Lonhro Logistics (Private) Limited versus Ram Petroleum (Private) Limited

### Preamble
1
HH 122-21
HC 939/19
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LONHRO LOGISTICS (PRIVATE) LIMITED

versus

RAM PETROLEUM (PRIVATE) LIMITED

HIGH COURT OF ZIMBABWE

MUSHORE J

HARARE, 18, 19, 20 February 2020 & 31 March 2021

Civil Trial Action – purchase and sale; Derivative Action; Constitutum Possessorium; Breach-Mora

V.B Sibanda, for the plaintiff

D. Ochieng, for the defendant

MUSHORE J: Plaintiff is a private company that is involved in the transportation of commodities including fuel products. The defendant is an oil company which procures and imports fuels andis registered with the Zimbabwe Energy RegulatoryAuthority (hereinafter referred to as “ZERA”), as is required of fuel and petroleum procurers, by statute. The defendant’s activities are performed and regulated by ZERA and it has a bonded fuel facility at the National Oil Company of Zimbabwe (hereinafter NOIC) bonded facility in Msasa, Harare.

The plaintiff frequently purchased fuel products from the defendant, and has done so since around 2016. Most of the facts leading to the cause of this suit are common cause. The documents which the parties placed before the court and which counsel for both parties used during the witness examinations describe the dealings between the parties in precise terms and this is the story they tell.

The general arrangement was that the plaintiff would order a consignment of fuel from the defendant; and then upon receiving the order the defendant would prepare pro-forma invoice which it would email to the plaintiff. Plaintiff would acknowledge receipt of that invoice, and thereafter pay the defendant for the product; whereupon the defendant would deliver the bulk fuel to the plaintiff.It became an established practice between the parties that after the plaintiff had paid for the fuel, the defendant would effect deliveryof the product within at least 72 hours. Sometimesthe defendant would deliver the fuel to the plaintiff on the same day.

In or aboutOctober 2018, the Minister of Finance introduced a new cashless currency called Real Time Gross Settlement electronic dollars (hereinafter referredto as RTGS dollars). The value of this RTGS currency was denominated in Zimbabwe dollars and its worth was measured against the United States Dollar by the Reserve Bank for its feasiblemarket value to be ascertained (or ascertainable). It was thus that its value yo-yoed[collq.] dependent upon the strength of the Zimbabwean economy, and in some instances its value changed on a day-to-day basis. As a result, and because the defendant was dependent upon the Reserve Bank for fuel purchases under the ZERA system, (with the Reserve Bank allocating fuel orders to the oil companies for a certain price), that the defendant appreciated that its viability, and that of its customers would be maintainedif put in place a 48hour fixed value for fuel purchases. This meant that the defendant could onlymaintain a certain price for the commodity which it had agreed to deliver the fuel within 48 hours of issuing the pro-forma invoice.Thus when the plaintiff ordered 150,000 litres of fuel on the 1st November 2018, the defendant confirmed that it would provide the fuel at a fixed price for 48 hours when it wrote the following email 12:39pm on the 1st November 2018 :-

“Hi Gary

Trust you are well. As per your whatsapp, we are able to assist with 150,000 litres Diesel for RTGS@$1-34c/ltr. Please advise if you would like a PFI, which Kapil will send to you. The PFI will be for 48 hours and we cannotholdfor longer as RTGS fuel is dependent on RBZ allocation. Payment will be upfront before delivery.

Kind Regards

Wayne Bezuidenhout”

And on the same date the defendant’s Kapil Rama responded by email to the defendant a few minutes later attaching the Pro forma invoices:-

“INVOICE PRI15241 FROM RAM PETROLEUM (PVT) LTD

Good Afternoon Gary

Please find attached PFI for 150,000 litre DIESEL as per your email correspondence with Wynand. The PFI is only valid for 48hrs. Kindly send through proof of payment POP should you require delivery

Kind regards

Kapil Rama”

The plaintiff effected payment almost immediately.

However instead of taking delivery of the fuel immediately, (as he usually did), the plaintiff waited for 28 days and on the 28th November 2018 he wrote to the defendant with a request that of the 150,000 litres which it had purchased, that 40,000litres be delivered to three different destinations. Plaintiff’s letter reads as follows:

“Dear Wynand

I trust you are well, please kindly advice if you are in a position to deliver to these destinations for me. If so, what are the extra costs involved.

