The plaintiff issued summons against the defendant on 19 May 2007 seeking an order for the payment of damages in the sum of $20 billion.

In her declaration, she averred that she had purchased, from the defendant, certain immovable property situate in the district of Kariba for the sum of $180 billion which she paid in full. At the time of the agreement of sale, the defendant had already sold the same property to a company going by the name of Woolwork Investments (Pvt) Ltd. On account of this prior sale, the plaintiff further averred that the sale to her was a fraud as the defendant knew he had disposed of his rights in the property and had none to sell to the plaintiff. Thus, she claimed damages from the defendant.

The claim was defended.

The matter proceeded to a pre-trial conference where, due to the plea that had been taken by the defendant, the issues for trial were settled as follows:

1. Whether the plaintiff and the defendant entered into an agreement of sale in respect of House No.52 Beira, Mahombekombe, Kariba;

2. Whether the defendant breached the agreement of sale by failing to transfer the property to the plaintiff;

3. Whether, as a result of the breach, the plaintiff is entitled to consequential damages, and, if so, the quantum thereof;

4. Whether the plaintiff is entitled to costs on a legal practitioner and client scale.

At the trial of the matter, the parties advised that the defendant was no longer defending the claim and that the sole issue that fell for determination in this matter is the quantum of damages due to the plaintiff.

The parties further narrowed down the issue between them to one of establishing the current market value of the property. The defendant agreed that such would represent the quantum of damages due to the plaintiff.

It is pertinent at this stage to note that prior to the matter being set down for hearing, the plaintiff had applied to amend her declaration to increase the amount of damages sought to US$35,000=. No objection having been raised against the amendment, I duly granted it with the consent of the defendant.

The plaintiff called the evidence of one Emmanuel Mutambirwa. He is employed by the City of Harare as a Chief Valuations Officer. He holds a Diploma in Quantity Surveying, a Bachelor of Banking and Commerce degree and an MBA, amongst his qualifications, all of which are set out in the report that he compiled on the value of the property in dispute. In or about October 2008, he visited the property in question and formed the opinion as to the value of the property. He revisited his opinion on 12 February, and, taking into account the trends in the property market, revalued the property at US$35,000=.

The witness, who, in my view is well qualified to give values of properties, gave his evidence well. He was understandably excited in having to be the first to testify in the matter and at times would be unnecessarily argumentative in his responses to questions put to him in cross-examination. All in all, I have little difficulty in accepting that he gave me his honest opinion on the value of the property in dispute.

The defendant also testified as to the value of the property.

He averred that he purchased the property from his employer, on a date that he cannot recall, for the sum of $150,000=. In his opinion, if he were to sell the property on the date of the trial, he would not ask for more than US$5,000=.

Clearly, the defendant is not an expert in the field and his opinion, as to the value of the property, is of marginal probative value.

The issue that has exercised my mind in this matter is not so much the current market value of the property in dispute, but, rather, whether, in the circumstances of this matter, I can award damages sounding in foreign currency.

In his address, counsel for the plaintiff was of the view that I can, following the decision in Makwindi Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe 1988 (2) ZLR 482 (SC). On his part, counsel for the defendant confined himself to arguing that the plaintiff had not sufficiently proved her claim.

Makwindi Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe 1988 (2) ZLR 482 (SC) was a ground breaking decision seeking to reconcile two conflicting judgments of this court.

In 1985, MFALILA J, in National Food Distributors v Weltman 1985 (2) ZLR 310 (HC), had held that in the face of exchange control restrictions, Zimbabwe courts could not freely give judgments in foreign currency even where the proper law of contract is foreign law. Anyone seeking redress in Zimbabwean courts would have to state their claim and have their judgment in Zimbabwean currency. In 1988, ADAM J took a different position in the Makwindi Oil Procurement Company matter, a decision that was then taken on appeal.

After reviewing the trend in English and South African cases on the issue, GUBBAY CJ was of the view that in the absence of any legislative enactments which require our courts to order payment in local currency only, the innovative approaches taken in England and in South Africa, in making orders in foreign currency had to be adopted. This would bring Zimbabwe into line with many foreign legal systems.

Specifically regarding the award of damages in foreign currency, the learned judge appears to have fully endorsed the approach taken by the House of Lords in two appeals held concurrently were unanimous that that the approach taken earlier would also apply to claims for damages.

In allowing the appeal that was before them, GUBBAY CJ held, on the facts of the matter before the court, that the plaintiff, a company that conducted business in this country and was subject to exchange control regulations, and had to purchase its foreign currency using local currency, had failed to persuade him that its loss was in United States Dollars. He was of the view that the loss of foreign currency was felt or borne by the national foreign currency reserve and not by the plaintiff itself.

From his judgment, it appears to me that GUBBAY CJ was approving the approach by LORD WILBERFORCE in Owners of the MV Eleftherotria v Owners of the MV Despina R [1971]1 All ER 421 (HL)…, where he stated:

“It appears to me that the plaintiff, who normally conducts his business through a particular currency, and who, when other currencies are immediately involved, uses his own currency to obtain those currencies, can reasonably say that the loss he sustains is to be measured not by the immediate currencies in which the loss first emerges but by the amount of his own currency, which, in the normal course of operation, he uses to obtain those currencies. This is the currency in which his loss is felt, and is the currency which it is reasonably foreseeable he will have to spend.”

In the same year that the Supreme Court handed down its judgment in Makwindi Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe 1988 (2) ZLR 482 (SC), a similar approach was taken in South Africa in Elgin Brown and Hammer v Dampskibsselskabet Torm Ltd 1988 (4) SA 671 (NPD).

After citing the passage I have cited above from Owners of the mv Eleftherotria v Owners of the mv Despina R [1971]1 All ER 421 (HL), the learned judge in that matter proceeded to hold that the court has a discretion which currency to award the judgment in, and, with refreshing clarity, had this to say about claims for damages…,:

“Where a loss is in fact suffered in a foreign currency, there is, as I see it, no reason not to assess and quantify the damages in that currency; indeed, not to do so might be to deny a plaintiff the amount of his actual loss.”

In the matter before him, the learned judge observed that the main heads under which the loss suffered by the plaintiff were either in the sense of money actually expended or money not received. These amounts were all in foreign currency, and, in the opinion of the learned judge, the plaintiff's loss was felt in foreign currency. That being so, the only way the plaintiff could be compensated properly for its loss was to grant judgment in foreign currency.

A review of the authorities on the matter appears to me to indicate that where there is no statutory bar, the courts can award judgments sounding in foreign currency. For damages claims, the plaintiff must prove that his or her loss was suffered in foreign currency, or, put in the language of LEON J in Elgin Brown and Hammer v Dampskibsselskabet Torm Ltd 1988 (4) SA 671 (NPD), the plaintiff must prove that he or she felt the loss in a foreign currency.

In casu, the plaintiff has approached the court for damages arising out of the failure of the defendant to transfer to her certain immovable property. I am persuaded that the property may command a purchase price of the amount of the claim by the plaintiff. However, it has not been argued before me that the property does not have a value in local currency. I would want to believe that it still has, but, as implicit in counsel for the applicant's submissions, the United States Dollar and other foreign currencies from the region have become the de facto currencies of Zimbabwe. The local currency has been rendered valueless by inflation.

In my view, the facts of this matter and the challenges posed by the hyperinflationary environment that Zimbabweans find themselves operating under present a res nova that was not envisaged by the decisions that I have referred to above. The issue that arises is whether a claim for delictual damages may be redressed in foreign currency where it has been felt in both the local and the foreign currency but the local currency has been ravaged by inflation and is de facto valueless.

