Rainbow Tourism Group v Civerdale Enterprises (Pvt) Ltd t/a Classic Carpets

### Preamble
1
HH 747-18
HC 8995/16
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RAINBOW TOURISM GROUP

versus

CIVERDALE ENTERPRISES (PVT) LTD t/a CLASSIC CARPETS

HIGH COURT OF ZIMBABWE

MATHONSI J

HARARE, 23 October 2018 & 14 November 2018

Civil Trial

K Kachambwa, for the plaintiff

G Madzoka, for the defendant

MATHONSI J: It is not the function of the courts to make a contract for the parties or to rewrite a contract entered into between the parties. Neither is it open to the courts to excuse any party to a contract from the imperatives of the contract they have freely and voluntarily accepted on the basis that it has become too onerous or oppressive. In addition, it is not allowed to read into the contract some implied or tacit term that is in direct conflict with its express terms. See Magodora & Ors v Care International Zimbabwe 2014 (1) ZLR 397 (S) at 403 C-D. I should add that litigants are not allowed to use the process of the court – the pleadings – to negotiate new terms of a contract. The court will not countenance being used as a platform for such activity, its duty being to interpret and enforce those contracts made by the parties. Unfortunately that is what appears to be sought by the defendant in this matter, an incorporation specializing in the business of supplying and fitting carpets, which is being sued by the plaintiff, another incorporation involved in the hospitality business, for specific performance of a supply and fit agreement entered into between the parties in October 2015.

The plaintiff averred that on 16 October 2015 it engaged the defendant to refurbish its carpets on the ground floor of its main auditorium at the Harare International Conference Centre at an agreed all-inclusive charge of US$100 000. The terms were that the defendant would uplift the existing carpet, make good the area and then supply and fit 2 723 square metres of barcode carpet to the ground floor sitting area, centre area and 4 main entrances to the main auditorium at a unit price of US$35 per square metre. In pursuance of the said agreement it paid the defendant the agreed price of $100 000 but, in breach thereof, the defendant fitted only 1000 square metres of the carpet. In consideration of a slight variation of the original terms of the written agreement in terms of which the defendant was requested to deep clean and refit the old carpet meant to be replaced in order to meet certain time lines, the plaintiff tendered the agreed extra cost of US$1 845 for deep cleaning the old carpet and US$3 540 extra labour required at a rate of US$5 per square metre.

While opposing the plaintiff’s claim, the defendant specifically admitted in its plea that it entered into the agreement on terms alleged by the plaintiff and being “paid the agreed fee of  US$100 000”. It however made the averment that the plaintiff had varied the scope of the agreement to meet the demands of hosting a major international event. The defendant then counter claimed for payment of the sum of $33 460.38 which it allegedly incurred as a result of a variation of the initial agreement.

The facts of the matter are generally common cause and/or admitted in the pleadings of the parties. It is common cause that the parties concluded a written contract based on a quotation rendered by the defendant on 16 October 2015. In terms of that quotation the defendant would uplift the existing carpet, make good the area and then supply and fit a barcode carpet to the ground floor sitting areas, centre area and the main entrances to the main auditorium measuring approximately 2 700 m². The defendant would supply and fit double stair nosing with rubber insets where required. All the work would be performed at a cost of $100 000. Two of the main conditions of service contained in that quotation were that the plaintiff would “ensure (that) all areas to be carpeted (were) clear of furniture prior to the arrival of fitters” and that the whole contract price was “due and payable prior to commencement of work.” The payment was made in terms of the latter condition.

It is common cause that the plaintiff accepted the terms by issuing a purchase order for $100 000 dated 2 November 2015 and that the defendant commenced work at the site. It is also admitted by both parties that the terms of the contract were varied owing to the fact that the defendant’s order of the agreed carpet from its suppliers would have taken long to be delivered and yet the plaintiff was due to host a major international ICASA conference. The parties then agreed that instead of waiting for the delivery of the whole new carpet, the defendant would deep clean the old carpet at a cost of $1 845 and then refit it to the “ blue- chair area.” What is in dispute and has to be determined by this court is the extent and terms of the variation of the contract.

