Unjust Enrichment re: Approach, Colore Officii or Extortion by Colour of Office, Equality and Equity Considerations

HB201-11 : CABAT TRADE & FINANCE (PTY) LTD and SECURITY MILLS (PTY) LTD vs THE MOVEMENT FOR DEMOCRATIC CHANGE (MDC-T)
Ruled By: KAMOCHA J

In the alternative, the claim was for payment of the sum of ZAR4,627,863=93 being the amount by which defendant had been unjustly enriched at the expense of the second plaintiff as the result of the second plaintiff manufacturing and delivering goods valued at ZAR4,627,863=93 to the defendant at the defendant's special instance and request on ...

ALTERNATIVE CLAIM: UNJUST ENRICHMENT

It was alleged that, alternatively, and in any event, that by reason thereof, the defendant had been unjustly enriched at the second plaintiff's expense in that:

Pursuant to the contract entered into as averred, in performing its obligations thereunder, the second plaintiff allegedly used its resources and incurred the following liabilities in producing the contract goods; inter alia;

(i) Manufacturing costs;

(ii) Wages;

(iii) The cost of engaging a sub-contractor in Harare, namely, Kataura Enterprises (Pvt) Ltd to assist in fulfilling the contract order;

(iv) Deferring its normal customers and rescheduling other deliveries, to give priority to the defendant; and

(v) The costs of purchasing raw materials as well as machinery which had to be secured through deposits and the expectation of payment by the defendant.

By taking delivery, without payment, of approximately 92% of the contract goods, and using them for its intended election campaign purposes, and by assuming the contractual obligation, the defendant had been enriched at the plaintiff's expense. The plaintiffs had been allegedly impoverished by the enrichment of the defendant, the casual connection being the contractual obligation referred to above, in particular, the costs and liability incurred by the plaintiffs in expectation of payment by the defendant. The said enrichment was unjustified.

The second plaintiff rendered to the defendant its invoice, dated 18^th March 2008, for ZAR4,627,863=93, including VAT, being the amount due for the goods manufactured and delivered and manufactured, but in respect of which delivery had been withheld but tendered, for the reasons given. The said invoice constituted the plaintiffs' demand and expressly stipulated that interest accrues at 8% per annum within 30 days of the date of the invoice. Accordingly, the defendant was allegedly liable for interest on the total sum due, ex mora re from 17 April 2008 to the date of final payment.

Having regard to the terms of the founding contract, the defendant had, accordingly, been allegedly unjustly enriched at the plaintiffs expense in the sum of ZAR4,627,863=93 together with interest at 8% per annum from 17 April 2008 to the date of final payment, and costs of suit.

Wherefore, in the alternative, the second plaintiff prayed for judgment and costs against the defendant on the basis of unjust enrichment in the sum of ZAR4,627,863=93 together with interest at 8% per annum from 17 April 2008 to the date of final payment….,.

In relation to the alternative claim, the defendant maintained that it had not taken delivery of any goods pursuant to any contract of sale and averred that it had not been unjustly enriched in the alleged amount or at all. It reiterated that the interest claimed was illegal and prayed for the dismissal of the alternative claim with costs….,.

DEFENDANT'S AMENDED EXCEPTION

Further, the defendant excepted to the second plaintiff's declaration pertaining to the alternative claim on the ground that it disclosed no cause of action, or, alternatively, on the ground that it was vague and embarrassing and bad in law in particular.

It was alleged, in the amended exception, that the plaintiff had not stated in its declaration on which specific ground of enrichment it sought to sue. It claimed that the cause of action had not been properly identified. In the result, the claim was vague and embarrassing.

In the alternative to the above, it was alleged that to the extent that the plaintiff's claims, in its response to the initial exception, that it sought to found its claim on a general action for unjust enrichment, the plaintiff had failed to make the allegations necessary to found its claim on such an action. To found its claim on a general action for unjust enrichment, the second plaintiff must have alleged that:

(a) The defendant was enriched;

(b) The plaintiff was impoverished by the enrichment of the defendant;

(d) The enrichment does not come within the scope of one of the classical enrichment actions.

In casu, the second plaintiff had averred that it had delivered goods worth ZAR3,762,215=37 to the defendant yet it sought to recover the sum of ZAR4,965,723= together with interest thereon at 8% per annum.

Paragraph B7 of the plaintiff's declaration averred that the plaintiffs were claiming the full contract price ex vendito. By claiming the same amount in unjustified enrichment as it claims ex vendito, the second plaintiff was attempting to claim a profit. That was unacceptable and rendered the plaintiff's claim bad in law as well as vague and embarrassing.

It alleged that the plaintiff had not given any admissible quantifiable figure of money that it sought to claim in unjustifiable enrichment. The amount sought was based on evidence from a contract in violation of sections 4, 10 and 11 of the Exchange Control Regulations, S.I.109 of 1996 and thus the court had no evidence on which it could be requested to find for the plaintiffs. The claim was therefore allegedly vague and embarrassing and bad in law.

It was alleged that the plaintiff sought to enforce a contract under the law of unjustified enrichment when it performed under a contract. Its declaration in paragraph C1 incorporated averments made in contract and at paragraph C7 it couched its enrichment action “having regard to the founding contract aforesaid.” The plaintiff insisted on the founding contract's validity it be enforced by way of unjustified enrichment. That was approbation and reprobation, vague and embarrassing and incurably bad in law.

It was submitted that the plaintiff's declaration, in its alternative claim, was bad in law and lacking in averments necessary to sustain the identified cause of action as stated above in that the plaintiff did not unequivocally allege that there had been unjustified enrichment. In fact, the plaintiff insisted that there was a contract in force meaning that the enrichment would therefore be justified. The approbation and reprobation rendered the claim vague and embarrassing and bad in law.

In paragraph B1 and B2 of its declaration, the plaintiff specifically stated that goods allegedly delivered were for use in the Presidential Election campaign for the election due on 29 June 2008. As such, delivery of any goods after 29 June 2008 would mean that such goods would not have enriched the defendant's estate as they could no longer be used and therefore could not be claimed in an action based on unjustified enrichment. The plaintiff's averments to that extent, therefore, failed to sustain the cause of action in that they do not support any averment that the defendant was enriched.

The plaintiff had not alleged that the enrichment did not come within the scope of one the classical enrichment actions. That allegation was necessary before any purported reliance on the general unjustified enrichment action, consequently, the averments in the plaintiff's declaration failed to sustain the cause of action by failing to make that allegation. Failure in that regard rendered the claim vague and embarrassing.

Finally, the defendant stated that in paragraph 4 of the amended declaration it was alleged that the defendant had used the goods “for its intended election campaign purposes.” That was an admission that the goods had been consumed. Accordingly, it was submitted that that was bad in law and embarrassing to allege in the same breath that the defendant had been enriched.

In the premises, the defendant prayed that the alternative claim be dismissed with costs on the Law Society Tariff….,.

PLAINTIFFS' RESPONSE TO DEFENDANT'S EXCEPTION

The plaintiffs', in their response to the defendant's exception, alleged that the exception was an abuse of court process, by reason of the fact that Zimbabwe law recognized a general action for unjust enrichment, and by reason of the fact that the alternative claim was based on the general action for unjust enrichment. Hence, the second plaintiff denied that the alternative claim was vague and embarrassing or bad in law.

In response to paragraph B2(a) (b) and (c ), the plaintiff repeated that the averments in those paragraphs were bad in law and constituted an abuse of court process in that the defendant had failed to identify a straight forward cause of action in that the plaintiffs' allegations were necessary to found a conductio indebiti, which is an entirely separate cause of action, and ignored their alternative cause of action, as pleaded, namely, the general action for unjust enrichment, accepted as being part of Zimbabwe law since 1996.

The plaintiff averred that goods to the value of ZAR3,672,215=37 were manufactured and delivered to the defendant; which goods comprised approximately 74% of the defendant's contractually stipulated order. The difference between the figure of ZAR3,672,215=,37 and the total amount claimed related to the balance owing as had been averred in paragraph B3 of the main claim, and was due.

In answer to paragraph B3.2, the plaintiffs averred that the paragraph repeated and compounded the alleged misunderstanding of the law and their claim for the general action for unjust enrichment, rather than a conditio indebiti. It was contended that, rather, it was the defendant's exception that was bad in law. The reference to specific performance was vexatious in that it ignored the cause of action, as expressly stated as being the actio venditi. Further, the reference to the purported “guise” was equally vexatious in that it misidentified the cause of action, being the general action for unjust enrichment.

Their explanation for not averring that delivery was in error was that their alternative claim did not sound in the conductio indebiti, as no question of error arose, neither did it sound in conditio sine causa, hence there was no necessity to allege that the delivery was not due. The averments for the main claim for the full contract price ex vendito had been incorporated by reference in the alternative claim for the general action for unjust enrichment.

In answer to the suggestion that the defendant had used the goods for its intended election campaign purposes, the plaintiffs were admitting the goods had been consumed accordingly. It was bad in law and embarrassing to allege, in the same breath, that the defendant had been enriched. The plaintiffs averred that accepting delivery and consuming the goods constituted an admission of unjust enrichment, as there was no denial of the averment that the goods were used. In addition, it constituted unjust enrichment for the purposes of the general action or unjust enrichment, as those facts pertained to the element of the said cause, that the defendant had been enriched by such impoverishment, and that the enrichment was unjustified.

The plaintiffs concluded by praying that the defendant's exception be dismissed with costs on the Law Society Tariff.

PLAINTIFFS' EXCEPTION TO DEFENDANT'S EXCEPTION

The plaintiffs excepted to the defendant's exception (to the plaintiffs' alternative claim of unjust enrichment) as being bad in law, vague and embarrassing, disclosing no defence to the plaintiffs' alternative claim thus:-

It was alleged that paragraph 2 thereof incorrectly stated the requirements for a conductio indebiti as being the requirements for the general action for unjust enrichment. As a proposition of law, that was incurably bad, at variance with established superior court authority.

The requirements stated in paragraph 2(a), (b) and (c) seriatim were the requirements for the condictio indebiti, which pertained to when enrichment arose from a payment in error. The general action for unjust enrichment was not available if one of the classical enrichment actions, such as the conductio indebiti, was available. Since the plaintiffs did not aver performance to be in error, they did not rely on the condictio indebiti.

It was alleged that paragraph 3.1 was argumentative in that it obfuscated the value of the goods delivered and ignored the pleaded facts pertaining to the balance of the claim.

Paragraph 3.2 allegedly ignored the cause of action, as was expressly stated as being the actio venditi and not specific performance. In addition, the reference to the purported guise, “misidentified” the cause of action being the general action for unjust enrichment, established in Zimbabwe law since 1996.

It was averred that it was bad in law to allege that a party was claiming under a cause of action not even pleaded, as the defendant had alleged by the assertion that the “the plaintiffs' claim that it had performed under a contract and now seeks to recover the full contract price under the condictio indebiti.” The plaintiffs had not claimed under the conditio indebiti at all.

It was further alleged that paragraph 4 compounded the defendant's misunderstanding of the alternative claim in that the paragraph alleged that there was no averment that delivery had not been done in error nor that it had been due, the reason for that being that the plaintiffs were not claiming delivery in error, nor were they claiming a condictio sine causa or causa data non secuta, which would be appropriate for performance which was not due.

In alleging, in paragraph 4, that:“Confusingly paragraph C7 of those that the defendant had been unjustly enriched in the same amount as the contract price ex vendito” the defendant had confused the import of the plaintiffs alternative claim.

In as far as paragraph 5 was concerned, it was alleged that its meaning was obscure. To the extent that the meaning could be understood, it was bad in law, contradictory, vague and embarrassing, and disclosed no defence to the claim, by reason of the fact that per contra, the averment of accepting goods without paying for them, and consuming them, constituted an admission of unjust enrichment, as there was no denial of the averment that the goods were used. In addition, it was alleged that it constituted unjust enrichment for the purposes of the general action for unjust enrichment, as those facts pertained to the elements of the said cause, namely, that the plaintiff had been impoverished, that the defendant had been enriched by such impoverishment, and that the enrichment was unjustified.

In the result, the plaintiffs prayed that the exception to the defendant's exception be upheld and the defendant's exception be held to be bad in law, vague and embarrassing, disclosing no defence to the plaintiffs' alternative claim.

The plaintiffs prayed for costs on the Law Society Tariff….,.

The plaintiffs had claimed the amount of ZAR4,965,723=, together with interest at the rate of 8% per annum from 17 April 2008 to the date of final payment, in the alternative, on the basis of the doctrine of unjust enrichment.

In my view, that also cannot avail the plaintiff as unjust enrichment cannot be used to enforce an illegal agreement or achieve anything of that nature.

HH311-14 : MAXWELL MATSVIMBO SIBANDA vs GYWNNE ANN STEVENSON and THE REGISTRAR OF DEEDS
Ruled By: DUBE J

No basis for unjust enrichment has been laid.

SC19-14 : DAVID TENDAYI MATIPANO vs GOLD DRIVEN INVESTMENTS (PRIVATE) LIMITED
Ruled By: MALABA DCJ, ZIYAMBI JA and GOWORA JA

DID THE RESPONDENT ESTABLISH A CAUSE OF ACTION FOR UNJUSTIFIED ENRICHMENT, AND WAS THE MERE PAYMENT OF A SUM SAID NOT TO BE WHOLLY DUE GIVE RISE TO AN ENFORECEABLE CLAIM It is contended, on behalf of the Deputy Sheriff, that, even if the High Court had been correct in its finding that the matter ...

DID THE RESPONDENT ESTABLISH A CAUSE OF ACTION FOR UNJUSTIFIED ENRICHMENT, AND WAS THE MERE PAYMENT OF A SUM SAID NOT TO BE WHOLLY DUE GIVE RISE TO AN ENFORECEABLE CLAIM

It is contended, on behalf of the Deputy Sheriff, that, even if the High Court had been correct in its finding that the matter was properly before it, it erred in finding that the papers disclosed a cause of action.

The appellant submitted that the only basis upon which a refund could found a cause of action was unjust enrichment and only the judgment creditor had the locus standi to claim on that basis. It was argued, further, that the onus was on the respondent to prove unjust enrichment and there is no such averment anywhere in the papers before the High Court. Even if it was accepted that the sum was not wholly due, so it is argued, the appellant could not have been unjustly enriched if the money was paid voluntarily.

The respondent has refuted suggestions by the Deputy Sheriff that the papers do not establish a cause of action and points to the averments in the founding and replying affidavits where the dispute over the commission due to the Deputy Sheriff is chronicled and the position taken by the respondent as to the illegal nature of the demand is set out. The respondent maintains that the Deputy Sheriff had used the wrong law in calculating his commission and that the monies paid to him were not legally justifiable and therefore that the respondent was entitled to a refund.

The High Court found that the respondent had established a cause of action on the papers. In Abrahamse & Sons v S.A. Railways and Harbours 1933 CPD 626 stated at 637:

“The proper legal meaning of the expression 'cause of action' is the entire set of facts which gives rise to an enforceable claim and includes every fact which is material to be proved to entitle a plaintiff to succeed in his claim. It includes all that a plaintiff must set out in his declaration in order to disclose a cause of action. Such cause of action does not 'arise' or 'accrue' until the occurrence of the last of such facts and consequently is sometimes loosely spoken of as the cause of action.”

From the facts set out in the founding and replying affidavits, the respondent was able to state that that the fee charged was not wholly due. The Deputy Sheriff, in my view, understood the claim as it was presented; that he had been unjustly enriched at the expense of the respondent. As was stated by the learned judge in the court a quo:

“…, the applicant averred that the respondent used the wrong piece of legislation to claim commission purportedly due to it. The cause of action was the unjust enrichment of the respondent by the payment of a claim that it was not legally entitled to receive.”

The issue before the court a quo was whether the payment of a sum which is not wholly due gives rise to an enforceable claim.

In Dew v Parsons (1819) 2 B & Ald 562, 106 ER 471, an attorney was held entitled to set off against a claim by a Sheriff the excess amount which he had paid to the Sheriff for the issue of warrants over what the Sheriff was legally entitled to charge. At issue was whether the Sheriff was entitled to retain sums which he had no legal right to demand, but the sums were demanded in return for the rendering of a service, namely, the issuing of warrants. The decision was rationalised on the basis that the payments were exacted colore officii, a concept which emerged more clearly in later cases. This concept was thus described by WINDEYER J in Mason v New South Wales (1959) 102 CLR 108…,:

“Extortion by colour of office occurs when a public officer demands, and is paid money that he is not entitled to, or more than he is entitled to, for the performance of his public duty. Examples of such exactions are over tolls paid to the keepers of toll-bridges and turnpikes, excessive fees demanded by sheriffs, pound keepers, & etc. The parties were not on an equal footing; and generally the payer paid the sum demanded in ignorance that it was not due.”

WAS THE PAYMENT BY THE RESPONDENT MADE VOLUNTARILY AND AS SUCH WAS THE COURT CORRECT IN FINDING THAT A REFUND WAS DUE FROM SUCH PAYMENT

The learned judge in the court a quo was clearly alive to the fact that the refund to the respondent could only follow a declaration as to the correct law under which the Deputy Sheriff was entitled to levy his fee, and, as a consequence, the lawfulness or otherwise of the demand for payment of commission.

If one party has the power to say to another, what you require will not be done except upon the conditions that I choose to impose, that party should not be allowed to contend that the parties acted on an equal footing. Such a situation does not fall within the category of payments made voluntarily.

“If a person pays money, which he is not bound to pay, under the compulsion of urgent and pressing necessity or of seizure, actual or threatened, of his goods he can recover it as money had and received. The money is paid not under duress but in the strict sense of the term, as that implies duress of person, but under the pressure of seizure or detention of goods which is analogous to that of duress.”

Per LORD READING CJ in Maskell v Horner [1915] 3 KB 106, [1914-15] All ER Rep 595.

This type of payment was distinguished from one made under threat of a suit, as the payer under those circumstances has the opportunity to defend the suit. In South of Scotland Electricity Board v British Oxygen Co Ltd (No. 2) [1959] All ER 225, LORD MERRIMAN…, said;

“It is sufficient to say that, in Maskell v Horner ([1915] 3 KB 106 at 119, [1914-15] All ER Rep 595 at 598), LORD READING CJ, referring to these authorities, and in particular to the advice given by WILLES J, in Great Western Ry. Co v Sutton (1869) LR 4 HL 226 at 249) where that learned judge said that he had always understood that when a man pays more than he is bound to do by law for the performance of a duty which the law says is owed to him for nothing, or for less than he has paid, there is a compulsion or concussion in respect of which he is entitled to recover the excess by condictio indebiti, or action for money had and received said, that such claims made in this form of action are treated as matters of ordinary practice and beyond discussion.”

The court a quo made a finding that the cause of action of the respondent's claim was the unjustified enrichment of the Deputy Sheriff by the payment of a claim to which he was not entitled. To this end, it was contended that the Deputy Sheriff could not have been unjustly enriched if the payment was voluntary. In deciding this issue, the court had occasion to consider the principles set out in the following authorities, National Railways of Zimbabwe v Coghlan, Welsh & Guest 1984 (2) ZLR 229 (H); Pymor Investment (Pvt) Ltd v Frank Pantony (Pvt) Ltd 1996 (2) ZLR 357 (H); and Ellis NO v Commissioner of Taxes 1994 (1) ZLR 423 (S). Commenting on the cited authorities the learned judge in the court a quo had this to say:

“The above decisions contradict the view adopted by the Supreme Court in Ellis NO v Commissioner of Taxes 1994 (1) ZLR 423 (SC) at 439B-H where GUBBAY CJ stated:

'I strongly support the opinion of LORD GOFF supra at 760h that:

'In the end, logic appears to demand that the right of recovery should require neither mistake nor compulsion, and that the simple fact that the tax was exacted unlawfully should prima facie be enough to require its repayment.'

Put differently, recovery is grounded on the unlawfulness and nullity of the demand and not on any mistaken belief of the payer.”

The Deputy Sheriff suggested before us that the respondent had not paid under protest, and, further, that the court a quo did not make a finding that it had done so. It was further argued that the respondent had not proffered evidence to the effect that payment was made and accepted on condition that if found not to be due, it would be recovered.

The learned judge in the court a quo was alive to the fact that the respondent had not pleaded duress or mistake as regards payment of the commission. Nevertheless, he found that due to the illegality of the demand by the Deputy Sheriff the payment could not stand.

The principle that the authorities establish is that payments not lawfully due cannot be recovered. It is accepted now that money which a party has been wrongfully made to pay, whether under compulsion, or in circumstances in which he is unable to resist the imposition, may be recovered. Money paid as a result of actual or threatened duress to the person, or actual or threatened seizure of a person's goods, is recoverable. See Maskell v Horner [1915] 3 KB 106, [1914-15] All RE Rep 595. The concept of duress has been widened to include economic duress. Money paid to a person in a public or quasi-public position to obtain the performance by him of a duty he is bound to perform for nothing or for less than the sum demanded is recoverable to the extent that he is not entitled to it. Such payments are often referred to as having been demanded colore officii.

IS A FEE RAISED IN EXCESS OF WHAT IS SPECIFIED IN THE TARIFF PER SE UNLAWFUL AND DOES SUCH UNLAWFULNESS GIVE RISE TO A CLAIM FOR A REFUND OF SUCH PAYMENT

The last issue for consideration is whether the court erred in ordering a refund in favour of the respondent.

The Deputy Sheriff argued that the fact that the sum claimed was not wholly due would not have necessarily rendered the claim unlawful. The respondent disputes this contention and submits that the demand for commission under repealed legislation was unlawful and that as a consequence both the demand and the payment created neither rights nor obligations on either of the parties.

The Deputy Sheriff sought to argue that the High Court erred in relying upon the judgment in Ellis NO v Commissioner of Taxes 1994 (1) ZLR 423 (SC) as it was not authority for the proposition that the appellant's claim was a nullity. It was submitted that the learned CHIEF JUSTICE in the case of Ellis NO v Commissioner of Taxes 1994 (1) ZLR 423 (SC) referred to a “limited restitutionary right.”

