Court name
Supreme Court of Zimbabwe
Case number
SC 61 of 2007
Civil Appeal 11 of 2006

Agricultural Bank of Zimbabwe Ltd. t/a Agribank v Machingaifa and Another (Civil Appeal No. 11/06 ) (SC 61 of 2007, Civil Appeal 11 of 2006) [2008] ZWSC 61 (16 March 2008);

Law report citations
Media neutral citation
[2008] ZWSC 61

REPORTABLE ZLR (55)









Judgment No. SC 61/07



Civil Appeal No. 11/06








AGRICULTURAL
BANK OF ZIMBABWE LIMITED t/a AGRIBANK


v


(1)
CLEMIO MACHINGAIFA (2) CHENJERAI MUTAMBISI








SUPREME
COURT OF ZIMBABWE


SANDURA
JA, ZIYAMBI JA & GARWE JA


HARARE,
OCTOBER 15, 2007 & MARCH 17, 2008









J Dondo, for the appellant



M S Gwaunza, for the respondents









GARWE JA:







This is an appeal against the judgment of the High Court, Harare
handed down on 13 July 2005 in which the High Court granted
with
costs an application by the respondents declaring, inter alia,
that they were entitled to payment of a mileage allowance of 4 000
kilometres per month calculated at the Automobile Association
of
Zimbabwe (AAZ) rates.







The facts of this case are these. The respondents were employed by
the appellant as Assistant Director, Credit Risk and Assistant

Director, Debt Recovery, respectively. Both respondents signed
revised contracts of employment in the year 2000 which stipulated

their conditions of employment. The contract of employment provided
in paragraph 3 as follows:






“3.
Motor Vehicle Use



You are entitled to the use of an Agribank company Car under the
prevailing terms and conditions. You are required to familiarize

yourself with the existing rules and regulations for the use and
disposal of the motor vehicle.



or







You are entitled to purchase a motor vehicle under the prevailing
motor vehicle scheme. You will use the car for business and
claim in
accordance with the existing rules and as amended from time to time.
You are also entitled to a mileage allowance based on a mileage of
4 000 kilometres per month at the applicable standard AAZ rates
.”
(underlining my own)







The underlined portion of para 3 is at the centre of the dispute in
this matter.







By letter dated 30 August 2001, the appellant’s Human Resources
Manager wrote to the respondents advising them that following
the
restructuring of management grades the appellant’s board had
approved the conversion of the company car scheme to a personal
car
scheme under the managers and field staff motor vehicle scheme with
effect from 1 September 2001. The conversion to a personal
car
scheme was done without reference to the respondents. The conversion
meant that the use of a company car was being done away
with and the
respondents would no longer access fuel and other facilities
previously offered by the bank in this regard. The respondents
were
offered a loan equivalent to the purchase price of their existing
company vehicles and a monthly allowance of $30.300.00 to
assist in
“the cost of running the motor vehicle”.







It appears the respondents were not happy with the conversion to the
new scheme and on 3 September 2001 wrote a letter to management

raising various issues on the matter and threatening legal action
because of what they perceived as a breach of contract. One
of the
issues raised was their entitlement to an allowance based on a
monthly mileage of 4 000 kilometres.







The response by the managing director of the appellant was that such
an allowance “would ultimately be too expensive for
the bank to
sustain” and that the change had been “influenced by the
magnitude of the vehicle allowance cost and its
sustainability”.







Thereafter, the parties engaged in considerable exchange of
correspondence on the matter. The respondents continued to insist

that they were entitled to the allowance. The appellant maintained
that it could not justify payment of such a huge allowance.
The
appellant eventually stated by letter dated 14 April 2004 that the
allowance had been included by mistake and that the intention
had
been to allow the respondents to use their personal vehicle and
submit claims for such use under the bank’s prevailing
terms
and conditions.







In June 2004, the respondents then filed a court application seeking,
inter alia, a declarator that they were entitled to
payment of the allowance. After hearing both parties, the High Court
granted the application with costs.
It is against that decision that
the appellant has appealed to this Court.







