.1 Whether or not the respondent was entitled to an eviction order.

For the purposes of the trial, the court a quo formulated the issues that were before it for determination as:

1. Whether the respondent gave adequate notice of intention to cancel the lease agreement before the agreement was cancelled.

2. Whether there was a valid cancellation of the lease agreement between the parties.

3. Whether the parties entered into a separate agreement relating to the outstanding rent.

The court a quo found in favour of the respondent and issued the order referred to above.

In arriving at its decision, the court a quo noted that clause 3.2 of the lease agreement stipulated that rent was to be paid monthly in advance, at the latest by the seventh day of the month.

It also found, that, clause 12 stipulated that if rent was not paid as agreed, or where the tenant breached any other condition of the agreement and remained in default for a period of fifteen days after being given notice in writing by the landlord, then, the landlord could cancel the lease forthwith and retake possession of the premises without prejudice to any claim for damages.

The court also found, that, in the light of these clauses, the letter dated 26 September 2011 did not effectively cancel the lease agreement.

The court noted, that, instead, the letter gave the appellant three days to rectify the breach and that this period was contrary to the agreement which allowed for a period of fifteen days to remedy a breach.

The letter in question was delivered to the appellant on 27 September 2011. The court, therefore, found that, that is when the fifteen days contemplated by clause 12 began to run.

Consequently, the court concluded, that, the appellant had up to 12 October 2011 to remedy the breach.

Accordingly, the court a quo found, that, by 12 October 2011, when the respondent issued summons, it did so in compliance with the lease agreement as the fifteen days from the date the appellant received the letter had elapsed.

The court further found that the letter of 26 September 2011, by which the respondent said it cancelled the lease agreement, had the effect of placing the appellant in mora.

Thereafter, the court reasoned, the appellant had fifteen days from the date of being placed in mora to remedy the breach, failing which the respondent had the right to cancel the agreement.

The court further determined, that, there was no compromise agreement as, by the appellant's own admission, it failed to sign the Deed of Settlement.

The court a quo, therefore, granted the respondent's claim in its entirety.

The appellant has noted the present appeal on the following grounds:

“1. The court a quo erred in granting an order for the monetary claim as made out in the summons when it was apparent from the evidence that this money had been cleared.

2. The court a quo erred by extending the time of notice after it had made a finding that there was insufficient notice given.

3. The court a quo erred in finding, as it did, that notice, though insufficient, was given, when, in actual fact, the respondent cancelled the agreement of lease without giving the notice required in terms of the agreement.

4. The court a quo misdirected itself as it made a finding that there was no compromise reached by the parties because the Deed of Settlement was not signed by the appellant, yet, the Deed was for proof purposes only as the agreement had already been reached.

5. The court a quo erred, generally, by ordering eviction after the compromise and when the arrears had been cleared.

6. The court a quo erred by making a finding that the appellant's witness was not credible when he gave straight forward evidence.”

In its heads of argument, the respondent has conceded that its cross appeal was ill-founded. As a consequence, it was not proceeding to argue the same.

The concession is proper.

The cross-appeal sought to challenge findings of fact made by the court a quo without a corresponding prayer to alter the judgment itself.

The concession leaves only the main appeal for determination.

In my view, the remaining issues for determination, therefore, are the following:

(i) Whether the lease was properly cancelled;

(ii) Whether the court a quo should have ordered the eviction of the appellant from the premises;

(iii) Whether the parties reached a compromise; and

(iv) Whether the court a quo was correct to grant the monetary claim in its entirety.

The appellant contends, that, the court a quo fell into error in three respects:

(i) The first, it argues, is that the court found that the respondent was required, in terms of the agreement of lease, to give notice to the appellant to rectify its breach and that the former did in fact give the notice aforesaid.

The appellant argues, that, the respondent was obliged to give it fifteen days notice before it could validly cancel the lease. Instead, the respondent only availed it notice amounting to three days.

As a consequence, there was no notice and the finding by the court a quo, that there was notice and a valid cancellation consequent thereto, was erroneous.

A lease comes into being once the landlord and the tenant have agreed on the formalities that form the basis of their contract.

There must be a property available for lease and the rent in respect thereof must be settled.

The lessor's obligation is to make the property's occupation, use, and enjoyment available. In fulfilling this obligation, he has to refrain from disturbing the lessee in the enjoyment of the property leased and he must maintain the property in the condition agreed upon. In addition, the property must be fit for the purpose for which it is being let. Further, he must warrant the lessee against eviction by a third party with better title.

The primary obligations of the lessee are to pay the rent and incidental costs, and the charges incidental thereto, at the proper time and place agreed in the agreement, and, at the time of termination of the lease, to restore the property in the same condition he would have found it.

In casu, it is not in dispute that the appellant fell behind in the payment of its rent and accumulated arrears.

The breach is admitted.

The accumulation of arrear rentals is the cause of the conflict between the parties.

The respondent cancelled the lease after alleging a breach on the part of the appellant.

Cancellation of a contract is a legal act that delineates the relationship between the parties to the contract at a specific moment. Not every breach entitles the injured party thereto to cancel the contract.

The trite position is that, unless otherwise agreed, it is only that breach that goes to the root of the contract that can give rise to a right to cancel. In other words, it is a breach that goes to the root of the contract that entitles the aggrieved party to cancel.

The court a quo agreed with the appellant on the question of notice.

It found, however, that, the respondent had given notice to the appellant to rectify its breach when summons was issued for the eviction of the appellant and its assignees. The court reasoned as follows:

“In my view, the letter of 23 September 2011, did not effectively or adequately cancel the lease agreement. It gave the defendant 3 days within which to rectify its breach. Clause 3.2 as read with clause 12.2 of the lease agreement clearly stipulates that fifteen days be given to the defendant within which to rectify the breach.

That letter was delivered to the defendant on 27 September 2011. That is when the fifteen day period began to run. The defendant had up to 12 October 2011 to remedy the breach.

Letters were exchanged between the parties, on a without prejudice basis, in settlement negotiations.

On 3 November 2011, well after 12 October 2011 when the defendant was legally obliged to remedy its breach, the plaintiff indicated that the defendant should sign the draft deed of settlement. The defendant did not do so, by its own admission.

It is my view, that, by 12 October 2011, when the plaintiff issued summons for eviction and for recovery of arrear rentals, it did so in compliance with the provisions of the lease agreement. The stipulated period within which the defendant ought to have remedied its breach had lapsed.

After 12 October 2011, the plaintiff became entitled to cancel the lease agreement, and to re-enter its premises. By coincidence, summons for eviction was issued on 12 October 2011, which I accept constituted notification of intention to cancel the lease agreement at common law.”

Although the respondent has not persisted with the cross-appeal, it does not support the finding by the court that notice was required before the contract could be cancelled.

It persists with the contention that the lease was validly cancelled. The respondent contends that the lease did not require such notice.

The manner of cancellation was the cause of contention between them, the critical issue being whether or not the respondent was obliged to give the appellant fifteen days notice to rectify its admitted breach and pay the arrears before the lease could lawfully be cancelled.

Where the parties to a contract have settled a procedure for the termination of the agreement, they are bound by that procedure.

This was the dictum in Minister of Public Construction v Zescon (Pvt) Ltd 1989 (2) ZLR 311 (S), wherein this Court said…,.:

“I do not understand the above quotation to mean that the appellant was not entitled to terminate the contract. The appellant may well have been entitled to do so, but, where parties to a contract have agreed upon procedures for terminating an agreement, they are bound by the provisions spelling out those procedures as if they had been imposed upon them by law; and, a departure from the agreement procedures will not result in an effective termination of the contract. All that was required of the appellant was, if there was justification for terminating the contracts, to terminate them in compliance with the procedures spelt out in clause 20(a).”

There is ample authority for the proposition, that, in the absence of an agreement to the contrary, a party who wishes to exercise his right to cancel a contract must convey such decision to the other party before the cancellation can become effective.

There is also authority to the effect, that, this applies equally to a notice calling upon the defaulting party to purge his default.

The ratio for the proposition is that termination of a contract has significant and over-reaching consequences upon the reciprocal rights and duties of the parties to the contract.

In Swart v Vosloo 1965 (1) SA 100 (A), HOLMES JA said the following:

“…, it must be taken as settled, that, in the absence of agreement to the contrary, a party to a contract who exercises his right to cancel must convey his decision to the mind of the other party, and cancellation does not take place until that happens.”

Generally, as in this case, the payment of rent for leased premises must be effected within a stipulated timeframe. Where the parties have fixed a time for performance, and the debtor does not perform accordingly, the debtor is in mora.

In this scenario, the creditor does not need to demand performance from the debtor. In legal terms, this is said to be in mora ex re; that is, mora from the transaction itself.

Reliance for this proposition may be found in a paragraph to that effect by the learned authors HUTCHINSON, Van HEERDEN, VISSER & Van Der MERWE in their book Willes Principles of South African Law, 8ed…, to the following effect:

“If the time for performance has been fixed, performance must be made by the time agreed upon. If the debtor has culpably failed to perform his obligations by such time, he is automatically in default or in mora (debitoris). Mora, in this case, is known as mora ex re for no notice to the debtor is necessary, the rule being dies interpellatio pro homine.

Where the time for performance has not been fixed by the contract, the general rule applies; namely, that, performance may be demanded immediately or within a reasonable time depending on the nature of the obligation and the surrounding circumstances; provided, of course, that the party making the demand is himself able and willing to perform his own obligations.

Although the performance may be due and claimable forthwith, the debtor need not perform until he is called upon by the creditor to do so.

Only when a specific time for performance has been set can the debtor's default possibly constitute a breach of contract.

Thus, the creditor must make a demand calling upon the debtor to perform by a date reasonable in the circumstances, and, if the debtor fails to comply with the demand by the specified date, he will fall into mora.

This form of mora is known as mora in persona, since it arises as a result of the personal intervention of the creditor.

The demand or interpellatio may be made either judicially, that is, by means of a summons, or extra-judicially, by means of a letter of demand. But, no formal demand is required, and it may be made orally…,.”

See Noel v Cloete 1972 (2) SA 150.

The principle of law related above was discussed in the South African case of Legagote Development Co. v Delta Trust & Finance Co. 1970 (1) 584 TPD wherein VILJOEN J opined at p587C-E:

“In my view, this was an unnecessary onus which the plaintiff assumed. The plaintiff relied on a term of the agreement in which a date for performance had been fixed, and it would have been sufficient to allege that the defendant had not performed before or on that day and that the plaintiff suffered damages as a result.

In expressing this view, I have not lost sight of the statement by Wessels, Law of Contract, 2nd ed, para 2858, that, before there can be mora, the failure or delay must have been due to the culpa of the debtor; but, Steyn, Mora Debitoris (to whom Wessels refers) makes it clear at p42 what type of culpa he postulates, namely, that the debtor must or should have been aware of his obligation to perform timeously and of the nature of the performance.

See also Victoria Falls Power Co. Ltd v Consolidated Langlaagte Mines Ltd 1915 AD 1 at p31; West Rand Estates Ltd v New Zealand Insurance Co. Ltd 1926 AD 173 at p195.”

It is settled, therefore, that, where the contract itself does not fix the time for performance, a creditor may fix the time for performance by making demand for the due performance of the obligation by the debtor by a certain date; the demand in this particular instance being interpellatio.

If the debtor fails to perform once demand has been made, the debtor is in mora, justifying cancellation.

Whether or not a party to a contract has the right to cancel, based on a breach, depends on the agreement between the parties as to what entitles the aggrieved party to exercise the right to cancel and if the right has been exercised properly.

The parties intention, expressed in the contract, is at the heart of the decision to exercise the right.

In his book, The Law of Contract in South Africa, 3ed the learned author RH CHRISTIE says the following…,:

“It is undoubtedly correct, that, if the contract contains an express forfeiture clause permitting cancellation for a specified breach, the court will not investigate the materiality of the breach but will give effect to the clause however hard the result.

But, the flaw in Greenberg J's reasoning seems to be a mis-application of the concept of a tacit term.

The question the officious bystander ought to be asking is not: 'Do you both intend there should be forfeiture for any breach of this term however trivial?' to which he would probably receive conflicting answers; but 'Do you both intend there should be forfeiture for such a breach of this term as to strike at the root of the contract?' which would almost certainly result in his dismissal with a common 'Oh, of course.'”

The appellant contends, that, the agreement required the respondent to place it in mora before it could lawfully cancel the lease.

It argues that the notice required in the contract was fifteen days.

The appellant contends, that, the lease provided for such notice and that the cancellation was invalid absent such notice.

It posits that the respondent, in complete defiance of the terms of the lease, gave it, the appellant, three days to remedy the breach.

It contends further, that, the respondent paid no regard to the terms of the lease agreement and proceeded to exercise a right that the agreement did not provide for.

Further, the appellant suggests that the termination of the lease by the respondent was summary and not permissible in law.

It further suggests, that, the lease agreement in the present matter provided for a notice period and that the demand or notice could not have been made by means of a summons as posited by the respondent. It argues that the court should find the cancellation was invalid in this scenario.

My considered view is that, as evinced in the agreement, the parties intention guides the court.

On a consideration of the principles set out above, it is evident that the correctness of the finding by the court a quo, that the lease was cancelled lawfully, can only be considered by construing the clause relating to the payment of rent against the one dealing with breach.

The clause that delineates breach is clause 12, which reads as follows:

“12. Breach

If -

12.1 Any rent is not paid on due date; or

12.2 The tenant commits any breach or fails to observe or perform any of the terms and conditions of this agreement and remains in default for a period of fifteen (15) days after the giving of notice in writing by the landlord drawing attention to the breach or omission requiring it to be remedied;
the landlord may forthwith cancel this lease and re-enter upon and take possession of the premises without due prejudice to any claim for damages which the landlord any have against the tenant for any breach of the lease by the tenant.”

In turn, the clause providing for rent reads as follows:

“3. Rent

3.1 The rental for the remaining period of this lease shall be the sum of USD1,000 per month.

Any other market-related figure may be agreed between the parties from time to time in writing.

3.2 The rental shall be paid monthly, in advance, within the first seven (7) days of the month, free of bank charges whatsoever on or before the first day of the month throughout the period of this lease and any renewal and extension thereof.

3.3 Any overdue rent or any other monies, including operating costs, which the tenant fails to pay on time shall attract interest calculated at 5 percent (five percent) above the commercial bank minimum lending rates per month or part thereof from due date until payment in full.”

