The parties entered into a written instalment sale agreement on 14 January 2016 for the purchase of Stand 13766 Norton Township of Galloway. The purchase price was US$30,750, payable by way of a US$12,000 deposit and monthly instalments of US$312.50 over 60 months. The applicant fell into arrears totalling US$15,625 as at 9 June 2020. The respondent issued a notice to remedy breach dated 9 June 2020 in terms of section 8(1) of the Contractual Penalties Act, giving the applicant 30 days to pay the arrears. On 8 July 2020, the applicant deposited RTGS$15,625 into the respondent's account. The respondent rejected this payment and by letter dated 27 August 2020 purported to cancel the agreement. The respondent later claimed the agreement had already been cancelled in January 2018 following a notice dated 15 December 2017, which the applicant denied receiving. The applicant sought a declaratory order that the cancellation was null and void and that the respondent should accept payment in local currency.
1. It was declared that the agreement of sale dated 14 January 2016 between the applicant and respondent relating to Stand 13766 Norton Township of Galloway remains valid and binding on both parties. 2. The claim for an order that the respondent should accept payment of ZWL$15,625 and subsequent payments in local currency was dismissed. 3. The respondent was ordered to pay costs of the application on the ordinary scale.
1. Where an agreement requires notice of breach to be given but does not specify the manner of service, the offending party must actually be advised of the breach for the notice to be valid. 2. Proof of posting by registered mail, without confirmation of delivery or receipt, is insufficient to establish valid service of a notice to remedy breach on a balance of probabilities. 3. An invalid notice to remedy breach cannot ground a valid cancellation of an instalment sale agreement. 4. Section 8(1) of the Contractual Penalties Act requires valid notice before terminating an instalment sale contract for land.
The court made observations regarding currency issues, noting that while the agreement provided for payment in US dollars, the question of what amount in another currency would equal the US dollar amount due required full argument and ventilation. The court suggested the parties should either agree on this issue or seek subsequent court intervention. The court also noted in obiter that punitive costs at attorney and client scale should only be ordered when necessary to inflict financial pain to deter wholly unacceptable behaviour and instil respect for the court and its processes, citing with approval Tilsit and Sationeses (Pvt) Ltd v Donie Control Corp (Pvt) Ltd HB 252/20.
This case illustrates the strict requirements for valid service of notices to remedy breach in instalment sale agreements governed by the Contractual Penalties Act. It emphasizes that when notice is required under a contract, the party giving notice must prove actual delivery or receipt, not merely that notice was dispatched. The judgment also demonstrates judicial reluctance to interfere with contractual currency provisions without full argument, particularly in the context of Zimbabwe's currency volatility. The case provides guidance on when punitive costs are appropriate, confirming they should only be awarded for wholly unacceptable behaviour requiring financial deterrence.