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.”

THE QUANTUM OF DAMAGES

Having accepted that the plaintiff is justified to claim damages as a result of breach of contract, and that the claim itself is properly before me, I must now focus on the exact amount which the plaintiff is entitled to.

I have already indicated that there was no serious challenge raised by the defendant on the quotation by D.C.de Sousa (Pvt) Ltd as representing the damages suffered by the plaintiff as a result of the defendant's conduct. I accept the quotation as it is. The plaintiff sought to recover US$72,430= based on the quotation from D.C. de Sousa (Pvt) Ltd. A close analysis of that quotation shows that the total quotation adds up to US$70,980.30 and not the figure claimed by the plaintiff. It will be noted that the summons specifically refer to the defendant's failure to supply four tanks whose capacity and quantities are as follows –

(a) 1 x 10,000 litre underground tank;

(b) 1 x 25,000 litre underground tank; and

(c) 2 x 35,000 litre underground tanks.   

The quotation from D.C de Sousa (Pvt) Ltd is silent on the cost of a 10,000m3 tank but makes reference to a 15,000m3 tank – which is irrelevant to the proceedings before me. There has been no attempt by the plaintiff to quantify the cost of a 10,000m3 tank – and it is not the function of the court to do so. From the correct global figure of US$70,980.30 will be subtracted the figure of US$12,337.20 giving us a total figure of US$58,643.10 representing the actual amount of damages established by the plaintiff, and to this extent the plaintiff succeeds in its claim.

Accordingly, it is ordered as follows –

1. That judgment be and is hereby granted in favour of the plaintiff in the sum of US$58,643.10 with interest thereon from 28 February 2009 to the date of full payment.

It now remains for me to determine the question of damages.

At the commencement of the trial I allowed an amendment to the plaintiff's claim from one sounding in Zimbabwe dollars to one for United States dollars.

It is generally accepted that damages for breach of contract are to be calculated at the time when performance was due because the import behind an award of contractual damages is to place the plaintiff in the position he would have occupied had the contract been fulfilled. The rationale for fixing the time of assessment to the date when performance was due is to avoid the plaintiff or defendant being unfairly favoured through the vagaries of prices of a fluctuating market. Even where the seller repudiates the contract before the time fixed for delivery and the buyer accepts the repudiation as an anticipatory breach, the buyer may elect to bring an action for damages, but, prima facie, damages are still to be assessed as at the date fixed for due performance.

This is, however, not the issue for determination before me.

The seller in casu did not repudiate. The seller failed to deliver on the fixed date for delivery but promised to deliver - even after summons was issued. The buyer therefore has an option to claim for an order for specific performance or for payment of money (ad pecuniam solvendum) in pursuance of the contract. See Bray & Edwards v Rhedesia Consolidated Ltd 1911 SR 60.

When a purchaser claims for specific performance for the item contracted for, a purchaser chooses not to crystallize his claim. By making this election, the purchaser has shown a willingness to treat the obligation by the seller to deliver as still continuing, and to it, with the value it may have at the date of trial. Where the court awards the purchaser specific performance with damages failing delivery, the compensation is fixed in relation to the value of the item at the date of trial. See Radiotronics (Pty) Ltd v Scott Lindberg & Co Ltd 1951 (1) S.A. 312; Avery v Bowden (1856) 26 LJQB 3, 119 ER 1119.

It is clear that I cannot award specific performance as the vehicles contracted for have been phased out from production. Even the defendants finally conceded an inability to effect delivery in terms of the contract.

The only option is to award the plaintiff damages representing the value of the vehicles that it purchased from the defendants.

As the vehicles are no longer on the market this is no easy task. I will have to assess the damages on the evidence that has been placed before me. The plaintiff has submitted that damages should be assessed based on the value of the Mazda BT50 as it is the vehicle nearest to the Ford Ranger 1.8L in terms of engine capacity. Indeed, the second defendant had suggested in a letter to the plaintiff that it, the plaintiff, purchases the vehicles as alternative whilst the parties awaited delivery of the Ford Ranger 1.8L from South Africa. The Mazda BT50I is valued at US$18,000= per unit and is readily available in the country. It seems to me only fitting that I award damages to the plaintiff based on the value of the Mazda.

I will therefore issue an order for payment by the defendant of damages equal to 45 Mazda BT50I. In the premises I will order as follows -

IT IS HEREBY ORDERED:

It seems to me that the defendant's plea was not framed with an eye to the relevant and applicable remedies for breach of contract. The purpose for damages for breach of contract is succinctly set out by CHRISTIE in The Law of Contract in South Africa 3^rd…, thus-

“Unlike damages for delict, damages for breach of contract are normally not intended to recompense the innocent party for his loss, but to put him in the position he would have been in if the contract had been properly performed.”

The evidence on the amount of damages that was led by Dr Neil Robin Deacon set out the number of batches the defendant would have manufactured over a period of twelve months of the twenty-one months that it was not in production. He purported to assign the present value of each batch produced at the new premises to batches that would have been manufactured for similar products had production not ceased. He did not provide proof of the present values he assigned to each batch. But even if he had proved the present values, his computations would not have represented a fair and reasonable loss incurred by the defendant for the reason that there were expenses included in the present value that would not have been suffered by a non-producing factory. I have in mind such overheads as water, energy, labour, transport and advertising. The costs that the defendant would have continued to suffer, which would not have been absorbed by the sale of its products, would have been those for the labour that it retained, necessary maintenance and storage of raw materials at hand and unfinished products. It may have suffered other expenses outside the production process itself such as relocation and re-establishment costs. In addition, it would have suffered loss of profits. These expenses and losses would have constituted the natural and probable consequences of the breach.

The defendant failed to establish the amount of the contractual damages that it suffered.

The plaintiff claimed and demanded payment in United States dollars at a time when only the Zimbabwe dollar was legal tender.

At the close of his case, the plaintiff appeared unsure regarding the amended claim which now sounded in foreign currency. Counsel for the plaintiff went out of his way to demonstrate why an award in foreign currency was justified in all the circumstances of this case. In his closing submissions, counsel for the plaintiff relied on the principle that an innocent party is entitled to an order of specific performance, or, if that is not possible, an award of damages, in so far as that would put the innocent party in the position he would have been had the breach not occurred. In the present case, specific performance is not possible because, first, the defendant had failed to perform in terms of the contract. As such the remedy of specific performance is not appropriate. Secondly, the defendant had, at the time of the hearing, disbanded his pre-cast walling business which had, like other businesses at the time in Zimbabwe, suffered an economic collapse.

2. If first defendant is liable for plaintiff's loss, what is reasonable compensation for the plaintiff's lost goods

I have, in this judgment, already made a finding, on a balance of probabilities, that the first defendant was in breach of a contract and therefore liable for the plaintiff's loss.

As indicated elsewhere in this judgment, the first defendant submitted that the plaintiff cannot be compensated in foreign currency because it suffered its loss in Zimbabwean currency. Furthermore, the first defendant argued that any form of compensation, if any, should not relate to new goods since the goods stolen were old (i.e. 2 years old).

There is no dispute that the loss affecting the plaintiff occurred. There is also no dispute that at the time of the loss, 18 April 2008, the multi-currency system was not yet born. Having established that as a result of the breach of contract, by the first defendant, the plaintiff suffered a loss for which it wants to be compensated, this court has a duty to determine what fair or adequate compensation should be given to the plaintiff.

