No S.C. 70/03
Appeal No 222/02
MUJERI MUZA v AGRICULTURAL BANK OF ZIMBABWE
COURT OF ZIMBABWE
CJ, ZIYAMBI JA & MALABA JA
SEPTEMBER 11, 2003 & OCTOBER 5, 2004
for the appellant
for the respondent
CHIDYAUSIKU CJ: The
appellant in this case sued the respondent in the High Court for the
payment of the sum of $356 362, 52.
The summons claimed that the
money was due and payable by the respondent to the appellant in
respect of an overpayment of a loan
provided to the appellant by the
respondent. A default judgment against the respondent was initially
granted but was subsequently
rescinded and the matter was defended.
In its plea to the claim as set out in the summons, the respondent
(defendant) denied owing
the appellant any money. It further
averred that it had loaned the appellant money amounting to $253 905
and that taking into account
interest on that loan it was still owed
some money by the appellant. On 21 January 2002 the appellant filed
In the replication the appellant denied the
averments in the plea and joined issue. The matter was then set for
the next stage
of the proceedings, namely, the pre-trial conference.
Prior to the pre-trial conference the appellant filed an amendment
replication. In paragraphs 2 and 3 of the replication the
appellant made the following averments for the first time:
In respect of Loan Account
Number 9144980 only the amount of $133 144,00 was advanced.
Defendant is not entitled to rely on any
variation of the written
loan agreement by virtue of the fact that in terms of Clause 16
thereof, no variation to the terms of the
agreement was to be of any
force and effect unless contained in writing and signed by the duly
authorised representatives of Defendant
Plaintiff admits that he alone
signed a document in which he appeared to consent to an increase of
the loan by $120 761,00 but states
that there was no reality of
consent in that the document was obtained from him under duress and
misrepresentation. In particular,
Defendants manager informed
him that unless he signed the document Defendant would repossess the
motor vehicle which had been
purchased with the initial loan and
which had been delivered to him some eight months previously and
misrepresented the position
by stating that in law it was entitled to
effect the repossession which was not the case.
The matter thereafter proceeded
to trial and the appellants claim against the respondent was
dismissed with costs. He now appeals
against that whole judgment.
The factual background to this
case which was succinctly set out by the learned trial judge in her
judgment are as follows:
appellant, a communal farmer, responded to an advertisement of the
respondent and applied for a loan to purchase a CPB12 8-ton
truck, (the truck) in or about 1991. The respondent had been
granted a facility by the World Bank to lend to Zimbabwean
enable them to purchase farm equipment and implements. The
application of the appellant was successful. He was advanced
sum of $133 144,00 as a long term loan. An agreement to this effect
was duly signed and numbered 91448980. The sum of $133
represented the price of the truck as quoted to the appellant by
Dulys, a motor vehicle supplier.
The truck was duly delivered to
the appellant. The respondent contends it informed the appellant by
a letter dated 27 April 1992
that the truck was available for
collection, that the price of the truck was going to be increased,
and that collection of the vehicle
would be construed as an
acceptance of the increased price of the vehicle. The letter reads,
in part, as follows:
The depreciation of the
Zimbabwean dollar against the major currencies increased the cost
insurance freight of your item. Consequently
the cost of your item
will escalate resulting in additional costs which you will be advised
of upon receipt of the final invoicing
by the corporation.
note that acceptance of delivery of the item referred to above will
imply acceptance of any additional costs to be levied on
The letter expressly alerted the
appellant to the proposed increase in the charges and to the fact
that his acceptance of delivery
would be construed as consent to such
The appellant denied having
received the above letter from the respondent. He contended that it
was Dulys that advised him of
the availability of the truck. The
court disbelieved him, and concluded that the appellant received the
respondents letter of
27 April. That finding by the court cannot
be faulted. The appellant has not challenged that finding. It is
quite clear that
the appellants denial of the receipt of that
letter is motivated by the fact that such an admission would
the appellants contention that he was coerced
into signing Exhibit 2 referred to hereunder.
or about March 1993 the appellant was summoned to the Marondera
branch of the respondent. There, he had a meeting with the
accountant who informed him about the increase in the purchase price
of the truck. The accountant asked the appellant to agree
out an additional loan to cover the additional cost of the truck.
