Terms and Conditions https://old.zimlii.org/taxonomy/term/9972/all en Samukange v Marange Resources (Private) Limited (HH 691-20, HC 3148/14) [2020] ZWHHC 691 (11 November 2020); https://old.zimlii.org/zw/judgment/harare-high-court/2020/691 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>JONATHAN SAMUKANGE</p> <p>versus</p> <p>MARANGE RESOURCES (PRIVATE) LIMITED</p> <p> </p> <p> </p> <p>HIGH COURT OF ZIMBABWE</p> <p>TAGU J</p> <p>HARARE, 11 November 2020 </p> <p> </p> <p> </p> <p><strong>Civil Trial</strong></p> <p> </p> <p><em>T Mpofu</em>, for plaintiff</p> <p><em>I Ndudzo</em>with <em>G Gomwe</em>, for defendant</p> <p> </p> <p> </p> <p>              TAGU J: At the close of the defendant’s case on the 4thof November 2019 the plaintiff undertook to file his closing submissions by the 7thof November 2019. The defendant undertook to file its closing submissions by the 13thof November 2019. The plaintiff managed to file his closing submission on the 12thof November 2019. At the time of writing this judgment the defendant had failed to file its closing submissions forcing this court to write this judgment without an input from the defendant.</p> <p>            The plaintiff issued summons against the defendant claiming USD 230 000.00 being the value of a truck being a Toyota Dyna, white in colour, diesel, engine number J05CD 18642, chasis number JHFYE207104000035 at the time of commencement of use or alternatively being the sum for which defendant has been unjustly enriched at plaintiff’s expense, interest at 5% per annum from August 2009 to date of full and final payment and costs at attorney and client scale.</p> <p>            The undisputed facts are that the plaintiff imported the vehicle in question from South Africa in 2005. In 2008 plaintiff entered into a mining agreement with one Robert Van De Merwe which was to operate a tantalite mine at Benson mine in Mutoko. Three months later, the truck was, without plaintiff’s knowledge taken to Marange Resources (Private) Limited where Mr. Robert Van De Merwe entered into a mining joint venture for diamonds with the defendant. In August 2009 the vehicle was impounded by Zimbabwe Republic Police Mutare for failure to have a valid licence. However, after negotiations with the employees of the defendant and the plaintiff the vehicle was released into the hands of the defendant into which it is to this day.</p> <p>When served with the summons the defendant totally denied ever receiving delivery of the truck or its services thereof in its plea. It is necessary at this stage to outline the relevant potions of the defendant’s plea as these have a bearing on the evidence given by the plaintiff and the defendant.</p> <p>           “2.2      Defendant denies ever receiving delivery of the truck or its services thereof. Defendant                            denies  ever having made use of the truck or having sight of the truck whatsoever.</p> <p>            2.5       Defendant is in the diamond mining business and it is not possible for a motor vehicle to                         be sneaked into the premises of the defendant without its knowledge and/ or proper                          paperwork due to the stringent security procedures Defendant is required to adhere to.</p> <p>            4.4.       Defendant denies ever being in possession of the truck whatsoever. There is no proof of                           delivery of the truck to Defendant by Plaintiff. Defendant has no business with the alleged                   truck and there would not have been any reason for Defendant to keep the truck in its                               possession.</p> <p>            5.2.       Defendant has never benefitted from the alleged truck and has never admitted to having                           benefitted from the truck.</p> <p>            5.3.       Defendant does not have in its possession or as part of its fleet the alleged vehicle. It                                utilizes other vehicles which have nothing to do with Plaintiff and are being paid for as                               and when services are utilized.”</p> <p> </p> <p>            The issues to be determined in this case were captured in the parties’ Joint Pre-Trial Conference Minute as follows-</p> <p>            <strong>“ISSUES</strong></p> <ol> <li>Whether there is an agreement between Plaintiff and Defendant?</li> <li>Whether or not the Defendant was unjustly enriched from using the Plaintiff’s Toyota      Dyna Truck?</li> <li>Whether or not Defendant is liable in the sum of USD 230 000 being the value of the       Toyota Dyna Truck at the time of commencement of use or alternatively the sum to which      the Defendant has been unjustly enriched?</li> <li>Whether Plaintiff is entitled to be paid rentals for the use of the truck?</li> <li>Whether the rates of Automobile Association of Zimbabwe should be used to determine   the rentals?</li> <li>Whether Plaintiff is entitled to claim any damages caused to repairs or replace the truck?”    </li> </ol> <p> </p> <p>            In<em>casu</em>the plaintiff Mr. Jonathan Samukange told the court that after buying the said vehicle in South Africa it was brought into Zimbabwe by his driver Titus Makeredza. It was the said driver who drove it to Marange Resources (Private) Limited without his knowledge. When he heard that the vehicle had been impounded by the Zimbabwe Republic Police in Mutare he went there and the defendant’s management staff involving Mr Obert Dube and Mr G Masimirembwa agreed to purchase the lorry for the sum of USD 230 000.00. To date no payments have been made, and due to the strict security system at Marange Mines he has been unable to go and collect it. </p> <p>            The driver of the said truck Mr Titus Makeredza told the court that the said vehicle is still with Marange Resources who have recently changed name to Zimbabwe Consolidated Diamond Company (ZCDC).</p> <p>            Mr. Godwills Masimirebwa who was the chairman of MDC a subsidiary of Marange Resources also confirmed that the Chief Executive Officer Mr. O. Dube wanted to buy the truck in question for USD 230 000.00 when the plaintiff wanted to take it away after it was impounded by Zimbabwe Republic Police Mutare. He confirmed further than the truck was at Marange Resources.</p> <p>            At the close of the plaintiff’s case the defendant applied for absolution from the instance which this court dismissed with costs on a higher scale.</p> <p>            The defendant then led evidence from Mr. Obert Dube. He told the court that he was employed by the defendant as a Chief Executive Officer in November 2010. He said around 2012 Mr. Masimirembwa phoned him and told him about a vehicle that he said belonged to Mr. <em>Samukange</em>. It was his further evidence that the mystery is that the vehicle had no papers. Thereafter he left the employ of the defendant before the papers were brought. He said Mr. Van der Merwe claimed this vehicle to be his and later converted it to a bowser. According to him the situation around the vehicle was messy and the first time someone claimed it was when Mr. <em>Samukange</em>claimed it. To him the vehicle existed and remained remained there at the defendant’s premises and was being used as a bowser. Under cross examination he confirmed that Mr. <em>Samukange </em>told the court the truth. The defendant’s pleas were read to him and he confirmed that all that were lies. He said Marange Resources actually used the vehicle and benefitted from it. He said it is false that the defendant did not know Mr. Masimirembwa. At the time he left not even a cent had been paid for the vehicle to Mr. <em>Samukange</em>on account of the fact that papers for the vehicle had not been produced. As to its coming there and being impounded by the Mutare Police he said all this happened before he joined the defendant hence he was not in a position to comment. Asked if Mr. <em>Samukange</em>was the owner of the said vehicle his answer was “yes”. Finally he said he could not value the vehicle though at first he said it was valued at $100 000.00. Through Mr. Dube the defendant departed from its plea. He said he called plaintiff and told him to bring the vehicle registration book as a precondition for a discussion on payments. He said the defendant was using the vehicle by virtue of a government directive and that it was entitled to do so on the strength of that directive.</p> <p>            The difficulty is that this is not the case between the parties as revealed by the pleadings. This allegation was not put to the plaintiff to comment. This entirely new case was irregularly raised at this stage. The point does not need to be emphasized that a claim is considered on the basis of the pleadings. Very recently the Supreme Court in <em>Medlong Zimbabwe (Private) Ltd</em>v <em>Cost Benefit Holdings (Private) Limited</em>SC -24-18 said-</p> <p>           “In general the purpose of pleadings is to clarify the issues between the parties that require           determination by a court of law. Various decisions of the courts in this country and elsewhere have stressed this important principle.</p> <p> </p> <p>In <em>Durbach</em>v <em>Fairway Hotel ltd</em>1949 (3) SA 1081 (SR) the court remarked -</p> <p>        “The whole purpose of pleadings is to bring clearly to the notice of the court and the parties to an    action the issues upon which reliance is to be placed.”</p> <p> </p> <p>See also <em>Kali</em>v <em>Incorporated General Insurance Ltd</em>1976 (2) SA 179 (D) at 182 where the court remarked-</p> <p>       “The purpose of pleading is to clarify the issues between the parties and a pleader cannot be allowed             to direct the attention of the other party to one issue and then, at the trial attempt to canvass       another.” </p> <p> </p> <p>            In<em>casu</em>that is what the defendant did through its witness. </p> <p><strong>ANALYSIS OF EVIDENCE</strong></p> <p> </p> <p>            The court found that the Plaintiff told the truth. His evidence was corroborated by the defendant’s sole witness. The court therefore found that the defence set out in the defendant’s plea is based on falsehoods. </p> <p>            The position of the law is that if a litigant lies in one material respect, the court will be entirely justified in taking the view that he has lied in all other respects and in treating him accordingly. In <em>Moroney</em>v <em>Moroney </em>SC -24-13 it was held-</p> <p>            “I accept, that respondent failed to truthfully and adequately explain the circumstances of how     the various amounts that the respondent claimed came from Helena Limited found their way into          Standard Chartered Isle of Man Account. The court ought to have disbelieved him…….</p> <p> </p> <p>In <em>Leader Tread Zimbabwe (Pvt) Ltd</em>v S<em>mith</em>HH-131-03 NDOU J at p 7 of the cyclostyled judgment stated as follows-</p> <p> </p> <p>           “It is trite that if a litigant gives false evidence, his story will be discarded and the same adverse    inferences may be drawn as if he had not given evidence at all – see Tumahole Bereng v R [1949]         AC 253 and South African Law of Evidence by LH Hoffmann and DT Zeffert (3 ed) at page 472.If a litigant lies about a particular incident, the court may infer that there is something about it            which he wishes to hide.”</p> <p> </p> <p>            In<em>casu,</em>it is clear, therefore that the plaintiff’s position is quite unassailable compared to that of the defendant. The plaintiff’s vehicle was used at the Mtoko venture by Robert Van Der Merwe but he surreptitiously moved it to defendant’s premises. Titus Maredza was the driver and he was able to give some insight into the work done by the vehicle. The vehicle was then impounded by the police and the plaintiff was called. The defendant’s employees contacted their superiors including Mr. Obert Dube and Mr. G. Masimirembwa who pleaded with plaintiff. Their position was that they would either pay for its use or acquisition, and he was to release it back to them. There was a meeting between the parties and it was agreed that plaintiff would be paid US$230 000.00. The plaintiff is therefore a credible witness who must be believed over the defendant’s false testimony. Mr. Obert Dube indicated that he was directed by Masimirembwa to settle this issue. It is also clear that ZMDC and Marange Resources (Private) Limited constitute a single economic entity under the stewardship of government. Mr. Obert Dube testified as much. The defendant is therefore bound as much. That is what the law says- <em>Deputy Sheriff</em>v <em>Trinpac Investments (Pvt) Ltd &amp; Anor</em>2011 (1) ZLR 548.</p> <p>            In the present case the defendant from the evidence of Mr. Obert Dube admitted that it has made use of plaintiff’s vehicle. It admitted that it has generated value out of such use. It further admitted that it has not paid the plaintiff. Whatever unlawful arrangements defendant had with Robert Van Der Merwe do not concern the plaintiff. Defendant must sue Van Der Merwe. Plaintiff therefore managed to establish that if he is not paid, he would be unjustly enriched at his expense – <em>Industrial Equity Ltd</em>v<em>Walker 1</em>996 (1) ZLR 269 (H), Cash Converters SA 2002 (1) SA 708 at 717H-J and De Wet and Van Wyk Kontraktereg en Handelsreg 5thEd at 220-221.</p> <p>            This brings me to the question of costs. The court noted that it had been told lies by the defendant. This vexatious defence was meant to prolong time and to entitle defendant to reap another undue reward from the fall in the value of money. All this must be punished. <em>Mahembe</em>v <em>Matambo</em>20-03 (1) ZLR 148 (H); <em>Borrowdale Country Club</em>v <em>Murandu 1987</em>(2) ZLR 77 (H).</p> <p>            The plaintiff’s claim will succeed with costs.</p> <p>            IT IS ORDERED THAT</p> <ol> <li>The Defendant is to pay the Plaintiff USD 230 000.00 at the applicable bank rate, being the value of the truck at the time of commencement of use or alternatively           being the sum for which Defendant has been unjustly enriched at Plaintiff’s           expense.</li> <li>Interest at 5% per annum from August 2009 to date of full and final payment.</li> <li>Costs at attorney and client scale.</li> </ol> <p> </p> <p><em>Venturas &amp; Samukange</em>, plaintiff’s legal practitioners</p> <p><em>Mutamangira &amp; Associates</em>, defendant’s legal practitioners  </p> <p>                 </p> <p>            </p> <p>    </p> <p> </p> </div></div></div><div class="field field-name-field-download field-type-file field-label-above"><div class="field-label">Download:&nbsp;</div><div class="field-items"><div class="field-item even"><span class="file"><img class="file-icon" alt="File" title="application/vnd.openxmlformats-officedocument.wordprocessingml.document" src="/modules/file/icons/x-office-document.png" /> <a href="https://old.zimlii.org/zw/judgment/files/harare-high-court/2020/691/2020-zwhhc-691.docx" type="application/vnd.openxmlformats-officedocument.wordprocessingml.document; length=24840">2020-zwhhc-691.docx</a></span></div><div class="field-item odd"><span class="file"><img class="file-icon" alt="PDF icon" title="application/pdf" src="/modules/file/icons/application-pdf.png" /> <a href="https://old.zimlii.org/zw/judgment/files/harare-high-court/2020/691/2020-zwhhc-691.pdf" type="application/pdf; length=128254">2020-zwhhc-691.pdf</a></span></div></div></div><span class="vocabulary field field-name-field-flynote-sync-local field-type-taxonomy-term-reference field-label-above"><h2 class="field-label">ZimLII Flynote:&nbsp;</h2><ul class="vocabulary-list"><li class="vocabulary-links field-item even"><a href="/tags-local/c">C</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/contract">CONTRACT</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/terms-and-conditions">Terms and Conditions</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/e">E</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/enrichment">ENRICHMENT</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/unjust-enrichment">Unjust enrichment</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/p">P</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/practice-and-procedure">PRACTICE AND PROCEDURE</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/absolution-instance-%E2%80%93-principles">Absolution from the instance – principles</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/pleadings">Pleadings</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/application-proceedings-pleadings">application proceedings (Pleadings)</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/contents-pleadings">contents of pleadings</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/extent-which-parties-are-bound-pleadings">extent to which parties are bound by pleadings</a></li></ul></span><div class="field field-name-field-cases-considered field-type-node-reference field-label-above"><div class="field-label">Cases