The Deputy Sheriff cannot be correct in his reading of the judgment. It is clear that the rationale of the remedy, as found by the learned CHIEF JUSTICE, is the illegality of the demand. He stated as follows:

“Although LORD BROWNE-WILKINSON agreed with LORD GOFF's reasons, the emphasis of his speech was not so obviously dependant on the special position of Governmental or public bodies. He underscored, rather, the fact that money paid under an ultra vires demand is paid without consideration and that the relative positions of the State and the citizen are unequal, even in the case of a major financial institution like Woolwich. He explained at 781e:

'…, money paid on the footing that there is a legal demand is paid for a reason that does not exist if that demand is a nullity. There is, in my view, a close analogy to the right to recover money paid under a contract the consideration of which has wholly failed.'

And continued at 782c-d:

'The money was demanded and paid for tax, yet no tax was due; there was a payment for no consideration. The money was demanded by the State from the citizen and the inequalities of the parties' respective positions is manifest…, there are, therefore, in my judgment sound reasons by way of analogy for establishing the law in the sense in which LORD GOFF proposes.'

With much deference, the want of consideration factor seems to me to mask the somewhat true rationale of the relief - which was the nullity of the demand that flowed from its ultra vires or unlawful nature.”

Even though the Deputy Sheriff seeks to place a narrow interpretation on dictum in the Ellis NO v Commissioner of Taxes 1994 (1) ZLR 423 (SC) judgment and restrict it to those situations where a taxpayer would have paid a tax under an invalid law, I do not understand the judgment of the learned CHIEF JUSTICE to advocate such a narrow application of the principle. It cannot be a correct interpretation of the principle to confine a right of recovery only to those cases where a taxpayer is compelled to pay tax under an unconstitutional law. I am further fortified in this view by the remarks of LORD GOFF in Woolwich Building Society (1992) 3 All ER 737…, as follows:

“..,. I agree that there appears to be a widely held view that some limit has to be placed on the recovery of taxes paid pursuant to an ultra vires demand. I would go further and accept that the armoury of common law defences, such as those which prevent recovery of money paid under a binding compromise or to avoid a threat of litigation, may be either inapposite or inadequate for the purpose; because it is possible to envisage, especially in modern taxation law which tends to be excessively complex, circumstances in which some very substantial sum of money may be held to have been exacted ultra vires from a very large number of taxpayers.

…,. At this stage of the argument, I find it helpful to turn to recent developments in Canada. First, in a notable dissenting judgment (with which LASKIN CJC concurred) in Nepean Hydro Electric Commission v Ontario Hydro (1982) 132 DLR (3d) 193, DICKSON J subjected the rule against recovery of money paid under a mistake to the law to a devastating analysis and concluded that the rule should be rejected. His preferred solution was that, as in cases of mistake of fact, money paid under a mistake of law should be recoverable if it would be unjust for the recipient to retain it.”

It cannot be disputed that these are the principles that the learned CHIEF JUSTICE GUBBAY considered and applied in Ellis NO v Commissioner of Taxes 1994 (1) ZLR 423 (SC) wherein he stated:

“To my mind, the view that there is a general right to restitution of monies paid following upon an ultra vires and illegal demand, and so a right to the recovery of interest thereon, is both attractive and compelling. For such a principal, payment would have been made either in consequence of a perceived presumption on the part of the payer of the constitutional validity of the demand and the holding out of such legality by the Legislature, or on account of the prospect of the payer being subjected to penal interest were his opinion of the illegality of the demand ultimately ruled to be incorrect. It matters not which it be, since payments made under unconstitutional legislation cannot be deemed voluntary. In short, an ultra vires demand alone by a Government body provides ground for restitution. It operates outside the field of mistake and focuses on the position of Government as payee rather than on the circumstances of the payer.”

I therefore would find that on the dictum in Ellis NO v Commissioner of Taxes 1994 (1) ZLR 423 (SC) these courts have departed from the age old principle that monies paid under a mistake of law cannot be recovered. Once it is established that the monies were paid under an ultra vires law, then the payer has a right to recover. Such payments would constitute illegal payments and on that basis they can be recovered and the court a quo was correct in making an order for the refund of the excess on the fees paid to the appellant by the respondent.

HH35-16 : SHINGISAI MARYLN NYAMUKUSA vs GILBERT KARENGA MASWERA
Ruled By: UCHENA J

Unjust enrichment is easier to prove, as all the plaintiff has to prove is that she contributed something, which, if not shared equitably, will leave the defendant enriched at her expense. In the case of Industrial Equity v Walker 1996 (1) ZLR 269 (H)…, BARTLETT J…, said; “I have already found that a general ...

SC70-07 : MICHAEL TAYLOR vs HEATHER MARGARET TAYLOR
Ruled By: CHEDA JA, ZIYAMBI JA and GARWE JA

Unjust enrichment now forms a cause of action in terms of our common law. See Industrial Equity v Walker 1996 (1) ZLR 269 (H).

HH260-15 : DR PARTSON ZVANDASARA vs BELVEDERE NURSING HOME (PVT) LTD
Ruled By: MATHONSI J

The plaintiff is a medical doctor, a gynaecologist, and a professor at the University of Zimbabwe. He boasts that he is a founder member and majority shareholder of the defendant, a maternity institution he is suing for $50,000, being money he says he paid to a creditor of the defendant on its behalf.

In his declaration, the plaintiff averred that sometime in September 2005, while he was the Managing Director of the defendant, he entered into an agreement with Vengesayi Architects (the architects), on behalf of the defendant, in terms of which the architects were to provide the defendant with services for a fee. The architects were contracted to make town planning applications for special consent on the Stand, co-ordinate all project consultations, design, work on drawings and supervise construction work of the proposed additions and alterations to the hospital.

Although the architects drew up the plans, the defendant did not proceed with the construction, but, the agreement he had concluded with the architects resulted in the defendant being indebted to the architects in the sum of US$1,300,000.

As Managing Director, founder, and majority shareholder of the defendant he paid a sum of $50,000 towards settlement of the debt in order to protect the integrity and good name of the defendant.

The $50,000 was paid by him in instalments between 30 May 2011 and 18 July 2011. The plaintiff averred, in paragraph 8 of the declaration, that:

“The money paid to the architects by the plaintiff thus made the latter the defendant's creditor. There is no dispute as to whether the plaintiff made the payment aforesaid.”

The plaintiff then prayed for judgement in the sum of $50,000 together with interest at the prescribed rate and costs of suit on a legal practitioner and client scale.

Having entered appearance to defend, the defendant filed a plea denying liability and stating that the plaintiff was not authorised by its Board of Directors and shareholders to enter into an agreement with the architects and that he had entered into that agreement unlawfully.

It further averred that when the plaintiff paid the sum of $50,000 to the architects, he did so without the authority of the defendant. As he had entered into the agreement without authority, the plaintiff was personally liable to the architects. The plaintiff's claim should therefore be dismissed with punitive costs.

At the pre-trial conference the parties agreed on the issues as:

1. Whether the plaintiff entered into an architectural agreement with the architects without the authority of the defendant's Board of Directors and shareholders.

2. Whether the defendant is liable to the plaintiff in the sum of $50,000 paid to the architects.

Only the plaintiff gave evidence at the trial of this matter, stating that he had been the Managing Director of the defendant since 1998 and he still holds that position.

On 29 January 2010, the defendant's Board had proposed, and agreed, that they should negotiate terms of payment of the architects' fees for work done. The architects had performed work for the defendant and submitted a claim for the payment of their fees.

Prior to that, the architects had drawn plans for the development of the hospital which was called the second phase.

A contract had been signed in 2005 between the hospital and the architects with the former being represented by himself. He made reference to pages 66 to 69 of exhibit 1, being the agreement in question, stating that it was signed by himself in his capacity then as Executive Chairman and countersigned by the defendant's Administrator.

The plaintiff maintained that he had the authority of the Board which he worked with then, to enter into the agreement, and, as such, the agreement was binding on the defendant which however did not pay the fees of the architects even though a demand for payment was initially made in 2006, re-submitted in 2009, and, finally, in 2010.

Prior to making payment on behalf of the defendant, he had been specifically mandated, by the Board, to negotiate with potential investors for the funding of the project. He had brought in Banc ABC which was willing to invest $7.5 million and Mbizvo Group which was willing to invest $15 million into the project. Content with the funding arrangement, the plaintiff said he had incorporated the architects' fees in the funding. He then paid $50,000 to the architects satisfied that he could recoup his money in due course.

The payment was made in order to create a good atmosphere for negotiation with the architects.

The plaintiff referred to letters written by the architects between 30 May 2011 and 18 July 2011…, in which the architects were acknowledging payment of the various sums allegedly made by the defendant to them.

The letters themselves are drafted the same way except for the figure acknowledged. The plaintiff did not explain why no receipt, in the usual manner, was issued. It was suggested to him, under cross-examination, that the letters were manufactured to justify his claim and he did not give a meaningful response.

The plaintiff stated that he had paid the money to the Administrator of the defendant, Mr Makamure, who, alone with the accountant, Mr Tembo, effected payment to the architects.

He pointed out that there was no formal Board meeting to authorize the payment and there was evidence that some Board members did not want payments to be made to the architects while others favoured payment.

There was no formal instruction given to him to effect that payment.

He however sought legal advice from Mr Mabulala, who was also a Board member. Before Mr Mabulala's advice came, in the form of a letter dated 13 June 2011..., the plaintiff went ahead and started paying instalments to the architects, the first one of $3,500 being made on 30 May 2011. When the letter from Mabulala & Motsi legal practitioners finally came it not only endorsed that payment was a fait accompli, it also counselled caution. It reads:

“RE: ARCHTECTS

I refer to your note to me dated 9th June 2011 and the letter from Kantor and Immerman dated 8th June 2011. It seems to me that you have already committed yourself, personally, to paying the architects' fees, and, any opinion from me would be of academic interest. The question which remains is whether or not you can, and did, lawfully commit the hospital as well. I hope the Board and the shareholders are fully informed of these latest developments.”

From the correspondence that had been refereed to Mr Mabulala, it is apparent that the plaintiff had already offered to pay $50,000 to the architects in “tranches” and had already agreed with them that he would sign a Deed of “surety, acknowledgement and undertaking” in respect of the full extent of their claim of $1,303,783 in respect of their fee note dated 3 August 2010…,.

The plaintiff says he then convened a meeting of the Board, in September 2011, intending to regularise what he had done without Board approval.

Unfortunately, on 21 September 2011, he says he was locked out of his office at the hospital and was prevented from going in by armed guards. He has never had access to the office since then and his efforts to reclaim his position and the office, subsequent to that, have hit a brick wall.

He approached this court, in HC9630/11, for spoliatory relief but was turned down. The judgement in that matter, delivered by MUTEMA J is HH221-11, and, at p3 of it, the court made the following findings:

“Applicant alleges (he) was despoiled of the office as well as his personal belongings lodged therein which he uses for his private life and business. Respondents have offered that applicant is at liberty, at his earliest convenience, to come and collect his personal items. I have no reason to doubt the sincerity of that offer.

However, as regards the office, that is a different kettle of fish.

While applicant alleges spoliation, respondents' papers clearly show that it is him who is the spoliator. He had been away for some 8 months and Saungweme was in lawful and undisturbed possession of that office. He was denied occupation of the office but he locked it to the exclusion of everyone except himself. This, despite the exitant dispute between the parties, amounts on the applicant's part, to self-held.

I did not hear applicant to dispute respondents' version either on paper or in oral submissions, of how he ended up re-occupying the office. He therefore cannot come to court with clean hands. He is the spoliator. To allow him audience would be tantamount to sanctioning unlawfulness.”

He says that if the meeting took place he does not know what transpired as he was unable to attend.

What is even more important is the fact that he was unable to “regularize” his payments made to the architects without approval - meaning that the plaintiff's payments remained unsanctioned.

The plaintiff testified that he paid the architects, on behalf of the defendant, because it was necessary to maintain the integrity and good name of the institution.

He did not have vouchers to show that payment was indeed made through the defendant.

Although he did not have direct and formal authority to effect the payment, he had indirect authority emanating from the fact that the Board had tasked him to raise funds for the project.

It did not specify the source of those funds which then left him at liberty, as the Managing Director at the time, to pay from his pocket. In any event, loans from shareholders (he is a major shareholder) have been given to the institution in the past.

Under cross examination, it became apparent that the plaintiff was not the Managing Director at the time that he made instalment payments of the $50,000 to the architects - Dr Saungweme was. According to the minutes of a Board meeting held on 10 May 2011…, the plaintiff was trying to force his way back in that position. The minutes state, at paragraph 4.2:

“Dr P. Zvandasara

Dr Zvandasara came into the boardroom and advised the Board that he had notified the Board chair person that he was now back at the hospital as the Managing Director. He went on to say that he had taken legal action against some Board members who had accused him of stealing hospital funds.”

That state of affairs was also captured in the minutes of a Shareholders meeting held on 25 May 2011 during which the plaintiff notified the gathering that he was coming back as Managing Director (MD) because some people had accused him of being a thief. At paragraphs 5 and 6, the minutes state:

“He (the plaintiff) went on to declare that whether the members approved or not, he was now the one running the activities of the institution as the MD. He said that he could no longer work with the shareholders and proposed that we proceed with a separation either through him buying the other shareholders out or vice versa.

The shareholders noted, with concern, the developments that had taken place.

They advised Dr Zvandasara that the current recognised MD for the institution is Dr Saungweme; the position remained that Dr Saungweme had been appointed by the Board as the MD with effect from August 2010. This motion was put to the vote and was unanimously endorsed.”

It also became apparent that the defendant had contested the validity of the agreement for architectural services throughout, and, when they raised a fee note for those services, in the sum of $1,071,999=05, on 3 August 2010, about the same time that the plaintiff ceased to become Managing Director (MD), the defendant disputed liability.

It is a matter of record that in HC2893/12 the architects sued the defendant for the amount set out in the fee note, without deducting the $50,000 allegedly paid by the plaintiff, suggesting they did not recognise any payment. That claim was dismissed by this court, per DUBE J, by judgement delivered on 18 February 2015 (HH161-15).

In that matter, the plaintiff was called as a witness by the architects and stated that:

“He paid $50,000 from his own pocket after the defendant had refused to settle the fee note.”

My attention was also drawn to a summons and declaration in HC9444/11…, in which the plaintiff had sued the defendant for payment of the same amount of $50,000 through Mambosasa legal practitioners of Harare. In paragraph 7 of the declaration he had averred;

“The defendant failed, refused and/or neglected to pay the amount due to the architects in its entirety alleging, inter alia, that the plaintiff had no authority to contract with the architects resulting in the plaintiff feeling compelled to repay part of the debt from his personal sources.”

The totality of the evidence shows, clearly, that, at the time that the plaintiff took it upon himself to pay $50,000 of the claim made by the architects he had no authority of the defendant to make that payment and the defendant was already contesting the claim.

The plaintiff was aware of the defendant's position in that regard but decided to take a calculated risk and pay the money all the same. He said that he did so because he could not renege on the promise he had given to the architects that payment would be made.

At the end of evidence for the plaintiff, counsel for the defendant made an application for absolution from the instance on the basis that no evidence had been led upon which the court may find in favour of the plaintiff. He submitted that the evidence has not shown any contract between the parties in terms of which the money was paid. In any case, the claim, as pleaded, is not based on contract.

In addition, the claim is not based on unjust enrichment either because it was not pleaded.

Counsel for the defendant submitted that the plaintiff's counsel could not possibly introduce the claim for unjust enrichment in his opening address when it has not been pleaded.

In any event, according to the plaintiff's evidence, he paid the $50,000 without authority in order to create a conducive atmosphere for dialogue between the parties. He did not achieve that objective and there is no evidence that the defendant was enriched in any way....,.

Even if it had been pleaded, I am not satisfied that the plaintiff has made a case based on unjust enrichment.

The requirements for such a claim were set out by BARTLETT J in Industrial Equity v Walker 1996 (1) ZLR 269 (H) 298..., where he said:

“I am of the respectful view that the principal requisites for a general action on enrichment can be regarded as aptly summarised by WOUTER De VOS in Verry King saanspreeklikheid in die Suid Africk aansc Reg (1958) as stated by SCHOLTENS in 1996 Annual Survey of South African Law, 150 at 152 as:

(a) The defendant must be enriched;

(b) The enrichment must be at the expense of another (i.e. the plaintiff must be impoverished and there must be a causal connection between enrichment and impoverishment);

(c) The enrichment must be unjustified;

(d) The case should not come under the scope of one of the classical enrichment actions;

(e) There should be no positive rule of law which refuses the action to the impoverished person.

Obviously these requirements can only be fulfilled if, in any given case, the action is based on a defined set of circumstances.”

What happened in this case is that a shareholder and founder member of the defendant who had been ousted from the position of Managing Director was fighting tooth and nail to force his way back into office; an office which was already occupied by Dr Saungweme.

Proceeding roughshod on all the rights and interests of others, and stating that he did not care whether anyone approved or not, he forcibly took office with no recognisable role to play except, perhaps, to cause alarm and despondency among everyone associated with the institution.

He threatened to sue Board members because they were accusing him of stealing money from the defendant.

In the midst of all this, he claimed to have taken his money, generated from his own medical rooms, and meant for the tuition fees of his children studying out of the country, and paid $50,000 of it to a perceived creditor of the defendant without anyone asking him to and certainly without any authority to do so.

When he did that, he was aware that the defendant was denying liability and was contesting the claim. In fact, as fate would have it, the defendant has successfully defended the architects' claim. It cannot be said, therefore, that it was liable and that the payment, if any, made by the plaintiff was for its benefit. No benefit whatsoever has been shown.

It is remarkable that not a single receipt for the fifteen (15) or so instalments allegedly made to the architects has been produced.

What has been produced in place thereof are dubious letters written by the architects who were woefully conflicted given they were also making a claim against the defendant and the plaintiff was their star witness in that doomed adventure. As to why, if at all payments were made, copies of receipts could not be produced, we can only speculate.

I am not satisfied that the evidence establishes that payment was indeed made by the plaintiff or that the defendant derived any benefit or enrichment from it as to ground a claim for unjust enrichment.

HH18-12 : PIONEER TRANSPORT (PVT) LTD vs DELTA CORPORATION LTD and DAVID LESLIE CRUTTEDEN
Ruled By: GOWORA J

On 1 January 2003, the applicant and the first respondent executed an agreement for the “supply of primary beverage transport services.”In terms of clause 8 of the agreement, the first respondent, Delta, appointed the services of the applicant, Pioneer, to distribute and deliver products on its behalf to various destinations.In ...

On 1 January 2003, the applicant and the first respondent executed an agreement for the “supply of primary beverage transport services.”

In terms of clause 8 of the agreement, the first respondent, Delta, appointed the services of the applicant, Pioneer, to distribute and deliver products on its behalf to various destinations.

In order to perform its obligations under the agreement, Pioneer undertook to supply vehicles to Delta for use in the distribution aforesaid. To that end, Pioneer had to make available to Delta twelve mechanical horses which would be used to draw thirty-four trailers, these being supplied by Delta.

The agreement also provided for the supply of additional horses, by Pioneer, on an ad hoc basis as the exigencies of the situation would have demanded.

As sometimes happens, the parties had a falling out.

The agreement, in terms of clause 18 thereof, provided for the settlement of disputes through an arbitration process.

In due course, the second respondent was appointed as arbitrator to the dispute and the matter referred to him. The parties were called before him, and, on 16 January 2010, he issued an award.

The applicant has, through these proceedings, brought an application to have the award set aside by this court in terms of Chapter VII, Article 34 of the First Schedule to the Arbitration Act [Chapter 7:15]. The applicant also seeks costs against the first respondent.

The founding affidavit has been deposed to by a John Groves. He states that he is employed as a Managing Director by the applicant and that he is authorised to depose to the affidavit.

He states therein that the application was being brought to court in accordance with the provisions of section 2 of Article 34 of the First Schedule to the Arbitration Act [Chapter 7:15].

The dispute is centred around the effect to be given to clause 9(f) of the agreement, in terms of which, upon termination of the agreement, Pioneer was supposed to return the trailers to Delta, and such return to be in “good working condition” and order fair wear and tear excepted.

The deponent states that, on 26 September, Delta commenced arbitration proceedings in terms of a Statement of Claim filed of record. Pioneer opposed the claim and the matter was set down for hearing before the arbitrator. Both parties adduced viva voce evidence.

According to the deponent to the affidavit the crystal issue before the arbitrator was the duration of the agreement.

The arbitrator found that the claim by Delta had not prescribed at the time that it submitted the dispute to arbitration. The deponent contends, therefore, that the arbitrator acted outside the enabling provisions of the agreement.

He contends, further, that the finding by the arbitrator that the agreement between the parties terminated on 30 November 2005 was not rationally linked to either the evidence adduced by the parties or submissions made by the same on the papers or during the hearing. He contends, further, that, in finding as he did, that the agreement terminated on 30 November instead of 31 December, as provided for in clause 2 of their agreement, the arbitrator had created a new contract for them.

In addition to the above, the applicant contended that the mandate of the arbitrator was limited to the duration of the agreement, and that consequently he was supposed to ascertain the obligations of the parties as at the date of termination of the agreement.

However, contends the applicant, the arbitrator seemed to have extended the applicant's obligations under the contract beyond the lifespan of the agreement.

It is further contended that the applicant's liabilities ought to have been ascertained as at the date.

According to the applicant, the award is not limited to the termination date, as found by the arbitrator, that is 30 November 2005, but goes beyond that. Therefore, the applicant contends, even on his own version, the arbitrator has acted outside the provisions of the contract. This, he suggests, is contrary to the Zimbabwean substantive law on the privity of contracts and therefore contrary to public policy.

The deponent also avers, that, by awarding specific performance in favour of a party who had, in terms of the contract, bilateral obligations which it had itself not performed, and was not in a position to perform, the arbitrator had unjustly enriched one of the parties at the expense of the other contrary to the positive law in Zimbabwe regarding bilateral obligations and further that this was contrary to public policy.

In the event, the applicant prayed for the setting aside of the arbitral award....,.

The applicant has attacked the award on three prongs;

(i) Firstly, that the arbitrator acted outside the provisions of the enabling agreement;

(ii) That the claim was prescribed; and

(iii) That the order for specific performance was contrary to the public policy of Zimbabwe regarding bilateral and reciprocal obligations and the principle of unjust enrichment.

According to the applicant, the award should therefore be set aside on the following grounds:

1. That the arbitrator acted outside the provisions of the enabling agreement;

2. That the claim was prescribed in terms of section 14 of the Prescription Act; and

3. That the order for specific performance, in the circumstances of this case, was contrary to the public policy of Zimbabwe regarding bi-lateral reciprocal obligations and the principles of unjust enrichment.