Thus, the critical consideration is whether the finding by the court a quo, that the respondent was required to give notice to the lessee, and, in fact, gave the requisite fifteen days notice to remedy its mora, was the correct finding in light of the terms of the contract and the surrounding circumstances.

The clause relating to breach is in two parts. The critical issue for consideration is whether the construction placed on the clause by the court a quo can pass scrutiny.

In casu, the contract of lease provided that if rent was not paid on due date as agreed, or if the tenant did not rectify any breach after fifteen days notice to do so, then, the landlord was entitled to cancel the lease immediately and take possession of the premises.

The issue in contention is whether, in the present case, the breach by the appellant of its obligations entitled the landlord to cancel the agreement immediately upon failure to pay the rent.

I find that the court's construction a quo of the clause on breach was incorrect. It went against established principle.

The clause is in two parts with 'or' joining the parts. The word 'or' is the determining factor in the construction of the clause.

The first part provides for failure to pay rent, with the second providing for breaches in general.

The latter part, relating to general breaches, is the one calling for notice to be given to the lessee to rectify the breach within fifteen days from the date of issuance of the notice by the lessor.

What was at issue in casu did not relate to general breaches. It was concerned with the sole failure to pay rent - a material breach going to the root of the contract.

The clause should be construed in a manner that gives effect and meaning to “or” such that the two parts are read to be disjunctive as opposed to conjunctive.

Within this jurisdiction, the meaning to place on the word 'or' has been determined in the case of S v Ncube & Ors 1987 (2) ZLR 246. At p264E, GUBBAY CJ, commenting on the word 'or' had this to say:

“In the first place, the word 'or' is usually treated as disjunctive unless there is a compelling indication that in its context, it means 'and': see Colonial Treasurer v Eastern Collieries Ltd 1904 TS 716 at 719; Hayward, Young and Co. (Pty) Ltd v Port Elizabeth Municipality 1965 (2) SA 825 (AD) at 829B; Greyling & Erasmus (Pty) Ltd v Johannesburg Local Road Transportation Board & Ors 1982 (4) SA 427 (AD) at 444C-D.”

In turn, in Greyling & Erasmus (Pty) Ltd v Johannesburg Local Road Transportation Board & Ors 1982 (4) SA 427 (AD), the court opined that:

“That conclusion rests on an interpretation of section 15(2)(a) with which I cannot agree, viz that paras (i),(ii), (iii), and (iv) of section 15(2)(a) are to be read conjunctively.

No glaring absurdity or other compelling reason for disregarding the ordinary meaning of language suggests itself for construing 'or' conjunctively in the several places where it occurs in section 15(2)(a).

On the contrary, there are weighty considerations which, in my view, point to an intention to attribute to the word 'or' its normal meaning rather than an intention to treat 'and' as a substitute for 'or.'

The first consideration is that a conjunctive interpretation would necessarily require proof of paras (ii) and (iv) in every case whereas these paragraphs concern issues which may often be irrelevant. The second consideration is this: in contra-distinction to the use of 'or' between paras (i)-(iv), the word 'and' links paras (i)-(iv) with para (v); a clear indication that the Legislature had no intention of deviating from the ordinary meaning of two words which are in daily use.”

The Oxford Dictionary defines 'or' as a disjunctive that connects two or more alternatives. It also connects words, phrases, or clauses with the same grammatical meaning.

It was therefore imperative that the court a quo interpret the whole clause, as it was duty bound to do, in order to give meaning to the word 'or' in the clause.

A perusal of the judgment leaves one with the impression, that, the court a quo paid scant or no attention to clause 12.1. Instead, the court focused on clause 12.2.

The court, to that extent, did not interpret the whole clause.

Instead, it placed attention on the clause relating to default in general. The critical clause on rent remained untouched, and, as a result, the decision was reached based on an erroneous reading of the clause.

In Aucamp v Morton 1949 (3) SA 611 (A), the Appellate Division said…,:

“Various criteria have been suggested in our cases for the purpose of determining whether or not a particular breach of contract by one party entitles the other to treat the contract as terminated by such breach and regard himself as discharged from further performance of his obligations under it, and there must be much learning on the subject in text books.

It is not possible to find in them a simple general principle which can be applied as a test in all cases. This is not surprising because contracts and breaches of contract take many forms.

…,. There are two statements of the principle which are frequently quoted, one by FLETCHER MOULTON LJ…, in the case of Wallis v Pratt and Hughes 1910 (2) KB 1003 at p1012 and one by LORD BLACKBURN in Mersey Steel and Iron Co. v Naylor 9 AC 434 at p443. They are as follows:

'A party to a contract who has performed, or, is ready and willing to perform his obligations under the contract is entitled to the performance by the other contracting party of all the obligations which rest upon him. But, from a very early period of our law, it has been recognised that such obligations are not all of equal importance. There are some which go so directly to the substance of the contract or, in other words are so essential to its very nature that their non-performance may fairly be considered as a substantial failure to perform the contract at all.'

The rule of law as I always understood it, is that where there is a contract in which there are two parties, each side having to do something…,.; if you see that the failure to perform one part goes to the foundation of the whole, it is a good defence to say, I am not going to perform my part of it when that which is the root of the whole, and substantial consideration for my performance, is defeated by your misconduct.”

It is axiomatic, that, the primary obligation of a tenant in a lease agreement is to pay the stipulated rent, at the stipulated time and the place provided for in the lease.

Failure to do so constitutes a breach of a material term of the lease agreement.

That the appellant breached the agreement was never in dispute. The court a quo found as such and there is no appeal against that finding.

The appellant did not address its mind to the implications of the clause relating to breach.

Had it done so, it would have been aware of the distinct treatment of the two parts of clause on breach. It would also have realized the implications of the word 'or' in the clause.

In motivating its position, that the cancellation was invalid on the alleged failure to give it the notice required in clause 12.2, the appellant placed reliance on Asharia v Patel & Ors 1991 (2) ZLR 276 (S), where the court said…,:

“The general applicable rule is that where time for performance has not been agreed upon by the parties, performance is due immediately on conclusion of their contract or as soon thereafter as is reasonably possible in the circumstances.

But, the debtor does not fall into mora ipso facto if he fails to perform forthwith or within a reasonable time. He must know that he has to perform. This form of mora, known as mora ex persona, only arises, if, after a demand has been made calling upon the debtor to perform by a specified date, he is still in default.

The demand, or interpellatio, may be made either judicially, by means of a summons, or extra judicially, by means of a letter of demand, or even orally; and to be valid, it must allow the debtor a reasonable opportunity to perform by stipulating a period for performance which is not unreasonable. If unreasonable, the demand is ineffective.

Where a debtor has fallen into the mora ex persona after demand, the creditor can acquire a right to cancel the contract by serving notice of rescission in which a second reasonable time limit is stipulated, making time of the essence.

Both demand and notice of rescission are necessary in order to allow for cancellation for non-performance.

The two may be, and commonly are, contained in the same notice. Such notice will then fulfil a double function: it will fix a time for performance after which the debtor will be in mora, and create a right in the creditor to rescind the contract on account of that mora: see Nel v Cloete 1972 (2) SA 150 (A) at 163E; Flugel v Swart 1979 (4) SA 493 (FCD) at 502E-H; and generally Joubert, General Principles of the Law of Contract at pp202-203; Kerr, The Principles of the Law of Contract 4ed at pp461-462; de Vos Mora Debitoris and Rescission (1970) 87 SALJ at pp310-311.”

I find that the reliance by the appellant on the above authority was misplaced.

The court in that case was considering mora ex persona, as it found that notice and demand were required before the contract could be validly cancelled.

My reading of the above authority leads me to conclude, that, the parties in that case had not settled on a time for the due performance of its obligation by the debtor. As a consequence, before cancelling the contract on the premise of an alleged breach from the debtor, the court found, that, the creditor had to give the debtor notice to remedy the breach. The demand by the creditor served a twofold purpose:

(i) First, it fixed a time for performance and placed the debtor in mora if performance was not made according to the demand.

(ii) The notice to the debtor also resulted in the creditor acquiring the right to terminate, in the event of the debtor failing to purge the default once he was placed in mora, as the failure to adhere to the notice was the trigger that fixed the time for performance.

Despite the appellant placing reliance on the authority, it is clearly distinguishable from the dispute in casu. It does not assist the appellant in any way as the facts are disparate.

Cancellation of the lease agreement in casu was effected by a letter from the respondent's legal practitioners. The portion relating to notice and cancellation read thus:

“In breach of the terms and conditions of the lease agreement mentioned herein, you have failed and/or neglected to pay your monthly rentals accumulating arrears thereby in the sum of USD16,980=99 as at 16 September 2011. As a result of your said breach, our client has instructed us to cancel the lease agreement which we hereby do.

We demand that you vacate our client's premises and pay arrear rentals within three (3) days of this letter failing which legal proceedings for your eviction will be commenced without giving you further notice.”

The parties hereto agreed that the rent was to be paid on the first day of each month, in advance, but, at the latest, by no later than the seventh day of each month.

The appellant was supposed to pay USD5,000 every month. It admitted to being in arrears in an amount in excess of USD16,000.

Given that the time for performance, namely, the seventh of each month, was fixed in the agreement, the appellant was in mora ex re.

Thus, the clause providing for cancellation must be construed in the light of the principle that mora ex re entitles the creditor to cancel the lease without making demand for rectification of the breach.

Having due regard to the authorities cited above, and the definition to be placed on the word 'or' in the clause on breach, I find that the court a quo was in error in its construction of the clause.

The clause on breach had two disjunctive parts. Yet, the construction by the court a quo made the parts conjunctive, even in the face of the existence of clause 12.1 and its significance as to the respective rights of the parties under the agreement.

On a proper construction of the entire clause, it is clear that the clause providing for the cancellation on failure to pay rent did not require the lessor to give the lessee fifteen days notice to rectify its breach.

It was never the case for the respondent that it was required to give notice and did in fact give notice.

The letter, in terms of which cancellation was effected, did not call upon the appellant to rectify its failure to pay rentals within fifteen days. Instead, it called upon the appellant to vacate the premises and pay the outstanding rentals within three days, failing which it faced eviction.

The view I take is that the agreement did not require that the lessor give the tenant notice to rectify the failure to pay rent.

Unlike the position prevailing in Asharia v Patel & Ors 1991 (2) ZLR 276 (S), the parties in the dispute at hand had expressly provided a time for the rent payment in their contract of lease.

Based on the authorities, the position is that the lessee would have been in mora ex re due to the failure to pay its rentals on time. Such breach, being mora ex re, entitled the lessor to cancel the lease immediately without giving notice to the appellant.

In view of this, it is unnecessary to determine the issues of the credibility, or lack thereof, of the parties respective witnesses.

The agreement speaks for itself.

Thus, the respondent was entitled to an order evicting the appellant from the leased premises.

However, given the contention that the parties had reached a compromise, it becomes necessary to consider whether the court erred in ordering eviction in the face of a compromise, as is contended by the appellant.

The first plaintiff is a farmer who owns Ziswa Farm (“the farm”) otherwise known as Farm 23 of Lawrencedale Estate in the District of Makoni, Rusape which farm he prefers to rent out while staying on it, as he currently rents it out to his neighbour, he having rented it out to the first defendant prior to that and yet to another person before the first defendant came in.

The second plaintiff is his wife, who, apart from the fact that she was cited as a party along with the first defendant in a joint venture agreement concluded between the couple and the first defendant, on 9 January 2009, has been cited in these proceedings in extremely unclear circumstances.

The first defendant is a commercial farmer, a tobacco grower of note, conducting such business generally at Landos Farm, Halfway House in Headlands and is a director of the second defendant, a duly incorporated company.

The plaintiffs instituted proceedings against the defendant, and, in their summons and declaration, they set out an array of claims, thirteen (13) in all, arising out of a lease agreement signed between the first plaintiff and the first defendant on 9 January 2009 on which date a second agreement titled “Memorandum of Joint Venture Agreement” was also signed between the first and second plaintiffs on the one hand and the first defendant on the other hand.

The plaintiffs averred, that, sometime in 2008 they had entered into a long term development lease agreement with the defendants for the use of the farm and that although the first defendant had signed as the tenant, the actual farming was done through the second defendant.

In terms of the lease agreement, the defendants were expected to put up and maintain infrastructure at the farm, like the construction of 44 houses for workers, dam, and barn construction.

The relationship between the parties deteriorated over time resulting in the defendants cancelling the lease agreement on 2 July 2012 before vacating the farm without notice.

The plaintiffs averred further, that, when the defendants vacated the farm they unlawfully removed certain items of property belonging to the plaintiffs valued at US$186,701 which amount they claimed.

The defendants badly damaged the plaintiffs property valued at $15,905.

They removed fences and gates as they vacated, whose value is $7,600.

During the tenancy, the defendants damaged four (4) barns which were falling at the time they left, while two (2) barns were badly cracked and supported by poles. This was in breach of the agreement of the parties requiring the defendants to keep the barns in good and perfect condition and to repair them to usable state when vacating.

The plaintiffs claimed $5,008 being the costs of repairing the barns.

In further breach of the agreement, the defendants left the farm without removing and destroying tobacco stalks from the land and seed beds which exercise the plaintiffs had to undertake at a cost of $780 including a fine paid to the Environmental Management Agency.

The plaintiffs claimed a sum of $26,313 being the value of their property and machinery including overhead water storage tank and pipes, workers houses, underground cables, water reservoir, cast iron pipes, pump unit, electricals at boreholes and at transformers.

The plaintiff averred further, that, in terms of the lease agreement, the defendants were obliged to deliver to them certain quantities of maize but failed to deliver 50 metric tonnes of maize worth $15,000 which amount the plaintiffs claimed.

They claimed a sum of $45,000 damages for loss of income for the 2012-2013 farming season they would have realised if the defendants had not prematurely terminated the lease agreement and without notice.

A sum of $64,160 was claimed for arrear rentals for the 2011-2012 tobacco crop, being 8% of the gross turnover in respect of crops produced at the farm in terms of the agreement given that 220,000kgs of tobacco were produced during that cropping season.

A sum of $1,980 refund of what the plaintiffs paid for rates and levies to Makoni Rural District Council was claimed, which should have been paid by the defendants in terms of the lease agreement.

The plaintiffs claimed $5,500 being their share of the hailstorm insurance claim made by the defendants to their insurers for the 2009-2010 and 2010-2012 seasons.