considered:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/zw/judgment/supreme-court-zimbabwe/2018/24">Medlog Zimbabwe (Private) Limited v Cost Benefit Holdings (Private) Limited (SC 24/18, Civil Appeal No. SC 455/16) [2018] ZWSC 24 (14 May 2018);</a></div><div class="field-item odd"><a href="/zw/judgment/harare-high-court/2003/131">Leader Tread Zimbabwe (Private) Limited v Smith (HH 131-2003 ) [2003] ZWHHC 131 (26 August 2003);</a></div><div class="field-item even"><a href="/zw/judgment/harare-high-court/2011/121">Deputy Sherrif Harare v Trinpack Investments (Private) Limited and Another (HC 9019/10) [2011] ZWHHC 121 (13 June 2011);</a></div></div></div> Tue, 24 Nov 2020 07:44:27 +0000 Sandra 9940 at https://old.zimlii.org Stone & Another vs CABS & Others (HH 287-20, HC 3727/18) [2020] ZWHC 287 (14 May 2020); https://old.zimlii.org/zw/judgment/harare-high-court/2020/287 <div class="field field-name-field-download field-type-file field-label-above"><div class="field-label">Download:&nbsp;</div><div class="field-items"><div class="field-item even"><span class="file"><img class="file-icon" alt="PDF icon" title="application/pdf" src="/modules/file/icons/application-pdf.png" /> <a href="https://old.zimlii.org/zw/judgment/files/harare-high-court/2020/287/2020-zwhc-287.pdf" type="application/pdf; length=3084151">2020-zwhc-287.pdf</a></span></div></div></div><span class="vocabulary field field-name-field-flynote-sync field-type-taxonomy-term-reference field-label-above"><h2 class="field-label">Flynote:&nbsp;</h2><ul class="vocabulary-list"><li class="vocabulary-links field-item even"><a href="/tags/banking-finance-and-insurance-law">Banking, Finance and Insurance Law</a></li><li class="vocabulary-links field-item odd"><a href="/tags/bank">Bank</a></li><li class="vocabulary-links field-item even"><a href="/tags/bank-customer-relationship">Bank-Customer Relationship</a></li><li class="vocabulary-links field-item odd"><a href="/tags/currency">Currency</a></li><li class="vocabulary-links field-item even"><a href="/tags/foreign-currency">Foreign Currency</a></li><li class="vocabulary-links field-item odd"><a href="/tags/contract-law">Contract Law</a></li><li class="vocabulary-links field-item even"><a href="/tags/contractual-clauses">Contractual clauses</a></li><li class="vocabulary-links field-item odd"><a href="/tags/contract-foreign-currency">Contract in foreign currency</a></li><li class="vocabulary-links field-item even"><a href="/tags/legislation-and-contract">Legislation and Contract</a></li></ul></span><span class="vocabulary field field-name-field-flynote-sync-local field-type-taxonomy-term-reference field-label-above"><h2 class="field-label">ZimLII Flynote:&nbsp;</h2><ul class="vocabulary-list"><li class="vocabulary-links field-item even"><a href="/tags-local/b">B</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/banking">BANKING</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/relationship-between-customer-and-banker">Relationship between customer and banker</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/c">C</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/contract">CONTRACT</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/terms-and-conditions">Terms and Conditions</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/variation-terms">variation of Terms</a></li></ul></span><div class="field field-name-field-headnote-and-holding field-type-text-long field-label-above"><div class="field-label">Headnote and Holding:&nbsp;</div><div class="field-items"><div class="field-item even"><blockquote><p><strong>Costs</strong><br /> The applicants have succeeded in obtaining the relief which they sought before this court. There are no special reason warranting departure from the usual conclusion that costs should follow the result. The applicants are therefore entitled to recover their costs of suit.</p> <p><strong>Disposition</strong></p> <p>In the result, IT IS ORDERED THAT:</p> <p>1. Exchange Control Directive No. R120/2018 issued by the first respondent through its Governor on 4 October 2018 be and is hereby declared to be invalid, and is accordingly set aside.</p> <p>2. The first respondent shall pay to the applicant the sum of US$142 000.00 in the currency of the United States of America or transfer that amount into a Nostro Foreign Currency Account as may be directed by the applicants within seven days from the date of this order together with interest thereon at the prescribed rate of 5 percent per annum from the 17th October 2018, being the date of the letter of demand, to the date of full payment or transfer into the Nostro Foreign Currency Account as directed herein.</p> <p>3. The respondents shall pay the costs jointly and severally the one paying the others to be absolved.</p> <p>Tendai Biti Law, applicants’ legal practitioners<br /> Mawere Sibanda, first respondent’s legal practitioners<br /> GN Mlotshwa &amp; Company, second respondent’s legal practitioners<br /> Civil Division of the Attorney-General’s Office, third respondent’s legal practitioners </p></blockquote> </div></div></div> Tue, 26 May 2020 16:56:50 +0000 takudzwa 9618 at https://old.zimlii.org Stenhope Investments (PVT) LTD v Mukoko & Another (HH 132-18, HC 4872/17) [2018] ZWHHC 132 (14 March 2018); https://old.zimlii.org/zw/judgment/harare-high-court/2018/132 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>STENHOP INVESTMENTS (PVT) LTD</p> <p>16 FEBRUARY 2008</p> <p>versus</p> <p>BLESSING MUKOKO</p> <p>and</p> <p>REGISTRAR OF DEEDS</p> <p>HIGH COURT OF ZIMBABWE</p> <p>DUBE J</p> <p>HARARE, 1 February 2018 &amp; 14 March 2018</p> <p><strong>Opposed Application</strong></p> <p><em>F R. S Fashi</em>, for the applicant</p> <p><em>C Nhemwa</em>, for the respondent</p> <p>No appearance for the 2nd respondent</p> <p>            DUBE J: The applicant seeks an order for placement of a caveat on a property.</p> <p>On 30 May 2003, the applicant entered into a trade agreement with a company known as Mukundi Plastics (Pvt) Ltd, [hereinafter referred to as the company]. The applicant offered a credit facility of $ 120 000.00 to the company. The applicant was going to supply the company with goods. The first respondent who is a director of the company entered into a surety agreement  on 30 May 2013 wherein he bound himself as a surety and co-principal debtor for repayment of all sums which the company owed from time to time to the applicant. The applicant supplied the company with products worth $166 478.78. The first respondent pledged title deeds of stand being Stand Number 217, The Grange, and Harare, as security for the debt on 6 June 2013. The company failed to pay the debt  and is now under liquidation having been initially placed under judicial management on 14 February 2014. The applicant issued summons against the first respondent  on 26 May 2017 claiming the money owed under HC 4704/17 and the matter is still pending.</p> <p>            The applicant submitted that it is entitled to seek payment of the debt from the first respondent since he bound himself as surety and co-principal debtor. It fears that the immovable property offered as security for the debt may be disposed of by the first respondent before an action pending against the first respondent has been determined. He seeks an order for placement of a caveat over the property. The applicant’s case is that the caveat would serve to protect its interests since it has an interest in the property.</p> <p>            The second respondent was cited in his official capacity as an official responsible for effecting transfer of immovable property. He is not defending the application. The  first respondent defends the placement of the caveat on the property. He submitted that the claim against the principal debtor has prescribed and that the liability is no longer due. He contended that when summons was issued on 26 May 2017, the debt had already prescribed. He took issue with the fact that the applicant did not deal with the issue of   prescription in its answering affidavit, only to do so in its heads of argument.  He submitted that the applicant has deliberately avoided pursuing the principal debtor first and that it has not been shown that the principal debtor is unable to pay the debt. He contended that the applicant ought to have pursued the principal debtor first and has not shown good reason for placement of a caveat on the property of a surety ahead of the principal debtor.  </p> <p>           The  respondent also submitted that the application is improperly before the court because of the non-joiner of Olivia Mukoko, the holder of an undivided half share in the property. He challenges the validity of a letter he wrote surrendering title deeds for the property as security or credit guarantee because of the absence of consent of the co-owner and contends that the caveat will deprive the co-owner of her rights over the property. He challenges the pledge of the title deeds on the basis that one cannot pledge immovable property. He also took issue with the fact that the order sought seeks to place a caveat on the entire property instead of only his 50 % share of the property. He argued that the applicant’s fears are baseless as no facts have been placed before the court showing that the owners of the property intend and have made attempts to dispose of the property .He contended that the sale of the property by him is not possible as the original title deeds are in the applicant’s possession.  He urged the court to decline to grant an order for placement of a caveat on the property.</p> <p>            The central issue is whether the application for a caveat is properly before the court. If the answer is in the negative, the matter ends there. If the answer is in the affirmative, the court will proceed to determine whether the applicant has shown good cause for placement of a caveat over the property. </p> <p>        The question of prescription was raised for the first time in the respondent’s opposing papers. The respondent simply states in paragraph 6 of its answering affidavit that its claim has not prescribed and gives no further details. It then deals extensively with the issue in its heads of argument. One cannot expect the applicant to have dealt with the question of prescription in its founding affidavit before the issue was raised by its opponent. The fact of an inadequate response has a bearing on the merits of the preliminary point.</p> <p>            The applicant was required to bring proceedings against the respondent within  3 years  after the cause of action arose as envisaged by the Prescription Act, [<em>Chapter 8:11</em>]. The trade agreement states that the debt was due 30 days from the date of delivery of the products. The trade agreement was entered into for the period 13 May 2013 up to 31 May 2014. Summons was issued on 24 May 2017. The date when the trade agreement was entered into is not the date when the cause of action arose. The cause of action would have arisen 30 days from the date of delivery of the goods when payment became due. The dates of delivery of the goods sold are not known and hence it is difficult to ascertain the date when the cause of action arose. The date when prescription began to run is therefore not known. The raising of the issue was misplaced. The issue of prescription is not for these proceedings and is best left to be fully ventilated in the pending summons matter. I am satisfied that the action against the respondent is still pending.</p> <p>          It is not disputed that the respondent is a surety and co- principal debtor to the company debt. <em>Christie’s Law of Contract in South Africa, 7th   Ed</em>, p 150 defines a suretyship and says the following of a surety’s liability,</p> <p>            “Suretyship is an accessory contract by which a person (the surety) undertakes to the creditor of     another (the principal debtor) that the principal debtor, who remains bound will perform his    obligation to the   creditor and, secondarily, that if and so far as the principal debtor fails to do so,               the surety will perform it, or, failing that, indemnify the creditor.”</p> <p> </p> <p>            Put differently, a creditor is entitled to pursue a surety and co-principal debtor where the principal debtor has failed to meet its obligations to the creditor. A creditor cannot pursue the surety first before he pursues the principal debtor. The applicant is required to show that the company has failed to pay the debt in order for it to be able to pursue the respondent who stood surety for the debt. The company was placed under judicial management. This was on the understanding that it was unable to pay its own debts which include the debt owed to the applicant. The applicant averred in its answering affidavit that the company failed to meet its obligations and that proceeds realized from the liquidation failed to set off the creditor’s claims. It is clear that the company has not been able to pay its debts. A company that has been placed under judicial management is a company that is unable to pay its own debts. The company is at law deemed incapable of paying its own debts. Once a company is placed under judicial management, a creditor is entitled to pursue the surety for the recovery of the company’s debts. The applicant has decided to pursue the respondent for the recovery of the debt and has shown good reason for pursuing the surety ahead of the principal debtor.</p> <p>          Order 13 r 87 provides for non-joinder of parties and reads as follows,</p> <p>                “87. Misjoinder or non-joinder of parties</p> <p>                (1) No cause or matter shall be defeated by reason of the misjoinder or non-joinder of any party and the       court may in any cause or matter determine the issues or questions in dispute so far as they affect the rights         and interests of the persons who are parties to the cause or matter’’</p> <p>            Whilst Olivia Mukoko has an interest in the property concerned, she has not been joined to these proceedings. The court is entitled, in terms of r 87, to determine the issues or questions in dispute so far as they affect the rights and interests of the persons who are parties to the cause or matter. The non-joinder of the co-owner to the proceedings is not fatal. I am satisfied that the application is properly before the court.</p> <p>            The term ‘caveat’ is a Latin term which means ‘let a person beware’ It is a notice or warning that is registered over a property by a person who claims to have some interest in the property concerned. The purpose of a caveat is to preserve and protect the rights of a person who seeks to have a caveat placed on a property, known as a caveator. The effect of a caveat on a property is that the property cannot be sold or disposed of without giving effect to the caveator’s interest. Once a caveat is placed over a property, the said property cannot be transferred, mortgaged or disposed of without the caveator’s consent. No further dealings over the property are allowed unless the caveator consents to the upliftment of the caveat, it lapses, is cancelled, withdrawn or removed. Any person who deals with the property does so at his own risk. The law does not permit a person to lodge a caveat over another’s property without good cause. An applicant who applies to place a caveat over a property must show that he has an interest in the property concerned. The interest claimed must exist at the time the caveat is lodged and should not be an interest that arises in the future. The caveator must show that his claim arises from some dealing with the registered property. It is only those interests that are connected to the land that can be subject of a caveat. The interest must attach to the property, thus, a person seeking to place a caveat over a property is required to show that he has a caveatable interest to lodge the caveat. A caveator does not have to show that the other party is about to dispose of the property. The applicant has to show that he has a matter pending that concerns the property. The moment that the pending matter is determined, the caveat lapses by operation of law .The caveat cannot continue in perpetuity. The interest claimed by the caveator may be challenged by the owner of the property. It is the duty of the court to determine the validity and correctness of the application for a caveat.