I believe that, taking into account earlier court decisions (i.e. Makwindi Oil Procurement (Pvt) Ltd v National Oil of Zimbabwe 1988 (Z) ZLR 482 (SC); Watergate (Pvt) Ltd and Commercial Bank of Zimbabwe (SC78-05); and Fabiola v Louis HH25-09) it would not be in the interests of justice for this court to deny the plaintiff the relief it seeks just because the loss was suffered in Zimbabwean currency – which currency is no longer in use. We have, in casu, a situation where, notwithstanding the fact that the plaintiff suffered its loss in Zimbabwean currency, it has been able to put forward a fair value to its loss in foreign currency. The only other challenge to that value is that it relates to new goods. That, in my view, is a misplaced argument because all what is required is fair and adequate compensation for the plaintiff. The main thrust should be to address the loss suffered fairly and adequately. To that end, I can only reiterate the point by quoting MAKARAU JP…, when, in Fabiola v Louis HH25-09, she said the following -

“It appears to me that the issue I have to determine is whether to extend the approach that has been taken in the Makwindi case 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 fully associate myself with the above and find the same applicable to this case. I would, accordingly, find it difficult to deny the plaintiff the compensation it has prayed for. My view is that the compensation claimed reflects a fair value of the goods lost by the plaintiff.

I shall therefore order as follows:-

IT IS ORDERED THAT:

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

2. The first defendant be and is hereby ordered to pay the plaintiff the sum of US$5,753=90 as compensation for the plaintiff's goods that were stolen.

3. The first defendant be and is hereby ordered to pay interest on the sum of US$5,753=90 at the prescribed rate from the date of this order; and

3. Whether the plaintiff is entitled to claim hire charges from 1 February 2009 in foreign currency and the amount of the hire fees in question

The submission by counsel for the defendant was that as the hire fees were denominated in Zimbabwe dollars they could not be charged in foreign currency after the introduction of the multicurrency regime without the consent of the defendant.

It seems to me that the submission is without merit. Clause 6 of the Contract of Hire obliges the hirer to pay the hire rates of the goods during the time the goods are in its custody. The hire rates are computed on a daily basis. The functional currency regime from 1 February 2009 was the multicurrency regime. The defendant received invoices for hire charges denominated in United States dollars from 1 February 2009 until summons was issued on 16 February 2011. He did not challenge the rates or currency claimed. He did nothing. The plaintiff had no way of knowing that he was disputing the currency or amounts charged. In fact, he could not make such a challenge as he held the view that the goods had been returned. In any event, I agree with the sentiments expressed by MAKARAU JP…, in Kwindima v Mvundura 2009 (1) ZLR 168 (H)…., that -

“The court has 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 the currency is the foreign currency as opposed to 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 the plaintiff the redress he or she seeks.”

The defendant did not challenge the computation so ably made in evidence by Geraldine Mountford of US$1,340= per month. I am satisfied that the plaintiff is entitled to that amount.

It is clear that the defendant does not have the outstanding scaffolding equipment in his possession. It was obvious from Norman Kapofu's testimony that the equipment co-mingled with that of J and K. He is therefore not able to return the equipment. I will therefore order that he pays the plaintiff the value of the outstanding equipment.

Accordingly it is ordered that:

1. The defendant shall pay to the plaintiff the sum of US$1,340= per month as hire charges for the outstanding scaffolding equipment from 1 February 2009 to 1 February 2013, being the date of judgment.

2. The defendant shall pay to the plaintiff the sum of US$30,771=55 being the value of the outstanding scaffolding equipment.

DISPOSITION

The respondent conceded in the court a quo that the deposit of Z$250,000= made by the appellant into the account was sufficient to enable the respondent to submit the appellant's application.

The question before the court, however, is what sum constitutes the value of the appellant's loss.

Whether or not the appellant would have obtained payment from the Reserve Bank of Zimbabwe of the amount of foreign currency it required from the Zimbabwe dollar equivalent paid to the respondent is not the issue, as what it sued for was the loss of the chance. It is also not certain that even if the application had been submitted to the Reserve Bank of Zimbabwe in time the latter would have paid any foreign currency to the participating growers nor is the extent of the payment capable of exact calculation. Nevertheless, the failure by the respondent to file the application with the Reserve Bank of Zimbabwe left the appellant in the invidious position of having no basis to approach the Reserve Bank of Zimbabwe for payment under the scheme. The result is that the appellant is unable to make any meaningful suggestion on the quantum of damages that this court should award in these circumstances. That notwithstanding, this court should strive the best it can to assess damages in this matter. I would respectfully associate myself with the remarks of HOLMES JA in Anthony and Anor v Cape Town Municipality 1967 (4) SA 445 (A)…, to the following effect:

“I therefore turn to the assessment of damages. When it comes to scanning the uncertain future, the Court is virtually pondering the imponderable, but must do the best it can on the material available, even if the result may not inappropriately be described as an informed guess, for no better system has yet been devised for assessing general damages for future loss.”

I also wish to associate myself with the sage words of SCHUTZ JA in De Klerk v ABSA Bank Ltd & Ors 2003 (4) SA 315…, wherein he stated:

“The second consideration is this. If, as may be found to be the case, an unlawful negligent (or, a fortiori, a fraudulent) mis-statement has resulted in the plaintiff being placed in the invidious position of having to ask the Court to assess, with all the difficulties inherent in the exercise, the value of his lost opportunity of investing elsewhere, the Court should not be too astute to entertain dire and pessimistic speculations emanating from the defendants that the plaintiff may even be worse off if he had not been culpably misled into making the investment that he did.”

Mindful of the caveat in the above authorities, with which I wholeheartedly agree, not to be too pessimistic as to the appellant's chances in benefiting from the retention scheme, it therefore remains for this court to assess the damages due to the appellant. The object of damages for breach of contract in our law is to compensate the aggrieved party for his actual pecuniary loss, and it is an accepted principle of the law of damages that if he can prove none he is not entitled to any damages. So that one may appreciate how this branch of the law has evolved over the years it becomes necessary to examine persuasive decisions of the courts in South Africa courts over a period of almost a century. The first seminal case on the issue is Steenkamp v Juriaanse 1907 TS 980, wherein INNES CJ…, said:

“We should adopt the principle that where a plaintiff claims damnum, whether on contract or on tort, if no damnum be proved he should not, as a general rule, save in certain excepted cases which do not arise here, be entitled to judgment. To my mind, when a plaintiff comes into Court simply to claim damages, and no damage is proved, he ought not to obtain a nominal judgment. There is Roman-Dutch authority to support the ruling of the late High Court, and I think we should decide to follow it.”

In Wheeldon v Moldenhauer 1910 E.D.L 97 KOTZE JP made remarks to the following effect:

“…, But there are many cases where a person has been injured by another's breach of contract and where it is impossible to prove specific damage. In such cases, it would be unjust to say that it is left to the caprice of the person who has undertaken to do or not to do something to fulfil his obligation or not as he pleases, and in this way the creditor would be entirely without any remedy, and would be prevented from enjoying the benefits which he had stipulated for himself in the contract. In my opinion, this is not in accordance with the law. I am still of that opinion, and I find several decisions of the Supreme Court of this colony which recognise a plaintiff's right to nominal damages for breach of contract.”…,.

A broader examination of case authority would tend to show, however, that the courts in South Africa differed fundamentally on the principle of the need to award nominal damages and the guiding principles as to when such damages were available to a plaintiff. One school of thought appeared to have favoured the award of nominal damages as a matter of course where an injury had been established but the plaintiff had failed to establish damages. The other school of thought was that damages should not be awarded in the absence of proof of damages. In the latter case, nominal damages were awarded where the plaintiff sought to establish a right or claimed specific performance and damages were claimed in the alternative. In the absence of proof of damages, the court would award nominal damages. An instructive example of the court's approach in the latter case is Farmers' Co-operative Society (Reg) v Berry 1912 A.D. 343, wherein INNES J said…,:

“…,. The present suit is not in the main for damages, but for an order for specific performance as a test of the defendant's right to disregard the regulations of the society. The claim for damages is only in the alternative. It does not seem to me, therefore, to fall within the authority of the cases quoted; and if it should appear that the defendant cannot specifically perform his contract, then, in the absence of exact proof of loss, this is certainly a case where nominal damages might properly be given.”