A sum of $67,506 was claimed as the value of a centre pivot and generator, which, although purchased by the defendants, they should have left at the farm for the plaintiffs benefit as part of the long term development of the plaintiffs farm.

They claimed $4,240 being 8% of the tobacco seedlings grown on their farm by the defendants.

The defendants have contested the claims, and, in their plea, they took issue with the citation of the second defendant as a party to the proceedings given that there was no agreement, of whatever nature, between the plaintiffs and the second defendant.

In respect of the first defendant, they averred that he complied with all the terms of his agreement with the plaintiffs and denied owing the plaintiffs any money.

The relationship between the parties suffered as a result of the plaintiff's endless interference with farming operations and peaceful enjoyment of the property resulting in a court order being sought and granted interdicting such interference.

The first defendant had to cancel the lease agreement after the plaintiffs had preferred false and malicious criminal charges against him.

The defendants averred that at the termination of the lease, a verification exercise was conducted by the parties which established that all the plaintiffs property had been accounted for, and, as such, none was removed or damaged.

In addition, the fact that the plaintiffs had forcibly taken possession of the farm and equipment, meant that the defendants could not be expected to account for the damage to any property during that period.

They denied vacating the farm secretly or removing fences and gates in the process, especially as the parties were aware of the termination and the defendants vacation of the farm. They denied vandalising any property and that the plaintiffs were entitled to any damages for loss of income.

The parties agreed on the issues for trial at the pretrial conference, which are captured in their joint pre-trial conference minute as:

(a) Whether there was an agreement between the parties as pleaded by the plaintiffs;

(b) Whether the defendants fully complied with the terms and conditions of the agreement;

(c) Whether some of the plaintiffs claims have prescribed, if so, which ones specifically; and

(d) Whether the plaintiffs are entitled to the claims set out in the summons.

Only the first plaintiff gave evidence while the second plaintiff chose not to. They also called witnesses, namely, Assistant Inspector Nixon N'andu, Canaan Nyamombe, and Fanuel Phange.

It was the evidence of the first plaintiff (Ziswa) that prior to the first defendant (Chadwick) approaching him in 2008 he had been leasing his farm to someone else, and that, after Chadwick left unceremoniously in July 2012, he again let out the farm to a neighbour of his, Mr Coleman of Mersy Farm, who, upon taking over, repaired the eight (8) barns which Chadwick had left in a falling condition.

Himself and Chadwick negotiated the lease agreement, which was reduced to writing; the latter having printed a standard form agreement obtained from the National Tobacco Association out of his computer.

He stated that they negotiated every clause, and, as they did so, they added annotations in long hand, which unfortunately were not initialled or counter-signed by the parties, although every page was initialled at the bottom.

After signing the lease agreement, they also prepared and signed a Joint Venture Agreement (JVA) at the instance of Chadwick who wanted it to be signed to protect the parties, given that politically leasing farms was unacceptable while joint venture agreements were tolerated.

As far as he was concerned, the real agreement between the parties was a lease and not a joint venture, which is why the Joint Venture Agreement (JVA) also spoke of a lease and rentals. He referred to both agreements which are part of exhibit 1.

Although both agreements were signed with Chadwick, the witness insisted that they were concluded with both Chadwick and the second defendant, Landos Farm (Pvt) Ltd (Landos) - a claim which is difficult to sustain given that Landos, as an incorporation, was not cited at all in both agreements.

He sought to hold Landos Farm (Pvt) Ltd liable because Chadwick introduced himself as its director and used its letterhead in correspondence.

Some payments were made by Landos.

His claim is based on both agreements.

He explained, that, while the written agreements were signed on 9 January 2009 he had already allowed the defendants to commence farming in August 2008 and that the written agreements only recorded what the parties had agreed.

It is significant that the lease agreement does not necessarily contain some of the necessary details, with the first clause omitting the name of the farm and its hectarage. It also omits the lease period and the date of commencement.

It only has the date of termination entered in pen.

On the various additions to the document, appended in barely legible ink, Ziswa said some were entered by himself while some were made by Chadwick as the two negotiated the terms of the agreement.

The lease provides, in clause 2, that the land was leased for purposes of growing tobacco on 30 hectares, maize on 40 hectares, 20 hectares of wheat or another crop agreed between the parties.

Ziswa said, practically, Chadwick only grew maize during the first year and did not do so for the remainder of the time he was on the farm, electing to concentrate on tobacco farming. He never grew wheat or any other crop for that matter.

The payment of rent is provided for in clause 3 which reads:

“The rent payable by the Lessee to the Lessor shall be 6% on the US$ of the gross turnover in respect of the crops produced on the said land, and, payment of such rent/lease shall be secured by means of direct payment into a FCA given by the lessee in favour of the Company against proceeds of tobacco sold through the Lessee's contract, and, in the case of other such as maize/wheat in equivalue (sic) it shall be executed and registered as soon as may be after the signing of this lease. An advance payment shall be discussed if necessary.”

Despite this provision, Ziswa testified that his claim was for 8% of the gross turnover which he justified by reference to a letter written by Chadwick, on a Landos letterhead, on 22 February 2011, which reads:

“Dear Mr Ziswa

I am writing to present my offer on the subject stated above. I am hoping my proposal will be acceptable to you and will be effective for the next three seasons.

I am proposing that I pay you 8% of the gross realisation from the tobacco sales as my joint venture offer. This will be for the sole use of your whole farm.

Please consider that this is the best that I can do. May I refer you to the cost of production document that I sent you earlier on. If I go beyond this offer, the whole enterprise ceases to be viable. I believe this offer presents a win win situation for both parties.

This really is the best that I can do. May you please inform me of your decision by or before 15 March so as to enable me to make preparations for the coming season.

Yours faithfully

Greame Chadwick”…,.

Although Ziswa said he accepted the offer, he did not say when and how this was done.

He did not produce any document of acceptance, neither did he expand on where the acceptance was communicated to Chadwick.

This gives credence to Chadwick's argument, that, his offer was never accepted and that the 6% contained in the lease agreement remained in force.

It is noteworthy that Chadwick appeared to have been writing in his personal capacity even though he used Landos's letterhead.

Ziswa said that the lease was to subsist for an initial period of 5 years but they then “moved to 8 years” and that it was “a developmental lease agreement” enjoining Chadwick to embark on improvements of a permanent nature on the farm, like the construction of dams, staff housing, improving barns and other infrastructural development.

He never did, except for the construction of 11 staff houses out of an agreed total of 44 houses. Even the 11 constructed were not completed. He only repaired one barn which had been burnt down prior to the commencement of the lease. Even in respect of that one, the parties did it together, with Ziswa providing the bricks. Chadwick, however, left the barns falling and supported by poles.

He said the failure to insert the lease period on the agreement was an oversight. So was the failure to insert the name of the leased farm and the date of commencement of the lease, but, it was 1 September 2008 while termination was at the end of August 2018 at the completion of 10 years.

It turns out it was not 5 years, neither was it 8 years, but, Ziswa did not explain when the lease period changed to 10 years.

He stated, that, at the commencement of the lease, they were to hand over to Chadwick their assets located at that farm which the latter was to use for his farming activities.

In that regard, and in the process of identifying and handing over those assets, they produced an inventory at entry point listing these assets. He made reference to p20 to 26 of exhibit 1, the inventory in question, saying all the listed assets were handed over in good working order.

The inventory has a column with the title “Quantity” which he says is where they endorsed not only the quantity of the items involved but also the condition of the items so that if the item was not in good order that would be stated in that column. The fact that there would be no comment on an item meant that it was in good order.

A look at that inventory shows only a couple of comments.

The first relates to diesel tanks with the comment “on stand”. The second relates to an MF tractor with the comments “1 No Wheels.” Other than the description of the disc harrow as “1 red in colour” nothing supports Ziswa's claims on the condition of the items whose state was not given throughout.

Both parties kept their copy of the inventory.

Ziswa went on to say, that, although most of his claims are not based on the written agreements, they had a lot of discussions which resulted in agreements not reduced to writing.

As far as he is concerned, a verbal agreement is also binding. He referred, in that regard, to the agreement on the construction of dams....,.

Counsel for the appellant sought to buttress the validity of the CR14 by arguing that the respondent was sold to the appellant as a going concern.

He relied on the risk and profit clauses embodied in the two agreements, and the use of the respondent's name, and the transfer of motor vehicles clauses in the Agreement of Sale.

In this respect, clauses 10, 12 and 13 of the Agreement of Sale and clause 10 of the Deed of Sale provide as follows:

“10. That all profit in the assets, the stock, and the goodwill shall pass from the seller to the Purchaser on the effective date.

12. The Seller hereby authorizes and empowers the Purchaser to use the trading name 'Central African Building and Construction (CABCO)' on its letterheads, advertisements, tenders and/or official communications. The purchaser shall have no entitlement, however, to advertise or hold out to third parties that it has acquired the shares in the Seller. In the event that the Purchaser breaches this clause in any way whatsoever, the Seller reserves itself the right to withdraw the consent set out in this paragraph.

13. That, for the avoidance of any doubt, the Seller undertakes to provide reasonable assistance to the Purchaser in securing the transfer of the vehicles hereby sold into the Purchaser's name. The Seller undertakes to execute all documents reasonably necessary to give expression to the transfer of ownership.”

The risk and profit clause of the Deed of Sale stipulated:

“10. That, all profit in the Property shall pass from the seller on the effective date, from which date the purchaser shall be entitled to take occupation and shall be liable to pay timeously and in full rates, taxes, electricity, water, refuse removal and other charges or surcharges which are lawfully levied or rendered in respect of the Property, as if the purchaser was the registered owner thereof.”

The above clauses must be considered in the context of the other clauses of the agreements.

The subject matter of the Agreement of Sale is identified in clause 1 as “the assets listed in the annexed schedule.”

Clause 7 specifically “recorded that delivery of the Assets hereby sold shall be effected only against payment of the full purchase price.”

The restraint of trade clause (clause 11) precludes the respondent from engaging in the construction and building industry in any country in Southern Africa “either directly or indirectly or through its directors, servants, or agents.”

The proviso to clause 12, in turn, precluded the appellant from claiming ownership of the respondent.

In the same vein, the Deed of Sale, in clause 7, provided that transfer of “the Property” would be effected by the respondent's conveyancers within a reasonable period after the appellant had fully paid the purchase price to it.

Clause 9 precluded the appellant from undertaking structural changes on the property without the respondent's written approval.

The sale of a company as a going concern entails the disposal of not only the assets of an entity, as happened in this case, but, also, of its shareholding, trade creditors, debtors, and the assumption of its human resources - which did not happen in this case.

A proper reading of clause 10 of the Agreement of Sale shows, that, the respondent did not pass ownership of the “assets, stock, and goodwill” to the appellant, as argued by counsel for the appellant.

It only passed profit, that is, the use of these assets to the appellant.

The other clauses of the two agreements that I have alluded to above further negate the contention that the sale of “the Assets” and “the Property” constituted the sale of a going concern.

The two agreements speak for themselves.

There was neither a disposal nor a purchase of the respondent's equity. The sale as a going concern argument is therefore devoid of merit.

The impugned finding of the court a quo to similar effect is unassailable.

Parties who enter into an unsanctioned lease agreement ought not to seek judicial assistance to enforce their rights and obligations towards each other.

As a matter of public policy, the courts should not, and will not, provide assistance to parties to an illegal agreement. This is so because such an agreement is void an initio. There is nothing on which, at law, either party to such an agreement can base a claim against the other.

The plaintiff issued summons against the defendant, on 16 June 2014, claiming payment of USD$46,982=71, being the defendant's 50% contribution towards a partnership debt owed to Old Mutual, as well as costs of suit. The defendant entered notice of appearance to defend on 25 July 2014.

According to the plaintiff's declaration, the parties entered into an oil extracting business in January 2009, from the basement of 29 Coventry Road, Harare.

The parties had entered into a contract three years previously in terms of which the defendant would share the total rent payable by the plaintiff to Old Mutual in respect of the top floor, the ground floor, and the basement of the aforementioned premises.

The defendant's half share of the rent was deducted from the profits of the oil extracting business.

During the course of the partnership, a rent dispute arose between the plaintiff and Old Mutual due to the dollarization of the Zimbabwean economy. The plaintiff and defendant agreed to dispute the rental claimed by Old Mutual and to put down the cost of funding the dispute as a partnership expense.

The partnership was dissolved in March 2010.

The defendant continued to contribute its share of the rent from the oil extracting business. Monthly accounts were prepared during the partnership. The rent dispute was eventually decided in favor of Old Mutual. The plaintiff was ordered to pay USD$83,965=43.

This is a claim for payment of the defendant's contribution, USD$48,965=43.

The plaintiff's further particulars included an admission that the lease agreement was between it and Old Mutual.

Clause 7 provided that the plaintiff was to continue to pay rent in the event of a cancellation dispute. Clause 25 of the lease agreement prohibited sub-letting. Clause 32 provided that disputes be referred to arbitration.

Mr Jess Nathan Watson bound himself as surety for the due performance of the plaintiff's obligations in terms of the lease agreement.

The defendant filed a plea on 8 January 2015, in terms of which it admitted having entered into a partnership agreement in respect of an oil extracting business which operated from a small section of the basement.

It denied entering into an agreement to pay 50% of the rent due to Old Mutual from the plaintiff.

It averred, that, the plaintiff unilaterally, and without agreement, deducted 50% of the rent from the oil extracting business. It averred that it constantly protested against this practice, and that its protests were ignored.

The defendant averred, that, it occupied a quarter of the building as the plaintiff's sub-tenant.

The defendant denied that it agreed to participate in the costs of the rent dispute between the plaintiff and Old Mutual. It averred that the only partnership agreement between the parties was dissolved in March 2010 when the parties vacated the premises. It denied ever approving the monthly account statements which were produced by the plaintiff. It denied being made aware of, let alone participating in any arbitration proceedings between the plaintiff and Old Mutual.

The defendant denies that the plaintiff is entitled to be indemnified by it for 50% of the legal costs of the arbitration proceedings.

On 22 January 2016, the defendant filed a notice to amend its plea, in terms of which it reiterated that there was never any agreement that it would indemnify the plaintiff if the rent dispute was decided in Old Mutual's favour. Further, it averred that the plaintiff was negligent in the manner in which it conducted the dispute resolution process with Old Mutual by failing to take reasonable steps to mitigate its damages and legal costs.

