On 26 August 2004, the plaintiff instituted proceedings in the High Court wherein it sued for $60,000,000= being the sum assured in terms of a motor vehicle comprehensive policy it held with the second defendant. The first defendants were the insurance brokers who facilitated the policy.

On 21 December 2006, and before the pre-trial conference, the plaintiff amended its claim by the addition of paragraph 10 which is a claim for consequential damages in the sum of $100,000,000= being the replacement value of the vehicle.

The first defendant pleaded that it first acted as the second defendant's agent and its obligation ended as soon as the policy was in place and that the premium had not been paid at the time of the accident hence the policy was revoked.

The second defendant, in its plea, pleaded ignorance of the policy and put the plaintiff to the proof thereof.

At the commencement of the trial, the second defendant applied for, and was granted an amendment to its plea. The amendment was a withdrawal of the initial plea and its substitution with a plea to the effect that;

1. The first defendant, as agent of plaintiff, entered into an agreement with the second defendant that the plaintiff should pay the insurance policy premium of $3,524=26 in equal installments over a period of 3 months as from 25 February 2004.

2. That the plaintiff did not comply with this agreement, and, as at the date of the accident the plaintiff had not performed its obligations to pay the instalments.

3. In any event, the plaintiff is covered for a total of $60,000= in terms of the policy and is contractually precluded from claiming more.

The plaintiff gave evidence through its Managing Director, Mr. Zisengwe. Mr. Gideon Muchakwa gave evidence for the first defendant after which Mr. Moses T. Chakaringa and Mr. Member Murasiranwa gave evidence for the second defendant.

From the evidence adduced in court the following are common cause.

The plaintiff entered into an insurance contract with the second defendant. This was done through the first defendant who acted as broker. The premium was put at $3,524,259=. The insured value was put at $60,000,000= (old currency). On 10 February 2004, the plaintiff paid $200= (revalued) towards the premium. The plaintiff was then issued with a policy document dated 18 February 2004. The period of insurance was stated as 'From 10/02/ 04 to 31/01/05 (both dates inclusive)'.

On 23 March 2004 the motor vehicle so insured was involved in an accident and was declared a write off. As at the time of the accident, the plaintiff had not paid the balance of the premium. Such balance was only paid on 7 April 2004 to the first defendant. When the plaintiff attempted to make a claim on the policy the second defendant refused to honor the claim on the basis that the plaintiff had not paid the premium as per policy.

The testimony by Mr. Zisengwe was to the effect that the plaintiff had been asked to pay the premium in three months. It was never stated that the instalments had to be equal. At the time of the accident the three months period had not lapsed. When the accident occurred the plaintiff was asked to pay the balance in order that its claim can be sent to the second defendant - and it did so. In this regard he tendered two receipts as exhibits 1 and 2 for the payments.

The first defendant's evidence, on the other hand, was to the effect that when Mrs. Zisengwe came to insure the plaintiff's motor vehicle she was told the premium that had to be paid. As she did not have the full amount she was allowed to pay $200= on her undertaking to pay the balance in two weeks time. She was warned of the consequences of not paying the full premium. After failing to pay within that period the first defendant extended the period to three (3) months. According to Mr Muchakwa, this extension was at the plaintiff's risk.

At the pre-trial conference, the issues were viewed as;

“1. The interpretation of clause 1 of the contractual document. It being admitted that plaintiff paid its premium on 25 February 2004; and

2. The quantum of damages.”

After hearing evidence from the witnesses, it was apparent that the parties were not agreed that the premium was paid on 25 February, 2004. The receipts tendered showed the initial payment was on 10 February 2004 and the second payment was on 7 April 2004.

The main issues would thus be;

1. Whether or not the plaintiff had paid the premium in terms of the policy;

2. Whether or not the defendants are liable to the plaintiff as per claim;

3. Whether or not the plaintiff is entitled to payment of the sum of $100,000,000= in respect of its claim for the loss of its motor vehicle in terms of the policy agreement; and

4. Who between the defendants is liable to pay the plaintiff.

PAYMENT IN TERMS OF THE POLICY

The policy document, in its preamble, states that “whereas the insured, by a proposal and declaration which shall be the basis of this contract and deemed to be incorporated herein, has applied to the company for the insurance and has paid the premium as consideration for such insurance in respect of accident loss or damage occurring during the period of insurance.”

That preamble presupposes the applicant has paid the premium.

I did not hear any party to interpret that paragraph in any way as pre-supposing that premium would not have been paid. It is in that light that the issue of payment of the premium is important.

The plaintiff's case was that in spite of this there was a premium payment plan in place which was agreed with the first defendant at the time the policy was agreed in terms of which the premium was payable over a period of three months. Mr. Zisengwe tendered exhibit 3 as proof of the arrangement.

Paragraph 2 thereof states that;

“We hasten to add that a premium payment plan had been agreed to spread payment over three months and initial payment had been effected on receipt of policy before the accident, which we take cognizance of.”

This letter is from the first defendant to the plaintiff. The first paragraph thereof shows clearly that the second defendant was refusing to pay on the premise that premium payment was done after the loss which aspect they contended vitiates the terms and conditions of the policy.

In his evidence Mr. Muchakwa did not deny this.

The first defendant having allowed the plaintiff to pay in instalments found itself in difficulties to persuade the second defendant to pay.

In both its plea and in evidence the first defendant acknowledged that it had no authority to allow the plaintiff to pay its premium in installments. It is because of that lack of authority that it asked the plaintiff to pay up before they could file their claim. It is clear beyond doubt that the payment arrangement was initially as between the plaintiff and the first defendant. That arrangement was apparently not in terms of the policy document. It was an arrangement the first defendant agreed to for the convenience of the plaintiff and not because there was express authority from the second defendant for the first defendant to grant such payment terms.

The second defendant's evidence was to the effect that the insurance policy the plaintiff took out required a one off payment. In the instance case no such payment was made hence it declined the plaintiff's claim. However, in its amended plea, the second defendant stated that “first defendant, acting in its capacity as agent for plaintiff entered into an agreement with second defendant that plaintiff should pay the insurance policy premium of $3,524= 26 in equal installments over a period of 3 months as from 25 February 2004.”

There was thus contradiction between the second defendant's plea and evidence by its witnesses. The witnesses could not explain away the contradiction.

Mr Muchakwa who should have been better placed to testify on this was a ball of confusion and contradictions. For instance, whilst being categorical that the policy was of a one off payment at inception he was, at some stage, heard to say the second defendant should nevertheless have honored the claim. He found it difficult to admit the first defendant's negligence in not advising the plaintiff of the consequences of partial payment and also in not advising the second defendant about the credit arrangement with the plaintiff.

The second defendant, through Mr Murasiranwa, indicated that upon receipt of $200 towards payment of the premium they questioned the first defendant about it. The first defendant was reminded that a failure to pay the full premium would lead to the invalidity of the policy for non-remittance. When asked why the second defendant had not advised the first defendant of the invalidity of the policy in view of non payment of the premium Mr Murasiranwa said that events took over as the accident took place. In terms of clause 8 of the General Conditions of the policy document the second defendant could have cancelled the policy.

Despite not receiving full premium the second defendant issued the policy document and had not cancelled it by the time of the accident.

The amended plea acknowledges the arrangement to pay in instalments. If therefore the second defendant wishes to rely on a breach of contract the burden of proof is on it. See Brightside Enterprises (Pvt) Ltd v Zimnat Insurance Co. Ltd 1998 1 ZLR 117.

In casu, the second defendant seemed to have condoned the payment in installments and conceded in its amended plea that; “First defendant, acting in its capacity as agent for plaintiff entered into an agreement with second defendant that plaintiff should pay the insurance policy premium of $3,523=26 in equal installments over a period of 3 months from 25 February 2004.”…,.

The second defendant can thus not seek to rely on such mode of payment not to honor the claim.

Another point regards the first defendant's position.

Though in their initial pleadings impression was created that the first defendant was the second defendant's agent the closing submissions were clear that an insurance broker can act as agent for both the insured and the insurer. In Gordon and Getz on The South African Law of Insurance, 4^th edition by D.M DAVIS…, it is stated that:

“An insurance broker acts primarily as the insured's agent to obtain insurance, though he receives his commission from the insurer, and may, for limited purposes, such as collecting the premium, be the latter's agent.”

In casu, therefore, the first defendant was the insured's agent when they secured insurance cover for the plaintiff from the second defendant, but, in collecting the premiums and remitting them to the second defendant the first defendant acted as the second defendant's agent.

When the first defendant was now collecting money this was for and on behalf of the second defendant. Upon receipt of the money it was the first defendant's responsibility to account to the second defendant as the second defendant's agent. The second defendant, by accepting part payment of the premium, was in fact confirming its acceptance of the arrangement the first defendant had made with the plaintiff for the payment of the premium and that the first defendant was its agent in collecting the premium.

That probably explains the assertion in its amended plea acknowledging the arrangement to pay in three instalments.

If the second defendant had rejected the arrangement it should not have issued the policy document, or, at least, it should have cancelled the contract as soon as it became aware of the credit arrangement if such had not been known to it when it issued the policy document.

Instead of cancelling the contract, the second defendant opted to merely warn the first defendant, who, by then, had become its agent of the risk of non-payment of the full premium yet the contract provides that the second defendant could have cancelled the contract. Paragraph 8 of the General Conditions states that;

“The Company may cancel this policy by sending seven days notice by registered letter to the insured at his last known address, and, in such event, will return to the insured the premium paid pro-rata portion thereof for the period the policy has been in force…,.”

The second defendant gave an impression to the plaintiff that the arrangement was acceptable. If the second defendant now wishes to rely on such breach, which was there from inception, the onus is on it to prove such breach and to show that such vitiated the contract in spite of its own conduct.

This, the second defendant did not do.

The question of payment of the balance of the premium is between the first defendant and the second defendant. This is so because the plaintiff paid to the first defendant and it was for the first defendant, as agent for the second defendant, to account to the second defendant. The first defendant received the money on 7 April 2004 as agent for the second defendant. The second defendant had an arrangement with the first defendant on when and how premiums received on its behalf by the first defendant would be transmitted.

Though the two witnesses for the second defendant did not seem of the same mind on the period of credit the first defendant was granted, it was certainly a period of at least 60 days. Mr. Chakaringa put the credit period granted the broker at 90 days whilst Mr. Murasiranwa put the period at 60 days. They both agreed, however, that such credit was only to the broker and did not extend to the insured. As already alluded to, this contradicts the amended plea. Both witnesses indicated that queries on premium payments would be by the Accounts Department of which they were not part of.

Exhibit 2 confirms payment of the balance to the first defendant on 7 April 2004.

The first defendant alleged that it paid that sum over to the second defendant. As proof of the payment, the first defendant produced a document called BORDEREAU. Mr. Muchakwa argued that this was proof of payment to the second defendant. The document is addressed to Global Insurance from Kantharia Insurance Brokers and is titled; 'INTIMATION OF MARCH 2004 BORDEREAU'. It was tendered in as exhibit 5.

Item 6 thereon refers to the plaintiff and the balance of the premium.

Whilst Mr. Muchakwa argued that that was proof of payment Mr. Murasiranwa said that was just an intimation of what was to be expected. Proof of payment would be titled 'Payment bordereau'.

In any case, this could not have been proof of payment as the plaintiff had not paid the balance.

It is my view that not enough evidence was adduced to show that that sum was paid over to the second defendant. That is however as between the defendants and should not prejudice the plaintiff.

QUANTUM

It is common cause that the plaintiff insured its motor vehicle with the second defendant, through the first defendant, for the sum of $60,000= (revalued). In terms of that contract, the second defendant, in the event of a loss may pay the plaintiff the estimate of the value of the motor vehicle as specified in the schedule or the reasonable market value of the motor vehicle at the time of the loss or damage whichever is less. Paragraph 2(a) of section 1 of the policy document is quite clear on this when it states that, inter alia;

“…,. The Company may, at its own option, repair, reinstate or replace the motor car and /or…, may pay in cash the amount of the loss or damage and the liability of the Company shall not exceed the actual value of the parts damaged or lost plus the reasonable cost of fitting and such parts shall in no case exceed the insured's estimate of the value of the motor car including the accessories and spare parts thereon as specified in the schedule or the reasonable market value of the motor car including accessories and spare parts thereon at the time of the loss or damage whichever is less.”

I did not hear the plaintiff to deny that this was a limited value policy.

In his evidence, Mr. Zisengwe conceded that the policy was indeed a limited value policy. His argument for $100,000,000= was thus not based on the provisions of the contract.

The plaintiff alleged that “as a result of the defendants' breach of the insurance contract the plaintiff has suffered consequential damages in the sum of $100,000,000= which is the current replacement value of the motor vehicle.” This amendment was only to that extent. It did not go so far as to expunge the initial basis of the claim which was contractual.

In his closing submissions, the plaintiff's legal practitioner argued that it is not unheard of that even where a party is contractually bound to perform certain obligations, should he do so negligently the wronged party may sue both in contract and in delict.

Unfortunately, counsel could not cite any authority in support of this, and, in any case, the suit here was in contract and not delict. The nature of the amendment did not change the nature of the suit at all. Nowhere in the amendment is there any allegation of negligence on the part of the defendants.

The basis advanced by the plaintif'fs counsel for seeking consequential damages are based on what he termed common cause that;

1. That the sum assured is $60,000,000= (which is now $60,000= revalued).

2. That at the time of the inception of the contract that sum was the pre-accident estimated value of the motor vehicle.

3. That due to the volatile economic environment (which the court was urged to take judicial notice during the trial), the sum of $60,000= is but a tiny fraction of the actual market value or replacement value of such a vehicle.

4. That the first defendant, in a letter to the plaintiff, acknowledged the premium payment plan and acknowledged liability on behalf of the plaintiff.

5. That had payment of the $60,000= been made in 2004 the plaintiff would have been indemnified against his loss.

6. That the refusal to pay was grossly unreasonable in view of the facts.

Counsel for the plaintiff argued that in view of the above facts and also of what he perceived to be clear liability the defendants acted wrongfully in repudiating the claim.

The law in this aspect is quite clear.

“Property insurance is a contract for indemnity. The insurer's liability is therefore limited to the 'real and actual' value of the loss suffered by the insured through the happening of the event insured against. It cannot exceed either the amount insured or the amount of the insurable interest; and if it exceeds either or both these items, it must be reduced to correspond with the smaller of them.”

See Gordon and Getz on The South African Law of Insurance, 4^th edition by D.M DAVIS …,.

In cases of limited valued policy which specified the agreed value of the subject matter of the insured therefore the parties are bound by the value agreed to. In the case of Elcock v Thomson [1949] 2 ALL ER 381…, MORRIS J said;

“When the parties have agreed a valuation, then, in the absence of fraud or of circumstances invalidating their agreement, they have made an arrangement by which for better or for worse, they are bound.”

In General Principles of Insurance Law by E.R.H. IVAMY, 4^th edition…, the author thereof states that;

“In the case of a 'valued' policy the amount recoverable is fixed by the policy…,. In the case of an insurance upon property, the value of the subject matter may be fixed by agreement and inserted in the policy as the amount recoverable in the event of loss. This valuation is binding, except in the case of fraud or mistake, and dispenses the assured from the necessity of proving the value of his interest, though he still must prove that he has an interest in the subject-matter of insurance.”

A valued policy is one which specifies the agreed value of the subject-matter of the insurance.

In casu, there is no allegation of fraud or mistake. The plaintiff simply argued that by their refusal to pay when he lodged his claim the defendants acted grossly unreasonably and so must be made to pay consequential damages that would enable the plaintiff to buy a similar motor vehicle.

From the evidence adduced can it really be said that the defendants' refusal to pay was grossly unreasonable?

It is my view that there was no such unreasonableness as clearly the defendants were entitled to contest the claim as the plaintiff had only paid a fraction of the premium by the time of the accident. The contract required a one-off payment but for the plaintiff's failure to do so that led to the first defendant granting an extension of time within which to pay the balance. This not having been an express term of the contract, and, in fact, being contrary to the express provisions of the contract the second defendant cannot be said to have been unreasonable in seeking to repudiate the contract.

The defendants had an arguable case.

I am of the view that the plaintiff has not made out a case for a claim outside the policy document. The policy document shows the sum insured as $60,000,000=. In terms of that document there are some deductions to be made in the event of a claim as indicated in exhibit 6. The defendants witnesses outlined the deductions as including salvage value @ 30% of the sum assured, excess applicable in terms of the policy @ 4% of the value.

Mr. Murasiranwa confirmed the calculations as per exhibit 6. The calculations were as follows:

Sum insured of the vehicle at the time of the loss $60,000.00

Less salvage value @ 30% of the sum insured     $18,000.00

                                                                               $42,000.00

Less Excess applicable in terms of the policy

(4% of vehicle value)                                              $ 2,400.00

Claim amount                                                         $39,600.00

Less outstanding premium $3,524.26 less $200    $ 3,324.26

Amount due and payable                                       $36 275.74

As it was proved that the plaintiff paid the balance of $3,324=59, albeit after the accident, it follows that the sum payable to plaintiff is $39,600=.

As between the defendants the issue is who must pay the plaintiff?

In as far as the first defendant acted as agent for the second in collecting the premium, the second defendant cannot be absolved as the principal. Indeed “where the agent has authority to receive payment of premiums on behalf of the insurers, the effect of the payment is the same as if it had been made to the insurers themselves and the fact that the premiums thus received by the agent have been misappropriated by him, or have not reached the insurers owing to his bankruptcy, affords them no defence against a claim by the assured upon the contract.” See General Principles of Insurance Law by E.R.H. IVAMY, 4^th edition…,.

In the circumstances, the second defendant is liable as the insurer.

COSTS

In as far as the plaintiff has succeeded, albeit to the sum as per the policy document, I am of the view that the plaintiff's argument for costs on a higher scale cannot succeed. The plaintiff is entitled to costs on the general scale from both defendants.

Accordingly, judgment is entered for the plaintiff and against the second defendant in the sum of $39,600= (re-valued) with interest at the prescribed rate from the date of summons to date of payment in full.

Costs on the general scale against both defendants jointly and severally with one paying and the other to be absolved.

The distortions caused by the galloping inflation currently characterizing our economy are graphically shown, in part, by the claims that are being brought before the courts. The above, in my view, is one such example.

While inflation is a fact that they must take judicial note of, courts must, in my view, be wary that the distortions caused by inflation in the economy are not transported wholesale into the law thereby causing distortions of legal principles.

The plaintiff operates a butchery from Muzarabani Business Centre in Mashonaland Central. In 2003, he thought of adding to his assets by having a freezer room installed at the butchery. He approached the defendant, who, in or about September 2003, gave him a quotation for installing a 6x8x8 cubic metre cold room for $13 million. In terms of the written quotation, the plaintiff was required to pay 50% of the total cost as a deposit and to show confirmation of the order. A deposit in the sum of $5,4 million was duly paid on 29 September 2003 and installation was to be done in a week's time. On 17 October 2003, the defendant delivered the cold-room, ready to install and commission it. Upon realizing the error, the plaintiff declined to accept delivery and installation of the coldroom whereupon the defendant returned to Harare with the cold room. Efforts to get the defendant to return and install a freezer room were in vain, prompting the plaintiff to approach his legal practitioners for assistance.

In April 2004, the defendant refunded the sum of $1,955,000= to the plaintiff, retaining the sum of $3,445,000= as necessary expenses incurred in manufacturing and attempting to deliver the cold room to the plaintiff. Unhappy with this development, the plaintiff issued summons claiming a payment of the sum of “$13,000,000= of $2,480,000= which is current $657,200,000=, with room to in increase it to match the current costs of installing a freezer room at trial”…., together with interest at the prescribed rate from date of the deposit to date of payment in full and costs of suit.

At the trial of the matter, the claim was amended to $53 billion.

The matter was defended.

In its plea, the defendant denied that it ever quoted the plaintiff for the supply and installation of a freezer room and averred that it quoted it for the supply and installation of a cold room.

At the trial of the matter, the defendant was in default, and, in terms of Rules 59A and 60 of the High Court Rules, 1972 I called upon the plaintiff to lead evidence on the amount of his claim.

The plaintiff's evidence was largely a rehash of the facts of the matter as I have detailed above. In addition, the plaintiff adduced into evidence a quotation that he obtained from a company called Commercial Refrigeration in the sum of $202 billion. The date of the quotation is not given on the handwritten quotation which also includes a component of foreign currency.