20,000 litres to MC Meats Abattoir Lithium Rd, Masvingo.

10,000 litres to MC Meats Abattoir, Redcliffe, Kwekwe

10,000 litres to MC Meats Farm, Nyabira (40km peg Chinhoyi Road, just before tollgate)

Regards

Gary Schneeburger”

Upon receipt of this email, the defendant wrote and informed the plaintiff that it would revert with the extra tanker costs for the delivery of 40,000ltrs of fuel which would be for theplaintiff’s account. The plaintiff wrote back requesting a quotation for the extra tank costs for items 1 and 2 above (30,000ltrs) for delivery.

On the same day the defendant confirmed that it could deliver 30,000litres of fuel to the destinations mentioned by the plaintiff when it immediately wrote to the plaintiff saying:

“Dear Gary

As per your below request of delivery of 30,000 litres to Redcliffe and Masvingo, please be advised that the additional cost would be $1500-00 for the round trip.

From an accounting point of view, the clearest way to do this would be to utilise one tanker and invoice the consignment inclusive of the extra 0.05 c/ltr. This will however affect your final drawdown volume.

Should you wish to make payment against the $1500 transport charge this will allow you to draw down your full balance of 120,000 litres?

Please note that the transport charge advised is strictly for the two destinations that you have provided. Any alteration will attract an additional transport fee.

Kind regards

Kapil Rama”

The two deliveries totaling 30,000 ltrs were despatched to the plaintiff’s requested destinationsand it would appear that the plaintiff paid the transport fee separately or additionally to the costof fuel because the plaintiff is suing for the delivery of the remaining 120,000 ltrs of fuel in this suit.At that time, that is to say at the end of November 2018, the plaintiff did not demand delivery of the remaining fuel and pleaded in its declaration that it understood that its  fuel could remain at the DHARWISI depot at Msasa based upon the plaintiff’s belief that it was entitled to do the following:-

“Plaintiff’s declaration Para 4:-

4.1 	Plaintiff could draw down the fuel as and when it wanted”

ZERA AND THE ADVENT OF SI 10/2019

Unexpectedly, on the 17th January 2019, ZERA announced that the Government had enacted law and in particular S.I 10/2019 which required all oil companies such as the defendant to account for/ or to declare their fuel stocks which were as of that date in the bonded facilities and pay an increase of duty against the quantities of fuel still held in the facility. The increase in duty took effect from the 12th January 2019.

The defendant wrote to the plaintiff advising it that it had to pay the increase in duty on its fuel because the product was still in tank. This happening created the dispute which is the basis of this suit in that the plaintiff rejected the suggestion made by the defendant that it, the plaintiff was liable to pay the increase in duty. In an email dated the 24th January 2019, plaintiff’s Gary Schneeburger expressed his shock at the development and insistedthat the increase was not for the plaintiff’s account. In the same email the plaintiff demanded immediate delivery of the 120,000ltrs when it wrote:-

“Dear Kapil

I am still in a little shock fromyour phone call, as per comms in the past we had purchased fuel from you at a stipulated price, the price included all duties owed to the government if you had not paid the duties this is not our fault.

Please kindly deliver to my yard ASAP

Regards

Gary S”

The defendant’s Kapil Rama responded immediately explaining why the defendant regarded the increase in duty to be for the plaintiff’s account; and proposed a solution to address the plaintiff’s reluctance to paying the increased duty. Kapil Rama of the defendant wrote the following email to the plaintiff:-

“Dear Gary,

As per our phone conversation I wish to reiterate that we had paid duties on this product.

We do however regret to inform you of this development. This was due to an announcement by the Ministry of Energy and ZERA. ZERA had advised that all stock that was in tank and not delivered at midnight of the 12th January 2019 had to be declared by the oil companies after which we have been instructed to pay the new duties on this product. I have since attached the document for your reference. Kindly refer to the last paragraph where ALL oil companies have been told that they are to pay the difference in duties.