</p> <p>            In <em>Silberberg and Schoeman’s The Law of Property 5 Ed</em> p 13 the authors state as follows with regards the interest of co-owner in a property,</p> <p> </p> <p>                “Every co-owner has the right freely without reference to co-owners to alienate his or her share, or                even part of his or her share….. It is this right which is probably the most important       characteristic        which distinguishes a co-owner   <em>per ser </em>from other forms of co-ownership such as partnerships and       associates. It is clear that the exercise of this right       may lead to friction in that in enables one co-     owner to force the others into a legal relationship        with a party or parties which do not desire. “See     <em>Linda Mudawadzuri v Kingdom Bank. </em>HH 95/15”</p> <p> </p> <p>            In the <em>Mudawadzuri case,</em> the court endorsed the sale of a half share of a debtor’s property without the consent of a co-owner. These authorities are authority for the proposition that a co-owner can alienate his undivided share in an immovable property without the consent or reference to the other co-owner. This is so as far as he does not seek to dispose of rights belonging to the other co-owner. The effect of this is that the co-owner is thrust into a relationship with persons he does not know and a relationship he does not know. I see no reason why this proposition should not apply equally to a person who wishes to place a caveat on a property that is co-owned in circumstances where the co-owner had no dealings or a relationship with the co-owner’s   creditor. A caveat is a temporary measure to secure another’s interest in a property. It has no effect of disposing of the rights of a co-owner. The co-owner stands to suffer no actual prejudice as he still retains his rights and interest in his share of the property. The caveat will not deprive a co-owner of his rights as his share will not be alienated. This is specially so where the other co-owner, who owes the debt, has no present interest in disposing of the property. There is no bar to the caveat being placed over the entire property. The law does not hinder an applicant from registering a caveat over the entire property including a co-owner’s half share. I find therefore that it is permissible to place a caveat on a property belonging to a co-owner.</p> <p>              A pledge involves the surrender of a property as security for the fulfillment of a contract or payment of a debt. The thing given may be liable to forfeiture in the event of the debtor failing to meet its obligations.  Only property capable of delivery as in movables is capable of being pledged. Documents of title to property may be pledged. A pledge of title deeds of a property is as effective as a pledge of any other thing.   A lender who has a pledge, may enforce his security following a default. The pledge of the title deeds is documented in the credit security guarantee document. A closer look at the credit security guarantee document reveals that the respondent lodged the title deeds of the property as security for payment for goods supplied to the respondent.  The pledge of the title deeds was properly made. There was no legal requirement on the part of the respondent to seek the consent of the co-owner of the property before the pledge was made. If a co-owner can sell his half share in a property without the consent of a co-owner, it follows that a co-owner is capable of pledging his own half share of the property without the consent of a co-owner.</p> <p>        By seeking to enforce the pledge the applicant seeks to make the security perfecta.  In <em>PG Industries Zimbabwe Ltd v Jonas Holdings (Pvt) Ltd</em> HH 336/15 the court said the following about protection of a party’s rights.</p> <p>                “A party who wants to secure protection against claims by third parties to the collateral must secure their     interest .For a creditor to have maximum legal rights, the security agreement must not only be created but             that is must be perfected. The parties must intend that the security of interest be created by the agreement in      question. But a security agreement will not create security of interests unless it is perfected. Perfection can           generally be through possession depending on the nature of the collateral or execution of specific    documents. Once such security is created and perfected then it is enforceable against third parties.”</p> <p> </p> <p>            This case emphasizes the need to secure protection against claims by third parties where a creditor has a security agreement which he must perfect. Perfection, relates to steps that a creditor may take in relation to a security interest to make it effective against third parties in the event of default by a debtor. A caveat is one such mode of protecting an individual’s interest in a property. Once a caveat is placed on a property, it has the effect of security protection against claims by third parties. </p> <p>            Turning to the facts of this case, the applicant has demonstrated that he has a direct interest in the property. He holds title deeds of the property that were pledged over the debt as security. The pledge gives the applicant an interest in the property which is connected to the property. He has a pending matter where the dispute between the parties will be resolved. The caveat will not have the effect of depriving the co-owner of her rights over the property. The effect of the caveat is not to dispose of the property but simply to afford protection to the caveator by securing the property. The applicant is entitled to place a caveat over the entire property. An applicant applying for a caveat does not have to show that the property is about to be disposed of. The applicant has shown that he has a caveatable interest in the property concerned. He is entitled to the order sought.</p> <p>            In the result it is ordered as follows;</p> <ol> <li>The application for placement of a caveat on a certain piece of land being stand 217, The Grange, Harare held under deed of transfer number 5244/96 measuring 4000 square metres be and is hereby granted.</li> <li>The second respondent be and is hereby directed to register a caveat on the property referred to in paragraph 1 above within 48 hours of receipt of this order.</li> <li>The first respondent be and is hereby ordered to pay the costs of this application.</li> </ol> <p><em>Nyamapfene Law Practice</em>, applicant’s legal practitioners</p> <p><em>C Nhemwa and Associates</em>, respondent’s legal practitioners</p> <p>             </p> </div></div></div><div class="field field-name-field-download field-type-file field-label-above"><div class="field-label">Download:&nbsp;</div><div class="field-items"><div class="field-item even"><span class="file"><img class="file-icon" alt="File" title="application/vnd.openxmlformats-officedocument.wordprocessingml.document" src="/modules/file/icons/x-office-document.png" /> <a href="https://old.zimlii.org/zw/judgment/files/harare-high-court/2018/132/2018-zwhhc-132.docx" type="application/vnd.openxmlformats-officedocument.wordprocessingml.document; length=29394">2018-zwhhc-132.docx</a></span></div><div class="field-item odd"><span class="file"><img class="file-icon" alt="PDF icon" title="application/pdf" src="/modules/file/icons/application-pdf.png" /> <a href="https://old.zimlii.org/zw/judgment/files/harare-high-court/2018/132/2018-zwhhc-132.pdf" type="application/pdf; length=196058">2018-zwhhc-132.pdf</a></span></div></div></div><span class="vocabulary field field-name-field-flynote-sync-local field-type-taxonomy-term-reference field-label-above"><h2 class="field-label">ZimLII Flynote:&nbsp;</h2><ul class="vocabulary-list"><li class="vocabulary-links field-item even"><a href="/tags-local/company">COMPANY</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/director">Director</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/judicial-management">Judicial management</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/liquidation">Liquidation</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/contract">CONTRACT</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/terms-and-conditions">Terms and Conditions</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/suretyship">SURETYSHIP</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/surety-%E2%80%93-liability">Surety – liability of</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/judgment-debt-arising-out-principal-debtor%E2%80%99s-failure-pay-debt">judgment debt arising out of principal debtor’s failure to pay debt</a></li></ul></span><div class="field field-name-field-cases-considered field-type-node-reference field-label-above"><div class="field-label">Cases considered:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/zw/judgment/harare-high-court/2015/95">Mudawadzuri v Kingdom Bank Africa Ltd &amp; Others (HC 6558/14) [2015] ZWHHC 95 (01 February 2015);</a></div><div class="field-item odd"><a href="/zw/judgment/harare-high-court/2015/336">PG Industries (Zimbabwe) Ltd v Jones Holdings (Pvt) Ltd (HC 10678/13) [2015] ZWHHC 336 (31 March 2015);</a></div></div></div><div class="field field-name-field-legislation-considered field-type-node-reference field-label-above"><div class="field-label">Legislation considered:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/zw/legislation/act/1975/31">Prescription Act [Chapter 8:11]</a></div></div></div> Fri, 11 May 2018 08:01:55 +0000 admin 8783 at https://old.zimlii.org Delta Beverages (Private) Limited v Pyvate Investments (Private) Limited & Another (HH135-18, HC 1619/14) [2018] ZWHHC 135 (14 March 2018); https://old.zimlii.org/zw/judgment/harare-high-court/2018/135 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>DELTA BEVERAGES (PRIVATE) LIMITED</p> <p>versus</p> <p>PYVATE INVESTMENTS (PRIVATE) LIMITED</p> <p>and</p> <p>JOSEPH MUTANHO</p> <p>HIGH COURT OF ZIMBABWE</p> <p>DUBE J</p> <p>HARARE, 9, 10 and 11 January 2018 &amp; 14 March 2018</p> <p><strong>Continuous roll</strong></p> <p><em>P Chakanyuka</em>, for the plaintiff</p> <p><em>G Machingambi</em>, for the defendants</p> <p>            DUBE J: The plaintiff issued summons against the defendants claiming US$26 924.00 being monies due and payable to it in respect of beverages supplied on credit. The defendants filed a claim in reconvention in the sum of $57 183.72 being a claim for discounts due and payable to them on purchases made from the plaintiff. The plaintiffs’ claim was settled by consent of the parties at the pre-trial conference stage. What remains to be resolved is the claim in reconvention. For convenience, the defendants will be referred to as the plaintiffs in the claim in reconvention and the plaintiff in the main claim as the defendant.</p> <p>            The claim in reconvention is based on the following facts. The plaintiffs entered into a goods supply agreement wherein the defendant would supply beverages to the plaintiffs on credit for resale. The first plaintiff was represented by the second plaintiff. The plaintiffs claim is that they entered into a goods supply agreement which stipulated that the defendant would grant to them a 5% discount on all goods purchased and supplied in terms of  clause 4 .6 of the goods supply agreement. Contrary to this agreement, the defendant claims that the defendant unilaterally reduced the discount rate from 5% to 2, 6% resulting in the plaintiffs suffering prejudice in the sum claimed.</p> <p>            The defendant denies that any goods supply agreement was entered into entitling the plaintiffs to a 5 % discount.</p> <p>             The following issues were referred to trial:</p> <p>            (a)        whether the parties entered into a goods supply agreement on 1st November                      2009 entitling the plaintiff to a 5% trade discount. </p> <p>            (b)        whether the defendant breached the agreement entitling the plaintiff to a claim                  for damages.</p> <p>            The plaintiffs opened their case by calling, Joseph Mutanho a director of the first plaintiff as a witness. His evidence is as follows. He entered into a verbal contract with a salesman of the defendant known as Maramba in 2009 to sell beverages on the defendant’s behalf. The parties agreed orally that plaintiffs would get a 5% discount on all purchases and the parties traded on that basis. When they entered into the oral contract the defendant was in the process of preparing a written contract. The defendant’s representative later gave him 3 copies of a written agreement to sign and he signed it on 1 November 2009 and forwarded it to the defendant. The terms of the written agreement are similar to those of the oral agreement. The defendant did not sign or return a copy of the signed agreement. The unsigned contract was valid and would expire on 1 November 2010.In the year 2012 the defendant unilaterally changed the discount from 5% to 2, 6% without the plaintiffs’ consent. His period of complaint is from 29 March 2012 to April 2013 being the period over which the interest was reduced from 5 % to 2, 6%. The plaintiffs started making a loss after the reduction in discount rates. The plaintiffs’ claim is reduced to $43 369, 54.</p> <p>            The witness testified under cross-examination that he entered into a number of oral contracts with the defendant’s sales representatives for a discount of 5% in 2009. He acknowledged the debt owed to the defendant on 19 November 2013 and agreed to pay what he owed the plaintiff when the plaintiff had already started denying him payment and knew that he was owed. He agreed with the plaintiff that he continue to be supplied goods pending the resolution of the dispute. The defendant gave his house as security for the plaintiffs to trade with Delta and registered bonds over the house during the period of the complaints concerning the discount. If he had not agreed to register the bonds, he would not have been able to trade with the defendant.</p> <p>             The witness did not impress as a truthful witness. He seemed to be developing his case as the trial progressed.</p> <p>            The defendant called its Credit Control Manager in support of its case. His testimony is as follows. The defendant gives discounts to everyone who comes to purchase. A discount or percentage is determined from time to time. The discount is reflected on the invoice. Senior management decide the level of the discount. Some key customers get communication of the discount which is put in the system. Some customers get a discount whilst some don’t at all. During the period between 2009 and 2011 some customers were given written contracts for discounts for a period of 12 months. When the plaintiff acknowledged his debt, he does not remember him mention anything about a discount. The plaintiffs got a discount of 2, 6 which was what was due to them. He denied that the plaintiff entered into a verbal or written contract for a discount of 5% with the defendant. The sales persons who go into the market do not have authority to enter into contracts. He does not know why the contract was not signed by the defendant. It means that the plaintiffs did not meet the criteria required which is that the customer must be capable of moving large volumes, has a surety bond to support trading credit and that he must  be in a location that the company is interested in. The surety bond was meant to protect the credit. Initially the defendant’s customers were given a 5% discount. The discount was varied to 2, 6% for all of the defendant’s customers. The witness’s version was clear and straightforward.  He gave his evidence well.</p> <p>It is common cause that the parties had a trade relationship between November 2009 and March 2013. The plaintiffs enjoyed a discount on its purchases. The issue is whether there was a 5% trade discount agreed to between the parties which the plaintiffs were entitled to. The plaintiffs maintained that the parties entered into a verbal agreement for a discount of 5% before the parties entered into a written agreement on the same terms. The plaintiffs state that inside the trade relationship were special agreements which they want respected. Their complaint is that the defendant varied the discount from 5% to 2.6% unilaterally. The defendant insisted that there were no oral agreements entered into with respect to the discount of 5% .The defendant contends that it was giving its customers a trade discount of 5% which it contends it did on its own. It then reduced the discount for all customers to 2.6%. The plaintiff’s witness testified in his evidence in chief that he entered into a verbal agreement for 5% discount on all purchases with one Maramba. He did not seriously refute the defendant’s assertion that the 5% discount was given to all of the defendant‘s customers and was reduced to 2.6% for all customers. Later in cross examination he told the court that there were several oral agreements for the discount of 5% entered into with different sales persons. The different sales persons were not named except one. The justification for a number of oral contracts was not shown especially if one has regard to the fact that the terms were the same and the oral contract was said to be valid for as long as the parties still traded. The terms of the various contracts were not given. The witness was not consistent in his evidence on the verbal agreements. The witness’ story developed as the trial progressed. The idea of the verbal agreements only emerged in court. The court has noted that this position was not specifically pleaded. The declaration only speaks to an agreement having been entered into to give the plaintiffs a discount. The suggestion that there oral agreements only surfaced in oral evidence. The impression created is that the oral agreements are an afterthought.