MTSHIYA J: In this action the plaintiff prays for the following relief:
1.
The
sum of USD 5 753-90.
2.
Interest
on the said sum at the prescribed rate for the date of service of the summons
to date of payment.
3.
Costs
of suit on attorney and client scale.
The background to the claim is
captured in the plaintiff's declaration as follows:
On 25 October 2005 the plaintiff and
the first defendant entered into a three year lease agreement in respect of the
first defendant's property known as the “boardroom”. The salient feature of the
lease agreement for the purposes of this judgment was that it did not cover the
issue of security. However clause (W) of the lease agreement provided as
follows:
“Other matters not embraced by this
agreement could always be discussed by both parties and streamlined
accordingly”.
In line with the above clause, it is
alleged, the parties agreed that the first defendant would arrange and secure
security for the premises and the plaintiff would pay a certain percentage of
the security charges. The record shows that the plaintiff was invoiced for
security services offered by the second defendant. The first and second defendants,
however, deny that such an arrangement was ever put in place.
On 18 April 2008 the leased premises
were broken into resulting in the plaintiff losing the following goods:
i.
Five
(5) Atec Central Processing Units (CPUs).
ii.
One
(1) CPU Atec casing with CDRom and motherboard less hard drive.
iii.
One
Flat Screen monitor with an LCD screen.
iv.
Samsung
lightscribe DVD and CD burner.
v.
Fifty
(50) Software CDs.
vi.
Ten
(10) blank CDs
vii.
One
(1) blank DVD.
viii.
Linux,
Internet biling and Antivirus software.
ix.
USB
cable for digital camera
x.
Telephone
codes.
The plaintiff, through this action,
now prays for the replacement value of the stolen goods from both defendants,
the one paying the other to be absolved.
On 22 September 2010, the plaintiff
led evidence from its first witness, Mr Alvin Dumisani Ncube (Mr Ncube).
After the plaintiff had led evidence
from its first witness it, then gave notice to amend its summons and
declaration. The intended amendment would result in the plaintiff praying for
“a return of the lost computers or their values thereof in the amount of US$5
753-90”.
The application for amendment was
opposed by both defendants.
Mr Dondo for the first defendant submitted that the intended amendment
introduced a new cause of action. He said the amendment was meant to resuscitate
the plaintiff's case after it had collapsed following the evidence of its main
witness.
Mr Shamu, for the second defendant, was also of the view that the
amendment was based on an afterthought as the matter had already progressed.
In introducing the amendment, Ms Ndawana for the plaintiff, submitted
that the amendment would bring clarity since the action was anchored on
compensation for the loss of the plaintiff's goods. She said the defendants
could either deliver the goods lost or pay their value. That route would
resolve the issue of whether or not the plaintiff was entitled to make a claim
in foreign currency since the loss occurred before the multi-currency system
was introduced in Zimbabwe
in February 2009.
It is correct, as submitted by Ms Ndawana, that in terms of r 132, of the
High Court Rules, 1971, the court can, at any stage of the proceedings, allow
amendment of pleadings by either party “for the purposes of determining the
real question in controversy between parties”. I was, however, in casu, not persuaded that the
amendment was necessary and therefore refused to grant it.
I took the view that, the amendment,
coming soon after hearing evidence from the plaintiff's main witness, was
designed to reconstruct the plaintiff's case. I also did not believe that the intended
amendment could have any effect in the determination of this case. Thus on that
basis I dismissed the plaintiff's application to amend summons and declaration.
The matter then proceeded.
The first witness called by the
plaintiff, Mr Ncube, had testified that he was the Managing Director of the
plaintiff. He said because of the nature of his equipment, he had from the
commencement of the lease agreement in 2005, indicated to the first defendant
the need for security and had even offered to assist in identifying a security
firm. He said a Mr Chihota had informed him that the landlord (first defendant)
would indeed provide security for the leased premises. The landlord had, from
2005 up to the time of the break-in on 18 April 2008, billed the plaintiff for
its portion of the security costs. In support of his evidence, Mr Ncube
referred the court to receipts and statements of account appearing on pp 1-4 of
the document he produced as exh 1.
Mr Ncube said when the burglary
occurred police were informed. The matter, according to him, was then left in
the hands of the police and the two defendants.
Mr Ncube also testified that in 2008
there was a change of management in the first defendant. He said that despite
the new management denying the existence of a lease agreement, the first
defendant continued to bill the plaintiff for security services. He confirmed
that goods listed on p 2 of this judgment were indeed stolen after the burglary.
He said some of the goods were purchased in Zimbabwe
dollars whilst some of them were purchased in South Africa and paid for in
foreign currency. He said the replacement values were in United States dollars and no
depreciation had been factored.