As I am sure you are aware that the changes in the price of fuel caught all in Zimbabwe by surprise. The above-mentioned declaration by ZERA has affected fuel companies across the board.

After discussingwith Hemali and Wynand we wish to provide you with the below three options:

Lonhro pay the difference of duty of $1,65

Lonhro can draw down at the current price of the fuel to exhaust the prepayment with us

RAM Petroleum can refund Lonrho the total amount prepaid.

Once again I sincerely apologise for any inconvenience caused. The revision of duty is entirely out of our hands

Kind regards

Kapil R”

The plaintiff’s Mr Schneeburger was clearly dismayed at the turn of events as is evidenced by the following email written on the same day two hours later:

“Hi Wynand

I can’t believe you think that we must just accept this nonsense;this will not happen without a fight no one in their right mind can just lose so much money. What this letter says as well is that you need to inform them that you had paid duties prior to date, if you can prove this it does get waivered similar to the Redan coupon story. I bought fuel not duties or any fuel increases that does not apply when you purchase the goods from a company.

Regards

Gary S”

To which the defendant wrote to the plaintiff reminding the plaintiff that it was the plaintiff's decision to have the fuel remain at NOIC despite the defendant having tendered delivery since November 2018. In addition the defendant advised the plaintiff that because it was a transporter it would be able to claim the increased duty by way of a tax rebate; and that without payment by the plaintiff of the increase in duty; the fuel would never be released. This is what the defendant wrote:

“Hi Gary

Kapil and Wynand had chatted to your regards delivery of your product on various occasions and you had advised that you did not have the storage capacity to take the product. Payment was done in November and as at the date of the announcement there has been no instruction of delivery.

It was mutually agreed that this be kept at NOIC and you advise when you are in a position to draw down. To date there was no email or mention of delivery that we did not fulfill. The last deliveries were done at your request to places other than your on premises within a reasonable period and in line with our delivery lead periods.

We are most Definitely not in a position to top up duties and as you have rightly said- you are a transporter and will in due course receive rebates from the government or necessary department. NOIC will not release the product with the increase in duty-in which case you will be able to claim as the delivery AFTER the stipulated date so there is absolutely no way we can invoice this out at the old duty when a rebate is now applicable and in place.

We are merely acting according to the law and by no means doing anything where we have profiteered or purchased for speculative purposes. We have submitted to the relevant authorities all products on hand at the date of announcement and paid duties thereafter as instructed.

Regards

RAM Petroleum”

In response to this letter, plaintiff consulted its legal practitioners who addressed a letter of demand to the defendant.  It is obvious when reading the letter of demand that factually something or the other was lost in the consultation because the letter of demand speaks to certain other facts which are inconsistent with the exchange of correspondence over this issue which I have quoted directly from admitted and uncontested trial documents {supra}.

This is what the plaintiff’s legal practitioners tell they were advised by Mr Schneeburger.

“We are advised by our client that it purchased 150,000ltrs of litres of diesel from you and duly made full payment to your bank account on the 2nd November 2018. Client further advises that it had collected only 30,000 ltrs of the total fuel you sold to it thus leaving a balance of 120,000ltrs. We are further advised that you are now refusing to deliver the balance to our client on account of the change in the price of fuel that was recently announced by the government. We advise that the change in the price of diesel has nothing to do with our client who paid for a specified amount of diesel that you sold to it.

In the premises we have been instructed to demand, which we hereby do, that confirm in writing that our client can collect the outstanding 120,000 ltrs.”

I have underlined the incorrect statements of fact contained in the letter of demand and which the plaintiff’s legal practitioners state they were informed of by the plaintiff as being the facts which led to the contestation between the parties and which when summarized are as follows:-

The plaintiff represented that it collected the fuel where in fact the fuel was delivered by the defendant to two separate locations as specifically requested by the plaintiff.

The plaintiff represented also that the fuel price had changed where in fact the government did not change the price of the fuel, but merely charged an increase of duty.

The letter of demand is silent as to the core issue which is the increased duty and the legislation which gave rise to the duty increase.

The plaintiff incorrectly represented that the defendants were refusing to allow him to collect the fuel in circumstances where the defendants wanted to deliver the fuel to the plaintiff and had tendered delivery to the plaintiff. It is the plaintiff which determined that it wished the fuel to remain at the NOIC depot and it was the plaintiff which felt entitled to draw down the fuel, from the depot “as and when it wanted to”.