The decision of the court a quo is attacked on four bases.
These are firstly that the court a quo erred in finding that
the inclusion of the allowance in question was not the result of a
mistake; secondly that the court a quo erred in dismissing the
appellant’s defence of waiver; thirdly that the court a quo
erred in failing to take into account the fact that in terms of the
contract of employment agreed to by the respondents, the appellant

could change its policies and procedures; and fourthly that the court
a quo erred in coming to the conclusion that it had
jurisdiction to determine what was essentially a labour dispute
contrary to the provisions
of s 89(6) of the Labour Act  
[Cap 29:01]. I proceed to deal with each of the four grounds
raised.







WHETHER THE HIGH COURT HAD JURISDICTION TO DETERMINE THE
APPLICATION



It is the appellant’s contention that what was before the court
a quo was essentially a labour dispute and in the light of the
provisions of s 89(6) of the Labour Act [Cap 28.01], only the
Labour Court has the jurisdiction in the first instance to hear and
determine such a matter. In support of its
argument, the appellant
has cited the case of Sibanda & Anor v Bensen Chinemhute &
Anor
HH-131-2004. In that case MAKARAU J (as she was then) made
the following remarks at p 7:



“Consequent upon my finding above, that this court is only
barred from exercising its inherent jurisdiction in labour matters

where the Labour Court has jurisdiction, it appears to me that this
court retains its jurisdiction to grant declaratory orders
in terms
of s 14 of the High Court Act in labour disputes …”.







The learned judge continued at p 8 of the cyclostyled judgment:



“Similarly, I hold that in the absence of the specific power on
the part of the Labour Court to issue a declaratory order
as
competent relief to parties appearing before it, the jurisdiction of
this court to do so in the first instance has not been
ousted.”







The above case does not in fact support the appellant’s
contention that the High Court has no jurisdiction to hear the
application.
To the contrary the case is authority for the
proposition that the High Court retains its original jurisdiction to
grant declaratory
orders, even in labour disputes. The appellant has
not sought to argue that that case was wrongly decided.







In Johnson v AFC 1995(1) ZLR 65(H) GUBBAY CJ had occasion to
consider when a declarator can be granted. The learned Chief
Justice remarked at p 72 E-F:



“The condition precedent to the grant of a declaratory order
under s 14 of the High Court of Zimbabwe Act 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 interested is not a pre-requisite
to the exercise of jurisdiction …”.







It was not in contention before the court a quo that the
respondents were interested persons. The only issue for
determination was whether the case was a proper one for the exercise

of discretion under s 14 of the High Court Act. The trial court
reached the conclusion that it was. The fact that the dispute
could
well have been determined in the Labour Court is not the determining
factor. In Johnson v AFC supra, GUBBAY CJ remarked at p 77B:



“Nor does it seem to me that the availability, in the same
court, of a remedy by way of interdict was of itself reason to
refuse
declaratory relief. Standing alone, it will seldom be sufficient to
induce a court to decline jurisdiction. It is but
one factor to be
taken into account by the court in the exercise of its discretion
whether or not to make a declaration of rights
…”







See also Herbstein & Van Winsen, The Civil Practice of the
Supreme Court of South Africa
, 4 ed, p 1058.







I am of the view that the court a quo was correct in coming to
the conclusion that it had the jurisdiction to deal with the matter.
Paragraph 1 of the order granted
by the court a quo was
clearly declaratory.







This ground of appeal must therefore fail.







THE QUESTION OF WAIVER



The appellant has argued that the court a quo should have dismissed
the application on the ground that the respondents had by their

conduct waived whatever rights they might otherwise have had.







In terms of the common law, there is a presumption against waiver. R
H Christie in the Law of Contract in South Africa, 3 ed states
at p 488:







“Having gone to all the trouble to acquire contractual rights
people are, in general, unlikely to give them up. There is
therefore
a presumption, even in some cases a strong one, against waiver. That
means not only that the onus is upon the party asserting
waiver to prove it, but that although, as in all civil cases, the
onus may be discharged on a balance of probability, it is not
easily discharged ….