Under cross examination, Mr Ncube
said that although, the plaintiff could provide invoices and receipts as from
2005, it had thought the few it produced in exh 1 were sufficient to prove its
case. He maintained that the plaintiff and the first defendant had reached a
verbal agreement on the issue of security as supported by the invoices produced
in court. He said up until 18 April 2008, the first respondent had indeed provided
security. It was his evidence that the first defendant had breached the verbal
agreement by failing to provide security yet it continued to bill and receive
payment for security.
Mr Ncube said, as between the first
and second defendants, the plaintiff was not clear as to who was responsible
for the loss. The plaintiff had merely been told that the second defendant was
guarding the premises at the material time. He said the verbal agreement did
not include the second defendant and he did not know the name of the company
that was guarding the premises at the time of the loss.
The second and last witness of the
plaintiff was Mr Austin Munyavhi (Mr Munyavhi). He said his company, Utsanzi
Product Industries, also rented premises from the first defendant and the
company had the same security arrangements as the plaintiff (i.e. with the landlord
being responsible for security and lessee paying for part of the security
bill). He said he, like the plaintiff, also received invoices for security as
from 2005 when he became a tenant.
Mr Munyavhi denied the existence of
a Tenants Association at the time he became a tenant. He, however, said a
Tenants Association was formed later but he was never a member of it.
Under cross examination, Mr Munyavhi
said his company was no longer a tenant of the first defendant. He said he had
left after the expiry of his lease and had no grudge with the first defendant.
He said he was not aware of the verbal agreement between the plaintiff and the
first defendant. He, however, maintained that security arrangements were the
responsibility of the first defendant. He also did not know if the second
defendant was the one guarding the premises. He said as tenants they were only
involved in the issue of security in the sense that they liaised with the first
defendant's accounts department whenever they noticed security was not
provided.
At the close of the plaintiff's case
Mr Dondo, for the first defendant,
said he was under instruction from the first defendant to apply for absolution
from the instance since it was not clear on whether or not the plaintiff's
claim was based on delict or breach of contract. He argued that if at all any
loss occurred, compensation would have to be based on Zimbabwe
dollars at the time of such loss (i.e. 18 April 2008). He also said it was not
proper to argue for a replacement of old goods with new ones.
In response to the application for
absolution I was of the opinion that the plaintiff had a story which required
clear rebuttal from the other side. The receipts against invoices from first
defendant appeared to confirm a contractual arrangement. I therefore felt it
would be premature to seriously consider the application for absolution. I
dismissed the application.
The first defendant then called its
first witness, a Mr Martin Kwaramba (Mr Kwaramba). The witness said he had been
employed by the first defendant for 18 years as a Buyer. He said he knew of the
arrangements relating to security. He said that at the material time all
tenants were responsible for their security in respect of premises let out to
them. The landlord only collected payment for onward transmission to the
security companies concerned. He said the Tenants Association had agreed that
payments should be made through the first defendant. He had heard about the
burglary of 18 April 2008 but argued that the first respondent was not
responsible since security matters were the plaintiff's responsibility. He did
not agree with the value placed on the plaintiff's goods.
Under cross examination Mr Kwaramba,
said as a buyer he only got to know something relating to security arrangements
during budget meetings. He said, unlike
others, Kingsport
had its own security arrangements in place. He said the first defendant never
contracted with the second defendant for security. He said when it was agreed that
the first defendant should make arrangements for security, some tenants did not
pay and as a result there was no security as from 2007 to 2008. He said the
second defendant was never asked to guard any premises.
The last and second witness called
by the first defendant was Mr Kingston Mhako (Mr Mhako). Mr Mhako said he was the
Managing Director of Kingsport. His company had, in 2006, signed a lease
agreement with the first defendant similar to the one signed between the
plaintiff and the first defendant. The first defendant, he testified, had not
undertaken to provide security for his company. To that end his company, which
was small, had until July 2007, relied on the first defendant's security
arrangements. He said his company had, as from August 2007, directly engaged
the second defendant. He said that in 2007 all other companies at the premises
had no security. He had asked the first defendant, as landlord, to arrange for
all tenants to discuss the issue of security but that had failed until he made
his own arrangements in August 2007. He said the plaintiff did not attend
meetings that were called to discuss security. He further stated that as from 1
February 2008, the first defendant became responsible for security arrangements
but only for those tenants who contributed/paid for the security. His company
was the only one paying. Mr Mhako said when the burglary occurred on 18 April
2008, the plaintiff's premises were not guarded. It was only his company that had
security.
