Variation of Contracts re: Approach and Resolution of Contractual Lacunas

HH38-10 : LUCIA MUNYANYI vs LIMINARY INVESTMENTS AND ISRAEL GUMUNYU N.O.
Ruled By: MAKARAU JP

While not disputing that the Agreement of Sale stipulated that occupation would be given upon transfer, the first respondent contended that this clause was never implemented as the applicant had waived her right to enforce this provision by granting the first respondent occupation on an earlier date, and before the full purchase price had been ...

It is instructive, in my view, at this stage, to set out in full the applicant's averments as to how and why she parted with possession of the property. This is what she said in paragraph 12 of her founding affidavit -

“In good faith, I allowed 1^st respondent to take occupation of the property prior to full settlement of the purchase price on the understanding that the late Dr. Mushonga would pay the outstanding amount in terms of the agreement of sale by 30 June 2009. This indulgence was in no way a waiver of my rights to possess the property, which right continues to subsist as long as final payment of US$63,000= has not been paid.”

The issue that arises in this application is, in my view, simple. It is whether the applicant is bound by her act “in good faith” of parting with possession of the property and allowing the first respondent to take occupation thereof prior to and pending transfer.

It is quite clear to me that she is.

She is bound, not because she waived any rights to retain possession of the property pending transfer as contended by the first respondent, but because she agreed to a variation of the term of the Agreement regulating occupation to her prejudice.

Generally speaking, the law does not restrict the parties' power to vary their own contract. In keeping with the notion of freedom of contract, the parties are at liberty to change their minds as many times at it suits them – as long as at each time that they do so they are acting in concert and their minds meet.

The law will only restrict the parties' power to vary their own contract where the parties themselves have, in the contract, restricted their own power to so by inserting a non-variation clause.

Typically, a non variation clause provides that no subsequent agreement between the parties shall be valid and binding as between the parties unless it is reduced to writing and signed by both parties.

I note that the parties before me did not seek to protect themselves against variations to the terms of the Agreement by inserting a non-variation clause in the Agreement.

The only issue that arises is whether the parties' minds met as regards the variation.

SC13-09 : CALISTO CHIRENJE vs VENDFIN INVESTMENTS (PRIVATE) LIMITED AND TWO OTHERS
Ruled By: CHIDYAUSIKU CJ, SANDURA JA and MALABA JA

The express language of the Agreement itself confers on the contracting parties the unfettered power to amend the Agreement in the manner prescribed or provided for in the Agreement. Amendments to the Agreement can only be impugned on the basis of lack of compliance with the terms of the Agreement. Amendments in accordance with ...

HH27-09 : ZIMRE PROPERTY INVESTMENTS LI MITED vs JOANDRISA ANIMAL FEEDS (PVT) LTD
Ruled By: UCHENA J

Clause 40.2 provides as follows-; “40.2 This agreement constitutes the whole of the agreement between the parties and no variations or collateral agreements shall be of any force or effect unless and until recorded in writing in a document or series of letters signed by the parties.” This means any variation or alteration of the terms of the ...

Appealed
HH58-10 : DRAWING SERVICES (PVT) LTD vs BETTY KANYUCHI
Ruled By: BERE J

In cross-examination, John Chagaresango was directed to specific clauses of the agreement which were apparently not complied with by the defendant, and all John Chagaresango could do was to repeat that this agreement was not based on what the defendant and himself and others (as witnesses) had signed for but on other verbal assurances by ...

HH92-09 : SUPA PLANT INVESTMENTS (PVT) LTD vs EDGAR CHIDAVAENZI
Ruled By: MAKARAU JP

The facts giving rise to this application are largely common cause. They are as follows:

The applicant is in the farming business, operating a farm in Chakari. In October 2006, it set out to acquire a centre pivot irrigation system for its farm. Its Managing Director, duly authorized to act on behalf of the applicant, approached one Douglas Chihuri (“Chihuri”) who was selling a center pivot system on behalf of the respondent.

An agreement of sale was concluded between the plaintiff and Douglas Chihuri, acting for his principal, regarding a 140HA center pivot system belonging to the respondent.

A purchase price in the sum of $12,000,000 and installation charges of $3,000,000 were agreed upon.

Pursuant to the agreement, an invoice was made out to the applicant giving the total amount payable as $15 million.

It was made clear to Douglas Chihuri that payment would be made through the African Banking Corporation and would take a few weeks to be processed.

A month later, payment was effected in the agreed sum. This was made in favour of Chartered Enterprises, Douglas Chihuri's trading mantle.

A week after payment had been made, the applicant met with the respondent to discuss the details of the delivery of the centre pivot. Douglas Chihuri was in attendance. At the meeting, the respondent unilaterally increased the purchase price of the centre pivot. Instead of holding the respondent to the agreed price, the applicant agreed to pay an additional $5million and executed an acknowledgement of debt to this effect.

The seller also appended his signature to the acknowledgement. So did Douglas Chihuri.

Payment of the $15 million was then made to the respondent according to his instructions. Still acting as the seller's agent, Douglas Chihuri agreed to have the centre pivot delivered to the applicant.

The respondent did not deliver the centre pivot, prompting the applicant to bring this application seeking an order compelling the respondent to deliver a 140HA center pivot to it.

In opposing the application, the respondent denies knowledge of what transpired between the applicant and Douglas Chihuri, but admits that he was, at that time, selling two centre pivots, the details of which he gave to Douglas Chihuri. He further confirmed, that, in time, Douglas Chihuri advised him that he had secured a buyer for one of the centre pivots. He also confirmed that he received the sum of $14 million dollars for the centre pivot that Douglas Chihuri had sold to the applicant on his behalf and that a balance in the sum of $5 million would be paid in due course.

It was also suggested to him that a further $15 million would be paid for the same pivot after the applicant had sold his beasts or that he could collect the beasts himself as further payment for the sold pivot. He however opted for a cash payment. He did not agree to the delivery of the pivot in the absence of full payment and did not deliver the center pivot because he did not receive the full purchase price of $35 million.

At the hearing of the application, it emerged that the respondent had sold the centre pivot, the subject of this dispute, after being served with this application but before the matter was determined.

This emerged from supplementary affidavits filed by both parties days before the hearing and which were filed with my leave. I granted leave to the parties to file the supplementary affidavits as, in my view, they air the full dispute between the parties and bring out the real issue for determination in this matter.

In his supplementary affidavit, the respondent deposed, that, after the filing of the above application, a director of the applicant caused his arrest on allegations of fraud. It was alleged, in the criminal proceedings, that the respondent had fraudulently misrepresented to the said director that the centre pivot was available for sale when he knew that it was not as it was to be sold to a third party. The respondent was duly prosecuted but was acquitted at the close of the trial.

In it own supplementary affidavit, the applicant admitted the facts given in the respondent's additional affidavit but urged me to find the contents of the affidavit inadmissible on the basis of irrelevancy.

Before proceeding further, I will dispose of the admissibility of the contents of the affidavit.

In my view, once a court grants leave to a party to file an additional affidavit, that grant of leave necessarily implies that the contents of the affidavit are admissible. Supplementary affidavits should only be filed if their contents are relevant to the dispute before the court.

It is a general rule of evidence that irrelevant evidence is inadmissible.

Section 26 of the Civil Evidence Act [Chapter 8.01] provides that evidence that is irrelevant or immaterial and cannot lead to the proving or disproving of any point in issue shall not be admissible.

This section is simply a codification of the position at common law which holds that all facts relevant to the issue in legal proceedings may be proved and where a legally recognized exception to this rule is not invoked, relevancy remains the fundamental rule governing the admissibility of evidence.

As indicated above, this is the rule that a court summarily employs before granting leave to file additional affidavits in motion proceedings.

In my view, the rule against admissibility of irrelevant evidence is rooted more in common sense than in a legal principle. It is a common sense approach by the court to govern that which it will accept or reject lest it be inundated by evidence of all facts surrounding a dispute and trials will take longer than is necessary to resolve if the parties were left at liberty to drag in all they wish or think is necessary.

It however remains clear that the rule against irrelevant evidence is against evidence of facts that have little to do with the issue in dispute.

In casu, I was of the view that the disposal of the centre pivot pending litigation is the issue in dispute and thus facts tending to prove the disposal cannot be irrelevant. Further, and in any event, the facts sought to be rendered inadmissible by the applicant are common cause and thus no party will be prejudiced by its admission into evidence.

It is on the basis of the above that I ruled admissible the contents of the two supplementary affidavits.

I now turn to consider the merits of the application.

The issues that fall for determination in this application are mainly two in my view:

(i) Firstly, I have to determine whether or not there was an agreement between the applicant and the respondent for the sale of the centre pivot for $20 million.

The respondent has sought to argue that the agreed purchase price was $35 million. He deposed in his opposing affidavit that after the applicant had paid the first $15 million and had promised a further $5 million, by way of the acknowledgement of debt; the parties agreed to a further payment of $15 million after the applicant had sold its beasts.

Relying on these averments by the respondent, counsel for the respondent argued that the correct purchase price of the center pivot cannot, in the circumstances, be ascertained without the leading of oral evidence and thus the application should fail on this basis.

It is common cause that Douglas Chihuri, acting as the agent of the respondent, agreed to sell the centre pivot to the applicant for $15 million. The parties agreed, later, to vary the purchase price to $20 million, when, after making payment of the initial purchase price, the applicant promised, by way of an acknowledgement of debt, to pay an additional $5 million.

The agency of Douglas Chihuri to represent the respondent, whilst challenged in the opposing affidavit, was not advanced in argument.

In my view, counsel for the respondent was well advised not to advance the argument in view of the affidavit by Douglas Chihuri and the fact that the respondent accepted the sum of $15 million paid by the applicant through Chihuri.

By his own conduct, of accepting the payment, the respondent put paid to whatever argument he may have had against the agency of Douglas Chihuri. By this conduct, he gave out and confirmed that Douglas Chihuri was indeed selling the centre pivot on his behalf and is thus bound not only by what Douglas Chihuri did but by what he also personally did.

If there was any doubt about the agency of Douglas Chihuri, the respondent personally removed that doubt by accepting the part payment of the purchase price and agreeing with the applicant that the balance now stood at $5 million, thereby putting beyond doubt that the purchase price was $20 million.

In my view, he is thus condemned by his own actions as revealed by the papers filed of record.

I am aware that the respondent has repeatedly and vehemently denied, in his affidavit, that the purchase price of the centre pivot was $20 million.

It is my view that it is not the number of times a denial is made or the vehemence with which a denial is made that will create a conflict of fact such as was referred to by McNALLY J…, in Masukusa v National Foods Ltd and Another 1983 (1) ZLR 232 (H) and in all the other cases that have followed.

A material dispute of fact arises when material facts alleged by the applicant are disputed and traversed by the respondent in such a manner as to leave the court with no ready answer to the dispute between the parties in the absence of further evidence.

In casu, I believe the papers filed of record present ready answers to the questions posed by the respondent. He argues that he wanted more than the $20 million that the applicant contends was the agreed purchase price.

(a) Firstly, the papers filed of record clearly show that the respondent's agent negotiated and agreed to the sum of $20 million.

At law, the actions of the agent bind the principal - even if the agent is breaching his own contract of agency with the principal.

There is thus no need to lead evidence to show what the terms of the agency contract were regarding the purchase price he had to seek. The respondent, through the agency of Douglas Chihuri, agreed to $20 million that the applicant has paid in full.

(b) Secondly, it is common cause that the respondent received the sum of $15 million dollars through his agent, and, thereafter, acknowledged, in writing, that the balance due was $5 million.

He did not, at that stage, query the fact that the balance was only $5 million instead of $20 million according to his assertions.

By appending his signature to the acknowledgement of debt, which clearly indicates the balance as $5million, he gave out to the applicant that he agreed with the applicant in this regard.

Thus, in my view, on the basis of the papers, it is clear that the total purchase price agreed to between parties was in the sum of $20 million which was paid in full.

I find nothing on the papers to indicate that the parties may have agreed to a price other than $20 million.

The only suggestion that this may be so is the averment by the respondent, in his opposing affidavit, to this effect. It is not backed up by any other evidence. It is contradicted by the facts that are common cause and is thus clearly simply meant to introduce an illusory conflict where none exists.

Aligned to the alleged conflict of fact on the agreed purchase price is whether the respondent agreed to deliver the centre pivot before payment of the purchase price in full.

Again, counsel for the respondent urged me to find that I could not resolve this dispute in the absence of oral evidence.

I am afraid I cannot agree.

Having found that the agreed purchase price was $20 million which was paid in full, it matters not, in my view, if the respondent agreed to deliver the centre pivot as delivery is a legal consequence following the conclusion of a sale agreement. It cannot be the subject of a separate agreement between the parties.

It is therefore my finding, that, there is no material conflict of fact in this application.

The parties concluded an agreement of sale of the centre pivot for the sum of $20 million which has since been paid in full. The respondent is bound by the law of sale to deliver the centre pivot to the applicant.

HH117-09 : MICHAEL KATEKETA vs ONE WORLD GALLERIES (PVT) LTD and A MPOPOMA
Ruled By: MAKARAU JP

On 30 October 2008, the plaintiff issued summons against the defendants claiming delivery of certain specified railway sleeper furniture. In his declaration, the plaintiff alleged that he and the defendants entered into an agreement in December 2007, in terms of which the defendants agreed to manufacture for him certain specified items of furniture. He further alleged that ...

On 30 October 2008, the plaintiff issued summons against the defendants claiming delivery of certain specified railway sleeper furniture.

In his declaration, the plaintiff alleged that he and the defendants entered into an agreement in December 2007, in terms of which the defendants agreed to manufacture for him certain specified items of furniture. He further alleged that whilst he had performed his side of the bargain, by paying the agreed price, the defendants, in breach of the agreement, had failed to deliver all the items contracted for leaving the items forming the subject matter of this suit outstanding. In particular, the plaintiff averred that, in terms of the agreement between the parties, the defendants would manufacture and deliver a 7 piece dinning room suite, a side serve, a 3 piece coffee table set, a 2 piece side board, a 3 piece room divider and a wall mirror. In breach of the agreement, the defendants failed to deliver the side board, the room divider and the wall mirror.

The suit was defended.

In its plea, the first defendant averred that the plaintiff made inquiries about the cost of items he required and was given a quotation which was valid for a limited time. He then made payment on the quotation outside the lifetime of the quotation, and without first making reference to the defendant, with the result that the amount he paid was only sufficient for the manufacture of the items that were delivered to him.

At the pre-trial conference of the matter, the parties agreed that the issues for determination at the trial of the matter were;

(a) Whether the plaintiff is owed the outstanding items of furniture; and

(b) Whether the parties varied the agreement between them to the effect that the defendant would only manufacture the items that it delivered.

The matter was thus set down for trial before me.

At the trial, the plaintiff gave evidence. His evidence was as follows. He is a businessman. In December 2007, he visited the first defendant's factory. He was taken around the place and was shown other items that the defendant had manufactured. He requested the manager to tailor-make the items that he required. To that end, he arranged for the manager to visit his flat and take some measurements.

This was duly done.

The manager left him with catalogues from which he and his wife could select what they thought was suitable. He was given a quotation upon which he successfully negotiated a discount. He was also given a Bank account into which he was to deposit the amount reflected on the quotation. He told the defendants that he was going to dispose of some shares and that this would take some time. The second defendant assured him that this would not pose any problems. As soon as his shares were sold, he deposited the amount reflected on the quotation into the defendant's Bank account. He paid the deposit a week or two after the date appearing on the quotation. When his shares were sold, he told the defendant that he was going to make the transfer and wanted to know whether there had been any changes to the prices. The second defendant assured him that there had been no changes and there would be no problem with his deposit.

Apart from the quotation, nothing else was reduced to writing as between the parties. The witness was shown a copy of the quotation which he identified. Same was adduced into evidence.

The plaintiff proceeded to testify that, after some arguments, the defendant delivered part of the ordered furniture leaving the items in dispute outstanding. He demanded for the delivery of the remaining items, firstly, by word of mouth and then by a letter of demand.

In conclusion, the plaintiff testified that at not time did he discuss the issue of revisiting the pricing of the order as suggested by the defendants. He insisted that, after paying the amount reflected on the quotation, he was entitled to delivery of the outstanding items even if he paid outside the lifetime of the quotation as he had advised the defendants that he needed time to sell his shares.

The witness impressed me as an articulate and confident man. He was very clear as to what the defendants were obliged to do under the contract and was keen to see them held strictly to the written terms of the contract, an attitude that evoked in me memories of passages in the Shakespearian play; Merchant of Venice.

The witness was wordy in his responses to questions put to him under cross-examination and would at all times maintain his stance that he performed his side of the bargain by paying the contract price in full.

In my view, the factual issue that falls for determination in this suit is whether the parties varied the written terms of the quotation to allow the plaintiff to make payment of the quoted price outside the lifetime of the quotation.

On this point, the plaintiff did not testify with his characteristic clarity and confidence. His evidence, as detailed above, was to the effect that that he spoke to the second defendant when his shares had been sold and asked him if there were any changes to the quotation. He was told that there were none.

I did not believe the plaintiff in this regard.

Firstly, I did not believe him when he testified that he telephoned the second defendant as he alleges. He did not give the date when he actually made the payment. He was very vague about it saying it was between 7-14 days after the date of the quotation. The plaintiff is not a vague man. He is very precise though not always concise. He knows the date when he made the payment. He simply chose not to tell me the date. I surmise that he chose not to disclose the date because he thought it would detract from his case by corroborating the evidence of the defendants that he made his payment some three to four weeks after the quotation had lapsed.

Secondly, it is highly unlikely that the second defendant, when and if telephoned, would have advised the plaintiff that there were no changes in the price especially in the environment during which the contract was concluded. The defendants testified that their quotations were now valid for 3 days only as prices were constantly changing. It is therefore highly improbable that, after two or three weeks, prices on the quotation had remained static.

After testifying, the plaintiff called one Custon Muchepa (“Custon”). Custon used to work for the defendants and was the first defendant's manager at the time. He is the one who prepared and issued the plaintiff with the quotation. On a date he did not give, the plaintiff telephoned him to advise that he had made payment on the quotation. He then received a call from the workshop requesting him to prepare a bill of materials for work on the plaintiff's order to begin. He confirmed that part of the plaintiff's order was delivered and the balance was promised. The balance of the order was never delivered. Out of frustration and other misunderstandings, he left the first defendant's employment before delivery of the remaining items had been made.

On the material dispute of fact between the parties, Custon Muchepa did not have any personal knowledge as to whether the parties agreed to vary the lifetime or validity period of the quotation. He was not present when the plaintiff allegedly telephoned the second defendant to establish whether there were any changes to the prices before he, the plaintiff, made payment. He was simply advised by both that payment had been made.

The witness gave his evidence generally well. He however could not testify on the material fact in dispute in this matter as he was not present when the two allegedly discussed the issue. Further, whilst he could give quotations, he was not in charge of the finance department and would not know why work on the plaintiff's items was stopped.

In my view, the evidence of this witness, did not take the plaintiff's case further than where the plaintiff himself left it.

After the evidence of this witness, the plaintiff closed his case.

The second defendant gave evidence on his own behalf and on behalf of the first defendant. His evidence was as follows;

He is a Director of the first defendant. He recalls that the plaintiff came to the defendant's workshop where he was given a quotation. The quotation was supposed to be valid for three days. The plaintiff was also given the first defendant's account number for the purposes of making payment. Prior to the parties concluding the transaction, the plaintiff informed him that he had funds that were maturing sometime which he would use to fund the contract. He then left his manager to prepare the quotation. After three weeks, he received a report from his manager that the plaintiff had made payment, by direct deposit, into the first defendant's account. He checked the account and confirmed the deposit. He then telephoned the plaintiff and confirmed the deposit. He however advised the plaintiff that the deposit was now insufficient to cover the order. The plaintiff, in turn, advised him that he had no further funds and that the parties should re-negotiate. The first defendant started manufacturing the items of furniture that the parties had agreed were equivalent to the deposit. When the plaintiff was advised of this, he said the parties should discuss the issue further. The defendants delivered the items that were equivalent to the deposit. After delivery, he telephoned the plaintiff for a meeting. The plaintiff insisted that he had paid for the entire order and demanded delivery of the remaining items.

The witness gave his evidence well. He did not seek to exaggerate. He was forthright in his responses to questions put to him under cross-examination. He impressed me a being honest and truthful.

I particularly believed him when he testified that he only received the report that payment had been made from Custon Muchepa, meaning that he did not speak to the plaintiff before the plaintiff made the deposit. He thus did not agree to extend the validity of the quotation before payment was made. His evidence in this regard gains corroboration from the testimony of Ronald Mpopoma who testified after him.

Ronald Mpopoma's evidence was to the following effect;

He is son to the last witness and works for the first defendant as Clerk. He confirmed that ordinarily, the defendants were giving quotations valid for only three days. He thus expected the plaintiff to make a payment after three days of obtaining the quotation. Instead, he received a report, after three weeks, that the plaintiff had made payment on the quotation. The report was made to him by Custon Muchepa. He then telephoned the plaintiff to come and discuss the issue. At the meeting, the plaintiff was advised that his deposit was insufficient to meet his order. It is at that stage that the parties agreed that the defendants would only manufacture those items that were equivalent to the amount of the deposit. The parties were to further agree on the remaining items. On that understanding, the witness gave the word for work to commence on the plaintiff's order.

Regarding Custon Muchepa, the witness testified that he fired him after he realized that there was an unhealthy relationship between him and the plaintiff and that the two may have diverted the defendants' jobs to the competition.

In my view, the witness gave evidence that was largely common cause save for the information on how Custon Muchepa left employment. Regarding the material issue in dispute, he was clear that the plaintiff was made aware of the insufficiency of his deposit when such was made. In this regard, he corroborates the evidence of the second defendant in a material respect.

After this witness, the defendants closed their case.

In his closing submissions, counsel for the plaintiff correctly submitted, in my view, that the first issue I have to determine is whether or not the parties had a contract, and, if so, what the terms of the contract were.

In answer to the questions posed by the first issue, he submitted that the parties had a verbal contract for the manufacture of the furniture items specified in the quotation and for the price stipulated in the quotation.

I am unable to agree that the parties unconditionally entered into a contract for the manufacture of the furniture items listed in the quotation. In my view, the quotation that was issued to the plaintiff by the defendants was an invitation to treat. It was the offer to do business with the plaintiff. The terms of the offer were endorsed on the face of the quotation.

It may be pertinent, at this stage, to observe that while the defendants testified that at the time they were issuing quotations valid for only three days, in casu, the quotation clearly stated on its face that it would hold for a week. Thus, notwithstanding their policy in this regard, they were bound by the period given on the face of the quotation.

In my view, the plaintiff could have validly made payment within one week of the quotation and such payment would have bound the defendants.

The plaintiff however did not make payment within one week. It is not clear when he made payment. As observed above, he has chosen not to take the court into his confidence to reveal the actual date on which he made payment. He has given the period as between 7 and 14 days. The defendants have given it as between three and four weeks. I am none the wiser as to when payment was made.

The onus lies squarely with the plaintiff to show that payment was made in terms of the offer made to him. The confusion as to when he accepted the offer can only be fatal to his claim and not to the defence.

The plaintiff has approached the court ex contractu. He alleges that he had a binding contract with the defendants. He further alleges that while he performed his side of the bargain, the defendants are in breach and should be compelled to perform.

The foundation of any contact is agreement between the parties. To establish this agreement, one looks for an offer and the acceptance of that offer.

In casu, it is common cause that the quotation given to the plaintiff constitutes the offer that was made by the defendants.

It is the settled position in the law of contract that an offer can lapse through the effluxion of time. This means that after the time set in the offer for acceptance has expired, the offer is no longer open to acceptance for the birthing of a valid contract. The point was settled in Laws v Rutherford 1924 AD 261 and has held since. At 262, INNES CJ had this to say:

“Speaking generally, when the acceptance of an offer is conditioned to be made within a time limit or in a manner prescribed by the offeror, then the prescribed time limit and manner should be adhered to.”

In casu, the offer was valid for one week. The one week lapsed before the plaintiff had accepted it. His purported acceptance of the offer, after the one week, was of no force and effect.

Put differently and conversely, acceptance of an offer must always correspond to the offer. If it does not, it constitutes a counter offer and no valid contract is birthed on the original offer.

The plaintiff has not, like the appellant in Laws v Rutherford 1924 AD 261 pleaded that the defendants waived their rights to insist on payment within the week. He, instead, sought to argue that the defendants extended the time within which the offer could be accepted. I have found above that I do not believe his testimony in this regard. There was no such variation. His offer of the defendant's offer had to be within a week of the offer. It was not.

Further, he has not sought to argue that the defendants accepted his counter-offer to pay the price at his own time.

In the circumstances, it is my finding that the plaintiff has failed to establish the contract that he seeks to rely on for an order compelling the defendants to deliver the remaining items of furniture. Payment of the price on the quotation made when the offer was no longer open could not bring about an enforceable contract between the parties.

In the result, I make the following order:

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the defendants costs.

HH160-09 : SMART GONONDO vs ALICE MUTEPFA and PORTIA NYAMAROPA and CITY OF MUTARE (DIRECTOR OF HOUSING)
Ruled By: MAVANGIRA J

I wish to comment briefly on the alleged oral agreement between the applicant and the first respondent as claimed by the first respondent; she alleged that the applicant effectively sold the property back to her for $15,000,000 but that he frustrated her efforts to pay him the said amount. The applicant disputes that such an agreement ...

HH169-09 : GRAMARA (PRIVATE) LIMITED and COLIN CLOETE vs GOVERNMENT OF THE REPUBLIC OF ZIMBABWE and ATTORNEY-GENERAL OF ZIMBABWE and NORMAN KAPANGA (INTERVENER)
Ruled By: PATEL J

Article 39 of the Vienna Convention on the Law of Treaties (1969) states the general rule regarding the amendment of treaties, as follows:

“A treaty may be amended by agreement between the parties. The rules laid down in Part II apply to such an agreement except in so far as the treaty may otherwise provide.”

Part II of the Vienna Convention on the Law of Treaties (1969) regulates the conclusion and entry into force of treaties, and, by dint of Article 39, it also governs the conclusion and entry into force of treaty amendments. Article 11 prescribes the means of expressing consent to be bound by a treaty and provides that:

“The consent of a State to be bound by a treaty may be expressed by signature, exchange of instruments constituting a treaty, ratification, acceptance, approval or accession, or by any other means if so agreed.”

Article 24 of the Vienna Convention on the Law of Treaties (1969) governs the entry into force of treaties and, in its relevant portions, stipulates that:

“1. A treaty enters into force in such manner and upon such date as it may provide or as the negotiating States may agree.

2. Failing any such provision or agreement, a treaty enters into force as soon as consent to be bound by the treaty has been established for all the negotiating States.”

Taken together, these provisions of the Vienna Convention on the Law of Treaties (1969) illustrate the flexibility inherent in the conclusion and entry into force of treaties as well as amendments thereto.

In particular, Article 11 makes it clear that the consent of States to be bound by a treaty may be expressed by signature, exchange of instruments, ratification or accession, or by any other means if so agreed.

Thus, the States concerned are at liberty to agree on the conclusion of a treaty by means other than the traditionally accepted procedure of signature followed by ratification or accession.

It is therefore perfectly possible for a treaty, or an amendment of the treaty, to be adopted and enter into force for all the adopting States instantly, without further ratification or any other formality, if that is the means of adhesion agreed to by those States: see AUST: Modern Treaty Law and Practice (2000)…,.

HH55-10 : JEREMY STANDER vs NELTRA INVESTMENTS t/a DOUGLAS CAR SALES
Ruled By: BERE J

A brief resume of the broadly common facts in this case are as follows - The plaintiff is a citizen of Zimbabwe residing in this country, and was the registered owner of a Toyota Hiace bearing registration number AAZ 7054. The defendant is a company duly registered in accordance with the company laws of this country, ...

HH106-10 : COLLIN DUBE AND 129 OTHERS vs TUNGPAL INVESTMENTS (PVT) LTD and THE MESSENGER OF COURT, HARARE
Ruled By: BHUNU J

On 11 May 2010, the respondent's then lawyers, Manase Manase, wrote to the applicants' lawyer accepting payment in the in the amounts proposed by the applicants and considerately extending the due date of payment by a day from 10 May to 11 May 2010. The letter reads - “Dear Sir COLLIN DUBE AND ...

HH121-10 : POWER COACH EXPRESS (PVT) LIMITED vs MARTIN MILLERS AND ENGINEERS
Ruled By: BERE J

The defendant's representative sought to justify the non-compliance with the specifications, initially, on the basis that during manufacturing they had realised they had run out of 6mm steel plate in their stock. It was the defendant's evidence that having faced this challenge they approached Mr. Muzondiwa, an employee of Total Zimbabwe, who authorized them to ...

HH160-10 : TONDERAI HAMANDISHE and GAMUCHIRAI SANGARE vs MAFFACK PROPERTIES (PVT) LTD
Ruled By: MTSHIYA J

This is an opposed application wherein the applicant seeks the following relief: “1. The purported cancellation of the agreement of sale dated 17th October 2006 between the applicants and the respondents be and is hereby set aside. 2. The respondent be and is hereby ordered to forthwith transfer the undivided share in a certain piece of land situate in ...

This is an opposed application wherein the applicant seeks the following relief:

“1. The purported cancellation of the agreement of sale dated 17^th October 2006 between the applicants and the respondents be and is hereby set aside.

2. The respondent be and is hereby ordered to forthwith transfer the undivided share in a certain piece of land situate in the district of Salisbury being land share number 13 of Stand number 195 Monavale Cluster Homes, also known as subdivision A, portion of Mayfield Estate to the applicants upon respondent satisfying the minimum service requirements set out in its development permit.

3. The respondent shall bear costs of suit on a legal practitioner/client scale.”

It is common cause that on 17 October 2006 the parties entered into an Agreement of Sale. The respondent sold to the applicants its property known as an undivided share in a certain piece of land situate in district of Salisbury being land share number 13 of Stand number 195 Monavale Cluster Homes also known as Subdivision A, Portion of Meyfield Estate measuring 704 square metres (the property). The price for the property was $4,928,000= (old Zimbabwean currency) and the agreed mode of payment of the purchase price was:

“Deposit of $3,000,000= payable upon signing this agreement of sale of which an amount of $2,630,400= is payable to Bvekwa Legal Practice and an amount of $369,600= is payable to Maffack Properties representing 7.5% of the purchase price. The balance to be paid over 3 months in three (3) equal instalments. Any delays will attract an interest of 300% per annum.”

It is not in dispute that by 31 January 2007 the applicants had fully paid the agreed purchase price. However, on 27 February 2008 the respondent's legal practitioners addressed the following letter to the first applicant:

“WITHOUT PREJUDICE

Dear Sir/Madam

RE: PROPERTY: SHARE NO. 13 OF SUBDIVISION A, PORTION OF MAYFIELD ESTATE (MONAVALE CLUSTER HOMES): VARIATION OF AGREEMENT OF SALE

Our client has instructed us to communicate to you regarding the above issue as follows:

As you may be aware, the construction works at the Monavale Cluster Homes site has come to a halt. This has been caused by an order given by the Environmental Management Authority to stop the works pending the production of an Environmental Impact Assessment Report. This has since been complied with. However, in the interval, inflation has eroded the value of the amounts paid thus far. This has made it impossible for the further works to continue. Without the completion of the works, it is not possible for our client to transfer ownership of the property sold to you.

In these circumstance, our client makes the following without prejudice offer to you. It is that you enter into a variation of the agreement of sale entered into between yourselves and our client. In terms thereof, you would agree to an increase in the amount needed to complete the servicing works. This amount is in the sum of $36 billion dollars. This amount would be payable by the end of March 2008. In return, our client would begin a programme to complete servicing the property. This programme shall be completed within 90 days reckoned from the 1^st of April 2008.

The alternative to the above is the cancellation of the agreement of sale. You would be refunded 60% of the current market value of the property the subject of the agreement of sale, minus administrative expenses so far incurred e.g. agents commission and administration fees. The amount in question would be paid within a reasonable time of your acceptance of cancellation.

We have been requested to furnish you with up to 31^st of March 2008 to signify your election. This may be done by delivering, in writing, your response at our offices.

Should you fail to make an election or reject the above proposals, be advised that our client shall apply to court for an order of cancellation of the agreements entered into on the amount of the purchase price paid in the manner the court may deem fit.

We await your consideration.

Yours faithfully

___________________

Kawonde and Company”

On 1 July 2008, the applicants' legal practitioners responded to the above letter as follows:-

“Dear Sir

RE: PROPERTY: SHARE NO.13 SUBDIVISION & PORTION OF MAYFIELD ESTATE (OUR CLIENT MR & MRS HAMANDISHE)

The above two are our clients, who, from instructions, purchased the above property from yours. We have been shown the agreement of sale between the concerned parties together with your minute to our clients dated 27^th February 2008.

In the context of your said minute we felt that there may be need for us to get some clarifications viz issues raised therein.

(a) Is it your client's attitude that the delay in the completion of the project was occasioned by ours, and, if so, how?

(b) At what stage of development has the project reached and what are the minimum stages required before the properties may be transferred to the individual purchasers.

(c) On what grounds does your client believe that in the event of cancellation of the agreement ours can only get 60% of the paid purchase price?

(d) What guarantees are there that in the event of our client paying and the others refusing to do so, the project will still be completed within ninety days as suggested in your minute?

You will possibly appreciate the assistive extent of your client's responses to the above, and, more importantly, how such responses could enable us to cut a seemingly long story short.

We kindly wait to hear from you by return of post.

Yours faithfully

___________________

Mufadza and Associates”

On 8 July 2008, the respondents' legal practitioners again wrote to the applicants' legal practitioners in the following terms:-

“Dear Sir or Madam

RE: OUR CLIENT MAFFACK PROPERTIES (PVT) LTD: YOUR CLIENT MR AND MRS HAMANDISHE: SHARE NO. 13 OF SUBDIVISION 195 A, PORTION OF MAYFIELD ESTATE

We thank you for your letter of 1 July 2008.