The plaintiff seemed not to have instructed his legal practitioners about the options which the defendants had proposed to the plaintiff to resolve the matter before they fired off their letter of demand. I am presuming that had the plaintiff’s legal practitioners been aware of those three options, they would have appreciated that it was the defendant who required the fuel to be delivered to or collected by the plaintiff because the delay in delivery was inordinate.

Taking into account the portions of the letter of demand which are inconsistentto the actual facts extrapolated from the correspondences between the parties, it is no wonder that the plaintiff’s witness struggled when he was testifying during the trial in the matter. A grasp of the proper facts would have made it easier for plaintiff’s sole witness to give his testimony without contradiction.  But I digress. The task which lies ahead is to bring a resolution of the matter in accordance with the law being applied to the real facts which are there for all to read and appreciate from the very correspondences between the parties.

THE LAW

Plaintiff is suing the specific performance and is demanding that the defendant delivers 120,000 ltrs of fuel to it. Defendant avers that the plaintiff is not entitled to the remedy of specific performance owing to plaintiff’s repudiation of the contract. Defendant pleaded notice of cancellation and is asking the court to formalise the cancellation; against which the defendant tenders the sum of $159,300-00 (which the defendant represents is the sum due to the plaintiff after the increase in duty is subtracted from the sum which was paid by the plaintiff in November 2018).

Specific Performance.

It is trite that specific performance is granted where the party requesting it has fulfilled its obligations in terms of the contract. The contract in question is a contract of sale with the plaintiff as the purchaser and the defendant as the seller.

During the pre-trial conference, the parties settled a joint pretrial conference minute; in which it was agreed that the issues for the trial in this matter be as follows:-

ISSUES

What were the terms of the contract between the parties?

Is the plaintiff entitled to the delivery of 120,000 litres of diesel?

Is the plaintiff entitled to reimbursement of $159,300-00 as tendered by the defendant?

I will now make a determination of those issues as far as I see things.

ISSUE 1

What were the terms of the contract between the parties?

The law in Zimbabwe being founded upon Roman Law (and expanded) recognises a sale as being an agreement which creates obligations on the contracting parties. Generally speaking, in established trade customs agreements (as is relevant in the matter at hand) the courts determine these types of sale agreements and the obligations attendant to the agreements by investigating the parties past conduct in order to gain an understanding of the established manner by which the parties undertook their business in their dealings with each other. The parties usuallyestablish a mutually agreed rhythm in dealing with each other and the phraseology that is commonly used to identify the terms and conditions in such a commercial agreement is an established trade custom and usage over a certain period of time.

In the present matter, the relationship between the parties with respect to the purchase and delivery of fuel began around 2016.  I have already described the parties established trade custom and usage practice in detail; and which boils down to the defendant’s obligation to deliver fuel to the plaintiff within 72 hours of invoice and the plaintiff’s acceptance of delivery. These were the terms of the contract of sale between the parties.

ISSUES 2 AND 3

Whether the plaintiff is entitled to the delivery of 120,000ltrs of diesel or should the plaintiff be reimbursed in the amount of $159,300-00 tendered by the defendant?

The contentious consignment of 150,000 ltrs of fuel

I have already explained the fact that in 2018 the defendant was forced to limit the shelf life of its pro-forma invoices because of the advent of the Real Time Gross Settlement (RTGS) electronic dollar system being introduced in to the Zimbabwean financial system and the national economy. And as I mentioned earlier, at the time that the plaintiff ordered 150,000 ltrs of diesel; the defendant who was taking the same measures as other businesses to remain viable,  invoiced the plaintiff and warned that the quoted price would remain the same for 48 hours (refer email of the 1st November 2018 above).

The parties entered into a contract of sale in accordance with the terms and conditions which I identified above. The contract became perfecta when the parties had agreed to the thing sold (merx); the price (pretium) and shown they had the requisite animus to contract. To be specific the contract in the present matter (the first juridical act) was perfected when Mr Schneeburger accepted the pretium for the 150,000 litres of diesel on the 1st November 2018.