The second defendant called one
witness. It called Mr Sephen Partze Musha (Mr Musha) who said as at 18 April
2008 the second defendant was only contracted to Kingsport. He said the second defendant was
not responsible for security in the plaintiff's area. He therefore did not know
why the second defendant was being dragged into court.
The second defendant closed its case
after Mr Musha's evidence.
In her closing submissions Ms Ndawana stated that the evidence before
the court showed that the first defendant indeed undertook to provide security
at the premises leased to the plaintiff. To that end, she submitted, the first
defendant, as from 2005 to 18 April 2008 when the burglary occurred, sent
invoices to the plaintiff on a monthly basis for payment for rent, electricity
and security. The plaintiff paid for all invoices it received from the
first defendant inclusive of payment for security.
Ms Ndawana submitted that the plaintiff's claim was for compensation
for the loss of its goods at a fair value as depicted in the quotations
appearing in exhibit 1. She concluded that the first defendant, having
undertaken to provide security and having received payment for security, had
failed to provide such security and was therefore liable to compensate the
plaintiff for the loss it suffered. She declared:
“What is clear from the evidence led
is that the first defendant undertook to provide security for the premises
leased to the plaintiff, and indeed received payments for the provision of such security but failed to do
provide the security.
It is therefore apparent that the
first defendant is liable to compensate the plaintiff for any loss incurred as
a result of its failure to provide such security. From the evidence led by the
first defendant, it became clear that the second defendant was not engaged by
the first defendant to provide security for the premises occupied by the
plaintiff. Plaintiff was effectively paying for a service it was not
receiving”.
The above submission clearly
absolves the second defendant from liability.
On the issue of the claim being
expressed in foreign currency, Ms Ndawana
cited the cases of Watergate (Pvt) Ltd
and Commercial Bank of Zimbabwe (SC 78/05) and Makwindi Oil Procurement (Pvt) Ltd v National Oil of Zimbabwe 1988(Z)
ZLR 482 (SC) where payment in foreign currency was said to be acceptable if a
party proved that its loss was in foreign currency. In such a case the loss
would most be fully compensated in foreign currency. She argued that the thrust
in the court's ruling should be to ensure that “damages are meaningful and that
there is compensation to the plaintiff”. (See Fabiola v Louis HH 25/09).
In casu, she
argued, the introduction of the multi-currency system in February 2009 actually
vindicated the wise position taken by the plaintiff. She observed that in practice dollarisation
had already occurred. Furthermore, she argued, in Leighton v Eagle Insurance Company Limited & Others, HH 193/02,
the effect of inflation had been recognised when SMITH J said:
“It would be grossly inequitable to
fix blindly in every case, that the date for assessing damages is the date of
the delict. The court can take judicial notice of the rampant inflation in the
country… It would be most unfair to the plaintiff to award him damages assessed
at the costs prevailing in 1996 with interest at the prescribed rate from that
date. It would be much fairer, and more realistic, to fix damages at today's
costs”.
All
in all, she submitted, the plaintiff had proved its claim and there was nothing
illegal about the plaintiff's claim being made in foreign currency. She
therefore urged the court to grant the relief as prayed for.
Mr Dondo, for the first defendant submitted that the plaintiff had
failed to place before the court evidence which would entitle it to be granted
the relief it sought. He said there was no explanation as to why an important
issue such as security was not included in the lease agreement. He argued that
the evidence of the first defendant to the effect that the issue of security
was left to the individual tenant had been corroborated by Mr Mhako who
testified that the landlord had asked everyone to organise their own security.
Mr Dondo said there was no reason for the court to accept the
plaintiff's story and reject that of the first defendant. He said that the
plaintiff had failed to prove the existence of a contract and the breach
thereof relating to the issue of security.
Mr
Dondo went further to submit that the
claim, having been instituted on 14 November 2008, could not have been
expressed in United States
dollars when the loss had been suffered in Zimbabwe dollars. He said the
Mkwindi case (supra) did not lay down
a strict rule that the issue of foreign currency was the only determining
factor in matters of this nature. To that end, he argued, the plaintiff had not
established that its normal business was in United States dollars. Furthermore,
he argued, the bulk of the plaintiff's goods were not new and had bee purchased in local currency (Zimbabwe dollars) as
demonstrated by the plaintiff when in its letter of demand it asked for ZW$467
Billion. He said even if the first defendant were to be found liable, it would
not be equitable to compensate the plaintiff on the basis of values relating to
new goods.
