MATHONSI
J:
In
this summary judgment application, the two plaintiffs, who are
husband and wife, seek to recover from the defendant a sum of $31
353-00 being the outstanding balance of the purchase price they paid
to the defendant in anticipation of the successful conclusion of a
sale agreement involving stand 2073 Salisbury Township of Lot 3
Bannockburn.
On
18 November 2013 the parties signed a written undertaking to enter
into a sale agreement. It reads:
“In
consideration of Peter Kazingizi and Theresa Muchabaiwa Kazingizi, of
6185 Rosedeane Drive, Bloomingdale, Harare agreeing to:
(a)
Purchase
a certain piece of land
situated in the District of Salisbury called number 2073 Salisbury
Township, measuring 2270 square metres being a subdivision of Lot 3
of Bannockburn, held under deed of transfer number 9068/2008. The
said subdivision is hereinafter referred to as the 'Golden CT
Stand.'
(b)
Pay US$ 23 495 (twenty three thousand four hundred and ninety five
United States Dollars) as deposit and thereafter pay US$ 23 494
(twenty three thousand four hundred and ninety four United States
dollars) as further deposit in three equal monthly instalments
commencing 31 December 2013 and ending 28 February 2014 plus interest
of 12 % per
annum
on the above further deposit on or before 28 February 2014.
We,
the under signed, on behalf of Equity Properties (Pvt) Ltd do hereby,
undertake to enter into a written agreement of sale between Equity
Properties (Private) Limited and Peter Kazingizi and Theresa
Muchabaiwa Kazingizi in respect of the above mentioned Golden CT
Stand upon receipt of the total deposit of US$ 46 989 and the
respective interest.
This
undertaking is not an agreement of sale but a commitment to enter
into an agreement of sale
based on our standard agreement of sale which is signed by two
authorised signatories, failure of which Equity Properties (Pvt) Ltd
undertakes to refund Peter Kazingizi and Theresa Muchabaiwa the money
paid without any delay.
This
undertaking is valid until 28 February 2014.” (The underlining is
mine)
As
I have said the undertaking was signed by the parties – two
representatives of the defendant and the two plaintiffs. It is worded
in clear terms which admit of no ambiguity whatsoever and must
therefore be given its ordinary grammatical meaning. As stated by
McNally JA in Chegutu
Municipality v
Manyora
1996 (1) ZLR 262 (S) 264 D-E:
“There
is no longer magic about interpretation. Words must be taken in their
context. The grammatical and ordinary sense of the words is to be
adhered to as said in Grey
v Pearson
(1957)
10 ER 1216 at 1234, 'unless that would lead to some absurdity, or
some repugnance or inconsistency with the rest of the instrument in
which case the grammatical and ordinary sense of the words may be
modified so as to avoid that absurdity and inconsistency, but no
further.'”
See
also Madoda
v
Tanganda
Tea Company Ltd
1999 (1) ZLR 374 (S);
S
v
Nottingham Estates (Pvt) Ltd 1995
(1) ZLR 253 (S).
What
is clear from that undertaking is that it is the defendant, in the
main, which was making an undertaking to enter into “a written
agreement of sale.” The undertaking was made in consideration of
the plaintiffs “agreeing to purchase” the property and to pay the
deposit of $46,989-00. The plaintiffs did not really make any
undertaking but it was recognised that they had to agree to purchase
the property and to pay the deposit. Clearly the undertaking was not
an agreement of sale but a mere commitment to enter into one, an
invitation to treat. It could therefore not be enforced as a sale
agreement.
The
plaintiffs duly paid the deposit of $46,989-00 but when the defendant
produced its standard sale agreement, they did not agree with the
terms. They then decided not to enter into the sale agreement and
demanded a refund of the deposit that they had paid. In response the
defendant wrote a “without prejudice” letter dated 9 April 2014
which reads in relevant part:
“By
agreeing to the terms of the undertaking letter we did not expect
them not to sign the agreement of sale.
