Intent or Animus Contrahendi re: Deemed, Implied, Tacit, Unsigned Agreements or Informal Contracts

HH10-10 : RANI INTERNATIONAL LIMITED vs BUBYE MINERALS (PVT) LTD AND ANOTHER
Ruled By: UCHENA J

A tacit agreement refers to something done or made in silence. It is manifested by the fact that no contradiction or objection is made and is thus inferred from the situation and the circumstances. It is, in essence, implied.

HH00-08 : AGRICULTURE BANK OF ZIMBABWE LTD T/A AGRIBANK vs DATANET TECHNOLOGY ZIMBABWE
Ruled By: MTSHIYA J

As was submitted by the plaintiff's legal practitioner, the issue of an agreement becoming impossible of performance is fully covered by R.H. CHRISTIE in his book 'The Law of Contract In South Africa 3ed…, where he writes:-“The Roman law principle that a contract is a nullity if, at the time ...

HH117-09 : MICHAEL KATEKETA vs ONE WORLD GALLERIES (PVT) LTD and A MPOPOMA
Ruled By: MAKARAU JP

On 30 October 2008, the plaintiff issued summons against the defendants claiming delivery of certain specified railway sleeper furniture. In his declaration, the plaintiff alleged that he and the defendants entered into an agreement in December 2007, in terms of which the defendants agreed to manufacture for him certain specified items of furniture. He further alleged that ...

On 30 October 2008, the plaintiff issued summons against the defendants claiming delivery of certain specified railway sleeper furniture.

In his declaration, the plaintiff alleged that he and the defendants entered into an agreement in December 2007, in terms of which the defendants agreed to manufacture for him certain specified items of furniture. He further alleged that whilst he had performed his side of the bargain, by paying the agreed price, the defendants, in breach of the agreement, had failed to deliver all the items contracted for leaving the items forming the subject matter of this suit outstanding. In particular, the plaintiff averred that, in terms of the agreement between the parties, the defendants would manufacture and deliver a 7 piece dinning room suite, a side serve, a 3 piece coffee table set, a 2 piece side board, a 3 piece room divider and a wall mirror. In breach of the agreement, the defendants failed to deliver the side board, the room divider and the wall mirror.

The suit was defended.

In its plea, the first defendant averred that the plaintiff made inquiries about the cost of items he required and was given a quotation which was valid for a limited time. He then made payment on the quotation outside the lifetime of the quotation, and without first making reference to the defendant, with the result that the amount he paid was only sufficient for the manufacture of the items that were delivered to him.

At the pre-trial conference of the matter, the parties agreed that the issues for determination at the trial of the matter were;

(a) Whether the plaintiff is owed the outstanding items of furniture; and

(b) Whether the parties varied the agreement between them to the effect that the defendant would only manufacture the items that it delivered.

The matter was thus set down for trial before me.

At the trial, the plaintiff gave evidence. His evidence was as follows. He is a businessman. In December 2007, he visited the first defendant's factory. He was taken around the place and was shown other items that the defendant had manufactured. He requested the manager to tailor-make the items that he required. To that end, he arranged for the manager to visit his flat and take some measurements.

This was duly done.

The manager left him with catalogues from which he and his wife could select what they thought was suitable. He was given a quotation upon which he successfully negotiated a discount. He was also given a Bank account into which he was to deposit the amount reflected on the quotation. He told the defendants that he was going to dispose of some shares and that this would take some time. The second defendant assured him that this would not pose any problems. As soon as his shares were sold, he deposited the amount reflected on the quotation into the defendant's Bank account. He paid the deposit a week or two after the date appearing on the quotation. When his shares were sold, he told the defendant that he was going to make the transfer and wanted to know whether there had been any changes to the prices. The second defendant assured him that there had been no changes and there would be no problem with his deposit.

Apart from the quotation, nothing else was reduced to writing as between the parties. The witness was shown a copy of the quotation which he identified. Same was adduced into evidence.

The plaintiff proceeded to testify that, after some arguments, the defendant delivered part of the ordered furniture leaving the items in dispute outstanding. He demanded for the delivery of the remaining items, firstly, by word of mouth and then by a letter of demand.

In conclusion, the plaintiff testified that at not time did he discuss the issue of revisiting the pricing of the order as suggested by the defendants. He insisted that, after paying the amount reflected on the quotation, he was entitled to delivery of the outstanding items even if he paid outside the lifetime of the quotation as he had advised the defendants that he needed time to sell his shares.

The witness impressed me as an articulate and confident man. He was very clear as to what the defendants were obliged to do under the contract and was keen to see them held strictly to the written terms of the contract, an attitude that evoked in me memories of passages in the Shakespearian play; Merchant of Venice.

The witness was wordy in his responses to questions put to him under cross-examination and would at all times maintain his stance that he performed his side of the bargain by paying the contract price in full.

In my view, the factual issue that falls for determination in this suit is whether the parties varied the written terms of the quotation to allow the plaintiff to make payment of the quoted price outside the lifetime of the quotation.

On this point, the plaintiff did not testify with his characteristic clarity and confidence. His evidence, as detailed above, was to the effect that that he spoke to the second defendant when his shares had been sold and asked him if there were any changes to the quotation. He was told that there were none.

I did not believe the plaintiff in this regard.

Firstly, I did not believe him when he testified that he telephoned the second defendant as he alleges. He did not give the date when he actually made the payment. He was very vague about it saying it was between 7-14 days after the date of the quotation. The plaintiff is not a vague man. He is very precise though not always concise. He knows the date when he made the payment. He simply chose not to tell me the date. I surmise that he chose not to disclose the date because he thought it would detract from his case by corroborating the evidence of the defendants that he made his payment some three to four weeks after the quotation had lapsed.

Secondly, it is highly unlikely that the second defendant, when and if telephoned, would have advised the plaintiff that there were no changes in the price especially in the environment during which the contract was concluded. The defendants testified that their quotations were now valid for 3 days only as prices were constantly changing. It is therefore highly improbable that, after two or three weeks, prices on the quotation had remained static.

After testifying, the plaintiff called one Custon Muchepa (“Custon”). Custon used to work for the defendants and was the first defendant's manager at the time. He is the one who prepared and issued the plaintiff with the quotation. On a date he did not give, the plaintiff telephoned him to advise that he had made payment on the quotation. He then received a call from the workshop requesting him to prepare a bill of materials for work on the plaintiff's order to begin. He confirmed that part of the plaintiff's order was delivered and the balance was promised. The balance of the order was never delivered. Out of frustration and other misunderstandings, he left the first defendant's employment before delivery of the remaining items had been made.

On the material dispute of fact between the parties, Custon Muchepa did not have any personal knowledge as to whether the parties agreed to vary the lifetime or validity period of the quotation. He was not present when the plaintiff allegedly telephoned the second defendant to establish whether there were any changes to the prices before he, the plaintiff, made payment. He was simply advised by both that payment had been made.

The witness gave his evidence generally well. He however could not testify on the material fact in dispute in this matter as he was not present when the two allegedly discussed the issue. Further, whilst he could give quotations, he was not in charge of the finance department and would not know why work on the plaintiff's items was stopped.

In my view, the evidence of this witness, did not take the plaintiff's case further than where the plaintiff himself left it.

After the evidence of this witness, the plaintiff closed his case.

The second defendant gave evidence on his own behalf and on behalf of the first defendant. His evidence was as follows;

He is a Director of the first defendant. He recalls that the plaintiff came to the defendant's workshop where he was given a quotation. The quotation was supposed to be valid for three days. The plaintiff was also given the first defendant's account number for the purposes of making payment. Prior to the parties concluding the transaction, the plaintiff informed him that he had funds that were maturing sometime which he would use to fund the contract. He then left his manager to prepare the quotation. After three weeks, he received a report from his manager that the plaintiff had made payment, by direct deposit, into the first defendant's account. He checked the account and confirmed the deposit. He then telephoned the plaintiff and confirmed the deposit. He however advised the plaintiff that the deposit was now insufficient to cover the order. The plaintiff, in turn, advised him that he had no further funds and that the parties should re-negotiate. The first defendant started manufacturing the items of furniture that the parties had agreed were equivalent to the deposit. When the plaintiff was advised of this, he said the parties should discuss the issue further. The defendants delivered the items that were equivalent to the deposit. After delivery, he telephoned the plaintiff for a meeting. The plaintiff insisted that he had paid for the entire order and demanded delivery of the remaining items.

The witness gave his evidence well. He did not seek to exaggerate. He was forthright in his responses to questions put to him under cross-examination. He impressed me a being honest and truthful.

I particularly believed him when he testified that he only received the report that payment had been made from Custon Muchepa, meaning that he did not speak to the plaintiff before the plaintiff made the deposit. He thus did not agree to extend the validity of the quotation before payment was made. His evidence in this regard gains corroboration from the testimony of Ronald Mpopoma who testified after him.

Ronald Mpopoma's evidence was to the following effect;

He is son to the last witness and works for the first defendant as Clerk. He confirmed that ordinarily, the defendants were giving quotations valid for only three days. He thus expected the plaintiff to make a payment after three days of obtaining the quotation. Instead, he received a report, after three weeks, that the plaintiff had made payment on the quotation. The report was made to him by Custon Muchepa. He then telephoned the plaintiff to come and discuss the issue. At the meeting, the plaintiff was advised that his deposit was insufficient to meet his order. It is at that stage that the parties agreed that the defendants would only manufacture those items that were equivalent to the amount of the deposit. The parties were to further agree on the remaining items. On that understanding, the witness gave the word for work to commence on the plaintiff's order.

Regarding Custon Muchepa, the witness testified that he fired him after he realized that there was an unhealthy relationship between him and the plaintiff and that the two may have diverted the defendants' jobs to the competition.

In my view, the witness gave evidence that was largely common cause save for the information on how Custon Muchepa left employment. Regarding the material issue in dispute, he was clear that the plaintiff was made aware of the insufficiency of his deposit when such was made. In this regard, he corroborates the evidence of the second defendant in a material respect.

After this witness, the defendants closed their case.

In his closing submissions, counsel for the plaintiff correctly submitted, in my view, that the first issue I have to determine is whether or not the parties had a contract, and, if so, what the terms of the contract were.

In answer to the questions posed by the first issue, he submitted that the parties had a verbal contract for the manufacture of the furniture items specified in the quotation and for the price stipulated in the quotation.

I am unable to agree that the parties unconditionally entered into a contract for the manufacture of the furniture items listed in the quotation. In my view, the quotation that was issued to the plaintiff by the defendants was an invitation to treat. It was the offer to do business with the plaintiff. The terms of the offer were endorsed on the face of the quotation.

It may be pertinent, at this stage, to observe that while the defendants testified that at the time they were issuing quotations valid for only three days, in casu, the quotation clearly stated on its face that it would hold for a week. Thus, notwithstanding their policy in this regard, they were bound by the period given on the face of the quotation.

In my view, the plaintiff could have validly made payment within one week of the quotation and such payment would have bound the defendants.

The plaintiff however did not make payment within one week. It is not clear when he made payment. As observed above, he has chosen not to take the court into his confidence to reveal the actual date on which he made payment. He has given the period as between 7 and 14 days. The defendants have given it as between three and four weeks. I am none the wiser as to when payment was made.

The onus lies squarely with the plaintiff to show that payment was made in terms of the offer made to him. The confusion as to when he accepted the offer can only be fatal to his claim and not to the defence.

The plaintiff has approached the court ex contractu. He alleges that he had a binding contract with the defendants. He further alleges that while he performed his side of the bargain, the defendants are in breach and should be compelled to perform.

The foundation of any contact is agreement between the parties. To establish this agreement, one looks for an offer and the acceptance of that offer.

In casu, it is common cause that the quotation given to the plaintiff constitutes the offer that was made by the defendants.

It is the settled position in the law of contract that an offer can lapse through the effluxion of time. This means that after the time set in the offer for acceptance has expired, the offer is no longer open to acceptance for the birthing of a valid contract. The point was settled in Laws v Rutherford 1924 AD 261 and has held since. At 262, INNES CJ had this to say:

“Speaking generally, when the acceptance of an offer is conditioned to be made within a time limit or in a manner prescribed by the offeror, then the prescribed time limit and manner should be adhered to.”

In casu, the offer was valid for one week. The one week lapsed before the plaintiff had accepted it. His purported acceptance of the offer, after the one week, was of no force and effect.

Put differently and conversely, acceptance of an offer must always correspond to the offer. If it does not, it constitutes a counter offer and no valid contract is birthed on the original offer.

The plaintiff has not, like the appellant in Laws v Rutherford 1924 AD 261 pleaded that the defendants waived their rights to insist on payment within the week. He, instead, sought to argue that the defendants extended the time within which the offer could be accepted. I have found above that I do not believe his testimony in this regard. There was no such variation. His offer of the defendant's offer had to be within a week of the offer. It was not.

Further, he has not sought to argue that the defendants accepted his counter-offer to pay the price at his own time.

In the circumstances, it is my finding that the plaintiff has failed to establish the contract that he seeks to rely on for an order compelling the defendants to deliver the remaining items of furniture. Payment of the price on the quotation made when the offer was no longer open could not bring about an enforceable contract between the parties.

HH119-09 : ISAAC MANDI vs GRACE MCHICHWA (as Executrix Dative Estate Late Peter Kandeya) and RUWA LOCAL BOARD and MINISTRY OF LOCAL GOVERNMENT
Ruled By: GOWORA J

On 15 October 2009, after hearing counsel, I dismissed this application with costs. The applicant's legal practitioners have now indicated that they require reasons for the dismissal and these are they: During his lifetime, Peter Kandeya entered into an agreement with the third respondent in terms of which he, Peter Kandeya, leased from the respondent certain premises known ...

During his lifetime, Peter Kandeya entered into an agreement with the third respondent in terms of which he, Peter Kandeya, leased from the respondent certain premises known as Stand 1124 Samaita Crescent, Ruwa. The lease was concluded on 18 August 1999 but was effective from July 1999 and would endure for a period of six years.

On 2 December 2003, Peter Kandeya entered into an agreement with Aston Musunga in terms of which the latter purchased a piece of land called Stand 3408 Gora Crescent, Ruwa. Although there seems to be a difference in the Stand numbers and the street address it is clear from the lease agreement between Peter Kandeya and the third respondent that it is in fact the same Stand. On the same day that the two concluded an agreement of sale, they also entered into an agreement of lease wherein Peter Kandeya leased the property in question from Aston Musunga. The lease was to expire after six months.

According to the founding affidavit deposed to by the applicant, on 21 June 2005, Aston Musunga then donated Stand 3408 Gora Crescent, Ruwa to him.

The Deed donating the property to the applicant has not been produced.

I do not doubt that indeed such donation took place. It is on the basis of this donation that the applicant seeks that the first respondent cede and transfer her right, title and interest in Stand 3408 Gora Crescent, Ruwa to himself.

The third respondent has opposed the granting of the relief on the basis that, as the owner of the Stand, his written consent to the alienation had not been sought prior to Peter Kandeya entering into any agreement for the transfer of rights that Peter Kandeya had in the lease agreement.

The first respondent contends that the Agreement of Sale being alleged by the applicant is null and void ab initio due to the provisions of clause 12 of the lease agreement governing the relationship between the deceased and the third respondent.

In Nkomo v Mujuru1997 (1) ZLR 155, ROBINSON J found that an agreement of sale in respect of premises subject to an agreement of lease with the Government as lessor wherein the prior written consent of Government was required before rights therein could be alienated, whilst not being void ab initio, was, nevertheless, unenforceable against the Government at the instance of the seller or purchaser of rights accruing from the lease.

In my view, this clear legal position and the stance adopted by the third respondent herein, that it would not consent to the order being sought, should have alerted the applicant and his legal practitioner that there would be very little mileage to be made in pursuing this court application further.

It should have occurred to the applicant and his legal practitioners that Aston Musunga had to obtain cession of rights from Peter Kandeya before the donation could be effective in favour of the applicant in which case a real right would have been donated. However, wiser counsel did not prevail and the applicant proceeded regardless.

Despite the fact that the applicant did not conclude an agreement with the first respondent or the deceased, the applicant seeks an order for specific performance for the cession of rights in the Stand to himself.

I have not been addressed on the legal premise on which I should find that the first respondent is obligated to transfer rights in the Stand to the applicant. There is no agreement between the two parties, and, as such, the applicant has not advanced any cause for this court to find that he is entitled to the relief that he is seeking.

When I questioned the applicant's counsel on the issue I was advised that the practice was that a party in the shoes of the applicant could sue for the transference of such rights. Her response was indicative of knowledge that this practice was not grounded on any principle in law. Nevertheless, she persisted to argue that the applicant was entitled to an order of specific performance.

I was unable to understand the submission, as it was not backed by legal principle.

There is no privity of contract between the applicant and the first respondent. In the circumstances, I find myself unable to accede to the applicant's prayer for relief in the terms sought.

The second respondent, the Ruwa Local Board, did not file an opposing affidavit to the application but a letter written by the Board to the applicant has been attached to the papers filed by the respondent.

The letter, dated 26 September 2006, clearly stated that the applicant was in occupation of the Stand in question without having met stipulated conditions for such occupation. It also advised that the purported sale between Peter Kandeya and Aston Musunga was illegal and of no force and effect in the absence of the consent of Government. Therefore, the donation by Aston Musunga to the applicant was itself null and void. He was further informed that the property was now being dealt with as part of the deceased estate of Peter Kandeya.

It does not seem as if the applicant was in the mood to heed this advice. He did not respond to the letter and did not suspend his building operations.

His position is unenviable as he is unable to prove the alleged contract between Peter Kandeya and Aston Musunga. As the receipient of a free Stand he cannot drag Aston Musunga to court for an order of specific performance for the transfer of rights in the Stand to him.

Aston Musunga did not however obtain a real right from Peter Kandeya when he “purchased” the said Stand. All he obtained were personal rights against Peter Kandeya. Since Aston Musunga did not obtain real rights he could pass no better right to the applicant and without Aston Musunga having been joined to the dispute the applicant's case has no starting point as it is the alleged rights that Aston Musunga “purchased” which are in issue. Without Aston Musunga having obtained rights the applicant cannot claim from the estate of Peter Kandeya, and, in the circumstances, I find that there is no merit in the application.

The application is therefore dismissed. The applicant is ordered to pay the costs of the first and third respondents.

HH124-09 : MAXWELL TAWODZERA AND MARGARET TAWODZERA vs DANNY MASUKUMA
Ruled By: MAKARAU JP

The defendant gave evidence. His evidence was to the following effect. On 5 October 2008, he responded to an advert that had been flighted in the local press by the plaintiffs in respect of the two properties they were selling. He met with the plaintiffs, and at the meeting the plaintiffs advised him that they wanted ...

The defendant gave evidence. His evidence was to the following effect.

On 5 October 2008, he responded to an advert that had been flighted in the local press by the plaintiffs in respect of the two properties they were selling. He met with the plaintiffs, and at the meeting the plaintiffs advised him that they wanted to dispose of the properties immediately. The plaintiffs further advised him that local currency, in either cash or bank transfer, were unacceptable.

They were selling for foreign currency only.

An arrangement was made for him to view the properties, which he did. After inspecting the properties, he expressed his interest, and the parties negotiated the price until they concluded the agreement on US$265,000=, which amount the witness had indicated he was willing to pay for the two properties.

While the parties were still in Mount Darwin, but after having concluded the agreement of sale, he telephoned his legal practitioner and gave him instructions to draft an Agreement of Sale on the terms that the parties had negotiated. The following day, the parties attended at the legal practitioner's offices where the Agreement of Sale was presented to them. In the Agreement, the purchase price was denominated in US Dollars.

The legal practitioner left the draft document with the parties. They read through the document and appended their signatures to it.

When the legal practitioner returned, he inquired as to whether the parties required any changes to be effected to the document. It is at this stage that he informed them that the document required that they be in possession of the exchange control authorities' approval to transact in foreign currency. When the witness told him that he did not have such authority, the legal practitioner then disowned the Agreement to protect his professional integrity. He left the parties to discuss over the issue. The parties agreed on the issue of the value of the properties in local currency. A figure of $10 billion was agreed upon on condition it was paid for in cash. The parties informed the legal practitioner that they had reached agreement. They were made to wait while a fresh document was prepared.

In the interim, the witness left the offices to make a few calls, including calling for the $10 billion in cash to be brought to the legal practitioner's offices. He returned with the cash, which was in two brief cases and a plastic bag. The parties signed the Agreement in the presence of the lawyer, who indicated that he would not witness the exchange of the cash as it would be unethical for him to do so. The parties exchanged the money and sealed the transaction with a ceremonial handshake.

They left.

HB106-09 : CHURCHVILLE TRADING vs BEVERLY BUILDING SOCIETY
Ruled By: KAMOCHA J

The plaintiff's claim against the defendant was for:- (a) The return from the defendant all the property mentioned in paragraph 6 of its declaration; (b) In the alternative, payment in the sum of $29,793,200= being the value of the property that the defendant's employees took unlawfully; (c) Interest a tempore morae from the date of service of summons to date of full ...

The plaintiff's claim against the defendant was for:-

(a) The return from the defendant all the property mentioned in paragraph 6 of its declaration;

(b) In the alternative, payment in the sum of $29,793,200= being the value of the property that the defendant's employees took unlawfully;

(d) Costs of suit.

The property that allegedly went missing was this:-

1. 1 x Pentium III Compaq D300 computer;

2. 1 x Samsung fax machine;

3. 4 x telephone receivers;

4. 2 x JH visitors' chairs;

5. 2 x swivel chairs;

6. 2 x executive secretary chairs;

7. 12 x lever arch files;

8. 12 x C3906 A toner cartridges;

9. 12 x 92A toner cartridges;

10. 18 x 96A toner cartridges;

11. 2 x 15A toner cartridges;

12. 8 x 26A ink cartridges;

13. 7 x 25A ink cartridges;

14. 14 x 29A ink cartridges;

15. 14 x 29A ink cartridges;

16. 18 x 49A ink cartridges;

17. 10 x A4 bond paper reams;

18. 1 x ceramic toilet pan;

19. 5 x 3 lever lock set;

20. 21 x Genicom ribbons;

21. 2 x boxes Eversharp pens;

22. 1 x Heavy duty paper punch; and

23. 4 x boxes staple pins.

The parties attended a pre-trial-conference where they formulated the issues to be determined by the trial court as follows:-

“1. Whether or not defendant and plaintiff entered into a lease agreement as alleged by plaintiff;

2. The terms of the alleged lease agreement;

3. Whether or not plaintiff took cession of certain lease between AB Mining and defendant;

4. The terms of any such cession;

5. Whether or not plaintiff's occupation of the defendant's premises was lawful;

6. Whether or not defendant, through its employees, unlawfully removed or stole plaintiff's property as set out at paragraph 6 of the plaintiff's declaration; and

7. The value of the property referred to above.”

The plaintiff called one witness in an endeavour to prove its claim. Its Managing Director, Mr Rodrick Mahachi (herein referred to as Mahachi) told the court that in 2001 he was looking for office accommodation when he saw an advert in the newspaper advertising Officer Number 8, Beverly Building. He proceeded to the premises and saw a Mr Muguti in Office Number 8, Third Floor. He was advised that office accommodation was available but that the premises belonged to Beverly Building Society. However, Mr Muguti told him that he had to pay him for the partitions, carpets that he himself had fitted into the premises and other renovations. Rodrick Mahachi was agreeable and paid for that.

After he had made the payment the two of then proceeded to Beverly Building Society to see a Mr Ndlovu who was managing the 15^th Avenue branch of Beverly Building Society. When they were there Mr Muguti told Mr Ndlovu that Mr Mahachi was going to occupy the place which had been advertised in the newspaper. Mr Mahachi alleged that when he requested for a lease agreement from Mr Ndlovu he was told that it (the lease agreement) would come later since it would be processed from Harare. He, however, was allegedly given an account number for Beverly Building Society into which to deposit the rentals.

Rodrick Mahachi said the plaintiff immediately took occupation of the premises and began to sell computers and computer cartridges. He alleged that he had continued paying rentals for some time.

At one stage he left to go to Mtshabezi Hospital where he had some work to do. He then failed to pay his rental for about 2 or 3 months prompting Beverly Building Society to lock up the premises. He received a report to that effect from a young man he had left manning the office. Following that report he returned to Bulawayo and found that their office had indeed been locked up. The plaintiff's property had been moved to another room. He attributed his failure to pay rentals for 3 months to the fact that he had used the money on the Mtshabezi project which he was anxious to complete.

He then approached Mr Ndlovu and asked him to return the property. When he went into where the property had been put he discovered some of the property missing. Papers, envelopes and receipts were strewn all over the floor. Some of them had been thrown into the dust bin. When he confronted Mr Ndlovu about the missing property he (Ndlovu) allegedly said that would be known by one Tennyson since he had been present when the property was moved from the plaintiff's office to another.

He, in the company of Mr Ndlovu, confronted Tennyson who allegedly stated he suspected some employees of the defendant who had come from Harare to service the defendant's computers in Bulawayo. The employees were said to have been using the office in which the plaintiff's property had been put. Tennyson allegedly suspected them to have stolen the missing property.

Following the suggestion made by Mr Ndlovu the two went to see a Mr Moyo, the General Manager of the defendant, who promised to investigate the matter after Rodrick Mahachi had given him a list of the alleged missing property. The list of the alleged missing property was filed of record at page 7 to 8 of the plaintiff's bundle of documents. Rodrick Mahachi gave Mr Moyo a time frame within which to complete investigations but nothing was forthcoming within that period prompting him to hand the matter to his lawyers.

He went with his lawyer to collect the remaining property which they signed for. The signatories to the list were his lawyers, Tennyson, Mr Ndlovu and the witness himself. According to the list filed of record on page 5 to 6 of plaintiff's bundle of documents the collection was done on 11 April 2003. Rodrick Mahachi claimed that the loss of property caused his Mtshabezi project to collapse resulting in him failing to pay his employees.

Since the lease agreement was still between the defendant and AB Mining he was told to deposit the rentals into the account that AB Mining had with Beverly Building Society which is what he did and kept copies of his deposit slips.

Mr Ndlovu allegedly assured him that since Tennyson had said the missing items had been stolen by the defendant's employees full investigations would be carried out. He went on to say that the matter had been referred to the defendant's lawyers. He concluded by saying from then onwards the plaintiff should deal with him (Ndlovu).

In order to determine the prices of the items that went missing he obtained three quotations from reputable companies dealing in such items. Matkan, which was the cheapest of the three, gave a total value of US$37,810=80; Computer Shop's total value was US$40,497=25 and Bexley gave a total of US$44,378=50. The quotations were filed of record on pages 7, 8 and 9 of the plaintiff's bundle of documents.

Under cross-examination, Rodrick Mahachi was unable to say how much he had paid as rentals. He agreed that the arrangement to lease the premises was between him and Muguti. His lease agreement with the defendant would only be processed at the end of the AB Mining lease.

The witness said he did not report the matter to the police because Mr Ndlovu and Mr Moyo had assured him that full investigations would be carried out and he would be given a feed-back; which he did not get. When it was put to him that his quotations were hearsay his reply was that he asked for three quotations and was given the ones filed of record.

The court observes that the quotations are indeed inadmissible hearsay as their compilers were not called to testify in court.