It is not in dispute either that indeed the defendant performed the work in terms of the original agreement in respect of all the areas to be fitted with a new carpet except the “blue-chair area” where it uplifted, deep cleaned and then refitted the old carpet in order to beat the deadline occasioned by the impending international conference. Upon being called upon to complete the work by fitting the new carpet to the “blue-chair area”, the defendant refused. It alleged that the variation of the original agreement had necessitated the incurring by itself of more expenses than had been anticipated. It then raised a new invoice dated 21 December 2015 in terms of which the project cost was revised and increased to $133 461.64. Claiming to have been paid $98 550 instead of $100 000 admitted in the pleadings, the defendant demanded an extra $34 911.64 not even for completing the work that had not been performed in terms of the original agreement but for what had already been done.

Prior to raising that new invoice the defendant had, by letter to the Plaintiff dated 9 December 2015 demanded an extra $19 388.25 to fit the outstanding new carpet. The letter in question addressed to the plaintiff’s group Procurement Manager, B Muchirahondo reads in part:

“RE: POST-INSTALLATION FINANCIAL AND RESOURCE ALLOCATION REVIEW OF CARPETTING PROJECT TO HARARE INTERNATIONAL CONFERENCE CENTRE

In response to your request, please find the reconciliation statement for resources put into the carpeting project against work actually done in preparation for the now-ended ICASA program. In the face of an apparently long production process which the ordered carpets had to go through, the RTG procurement office altered the scope of work in an effort to beat the set time lines with the result that Classic Carpets was asked to recondition and fit the RTG’s existing carpet to some areas, to which new carpets had initially been assigned. We wish to advise that since the carpets had already been paid for and the conference is over, we may now fit the new carpet at your request, for $19 388.25. This amount covers labour and accessory costs. We hope the statement satisfies your request” (Emphasis added)

Those sentiments were repeated in a subsequent letter the defendant wrote to the plaintiff on 22 July 2016. It is significant that at that stage the defendant was claiming an extra charge for only labour and accessories although the new invoice was now making reference to “barcode bitumen backed carpet tiles to centre of Conference” something not contained in the original contract and not pleaded at all in the pleadings filed of record. In fact in its pleadings, the defendant admitted, upon being requested to supply further particulars to its counter-claim relating to what was varied in the contract, that:

“1. AD PARA 1

1.1  The contract was varied on about 9th November 2015.

1.2  The contract was varied by the plaintiff’s Projects and Amenities Manager one Renica

Mapfunde.

1.3  In the original site plan, the blue chair areas of 775,53 square metres were to be fitted with

new barcode carpet and upon the change of scope of the agreement by the Plaintiff’s Project

(s) Manager on the same area, the old carpet was to be uplifted from the centre area of the

conference room under the plan, deep cleaned and then having it being fitted to the blue

chair area at a cost of $20/m². The additional costs were to be paid on completion of the

job.”

Clearly therefore the defendant did not plead that extra charges were also occasioned by a change of the quality of the carpet or that any superior carpet was ordered or supplied at a higher cost. This only arose when the defendant’s witness Louis Mudzongo testified in court. It is only then that he also sought to give evidence that the defendant was paid only $98 550, which had the effect of withdrawing an admission made in the pleadings. I might as well dispose of the issue of the admission now.

The issue of admissions is dealt with in s 36 of the Civil Evidence Act [Chapter 8:01] in terms of which an admission as to any fact in issue in civil proceedings made by or  on behalf of a party to those proceedings is admissible in evidence as proof of that fact, whether made orally or in writing. It is not necessary for any party to prove any fact admitted on the record of proceedings and it is not competent for any party to civil proceedings to disprove any fact admitted by him or her on the record of proceedings. Of course, an admission may be withdrawn, but only with the leave of the court. Such leave was not sought in the present matter. The point is made in Wamambo v Municipality of Chegutu 2012 (1) ZLR 452 (H) at 458 D – F, that where admissions made by a defendant amount to a confessionary pleading they are taken for granted making it unnecessary for the plaintiff to prove them. For that reason the defendant cannot lead evidence which has the effect of withdrawing a confessionary pleading without attempting to amend such pleading and ultimately without the leave of the court. See also Adler v Elliot 1988 (2) ZLR 283 (5) at 288C; Copper Trading Co (Pvt) Ltd v City of Bulawayo 1997 (1) ZLR 134 (5) at 143H – 144B.