We have been instructed to reply as follows:

The delay in the completion of the development was not occasioned by your client. At the time the project stalled, it was 60% complete. Our client believes that it is just and equitable that your client gets 60%, as the amount reflects the extent of the improvement of the property as of now.

Regrettably, your client declined to accept the offer by ours. Accordingly, the agreement is hereby cancelled. Our client offers to pay to yours the full amount he paid, adjusted for inflation using the CPI as at the date of payment, in full and final settlement of all its obligations in respect of the above transaction.

Yours faithfully

__________________

Kawonde & Company”

It is the attitude of the respondent, as emerges from correspondence quoted above, that caused the applicants to file this application on 30 July 2008 seeking the relief indicated on the first page of this judgment.

At the hearing of this matter the applicants abandoned clause 2 of their relief and persisted that they wanted the court to determine the status of the Agreement of Sale.

Counsel for the applicants submitted that the applicants had complied with their obligations arising out of the Agreement of Sale, and, as such, there was no basis for the agreement to be cancelled. He correctly submitted that the attempted variation of the Agreement of Sale did not comply with clause 12 thereof which provides as follows:

“12. WHOLE AGREEMENTS

This agreement constitutes the entire contract between the parties hereto otherwise than as may be recorded herein and:-

13.1 No warranty, representation, promise or undertaking has been given or made by either party to the other except as recorded in this Agreement;

13.2 There are no conditions precedents suspending the operation of this Agreement which is not referred to herein;

13.3 No variation in this Agreement shall be valid unless reduced to writing and signed by or on behalf of the parties hereto.”…,.

He also said the parties had categorically stated what was covered by the purchase price through clause 14 which provides as follows:

“14. SPECIAL CONDITIONS

14.1 It is agreed that the amounts so paid shall be used for purposes of servicing the land, administrative expenses, professional fees and any other incidental expenses since the Stand is being sold off-plan. For this purpose, the Purchaser has agreed and authorized the release of the money to the seller.

14.2 The purchase price of Z$4,928,000= includes the cost of architectural and structural designs.

14.3 The Seller undertakes to complete servicing, that is, provision of sewer and water reticulation, drainage and surface water management system on or before December, 2006 or any other date thereafter agreed between the parties.”

All in all, counsel for the applicants submitted it was the respondent who was in breach of the agreement of sale. He said, whilst claiming impossibility of performance due to inflation, the respondent had not taken the route of seeking formal liquidation and thereby protecting the interests of people such as the applicants. He therefore urged the court to declare the purported cancellation of the agreement as null and void.

Counsel for the respondent submitted that the relief sought (ie declaring the cancellation of the agreement of sale null and void) would not assist the applicants in any way, and, as such the applicants should have simply withdrawn the application. He said the property in question was not registered in the respondent's name. That aspect would certainly stand in the way of specific performance (i.e. transfer of property to applicants). In any case, he argued in his heads of argument:

“It is common cause that the respondent had to comply with regulatory conditions after it had commenced infrastructural works in terms of the permit. It is undeniable that hyperinflation gripped Zimbabwe and intensified with each succeeding year. The phenomenon of top ups is now known from school fees to ordinary purchases of goods and services. So notorious has this become that the monetary authorities have, in certain cases, allowed settlement of obligations in some other currency, say US dollar.”

Relying on WILLIE & MILLIN's Mecantile Law SA 15ed, counsel for the respondent quoted from page 69 of the edition as follows:

“When a contract has become impossible of performance after it has been entered into the position is the same as if it had been impossible from the beginning.”

He therefore did not see merit in the relief sought by the applicants and called for the dismissal of the application.

The papers in casu clearly confirm that as at 31 January 2007 the applicants had satisfied clause 2 of the Agreement of Sale as read together with the mode of payment already spelt out on first the page of this judgment. Apart from unilaterally creating new obligations for the applicants, the respondent does not dispute that by 27 February 2008, when it sought to vary the Agreement of Sale, the applicants had long fully discharged their obligations under the said Agreement of Sale. The purported variation, without the consent of the applicants who already had complied with the contract, and without court confirmation, was, in my view, clearly in violation of clause 12 of the agreement. The respondent had no basis upon which to justify cancellation of the agreement of sale. The best that the respondent could have done was to seek a legal route for confirmation of its inability to perform due to an intervening impossibility.

In its letter of 27 February 2008, the respondent had said:-

“Should you fail to make an election or reject the above proposals, be advised that our client shall apply to court for an order of cancellation of the agreements entered into on the amount of the purchase price paid in the manner the court may deem fit.”

That was never done.

The position is simply that the respondent is in breach of the Agreement of Sale, and, as a way out, now seeks to unilaterally cancel the agreement citing inflation and intervening impossibility. To allow such a move to succeed would certainly destroy the sanctity of contractual relationships. The purported cancellation is, in my view, clearly intended to avoid specific performance. However, economic hardships cannot be used as automatic weapons to defeat contracts.

In a similar situation, in International Trading (Pvt) Ltd 1993 (1) ZLR 21 (H), the late ROBINSON J had this to say:

“I would wind up by saying that if the right of specific performance is to be shown to have real meaning to businessmen, then the loud and clear message to go out from the courts is 'businessmen beware.' If you fail to honour your contracts, then don't start crying, if, because of your failure, the other party comes to court and obtains an order compelling you to perform what you undertook to do under your contract. In other words, businessmen who wrongfully break their contracts must not think they can count on the courts, when the matter eventually comes before them, simply to make an award of damages in money, the value of which has probably fallen drastically compared to its value as the time of breach. Businessmen at fault will therefore, in the absence of good grounds showing why specific performance should not be decreed, find themselves ordered to perform their side of the bargain no matter how costly that may turn out to be for them…,.”

Admittedly, the above sentiments were echoed specifically in relation to the issue of specific performance. However, I am here quoting the same because the respondent's action (ie unilateral cancellation of the Agreement of Sale) is clearly intended to avoid specific performance. The applicant in casu seeks a declaration which is meant to save the Agreement of Sale. The applicants can only proceed to demand specific performance if the purported cancellation is declared null and void. That explains the applicants' position in abandoning clause 2 of the original relief sought.

I have, in this judgment, made a finding that the applicants complied with the terms of the agreement and were therefore not in breach, if anything the respondent was in breach of the agreement. The applicants are therefore saying there is no justification on the part of the respondent to run away from the agreement and that any variation of the agreement can only be effected in terms clause 12 of the Agreement of Sale. I am unable to fault the applicants' reasoning and therefore I find merit in their application. I therefore find it proper to grant the relief sought.

I accordingly order as follows:-

It is ordered that:

1. The purported cancellation of the Agreement of Sale dated 17 October 2006, between the applicants and the respondent, be and is hereby declared null and void; and

2. The respondent shall pay costs of suit.

HH132-10 : CABINET MACHINGAMBI and PATRICIA CHIMBALAMI and SIMBAI MANGENA and OTHERS vs DOUGLAS NYAUDE and D. MNETSI ENTERPRISES and REGISTRAR OF DEEDS
Ruled By: BHUNU J

The thirteen applicants are members of Printers Housing Co-operative Limited. It is common cause that sometime around 2005 they concluded individual standard contracts of sale with the first respondent, Douglas Nyaude, a registered Estate Agent practicing under the style of Graham and Douglas Real Estate Agent. The contracts were in respect of the sale of ...

HH227-10 : MIKE MAKOPE vs GEOFFREY DZUMBUNU and REGISTRAR OF DEEDS N.O. and MINISTER OF LOCAL GOVERNMENT
Ruled By: MAVANGIRA J

The only written agreement between the parties is exhibit 2..., which states in clause 1: “1. THE PURCHASE PRICE AND TERMS OF PAYMENT The property is sold by the Seller to the Purchaser for the sum of $6,500,000= (six million five hundred thousand dollars) to be paid as follows: (a) The purchaser pays cash in the sum of $6,500,000= (six ...

HH231-10 : AGRICULTURAL BANK OF ZIMBABWE LTD t/a AGRIBANK vs NICKSTATE INVESTMENTS (PVT) LTD and RICHARD MAKWARA and PLAXEDES MAKWARA
Ruled By: GOWORA J

Although accepting that the written contract was never varied in writing, it is suggested by the defendants that the parties communicated through correspondence which clearly established that there was an understanding between the parties that the defendants needed to source funds through the Reserve Bank of Zimbabwe in order to import the vehicles to be ...

The defendants produced to court a number of letters written by the second defendant explaining, or seeking to explain, the delay in delivery of the vehicles. The first letter is dated 29 January 2007 which was a mere two days before the date scheduled for the delivery of the first batch and the explanation given for the anticipated delay in delivery is the late approval of the allocation of foreign currency. An assurance is given in the letter that everything was under control. The second letter, dated 15 February 2007, again speaks of the delays in obtaining foreign currency allocation (approval?). The writer goes further to state that arrangements had been made for the first batch of fifteen vehicles to be in the country by 28 February 2007. It was stated, further, that the supplier had refused to accept an advance payment that had been arranged due to the fact that it had come from a bank in South Africa. The last sentence in the letter is to the effect that correspondence from the Reserve Bank was being attached and the defendants were vigorously pushing for payment and the vehicles would be released 'soon.' Attached to the letter in question was a Reserve Bank approval for the defendants to pay for the vehicles through their bank. There was no allocation of funds on the certificate produced.

The letters addressed to the plaintiff were not responded to.

The plaintiff's witness, Mrs Chinodya, explained that when the defendants started coming up with excuses on the delivery of the vehicles they were requested to put their explanations in writing. The witness told the court that the position of the plaintiff was that the contract was for the supply and delivery of vehicles and not for the importation of the same. The plaintiff was hopeful that the endeavours by the defendants would succeed but when the contract was concluded it was never a term of the contract that the defendants would require an allocation of foreign currency from the Reserve Bank of Zimbabwe in order for them to perform their obligations on the contract.

The contract was never varied; a position accepted by the defendants.

HH236-10 : NATIONAL SOCIAL SECURITY AUTHORITY vs ALEC RYALS AND SKOTRIL (PRIVATE) LIMITED and ALEC KAGURU
Ruled By: MUTEMA J

It is idle for the respondents to dig in the ashes by claiming that Darlington Mujati verbally authorised the renovations by the respondents to be reimbursed later, or that McDonald Chinyoka verbally promised to rectify the issue of set off that had been omitted to be incorporated in the lease agreement when the same ...

HB95-16 : NATIONAL RAILWAYS OF ZIMBABWE CONTRIBUTORY PENSION FUND vs EKUTULENE INVESTMENTS t/a WALKERS PUB AND RESTAURANT and WAYNE ALLAN JONES
Ruled By: MATHONSI J

Where the parties have elected to restrict their own power to vary or discharge their contract by subsequent conduct by a non-variation clause providing that no variation of any of the terms of the contract shall be valid unless it is in writing, the terms of the contract shall bind the parties unless varied in ...

HH797-15 : PETER KAZINGIZI and THERESA MUCHABAIWA KAZINGIZI vs EQUITY PROPERTIES (PVT) LTD
Ruled By: MATHONSI J

The plaintiffs did not agree to purchase the property but now the defendant wanted to impose new conditions not contained in the initial undertaking - and unilaterally for that matter. It could not lawfully do that.

Appealed
SC41-18 : MARIAN CHOMBO vs IGNATIOUS CHOMBO
Ruled By: MALABA CJ, HLATSHWAYO JA and UCHENA JA

In terms of paragraph 29 of the Lease Agreement: “No variation or amendment of it is valid unless it is put in writing and signed by both parties.” This means any variation…, must be in writing and signed by the acquiring authority and the respondent.

HB157-16 : NRZ CONTRIBUTORY PENSION FUND vs JOSRO ENTERPRISES (PVT) LTD t/a ASCOT PUB & GRILL
Ruled By: TAKUVA J

Waiver of the right to cancel was the fifth ground raised by the respondent. The argument is that by accepting the payment of overdue rentals outside the stipulated time, the applicant waived its right to rely on the failure to pay rentals on time as a ground for termination of the lease….,. Sub-clause 40.1 of the lease agreement ...

Waiver of the right to cancel was the fifth ground raised by the respondent.

The argument is that by accepting the payment of overdue rentals outside the stipulated time, the applicant waived its right to rely on the failure to pay rentals on time as a ground for termination of the lease….,.

Sub-clause 40.1 of the lease agreement reads as follows:

“The failure by the landlord to exercise any right shall not be deemed to be a waiver of any of his rights in terms of this agreement and the acceptance of any overdue rent shall not constitute a waiver of any right which the landlord has to cancel this lease arising out of such breach or late payment of rent.”…,.

The net effect of non-variation and non-waiver clauses is to negative the raising of such defences.

In Agricultural Finance Corporation v Pocock 1986 (2) ZLR 229 (SC), the court had occasion to consider the combined effect of non-variation and non-waiver clauses in a lease agreement which are similarly worded to sub-clauses 40.1 and 40.2 of the lease in casu. The court's decision is captured in the head note which reads as follows:

“A non-variation clause in a contract entrenches the requirement that any variation has to be in writing but does not prevent a party for whose it is inserted from waiving the requirement.

A non-waiver clause negatives any raising of a waiver or any estoppels in that it amounts to notice given in advance, acknowledged by the other party, that conduct which might otherwise be a waiver or give use to an estoppels may not be taken to be such conduct.

The combine effect the two clauses is that two parties to a written agreement containing carefully and extensively worded non-variation and non-waiver clauses cannot enter an enforceable oral agreement departing from the written terms, since, to the extent it is a variation of the contract, it is precluded by the non-variation clause; whereas, if it be said to be a waiver or conduct giving rise to an estoppels then the non-waiver clause provides the complete answer to the point.”…,.

HH169-15 : ZIMBABWE PLATINUM MINES (PRIVATE) LIMITED vs ZIMBABWE REVENUE AUTHORITY and STANBIC BANK and MNISTERS OF MINES AND MINING DEVELOPMENT and MINERALS MARKETING CORPORATION OF ZIMBABWE
Ruled By: MAKONI J

The Mining Agreement contains a non-variation clause and a non-waiver clause…,. What is the combined effect of such clauses in a contract? The headnote in Agricultural Finance Corporation v Pocock 1986 (2) ZLR 229 SC sums it all. “A non-variation clause in a contract entrenches the requirement that any variation has to be in writing but does not prevent ...

HH06-18 : SIMBARASHE PASIPAMIRE vs GLOBAL PROPERTY ADVISORY & TECHNICAL SERVICES
Ruled By: MANGOTA J

An application in which the applicant moves the court to declare him the sole owner of the property which he and another person jointly purchased from the seller is misplaced. A fortiori when the application excludes his co-purchaser whose views remain unknown to the court. On 12 February 2004, the applicant and his former wife, one Virginia Pasipamire, purchased ...

On 12 February 2004, the applicant and his former wife, one Virginia Pasipamire, purchased Stand Number 172 of Roughlands Estate “A” (“the property”) from the respondent. The property is situated in the district of Marondera formerly Marandellas. It is 2,346 square metres in extent.

The purchasers did not, for reasons known to them, move the seller to transfer the property into their joint names. They, therefore, have only personal rights against the respondent.

On 18 May 2011 the applicant obtained a decree of divorce against his wife. The divorce proceedings took place at Leicester County Court in the United Kingdom.

Pursuant to the dissolution of their marriage, the applicant and his former wife filed a consent order with the mentioned court. They did so on 6 February 2013. Paragraph 11 of the consent order is relevant to the present application. It regulates the parties' division of property post their divorce. It reads:

“II. TRANSFER OF PROPERTY CONDITIONAL UPON PAYMENT OF LUMP SUM

(a) The Petitioner shall transfer to the Respondent, upon payment of the lump sum referred to in paragraph 10 above, all his legal estate and beneficial interest with full title guarantee in the freehold property 16 Southfield Close, Leicester LE 29 NW registered at the Land Registry under title number LT 131537 subject to the mortgage secured thereon in favour of HSBC.

(b) The Respondent shall transfer to the Petitioner all her legal estate and beneficial interest within the properties known as “Marandellas” 2,346 square metres, Zimbabwe and Good Hope Stands, Lot 11, West Gate, Zimbabwe on or before the 28^th day of February 2013…,.”

It is mentioned, in passing, that the applicant was the petitioner and his ex-wife the respondent in the consent order which was filed with the court.

Paragraph 10 of the order, it is observed, made reference to a lump sum order. The respondent was, in terms of the paragraph, enjoined to pay or cause to be paid to the petitioner a lump sum of €20,000=. She was to pay or cause to be paid to him the sum in question on or before 28 February 2013.

It was on the basis of clause 11(b) of the consent order that the applicant filed this application. He claimed that he is the sole owner of the property. He drew what he termed an addendum to the Agreement of Sale which his ex-wife and him concluded with the respondent on 12 February 2004. He moved the court to:

(i) Declare that the respondent infringed on his right to the property when it refused to sign the addendum to reflect that he is the sole owner of the property; and

(ii) Compel the respondent to sign the addendum to the agreement of sale so as to give effect to his rights as the sole owner of the property…,.

The respondent opposed the application.

It submitted that what he moved the court to grant him was/is akin to requesting the court to compel it to conclude a contract with him. It challenged the authenticity of the decree of divorce and the consent order which the applicant attached to his application. It insisted that the application could not succeed without a joinder of his former wife. It moved the court to dismiss the application with costs on a higher scale.

Four elements constitute the contract of purchase and sale. These are:

(a) The seller who wants to sell;

(b) The buyer who wants to buy;

(d) The price.

See NORMAN's Purchase and Sale in South Africa 4^thed…,: MACKENRTAIN's Sale of Goods in South Africa, 4ed…,.

Where one of the elements is missing, the contract is not one of sale.

The respondent stated, and correctly so, that it sold the property to two purchasers. These are the applicant and his ex-wife. It insisted that the ex-wife should have been joined to the proceedings.

The applicant stated that what he was seeking was a novation of the parties.

Whatever that meant remains anyone's guess. The term which he used to describe what he intended to achieve is not materially different from asking the respondent to enter into a new contract with him to the total exclusion of his ex-wife who, as he admitted, jointly purchased the property with him. The addendum which he attached to his application is nothing but a new contract which he wants to consumate with the respondent. That contract, if sanctioned, would have two and not three, parties as is the case with the parties' contract of 12 February 2004.

The word addendum does not, in fact, fit into the circumstances of the applicant's objective.

Mirriam–Webster com/dictionary defines addendum to mean a thing added; addition. Free Dictionary defines the word to mean “something added; an addition. Business dictionary.com defines addendum to mean “information attached or added to clarify, modify or support the information in the original document or written work” and Cambridge English Dictionary defines the word to mean “something that has been added to a book, speech or document.”

The above mentioned definitions show, in clear terms, that the applicant is seeking an alteration of the original contract. He wants something which excludes his wife added to it.

Whether or not the added information seeks to clarity, modify or support the contents of the original contract is not the issue. The bottom line is that the court cannot, legally speaking, compel the respondent to enter into this new contract with him. New in the sense that, whereas the original contract has two purchasers, the contract which the applicant intends to conclude with the respondent has only himself as the purchaser of the property which he jointly purchased with his former wife in 2004.

I, in this regard, associate myself with the dictum of INNES CJ, who, in Ambrose & Aitken v Johnson & Fletcher 1917 AD 327…, eloquently enunciated the principle that it is not for the court to remake a contract of the parties. In Holmes v Palley 1975 (2) RLR 98 (AD)…, BEADLE CJ repeated INNES CJ's sentiments and said:

“When parties make an agreement, each party is entitled to expect that the other party will abide by it. One party is not entitled to expect that the other party will carry out an agreement which is different from the one agreed to simply because the other party is not prejudiced by the difference.”…,.

The position which the respondent took remains unassailable. It sold the property to two persons. It is being cautious not to sign the addendum which the applicant single-handedly prepared without its input or that of his ex-wife.

View Appeal
SC29-13 : BETTY KANYUCHI vs DRAWING SERVICES (PVT) LTD
Ruled By: MALABA DCJ, GARWE JA and GOWORA JA

This is an appeal from a judgment of the High Court in which it granted an application for an eviction order against the appellant on the basis that the respondent was the owner of the property known as Stand number 3182 of Subdivision A of 159 of Prospect, Harare. The appellant was found not to ...

The appellant had challenged the vindicatory action instituted by the respondent on the basis that she had a right of occupation derived from an agreement of sale of the property entered into between her and a company called Champion Constructors (Pvt) Ltd, duly represented by one of its directors and a shareholder, Ms Elizabeth Chidavaenzi.

After hearing argument from counsel for both parties, the appeal was dismissed. It was indicated then that reasons for the decision would follow in due course.

It was not in dispute that the respondent was the registered owner of Stand number 3182 of subdivision A of 159 of Prospect, Harare. The issue before the court a quo was whether there was a binding agreement of sale which gave the appellant the right of occupation.

The court a quo found against the appellant.

The question before this Court is whether the decision of the court a quo is correct on the evidence placed before it by the parties.

The facts of this case are as follows.

The respondent issued summons for the ejectment of the appellant from Stand number 3182 of Subdivision A of Stand 159 Prospect in Harare on 9 June 2008. In her plea, the appellant sought the dismissal of the claim on the basis that she was a legitimate possessor and occupier of the property. The contention was that the right, title and interest in the property was lawfully transferred to her by a declaratory order issued by the High Court in case No. HC7594A/06.

The appellant contended that she was in occupation of the property pursuant to an agreement of sale entered into between herself and a company called Champion Constructors (Pvt) Ltd. The appellant contended that, alternatively, the respondent was estopped from denying that Champion Constructors (Pvt) Ltd was the holder of rights, title and interest in the property and was entitled to dispose of the property as it did.

The respondent, through its managing director, Mrs Elizabeth Chidavaenzi, tendered various documentary exhibits in support of its position. She denied that Champion Constructors (Pvt) Ltd had ever been authorised to dispose of the property in the manner alleged or at all.

The appellant relied on her own testimony and on the evidence of two former workers of Fingold Real Estate, which had allegedly been mandated by Champion Constructors (Pvt) Ltd to dispose of the property to her.

The court a quo accepted that the respondent was the registered owner of the property in question on the basis of irrefutable evidence - the title deeds to the property. The court also accepted that Mrs Elizabeth Chidavaenzi was the managing director and controlling shareholder of the respondent. The evidence placed before the court a quo pertaining to the relationship between the respondent and Champion Constructors (Pvt) Ltd was that the respondent company had contracted Champion Constructors (Pvt) Ltd to service the land and develop residential houses on the subdivisions. The agreement between the parties was that Champion Constructors (Pvt) Ltd would be paid in kind for its services or in the form of completed houses which it would, in turn, sell to prospective home-owners in order to recoup its expenses.

Mrs Elizabeth Chidavaenzi told the court a quo that, in the past, the respondent had mandated Fingold Real Estate to sell two of its properties but it did not sanction the sale of the property in issue. She testified, further, that this is the reason why the agreement of sale was not signed by the seller. Her testimony was to the effect that the appellant was involved in a fraudulent sale which had been masterminded by John Chagaresango of Finhold Real Estate, a close relative of the appellant.

Ms Chidavaenzi said that the first time she became aware of the purported agreement of sale of 26 September 2006, between the appellant and Champion Constructors (Pvt) Ltd, was in November 2006 when lawyers for the appellant began pestering her with demands that she sign the document. She also told the court a quo that on the two occasions that she had mandated Fingold Real Estate to sell properties on the respondent's behalf, she had given them instructions in writing, which she denied doing in this case.

The appellant admitted before the court a quo that John Chagaresango of Fingold Real Estate was a close relation of hers, her elder sister's son. She testified that she signed the agreement of sale before John Chagaresango, Mr Phiri and Faith Muzungu on 26 September 2006. Thereafter, she paid Z$32,500,000= on 28 September 2006, 9 October 2006 and 3 November 2006. The appellant's evidence before the court a quo was that the terms of the agreement of sale were not fully explained to her. She admitted that Ms Chidavaenzi had never authorised her to make improvements to the property.

The court a quo found that, despite being a major shareholder in both the respondent and Champion Constructors (Pvt) Ltd, Ms Chidavaenzi was a “focused, confident and convincing” witness whose “evidence proclaimed loudly and boldly that there was no contract to talk about between Champion Constructors and the appellant.”

The court found, further, that, Fingold Real Estate could not possibly have been mandated to sell the property in question to the appellant by Champion Constructors (Pvt) Ltd or anyone else. The estate agent failed to produce proof of its mandate to sell that particular property.

On the effect of the High Court order relied upon by the appellant as bestowing or confirming that the appellant had acquired the rights, title and interest in the property, the court a quo found that the order was made in default and was against Champion Constructors (Pvt) Ltd and Elizabeth Chidavaenzi. The court's view was that the order was not binding on Drawing Services (Pvt) Ltd or enforceable against it, because, despite being the registered owner of the property, it had also not been cited as a party to the proceedings.

According to the appellant's testimony before the court a quo, John Chagaresango, who worked for Fingold Real Estate, advised her that the property in question was for sale. Accompanied by John Chagaresango, she went to view the property. The property was in the care of Champion Constructors (Pvt) Ltd, which, together with Drawing Services (Pvt) Ltd, the respondent, were under the directorship and shareholding of Elizabeth Chidavaenzi and Keroni Tevera (according to form CR14 produced before the court a quo).

Elizabeth Chidavaenzi testified that Keroni Tevera was a passive participant in the management of the affairs of Champion Constructors (Pvt) Ltd. According to the evidence before the court a quo, after the visit to the Stand, John Chagaresango contacted Elizabeth Chidavaenzi and advised her that the appellant wished to purchase the Stand. It would appear that, upon instruction, Fingold Real Estate drew up a draft agreement, in terms of which the seller, Champion Constructors (Pvt) Ltd, held itself out as being the holder of the rights, title and interest in the property, and as agreeing to sell to the purchaser, the appellant, its right, title and interest on some of the following conditions:

1. The purchase price of the property of Z$32,000,000= (thirty two million Zimbabwe dollars) plus 15% value added tax be paid.

2. A deposit of Z$21,000,000= (twenty one million Zimbabwe dollars) to be paid in full within 48 hours of signing the agreement of sale, failing which the seller shall be entitled to cancel the agreement without further notice.

3. A cash deposit was to be paid by Bank cash transfer to Champion Constructors (Pvt) Ltd.

Clause 8 of the document of sale provided that there would be no variation of the conditions of the agreement unless the variation was in writing and signed by the parties.

In Clause 14, the parties acknowledged that the written agreement between them would be the only agreement and that no other conditions, stipulations, warranties or guarantees would be valid unless included in the agreement.

The appellant signed the proposed agreement on 26 September 2006 before two witnesses. The respondent did not sign. Champion Constructors (Pvt) Ltd did not sign. Elizabeth Chidavaenzi alleges that the estate agents drafted the document without her knowledge and consent. The appellant paid the deposit before the respondent signed the agreement of sale.

Her first instalment was paid on 28 September 2006. It took her up to 3 November to pay the deposit in full, contrary to the provisions of clause 1 of the alleged agreement of sale which stipulated that the deposit must be paid in full within 48 hours of the date of the signature of the agreement. If the appellant signed the alleged agreement on 26 September, and assumed that the seller had done the same, the deposit ought to have been fully paid by 28 September 2006.

It is not in dispute that the appellant subsequently paid the purchase price in full to Champion Constructors (Pvt) Ltd. When she sought to take occupation she was prevented from doing so by the respondent. The appellant applied to the High Court seeking an order declaring that the document she signed on 26 September 2006 constituted a valid and binding agreement of sale between herself and Champion Constructors (Pvt) Ltd. On 19 September 2007, the High Court issued an order on the following terms:

1. The provisional order in case number HC7594A/06 be and is hereby confirmed on the following terms:

(a) That the agreement of sale between the applicant and the first respondent, signed on 26 September 2006, in respect of Stand 3182 of Subdivision A of 159 Prospect be and is hereby declared to be legally binding and enforceable against the first respondent.

Armed with the order, the appellant took occupation of the property against protestation by Elizabeth Chidavaenzi. On 9 June 2008 the respondent issued summons out of the High Court claiming, by vindicatory action, ejectment of the appellant from Stand 3182 of Subdivision A of Stand 159 of Prospect Harare. It alleged that it was the owner of the property in terms of Deed of Transfer DT5668/72.

The respondent alleged that the appellant had no right to occupy the property as she had not entered into an agreement of sale with the registered owner of the property. The respondent alleged that there was no privity of contract between the appellant and the respondent.

In resisting the action, the appellant raised three points:

1. She denied that the respondent was the owner of the property and argued that the right, title, and interest in the property had been lawfully transferred to her by virtue of the declaratory order issued in her favour by the High Court order of 19 September 2007.

2. The appellant alleged that she had a right of occupation to the property by virtue of the agreement of sale with Champion Constructors (Pvt) Ltd.

3. The appellant denied that there was no privity of contract between the respondent and Champion Constructors (Pvt) Ltd as they were both under the directorship of Ms Chidavaenzi, who, according to the appellant, knew about the agreement of sale.

After hearing the evidence of the parties relating to the issues, the court a quo found that the appellant was not a credible witness. The court was not assisted by the evidence of the witnesses called by the appellant to bolster her case. It found Evis Monica Mutodi to have given “a hopelessly confusing piece of evidence”, which, under cross examination, was not consistent with that of the appellant even on the purchase price.

The court found that the appellant said that the purchase price was pegged at $32,000,000= while Evis Monica Mutodi said the purchase price was $32,000,500=. While Evis Monica Mutodi told the court that she had discussed the clauses of the alleged agreement of sale with her, the alleged appellant denied this and testified that she only discussed the agreement of sale with John Chagaresango.

On the veracity of the evidence of John Chagaresango, the court found that he testified to being given a mandate by Elizabeth Chidavaenzi to sell certain of her properties, including what he constantly referred to as Stand 1382, which, in reality, was Stand 3182. The court found his evidence at variance with that of Evis Monica Mutodi when he said that Ms Chidavaenzi had visited the site prior to the appellant doing so. The court also found that when directed to clauses that the appellant had not complied with, all John Chagaresango could say was that the agreement was not based on what the appellant and the witnesses had signed, but other verbal assurances by Ms Chidavaenzi.

In contrast, the court found the evidence of Ms Chidavaenzi to be precise and to the point. It found that the evidence was consistent with her plea and summary of evidence; and, in her evidence-in-chief, and under cross-examination, she maintained the denial that she gave Fingold Real Estate, or anyone, a mandate to dispose of the property.

Having dismissed the defence by the appellant, the court granted the eviction order. It is against the order that the appeal was instituted on the following grounds:

1. The court misdirected itself in concluding that Elizabeth Chidavaenzi was a credible witness, yet her demeanour and the inconsistencies and improbabilities in her evidence justified a finding that she lacked credibility.

2. The Judge misdirected himself by relying on what he considered as not having been put to the plaintiff's witness in cross-examination, yet, those matters related to areas where the evidence of the witnesses was mutually destructive.

3. The court misdirected itself by failing to determine that Elizabeth Chidavaenzi represented both the plaintiff and Champion Constructors (Pvt) Ltd when she sold the property in dispute to the defendant.

4. The Judge misdirected himself in his conclusion that Evis Monica Mutodi's evidence was “hopelessly confusing.”

5. The court misdirected itself in accepting, without criticism, the evidence of Elizabeth Chidavaenzi to the effect that she did not mandate Fingold Real Estate to sell the property in dispute.

6. The court misdirected itself by coming to a contrary conclusion in respect of a fact which was issue estoppel.

7. The court misdirected itself by relying on principles applicable to a lessee to conclude that the defendant, a bona fide possessor, had no right of retention pending compensation for improvements.

8. The Judge misdirected himself by failing to consider that the right of retention arises by operation of law upon the defendant showing that she is a bona fide possessor, and not upon the defendant instituting proceedings to enforce the agreement of sale.

The question whether the respondent, Drawing Services (Private) Limited, was a party to the proposed agreement of sale with the appellant must be answered in the negative. This means that there was simply no privity of contract between the appellant and the respondent. The appellant purported to contract with Champion Constructors (Pvt) Limited - a separate legal entity from the respondent.

The appellant's submission that the matter before the court a quo was res judicata must be rejected for the same reason. The respondent was not a party to the proceedings in which the High Court issued a declaratory order that the appellant could enforce her agreement of sale with Champion Constructors (Pvt) Limited.

There was no agreement between the appellant and the respondent in this case as evidenced by the fact that the respondent did not sign the proposed agreement of sale. In fact, the respondent denies offering the property for sale to the appellant.

Clause 14 of the proposed agreement of sale signed by the appellant stipulated that the agreement between the parties would only be valid and binding if reduced to writing and signed by both parties. This is intrinsic evidence of the intention of the parties. There was no binding contract between the appellant and Champion Constructors (Pvt) Ltd. If there was to be an agreement of sale, as alleged by the appellant, it would have to be evidenced by production of a written document signed by both parties.

We are of the view that there was no misdirection on the part of the court a quo for the following reasons:

1. There was no contract of sale between the appellant and the respondent.

2. The registered owner of the property, the respondent, had a right to vindicate its property against a person in occupation without its authority.

3. The appellant could not claim a right of occupation against the respondent on the basis that she was granted the right by an agreement that it entered into with another company which was not acting as an agent of the respondent to enter into the agreement on its behalf.

4. The High Court order on which it was sought to found the right of occupation did not grant the appellant such a right. That order, if it is correct, declared the validity and bindingness of the agreement purportedly entered into between the appellant and a Champion Constructors (Pvt) Ltd. Unfortunately, the order granted has no legal force or effect in the sense in which the appellant interprets it. It purports to declare the validity and bindingness of a written agreement which was signed by both parties on 26 September 2006. In fact, no such agreement exists. The proposed agreement was never signed by both parties. Only the appellant signed it. No reliance can therefore be placed on that order of the High Court.