</p> <p>The evidence led does not disclose the full identity of the persons with whom the plaintiffs entered into these verbal contracts. Only a Mr Maramba was singled out as the person with whom the witness entered into one verbal contract. The defendant’s evidence that the defendant’s sales persons had no authority to enter into contracts for discounts went unchallenged. The court believed the defendant’s witness when he said that the defendant was already giving the plaintiffs a discount of 5% out of its own initiative. Further, that the percentage was reduced to 2.6 % for all the customers. It is not clear which oral agreement the plaintiffs are relying on. The date when the oral agreement was entered into was not given.</p> <p>            The plaintiff’s witness testified that he entered into a written contract for 5 % discount with the defendant on 1 November 2009. He conceded that the defendant did not sign its part of the contract. The defendant’s witness did not deny that the defendant would enter into written contracts with its major customers. He did not dispute that the draft contract the second plaintiff signed was similar to the one used by the defendant at that time. He did not deny that the defendant had been given the draft contract. He testified that it was not automatic for a customer to enter into an agreement for discount. The customer was required to meet certain criteria after which a written agreement would be entered into.  He insisted that the defendant did not enter into a contract with the plaintiffs. The evidence led discloses that the agreement for the discount was signed by the plaintiff’s representative only.</p> <p>            Generally, oral contracts are enforceable and do give rise to valid contractual relationships. The oral contract, sometimes referred to as the invisible contract, is one of the most difficult to prove. What makes this so is the lack of hard evidence of the existence of the contract. The essentials of a verbal contract are the same as those of a written contract. There must be offer and acceptance of the contract, existence of consideration, the parties must have the capacity to enter into the contract and the parties must intent to enter into the contract and create a binding legal relationship. The courts will not endorse an oral agreement were any of the essential elements of a valid contract have not been proved. The terms of the oral contract must be proved and there must be agreement and understanding of the terms of the contract by the parties. An oral contract that meets all the requirements of a contract is binding on the parties and gives rise to a legally enforceable relationship. There must be a meeting of the minds or a reasonable belief by the parties that there is consensus. A party who alleges the existence of an oral contract has the onus to prove the existence of the contract on a balance of probabilities.</p> <p>In <em>South African Railways and Habours </em>v<em> National Bank  of South Africa</em> 1924 Ad 704 at             715, the court stated:</p> <p>            “The law does not concern itself with the working of the minds of the parties to a contract, but     with the external manifestations of their minds. Even therefore if from a philosophical      standpoint the minds of the parties do not meet, yet, if by their acts their minds seem to have    met, the law will, where fraud is not alleged, look to their acts and assume that their     minds did meet and that they contracted in accordance with what the parties purport to accept             as a record of their agreement.”</p> <p> </p> <p>            A contract may be enforceable where there is evidence of the existence of the contract which may include evidence of performance of the contract and reliance on the agreement by the parties. There are cases where the contract itself has not been made perfecta by the signing of the agreement by the parties. Where the acts and conduct of the parties reveals that the minds of the parties have indeed met, the court will not hesitate to confirm the contract.  A party alleging the existence of a contract in such circumstances must lead evidence to demonstrate the existence of the contract and the parties’ understanding of the contract. Documentary evidence such as emails, faxes, showing the intention of the parties and dealings between the parties after the alleged contract was entered into serve to confirm the existence of the contract.</p> <p>            The terms of the different oral contracts were not proved. All the court was told was that there were oral agreements for a 5% discount? The plaintiffs witness says nothing about the other terms of the oral contracts. The duration of the contracts are not known. The plaintiffs’ witness created confusion by introducing the subject of the several other oral contracts. The plaintiffs later seemed to want to rely on only one of the oral contracts. The plaintiff’s witness asked in cross-examination how long the oral agreement with the salesman was to last and his response was that there was no date of termination but that the contract would last for as long as he was in business with and traded with the defendant. This is unrealistic. It means that there was need to replace it with a written contract was not shown. If the terms of the oral agreement were the same as those of the written contract, as the witness contends, it means that the oral agreement would have lapsed when the written agreement came into place. The draft contract does not state that it replaces any oral contract. The need for more than one verbal contract was not shown.</p> <p>            The plaintiffs have failed to prove the terms and essential elements of the oral contract relied on and hence failed to prove the existence of any oral agreements entered into  before November 2009. An oral contract that does not satisfy the essential elements of a contract does not constitute a valid contract and is not enforceable. The court is not convinced that there were any oral agreements in place before 1 November 2009.</p> <p>          No written agreement for discount was concluded by the parties. The fact that the defendant did not sign the contract shows clearly that the minds of that the parties were not <em>ad idem</em> that a contract be concluded. If the defendant had wanted to be bound by the contract, there would have been no reason for it to fail to return the draft contract. The plaintiffs did not show that they met all criteria for a written contract. What the evidence shows is that the plaintiffs were given different rates of discounts at different stages. The statements produced disclose that at some stage the plaintiffs were enjoying a discount of 5% which was later reduced to 2.6 %.The evidence of the defence witness that the discount enjoyed by the plaintiffs was at the discretion of the defendant, would vary from time to time and was not the subject of any contract is more probable. In the absence of a contract signed by both parties, the plaintiffs are required to show that there was performance of the contract and that the parties relied on the agreement. Evidence discloses that the plaintiffs enjoyed a 5% discount well before the written draft was signed by them. Once we accept that there was no verbal contract, it means that the discount enjoyed by the plaintiffs before 1 November 2009 was not subject of any contract. The discount they enjoyed after 1 November 2009 was clearly not subject to any contract but a continuation of the <em>status quo</em>. The fact that the plaintiffs were given a discount earlier on does not create a legally binding contract between the parties.</p> <p>            The written agreement, if concluded on 1 Nov 2009, would have been valid for only 12 months and would have expired on 1 November 2010. The plaintiffs’ cause of action only arises on 29 March 2012. The written contract would have expired by then. The plaintiff’s assertion that the verbal contracts were to last forever for as long as he was still buying beverages from the defendant is inconsistent with the fact that the unsigned draft covers a period of 12 months only. Even if it is accepted that the contract is valid, it is clear that neither party would have wanted to be bound for a period of more than 12 months. It cannot be assumed that the parties would renew the contract. The contract was not renewed. The period of the claim falls well outside the 12 months covered by the written contract. There is no evidence of any dealings between the parties which shows that the parties’ intention was to be bound by the unsigned contract.</p> <p>            The probabilities of the case favour the defendant’s position that the granting of trade discounts was at the discretion of the defendant and only deserving customers would be entitled to enter into a written contract over trade discounts. Further that the plaintiffs never entered into an agreement for a trade discount of 5% with the defendant. The defendant was entitled to reduce the discount from 5% to 2.6 %. No binding and enforceable contract came into being. The plaintiffs have failed to prove their case on a balance of probabilities.</p> <p>            Accordingly it is ordered as follows:</p> <p>            The plaintiff’s counterclaim is dismissed with costs.</p> <p><em>Chakanyuka and Associates</em>, plaintiffs’ legal practitioners</p> <p><em>G Machingambi Legal Practitioners</em>, defendant’s legal practitioners</p> </div></div></div><div class="field field-name-field-download field-type-file field-label-above"><div class="field-label">Download:&nbsp;</div><div class="field-items"><div class="field-item even"><span class="file"><img class="file-icon" alt="File" title="application/vnd.openxmlformats-officedocument.wordprocessingml.document" src="/modules/file/icons/x-office-document.png" /> <a href="https://old.zimlii.org/zw/judgment/files/harare-high-court/2018/135/2018-zwhhc-135.docx" type="application/vnd.openxmlformats-officedocument.wordprocessingml.document; length=28428">2018-zwhhc-135.docx</a></span></div><div class="field-item odd"><span class="file"><img class="file-icon" alt="PDF icon" title="application/pdf" src="/modules/file/icons/application-pdf.png" /> <a href="https://old.zimlii.org/zw/judgment/files/harare-high-court/2018/135/2018-zwhhc-135.pdf" type="application/pdf; length=139813">2018-zwhhc-135.pdf</a></span></div></div></div><span class="vocabulary field field-name-field-flynote-sync-local field-type-taxonomy-term-reference field-label-above"><h2 class="field-label">ZimLII Flynote:&nbsp;</h2><ul class="vocabulary-list"><li class="vocabulary-links field-item even"><a href="/tags-local/contract">CONTRACT</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/breach">Breach</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/consensus">Consensus</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/oral-agreement">Oral agreement</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/terms-and-conditions">Terms and Conditions</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/written-contract">Written contract</a></li></ul></span> Fri, 11 May 2018 07:18:43 +0000 admin 8781 at https://old.zimlii.org ZFC Limited v Furusa (SC 15/18, Civil Appeal No. SC 266/15) [2018] ZWSC 15 (15 March 2016); https://old.zimlii.org/zw/judgment/supreme-court-zimbabwe/2016/15 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p><strong>DISTRIBUTABLE</strong><strong>   (14) </strong></p> <p> </p> <p><strong>ZFC     LIMITED </strong></p> <p><strong>v</strong></p> <p><strong>TAPIWA     JOEL     FURUSA</strong></p> <p> </p> <p> </p> <p><strong>SUPREME COURT OF ZIMBABWE</strong></p> <p><strong>ZIYAMBI JA, GOWORA JA &amp; UCHENA JA</strong></p> <p><strong>BULAWAYO, </strong>15 March 2016</p> <p> </p> <p> </p> <p><em>T. Zhuwarara</em>, for the appellant                                                                                         </p> <p><em>L. Uriri</em>, for the first respondent</p> <p> </p> <p> </p> <p><strong>                        GOWORA JA</strong>:          This was an appeal against the whole judgment of the High Court delivered on 13 May 2015. After perusing the record and hearing the submissions of the parties, this Court allowed the appeal and indicated that the reasons would be availed in due course. The following are the reasons for the order:</p> <p> </p> <p>                        The appellant entered into an agreement with a company called Farmcrop Enterprises in terms of which Farmcrop Enterprises would sell fertilizers and crop chemicals on behalf of the appellant after which sale, it would remit the proceeds to the appellant. On 3 July 2009, the respondent bound himself as surety and co-principal debtor with Farmcrop Enterprises, (“the company”) for the due performance, by the latter, of its obligations in favour of the appellant.</p> <p> </p> <p>                        It was alleged that the company sold fertilisers and crop chemicals on behalf of the appellant between 31 January 2011 and 12 September 2011 but failed to account to the appellant for the sum of US$46 717.16. On 13 September 2011, the appellant wrote to the respondent demanding payment in the sum of US$46 717.16 which it stated had become due and payable as a result of the company’s failure to pay. The demand was made on the basis of the deed of suretyship that the respondent had signed in favour of the appellant.</p> <p> </p> <p>                        On 26 September 2011, the respondent and one Lazarus Nyakudya wrote a letter to the appellant in which they acknowledged their indebtedness to the appellant and also expressed their wish to transfer the suretyship of the respondent to Lazarus Nyakudya.  On the same day, Lazarus Nyakudya signed a deed of suretyship as surety and co-principal debtor with Farmcrop Enterprises in favour of the appellant on the same terms as the deed of surety signed by the respondent, save to say that Lazarus Nyakudya expressly renounced all the benefits available to a surety.</p> <p> </p> <p>                        The appellant issued summons against the company and the respondent on 1 December 2011 claiming payment of US$46 717.16. The former was in default and the appellant obtained judgment in default in the sum claimed.</p> <p> </p> <p>    The respondent entered an appearance to defend and filed a plea. It was respondent’s defence that he had been wrongly cited because the transfer of his suretyship to Lazarus Nyakudya had the effect of absolving him of his duty as surety towards the appellant.</p> <p> </p> <p>After the close of pleadings, the matter was referred to a judge in chambers for the holding of a pre-trial conference. The parties agreed at the pre-trial conference that the claim should be reduced to US$40 954.15. The only issue referred to trial was whether or not the appellant accepted that the respondent was no longer bound to the appellant as a surety and co-principal debtor whether he was properly substituted by Lazarus Nyakudya. As a consequence the focus for trial was the liability of the respondent.</p> <p> </p> <p>Both parties called witnesses in support of their positions. The respondent also called as a witness a former employee of the appellant. The court <em>a quo</em> made a finding that the evidence showed that by accepting a second deed of surety from Lazarus Nyakudya on 26 September 2011, the appellant had exonerated the respondent of any form of liability. It held that the correct debtor was Lazarus Nyakudya because the first deed of surety signed by the respondent was compromised by the second which was signed by Lazarus Nyakudya. In the result, the appellant’s claim was dismissed. Aggrieved by this decision, the appellant appealed to this Court on the following grounds:</p> <ol> <li>The Learned Judge misdirected himself when he found that the Deed of Suretyship signed by the respondent on 3 July 2009 had been cancelled when in fact there was no evidence to demonstrate that the Deed of Suretyship had been cancelled.</li> <li>The Learned Judge erred and misdirected himself by failing to pay due regard to the provisions of clause 5 of the Deed of Suretyship which provided that it would remain in force until the appellant had agreed in writing to cancel the Deed of Suretyship. There was no written document cancelling the aforesaid Deed of Suretyship.</li> <li>The Learned Judge misdirected himself by finding that there was a novation when the respondent had not alleged that the new Deed of Suretyship that was signed by Lazarus Nyakudya created a novation of the principal debt. The deed of Suretyship signed by the Respondent could not have been terminated by the Deed of Suretyship signed by Lazarus Nyakudya which said nothing about it.</li> <li>The Learned Judge fell into error as the conduct of the parties quite clearly was not consistent with the intention to create a novation as the appellant did not cancel the original Deed of Suretyship.