In Solomon v The Alfred Lodge 1917 CPD 177 KOTZE J stated…,:

“…,. But there are many cases where it may be evident that a person has sustained loss through another's breach of contract, and where it is impossible to prove specific damage. In such cases, it would be unjust to say that it is left to the caprice of the party, who has undertaken to do or not to do something, to fulfil or break his contract as he pleases, and leave the other party entirely without remedy. Where, therefore, from the evidence or the nature of the case, it is plain that some damage, though its amount cannot be definitely ascertained and proved, has been sustained through the breach of contract, the plaintiff will be awarded a small or trifling sum-exiguam summam - as Voet 45, 1, 12 terms it, or, as we would call it, nominal damages. Now, the present case appears to me to fall within this rule.”

It is interesting to note that in Solomon v The Alfred Lodge 1917 CPD 177, KOTZE J awarded the appellant an amount of one shilling as nominal damages on a claim for damages wherein the plaintiff had been expelled from an unregistered benefit club. The loss to the plaintiff was the benefit that membership in the club entitled her to. It was considered that a trifling sum, by way of compensation, would be appropriate in the circumstances of the case. The award for nominal damages in that case was obviously made given the case where no actual monetary loss was occasioned to the plaintiff as a result of the breach of contract on the part of the defendant.

In Turtle v Koenig 1923 CPD 367, the plaintiff sued for damages arising out of the cancellation of a written agreement of sale in respect of the defendant's interest in a hotel. The defendant breached the contract and sold his rights therein to a third party. The plaintiff sued for damages arising from the breach. SUTTON AJA had occasion to consider the question of damages in the absence of proof of such damages by a plaintiff. He stated the following…,:

“Now, there has been a great deal of argument on the question as to whether the Court is entitled to grant damages in a case where there has been a proof of a technical breach of contract. This action is purely one for damages; it is not one for specific performance or a declaration of rights; it is purely an action for damages, and to my mind the case I should follow is that of Steenkamp v Juriaanse (1907, T.S. 980). The two judges who decided that case were ROSE-INNES CJ and SOLOMON J, and it seems to me it is a case which is likely to be upheld by the Appellate Division. In that case, the Court laid down that when an action is brought solely for damages and not to establish any right which has been violated by the defendant, the plaintiff must prove that he has actually sustained damage and that in the absence of such proof he will not be entitled to judgment for nominal damages. The matter was fully gone into in that case.”…,.

And later on, at p 371-372:

“It seems to me too that the case of Wheeldon v Moldenhauer (1910, E.D.L. 97) is not inconsistent with the case of Steenkamp v Juriaanse. It is true that there are cases in our Courts dealing with the question of nominal damages which are not very helpful or harmonious, but the modern tendency is it seems to me not in favour of granting nominal damages as that term is understood in England. The whole tendency of our recent decisions is not in favour of adopting the English rule of granting some damages because there has been breach of contract.

In the early days, there were some cases in our Courts where normal damages were granted in the absence of any proof of damages, but the modern authority is against such decisions.

According to the decision in Wheeldon v Moldernhauer (supra) where it is clear that some damages have been sustained but the Court cannot say how much; where no definite amount has been proved; then the Court is entitled to grant some damages called nominal damages. That is not what the English Courts intended by nominal damages. In the case of Wheeldon v Moldenhauer, KOTZE JP held that as the plaintiff had not proved what amount of damage he had suffered, but had proved that he had sustained some damage, which, however, could not be properly fixed, he was under the principles of the Roman Dutch Law, as followed in South Africa, entitled to nominal damages.”

The position appears now settled in South Africa that the court cannot award damages to a plaintiff who has failed to prove damages where the claim was purely for damages and no other form of relief. This approach finds confirmation in the case of Hersman v Shapiro & Co 1926 T.P.D 267. At p 379 STRATFORD J has this to say:

“Monetary damage having been suffered, it is necessary for the Court to assess the amount and make the best use it can of the evidence before it. There are cases where the assessment by the Court is very little more than an estimate; but even so, if it is certain that pecuniary damage has been suffered, the Court is bound to award damages. It is not so bound where evidence is available to the plaintiff which he has not produced; in those circumstances the Court is justified in giving, and does give, absolution from the instance. But where the best evidence available has been produced, though it is not entirely of a conclusive character and does not permit of a mathematical calculation of the damages suffered, still, if it is the best evidence available, the Court must use it and arrive at a conclusion based upon it.”

And yet the court seems to have been inconsistent in its approach as exemplified by the dictum in Versfeld v South African Citrus Farms Ltd 1930 A.D 452…, by STRATORD JA as follows:

“…,. On appeal, Mr Buchanan relied upon a principle in the assessment of damages exemplified in the case of Turkstra Limited v Richards (1926 T.P.D.276) and thus stated:

“When there is a finding or an admission that damage has been caused in a monetary amount, the court must do its best to assess the amount on such evidence as is available, and you cannot non-suit a plaintiff because, in the nature of things, the damage cannot be computed in exact figures.”

In Du Plessis v Singer 1931 CPD 105 GARDINER JP stated…,:

“But even if cancellation was not justified, and the plaintiff must be held bound by the lease, he would, in my opinion, be entitled to claim damages for not getting occupation of part of the leased premises, and his remedy is not confined to a remission of part of the rent - see Pothier, Contract de Louage (sec. 67), Voet (19.2.26). Here, in fact, he is not claiming a declaration that the lease is cancelled, but is claiming damages for not getting possession. If he gave prima facie proof that he did not get possession of part of the premises, and if he showed that he sustained damages thereby, absolution should not have been granted. On the evidence, it is not possible to arrive at any exact estimate of the damages he suffered, but that he did sustain some damages, was, I think, established. At the least, therefore, he should have had nominal damages.”

On a reading of the various South African cases, one discerns a distinct impression that the courts have accepted that the principle of nominal damages is available to a plaintiff in certain circumstances and that it is not necessarily available to a plaintiff who has proved a technical breach of contract and is unable to prove damages. It is a concept derived from the English law although its application did not follow the English Law, and thus in the later cases there appears to be an attempt on the part of the courts to adhere to the English Law in applying the principle on the awarding of nominal damages.

There has been much debate within the courts as to when a plaintiff should be awarded nominal damages, and it is not exactly clear, despite the debate, both from the courts and jurisprudential authors, as to whether or not nominal damages should be awarded to a plaintiff who has proved breach of contractual obligations and has suffered loss, but has not proved the extent of the damaged suffered. In their book Law of Damages the learned authors VISSER and POTGIETER state thus:

“Despite opposition, nominal damages were also awarded for breach of contract. Cases where a small amount of damages was awarded should not really be cited as support for the concept of nominal damages. In some instances it was held that the court may not award nominal damages unless an action is instituted to vindicate a right which will have some value in future or unless breach of contract was intentionally committed. The availability of an action for nominal damages upon breach of contract has been confirmed by the Appellate Division but several authors express doubt whether this is still the position. They state that since 1935 there has been almost no reported cases of nominal damages and that a plaintiff who has not proved his damage is not entitled to any compensation. It is probably correct to argue that nominal damages have no place in our law, but until the Appellate Division finally confirms this view, it cannot be concluded that nominal damages have disappeared.”…,.

CHRISTIE, in his book The Law of Contract in South Africa…, appears to favour a different approach to the question of damages wherein the plaintiff has failed to establish any damages. This is what he has to say:

“The question whether, when damages cannot be proved, nominal damages may be awarded, has caused some difficulty, but the present law can be stated with reasonable certainty. Early cases in the Cape and Transvaal adopted, not expressly but quite clearly, the English practice of awarding purely nominal damages (10c or so) sometimes as a peg on which to hang costs, sometimes with each party paying his own costs, and sometimes with costs to the defendant, without distinguishing between the cases where the plaintiff has suffered no loss, cases where it is clear he has suffered some loss but it is impossible to say how much and cases where the plaintiff's concern is to establish a right.