The plaintiff closed its case after Rodrick Mahachi's testimony.

The defendant called two witnesses who were its former employees. The first was Tennyson Ndiweni who was employed as the defendant's Branch Controller of the 15^th Avenue and Main Street branches in Bulawayo. All communication from Head Office went through him.

His evidence was that he was not directly involved in the lease agreement between the defendant and AB Mining as that was the responsibility of one Goodness Ndlovu, the valuer, who had since left the defendant and was in Botswana.

When A B Mining was unable to pay its rentals it had to look for someone to occupy its office during the currency of the lease between it and the defendant. It found the plaintiff. Apart from the arrangement the plaintiff had made with AB Mining, which was represented by one Muguti, the plaintiff did not get a lease from the defendant. All it did was to move into the offices that were being leased by AB mining and paid rentals into AB Mining account.

The witness said the plaintiff took occupation of the offices in July 2001, but, by September 2001 was already unable to keep pace with its payments for rentals. No rentals were paid from October 2001 onwards.

When the defendant made efforts to find out why rentals were not being paid, Mr Mahachi, who was described as the proprietor of the plaintiff, could not be located. The employees of the plaintiff also professed ignorance of his whereabouts. Their belief was that he had gone to Botswana since he was not communicating with them.

Faced with the non-payment of rentals by the plaintiff, whose proprietor was nowhere to be found, Mr Ndlovu instructed the witness to instruct the Chief Messenger to remove the plaintiff's property from the office officially rented by AB Mining. The Chief Messenger, with a team of other six messengers, did the removal commencing after lunch to the end of business that same day.

The witness himself never handled the plaintiff's property. He was emphatic that he had no chance of stealing the property. He explained that it was not possible for him to do so as he had no keys to the building and did not even have the combination to the strong room door. As far as the witness was concerned that strong-room was a very secure place. He went so far as stating that it was impossible for anyone to remove property from there; the reason being that whoever has the key to the building does not have the key to the strongroom.

When Mr Mahachi eventually surfaced and approached the witness in connection with the property, he referred him to Learnad Moyo, the Administrator.

The witness averred that he next saw Mr Mahachi on the day he was handed the plaintiff's property from the strong room. The property was listed as it came out of the strong room. The original list was filed of record at pages 10 to 12 of the defendant's bundle of documents and Rodrick Mahachi signed it. Mr Mahachi complained that a lot of the plaintiff's property was missing and he was going to seek legal recourse. The witness, however, did not believe that whatever was missing, if any, could have gone missing from the strong room.

The witness revealed that Mr Mahachi had attempted to inflate the number of items that he claimed had gone missing. He alleged that 8 chairs had gone missing but a search in the building conducted in his presence established that he in fact had sold 4 chairs to two companies that used to share office space with him. The witness held a view that the list of items that allegedly went missing was far shorter than what Mr Mahachi wanted the court to believe.

Under cross-examination, the witness was emphatic that there was no lease agreement between the plaintiff and the defendant and reiterated that the plaintiff paid rentals into AB Mining account during the currency of its lease.

His story was supported by Learnad Nkonzo Moyo, a former employee of the defendant who used to be the Administrative Manager for Matabeleland. When outlining the procedure of how the defendant leases out premises he said when premises fall vacant the practice was to advertise them. Interested parties would submit their applications. The successful applicant would be recommended for a lease agreement in writing. The proposed lease agreement would then be forwarded to Head Office in Harare where the final agreement was prepared within three or four days; hence, the successful applicant would get his lease agreement immediately after that.

The above procedure did not take place in respect of the plaintiff. Mr Moyo first learnt about the plaintiff's presence in the defendant's premises when it had already taken occupation. He also learnt that the plaintiff was occupying the office with the blessing of AB Mining whose lease with the defendant was still extant. He was emphatic that the plaintiff itself never went into a lease agreement with the defendant.

The witness said he did not think that the plaintiff's claim was of any significance. He thought the claim involved little items. He did not get any report about the defendant's employees stealing the property. Disciplinary action would have been taken if that had happened.

Under cross-examination, it was suggested to the witness that the defendant should have warned the plaintiff that the office would be locked due to its non-payment of rentals. His reply was to the effect that Mr Mahachi was regrettably nowhere to be found and there were reports that he could have been somewhere in Botswana. He gave the same answer when it was put to him that the defendant should have taken legal action on discovering that the plaintiff was an illegal tenant.

What comes out clearly from the evidence adduced by the defendant is that the plaintiff had no lease agreement with the defendant. This much was accepted by Mr Mahachi. Consequently, the defendant had no legal relationship with the defendant and its occupation of the premises was merely tolerated on the basis that it would fulfill a role previously fulfilled by AB Mining and Equipment Supplies (Private) Limited.

HH231-10 : AGRICULTURAL BANK OF ZIMBABWE LTD t/a AGRIBANK vs NICKSTATE INVESTMENTS (PVT) LTD and RICHARD MAKWARA and PLAXEDES MAKWARA
Ruled By: GOWORA J

The plaintiff in this matter is a commercial bank which is primarily involved in lending to persons, both corporate and individuals, engaged in agricultural pursuits. It is a statutory corporation. In 2006 it flighted an invitation for the tender of supply of trucks of an engine capacity ranging from 1.8 ...

The invitation is dated 2 November 2006 and calls upon established companies to urgently tender for the supply and delivery of brand new trucks within the range of 1.8 litres to 2.0 litres. Certain other specifications not germane to this dispute are listed. The invitation then spells out information that is 'mandatory' to enable the plaintiff to make a concrete acceptance of the quotation and contract decision.

Firstly, it is stated that prices quoted shall be in Zimbabwe dollars, which price shall be fixed during the bidder's performance of the contract and not subject to any variation of any account. The invitation also spelt out that a bid submitted with an adjustable price condition would be treated as non-responsive and would be rejected. Prices were required to be inclusive of value added tax. The invitation to tender also required the company profile of the bidder as well as a list of major clients and contactable references. Added to this was the requirement of payment schedules, delivery and fallback position should delivery not be effected as anticipated. Other stipulated requirements are not germane to this dispute and will consequently not be referred to.

The first defendant was amongst the companies that responded to the tender.

After an adjudication process it was decided to award the tender to the first defendant and a contract for the supply of the vehicles was concluded between the parties.

Two days after the signing of the contract the plaintiff paid an amount in excess of $1.8 billion Zimbabwe dollars into a current account operated by the first respondent with a commercial bank. The contract provided for specific dates for delivery of the vehicles to the plaintiff. Needless to say, the delivery schedule stated in the Delivery clause was not adhered to as the defendant defaulted, and, in fact, it has not made any delivery up to today, necessitating the plaintiff issuing summons for relief from this court.

HH277-10 : BENCHILL INVESTMENTS (PVT) LTD vs BATTERY WORLD (PVT) LTD
Ruled By: KUDYA J

In its declaration, the plaintiff avers that a contract of sale was concluded with the defendant on 13 August 2008. The evidence of Godwin Dingwiza was that when he entered the town branch of the defendant he asked Collin Chakupa for a quotation for 50 batteries. Collin Chakupa had them in stock and he wrote out ...

In its declaration, the plaintiff avers that a contract of sale was concluded with the defendant on 13 August 2008.

The evidence of Godwin Dingwiza was that when he entered the town branch of the defendant he asked Collin Chakupa for a quotation for 50 batteries. Collin Chakupa had them in stock and he wrote out the quotation to the tune of ZW$227,798=. Godwin Dingwiza indicated his intention to purchase the batteries through an electronic bank transfer. Collin Chakupa advised him to utilize a certified bank cheque. Godwin Dingwiza left and went to his bank where he applied for a bank cheque. He collected the bank cheque the following day. He went back to the shop to purchase the batteries on 15 August 2008 and found the batteries out of stock.

In determining whether a contract of sale was concluded, it is necessary to return to the basics of a contract of sale. I must determine the stage at which Godwin Dingwiza made the offer and when Collin Chakupa accepted it. CHRISTIE's The Law of Contract in South Africa 3^rd ed…, states that-

“There seems no good reason for a member of the public, or the court, to conclude that a shopkeeper's action in exposing goods for sale should be interpreted as an offer (as suggested by Wessels) or as a conditional offer (as suggested by Kahn) or as a mere declaration of intention (as suggested by Winfield) to the exclusion of other possibilities. Tacit or implied contracts and tacit or implied terms in contracts are not inferred unless it is necessary, and not merely reasonable, to do so, and the best conclusion seems to be that the attachment of a price ticket to goods exposed for sale, without more, creates no necessary inference of a firm offer of those goods for sale.”

The position in England is set out in BENJAMIN's Sale of Goods 3^rd ed….,in these terms-

“In the law of sale of goods, it is well settled that the display of goods in a shop or shop-window is ordinarily nothing more than an invitation to treat. The shopkeeper does not make an offer to sell; it is the customer who makes an offer to buy, which the shopkeeper may accept or reject at his pleasure. There is, therefore, no sale or agreement to sale, even in a self-service shop or supermarket…,. The same general principle applies in the case of an advertisement, catalogue or price list of goods: each is normally construed as an invitation to treat, for otherwise (it is said) a seller whose stock is necessarily limited might be made liable to an indefinite number of buyers.”

While, as noted by Dr. Hackwill in MACKEURTAN's Sale of Goods in South Africa 5^th ed…., “no such distinction exists in our law” between a sale and an agreement to sell as in English law; it seems to me that the general principles in regards to goods displayed in a shop or shop-window is the same. See Crawley v R 1909 TS 1105 cited by CHRISTIE in The Law of Contract in South Africa 3^rd ed. …,.

Once Collin Chakupa had indicated that the batteries were in stock and supplied Godwin Dingwiza with the purchase price, if Godwin Dingwiza had $227,798= in cash he would have made the offer to purchase them by handing over the cash to Collin Chakupa who would have accepted the offer by receiving the cash. At that stage, the plaintiff and the defendant would have concluded a contract of sale. The items were identified, the price known or easily ascertained and the parties were of one mind, the plaintiff to buy and the defendant to sell.

The facts reveal that Godwin Dingwiza did not make a cash sale….,. Godwin Dingwiza went away. In my view, Collin Chakupa would not know whether Godwin Dingwiza would make a firm offer to buy until he brought the bank certified cheque.

In any event, the quotation that was supplied to Godwin Dingwiza by Collin Chakupa fell into the category of an invitation to treat. In Westinghouse Brake & Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd 1986 (2) SA 555 (A)…, CORBETT JA held that the appellant's quotation constituted an invitation to treat or to do business while the respondent's order constituted a contractual offer.

In the present case, it was common cause between the parties that a bank certified cheque was as good as cash. The bank certified cheque came on 15 August 2008. It was common cause that the 50 batteries required by the plaintiff were no longer in stock. They had been sold to other customers. The failure by Collin Chakupa to reserve the batteries for Godwin Dingwiza, together with the added failure by Godwin Dingwiza to take issue with Collin Chakupa over the disposal of the 50 batteries that had been in stock demonstrates that there was no contract of sale that had come into existence on 13 August 2008.

Even though Collin Chakupa was not called to testify, it was never Godwin Dingwiza's testimony that after he expressed an intention to buy Collin Chakupa advised him that he was reserving the batteries for him in anticipation of payment. After all, when Godwin Dingwiza left on 13 August 2008 with the quotation he was being invited to come and do business with the defendant and make an offer to purchase the batteries once he had a bank certified cheque.

On the evidence of Godwin Dingwiza, I am satisfied that no contract of sale was concluded between the plaintiff and defendant on 13 August 2008.

HHB93-10 : REGINA MLISA vs THE STATE
Ruled By: CHEDA J and NDOU J

The salient facts of the case are the following. It is common cause in count 1, that the appellant approached the complainant who runs CP Cunningham, a commodity broking company, for a loan of Z$950 million on 30 November 2005. The appellant was given Z$350 million against which she issued the complainant a postdated cheque of ...

The salient facts of the case are the following.

It is common cause in count 1, that the appellant approached the complainant who runs CP Cunningham, a commodity broking company, for a loan of Z$950 million on 30 November 2005. The appellant was given Z$350 million against which she issued the complainant a postdated cheque of the same amount which she averred will be met on 5 December 2005. The cheque was dishonoured on presentation.

In count 2, it is alleged that the appellant approached the complainant once more for a loan of Z$270 million. She said the money was going to be paid by her husband the following day. The complainant's husband refused to pay as he stated that he had not given the appellant the authority or mandate to borrow the amount as she had told the complainant.

The appellant's defence is that she paid back the monies advanced as loans. She stated that the money now demanded by the complainant is interest on the amounts advanced to her. However, no record of such payment was availed during the trial in the court a quo.

Therefore, the question for determination in the trial court was whether in the circumstances the offences of fraud had been committed and whether in the final analysis the State had discharged the onus on it. In other words, whether the State had proved beyond reasonable doubt that when the appellant made the representations she was lying and she impliedly had no intention to keep the promises.

The charge in count 1 has to do with a post-dated and dishonoured cheque. It was held in S v Tinago SC197-88 that in such cases the state of mind of the accused at the time of the issuing is all important. Proof of that wrongful state of mind is not easy. It is trite that the onus is on the State to show that at the time the appellant made the representations, she knew she was lying, that she never, at the time when she made them, had an expectancy of being able to honour the cheque – S v Copley 1973 (4) SA 111 (RAD). Where the accused had no honest belief that the cheque would be met on presentation, he is guilty of fraud – S v Jakarasi 1983 (1) ZLR 218 (S); S v Van Neikerk 1981 (3) SA 787 (T); R v Deetlefs 1953 (1) SA 418 (AD) and R v Blackmore 1959 (4) SA 486 (FC). An accused cannot be convicted if the evidence reveals that at the time the cheque was drawn, he or she honestly believed that it would be met on the post date.

In casu, the appellant took out a loan. She made out a post-dated cheque. The complainant banked the cheque on the post-date and it was dishonoured. There was no reason for the complainant to bank the cheque earlier than the agreed date if she had been told that the appellant had no funds. After the cheque had been dishonoured, the appellant approached the complainant to state that she had a problem and asked for time to pay. As alluded to above, the question is whether she had the potential to pay when she made out the cheque. The court a quo arrived at a decision that the appellant never had any expectancy to meet the post-dated cheque and did not intended to do so.

I agree with the said finding of the trial court……,.

Criminal law is not there to punish people who break promises – but only those who make promises at a time when they have no intention of performing – South African Criminal Law and Procedure by PMA HUNT (2^nd Edition by JRL Milton)…,.

In respect of count 2, she made a representation to the complainant that she would repay the following day with the aid of her husband. When her husband was contacted the following day, he refused to pay as he had not given the appellant the mandate to raise the loan in the first place.

It is trite that fraud charges are often based on what the accused has represented or promised ostensibly in regard to some future time. The true inquiry in such cases is whether the accused has honesty impliedly expressed his present state of mind in regard to the matter represented, or in regard to the promise – South African Criminal Law and Procedure by PMA HUNT (2^nd Edition by JRL Milton)…,.; S v Harper 1981 (2) SA 638 (DC)….,.; S v Copley 1973 (4) SA 111 (RAD)….,.; S v Hubbard A40-75 and S v Black 1975 (1) RLR 355 (G).

In casu, the appellant obtained the loan by falsely representing that her husband had agreed to pay the complainant the following day when he returned from his travel. She had not spoken to her husband about the loan before she approached the complainant stating that he had made such an undertaking. The appellant's state of mind was dishonest when she made the promise. She knew she had no money to repay the following day. She knew that her husband was not even aware of the presentation she was making to the complainant. When the complainant approached her husband he revealed that the appellant had lied about his alleged involvement. She lied in order to defraud the complainant.

SC54-17 : NDABEZINHLE MAZIBUKO vs THE BOARD OF GOVERNORS, CHRISTIAN BROTHERS COLLEGE and THE NATIONAL INCOMES AND PRICING COMMISSION and THE SECRETARY, MINISTRY OF EDUCATION
Ruled By: GARWE JA, GOWORA JA and HLATSHWAYO JA

WHAT IS AN IMPLIED TERM? In general, the courts are reluctant to imply terms into a contract at common law. It is the contracting parties' role to agree the terms of their particular agreement. It is generally not considered to be the role of the courts to re-write a contract for the parties. Freedom ...

WHAT IS AN IMPLIED TERM?

In general, the courts are reluctant to imply terms into a contract at common law. It is the contracting parties' role to agree the terms of their particular agreement. It is generally not considered to be the role of the courts to re-write a contract for the parties. Freedom of contract prevails. The limited circumstances where a court will imply a term into a contract at common law relate to;

(a) Terms implied through custom or trade usage (where a particular term is prevalent in a trade);

(b) Tacit terms or terms implied from the facts, which include the business efficacy test (i.e. would the contract make business sense without it?) and the officious bystander test (i.e. would the parties have been agreed on the matter had they thought about it?); and

The third category clearly has no application to this case.

TACIT TERM OR TERMS IMPLIED FROM THE FACTS

The Law on what constitutes a tacit term is now well settled.

In Douglas v Baynes [1908] TS 1207, the court cited with approval remarks in Hamlyn & Co. v Wood & Co. [1891] 2 QB 494 that:-

“The court ought not to imply a term in a contract unless there arises from the language of the contract itself, and in the circumstances under which it is entered into, such an inference that the parties must have intended the stipulation in question that the court is necessarily driven to the conclusion that it must be implied.”

In Reigate v Union Manufacturing Co. (Ramsbottom Ltd & Another) [1918] 1 KB 592, 605 the court remarked:-

“A term can only be implied if it is necessary in the business sense to give efficacy to the contract; that is, if it is such a term that it can confidently be said that if, at the time the contract was being negotiated, someone had said to the parties; “What will happen in such a case,” they would both have replied, “Of course, so and so will happen; we did not say that; it is too clear.”

In Discovery Life Limited v Barthram (71989/2013) [2015] ZAGPPHC 110 (6 March 2015), the court remarked:-

“The test for inferring a tacit term is whether the parties, if asked whether their agreement contains the term, would immediately say: “yes of course that is what we agreed.” Similarly, an implied term is used to denote an unexpressed provision of the contract which derives from the common intention of the parties as inferred by the court from the express terms of the contract and the surrounding circumstances…,.

A tacit term can be imported into a written contract where there are expressed terms. When that happens, the tacit term supplements the expressed terms in the contract and it thus forms much part of the contract as its express terms. Such a tacit term for it to be imported should not amend, contradict or vary the contract, instead it must form part of the contract with its expressed terms.”

In Standard Bank of South Africa Ltd & Another s Ocean Commodities Inc & Others 1983 (1) SA 276A…,, the court remarked:-

“In order to establish a tacit contract, it is necessary to show, by a preponderance of probabilities, unequivocal conduct which is capable of no other reasonable interpretation than that the parties intended to, and did in fact, contract on the terms alleged. It must be proved that there was, in fact, consensus ad idem…,.

It appears to be generally accepted that a term may not be tacitly imported into a contract unless the implication is a necessary one in the business sense to give efficacy to the contract.”

TRADE USAGE

In respect of terms implied by trade usage, the case of Golden Cape Fruits (Pty) Ltd v Fotoplate (Pty) Ltd 1973 (2) SA (C) 642, is authority for the proposition that the parties to a contract would be bound by, and the contract in question would be subject to, an alleged trade usage:

“Provided that it is shown to be universally and uniformly observed within the particular trade concerned, long-established, notorious, reasonable and certain, and does not conflict with positive law (in the sense of endeavouring to alter a rule of law which the parties could not alter by their agreement) or with the clear provisions of the contract.”…,.

The above case further emphasized the need for the person alleging a usage to prove it. At p 646, the court cited with approval remarks in Crook v Pedersen Ltd 1927 WLD 62, 70 that:

“The evidence must amount to something more than mere opinion; it must establish the fact of the existence of the usage, and provide instances of the usage having been acted upon, otherwise the testimony will be of little weight.”

English law adopts a similar approach.

The Golden Cape Fruits (Pty) Ltd v Fotoplate (Pty) Ltd 1973 (2) SA (C) case…, cites HALSBURY, vol. II, secs. 367 and 369. HALSBURY states:-

“A usage is proved by the oral evidence of persons who become cognizant of its existence by reason of their occupation, trade, or position. The evidence must be clear and convincing; it must also be consistent…,. The evidence of witnesses, in order to prove the existence of a usage, must amount to something more than mere opinion; it must establish the fact of the existence of the usage, and provide instances of the usage having been acted upon…,.”

BASIS FOR IMPLIED TERM MUST BE ESTABLISHED

It is a requirement that a person relying on an implied term must prove the circumstances from which he maintains it should be implied - CHRISTIE, Business Law in Zimbabwe…,; CHRISTIE, The Law of Contract in South Africa 3^rd Ed…,. See also Golden Cape Fruits (Pty) Ltd v Fotoplate (Pty) Ltd 1973 (2) SA (C).

Further, the party relying on an implied term must set out, in his pleadings, the circumstances from which he maintains it should be implied - CHRISTIE, Business Law in Zimbabwe…,.

The point that needs to be made, therefore, is that, for one to rely on trade usage clear, convincing and consistent evidence which amounts to something more than opinion must be led to establish the existence of such trade usage. In the case of a tacit term, it is necessary to prove, on a balance of probabilities, conduct and circumstances which are so unequivocal that the parties must have been satisfied they were in agreement on the tacit term - CHRISTIE, The Law of Contract in South Africa 3^rd Ed…,.

WHAT ARE SCHOOL FEES?

It is important, for a proper determination of the issues raised before this court, that the term “school fees” be defined. I say this because, as the present case reveals, the term might mean different things to people in different places.

The School Fee Abolition Initiative (SFAI) was launched by Unicef and the World Bank in 2005. In its Operational Guide: Six Steps to Abolishing Primary School Fees…, it is stated:-

“It is often hard to define school fees precisely, because what constitutes them varies from place to place and time to time. In addition, there is frequently a difference between the official definition of school fees (what the Governments indicate should or can be collected) and what is actually collected.”

The Collins English Dictionary defines school fees as the money paid for a person to go to school. School fees can be broken down into direct fees and other private expenses.

The School Fee Abolition Initiative Guide further states:-

“Direct fees include fees paid directly to the school or school system (tuition, examination fees, activity or sports fees, building or building maintenance fees, school development fees, boarding fees). Other fees include those that involve payments to commercial entities for books, supplies, uniforms, transportation and meals/snacks and 'voluntary' contributions made to PTAs. The types of fees charged vary across countries and regions…,. In some cases, children pay schools directly for books and uniforms; in others PTAs' collect funds that cover basic school expenses, such as teacher salaries or parts thereof…,. Some schools or teachers may collect fees that are unauthorised or even illegal, such as fees for end-of-year parties, teachers' gardens, or extra–tutoring or private lessons.”

The authors KATTAN RB & BURNETT N in their article User Fees in Primary Education, 'Education Sector, Human Development Network - World Bank, July 2004, state as follows:-

“General discussion of user fees is often explicitly or implicitly about tuition fees. In practice, however, there are a large number of different 'fees' that private households sometimes have to pay for publicly provided primary education, including tuition fees, textbook fees or costs and/or rental payments, compulsory uniforms, Parent Teacher Association (PTA) dues, and various special fees such as exam fees, community contributions to district education Boards, and the like.”

The Education Act [Chapter 25:04], in section 13, provides that the Minister shall prescribe the fees which shall be payable in Government schools, for instruction, accommodation, and, additional fees for instruction in special subjects or special educational courses. In addition, in terms of section 14, Government School Heads are required to establish a general purpose fund in aid of extra curricular activities and facilities and into which moneys received by the school, not constituting tuition or boarding, shall be paid into. Tuition and boarding fees are required to be paid into the School Services Fund in terms of section 30 of the Audit and Exchequer Act [Chapter 22:03].

In terms of the Education Act [Chapter 25:04], non-governmental schools are allowed to charge fees and levies and to increase them subject to approval by the National Incomes & Pricing Commission. Like Government schools, they are also required to establish a School Services Fund into which all monies paid as fees or levies shall be deposited.

In determining whether to approve a fee or levy of a private school, the National Incomes & Pricing Commission will consider, inter alia, the costs of operating and maintaining the school as well as any programme for improving the facilities at the school.

The Education Act does not provide a definition of what constitutes school fees or levies. What is clear is that tuition and boarding fees are remitted to the Government whilst the remaining fees or levies are deposited into a school fund. It would appear that what is sometimes termed a levy is, in fact, a fee that is not remitted to the Government but is retained to sustain other day to day operations of the school. The distinction between levy and fee therefore appears to be blurred, particularly in the case of a private school.

From the above, it is clear that there is no set definition of what constitutes school fees or even school levy. A sports fee in one school may be termed a sports levy, particularly in Government institutions.

WHETHER SCHOOL FEES IMPLICITLY INCLUDE TEXTBOOKS AND STATIONERY

It is therefore clear, from the aforegoing, that school fees charged by different schools do not necessarily include a text book and stationery fee. The onus was on the appellant to prove, a quo, that the provision of textbooks and stationery is an implied term of the contract. The fact that some schools include textbooks and stationery in the school fees that they charge does not necessarily mean that the same applies to all schools. Nor does it constitute an implied term that a school is obliged to supply text books and stationery once a pupil has paid the school fees charged by the school.

The Education Act acknowledges that one of the factors to be taken into account in determining the quantum of school fees to be charged by a private school is the cost of operating and maintaining the school or the cost of improving the facilities provided at a school. Such costs would obviously vary from school to school. A new school might find it necessary to charge higher fees than an old, established school, in order to put up necessary infrastructure. In the case of established schools, the fees have to be related to the quality of the facilities at the school. It follows from this that a comparison of Christian Brothers College, on the one hand, and other private schools, on the other, does not assist in resolving the issue whether the provision of textbooks and stationery is an implied term in a contract between a parent and the school.

The appellant did not, either a quo or before this court, clarify whether his cause of action was based on a trade usage or a tacit term.

On the facts of this case, the argument on trade usage (if such was the argument) could not have been successfully relied upon by the appellant for two reasons;

(i) Firstly, no evidence of such usage was led a quo.

There was an attempt, only during oral submissions before this court, to show that there was such usage. In the court a quo, the attitude of the appellant was that the usage was so obvious that it need not have been proven.

(ii) Secondly, as earlier highlighted, what constitutes school fees differs from place to place.

In short, therefore, the appellant did not prove that the decision by some schools to provide textbooks and stationery is universally and uniformly observed by all private schools in Zimbabwe.

On that basis, therefore, the appellant's argument on trade usage is without merit.

As regards the question whether there was a tacit term, it is clear from the facts that the school has never provided textbooks and stationery since its inception and each parent is required to purchase such items for his child. The standard contract signed by the parent makes it clear that parents will be required to meet, over and above the school fees they pay, other expenses. The contract makes it clear that the parent is required to supply uniforms, equipment and other requirements as may be stipulated by the school from time to time. The school has always made it clear that parents should provide text books and stationery.

In these circumstances, a tacit term cannot be imported into the contract in contradiction to the express term in the contract requiring parents to meet other expenses as may be determined by the school from time to time.

We are not told how, on the facts, either the business efficacy test or officious bystander test, would be applicable.

