John Alexander Cameron (Substituted by his executrix Rosemarie Joy Cameron) v Mary Murdoch Howson

### Preamble
Judgment No. SC 60/22
1
Civil Appeal No. SC 317/20
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DISTRIBUTABLE (52)

JOHN     ALEXANDER     CAMERON

(Substituted by his executrix Rosemarie Joy Cameron)

v

MARY     MURDOCH     HOWSON

SUPREME COURT OF ZIMBABWE

GWAUNZA DCJ, BHUNU JA & MATHONSI JA

HARARE, 1 JUNE 2021 & 10 JUNE 2022

J Wood, for the appellant

F Girach, for the respondent.

BHUNU JA

INTRODUCTION

[1]    The appellant is appealing against the whole judgment of the High Court (the court a quo) delivered on 14 March 2018 under  judgment number HH – 141/18 as read with HH -  421 - 20.  The order appealed against is couched in the following terms:

“Accordingly I order as follows:

1.  Judgment be and is hereby entered for the plaintiff in the sum of US$200 000.00 together with interest thereon at the prescribed rate being 5% with effect from 15 December 2015 to date of payment.

2.   Defendant is ordered to pay costs of suit.”

CITATION OF THE PARTIES

[2]    At the commencement of this hearing, the court was informed that the appellant has since passed away. May his soul rest in eternal peace. Initially Mr Girach for the respondent took issue with the fact of whether or not the appellant is properly represented at the appeal hearing. Mrs Wood, counsel for the appellant, promptly produced a deed of substitution of the appellant’s estate by his executrix one Rosemarie Joy Cameron. The deed of substitution was issued by this Court on 28 May 2021. The record of proceedings was accordingly amended to reflect the substitution.

[3]    The issue of the citation of parties having been resolved, I now proceed to delve into the merits of the appeal.

FACTUAL BACKGROUND

[4]    The appellant and the respondent are siblings. Their parents were the founders of a company Called Hamish Cameron (Private) Limited (the company). The respondent held 10 000 shares in the company.

[5]    Owing to strained relations the respondent decided to sell her 10 000 shares to the appellant. On 30 June 2008 the parties concluded a written agreement of sale in which the appellant agreed to purchase the respondent’s shares for the price of US$240 000.00. It was a term of the agreement that the appellant would pay the purchase price in 5 equal instalments over a period   spanning 5 years from June 2008 to June 2013.

[6]    In consequence whereof the respondent transferred her 10 000 shares to the appellant before receiving any payment for the shares. Between January and November 2010 the appellant paid a total of US$40 000.00 leaving a balance of US$200 000.00. The balance was payable by end of June 2013.

[7].   The appellant did not pay the balance within the prescribed time limit thereby prompting the respondent to take legal action against him. On 15 December 2015 the respondent issued summons in the court a quo claiming payment of US$200 000.00 as particularised in paragraph 1 above.

[8]   The appellant defended the respondent’s claim. In his plea he denied owing the respondent the amount claimed. He raised the special plea in bar of prescription. The special plea found favour with the court a quo under judgment number H – H - 141-18. That judgment was however upset on appeal by this court in case number SC 272/2018. The Court ordered continuation of the trial on the merits and remitted the matter to the court a quo.

[9]     The Court’s order reads:

“IT IS ORDERED THAT:

1. The appeal be and is hereby allowed with costs.

2. The judgment of the court a quo be and is hereby set aside.

3. The matter is remitted to the court a quo for continuation of the trial on the merits.

4. The full reasons of this order will follow.”

[10]     On the merits the appellant contended that the agreement to purchase the respondent’s shares was tainted with illegality and therefore unenforceable in that it contravened s 11 of the Exchange Control Regulations S.I 109/1996. This was for the reason that the agreement created an obligation for a Zimbabwean citizen to make payment to another Zimbabwean resident in foreign currency without exchange control authority.

[11]     The appellant further contended and pleaded compromise, arguing that the respondent had in an oral agreement, consented to the variation of the written agreement to the effect that the payment of the US$40 000.00 was in full and final settlement of all monies due to her by him. It was his contention that a written addendum was then made to reflect the terms of the agreement.

