This is an appeal against the whole judgement of the High Court (the court a quo) sitting at Harare, dated 11 January 2023, wherein it declared that the procurement contract entered into between the appellant and the respondent was valid and binding between them. The court a quo proceeded, consequently, to grant an order of specific performance of the contract.
It also dismissed the appellant's counter claim and ordered that the appellant pays the respondent's costs in the claim in reconvention.
Aggrieved by the decision of the court a quo, the appellant has noted the present appeal.
THE FACTS
On 23 October 2015, the parties entered into a Public Procurement Engineering, Procurement and Construction Contract (the contract). In terms of that contract, the respondent was required to construct one solar Photovoltaic Power Station to the capacity of 100MV in Gwanda (the project).
A dispute arose during the implementation of the project.
The respondent issued summons in the court a quo seeking the following relief:
“1. An order declaring that the procurement contract for the Engineering, Procurement and Construction (EPC) of the 100 MV Gwanda Solar Project (ZPC 304/2015) between the parties, as amended, is valid and binding between the parties.
2. Consequent to the declaration of the validity of the EPC contract, an order for specific performance.
Alternatively:
Damages in the sum of US$25,000,000 (twenty five million United States dollars) for repudiatory breach of the EPC contract by the defendant.
3. Costs of suit at the attorney and client scale.”
In its declaration, the respondent amplified its claim as follows:
The agreed contract price for the project was US$172,848,597=60 exclusive of taxes. The respondent was to secure and facilitate the funding of the project as well as bear most of the risks associated with the construction of the plant up to the point of commissioning.
The contractual terms were derived from the FIDIC Silver Book (General Conditions of Contract for EPC/Turnkey Project) 1999, First Edition. The General Conditions were applicable to the extent that they were amended by the Particular Conditions of contract agreed to by the parties.
The appellant was to borrow the funds sourced by the respondent in its name, superintend over both the construction works, and facilitate payments due to the respondent.
The appellant would only take over the risk and liability in the power infrastructure upon successful completion of the solar plant, that is, at the “turn of the key”.
The commencement of the contract was subject to certain suspensive conditions which were to be satisfied or achieved by both parties within a period of 24 months reckoned from 23 October 2015, the date of signature of the contract. The period within which the suspensive conditions were to be satisfied (the Conditions Precedent Satisfaction Period”) could be extended by a period of 6 months through an amendment to the contract. Such extension was to be done before the expiry of the tenure of the conditions precedent satisfaction period.
Beyond the conditions precedent satisfaction period, either party became entitled to terminate the contract, provided that the party seeking to terminate the contract was not responsible for the delays in the fulfilment of the conditions precedent.
Before the expiry of the conditions precedent satisfaction period, on 23 October 2017, the parties agreed to enter into an addendum to the contract, the terms of which would allow the appellant to pay some of the respondent's subcontractors directly in order to carry out the pre-commencement works at the project site.
The arrangement was in anticipation of the commencement of the contract.
The addendum was executed on 21 September 2017, prior to the expiry of the conditions precedent satisfaction period set for 23 October 2017.
The addendum set different timelines for the conclusion of the pre-commencement works. The appellant undertook to pay for that work.
The appellant, however, failed to pay for such works, and, as a result, these were not executed at all or were not executed timeously.
The appellant sought to extend the conditions satisfaction period by a period of six months, on 29 November 2017. The extension was to be reckoned from 23 October 2017.
The respondent objected to the extension, which it regarded as a breach of the contract, given the new terms of the addendum to the contract and the appellant's failure to perform its obligations under the addendum.
According to the respondent, the appellant unilaterally demanded that the suspensive conditions be completed on or before 23 April 2018, a demand that the respondent viewed as a material breach of the express provisions of the contract.
By way of notices dated 10 April 2018, 6 July 2018, and 31 July 2018, the appellant informed the respondent that the contract had expired by operation of law.
All contractual obligations between the parties were, in terms of these notices, terminated.
The appellant insisted on such termination despite its admission that it had failed to perform its obligations to pay the respondent's sub-contractors.