HH797-15 : PETER KAZINGIZI and THERESA MUCHABAIWA KAZINGIZI vs EQUITY PROPERTIES (PVT) LTD
Ruled By: MATHONSI J

On 18 November 2013, the parties signed a written undertaking to enter into a Sale Agreement. It reads: “In consideration of Peter Kazingizi and Theresa Muchabaiwa Kazingizi, of 6185 Rosedeane Drive, Bloomingdale, Harare agreeing to: (a) Purchase a certain piece of land situated in the District of Salisbury called Number 2073 Salisbury Township, measuring 2270 square metres being a subdivision of Lot ...

On 18 November 2013, the parties signed a written undertaking to enter into a Sale Agreement. It reads:

“In consideration of Peter Kazingizi and Theresa Muchabaiwa Kazingizi, of 6185 Rosedeane Drive, Bloomingdale, Harare agreeing to:

(a) Purchase a certain piece of land situated in the District of Salisbury called Number 2073 Salisbury Township, measuring 2270 square metres being a subdivision of Lot 3 of Bannockburn, held under deed of transfer number 9068/2008. The said subdivision is hereinafter referred to as the 'Golden CT Stand.'

(b) Pay US$ 23,495= (twenty three thousand four hundred and ninety five United States Dollars) as deposit and thereafter pay US$23,494= (twenty three thousand four hundred and ninety four United States dollars) as further deposit in three equal monthly instalments commencing 31 December 2013 and ending 28 February 2014 plus interest of 12% per annum on the above further deposit on or before 28 February 2014.

We, the undersigned, on behalf of Equity Properties (Pvt) Ltd, do hereby undertake to enter into a written agreement of sale between Equity Properties (Private) Limited and Peter Kazingizi and Theresa Muchabaiwa Kazingizi in respect of the above mentioned Golden CT Stand upon receipt of the total deposit of US$46,989= and the respective interest.

This undertaking is not an agreement of sale but a commitment to enter into an agreement of sale based on our standard Agreement of Sale which is signed by two authorised signatories, failure of which Equity Properties (Pvt) Ltd undertakes to refund Peter Kazingizi and Theresa Muchabaiwa the money paid without any delay.

This undertaking is valid until 28 February 2014.”…,.

As I have said, the undertaking was signed by the parties – two representatives of the defendant and the two plaintiffs. It is worded in clear terms which admit of no ambiguity whatsoever and must therefore be given its ordinary grammatical meaning. As stated by McNALLY JA in Chegutu Municipality v Manyora 1996 (1) ZLR 262 (S)…,.:

“There is no longer magic about interpretation. Words must be taken in their context. The grammatical and ordinary sense of the words is to be adhered to as said in Grey v Pearson (1957) 10 ER 1216 at 1234;

'unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument in which case the grammatical and ordinary sense of the words may be modified so as to avoid that absurdity and inconsistency, but no further.'”

See also Madoda v Tanganda Tea Company Ltd 1999 (1) ZLR 374 (S); S v Nottingham Estates (Pvt) Ltd 1995 (1) ZLR 253 (S).

What is clear from that undertaking is that it is the defendant, in the main, which was making an undertaking to enter into “a written agreement of sale.” The undertaking was made in consideration of the plaintiffs “agreeing to purchase” the property and to pay the deposit of $46,989=. The plaintiffs did not really make any undertaking but it was recognised that they had to agree to purchase the property and to pay the deposit.

Clearly, the undertaking was not an Agreement of Sale but a mere commitment to enter into one - an invitation to treat. It could therefore not be enforced as a Sale Agreement.

The plaintiffs duly paid the deposit of $46,989= but when the defendant produced its standard Sale Agreement, they did not agree with the terms. They then decided not to enter into the Sale Agreement and demanded a refund of the deposit that they had paid. In response, the defendant wrote a “without prejudice” letter dated 9 April 2014 which reads in relevant part:

“By agreeing to the terms of the undertaking letter we did not expect them not to sign the Agreement of Sale.

In the said undertaking letter we undertake to refund the client without delay and as such are refunding them within 90 days. Your statement those '90 days cannot be said to be without any delay' is a matter of opinion. Furthermore, your client paid the US$46,989= over a period of more than 90 days. Your clients have refused to sign the cancellation agreement of payments made under the above mentioned undertaking rendering it difficult for us to sell the Stand and raise the money to refund them. Furthermore, their refusal to sign the said cancellation agreement of payments made under the above-mentioned undertaking letter, which incorporates a refund, makes it difficult to regard the abovementioned undertaking letter as an agreement which expired without performance. Equity Properties (Pvt) Ltd reserves the right to sue your clients for damages for not signing the said cancellation agreement. Equity Properties (Pvt) Ltd is still agreeable to refunding your clients within the 90 days as stated below provided your client signs the said cancellation agreement before the first payment date of;

(i) US$15,631= on the 24^th of April 2014;

(ii) US$15,631= on the 24^th of May 2014; and

(iii) US$15,631= on the 24^th of June 2014.

In this regard, we kindly request for your client's banking details or for them to call on our offices on the dates mentioned above.”

What was the defendant saying? How would one seek to cancel a non-existent agreement?

The undertaking it had made to the plaintiffs was that in the event of them not agreeing to purchase the property they would refund the money without delay. The plaintiffs did not agree to purchase the property but now the defendant wanted to impose new conditions not contained in the initial undertaking - and unilaterally for that matter. It could not lawfully do that.

Whatever the case, what is apparent from that letter is that the defendant appreciated that there was no Sale Agreement between the parties. It undertook to refund the money, but on new terms, and even set out a payment plan. Even its threat to sue was not to enforce a sale agreement but to seek damages arising out of the plaintiff's refusal to sign a cancellation agreement.

The defendant may have had a change of heart because after refunding only $20,631= in drips and drabs, it made an about turn upon receipt of the summons for payment of the balance of $26,353=. The defendant entered appearance to defend prompting the plaintiffs to make this application for summary judgment which the defendant is opposing.

In its opposing affidavit, deposed to by its Senior Manager, Kumbirai Matimba, the defendant asserts that it is not obliged to refund the balance, firstly, because its “without prejudice” offer to refund was not accepted; secondly, because, the plaintiffs refused to sign a cancellation agreement, and, thirdly, because in the undertaking letter, the plaintiffs gave up any right to negotiate the terms of the Sale Agreement, and, as such, are bound by the standard agreement even though it was never agreed.

In my view, that is a bogus defence….,.

Summary judgement is an extraordinary remedy in the sense that it denies a defendant who has shown an interest to defend a claim, the opportunity to do so. It is a procedure conceived so that;

“A mala fide defendant might summarily be denied, except under onerous conditions, the benefit of the fundamental principle of audi alteram partem…, when all the proposed defences to the plaintiff's claim are unarguable - both in fact and in law.” Chrisma v Stutchberry 197 (1) RLR 277.

It has been stated, conversely, that in order to succeed in defending a summary judgment application, the respondent must set out a bona fide defence by alleging facts which, if established at the trial, would entitle him to succeed. As stated by ZIYAMBI JA in Kingstons Ltd v L D Ineson (Pvt) Ltd 2006 (1) ZLR 451 (S)…,.:

“Not every defence raised by a defendant will succeed in defending a plaintiff's claim for summary judgment. Thus, what the defendant must do to raise a bona fide defence – a ' plausible case' – with 'sufficient clarity and completeness' to enable the court to determine whether the affidavit discloses a bona fide defence. He must allege facts which, if established, 'would entitle him to succeed.' See Jena v Nechipote 1986 (1) ZLR 29 (S); Mubayiwa v Eastern Highlands Motel (Pvt) Ltd (S) – 139-86; Rev v Rhodian Investments Trust (Pvt) Ltd 1957 R&N 273 (SR).”

In my view, the defendant does not even begin to set out any defence which, if established, would entitle it to succeed.

In fact, the defendant has no Sale Agreement to rely upon in refusing to refund the deposit. It was never entered into. Even the unexplained signature of the second plaintiff pales when considered against what transpired thereafter. In terms of the written undertaking letter of 18 November 2013; in the event that no agreement was entered into, it had to refund the money without delay. In compliance with that undertaking it repaid part of the money.

It is trite that where a person has two courses of action open to him, as the defendant had, to either refuse to refund the money on lawful grounds or refund it, and he unequivocally elects to take one of them, he cannot turn round afterwards and take the other course of action. The point was made in S v Marutsi 1990 (2) ZLR 370 that:

“It is trite that a litigant cannot be allowed to approbate and reprobate a step taken in the proceedings. He can only do one or the other not both.”

See also Trinity Engineering v Karimazondo & Ors HH672-15.

The defendant agreed to repay. It commenced repayments. It must therefore repay and cannot be allowed to twist and turn. It simply has no defence to talk about.

In the result, it is ordered that:

1. Summary judgement be and is hereby entered in favour of the plaintiffs as against the defendant in the sum of $26,353= together with interest at the prescribed rate from due date to date of payment in full.

2. Costs of suit on an ordinary scale.

HH228-17 : WILLIAM MUKUDU vs ESTERE STELLA MUKUDU and THE MASTER OF THE HIGH COURT and THE REGISTRAR OF DEEDS
Ruled By: TSANGA J

Section 10 of the General Law Amendment Act [Chapter 8:07] is very clear that a donation is not invalid just because it was not registered or notarially executed. It provides as follows; “10 Amendment of law in respect of formalities relating to donations No contract of donation shall be invalid solely by reason of the fact that it is ...

HB14-05 : SMART MALABA vs NOMATHEMBA FENNY MALABA
Ruled By: NDOU J

It is trite that a donation, schenking, is a contract whereby one person, who is not under obligation to do so, but out of sheer liberality, promises to give another person something without receiving anything in return. See Avis v Verseput 1943 AD; Estate Jager v Whittaker 1944 AD 246…,.; The Master v Thompson's Estate 1961 (2) ...

HH485-13 : LOVENESS KUDZANGA vs GODFREY KUDZANGA and THE REGISTRAR OF DEEDS and DEPUTY SHERIFF HARARE
Ruled By: MAWADZE J

The plaintiff issued summons out of this court on 17 August 2011 seeking an order compelling the first defendant to effect change of ownership of Stand No.9781 Kuwadzana Phase 3, Harare from his name to the plaintiff's name and that of Dickson Kudzanga within seven days of the date of judgment; that should the first defendant fail or refuse to effect change of ownership as requested, the Sheriff of Zimbabwe be authorised to sign any papers or documents as provided for the second defendant to effect change of ownership of the said Stand from the defendant's name to that of the plaintiff and Dickson Kudzanga's name….,.

The background facts of this matter are as follows;

On 18 December 1999, the plaintiff was joined in holy matrimony with the first defendant's son, Dickson Kudzanga. The plaintiff is therefore a daughter-in-law to the first defendant. Currently, the plaintiff resides at No.9781 Kuwadzana Phase 3, Harare and the first defendant at No. 22 Mukarati Road, Mufakose, Harare….,.

It is the plaintiff's claim that after solemnisation of her marriage to Dickson Kudzanga, in terms of the Marriage Act [Chapter 5:11], on 18 December 1999, and during the wedding ceremony of the plaintiff and her husband, the first defendant donated, or gave, a residential Stand No. 9781 Kuwadzana Phase 3, Harare as a present to the plaintiff and her husband.

It is common cause that at the material time Stand No.9781 Kuwadzana Phase 3, Harare was not fully developed and comprised of a single room and toilet. The plaintiff and her husband took occupation of the said property in that state in 2000. The plaintiff, in her declaration, stated that she, jointly with her husband. developed the said Stand and built a ten (10) roomed house which the plaintiff occupies to date.

It is the plaintiff's case that the marital relationship between the plaintiff and her husband developed problems and the plaintiff's husband deserted the matrimonial home, No.9781 Kuwadzana Phase 3, Harare and is now cohabiting with another woman.

According to the plaintiff, the first defendant, despite the donation of the said Stand to the plaintiff and her husband, on 18 December 1999, has not yet effected transfer of the Stand into the names of the plaintiff and her husband who became joint owners of this Stand upon the pronouncements by the first defendant at the wedding ceremony that he gave this said Stand as their sole and exclusive property. It is the plaintiff's contention that the first defendant has an obligation to effect change of ownership of the said Stand into the plaintiff and her husband's names and that the first defendant should be compelled to do so….,.

The first defendant, in his plea, denied that he offered a donation, as a wedding gift, a certain piece of land known as Stand No.9781 Kuwadzana Phase 3, Harare, to the plaintiff and her husband….,.

The first defendant contends that he has no legal obligation to transfer the said piece of land into the names of the plaintiff and her husband….,.

The first defendant stated that the plaintiff has no cause of action against the first defendant as the first defendant never donated the said Stand to the plaintiff or her husband. The first defendant said the fact of the matter is that the plaintiff and her husband have been staying at the said property at the benevolence of the first defendant…,.

The first defendant also prays for the dismissal of the plaintiff's main and alternative claim with costs.

In terms of the joint pre-trial conference minute, the following issues were referred for determination;

(i) Whether or not there was a donation of the immovable property, Stand No.9781 Kuwadzana Phase 3, Harare to the plaintiff and her husband by the first defendant. If yes, whether the donation is binding at law.

(ii) Whether or not the plaintiff and her husband constructed a ten-roomed house on the said premises.

(iii) Whether or not the first defendant has got the locus standi to evict the plaintiff from the owner's property.

The plaintiff, Loveness Kudzanga, gave evidence and called her aunt, Erica Maphosa, and a friend, Getrude Mukuto, as witnesses.

The first defendant, Godfrey Kudzanga, testified and called as witnesses; his wife, Agnes Kudzanga, his friend, Misheck Paradzayi Mutambirwa, and his son, who is also the plaintiff's husband, Dickson Kudzanga….,.

The Evidence

The plaintiff, Loveness Kudzanga, gave evidence; firstly, on the alleged donation, and, secondly, on the improvements she did on the property or house.

The plaintiff told this court that after lobola had been paid for her by her husband, Dickson Kudzanga, the marriage was solemnised on 18 December 1999 at the Anglican Church and the wedding ceremony later that day at Rutendo Hall in Harare. She said during the time for guests to give the donations the first defendant stood up, hand in hand with his wife, and pronounced to the present guests they were donating to the plaintiff and her husband, the newly-weds, the property or house in Kuwadzana Phase 3 which was just a core house composing one (1) room and toilet/bathroom. The plaintiff said it is the first defendant who made the pronouncement and that his wife, by conduct, endorsed the gesture as she congratulated the plaintiff and her husband referring to the donation….,.

The plaintiff did not fare very well as a witness under cross-examination in respect to the donation and her conduct thereafter. She was unable to explain why she had instituted these proceedings against the first defendant only excluding the first defendant's wife when the two made this donation jointly and also jointly own the property. Her reasoning was that the first defendant's wife was willing to pass transfer but the first defendant is the one who refused.

The plaintiff was at pains to explain why it took her 11 years to institute proceedings to compel or force transfer of the house.

She said, initially, she would ask her husband to advise his parents but nothing happened. The plaintiff said she trusted that her in-laws, that is, the first defendant and his wife would act in good faith as the first defendant's wife assured her between 2003 and 2004. The plaintiff said what jolted her into action, in 2011, was when some people came to view this house saying it was for sale. This prompted her to approach the first defendant who confirmed selling the house saying it was his property and flatly refused to effect transfer.

The plaintiff then responded by issuing summons out by this court.

The plaintiff, in her evidence, insisted that the donation was verbal and never reduced to writing. She said the book in which all the donations and gifts made were recorded cannot be found. She also said that the video recorded during the proceedings at the wedding ceremony, which could confirm the donation, cannot be found. She said that other than donating the property, the first defendant and his wife also gave a gift of Zimbabwe $1,000=.

The evidence of Erica Maposa, the plaintiff's aunt, and Getrude Mukuto, the plaintiff's friend, was to the effect that during the award of gifts at this wedding ceremony, at which both were present, the first defendant and his wife donated the property.

Erica Maphosa said that it is the first defendant who made the donation with his wife standing by his side. She said the first defendant and his wife had also paid, as a gift, Zimbabwean $10,000= not $1,000=. Erica Maposa said she only learnt, later, that the first defendant was now unwilling to transfer the house to the plaintiff and her husband's names. She said she confronted the first defendant who told her, in no uncertain terms, that this property was his.

Getrude Mukuto told the court that the donation by the first defendant was verbal. She had no further evidence to give in this regard.

The first defendant, Godfrey Kudzanga, told the court that he never donated the house, jointly-owned by him and his wife, to the plaintiff and her husband.

He resides at No. 22 Mukarati Road in Mufakose in Harare in a house he inherited from his late mother. The first defendant told the court that he had been on the housing list for a long time and is employed. He said he was then offered the house in issue by Zimbabwe Building Society, as per exhibit 5, and that he jointly owned Stand No.9781 Kuwadzana Phase 3, Harare with his wife. He produced exhibit 6, an agreement which includes his wife as a joint owner of the property. The first defendant said he secured mortgage finance which he repaid in monthly instalments deductions from his salary. He was employed by Dairiboard Zimbabwe as a mechanic. Exhibit 7 is proof of such payments.

He disputes that the plaintiff paid for the property's initial purchase price or any such price.

In relation to the wedding ceremony, the first defendant said both the plaintiff and his son, Dickson, were not employed hence he sponsored, fully, the costs of the wedding including buying some food, meat and paying lobola for Dickson. At the ceremony, he said he and his wife donated, as a wedding gift, Zimbabwean $10,000= cash, which, by then, was a significant amount of money.

He categorically denied donating this property or house.

He said he acquired the property, being a core house, in 1998, and his two sons, Dickson and Dennis, were staying there as water and electricity had been connected. The first defendant said it was only a week after the wedding ceremony that he offered his son, Dickson, and his new wife, the plaintiff, the house to stay not that the property was now their own.

It is surprising that the first defendant was not cross-examined on the issue of the donation by counsel for the plaintiff. His evidence in that regard remained largely unchallenged.

He was not cross examined on the alleged refusal to pass transfer to the plaintiff and her husband….,.

Misheck Paradzai Mufambirwe, a 72 year old friend of the first defendant since the early 1970s, a neighbour in Mufakose, and a fellow Anglican CPCA church member, corroborated the first defendant that no donation of the property was made during the wedding ceremony.

He said he attended the wedding and was responsible for playing music. No useful questions were put to him.

Agnes Kudzanga is the first defendant's wife and they have five (5) children who are; Dickson, Mary, Amos, Macylen and Memory in that order. All are now married. Mary is in the United Kingdom. Memory and Macylen in Darwendale. Dickson, the plaintiff's husband, and Dennis are in Harare.

Her evidence was that at the wedding ceremony she and her husband donated Zimbabwean $10,000= and not the house. She told the court that she jointly owns the property with her husband, the first defendant. She denied ever agreeing to transfer the property into the names of the plaintiff and her husband. She said she had no reason to do so as no such donation was made and the plaintiff and her husband, while in the United Kingdom, had bought their own Stand in Harare.

Again, no useful question in this regard was put to her.

Dickson Kudzanga is the plaintiff's estranged husband who said he left the matrimonial home in 2011 after the plaintiff obtained a protection order against him barring him from visiting the matrimonial home which is the property in issue. He told this court that at the wedding ceremony his father, the first defendant, and his mother, donated Zimbabwean $10,000= only and not the house.

He denied ever asking his parents to transfer the property into his name or that of the plaintiff. He also denied authorising the plaintiff to institute the proceedings on his behalf saying summons were issued out when he was, in fact, in South Africa.

Dickson Kudzanga said the plaintiff was untruthful about the donation of the property and challenged her to produce the DVD recorded at the wedding which he said is in the plaintiff's possession. He said all what his parents did after the wedding were to offer him and his wife, the plaintiff, a place to stay in January 2000 at this house hoping that with time they would find their own accommodation. That is why he said while in United Kingdom he and the plaintiff purchased a Stand in Harare which is in their joint names although they failed to develop it.

The question this court has to answer is whether, on the evidence outlined, it has been proved, on a balance of probabilities, that a donation of the said property was made by the first defendant to the plaintiff and her husband.

Let me turn to the law as regards donations.

The renowned author R.H. CHRISTIE 1983 Ed…, in his book Law of Contract in South Africa describes a donation, at law, as a contract where the essential elements of a contract of offer and acceptance are to be present if there is to be a valid contract.

ALMER's Precedents of Pleadings by L.T.C HARMS with the assistance of J.H. HUGO 3^rd Ed…, defines a donation as follows;

“A true donation is an agreement whereby the donor, motivated by pure liberality, undertakes to give a donee a gift without receiving, or having received, or expecting to receive any advantage in return for it.”

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

The first and second issues are related and raise one fundamental issue. That issue is whether the court a quo should have referred the dispute on whether or not the donation was remuneratory to trial. The position is now well established that not every dispute of fact in motion proceedings has to be sent for trial. The correct ...

The position is now well established that not every dispute of fact in motion proceedings has to be sent for trial. The correct approach in this regard was enunciated by this Court in Zimbabwe Bonded Fibreglass (Pvt) Ltd v Peech 1987 (2) ZLR 338 where GUBBAY JA…, stated…,:

“It is, I think, well established that in motion proceedings a court should endeavour to settle the dispute raised in affidavits without hearing of evidence. It must take a robust and common sense approach and not an over-fastidious one; always provided that it is convinced that there is no real possibility of any resolution doing an injustice to the other party concerned.”

It is common cause that there was a dispute on the papers as to the extent to which the appellant contributed towards the household expenses of the couple and whether the donation made to him was in exchange for some services that he had rendered to the respondent's late mother.

The court a quo reached the conclusion that the donation was a simple one.

I am not persuaded that the court erred in reaching this conclusion. The court a quo did accept that the appellant had been generous with cash gifts for birthdays and anniversaries. The court also concluded that the sum of 10,000 pounds sterling given to the respondent was not a gift at all as it had subsequently been taken and paid over to the appellant's daughter who was in need of financial assistance. This was in the year 2002. On the papers, the sum of 10,000 pounds given to the respondent could not have induced the respondent to donate the piece of land to the appellant. In other words, it could not have been a reciprocal donation. I say this because the agreement to transfer the land in question was signed at Bulawayo in 1995. This was long before the appellant gave the respondent the sum of 10,000 pounds. In her answering affidavit, the respondent says that the sum was only given to the respondent in the year 2000 but was subsequently taken away in the year 2002.

The court a quo also dismissed the appellant's claim that the donation had been made because of services he had rendered to the respondent's late mother during the last few months of her life. That claim is highly improbable, and, in my view, the court a quo cannot be said to have misdirected itself in rejecting it. The assistance the appellant says he gave was not out of the ordinary. It was the kind of assistance that any son-in-law would have been expected to give to an ailing mother-in-law. In the particular circumstances of this case it seems improbable that the donation would have been made because of the assistance he gave.

The claim by the appellant that he expended certain sums of money to improve security at the residence of the respondent's mother and in improving a piece of land donated to the respondent's son remained a bald one. The law is clear that bald and unsubstantiated allegations are not sufficient. See Akhtar v Min of Public Commission SC173-97.

In all probability, the donation was made because, at that time, the respondent was happy with the appellant and the relationship between the two was a good one.

All the facts considered, I am satisfied that the disputes of facts were capable of resolution on the papers and that the court a quo did not err when it came to the conclusion that the circumstances pointed towards a simple rather than remuneratory gift….,.

In the case of a remuneratory donation, there can be no revocation - even for ingratitude. MANFRED NATHAN, Common Law of South Africa, Vol.11, 2^nd ed…,.

In the case of donations between spouses, the common law position has been that a donation inter vivos between spouses is prohibited subject to certain exceptions. See LEE & HONORE, Family Things and Succession, 2^nd ed by ERASMUS…,.

That common law rule no longer applies in this country. See section 11 of the General Law Amendment Act [Chapter 8:07]. Consequently, donations between spouses are now permissible.

The common law position, however, remains that the donor may, at any time, revoke such a donation. See LEE & HONORE, Family Things and Succession, 2^nd ed by ERASMUS…,.

That position has previously been accepted in this country. See, for example, Hay v Hay 1956 (3) SA 527; Phoenix N.O. v Dyer Smith N.O. & Anor 1968 (3) S.A. 145.

Reciprocal and remuneratory gifts between spouses, however, are not revocable. See JOUBERT, The Law of South Africa, Vol 8, Delict to Elections …,.; Phoenix N.O. v Dyer Smith N.O. & Anor 1968 (3) S.A. 145…,.

View Appeal
HH315-15 : AUCTION CITY (PVT) LTD vs EL ELION INVESTMENTS (PVT) LTD
Ruled By: CHITAKUNYE J and TSANGA J

In his book, Business Law in Zimbabwe, 2014, (Juta)…, R.H. CHRISTIE states that:-

“Calling for tenders and conducting auctions are methods of endeavouring to obtain the best contractual terms by inviting members, or selected members of the public, to bid in competition with each other. It is characteristic of tenders that they are not revealed to rival tenderers, and of auctions that bids are made publicly. What concerns us here is who makes the offer, thereby putting the conclusion of the negotiations out of his further power….,. The auctioneer calling for bids is inviting offers, and each bid is an offer which, so far as the bidders are concerned, he may accept or reject at his discretion.”

It is thus clear that what constitutes an offer to purchase the property is the bid at the bidded price. Once accepted by the seller, or the auctioneer, a contract for the sale of the auctioned property comes into being. In other words, the bidder makes the offer and the seller, or auctioneer, has the option to accept the offer or reject it. The terms and conditions of such a sale will usually be as per the Terms and Conditions the seller or auctioneer will have put up in inviting offers. Anyone making an offer will be expected to be familiar with the Terms and Conditions for the intended contract once his offer is accepted.

In CHRISTIE's The Law of Contract in South Africa, 6th ed, 2011 (LexisNexis)…, the learned author states that:

“More frequently, the terms on which the auction is to be held are drawn up by the seller or auctioneer in the form of 'conditions of sale'. To be effective, these must be read out at the beginning of the sale, or other reasonable steps must be taken to bring them to the notice of buyers. If this is done, the conditions will be binding even on bidders who arrive late and have not read them or heard them read out, since they could have asked for information on them. These conditions may create rights and duties not only between the seller and the bidders but between the auctioneers and the successful bidder on such matters as the payment of the auctioneer's commission.”

It is invariably the trend that the terms and conditions are put up for the bidders to know, in advance, the terms and conditions of the sale. Such conditions as the deposit required, the fate of the deposit in the event of a successful or failed bid, the auctioneer's commission and other attendant details for the auction.

HH09-09 : SKF ZIMBABWE P/L vs PARIS OLYMPIOUS
Ruled By: MAKARAU JP

Some day in or around October 2003, a businessman, who still believes in customer care, moved down the fuel queue that had formed at his forecourt to ensure that no one was jumping the queue. He would stop and chat with this or the other customer. He came across a white gentleman who was sitting in his car and awaiting his turn to have his car refueled. He spoke to this gentleman.

He went back to his manageress and asked who the gentleman was. He was told that it was the plaintiff's Managing Director. The plaintiff had an account with the service station.

The businessman went back and made a suggestion to the gentleman. The suggestion was well received. The parties parted company on this happy note. Each had an understanding of what had been discussed in the fuel queue.

The businessman is the defendant before me and the content of the suggestion that he made to the gentleman in the queue is the subject of the dispute that I have to determine.

