The
plaintiff in this matter is an English teacher at a local girls
school. In August 2007, he was in the process of building a residence
for his family in one of Harare's suburbs. He approached the
defendant for steel as per the diagram drawn up by his engineers. He
was given a quotation of the cost of the material that he required.
Some days later, he returned to the defendant and made payment of the
amount reflected on the quotation by way of a bank transfer.
He
furnished the defendant with proof of payment and was promised
delivery of the steel.
He
checked on progress of the delivery and was advised to give the
defendant a few more days. He checked again and was referred to the
defendant's Branch Manager at the Harare outlet. He was informed
that the defendant was having difficulties in obtaining some of the
steel that he had ordered and that the defendant was in fact
considering refunding to him the amount he had paid for the steel
that was unavailable. He insisted on getting all the steel that he
had ordered from the defendant.
He
then sought legal advice on the matter and after he had delivered a
letter of demand from his legal practitioners, to the defendant, he
received delivery of the bulk of the steel he had ordered, save the
two items that form the subject of this suit.
On
16 October 2009, he discovered that the defendant had reversed part
of his electronic money transfer and had returned into his account
the cost price of the steel that had not been delivered. He, in turn,
reversed the re-deposit. On the advice of his engineers, he bought
part of the steel that the defendant had failed to deliver from some
other source to protect his building project from the rains. Still
aggrieved by the defendant's failure to deliver the outstanding
items, he caused summons to be issued out of this court claiming
delivery of the 2.147 tonnes of Y12 steel and the 0.085 tonnes of ANN
wire.
The
suit was defended.
In
its plea, the defendant, whilst admitting that it gave the plaintiff
the quotation that was adduced into evidence by consent, averred that
at the time of giving him the quotation, the plaintiff was advised
that the Y12 and ANN wire were not in stock and were currently not
available in the country and may have to be imported. It was further
averred that the plaintiff agreed to wait on his entire order until
the two items of steel were available. The defendant thus conceded,
in its plea that, the Y12 and ANN wire remained undelivered as it
failed to source the two products locally and also failed to access
foreign currency to import the steel. It denied that, in the
circumstances, it was liable to deliver the outstanding steel to the
plaintiff as claimed.
At
the trial of the matter, the plaintiff gave evidence.
His
narration of the facts, which are largely common cause, is as
captured in the opening paragraph of this judgment. It
was his specific testimony that he was not advised, at the time he
made payment to the defendant for the entire order, that the
defendant was experiencing any difficulties in procuring the Y12 and
ANN wire. He was only told this after he had checked with the
defendant's Branch Manger as to why his order was delaying after he
had made the requisite payment. He did not know where the defendant
was sourcing its steel. When he was advised that the defendant had
secured some of the steel that he had ordered, he informed the
defendant that he would wait until all the steel he had ordered was
available.
The
witness gave his evidence very clearly. He came across as a firm and
unyielding man. Under cross –examination he remained firm that all
he wanted was the steel that he had paid for. He was clear that he
was not seeking damages from the defendant but was simply holding the
defendant to the contract that it has concluded with him.
While
the witness was quite firm about the propriety of his claim in the
circumstances, I did not believe him when he testified that he was
not made aware of the unavailability of the Y12 and ANN wire when he
made payment. Given the unyielding stance that he has revealed in the
witness box, it is most unlikely, in my view, that he would have
accepted the delay in the delivery of the entire order had he been
unaware that part of the order was unavailable at the time. It
appears to me that he was prepared to wait for the defendant to
receive the items from its supplier because he was aware that the
products were not in stock at the time. According to his testimony,
it was only when the defendant sought to refund the cost price of the
outstanding steel that he sought legal advice on the matter and
decided to hold the defendant to the written quotation.
After
testifying as detailed above, the plaintiff closed his case without
calling any other evidence, prompting counsel for the defendant to
apply for absolution from the instance on the basis that before me
was insufficient evidence upon which I could find for the plaintiff.
I
dismissed the application on the turn and indicated that my reasons
would follow. It is convenient that I now set them out. These they
are.
In
making his application, counsel for the defendant was quite alive to
the fact that the plaintiff was approaching the court for an order
for specific performance without an alternative claim for damages.
In
his view, there was an undisputed supervening impossibility that
prevented the defendant from fully discharging its obligations under
the sale agreement. He further submitted that the plaintiff could not
dispute that the defendant failed to secure the outstanding steel
from its local supplier and also that it failed to obtain foreign
currency from the Central Bank for the importation of the steel. In
conclusion, he argued that by virtue of the supervening
impossibility, the plaintiff was not entitled to specific performance
as to order such would work an undue hardship on the defendant and
would produce an injustice.