The authorities seem to suggest that where the loss has been suffered in a particular currency, there is no good reason why the court should not award damages in that currency. They do not seem, to me, to proceed further to hold that where a loss has been suffered, the plaintiff may choose that currency in which he or she would like the loss to be redressed.

In my view, the facts of this matter present a situation where a loss has indeed been suffered. The loss so suffered has been calculated in one foreign currency as opposed to the local currency for the reasons given by counsel for the applicant.

It appears to me that the issue I have to determine is whether to extend the approach that has been taken in Makwindi Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe 1988 (2) ZLR 482 (SC) and be innovative enough to suggest that where a loss has been suffered and can be calculated in both the local and in a foreign currency, the court has a discretion to award judgment in that currency that will redress the injury suffered and adequately compensate the plaintiff for the loss. It would then follow that where that currency is the foreign currency as opposed to the local currency, then judgment should be in the foreign currency - for, to award damages in the local currency, where the local currency has been rendered valueless by inflation might be to deny a plaintiff the redress that he or she seeks.

I must confess that I find this approach attractive.

It is not in violation of any statutory provision governing exchange control. It does not render the local currency any less legal tender than do other judgments expressed in foreign currency. It is simply an act of applying the approach to a situation that has arisen due to the ravages of inflation and one that could not have been anticipated when Makwindi Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe 1988 (2) ZLR 482 (SC) was decided. Like the Law Lords in 1975, I am merely opting for a more realistic approach to the current economic conditions prevailing in the country, and, as GUBBAY CJ observed in Makwindi Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe 1988 (2) ZLR 482 (SC)…,:

“That the majority of the Law Lords succeeded in surmounting (such) an obstacle and opted for a more realistic approach to modern economic conditions, is strongly illustrative of the concept, never to be overlooked, that the law is a living system that adapts to the necessities of present times and is to be given new direction, where, on principle and in reason it appears right to do so.”

In the result, I make the following order:

Judgment with costs is hereby entered for the plaintiff in the sum of US$35,000=.

In Pamire & Ors v Dumbutshena NO & Anor 2001 (1) ZLR 123 (H) it was noted that an award of damages for breach of contract is intended to put the parties in the position they would have been had the contract been properly performed. Accordingly, MAKARAU J held that to grant full damages to a party in spite of its own failure to meet all its obligations under the contract would violate elementary notions of justice and would thus be contrary to public policy.

The Cross-Appeal

The respondent sued the appellant in the court a quo for damages in the sum of US$196,250= arising out of breach of the lease agreement. It was the respondent's contention that the appellant failed to keep the roof of the leased premises in a state of repair resulting in leaks developing forcing the respondent to close down its operations. As a result of the cessation of its operations, the respondent alleges that it suffered loss of estimated profits in the sum claimed. During the trial, the respondent abandoned part of the claim in the sum of $26,250= leaving the total amount claimed in the sum of $170,000=.

The trial court found that the appellant was indeed in breach of the lease agreement in that it failed to keep the roof in a state of repair.

Its finding in this regard cannot be impugned.

Whilst not making a definitive pronouncement on the matter, the trial court appears to have made the further finding that the failure by the appellant to keep the roof in a state of repair led directly to the loss of profits suffered by the respondent upon it ceasing to manufacture the licensed drugs, or, alternatively, that such a loss was in the contemplation of the parties when they concluded the lease agreement. The trial court, however, found that the amount claimed by the respondent, and proved by the respondent through evidence, did not represent the lost profit but the total expenditure that the respondent would have incurred had it not ceased operations.

Again, I cannot find a basis for faulting this finding.

It is trite that damages for breach of contract are calculated to place the plaintiff in the position that he/she would have been in had there be no breach. Put differently, where a party sustains loss by breach of a contract, he/she is, as far as money can do it, to be placed in the same position as if the contract had been performed. The law in this regard has not changed since the decision in Victoria Falls & Transvaal Power Company Limited v Consolidated Langlaagte Mines Limited 1915 AD 1 which has been followed ever since in this jurisdiction.

Applying this trite principle to the facts of the appeal, the respondent was entitled to be placed in the position it would have been in had there be no leaks in the roof of the leased premises. In other words, the respondent was entitled to damages for loss of the income, or profit, it would have raised had its operations continued.

This is essentially a claim for lost profit and not a claim for loss of earning capacity.

It further appears to me to be settled law that loss of profit following breach of contract is an assessable loss to be proved by evidence and should not be confused with loss of future earning capacity which calls for compensation for diminished earning capacity and is assessed as general damages. (See Santam Insurance Company Limited v Paget 1981 ZLR 73). Put differently, damages for lost profit following breach are to be proved and cannot be presumed. They must be capable of some arithmetical calculation and cannot be assessed by the court from nothing.

The record shows that the respondent, in attempting to prove the lost profit, led evidence of the manufacture of every single batch of product that the respondent manufactured from the year 2000 to the date of trial, including confectionaries that could still have been manufactured in the “unsterile” premises. The evidence also included trial batches that could not have had any economic value as they were not meant for sale. The nature of the evidence led on behalf of the respondent for lost profit is aptly described by the trial court in its judgment in the following terms:

“Page 66 of exhibit 1 represents an extrapolation from the pharmaceutical batch book of seven products manufactured by the defendant at the leased premises and at the new premises from 2000 to 2010…,. Dr Deacon calculated the total batches for each product produced over the ten year period from 2000 to 2009 and divided it by ten to calculate a yearly average. He estimated the cost of production of each batch in United States Dollars by interpolating the existing cost structure at its new premises of each product range and multiplied the estimated cost by the yearly average to calculate gross value of the lost production…,. He then deducted the salvage value of work in progress to arrive at the loss suffered by the defendant. He calculated the loss from the seven products at US$197,925=. He deducted the profit mark-up of 15% and arrived at an estimate of US$168,236=25 which he rounded off to US$170,000=. While Dr Deacon equated this amount to the defendant's turnover, it seems to me that it would actually represent the defendant's total expenditure.”

From the above, it is clear that the respondent tendered evidence to prove the possible cost of lost production. What was required of it was to prove the lost profit over the years. With respect, it appears to me that the respondent's evidence was not led with an eye to the relevant law which requires actual proof of damages for lost profit. Evidence placed before the court tended to show a general loss and not the actual lost profit. I agree with the trial court that the respondent could have led evidence of the profit that it was making each month prior to the cessation of manufacturing due to the leaking roof and from such evidence, the court may have been better placed to assess damages which, in its opinion, would meet the justice of the case.

In the result, the cross–appeal by the respondent must fail. The respondent failed to discharge the onus on it to place before the court sufficient facts from which its loss could be calculated and the trial court, generously in my view, granted absolution from the instance….,.

1….,.

2….,.

3. The cross appeal is dismissed with costs.

The distortions caused by the galloping inflation currently characterizing our economy are graphically shown, in part, by the claims that are being brought before the courts. The above, in my view, is one such example.

While inflation is a fact that they must take judicial note of, courts must, in my view, be wary that the distortions caused by inflation in the economy are not transported wholesale into the law thereby causing distortions of legal principles.

The plaintiff operates a butchery from Muzarabani Business Centre in Mashonaland Central. In 2003, he thought of adding to his assets by having a freezer room installed at the butchery. He approached the defendant, who, in or about September 2003, gave him a quotation for installing a 6x8x8 cubic metre cold room for $13 million. In terms of the written quotation, the plaintiff was required to pay 50% of the total cost as a deposit and to show confirmation of the order. A deposit in the sum of $5,4 million was duly paid on 29 September 2003 and installation was to be done in a week's time. On 17 October 2003, the defendant delivered the cold-room, ready to install and commission it. Upon realizing the error, the plaintiff declined to accept delivery and installation of the coldroom whereupon the defendant returned to Harare with the cold room. Efforts to get the defendant to return and install a freezer room were in vain, prompting the plaintiff to approach his legal practitioners for assistance.