[12]    The respondent denied the averments made by the appellant. She countered that appellant admitted his indebtedness to her at a meeting held on 19 March 2015 at which he offered to pay US$1000.00 per month but she rejected the offer. In evidence thereof she produced minutes of the meeting. The minutes were written by Mr Andy House. They show that the appellant admitted owing the respondent US$200 000.00. She also denied having compromised her position by signing an addendum varying the original terms of the contract.

[13]     At the conclusion of the remitted trial, the court a quo found that there was no variation of the original contract because the respondent had not signed the addendum relied upon by the appellant. On the basis of that finding it concluded that the appellant owed the respondent US$200 000.00.

[14]   Aggrieved by the court a quo’s judgment, the appellant approached this Court on appeal.

GROUNDS OF APPEAL.

[15]	The appellant raised the following 9 grounds of appeal:

“1. The court a quo erred in failing to give proper consideration to the issues before it and in basing its judgment entirely on an earlier judgment that did not purport to determine the merits of the case.

The court a quo erred in failing to consider the legality of the agreement of sale and therefore in failing to find that it was tainted with illegality.

The court a quo erred in determining the question whether the agreement of sale was varied solely on the basis of the failure of the respondent to sign the proposed addendum thereto and accordingly erred in finding that the appellant agreed that the agreement was not varied.

The court a quo erred in failing to find that the respondent and her witness were not credible.

The court a quo erred in failing to find that the evidence disclosed 	that the respondent had agreed to the variation of the agreement, albeit not in writing.

The court a quo misdirected itself in excluding material documentary evidence on the basis that the matter would have to be postponed to the next term while accepting that it would be in the interests of justice to allow such evidence.

7. The court a quo erred in:

(a)	Failing to find that material facts had been withheld by the respondent in the fixing of the price of the shares concerned.

(b) Accordingly erred in failing to find that the   withholding of such facts was the reason and justification for the variation of the agreement of sale, notwithstanding that the agreement to vary it was not in writing.

The court a quo erred in any event in failing to find that 4 instalments of the debt had prescribed before the meeting of 19th March 2015.

The court a quo erred in any event in granting judgment in United States Dollars.”

THE RELIEF SOUGHT

[16]    If successful, the appellant sought the following relief:

The appeal be and is hereby allowed with costs.

The order of the court a quo be set aside and substituted by the following:-

“1. The plaintiff’s claim is hereby dismissed

The costs of suit are to be borne by the plaintiff on the legal practitioner and client scale.”

ISSUES FOR DETERMINATION

[17]	The 9 grounds of appeal raise 3 issues for determination. These are:

(a)	Whether or not the court a quo erred by ordering the appellant to pay the respondent US$200 000.00.

(b)	Whether or not the court a quo erred in ordering the appellant to pay the debt of US$200 000.00 in United States Dollars.

(c) 	Who is liable for the costs and at what scale?

Whether or not the court a quo erred in ordering the appellant to pay the respondent US$200 000.00.

[18]    It is common cause that the appellant and the respondent entered into a written contract of sale wherein the respondent sold her 10 000 shares to the appellant for US$240 000.00. The appellant paid a total of US$40 000.00 leaving a balance of US$200 000.00.

[19]     It is plain from the record of proceedings that the appellant admitted owing the amount claimed but pleaded that the respondent had compromised her position. He averred that she agreed to forego payment to her of the balance of the purchase price at the instigation of their mother.

[20] The appellant’s defence of compromise is premised on a document headed “ADDENDUM TO AGREEMENT OF SALE” It was the appellant’s submission that the document was drawn up to reflect the wishes of their mother.

[21]    The addendum was unilaterally signed by the appellant. The respondent refused to sign it. Clause 6 of the agreement of sale provides that:

“… any variation hereto shall be of no force or effect unless reduced to writing and signed by both parties.”