</li> <li>The Learned Judge erred by admitting a letter written by the appellant’s Treasury Accountant to its Legal Practitioners as this evidence was inadmissible in terms of s 8(6) of the Civil Evidence Act [<em>Chapter 8:01</em>].</li> </ol> <p> </p> <p>From the grounds of appeal, there were two issues for determination. These were:</p> <ol> <li>Whether there was a transfer of suretyship from the respondent to Lazarus Nyakudya.</li> <li>Whether there was a violation of s 8(2) of the Civil Evidence Act [<em>Chapter 8:01</em>].</li> </ol> <p> </p> <p>I shall deal with the issues raised.</p> <ol> <li><strong>Whether there was a transfer of suretyship from the respondent to Lazarus Nyakudya.</strong></li> </ol> <p>The appellant’s case was that without the respondent producing a written cancellation of the agreement as required in clause 5 of the Deed of suretyship signed by the respondent, the deed of suretyship still bound the respondent thus the court a quo erred in dismissing its claim against him. Clause 5 of the deed of suretyship reads as follows:</p> <p>“The Surety shall remain in full force as a continuing security, notwithstanding an intermediate settlement or fluctuations in the amounts outstanding from time to time by the Debtor in terms of the contract in place, notwithstanding the death or legal disability of me, until the said ZFC Limited has agreed in writing to cancel this suretyship and the suretyship shall further remain in force as a continuing security, binding upon me, notwithstanding that it may on any ground in whole or in part have ceased to be binding on me.”</p> <p> </p> <p> </p> <p>                        On the basis of this clause the appellant argued that it did not cancel the deed of surety in writing and thus the respondent remained indebted. It relied on the case of <em>Muchabaiwa v Grab Enterprises (Pvt) Ltd </em>1996 (2) ZLR 691 (SC) in which KORSAH JA stated:</p> <p>“The general principle which applies to contracts, and commonly designated as <em>caveat subscriptor</em>, is that a party to the contract is bound by his signature, whether or not he has read or understood the contract, or the contract was signed with blank spaces later to be filled in. Expatiating on this principle in <em>National and Grindlays Bank v Yelverton</em> 1972 (1) RLR 365 (G) at 367; 1972 (4) SA 114 (R) at 116G-H, DAVIES J cited with approval, the following statement by INNES CJ in <em>Burger v Central South Africa Railways</em> 1903 TS 571 and 578 (decided before the promulgation of s 6 of the General Laws Amendment Act):</p> <p>“It is a sound principle of law that a man, when he signs a contract, is taken to be bound by the ordinary meaning and effects of the words which appear over his signature.””</p> <p> </p> <p> </p> <p>                        This authority highlights the principle that the signatory to an agreement is bound by the impression of assent created by his or her signature in the mind of the contract enforcer. The appellant therefore averred that the parties were bound by clause 5 and that the deed of suretyship should have been cancelled in writing by the appellant in order to absolve the respondent from liability.</p> <p>                        The respondent, <em>per contra</em>, argued that the appellant’s conduct showed that it exonerated him from liability and accepted the transfer of suretyship from him to Lazarus Nyakudya.  He argued that on 26 September 2011, he wrote a letter addressed to the appellant with Lazarus Nyakudya a part of which read:</p> <p>“… As such, we wish to register the transfer of surety to Mr Lazarus Nyakudya who will arrange the debt repayment arrangements with ZFC.”</p> <p> </p> <p> </p> <p> </p> <p>                        The respondent submitted that this letter communicated their intention to transfer the suretyship to Lazarus Nyakudya and the communication from Chitauro that his superiors agreed to such transfer was proof that he was exonerated from liability. The respondent also argued, that the letter from the appellant to its legal practitioners showed that the liability had shifted from the respondent to Lazarus Nyakudya. The letter stated the following:</p> <p>“Re: HANDED OVER DEBTOR: FARMCORP ENTERPRISE RESPONSE</p> <p> </p> <p>Please find attached the response from the above mentioned debtor. They have acknowledged the debt and written a letter to transfer the surety from Tapiwa Joel Furusa, to one, Lazarus Nyakudya.</p> <p> </p> <p>May you proceed with the recovery of the debt. We hope the information available will aid you in this case …”</p> <p> </p> <p> </p> <p> </p> <p>                        It is on the basis of that letter that the respondent submitted that the appellant accepted that his obligation as a surety had been transferred to Lazarus Nyakudya and that this was also confirmed by the deed of surety signed by Lazarus Nyakudya. The question that thus lies for determination by this Court is whether the documents and evidence produced by the respondent in the court <em>a quo</em> show that his deed of suretyship was cancelled.</p> <p> </p> <p>The respondent called one Pondai Chitauro to testify on his behalf. He was formerly employed by the appellant as a debtor’s clerk. He had dealt with the respondent during the relevant period and he was the clerk seized with the Farmcrop debt. It was he who received the letter from the respondent and Nyakudya proposing the transfer of the suretyship from the respondent to Nyakudya. He had given the letter in question to the appellant’s treasury accountant who instructed him to permit Nyakudya to execute a deed of suretyship. However under cross-examination he accepted that there never was a formal letter from the appellant cancelling the deed of suretyship executed by the respondent.</p> <p> </p> <p>The parties were bound by the clause which stipulated that the deed of suretyship would be cancelled in writing by the appellant and it was admitted by all witnesses who testified on behalf of the respondent that there was no document which explicitly stated that the appellant had cancelled the deed of suretyship. That alone is evidence that the respondent still remained liable in terms of the deed of suretyship.</p> <p> </p> <p>                        As correctly stated by counsel for the appellant, the letter it wrote to its legal practitioners was colourless and did not reflect that the appellant cancelled the agreement of sale. It merely stated that Farmcrop had written a letter to transfer suretyship from the respondent to Lazarus Nyakudya.  It was erroneous for the court <em>a quo</em> to attach meaning to the letter which is not clear from its wording. The remarks of GUBBAY JA (as he then was) in <em>Mxumalo &amp; Ors v Guni </em>1987 (2) ZLR 1 (S) at 8 come to mind<strong>. </strong>He stated:-</p> <p>“The language used is plain and unambiguous and the intention of the Law Society is to be gathered there from. It is not for a court to surmise that the Law Society may have had an intention other than that which clearly emerges from the language used.”</p> <p>                        These remarks are apposite. It was not for the court <em>a quo</em> to read the letter to mean that the appellant had accepted the purported transfer of suretyship from the respondent to Lazarus Nyakudya. The clear language used in the letter does not reflect such an intention.</p> <p>                        The court <em>a quo</em> also erred in making a finding that the first deed of suretyship signed by the respondent was compromised by the one signed by Lazarus Nyakudya. Compromise is defined by R.H Christie in ‘The Law of Contract in South Africa’ 3rd edition at page 505 as follows:</p> <p>“Compromise, or <em>transactio</em>, is the settlement by agreement of disputed obligations, whether contractual or otherwise.  If any offer to settle in particular terms is not accepted, the offeree cannot treat an inseparable part of the offer and sue on it.  Even a criminal charge may be settled by the process known as plea bargaining and the resulting compromise will be enforceable.  It is a form of novation differing from the ordinary novation in that the obligations novated by the compromise must previously have been disputed or uncertain, the essence of the compromise being the final settlement of the dispute or uncertainty.”</p> <p>                        What is derived from the above definition is that a compromise is a settlement of a disputed obligation through another agreement which then replaces the principal agreement. <em>In casu</em>, the appellant accepted the deed of surety signed by Lazarus Nyakudya but did not cancel the first deed executed by the respondent. Consequently there was no compromise because as already highlighted, the appellant had to cancel the deed of suretyship in writing to make it valid. That this is a correct reflection of the true status between the parties is borne out by the evidence of the respondent himself and Nyakudya.</p> <p>                        The respondent accepted that in terms of clause 5 of the deed, the appellant had to agree in writing to the cancellation of the suretyship. He also admitted that the letter written by the appellant to its legal practitioners did not expressly state that it had agreed to the transfer of his indebtedness to Nyakudya. He was relying on an explanation given to him by Chitauro. Further, to compound matters, by the time he and Nyakudya wrote the letter proposing the transfer of his indebtedness the debt was already due as a letter of demand had been sent to him.</p> <p>                        Nyakudya’s evidence was to the effect that the debt had been transferred and that he had assumed liability in the place of the respondent. He accepted however that at no stage did the appellant state or intimate that it had cancelled the deed executed by the respondent.</p> <p>                        The court <em>a quo</em> failed to give due weight to the critical point that the deed of suretyship could only be cancelled by the appellant in writing in terms of clause 5 of the deed. Contracts are sacrosanct unless the evidence shows that they were not entered into freely and voluntarily. R.H Christie in <em>Business Law in Zimbabwe </em>at page 67 states:</p> <p>“The business world has come to rely on the principle that a signature on a written contract binds the signatory to the terms of the contract and if this principle were not upheld any business enterprises would become hazardous in the extreme. The general rule, sometimes known as <em>caveat subscriptor</em> rule is therefore that a party to a contract is bound by his signature whether or not he has read or understood the contract.”</p> <p>                        It is on the basis of this principle that the court <em>a quo</em> ought to have found that the respondent was still indebted to the appellant.  There was no evidence before the court that showed that the deed of suretyship was cancelled by the appellant in writing. The court <em>a quo</em> thus erred in finding that the respondent was incorrectly sued as a debtor by the appellant.</p> <ol> <li><strong>Whether there was a violation of Section 8(2) of the Civil Evidence Act [<em>Chapter 8:01</em>].</strong></li> </ol> <p>                        Appellant alleges that the court <em>a quo</em> erred by admitting exhibit 5, the letter it wrote to its legal practitioners, as evidence as this was in contravention of s 8(2) of the Civil Evidence Act. The provision states:</p> <p>“(2) No person shall disclose in evidence any confidential communication between—</p> <p>(<em>a</em>) a client and his legal practitioner or the legal practitioner’s employee or agent; or</p> <p>(<em>b</em>) a client’s employee or agent and the client’s legal practitioner or the legal practitioner’s employee or agent;</p> <p>where the confidential communication was made for the purpose of enabling the client to obtain, or the legal practitioner to give the client, any legal advice.”</p> <p>                        Although the respondent stated that he was given the letter by Chitauro, it was evident that the appellant and Chitauro had not parted on the best of terms. The court <em>a quo</em> stated that it was inclined to accept the argument from the respondent that the former had allowed the letter to fall into the hands of the respondent and that as a result it had tacitly waived the privilege afforded under the Act. In <em>Law Society v Minister of Transport &amp; Communications &amp; Anor</em> 2004 (1) ZLR 257 (S) at 261F-G, CHIDYAUSIKU CJ, had occasion to comment as follows:</p> <p>“The court was referred to a wide range of authorities that underpinned the importance and significance of the lawyer client privilege. In the case of <em>Baker v Campbell</em> (1983) 153 52(HCA) it was held that the privilege existed not simply in relation to litigation but to advice sought between a client and a lawyer so that the client can regulate his affairs. In another case cited to this court, it was held that the privilege between lawyer and client even overrode the policy consideration that no innocent man should be convicted of a crime –see <em>S v Safatsa &amp; Ors</em> 1988 (1) SA 868(A), at pp 878-887. In this regard, see also Mahomed v President of the Republic of <em>South Africa &amp; Ors</em> 2001(2) SA 1145(C) at pp 1151-1155. The sanctity of the lawyer-client privilege and the need to minimize inroads into that privilege are emphasized in a number of Canadian cases that were cited by the applicant.”</p> <p>                          The court <em>a quo</em> held that the appellant waived its privilege by allowing the respondent to have possession of the letter. Clearly the letter is a communication between a legal practitioner and a client and would be covered by privilege unless it can be shown that the appellant consented to the letter being given to the respondent.</p> <p>                        The view I take is that there was no evidence placed before the court <em>a quo</em> that the appellant consented to the production of the letter to the respondent. The <em>onus</em> was on the respondent to show waiver of the privilege.  This <em>onus</em> was not met and it was a misdirection on the part of the court <em>a quo</em> to hold the letter admissible without tangible evidence of such waiver.</p> <p>The appeal clearly had merit and that is the reason that it was allowed by the court.  Accordingly, the Court made the following order:</p> <ol> <li>The appeal be and is hereby allowed with costs.</li> <li>The judgment of the court <em>a quo</em> is set aside and substituted with the following:</li> </ol> <p>“Judgment is granted in favour of the plaintiff against the second defendant Tapiwa Joel Furusa for the payment of US$40 954.18 with interest thereon at the rate of 5 per cent per annum from 18 September 2011 to the date of payment in full.</p> <p>The costs of this action shall be paid by the second respondent on the legal practitioner client scale.”</p> <p><strong>ZIYAMBI JA:</strong>                I agree</p> <p><strong>UCHENA JA:                </strong>I agree</p> <p><em>Messrs Gill, Godlonton &amp; Gerrans</em>, appellant’s legal practitioners</p> <p><em>Matsikidze &amp; Mucheche</em>, respondent’s legal practitioners</p> </div></div></div><div class="field field-name-field-download field-type-file field-label-above"><div class="field-label">Download:&nbsp;</div><div class="field-items"><div class="field-item even"><span class="file"><img class="file-icon" alt="File" title="application/vnd.openxmlformats-officedocument.wordprocessingml.document" src="/modules/file/icons/x-office-document.png" /> <a href="https://old.zimlii.org/zw/judgment/files/supreme-court-zimbabwe/2016/15/2018-zwsc-15.docx" type="application/vnd.openxmlformats-officedocument.wordprocessingml.document; length=46311">2018-zwsc-15.docx</a></span></div><div class="field-item odd"><span class="file"><img class="file-icon" alt="PDF icon" title="application/pdf" src="/modules/file/icons/application-pdf.png" /> <a href="https://old.zimlii.org/zw/judgment/files/supreme-court-zimbabwe/2016/15/2018-zwsc-15.pdf" type="application/pdf; length=164929">2018-zwsc-15.pdf</a></span></div></div></div><span class="vocabulary field field-name-field-flynote-sync-local field-type-taxonomy-term-reference field-label-above"><h2 class="field-label">ZimLII Flynote:&nbsp;</h2><ul class="vocabulary-list"><li class="vocabulary-links field-item even"><a href="/tags-local/contract">CONTRACT</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/caveat-subscriptor">Caveat subscriptor</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/terms-and-conditions">Terms and Conditions</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/variation-terms">variation of Terms</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/suretyship">SURETYSHIP</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/surety-%E2%80%93-liability">Surety – liability of</a></li></ul></span><div class="field field-name-field-legislation-considered field-type-node-reference field-label-above"><div class="field-label">Legislation considered:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/zw/legislation/consolidated-act/chapter-801">Civil Evidence Act,Chapter 8:01</a></div></div></div> Wed, 25 Apr 2018 09:44:05 +0000 admin 8751 at https://old.zimlii.org Ilasha Mining (PVT) Limited v Yatakala Trading (PVT) LTD t/a Viking Hardware Distributors (HB 3-18, HC 3283/17 X REF HC 3165/17; 2965/17) [2018] ZWBHC 3 (01 February 2018); https://old.zimlii.org/zw/judgment/bulawayo-high-court/2018/3 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p><strong>ILASHA MINING (PVT) LTD</strong></p> <p> </p> <p><strong>And</strong></p> <p> </p> <p><strong>YATAKALA TRADING (PVT) LTD</strong></p> <p><strong>t/a VIKING HARDWARE DISTRIBUTORS</strong></p> <p> </p> <p>IN THE HIGH COURT OF ZIMBABWE</p> <p>MAKONESE J</p> <p>BULAWAYO 18 DECEMBER 2017 &amp; 1 FEBRUARY 2018</p> <p> </p> <p><strong>Urgent Chamber Application</strong></p> <p> </p> <p><em>Advocate L. Nkomo</em> for the applicant</p> <p><em>Advocate Harshiti</em> for the respondent</p> <p>            <strong>MAKONESE J:        </strong>The applicant approached this court on an urgent basis seeking a declaratory order in the following terms:</p> <p>“1.       