The applicant is a registered owner of Stand No.671
Borrowdale Township of Subdivision 4 of Lot D of Borrowdale Estate. The
applicant entered into an Agreement of Sale of the property with the first and
second respondents, who are husband and wife, on 30 May 2001. The applicant
later purported to cancel that Agreement alleging that the purchasers had not
paid the purchase price in time.
After the purported cancellation, the applicant entered
into another Agreement of Sale with the fourth respondent, for the same
property, on 25 July 2001. The fourth respondent made payments in cash and by
cheques.
On or about 24 August 2001, the first and second
respondents filed an urgent chamber application under case no. HC8068/01 for an
order restraining the applicant from transferring the property to anyone. A
provisional order was granted on 28 August 2001. That provisional order was
subsequently confirmed on 20 February 2002 in default of the applicant. Upon
learning of the confirmation, the applicant successfully applied for the
rescission of the default judgment under case no. HC1924/02. The applicant
subsequently filed his opposing papers on 6 November 2002. In the interim, the
fourth respondent, who had not been part to the initial proceedings in
HC8068/01, successfully applied for joinder under case no. HC10464/02. He
subsequently filed his opposing papers on 26 November 2002.
The first and second respondents did not take their case
in HC8068/01 any further. They did not file answering affidavits and also did
not file heads of arguments.
The fourth respondent filed his heads of arguments and
proceeded to set down the matter for hearing in July 2006. The applicant did
not file his heads of argument. He argued that he was not served with the
fourth respondent's heads of argument. He had been waiting for the first and
second respondents, as the applicants in the main case, to file their answering
affidavits and heads of arguments. Upon realizing that the two were not
complying with the Rules he unsuccessfully applied for the dismissal of their
application for want of prosecution under case no. HC2619/06.
By virtue of the delay in filing his heads of argument
after the fourth respondent had filed his heads the applicant was barred. It is
in this respect that at the start of the hearing counsel present addressed the
court on the issue.
The applicant's explanation for not filing heads of
argument in time was plausible and as there had been no proof that the fourth
respondent's heads of argument had been served on the applicant as the first
respondent in the main case. On the 15 October 2009, I ruled in favor of the
applicant.
As regards the first and second respondents' position,
both counsel for the applicant and the fourth respondent were agreed that the
first and second respondents remained barred as they had not even seen it fit
to make a formal application for upliftment of the bar. The result was that the
provisional order they had obtained in HC8068/01 was discharged with costs.
The issue for determination remained as between the
applicant and the fourth respondent. This judgment is essentially on the
counter- application filed by the fourth respondent against the applicant
(first respondent in the main case HC8068/01).
In the counter-claim, the fourth respondent sought an
order compelling the applicant to transfer the property in question to him.
The applicant opposed the counter- application
principally on the basis that the fourth respondent did not discharge his
contractual obligations in full. He contended that a payment in the form of a
cheque made to Intermarket Building Society (formerly Founders Building Society)
in the sum of $2,697,236=53 was dishonored….,.
The applicant's case was to the effect that the fourth
respondent issued him cheques payable to his creditors. The cheque payments
were meant to exhaust the applicant's debt. He received the balance in cash
from the fourth respondent. The cheques issued by the fourth respondent were
dishonored when presented for payment by the applicant's creditors resulting in
one of the creditors, Founders Building Society, foreclosing on the property.
When the property was advertised for sale by the Deputy Sheriff he managed to
pay off the debt thus saving the property from being sold by auction. The
fourth respondent did not replace the dishonored cheques. To confirm the above,
he tendered a bank statement in the name of his company, Fairview Construction
Pvt. Ltd., as annexure B.
Though the applicant, in his papers, referred to
'cheques' as having been dishonored by his creditors, he seemed to, in fact, be
referring to only one cheque in the sum of $2,697,236=53 which was made in
favor of Founders Building Society. His papers did not reveal any other cheque
that was dishonored.
The fourth respondent contended that he paid the purchase
price in full. He denied that the cheque in question was dishonored. He
contended that the cheque he issued, in the sum of $2,697,236=53 was, in fact,
met. To buttress his contention, the fourth respondent indicated that a careful
examination of the applicant's bank statement, submitted as annexure 'B' to the
applicant's opposing affidavit, shows that the sum in question appears five (5)
times in the applicant's bank statement. The sum appears as payment (credit)
into Fairview Construction (Pvt) Ltd's account three times. It also appears as
a deduction (debit) into the said account two (2) times. The net effect, he
contended, is that the sum of $2,697,236=53 from him was credited into Fairview
Construction (Pvt) Ltd's bank account. The fourth respondent attached his own
bank statement showing that cheque No.59, in the sum of $2,697,236=53, was
presented to his bankers on 15 December 2001 and was duly met as there were
sufficient funds in the account.