The defendant cannot be allowed to dispute the payment of the $100 000.00 contract charge which it admitted. Neither can it allege the provision of a superior carpet at a higher cost contrary to what it has pleaded. These two issues, including the fact that the new carpet to be fitted at the site, was paid for in full, are taken for granted because they have been admitted both in pleadings and in evidence. Appropriate findings in that regard are therefore made.

I have said that the main issue to be decided is the nature of the variation of the main contract. It was the evidence of Bonwell Muchirawondo, the procurement manager of the plaintiff, that the original written agreement was only varied to the extent of the blue chair areas where it became necessary to fit the old deep cleaned carpet owing to the need to make the conference centre ready for the ICASA conference. The parties agreed that the variation would cost the plaintiff $1 845.00 for deep cleaning and $3 540.00 for labour. Immediately after the conference the defendant was required to return to site and fit a new carpet in the blue chair areas which had already been paid for. The labour for doing so had already been paid for and the plaintiff was tendering the sums of $1 845.00 and $3 540.00 incurred in the fitting of the old carpet to be replaced.

Muchirawondo denied that the defendant was entitled to revise the contract price or to demand more for labour than the $5.00 per square metre which was quoted. He also denied that the defendant was required to remove the chairs at the blue chair  areas because that exercise was undertaken by another contractor, Medallion which was brought in specifically to provide the labour for the removal and re-installation of the chairs. He stated that when they called upon the defendant to undertake the outstanding work after the conference, its director Louis Mudzongo started writing a chain of letters in which he was making endless demands not contained in the agreement, but which were confusing the plaintiff. As far as the plaintiff is concerned the defendant is contractually bound to deliver and fit the outstanding carpet. Although an alternative claim for payment of $64 505.00 was made, that amount has been eroded by inflation and would not replace the carpet and the labour paid for. The fair recompense would be specific performance.

The defendant’s version as presented by Louis Mudzongo, its director, is that the contract was varied by the plaintiff and not the defendant. This occurred when its representative Renica Mapfunde, who at all times dealt with him, directed the defendant to undertake more work than had been contracted for and undertook to pay the extra costs incurred. The extra work involved the removal of furniture from the site which had not been included in the original agreement. As a result, the defendant had to pay overtime to its personnel which is recoverable from the plaintiff. In addition, Renica Mapfunde ordered the installation of a more expensive carpet and agreed to pay. When all is said and done, the defendant completed the work at an extra cost of $33 460.38 which is different from what it originally claimed in its revised statement of 21 December 2015. Then the defendant had claimed the extra work cost $34 911.64.

Mudzongo tried to suggest that the new carpet sought by the plaintiff was not paid for. When the admissions made by him in correspondence to the effect that it was paid for were brought to his attention, he was forced to make a concession. He however shifted ground to say that the defendant was entitled to hold on to the carpet as a lien for the money being claimed for unpaid work.

What we therefore have is a case where the parties allege a variation of the contract. The plaintiff’s case is that the agreed variation was minor and did not alter the course of the agreement which remained valid and binding on the parties subject to the minor adjustments involving the payment of the agreed sums for the extra work. The defendant’s case is that the variations were so significant that they completely altered the course of the agreement to an extent that it has not only completed its mandate without fitting all the required new carpet but it is entitled to levy more charges against the plaintiff.