Mr Shamu for the second defendant, submitted that the evidence led in
court clearly proved that the plaintiff could not lay any claim against the
second defendant. There was no evidence to indicate that the first defendant
had ever engaged the second defendant to provide security at the premises
leased by the plaintiff. Agreeing with the firs defendant's council, Mr Shamu also said the plaintiff had failed
to prove its loss in foreign currency.
In
terms of the pre-trial conference minute the issues that fall for determination
in this judgement were listed as follows:-
“1. Whether first defendant did not
agree to provide security for the leased premises?
2.
What
was the purpose of the security services?
3.
Whether
second defendant was not contracted to provide the security services at the
leased premises?
4.
Whether
first defendant/second defendant are liable for plaintiff's loss in any way?
5.
What
is the reasonable value of plaintiff's lost goods?”
Without ignoring any of the issues
listed above, I shall now proceed to determine this matter in following manner:
1. Did the first defendant undertake to
provide security for the premises leased to the plaintiff?
It is
common cause that the lease agreement did not cover the issue of security. It
is
however, the plaintiff's contention
that in terms of an enabling clause, namely Clause (W) quoted herein in full at
p 1 of this judgment, the first defendant agreed that it would provide security
upon payment of a requisite fee by the plaintiff. In confirmation of that
contention, in its further and better particulars filed on 9 October 2009, the
first defendant admits that it invoiced the plaintiff for security services
provided by the second defendant but the plaintiff “never paid the amount on
the invoices relating to security”. Indeed pp 2 and 4 of exh 1 show examples of
invoices from the first defendant dated 15 March 2008 and 19 February 2008.
Also at pp 1 and 2 of the same exhibit we have receipt numbers 011527 (dated 5
April 2008) and 011513 (dated 29 February 2008) issued to the plaintiff by the
first defendant for:
(a)
rent
and bills; and
(b)
rent
and rates.
Both invoices include
costs for security.
Mr
Ncube's evidence was to the effect that the plaintiff had at all material times
paid for security services as billed. There was no rebuttal of what a Mr
Chihota had told Mr Ncube. His evidence
was, in my view, corroborated by Mr Munyavhi's evidence. Mr Munyavhi testified
that although tenants could have a say on who was finally contracted to provide
security, the entire responsibility for security was in the hands of the first
defendant. Tenants could only raise issues with the first defendant on security
when there were problems. That evidence, in my view, remained intact because Mr
Mhako's evidence was to the effect that he only arranged his own security for Kingsport after a
break-in. Accordingly the probabilities are that prior the break in Mr Mhako
had also relied on security arrangements put in place by the first defendant.
There
was little to gain from Mr Kwaramba's evidence because from his own admission
he only heard of security issues during budget meetings. He had no first hand
knowledge on how security was arranged.
The second defendant denied being contracted by the first
defendant to provide security for the premises leased by the plaintiff. The
second defendant, however, agreed that it provided security for Kingsport who actually
signed a contract for such service. That was the only contract produced in
court. It therefore means that whereas the plaintiff made payments to the first
defendant for security as agreed outside the lease agreement, the first defendant,
in breach of that agreement, did not make arrangements with any of the security
firms to provide security at the premises leased to the plaintiff.
My
finding therefore, on a balance of probabilities, is that there was indeed an
undertaking by the first defendant that it would provide security to the
premises leased by the plaintiff. The first defendant breached that undertaking
by failing to arrange for the provision of security after the plaintiff had, as
per arrangement, made payment for same. I believe that the plaintiff paid for
security as arranged.
The above finding also answers the issue of whether or not the
second defendant ever entered into a contract with the first defendant for the
provision of security at the premises leased to the plaintiff. As correctly
conceded by counsel for the plaintiff, the evidence led in court revealed “that
the second defendant was not engaged by the first defendant to provide security
for the premises occupied by the plaintiff”. The second defendant demonstrated
in its evidence that where it contracted with another party for the provision
of security, it drew up a formal contract – such as was the case with Kingsport.
Although
in its pleadings, the first respondent had alleged that the second defendant
had contracted to defend the premises occupied by the plaintiff, no evidence
was led in court to prove that averment.
Given the above it is clear that no liability attaches to the
second defendant with respect to the plaintiff's entire claim. In those
circumstances the second defendant would be entitled to costs for being dragged
to court for no apparent reasons.
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 is 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 (supra),
Watergate (supra) and Fabiola (supra) 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 (as she then was) when
in Fabiola supra 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 to 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 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
4.
The
first defendant be and is hereby ordered to pay costs of suit.
Gill Godlonton &
Gerrans,
plaintiff's legal practitioners
Chinamasa, Mudimu
& Dondo, 1st
defendant's legal practitioners
Vasco
Shamu & Associates, 2nd
defendant's legal practitioners
