ZIYAMBI JA:
This is an appeal against a
judgment of the High Court which ordered
the appellant to pay to the respondent the sum of USD 301 000 for goods sold
and delivered as well as interest thereon at the prescribed
rate and costs.
The background facts are set
out in the judgment of the court a quo.
The appellant, a company with limited
liability incorporated in terms of the Companies Act [Chapter 24:03], is a mining conglomerate in Zimbabwe. It owns, among others, the four mines which
are the subject matter of this litigation which commenced with the issue of
summons by the respondent as plaintiff in the High Court on 13 December
2013. The claim as initially set out was
made up of goods to the total value of US$360 764.41 as follows:-
US$78 485-61 delivered to Shamva
Gold Mine;
US$ 245 467-82 delivered to How Gold Mine;
US$ 626-96 delivered to Redwing Gold Mine;
and
US$ 36 184-02 delivered to Mazoe Gold
Mine.
The claim was denied by
the appellant. In para 4 of its plea it
averred:
“While
the defendant accepts that certain electrical goods were purchased by it from
the plaintiff, defendant denies receipt of most of the goods to which the
claim relates and puts plaintiff to the proof thereof. The defendant further avers that plaintiff
has been requested to provide a proper and correct summary of goods delivered
in order for payment to be made but plaintiff is still to do so. The defendant further denies that any proper
demand for payment had been made by the plaintiff as alleged.”
During
April 2012, three pre-trial conferences were held at which the parties
attempted to reconcile the figures in order to arrive at some consensus as to
the amount owing and a possible settlement. The figures having been so
reconciled, the amount claimed was reduced to $301 342.73. However, the parties were unable to agree on
the outstanding issues and, on 30 April 2012, the matter was referred to trial
on three issues, namely:-
(i)
Whether the defendant is
indebted to the Plaintiff in the sum claimed or any other sum at all;
(ii)
Whether the defendant
received all the goods forming the subject of the plaintiffs claim; and
(iii)
Whether due and proper
demand for payment was made to the defendant prior to the issue of summons.
After a full trial in
which evidence, including expert evidence from engineers, was led by both parties,
the learned Judge made factual findings in favour of the respondent on the first
two issues. With regard to the third
issue, he found that proper demand had not been made and that therefore
interest should run from the date of summons.
In
addition, the court considered, and dismissed, a belated attempt by the appellant
to set off the amount claimed by the respondent against amounts allegedly owing
to it in respect of some of the goods which it was claimed were returned for
being substandard and unfit for the purpose for which they were purchased. Set off was at no stage of the proceedings
pleaded although it was canvassed in the proceedings.
THE GROUNDS OF APPEAL
The grounds of appeal essentially
attack the various findings of fact made by the trial Judge.
Ground 1, makes the vague
allegation that the trial court misdirected itself in granting judgment in
favour of the respondent when it was common cause that the respondent had
failed to deliver some equipment to the appellant's Shamva mine.
Ground 2 attacks the
court a quo for not finding that all
the contracts of sale had been rescinded.
Ground 3 attacks the
court's finding that set off had not been established.
Ground 4 takes issue with
specific findings of fact made by the trial Judge.
There
was a concession by MrTandi, for the
appellant, that the contracts of sale had not been rescinded. Accordingly ground 2 need not detain us any
further.
GROUND 1: THE DELIVERY OF GOODS TO SHAMVA MINE.
The learned Judge made a thorough
analysis of the evidence obtained from the ledgers and purchase orders in
respect of the Shamva Mine account. It
is unnecessary to repeat the detailed evidence.
Suffice it to say that a reading of the record reveals no misdirection
on his part in this regard. In addition,
as the learned Judge observed, Fore, the appellant's witness,
admitted that all the goods in respect of the claim in the summons for Shamva Mine
were delivered. That fact was a
sufficient basis for the finding by the learned Judge that the goods in respect
of which payment was claimed in the summons were delivered to Shamva Mine.
GROUND 3: WHETHER SET-OFF
WAS ESTABLISHED
Set
off must be pleaded and proved. The
appellant, while challenging the quantity of the goods received, did not plead
set off. The doctrine was explained by
INNES CJ in Schierhout v Union Government
1926 AD 286 at p 289 – 290 as follows:-
“The
doctrine of set-off with us is not derived from statute and regulated by rule
of court, as in England. It is a recognized principle of our common law. When
two parties are mutually indebted to each other, both debts being liquidated
and fully due, then the doctrine of compensation comes into operation. The one
debt extinguishes the other pro tanto as
effectually as if payment had been made. Should one of the creditors seek
thereafter to enforce his claim, the defendant would have to set up the defence
of compensatio by bringing the facts
to the notice of the court – as indeed the defence of payment would also have
to be pleaded and proved. But, compensation once established, the claim would
be regarded as extinguished from the moment the mutual debts were in existence
together”.