When asked to explain his claim in the sum of $53 billion, the plaintiff had the following to say, in part:

“I am claiming an amount that has the same value as the amount that I paid to the defendant in 2003.”

He went on, further, to explain that the amount he is claiming is one quarter of the total amount of the quotation from Commercial Refrigeration just as the amount that the defendant retained was a quarter of the quotation it had given him.

At the commencement of the trial I was under the impression that the plaintiff's claim was one of damages.

It was with this response that it appeared to me that he is simply claiming a refund of the amount that the defendant retained as expenses of manufacturing the cold room and travelling to and from Muzarabani with the wrong refrigeration unit, not at its nominal value, but, at its appreciated value, taking into account the impact of inflation.

His claim appears to me to be one for a debt and not for damages arising ex contractu.

The plaintiff's evidence was to the effect that the sum of $3,445,000= that was retained by the defendant in 2004 now has the same value as $53 billion which he claims. It became clear to me, from this response, that the plaintiff is raising inflation as the basis of his claim.

The plaintiff's stance was re-affirmed by counsel for the plaintiff when he addressed me on the issue.

His argument was to the effect that the plaintiff is entitled to claim the same percentage of the amount that it will now cost to supply and install a freezer room as was the percentage of the amount that the defendant retained in 2004 to the cost of installing a cold room in 2004.

Judges have often used telling adjectives to describe submissions they did not expect from legal practitioners such as “startling” or “ingenious”. Neither term aptly describes my sentiments at being presented with this submission.

I hasten to remark that the matter before me, although set down for trial, proceeded as an application for default judgment.

Ordinarily, a request for default judgment is hardly denied, as, by his default, the defendant is taken to have admitted all the averments made by the plaintiff. I am also aware of the school of thought that holds the view that it is not for a judge or the court determining an application for default judgment to act as the unpaid and un-briefed counsel for the defendant who is in default and deny a plaintiff judgment on issues that the defendant may not have raised if in attendance. Thus, a court dealing with an application for default judgment is perfectly within its rights to enter a default judgment not on the merits of the matter but on the technical basis that the defendant is in default even in cases where it is of the opinion that a defence may have been available to the defendant.

There is, in my view, however, a limit to the non-participatory role that a court may play in an application for default judgment. In my view, where a claim is clearly not well founded in law, a court may not give judgment on such a claim simply on the basis that the defendant is in default. Similarly, where damages have not been adequately proved to the satisfaction of the court, judgment may not be entered in the claimed sum; again, simply on the basis that the defendant is in default.

The basis for drawing the limit to the non-participatory role of the court, in my view, is the fundamental principle that after the parties have made their submissions to the court, the decision or order that is made is solely that of the court and such decision or order must find a basis in law at all times.

In my view, the claim before me is a case compelling me to abandon my non-participatory role for two reasons;

(i) Firstly, I take the view that the plaintiff's claim, being a claim in which the alleged debt has been appreciated to take into account inflation, is badly founded in law. Courts will take inflation into account when assessing damages in certain delictual claims but inflation, on its own, cannot be a cause of action.

In Edward Marume and Another v Todd Muranganwa HH27-07, I had occasion to deal with the issue of inflation in another application for default judgment. The following were my views on the matter:

“In my view, the issue involves a detailed discussion of 'currency nominalism' and 'revalorization' and the place of such concepts in Zimbabwean Law.”

The concept of currency nominalism has been held to be applicable in all aspects of South African Law. See SA Eagle Insurance Co Ltd v Hartley 1990 (4) SA 833. In view of the provisions of the Prescribed Rate of Interest Act, there is a strong case for arguing that the concept also underlies all aspects of Zimbabwean law and that revalorisation, or the appreciation of debts to take into account inflation has no place in our law.

Again, like in Edward Marume and Another v Todd Muranganwa HH27-07, I have not been adequately addressed on the issue.

I hold the view that the distortions caused by inflation in the economy should not lead to the wholesale distortion of legal principles that have withstood the test of time in a bid to find legal solutions to a problem that is not legal in nature and origin and may prove to be transient. I am yet to be persuaded that revalorization is part of our law of debt collection.

Assuming that I have erred in classifying the plaintiff's claim as one based on inflation, and that properly it is one seeking damages for an alleged breach of contract, then, in my view, two other issues arise;

(i) Firstly, it has not been proved that the retention of the sum of $3,455,000= was wrongful in any way or that it constituted breach of the contract between the parties. In fact, it would appear to me that the parties were not ad idem as the plaintiff requested for a freezer room and the defendant supplied a cold room. The offer and the acceptance did not coincide and the parties never had a contract in my view.

Even if one were to be generous and hold that there was a contract that the defendant breached by supplying the wrong refrigeration unit, the damages suffered by the plaintiff for the alleged breach have not been adequately proved.

It cannot be said that the quotation from Commercial refrigeration in any way represents the correct loss of value in money between 2004 and the date of the hearing. It has also not been proved that the quotation by Commercial Refrigeration has any relationship to the quotation given by the defendant in 2003. One was quoting for a cold room of different dimensions and the other was quoting for a freezer room of entirely different dimensions.

How the one can be tendered as proof of the value of the other was not argued before me.

Despite much effort, I cannot figure out a possible argument on the relationship myself.

For the above reasons, I cannot accede to the prayer for default judgment in the matter in the amount prayed.

I have anxiously considered whether I can grant judgment in the sum of $3,455= that was retained by the defendant in 2004 together with interest thereon at the prescribed rate from the date of the retention to date of payment. The amount involved, even with interest, is so pitiful, in my view, as to make a mockery of the justice delivery system where I to order its payment. In m view, the plaintiff is best served by the order that I make below.

In the result, I make the following order:

1. The defendant is granted absolution from the instance.

2. The plaintiff is hereby granted leave, after effecting necessary amendments to his claim, and upon service of such on the defendant, to set the matter down for judgment in terms of Rule 58 of the High Court Rules, 1972.

3. There shall be no order as to costs.

On 25 August 2008 the plaintiffs' issued summons out of this court claiming from the defendants the sum of US$3,872,123= together with interest thereon at the rate of 6% per annum capitalized monthly and calculated from 1 February 2001 to date of payment in full.

It was alleged in the plaintiffs' declaration that the debt claimed arose from certain advances and loans made to the defendants by the plaintiffs, at the defendants' special instance and request, during the period 1 February to 9 November 2001. It was further alleged that the total sum advanced and lent to the defendants amounted to $4,272,123=, and that the defendants had received the sum of $400,000= leaving the balance claimed. It was also alleged that at one stage the defendants' deposited the sum of $3,508,000= into the account of the plaintiffs' after selling off a mine in the Democratic Republic of Congo, which deposit was, however, reversed by the plaintiffs' bank leaving the defendants' indebted to the plaintiff in the amount of the claim.

The claim was resisted.

On the preponderance of equities, the applicant contended that the payment has been outstanding since 2004 and the long delay has deprived it of the use of these funds to fulfil its obligations.

Counsel for the respondent submitted that the balance of convenience was evenly balanced.

It seems to me that the applicant has been prejudiced of the utilization of those funds for which indebtedness is admitted. However, as money is involved, the payment of interest in the currency of account would tend to offset the prejudice by compensating the applicant for the loss in the time value of money.

The plaintiff issued summons out of this court on 14 October 2009 claiming payment in the sum of US$8,769=44 for coal delivered and supplied to the defendant at the defendant's special instance and request, interest from the date of the service of summons to the date of payment in full, collection commission and costs of suit.

The action was contested.

Following a full trial, the High Court ordered the appellant to pay the sum of Z$121=52 (revalued) together with interest thereon at the rate of 30% per annum, the sum of South African R201,750=08 together with interest thereon at the applicable rate in terms of  the law of South Africa and costs of suit.

Dissatisfied, the appellant has appealed to this Court.

After perusing the papers filed of record and hearing counsel, this Court was of the unanimous view that the appeal lacked merit. Consequently, we dismissed the appeal with costs and indicated that the reasons for the decision would follow in due course.

What follow are the reasons for the decision.

FACTUAL BACKGROUND

The appellant is the father to one Fortune Makgatho, now Mojapelo. Fortune Mojapelo, born Makgatho, is, in these proceedings, simply referred to as “Fortune”. In 1995, Fortune applied to the respondent for a bursary to enable him to study for a degree programme in Actuarial Science at the University of Cape Town in South Africa. By letter dated 15 January 1995, the respondent advised Fortune that, out of the many applications it had received, he had been fortunate to have been selected to study for the degree at the University of Cape Town. The degree programme was to cover a period of four years.

One of the conditions for the grant of the bursary was that Fortune had to provide an acceptable guarantor for the due fulfilment of his obligations. On 4 February 1995, the same day that Fortune signed the agreement, the appellant signed as surety and co-principal debtor for the due fulfilment of all obligations by Fortune.

The conditions stipulated by the respondent, and accepted by Fortune, were the following:-

(i) Fortune was to take all the subjects in which passes at the required level would lead to exemptions from the local equivalent post-graduate intermediate course.

(ii) The bursary was to cover all tuition, residence, examination fees, repatriation and book allowances. All other liabilities were to be for the account of Fortune.

(iii) Fortune was to make satisfactory progress. He was expected to maintain the standard required in order to obtain exemptions from the post-graduate intermediate examinations of the Institute of Actuaries. This meant that first and upper second grades were to be his goal.

(iv) On Fortune obtaining the degree, the respondent could demand that he immediately commences work for Old Mutual Zimbabwe as an employee for a period equivalent to the academic years in respect of which the bursary would have been provided.

(v) The bursary would be deemed to be a loan until Fortune successfully completed the degree programme and had been employed by the respondent for the required number of years. The indebtedness was to be reduced proportionately taking into account the period worked as an employee.

(vi) In the event that, having successfully completed the degree programme and achieved satisfactory academic performance, the respondent did not offer Fortune employment, the loan would not be repayable.

(vii) The bursary could be withdrawn because of unsatisfactory progress or failure to fulfil any term stipulated in the agreement.

(viii) In the event of the bursary being withdrawn, or Fortune deciding not to fulfil any term of the employment contract, all monies paid under the bursary would be deemed to have been advanced as a student loan.

(ix) In the event of the bursary being withdrawn, no offer of employment would apply but the respondent reserved the right to demand immediate repayment of the loan.

Despite averments by the appellant to the contrary, documentation produced during the trial confirmed that Fortune did not perform as expected by the respondent.

In October 1998, the respondent wrote to Fortune expressing its disappointment at his half-year results and the fact that he had made no progress to obtain exemptions. He had also failed Acturial Science (Act Sci). The respondent, in the same e-mail, further warned that unless there was an improvement, the respondent might find it difficult to continue sponsoring the studies. In September 1999, the respondent again wrote expressing its disquiet over the failure by Fortune to attain the exemption studies in Survival Models. In the letter, the respondent also advised that it expected Fortune to commence employment with it in Harare by end of the year.

Fortune did not commence work as requested.

Instead, he wrote to the respondent advising that he would not commence work with the respondent in January 2000 because he wanted to set up the Student Enterprise Foundation which he had apparently initiated when he was the President of the Student Representative Council. He also indicated he wanted to enrol for a post-graduate study in Financial Mathematics or Financial Analysis and Portfolio Management. In view of this development, Fortune suggested that the two parties agree on a financial settlement that would have the effect of releasing him from his obligations for at least a year. Nothing came out of this suggestion as Fortune appeared unhappy to pay South African Rand into the respondent's account with Standard Bank, Robert Mugabe Branch, Harare, citing the possibility of a violation of local foreign exchange Regulations. The respondent agreed, in October 1999, to defer commencement of his employment to enable him to pursue these other commitments on condition he took up such employment in 2001. The respondent further advised him that it would not provide any financial support unless he wrote professional actuarial examinations or obtained exemptions from those examinations.

Despite such accommodation, Fortune did not, in 2001 or at any time thereafter, report for work with the respondent.

PROCEEDINGS IN THE HIGH COURT

The respondent issued summons out of the High Court, Harare, on 2 September 2003 claiming payment of the amounts in Zimbabwe Dollars and South African Rand that it had disbursed pursuant to the agreement.  In his plea, the appellant denied that his son had failed to perform in terms of the agreement and stated that, in fact, it was the respondent which had failed to honour its side of the agreement, resulting in Fortune refusing to work for the respondent.

Following a pre-trial conference in chambers, a judge referred the matter to trial on the following issues:-

(a) Whether there was a valid agreement between the two parties.

(b) Whether Fortune performed his part of the agreement or whether it was the respondent that breached the agreement.

(c) Whether the appellant was liable to pay to the plaintiff the amounts claimed in the summons.

The court found that indeed there was a valid agreement in terms of which Fortune was obliged to work for the respondent, when called upon to do so, for the equivalent number of years for which he had been sponsored. On the second issue, the Court found that Fortune did not perform satisfactorily. In particular, he did not obtain satisfactory passes in Acturial subjects that would have enabled him to get exemptions back home and had refused to take up employment with the respondent when requested to do so. On the third issue, the court noted the concession by the appellant on both liability and quantum. Consequently, the court ordered the appellant to pay the amounts claimed, together with interest and costs of suit.

It is against that order that the appellant has now appealed to this Court.

GROUNDS OF APPEAL

In his notice of appeal, the appellant has attacked the judgement of the High Court on the following grounds:-

(a) That the Court erred in failing to find that the failure by the respondent to advise him, firstly, of the alleged unsatisfactory performance and, secondly, of the failure to report for work on the part of Fortune was a breach of the agreement.

(b) That the respondent's claim was inconsistent in that, whilst it was alleged that Fortune had failed to perform satisfactorily, the respondent alleged that he had refused to commence work upon completion of his studies

(c) That the court a quo erred in disregarding the manner in which the respondent had paid for the fees in South Africa; the respondent not having led any evidence on the amounts paid to the university.

(d) The court a quo erred in finding that:

(i) The withdrawal of the bursary had been proved.

(ii) There was basis for such withdrawal.

(iii) In relying on the question whether or not Fortune was invited to work for the respondent.

(e) The respondent's claim against the appellant was time–barred.

(f) The court a quo erred in not considering that there was a prejudicial extension of time within which to meet the alleged conditions of the contract.

(g) The appellant had been released from his obligation as surety by virtue of the following:

(i) The agreement between the respondent and Fortune had been novated.

(ii) The respondent's claim had been compromised.

(iii) The obligations between the two had been materially and prejudicially altered.

(iv) There was a prejudicial agreement not to enforce the agreement as between the respondent and Fortune.

THE ISSUES ON APPEAL

Although only three issues were initially identified in the appellant's notice of appeal, the appellant, in an amended notice of appeal, introduced a number of others - some for the first time on appeal. On a consideration of the papers, it seems to me that, in fact, there are seven main issues that fall for determination before this Court.

I proceed to deal with each of these in turn.

WHETHER THE AMOUNTS DISBURSED WERE PAYABLE

The place to start is the agreement entered into by the parties. Clauses 5, 9 and 11 deal with the repayments of the amounts disbursed by the respondent to the University of Cape Town.

(i) Clause 5, in particular, provides that Fortune was to immediately commence work for the respondent after obtaining his degree, if requested to do so, and that he was to work for the equivalent number of years sponsored by the respondent.

The same clause made it clear that the bursary was to be regarded as a loan until such time as Fortune would have successfully completed his degree programme and been employed by the respondent for the requisite period.

Further, in the event of dismissal from employment or disqualification, the bursary or the amount of such bursary “not worked off” would become payable.

(ii) In terms of clause 9, in the event of the bursary being withdrawn because of unsatisfactory performance, or a decision on the part of Fortune not to fulfil the employment contract, all monies paid under the bursary would be regarded as having been advanced in terms of a student loan, and, in this situation, no offer of employment would apply.

(iii) In terms of both clauses 5 and 11, if, after successfully completing his degree, the respondent failed to offer Fortune employment, the loan would not be repayable.

The agreement therefore makes it clear that any monies disbursed on behalf of Fortune would remain payable except in two terms:

(a) Firstly, if Fortune, having successfully completed his degree programme worked for the respondent for the period equivalent to the number of years sponsored by the respondent; or

(b) Secondly, if having completed such degree and through no fault on his part, he was not offered employment by the respondent.

WHETHER FORTUNE PERFOMED IN TERMS OF THE AGREEMENT

Allusion has already been made to this aspect earlier in this judgment. The exchange of correspondence between Fortune and the respondent demonstrates beyond doubt that Fortune did not perform in terms of the contract. The respondent expressed dismay at his failure to obtain passes at the required level in order to obtain exemptions back home; which exemptions would have fast-tracked his qualification as an Acturial Scientist. Indeed, by the end of 1999 both parties were agreed that Fortune had not only failed to obtain passes at the required level but had even failed certain subjects. Since the respondent had disbursed funds for the period of four years in terms of the agreement, it made it clear that it would no longer sponsor him for the year 2000 but would consider sponsoring him purely to ensure that he obtained passes at the required grade so that he would get the necessary exemptions. Indeed, Fortune himself accepted he had not performed and offered to pay the amount of the bursary so that he would be released completely.

Therefore, the finding by the court a quo that Fortune did not obtain satisfactory passes in actuarial subjects cannot be said to be wrong.

The suggestion that he completed his degree and that it was the respondent who refused to offer him employment is therefore not tenable, it being clear that Fortune refused to work for the respondent at the end of the four year academic programme - or at any time thereafter.

This is an appeal against the judgment of the High Court granting with costs a claim by the respondent for:

(i) Payment of the sum of US$750,000.

(ii) Interest tempore morae at the London Interbank rate for United States dollars, at 3.5% per annum, from 1 September 2005 to the date of payment.

(iii) Costs of suit.

The factual background to this dispute, which is largely common cause, may be summarised as follows:

The appellant is a financial institution. The respondent is a manufacturer and supplier of an exclusive range of cables for the transmission of communication and distribution of energy used by such entities like the Zimbabwe Electricity Supply Authority, the Rural Electrification Agency, and Tel One.

The respondent's business caters for both domestic and export markets. As at end of 2003, 50% of its sales volumes were largely in exports.

In 2004, the respondent's business experienced slow growth due to inflation and the scarcity of foreign currency. During that year, the respondent's representatives met with the appellant's Governor, Dr. Gideon Gono, with a view of securing foreign currency to purchase imported inputs in order to sustain its business.

Dr Gono gave an oral undertaking to avail US$150.000 per week, to the respondent, from the foreign currency auction system.

In January 2005, the respondent began to receive the said sums of foreign currency against payment of a Zimbabwean dollar equivalent to the appellant via a commercial bank.

The special arrangement was extended to thirty-five (35) other companies selected as the recipients of foreign currency.

This allocation of US$150,000 was, with effect from 16 June 2005, increased to US$250,000.

Weekly allocations, at that new level, were made to the respondent until the end of July 2005.

In August 2005, the respondent made three transfers of money, in Zimbabwe dollars, to the appellant, for the equivalent of the amount of US$750,000. The payments were accompanied by details of external creditors to be paid by the defendant.

The appellant did not pay the foreign currency.

Its position, at the trial, was that foreign currency could not be paid because it was not available.

The respondent's witness, Mr. Turina, confirmed, in evidence, that, the appellant indicated that it did not have foreign currency for disbursement.

On 2, 11 and 19 August, respectively, the respondent made payments, in Zimbabwe dollars, equivalent to US$750,000.

In respect of these three payments, the respondent would receive a phone call from the appellant before making payment.

On 1 August, it received a call from the appellant before depositing a sum of Z$4,438,294,052=45 with the appellant the following day.

With regard to the second transaction, the respondent received a phone call on 5 August. In response thereto, it deposited the sum of Z$4,511,254,261=47 with the appellant on 11 August.

On the third occasion, the telephone call was made on 17 August. The respondent deposited an amount of Z$4,587,562,920=90 with the appellant on 19 August.

Bigboy Masoso, who was the Division Chief Treasury Officer testified on behalf of the appellant to the effect, that, the disbursement of foreign currency could only be made if the front office of the appellant made the funds available. He also stated that the telephone calls made to the respondent, and other companies, were meant to provide quotations to secure constance of the exchange rate.

In the affidavit filed of record, Dr Gono stated as follows at paragraph four thereof as follows:

“I advised them that the Bank would endeavour to source foreign currency for the plaintiff to the tune of USD$150,000 per week in recognition of the plaintiff company's strategic role in the national economy. No formal binding agreement was concluded in this regard and it was never the common understanding of the parties that we were concluding a formal agreement.”

