Judgment no. HB 32/2002
Case No. HC 300/97
t/a REDCLIFF EARTHMOVING
STANDARD CHARTERED BANK LIMITED
HIGH COURT OF ZIMBABWE
BULAWAYO 10, 11, 12 JULY 2001 AND 16 MAY 2002
B. Paradza for the plaintiff
R. M. Fitches for the defendant
KAMOCHA J: The plaintiff in this matter was claiming payment of
damages in the sum of $6 624 750,00, interest thereon and cost of suit. The damages
were alleged to have arisen from the cancellation of an ancillary contract between the
plaintiff and the Zimbabwe Mining and Smelting Company Limited - “ZIMASCO”.
In his declaration the plaintiff stated that ZIMASCO hired from him a D9
bulldozer for the sake of removing slag from a slag dump at its Kwekwe plant. The
agreement was that ZIMASCO would pay plaintiff at the rate of $750,00 per hour. The
plaintiff was required to remove the slag for a period of at least eleven hours per day
which would earn him $8 250,00 per eleven hour working day. Plaintiff would work
for seven (7) days a week. The contract was for an indefinite period for as long as
plaintiff was able to fulfill his obligations in terms thereof.
At the time of the said contract the plaintiff operated a personal account with
the defendant. He claimed that there was an agreement between him and the
defendant in terms of which the defendant allowed him to deposit into his personal
account any cheques issued by ZIMASCO in favour of Redcliff Earthmoving.
Plaintiff claimed that he then furnished defendant with a copy of the contract between
him and ZIMASCO.
The same mandate which authorised him to deposit cheques from ZIMASCO
into his personal account also allegedly authorised him to withdraw from any such
deposited cheques without the need to wait for 14 days for their clearance. So he did
not need to wait for 14 days in order for the cheques to be cleared since by agreement
his cheques were cleared immediately to ensure availability of funds when he issued
cheques to his suppliers. The defendant agreed to honour such cheques.
On 16 July 1996, ZIMASCO issued a cheque for $18 248,00 payable to Redcliff
Earthmoving. The plaintiff deposited it into his personal account and it was
immediately cleared as per agreement.
However, when he deposited another cheque from ZIMASCO into his same
personal account on 7 August 1996 the defendant - “the bank” rejected and reversed
the deposit on 8 August 1996 resulting in the unavailability of funds to meet any
cheques issued by the plaintiff to his suppliers.
For instance the plaintiff drew a cheque in favour of one Lawrence Whittal of
W.S. Agencies for an amount of $1 614,70 to purchase materials for the bulldozer but
the bank dishonoured the cheque. The result was that the supplier refused to supply
the required service materials for the bulldozer. It could, therefore, not be serviced
and would not operate.
Consequently on 20 August 1996 ZIMASCO notified the plaintiff of the
contract between it and him. He then lost earnings as a result. In conclusion the
plaintiff alleged that the bank was fully aware of the consequences and the prejudice
the dishonouring the ZIMASCO cheque would cause to him. He asserted that the bank
was also fully aware of the contract between him and ZIMASCO and the need to ensure
that the bulldozer was well supplied with service materials and that anything done by
the bank to stop plaintiff’s suppliers would be highly prejudicial to his business
interests with ZIMASCO. It was his assertion that the bank acknowledged its mistake
and made various attempts to discourage him from instituting these proceedings.
The damages allegedly suffered by him in the sum of $6 624 750,00
represented his loss of earnings and damages to his credit worthiness. The issues that
this court was called to adjudicate upon were agreed at the pre-trial conference as
“(1) Was there an agreement whereby plaintiff was entitled to draw immediately on cheques issued by ZIMASCO and deposited into its current account with defendant?
(2) Did defendant breach the agreement?
(3) Has plaintiff suffered damages in the sum of $6 624 750,00 or any amount as a result of the breach?
(4) Were the damages, if any, suffered by plaintiff within the contemplation of the parties?
(5) Were the damages, if any, suffered by plaintiff too remote?
(6) Has plaintiff failed to mitigate its damages?; and
(7) Is plaintiff entitled to interest on its damages, if any, with effect from 15 August 1996?”
The plaintiff had the burden of proof in respect of issues 1, 2, 3, 4 and 7 while
issues 5 and 6 had to be proved by the defendant. The plaintiff had no witnesses to
call in order to discharge the onus that rested on him but he gave viva voce evidence
himself. His evidence was similar to what is contained in his above declaration I
therefore need not recount it in great detail. In brief the plaintiff stated that in June
1996 ZIMASCO hired his bulldozer operated for 11 hours a day.
After securing the contract he alleged that he then approached the bank and
advised it about the contract he had secured with ZIMASCO. He said he informed the
bank that his trade name was going to be REDCLIFF EARTHMOVING. He had
operated a personal account with the bank for four years in his name Gilbert Zvizhinji.