This practice was defended by KOTZE CJ in Stow, Jooste & Mathews v Chester & Gibb (1890) 3 SAL 127, but it did not long go unchallenged. In Weber v Africander GM Co (1899) 16 CLJ 128 (SAL), GREGOROWSKI CJ said:

'It is true that in England nominal damages are sometimes awarded where there has been a breach of contract without damage, but our law requires a definite damnum to give rise to an action for damages. The case where a right which may be valuable in future is denied is the only case where damnum would be assumed in consequence of an unlawful act.'

This distinction between an unsuccessful attempt to prove loss, where the plaintiff should fail, and the establishing by an award of nominal damages which may become valuable in the future became accepted law in the Transvaal in a line of cases of the former type. Referring to some of these cases in Farmers' Co-op Society (Reg) v Berry 1912 AD 343 352 INNES CJ gave them the Appellate Division's approval: 

'But the rule laid down in these cases was in terms stated to be subject to certain exceptions, and it was a rule applicable to claims for damnum alone. The present suit is one not in the main for damages, but for an order for specific performance as a test of the defendant's right to disregard the regulations of the society. The claim for damages is only in the alternative. It does not seem to me, therefore, to fall within the authority of the cases quoted; and if it should appear that the defendant cannot specifically perform his contract, then, in the absence of exact proof of loss, this is certainly a case where nominal damages might properly be given.'

Cases of the second type, like Berry's case, where nominal damages may appropriately be given to establish a right, are rare because a plaintiff seeking such relief will more frequently ask for a declaration of rights, but Berry's case makes it clear that he is not obliged to adopt that course.

Since Berry's case, it can be accepted that the early Cape and Transvaal cases referred to at the beginning of the previous paragraph are no longer good law, and our courts are entitled to award nominal damages in the English sense of 10c or so only for the purpose of establishing the plaintiff's rights.

But nominal damages in the different sense of a token payment of ordinary damages (R20 or so) may be awarded when the plaintiff proves breach causing him loss but is unable to prove the amount of the loss or that it is substantial. KOTZE JP developed this principle in a series of cases in the Cape and Eastern Districts, which have been followed in those divisions. Founding on Voet 45 1 12, he said in Wheeldon v Moldenhauner 1910 EDL 97 101:

'Here we have a distinct authority for the view that, where there has been a breach of contract, and the plaintiff is unable or finds it difficult to prove what loss he has sustained, or the extent of that loss, it does not follow that he must fail in his claim, for the Court may award him merely a trifling sum (exiguam summam), that is, nominal damages. This will certainly be true where it is clear that some damage, however slight or unascertainable, has been sustained by the plaintiff.'

The last sentence of this passage is most important, for, in cases to which those words apply, damages of the order of R20 have frequently been awarded; See Solomon v The Alfred Lodge (supra); Emslie v African Merchants Ltd 1908 EDC 82, 95; Kelly v Kelly 1913 EDL 153,164; But where the plaintiff has failed to prove that he has suffered any loss at all, no damages have been awarded. See McCallum v Cornelius and Hollis 1910 NPD 52,62; Turtle v Koening 1923 CPD 367, 372. Thus understood, there is no conflict between these Cape and Eastern District cases and the Transvaal cases approved in Berry's case.”…,.

The seminal case on the entitlement of a plaintiff to be awarded damages for the loss of a chance is Chaplin v Hicks [1911] 2 K.B 786 and the appellant's contention that the respondent had failed to prove damages, and, in the circumstances was only entitled to nominal damages was rejected by the court. LORD FLETCHER MOULTON said:…,.

“Mr McCardie does not deny that there is a contract, nor that its terms are as the plaintiff alleges them to be, nor that it is enforceable, but he contends that the plaintiff can only recover nominal damages - say one shilling. To start with, he puts it thus: where the expectation of the plaintiff depends on a contingency, only nominal damages are recoverable. Upon examination, this principle is obviously much too wide; everything that can happen in the future depends on a contingency, and such a principle would deprive a plaintiff of anything beyond nominal damages for a breach of contract where the damages could not be assessed with mathematical accuracy. The learned counsel admitted that it was very difficult to formulate his proposition, but he ultimately said that where the volition of another comes between the competitor and what he hopes to get under the contract, no damages can, as matter of law, be given. I can find no authority for that proposition; in fact the decision in Richardson v Mellish [11] (1824) 2 Bing. 229 is obviously in the teeth of it. I do not rely, however, on that or any other authority; I would rather consider what is the right of a plaintiff as regards damages for breach of contract, and regarding it as a matter of broad principle, I do not think that any such distinction as that suggested by Mr McCardie can be drawn….,.

But there is no other universal principle as to the amount of damages than that it is the aim of the law to ensure that a person whose contract has been broken shall be placed as near as possible in the same position as if it had not. The assessment is sometimes a matter of great difficulty.”

This case was approved and applied by ASWORTH J in Hall v Meyrick [1957] 2 Q.B 455…, whereat it was stated:

“Any assessment of damages in a case of this sort is bound to appear somewhat arbitrary, but I have endeavoured to find a figure which fairly represents the plaintiff's loss after giving due allowance for all the uncertainties. The sum for which I give judgment in favour of the plaintiff is 1,250 pounds.”

The courts, both in this country and in South Africa, have recognised the principle of prospective loss in restricted instances. One such instance relates to the loss of a chance. It can be said that the issue relating to a claim for damages following upon the loss of a chance appears to be on a different footing and that following upon the dictum in Chaplin v Hicks [1911] 2 K.B 786 the approach of the courts has been consistent. The loss of a chance is, however, described as a form of prospective loss which has been recognised within the English jurisdiction and that of South Africa.

So far as I am aware, the present case is the second case within this jurisdiction where the court is being asked to make an award of damages so that a plaintiff who has suffered damage does not walk away empty handed due to a failure to prove damage that is quantifiable. The first case decided within this jurisdiction is A.G. Hendrie & Co Ltd v McGarry 1938 SR 209 in which HUDSON J stated…,:

“Bearing in mind in the present case that the plaintiff's agency was revocable, that the hotel was not a readily saleable property and that Gammon might have leased or purchased another hotel, I have come to the conclusion that in this case too the damages must be assessed at a figure considerably lower than the amount of the commission. Exact computation of damages is not possible in the circumstances of the case, but there has been a deliberate breach of contract and the damages must be substantial, and not merely nominal, in spite of the impossibility of exact assessment: Chaplin v Hicks (1911, 2 K.B. 786). After giving consideration to all the factors involved in the case I have come to the conclusion that the damages should be assessed at 75 pounds.”…,.

 In the court a quo, it was common cause that although the Reserve Bank of Zimbabwe had not paid the major growers; it had paid out small claims not exceeding USD1,000=. The appellant appointed the respondent as its agent in the facilitation and implementation of its application under the scheme. When it lodged its application with the respondent and paid the local currency stipulated it acquired a benefit to participate, and, at the conclusion of the season, receive a value in foreign currency. It thus acquired an advantage to which a value could be attached. It is therefore the duty of the court to estimate the pecuniary value of that advantage.

The court must remain alive to the possibility that the Reserve Bank of Zimbabwe may be able to satisfy a trial court that it had no obligation to meet the claims of the tobacco growers who participated in the scheme, or that in the event that a court found in favour of the farmers, the Reserve Bank of Zimbabwe would seek statutory protection to avoid payment under the scheme. The fact that payment was made to farmers with smaller claims would point to a lack of capacity to pay as opposed to reluctance to pay. Finally, the court has to consider that even though the applicant funded its account with the required local currency, it was not transmitted to the Reserve Bank of Zimbabwe but remained in the account and that the respondent offered to pay it back.

