MAKONI
JA:
This
is an appeal against the whole judgment of the High Court sitting at
Bulawayo in which it granted absolution from the instance against the
appellants` claim.
FACTUAL
BACKGROUND
This
is a contractual dispute. The appellants and the respondents entered
into an agreement of sale in respect of a certain piece of land being
Stand 710 Bulawayo Township in the District of Bulawayo known as
Sunkist Flats situate at No. 68 Samuel Parirenyatwa Street/Corner 6th
Avenue, Bulawayo (“the property”).
In
terms of the agreement the purchase price of the property was in the
sum of Z$11,500,000,000.00 (eleven billion five hundred million
dollars) payable in instalments. The first instalment of
Z$5,000,000,000.00 (five billion dollars) was to be paid upon signing
of the agreement and was duly paid. The second instalment of
Z$5,000,000,000.00 (five billion dollars) was payable by 27 January
2006 and the third instalment of Z$1,500,000,000.00 (one billion five
hundred million dollars) upon the respondents taking occupation of
the property.
On
27 January 2006 the respondents paid Z$1,800,000,000.00 (one billion
eight hundred million dollars) instead of the agreed
Z$5,000,000,000.00 (five billion dollars). After the respondents
failed to pay the remaining amount within the stipulated time, the
parties signed an addendum to the agreement of sale allowing the
respondents an extension of time within which to pay the remaining
amount.
It
was signed by the parties on 16 February 2006 and it gave the
respondents up to 28 February 2006 to pay the remaining balance.
Pursuant thereto, the respondents made further payments.
It
is common cause that by 28 February 2006 they had not cleared the
amount outstanding. A further payment was made on 3 March 2006. By
that date a total of Z$9,200,000,000.00 (nine billion two hundred
million dollars) had been paid by the respondents leaving a balance
of $2,300,000,000.00 (two billion three hundred million dollars).
The
respondents allegedly held on to this amount in the belief that the
amount was to be paid to the sellers' conveyancers in terms of
Clause 4.5 of the Agreement of Sale.
On
15 March 2006, the appellants wrote a letter to the respondents
giving them 30 days' written notice to remedy their breach failing
which the appellants would cancel the agreement. The letter further
required the respondents to pay the sum of Z$2,300,000,000.00 (two
billion three hundred million dollars) to their conveyancers Messrs
Baron & Partners as provided for in the agreement as well as the
outstanding interest charges as provided for in the addendum.
The
respondents paid an additional amount of $1,200,000,000.00 (one
billion two hundred million dollars). After getting no further
response from the respondents pursuant to the letter of 15 March 2006
in respect of the outstanding amount, the appellants instituted
proceedings in the court a
quo against
the respondents. They claimed cancellation of the agreement of sale.
They tendered a refund of all the amounts paid as the purchase price
as at the date of the summons. They further claimed costs of suit on
the attorney and client scale in the event that the respondents
opposed the matter.
The
respondents denied breaching the agreement of sale and stated that
they had complied with the agreement by paying the purchase price in
full.
The
matter was referred to trial on mainly two issues;
(i)
The first issue was whether the defendants (the respondents) had
breached the contract.
(ii)
The other issue was whether the plaintiffs (the appellants) were
entitled to cancel the agreement based on the defendants' breach.
The
appellants gave evidence on their own behalf and closed their case.
Thereafter the respondents applied for absolution from the instance
arguing that the appellants had not proved a prima
facie
case as they had failed to prove any breach of the agreement of sale
and a right to cancel the agreement.
On
5 July 2018, the court a
quo
granted the respondents' application for absolution from the
instance reasoning that the plaintiff's case was full of glaring
inconsistencies and unacceptable variances with the pleadings filed
of record. It found that the appellants had failed, at the close of
their case, to establish a prima
facie
case.
The
appellants, aggrieved by that decision, filed the present appeal on
the following grounds;
“GROUNDS
OF APPEAL
1.
The court a
quo
erred in law by granting absolution from the instance when the
appellants had established a prima
facie
case of breach of contract by the respondents which breach entitled
the appellants to cancel the contract.
2.
The court a
quo
grossly misdirected itself on the facts by concluding that the
appellants received the full purchase price set out in the contract
when there was sufficient evidence to the contrary and no reasonable
court applying its mind to the evidence on record and the test for
absolution from the instance could have arrived at the same
conclusion.
3.
The court a
quo
grossly misdirected itself on the facts by concluding that the
appellants had admitted that they had received the full market value
of the property agreed upon at the time of contracting when there is
no basis for such a conclusion and no reasonable court could have
arrived at the same conclusion.
4.
The court a
quo
erred in law by concluding that the appellants are not entitled to
cancel the contract on account of breach by the respondents because
the appellants allegedly breached the contract first, which alleged
breach by the appellants was never pleaded by the respondents as a
defence to the appellants` claim.
5.
The court a
quo
erred in law by applying the contra
preferentum
rule against the appellants when there was no ambiguity at all as to
the breach committed by the respondents and the appellants right to
cancel the contract.”