The delivery etc. was residual obligations flowing from the contract.  In BRADFIELD & LEHMAN’s “The Law of Purchase and Sale and Lease” 3rd Edition, the authors cite a useful passage from CHRISTIE book “The Law of Contract in Zimbabwe” where at pages 109-110, CHRISTIE defines residual obligations thus:

“The respective residual obligations under the sale contract; namely the seller’s obligation to deliver the subject matter of the sale and the buyers obligation to pay the purchase price; and in respect of each of the primary obligations there is a reciprocal duty on the part of the other party to the sale; on the buyer to take delivery, properly tendered, of the subject matter of the sale; and on the part of the seller to accept payment of the purchase price properly tendered”

When applying this principle to the facts in the present matter, it is clear that the plaintiff had an obligation to pay the purchase price; which he did well within the 48 hours of the PFI.The defendant then accepted payment from the plaintiff. It was the issue of the delivery that became the sticking point. From the email correspondence and the defendant’s unshaken witness testimony it becameclear that the defendant tendered delivery several times in the weeks following the delivery of the first 30,000. When the plaintiff’s witness testified, he at first denied that the defendant had made several attempts to tender delivery; and then under cross examination he buckled and conceded that the defendant had properly tendered delivery in November and December 2018, and that he had either ignored the defendant’s tender of delivery of his fuel; and in other instances refused to take delivery. In fact in its own declaration, the plaintiff confirms that it believed that it could draw down fuel from whenever it required it. Thus there remains no doubt in my mind that the plaintiffperceived that it did not have to accept delivery of the fuel when pressed by the defendantto take delivery. The fuel remained undelivered and or/uncollected for a period of over roughly two months in stark contrast to the usual 72 hour turnaround tie which the parties were accustomed too.

It is my considered view that the plaintiff’s sudden rush to acquire the fuel in January 2019 was inspired by the financial repercussionsarising from the increase in duty which suddenly affected all bonded fuel nationwide because of SI 10/2019. We see that it was after the legislation was introduced that the plaintiff began insisting on collection/delivery three months after paying for the fuel. That much is evident from the written communications between the parties.

Ownership and Risk.

The Derivative Acquisition of Ownership.

I have discussed {supra} the bilateral nature of the transaction, and that the transfer of ownership in the property is made subject to the valid and enforceable contract of sale or causa. Thus when all the essentialia(terms) of the contract are established, that is evidence of an intention by the parties (animus) to pass transfer.

In the case of Commissioner of Excise and Excise v Randles Brothers and Hudson 1941 AD 369 at page 398, this proposition was put thus:-

“From these passages, it is clear, I think, that a wide meaning must be given to the words iustuscausa, orcausa habilis (Voet 4.1.1.35) and that all these words mean in the context I am at present considering is that the legal transaction preceding the tradition may be evidence of an intention to pass and acquire ownership and if there is no need to rely on the proceeding legal action in order that ownership has, in fact, passed. To put it more briefly, it seems to me that the question whether ownership passed, depends on the intention of the parties and such intention can be proved in various ways”

In Universal Group Ltd. t/a Island Vice Shipping Company The Fund created by the Sale of the MV Maharani, ex MV Calare A Tsavlins 1990 (2) SA 480 (N);the court dealt with the concept of the transfer by the constitutum possessorium and ownership pursuant to the sale. At page 491 it was emphasized that the agreement and delivery are distinct juristic acts.

Also see Kraphol v Oranje Kooperasie Bpk 1990 (3) SA 848(A) at page 864{E-F].

In discussing transfer in ownership by the constitutuum possessorium; on page 113 of their book entitled “The Law of Property [2nd Edition], MESSRS OLIVIER, PIENAAR AND VAN DER WALT; describe the concept thus:-

“The thing (merx) remains in the physical control of the previous owner, who changes his intention and exercises control on the part of the new owner”

The derivative action is part of Zimbabwean Law. In Minister of Mines and Mining Director and 3 Ors v Granwell Holdings (Private) Limited and 2 Ors [2018] ZWSC 34, PATEL JA said:-

“In Zimbabwe, the derivative action has been recognised in many cases (see L Pias & Sons (Private) Limited v Piras 1993 (3) ZLR 245 (S) and Lameck Kufandada v Dairibord Zimbabwe & Ors HH 564/15”

It is evident to me that in the present matter, transfer of ownership of the fuel in questionhappenedby way of the constitutum possessorium without actual delivery of the thing; and by means of a mere change in the parties intention regarding animus domini.  The change in animus in this matter repeatedly took place each time that the plaintiff paid for the fuel and the defendant accepted payment for the fuel.  By that exchange, the plaintiff acquired ownership in the fuel; which when looking at the facts in the present matter means that ownership of the 150,000 litres transferred to the plaintiff in early November 2018.

