Christopher Renwick James Hawgood v Brian Nyathi

### Preamble
1
HH 119-22
HC 4063/19
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CHRISTOPHER RENWICK JAMES HAWGOOD

and

BRIAN NYATHI

HIGH COURT OF ZIMBABWE

MUZOFA J

HARARE, 26th ,27th of October, 2021 & 01 March 2022.

Civil Trial

G.R..J Sithole, for the Plaintiff

J.M. Bamu, for the Defendant

MUZOFA J: The plaintiff built a gymnasium for his son an aspiring body builder. When the gym was ready for equipping he was referred to the defendant for supply of the equipment. The plaintiff contacted the defendant and they agreed to transact. The transaction turned sour as a result of which the plaintiff has sued the defendant.

In the summons the plaintiff claims for specific performance and damages in the alternative for breach of contract in the sum of US$13 718.59 and costs of suit on a legal practitioner and client scale. In his declaration the plaintiff states that he entered into a verbal agreement with the defendant for the supply of specific gym equipment. The terms of the agreement were inter alia that the plaintiff pays US$15 780.00 for the gym equipment .Upon receipt of the payment the defendant would deliver the gym equipment. The plaintiff paid the full purchase price. Contrary to the agreement, the defendant delivered gym equipment valued at US$2 061.41. The outstanding gym equipment valued at US$13 718.59 was not delivered. Despite demand the defendant has failed to deliver the outstanding equipment. It is on that basis that the plaintiff seeks specific performance or damages in event specific performance is no longer possible.

The defendant entered appearance to defend. In his plea he denied entering into an agreement with the plaintiff in his personal capacity. At all times, so he pleaded he transacted in his capacity as a director of a company known as Reddune Fitness ‘Reddune’ .Further to that he pleaded that, there was no contractual relationship between the plaintiff and the company for the supply and delivery of the said gym equipment. It was a term of the agreement that both parties would be involved in equipment research, procurement, and logistics including imports until delivery. The company’s sole obligation was to assemble the equipment once delivered and commission it. The defendant sourced the equipment from suppliers in South Africa and plaintiff was put in direct contact with the suppliers. Payment was to be made directly to the suppliers by the plaintiff through whatever means chosen by the plaintiff. No payment was made directly to the defendant or to Reddune. The payment, collection and delivery of the equipment was to be done through a third party on the plaintiff’s specific instructions.

At the pre-trial conference the following issues were referred to trial:

Whether or not the contract of sale of the gym equipment in question was between the plaintiff and the defendant?

If the answer to (i) above is in the affirmative, what were the terms of that contract?

Whether or not the defendant breached the terms of that contract?

If the answer to 1.3 above is in the affirmative, is the plaintiff entitled to the relief sought in the summons in the main or in the alternative?

The plaintiff’s case.

The plaintiff was the sole witness in his case. His evidence was that when he had finished building the gym and needed the equipment, he was referred to the defendant by one Grant Mitchell. He contacted the defendant. Defendant agreed to supply the equipment with his South African counterparts. From the two quotations supplied to him by the defendant his son settled to be supplied by a company known as MiFitness a company based in South Africa. The equipment was be transported, installed and warranted by the defendant. He had no contractual relationship with the defendant’s South African partners particularly MiFitness. Defendant was not his agent.

He could not pay directly to MiFitness in South Africa due to foreign currency challenges. The defendant identified a third party, Swithun Pasi ‘Pasi’ who had free funds in South Africa. They agreed that the plaintiff would pay the purchase price in local currency at a premium into an account held by Dulwich Investments a local company owned by Pasi. Pasi would pay the purchase price in South African Rands to MiFitness. The parties engaged verbally and by email. The emails were produced to confirm the nature of engagements between the parties. He deposited the amount agreed by the parties. Despite full payment he only received equipment valued at US$2 061.41. He followed up with the defendant.  The defendant advised him that Pasi had not paid the full purchase price to MiFitness. Both the plaintiff and the defendant did all that they could to locate Pasi to no avail. Disgruntled by the turn of events the plaintiff filed a criminal charge of fraud with the police against the defendant.

Under cross examination, the plaintiff conceded that his understanding of the agreement and the defendants were at variance. He also conceded that the defendant used an email signing off as the director of Reddune. However he denied that, that was proof that he contracted with Reddune. He denied that the defendant communicated with him on behalf of Reddune. He denied contracting with Mifitness and Pasi. There was no privity of contract. He said these were the defendant’s nominees for the supply of the gym equipment. He did not deal with them directly. The defendant would communicate with them and at times copied the plaintiff the e mails. He insisted that he did not contract with Reddune but with the defendant in his personal capacity.