It is hereby declared that no binding contract of sale was concluded between the applicant and the respondent in respect of equipment listed in the pro forma invoices QU106252 and QU106278 issued by the respondent to the applicant and submitted by the applicant to Fidelity Printers and Refiners (Pvt) Ltd.</p> <p>2.         Any purported transaction by the respondent utilizing the loan funds of          US$1 808 829,00 paid by Fidelity Printers and Refiners (Pvt) Ltd into the respondents’ bank accounts be and is hereby declared null and void and of no force and effect.</p> <p>3.         The respondent be and is hereby ordered to pay to the applicant or to the applicant’s nominee the sum of US$1 808 829,00 together with interest thereon at the prescribed rate of interest calculated from the date of this order to date of full payment.</p> <p>            4.         The respondent to pay the costs of suit on an attorney and client scale.”</p> <p><strong>Factual background</strong></p> <p>            The facts giving rise to this application for a declaratur are that on 6th September 2017, the applicant concluded a written loan facility agreement with Fidelity Printers and Refiners (Pvt) Ltd (hereinafter referred to as Fidelity).  In terms of the loan agreement funds to an aggregate amount of US$2 500 000 were availed to the applicant for the purposes of capitalizing its business operations by <em>inter alia</em>, purchasing mining equipment to ramp up gold mining and processing.  Prior to the conclusion of the loan facility agreement with Fidelity the applicant requested pro-forma invoices from the respondent listing particular equipment and the prices for the sole purpose of submitting the same to fidelity as an indication of the type of equipment the applicant intended to purchase and the price range for such equipment.  Following the submission by the applicant of the respondent’s pro-forma invoices to Fidelity, the applicant and Fidelity agreed on the disbursement of part of the funds pursuant to the provisions of clause 5.2 of the loan agreement.  It is important to observe here that the loan agreement was purely between Fidelity and the applicant.  The respondent was essentially not part of that loan agreement and there was no privity of contract between Fidelity and respondent.  It is clear from the provisions of the loan agreement that the loan facility funds amounting to US$1 808 899,00 were released by Fidelity directly to the respondent, at the instance, and, for the benefit of the applicant.  Respondent had been identified as a potential supplier of the mining equipment intended to be purchased by the applicant.  After Fidelity transferred part of the loan facility funds, the respondent and applicant failed to agree on the pricing of the mining equipment.  Applicant contended that the prices were highly inflated and sought quotations from other suppliers for comparison.  The respondent intimated that it had utilized the loan funds in its possession by purchasing part of the equipment and called upon applicant to collect such equipment.  The applicant, refused to sign the pro-forma invoices and to collect the equipment purportedly purchased with the loan funds without a prior contract between applicant and respondent.  The applicant’s position is that the respondent had no mandate or legal basis to purport to utilize the applicant’s loan funds for any purpose without a prior agreement.   Respondent refused to release the loan funds, whilst insisting that the applicant should instead collect part of the mining equipment that had been sourced.  Faced with the respondent’s refusal to release the loan funds as requested by applicant, applicant filed an urgent chamber application on an <em>ex parte</em>  basis  under case number HC 3165/17 seeking urgent relief in the form of an order compelling respondent to release the funds to the applicant.  On the 1st of December 2017 a provisional order was granted in favour of the applicant against the respondent.  It emerged that on 5th December 2017 respondent had filed an appeal at the Supreme Court under case number SC 1024/17 against the granting of the provisional order .On the 12th December 2017 the Supreme Court issued a consent order staying execution of a writ issued under case number HC 3165/17.   On the 13th December 2017 an urgent application for leave to execute pending appeal was removed from the roll as it had been overtaken by the Supreme Court order.   On the 14th December 2017, the applicant filed a notice of abandonment of the provisional order granted in its favour under case number HC 3165/17.</p> <p>            On 18th December 2017, the respondent filed a notice of opposition in this matter which was predicated on an opposing affidavit deposed by Mr S. Shlomo Lepar.  The position taken by the respondent is that the matter is not  urgent nor merited.  The respondent raised the following points <em>in limine</em>:-</p> <p>            Firstly, respondent contends that there is a clear dispute of fact which cannot be decided on the papers,  but  through the leading of <em>viva voce</em> evidence.  The applicant asserts that there was no contract concluded by applicant and respondent, whilst on the other hand respondent contends that a contract of sale was reached between the parties.</p> <p>            Secondly, respondent argued that the matter was not urgent.  Thirdly the respondent argued that he non-joinder of Fidelity to these proceedings was fatal.</p> <p>            Fourthly, the notice of abandonment is incompetent in that the applicant should have ensured the reversal of the transfer of a payment of US$176 308,00, an amount transferred from respondent’s bank account pursuant to the provisional order granted under case number HC 3165/17.</p> <p>Finally, that last point in<em> limine</em> raised by respondent is that the order sought by the applicant, in particular paragraph 3 cannot be granted in that it is inconsistent with section 14 of the High Court Act (Chapter 7:06) which is the basis of the application.</p> <p> </p> <p><strong>Issues for determination</strong></p> <p>            In this matter these  are the issues that must be determined and resolved.</p> <ul> <li>Whether or not the matter is urgent.</li> <li>Whether or not the applicant has met the requirements of a declaratory order as enshrined in section 14 the High Court.</li> <li>Whether or not there is a material dispute of fact which cannot be decided on the papers filed of record.</li> <li>Whether or not the non-joinder of Fidelity Printers and Refiners (Pvt) Ltd is fatal.</li> <li>Whether or not the notice of abandonment is incomplete and if so whether that is fatal to the application.</li> <li>Most pertinently, whether or not a valid contract was concluded between the parties.</li> </ul> <p>I now proceed to deal with these issues seriatim.</p> <p><strong>Whether the matter is urgent</strong></p> <p>            The first issue I must dispose of is whether or not this matter is urgent.  I must decide based on the facts placed before me whether this one of those special cases which deserves to have the normal and ordinary rules of this court suspended, the stipulated time periods to be waived, other litigants’ interests to be temporarily overlooked the judge to “drop” everything, have his vacation interrupted, and give audience to the applicant because failure to do so would result in “palpable injustice” in the circumstances.  Put differently, can it be said that if this applicant is not allowed to be heard ahead of other litigants who are already in the queue there will be an inexcusable failure to do justice timeously, such that any subsequent attempt to do justice would be meaningless or ineffective.  The subject of what constitutes urgency has been discussed and decided in numerous cases in this court and the Supreme Court.  It is now settled that:</p> <p><em>“A party who brings proceedings urgently gains a considerable advantage over persons whose disputes are being dealt with in the normal course of events.  This preferential treatment is only extended where good cause can be shown for treating one litigant differently from most litigants.  For instance where, if it is not afforded, the eventual relief will be hallow because of the delay in obtaining it.”</em></p> <p>            See <em>Dilwin Investments (Pvt) Ltd t/a Formscaff</em> v <em>Japa Engineering Comp Ltd</em> HH-116-98.</p> <p>            See also <em>Kuvarega</em> v <em>Registrar General &amp; Anor</em> 1998 (1) ZLR 189</p> <p>            What has been established by the various decided cases is that a matter is urgent if it cannot wait when the need to act arises.  A mater will be evidently urgent  if irreparable harm is likely to arise if the matter is not dealt with on an urgent basis.  The applicant must demonstrate that he has treated the matter in an urgent manner and that there is no satisfactory remedy available to the applicant.</p> <p>            The critical question faced by the court in determining whether the matter is urgent is in the first place, to decide whether or not to give priority to the application by dealing with it on an urgent basis.  In arriving at a decision on this issue the court is called upon to exercise its discretion.  Such discretion must, however be exercised judiciously taking into account the factors argued in favour of and against the matter being treated as urgent.  If convinced that the matter is urgent, a hearing must be conducted and the court must then make an appropriate order.  If the court is not convinced that the matter is not urgent, the matter will not be heard and removed from the roll, in which event, the matter may be referred for hearing on the ordinary roll of court applications.</p> <p>            In this matter it is clear that the urgency is founded and predicted on commercial urgency.  The applicant cannot be expected to wait for the matter to proceed on the ordinary roll of applications.  A huge amount of money has been released into the respondent’s bank account.  Applicant is suffering serious financial prejudice as the loan facility with Fidelity has to be serviced and will attract huge penalties by way of interest accrued.  It is evident that this one of those cases which cannot wait.  There can be no doubt that irreparable prejudice will result, if the matter is not dealt with immediately and without any delay.  There is <em>prima facie</em> evidence that the applicant treated the matter as urgent.  Most importantly, there can be no satisfactory relief to the applicant .</p> <p> </p> <p> To that end and for this cause, I find that the applicant has met the criteria set out for the requirements of urgency as set out in decided cases.</p> <p><strong>Whether applicant has met the requirements for a declaratory order</strong></p> <p>            It is trite that an application for declaratory order ought to be made in terms of the High Court Act (Chapter 7:06).  Section 14 of the Act provides that:</p> <p>“The High Court may in its discretion, at the instance of any interested person, inquire into and determine any existing, future or contingent right or obligation, notwithstanding that such person cannot claim any relief consequential upon such determination.”</p> <p>            It is axiomatic that an application for a declaratory order ought to be considered and ventilated in light of the provisions of section 14 of the High Court Act.  The requirements of declaratory order were succinctly and aptly considered in the case of <em>Johnsen</em> v <em>Agricultural Finance Corporation</em> 1995 (1) ZLR 65.  The court stated the position as follows:</p> <p><em>“The condition precedent to the grant of a declaratory order under section 14 of the High Court Act of Zimbabwe, 1981 is that the applicant must be an “interested person”, in the sense of having a direct and substantial interest in the subject matter of the suit which could be prejudicially affected by the judgment of the court.  The interest must concern an existing, future or contingent right.  The court will not decide abstract, academic or hypothetical questions unrelated thereto.  But the presence of an actual dispute or controversy between the parties is not a pre-requisite to the exercise of jurisdiction.  See Ex P Chief Immigration Officer 1993 (1) ZLR 122 (S) at 129F-G; 1994 (1) SA 370 (25) at 376G-H; Munn Publishing (Pvt) Ltd v ZBC 1994 (1) ZLR 337 (S) and the cases cited …”</em></p> <p>            In my view  the requirements for the grant of a declaratur have been met.  The second stage of the enquiry is to decide whether in the case before me is a proper one for the exercise of my discretion under section 14 of the High Court Act.  It is my considered view that the application is one which enjoins this court to exercise its discretion judiciously in terms of section 14 of the High Court Act.  I am satisfied that the existing rights and obligations of the parties have been succinctly placed in the founding affidavit and the opposing affidavits.  A declaratory order is manifestly and potentially definitive in that in the event that I decide in favour of the applicant that no valid contract of sale was concluded the respondent will have no modicum of any right to continue holding on to the funds paid to it by Fidelity.  Whether, I should however, grant the order as  prayed, is an entirely different matter.</p> <p><strong>Whether there is a material dispute of fact incapable of resolution on the papers</strong></p> <p>            The respondent contended that there is a clear dispute of fact which cannot be decided on the papers without leading oral evidence.  That dispute being whether applicant and respondent concluded a binding contract of sale.  The nub of the respondent’s argument is that once the pro-forma invoices were transmitted to Fidelity and once payment was processed and effected on the strength of such invoices, the applicant and respondent entered into a valid contract of sale.  The applicant contends that there is no material dispute of fact which cannot be resolved on the papers.  In other words the court must decide on the papers whether the requirements of a valid contract exist and if not, whether a declaratur should be made to that effect.  No <em>viva voce</em> evidence is needed to settle the issue as the parties’ respective positions is articulated in the papers.  In <em>Douglas Muzanenhamo</em> v <em>Officer in Charge CID Law &amp; Order and Others </em>CCZ 3/13, the Constitutional Court held as follows:</p> <p><em>“As a general rule in motion proceedings the courts are enjoined to take a robust and common sense approach to disputes of fact and to resolve the issues at hand despite the apparent conflict.  The prime consideration is the possibility of deciding the mater on the papers without causing injustice to either party. …”</em></p> <p>            See also <em>Masukusa</em> v <em>National Foods Ltd and Anor</em> 1983 (1) ZLR 232</p> <p>            In <em>Supa Plant Investments (Pvt) Ltd</em> v <em>Chidavaenzi </em>2009 (2) ZLR 132 (H) the Makarau(JP) (as she then was)  held that:</p> <p><em>“A material dispute of fact arises when material facts alleged by the applicant are disputed and traversed by the respondent in such a manner as to leave the court with no ready answer to the dispute between the parties in the absence of further evidence.”</em></p> <p>            In this regard, and on the facts of this matter, the mere allegation of a possible dispute of fact is not conclusive of its existence.</p> <p>            See <em>Room Hire Co (Pty) Ltd</em> v <em>Jeppe Street Mansions (Pty) Ltd</em> 1949 (3) SA 1155 (T)</p> <p>            The common thread that runs through the decided cases is that even where material disputes of fact exist, the court should take a robust and common sense approach to the dispute and endeavour to resolve it.  