The matter was referred to trial on four issues:

(i) Whether the parties agreed that the rentals due to Old Mutual would be a partnership expense;

(ii) Whether the parties agreed to jointly participate in the rent dispute with Old Mutual;

(iii) Whether the plaintiff incurred any extra costs, by way of rentals, interest, as a result of the arbitral award (this issue was admitted by the defendant in the notice of amendment to the plea);

(iv) Whether the plaintiff was negligent in the manner in which it conducted the arbitral proceedings, and, if so, how much should it be made to pay in recognition of this negligence.

On 3 November 2016, the plaintiff filed an application to amend its claim to USD$42,619=55 after chronicling how the entire sum due to Old Mutual is calculated.

The issue for determination, according to the defendant's closing submissions, is that of whether the defendant agreed to pay a 50% share of the rent payable by the plaintiff to Old Mutual in respect of premises known as 29 Coventry Road, Harare.

With all due respect, I disagree with this assertion.

It is my considered view, that, the main issue to be determined in this matter was and always will be whether the plaintiff was entitled to sub-let the premises known as 29 Coventry Road, Harare to the defendant or to anyone else for that matter.

If the plaintiff was not authorized by Old Mutual to sub-let the premises to the defendant, on what legal basis can it then approach the court seeking to enforce an unsanctioned, under the table, agreement between it and the defendant?

As usual in all matters of Landlord–Tenant rights and obligations we are guided by the lease agreement; the one between the plaintiff and Old Mutual is attached at Rp11-32.

The first thing to note is that the leased premises are described as the property, in the interpretation section, which is to be interpreted to mean Stand Number 4491 Salisbury Township, Harare. This is not the lease agreement for 29 Coventry Road, Harare but it was attached to the further particulars requested by the defendant as part of the pleadings.

The second thing to note is that this lease agreement was signed on 8 September 2008, and that one of the plaintiff's directors agreed to act as surety to guarantee the performance of the plaintiff's obligations to Old Mutual. That lease was valid for a year, up to August 2009.

Clause 25 of this lease states, that, the lessee shall not be permitted to cede, assign or pledge the lease or any of its rights hereunder, nor to sublet the whole or any portion of the premises, nor to permit any other party to occupy any part of the premises or to conduct business therein or therefrom….,.

Clause 25.3 states, that, the lessee accepts that breach of this clause shall be fundamental breach entitling the lessor to cancel the lease agreement without notice.

The plaintiff did not attach any other lease agreement to the pleadings.

It made a bare averment during the evidence of its director that there was an agreement between it and the defendant.

The court must decide if the plaintiff showed, on a balance of probabilities, that Old Mutual allowed it to sublet 29 Coventry Road, Harare to the defendant, otherwise the legal basis on which the plaintiff is relying on to pursue the defendant will not have been established.

The law that governs the standard and burden of proof in civil cases is trite. It is trite that;

“…, in a civil case, the standard of proof is never anything other than proof on a balance of probabilities. The reason for the difference in onus in civil and criminal cases is that, in civil cases, the dispute is between individuals, where both sides are equally interested parties. The primary concern is to do justice to each party, and the test for that justice is to balance their competing claims:”

See City of Gweru v Mbaluka HH93-14…,.

In the case of Zimbabwe Electricity Supply Authority v Dera 1998 (1) ZLR 500 (S); Miller v Minister of Pensions [1947] 2 All ER 372…, the court said the following on the issue of proof in civil cases;

“The degree of proof required by the civil standard is easier to express in words than the criminal standard because it involves a comparative rather than a quantitative test. The civil standard has been formulated by LORD DENNING as follows;

'It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say 'we think it more probable than not' the burden is discharged, but, if the probabilities are equal it is not.'”

It is clear, that, what is being weighed in the balance is not the quantum of the evidence or its weight, but the probabilities which arise from the circumstances of the case: see Selamalele v Makhado 1988 (2) SA 372…,.

The preponderance of probability in favor of the party bearing the onus must be strong.

It has also been said that;

“It is not a mere conjecture or slight probability that will suffice. The probability must be of sufficient force to raise a reasonable presumption in favor of the party who relies on it. It must be of sufficient weight to show the onus on the other side to rebut it.”

See West Road Estates Ltd v New Zealand Insurance Company Ltd 1925 AD 245….,.

Put differently “he who alleges must prove:” see Pillay v Krishna 1946 AD 946.

It is equally trite that;

“…, the true onus never shifts. However, in some cases, the impression of shifting may be derived from the fact that there are different issues in the pleadings. The onus on the different issues is fixed, initially, by the pleadings and does not change:”

See Klaasen v Benjamin 1941 TPD 80.

The onus rested on the plaintiff to prove, that, Old Mutual had consented to the sub-letting of 29 Coventry Road, Harare to the defendant.

Not only has the plaintiff failed to discharge this onus, in my view, the plaintiff has gone further to fail to prove what it alleged.

The lease agreement attached to the pleadings relates to different premises from those identified in the summons and declaration.

That the lease agreement expressly prohibits sub-letting, labelling it a fundamental breach which goes to the root of the lease agreement entitling the lessor to cancel the lease agreement.

There is no evidence in the pleadings, or which was alluded to during the course of the trial, on which the court can find, on a balance of probabilities, that, the plaintiff had been authorized to sub-let the premises known as 29 Coventry Road, to the defendant, by Old Mutual.

It is more probable than not, that the plaintiff sub-let a small portion of those premises to the defendant without the knowledge or consent of Old Mutual. If such consent had been obtained, then, it is more probable than not, that the plaintiff would have attached it to the pleadings as part of the further particulars which had been requested by the defendant.

As correctly found by the court a quo, this is the axis of the matter between the two parties.

In his submission, counsel for the appellant contended, that, on a proper reading of the letters of 31 May 2011 and 3 June 2011 from the first respondent's Group Managing Director, it is clear that the first respondent intended to resile from its obligations in terms of the agreement.

That anticipatory or actual breach required the appellant to make an election either to accept the termination or to enforce the agreement.

The appellant could have said “we do not accept your suspension of the contract and we hold you to it.” Instead, the appellant, firm in its conviction that it would not pay the disputed amounts, accepted the termination.

Whether or not the termination by the respondent was valid or not was not relevant.

Once the appellant accepted the repudiation, this brought the agreement to an end. There would have been no further continuing obligations and the order made by the court a quo would therefore have been wrong.

Whether or not the notice was to terminate the contract in future was irrelevant.

Counsel for the respondents, in his submissions, argued that it was the appellant that sought to repudiate the agreement.

He accepted, that, repudiation is a species of anticipatory breach and that the innocent party has an election either to resist and sue for specific performance, or, alternatively, accept the repudiation which then brings the contract to an end.

It was the appellant, in this case, which sought to repudiate. The respondent did not accept the repudiation.

Further, he submitted, that, as the threat to terminate the agreement by the respondent was not ex nunc but was to take place at a later date, and, as the issue before the court was whether a prima facie case had been established, the court correctly granted the provisional order.

It is correct, that, in determining whether a party has repudiated a contract, the test to be applied is whether the party has acted in such a way as to lead a reasonable person to the conclusion that he did not intend to fulfil his part of the contract.

It is also correct, that, repudiation is a species of anticipatory breach: see Chinyerere v Fraser NO 1994 (2) ZLR 234 (H).

Repudiation may manifest itself in a variety of ways.

As stated by R.H. CHRISTIE, the Law of Contract in South Africa, 3rd ed…,.:

“If it takes place before performance is due, it is sometimes described as anticipatory breach, and, may take the form of a statement that the party concerned is not going to carry out the contract, or an unequivocal tender to perform less than is due, or an unwarranted but unequivocal refusal by a buyer to pay the full purchase price, irrespective of his true intention and the amount of any reduction that may be claimed, or the taking of some action inconsistent with the intention to perform, or, by his own conduct, putting it out of his power to perform….,.”

In his letter of 31 May 2011, the respondents Group Managing Director wrote, inter alia:

“Therefore, be advised that all obligations of Trustco will be suspended on 3 June 2011 at 12h00 Namibian time if all overdue payments are not received by then.”

In my view, this was a clear intimation that the respondent, for the reasons given in the letter, was going to suspend all its obligations towards the appellant. The letter further made it clear, that, if all outstanding amounts were not paid within fourteen days of the date of the letter, the respondent was to deem the contract cancelled.

That this was an anticipatory breach, there can be no doubt.

The procedure to be followed by either party, in the event that it was believed that a breach had occurred at the instance of the other, was clearly provided for in the agreement entered into and signed by both parties.

Nowhere in the agreement was the respondent entitled to suspend all its obligations within three days of giving notice to that effect.

Such conduct suggested that the respondent no longer believed it was bound by the agreement previously entered into by the parties.

Loosely defined, a lease is an agreement in which one party (lessor) offers his property (subject matter of contract) on hire to another (lessee) for a certain fixed sum of money (rent) which is paid periodically.

The lessor-lessee agreement is either written or verbal.

Where it is written, its clauses spell out the rights and obligations of the parties and all matters which are ancillary to the contract.

The applicant and the first respondent entered into a written lessor-lessee relationship respectively. The first respondent leased from the applicant Shop Number 13, First Mutual Centre, 82-86 Herbert Chitepo Street, Mutare (“the property”).

Clause 1.2 of the lease stipulates the rent which the first respondent was to pay to the applicant.

The second and third respondents stood as surities and co-principal debtors for the due and punctual payment of the first respondent's indebtedness to the applicant.

The parties relationship subsisted from September 2010 to February 2016 when the applicant cancelled the lease.

It did so on the allegation that the respondent(s) had breached the terms of the lease. It contended, that, these failed to pay the rent and operating costs as was stipulated in the lease. It alleged that the respondents were indebted to it in the sum of $10,249=30 in toto. It moved the court to:

(i) Enter judgment against all the three respondents in the sum of $10,249=30; and

(ii) Order that the respondents:

(a) Be evicted from its property;

(b) Pay to it holding over damages at the rate of $66=87 per day with effect from 1 June 2016 to the date of their eviction from the property; and

(c) Pay costs of this application on a higher scale.

The respondents opposed the application. They raised one preliminary matter.

They averred, on the merits, that, the lease agreement which, according to them, expired on 31 August 2013, discharged the suretyship agreement.

They stated that any claim against the second and third respondents was, therefore, without any basis.

They submitted that no claim lay against the second respondent, as the latter did not sign the contract of suretyship.

They denied breaching any terms of the lease. They insisted that, if any term(s) was/were breached, the applicant condoned such breach.

They contended, that, the court did not have the jurisdiction to hear and determine the application. They relied on clause 6.1 as read with clause 34.1 of the lease agreement in the mentioned regard. They stated, that, the applicant should have referred the rent dispute to an arbitrator. They submitted that the arbitrator, and not the court, should have determined the rent which they were enjoined to pay.

They maintained the position, that, after 31 August 2013, the parties did not renew their lease and the first respondent became a statutory tenant.

The first respondent, they stated, paid, and continues to pay, what it considered reasonable rentals for the property.

They denied that they owed the applicant any money. They challenged the applicant's statement of account. They insisted that the statement did not capture the parties transactions accurately.

They moved the court to dismiss the application with costs on an attorney and client scale.

In the in limine matter which they raised, the respondents challenged the authority of the deponent to the founding affidavit. They submitted that he was not clothed with the applicant's authority to depose to the affidavit on its behalf as he did.

They, on the mentioned basis, insisted that the applicant was not before the court and that the application should, therefore, be dismissed.

The deponent to the founding affidavit, one Innocent Mupfururirwa, a property manager in the employment of the applicant, stated to the contrary.

He said he was authorised to depose to the affidavit. He stated, in the answering affidavit, that, it was not necessary for him to attach proof of authority to depose to the affidavit. He insisted that the respondents knew that he had the requisite authority. He said they knew of that matter because he had dealt with them on the matter which was then in dispute.

He attached to his answering affidavit Annexures E, F and G.

The annexures were, according to him, evidence of the letters which he respectively addressed to the respondents on 10 December 2013; 20 May 2015; and 12 February 2016. The letters related to the issue of rent for the property.

He contended, that, it was on the basis of the mentioned letters/annexures that the respondents were made aware of his authority to sue for and on behalf of the applicant.

The deponent's argument is devoid of any substance.

Authority to speak or act for and on behalf of the applicant can never be derived from the correspondences which he made to, or with, the respondents as he claimed.

A company, as a legal person, has no mouth through which it articulates its intentions. It has no ears with which to hear. It has no sense of sight or smell. It has no mind of its own. It speaks to no one except through its directors, not individually but collectively, through resolutions, which they pass when they are assembled in one room for the purpose of transacting the business of the company.

Directors, and no one else, are, together, the eyes, ears, nose and mind of the company.

HAHLO brings out the above stated principle in a clear and lucid manner in his South African Company Law Through Cases, 6th ed. The learned author makes reference to the Board of Directors and their powers. He states at p343 as follows:

“The powers of the company vest in the directors as a board, and not as individuals. Directors exercise their powers by passing resolutions at board meetings; of which proper notice must be given to all directors, and at which a quorum must be present….,.”

Just as the mind is the controlling faculty of a person's whole being, directors are the controlling mind of the company. They manage it and they act on its behalf.

The Supreme Court restated that obvious position in Madzivire & Ors v Zvarivadza & Ors 2006 (1) ZLR 514 (S), the headnote of which reads:

“A company, being a separate legal entity from its directors, cannot be represented in a legal suit by a person who has not been authorised to do so. This is a well-established legal principle which the courts cannot ignore….,. The fact that a person is the managing director of the company does not clothe him with the authority to sue on behalf of the company in the absence of a resolution authorising him to do so. The general rule is that directors of a company can only act validly when assembled at a board meeting. An exception to this rule is where a company has only one director who can perform all judicial acts without holding a full meeting.”…,.

It is evident, from the foregoing, that, the assertion of the deponent to the founding affidavit, which is to the effect that he did not need to produce proof of authority, was misplaced.

The law is clear on the matter. Authority to sue is a sine qua non of applications of the present nature.

He said his statement was anchored on the advice which his legal practitioners tendered to him. That advice was, unfortunately for him, a very poor one.

A fortiori when his authority to sue for and on behalf of his employer was being challenged, he did not say the applicant fell into the category of exceptions which the Supreme Court enunciated in Madzivire & Ors v Zvarivadza & Ors 2006 (1) ZLR 514 (S).