In view of the fact that the appellant did not pay to the Reserve Bank of Zimbabwe, not through its fault, I intend to discount the sum claimed by fifty percent, resulting in the sum of USD30,972=40. In addition, in view of the seeming difficulties of the Reserve Bank of Zimbabwe to pay, as exhibited by the delay in payment, I intend to further discount the sum. An additional discount of fifty percent on the discounted sum would appear to me to meet the justice of the case. Such discount would allow an award of USD15,486=20.

The appellant did not claim interest and the order that I will issue will not specify interest.

The above method of computing the damages due to the appellant is admittedly arbitrary but I cannot think of any better way of assessing damages in this case. Although the appellant did not succeed in the claim for the sum of USD61,944=81 that it was seeking from the respondent, it has established not only the liability but an award in a specified sum. In the event, the appeal must succeed.

In the result, it is ordered as follows:-

1. The appeal is allowed with costs.

2. The order of the court a quo is set aside and substituted with the following:

2.1 Judgment be and is hereby granted against the defendant in favour of the plaintiff in the sum of USD15,486=20 together with interest thereon at the prescribed rate with effect from the date of this judgment.

The background facts are that the plaintiff expressed interest in Stand 5233 Salisbury Township Lands measuring 3,309 square metres which is the property in dispute.

The property belongs to the estate of the late Robert Eric Rae.

An agreement of sale was concluded, on 22 October 2009, between the plaintiff and the Property Shop, the Estate Agent firm which handled the transactions, for the sum of US$220,000.

On mode of payment, the agreement provided as follows:

“The Purchaser shall pay cash deposit of US$100,000 [one hundred thousand United States Dollars] of which US$30,000 [thirty thousand United States Dollars] shall be non-refundable] upon signing of the agreement of sale.

The purchaser shall pay the sum of US$60,000 [sixty thousand United States Dollars] on or before 30 November 2009 and the balance of US$60,000 [sixty thousand United States Dollars] on or before the 31st December 2009.”

On 17 May 2013, the plaintiff issued summons against the defendant claiming $53,432= in damages for breach of contract.

On the claim for US$25,000=, being lost rental income, the court a quo held that the appellant could not escape liability as the loss flowed naturally from the breach, although it was indirect. Moreso, the appellant had not shown that the premises could have been repaired much sooner than the five (5) months it took for the respondent to complete the repairs.

On the damages arising out of loss of income, counsel for the appellant argued that the court a quo erred in awarding damages arising from loss of income when there were tenants who were willing to rent the premises for the sum US$4,500= a month after the lease agreement had terminated. She further submitted that there was no evidence to show that the appellant caused the delay in the respondent's re-leasing of the premises and was therefore liable for the loss….,.

Whether the court a quo erred in awarding the claim for damages for loss of rental income

Having established that the appellant has not been able to show why this court should interfere with the factual findings of the court a quo that the damage was beyond fair wear and tear, l move on to make a determination on the claim for loss of rentals, which is a claim for damages.

In Rowland Electro Engineering (Pvt) Ltd v Zimbank 2007 (1) ZLR 1 (H), GOWORA J…, stated as follows:-

“The rationale for awarding damages to an aggrieved party, based on a breach of contract, is to place that party in the position he would have occupied had a breach not occurred by the payment of money and without causing undue hardship to the defaulting party.”

The appellant argues that the respondent's loss did not flow directly from the breach.

This argument is difficult to follow. Once it is accepted that the appellant breached the lease agreement, then the respondent was entitled to damages that arise from the breach. The South African case of Monyetla Property Holdings v Imm Graduate School of Marketing (Pty) Ltd and Others (10083/2012) [2013] ZAGPJHC 210 aptly underscores that point. It provides the following…, judgment:

“In a claim for damages arising out of the breach of contract, the plaintiff may claim damages for all the damage flowing from the cause of action. He or she must claim, in a single action, compensation for all the damage he or she has already suffered and the prospective loss which he reasonably expects to suffer in the future. In Coetzee v SA Railways & Harbours 1933 CPD 565, GARDNER JP (with whom WATERMEYER J concurred) examined the English cases and said:

'The cases, as far as I have ascertained, go only to this extent, that is a person who sues for accrued damages, must also claim prospective damages, or forfeit them.'”…,.

A. A. ROBERTS 'Wessels' Law of Contract…, also states as follows;

“…,. If, however, it can be proved to the Court that the profits were reasonably to be expected, and would certainly have been realized, but for the breach of contract, they form as much a part of the damages as any other loss…,.”

In Minister of Safety and Security v Van Duivenboden 2002 (6) SA 431, NUGENT JA…, stated that:

“A plaintiff is not required to establish the causal link with certainty but only to establish that the wrongful conduct was probably a cause of the loss, which calls for a sensible retrospective analysis of what would probably have occurred, based upon the evidence and what can be expected to occur in the ordinary course of human affairs rather than an exercise in metaphysics.”…,.

The appellant also argues that the court a quo erred in awarding a claim for remote damages, without any mitigation, for the loss of rentals.

In Rowland Electro Engineering (Pvt) Ltd v Zimbank 2007 (1) ZLR 1 (H), GOWORA J…, stated that:

“It is trite that a plaintiff seeking to claim damages based on breach of contract has a duty to mitigate his loss.”

The appellant's contention is that the granting of the claim for loss of rentals was misplaced since it had made an offer to repair part of the premises and that there were tenants who were willing to rent the premises for US$4,500= after the termination of the lease.

What is clear from the record is that after the conditional offer to repair part of the premises, the respondent wrote to the appellant indicating that they intended to ensure that remedial action was taken before the property could be re-let as engineers had confirmed that the damage caused by the chemicals was not merely cosmetic or on the surface. The respondent also acknowledged the offer to rent the premises but it also indicated that it was not willing to let the premises until they were occupiable.

The judgment of the court a quo shows that the Radiation Protection Authority of Zimbabwe [“RPAZ”] report made a conclusion that the premises had strong odours and sticky floors. It also states that as at February 2014, the premises were not fit for use, before recommending a cleaning up of the place. In light of this, the fact that there was a tenant willing to rent out the place could not preclude the respondent from claiming for loss of rentals as a result of breach of contract. This is because the premises had been declared not fit for use especially in light of the effects of the chemicals to human health. This is one of the reasons why the respondent wanted to ensure that the premises were in a good condition before it could lease them.

Given the circumstances of the case, the court a quo was correct in allowing the respondent's claims. The respondent's ability to mitigate the loss was inhibited by the fact that the premises were said to be unfit for use due to the structural and health effects of the chemicals.

In conclusion, l would find that the appellant has not been able to show how the findings of the court a quo were grossly unreasonable in the sense that no reasonable tribunal applying its mind to the same facts would have arrived at such a conclusion given the evidence that was before it.

In the result, l make the following order:

The appeal be and is hereby dismissed with costs.

In Gort v Tinto Industries Ltd 1985 [1] ZLR 66 [HC]^, SAMATTA J said…:

“Direct damage is that which flows naturally from the breach without other intervening cause and independently of special circumstances, while indirect damage does not so flow.”

Consequential or indirect damages should, objectively, be in the contemplation of the parties at the time of the contract.

In the present case, if the defendant moved out of the leased premises, which it knew existed for hire, but left them in an un-inhabitable state, it cannot escape liability for the loss of the rent by the plaintiff during the period that it had taken to fix the premises back to their letteable state. That loss flowed naturally from the breach - albeit indirectly.

The plaintiff claims judgment in the United States dollars.