The respondent further contended, that, the termination was also unlawful in view of the appellant's direct liability in causing delays in the fulfilment of the conditions precedent within the agreed time frames.
It was thereafter that the respondent approached the court a quo, by way of application, seeking a declaration of validity of the contract and an order for specific performance.
The application was granted on 13 December 2018 under HC8159/18.
The appellant appealed that determination to this Court under SC39/21.
In the meantime, the respondent applied for leave to execute judgment pending appeal.
The court a quo granted that application on 19 June 2019 under HC2425/19.
The respondent claims, that, during the two year period in which the parties awaited the outcome of the appeal at the Supreme Court, the parties implemented the contract, as amended, and engaged in a series of meetings that culminated in the drafting of an amended and restated contract.
On 13 May 2021, this court upheld the appellant's appeal and set aside the judgment of the court a quo. This Court determined, that, the matter was replete with material disputes of fact which could not have been resolved on the papers before the court a quo.
It was for that reason that the respondent returned to the court a quo and instituted action procedure, seeking the same relief.
In its plea in the court a quo, the appellant raised two points:
(i) Firstly, it contended that the contract never took off because the conditions precedent were not fulfilled. There was thus no basis at law for the respondent to seek the declaration of validity.
(ii) Secondly, it averred that this court had dismissed the respondent's claim. It therefore pleaded res judicata.
The appellant also filed a counter-claim seeking an order in the following terms:
“(a) An order that the EPC contract, and the Addendum entered into by the parties, did not commence due to the plaintiff's failure to meet the prescribed conditions precedent.
(b) Damages for breach of contract and misrepresentation in the sum of US$96,673,236=30 (ninety-six million six hundred and seventy-three thousand two hundred and thirty-six United States dollars thirty cents.”
The matter was referred to trial on the following agreed issues:
In respect of the main claim:
“(a) Is the procurement contract entered into by and between the plaintiff and the defendant, dated 23 October 2015, valid and binding on the parties?
(b) Depending on the conclusion reached on the above question, did the plaintiff suffer damages, and what is the quantum thereof?
In respect of the claim in reconvention:
(a) Was the agreement entered into by and between the parties induced by misrepresentation on the part of the plaintiff?
(b) If the plaintiff breached the agreement, then, did the defendant suffer damages as pleaded by it or at all and what is the quantum?”
At the commencement of the trial in the court a quo, the appellant abandoned the claim in paragraph (b) of its prayer, that is, the claim for damages for breach of contract and misrepresentation action in the sum of US$96,673,236.
The appellant, however, persisted with the claim for US$3,330,736=30, being the advance payment made to the respondent in respect of the pre-commencement works.
PROCEEDINGS BEFORE THE COURT A QUO
The Respondent's Evidence
The respondent's sole witness was its Managing Director, Wicknell Munodaani Chivhayo. His evidence was summarized by the court a quo as follows:
He told the court, that, when the tender for the project was flighted, the appellant had no funds for the project. For that reason, the appellant was looking for a contractor that would also assist it in raising funds for the project.
The respondent's partner, CHINT, was roped into the project to bring in the required funds. He told the court, that, CHINT had the required financial and technical capacity to execute the project.
The contract price was US$172,848,597=60.
Mr Chivhayo said, that, the commencement of the contract was subject to the satisfaction of the conditions precedent set out in clause 5 of the contract. These included the sourcing of the funds for the project and the completion of the feasibility studies. The appellant was responsible for funding the pre-commencement works and the respondent was required to assist with the fundraising.
To that end, the respondent had engaged financial consultants and financial partners such as the China Exim Bank and the Ministry of Finance and Economic Development. These engagements were done before the commencement of the project.
The witness blamed the appellant for the collapse of the engagements that were intended to birth the necessary financial agreements.
China Exim Bank required that the Government of Zimbabwe guarantees the loan facility.
The witness approached the Ministry of Finance on behalf of the appellant. The Ministry indicated its interest to support the project and had agreed, at the witness's suggestion, that the project be given national status.