In April 2004, the defendant refunded the sum of $1,955,000= to the plaintiff, retaining the sum of $3,445,000= as necessary expenses incurred in manufacturing and attempting to deliver the cold room to the plaintiff. Unhappy with this development, the plaintiff issued summons claiming a payment of the sum of “$13,000,000= of $2,480,000= which is current $657,200,000=, with room to in increase it to match the current costs of installing a freezer room at trial”…., together with interest at the prescribed rate from date of the deposit to date of payment in full and costs of suit.

At the trial of the matter, the claim was amended to $53 billion.

The matter was defended.

In its plea, the defendant denied that it ever quoted the plaintiff for the supply and installation of a freezer room and averred that it quoted it for the supply and installation of a cold room.

At the trial of the matter, the defendant was in default, and, in terms of Rules 59A and 60 of the High Court Rules, 1972 I called upon the plaintiff to lead evidence on the amount of his claim.

The plaintiff's evidence was largely a rehash of the facts of the matter as I have detailed above. In addition, the plaintiff adduced into evidence a quotation that he obtained from a company called Commercial Refrigeration in the sum of $202 billion. The date of the quotation is not given on the handwritten quotation which also includes a component of foreign currency.

When asked to explain his claim in the sum of $53 billion, the plaintiff had the following to say, in part:

“I am claiming an amount that has the same value as the amount that I paid to the defendant in 2003.”

He went on, further, to explain that the amount he is claiming is one quarter of the total amount of the quotation from Commercial Refrigeration just as the amount that the defendant retained was a quarter of the quotation it had given him.

At the commencement of the trial I was under the impression that the plaintiff's claim was one of damages.

It was with this response that it appeared to me that he is simply claiming a refund of the amount that the defendant retained as expenses of manufacturing the cold room and travelling to and from Muzarabani with the wrong refrigeration unit, not at its nominal value, but, at its appreciated value, taking into account the impact of inflation.

His claim appears to me to be one for a debt and not for damages arising ex contractu.

The plaintiff's evidence was to the effect that the sum of $3,445,000= that was retained by the defendant in 2004 now has the same value as $53 billion which he claims. It became clear to me, from this response, that the plaintiff is raising inflation as the basis of his claim.

The plaintiff's stance was re-affirmed by counsel for the plaintiff when he addressed me on the issue.

His argument was to the effect that the plaintiff is entitled to claim the same percentage of the amount that it will now cost to supply and install a freezer room as was the percentage of the amount that the defendant retained in 2004 to the cost of installing a cold room in 2004.

Judges have often used telling adjectives to describe submissions they did not expect from legal practitioners such as “startling” or “ingenious”. Neither term aptly describes my sentiments at being presented with this submission.

I hasten to remark that the matter before me, although set down for trial, proceeded as an application for default judgment.

Ordinarily, a request for default judgment is hardly denied, as, by his default, the defendant is taken to have admitted all the averments made by the plaintiff. I am also aware of the school of thought that holds the view that it is not for a judge or the court determining an application for default judgment to act as the unpaid and un-briefed counsel for the defendant who is in default and deny a plaintiff judgment on issues that the defendant may not have raised if in attendance. Thus, a court dealing with an application for default judgment is perfectly within its rights to enter a default judgment not on the merits of the matter but on the technical basis that the defendant is in default even in cases where it is of the opinion that a defence may have been available to the defendant.

There is, in my view, however, a limit to the non-participatory role that a court may play in an application for default judgment. In my view, where a claim is clearly not well founded in law, a court may not give judgment on such a claim simply on the basis that the defendant is in default. Similarly, where damages have not been adequately proved to the satisfaction of the court, judgment may not be entered in the claimed sum; again, simply on the basis that the defendant is in default.

The basis for drawing the limit to the non-participatory role of the court, in my view, is the fundamental principle that after the parties have made their submissions to the court, the decision or order that is made is solely that of the court and such decision or order must find a basis in law at all times.

In my view, the claim before me is a case compelling me to abandon my non-participatory role for two reasons;

(i) Firstly, I take the view that the plaintiff's claim, being a claim in which the alleged debt has been appreciated to take into account inflation, is badly founded in law. Courts will take inflation into account when assessing damages in certain delictual claims but inflation, on its own, cannot be a cause of action.

In Edward Marume and Another v Todd Muranganwa HH27-07, I had occasion to deal with the issue of inflation in another application for default judgment. The following were my views on the matter:

“In my view, the issue involves a detailed discussion of 'currency nominalism' and 'revalorization' and the place of such concepts in Zimbabwean Law.”

The concept of currency nominalism has been held to be applicable in all aspects of South African Law. See SA Eagle Insurance Co Ltd v Hartley 1990 (4) SA 833. In view of the provisions of the Prescribed Rate of Interest Act, there is a strong case for arguing that the concept also underlies all aspects of Zimbabwean law and that revalorisation, or the appreciation of debts to take into account inflation has no place in our law.

Again, like in Edward Marume and Another v Todd Muranganwa HH27-07, I have not been adequately addressed on the issue.

I hold the view that the distortions caused by inflation in the economy should not lead to the wholesale distortion of legal principles that have withstood the test of time in a bid to find legal solutions to a problem that is not legal in nature and origin and may prove to be transient. I am yet to be persuaded that revalorization is part of our law of debt collection.

Assuming that I have erred in classifying the plaintiff's claim as one based on inflation, and that properly it is one seeking damages for an alleged breach of contract, then, in my view, two other issues arise;

(i) Firstly, it has not been proved that the retention of the sum of $3,455,000= was wrongful in any way or that it constituted breach of the contract between the parties. In fact, it would appear to me that the parties were not ad idem as the plaintiff requested for a freezer room and the defendant supplied a cold room. The offer and the acceptance did not coincide and the parties never had a contract in my view.

Even if one were to be generous and hold that there was a contract that the defendant breached by supplying the wrong refrigeration unit, the damages suffered by the plaintiff for the alleged breach have not been adequately proved.

It cannot be said that the quotation from Commercial refrigeration in any way represents the correct loss of value in money between 2004 and the date of the hearing. It has also not been proved that the quotation by Commercial Refrigeration has any relationship to the quotation given by the defendant in 2003. One was quoting for a cold room of different dimensions and the other was quoting for a freezer room of entirely different dimensions.

How the one can be tendered as proof of the value of the other was not argued before me.

Despite much effort, I cannot figure out a possible argument on the relationship myself.

For the above reasons, I cannot accede to the prayer for default judgment in the matter in the amount prayed.

I have anxiously considered whether I can grant judgment in the sum of $3,455= that was retained by the defendant in 2004 together with interest thereon at the prescribed rate from the date of the retention to date of payment. The amount involved, even with interest, is so pitiful, in my view, as to make a mockery of the justice delivery system where I to order its payment. In m view, the plaintiff is best served by the order that I make below.

In the result, I make the following order:

1. The defendant is granted absolution from the instance.

2. The plaintiff is hereby granted leave, after effecting necessary amendments to his claim, and upon service of such on the defendant, to set the matter down for judgment in terms of Rule 58 of the High Court Rules, 1972.

3. There shall be no order as to costs.

The cause of action in this case arises out of an alleged breach of contract by the defendant for the supply of 20 IBM A50 desktop computers (computers) to the plaintiff.

The plaintiff is suing the defendant for specific performance or payment of damages in lieu thereof.