United States dollars are the functional currency at this material time. There is ample authority to show that the plaintiff is indeed entitled to payment in the currency that is functional at the material time. The Supreme Court, in the case of Watergate (Pvt) Ltd v Commercial Bank of Zimbabwe SC70-06 held that:

“…, the legal position is that a party is entitled to payment in foreign currency if he can show that a judgment in that currency would most truly express his loss, and, therefore, most fully compensate him for that loss. That was the rational in the case of Makwindi Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe 1998 (2) ZLR 482 (SC) where it has held that 'justice requires that a plaintiff should not suffer by reason of a devaluation of a currency…,.“

NDOU J, in the case of Joseph Marshall Stuart v NRZ HB07-14, also held the same view.

It is therefore an accepted view that contracts that were entered into during the Zimbabwean dollar era, and sounding therein, can be paid out in the functional currency - which is the United States dollar.

The first defendant's position was that there was never a valid agreement between it and the plaintiff, and, alternatively, that if there was one, the plaintiff had breached the terms and conditions of such an agreement justifying its cancellation and retaining any moneys paid by the plaintiff as damages.

The defendant, Steward Bank, applies for absolution from the instance at the close of the plaintiff's case in matter founded on damages for breach of contract.

The plaintiff is Mucal Investments. In its summons it seeks payment of US$553,544=42 by the defendant. The amount is sought as damages for loss of business between January and July 2013 resulting from the plaintiff's bank account having been frozen by the defendant under circumstances which will be elaborated. Interest is also sought at the prescribed rate from the date of the summons to date of full payment. In addition, costs of suit are further sought as between attorney and client.

The damages are founded on the allegation that it was a tacit term of the agreement between the parties that the defendant would honour all cheques and negotiable instruments and transfers properly drawn.

The plaintiff, which was then engaged in the business of supplying vegetarian products states through its Director, Lion Chirove, that it could not access its account to effect business payments despite demands being made to the defendant and a court order having been obtained.

The plaintiff company was founded in 2006 and its Directors were then Avila Zvenyika and Lion Chirove. In May 2010, two brothers, Bruce Smith and Ahmad Smith, who had joined them in a business partnership, were made directors of the company. As explained in a “to whom it may concern letter” written in October 2010, being non-Zimbabweans and in the absence of a valid work or residence permit, the new partners could not sign on any Bank account. The letter explained that they had been temporarily removed from the company's CR14 form but that they were, in essence, still directors pending regularisation of their permits.

In September 2011, the plaintiff moved its banking account from CBZ to the defendant Bank.

At the time of opening the account its signatories were Lion Chirove and Avila Zvenyika. Mr Bruce Smith was however made a signatory in place of Mr Lion Chirove in a letter to the Bank dated 30 April 2012. It advised that a Board meeting had resolved to appoint him together with A Zvenyika. However, on 19 November 2012, following a dispute with the Smith brothers, Avila Zvenyika, the company's administrator, had written to instruct the Bank not to process any transactions unless it was authorised by the two Directors as captured on the CR14 form, namely, herself and Lion Chirove.

From the plaintiff's testimony, what flamed the dispute emanated from the fact that the Smith brothers had clandestinely registered a company in South Africa giving themselves a 100 percent shareholding when the agreement had been to go 50-50 with Mucal Enterprises. They had also registered a company in Zimbabwe giving themselves a 70 percent shareholding and the plaintiff and its director 30 percent. The dispute fully ignited when the Smith brothers proposed that a shareholder's agreement be signed between Mucal Investments and the two brothers as a separate agreement. Under the agreement, Mucal Enterprises would be owned by the Smith brothers in their South African company. The plaintiff's directors, Lion Chirove and Avila Zvenyika perceived this move as designed to swallow and push it out of business.

It was then that the instructions were given to the Bank regarding the change of signatories whereby Mr Chirove was reinstated as signatory in place of Mr Bruce Smith.

He further testified that on 21 January, when he tried to effect telegraphic transfers for the sum of R98,000= to a South African supplier (Fry Group), the defendant refused to honour the transaction, and, instead, froze the account. However, it emerged, in cross examination, that the reason why the Bank froze the account was that it had received instructions from Mr Bruce Smith that he had been improperly removed as a director and signatory.

The plaintiff's position is that the internal dispute was none of the Bank's business and that it was its responsibility to abide by the instructions of the directors as captured on the CR14 form. This showed the two directors as himself and his wife Avila Zvenyika.

Out of an abundance of caution, the defendant, on the other hand, had frozen the account until the dispute had been solved. At the time, the plaintiff held $24,797=35 in its account as per bank statement presented as Exhibit S.

That the dispute also set off a chain of events is not denied. Nonetheless, the plaintiff's position is that had the Bank risen above the dispute in light of its contractual obligations to its “true” client, none of the losses subsequently suffered would have occurred.

The chain of events is crucial to grasp as it places crucial variables to the otherwise linear causation of losses suffered as articulated by the plaintiff. The events were as follows:

1. On 23 January 2013 the Bank refused to effect the transactions following the representations made to it by Mr Bruce Smith that he had been improperly removed as signatory.

2. On 6 February 2013 a provisional order was sought by the plaintiff against the defendant in which it sought interim relief compelling the Bank to make accessible to “applicants directors” funds held under account 60101051739101 and to allow the free and unfettered transaction and operation by the applicant of its bank account. The provisional order was granted by consent of all parties. The final order sought to declare Lion Chirove and Avila Zvenyika as having the sole and exclusive right to transact under the relevant account.

Meanwhile, on this very same date, as the above order was being granted, the Registrar of Companies wrote to Mrs Zvenyika stating that they had received a complaint of fraudulent activities concerning removal of two directors (the Smith Brothers) without their knowledge and consent. She was asked, as company secretary, to clarify the position.

Criminal proceedings were also pending in the Magistrate's Court against the plaintiff's director, Lion Chirove, for fraud.

3. On 14 February 2013 the Smith brothers applied for an interdict, under HC882/13, to prevent Lion Chirove and Avila Zvenyika from accessing the account. The plaintiff's testimony was that this order was not granted as the court took the position that it was not possible to interdict an order granted by consent. Under cross examination it emerged that the crucial reason was also to provide the plaintiff a chance to seek for a final order articulating the rightful directors since what had been granted was simply a provisional order authorising “directors” to access the account.

4. On 11 March 2013 one Martha Chakanyuka, a Principal examiner in control of companies, signed a statement stating that the CR 14 form signed in October 2010 was fake and that the stamps and signatures were fake. She highlighted the procedures for change of directorship and averred that these had not been followed.

5. On 12 March 2013 Avila Zvenyika, in her capacity as company secretary, then replied stating that the claims were unfounded and highlighting that the company is wholly owned by its two directors, Lion Chirove and herself. She also explained that the two non-shareholding directors had been removed by a company resolution in October 2010. She also stated that the two directors, namely, the Smith brothers, had agreed to be removed back then to pave way for a loan since their immigration papers were not in order. She stated that everything had been done above board.

6. On 13 March 2013 the plaintiff's lawyers had written to the Bank regarding the opening of the account which was still not opened.

7. On 22 March 2013 the defendant's lawyers had written to the plaintiff's lawyers advising them of receipt of the statement made by the Registrar of Companies concerning the anomalies that had been detected. They also advised that the dispute needed to be resolved since the court had granted the order on the 6^th of February on the basis that the CR14 now under dispute had been the correct one. In view of these developments they also pointed out that their client, the Bank, was unable to accede to the request to activate the account.

8. On July 5, 2013 Martha Chakanyuka signed another statement - this time essentially confirming that following certain documents being availed that the CR14 form earlier criticised as improper was in fact proper. She confirmed that the Smith brothers had indeed been removed as directors on 4 October 2010.

9. On 16 July 2013 the plaintiff's directors finally accessed the account having been informed, according to the plaintiff, through a casual encounter with the Bank's manager, that the account had been reopened.

