Tungamirayi Muganhiri v City of Harare

On 31 October 2019, the applicant and respondent entered into an agreement of sale for residential stand number 1098 Strathaven township, Harare, measuring 2000 square metres. The purchase price was $44,620.00 which the applicant paid in full in Zimbabwean dollars. The respondent breached the agreement by failing to give vacant possession of the property to the applicant. It turned out that the property was no longer available when sold to the applicant because there was an earlier sale of the same property to someone else. The respondent admitted the breach of contract.

• What is the appropriate measure of damages for breach of a contract of sale of immovable property?
• Whether damages should be assessed at the date performance was due or at the date of judgment
• Whether the applicant is entitled to compensation in US dollars when payment was made in Zimbabwean dollars
• Whether inflation can be a basis for calculating contractual damages

The application succeeded in part. The respondent was ordered to pay the applicant the sum of ZWL44,620.00 (reimbursement of the purchase price paid). The respondent was ordered to pay costs of suit.

The binding legal principles established are: (1) Damages for breach of contract are assessed at the date performance was due, not at the date of judgment; (2) Inflation is not a basis for calculating contractual damages; (3) The onus to prove actual financial loss rests with the party claiming damages; (4) A party cannot unjustifiably capitalize on a breach by claiming damages in a different currency from that in which payment was made where actual loss is not proven; (5) Where a party fails to prove actual damages suffered, they are entitled only to reimbursement of amounts actually paid.

The court observed that the applicant was "certainly trying to unjustifiably capitalize on the breach by the respondent" by seeking payment in US dollars when payment was made in Zimbabwean dollars and by obtaining valuations two years after the breach rather than at the time performance was due. The court also noted that the respondent was not willing or able to give the applicant any property of a comparable nature to the one initially sold to him.

This case confirms the application of traditional contractual damages principles in Zimbabwean law, particularly that damages are assessed at the date performance was due rather than at the date of judgment. It clarifies that inflation alone is not a basis for calculating contractual damages and that a party cannot capitalize on breach by claiming damages in a different currency from that in which payment was made. The case reinforces that the onus lies on the claimant to prove actual financial loss suffered, and that reimbursement rather than speculative market value damages may be appropriate where actual loss is not properly established.