Counsel for the appellant, having noticed the difficulty the appellant's case was meeting on appeal, argued that the parties entered into an oral agreement.

With respect, this was never alleged before the court a quo when the parties actually gave evidence and it is not alleged as a ground of appeal. It is also contrary to the clear intention of the parties as expressed in the document signed by the appellant on 26 September 2006.

For instance, in clause 14, the document declares itself to contain all the conditions and representations by which the parties wish to be bound. It goes on to exclude anything else not contained therein which is not in writing and signed by the parties. It expressly denies force to oral evidence as proof of a valid contract of sale between the parties.

View Appeal
SC47-20 : ROBSON MAKONI vs CBZ LIMITED
Ruled By: GWAUNZA DCJ, GUVAVA JA and MAKONI JA

This is an appeal against the whole judgment of the High Court sitting at Harare in which the court dismissed an application for rescission of a default judgment entered against the appellant on 23 July 2015.BACKGROUND FACTSOn 19 March 2015, the respondent issued summons against the appellant in the High ...

BACKGROUND FACTS

On 19 March 2015, the respondent issued summons against the appellant in the High Court under Case No. HC2525/15, wherein it claimed the sum of US$521,083=41 being the capital claim of US$258,019=29, interest adjusted by the in duplum rule in the sum of US$258,019=29 and bank charges in the sum of US$5,044=83. The respondent further claimed interest on the amounts at the rate of 28 percent per annum from the date of demand, being 24 February 2015, to the date of full and final payment.

The summons were served on the appellant on 30 April 2015. He filed a Notice of Appearance to Defend (the Notice) on 12 May 2015 through his legal practitioners, Messrs Nyikadzino, Simango & Associates. The Notice was duly served on the respondent's legal practitioners on 20 May 2015.

The Notice, so filed and served, had no reference of the legal practitioner handling the matter on behalf of the appellant.

Pursuant to this Notice, the respondent filed a Notice to Plead and Intention to Bar on 27 May 2015. It was served on Messrs Nyikadzino, Simango & Associates on 1 June 2015 with no reference of the legal practitioner handling the matter on behalf of the appellant, as it had not been provided on the Notice.

On receipt of the Notice to Plead, the appellant did not file any plea or other response. As a result, a bar was effected on 23 June 2015. A copy of that bar was served on Messrs Nyikadzino, Simango & Associates on 25 June 2015.

On 10 July 2015, the respondent filed a chamber application for default judgment. The default judgment was duly granted on 23 July 2015.

On 24 July 2015, a day after judgment had been granted against him, the appellant filed a chamber application for the upliftment of the bar in terms of Rule 84 of the High Court Rules, 1971 (the Rules). Subsequently, he filed the application for rescission of the judgment on 12 August 2015....,.

The appellant also challenged the interest rate of 28 per cent per annum. He averred that in terms of the agreement the interest rate was 12 per cent per annum. When it was pointed out to him, in the notice of opposition, that the interest rate was increased in terms of clause 7.1.2 he had no meaningful response....,.

On appeal..., counsel for the appellant…, made the following submissions;...,.

In respect of the interest charged, counsel for the appellant submitted that there was a dispute regarding the interest rate in that the rate that was agreed on was not the one used to calculate the amount claimed. The court a quo relied on clause 7.1.2 which requires that notice be issued before the adjustment of the interest rate. No such notice was ever given. A trial ought to have been conducted so that the question of the interest rate could have been resolved....,.

Regarding prospects of success, counsel for the respondent submitted that the..., Bank had the right to alter the rate of interest, on notice, in terms of section 7.1.2 of the credit facility agreement. The appellant does not mention clause 7.1.2 in his paragraph 4.

The issue of not being served with the requisite notice is not part of the appellant's case. There is no averment that the alteration of the interest rate was unilateral.

As a result, he was of the view that the appellant had no prospects of success in the main matter....,.

The appellant further alleged the violation of the in duplum rule in that the respondent charged interest in excess of the capital debt at a rate that was not agreed to by the parties.

In terms of clause 7.1.1 interest was to be payable at a rate of 12 percent per annum plus 4 percent facility fee to be charged upon acceptance of facilities offered. Clause 7.1.2 went on to provide;

“The Bank reserves the right to give notice, at any time, of any alteration in the rates of interest, and, thereafter, the Bank shall be entitled to charge such other rate as it may prescribe.

If the Borrower continues to avail of the facilities after receipt of the aforesaid notice by not fully repaying the amount due to the Bank, the Borrower shall be deemed to have agreed to the change in interest rate.”

Counsel for the appellant argued, at length, that for the respondent to alter the rate of interest from 12 percent to 28 percent per annum, it ought to have given prior notice to the appellant in terms of clause 7.1.2. As such, a unilateral variation in interest could not be permissible. The result would be a violation of the in duplum rule, in that the interest charged would be in excess of the principal debt of US198,000.

As was correctly pointed out by counsel for the respondent, this argument, regarding the unilateral variation of interest, was not pleaded by the appellant in his founding papers. It was not his case before the court a quo neither was it raised in the grounds of appeal.

It is trite that a new point may be advanced for the first time on appeal if its consideration then involves no unfairness to the party at whom it is directed.

AC CILLIERS, C LOOTS and HC NEL in HERBSTEIN and Van WINSEN, The Civil Practice of the High Courts, 5th ed, Juta & Co Ltd, Cape Town, 2009…, explains as follows;

“A question of law may be advanced for the first time on appeal if its consideration then involves no unfairness to the party against whom it is directed…,.

A second requirement for the raising of a new point on appeal is that the point must be covered by the pleadings. Where it is not clear that the point has been fully investigated (ie that all the evidence which might have been placed before the court if the point had been taken was in fact led), the court will not allow a new point to be raised for the first time on appeal.”

In Donelley v Barclays National Bank Ltd 1990 (1) SA 375…, the court held as follows;

“Secondly, it is clearly a wholly new line of defence now being taken. It was not mentioned in the summary judgment proceedings nor in the plea. It was never referred to in evidence or argument at the trial. Its mere novelty, of course, is no ground per se for rejecting it. However, generally speaking, a Court of Appeal will not entertain a point not raised in the court below and especially one not raised on the pleadings in the court below.”

Applying the above principles to the present matter, this would not be a proper case to allow the appellant to raise, for the first time on appeal, this new point.

The point was not raised in the pleadings and was not argued before the court a quo.

Accordingly, no basis has been laid out to attack the court a quo's finding that the sum claimed by the respondent was not in violation of the in duplum rule, and, consequently, that the appellant has no prospects of success in the main matter.

This ground of appeal must also fail.

Appealed
SC58-20 : YUSUF GAIBIE and MILLY GAIBIE N.O. vs ALEXANDER CASTANHEIRA and RACHEL CASTANHEIRA
Ruled By: GARWE JA, BHUNU JA and MAKONI JA

This is an appeal against the whole judgment of the High Court sitting at Bulawayo in which it granted absolution from the instance against the appellants' claim.FACTUAL BACKGROUNDThis is a contractual dispute. The appellants and the respondents entered into an Agreement of Sale in respect of a certain piece of ...

This is an appeal against the whole judgment of the High Court sitting at Bulawayo in which it granted absolution from the instance against the appellants' claim.

FACTUAL BACKGROUND

This is a contractual dispute. The appellants and the respondents entered into an Agreement of Sale in respect of a certain piece of land being Stand 710 Bulawayo Township in the District of Bulawayo known as Sunkist Flats situate at No.68 Samuel Parirenyatwa Street/Corner 6th Avenue, Bulawayo (“the property”).

In terms of the agreement, the purchase price of the property was in the sum of Z$11,500,000,000 (eleven billion five hundred million dollars) payable in instalments. The first instalment of Z$5,000,000,000 (five billion dollars) was to be paid upon signing of the agreement and was duly paid. The second instalment of Z$5,000,000,000 (five billion dollars) was payable by 27 January 2006 and the third instalment of Z$1,500,000,000 (one billion five hundred million dollars) upon the respondents taking occupation of the property.

On 27 January 2006, the respondents paid Z$1,800,000,000 (one billion eight hundred million dollars) instead of the agreed Z$5,000,000,000 (five billion dollars). After the respondents failed to pay the remaining amount within the stipulated time, the parties signed an addendum to the Agreement of Sale allowing the respondents an extension of time within which to pay the remaining amount.

It was signed by the parties on 16 February 2006 and it gave the respondents up to 28 February 2006 to pay the remaining balance. Pursuant thereto, the respondents made further payments.

It is common cause that by 28 February 2006 they had not cleared the amount outstanding. A further payment was made on 3 March 2006. By that date, a total of Z$9,200,000,000 (nine billion two hundred million dollars) had been paid by the respondents leaving a balance of $2,300,000,000 (two billion three hundred million dollars).

The respondents allegedly held on to this amount in the belief that the amount was to be paid to the sellers' conveyancers in terms of Clause 4.5 of the Agreement of Sale.

On 15 March 2006, the appellants wrote a letter to the respondents giving them 30 days' written notice to remedy their breach failing which the appellants would cancel the agreement. The letter further required the respondents to pay the sum of Z$2,300,000,000 (two billion three hundred million dollars) to their conveyancers, Messrs Baron & Partners, as provided for in the agreement as well as the outstanding interest charges as provided for in the addendum.

The respondents paid an additional amount of $1,200,000,000 (one billion two hundred million dollars). After getting no further response from the respondents pursuant to the letter of 15 March 2006, in respect of the outstanding amount, the appellants instituted proceedings in the court a quo against the respondents. They claimed cancellation of the Agreement of Sale. They tendered a refund of all the amounts paid as the purchase price as at the date of the summons. They further claimed costs of suit on the attorney and client scale in the event that the respondents opposed the matter.

The respondents denied breaching the Agreement of Sale and stated that they had complied with the agreement by paying the purchase price in full.

The matter was referred to trial on mainly two issues;

(i) The first issue was whether the defendants (the respondents) had breached the contract.

(ii) The other issue was whether the plaintiffs (the appellants) were entitled to cancel the agreement based on the defendants' breach.

The appellants gave evidence on their own behalf and closed their case.

Thereafter, the respondents applied for absolution from the instance arguing that the appellants had not proved a prima facie case as they had failed to prove any breach of the Agreement of Sale and a right to cancel the agreement.

On 5 July 2018, the court a quo granted the respondents' application for absolution from the instance reasoning that the plaintiff's case was full of glaring inconsistencies and unacceptable variances with the pleadings filed of record. It found that the appellants had failed, at the close of their case, to establish a prima facie case.

The appellants, aggrieved by that decision, filed the present appeal on the following grounds;

“GROUNDS OF APPEAL

1. The court a quo erred in law by granting absolution from the instance when the appellants had established a prima facie case of breach of contract by the respondents which breach entitled the appellants to cancel the contract.

2. The court a quo grossly misdirected itself on the facts by concluding that the appellants received the full purchase price set out in the contract when there was sufficient evidence to the contrary and no reasonable court, applying its mind to the evidence on record and the test for absolution from the instance, could have arrived at the same conclusion.

3. The court a quo grossly misdirected itself on the facts by concluding that the appellants had admitted that they had received the full market value of the property agreed upon at the time of contracting when there is no basis for such a conclusion and no reasonable court could have arrived at the same conclusion.

4. The court a quo erred in law by concluding that the appellants are not entitled to cancel the contract on account of breach by the respondents because the appellants allegedly breached the contract first, which alleged breach by the appellants was never pleaded by the respondents as a defence to the appellants` claim.

5. The court a quo erred in law by applying the contra preferentum rule against the appellants when there was no ambiguity at all as to the breach committed by the respondents and the appellants right to cancel the contract.”

Notwithstanding the number of grounds of appeal raised by the appellants, the court takes the view that the present appeal turns on the sole issue of whether or not the court a quo was correct in granting the application for absolution from the instance made by the respondents.

THE APPLICABLE LAW

The law to be applied in the present circumstances was eloquently articulated by MAKARAU JA in Competition and Tariff Commission v Iwayafrica Zimbabwe (Pvt) Ltd SC58-19…, where she said the following:

“[13] The law on when a court may grant absolution from the instance at the close of the plaintiff's case is settled. See Supreme Service Station (1969) (Private) Limited v Fox & Goodridge Limited 1971 (1) ZLR 1 (A) and United Air Charters (Private) Limited v Jarman 1994 (2) ZLR 341 (S). The court granting absolution must be satisfied that there is no evidence before it upon which a reasonable court might find for the plaintiff.

[14] Expressed differently, the court considering an application for absolution from the instance must ask itself if there is no evidence at all on each and every essential averment that the plaintiff must make to sustain the cause of action. If there is some evidence on all the essential averments, absolution should not be granted. If there is evidence on some, but not on all, the essential averments, absolution may be granted, for, in that instance, the plaintiff will not be able to sustain and perfect its cause of action. This is so because an application for absolution from the instance stands on pretty much the same footing as an application for the discharge of an accused person at the close of the State case albeit on a lower threshold of the burden of proof.

[15] It follows then that a court granting absolution must be clear on the essential averments that a plaintiff has to make to sustain the cause of action.”

See also United Air Charters (Pvt) Ltd v Jarman 1994 (2) ZLR 341 (S)…,.

APPLICATION OF THE LAW TO THE FACTS

In casu, it is common cause that the appellants' cause of action was breach of contract.

Clause 1.1 of the agreement, which regulated the purchase price and its payment, provided as follows:

“The purchase price of the property shall be the sum of $11,500,000,000 (eleven billion five hundred million dollars) which shall be payable in accordance with the provisions specified under Special Conditions elsewhere in this agreement.”

The relevant part of the Special Conditions clause provided as follows:

“4.2 THE FIRST PAYMENT in the sum of $5,000,000,000 (Five Billion Dollars) shall be payable upon signing of this agreement by RTGS transfer to an account to be advised.

4.3 THE SECOND PAYMENT in the sum of $5,000,000,000 (Five Billion Dollars) shall be payable on or before the 27th January 2006 by RTGS transfer to an account to be advised, else the Midrate applies thereafter.

4.4 THE THIRD PAYMENT in the sum of $1,500,000,000 (One Billion Five Hundred Million) shall be payable on the Purchaser obtaining occupation of the property.

4.5 The two parties agree that any amounts paid shall be immediately released to the sellers save for any amounts required by law to be of the Conveyancers on account of Capital Gains Tax.

…,.

4.8 In the event that the sum of $10,000,000,000 (Ten Billion Dollars) deposit shall not have been paid in full by the 10th February 2006 the Sellers shall have the right to cancel the Agreement forthwith notwithstanding to the contrary containing this Agreement.”

The addendum to the agreement granted the respondent extension of time to pay the outstanding amount by 28 February 2006.

The appellants argue that the second instalment of Z$5,000,000,000 (five billion dollars) was not paid in full as was required by the agreement and that the respondents only paid Z$1,800,000,000 (one billion eight hundred million dollars) thus leaving a balance of Z$3,200,000,000 (three billion two hundred million dollars). The second instalment ought to have been paid by 27 January 2006.

The respondents do not deny this but seek to aver that the addendum to the agreement granted them an extension to pay the outstanding amounts by 28 February 2006.

While that may be true, it is also correct that by the time the extension provided by the addendum had expired, the respondents had not yet paid the full Z$11,500,000,000 (eleven billion five hundred million dollars) as required by the agreement of sale as read with the addendum. Instead, they had only managed to pay Z$9,200,000,000 (nine billion two hundred million dollars) leaving a balance of Z$2,300,000,000 (two billion three hundred million dollars).

The last payment towards the purchase price was paid on 14 July 2006.

In addition, it is common cause that on 15 March 2006 the appellants wrote to the respondents giving them 30 days' notice in which to pay the outstanding amounts - which they failed to do.

The respondents argued that they paid the purchase price in full to the second respondent's account. The balance of Z$2,300,000,000 (two billion three hundred million dollars) was to be paid to the appellants' conveyancers. By the time the appellants issued summons they (the appellants) had not opened a file with their conveyancers.

It is this Court's view that the respondents have to explain why they failed to pay the amount they claimed was due to the conveyancers upon being advised of the identity of the conveyancers.

It is common cause that the respondents attempted to pay by cheque and it was returned by the Bank in April 2006. It was not clear why the cheque was returned.

Regarding the issue of whether the appellants were entitled to cancel the agreement, it is this Court's view that it is a question of interpretation of the agreement as read with the addendum. This can only be done after the court would have heard evidence from both sides.

As it is, the Court has heard the appellants' side only.

In this vein, therefore, the appellants established a prima facie case of breach of the agreement by the respondents. The full amount, as stated in the agreement, had not been paid at the time of issuance of the summons.

Once evidence has been adduced which constitutes prima facie proof of breach, then, such evidence may become proof, on a preponderance of probabilities, and a plaintiff will succeed in proving his or her case. The courts must be slow to grant absolution from the instance and this point was made in Katerere v Standard Chartered Bank Zimbabwe Ltd HB51-08 which was quoted with approval in Bakari v Total Zimbabwe (Pvt) Ltd SC21-19. It was stated that:

“The court should be extremely chary of granting absolution at the close of the plaintiff's case. The court must assume that, in the absence of very special considerations, such as the inherent unacceptability of the evidence adduced, the evidence is true. The court should not, at this stage, evaluate and reject the plaintiff's evidence. The test to be applied is not whether the evidence led by the plaintiff establishes what will finally have to be established. Absolution from the instance at the close of the plaintiff's case may be granted if the plaintiff has failed to establish an essential element of his claim - Claude Neon Lights (SA) Ltd v Daniel 1976 (4) SA 403 (A); Marine & Trade Insurance Co Ltd v Van Der Schyff 1972 (1) SA 26 (A); Sithole v PG Industries (Pvt) Ltd HB47-05.”

The same point had been made earlier on in Manyange v Mpofu & Ors 2011 (2) ZLR 87 (H)…, where it was stated that;

“The test to be applied as to whether to grant absolution is not whether the evidence for the plaintiff establishes what would finally be required to be established to obtain judgment. It is whether the plaintiff has made out a prima facie case against the defendant on the basis of which the court could or might find for the plaintiff. A reticent defendant should not be allowed to shelter behind the procedure of absolution from the instance. In practice, the courts are loathe to decide upon questions of fact without hearing all the evidence from both sides, and have usually inclined towards allowing the case to proceed. At this stage of the trial, it is not pertinent to evaluate the weight of the evidence adduced or the preponderance of probabilities, save where such findings are manifest from the evidence already heard.”

See also Chombo v Minister of Safety and Security (I3883/2013) [2018] NAHCMD 37.

It bears mention that the appellants only had to prove a prima facie case and their evidence a quo cannot be characterized as having been manifestly unsatisfactory, unreliable, or that it failed to establish an essential element of the claim. An arguable case was made out and the respondents ought to have been put to their defence.

At the hearing of the matter, counsel for the appellants sought to argue that the court a quo did not apply its mind to the matter that was before it for the reason that the judgment of the court a quo is a regurgitation of the respondents (then defendants a quo) submissions. He submitted that the court a quo simply adopted the evidence and submissions of the respondents without independently assessing it and without having regard to the appellants' submissions.

Per contra, counsel for the respondents argued that this was not an issue that had been raised in the grounds of appeal and thus could not be properly raised for the first time at this hearing.

On the merits, she argued that the court a quo did not produce a biased decision and for authority she relied on the case of Stuttafords Stores (Pty) Ltd and Others v Salt of the Earth Creations (Pty) Ltd 2011 (1) SA 267 (CC).

In that case, the Constitutional Court of South Africa, in no uncertain terms, refrained from determining the question whether the extensive use of counsel's heads of argument could lead to a perception of bias because it was not a question before it. It merely expressed its views on such conduct. The views are obiter and not binding.

However, in casu, it is apparent that the court a quo did not regurgitate the submissions made by the respondents in the court a quo. There are differences between the submissions and the final judgment. As a result, the court takes the view that while it may be undesirable for a court to plagiarize counsel's heads of argument in a judgment, this does not necessarily, without more, amount to a misdirection.

DISPOSITION

The appellants have managed to establish that the court a quo misdirected itself in granting absolution from the instance when the appellants had established a prima facie case. The appeal has merit and must succeed.

Accordingly, it is ordered as follows:

1. The appeal be and is hereby allowed with costs.

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

“The application for absolution from the instance be and is hereby dismissed.”

View Appeal
HB179-18 : YUSUF GAIBIE and MAHMOUD GAIBIE vs ALEXANDER CASTANHEIRA and RACHEL CASTANHEIRA
Ruled By: MAKONESE J

The defendants have made an application for absolution from the instance at the close of the plaintiffs case.

The defendants contend that the plaintiffs had failed to lead evidence upon which a court might find in favour of their claims. The application is made on the basis that an essential of the claim, an alleged breach of contract, was not proved in sufficient evidence. Further, the plaintiffs alleged right to cancel the agreement was not proved. The defendants aver that the evidence led by the plaintiffs was fraught with glaring inconsistencies and unacceptable variance with the plaintiffs' pleaded case.

The plaintiffs are opposing the application for absolution from the instance.

The plaintiffs' aver that taking into account the applicable law, and evaluating all the evidence adduced on behalf of the plaintiffs, the pleadings filed of record, the exhibits, and all the discovered documents as well as the viva voce evidence, the application for absolution from the instance is unsustainable and ought to fail with costs.

The plaintiffs aver that they have established a prima facie case of breach of contract and the plaintiffs' right to cancel the contract as a result of such breach. The plaintiffs alleged that the application for absolution from the instance is premised on a mis-interpretation of the terms of the Agreement of Sale, as amended, and a misconception of the consequences at law of the defendants' failure to pay the full purchase price after they were called upon to remedy their breach.

The Factual Background

On the 25th of January 2006 the parties entered into an Agreement of Sale in terms of which the plaintiffs sold to the defendants an immovable property for the agreed price of Z$11,5 billion, subject to certain terms and conditions as set out in the agreement. The plaintiffs alleged that the defendants breached the agreement by failing to pay the purchase price in full despite the extension of time to pay by the 28th of February 2006 in terms of an addendum to the Agreement of Sale signed on the 16th of February 2006.

The defendants deny having breached the agreement of sale and state that they have paid the purchase price in full. They aver that the Capital Gains Tax was paid to the plaintiffs' legal practitioners, who, incidentally, were also the defendants' legal practitioners at the relevant time in accordance with the Agreement of Sale.

The joint pre-trial conference memorandum filed by the parties' legal practitioners set out the following issues for trial;

1. Whether the defendants are in breach of contract.

2. Whether the plaintiffs' cancellation of the Agreement of Sale was in terms of the Contractual Penalties Act [Chapter 8:04].

3. Whether the plaintiffs' attempted to restitute the amount paid by the defendants towards the sale due to breach.

4. Whether the plaintiffs are entitled to cancel the agreement based on the defendants' breach of contract.

5. The onus on the plaintiffs on all the issues.

The Pleadings and Burden of Proof

This being a cause based on breach of contract, the onus of proof rests on the plaintiff to prove breach and the nature thereof. The plaintiffs not only have to allege breach in sufficiently clear terms in their pleadings, but also to prove such breach in evidence. In their pleadings, the plaintiffs allege breach in the following respects:

(a) Failure by the defendants to pay a balance of Z$1,2 billion.

(b) Failure by the defendants to pay the sum of Z$2,3 billion to the conveyancers. The breach, as alleged, is mentioned in paragraphs 4, 5, 6, 7 and 9 of the declaration.

(c) Failure to pay interest in the sum of Z$54,208,814.

In their plea, the defendants denied breaching the terms of the agreement and contend that they have complied fully with the Agreement of Sale.

Assessment of evidence

The plaintiffs filed both the Agreement of Sale and the addendum as part of their case. During the course of the proceedings, the plaintiffs also produced, as exhibit 2a, a schedule showing the defendants' payments totaling Z$9,2 billion made to the first plaintiff, and exhibit 3, a letter from Joel Pincus, Konson and Wolhuter, legal practitioners who were then legal practitioners for the plaintiffs.

The plaintiffs led oral evidence from two witnesses. The first plaintiff confirmed, wholesale, together with all and any defects therein, the evidence, beliefs, and recollections of the second plaintiff.

The evidence of the first plaintiff that he confirmed and adopted the evidence of the second plaintiff was of little probative value to the court.

The first plaintiff had no independent recollection of the matter and did not corroborate the second plaintiff's evidence in any material respects.

It has to be noted that corroboration can only be supplied by independent evidence of a witness giving independent recollections of an incident at issue.

Only one question was put to the first plaintiff, under cross-examination, which question elicited new evidence from the witness. The following exchange occurred between the first plaintiff and the defendants' legal practitioners;

“Q. Who is the registered owner of the property?

A. I am. I gave it to my brother, but I am not the registered owner.”

The only independent aspect of the witness' evidence was that he and not the second plaintiff, and not him and the second plaintiff is the registered owner of the property. The witness, under cross examination, suddenly wept copiously in court. He then informed the court that he and his father had worked hard to acquire the building at issue. He indicated that it was not proper for the property, to “just go like that”. The witness asked the court for a “good judgment”. The first plaintiff certainly displayed his emotions in a rather exaggerated manner.

The second plaintiff gave evidence central to the plaintiffs' claims. He was the single and key witness in this matter.

Clause 1.2 of the Agreement of Sale provides as follows:

“It is recorded herein that the purchase price has been determined and agreed in the context of the prevailing Midrate of Exchange between the Zimbabwean and United States Dollar…,.”

The second plaintiff confirmed that the price was set by him at an equivalent of US$120,000 which was a reasonable price and acceptable to him at the time. The second plaintiff accepted that the midrate only changed between 25 and 3 March 2006.

The suggestion that the purchase price was eroded by the slide of the Zimbabwean dollar, in a period of two months, is baseless.

The second plaintiff confirmed that he signed both the Agreement of Sale and the addendum and he signed both in his own name, and on behalf of the first plaintiff. This is evident from an examination of both documents.

The second plaintiff testified that he co-owns the building with the first plaintiff.

The witness testified that the defendants failed to pay the purchase price by the 27th of January 2006 as stipulated in the Agreement of Sale. Initially, the witness stated that he tried to pursue the defendants to no avail. He stated, further, that upon chasing the defendants he reached no agreement with them. He later conceded that he had signed the addendum with the defendants. After the addendum was signed the witness averred that the defendants were given up to the 28th of February 2006 to settle the balance.

By 28 February, the defendants had not paid the entire purchase price.

He then approached his lawyers who issued a notice to remedy the breach. By the time the notice and demand was issued, the defendants had paid a total of Z$9,2 billion. Such payments were recorded and agreed by the parties prior to issuance of summons.

The witness affirmed that his claim was for cancellation of the contract and that he was tendering a refund of all monies paid by the defendants against such cancellation.

Under cross-examination, an entirely different picture began to emerge.

The plaintiff was moving away and in some instances contradicting his initial evidence. The witness sought to allege that when the addendum was signed, on 16 February 2006, the defendants had already breached the Agreement of Sale by failing to pay the sum of Z$10 billion into his account by 27 January 2006. The witness admitted that, on the face of it, the addendum did not give the sellers the right to cancel the agreement on account of non-payment with the extended time limits. The witness conceded that the addendum gave the sellers the right to levy interest at the rate of 80% or at the NMB Bank investment rate for any further delays in paying off the purchase price. The witness emphatically denied, under cross examination, that he had advised the defendants how much they needed to pay on account of Capital Gains Tax, to the nominated conveyancers, Ben Baron & Partners. The witness repeatedly disputed that the figure of Z$2.3 billion as the amount of Capital Gains Tax in spite of a demand having been made to settle that amount. When it was put to the witness that his lawyers had pleaded on his behalf that Capital Gains Tax was in the sum of Z$2,3 billion the witness stood firm that there was no way he could calculate and demand capital gains tax from the defendants.

Under cross-examination, the witness contradicted his pleadings on the amount, excluding capital gains tax, which remained due to him under the agreement. He pleaded mistakes in the calculations.

The witness further contradicted the terms of the Agreement of Sale and the addendum in material respects.

One glaring contradiction is that the witness sought to argue that capital gains tax was not, contrary to clause 4.5 of the Agreement of Sale, and contrary to the wording of the notice and demand written by his legal practitioners, and the pleadings on record, payable directly to the conveyancers. The witness kept insisting that the money was his money and that it should have been paid to him. Later, in his cross-examination, the witness had departed from his earlier evidence and sought to assert that he had indeed “estimated” capital gains tax in the sum of Z$2,3 billion.

The witness conceded that, up to the time demand was made by his legal practitioners, he had not opened a file at Ben Baron & Partners or supplied the firm with an irrevocable power of attorney as required by the Agreement of Sale.

The witness conceded that the following payments were made to the plaintiffs by the defendant:

(a) Z$9.2 billion into the first plaintiff's account which was nominated in the Agreement of Sale.

(b) Z$2,3 billion in various instalments to Joel Pincus, Konson and Wolhuter.

(c) Z$54,208,844 on account of interest to Joel Pincus, Konson and Wolhuter.

It was accepted, by the second plaintiff, that at the time the last two payments were made, the plaintiffs still did not have an account with the nominated conveyancers for payment of capital gains tax.

Sufficiency of evidence at the close of plaintiffs case

The defendants argue that at the close of the plaintiffs case the plaintiffs failed to lead evidence upon which a court might return a judgment in their favour.

The plaintiffs, however, do not agree.

The plaintiffs urge the court to dismiss the application for absolution from the instance as it is wholly without merit. The plaintiffs argue that they have made a prima facie case for breach of contract, entitling them to cancel the Agreement of Sale. Further, it is alleged by the plaintiffs that there is abundant evidence upon which a court, directing its mind reasonably to such evidence, could or might find for the plaintiffs.

I shall examine the sufficiency or otherwise of the evidence presented by the plaintiffs at the close of their case.

(a) Firstly, the breach of contract pleaded by the plaintiffs was not proved.

In his evidence, the second plaintiff could not explain how the sum of Z$1,2 billion which was stated in his pleadings, and which the defendants were said had failed to pay was calculated or arrived at. The defendants are alleged to have failed to pay such amount in the plaintiffs' pleadings. That the plaintiffs relied on the defendants' failure to pay that amount is clear from the plaintiffs' declaration, which states, in paragraph 4, as follows:

“In breach of the aforesaid terms of the agreement, defendants only paid the plaintiffs' the amounts detailed in annexure 'B' hereto, leaving a balance of $1,200,000,000 plus accumulated interest on all outstanding amount.”

The obligation to pay the sum of Z$1,2 billion, which was termed a material breach, was not proved nor explained by the plaintiffs at all.

(b) Secondly, in their pleadings, the plaintiffs based their allegations of breach of contract upon the alleged failure by the defendants to pay the sum of Z$2,3 billion in respect of Capital Gains Tax on time and as provided under the Agreement of Sale.

In his evidence, the second plaintiff conceded that after payment of Z$9,2 billion into the second plaintiff's account, the defendants met with a Mr Lunat, the plaintiffs accountant, and enquired about the plaintiffs representation at Ben Baron & Partners. What was admitted, however, was that when the defendants intended to pay the Capital Gains Tax, the plaintiffs had no file or account at the nominated conveyancers. It was therefore not possible for the defendants to pay the amount at the offices of the seller's nominated conveyancers.

In the event, the plaintiffs cannot be allowed to rely on the delay in payment of Capital Gains Tax. To do so would be tantamount to allowing the plaintiffs to benefit from their own tardiness or wrongdoing which is not permissible at law.

(c) Thirdly, the plaintiffs, according to their own admission, were in breach of the contract.

Under cross-examination, the second plaintiff conceded that the plaintiffs were in breach of clause 4.7 of the agreement of sale which provides as follows:

“Upon signing of this agreement, the sellers shall furnish the conveyancers herein with an irrevocable power of attorney authorising them to do all such things and sign all such papers as might be necessary to give effect to the transfer.”

The plaintiffs, having breached the terms of the Agreement of Sale, which breach occurred prior to the alleged breach by the defendants, ought not to be permitted to profit from such breach. See Chioza v Siziba SC04-15 where the Supreme Court held that:

“It will seem quite clear that the appellant seeks to benefit unjustly from the transaction. Having sold the property and received the proceeds through his agent, he now seeks the return of the property and thus, so to speak, 'have his cake and eat it'. The respondent, on the other hand, has parted with the full value of the property and stands to incur great financial prejudice if an order for eviction is granted in terms of the counter claim. It would appear then, that the court a quo was correct in its finding that the appellant sought to benefit from its own wrongdoing…,.”

In this instance, the plaintiffs admittedly received the full market value of the property, as set out and accepted by them as at the time of the sale. I make the observation that the plaintiffs ensured that the fluctuating Zimbabwean dollar was pegged at the mid-rate of the United States dollar at the relevant time.

The plaintiffs received the full purchase price for the property.

It is crucial to note that the addendum to the Agreement of Sale provided for a punitive rate of interest of 800% for any late payment.

The second plaintiff, under re-examination, sought to clarify his case on the alleged breach. He stated that there were various instances of breach, the first occurring on the failure to pay by the 27th of January 2006, the second one by failure to pay by the 28th of February 2006 following the delivery of the demand.

The plaintiffs' evidence was clearly at variance with the pleaded cause of action.

The evidence was also contrary to any correct reading of the addendum.

Under re-examination, the second plaintiff stated that, by the end of the notice period, only Z$9,2 billion had been paid to him out of Z$11,5 billion. The defendants had indeed paid the total amount, exclusive of Capital Gains Tax. The witness made reference to a failure to pay Z$10 billion by the 27th of January 2006. This argument presents an inconsistency in the contract of sale.