While
agreeing, in the main, with the submissions made by counsel, it
appears to me that in a claim for specific performance, the court may
not prudently exercise its discretion after hearing only one party to
the dispute. This is so because specific performance is a remedy in
the discretion of the court and is founded in equity. That discretion
has to be judicially exercised upon a consideration of all relevant
facts. The discretion that the court enjoys in this regard is not
confined to specific cases or is it circumscribed by rigid rules. It
appears to me that a plaintiff claiming specific performance bears no
onus to show that the grant of the order will not work an undue
hardship on the defendant. A plaintiff, in our law, has the right to
elect to hold a defaulting defendant to the contract and once having
made that election, bears no further burden to prove that their
election is equitable in the circumstances of the matter. Thus, if I
am correct that the plaintiff bears no burden to prove that specific
performance is equitable in the circumstances of their matter, there
is no basis upon which a court, acting reasonably, can, at the close
of the plaintiff's case, hold that the plaintiff has not adduced
sufficient evidence to show that an order of specific performance
should be granted in his or her favour.
It
further yet appears to me that since specific performance can only be
granted after a finding of breach of a material term of the contract,
where such breach is still in issue, it is not prudent or even proper
for the court to jump to resolve the dispute between the parties on
the basis of the unavailability of specific performance without first
determining the issue of the alleged breach.
At
the close of the plaintiff's case, and in view of the contents of
the plea, I felt that the issue of the alleged breach of contract was
still alive and that there was need for me to hear the defendant's
version of events to enable me to determine whether or not the
defendant had breached the sale agreement as alleged.
It
is on the basis of the above that I dismissed the application for
absolution from the instance when it was made. I was also guided by
the sound advice given by BEADLE CJ in Supreme
Service Station (1969) (Pvt) Ltd
1971
(1) RLR 1 (A), that, when in doubt, a court must always lean towards
the matter proceeding.
The
defendant opened its case by calling one Martin Mahlamvana
(“Mahlamvana”). He is a Sales Clerk with the defendant and has
been in the employment of the defendant for a commendable thirty
years. He was the first contact that the plaintiff made with the
defendant.
His
evidence was also to large extent a narration of the events that are
common cause in this suit as to how the plaintiff was given a
quotation for the steel he required and how payment was made some
days later. Regarding whether or not the Y12 and ANN wire were in
stock at the time the plaintiff sought the quotation and subsequently
made his payment, the witness was adamant that the plaintiff was
advised by Mr Mano, the Harare Branch Manager that these two were not
in stock. He denied that he had personally assured the plaintiff that
such were in stock. He further testified that, in his presence, the
plaintiff was told at the time he made payment that these two types
of steel were not in stock but that an order for them had been placed
by the defendant's head office in Bulawayo. It was his evidence
that the plaintiff was advised that the defendant was waiting for the
local supplier to supply the steel. The plaintiff agreed to wait.
Finally,
the witness testified that, currently, the defendant is not selling
any steel products as these remain unavailable from the local
supplier.
The
witness gave his evidence in a measured manner. So measured was he in
his manner of speech that at times he appeared slow. He would not
exaggerate and would defer questions to his superior where these fell
out of the ambit of his duties. He was not shaken under
cross–examination. I gained a favourable impression of him as a
truthful and reliable witness.
Mr
Boyina Mano, the defendant's Harare Branch
office manager, also gave evidence. He has been in the employment of
the defendant for the past twenty-eight years.
His
testimony was similar to that of Martin Mahlamvana. He testified that
he personally advised the plaintiff that Y12 and ANN wire were not in
stock and the plaintiff assured him and Martin Mahlamvana that he
would wait until the two items were in stock.
The
witness was shown an order that the defendant had placed with ZISCO
Steel for steel lengths, including the Y12 and ANN wire in dispute in
this suit. He identified the order, dated 18 June 2007 which was then
adduced into evidence by consent. He also identified a schedule that
was prepared by the defendant showing that no Y12 and ANN wire were
delivered from ZISCO Steel on the order in June 2007. The witness
further confirmed that application was made to the defendant's Bank
for the allocation of foreign currency to import the steel from South
Africa. Had this happened, the cost price of the steel, as given on
the quote, would have been affected and this is why the defendant had
indicated on the quote that prices were subject to change.
Finally,
the witness testified that the supply of steel had not improved since
2007 due to viability problems at ZISCO Steel, the main supplier.
Currently, the defendant does not have the Y12 and ANN wire in stock
and will only get these once the supplier starts rolling out the
products.