The Ministry of Finance undertook to provide the Government guarantees required by China Exim Bank and had written a letter, dated 10 March 2016, addressed to the Export-Import Bank of China, undertaking to issue a sovereign guarantee for the project in the sum of US$147,000,000.
However, the Government of Zimbabwe had been blacklisted for defaulting on a loan of US$400 million. For that reason, the China Export and Credit Insurance Corporation (China Sinosure), a state funded insurance company established to support China's foreign and trade development co-operation, refused to secure the loan.
Thereafter, the parties mooted other sources from which to raise capital.
One of these was the proposed raising of energy bond through the CBZ Bank. This proposal had the full support of the SPB (State Procurement Board). However, the appellant was not interested, even after its own Ministry directed it to pursue that route.
The witness further told the court, that, the appellant frustrated the signing of the financial arrangements, contrary to the spirit of clause 5(a) of the contract.
The witness had this to say about the advance payment demand guarantee:
During meetings with the appellant's officials, feasibility studies had been carried out and the appellant owed the respondent funds for the work done. There was no need for such guarantee once work had been completed and payment now due to the plaintiff. The advance payment received was therefore in respect of the feasibility studies that had been performed.
With regards the performance security, the witness said it was not provided for, partly because the appellant still had some outstanding amounts still to be paid, and that, at any rate, it had not been asked for.
He also confirmed, that, the appellant had carried out its due diligence in terms of clause 5(f) of the contract.
Both parties representatives travelled to China for the purpose of evaluating the respondent's partner, CHINT. Both parties were aware that CHINT had successfully carried out some projects in Zimbabwe.
The witness stated, that, the production of the Environmental Impact Assessment was the responsibility of the appellant. It was only produced through his intervention, when he directly engaged the responsible Ministry.
The land for the project was also acquired through his efforts when he approached the Ministry of Lands.
He confirmed that both parties had secured the necessary authorizations as required by clause 5(f) of the contract.
Only one condition remained outstanding, that is, the financing agreements.
He said that the amendments of the contract, through the addendum, were occasioned by the loss of time.
In terms of the agreement, as re-affirmed by the addendum, the total cost of the pre-commencement works was US$5,111,224=50. The respondent was supposed to contribute to that amount in the sum of US$1,000,000 with the appellant contributing the remainder.
The respondent did not pay its contribution as it was only required to perform work of an equivalent value.
He said that after the payment of the feasibility studies, and part of the fee for the pre-commencement works, the appellant still had an outstanding liability in the sum of US$1,232,322=87 for part of the pre-commencement works carried out.
The respondent's sub-contractors were to be paid from that outstanding amount.
He stated that the appellant caused his arrest by ZACC officials for non-performance of the contract. He wrote to the appellant's Managing Director complaining about the unfounded allegations of corruption. His arrest negatively affected the execution of some of the works by the respondent's subcontractors.
He insisted that the conditions precedent satisfaction period was extended by the parties, and yet, the appellant went on to raise a criminal complaint for non-performance.
He made reference to clause 5(i) of the contract which provided, that, if the conditions precedent were not satisfied on or before 24 months after the date of signature of the contract, the parties should meet, and, if need be, the appellant could, in its sole discretion on or at any time before the lapse of the 24 month period, elect to extend the conditions precedent satisfaction period by a further six months.
He referred to a letter from the appellant to the respondent, dated 29 November 2017, in terms of which the period was extended by a further 6 months from 23 October 2017 to 23 April 2018.
The witness made reference to various correspondences between the parties, and other stakeholders, tending to show that the appellant was responsible for the failure to sign financial agreements during the extended period.
He averred, that, in terms of clause 5(i) of the contract, the appellant was estopped from relying on its own breach to cancel the contract.
He said that the respondent declared a dispute between the parties in terms of the contract. The dispute was declared through a letter dated 15 January 2018. In terms of the contract, the dispute was to be adjudicated by the Dispute Adjudication Board, which was duly constituted.
The appellant's attitude was that there was no need for the constitution of the Board as the parties could meet and resolve the dispute.
The respondent then sought to refer the matter to arbitration, but, the appellant objected saying that it was not an arbitration matter. It was then that the respondent approached the court a quo for an order of specific performance, alternatively, damages.