Madzivire & Ors v Zvarivadza & Ors 2006 (1) ZLR 514 (S) over-ruled the case which he cited in support of his position on the matter at hand. Direct Response Marketing (Pvt) Ltd v Shepherd 1993 (2) ZLR 218 (H) was decided by this court before Madzivire & Ors v Zvarivadza & Ors 2006 (1) ZLR 514 (S).

I mention, in passing, that, the citation which counsel for the respondent referred in Tattersal and Anor v Nedor Bank Ltd 1995 (2) SA 222, 228F did not match the names of the parties. I was, therefore, unable to derive any benefit from that case as I did not find it in the 1995 (2) set of case authorities.

Tattersal and Anor v Nedor Bank Ltd 1995 (2) SA 222, 228F was, at any rate, decided earlier than Madzivire & Ors v Zvarivadza & Ors 2006 (1) ZLR 514 (S). The latter case, therefore, over ruled Tattersal and Anor v Nedor Bank Ltd 1995 (2) SA 222, 228F as it did Direct Response Marketing (Pvt) Ltd v Shepherd 1993 (2) ZLR 218 (H).

The deponent to the founding affidavit had every opportunity to attach, to his answering affidavit, a resolution of the applicant's directors as the law required him to have done. The resolution would have constituted clear evidence of his authority to depose to the founding affidavit.

His decision not to attach the resolution left the applicant's case standing on nothing. He failed to convince the court that he was clothed with the requisite authority to speak for and on behalf of his employer.

The application cannot, on the mentioned basis, be allowed to stand.

The respondents assertion, which was to the effect that the court did not have the jurisdiction to hear the application, fell more into the realms of a wild goose chase than it fell into the domain of reason.

They hinged that statement on clause 6.1 as read with clause 34 of the lease agreement.

The respondents know, as much as I do, that, section 171(a) of the Constitution of Zimbabwe did not, and does not, allow them to enter into a contract which ousts the jurisdiction of this court. It reads:

“171 JURISDICTION OF THE HIGH COURT

(1) The High Court -

(a) Has original jurisdiction over all civil and criminal matters throughout Zimbabwe;

(b)…,.;

(c)…,.;

(d)…,.”

GARWE JA lucidly stated the inherent jurisdiction of this court in Gawa & Anor v Willoughby Investments (Pvt) Ltd 2009 (1) ZLR 368 (S) wherein he remarked…, that:

“…,. In terms of jurisdiction, the distinction between the Supreme Court and the High Court may be summarised as follows:

Except where specifically empowered, the Supreme Court has no jurisdiction to hear or determine any matter and may only exercise powers in respect of an appeal in terms of the provisions of the Act and Rules of the court. The High Court, on the other hand, has the jurisdiction to hear all matters except where limitations are imposed by law.

In other words, whilst the Supreme Court may do nothing that the law does not permit, the High Court may do anything that the law does not forbid.”…,.

For the abovementioned reason, it was perfectly in order for me to hear the application.

I would, in any event, have heard it for the other reason, that, the lease agreement which the parties signed contained a condition precedent which the respondents did not fulfil.

The condition rendered the contract inoperative until it was satisfied.

Reference is made in this regard to clause 38 of the lease agreement. It reads:

“38 SURETYSHIP IF TENANT IS A COMPANY

In the event that the Tenant is a private, incorporated company, it is a condition precedent to this Agreement that at the time of signature thereof the Tenant shall furnish to the Landlord with written deeds of suretyship and co-debtorship signed by at least two (2) of the directors of the Tenant (or, in the event that the Tenant has only one director, that person plus one other person of equivalent financial means), binding themselves jointly and severally to the Landlord and as co-principal debtors with each other and as co-sureties for each other and renouncing the benefits of excursion and division owed to the Landlord by the Tenant in terms of this Agreement.”…,.

Annexure B, which the deponent to the founding affidavit attached to the application, is the Deed of Suretyship.

Only one director of the first respondent signed the deed. Dadirai V. T. Okonkwo signed it. The other director, Smith Okonkwo, did not.

No reasons were advanced in regard to the observed matter.

It is evident that the lease contains a suspensive condition. It is also clear that the condition remained unfulfilled from the time that the parties signed the lease to date.

A suspensive condition suspends or postpones the operation of a contract or obligation until the condition is fulfilled: see INNOCENT MAJA: The Law of Contract in Zimbabwe…,.

A suspensive condition, also known as a condition precedent, is an event or a state of affairs that is required before something else occurs. It is an event which must occur unless its non-occurrence is excused before performance becomes due, i.e, before any contractual duty exists: see Wikipedia: the free encyclopedia.

DUHAIME's Law Dictionary defines a condition precedent as a contractual condition that suspends the coming into effect of a contract unless and until a certain event takes place.

The condition to which the parties subscribed when they signed the lease is clear and un-ambiguous. It falls within the ambit of the remarks of GREENBERG JA, who, in Worman v Hughes & Ors 1948 (3) SA 495 (A) stated…, as follows:

“It must be born in mind, that, in an action on a contract, the rule of interpretation is to ascertain, not what the parties intention was, but what the language used in the contract means, i.e what their intention was as expressed in the contract.”

The condition, in my view, should have been fulfilled informa specifica and not per aequipollens.

In forma specifica because the contract of suretyship required the signatures of at least two of the first respondent's directors and not one.

The fact that the first respondent has two directors means that the signatures of those two to the suretyship deed would have sufficed. That would have made the lease agreement operative, with rights and obligations of the parties to the lease flowing from the same.

Clause 39.2 of the lease provides, that, the agreement represents the parties entire contract and that no amendment, etcetera, shall be valid until it is reduced to writing and signed by them.

No such amendment of the agreement was made by the parties.

That, it is evident, constitutes the parties acknowledgment that their agreement was to be carried out in its original form.

The duty to comply with the deed of suretyship lay on the respondents. They did not fulfil their obligation in the mentioned regard. They proferred no reason for their non-compliance with the mandatory provision of the lease which they signed with the applicant.

The suspensive condition which existed in the Deed of Suretyship suspended the rights and obligations of each party to the lease agreement. The suspension is still extant until the condition is fulfilled.

It follows from the foregoing, that, but for the lack of authority by the deponent of the founding affidavit, the applicant could have lawfully terminated the contract of lease.

It, however, cannot do so as it remained out of, instead of inside, the court.

The applicant is not before the court.

The application is, accordingly, dismissed with each party being ordered to bear its own costs.

The appellants in this matter were engaged by the respondent on fixed contracts of nine (9) months duration. The last such contract was fixed from 1 October 2006 to 30 June 2007.

By letter dated 27 March 2007, the respondent purported to terminate the appellants contracts of employment before their scheduled date of expiry.

The contracts were to terminate on 31 March 2007 and the appellants were to be paid one month's pay in lieu of notice.

Clause 21 of the contracts required the application of retrenchment procedures in the event of premature termination.

Subsequently, after taking legal advice, the respondent reconsidered its position and accepted that the early termination may have been unlawful.

By letter dated 25 May 2007 from its lawyers, it cancelled the termination and reinstated the contracts of employment with full pay up to 30 June 2007, at which date the fixed term contracts would expire without being renewed.

The matter was then referred to arbitration.

The arbitrator held, that, the appellants had not been retrenched and that the respondent was entitled to act as it did. On appeal to the Labour Court, the arbitrator's decision was upheld. The court found, that, even if the contracts had been prematurely terminated, the appellants were only entitled to their pay for the duration of their fixed term contracts, that is, up to 30 June 2007, and that they were not entitled to any further payment.

The appellants now appeal against that decision.

In their revised grounds of appeal, they seek an order declaring them to have been unfairly dismissed. They also seek an order deeming them to be permanent employees on contracts without limit of time and without loss of salary and benefits, reckoned from the time of dismissal.

In the alternative, they should be deemed to have been re-employed for a further period of nine (9) months from the date of dismissal, on the same terms of employment, and without loss of salary and benefits.

At the hearing of the appeal, the additional claim for the payment of retrenchment packages, in the event of reinstatement not being possible, was abandoned on the basis that such relief was not competent as it was inconsistent with the primary relief sought.

Section 12B of the Labour Act [Chapter 28:01], as amended, regulates dismissal from employment:

“(1) Every employee has the right not to be unfairly dismissed.

(2) An employee is unfairly dismissed –

(a) If, subject to subsection (3), the employer fails to show that he dismissed the employee in terms of an employment code; or

(b) In the absence of an employment code, the employer shall comply with the model code made in terms of section 101(9).

(3) An employee is deemed to have been unfairly dismissed –

(a) If the employee terminated the contract of employment, with or without notice, because the employer deliberately made continued employment intolerable for the employee;

(b) If, on termination of an employment contract of fixed duration, the employee –

(i) Had a legitimate expectation of being re-engaged; and

(ii) Another person was engaged instead of the employee.

(4) In any proceedings before a labour officer, designated agent or the Labour Court where the fairness of the dismissal of an employee is in issue, the adjudicating authority shall, in addition to considering the nature or gravity of any misconduct on the part of the dismissed employee, consider whether any mitigation of the misconduct avails to an extent that would have justified action other than dismissal, including the length of the employee's service, the employee's previous disciplinary record, the nature of the employment, and any special personal circumstances of the employee.”

Counsel for the appellants submits, that, the real reasons for the termination of the appellants contracts were the impact of budgetary constraints and the consequent need to restructure the respondent's operations. This appears from the notices of termination sent to the appellants on 27 March 2007.

Because this premature termination was a disguised retrenchment, it constituted unfair dismissal contrary to section 12B(1) as read with sections 2A(1) and 2A(2) of the Labour Act.

Reliance is placed, in this regard, on the decisions in Mabhena v PG Industries HH115-02 and Machaya & Others v Circle Cement (Pvt) Ltd & Another HH115-03.

Counsel for the appellants further submits, that, the repeated renewals of the appellants contracts changed their status to that of permanent employees.

They had a legitimate expectation of permanency or renewal of their contracts on similar terms.

This is so despite the express provision in their contracts stating that there would be no legitimate expectation of further employment beyond the stipulated date of termination.

He relies for this proposition on various decisions of the Zimbabwean and South African Labour Courts and contends, that, the seemingly contrary decision of this Court in UZ-UCSF Collaborative Research Programme in Women's Health v Shamuyarira 2010 (1) ZLR 127 (S) is distinguishable in this respect.

Moreover, he argues that section 12B(3)(b) of the Labour Act is not exhaustive in its application of the doctrine of legitimate expectation and must be applied in conjunction with the protection against unfair dismissal afforded by section 12B(1) of the Labour Act.

Counsel for the respondent submits, that, the respondent did not violate the appellants right not to be unfairly dismissed under section 12B(1) of the Labour Act by terminating their fixed term contracts with effect from the stipulated date of their expiry. He further submits, that, the legitimate expectation provisions of section 12B(3) of the Labour Act only apply where another employee is engaged in place of the employee whose fixed term contract is terminated. In the instant case, no one else was employed and the appellants jobs have effectively been abolished. In any event, the express provision of each of the appellants contracts was that there was no legitimate expectation of renewal or extension.

I see no reason to disagree with counsel for the respondent's submissions.

Having purported to prematurely terminate the appellants contracts in March 2007, the respondent realized that it had acted unlawfully. It then remedied its breach, in May 2007, by cancelling the earlier termination and reinstating the appellants with full pay up to 30 June 2007. By so doing, the respondent did not terminate the contracts of employment, but simply allowed them to lapse by effluxion of time without further extension or renewal.

The question of compliance with retrenchment procedures, and the payment of retrenchment packages, in terms of clause 21 of the contracts, would only have come into play had the respondent persisted with its premature termination.

In this regard, the cases dealing with disguised retrenchment that are relied upon by counsel for the appellants are clearly distinguishable. They do not support his argument because they are concerned with the termination of periodic contracts of indefinite duration as opposed to fixed term contracts.

Although the appellants were not called back to work, they were paid the salary and benefits that were due to them until the expiry of their fixed term contracts.

The respondent was clearly entitled to do so by virtue of the express duration of the contracts of employment, and cannot, therefore, be said to have acted in breach of contract.

In my view, the appellants were duly compensated, without having worked for three (3) months, and cannot claim to have been unlawfully dismissed within the contemplation of section 12B(1) of the Labour Act.

I now turn to the argument, that, the continual renewal of fixed term contracts over a period of time creates a legitimate expectation of re-employment or permanent employment.

This position, in its essence, was rejected by this Court in UZ-UCSF Collaborative Research Programme in Women's Health v Shamuyarira 2010 (1) ZLR 127 (S) - the material facts of which are virtually identical to those in the present matter.

My reading of section 12B(3)(b) of the Labour Act does not give me any ground for departing from that decision.

The plain meaning of that provision is that the employee on a contract of fixed duration must have had a legitimate expectation of being re-engaged upon its termination and that he was supplanted by another person who was engaged in his stead.

These requirements are patently conjunctive, and, the mere existence of an expectation without the concomitant engagement of another employee does not suffice.

I do not think that the courts are at large, in reliance upon principles derived from international custom or instruments, to strike down the clear and unambiguous language of an Act of Parliament.

In any event, international conventions or treaties do not form part of our law unless they are specifically incorporated therein, while international customary law is not internally cognisable where it is inconsistent with an Act of Parliament: see section 111B of the former Constitution and sections 326 and 327 of the current Constitution.

Apart from the clear wording of section 12B(3)(b) of the Labour Act, we cannot avoid the explicit provisions of the contracts in casu.

The opening paragraph of each of the contracts stipulates that:

“This contract shall in no way whatsoever lead to a legitimate expectation of further employment beyond the contract's date of termination.”

This, in itself, as was recognised by ZIYAMBI JA in UZ-UCSF Collaborative Research Programme in Women's Health v Shamuyarira 2010 (1) ZLR 127 (S), indisputably undermines and renders untenable the appellants contention of having been unfairly dismissed.

They are surely bound by the express terms that they have agreed to and cannot then complain, notwithstanding those terms, that they had a legitimate expectation of being re-engaged.

In principle, it is not open to the courts to rewrite a contract entered into between the parties or to excuse any of them from the consequences of the contract that they have freely and voluntarily accepted - even if they are shown to be onerous or oppressive. This is so as a matter of public policy: see Wells v South African Alumenite Company 1927 AD 69…,.; CHRISTIE, The Law of Contract in South Africa, 3rd ed….,.