At the commencement of the trial, the plaintiff applied to amend the damages figure or the summons to read $9,792,245,000 000 instead of $7,800,000,000. The amendment was meant to address the effect of inflation on the original figure. Counsel for the defendant did not oppose the application for amendment. I granted the application for amendment, and, consequently, the plaintiff's claim herein is for:

“(a) An order that the defendant supply and deliver to the plaintiff a total of twenty (20) IBM A50 desktop computers forthwith alternatively an order that defendant pays to plaintiff a total of $9,792,245,000,000 representing the current value of the said computers.

(b) Interest on the amount representing the value of the computers from the date of summons to the date of payment; and

(c) Costs of suit.”

It is common cause, that, on 23 February 2005 the plaintiff ordered from the defendant a total of thirty (30) computers. Each computer was quoted at a price of $9,860,400, bringing the total cost, including V.A.T. payment, to $340,183,800. This amount was then paid in full on 28 February 2005. The defendant, however, only managed to deliver ten (10) computers on 2 March 2005. This left a balance of twenty (20) computers.

It is the non-delivery of these twenty (20) computers that has led to this court action.

The defendant explains non-delivery by citing the failure to obtain the requisite foreign currency allocation from the Reserve Bank of Zimbabwe through the auction system which was then in operation. It is the defendant's position that both parties were fully aware that the amount paid by the plaintiff would be utilised for the purchase of foreign currency in order to meet the requirements of the defendant's foreign supplier, namely, a company called 'TriContinental Limited' (Tri-Continental).

However, the plaintiff's position is that delivery was to be effected soon after payment and the total amount paid represented the full payment for the thirty (30) computers ordered.

In view of the different positions taken by the parties, it was agreed that the issues for determination in this trial would be:-

“(1) What were the terms of the Agreement between the parties?

(2) Whether it was agreed, as between the parties, that the defendant would supply the computers upon receiving foreign currency allocation by the Reserve Bank of Zimbabwe.

(3) Whether the plaintiff is entitled to the order sought.

(4) Whether the defendant is liable to the plaintiff in damages.”

The plaintiff called two witnesses to support its case, and, through the witnesses, it submitted a total of nine (9) exhibits.

The first witness called by the plaintiff was Mr Patrick Gwara (“Mr Gwara”) who said he is currently employed by the plaintiff as a Stores Supervisor with the main responsibility of taking care of the plaintiff's stocks.

Mr Gwara testified that upon an evaluation of quotations the defendant was awarded the contract/tender to supply the plaintiff with thirty (30) computers. He said upon being paid the sum of $340,180,800 to cover the total cost of the computers, the defendant delivered ten (10) computers. The ten (10) computers were received by the plaintiff on 2 March 2005. That left a balance of twenty (20) computers already paid for.

It was Mr Gwara's evidence that at the time of placing the order with it, the defendant had indicated that it had twenty-five (25) computers in stock and 'it would get the other five (5)'.

He said, apart from paying the requisite purchase price for the computers, the plaintiff was not aware of the financial arrangements between the defendant and its suppliers.

He went further to say if the plaintiff had known that the defendant would face supply problems, it (plaintiff) would not have placed the order with the defendant. This was so because the computers were needed urgently for its Harare and Bulawayo offices.

Under cross-examination, Mr Gwara said he was not aware that his seniors had moved the delivery date to 1 July 2005 as indicted in the replication. He however maintained, that, as far as he was concerned, delivery was to be made soon after payment. He said that although the plaintiff had in the past accepted long delivery periods with respect to other contracts, this was not the case with respect to the thirty (30) computers because they were needed urgently.

The contract/tender had been awarded to the defendant on the basis that it had the computers in stock.

Mr Gwara denied knowledge of the offer by the defendant to refund the plaintiff. He said as far as he was concerned the plaintiff wanted delivery of the twenty (20) computers.

The second witness called by the plaintiff was Mr Mischeck Chigatse (“Mr Chigatse”). He said he is employed by the plaintiff as a Procurement Officer.

Mr Chigatse was, in that capacity, responsible for the procurement of goods and services for the plaintiff. He was, however, not aware of the issue of the thirty (30) computers since the contract had been entered into before he was employed by the plaintiff.

The witness, however, gave evidence on current prices of computers such as those forming the subject of the dispute herein. He said the prices ranged from $300 billion to $700 billion. His evidence was based on three (3) quotations obtained by the plaintiff. He said based on the quotations, the current price of a similar computer to the one that had been ordered by the plaintiff would be $489 billion.

The defendant called only one witness to support its case.

It called Mrs Doreen Nyamusara (“Mrs Nyamusara”). She said she joined the employ of the defendant in April 2005 as a Finance Manager but was, as from January 2008, promoted to the position of General Manager. She told the court that she was unaware of the details of the contract in issue since she joined the employ of the defendant when the contract had already been concluded. She was, however, involved in negotiations with the defendant's suppliers for the delivery of the remaining twenty (20) computers.

Mrs Nyamusara testified, that, at one stage the defendant had asked the plaintiff to participate in the auctions(s) for foreign currency. The plaintiff had refused to do so. She said after all efforts to obtain foreign currency had failed to produce results, the defendant had offered to refund the plaintiff. The plaintiff had, however, declined the offer, insisting that it wanted delivery of the computers.

Mrs Nyamusara also stated that the parties failed to resolve the matter amicably largely due to differences in the calculation(s) of interest. As a result of the differences, the matter was never resolved amicably. This was notwithstanding the fact that the defendant made a payment of $1,392,000 through the plaintiff's legal practitioners – which payment was still being held by the plaintiff's legal practitioners.

Under cross-examination, she agreed that the sum of $1,392,000 was too little to pay for the twenty (20) computers.

Also admitting that the type of computers originally ordered by the plaintiff had been phased out, Mrs Myamusara said a similar computer (ie A55 Lenovo) would, as per exhibit 24, cost $143,750,000,000.

Counsel for the plaintiff submitted that there was no doubt that delivery was to be effected immediately upon payment of the full purchase price. He said the issue of foreign exchange was only brought up in an effort to justify a clear breach of contract by the defendant. He said, that, in concluding the contract the issue of foreign exchange was never raised. He said the quotations which resulted in the award of the contract were in local currency – with the foreign exchange element having been taken into account. It was his view that if indeed the issue of foreign exchange had been a factor, the parties would have said so upon executing the contract.

He urged the court to dismiss the defendant's defence based on the shortage of foreign currency because it came as an afterthought.

Relying on RH CHRISTIE's The Law of Contract in South Africa 3ed, counsel for the plaintiff submitted that 'an impossibility to perform must be absolute'.

He argued that, in casu, that defence was not available, and, as such, the defendant was clearly in breach and was liable for the prejudice suffered by the plaintiff. To that end, counsel for the plaintiff prayed either for the delivery of the twenty (20) computers or payment of damages representing the current market value of the computers.

Counsel for the plaintiff submitted, that, if payment of damages were to be ordered, the sum of $9,792,245,000,000 would be reasonable because it would enable the plaintiff to procure the computers on its own. That value, he argued, had not been challenged.

The primary aim in asking for damages was to put the plaintiff to where it should have been were it not for the breach of contract by the defendant.

Counsel for the plaintiff further submitted that the issue of money paid to the plaintiff's legal practitioners should not be allowed to cloud the issues before the court. That money could still be recovered.

Counsel for the defendant submitted that the dispute was mainly on the issue of the delivery dates.

She said that the parties were not agreed on what was the delivery date. She, however, agreed that the defendant's only witness could not testify to the terms of the contract since it was concluded before she joined the defendant's employ.

Counsel for the defendant submitted, that, as per the plaintiff's replication, the delivery date in terms of the contract should have been 1 July 2005. That, according to her, meant there was no question of immediate delivery in line with the parties' conduct on previous supply contracts. She went further to suggest that the failure by Mr Gwara to explain the averment in the replication referring to 1 July 2005 supported the defendant's case in the sense that a delay of some four months after payment meant that the computers would be delivered only after the defendant had paid its supplier, namely, Tri-Continental. Payment involved foreign currency.