If it succeeds then the matter ends there.  If it does not, then the court has the option to either dismiss the application or refer the matter to trial for a resolution of the dispute.  The court should only dismiss the application outright where the dispute must have been apparent when the applicant embarked on the application procedure.</p> <p>            It is my finding that the alleged dispute of facts is not material.  The alleged disputes are indeed capable of resolution without the need to call viva voce evidence.  The alleged dispute of facts is not material to the disposition of whether a declaratory order is appropriate in the circumstances of the case.  It is common cause that both parties have already adduced and produced their documentary evidence to buttress and advance their arguments.  Oral evidence will simply be a regurgitation of what has already been pleaded in the papers.  I accordingly dispose of this preliminary issue and make a finding that any alleged disputes of fact are capable of resolution on the basis of the papers filed of record.</p> <p><strong>Whether non-joinder of Fidelity Printers is fatal to the application</strong></p> <p>It is settled that the non-joinder or mis-joinder of a party does not and cannot render the proceedings is fatal.  Order 13 Rule 87(1)  of the High Court Rules provides that:</p> <p>“No cause or matter shall be defeated by reason of the mis-joinder or non-joinder of any party and the court may in any cause or matter determine the issues or questions in dispute so far as they affect the rights and interests of the persons who are parties to the cause or matter.”</p> <p>            In this matter the court is required to determine whether or not a valid contract was entered into between the parties before it.  Be that as it may, joining Fidelity would not take the matter any further.  The court is well placed to determine the rights and obligations of the parties to this dispute inspite  of the non-joinder of Fidelity.  Consequently, the point <em>in limine</em> relating to non-joinder must fail.</p> <p>            See <em>Nyamweda </em>v <em>Georgias </em>1988 (2) ZLR 422 (S) and <em>Rodger &amp; Ors</em> v <em>Mulier &amp; Ors</em> HH-2-10.</p> <p><strong>Whether or not a valid contract was concluded</strong></p> <p>            The position of our law of contract is that for there to be a binding contract there must be an offer and acceptance.  The offer must be unqualified and unequivocal.  The respondent’s position is that indeed there was a contract of sale between the parties.  The relief sought by the applicant is accordingly challenged.  From a reading of the loan facility agreement, Fidelity reserved the right to make payments directy to respondent.  Applicant agreed to such an arrangement and signed the loan agreement.  In terms of clause 5.2 of the agreement the monies paid to the respondent were in respect of specific pro-forma invoices.  The applicant consented to  the payments being  made to respondent well knowing that such payments were for the purchase of specific equipment listed in the pro-forma invoices.  The funds totaling US$1 808 899,00 were paid on the basis of two pro-forma invoices.  There were a number of communications between the parties confirmed by “whatsapp” chats where the applicant undertook to expedite payments on the remaining invoices.  Once procurement of equipment had commended, applicant was kept informed.  Applicant’s conduct suggests that there was indeed a binding contract between the parties.  It is my view, that the parties reached a contract of sale in terms of which the applicant obtained pro-forma invoices for payment.  An offer was made and accepted.  Payments were made to the respondent and procurement of the goods commenced.  There was a clear <em>consensus</em> <em>ad idem</em> between the parties.  If there was no such consensus the applicant should have objected immediately.  The legal position is to the effect that:</p> <p><em>“A sale in Roman-Dutch law has been defined as a contract in which one person promises to deliver a thing to another, who promises to deliver a thing to another, who on his part promises to pay a certain price.”</em></p> <p>            See <em>Chikoma</em> v <em>Mukwena</em> 1998 (1) ZLR 541.</p> <p>            In <em>Hoffmann &amp; Charvalho</em> v <em>Minister of Agriculture</em> 1947 (2) SA 855 (T) at 860, the court stated as follows:</p> <p><em>“Where parties intend to conclude a contract, thin they have concluded a contract, and proceed to act as if the contract were binding and complete, I think the court ought rather to try and held the parties towards what they both intended rather than obstruct them by legal subtleties and assist one of them to escape the consequences of all that he has done and all that he has intended …”</em></p> <p>            I am acutely aware that the test for a meeting of the minds of the parties should involve the effect of their conduct on whether or not there was a contract.  <em>Consesus ad idem</em> does not only take the subjective and mental state of the parties, but also takes into consideration the conduct of the parties.</p> <p>            See <em>Smith </em>v <em>Hughes</em> (1871) LR6QB587 where the test was set out in the following terms:</p> <p><em>“If whatever a man’s real intention may be, he so conducts himself that a reasonable man</em> <em>would believe that he was asserting to the terms proposed by the other party, and such other party upon that belief enters into the contract with him the man thus conducting himself would be equally bound as if he had intended to agree to the other party’s terms.”</em></p> <p>            As I have indicated above, applying these principles to the established facts it is clear that a contract of sale was concluded between the parties.</p> <p> </p> <p><strong>Whether the notice of abandonment is incomplete</strong></p> <p>            The respondent argued that applicant should have reversed the transfer of an amount of US$176 308 which was transferred from respondent’s bank account pursuant to a provisional order granted by this court under case number HC 3165/17.  It was further argued that the notice of abandonment was not complete as there was no tender of the wasted legal costs.  Until that is done, the respondent argued  that the abandonment filed of record cannot take effect.  Respondent further argued that, the abandonment cannot take effect with applicant retaining the benefits of the provisional order.  In terms of the rules of the Supreme Court, 1964, in particular rule 33 (3), it is provided that:</p> <p>“At anytime the respondent in an appeal or cross-appeal may by notice given to the registrar and the opposite party, abandon the whole or any part of the judgment appealed against.”</p> <p>            Quite clearly, the said rule permits the litigant to withdraw in whole or in part  his appeal, subject to the tendering of wasted costs.   I  observe that the usual practice in these courts is that every notice of withdrawal or abandonment must provide for a tender of wasted costs.  In the exercise of my discretion, and given the urgency of the matter it was my view that there was need to deal with all the preliminary issues raised and the merits in order to make a definitive determination for the parties. It is clear that there was commercial urgency and for that reason it was not prudent, in my view, to dispose of the matter on technicalities.</p> <p><strong>Costs of suit</strong></p> <p>            Each party prayed for an award for costs on the legal practitioner and client scale.  The question of punitive costs arises where a party has been unduly unreasonable or has unnecessarily put the other party out of pocket.  Such costs are awarded where an application or a party’s response to an applicant is motivated by malice.  Where a party has adopted a wrong procedure and prejudiced the other side such costs may also be awarded.  In this matter the matter is of extreme financial and commercial importance to both sides in the dispute.  I find no sound legal or factual basis to make an order against the losing party for costs on the legal practitioner and client scale.</p> <p><strong>Disposition</strong></p> <p>            Having found that a binding contract of sale was concluded by the parties when the respondent issued the two pro-forma invoices to the applicant and that the applicant submitted the two pro-forma invoices to Fidelity for the release of funds, I make the following order:</p> <ol> <li>The application for a declaratur and consequential relief be and is hereby dismissed.</li> <li>The applicant shall bear the costs of suit.</li> </ol> <p><em>Ncube &amp; Partners</em>, applicant’s legal practitioners</p> <p><em>Messrs Coghlan &amp; Welsh,</em> respondent’s legal practitioners</p> <p> </p> </div></div></div><div class="field field-name-field-download field-type-file field-label-above"><div class="field-label">Download:&nbsp;</div><div class="field-items"><div class="field-item even"><span class="file"><img class="file-icon" alt="File" title="application/vnd.openxmlformats-officedocument.wordprocessingml.document" src="/modules/file/icons/x-office-document.png" /> <a href="https://old.zimlii.org/zw/judgment/files/bulawayo-high-court/2018/3/2018-zwbhc-3.docx" type="application/vnd.openxmlformats-officedocument.wordprocessingml.document; length=28605">2018-zwbhc-3.docx</a></span></div><div class="field-item odd"><span class="file"><img class="file-icon" alt="PDF icon" title="application/pdf" src="/modules/file/icons/application-pdf.png" /> <a href="https://old.zimlii.org/zw/judgment/files/bulawayo-high-court/2018/3/2018-zwbhc-3.pdf" type="application/pdf; length=179274">2018-zwbhc-3.pdf</a></span></div></div></div><span class="vocabulary field field-name-field-flynote-sync-local field-type-taxonomy-term-reference field-label-above"><h2 class="field-label">ZimLII Flynote:&nbsp;</h2><ul class="vocabulary-list"><li class="vocabulary-links field-item even"><a href="/tags-local/contract">CONTRACT</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/terms-and-conditions">Terms and Conditions</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/practice-and-procedure">PRACTICE AND PROCEDURE</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/declaratory-order">Declaratory order</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/dispute-facts-practice-and-procedure">Dispute of facts (PRACTICE AND PROCEDURE)</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/joinder-parties">Joinder of parties</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/non-joinder">non-joinder</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/urgent-application">Urgent Application</a></li><li class="vocabulary-links field-item even"><a href="/tags-local/what-constitutes-urgency-urgent-application">what constitutes urgency (Urgent application)</a></li></ul></span><div class="field field-name-field-cases-considered field-type-node-reference field-label-above"><div class="field-label">Cases considered:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/zw/judgment/constitutional-court-zimbabwe/2013/3">Muzanenhamo v Officer In Charge CID (Law &amp; Order) &amp; Others (CCZ 287/12) [2013] ZWCC 3 (13 November 2013);</a></div></div></div><div class="field field-name-field-legislation-considered field-type-node-reference field-label-above"><div class="field-label">Legislation considered:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/zw/legislation/act/1981/29">High Court Act [Chapter 7:06]</a></div></div></div> Wed, 11 Apr 2018 08:43:34 +0000 admin 8706 at https://old.zimlii.org Econet Wireless (PVT) LTD v Antolice Enterprises (PVT) LTD () [2018] ZWHHC 32 (18 January 2018); https://old.zimlii.org/zw/judgment/harare-high-court/2018/32 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>ECONET WIRELESS (PVT) LTD</p> <p>versus</p> <p>ANTOLICE ENTERPRISES (PVT) LTD</p> <p>HIGH COURT OF ZIMBABWE</p> <p>FOROMA J</p> <p>HARARE, 7 June 2017 &amp; 24 January 2018</p> <p><strong>Civil Trial</strong></p> <p><em>S Mubvuma, </em>for the plaintiff</p> <p><em>N Mukangagumbo, </em>for the defendant</p> <p>            FOROMA J: Plaintiff sued defendant for payment of the sum of $20 020.00 being an amount due and owing to plaintiff in respect of the cost of certain recharge cards sold to defendant in terms of a written agreement. Although defendant eventually conceded plaintiff’s claim it had initially disputed plaintiff’s claim and counter-claimed for the payment of the sum of $128 200.00 in respect of certain goods allegedly sold and delivered to defendant which defendant claimed it never bought or took delivery of but had been required to pay for them believing erroneously that it was owed same.</p> <p>            In response to the counter claim plaintiff denied that it had erroneously invoiced defendant and maintained that the payment had legitimately been received for recharge cards which it had sold and delivered to defendant.</p> <p>            As a result of the concession of plaintiff’s claim by defendant only one issue remained for determination at trial which was couched in the following terms “Did plaintiff issue fraudulent invoices to defendant in the year 2011? As recorded in the pre-trial conference minute it was agreed that the onus of proof on this sole issue was on the defendant which therefore had to assume the duty to begin. Both parties led evidence from a single witness each.</p> <p>            The defendant\s witness was one Kudakwashe Garutsa who as it turned out plaintiff claimed was the defendant’s official who took delivery of the recharge cards on the three separate occasions disputed by defendant. His evidence was briefly as summarised below.</p> <p>            On 28 January 2010 plaintiff and defendant entered into a written contract in terms of which plaintiff agreed to supply defendant with mobile phone recharges cards on the Econet cellular network on 7 day credit terms. The agreement of sale which was produced as exh 1 consisted of a Dealer Application form completed by defendant and a declaration by an official authorised by defendant both of which documents constituted an offer to do business. The terms of the agreement as recorded in exh 1 were the following:</p> <ul> <li>that any and all credit granted to be settled within 7 days of invoice</li> <li>all purchases must be accompanied by an official order and if a telephone order was placed an official order had to be produced on collection of goods</li> <li>a delivery note must accompany all goods delivered by Econet. There were other terms which constituted part of the agreement which do not warrant discussion here.</li> </ul> <p>In the dealer application form there is a section which refers to authorization to</p> <p>collect stock on behalf of the dealer in respect  of which defendant put forward two persons namely Antony Garutsa NR 08-249187 G 80 and Kudakwashe Garutsa NR 08-853284 J 80.</p> <p>            Kudakwashe Garutsa gave evidence that plaintiff debited the defendant with three invoices which defendant subsequently discovered it had not collected stock for neither had defendant placed an order for the stocks allegedly supplied. Thus although defendant paid for these invoices in the normal course of business on investigation defendant realised that it had incorrectly been debited with the cost of the said stock. It therefore sought a refund of the sum of</p> <p>$128 200.00 being the sum total of the three invoices. The invoices in question were identified as follows</p> <ol> <li>Invoice dated 27 April 2011 being Invoice Number 9839 for the sum of $45 000.00</li> <li>Invoice dated 24 May 2011 being Invoice Number 11273 for the sum of $40 000.00</li> <li>Invoice dated 6 June 2011 being Invoice No. 11908 for the sum of $43 200.00</li> </ol> <p>It is important to note that the invoices dated as above according to copies of invoices</p> <p>produced during the trial by plaintiff slightly differ in amounts as follows-</p> <ul> <li>Invoice dated 27 April 2011 reflects a total of $45 450</li> <li>Invoice dated 24 May 2011 reflects a total of $40 950.00 making a total of</li> </ul> <p>$129 600.00 which is $1400.00 more than the amount counter claimed by defendant.</p> <p>Kudakwashe Garutsa also testified that defendant was claiming interest on the</p> <p>$128 200 at the prescribed rate and costs of suit on the higher scale of attorney and client.</p> <p>According to Kudakwashe Garutsa there initially were 11 invoices raised against defendant as an Econet dealer in terms of the agreement which infact were raised in error as a result of plaintiff’s systems’ malfunction. The standing arrangement in 2011 was that goods supplied had to be paid for within 7 days of invoicing as per dealership agreement aforesaid. It was also part of the understanding that in the event any invoices were queried by the dealer (in this case defendant) the dealer would be required to pay within the seven days per agreement while any queries were being verified on the understanding that any verified errors would be addressed through refunds or reversal of transactions in question.