REPORTABLE
(19)
Judgment No. S.C. 29/02
Civil Appeal No. 14/01
UDC LTD v CHAWARA
KAPENTA FISHING CO-OP LIMITED
SUPREME
COURT OF ZIMBABWE
CHIDYAUSIKU
CJ, ZIYAMBI JA & MALABA JA
HARARE,
MARCH 11, 2002
A
P de Bourbon SC, for
the appellant
No
appearance for the respondent
ZIYAMBI JA: At the end of the
hearing of this matter we allowed the appeal and indicated that our
reasons would follow.
The respondent in this matter
brought six claims against the appellant in terms of a summons issued
in the High Court on 4 September
1996.
The claims were based on a hire
purchase agreement contracted between the respondent and Zimbabwe
Motor Assemblers and ceded to the
appellant on 24 June 1991.
The subject of the agreement was a certain Bedford Truck (the
truck), the purchase price
of which, including finance charges,
was $374 943.00.
It was alleged by the respondent
that the truck had been unlawfully repossessed and sold by the
appellant allegedly for arrear instalments
due and owing. It was as
a consequence of the unlawful repossession that the various claims
for damages arose.
All the claims failed in the High
Court except for one, namely that set out in paragraph (e) of the
summons, which partially succeeded
and which reads:
(e) payment of the sum of
$350 000.00 as and for damages together with interest thereon at
the prescribed rate of 25% per annum
from 8 May 1996, being the
date of demand, to the date of payment.
It was alleged in paragraph 16 of
the declaration that:
As a result of the unlawful
sale of the truck, the plaintiff would have to acquire a similar
truck at a fair and reasonable cost of
$350 000.00, which sum
also represents the fair and reasonable value of the truck at the
time the plaintiff lost possession
of same to the defendant.
The court awarded to the
respondent damages in the sum of $100 000 and costs of suit.
It is against these awards that the appellant
appeals.
In coming to the conclusion in
favour of the respondent the court accepted the argument by the
respondent that the manner in which
the vehicle was disposed of by
the appellant after it was handed over contravened s 20 of the
Hire Purchase Act [Chapter
14:09], (referred to
hereafter as the Act) and was accordingly unlawful. However,
by virtue of s 4 of the Act, the provisions
of s 20 do not
apply to the agreement the subject of this dispute.
Section 4 of the Act provides as
follows:
Except
for sections five,
twenty-two and
twenty-four,
which shall apply to every agreement or, as the case may be, to the
parties to every agreement, this Part shall not apply to an
agreement
under which the purchase price exceeds the sum of three thousand
dollars.
Thus the provisions of ss 16 and
20 on which the court based its finding were not applicable to the
agreement in this case, by virtue
of the fact that the purchase price
exceeds $3 000. Accordingly, the repossession, having been
effected in terms of the agreement
between the parties, has not been
shown to be unlawful.
It would appear from the record
that, in the court below, the case was not argued on the basis of the
provisions of s 4 and that
the attention of the trial court was
not drawn to them. Had the provisions of s 4 been brought to
the attention of the court
I have no doubt that the courts
judgment would have been different.
Before concluding, I consider it
necessary to make the following remarks.
The Act was enacted in 1957 and
it would appear that the limit of $3 000 prescribed in s 4
has outlived its usefulness.
In Scotfin
v Afri Trade Supplies (Pvt) Ltd
1993 (2) ZLR 170 (HC), a call was made by ROBINSON J for a revision
of this limit. At p 185 of the judgment the learned judge
said:
At this point I feel
constrained to say that I believe the time is long overdue for the
limit of $3 000 prescribed in s 3
of the Hire-Purchase Act
(now s 4 of the Act), to be increased to a much more realistic
figure, having regard to present-day
prices for goods.
I would repeat the call with the
added observation that the limit of $3 000 is no longer relevant
to the needs of our present
day society. Not only can very little
of value be purchased for $3 000, but the effect of the
statutory limit is to provide
protection only for purchasers of goods
of little value leaving purchasers of goods of great value
unprotected.
DAMAGES
It remains to be considered
whether any other basis for damages was established by the
respondent. In terms of the agreement between
the parties the
seller was, in the event of the purchaser failing to make payment by
due date, entitled to:
Forthwith to terminate this
agreement, retake possession of the (vehicle), recover from the
purchaser all instalments in arrear, and
in addition any loss
suffered by the seller on re-sale; which loss the parties agree shall
be assessed by adding to the future aggregate
of future instalments
payable under this agreement as from the date of the breach, all
expenses incurred by the seller in repossessing
the (vehicle)
(including transport costs), in repairing and renovating the same,
the brokerage or commission, and handling charges,
and other expenses
directly relating to the recovery and re-sale of the (vehicle),
interest in terms of clause 3(b) hereof and
any collection
charges, tracing charges and legal expenses incurred by the seller,
either before or after the date of the breach
up to the date of
re-sale; and deducting from the total of the aforegoing the price
realised on resale.
The repossession was effected in
terms of the agreement. The vehicle was resold and the balance of
the proceeds after deducting
what was due to the seller, in terms of
the above quoted provision, was paid to the purchaser.
Much was made at the trial of the
price at which the repossessed vehicle was sold by the appellant.
However, even if there had been
parate
execution, a point which was not argued in the court below, the
obligation on the appellant was merely to take reasonable steps to
obtain a fair price for the goods. See Changa
v Standard Finance Ltd
1990 (2) ZLR 412 (SC). The onus
is on the respondent to prove the value of the goods as at the date
of resale and that the goods were sold at an unreasonable price.
Regarding the value of the
vehicle as at the date of sale, the learned Judge said:
The defendants contention,
on the other hand, is that the author of the valuation letter,
Exhibit 11, did not testify and
the service history attached to
Exhibit 11 indicated that the mileage which the vehicle had
reached by the time it was repossessed
was far more than that at
which the alleged valuation had been effected, the valuation having
been effected nearly a year after the
last recorded service mileage.
The observations made by the
defendant are correct in that the plaintiff is clearly not in a
position to say that the valuation is
unassailable. The court has
before it little information as to the condition of the vehicle at
the date of repossession. The
vehicle had clearly not been serviced
for a considerable period and there is evidence that the vehicle had
to undergo certain repairs
after its repossession by the defendant.
There was, in short, no evidence
adduced by either party as to the actual value of the vehicle at the
time the vehicle was repossessed
and sold by the defendant.
Clearly
the onus
was not discharged by the respondent who was, therefore, not entitled
to an award of damages.
It is for the above reasons that
the appeal was allowed with costs.
CHIDYAUSIKU CJ: I agree.
MALABA JA: I agree.
Gill, Godlonton & Gerrans,
appellant's legal practitioners