There are different methods by which a contract maybe varied or discharged but it is trite that whether a particular contract is varied or completely discharged is often only a matter of degree. The way in which the defendant has presented its case, even without specifically stating it, suggests either a waiver of existing rights by the plaintiff or a novation of the existing obligation and its replacement by a new one. I say so because the evidence is clear that in the original agreement the plaintiff acquired certain specified rights upon fulfilling its part of the bargain, namely the payment of the agreed sum of $100 000.00. These rights entailed an obligation on the part of the defendant to fit and supply a new carpet at the specified areas as set out in the quotation. These rights could not just disappear. It is either the plaintiff waived them or they were surrendered by novation.

De Villiers JA may have been stating the obvious in Stranchan v Lloyd Levy 1923 AD 670 at 671 when he stated that because contracts are made by agreement so may they be unmade by agreement. However, the critical point is that contracts cannot be unilaterally varied or discharged. If indeed the plaintiff waived its rights in terms of the contract to the supply and fitting of a new carpet at the blue chair areas of the auditorium, then, not only must such a waiver be proved it must also be shown that it was agreed upon by both parties. This is because it is accepted as settled in our law that waiver is a bilateral transaction. As stated in Alberts v Bryson 1976 (2) RLR 193 (A) at 198;

“waiver is a bilateral transaction and does not result from a unilateral decision of the creditor and 	nothing more.”

Writing about waiver and contrasting it with estoppel the learned author R.H Christe, Business Law in Zimbabwe, 2nd ed at p 105 said;

“The difference between waiver and estoppel then becomes apparent: a defendant who contends 	that the plaintiff has waived the contractual right he is seeking to enforce must prove an 	agreement to that effect but need not prove that he (the defendant) has altered his position in 	reliance thereon; whereas a defendant who contends that the plaintiff  is estopped from enforcing 	his contractual right must prove that he (the defendant) has altered his position to his prejudice in 	reliance on words, actions or inaction of the plaintiff which gave him reasonably to understand 	that the plaintiff had waived his contractual right, but he need not prove an agreement to that 	effect.”

The case of Stranchan v Lloyd Levy, supra, is authority for the proposition that clear evidence is required in order to prove a waiver of existing rights. In addition, it must be shown that a party who is alleged to have waived rights not only had full knowledge of those rights but also that if waiver by conduct is relied on, the conduct must be plainly inconsistent with an intention to enforce the rights. See Laws v Rutherford 1924 AD 261 at 263;  R. H. Christe, opcit p 106. It has also been stated that the conduct of the plaintiff must be unequivocal and that the issue is one of fact to be decided upon a consideration of all the circumstances. It is that which requires me to examine closely the evidence presented on behalf of the both parties.

Before doing that, let me state however that it has not been shown in the evidence that the original agreement of the parties was novated. Novation simply means the replacement of an existing obligation by a new one thereby discharging the existing obligation. In fact novation involves a waiver of existing rights and for that reason it cannot possibly be presumed. It must be strictly proved. See Ballenden v Salisbury City Council 1949 SR 269 at 273. It was stated in Commissioner of Taxes v Ridgeway Hotel Ltd 1963 R & N 774 (KS) at 778 that a subsequent agreement making a small variation in an existing contract will not normally be held to be a novation. This is because the parties probably intended the existing contract to continue in operation as modified. That principle accords with the circumstances of this case. As such there was no novation at all. In order for the defendant’s defence to be sustained, and indeed its claim for payment of extra costs to be established, it just has to prove a waiver.

But then it was through the evidence of Mudzongo that the defendant sought to establish a waiver, a wholly inadequate and prevaricating witness whose testimony not only was at variance with the pleaded case but also not borne by the documentary exhibits which he introduced. I agree with Mr Kachambwa for the plaintiff that the two versions of the parties are mutually destructive and therefore the matter turns on the credibility of witnesses. I also associate myself fully with the remarks made by Hungwe J in Nicoz Diamond Insurance Ltd v Clovgate Elevator Company (Pvt) Ltd HH 76-18 that:-

“In assessing the credibility of witnesses the court generally is guided by several factors. 	A range 	of factors must be taken into account in assessing a witness’s credibility. In Hees 	v Nel 1994 PHF 	11 Mahomed J, had this to say on the subject of assessment of 	credibility:

