GUVAVA
JA:
This
is an appeal against the whole decision of the High Court sitting in
Bulawayo under judgment number HB16/14 dated 30 January 2014 in which
the appellants' application for absolution from the instance at the
close of the first defendants case was dismissed.
BACKGROUND
FACTS
The
facts which gave rise to this matter are mainly common cause and may
be summarized as follows:
On
10 June 2008 the appellant and the first respondent entered into an
agreement of sale of a certain piece of land known as Stand 1004
Redcliff Township, situate in the District of Que Que (hereinafter
referred to as the property). The property was owned by the first
respondent.
In
terms of the first respondent's summons and declaration before the
court a quo, the purchase price for the property was said to be set
at a local currency equivalent to US$180,000.00. The appellant
purchased the property with the aid of the second respondent, a
registered real estate agent.
The
dispute centered on the amount of the purchase price which was
payable.
The
first respondent alleges that it was a term of the agreement that if
the payment was to be made by cheque the amount would be based upon
the prevailing informal market rate on the date of such payment.
It
is not in dispute that the appellant paid Z$720,000,000,000,000
(Z$720 trillion) on 11 June 2008 through an interbank transfer.
The
first respondent was thereafter requested to sign a power of attorney
to effect transfer of the property by the second respondent. The
first respondent alleged that it was his understanding that the
transfer would only pass upon receipt of the full purchase price. The
first respondent averred that the appellant or the second respondent
removed some pages from the written agreement of sale and altered,
inter alia, the purchase price so that it read the sum of Z$720
trillion without his knowledge or consent. The first respondent
further indicated that the appellant and the second respondent then
attached the forged pages to the authentic document bearing the first
respondent's signature to make a complete “agreement of sale”.
Following
the signing of the power of attorney to transfer the property, the
property was transferred into the appellant's name.
According
to the first respondent the amount paid by the appellant when he
received the money was equivalent to US$96,000.00. This left a
balance of US$84,000.00, or its equivalent in Zimbabwe dollars, in
respect of the purchase price.
The
first respondent alleged that the appellant should pay the difference
but the appellant argued that it had paid the purchase price in full
in terms of the agreement.
Following
this dispute, the first respondent instituted summons seeking the
nullification of the purported agreement of sale and cancellation of
the Deed of Transfer in favour of the appellant. In the alternative,
the first respondent prayed for the appellant to pay the outstanding
balance of US$84,000.00 or its equivalent, together with interest.
PROCEEDINGS
IN THE HIGH COURT
After
the first respondent instituted summons, the appellant and second
respondent entered an appearance to defend. In its plea, the
appellant denied allegations of falsifying the agreement of sale.
The
appellant contended that the purchase price was always in Zimbabwean
dollars and not quoted in United States Dollars. The second
respondent confirmed the appellant's story.
The
appellant thereafter filed a counter claim for the eviction of first
respondent from the property. It also claimed payment of arrear
rentals and holding over damages in the sum of $400 per month plus
interest from the first respondent.
At
the close of the first respondent's case, the appellant made an
application for absolution from the instance. The appellant further
asked the court to grant its counter claim. The basis upon which this
application was made was three pronged.
(i)
Firstly, it argued that the respondent could not claim that there was
under payment when he had failed to prove the exchange rate on 11 and
12 June 2008, when the payment was made, to sustain the assertion
that the payment made was not enough if converted to United States
dollars.
(ii)
Secondly, that the power of attorney contained a purchase price of
$720 trillion. The first respondent was not disputing his signature
thereon. It thus submitted that the caveat subscripto maxim applied
regarding the signed power of attorney.
(iii)
Thirdly, that the basis of its claim for eviction was the rei
vindicatio. It further alleged that because they possessed the title
deeds of the property it was prima facie the owner of the property
and the onus now lay on the first respondent to justify why the
eviction sought was not warranted.
On
that basis it was submitted that it was entitled to the order in
terms of its counter claim for first respondent's eviction, arear
rental and holding over damages.
It
was common cause that the appellant made a payment in the sum of $720
trillion dollars through an interbank transfer commonly known as an
RTGS.
The
appellant contended that even if it was accepted that the purchase
price was pegged in United States dollars, which was denied, where
payment is made through a bank transfer, the date of the payment was
the date when the application to pay is made to the bank and not the
date the money is reflected in the account of the transferee. The
appellant thus submitted that payment of the full purchase price was
made on the date that the application for transfer of the funds was
made with the bank.