Notwithstanding
the number of grounds of appeal raised by the appellants, the court
takes the view that the present appeal turns on the sole issue of
whether or not the court a
quo
was correct in granting the application for absolution from the
instance made by the respondents.
THE
APPLICABLE LAW
The
law to be applied in the present circumstances was eloquently
articulated by MAKARAU JA in Competition
and Tariff Commission v Iwayafrica Zimbabwe (Pvt) Ltd
SC58/19 at paras 13-15 where she said the following:
“[13]
The law on when a court may grant absolution from the instance at the
close of the plaintiff's case is settled. (See Supreme
Service Station (1969) (Private) Limited v Fox & Goodridge
Limited 1971
(1) ZLR 1 (A) and United
Air Charters (Private) Limited v Jarman
1994 (2) ZLR 341 (S). The court granting absolution must be satisfied
that there is no evidence before it upon which a reasonable court
might find for the plaintiff.
[14]
Expressed differently, the court considering an application for
absolution from the instance must ask itself if there is no evidence
at all on each and every essential averment that the plaintiff must
make to sustain the cause of action. If there is some evidence on all
the essential averments, absolution should not be granted. If there
is evidence on some but not on all the essential averments,
absolution may be granted, for in that instance, the plaintiff will
not be able to sustain and perfect its cause of action. This is so
because an application for absolution from the instance stands on
pretty much the same footing as an application for the discharge of
an accused person at the close of the State case albeit
on a lower threshold of the burden of proof.
[15]
It follows then that a court granting absolution must be clear on the
essential averments that a plaintiff has to make to sustain the cause
of action.”
See
also United
Air Charters (Pvt) Ltd v Jarman 1994 (2) ZLR 341 (S) at 343.
APPLICATION
OF THE LAW TO THE FACTS
In
casu,
it is common cause that the appellants` cause of action was breach of
contract. Clause 1.1 of the agreement which regulated the purchase
price and its payment provided as follows:
“The
purchase price of the property shall be the sum of $11,500,000,000
(eleven billion five hundred million dollars) which shall be payable
in accordance with the provisions specified under Special Conditions
elsewhere in this agreement.”
The
relevant part of the Special Conditions clause provided as follows:
“4.2
THE FIRST PAYMENT in the sum of $5,000,000,000-00 (Five Billion
Dollars) shall be payable upon signing of this agreement by RTGS
transfer to an account to be advised.
4.3
THE SECOND PAYMENT in the sum of $5,000,000,000-00 (Five Billion
Dollars) shall be payable on or before the 27th
January 2006 by RTGS transfer to an account to be advised, else the
Midrate applies thereafter.
4.4
THE THIRD PAYMENT in the sum of $1,500,000,000-00 (One Billion Five
Hundred Million) shall be payable on the Purchaser obtaining
occupation of the property.
4.5
The two parties agree that any amounts paid shall be immediately
released to the sellers save for any amounts required by law to be of
the Conveyancers on account of Capital Gains Tax.
…
4.8
In the event that the sum of $10,000,000,000-00 (Ten Billion Dollars)
deposit shall not have been paid in full by the 10th
February 2006 the Sellers shall have the right to cancel the
Agreement forthwith notwithstanding to the contrary containing this
Agreement.”
The
addendum to the agreement granted the respondent extension of time to
pay the outstanding amount by 28 February 2006.
The
appellants argue that the second instalment of Z$5,000,000,000 was
not paid in full as was required by the agreement and that the
respondents only paid Z$1,800,000,000.00 (one billion eight hundred
million dollars) thus leaving a balance of Z$3,200,000,000.00 (three
billion two hundred million dollars). The second instalment ought to
have been paid by 27 January 2006.
The
respondents do not deny this but seek to aver that the addendum to
the agreement granted them an extension to pay the outstanding
amounts by 28 February 2006.
While
that may be true, it is also correct that by the time the extension
provided by the addendum had expired, the respondents had not yet
paid the full Z$11,500,000,000.00 (eleven billion five hundred
million dollars) as required by the agreement of sale as read with
the addendum. Instead, they had only managed to pay
Z$9,200,000,000.00 (nine billion two hundred million dollars) leaving
a balance of Z$2,300,000,000.00 (two billion three hundred million
dollars).
The
last payment towards the purchase price was paid on 14 July 2006.
In
addition, it is common cause that on 15 March 2006 the appellants
wrote to the respondents giving them 30 days' notice in which to
pay the outstanding amounts which they failed to do.
The
respondents argued that they paid the purchase price in full to the
2nd respondent's account. The balance of Z$2,300,000,000.00 (two
billion three hundred million dollars) was to be paid to the
appellants' conveyancers. By the time the appellants issued summons
they (the appellants) had not opened a file with their conveyancers.
It
is this Court's view that the respondents have to explain why they
failed to pay the amount they claimed was due to the conveyancers
upon being advised of the identity of the conveyancers.