It was therefore counsel for the defendant's submission that the plaintiff, despite denial, was aware from inception that delivery of the computers would only be effected after the procurement of foreign exchange by the defendant. Accordingly, when that became impossible, it meant the defendant could no longer deliver as had been agreed.

The failure to obtain foreign currency was, in her view, a supervening impossibility which served to extinguish the defendant's obligations under the contract.

She said according to JOUBERT's General Principles of the Law of Contract, the defence of a supervening impossibility was available to the defendant. To that end, she quoted JOUBERT's General Principles of the Law of Contract …,where he states:-

“Performance may become either absolutely or relatively impossible after the conclusion of the contract. In the case of absolute or objective impossibility of performance the rule is undoubtedly that the duty of the debtor to perform is extinguished….,.”

On the basis of the above, counsel for the defendant submitted that it was improper for the plaintiff to insist on specific performance. In so doing, she argued, the plaintiff had contributed to its own loss.

She said the loss would have been mitigated if the plaintiff had accepted the refund offered in May 2005.

The defendant had, all the same, gone ahead to refund the plaintiff with a sum of $1,362,980=32. That money was still being held in trust by the plaintiff's legal practitioners. The amount, it was argued, had been calculated properly, and, therefore, the defendant's view was that the plaintiff had been refunded in full. There was therefore no basis for this action.

On the possibility of the court finding in favour of the plaintiff and ordering payment of damages, counsel for the defendant submitted that the figures quoted by the plaintiff were excessive and did not accurately reflect the current prices for the originally ordered computers.

She said although there was no case for damages, the defendant's own quotation of $143,750,000, would represent a reasonable figure.

The fact that the plaintiff's loss would have been mitigated if it had participated in foreign currency auctions or had accepted the refund as offered in May 2005 could not be ignored. Accordingly damages payable, if any, should be reduced, she argued.

Counsel for the defendant also urged the court to be cautious when evaluating Mr Gwara's evidence. She said this was so because Mr Gwara had denied knowledge of the refund issue yet there was evidence that correspondence on the issue was copied to him.

I shall, taking into account evidence from both parties' witnesses and submissions by their legal practitioners, now deal with the agreed issues for determination….,.

In dealing with this matter, I believe that a finding of whether or not delivery of the computers was subject to the availability of foreign currency to meet the defendant's suppliers' financial requirements will greatly narrow issues for consideration.

In order for that argument to succeed, the court has to be convinced, that, in paying the sum of $340,183,800 the plaintiff was fully aware that this was merely part payment which would go towards the purchase of foreign currency.

There must be evidence that the defendant made it clear to the plaintiff that delivery would be dictated by the availability of foreign currency to meet the requirement of Tri-Continental, its supplier. This is clearly so, because, apart from quotations and payment confirmations, the contract terms were not reduced to writing.

In casu, the evidence from papers and that led in court leads me to the conclusion that the defendant cannot avail itself to the defence of a supervening impossibility.

This is so because it is clear to me that the plaintiff gave the contract/tender to the defendant on the understanding that the computers were in stock and readily available. All what the plaintiff was required to do was to effect full payment and then delivery would follow immediately.

The defendant had indeed indicated to the plaintiff that it had the computers in stock - at least twenty-five (25) of them.

The plaintiff effected full payment on 28 February 2005. Payment was in accordance with the defendant's quotation for the delivery of thirty (30) computers.

Contrary to the defendant's legal practitioner's perception of Patrick Gwara, I found him to be a credible witness who knew exactly what took place when the contract was entered into between the two parties. His failure to know subsequent details of discussions between the plaintiff's senior management and the defendant's representatives, on the issue of delivery times and the refund, should not be allowed to carve a dent into his evidence.

The witness, Patrick Gwara, was adamant that the issue of foreign currency was never raised when the contract was granted to the defendant. He pointed out that if at all the plaintiff knew there would be problems of foreign currency the contract would not have been granted to the defendant. The plaintiff needed the computers urgently and the defendant had indicated that it had twenty-five (25) in stock and would look for the other five (5).

That evidence was never satisfactorily challenged in court.

All the defendant could say was that the computers were in stock at Tri-Continental.

Clearly, if that detail was necessary, the defendant could have revealed it to the plaintiff at the time of concluding the contract.

That was not done, and, as submitted by the plaintiff's legal practitioner, I hold the view that the price quoted in Zimbabwean dollars included the foreign exchange component.

Indeed, even upon the speedy delivery of ten (10) computers, there was no mention of a possible top up to cater for the foreign currency element required for the remaining twenty (20) computers.

It is also significant to note that full payment was made on 28 February 2005, and, within a few days (ie. 2 March 2005) ten (10) computers were delivered.

That reinforces the issue of immediate delivery upon full payment and the availability of computers in stock in Zimbabwe.

As already indicated, the defendant has also argued that failure to procure foreign currency rendered performance impossible, and, hence, the defence of a supervening impossibility.

As correctly argued by the plaintiff's legal practitioner, that defence is not available to the defendant.

Right from the inception of the contract, the defendant made the plaintiff believe the computers were in stock in Zimbabwe. That is why within three (3) days the defendant was able to deliver ten (10) computers.

The issue of foreign currency only came up as an excuse for failure to deliver.

I am, therefore, on a balance of probabilities, satisfied, that, upon making full payment on 28 February 2005, the plaintiff had fully discharged its obligation under the contract. That means, the issue of foreign currency was never raised when the contract was concluded and did not therefore form part of the contract terms.

Upon failure to reach an out of court settlement, the plaintiff remained ready to accept delivery. This remained the plaintiff's position up to the hearing of this matter.

To that end, I would reject the defence of a supervening impossibility because my finding is that, when the contract was made, the defendant assured the plaintiff of immediate delivery upon payment, as evidenced by the delivery of the first ten (10) computers. There was no basis for the plaintiff to ever think or imagine that the remaining twenty (20) computers were not in stock.

The contract was not subject to the defendant being availed foreign currency by the Reserve Bank of Zimbabwe. If indeed that were the case, the contract would have said so.

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 it was made, it was impossible of performance forms part of our law.

'By the Civil Law, a contract is void if at the time of its inception its performance is impossible: impossiblium nulla obligatio (D50.17.185).'

But, the principle thus stated may easily be misunderstood and requires immediate qualification in four respects:

(i) First, the impossibility must be absolute as opposed to probable. The mere likelihood that performance will prove impossible is not sufficient to destroy the contract.

(ii) Second, the impossibility must be absolute as opposed to relative. If I promise to do something which, in general, can be done, but which I cannot do, I am liable on the contract.

(iii) Third, the impossibility must not be the fault of either party. A party who has caused the impossibility cannot take advantage of it and so will be liable on the contract.

(iv) Fourth, the principle must give way to the contrary common intention of the parties. This intention may be expressed, as when a seller expressly represents or promises that the merx exists. If it is found not to have been in existence at the time the contract was made, he will be liable for damages for breach of his promises or for his false representation if fraudulent or negligent. Or the common intention of the parties may be implied, as in the case of the sale or lease of a res aliena. The seller or lessor impliedly undertakes to deliver the property or to pay damages if he is unable to do so.”

In casu, there is nothing to suggest impossibility at the time of contracting or to suggest any conditionalities.

There is also nothing to suggest that the issue of foreign currency led to a complete paralysis of the defendant's business. To date, it is still in the business of selling computers.

As already stated, it is my finding that the defendant clearly represented to the plaintiff that he had the computers in stock, and, since the plaintiff needed them urgently, he gave the contract/tender to the defendant.

