Yusuf Abdulla Gaibie and Mahmoud Mai Abdulla Gaibie v Alexander Paulo Castanheira and Rachel Salu Castanheira

On 25 January 2006, the plaintiffs (sellers) and defendants (buyers) entered into an agreement of sale for immovable property for Z$11.5 billion. The purchase price was pegged to the US dollar midrate at the time. The agreement required payment of Z$10 billion into the sellers' nominated account, Z$1.5 billion upon occupation, and Z$2.3 billion for Capital Gains Tax to be held by conveyancers. An addendum signed on 16 February 2006 extended the payment deadline to 28 February 2006 and provided for punitive interest of 800% for late payment. The defendants paid Z$9.2 billion to the first plaintiff's account, Z$2.3 billion for Capital Gains Tax to Joel Pincus, Konson and Wolhuter (legal practitioners), and Z$54,208,844 in interest. The plaintiffs claimed the defendants breached the contract by failing to pay the full purchase price and sought cancellation of the agreement. The defendants denied breach and asserted full payment. At the close of the plaintiffs' case, the defendants applied for absolution from the instance.

• Whether the defendants were in breach of the agreement of sale
• Whether the plaintiffs established a prima facie case of breach of contract at the close of their case
• Whether the plaintiffs' cancellation of the agreement was valid under the Contractual Penalties Act
• Whether there was sufficient evidence upon which a court could reasonably find in favour of the plaintiffs
• Application of the contra proferentem rule where the agreement was drafted by the plaintiff

Absolution from the instance was granted in favour of the defendants. The plaintiffs were ordered to pay costs of suit.

At the close of a plaintiff's case, absolution from the instance will be granted where the plaintiff has failed to adduce sufficient evidence to establish an essential element of the claim, such that no court directing its mind reasonably to the evidence could or might find in favour of the plaintiff. A party who is in breach of contract cannot rely on the other party's alleged breach that was caused or made impossible by their own breach. A party cannot be permitted to benefit from their own wrongdoing - where a seller has received full market value for property and their own breach prevented proper performance, they cannot cancel the contract and retain both the purchase price and the property. The contra proferentem rule requires that ambiguities in a contract be resolved against the party who drafted it (the proferens).

The court observed that the first plaintiff's evidence, where he merely confirmed wholesale the evidence of the second plaintiff without independent recollection, was of little probative value. Corroboration can only be supplied by independent evidence from a witness giving independent recollections. The court noted the first plaintiff's emotional display in court, weeping and asking for a "good judgment," appeared exaggerated. The court commented that by choosing to extend time limits and signing an addendum providing expressly for penalties for late payment without reserving the right to cancel, the plaintiffs exercised an election to remain in the agreement and receive full market value. The court noted the plaintiffs were attempting to "have his cake and eat it at the same time."

This case reinforces important principles in Zimbabwean contract law and civil procedure: (1) The test for absolution from the instance requires that there be evidence upon which a court, directing its mind reasonably, could or might find for the plaintiff; (2) A party cannot benefit from their own breach of contract; (3) Where a party receives full market value for property and then seeks its return, courts will not permit unjust enrichment; (4) The contra proferentem rule applies against the party who drafted an ambiguous agreement; (5) Material contradictions between pleadings and oral evidence can be fatal to a plaintiff's case; (6) Where parties agree to penalties for late payment rather than cancellation rights, this constitutes an election to remain in the contract. The case demonstrates the high evidential burden on plaintiffs and the importance of consistency between pleadings and evidence.