Astra Steel & Engineering Supplies (Pvt) Ltd v P M Manufacturing (Pvt) Ltd

In March 2008, the plaintiff and defendant concluded an agreement whereby the plaintiff paid Z$2,750,000,000,000 for 2,200 x 195R14 brand new tyres to be delivered by 2 March 2008. Only 200 tyres were delivered, leaving a balance of 2,000 tyres. The current market value was pegged at US$100 per tyre. The defendant averred that the plaintiff requested it to source tyres from Solution Motors (Pvt) Ltd, with whom the defendant had previously dealt. The defendant paid Solution Motors Z$1,895,500,000,000 for the tyres. Solution Motors only delivered 200 tyres. The plaintiff's witness testified that the defendant never disclosed the third-party supplier's identity when the agreement (Exhibit 1) was concluded, and the plaintiff only learned of Solution Motors' involvement in June 2008. The defendant subsequently sued Solution Motors for non-delivery. At the close of the plaintiff's case, the defendant applied for absolution from the instance.

• Whether there was sufficient evidence upon which a reasonable person might find for the plaintiff to withstand an application for absolution from the instance
• Whether there was privity of contract between the plaintiff and Solution Motors
• Whether the defendant was a mere intermediary or a party to the contract with the plaintiff
• Whether a stipulatio alteri (contract for the benefit of a third party) existed
• Whether novation of the contract had occurred

The application for absolution from the instance was dismissed. Costs were ordered to be in the cause. The parties were directed to mutually agree, in consultation with the registrar, on a convenient date for continuation of the trial.

The binding legal principle is that an application for absolution from the instance will be dismissed if, at the close of the plaintiff's case, there is evidence upon which a court, directing its mind reasonably to such evidence, could or might (not should or ought to) find for the plaintiff. Where a plaintiff has made some case for the defendant to answer and the defence involves matters peculiarly within the defendant's knowledge, justice demands that the defendant be heard. In cases of doubt as to what the judgment of a reasonable man might be, the safest course is to allow the case to proceed. For a stipulatio alteri to be established, there must be evidence that the stipulator and promiser intended to create a right for the third party and that the third party manifestly accepted the benefit.

The court observed the salutary caution from Supreme Service Station (1969) (Pvt) Ltd v Fox & Goodridge (Pvt) Ltd 1971(1) RLR I(A) that judges should be very loath to decide upon questions of fact without having all the evidence on both sides. The court noted that the plaintiff's acceptance of delivery of 200 tyres could at best be termed a mere arrangement of convenience and could not amount to acceptance of benefit for purposes of proving stipulatio alteri. The court also commented that novation cannot be a one-sided affair. Additionally, the court observed that if there were a stipulatio alteri or novation, the plaintiff should have sued Solution Motors in its own right rather than the defendant.

This case is significant in Zimbabwean jurisprudence (relevant to South African law due to shared legal principles) for its application of the absolution from the instance test in commercial contract disputes. It clarifies the evidentiary threshold required at the close of the plaintiff's case and demonstrates the court's reluctance to decide factual questions without hearing all evidence from both sides, particularly where defences involve matters peculiarly within the defendant's knowledge. The judgment also addresses important principles regarding privity of contract, stipulatio alteri (contracts for the benefit of third parties), and novation in commercial transactions.