In breach of contract, and without any fault on the part of the plaintiff, the defendant delivered ten (10) computers only, leaving a balance of twenty (20) computers.

Clearly, therefore, and in line with the principles of law enunciated by R.H. CHRISTIE in the above quoted passage, the defendant is liable for specific performance or damages: see Lupu v Lupu 2000 (1) ZLR 120 (S).

The plaintiff still insists on specific performance or payment of damages to cover the cost of similar computers at today's prices.

I also did not hear the defendant to say it cannot perform.

The defendant is still in the business of selling computers.

Quotations were produced to indicate current prices for similar computers. The defendant produced one quotation and argued that the plaintiff's prices were for superior machines. The defendant said that a computer similar to the one originally ordered would cost $143,750,000,000. The plaintiff, however, believes that, in order for it to be put back to where it would have been had the twenty (20) computers been delivered, a sum of $9,792,245,000,000 should be payable in the event of failure by the defendant to deliver. That amount is based on quotations for each similar computer on exhibits 8 ($382,455,561,600), 9 ($489,622,500,000) and 10 ($776,250,000). Given the effects of inflation, the plaintiff recommended the midway price of $489,622,500,000.

The defendant, on its part, and despite denying liability, insisted that it was possible to procure similar computers at the price it quoted (ie. $143,750,000,000).

Counsel for the plaintiff submitted that the matter of a refund should not be allowed to cloud the real issues before the court.

I agree.

I believe the payment of $1,392,000, through the plaintiff's legal practitioners, only serves to confirm a failed attempt to settle the matter out of court. In any case, Mrs Nyamusara, who testified for the defendant, agreed that the money was too little to cover the cost of twenty (20) computers.

I hold the view that a party that is in clear breach should not be allowed to dictate the amount of damages that should be paid to the party that is not at fault, and, moreso, an innocent party that will have fully met its obligations under a contract. To allow that would be to encourage parties to pull out of contracts on the strength of their capacity to pay damages.

In International Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd 1993 (1) ZLR 21 (H), addressing the issue of specific performance, the late ROBINSON J…, 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 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 fully endorse the above sentiments.

In view of the foregoing, and having determined all the issues raised…, in favour of the plaintiff, I believe that, in casu, the circumstances demand that the relief prayed for by the wronged party, the plaintiff, should be given favour by this court.

Accordingly, I order as follows:-

1. That the defendant be and is hereby ordered to supply and deliver to the plaintiff twenty (20) IBM A55 (Lenovo) desktop computers forthwith;

2. That, in the event of failure to deliver as indicated in 1 above, the defendant be and is hereby ordered to pay the plaintiff damages in the sum of $9,792,245,000,000 forthwith;

3. That the amount referred to in 2 above shall be payable with interest at the prescribed rate from the date of summons to the date of payment; and

4. That the defendant shall bear the costs of this suit.

The plaintiff had, on 19 March 2003, contracted with the defendants to supply it with two Mercedes Benz vehicles, in terms of a written agreement entered into by and between the parties. In terms of an invoice supplied by the defendants, the purchase price was $170,000 for both vehicles. The vehicles, whose description, in terms of the colour, make, model, and identification, were to be second-hand, and were to be acquired and delivered in three weeks time.  

In pursuance of the Agreement, the plaintiff made full payment for the vehicles in terms of the contract.

It is common cause that upon visiting South Africa to confirm the condition of the vehicles, the first respondent was not satisfied with the state of the vehicles. He communicated with the plaintiff, who indicated that he would opt for new vehicles instead, and both parties agreed that the prices of the new vehicles would be finalised upon delivery.

The defendant then proceeded to purchase the new vehicles, which were driven to Beitbridge Border Post for clearance. Problems arose after the clearing agents acted outside their mandate by trying to clear the vehicles through another clerk unknown to the defendants, resulting in the vehicles being seized and eventually forfeited to the State.

In the meantime, the defendants had surrendered their Ferrari motor vehicle to the plaintiff as security for the $170,000 advanced to the defendants. A cession was agreed on and signed, giving the plaintiff authority to sell the vehicle should the defendants fail to deliver in terms of the contract.   

It is also common cause that the parties held several meetings trying to resolve the issue of the seizure...,. However, the defendants failed to sort out the problem until the plaintiff issued out summons two years later.

It was conceded, by the defendants' legal representative that the defendants were longer in a position to fulfil their contractual obligation by supplying the motor vehicles in question. It is clear that they had failed to do so, for whatever reason.

The plaintiff is, therefore, claiming the following:

1. Damages in the sum of $94,654, or its equivalent in Zimbabwean dollars less the price of the Mercedes Benz C200 Kompressor at the time of the breach of the contract.

2. Interest at the prescribed rate on the sum of US$94,654, or its equivalent in Zimbabwean dollars, at the prescribed rate, from the date of summons to the date of payment.  

3. Costs of suit.

The legal issue which arises is whether the plaintiff had suffered any damages as a result of the breach, and, if so, whether the defendants are liable for the breach.

The law relating to contractual damages is settled. A wronged party has a right to claim contractual damages for breach of the contract, or to claim specific performance.

 A wronged party is entitled to damages where it is clear the breaching party is liable for causing the non-performance of the contract, whether negligently or wilfully. To that extent, the defaulting party is liable for actual damages suffered by the plaintiff. See Pamire & Ors vs Dumbutshena & Anor 2001 (1) ZLR 123. MAKARAU J had this say in this case –

“Under the law of contract, damages for breach are meant to put the injured party in the position they would have been had the contract been properly performed. It is trite that the proper performance of the contract necessarily involves the satisfactory discharge of all obligations by all parties, and not by one.”

In this case, the plaintiff said that it suffered damages as a result of the default by the defendants, and has claimed specific performance, and damages in the alternative. It has already been noted that the defendants can no longer fulfil their obligations in terms of the contract. It has, as a result, persisted with a claim for damages.

In our law, the essence of the payment of damages is to restore the wronged party to the position it would have been had the contract been fully performed. It is also settled that damages are assessed as at the time of the breach. See Parish vs King 1992 (1) ZLR 216 (S) and Victoria Falls and Transvaal Power Co. Ltd vs Consolidated Langlaage Mines Ltd 1915 AD 122.

In the result, it is ordered as follows:

1. Defendants shall pay the plaintiff damages in the sum of US$94,654 less the price of the two Mercedes Benz at the time of breach of the contract.

2. Interest at the rate of interest applicable in the United States of America.

Although the initial transaction between the parties was in local currency, both parties were alive to the fact that the product was to be imported using foreign currency. Now that the Zimbabwean Dollar is no more, the justice of the case demands that compensation be paid in foreign currency.

The parties were aware all the time that if there was need to replace the product, it will have to be done using foreign currency. They must, therefore, be deemed to have agreed that if there was need for compensation, it would have to be in foreign currency.

As the plaintiffs have already performed their part of the bargain, it is only fair, just, and proper, that the defendant must be compelled to perform its part of the bargain, failure of which it is obliged to compensate the plaintiffs, so as to place them in the same state they would have been had the defendant properly performed its part of the bargain.

That being the case, the plaintiffs claim can only succeed. It is accordingly ordered:

1. ...,.

2. In the alternative, the defendants be and are hereby ordered to pay damages in the sum of US$7,000= being the costs of repairing the defects.

The plaintiff's claim was for specific performance of an agreement of sale for the cession of personal rights and interests held jointly by the first defendant and second defendant in a property known as 5706 Muroro Crescent, Glen Norah B, Harare.

The plaintiff asserted that he entered into the agreement with the first and second defendants on the other hand through the agency of PMA Real Estate Agency (Pvt) Ltd.

The first defendant denied that he ever entered into an agreement of sale with the plaintiff. He denied authorising PMA Real Estate Agency to sell his rights and interests in House No.5706 Muroro Crescent Glen Norah B, Harare.