[22]    In light of the above provision, it was folly of the appellant to rely on a document not signed by both parties as evidence of variation of the written contract of sale. The contract itself decrees that such variation shall be a nullity and of no force or effect. On that score, the court a quo cannot be faulted in finding that there was no compromise. The appellant was therefore bound by the original contract in which he owed the respondent US$200 000.00. It is trite that once the parties had reduced their contract to writing, they were strictly bound by the terms of the written contract provided that the contract was lawful. Their mother’s wishes and aspirations were irrelevant to the validity and execution of the contract.

[23]    In view of the appellant’s admission that he owed the respondent the amount claimed, it is not necessary to look at any other evidence as his failure to prove compromise is fatal to his defence against liability if the contract is found to be lawful. In Mining Industry Pension Fund v DAB Marketing (Pvt) Ltd SC 10/11 this Court said that:

“A formal admission made in pleadings cannot be ignored by a court before whom it is made. Unless it is withdrawn it prevents the leading of any further evidence to prove or disprove the admitted fact.”

[24]	I accordingly find that the court a quo was correct in holding that the appellant was liable to the respondent to the tune of US$200 000.00 in terms of the contract of sale. That finding was however conditional upon the contract being lawful.

Whether or not the court a quo erred in ordering the appellant to pay the debt of US $200 000 in United States Dollars

[25]    In ground 2 of the appellant’s appeal he complains of the court a quo’s failure to determine the issue challenging the legality of the agreement of sale. The issues for determination by the court a quo were defined at the pre-trial conference on 3 October 2016 as follows:

“ISSUES

Whether the claim has prescribed

2.  Whether the sale agreement between the parties is a lawful agreement

3.  Whether the sale agreement was varied.

4. Whether the defendant made an express or tacit acknowledgment of liability.

5. Whether or not the Defendant is indebted to the Plaintiff in the sum claimed or any other amount claimed under the agreement.” (My emphasis)

[26]	In view of the appellant’s plea challenging the legality of the court a quo’s order in para 2 of the issues, the court a quo was duty bound to determine the issue pertaining to the legality of the contract. The appellant’s liability to the respondent could not be properly determined without a determination on the legality of the agreement of sale. A perusal of both judgments of the court a quo H–H –141 –18 and H - H –421- 20 shows that it neither considered nor determined the legality of the parties’ agreement of sale.

[27]    In Afaras Mtausi Gwaradzimba v C. J. Petron & Company 	(Proprietary) Limited 2016 (1) ZLR 28 at p 32A-B, this Court said:

“The position is well settled that a court must not make a determination on only one of the issues raised by the parties and say nothing about other equally important issues raised, “unless the issue so determined can put the whole matter to rest” – Longman Zimbabwe (Pvt) Limited v Midzi &  Ors 2008 (1) ZLR 198, 203 D (S)”

[28]	Having regard to the dictum laid down in the Gwarazimba case (supra), the court a quo undoubtedly fell into serious procedural error by its failure to consider and determine a pertinent issue raised at the pre-trial conference. In the circumstances of this case it is imperative that the issue of the legality of the agreement of sale be determined in order to do justice according to law. This can only be done through a remittal to the court a quo for a determination of this vital outstanding issue.

COSTS

[29]	For the forgoing reasons the appeal partially succeeds on grounds 2 and 9 only. As both parties have been partially successful, there shall be no order as to costs.

IT IS ACCORDINGLY ORDERED THAT:

1. 	The appeal on grounds 1, 3, 4,5,6,7 and 8 be and is hereby dismissed.

2. 	The appeal in respect of grounds 2 and 9 be and is hereby allowed.

3.	The order of the court a quo be and is hereby set aside.

4.    The matter be and is hereby remitted to the court a quo for the determination of the legality of the parties’ agreement of sale and payment in United States Dollars.

5.     There is no order as to costs.

GWAUNZA DCJ 	    :	    I agree

MATHONSI JA	   :	    I agree

Venturas & Samukange, appellant’s legal practitioners.

Atherstone & Cook, respondent’s legal practitioners.