On 30 October 2006, the plaintiff issued summons against the defendant claiming the sum of $77,206=48 together with interest thereon at the prescribed rate from the date of summons to date of judgment in full and delivery to it of 3390,5 litres of petrol and 6,462 litres of diesel.

The claim was accompanied by the usual prayer for costs of suit.

In its declaration, the plaintiff alleged that it had an arrangement with the defendant to draw fuel from the main tank at his service station. It further alleged that in or about November 2003, the defendant established a separate and different facility whereby the plaintiff could draw fuel from a reserve tank, which arrangement entailed the plaintiff paying for fuel in advance and the defendant storing the fuel for the plaintiff in his reserve tank. Finally, it was alleged, in the declaration, that, as at January 2006, the defendant held a deposit of $7,206,477 in respect of fuel to be drawn from the main tank and 3390,6 litres of petrol and 6462,02 litres of diesel in the reserve tank, which, despite demand, the defendant failed to avail to the plaintiff, prompting the plaintiff to approach the court.

The claim was defended.

In its plea, the defendant admitted that he had an arrangement with the plaintiff but averred that at all times the fuel in both tanks belonged to him and he did not owe the plaintiff fuel but cash balances in respect of each facility. In particular, the defendant denied that the reserve tank facility was exclusively for the plaintiff or that the plaintiff purchased the fuel stored in that tank in advance and in bulk. He further averred that the reserve tank was simply a preferential arrangement for account holders in the event that he did not have fuel in his main tank.

As to why the defendant could not supply the plaintiff with the fuel for which he held deposits, the defendant averred that he had been compelled by the National Task Force to sell all the fuel he had in his tanks to the public. The plaintiff had tried to fill drums with the fuel that was due to it, but, due to volatility of the period, this was not advisable.

Thus, at the pre-trial conference of the matter, the following issues were identified for trial:

1. Is the plaintiff entitled to specific performance, and, on what basis, and in what quantity?

2. What were the terms of the facility agreement between the plaintiff and the defendant?

3. Whether the defendant received oral or written directive from the Ministry of Industry and International Trade to sell the diesel and petrol that the plaintiff alleges it was holding for the plaintiff?

4. Whether the defendant requested the plaintiff to secure alternative petrol and diesel storage facilities to the facilities available at the defendant's service station?

At the trial of the matter, the plaintiff called four witnesses.

First to testify was Michael John Derry. At the time, he was the National Sales Manager for the plaintiff. His evidence was to the following effect:

The defendant approached him one day whilst he was in the fuel queue at the defendant's service station. The plaintiff was an account holder with the defendant. In terms of the arrangement between the parties, the plaintiff would deposit some money with the defendant and would then draw down fuel. When the defendant approached him in the queue, he suggested that the plaintiff could deposit a sum of money with the defendant who would then purchase fuel for the plaintiff when he purchased his own.

The witness told the plaintiff's Managing Director about this suggestion and an arrangement was then put in place.

When the defendant did not have fuel in his main tank, the plaintiff would then draw its own fuel from the reserve tank. He did not know the finer details of the arrangement as this was handled by the administration section of the plaintiff. His understanding was that, in the second arrangement, the plaintiff purchased its own fuel which was stored by the defendant in a separate tank. When there was no fuel in the main tank, the plaintiff would then draw fuel from this side tank, which the plaintiff took to be its fuel.

The witness impressed me as honest and reliable. He was not shaken under cross-examination and I shall rely on his evidence to the extent that it reveals that an offer to treat was made by the defendant to the plaintiff.

The second witness to testify on behalf of the plaintiff was Kevin James Shadwell. He is the Managing Director of the plaintiff. His evidence was to the following effect:

Historically, the plaintiff maintained an account with the defendant in terms of which the plaintiff would pay a deposit down and then draw fuel against the deposit. Thereafter, Mike Derry approached him and advised him of the alternative arrangement that had been suggested by the defendant. He understood that this arrangement would guarantee supply.

Under normal circumstances, the plaintiff would continue to draw fuel from the main tank under the historic arrangement. Under the second arrangement, the defendant was offering the plaintiff a reserve tank in which the plaintiff would store its fuel and from which the plaintiff would only draw fuel in the event that there was none in the main tank.

He gave the approval for the arrangement and instructed the administration office to put the arrangement in place.

Thus, according to his understanding, while the plaintiff deposited for fuel in the main tank, it purchased outrightly the fuel in the reserve tank.

The plaintiff was under the impression that the fuel in the reserve tank was exclusively its, and, if there was more fuel in the tank than the plaintiff had purchased, this did not concern the plaintiff.

The witness did not personally discuss the details of the second arrangement with the defendant.

Sometime in August 2006, the plaintiff received a call from the defendant that there was no more fuel and that the fuel that had been stored in the reserve tank had been sold to the public.

The witness held two meetings with the defendant over the issue. The plaintiff could not collect fuel that was due to it in drums as it was seen as inappropriate at the time as there was a critical shortage of fuel countrywide.

At some stage, the plaintiff furnished the defendant with a letter authorizing the defendant to sell the fuel in the reserve tank to the public. The letter was meant to protect the defendant from the task force so that he would not be seen to be hording fuel in times of shortages. The plaintiff's understanding was that the fuel, once sold to the public at the instance of the task force, would be replaced by the defendant.

At no stage did the parties discuss the issue of storage charges for the fuel in the reserve tank.

In my view, the witness gave his evidence well. He was clear as to the understanding that the plaintiff had of the two arrangements that it had with the defendant. He was also clear that he personally got this understanding from the report that he received from the first witness and the subsequent conduct of the parties. At no stage did he personally discuss the terms of the agreement with the defendant. At no stage did either party seek to keep a contemporaneous record of what had been agreed upon.

The third witness for the plaintiff was Ephraim Kundishora Mawonedzo. He was employed by the plaintiff as the Administration and Human Resources Manager.

In November 2004, he was approached by the plaintiff's Managing Director who told him that the plaintiff had agreed on a better deal with the defendant that would cushion the plaintiff in times of fuel shortages. The Managing Director informed him that the offer for the better fuel deal was made to Michael John Derry by the defendant. The witness then made out a cheque to the defendant. He gave this to Dorcas, the manageress of the defendant's service station.

The cheque was sufficient to cover 5,000 litres of petrol and 5,000 litres of diesel.

When making the payment to the defendant he communicated that the cheque was for the reserve facility. Thereafter, the facility was put in place.

Sometime in April/May 2005, there was a critical shortage of fuel. The defendant expressed concern about keeping large quantities of fuel in the reserve tank. The witness then wrote a letter, addressed to 'whom it may concern', allowing the defendant to sell the fuel stored on behalf of the plaintiff in the reserve tank to the public. The letter was meant to protect the defendant from the task force. The witness was never told that the task force on fuel had visited the defendant's service station and had ordered that he disposes of all the fuel that he was holding in his tanks. The defendant should still have left enough fuel in his tanks to service the needs of the plaintiff as such fuel was on reserve.

In May or June 2005, he ran around trying to get clearance from the Ministry of Energy and from the police to allow the defendant to store the plaintiff's fuel in bulk. He was not successful.

When he returned to the defendant's service station, he was advised that all the fuel had been sold.

The second witness and he arranged to meet with the defendant who promised to give them fuel when next he received a delivery.

At one stage, the witness heard that the defendant was once again dispensing fuel from his station. When he approached the defendant for fuel, as per the promise, the defendant denied owing the plaintiff fuel but money.

The defendant then tendered a cheque to the plaintiff in full and final settlement of the balance owing. The plaintiff did not accept the cheques which it sent back to the defendant.

Regarding whether it would be impossible for the defendant to procure the fuel that the plaintiff was claiming, the witness was of the view that the defendant could easily do so as he is a fuel dealer and has access to fuel suppliers.

The plaintiff had dealt with the defendant for years without any problems, which is why the arrangement between the parties was not reduced to writing.

Under cross examination, the witness admitted that he was not party to the negotiation of the arrangements between the plaintiff and the defendant but was informed of the details of the arrangement by his Managing Director.

In my view, the witness was being truthful in his evidence. He was not shaken in cross–examination and I have no reason to disbelieve him.

After the evidence of Ephraim Kundishora Mawonedzo, the plaintiff called one Kedius Mpiningo. At the time of testifying, he was employed by the plaintiff as a Human Resources and Administration Officer, working directly under the last witness. His duties included keeping records and allocating fuel to the plaintiff's vehicles.

He joined the plaintiff on 15 July 2005, well after the dispute between the parties had arisen.

He was made privy to the details of the arrangement between the parties by his immediate boss and from the records that he found in the office.

The witness gave his evidence well. To the extent that he narrated to the court what he had been made privy to, I have no reason to disbelieve his evidence. It however does not assist me much in establishing what it is that the parties had agreed upon in the first instance…,.

After leading evidence from Kedius Mpiningo, the plaintiff closed its case, prompting counsel for the defendant to apply for the defendant to be absolved on the basis that the plaintiff had failed to lead evidence to establish the terms of the arrangement between the parties that it was relying on.

The application was resisted, and, after hearing submissions, I declined the application and indicated that my reasons would appear in the main judgment.

In declining the application for absolution from the instance, I was guided by the sentiments expressed by BEADLE CJ in Supreme Service Station (1969) (Pvt) Ltd v Fox and Goodridge (Pvt) Ltd 1971 (1) RLR 1 (A) to the effect that if the plaintiff has made out a case that the defence is something peculiarly within the knowledge of the defendant, justice demands that the defendant be placed on his defence.

In my view, since the alleged agreement between the parties was oral, and the parties had related under the agreement for a period, the defendant had to give evidence on his understanding of the terms of the arrangement between the parties, and, if his understanding coincided with that of the plaintiff in a material respect, then, the agreement between the parties would have been established.

The defendant gave evidence.

He used to run the service station in Hatfield known as H.E.R. Bonanza. One day, he was walking up and down the fuel queue that had formed at the service station. He saw the plaintiff's second witness in the queue and stopped to talk to him. When he had ascertained the identity of the plaintiff's second witness from his manageress, he approached him again and asked him if he would like to open an account with the defendant to save some time in the queue. The witness promised to get back to him. The plaintiff's representatives came back a few days later and an account was opened for them.

The defendant then detailed his understanding of how the arrangement between the parties would work. In his view, the arrangement was an advance deposit system where the plaintiff would pay, in advance, a deposit for fuel and against which deposit it would then drawdown fuel.

Later, the defendant decided that one of the pumps at the service station would service commuter buses, one would service the public, while one was reserved for account holders and friends. This was referred to as the reserve facility.

The reserve facility was set up due to shortages in the supply of fuel. The plaintiff and other account holders were asked to pay a separate deposit for the use of this reserve facility. The facility allowed them to draw fuel from the reserve tank in times of shortages.

His understanding was that the fuel was always his and did not belong to the plaintiff after a deposit for such fuel was paid. He was holding cash and not fuel on behalf of the plaintiff. The plaintiff did not pre-pay for the fuel.

The defendant is a confident man. He gave his evidence confidently. He clearly was mistaken when he testified that the man he spoke to in the fuel queue on the forecourt of his service station was the plaintiff's Managing Director. He spoke to Michael John Derry. Despite this mistake in his evidence, I found him generally honest and easy to believe.

The defendant called Dorcas Sibindi, the manageress at the service station during the relevant time. Her evidence was brief and concise.

She knew the second and third plaintiff's witnesses as the plaintiff was one of the account holders at the service station. The station operated three tanks; one for commuter buses, one for the public, and another for account holders.

In operating its account, the plaintiff would issue cheques in favour of the defendant and she would deduct from that deposit each time the plaintiff drew down fuel. The parties operated two schemes. The main tank was used when there were no queues on the forecourt. The reserve tank was used when queues had formed on the forecourt for the preferred customers to avoid the queues.

The plaintiff paid a deposit to the defendant for both schemes and drew down against such deposits. The defendant never kept any fuel exclusively for the plaintiff.

The witness was not as forthcoming in her responses to questions put to her under cross-examination, leaving me with the impression that she was not telling me the entire truth.

For instance, she could not remember how the letter authorizing the defendant to sell all of the plaintiff's fuel got into the file she kept for the plaintiff yet she managed the account and kept the file. She denied any memory of the letter and would have me believe that she merely saw it in the file at the time she handed over the file to the defendant in preparation for the litigation.

She also denied having spoken to Kedius Mpiningo on the phone about the details of the account.

I have found Kedius Mpiningo to be generally truthful and reliable, and, in my view, he would not have had any reason to lie about the telephone call, which is innocuous by all regards.

On the basis of the above, I shall only rely on the evidence of this witness where it is corroborated by some other reliable testimony.

After the testimony of Dorcas Sibindi, the defendant closed his case.

The issue that falls to be determined in this matter is, in my view, simple. It is to establish whether the terms of the agreement that the parties entered into entitles the plaintiff to delivery of fuel in the volumes claimed.

The issue is captured in very broad terms in the second issue settled at the pre-trial conference.

It is trite that having come to court to assert and enforce a contract, the plaintiff bore the onus of proving not only the terms of such a contract, but breach of a material term thereof.

The plaintiff asserts that the second arrangement was a reserve facility in terms of which it pre-purchased fuels from the defendant who was obliged to keep such litreage in reserve for the plaintiff.

This is the case that the plaintiff has brought to court.

Counsel for the plaintiff submitted, that, on the evidence led, I must find that the parties reached consensus ad idem on the above terms when the defendant met with Michael John Derry in the fuel queue.

I find myself unable to agree with that submission.

I have accepted it, on a balance of probabilities, that, the defendant met with Michael John Derry and not with Kevin James Shadwell on the day the proposal was put to the plaintiff to set up a reserve facility. The testimony of Michael John Derry as to what was discussed during this brief and impromptu meeting is quite clear and concise in this regard.

It is important, in my view, that I analyze the evidence of Michael John Derry in this regard critically for it forms the offer that was communicated to the plaintiff.

In the words of Michael John Derry, the defendant suggested that the plaintiff could put down a whole lot (deposit a sum of money with the defendant), who would then purchase fuel for the plaintiff when he purchased his own. This is what Mr. Derry heard the defendant to be saying.

The issue remains to be determined whether the offer by the defendant was understood and communicated in the terms in which it was made.

It is pertinent, in my view, to note, at this stage, that, no further discussion was held between Michael John Derry and the defendant on where and how this fuel would be stored for and behalf of the plaintiff and how the plaintiff would take delivery of same.

It s not in dispute that Michael John Derry did not accept the offer that the defendant had put to the plaintiff. He took the offer to Kevin James Shadwell, the plaintiff's Managing Director.

When he received the offer, Kevin James Shadwell understood the defendant to be offering them an alternative facility to the one existing. He understood that this arrangement would guarantee supply.

Under normal circumstances, the plaintiff would continue to draw fuel from the main tank under the historic arrangement. Under the second arrangement, the defendant was offering the plaintiff a reserve tank in which the plaintiff would store its fuel and from which the plaintiff would only draw fuel in the event that there was none in the main tank.

This is the offer that he gave instructions to the plaintiff's administrative staff to accept.

I have observed above that Kevin James Shadwell gave his evidence well but that he did not personally discuss the terms of the new “deal” with the defendant. He took his understanding from Michael John Derry and instructed that the offer be accepted as he understood it.

It is trite that accepting an offer that has not been made does not bring into being a contract: see Couve and Another v Reddot International (Pty) Ltd and Others 2004 (6) SA 425 (W) Bourbon-Leftley en Andere (Landbous) BPK 1999 (1) SA 902 (C).

A contract is brought into being by the acceptance of a matching offer.

It thus remains for me to establish whether the plaintiff has established that the offer that it accepted was the one made by the defendant.

Again, words used by the defendant become of paramount importance in this matter.

The defendant testified that the reserve facility was set up due to shortages in the supply of fuel. The plaintiff and other account holders were asked to pay a separate deposit for the use of this reserve facility. The facility allowed them to draw fuel from the reserve tank in times of shortages.

His understanding was that the fuel was always his and did not belong to the plaintiff after a deposit for such fuel was paid. He was holding cash, and not fuel, on behalf of the plaintiff and all other account holders. The plaintiff did not pre-pay for the fuel.

In such circumstances, can I say that there was a meeting of the minds of the parties sufficient to establish the terms and conditions of the agreement that the plaintiff alleges and relies on?

I think not.

This was an arrangement that was entered into on the basis of a single chance discussion between two persons who were not directly involved in the implementation of the arrangement.

The defendant understood he was simply offering a reserve tank facility to the plaintiff. The plaintiff understood it was being offered a pre-paid fuel facility. No contemporaneous document of the agreement was kept by either side and the misunderstanding was perpetuated over a period, giving each side comfort in the belief that its understanding of the arrangement was the one more from the passage of time and less from a shared intention and the observance of the requisite legal formalities.

It is trite, that, in actions based on contract, the party alleging the contract must be able to establish, by evidence, the communication of an offer and acceptance of that offer. This is what establishes the contract and a cause of action for the plaintiff.

Where the defendant denies making the offer alleged by the plaintiff, the onus rests on the plaintiff to prove, by his conduct, that the defendant made the offer.

Where, however, the evidence adduced by the plaintiff regarding the defendant's conduct is consistent with either of the party's understanding of the agreement, as occurred in this matter, the conduct of the defendant cannot act as proof of the common intention of the parties.

I have not been able to establish, from the evidence of the plaintiff, any conduct on the part of the defendant consistent only with and corroborative only of the plaintiff's assertions. To the contrary, the parties maintained the two facilities and the plaintiff drew down fuel from the reserve tank when there was no fuel in the main tank. According to the plaintiff, when doing so, it was drawing down on its fuel reserves. According to the defendant, the plaintiff was simply drawing down fuel in accordance with the second account facility that gave it preference over members of the public and those who only had access to the main tank.

On the basis of the foregoing, I am unable to find for the plaintiff, as, in my view, insufficient evidence has been led to prove the terms of the second facility.

In the result, I make the following order:

1. The defendant is absolved from the instance.

2. The plaintiff shall pay the defendant's costs.

SC03-21 : AFRITRADE INTERNATIONAL LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: PATEL JA, BHUNU JA and BERE JA

This is an appeal against the judgment of the Fiscal Appeal Court dismissing an appeal against the determination of the respondent requiring the appellant to pay value added tax (VAT) on the importation of certain goods into Zimbabwe.BackgroundThe appellant is a foreign company incorporated in the British Virgin Islands and ...

Background

The appellant is a foreign company incorporated in the British Virgin Islands and operating from Guernsey in the Channel Islands. The respondent is a body corporate responsible for the collection of VAT and other imposts in Zimbabwe.

The appellant was a supplier of basic commodities to local companies, including the West Group of Companies (West Group). In 1992, it concluded an agency agreement with Douglas and Tate (Pvt) Ltd (Douglas & Tate), a subsidiary of West Group. By 1999, it was supplying basic commodities to West Group and other local customers under a US$10 million line of credit registered with the Reserve Bank of Zimbabwe (the RBZ).

On 1 October 2007, the Reserve Bank of Zimbabwe (RBZ) unveiled the Basic Commodities Supply Side Intervention (BACOSSI), a facility designed to end the chronic shortages of basic commodities in Zimbabwe. After negotiations between the appellant and the RBZ, the latter purchased certain non-BACOSSI goods, valued at US$7,987,207=54, that were in the Douglas & Tate warehouse. The appellant also supplied BACOSSI goods, valued at US$11,698,174, to the RBZ in 2008.

After conducting investigations, the respondent raised taxation schedules against the appellant for outstanding value added tax (VAT), on both BACOSSI and non-BACOSSI transactions, initially on 17 March 2009 and later on 15 July 2009. The total charge raised was US$6,302,712=13, inclusive of interest and penalties. This was subsequently corrected, on 13 October 2009, by reducing the charge to US$6,249,496=70.

The appellant lodged an objection to the assessment on 25 September 2009. It also applied for condonation for the late filing of the objection.

The respondent dismissed the application for condonation and disallowed the objection.

The appellant appealed against both decisions to the Fiscal Appeal Court on 12 October 2009. The respondent filed its reply on 12 November 2009. At a pre-trial hearing on 17 September 2014, the delay by the appellant in filing its Notice of Objection as well as the failure by the respondent to file its documents timeously were both condoned by consent.

Judgment of the Fiscal Appeal Court

At the hearing of the matter, the appellant called the evidence of one Kenneth Sharpe, who was the founder and Chairman of West Group and a director of Douglas & Tate.

He confirmed the foreign status of the appellant. His evidence was that West Group, Douglas & Tate, and the appellant were not related companies.

The court a quo found that he was not a credible or reliable witness. This was because he contradicted material parts of his evidence-in-chief under cross-examination. Furthermore, his evidence left gaps that could only be filled by the directors, employees, officials, or agents of the appellant itself.

On the merits, the court a quo relied on the documentary evidence, i.e. the unsigned agreement between the appellant and the Reserve Bank of Zimbabwe (RBZ) and the relevant documents generated in South Africa, to find that it was the appellant that imported the goods in question into Zimbabwe. It was the appellant who beneficially owned and possessed the goods before they entered Zimbabwe and brought or caused them to be brought into the country.

It was accordingly held that the appellant was the importer of both the BACOSSI and non-BACOSSI goods.

The court further found that the activities of the appellant in Zimbabwe, from 2004 onwards, which were carried on continuously and regularly, constituted trading in the country for the purposes of VAT liability. The appellant was not a registered operator, but, every trader is liable to be registered for VAT purposes and is deemed to be a registered operator as the principal for goods supplied or imported on its behalf by its agent.

The appellant was carrying on the business of supplying goods through the agency of Douglas & Tate, which released the goods only on the instructions of the appellant after the latter had received payment in accordance with the relevant waybills and invoices.

The court held that the appellant was the importer of the goods in question and was therefore liable for the payment of VAT in both the pre-BACOSSI and BACOSSI eras when it supplied goods in furtherance of its business activities.

Furthermore, the appellant was required to be registered and had to be treated as a registered operator. Its failure to charge or receive VAT did not exonerate the appellant as VAT is deemed to be included in the purchase price. Additionally, it bore the obligation to remit VAT in foreign currency in accordance with the legislation in force at the relevant time.

As regards the appointment of the Chief Executive Officer (CEO) of West Group as the public officer of the appellant, the court found that this was above board. In terms of the governing provisions, the respondent was allowed to compulsorily appoint the CEO of West Group, the holding company of Douglas & Tate, which was the agent of the appellant in Zimbabwe, as its public officer and representative registered operator for the collection of VAT.

With respect to the appellant's argument that the respondent had used an arbitrary exchange rate to convert Rand denominated transactions to United States dollar values, the respondent averred that the relevant invoice values, together with the appropriate conversions, were supplied by the appellant's own agents.

The court found that the onus was on the appellant to establish that the conversions were arbitrary. However, it did not lead any evidence in this regard and the respondent's averments were not denied.

In the event, the court held that the appeal before it was not sustainable in its entirety. However, the appellant's objections raised important legal points and its grounds of appeal were not frivolous. The appeal was accordingly dismissed with no order as to costs.

Grounds of Appeal and Relief Sought

There are six grounds of appeal in casu. They impugn the judgment of the court a quo in the following respects:

(i) Rejecting the evidence given on behalf of the appellant as being unreliable.

(ii) Holding that the appellant, and not the Reserve Bank of Zimbabwe (RBZ), was the importer of the goods in question.

(iii) Holding that the respondent was entitled to go behind the contents of the bills of lading which it had processed and approved to find that the appellant was the importer of the goods into Zimbabwe.

(iv) Finding that the appellant operated a business in Zimbabwe.

(v) Holding that the appellant was to be treated as a registered operator and finding that the appellant was liable to pay VAT on the imported goods.

(vi) Considering the issue of whether or not any company had been lawfully appointed as an agent to pay any tax due by the appellant, and in finding that such an appointment had in fact been lawfully made.

The appellant prays that the appeal be allowed with costs and that the judgment of the court a quo be set aside and substituted with an order allowing the appeal a quo with costs and directing the respondent to withdraw the contested VAT assessments issued by it against the appellant in this matter....,.

Identity of Importer: Zimtrade or Reserve Bank of Zimbabwe (RBZ)

The second and third grounds of appeal pertain to the identity of the importer of the goods in question. Was it the Reserve Bank of Zimbabwe (RBZ), as is contended by the appellant, or was it the appellant itself?

Also relevant in this context are the contents of the bills of entry that had been submitted for processing and approval by the respondent's Department of Customs and Excise.

Counsel for the appellant submits that a bill of entry is a document that is filed by the importer.

In casu, one such bill of entry filed and approved in August 2008 identifies the appellant as the exporter/consignor, based in Guernsey. The importer/consignee is identified as the Reserve Bank of Zimbabwe (RBZ). All the other relevant bills of entry in this case contain the same information as to the identities of the exporter and the importer.

The bills of entry were issued in terms of the Customs and Excise Act.

Counsel for the appellant relies on the provisions of sections 37(1)(e), 39(1) and 40(1) of the Customs and Excise Act in support of his submission that the entries in question were made by the Reserve Bank of Zimbabwe (RBZ) as the importer.

The respondent incorrectly took the position that the appellant was the importer of the goods concerned because it owned the goods before they entered into Zimbabwe from South Africa.

The respondent, which bore the evidentiary burden in this respect, did not place any evidence before the court a quo to disprove the correctness of the bills of entry.

Counsel for the appellant also relies on other documentary evidence to buttress the appellant's position.

In particular, he refers to an opinion by the Reserve Bank of Zimbabwe's lawyer, dated 17 June 2009, a letter of 1 July 2009 from the Reserve Bank of Zimbabwe (RBZ) to the appellant's lawyers, and the minutes of a meeting held on 7 October 2009 between the RBZ and representatives of West Group. These documents, so he submits, make it clear that the Reserve Bank of Zimbabwe (RBZ) was the importer, the only unresolved issue being the currency in which VAT was to be paid.

Turning to the unsigned draft agreement between the parties, counsel for the appellant submits that the court a quo wrongly relied on this draft to counter the bills of entry.

The respondent itself indicated, in its reply, that it did not know whether or not the agreement was reduced to writing. It further confirmed, through its counsel, that it was not relying on the drafts as conclusive evidence of the agreement between the appellant and the Reserve Bank of Zimbabwe (RBZ). Consequently, so it is submitted, the unsigned agreement had no validity and could not be used as an antidote to the bills of entry, as the court a quo purported to do.

Counsel for the respondent submits that the provisions of the Customs and Excise Act that are relied upon by the appellant do not address the question at hand. What is more relevant are the definitions that appear in section 2 of the Customs and Excise Act relating to the meaning of the terms “import”, “importer” and “entry”.

The court a quo, so he submits, correctly applied these definitions to find that the appellant was the owner and importer of the goods in question before they crossed the borders of Zimbabwe. Thus, the respondent was entitled to pursue the party that was statutorily liable to pay VAT as the importer, i.e. the appellant, and not the Reserve Bank of Zimbabwe (RBZ) which was not the importer.

As regards the bills of entry, counsel for the respondent points to the definition of “entry” in section 2 of the Customs and Excise Act which makes it clear that the information contained in a bill of entry must be correct. Most of the declarants on the bills in casu were employees of Mitchell Cotts Freight Zimbabwe, a freighting company. Therefore, so he submits, it was not the Reserve Bank of Zimbabwe (RBZ) but the freighting agent that completed the bills of entry.

