Taruva Taruva v Deven Engineering P/L and Others

The plaintiff was employed by the first defendant as Financial Controller and Company Secretary from 1 July 2006. Under his employment contract, he was entitled to participate in a group motor vehicle scheme. A Mazda 3 motor vehicle was procured and allocated to him. A loan agreement was signed for $5,304,200.00 representing the cost price of the vehicle, with salary deductions to offset the loan. The plaintiff paid off the balance of the loan and resigned on 31 July 2007, taking the motor vehicle with him. On 10 August 2007, he was called to a meeting at the second defendant's offices where he swore an affidavit stating he had sold the motor vehicle to the first defendant and surrendered possession of the vehicle, retaining only the registration book and spare keys. The plaintiff subsequently issued summons seeking to have the affidavit declared null and void on grounds of duress and to have possession of the vehicle restored to him.

• Whether there was a valid and enforceable agreement of sale of the motor vehicle by the plaintiff to the defendant
• Whether the affidavit signed by the plaintiff was null and void by reason of duress and improper authentication and commissioning
• Whether the plaintiff was entitled to the motor vehicle under the Motec Vehicle Scheme
• Whether the parties reached a valid compromise agreement on 10 August 2007 that superseded the original motor vehicle scheme entitlement
• Whether a compromise agreement operates as res judicata in respect of the prior agreement

The plaintiff's claim was dismissed with costs.

A valid compromise agreement between parties operates as res judicata in respect of the original contractual dispute and constitutes a new binding contract that supersedes the prior agreement. Once a compromise is concluded, a party cannot go behind it to raise the original cause of action or rely on rights under the original agreement. A compromise need not follow upon a disputed contractual claim; any kind of doubtful right can be the subject of a compromise, and parties may validly compromise even a spurious claim. The principles of offer and acceptance apply in determining whether a claim has been compromised. Where parties achieve consensus on all relevant contractual requirements and unequivocally intend to settle a dispute through new consensus, this creates a binding compromise that discharges the prior agreement.

The court made observations regarding the drafting of the motor vehicle scheme, advising the defendants that if they wished to disentitle employees who had not served for a requisite number of years, or if they wished to reserve the right to revalue vehicles at the date of disposal, such terms should be clearly spelled out in the motor vehicle scheme document. The court noted that the letter of the scheme as it stood bore little bearing to the defendants' understanding of employee rights and obligations under the scheme. The court also noted that the plaintiff may have entered into the compromise agreement ill-advisedly, possibly due to lack of confidence in his rights or awareness that the defendants held a different interpretation of the governing documents, but this did not affect the validity of the compromise as a binding contract.

This case is significant in Zimbabwean law for its application of the doctrine of compromise and res judicata in contractual disputes. It illustrates that a compromise agreement, once validly concluded, supersedes and discharges prior contractual rights and obligations, and parties cannot subsequently rely on the original cause of action. The judgment emphasizes the principle that even a bad bargain or ill-advised compromise is binding on parties. It also demonstrates the court's approach to assessing credibility of witnesses, particularly where allegations of duress are made, requiring clear and consistent evidence of coercion that broke the will of the party alleging duress.