To this it is only necessary to add that it has repeatedly been held
that clear proof is required, especially of a tacit as opposed
to an
express waiver …”.







Attention is also drawn to the judgment of this Court in Philemon
Chidziva & 4 Ors v Zimbabwe Iron & Steel Company
SC
137/07.







In dealing with this argument, the trial Judge stated at p 4 of the
cyclostyled judgment:



“The respondent further submitted that the applicants must be
held to have waived their rights by not bringing up the matter
to
court timeously. The submission is clearly devoid of any merit when
regard is had to correspondence filed of record in which
the
respondent admits that the applicant never manifested any signs of
abandoning their rights. On 25 September 2001 the managing
director
acknowledged that the applicants’ memorandum raised the issue
of ‘Legal action insinuated because of perceived
contractual
agreement violation’. On 5 June 2003 the Human Resources
Manager, in response to another communication from
the second
applicant, also acknowledged that the matter was first raised in 2001
and as far as the bank was concerned it had been
deliberated upon to
its finality then. The above statement was clearly misleading. The
bank never said it had made a mistake
at that stage. The issue was
therefore very much alive.







Finally the bank, in the final Memorandum of 14 April, acknowledged
that the matter had been brought up on a couple of times since
2001.
In such circumstances it cannot be said that the applicants abandoned
their rights when the requirements of a waiver were
not met at all.”







I agree with the trial Judge in this respect. At no stage did the
respondents suggest that they were abandoning their entitlement
to
the allowance. They immediately wrote to management on 3 September
2001, voicing their concern at what they considered was
a breach of
their contract of employment and even threatened legal action.
Although it appears that they did request for the extension
of the
period within which to repay their loans at no time did they waive
their entitlement to the allowance. It is also not correct,
as
suggested by the appellant, that the respondents did not assert their
rights for more than twenty months. The correspondence
on file shows
that the respondents immediately complained and, as already noted,
even threatened to take legal action.







Even if it were to be accepted for a moment that there was such a
delay our law is clear that:



“Delay in enforcing a contractual right is not necessarily a
waiver of the right. One can go further and say that delay,
of
itself and without more, can never deprive a party of a contractual
right except by prescription …” - R H Christie
op.
cit.
, at p 491.











This ground of appeal must also fail.







THE DEFENCE OF MISTAKE



It is the appellant’s contention that the allowance was never
intended and that it was inserted by mistake. If, so the appellant

argues, the allowance were to be paid this would result in the
respondents being paid twice in the sense that they would be entitled

to motor vehicle loans to purchase motor vehicles and at the same
time receive allowances for the use of the same vehicles based
on a
monthly mileage of 4 000 kilometres at standard AAZ rates.







A party to a contract relying on an error of judgment who can go
further and show that at the time of the contract he was labouring

under some misapprehension may escape liability under a contract.
The onus however is not easy to discharge. As stated by RH
Christie, The Law of Contract in South Africa op. cit., p 353:



“Unless the mistaken party can prove that the other party knew
of his mistake, or that as a reasonable man he ought to have
known of
it, or that he caused it, the onus of showing that the mistake
was a reasonable one justifying release from the contractual bond
will not be easy to discharge.”







The learned author continues at p 354:



“However material the mistake, the mistaken party will not be
able to escape from the contract if his mistake was due to
his own
fault. This principle will apply whether his fault lies in not
carrying out the reasonably necessary investigations before

committing himself to the contract … and in fact in any
circumstances in which the mistake is due to his own carelessness
or
inattention, for he cannot claim that his error is iustus.”







In responding to concerns by the respondents that the appellant had
breached the contract of employment, the Managing Director
of the
appellant made it clear that the appellant had made a mistake as it
could not justify these allowances or sustain them.
He went on to
state that the allowance was almost equivalent to the respondents’
monthly salary and was by implication too
high.