It succeeded in its quest for specific performance. The appellant appealed that decision to this Court.
Pending the hearing of the appeal, the respondent applied in the court a quo for an order to execute the judgment of that court pending appeal. That application was granted, but, the appellant did not comply with it.
In the meantime, according to the witness, the Ministry of Energy directed that the parties further engage in order to give effect to the contract. The directive was contained in a letter dated 15 June 2020.
As a result, the parties prepared an amended contract which they are yet to sign.
That development was seen by the witness as dispelling the notion that specific performance was no longer possible.
Thereafter, various engagements were initiated by the Ministry of Energy to iron out the problems bedeviling the implementation of the contract. On 6 July 2020, the Minister of Energy wrote to the Executive Chair of ZESA Holdings intimating to the Chair that his office was required “to urgently conclude the drafting of all the pertinent agreements and financial instructions necessary for the available financier to avail the funds required to implement the project.”
This letter was copied to the witness.
The witness asserts, that, the Government of Zimbabwe, through the Ministry of Energy, as the shareholder in the appellant, wanted the project to be implemented without delay. It was for that reason, that, the Ministry had intervened calling on both parties to implement the project.
However, the appellant remained defiant.
The witness indicated, that, in July 2020, the parties arranged a joint visit to the site. The purpose of the visit was to assess the work done and that which remained to be done, since both parties were negotiating a revised contract.
Thereafter, the parties prepared a report, comprising pictures and video evidence, demonstrating their findings on the ground. The report was jointly signed by the parties representatives. The appellant was represented by its project manager, Mr Mugwagwa, and its officials Mr Fambi and Mr Chinho. On the other hand, the respondent was represented by the witness, its project manager, Mr Magweza, and an official called Mr Mubviri. The witness participated in both the joint visit and in the compilation of the joint report.
The witness opined, that, the exercise was an indication that the contract was temporarily on hold.
The witness stated, that, the appellant's counter claim for the sum of US$3,310,736=30 was devoid of merit if considered in the context of the joint report. It was made on the premise that the pre-commencement works were not carried out, yet, the report showed otherwise. The report confirmed that the appellant owed the respondent some money for work done at the conclusion of the pre-commencement works. It also confirmed that the advance payment guarantee was no longer necessary.
He was adamant that the objective of the pre-commencement activities, as set out in the contract, were satisfied. In that regard, he was of the view that the appellant was being malicious in suggesting that the contract was not implemented at all.
The witness justified the respondent's alternative claim for damages as follows:
The respondent had incurred expenses to do with the tendering process as well as the due diligence exercise when the parties had to travel to countries such as China and India. That included the cost of air fares of the appellant's personnel that had to be covered by the respondent. The respondent also claimed risk, occupational damages, and damages for reputational loss occasioned by the negative publicity caused by the appellant. The witness also stated, that, the respondent's security guards were kicked off the project site by the appellant at a time the respondent was prepared to carry on with the project.
Under cross examination, he insisted that discussions for a new contract started in earnest in 2020 after the new Minister of Energy had assumed office.
He said the Minister was unhappy over the delays in implementing the project. The Minister was displeased with the appellant's failure to comply with CHITAPI J's order granting the respondent leave to execute the High Court judgment pending appeal.
The parties met again to discuss the way forward - with no positive results.
He insisted that there were financiers ready to fund the project, but, for the obstinacy of the appellant; a fact he communicated to the Minister. He said that the execution of the Amended and Restated Contract Agreement was not an admission that the respondent had failed to perform. The idea was simply to kick start the project, with the respondent required to source funds for the initial phase of 10MW with the rest of the MW coming later as provided in the contract.
He said it was the EPC contract that is sought to be enforced and not the Amended Restated Contract.
The respondent had even offered to reduce the price to demonstrate its commitment to the implementation of the contract.
Asked whether a guarantee was provided by the respondent, as required by the contract, the witness stated that CHINT wrote to the appellant advising that they had the guarantee in place, but the appellant dithered. The offer was not accepted by the appellant because it had no money.