The Plaintiff's perceived loss

The gravamen of the plaintiff's evidence was that over the time when it was not allowed access to its account, it had contracts with several retail supermarkets as a supplier of vegetarian products. These included shops such as OK, Bon Marche and Spar shops. A contract with OK, dated 2010, was placed before the court as Exhibit E. The contract itself however did not indicate the value or volume of business between the parties.

From the OK and Bon Marche shops, the plaintiff valued its business for the relevant period when its account was frozen at $50,000= with a profit of $26,000= after expenses had been paid. Exhibits H1-H6 were handed in. Three of these were statements generated by the plaintiff's director while another three were said to be generated by OK although there was no official verification of these documents.

Also presented were the plaintiff's own calculations of business with the Spar shops (Exhibits G1-G5). However, the plaintiff did not produce any evidence or proof that business was actually being conducted constantly or on a monthly basis.

The plaintiff's director also presented its projections of business it was set to do with TM and Pick n Pay. It said the value lost amounted to approximately $74,000=. In addition, the plaintiff's company had a credit facility with TN Bank for up to $4,000= per month and was doing business with TN Harlequin (Exhibit F).

It terms of lost business, it had also secured an arrangement to supply the Seventh Day community with vegetarian products at its Adventist camp sites. With 52 campsites attended by about 5,000 people per camp annually, the plaintiff's estimation was that it lost a potential of US$5,000= per campsite giving a total loss of $260,000=.

In July 2012, the plaintiff had gotten another product for distribution from Good Hope International Enterprises for soya milk. It alleged that it would have been a sole distributor, and, on arrangement, would have been a regional distributor. However, no proof of this averment was produced. At the time, the plaintiff stated it had received an order by consignment from Good Hope for $30,000=. This would have been serviced from the account.

The plaintiff stated that, overall, it was expecting, during the period its account was frozen, a total of US$495,000= worth of purchases with Good Hope and from this amount $693,000= worth of sales thereby giving it profit of $198,000=. The plaintiff later clarified, in cross-examination, that it was still negotiating this contract and therefore no contract could be availed. However, it had received the order by consignment for $30,000= though, again, no proof was produced. From the Fry's Group, business lost over the seven month period was estimated to $102,712= after expenses.

The company, according to its Director, had also made inroads into the possible supply of meat-free products to Catholic schools around the country under which he estimated it would have made at least $20,000 - $25,000 per month.

All the above was the kind of business the plaintiff said it lost on probabilities. The devastating consequence arising from the defendant's perceived breach of contract was not only loss of income, according to the plaintiff's director, but also termination of contracts.

The distributorship business with the Fry Group was terminated in April 2013 and with Good Hope in September 2013. It lost all its suppliers because it failed to pay them. It lost all its clientele whom it failed to service. It was, according to him, a sole distributor of vegetarian products. It was also working with a “niche market”. It also lost its reputation in the process. By December 2012 the company, according to its director, had grown to 12 employees. Today it has none.

The plaintiff blames the defendant for the sum total of these woes because it could not access its account to conduct its business.

Interrogation of the loss in cross examination

The plaintiff was quizzed by the defendant's counsel…, on the company's financial accounting procedures.

The plaintiff's director conceded that he is fully aware of the need to keep proper books of account by any company. He agreed that such books would indeed vividly indicate the company's flow of business and any profit and loss made. He was also in agreement that annual tax returns would clearly indicate the actual profits made for tax purposes. He said all such documentation existed with respect to the plaintiff company but admitted that they had not been tendered as evidence.

He did not dispute that a Bank can place administrative requirements over those who operate accounts and that it is entitled to refuse access where it has concerns as to the authenticity of any representative. However, he was adamant that the Bank acted improperly, especially as it had been given the necessary information as who the directors were.

The plaintiff's director also confirmed that indeed the Smith brothers had come in as financial partners as the company was going through financial difficulties at the time. Their terms were to be shareholders on a 49-51 percent basis. The other condition was to secure them as signatories to the account.

It emerged from cross-examination that certain monies invested by the Smith Brothers had not been paid back by the plaintiff. The Smith brothers were therefore seeking to protect their investment.

He also agreed that no final order had been sought to the provisional order that had been granted by the court on 6 February 2013. He also conceded that the day that the order was granted, on 6 February 2013, was also the very day that the Registrar of Companies had written to the other director, Ms Zvenyika, seeking an explanation of allegations of possible fraudulent removal of directors. This information had not been before the court at the time that it was granting the provisional order.

He also did not deny that the Smith brothers had also sought an urgent chamber application to stay operation of the provisional order granted by the court on 6 February 2013.

He further agreed that he had not taken any concrete action to actively challenge the statement and that the statement was withdrawn in July against a backdrop of investigations the Registrar had carried out. He did however maintain that the statement was challenged when he was being prosecuted.

Although his view was that the provisional order granted on 6 February 2013 was clear as to its directive regarding the re-opening of the account. He did concede that it was the final order that specifically sought to confirm himself and Ms Zvenyika as the true directors of the company.

He admitted that no action was taken on his part to seek a final order as directed by Justice PATEL in HC882/13 which would have put an end to the dispute at least as way back as March 2013. He also admitted that on the same day that bail conditions were relaxed to allow him to operate the account was also the same day that the Registrar of Companies made the allegation that there was possible fraudulent activity.

The application for absolution

The defendant has applied for absolution from the instance largely on the basis that the plaintiff has essentially failed to make out a case against the defendant that is deserving of a reply. It is also argued that the plaintiff had failed to prove any breach of contract entitling it to special damages.

In terms of general principles on absolution from the instance the case of United Air Charter v Jarman 1994 (2) ZLR 341 (S) condenses the position as follows:

“The test in deciding an application for absolution from the instance is well settled in this jurisdiction. A plaintiff will successfully withstand such an application if, at the close of his case, there is evidence upon which the court, directing its mind reasonably to such evidence 'could or might (not should or would)' find for him.”

The above principle draws on cases such as Supreme Svc (1969) (Pvt) Ltd v Fox Goodridge (Pvt) Ltd 1971 (1) RLR 1; Lourenco v Raja & Steam Laundry (Pvt) Ltd 1984 (2) RLR 151.

The principles have also been canvassed in a number of cases such as Walker v Industrial Equity Ltd 1995 (1) ZLR 87 (S); Standard Chartered Finance Zimbabwe Ltd v Georgias & Anor 1998 (2) ZLR 547 (H); Dube v Dube 2008 (1) 326.

In seeking to put the defendants to its defence, it is argued, by the plaintiff, that the Bank knew who the directors were as these were indicated on the CR14 form. It is also argued that as the account in question was the plaintiff's sole business account it should have been apparent that it would suffer loss if it was not permitted to transact under that account. The dispute, it insists, could have been solved at a later stage. It argues that for reasons such as these, which are common cause, it has done enough to put the defendant on its defence.

The plaintiff also lays emphasis on the fact that at this stage it is not about whether the evidence is true or false. In its view, absolution should only be granted where it has failed to establish an essential element of its claim. The plaintiff emphasises its contractual relationship with the defendant; the fact that the defendant breached the contract. In support of this, the plaintiff points out that the money would have been paid to suppliers and not to themselves.

In opposing absolution from the instance, the plaintiff places reliance on the position articulated in the case of Standard Chartered Finance Zimbabwe Ltd v Georgias & Anor 1998 (2) ZLR 547 (H) that in considering absolution from the instance a judicial officer should always lean in favour of the case continuing. If there is reasonable evidence on which the court might find for the plaintiff, the case should continue.

However, the preponderance to 'lean in favour of' is not the same as saying a judicial officer must always lean in favour of the case continuing. It is in cases where there is doubt that the court should lean in favour of continuing as SMITH J emphasized in Standard Chartered Finance Zimbabwe Ltd v Georgias & Anor 1998 (2) ZLR 547 (H). Where a judicial officer has no doubt in their mind from the evidence submitted, then by all means absolution should be granted. The key issue for consideration therefore is whether sufficient evidence has been placed before the court upon which the court might find for the plaintiff.