The defendant’s case.

The defendant’s evidence was that he did not personally enter into a contract with the plaintiff for the supply of gym equipment. At all times he transacted with the plaintiff as the director of Reddune. This is evident from the e-mail conversations between the parties. The email handle was signed director Reddune, when he referred to the parties he always used a third party and it actually extended some benefits to the plaintiff showing that it was in the company that was negotiating and contracting with the defendant. The defendant was clear to the plaintiff that the equipment was to be sourced from their South African partners.  The plaintiff was required to pay directly to the supplier of his choice. The defendant would only be paid a commission. In due course when plaintiff could not secure foreign currency, he referred the plaintiff to Pasi who had free funds in South Africa. Pasi and the Plaintiff agreed that the plaintiff would pay the local currency equivalent into Dulwich Enterprise’s local account. Pasi would then make the payment to MiFitness. Pasi was responsible for collection and delivery of the equipment. He did deliver the first consignment. When he followed up with MiFitness on the outstanding equipment, he was advised that the company had supplied goods paid for. No payment was made for the outstanding equipment. The defendant also produced and referred to email communications that took place with the plaintiff, MiFitness, Pasi and himself.

It dawned on him that Pasi did not acquit all the money to MiFitness. He advised the plaintiff of the developments. The defendant with the help of the plaintiff’s contacts in South Africa tried to look for Pasi. Pasi had literally disappeared into thin air.

His cross examination did not take the plaintiff’s case any further. What emerged is that both parties rely on the same documentary evidence of the e- mail communications between them. The only point of departure is the interpretation of the communication. The defendant also conceded that although Reddune as a company as a marketing department he did not refer the contract negotiations to the department. Although it was suggested that this was evidence that he was contracting in his personal capacity, he denied the assertion. His point was it that he could also enter into contracts on behalf of the company.

Analysis of the evidence and the law

Parties to the contract.

The seminal words by Tredgold CJ in Levy v Banket Holdings (Pvt) Ltd are in instructive in the determination of this issue that,

“…. In considering whether a contract is concluded between two parties, a court is not interested in the state of mind of the parties considered in the abstract. It must decide the issue on the state of mind of the parties as manifested by word or deed. It is idle for a party to avow mental reservation or unspoken qualification if these are inconsistent with what is said or done.”

This is an objective method of inquiry determinable on the evidence and exhibits placed before the court. For a valid contract to come into being there must be an offer and acceptance by parties who can competently enter into a contract. There must be an unequivocal offer accompanied by an intention to create a contract, the animus contrahendi. Generally negotiations leading to the conclusion of a contract lack animus contrahendi and will not be regarded as offers.

Acceptance by the offeror must be clear and unequivocal too. A counter offer extinguishes the offer by the offeror. A valid acceptance at law is that made by the person to whom the contractual offer was made.It follows that the parties to a contract are those engaged in the negotiations and the subsequent sealing of the agreement.

At the outset I would dispose of the defendant’s submission that there was no meeting of the minds as to the identity of the parties to the contract. As such there was a mistake, there is no valid contract to consider. In the first, the defendant did not plead this defence. The plaintiff did not even address his mind to this issue. It is trite that parties are bound by their pleadings. In any event the alleged mistake is immaterial. A mistake is immaterial if it did not affect the parties’ decision to contract. If the mistake does not go to the root of the contract then it is immaterial. In this case it was not shown that had the plaintiff known that he was contracting with Reddune he would not have contracted. The plaintiff simply wanted a credible supplier of the gym equipment.

The only issue then is who the parties are to the contract. The onus is on the plaintiff to show that he contracted with the defendant in his personal capacity.

The evidence placed before the court must therefore provide the solution.The agreement can be ascertained from both the verbal and written communication by way of e-mails between the parties. The bundles of documents filed by both the plaintiff and defendant confirm the following after the plaintiff was referred to the defendant for the supply of the gym equipment.

The first stage in this transaction was the negotiation stage. The parties engaged verbally and by email. The plaintiff spoke to the defendant on phone making an enquiry if the defendant could supply gym equipment. On the 15th February 2017 the plaintiff sent an email to the defendant with a list of his son’s requirements. A follow up email dated 18 February was made inquiring if defendant can supply the equipment and the price of such. On 20 February the defendant responded advising that he had secured two quotes from their South African partners, Active Africa and MiFitness. The two quotes were attached. The proposed terms are set out. I will revert to them later in the judgment if necessary. After some exchanges on clarification the plaintiff undertook to forward the e-mail to his son in Australia for confirmation and priorisation of the required equipment. On 28 February, the   plaintiff’s son responded with a priority list. The list is sent to the defendant who in turn sends it to Rob at MiFitness.