At paragraph six of the affidavit, he stated as follows:

“As a result of further representations made by the plaintiff, the defendant increased the weekly allocation of foreign currency to the plaintiff to USD250,000 from or about the 8th June 2005. Again, it was never the common understanding and contemplation of the parties that they were entering into a formal binding transaction, hence no formal contractual documentation was executed.”

Again, at paragraph seven of his affidavit, he stated as follows:

“I am advised, that, during the month of August 2005, plaintiff made payments totalling Z$13,535,110 being the quoted equivalent at the auction rate of USD750,000 which the defendant had hoped to pay to the plaintiff. Due to many other competing and pressing national requirements, the defendant was unable to avail the foreign currency, not only to plaintiff but to many other companies in a similar situation who then accepted an offer for immediate refund. Plaintiff declined the refund.”

Following a trial, the learned Judge found as follows at p8 of the judgment:

“However, the main issue, in my view, is whether, by allocating to the plaintiff US$150,000 and later US$250,000 from the auction system, the defendant then became obligated to release the money to the plaintiff upon payment by the plaintiff, within twenty-four hours, of the Zimbabwe dollar equivalent at the defendant's instruction.”

At p9 of the judgement, the court a quo stated as follows:

“It becomes crucial for the defendant to explain the reasons for Patience Aisam to set in motion the process, if foreign currency was unavailable. My view is simply that the allocation was only made against funds that were already available from the auction.

It is important to note that Patience Aisam spoke of 'an approved allocation and not successful bid.'

This was so because the plaintiff was on a special list that was not required to bid.

There could, in my view, be no approval or allocation of what was not already available.

Given the condition that the completion of each transaction was totally dependant upon the availability of foreign currency, the possibility of Aisam confirming allocation and asking for payment of the Zimbabwe dollar equivalent, within 24 hours, when there was no foreign currency already earmarked for the plaintiff is, in my view, very remote.”

The learned Judge, at p9, made the following finding:

“I am therefore unable to accept that the above scenario did not create binding obligations on the part of the defendant.

To that end, I am of the view, that, upon compliance by the plaintiff, a binding contract was concluded and what remained was the release of the foreign currency purchased by the plaintiff.

The case of F.C. Hume (Pvt) Ltd v Minister of Natural Resources & Tourism 1989 (3) ZLR 55 indeed supports this view.

With the plaintiff having complied with all the requirements, the contract was already in place and the defendant was obliged to meet its obligation.”

The gist of the court a quo's reasoning was that, at the time the phone calls were made to the respondent, the foreign currency to which the call related was available and the call was an offer which the respondent accepted by depositing the money, in Zimbabwean dollars, with the appellant thereby giving rise to a binding contract.

The court a quo gave judgment in favour of the respondent as sought in the summons. It is against this judgment that the appellant now appealed to this Court.

In the grounds of appeal, the appellant contends that:

1. The court a quo erred in law and fact in not making a finding that the payment by the respondent of the Zimbabwe dollars, as directed by the appellant, did not create a binding contract which was an end itself but that performance was always subject to foreign currency being available.

2. The court a quo erred in law and fact in making a finding that the communications made by Patience Aisam, on behalf of the appellant, calling upon the defendant to pay the Zimbabwe dollars, meant or was evidence that the foreign currency being allocated was available for disbursement to the respondent.

3. The court a quo erred in fact and law in not making a finding that non-availability of foreign currency made performance impossible and that the appellant was entitled to refund the respondent the money it had paid as the suspensive condition, viz, the availability of foreign currency had failed to be met.

4. The court erred in law in allowing the claim for interest and in ordering the interest to run from 1 September 2005.

The primary question to be decided by this Court is: whether or not there existed a binding contract for the disbursement of a sum of foreign currency to the respondent's creditors upon payment by the respondent of an equivalent sum in Zimbabwean currency.

The following are undisputed facts:

As a result of an approach to the appellant's Governor, Dr Gono, on 27 October 2004, for assistance in obtaining foreign currency, the respondent was granted the status of a successful bidder at the weekly foreign currency auction.

Several other companies were on this special list.

The respondent was not required to place bids at the auction but was merely telephonically advised of the agreed weekly allocations.

The practice had been successfully operational from January 2005 to July 2005.

Payment requirements were availed to the respondent who complied by effecting payment of the equivalent amount of the foreign currency in Zimbabwe dollars.

There was no formal contract between the appellant and the respondent.

The respondent was amongst a list of thirty five (35) companies on this special list who had been identified as preferential recipients of foreign currency under the arrangement.

The court a quo correctly found, that, the arrangement between the parties was premised on the availability of foreign currency. As such, no allocation could be made without the availability of foreign currency.

Indeed, both parties were aware that the arrangement for the disbursement of foreign currency was subject always to a condition that foreign currency had to be available in the first instance.

Mr Turina stated, that, due to the scarcity of foreign currency, the respondent had reached an agreement with the appellant whereby bids from the respondent would be given preferential treatment.

He confirmed that the information on the allocations was done telephonically and that once an allocation (i.e. the initial US$150,000 rising to US$250,000) was made, the respondent was required to pay the equivalent in Zimbabwean dollars.

The arrangement had worked well from January 2005 until July 2005.

In August 2005, the appellant failed to disburse US$750,000 to the respondent's customers and suppliers after the respondent had deposited with the appellant an equivalent sum, in Zimbabwe dollars, in three separate tranches.

In this regard, the import of the affidavit of Patience Aisam was that a telephone call would be made to advise of an approved application and not allocation. In effect, the approval and the actual allocation of foreign currency were distinct processes - premised on the availability of foreign currency.

It was the evidence of Patience Aisam's superior, Bigboy Masoso that payments in foreign currency would only occur if the front office availed such funds.

This testimony accords with logic and probability.

Patience Aisam was not employed in the Front Office which was responsible for the allocation of foreign currency.

The court a quo found that there existed a binding contract between the parties.

When regard is had to Dr Gono's affidavit, it is clear that he advised the respondent that the appellant would “endeavour” to source foreign currency for the respondent.

Such assertion does not suggest that the appellant was binding itself to provide the respondent with foreign currency on an ongoing or permanent basis.

It is not in dispute that no allocation of foreign currency was made in August 2005. According to Bigboy Masoso, the system was discontinued because there was no foreign currency.

The 24 hours notice of payment of Zimbabwe dollars was not in fact adhered to by the respondent in August 2005.

The finding by the court a quo, that, upon payment by the respondent, a binding contract was concluded, is not borne out by the evidence with regard to the payments made following telephone calls of 5 and 17 August 2005.

It is to be noted, that, there was no formal contract between the parties.

Dr Gono offered to prioritise the respondent, and other companies, in the allocation and disbursement of foreign currency.

The Court finds that when Dr Gono put in place the special arrangement, there was no intention to create a binding contract to avail foreign currency to the respondent and the other companies on the special list.

The facility was put in place, at the time, because of the acute shortage of foreign currency.

It is highly unlikely, that, given that state of affairs, Dr Gono would seek to bind the appellant to avail foreign currency to the respondent, upon payment of the local currency, when the volume of inflows of foreign currency were unpredictable.

In the circumstances, it would not be logical for Dr Gono to enter into a binding contract to supply foreign currency to the respondent on the terms suggested.

It is not without significance that 35 other companies on the special list subsequently accepted refunds of Zimbabwe dollars deposited with the appellant in August 2005.

This fact is consistent with the position that the allocation of foreign currency was conditional upon its availability at any given time.

The effect of the evidence is that the agreement for the disbursement of foreign currency was predicated upon availability of foreign currency.

It was the respondent's testimony, that, the condition that foreign currency would be availed to the respondent, subject to availability, was expressed orally by the appellant's Governor when he entertained the respondent's request to be allocated foreign currency.

The agreement to accord the respondent preferential treatment, in the disbursement of foreign currency, together with 35 other companies, did not create a binding and enforceable contract between the parties.

The performance of the appellant's obligation, to provide foreign currency, was always qualified or conditional upon its availability.

Reliance by the respondent on previous dealings did not, in the circumstances, give rise to binding contractual obligations between the parties.

The parties understood, that, in the absence of foreign currency, there was no contract between them.

The Court is satisfied, that, the evidence does not establish that a binding contract existed between the parties regarding the disbursement of foreign currency, either formally or on past practice, upon payment by the respondent of the local currency equivalent.

It was found, by the court a quo, that, the Deputy Governor, Mr Ncube, gave an undertaking to make available the US$750,000 to the respondent as and when foreign currency became available.

The Deputy Governor's position was not part of the respondent's case on the pleadings in the court a quo.

The finding by the trial court that Mr Ncube's testimony, that he had promised the respondent that it would be paid the sum of US$750,000, was binding upon the appellant is a misdirection.

The fulfilment of the promise would still have depended upon availability of foreign currency.

By the time that promise was made, the appellant had made it clear to the respondent that it was terminating the special arrangement for all companies concerned and offered to refund the Zimbabwe dollars paid by them.

The appeal is accordingly allowed with costs.

The decision of the court a quo is set aside and is substituted with the following:

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

The plaintiff issued summons against the defendant on 31 November 2009 for the payment of US$37,873=10 arising from the sale and delivery of wheat feed and soya meal during the period extending from 3 July to 15 July 2009.

The defendant admitted that payment in the sum claimed was outstanding. It, however, contested the matter on the ground that the plaintiff owed it a sum in excess of the claim by US$29,850=90 arising from overpayments made during the period 2 June to 7 July for the purchase of bulk (loose and bagged) maize. It counter–claimed for the excess amount.

The plaintiff disputed the alleged overpayment.

The defendant averred that during that period it purportedly purchased and took delivery of 534,241 kilograms of bulk maize from the plaintiff for which it paid the sum of US$117,530=82. It further averred that the plaintiff actually delivered 249,120 kilograms worth US$54,806=40. It thus overpaid the plaintiff in the sum of US$62,724=42. It further stated that its indebtedness to the plaintiff in the sum of US$37,873=10 would be offset from the overpayment leaving the plaintiff indebted to it in the sum of US$29,850=90.

It was common cause that-

1. The defendant paid the plaintiff US$117,530=82 during the period from 2 June to 7 July 2009 for the purported delivery of 534,241 kilograms of bulk maize. At all material times, the plaintiff hired the horse registration number ABB8992 drawing the trailer registration number AA57947 from Christopher Luwinda of Felfar Enterprises (Pvt) Ltd. The truck in question was often driven by Maxwell Takavadiyi. Exhibit 11 showed that as long ago as 28 October 2006 the plaintiff delivered bulk maize to the defendant using the same trailer drawn by a horse driven by Maxwell Takavadiyi. The relationship between the defendant and plaintiff went back to 2002.

2. The defendant had a weighbridge at its premises that was operated by a clerk. The clerk's station comprised of a digital weighing scale that was connected by a cable to a personal computer. On arrival at the weighbridge the driver would alight and provide the clerk with the registration numbers of the horse and trailer and the description of the cargo. They would write this information, together with the weight indicated on both the digital scale and computer screen, in a Product-in Book…,. After weighing, the driver would board his vehicle and drive it to the unloading bay/shed. After unloading the cargo, he would drive the vehicle back to the weighbridge where its net mass was recorded before leaving the premises.  Thereafter, the defendant would deliver to the plaintiff a hand-compiled goods received note…, and a computer–generated Product-In Weighbridge Ticket..,.

3. The defendant's weighbridge computer used the Win-Weigh-Pro Software that was developed and installed by Arnold Musoko in 2004. The clerk's computer was connected to a server that was housed in the Stock Controller's office. In the Stock Controller's office was another personal computer through which the Stock Controller would monitor and supervise the work of the weighbridge clerk. The computer would generate the Product-In Weighbridge Ticket which captured the transaction number, ticket number, transaction date, the registration numbers of the horse and trailer, the names of both the supplier and transporter, the product moisture content, the first weight when loaded and the second weight when empty, the weight of the cargo, the name of the operator representing the defendant and his signature, and, lastly, the name of the driver and his signature.

4.  Exhibit 7 was the main source of information for the counterclaim.

4.1 It is a 30-paged document downloaded from the server in the Stock Controller's office. It was produced by Arnold Musoko and it covered the period 2 June to 9 July 2009. However, pages 1,3,4,5 and 6 were erroneously produced into evidence as part of exhibit 7 as they provided information for the transactions of 1 March 2007. In the same vein is page 6 thereof which covers transactions of 29 February 2008 that are immediately followed by transactions dated 8 February, 29 April, 20 and 30 May and 1 June 2009 respectively. Pages 2, 7, 11-15, 17…,. 20, 24, 26 and 27 cover the transactions which form the basis of the counterclaim. At times, the vehicle made two deliveries of bulk maize on the same day. The loaded weight ranged from a minimum of 38,920 kilograms to a maximum of 45,990 kilograms. The empty weight ranged from a minimum of 14,080 kgs to a maximum of 15,880 kgs. The weight of the cargo ranged from 25,120kgs to a maximum of 30,550 kgs. Pages 28 and 29 cover the weights measured for the horse and trailer in question on 8 and 9 July 2009, after the spot check of 8 July 2009.

4.2 All the loaded weights were entered into the computer manually through the keyboard while the weights, after unloading, were captured into the computer automatically. Each keyboard entry was immediately preceded, and subsequently followed, by an automatic weighing of the vehicles that came before or after the plaintiff's. The exceptions were on 15 and 18 June and 3 July, when the plaintiff's deliveries were sandwiched between keyboard entries that do not relate to the trailer and horse the subject of the counter claim.

4.3 Each page records 100 transactions. On 2 June there were four other transactions on which the keyboard was used. On 3 June there were five other keyboard entries. On 5 June there were twenty-seven keyboard entries. On 8, 9, 10, 12, 27, 29 June there was one other keyboard entry apiece. The second delivery of 6 July was followed by a keyboard entry that did not relate to the plaintiff. On 15 June, there were seven keyboard entries, and on 16 June there were twenty-two keyboard entries. On 17 June there were twenty-eight keyboard entries and three on 18 June. There were sixteen keyboard entries on 22 June. There were two keyboard entries each on 23, 25, 28 June and 7 July. There were three keyboard entries on 30 June. On 1 July there were fifty-nine keyboard entries. On 2 and 3 July, all one hundred transactions for each day were entered through the keyboard. There were fifty-four keyboard entries on 4 July while on 5 July there were nine keyboard entries. On 6 July there were two other keyboard entries. There were no keyboard entries recorded on 8 and 9 July.

5. The defendant's claim was particularized in Annexure A the attachment to its counterclaim. Annexure A is extrapolated from both exhibits 4 and 7.

6. The events of 8 July 2009 led the defendant to mount an investigation from which it suspected that the plaintiff had overstated the deliveries of the period 2 June to 7 July 2009. 

The pith of Cletos Makono's testimony was that on 8 July 2009 he carried out a spot check of the delivery made by Maxwell Takavadiyi. He requested that the vehicle be re-weighed before it off-loaded its cargo.  Before it was re-weighed, he went to the weighbridge clerk's station with Joshua Ushe, the Mills Manager, and James Chidhindi, the Stocks Controller. He inspected…, the Product–In Book compiled by the weighbridge clerk, Hilda Gudo. The mass of the vehicle recorded by Hilda Gudo was 40,760kgs. He checked the figure captured by the computer…,. It was similar to the one in Hilda Gudo's book. The re-weighed mass of the vehicle…, was 29,380kgs. The loaded mass had been overstated by Hilda Gudo by 11,380kgs. He stated that the trailer was full to the brim of bulk maize. Hilda Gudo did not hold the access code to the computer - but James Chidhindi did. He formed the opinion that James Chidhindi had manipulated the figure recorded by the computer while Hilda Gudo had connived with him by failing to record the figure displayed on the weighbridge scale. Hilda Gudo proffered no explanation for the discrepancy. He questioned James Chidhindi who confessed that he had manipulated the computer to reflect a higher tonnage in furtherance of a scheme he had entered with Hilda Gudo and Snocross Investments (Pvt) Ltd to share the spoils after Snocross Investments (Pvt) Ltd was paid. James Chidhindi told him that this was the first such incident. Cletos Makono did not believe him. He tasked Arnold Musoko to investigate the database for the period January to July 2009. The results of the investigations are covered in the exhibits 4, 5 and 7. Exhibit 5 is an extract from the Central Vehicle Registry for the trailer AA57947. It indicates that when the vehicle was registered on 14 February 1979, its net mass was 7,470kgs while its gross mass was 32,000kgs. He averred that Hilda Gudo was hauled before a disciplinary committee and she absconded from employment. Her fellow clerk, Shepherd Mavhunga, who was off-duty, did not resume duty, while James Chidhindi resigned. He concluded that the plaintiff acted in collusion with the defendant's employees, Hilda Gudo, Shepherd Mavhunga and James Chidhindi, in overstating the tonnage it sold and delivered to the defendant on eighteen occasions; hence the counterclaim.

Under cross-examination, he revealed that both Hilda Gudo and James Chidhindi were acquitted of the criminal charges that were levelled against them. He could not dispute that the overstatement could have been due to a genuine mistake on the part of the operator of the weighbridge or a technical fault in the computer operating system. He also revealed that Hilda Gudo explained to him that she had recorded in the Product-In Book the weight appearing on the computer screen instead of the one on the weighbridge digital scale. He had seen Christopher Luwinda when he brought diesel for the truck. He denied informing him that there was a technical fault at the weighbridge but averred that he told him that the mass of the horse and trailer had been overstated. He confirmed that the trailer had side-boards but insisted that it was filled to the brim with loose maize. He was adamant that the maximum weight of that trailer, when filled to the brim, was 13,840kgs. He confirmed that after the discovery of the weight anomaly the same trailer delivered fifteen tonnes of wheat-feed filled to the brim on the same day. It also made five other deliveries on subsequent dates.

The issues referred to trial were-

1. Whether or not the plaintiff overstated the quantities of the products it delivered to the defendant; and

The plaintiff company issued summons against the defendant company on 25 November 2009. It claimed the payment of US$2,957=10 being the cost of the outstanding bags of mealie meal delivered to the defendant; interest at the prescribe rate from the date of the issue of summons to the date of payment in full and costs at the legal practitioner and client scale.

The defendant contested the matter.

It was common cause that on 17 March 2009 the plaintiff delivered 3,000 bags of mealie meal to the defendant at the cost of US$4=10 a bag.  At the commencement of the trial, the plaintiff conceded that 516 bags were sold at US$4=10 a bag while the balance of 2,484 bags was to be sold at US$3=50 per bag.

In paragraph 5 of its declaration, the plaintiff averred that 1,689 bags were returned by the defendant unsold leaving 795 bags in the custody of the defendant. At the trial, the plaintiff reduced its claim to US$ 2,782=50 being the cost of the unsold 795 bags.

In response to the averment made by the plaintiff in paragraph 5 of its declaration, the defendant pleaded and amplified in its further particulars that 645 bags were part of the consignment 2,484 bags which had gone bad that the defendant returned to the plaintiff's factory in Ruwa. The transporter charged the defendant US$600= for the delivery of the returned bags. The defendant owed the plaintiff the sum equivalent to the cost of 150 bags, which, after set off against the transporter's cost, left the plaintiff indebted to it in the sum of US$58=50. It denied owing the plaintiff any amount.

It was argued the property allegedly pledged was worth much more than the applicant's claim.

I do not have to decide the merits of the matter but it is obvious that the applicant will have extreme difficulties in preventing the holder of a judgment sounding in money from executing that judgment. 

There is no way a debtor can be allowed to prescribe when and how a creditor must execute a judgment.

On 23 January 2012, the applicant issued summons against the respondent (first defendant in the main action) and Messrs Manase and Manase Legal Practitioners as the second defendant. The action was for:-

“(a) Payment of USD9,643=20 due and owing to the plaintiff.

(b) Interest on the said amount at the prescribed rate calculated from the 21^st of September 2011 to the date of full and final payment both dates inclusive.

(c) Costs of suit.”

The background to the issuance of the summons was that in September 2009, Mr Tavenhave, who was then practising as a professional assistant under the second defendant, Manase and Manase Legal Practitioners, instructed the applicant (plaintiff in the main action) to execute on some warrants for the ejectment and execution against movable properties in respect of the following matters:-

1. Mervyn Susman Trust v Ethanasia Court Residents; and

2. Ramson (Pvt) Ltd v Edgars (Pvt) Ltd.

The applicant raised invoices amounting to a total of US$21,625=20 for his services.

Initially, a total amount of US$6,982= was paid, leaving a balance of US$14,643=20. In July 2011, the respondent made a further payment of US$5,000= and thus reducing the balance outstanding to US$9,643=20 as at that date.