The
first respondent contended that the purchase price for the property
was the equivalent of US$180,000.00 and that the time of payment
would be the time that he received the money in his bank account and
was able to use the money and not when the application for an
interbank transfer was made.
He
argued that, because of hyperinflation at the time, when he received
the money in his account on 13 June 2008, it was less than the agreed
amount when converted into United States dollars.
He
submitted that the appellant therefore had not paid the purchase
price in full.
It
was also his submission that the original agreement of sale that he
signed indicated that the purchase price was the Zimbabwe dollar
equivalent of US$180,000.00 but the agreement was tampered with such
that the amount that was eventually reflected in the agreement was
Zimbabwe $720 trillion.
The
court a quo refused to grant the application for absolution from the
instance made by the appellant.
The
court reasoned that in view of the letter written by the appellant's
legal practitioner in respect to the purchase price being quoted as
equivalent to US$180,000 it was necessary for the appellant to
explain what the exchange rate was on 11 and 12 June when payment was
made.
With
regards to the allegation that the signed power of attorney was proof
of the purchase price the court held that the issue could not be
determined because of the allegation of fraud.
The
court also found that it was necessary for the appellant to prove its
counter claim for damages in respect to the arrear rentals and
holding over damages.
As
a result the court also declined to grant the appellant's counter
claim.
Dissatisfied
with the determination of the court a quo, the appellant, having been
granted leave, noted an appeal to this court on the following
grounds:
“The
court a quo erred in placing upon the appellant the onus to prove
what the exchange rate was on the 11th and 12th June 2008 under
circumstances where the onus was upon the 1st respondent and had to
be discharged by him.
It
so erred in failing to grant absolution from the instance on the
basis of 1st respondent's failure to prove that he had not been
paid the contract sum.
2.
The court a quo further erred in not giving effect to the fact that
1st respondent had signed transfer documents knowing what those were
and which bore the purchase price which he had already paid and which
he now sought to discount. It particularly erred on coming to the
conclusion that the issue could not be dealt with at that stage.
3.
The court a quo further erred in failing to come to the conclusion
that as appellant sought a rei vindicatio in its claim in
reconvention, the failure by the 1st respondent to rescind the
agreement would ipso jure entail the success of the action for
vindication.
4.
The court a quo further erred in failing to come to the conclusion
that the damages for unlawful occupation could competently be awarded
at least on the basis of the 1st respondent's confession.”
THE
APPELLANT'S SUBMISSIONS ON APPEAL
In
its submissions before this court, the appellant argued that the
first respondent bore the onus to prove prima facie that the sum of
$720 trillion dollars that he received was not the full purchase
price for the property. The appellant further argued that the first
respondent also had the onus to prove the exchange rate that was
applicable as at the date of payment so as to successfully argue that
$720 trillion dollars did not amount to the US$180,000.00 that he
alleged had been agreed to as the purchase price.
It
was the appellant's contention that the approach of the court a quo
in holding that the onus lay on the appellant to prove the exchange
rate on 11 and 12 of June 2008 was erroneous.
The
appellant also submitted that by signing the power of attorney to
effect transfer, the first respondent had accepted that he had been
paid the full purchase price and that he was estopped from denying
same.
The
appellant also stated that, in any event, the power of attorney was
quoted in Zimbabwean dollars in the amount of $720 trillion and that
was therefore the purchase price.
The
appellant further submitted that the court a quo should have granted
its application for absolution from the instance and thereafter
granted its claim for eviction of the first respondent together with
holding over damages as claimed.
FIRST
RESPONDENT'S SUBMISSIONS ON APPEAL
The
first respondent argued that the decision of the court a quo was
appropriate in the circumstances. The first respondent asserted that
he had proved a prima facie case of fraud and forgery which the
appellant was called upon to answer.
The
first respondent further submitted that he had proved that the
original agreement of sale was fraudulently altered without his
knowledge. The purchase price clause which stated that the purchase
price was the equivalent of US$180,000.00 was altered to reflect the
purchase price of Z$720 trillion.
The
first respondent stated that this was proved by correspondence
between the parties when they discussed the issue of the purchase
price.