Factual and legal analysis

While damages are sought against the defendant as the unitary cause of the loss of business suffered by the plaintiff, the facts informing the claim are far from being one-dimensional.

The evidence that has been placed before the court indicates that an internal dispute and competing claims within the plaintiff company where at the heart of the chain of converging events that led to operational problems for the plaintiff company including the freezing of its account. Yet, only one cause, the freezing of its account is isolated by the plaintiff as leading to his perceived loss.

Just because a plaintiff strongly believes that a factor that he has isolated is the predominant cause of its problems does not exclude other explanations which have a bearing on the matter from being considered by the court in deciding whether sufficient evidence has been placed before it to exclude their impact.

Where a problem is multiply-caused, as in this case, the question of whether or not the court might find for the plaintiff on the evidence adduced, of necessity, depends on whether the evidence placed before the court, on a balance, sufficiently rules out other explanations as causes for the loss suffered by the plaintiff. In other words, if, from the evidence adduced it cannot be inferred, on a balance of probabilities, that the single behavioural event isolated by the plaintiff was the cause of its loss, then the evidence is simply not sufficient. The evidence adduced must, on a balance of probabilities, sufficiently pry apart other variables such as to leave the one the plaintiff relies on as the dominant cause. If, at the close of the plaintiff's case, insufficient evidence has been placed before the court to support an averment, this will not change even if the defendant is put to its defence.

What this court has before it at the conclusion of the plaintiff's case is a convergence of multiple factors, predominantly emanating from events within the plaintiff company that complicated the issue for the plaintiff.

The defendant's actions were largely responsive to such outside stimuli as opposed to being the dictator of them. Also, the defendant's actions, in refusing to release the funds, have to be put in perspective of the events that unfolded.

The Bank's client was the corporation. There was a dispute regarding the directors of the corporation. A criminal complaint was made by a competing director. The Registrar of Companies, at first, also confirmed the allegations of fraud and it was only in July when their initial position was reversed. Although a provisional order was obtained it is instructive that on the very day of its obtainment the dispute escalated rather than abated. The Bank was essentially faced with divergent claims to the account by two feuding parties each claiming legitimacy.

The plaintiff argues that the defendant breached its contract in failing to pay on demand.

Yet, in light of the facts, the Bank would equally have found itself liable to a claim from either of the competing parties to the account for wrongfully paying out of the account or un-authorised payment since each side had laid claim to the account.

There was no breach since its client was the corporation and competing claims had been placed before it by two sides within that corporation relating to its directorship. Only where the dispute was resolved in terms of clarity of directors could the Bank safely pay out. Only a foolish Bank would have paid out to any of the claimants without a final court order as to the true status of each of the claimants.

While the defendant may have acted on the strength of the documents written by the Registrar of Companies it was not the author of these documents.

The plaintiff also rests its argument for dismissal of absolution on the basis that it suffered damages as a result of the breach.

The case of Trust Bank of Africa Ltd v Marques 1968 (2) SA 796 (T) is cited in support of the contention that a Bank which fails to honour cheques when funds are available risks a claim of damages. The plaintiff argues that the contracts it placed before the court were sufficient, namely, those from OK Zimbabwe and the TN credit facility.

Finally, the plaintiff also argues that its loss was not remote.

Special damages are ordinarily regarded in law as being too remote to be recoverable. They are claimable in situations where it can be deduced that the parties actually or presumptively foresaw that they would probably flow from a breach of contract and were within the contemplation of the parties. As stated by GUBBAY CJ…, in United Air Charter v Jarman 1994 (2) ZLR 341 (S) in determining whether they are claimable it is of assistance to look to;

(a) The subject matter and terms of the contract itself;

(b) The special circumstances known to both parties at the time they contracted.

I do not think that damages arising from a quarrel among the directors was within the contemplation of the parties. In any event, the core point remains whether sufficient evidence has been placed before this court to justify such damages.

One crucial manner a purportedly dominant claim, particularly one for damages, is strengthened is by way of statistical evidence to support it.

Being a claim of special damages, the plaintiff had the responsibility to prove its quantum of damages by placing all relevant evidence before the court in order to prove its claim. Such special damages will not be granted if they are too remote.

The defendant argues that the evidence placed before the court was too scanty. No proof of invoices or proof of orders that were received and needed honouring by the Bank were submitted to the court by the plaintiff. These would have provided irrefutable proof of business that was actually lost. Also, the plaintiff did not produce any evidence which would have supported their position that the money that the defendants refused to pay would have been going to suppliers and not to themselves.

In seeking absolution from the instance, the defendant further argues that the plaintiff's books of accounts and tax returns would have been proof of the plaintiff's profitability as alleged by its Director. The plaintiff's director, in cross examination, averred to the existence of these documents but admitted that they had not been brought to court. In its written arguments against absolution the plaintiff then stated that the audited accounts were taken by the Smith Brothers and that the tax returns are filed with the taxman and can always be taken into account in damages.

Even if the plaintiff's argument is accepted that the books were taken away and that the tax returns were filed, it cannot, in my view, escape the responsibility of ensuring that these were placed before the court given that they form the heart of the dispute. It is not for the defendant to go and extract tax returns for the plaintiff. That was clearly the plaintiff's own responsibility. It is also not the plaintiff's averment that the soft copies of the accounts are what was taken. They simply state that the accounts were taken by the Smith brothers.

As argued by counsel for the defendant, where evidence is available that would assist the court to properly quantify damages and it is not produced, then the matter must fail and the defendant must be absolved from the instance. The case of Monumental Art Co. v Kinston Pharmacy (Pty) Ltd 1976 (2) SA 111 was cited in support of this contention.

Also, a party who shies away from producing evidence cannot escape the inference that he knows that such evidence will not be favourable to him. The cases of Ntsomi v Minister of Law & Order 1990 (1) SA 512 (C); Tshishonga v Minister of Justice & Constitutional Development and Anor 2007 (4) SA 135 were cited by the defendant.

If accurate statistical evidence that is representative of the company's steady growth and success of over the years, as exemplified by tax returns, was available, then, it should have been obtained. How else would the court know from the outset that it is not dealing with isolated phenomenon in so far as the plaintiff's claims of a steady growth of the business over a number of years is concerned?

The plaintiff director's own testimonial evidence of growth and projected profits is not the kind of evidence that the court has in mind as constituting “sufficient evidence upon which the court might find for the plaintiff.”

In cases of this nature, where loss of business is alleged, tax returns and audited accounts constitute the type of evidence that would, on the face, constitute a sufficient basis for a claim upon which the court might find for the plaintiff.

Therefore, on the issue of damages for loss of business the strength of the plaintiff's evidence is essentially 'dead in the water' as a result of the failure to place the kind of credible evidence that one would expect of a company as pointed out by the defendant in its application for absolution from the instance.

At the close of the plaintiff's case, the preponderance of evidence did not point to the defendant as having been the actual cause of its loss or even being in any way the major cause of the plaintiff's loss. I am satisfied that there was insufficient evidence on which a reasonable court could or might find for the plaintiff.

The defendant seeks that costs be awarded on a higher scale especially on the grounds that the plaintiff had ample time to put all its evidence together in preparing for trial, and, as such, it has been put through an unnecessary expense.

Costs, in general, recompense a successful party for expenses to which he has been put in defending a claim. They are generally awarded on an ordinary scale. Courts are reluctant to award costs on a higher scale because they are highly punitive.

It would seem to me that the overall weakness of the plaintiff's case has emerged from the totality of having his day in court to present his case as he is entitled to. It would therefore be, in my view, tantamount to exercising hindsight to land him with costs on a higher scale.

The application for absolution from the instance succeeds with costs on an ordinary scale.