That is the amount in the applicant's claim.

On 13 December 2011, the plaintiff, a mining equipment supplier, issued summons out of this court seeking payment of the sum of US$325,119=65 being the invoiced cost of electrical goods that it sold and delivered to the defendant, a mining conglomerate, between 20 August 2009 and 12 December 2011, interest at the prescribed rate from 21 November 2011 and costs of suit. The claim was made up of goods worth 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 Mazowe Gold Mine.

The claim was contested by the defendant.  In its plea, the defendant averred, in paragraph 4, that:

“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 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 has been made by the plaintiff as alleged.”

Three pre-trial conferences were held on 5, 17 and 30 April 2012. On 5 April 2012, the parties agreed to meet on 13 April 2012 to reconcile figures. On 17 April they reported that they had made progress on possible settlement. On 30 April 2012, the parties indicated that they were not able to reconcile the figures or settle and the matter was referred to trial on three issues. The issues were:

1. Whether the defendant is indebted to the plaintiff in the sum claimed or any other sum at all;

2. Whether defendant received all of the goods that form the subject of the plaintiff's claim; and

3. Whether due and proper demand for payment was made to the defendant prior to the issue of summons….,.

The defendant company operates five gold mines in Zimbabwe. These are How Mine in Bulawayo, Mazowe Mine in Mazowe, Shamva Mine in Shamva, Arcturus Mine in Goromonzi and Redwing Mine in Penhalonga. The plaintiff supplied these mines with a variety of mechanical and electrical equipment. The defendant paid for some of the supplies but did not pay for others. The parties had a ten-year mutually beneficial working relationship which, at times, saw the defendant place an order and make full pre-payments 30 to 60 days before the delivery of some of the ordered equipment. The plaintiff always delivered the ordered equipment without fail. Most of the sales were on credit to the defendant. The defendant complained against some of the equipment, specifically mixers, supplied that failed to perform to expectation. It withheld payment on other supplies delivered on credit against such malfunctioning equipment, hence the present claim.

The mechanically minded engineers Taunashe Chikuku for the plaintiff and Patrick Sana for the defendant were in agreement on the three major components of a mixer. It was common cause that it is made up of a motor, gear box and wet-ends. The two witnesses described wet ends as blades that are used to mix (agitate) sludge in a tank in the gold extraction process.

I find it logical to determine the second issue that was referred to trial first. This is in line with the plea that challenges the plaintiff to prove the equipment supplied before establishing the invoiced cost.

The evidence led by the plaintiff's first two witnesses, Ephraim Tatenda Gwatidzo and Munodawafa Dzobo, was calculated, firstly, to identify the goods that were delivered to and received by the defendant's constituent mines, and, secondly, to establish their  invoiced costs.

Ephraim Tatenda Gwatidzo detailed the goods that were delivered to each of the four mines. He relied on the documented purchase orders raised by each mine, the delivery notes from the plaintiff that were acknowledged by the authorized signatories of the defendant at each mine and the tax invoices and statements for payment raised by the plaintiff that were delivered to and received by the defendant at each mine. He also produced a schedule of the goods in dispute for each mine extracted from the purchase orders and the delivery notes. It was common cause that the defendant is indebted to the plaintiff in respect of How Mine and Redwing Mine deliveries. The schedules for, and the actual purchase orders, tax invoices, delivery notes and statements for How Mine are found on pages 33-92 of exhibit 1.  The documents show that How Mine owes the plaintiff the sum of US$143,527=91. Pages 222 to 227 of exhibit 1 established that the plaintiff is owed US$626=96 by Redwing Mine. Apparently, according to Munodawafa Dzobo's uncontroverted testimony on that aspect, the reconciliation of the Redwing Mine debt was conducted by Munodawafa Dzobo and Moyo, an employee of Redwing Mine. The defendant abandoned the defence raised in its plea in respect of the goods purchased and received by Redwing Mine and How Mine together with their carrying values. The correctness of the debt due from Redwing Mine and How mine is confirmed by the composite reconciliation done by the plaintiff for all the five mines for the period 28 August 2009 to 30 January 2012 on pages 236-238 of exhibit 1.

The plaintiff called the evidence of three witnesses.

These were Ephraim Tatenda Gwatidzo, its Business Development Manager, Munodawafa Dzobo, its Finance and Administration Manager and Taunashe Chikuku a lecturer in Engineering at the University of Zimbabwe. In addition, it produced a 295-paged bundle of documents as exhibit 1 and copies of the Bachelor's and Master's Degree certificates of the university lecturer as exhibit 2. The defendant called the evidence of Godfrey Fore, its Finance Manager and Patrick Sana, its Group Mines Engineer. In addition, it produced a 44-paged bundle of documents as exhibit 3 and an e-mail of 3 January 2012 from Ephraim Gwatidzo to the defendant's employee D Mhlanga and copied amongst others to Patrick Sana as exhibit 4.

I turn to resolve the issues referred to trial.

The first issue referred to trial is capable of resolution after the second issue. The evidence of Ephraim Tatenda Gwatidzo established that the goods forming the claim in the summons were delivered to and received by the defendant. His evidence was confirmed by delivery notes, Munodawafa Dzobo's testimony, the failure by counsel for the defendant to put the delivery in issue and the testimony of Godfrey Fore.

This is an application for absolution from the instance, or discharge at the close of the plaintiff's case.

The plaintiffs issued summons against the defendants, on 18 July 2011, claiming:

(a) Payment of the sum of US$138,648=38 (one hundred and thirty eight thousand, six hundred and forty eight dollars, and thirty eight cents), being sums of money owed by the defendants to the plaintiffs, jointly and severally the one paying the others to be absolved, being the balance of money in respect of fuel delivered to the defendants by the plaintiffs.

(b) Interest at the agreed rate of 2% per month on the capital sum calculated from 26^th February 2010 to the date of full and final payment.

(c) Costs of suit.

In the declaration to the summons, the plaintiffs averred that the first defendant, Wedzera Petroleum, is a duly registered company, a licenced fuel importer and retailer, and that the second, third and fourth defendants are its officers. The first and second plaintiffs averred that they entered into an agreement with the defendants in terms of which the plaintiffs would source, on demand, both petrol and diesel for the defendants and the defendants would then pay the plaintiffs for the fuel they received, at the agreed price per litre, within seven days of the delivery of the fuel. The plaintiffs averred, further, that between 24 - 29 January 2010 they sold to the defendants 298,554 litres of petrol, at US$0=705 per litre, valued at US$210,480= 57. In addition, the plaintiffs sold to the defendants 138,649 litres of diesel valued at US$95,667= 81. On 19 February 2010, the plaintiffs sold 210,000 litres to the defendants, at an agreed price of US$0=650 per litre, valued at US$136,500=. It was averred that the total amount due and owing for fuel supplied was US$442,648=38. The plaintiffs acknowledged that the defendants made a total payment of US$304,000= and averred that a balance of US$138,648=38 is outstanding. The defendants have failed, refused or neglected to pay this balance, together with interest thereon at the agreed rate….,.

The first defendant denied liability in the amount claimed and averred that it had settled its indebtedness to the plaintiffs in full….,.

The plaintiffs called Dumisani Pitso Murindagomo as their first witness. He told the court that he is a Director of the first plaintiff which is an accounting firm. He has a Certificate in Management and Accounting and over twenty-three years of Business and Accounting experience. He testified that:

“Second plaintiff engaged first plaintiff to represent it as its agent in the fuel trade and to market its products. First plaintiff, in turn, engaged first defendant which needed fuel on a credit basis. He dealt with second-fourth defendants in entering into the agreement to supply fuel on invoice which had to be settled in five days from the date of delivery of the fuel which would come from the second plaintiff.”

The witness tendered a bundle of documents, which were accepted into evidence, which he claimed contained an accurate record of all the financial transactions between the parties. The witness confirmed that the total sum that has not been paid, to date, is US$135,000= plus interest thereon.

Under cross examination, the witness admitted that the first defendant made its payments to the second plaintiff through the first plaintiff….,.

Webster Musayemura testified on behalf of the second plaintiff in his capacity as a Director. He told the court that:

“Second plaintiff has business interests in Zimbabwe, South Africa, Botswana and in the United States of America. Second plaintiff contracted first plaintiff to be its agent and enter into a deal for distribution of fuel with first defendant between 2008 - 2010. The fuel would be supplied by the second plaintiff off Beira in Mozambique. First defendant was required to transport the fuel from Beira to Harare. Second plaintiff used its assets in Botswana to finance its business and raised a loan with Kingdom Bank Africa in Botswana. Zimbabwe's economy was volatile and the credit facility was obtained on strict compliance terms. The defendants owed the plaintiffs US$138,648= 38 for invoice 2011103 issued on 9 February 2010, 210 litres of diesel valued at US$136,500= which was never paid. The invoice was admitted into evidence. First defendant could not access the fuel at Beira unless second plaintiff authorized access and issued loading instructions. Due to first defendant's flat refusal to pay the amount owed by second plaintiff to Kingdom Bank in Botswana has now gone up to US$800,000= (eight hundred thousand dollars). First defendant has admitted to owing plaintiffs US$7,000=, subtract that from US800,000= and plaintiffs' claim is for payment of US$793,000=.”

Under cross examination, the witness told the court that some payments were made directly to it by the first defendant and some were made to the first plaintiff. The witness was cross examined vigorously on the authenticity of the credit facility document which he tendered into evidence as proof that the second plaintiff now owes Kingdom Bank in Botswana US$800,000=. He maintained that the credit facility was for US$500,000= and that due to interest and penalty charges that sum has galloped to US$800,000=.

The plaintiff closed its case and the defendants applied for absolution from the instance.

The plaintiff issued summons for the remaining $32,115=98 on 10 July 2012….,.

On the capital amount for which summons have been issued; it is common cause that the first defendant entered into a credit facility arrangement with the plaintiff and was advanced US$50,000=. This facility operated from 3 February 2011 and the first defendant benefited from it, as borne out by the statement from the bank from page 82 of the bundle of discovered documents to page 93, where, as at 1 September 2011, the debit balance is reflected as $257,915=98. The defendants, in their evidence before the court, never disputed the authenticity or correctness of the plaintiff's bank statement. Consequently, the court makes a finding that the bank statement provided by the plaintiff from page 76 to 96 is a correct reflection of the first defendant's financial relationship with the plaintiff; although the court is just concerned with the statement from page 82, when the credit facility was concluded on 3 February 2011 up to page 93 when funds from Macy Korolnek's account to the total of $225,800= liquidated most of the first defendant's debt leaving a balance of $32,115=98.

It is clear to the court that the defendants have no real defence to the claim for the balance of $32,115=98. They admit being lent and advanced US$50,000=. The letter of 24 May 2011, from the first defendant to the plaintif confirms this;

“The only facility we have with the bank is of $50,000= secured by a bond registered over property for a period of 12 months. This facility is still running, expiring sometime in February, 2012.”

Another letter, dated, 27 October 2011, from the first defendant to the plaintiff, also admits liability for US$50,000= and proposes a payment plan; 

“In an effort to liquidate our US$50,000= facility with the bank we have managed to secure a Director's loan from one of the Director's, Mr Bernard Mutanga, in order to pay off the facility.”

The offer which was made to the plaintiff then was that the loan would be cleared by an initial payment of $20,000=, another $20,000= at the end of November 2011, and the balance of $10,000= plus interest at the end of December 2011. 

No payment was effected in terms of the above offer. 

So, clearly, the defendants admitted owing the plaintiff. Even in their plea, they do not deny liability. All they say is the debt should have been cleared off by Macy Korolnek's pledged security, but we know now, from the evidence led, that the pledged security was insufficient and did not clear the whole debt. This is clear from the bank statement and clear from the oral evidence led during the trial.

The defendants are fortunate that the use of Macy Korolnek's pledged security reduced their debt which was originally $50,000= to $32,115=98. It is unfortunate that the defendants did not agree to clear the outstanding balance after Macy Korolnek reduced the full debt for them.

As pointed out in African Banking Corporation of Zimbabwe Ltd v P.W.C Motors & Ors HH123-13, referred to by the plaintiff's counsel;

“A trend is fast developing among business people in this country to borrow huge sums of money from financial institutions and when the time to pay comes to pay as little as possible, or better still, not pay at all.”

In the present case, we have businessmen whose accepted debt of US$50,000= has been reduced for them by a third party to $32,115=98, but, the businessmen refused to pay the reduced amount, arguing that the third party's funds should have been sufficient to extinguish the debt in total. The courts cannot condone such behaviour from businesspeople of wanting to pay as little as possible or nothing, as in this case.

Consequently, the plaintiff has succeeded in establishing its claims against the defendants and I accordingly order as follows:

1. The first, second, third and fourth defendants shall jointly and severally the one paying the others to be absolved; pay to the plaintiff the capital amount of $32,115=98 plus interest of 36% per annum on the capital amount from 31 August 2011 to date of payment. The interest payable is subject to the in duplum rule.

2. Lot 1 of Lot 4 of Lot FA Quinnington, measuring 10,938 (ha) is declared executable.

On 7 October 2011, the plaintiff (Gloar Design Team) issued summons against the defendant for the following relief:-

“a) Payment of USD184,450=65 being an amount due and owing to the plaintiff by the defendant in respect of services rendered.

b) Interest on the above amount at the prescribed rate calculated from the date of summons to the date of full and final payment, both dates inclusive.

c) Costs of suit.”…,.

The dependant, however, pleaded over and raised a counterclaim for damages in the sum of US$165,461=.

The plaintiff issued summons against the defendant claiming US$11,247=00 with interest thereon at the prescribed rate with effect from 3 January, 2013 to date of full payment plus costs of suit on attorney-client scale. 

The claim is based upon non-payment for water treatment chemicals supplied by the plaintiff to the defendant at the latter's specific instance and request.

Background

The plaintiff is a duly incorporated company in terms of the laws of South Africa whose address and principal place of business is in the Republic of South Africa. The first and second defendants are duly incorporated companies in terms of the laws of Zimbabwe. The plaintiff is in the business of supplying mining equipment, spares and machinery to various companies inside and outside Zimbabwe. In the year 2008, the plaintiff supplied certain spares and equipment to the defendants. At the commencement of the trial, the court was advised by the parties that they were in agreement and that save for an amount of R119,439=90 payments made were equivalent to the value of goods supplied by the plaintiff. In other words, but for any interest and legal charges raised by the plaintiff, the only amount in dispute is R119,439=90. The plaintiff further avers that the defendant is liable to pay the said sum of R119,439=90 together with interest at the rate of 10% per month as well as collection commission and costs on a legal practitioner and client scale. 

The defendant denies that it owes any amount and contends that in any event there is no obligation to pay interest at the rate of 10% per month as well as collection commission and costs on a punitive scale. 

I shall deal with these issues in turn.

WHETHER PLAINTIFF IS ENTITLED TO PAYMENT OF R119,439=90

The plaintiff asserts that the claim for payment of R119,439=90 is valid and must stand. The plaintiff led evidence from Mathew Chikwanda, who is the Chief Executive Officer of the plaintiff's company. 

He testified that in or around March 2008, the plaintiff opened an account for the defendant for the supply of mining spares and equipment. On various dates, goods were brought in from South Africa into Zimbabwe and the defendant took delivery of the said goods on credit. Mathew Chikwanda told the court that it was understood by the parties that payment would be effected within 90 days from the date of delivery. He stated, further, that it was in the contemplation of the parties that the terms of credit would be formalised by reducing them into writing. The written credit agreement would cover issues including the rate of interest, collection commission and legal costs. It was also envisaged that the issue of securitization would be covered in such agreement. 

The parties never got to sign the agreement as there was no agreement on certain terms.

The plaintiff acknowledged that the defendant raised a query regarding goods worth R119,439=90, which it says it never received. The method of delivery, as explained by the defendant's witness, Patrick Zenizeni, was accepted by Mathew Chikwanda. It was to the effect that the plaintiff's driver would bring the goods to the defendant at Zvishavane. A physical check would be conducted by the driver and the plaintiff's employee against delivery notes. If satisfied, the defendants would sign the delivery note confirming receipt of the goods. In the event that certain goods were missing, appropriate endorsements would be made and signed for by both parties on the delivery notes. The defendant produced copies of the delivery notes that showed that certain goods were not received. Mathew Chikwanda did acknowledge that there was a query regarding certain goods that were allegedly not received by the defendant. It seems to me that the evidence of the defendant's storeman, Patrick Zenizeni, was very clear in this regard. Mathew Chikwanda was forced to concede that these goods were not received. He sought to argue that there were two separate supply contracts, being the ordinary and initial contract or arrangement and what was referred to as the CCJ Petrow arrangement, the latter being an arrangement where the defendant's purchases from the plaintiff were to financed by CCJ Petrow (Pty) Limited. Mathew Chikwanda's submission was that these missing goods were not goods that were being delivered on the ordinary account that is the subject of these proceedings but on the CCJ Petrow account. 

I did not follow the logic advanced by Mathew Chikwanda on this aspect. 

In any event, and at any rate, once it was accepted that there were goods that were not received and it is conceded that such goods have not been accounted for, it stands to reason that the defendant cannot be compelled to pay for goods not received. 

On this basis alone, the plaintiff's claim cannot succeed….,.

From all the evidence presentenced by the parties, I am of the view that the plaintiff failed to prove its claim on a preponderance of probabilities.

We accept, as correct, the submissions made on the appellant's behalf by counsel that this was a simple action for a contract price and that the parties had agreed to settle the contract price at the rate of ZAR2,000= a week for a period of one year. 

What the appellant sought in the court a quo was an order that the respondent pay a specified sum of money. An order for the payment of a sum of money in terms of a contract is, in fact, an order for the enforcement of the contract. In Jacobs v United Building Society 1981 (4) S.A.37 NESTADT J, described a claim for payment in terms of a contract in the following terms…,:

“Our law draws a clear distinction in relation to the remedies available on breach of contract between specific performance and damages. The former is performance by the person obliged in the very terms agreed upon WILLE, Principles of South African Law 6^th ed at 381); the latter is a substitutionary performance, the object whereof is to make good the plaintiff's patrimonial loss caused by the defendant's breach of contract. When a creditor under a contract in terms whereof payment is a sum of money due sues for it, this is a claim par excellence for specific performance. I have never heard of such claim being put forward in the form of or labelled damages and I entertain no doubt that it would be wrong to do so.”

The learned Judge in the court a quo absolved the respondent from the instance on the basis that the appellant had failed to prove the value of the parts used in the repair of the pumps.

It is clear that in so doing he fell into error and treated the claim as if it were one for delictual damages. What was before him was a claim for specific performance by the respondent of the contract that the parties had verbally concluded. The nature of the contract itself may have confused the Court and caused it to misdirect itself but the claim was clearly stated as one for payment of the sum agreed and for which sum, in the face of the undisputed facts and the findings of credibility made in favour of the appellant by the court a quo, no further proof was required by the appellant. The learned Judge ought, therefore, to have given judgment in favour of the appellant.

Accordingly, the following order will issue:

1. The appeal is allowed with costs.

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

(a) The defendant shall pay to the plaintiff the sum of ZAR17,353= together with interest thereon at the prescribed rate with effect from 27 January 2010 to date of payment.

Counsel for the defendant argued that the plaintiff failed to prove the value of the repairs.

He made reference to the job cards that did not itemize the cost of spares, the labour charges and the total invoice prices. Both the plaintiff's witnesses conceded that this information was missing from the job cards. Mr Suleman averred that the missing figures appeared in the computer generated invoice supplied to the defendant by the plaintiff. Outside the information in the further particulars, the only documents that contain the value of repairs are the rand invoices that have a global figure of ZAR15,000= in exhibit 1 and ZAR9,000= in exhibit 2.

The plaintiff did not lead any evidence on how these amounts were computed.

Thus, even though the defendant agreed to pay for the value of repairs in rands on 19 December 2008 and the plaintiff dispatched to it the invoice for the repairs on 30 December 2008, the plaintiff has failed to prove the value of the repairs. It did not call evidence from its buyers or storeman to establish the value of the spares and its mark up. It did not lead any evidence on how labour costs were calculated from its workshop personnel. All we have are global figures that have not been explained.

On a proper consideration of the case, I am satisfied that I should have granted the absolution from the instance prayed for by counsel for the defendant at the close of the plaintiff's case.