He
further submitted that he was not obliged to prove the exchange rate
on 11 and 12 June as he was of the view that payment was made on 13
June. He also alleged that he had successfully proved the exchange
rate on the date he received the money.
The
first respondent also denied that the appellant was entitled to its
counter claim for eviction as the basis of the eviction was based on
the contract which stipulated that the first respondent was to grant
appellant vacant possession upon payment of the full purchase price.
ISSUES
FOR DETERMINATION BEFORE THIS COURT
Two
issues arise from both the grounds of appeal and the submissions made
by counsel before this Court. The issues to be determined by this
court are as follows:
1.
Whether or not the requisite evidentiary burden required to grant
absolution from the instance at the end of the first respondent's
case was discharged.
2.
Whether or not the appellant was entitled to an order for the first
respondent's eviction and damages.
1.
WHETHER OR NOT THE REQUISITE EVIDENTIARY BURDEN REQUIRED TO GRANT
ABSOLUTION FROM THE INSTANCE AT THE CLOSE OF THE FIRST RESPONDENT'S
CASE WAS DISCHARGED
As
stated above the first respondent instituted proceedings against the
appellant seeking the nullification of the agreement of sale in terms
of which he had sold a piece of property to the appellant. His claim
was also that the Deed of Transfer that had been made in favor of the
appellant should be cancelled.
The
first respondent prayed in the alternative that the outstanding
balance for the property be paid.
After
leading evidence to the effect that he had not been paid the full
purchase price in accordance with the agreement of sale, the
respondent closed his case.
The
appellant then applied for absolution from the instance on the basis
that the respondent's claim had not been established as
insufficient evidence had been led to show that the agreement of sale
had been altered. It was also alleged by the appellant that the
agreed purchase price of the property was always in Zimbabwean
dollars and not the United States dollars equivalent as claimed by
the first respondent. It was submitted on behalf of the appellant
that, in the event that the court accepted that the purchase price
was pegged in United States dollars, then insufficient evidence had
been placed before the court by the first respondent to establish a
valid claim as he was unaware of the prevailing market exchange rates
on 11 and 12 of June 2008.
It
is trite that after a plaintiff has closed its case, a defendant,
before commencing his own case, may apply for absolution of the
plaintiff's claim. Should the court accede to this application, the
judgment will be one of 'absolution from the instance'. See
Cilliers AC, Loots C and Nel HC, Herbstein and Van Winsen, The Civil
Practice of the Supreme Court of South Africa (4th edn, Juta and Co
Ltd) p681.
A
decree of absolution from the instance is derived from Roman Dutch
Law. It is the appropriate order to make, after all the evidence led
by the plaintiff has not laid out a prima facie case upon which a
court may find for the plaintiff.
If
at the end of the plaintiff's case there is insufficient evidence
upon which a reasonable man could find for him, the defendant is
entitled to absolution. See LH Hoffman, DT Zeffert, The South African
Law of Evidence (4th ed) p 507, who notes the following:
“It
has also been said that the term 'absolution from the instance'
is used to describe the finding that may be made at either of two
distinct stages of trial. In both cases it means that the evidence is
insufficient for a finding to be made against the defendant.”
It
is trite that the court cannot mero motu consider whether absolution
must be granted. It is an option which is available to the defendant,
upon application.
When
an application for absolution from the instance is made at the end of
the plaintiff's case the test is: what might a reasonable court do,
that is, is there sufficient evidence on which a court might make a
reasonable mistake and give judgment for the plaintiff; if the
application is made after the defendant has closed his case the test
is: what ought a reasonable court do?
In
deciding what a court may or may not do, it is implied that the court
may make an incorrect decision, because at the close of the
plaintiff's case, it will not have heard all the evidence.
In
the case of Nobert Katerere v Standard Chartered Bank Zimbabwe
Limited HB51-08, it was stated thus:
“The
court should be extremely chary of granting absolution at the close
of the plaintiff's case. The court must assume that in the absence
of very special considerations, such as the inherent unacceptability
of the evidence adduced, the evidence is true.
The
court should not at this stage evaluate and reject the plaintiff's
evidence.