In relation to the first issue, the applicant contended that the arbitrator had acted outside the provisions of the enabling agreement.

It is contended that the first respondent had an onus to establish the duration of the agreement between the parties. Contrary to the provisions of the contract, so the applicant contends, the arbitrator placed the onus on the applicant to disprove the contentions of the claimant.

The applicant contends that, before the arbitrator, it put up the case that the agreement commenced on 1 January 2003 and terminated on 31 December 2004 and that the respondent, had, contrary to that assertion, contended that the agreement had not terminated up to the time that it instituted proceedings.

The applicant contends that the arbitrator disagreed with the versions that both parties placed before the arbitrator, and that, in approaching the matter as he did, he created a new contract between the parties based on what he termed practical considerations.

The applicant contends, in this regard, that the arbitrator unilaterally extended the duration of the contract where he held the date of termination as 30 November 2005.

The applicant contends, therefore, that the award is liable to be set aside on the grounds that it is in conflict with the public policy of Zimbabwe.

The applicant suggests that there was ambiguity in the contract and that in fact the arbitrator did confirm that the contract was ambiguous and that therefore he should have invoked the contra proferentum rule in favour of the applicant and this error on his part constituted a gross error on his part which further rendered the award unenforceable.

He suggests that the arbitrator must have found that clause 8(d) was ambiguous and contrary to the clear provisions of clauses 1 and 2 of the agreement which stated the commencement and termination dates. He suggests that the contract was prepared by Delta, and, as it was ambiguous in relation to clause 8(d), the arbitrator should have been guided by the contra proferentem rule and find that the contract had terminated as provided for in clause 2.

He stated that the arbitrator failed to apply the clear and positive principles of Zimbabwean law in resolving the dispute, and that, in the circumstances, the award was contrary to the public policy of Zimbabwe.

The first respondent has contended that it is not for this court to decide whether or not the arbitrator was correct to find that the agreement would have terminated on the date that the arbitrator said it terminated. It was suggested, by the respondent, that what this court must ask itself is whether the conclusions reached by the arbitrator offends the public policy of Zimbabwe in the sense of being so far reaching and outrageous in its defiance of logic or accepted moral standards that a sensible and fair-minded person would consider the conception of justice in Zimbabwe would be intolerably hurt by the award: see Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S).

The critical issue for determination before the arbitrator was the duration of the contract.

It is trite that the original UNCITRAL Model did not define the concept of public policy. It is accepted, however, that the concept covers fundamental principles of law and justice in substantive as well as procedural law.

In casu, the standard set in Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S) has not been met.

The applicant has chosen not to place the record of proceedings before for the court resulting in the court being unable to judge for itself whether or not the conclusions of the arbitrator are so outrageous in defiance of logic and accepted moral standards as to lead a fair minded person to believe that justice in Zimbabwe would be intolerably hurt by the award in favour of the first respondent.

The applicant has not, in the affidavit on which the application is premised, even alleged that the conclusions reached by the arbitrator defied logic to such unacceptable standards.

Instead, the applicant has sought to deal with the matter as if it were an appeal or application for review.

In Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S) the court stated:

“An award will not be contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in fact or law. In such a situation, the court would not be justified in setting the award aside. Under Article 34 or 36, the court does not exercise an appeal power and either uphold or decline to recognise an award having regard to what it considers should have been the correct decision.”

Whether or not the arbitrator arrived at the wrong decision is not an issue that this court is empowered, in terms of Article 34, to decide.

What the applicant should have established is that the decision and conclusions reached, based on the standard set in Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S) was so outrageous in its defiance of logic and reasoning that any fair-minded person would have a conception that justice in Zimbabwe would be hurt by that award.

This is not the case of the applicant.

There is no suggestion anywhere in the heads of argument pointing me to an aspect of the award that breached the rules of natural justice.

In any event, there is no principle that says that an arbitrator can have his award set aside on the basis that he erred or was wrong. If it is there I have not been made aware of it.

In Telcordia Technologies Inc v Telcom SA 2007 (3) SA 266 HARMS JA stated:

“…,. An arbitrator 'has the right to be wrong' on the merits of the case, and it is a perversion of the language to label mistakes of this kind as a misconception of the nature of the inquiry; they may be misconceptions about meaning, law, or the admissibility of evidence, but, that is far cry from saying that they constitute a misconception of the nature of the inquiry.

To adopt the quoted words of HOEXTER JA;

'It cannot be said that the wrong interpretation of the Integrated Agreement prevented the arbitrator from fulfilling his agreed function or from considering the matter left for him for decision. On the contrary, in interpreting the Integrated Agreement, the arbitrator was fulfilling the function assigned to him by the parties, and it follows that the wrong interpretation of the Integrated Agreement could not afford any ground for review by the court.'”...,.

The applicant states that the claim presented to the arbitrator was for specific performance and that is what the first respondent got in the award from the arbitrator.

However, argues the applicant, the agreement relied upon imposes bilateral and reciprocal obligations on the parties. Specific reference is made to clause 14 in this regard. Specifically, the applicant contends that the maintenance of the trailers was a recoverable cost from Delta and that this would depend upon the mileage covered on a monthly basis.

The applicant suggests that the arbitrator must have found that, due to the deteriorating economic situation in Zimbabwe, the parties were unable to perform on the contract as from 2005.

The applicant contends, further, that the maintenance of the trailers was intrinsically linked to the first respondent's ability to provide the stipulated monthly mileage in respect of each horse in accordance with the provisions of clause 14 of the agreement for the applicant to recover the full maintenance costs for the availed trailers in accordance with the costing module.

The applicant contends that it had furnished to the arbitrator schedules which showed that, from December 2004, the parties had operated on an ad hoc basis as opposed to the strict terms of the agreement and that in view of that evidence the arbitrator had found that the first respondent was not providing the requisite mileage post 31 December 2004.

Therefore, contends the applicant, in ordering specific performance retrospectively as he did, the arbitrator acted outside the positive law of Zimbabwe regarding the enforcement of bilateral obligations between the parties. Put differently, the applicant contends that it is against the law of contract of Zimbabwe to direct a party to specifically perform on a contract where the other party thereto was unable and remained unable to perform in terms of that contract.

In addition, it is contended that the order for specific performance amounts to unjustified enrichment in that the first respondent was now unjustly enriched retrospectively in respect of a contract which itself did not specifically perform. This was due to the fact that, in order to comply with the award, the applicant would have to incur pecuniary loss in multi-currency as opposed to the Zimbabwe dollar which was the currency for performance and payment under the agreement.

Accordingly, the order for specific performance would again be contrary to the public policy of Zimbabwe and the relief should not have been granted to the first respondent in the first place.

The first respondent contended that the applicant had been expected to return the trailers in good working order, fair wear and tear excepted. The tyres were, however, required to have, upon the return of the trailers, the same amount of rubber as at the date of take over by the applicant.

Further, it is denied that the second respondent ordered specific performance retrospectively.

It is averred that all the second respondent did was to give effect to the contract and determine the obligations of the applicant in terms of clause 9(f) of the service contract. It is consequently denied that the order for specific performance was contrary to public policy as the applicant did not allege undue influence, fraud, or a breach of the rules of natural justice.

It is averred that there were no bilateral obligations as at the date of termination of the contract as the applicant had the obligation to restore the trailers in good working condition and order. The first respondent's obligation had been defined in clause 9(c), to ensure that all the trailers were validated by a certificate of fitness. By providing the certificates, the first respondent contends that it had complied with its obligations under the contract.

In so far as the jurisdiction of the second respondent is concerned, the first respondent contends that it was wide and was not limited to ascertain the obligations of the parties as at the date of the termination of the agreement, but, included any questions regarding the existence, validity, or termination of the same.

The first respondent accepts that the claim it filed with the arbitrator was for specific performance and that this was in terms of the agreement between the parties.

The respondent is of the view that the applicant is raising issues that are specifically dealing with an appeal which issues should not be entertained by this court.

The point is also made that the applicant had not filed a counter application before the arbitrator to the effect that the first respondent had not performed its obligations in terms of the contract.

The court is being urged, as a result, not to have regard to any suggestion that the maintenance of the trailers was a recoverable cost in terms of the contract as that was not one of the factors for consideration under Article 34 of the Arbitration Act.

It is contended that the applicant's real grievance is that the second respondent came to a wrong conclusion on the facts and the law.

It is denied that the award unjustly enriched the first respondent at the expense of the applicant.

The nature of a contract is that two or more parties thereto reciprocally promise, or one of them promises to the other or others, to give some particular thing or to do or refrain from doing some particular act.

There is, consequently, a presumption, that, in every bilateral or synallagmatic contract the common intention is that neither should be entitled to enforce the contract unless he has performed or is ready to perform his own obligations.

The parties to this dispute entered into a contract in terms of which each of them assumed obligations to the other, and, in return, also acquired rights flowing from the assumption of such obligations.

In terms of clause 8(d) of the contract herein, Pioneer was to assume the responsibility for the maintenance, licensing, and annual certificates of fitness in relation to the trailers supplied to it by Delta. In the event that Pioneer incurred any additional expenses in relation to this obligation, arising from the structural defects from the trailers, then, Delta would consider meeting part of a particular expense.

On termination of the agreement, the clause in (f) provided that Pioneer would return the trailers in good working condition, fair wear and tear excepted.

I am somewhat hampered by not having been provided with the record of the proceedings.

The first respondent has, however, availed copies of two letters which had been placed before the arbitrator and specifically dealt with the issue of prescription. The first is an e-mail written by Kelvin Motsi, of the applicant, on 24 October 2007, and is addressed to the first respondent. The pertinent part of the e-mail reads as follows:

“As per last mail below, and discussion with Delta yesterday, we are still working on your trailers and all efforts are being made to make such trailers available. Trailers T6554 and T6555 went to VID this weekend and did not pass the inspection; the issues raised have been rectified now and the trailers (sic) due for inspection again today.

T6244 and T6245 are also getting ready for VID. As per our discussion, once back from VID and passed (sic) we will advise your (Delta) workshops for a handover.

I fully understand the pressure you are going through to supply the country. We, at Pioneer, are putting in 100% to try and get these trailers ready under the difficult conditions of getting in the spares and other items required to bring them up to spec. if you have other ideas on how best we can source these items then we are open to discuss.

I however also do not take lightly the comments raised against myself on this issue, the reasons for the delays are not known by me alone. May I propose we sit round a table and air out all issue involved and identify responsibility to both parties in the smooth handover of such trailers and relations going forward.”

The second is a letter dated 27 March 2008, addressed to a Mr M Sekerani of Delta by Mark Dawson from Pioneer. It is appropriate to quote the full text of the letter;

“With great embarrassment, I write to you yet again apologising (sic) for the delay in the return of your trailers to you. We wish to state that we are not in any way trying to ignore or escape our obligation to you and are fully aware that we are testing your patience and leniency on this issue. We are still trying to recover from a huge hole that was left by previous employees as well as a huge skills gap that has emerged due to a skills flight of artisans.

We however intend to be delivering one trailer per week to you as from this week, whereas previously we had committed to two per month.

To achieve this, we have employed two coach builders from Deven Engineering who will start on our payroll on 1 April. We have imported a sand blaster from South Africa. We are also importing paint from South Africa.

We thank you for the loan of the paint and will return what we have borrowed next week. We thank you for your leniency so far and look forward to making good our obligation to you.”

I am persuaded, that, from the tenor of the two letters that were submitted to the arbitrator by the first respondent, it was never in doubt that the applicant was aware of its obligations under the contract and that it had expressed every intention to fulfil those obligations.

The email from Kelvin Motsi and the letter from Mark Dawson both clearly spelt out the acceptance by the applicant of returning the trailers to the first respondent in good working condition.

If the applicant had not accepted the obligation, or had misunderstood the obligation, it would not have taken upon itself the expense of hiring coach builders and a sand blaster to work on the trailers. It had also ensured that each of the trailers, prior to delivery to Delta, had to pass a fitness test with VID.

This, in my view, was clearly in accordance with the requirement in the contract that the trailers be returned to Delta in good working condition, fair wear and tear excepted.

I do not understand the applicant to suggest that the trailers should not have been returned.

The argument is that the second respondent should not have required that the applicant be made to perform in terms of the contract when the first respondent had itself not performed its own part of the contract.

The obligation of the first respondent was to provide the applicant with trailers to enable the latter to utilise them in the distribution of products on behalf of Delta. The parties' reciprocal obligations, during the life of the contract, are not in dispute. Once the agreement is terminated, the status quo ante had, of necessity, to be restored. This necessitated the return by the applicant of the first respondent's trailers in good working condition, fair wear and tear excepted.

I am of the view that the reasoning by the arbitrator, in requiring the applicant to comply with this contractual obligation, cannot be faulted.

I am unable to accept as cogent the argument by the applicant that the agreement had envisaged bilateral obligations on the parties and that, in awarding specific performance in the first respondent's favour, the arbitrator had imposed an obligation upon one party when the other party to the contract was clearly not in a position to perform its own part of the obligation.

I accept that during the currency of the agreement the first respondent was obliged to allocate trailers for the facilitation of the transportation of its goods by the applicant. Charges raised by the applicant for this service would permit the applicant to ensure that its horses and the first respondent's trailers would be maintained in a roadworthy condition and be certified fit by VID.

Upon termination of the agreement, however, it was the responsibility of the applicant to return the first respondent's trailers in good working condition, fair wear and tear excepted.

I cannot see how, by giving effect to the letter of the agreement regarding the obligation imposed upon the applicant to return the trailers in good and working condition, it can be suggested that the arbitrator imposed an obligation upon one party to the agreement.

HH44-09 : BLESSMOE CHANAKIRA and AUXILIA DANAYI MYNYEZA vs MAI KAI REAL ESTATE DEVELOPMENT TRUST and BERNARD MUTANGA
Ruled By: BERE J

Application in terms of Order 29 of the High Court Rules, 1971.The BackgroundThe agreed facts of this matter, as given by the parties, are as follows:-On 9 November 2004, the plaintiffs entered into an Agreement of Sale with the first defendant, represented by the second defendant, in respect of the ...

Application in terms of Order 29 of the High Court Rules, 1971.

The Background

The agreed facts of this matter, as given by the parties, are as follows:-

On 9 November 2004, the plaintiffs entered into an Agreement of Sale with the first defendant, represented by the second defendant, in respect of the extend of subdivision “A” of subdivision “C” of Kingsmead extension of Borrowdale Estates.

In terms of that agreement, the plaintiffs purchased from the defendant the above-mentioned property for the sum of $700 million (old currency).

The plaintiffs duly paid in full the purchase price in terms of the agreement.

Subsequent to payment of the purchase price, the plaintiffs could not get transfer of the property because a Mr Geoffrey Andrew Harrel, the previous owner of the property, from whom the first defendant had purchased it, was refusing to pass transfer to the first defendant claiming that he was still owed the sum of $460 million (old currency) by the first defendant with the latter disputing it.

Acting on that understanding, and in the interest of protecting their rights arising from their agreement with the first and second defendants, the plaintiff duly paid the $460 million to Mr Geoffrey Harrel.

The first and second defendants do not deny that they are liable to the plaintiff, what is however in issue is the quantum of such liability.

The plaintiffs claim is for unjust enrichment as set out in the summons.

The defendants deny the plaintiffs are entitled to claim for unjust enrichment and aver that the defendant's are entitled to the sum of $460 million plus interest calculated at the prescribed rate only.

The plaintiffs deny the defendants' computation of its liability to the plaintiffs.

ISSUE BEFORE THE COURT

The issue which the court has been called upon to determine is a question of law, viz whether, in the light of the agreed facts, the plaintiffs' claim for unjust enrichment is sustainable or whether the plaintiffs are entitled to the tendered amount of four hundred and sixty million dollars together with interest at the prescribed rate calculated from the date of liability to the date of payment.

Counsel for the plaintiffs put up a very strong and persuasive argument in favour of the plaintiffs' claim for unjust enrichment.

It was his contention, guided by precedent from this court: Industrial Equity v Walker 1996 (1) ZLR 269: Mtunda v Ndudzo 2000 (1) ZLR 71 (H) 718; Jengwa v Jengwa 1999 (2) ZLR H 121 and outside our own jurisdiction; Nortje En'nAnder v Pool NO 1966 (111) SALR 96 that the remedy of unjust enrichment would entitle the plaintiffs to get damages in order to achieve equity.

Counsel also reasoned that if the court were to proceed with this claim under unjust enrichment, the court would be able to award damages at current values which would take into account inflation for purposes of computing the amount of compensation.

Counsel for the defendants vehemently opposed the position adopted by the plaintiffs by arguing, inter alia, that, the amount paid by the plaintiffs to a Mr Harrel was a simple debt which should be repaid with interest at the prescribed rate hence the tender by the defendants.

It was also argued by counsel that the issues to do with inflation are really to do with the legislature which prescribes what it deems to be an appropriate rate of interest from time to time.

Having acquainted myself with the authorities cited there can be no denial that a claim of unjust enrichment is recognised as part of our law.

In an appropriate case, such a claim can be sustainable.

I think the issue which must remain impeded in my mind, to avoid clouding my focus, is whether or not the circumstances under which the debt of four hundred and sixty million dollars arose would justify the claim as crafted by the plaintiffs.

In doing so, I remain cognisant of the fact that not every claim made under unjust enrichment will pass the test under this heading.

In determining this matter, I remain conscious that it is not the function of the court to re-write the contract for the parties but that the court must endeavour to ascertain what was in the minds of the parties at the time the issue of four hundred and sixty million dollars arose.

What is clear from the pleadings, and agreed upon by the parties, is that the sole reason why the plaintiffs paid Mr Harrel the four hundred and sixty million dollars was that they wanted to protect their rights in the sold property or to ensure the smooth transfer of the purchased property.

It is also clear that the first defendant had never accepted this liability to Mr Harrel and that the plaintiffs were themselves not privy to the circumstances surrounding the liability as between the first defendant and Mr Harrel.

It is important to note that the main contract between the plaintiffs and the first defendant remained intact and that the property was transferred with the purchase figure still remaining pegged at the original agreed price of seven hundred million dollars.

It is a time honoured principle of our law of contract that it is founded upon true consensus ad idem of the parties involved: The Law of Contract in South Africa, (Butterworths), by R H CHRISTIE…,.

In the words of WESSELS…, and approved by ROBERTS AJ in the case of Jordaan v Trollip 1960 1 PH A25 (T):

“Although the minds of the parties must come together, courts of law can only judge from external facts whether this has or has not occurred. In practice, therefore, it is the manifestation of their wills and not the unexpressed will which is of importance.”

Can it be seriously contended in this matter, that, at the time the plaintiffs paid the four hundred and sixty million dollars to Mr Harrel, on behalf of the defendant (who was disputing liability at the time), the plaintiffs had in mind the recovery of their money from the defendant based on the principles of unjust enrichment?

In the same vein, can it be said that, at the time the issue of four hundred and sixty million dollars arose, the first defendant had in his mind the concept of unjust enrichment at the time of repayment or both parties viewed the transaction as a simple ascertainable debt which would be repaid as such?

I detect some revealing indication from the plaintiff's heads of argument where counsel on behalf of the plaintiffs states as follows:-

“An equitable remedy is one that seeks to do justice between the parties, and, in the circumstances of this matter, an order for the payment of 460 million dollars (old currency) plus interest will not do justice to the plaintiff's claim. This amount has become so insignificant as a result of inflation and the removal of zeros on our currency in June 2006 and July 2008 such that in today's terms the said amount is now the equivalent of 0,00046 cents. When the said 460 million dollars was paid, in October of 2005, it was about the equivalent of 66% of the value of the property that the plaintiff's were purchasing; now, the said amount cannot buy a single brick.”…,.

I have not the slightest doubt in my mind, that, at the time the plaintiffs and the first defendant discussed the issue of four hundred and sixty million dollars paid to Mr Harrel they all looked at it as a simple debt that would be repaid as it was. The issue of unjust enrichment could not possibly have occupied their minds at the time this money was paid out.

As is clearly apparent from the above quotations, it does seem to me that the plaintiffs claim, as now crafted, is not as a result of the arrangement as they perceived it with the first defendant at the time the four hundred and sixty million dollars was paid out to Mr Harrel but an afterthought, a direct response to the impact of galloping inflation coupled with the axing of zeros from our currency which has rendered the advanced amount completely valueless.

There has been no suggestion by the plaintiffs that the first defendant was responsible for triggering inflation, let alone the removal of zeros from our currency.

It is quite significant to note that, at the time the plaintiffs paid the four hundred and sixty million dollars to Mr Harrel, they were fully aware that the first defendant had a dispute with Mr Harrel over the amount in question. The plaintiffs, for convenience's sake, decided to pay the disputed amount because they did not want the transfer of the purchased property compromised.

In such a scenario, there can be no question of non-disclosure on the part of the first defendant and this probably explains why even in the declaration filed there was no reference to such non-disclosure as the basis for the claim.

Even if this court were to make a specific finding that there was a material non-disclosure on the part of the first defendant; in my view, such a finding would not advance the plaintiffs claim under unjust enrichment for as long as it is agreed that the plaintiffs claim is a simple debt sounding in money the principle of currency nominalism would come into play.

The principle of currency nominalism, which no doubt is part of our law, forbids the approach adopted by the plaintiffs in this matter.

I am fortified in this view by the position adopted by E.M. GROSSKOPF JA in SA Eagle Insurance Co. Ltd v Hartley 1990 4 SA 833…, when he eloquently elaborated on the principle of currency nominalism in the following terms:-

“'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 fluctuation 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 an appreciation…,.

Nominalism is the norm in the common law of Western States with similar systems to our own. Thus, in Deutsche Bank Filiale Nurnberg v Humphrey (1926) 272 US S17 at 519 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.'

The same applies in England.

In Treseder–Griffin and Another v Co-operative Insurance Society Ltd (1956) 2 QB 127 (CA) at 144 DENNING LJ said the following:

'…,. (I)n England, we have always looked upon a pound as a pound, whatever its international value…,. In all our dealings we have disregarded alike the debasement of the currency by kings and rulers or the depreciation of it by the march of time or events…,. A man who stipulates for a pound must take a pound when payment is made, whatever the pound is worth at that time.'”…,.