Risk

It ought to be trite that with ownership comes risk. By simple reasoning; it is clear in casu that the risk in the 150,000 litres passed to the plaintiff in early November 2018; and by applying deductive reasoning therefore the burden for paying for the increase in duty passed to the plaintiff at that time, even in the absence of the physical delivery; or as plaintiff suggests in his declaration; collection of the goods. Lest the question falling into the mind of the reader of this opinion being “what are the categories of risk which the plaintiff is lawfully encumbered with in such circumstances?herein below lies the answer:-

“Under the common law, in terms of the residual or default rule, the risk of accidental loss, destruction or deterioration of, or damage to the property sold passes to the buyer when the sale is complete (perfecta). The benefit of the property passes at the same time as the risk passes. Benefits include natural fruits that ripen and civil ones that accrue after the contract is perfected”

MESSRS BRADFIELD, LEHMANN “Principles of the Law of Sale and Lease” 3rd Edition.

Mora

In order for the plaintiff to be granted its claim for specific performance, it has to prove that the defendant breached the contract in either obstructing plaintiff’s ability to collect the fuel in question and/or by defendant withholding delivery. I have discussed above that this allegation by the plaintiff does not stand up to the facts and evidence in the matter.

Mr Gary Schneeburger who testified for the plaintiff clearly reacted as he did in suing the defendant from what he himself accepts was an emotional response. He describes himself as having been“in shock” when he was informed by the defendant about the increase in duty which he was potentially liable for. The potential loss of revenue roused within him such discomfort that wrote an email threatening to “fight it” which then lead to this court action. As a witness Mr Schneeburger fared badly, and was visibly uncomfortable at the growing realization that he had to entertain the prospect of bearing the burden of the built up costs and thereby losing revenue.

Now a prerequisite for seeking the remedy of specific performance or cancellation of a contract is the need for the party seeking specific performance or cancellation to cite the breach or a reason entitling that party to such relief through a notice to perform or to cancel within a certain period of time. In other words the notice has the effect of placing the other party on terms or in mora. From the evidence in casu; the first notice to the defendant alleging non performance of delivery on the part of the defendant and placing the defendant on the back foot {collq.}was done informally in Mr Schneeburger’s email dated the 26th January 2019, which was well beyond the usual turnaround delivery time. Mr Schneeburgerincorrectly and perchance, wrongly accused the defendant of failing to pay duty. when in fact these newly legislated built up costs were had not come about when the contract when it was perfected in early November 2018.I contend that the plaintiff’s latent need to take delivery of the fuel in late January 2019 was explained by the plaintiff in its legal practitioner’s letter of demand to the defendant of the 5th February 2019; and that was to avoid being accountable for the payment of the increase in duty which arose from the enactment of SI 10/2019. The complaint which plaintiff made in that letter of demand had everything to do with a potential loss of revenue; and absolutely nothing to do with a failure on the part of the defendant to effect delivery of the 120,000 litres within a reasonable time; and thus had no bearing on the contract of sale which had been perfected in early November 2018.

As an aside I also contend that the trueparties who caused slight and upset to the plaintiffwere the Minister of Energy and NERA. Those bodies were obviously not included in the contract and thus not enjoying privity of contract with the plaintiff. It is to that end that I am of the view firstly that the defendant cannot be held to have breached the contract of sale at all.

The defendant performed its residual obligations to the plaintiff without cause for the plaintiff to complain. If it was anyone with one the plaintiff should focus its grievance it is the Minister of Energy or the Regulatory body ZERA. Neither of these parties were cited or joined to the proceedings. The plaintiff has placed itself in the invidious position of not citing the parties who could meaningfully explain or defend this action. Both the defendant and the plaintiff have been caught in the cross hairs of the legislation. The occurrence was beyond the influence of the defendant.

