MUNICIPALITY OF BULAWAYO v ZIMBABWE FOOTBALL ASSOCIATION 1989 (3) ZLR 261 (S)

Flynote

Contract — variation in terms of — acceptance by conduct — breach of contract — remedies therefor set out in contract — party alleging breach not applying such remedies — contract still subsisting. Costs — deprivation of award of to successful party — when court may so order — judge's discretion — when may be interfered with on appeal.

Headnote

In E 1982, the parties entered into a written agreement in terms of which the appellant granted to the respondent the use of the three major stadia in Bulawayo, as well as that of other municipal playing fields. The respondent was to pay to the appellant 15% of the gross gate receipts of every football match played in the stadia. The agreement was extended from year to year until 1986, when the appellant informed the respondent that the tariff would be raised to 20%. Although the respondent denied receiving the letter containing this information, throughout the following season and part of the next it paid 20% of the gross takings to the appellant. The money was taken in cash after each game. No remedial action was taken by the respondent to prevent these deductions.

In G 1988, the respondent refused to pay the 20% it had previously been paying and insisted that it should pay not more than 15%. The appellant thereupon closed its stadia and refused the respondent access to them. The respondent sought and obtained an interdict restraining the appellant from preventing access to three stadia until the end of the 1988 football season. The judge a quo, however, refused to award costs to the respondent, on the grounds that both parties had taken the law into their own hands, one by refusing unilaterally to honour its contractual obligations and the other by unlawfully closing its stadia. The appellant appealed against the grant of the interdict and the respondent cross-appealed against the refusal to award costs.

The original agreement provided that, in the event of a breach thereof, the Municipality could elect either to enforce the contract or to cancel the agreement, without prejudice to its right to recover damages. It alsoconferred on the respondent the right to terminate the agreement by giving one calendar month's notice if it was unable to perform its obligations under the contract.

Held, that although the respondent never expressly agreed to the variation in the terms of the original contract, through its conduct it acquiesced in the increased tariff and could thereby be held to have accepted the new terms. The respondent's failure to continue paying 20% of the gross takings amounted to a breach of the contract.

Held, further, that where contracting parties reduce their agreement into writing, they are presumed to have intended what is stated in the written agreement. The contract gave the appellant two options in the event of a breach of the contract by the respondent, but it exercised neither of them. Instead, it suspended performance of the agreement, a course which did not amount to cancellation of the agreement and which was not provided for in the agreement. Consequently, the agreement between the parties subsisted and the respondent was entitled to an interdict restraining the appellant from denying the respondent access to the stadia.

Held, further, that while the general rule is that the successful party should normally be awarded its costs, the court may, in the exercise of its discretion, deprive a successful party of its costs. However, the court's discretion is not unlimited: it is a judicial one and must be so exercised as not to violate the fundamental rules governing the award of costs. If the exercise of the discretion has been influenced by considerations that cannot lawfully be taken into account or by the disregard of relevant considerations, an appeal court will normally hold that the discretion has not been validly exercised. In this case, the trial court misdirected itself by taking into account what had occasioned the conflict, whereas the immediate and only cause of action was not the respondent's failure to pay the extra 5% but the appellant's failure to exercise the remedies provided in the agreement. Costs should therefore have been awarded to the respondent.