However, the appellant did make payments for the feasibility and pre-commencement works without an advancement payment guarantee.
This was justifiably so because the respondent had delivered those activities.
He insisted that the appellant's letters of 7 and 10 April 2018 and 6 July 2018, which confirmed the non-extension of the condition satisfactions period beyond 23 April 2018, prevented the respondent from fulfilling the conditions precedent as set out in clause 5a. This was because the appellant failed to pay the respondent's sub-contractors, and, as a result, the pre-commencement works could not be completed.
He further stated, that, although the actual project had not yet commenced, save for the pre-commencement works, the respondent needed only 6 months to complete the first 10MW once it secured the necessary funding.
He accepted that the respondent had revised the project costs downwards in the Amended and Restated Contract because the costs of solar products had generally gone down on the international market.
He dismissed the ADB integrity report on the debarment of CHINT on the basis, that, the respondent was not seeking funding from ADB. In any case, the debarment was lifted as CHINT was never found guilty of any fraudulent conduct.
Asked how the project could be implemented since the appellant did not have financial resources, he responded as follows:
The respondent had presented to the appellant China Exim Bank as a willing financier in 2015. The respondent could not access the funding set aside by China Exim Bank because the appellant's shareholder owed the bank's export credit insurance adviser, Sinosure, and its account was in arrears; China Exim Bank said it could still lend the money using other insurers. There were alternative funders that did not even require underwriters. The respondent introduced other local financiers, such as CBZ and the African Transmission Cooperation (ATC), as prospective funders. The Ministry of Energy even approved the funding proposal by ATC in June 2020.
The appellant was mandated to amend and restate the terms of the contract to give effect to the new funding model but it failed to do so.
The witness said he had also approached NSSA, on behalf of the appellant, requesting assistance in raising US$25,927,289.
The offer was also not taken up by the appellant.
The witness stated, that, the annexure to the joint report prepared during the joint visit to the site, dated 13 July 2020, was part of the main report prepared by the parties representatives. He said that the report, together with the annexure, was actually sent to the respondent by the appellant after the joint visit.
The Appellant's Evidence
The appellant called one witness, Cleopas Fambi, its Assistant Project Manager.
During the period 2015-2017, his duties included the management of the project between the appellant and the respondent. He was involved in the tendering stage, contract negotiations, and the pre-commencement works. His evidence was to the following effect:
Sometime in 2013, the appellant, through the State Procurement Board (SPB), floated a tender for the construction of 3 x 100MW photovoltaic solar plants at Gwanda, Insukamini and Munyati.
The respondent was awarded the tender to construct the solar plant at Gwanda.
The parties concluded the contract on 23 October 2015. The contract was to commence in full force and effect after the satisfaction of the conditions precedent stipulated in the contract.
The respondent failed to fulfil the conditions precedent under clause 5 of the contract and the conditions remain unfulfilled to this date. As a result, the contract did not commence because of the respondent's failure to fulfil those conditions.
He stated that the addendum to the contract dealt with the pre-commencement works listed in schedule 11 of the contract. The appellant paid for the pre-commencement works in advance. The respondent, however, failed to provide the bank guarantee for the advance payments. It also failed to provide its portion that it was meant to contribute to the pre-commencement works. The respondent also misrepresented its capacity to perform the contract.
The witness said, that, he was part of the joint team that visited the project site on 13 July 2020. The visit took place in the context of a proposal to implement the project in phases. The works had been partially completed on the ground. No maintenance or repairs had been carried out since July 2020.
With regards the documentation attached to the joint report showing the various activities of the pre-commencement works undertaken on site and the bill of quantity amounts, the witness said that he was seeing these papers for the first time in court.
He said that the amount of US$2,031,230 representing the value of the ground site clearing was overstated since there was still need to carry out ripping of the top soil, clearing, and site levelling.
He dismissed the allegation that the appellant did not wish to implement the project, saying that the appellant's conduct was consistent with a desire to see the project completed. It was for that reason that the appellant had paid for the pre-commencement works.