As the parties negotiated both, the terms of the agreement and the parties to the contract become clearer and clearer. On 20 February 2017 the defendant sent an email to the plaintiff. In my view this email sets out the parties’ obligations I quote it for ease of reference and in the same vein identifying the parties to the contract.

‘Dear Chris

Further to your inquiry for gym equipment.

Please find attached the two quotes we have so far received for the equipment from our South African partners. The quotes are from

Active Africa

MiFitness

All pricing is ex- Jhb and my company will collect, transport and deliver to Harare including payment of all the necessary duties etc.

Once delivered Reddune will also check and install all equipment and issue a warranty certificate.

Given the forex challenges you are welcome to pay direct to RSA through whatever channels. We usually receive about 5% trade discount which I am sure we can extend to you.

……

Trust you find the above in your favour.

Kind regards

Brian Nyathi

Director

Reddune Fitness

Shop 5, Lot 39 Building

As at 20 February the parties were still negotiating. If it had occurred to the plaintiff all along that he was negotiating with the defendant in his personal capacity, this communication makes it clear who is the contracting party. It is apparent Reddune had certain obligations to fulfill. It extended the 5% discount benefit which in its ordinary business is due to it to the plaintiff. In response the plaintiff did not seek clarity on the obligations of the parties as set out in his communication of the 28th of February. He actually said his son was happy with the equipment but would want to phase the purchase in order of priority. The list with the prioritized equipment was sent. The plaintiff did not comment on this email but chose to rely on the email dated the 28th of February where the defendant wrote ‘ Yes we are using a Total Project Approach which means I will walk with you from the equipment research , procurement, logistics including imports until delivered to your home. I will inspect all the equipment and assemble. All equipment will also carry a one year warranty once commissioned’. This statement must be contextualized; its foundation is from the communication of the 20th of February. It is trite that a company does its business through people. When the defendant personalized the operalisation of the obligations he was putting out that he will personally do so as opposed to any person at Reddune. Eventually when MitFitness sent an invoice it was in the name of Reddune and not the defendant. The invoice was copied to the plaintiff.

It was submitted for the plaintiff that the defendant’s liability stems from the quasi mutual assent doctrine. The doctrine applies where the question to be determined relates to the existence of an agreement. There must be some conduct by word or deed by the defendant that objectively assessed must have led the plaintiff to believe that he was contracting with the defendant in his personal capacity. This is the essence of the doctrine that,

‘If, whatever a man’s real intention maybe, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party’s terms.

From the decided cases then, there must be conduct by word or deed that creates an impression that the person so conducting himself is agreeable to what is proposed. To assist the party relying on the doctrine courts have developed three issues for consideration, that the party relying on the doctrine must be taken as being aware of all the relevant facts of which a reasonable man must have been aware, there must be no fault or blame attributable to the other party beyond the representation and lastly there is no need to prove that the party relied on the representations to his prejudice.

The plaintiff was well aware of all the facts in this case as presented by the defendant. He became aware that there is a company Reddune where there defendant is the director. That company was going to discharge some obligations in terms of the agreement. There was no specific time that the defendant put out himself as contracting in his personal capacity. This is distinguishable from the circumstances in Gumbo v Mkandla where the defendant’s conduct in that case gave the plaintiff to understand that he was contracting with the plaintiff. The same cannot be said for the defendant in this case. The email dated 20 February shows who are the parties. The plaintiff did not object and obviously was looking forward to benefit from the 5% discount extended to him by Reddune. It would be unreasonable to come to the conclusion as advanced for the plaintiff that the company was coming on the performance of the contract only yet before that engagement there is no conduct by word or deed by the defendant putting out himself as personally contracting with the plaintiff. It boggles the mind why the plaintiff selectively accepts the email of the 28th of February as setting out the obligations disregarding the email of the 20th of February.

The plaintiff clearly contracted with Reddune. This is a matter where the legal practitioners must have properly advised their clients. When litigants approach legal practitioners, they just present their case. It is for the legal mind to identify the cause of action and the party to sue. In this case the plaintiff must have proceeded against both the defendant and Reddune.

The plaintiff failed to prove on a balance of probabilities that he contracted with the defendant. There being no contract between the plaintiff and the defendant it becomes unnecessary to determine on the other issues relating to the terms of the contract and the appropriate relief.

In respect of costs both parties request for costs on a higher scale. I find no justification for costs on a higher scale.

Accordingly, the claim is dismissed with costs.

Gill.Godlonton & Gerrans, plaintiff’s legal practitioners

Mbidzo Muchadehama & Makoni, defendant’s legal practitioners