After commenting on nominalism of currency in the Netehrlands and German legal systems the learned Judge of Appeal went on to consider the reasons commonly given for currency nominalism. The judge commented as follows:

“It is not necessary to consider them in detail, except to point out that it would represent a revolutionary transformation of our legal system if courts were to be called upon to determine the true economic value (in terms of purchasing power) of all obligations sounding in money. I need not, however, labour the point; currency nominalism, for whatever reason, is firmly entrenched in our law:” SA Eagle Insurance Co. Ltd v Hartley 1990 4 SA 833 p840…,.

Clearly, the attempt by the plaintiffs to lodge their claim under unjust enrichment in this case is an attempt to circumvent the principles of nominalism of currency given the effect of the rapid depreciation or debasement of the Zimbabwean dollar ever since the debt of four hundred and sixty million dollars was paid by the plaintiffs.

I am in total agreement with the views expressed by my brother judge, KUDYA J, in the recent case of Constantinos Bakari v George Kattarenos HH01-09 where he stated that:

“Courts have adopted a conservative approach to the question of determining the true economic value of money” by leaving it up to the legislature which is empowered to review and set from time to time the prescribed rate of interest.

Everything considered, I do not see how the plaintiffs claim, under unjust enrichment, can be sustained in this case.

I am of a very strong conviction that the plaintiffs are entitled to no more than the sum of four hundred and sixty million dollars (revalued) together with interest at the prescribed rate of 30% as tendered by the defendants.

COSTS

I think in all fairness the Stated Case is of great legal significance. This probably explains why neither of the parties have asked for costs.

Each of the parties must bear their own costs.

Appealed
SC24-21 : BIG VALLEY MASTERS (PRIVATE) LIMITED vs SHI JINWU
Ruled By: GWAUNZA DCJ, GUVAVA JA and MAVANGIRA JA

INTRODUCTIONThis appeal arises from the judgment of the High Court in which the court a quo ordered the appellant to pay the respondent the sum of US$89,000 with interest at the prescribed rate calculated from 11 December 2012 to the date of full payment.The appellant is a gold mining company. ...

INTRODUCTION

This appeal arises from the judgment of the High Court in which the court a quo ordered the appellant to pay the respondent the sum of US$89,000 with interest at the prescribed rate calculated from 11 December 2012 to the date of full payment.

The appellant is a gold mining company. It is registered in terms of the laws of Zimbabwe. It owns a gold mine located in Shurugwi (Sky Rocket 16485).

The respondent is a private individual of Chinese origin. He is a foreigner investor based in Zimbabwe.

BACKGROUND FACTS

On 13 January 2011, the appellant and the respondent entered into a joint venture agreement. In terms of the agreement, the parties would constitute a new company. The appellant would provide mining claims and the respondent would be responsible for exploration and providing investment of capital and equipment in respect to the mining venture.

In terms of the agreement, the respondent would get 75 per cent and the appellant 25 per cent of the proceeds from the mine.

The respondent was obliged to grant a loan to the new company in the sum of US$150,000. The loan was to be paid back to the respondent through deductions from profits that would accrue to the appellant when such profit was realized by the company.

The respondent had to pay a down payment in the sum of US$50,000 within ten days of coming into effect of the agreement. In return, the appellant would give the respondent 'blocks of claims' certificate and the company certificate “after agreement of signature of ten days.” (sic)

The new company was to be established before 1 March 2011, and, thereafter, the respondent would pay the remaining US$100,000 to the appellant within ten days after 1 March 2011.

Failure by the respondent to bring reasonable mining equipment and to have the project take off by July 2011 would entitle him to be paid back the loaned amount within six (6) months.

Following signing of this agreement, the respondent, through his erstwhile legal practitioners, wrote a letter to the appellant dated 13 May 2011. In this letter, the respondent informed the appellant that there was a misconception on the terms and conditions of the agreement which had been agreed to by the parties on 13 January 2011. As such, the respondent informed the appellant that he was cancelling the agreement and demanded a refund of the sum of US$88,099 which he had paid to the appellant as a loan amount in terms of the agreement.

Following the letter cancelling the agreement, the parties thereafter entered into a new agreement on 3 October 2011.

In terms of the new agreement, the appellant admitted that it owed the respondent the sum of US$89,000. It was also agreed that the full loan amount, as agreed by the parties, was US$150,000.

It was further agreed that the respondent would recover the loan amount through a tribute to operate and extract ores from the mine. The respondent was to take over the appellant's workers and general control of the mine and recover the amount due to him.

Payment of the loan balance of US$61,000 was to be made before the respondent could take up occupation of the mine.

On 11 December 2012, the respondent issued summons against the appellant claiming the sum of US$89,000 being the amount advanced to the appellant as well as interest at the prescribed rate and cost of suit.

In his declaration, the respondent averred that the new agreement between the parties did not come into fruition due to the appellant's (represented by Philemon Mubata who was cited as the second defendant a quo) failure to perform in terms of the agreement by excluding him from the operations at the mine and using the loan contrary to the provisions of the agreement.

The respondent further averred that he had no choice but to cancel the agreement as the appellant had breached it.

In its plea, the appellant did not dispute entering into a joint venture agreement with the respondent but argued, instead, that, the respondent had not sought to recover his money by mining ore equivalent to the loan sum of US$89 000. It was the appellant's argument that according to the agreement, the appellant was entitled to six months in which to repay the loan. The appellant thus stated that the issuance of summons proceedings was premature.

On 20 November 2013, the appellant amended its plea and averred that the respondent had breached the agreement and failed to provide equipment necessary to carry out exploration work at the mine.

Following breach of the first agreement by the respondent, the parties entered into a second agreement.

The appellant further averred that the second agreement had a suspensive provision to the effect that the respondent had to pay the full amount of US$150,000 before he could recover his monies from production on the mine.

The appellant also filed a counter claim against the respondent with the amended plea for the sum of US$61,000 being payment of the balance of the loan in fulfilment of obligations which the respondent had undertaken in order to fulfill the terms of the agreement.

In response to that claim, the respondent alleged that a condition had to be satisfied, prior to the payment of the US$61,000, which condition was his involvement in management and operations at the mine at the inception of the loan agreement. The respondent averred that he was frustrated by the actions of the appellant. This was the reason why he failed to fulfill his obligation and led to the cancellation of the whole agreement.

PROCEEDINGS BEFORE THE COURT A QUO

At a Pre-Trial Conference, the agreed issues for determination were stated as follows:

“(a) Whether or not the plaintiff was, in accordance with the joint venture agreement, obliged to pay the sum of US$150,000 towards financing the gold mining venture.

(b Whether or not the first and second defendants frustrated the contract resulting in non-fulfillment of the terms and conditions of the agreement between the parties.

(c) Whether or not the first and second defendants were in breach of the fundamental terms of the agreement causing the plaintiff to cancel the whole agreement and demand repayment of the loaned sum of US$89,000.”

During the trial the respondent, Ms. Ding (his assistant at the time when the agreement was made) and one Mr. Wei Ren (the respondent's mining manager from 2005 to 2010-2011) gave evidence.

The three witnesses all testified to the effect that the appellant and respondent entered into two agreements which never materialized and that the appellant denied the respondent access to the mine so that he would recover his monies. Ms Ding further clarified that the second agreement was prepared by Mr Mubata. She denied that the respondent had breached any of the terms of the agreement and insisted that it was the appellant which had breached the terms of the agreement by denying the respondent access to the mine.

Two witnesses led evidence on behalf of the appellant.

Mr. Mubata (the second defendant a quo) testified that the agreement failed to materialize because the respondent failed to bring the requisite equipment to the mine and that the respondent cancelled the agreement because the appellant had refused to sell the mine and transfer the registration certificates to him. The second witness was Mr. Mhere, the appellant's Finance and Administration manager. He testified that the respondent failed to pay the full loan amount which had been agreed between the parties leading to the breach of the agreement.

In its judgment, the court a quo found that the respondent had had the agreement explained to him in Chinese and therefore they were valid agreements.

The court believed the evidence of the appellant that the respondent paid the loan in 'dribs and drabs' contrary to the terms of the agreement. The court a quo also found that the respondent was in breach of both agreements.

The court, however, decided to apply the principle of equity on the basis that the respondent's grasp of English was so bad that he may not have understood the terms of the agreement and decided to reimburse the respondent the amount that he had loaned the appellant. The court stated as follows:

“I (sic) persuaded that it would be appropriate to utilize the equitable principle in coming to a resolution of this matter. I hold the view primarily because the court was uneasy with the plaintiff's level of understanding of the terms of both agreements.”

The court made the following order:

“In the result, it is ordered that:

1. The plaintiff's claim against the 2nd defendant be and is hereby dismissed with costs.

2. The defendant's counter-claim against the plaintiff, for payment of USD$61,000, be and is hereby dismissed with costs.

3. Plaintiff's claim, as against the 1st defendant, Big Valley Masters Private Limited, in the sum of US$89,000, is allowed, together with interest thereon at the prescribed rate calculated from 11 December 2012 to the date of payment in full.

4. 1st defendant shall bear the costs of suit.”

The appellant was dissatisfied and appealed on the following grounds:

1. The court a quo erred in law in deeming the partnership dissolved by a letter at a future date contrary to the principle that dissolution of a contract is exercised ex nunc.

2. The court grossly misdirected itself in adjudging that the respondent was entitled to recover US$89,000 when he was in clear breach of the parties' agreement.

3. The court a quo grossly misdirected itself by allowing the respondent to derive a benefit from his own wrong.

4. The court a quo erred in failing to uphold the appellant's defence of the exceptio non adimpleti contractus.

5. The court a quo further erred in allowing interest on the sum of US$89,000 to run up to the date of payment thus contravening the in duplum rule.

6. The court a quo grossly misdirected itself in awarding costs in favour of the respondent where it had failed to fully succeed in the matter.

In my view, from the appellant's grounds of appeal, and from submissions made, the issue that resolves the appeal is the following:

Whether or not the court a quo erred in applying the principle of equity in resolving the matter

SUBMISSIONS ON APPEAL

Counsel for the appellant…, submitted, in the main, that, the court a quo erred in determining the matter before it on the basis of the principle of equity as such principle is not part of the Zimbabwean law.

Counsel argued that the principle could only be resorted to where a statute provides for its application.

It was counsel's submission that the terms of the agreement were clear and should have been complied with. With these submissions, whilst not abandoning the other grounds, counsel prayed that the appeal be allowed.

Per contra, counsel for the respondent…, argued that the court a quo did not misdirect itself when it applied the principle of equity. It was his submission that the principle is part of our law in terms of the common law. Counsel further argued that the breach of the agreement by the respondent could be attributed to the fact that there had been difficulty in communication as the respondent could not communicate fluently in English. Counsel thus submitted that the case was one which justified the application of the principle of equity so as to ensure that the appellant would not be unjustly enriched.

The court a quo found in favour of the respondent on the basis of the principle of equity. The court stated as follows;

“A modern interpretation of the equitable principle, one that takes into account the situation prevailing in our economy, may not favor an insistence that the plaintiff cannot succeed in his claim until he has performed in full, the terms of the October agreement. The court can exercise its discretion in the plaintiff's favor despite his partial performance of the January agreement (by advancing a loan up to US$89,000) and his non-performance of the October agreement.”

The appellant has argued that the court a quo erred in applying the principle of equity in this matter as the principle is foreign to this jurisdiction. With that, the appellant seeks to show that the court misdirected itself in finding for the respondent resulting in him deriving a benefit from his own wrong.

The second agreement had a provision, under paragraph 8, which stated as follows:

“(8) PAYMENT OF LOAN BALANCE ($61,000) SHOULD BE PAID TO SUM IN FULL BEFORE OCCUPATION OF PLANT WILL BE TAKING AFTER MR SHI IS BACK”(sic)

It was not in dispute that the provision under paragraph 8 was not fulfilled by the respondent.

It was also an agreed fact that at no point did the respondent mine or recover any profits from the mine.

The appellant submits that the court a quo erred by ordering it to pay the respondent his money in circumstances where he had breached the contract.

The respondent argued, before the court a quo, that, he was denied entry on to the mine by the appellant. This prevented him from being productive to recover his monies as agreed between the parties in the second agreement. The appellant counter-argued that the respondent was never refused access to the mine from the date when the first agreement was signed to the signing of the second agreement.

The court a quo believed the appellant's arguments and found that the respondent failed to honor some of the provisions of the agreement and was never denied access to the mine.

It is a settled principle that this Court will not easily interfere with factual findings made by a lower court unless the findings are grossly unreasonable: see ZINWA v Mwoyounotsva 2015 (1) ZLR 935 (S); Hama v NRZ 1996 (1) ZLR 664 (S); Reserve Bank of Zimbabwe v Corrine Granger and Another SC34-01.

The lower court enjoys the opportunity to see the witnesses on the stand, assess their demeanour and credibility. Such findings of fact cannot easily be interfered with by an Appellate Court as it is limited to the record of proceedings: see Mtimukulu v Nkiwane and Another SC136-01.

The respondent, in making his claim for the amount which had been advanced to the appellant, had to prove that he was owed such money.

It is pertinent to note that the standard of proof in all civil matters is on a balance of probabilities.

The concept of proof on a balance of probabilities was enunciated in British American Tobacco Zimbabwe v Chibaya SC30-19 wherein the court quoted with approval the case of Miller v Minister of Pensions [1947] 2 All ER 372, 374 and explained the concept of balancing probabilities as follows:

“It must carry a reasonable degree of probability but not so 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.”

This was further emphasized in the book, Principles of Evidence, 4th ed (2016) Juta: Cape Town, wherein the authors SCHWIKARD PJ and Van der MERWE SE stated that:

“In civil proceedings, the inference sought to be drawn must also be consistent with all the proved facts, but it need not be the only reasonable inference: it is sufficient if it is the most probable inference.”

The rule on onus of proof was pronounced in ZUPCO Ltd v Pakhorse Services (Pvt) Ltd SC13-17 where the Court stated that:

“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.”

The respondent managed to discharge the onus of proof which was required of him in making his claim.

Indeed, it was conceded, by the appellant, that, the sum of US$89,000 was paid to it by the respondent. It was also conceded that during the subsistence of the agreement the respondent did not mine any gold or recover any profit from the use of that money.

The resultant effect was that the appellant ended up unjustly enriched by the respondent's US$89,000 which the respondent did not benefit from.

The appellant, in motivating the point that the court a quo erred in finding that the respondent could recover money he had paid to the appellant, relied on the ground that the court erred in failing to uphold its defense of exceptio non adimpleti contractus.

This point was not pursued in the appellant's heads of argument and was never pleaded a quo.

Clearly the appellant was wrong in submitting that the court a quo erred by not dealing with the point.

It is a trite principle that it is not open to the courts to rewrite a contract entered into between the parties or to excuse any of them from the consequences of the contract that they have freely and voluntarily accepted, even if they are shown to be onerous or oppressive as this is a matter of public policy: see Magodora and Others v Care International Zimbabwe SC24-14.

This Court must interpret the second agreement literally.

It can be deduced from the agreement that the respondent had to pay the full loan amount first before taking occupation of the mining claims. The respondent failed to do so and this resulted in a breach of the contract. Once the respondent failed to fulfil his end of the agreement, and a breach occurred, the agreement was terminated and the respondent would ordinarily not be entitled to recover his money.

However, for a wholesome resolution of this matter, it is in the interests of justice that the principle of equity be looked at as that was the basis of the court a quo's decision.

The scholar R.H. CHRISTIE, Business Law in Zimbabwe, 2nd Ed, Juta & Co Ltd…, provides that the principle of equity may be resorted to where there is incomplete performance of a contract. The principle is based on unjust enrichment.

The court, in Carlis v McCusker 1904 TS 917, observed that:

“In view of the well-known maxim of law, that no man should be allowed to enrich himself at the expense of another, this court would not permit a man who had verbally agreed to sell landed property, and had, on the faith of that agreement, received the whole or portion of the purchase price, to retain both the money and the land. It would, under such circumstances, come to the relief of the purchaser,”

See also Matipano v Gold Driven Inv (Pvt) Ltd SC225/12.

This principle is clearly discretionary and is applied by a court on the basis of the particular circumstances of a case which warrant the use of such a principle.

I would, however, venture to suggest that the principle of equity should be sparingly used as it has the effect of undermining the contract entered into between the parties.

In this case, the respondent paid a known sum of money to the appellant on the basis of the first agreement. The respondent never acquired any minerals from the appellant's mine. Although the first agreement was dissolved, the court a quo, in the exercise of its discretion, took into account that the second agreement did not have an operational clause to deal with what would happen if any of the parties breached the agreement.

In the first agreement, it was an agreed provision, that, in the event that the respondent failed to bring equipment to the mine he would be entitled to a refund of his money within six (6) months. The appellant, in its own plea, stated that it was an agreed provision that if there was failure to pay the debt it would settle the debt over a period of six months.

It seems to me that even though the second agreement did not have a provision for settlement between the parties, in the event that the respondent failed to fulfill his obligations, the court a quo was correct to exercise its discretion and be guided by the spirit of the provision in the first agreement. It was quite apparent that the second agreement flowed from the first agreement between the parties.

This is a matter where equity may properly be applied.

It would be unjust for the appellant to remain in possession of the US$89,000 which was paid to it by the respondent when the respondent himself did not get anything from the deal. The agreement between the parties was an investment on the part of the respondent that was going to jointly benefit both parties. The loan paid by the respondent was to be paid back through production on the mine.

Production did not happen.

Despite the respondent's breach of the agreement, justice will be met if the parties are returned to their status quo ante.

The appellant did not, either in its grounds or in argument, seek to challenge the application of discretion by the court a quo in applying the principle of equity in these circumstances.

Indeed, in my view, the appellant would have been hard pressed to make such a submission in view of the concession it had made that it had received the money.

It would appear, however, that an order for interest on the sum is not justified.

The respondent accepted, in his evidence, that he was in breach of the agreement between the parties. He did not fulfil his obligations which would have resulted in him occupying the mine and getting his money back.

He thus cannot benefit by being awarded interest in view of the fact that he did not comply with the terms of the agreement.

However, the special circumstance of the respondent justifies the approach by the court a quo.

The respondent's understanding of the English language was so bad that the court felt the need to intervene. It would be a travesty of justice to hold the respondent to the terms of the agreement in circumstances that clearly show that he did not grasp that he was obliged to pay the full amount before he could recover his money. This was in circumstances where the appellant not only retained the profits from the mining operations but also retained the respondent's money.

DISPOSITION

The court a quo did not err in finding that it was just and equitable for the appellant to return the respondent's loan of US$89,000. Indeed, it was clearly accepted by the appellant that it had received the money from the respondent. The court, however, erred in awarding interest on the sum at the prescribed rate when such interest was not justified where the court was applying principles of equity.

The appeal thus succeeds on this point.

With regards to costs, the respondent has successfully defended the appeal in the main and I thus find no reason why costs should not follow the cause.

In the result, it is accordingly ordered as follows:

1. The appeal be and is hereby partially allowed with costs.

2. Paragraph 3 of the judgment of the court a quo be and is hereby set aside and substituted with the following:

“3. Plaintiff's claim, as against the 1st defendant, Big Valley Masters (Private) Limited, in the sum of US$89,000 is allowed.”

View Appeal
HH601-14 : SHI JINWU vs BIG VALLEY MASTERS (PRIVATE) LIMITED and PHILLIMON MUBATA
Ruled By: CHIGUMBA J

Zimbabwe adopted a policy that was dubbed “look east” as a way of combating economic sanctions that were imposed on it by the international community. The “look east” policy encourages a forging of closer business and trade ties with countries in the east as opposed to the west, the traditional former business and trade partners.

When this policy was adopted, a lot of Chinese nationals came to our country in pursuit of business opportunities, especially in the mines and minerals sector. Unfortunately, the language barrier has caused a lot of difficulty in the conclusion of contracts and the implementation of business deals.

The plaintiff is a Chinese national who does not speak English. He relied on the interpretation of a business associate who told him of the terms of the contract that he entered into with a Zimbabwean company called Big Valley Masters (Private) Limited (the first defendant). The company owns gold mining claims in Shurugwi (Sky Rocket Mine 1645). Mr. Phillimon Mubata (second defendant) is a director and shareholder in the first defendant.

The plaintiff issued summons against the defendants on 11 December 2012, claiming payment of USD$89,000 being a sum outstanding in respect of a loan advanced to the defendants, as well as interest thereon at the prescribed rate, and costs of suit.

In his declaration, the plaintiff averred, that, on 13 January 2011 he and the first defendant entered into a written agreement. The first defendant was represented by the second defendant when the agreement was concluded. The terms of the agreement included, among other things, an obligation on the plaintiff's part that he would pay for exploration work at the mine, invest capital and mining equipment, and use the block of claims which constituted Sky Rocket Mine 1645 as surety.

The parties agreed that the block of claims would subsequently be transferred into the name of a new investment company in which they would have equal shares, and which would be exclusively managed by the plaintiff.

The plaintiff averred, further, that, the parties agreed that he would advance a loan in the sum of USD$150,000 to the defendants, subject to repayment on certain conditions, for purposes of discharging pressing debts owed by the first defendant.

On 3 October 2011, the parties entered into a second agreement, in terms of which the defendants allegedly admitted to being indebted to the plaintiff in the sum of USD$89,000 and agreed to repay the loan, while allowing the plaintiff to run the mine.

The plaintiff is aggrieved because none of these undertakings given by the defendants have been honored.

The defendants filed their plea on 15 January 2013.

They did not dispute that the parties had entered into what they called a joint venture agreement relating to gold mining. They averred that the plaintiff breached the terms of the joint venture agreement by failing to provide capital to fund their joint venture, in the agreed sum of USD$150,000.

The second defendant denied that he entered into a loan agreement with the plaintiff, or that he entered into any agreement at all with the plaintiff in his personal capacity. He stated, that, at all times; he dealt with the plaintiff in a representative capacity as a director and shareholder of the first defendant.

In the plea, it was averred that the parties had agreed that any loan sums advanced by the plaintiff would be repaid using the proceeds of production at the mine.

After clearing the loan sums, by offsetting against the proceeds of production, the parties would subsequently enter into a profit sharing agreement.

The defendants averred that the plaintiff breached the agreement by failing to finance production through the agreed USD$150,000, and that this breach caused the collapse of the joint venture.

The defendants averred that the joint venture resulted in loss, which should be borne equally with the plaintiff, as an equal partner in the joint venture.

On 20 May 2013, the defendants filed an amended plea, in which they averred that the terms of the second agreement entered into by the parties were such that the plaintiff was obliged to advance the full USD$150,000, as agreed, before any repayment of that loan could be made.