Under cross examination, the witness admitted that the appellant was a State commercial entity and therefore subject to the law governing procurement by State entities.
He agreed that according to the law, the appellant's accounting officer was its Managing Director who was wholly responsible for the administration of the project.
He conceded that he could not account for the project within the contemplation of the law as he was not the appellant's accounting officer. The accounting officer was the person with the complete records of all the transactions.
Asked whether he could provide insight on the issue of financing agreements, he stated that his insight was limited. He could not comment as to why there was no financial closure because he did not have the required information. He could also not comment on whether the appellant deliberately frustrated the financial closure as alleged by the respondent. He could not deny that CHINT had procured funding from China since he was not the accounting officer. Neither could he deny that the respondent had, as an alternative, engaged domestic funders to finance the project and that its efforts had been frustrated by the appellant's ambivalence. He could also not deny that CHINT had offered a US$52 million guarantee but the appellant had not embraced it because it did not have the required funds.
He said the best person to comment would be the accounting officer since all correspondence was directed to him.
The witness admitted, that, the parties did not refer their dispute to a consultant or engineer because there was no disagreement on the value of the pre-commencement works carried out.
The witness was also part of the team that carried out a site visit in July 2020. The parties agreed that the fence was erected and completed. He agreed that the appellant therefore received value at the conclusion of that part of the project. He also agreed that the feasibility study had been done and completed. Repairs and maintenance works had also been carried out.
Although he denied the value delivered, ascribed to the pre-commencement works, in the sum of US$3,382,697 as recorded in the bill of quantities report, he conceded that he could not tell the value that had been delivered to date.
Further, he could not comment on how the sum of US$3,310,736=30 representing the appellant's counterclaim was arrived at. It would require the accounting officer, his team, and the contractor to confirm how the figure was arrived at.
He also admitted that, at some point, the appellant had ordered the respondent's workmen off the site.
The witness could not comment on the Ministry's directive that the project be completed.
His attention was drawn to the fact, that, on 6 July 2020, the minister had, by letter of that date, communicated Government's position to the chairperson of ZESA Holdings. Another letter, dated 15 June 2020, had been written to the ZESA chairperson by the minister. In it, the minister had reiterated Government's desire for the parties to move with speed to implement the project without delay.
The witness could not deny that the contract was still capable of performance and that the respondent could still secure funding to achieve financial closure. He also admitted, that, the appellant was desirous of addressing power shortages. That desire is what had given impetus for the project....,.
SUBMISSIONS IN THE COURT A QUO
The respondent dismissed the evidence given by the appellant's sole witness as ineffectual because the witness admitted that he was not competent to testify on matters which only the appellant`s CEO could shed light on. This witness was, according to the respondent, unable to give evidence proving the value of the pre-commencement work done, nor could he dispute the contention that it was the appellant that actually owed the respondent....,.
The appellant's closing remarks were to the following effect:
It submitted that Mr Chivhayo's evidence was unreliable and thus the respondent had failed to discharge the onus on it to prove its claim. It accused this witness of changing his evidence when it suited him. It said that his evidence was inconsistent with contemporaneous documents, and that he referred to non-existent documents....,.
SUBMISSIONS BEFORE THIS COURT
RESPONDENT'S SUBMISSIONS
With regards the evidence adduced in the court a quo, counsel for the respondent noted that the court a quo made a finding of credibility in favour of the respondent's sole witness, Mr Chivhayo. He submitted that the evidence adduced by Mr Fambi, on behalf of the appellant, left a lot to be desired.
He chronicled Mr Chivhayo's evidence and noted, that, it was upon the respondent to raise the necessary funding for the project. He submitted that the evidence given by Mr Chivhayo shows how the appellant had frustrated the respondent's efforts aimed at financial closure for the project. Mr Chivhayo also told the court a quo that the respondent wished to conclude the project. Counsel for the respondent submitted, that, it was not shown that it was not possible to do so. For that reason it was appropriate for the court a quo to grant the remedy of specific performance.
He further submitted that any evidence elicited from Mr Chivhayo, under cross-examination, as to the meaning of the contractual documents, does not bind the court....,.
