ZIYAMBI
JA:
This is an appeal against the judgment of the High Court dismissing with costs
a claim by the appellant seeking, inter alia, specific performance of a
contract.
The
appellant issued summons in the High Court, against the respondent in July
2004. It was alleged in the declaration as follows:
“3. In
April 2004 the plaintiff purchased a motor vehicle T.3500 Truck from the
plaintiff for $133 million.
4.
In terms of the defendant's quotation for the truck delivery of the motor
vehicle was to be done within one week of payment of the purchase price.
5.
The plaintiff duly paid the full purchase price on the 22nd of April
2004 but despite demand defendant has failed or neglected to deliver the truck.
6.
As a result of the defendant's failure to deliver the truck by the 28th
of April 2004 in terms of their quotation plaintiff had no option but to
hire alternative transportation at a total cost of $58 260 300 as at 30 June
2004”.
The
respondent denied liability. It alleged that a pro forma invoice for the
purchase of a Mazda T35 truck was given to the appellant on 23 February
2004 but the appellant only placed an official order on 20 April 2004. It
was indicated on the pro forma invoice that “PRICES ARE SUBJECT TO CHANGE
WITHOUT NOTICE.” While it was stated in the pro forma that delivery
would be effected within a week, that was meant to be one week from the date of
placement of the official order and the conclusion of a binding contract for
the purchase assuming the appellant was going to place an order, and make
payment, immediately. At the time of issue of the pro forma invoice no
agreement had been concluded by the parties. By the time the appellant
placed an order it had already been appraised of the difficulties and delay
then obtaining in procuring the T35 truck. The respondent contended that
it was under no legal obligation to deliver the truck within one week of 22
April 2004 the date when the purchase price was paid by the appellant.
Regarding
the claim for damages it was pleaded by the respondent that if the losses
claimed by the appellant were indeed suffered by it they could have been
avoided had the appellant accepted the respondent's reasonable offer of a
similar model of truck or a refund of the purchase price with which the
appellant could have obtained a similar truck from other car dealers.
The issues for determination at the
trial were whether there was a valid agreement between the appellant and the
respondent; whether the respondent was obliged to deliver the T35 vehicle; and
the quantum of damages, if any, payable to the appellant.
The High Court found that while
there was an agreement concluded between the parties, it was not the agreement
which was envisaged on 23 February 2004 when the pro forma invoice was
issued. It found, and that was common cause at the trial, that the pro
forma invoice was given to the appellant on the understanding that the
appellant would immediately forward a purchase order and payment for the truck.
At that time a truck was available and the respondent was ready to deliver
within seven days. It was never in the contemplation of the parties that
the appellant would take eight weeks to forward the purchase order and payment
in terms of the pro forma invoice. Accordingly, by the time the appellant
was ready to make payment, the respondent had no vehicles in stock. This
change of circumstances regarding the availability of the T35 trucks was
communicated to the appellant before it placed the purchase order and made
payment for the vehicle. The learned Judge found that a date of delivery had
not been specified in the agreement which was finally concluded by the parties.
Accordingly delivery was to be made within a reasonable time.
The learned Judge's finding in
this regard accords with the evidence. The delivery period stated in the
purchase order, issued by the appellant on 29 March 2004, is fifteen days (29
March to 13 April). The appellant was clearly not relying on the seven
day delivery period at the time it issued the purchase order. Indeed, on
the evidence adduced by the appellant it is difficult to understand what
delivery period was in fact being relied upon by it because the 13th
April came and went with no payment being made by the appellant.
Only on 22 April 2004 did the appellant make payment for the
vehicle. It was on that date that a contract for the purchase of the T35
was concluded by the parties. Since no delivery period was specified, (the
payment having been made nine days after the delivery date stated in the
purchase order) delivery was to take place within a reasonable period. In
view of the above the appellant could not possibly rely, as it did in the
summons, on the seven day period stated in the pro forma invoice.
Whether the respondent is
obliged to deliver the T35 vehicle to the appellant.
On 15 June 2004, less than 2 months
after making payment, the appellant wrote to the respondent complaining about
the delay in delivering the T35 truck and asking for “a firmer position as to
when supply is going to be”. The respondent replied on 22 June 2004.
It apologised for the late delivery of the truck which was as a result of a
delay in the arrival of assembly kits at Willowvale Motor Industries. It
advised that according to recent information received, the truck would only be
available in early October 2004 and that there would be a price change the
quantum of which would be advised as soon as it was known to the
appellant. In the event that this was not acceptable to the appellant, it
suggested a refund of the purchase price.
No more was heard of the matter
until 2 July 2004 when the appellant's legal advisor wrote to the respondent in
the following terms:
“We
refer to the above matter and write to advise that we are extremely displeased
by the non-delivery of the truck since the 29 April 2004, the contractual date
of delivery.
Your
reasons for the non-delivery are totally unacceptable and so is
your offer to deliver the truck in October 2004 at a revised price.
Please
note that presently Jena Mines is incurring a transport bill of $20 000 000 per
month due to the non-availability of the truck. By mid-July Jena Mines will
have been financially prejudiced in the sum of $50 000 000.
