Court name
Supreme Court of Zimbabwe
Case number
SC 20 of 2009
Civil Appeal 22 of 2006

Mbayiwa v Chitakunye and Another (SC 20 of 2009, Civil Appeal 22 of 2006) [2008] ZWSC 20 (17 May 2008);

Law report citations
Media neutral citation
[2008] ZWSC 20

REPORTABLE ZLR(12)








Judgment
No. 20/09


Civil
Appeal No. 22/06








MARK
MBAYIWA v (1) ALFAS MUVAVARIGWA CHITAKUNYE
(2) DAINAH NDORO








SUPREME
COURT OF ZIMBABWE


CHEDA JA,
ZIYAMBI JA & MALABA JA


HARARE,
MARCH 4, 2008 & MAY 18, 2009









J Sibanda, for the appellant



H Zhou, for the respondents









MALABA JA: On 18 August 2005 the appellant entered into two
separate oral agreements with the first and second respondents.
In
terms of the agreement with the first respondent, the appellant sold
and the first respondent purchased a Massey Fergusson
MF 185 tractor
for $180 million. The second respondent had represented the first
respondent in the negotiation of the terms of
the agreement of sale
between the two parties. The second respondent also entered into an
agreement of sale with the appellant
in her personal capacity in
terms of which the appellant sold and the second respondent purchased
a bowser for $15 million. The
respondents dealt with the appellant
as if there was a single purchase price for two movables from a
single source of payment.







The total purchase price for the two items of property was $195
million. The parties agreed that of this amount a deposit of
$20
million be paid to the appellant on the date of the agreements. The
deposit was paid on 18 August. It was not refundable
if the
respondents failed to pay the balance of the purchase price within
the time agreed upon for the completion of the contracts.







The parties agreed that the balance of the purchase price in the
sum of $175 million was to be paid within three (3) banking
days
reckoned from the date of the agreements. The appellant banked with
AGRIBANK Bulawayo. The balance of the purchase price
had to be paid
into the appellant’s bank account by electronic transfer before the
close of banking business of his bank on 22
August 2005.







On 20 August the first respondent acting on behalf of himself and
second respondent paid $150 million of the balance of the purchase

price into the appellant’s bank account by electronic transfer. In
para 9 and 10 of the founding affidavit, the first respondent

speaking for the second respondent as well averred as follows:



“9. That on Saturday the 20th of August 2005 and through
an agreed method of paying the rest of the purchase price
, I
caused an electronic transfer of $150 million to be effected into
respondent’s account held with Agribank, within the agreed
three
(3) banking days, as will more appear fully from Annexure “A”
hereto. (the underlining is mine for emphasis)







10. That on Monday the 22nd of August 2005, which was the
last day of the three (3) banking days agreed for the payment of the
full purchase price, arrangements
were made by me and second
applicant to settle the outstanding balance.”







What had happened is that in the morning of 22 August 2005 the first
respondent contacted the appellant by telephone. He advised
the
appellant of the fact that he had paid $150 million into his bank
account by means of an electronic transfer as he was unable
to verify
the payment from his bank account as the computer at his bank was
down. The first respondent sent the appellant a copy
of the
electronic transfer by facsimile. During the telephone conversation,
the first respondent told the appellant that the balance
of the
purchase price in the sum of $25 million would be paid to him later
that day.







Later that day the first respondent contacted the appellant
telephonically and told him that they wanted to collect the tractor

and bowser and pay to him the sum of $25 million. The appellant told
the first respondent that he was canceling the agreements
of sale
because they had not paid the balance of the purchase price. He
refused to accept the payment of $25 million which the
first
respondent had said they would give to him at the place where they
were to collect the tractor and bowser.







On 7 September 2005 the respondents made an application to the High
Court for an order in the following terms:



“1. That the agreement of sale between the first applicant and the
respondent on the 18th of August 2005 for the sale of a
Massey Fergusson MF 185 tractor be and is hereby declared to be valid
and binding on the parties;







  1. That the agreement of sale between the second applicant and the
    respondent on 18 August 2005 for the sale of a water bowser be
    and
    is hereby declared to be valid and binding on the parties









  1. That it is hereby ordered that the respondent delivers the said
    tractor and water bowser to the applicants against payment of
    the
    balance of the purchase price within fourteen (14) days of this
    order failing which the Deputy Sheriff of Bulawayo be and
    is hereby
    directed to attach, remove and deliver the said tractor and water
    bowser to the applicants.









  1. That the respondent pays the costs of suit on a higher scale.”










The claim of an order for specific performance against the appellant
was made on the basis that the payment of the sum of $150
million and
a tender of payment of $25 million had been made within the time
limit of three (3) banking days. The contention was
that the
appellant was under an obligation to accept the payment of the
balance of the purchase price tendered. The respondents
were said to
have performed their sides of the contracts. The refusal by the
appellant to accept the payment tendered was said
to have constituted
a breach which the respondents were entitled to reject as amounting
to a repudiation releasing them from further
performance of their
contractual obligations. It was argued that they were entitled to
hold the appellant to his side of the bargains
and seek an order of
specific performance against him.