The
witness gave his evidence well. He was refreshingly clear and was
easy to follow in his answers to questions put to him in
cross-examination. I gained the impression that he was telling the
truth when he testified that he informed the plaintiff that Y12 and
ANN wire were not in stock when the plaintiff made his payment. He
was, at that time, confident that since the defendant had placed an
order for the steel, such would be delivered, and, in my view, he
would have spread this confidence to the plaintiff. At that stage,
there was no reason to doubt that delivery would be effected, and, in
my view, it is highly improbable that the witness would have hidden
that fact from the plaintiff.
After
the testimony of this witness, the defendant closed its case.
On
the basis of the above evidence, it appears to me that three issues
arise;
(i)
Firstly, I have to determine what the terms of the agreement between
the parties were.
(ii)
Secondly, and only after I have ascertained the terms of the
agreement, I have to determine whether the defendant breached a
material term of such agreement entitling the plaintiff to seek
specific performance.
(iii)
Finally, if I find that the agreement has been breached materially, I
will have to determine whether specific performance is appropriate in
the circumstances of this matter.
I
return to the first issue.
It
is common cause that the parties intended to conclude a sale
agreement. The plaintiff inquired as to the prices at which the
defendant would sell and deliver to him certain specified steel. The
defendant gave the plaintiff the price list at which it could
conclude the sale. This is not in dispute.
At
the time that the plaintiff made the inquiry, and eventually made
payment, it is my finding that he was aware that the Y12 and ANN wire
were not in stock. In the circumstances, the issue that has exercised
my mind is whether or not the parties concluded an unconditional sale
agreement of all the steel products ordered - including the products
that were not available. The plaintiff contends that they did and
relies on the quotation and the payment of the amount quoted as proof
of the unconditional sale.
While
the point was not forcefully advanced on behalf of the defendant, I
am of the view that the totality of the transactions between the
parties did not amount to more than a conditional sale. It appears to
me that by giving the quotation and accepting payment of the total
amount on the quotation, after advising the plaintiff that it did not
have the Y12 and ANN wire in stock, the defendant was not going
beyond saying:
“I
will sell you the Y12 and ANN wire at these prices when I get
delivery from my supplier. In the meantime, I am accepting your money
so that I will make delivery to you as soon as I receive the steel.”
When
the defendant failed to receive the Y12 and ANN wire from its
suppliers, it, in turn, could not supply same to the plaintiff. Its
failure, however, to deliver these steel products to the plaintiff
would, in the circumstances, not constitute a breach of the agreement
between the parties. The condition precedent to the agreement had not
been fulfilled and so the obligation to deliver did not arise.
I
would have come to a different conclusion had the plaintiff been
unaware that the two products were not in stock at the time he made
payment. Then, I would have found that by accepting payment for the
product, the defendant gave out to the plaintiff that it would
deliver the product to him and is therefore bound to do so on the
basis of the quasi mutual assent doctrine.
This
is the view that the plaintiff urged me to take in the matter.
I
cannot, as I found against him that he was aware that the two
products were not in stock and had to be procured from the supplier
before they could be delivered to him. He was prepared to wait, and
did wait, for the products to become available. He only sought legal
advice not because the products had delayed in coming but because the
defendant wished to refund the purchase price for the products that
had been sold subject to the condition as the condition could now no
longer be met.
In
my view, the plaintiff has taken too simplistic a view of the matter.
He argued that the quotation given him by the defendant was the offer
and his payment of the amount on the quotation was the acceptance of
the offer, birthing a contract between the parties.
While,
to some extent, this is correct, in my view, the entire contract is
underlined by the fact that both parties knew that part of the
products in the “offer and acceptance” were not in stock. They
thus could not have agreed upon the sale of such items without
qualification. The sale of such items could only have been
conditional upon the availability of such since the defendant was
merely a retailer and not the manufacturer of the products.
I
am inferring the condition precedent to the agreement of sale by
applying the well known “officious bystander” test. In my view,
from the knowledge that both parties had as to the unavailability of
the two items, had the officious bystander enquired of the parties
why they were including the two items in the order, he would have
received a prompt response that the sale was subject to the two items
being delivered to the defendant by its supplier. None of the parties
would have responded, at that stage, that the sale was unconditional
and that the defendant had to procure the two items at its own cost,
from wherever, for the benefit of the plaintiff.
In
conclusion, it is therefore my finding that the parties entered into
a conditional sale agreement. The condition precedent was not
fulfilled and the defendant is not in breach. The plaintiff is not
entitled to any remedy in the circumstances.
