ADLER v ELLIOT 1988 (2) ZLR 283 (SC)

Flynote

Contract — performance of — intention of parties — when contract may be fulfilled by performance of an equivalent act.

Practice and procedure — pleadings — admission in — meaning of — withdrawal of admission — requirements for — exceptions — claim dismissed because successful exception taken — impropriety of where affected party could allege further facts which would disclose a cause of action.

Headnote

The appellant and respondent entered into a verbal agreement of sale in which the respondent sold an immovable property to the appellant. It was agreed that part of the purchase price would be paid outside Zimbabwe, in foreign currency. That portion of the price was duly paid but later returned, the respondent indicating that he wished to cancel the contract. The appellant demanded specific performance of the contract, and tendered the full price in Zimbabwe currency.

In answer to a request for further particulars, the appellant averred that the foreign currency was lawfully held by him outside Zimbabwe, but, possibly per incuriam, replied "No" to the respondent's question: was the foreign currency acquired by the appellant otherwise than by way of the proceeds of any trade, business or other gainful occupation or activity carried on by him in Zimbabwe? Such an answer effectively amounted to a statement that the currency was acquired by way of the proceeds of business carried on in Zimbabwe, in which case the use of the currency would, without the permission of the Minister, have been a contravention of the Exchange Control Regulations.

The respondent excepted to the appellant's declaration on two grounds: (a) that the agreement of sale was illegal and unenforceable, being in contravention of the Exchange Control regulations; and (b) that the appellant's tender of performance was not in terms of the contract.

The appellant sought to amend his answer to the question about the source of the foreign currency to "Yes"; his application was refused by the judge a quo, who also upheld the respondent's exception. The appellant appealed, arguing that the amendment did not involve the withdrawal of an admission and that the case should not have been dismissed on an exception.

Held, that the judge erred in allowing the exception on the first ground raised by the respondent, because it was not shown that the Minister's authority was not granted for the use of the foreign currency.

Held, further, that it is not only an express admission of an averment made by the other party to a suit which constitutes a judicial admission. While that is almost invariably the way in which admissions in pleadings are made, the test is whether the alleged fact has the effect of being a confessionary pleading, in that it is thereafter to be taken for granted and may not be disapproved.

Held, further, that an amendment which involves the withdrawal of an admission is not a right simply there for the asking; it is an indulgence, and the court will require a reasonable explanation both of the circumstances in which the admission came to be made and why the pleader seeks to resile from it. The court must be satisfied that the amendment is bona fide and that, if allowed, it will not cause prejudice or injustice to the other party to the extent that a special order for costs will not compensate him.

Held, further, that while it is not for the court to remake a contract for the parties, the court is not precluded from determining whether the parties intended that a particular term was to be fulfilled in the exact manner agreed upon or by some equivalent act. If the agreement is in writing, this may be obvious from the agreement itself; otherwise the intention may be ascertained from all the circumstances. Four other factors must be considered:

• (a) if the circumstances give no clue as to the parties' intention, there is a rebuttable presumption in favour of exact performance, which becomes irrebuttable if the contract makes it clear that specific performance is intended;

• (b) in cases of doubt, equivalent performance will be sufficient if the manner of performance is immaterial or where exact performance is impossible through no serious fault on the promisor's part;

• (c) the equivalent act tendered must actually be equivalent or of a nature that can make no material difference to the promisee;

• (d) where the promisor can rebut the presumption in favour of exact performance, the court may be justified in finding that the promisor's performance amounts to substantial performance.

Held, further, that it was not possible to determine from the pleadings alone what the intention of the parties was.

Held, further, that a claim should not be dismissed on an exception where it is possible that the affected party may be able to allege further facts that would disclose a cause of action.