In the result it is ordered that:

1. The defendant is absolved from the instance.

This is an appeal against a judgment of the High Court which ordered the appellant to pay to the respondent the sum of USD301,000= 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:-

(i) US$78,485=61 delivered to Shamva Gold Mine;

(ii) US$245,467=82 delivered to How Gold Mine;

(iii) US$626=96 delivered to Redwing Gold Mine; and

(iv) US$36,184=02 delivered to Mazoe Gold Mine.

The claim was denied by the appellant. In paragraph 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….,.

THE GROUNDS OF APPEAL

The grounds of appeal essentially attack the various findings of fact made by the trial Judge;

(i) 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.

(ii) Ground 2 attacks the court a quo for not finding that all the contracts of sale had been rescinded.

(iii) Ground 3 attacks the court's finding that set off had not been established.

(iv) Ground 4 takes issue with specific findings of fact made by the trial Judge.

This is an appeal against a judgment of the High Court which ordered the appellant to pay the sum of US$763,068= to the respondent in respect of forty-eight (48) buses sold and delivered, together with interest thereon at the rate prevailing from time to time in the United States of America with effect from 22 August 2004 to date of final payment and costs.

BACKGROUND

The background to the dispute between the parties is succinctly captured in the judgment of the court a quo. It is to the following effect;

On 7 August 2007, the respondent, as plaintiff, issued summons against the defendant in HC4215/07 claiming:

(a) Payment of the sum of US$763,068= being the balance due and payable by the defendant to the plaintiff in respect of buses sold and delivered to the defendant by the plaintiff at the defendant's special instance and request which, despite demand, the defendant failed to pay to the plaintiff.

(b) Interest on the sum of US$763,068= at the rate prevailing from time to time in the Supreme Court of the United States of America with effect from 22 August 2014 to date of final payment.

(c) Payment of collection commission on the above sums calculated in accordance with by-law 70 of the Law Society of Zimbabwe By-Laws, 1982 and costs of suit on a legal practitioner and client scale to the extent that such costs are permitted in proviso (iii) to By-Law 70(2).

(d) Costs of suit.

It is necessary to set out the pertinent paragraphs of the plaintiff's declaration where its claim is set out as follows:

“3. The parties entered into an agreement in terms whereof Plaintiff undertook to supply to the Defendant certain goods, namely, Scania buses.

4. Pursuant to the agreement, Plaintiff delivered a total number of 50 Scania buses for a total purchase price of US$4,877,000=.

5. As security for the due payment of the full purchase price for the 50 Scania buses, Defendant placed at the disposal of the Plaintiff, cash cover in the total sum of ZIM$6,200,000,000= in January 2003 and again in May 2003, which amount was to be held by Metropolitan Bank of Zimbabwe Limited pending due performance by the Defendant, that is to say, payment of the full purchase price for the 50 Scania buses.

6. Pursuant to the agreement, Defendant paid a total sum of USD4,113,932= leaving a balance in the sum of US$763,068= due and payable to Plaintiff.

7. In breach of the agreement between the parties, and on or about 21^st August 2004, Defendant withdrew and or caused the withdrawal of the cash cover security earlier provided by it to the Plaintiff and the balance of the purchase price immediately became due and payable to Plaintiff.

8. Defendant agreed and undertook to pay to the Plaintiff Collection Commission and costs on an Attorney and Client scale in the event of Plaintiff incurring such charges in the recovery of all and any monies due and payable by Defendant to Plaintiff.

9. It was at all material times within the contemplation and knowledge of the parties that in the event of Defendant failing to pay the purchase price, Plaintiff would be obliged to pay the purchase price in the currency of the United States Dollar to the manufacturer of the buses, namely, Scania South Africa (Pty) Limited.

10. During the period of May 2004 to June 2007, Plaintiff paid the sum of US$763,068= to Scania South Africa (Pty) Limited representing the balance of the agreed purchase price between Plaintiff and Defendant.

11. Accordingly, Defendant is indebted to the Plaintiff in the sum of US$763,068=.

12. Despite demand, Defendant has failed to pay the sum of US$763,068=.”

On 5 October 2007, the appellant, as defendant, pleaded to this declaration as follows:

“2. Ad paragraphs 3 up to 5

These are admitted

3. Ad paragraph 6

The Defendant avers that payments were made by it and by the Government of Zimbabwe which assumed the debt. The balance of the debt subject to the Plaintiff's claim was accordingly assumed by the Government of Zimbabwe and if at all no payment was made of that amount, the Plaintiff should look to the Government of Zimbabwe for the payment.

4. Ad paragraph 7

The defendant avers that it did not cause the withdrawal of the cash cover from the Metropolitan Bank of Zimbabwe Limited. Alternatively, if it is found that it did, such withdrawal was made after assumption of the debt by the Government of Zimbabwe, and, therefore, the Defendant had been released from payment of the debt. Accordingly, there was no more cause for the continued retention of the payment by the bank.

5. Ad paragraph 8

The contents of this paragraph are denied in their entirety and the Plaintiff is put to the strict proof thereof.

6. Ad paragraph 9

This is denied and the Plaintiff is put to the strict proof thereof. Alternatively, the Defendant avers that even if the agreement provided for payment denominated in United States Dollars, it is competent for the Defendant to discharge such indebtedness in Zimbabwean dollars. In the event of the Plaintiff therefore succeeding in its claim, the Defendant shall tender performance in the equivalent sum claimed at the official exchange rate applicable in Zimbabwe as at the date of issue of summons.

7. Ad paragraphs 10 and 11

These are denied and the Plaintiff is put to the strict proof thereof.

8. Ad paragraph 12

The Defendant admits having refused to make payment to the Plaintiff given that no payment is due by it to the Plaintiff.”

Sometime in January 2008, the respondent filed a replication to the appellant's plea. The respondent denied that the debt due to it by the appellant was effectively assigned to the Government of Zimbabwe.  It averred that its claim represents the balance of the contract price originally agreed between the parties and for which the appellant remains liable to the respondent. It further denied that it released the defendant from its obligation to pay the full purchase price and maintained that the appellant is liable for the balance of the purchase price.

On 23 July 2008, the appellant filed an amended plea in terms of which it made a number of pertinent amendments;

(i) First, that the appellant denied that the agreement of sale in respect of the buses was entered into between it and the respondent. It claimed that the agreement of sale was entered into by and between it and Scania South Africa (Pty) Limited (“Scania”), a South African company which, in terms of a Distributorship Agreement, nominated the respondent as its local agent. It averred that while it admitted that the respondent was involved in the negotiations for the purchase of the buses, the final agreement was entered into with the respondent's principal, being Scania South Africa (Pty) Limited.

(ii) Second, that the appellant acknowledged the purchase price to be the sum of US$4,877,000= but being for 48 and not 50 buses as averred by the respondent in its declaration.

(iii) Third, that the appellant averred that the sum of ZW$6,200,000,000= deposited with the Metropolitan Bank of Zimbabwe was meant to be cash cover to which the respondent had access in terms of an agreement involving the Metropolitan Bank of Zimbabwe, the appellant itself as well as the respondent as agent for Scania South Africa (Pty) Limited. It averred that the agreement allowed the respondent access to the said amount for the purposes of sourcing foreign currency to pay to the seller, Scania.

(iv) Fourth, that both the appellant and the Government of Zimbabwe made payments to Scania South Africa (Pty) Limited and that the balance of the debt, the subject of the respondent's claim, was assumed by the Government of Zimbabwe. Accordingly, if no payment was made, the respondent should look to the Government of Zimbabwe for such payment. It further averred that at any rate, the agreement between the respondent's principal, Scania and the Government of Zimbabwe provided that the last payment made, in the sum of US$2,900,000= was in full and final settlement of Scania South Africa (Pty) Limited's claims against the appellant.

(v) Fifth, that it did not withdraw or cause the withdrawal of the cash cover. It averred that if it was found that it did so, then such withdrawal was made after the assumption of the debt by the Government of Zimbabwe whereby it was released from payment of the debt.

Note is taken at this stage that the authorities establish that the amendment of a pleading procedurally operates retroactively, that is from the time the pleading was originally issued.  See The Civil Practice of the High Courts and the Supreme Court of Appeal of South Africa, HERBSTEIN and VAN WINSEN, 5^th ed….,.

In its replication to the appellant's amended plea, the respondent denied the contents of the appellant's amended plea. It averred and maintained that the agreement of sale was between it and the appellant although it was known that the supplier of the buses would be Scania South Africa (Pty) Limited in terms of the underlying Distributorship Agreement between it and Scania. It further averred that in terms of that Agreement, it was to assume ownership and risk of buses, and, in turn, sell them to third parties like the defendant in its own name. The liability to pay Scania South Africa (Pty) Limited thus remained with it, while the appellant remained liable to pay it the agreed purchase price.

The appellant also averred that the interventions which were made by Scania South Africa (Pty) Limited did not novate the original agreement between the parties and were merely meant to facilitate exchange control approvals in order to expedite payment. It denied that the debt was assumed by the Government of Zimbabwe or that it released the appellant from the obligation to pay the full purchase price. It maintained that it was the seller in its own right and therefore entitled to claim the balance of the purchase price from the appellant.

The issues that were referred to trial at the pre-trial conference were:

(a) Whether or not the Agreement of Sale was between the plaintiff and the defendant.

(b) Whether or not the defendant was released by the plaintiff from liability to pay the balance of the purchase price.

(c) In the result, whether or not the defendant is indebted to the plaintiff in the sum of US$763,068=.

It is common cause that the appellant purchased the buses. The dispute relates to who the buses were purchased from. The value of the transaction and the balance owing are not in dispute, but the appellant alleges that part of the purchase price was compromised by Scania South Africa (Pty) Limited.

The court a quo was faced, however, with two contrasting explanations regarding the same transaction.

The court a quo found that the Agreement was between the appellant and the respondent. It found, as a necessary corollary, that the respondent never released the appellant from its liability to pay the purchase price in full. The court a quo therefore found in favour of the respondent…,.

GROUNDS OF APPEAL

The appellant has appealed to this court on four grounds.

(i) The first ground of appeal is that the court a quo fundamentally erred in finding that the respondent was the seller of the buses in issue and was therefore entitled to sue the appellant for the balance of the purchase price in terms of the Agreement of Sale.

(ii) The second ground of appeal is that the court a quo fundamentally erred in finding that the compromise agreement entered into between the Government of Zimbabwe and Scania South Africa (Pty) Ltd on 23 April 2004 did not have the effect of releasing the appellant from the obligation to pay the balance of the purchase price.

(iii) The third ground is that the court a quo fundamentally misdirected itself in failing to find that the withdrawal of the cash cover was not in breach of any agreement since it was done pursuant to the agreement of compromise of 23 April 2004 entered into between the representatives of the parties thereto.

(iv) The fourth ground of appeal is that the court a quo further erred in a material way in finding that the respondent's evidence was credible and was consistent with the documentary evidence produced when in fact such evidence contradicted the exhibits produced or was deficient in the following material ways:

(a) The Agreement of Sale itself was never clearly identified.

(b) The respondent's witnesses did not produce the order alleged to have been placed by the appellant with the respondent and the invoice alleged to have been issued by the respondent to the appellant.

(c) All documents referred to Scania South Africa (Pty) Ltd as the seller opposed to the respondent.

(d) The respondent's witness, Hamish Bryant Wilburn Rudland, relied on the cash cover agreements as the Agreements of Sale. This also contradicted the respondent's pleadings.

(e) All payments were made to Scania South Africa (Pty) Ltd and not to the respondent.

The appellant contended that the court a quo further erred in dismissing the application made by the appellant for absolution from the instance.

THE EVIDENCE ADDUCED BEFORE THE COURT A QUO

(a) Documentary Evidence

The court a quo admitted the following documents into evidence;

Exhibit 1 is a 'Distributor Agreement' dated 31 July 2001 between the respondent and Scania South Africa (Pty) Limited. In the agreement, the respondent was appointed the sole distributor of Scania's products in Zimbabwe. The respondent would purchase the said products in its own name and sell them in Zimbabwe. The agreement also provided that Scania South Africa (Pty) Limited shall have the right to trade directly with clients and organisations in Zimbabwe. In that event, Scania also undertook to “inform and reserve justifiable compensation” to the respondent.

Exhibit 6 is a Memorandum of a Tripartite Agreement by the respondent, the Metropolitan Bank of Zimbabwe and the appellant. The Agreement is dated 21 January 2003. It records that the Metropolitan Bank provided a total sum of ZW$4,750,000,000= to be held by the respondent as a guarantee for the due and faithful performance by the appellant of all its obligations in respect of the purchase of 32 Scania buses during the course of December 2002 from Scania South Africa (Pty) Limited.

The Memorandum of Agreement further states that Scania South Africa (Pty) Limited, through the respondent, and the appellant had entered into an Agreement of Sale whereby the appellant had bought and taken delivery of the buses specified in Annexure 'A' from the respondent for the total price of US$3,212,000=. It further states that the Metropolitan Bank, as financier for the appellant, had paid, on behalf of the appellant, the sum of ZW$4,750,000,000= to the respondent, which sum was to be held by the respondent as security for the full payment of the United States dollar price of the buses. A further balance of ZW$50 million would be paid to the respondent from Metropolitan Bank.

The Agreement also states that the payment of the purchase price was to be made by the appellant to Scania South Africa (Pty) Limited, subject to the necessary foreign currency being made available by the Reserve Bank of Zimbabwe. Furthermore, the respondent had the right to liquidate all and any such funds held by it in terms of the Agreement to satisfy in full and final settlement the full cost of the buses or any other indebtedness, loss or damage suffered by it as a result of the failure by the appellant to pay US$3,212,000= to Scania South Africa (Pty) Limited by 30 September 2003.

Another pertinent clause of the Agreement is that in the event of the appellant effecting payment of all amounts due, the respondent undertook to pay to the Metropolitan Bank all the money held as security in terms of the Agreement or any balance thereof.

Exhibit 5 is a Memorandum of Agreement entered into by and between the respondent and the appellant.  It is dated 30 May 2003 and states, in the preamble, that Scania South Africa (Pty) Limited had, as of 30 May 2003, provided the appellant with 18 more Scania Torino buses for use in its fleet. Clause (a) states:

“PMC (through Scania S.A.) and ZUPCO hereby have entered into an agreement of sale in terms of which ZUPCO has agreed to buy, and, pending payment, taken delivery of the buses specified in the first annexure.

ZUPCO has paid Z$2,700,000,000= to PMC (respondent) which sum is to be held by PMC as security cash cover for the full payment of US$1,665,000= for the buses is made to Scania S.A. in terms of this agreement.” (sic)

Clause (b) thereof provides that payment of the purchase price was to be made by the appellant to Scania South Africa (Pty) Limited in full on or before August 30, 2003.

Clause 2 of the Agreement makes reference to the appellant's obligations to Scania South Africa (Pty) Limited.

Clause 3 then states:

“In the event of ZUPCO effecting payment of all the amounts in foreign currency and due above to Scania SA, PMC undertakes to pay to ZUPCO all the money held as security hereof or any balance thereof free of any interest.”

Exhibit 2 is a Duty Free Certificate issued by the Ministry of Local Government, Public Works and National Housing. It is dated 7 January 2003 and states:

“Approval is hereby granted to Zimbabwe United Passenger Company (ZUPCO), through its agent, Pioneer Motor Company (PMC), to import 150 Scania buses from Scania South Africa, duty free. Any duties payable would be borne by the Government of Zimbabwe.”

Exhibit 3 is a letter dated 23 October 2003 from the State Procurement Board to the appellant's Chief Executive Officer in which reference is made to 48 buses delivered by the respondent to the appellant.

Exhibit 4 is an agreement dated 23 April 2004 between Scania South Africa (Pty) Limited and the Reserve Bank of Zimbabwe. The preamble is couched in the following terms:

“Whereas Scania (SA) (Pty) Ltd sold 48 buses to Zimbabwe United Passenger Company (ZUPCO)

And whereas an amount of US$3,663,068= is due by ZUPCO to Scania…,.”

It proceeds to state, inter alia, that Scania South Africa (Pty) Limited will accept the amount of US$2,900,000= in full and final settlement of the outstanding amount due by the Zimbabwe United Passenger Company (ZUPCO) to Scania South Africa (Pty) Limited.

There is no mention made of the respondent in this Agreement.

Oral Evidence

The respondent's first witness was its Chief Executive Officer, one Mr Rudland.

The essence of his evidence was to the effect, amongst other things, that the cash cover agreements, exhibits 5 and 6 were the agreements of the sale of the buses, between the respondent and the appellant. However, his testimony was permeated by uncertainty as to the details of the transactions. He contradicted himself in a material respect. At one point he said that the buses were only delivered after the cash cover agreements, which he claimed were the agreements of sale, were signed. During re-examination he changed and said that the two cash cover agreements were signed after the delivery of the buses.

The respondent's second witness was Scania South Africa (Pty) Limited's attorney, a certain Mr de Bruin.

This witness conceded that he gave contradicting evidence. Amongst other things, he spoke of a tender document which he said evidenced the awarding of a tender to the respondent to supply buses to the appellant. This document was not discovered or produced or adverted to anywhere else. He also spoke of an acknowledgment of debt allegedly signed by the respondent in Scania South Africa (Pty) Limited's favour, supposedly showing that the sale of the buses was between the respondent and the appellant.

This document was also not placed before the court.

Mr de Bruin also failed to reconcile his evidence that the Agreement of Sale was between the appellant and the respondent with conflicting documentary evidence showing that the agreement was between the appellant and Scania South Africa (Pty) Limited. The first is exhibit 6 which was signed for on behalf of the respondent by Mr Rudland and it states that Scania South Africa (Pty) Limited sold the buses to the appellant. The second is the letter of 3 February 2004 to the Governor of the Reserve Bank of Zimbabwe, authored by Mr Henriksson, the Executive Board member of Scania South Africa (Pty) Limited; and it also stated that Scania South Africa (Pty) Limited sold the buses to the appellant.

Neither of the respondent's two witnesses was able to explain away material clauses in the cash cover agreement that directly identify Scania South Africa (Pty) Limited and the appellant as the contracting parties to the sale of the buses.

IS THE COURT A QUO'S FINDING THAT THE AGREEMENT FOR THE SALE OF THE BUSES WAS BETWEEN THE RESPONDENT AND THE APPELLANT BORNE OUT BY THE EVIDENCE?

As the parties presented two conflicting or incompatible explanations for the same transaction, it was incumbent upon the respondent to prove the agreement on which it based its claim. 

The respondent's claim was based on an alleged Agreement of Sale of buses that it claimed it entered into with the appellant.

The appellant, on the other hand, argued that the agreement for the sale of the said buses was entered into by and between it and Scania South Africa (Pty) Limited - and not the respondent.

The cardinal rule on onus is that a person who claims something from another in a court of law has to satisfy the court that he is entitled to it. See Pillay v Krishna 1946 AD 946 ….,.. 

It is also settled that he who alleges must prove. See MB Investments (Pvt) Ltd v Oliver & Partners 1974 (3) SA 269 (RA).

The respondent's witness' evidence that the cash cover agreements are in fact the agreements of sale for the buses is not supported by the evidence and does not bear scrutiny. If the buses were delivered before the cash cover agreements were respectively signed, then the cash cover agreements cannot be the agreements for the sale of the buses. It follows, therefore, that the cash cover agreements cannot be the basis of the respondent's claim against the appellant.

Mr. Rudland's evidence that the respondent started delivering the buses after the signing of the agreements runs contrary to the categorical statement in the Tripartite Agreement, exhibit 6, to the effect that the appellant purchased the buses from Scania South Africa (Pty) Limited in December 2002. The witness purported to explain this discrepancy away by saying it was an “administrative issue.” 

It is clear that the cash cover agreements were not the agreements of sale.

The Duty Free Certificate also helps to shed some light on the issue. It relates to the importation of buses from Scania in South Africa by the appellant “through its agent”, the respondent. The question that immediately arises is why the respondent did not import the buses on its own and then sell them to the appellant in terms of the Distributorship Agreement if it was the seller. The question remains unanswered on the evidence adduced before the court a quo. Rather, the description of the appellant as the importer creates or leads to the inescapable conclusion that the appellant purchased the buses from a company beyond the borders.

The appellant could not have imported the buses if it was buying them from the respondent.