Counsel for the respondent submitted, that, the appellant's sole witness admitted that he was not involved in the process of financial closure as this was the preserve of the appellant's Managing Director. He was thus not in a position to challenge the evidence proffered by the respondent and its witness.
Further, while disputing the value of the pre-commencement works, neither the witness nor the appellant placed evidence of the value of the works that were carried out. On the contrary, the witness conceded that there was value in the works done and that same had been completed. He also confirmed that the respondent had been barred from the site and thus could not do repair work. He could not dispute that the appellant in fact owed the respondent....,.
ANALYSIS
APPLYING THE LAW TO THE FACTS
(3) Whether Fictional Fulfilment Occurred
Fictional fulfilment is a doctrine that may be invoked under circumstances where a party to a contract deliberately frustrates the fulfilment of a condition stipulated in the contract.
In casu, the respondent submits that the appellant was guilty of such conduct with regards the financing arrangements. It invited the court a quo to deem the conditions to have been fulfilled in line with the doctrine of fictional fulfilment.
The invitation was accepted - and correctly so.
The respondent's sole witness gave evidence to the effect, that, various proposals for the financing of the project were brought to the table but the respondent showed disinterest and declined to engage the various would-be financiers, both local and foreign. The appellant's witness, one Fambi, confessed that he had no knowledge of the financing arrangements and how they had been handled. He told the court a quo that such arrangements were the preserve of the appellant's Chief Executive Officer.
The Chief Executive Officer was not called to give evidence.
For that reason, the evidence of the respondent's witness, one Chivhayo, was virtually uncontroverted.
It was on the basis of that witness's uncontested testimony, that, the court a quo found that the appellant had frustrated the implementation of the contract and invoked the doctrine of fictional fulfilment....,.
The case of Scott & Anor v Poupard & Anor 1971 (2) SA 373 sets out the factors to be established in order to invoke the doctrine of fictional fulfilment. The factors are:
(i) Non-fulfilment of the condition;
(ii) The defendant's breach of his duty, with an intention to frustrate the fulfilment; and
(iii) A causal link between the non-fulfilment and the defendant's intentional frustration of the fulfilment of the conditions.
The court a quo, in line with case law and the uncontroverted evidence of Chivhayo, found this an appropriate case in which the doctrine of fictional fulfilment should be invoked.
Its decision in this regard cannot be impugned....,.
(4) Whether specific performance should have been granted
The fourth issue is to do with the propriety of the decision of the court a quo in ordering specific performance.
The law on specific performance is well traversed.
In the case of Grandwell Holdings (Pvt) Ltd v Zimbabwe Mining Development Corporation & 3 Ors SC05-20, this Court remarked as follows:
“However, the right to claim specific performance is predicated on the concept that the party claiming it must first show that he or she has performed all his or her obligations under the contract or is ready, willing, and able to perform his side of the bargain. Even then, the court has a discretion, which should be exercised judicially, to grant or refuse a decree of specific performance. It follows, therefore, that the court's discretion should not be exercised arbitrarily or capriciously: see Minister of Public Construction and National Housing v Zescon (Pvt) Ltd 1989 (2) ZLR 311 (S), where, at 318G, this Court stated:
'The law is clear. This is a remedy to which a party is entitled to as of right. It cannot be withheld arbitrarily or capriciously.'”
In dealing with the question of specific performance, the court a quo was alive to the principles governing the grant or refusal of that relief. It correctly noted that each case must be determined according to its own circumstances, and that the court must exercise its discretion judiciously, without appearing to be making a contract for the parties.
In casu, it noted that the appellant had not placed any evidence before it showing the measures it took in its attempt to achieve financial closure. Its sole witness, Mr Fambi, was unable to shed any light on this crucial issue.
Resultantly, the court a quo correctly concluded that there was nothing to show that specific performance was unachievable.
On the contrary, Mr Chivhayo, the respondent's sole witness, had shown that the respondent could secure funding for the project, the procurement of funding being central to the implementation of the project.