The first defendant, Zondai Chimbwanda, and the second defendant, Givemore Karimazondo, are joint holders of certain personal rights and interests in the property known as No.5706 Muroro Crescent, Glen Norah B, Harare in equal shares. As holders of equal shares in the said property they agreed between themselves to dispose of their rights and interests in the property. Pursuant to this understanding, the second defendant approached PMA Real Estate and granted them a mandate to sell the said rights and interests.

At the material time, the first respondent was out of the country in Botswana.

In completing the mandate to sell form, the second defendant endorsed both the first and second defendants names as holders of rights and interests in the property.

That form was however signed by the second defendant only.

PMA Real Estate Agency proceeded to advertise the property and the plaintiff expressed interest. On 16 August 2005, the plaintiff executed an irrevocable offer and acceptance form in which he offered a purchase price of $220 million. On 17 August 2005, the second defendant appended his signature to that form in acceptance of the offer as seller.

Thereafter, on 18 August 2005, an agreement of sale was drawn up by PMA Real Estate Agency. The agreement of sale was executed by the plaintiff and the second defendant.

The plaintiff paid a deposit of $214 million to PMA Real Estate and the balance was to be paid in instalments.

The purchase price was subsequently revised upwards to Z$260 million.

The plaintiff paid the balance of the purchase price to PMA Real Estate Agency. The agreement of sale was amended to reflect the new purchase price of Z$260 million (see exb. 5).

It is common cause that when the parties entered into the agreement of sale they knew that the agreement was conditional on the first defendant ratifying the agreement upon his return from Botswana.

The first and second defendants subsequently sold the same rights and interests in the property in question to the third defendant, in September 2005, for the price of Z$350 million.

The third defendant duly paid the purchase price and has since taken occupation of the property.

His effort at obtaining cession was stalled when PMA Real Estate Agency advised the fourth respondent that the same property had been sold to the plaintiff and so no cession should be effected.

The plaintiff therefore brought this suit against the first and second defendants seeking:-

(1) Cession of Stand No.5706 Muroro Crescent, Glen Norah B, Harare into his name, alternatively;

(2) The sum of Z$15 billion being the cost of a house similar to Stand 5706, as at the date of the summons, being 14 November 2007.

The plaintiff in this case claims the delivery of 1,200 bags of PC15 cement or, in the alternative, damages for breach of contract equivalent to the current market value of the cement, being US$11,400=, and costs of suit.

The defendant resists the claim on several grounds, to wit, that delivery of the cement was conditional on the defendant receiving the same from its supplier, that it was unable to deliver due to supervening impossibility and that it is no longer able to deliver the cement and has offered a refund to the plaintiff in the sum of ZW$336 million.

Evidence for the Plaintiff

Elliot Mutangadura, the plaintiff, testified as follows. In July 2007 he approached the defendant to purchase various building materials. The defendant then submitted a quotation on the 18^th of July 2007 listing those materials that it was able to supply - including the cement in question [Exhibit 1]. At that time, PC15 cement was available on the market and also in the defendant's warehouse (though he was not aware of the quantity thereof). This was confirmed by the defendant's Branch Manager (Mavengere) as well as its Sales Manager (Jongwe) without any condition as to having to await delivery from the defendant's suppliers.

The plaintiff then paid the full purchase price for all the materials in six instalments amounting to $3.51 billion, as was confirmed in a letter from Jongwe dated the 30^th of August 2007 [Exhibit 2]. In that letter, Jongwe also confirmed that “we had promised delivery early August.” The defendant thereafter delivered all the purchased items - save for the cement.

On the 19^th of September 2007, Mavengere wrote a letter stating that the defendant was “unable to supply PC15 cement as per agreement” and offered to supply masonry or other building materials equivalent to the amount paid [Exhibit 3]. The plaintiff rejected the offer as the PC15 cement was specifically required for the building work in question.

On the 21^st of September 2007 the plaintiff's lawyers wrote a letter of demand to the defendant [Exhibit 5]. In response, on the 1^st of October, the defendant's lawyers offered a refund of the original purchase price of $336 million [Exhibit 4]. The plaintiff rejected this offer through a letter from his lawyers on the 9^th of October [Exhibit 6] because the money tendered was insufficient to pay for 1,200 bags of cement at that time.

Subsequently, from October 2007 to June 2008, the plaintiff sourced 1,200 bags of cement, on loan, from his uncle's hardware business. The return of the cement borrowed is now overdue. The requisite PC15 cement is currently available on the market at US$9.50 to US$10 per bag.

Evidence for the Defendant

Thomas Jongwe was the Sales Manager of the defendant's Harare branch at the relevant time. His evidence was as follows.

Before giving the original quotation to the plaintiff, on the 18^th of July 2007, he made enquiries with the defendant's suppliers and told the plaintiff that PC15 cement was available for supply to the plaintiff. However, before the first payment was received, on the 20^th of July, he verbally informed the plaintiff that the cement was not immediately available and would be sourced from Unichem, a supplier in Bulawayo. He then placed an order for 1,200 bags with Unichem on the 31^st of July [Exhibit 7]. Unichem did not have any clinker, a critical raw material in cement, and he verbally informed the plaintiff of that fact.

The plaintiff made six payments in all, from the 20^th of July to the 16^th of August 2007, as shown on the receipts therefor [Exhibit 8]. There was no indication on the receipts as to the specific items paid for. The payments were made towards the total quotation amount, with appropriation in respect of each item being made at the time of invoicing. No invoice was raised for the cement as it was not in stock to deliver. In accordance with the defendant's internal accounting system, an invoice is raised after payment is received and is given to the customer at the delivery point as a delivery note.

Under cross-examination, Thomas Jongwe accepted that by the date of the last payment, on the 16^th of August 2007, the plaintiff had discharged his obligation under the contract. He also conceded that he made enquiries with the defendant's suppliers and made certain that the cement was available before issuing the quotation to the plaintiff. He further confirmed that PC15 cement is presently available on the market.

Issues for Determination

The agreed issues for determination herein are as follows:

(a) What terms and conditions were agreed to or can be implied from the contract concluded between the parties?

(b) Whether the defendant is liable for specific performance in terms of the contract.

(c) What amount of compensation, if any, is the defendant liable to pay to the plaintiff?

Terms and Conditions of Contract

The evidence before the Court shows that after the plaintiff initially approached the defendant, its Sales Manager, Thomas Jongwe, made enquiries with the defendant's suppliers and received positive confirmation as to the availability of PC15 cement. Jongwe then made out the quotation [Exhibit 1] and upon handing it to the plaintiff on the 18^th of July 2007 gave a firm assurance that the cement would be delivered in early August.

At that time, the defendant did not, as it contends, stipulate any condition as to the fulfilment of the contract being subject to delivery from its suppliers. Thereafter, the plaintiff paid the full amount of the quotation in six instalments, beginning on the 20^th of July and finishing on the 16^th of August 2007. The defendant only raised the non-availability of PC15 cement from its suppliers over one month after full payment had been made and received.

All the payments made by the plaintiff were towards the total quotation and not towards any specific materials thereon. The defendant's invoicing process involved the appropriation of the amounts paid to particular items as and when delivery was effected and the invoices served as delivery notes. However, this was quite clearly a process that was internal to the defendant's accounting system and totally irrelevant to the conclusion of the contract between the parties.

It is quite clear from the foregoing that the contract in casu was concluded unconditionally on the 20^th of July 2007 when the defendant accepted the plaintiff's first instalment as part payment towards the entire quotation - including the PC15 cement. The terms and conditions of the contract were that the defendant would deliver the cement in early August against payment by the plaintiff of the full amount of the quotation in instalments. In effect, the parties concluded an unconditional and binding contract for the supply of 1,200 bags of cement to the plaintiff in early August 2007.