It is also evident from the evidence adduced before the court a quo that the appellant, at some point, liaised directly with Scania South Africa (Pty) Limited on issues relating to payment. Scania South Africa (Pty) Limited's Executive Board Member, one Henrik Henrikson, in a letter dated 3 February 2004, wrote to the Governor of the Reserve Bank of Zimbabwe stating, amongst other things, that the appellant was indebted to Scania South Africa (Pty) Limited. Part of the letter reads:

“We address this letter to you in regard to the amount of US$3,672,068= due and owing by the Zimbabwe United Passenger Company Ltd ('ZUPCO') to this company. We would like to record the following:

'1. During 2002, an agreement was entered into in terms whereof this company agreed to supply a fleet of new buses to ZUPCO. We were informed that ZUPCO is a corporation owned by the Government of Zimbabwe and is responsible for public transport.

2. It was agreed with officials of ZUPCO that payment of the purchase price of the buses would be effected in US dollars to be paid by ZUPCO to this company.'”

There is no mention of the respondent at all in the letter.

It is clear that for all intents and purposes Scania South Africa (Pty) Limited considered itself as the seller of the buses. There would otherwise have been no direct dealings with the appellant in view of the Distributorship Agreement in terms of which the respondent could secure buses from Scania South Africa (Pty) Limited and thereafter sell them, at a mark-up, in Zimbabwe, in its own name. Thus, Scania South Africa (Pty) Limited would have dealt with the respondent and the respondent would, in turn, have dealt with the appellant.

In the letter from Scania South Africa (Pty) Limited's Executive Board member referred to above, the author clearly sets out when the sale of the buses took place and how it was done. He states that the initial 32 buses were delivered in January 2003 and the last 18 were delivered in May 2003. This differs with the evidence of Mr Rudland who was at pains to explain when the actual agreement for the purchase of the buses took place, in vain.

On the one hand, Mr. Rudland said that the cash cover agreements were meant to secure the due performance of the appellant's indebtedness to Scania South Africa (Pty) Limited. On the other hand, he changed and said that the cash cover agreements were in fact the agreements of sale.

I note that the respondent's declaration does not detail the sequence of events as clearly as does the author of the letter from Scania South Africa (Pty) Limited. Such failure on the respondent's part tends to dent the credibility or probability of its version being true. This is particularly so when such failure is viewed in the light of its claim that the appellant's failure to honour its obligations to it could drive it into liquidation. Put differently, in light of such perceived magnitude and importance of the transaction, the respondent's witness' failure to give adequate detail further tilts the scale of probabilities against it. It does not lend support to its claim.

The court a quo found, in part:

“It seems to me that both of the plaintiff's witnesses gave truthful evidence. Their evidence in court is supported and corroborated by the documentary evidence produced by the plaintiff. It is clear to me that the agreement for the sale of the buses was between the plaintiff and the defendant. The facts show that when the defendant and the plaintiff entered into an agreement of sale, a separate cash cover agreement was executed to guarantee due and faithful performance of the defendant's obligations. When the defendant failed to perform, the Governor of the Reserve Bank intervened and negotiated directly with the supplier for a settlement of the sums due to the supplier and implicitly the manufacturer of the buses. This sum did not include the mark-up to which the plaintiff was entitled both in terms of its business practice, the Distributorship Agreement as well as the agreement between it and the defendant.”

The court a quo's finding that there was an agreement of sale as well as separate cash cover agreements is contrary to the evidence of Mr Rudland who said that the agreement of sale was the same as the cash cover agreements.

It is settled that an appellate court will not readily interfere with findings of fact made by a lower court. In Beckford v Beckford 2009 (1) ZLR 271 (S) the following was stated:

“It is significant that these findings were not challenged on appeal. In any event, an appellate court would not readily interfere with findings of fact made by a trial judge…,.”

The law is also settled that such findings can be interfered with where the conclusions reached by a court are contrary to the evidence before the court. This was enunciated in TM Supermarkets v Mangwiro 2004 (1) ZLR 186 (S) where the following was stated:

“I am also persuaded by the contention that the court a quo in this particular respect mis-interpreted the evidence placed before it. This Court has held, in Reserve Bank of Zimbabwe v Corrine Granger supra that such a circumstance amounts to a misdirection in law. At p6 of that judgment, MUCHECHETERE JA stated as follows:

'And a misdirection of fact is either a failure to appreciate a fact at all or a finding of fact that is contrary to the evidence actually presented.'

This authority, I find, is apposite in casu. The court a quo took the view that the responsibility in question entailed simply checking the resets and not recording the reset numbers. The evidence makes it clear this was not so. The misdirection of the court is thus evident.”

In casu, the evidence placed before the court a quo suggests that the cash cover agreements are not the agreements of sale. The evidence supports the conclusion that the transaction of the sale of the buses was between the appellant and Scania South Africa (Pty) Limited with the respondent only coming into the picture at Scania South Africa (Pty) Limited's instance, and only for the purpose of safeguarding the due performance of the agreement between the appellant and Scania South Africa (Pty) Limited. As the cash cover agreements are certainly not the agreement of sale of the buses, I conclude that the respondent did not proffer any evidence which substantiates its claim that it transacted with the appellant in respect of the purchase of the buses.

It thus did not prove that which it had alleged.

The lack of clarity of the respondent's claim and the lack of particulars of the transaction in its declaration when juxtaposed with the clarity of the details of the transaction, as stated by Scania South Africa (Pty) Limited's Executive Board member, clearly show that the probabilities do not favour the respondent's version. The documentary as well as the oral evidence before the court a quo point more towards the conclusion that the agreement for the sale of the buses was concluded between the appellant and Scania South Africa (Pty) Limited.

Further credence is lent to this probability by the fact that the documentary evidence placed before the court a quo suggests that the appellant's obligation to pay the purchase price for the buses was to Scania South Africa (Pty) Limited. Furthermore, that the Zimbabwe dollar amounts were held by the respondent so as to ensure the execution of the appellant's obligations towards Scania South Africa (Pty) Limited. The cash cover agreements record that the Zimbabwe dollar amounts were to be released upon the appellant's fulfilment of its obligations to Scania South Africa (Pty) Limited.

The appellant's version is thus further shown to be the more likely of the two.

Additionally, the respondent's second witness having testified to some material inaccuracies and to the falsity of some of the details recorded in the cash cover agreements, it follows that the cash cover agreements cannot be relied on by the respondent as the basis to establish its version of the transaction. When confronted with the clear contents of the letter authored by the Executive Board member of Scania South Africa (Pty) Limited, this witness persisted in denying that the letter spoke to an agreement between Scania South Africa (Pty) Limited and the appellant. He responded:

“It does not say that there is agreement between Scania and ZUPCO, it says it says it (would) supply buses to ZUPCO.”

The witness thus sought to portray that 'supply' and 'sale' are different things in the context of the dispute between the parties. The fallacy of this approach can be and is demonstrated by the fact that such a stance would mean that the respondent had no cause of action before the court a quo because its declaration speaks to the 'supply' and not 'sale' of Scania buses to the appellant.

The totality of the evidence adduced before the court a quo establishes the following;

(i) First, the respondent's first witness was unsure about the important details of the transaction.

(ii) Second, the respondent's version does not accord with the documentary evidence adduced before the court a quo.

(iii) Third, the respondent's witnesses failed to explain material clauses in the cash cover agreements that directly identified the appellant and Scania South Africa (Pty) Limited as the respective parties to the sale of the buses.

(iv) Fourth, the respondent did not discover the documents which could have clarified or established its position or version.

(v) Fifth, the respondent's second witness said that some of the information in the cash cover agreements is erroneous.

(vi) Finally, the respondent did not lead evidence from Scania South Africa (Pty) Limited to clarify issues and disprove the appellant's defence as alleged in its plea.

The caveat subscriptor rule sets out that a party is taken to be bound by the ordinary meaning and effect of the words which appear above its signature; for the other party is entitled to assume that he has signified his assent to the contents of the document. 

See Mdlongwa v Thembekile Mdlongwa SC98-05; WILLE'S Principles of South African Law 8^th ed..,;, Glenburn Hotels (Pvt) Ltd v England 1972 (2) SA 660 (RAD); Du Toit v Atkinson's Motors BPK 1985 (2) SA 893; and The Principles of the Law of Contract, AJ KERR, 4^th ed…,.

The cash cover agreements signed between the appellant and the respondent point to a substantive relationship between the appellant and Scania South Africa (Pty) Limited; the respondent's relevance only being that of securing the due and faithful performance of the appellant's obligation to pay for the buses to Scania South Africa (Pty) Limited….,.

A plaintiff who relies on a contract bears the onus of establishing that it is binding and enforceable and that what he claims is due. In this regard, see Tuckers Land and Development Corporation (Pty) Ltd v Loots 1981 (4) SA 260 (T)…,. 

Furthermore, the standard of proof in civil matters is on a balance of probabilities. See Miller v Minister of Pensions [1947] 2 All ER 372-374 where the rule was formulated as follows:

“It must carry a reasonable degree of probability but not as high as is required in a criminal case. If the evidence is such that the tribunal can say 'we think it more probable than not', the burden is discharged, but if the probabilities are equal, it is not.”

In West Rand Estates Ltd v New Zealand Insurances Co Ltd 1925 AD 245…, the following was stated:

“It is not mere conjecture or slight probability that will suffice, the probability must be of sufficient force to raise a reasonable presumption in favour of the party who relies on it. It must be of sufficient weight to throw the onus on the other side to rebut it.”

On a proper analysis of the evidence adduced before the court a quo, the respondent did not meet the requirements set out by the authorities. Its case is not compelling. The court a quo placed emphasis on the credibility of the respondent's witnesses but in reality their version does not tally with the evidence on record at all. The finding by the court a quo that the agreement of sale was between the appellant and the respondent is thus not supported by the evidence placed before that court.

DISPOSITION

The respondent did not prove that the transaction of the sale of the buses was between it and the appellant. Consequently, the question of whether or not Scania South Africa (Pty) Limited compromised the balance owing does not arise.

The appeal has merit and must succeed. Costs will follow the event.

In the result, it is ordered as follows:

1. The appeal succeeds with costs.

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

This is an appeal against the decision of the High Court.

The appellant borrowed US$40,000= from the respondent. The loan agreement was reduced to writing in the form of a promissory note dated 1 December 2010. They agreed on an interest rate of 7 percent per month on the unpaid balance. The appellant, as borrower, agreed to stand surety for his own debt in his “own personal capacity.” He signed the loan agreement as the borrower.

The appellant made some payments but failed to pay back the loan by 31 January 2011 as had been agreed. The parties entered into an extension of payment agreement. The appellant was to pay by the end of August 2011. The appellant again signed as the borrower. He again made some payments but failed to fully repay the loan.

The appellant, and third parties who later got involved, unsuccessfully negotiated with the respondent for a settlement. Part of the loan therefore remained unpaid.

The respondent issued summons against the appellant in the High Court claiming payment of the sum of US$80,000= which included the agreed interest at the rate of 7 per cent per month up to the limit of the in duplum rule.

The court a quo, relying on the parole evidence rule, and the evidence in the two agreements, found the appellant liable and ordered him to pay US$80,000= to the respondent.

The appellant now appeals against the court a quo's decision to this court.

The appellant raised a point of law for the first time in his Heads of Argument. He alleged that the agreement between him and the respondent was illegal because the respondent charged interest at a rate above the prescribed interest rate.

The respondent did not object to the point of law being raised for the first time on appeal, and, instead, made detailed submissions in heads of argument on the provisions of the Money Lending and Rates of Interest Act [Chapter 14:14]….,.

The appellant's grounds of appeal raise the following issues for determination:-

1. Whether the court a quo misdirected itself on the facts?

2. Whether the court a quo misdirected itself in applying the parole evidence rule?

3. The effect of the appellant contracting as borrower and surety of his own debt.

4. Whether or not the interest rate charged renders the whole loan agreement a nullity?

5. Whether the court a quo erred in awarding punitive costs against the appellant?

Whether the court a quo misdirected itself on the facts?

The factual dispute between the appellant and the respondent was narrowed down to whether or not the appellant was the principal debtor. In his pleadings, the appellant pleaded that he was a surety for a loan advanced to a third party. He argued that the respondent should first recover from the principal debtor before he seeks payment from him in his capacity as the surety.

In evidence, he admitted that he signed the two promissory notes as the borrower after agreeing to be the borrower and surety of his own debt in his personal capacity. The appellant later admitted, under cross-examination, that the loan would not have been granted if he had not presented himself as the borrower. The following exchange took place between him and counsel for the respondent in the court a quo:-

“Q. Mr Ellse, you indicated that you had requested that the loan be in Kapp Jack's name' but this was not possible, correct?

A. Correct.

Q. Notwithstanding that fact, and the fact that the agreement was put in your name, you still went ahead with the transaction, correct?

A. Correct.

Q. I reiterate that you therefore signed the promissory note as the borrower?

A. Correct. That was the only avenue I had to access the funds because there was a mutual agreement between myself, (sic) so it was borrower surety as per what I signed; it was not just for borrower, it was also to do with surety.”

Under further cross-examination, the appellant conceded that no other party besides him and the respondent signed the agreement on the two promissory notes. He further conceded that the borrowed money was paid into his Bank account.

Counsel for the appellant, in spite of the appellant's concessions, submitted that the appellant was not the principal debtor.

Counsel for the respondent submitted that he was.

The appellant's admission that he had no option but to sign as borrower for him to be granted the loan settles the factual dispute. He twice signed for the loan as the borrower. This means he borrowed the money and then stood as surety for his own debt. In his own evidence he admitted that his request for the debt to be in the name of Kapp Jack was rejected by the respondent. The loan could only be granted to him personally.

The court a quo therefore correctly found that he was the principal debtor….,.

The emails tending to show that the respondent subsequently got to know, and communicated with persons the appellant had, subsequent to their agreement, further loaned the borrowed money to, does, not affect the original agreement. The respondent remained entitled to sue the appellant for the recovery of the money the latter borrowed from him.

Bona fides of the defence on the merits and the prospects of success

The next issue that exercised my mind was whether the applicant has established that he has a bona fide defence to the claim with prospects of success.

In order for a defence to be bona fide and to carry some prospects of success it must be credible ex facie. A defence based on misrepresentation of facts may not be such a defence.

In casu, the applicant, in his founding affidavit, alleged that he is not indebted to the respondent in the sum of US$258,019=29 but to the sum of US$198,000= plus interest at the rate of 12% per annum. In this regard, he referred to paragraph 7.1.1 of the loan agreement.

The respondent responded to this assertion in some detail.

The respondent indicated that the debt arose from a facility letter the parties signed on 1 December 2010. The total sum lent in respect of that facility was a sum of US$257,000= comprising a rollover of US$175,000= from a previous arrangement and an additional US$82,000= provided for the 2010/2011 summer cropping season. The respondent went at length in explaining the interest charge and the total debt as reflected in the bank statement after taking into account the in duplum rule. The relevant statements were duly attached to the notice of opposition.

In spite of the detailed response, the applicant's answering affidavit remained as scant as it possibly could be. For instance, in paragraph 3 of the answering affidavit, the applicant stated, inter alia, that:-

“It is not correct that Applicant has no defence on the merits. The applicant is just being honest with the court by acknowledging owing Respondent US$198,000= as opposed to US$521,083=41. It is submitted that the Respondent misled court in the summons and declaration. In fact, respondent over claimed by US59,000=.

The amount that was rolled over when parties entered into the agreement was US$16,000= as opposed to US$175,000= which is the reason Respondent did not say anything about that amount. For ease of reference see attached agreement dated 9 July 2009 marked A.”

The respondent did not explain how he arrived at the figures he says he owes the respondent in terms of the rolled over figure of US$16 000=, the debt he admits to of US$198,000= and the over-claimed sum of US$59,000=. He merely made bald assertions in both the founding affidavit and the answering affidavit despite the respondent's clear explanation of its figures.

It is important to note that the applicant did not deny signing the facility letter on 1 December 2010. He simply ignored responding to that assertion that he signed that document and proceeded to say that the debt was in terms of the loan agreement dated 9 July 2009 which he attached 'Marked A'. Even that document does not, ex facie, contain the figures he alluded to.

The attempt by the applicant to divert attention from the loan agreement the respondent sued on to a prior loan agreement can only serve to show that the applicant has no defence to the claim at all.

The loan agreement of 1 December 2010 is in tandem with the figures alluded to by the respondent. It shows a rollover sum of US$175,000= and a summer cropping sum of US$82,000=. The total offered was thus US$257,000=.

It may also be noted that despite being shown that a capital sum of US$258,019=29 was, in fact, provided as evident from his bank statements and the various withdrawals he made, the applicant made no specific denial of the same. It was from that sum that the interest of US$258,019=29 (limited by the in duplum rule) and charges of US$5,044=83 were derived.

Lovemore Masvingise who, at the material time was the Credit Control Manager of the third defendant, testified on behalf of the latter. He is now the Administration Manager, he having been in the employ of the third defendant for a period of 15 years.

Lovemore Masvingise stated that the third defendant had stopped giving credit to the second defendant because it had an outstanding debt. It then demanded security to cover the historical and future debt before it could resume business with the second defendant. That is when the second defendant's representative, Russell Karimazondo, brought an Agreement between them and the plaintiff, exhibit 1. He confirmed the contents of that Agreement, including the agreement to register a mortgage bond in favour of the third defendant. He stated that the third defendant insisted on the registration of the bond, as per that Agreement, before it could resume business with the second defendant. That way the bond was registered although he, as Credit Control Manager, had not seen the plaintiff's representative to verify the authenticity of their undertaking before the bond was registered. At that time, the second defendant already owed money which is now a sum of $686,172=38.

After satisfying himself of the registration of the bond, they resumed providing airtime cards to the second defendant for its operations. On its part, the second defendant made some payments towards the debt but the aforesaid sum is still owing.

It was after the security had been registered that Senator Aguy Clement Georgias' wife and daughter came to his office inquiring about the status of the second defendant's account. He refused to divulge any information to them because they were not the account holders. Later, Senator Aguy Clement Georgias, who was known to him as a public figure but he was meeting for the first time, physically came to his office in the company of his daughter. He also inquired about the status of the account. Masvingise says, initially, he refused to divulge anything because the account did not belong to them. Senator Aguy Clement Georgias pressed for it, reminding the witness that his property was encumbered by a bond securing that account. At that he relented and gave Senator Aguy Clement Georgias the information that he required.

Senator Aguy Clement Georgias' concern was that the second defendant was not servicing the debt which situation was putting his property at risk. He also complained that the second defendant was not paying to him what was due in terms of the principal agreement. The witness then formulated the impression that the plaintiff was aware of the registration of the bond and consented to it.

Under cross examination, the witness readily accepted that the third defendant did not have a suretyship agreement with the plaintiff, except the bond, that he had not communicated with the plaintiff about the security prior to the registration of the bond as he relied entirely on Russell Karimazondo and that nowhere (other than the mortgage bond) does the plaintiff commit itself as a surety and co-principal debtor. He also readily accepted that when they gave the second defendant an indulgence in the repayment agreement signed on 6 April 2011, they had not consulted the plaintiff.

Lovemore Masvingise gave his evidence very well and did not try to add anything that would put the third defendant's case in a better light. He was quick to make concessions where that was called for and his demeanor was very good. He struck me as a credible witness. As counsel for the first defendant put it, he gave his evidence with admirable confidence and candour.

I embrace his evidence which is itself simply that the third defendant is owed a sum of $686,178=38 in respect of airtime recharge cards advanced to the second defendant on credit. The second defendant has not settled that amount, which is secured by a mortgage bond passed by the plaintiff on its property. For that reason, both the second defendant and the plaintiff are liable to the third defendant for that amount, jointly and severally; the plaintiff by virtue of the mortgage bond in question….,.

1….,.

It is, however, the quantum of the operating costs which has remained unresolved.

Simon Moyo stated that they amount to $266,665=68 when he gave evidence; a figure which counsel for the plaintiff did not take up in his closing address. He submitted that the claim for operating costs is “capable of ascertainment as at the time of granting judgment or eviction.”

Counsel for the plaintiff ended there.

In his concluding remarks, where he urges of me the grant of the order prayed for, counsel for the plaintiff did not include a prayer for operating costs standing alone. Significantly, he had submitted that they are being claimed as part of holding over damages, but only urges of me the grant of those in the sum of $4,858= from July 2014 together with operating costs.

Considering that the plaintiff amended its claim at the commencement of trial to remove the claim for operating costs as part of the figure prayed for and that no evidence was then led to explain what they amount to at the time of judgment, there is a lacunae in the plaintiff's case in that regard. Even the figure of $266,665=68, which Simon Moyo related to, does not appear on the schedule of operating costs set out at pages 39 to 40 of exhibit 1 which records $257,380=44.