The averment was that the plaintiff was not entitled to repayment until he paid USD$150,000 to the first defendant in full.

The defendants denied that they prevented the plaintiff from assuming control of the mining operations.

The defendants filed a counterclaim for the payment of USD$61,000 which they alleged was still due and owing to the first defendant in terms of the parties' first agreement.

In his replication to the amended plea and counter claim, dated 22 May 2013, the plaintiff denied being in material breach of the terms of the parties' agreements. In his plea to the counter-claim, he reiterated that the defendants themselves breached the agreement, by refusing to relinquish control of the first defendant's mining operations to him, as agreed.

This matter was referred to trial for the determination of these issues:

1. Whether the plaintiff was obliged to provide USD$150,000 towards the financing of a joint venture agreement.

2. Whether the defendants frustrated the contract and caused the non-fulfillment of its terms and conditions.

3. Whether the defendants breached the contract and caused the plaintiff to cancel it and demand re-payment of the USD$89,000 which he had advanced.

In terms of the joint pre-trial conference minute filed of record, on 29 May 2013, the defendants admitted that they received the sum of USD$89,000 from the plaintiff.

At the trial of the matter, Mr. Shi Jinwu gave evidence and told the court that he met the second defendant in February 2010 at a petrol station. He said that the second defendant told him that he was looking for investors for his mineral claims because he was experiencing financial difficulties, and invited him to form a partnership with him.

The plaintiff said that the second defendant invited him to tour his mining operations. He said that he asked him for a loan of USD$150,000. The loan was to be disbursed in phases. The second defendant offered to give up the certificates to his mining claims as collateral. He offered to let the plaintiff take over the day to day running of the mining activities.

The plaintiff told the court that the parties agreed that if he paid an initial USD$50,000 he would be allowed to take over the mining operations of the first defendant.

He said that he was surprised when the second defendant refused to let him assume control of the mining operations of the first defendant after he had paid the fifty thousand as agreed.

The plaintiff referred to Annexure 'A' to the summons, the agreement which the parties signed on 13 January 2011.

The plaintiff signed on behalf of “Chinese”. The second defendant signed that agreement on behalf of the first defendant. In fact, the plaintiff and second defendant are referred to as representatives.

The plaintiff told the court, that, despite the express terms of the agreement, the defendants refused to let him assume control of the mining operations, and, consequently, he was now seeking re-payment of the USD$89,000 which he had advanced to them.

He referred to a second agreement entered into on 3 October 2011 in which the defendants agreed to let him run the mine for purposes of recovering the USD$89,000 which he had advanced to them.

The plaintiff told the court, that, despite the signature of that second agreement, he was never given a chance to enter the mine.

He said that the defendants never prepared the relevant paperwork towards establishing a tribute agreement. There were no environmental and other requisite mining licenses. The plaintiff said that the second defendant kept on giving him excuses as to why he could not allow him to enter the mine and begin mining operations.

The plaintiff told the court that the spirit of the agreement never materialized.

He decided to cancel the partnership and to get a refund of his USD$89,000.

Finally, the plaintiff told the court, that, in his opinion, the second defendant ought to be bound in his personal capacity because he first knew him in his personal capacity.

During cross examination, the plaintiff told the court that he entered into the agreement with the first defendant in a representative capacity, as a representative of a company which is registered here in Zimbabwe, which he is a director of. He conceded that the name of this company was not part of any of the agreements entered into by the parties.

The plaintiff told the court that the first agreement was drafted by his friend who understands English, and that his friend explained the exigencies of the agreement to him. The plaintiff conceded that due to lack of understanding of the English language, he needed to have the agreements explained to him in Chinese.

He said that he was told of the contents of the agreements before he signed them, so he knew what he was signing for.

He called exhibit 1 a mining partnership agreement.

The plaintiff insisted that the partnership fell apart because he was not allowed to gain entry and to start mining operations.

He denied that the agreement known as exhibit 1 had anything to do with the loan agreement.

The plaintiff told the court that exhibit 1 was never followed that's why the parties entered into a second agreement - which was also never fulfilled.

The plaintiff told the court that the second defendant demanded that he pay USD$100,000 to him before he could allow him to enter and begin mining operations.

The plaintiff could not recall the exact dates when he cancelled the agreements entered into by the parties.

He could not comment on the letter shown to him, of 13 May 2011, from Messrs Danziger & Partners, which letter suggested that the parties had been at cross-purposes from the outset regarding the terms and conditions of their respective agreements.

He was unable to provide a cogent reason why the letter of cancellation did not mention that he had been denied entry to the mine, and suggested that the lawyers possibly misunderstood his instructions because of the language barrier.

The court had no problem following the logic of the plaintiff's evidence.

He was sincere in his belief of the terms of the agreements between the parties as they were explained to him in his language. The court believed that he told the truth as he knew it.

The plaintiff called Ms Hua Ding as his second witness.

She is also a Chinese national currently resident in Zimbabwe and South Africa. She told the court that she and the plaintiff met the second defendant at Gweru service station in December 2010. She was employed by the plaintiff as his assistant at the time. Ms Ding told the court that the second defendant invited them to tour his mining operations in Shurugwi and proposed that he enter into a joint venture agreement with the plaintiff to mine gold. She said that when the parties signed their first agreement, on 13 January 2011, she was not present but she witnessed some of the payments made to the defendants.

Ms Ding told the court that the agreement collapsed because the second defendant frustrated the plaintiff by denying him entry onto the mine site. She said that the second defendant had voluntarily surrendered the registration certificates to the first defendant's mining claims, as collateral against payment in full of the money advanced to the defendants as a loan.

Ms Ding told the court that the second agreement entered into by the parties was prepared by the second defendant.

She denied that the plaintiff breached the terms of this agreement, and insisted that it was the defendants who breached the agreement by failing to allow the plaintiff access to the mining site for purposes of conduction explorations, and to commence mining activities.

During cross-examination, Ms Ding remained steadfast that the plaintiff was denied access to the mine. She was unclear as to the reasons advanced for cancellation of the agreements, but she insisted, that, as far as she knew, the plaintiff was aggrieved when he was denied access to the mine despite clear provisions to the contrary in the two agreements signed by the parties.

Again, the court found this witness to be believable, although she could not shed light on some material aspects of the dispute between the parties. Ms Ding was articulate in English. It's a pity that when some of the material aspects of this matter were taking place she was in South Africa and is unable to assist the court to determine the truth.

The plaintiff's last witness was another Chinese national who is currently resident in Zimbabwe, Mr. Wei Ren.

He told the court that he was the plaintiff's mining manager from 2006 to 2010-2011. He confirmed that he was involved in the signing of the agreement between the plaintiff and the defendants.

Mr. Ren was responsible for structuring the mining partnership agreement.

He confirmed that he personally explained the exigencies of that agreement to the plaintiff, and satisfied himself that the plaintiff had understood the contents, before allowing him to append his signature to the agreement.

Mr. Ren also confirmed that exhibit 10, the second agreement between the parties, had been prepared by the second defendant.

He said that he signed that agreement on the plaintiff's behalf.

Before signing, he had consulted widely with the plaintiff who was in China at the time.

This witness told the court that the second defendant was given a loan by the plaintiff and that, he, in turn, had surrendered the certificates of registration to his mining claims to the plaintiff, as collateral for the repayment of the loan.

Mr. Ren told the court that the partnership collapsed because the second defendant denied the plaintiff access to the mine.

He said that the second defendant kept making excuses, but, at the same time, making requests for money to pay the first defendant's debts, until the plaintiff had disbursed a total sum of USD$89,000 to the defendants.

The witness told the court that the plaintiff lost his confidence in the second defendant because of the numerous lies he was told, and that, consequently, he elected to cancel the agreement of partnership.

He said that the second defendant never gave his permission to the plaintiff to commence mining operations, but, instead, kept on making incessant demands for more money.

Mr. Ren disputed the assertion that it was the plaintiff who breached the agreement between the parties. He insisted that it was the second defendant who failed to hold up his end of the bargain.

During cross examination, Mr. Ren confirmed that the plaintiff understood the entire contents of both agreements.

He told the court that a technical team was denied entry onto the mine after the initial USD$50,000 deposit had been paid. This happened fifteen (15) days after 13 January 2011, when the first agreement was signed.

The witness was unable to give a satisfactory explanation as to why the letter of cancellation of the agreement, dated 13 May 2011, had not mentioned that the plaintiff had been denied entry onto the mine as part of the reasons for cancellation.

When he was pressed, he blamed the legal practitioner for not following the plaintiff's instructions.

When it was suggested to him that the plaintiff's breach of clause 8 of the second agreement was the cause of the failure of the partnership, Mr. Ren denied this strenuously.

The plaintiff then closed its case.

Mr. Phillimon Mubata, the second defendant, testified on behalf of both defendants.

He told the court that it was the plaintiff who approached him and proposed that they enter into a joint venture. He said that this was after the plaintiff had proposed to buy the first defendant's mining claims and he had refused.

The second defendant told the court that the plaintiff was involved in a chrome mining project near to where the first defendant's mining claims were. He said that, contrary to what had been asserted by the plaintiff, the first defendant's legal documents were up to date, and all the requisite mining licenses were in place, and had always been in place.

The second defendant told the court that the parties agreed that a total of USD$150,000 would be paid to the first defendant, with an initial USD$50,000 to be paid, where after the second defendant would go to China with the plaintiff where water purification equipment would be bought, and paid for by the plaintiff, using the balance of USD$100,000.

After that, the parties would mine together using a new company which would be jointly owned.

He said that the parties agreed that the USD$150,000 would be repaid to the plaintiff using the proceeds of their joint mining efforts.

The second defendant told the court that the plaintiff breached the parties' agreement by failing to mount an exploration exercise at the mine. He said that he formed the view that the plaintiff ran out of money and was unable to bring the requisite equipment onto the mine. He also said that the plaintiff failed to bring technical experts onto the mine to conduct viability surveys as agreed.

The second defendant denied that the plaintiff was ever denied access to the mine. He said that at all material times, the plaintiff had personnel from his company present at the mine, taking soil samples, and finishing construction of certain buildings on the mine which they intended to use to accommodate their employees.

The second defendant told the court that the reason why the plaintiff purported to cancel the parties' first agreement was because he had refused to sell the mine to the plaintiff or to transfer the claim registration certificates to him.

On exhibit eleven, the parties' second agreement, the witness told the court that the plaintiff was extensively consulted over the telephone by Mr. Wei, and that he authorized Mr. Wei to sign the agreement on his behalf.

According to the second defendant, part of the problem with this matter is that the plaintiff relied entirely on Mr. Ren's interpretation and understanding of things, and there is a possibility that Mr. Ren could have distorted some things in his interpretation from English to Chinese, because Mr. Ren had ambitions to go into business for himself.

During cross-examination, the second defendant denied that it had ever been the parties' intention that he be personally liable or a party to the agreements in his personal capacity. He denied ever receiving any money in his personal capacity, and insisted that all transactions were done in the name of the first defendant, and that he never bound himself as surety.

Mr. Isaac Mhere testified as the defendant's second witness.

He said that he is employed as a Finance and Administration manager by the first defendant, and that the plaintiff, together with a group of other Chinese investors, came to the mine in January 2011 and asked if they could tour the mine and look at the mining operations.

He knew the plaintiff from the mine next door, so he agreed.

Mr. Mhere asked the second defendant for permission to allow the Chinese investors to tour their mining operations, and permission was granted.

Later, he was involved in the discussions for a joint venture, and present at the signing of the first agreement.

The witness told the court that the plaintiff paid the initial deposit of USD$50,000 in bits and pieces, and not as a lump sum as agreed. He personally receipted the payments. He said that the fifty thousand was not paid by the agreed date; it was paid much later than that.

Mr. Mhere said that the plaintiff was never denied access to the mine. He is in charge of the day to day running of the mine, and, if access was to be denied to the plaintiff, it would have been denied by him because he was in charge at the mine site and the second defendant normally operated from offices in Gweru city.

Mr. Mhere told the court, that, the purpose of the second agreement entered into by the parties was to rescue the first agreement and make it workable.

He said that the plaintiff breached the second agreement by failing to pay USD$61,000 as it stipulated; he failed to form a joint venture company; he failed to bring in equipment; he failed to conduct an exploratory survey; and he failed to provide working capital.

During cross examination, Mr. Mhere was adamant that the plaintiff was allowed access to the mine immediately after the first agreement was signed. He said that daily meetings were held on the site at the mine with the plaintiff's employees. He said the plaintiff was never blocked from coming onto the mine.

The defendant closed its case at this juncture.

The question for determination is a simple one: the Court must decide who is telling the truth between the plaintiff and the second defendant, regarding the question of breach of the parties' respective agreements.

Once the court determines this question, the next matter for consideration will be whether the plaintiff is entitled to be refunded USD$89,000, or whether the defendant is entitled to specific performance, and to payment of USD$61,000.

The law that governs contractual relationships is clear.

In interpreting a contract, a court must determine what the intention of the parties was when they entered into a contract.

In this case, did the parties intend to enter into a joint venture agreement in terms of which the plaintiff loaned one or both the defendants the sum of USD$150,000, or did the parties enter into a mining partnership agreement, in terms of which the plaintiff agreed to loan the partnership USD$150,000 which was to be re-paid from the proceeds of the mining venture?

The evidence shows that the parties had different ideas about their rights and obligations which emanated from both agreements which they entered into.

Were they ever of one mind, or there was never any consensus ad idem?

In researching what the law says on how to interpret the intention of parties to a contract, I came across the following:

In the case of Chikoma v Mukweza 1998 (1) ZLR 541 (SC) the Supreme Court stated that:

“…, the approach that the courts will adopt to the issue of whether a contract is void for vagueness will be to help the parties towards what they both intended rather than obstruct them by legal subtleties and allow one of the parties to escape the consequences of all he has done and all he has intended. The courts will interpret contracts fairly and broadly, without being quick to find defects, following the principle ut res magis valeat quam pereat.”

The court said that:

“Against this scenario, the approach to be adopted to the issue of vagueness must be that expressed by PRICE J in Hoffmann & Carvalho v Minister of Agriculture 1947 (2) SA 855 (T) at 860, namely:

'Where parties intend to conclude a contract, think they have concluded a contract, and proceed to act as if the contract were binding and complete, I think the court ought rather to try to help the parties towards what they both intended rather than obstruct them by legal subtleties and assist one of the parties to escape the consequences of all that he has done and all that he has intended....'”

Not to be overlooked, as well, are the wise words of LORD WRIGHT in Hillas & Co Ltd v Arcos Ltd [1932] All ER Rep 494 (HL) at 503I; (1932) 147 LT 503 (HL) at 514:

“Businessmen often record the most important agreements in crude and summary fashion; modes of expression sufficient and clear to them in the course of their business may appear to those unfamiliar with the business far from complete or precise. It is, accordingly, the duty of the court to construe such documents fairly and broadly, without being too astute or subtle in finding defects; but, on the contrary, the court should seek to apply the old maxim of English Law, verba ita sunt intelligenda ut res magis valeat quam pereat.”

The mutual intention of the parties, at the time of the contract, will govern the court's resolution of a contractual dispute if that intention can be determined and if that intention is lawful.

If possible, the mutual intent of the parties will be determined only from the written terms of the contract. If the language of the contract is clear and definite, that language will determine the mutual intent of the parties.

It is my view that the language of the parties' first agreement is clear.

It was an agreement to co-operate and operate the mine under the auspices of a new company which was to be incorporated and to be jointly-owned and controlled by the parties. The parties intended to conclude a contract. They thought that they had concluded a contract, and proceeded to act as if the contract were binding and complete.

The plaintiff proceeded to pay USD$50,000 in drips and drabs.

The parties went to China to look for water purification equipment. The plaintiff continued to give the first defendant money when requested to do so until he had paid USD$89,000.

There were no defects in the January agreement.

None were found in the second agreement.

The court discharged its duty and construed both documents fairly and broadly, without being too astute or subtle in finding defects. The court concluded, that, in respect of both documents, there was consensus as to the intention of the parties and a meeting of the minds in regards to the parties rights and obligations.

The evidence on record showed that the plaintiff had all the terms of both agreements explained to him, in Chinese, before appending his signature. Both agreements were valid and binding on the parties.

The court believed the evidence of the defendants that the plaintiff did not pay the initial USD$50,000 by 26 January 2011 as agreed. The evidence was that the plaintiff paid the USD$50,000 in drips and drabs and that, by 1 March 2011, the plaintiff had not fulfilled its obligation to form a joint venture company.

The court accepts, that, the plaintiff failed to pay the balance of USD$100,000 to the first defendant by 11 March 2011.

The court finds that the plaintiff breached the terms of the agreement entered into by the parties on 13 January 2011.

The plaintiff's excuse for non-performance of the contract appears to be an allegation of frustration of purpose.

However, the plaintiff's claims that he was not allowed to enter the mine are not supported by the evidence.

The court believed the first defendant's manager, that, the plaintiff had employees on the ground, immediately after the agreement was signed, who could come and go at their leisure on the site, and that the plaintiff even posted a guard at the gate to the mine to safeguard his interests.

That explanation is the most probable; given that the plaintiff was already operating on a neighboring mine; it would be absurd to find that his employees were barred entry onto the defendant's mine when they had previously come and gone without any hiccups.

The plaintiff was never prevented from entering the mine.

It is more probable that the plaintiff failed to raise the initial USD$50,000 tranche of the loan; he failed to register the joint venture company on time; and he failed to pay the USD$100,000 within the stipulated period.

The parties then decided to complicate matters by entering into a second agreement, which was described by the defendants' witness as “an attempt to rescue the first agreement.”

On 3 October 2011, nine months after the first agreement was entered into, the parties agreed to let the plaintiff operate the mine to recover the USD$89,000 that the first defendant had borrowed in terms of the first agreement.

Clause 3 of the second agreement stipulates that the USD$89,000 would be repaid using the proceeds of production from operating the mine.

It was agreed that the plaintiff would be offered a tribute to operate and extract ore from the first defendant's claims, and that if the USD$89,000 was paid in full before the expiry of the tributary period, then, a “percentage share structure” would be drafted by the parties.

It was agreed that the loan balance of USD$61,000 would be paid before the plaintiff could be given access to the mining area.

The author R. H. CHRISTIE, Business Law in Zimbabwe, 2nd ed, 1998…, has the following to say about reciprocal obligations:

“There is a presumption that in every bilateral or synallagmatic contract, i.e. one in which every party undertakes obligations towards the other, the common intention is that neither should be entitled to enforce the contract unless he has performed or is ready to perform his own obligations. Whether this presumption applies and whether the reciprocal obligations are to be performed simultaneously or consecutively are questions of interpretation of the contract.

See ESE Financial Services (Pty) Ltd v Cramer 1975 (2) SA 805 @ 808-9.

In contracts to which this principle of reciprocity applies, a plaintiff who demands performance without himself having performed, or tendered to perform, may be met with the exceptio non adimpleti contractus in the form of a dilatory plea: see BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk 1979 (1) SA 391 (A).

What if, in a contract to which the principle of reciprocity applies, the plaintiff has partly, but not completely, performed?

If the wording of the contract makes it very clear that he has no claim until he has performed in full, the defendant will be entitled to rely on the exceptio: Van Rensburg v Straughan 1914 AD 317.

But, in any other case, an equitable principle comes into play, based on unjust enrichment: see Ambrose and Aitken v Johnson and Fletcher 1917 AD 327 and applied in Grizzel v P & W Erection Co (Pvt) Ltd 1972 (2) RLR 68 (A), 1972 SA 449 378, 1972 RLR 21.”

Clearly USD$61,000 was never paid to the first defendant, so, the plaintiff's excuse for non-performance, that of frustration of purpose, does not apply.

In my view, the plaintiff has brought these proceedings in an effort to anticipate the first defendant's repudiation of the contract.

The terms of the second agreement between the parties were clear.

The plaintiff was to pay USD$61,000 before he could be allowed onto the mining site, or be allowed to commence operations, or be granted a mining tribute.

The plaintiff cannot claim that the first defendant breached the second agreement, which superseded the first agreement, when it was clearly a condition precedent to entry on the mine, that the additional sum of USSD$61,000 be paid first.

Novation means the replacing of an existing obligation by a new one, the existing obligation being thereby extinguished.

It could be argued that the October agreement was a novation of the January agreement.

The January agreement is what is governing the parties reciprocal obligations. The wording of the agreement has no provision for breach.

This means that the equitable principle, which is based on unjust enrichment, comes into play.

It is my view that the plaintiff's breach of both agreements went to the root of the agreements.

He failed to pay the USD$50,000 on time; he failed to register a joint venture company within the agreed period; he failed to bring equipment and capital to the venture; he failed to conduct geological surveys as agreed; he failed to pay USSD$150,000 as agreed.

A reasonable person may conclude that the plaintiff repudiated the parties' agreements.

He clearly does not intend to pay the first defendant the remaining USD$61,000.

He told the court that he has lost confidence in the defendants and no longer wants to work with them.

One of the remedies for breach of contract is cancellation.

I find that the plaintiff repudiated the parties' agreements. The first defendant is entitled to cancel the agreements and claim damages.

It has elected, instead, to counterclaim for payment of USD$61,000.

In my view, such a claim, being one for specific performance, is not sustainable where the other party to the contract has repudiated it.

The parties agreements did not provide any breach clauses. They never applied their minds to what would happen in the event of breach.

I am persuaded that it would be appropriate to utilise the equitable principle in coming to a resolution of this matter.

I hold this view primarily because the court was uneasy with the plaintiff's level of understanding of the terms of both agreements.

The plaintiff is a Chinese national who came to invest in the mining business in this country. He does not understand English. He relied on the services of his employees to explain the terms of the agreements to him.

The evidence before the court is that some of the interpretation of the agreements was not entirely bona fide because Mr. Ren wanted to go into business for himself and could have misled the plaintiff on some material aspects of the contracts between the parties.

The court believed that evidence.

The plaintiff seemed adamant that he ought to have been allowed to commence mining operations. The terms of the October agreement are diametrically opposed to this belief.

Contracts are made by agreement. They can be unmade by agreement, but, they cannot be unilaterally varied or discharged: see Strachan v Lloyd Levy 1923 AD 670, 671.

It has been said that:

“…, waiver is a bilateral transaction and does not result from a unilateral declaration or a decision…,.:” see Alberts v Bryson 1976 (2) RLR 193 (A) 198, 1977 (1) SA 857 860.