Nor is it generally permissible to read into the contract some implied or tacit term that is in direct conflict with its express terms: see South African Mutual Aid Society v Cape Town Chamber of Commerce 1962 (1) SA 598 (A)…,.; First National Bank of SA Ltd v Transvaal Rugby Union & Another 1997 (3) SA 851 (W)…,.

In the premises, none of the arguments proffered on behalf of the appellants, grounding their claim for permanent employment or re-employment, can be sustained in the present case.

This is an appeal against the whole judgement of the High Court (the court a quo) sitting at Harare, dated 11 January 2023, wherein it declared that the procurement contract entered into between the appellant and the respondent was valid and binding between them. The court a quo proceeded, consequently, to grant an order of specific performance of the contract.

It also dismissed the appellant's counter claim and ordered that the appellant pays the respondent's costs in the claim in reconvention.

Aggrieved by the decision of the court a quo, the appellant has noted the present appeal.

On 23 October 2015, the parties entered into a Public Procurement Engineering, Procurement and Construction Contract (the contract). In terms of that contract, the respondent was required to construct one solar Photovoltaic Power Station to the capacity of 100MV in Gwanda (the project).

A dispute arose during the implementation of the project.

The respondent issued summons in the court a quo seeking the following relief:

“1. An order declaring that the procurement contract for the Engineering, Procurement and Construction (EPC) of the 100 MV Gwanda Solar Project (ZPC 304/2015) between the parties, as amended, is valid and binding between the parties.

2. Consequent to the declaration of the validity of the EPC contract, an order for specific performance.

Alternatively:

Damages in the sum of US$25,000,000 (twenty five million United States dollars) for repudiatory breach of the EPC contract by the defendant.

3. Costs of suit at the attorney and client scale.”

In its declaration, the respondent amplified its claim as follows:

The agreed contract price for the project was US$172,848,597=60 exclusive of taxes. The respondent was to secure and facilitate the funding of the project as well as bear most of the risks associated with the construction of the plant up to the point of commissioning.

The contractual terms were derived from the FIDIC Silver Book (General Conditions of Contract for EPC/Turnkey Project) 1999, First Edition. The General Conditions were applicable to the extent that they were amended by the Particular Conditions of contract agreed to by the parties.

The appellant was to borrow the funds sourced by the respondent in its name, superintend over both the construction works, and facilitate payments due to the respondent.

The appellant would only take over the risk and liability in the power infrastructure upon successful completion of the solar plant, that is, at the “turn of the key”.

The commencement of the contract was subject to certain suspensive conditions which were to be satisfied or achieved by both parties within a period of 24 months reckoned from 23 October 2015, the date of signature of the contract. The period within which the suspensive conditions were to be satisfied (the Conditions Precedent Satisfaction Period”) could be extended by a period of 6 months through an amendment to the contract. Such extension was to be done before the expiry of the tenure of the conditions precedent satisfaction period.

Beyond the conditions precedent satisfaction period, either party became entitled to terminate the contract, provided that the party seeking to terminate the contract was not responsible for the delays in the fulfilment of the conditions precedent.

Before the expiry of the conditions precedent satisfaction period, on 23 October 2017, the parties agreed to enter into an addendum to the contract, the terms of which would allow the appellant to pay some of the respondent's subcontractors directly in order to carry out the pre-commencement works at the project site.

The arrangement was in anticipation of the commencement of the contract.

The addendum was executed on 21 September 2017, prior to the expiry of the conditions precedent satisfaction period set for 23 October 2017.

The addendum set different timelines for the conclusion of the pre-commencement works. The appellant undertook to pay for that work.

The appellant, however, failed to pay for such works, and, as a result, these were not executed at all or were not executed timeously.

The appellant sought to extend the conditions satisfaction period by a period of six months, on 29 November 2017. The extension was to be reckoned from 23 October 2017.

The respondent objected to the extension, which it regarded as a breach of the contract, given the new terms of the addendum to the contract and the appellant's failure to perform its obligations under the addendum.

According to the respondent, the appellant unilaterally demanded that the suspensive conditions be completed on or before 23 April 2018, a demand that the respondent viewed as a material breach of the express provisions of the contract.

By way of notices dated 10 April 2018, 6 July 2018, and 31 July 2018, the appellant informed the respondent that the contract had expired by operation of law.

All contractual obligations between the parties were, in terms of these notices, terminated.

The appellant insisted on such termination despite its admission that it had failed to perform its obligations to pay the respondent's sub-contractors.

The respondent further contended, that, the termination was also unlawful in view of the appellant's direct liability in causing delays in the fulfilment of the conditions precedent within the agreed time frames.

It was thereafter that the respondent approached the court a quo, by way of application, seeking a declaration of validity of the contract and an order for specific performance.

The application was granted on 13 December 2018 under HC8159/18.

The appellant appealed that determination to this Court under SC39/21.

In the meantime, the respondent applied for leave to execute judgment pending appeal.

The court a quo granted that application on 19 June 2019 under HC2425/19.

The respondent claims, that, during the two year period in which the parties awaited the outcome of the appeal at the Supreme Court, the parties implemented the contract, as amended, and engaged in a series of meetings that culminated in the drafting of an amended and restated contract.

On 13 May 2021, this court upheld the appellant's appeal and set aside the judgment of the court a quo. This Court determined, that, the matter was replete with material disputes of fact which could not have been resolved on the papers before the court a quo.

It was for that reason that the respondent returned to the court a quo and instituted action procedure, seeking the same relief.

In its plea in the court a quo, the appellant raised two points:

(i) Firstly, it contended that the contract never took off because the conditions precedent were not fulfilled. There was thus no basis at law for the respondent to seek the declaration of validity.

(ii) Secondly, it averred that this court had dismissed the respondent's claim. It therefore pleaded res judicata.

The appellant also filed a counter-claim seeking an order in the following terms:

“(a) An order that the EPC contract, and the Addendum entered into by the parties, did not commence due to the plaintiff's failure to meet the prescribed conditions precedent.

(b) Damages for breach of contract and misrepresentation in the sum of US$96,673,236=30 (ninety-six million six hundred and seventy-three thousand two hundred and thirty-six United States dollars thirty cents.”

The matter was referred to trial on the following agreed issues:

In respect of the main claim:

“(a) Is the procurement contract entered into by and between the plaintiff and the defendant, dated 23 October 2015, valid and binding on the parties?

(b) Depending on the conclusion reached on the above question, did the plaintiff suffer damages, and what is the quantum thereof?

In respect of the claim in reconvention:

(a) Was the agreement entered into by and between the parties induced by misrepresentation on the part of the plaintiff?

(b) If the plaintiff breached the agreement, then, did the defendant suffer damages as pleaded by it or at all and what is the quantum?”

At the commencement of the trial in the court a quo, the appellant abandoned the claim in paragraph (b) of its prayer, that is, the claim for damages for breach of contract and misrepresentation action in the sum of US$96,673,236.

The appellant, however, persisted with the claim for US$3,330,736=30, being the advance payment made to the respondent in respect of the pre-commencement works.

The respondent's sole witness was its Managing Director, Wicknell Munodaani Chivhayo. His evidence was summarized by the court a quo as follows:

He told the court, that, when the tender for the project was flighted, the appellant had no funds for the project. For that reason, the appellant was looking for a contractor that would also assist it in raising funds for the project.

The respondent's partner, CHINT, was roped into the project to bring in the required funds. He told the court, that, CHINT had the required financial and technical capacity to execute the project.

The contract price was US$172,848,597=60.

Mr Chivhayo said, that, the commencement of the contract was subject to the satisfaction of the conditions precedent set out in clause 5 of the contract. These included the sourcing of the funds for the project and the completion of the feasibility studies. The appellant was responsible for funding the pre-commencement works and the respondent was required to assist with the fundraising.

To that end, the respondent had engaged financial consultants and financial partners such as the China Exim Bank and the Ministry of Finance and Economic Development. These engagements were done before the commencement of the project.

The witness blamed the appellant for the collapse of the engagements that were intended to birth the necessary financial agreements.

China Exim Bank required that the Government of Zimbabwe guarantees the loan facility.

The witness approached the Ministry of Finance on behalf of the appellant. The Ministry indicated its interest to support the project and had agreed, at the witness's suggestion, that the project be given national status.

The Ministry of Finance undertook to provide the Government guarantees required by China Exim Bank and had written a letter, dated 10 March 2016, addressed to the Export-Import Bank of China, undertaking to issue a sovereign guarantee for the project in the sum of US$147,000,000.

However, the Government of Zimbabwe had been blacklisted for defaulting on a loan of US$400 million. For that reason, the China Export and Credit Insurance Corporation (China Sinosure), a state funded insurance company established to support China's foreign and trade development co-operation, refused to secure the loan.

Thereafter, the parties mooted other sources from which to raise capital.

One of these was the proposed raising of energy bond through the CBZ Bank. This proposal had the full support of the SPB (State Procurement Board). However, the appellant was not interested, even after its own Ministry directed it to pursue that route.

The witness further told the court, that, the appellant frustrated the signing of the financial arrangements, contrary to the spirit of clause 5(a) of the contract.

The witness had this to say about the advance payment demand guarantee:

During meetings with the appellant's officials, feasibility studies had been carried out and the appellant owed the respondent funds for the work done. There was no need for such guarantee once work had been completed and payment now due to the plaintiff. The advance payment received was therefore in respect of the feasibility studies that had been performed.

With regards the performance security, the witness said it was not provided for, partly because the appellant still had some outstanding amounts still to be paid, and that, at any rate, it had not been asked for.

He also confirmed, that, the appellant had carried out its due diligence in terms of clause 5(f) of the contract.

Both parties representatives travelled to China for the purpose of evaluating the respondent's partner, CHINT. Both parties were aware that CHINT had successfully carried out some projects in Zimbabwe.

The witness stated, that, the production of the Environmental Impact Assessment was the responsibility of the appellant. It was only produced through his intervention, when he directly engaged the responsible Ministry.

The land for the project was also acquired through his efforts when he approached the Ministry of Lands.

He confirmed that both parties had secured the necessary authorizations as required by clause 5(f) of the contract.

Only one condition remained outstanding, that is, the financing agreements.

He said that the amendments of the contract, through the addendum, were occasioned by the loss of time.

In terms of the agreement, as re-affirmed by the addendum, the total cost of the pre-commencement works was US$5,111,224=50. The respondent was supposed to contribute to that amount in the sum of US$1,000,000 with the appellant contributing the remainder.

The respondent did not pay its contribution as it was only required to perform work of an equivalent value.

He said that after the payment of the feasibility studies, and part of the fee for the pre-commencement works, the appellant still had an outstanding liability in the sum of US$1,232,322=87 for part of the pre-commencement works carried out.

The respondent's sub-contractors were to be paid from that outstanding amount.

He stated that the appellant caused his arrest by ZACC officials for non-performance of the contract. He wrote to the appellant's Managing Director complaining about the unfounded allegations of corruption. His arrest negatively affected the execution of some of the works by the respondent's subcontractors.

He insisted that the conditions precedent satisfaction period was extended by the parties, and yet, the appellant went on to raise a criminal complaint for non-performance.

He made reference to clause 5(i) of the contract which provided, that, if the conditions precedent were not satisfied on or before 24 months after the date of signature of the contract, the parties should meet, and, if need be, the appellant could, in its sole discretion on or at any time before the lapse of the 24 month period, elect to extend the conditions precedent satisfaction period by a further six months.

He referred to a letter from the appellant to the respondent, dated 29 November 2017, in terms of which the period was extended by a further 6 months from 23 October 2017 to 23 April 2018.

The witness made reference to various correspondences between the parties, and other stakeholders, tending to show that the appellant was responsible for the failure to sign financial agreements during the extended period.

He averred, that, in terms of clause 5(i) of the contract, the appellant was estopped from relying on its own breach to cancel the contract.

He said that the respondent declared a dispute between the parties in terms of the contract. The dispute was declared through a letter dated 15 January 2018. In terms of the contract, the dispute was to be adjudicated by the Dispute Adjudication Board, which was duly constituted.

The appellant's attitude was that there was no need for the constitution of the Board as the parties could meet and resolve the dispute.

The respondent then sought to refer the matter to arbitration, but, the appellant objected saying that it was not an arbitration matter. It was then that the respondent approached the court a quo for an order of specific performance, alternatively, damages.

It succeeded in its quest for specific performance. The appellant appealed that decision to this Court.

Pending the hearing of the appeal, the respondent applied in the court a quo for an order to execute the judgment of that court pending appeal. That application was granted, but, the appellant did not comply with it.

In the meantime, according to the witness, the Ministry of Energy directed that the parties further engage in order to give effect to the contract. The directive was contained in a letter dated 15 June 2020.

As a result, the parties prepared an amended contract which they are yet to sign.

That development was seen by the witness as dispelling the notion that specific performance was no longer possible.

Thereafter, various engagements were initiated by the Ministry of Energy to iron out the problems bedeviling the implementation of the contract. On 6 July 2020, the Minister of Energy wrote to the Executive Chair of ZESA Holdings intimating to the Chair that his office was required “to urgently conclude the drafting of all the pertinent agreements and financial instructions necessary for the available financier to avail the funds required to implement the project.”

This letter was copied to the witness.

The witness asserts, that, the Government of Zimbabwe, through the Ministry of Energy, as the shareholder in the appellant, wanted the project to be implemented without delay. It was for that reason, that, the Ministry had intervened calling on both parties to implement the project.

However, the appellant remained defiant.

The witness indicated, that, in July 2020, the parties arranged a joint visit to the site. The purpose of the visit was to assess the work done and that which remained to be done, since both parties were negotiating a revised contract.

Thereafter, the parties prepared a report, comprising pictures and video evidence, demonstrating their findings on the ground. The report was jointly signed by the parties representatives. The appellant was represented by its project manager, Mr Mugwagwa, and its officials Mr Fambi and Mr Chinho. On the other hand, the respondent was represented by the witness, its project manager, Mr Magweza, and an official called Mr Mubviri. The witness participated in both the joint visit and in the compilation of the joint report.

The witness opined, that, the exercise was an indication that the contract was temporarily on hold.

The witness stated, that, the appellant's counter claim for the sum of US$3,310,736=30 was devoid of merit if considered in the context of the joint report. It was made on the premise that the pre-commencement works were not carried out, yet, the report showed otherwise. The report confirmed that the appellant owed the respondent some money for work done at the conclusion of the pre-commencement works. It also confirmed that the advance payment guarantee was no longer necessary.