In
the said undertaking letter we undertake to refund the client without
delay and as such are refunding them within 90 days. Your statement
those '90 days cannot be said to be without any delay' is a
matter of opinion. Furthermore your client paid the US$46 989 over a
period of more than 90 days. Your clients have refused to sign the
cancellation agreement of payments made under the above mentioned
undertaking rendering it difficult for us to sell the stand and raise
the money to refund them. Furthermore their refusal to sign the said
cancellation agreement of payments made under the above mentioned
undertaking letter which incorporates a refund makes it difficult to
regard the abovementioned undertaking letter as an agreement which
expired without performance. Equity Properties (Pvt) Ltd reserves the
right to sue your clients for damages for not signing the said
cancellation agreement. Equity Properties (Pvt) Ltd is still
agreeable to refunding your clients within the 90 days as stated
below provided your client signs the said cancelation agreement
before the first payment date of
(i)
US$15 631 on the 24th
of April 2014;
(ii)
US$ 15 631 on the 24th
of May 2014; and
(iii)
US$ 15 631 on the 24th
of June 2014.
In
this regard we kindly request for your client's banking details or
for them to call on our offices on the dates mentioned above.”
What
was the defendant saying? How would one seek to cancel a non-existent
agreement. The undertaking it had made to the plaintiffs was that in
the event of them not agreeing to purchase the property they would
refund the money without delay. 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.
Whatever
the case, what is apparent from that letter is that the defendant
appreciated that there was no sale agreement between the parties. It
undertook to refund the money but on new terms and even set out a
payment plan. Even its threat to sue was not to enforce a sale
agreement but to seek damages arising out of the plaintiff's
refusal to sign a cancellation agreement.
The
defendant may have had a change of heart because after refunding only
$20,631-00 in drips and drabs, it made an about turn upon receipt of
the summons for payment of the balance of $26,353-00. The defendant
entered appearance to defend prompting the plaintiffs to make this
application for summary judgment which the defendant is opposing. In
its opposing affidavit deposed to by its Senior manager, Kumbirai
Matimba, the defendant asserts that it is not obliged to refund the
balance firstly because its “without prejudice” offer to refund
was not accepted, secondly because the plaintiffs refused to sign a
cancellation agreement and thirdly because in the undertaking letter,
the plaintiffs gave up any right to negotiate the terms of the sale
agreement and as such are bound by the standard agreement even though
it was never agreed. In my view that is a bogus defence.
Let
me first deal with the issue of the “without prejudice” letter of
9 April 2014 addressed by the defendant to the plaintiffs' legal
practitioners. It is significant that no direct claim is made to
privilege except what was raised by Ms Magaya
from the bar. Even if it was, it would not be available to the
defendant. The expression “without prejudice” is often written
across the face of a document or communicated expressly to convey the
message that the party communicating the document will not be
prejudiced by the subsequent communications which are conducted with
a view to the settlement of a dispute.
Of
course even parties who do not know what they are doing or why they
are doing it often timidly inscribe the maxim on correspondence out
of fear of being held to account for what they would have
communicated. I say this because there is no logic whatsoever for a
party who accepts liability to refund money paid in anticipation of
the conclusion of a sale agreement and is making a payment plan, to
then send the payment plan on a “without prejudice” basis. What
prejudice is there to talk about?
In
our law, documents do not necessarily have to be marked “without
prejudice” for them to be protected: Gcabashe
v
Nene
1975
(3) SA 912 at 941 E. Inversely, merely labelling a document “without
prejudice” does not necessarily confer any privilege on the
contents. What is important is whether the communication is
considered privileged from an objective point of view: Crowford
v
Roset
and Cornale (1992)
69 B.C.L.R (2d) 349; Podovinikoff
v
Montgomery
(1984), 59 B.C.L.R
204.
As
a general rule, statements that are made expressly or impliedly on a
without prejudice basis in the course of bona
fide
negotiations for the settlement of a dispute will not be allowed in
as evidence: Naidoo
v
Marine
& Trade Insurance Co Ltd
1978 (3) SA 666. The resolution of a dispute with a genuine view to
settlement appears to be the main consideration. If the settlement is
thereafter reached, the negotiations leading up to it should be
available to the court since the whole basis of the non-disclosure
would have fallen away: Gcabashe
v
Nene
(supra).