If
the truck is not delivered to Jena Mines by close of business on 16 July 2004
together with payment in the sum of $50 000 000 then you will leave us with
option but to institute legal proceedings for the delivery of the truck,
payment of damages in the sum of $50 000 000, holding over damages in the sum
of $666 666,66 per day, interest thereon and costs of suit.”
One notes here that the
contractual date of delivery is said to be 29 April 2004. (The declaration
states it to be 28 April 2004). As discussed above the delivery date
which was stated in the purchase order was 13th April. By that
date no payment had been made so there was no contract between the
parties. The basis for using 29 April 2004 as the delivery date is
unclear. The resultant confusion is compounded by the provision in the
purchase order that “unless otherwise stated in writing this order is hereby
cancelled 30 days after the delivery date given above”.(That date is 13th
April which means that cancellation of the agreement would automatically
take place on 13 May 2004.)
That
aside, it was the respondent's evidence that once it received payment on 27
April 2004 at its Gweru branch (for some reason the payment had been made by
cheque dated 22 April 2004 to their Harare head office), an order was
placed with Willowvale Motor Industries (“Willowvale”), who then advised that
there were a few units left and that Willowvale was awaiting the arrival of
finishing kits including door panels with which to assemble the T35 trucks.
This information was communicated to the appellant who indicated its readiness
to await the arrival of the kits.
When, in answer to the letters
by the appellant, the issue arose of a price change or, alternatively, a refund
as set out above, the appellant's response was the letter set out above
demanding delivery by 16 July 2004 with which date it knew that the respondent
could not comply. Needless to say, the respondent was unable to, and did
not, comply with the demand and summons was issued on a date in July which is
not clear from the record.
In a
further attempt to resolve the dispute, the respondent, on the 17 August 2004,
offered to the appellant a Mitsubishi Canter truck which it said was readily
available at the same price as the Mazda T35. The vehicle offered was of
the same tonnage and engine capacity as the T35. In the alternative, an
offer of a refund of the purchase price with interest was again made to the
appellant.
Both
offers were flatly refused by the appellant. It was submitted by Mr Zhou
on behalf of the respondent that
“It is common cause that during the
material period, Zimbabwe's economy was undergoing unprecedented hardships
which were not of any of the parties doing and which affected every one,
particularly those doing business in sectors utilising foreign currency.
Foreign currency was in short supply and the rate of inflation prevailing then
had never been seen either locally or anywhere else in the world. This was an
extraordinary and extremely painful business environment which made it
impossible for businesses to operate normally. Planning was rendered
meaningless by the hyperinflationary environment. All these are facts which the
parties are aware of and, it is submitted respectfully, this Hon. Court should
take judicial notice of. To insist on a strict application of the ordinary
rules of commerce in such a highly unusual environment would not only be
unreasonable but would result in great injustice”.
The learned Judge found, in my
view correctly, that the conduct of the appellant was unreasonable in view of
the prevailing circumstances. Indeed the appellant's conduct was ill advised
bearing in mind the economic conditions prevailing at the time and the common
knowledge that the Zimbabwean dollar was depreciating at a rapid rate. In
such an environment and despite the offer of a refund or an alternative
vehicle, the appellant, heedless of its obligation to mitigate its damages[1]
proceeded recklessly to incur vehicle hire charges for which it held the
respondent liable because of the latter's perceived failure to deliver the T35.
The court a
quo found as follows:
“In August 2004 the defendant again
offered plaintiff an alternative truck of a similar tonnage and engine capacity
or a refund of the purchase price plus interest, but again plaintiff would not
have that. The offers by defendant were reasonable and appeared to have been
made in good faith. Had the plaintiff accepted the offer it would have greatly
mitigated its loss. The plaintiff's attitude was in my view unreasonable and
oblivious of its own contribution to the malaise.
I thus hold that whilst the parties
entered into an agreement on the 22nd April 2004, the plaintiff's
attitude was such that the defendant cannot now be obliged to deliver the T35
truck. Neither can the defendant be held liable for any damages plaintiff may
have suffered as this was authored by plaintiff's own delays”.
Its reasoning is
unassailable. The appellant's woes were self inflicted. It has only
itself and its advisers to blame for poor administration and a bad business
decision. Not only was the period of delivery not shown to be
unreasonable in the circumstances but the evidence shows that the appellant
contributed to the delay by waiting for eight weeks before placing a purchase
order and making payment of the truck in circumstances where it was well aware
of the dangers attendant on its failure to act promptly.
The appeal is therefore devoid of merit and it is dismissed
with costs.
GARWE
JA:
I agree
OMERJEE
AJA:
I agree
Sawyer & Mukushi, appellant's legal practitioners
Jumo Mashoko & Partners, respondent's legal
practitioners
[1]HAZIS
V TRANSVAAL AND DELAGOA BAY INVESTMENT CO. LTD 1939 AD 372 AT 388; FREEDMAN V
RAYWID 1930 CPD 161