The evidence indicates that the freighting agent was paid by the subsidiary of West Group, i.e. Douglas & Tate, which acted for the appellant.

Counsel for the respondent further submits that the bills of entry were not prepared by the respondent or the Reserve Bank of Zimbabwe (RBZ) or by any other official. Consequently, no presumption of regularity could attach to them and their designation of the RBZ as the importer is therefore not reliable or conclusive.

With reference to the alleged admissions of liability by the Reserve Bank of Zimbabwe (RBZ), counsel for the respondent argues that the opinion tendered by its lawyer on 17 June 2009 is not binding. Again, the letter from the RBZ, dated 1 July 2009, was rejected by the Advisor to the RBZ Governor at a meeting held with the respondent's officials on 20 August 2009. Furthermore, the RBZ's expression of its willingness to pay the VAT invoices in Zimbabwe dollars, at its meeting with West Group, on 7 October 2009, was conditional on seeking legal opinions on the matter.

Finally, counsel for the respondent submits that the draft agreement between the appellant and the Reserve Bank of Zimbabwe (RBZ) affords evidence of the negotiations between and intention of the parties at some point. The terms contained in an unsigned agreement can be relied upon unless they are disproved by the party who asserts that the agreement was not intended to be binding. The court a quo was therefore correct in relying upon the contents of the draft agreement in casu.

In response, counsel for the appellant submits that the contents of the bills of entry are crucial because they were officially accepted for the purposes of importation and the liability to pay tax. They show that the Reserve Bank of Zimbabwe (RBZ), which had a beneficial interest in the goods at the time when entry was made, was the importer of those goods. There was no evidence to rebut the contents of the bills of entry. In this respect, the fact that the freighting agents signed them as the declarants is irrelevant.

In terms of section 12 of the Civil Evidence Act, a bill of entry, being a public document, does not have to be made exclusively by a public officer. The bills of entry in casu were made on ZIMRA forms and their contents were accepted by ZIMRA officials. Furthermore, copies of any documents kept by a public official can be used in evidence.

Lastly, counsel for the appellant submits that the opinion of the Reserve Bank of Zimbabwe's lawyer, dated 17 June 2009, were based upon facts given to him by the RBZ itself. The Reserve Bank of Zimbabwe (RBZ) clearly relied upon that opinion in order to accept liability to pay the VAT claimed in Zimbabwe dollars.

There is a total number of 12 bills of entry on record, covering the period from 20 June 2008 to 26 August 2008. All of these bills identify the appellant as the exporter and the Reserve Bank of Zimbabwe (RBZ) as the importer. The declarants on the first seven (7) bills were representatives of Big Star Cargo Services, while the declarants on the next five (5) bills were representatives of Mitchell Cotts Freight Zimbabwe.

There can be no doubt that, prima facie, the entries on these bills of entry support the appellant's contention that it was not the importer of the goods in question.

The draft agreement relied upon by the respondent appears to have been drafted at some stage in 2008. It identifies the appellant as a company duly incorporated in Zimbabwe and whose principal place of business is situated in Harare.

The appellant is designated as the seller of specified goods, valued at US$12,759,114, while the Reserve Bank of Zimbabwe (RBZ) is designated as the buyer of those goods.

The agreement was not signed by either of the parties.

In its reply, the respondent intimated that it had “no knowledge of whether the agreement in respect of the supply of goods was reduced to writing or not.” However, the respondent annexed to its reply the minutes of a meeting held on 13 February 2009 between officials of the Reserve Bank of Zimbabwe (RBZ) and various other named but un-identified persons. The purpose of the meeting was to explain “the operations of BACOSSI project.”

According to the officials of the Reserve Bank of Zimbabwe (RBZ), the appellant “was responsible for importation of basic commodities.” They further explained that the appellant “is not duly incorporated in Zimbabwe and does not have offices in Zimbabwe as indicated on the contract of agreement in ZIMRA's possession.” Furthermore, “only a verbal agreement was reached between the Governor and Tania, the Ukranian representing Afritrade International. There is no written agreement between Afritrade International and RBZ.”

The learned judge a quo highlighted the principal terms of the agreement and reasoned that “the onus to establish that the terms and conditions in their agreement were different from those captured in the unsigned agreement was on the appellant. The appellant did not lead any evidence on this aspect.”

Furthermore, “the unsigned agreement placed the duty to import the goods into Zimbabwe on the appellant. Again, the delivery of the goods, cost, insurance and freight Harare strongly suggests that the appellant imported the goods into Zimbabwe. It would not make sense for the RBZ to undertake to expeditiously facilitate the quick clearance of its imports. The obligatory cost, insurance and freight Chitungwiza bonded warehouse delivery clause and the expeditious clearance clause suggests [sic] that the appellant was the importer.”

In principle, an unsigned agreement cannot ordinarily be relied upon as creating a valid and binding contract. However, the surrounding circumstances, including prior dealings between the parties concerned, may give rise to the prima facie presumption that the terms and conditions embodied in an unsigned agreement represent the true intention of the parties. The burden then shifts to the party disputing the authenticity of the agreement to show that it was not intended to be binding.

This position was affirmed by this Court in Associated Printing and Packaging (Pvt) Ltd & Ors v Lavin & Anor 1996 (1) ZLR 82 (S)…,.

“One must mention the fact that the written document, Annexure F, was not signed. The seller apparently declined to sign it. The law on this point is set out in Christie op cit at p122:

'This principle, that the burden of proof is on the party who asserts that an informal contract was not intended to be binding until reduced to writing and signed, was adopted by the Appellate Division in Goldblatt v Fremantle 1920 AD 123...'

In Woods v Walters 1921 AD 303 at 305, INNES CJ referred to the above passage and added:

'It follows, of course, that where the parties are shown to have been ad idem as to the material conditions of the contract, the onus of proving an agreement that legal validity should be postponed until the due execution of a written document lies upon the party who alleges it.'

In this context, it is of significance that Mr Morris, the seller, declined to give evidence on oath, or to call any witnesses.”

It is common cause that there was an agreement between the appellant and the Reserve Bank of Zimbabwe (RBZ) governing the importation and supply of the BACOSSI goods. This agreement was reduced to writing but was not signed by the parties, ostensibly because the appellant was unhappy with the description of its country of incorporation and principal place of business in the preamble to the draft agreement.

In any event, the BACOSSI goods were imported into Zimbabwe and delivered to the Reserve Bank of Zimbabwe (RBZ) in Harare as specified in the unsigned agreement.

Given this background, it seems to me that the court a quo was correct in finding that the contract between the appellant and the Reserve Bank of Zimbabwe (RBZ) was on the terms and conditions stipulated in the draft unsigned agreement - unless the appellant was able to prove that its contract with the RBZ was on some other terms and conditions.

Inasmuch as the appellant did not adduce evidence of any other agreement between the parties, the learned judge a quo correctly concluded that the appellant was bound by the terms of the draft agreement.

It follows that those terms must be taken as being correct in their designation of the appellant as the seller and importer of the goods in question.

View Appeal
HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MTSHIYA J

On 29 July 2008, the plaintiff issued summons against the defendant for the following relief:-

“(a) Payment of the sum of US$750,000.

(b) Interest a tempore morae at the London Interbank rate for United States dollars, 3.5% per annum, from 1 September 2005 to date of payment.

(c) Costs of suit.”

The background to the relief sought can briefly be narrated as follows:-

The plaintiff is a manufacturer and supplier of exclusive range of cables for the transmission and distribution of energy and communications involving entities like the Zimbabwe Electricity Supply Authority, the Rural Electrification Agency, and Tel-One.

The plaintiff's business caters for both domestic and export markets. As at end of 2003, 50% of its sales volumes were largely in exports.

In October 2004, the plaintiff approached the defendant for assistance. The defendant was then operating a foreign currency auction system. Through that system, the defendant made available, each week, from 25% of export proceeds, an amount of foreign currency for which commercial banks would submit bids for their customers. On the basis of those bids, allocations would then be made to the highest bidder(s).

In line with the auction system, on 24 October 2004, the defendant, through its Governor, informed the plaintiff, that, if it (plaintiff) submitted bids to the auction, the defendant would ensure that it (plaintiff) succeeded to the extent of US$150,000 per week to enable it to pay for essential inputs in its operations.

That process was indeed put into place on a weekly basis as from 14 January 2005 up to June 2005.

This was a special arrangement where the plaintiff would, instead of placing a bid, it would merely be advised, through a telephone call, each week, from the defendant's officials, that, the said allocation of US$150,000 was ready. All the plaintiff was required to do, in turn, was to pay the Zimbabwe dollar equivalent within 24 hours. The plaintiff would then, in turn, transfer, through a Commercial Bank, the requisite Zimbabwean dollar amount and details of the foreign suppliers to be paid in foreign currency (i.e from the US$150,000 allocated to the plaintiff).

The allocation of US$150,000, was, with effect from 16 June 2005, increased to US$250,000.

Weekly allocations, at that new level, were made to the plaintiff until the end of July 2005.

The allocation system was continued in August 2005 resulting in the plaintiff making three transfers of undisputed payments in Zimbabwe dollars for the equivalent of the amount of US$750,000 - now being claimed by the plaintiff.

The payments were, in each case, accompanied by details of external creditors to be paid by the defendant.

Notwithstanding the payment of the equivalent amount in Zimbabwe dollars by the plaintiff, the defendant has, to date, not forwarded the foreign currency to the plaintiff's external creditors or refunded the plaintiff with the said amount of US$750,000. In fact, the plaintiff has already, through other sources, paid its suppliers.

The above, in brief, explains why the plaintiff has resorted to this court action claiming the said amount of US$750,000.

With both the plaintiff and the defendant having amended their pleadings at the pretrial conference, it was agreed that the issues for trial were:-

“(a) Whether defendant is contractually obliged to pay plaintiff the sum of US$750,000;

(b) Whether defendant is estopped from denying its obligation to pay plaintiff the sum of US$750,000;

(c) Whether defendant's tender to repay the sums of Zimbabwean currency paid to it by plaintiff is a proper tender which plaintiff is obliged to accept.”

At the commencement of the trial, I indicated to both parties that, given the fact that both parties were generally agreed on what transpired, my view was that the matter could be determined through merely hearing arguments from both sides.

The plaintiff was, however, opposed to that approach and preferred to lead evidence. The defendant then also adopted the same stance.

I therefore had no option but to allow the parties to lead viva voce evidence.

The plaintiff's only witness, Mr E.W. Turina (Turina) said he was the Chief Executive Officer of the plaintiff at the time of the purchase of US$750,000 from the defendant. He had, however, left the employ of the plaintiff in June 2006.

Mr Turina's evidence was, in the main, a confirmation of what was already contained in the pleadings.

He said due to the scarcity of foreign currency, the plaintiff had reached an agreement with the defendant whereby bids from the plaintiff would be given preferential treatment.

He confirmed, that, the information on the allocations was done telephonically and that once an allocation (ie the initial US$150,000 rising to $250,000) was made, the plaintiff was required to pay the equivalent in Zimbabwe dollars within twenty-four hours (24) hours.

The arrangement had worked well from January 2005 until August 2005 when the defendant failed/neglected to disburse US$750,000 to the plaintiff's customers/suppliers despite the fact that the plaintiff had paid the defendant the equivalent in Zimbabwe dollar as per the standing arrangement.

The Zimbabwe dollars had been paid in three transfers on 1, 11, and 19 August 2005. This was to cater for the increased weekly allocation of US$250,000.

He said when the first allocation was not released, after payment of the equivalent Zimbabwe dollars, the plaintiff had asked for an explanation but was promised that the money would be released.

The same had happened with respect to the two subsequent payments.

After failure by the defendant to forward payment to its suppliers, the plaintiff had then borrowed money from other sources so as to meet supplier requirements. This had led to the withdrawal of invoices from the defendant, which invoices were produced as exhibits 1, 2 and 3.

Mr. Turina confirmed, that, before he left the employ of the plaintiff, in 2006, negotiations for settlement were in progress and that the defendant had indicated that it would secure the US dollars at a later stage for the plaintiff or reimburse the plaintiff in Zimbabwe dollars.

He said some of the discussions were not directly conducted with him.

He had, however, later learnt, that, the defendant was not going to pay the US$750,000.

It was his view, that, once the plaintiff effected payment of the equivalent Zimbabwe dollar amount of the allocated foreign currency “the contract was completed.”

He said the company had opted to wait because the Zimbabwe dollar had become worthless.

Mr Turina stuck to his story under cross-examination.

The defendant also called only one witness, a Mr B. Musoso (Musoso).

The witness said he was employed by the defendant as its Head of Treasury Operations. He said the Treasury Division was responsible for settlement and payment of allocations. The auction system, he said, was run by a separate unit which was responsible for the allocations. The role of his department was to communicate with companies and advise them on foreign exchange rates.

He was aware of a list of special allotees who received payment on a weekly basis. These were companies considered key to the national economy. These included the plaintiff.

He said there were thirty-six (36) companies on the special list and the allocations were made by the auction unit. Some of these were Boc Gases, Quest Motors, Unilever, Olivine Industries, Dunlop, National Oil Company of Zimbabwe (NOCZIM) and the fertilizer companies.

Mr. Musoso said there were no formal contracts with the companies on the special list.

The role of his department was to effect payment when funds were made available.

The witness said his department dispatched foreign exchange quotations to various interested companies. The quotations were meant to enable companies to mobilize the necessary funds before allocations were made. He said payment to allotees depended on instructions from what he called “the front office” and the availability of foreign currency.

He said the non-availability of foreign currency explained why the three payments made by the plaintiff, in August, were not honoured.

Mr. Musoso said when the auction system ceased, in August 2005, there were many unpaid beneficiaries from the special list and the defendant decided to reimburse them in Zimbabwe dollars.

He said he had heard that the plaintiff wanted reimbursement in US dollars instead of the Zimbabwe dollar. It was his evidence, that, in reimbursing beneficiaries, the defendant did not take into account the devalued value of the Zimbabwe dollar because there was no financial obligation: “We were just returning whatever had been paid,” he said.

Under cross examination, Mr. Musoso maintained, that, the successful execution of the arrangement relied solely on the availability of foreign currency.

In addition to Mr. Musoso's evidence, the defendant also relied on responses by Dr G. Gono (Governor of the Reserve Bank of Zimbabwe) and Patience Aisam (Manager Compliance–Treasury Division) to the plaintiff's interrogatories filed on 29 September 2009.

Both responses to interrogatories were filed on 17 November 2009.

In his response, Dr Gono stated that he had, upon the specific request and representations from the plaintiff, advised that he would endeavour to source foreign currency for the plaintiff in the amounts mentioned (i.e initially US$150,000 rising to US$250,000).

He said this was in recognition of the strategic role played by the plaintiff in the national economy.

There was, however, no formal binding agreement.

He said he had indeed been advised that “the plaintiff had made payments totaling Z$13,535,110 being the quoted equivalent at the auction rate of US$750,000”, now being claimed by the plaintiff.

However, he said “due to many other competing and pressing national requirements, the defendant was unable to avail the foreign currency not only to the plaintiff but to many other companies in a similar situation who then accepted an offer for immediate refund. Plaintiff declined the refund.”

It was his evidence that his officers had informed him, that, during August 2005, no disbursements were made to any applicant for foreign currency under the auction system.

In response to the plaintiff's interrogatories, Miss Patience Aisam confirmed, that, from “14 January 2005 to August 2005, she would, on a weekly basis, telephone or instruct that plaintiff be telephoned advising it that its application for foreign currency allocation had been approved.”

She also confirmed, that, the approved amounts were US$150,000 per week from 14 January 2005 to mid-June 2005. Thereafter, the amount was increased to US$250,000 per week….,.

Counsel for the plaintiff submitted that the plaintiff's case was clear and did not warrant argument.

He submitted, that, the undisputed evidence of Mr. Turina had confirmed, that, upon approaching the Governor of the Reserve Bank, Dr Gono, for assistance in obtaining foreign currency, the plaintiff had been granted the status of a permanently successful bidder at the weekly foreign currency auctions.

The plaintiff, with that status, did not need to place bids at the auction, but, was merely telephonically advised of the agreed weekly allocations.

The practice, it was submitted, had been successfully operational from January 2005 to July 2005.

Payment(s) requirements were availed to the plaintiff who complied at all times by effecting the payment(s) of the equivalent amount of the foreign currency in Zimbabwe dollars.

The only condition was that “foreign currency will only be released after receipt of Zimbabwean dollars.”

Counsel for the plaintiff submitted, that, after the foreign currency amounts were not paid, in August 2005, the Deputy Governor, Mr Ncube, of the defendant, offered the plaintiff the choice of having the money paid by the plaintiff refunded in local currency or waiting for the foreign currency to be made available. That evidence was not contradicted.

I agree.

Counsel for the plaintiff further submitted, that, in practice, there were two initial contractual arrangements:

(i) The first was the undertaking by the defendant that the plaintiff would be allocated foreign currency without the need to make bids at the auction system.

(ii) The second was that once the plaintiff effected payment of the Zimbabwean dollars within twenty-four hours (ie equivalent of the foreign currency) the foreign currency allocated would be made available.

The plaintiff had, in all three instances in August 2005, complied with the payment requirements.

Counsel for the plaintiff said the third contractual arrangement, novating the August contracts, occurred when the defendant promised to pay the plaintiff the foreign currency when it became available.

The plaintiff had, in turn, agreed to wait for payment until it became necessary to institute these proceedings.

In support of the need for the plaintiff to institute legal proceedings, counsel for the plaintiff quoted from Asharia v Patel 1991 (2) ZLR 276 where the relevant part of the judgment of the former Chief Justice reads as follows:

“The general applicable rule is that where time for performance has not been agreed upon by the parties, performance is due immediately on conclusion of their contract or as soon as thereafter as is reasonably possible in the circumstances.

But, the debtor does not fall into mora ipso facto if he fails to perform forthwith or within a reasonable time. He must know that he has to perform.

This form or mora, known as mora ex persona, only arises if, after a demand has been made calling upon the debtor to perform by a specified date, he is still in default.

The demand or interpellatio, may be made either judicially by means of a summons or extra-judicially by means of a letter of demand or even orally; and to be valid it must allow the debtor a reasonable opportunity to perform by stipulating a period for performance which is not unreasonable. If unreasonable, the demand is ineffective….,.”

The promise to refund was made in 2005 and summons was issued on 29 July 2008.

It was counsel for the plaintiff's submission, that, the evidence of the defendant's witness (Mr. Musoso) was irrelevant since he had no direct dealings with the auction system. He said the defendant had failed to call witnesses who could have given meaningful testimony as to what actually happened.

The only credible evidence available was that of Mr Turina, he argued.

Counsel for the plaintiff concluded by submitting as follows:

“1. That, it was the uncontradicted and unchallenged evidence on plaintiff that Deputy Governor Ncube gave an undertaking to pay plaintiff US$750,000 at a future unspecified date.

2. That, this undertaking was accepted by plaintiff and formed a binding contract.

3. That, the binding contract so formed created an obligation on defendant to perform within a reasonable time.

4. That, after the lapse of a time, that defendant has never claimed is unreasonable, plaintiff made interpellation by the issue of summons, calling for the enforcement of the contract.

5. That, in the alternative, the second contractual event is binding on the parties.

6. In any event, defendant so conducted itself between January2004 and July 2005 as to cause plaintiff to believe that it had a contractual relationship on an occasion by occasion basis; that plaintiff did so believe, and, as a result of defendant's actions and words, plaintiff altered its position to its detriment.

7. That, in enforcing specific performance of a contract, the court is to treat the State like any other individual.

8. That, in the circumstances, defendant has done nothing to prevent plaintiff from being granted a judgment in terms of the summons.”

Counsel for the defendant submitted, that, due to the scarcity of foreign currency, the plaintiff and thirty-six (36) other complainants were placed on a list of companies considered as strategic in the national economy.

Depending on availability, the defendant then agreed to allocate foreign currency to these companies – which included the plaintiff.

He said no formal contracts were drawn in respect of the arrangements.

He said the plaintiff had been offered a refund of the money it had paid upon failure by the respondent to source the requisite foreign currency.

Counsel for the defendant emphasized the point, that, the arrangement between the parties was always subject to the availability of foreign currency which the defendant could disburse.

Arguing that there was no contractual obligation, on the part of the defendant, to pay the plaintiff the amount claimed, counsel for the defendant said it was never the consensus of the parties that the payment of the Zimbabwe dollars sealed the contractual arrangements.

The payment, he said, was subject to the availability of foreign currency.

The defendant, he submitted, could not have guaranteed payment because it did not know how much foreign currency would be generated from the auction system.

Counsel for the defendant said the defendant's witness had confirmed that his department had not been allocated with foreign currency for disbursement.

In the main, counsel for the defendant submitted, “the plaintiff had been favoured with an allocation that it be given foreign currency of US$250,000 per week if the same was available. There was no intention to create contractual obligations.”

He said quotations sent to the plaintiff were not offers.

Counsel for the defendant further submitted, that, the plaintiff had failed to prove that foreign currency was available at the time the allocations were made.

He blamed the plaintiff for refusing to accept a refund in Zimbabwean dollars as had been done by the other companies.

In conclusion, counsel for the defendant had this to say:

“The issue of who was a better witness between plaintiff and defendant's witness is, with respect, of no great moment.

Material facts are common cause. The court should take a holistic approach in the matter and determine what the intentions of the parties were and what relationship was created.

It is submitted, that, it could not have been within the contemplation of the parties, that, a failure by the defendant to disburse foreign currency to the plaintiff due to non-availability would ground a cause of action for specific performance.

In all the circumstances, the plaintiff's claim should be dismissed with costs and it is noted it has refused the tender of the refund in Zimbabwe dollars.”

I fully agree with counsel for the defendant, that, in casu, the material facts are common cause and I made that observation at the commencement of the hearing of this matter.

My assessment is that, apart from merely confirming what is already contained in the pleadings, nothing much turns on the oral evidence from the witnesses called by both parties.

However, my view, on the one hand, is that the evidence of the defendant's witness was totally irrelevant because he was clearly a distant player in what took place in the actual allocation process.

On the other hand, I find that Mr. Turina's evidence buttressed the respondent's responses to the interrogatories.

The responses do not deny the practice that operated smoothly from January 2005 to July 2005. The only issue highlighted is that the arrangement was anchored on the availability of foreign currency.

That is undeniable, and, indeed, no allocation could have been made without the availability of foreign currency.

However, the main issue, in my view, is whether by allocating to the plaintiff US$150,000 and later US$250,000, from the auction system, the defendant then became obligated to release the money to the plaintiff upon payment by the plaintiff, within twenty four (24) hours, of the Zimbabwe dollar equivalent at the defendant's instruction.

In interrogating that issue, one has to consider the following undisputed facts:-

(a) Every week, Patience Aisam, of the defendant, would telephone the plaintiff to advise on what had been allocated to the plaintiff and what had to be transferred through a Commercial Bank in Zimbabwe dollars - in fact, it was confirmation of the sale to the plaintiff of the allocated amount, in this case US$250,000.

(b) Upon advise from Patience Aisam, the plaintiff would, within twenty four (24) hours, transfer the Zimbabwe dollar equivalent. Indeed, in response to the interrogations, the Governor of the Reserve Bank of Zimbabwe says:

“I am advised that during the month of August 2005, plaintiff made payment totaling Z$13,535,110 being the quoted equivalent, at the auction rate, of US$750,000 which the defendant had hoped to pay to the plaintiff. Due to many other competing and pressing national requirements, the defendant was unable to avail the foreign currency, not only to plaintiff but to many other companies in a similar situation who then accepted an offer for immediate refund. Plaintiff declined the refund.”

This is supported by paragraph 4 of the defendant's plea which reads:

“The defendant admits that the sums of money, as set out in paragraph 2 of the plaintiff's further particulars, were deposited with the defendant. The amounts would have exchanged for US$750,000 once this money had been successfully sourced by the defendant. The foreign currency was not availed to the plaintiff because the defendant was unable to mobilize the same.”

It becomes crucial for the defendant to explain the reasons for Patience Aisam to set in motion the process, if foreign currency was unavailable.

My view is simply that the allocation was only made against funds that were already available from the auction.

Patience Aisam states:

“I confirm that during the period referred to, that is to say, from about the 14th January 2005 to August 2005 (the month of August included) I would, on a weekly basis, telephone or instruct that plaintiff be telephoned advising that its application for foreign currency had been approved.”

It is important to note that Patience Aisam spoke of an “approved allocation and not successful bid.” This was so because the plaintiff was on a special list that was not required to bid.

There could, in my view, be no approval or allocation of what was not already available.

Given the condition that the completion of each transaction was totally dependant upon the availability of foreign currency, the possibility of Patience Aisam confirming allocation and asking for payment of the Zimbabwe dollar equivalent, within 24 hours, when there was no foreign currency already earmarked for the plaintiff, is, in my view, very remote.

In addition to the above, it is important to determine at what stage a contract would be concluded between the parties.

The scenario in the operation was as follows:

(a) The Governor agreed to accord the plaintiff special treatment.

(b) The Governor allocated a specific amount to the plaintiff on a “permanent” basis.

(c) Patience Aisam would confirm the allocation and indicate the Zimbabwe dollar component to be paid within 24 hours; and

(d) The plaintiff would, within 24 hours, comply and then forward a list of its customers to the defendant for disbursement of funds.

The above scenario clearly fits into counsel for the plaintiff's submission, that, there were initially two contractual events (ie the Governor's undertaking and then the actual allocation accompanied by compliance on the part of the plaintiff).

I am therefore unable to accept that the above scenario did not create binding obligations on the part of the defendant.

To that end, I am of the view, that, upon compliance by the plaintiff, a binding contract was concluded and what remained was the release of the foreign currency purchased by the plaintiff.

The case of F.C. Hume (Pvt) Ltd v Minister of Natural Resources & Tourism 1989 (3) ZLR 55 indeed supports this view.

With the plaintiff having complied with all the requirements, the contract was already in place and the defendant was obliged to meet its obligation.

The existence of the contract is further strengthened by the fact, that, the defendant admits, that, in August 2005, the plaintiff bought from it US$750,000 for a sum of Z$13,535,110.

However, what the defendant is now saying is simply this:-

“Yes, you bought US$750,000 but give us time to mobilise it. We seem to have sold you what we did not have at the time.”

The defendant then places before the plaintiff two choices, namely, reimbursement in the actual amount paid in Zimbabwe dollars or waiting until it mobilizes the amount of foreign currency already purchased by the plaintiff.

That, in my view, is not to deny contractual obligation.

The plaintiff elected to wait until litigation became the only option.

The plaintiff's election is based on the basis that devaluation has rendered the Zimbabwe dollar worthless.

The defendant's witness confirmed, that, the refund was to be the actual Zimbabwe dollar paid without taking into account the issue of inflation and devaluation.

It would, in the circumstances, be unreasonable to fault the plaintiff's election to await payment of what it actually purchased.

The promise made by the Deputy Governor of the defendant was not disputed in evidence.

It was, in my view, not a novation of the earlier arrangements - but a confirmation of same.

In his submissions, counsel for the defendant merely stated:

“(vii) He believed that foreign currency was available for the simple reason that quotations for payment of Zimbabwe dollars were sent to plaintiff and the plaintiff paid on them.”