Under clause 4.2 and 4.3, a total of Z$10 billion was to be paid into an account nominated by the sellers. This account turned out to be the sellers personal account. In terms of clause 4.4 of the agreement the last payment of Z$1,5 billion was only to be made upon the buyers obtaining occupation. The second plaintiff could not state when occupation was taken by the defendants, but conceded that this could not have been in November 2006. No interest, therefore, would have become due and payable before the last payment of Z$1.5 billion became due. Clause 4.5 inconsistently required that the amount required for Capital Gains Tax was to be held by the conveyancers. The pleadings allege that this amount was Z$2,3 billion. Given the amount, it becomes difficult to determine how the defendants could be said to have failed to pay Z$10 billion to the second plaintiff. The amount, less the Z$2,3 billon, came to Z$9,2 billion which was admittedly paid to the plaintiffs.

The second plaintiff conceded that the Agreement of Sale was drafted by himself.

It follows that the second plaintiff is the proferens in this matter, therefore, by operation of the contra proferentem sale, any obscurity, vagueness and lack of clarity around the issue of what clause was breached must be resolved against the plaintiffs; see Blumo Trading (Pvt) Ltd v Nelmah Milling Co and Anor HH39-11.

In concluding the analysis of the evidence led by the plaintiffs, I find that the plaintiffs' evidence fell far short of establishing a prima facie case for breach of contract.

The plaintiffs' evidence was so discredited under cross-examination that no reasonable court examining the evidence could or might find in its favour. The plaintiffs' pleaded case contradicted the viva voce evidence in material respects. The alleged breach was not established.

The second plaintiff departed from the pleaded case in several respects. His evidence is not reliable.

By choosing to extend the true limits, and signing an addendum to provide expressly for penalties for late payment and not reserving the right to cancel the Agreement of Sale, the plaintiff exercised an election to remain in the agreement and to receive the full market value for the property.

There is sufficient evidence that the plaintiffs received, in full, the value of the property at the relevant time, pegged against the United States midrate at the time. The plaintiff is attempting to have his cake and eat it at the same time.

The Law applicable

One of the leading case law authority, in this jurisdiction, on the test to be applied when deciding whether to grant an application for absolution from the instance at the close of the plaintiffs' case is United Air Charters (Pvt) Ltd v Jarman 1994 (2) ZLR 341 where GUBBAY CJ stated as follows…,;

“The test in deciding an application for absolution from the instance is well settled in the jurisdiction. A plaintiff will successfully withstand such an application, if, at the close of his case, there is evidence upon which a court, directing its mind reasonably to such evidence, could or might (not should or ought to) find for him…,. Moreover, in considering an application for absolution, the court should lean favour of continuing the case rather the dismissing it…,.”

See; Claude Neon Lights (SA) Ltd v Daniel 1976 (4) SA 403 (AD) and Manyange v Mpofu & Ors 2011 (2) ZLR 87 (H).

The test to be applied in this instance is whether, at the close of the plaintiffs' case, there is any evidence upon which the court, directing its mind reasonably to such evidence, could or might find in favour of the plaintiffs. The court must also examine whether the plaintiff has failed to adduce any evidence or adduced insufficient evidence to establish an essential element of the claim. The court is enjoined to make an overall assessment of all the evidence adduced on behalf of the plaintiffs and the pleadings filed of record together with exhibits and annexures, as well as viva voce evidence to establish whether the evidence is sufficient to proceed to hear the case for the defendants.

I am satisfied, that, in applying the applicable law to the facts of this dispute, it becomes evident that the plaintiffs case is full of glaring inconsistencies and unacceptable variance with the pleadings filed of record. The second plaintiffs' evidence, by all accounts, was at direct variance with the pleadings. The plaintiffs sought to correct his evidence under re-examination. The net result was that this court concluded that the plaintiffs failed, at the close of the plaintiffs' case, to establish a prima facie case.

In the result, and accordingly, absolution from the instance is granted. The plaintiffs are ordered to pay costs of suit.

View Appeal
HH563-18 : CAR RENTAL SERVICES (PVT) LTD T/A AVIS RENT A CAR vs BERNARD CHISWA and SHAILLON CHISWA
Ruled By: MUZOFA J

The plaintiff issued summons against the defendants claiming payment of US$13,868=90 for car rental charges due to the plaintiff and interest thereon at the rate of 3.5% from 1 April 2016 to date of full payment.

The undisputed facts are that the first defendant entered into a car hire agreement with the plaintiff in October 2015. In terms of the agreement, he was issued with a motor vehicle, a Ford Everest, that he used and was expected to make payments. He failed to do so until the motor vehicle was withdrawn from him.

The plaintiff had to seek the services of the police for the first defendant to return the motor vehicle. The plaintiff laid criminal charges against the first defendant. The second defendant, a sister to the first defendant, offered to settle the debt and the criminal charges were withdrawn.

In due course, the second defendant withdrew the offer to settle the debt. It is then that the summons was issued. The second defendant applied for the appointment of a curator ad litem over the first defendant.

On 17 March 2017 a provisional order was granted. No final order was sought by the second defendant.

As a result of the appointment of the curator ad litem persona the plaintiff withdrew its claim against the first defendant.

This trial therefore relates to the second defendant only.

At the pre-trial conference meeting held after the withdrawal of charges against the first defendant the parties agreed that the following issues would determine the case;

1. Whether or not the agreement entered into between the first defendant and the plaintiff was valid.

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

The plaintiff led evidence through two witnesses.

Trevor Chakawata “Trevor” gave evidence first; he is the Operation Manager at plaintiff company.

He said the first defendant,, Bernard, entered into a monthly rental contract of a motor vehicle in October 2015 with the plaintiff. Payments were done on a monthly basis. Bernard went to Binga in December 2015. He wanted to make a pre-payment but the network was down; no payment was made. While in Binga, Bernard was reminded of the unpaid bill; he advised Trevor to use his credit card he had left with the plaintiff to pay off the amount due, however, the credit card was blocked. Trevor said he communicated with Bernard on the phone by voice calls and text messages. When the payment was not made, Trevor advised Bernard to return the car. Bernard promised to do so but did not return the car. He then reported the matter to the police. He advised Bernard of the police report; Bernard was surprised at this turn of events as he questioned why the matter was reported yet he was a reliable customer.

The police communicated with Bernard who promised to return the car in a week's time. He did not. The police then opened a docket.

Trevor then advised Bernard that the matter had been handed over to the police. Bernard came to Harare in February 2016. He advised the police that he had returned the car and promised to settle the bill the following day. On the following day he did not turn up at the police station where Bernard and Trevor were supposed to meet. Trevor and the policeman went to his residence where they were referred to Mr Chanakira, who also referred them to Mrs Chanakira. They called Mrs Chanakira who agreed to meet them in Eastlea. At the meeting, after being told about the case, Mrs Chanakira, the second defendant, advised them that Bernard had a mental problem. When the policeman advised her of the criminal charges against Bernard and how the police deal with mentally ill accused persons, Mrs Chanakira offered to settle the bill.

Trevor said he advised her to put the offer in writing. This was done. In terms of that offer, she was to pay $1,000 a month from March 2016 until the debt was fully paid. She did not pay anything.

Initially, on being asked about the payment, she said she was in South Africa. However, later, Mr Chanakira called Trevor and said they should leave Mrs Chanakira but pursue Bernard who was well and was selling cell phones in town. Eventually, Mrs Chanakira withdrew the offer to settle the bill.

Trevor denied that at the time of contracting, Bernard was mentally incapacitated. He said Bernard knew that every month end he was supposed to pay - and he did. The car that he hired, a Ford Everest, is a unique car such that if one is of an unsound mind he could not drive it - but he did. In December, he was double billed and he was able to pick it; this cannot be done by a mentally incapacitated person.

He also said the acknowledgement of debt by Mrs Chanakira was valid because she offered to pay the debt. The acknowledgement of debt was drafted by her lawyers.

Mrs Chanakira asked them to leave Bernard she would pay the debt. The police could not confirm Bernard's mental capacity through their processes because Mrs Chanakira undertook to pay the debt.

Under cross examination, he said he saw Bernard when he signed the initial agreement and he looked normal. He also said a report from Parirenyatwa Annex Hospital indicated that Bernard had a history of mental disorder. He was not sure why the matter was withdrawn against Bernard.

He confirmed that the undertaking was made on the understanding that Bernard was mentally unstable....,.

The court, in Leader Tread Zimbabwe (Pvt) Ltd v Smith HH131-03, cited the sentiments of L.R CARIEY in Law of Novation…, that;

“A compromise (transactio) is a novation, with a difference, however, that a novation on an invalid contract in itself is invalid, but, if a compromise is made about a contract the validity of which is in doubt, this cannot be upset on the ground that the contract which was compromised was invalid; the purpose is to replace uncertainty with certainty.

It is a novation designed to effect settlement of a dispute and may be arrived at by novation in the narrower sense of the word or by delegation.”...,.

Delegation is a form of novation in which, by agreement between all parties concerned, a third party is introduced as debtor in substitution of the original debtor, who is discharged; R H CHRISTIE in Business Law in Zimbabwe, 1998…,.

HH177-17 : GILBERT JONGA vs NYASHA CHABATA
Ruled By: CHATUKUTA J

The applicant seeks an interdict restraining the respondent from interfering with his farming operations at Subdivision 3 of Farm 45, Glendale (the farm).

This is not the first time that the parties are before this court. The parties are fighting over who has the right to occupy the farm which belongs to the State. On 6 December 2016, the respondent successfully approached this court in case number HC12380/16, on an urgent basis, seeking spoliatory relief. On 9 December 2016, MATANDA-MOYO J ruled in favour of the respondent in case number HC12380/16 and issued the following order:

“TERMS OF FINAL ORDER SOUGHT

That you show cause to this Honourable Court why a final order should not be made on the following terms:

1. The interim order be confirmed.

2. It be and is hereby declared that applicant, his representatives, employees and invitees are entitled to remain in peaceful and undisturbed possession, occupation and use of subdivision 3 of Farm 45 of Glendale in Mazowe District of Mashonaland Central measuring 36.21 hectares.

3. The respondent pays the costs of this (application) on the higher scale of legal practitioner and client.

TERMS OF THE INTERIM ORDER GRANTED

Pending the finalisation of this matter, the applicant is granted the following interim relief –

1. That the respondent restore to the applicant possession of subdivision 3 of Farm 45 Glendale in Mazowe District of Mashonaland Central measuring 36.21 hectares.

2. The Deputy Sheriff be and is hereby authorised and empowered to ensure that such restoration is done and that the applicant remain in peaceful and (undisturbed) occupation of the above property.

3. The respondent and all those claiming through him vacate the said property forthwith of which the Deputy Sheriff is authorised to evict same from the property.

4. That the respondent pays costs of suit.”

On 13 December 2016 the applicant noted an appeal against the judgment of MATANDA-MOYO J.

On 22 December 2016, the respondent destroyed part of the applicant's crop resulting in the present application.

The background to this application was articulated in case number HC12380/16 in which the court found that the respondent is a holder of an offer letter for a portion of the farm measuring 36.21 hectares. The offer letter was issued on 6 November 2015. The applicant produced documents proving that he was in occupation of the Remaining Extent of Farm 45 (Truro) Glendale and Plots 1, 4, and 5 of Dunmaglas Farm in Mazoe. The court found that the portions allocated to the two parties are different.

The applicant contended, in HC12380/16, and still contends in the present application, that the portions are one and the same and he has a 99 year lease over the entire farm. He has been in occupation of the entire portions since 2002 - well before the respondent was issued with the offer letter on 6 November 2015.

Believing that the court in case number HC12380/16 erred in holding that the portions are different and that he was not in possession of the farm, the applicant filed an appeal against that decision in SC771/16.

The applicant avers, in the present case, that, at the beginning of 3 October 2016, he entered into an agreement to grow 100 hectares of maize with the Government under the Special Programme on Maize Production for Import Substitution (popularly known as “the Command Programme”). He was given inputs under the Programme, and, during the first half of November 2016, and before the respondent had filed her application in case number HC12380/16, he planted his maize. On 13 December 2016 he filed the appeal against the decision. On 21 December 2016, the respondent returned to the farm and destroyed 7 hectares of the maize crop. Fearing that the respondent could proceed to destroy further hectarage, the applicant has approached this court on a certificate of urgency for an interdict....,.

The issue before me is not who has the right to occupy the farm. The issue is how to protect the maize crop on the farm, which had been partly destroyed by the respondent, pending the determination of the appeal....,.

I now turn to the merits of the application, the requirements of an interdict are trite, that:-

(a) There is a prima facie right even though open to doubt;

(b) An injury has actually occurred or is reasonably apprehended;

(c) The applicant does not have an alternative remedy; and

(d) The balance of convenience favours the granting of the interim relief.

See Setlogelo v Setlogelo 1914 AD 221; Airfield Investments (Pvt) Ltd v Minister of Lands & Ors 2004 (1) ZLR 511.

It is not in issue that the applicant had a prima facie right, albeit, one which is open to doubt.

The applicant produced a letter, dated 27 October 2015, from the Ministry of Lands, confirming that his application for a 99 year lease over Reveille Farm & Farm 45 had been approved. The respondent conceded that whilst the applicant had not established a clear right to be on the farm, he had established a prima facie right. She conceded that, in November 2015, the applicant had planted only 3ha of maize crop on the farm. This confirms that the applicant was already in occupation of part of the farm as her offer letter is dated 6 November 2015 and she only moved onto the farm in December of the same year.

Even assuming that it were to be found that the applicant does not have any right to occupy the farm, he would be entitled to tend to and harvest his maize crop as such crop does not attach to the land as a permanent fixture; see Bangure v Gweru City Council 1998 (2) ZLR 396 (H)…,.

It is equally not in issue that an injury has already occurred.

The applicant produced pictures showing areas with a thriving maize crop which had been ploughed under. The respondent conceded to have ploughed the crop under on instruction of the Deputy Sheriff.

Both the applicant and the respondent produced documents from Agritex as to the extent of the damage. The applicant produced an assessment report dated 9 December 2017 of the total area planted as at 22 December 2016 (38.7ha), area ploughed under (4.6ha) growth stage of the maize crop (3 to 5 leaf stage). Although the report is dated 9 December 2016 (before the destruction of the crop) it tallies with the contents of the minutes produced by the applicant dated 11 January 2017. The minutes are of a meeting purportedly held on 23 December 2016 at the behest of the Command Programme Bindura committee following the destruction of the crop by the respondent. The minutes confirm the apprehension of all concerned of the harm that was to be caused if the respondent was to continue to destroy the crop.

This apprehension, in my view, confirms that the applicant does not have an alternative remedy other than to approach the court.

The requirement on the existence of an alternative remedy is well explained in Neptune (Pvt) Ltd v Venture Enterprises (Pvt) Ltd HH127-89. At page 8 ADAMS J quotes LEWIS J in Reserve Bank of Rhodesia v Rhodesia Railways 1966 RLR 451 that -

“…, NATHAN, in his well known works on INTERDICTS, states the position as follows, at p32 -

'Lastly, as Van der Linden says, there must be no other ordinary remedy by which the applicant can be protected with the same result….,. The most familiar example, however, which comes to a lawyer's mind is that of damages. It is clear that, if the applicant will have adequate compensation by the award of damages, he will have another ordinary remedy….,. Generally speaking, however, the fact that the applicant has a remedy open to him by way of action for damages is sufficient to bar an interdict where the interference or breach of a right is capable of measurement in money.'

The operative part of the quotation, in fact, the essence of it, really, is, that there is an existing remedy for the protection of the applicant 'with the same result';…, if that is the situation, then, so it seems to me, the interdict should be refused.”…,.

As alluded to earlier, there is no other remedy that would compel the respondent from interfering with the applicant's farming operations other than an order from this court.

The applicant has therefore satisfied the first three requirements.

Both the applicant and the respondent have invested time and other resources into the maize crop. The applicant is the one who expended time, effort, and resources to obtain the inputs. He is the one who worked on the land, planted the crop, and managed the crop until the respondent took over. The respondent has been managing the crop and has equally invested time and other resources since then.

The issue is therefore where the balance of convenience lies.

The applicant submitted that he is the one who entered into an agreement under the Command Programme and is obliged to manage the maize crop and make deliveries in terms of the agreement. In the event that he fails to do so, he is likely to face a claim for damages as in Rollex (Pvt) Ltd v Delta Beverages (Pvt) Ltd HH66-15.

The respondent relies on the resolution of the meeting on 23 December 2016 which resolution transferred the applicant's rights and obligations under the Command Programme agreement to her.

The applicant is beneficiary of the inputs under the Command Programme that are presently in the ground. He is the one who legally has rights and obligations under that programme. The agreement is still binding. The applicant, pursuant to the agreement under the Command Programme is, and must, be responsible for the maize crop. He has already lost part of the crop as a result of the respondent's conduct and may consequently fail to fully meet his obligations under the agreement and expose himself to a legal suit and requires protection by this court.

Under the circumstances, the balance of convenience weighs in his favour.

Despite the intervention of the Command Programme committee, the respondent is not privy to the agreement between the parties. The transfer of the crop to the respondent has no force of law as the resolution of the Committee does not amend the agreement between the applicant and the State and cannot replace the agreement.

CC04-20 : INNOCENT GONESE and JESSIE MAJOME vs PARLIAMENT OF ZIMBABWE and SPEAKER OF THE NATIONAL ASSEMBLY and PRESIDENT OF THE SENATE and EMMERSON MNANGAGWA N.O. and PRESIDENT OF ZIMBABWE
Ruled By: MALABA CJ, GWAUNZA JCC, GARWE JCC, GOWORA JCC, HLATSHWAYO JCC, PATEL JCC, GUVAVA JCC, MAVANGIRA JCC and BHUNU JCC

The process of amending the Constitution includes variation, alteration, modification, addition to, deletion of, or adaptation of existing Constitutional provisions.

SC61-07 : AGRICULTURAL BANK OF ZIMBABWE LIMITED t/a AGRIBANK vs CLEMIO MACHINGAIFA AND CHENJERAI MUTAMBISI
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

This is an appeal against the judgment of the High Court, Harare handed down on 13 July 2005 in which the High Court granted with costs an application by the respondents declaring, inter alia, that they were entitled to payment of a mileage allowance of 4,000 kilometres per month calculated at the Automobile Association of Zimbabwe (AAZ) rates.

The facts of this case are these:

The respondents were employed by the appellant as Assistant Director, Credit Risk and Assistant Director, Debt Recovery, respectively. Both respondents signed revised contracts of employment in the year 2000 which stipulated their conditions of employment. The contract of employment provided, in paragraph 3, as follows:

“3. Motor Vehicle Use

You are entitled to the use of an Agribank company car under the prevailing terms and conditions. You are required to familiarize yourself with the existing rules and regulations for the use and disposal of the motor vehicle.

Or

You are entitled to purchase a motor vehicle under the prevailing motor vehicle scheme. You will use the car for business and claim in accordance with the existing rules and as amended from time to time. You are also entitled to a mileage allowance based on a mileage of 4,000 kilometres per month at the applicable standard AAZ rates.”…,.

The underlined portion of paragraph 3 is at the centre of the dispute in this matter.

By letter dated 30 August 2001, the appellant's Human Resources Manager wrote to the respondents advising them that, following the restructuring of management grades, the appellant's Board had approved the conversion of the company car scheme to a personal car scheme under the managers and field staff motor vehicle scheme with effect from 1 September 2001.

The conversion to a personal car scheme was done without reference to the respondents.

The conversion meant that the use of a company car was being done away with and the respondents would no longer access fuel and other facilities previously offered by the Bank in this regard. The respondents were offered a loan equivalent to the purchase price of their existing company vehicles and a monthly allowance of $30,300 to assist in “the cost of running the motor vehicle.”

It appears the respondents were not happy with the conversion to the new scheme, and, on 3 September 2001, wrote a letter to management raising various issues on the matter and threatening legal action because of what they perceived as a breach of contract.

One of the issues raised was their entitlement to an allowance based on a monthly mileage of 4,000 kilometres.

The response by the Managing Director of the appellant was that such an allowance “would ultimately be too expensive for the Bank to sustain” and that the change had been “influenced by the magnitude of the vehicle allowance cost and its sustainability.”

Thereafter, the parties engaged in considerable exchange of correspondence on the matter. The respondents continued to insist that they were entitled to the allowance. The appellant maintained that it could not justify payment of such a huge allowance.

The appellant eventually stated, by letter dated 14 April 2004, that the allowance had been included by mistake and that the intention had been to allow the respondents to use their personal vehicle and submit claims for such use under the Bank's prevailing terms and conditions.

In June 2004, the respondents then filed a court application seeking, inter alia, a declarator that they were entitled to payment of the allowance.

After hearing both parties, the High Court granted the application with costs. It is against that decision that the appellant has appealed to this Court.

The decision of the court a quo is attacked on four bases. These are:

(i)...,.

(ii)...,.

(iii) Thirdly, that the court a quo erred in failing to take into account the fact that in terms of the contract of employment agreed to by the respondents, the appellant could change its policies and procedures;...,.

WHETHER THE APPELLANT COULD ALTER THE RESPONDENTS' CONDITIONS OF SERVICE

The appellant has argued that, in terms of paragraph 11 of the contract of employment, the respondents undertook to subscribe to the Bank's policies and procedures currently in use and as revised and amended from time to time. Pursuant to this clause, so it is argued, a revised motor vehicle scheme came into existence with effect from 1 September 2001.

I do not accept, that on the basis of paragraph 11 of the contract of employment, the appellant was empowered to remove, without reference to the respondents, such a fundamental right as the entitlement to payment of a monthly mileage allowance.

If the appellant's argument were to be taken to its logical conclusion, on the basis of that paragraph, even the respondents' salaries could have been reduced.

I do not accept that the Bank, in amending its policies and procedures, was empowered to alter clearly defined contractual rights to payment of a salary and allowances.

Clause 3 of the contract of employment clearly states that the respondents were:

“…, entitled to a mileage allowance based on a mileage of 4,000 kilometres per month at the applicable standard AAZ rates.”

Such an entitlement could not be changed, altered, or amended at whim on the basis that the appellant was entitled to change its policies and procedures from time to time. A party to a contract cannot unilaterally alter the terms and conditions of the contract in these circumstances.

This submission must also fail.

In the result, I find that this appeal has no merit.

The appeal is dismissed with costs.

SC12-21 : TOBACCO PROCESSORS ZIMBABWE (PRIVATE) LIMITED vs TONGOONA MUTASA and OTHERS
Ruled By: MAVANGIRA JA, MAKONI JA and CHATUKUTA AJA

This is an appeal against the whole judgment of the Labour Court upholding the National Employment Council - Tobacco Grievance and Disciplinary Committee's (NEC GDC Committee) finding that the appellant tacitly renewed the respondents' contracts of employment.FACTUAL BACKGROUNDThe following facts are common cause. The respondents were employed by the appellant ...

FACTUAL BACKGROUND

The following facts are common cause. The respondents were employed by the appellant on two-year fixed contracts beginning 1 May 2011 to 30 April 2013.

After the expiry of their contracts of employment, they continued to work for the appellant for eleven months following which the appellant offered them new contracts with the same terms as the expired ones.

The respondents signed the new contract which effectively regularised their employment in retrospect for the period of 1 May 2013 to 30 April 2015.

Upon expiry of the contracts, on 30 April 2015, the appellant retained the respondents until 22 June 2015 on the same terms as the expired contracts. It then offered them one-year fixed term contracts. The proposed contracts had a two-months probation clause and other less favourable conditions.

The respondents rejected the appellant's offer.

The appellant terminated their contracts of employment by letter dated 7 July 2015 on the basis that the negotiations between the parties had collapsed.

Aggrieved by the termination of their employment, the respondents noted a grievance of unfair dismissal with the appellant's Works Council.

The Works Council upheld the decision by the appellant's Human Resources department to offer the appellants one year contracts after the expiry of the two year contracts. It reasoned that there was no legal impediment to the appellant replacing the expired two-year contracts with other contracts which had different terms and conditions from the expired contracts.

The Work's Council further found that the respondents suffered no prejudice as they were paid for the period they worked whilst the parties were negotiating.

Thereafter, the respondents appealed to the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC).

They submitted, that, in instances where an employer allows an employee to work after a fixed-term contract had expired, the contract is deemed to have been tacitly relocated on the same terms and conditions. Therefore, they submitted, there was no basis for the new contracts as there had been tacit renewal. They also averred, that, the alleged negotiations were inconsequential as they ensued after the tacit renewal.

In response, the appellant submitted, that, the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC) had no power to interfere with the findings of facts made by the lower tribunal unless the findings were outrageous in their defiance of logic. The appellant contended that the two-month delay in notifying the respondents of the new offer could not be inferred to mean there was tacit renewal.

It did not intend to renew the two year contracts.

The National Employment Council - Tobacco Grievance and Disciplinary Committee ruled in favour of the respondents.

It held, that, tacit relocation could be safely presumed since the appellant did not communicate its intention to change the terms of the respondents' contracts before their termination and that the respondents were engaged on the same terms and conditions as before. It accordingly ordered the reinstatement of the respondents for the unexpired period of their contracts without loss of pay and benefits or payment of their salaries and benefits up to 30 April 2017.

Aggrieved by this decision, the appellant appealed to the Labour Court (the court a quo) on the ground, that, the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC) grossly misdirected itself when it made a finding that there was a tacit renewal of the respondents' two year employment contracts simply because the appellant allowed the respondents to continue reporting for duty after the expiry of their contracts.

It argued, that, where there are clear indications that the other party did not intend to be bound by the old contract, there could not be tacit relocation of a contract that extended beyond the contractual period.

The appellant submitted, that, tacit relocation could not occur where the parties are engaged in negotiations over a new agreement. It contended that the respondents were allowed to work and were paid for the period when their new contracts were being attended to.

To the contrary, the respondents argued that there was tacit relocation in that the appellant allowed them to continue working on the same conditions from 1 May 2015 to 22 June 2015 notwithstanding that their contracts expired on 30 April 2015.

They also emphasized that the parties did not agree on a new arrangement.

The respondents further indicated that the appellant had the option of terminating their contracts of employment but allowed them to render their services and subsequently introduced unfavourable conditions. It was submitted that a finding against tacit relocation in the circumstances of the case would be contrary to social justice and fair labour standards of equity and fairness in the workplace.

DETERMINATION OF THE COURT A QUO

The court dealt with the issue of whether or not the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC) erred in finding that the contracts of employment had been tacitly relocated.

In doing so, it considered the employment status of the respondents at the time their contracts were terminated. The court a quo found that there was no evidence to the effect that the new contracts were as a result of any negotiation process as no negotiations were done from 1 May to 22 June 2015.

It reasoned, that, the old contracts were tacitly relocated in that the appellant had allowed the respondents to continue working on the same terms and conditions as before, and did not communicate any intention to change the terms and conditions of the employment.

The court a quo also had regard to the precedent that the appellant did not immediately terminate or renew the respondent's contracts but allowed them to continue working, for some period, on the same terms and conditions of the expired contracts.

It reasoned, that, had the appellant not wished to be bound by the old expired contracts, it would have expressed that intention.

The court accordingly concluded, that, the National Employment Council - Tobacco Grievance and Disciplinary Committee's decision did not constitute an outrageous defiance of logic since the facts indicated that there was tacit relocation of the two year contracts.

Aggrieved by that decision, the appellant noted the present appeal on the following grounds:

GROUNDS OF APPEAL

“1. Having accepted that the fixed term contracts between appellant and each of the various respondents had come to an end and that new fixed term contracts have been offered, within two months of the expiry of respondent's contracts, the court a quo erred in finding notwithstanding those agreed facts, that the old contracts had been relocated.

2. The court a quo erred in not coming to the conclusion that the negotiation that took place after the expiry of the contracts were such as negated any finding that there was an extension of the contractual relationship between the parties by the quasi-mutual assent.

3. The court a quo erred in imposing upon appellant a contract it had not concluded to prejudice the clear terms it had actually offered. (sic)

4. Respondents, having rejected the terms of the contract offered by appellant, the court a quo erred in concluding that respondents had a contract to enforce.”

SUBMISSIONS BEFORE THIS COURT

At the hearing, counsel for the appellant submitted that the court a quo asked itself the wrong question, and, ultimately, gave itself the wrong answer.

The wrong question was whether it had been shown that there had been negotiations between the parties from 1 May 2015 to 22 June 2015, and, if not, what the effect of the absence of negotiations, during that period, would be.

The court a quo's ratio was that, upon the expiry of the contract, they only engaged in negotiations after a period of six weeks: because of that silence, there was tacit relocation of the contract.

He contended, that, the real dispute between the parties was not that the respondents' contracts had been relocated but that the respondents were aggrieved by the terms of the new contracts.

Counsel for the appellant submitted, that, the respondents admitted that there were negotiations and that they did not refuse to sign the one-year contracts but were looking forward to working under the old two-year contracts.

Counsel for the appellant further contended, that, a holistic analysis of the facts would show that relocation of contracts in 2015 could not have been the appellant's intention.

The parties knew of the need for a written contract at all material times as evidenced by the fact that in 2013 the respondents worked for eleven months without contracts and later signed contracts backdated to the period when they were without contracts.

The parties haggled over the terms of the one year contracts as the employees did not like the new terms of the contract. They did not argue that the old contracts had relocated.

To confirm the appellant's position some of the employees signed the one-year contracts.

He concluded by saying that tacit relocation cannot be inferred from the facts of this matter.

On being asked the date when the negotiations started, he was unable to pinpoint a date.

He however submitted that even if there were no negotiations between 1 May and 20 June 2015 a tacit relocation could not be inferred when the parties subsequently negotiated.

He further submitted, that, the fact that the parties were negotiating shows that there was no intention on the part of the appellant to revert to the old contract. He relied for that proposition on the case of Justin Kwangwari v Commercial Bank of Zimbabwe HH79-03.

He submitted, that, there is no period set in our law between the expiry of a fixed term contract and the conclusion of a new one for it to be held that there was tacit relocation. He urged the court to consider all the facts holistically in order to draw inferences consistent with the proven facts.

On being asked what would be the status of the employees in the seven (7) weeks, before the offer, he submitted that the status was determined by the new contract.

Counsel for the respondents submitted, that, the facts of the matter point to tacit relocation.

He indicated that the root of the dispute lies in the determination of the respondents' employment status in the seven (7) week period.

Accordingly, he referred to section 12(1) of the Labour Act [Chapter 28:01] (the Act) for the proposition that the legislature envisaged the existence of 'deemed contracts' in respect of an employee who works for an employer and is receiving or entitled to receive any remuneration notwithstanding that such contract has not been reduced to writing.

He also referred to section 12(2) of the Labour Act, which, so he argues, demands mandatory compliance by the employer to inform the employee, in writing, the period in terms of which they are engaged and section 12(3)(a) of the Labour Act which provides that where a contract does not specify its duration or date of termination, it is deemed to be one without a limit of time.

As such, he argued, the legislature sought to protect employees from unscrupulous employers who have more bargaining power than the employees.

He emphasized, that, there was tacit relocation in that the respondents reported for work and were remunerated under the old contracts.

He further indicated that the respondents' concerns did not only relate to their disgruntlement with the new offer but also spoke to the issue of tacit relocation.

He further submitted, that, the appellant's offer of new contracts of employment was immaterial to the concept of tacit relocation.

Additionally, he stated that the one-year contracts offered by the appellant were unjust, unfair, and violated the respondents' right to fair and safe labour practices and standards provided for in section 65 of the Constitution of Zimbabwe, 2013.

In rebuttal, counsel for the appellant submitted that there can be a delay after the expiry of the contract and the delay does not amount to relocation.

It would be wrong to say once there is a delay then section 12 of the Labour Act is the answer.

He submitted that section 12 uses “shall” in a directory sense and not in a peremptory manner. Failure to comply with it does not render conduct void.

He concluded by saying that section 12 of the Labour Act is what the employer was complying with in the seven (7) weeks.

ISSUE FOR DETERMINATION

From a consideration of the grounds of appeal raised and the submissions made, one issue falls for determination which is:

Whether or not the court a quo erred in finding that the contracts of employment in question had been tacitly relocated.

A reading of the record reflects that the ratio of the court a quo's ruling was that the respondents' continued rendering of services from 1 May 2015 to 22 June 2015 in terms of the expired contracts constituted tacit relocation of the contracts by the appellant.

That tacit relocation was at the centre of the parties' dispute is also evidenced in the way the matter progressed before the various fora. This will be shown by a perusal of the minutes of the appeal hearing of 26 October 2015 before the Work's Council to the respondents' appeal before the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC Committee) and the subsequent proceedings in the court a quo.

THE LAW

It is settled law that a fixed-term contract of employment automatically expires at the end of the specified period unless the parties thereto mutually agree to its termination: see ZIMRA v Mudzimuwaona SC04-18.

However, in certain instances, despite the expiry of the period of employment, the employer-employee relationship may be found to exist owing to the parties' conduct under the concept of tacit relocation.

Tacit relocation, as it applies to contracts of employment, entails that where an employee's fixed term contract expires without renewal and the employee continues to render his services to the employer with the employer paying the previously agreed remuneration, the expired contract is deemed to be relocated. Therefore, the employee is deemed to be employed on the same terms and conditions as the previous contract.

In Gumbo v Air Zimbabwe (Pvt) Ltd 2000 (2) ZLR 126…, the court made the following pertinent remarks regarding the principle of tacit relocation;

“Finally, the best that can be said for the applicant is that in certain cases, akin to the present, there is a presumption that when the parties continue the employer-employee relationship beyond the contractual period, without agreeing new terms, there is a tacit relocation of the expired contract on the same terms and for the same duration.

In other words, all things being equal, it could be said that on 1 October 1999, the applicant commenced a new probationary period.

However, this presumption does not operate when it is clear that one of the parties has no intention of continuing on the terms of the expired contract: see Lilford v Black 1943 SR 46 at 47, where BLAKEWAY J said:

'The renewal of a lease or of a contract for services to be performed can take place either by express agreement or tacitly. If, after the expiration of the period provided for the duration of the contract, the parties continue their relationship without any fresh agreement the law presumes, in the absence of indications to the contrary, that they have agreed to enter upon a new lease on the same terms as the expired lease. But, this presumption does not operate when it is clear that the parties, or one of them, does not intend to carry on with the contract on the old terms.'” …,.