The appellant, before leaving, signed a final invoice
in which he
accepted to pay the additional charges to the cost of the truck in
the amount of $120 261. The signed final invoice
was produced as
Exhibit 2 and provides, in part, as follows:
FINAL INVOICE: AFC/WORLD BANK: LOAN AGREEMENT NO
accept the increase and wish to advise the Corporation that I will
pay the said $120 761 by:
(i) total cash
payment to the Corporation on or before the next 14 working days
for which I hereby authorise the Corporation to debit the Loan
Agreement by the said sum of $120 761 and advise me
of the raised
NELSON MUJERI MUZA
The appellant admits that he
signed Exhibit 2 but contends he did so under duress. His evidence
on this point was that the accountant
and some of the respondents
employees threatened to repossess the truck unless he signed Exhibit
2. He alleged he was told that
after repossession of the vehicle,
the truck would be evaluated and if any damage to the truck was
discovered it would be deducted
from the $41 000,00 he had paid as
deposit and the balance would be refunded to him. The respondent
did not call as witnesses the
accountant nor any of the employees
present when Exhibit 2 was signed. In the light of this the court
felt constrained to and did
accept the evidence of the appellant on
this point. As a consequence of this finding the court concluded
that Exhibit 2 was signed
under duress. This is a somewhat generous
finding for the appellant for a number of reasons.
Firstly, the letter of 27 April
clearly alerted the appellant to the increase in the purchase price.
He did not protest at such
increase. If anything, he collected the
truck despite being advised that such acceptance implied acceptance
of the increase in
the purchase price of the vehicle. At that point
there was no fear of repossession. The appellants conduct
therefore, at that
stage, evinces a voluntary acceptance of the new
purchase price of the vehicle.
his letter of demand and as indeed, in all the correspondence shortly
before the commencement of this action, the appellant
stance that he was entitled to a refund on two grounds - firstly,
on the basis of the infringement of the in
rule and, secondly, on the basis that the Supreme Court had denied
the respondent the right to levy additional charges. The issue
coercion was not mentioned in the letter of demand. The issue of
coercion was only raised for the first time in the amended
replication after pleadings had closed. It would appear to me that
the allegation of coercion was an after-thought upon the realization
of the correct interpretation of the Supreme Court judgment.
Thirdly, the summons setting out the plaintiffs cause of action
makes no reference to coercion.
Be that as
it may, there is no appeal or counter-appeal in regard to this
finding of the court a
consequently, this Court is not seized with the issue of the
correctness or otherwise of that conclusion.
After signing Exhibit 2 the
appellant continued with his payments under the loan agreement. A
few years later the appellant saw
in a newspaper article a Supreme
Court ruling concerning a certain farmer to the effect that the
respondent was prohibited from levying
additional charges for the
purchase of trucks. He took the cutting of this newspaper article
to the respondents Marondera office.
The respondent, according
to the appellant, told him to continue with his payments for the
additional charges as the Supreme Court
ruling did not apply to him.
This he duly did. He made the final payment on the account in July
1997 in the sum of $60 884,00.
The appellant, subsequent to the
full payment, demanded a refund of the additional loan. The
respondent refused to refund on
the basis that the appellant agreed
to pay the additional charges and was bound by that agreement.
The court a
concluded that the agreement, Exhibit 2, in terms of which the
appellant agreed to pay the additional charges was voidable at the
instance of the appellant. The court a
further concluded that after becoming aware of the Supreme Court
ruling in the Johnsen case, the appellant should have repudiated
agreement within reasonable time. His failure to do so amounted to
ratification of an otherwise voidable agreement. In arriving
this conclusion the learned judge in the court a
The plaintiff was coerced into
consenting to the additional costs by threats of the repossession of
the truck. He made repayments
of the additional costs under the
continuing duress. He then became aware of the Supreme Court
judgment that, in his opinion, did
not authorise the AFC to repossess
the items bought under the World Bank facility. In my view, this is
when became aware of the
deception by the defendant and therefore the
time at which the law obliged him to make an election either to
rescind the contract
or continue to be bound by it. It is not in
dispute that after becoming aware of the deception on him, the
to make repayments under the voidable contract.