The above is in line with paragraph 5(b) of the plea which reads:-

“(c) The defendant denies that it has refused to compensate the plaintiff and avers that it has offered to refund the defendant what it paid as has been done with other companies who faced the same fate. The plaintiff has refused to be compensated in local currency and insisted on payment of US$750,000.

Wherefore, the plaintiff tendering to refund the defendant the amount it paid, with interest at the prescribed rate of 30% per annum, otherwise prays for the dismissal of the plaintiff's claim with costs.”

Having determined that the defendant was contractually obliged to pay the plaintiff the sum of US$750,000 which the plaintiff purchased, as agreed between the parties, it would be unreasonable to allow the defendant to dictate to the plaintiff the form of settlement the plaintiff should accept.

That being the case, the plaintiff's claim for specific performance is unassailable.

The defendant accepted the plaintiff's election for specific performance ie by giving the plaintiff two choices – whereby the plaintiff elected to await payment of the purchased foreign currency.

That position has not changed.

The fact that other companies accepted refunds in Zimbabwe dollars has no bearing on the agreement between the parties herein.

The defendant is estopped from abandoning its obligation.

In International Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd 1993 (1) ZLR 21 (H) the late ROBINSON J, in dealing with the issue of specific performance, had this to say:-

“I would wind up by saying, that, if the right of specific performance is to be shown to have real meaning to businessmen; then, the loud and clear message to go out from the courts is: businessmen beware. If you fail to honour your contracts, then, don't start crying if, because of your failure, the other party comes to court and obtains an order compelling you to perform what you undertook to do under your contract.

In other words, businessmen who wrongfully break their contracts must not think they can count on the courts, when the matter eventually comes before them, simply to make an award of damages in money, the value of which has probably fallen drastically compared to its value at the time of the breach.

Businessmen at fault will therefore, in the absence of good grounds showing why specific performance should not be decreed, find themselves ordered to perform their side of the bargain - no matter how costly that may turn out to be for them…,.”

I agree with the above.

Accordingly, the sanctity of contractual arrangements should continue to be protected by courts of law.

In view of the foregoing, I find in favour of the plaintiff and order as follows:-

1. The defendant be and is hereby ordered to pay the plaintiff the sum of US$750,000 together with interest a tempore morae at the London Interbank rate for United States dollars, 3.5% per annum, from 1 September 2005 to date of payment; and

2. The defendant be and is hereby ordered to pay costs of suit.

Appealed
SC36-12 : RESERVE BANK OF ZIMBABWE vs CAFCA LTD
Ruled By: MALABA DCJ, ZIYAMBI JA and OMERJEE AJA

This is an appeal against the judgment of the High Court granting with costs a claim by the respondent for:

(i) Payment of the sum of US$750,000.

(ii) Interest tempore morae at the London Interbank rate for United States dollars, at 3.5% per annum, from 1 September 2005 to the date of payment.

(iii) Costs of suit.

The factual background to this dispute, which is largely common cause, may be summarised as follows:

The appellant is a financial institution. The respondent is a manufacturer and supplier of an exclusive range of cables for the transmission of communication and distribution of energy used by such entities like the Zimbabwe Electricity Supply Authority, the Rural Electrification Agency, and Tel One.

The respondent's business caters for both domestic and export markets. As at end of 2003, 50% of its sales volumes were largely in exports.

In 2004, the respondent's business experienced slow growth due to inflation and the scarcity of foreign currency. During that year, the respondent's representatives met with the appellant's Governor, Dr. Gideon Gono, with a view of securing foreign currency to purchase imported inputs in order to sustain its business.

Dr Gono gave an oral undertaking to avail US$150.000 per week, to the respondent, from the foreign currency auction system.

In January 2005, the respondent began to receive the said sums of foreign currency against payment of a Zimbabwean dollar equivalent to the appellant via a commercial bank.

The special arrangement was extended to thirty-five (35) other companies selected as the recipients of foreign currency.

This allocation of US$150,000 was, with effect from 16 June 2005, increased to US$250,000.

Weekly allocations, at that new level, were made to the respondent until the end of July 2005.

In August 2005, the respondent made three transfers of money, in Zimbabwe dollars, to the appellant, for the equivalent of the amount of US$750,000. The payments were accompanied by details of external creditors to be paid by the defendant.

The appellant did not pay the foreign currency.

Its position, at the trial, was that foreign currency could not be paid because it was not available.

The respondent's witness, Mr. Turina, confirmed, in evidence, that, the appellant indicated that it did not have foreign currency for disbursement.

On 2, 11 and 19 August, respectively, the respondent made payments, in Zimbabwe dollars, equivalent to US$750,000.

In respect of these three payments, the respondent would receive a phone call from the appellant before making payment.

On 1 August, it received a call from the appellant before depositing a sum of Z$4,438,294,052=45 with the appellant the following day.

With regard to the second transaction, the respondent received a phone call on 5 August. In response thereto, it deposited the sum of Z$4,511,254,261=47 with the appellant on 11 August.

On the third occasion, the telephone call was made on 17 August. The respondent deposited an amount of Z$4,587,562,920=90 with the appellant on 19 August.

Bigboy Masoso, who was the Division Chief Treasury Officer testified on behalf of the appellant to the effect, that, the disbursement of foreign currency could only be made if the front office of the appellant made the funds available. He also stated that the telephone calls made to the respondent, and other companies, were meant to provide quotations to secure constance of the exchange rate.

In the affidavit filed of record, Dr Gono stated as follows at paragraph four thereof as follows:

“I advised them that the Bank would endeavour to source foreign currency for the plaintiff to the tune of USD$150,000 per week in recognition of the plaintiff company's strategic role in the national economy. No formal binding agreement was concluded in this regard and it was never the common understanding of the parties that we were concluding a formal agreement.”

At paragraph six of the affidavit, he stated as follows:

“As a result of further representations made by the plaintiff, the defendant increased the weekly allocation of foreign currency to the plaintiff to USD250,000 from or about the 8th June 2005. Again, it was never the common understanding and contemplation of the parties that they were entering into a formal binding transaction, hence no formal contractual documentation was executed.”

Again, at paragraph seven of his affidavit, he stated as follows:

“I am advised, that, during the month of August 2005, plaintiff made payments totalling Z$13,535,110 being the quoted equivalent at the auction rate of USD750,000 which the defendant had hoped to pay to the plaintiff. Due to many other competing and pressing national requirements, the defendant was unable to avail the foreign currency, not only to plaintiff but to many other companies in a similar situation who then accepted an offer for immediate refund. Plaintiff declined the refund.”

Following a trial, the learned Judge found as follows at p8 of the judgment:

“However, the main issue, in my view, is whether, by allocating to the plaintiff US$150,000 and later US$250,000 from the auction system, the defendant then became obligated to release the money to the plaintiff upon payment by the plaintiff, within twenty-four hours, of the Zimbabwe dollar equivalent at the defendant's instruction.”

At p9 of the judgement, the court a quo stated as follows:

“It becomes crucial for the defendant to explain the reasons for Patience Aisam to set in motion the process, if foreign currency was unavailable. My view is simply that the allocation was only made against funds that were already available from the auction.

It is important to note that Patience Aisam spoke of 'an approved allocation and not successful bid.'

This was so because the plaintiff was on a special list that was not required to bid.

There could, in my view, be no approval or allocation of what was not already available.

Given the condition that the completion of each transaction was totally dependant upon the availability of foreign currency, the possibility of Aisam confirming allocation and asking for payment of the Zimbabwe dollar equivalent, within 24 hours, when there was no foreign currency already earmarked for the plaintiff is, in my view, very remote.”

The learned Judge, at p9, made the following finding:

“I am therefore unable to accept that the above scenario did not create binding obligations on the part of the defendant.

To that end, I am of the view, that, upon compliance by the plaintiff, a binding contract was concluded and what remained was the release of the foreign currency purchased by the plaintiff.

The case of F.C. Hume (Pvt) Ltd v Minister of Natural Resources & Tourism 1989 (3) ZLR 55 indeed supports this view.

With the plaintiff having complied with all the requirements, the contract was already in place and the defendant was obliged to meet its obligation.”

The gist of the court a quo's reasoning was that, at the time the phone calls were made to the respondent, the foreign currency to which the call related was available and the call was an offer which the respondent accepted by depositing the money, in Zimbabwean dollars, with the appellant thereby giving rise to a binding contract.

The court a quo gave judgment in favour of the respondent as sought in the summons. It is against this judgment that the appellant now appealed to this Court.

In the grounds of appeal, the appellant contends that:

1. The court a quo erred in law and fact in not making a finding that the payment by the respondent of the Zimbabwe dollars, as directed by the appellant, did not create a binding contract which was an end itself but that performance was always subject to foreign currency being available.

2. The court a quo erred in law and fact in making a finding that the communications made by Patience Aisam, on behalf of the appellant, calling upon the defendant to pay the Zimbabwe dollars, meant or was evidence that the foreign currency being allocated was available for disbursement to the respondent.

3. The court a quo erred in fact and law in not making a finding that non-availability of foreign currency made performance impossible and that the appellant was entitled to refund the respondent the money it had paid as the suspensive condition, viz, the availability of foreign currency had failed to be met.

4. The court erred in law in allowing the claim for interest and in ordering the interest to run from 1 September 2005.

The primary question to be decided by this Court is: whether or not there existed a binding contract for the disbursement of a sum of foreign currency to the respondent's creditors upon payment by the respondent of an equivalent sum in Zimbabwean currency.

The following are undisputed facts:

As a result of an approach to the appellant's Governor, Dr Gono, on 27 October 2004, for assistance in obtaining foreign currency, the respondent was granted the status of a successful bidder at the weekly foreign currency auction.

Several other companies were on this special list.

The respondent was not required to place bids at the auction but was merely telephonically advised of the agreed weekly allocations.

The practice had been successfully operational from January 2005 to July 2005.

Payment requirements were availed to the respondent who complied by effecting payment of the equivalent amount of the foreign currency in Zimbabwe dollars.

There was no formal contract between the appellant and the respondent.

The respondent was amongst a list of thirty five (35) companies on this special list who had been identified as preferential recipients of foreign currency under the arrangement.

The court a quo correctly found, that, the arrangement between the parties was premised on the availability of foreign currency. As such, no allocation could be made without the availability of foreign currency.

Indeed, both parties were aware that the arrangement for the disbursement of foreign currency was subject always to a condition that foreign currency had to be available in the first instance.

Mr Turina stated, that, due to the scarcity of foreign currency, the respondent had reached an agreement with the appellant whereby bids from the respondent would be given preferential treatment.

He confirmed that the information on the allocations was done telephonically and that once an allocation (i.e. the initial US$150,000 rising to US$250,000) was made, the respondent was required to pay the equivalent in Zimbabwean dollars.

The arrangement had worked well from January 2005 until July 2005.

In August 2005, the appellant failed to disburse US$750,000 to the respondent's customers and suppliers after the respondent had deposited with the appellant an equivalent sum, in Zimbabwe dollars, in three separate tranches.

In this regard, the import of the affidavit of Patience Aisam was that a telephone call would be made to advise of an approved application and not allocation. In effect, the approval and the actual allocation of foreign currency were distinct processes - premised on the availability of foreign currency.

It was the evidence of Patience Aisam's superior, Bigboy Masoso that payments in foreign currency would only occur if the front office availed such funds.

This testimony accords with logic and probability.

Patience Aisam was not employed in the Front Office which was responsible for the allocation of foreign currency.

The court a quo found that there existed a binding contract between the parties.

When regard is had to Dr Gono's affidavit, it is clear that he advised the respondent that the appellant would “endeavour” to source foreign currency for the respondent.

Such assertion does not suggest that the appellant was binding itself to provide the respondent with foreign currency on an ongoing or permanent basis.

It is not in dispute that no allocation of foreign currency was made in August 2005. According to Bigboy Masoso, the system was discontinued because there was no foreign currency.

The 24 hours notice of payment of Zimbabwe dollars was not in fact adhered to by the respondent in August 2005.

The finding by the court a quo, that, upon payment by the respondent, a binding contract was concluded, is not borne out by the evidence with regard to the payments made following telephone calls of 5 and 17 August 2005.

It is to be noted, that, there was no formal contract between the parties.

Dr Gono offered to prioritise the respondent, and other companies, in the allocation and disbursement of foreign currency.

The Court finds that when Dr Gono put in place the special arrangement, there was no intention to create a binding contract to avail foreign currency to the respondent and the other companies on the special list.

The facility was put in place, at the time, because of the acute shortage of foreign currency.

It is highly unlikely, that, given that state of affairs, Dr Gono would seek to bind the appellant to avail foreign currency to the respondent, upon payment of the local currency, when the volume of inflows of foreign currency were unpredictable.

In the circumstances, it would not be logical for Dr Gono to enter into a binding contract to supply foreign currency to the respondent on the terms suggested.

It is not without significance that 35 other companies on the special list subsequently accepted refunds of Zimbabwe dollars deposited with the appellant in August 2005.

This fact is consistent with the position that the allocation of foreign currency was conditional upon its availability at any given time.

The effect of the evidence is that the agreement for the disbursement of foreign currency was predicated upon availability of foreign currency.

It was the respondent's testimony, that, the condition that foreign currency would be availed to the respondent, subject to availability, was expressed orally by the appellant's Governor when he entertained the respondent's request to be allocated foreign currency.

The agreement to accord the respondent preferential treatment, in the disbursement of foreign currency, together with 35 other companies, did not create a binding and enforceable contract between the parties.

The performance of the appellant's obligation, to provide foreign currency, was always qualified or conditional upon its availability.

Reliance by the respondent on previous dealings did not, in the circumstances, give rise to binding contractual obligations between the parties.

The parties understood, that, in the absence of foreign currency, there was no contract between them.

The Court is satisfied, that, the evidence does not establish that a binding contract existed between the parties regarding the disbursement of foreign currency, either formally or on past practice, upon payment by the respondent of the local currency equivalent.

It was found, by the court a quo, that, the Deputy Governor, Mr Ncube, gave an undertaking to make available the US$750,000 to the respondent as and when foreign currency became available.

The Deputy Governor's position was not part of the respondent's case on the pleadings in the court a quo.

The finding by the trial court that Mr Ncube's testimony, that he had promised the respondent that it would be paid the sum of US$750,000, was binding upon the appellant is a misdirection.

The fulfilment of the promise would still have depended upon availability of foreign currency.

By the time that promise was made, the appellant had made it clear to the respondent that it was terminating the special arrangement for all companies concerned and offered to refund the Zimbabwe dollars paid by them.

The appeal is accordingly allowed with costs.

The decision of the court a quo is set aside and is substituted with the following:

“The plaintiff's claim be and is hereby dismissed with costs.”

SC12-21 : TOBACCO PROCESSORS ZIMBABWE (PRIVATE) LIMITED vs TONGOONA MUTASA and OTHERS
Ruled By: MAVANGIRA JA, MAKONI JA and CHATUKUTA AJA

This is an appeal against the whole judgment of the Labour Court upholding the National Employment Council - Tobacco Grievance and Disciplinary Committee's (NEC GDC Committee) finding that the appellant tacitly renewed the respondents' contracts of employment.FACTUAL BACKGROUNDThe following facts are common cause. The respondents were employed by the appellant ...

FACTUAL BACKGROUND

The following facts are common cause. The respondents were employed by the appellant on two-year fixed contracts beginning 1 May 2011 to 30 April 2013.

After the expiry of their contracts of employment, they continued to work for the appellant for eleven months following which the appellant offered them new contracts with the same terms as the expired ones.

The respondents signed the new contract which effectively regularised their employment in retrospect for the period of 1 May 2013 to 30 April 2015.

Upon expiry of the contracts, on 30 April 2015, the appellant retained the respondents until 22 June 2015 on the same terms as the expired contracts. It then offered them one-year fixed term contracts. The proposed contracts had a two-months probation clause and other less favourable conditions.

The respondents rejected the appellant's offer.

The appellant terminated their contracts of employment by letter dated 7 July 2015 on the basis that the negotiations between the parties had collapsed.

Aggrieved by the termination of their employment, the respondents noted a grievance of unfair dismissal with the appellant's Works Council.

The Works Council upheld the decision by the appellant's Human Resources department to offer the appellants one year contracts after the expiry of the two year contracts. It reasoned that there was no legal impediment to the appellant replacing the expired two-year contracts with other contracts which had different terms and conditions from the expired contracts.

The Work's Council further found that the respondents suffered no prejudice as they were paid for the period they worked whilst the parties were negotiating.

Thereafter, the respondents appealed to the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC).

They submitted, that, in instances where an employer allows an employee to work after a fixed-term contract had expired, the contract is deemed to have been tacitly relocated on the same terms and conditions. Therefore, they submitted, there was no basis for the new contracts as there had been tacit renewal. They also averred, that, the alleged negotiations were inconsequential as they ensued after the tacit renewal.

In response, the appellant submitted, that, the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC) had no power to interfere with the findings of facts made by the lower tribunal unless the findings were outrageous in their defiance of logic. The appellant contended that the two-month delay in notifying the respondents of the new offer could not be inferred to mean there was tacit renewal.

It did not intend to renew the two year contracts.

The National Employment Council - Tobacco Grievance and Disciplinary Committee ruled in favour of the respondents.

It held, that, tacit relocation could be safely presumed since the appellant did not communicate its intention to change the terms of the respondents' contracts before their termination and that the respondents were engaged on the same terms and conditions as before. It accordingly ordered the reinstatement of the respondents for the unexpired period of their contracts without loss of pay and benefits or payment of their salaries and benefits up to 30 April 2017.

Aggrieved by this decision, the appellant appealed to the Labour Court (the court a quo) on the ground, that, the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC) grossly misdirected itself when it made a finding that there was a tacit renewal of the respondents' two year employment contracts simply because the appellant allowed the respondents to continue reporting for duty after the expiry of their contracts.

It argued, that, where there are clear indications that the other party did not intend to be bound by the old contract, there could not be tacit relocation of a contract that extended beyond the contractual period.

The appellant submitted, that, tacit relocation could not occur where the parties are engaged in negotiations over a new agreement. It contended that the respondents were allowed to work and were paid for the period when their new contracts were being attended to.

To the contrary, the respondents argued that there was tacit relocation in that the appellant allowed them to continue working on the same conditions from 1 May 2015 to 22 June 2015 notwithstanding that their contracts expired on 30 April 2015.

They also emphasized that the parties did not agree on a new arrangement.

The respondents further indicated that the appellant had the option of terminating their contracts of employment but allowed them to render their services and subsequently introduced unfavourable conditions. It was submitted that a finding against tacit relocation in the circumstances of the case would be contrary to social justice and fair labour standards of equity and fairness in the workplace.

DETERMINATION OF THE COURT A QUO

The court dealt with the issue of whether or not the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC) erred in finding that the contracts of employment had been tacitly relocated.

In doing so, it considered the employment status of the respondents at the time their contracts were terminated. The court a quo found that there was no evidence to the effect that the new contracts were as a result of any negotiation process as no negotiations were done from 1 May to 22 June 2015.

It reasoned, that, the old contracts were tacitly relocated in that the appellant had allowed the respondents to continue working on the same terms and conditions as before, and did not communicate any intention to change the terms and conditions of the employment.

The court a quo also had regard to the precedent that the appellant did not immediately terminate or renew the respondent's contracts but allowed them to continue working, for some period, on the same terms and conditions of the expired contracts.

It reasoned, that, had the appellant not wished to be bound by the old expired contracts, it would have expressed that intention.

The court accordingly concluded, that, the National Employment Council - Tobacco Grievance and Disciplinary Committee's decision did not constitute an outrageous defiance of logic since the facts indicated that there was tacit relocation of the two year contracts.

Aggrieved by that decision, the appellant noted the present appeal on the following grounds:

GROUNDS OF APPEAL

“1. Having accepted that the fixed term contracts between appellant and each of the various respondents had come to an end and that new fixed term contracts have been offered, within two months of the expiry of respondent's contracts, the court a quo erred in finding notwithstanding those agreed facts, that the old contracts had been relocated.

2. The court a quo erred in not coming to the conclusion that the negotiation that took place after the expiry of the contracts were such as negated any finding that there was an extension of the contractual relationship between the parties by the quasi-mutual assent.

3. The court a quo erred in imposing upon appellant a contract it had not concluded to prejudice the clear terms it had actually offered. (sic)

4. Respondents, having rejected the terms of the contract offered by appellant, the court a quo erred in concluding that respondents had a contract to enforce.”

SUBMISSIONS BEFORE THIS COURT

At the hearing, counsel for the appellant submitted that the court a quo asked itself the wrong question, and, ultimately, gave itself the wrong answer.

The wrong question was whether it had been shown that there had been negotiations between the parties from 1 May 2015 to 22 June 2015, and, if not, what the effect of the absence of negotiations, during that period, would be.

The court a quo's ratio was that, upon the expiry of the contract, they only engaged in negotiations after a period of six weeks: because of that silence, there was tacit relocation of the contract.

He contended, that, the real dispute between the parties was not that the respondents' contracts had been relocated but that the respondents were aggrieved by the terms of the new contracts.

Counsel for the appellant submitted, that, the respondents admitted that there were negotiations and that they did not refuse to sign the one-year contracts but were looking forward to working under the old two-year contracts.

Counsel for the appellant further contended, that, a holistic analysis of the facts would show that relocation of contracts in 2015 could not have been the appellant's intention.

The parties knew of the need for a written contract at all material times as evidenced by the fact that in 2013 the respondents worked for eleven months without contracts and later signed contracts backdated to the period when they were without contracts.

The parties haggled over the terms of the one year contracts as the employees did not like the new terms of the contract. They did not argue that the old contracts had relocated.

To confirm the appellant's position some of the employees signed the one-year contracts.

He concluded by saying that tacit relocation cannot be inferred from the facts of this matter.

On being asked the date when the negotiations started, he was unable to pinpoint a date.

He however submitted that even if there were no negotiations between 1 May and 20 June 2015 a tacit relocation could not be inferred when the parties subsequently negotiated.

He further submitted, that, the fact that the parties were negotiating shows that there was no intention on the part of the appellant to revert to the old contract. He relied for that proposition on the case of Justin Kwangwari v Commercial Bank of Zimbabwe HH79-03.

He submitted, that, there is no period set in our law between the expiry of a fixed term contract and the conclusion of a new one for it to be held that there was tacit relocation. He urged the court to consider all the facts holistically in order to draw inferences consistent with the proven facts.

On being asked what would be the status of the employees in the seven (7) weeks, before the offer, he submitted that the status was determined by the new contract.

Counsel for the respondents submitted, that, the facts of the matter point to tacit relocation.

He indicated that the root of the dispute lies in the determination of the respondents' employment status in the seven (7) week period.

Accordingly, he referred to section 12(1) of the Labour Act [Chapter 28:01] (the Act) for the proposition that the legislature envisaged the existence of 'deemed contracts' in respect of an employee who works for an employer and is receiving or entitled to receive any remuneration notwithstanding that such contract has not been reduced to writing.

He also referred to section 12(2) of the Labour Act, which, so he argues, demands mandatory compliance by the employer to inform the employee, in writing, the period in terms of which they are engaged and section 12(3)(a) of the Labour Act which provides that where a contract does not specify its duration or date of termination, it is deemed to be one without a limit of time.

As such, he argued, the legislature sought to protect employees from unscrupulous employers who have more bargaining power than the employees.

He emphasized, that, there was tacit relocation in that the respondents reported for work and were remunerated under the old contracts.

He further indicated that the respondents' concerns did not only relate to their disgruntlement with the new offer but also spoke to the issue of tacit relocation.

He further submitted, that, the appellant's offer of new contracts of employment was immaterial to the concept of tacit relocation.

Additionally, he stated that the one-year contracts offered by the appellant were unjust, unfair, and violated the respondents' right to fair and safe labour practices and standards provided for in section 65 of the Constitution of Zimbabwe, 2013.

In rebuttal, counsel for the appellant submitted that there can be a delay after the expiry of the contract and the delay does not amount to relocation.

It would be wrong to say once there is a delay then section 12 of the Labour Act is the answer.

He submitted that section 12 uses “shall” in a directory sense and not in a peremptory manner. Failure to comply with it does not render conduct void.

He concluded by saying that section 12 of the Labour Act is what the employer was complying with in the seven (7) weeks.

ISSUE FOR DETERMINATION

From a consideration of the grounds of appeal raised and the submissions made, one issue falls for determination which is:

Whether or not the court a quo erred in finding that the contracts of employment in question had been tacitly relocated.

A reading of the record reflects that the ratio of the court a quo's ruling was that the respondents' continued rendering of services from 1 May 2015 to 22 June 2015 in terms of the expired contracts constituted tacit relocation of the contracts by the appellant.

That tacit relocation was at the centre of the parties' dispute is also evidenced in the way the matter progressed before the various fora. This will be shown by a perusal of the minutes of the appeal hearing of 26 October 2015 before the Work's Council to the respondents' appeal before the National Employment Council - Tobacco Grievance and Disciplinary Committee (NEC GDC Committee) and the subsequent proceedings in the court a quo.

THE LAW

It is settled law that a fixed-term contract of employment automatically expires at the end of the specified period unless the parties thereto mutually agree to its termination: see ZIMRA v Mudzimuwaona SC04-18.

However, in certain instances, despite the expiry of the period of employment, the employer-employee relationship may be found to exist owing to the parties' conduct under the concept of tacit relocation.

Tacit relocation, as it applies to contracts of employment, entails that where an employee's fixed term contract expires without renewal and the employee continues to render his services to the employer with the employer paying the previously agreed remuneration, the expired contract is deemed to be relocated. Therefore, the employee is deemed to be employed on the same terms and conditions as the previous contract.

In Gumbo v Air Zimbabwe (Pvt) Ltd 2000 (2) ZLR 126…, the court made the following pertinent remarks regarding the principle of tacit relocation;

“Finally, the best that can be said for the applicant is that in certain cases, akin to the present, there is a presumption that when the parties continue the employer-employee relationship beyond the contractual period, without agreeing new terms, there is a tacit relocation of the expired contract on the same terms and for the same duration.

In other words, all things being equal, it could be said that on 1 October 1999, the applicant commenced a new probationary period.

However, this presumption does not operate when it is clear that one of the parties has no intention of continuing on the terms of the expired contract: see Lilford v Black 1943 SR 46 at 47, where BLAKEWAY J said:

'The renewal of a lease or of a contract for services to be performed can take place either by express agreement or tacitly. If, after the expiration of the period provided for the duration of the contract, the parties continue their relationship without any fresh agreement the law presumes, in the absence of indications to the contrary, that they have agreed to enter upon a new lease on the same terms as the expired lease. But, this presumption does not operate when it is clear that the parties, or one of them, does not intend to carry on with the contract on the old terms.'” …,.

JOHN GROGAN in his book “Workplace Law” 8th ed…, states the following:

“If, after the agreed date for the termination of the contract, the employee remains in service and the employer continues to pay the agreed remuneration, the contract is deemed to have been tacitly renewed, provided that an intention to renew is consistent with the parties' conduct. The relocated contract will continue on exactly the same terms and conditions as the previous fixed-term contract, except that the duration of the contract need not be the same as that of the original contract; the life of the relocated contract must be determined in light of the particular circumstances of each case.”…,.