The
test to be applied is not whether the evidence led by the plaintiff
establishes what will finally have to be established. Absolution from
the instance at the close of the plaintiff's case may be granted if
the plaintiff has failed to establish an essential element of his
claim - Claude Neon Lights (SA) Ltd v Daniel 1976 (4) SA 403 (A);
Marine & Trade Insurance Co Ltd v Van Der Schyff 1972 (1) SA 26
(A); Sithole v PG Industries (Pvt) Ltd HB47-05”.
What
flows from the above cases is that absolution from the instance will
not be granted if there is sufficient evidence, which a court,
directing its mind reasonably to such evidence, could or might (not
should or ought to) find for the plaintiff.
In
casu, the first respondent averred that after the appellant paid him
the equivalent of US$96,000.00, there was a balance of US$84,000.00.
It
is common cause that payment was done through an interbank transfer
on 11 June 2008. The first respondent received payment on 13 June
2008.
The
first respondent, in his evidence, did not prove what the exchange
rate was on 11 and 12 June 2008.
The
first respondent alleged that he was not obliged to do so as his case
was that he was only obliged to prove the exchange rate on the date
that the money reflected in his account.
The
evidence before the court a quo showed that as soon as the $720
trillion reflected in his account, the first respondent quickly
contacted the appellant to inform it that the money deposited into
his account had a shortfall of US$84,000.
The
appellant did not respond only to do so sometime in December 2008
indicating that the deposited amount was equivalent to the
US$180,000.
The
first respondent testified that the amount of US$96,000.00 was
arrived at using the rate he was given by Trust Bank on 13 June 2008.
At
the time the first respondent received the amount transferred, it was
less than the United States dollar stipulated amount. There was
however no evidence on which rate was being used at the time the
money was transferred.
The
appellant seems to suggest that the money it paid was equivalent to
the United States dollar amount agreed to by the parties. The rate
however was not stated in the agreement.
Once
the appellant stated that the amount deposited was equivalent to
US$180,000.00, the onus shifted from the first respondent to the
appellant, as it now carried the evidentiary burden to prove that the
transfer that it had made into the first respondent's account was
equivalent to the US$180,000.
It
was the view of the court a quo that it was incumbent upon the
appellant to lead evidence to buttress its allegation that the amount
it paid on 11 June 2008 was equivalent to the United States dollar
amount. This was on the basis that the appellant had submitted that
the amount paid on that date was equivalent to US$180,000.
It
was thus incumbent upon the appellant to state the rate that it used
in coming up with that assertion.
The
court a quo made a finding that the appellant had to answer the
question regarding the rate of exchange on 11 and 12 June 2008. This
finding was made in light of the letter written by the appellant's
legal practitioners affirming that the Zimbabwean dollar purchase
price paid by the appellant to the first respondent was equivalent to
US$180,000.00.
This
position taken by the appellant's legal practitioners, had to be
established by evidence of the exchange rate on 11 and 12 June 2008.
It
is trite that “he who alleges must prove”.
The
maxim was applied in the cases of Circle Tracking v Mahachi SC4/07
and Goliath v Member of the Executive Council for Health, Eastern
Cape 2015 (2) SA 97 (SCA).
In
the absence of such evidence, the court as the adjudicating authority
cannot make its determination.
I
share the sentiments expressed in Delta Beverages (Pvt) Ltd v Murandu
SC38/15, where it was stated that:
“I
take the time to point out that parties are expected to argue their
cases so as to persuade the court to see the merit, if any, in the
arguments advanced for them. They are not expected to make bald,
unsubstantiated averments and leave it to the court to make of them
what it can.”
It
is common cause that when the first respondent was asked what the
exchange rate was on 11 and 12 June 2008 he indicated that he did not
know. This was after first respondent had indicated that he had
received a sum less than the agreed US$180,000.00 on 13 June 2008.
In
my view this was a pertinent question which had to be answered by the
first respondent. This is so regard being had to the argument by the
appellant that the rate had to be calculated on the date that the
money was paid into the bank.
This
position is premised on the principle stated by Christie R.H in
Business Law in Zimbabwe (1st edn, Juta &Co Ltd, Cape Town, 1998)
which stated that;
“If
payment by cheques is permissible under the contract, its acceptance
by the creditor as held in Marshall v Ivory 1951 SR 76, 82, 1951 (2)
SA 555 at 558, is conditional on it being subsequently honoured, so
if it is honoured, however, the time of payment is taken to be the
time at which it was delivered to the creditor, even if it would not
be possible to present it to the debtor's bank for payment until
some later date.” (my emphasis)
Payment
by interbank transfer is similar in all respects to payment by
cheque. Proof of payment is calculated on the date that the transfer
is accepted by the Bank and not on the date that it is received by
the recipient.