JOHN GROGAN in his book “Workplace Law” 8th ed…, states the following:

“If, after the agreed date for the termination of the contract, the employee remains in service and the employer continues to pay the agreed remuneration, the contract is deemed to have been tacitly renewed, provided that an intention to renew is consistent with the parties' conduct. The relocated contract will continue on exactly the same terms and conditions as the previous fixed-term contract, except that the duration of the contract need not be the same as that of the original contract; the life of the relocated contract must be determined in light of the particular circumstances of each case.”…,.

In Golden Fried Chicken (Pty) Ltd v Sirad Fast Foods CC & Ors 2002 (1) SA 822 (SCA)…, the court held:

“After the termination of the initial agreement, and prior to this letter, the parties (in the light of the facts recited) conducted themselves in a manner that gave rise to the inescapable inference that both desired the revival of their former contractual relationship on the same terms as existed before.

Taken together, those facts establish a tacit relocation of a franchise agreement (comparable to a tacit relocation of a lease) between the appellant and Sirad (Shell South Africa (Pty) Ltd v Bezuidenhout and Others 1978 (3) SA 981 (N) 984B-E).

A tacit relocation of an agreement is a new agreement and not a continuation of the old agreement (Fiat SA v Kolbe Motors 1975 (2) SA 129 (O) 139D-E; Shell 985B-C).

The fact that the appellant had forgotten that the agreement had lapsed is beside the point because in determining whether a tacit contract was concluded a court has regard to the external manifestations and not the subjective workings of minds (Fiat SA 138H-139D).”…,.

The principle that can be drawn from the cited authorities is that an inference of tacit relocation is dependent upon the continued existence of an employer-employee relationship after the expiration of the contract. The employee will continue rendering his services to the employer who, in turn, pays remuneration in terms of the expired contract.

Tacit relocation is based on the intention of the parties which must be consistent with their conduct. The court, in determining such an issue, considers all the facts holistically as it draws inferences which are consistent with the proved facts.

The principle of tacit relocation of contracts of employment appears to be embodied in statute, in particular section 12 of the Labour Court Act [Chapter 28:01] which provides:

“12 Duration, particulars and termination of employment contract

(1) Every person who is employed by or working for any other person and receiving or entitled to receive any remuneration in respect of such employment or work shall be deemed to be under a contract of employment with that other person, whether such contract is reduced to writing or not.

(2) An employer shall, upon engagement of an employee, inform the employee, in writing, of the following particulars —

(a) The name and address of the employer;

(b) The period of time, if limited, for which the employee is engaged;

(c) The terms of probation, if any;

(d) The terms of any employment code;

(e) Particulars of the employee's remuneration, its manner of calculation, and the intervals at which it will be paid;

(f) Particulars of the benefits receivable in the event of sickness or pregnancy;

(g) Hours of work;

(h) Particulars of any bonus or incentive production scheme;

(i) Particulars of vacation leave and vacation pay;

(j) Particulars of any other benefits provided under the contract of employment.

(3) A contract of employment that does not specify its duration or date of termination, other than a contract for casual work or seasonal work or for the performance of some specific service, shall be deemed to be a contract without limit of time:

Provided that a casual worker shall be deemed to have become an employee on a contract of employment without limit of time on the day that his period of engagement with a particular employer exceeds a total of six weeks in any four consecutive months.

(3a) A contract of employment that specifies its duration or date of termination, including a contract for casual work or seasonal work or for the performance of some specific service, shall, despite such specification, be deemed to be a contract of employment without limitation of time upon the expiry of such period of continuous service as is —

(a) Fixed by the appropriate employment council; or

(b) Prescribed by the Minister, if there is no employment council for the undertaking concerned, or where the employment council fixes no such period; and thereupon the employee concerned shall be afforded the same benefits as are in this Act or any collective bargaining agreement provided for those employees who are engaged without limit of time.”

Section 12(2) of the Labour Act has been interpreted to merely impose an obligation on the employer to supply the information and does not require the parties to sign a written contract: see Rumbles v Kwa Bat Marketing (Pty) Ltd (2003) 8 BLLR 811 LC.

The statement of particulars is not the contract itself nor is it even conclusive evidence of the contract: see L. MADHUKU, Labour Law in Zimbabwe, 2015…,.

However, a proper construction of section 12(1) of the Labour Act yields the result, that, where an employee renders services in return for remuneration, a contract of employment exists notwithstanding that such a contract has not been reduced to writing.

Tacit relocation is therefore presumed.

This is made clearer by the provisions of section 12(3a) of the Labour Act which states, that, a fixed term contract shall be deemed to be a contract without limit of time upon the expiry of such period of continuous service.

APPLICATION OF THE LAW TO THE FACTS

A determination of whether a written contract was automatically renewed in accordance with the principle of tacit relocation is a question of fact which has to be answered after an analysis of the particular facts and circumstances of each case: see Sun International (South Africa) Ltd v Crocodile Enterprises [2014] ZANWHC 52.

In casu, it is not in dispute that the parties' relationship was governed by a written contract of employment which terminated by effluxion of time on 30 April 2015. As at that date, the respondents would have ceased to be the appellant's employees.

However, the appellant allowed the respondents to continue working on the old terms and conditions of their contracts until 22 June 2015 when it then offered the respondents one-year contracts with less favourable conditions.

It can be reasonably inferred from this conduct of the parties that a new contract had come into existence by the principle of tacit relocation.

Applying the dicta in Golden Fried Chicken (Pty) Ltd v Sirad Fast Foods CC & Ors 2002 (1) SA 822 (SCA)…, that, tacit relocation of an agreement is a new agreement and not a continuation of the old agreement, it follows, that, a new agreement between the parties came into effect on 1 May 2015 owing to the appellant's conduct of retaining the respondents in its employ on the same terms and conditions of the expired contracts.

Such a finding would have resolved the matter; however, a secondary issue arises from the parties' submissions.

The issue for consideration is the effect of the alleged negotiations, if any, on the relocated contract.

This is necessitated by the appellant's position that the existence of negotiations regarding a new contract negates any finding to the effect that the old contracts were relocated. It is the appellant's position that the engagements between the parties, after the expiration of the contract, are a clear indication that it had no intention of continuing on the old terms.

It relied on communication by the appellant's Human Resources Manager, dated 7 July 2015, informing the respondents that the negotiations had collapsed, thus, a new contract would not materialize and the Works Council determination to that effect.

Per contra, the respondents aver, that, negotiations regarding the new offer made by the appellant did not have any legal effect on tacit relocation as a new contract had already materialised.

In their written submissions, they aver that the purported negotiations were induced by duress as the appellant's Human Resources' Manager threatened to dismiss them if they did not abandon the claim for tacit relocation and dispense with the services of their legal practitioners.

As such, they submitted that the 'alleged collapse of negotiations' in the circumstances, could not be a basis for the termination of employment.

Since tacit relocation is inferred from the presumed intention of the parties to the contract and their conduct, where it is established that both parties accepted that the old contract had terminated and engaged in negotiations regarding a new contract, tacit relocation will be negated.

This is for the reason that neither of the parties would have conducted themselves in a manner that gave rise to the inescapable inference that both desired the revival of their former contractual relationship on the same terms as existed before.

In this regard, the court a quo made a factual finding that there was no evidence to the effect that there were any negotiations between the parties from 1 May 2015.

It further found, that, although the appellant may have intended to terminate the contracts, it failed to communicate that intention.

It also took into account the manner in which the parties dealt with the same issue in the past.

When the initial two year contracts expired the employer did not immediately renew the contracts. It merely allowed the employees to continue rendering services on the same terms and conditions of the expired contracts.

It only regularised the contracts after eleven (11) months.

It is settled law that an Appellate Court may only interfere with the decision reached by a lower court based on factual findings where gross misdirection has been established: see Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S).

The appellant has not alleged such a gross misdirection which necessitates this court's interference.

More importantly, there is nothing on record to show that the parties engaged in negotiations during the period 1 May 2015 to 22 June 2015 when they were without contracts.

There is no evidence, that, during this period, the appellant communicated to the respondents its intention as to whether or not the two-year contracts would be renewed or terminated.

The first meeting on record occurred in the appellant's board room on 29 June 2015, notably after the period upon which the respondents base their claim for tacit relocation. This is followed by the appellant's letter of 7 July 2015 indicating the collapse of the alleged negotiations.

Given this, the court a quo's finding cannot be assailed.

Its decision was based on a correct application of the principle of tacit relocation as enunciated in Gumbo v Air Zimbabwe (Pvt) Ltd 2000 (2) ZLR 126.

The fact of the matter is, that, for the two month period, that is 1 May 2015 to 22 June 2015, the conduct of the parties reflects that they intended to be bound by the expired contracts.

Those contracts were therefore tacitly relocated and were to expire after two years - just like the expired contracts.

In the circumstances of this case, a mere attempt to negotiate a new contract does not operate to vary an existing binding contract. The appellant's new offer thus amounted to an attempt to unilaterally vary the respondents' relocated contracts.

SC13-21 : MOSES MAWIRE vs RIO ZIM LIMITED (PRIVATE) LIMITED
Ruled By: GOWORA JA, PATEL JA and MAVANGIRA JA

After hearing the parties on 9 March 2018, the court was of the unanimous view that the appeal was devoid of any merit and accordingly ordered as follows:“The appeal be and is hereby dismissed with costs. Full reasons will be available in due course.”The following are the reasons:BACKGROUND FACTSThe appellant ...

After hearing the parties on 9 March 2018, the court was of the unanimous view that the appeal was devoid of any merit and accordingly ordered as follows:

“The appeal be and is hereby dismissed with costs. Full reasons will be available in due course.”

The following are the reasons:

BACKGROUND FACTS

The appellant was employed by the respondent as a Human Resources Superintendent on 1 November 2006. He was based at the Head Office in Harare. In February 2009 he was transferred to Renco Mine. His contract of employment provided for, amongst other things, locality allowance, leave bonus, and a company vehicle which was to be fuelled and maintained by the company.

In February 2009, as happened nationwide, the respondent shifted from the use of the Zimbabwean dollar to the United States dollar when the Zimbabwean dollar became moribund.

On 19 February 2009, the respondent wrote a letter to the appellant notifying him, that, following the adoption of the United States dollar, his salary would be US$4,147=43 per month.

The letter was silent on allowances.

On 21 March 2009, through an office memorandum, all the respondent's employees were notified of the changes in their salaries and allowances. The memorandum provided, that, the respondent had implemented salary scales based on regional 'SADC' rates for employees in all grades. Consequently, transport and meals allowances, together with leave bonus payable when employees proceeded on annual leave, were to fall away with effect from 1 March 2009 for all employees in Grade 10 and above. Transport and meals allowances were also removed for employees in Grade 10 and above.

The respondent further indicated that the employees would be kept abreast of further changes.

Following the adoption of the United States dollar, the appellant was being paid a globular salary without any allowances. The respondent did not provide the appellant with the motor vehicle, but, rather, supplied him with fuel and paid for the maintenance of his personal car.

This was regardless of the fact that the respondent's contract of employment stated that he was entitled to allowances and a motor vehicle maintained by the company.

In June 2014, the appellant raised a complaint of unfair labour practice with the Labour Officer. He demanded payment of the following:

1. Outstanding locality allowance for the period from February 2009, when he was transferred to Renco Mine, up to the time when he made the complaint in June 2014;

2. Leave bonus from 2009 to 2013; and

3. Mileage for use of his personal motor vehicle from 1 March 2007 up to the time of the making of the claim.

At conciliation, the parties failed to reach a settlement and the matter was referred to arbitration.

Before the arbitrator, the appellant argued, that, he was entitled to payment of outstanding locality allowances and leave bonus and to a motor vehicle coupled with its maintenance and repairs. The appellant had been using his personal vehicle for the respondent's business as the respondent had failed to provide the motor vehicle. For this reason, he claimed compensation on the mileage of his vehicle on the same basis as if it was on hire to the respondent.

The appellant also contended, that, the respondent had unilaterally varied the contents of the contract of employment.

The respondent raised a preliminary point.

It was to the effect, that, in the event that the appellant's contract was found to have been violated, the appellant's claims had prescribed in terms of section 94(1)(b) of the Labour Act [Chapter 28:01] (herein after referred to as 'the Act').

The respondent also argued, that, none of the respondent's contractual benefits were being violated.

The arbitrator dismissed the preliminary point.

In his award, he made the finding, that, all the claims made by the appellant had been sustained. He thus ordered the respondent to pay the sum of US$197,563 for compensation as had been claimed by the appellant. This was to be paid in two equal monthly instalments of US$98,781=50 with the final payment being paid not later than 1 October 2014.

APPEAL TO THE LABOUR COURT

Dissatisfied with the arbitrator's ruling and award, the respondent appealed to the Labour Court.

A number of grounds of appeal were raised. The court a quo summarized them to amount to:

1. That prescription applied to the claims and those claims that were older than two years had prescribed in terms of section 94(2) of the Labour Act [Chapter 28:01].

2. That the contract of employment was varied by the office memorandum, and by conduct, and that the arbitrator therefore erred at law in his interpretation of the facts.

3. That, there was no prejudice to the employee's remuneration as occasioned by the new method of payment.

4. That, the arbitrator had grossly misdirected himself in the relevant findings of fact so much as to amount to a misdirection at law.

After hearing the parties, the Labour Court allowed the appeal and set aside the arbitral award.

The Labour Court accepted the argument presented by the respondent. It came to the conclusion, that, once an infraction has occurred, and becomes known by the affected party, it prescribes if it is not actioned within two years from the date when the dispute first arose.

The court ruled, that, all the outstanding claims that were more than two years when the claim was instituted by the appellant had prescribed.

On whether or not there was unilateral variation of the contract, the Labour Court found, that, the contract had been unilaterally varied by the respondent.

In its judgment, the Labour Court stated, that, although there was unilateral variation of the contract by the respondent - for five years the appellant received his salary without any complaint. By so doing, the appellant, who was a human resources practitioner, had demonstrated, by conduct, that he accepted the new salary structures.

As a result, the allowances claimed by the respondent were no longer claimable as there was now a new contract in existence.

The Labour Court further found no merit in the appellant's claim which was based on the contention that he had been hiring out his personal motor vehicle to the respondent.

The court a quo found, that, there was no standing agreement between the parties to that effect, and, therefore, to say that the appellant had hired out his vehicle to the respondent would amount to overstretching the contract.

THIS APPEAL

The appellant was aggrieved by the judgment of the court a quo and appealed against its decision on the following grounds:

1. The Labour Court fundamentally misdirected itself on a question of law in failing to find that the claims of the Appellant had not prescribed, they being claims arising from unfair labour practices of a continuing nature covered by section 94(2) of the Labour Act.

2. The Labour Court further erred on a question of law in finding that the contract of employment between the Appellant and the Respondent had been varied such that the appellant would not be paid the claimed allowances.

3. The Labour Court further erred in law in failing to award the Appellant compensation in respect of the usage of his motor vehicle for the business purposes of the respondent.

At the beginning of the hearing, counsel for the appellant indicated that he was abandoning the third ground of appeal which related to the issue of the motor vehicle.

Notably, this ground formed the bulk of the appellant's claim. He therefore restricted his argument to the first two grounds which relate to the claims for outstanding locality allowance and leave bonus.

SUBMISSIONS ON APPEAL

Counsel for the appellant's contention was that the Labour Court erred in ruling that the appellant's claims had prescribed and he placed reliance on section 94(2) of the Labour Act.

He argued, that, the unfair labour practice commenced in March 2009 and continued until the matter was brought to the attention of the Labour Officer and to the Labour Court.

The gravamen of his argument is that the dispute was of a continuous nature, and, therefore, on the basis of section 94(2) of the Labour Act, no prescription could run.

He further contended, that, the appellant's rights, conferred by the Labour Act, were “frozen” during the period of his employment. Therefore, any infractions of these rights could only be actioned after termination of the employment relationship.

On variation of the contract of employment, the contention was that the introduction and operation of multi-currencies, in February 2009, did not operate to vary the contracts of employment in any way.

The respondent remained indebted in respect of the appellant's allowances.

Secondly, the memorandum issued in March 2009 was a unilateral act by one party to a contract of employment and did not have the effect of validly taking away vested rights.

Counsel for the respondent submitted, that, the rights accorded by the Labour Act are not “frozen” as there are remedies provided by the Labour Act for any infraction of the rights. He described the appellant's contention as “judicial heresy.”

Counsel for the respondent further submitted that section 94 of the Labour Act must be read together with section 8 of the same Act.

Section 94 of the Labour Act limits itself to unfair labour practices and these the appellant had not been able to identify. For this reason, he submitted, the protection of section 94 of the Labour Act was not available to the appellant.

The kind of infractions that the appellant complained about are infractions that gave him a full and competent cause of action within a period of two years. He submitted that the appellant's suggestion, that the two year period must be counted starting from after the end of the employment relationship, is not worthy of any notice due to its frivolity.

ISSUES FOR DETERMINATION

The issues for determination by this court are:

1....,.

2. Whether or not the contract of employment had been varied....,.

Whether or not the contract of employment was varied

The question must of necessity, therefore, be answered whether or not the contract was in fact varied unilaterally.

The appellant submitted, that, the change in currency, following the adoption of the use of the United States dollars, did not alter the contract of employment. He further contended that he was still entitled to the car loan, as per the contract of employment, which was operative during the time when the Zimbabwean dollar was in use.

Counsel for the respondent, on the other hand, submitted that the local dollar contract could not have had its terms transposed into the US Dollar period. It was his contention, that, in order to successfully advance the contention that there had been variation of the contract, the appellant had to first identify the contract expressed in United States Dollars, set out its terms and then show how it was unlawfully varied by the respondent.

As already mentioned earlier, the respondent issued out an internal memorandum, on 21 March 2009, following the adoption of the United States dollar currency.

This memorandum had the effect of altering the appellant's contract of employment.

Following the memorandum, the appellant, who was the Human Resources Officer, accepted his new salary in terms of the memorandum. He was receiving a salary in terms of the memorandum, and, for the five years, he never raised any complaint nor did he challenge the new salary scale.

It is trite, that, consent can either be express or implied.

In the case of Smith v Hughes LR 6 QB 597…, it was stated that:

“If, whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party, upon that belief, enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party's terms.”

For five years, the respondent accepted a salary, in terms of a memorandum which had no provision for any allowances. By such conduct, he accepted the variation of the terms of his contract of employment.

If he genuinely felt that the memorandum breached his contractual rights, he ought not to have accepted the salaries and ought to have mounted his challenge at the pertinent time or within the permitted period.

In the absence of any challenge to the variation of the contract, it is clear, that, after variation of the contract of employment, there was acquiescence by the appellant.

If there was acceptance of the variation, as there was, there was no claim to be prescribed.

It follows, that, by his conduct, the appellant impliedly consented to the variation of his contract.

In such circumstances, he could not claim any benefits flowing out of the contract that had been varied.

The court a quo thus correctly found, that, the contract of employment was varied with the consent of the appellant, and, therefore, the allowances claimed by the appellant were no longer claimable under the contract ushered in by the memorandum.

It is for these reasons that we found that the appeal had no merit and proceeded to grant the order that we did as recorded at the beginning of this judgment.

HH965-15 : CONPLANT TECHNOLOGY (PVT) LTD vs WENTSPRING INVESTMENTS (PVT) LTD
Ruled By: MAFUSIRE J

The trial in this matter was held up by a preliminary argument on a special plea. The central question was whether or not the trial should be stayed and the matter referred to arbitration in terms of an arbitration clause in the contract between the parties upon which the plaintiff sued the defendant.

I reserved judgment. This now is my judgment.

The plaintiff's claim was for payment of a sum of money in respect of labour and materials supplied to, for and on behalf of the defendant, at the defendant's special instance and request. The allegations were that following a written contract between the parties, the plaintiff had been contracted, by the defendant, to install a water pump station, to procure and install water pumps thereat, and to connect them to an existing water reticulation system. The plaintiff claimed it had done the job in accordance with the contract but that the defendant had neglected to pay.

The cost of labour and material amounted to US$32,960. The plaintiff also said it was due a commission in the sum of US$3,296. It issued summons for payment of these two amounts.

The defendant filed a joint special plea and plea on the merits.

In the special plea, it said there was an arbitration clause in the agreement that obliged the parties to settle any dispute between them by arbitration.

On the merits, it said there was a dispute.

In essence, and in summary, the defendant averred, that, contrary to its obligations in terms of the contract, the plaintiff had circumvented the local authority in the procurement of the water pumps; that despite holding itself out as the expert in the field, the plaintiff had procured the wrong pumps; that the pumps had been rejected by the local authority; and, that owing to such breach by the plaintiff, the defendant had cancelled the contract.

The plaintiff's responses to the defendant's special plea on arbitration were fourfold....,.

(i) The first ground relied upon by the plaintiff to resist a referral to arbitration was that the defendant could not be heard to want to rely on, and benefit from, the arbitration clause in the contract when it had itself ignored it prior to its purported cancellation of the contract....,.

To the plaintiff's first ground, that, the defendant had itself breached the arbitration clause by purporting to cancel the agreement without reference to arbitration, the defendant's response was that what would be referred to arbitration was a “dispute”. Cancellation was not a dispute. The defendant had had no cause to refer to arbitration....,.

[a] Arbitration clause in a contract

Article 8(1) of the Model Law, the First Schedule to the Arbitration Act [Chapter 7:15], states:

“A court of law before which proceedings are brought in a matter which is the subject of an arbitration agreement, shall, if a party so requests, not later than when submitting his first statement on the substance of the dispute, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative, or incapable of being performed.”

In my view, and in my own words, it is now settled, that, a clause in a contract to refer a dispute to arbitration is binding on the parties. A party is not at liberty to resile from that clause any time he may wish to do so.

In terms of Article 8 of the Model Law, the First Schedule of the Arbitration Act, where a party makes a timeous request for referral to arbitration, the court has to stay the matter and refer the dispute to arbitration unless the agreement is null and void, or is inoperative, or is incapable of being performed: see Zimbabwe Broadcasting Corporation v Flame Lily Broadcasting (Pvt) Ltd 1999 (2) ZLR 448 (H); Waste Management Services v City of Harare 2000 [1] ZLR 172 (H); and Capital Alliance (Pvt) Ltd v Renaissance Merchant Bank Ltd & Ors 2006 (2) ZLR 232 (H).

Thus, the one condition in Article 8 of the Model Law, the First Schedule to the Arbitration Act for referral is that there must exist a dispute between the parties.

In PTA Bank v Elanne (Pvt) Ltd & Ors 2000 (1) ZLR 156 (H), where the defendant had merely asked for further particulars, which had been furnished, but had not said anything else about the existence or otherwise of a dispute, except in counsel's heads of argument, the court declined the request for referral. It said that, among other things, since no dispute had been established, there was nothing to refer to arbitration.

In Zimbabwe Broadcasting Corporation v Flame Lily Broadcasting (Pvt) Ltd 1999 (2) ZLR 448 (H) the court initially declined to refer the matter to arbitration where the defendant had merely made the request before pleading to the merits. It was only upon the defendant's pleading to the merits that a dispute became apparent, thereby leading the court to exercise its discretion in favour of staying the proceedings and referring the dispute to arbitration.

In casu, the defendant met the one condition referred to above. It has pleaded on the merits.

There has emerged a clear dispute. It is this: is the plaintiff entitled to payment? Did it breach the contract by circumventing the local authorities? Did it supply the wrong pumps?

Another condition in Article 8 of the Arbitration Act, for referral to arbitration, is that the request for such referral must be made timeously. The Article says it must be made “…, not later than when submitting…, [the]…, first statement on the substance of the dispute.”

The defendant filed a special plea, in which the request of referral was made, and, in the same document, pleaded over to the merits, setting out the dispute.

Therefore, this other condition was also met.

Yet another condition in Article 8 of the Arbitration Act, for referral to arbitration, is that the arbitration agreement must not be null and void, or inoperative, or incapable of being performed.

It was common cause that this was not the case in this matter.

It did not form part of the plaintiff's grounds for resisting referral.

At any rate, the question whether the dispute between the parties to a contract falls within the ambit of an arbitration clause is primarily a question of interpretation of the agreement, in particular, the arbitration clause itself: see Independence Mining (Pvt) Ltd v Fawcett Security Operations (Pvt) Ltd 1991 (1) ZLR 268 (H); PTA Bank v Elanne (Pvt) Ltd & Ors 2000 (1) ZLR 156 (H); and Zimbabwe Broadcasting Corporation v Flame Lily Broadcasting (Pvt) Ltd 1999 (2) ZLR 448 (H).

Furthermore, once it is established that the dispute falls within the ambit of the arbitration clause, the onus to show why the court proceedings should not be stayed rests on the party challenging the reference to arbitration, i.e., the plaintiff in this case: see Capital Alliance (Pvt) Ltd v Renaissance Merchant Bank Ltd & Ors 2006 (2) ZLR 232 (H)....,.

[b] The defendant itself breached the arbitration clause when it purported to cancel the agreement

I understood counsel's argument on the point to be, that, if the defendant felt that the plaintiff had been in breach of the contract, it ought to have referred the matter to arbitration instead of just taking it upon itself to cancel. The plaintiff, having decided to issue summons out of this court, without first having gone for arbitration, it hardly lay in the mouth of the defendant to cry foul.

Even though it did not exactly put it that way, the plaintiff was probably saying what is good for the goose should be good for the gander, also, or, an eye for an eye.

But, this hardly constitutes sound legal argument. Two wrongs do not make a right.

At any rate, having accepted the existence of the arbitration clause, the onus lay on the plaintiff, as the party resisting arbitration, to show why the matter should not be stayed and referred to arbitration. The plaintiff could hardly shift that onus by merely pointing to an alleged earlier breach by the defendant.

Since the plaintiff did not say exactly that, was it then implying or insinuating, that, the parties had, or should be deemed, by their conduct, to have tacitly abandoned arbitration in favour of a direct approach to a court of law?

In Bitumat Ltd v Multicom Ltd 2000 (1) ZLR 637 (H), this court (per SMITH J) said this…,;

“It may well be that at some stage after the dispute has arisen, because of changed circumstances, the parties concerned agree that the matter should be determined by a court of law, rather than by arbitration in terms of the agreement in question.

In these circumstances, the decision of the parties, to abandon the arbitration clause in their agreement, must be specific and clearly evidenced. It cannot be implied by the conduct of, or correspondence between the parties – it must be explicit.

After all, if the arbitration clause is contained in a written agreement, then the decision to change the agreement must either be in writing or else so clearly evidenced by the conduct of the parties that there is no room for doubt.”

It would have been far-fetched for the plaintiff to have even remotely suggested or implied that the parties had tacitly agreed to abandon arbitration in favour of a direct approach to this court.

There was nothing of the sort.

The defendant simply decided that the plaintiff had breached the contract. It did not perceive a dispute. The contract provided for cancellation by the employer, i.e. the defendant, on the happening of certain events. The defendant had cancelled.

That is not to say it was right.

But, if the plaintiff felt that it was not right, and it wanted the matter adjudicated upon, then, it had to follow the dispute resolution mechanism provided for in the contract. This entailed the dispute being referred for adjudication in the first place, and then followed by arbitration if adjudication did not resolve it.

So, on this basis, the plaintiff's first ground for resisting arbitration cannot succeed.

View Appeal
HH601-14 : SHI JINWU vs BIG VALLEY MASTERS (PRIVATE) LIMITED and PHILLIMON MUBATA
Ruled By: CHIGUMBA J

Contracts are made by agreement. They can be unmade by agreement, but, they cannot be unilaterally varied or discharged: see Strachan v Lloyd Levy 1923 AD 670, 671.

Appealed
SC82-21 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES LIMITED vs ZIMBABWE REVENUE AUTHORITY and OTHERS
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE AJA

This is an appeal against the judgment of the High Court sitting at Masvingo, delivered on 24 June 2020, which dismissed with costs the application made by the two appellants for a declaratory order and an interdict.FACTUAL BACKGROUNDThe two appellants are sugar-producing giants in the Lowveld while the first respondent ...

FACTUAL BACKGROUND

The two appellants are sugar-producing giants in the Lowveld while the first respondent (Zimbabwe Revenue Authority) is the statutory body charged with revenue collection in Zimbabwe. The remainder of the respondents are either sugar cane farmers or associations representing such farmers (Zimbabwe Sugarcane Development Association, Zimbabwe Cane Farmers Association, Mkwasine Sugarcane Farmers Trust, Commercial Sugarcane Farmers Association of Zimbabwe, Hippo Valley Productive Farmers Association, Zimbabwe Sugarcane Development Association Royal Trust, Chipiwa Mpapa Mill Group, Chiredzi Productive Cane Growers, Farai Dumo Augustine Musikavanhu and Roy Bhila).

The respondents will be referred to in this judgment, for convenience, as Zimbabwe Revenue Authority and the farmers respectively.

The appellants and the farmers entered into two types of agreements, either a “Cane Milling Agreement” or a “Cane Purchase Agreement” in terms of which the appellants would either provide milling services to the farmers and market their sugar and molasses or outrightly purchase the sugar cane.

The dispute which arose between the parties did not involve the outright purchase and sale of sugar cane. As such this judgment does not deal with that scenario at all. The judgment concerns itself with the cane milling agreements entered into between the parties.

In terms of the cane milling agreements, the charge for milling and marketing services, payable by the farmers to the appellants, was calculated in terms of a pre-determined ratio referred to as the “Division of Proceeds” (DoP) ratio. It was fixed at 23 percent of the proceeds the farmers would get; meaning that, the appellants would retain 23 percent of the proceeds while remitting the balance of 77 percent to the farmers.

Regrettably, in fixing the milling and marketing charge, the appellants did not include Value Added Tax (VAT) as required by law. It follows, that, no Value Added Tax was paid by the appellants to the Zimbabwe Revenue Authority in that regard.

It was in the process of auditing the appellants Value Added Tax (VAT) assessments for the period 2009 to 2017 that the Zimbabwe Revenue Authority decided that the milling and marketing charges of 23 percent of the proceeds levied by the appellants against the farmers attracted VAT.

The Zimbabwe Revenue Authority proceeded to issue assessments of value added tax (VAT) for those years and demanded payment of same from the appellants. These assessments related to the past supplies where the appellants ought to have, but failed, to collect and remit VAT to the Zimbabwe Revenue Authority.

The appellants objected to the assessments which objections were all disallowed by the Zimbabwe Revenue Authority. The appellants appealed to the Fiscal Appeals Court but paid the assessed value added tax (VAT) to the Zimbabwe Revenue Authority notwithstanding.

An appeal does not exonerate a tax payer from paying the assessed tax.

After effecting payments to the Zimbabwe Revenue Authority, the appellants sought to recover such value added tax (VAT) from the farmers on the basis that they were obliged to charge and collect the VAT from the consumers of the service, the farmers, but had not done so.

The appellants were of the view, that, it was only fair and reasonable that the farmers should re-imburse them of the value added tax (VAT) paid by them to the Zimbabwe Revenue Authority.

There being no convergence between the farmers, who had obtained advice from the Zimbabwe Revenue Authority, that, the 23 percent Division of Proceeds ratio was inclusive of value added tax (VAT), and the appellants, the latter filed an application in the court a quo.

In their application, the appellants sought declaratory relief that they were legally entitled to continue charging and collecting value added tax (VAT) from the farmers - over and above the 23 percent milling charge.

The appellants also sought to be reimbursed the monies they paid to the Zimbabwe Revenue Authority on past assessments.

In addition, they accused the Zimbabwe Revenue Authority of interfering with contractual issues between them and the farmers by rendering advice to the farmers on the value added tax (VAT) dispute.

Accordingly, the appellants sought an order interdicting the Zimbabwe Revenue Authority from what they called “gratuitously interfering in pricing and contractual issues” between them and the farmers.

The application was opposed by the Zimbabwe Revenue Authority and most of the respondents.

DECISION A QUO

It was the view of the court a quo, that, the entire dispute revolved around the interpretation of section 69 and section 72 of the Value Added Tax Act [Chapter 23:12].

Regarding the past supplies of sugar cane to the appellants, the court a quo found, that, the literal meaning of section 69 of the Value Added Tax Act suggests, that, it is irrelevant whether the registered operator has charged VAT or not. If the price does not reflect the tax component, section 69 of the Value Added Tax Act operates such that there is a presumption that a price not reflecting VAT included that tax.

It was the finding of the court a quo, that, the section serves to “estop” a registered operator, who has not reflected value added tax (VAT) on the price, from denying that the price includes that tax.

It also found, that, section 69 of the Value Added Tax Act precludes such registered operator from subsequently claiming VAT not reflected on the price.

In the court a quo's view, permitting the appellants to recoup value added tax (VAT) in retrospect would render nugatory the deeming provision of section 69 of the Value Added Tax Act as the deeming provision cannot be interpreted to mean different things to two different people.

Regarding the claim for value added tax (VAT) on present and future supplies of sugarcane, which the contracts of the parties are still silent on, the court a quo took the view, that, it was up to the parties to re-negotiate or clarify the terms of their contracts in order to plug the existing lacunae.

If they do not, then, section 69 of the Value Added Tax Act will continue to apply.

The court a quo was not persuaded that a case was made for an interdict against the first respondent.

It recognised, that, the appellants had made a formal request to the first respondent to intervene and educate the farmers on the tax implications of their agreement. They could not, thereafter, cry foul after such intervention.

In addition, the court a quo found no evidence of the first respondent's interference with the pricing issues between the appellants and the farmers.

On the question of costs, the court a quo found no basis for departing from the general rule, that, costs follow the result. It dismissed the application with costs granted in favour of only those respondents who participated in the suit.