He was adamant that the objective of the pre-commencement activities, as set out in the contract, were satisfied. In that regard, he was of the view that the appellant was being malicious in suggesting that the contract was not implemented at all.

The witness justified the respondent's alternative claim for damages as follows:

The respondent had incurred expenses to do with the tendering process as well as the due diligence exercise when the parties had to travel to countries such as China and India. That included the cost of air fares of the appellant's personnel that had to be covered by the respondent. The respondent also claimed risk, occupational damages, and damages for reputational loss occasioned by the negative publicity caused by the appellant. The witness also stated, that, the respondent's security guards were kicked off the project site by the appellant at a time the respondent was prepared to carry on with the project.

Under cross examination, he insisted that discussions for a new contract started in earnest in 2020 after the new Minister of Energy had assumed office.

He said the Minister was unhappy over the delays in implementing the project. The Minister was displeased with the appellant's failure to comply with CHITAPI J's order granting the respondent leave to execute the High Court judgment pending appeal.

The parties met again to discuss the way forward - with no positive results.

He insisted that there were financiers ready to fund the project, but, for the obstinacy of the appellant; a fact he communicated to the Minister. He said that the execution of the Amended and Restated Contract Agreement was not an admission that the respondent had failed to perform. The idea was simply to kick start the project, with the respondent required to source funds for the initial phase of 10MW with the rest of the MW coming later as provided in the contract.

He said it was the EPC contract that is sought to be enforced and not the Amended Restated Contract.

The respondent had even offered to reduce the price to demonstrate its commitment to the implementation of the contract.

Asked whether a guarantee was provided by the respondent, as required by the contract, the witness stated that CHINT wrote to the appellant advising that they had the guarantee in place, but the appellant dithered. The offer was not accepted by the appellant because it had no money.

However, the appellant did make payments for the feasibility and pre-commencement works without an advancement payment guarantee.

This was justifiably so because the respondent had delivered those activities.

He insisted that the appellant's letters of 7 and 10 April 2018 and 6 July 2018, which confirmed the non-extension of the condition satisfactions period beyond 23 April 2018, prevented the respondent from fulfilling the conditions precedent as set out in clause 5a. This was because the appellant failed to pay the respondent's sub-contractors, and, as a result, the pre-commencement works could not be completed.

He further stated, that, although the actual project had not yet commenced, save for the pre-commencement works, the respondent needed only 6 months to complete the first 10MW once it secured the necessary funding.

He accepted that the respondent had revised the project costs downwards in the Amended and Restated Contract because the costs of solar products had generally gone down on the international market.

He dismissed the ADB integrity report on the debarment of CHINT on the basis, that, the respondent was not seeking funding from ADB. In any case, the debarment was lifted as CHINT was never found guilty of any fraudulent conduct.

Asked how the project could be implemented since the appellant did not have financial resources, he responded as follows:

The respondent had presented to the appellant China Exim Bank as a willing financier in 2015. The respondent could not access the funding set aside by China Exim Bank because the appellant's shareholder owed the bank's export credit insurance adviser, Sinosure, and its account was in arrears; China Exim Bank said it could still lend the money using other insurers. There were alternative funders that did not even require underwriters. The respondent introduced other local financiers, such as CBZ and the African Transmission Cooperation (ATC), as prospective funders. The Ministry of Energy even approved the funding proposal by ATC in June 2020.

The appellant was mandated to amend and restate the terms of the contract to give effect to the new funding model but it failed to do so.

The witness said he had also approached NSSA, on behalf of the appellant, requesting assistance in raising US$25,927,289.

The offer was also not taken up by the appellant.

The witness stated, that, the annexure to the joint report prepared during the joint visit to the site, dated 13 July 2020, was part of the main report prepared by the parties representatives. He said that the report, together with the annexure, was actually sent to the respondent by the appellant after the joint visit.

The appellant called one witness, Cleopas Fambi, its Assistant Project Manager.

During the period 2015-2017, his duties included the management of the project between the appellant and the respondent. He was involved in the tendering stage, contract negotiations, and the pre-commencement works. His evidence was to the following effect:

Sometime in 2013, the appellant, through the State Procurement Board (SPB), floated a tender for the construction of 3 x 100MW photovoltaic solar plants at Gwanda, Insukamini and Munyati.

The respondent was awarded the tender to construct the solar plant at Gwanda.

The parties concluded the contract on 23 October 2015. The contract was to commence in full force and effect after the satisfaction of the conditions precedent stipulated in the contract.

The respondent failed to fulfil the conditions precedent under clause 5 of the contract and the conditions remain unfulfilled to this date. As a result, the contract did not commence because of the respondent's failure to fulfil those conditions.

He stated that the addendum to the contract dealt with the pre-commencement works listed in schedule 11 of the contract. The appellant paid for the pre-commencement works in advance. The respondent, however, failed to provide the bank guarantee for the advance payments. It also failed to provide its portion that it was meant to contribute to the pre-commencement works. The respondent also misrepresented its capacity to perform the contract.

The witness said, that, he was part of the joint team that visited the project site on 13 July 2020. The visit took place in the context of a proposal to implement the project in phases. The works had been partially completed on the ground. No maintenance or repairs had been carried out since July 2020.

With regards the documentation attached to the joint report showing the various activities of the pre-commencement works undertaken on site and the bill of quantity amounts, the witness said that he was seeing these papers for the first time in court.

He said that the amount of US$2,031,230 representing the value of the ground site clearing was overstated since there was still need to carry out ripping of the top soil, clearing, and site levelling.

He dismissed the allegation that the appellant did not wish to implement the project, saying that the appellant's conduct was consistent with a desire to see the project completed. It was for that reason that the appellant had paid for the pre-commencement works.

Under cross-examination, the witness admitted that the appellant was a State commercial entity and therefore subject to the law governing procurement by State entities.

He agreed that according to the law, the appellant's accounting officer was its Managing Director who was wholly responsible for the administration of the project.

He conceded that he could not account for the project within the contemplation of the law as he was not the appellant's accounting officer. The accounting officer was the person with the complete records of all the transactions.

Asked whether he could provide insight on the issue of financing agreements, he stated that his insight was limited. He could not comment as to why there was no financial closure because he did not have the required information. He could also not comment on whether the appellant deliberately frustrated the financial closure as alleged by the respondent. He could not deny that CHINT had procured funding from China since he was not the accounting officer. Neither could he deny that the respondent had, as an alternative, engaged domestic funders to finance the project and that its efforts had been frustrated by the appellant's ambivalence. He could also not deny that CHINT had offered a US$52 million guarantee but the appellant had not embraced it because it did not have the required funds.

He said the best person to comment would be the accounting officer since all correspondence was directed to him.

The witness admitted, that, the parties did not refer their dispute to a consultant or engineer because there was no disagreement on the value of the pre-commencement works carried out.

The witness was also part of the team that carried out a site visit in July 2020. The parties agreed that the fence was erected and completed. He agreed that the appellant therefore received value at the conclusion of that part of the project. He also agreed that the feasibility study had been done and completed. Repairs and maintenance works had also been carried out.

Although he denied the value delivered, ascribed to the pre-commencement works, in the sum of US$3,382,697 as recorded in the bill of quantities report, he conceded that he could not tell the value that had been delivered to date.

Further, he could not comment on how the sum of US$3,310,736=30 representing the appellant's counterclaim was arrived at. It would require the accounting officer, his team, and the contractor to confirm how the figure was arrived at.

He also admitted that, at some point, the appellant had ordered the respondent's workmen off the site.

The witness could not comment on the Ministry's directive that the project be completed.

His attention was drawn to the fact, that, on 6 July 2020, the minister had, by letter of that date, communicated Government's position to the chairperson of ZESA Holdings. Another letter, dated 15 June 2020, had been written to the ZESA chairperson by the minister. In it, the minister had reiterated Government's desire for the parties to move with speed to implement the project without delay.

The witness could not deny that the contract was still capable of performance and that the respondent could still secure funding to achieve financial closure. He also admitted, that, the appellant was desirous of addressing power shortages. That desire is what had given impetus for the project.

At the end of the trial, the parties filed written closing submissions.

The respondent submitted, that, the only issue that remained for determination was whether or not the contract remained valid and capable of performance. As to the counter claim, it submitted that the issue to be determined was whether the respondent was liable for the advance payment made for the pre-commencement works. The respondent submitted, that, no evidence had been adduced to support the counter-claim. The respondent submitted that it was ready to perform the contract and that it had the capacity to perform the contract.

It also submitted that it was able to provide the required finances. It relied on the case of His Holiness Acharya Swami Dasji (1996) 4 SC 526 for that contention.

The respondent argued, that, the onus rested on the appellant to show that performance was no longer possible.

It contended, that, at law, where one party to a contract repudiated the agreement, the innocent party could elect to claim specific performance of the contract or damages in lieu of specific performance.

It submitted that specific performance was in the court's discretion and that its case had to be determined on its own merits.

The respondent cited the case of Benson v SA Mutual Life Assurance Society 1986 (1) SA 776 (A) where it was held, that, the plaintiff had the right to elect whether to hold a defendant to his contract and claim performance by him of what he bound himself to do or claim damages for the breach. On the other hand, the defendant did not have that right of election.

According to the respondent, the appellant did not lead any evidence to show that specific performance was impossible. It contended that the appellant could not rely on evidence in prior litigation because it had not led that evidence in the present matter.

The respondent submitted, that, the evidence showed that it had done enough to secure the finances required for the project but the appellant failed to come to the party. It further blamed the conduct of the respondent's shareholder, the Government of Zimbabwe, as being partly to blame for the appellant's failure to perform.

The respondent dismissed the evidence given by the appellant's sole witness as ineffectual because the witness admitted that he was not competent to testify on matters which only the appellant`s CEO could shed light on. This witness was, according to the respondent, unable to give evidence proving the value of the pre-commencement work done, nor could he dispute the contention that it was the appellant that actually owed the respondent.

The respondent insisted, that, the addendum to the contract was not a separate document running parallel to the main agreement as contended by the appellant. Rather, the addendum should be interpreted as an integral part of the main agreement.

Further, the respondent contended that the appellant had frustrated the financing agreements, and, for that reason, the court should deem the condition precedent to have been fulfilled in line with the doctrine of fictional fulfilment.

Reliance was placed on the case of Scott & Anor v Poupard & Anor 1971 (2) SA 373 (A) wherein the factors to be established in order to invoke the doctrine of fictional fulfilment were set out as follows:

(i) Non fulfilment of the condition;

(ii) The defendant's breach of his duty with intent to frustrate the fulfilment; and

(iii) A causal link between the non-fulfilment and the defendant's intentional frustration of the fulfilment of the condition.

The respondent averred, that, generally, the court does not have a discretion to refuse to enforce a term contained in a lawfully concluded agreement. In determining whether or not to enforce such a term, the court will be guided by the dictates of public policy.

It submitted, that, the evidence adduced showed that the appellant had frustrated the conclusion of financial agreements. The appellant, argued the respondent, should not be allowed to benefit from its own wrongdoing.

The appellant had not placed before the court the FIDIC document, despite its plea that the agreement should be read in light of the provisions thereof. For this reason, the respondent contends that the FIDIC cannot be a factor in the interpretation of the agreement.

The appellant's closing remarks were to the following effect:

It submitted that Mr Chivhayo's evidence was unreliable and thus the respondent had failed to discharge the onus on it to prove its claim. It accused this witness of changing his evidence when it suited him. It said that his evidence was inconsistent with contemporaneous documents, and that he referred to non-existent documents.

The appellant also made reference to the proceedings in case number SC 39/21 and submitted, that, in that case, this Court made a finding that the respondent had failed to meet the conditions precedent set out in clause 5 of the contract.

This Court, according to the appellant, had established that the respondent had conveniently avoided the action procedure in a bid to stay away from the truth and hoodwink the court.

The appellant also argued that in its evidence, the respondent based its claim on contentious issues raised by the appellant in its replication and not based on its own declaration. The appellant argued, that, the respondent ought to have amended its declaration to incorporate the claims that were never pleaded in the declaration.

The areas of evidence of concern included the China-Exim Bank financing issue, the CBZ and ATC funding and the allegation that the appellant filed fictitious and malicious charges of fraud and corruption against Mr Chivhayo.

The appellant also submitted that the letters of 10 April, 6 July and 31 July 2018 which were alleged to constitute a breach of the contract in the respondent's declaration were never referred to in the examination in chief of the respondent's witness.

The court a quo observed that the matters complained against in this regard are matters of evidence which would not ordinarily be set out in the pleadings but in the evidence.

The appellant further submitted, that, it was common cause that the conditions precedent satisfaction period expired on 23 October 2017 and that the purported extension of that period, by six months, after that date, though not in accordance with the contract, was not a nullity as the respondent could have accepted it.

It averred, that, although its notice to terminate was not delivered in a letter headed “Notice of Termination” it remained a valid notice.

It contended that the issue is not about the absence of notice, but, rather, whether the appellant had the right to terminate the contract, it being alleged that it (the appellant) was responsible for the delay in the satisfaction of the conditions precedent.

The appellant submitted, that, the respondent alleged a breach of Addendum 1, which breach would only affect Schedule 11 of the contract but not clause 5 of the contract.

It submitted that the respondent had failed to indicate when these breaches had occurred.

It further contended, that, Addendum 1 was only executed one month before the expiry of the conditions precedent satisfaction period, or 23 months after signature of the contract. An alleged breach of Addendum 1, it is contended, could not explain the failure to complete the conditions precedent in the preceding 23 months.

The appellant argued, that, this was not a proper case in which the court could exercise its discretion in granting specific performance because the present position was at odds with the parties original position.

The original intention was that the project would take four years. It is contended that the construction and hand over of the solar plant would thus have been completed by October 2019.

The appellant argued, that, if specific performance were to be granted, as requested, the project would be implemented between March 2029 to 2034 - 10 to 15 years later than originally projected.

In any event, argued the appellant, the project was no longer viable because the cost of constructing the plant had decreased due to advances in solar technology. As a result, the respondent stands to make an additional USD33 million profit should specific performance be granted.

The appellant further argued, that, the fact that the parties negotiated a new contract after the judgment of the court a quo, in case number HC8159/18, was testimony to the fact that the parties had realized that the present contract was no longer viable.