As
indicated above, counsel for the defendant did not advance the fact
that the sale agreement between the parties was conditional with much
conviction. He, on the other hand, submitted that the remedy sought
by the plaintiff in this suit was untenable and that I should use my
discretion to refuse specific performance. Assuming, therefore, that
I have erred in finding above that the sale between the parties in
respect of the Y12 and ANN wire was conditional, I turn to examine
whether the plaintiff would have been entitled to the order that he
seeks.
It
is the settled position at law that generally while a plaintiff who
elects to hold the defaulting defendant to the contract is entitled
to an order for specific performance, where the defendant is in a
position to perform, the court has a discretion to refuse to grant
the order on several grounds. In particular, the court will decline
to grant the order where, at the time of the order, performance would
be impossible or will work an undue hardship on the defendant. See
Haynes
v Kingswilliamtown Municipality
1951 (2) SA 371 (A)…,.
In
casu,
it is not in dispute that the defendant does not have in its stock
the two steel products. It has not been proved before me that the
steel products are readily available on the market. The plaintiff was
uncharacteristically cagey when it came to testifying about the Y12
that he purchased elsewhere on the instructions of his engineers. He
was not forthcoming with the name of the supplier and the cost of the
item. He was of the view that this evidence was not material for the
resolution of this dispute. He may have erred in this regard, for, in
the circumstances, the evidence of the defendant that the two
products are unavailable from the only and regular supplier remains
uncontroverted.
I
would distinguish the facts of this matter form those that my brother
PATEL had to deal with in Interfresh
Limited v Megapak Zimbabwe (Private) Limited
HH90-09. In that matter, the defendant agreed to deliver a number of
containers and their caps to the plaintiff at a concessionary price
as it had been availed funds for the purpose under the Basic
Commodity Supply Side Intervention Facility (BACOSSI) set up by the
Reserve Bank. The defendant allowed the facility to end without
supplying all the containers that it had undertaken to deliver under
the facility. In holding the defendant to the contract, PATEL J
reasoned that the only inference he could draw from the facts of the
matter was that the defendant failed to deliver because it failed to
exercise due commercial diligence by allowing the facility to run out
before it had made good on all the promises it had made on the basis
of the facility.
In
casu,
I have accepted that the defendant did not have the items in stock
and were awaiting delivery on an order that had been made prior to
its agreement with the plaintiff. In the circumstances, there was
little that it could do to secure the product and was thus not guilty
of commercial incompetence as was found in Interfresh
Limited v Megapak Zimbabwe (Private) Limited
HH90-09.
I
have been referred to Zimbabwe
Express Services (Private) Limited v Nuanetsi Ranch (Private) Limited
SC21-09.
In that case, the Supreme Court declined to order specific
performance of a contract whose contract price had been determined in
2003 and had been eroded into nothing by inflation at the time
specific performance was sought. In declining to order specific
performance, the court was of the view that were it to grant specific
performance, the appellant in that matter would take delivery of 280
heifers for a very small amount of money. In other words, the court
reasoned, the appellant would take possession of a herd of cattle
worth a considerable sum of money for which it would have paid
virtually nothing.
It
was pressed on me that were I to order specific performance in this
matter, the plaintiff would take delivery of steel products worth a
lot of money in foreign currency and for which he paid very little in
local currency.
I
do not agree that this is solely the basis upon which specific
performance may be declined or that this was the simplistic manner in
which the Supreme Court arrived at its decision in Zimbabwe
Express Services (Private) Limited v Nuanetsi Ranch (Private) Limited
SC21-09.
In
my view, the law on specific performance has always been clear that
where to order specific performance will result in an injustice, or
where it is impossible, the court should not make such an order as
this will act as an antithesis of what the law stands for.
In
casu,
it
has been argued, and not challenged before me, that the defendant
does not have the outstanding steel products in its stock. It has
also been argued and not challenged that its supplier has not been
able to supply it with the products. I have been told, in evidence,
that the defendant has not been able to source the product from South
Africa as it did not receive the necessary foreign currency
allocation it required for the purpose. In the circumstances, to
order the defendant to deliver the steel to the plaintiff will
clearly, in my view, work an undue hardship on the defendant. On the
evidence before me, it will be nigh impossible for the defendant to
supply the steel from local suppliers.
On
the basis of the foregoing, even if I have erred in finding that the
defendant is not in breach of the sale agreement between the parties,
I still would have declined to grant an order of specific performance
in favour of the plaintiff as prayed.
In
the result, I make the following order:
1.
The plaintiff's claim is dismissed.
2.
The plaintiff shall bear the defendant's costs of suit.