A modern interpretation of the equitable principle, one that takes into account the situation that is currently prevailing in our economy, might not favor an insistence that the plaintiff cannot succeed in his claim until he has performed, in full, the terms of the October agreement.

The court can exercise its discretion in the plaintiff's favour, despite his partial performance of the January agreement (by advancing a loan up to USD$89,000), and his non-performance of the October agreement.

In weighing the equities, the court was guided by Ambrose and Aitken v Johnson and Fletcher 1917 AD 327 where it was stated that it is not for the court to remake a contract of the parties.

The first defendant would be unjustly enriched if it were allowed to keep the USD$89,000 advanced to it by the plaintiff.

The doctrine of privity in the common law of contract provides that a contract cannot confer rights or impose obligations arising under it on any person or agent except the parties to it.

Privity is the legal term for a close, mutual, or successive relationship to the same right of property or the power to enforce a promise or warranty: see Coalridge (Private) Limited v Peter Makawu & Mobil Zimbabwe (Private) Limited SC69-04.

It is my considered view that just because the second defendant signed the January agreement as a representative of the first defendant did not mean that he became a party to the agreement.

The evidence before the court was that the mining claim certificates are in the name of the first defendant. It was the first defendant which entered into the January and October agreements with the plaintiff.

Being a juristic person, the first defendant is unable to sign documents; it would have to rely on its director and shareholder, the second defendant, to sign the documents as its officer and on its behalf.

No evidence was led before the court to show that the parties intended that the second defendant be bound as surety with the first defendant for the due performance of its liabilities.

Accordingly, I find that there was no privity between the plaintiff and second defendant, and that there is no evidence of liability against the second defendant.

Having found that the plaintiff was obliged to provide USD$150,000 towards the financing of a joint venture agreement, and that the defendants did not frustrate the contract and cause the non-fulfillment of its terms and conditions, or breach the contract and cause the plaintiff to cancel it, the court finds, nonetheless, that, it would be just and equitable to allow the plaintiff to recover the USD$89,000 which he had advanced to the first defendant.

In the result, it is ordered that:

1. The plaintiff's claim against the second defendant be and is hereby dismissed with costs.

2. The defendant's counterclaim against the plaintiff, for payment of USD$61,000, be and is hereby dismissed with costs.

3. Plaintiff's claim, as against the first defendant, Big Valley Masters (Private) Limited, in the sum of USD$89,000, is allowed, together with interest thereon at the prescribed rate calculated from 11 December 2012 to the date of payment in full.

4. First defendant shall bear the costs of suit.

View Appeal
HMA28-20 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES vs ZIMBABWE REVENUE AUTHORITY and OTHERS
Ruled By: ZISENGWE J

The parties in this application are embroiled in a bitter dispute over the implications of their failure to specifically include Value Added Tax (abbreviated herein as “VAT”) matters in agreements for the milling of sugarcane.

The applicants are both companies duly incorporated in terms of the laws of Zimbabwe whose names over the years have become synonymous with sugar and sugar cane production in Zimbabwe. They grow, source, and mill sugar-cane and market its products. They carry on this agro-based business in and around the Lowveld towns of Triangle and Chiredzi.

The first respondent is the Zimbabwe Revenue Authority (ZIMRA): a statutory body whose chief mandate is to assess, collect, and enforce the payment of all revenues on behalf of the State. It is established in terms of the Revenue Authority Act [Chapter 23:11].

Save for the 10th (Farai Dumo Augustine Musikavanhu) and 11th (Roy Bhila), the rest of the respondents are organisations representing the interests of sugarcane farmers in the Lowveld (Zimbabwe Sugar Cane Development Association, Zimbabwe Cane Farmers Association, Mkwasine Sugar Cane Farmers Trust, Commercial Sugar Cane Farmers Association of Zimbabwe, Hippo Valley Productive Farmers Association, Zimbabwe Sugar Cane Development Association Royal Trust, Chipiwa Mpapa Mill Group and Chiredzi Productive Cane Growers Association).

The 10th (Farai Dumo Augustine Musikavanhu) and 11th (Roy Bhila) respondents are individual sugar cane farmers.

They were probably singled out on account of the positions they hold as Members of Parliament for the Chiredzi South and Chiredzi North constituencies respectively over and above their roles as sugar-cane farmers. They also occupy and serve in specialised Parliamentary capacities.

BACKGROUND

Solely for purposes of convenience and brevity, the second to eleventh respondents (Zimbabwe Sugar Cane Development Association, Zimbabwe Cane Farmers Association, Mkwasine Sugarcane Farmers Trust, Commercial Sugarcane Farmers Association of Zimbabwe, Hippo Valley Productive Farmers Association, Zimbabwe Sugarcane Development Association Royal Trust, Chipiwa Mpapa Mill Group, Chiredzi Productive Cane Growers Association, Farai Dumo Augustine Musikavanhu and Roy Bhila) will be referred to simply as “the farmers” and the first respondent as “ZIMRA”.

It is common cause, that, pursuant to the terms of either of two types of written agreements between them, the farmers supply the sugar cane that they produce to the applicants. These contracts are generally referred to by the parties as the “Cane Milling Agreement” and the “Cane Purchase Agreement.”

Under the former, the basic idea (as is implicit in the name) is that the applicants merely provide a milling service to the farmers. In addition, the applicants also proceed to market, on behalf of the farmers, the sugar and molasses thereby produced as well as other by-products, and, thereafter, remit to the farmers the proceeds thereof after deducting the expenses associated with the milling of the sugarcane and marketing of the sugar and the other by-products.

It is further common cause, that, under the cane milling arrangement, there is an existing agreement that the charge for the milling is calculated according to a pre-determined ratio referred to as the “Division of Proceeds” (DoP) ratio. This ratio currently stands at 23 percent of the proceeds which the applicants retain in the wake of the marketing of the products of the milling process. The farmer gets the remainder.

The Cane Purchase Agreement operates differently.

According to the parties, this agreement involves a direct and complete sale of the sugar cane by the farmers to the applicants with risk and benefits passing to the latter upon the delivery of the cane.

During oral submissions in court, counsel for the applicants referred to a rather convoluted method by which the purchase price of the cane is computed under this arrangement; suffice it to say that there is no convergence as among the parties as to whether the supplies of cane that gave rise to the current dispute constitute a Cane Milling Agreement or a Cane Purchase Agreement.

Be that as it may, it is common cause, that, in a decision (which has since been appealed against to the Fiscal Appeals Court), the first respondent determined that the set-up which currently obtains, chiefly characterised by the distribution of proceeds arrangement, constitutes one which attracts value added tax (VAT).

Therein lies the genesis of the dispute.

This is because the simple question to be answered is whether the 23 percent retained by the applicants, post the milling and marketing, incorporates value added tax (VAT) (as contended by the farmers) or it does not (as maintained by the applicants).

It is further common cause that the Zimbabwe Revenue Authority (ZIMRA), having made the decision that the aforementioned arrangement was one that attracts value added tax (VAT) in terms of the law, and that the applicants were therefore legally obligated to have, all along, charged and collected from the consumers (i.e. the farmers) and remitted the amounts so collected to it, directed that the said amounts be paid to it.

In compliance with that decision, the applicants aver, that, they have since calculated the outstanding amounts in this regard and remitted the same to the first respondent.

Through the current application, the applicants seek;

(i) A declaratory order to the effect that they are legally entitled to recover from the farmers the value added tax (VAT) which they have since paid to the first respondent; and

(ii) Secondly, that they are legally entitled to continue charging and collecting value added tax (VAT) from the farmers over and above the 23 percent milling charge.

The applicants also take exception to the fact that the first respondent (through some of its officials) took it upon itself to render certain advice to the farmers which advice they contend amounts to an unwarranted interference in matters that are purely contractual.

Part of that advice related to the first respondent's interpretation of the tax implications of the failure to include value added tax (VAT) matters in the cane supply agreements.

The terms of the declaratur sought by the applicants are captured in the draft order annexed to the application which reads:

“Wherefore, after reading papers filed of record and hearing counsel, IT IS ORDERED THAT:

1. The application succeeds with costs.

2. It be and is hereby declared that -

(a) The conduct by the first respondent to give advice to the applicants and the second to eleventh respondents on what are purely contractual matters is ultra vires its functions and responsibilities as an administrative authority and therefore unlawful.

(b) To the extent that they are liable to pay VAT for milling costs, the applicants are entitled to charge, levy, and collect such VAT in accordance with the VAT Act on and in addition to the value for the milling charge.

3. The first respondent be and is hereby ordered and directed to refrain from gratuitously interfering in pricing and contractual issues between the applicants and the second to eleventh respondents.

4. The respondents shall, jointly and severally, the one paying the others to be absolved, pay the applicants costs of suit on an attorney–client scale.”

The applicants raised a number of arguments in support of their contention that they should be permitted to recover that which they have since paid to the Zimbabwe Revenue Authority (ZIMRA) in the wake of the latter's aforementioned determination.

The main thrust of their argument, as I see it, however, is that the very fact that the Act makes it clear that the burden to pay the tax in question rests on the consumers, who in this case are the farmers, yet it was them (applicants) who were compelled to pay it, necessarily implies that they can recover the same from the farmers.

Reliance was placed, inter alia, on the elucidation by GOWORA JA, of the tripartite relationship in the value added tax (VAT) equation. This was in the case of ZIMRA v Packers International (Private) Limited SC28-16 where the following exposition was made:

“The system of collection of VAT, as embodied in the VAT Act, involves the imposition of tax at each step along the chain of manufacture of goods or the provision of services subject to VAT;”

And further that:

“…, tax under the VAT Act consists of monies that have been taxed on goods and services paid by consumers for onward transmission to the Commissioner. All that is required of an operator is to calculate the amount so paid, submit a return, and make payment.”

Flowing from this basic premise, according to the applicants, are two applicable precepts that emanate therefrom, namely, unjust enrichment and equity.

The latter, though not specifically pleaded in their papers, was nevertheless amply canvassed during the oral submissions in court.

Regarding unjust enrichment, it was averred, that, should the court not find in the applicants favour, an injustice will ensue in that the respondents will have been unjustly enriched at their expense.

For the requirements and application of the principle of unjust enrichment, the following cases were cited as authority; Industrial Equity v Walker 1996 (1) ZLR 269 (H); Chioza A.M. v Siziba S.W. SC04-15; and Trojan Nickel Mine Ltd v Reserve Bank of Zimbabwe HH169-13.

It was contended, that, the facts of this case point to the fact that all the pre-requisites for a finding for the applicant on the basis of unjust enrichment have been met.

The nub of the equity argument is that justice and fairness simply demand that the applicants be allowed to recoup from the farmers that which they paid to the Zimbabwe Revenue Authority (ZIMRA) in compliance with the latter's determination.

It is clear that this is merely an extension or adjunct of the unjust enrichment contention.

The applicants further referred to various sections of the Act which, in their view, fortify their position. Reliance was placed in this regard to section 9(2) which provides as follows:

“The value placed on any supply of goods or services shall, save as is otherwise provided in this section, be the value of the consideration for such supply, as determined in accordance with subsection 3, less so much of such value as represents tax: Provided that -

(a)…,.;

(b) Where the portion of the value of the said consideration which represents tax is not accounted for separately by the registered operator, the said portion shall be deemed to be an amount equal to the tax fraction of that consideration.”

Similarly, reliance was placed on section 9(5) of the Act which provides:

“Where goods or services are deemed to be supplied by a registered operator in terms of subsection (2) or (8) of section 7, the supply shall be deemed to be made for a consideration in money equal to the lesser of -

(a) The cost to the registered operator of the acquisition, manufacture, assembly, construction, or production of goods or services, including -

(i) Any tax charged in respect of the supply to the registered operator of such goods or services or of any components, materials, or services utilised by him in such manufacture, assembly, construction or production;

(ii) Where such goods or any right referred to in subsection (2) of section seven, when held by the registered operator, constituted trading stock as defined in section 2 of the Taxes Act, any further costs, including tax incurred by him in respect of such goods or right;

(iii) Any costs, including tax, incurred by the registered operator in respect of the transportation or delivery of such goods or the provision of such services in connection with the transfer of such goods or the provision of such services as contemplated in subsection (8) of section seven; and

(iv) Where such goods or services were acquired under a supply in respect of which the consideration in money was in terms of subsection (4) of this section deemed to be the open market value of the supply or would in terms of that provision have been deemed to be the open market value of the supply were it not for the fact that the recipient would have been entitled under subsection (3) of section fifteen to make a deduction of the full amount of tax in respect of that supply, such open market value to the extent that it exceeds the consideration in money for that supply: or

(b) The open market value of such supply.”

THE POSITION OF THE RESPONDENTS

The third (Zimbabwe Cane Farmers Association) and fourth (Mkwasine Sugar Cane Farmers Trust) respondents did not ultimately participate in the proceedings on account of the fact that the former did not file any opposing papers and the latter filed its heads of argument outside the prescribed time and was therefore barred.

In a similar vein, there was no appearance by or on behalf of the sixth (Hippo Valley Productive Farmers Association), ninth (Chiredzi Productive Cane Growers Association) and eleventh (Roy Bhila) respondents on the day of the hearing.

Effectively, therefore, only the positions of the first (Zimbabwe Revenue Authority), second (Zimbabwe Sugar Cane Development Association), fifth (Commercial Sugar Cane Farmers Association of Zimbabwe), seventh (Zimbabwe Sugar Cane Development Association Royal Trust), eighth (Chipiwa Mpapa Mill Group), and tenth (Farai Dumo Augustine Musikavanhu) respondents were before the court.

ZIMBABWE REVENUE AUTHORITY's POSITION (ZIMRA)

Regarding the implications of the failure by the applicants and the farmers to specifically incorporate value added tax (VAT) matters in their Division of Proceeds (DoP) arrangements, ZIMRA articulated two distinct positions, namely;

(i) That which relates to past supplies of cane; and

(ii) That which attends to present and future supplies of cane.

In respect of past supplies of sugarcane, the Zimbabwe Revenue Authority (ZIMRA) averred that a proper construction of section 69 of the Value Added Tax Act shows, that, in the absence of the express mention of value added tax (VAT) component in any price for goods or services, then the price will be deemed to contain the said tax.

As far as the alleged impropriety of the advice it rendered to the farmers, it contended that whatever advice it gave to the farmers was not only within its legal powers to give but also that it did so at the behest of the applicants.

It further averred, that, it has a duty to provide education to taxpayers not only to impart knowledge of the same but also to inculcate and engender a spirit of compliance.

First (ZIMRA) respondent's position on VAT implications for present and future supplies of cane

In its papers opposing this application, the Zimbabwe Revenue Authority (ZIMRA) does not commit itself on what the tax implications in respect of present and future supplies are. It opted, instead, to confine itself to the question of past supplies.

However, it soon became apparent that its position is that the applicants are not only at liberty to charge, levy, and collect from the farmers the said tax, but that they are in fact obligated to do so.

It suffices, however, to note that this does not address the issue of whether this will be over and above the 23 percent being charged for the milling of the cane.

THE FARMERS POSITION

As earlier stated, only the positions of the second (Zimbabwe Sugar Cane Development Association), fifth (Commercial Sugar Cane Farmers Association of Zimbabwe), seventh (Zimbabwe Sugar Cane Development Association Royal Trust), eighth (Chipiwa Mpapa Mill Group), and tenth (Farai Dumo Augustine Musikavanhu) respondents were effectively before court.

Save for a few instances of divergence (which will be highlighted below) the farmers were united not only in their resistance to the application but also on the grounds thereof.

The rallying point in their opposition to the quest by the applicants to recover the tax for past supplies was section 69 of the Value Added Tax Act. Their position essentially mirrors that of the Zimbabwe Revenue Authority (ZIMRA).

Over and above the import of section 69 of the Value Added Tax Act, however, a few additional arguments were presented to buttress their position and these are:

1. The very fact that the Zimbabwe Revenue Authority (ZIMRA) has determined that the 23 percent milling charge includes value added tax (VAT) as far as the second (Zimbabwe Sugar Cane Development Association), eighth (Chipiwa Mpapa Mill Group) and tenth (Farai Dumo Augustine Musikavanhu) respondents are concerned, is dispositive of the whole dispute.

They go as far as contending that the decision of ZIMRA is binding.

They further assert, that, in their view, the applicants have merely abdicated from their responsibility to remit the value added tax (VAT) so collected to ZIMRA and the consequences attendant thereto cannot be visited on them.

2. That the endeavour, on the part of the applicants, to recover the value added tax (VAT) they paid from them amounts to an attempt to vary the implied terms of their contract.

3. That, as far as the fifth (Commercial Sugar Cane Farmers Association of Zimbabwe) respondent is concerned, its cane supply arrangement with the applicants is governed by neither a cane milling agreement nor a cane purchase agreement, but, rather, by what it terms a “memorandum of understanding.” A copy of which was attached.

4. A further point raised by the fifth respondent (Commercial Sugar Cane Farmers Association of Zimbabwe) was that the very fact that invoices relating to disbursements of the individual farmer's share of proceeds is silent on the collection of value added tax (VAT) necessarily implies that VAT was included in the 23 percent milling charge.

During oral addresses in court, yet another argument was presented, namely, that, the Division of Proceeds (DoP) ratio was decided upon by the Minister responsible for the superintendence of the sugar sector, namely, the Minister of Industry and Commerce.

It was averred, in this regard, that, during the negotiations leading up to those figures (of 23 percent and 77 percent) it was in the contemplation of the parties that value added tax (VAT) was incorporated in the 23 percent milling charge.

In apparent departure from the positions held by the other respondents, the seventh respondent (Zimbabwe Sugar Cane Development Association Royal Trust) maintained that section 69 of the Value Added Tax Act applies to all supplies of cane; past, present, and future.

THE ISSUES

In my view, there are two broad issues up for determination in this dispute, and, from each, two sub-questions arise. The two broad questions are:

(1) Whether the 23 percent cane milling charge includes or excludes value added tax (VAT); and

(2) Whether there has been an unjustifiable interference by the first respondent the Zimbabwe Revenue Authority (ZIMRA) in purely contractual matters between the applicants and the farmers.

The sub-questions in respect of (1) above are:

(a) Whether or not the applicants are entitled to recover from the farmers value added tax (VAT) which they (i.e. applicants) paid to ZIMRA for past supplies; and

(b) Whether or not the applicants are entitled to charge, levy, and collect from the farmers value added tax (VAT) over and above the 23 percent milling charge.

The sub-questions from (2) above are:

(a) Whether the applicants have satisfied the requirements for the declaratur sought in paragraph 2(a) of the draft order; and

(b) Whether the applicants have satisfied the requirements for the interdict sought in paragraph 3 of the draft order.

WHETHER THE 23% CANE MILLING CHARGE INCLUDES OR EXCLUDES VALUE ADDED TAX (VAT)

This is arguably the most significant question as it lies at the very heart of the dispute.

As indicated above, the applicants used various arguments in support of their contention that the 23 percent milling charge must be taken as excluding value added tax (VAT).

They relied, inter alia, on subsections 2 and 5 of section 9 of the Value Added Tax Act.

I however fail to see how section 9(2)(b) of the Value Added Tax Act assists the applicants.

Section 9 of the Value Added Tax Act, in general, is aimed at the determination of the value of supply of goods or services. Paragraph 2(b), in particular, is a proviso to the general provision that the value to be placed on any supply of goods or services is the value of the consideration.

This proviso however addresses a situation where the registered operator neglects to separately account for the value of the consideration which represents tax in which case it will be deemed to be the tax fraction of the consideration.

Implicit in this proviso is that the tax fraction is to be calculated from that consideration: not in addition to the consideration. A fraction of something is a piece, part, portion, or component of something. Put in context, therefore, the tax fraction is incorporated in not excluded from or to be added to the 23 percent milling charge which is the consideration.

Sub-section (5) of section 9 of the Value Added Tax Act equally does not avail the applicants.

It is simply a method aimed at assisting in the computation of the consideration of the supply of the goods or services in question in instances of “deemed supply”. The basic idea being that this involves a calculation of all the expenses incurred in or attendant to the acquisition of the goods or services (or any lesser amount) or simply the open market value of such supply.

Needless to say that this provision does not even come close to unlocking the current legal logjam, let alone assist the applicants....,.

UNJUST ENRICHMENT

The applicants averred, that, if they are not permitted to recoup that which they have since paid to the Zimbabwe Revenue Authority (ZIMRA) by way of value added tax (VAT) emanating from past supplies of cane, then, the farmers would have been unjustly enriched at their (applicants) expense. This is because the ultimate responsibility to pay value added tax (VAT) rests on the farmers who are the consumers of the milling service.

All things being equal, this argument would perhaps have carried the day for the applicants had it been established, one way or the other, that, the 23 percent milling charge does not include value added tax (VAT).

What has to be established, first, is whether or not it does.

It is only after that determination that one can legitimately argue that placing the burden on the applicants to foot this tax when the milling charge did not include tax as amounting to unjustly enriching the farmers at the applicants expense, or, conversely, that, permitting the applicants to recoup from the farmers what they (applicants) have since paid to ZIMRA when it is established that the 23 percent actually incorporated the tax can one argue the applicants as having been unjustly enriched at the expense of the farmers.

EQUITY

Counsel for the applicants made an impassioned plea for the court, in the name of equity, to find that the applicants are entitled to recoup the value added tax (VAT) in question which they have already paid.

In Sanudi Masudi v David Jera HH67-07 MAKARAU JP…, made short shrift of an argument based entirely on equity (a position I adopt in casu) she had this to say:

“That argument would have won the day were we a court of equity. We are but a court of law, and, as correctly advanced by both counsel, we are to be restricted by the pleadings filed by the parties to establish the cause of action that was before the trial court and the defense that was raised to meet that cause of action.”

Although the circumstances of that case were admittedly different from the present one, the fact remains, that, the court is confined to an application of the letter of the law to the facts and not necessarily the parties subjective views of what is right or wrong....,.

The real issue as I see it, lies in the interpretation of sections 69 and 72 of the Value Added Tax Act and their application to the facts of this matter....,.

REGARDING PAST SUPPLIES OF CANE

As indicated earlier, in this regard, the Zimbabwe Revenue Authority (ZIMRA) relied almost exclusively on the provisions of section 69 of the Value Added Tax Act (and the farmers adopt a similar stance) which provides as follows:

“69 Prices deemed to include tax

(1) Any price charged by the registered operator in respect of any taxable supply of goods or services, shall, for the purposes of this Act, be deemed to include any tax payable in terms of paragraph (a) of subsection (1) of section six in respect of such supply, whether or not the registered operator has included tax in such price.”