‘Included in the factors which a court would look at in examining the credibility 	or veracity of any witnesses, are matters such as the general quality of his 	testimony which often is a relative condition to be compared with the quality of the evidence of the conflicting witness. His consistency both within the context and structure of his own evidence and with the objective facts, his integrity, his candour, his age, his capacities and opportunities to be able to depose to the events he claims to have knowledge of. His personal interest in the outcome of the litigation, his temperament and personality, his intellect, his objectivity, his ability to effectively communicate what he intends to say and the weight to be attached and the relevance of his version against the background of the pleadings.’”

I have already said that Mudzongo attempted to withdraw confessionary admissions contained in the defendant’s pleadings which he cannot lawfully do without the leave of the court. That the defendant did not attempt to amend the pleadings or to seek the leave of the court to withdraw the admissions is a serious indictment of the witness. It means that his testimony cannot be relied upon in pursuit of the truth because if he was an honest witness he would have followed the procedure especially with the benefit of legal counsel. He must be taken as a loose cannon who also took his legal practitioner by surprise.

I have also said that part of his testimony is not borne by the pleadings. I will give examples. He maintained in his evidence in chief that the defendant had cleared the chairs at the blue-chairs areas including the stands or stumps on which the chairs are resting. However his own bundle of documents, exh 3, contains photographs showing blue stands or stumps on which the chairs rest and a workman fitting a carpet by going round the stumps. They were therefore never removed. That exhibit also contains a copy of an email written to him by Renica Mapfunde on 10 December 2015 which clearly suggests that the chairs were actually removed by a third party and that the plaintiff was no longer interested in incurring further costs of engaging that third party. It therefore elected to cut down on its expenses by merely taking delivery of its new carpet for future use. The email was written in response to the letter of Mudzongo dated 9 December 2015 which I have already reproduced above and states;

“Thank you for your explanation. It is trite that I gave you permission to carefully remove our old carpet, dry clean it and fit it back because of the ICASA time limits. Your indication at that time was that since you got paid on 23 October, you were able to pay your supplier only on 	the 26th and it would then take 6 weeks from the 26th for the carpet to be ready, plus 3 days delivery. I gave you permission to install the old carpet but that you should go ahead and 	make an order for the new carpet. Removing the already installed carpet will involve both Medallion and Mabelreign Upholsters coming back  to do some works which they might charge us. My suggestion is therefore, that you simply provide us the carpet for now. We will install it when the existing carpet looks bad. Whether we will use you or someone else to fit the carpet, is RTG’s decision. We will not incure an additional $19K for removal and installation at this point.” (Emphasis added)

The witness had suggested to the plaintiff that it should pay an extra $19 388,25 to enable his company to return to install the outstanding new carpet which amount was for labour and accessories. The letter can only be interpreted to mean that the plaintiff had incurred costs of engaging both Medallion and Mabelreign Upholsters for purposes of clearing the area of chairs as stated by the plaintiff’s witness. I therefore reject the defendant’s version that it incurred further costs related to doing the same job.

There is nothing in the evidence presented in court to suggest that the plaintiff waived its right to the installation of a new carpet which right accrued to it by virtue of the original agreement. There is nothing in the evidence suggesting that the original agreement was altered in such a way that the defendant was discharged from liability merely by the installation of an old carpet on parts of the contracted area. The defendant had an obligation to complete the job on terms set out in its quotation on which the parties contracted. What regrettably is borne out by the evidence is that small variations were made to the existing contract for the defendant to temporarily install an old carpet at the blue chairs areas in order to accommodate the ICASA event and thereafter return to complete the job properly. The defendant quoted a price for the small variations which has been tendered.