In Golden Fried Chicken (Pty) Ltd v Sirad Fast Foods CC & Ors 2002 (1) SA 822 (SCA)…, the court held:

“After the termination of the initial agreement, and prior to this letter, the parties (in the light of the facts recited) conducted themselves in a manner that gave rise to the inescapable inference that both desired the revival of their former contractual relationship on the same terms as existed before.

Taken together, those facts establish a tacit relocation of a franchise agreement (comparable to a tacit relocation of a lease) between the appellant and Sirad (Shell South Africa (Pty) Ltd v Bezuidenhout and Others 1978 (3) SA 981 (N) 984B-E).

A tacit relocation of an agreement is a new agreement and not a continuation of the old agreement (Fiat SA v Kolbe Motors 1975 (2) SA 129 (O) 139D-E; Shell 985B-C).

The fact that the appellant had forgotten that the agreement had lapsed is beside the point because in determining whether a tacit contract was concluded a court has regard to the external manifestations and not the subjective workings of minds (Fiat SA 138H-139D).”…,.

The principle that can be drawn from the cited authorities is that an inference of tacit relocation is dependent upon the continued existence of an employer-employee relationship after the expiration of the contract. The employee will continue rendering his services to the employer who, in turn, pays remuneration in terms of the expired contract.

Tacit relocation is based on the intention of the parties which must be consistent with their conduct. The court, in determining such an issue, considers all the facts holistically as it draws inferences which are consistent with the proved facts.

The principle of tacit relocation of contracts of employment appears to be embodied in statute, in particular section 12 of the Labour Court Act [Chapter 28:01] which provides:

“12 Duration, particulars and termination of employment contract

(1) Every person who is employed by or working for any other person and receiving or entitled to receive any remuneration in respect of such employment or work shall be deemed to be under a contract of employment with that other person, whether such contract is reduced to writing or not.

(2) An employer shall, upon engagement of an employee, inform the employee, in writing, of the following particulars —

(a) The name and address of the employer;

(b) The period of time, if limited, for which the employee is engaged;

(c) The terms of probation, if any;

(d) The terms of any employment code;

(e) Particulars of the employee's remuneration, its manner of calculation, and the intervals at which it will be paid;

(f) Particulars of the benefits receivable in the event of sickness or pregnancy;

(g) Hours of work;

(h) Particulars of any bonus or incentive production scheme;

(i) Particulars of vacation leave and vacation pay;

(j) Particulars of any other benefits provided under the contract of employment.

(3) A contract of employment that does not specify its duration or date of termination, other than a contract for casual work or seasonal work or for the performance of some specific service, shall be deemed to be a contract without limit of time:

Provided that a casual worker shall be deemed to have become an employee on a contract of employment without limit of time on the day that his period of engagement with a particular employer exceeds a total of six weeks in any four consecutive months.

(3a) A contract of employment that specifies its duration or date of termination, including a contract for casual work or seasonal work or for the performance of some specific service, shall, despite such specification, be deemed to be a contract of employment without limitation of time upon the expiry of such period of continuous service as is —

(a) Fixed by the appropriate employment council; or

(b) Prescribed by the Minister, if there is no employment council for the undertaking concerned, or where the employment council fixes no such period; and thereupon the employee concerned shall be afforded the same benefits as are in this Act or any collective bargaining agreement provided for those employees who are engaged without limit of time.”

Section 12(2) of the Labour Act has been interpreted to merely impose an obligation on the employer to supply the information and does not require the parties to sign a written contract: see Rumbles v Kwa Bat Marketing (Pty) Ltd (2003) 8 BLLR 811 LC.

The statement of particulars is not the contract itself nor is it even conclusive evidence of the contract: see L. MADHUKU, Labour Law in Zimbabwe, 2015…,.

However, a proper construction of section 12(1) of the Labour Act yields the result, that, where an employee renders services in return for remuneration, a contract of employment exists notwithstanding that such a contract has not been reduced to writing.

Tacit relocation is therefore presumed.

This is made clearer by the provisions of section 12(3a) of the Labour Act which states, that, a fixed term contract shall be deemed to be a contract without limit of time upon the expiry of such period of continuous service.

APPLICATION OF THE LAW TO THE FACTS

A determination of whether a written contract was automatically renewed in accordance with the principle of tacit relocation is a question of fact which has to be answered after an analysis of the particular facts and circumstances of each case: see Sun International (South Africa) Ltd v Crocodile Enterprises [2014] ZANWHC 52.

In casu, it is not in dispute that the parties' relationship was governed by a written contract of employment which terminated by effluxion of time on 30 April 2015. As at that date, the respondents would have ceased to be the appellant's employees.

However, the appellant allowed the respondents to continue working on the old terms and conditions of their contracts until 22 June 2015 when it then offered the respondents one-year contracts with less favourable conditions.

It can be reasonably inferred from this conduct of the parties that a new contract had come into existence by the principle of tacit relocation.

Applying the dicta in Golden Fried Chicken (Pty) Ltd v Sirad Fast Foods CC & Ors 2002 (1) SA 822 (SCA)…, that, tacit relocation of an agreement is a new agreement and not a continuation of the old agreement, it follows, that, a new agreement between the parties came into effect on 1 May 2015 owing to the appellant's conduct of retaining the respondents in its employ on the same terms and conditions of the expired contracts.

Such a finding would have resolved the matter; however, a secondary issue arises from the parties' submissions.

The issue for consideration is the effect of the alleged negotiations, if any, on the relocated contract.

This is necessitated by the appellant's position that the existence of negotiations regarding a new contract negates any finding to the effect that the old contracts were relocated. It is the appellant's position that the engagements between the parties, after the expiration of the contract, are a clear indication that it had no intention of continuing on the old terms.

It relied on communication by the appellant's Human Resources Manager, dated 7 July 2015, informing the respondents that the negotiations had collapsed, thus, a new contract would not materialize and the Works Council determination to that effect.

Per contra, the respondents aver, that, negotiations regarding the new offer made by the appellant did not have any legal effect on tacit relocation as a new contract had already materialised.

In their written submissions, they aver that the purported negotiations were induced by duress as the appellant's Human Resources' Manager threatened to dismiss them if they did not abandon the claim for tacit relocation and dispense with the services of their legal practitioners.

As such, they submitted that the 'alleged collapse of negotiations' in the circumstances, could not be a basis for the termination of employment.

Since tacit relocation is inferred from the presumed intention of the parties to the contract and their conduct, where it is established that both parties accepted that the old contract had terminated and engaged in negotiations regarding a new contract, tacit relocation will be negated.

This is for the reason that neither of the parties would have conducted themselves in a manner that gave rise to the inescapable inference that both desired the revival of their former contractual relationship on the same terms as existed before.

In this regard, the court a quo made a factual finding that there was no evidence to the effect that there were any negotiations between the parties from 1 May 2015.

It further found, that, although the appellant may have intended to terminate the contracts, it failed to communicate that intention.

It also took into account the manner in which the parties dealt with the same issue in the past.

When the initial two year contracts expired the employer did not immediately renew the contracts. It merely allowed the employees to continue rendering services on the same terms and conditions of the expired contracts.

It only regularised the contracts after eleven (11) months.

It is settled law that an Appellate Court may only interfere with the decision reached by a lower court based on factual findings where gross misdirection has been established: see Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S).

The appellant has not alleged such a gross misdirection which necessitates this court's interference.

More importantly, there is nothing on record to show that the parties engaged in negotiations during the period 1 May 2015 to 22 June 2015 when they were without contracts.

There is no evidence, that, during this period, the appellant communicated to the respondents its intention as to whether or not the two-year contracts would be renewed or terminated.

The first meeting on record occurred in the appellant's board room on 29 June 2015, notably after the period upon which the respondents base their claim for tacit relocation. This is followed by the appellant's letter of 7 July 2015 indicating the collapse of the alleged negotiations.

Given this, the court a quo's finding cannot be assailed.

Its decision was based on a correct application of the principle of tacit relocation as enunciated in Gumbo v Air Zimbabwe (Pvt) Ltd 2000 (2) ZLR 126.

The fact of the matter is, that, for the two month period, that is 1 May 2015 to 22 June 2015, the conduct of the parties reflects that they intended to be bound by the expired contracts.

Those contracts were therefore tacitly relocated and were to expire after two years - just like the expired contracts.

In the circumstances of this case, a mere attempt to negotiate a new contract does not operate to vary an existing binding contract. The appellant's new offer thus amounted to an attempt to unilaterally vary the respondents' relocated contracts.

This is a classical case of the application of subsections 12(1) and (3a) of the Labour Act [Chapter 28:01] which seek to protect employees by estopping an employer from alleging the non-existence of a contract of employment where there has been continued service in terms of an expired contract.

Counsel for the appellant argued that it would be wrong to invoke section 12 of the Labour Act everytime there is a delay in re-negotiating an expired contract. He contended that section 12 of the Labour Act uses “shall” in a directory sense and not in peremptory terms.

It is the generally accepted rule of interpretation that the use of the word “shall” as opposed to “may” is indicative of a peremptory intent on the part of the legislature.

Failure to comply with the mandatory dictates of law renders the act done a nullity.

However, where the legislature has not explicitly provided that non-compliance is fatal, there is a presumption that the legislature left it to the courts to determine the consequences of non-compliance.

In Shumba & Anor v The Zimbabwe Electoral Commission & Anor SC11-08…, the court had occasion to deal with the issue of interpreting a statute that does not prescribe the consequences of non-compliance with a statutory provision.

In interpreting the provisions of the Zimbabwe Electoral Commission Act, CHIDYAUSIKU CJ remarked as follows…,:

"It is the generally accepted rule of interpretation that the use of peremptory words such as 'shall' as opposed to 'may' is indicative of the legislature's intention to make the provision peremptory.

The use of the word 'may' as opposed to 'shall' is construed as indicative of the legislature's intention to make a provision directory.

In some instances, the legislature explicitly provides that failure to comply with a statutory provision is fatal. In other instances, the legislature specifically provides that failure to comply is not fatal.

In both of the above instances, no difficulty arises.

The difficulty usually arises where the legislature has made no specific indication as to whether failure to comply is fatal or not.

In the present case, the consequences of failure to comply with the provisions of section 18 of the Zimbabwe Electoral Commission Act are not explicitly spelt out.

In those statutory provisions where the legislature has not specifically provided for the consequences of failure to comply, it has to be assumed that the legislature has left it to the Courts to determine what the consequences of failure to comply should be.

The learned author FRANCIS BENNION in his work Statutory Interpretation suggests that the courts have to determine the intention of the legislature using certain principles of interpretation as guidelines. He had this to say at pp21-22:

'Where a duty arises under a statute, the court, charged with the task of enforcing the statute, needs to decide what consequence Parliament intended should follow from breach of the duty.'

In Sutter v Scheepers 1932 AD 165 at pp.173, 174 the court gave guidelines on how the real intention of legislature can be arrived at. These were summarised in Pio v Franklin NO and Another 1949 (3) SA 442 (C) as follows:

'(1) The word 'shall' when used in a statute is rather to be considered as peremptory, unless there are other circumstances which negative this construction.

(2) If a provision is couched in a negative form, it is to be regarded as a peremptory rather than a directory mandate.

(3) If a provision is couched in positive language and there is no sanction added in case the requisites are not carried out, then the presumption is in favour of an intention to make the provision only directory.

(4) If when we consider the scope and objects of a provision, we find that its terms would, if strictly carried out, lead to injustice and even fraud, and if there is no explicit statement that the act is to be void if the conditions are not complied with, or if no sanction is added, then the presumption is rather in favour of the provision being directory.

(5) The history of the legislation also will afford a clue in some cases.'”

The principle which comes out of the guidelines is that where strict adherence to the wording of a statute leads to an injustice, or even fraud, in instances where no penalty is prescribed, it may be desirable to lean in favour of making the provision directory.

From the cited authorities, it is the general position that the use of the word 'shall' in a statutory provision requires mandatory compliance.

Where the penalty for infraction of the provision is not explicitly stated, it is for the courts to determine what the consequences of failure to comply should be. In doing so, the court must interrogate the purpose of the relevant statute and pronounce a penalty which is proportionate to the mischief the legislature sought to remedy.

It is my considered view that both provisions are peremptory owing to the specific use of the word “shall” which has mandatory connotations.

Section 12(1) of the Labour Act [Chapter 28:01] provides:

“12 Duration, particulars and termination of employment contract

(1) Every person who is employed by or working for any other person and receiving or entitled to receive any remuneration in respect of such employment or work shall be deemed to be under a contract of employment with that other person, whether such contract is reduced to writing or not.”

It is accepted that there is no explicit obligation on an employer, under this provision, to reduce a contract into writing. However, that fact alone does not render the provision directory.

The use of the word “shall” after a description of a factual set of facts in an employment set up, followed by the pronouncement of a specific outcome, is indicative of the fact that the legislature intended the provision to be peremptory.

In enacting section 12(1) of the Labour Act, it appears that the legislature envisaged a situation where services are rendered in return for remuneration but the recipient of the services later disputes the existence of a contract of employment.

The peremptory nature of section 12(1) of the Labour Act is not dependent on whether or not a particular act is done, which, in this case, would be a mandate on the employer to reduce a contract into writing. The peremptory nature of the provision lies in the deemed existence of a contract of employment which follows the rendering of services and remuneration for such services.

Once it is established that services have been rendered, and there is a correlative entitlement to remuneration or actual remuneration, a contract is deemed to be in existence.

It is prima facie proof of employment.

A similar interpretation can be ascribed to section 12(3) of the Labour Act. The peremptory nature of the provision stems from the fact that a contract is deemed to be without limit of time where no specific details of its duration are provided.

The same applies to a casual worker who continues rendering services notwithstanding the expiry of the specific period for which he was engaged.

Therefore, the onus to disprove the continued existence of the contract rests on the party disputing its existence.

It is my considered view, that, the legislature must have been cognisant of the fact that employees are vulnerable under some unscrupulous employers, hence the use of such peremptory provisions in section 12 of the Labour Act.

Having said the above, the circumstances of this case fall into the ambit of the sentiments of the court in Melamed and Hurwitz v Vorner Investments (Pty) Ltd 1984 (3) SA 155 (A) at 165B-C, that:

“…, a court may hold that a tacit contract has been established where, by a process of inference, it concludes that the most plausible probable conclusion from all the relevant proved facts and circumstances is that a contract came into existence…,.”

Applying this approach to the matter at hand, an inference of tacit relocation was justified on the facts of this case.

The court a quo's finding, that, the respondents' contracts were tacitly renewed from 1 May 2015, is unassailable. Therefore, the appellant's termination of the respondent's contracts of employment in the circumstances was grossly irregular.

An employer clearly cannot terminate a contract that has expired - even though it has been tacitly renewed.

The appeal therefore lacks merit and ought to be dismissed. Costs will follow the cause.

It is accordingly ordered as follows:

“The appeal is dismissed with costs.”

SC13-21 : MOSES MAWIRE vs RIO ZIM LIMITED (PRIVATE) LIMITED
Ruled By: GOWORA JA, PATEL JA and MAVANGIRA JA

After hearing the parties on 9 March 2018, the court was of the unanimous view that the appeal was devoid of any merit and accordingly ordered as follows:“The appeal be and is hereby dismissed with costs. Full reasons will be available in due course.”The following are the reasons:BACKGROUND FACTSThe appellant ...

After hearing the parties on 9 March 2018, the court was of the unanimous view that the appeal was devoid of any merit and accordingly ordered as follows:

“The appeal be and is hereby dismissed with costs. Full reasons will be available in due course.”

The following are the reasons:

BACKGROUND FACTS

The appellant was employed by the respondent as a Human Resources Superintendent on 1 November 2006. He was based at the Head Office in Harare. In February 2009 he was transferred to Renco Mine. His contract of employment provided for, amongst other things, locality allowance, leave bonus, and a company vehicle which was to be fuelled and maintained by the company.

In February 2009, as happened nationwide, the respondent shifted from the use of the Zimbabwean dollar to the United States dollar when the Zimbabwean dollar became moribund.

On 19 February 2009, the respondent wrote a letter to the appellant notifying him, that, following the adoption of the United States dollar, his salary would be US$4,147=43 per month.

The letter was silent on allowances.

On 21 March 2009, through an office memorandum, all the respondent's employees were notified of the changes in their salaries and allowances. The memorandum provided, that, the respondent had implemented salary scales based on regional 'SADC' rates for employees in all grades. Consequently, transport and meals allowances, together with leave bonus payable when employees proceeded on annual leave, were to fall away with effect from 1 March 2009 for all employees in Grade 10 and above. Transport and meals allowances were also removed for employees in Grade 10 and above.

The respondent further indicated that the employees would be kept abreast of further changes.

Following the adoption of the United States dollar, the appellant was being paid a globular salary without any allowances. The respondent did not provide the appellant with the motor vehicle, but, rather, supplied him with fuel and paid for the maintenance of his personal car.

This was regardless of the fact that the respondent's contract of employment stated that he was entitled to allowances and a motor vehicle maintained by the company.

In June 2014, the appellant raised a complaint of unfair labour practice with the Labour Officer. He demanded payment of the following:

1. Outstanding locality allowance for the period from February 2009, when he was transferred to Renco Mine, up to the time when he made the complaint in June 2014;

2. Leave bonus from 2009 to 2013; and

3. Mileage for use of his personal motor vehicle from 1 March 2007 up to the time of the making of the claim.

At conciliation, the parties failed to reach a settlement and the matter was referred to arbitration.

Before the arbitrator, the appellant argued, that, he was entitled to payment of outstanding locality allowances and leave bonus and to a motor vehicle coupled with its maintenance and repairs. The appellant had been using his personal vehicle for the respondent's business as the respondent had failed to provide the motor vehicle. For this reason, he claimed compensation on the mileage of his vehicle on the same basis as if it was on hire to the respondent.

The appellant also contended, that, the respondent had unilaterally varied the contents of the contract of employment.

The respondent raised a preliminary point.

It was to the effect, that, in the event that the appellant's contract was found to have been violated, the appellant's claims had prescribed in terms of section 94(1)(b) of the Labour Act [Chapter 28:01] (herein after referred to as 'the Act').

The respondent also argued, that, none of the respondent's contractual benefits were being violated.

The arbitrator dismissed the preliminary point.

In his award, he made the finding, that, all the claims made by the appellant had been sustained. He thus ordered the respondent to pay the sum of US$197,563 for compensation as had been claimed by the appellant. This was to be paid in two equal monthly instalments of US$98,781=50 with the final payment being paid not later than 1 October 2014.

APPEAL TO THE LABOUR COURT

Dissatisfied with the arbitrator's ruling and award, the respondent appealed to the Labour Court.

A number of grounds of appeal were raised. The court a quo summarized them to amount to:

1. That prescription applied to the claims and those claims that were older than two years had prescribed in terms of section 94(2) of the Labour Act [Chapter 28:01].

2. That the contract of employment was varied by the office memorandum, and by conduct, and that the arbitrator therefore erred at law in his interpretation of the facts.

3. That, there was no prejudice to the employee's remuneration as occasioned by the new method of payment.

4. That, the arbitrator had grossly misdirected himself in the relevant findings of fact so much as to amount to a misdirection at law.

After hearing the parties, the Labour Court allowed the appeal and set aside the arbitral award.

The Labour Court accepted the argument presented by the respondent. It came to the conclusion, that, once an infraction has occurred, and becomes known by the affected party, it prescribes if it is not actioned within two years from the date when the dispute first arose.

The court ruled, that, all the outstanding claims that were more than two years when the claim was instituted by the appellant had prescribed.

On whether or not there was unilateral variation of the contract, the Labour Court found, that, the contract had been unilaterally varied by the respondent.

In its judgment, the Labour Court stated, that, although there was unilateral variation of the contract by the respondent - for five years the appellant received his salary without any complaint. By so doing, the appellant, who was a human resources practitioner, had demonstrated, by conduct, that he accepted the new salary structures.

As a result, the allowances claimed by the respondent were no longer claimable as there was now a new contract in existence.

The Labour Court further found no merit in the appellant's claim which was based on the contention that he had been hiring out his personal motor vehicle to the respondent.

The court a quo found, that, there was no standing agreement between the parties to that effect, and, therefore, to say that the appellant had hired out his vehicle to the respondent would amount to overstretching the contract.

THIS APPEAL

The appellant was aggrieved by the judgment of the court a quo and appealed against its decision on the following grounds:

1. The Labour Court fundamentally misdirected itself on a question of law in failing to find that the claims of the Appellant had not prescribed, they being claims arising from unfair labour practices of a continuing nature covered by section 94(2) of the Labour Act.

2. The Labour Court further erred on a question of law in finding that the contract of employment between the Appellant and the Respondent had been varied such that the appellant would not be paid the claimed allowances.

3. The Labour Court further erred in law in failing to award the Appellant compensation in respect of the usage of his motor vehicle for the business purposes of the respondent.

At the beginning of the hearing, counsel for the appellant indicated that he was abandoning the third ground of appeal which related to the issue of the motor vehicle.

Notably, this ground formed the bulk of the appellant's claim. He therefore restricted his argument to the first two grounds which relate to the claims for outstanding locality allowance and leave bonus.

SUBMISSIONS ON APPEAL

Counsel for the appellant's contention was that the Labour Court erred in ruling that the appellant's claims had prescribed and he placed reliance on section 94(2) of the Labour Act.

He argued, that, the unfair labour practice commenced in March 2009 and continued until the matter was brought to the attention of the Labour Officer and to the Labour Court.

The gravamen of his argument is that the dispute was of a continuous nature, and, therefore, on the basis of section 94(2) of the Labour Act, no prescription could run.

He further contended, that, the appellant's rights, conferred by the Labour Act, were “frozen” during the period of his employment. Therefore, any infractions of these rights could only be actioned after termination of the employment relationship.

On variation of the contract of employment, the contention was that the introduction and operation of multi-currencies, in February 2009, did not operate to vary the contracts of employment in any way.

The respondent remained indebted in respect of the appellant's allowances.

Secondly, the memorandum issued in March 2009 was a unilateral act by one party to a contract of employment and did not have the effect of validly taking away vested rights.

Counsel for the respondent submitted, that, the rights accorded by the Labour Act are not “frozen” as there are remedies provided by the Labour Act for any infraction of the rights. He described the appellant's contention as “judicial heresy.”

Counsel for the respondent further submitted that section 94 of the Labour Act must be read together with section 8 of the same Act.

Section 94 of the Labour Act limits itself to unfair labour practices and these the appellant had not been able to identify. For this reason, he submitted, the protection of section 94 of the Labour Act was not available to the appellant.

The kind of infractions that the appellant complained about are infractions that gave him a full and competent cause of action within a period of two years. He submitted that the appellant's suggestion, that the two year period must be counted starting from after the end of the employment relationship, is not worthy of any notice due to its frivolity.

ISSUES FOR DETERMINATION

The issues for determination by this court are:

1....,.

2. Whether or not the contract of employment had been varied....,.

Whether or not the contract of employment was varied

The question must of necessity, therefore, be answered whether or not the contract was in fact varied unilaterally.

The appellant submitted, that, the change in currency, following the adoption of the use of the United States dollars, did not alter the contract of employment. He further contended that he was still entitled to the car loan, as per the contract of employment, which was operative during the time when the Zimbabwean dollar was in use.

Counsel for the respondent, on the other hand, submitted that the local dollar contract could not have had its terms transposed into the US Dollar period. It was his contention, that, in order to successfully advance the contention that there had been variation of the contract, the appellant had to first identify the contract expressed in United States Dollars, set out its terms and then show how it was unlawfully varied by the respondent.

As already mentioned earlier, the respondent issued out an internal memorandum, on 21 March 2009, following the adoption of the United States dollar currency.

This memorandum had the effect of altering the appellant's contract of employment.

Following the memorandum, the appellant, who was the Human Resources Officer, accepted his new salary in terms of the memorandum. He was receiving a salary in terms of the memorandum, and, for the five years, he never raised any complaint nor did he challenge the new salary scale.

It is trite, that, consent can either be express or implied.

In the case of Smith v Hughes LR 6 QB 597…, it was stated that:

“If, whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party, upon that belief, enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party's terms.”

For five years, the respondent accepted a salary, in terms of a memorandum which had no provision for any allowances. By such conduct, he accepted the variation of the terms of his contract of employment.

If he genuinely felt that the memorandum breached his contractual rights, he ought not to have accepted the salaries and ought to have mounted his challenge at the pertinent time or within the permitted period.

In the absence of any challenge to the variation of the contract, it is clear, that, after variation of the contract of employment, there was acquiescence by the appellant.

If there was acceptance of the variation, as there was, there was no claim to be prescribed.

It follows, that, by his conduct, the appellant impliedly consented to the variation of his contract.

In such circumstances, he could not claim any benefits flowing out of the contract that had been varied.

The court a quo thus correctly found, that, the contract of employment was varied with the consent of the appellant, and, therefore, the allowances claimed by the appellant were no longer claimable under the contract ushered in by the memorandum.

It is for these reasons that we found that the appeal had no merit and proceeded to grant the order that we did as recorded at the beginning of this judgment.

HB04-15 : BULAWAYO CITY COUNCIL vs TRISHUL PROPERTIES
Ruled By: TAKUVA J

This is an application for summary judgment in terms of Order 10 Rule 64 of the High Court Rules 1971.

The applicant, a local authority is obliged by the law to provide certain services to residents of the City of Bulawayo which services include the provision of road maintenance, refuse collection, and water and sewer services.

The respondent is a resident of the City of Bulawayo and is the registered owner of a certain immovable property otherwise known as Number 58A Robert Mugabe Way, Bulawayo.

In fulfillment of its legal obligations, the applicant provided the services stated above to the respondent and raised service charges amounting to US$20,126=40.

The respondent failed and/or refused to pay the above mentioned service charges and the applicant issued a summons on 10 December 2013 claiming:

(a) Payment of $20,126=40 being the total service charge due and payable;

(b) Interest a tempore morae, at the prescribed rate, from the 30th day of January 2011 to the date of payment;

(c) Costs of suit.

The summons was served on the respondent on 13 December 2013 and it entered appearance to defend on 17 December 2013. On 10 January 2014, the respondent's legal practitioners requested for further particulars as follows:

“To enable the defendant to plead, plaintiff should supply the following particulars;

1. It is alleged in para 3 of plaintiff's declaration that it provided services to defendant, and, as such, is entitled to levy; rates; road levy; water, and other services; of the $20,126=40, how much is for:

(i) Rates;

(ii) Road levy;

(iii) Water; and

(iv) Other services.

2. The said sum is $20,126=40 is for which period (sic), a full itemized breakdown is requested.

3. The claimed sum is said to have a component of rates:

(a) How much is the monthly rates in respective of the property;

(b) Since the rates are a percentage of the value of the property, how much is the property valued at.”

The applicant supplied its further particulars on 18 March 2014 as follows:

“Plaintiff replies to defendant's request for further particulars as follows:

1. Ad paragraph 1 thereof

(i) The charges vary from month to month but charges are calculated as shown from Annexure “A” hereto which represent the charges for 30th November 2013 totalling $770=36 and for 31st December 2013 in the sum of $699=27.