Further, the plaintiff obstructed delivery and felt entitled to collect when it suited it. There are adverse consequences arising from the plaintiff’s decision to refuse delivery properly tendered in terms of the law.As I have stated earlier; the plaintiff was spurred into action on the 17th January 2019; two and a half months after it ought to have accepted delivery of the fuel. BRADFIELD & LEHMANN explain the legal position on the aspect of moraat page 72 of their book {title supra} when they state the following:-

“A seller who fails to make the property available at the agreed time or if there is no agreement at the time set by the residual rules (naturalia) is in breach of the sale (mora debitoris). If the seller does make the property available on time, the buyer who fails to remove or to receive it at the correct time is in breach of the sale (mora creditoris)”

Plaintiff in casu decided not to remove or receive the fuel at the correct time/at at least within a reasonable time. It is thus my opinion that the plaintiff breached the contract and placed itself in moraby the non-performance of its residual obligation. That non-performance of its residual obligation in this instance goes to the root of the iustus causa and is therefore repudiation, by the plaintiff itself, of the contract of sale.

The dreaded SI 10/2019.

The advent of the present dispute was brought about by the introduction and implementation on the 17th January 2019, of Petroleum (Petroleum Products Pricing) Regulations, 2018 otherwise referred to as SI 10/2019. The statutory instrument affected all company fuel stocks nationwide without exception. It was a legally binding directive by the government requiring that all oil companies were to declare details of:

“1.0	Stockholding of diesel, petrol and paraffin held by Oil Company at depot or at NOIC (old duty paid) as of midnight 12th January 2019 before the new pricing (Statutory Instrument 10 of 2019) before the new pricing (Statutory Instrument 10 of 2019) came into effect”

The plaintiff’s fuel stock held at NOIC depot since November 2018; attracted added duty. This was a directive given which was beyond the control of either of the parties to this suit.

ZERA dispatched an email to around 200 oil companies nationwide advising them all of the immediately payable cost build up of NOIC stocks which required settling.

As it was appropriate to do so because the owner of the 120,000litres of fuel was the plaintiff, the defendant immediately advised the plaintiffof those built up costs. After the plaintiff’s representative expressed outrage, the defendant proposed the solutions which I mentioned earlier(but which bear repeating here); those being that:-

Lonhro pay the difference of duty of $1,65

Lonhro can draw down at the current price of the fuel to exhaust the prepayment with us

RAM Petroleum can refund Lonrho the total amount prepaid.

Plaintiff rejected all the above suggestions. It is my considered view that the plaintiff’s failure to take delivery when it was tendered repeatedly and the plaintiff having assumed the risk in the product in accordance with the law; deprives the plaintiff the right to now demand delivery of 120,000ltrs of the product, without it paying for the built up cost. The legal and financial ramifications wrought upon by the legislation fall upon the plaintiff’s shoulders. As a result therefore, the plaintiff is not entitled to the delivery of 120,000ltrs unless the plaintiff had been willing to pay the built up costs which came about because of SI 10/2019.

I believe the defendant to be correct in its perception that the plaintiff repudiated the contract. The only thing left to do therefore is to bring this matter to a conclusion. In the circumstances of the plaintiff having rejected the options proposed by the defendant in its email of the 24th January 2019; the suggestion made by the defendant in their amended plea is legally sound and equitable. In my view, it appears provident that I formalise that very proposal. In those circumstances, the plaintiff’s claim must fail.

Accordingly I order as follows:

The plaintiff’s claim is dismissed.

The contract entered into between the parties whereby the plaintiff purchased 150,000ltrs of fuel from the defendant; be and is hereby cancelled.

The defendant be and is hereby is ordered to pay the plaintiff the sum of $159,300-00 representing the plaintiff’s partial perfaormance of the contract.

The plaintiff be and is hereby ordered to pay the defendant’s costs of suit.

MawereSibanda Commercial Lawyers, plaintiff legal practitioners

Kevin J. Arnott, defendant’s legal practitioners