The appellants were aggrieved. They noted this appeal to this Court on the following grounds;

GROUNDS OF APPEAL

1. The learned judge of the court a quo erred and misdirected himself in finding that section 69 of the Value Added Tax Act [Chapter 23:12] operated to preclude the appellants from recovering value added tax (VAT) for past supplies on an alleged milling service which the first respondent considered to have been rendered to farmers.

2. Further, the court a quo erred and misdirected itself in failing to pronounce, definitively, on the appellants right and entitlement to charge, levy, and collect value added tax (VAT), and the farmers respective obligation to pay same, in addition to the value of the alleged milling service, with respect to current and future supplies pursuant to the first respondent's decision to impose tax.

3. The learned Judge of the court a quo erred and misdirected himself in failing to find, that, the letter by the first respondent to the farmers, with respect to the farmers tax obligations, strayed upon purely contractual matters which it was not competent for the first respondent to prescribe to parties.

4. The court a quo erred in awarding costs against the appellants, and in favour of the respondents in general, and, at any rate, most especially as it relates to the second (Zimbabwe Sugar Cane Development Association), fifth (Commercial Sugar Cane Farmers Association of Zimbabwe), seventh (Zimbabwe Sugar Cane Development Association Royal Trust), eighth (Chipiwa Mpapa Mill Group), and tenth (Farai Dumo Augustine Musikavanhu) respondents in particular.

ISSUES

The grounds of appeal may be four, but they speak to essentially two narrow issues for determination in this appeal. They are:

1. Whether or not the court a quo erred in refusing to grant the declaratur and the interdict.

2. Whether or not the court a quo erred in granting costs against the appellants.

SUBMISSIONS ON APPEAL

Counsel for the appellants anchored his arguments on the legal effects of the decision taken by the first respondent, contained in its letter dated 9 September 2019. Following meetings held by the parties, the first respondent determined that:

“1. The VAT Act, under section 6, provides that VAT shall be charged and levied where a service is provided. Facts at hand indicated that millers provide milling services to the farmers and they retain 23% from the sugar proceeds…,.

Given the above legislative requirements, VAT is therefore applicable on the milling fees, and, as discussed in the meeting, VAT is recovered as depicted in the following scenario…,.”

It was submitted, that, the moment the first respondent made the decision to commence recovering value added tax (VAT) on milling services, when, prior to that, it had not done so, the provisions of section 72(1) of the Value Added Tax Act [Chapter 23:12] were triggered.

The section provides:

“(1) Whenever the value added tax is imposed or increased in respect of any supply of goods or services in relation to which any agreement was entered into by the acceptance of an offer made before the tax was imposed or increased, as the case may be, the registered operator may, unless agreed to the contrary in any agreement in writing and notwithstanding anything to the contrary contained in any law, recover from the recipient, as an addition to the amounts payable by the recipient to the registered operator, a sum equal to any amount payable by the registered operator by way of the said tax on increase, as the case may be, and any amount so recoverable by the registered operator shall, whether it is recovered or not, be accounted for by the registered operator under this Act as part of the consideration in respect of the said supply.”

To the extent that value added tax (VAT) was only imposed on the milling fees, by letter quoted above, so the argument goes, when it had not been claimed previously, the appellants were entitled to recover it from the recipients of the milling services by virtue of that provision.

It was submitted, further, that, the deeming provisions of section 69 of the Value Added Tax Act do not preclude the appellants from recovering the value added tax (VAT) paid to the first respondent. This is so because the section is a shield in the hands of the revenue collector. It is an administrative tool for the facilitation of easy collection of taxes without disruptive disputes with registered operators.

In counsel for the appellants view, section 69 of the Value Added Tax Act cannot be used to estop the operator from recovering value added tax (VAT) paid to the collector.

Per contra, counsel for the first respondent submitted, that, given that the contracts for milling services did not reflect value added tax (VAT), section 69 of the of the Value Added Tax Act applies. To that extent, in respect of past supplies, the contract price is deemed to be inclusive of VAT.

It was submitted further, that, in the absence of an agreement with the farmers to vary the contract price, even by the application of basic principles of Contract Law, the appellants could not unilaterally vary the price by levying value added tax (VAT).

On the effects of section 72 of the Value Added Tax Act, it was submitted, that, the section may be regarded as a law–changing provision. In the event that the law changes to include value added tax (VAT), where it was not applicable, so it was argued, or to increase the applicable VAT, then, by dint of section 72 of the Value Added Tax Act, the agreement is varied accordingly.

The net effect of those submissions is that the section has no application where value added tax (VAT) was excluded in the agreement when it should have been included.

Regarding the alleged interference with contractual rights and obligations by the first respondent, counsel for the first respondent submitted, that, the advice rendered by the first respondent was not only at the invitation of the appellants themselves but also in fulfilment of a statutory obligation. The first respondent is obliged to educate taxpayers on their tax obligations.

The requirements for an interdict were not met.

Counsel for the rest of the respondents in attendance, in chorus, associated themselves with submissions made on behalf of the first respondent.

ANALYSIS

In as much as the record of appeal and the submissions made by counsel are heavy, what has to be decided has become very narrow indeed. The entire appeal turns on the effect of the deeming provision in section 69 of the Value Added Tax Act [Chapter 23:12].

In particular, whether it operates to prevent a registered operator who has fallen foul of the law, by not reflecting value added tax (VAT) on the price of goods and services, from later recouping the VAT demanded by the first respondent from the consumer.

A fortiori, whether section 72 of the Value Added Tax Act applies to a situation where the registered operator has excluded or not reflected value added tax (VAT) on the price of goods and services even though the law required such registered operator to levy and reflect VAT on the price.

Section 72 of the Value Added Tax Act varies the contract price by the margin of value added tax (VAT) imposed or increased subsequent to the contract being concluded.

I agree with counsel for the first respondent, that, it is a law-changing provision as it clearly relates to the imposition of a new tax or the increase of an existing tax.

It is common cause that the burden of paying value added tax (VAT) lies with the consumer of goods and services.

The system of value added tax (VAT) collection existing in this jurisdiction was succinctly summarised by the court in Zimbabwe Revenue Authority v Packers International (Private) Limited 2016 (2) ZLR 84 (S)…, thus:

“The system of collection of VAT, as embodied in the VAT Act, involves the imposition of tax at each step along the chain of manufacture of goods or the provision of services subject to VAT.

Consequently, every registered operator is required, in terms of section 28 of the VAT Act, to submit returns to the Commissioner of Taxes ('the Commissioner') every month, calculate the VAT due on the return, and make payment of such VAT.

Due to the sheer volume and complexity of the VAT collection system, ZIMRA lacks the capacity and manpower to effectively monitor each and every transaction liable to VAT, and, as a consequence, it is heavily reliant on the self-assessment process by registered operators.

However, in order to ensure that operators comply with the requirements to render returns and collect VAT, ZIMRA conducts periodic investigations as well as audits.”

In terms of the value added tax (VAT) collection system which is in place, while the burden to pay resides with the consumer of goods and services, the registered operator bears the burden of collecting VAT and remitting it to the revenue collector.

Where the registered operator has omitted, as required by section 6(1) of the Value Added Tax Act, to include value added tax (VAT) on the price, section 69(1) of the Value Added Tax Act is activated to deem VAT to be included in whatever price is pegged by the operator.

Section 6(1) of the Value Added Tax Act is very clear in its wording, it provides:

“Subject to this Act, there shall be charged, levied, and collected, for the benefit of the Consolidated Revenue Fund, a tax, at such rate as may be fixed by the Charging Act, on the value of -

(a) The supply, by any registered operator, of goods or services supplied by him on or after the 1st January 2004, in the course or furtherance of any trade carried on by him:”

What it means is, that, by failing to charge, levy, and collect value added tax (VAT) from the consumers of their milling services, the appellants breached, to their peril, the peremptory provisions of section 6(1) of the Value Added Tax Act.

By operation of section 69(1) of the Value Added Tax Act, the 23 percent charge for milling services was taken to include VAT for all intents and purposes.

The court a quo cannot be faulted for finding, that, whether by inadvertence, oversight, or misinterpretation of the nature of the contract, the consequence of the failure to specifically include value added tax (VAT) are that it is deemed included in the milling price.

The deeming provision cannot be applied differently on the registered operator and the consumer.

As regards the question whether section 72(1) of the Value Added Tax Act rescues the appellants from the consequences of their failure to comply with the peremptory provisions of section 6(1)(a) of the Value Added Tax Act, it is clearly a matter of statutory interpretation.

In my view, the simple grammatical meaning of the words “whenever the value added tax is imposed or increased in respect of any supply of goods and services…,” is that, in the first instance, there would be no tax on such supply and the law steps in to impose a tax.

In the second instance, the law would have imposed a tax on the supply but it moves in to increase the value of tax.

In both instances, the parties would have contracted in certain terms before the law changes.

Upon change of the law, section 72(1) of the Value Added Tax Act comes in to vary the terms of a pre-existing contract to either impose or increase the tax.

I do not agree with counsel for the appellants submission, that, upon conducting an audit which revealed that the appellants were rendering a taxable milling service while not levying and collecting tax, the first respondent imposed a tax.

In my view, the law had already imposed the tax, but the appellants were committing an infraction by not reflecting it.

Again, the court a quo was correct in concluding, that, there was no imposition of a “new tax” nor an increase of chargeable tax.

Accordingly, section 72(1) of the Value Added Tax Act has no application and is certainly not available to the appellants.

Counsel for the appellants did not prosecute the issue of the interdict sought against the first respondent with any degree of enthusiasm.

It is not without reason that this is so:

(a) Firstly, evidence placed before the court a quo shows, that, the appellants invited the first respondent to intervene and educate the farmers on the tax implications of their contracts with the appellants. That the first respondent interpreted their contracts in a manner not favourable to the appellants can scarcely found a cause of action.

(b) Secondly, and more importantly, the requirements for the grant of an interdict were not met.

I can only advert to the fact that the court a quo made factual findings relating to the failure by the appellants to prove that the first respondent had interfered with the contractual issues.

It also made a finding that the advice rendered by the first respondent was only confined to value added tax (VAT) matters falling within the statutory province of the first respondent as a revenue collector.

Surely, one cannot be interdicted from carrying out a lawful duty.

The court a quo also made a finding that the use of the term “gratuitously interfering” was too imprecise and unenforceable.

On appeal, the appellants failed to set out a basis for interference with those findings.

It is trite, that, it is only where the factual findings of the lower court are clearly irrational, to an extent that no sensible court seized with the same facts could have reached such a conclusion, that the Appellate Court will interfere: see Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S); Shuro v Chiuraise SC20-19.

No such threshold was attained in the present case. As such, this Court cannot interfere.

It remains for me to deal with the question of costs.

The court a quo granted costs against the appellants in favour of those respondents who participated in the proceedings.

It premised its decision on the general rule that costs follow the result.

Its attention was not drawn to the widely held principle, in tax cases, that, the High Court or the Special Court, is loathe to make an order as to costs save where the claim is held to be unreasonable or the grounds of appeal are frivolous: see section 65(12) of the Income Tax Act [Chapter 23:06].

On appeal, counsel, again, did not address that issue at all.

It occurs to me, that, the court a quo was incapacitated in respect of costs by the failure to bring its attention to the prevailing jurisprudence on such costs. As a result, it misdirected itself, a misdirection entitling this Court to interfere with its exercise of discretion.

There is nothing in this case suggesting that the appellants case was unreasonable or that it was frivolous.

Quite to the contrary, they raised quite pertinent issues which required the court to embark on a detailed interpretation of the law. The same applies to the appeal.

In my view, this is a classic case in which the costs, both a quo and in this Court, should not be awarded to any party.

In the result, it be and is hereby ordered as follows:

1. The appeal, in respect of grounds of appeal 2.1, 2.2, and 2.3 is dismissed with each party to bear its own costs.

2. The appeal, in respect of ground of appeal 2.4, is upheld.

3. The judgment of the court a quo is amended by the deletion of paragraph 5 and its substitution with the following:

“5. Each party shall bear its own costs.”

View Appeal
HMA28-20 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES vs ZIMBABWE REVENUE AUTHORITY and OTHERS
Ruled By: ZISENGWE J

The parties in this application are embroiled in a bitter dispute over the implications of their failure to specifically include Value Added Tax (abbreviated herein as “VAT”) matters in agreements for the milling of sugarcane.

The applicants are both companies duly incorporated in terms of the laws of Zimbabwe whose names over the years have become synonymous with sugar and sugar cane production in Zimbabwe. They grow, source, and mill sugar-cane and market its products. They carry on this agro-based business in and around the Lowveld towns of Triangle and Chiredzi.

The first respondent is the Zimbabwe Revenue Authority (ZIMRA): a statutory body whose chief mandate is to assess, collect, and enforce the payment of all revenues on behalf of the State. It is established in terms of the Revenue Authority Act [Chapter 23:11].

Save for the 10th (Farai Dumo Augustine Musikavanhu) and 11th (Roy Bhila), the rest of the respondents are organisations representing the interests of sugarcane farmers in the Lowveld (Zimbabwe Sugar Cane Development Association, Zimbabwe Cane Farmers Association, Mkwasine Sugar Cane Farmers Trust, Commercial Sugar Cane Farmers Association of Zimbabwe, Hippo Valley Productive Farmers Association, Zimbabwe Sugar Cane Development Association Royal Trust, Chipiwa Mpapa Mill Group and Chiredzi Productive Cane Growers Association).

The 10th (Farai Dumo Augustine Musikavanhu) and 11th (Roy Bhila) respondents are individual sugar cane farmers.

They were probably singled out on account of the positions they hold as Members of Parliament for the Chiredzi South and Chiredzi North constituencies respectively over and above their roles as sugar-cane farmers. They also occupy and serve in specialised Parliamentary capacities.

BACKGROUND

Solely for purposes of convenience and brevity, the second to eleventh respondents (Zimbabwe Sugar Cane Development Association, Zimbabwe Cane Farmers Association, Mkwasine Sugarcane Farmers Trust, Commercial Sugarcane Farmers Association of Zimbabwe, Hippo Valley Productive Farmers Association, Zimbabwe Sugarcane Development Association Royal Trust, Chipiwa Mpapa Mill Group, Chiredzi Productive Cane Growers Association, Farai Dumo Augustine Musikavanhu and Roy Bhila) will be referred to simply as “the farmers” and the first respondent as “ZIMRA”.

It is common cause, that, pursuant to the terms of either of two types of written agreements between them, the farmers supply the sugar cane that they produce to the applicants. These contracts are generally referred to by the parties as the “Cane Milling Agreement” and the “Cane Purchase Agreement.”

Under the former, the basic idea (as is implicit in the name) is that the applicants merely provide a milling service to the farmers. In addition, the applicants also proceed to market, on behalf of the farmers, the sugar and molasses thereby produced as well as other by-products, and, thereafter, remit to the farmers the proceeds thereof after deducting the expenses associated with the milling of the sugarcane and marketing of the sugar and the other by-products.

It is further common cause, that, under the cane milling arrangement, there is an existing agreement that the charge for the milling is calculated according to a pre-determined ratio referred to as the “Division of Proceeds” (DoP) ratio. This ratio currently stands at 23 percent of the proceeds which the applicants retain in the wake of the marketing of the products of the milling process. The farmer gets the remainder.

The Cane Purchase Agreement operates differently.

According to the parties, this agreement involves a direct and complete sale of the sugar cane by the farmers to the applicants with risk and benefits passing to the latter upon the delivery of the cane.

During oral submissions in court, counsel for the applicants referred to a rather convoluted method by which the purchase price of the cane is computed under this arrangement; suffice it to say that there is no convergence as among the parties as to whether the supplies of cane that gave rise to the current dispute constitute a Cane Milling Agreement or a Cane Purchase Agreement.

Be that as it may, it is common cause, that, in a decision (which has since been appealed against to the Fiscal Appeals Court), the first respondent determined that the set-up which currently obtains, chiefly characterised by the distribution of proceeds arrangement, constitutes one which attracts value added tax (VAT).

Therein lies the genesis of the dispute.

This is because the simple question to be answered is whether the 23 percent retained by the applicants, post the milling and marketing, incorporates value added tax (VAT) (as contended by the farmers) or it does not (as maintained by the applicants).

It is further common cause that the Zimbabwe Revenue Authority (ZIMRA), having made the decision that the aforementioned arrangement was one that attracts value added tax (VAT) in terms of the law, and that the applicants were therefore legally obligated to have, all along, charged and collected from the consumers (i.e. the farmers) and remitted the amounts so collected to it, directed that the said amounts be paid to it.

In compliance with that decision, the applicants aver, that, they have since calculated the outstanding amounts in this regard and remitted the same to the first respondent.

Through the current application, the applicants seek;

(i) A declaratory order to the effect that they are legally entitled to recover from the farmers the value added tax (VAT) which they have since paid to the first respondent; and

(ii) Secondly, that they are legally entitled to continue charging and collecting value added tax (VAT) from the farmers over and above the 23 percent milling charge.

The applicants also take exception to the fact that the first respondent (through some of its officials) took it upon itself to render certain advice to the farmers which advice they contend amounts to an unwarranted interference in matters that are purely contractual.

Part of that advice related to the first respondent's interpretation of the tax implications of the failure to include value added tax (VAT) matters in the cane supply agreements.

The terms of the declaratur sought by the applicants are captured in the draft order annexed to the application which reads:

“Wherefore, after reading papers filed of record and hearing counsel, IT IS ORDERED THAT:

1. The application succeeds with costs.

2. It be and is hereby declared that -

(a) The conduct by the first respondent to give advice to the applicants and the second to eleventh respondents on what are purely contractual matters is ultra vires its functions and responsibilities as an administrative authority and therefore unlawful.

(b) To the extent that they are liable to pay VAT for milling costs, the applicants are entitled to charge, levy, and collect such VAT in accordance with the VAT Act on and in addition to the value for the milling charge.

3. The first respondent be and is hereby ordered and directed to refrain from gratuitously interfering in pricing and contractual issues between the applicants and the second to eleventh respondents.

4. The respondents shall, jointly and severally, the one paying the others to be absolved, pay the applicants costs of suit on an attorney–client scale.”

The applicants raised a number of arguments in support of their contention that they should be permitted to recover that which they have since paid to the Zimbabwe Revenue Authority (ZIMRA) in the wake of the latter's aforementioned determination.

The main thrust of their argument, as I see it, however, is that the very fact that the Act makes it clear that the burden to pay the tax in question rests on the consumers, who in this case are the farmers, yet it was them (applicants) who were compelled to pay it, necessarily implies that they can recover the same from the farmers.

Reliance was placed, inter alia, on the elucidation by GOWORA JA, of the tripartite relationship in the value added tax (VAT) equation. This was in the case of ZIMRA v Packers International (Private) Limited SC28-16 where the following exposition was made:

“The system of collection of VAT, as embodied in the VAT Act, involves the imposition of tax at each step along the chain of manufacture of goods or the provision of services subject to VAT;”

And further that:

“…, tax under the VAT Act consists of monies that have been taxed on goods and services paid by consumers for onward transmission to the Commissioner. All that is required of an operator is to calculate the amount so paid, submit a return, and make payment.”

Flowing from this basic premise, according to the applicants, are two applicable precepts that emanate therefrom, namely, unjust enrichment and equity.

The latter, though not specifically pleaded in their papers, was nevertheless amply canvassed during the oral submissions in court.

Regarding unjust enrichment, it was averred, that, should the court not find in the applicants favour, an injustice will ensue in that the respondents will have been unjustly enriched at their expense.

For the requirements and application of the principle of unjust enrichment, the following cases were cited as authority; Industrial Equity v Walker 1996 (1) ZLR 269 (H); Chioza A.M. v Siziba S.W. SC04-15; and Trojan Nickel Mine Ltd v Reserve Bank of Zimbabwe HH169-13.

It was contended, that, the facts of this case point to the fact that all the pre-requisites for a finding for the applicant on the basis of unjust enrichment have been met.

The nub of the equity argument is that justice and fairness simply demand that the applicants be allowed to recoup from the farmers that which they paid to the Zimbabwe Revenue Authority (ZIMRA) in compliance with the latter's determination.

It is clear that this is merely an extension or adjunct of the unjust enrichment contention.

The applicants further referred to various sections of the Act which, in their view, fortify their position. Reliance was placed in this regard to section 9(2) which provides as follows:

“The value placed on any supply of goods or services shall, save as is otherwise provided in this section, be the value of the consideration for such supply, as determined in accordance with subsection 3, less so much of such value as represents tax: Provided that -

(a)…,.;

(b) Where the portion of the value of the said consideration which represents tax is not accounted for separately by the registered operator, the said portion shall be deemed to be an amount equal to the tax fraction of that consideration.”

Similarly, reliance was placed on section 9(5) of the Act which provides:

“Where goods or services are deemed to be supplied by a registered operator in terms of subsection (2) or (8) of section 7, the supply shall be deemed to be made for a consideration in money equal to the lesser of -

(a) The cost to the registered operator of the acquisition, manufacture, assembly, construction, or production of goods or services, including -

(i) Any tax charged in respect of the supply to the registered operator of such goods or services or of any components, materials, or services utilised by him in such manufacture, assembly, construction or production;

(ii) Where such goods or any right referred to in subsection (2) of section seven, when held by the registered operator, constituted trading stock as defined in section 2 of the Taxes Act, any further costs, including tax incurred by him in respect of such goods or right;

(iii) Any costs, including tax, incurred by the registered operator in respect of the transportation or delivery of such goods or the provision of such services in connection with the transfer of such goods or the provision of such services as contemplated in subsection (8) of section seven; and

(iv) Where such goods or services were acquired under a supply in respect of which the consideration in money was in terms of subsection (4) of this section deemed to be the open market value of the supply or would in terms of that provision have been deemed to be the open market value of the supply were it not for the fact that the recipient would have been entitled under subsection (3) of section fifteen to make a deduction of the full amount of tax in respect of that supply, such open market value to the extent that it exceeds the consideration in money for that supply: or

(b) The open market value of such supply.”

THE POSITION OF THE RESPONDENTS

The third (Zimbabwe Cane Farmers Association) and fourth (Mkwasine Sugar Cane Farmers Trust) respondents did not ultimately participate in the proceedings on account of the fact that the former did not file any opposing papers and the latter filed its heads of argument outside the prescribed time and was therefore barred.

In a similar vein, there was no appearance by or on behalf of the sixth (Hippo Valley Productive Farmers Association), ninth (Chiredzi Productive Cane Growers Association) and eleventh (Roy Bhila) respondents on the day of the hearing.

Effectively, therefore, only the positions of the first (Zimbabwe Revenue Authority), second (Zimbabwe Sugar Cane Development Association), fifth (Commercial Sugar Cane Farmers Association of Zimbabwe), seventh (Zimbabwe Sugar Cane Development Association Royal Trust), eighth (Chipiwa Mpapa Mill Group), and tenth (Farai Dumo Augustine Musikavanhu) respondents were before the court.

ZIMBABWE REVENUE AUTHORITY's POSITION (ZIMRA)

Regarding the implications of the failure by the applicants and the farmers to specifically incorporate value added tax (VAT) matters in their Division of Proceeds (DoP) arrangements, ZIMRA articulated two distinct positions, namely;

(i) That which relates to past supplies of cane; and

(ii) That which attends to present and future supplies of cane.

In respect of past supplies of sugarcane, the Zimbabwe Revenue Authority (ZIMRA) averred that a proper construction of section 69 of the Value Added Tax Act shows, that, in the absence of the express mention of value added tax (VAT) component in any price for goods or services, then the price will be deemed to contain the said tax.

As far as the alleged impropriety of the advice it rendered to the farmers, it contended that whatever advice it gave to the farmers was not only within its legal powers to give but also that it did so at the behest of the applicants.

It further averred, that, it has a duty to provide education to taxpayers not only to impart knowledge of the same but also to inculcate and engender a spirit of compliance.

First (ZIMRA) respondent's position on VAT implications for present and future supplies of cane

In its papers opposing this application, the Zimbabwe Revenue Authority (ZIMRA) does not commit itself on what the tax implications in respect of present and future supplies are. It opted, instead, to confine itself to the question of past supplies.

However, it soon became apparent that its position is that the applicants are not only at liberty to charge, levy, and collect from the farmers the said tax, but that they are in fact obligated to do so.

It suffices, however, to note that this does not address the issue of whether this will be over and above the 23 percent being charged for the milling of the cane.

THE FARMERS POSITION

As earlier stated, only the positions of the second (Zimbabwe Sugar Cane Development Association), fifth (Commercial Sugar Cane Farmers Association of Zimbabwe), seventh (Zimbabwe Sugar Cane Development Association Royal Trust), eighth (Chipiwa Mpapa Mill Group), and tenth (Farai Dumo Augustine Musikavanhu) respondents were effectively before court.

Save for a few instances of divergence (which will be highlighted below) the farmers were united not only in their resistance to the application but also on the grounds thereof.

The rallying point in their opposition to the quest by the applicants to recover the tax for past supplies was section 69 of the Value Added Tax Act. Their position essentially mirrors that of the Zimbabwe Revenue Authority (ZIMRA).

Over and above the import of section 69 of the Value Added Tax Act, however, a few additional arguments were presented to buttress their position and these are:

1. The very fact that the Zimbabwe Revenue Authority (ZIMRA) has determined that the 23 percent milling charge includes value added tax (VAT) as far as the second (Zimbabwe Sugar Cane Development Association), eighth (Chipiwa Mpapa Mill Group) and tenth (Farai Dumo Augustine Musikavanhu) respondents are concerned, is dispositive of the whole dispute.

They go as far as contending that the decision of ZIMRA is binding.

They further assert, that, in their view, the applicants have merely abdicated from their responsibility to remit the value added tax (VAT) so collected to ZIMRA and the consequences attendant thereto cannot be visited on them.

2. That the endeavour, on the part of the applicants, to recover the value added tax (VAT) they paid from them amounts to an attempt to vary the implied terms of their contract.

3. That, as far as the fifth (Commercial Sugar Cane Farmers Association of Zimbabwe) respondent is concerned, its cane supply arrangement with the applicants is governed by neither a cane milling agreement nor a cane purchase agreement, but, rather, by what it terms a “memorandum of understanding.” A copy of which was attached.

4. A further point raised by the fifth respondent (Commercial Sugar Cane Farmers Association of Zimbabwe) was that the very fact that invoices relating to disbursements of the individual farmer's share of proceeds is silent on the collection of value added tax (VAT) necessarily implies that VAT was included in the 23 percent milling charge.

During oral addresses in court, yet another argument was presented, namely, that, the Division of Proceeds (DoP) ratio was decided upon by the Minister responsible for the superintendence of the sugar sector, namely, the Minister of Industry and Commerce.

It was averred, in this regard, that, during the negotiations leading up to those figures (of 23 percent and 77 percent) it was in the contemplation of the parties that value added tax (VAT) was incorporated in the 23 percent milling charge.

In apparent departure from the positions held by the other respondents, the seventh respondent (Zimbabwe Sugar Cane Development Association Royal Trust) maintained that section 69 of the Value Added Tax Act applies to all supplies of cane; past, present, and future.

THE ISSUES

In my view, there are two broad issues up for determination in this dispute, and, from each, two sub-questions arise. The two broad questions are:

(1) Whether the 23 percent cane milling charge includes or excludes value added tax (VAT); and

(2) Whether there has been an unjustifiable interference by the first respondent the Zimbabwe Revenue Authority (ZIMRA) in purely contractual matters between the applicants and the farmers.

The sub-questions in respect of (1) above are:

(a) Whether or not the applicants are entitled to recover from the farmers value added tax (VAT) which they (i.e. applicants) paid to ZIMRA for past supplies; and

(b) Whether or not the applicants are entitled to charge, levy, and collect from the farmers value added tax (VAT) over and above the 23 percent milling charge.

The sub-questions from (2) above are:

(a) Whether the applicants have satisfied the requirements for the declaratur sought in paragraph 2(a) of the draft order; and

(b) Whether the applicants have satisfied the requirements for the interdict sought in paragraph 3 of the draft order.

WHETHER THE 23% CANE MILLING CHARGE INCLUDES OR EXCLUDES VALUE ADDED TAX (VAT)

This is arguably the most significant question as it lies at the very heart of the dispute.

As indicated above, the applicants used various arguments in support of their contention that the 23 percent milling charge must be taken as excluding value added tax (VAT).

They relied, inter alia, on subsections 2 and 5 of section 9 of the Value Added Tax Act.

I however fail to see how section 9(2)(b) of the Value Added Tax Act assists the applicants.

Section 9 of the Value Added Tax Act, in general, is aimed at the determination of the value of supply of goods or services. Paragraph 2(b), in particular, is a proviso to the general provision that the value to be placed on any supply of goods or services is the value of the consideration.

This proviso however addresses a situation where the registered operator neglects to separately account for the value of the consideration which represents tax in which case it will be deemed to be the tax fraction of the consideration.

Implicit in this proviso is that the tax fraction is to be calculated from that consideration: not in addition to the consideration. A fraction of something is a piece, part, portion, or component of something. Put in context, therefore, the tax fraction is incorporated in not excluded from or to be added to the 23 percent milling charge which is the consideration.

Sub-section (5) of section 9 of the Value Added Tax Act equally does not avail the applicants.

It is simply a method aimed at assisting in the computation of the consideration of the supply of the goods or services in question in instances of “deemed supply”. The basic idea being that this involves a calculation of all the expenses incurred in or attendant to the acquisition of the goods or services (or any lesser amount) or simply the open market value of such supply.

Needless to say that this provision does not even come close to unlocking the current legal logjam, let alone assist the applicants....,.

The real issue as I see it, lies in the interpretation of sections 69 and 72 of the Value Added Tax Act and their application to the facts of this matter....,.

REGARDING PAST SUPPLIES OF CANE

As indicated earlier, in this regard, the Zimbabwe Revenue Authority (ZIMRA) relied almost exclusively on the provisions of section 69 of the Value Added Tax Act (and the farmers adopt a similar stance) which provides as follows:

“69 Prices deemed to include tax

(1) Any price charged by the registered operator in respect of any taxable supply of goods or services, shall, for the purposes of this Act, be deemed to include any tax payable in terms of paragraph (a) of subsection (1) of section six in respect of such supply, whether or not the registered operator has included tax in such price.”

According to ZIMRA, the significance of this section is that where the price/charge (which, in this case, the milling price which is pegged at 23 percent of the value of the proceeds from the cane) is silent on the value added tax (VAT) component thereof, it is deemed, ex lege that VAT is included in that price.

Put in perspective, therefore, according to the first respondent, the Zimbabwe Revenue Authority (ZIMRA), it is deemed that the consumer of the goods or service (in this case the farmer) has already paid value added tax (VAT) in that price, and, by logical extension, all the registered operator (in this case the applicants) needs to do is to remit it to ZIMRA.

Any purported attempt to recover the same from the consumer is untenable because that would not only amount to taxing the consumer twice but also runs contrary to the tenor and spirit of that section.

The Zimbabwe Revenue Authority (ZIMRA) further contended, that, doing so would inevitably lead to a fresh computation of the value added tax (VAT) payable because the one calculated and subsequently paid by the applicants was on the basis of section 69 of the Value Added Tax Act.

In a nutshell, accepting the position adopted by the applicants would yield higher figures for the value added tax (VAT) payable.

The applicants took a contrary view and argued;

(i) Firstly, that there is no need to resort to the deeming provision of any legislation when in fact the issue in question is adequately provided for elsewhere in that Act.

This is because, so the argument goes, it should only be resorted to in instances of omission on the part of a party with the duty to comply with a statutory obligation.

(ii) Secondly, they contended that section 69 of the Value Added Tax Act only serves to remove as a potential defence in situations such as the present when ZIMRA demands from it the value added tax (VAT) component of any price where same is not expressly stated therein.

However, according to them, it offers no sanctuary to a consumer when the registered operator now seeks to recover from him (i.e. consumer) that which they paid pursuant to ZIMRA's decision.

In my view, the position adopted by the applicants cannot be sustained.

Firstly section 9(2) and section 9(5) of the Value Added Tax Act, which they relied on, have already been found to be of no application to the current dispute.

Secondly, the plain and literal meaning of the section suggests that it is irrelevant whether or not the registered operator has in fact charged the tax in question; where the price does not reflect the tax component thereof it is presumed that the tax is incorporated in that price.

In other words, the phrase “whether or not the registered operator has included tax in such price” operates a twin blow to the registered operator: it serves to estop him from denying that the price in reality did not include tax in a bid to avoid accounting for the tax to the Commissioner. At the same time, it precludes him from purporting to claim from the consumer the tax that he may or may not have collected from the consumer.

The question of who bears the obligation under the Value Added Tax Act to pay the tax (who is obviously the consumer), which the applicants expended so much effort on, is hardly the issue.

To contend that section 69 of the Value Added Tax Act should be construed so as to permit the registered operator to pursue the consumer for the recovery of the tax they paid to the Zimbabwe Revenue Authority (ZIMRA) would, in my view, run contrary to the clear intention of the legislature.

The legislature must obviously have been alive to the fact, that, in most day to day supply of goods and services, the customer disappears without trace soon after the transaction.

How then would the registered operator be able to recoup the tax that he claims he did not in fact charge and collect?

Even if the customer could be traced, there would be an unnecessary proliferation of disputes between him and the registered operator as to whether the price included value added tax (VAT) or not.

It would create unnecessary uncertainty and confusion in the market place where the consumer will never know whether or not the price charged includes value added tax (VAT) and where he always runs the risk of being informed ex post facto that the price he paid actually did not include tax.

If the applicants are permitted to recover the tax in question from the farmers then the deeming provision will be rendered nugatory. It would mean the price cannot then be deemed to include tax - it is as simple as that.

Further, related to the above, the deeming provision cannot be interpreted to mean two different things to two different people.

The interpretation that the applicants want to foist on section 69 of the Value Added Tax Act will result in a mathematical or accounting incongruence and an absurdity in logic.