According to ZIMRA, the significance of this section is that where the price/charge (which, in this case, the milling price which is pegged at 23 percent of the value of the proceeds from the cane) is silent on the value added tax (VAT) component thereof, it is deemed, ex lege that VAT is included in that price.

Put in perspective, therefore, according to the first respondent, the Zimbabwe Revenue Authority (ZIMRA), it is deemed that the consumer of the goods or service (in this case the farmer) has already paid value added tax (VAT) in that price, and, by logical extension, all the registered operator (in this case the applicants) needs to do is to remit it to ZIMRA.

Any purported attempt to recover the same from the consumer is untenable because that would not only amount to taxing the consumer twice but also runs contrary to the tenor and spirit of that section.

The Zimbabwe Revenue Authority (ZIMRA) further contended, that, doing so would inevitably lead to a fresh computation of the value added tax (VAT) payable because the one calculated and subsequently paid by the applicants was on the basis of section 69 of the Value Added Tax Act.

In a nutshell, accepting the position adopted by the applicants would yield higher figures for the value added tax (VAT) payable.

The applicants took a contrary view and argued;

(i) Firstly, that there is no need to resort to the deeming provision of any legislation when in fact the issue in question is adequately provided for elsewhere in that Act.

This is because, so the argument goes, it should only be resorted to in instances of omission on the part of a party with the duty to comply with a statutory obligation.

(ii) Secondly, they contended that section 69 of the Value Added Tax Act only serves to remove as a potential defence in situations such as the present when ZIMRA demands from it the value added tax (VAT) component of any price where same is not expressly stated therein.

However, according to them, it offers no sanctuary to a consumer when the registered operator now seeks to recover from him (i.e. consumer) that which they paid pursuant to ZIMRA's decision.

In my view, the position adopted by the applicants cannot be sustained.

Firstly section 9(2) and section 9(5) of the Value Added Tax Act, which they relied on, have already been found to be of no application to the current dispute.

Secondly, the plain and literal meaning of the section suggests that it is irrelevant whether or not the registered operator has in fact charged the tax in question; where the price does not reflect the tax component thereof it is presumed that the tax is incorporated in that price.

In other words, the phrase “whether or not the registered operator has included tax in such price” operates a twin blow to the registered operator: it serves to estop him from denying that the price in reality did not include tax in a bid to avoid accounting for the tax to the Commissioner. At the same time, it precludes him from purporting to claim from the consumer the tax that he may or may not have collected from the consumer.

The question of who bears the obligation under the Value Added Tax Act to pay the tax (who is obviously the consumer), which the applicants expended so much effort on, is hardly the issue.

To contend that section 69 of the Value Added Tax Act should be construed so as to permit the registered operator to pursue the consumer for the recovery of the tax they paid to the Zimbabwe Revenue Authority (ZIMRA) would, in my view, run contrary to the clear intention of the legislature.

The legislature must obviously have been alive to the fact, that, in most day to day supply of goods and services, the customer disappears without trace soon after the transaction.

How then would the registered operator be able to recoup the tax that he claims he did not in fact charge and collect?

Even if the customer could be traced, there would be an unnecessary proliferation of disputes between him and the registered operator as to whether the price included value added tax (VAT) or not.

It would create unnecessary uncertainty and confusion in the market place where the consumer will never know whether or not the price charged includes value added tax (VAT) and where he always runs the risk of being informed ex post facto that the price he paid actually did not include tax.

If the applicants are permitted to recover the tax in question from the farmers then the deeming provision will be rendered nugatory. It would mean the price cannot then be deemed to include tax - it is as simple as that.

Further, related to the above, the deeming provision cannot be interpreted to mean two different things to two different people.

The interpretation that the applicants want to foist on section 69 of the Value Added Tax Act will result in a mathematical or accounting incongruence and an absurdity in logic.

The Zimbabwe Revenue Authority (ZIMRA), in its papers, vividly illustrate the mathematical inconsistency that will arise when they juxtapose the outcomes of the two contrasting positions using the hypothetical figure of $1,000 as proceeds for the sale of sugar thus:

(a) Where section 69 of the Value Added Tax Act is invoked

Proceeds from sale of sugar = $1,000
Price for milling services at 23% of the proceeds = ($1,000 x 23%) = $230
VAT due after deeming that that price includes VAT = ($230 x 15/115) = $30

(b) Where the applicants recover the section 69 ($30) VAT from the farmers

Proceeds from sale of sugar = $1,000
Price for milling services at 23% of the proceeds = ($1,000 x 23%) = $230
VAT due after deeming that that price includes VAT = ($230 x 15/115) = $30
VAT due after the applicants recover the $30 VAT from the farmers = 15% ($230-30+30) = $34.50

What the applicants are moving the court to accept will also yield a further absurd result in the following context:

Where, from the standpoint of the first respondent, the Zimbabwe Revenue Authority (ZIMRA), vis a vis the applicants, value added tax (VAT) is deemed to be included in the price; yet, from the standpoint of the applicants vis-a-vis the farmer, the price is deemed not to include the tax.

It could never have been the intention of the legislature to produce such an absurd or anomalous situation.

The net result of the interpretation should be uniform, consistent, and certain not only to the parties but also to other persons similarly situated.

Section 69 of the Value Added Tax Act effectively places the registered operator on guard on the consequences of his failure to specifically include in his price the value added tax (VAT) component thereof.

Viewed differently, it is the responsibility of the registered operator to ensure that value added tax (VAT) matters are addressed in his dealings with the consumer. It is not a responsibility that the registered operator jointly shares with the consumer because the duty to account to the Commissioner ultimately rests with him (i.e. Registered Operator).

There can never be a conflation of the roles, duties, and responsibilities among the various parties: the burden to pay the tax lies with the consumer (the farmer), the duty to charge, collect, and remit the tax lies with the registered operator (the applicants).

In the context of this case, whether occasioned by inadvertence, oversight, or a mis-interpretation of the nature of the contract, the consequences of the failure to specifically include the value added tax (VAT) are that VAT is deemed included in the milling price.

During the proceedings, resort was made by the applicants to section 72(1) of the Value Added Tax Act which provides as follows:

“72 Contract price or consideration may be varied according to rate of value-added tax

(1) Whenever the value added tax is imposed or increased in respect of any supply of goods or services in relation to which any agreement was entered into by the acceptance of an offer made before the tax was imposed or increased, as the case may be, the registered operator may, unless agreed to the contrary in any agreement in writing and notwithstanding anything to the contrary contained in any law, recover from the recipient, as an addition to the amounts payable by the recipient to the registered operator, a sum equal to any amount payable by the registered operator by way of the said tax or increase, as the case may be, and any amount so recoverable by the registered operator shall, whether it is recovered or not, be accounted for by the registered operator under this Act as part of the consideration in respect of the said supply.”

In my view, this provision is meant to address the adjustments that may have to be made in contractual situations wherein, at the time the offer was made, there was no value added tax (VAT) imposable on that contract or it stood at a certain level; however, by the time the acceptance is made, that type of contract, by operation of the law, now attracts VAT or had been increased.

The imposition of or the increase in the value added tax (VAT) was not in the contemplation of the parties thereby necessitating an adjustment in the price.

This provision is clearly not applicable to the current dispute.

There was no imposition of a “new” tax which hitherto did not exist, nor was there an increase of the value added tax (VAT) chargeable and payable.

The parties merely failed to take into account a tax which was already in existence.

PRESENT AND FUTURE SUPPLIES OF CANE

Therefore, against the backdrop of a finding that the parties (whether through inadvertence, oversight, or mis-apprehension) failed to address value added tax (VAT) matters in their contracts, one cannot legitimately vouch for the perpetuation of the status quo.

It behoves the parties to re-negotiate or clarify the terms of their contract to plug that lacuna.

It suffices to state, that, failure to do so may very well result in section 69 of the Value Added Tax Act being continuously invoked.

I did not get the impression from the concession made on behalf of the second (Zimbabwe Sugar Cane Development Association), eighth (Chipiwa Mpapa Mill Group) and tenth (Farai Dumo Augustine Musikavanhu) respondents that they are necessarily agreeable to the charging of value added tax (VAT) by the applicants over and above the 23 percent milling charge.

What I gathered was a concession merely that the applicants can charge, levy, and collect value added tax (VAT) from the farmers in compliance with the requirements of the Value Added Tax Act....,.

1....,.

2. The application for a declaratur, as sought in paragraph 2(b) of the draft order, as it relates to past supplies of sugar cane, be and is hereby dismissed.

3. In respect of present and future supplies of sugar cane, it is hereby ordered that the applicants and the 2nd-11th respondents are at liberty to re-negotiate and/or clarify the terms of their contracts to specifically incorporate value added tax (VAT) issues and proceed on that basis.

View Appeal
HH534-18 : RIOZIM (PVT) LTD vs TRUST BANK CORPORATION LTD (IN LIQUIDATION)
Ruled By: KWENDA J

This is application made in terms of section 213 of the Companies Act [Chapter 24:03] for leave to institute proceedings against the respondent, a company in liquidation.

Should leave be granted, the applicant intends to file an application in terms of Rule 449 of the High Court Rules 1971, for correction of a default judgment entered against it in favour of the respondent on 12 March 2014 (the respondent was placed under provisional liquidation on 8 October 2014).

A draft of the application to be filed once the anticipated leave be granted was submitted with the applicant's papers.

The application, should leave be granted, will be a second bite since an earlier attempt, in the year 2015, succeeded initially but collapsed on appeal in the Supreme Court on 26 January 2018.

At the hearing, I complained that the applicant's case was difficult to follow.

The founding affidavit is unnecessarily long and winding. It contains information largely irrelevant. The error necessitating the intervention of the court, in terms of Rule 449, is not clearly decipherable since it is not correctly articulated.

The impression created in the applicant's founding affidavit, as read with the prayer in the application to be filed, is that the judgment debt was overstated because the respondent applied an inflated rate of interest of 45 percent per annum as opposed to 15 percent per annum: see paragraph 7 of the applicant's founding affidavit and the draft order at page 89 of 1 case No. HC1405/13 of the consolidated papers.

However, that position cannot be reconciled with the applicant's assertion in an earlier case that the correct rate of interest is 25% per annum.

At the hearing, a lot of energy and time was expended on extracting from the huge mass of documents submitted with the application what it is that the applicant says went wrong in case No. HC1405/13 which needs correction by this Court.

After lengthy deliberations, it turned out the applicant's case could be stated clearly and concisely.

I will summarise it below:

On 7 May 2015, the applicant filed an application for the variation of the default judgment. The application was filed and prosecuted without the leave of this court notwithstanding the provisional order for liquidation.

In addition to that, the applicant failed to cite the Deposit Protection Corporation despite its direct and substantial interest as liquidator: Final liquidation was confirmed by this Court on 19 May 2016 whereupon the Deposit Protection Corporation was appointed liquidator.

Be that as it may, the application succeeded and the judgment in case HC1405/13 was rescinded on 27 May 2015.

Subsequently, the Deposit Protection Corporation approached the court, in terms of Rule 449(1) for rescission of judgment on the grounds that the applicant had erred in failing to cite it in the case yet it was clearly an interested party.

This court granted the application and rescinded the judgment in case No. HC4155/15.

The effect of the rescission of judgment was that the original court order in case no. HC1405/13 entered against the applicant for the payment to the respondent of $1,824,505=05 popped up again and became operational: prior to provisional liquidation, on 12 March 2014, this Court had entered default judgment against the applicant in favour of the respondent for the payment of $1,824,505=05.

In his reasons for the judgment, the Honourable CHIWESHE JP, in case no. HH390-17 (HC4203/16) observed as follows:

(a) The failure by the applicant to obtain leave of the court before instituting proceedings against the respondent in case no. HC4155/15 was fatal.

(b) Section 213 of the Companies Act [Chapter 24:03] is peremptory and proceedings instituted against the respondent, without leave of the Court, and the resultant court order, were a nullity.

(c) In addition to being liquidator, the Deposit Protection Corporation is an interested party by operation of section 57 of the Banking Act, and failure to cite it in proceedings against the respondent, which is under liquidation, rendered such proceedings fatally defective.

The applicant's appeal to the Supreme Court against the judgment of the Honourable Judge President was dismissed on 26 January 2018 meaning that the default judgment in case No. HC1405/13 remains extant.

The applicant is still aggrieved by the judgment in case No. HC1405/13 and wants it corrected in terms of Rule 449(1).

However, it can only file its application with leave of this Court.

It is alleged, that, when the respondent applied for judgment in case No. HC1405/13 it did not disclose to this court that the applicant had made payments to the respondent after summons had been issued thereby reducing the debt by $1,381,166.

The argument, therefore, is that when judgment was entered, on 12 March 2014, the correct amount owing was around $500,000 and not $1,824,505=05 and the respondent had the obligation to advise the court of the payments.

In other words, the complaint is not about the interest rate applied, but an act of non-disclosure by the respondent of payments effected subsequent to the summons.

After hearing both counsel, I concluded that this application for leave is without merit. My reasons are as follows:

1. The intended application to correct judgment has no prospects of success at all.

2. The alleged payments are said to have been made after judgment had been entered. I will quote paragraph 7 of the founding affidavit…, of the application:

“…, respondent caused a writ in the sum of $1,824,505=05 to be issued against the applicant. This is an incorrect balance as applicant had made subsequent payments of $1,381,166.”

The applicant's complaint, therefore, is not against the judgment but the writ.

If the applicant made certain payments after judgment, it is the writ that requires correction and not the judgment.

In practice, when payments are made after judgment has been entered, the judgment needs no correction but the judgment creditor simply issues a writ for a lesser amount, or, if the writ has already been issued, instructs the Sheriff to collect a lesser amount.

If the judgment creditor collects more than necessary, that can only give rise to an enrichment claim.

HH169-13 : TROJAN NICKEL MINE LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MATHONSI J

It is WALLIS JA, with HARMS AJ, VAN HEERDEN JA, MALAN JA and PETSE AJA all concurring who waxed lyrical in Executive Officer of the Financial Services Board v Dynamic Wealth Ltd Ors 2012 (1) SA 543 when he said:“Ever since the bursting of the South Sea Bubble ...

It is WALLIS JA, with HARMS AJ, VAN HEERDEN JA, MALAN JA and PETSE AJA all concurring who waxed lyrical in Executive Officer of the Financial Services Board v Dynamic Wealth Ltd & Ors 2012 (1) SA 543 when he said:

“Ever since the bursting of the South Sea Bubble in 1720, governments have recognised the need, in the interests of the investing public, for regulation of the financial services industry.”

The plaintiff, a public company registered in Zimbabwe sued the defendant for payment of US$1,007,541=30 together with interest at the prescribed rate and costs of suit, being the plaintiff's money allegedly appropriated by the defendant from the plaintiff's bank in pursuance of a Monetary Policy Statement issued in terms of section 46 of the Reserve Bank Act [Chapter 22:15] (“the Act”) and a directive issued to banks in terms of section 35(1) of the Exchange Control Regulations, Statutory Instrument 109/96, SI109/1996.

The defendant is established in terms of section 4 of the Reserve Bank Act [Chapter 22:15] and is charged with, inter alia, the regulation of Zimbabwe's monetary system, the supervision of banking institutions, and the smooth operation of the payment system as well as acting as banker and financial advisor to, and fiscal agent of, the State.

It is salutary that the defendant performs these functions in order to regulate banking and protect the banking public.

In the discharge of its duties aforesaid, the defendant issued a Monetary Policy statement, on 1 October 2007, centralising all foreign currency accounts and directing the lodgement, at its doorsteps, of all corporate foreign currency balances held by authorised dealers.

One such authorised dealer is Banc ABC where the plaintiff maintained a foreign currency account.

In compliance with the monetary policy, and a subsequent directive issued by the defendant, Banc ABC lodged the plaintiff's foreign currency balance with the defendant.

That is the last time the plaintiff saw the money, as the defendant did not return it to Banc ABC as a result of which the plaintiff was unable to access that money.

The plaintiff then sued the defendant aforesaid seeking to recover the money but the defendant contested the action averring, in its plea, that, there was no causal nexus between the parties given that the plaintiff and the defendant did not enjoy any banking relationship and that the plaintiff should have proceeded against its Bank, that is Banc ABC, and not against the defendant.

At the pre-trial conference, the parties agreed on the issues for trial as:

“1.1. Whether or not the plaintiff has a cause of action against the defendant.

1.2. Whether or not the defendant is obliged to pay the amount claimed or any amount at all.”

When the matter initially came before me for trial, the parties were of the view that the facts were generally common cause. They then requested the deferment of the hearing to enable them, firstly, to agree on the facts, prepare and file a Statement of Agreed Facts as well as heads of argument.

In due course this was done, and the Statement of Agreed Facts signed and filed by the parties reads:

“1. The plaintiff is Trojan Nickel Mine Limited, a public company registered in accordance with the laws of Zimbabwe.

2. The defendant is the Reserve Bank of Zimbabwe. It is established in terms of the Reserve Bank of Zimbabwe Act [Cap 22:45] (“the Act”) with the power, amongst other things, to regulate the banking sector.

3. The plaintiff, at all material times, maintained a foreign currency account number ZWTROJ001CALUS0019 domiciled at Banc ABC, formerly the African Banking Corporation.

4. On 1 October 2007, the Governor of the defendant, Dr G. Gono, issued a Monetary Policy Statement in terms of section 46 of the Act. The Monetary Policy Statement provided, in pertinent part, as follows..,.:

'6.2. In order to achieve the twin objectives of boosting exporter viability and improving the economy's accountability for total export and other foreign currency receipts, as well as ensuring judicious allocation of the scarce foreign currency resources, it has become necessary that the Reserve Bank introduces a new frame-work where we pool our resources together without disadvantaging the generators of that foreign currency.

6.3. Within this spirit, of preserving and promoting the welfare of our generators of foreign currency, who are the geese that lay the golden eggs, it has become necessary that the Central Bank centralises the management of FCAs, along with the creation of an interest earning investment window that boosts exporter viability.

6.4. What this means is that, with immediate effect, all corporate FCA balances at Authorised Dealers are to be lodged at the Reserve Bank, such that each bank maintains mirror accounts for transactions tracing purposes.'

5. On 2 October 2007, the defendant's Division Chief, Exchange Control, one M.B. Mpofu, directed a minute to the Head, Exchange Control Department of all Authorised Dealers, which read(s) in pertinent part as follows:

'Dear Sir/Madam

DIRECTIVE ISSUED IN TERMS OF SECTION 35(1) OF THE EXCHANGE CONTROL REGULATIONS, STATUTORY INSTRUMENT 109 OF 1996

1. INTRODUCTION

1.1. Reference is made to the Mid-Year Monetary Policy Statement announced by the Governor on 1 October 2007. In order to operationalize the measures highlighted therein, Authorised Dealers are accordingly directed as follows…,.:

2….,.

3. CENTRALISED FCA MANAGEMENT

3.1. Authorised Dealers are advised, that, with immediate effect, all Corporate and Non-Governmental Organisations (NGOs) FCA balances, as at 1 October 2007, shall be lodged with the Reserve Bank.

3.2. Authorised Dealers shall transfer all their Corporate FCA (including EPZ Companies) and NGOs balances to the Reserve Bank by close of business on 2 October 2007, as directed by International Banking and Portfolio Management Division, and submit to Exchange Control, individual exporter balances on those transfers made.

3.3. Authorised Dealers are required to maintain mirror accounts for their exporting clients indicating individual entitlements for transaction tracking purposes.

3.4. Authorised Dealers shall submit to the Exchange Control Inspectorate monthly foreign currency account statements for their clients for which global balances should be consistent with holdings at the Reserve Bank's Internal Banking and Portfolio Management Division.

3.5. All special FCAs (transitory accounts) and FCAs for International Organisations, Embassies, and Individuals shall remain with Authorised Dealers.

3.6. In order to ensure that exporters preserve the real value of the foreign exchange deposits under the pooled framework, all such deposits shall earn an all inclusive (interest) rate of 12% per annum in foreign currency for USD, Pound, Euro, Pula and Rand.'

6. The Ban ABC was, and remains, an Authorised Dealer.

7. The plaintiff alleges, that, it had a foreign currency balance of USD1,007,541=30 as at 1 October 2007 in its FCA aforesaid.

8. Banc ABC, pursuant to the directive in para 4 above, remitted the sum of USD1,492,516=06 to the defendant.

9. The plaintiff alleges, that, it has been unable to access its funds from Banc ABC despite demand.

10. The plaintiff has sued the defendant for:

'Payment of an amount of USD1,007,541=30 which amount is due and payable to the plaintiff by the defendant: which amount represents the entire balance of the money which was held by the plaintiff in a foreign currency account in African Banking Corporation Limited: which amount was appropriated by the defendant some time in 2008: and which amount, despite demand, the defendant fails or refuses to pay.'

11. The defendant has pleaded to the summons as follows:

'The defendant pleads that there is no causal nexus between the plaintiff and the defendant, more particularly that:

(a) The plaintiff and defendant have no banking relationship and the defendant did not manage or keep a banking account of the plaintiff and owed the plaintiff no duties normally associated with a banker and its depositor.

(b) The plaintiff's claim should be against its banker and not the defendant. It is improper and there is no legal basis alleged which would entitle the plaintiff to bring a claim against the defendant.

WHEREFORE, the defendant prays for the dismissal of the plaintiff's claim with costs.'

12. The parties have joined issue and agreed on the following issues for disposition:

12.1 Whether or not the plaintiff has a cause of action against the defendant.

12.2. Whether or not the defendant is obliged to pay the amount claimed or any amount at all.

13. The parties respectfully pray that this honourable court may dispose of the agreed issues on the basis of the facts agreed herein and Heads of Argument to be filed by both parties.

DATED AT HARARE this 22nd day of May 2013.”

The Statement of Agreed Facts is duly signed by counsel for the parties.

Counsel for the plaintiff submitted, that, the plaintiff does have a cause of action against the defendant because it is the defendant which wrongfully procured a breach of the contract that exists between the plaintiff and Banc ABC. He maintained, that, an action exists in our law for the intentional and wrongful interference with contractual rights.

In addition, the plaintiff is entitled to recover from the defendant the procured money on the basis of unjust enrichment, it having been enriched at the expense of the plaintiff.