</p> <p>            The process of purchase of stock by a dealer involved raising a written order for the quantities of stock required. The orders would then be placed with a sales person who would generate a fiscal invoice in duplicate. The invoices would then be signed upon collection and the security guard would then stamp the two copies of the invoice. The security guard stamped both invoices to show that the dealer had indeed collected the goods per invoice and the dealer left the Econent premises with an original invoice. Obviously a stamped copy of the invoice was retained by plaintiff as evidence that the dealer had collected the goods per invoice. An invoice No. 21830 dated  19 January 2012 was produced as exh 2 to show what the invoice  produced by plaintiff looked like. It is significant to note that exhibit 2 is signed in original ink on the left hand corner of the invoice with the following endorsement in long hand</p> <p>Name: Kudakwashe Garutsa</p> <p>ID.       08853284J80</p> <p>Sign:    (Signature is endorsed)</p> <p>On the right hand side against the name and details of the person collecting the stocks purchase is a Shield Security stamp showing CHECKED by and a security guard endorses his signature and below the guard’s signature as part of the stamp is provision for a date given as 19 January 2012 and the inscriptions on the stamp end with Tel and following is endorsed C099881456.</p> <p>On top of the invoice is endorsed the following details in long hand;</p> <p>STRIP – 60003030019-32518</p> <p>TXT – 40061449498-9997</p> <p>SOLID – 7590118001 – 18300</p> <p>            The rest of the invoice is printed matter part of which shows item number, description, quantity shipped, tax Unit Price and extended amount. The total at the bottom shows invoice total and tax total and also reflects any payments made and credits financial charges and outstanding balance as at the date of invoice <em>in casu</em> 19 January 2012 in USD showing 20 250.00 It is important to note that the outstanding amount in exh 2 is the total invoice value. According to K Garutsa’s evidence the plaintiff did not permit defendant to purchase stock beyond the credit limit stipulated by plaintiff. He further testified that out of 11 queried invoices 3 which are the subject of the counter claim remained unresolved. Correspondence dating back to 13 March 2013 shows that defendant queried among other invoices the three invoices the subject of the defendant’s counter claim highlighting that defendant had never owed plaintiff any amount in excess of the credit limit of $32 400.00.</p> <p>            Defendant’s case is premised on the following facts.</p> <ul> <li>it is not disputed that the credit limit imposed by plaintiff was $32 400.00</li> <li>according to the agreement dealership any and all credit granted is to be settled within 7 days of invoice.</li> <li>All purchases must be accompanied by an official order (from the dealer <em>in casu</em> defendant).</li> </ul> <p>It was defendant’s evidence that defendant did not place any order for the goods the subject of the three invoices in dispute. Defendant also disputed having collected goods reflected in the three disputed invoices as plaintiff never allowed defendant to exceed its credit limit. Despite demand for evidence that defendant had indeed placed an order for these goods per letter of 13 March 2013 and follow up reminders. Plaintiff never produced irrefutable evidence that defendant purchased the said stocks?</p> <p>Kudakwashe Garutsa also disputed the signatures on the three invoices in dispute as not being his.</p> <p>Plaintiff called one witness to testify in support of its defence to defendant’s claim in reconvention namely that it had indeed supplied defendant with stocks on the three invoices in dispute and defendant had collected same. It is important to appreciate at this early stage of plaintiff’s testimony that its witness Mr Mlungisi Dube was not in plaintiff’s employ in 2011 when the three invoices allegedly were raised against defendant. Whatever testimony he gave has to be understood in the context of that background. Mlungisi Dube was employed by plaintiff as a credit controller since 20 April 2013 and his duties involved following up payments outstanding and due by dealers doing reconciliations of the dealers account balances and handing over debtors for collection.</p> <p>He testified that plaintiff sold air time recharge cards on 7 days credit. He also testified that dealers on credit were subject to credit limits which limits were flexible and that dealers sometimes exceeded their credit limits by paying cash for the excess with the result that the credit limit will be the figure that will reflect on the invoice. He further testified that the dealers either collected their purchase order through the authorised persons who placed written orders on behalf of the dealers or placed orders telephonically. He also testified that the order number appearing on the invoice is an Econet generated number auto generated as the sales clerk processes a customer’s order. He confirmed that Antolice (Pvt) Ltd (defendant) had a credit limit of $32 600.00 and that plaintiff suspended its credit facility as a result of defaulting on two invoices in 2015.</p> <p>            Plaintiff through M Dube produced copies of three invoices the subject of dispute. M Dube insisted that based on the trading practice of plaintiff there is no doubt that defendant purchased and collected the stocks per the three invoices the subject of defendant’s counter claim. He also testified that the original invoices were taken by defendant and he had access to duplicate invoices left with dispatch. As a result of the complaint raised by defendant M Dube went back into their records and found invoices produced as exh 7, 8 and 9 (the three disputed invoices) and cross checked them with the dispatch book as a result of which he confirmed that the defendant had actually collected the goods in each of the three invoices in dispute. He  checked the dispatch book for the period 24 March 2011 to 17 September 2011 for Econet Bulawayo which covered the transactions in dispute. These records are kept in the custody of the Dispatch team. In the said Dispatch Book are entries in relation to the invoices in dispute recording horizontally the following information: date of transaction, dealers name, invoice number, order number (Econet generated as indicated herein above). Quantity of Universal strip, serial number, quantity universal $5, serial number quantity universal TXT, Serial Number Quantity Universal $2 Serial Number Quantity B5 pack 2.5g. there is then a gap Between columns 18-27 after which are the following Columns Dealers Name, Dealers I.D. No, Dealers Signature and Security Signature. It should be noted that on each 2 pages of the Dispatch book are columns horizontally spread occupying 32 columns from invoice number to security signature recording in each line a single transaction categorized in terms of the columns aforesaid.</p> <p>            The photocopy of the Dispatch Book was produced by consent and was sent to the court file after the close of evidence. A perusal of the Dispatch Book confirms M Dube’s evidence that the disputed invoices were entered into that book and each entry is signed in the dealer’s column. The said dispatch book also records the dealer Antolice (Pvt) Ltd in respect of the dates when the disputed invoices were allegedly transacted and goods collected. A pertinent observation should be made. The column headed Dealer’s Signature is not wide enough to reflect a dealer’s signature in the same way a dealer may have signed on the invoice. This may make it difficult to compare the signatures of the dealer for purposes of confirming or otherwise disputing the signature without the benefit of a questioned documents examiner. Be that as it may Mr Dube concluded that on the basis of a comparison of the invoices and the Dispatch Book entries in respect of the three invoices he was satisfied that defendant purchased and collected the stock reflected as purchased by reference to the three disputed invoices. The conclusion reached by Mr Dube has presented me with challenges given the admitted factual background to the parties’ relationship including certain common cause facts as I will demonstrate below.</p> <p>The following matters should be noted;</p> <ul> <li>While each of the three invoices appear to reflect that K Garutsa signed each of them K Garutsa disputes signing any of the said invoices.</li> <li>Although the identity details of the person appearing to be signatory to the 3 invoices is 08853284J80, in the Dispatch Book only one entry outof the 3 dealers’ identity entries is correctly captured. The other 2 are recorded as follows –invoice dated 27 April 2011 the Dealer’s identity in the Dispatch Book is recorded as 08833284J80 and on invoice dated 24 May 2011 the dealers identity is also recorded as 08833284J80. Neither plaintiff nor defendant commented on this discrepancy and how K Garutsa could have incorrectly captured his identity number is difficult to comprehend.</li> <li>Although the plaintiff admits that dealers’ official orders (written) were kept in theDispatch Teams’ custody the plaintiff did not discover them and no explanationwas given for the non-discovery of the official orders placed by defendant kept by plaintiff.</li> <li>The defendant’s witness K Garutsa testified that he took the defendant’s finished order book for the relevant period to the plaintiff’s Credit control for inspection but not a single copy of any of the 3 disputed invoices’ orders was found in the said order book and M Dube did not dispute this evidence.</li> <li>The defendant did not effect discovery of its completed order books and plaintiff did not take in steps in terms of the High Court Rules Order 24 r 162 and 165 to compel defendant to effect their discovery despite plaintiff having always appreciated that defendant disputed ordering the said stocks and that the finished order books could easily have proved the preparation of such orders.</li> <li>Contrary to the plaintiff’s position per plaintiff’s plea to defendant’s claim in reconvention that defendant maliciously raised a counter claim as a ploy to delay settlement of the plaintiff’s claim for $20 020.00, defendant had infact raised a red flag regarding the disputed invoices as a far back as 13 March 2013 before M Dube even joined plaintiff’s Credit Control Department on 20 April 2013. See para 2 of the plaintiff’s replication where the plaintiff replicated in part in the following terms</li> </ul> <p>“The purported defence stating that the plaintiff “generated fraudulent invoices is completely  denied and is entirely frivolous, vexatious and a <em>mala fide</em> attempt by the defendant to escape its contractual obligations.”</p> <p> </p> <ul> <li>Each of the three disputed invoices exceeded substantially the defendant’s admitted credit limit. The suggestion by Mlungisi Dube that the credit limit was not religiously enforced is clearly speculative. In fact K Garutsa vociferously denied it. At some point Mlungisi Dube suggested that the credit limit was subject to relaxation at the request of the defendant and yet not a single instance was cited to show that the parties had agreed to an increase of the defendant’s credit limit. One of the defendant’s bone of contention was that it never exceeded its credit limit. In this regard the letter dated 13 March 2013 aforesaid made this point and evidence no response was given to refute it or suggest that the credit limit had been exceeded by mutual consent. See <em>Johnson </em>v <em>Lean</em> 1980 (3) SA 927 at 937.</li> </ul> <p>It should be appreciated that the law stipulates that when a party has signed a contract he is taken to be bound by the ordinary meaning and effect of the words which appear over his signature. As a matter of policy the law prescribes that when a contract has been enteredinto freely and voluntarily the court has an obligation to enforce it thus emphasizing the sanctity of contracts. Where one party seeks to respect and observe the sanctity of a contract and the other to the contrary attempts to move away from the principle the court should firmly find itself on the side of the obedient – see <em>Book</em> v <em>Davidson</em> 1903 T 571 at 578.</p> <p>In his response to questions put to him by the court M Dube conceded that in his investigation of the complaints by the defendant he overlooked the condition that the defendant was required to place written orders for the goods invoiced on the 3 disputed invoices. He also admitted that the defendant was denying both ordering the goods or collecting the goods in question and these were not resolved.</p> <p>The plaintiff did not dispute with the defendant that in terms of the agreement between the parties there could be no delivery or invoicing of goods purchased without an official order.</p> <p>Although plaintiff’s witness suggested the Dealer Manual provided for circumstances when dealers could exceed their credit limits no such dealer manual was produced despite denial of its existence by the defendant’s witness.</p> <p>During the trial it was conceded by the plaintiff’s witness that the plaintiff’s employees could abuse the customers (dealers) credit facility as happened.</p> <p>The plaintiff also argued that the defendant did not prove that no stock was ordered and that this could have been done by producing the 2011 order book. This aspect has been dealt with herein above. The plaintiff has the onus to prove that it invoiced goods on the disputes invoices against defendant’s official orders in compliance with the agreement by producing the copies of orders they acted upon. There is no onus on a party to prove a negative. Indeed the plaintiff appreciated that the order book could have easily put the matter to rest and yet it did not compel its discovery nor did it discover the official orders placed with it by defendant. The plaintiff seems to take comfort in the exhibit 7, 8 &amp; 9 (copies of invoices) as read with the Dispatch Book as proof that the defendant collected the goods invoiced. This elusive comfort ignores (a) that the signatures on the disputed invoices are disputed and (b) that the mere existence of the documents cannot completely dispel the possibility that the plaintiff’s employees could have abused the defendant’s credit facility to defendant’s prejudice.</p> <p>The sum total of the observations including the foregoing comments do not establish on a balance of probability that the defendant collected- goods per disputed invoices–this in particular if it is born in mind that the plaintiff’s employees Morgan Majange was found guilty of abuse of a dealer’s credit facility. In the circumstances I find that the plaintiff did not prove on a balance of probabilities that the defendant was lawfully charged for goods invoiced per disputed invoices. The plaintiff has not been able to explain the basis on which the defendant was invoiced with purchase of disputed stocks in the absence of proof of official orders of the said stocks as well as evidence of any relaxation of the credit limits in all the three disputed transactions. Payment for the said invoices within the 7 days credit terms cannot be conclusive evidence that the defendant collected the goods as it was common cause that the plaintiff’s policy in the event of a query was investigation of the query as insistence on resolution of a query before payment could well result in a breach of the 7 day credit term which could expose a dealer such as defendant to a suspension on account of breach of the credit supply agreement.</p> <p>In the circumstances I find that defendant has proved its claim on a balance of probabilities. Subject to plaintiff’s right of set off in respect of the admitted claim of $20 020.00. I make the following order.</p> <p>It is ordered that plaintiff pay</p> <ol> <li>Defendant US$128 200.00.</li> <li>Interest at the legally prescribed rate with effect from the 10 October 2015 being the date the defendant’s claim was filed to date of payment.</li> <li>That the plaintiff pays the costs of suit.</li> </ol> <p><em>Mtetwa &amp; Nyambirai, </em>plaintiff’s legal practitioners</p> <p><em>Zimudzi &amp; Associates, </em>defendant’s legal practitioners</p> <p> </p> </div></div></div><span class="vocabulary field field-name-field-flynote-sync-local field-type-taxonomy-term-reference field-label-above"><h2 class="field-label">ZimLII Flynote:&nbsp;</h2><ul class="vocabulary-list"><li class="vocabulary-links field-item even"><a href="/tags-local/contract">CONTRACT</a></li><li class="vocabulary-links field-item odd"><a href="/tags-local/terms-and-conditions">Terms and Conditions</a></li></ul></span> Wed, 04 Apr 2018 07:43:06 +0000 admin 8674 at https://old.zimlii.org