Specific Performance and Supervening Impossibility

The defendant avers that at the end of August 2007 it was unable to source PC15 cement from its suppliers because a requisite component (clinker) was not available at that time. It therefore contends that this market factor constituted a supervening event rendering impossible the performance of the contract for the supply of PC15 cement.

It is trite that a party to a binding agreement has the right to demand from the other party, as far as it is possible, performance of his undertaking in terms of the contract where he is in a position to do so. Such specific performance can only be avoided in compelling circumstances. In this respect, the onus lies on the party seeking to avoid the contract to establish the facts and circumstances justifying the court's exercise of its discretion to refuse specific performance. See International Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd 1993 (1) ZLR 21 (H)…,.

The general rule in our law is that, if a supervening physical or legal factor renders the performance of a contract impossible, through no fault of the debtor, the obligations of the parties under the contract are thereby extinguished and cannot be enforced. See Beitbridge-Bulawayo Railways (Pvt) Ltd v Commercial Union Insurance Company of Zimbabwe Ltd SC91-07.

However, this general rule does not override the terms of the implications of the contract. The court must have regard to, inter alia, the nature and circumstances of the contract and the nature of the impossibility that is relied upon. If, for instance, it is ascertained that the parties contemplated the situation that gives rise to the impossibility and accepted the risk of the supervening event, the general rule does not apply and the parties are bound to perform their contract. See Beitbridge-Bulawayo Railways (Pvt) Ltd v Commercial Union Insurance Company of Zimbabwe Ltd SC91-07; Bekker N.O. v Duvenhage 1977 (3) SA 884 (ECD)…,.; Bischofberger v Van Eyk 1981 (2) SA 607 (WLD)…,.; CHRISTIE: The Law of Contract in South Africa (3^rd ed.)…,.

There is a further situation more pertinent to the facts in casu where the general rule does not override the obligation of the parties to perform their contract. This arises where a party is only temporarily disabled from fulfilling his contractual obligations, in contradistinction to the position where the contract becomes finally and completely impossible of performance. See Field N.O. & Another v Compuserve (Pvt) Ltd 1990 (2) ZLR 253 (HC)…, citing Beretta v Rhodesia Railways Ltd 1947 (2) SA 1075 (R)…., as follows:

“The law is clear that when a contract becomes finally and completely impossible of performance by reason of an act of State it is discharged. Peters Flamman & Co v Kokstad Municipality 1919 AD 427. But this does not cover the situation in which one party is temporarily disabled from fulfilling his obligation.

It is nowhere suggested that the immediate effect of such temporary disability is to end the contract, and this is not surprising, for any such suggestion would involve consequences so extreme as to be unthinkable.”

On the evidence before the Court, there is nothing to indicate that the non-availability of clinker on the market was permanent and irreversible. According to Thomas Jongwe's testimony, this non-availability only occurred towards the end of August 2007 when the defendant's suppliers intimated their inability to supply PC15 cement. This would mean that the defendant was merely temporarily unable to source the 1,200 bags of cement and deliver the same to the plaintiff. Certainly, there was no evidence adduced to contradict the plaintiff's testimony that PC15 cement was available on the market from October 2007 onwards. In any event, the shortage of clinker on the market occurred one month after the promised date of delivery, and, therefore, it could not and should not have affected the defendant's undertaking to deliver the cement to the plaintiff in early August 2007.

It follows that the defendant's defence of supervening impossibility cannot be sustained, either at the time when delivery of the cement was to be effected as contemplated by the parties, i.e. in early August 2007, or at any time from October 2007 onwards, when cement was available on the market. It also follows that the defendant has failed to establish any basis for declining specific performance and must therefore be held bound to its undertaking to deliver PC15 cement to the plaintiff.

Quantum of Damages

Assuming that I am wrong in finding that the plaintiff is entitled to claim specific performance on the facts in casu, it is necessary to consider the measure of damages properly due to the plaintiff.

In this regard, the defendant submits that the plaintiff should have accepted the refund that was tendered by the defendant in October 2007. By refusing to accept that refund, so it is argued, the plaintiff has failed to mitigate his damages and must therefore bear the penalty of a commensurate reduction in the quantum of damages to be awarded.

In my view, these submissions are devoid of merit for several reasons.

It cannot be disputed that the plaintiff's entitlement to damages must entail him being placed in the position he would have been in but for the defendant's breach of contract. The plaintiff's unchallenged evidence was that in order to complete his building project he borrowed the requisite cement and presently remains obligated to replace the borrowed cement. More particularly, he rejected the defendant's offer to refund the purchase price originally paid specifically because the amount tendered would not have placed him in the position he was in at the time that the contract was concluded due to the hyper-inflationary economic environment that prevailed at that time. No evidence was adduced on behalf of the defendant to counter the plaintiff's testimony in the above respects.

I accordingly find that the plaintiff did endeavour to mitigate his loss and that his rejection of the refund offered by the defendant was perfectly justifiable at the material time. Moreover, it is common cause that the plaintiff duly performed his contractual obligations and that the defendant has remained in possession and beneficial use of the money paid by the plaintiff for the cement. It also not disputed that the current minimum price for cement is US$9.50 per bag.

In the final analysis, the law requires that the plaintiff be put in a position to purchase the cement that he requires at the current minimum market price in order to meet his obligation to replace the cement that he has borrowed. He is therefore entitled to the measure of damages that he claims in the alternative.

Disposition

Although the plaintiff's claim for damages was originally framed as an alternative in the event of the claim for specific performance being refused, I believe that it would be just and equitable, at this juncture, having regard to the facts of this case and the circumstances of both parties, to grant both an order for specific performance and damages as alternative remedies.

In the result, judgement is hereby entered in favour of the plaintiff as against the defendant for:

(i) The delivery of 1,200 bags of PC15 cement within 7 days of the granting of this order, or, alternatively, the payment of damages for breach of contract in the sum of US$11,400= being the current market value of 1,200 bags of PC15 cement; and

(ii) Costs of suit.

Counsel for the plaintiff filed Heads of Argument in support of this application.

Counsel for the plaintiff referred me to the case of Watergate (Pvt) Ltd v Commercial Bank of Zimbabwe SC 78/05 where it was held that a party is entitled to payment in foreign currency if he can show that a judgment in that currency would most likely express its loss, and, thereby, being fully compensated for the said loss.

Counsel for the plaintiff also referred me to the case of Makwindi Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe 1988 (2) ZLR 482 (SC).

In these cases, the claim was for foreign currency arising from contracts, whereas, in casu, the parties did not agree on the foreign currency element.

Mario de Angelis further conceded that the plaintiff's claim for special damages before the Malawian courts was based on a profit mark-up of 30% on gross annual turnover. It did not take into account the plaintiff's net profit after deductions of taxes and other contingencies.

The Supreme Court of Malawi allowed the appeal and awarded general as well as special damages. Its award of special damages was based on a gross profit margin of 30% and was not related to net profit. Moreover, in making its award, the Supreme Court of Malawi did not take into account the earlier payment of MK4.8 million made in satisfaction of the High Court award.

Reliance is also placed on the principles to be applied in determining damages for breach of contract as enunciated in Zimbabwe Banking Corporation Ltd v Pyramid Motor Corporation (Pvt) Ltd 1985 (4) SA 553 (ZSC)..., where GUBBAY JA observed as follows –

“Each case must be assessed pragmatically on its own facts and merits, with primary weight being laid upon the policy of the law. The court must ask itself whether, paying due and proper regard to the notion of justice and the interests of litigants, balanced against the community as a whole, it is socially desirable to impose liability in the particular circumstances.”