At the bank he spoke to an official known as Stonewell Zemura. He asserted
that he discussed with Zemura the question of him depositing into his personal current
account cheques from ZIMASCO made in favour of Redcliff Earthmoving. The
plaintiff further stated that he told Zemura that he wished to withdraw money
immediately after banking the cheques. That, according to him, was acceptable to
Zemura who acceded to the proposal. After sealing the agreement Zemura gave the
plaintiff agreement forms to fill in which he duly did. The duly completed form was
given to the bank but the plaintiff was not given a copy of the agreement. The filling
of the agreement form entitled him to make withdrawals as soon as he paid in the
The plaintiff said he had to go into that agreement because he did not have
money and if he waited for 14 days in order for the cheques to be cleared he would lag
behind in his job. He needed cash for the maintenance of the bulldozer.
The bank demanded that the plaintiff produce proof of his contract with
ZIMASCO and he allegedly furnished it with a letter of acceptance from ZIMASCO and
a purchase order. Believing that the bank was going to abide by the terms of the
agreement he, on 7 August 1996, deposited a cheque for $7 957,42 from ZIMASCO
made in favour of Redcliff Earthmoving. He then immediately started to pay his
suppliers using that money. But the bank dishonoured a cheque he had made in
favour of his supplier.
He went to the bank to find out why that had happened. He discussed the
matter with an official known as Paul Chinyeure who told him that he could not
deposit cheques made in favour of Redcliff Earthmoving into his personal account.
He was advised that the cheque he had deposited had been returned to him by post.
When the cheque arrived it was written “payee signature required”. He took it back to
the bank wanting to re-deposit it but Chinyeure told him it was no longer possible to
deposit it into his personal account without giving reasons.
He took the cheque back to ZIMASCO and requested that they issue another
cheque in the name of Zvizhinji Earthmoving. He was accordingly given a
replacement cheque which he deposited into his personal account.
The plaintiff complained that due to the unavailability of funds he was unable
to service his bulldozer resulting in it not being operational for some time. As a direct
consequence of that his business came to a halt. He wrote to ZIMASCO advising that
the bank had maliciously caused him to have problems with his suppliers. He then
asked ZIMASCO to bear with him. To his surprise ZIMASCO wrote to him in these
Subject: Cancellation of Contract
It is not possible for us to wait until you have to repair your machine. We have to maintain certain budgets and we are unable to do this as your machine is out of order.
Therefore could you please remove your machine from our premises as soon as possible.
J A Kriek”
Thereafter considerable correspondence took place between the plaintiff and
the bank. In the correspondence filed of record by the plaintiff it was established that
the bank held one mandate authorising cheques in favour of Zvizhinji Earthmoving to
be deposited into the plaintiff’s personal current account. He was informed that
Redcliff Earthmoving was completely a different account and could not be deposited
into Zvizhinji Earthmoving. It was made clear to him that it was against company
policy for him to hold two mandates with different titles on one account.
He was advised that the second mandate in respect of Redcliff Earthmoving
which he had handed to Chinyeure had not been accepted by the bank and that the one
cheque for $18 000 accepted by the teller had been accepted in error.
The basis for claiming $6 624 750 was that his contract with ZIMASCO was for
a duration of two years. He would have earned that amount during the period had the
contract not been prematurely cancelled.
The plaintiff was cross examined at some length. He was not a convincing
witness. He sought to make the court believe that his machine could not operate
because it simply had not been serviced when the documents he filed clearly reveal
that the machine had broken down and needed to be repaired. He also avoided
questions by not giving direct answers to the questions put to him. For instance when
asked if he had kept copies of the mandate which he claimed had been accepted by
the bank his answer was that he did not anticipate litigation. And when asked why he
did not get a cheque in the name of Zvizhinji Earthmoving instead of Redcliff
Earthmoving to avoid that problem, he replied that he did not know.
Four witnesses gave evidence on behalf of the bank. The first witness was one
John Alfred Kriek - “Kriek”. He worked for ZIMASCO as a technical assistant. He
said the company hired the plaintiff’s bulldozer which was an old machine. The
plaintiff’s bulldozer was required to work at their slag dam to reclaim Ferro chronic.
The target was to do 100 metric tonnes per day.