What is apparent is that the defendant then attempted to unilaterally vary or alter the terms of the agreement taking advantage of the small variations. What then transpired through correspondence and indeed the pleadings is that the defendant tried to either impose a new contract or to negotiate new terms of the contract. That cannot be done because of the sanctity of contract which is the corner stone of our law of contract. As a matter of public policy courts uphold its tenets that parties have the utmost liberty to contract and that once they have done so, freely and voluntarily, their contracts are held sacred and are  enforced by the courts. The courts will not lightly interfere with the freedom of the parties to contract. See Book v Davidson 1988 (1) ZLR 365 (S) at 378G-379C.

Courts of law are only confined to interpreting a contract and not creating a new one for the parties. They will always respect the contract made by the parties and give effect to it. It does not matter that the terms of the contract are onerous or oppressive. See Alliance Insurance v Imperial Plastics (Pvt) Ltd & Anor S-3-17 (as yet unreported); Magodora Ors v Care International Zimbabwe, supra.

The defendant charged $1 845-00 for deep cleaning the carpet. It also quoted $5-00 per square metre for labour. As such the sums tendered by the plaintiff for the variation are sufficient. I have found that the parties did not agree on any further variations. The defendant has not proved its counter claim which must be dismissed.

Mr Madzoka for the defendant submitted that the plaintiff is not entitled to an order for specific performance because it has not performed its part of the contract. A party which has not done so is not entitled to specific performance. He relied on the authority of Intercontinental Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd 1993 (1) ZLR 21 (H) and Farmers’ Co-operative Society (Reg) v Berry 1912 AD 343 (quoted with approval by robinson J in Intercontinental Trading (Pvt) Ltd, (supra). In the latter case Innes JA stated at 350:

“Prima facie every party to a binding agreement who is ready to carry out his own obligation 	under it has a right to demand from the other party, so far as it is possible, a performance of 	his undertaking in terms of the contract. As remarked by kotzee CJ in Thompson v 	Pullinger (IOR p 301)

‘The right of a plaintiff to specific performance of a contract where the defendant is 			in a position to do so is beyond all doubt’’’

The right to specific performance has always been subject to the court’s discretion to award it or not. In the words of Robinson J in International Trading (Pvt) Ltd, supra  at 26A:

“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.”

On the nature of that discretion and the manner in which it is to be exercised it had been said that the plaintiff has the right of election whether to hold a defendant to the contract and claim performance by the defendant of what the defendant bound himself or herself to perform or to claim damages for the breach. The defendant has no right to claim to be allowed to pay damages instead of performance. However in appropriate cases, the court may exercise its discretion by refusing the decree of specific performance in favour of a claim for damages. The court’s discretion must be exercised judicially but is not subject to any rigid rules as each case must be judged on its own circumstances. See Haynes v King Williams Town Municipality 1951 (2) SA 371 (A) at 378 D-E.

It occurs to me that this is a case where specific performance should be ordered. I do not agree with Mr Madzoka for the defendant that the plaintiff has not fulfilled its part of the agreement because it refused to pay the extra cost of $19 388-55 claimed by the defendant for fitting the new carpet. That charge was not part of the agreement but was imposed by the defendant outside the contract. The services to be rendered have been paid for. The agreed costs of the variations have been tendered and awarding damages will not meet the justice of the case because it will not adequately compensate the plaintiff. In any event the plaintiff has elected to move for performance. The defendant has admitted being in possession of the new carpet. It should simply proceed to fit it on its original terms including that the plaintiff has to ensure that the area to be carpeted  is clear of furniture prior to installation.

In the result, it is ordered that:

The defendant be and is hereby directed to supply and fit the remaining 1723 square metres of Barcode Carpet in the ground floor sitting areas and the four main entrances of the main auditorium at the Harare International Conference Centre within seven (7) days of the date of this order.

The plaintiff shall ensure that the areas to be fitted with the new carpet are cleared of any furniture prior to the installation of the carpet.

The plaintiff shall pay to the defendant the tendered sums of $1845.00 and $3 540.00 for extra work performed.

The defendant’s counter claim be and is hereby dismissed.

The defendant shall bear the costs of suit.

Mawere and Sibanda, plaintiff’s legal practitioners

Manase and Manase, defendant’s legal practitioners