His continued repayments were in my view, an election to be bound by
and an abandonment of the right to claim rescission and
restitution. The plaintiff may have nursed an intention to later on
on the voidable contract but the doctrine of quasi-mutual assent
will work against him. Indeed, the plaintiff testified that he
not take any legal action then because he could not afford legal
representation. Not only is this belied by the fact that he
sum of $60 884,68 as a lump sum on 30 July 1999 when his monthly
instalment was a mere $6 500,00 but, it made his election
rescission belated. His election to rescind the consent was
therefore not taken within a reasonable time and this is fatal
was on the plaintiff to prove that he is not bound by his written
consent to the additional costs raised by the defendant for the
purchase of the truck. In my view and on the basis of the
foregoing, the plaintiff has not discharged this onus.
He remains bound by the written consent that he signed.
the plaintiffs claim is dismissed with costs.
As I have already stated the
appellant was dissatisfied with the outcome and now appeals against
the judgment on two grounds.
The two grounds of appeal set out in
the notice of appeal are:
1. The Learned Judge should
have held that the duress exercised by the respondent, which was of a
continuing nature, vitiated any
reality of consent and that in the
circumstances the document extracted by Respondent from Appellant
wherein he consented to the
loan being debited with the additional
amount was a nullity.
2. That the
Learned Judge erred in finding that Appellant was put to an election
when he became aware of the Supreme Court judgment
1995 (1) ZLR 65 since Respondent misrepresented the position to him
and advised him that the judgment had no bearing on his case.
any event, the principle of election would not apply in the case of
duress where the duress is of a continuing nature.
submissions were made in support of the first ground of appeal.
There was no formal withdrawal of that ground of appeal either.
am not surprised that Mr Paul
did not make any submissions in support of this ground. The
evidence in this case simply does not support the allegation that
2 was void ab
and therefore a nullity by reason of duress. Contracts that are
by reason of duress are very rare as the duress required to render an
agreement void ab
has to be extremely severe. It has to be so severe as to negative
any element of voluntariness such as where a stronger person
physically overcomes a weaker person and puts a pen in his hand and
physically forces his hand to write his signature on a written
The evidence adduced by the appellant fell far short of this
requirement. That ground of appeal cannot, therefore, succeed.
ground of appeal is that the learned judge misdirected herself by
holding that the appellant failed to make an election
the agreement within reasonable time and consequently ratified an
agreement that was otherwise voidable. It was argued
appellant that even after the appellant became aware of the case of
threat of repossession still persisted.
I am not
persuaded by this argument. In Johnsens
the Supreme Court concluded that the respondent could not
unilaterally increase the purchase price of an item purchased in
similar to this case. The court also held that the
remedy of summary attachment could not be used in such circumstances.
becoming aware of the Supreme Court ruling in the Johnsen
one would have expected the appellant to have approached the
respondent, as he in fact did, and advised it that it was prohibited
from levying extra charges and from repossessing his truck. The
appellant should have stopped further payments in excess of the
original purchase price. Instead the appellant continued paying his
instalments and the increased levy.
Even if one
were to accept Mr Pauls
submission that the appellant still feared that his truck would be
repossessed, such fear was not reasonable in the light of the
For duress to be a defence it must be reasonable.
The duress, after knowledge of the Supreme Court ruling in
if there ever was such duress, was not reasonable. The second
ground of appeal also fails.
the result the appeal is dismissed with costs.
JA: I agree
JA: I agree
appellant's legal practitioners
Mudimu & Chinogwenya,
respondent's legal practitioners