The trial court observed that during a period of two years and eight
months the appellant had not at any stage alluded to the possibility

of such an allowance having been included by mistake. He noted that
the appellant made this assertion for the first time on 14
April
2004. The trial Judge remarked as follows on pp 3-4 of the judgment:



“As can be seen from the above memorandum the respondent was
then being categoric that it had made a mistake a thing it failed
to
do during the couple of times the matter had been brought up since 3
September 2001. The matter would not have dragged this
far if the
respondent had stated, the first time the matter was raised, that the
inclusion of the allowances was a mistake. The
suggestion, in the
memorandum, that the allowances whose payment the applicants sought
were not intended and the bank did not regard
them as part of the
applicants’ contract is simply untenable. If the respondent
did not intend the allowances to be part
of the contract, it would
have removed them from the contract document at the time it amended
the contract by removing the first
option which related to the use of
company vehicles.







Further when one examines the contract document filed of record it
reveals that 4 000 kilometres was hand written while about 99%
of the
document was type written. There are also some figures that were
hand written such as the salary, annual bonus, clothing
allowance,
the vacation and occasional leave etc. There can be no doubt that
these were inserted into the blank spaces after careful
thought. It
seems to me that the same applies to the 4 000 kilometres. The
suggestion, therefore, that the inclusion of the entitlement
of a
mileage allowance based on mileage of 4 000 kilometres per month at
the applicable standard AAZ rates, was inserted by mistake
is equally
untenable.







If at all it had been a mistake the respondent would have immediately
realized it and would have said so when the applicants first
raised
the issue on 3 September 2001 failing which respondent would have
realized and said so at any other subsequent occasion
the applicant
raised it in 2001 or early 2002 or even 2003. It therefore seems to
me that if at all the respondent had made a
mistake then such mistake
was grossly unreasonable.”







I am inclined to agree with the above observations.







It is apparent in this case that when the appellant made provision
for this allowance in the contract of employment there was no

question of mistake at that stage. That allowance was what the
appellant was prepared to offer the respondents. Later, however,
the
appellant had a change of heart because of the amounts involved which
were calculated using AAZ rates. It considered the allowances
as too
high and unsustainable.







The position is now settled that an offeror cannot escape liability
by establishing that he has made a wrong offer which was accepted

University of Zimbabwe v Gudza 1996(1) ZLR 249(S), 253 D-E.
The offeror will not be permitted to rely on the absence of the
consensus if the mistake was due
to his own carelessness –
University of Zimbabwe v Gudza supra at p 254B-C.







I accordingly reject the appellant’s argument that the court a
quo
erred in rejecting its claim that the allowance had been
inserted by mistake.







WHETHER THE APPELLANT COULD ALTER THE RESPONDENTS’
CONDITIONS OF SERVICE



The appellant has argued that, in terms of para 11 of
the contract of employment, the respondents undertook to subscribe
to
the bank’s policies and procedures currently in use and as
revised and amended from time to time. Pursuant to this clause,
so
it is argued, a revised motor vehicle scheme came into existence with
effect from 1 September 2001.







I do not accept that on the basis of para 11 of the contract of
employment, the appellant was empowered to remove, without reference

to the respondents, such a fundamental right as the entitlement to
payment of a monthly mileage allowance. If the appellant’s

argument were to be taken to its logical conclusion, on the basis of
that paragraph, even the respondents’ salaries could
have been
reduced. I do not accept that the bank in amending its policies and
procedures was empowered to alter clearly defined
contractual rights
to payment of a salary and allowances. Clause 3 of the contract of
employment clearly states that the respondents
were:



“… entitled to a mileage allowance based on a mileage of
4 000 kilometres per month at the applicable standard AAZ
rates.”







Such an entitlement could not be changed, altered or amended at whim
on the basis that the appellant was entitled to change its
policies
and procedures from time to time. A party to a contract cannot
unilaterally alter the terms and conditions of the contract
in these
circumstances.







This submission must also fail.







In the result, I find that this appeal has no merit.







The appeal is dismissed with costs.















SANDURA JA: I agree















ZIYAMBI JA: I agree















Chinamasa, Mudimu, Chinogwenya & Dondo, appellant’s
legal practitioners



Kantor & Immerman, respondents’ legal practitioners