The Zimbabwe Revenue Authority (ZIMRA), in its papers, vividly illustrate the mathematical inconsistency that will arise when they juxtapose the outcomes of the two contrasting positions using the hypothetical figure of $1,000 as proceeds for the sale of sugar thus:

(a) Where section 69 of the Value Added Tax Act is invoked

Proceeds from sale of sugar = $1,000
Price for milling services at 23% of the proceeds = ($1,000 x 23%) = $230
VAT due after deeming that that price includes VAT = ($230 x 15/115) = $30

(b) Where the applicants recover the section 69 ($30) VAT from the farmers

Proceeds from sale of sugar = $1,000
Price for milling services at 23% of the proceeds = ($1,000 x 23%) = $230
VAT due after deeming that that price includes VAT = ($230 x 15/115) = $30
VAT due after the applicants recover the $30 VAT from the farmers = 15% ($230-30+30) = $34.50

What the applicants are moving the court to accept will also yield a further absurd result in the following context:

Where, from the standpoint of the first respondent, the Zimbabwe Revenue Authority (ZIMRA), vis a vis the applicants, value added tax (VAT) is deemed to be included in the price; yet, from the standpoint of the applicants vis-a-vis the farmer, the price is deemed not to include the tax.

It could never have been the intention of the legislature to produce such an absurd or anomalous situation.

The net result of the interpretation should be uniform, consistent, and certain not only to the parties but also to other persons similarly situated.

Section 69 of the Value Added Tax Act effectively places the registered operator on guard on the consequences of his failure to specifically include in his price the value added tax (VAT) component thereof.

Viewed differently, it is the responsibility of the registered operator to ensure that value added tax (VAT) matters are addressed in his dealings with the consumer. It is not a responsibility that the registered operator jointly shares with the consumer because the duty to account to the Commissioner ultimately rests with him (i.e. Registered Operator).

There can never be a conflation of the roles, duties, and responsibilities among the various parties: the burden to pay the tax lies with the consumer (the farmer), the duty to charge, collect, and remit the tax lies with the registered operator (the applicants).

In the context of this case, whether occasioned by inadvertence, oversight, or a mis-interpretation of the nature of the contract, the consequences of the failure to specifically include the value added tax (VAT) are that VAT is deemed included in the milling price.

During the proceedings, resort was made by the applicants to section 72(1) of the Value Added Tax Act which provides as follows:

“72 Contract price or consideration may be varied according to rate of value-added tax

(1) Whenever the value added tax is imposed or increased in respect of any supply of goods or services in relation to which any agreement was entered into by the acceptance of an offer made before the tax was imposed or increased, as the case may be, the registered operator may, unless agreed to the contrary in any agreement in writing and notwithstanding anything to the contrary contained in any law, recover from the recipient, as an addition to the amounts payable by the recipient to the registered operator, a sum equal to any amount payable by the registered operator by way of the said tax or increase, as the case may be, and any amount so recoverable by the registered operator shall, whether it is recovered or not, be accounted for by the registered operator under this Act as part of the consideration in respect of the said supply.”

In my view, this provision is meant to address the adjustments that may have to be made in contractual situations wherein, at the time the offer was made, there was no value added tax (VAT) imposable on that contract or it stood at a certain level; however, by the time the acceptance is made, that type of contract, by operation of the law, now attracts VAT or had been increased.

The imposition of or the increase in the value added tax (VAT) was not in the contemplation of the parties thereby necessitating an adjustment in the price.

This provision is clearly not applicable to the current dispute.

There was no imposition of a “new” tax which hitherto did not exist, nor was there an increase of the value added tax (VAT) chargeable and payable.

The parties merely failed to take into account a tax which was already in existence.

PRESENT AND FUTURE SUPPLIES OF CANE

Therefore, against the backdrop of a finding that the parties (whether through inadvertence, oversight, or mis-apprehension) failed to address value added tax (VAT) matters in their contracts, one cannot legitimately vouch for the perpetuation of the status quo.

It behoves the parties to re-negotiate or clarify the terms of their contract to plug that lacuna.

It suffices to state, that, failure to do so may very well result in section 69 of the Value Added Tax Act being continuously invoked.

I did not get the impression from the concession made on behalf of the second (Zimbabwe Sugar Cane Development Association), eighth (Chipiwa Mpapa Mill Group) and tenth (Farai Dumo Augustine Musikavanhu) respondents that they are necessarily agreeable to the charging of value added tax (VAT) by the applicants over and above the 23 percent milling charge.

What I gathered was a concession merely that the applicants can charge, levy, and collect value added tax (VAT) from the farmers in compliance with the requirements of the Value Added Tax Act....,.

1....,.

2. The application for a declaratur, as sought in paragraph 2(b) of the draft order, as it relates to past supplies of sugar cane, be and is hereby dismissed.

3. In respect of present and future supplies of sugar cane, it is hereby ordered that the applicants and the 2nd-11th respondents are at liberty to re-negotiate and/or clarify the terms of their contracts to specifically incorporate value added tax (VAT) issues and proceed on that basis.

SC127-21 : MIDLANDS STATE UNIVERSITY vs GALAXY ENGINEERING DESIGN CONSULTANTS (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, BHUNU JA and MATHONSI JA

This is an appeal against the judgment of the High Court (the court a quo) rendered in favour of the respondent on 24 July 2019 following a full trial. The judgment directed the appellant to pay to the respondent interest on the sum of $84,827=17 at the rate of 19.5% per annum from 1 November 2010 to the date that amount was paid to the respondent.

In addition, the appellant was ordered to pay to the respondent the sum of US$3,207,450=68 together with interest thereon at the rate of 19.5% per annum from 1 November 2010 to date of payment and costs of suit.

This Court observes, that, the dispute between the parties was resolved purely on findings of credibility of the two witnesses pitted against each other in respect of whose evidence the trial court made factual findings.

That led the court a quo to conclude, that, at the time the appellant gave instructions for cessation of work which was being performed by the respondent, in terms of the contracts, the latter had already completed its mandate of designs and drawings for the appellant. Payment in terms of the contracts entered into by the parties was therefore due.

The court finds, that, on appeal, the appellant has not made a case for interference by the Appellate Court with the credibility and factual findings of the court a quo. The appellant has not even begun to set out any valid grounds for impugning the findings of the court a quo in that regard.

Regarding the relief in United States dollars granted a quo, the court finds that it was incompetent as the court a quo was precluded from granting relief denominated in foreign currency. The liability of the appellant fell due several years before 22 February 2019, the effective date.

In terms of section 4(1)(d) of Statutory Instrument 33/19, SI33 of 2019, as interpreted by this Court in Zambezi Gas Zimbabwe (Pvt) Ltd v N.R. Barber (Pvt) Ltd & Anor SC03-20, the liability of the appellant having been expressed in United States dollars immediately before the effective date of 22 February 2019, fell within the remit of that provision.

As such, relief should have been granted in Zimbabwe dollars at the rate of one to one to the Unites States dollar.

The court also finds that the question of interest on the sum of US$84,827=17 paid by the appellant following admissions it made at the pre-trial conference of the parties before a judge, was an issue placed before the court a quo for determination. That court was obliged to determine it.

Having found the appellant liable, the court a quo was correct to award interest on that amount. The court however finds. that, as with the rest of the liability, that interest should also be reckoned in the local currency at the same rate.

BACKGROUND FACTS

The appellant, a tertiary institution established in terms of section 3 of the Midlands State University Act [Chapter 25:21], engaged the respondent, a company involved in the business of providing civil engineering services, to design civil and engineering works for it on 3 September 2003.

The appellant desired the respondent to design and produce drawings for the construction of certain buildings and Master Site Services at its main University Campus in Gweru. As a result, the parties concluded and signed seven contracts, four of which form the basis of the present dispute. These are:

(a) Contract 1 - for the construction of the Faculty of Commerce and Information Systems, Faculty of Law and Administration on Block;

(b) Contract 2 - for the Faculty of Architecture, Art and Design;

(c) Contract 3 - for the Vice Chancellor's House; and

(d) Contract 4 - being the Master Site Service Design for the whole site, that is, the Master Plan.

Contract 5 - for the Faculty of Natural Resources; Contract 6 - for the Faculty of Science & Technology; and Contract 7 for the Commercial Centre and Sports facilities fall outside the scope of the present case.

The contracts entered into by the parties comprised of the Standard Form Zimbabwe Association of Consulting Engineers (ZACE) contracts and memorandum of agreement for each of them.

The conditions of engagement prescribed the manner in which the engineering works contained in the contracts were to be undertaken. These included:

(i) Stage one; a report relating to consultation between the parties, inspection of the site, and collation of data.

(ii) Stage two related to the preliminary design involving preparation of plans, drawings, and making modifications on the designs.

(iii) Stage three related to the establishment of final design criteria and included the development of the design.

(iv) In stage four, the consultant would work on the drawings themselves.

The respondent performed certain work in terms of the contracts although there is no convergence between the parties as to the stage reached by the works at the time of disengagement.

What is however common cause is that the construction of the relevant buildings had advanced when, on 14 June 2005 and 5 August 2005, the appellant addressed letters to the respondent instructing it to stop work on all the projects.

It is at that point that the dispute arose as to the amount of work the respondent had already performed in fulfilment of the contracts when it was instructed to stop working. The balance due by the appellant for what had been done was also disputed.

The position taken by the respondent was that, at that point, it had already completed all the work that needed to be done on all the four contracts. The respondent insisted, that, having fulfilled its contractual mandate, it was entitled to payment for the full services rendered within the scope of clause 18 of the Zimbabwe Association of Consultant Engineers Standard Contract.

On the other hand, the appellant was adamant, that, the respondent had not completed the work as per the contracts. It contended, that, when it directed the respondent to stop all work on the project on 5 August 2005, it had not completed its mandate.

The appellant insisted, that, the respondent had continued to work after being instructed to stop, and, as such, any work performed by the respondent after the instruction to stop had been given could not be paid for - the respondent having been on a frolic of its own.

The appellant also took the position, that, an amendment had been effected to the original contracts to introduce a clause which placed the obligation to pay for the projects on a third party, the Government of Zimbabwe; until such time that the third party gave a signal that it had allocated funds for payment, no payment was due to the appellant in terms of the contracts.

In any event, so the appellant continued, the respondent had been paid in full for the works that it performed.

PROCEEDINGS BEFORE THE HIGH COURT

On 16 July 2015, the respondent instituted summons action against the appellant based on the four contracts mentioned above. The respondent claimed payment of the sum of $3,292,277=90 together with interest on that amount at the rate of 19,5% per annum calculated from 1 November 2010 to date of payment. It also claimed collection commission.

The basis of the claim was that the respondent had provided professional consulting civil engineering services in respect of the first, second, third, and fourth construction projects for the appellant in fulfilment of all its contractual obligations. The respondent averred, that, following its issuance of invoices for settlement, the appellant failed or neglected to pay in breach of the contracts between the parties.

The appellant contested the action.

It refuted that the respondent fulfilled all its contractual obligations. The appellant asserted, that, it stopped the respondent from carrying out any further work on the project on 5 August 2005 before completion of the mandate.

As such, so the appellant contended, the respondent was not entitled to payment for any additional work performed after that date.

Regarding payment, the appellant relied on an addendum to the agreement which was signed by the parties and introduced clause 4.1 to it. According to the appellant, the clause in question regulated how the respondent was to be paid. It contained a suspensive condition which was not satisfied. For that reason, no further payment was due to the respondent.

In terms of clause 4:

“4. Fees Chargeable and Reimbursements

Notwithstanding the provisions in paragraph 17 (under the heading Fees and Expenses) of the Conditions of Engagement ZACE Forum 2 1999:

4.1 The parties herein agree that the client is a public institution, wholly funded in its operations by the Government of Zimbabwe and that it is wholly dependant on the national budget for its funding, which budget is announced once every year. It is therefore agreed that the Consultant will hold in abeyance all invoices until advised by the client that funds are now available. In this case, the client will act in good faith and advise the Consultant to submit invoices within 14 days of receiving funds. Thereafter the client shall settle invoices within 60 days of receipt from the Consultant.

If such accounts are then not paid within 60 days from date of invoice, interest may be charged at 1.2 times the prevailing bank overdraft rate available to the Consulting Engineer.”…,.

At the pre-trial conference of the parties before a judge, the appellant made an admission recorded in the Statement of Agreed Facts, later prepared and submitted to the trial court, as follows:

“7 It is also common cause that defendant paid the sum of US$84,827=17 of Project 1. The parties agree that, this was in full and final payment in respect of that project and it is no longer in contention save for…, only the interest amount that remains upaid.”…,.

Following the submission of a Statement of Agreed Facts, in terms of which the matter was referred to trial, only three (3) narrow issues were placed before the court a quo for determination. These are:

“(a) Whether or not the plaintiff had completed all the works as at the 5th of August 2005 when the defendant gave instruction to stop all work.

(b) If so, what is the quantum of fees due to the plaintiff.

(c) If not, what stage of work had plaintiff reached by the 5th of August 2005 and what quantum of fees is it entitled (to) for such work, if any.”

FINDINGS OF THE COURT A QUO

At the trial, each party led evidence from one witness. The respondent relied on the evidence of Engineer Wilfred Tamayi Vengesai to prove its case while the appellant brought in Engineer Innocent Masunungure to disprove it.

In assessing the credibility of the two witnesses, the court a quo found;

“It is Engineer Wilfred Tamayi Vengesai's evidence which accords with the documentary evidence. It accords also with the statement of agreed facts.

His testimony was clear and straight forward. It was not dented under cross-examination.

The same cannot be said of defendant's evidence. It went against the grain of documentary evidence.

The defendant's witness contradicted the Statement of Agreed Facts in fundamental respects. I also was not impressed with the demeanor of the defendant's witness. He was evasive under cross examination. It was clear to me that he was simply ducking and diving in a desperate endeavour to avoid the truth.

The net result is that I will accept the plaintiff's testimony wherever it conflicts with that of the defendant.”

The court a quo went on to find, that, the appellant had commissioned the respondent to design and produce drawings for use by contractors in erecting the structures so designed. It further found, that, by November 2004 the designs had been completed and forwarded to the appellant.

The court a quo based its finding in that regard on the fact, that, after completion of the contractual mandate, the respondent had proceeded to break down the designs into nine sub-contracts to allow for stage implementation of the works to suit priority and funding of the appellant.

In the court a quo's view, this could not have been done if the contractual mandate had, by then, not been fulfilled.

In addition, the court a quo applied the doctrine of fictional fulfilment to conclude that the appellant, having acted in bad faith in failing to invite the respondent to submit estimates of fees owed, and in not bidding for funding from the Government of Zimbabwe for an unreasonably long time, the suspensive condition in clause 4:1 had been fulfilled.

The court a quo then entered judgment in favour of the respondent as already stated.

PROCEEDINGS BEFORE THIS COURT

The appellant was aggrieved. It noted the present appeal on the following grounds:

1. The court a quo erred and misdirected itself in granting an order denominated in United States dollars when it was incompetent to do so.

2. The court a quo erred and misdirected itself in awarding the respondent interest on the sum of US$84,827=17 when such an issue was not among the issues which were submitted to the court a quo for determination by the parties.

3. The court a quo further erred in holding that the respondent had completed all its contractual obligations when the appellant instructed the respondent to stop work in circumstances where the evidence showed that the respondent had not completed all the work.

4. The court a quo erred in awarding the respondent's claim for an amount for the completion of the work in full, whereas, the evidence before it pointed to the fact that the work was incomplete as at the cut-off date.

5. It was an error of law on the part of the court a quo to apply the doctrine of fictional fulfilment against the appellant in circumstances where a third party (Government of Zimbabwe) was the one which had an obligation to fulfil the suspensive condition.

6. The High Court misdirected itself in ignoring that the respondent neither pleaded nor proved the fulfilment of the suspensive condition.

The grounds of appeal may be six but they are generally repetitive and speak to only two issues for determination in this appeal. They are:

(i) Whether the court a quo erred in entering judgment in favour of the respondent and ordering the appellant to pay interest;...,.

That then brings me to the question of fictional fulfilment which was given undue attention by counsel.

The way I understand it, the appellant seeks to be excused from liability on the basis that it inserted clause 4:1 in the contract through an addendum. The clause, quoted verbatim above, only recognises that the appellant is funded by a third party. It is not a novation or a substitution of the third party as a party to the contract.

Significantly, it does not absolve the appellant, as the contracting party, from liability.

It occurs to me, that, the mere fact that a creditor may agree to receive payment from a third party on behalf of a debtor does not absolve the debtor from liability to perform in terms of the agreement: see Dube v Mbokazi (15843/ 2017) [2018] ZAGPPHC 699 (28 September 2015).

The reason why that is so is pretty obvious.

It is because there is no privity of contract between the respondent and the Government which remained firmly outside the contract.

In that regard, whether the funding came from the Government or not paled. The appellant remained liable. It was its responsibility to lobby for funding and settle its debt. It cannot seriously argue that it is still awaiting funding - 16 years later.

I reject that argument.

HB37-15 : LAWRENCE CLEMINSON vs BRIAN SHER and RUEBEN POSWELL (as executor in the Estate Late Sally Lieber also known as Sally Zella Lieber)
Ruled By: MUTEMA J

Order 7 Rule 50 of the High Court Rules 1971 provides that a defendant who has failed to enter appearance shall be deemed to be barred.

In case number HC1508/14 the respondents issued summons against the applicant on 2 July 2014 claiming arrear rentals and eviction as a result of breach of a lease agreement entered into by the parties.

The summons was served at the applicant's domicilium citandi et executandi, Number 5 Luton Street, Belmont, Bulawayo on 4 July 2014 by affixing it thereat on the door after unsuccessful diligent search.

The dies induciae expired on 18 July 2014.

On 17 July 2014, the respondents legal practitioners, out of courtesy, e-mailed the summons to the applicant and also alerted the applicant that they had served the summons at his domicilium citandi on 4 July 2014.

The applicant did not enter appearance to defend.

On 31 July 2014, the applicant filed a chamber application for the upliftment of the automatic bar.

The respondents opposed that application hence this opposed application.

Now, in an application by a defendant for the removal of a bar from entering appearance, that litigant should set out, briefly, his/her defence and the facts upon which he/she relies for that defence so that the court can form some opinion of its merits.

He or she must also set out, briefly, some facts which the court can scrutinize to gain some idea whether the defence is bona fide: see Broadley N.O. v Stevenson 1973 (1) SA 585 (R) and the cases cited therein.

This is the legal position pertaining to an application of this nature.

The explanation proffered by the applicant, for his failure to enter appearance, is contained in paragraphs 6 and 7 of his founding affidavit. They read:

“6. I did not see the summons as I had long vacated the premises where the summons were served and so I could not enter an appearance to defend within the time limit prescribed in the Rules.

7. I only got to know of the summons on the 18th of July, when the respondents legal practitioners sent me a copy through an e-mail and already the time within which I was supposed to have entered an appearance to defend had lapsed, which means I am automatically barred in terms of Order 7 Rule 50 of the High Court Rules 1971.”

In paragraphs 11 and 12 of his Heads of Argument, the applicant took a swipe at the respondents in these words:

“11….,. For the respondents to seek to cling on an (sic) application of default judgment will be tantamount to snatching of a judgment.

12. The respondents legal practitioners appear to be eager to obtain a default judgment at the slightest opportunity, disregarding the need for courtesy when dealing with fellow legal practitioners. The respondents legal practitioners are fully aware of the date when the applicant came to be aware of the summons, hence there is no need to oppose the present application except from malice.”

That applicant chose Number 5 Luton Street, Belmont, Bulawayo as his domicilium is beyond caevil. Clause 24 of the lease agreement signed by the parties provides:

“24. Domicilium and Notices

24.1 The parties choose domicilium citandi et executandi (“domicilium”) for the purposes of the giving of any legal notice or the serving of any process, as follows:

The Lessors

Room 24, SAVYON LODGE, CNR M. NDLOVU AVE AND ROBERT MUGABE WAY, BULAWAYO

The Lessee

5 LUTON STREET, BELMONT, BULAWAYO

24.2 Each of the parties shall be entitled, from time to time, by written notice to the other, to vary its domicilium to any other address which is not a post office address.”

It is trite, that, the purpose of choosing a domicilium address for the giving of a notice or service of process is to relieve the party giving the notice or serving the process, of the burden of proving actual receipt of the notice or process.

The manner of service of the summons in casu, of affixing it on the outer or principal door at the applicant's domicilium citandi, constitutes good and valid service permissible in terms of Rule 40(b) of the High Court Rules.

The applicant's explanation regarding his failure to enter appearance, in paragraph 6 of his founding affidavit, that he did not see the summons because he had long vacated his domicilium is neither here nor there.

As far as the respondents and the law are concerned, Number 5 Luton Street. Belmont, Bulawayo was, on 4 July 2014, still the correct address for service of the applicant.

The applicant very well knew, that, in terms of clause 24.2 he was obliged to write to the respondents advising them of his change of domicilium before, during, or after leaving 5 Luton Street.

He did not so do, thereby exhibiting a dearth of diligence regarding legal issues.

HB37-15 : LAWRENCE CLEMINSON vs BRIAN SHER and RUEBEN POSWELL (as executor in the Estate Late Sally Lieber also known as Sally Zella Lieber)
Ruled By: MUTEMA J

Regarding the merits, the applicant, in paragraph 8 of his founding affidavit gives this explanation:

“8. Further, there are prospects of success on the merits. The amount being claimed by the respondent is disputed as there was an agreement between the parties for the reduction of the rentals. For the months of February and March the rent was reduced from the original US$2,500 to US$1,250, but, surprisingly, in their claim, the respondents are still claiming US$2,500 for the above mentioned months.”

There are no facts which the applicant has set out upon which he relies for the alleged defence to enable the court to form some opinion of its merits or bona fides as is required by the law.

Clause 26 of the lease agreement provides, in clear and unambiguous language, what should happen in the event of any variations to the lease agreement in these words:

“26. Whole Agreement

This agreement constitutes the whole agreement between the parties and no variations, alterations, or collateral agreements shall be of any force or effect unless and until recorded in writing in a document signed by the parties.”

Such a document, satisfying the requirements stipulated in clause 26 above, was not produced, neither was there even the slightest allusion to its existence save the applicant's mere allegation that there was an agreement pertaining to a reduction of rentals for February and March.

So, where are the prospects of success vaunted by the applicant in paragraph 8 of his founding affidavit?

Clearly, the applicant has no defence no matter how reluctant the court may be to reach a decision that would result in giving leeway to a judgment against a person without him being heard in spite of his protestations that he has a valid defence.

HB44-15 : RAILWAYS ARTISAN UNIONS vs NATIONAL RAILWAYS OF ZIMBABWE and OTHERS
Ruled By: TAKUVA J

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 last point, relating to how the decision complained against was made, is relevant to the issue.

However, the respondents submission, that, when it was made, there was a full quorum, is simply incorrect.

The respondents have referred to the meeting of 18 September 2012 as the date when the decision was made.

Quite clearly, this is not the case, in that annexure H, which is the proposal by Mhlophe, was written on 10 October 2013.

It would be illogical for this proposal to have been written on this date if the “decision” had already been made in 2012.

Also annexure I and J confirm that the controversial decision was only made after Mhlophe's not so wise proposal was made.

What is abundantly clear is that the adoption of Mhlophe's proposal, by the respondents, amounted to an unlawful amendment of the Parterson Job Evaluation System Procedural Manual, in particular, clause 6.1.5.

The Manual is a Collective Bargaining Agreement which can only be lawfully amended in terms of section 81 of the Labour Act [Chapter 28:01].

In casu, this was not done.

Accordingly, the provisional order is hereby confirmed.

HB53-15 : ZB BUILDING SOCIETY vs TAKESURE MASANZU
Ruled By: MOYO J

The plaintiff issued summons in this matter seeking an order as follows:

(a) Eviction of the defendant and all those claiming right of occupation through him from a property known as House Number 5 Cypress Avenue, Masasa, Kwekwe.

(b) Payment of $3,478 being arrear rentals for the period extending January 2013 to December 2013.

(c) Holding over damages at the rate of $11=50 per day from January 6, 2014 to the date of eviction.

(d) Payment of the sum of $169=32 being arrears ZETDC bills and $243 being the Municipality bills.

(c) Costs of suit at a higher scale.

It is important to note, that, the plaintiff's witness advised the court that claim number (d) on the summons was being abandoned because the utility bills had been paid by the defendant to the relevant authorities.

The plaintiff's case is that the defendant took over occupation of Stand 5 Cypress Avenue, Masasa, Kwekwe, after the decease of one Chengoma who was the lessee leasing the property from the plaintiff.

The plaintiff was made to understand, that, the defendant was related to the late Chengoma and would want to remain in occupation and take over the lease.

The plaintiff allowed the defendant to remain in occupation on condition the defendant paid monthly rentals in the sum of $345 per month.

They were to assess the defendant's performance on payments before crafting a lease in the defendant's name.

The defendant fell into arrears shortly after this arrangement was made resulting in the plaintiff instituting this action.

The defendant, on the other hand, agrees that he took occupation of the property in issue and that he was to pay $345 per month, but, that, in fact, he had entered into a rent to buy agreement with the plaintiff.

In giving evidence, the defendant told the court, that, in the rent to buy agreement he was to pay $345 per month and he was supposed to have paid $9,600 by 31 August 2013.

He however told the court, that, he did not pay the $9,600 by 31 August 2013 as the Bank had said he could be given an indulgence to pay within another three months. He said however he did not pay the $9,600 even by December 31, 2013 as he had only paid $7,500 by then.

Asked what the precise terms and conditions of the rent to buy agreement were, he said he was to pay $9,600 at $345 per month by 31 August 2013.

The defendant also told the court, that, it was another term of the agreement that he would then pay about $25,000 “soon after paying the $9,600” to make up the total purchase price of $35,000.

He said that his agreement with the Bank was oral.

The defendant failed to produce proof of payments for the rentals per month from 2012 to date. He only tendered about nine copies of deposit slips all with dates in 2012. They were marked Annexure “A”.

From the facts before me, the following are common cause:

(a) That the defendant took occupation of the plaintiff's property sometime in 2012–2013.

(b) That the defendant did make some payments towards rentals.

(c) That there are no rental slips for the years 2013, 2014 and 2015.

(d) That the property, i.e. Number 5 Cypress Avenue, Masasa, Kwekwe belongs to the plaintiff.

(e) That an agreement was reached between the parties resulting in the defendant occupying the plaintiff's property; whatever nature of agreement, whether it was a rent to buy or lease, but, the bottom line is some agreement was reached.

Looking at the plaintiff's allegations, that the defendant inherited Chengoma's lease whom they were made to believe was his relative, and the rentals agreed upon, as well as the payment slips tendered by the defendant, the plaintiff's case sounds, in my view, to be plausible.

On the other hand, the defendant's case creates numerous problems and I list them herein.

Assuming that the court were to accept the defendant's version of events, there are these challenges in adopting that version:

(1) The parties entered into an oral rent to buy agreement

This raises eyebrows as any person who owns an immovable property to the value of $35,000 would not behave in such a manner - moreso a Building Society.

On the other hand, the plaintiff's explanation for the oral lease agreement is plausible in that the defendant was taking over Chengoma's lease, as a relative, and this would entail continuity. Also, that they did not immediately reduce the agreement to writing since they wanted to observe the defendant's conduct with regard to payments makes sense.

(2) The defendant says, that, the agreement was that he takes occupation, pays $345 per month as rentals in a rent to buy agreement, and that he should have paid $9,600 by 31 August 2013 from January 2012.

2012 had 12 months, and, from January 2013 to August 2013 its 8 months, meaning, that, there is a total of 20 months. At $345 per month, for 20 months, mathematically, the defendant would have paid $6,900.

So, it would not make sense that the Bank agreed with him that he pays $9,600 by 31 August 2013, from January 2012, at the rate of $345 per month.

(3) When he was asked for the precise terms of this rent to buy agreement, he said that he was to pay about $25,000 “soon after paying the $9,600.”

What kind of agreement is this?

(4) The defendant did not comply with the terms of the agreement he alleges was entered into.

He never paid $345 per month consistently for the 20 months stretching from January 2012 to 31 August 2013. Neither did he pay the $9,600 by 31 August 2013.

He says that he was given a leeway to pay within 3 months from the last date given; but, it is also his evidence that he had not paid the $9,600 by December 2013. He also did not pay the balance of about $25,000 “soon after paying the $9,600” as he never paid the $9,600 in the first place.

Clearly, the defendant is being untruthful with the court from the aforestated analysis.

He wants to take the court in a long meandering route destined nowhere. He is merely wasting the court's time and is indeed abusing court process in my view.

He knows that he entered into a lease agreement with the plaintiff, defaulted on rentals, and then decide to come up with a concocted rent to buy story that was falling apart on its own.

I accordingly grant the plaintiff the following relief for the aforestated reasons:

(a) Eviction of the defendant and all those claiming right of occupation through him from the property known as House Number 5 Cypress Avenue, Masasa, Kwekwe.

(b) Payment of $3,478 being arrear rentals for the period extending January 2013 to December 2013.

(c) Holding over damages at the rate of $11=50 per day from January 6, 2014 to the date of eviction.

(d) Costs of suit at a higher scale.

HH109-08 : LLOYD GAMBIZA vs PIKIRAI TAZIVA
Ruled By: GOWORA J

On 1 March 2007, the plaintiff issued summons out of this court for an order as follows:

“(a) An order declaring the agreement, Annexure A to the particulars of the claim, dated 18 December 2006, to have been validly cancelled and incapable of performance.

(b) An order for the return to the plaintiff of motor vehicle Mitsubishi Chariot Reg number AAN 8616, or, alternatively;

(c) Payment of the sum of R17,000 being the balance of the purchase price due to the plaintiff.

(d) Costs of suit.”

The facts which give rise to the dispute are these:

The plaintiff and the defendant were not only friends, they were also business partners. On 18 December 2006, the parties entered into a written agreement of sale in respect of a Mistubishi Chariot owned by the plaintiff. It was agreed between the parties that the vehicle would be sold to the defendant for a price of ZAR25,000 or Z$6 million. A deposit of R8,000 was recorded as having been paid with the balance of R17,000 being paid in two or more installments on or before 20 January 2007.

In his declaration, the plaintiff avers, that, the defendant has not paid any other amount aside from the initial R8,000. He therefore sues for the return of the vehicle or payment of the outstanding amount.

The defendant admits the existence of the agreement and the terms of the written agreement. He agrees that the balance had to be paid by 20 January 2007, but denies that he had breached the agreement as claimed by the plaintiff.

He avers that he tendered payment within the stipulated period but that the plaintiff refused to accept payment because it was not in Rand.

The defendant states, that, the offered payment, in Zimbabwe dollars, as an alternative amount, had been stipulated in the agreement. He tendered, in his plea, payment of the balance owing to the plaintiff against delivery to him of the registration book in respect of the vehicle.

He has also filed a counter-claim where he seeks delivery of the registration book to him against payment by him of the outstanding balance payable in local currency.

I will now deal with the evidence which was common cause between the parties.

The agreement concluded was for the defendant to purchase the vehicle for the sum of the R25,000. The defendant paid an amount of R8,000 on the date that the agreement was signed. The defendant was obliged to have paid the balance by 20 January 2007. However, payment was not effected by the stipulated date. The balance was stated as R17,000 on the agreement.

The Zimbabwe dollar equivalent was not stated in the agreement.

As to the dispute between them, the plaintiff indicated that the defendant had not tendered payment.

During cross-examination, it was clear, however, that the defendant had tendered payment of the Zimbabwe dollar component based on official rates of exchange but the plaintiff had refused to accept any payment in local currency.

There is no indication as to how much the defendant had tendered.

Although in the summons and declaration, the plaintiff had an alternative claim for him to be paid the sum of R17,000 when he gave evidence he indicated that he had abandoned that claim as he said that he had been advised that an individual could receive any payment in foreign currency and that he understood that the agreement was illegal to that extent. He said it was not capable of execution and said that it was, as a result, null and void.

Initially, it was contended, on behalf of the plaintiff, that, the agreement was per se illegal and incapable of enforcement due to the same.

It was further submitted on his behalf, that, not only was the purchase price quoted in foreign currency but that the equivalent in the local currency was calculated by the use of the parallel market rate of exchange which in itself is illegal.

The plaintiff further contended, that, the parties were illegally dealing in foreign currency and that the court was, as a result, precluded from giving effect to the agreement.

The defendant, through his counsel, also conceded that the agreement was illegal and that both parties participated in the illegality. Counsel prayed that I find that the in pari delicto principle applied and that I should let the loss lie where it falls.

Effectively, this would mean that the defendant would retain a vehicle for which he contracted to pay ZAR25,000 and for which he only paid ZAR8,000.

The defendant would thus be enriched at the expense of the plaintiff.

I was not convinced that both counsel had properly addressed the legal issues before me and I requested that they address me further by way of supplementary submissions.

These have now been filed and I am grateful to counsel for acceding to my direction.

The plaintiff now contends, that, the agreement executed by the parties is legal and valid and that the court can give effect to the same. He relies on the provisions of section 4(1) of the Exchange Control Regulations SI109 of 1996, which he says, prescribes the buying, selling, borrowing, lending or exchange of any foreign currency without permission from the Exchange Control authority.

It is contended on his behalf, that, although the agreement provided for payment of the purchase price in foreign currency, this was not illegal as it was not an offence to receive foreign currency.

The defendant has submitted, contrary to the plaintiff, that, the agreement, as it provides for payment of the purchase price in foreign currency, is illegal, and that this court should not give effect to it as that would encourage parties to such agreements to commit illegal acts.