The plaintiff managed to achieve the targets for some time but his machine
broke down. It was in that state for sometime resulting in ZIMASCO not being able to
meet their budgets of 100 metric tonnes per day.
Kriek alleged that the plaintiff’s machine had serious engine problems relating
to pistons and rings. Plaintiff was given a reasonable time within which to repair the
machine. But because he failed to do so Kriek, on behalf of ZIMASCO, wrote the letter
quoted supra on 20 August 1996 cancelling the contract. Kriek was emphatic that the
machine had broken down. It was not merely a question of lack of servicing or
maintenance it. He went on to say the plaintiff had not brought to his attention that he
had any cash flow problems. If the plaintiff had done so the company would have
assisted him by lending him oil and other consumables which were normally used for
servicing. This was an existing practice at the company. The company would
thereafter deduct the money of the consumables from any amount due to the plaintiff.
He said that principle was used to give contractors diesel. He was adamant that the
plaintiff had not informed him that he had problems with his bank. He said it was
clear in his mind that the cancellation was caused by the breakdown of the plaintiff’s
machine. Kriek was a good and fair witness who was not shaken under cross
The next witness was Stonewell Zemura - “Zemura”. He told the court that he
did not authorise the plaintiff to withdraw money immediately the cheques from
ZIMASCO were deposited. He in fact had no power to grant such authority.
When the plaintiff approached the bank with a cheque in favour of Redcliff
Earthmoving he was given a mandate form to fill in. As he presented the duly filled
in form it was found out that another mandate in the name of Zvizhinji Earthmoving
was still in force. Zemura said the new mandate in respect of Redcliff Earthmoving
did not have a copy of the contract with ZIMASCO attached to it. Since an existing
mandate was still in force the application for a second one was rejected.
Zemura was also a fair witness who gave his evidence well. What comes out
clearly from his evidence is that he at no stage sanctioned the plaintiff to withdraw
money from uncleared cheques since he himself would have no authority to do that.
The next witness for the defendant was Paul Chinyeure who was the bank’s
check clerk at the time. He was responsible for checking the correctness of mandates
and verifying the signatures. Thereafter, he would refer the new mandate to the
manager for approval. The manager would approve by stamping the mandate with an
He stated that Zemura brought to him a new application for an account
mandate - “In name of Sole Partner” in the name of Redcliff Earthmoving. He made a
check in the files and found that the plaintiff had an existing mandate on file. He
referred the matter to the manageress drawing her attention to an already existing
mandate. The application was then rejected by the bank on that basis.
The witness told the court that he was not aware of any authority entitling the
plaintiff to withdraw money immediately after the depositing of cheques. If such
authority existed he would have certainly been aware of it. He also denied that
mandate form was accompanied by contract documents such as the acceptance letter
or purchase order as suggested by the plaintiff. He also denied ever acting with
The witness made it clear that the cheque that was dishonoured was
dishonoured because it was deposited into a wrong account. The witness made
concessions where they needed to be made. His evidence was clear and fair.
The last witness to give evidence on behalf of the bank was its manageress
Mrs Grace Mutasa whose evidence corroborates that given by the previous witnesses.
She said the bank did not authorise the plaintiff to withdraw money immediately after
the cheques were deposited. She further confirmed that the plaintiff’s application for
a second mandate was rejected by the bank. She denied acting maliciously in her
dealings with the plaintiff. Mrs Mutasa gave her evidence well and was also a fair
The court makes a finding that all witnesses for the defence gave their
evidence well and fair. They are worth to be believed. The plaintiff on the other hand
appeared to have some form of arrogance which even manifests itself in the
correspondence filed of record. He also avoided answering questions directly.
The court also finds that ZIMASCO canceled its contract with the plaintiff
because his bulldozer had broken down and had not been repaired for some time. It is
also found that a second mandate in the name of Redcliff Earthmoving was rejected
by the bank. Further, it is found that there was no authority entitling the plaintiff to
immediately withdraw money after cheques from ZIMASCO were deposited. The
plaintiff failed to prove that there was such an agreement. Having found that such
agreement was non existent there can, therefore, be no talk of a breach of agreement.
If the plaintiff lost earnings and damages to his credit worthiness that can not
be attributed to any breach by the bank because it breached no agreement. In any
event the contract between the plaintiff and ZIMASCO was cancelled because his
machine had been broken down for quite sometime.
In the result the order I make is that the plaintiff’s claim be and is hereby
dismissed with costs.
Paradza & Partners plaintiff’s legal practitioners
Messrs Webb, Low & Barry, defendant’s legal practitioners