I
must also add that the parties to negotiations may also consent to
the admission of without prejudice communications. Exceptional
circumstances, such as the use of without prejudice communications to
prove certain things, e.g., that it contains a threat, may permit a
departure from the general rule: Naidoo
v
Marine
& Trade Insurance Co Ltd
(supra),
at 667 F: Hoffend
v
Elgetu
1949
(3) SA 91 (AD). In Hirschfeldt
v
Standard Charted Bank of Botswana [1996]
BLR 640 (CA) the document concerned was admitted into evidence
because its only use was to prove the credibility of the defendant.
In
the final analysis, it is always in the discretion of the court to
determine whether to admit or not to admit without prejudice
communications. In exercising its discretion the court may remove the
privilege attaching to such communication if it deems that the
admissibility of such communication is essential in proving certain
things, such as the credibility of a witness, or if it considers that
the upholding of the privilege would be contrary to public policy,
for instance where the communication contains a threat or an act of
insolvency.
In
my view there was nothing privileged in a payment plan. It presents a
classical case for the removal of the privilege attaching to letter
as I proceed to do in the exercise of my discretion.
Summary
judgment is an extra ordinary remedy in the sense that it denies a
defendant who has shown an interest to defend a claim, the
opportunity to do so. It is a procedure conceived so that;
“a
mala
fide
defendant might summarily be denied, except under onerous conditions,
the benefit of the fundamental principle of audi
alteram partem ---
when all the proposed defences to the plaintiff's claim are
unarguable, both in fact and in law ” (Chrisma
v Stutchberry
197
(1) RLR 277)
It
has been stated conversely that in order to succeed in defending a
summary judgment application, the respondent must set out a bona
fide
defence by alleging facts which, if established at the trial, would
entitle him to succeed. As stated by Ziyambi JA in Kingstons
Ltd v
L D Ineson (Pvt) Ltd
2006 (1) ZLR 451 (S) 458 F-G:
“Not
every defence raised by a defendant will succeed in defending a
plaintiff's claim for summary judgment. Thus what the defendant
must do to raise a bona
fide defence
– a ' plausible case' – with ' sufficient clarity and
completeness' to enable the court to determine whether the
affidavit discloses a bona
fide
defence. He must allege facts which, if established, 'would entitle
him to succeed.' See Jena
v
Nechipote
1986 (1) ZLR 29 (S) ; Mubayiwa
v
Eastern Highlands Motel (Pvt) Ltd (S)
– 139-86; Rev
v
Rhodian Investments Trust (Pvt) Ltd 1957
R&N 273 (SR)”.
In
my view the defendant does not even begin to set out any defence
which, if established, would entitle it to succeed. In fact the
defendant has no sale agreement to rely upon in refusing to refund
the deposit. It was never entered into. Even the unexplained
signature of the second plaintiff pales when considered against what
transpired thereafter. In terms of the written undertaking letter of
18 November 2013 in the event that no agreement was entered into, it
had to refund the money without delay. In compliance with that
undertaking it repaid part of the money.
It
is trite that where a person has two courses of action open to him,
as the defendant had, to either refuse to refund the money on lawful
grounds or refund it, and he unequivocally elects to take one of
them, he cannot turn round afterwards and take the other course of
action. The point was made in S
v
Marutsi
1990 (2) ZLR 370 that:
“It
is trite that a litigant cannot be allowed to approbate and reprobate
a step taken in the proceedings. He can only do one or the other not
both.”
See
also Trinity
Engineering
v Karimazondo
& Ors
HH 672/15.
The
defendant agreed to repay. It commenced repayments. It must therefore
repay and cannot be allowed to twist and turn. It simply has no
defence to talk about.
In
the result, it is ordered that:
1.
Summary judgment be and is hereby entered in favour of the plaintiffs
as against the defendant in the sum of $26 353-00 together with
interest at the prescribed rate from due date to date of payment in
full.
2.
Costs of suit on an ordinary scale.
Mtetwa
& Nyambirai,
plaintiffs' legal practitioners
Magaya
– Mandizvidza,
defendant's legal practitioners