Section 4(1) of the Exchange Control Regulations, S.I.109 of 1996 (“the Regulations”) is in the following terms:

“Subject to subs (3), unless permitted to do so by an exchange control authority;

(a) No person shall, in Zimbabwe -

(i) Buy any foreign currency from or sell any foreign currency to any person other than an authorized dealer or foreign exchange bureau de change; and

(ii) Borrow any foreign currency, lend any foreign currency to, or exchange any foreign currency with any person other than an authorized dealer.”

It is not in dispute, that, when the agreement between the plaintiff and the defendant was concluded the defendant had paid an amount of ZAR8,000 as deposit on part of the purchase price.

In terms of the agreement between the parties, the equivalent of the ZAR8,000 in local currency was $6 million. The rate of exchange was not given, but, it is accepted by both parties that the conversion rate was not the authorized one.

The balance outstanding was stated to be ZAR17,000. The equivalent in local currency was not stated.

Counsel for the plaintiff is correct when he says that the law does not proscribe the conclusion by parties of agreements where prices are quoted in foreign currency.

A careful scrutiny of section 4(a)(ii) of the Exchange Control Regulations, SI109/1996 leads me to the conclusion that his submission is correct. The Regulations do not forbid parties from transacting in foreign currency in general terms, but, they detail specific conduct that involves foreign currency which is then prohibited.

What is pertinent is to determine whether the manner in which the parties herein conducted their agreement falls under the species of proscribed conduct within the ambit of the Exchange Control Regulations, S.I.109/1996. The only word that would apply to the present is 'exchange' and what meaning can be ascribed to it.

The Shorter Oxford Dictionary defines exchange, as a noun, variously, as follows:

“The action, or an act, of reciprocal giving and receiving; a mutual grant of equal interest, the one in consideration of the other.”

In respect of the verb, the dictionary ascribes the following meanings to 'exchange' -

“To change away; to dispose of by exchange; to give or part with (something) for something in return; to give and receive reciprocally; to interchange.”

In Matsika v Jumvea & Anor HH09-03, CHINHENGO J had to consider whether or not an agreement for the purchase of a motor vehicle, within Zimbabwe, in currency other than the local currency was legal.

It is not my intention to traverse the path taken by the learned judge in his examination of the matter, for, to do so, would be repetitive and disrespectful.

He concluded, that, in accordance with the Decimal Currency Act [Chapter 22:04], the legal tender in this country is the Zimbabwe dollar. He also concluded, that, according to the provisions of the Reserve Bank Act [Chapter 22:10], a tender of notes and coins issued by the Reserve Bank, which has not been demonetized shall be legal tender in Zimbabwe. He also found, that, the Reserve Bank Act does not prohibit the transaction by Zimbabweans of business in foreign currency.

With regard to the application before him, on the facts, as presented, the learned judge had no hesitation in finding, that, when the applicant paid US$1,700 and US$1,730, to the respondent, for the purchase price of a vehicle, without first having obtained the permission of an exchange authority, the parties had contravened the Exchange Control Regulations, SI109 of 1996.

In the context in which 'exchange' is used by the legislature in the Exchange Control Regulations, the meaning that can therefore be ascribed to it is “to pay” and “to receive”.

The defendant paid ZAR8,000 without the permission of an exchange control authority, and, in the circumstances, there can be no doubt that this is prohibited by the Exchange Control Regulations.

Thus, the agreement is tainted with illegality and cannot be enforced.

It is trite that there must be no illegality in a contract. An agreement is illegal if the making of the agreement, the performance agreed upon, or the ultimate purpose of both parties in contracting is prohibited by common or statute law, that is, if it is contrary to public policy or is contra bonos mores: see Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A).

A contract will be contrary to public policy if its performance, even though not illegal or immoral, is one which the courts will not enforce because performance would be detrimental to the interests of the community.

From the evidence given by the parties, it emerged that one of the parties, if not both, was aware that their transaction might not have been exactly above board.

The defendant gives as his reason for refusing to pay the balance in Rand the knowledge that the payment in foreign currency was illegal. This, he averred, was the reason why he did not pay, as he was afraid of committing an offence. He does not say when he became aware of the illegality attached to the payment in foreign currency in view of his initial payment of the deposit in foreign currency.

In his declaration, the plaintiff makes the averment, that, the contract was illegal as it contravened the Exchange Control Regulations and thus it was incapable of being enforced.

Whilst the agreement itself is not per se illegal, it has nevertheless been tainted by illegality in that the parties breached the Exchange Control Regulations when they were giving effect to its terms and conditions.

Instead of exchanging Rand, the parties could have calculated the official rate of the local currency and payment made accordingly and thus there would have been legal performance of the agreement.

Whilst the plaintiff has prayed that the agreement be cancelled, and for the return of the motor vehicle, the defendant has counter-claimed for the delivery to him of the registration book of the motor against a tender of payment by the defendant of an amount of $3,840,000 which he states is the outstanding balance on the purchase price.

The question that now confronts me is whether or not the contract can be cancelled or whether it is capable of being enforced thus entitling the defendant to an order in terms of the counterclaim.

I would, on this point, respectfully refer to the comments of GUBBAY CJ in Dube v Khumalo 1986 (2) ZLR 103 (SC)…, where he stated:

“There are two rules which are of general application. The first is that an illegal agreement which has not yet been performed, either in whole or in part, will never be enforced. This rule is absolute and admits no exception: see Mathews v Rabinowitz 1948 (2) SA 876 (W) at 878; York Estates Ltd v Wareham 1950 (1) SA 125 (SR) at 128. It is expressed in another maxim ex turpi causa non oritur actio.

The second is expressed in another maxim in pari delicto est potior conditio possidentis, which may be translated as meaning 'where parties are equally in the wrong, he who is in possession will prevail'.

The effect of this rule is that where something has been delivered pursuant to an illegal agreement, the loss lies where it falls.

The objective of the rule is to discourage illegality by denying judicial assistance to persons who part with money, goods, or incorporeal rights, in furtherance of an illegal transaction.

But, in suitable cases, the courts will relax the par delictum rule and order restitution to be made. They will do so in order to prevent injustice, on the basis that public policy 'should properly take into account the doing of simple justice between man and man.'”

The agreement before me has only been partially performed by either of the parties.

Whilst the defendant had paid less than half of the purchase price, the plaintiff had not really effected delivery in that the registration book had not been given to the defendant and thus he cannot assume ownership of the vehicle.

Although the agreement itself is not illegal, the manner in which the parties performed part of the agreement has rendered it illegal, and, any order on my part that would lead to the performance of the remaining part of the same would have the effect of giving sanction to the actions of the parties in violating the Exchange Control Regulations.

As a court, I am precluded from encouraging, through orders of court, the commission of acts that are proscribed by the law or the further perpetuation of such acts in clear violation of statutory provisions.

I am therefore of the view, that, this is not an agreement that can be given effect to and this, in my view, disposes of the counter claim of the defendant.

The question remaining on this issue is whether I should then declare the agreement duly cancelled.

When something is illegal, it is in fact null and void.

Thus, a declaration that it has been duly cancelled would clothe the agreement with legality. The only logical manner to treat the agreement is therefore to declare that it is of no force and effect.

What remains now is what is to be done with the vehicle.

The defendant, having acknowledged the unlawful nature of the agreement, has submitted that the court has several options on how to dispose of the matter:

(i) The first is to dismiss the plaintiff's claim in its entirety.

(ii) The second option is strike out the quotation of the price in Rand is not appropriate in view of the illegality of the agreement.

(iii) The defendant has also suggested that the defendant be made to pay the equivalent of ZAR17,000 calculated in accordance with the prevailing rates of exchange, and that, consequentially, the plaintiff be ordered to surrender the registration book to the defendant.

The last three options suggested by the defendant would result in the court giving effect to an illegal agreement. This would run counter to the two maxims that were pronounced by GUBBAY CJ in Dube v Khumalo 1986 (2) ZLR 103 (SC).

The usual manner of treating illegal agreements, where the parties to the same are equally to blame, is to let the loss lie where it fell. However, the courts have a discretion, in suitable cases, to relax the par delicto rule in order to do justice between man and man.

The rationale for this discretion is to prevent injustice where one party is enriched at the expense of another.

In Jajbhay v Cassim 1939 AD 537…, STRATFORD CJ stated the following:

“Courts of law are free to reject or grant a prayer for restoration of something given under an illegal contract, being guided in each case by the principle which underlies and inspired the maxim.

And, in this last connection, I think a court should not disregard the various degrees of turpitude in delictual contracts. And, when the delict falls within the category of crimes, a civil court can reasonably suppose that the criminal law provided an adequate deterring punishment, and, therefore, ordinarily speaking, should not, by its order, increase the punishment of the one delinquent and lessen it of the other by enriching one to the detriment of the other.

And, it follows from what I have said above, in cases where public policy is not foreseeably affected by a grant or refusal of the relief claimed, that a court of law might well decide in favour of doing justice between the individuals concerned and so prevent unjust enrichment.”

It is trite, therefore, that, where an agreement is illegal, a court has the discretion to relax the par delicto rule in order to do justice between man and man where the relief granted would be contrary to public policy.

I was not addressed by either counsel on the question whether granting the relief sought would be contrary to public policy, and, as a consequence, I find that I am not constrained from relaxing the par delicto rule.

Considering the circumstances of the case, it is only proper that I do so in order to do justice between man and man.

The plaintiff parted with a valuable item against payment of an amount which was less than half the purchase price. The defendant thereafter did not pay the outstanding amount within the stipulated period. The agreement provided, that, the full purchase price should have been paid before 20 January 2007.

The defendant readily admitted having failed to pay as stipulated therein.

In his evidence, he alluded to an agreement between himself and the plaintiff, concluded in South Africa, where the plaintiff agreed to extend the period by which payment could be made.

The defendant, however, was unable to state the date by when he was supposed to have made payment under the alleged verbal contract.

It is highly improbable, in my view, that the plaintiff, having in the agreement of sale stipulated a time period for payment of the purchase price, would be so accommodating as to allow the defendant an unlimited extension of time by which to pay the balance.

The defendant was already in mora and it would only be sensible and reasonable if the plaintiff was to allow more time to put the defendant on terms about payment.

In his evidence, which was not seriously challenged by the defendant, the plaintiff said he wanted to use the money for a business venture hence his stipulation for a time period on when balance was to have been paid in full.

The plaintiff denied that he had extended the time to the defendant for payment of the balance or that he had given an impression to that effect.

HH535-15 : BLESSMORE CHANAKIRA vs SHEPHERD MALCOM N.O. and REGISTRAR OF DEEDS and PHIL RUSCH
Ruled By: NDEWERE J

The background facts are that the plaintiff expressed interest in Stand 5233 Salisbury Township Lands measuring 3,309 square metres which is the property in dispute.

The property belongs to the estate of the late Robert Eric Rae.

An agreement of sale was concluded, on 22 October 2009, between the plaintiff and the Property Shop, the Estate Agent firm which handled the transactions, for the sum of US$220,000.

On mode of payment, the agreement provided as follows:

“The Purchaser shall pay cash deposit of US$100,000 [one hundred thousand United States Dollars] of which US$30,000 [thirty thousand United States Dollars] shall be non-refundable] upon signing of the agreement of sale.

The purchaser shall pay the sum of US$60,000 [sixty thousand United States Dollars] on or before 30 November 2009 and the balance of US$60,000 [sixty thousand United States Dollars] on or before the 31st December 2009.”

The above mode of payment has been the source of the dispute.

The plaintiff claims to have paid theUS$100,000 cash deposit upon signing of the agreement of sale as stipulated by the clause. The first defendant, representing the estate, denies, that any deposit was paid.

The agreed issues for the trial were:

(i) Whether the plaintiff breached the agreement of sale with the first defendant, and, if he did, whether the first defendant cancelled the sale.

(ii) The second agreed issue was whether this was a double sale, with the third defendant as the second purchaser, and, if so, in whose favour did the balance of equities lie.

In my view, the first issue for determination by the court is whether the plaintiff paid the requisite deposit upon signature of the agreement.

The plaintiff's evidence was that he paid US$100,000, in cash, to Felicity Lock, The Property Shop negotiator, after counting the money, at her house, in the presence of Shirley Margaret Rae who represented the seller, who was still alive, by virtue of a Power of Attorney.

He said he did not ask for a receipt, neither did he obtain any other proof of payment from Felicity Lock.

The plaintiff's evidence was that he paid the US$100,000 before he signed the agreement because payment of that amount was a condition precedent to the signing of the agreement.

Felicity Lock denied that any payment was made.

She said she expected the plaintiff to pay soon after signing but then the plaintiff showed her some Kingdom Bank documents and said for him to get the money to pay, he needed to sell his shares first, and, for him to sell the shares, he needed a signed agreement.

She said she then gave him Shirley's Rae's Stanbic Account number and told him to deposit the money into that account. She also gave him a Property Shop Account number for him to deposit the agency commission.

Her evidence was that Shirley Rae signed the agreement first, in the absence of the plaintiff, and, later, she took the agreement to the plaintiff at some agreed meeting place near Hellenic School.

Shirley Rae also denied that any payment was made to her or Felicity Lock in her presence.

Her testimony was that she had not even met the plaintiff when the agreement was executed; she saw him, for the first time, at the pre-trial conference.

The plaintiff told the court that he is an astute businessman aged 35 years. He said he has been in business since he was 22 years old and has about 13 years business experience. He also said he is a qualified accountant and he has experience in the acquisition of properties as he has eleven properties to his name.

The court found it highly improbable that a qualified accountant, and an experienced property investor, would part with US$100,000 cash in the year 2009, when foreign currency was still scarce, without bothering to obtain a receipt or other proof of payment; yet that was the plaintiff's evidence on pages 51 and 52 of the transcribed record;

“Q. Now, before a dispute before the parties erupted, did you ever ask for a receipt?

A. No, from Felicity, no, I never asked for a receipt….,.

Q. It's a simple question, did you ever ask for a receipt?

A. From Felicity Lock.

Q. Did you ever ask for a receipt?

A. No, I have proof of payment.”

When the questioning about not asking for a receipt persisted, the plaintiff, in response, said, Property Shop was operating from home and the office was not running professionally.

All the more reason why he should have asked for a receipt, or some other form of proof of payment, if he knew that Property Shop was not being run professionally.

The plaintiff also told the court, in his evidence, that, paying US$100,000 cash was a condition precedent to the signing of the agreement.

The agreement is part of the court record, and, nowhere does the agreement say payment was a condition precedent.

It is also highly improbable that a qualified accountant would pay US$100,000 deposit before the agreement has been concluded and leave without any proof of payment.

Even if Felicity Lock had no receipts, on account of being “unprofessional” as the plaintiff alleged, the plaintiff himself could have prepared an acknowledgement note.

He knew this was possible:

“Q…., you could have done an acknowledgement of receipt and say I, Felicity acknowledge that I have received US$100 000, you could have done that….,.

A. I could have done that.”…,. (p57 to 58 of the transcribed record)

The plaintiff confirmed, that, he could have done an acknowledgement of receipt himself - but he did not.

He admitted, that, as a businessman, he knew that disputes could arise and that he could have had an independent witness with him to confirm the payment; but, he said he went alone to make this huge cash payment.

On the other hand, Felicity Lock's evidence was that they did not accept cash as a matter of policy; they gave clients account details for them to deposit the money into the appropriate accounts.

She said, in this instance, she gave the plaintiff Shirley Rae's Stanbic account.

She said once the money was deposited into an account, the deposit slip would be sufficient proof of payment.

Her evidence sounded truthful and the court accepted it.

Shirley Rae is an 83 year old lady who was around 78 years at the time of the incident with the plaintiff.

Her evidence was that the plaintiff never paid cash in her presence and never deposited any money into her account.

Her evidence was believable.

Why would an 83 year old lie against the plaintiff and say he did not pay if he had paid? All she wanted was a purchaser who would pay for her husband's property. If the plaintiff had paid, why would she have turned down his money in favour of the third defendant's money when the money tastes the same?

The court therefore accepts her evidence as truthful.

In addition to that, on 27 October 2009, when the plaintiff wrote to the second defendant, through his lawyers, requesting him to put a caveat on the property, he never said he had paid anything.

The third paragraph of that letter stated the following;

“The agreement of sale is to be satisfied within a period of three instalments as it fully appears from the attached copy of the agreement of sale.”

The use of the phrase “is to be satisfied” shows that payment had not yet been done.

If the plaintiff had already paid US$100,000 the letter would have said so.

In view of the above improbabilities in the plaintiff's claims, the court rejects the plaintiff's testimony and accepts that of Felicity Lock and Shirley Rae, that, no US$100,000 cash was ever paid by the plaintiff as a deposit for the property.

The above finding means the plaintiff was in breach of contract from the very day the sale agreement was concluded. He ought to have paid US$100,000 on signing of the agreement - he did not.

That was the first breach.

The plaintiff admitted breaching the further requirements to pay $60,000 by end of November and $60,000 by end of December.

These were the second and third breaches respectively.

In view of the three breaches, the plaintiff has no basis to claim specific performance by the first defendant.

As held in the case of Lasagne Investments (Pvt) Ltd & Others v Highdon Investments (Pvt) Ltd & Others 2010 (2) ZLR 296…, referred to by the third defendant's counsel, a litigant who seeks an order for specific performance must perforce establish that he has complied with his obligations under the agreement.

The first defendant, through its representatives, comprising of the Property Shop and Sinyoro and Partners, gave the plaintiff some grace period.

Felicity Lock's evidence was that she continued to follow up for payment.

Mataba of Sinyoro and Partners evidence was that when the plaintiff stopped responding to the Property Shop's follow-up, he got into the fray and also followed up the plaintiff.

All the plaintiff paid was the Agents Commission and the Conveyancing fees.

These follow ups and indulgences were in order because of the provisions of clause 8 of the agreement of sale between the parties.

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Law Portal Zimbabwe

Variation of Contracts re: Approach and Resolution of Contractual Lacunas

HH38-10 : LUCIA MUNYANYI vs LIMINARY INVESTMENTS AND ISRAEL GUMUNYU N.O. Ruled By: MAKARAU JP

SC13-09 : CALISTO CHIRENJE vs VENDFIN INVESTMENTS (PRIVATE) LIMITED AND TWO OTHERS Ruled By: CHIDYAUSIKU CJ, SANDURA JA and MALABA JA

HH27-09 : ZIMRE PROPERTY INVESTMENTS LI MITED vs JOANDRISA ANIMAL FEEDS (PVT) LTD Ruled By: UCHENA J

Appealed HH58-10 : DRAWING SERVICES (PVT) LTD vs BETTY KANYUCHI Ruled By: BERE J

HH92-09 : SUPA PLANT INVESTMENTS (PVT) LTD vs EDGAR CHIDAVAENZI Ruled By: MAKARAU JP

HH117-09 : MICHAEL KATEKETA vs ONE WORLD GALLERIES (PVT) LTD and A MPOPOMA Ruled By: MAKARAU JP

HH160-09 : SMART GONONDO vs ALICE MUTEPFA and PORTIA NYAMAROPA and CITY OF MUTARE (DIRECTOR OF HOUSING) Ruled By: MAVANGIRA J

HH169-09 : GRAMARA (PRIVATE) LIMITED and COLIN CLOETE vs GOVERNMENT OF THE REPUBLIC OF ZIMBABWE and ATTORNEY-GENERAL OF ZIMBABWE and NORMAN KAPANGA (INTERVENER) Ruled By: PATEL J

HH55-10 : JEREMY STANDER vs NELTRA INVESTMENTS t/a DOUGLAS CAR SALES Ruled By: BERE J

HH106-10 : COLLIN DUBE AND 129 OTHERS vs TUNGPAL INVESTMENTS (PVT) LTD and THE MESSENGER OF COURT, HARARE Ruled By: BHUNU J

HH121-10 : POWER COACH EXPRESS (PVT) LIMITED vs MARTIN MILLERS AND ENGINEERS Ruled By: BERE J

HH160-10 : TONDERAI HAMANDISHE and GAMUCHIRAI SANGARE vs MAFFACK PROPERTIES (PVT) LTD Ruled By: MTSHIYA J

HH132-10 : CABINET MACHINGAMBI and PATRICIA CHIMBALAMI and SIMBAI MANGENA and OTHERS vs DOUGLAS NYAUDE and D. MNETSI ENTERPRISES and REGISTRAR OF DEEDS Ruled By: BHUNU J

HH227-10 : MIKE MAKOPE vs GEOFFREY DZUMBUNU and REGISTRAR OF DEEDS N.O. and MINISTER OF LOCAL GOVERNMENT Ruled By: MAVANGIRA J

HH231-10 : AGRICULTURAL BANK OF ZIMBABWE LTD t/a AGRIBANK vs NICKSTATE INVESTMENTS (PVT) LTD and RICHARD MAKWARA and PLAXEDES MAKWARA Ruled By: GOWORA J

HH236-10 : NATIONAL SOCIAL SECURITY AUTHORITY vs ALEC RYALS AND SKOTRIL (PRIVATE) LIMITED and ALEC KAGURU Ruled By: MUTEMA J

HB95-16 : NATIONAL RAILWAYS OF ZIMBABWE CONTRIBUTORY PENSION FUND vs EKUTULENE INVESTMENTS t/a WALKERS PUB AND RESTAURANT and WAYNE ALLAN JONES Ruled By: MATHONSI J

HH797-15 : PETER KAZINGIZI and THERESA MUCHABAIWA KAZINGIZI vs EQUITY PROPERTIES (PVT) LTD Ruled By: MATHONSI J

Appealed SC41-18 : MARIAN CHOMBO vs IGNATIOUS CHOMBO Ruled By: MALABA CJ, HLATSHWAYO JA and UCHENA JA

HB157-16 : NRZ CONTRIBUTORY PENSION FUND vs JOSRO ENTERPRISES (PVT) LTD t/a ASCOT PUB & GRILL Ruled By: TAKUVA J

HH169-15 : ZIMBABWE PLATINUM MINES (PRIVATE) LIMITED vs ZIMBABWE REVENUE AUTHORITY and STANBIC BANK and MNISTERS OF MINES AND MINING DEVELOPMENT and MINERALS MARKETING CORPORATION OF ZIMBABWE Ruled By: MAKONI J

HH06-18 : SIMBARASHE PASIPAMIRE vs GLOBAL PROPERTY ADVISORY & TECHNICAL SERVICES Ruled By: MANGOTA J

View Appeal SC29-13 : BETTY KANYUCHI vs DRAWING SERVICES (PVT) LTD Ruled By: MALABA DCJ, GARWE JA and GOWORA JA

View Appeal SC47-20 : ROBSON MAKONI vs CBZ LIMITED Ruled By: GWAUNZA DCJ, GUVAVA JA and MAKONI JA

Appealed SC58-20 : YUSUF GAIBIE and MILLY GAIBIE N.O. vs ALEXANDER CASTANHEIRA and RACHEL CASTANHEIRA Ruled By: GARWE JA, BHUNU JA and MAKONI JA

View Appeal HB179-18 : YUSUF GAIBIE and MAHMOUD GAIBIE vs ALEXANDER CASTANHEIRA and RACHEL CASTANHEIRA Ruled By: MAKONESE J

View Appeal HH563-18 : CAR RENTAL SERVICES (PVT) LTD T/A AVIS RENT A CAR vs BERNARD CHISWA and SHAILLON CHISWA Ruled By: MUZOFA J

HH177-17 : GILBERT JONGA vs NYASHA CHABATA Ruled By: CHATUKUTA J

SC61-07 : AGRICULTURAL BANK OF ZIMBABWE LIMITED t/a AGRIBANK vs CLEMIO MACHINGAIFA AND CHENJERAI MUTAMBISI Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

SC12-21 : TOBACCO PROCESSORS ZIMBABWE (PRIVATE) LIMITED vs TONGOONA MUTASA and OTHERS Ruled By: MAVANGIRA JA, MAKONI JA and CHATUKUTA AJA

SC13-21 : MOSES MAWIRE vs RIO ZIM LIMITED (PRIVATE) LIMITED Ruled By: GOWORA JA, PATEL JA and MAVANGIRA JA

HH965-15 : CONPLANT TECHNOLOGY (PVT) LTD vs WENTSPRING INVESTMENTS (PVT) LTD Ruled By: MAFUSIRE J

View Appeal HH601-14 : SHI JINWU vs BIG VALLEY MASTERS (PRIVATE) LIMITED and PHILLIMON MUBATA Ruled By: CHIGUMBA J

Appealed SC82-21 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES LIMITED vs ZIMBABWE REVENUE AUTHORITY and OTHERS Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE AJA

View Appeal HMA28-20 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES vs ZIMBABWE REVENUE AUTHORITY and OTHERS Ruled By: ZISENGWE J

SC127-21 : MIDLANDS STATE UNIVERSITY vs GALAXY ENGINEERING DESIGN CONSULTANTS (PRIVATE) LIMITED Ruled By: GWAUNZA DCJ, BHUNU JA and MATHONSI JA

HB37-15 : LAWRENCE CLEMINSON vs BRIAN SHER and RUEBEN POSWELL (as executor in the Estate Late Sally Lieber also known as Sally Zella Lieber) Ruled By: MUTEMA J

HB37-15 : LAWRENCE CLEMINSON vs BRIAN SHER and RUEBEN POSWELL (as executor in the Estate Late Sally Lieber also known as Sally Zella Lieber) Ruled By: MUTEMA J

HB44-15 : RAILWAYS ARTISAN UNIONS vs NATIONAL RAILWAYS OF ZIMBABWE and OTHERS Ruled By: TAKUVA J

HB53-15 : ZB BUILDING SOCIETY vs TAKESURE MASANZU Ruled By: MOYO J

HH109-08 : LLOYD GAMBIZA vs PIKIRAI TAZIVA Ruled By: GOWORA J

HH535-15 : BLESSMORE CHANAKIRA vs SHEPHERD MALCOM N.O. and REGISTRAR OF DEEDS and PHIL RUSCH Ruled By: NDEWERE J

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Zimbabwe

HH38-10 : LUCIA MUNYANYI vs LIMINARY INVESTMENTS AND ISRAEL GUMUNYU N.O.
Ruled By: MAKARAU JP

SC13-09 : CALISTO CHIRENJE vs VENDFIN INVESTMENTS (PRIVATE) LIMITED AND TWO OTHERS
Ruled By: CHIDYAUSIKU CJ, SANDURA JA and MALABA JA

HH27-09 : ZIMRE PROPERTY INVESTMENTS LI MITED vs JOANDRISA ANIMAL FEEDS (PVT) LTD
Ruled By: UCHENA J

Appealed
HH58-10 : DRAWING SERVICES (PVT) LTD vs BETTY KANYUCHI
Ruled By: BERE J

HH92-09 : SUPA PLANT INVESTMENTS (PVT) LTD vs EDGAR CHIDAVAENZI
Ruled By: MAKARAU JP

HH117-09 : MICHAEL KATEKETA vs ONE WORLD GALLERIES (PVT) LTD and A MPOPOMA
Ruled By: MAKARAU JP

HH160-09 : SMART GONONDO vs ALICE MUTEPFA and PORTIA NYAMAROPA and CITY OF MUTARE (DIRECTOR OF HOUSING)
Ruled By: MAVANGIRA J

HH169-09 : GRAMARA (PRIVATE) LIMITED and COLIN CLOETE vs GOVERNMENT OF THE REPUBLIC OF ZIMBABWE and ATTORNEY-GENERAL OF ZIMBABWE and NORMAN KAPANGA (INTERVENER)
Ruled By: PATEL J

HH55-10 : JEREMY STANDER vs NELTRA INVESTMENTS t/a DOUGLAS CAR SALES
Ruled By: BERE J

HH106-10 : COLLIN DUBE AND 129 OTHERS vs TUNGPAL INVESTMENTS (PVT) LTD and THE MESSENGER OF COURT, HARARE
Ruled By: BHUNU J

HH121-10 : POWER COACH EXPRESS (PVT) LIMITED vs MARTIN MILLERS AND ENGINEERS
Ruled By: BERE J

HH160-10 : TONDERAI HAMANDISHE and GAMUCHIRAI SANGARE vs MAFFACK PROPERTIES (PVT) LTD
Ruled By: MTSHIYA J

HH132-10 : CABINET MACHINGAMBI and PATRICIA CHIMBALAMI and SIMBAI MANGENA and OTHERS vs DOUGLAS NYAUDE and D. MNETSI ENTERPRISES and REGISTRAR OF DEEDS
Ruled By: BHUNU J

HH227-10 : MIKE MAKOPE vs GEOFFREY DZUMBUNU and REGISTRAR OF DEEDS N.O. and MINISTER OF LOCAL GOVERNMENT
Ruled By: MAVANGIRA J

HH231-10 : AGRICULTURAL BANK OF ZIMBABWE LTD t/a AGRIBANK vs NICKSTATE INVESTMENTS (PVT) LTD and RICHARD MAKWARA and PLAXEDES MAKWARA
Ruled By: GOWORA J

HH236-10 : NATIONAL SOCIAL SECURITY AUTHORITY vs ALEC RYALS AND SKOTRIL (PRIVATE) LIMITED and ALEC KAGURU
Ruled By: MUTEMA J

HB95-16 : NATIONAL RAILWAYS OF ZIMBABWE CONTRIBUTORY PENSION FUND vs EKUTULENE INVESTMENTS t/a WALKERS PUB AND RESTAURANT and WAYNE ALLAN JONES
Ruled By: MATHONSI J

HH797-15 : PETER KAZINGIZI and THERESA MUCHABAIWA KAZINGIZI vs EQUITY PROPERTIES (PVT) LTD
Ruled By: MATHONSI J

Appealed
SC41-18 : MARIAN CHOMBO vs IGNATIOUS CHOMBO
Ruled By: MALABA CJ, HLATSHWAYO JA and UCHENA JA

HB157-16 : NRZ CONTRIBUTORY PENSION FUND vs JOSRO ENTERPRISES (PVT) LTD t/a ASCOT PUB & GRILL
Ruled By: TAKUVA J

HH169-15 : ZIMBABWE PLATINUM MINES (PRIVATE) LIMITED vs ZIMBABWE REVENUE AUTHORITY and STANBIC BANK and MNISTERS OF MINES AND MINING DEVELOPMENT and MINERALS MARKETING CORPORATION OF ZIMBABWE
Ruled By: MAKONI J

HH06-18 : SIMBARASHE PASIPAMIRE vs GLOBAL PROPERTY ADVISORY & TECHNICAL SERVICES
Ruled By: MANGOTA J

View Appeal
SC29-13 : BETTY KANYUCHI vs DRAWING SERVICES (PVT) LTD
Ruled By: MALABA DCJ, GARWE JA and GOWORA JA

View Appeal
SC47-20 : ROBSON MAKONI vs CBZ LIMITED
Ruled By: GWAUNZA DCJ, GUVAVA JA and MAKONI JA

Appealed
SC58-20 : YUSUF GAIBIE and MILLY GAIBIE N.O. vs ALEXANDER CASTANHEIRA and RACHEL CASTANHEIRA
Ruled By: GARWE JA, BHUNU JA and MAKONI JA

View Appeal
HB179-18 : YUSUF GAIBIE and MAHMOUD GAIBIE vs ALEXANDER CASTANHEIRA and RACHEL CASTANHEIRA
Ruled By: MAKONESE J

View Appeal
HH563-18 : CAR RENTAL SERVICES (PVT) LTD T/A AVIS RENT A CAR vs BERNARD CHISWA and SHAILLON CHISWA
Ruled By: MUZOFA J

HH177-17 : GILBERT JONGA vs NYASHA CHABATA
Ruled By: CHATUKUTA J

SC61-07 : AGRICULTURAL BANK OF ZIMBABWE LIMITED t/a AGRIBANK vs CLEMIO MACHINGAIFA AND CHENJERAI MUTAMBISI
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

SC12-21 : TOBACCO PROCESSORS ZIMBABWE (PRIVATE) LIMITED vs TONGOONA MUTASA and OTHERS
Ruled By: MAVANGIRA JA, MAKONI JA and CHATUKUTA AJA

SC13-21 : MOSES MAWIRE vs RIO ZIM LIMITED (PRIVATE) LIMITED
Ruled By: GOWORA JA, PATEL JA and MAVANGIRA JA

HH965-15 : CONPLANT TECHNOLOGY (PVT) LTD vs WENTSPRING INVESTMENTS (PVT) LTD
Ruled By: MAFUSIRE J

View Appeal
HH601-14 : SHI JINWU vs BIG VALLEY MASTERS (PRIVATE) LIMITED and PHILLIMON MUBATA
Ruled By: CHIGUMBA J

Appealed
SC82-21 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES LIMITED vs ZIMBABWE REVENUE AUTHORITY and OTHERS
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE AJA

View Appeal
HMA28-20 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES vs ZIMBABWE REVENUE AUTHORITY and OTHERS
Ruled By: ZISENGWE J

SC127-21 : MIDLANDS STATE UNIVERSITY vs GALAXY ENGINEERING DESIGN CONSULTANTS (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, BHUNU JA and MATHONSI JA

HB37-15 : LAWRENCE CLEMINSON vs BRIAN SHER and RUEBEN POSWELL (as executor in the Estate Late Sally Lieber also known as Sally Zella Lieber)
Ruled By: MUTEMA J

HB37-15 : LAWRENCE CLEMINSON vs BRIAN SHER and RUEBEN POSWELL (as executor in the Estate Late Sally Lieber also known as Sally Zella Lieber)
Ruled By: MUTEMA J

HB44-15 : RAILWAYS ARTISAN UNIONS vs NATIONAL RAILWAYS OF ZIMBABWE and OTHERS
Ruled By: TAKUVA J

HB53-15 : ZB BUILDING SOCIETY vs TAKESURE MASANZU
Ruled By: MOYO J

HH109-08 : LLOYD GAMBIZA vs PIKIRAI TAZIVA
Ruled By: GOWORA J

HH535-15 : BLESSMORE CHANAKIRA vs SHEPHERD MALCOM N.O. and REGISTRAR OF DEEDS and PHIL RUSCH
Ruled By: NDEWERE J