J & P Security (Private) Limited v Riozim Limited

The appellant and respondent entered into an agreement on 10 April 2013 for the provision of security services at respondent's Empress Nickel Refinery in Kadoma, to run for one year from 1 March 2013 to 28 February 2014. The appellant duly performed its obligations and sent monthly invoices, but the respondent failed to pay according to contractual terms. After warning the respondent, the appellant terminated services at the end of July 2013 due to non-payment. The appellant then sued for US$58,511.00 for services rendered (which was resolved before trial) and US$91,000.00 as contractual damages for loss of potential income for the unexpired 7-month period of the contract. The Magistrate's Court dismissed the claim for damages with no order as to costs, finding breach but refusing to award damages.

• Whether the respondent's failure to pay constituted repudiation or breach of contract
• Whether the appellant was entitled to damages for loss of profits for the unexpired period of the contract
• What constitutes proper proof of damages in cases of premature contract termination
• Whether net profit or gross revenue should be awarded as damages
• Whether the duty to mitigate damages requires deduction of savings and alternative earnings
• Whether costs should follow the cause where breach is established

1. The appeal is allowed with costs. 2. The judgment of the court a quo is set aside. 3. The matter is remitted to the trial Magistrate for adducing of further evidence on the proper quantum of damages.

1. Mere failure to perform a contractual obligation due to financial difficulties does not constitute repudiation where the party demonstrates willingness to remedy the situation and does not evince an intention to no longer be bound by the contract. 2. Where a party claims damages for loss of profits due to premature termination of a contract, they must prove their net loss, not gross revenue. 3. Damages must be calculated after deducting expenses saved as a result of the premature termination and amounts earned from alternative work undertaken to mitigate losses. 4. The burden of proving the quantum of damages, including details of savings made and alternative earnings, lies with the party claiming damages. 5. A court's discretion on costs must be exercised judicially based on pleaded and substantiated matters, not on unpleaded defences such as financial hardship.

The court observed that damages are claimable for two forms of loss: damnum emergens (actual damages or loss actually incurred) and lucrum cessans (prospective damages or loss of profits). The court noted that prospective damages for loss of profit are recoverable if such loss was foreseen or foreseeable by the parties, and must flow naturally from the breach. The court commented on the general principle that costs should follow the cause, and that departure from this principle should only occur on properly substantiated grounds rather than general assertions about economic conditions or the nature of the claim.

This case is significant in Zimbabwean contract law for clarifying the distinction between repudiation and breach of contract, and for establishing the proper approach to calculating damages for premature termination of service contracts. It reinforces the principle that claimants must prove net loss rather than gross revenue when claiming prospective damages, and must account for both expenses saved and alternative income earned in mitigation. The case provides important guidance on the application of the duty to mitigate damages in the context of security service contracts and similar ongoing service agreements.