Dendairy (Private) Limited v Zimbabwe Electricity Transmission and Distribution Company (Private) Limited

The parties had entered into a secure power supply agreement which expired on 31 December 2015. Under this agreement, the appellant was entitled to uninterrupted power supply (save for interruptions due to faults) at a higher tariff of 0.128, sparing it from planned load-shedding. The respondent attempted to renew the agreement and sent the appellant a blank renewal agreement to sign, but the appellant ignored this correspondence. On 30 December 2015, the respondent notified the appellant that the agreement would continue on a month-to-month basis from 1 January 2016 until a new tariff was approved by the regulator (ZERA). The appellant did not object and throughout 2016, the respondent continued to supply electricity at the secured power supply rate of 0.128. The appellant received monthly invoices at the prime rate for secured power supply customers and settled these bills in advance, sometimes paying more than the invoiced amount. In December 2016, the appellant queried the higher rate charged throughout the year and demanded a refund. By letter dated 12 January 2017, the appellant stated it did not wish to sign a new agreement for 2017 and wanted to be on a standard peak and off-peak rate billing system from 1 January 2017. The appellant sued for a refund of $162,280.17 based on unjust enrichment.

• Whether the appellant satisfied the requirements for a claim based on unjust enrichment
• Whether the appellant was impoverished by the payment of the higher tariff
• Whether the respondent's enrichment was unjustified
• Whether the appellant was estopped by its conduct from denying the existence of a secure power supply agreement in 2016

The appeal was dismissed with costs.

A claim for unjust enrichment will fail where the plaintiff has not been impoverished, having received the full benefit of services for which it was charged. Where a party, after being notified that a supply agreement will continue on certain terms, remains silent, fails to object, and proceeds to pay invoices reflecting those terms throughout the period in question (sometimes in advance and in excess of amounts due), that party cannot subsequently claim unjust enrichment or deny the existence of the agreement. The party's conduct constitutes acceptance of the terms and the party is estopped from denying the agreement's existence. To succeed in a claim for unjust enrichment, a claimant must prove: (a) the defendant was enriched; (b) the enrichment was at the expense of the plaintiff who was impoverished; (c) the enrichment was unjustified; and (d) the case does not fall under one of the classical enrichment actions.

The Court observed that the appellant's letter of 12 January 2017, in which it requested to be placed on a standard peak and off-peak rate billing system with effect from 1 January 2017, was a tacit admission that in 2016 it had been a ring-fenced customer. The Court noted the significance of the fact that at the beginning of 2016, the appellant had not taken the trouble to notify the respondent of any objection to the continuation of the secure power supply agreement, in contrast to its clear communication at the beginning of 2017. The Court also noted that it found it unnecessary to consider grounds of appeal 2 and 3 given its conclusion on the primary ground concerning unjust enrichment.

This case is significant in Zimbabwean law for clarifying the application of the doctrine of unjust enrichment in the context of commercial supply agreements. It establishes that a party cannot claim unjust enrichment where it has received and enjoyed the full benefit of services for which it was charged, even if no formal written agreement was signed for the relevant period. The case also reinforces the principle that conduct, including silence in circumstances where objection would be expected, can constitute acceptance of contractual terms and create estoppel. The judgment provides guidance on the interpretation of continuing agreements and the legal consequences of a party's failure to object to proposed terms while continuing to accept performance and pay at the proposed rate. It emphasizes that courts will look to the substance of the parties' conduct and the benefits actually received, rather than allowing parties to retrospectively repudiate arrangements from which they have benefited.