I must state, however, that it has been established that the plaintiff is entitled to holding over damages from August 2014. The exact amount has not been established, and, as such, it has to be left open. The plaintiff bears the onus to prove its claim, and, on this score, the onus has not been discharged on a preponderance of probabilities at this stage….,.

1….,.

2….,.

3….,.

4. The first and second defendants shall pay to the plaintiff, jointly and severally, the one paying the other to be absolved, holding over damages in the sum of $4,858= per month from 1 August 2014 together with value added tax thereon and operating costs incurred from 1 August 2014 to date of eviction.

The plaintiff issued summons against the defendants, jointly and severally, the one paying the others to be absolved, for the following relief:-

“(a) Claim 1

(i) $64,828=67 being capital.

(ii) $267=48 being bank charges.

(iii) Interest on the sum of $64,828=67 at the rate of 4.85% per month above the prevailing Libor with effect from 1 March 2010 to date of full and final payment.

(b) Claim 2

(i) $158,432=79 being capital.

(ii) $29,270=70 being interest.

(iii) $385=97 being bank charges.

(iv) Interest on the sum of $158,432=79 at the rate of 4.85% per month above the prevailing Libor with effect from the 1^st of December 2012 to date of full and final payment.

(c) Costs of suit on a legal practitioner and client scale and collection commission as provided for under the Law Society of Zimbabwe By-Laws (1982).”

On the date of hearing, after listening to opening statements by both counsels, I realised that the issues could be narrowed down to only one; that is the level of costs payable. The parties consented to that. As a result, consent judgment was issued in the following:-

“1. That judgment in favour of the plaintiff be and is hereby granted against 1^st, 3^rd, 4^th, 5^th and 6^th defendants, jointly and severally, the one paying the other to be absolved for payment of $386,000=.

2. 1^st, 3^rd, 4^th and 6^th defendants shall pay to the plaintiff the sum of US$50,000= on or before 26 January 2015. The balance of $336,000= shall be paid on or before the 30^th April 2015.

3. A certain piece of land situate in the District of Salisbury called Stand 63 Beverly East of Beverley Estate measuring 4,684 square metres, held under Deed of Transfer number 8615/05, dated 18 December 1995, be and is hereby declared specially executable only in the event of the defendant's default and the plaintiff's legal practitioners shall attend to the conveyancing thereof.”

The plaintiff was a subcontractor to the defendant in respect of plumbing work done on or about May 2011 on a project called the Gushungo Dairy Project. Both the plaintiff and the defendant are companies which are duly registered in accordance with the laws of Zimbabwe. The dispute between the parties relates to:

(a) The value of the certified work done by the plaintiff for the defendant in terms of their contract.

(b) Whether the plaintiff was paid at all by the defendant.

(c) Whether there is any balance of payment due to the plaintiff from the defendant.

The applicants entered into a lease finance facility with the respondents. They fell into arrears in terms of the lease agreement.

On 10 September 2014, the respondents obtained a default judgment against the applicants for the payment of $88,225=14 together with interest at the rate of 25% per annum. In terms of the order, specified equipment was also declared executable. In October 2014, which was after the default judgment had been obtained, the applicants made a payment of US$50,000= and subsequently made another payment, on 3 and 4 March 2015, totalling US$38,000=. They therefore argue that save for $225=14, and interest, which they are willing to pay upon it being calculated, they have essentially satisfied the debt as per court order.

They additionally argue that if the respondents consider any other amounts as still due over and above the amount stipulated in the court order, with interest, then they need to obtain another court order.

The first respondent, on the other hand, attached certain buses belonging to the applicants in January 2015 though they did not remove them. It continues to threaten removal in the face of the applicants' refusal to sign a Deed for Settlement for what they deem to be still due. According to the first respondent's opposing affidavit, despite the above mentioned payments being made, the $50,000= went towards clearing arrear rentals which had accrued after the issuance of summons on 30 May 2014. Following this payment, it is stated, therefore, that the applicants remained indebted in the sum of $82,225=14 made up of arrear rentals and $50,000= for residual value for certain leased equipment. It is argued that the further payment of $38,000= went towards settling the residual value of $50,000= leaving a balance for that at $12,000=. They argue that the residual value fell due on 28 September 2014 when the lease agreement expired.

The gist of their argument is thus that an amount of $82,948=60, to date, remains due and it is this amount that they threaten to execute using the US$88,225=14 court order obtained in default. They rely on clause 7 of the lease agreement which allowed them to appropriate payment for any debt due. The clause they rely on reads as follows:

“The lessor may appropriate, at his sole discretion, any payments received from the lessee to any indebtedness due by the lessee to the lessor, the lessee waives his rights to appropriate payments to any other debt or account of his choice.”…,.

If, as counsel for the respondents purported to argue in his oral submissions, that the respondent was entitled to apportion payment made towards any debt owing, then it stands to reason that by issuing summons for what the respondent claimed had not been paid by the applicant, it thereby elected to apportion the payment it sought to the fulfilment of those arrears that were owing as at the time of issuance of summons.

In their heads of argument, the applicants drew on the dictum in the cases of Jossub v Tayob 1910 TS 480 and Swardiff (Pty) Ltd v Dyke N.O. 1978 (1) SA 928 (A)…, regarding the proposition that a judgment of the court for alleged breach of an obligation discharges the obligation and converts the debt into a new debt by virtue of the judgment.

However, the issue is not whether the judgment obtained wiped out the original contract between the parties. It was never brought as such nor is this the issue before me. In my view, the simple issue for resolution herein is whether or not the applicants have paid the amount that was ordered by the court in HC4370/14 as that is what the respondent obtained as their entitlement in terms of the judgment sought; furthermore, it was claimed as what was due in arrears at the time.

The dispute which the respondent issued summons for was for the payment of $88,225=14. The first respondent obtained a judgment, albeit in default, for this amount on the basis that the applicants had failed to file their plea timeously. The judgment was therefore obtained on the basis of procedural neglect rather than on the merits. Nonetheless, in so far as it had not yet been set aside, albeit there is a pending application for its rescission, it continues to stand as the court's pronunciation of the resolution of the dispute between the parties. It spells out the rights of the respondent to payment and the liability of the applicants to pay in the context of the dispute that had been placed before it. Therefore, in so far as the contested issue between the parties for which the judgment was obtained was for the payment of $88,225=14, the payment of US$50,000= and the additional payment of $38,000= having both been made after the date of the court order, could only have gone towards the satisfaction of the debt for which the first respondent had issued summons. The judgment specified with certainty the amount that was to be paid. It is this amount, as per order of the court, that the applicants were entitled to satisfy.

See also Goldsearch Technical Services (Private) Limited v Taonga Mukonoweshuro & Anor HH711-15.

It matters not, as the respondent tries to argue, that at the time that the payment was made, the applicants were actually not aware of the default judgment. Since the applicants have paid the amount stipulated, save for a balance of $225=14, which they admit owing together with interest on the judgment amount as well as legal costs, they are correct that their payment was in terms of the court judgment. The first respondent cannot execute for the full sum on an order which has largely been fulfilled on the basis of the argument that there were other amounts owing. If the first respondent is of the view that it is still owed monies which arose after it instituted its claim, then it must institute a separate action for those claims. Furthermore, there is nothing in the order obtained, or in the summons issued, that seems to suggest that the equipment deemed executable was a separate issue from the fulfilment of the above debt.

Accordingly it is ordered that:

1. The execution of the judgment of this HonourableCcourt in case HC4730/14 be and is hereby stayed.

2. The second respondent is hereby interdicted and stopped from removing into execution the property of the applicants attached in execution in terms of the judgment of this court in case HC4730/14.

3. The first respondent shall deliver to the applicants' legal practitioner a statement of the balance due and outstanding in respect of the interest in terms of the judgment in case no. HC4730/14 within seven days of the date of service of this court order upon them whereafter the applicants shall pay the said respondents the amount of such balancing outstanding.

4. The first respondent shall pay costs of this application.

In this application for default judgment, the plaintiff seeks an order to the effect that -

“1. The respondents, jointly and severally, pay the applicant the sum of US$78,900.

2. The respondents, jointly and severally, pay the applicant the sum of US$1,537,833=33 being the United States Dollar equivalent of ZW$46,135,000,000.

3. Interest at the prescribed rate (from the 25th January 2013) being the date applicant demanded return of exhibits.

4. Costs of suit on the legal practitioner and client scale.”

The claim by the plaintiff arises from his prosecution before the Regional Court on a charge of theft. He was acquitted on 18 January 2013. He gave notice, in terms of the State Liabilities Act [Chapter 8:14], on 18 March 2013.

Following the acquittal, it is contended that police unlawfully, and unprocedurally released US$78,900 and ZW$46,135,000,000 which had been seized from the applicant to one Andre Nsaka Nsaka.

It is evident that the cash in question, together with some motor vehicles, were not exhibits before the Regional Court.

It is common cause that the plaintiff was arrested on 16 February 2008 on allegations of theft of US$3,000,000 from Andre Nsaka Nsaka. The following items were seized from the plaintiff -

1. US$78,900.

2. ZW$46,135,000,000.

3. Isuzu double cab LX300 vehicle, registration number ABD 4926.

4. Toyota Vista vehicle, registration number ABC 0347.

The two motor vehicles were subsequently released....,.

The plaintiff sought confirmation, from the Reserve Bank of Zimbabwe, to the effect, that, as at 11 February 2008, the rate of exchange between the US$ and the ZW$ was US$1 to ZW$30,000. The ZW$46,135,000,000 amounts to US$1,537,833=33....,.

The claim for US$78,900 poses no problem. That is the loss the plaintiff suffered when the money was seized from him.

It is the claim for the US$1,537,833=33 that I find a problem with....,.

Commenting on currency nominalism, GROSSKOPF JA, in S.A. Eagle Insurance Co. Ltd. v Hartley 1990 (4) SA 833, had this to say…, -

“This result seems to me to be in conflict with the principle of nominalism of currency which underlies all aspects of South African law - including the law of obligations. Its essence, in the field of obligations, is that a debt sounding in money has to be paid in terms of its nominal value irrespective of any fluctuations in the purchasing power of currency. This places the risk of a depreciation of the currency on the creditor and saddles the debtor with the risk of appreciation. See FARLON and HARTHAWAY Contract: Cases Material and Commentary, 3rd ed, at 719, note 2; HJ DELPORT, Inflation and South African Law (1982) 4 Modern Business Law 115 and A SPANDAU, Inflation and the Law 1975 SALJ 31.”

Nominalism is the norm in the common law of Western States with similar systems to our own. Thus, in Humphrey (1962) 272 US 517…, the United States Supreme Court said:

“An obligation in terms of the currency of a country takes the risk of currency fluctuations and whether creditor or debtor profits by the change the law takes no account of it. Obviously, in fact, a dollar or a mark may have different values at different times, but, to the law that established it is always the same. If the debt had been due here and the value of dollars had dropped before suit was brought, the plaintiff could recover no more dollars on that account.”

A person claiming damages, in whatever form, must prove that they suffered loss in the amount claimed: see Kwindima v Mvundura 2009 (1) ZLR 168 (H).

In so awarding such damages, the court exercises its discretion. 

In deserving cases, the courts have made awards in foreign currency notwithstanding the cause of action having arisen during the era of the local currency.

I am therefore satisfied that the plaintiff's claim cannot be granted in its entirety.

A reading of the consent to judgement and Deed of Settlement (annexures A1 + 2 and B1 + 2) shows that, as of August 2014, the applicants owed the first respondent a staggering total sum of $2,490,782=72. The sum comprises:

(a) Capital (Ann. A1 & 2) $1,726,192=; Interest at 16% p.a (Aug 2013-Aug 2014) $27,619=72; Sub-total $2,002,382=72.

(b) Capital (Ann B1 & 2) $444,000=; Interest at 10% p.a (Aug 2013-Aug 2014) $44,400=; Subtotal $488,400=.

(c) Grand Total $2,490,782=72.

The writ which the first respondent issued out of this court, aimed at recovering from the applicants the sum of $1,726,192= and interest. It was confined to that sum of money and not to any other sum which falls outside its four corners. The first respondent did not advance any reasons which persuaded it to recover only a part of the debt which the applicants owed to it and not the whole amount. The writ does not, therefore, extend to the sum of $444,000= and interest. The court, however, remains of the view that the first respondent could not include the sum of $444,000= and interest in the writ because the Deed of Settlement on which that amount is based had not been translated into an order of court. What the first respondent is entitled to recover in terms of the writ is $2,002,382=72. The applicants, it has been observed, paid the sum of $1,060,000= to the first respondent. Their aim in the mentioned regard was to reduce the capital sum of $1,726,197= and interest of $276,190=72 on the same. The applicants' letter of 8 December 2014 (Annexure E1, 2 and 3) is relevant on the point at hand. The letter reads, in part:-

“We are also advised that when the sum of $1,060,000= was made there was a residue in the region of +/- $400,000= which CABS used to credit the mortgage account. Our client is of the view that CABS should have consulted it prior to appropriating in the manner it did. Our client proposes that account be credit to the DIMAF account which is subject of the writ of execution thereby clearing it and the debt will remain on the mortgage facility which will then be settled with the disposal of the other property.”…,.

It follows from the foregoing that the applicants reduced their indebtedness to the first respondent when they paid the sum of $1,060,000=. What remained outstanding was $942,382=72 and not $1,726,192= which the first respondent instructed the second respondent to recover from them in terms of the writ. There is a world of difference between what the second respondent was instructed to recover and what should have been recovered. A difference between the two sums of $783,809= cannot be said to be negligible in the view which the court holds of the matter. That difference is not only significant but it is also extremely prejudicial to the applicants.

During the hearing of the application, the court was informed that some movable goods of the second applicant were attached for a sale in execution of the judgment. Reference is made in this regard to the second respondent's returns of service numbers 035982 and 045674 which are filed of record. The returns are respectively dated 2 September and 3 November 2014. The remarks portion of the first return (035982) reads:-

“Warrant of execution enforced on the second defendant's..., goods attached; see inventory overleaf, however, too insufficient to satisfy the debt.”

The remarks on the second return (045674) reads:-

“Attached property cannot satisfy the debt. Nulla Bona.”...,.

Whilst the value of the attached property in each case remains unknown, the fact still remains. The fact is that the attached goods did, in the court's view, further reduce the applicants' indebtedness to the first respondent's claim to a sum which is less than $942,387=72.

The applicants' submission that the conduct of the respondents, the first respondent in particular, prejudiced their case in a material way cannot be controverted. There is no doubt, in the court's view, that the sum of $1,726,192= which was inserted in the writ persuaded the second respondent to attach, for sale in execution, three immovable properties of the applicants. The probabilities of the matter are that the second respondent would not have attached all the three properties if he had properly been informed to recover from the applicants the sum of $942,387=72 or less than that amount. He would, in the circumstances of this case, have proceeded to attach one or two, and not three, properties of the applicants as he did. The concerns which the applicants raised on this aspect of the application cannot, therefore, be glossed over, so to speak. It is a real concern which is not devoid of merit….,.

The applicants' third line of argument centred on the meaning and import of Rule 324 of the rules of this court.

They submitted that the amount which was in the writ was significantly reduced when they paid the first respondent the sum of $1,060,000=. They insisted that the writ which contained the sum of $1,726,192= was misleading and should, therefore, be amended to allow it to reflect what they actually owed to the first respondent.

The first respondent argued to the contrary on this aspect of the application.

It stated that the applicants made a partial satisfaction of the debt. It remained of the view that there was, therefore, no need of an amended writ. The writ, it said, remained valid and execution should proceed. It was its view that there was no legal basis for suspending the sale or cancelling the same on the basis that some amount had been paid. The first respondent submitted that what was required in the circumstances of this case was to advise the second respondent that it had been paid a certain sum of money.

Rule 324 states that a writ of execution, once issued, remains of force until such time as the judgment has been satisfied. The rule is peremptory. It offers no discretion to the parties, or to one of them, to alter or amend it.

The question which begs the answer is whether or not the second respondent would have attached the applicants' three immovable properties if his attention had been drawn to the fact that the debt which remained outstanding was not $1,726,192= but was a sum which is below $1,000,000=.

The probabilities are that he would not have attached the three properties. He would, in the court's view, have attached one property or two depending on the inquiry which he should have made in terms of the proviso to Rule 326.

The first respondent's argument, which is to the effect that the writ remains valid and enforceable against the applicants, if allowed to stand, would cause the latter persons to be visited with un-countenounced injustice.

Their three immovable properties have already been attached. Insisting that the sale in execution must proceed means that all the three properties will be placed under the hammer and most probably the three of them would, as a forced sale, fetch for much less than what they would have fetched if they were sold on the open market. They would be sold in circumstances where the court has already made some findings which are to the effect that the conduct of the respondents prejudiced the applicants' case and should, therefore, be corrected.

The courts, as an institution, should dispense justice instead of injustice. The procedural irregularities which pertain to the issuance and execution of the writ were, or remained, the main reason which compelled the applicants to approach the court for redress on the basis of urgency. It is for the mentioned reasons, if for no other, that the court will invoke Rule 4C of its rules to depart from the peremptory nature of the rule which is under consideration. That departure is required in the interests of justice as between the parties.

It will, in terms of Rule 4C, not allow the writ to stand.

The court states with little, if any, emphasis that process which, through the over-reaching conduct of one party, visits the other party with substantial prejudice as is the case in casu, cannot be allowed to stand let alone be enforced. Equity and fairness, which are the hallmark of a court's work, demand that the process be set aside in the interests of justice….,.

The applicants…,. did not, and do not, dispute their liability to the first respondent. What they disputed was the wrong information which was in the writ and the second respondent's apparent irrational way or over-attaching their properties….,.

Both respondents stand accused of the shoddy manner in which they conducted themselves in this regard.

On 13 March 2012, the plaintiff issued summons against the defendant claiming payment of $1,071,992=05 being architectural fees for architectural services allegedly rendered to the defendant.

The salient facts surrounding this claim are as follows.

On 19 September 2005, the defendant, represented by its Managing director, Dr Zvandasara, entered into an agreement for the provision of architectural services and upgrading of Belvedere Maternity Home with the plaintiff. The plaintiff, together with some consultants, provided the services. The defendant has refused to settle the fee notes presented and denies that it ever hired the plaintiff to provide the architectural services in issue.

The following issues were referred for trial:

1. Whether or not the plaintiff and defendant entered into a memorandum of agreement.

2. Whether or not the memorandum of agreement is a valid agreement which binds the defendant.

3. Whether or not the plaintiff rendered architectural services to the defendant.

4. Whether the defendant is liable to pay the plaintiff the sum claimed.

5. Whether interest on the sum should be paid at the rate of 16% per annum.

The defendant also asserts that no work was carried out after 2006 which warrants any payment and challenges the amount claimed by the plaintiff with respect to work allegedly carried out after 2006….,.

It is not disputed that the plaintiff carried out architectural services in connection with the agreement. The plaintiff put in two fee notes. The first fee note is dated 2006 and covered 50% of the work carried out and the other, for $1,071,992=05, submitted on 3 August 2010, constitutes 75% of the work carried out from the beginning to the end of the project. The 2010 fee note is for $1,071,992=05 and that amounts to 75% of the work carried out. The first fee note covers works carried out by 2006 and has prescribed.

The plaintiff concedes that the court's finding in this respect is correct.

The plaintiff however contends that its claim is made in terms of the 2010 fee note and not the 2006 fee note and maintains that it is entitled to claim the total fees charged.

The issue is how much the plaintiff is entitled to in terms of the 2010 fee note.

The work done and claimed after the 2006 fee note constitutes 25% of the work. It means that the plaintiff is entitled to only 25% of the work done under the 2010 fee note. The court will now determine whether the plaintiff has proved this percentage of the claim.

At the commencement of this trial I ruled that the claim based on the 2006 claim had prescribed. That interlocutory ruling has not been appealed against. I am perturbed by the stance adopted by the plaintiff which still persists with the original claim arguing that the judgment of the court did not have the effect of defeating or upsetting the claim. The plaintiff's witness's contention that architects know no prescription is highly contemptuous of this court and absurd. The law applies to everyone with equal force. I agree with counsel for the defendant that this attitude amounts to the plaintiff spitting at the court in the face. My ruling is clear that only 25% of the original claim remains alive and unresolved. My ruling stands. In any case, where a court has made a ruling or order on any matter whatsoever, that ruling stands until rescinded by a competent order of court or is upset by a court of appeal. It is unprofessional and discourteous for a legal practitioner to ignore such a ruling and precede and pretend as if that ruling does not exist.