It
is common cause that the respondents attempted to pay by cheque and
it was returned by the Bank in April 2006. It was not clear why the
cheque was returned.
Regarding
the issue of whether the appellants were entitled to cancel the
agreement, it is this Court's view that it is a question of
interpretation of the agreement as read with the addendum. This can
only be done after the court would have heard evidence from both
sides. As it is, the Court has heard the appellants' side only.
In
this vein therefore, the appellants established a prima
facie
case of breach of the agreement by the respondents. The full amount,
as stated in the agreement, had not been paid at the time of issuance
of the summons.
Once
evidence has been adduced which constitutes prima
facie
proof of breach, then such evidence may become proof on a
preponderance of probabilities and a plaintiff will succeed in
proving his or her case. The courts must be slow to grant absolution
from the instance and this point was made in Katerere
v Standard Chartered Bank Zimbabwe Ltd HB51/08
which was quoted with approval in Bakari
v Total Zimbabwe (Pvt) Ltd
SC21/19. It was stated that:
“The
court should be extremely chary of granting absolution at the close
of the plaintiff's case. The court must assume that in the absence
of very special considerations, such as the inherent unacceptability
of the evidence adduced, the evidence is true. The court should not
at this stage evaluate and reject the plaintiff's evidence. The
test to be applied is not whether the evidence led by the plaintiff
establishes what will finally have to be established. Absolution from
the instance at the close of the plaintiff's case may be granted if
the plaintiff has failed to establish an essential element of his
claim - Claude
Neon Lights (SA) Ltd v Daniel
1976 (4) SA 403 (A); Marine
& Trade Insurance Co Ltd v Van Der Schyff
1972 (1) SA 26 (A); Sithole
v PG Industries (Pvt) Ltd
HB47-05.”
The
same point had been made earlier on in Manyange
v Mpofu & Ors 2011 (2) ZLR 87 (H) at 88 F-H
where it was stated that;
“The
test to be applied as to whether to grant absolution is not whether
the evidence for the plaintiff establishes what would finally be
required to be established to obtain judgment. It is whether the
plaintiff has made out a prima
facie
case against the defendant on the basis of which the court could or
might find for the plaintiff. A reticent defendant should not be
allowed to shelter behind the procedure of absolution from the
instance. In practice the courts are loath to decide upon questions
of fact without hearing all the evidence from both sides, and have
usually inclined towards allowing the case to proceed. At this stage
of the trial it is not pertinent to evaluate the weight of the
evidence adduced or the preponderance of probabilities, save where
such findings are manifest from the evidence already heard.”
See
also Chombo
v Minister of Safety and Security. (I3883/2013)
[2018] NAHCMD 37.
It
bears mention that the appellants only had to prove a prima
facie
case and their evidence a quo
cannot be characterized as having been manifestly unsatisfactory,
unreliable or that it failed to establish an essential element of the
claim. An arguable case was made out and the respondents ought to
have been put to their defence.
At
the hearing of the matter, counsel for the appellants, Mr
Nyoni,
sought to argue that the court a
quo
did not apply its mind to the matter that was before it for the
reason that the judgment of the court a
quo
is a regurgitation of the respondents (then defendants a
quo)
submissions. He submitted that the court a
quo
simply adopted the evidence and submissions of the respondents
without independently assessing it and without having regard to the
appellants' submissions.
Per
contra,
Ms
Dube for
the respondents argued that this was not an issue that had been
raised in the grounds of appeal and thus could not be properly raised
for the first time at this hearing.
On
the merits she argued that the court a
quo
did not produce a biased decision and for authority she relied on the
case of Stuttafords
Stores (Pty) Ltd and Others v Salt of the Earth Creations (Pty) Ltd
2011 (1) SA 267 (CC).
In
that case, the Constitutional Court of South Africa, in no uncertain
terms, refrained from determining the question whether the extensive
use of counsel's heads of argument could lead to a perception of
bias because it was not a question before it. It merely expressed its
views on such conduct. The views are obiter
and
not binding.
However,
in
casu
it is apparent that the court a
quo
did not regurgitate the submissions made by the respondents in the
court a
quo.
There are differences between the submissions and the final judgment.
As a result, the court takes the view that while it may be
undesirable for a court to plagiarize counsel's heads of argument
in a judgment, this does not necessarily, without more, amount to a
misdirection.
DISPOSITION
The
appellants have managed to establish that the court a
quo
misdirected itself in granting absolution from the instance when the
appellants had established a prima
facie
case. The appeal has merit and must succeed.
Accordingly,
it is ordered as follows:
1.
The appeal be and is hereby allowed with costs.
2.
The judgment of the court a
quo
is set aside and substituted with the following:
“The
application for absolution from the instance be and is hereby
dismissed.”
GARWE
JA: I
agree
BHUNU
JA: I
agree
Moyo
& Nyoni,
appellants` legal practitioners
Lazarus
& Sarif,
respondents` legal practitioners