Counsel for the plaintiff strongly argued, that, the directives issued to Authorised Dealers, by the defendant, had the effect:

(i) Firstly, of inducing Banc ABC to commit a breach of its contract with the plaintiff; and

(ii) Secondly, the directives intentionally and wrongfully interfered with contractual rights.

Counsel for the defendant did not address himself to that argument. As far as he was concerned, there was no banker and client relationship between the parties, and, for that reason, the defendant does not owe the plaintiff any duty.

Counsel for the defendant insisted, that, it is the plaintiff's Bank which received the money from the plaintiff, and, for that reason, it is the one with the obligation to pay the money to the plaintiff.

Counsel for the defendant further argued, that, the plaintiff's pleadings do not allege a legal basis entitling it to bring a claim against the defendant especially as the summons does not specify that the suit is based on either contract or delict.

Relying on the judgment of BERE J in China Shougang International v Standard Chartered Bank Zimbabwe Limited HH310-11 where the learned judge stated, obiter dictum…, that there was no privity of contract between the Central Bank and a depositor at a Bank.

I do not think the decision in China Shougang International v Standard Chartered Bank Zimbabwe Limited HH310-11 needs to detain us at all because it is clearly distinguishable from the present case.

In that case, the depositor had sued its own Bank and the defendant (in casu) was not cited as a party to the proceedings. More importantly, apart from the fact that the claim was based on a banker and depositor relationship, and not on the procurement of the deposit by the present defendant, there was also no admission by the Reserve Bank of Zimbabwe (RBZ) that it had indeed appropriated the depositor's money.

I agree with counsel for the plaintiff, that, the question of wrongful procurement was not placed before the court in that matter. Therefore, the case is distinguishable.

In our law, it is generally accepted, and I did not hear counsel for the defendant argue to the contrary, that, an action exists for intentional inducement of a breach of contract.

In PQR BOBERG, The Law of Delict, Vol 1, Juta & Co. Ltd…, the point made that:

“It is well established that the intentional inducement of a breach of contract is an actionable wrong: see Atlas Organic Fertilisers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd 1981 (2) SA 173 (T) at 202G, and the cases there-cited.”

In Dantex Investments Holdings (Pty) Ltd v Brenner & Ors NNO 1989 (1) SA 390 (AD)…, GROSSKOPF JA also made that point in stating:

“It is clear that an interference with contractual rights can, in certain circumstances, constitute a delict. What is less clear is what precisely the requirements for liability are.”

See also Roux v Hattingh 2012 (6) SA 428 and R.H. CHRISTIE, The Law of Contract, 3rd ed, Butterworths…,.

In casu, the defendant acted in terms of section 46 of the Reserve Bank Act [Chapter 22:15]. That section provides:

“In June and December of each year, the Governor shall submit to the Minister a policy statement containing –

(a) A description of the monetary policy to be followed by the Bank during the next succeeding six months, and a statement of reasons for those policies; and

(b) A statement of the principles that the Bank proposes to follow in the implementation of the monetary policy; and

(c) An evaluation of the monetary policy and its implementation for the last preceding six months.”

In order to implement the policy statement given in terms of section 46 of the Reserve Bank Act, to the effect that foreign currency balances were to be lodged with the defendant, a directive was also issued to Banks, in terms of section 35(1) of the Exchange Control Regulations, SI109 of 1996 instructing them to immediately lodge the foreign currency balances with the defendant.

Section 35(1) of the Exchange Control Regulations, SI109/96 is of peremptory application. It reads:

“Authorised dealers shall comply with such directions as may be given to them by an exchange control authority relating to -

(a) The exercise of any functions conferred on them by or under these regulations;

(b) The terms on which they are to exchange foreign currency for Zimbabwean currency;

(c) The offer of foreign currency in their possession for sale to the Reserve Bank.”

It was stated in China Shougang International v Standard Chartered Bank Zimbabwe Limited HH310-11, that, the directive given by the Governor of the defendant was invalid for want of a Ministerial approval.

I do not think it is necessary to discuss that issue in this case because it is accepted that the directive was given.

To that extent, the plaintiff's Bank was obliged to comply with the directive in terms of the law. Doing otherwise would have resulted in dire consequence to it, if not the loss of its Banking licence.

It is common cause, that, after appropriating the plaintiff's money, the defendant did not return that money and has not even begun to give any indication as when, if at all, it will repay the money.

It has contented itself with hedging behind the non-existence of a contractual relationship between it and the plaintiff. The proverbial hiding behind a finger.

Quite how and why the defendant could come to the conclusion that it can just acquire the money and refuse to repay it to the owner is one of the greatest unfathomable mysteries of this world.

There can be no doubt, that, the right to private property is one of the sacrosanct rights protected by law.

There is little doubt, that, the plaintiff should be protected against the arbitrary deprivation of its equity deposited at Banc ABC, which institution was powerless against the defendant's directive and is now unable to perform its contractual obligations, namely, paying the money to the plaintiff on demand.

To my mind, the defendant intentionally induced Banc ABC to breach its contract with the plaintiff.

I have already stated, that, an intentional inducement of a breach of contract is actionable in our law.

As a corollary to that is the submission made on behalf of the plaintiff, that, the directive which led to the appropriation of the plaintiff's foreign currency balance at Banc ABC constitutes a wrongful interference with contractual rights.

I agree.

While it is true, that, the defendant is the monetary authority charged with the management of the Banking sector and the formulation of Banking rules, I have not been directed to any authorities entitling the defendant to proscribe the release of deposits to depositors or indeed to interfere with Bankers obligations to pay balances to their clients on demand.

As a matter of policy, the security of Bank deposits should forever be protected by our courts.

Indeed, it would be an affront to the rights of depositors if ownership of their property, stored with Banks, and the culture of banking money instead of keeping it under a pillow, were to be rendered a serious economic hazard and a ruinous activity.

Our law, which protects ownership of property, is founded on a rock of wisdom. For that reason, the courts should be clear, consistent, and firm in enforcing principles protecting deposits.

Needless to say, that, the expropriation of export proceeds prior to dollarization, which have not been compensated, is one of the major factors inducing weak balance sheets of businesses resulting in poor economic performance.

I am persuaded, that, the plaintiff does have a cause of action against the defendant based on the twin concepts of the intentional inducement of a breach of contract and the wrongful interference with contractual rights: for wrongful it is if the monetary regulatory authority gives a directive for the appropriation of an individual's equity in a Bank and then failing to make good that equity.

Even if I am wrong in that conclusion, the defendant cannot escape liability on the basis of unjust enrichment.

It is now accepted, that, the general enrichment action is recognised in our law: see Industrial Equity v Walker 1996 (1) ZLR 269 (H) where BARTLETT J stated…,.:

“I am of the respectful view, that, the principal requisites for a general action on enrichment can be regarded as aptly summarised by Wouter de Vos in Verry King saanspreeklikheid in die Suid Africkaanse Reg (1958) as stated by Scholtens in the 1996 Annual Survey of South African Law, 150 at 152 as:

'(a) The defendant must be enriched;

(b) The enrichment must be at the expense of another (i.e. the plaintiff must be impoverished and there must be a causal connection between enrichment and impoverishment);

(c) The enrichment must be unjustified;

(d) The case should not come under the scope of one of the classical enrichment actions;

(e) There should be no positive rule of law which refuses the action to the impoverished person.

Obviously, these requirements can only be fulfilled if, in any given case, the action is based on a defined set of circumstances.'”

I am satisfied that all the requirements of unjust enrichment are met in the present case.

It is also not a case that would open floodgates, because, rarely do we have a situation where a depositor's foreign currency balance is appropriated the way it was in this case.

Counsel for the defendant submitted, that, the plaintiff did not plead any case based on delict, and that, for that reason, the claim should fail.

I am of the view, that, the manner in which the plaintiff pleaded its case, predicating it mainly on the fact that the amount claimed “was appropriated by the defendant” was wide enough to encompass the claim as it has been argued by counsel.

I however agree, that, it would be inappropriate, bearing in mind the banking relationship between the parties, the defendant being “a banker of banks” to direct that the money be paid directly to the plaintiff. The correct approach would be for the defendant to return the money to Banc ABC, the plaintiff's banker.

Accordingly it is ordered, that:

1. Judgment is hereby entered in favour of the plaintiff as against the defendant in the sum of USD1,007,541=30 together with interest a tempoe morae at the prescribed rate from the date of summons to date of payment.

2. The defendant is directed to deposit the said sum of USD1,007,541=30 into the plaintiff's Banc ABC account number ZWTROJ001CALUSD0019 or any other account held by the plaintiff at that Bank.

3. The defendant shall bear the costs of suit.

HB57-15 : SIPIWO NKOMO vs MLWELIWENKULULEKO NCUBE
Ruled By: MUTEMA J

This is an application for rescission of a default judgment that was granted against the applicant in case number HC548/14.

The facts relevant to the resolution of the dispute between the parties are briefly these:

The applicant sold a BMW X5 motor vehicle registration number ACX 0734 to the respondent. The respondent paid a deposit of $12,000 and took possession of the vehicle. He, however, failed to pay the balance of $12,175.

The applicant then sued for the balance under case number HC2869/13 and obtained default judgment.

As a follow up to the default judgment, a writ of execution was issued which resulted in the vehicle in question being attached by the Deputy Sheriff.

The respondent filed an application for rescission of the default judgement under case number HC548/14.

The applicant's legal practitioners drew up papers to oppose the application, but, before they filed them, the parties reached a settlement which culminated in the signing of an agreement annexure “D” to applicant's founding affidavit. It was drafted in these words:

“MEMORANDUM OF AGREEMENT

It be and is hereby recorded that following a meeting between:

Plaintiff and her legal practitioner Mr G. Nyoni

Defendant and his legal practitioner Mr S.S. Mazibisa

It was agreed without force; duress and undue influence and the parties conscious of what they were doing, that:

1.The execution of Defendant's property be stayed only and strictly on the following conditions:

(a) That, he pays US$5,000 on 15 April 2014 and US$5,175 on the 6th of May 2014.

(b) That, he pays US$578 paid by Plaintiff to Sheriff of Zimbabwe; Sheriff's further costs and commission; interest of US$250 and costs as will be taxed, all by the 27th of May 2014.

2. The BMW X5 registration number ACX 0734 shall be removed by plaintiff from the Sheriff of Zimbabwe, at Defendant's expense (i.e. storage charges) and kept at Plaintiff's place or other safe place until the defendant has fully paid all monies detailed in paragraph (1) above.

3. Should the Defendant fail to make any one of the payments mentioned in (1) above, the plaintiff shall, without notice to the Defendant, take the vehicle to a car dealer (sellers of second hand vehicles) for the car to be sold by private treat at such reasonable price as will be determined thereat.

4. This memorandum shall stand as Defendant's mandate to the Plaintiff and the said car dealer to sell and transfer the car to the would-be purchaser.

DATED at BULAWAYO on this the 26 day of MARCH 2014.”

It was signed by both parties and their respective legal practitioners.

As a result of the agreement, the application and opposition for rescission under case number HC548/14 could not be pursued.

The respondent failed to meet the payments stipulated in the agreement of 26 March 2014 and the vehicle was taken to a dealer, but, the highest offer received was US9,000. There followed a series of correspondence between the parties legal practitioners concerning the value of the vehicle and whether the respondent should pay the applicant's costs.

On 3 September 2014, the current legal practitioners of the respondent wrote to the applicant's legal practitioners as follows:

“RE: M. NCUBE vs SIPIWO NKOMO

The above matter refers and to our previous conversation.

Kindly note, that, I am preparing a payment plan which is to commence at the end of September 2014 inclusive of clearing the balance if that option is still possible then.

In the meantime, may I please have photocopies of all the filed pleadings since Messrs Cheda and Partners seem to have lost the whole file in their moving offices. I have tried to photocopy directly from the High Court, but, at a dollar per page, it was too stiff, hence the favour that I now seek.”

The respondent was obliged with the documents he requested, which papers he then used to pursue his application for rescission of judgment in case number HC548/14 which had been laid in abeyance by the memorandum of agreement alluded to above - without alerting the applicant.

On 23 October 2014, the respondent obtained a default judgment, with costs, rescinding the judgment the applicant had obtained in HC2869/13.

The applicant says she was shocked to receive a letter, on 19 November 2014, written to her legal practitioners by the respondent's current legal practitioners to this effect:

“RE: MLWELIWENKULULEKO NCUBE vs SIPIWO NKOMO HC548/14 X REF HC2869/13

The above matter refers and to the attached court order.

Be advised that we have since obtained a rescission of judgment of the order which was in favour of your client. Mr Ncube had clearly wanted this matter to rest and had resigned himself to losing both the BMW X5 and the money, a sum of US$12,000, plus other monies that he had paid to the sheriff.

What he then found unfair was the fact that your client wanted to further make him pay a sum in excess of US$2,000 as legal costs when she had both the car and the money. Clearly, that was for all to see, a gross injustice.

In light of the rescission of judgment may the status quo before the judgment be restored, and the matter proceed through normal trial route and Mr Ncube pays the balance which was owing. Failing which, may your client make arrangements to refund the money paid to her by Mr Ncube, by the 1st of December, 2014.

As yours took back possession of the vehicle, which she is using, as we are told by Mr Ncube that he has seen her use the motor vehicle, there is therefore no legal basis for her not to return the money since she had taken back the motor vehicle and enjoys its use.”

That letter elicited a response from the applicant's legal practitioners in this vein:

“We refer to the above matter and to your 19 November 2014 letter. We are, we should confess, shocked by your stance which borders on lack of candour and dishonesty. There is a memorandum of agreement that you signed. Did you disclose it to the court? We are interested in this because we saw the papers in court and the agreement was not part thereof. Can we hear from you urgently as we are determined to take this back to court and to show the court that it was, in our view, at least, misled.”

This letter provoked no response from the respondent hence the current application.

At the hearing of the application, counsel for the respondent attempted, in vain, to introduce cases not cited in the respondent's heads of argument on the basis that he was only briefed by Ndove, Museta and Partners the day before.

I disallowed it in terms of Rule 238(2c) because Ndove, Museta and Partners had been served with the notice of set down on 12 February 2015 but briefed counsel on the eleventh hour. No explanation for that was forthcoming.

As if that was not enough, counsel for the respondent went on to smuggle into the hearing new issues that appear not anywhere in the papers in an endeavour to persuade the court to dismiss the application.

I will proceed to deal with those technical issues that he raised first before adverting to those raised in the opposing affidavit and the heads of argument....,.

In his heads of argument, the respondent raised three issues in opposing the grant of this application. I herewith deal with them hereunder:...,.

(c) The third and last point raised by the respondent, viz that the applicant's actions of retaining the deposit paid and the motor vehicle is not worthy considering at this stage.

Those merits should be ventilated in a different forum if it is found, that, the agreement concluded by the parties does not put the dispute between them to rest.

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Unjust Enrichment re: Approach, Colore Officii or Extortion by Colour of Office, Equality and Equity Considerations

HB201-11 : CABAT TRADE & FINANCE (PTY) LTD and SECURITY MILLS (PTY) LTD vs THE MOVEMENT FOR DEMOCRATIC CHANGE (MDC-T)
Ruled By: KAMOCHA J

HH311-14 : MAXWELL MATSVIMBO SIBANDA vs GYWNNE ANN STEVENSON and THE REGISTRAR OF DEEDS
Ruled By: DUBE J

SC19-14 : DAVID TENDAYI MATIPANO vs GOLD DRIVEN INVESTMENTS (PRIVATE) LIMITED
Ruled By: MALABA DCJ, ZIYAMBI JA and GOWORA JA

HH35-16 : SHINGISAI MARYLN NYAMUKUSA vs GILBERT KARENGA MASWERA
Ruled By: UCHENA J

SC70-07 : MICHAEL TAYLOR vs HEATHER MARGARET TAYLOR
Ruled By: CHEDA JA, ZIYAMBI JA and GARWE JA

HH260-15 : DR PARTSON ZVANDASARA vs BELVEDERE NURSING HOME (PVT) LTD
Ruled By: MATHONSI J

HH18-12 : PIONEER TRANSPORT (PVT) LTD vs DELTA CORPORATION LTD and DAVID LESLIE CRUTTEDEN
Ruled By: GOWORA J

HH44-09 : BLESSMOE CHANAKIRA and AUXILIA DANAYI MYNYEZA vs MAI KAI REAL ESTATE DEVELOPMENT TRUST and BERNARD MUTANGA
Ruled By: BERE J

Appealed
SC24-21 : BIG VALLEY MASTERS (PRIVATE) LIMITED vs SHI JINWU
Ruled By: GWAUNZA DCJ, GUVAVA JA and MAVANGIRA JA

View Appeal
HH601-14 : SHI JINWU vs BIG VALLEY MASTERS (PRIVATE) LIMITED and PHILLIMON MUBATA
Ruled By: CHIGUMBA J

View Appeal
HMA28-20 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES vs ZIMBABWE REVENUE AUTHORITY and OTHERS
Ruled By: ZISENGWE J

View Appeal
HH534-18 : RIOZIM (PVT) LTD vs TRUST BANK CORPORATION LTD (IN LIQUIDATION)
Ruled By: KWENDA J

HH169-13 : TROJAN NICKEL MINE LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MATHONSI J

HB57-15 : SIPIWO NKOMO vs MLWELIWENKULULEKO NCUBE
Ruled By: MUTEMA J

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Law Portal Zimbabwe

Unjust Enrichment re: Approach, Colore Officii or Extortion by Colour of Office, Equality and Equity Considerations

HB201-11 : CABAT TRADE & FINANCE (PTY) LTD and SECURITY MILLS (PTY) LTD vs THE MOVEMENT FOR DEMOCRATIC CHANGE (MDC-T) Ruled By: KAMOCHA J

HH311-14 : MAXWELL MATSVIMBO SIBANDA vs GYWNNE ANN STEVENSON and THE REGISTRAR OF DEEDS Ruled By: DUBE J

SC19-14 : DAVID TENDAYI MATIPANO vs GOLD DRIVEN INVESTMENTS (PRIVATE) LIMITED Ruled By: MALABA DCJ, ZIYAMBI JA and GOWORA JA

HH35-16 : SHINGISAI MARYLN NYAMUKUSA vs GILBERT KARENGA MASWERA Ruled By: UCHENA J

SC70-07 : MICHAEL TAYLOR vs HEATHER MARGARET TAYLOR Ruled By: CHEDA JA, ZIYAMBI JA and GARWE JA

HH260-15 : DR PARTSON ZVANDASARA vs BELVEDERE NURSING HOME (PVT) LTD Ruled By: MATHONSI J

HH18-12 : PIONEER TRANSPORT (PVT) LTD vs DELTA CORPORATION LTD and DAVID LESLIE CRUTTEDEN Ruled By: GOWORA J

HH44-09 : BLESSMOE CHANAKIRA and AUXILIA DANAYI MYNYEZA vs MAI KAI REAL ESTATE DEVELOPMENT TRUST and BERNARD MUTANGA Ruled By: BERE J

Appealed SC24-21 : BIG VALLEY MASTERS (PRIVATE) LIMITED vs SHI JINWU Ruled By: GWAUNZA DCJ, GUVAVA JA and MAVANGIRA JA

View Appeal HH601-14 : SHI JINWU vs BIG VALLEY MASTERS (PRIVATE) LIMITED and PHILLIMON MUBATA Ruled By: CHIGUMBA J

View Appeal HMA28-20 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES vs ZIMBABWE REVENUE AUTHORITY and OTHERS Ruled By: ZISENGWE J

View Appeal HH534-18 : RIOZIM (PVT) LTD vs TRUST BANK CORPORATION LTD (IN LIQUIDATION) Ruled By: KWENDA J

HH169-13 : TROJAN NICKEL MINE LIMITED vs RESERVE BANK OF ZIMBABWE Ruled By: MATHONSI J

HB57-15 : SIPIWO NKOMO vs MLWELIWENKULULEKO NCUBE Ruled By: MUTEMA J

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Zimbabwe

HB201-11 : CABAT TRADE & FINANCE (PTY) LTD and SECURITY MILLS (PTY) LTD vs THE MOVEMENT FOR DEMOCRATIC CHANGE (MDC-T)
Ruled By: KAMOCHA J

HH311-14 : MAXWELL MATSVIMBO SIBANDA vs GYWNNE ANN STEVENSON and THE REGISTRAR OF DEEDS
Ruled By: DUBE J

SC19-14 : DAVID TENDAYI MATIPANO vs GOLD DRIVEN INVESTMENTS (PRIVATE) LIMITED
Ruled By: MALABA DCJ, ZIYAMBI JA and GOWORA JA

HH35-16 : SHINGISAI MARYLN NYAMUKUSA vs GILBERT KARENGA MASWERA
Ruled By: UCHENA J

SC70-07 : MICHAEL TAYLOR vs HEATHER MARGARET TAYLOR
Ruled By: CHEDA JA, ZIYAMBI JA and GARWE JA

HH260-15 : DR PARTSON ZVANDASARA vs BELVEDERE NURSING HOME (PVT) LTD
Ruled By: MATHONSI J

HH18-12 : PIONEER TRANSPORT (PVT) LTD vs DELTA CORPORATION LTD and DAVID LESLIE CRUTTEDEN
Ruled By: GOWORA J

HH44-09 : BLESSMOE CHANAKIRA and AUXILIA DANAYI MYNYEZA vs MAI KAI REAL ESTATE DEVELOPMENT TRUST and BERNARD MUTANGA
Ruled By: BERE J

Appealed
SC24-21 : BIG VALLEY MASTERS (PRIVATE) LIMITED vs SHI JINWU
Ruled By: GWAUNZA DCJ, GUVAVA JA and MAVANGIRA JA

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HH601-14 : SHI JINWU vs BIG VALLEY MASTERS (PRIVATE) LIMITED and PHILLIMON MUBATA
Ruled By: CHIGUMBA J

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HMA28-20 : TRIANGLE LIMITED and HIPPO VALLEY ESTATES vs ZIMBABWE REVENUE AUTHORITY and OTHERS
Ruled By: ZISENGWE J

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HH534-18 : RIOZIM (PVT) LTD vs TRUST BANK CORPORATION LTD (IN LIQUIDATION)
Ruled By: KWENDA J

HH169-13 : TROJAN NICKEL MINE LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MATHONSI J

HB57-15 : SIPIWO NKOMO vs MLWELIWENKULULEKO NCUBE
Ruled By: MUTEMA J