It was argued on behalf of the appellant in the court a quo
that there was no question of him having prevented performance by the
respondents when he refused to accept payment of the sum
of $25
million. The basis of the contention was that the payment of $25
million by the respondents to the appellant in person
at a place
where they were to collect the tractor and bowser was equivalent to
performance of their obligations.







The appellant’s defence to the claim by the respondents was
summarized by Mr Sibanda in the heads of argument before this
Court. He said:







“4.5. But in the circumstances of this case, it is submitted that
it would not be a defence available to the respondents to say
they
were prevented from paying the balance because they could simply have
transferred the money into the appellant’s bank account
without
having to obtain his permission. Had they done so within the agreed
time, the appellant would not have had even a ground
to oppose the
application.



…..







6. The learned Judge a quo held that the appellant prevented
the respondents from fulfilling their side of the agreement, and
further held that the respondents
fictionally fulfilled their
obligations when the first respondent indicated to the appellant in a
telephone conversation that the
balance of $25 000 000 would be paid
later in the day.







6.1. It is, however, submitted that the learned judge did not explain
how the appellant prevented the respondents from effecting
payment.







6.2. Further, it has been pointed out in para 4.5 above that the
respondents could have electronically transferred the balance
into
the appellant’s account, as they had done with the bulk of the
payment.










      1. No reason has been advanced by them as to why they did not utilize
        this mode of payment, which, with respect, seems to have
        been the
        one anticipated by the parties.













      1. Such a payment method would not have required the appellant’s
        co-operation.”










The respondents as the debtors had to show that they had been able
and willing to perform their obligations in terms of the contracts

with the appellant. They had to show that in fact they performed
their obligations as far as they were able to do so but were

prevented from completely performing the contract by the refusal of
the appellant to accept their performance. The effect of the

contention advanced by Mr Zhou for the respondents was that
the payment tendered by them to the appellant and refused by him was
valid performance by the respondents’
of the contracts. The
argument by Mr Sibanda was that the payment tendered was not
in terms of the contracts.







It is clear from the terms of the contracts and surrounding
circumstances that performance in forma specifica was
stipulated in the contracts. The learned Judge misdirected himself
in holding that the payment of the balance of the purchase
price in
the sum of $25 million to the appellant in person tendered by the
respondents was a valid performance of their obligations
under the
agreements of sale. That mode of payment had not been agreed upon by
the parties.







The parties had agreed that the payment of the balance of the
purchase price had to be made by the respondents within three (3)

banking days by electronic transfer into his bank account.







The appellant was not under any obligation to accept payment which
was not in terms of the contracts he entered into with the
respondents.







In Anson’s Law of Contract 26 ed at p 425 it is pointed out
that:







“Tender of payment to be a valid performance … must observe
exactly any special terms which the contract may contain as to
time,
place and mode of payment.”







In Halsbury’s Laws of England Vol 9 para 523 it is stated
that:






“A tender of performance which is not in accordance with the terms
of the contract may be withdrawn and may not preclude the
promisor
from subsequently making within the time limited, a tender of
performance in a proper manner; but this will not be the
case where
the incorrect tender is to be construed as a repudiation of the
contract.”







R H Christie in “The Law of Contract In South Africa” 3
ed at p 448 states that:






“To be a valid tender it must comply with all the requirements of a
valid performance, since the basis of the effect which the
law gives
to a valid tender of performance is that the debtor was correct in
thinking that what he was attempting to achieve amounted
to proper
performance and that it was due to no fault of his own that he was
unable to achieve it. Therefore, when performance
has to be made at
a specified time and place, a tender will not be valid unless it is
made at that time and place.”







The balance of the purchase price was payable to the appellant by
the respondents effecting electronic transfer of the money
into his
bank account at a bank before close of banking business on 22 August
2005. The money had to be paid into the appellant’s
bank account
by electronic transfer within the time limited for payment for valid
performance of the contracts by the respondents
to have occurred.
The terms of payment were specific and it appears to me that in
making the time within which payment had to
be made by reference to
hours of normal banking business operations the intention of the
parties was that the method of payment
specified had to be
specifically complied with for there to be valid performance of the
contracts by the respondents.







The payment of the balance of the purchase price to the appellant
in person as tendered by the respondents would clearly not
have
constituted valid performance of the contracts. The tendered payment
was not in terms of the contracts. The parties made
the time and
mode of payment of the balance of the purchase price of the essence
of the contracts. As the respondents failed to
make a valid tender
of the payment of the balance of the purchase price there was no
attempt by them at effecting valid performance
of their obligations.
The appellant was entitled to treat the breach as repudiation of
contracts by the respondent in each case
releasing him from the duty
to further perform his obligations under the contract.







The appeal is allowed with costs. The judgment of the court a
quo
is set aside and in its place substituted the following order
-



“The application is dismissed with costs.”



















CHEDA JA: I agree



















ZIYAMBI JA: I agree



















Job Sibanda & Associates, appellant’s legal
practitioners


James,
Moyo-Majwabu & Nyoni
, respondents’ legal practitioners