It was for that reason that the parties carried out a joint visit to the project site on 13 July 2020.

The Minister of Energy had urged the parties to implement this amended contract. The appellant averred that the Ministerial report related to the amended contract and not the original contract.

Another reason for negotiating the new contract was that the African Development Bank had debarred CHINT for fraudulent practices.

Further, the appellant averred that the introduction of a new currency regime, in February 2019, had implications on the funding of the project as all transactions in USD terms done before February 2019 were now valued in RTGS dollars at the rate of one to one with the USD.

It was also the appellant's argument, that, the respondent had failed to plead relief relating to fictional fulfilment and the factual basis upon which the court could grant the relief of fictional fulfilment.

The appellant further argued, that, fictional fulfilment would not make sense because the project needed to be funded, and that, in any event, the appellant would not be able to pay the contractual amount.

It was submitted by the appellant, that, its Board could not authorise the commencement of the project knowing fully well that it was not going to be funded.

The appellant also argued, that, if fictional fulfilment were granted, there would be implications on third parties in line with the definition of “financial agreements.”

It was, for example, a requirement that the Government of Zimbabwe be a co-signatory to the financial agreements. That requires that the Government be a fictional party to the fictional finance agreement. It was submitted, that, there was no basis upon which the court could exercise jurisdiction over Government when it was not cited as a party to the present proceedings.

The appellant denied that it intended to frustrate the project, citing its actions in paying the sum of USD5.6 million to the respondent and in extending, through its letter dated 29 November 2017, the conditions precedent satisfying period.

It argued, that, it was the one that took steps to secure funding for the project by communicating with key stakeholders such as Ministry of Finance, the Procurement Board and NSSA. It had also carried out all the conditions precedent which required its attention, such as the feasibility studies, due diligence, getting the Environmental Impact Assessment Certificate, and acquiring land for the project.

On the contrary, the appellant submitted that the respondent had failed to provide an Advance Payment Guarantee and the performance security as required in terms of the contract. The appellant also blamed the respondent for the collapse of the China Exim Bank funding stating, that, if the respondent had done its due diligence, it would have known, from the beginning, that, the financial institution would not be in a position to assist in view of the Government of Zimbabwe's arrears with the financial institution.

With regards the respondent's claim for the sum of US$3 million for expenses incurred, the appellant submitted that no evidence had been led to prove that it was responsible for causing the damages complained of. It argued, that, it cannot be held liable for the expenses incurred by the respondent during the tendering process. Such expenses could be recovered through performance of the contract when profit is then earned.

The appellant also denied liability for the respondent's loss of profit arguing, that, such a claim is only tenable where the appellant had terminated the contract. In casu, the respondent avers that the contract was not terminated. There is therefore no basis upon which it could raise such a claim.

Concerning its claim in reconvention, the appellant submitted that it provided the respondent with an advance of US$5.6 million. Of this amount, the sum of US$2.3 million went towards the feasibility studies. Its claim is for the balance in the sum of US$3,310,736=30.

The respondent was required to contribute the sum of US$1 million towards pre-commencement works. The contribution was to be done through the carrying out of works, with no cash payments. However, the appellant avers that the pre-commencement works were not completed, as indicated in the joint site visit report, hence the claim for US$3,310,736=30.

Alternatively, the appellant was willing to be compensated in terms of the respondent's own computation which puts the figure at US$2,299,563=13.

It was on that basis, that, the appellant moved for dismissal of the respondent's claim. It also prayed that its claim in reconvention be granted with costs.

The court a quo found in favour of the respondent and dismissed what remained of the appellant's counterclaim. Its specific findings on the issues before it were as follows:

The appellant had raised the defence of res judicata premised on the decision of this Court in SC39/21. That proved untenable as the papers clearly showed, that, the appeal was determined on a technicality, namely, that, the application in the court a quo had been replete with material disputes of fact which could not be determined without hearing viva voce evidence. The court a quo held, that, this Court had not delved into the merits of the matter as alleged by the appellant. No decision on the merits had been made, and, therefore, the appellant's claim to the contrary was rejected.

The court a quo noted, that, the appellant had abandoned its claim to the effect that the contract had been induced by fraudulent misrepresentation on the part of the respondent. That being the case, the court a quo noted, that, in the absence of the appellant's assertion to the contrary, it must be presumed that the validity of the contract is no longer in contention.

That being the case, the court a quo took the view that the only issue left for determination was the status of that contract. It observed, that, the status of the contract was the central issue upon which the consequential reliefs sought by the respective parties would be determined.

The respondent's contention was that the amended contract remained valid and binding, hence its claim for consequential relief in the form of specific performance. On the other hand, noted the court a quo, the appellant sought a declaratur to the effect that the contract never commenced as a result of the respondent's failure to meet the prescribed conditions precedent.

The appellant also averred, that, it had cancelled the contract as a result of that breach on the part of the respondent.

It further claimed (falsely in the opinion of the court a quo) that the cancellation had been confirmed by this Court under SC39/21.

The court a quo reiterated its earlier findings, namely, that, this Court had merely upheld the appellant's preliminary point to the effect that the court a quo should have proceeded not by application, but by action, as there were material disputes of fact which could not be resolved on the papers. It did not determine the merits of the matter, let alone confirm the appellant's cancellation of the contract.

The court a quo proceeded to consider the clauses of the contract which the respondent alleged had been breached.

Clause 5 provided that the contract would commence in full force when the conditions listed in paragraphs (a) to (i) were satisfied. These conditions precedent were to be satisfied within a period of 24 months after signature of the contract.

It was common cause that this period would expire on 23 October 2017.

The appellant could, at its sole discretion, on or at any time prior to that date, elect to extend the conditions precedent satisfaction period by a further 6 months by giving notice to the respondent.

More importantly, clause 5 of the contract provided as follows:

“If the conditions precedent are not satisfied on or before the expiry of the CP satisfaction period (as may have been extended), either party may elect to terminate the contract by notice to the other provided that if a party is causing a delay to the satisfaction of any of the conditions precedent, as at the date on which it seeks to terminate, such party shall not be entitled to exercise such right of termination while such cause of delay subsists.”

The court a quo noted the implications of the above provisions, particularly with regards the right of termination.

Clause 5 of the contract also provided for the waiver of conditions precedent as follows:

“Each party shall use its reasonable endeavours to ensure the satisfaction of the conditions precedent set out above, provided that:

(a) The employer may waive the contractor conditions precedent and such waived contractor condition(s) precedent will be deemed satisfied for the purposes of this Agreement;

(b) The contractor may waive the employer conditions precedent and such waived employer conditions precedent will be deemed satisfied for the purposes of this Agreement; and

(c) Except where a party has failed to use its Reasonable Endeavours to ensure the satisfaction of such conditions precedent, neither party shall be liable in any damages to the other in respect of any failure to satisfy any of its conditions precedent.”

The court a quo analysed and took note of these provisions.

Of significance to the status of the contract, the parties signed Addendum 1 to the contract. The court a quo noted, that, in paragraph 2 of the preamble to the Addendum 1, the parties expressed their wish “to amend the contract through this addendum.”

More importantly, clause 4 of the Addendum provided that “the parties agree and acknowledge, that, with effect from the effective date of this Addendum, that the contract shall be amended in accordance with this Addendum and that the provisions of the contract, except as amended by this Addendum, will remain in full force and effect.”

The court a quo concluded, that, the Addendum amended the contract and that the two documents must be read together.

The court a quo analysed the nature and scope of the amendments to the original contract brought about by the provisions of Addendum 1. It observed as follows:

At the time that the parties signed the Addendum, on 21 September 2017, they were aware that, in terms of the original contract, the period during which the conditions precedent were to be fulfilled was to lapse on 23 October 2017, a month after the date of signature of the Addendum.

However, the addendum gave lead times of the various pre-commencement works well beyond 23 October 2017.

In other words, the new lead times exceeded the effective date of 23 October 2017, when all conditions precedent should have been met, and, hopefully, the main works would have commenced.

From the above facts, the court a quo concluded, that, by their conduct, the parties waived not only the commencement date of the contract, but, by the same token, the date of the accomplishment of the conditions precedent upon which the commencement date was predicated.

It was for this reason that the court a quo held, that, it would defy logic for the appellant to insist on the termination of the contract on the grounds that the respondent had failed to satisfy the conditions precedent when, only a month before the expiry date, the parties had agreed to certain contractual obligations that further tied them.

The court a quo concluded, in the circumstances, that, the conditions precedent satisfying period did not lapse on 23 October 2017 as submitted by the appellant.

The parties must be regarded as having waived their right to enforce that date as previously provided in the original contract before the Addendum 1 was signed, amending it.

The parties had set their eyes beyond 23 October 2017 concluded the court a quo.

Indeed, the appellant had written to the respondent, on 29 November 2017, purporting to extend the conditions precedent satisfying period by a further six months in terms of clause 5 of the main contract.

The court a quo noted that such correspondence confirmed that the appellant did not regard that this period ended on 23 October 2017, contrary to its assertions.

Secondly, the correspondence wrongly ignored the provisions of the Addendum 1, amending the contract thus disregarding the effective date, of 23 October 2017, the date originally set for the expiry of that period.

Thirdly, in terms of section 5 of the original contract, such election by the appellant, to extend such a period by a further six (6) months, was to be done in terms of clause 6 of the contract, which provides that the contract may only be amended by a written document duly executed by the parties.

In this case, the appellant acted unilaterally, there being no evidence of the parties agreement to such an amendment.

Further, any such election could only be effected on or before 23 October 2017. In casu, the appellant's election came on 29 November 2017 - well out of time.

The court a quo also noted, that, in terms of clause 5(i) of the contract, if the conditions precedent were not satisfied within twenty-four (24) months from the date of signature of the contract, the parties were to meet and review progress towards the satisfaction of those conditions.

Thus, the court a quo found that the election to extend the satisfaction period by a further six (6) months could only be exercised after the parties had reviewed their progress towards the satisfaction of those conditions precedent.

No such meeting was proved to have taken place, and, accordingly, no valid election to extend the period could have been exercised.

For these reasons, the court a quo found that the purported extension of the conditions precedent satisfying period, by the appellant, was inconsistent with the provisions of the contract, and, consequently, null and void.

Accordingly, the court a quo ruled that the contract remained valid and extant.

Having determined that the contract was not terminated and remained extant, the court a quo considered the relief sought by the respondent, namely, whether there was fictional fulfilment of the contract, and, if so, whether it was appropriate to grant the remedy of specific performance.

It observed, that, the doctrine of fictional fulfilment was defined in case law. It relied on the definition in MacDuff & Company Limited v Johannesburg Consolidated Investments Company Limited 1924 AD 573 where the court stated as follows:

“I am therefore of the opinion, that, in our law, a condition is deemed to have been fulfilled as against a person who would, subject to its fulfilment, be bound by an obligation, and who had designedly prevented its fulfilment, unless the nature of the contract, or the circumstances, show an absence of dolus on his part.”

RH CHRISTIE in “Business Law in Zimbabwe”…, explains that dolus, in this context, does not allude to fraud or dishonesty, but, a deliberate intention to prevent the fulfilment of the condition, no matter how laudable the motive.

Based on both the documentary and viva voce evidence before it, the court a quo found that the appellant purposefully prevented, or frustrated, the fulfilment of the condition precedent pertaining to the signing of the financing agreements.

The court a quo also found the appellant's conduct to have been contrary to clause 5(i) of the contract, which required each party to use its “reasonable endeavours” to ensure the satisfaction of the conditions precedent.

The court a quo noted, that, the right to terminate the contract in terms of clause 5 was not absolute because the party responsible for frustrating the fulfilment of any of the conditions precedent was estopped from seeking the termination of the contract.

For that reason, having found that the appellant frustrated the fulfilment of the financing arrangements, the court a quo ruled that the appellant was precluded from asserting the right to terminate the contract on the grounds that the condition precedent concerned had not been met.

It was in that context that the court a quo held, that, the conditions precedent pertaining the financial arrangements had been fictionally fulfilled.

In determining whether it could grant the relief of specific performance, as sought by the respondent, or, the alternative relief of damages, the court a quo relied, inter alia, on the decision in Grandwell Holdings (Pvt) Ltd v Zimbabwe Mining Development Corporation & 3 Ors SC05-20 where this Court had this to say:

“However, the right to claim specific performance is predicated on the concept that the party claiming it must first show that he or she has performed all his or her obligations under the contract or is ready, willing, and able to perform his or her side of the bargain. Even then, the court has a discretion, which should be exercised judicially, to grant or refuse a decree of specific performance. It follows, therefore, that, the court's discretion should not be exercised arbitrarily or capriciously.”

The court a quo also relied on the case of Minister of Public Construction and National Housing v Zescon (Pvt) Ltd 1989 (2) ZLR 311 (S) where…, this Court stated as follows:

“The law is clear. This is a remedy to which a party is entitled as of right. It cannot be withheld arbitrarily or capriciously.”

The court a quo noted, that, in exercising its discretion to grant an order for specific performance, it must look at the circumstances of this case, and, on that basis, map the way forward.

It observed, that, the appellant had not placed before it any evidence to show the measures it took in order to achieve financial closure. In other words, nothing had been put forward to show that specific performance was no longer achievable.

It noted, that, both parties had accepted that the question of funding was central to the implementation of the project.

The court a quo rejected the submission by the appellant, that, the project was no longer viable and that it would take years to complete. It referred to clause 1.1.3.3 of the contract which gave the time of completion to be 540 days.

It noted, that, it had ruled that the contract was still valid and not terminated, that Addendum 1 had amended the main contract and extended the conditions precedent satisfying period beyond the contemplated date. It further noted that clauses 5(ii) and 6 oblige the parties to meet and review progress on the project and effect such appropriate measures and amendments as may from time to time be required.

For that reason, the court a quo was of the view, that, any challenges arising from the effect of the changes to the currency regime can be similarly resolved by the parties in terms of clause 5(i) and clause 6.

In short, the court a quo dismissed the appellant's submissions against the grant of specific performance.

The court a quo noted, that, at some point, the parties could have agreed to implement the project in phases and that the respondent had obtained funds for the implementation of the initial phase. That position was captured in the draft Amended Restated Contract, which the parties are yet to sign.

It concluded its observations as follows:

“The point is that the question of the unavailability of funding is clearly not an excuse going by the evidence that was placed before the court.”

It was for these reasons that the court a quo ordered specific performance.