Zimbabwe Express Services (Private) Limited v Nuanetsi Ranch Private Limited

In May 2003, Nuanetsi Ranch (Pvt) Ltd (respondent), one of Zimbabwe's largest cattle breeders, experienced acute cash flow problems and decided to sell cattle. On 7 May 2003, the respondent entered into a written agreement with Zimbabwe Express Services (Pvt) Ltd (appellant) to sell 400 cattle (200 heifers and 200 steers) at Z$450 per kilogram for heifers and Z$500 per kilogram for steers. The appellant paid a deposit of Z$15 million on 8 May 2003. The balance was payable "on Monday 12 May 2003 or after the animals have been weighed and delivered whichever occurs later." The cattle were not weighed by 12 May 2003, so the balance was not paid. The cattle were weighed at an uncertain date but before 12 June 2003. In June 2003, the respondent advised the appellant it could collect 120 steers equivalent to the deposit paid, and stated that if more cattle were needed, a fresh quotation would be provided. The appellant rejected this and insisted the original contract remained binding. The High Court dismissed the appellant's claim for delivery of 200 heifers and 200 steers, finding the respondent had cancelled the contract by implication.

• Whether the cattle were weighed on 16 May 2003 and the appellant was properly notified
• Whether a contract can be cancelled by implication or conduct
• Whether the respondent validly cancelled the contract
• Whether the appellant was properly placed in mora before cancellation
• Whether the court should grant specific performance in circumstances where it would operate unduly harshly on the defendant and result in unjust enrichment

The appeal was dismissed with costs.

The binding legal principles established are: (1) A contract may be validly cancelled or terminated by conduct where the circumstances clearly and unequivocally evince an intention to terminate, not only by express notice using the word "cancellation"; (2) When a contract does not fix a time for performance, even where time is of the essence, there can be no mora ex re (automatic default), only mora ex persona - the creditor must make a proper demand for performance to place the debtor in mora before the creditor can lawfully cancel for non-performance; (3) Specific performance, though a prima facie right of a party to a binding agreement, remains within the court's discretion and will be refused where it would produce an unjust result, operate unduly harshly on the defendant, or result in unjust enrichment of the plaintiff; (4) The discretion to refuse specific performance is judicial in nature and must be exercised on proper principles aimed at preventing injustice, not capriciously.

The Court made obiter observations that: (1) The view expressed in some earlier cases that no demand is necessary to place a debtor in mora when no time for performance was stipulated but immediate performance was contemplated does not correctly reflect the current state of the law; (2) If a defaulting party can repudiate a contract by words or conduct, the aggrieved party should similarly be able to terminate the contract by conduct; (3) The Court took judicial notice of Zimbabwe's inflationary problems during the relevant period, including currency redenominations, noting that prices agreed in 2003 would have been "trifling" by 2005; (4) There was an unsubstantiated suggestion by the respondent that it no longer had steers of the age and weight required by the appellant, though this was not relied upon as a basis for the decision.

This case is significant in Zimbabwean contract law (applicable to South African jurisprudence due to shared Roman-Dutch law heritage) for several reasons: (1) It confirms that contracts can be cancelled or terminated by conduct, not only by express notice, provided the conduct clearly and unequivocally evinces the intention to terminate; (2) It reaffirms the principle that when no time for performance is fixed in a contract, even when time is of the essence, the creditor must place the debtor in mora through proper demand before cancelling for non-performance; (3) It illustrates the court's discretion to refuse specific performance even where a valid, subsisting contract exists, particularly where granting such relief would result in unjust enrichment or operate unduly harshly on the defendant; (4) It demonstrates how extraordinary economic circumstances (hyperinflation) can affect the equitable exercise of judicial discretion in contract remedies.