The court a quo dismissed the appellant's assertions that the project is no longer viable. It held, that, any issues pertaining to the viability of the project, and the effect of the changes in the currency regime (as alleged by the appellant), must be left to the parties to take care of in terms of clause 5(i) of the contract.
In any event, clause 6 of the contract allows the parties to amend the contract should they so wish.
The court a quo made reference to an “Amended and Restated Contract” which would have seen the project being implemented in phases. The respondent had funding for the initial phase of 10MW. This contract was never signed, but, its existence shows that funding could be obtained.
At p47 of its cyclostyled judgment, the court a quo makes the following finding of fact:
“The point is that, the question of the unavailability of funding is clearly not an excuse going by the evidence that was placed before the court.”
That finding of fact cannot be impugned: see Hama v National Railways 1996 (1) ZLR 66.
Counsel for the appellant submitted, that, an order for specific performance would bring intolerable hardships on the appellant, as the appellant has no funds to implement the project.
We note, however, that Mr Fambi, the appellant's sole witness, did not say so in his evidence before the court a quo.
Secondly, it is the duty of the respondent to source funding.
If there is any hardship to be borne at this stage, it has to be borne by the respondent and not the appellant.
The respondent has indicated that it is able to source funding for the project.
That being the case, there was no reason for the court a quo to deny the respondent the remedy of specific performance....,.
6. Whether the counterclaim was properly dismissed
The residue of the counter claim (after the abandonment of that part of it imputing misrepresentation to the respondent) relates to a refund due to the appellant in the sum of USD3,000,000. The amount had been advanced to the respondent to carry out pre-commencement works.
Through the testimony of Mr Chivhayo, the respondent resisted this claim on the basis that the pre-commencement works to that value, if not much more, was in fact carried out. For that reason, the respondent did not owe the appellant any money.
Mr Chivhayo relied primarily on the report of the joint visit to the project site, which showed that substantial progress had been achieved on the pre-commencement work.
On the other hand, Mr Fambi, the appellant's sole witness, was unable to substantiate the counterclaim because he did not have the material to do so, as such matters were the preserve of the appellant's CEO.
The CEO was not called to testify.
In the circumstances, the appellant failed to prove its counter-claim. The court a quo's decision to dismiss the counter claim cannot be faulted....,.
DISPOSITION
Despite counsel for the appellant's spirited efforts, the appellant's case is weak in three cardinal respects:
(i) Firstly, Mr Chivhayo gave detailed, factual evidence in support of the respondent's case. On the other hand, Mr Fambi, who gave evidence on behalf of the appellant, was literally at sea as he admitted that he had no useful information regarding the issues before the court. He referred all material issues to the respondent's CEO who was, surprisingly, not called to give evidence.
In essence, therefore, Mr Chivhayo's evidence was not controverted.
(ii) Secondly, the court a quo made a finding of credibility in favour of Mr Chivhayo. To all intents and purposes, therefore, the court a quo accepted the veracity of the evidence as given by Mr Chivhayo and rejected any evidence to the contrary.
It is trite, that, an Appeal Court will not lightly interfere with the findings of credibility of a trial court.
(iii) Thirdly, following from the above, the court a quo made findings of fact in favour of the respondent. There is no basis to interfere with those findings.
We are satisfied, that, the court a quo properly held that the contract between the parties was valid and extant and that same was properly amended by the Addendum to it which extended the period within which the conditions precedent should be fulfilled. It correctly found that its purported termination by the appellant was of no legal force or effect as such termination did not meet the requirements of the termination clause of the contract.
The court a quo exercised its discretion judiciously, in ordering specific performance of the contract, having found that the respondent was willing, and able, to source funding for the project.
In any event, no meaningful evidence was presented by the witness led by the appellant.
The witness was unable to lead satisfactory evidence with regards the appellant's counter-claim in the sum of US$3 million. The court a quo correctly found that the counterclaim had not been proved and proceeded to dismiss it.
In the circumstances, the appeal stands to fail. Costs shall follow the cause.
Accordingly, it is ordered that:
(1) The appeal be and is hereby dismissed.
(2) The appellant shall pay the costs of suit.