See
also Commissioner of Taxes v First
Merchant Bank Ltd
where GUBBAY CJ said:
“At common law, set-off or compensatio is a method by which mutual
debts, being liquidated and due, may be extinguished; if unequal, the smaller
is discharged and the larger is proportionally reduced”.
For set-off to operate
the defendant must be in a position to say “the plaintiff owes me a debt”
rather than “I have a claim against him”. The debt must be capable of easy and
speedy proof.
The learned Judge
considered the defence of set-off on the basis that, while it was not pleaded
as a defence, it was sufficiently ventilated by the parties before the issue of
summons and during the trial.
The appellant raised this
defence in respect of mixers delivered to Mazowe Mine and a motor control centre
system purchased for Shamva Mine but which remained undelivered at the date of
summons. Regarding the motor control
system it was common cause that the appellant had made prepayments to the
respondent totaling USD149 006,10 for the system which comprised of a motor control
centre and six variable speed drives; that the respondent did not appropriate
that amount to the debt alleged in the summons or the proved debt of USD301
342. 73 but used it rather in the manufacture of the motor control system; that
at the close of pleadings on 3 February 2012 the manufacture of the motor
control system was still in progress; and that the appellant did not cancel the
contract of sale of the motor control system. In addition, the court found that the
appellant had not placed the respondent in
mora and that the failure to deliver in these circumstances did not amount
to a debt due for the purposes of set off.
The appellant's contention
that it was entitled to set off on the basis of non-delivery of the motor control
system was in my view correctly rejected by the court a quo on the basis of its finding that the appellant had neither
cancelled the contract nor placed the respondent in mora.
As to the mixers
delivered to Mazowe mine, the defence of set off was raised against the amounts
claimed by the respondent on the basis that the mixers had failed to function
because of latent mechanical defects.
However, after hearing expert evidence, the court a quo was satisfied that the problems bedeviling the functioning of
the mixers were the result of operational ineptitude by the appellant's employees
as opposed to latent mechanical defects.
Indeed, correspondence on record indicates that the parties were working
together to resolve the problem. After a detailed analysis and careful
assessment of the evidence, the learned Judge rejected the evidence of the
appellant's witnesses which evidence he found to be unreliable and unworthy of
belief and concluded that the appellant had failed to establish the fact that
the goods were returned by the appellant because of latent defects and,
therefore, the defence of set off based thereon.
At
p 12 of
the cyclostyled judgment the court observed:-
“The
report of Sana (the appellant's witness) defies his conclusion that the mixers
at both Mazowe and Shamva were a total failure.
They were running but faced problems that appear to me to be operational
in the sense that the defendant's (appellant's) employees failed to follow laid down
operating procedures in running the equipment.”
The court noted also, and
that was the uncontroverted evidence of the respondent, that the appellant only
took the position that the problems were of a mechanical nature after the issue
of summons. Before that, the appellant was content with repair of the damaged
equipment in terms of the warranty. I
find no misdirection in the approach of the trial court and its conclusion, in
my view, accords with the evidence on record.
GROUND 4: FACTUAL FINDINGS.
It
is settled that an appellate court will not interfere with factual findings
made by a trial court unless those findings were grossly unreasonable in the
sense that no reasonable tribunal applying its mind to the same facts would
have arrived at the same conclusion; or that the court had taken leave of its
senses; or, put otherwise, the decision is so outrageous in its defiance of
logic that no sensible person who had applied his mind to the question to be decided
could have arrived at it.
The
factual issues raised by the appellant in its notice of appeal were carefully
considered by the learned Judge who gave detailed reasons for his decision on
the facts. None of the established grounds for interference as set out above
has been established. On the contrary, the judgment of the court a quo is detailed and well-reasoned and
his findings accord with the probabilities of the matter. His preference of the evidence of the
respondent's witnesses against that of the appellant's witnesses is amply
supported by the record. No basis, therefore, has been established for
interference with the judgment of the court a
quo.
The appeal is, for the
above reasons, dismissed with costs.
GARWE JA: I agree
PATEL JA: I agree
Machingambi Legal Practitioner,
plaintiff's legal practitioners
Kantor & Immerman,
defendant's legal practitioners