(ii) For the period 30th January 2011 to the 30th November 2013 amounting to $20 215=50. See Annexure “B” hereto”.

2. Ad paragraph 2 thereof

See Annexure “B” hereto.

3. Ad paragraph 3 thereof

(a) $500 see Annexure “A” hereto.

(b) Land valued at $393,500 and improvements valued at $65,000. See Annexure 'A' hereto.”

The respondent, who was supposed to have filed his plea on or before 3 April 2014 in terms of the Rules of this Court, failed to do so.

The applicant applied for summary judgement on 17 April 2014 on the ground that the respondent has no bona fide defence and that the appearance to defend, and the request for further particulars, were nothing more than ways of buying time.

The application was vigorously opposed on the following grounds:

1. Wilful Disregard of the Law

The submission here is that the present application ought to be dismissed for want of compliance with the peremptory provisions of section 279 and 281 of the Urban Councils Act (hereinafter called the Act). Section 281 reads:

“Legal proceedings for recovery of rates

No legal proceedings for the recovery of rates shall be instituted against any person referred to –

(a) In subsection 2 of section two hundred and seventy-nine unless the council has complied with that subsection and the owner has failed, within fourteen days, to comply with the demand served on him in terms of that subsection requiring him to pay the amount stated therein; or

(b) In subsection (3) of section two hundred and seventy nine unless he has failed, within thirty days, to comply with the demand served on him in terms of that subsection requiring him to pay the amount stated therein, subject to the maximum amount provided for in that subsection.”

Section 279 of the Urban Councils Act states:

“Liability to pay rates

1. The person who is the owner of any property on the date on which any rate fixed and levied by the council becomes due and payable shall be primarily liable for that rate.

2. If, on the date on which a rate becomes due and payable, the owner primarily liable has failed to pay that rate, a demand in writing may be served on him requiring him to pay the amount stated therein within fourteen days of the service of the demand.

3. If the owner primarily liable for a rate fails to comply with the demand referred to in subsection (2) then any person who, at any time during the period in respect of which such rate was fixed and levied –

(a) Is the occupier of the property concerned, shall, if a demand in writing is served on him by the council, be liable for such rate together with any other unpaid rates in respect of such property, not exceeding the amount of any rent in respect of such property due by him but not yet paid at the time of the demand and shall thereafter continue to pay such rents to the council until the amount of the unpaid rates has been paid off;

(b) As agent or otherwise, receives any rent in respect of such property, shall, if a demand in writing is served on him by the council, be liable for such rate, together with any other unpaid rates in respect of that property, not exceeding the amount of any such rent paid to him subsequent to that demand, subject to the deduction by the agent of commission due to him for the collection of that rent.

(c) The persons referred to in paragraphs (a) and (b) of subsection (3) shall be liable for the rates to the amount specified therein jointly and severally with each and with the owner primarily liable.

4….,.”

The crisp point made by the respondent is that, in terms of these provisions, it was incumbent upon the applicant to serve the respondent with a demand, in writing, requiring it to settle its dues within (14) fourteen days from the date of such demand.

It was further contended that these provisions are peremptory in that the applicant cannot institute legal proceedings before serving the owner with the demand giving him fourteen (14) days to comply.

In casu, since such a demand has not been issued by the applicant, it has failed to comply with the law and the proceedings are a nullity, so the argument goes.

The respondent relied on:

(a) MAXWELL: Interpretation of Statutes (7th ed)…,.

(b) Nkisimane & Others v Santam Insurance Co. Ltd 1978 (2) SA 430 (A)…,.

The respondent's first proposed line of defence is that the applicant's messenger, one Kevin Adams, lied under oath that a letter required to be served upon the respondent in terms of section 279 and 281 of the Urban Councils Act was served on the respondent when in fact no such letter was served.

It was further submitted that the respondent has since filed a police report against the messenger for perjury.

The respondent believed that the letter was prepared merely as an afterthought after the summons had already been issued and after the applicant had realized that the failure to comply with the Urban Councils Act was fatal to its case.

This fact, according to the respondent, is supported by the fact that the letter is not signed...,.

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

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

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

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.

SC37-09 : EDDIES PFUGARI (PVT) LTD vs KNOWE RESIDENTS ASSOCIATION and NORTON TOWN COUNCIL
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

This is an appeal against the judgment of the High Court directing the appellant to fully service residential stands in Phase 1 of the Knowe Housing Development in Norton.

The facts of this case are these:

The appellant, a private company, is a property developer whilst the respondent is an association of residents of the Knowe Housing Development, who, in 1998, entered into agreements of sale with the appellant in their individual capacities for the purchase of residential Stands.

The association was formed by the residents in order to compel the appellant to carry out its obligations in terms of the various contracts it had entered into with the various individuals who form the association.

The High Court found that the appellant had breached the terms of agreement between itself and the residents in regard to Phase 1 of the development. Consequently, the court granted an order directing the appellant to fully service Phase 1 of the housing development within 90 days, and, in particular, to connect to all Stands reticulated water, sanitary systems, tarred roads, and a proper drainage system.

Dissatisfied with that order, the appellant appealed to this Court on the grounds that:

(a) The court a quo had erred in finding that the respondent had locus standi in judicio to institute the proceedings; and

(b) The court a quo had erred in rejecting the appellant's contention that it had complied with its obligations in terms of the relevant Development Permit.

At the hearing of the matter before this Court, counsel for the appellant abandoned the other grounds of appeal and attacked the judgment of the court a quo on the sole basis that there were material disputes of facts which were incapable of resolution on the papers, and, for that reason, the matter should either have been referred to trial or dismissed.

The sole issue for determination before this Court, therefore, is whether the court a quo erred in resolving the disputes raised on the papers without hearing evidence.

In terms of condition 27 of the Development Permit issued to the appellant by the second respondent, the appellant was obliged, at his own expense, to: “provide all infrastructural services viz roads, electricity, water mains, and sewerage disposal, to the specification approved by and to the satisfaction of Norton Town Council and all such services shall be handed over to Council at a date to be agreed upon by the two parties involved.”

In its founding papers before the High Court, the first respondent alleged that the appellant had breached the contract in various respects.

The first respondent alleged that although the appellant had tarred the roads in Phase 1, it had done so in a substandard manner; that no proper drainage system had been constructed; and tapped water was not available at all the Stands. The first respondent further alleged that no street lighting had been put in place and social amenities, such as schools and clinics, were still to be constructed.

In its opposing affidavit, the appellant asserted, that, it had done its best to carry out its obligations under the difficult economic conditions prevailing in Zimbabwe, and that it was on course to completing its obligations.

It further stated, that, although there were no tarred roads in Phases 1 and 2, it had acquired state of the art equipment in order to carry out this task.

The appellant further stated, that, the roads had not been tarred because of the scarcity of diesel and unavailability of tar in Zimbabwe.

However, the appellant also stated, that, the road network in Phase 1 had been done satisfactorily by a Chinese sub-contractor.

The appellant further remarked, that, no drainage system had been put in place because the tarring of the roads had to be completed first. Culverts too were to be constructed after the roads had been tarred. The drainage was not as bad as suggested by the first respondent.

The appellant also stated, that, water mains had been installed and what remained was for the individual Stand holders to apply for connections.

As regards street lighting, the appellant submitted, that, this could only be attended to once the roads had been tarred.

Lastly, the appellant remarked, that, it had not deliberately avoided fully servicing the area but had been constrained by factors beyond its control, and, that, if given three months, it would ensure that the roads are completed.

In its opposing papers, the second respondent highlighted the fact that the appellant had not successfully completed Phase 1, and, therefore, should not have embarked on Phases 2 and 3 of the development project.

In determining that the appellant was in breach of its contractual obligations, the court a quo remarked, at page 6 of the cyclostyled judgment:

“It was quite apparent, from the papers before me, that the first respondent was indeed in breach of the terms of his contract in regard to Phase One of the development.

The applicant, through its members, has complied with their part of the contract and paid for the Stands in full. In my view, they may properly seek an order for specific performance.

In its opposition, the first respondent argued that the court should not exercise its discretion in favour of the applicant as the obligation was too onerous for it to perform. The excuses made by the first respondent, relating to unavailability of diesel and tar, were, in my view, merely an excuse as the applicant could carry out its obligations if it was diligent in its efforts. Whilst the court takes judicial notice of the socio-economic hardships complained of, it also notes that other successful developments have continued in spite of these challenges.

The second issue raised by the first respondent was that there was no timeframe for performance in the permit and they were therefore still in the process of completing the task.

This, in my view, was no defence to the order sought by the applicants.

Whilst it is noted that the permit does not indeed give a time frame within which the infrastructural development must be carried out, it is an implied term of the contract that performance must be conducted within a reasonable time.

In reading an implied term into a contract, the court must of course be bound by the principles set out in case law: see Mullin (Pvt) Ltd v Benade Ltd 1952 (1) SA 211.

The applicants in this case entered into the contracts with the first respondent in 1998. This application was filed on 22 June 2005. Clearly, the time lapse between the time of entering into the contract and time for performance exceeds, by any stretch of the imagination, the definition of a reasonable time.

In my view, a period in excess of six years is no longer a reasonable time - even in these challenging times.”

On the facts of this case, I am in no doubt that the court a quo was correct in determining the dispute on the papers.

The appellant had obligations which it had failed to discharge - even at the time of the hearing of the matter before the High Court in November 2006. The second respondent had still not issued the appellant with a Certificate of Compliance.

The appellant does not dispute, in its papers, that it had not discharged all its obligations in terms of the permit. Instead, the appellant states that it did the best in the prevailing socio economic situation and that it was on course to discharging its obligations under the contract.

The second respondent, in its papers, states that the servicing of Phase 1 had not been completed.

The remark by the appellant, that the drainage is not as bad as portrayed, is an admission that the work was not complete. Indeed, the appellant admitted that work was still to be done in tarring the roads, constructing a drainage system, and providing amenities.

The dispute, on the facts, could be resolved without hearing evidence. The position is now well established that:

“In motion proceedings, a court should endeavour to resolve the dispute raised in affidavits without the hearing of evidence. It must take a robust and common sense approach and not an over fastidious one; always provided that it is convinced that there is no real possibility of any resolution doing an injustice to the other party concerned.”

See Zimbabwe Bonded Fibreglass (Pvt) Ltd v Peech 1987 (2) ZLR 338 (SC)…,.

I agree with the submission by the respondent that the dispute was not so much on the substance but rather on the extent of non-compliance. I find no basis upon which the approach taken by the court a quo can be impugned.

The appeal is without merit. It is accordingly dismissed with costs.

HH35-15 : TENDAI PANGETI vs CHRISTINA NYAGUMBO
Ruled By: CHITAKUNYE J

Where a property is registered in the names of two parties, the presumption is that such property is jointly-owned with each party owning a 50% share in the property.It is for the party alleging that the property is not so owned to rebut that presumption.In Lafontant v Kennedy 2000 (2) ...

HH128-06 : DOBROCK HOLDINGS (PVT) LTD and TURNER AND SONS (PVT) LTD vs TURNER AND SONS (PVT) LTD and ANTHONY TURNER and MARTIN KING and ZAMBEZI PADDLE STEAMER (PVT) LTD and DOBROCK (PVT) LTD
Ruled By: KUDYA J

In Adleu v Elliot 1988 (2) ZLR 283 (S) GUBBAY JA…, recognised, that, in oral contracts, the court had the power to determine whether the terms of that contract required exact performance or the performance of some equivalent act. He stated thus:

“The application of this broad principle [that it is not for the court to remake a contract of the parties in line with INNES CJ in Ambrose and Aitken v Johnson and Fletcher 1917 AD 327 at 343 and the remarks of BEADLE CJ in Holmes v Palley 1975 (2) RLR 98 (AD) at 105C that one party to a contract was not entitled to expect that it will be carried out in a different manner than agreed because of the absence of prejudice] does not, of course, preclude a court from determining whether the parties to an agreement intended that a particular term thereof was to be fulfilled in forma specifica, that is, in the exact manner agreed upon by the parties or per acquipollens, that is, by some equivalent act.

Where the agreement is in writing, and the language employed is sufficiently clear, the common intention of the parties must be extracted from the agreement itself. But, if the language is ambiguous or where the agreement of the parties was oral, then, the court is obliged to have regard to the surrounding circumstances, and to any other admissible evidence in order to ascertain whether the common intention of the parties was to be fulfilled in forma specifica or whether performance thereof by some equivalent act would suffice.”

In Adleu v Elliot 1988 (2) ZLR 283 (S) the parties entered into an agreement of sale in which part of the purchase price was payable abroad in foreign currency and the remainder at home in local currency. GUBBAY JA approved the four factors outlined by CLAASEN J in Diggelen v de Bruin and Another 1954 (1) SA 188 SWA…, that:

“1. If the surrounding circumstances, and other admissible evidence, afford no clue as to what was in the contemplation of the parties, then, there is a rebuttable presumption in favour of performance in forma specifica. But, the presumption cannot be rebutted where it is clear from the terms of the contract that performance in forma specifica had been stipulated.

2. In case of doubt, the court will be more likely to find in favour of performance per acquipollens if the manner of performing the term is not material and also where performance in forma specifica is impossible through no serious fault on the promissor's part.

3. The act or performance tendered per acquipollens, where such is permissible, must be an equivalent act to that stipulated for or be of such a nature that it can make no material difference to the promise.

4. Where the promissor succeeds in rebutting the presumption mentioned above, there may be circumstances falling short of impossibility and even where there may be some fault on the part of the promissor; a court may be justified in concluding that the promissor's perfomance, or tendered performance, amounted to substantial performance.”

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Law Portal
Zimbabwe

Intent or Animus Contrahendi re: Deemed, Implied, Tacit, Unsigned Agreements or Informal Contracts

HH10-10 : RANI INTERNATIONAL LIMITED vs BUBYE MINERALS (PVT) LTD AND ANOTHER
Ruled By: UCHENA J

HH00-08 : AGRICULTURE BANK OF ZIMBABWE LTD T/A AGRIBANK vs DATANET TECHNOLOGY ZIMBABWE
Ruled By: MTSHIYA J

HH117-09 : MICHAEL KATEKETA vs ONE WORLD GALLERIES (PVT) LTD and A MPOPOMA
Ruled By: MAKARAU JP

HH119-09 : ISAAC MANDI vs GRACE MCHICHWA (as Executrix Dative Estate Late Peter Kandeya) and RUWA LOCAL BOARD and MINISTRY OF LOCAL GOVERNMENT
Ruled By: GOWORA J

HH124-09 : MAXWELL TAWODZERA AND MARGARET TAWODZERA vs DANNY MASUKUMA
Ruled By: MAKARAU JP

HB106-09 : CHURCHVILLE TRADING vs BEVERLY BUILDING SOCIETY
Ruled By: KAMOCHA J

HH231-10 : AGRICULTURAL BANK OF ZIMBABWE LTD t/a AGRIBANK vs NICKSTATE INVESTMENTS (PVT) LTD and RICHARD MAKWARA and PLAXEDES MAKWARA
Ruled By: GOWORA J

HH277-10 : BENCHILL INVESTMENTS (PVT) LTD vs BATTERY WORLD (PVT) LTD
Ruled By: KUDYA J

HHB93-10 : REGINA MLISA vs THE STATE
Ruled By: CHEDA J and NDOU J

SC54-17 : NDABEZINHLE MAZIBUKO vs THE BOARD OF GOVERNORS, CHRISTIAN BROTHERS COLLEGE and THE NATIONAL INCOMES AND PRICING COMMISSION and THE SECRETARY, MINISTRY OF EDUCATION
Ruled By: GARWE JA, GOWORA JA and HLATSHWAYO JA

HH797-15 : PETER KAZINGIZI and THERESA MUCHABAIWA KAZINGIZI vs EQUITY PROPERTIES (PVT) LTD
Ruled By: MATHONSI J

HH228-17 : WILLIAM MUKUDU vs ESTERE STELLA MUKUDU and THE MASTER OF THE HIGH COURT and THE REGISTRAR OF DEEDS
Ruled By: TSANGA J

HB14-05 : SMART MALABA vs NOMATHEMBA FENNY MALABA
Ruled By: NDOU J

HH485-13 : LOVENESS KUDZANGA vs GODFREY KUDZANGA and THE REGISTRAR OF DEEDS and DEPUTY SHERIFF HARARE
Ruled By: MAWADZE J

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

View Appeal
HH315-15 : AUCTION CITY (PVT) LTD vs EL ELION INVESTMENTS (PVT) LTD
Ruled By: CHITAKUNYE J and TSANGA J

HH09-09 : SKF ZIMBABWE P/L vs PARIS OLYMPIOUS
Ruled By: MAKARAU JP

SC03-21 : AFRITRADE INTERNATIONAL LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: PATEL JA, BHUNU JA and BERE JA

View Appeal
HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MTSHIYA J

Appealed
SC36-12 : RESERVE BANK OF ZIMBABWE vs CAFCA LTD
Ruled By: MALABA DCJ, ZIYAMBI JA and OMERJEE AJA

SC12-21 : TOBACCO PROCESSORS ZIMBABWE (PRIVATE) LIMITED vs TONGOONA MUTASA and OTHERS
Ruled By: MAVANGIRA JA, MAKONI JA and CHATUKUTA AJA

SC13-21 : MOSES MAWIRE vs RIO ZIM LIMITED (PRIVATE) LIMITED
Ruled By: GOWORA JA, PATEL JA and MAVANGIRA JA

HB04-15 : BULAWAYO CITY COUNCIL vs TRISHUL PROPERTIES
Ruled By: TAKUVA J

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

SC37-09 : EDDIES PFUGARI (PVT) LTD vs KNOWE RESIDENTS ASSOCIATION and NORTON TOWN COUNCIL
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

HH35-15 : TENDAI PANGETI vs CHRISTINA NYAGUMBO
Ruled By: CHITAKUNYE J

HH128-06 : DOBROCK HOLDINGS (PVT) LTD and TURNER AND SONS (PVT) LTD vs TURNER AND SONS (PVT) LTD and ANTHONY TURNER and MARTIN KING and ZAMBEZI PADDLE STEAMER (PVT) LTD and DOBROCK (PVT) LTD
Ruled By: KUDYA J

Categories

Law Portal Zimbabwe

Intent or Animus Contrahendi re: Deemed, Implied, Tacit, Unsigned Agreements or Informal Contracts

HH10-10 : RANI INTERNATIONAL LIMITED vs BUBYE MINERALS (PVT) LTD AND ANOTHER Ruled By: UCHENA J

HH00-08 : AGRICULTURE BANK OF ZIMBABWE LTD T/A AGRIBANK vs DATANET TECHNOLOGY ZIMBABWE Ruled By: MTSHIYA J

HH117-09 : MICHAEL KATEKETA vs ONE WORLD GALLERIES (PVT) LTD and A MPOPOMA Ruled By: MAKARAU JP

HH119-09 : ISAAC MANDI vs GRACE MCHICHWA (as Executrix Dative Estate Late Peter Kandeya) and RUWA LOCAL BOARD and MINISTRY OF LOCAL GOVERNMENT Ruled By: GOWORA J

HH124-09 : MAXWELL TAWODZERA AND MARGARET TAWODZERA vs DANNY MASUKUMA Ruled By: MAKARAU JP

HB106-09 : CHURCHVILLE TRADING vs BEVERLY BUILDING SOCIETY Ruled By: KAMOCHA J

HH231-10 : AGRICULTURAL BANK OF ZIMBABWE LTD t/a AGRIBANK vs NICKSTATE INVESTMENTS (PVT) LTD and RICHARD MAKWARA and PLAXEDES MAKWARA Ruled By: GOWORA J

HH277-10 : BENCHILL INVESTMENTS (PVT) LTD vs BATTERY WORLD (PVT) LTD Ruled By: KUDYA J

HHB93-10 : REGINA MLISA vs THE STATE Ruled By: CHEDA J and NDOU J

SC54-17 : NDABEZINHLE MAZIBUKO vs THE BOARD OF GOVERNORS, CHRISTIAN BROTHERS COLLEGE and THE NATIONAL INCOMES AND PRICING COMMISSION and THE SECRETARY, MINISTRY OF EDUCATION Ruled By: GARWE JA, GOWORA JA and HLATSHWAYO JA

HH797-15 : PETER KAZINGIZI and THERESA MUCHABAIWA KAZINGIZI vs EQUITY PROPERTIES (PVT) LTD Ruled By: MATHONSI J

HH228-17 : WILLIAM MUKUDU vs ESTERE STELLA MUKUDU and THE MASTER OF THE HIGH COURT and THE REGISTRAR OF DEEDS Ruled By: TSANGA J

HB14-05 : SMART MALABA vs NOMATHEMBA FENNY MALABA Ruled By: NDOU J

HH485-13 : LOVENESS KUDZANGA vs GODFREY KUDZANGA and THE REGISTRAR OF DEEDS and DEPUTY SHERIFF HARARE Ruled By: MAWADZE J

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

View Appeal HH315-15 : AUCTION CITY (PVT) LTD vs EL ELION INVESTMENTS (PVT) LTD Ruled By: CHITAKUNYE J and TSANGA J

HH09-09 : SKF ZIMBABWE P/L vs PARIS OLYMPIOUS Ruled By: MAKARAU JP

SC03-21 : AFRITRADE INTERNATIONAL LIMITED vs ZIMBABWE REVENUE AUTHORITY Ruled By: PATEL JA, BHUNU JA and BERE JA

View Appeal HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE Ruled By: MTSHIYA J

Appealed SC36-12 : RESERVE BANK OF ZIMBABWE vs CAFCA LTD Ruled By: MALABA DCJ, ZIYAMBI JA and OMERJEE AJA

SC12-21 : TOBACCO PROCESSORS ZIMBABWE (PRIVATE) LIMITED vs TONGOONA MUTASA and OTHERS Ruled By: MAVANGIRA JA, MAKONI JA and CHATUKUTA AJA

SC13-21 : MOSES MAWIRE vs RIO ZIM LIMITED (PRIVATE) LIMITED Ruled By: GOWORA JA, PATEL JA and MAVANGIRA JA

HB04-15 : BULAWAYO CITY COUNCIL vs TRISHUL PROPERTIES Ruled By: TAKUVA J

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

SC37-09 : EDDIES PFUGARI (PVT) LTD vs KNOWE RESIDENTS ASSOCIATION and NORTON TOWN COUNCIL Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

HH35-15 : TENDAI PANGETI vs CHRISTINA NYAGUMBO Ruled By: CHITAKUNYE J

HH128-06 : DOBROCK HOLDINGS (PVT) LTD and TURNER AND SONS (PVT) LTD vs TURNER AND SONS (PVT) LTD and ANTHONY TURNER and MARTIN KING and ZAMBEZI PADDLE STEAMER (PVT) LTD and DOBROCK (PVT) LTD Ruled By: KUDYA J

Categories

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Law Portal
Zimbabwe

HH10-10 : RANI INTERNATIONAL LIMITED vs BUBYE MINERALS (PVT) LTD AND ANOTHER
Ruled By: UCHENA J

HH00-08 : AGRICULTURE BANK OF ZIMBABWE LTD T/A AGRIBANK vs DATANET TECHNOLOGY ZIMBABWE
Ruled By: MTSHIYA J

HH117-09 : MICHAEL KATEKETA vs ONE WORLD GALLERIES (PVT) LTD and A MPOPOMA
Ruled By: MAKARAU JP

HH119-09 : ISAAC MANDI vs GRACE MCHICHWA (as Executrix Dative Estate Late Peter Kandeya) and RUWA LOCAL BOARD and MINISTRY OF LOCAL GOVERNMENT
Ruled By: GOWORA J

HH124-09 : MAXWELL TAWODZERA AND MARGARET TAWODZERA vs DANNY MASUKUMA
Ruled By: MAKARAU JP

HB106-09 : CHURCHVILLE TRADING vs BEVERLY BUILDING SOCIETY
Ruled By: KAMOCHA J

HH231-10 : AGRICULTURAL BANK OF ZIMBABWE LTD t/a AGRIBANK vs NICKSTATE INVESTMENTS (PVT) LTD and RICHARD MAKWARA and PLAXEDES MAKWARA
Ruled By: GOWORA J

HH277-10 : BENCHILL INVESTMENTS (PVT) LTD vs BATTERY WORLD (PVT) LTD
Ruled By: KUDYA J

HHB93-10 : REGINA MLISA vs THE STATE
Ruled By: CHEDA J and NDOU J

SC54-17 : NDABEZINHLE MAZIBUKO vs THE BOARD OF GOVERNORS, CHRISTIAN BROTHERS COLLEGE and THE NATIONAL INCOMES AND PRICING COMMISSION and THE SECRETARY, MINISTRY OF EDUCATION
Ruled By: GARWE JA, GOWORA JA and HLATSHWAYO JA

HH797-15 : PETER KAZINGIZI and THERESA MUCHABAIWA KAZINGIZI vs EQUITY PROPERTIES (PVT) LTD
Ruled By: MATHONSI J

HH228-17 : WILLIAM MUKUDU vs ESTERE STELLA MUKUDU and THE MASTER OF THE HIGH COURT and THE REGISTRAR OF DEEDS
Ruled By: TSANGA J

HB14-05 : SMART MALABA vs NOMATHEMBA FENNY MALABA
Ruled By: NDOU J

HH485-13 : LOVENESS KUDZANGA vs GODFREY KUDZANGA and THE REGISTRAR OF DEEDS and DEPUTY SHERIFF HARARE
Ruled By: MAWADZE J

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

View Appeal
HH315-15 : AUCTION CITY (PVT) LTD vs EL ELION INVESTMENTS (PVT) LTD
Ruled By: CHITAKUNYE J and TSANGA J

HH09-09 : SKF ZIMBABWE P/L vs PARIS OLYMPIOUS
Ruled By: MAKARAU JP

SC03-21 : AFRITRADE INTERNATIONAL LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: PATEL JA, BHUNU JA and BERE JA

View Appeal
HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MTSHIYA J

Appealed
SC36-12 : RESERVE BANK OF ZIMBABWE vs CAFCA LTD
Ruled By: MALABA DCJ, ZIYAMBI JA and OMERJEE AJA

SC12-21 : TOBACCO PROCESSORS ZIMBABWE (PRIVATE) LIMITED vs TONGOONA MUTASA and OTHERS
Ruled By: MAVANGIRA JA, MAKONI JA and CHATUKUTA AJA

SC13-21 : MOSES MAWIRE vs RIO ZIM LIMITED (PRIVATE) LIMITED
Ruled By: GOWORA JA, PATEL JA and MAVANGIRA JA

HB04-15 : BULAWAYO CITY COUNCIL vs TRISHUL PROPERTIES
Ruled By: TAKUVA J

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

SC37-09 : EDDIES PFUGARI (PVT) LTD vs KNOWE RESIDENTS ASSOCIATION and NORTON TOWN COUNCIL
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

HH35-15 : TENDAI PANGETI vs CHRISTINA NYAGUMBO
Ruled By: CHITAKUNYE J

HH128-06 : DOBROCK HOLDINGS (PVT) LTD and TURNER AND SONS (PVT) LTD vs TURNER AND SONS (PVT) LTD and ANTHONY TURNER and MARTIN KING and ZAMBEZI PADDLE STEAMER (PVT) LTD and DOBROCK (PVT) LTD
Ruled By: KUDYA J