RTO Engineering (Private) Limited v Gulliver Consolidated Limited t/a More Wear Industries & Anor

### Preamble
1
HH 218-12
HC 4123/08
RTO ENGINEERING (PRIVATE) LIMITED
versus
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RTO ENGINEERING (PRIVATE) LIMITED
versus
GULLIVER CONSOLIDATED LIMITED t/a
MORE WEAR INDUSTRIES
And
STANBIC BANK LIMITED

HIGH COURT OF ZIMBABWE
HUNGWÉ J
HARARE, 4 November 2009 & 23 May 2012

Opposed Application

F Mutamangira, for the applicant
G Mhlanga, for the 1st respondent
I Chagonda, for the 2nd respondent

HUNGWÉ J: applicant seeks an order of specific performance in the following terms:

(a) That the first respondent be and is hereby ordered to manufacture, assembled and deliver to the applicant a 1 x 45 Lowbed Trailer in accordance with the specifications set out in its quotation of 4 March 2008;

(b) That the first respondent be and is hereby ordered to deliver the 1 x 45 Lowbed trailer to the applicant within 10 weeks or 70 days of the granting of this order.

(c) Cost of suit.

In its founding affidavit the applicant makes the following averments. On or about 4 March 2008 of the first respondent and the instance of the applicant issued a quotation to the applicant for the manufacturing and assembly of a 1 x 45 Lowbed trailer has requested by the applicant. In terms of the quotation the full purchase price of the low bed trailer was Z$793 000
000 000, 00 (793 billion Zimbabwe dollars). It was further advised and indicated that the low bed trailer will be ready for delivery within eight weeks from the date of payment. Acting on the quotation and widen the quotation remained a valid, on the same day that the quotation was issued the applicant initiated payment of the required a 793 billion dollars by way of the real-time gross settlement payment system. Due to some error at second respondent payment was not correctly posted in first respondent’s accounts as it should have. However subsequently it was correctly posted into first respondent’s account.

Despite such payment responded first respondent refuses to deliver the said low bed trailer and refuses to honour its part of the contract.

First respondent vehemently opposes the grant of the order for specific performance. No order is sought against the second respondent.

In its opposing affidavit the first respondent raises two issues. Firstly, it contends that there was no contract. Secondly, it states that even if the court a way to hold that a contract came into existence an order for specific performance will work undue hardship on the first respondent.

First respondent urged the court to find that there was no meeting of the minds bearing in mind the terms of the quotation relied upon by the applicant. That quotation under sub-item “VALIDITY” states “Price is subject to confirmation on placement of the order and payment of deposit.” (my emphasis). This term required anyone wishing to make a purchase to do two things: first ask for the price of the trailer and the at the point of paying deposit confirm the price. The reason for this was that because of hyper-inflation, it was impossible to keep down a given or quoted price therefore, before any sale was concluded, it was necessary that each element of the purchase is agreed upon. Because at the time applicant made its payment by way of an RTGS, no confirmation of the price had been obtained as required by the provision in the quotation, therefore no contract came into existence.

The second point taken was that in light of the hyperinflationary environment prevailing at the time, even if the court held that a contract came into existence, an order for specific performance would work undue hardship as the order would be tantamount to giving the trailer away for no value received.

It seems to me that the issue here is whether the quotation constitutes an offer which, upon its acceptance by the applicant a contract came into existence.

Put differently, the question to ask is whether the quotation constituted an offer whose acceptance resulted in a contract of sale?

The record shows that upon being shown proof of RTGS payment effected on 4 March 2008, 1st respondent indicated that the deposit was not reflecting in the account credited at payment. First respondent did not confirm that the sale would be at the price stated since at the time the RTGS payment was done, no confirmation had been sought by the applicant. By the time the accounting error was discovered by the first respondent’s bank, the price had shot up due to hyper-inflation. First respondent indicated the new price and returned the payment by applicant. It invited applicant to negotiate further if it was still interested in the trailer. A careful reading shows that the first respondent’s quotation was not an unconditional offer on the part of the first respondent which the applicant could, by accepting, bind the first respondent.

In Wasmuth v Jacobs 1987 (3) SA 629 at 633D LEVY J said:

“It is fundamental to the nature of any offer that it should be certain and definite in its terms. It must be firm, that is, made with the intention that when accepted it will bind the offeror.”

If the intention to be bound by mere acceptance is lacking the offeror can be said to lack animus contrahendi. In casu, the circumstances of this case demonstrate clearly, in my view, the fact that the offeror anticipated that the parties would agree on the price for the raw materials initially, before even the sale is said to be perfecta. This explains why there is reference to the cost of raw materials, as separately considered from the full purchase price. The whole tone of the quotation indicates an invitation to do business rather than animus contrahendi. In the particular circumstances of the case I therefore hold that due to lack of a meeting of the minds, there was no contract.


Assuming that I am wrong in my view of the matter regarding the formation of the contract, I still come to the same conclusion upon a consideration of the contention that an order of specific performance would bear undue hardship on the 1st respondent. It is trite that the grant of specific performance is within the discretion of the court.

It is settled law that the grant or refusal of an order for specific performance is entirely a matter for the discretion of the court in which the claim for specific performance is made. (per ROBINSON J in Intercontinental Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd 1993 (1) ZLR 21 at p26.)

Upon a full conspectus of the circumstances surrounding this case, this court cannot ignore the obvious hardship which such an order would cause upon the 1st respondent. In my view it is not a judicial exercise of discretion for a court to willy-nilly grant orders which fly in the face of hard facts such as the hyper-inflationary environment prevailing at the time of the transaction in question.

In the result the application is dismissed with costs.

Mutangamira and Associates, legal practitioner for the applicant
Chihambakwe, Mutizwa & Partners, legal practitioners for the 1st respondent
Atherstone & Cook, legal practitioners for the 2nd respondent
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