Based
on the above the relevant date in the circumstances is therefore 11
June when the transfer was processed.
The
onus thus lay with the first respondent to show that the amount paid
on that date was not equivalent to the purchase price as agreed.
The
court a quo's decision was clearly premised on the assertion by the
appellant's legal practitioners that the amount paid by the
appellant was equivalent to US$180,000.00. The relevant part of the
letter which was written by the appellant's legal practitioners
read as follows:
“17
December 2008
Mkushi
Foroma and Maupa Legal Practitioners KWEKWE
RE:
ZIMASCO (PRIVATE) LIMITED V C. TSVANGIRAI STAND 1006 REDCLIFF
TOWNSHIP
Your
letter of 17 November 2008 refers.
We
now have our client's instructions and respond thereto as follows;
1.
That Zimasco is aware of only one Agreement of Sale which is the one
they signed for $720 trillion.
2.
That the purchase price of $720 trillion paid was then equivalent to
an amount of US$180,000 (which was discussed and agreed to by the
parties). Using an agreed rate of $4 billion to a US$3. That the
Agreement of Sale was signed in the afternoon of the 10th of June
2008 by Zimasco. Payment was effected on the 11th June 2008 within 24
hours of signature of the Agreement of Sale. .....”
Having
alleged the above, it was the first respondents duty to prove to the
court a quo that the amount paid was not equivalent to US$180,000
that had been agreed.
It
was him, as plaintiff, who claimed that the amount paid to him was
equivalent to US$96,000 only.
The
exchange rate which was proved by the first respondent related to the
date when the money reflected in his account. The rate proved was of
no consequence in view of the fact that the rate had to be determined
on the date that it was paid into the bank by the appellant.
The
date when it reflected in his account was of no moment to the
resolution of the dispute between the parties.
It
was the first respondent, as plaintiff, who alleged that he had not
been paid in full and that what was paid was equivalent to US$96,000
only. The burden was on him to show how the sum of Z$720 trillion
equaled to US$96,000 only. The duty was on the first respondent to
prove that insufficient money had been paid warranting the
cancellation of the agreement of sale or ordering the appellant to
pay the alleged balance.
It
seems to me that the court a quo erred and misdirected itself in
finding that the appellant had to prove the exchange rate on 11 and
12 June 2008. It was for respondent to prove his case.
Accordingly,
absolution from the instance should have been granted by the court a
quo.
2.
WHETHER OR NOT THE APPELLANT WAS ENTITLED TO AN ORDER FOR THE FIRST
RESPONDENT'S EVICTION AND DAMAGES
Having
found that the court a quo erred in declining to grant absolution
from the instance, the question of whether the appellant was entitled
to an order for the eviction of the first respondent, arear rentals
and holding over damages as counter claimed must be heard and
determined by the court a quo.
It
is common cause that, following payment of the purchase price, the
property was transferred into the appellant's name. Once the claim
for eviction is brought two requirements must be proved;
(i)
Firstly, that the appellant had ownership of the property; and
(ii)
Secondly, that the first respondent was in unlawful possession of the
property.
It
was thus incumbent upon the appellant to lead evidence in support of
the claim for eviction of the respondent.
With
respect to the holding over damages and the arrear rental the
appellant has to lead evidence to prove the amounts claimed. They
cannot be accepted on his mere say so.
DISPOSITION
The
court a quo erred when it failed to grant absolution from the
instance in this case.
The
appellant had claimed costs in the event that it succeeded. In my
view costs must follow the cause.
Accordingly
the appeal be and is hereby allowed in part with costs.
The
judgment of the court a quo is hereby set aside and substituted with
the following:
“1.
The defendant is hereby absolved from the instance with costs.
2.
The matter is hereby remitted to the court a quo for a determination
of the counter claim.
GARWE
JA: I agree
HLATSHWAYO
JA: I agree
Wilmot
& Bennet, appellant's legal practitioners
Mavhiringidze
& Mashanyare, respondent's legal practitioners