The plaintiff's claim is limited to work that it carried out after it submitted its first fee note.

It was submitted that the practice is that an architect is entitled to charge fees at any stage of his work. However, once the plaintiff put in a claim, it was required to pursue it. It sat on its laurels, let the claim prescribe, and it cannot cry foul.

The additional work and claimed carried out after 2006 may be summarised as follows:

1. Facilitation of approval of drawings.

2. Capacity tasks.

3. Sewerage system capacity testing.

Once I ruled that the plaintiff was entitled to only 25% of the fees, it was incumbent upon the plaintiff to prove the work carried out after the first fee note and come up with charges for the separate work carried out. This the plaintiff did not do because it stubbornly stuck to the entire claim. Its folly has betrayed it. The fee note does not specify how much was charged for each category of work carried out.

The defendant contends that the plaintiff's claim has been reduced to $357,330=68 for work carried out after the 2006 fee note. Their computation is based on a calculation of 25% of the 2010 fee note. No attempt was made to prove 25% of the claim. The plaintiff has failed to prove that it is entitled to 25% of the fees or any lesser amount. In the absence of any apportionment of charges for each separate head of work carried out after 2006, I am unable to find that the plaintiff has proved its claim on a balance of probabilities.

In the result, it is ordered as follows;

The plaintiff's claim is dismissed with costs.

The final demand is on a Powerspeed Electrical letter head and is for US$22,968=84. Part of the letter of demand reads as follows:-

“In accordance with our agreement, this overdue amount will attracted a 4% interest charge per month.

Your credit facilities are hereby suspended until full settlement of overdue monies is received by Powerspeed Electrical Limited. You have 7 calendar days in which to settle this overdue amount or further steps, as is deemed necessary by Powerspeed Electrical Limited, will be taken to recover these monies…,.”…,.

The final demand relates to an amount of $22,968=. The defendant continued to service the debt.

The plaintiff originally claimed an outstanding balance of $12,662=. This figure was reduced by the sums of $60= and $351=, being interest which it stated was over-claimed, leaving a balance of $11,751=. The final demand states that “this overdue amount will attract a 4% interest charge per month”. The date from which interest would be levied is not specified. The claim for interest is limited to $22,968= which is the capital amount and interest carrying amount. The claimable interest does not, in terms of this agreement, extend to debts incurred after the final demand.

Mr Wallbridge conceded that it would be wrong to charge interest on any purchases after 5 May 2010. The concession was properly made. It makes sense to me that this arrangement should take effect from the date of agreement which is 5 May 2010.

The plaintiff levied interest for the months of March and April 2010 in the amounts of $434= and $880= respectively totalling $1,314=. The defendant conceded, in its submissions, that this interest was charged in error and suggests a deduction of this figure from the amount claimed leaving a balance of $10,437=.

The interest to be charged was limited to $22,968= which is the interest-bearing amount. Mr Wallbridge conceded that it would be wrong to charge interest on any purchases after May 2010. Again, the concession was properly made. The statement of account, Exhibit 2, outlines all transactions from March 2010 to October 2011. The statement does reveal that that the plaintiff calculated interest including the new purchases, contrary to the agreement between the parties. As more purchases were made, interest was being charged both on the amount due and on the subsequent purchases. Despite that the interest calculations were challenged, the plaintiff made no effort to explain and/or do a breakdown of these figures in order to refute the assertion that interest was charged in respect of the new purchases. Instead, the plaintiff contended that the burden was on the defendant to prove that it owes less than what is claimed or nothing at all. The plaintiff does not deal directly with the defence allegation in its submissions but shifts the onus onto the defendant.

It is wrong to try to shift the onus onto the defendants when the plaintiff has not established how it arrived at the figure claimed first. No attempt was made to demonstrate how the calculations were arrived at.

I am concerned about the cavalier approach the plaintiff adopted in the presentation of its case. Simple recalculations of the interest payable for June and July 2010 reveal that interest was calculated inclusive of the new purchases. For example, in order to arrive at interest of $923= for the month of June, June purchases amounting to $115= were added to the capital amount of $22,968= in order to get a total of $23,083=. The interest was calculated at 4% as follows;

$23,083= x 0,04 = $923=.

This figure includes interest on new purchases.

In the month of July, interest payable was calculated as follows. July purchases amounted to $2,110= and were added to $23,083= to give a total of $25,193=.The interest was calculated at 4% as follows;

$25,193= x 0.04 = $1,007=72; this was rounded off to $1,008=.

This approach is clearly wrong. If interest had been calculated on the interest-carrying amount of $22,968=, as agreed, the interest levied per month for May and June 2010 would have been $918=72 for both months. There is no doubt in my mind that interest was calculated contrary to the agreement that was in place. As more purchases were made, interest was being levied on the amounts due and on the subsequent purchases. The basis of the calculation of the interest was wrong, and, as a result, all the figures are distorted and incorrect.

I have not bothered to re-calculate the total interest based on the interest carrying amount because it is not my function. All I have done is to show that the approach adopted in calculating the interest owed was wrong. Ultimately, it is not known what amount of money is owed - if any. It was the plaintiff's duty to ensure that it put correct figures before the court. The plaintiff dismally failed to do that.

I am unable to find that the plaintiff has proved its case on a balance of probabilities.

The plaintiff's claim is dismissed with costs.

Costs follow the event.

Over-payment of Royalties

This issue was not persisted by the applicant in its submissions. I will take it that the applicant abandoned the claim - and rightly so in my view. The applicant had not, in its founding papers, illustrated to the court how the alleged overpayment was made in respect of each year.

Novation was defined by ZIYAMBI JA in the case of Mupotola v Southern African Development Community SC07-06 where she stated as follows:

“Novation means replacing an existing obligation by a new one, the existing obligation being thereby discharged. See, The Law of Contract in South Africa, Third Ed, by R.H Christie at p498. The above definition pre-supposes that both the existing obligation and the new one arise out of valid contracts. When parties novate they intend to replace a valid contract by another valid contract. See Swadif (Pvt) Ltd v Dyke 1978 (1) SA 928 (A) at 940 quoted by Christie in the Law of Contract in South Africa, supra.”

In casu, it is my view that the judgment against the principal debtor did not create a new agreement that set aside the suretyship agreement entered between the appellant and the principal debtor. The approach suggested by the appellant, that where a creditor sues a principal debtor separately from his surety and judgment is subsequently entered in favour of the creditor; the surety's obligation is, at that stage, discharged, is clearly an incorrect position of the law. It is trite that as long as the judgment debt has not been paid, and the matter has not prescribed, the judgment creditor may recover the debt from a surety.

The plaintiff, through a series of offer letters commencing 30 March 2009 to 25 July 2011, advanced overdraft and loan facilities to Stir Crazy Group of Companies (Annexures D, E, G, H, J and L to its particulars of claim refers).

It is an undisputed fact that Stir Crazy Group of Companies does not exist….,.

If a principal debtor does not exist or has never existed, the principle debt cannot arise as against the surety….,. See Muchabaiwa v Grab Enterprises (Pvt) Ltd 1996 (2) ZLR 691 (S). See also CF FORSYTH and JT PRETORIUS, Caney's Law of Suretyship (4ed)…,.

The plaintiff issued summons against the defendants on 18 January 2013 for the payment of $521,686=47 being money lent and advanced to Onclass Investments (Pvt) Ltd. The plaintiffs, on its declaration, stated that such loan was given in terms of a credit facility agreement between the plaintiff and Onclass Investments (Pvt) Ltd. The two defendants acted as sureties and co-principal debtors with Onclass Investments. The plaintiffs sought an order declaring the second defendant's property, namely, Stand 120 Adylinn Township 6 of Stand 8 of Adylinn North held under Deed of Transfer number 46187 executable. The plaintiff sought interest, collection commission and costs on a higher scale against the defendants.

Both defendants entered appearance to defend. On 11 February 2013, the defendants requested further particulars amongst which they sought to be furnished with particulars of how the amounts were disbursed. Under paragraph 3(b) the following particulars were sought;

“3. Ad Paragraph 9

(a)…,.

(b) How was the money availed to the Principal Debtor? If it was by way of Banker's Acceptances copies thereof are requested.”

The plaintiff provided the further particulars as follows:-

“3. Ad Paragraph 3

(a) The money was disbursed into the principal debtor's account.

(b) Copies of the banker's acceptances are attached hereto as Annexures 'B1', 'B2', 'B3', 'B4', 'B5', 'B6', 'B7' and 'B8'”.

The plaintiff, the Zimbabwe Development Bank, hereinafter referred to as the Bank, issued summons out of this court on 17 December 2004 seeking, against the three defendants, jointly and severally, the one paying the others to be absolved, payment of $587,612,879=86 and interest thereon capitalized monthly at 1% per day calculated from the date of issue of summons to the date of full payment and costs of suit on a legal practitioner scale and collection commission as provided for under the Law Society of Zimbabwe By-laws 1982.

On 6 January 2005, the defendants entered appearance in which they indicated that they had received the summons on 4 January 2005.

Counsel for the plaintiff applied to amend the summons and declaration during the plaintiff's cross-examination. She sought the deletion of the claim of interest on the bank charges, and the substitution of the payment of interest from the date of issue of summons by the date of service of summons. The application was not opposed. It was therefore granted.

In essence, the plaintiff, therefore, seeks interest, from the date of service of summons calculated at 1% per day to the date of full payment on the sum of $500 million.

The plaintiff also sought to use clause 5 of Part 1 of the General Conditions to found the claim for collection commission. The clause reads:-

“When applying receipts to amounts due priority is given to collection charges, invoice discount charges, other fees, interest and principal in that order until the debt is discharged.”…,.

Clause 5, in my view, dealt with appropriation of funds paid in general. Collection commission was not covered in the agreement itself. The plaintiff did not show that the defendants agreed to pay it.

COSTS

The issues referred to trial have all been decided against the plaintiff. The trial was necessitated by the plaintiff's decision to pursue claims for which it has failed to prove. In the same token, the defendants did not tender payment of the $500 million that they admitted owing. For that reason, even though they had succeeded, I will order them to pay the plaintiff's costs on the ordinary scale….,.

1. The defendants, jointly and severally, the one paying the others to be absolved, shall pay to the plaintiff:

(a)…,.

(b)…,.

(c) Costs of suit.

The facts of this matter, in my view, disclose a tangled web of deceit. The plaintiff is cast in the role of the big hairy spider and the defendant would have the court believe that she is a harmless fly caught in the spider's web. There is an underlying element that pervades this case, of an unfortunate malaise that has afflicted business transactions in this country in these harsh economic times. People borrow money, then turn around and come up with the flimsiest of excuses to avoid paying back.

The plaintiff issued summons against the defendant on 10 September 2009 claiming the following:

1. Payment of the amount of US$52,579=51 with interest thereon capitalized monthly at the rate of 12% per annum from 7 September 2009 to date of payment in full;…,.

To the application was attached an affidavit deposed to by one Sinikiwe Elizabeth Mukondiwa, the plaintiff's Back Office Operations Manager. In her affidavit, Mukondiwa deposes that she is duly authorised to depose to the affidavit on behalf of the plaintiff and that the facts deposed to in the affidavit are within her personal knowledge.

Sinikiwe Elizabeth Mukondiwa proceeds to state, boldly, and baldly in my view, that she verifies the plaintiff's cause of action in the matter and the amount claimed by the plaintiff. She, however, does not state how the amount claimed is arrived…,.

In opposing the application, the defendant alleged that…, the amount of the claim was incorrectly stated as he borrowed $50,000= and not the $52,579=51 that is being claimed….,.

While I am not determining the application for summary judgment itself, it appears to me that it is inadequate for a deponent to an affidavit verifying the plaintiff's claim and amount claimed, if any, to simply state boldly, and badly, that they verify the claim and the amount claimed without giving details. Verifying the claim, in my view, denotes more than restating the claim and amount claimed in the same language employed in the pleadings. It requires, in the case where an amount is claimed, to break down the amount, where appropriate, and to show how the total amount of the claim is arrived at, especially in matters where there is an accounting element.

In my view, had the deponent to the verifying affidavit in this matter correctly verified the claim and detailed how the amount of the claim was arrived at, appropriating the payments already made by the defendant to either capital or interest, the plaintiff would have realized that the amount of the interest claimed in the summons was understated and may have taken corrective steps much earlier.

The plaintiff issued summons on 25 March 2011 for the payment of a sum of USD$8,936=56, being the balance due to him from the defendant in terms of an agreed early retirement package.

The defendant adopted the stance that it had paid all the amounts due to the plaintiff in terms of the parties' agreement.

The issue that the court must determine is whether the amounts paid to the plaintiff by the defendant for October, November and December 2010 constituted notice pay in terms of the early retirement package; and whether the additional payment of cash in lieu of leave and other benefits paid during October -December 2010 also formed part of the early retirement package. If they did not, then the plaintiff's claim must succeed....,.

From the evidence adduced during the trial, the pleadings, and the documentary evidence submitted to the court, the following facts are common cause;

The plaintiff is a former employee of the defendant who requested that he be given an early retirement package, three months before the date on which he was due to reach retirement age. In October 2010, in response to the plaintiff's request, a retirement package was negotiated between the parties. It was agreed that the plaintiff would be paid a sum of USD$25,873=12 by 31 December 2010.

On 5 October 2010, the parties signed an agreement which was titled 'Innocent Chitiki: Early Retirement Package'. Under 'statutory benefits', the plaintiff was to be paid a total of USD$11,148=, which was made up of three (3) units of notice pay, cash in lieu of leave, leave bonus, housing benefits during notice plus one month up to 31 October, full benefits except business allowances during notice period, telephone allowances. 'Other' benefits totaling USD14,725=12 included a vehicle, annual bonus, fuel up to one month after notice, Term 1 school fees, service pay, and additional gratuities such as relocation to Gokwe rural home at the defendant's expense.

It is common cause that it was part of the early retirement package that; all salaries and monthly benefits were to be paid as and when due up to 31 December 2010; all other benefits were to be paid in December 2010; the vehicle was to be released immediately.

It is common cause that the defendant was told to stay at home during the notice period and that the fact that he was not required to report for duty was the defendant's standard practice for retiring employees who worked in sensitive areas that were vulnerable to security breaches.

It is common cause that the plaintiff wrote a letter to the defendant asking for payment of his package to be deferred until after 31 December 2010, the date when he officially reached retirement age, in order to avoid incurring punitive tax obligations. It is common cause that the plaintiff initially wanted to be paid a package of USD$50,000= and that he felt shortchanged by the final sum of the negotiated package.

The plaintiff's claim appears to be premised on the supposition that he ought to have been paid notice pay as well as his monthly salary and benefits for the three month notice period during which he did not report for duty at the defendant's specific instance and request. The plaintiff understood that he would be paid the 'full package' on 31 December 2010. The monthly salary that he received in September, October, and November 2010 was not part of his three month notice pay, in his view.

Is this claim supported by the evidence or by the agreement between the parties? If it is, the plaintiff is entitled to be paid the sum of USD$8,936=56 which he is claiming from the defendant.

The plaintiff told the court that his contract of employment with the defendant terminated on 31 December 2010 and that the payments made to him prior to that were his normal monthly salaries and benefits and did not form part of the retirement package.

This evidence was directly controverted by the evidence of the two defence witnesses, Cindirella Masimbe and Effort Lungu.

The defendant's witnesses told the court that it was the defendant's policy to pay cash in lieu of service of the notice period especially for senior executives, such as the plaintiff, who worked in sensitive positions. They explained the payments made to the plaintiff in terms of exhibit 7, the gross amounts, and the net amounts paid. Their evidence was that the plaintiff was paid a slight excess of the agreed sum in the early retirement package.

Mr. Lungu was emphatic that the entire retirement package was reduced to writing and signed on the 5^th of October 2010, and pointed to the notes on exhibit 7 which clearly stated that; “…, all elements that were outstanding from previous meetings have been resolved and agreed…,.;” and “…, all salaries and monthly benefits to be paid as and when due up to 31 December 2010.”…,. This referred to the notice pay, which, according to the defendant, was to be paid in monthly installments to avoid the punitive tax regime prejudicing the plaintiff who only attained the retirement age in December 2010.

In a civil case, the plaintiff must prove its case on a balance of probabilities. This has been interpreted to mean that:

“It must carry a reasonable degree of probability but not so high as required in a criminal case. If the evidence is such that the tribunal can say 'we think it more probable than not' the burden is discharged; but if the probabilities are equal it is not.”

See Milner v Minister of Pensions 1947 2 All ER 372…,. and Thulisani Dube Nyamambi v Bongani Ncube HB82-15.

In the case of Zimbabwe Electricity Supply Authority v Dera 1998 (1) ZLR 500 (SC),the court said that:

“…, in a civil case, the standard of proof is never anything other than proof on the balance of probabilities. The reason for the difference in onus between civil and criminal cases is that in the former the dispute is between individuals, where both sides are equally interested parties. The primary concern is to do justice to each party, and the test for that justice is to balance their competing claims. In a criminal matter, on the other hand, the trial is an attack by the State, representing society, on the integrity of an individual. The main concern is to do justice to the accused. If the prosecution fails, the State does not lose.”

The learned authors, HOFFMAN & ZEFFERTT, in their book SA Law of Evidence, 4ed…, state that;

“There are no exceptions to the rule that all issues in a civil action are decided upon a preponderance of probabilities.”

In JOUBERT, The Law of South Africa, vol 9…, the learned author says that:

“In civil proceedings, proof is furnished upon a preponderance of probability and this is the case even when allegations of criminal or immoral conduct are to be proved.”

Accordingly, we must balance the plaintiff's claim against the defendant's defence, and, in so doing, decide which of their versions is more likely to be true. In other words, which version is more believable or most likely to have transpired than the other.

The preponderance of probabilities is an exercise which involves an evaluation and an assessment of the likelihood of the plaintiff's version being the correct one as opposed to the defendant's or vice versa. In making this decision we look at the pleadings, at the documentary evidence, and at what the parties' representatives said and did while they were in the witness stand.

The plaintiff did not come across as a person who deliberately set out to mislead the court. What was clear was that he felt that the defendant had misled him into accepting less money than what was due to him, what he was entitled to, and what he wanted - which was USD$50,000=. What was equally clear was that the plaintiff was under the mistaken impression that the word 'package' referred to a lump sum - one off payment.

Operating under that misapprehension, he happily accepted the equivalent of his monthly salary for September - December 2010, while carefully planning how he would spend his 'package' once he got to his rural home in Gokwe. He suffered a rude awakening when he was paid his 'package' less three months cash in lieu of notice.

He was angry and confused.

The defendant told him that because he did not report for duty during those three months he was not entitled to a monthly salary, only cash in lieu of notice – but, it was the defendant's policy not to allow senior executives to report for duty during the notice period.

The defendant may have been crafty, or devious, in its negotiations with the plaintiff. But, if the unwittingly plaintiff agreed to be short-changed, is it our place, in these proceedings, to make that right when he agreed and signed for what he believed he was entitled to?

The evidence supports the fact that the plaintiff asked the defendant to defer payment of his package until January 2011 after he had reached the official retirement age to avoid paying punitive tax. There is no evidence that the parties agreed that the 'full package' would be paid in January 2011. The payment plan which appears on page 9 of exhibit 7 supports the contention made on behalf of the defendant that the cash in lieu of notice pay and the cash in lieu of leave were to be paid to the plaintiff on a monthly basis in October, November and December 2010. Although in terms of exhibit 1 the plaintiff made it clear that it was his intention to serve notice from October – December 2011, in reality that is not what transpired. The plaintiff did not report for duty during that period. He was aware of the defendant's policy. His evidence that other senior executives who did not report for duty during the notice period were paid their full salaries as well as cash in lieu of notice was bald, and unsubstantiated.

There is no evidence that the parties agreed that the whole package would be paid in December 2011 when the early retirement agreement itself contains contrary evidence.

The plaintiff failed to discharge the onus on him to prove his case on a balance of probabilities.

The probabilities raised by the evidence, coupled with the facts which are common cause, do not support the plaintiff's version of events and do not entitle him to the relief that he seeks. On the contrary, the probabilities support the defendant's version especially on the crucial point of whether there was ever any agreement between the parties that the package be paid as a whole at the end of January 2011 and whether the plaintiff had been given assurances that, despite not being required to report for duty, he would be paid his normal salaries and benefits until December.

For these reasons, the plaintiff's claim is dismissed with costs.