A careful analysis of the entries in the two parties'
bank statements tends to favor the fourth respondent's version. The applicant's
bank statement, in the name Fairview Construction (Pvt) Ltd, shows the
following entries as from 14 November 2001 to 31 December 2001:-
Type
Date Stat-ref txn Value Actual balance
14 November 2001
-5,086,922.06
Cheque deposit 29/11/2001 N/A 2,697,236.53 -2,389,685.53
Int. debit
30/11/2001
-150,411.10 -2,540,096.63
Cheque deposit 06/12/2001 N/A 2,
697,236. 53 157,139.90
Function chg 10/12/201 returned cheque -1,000.00 156,139.90
Chq Dishnr
10/12/2001 Deposited cheque dis
-2,697,236.53 -2,541,096.63
Cheque deposit 13/12/2001 N/A
2,697,236.53 156,139.90
Function chg 14/12/2001 returned cheque -1,000.00 155,139.90
Chq Dishnr 14/12/2001 Deposited cheque Dis -2,697,236.53 -2,542,096.63
Flat Charg 31/12/2001 Annual mortgage serv -500.00 -2,542,596.63
It is clear from the above that there were 3 credits and
2 debits involving a cheque for the sum of $2,697,236=53….,.
The fourth respondent's bank account, on the other hand,
shows only one entry wherein the sum of $2,697,236=53 was debited in the form
of cheque no.59. This was on the 15th December with the value date
of 14 December 2001. There are no entries showing that that cheque was
dishonored. That statement was attached as annexure 'A' to the fourth
respondent's answering affidavit.
Apart from this cheque, there is no other cheque that the
applicant pointed out as having been dishonored. Since from the documents
tendered, including the applicant's own bank statement, a credit payment
remained in favor of the applicant it cannot be said the fourth respondent did
not make that payment. The applicant could not tender the 'referred to drawer'
cheque or anything to contradict the entry in the fourth respondent's bank
account showing that the cheque in question was, in fact, met on presentation -
albeit after some query by the applicant's bankers.
The applicant contended that he cancelled the Agreement
of Sale in 2003 due to the perceived breach and the fourth respondent did
nothing about it. Unfortunately, his papers did not confirm this. The letter by
his legal practitioners, dated 22 October 2003, purporting to cancel the Agreement
of Sale was swiftly responded to by the fourth respondent's legal practitioners
in their letter of the 28th October 2003 in which the respondent
denied being in breach and denied that any of his cheques was referred to
drawer. That letter was followed by another letter dated 5 November 2003 in
which the respondent's legal practitioners pointed out that the respondent had
furnished them with clear proof that his cheque was met upon presentation to
the bank. These letters by the respondent's legal practitioners were apparently
not rebutted by the applicant and neither did he address this aspect in his
affidavit and submissions in court.
I am therefore of the view that the cheque for $2,697,236=53
was, in fact, honored….,.
On his part, the fourth respondent argued that the amount
he was to pay to Founders Building Society was not going to extinguish the
applicant's indebtedness which he understood to have been around $5,701,236=53.
The cheque that the applicant said was dishonored was not going to liquidate
that debt. Instead, the parties had agreed that the respondent would obtain a
mortgage bond from Beverly Building Society to pay off the balance. Beverly
Building Society duly granted the respondent a legal undertaking to pay the
balance upon transfer. When the applicant was not forthcoming with the transfer
the fourth respondent said he went ahead and paid part of the balance of the
purchase price to Mr. Mwayera himself in addition to other creditors. The applicant
received the payments and up to date has not denied receiving these payments.
To confirm this he tabulated the payments he made vis-à-vis the purchase price
as follows:-
Purchase price…………………………………….. ……………………,. $6,300,000=
Payment to Founders……………………,. $2,697,236=53
Payment to ZIMBANK……………………,.$1, 034,632=18
Payment to Chibanguza Group of
Hotels (for caveat removal) …………….,. $1,500,000=
Payment to Mwayera…………………(1) $ 850,000=
(2) $ 500,000=
(3) $ 450,000=
Differential…………………………………………………………………,. $ 731,958=71
$7,031,958=71 $7,031,958=71
The three payments of $850,000=, $500,000= and $450,000=
were made directly to the applicant as part of the purchase price and the
substantial part was to go towards the unfinished works on the house of which
the applicant had said he would handle the completion of the house himself.
The applicant's contention that the respondent did not
fulfill his obligation is also defeated by his own affidavit which he deposed to
in opposition to the first and second respondents application in HC8068/01.
That affidavit was deposed to on 6 November 2002 - almost a year after the
fourth respondent had made the cheque payment in question and had not been
advised that the cheque had been dishonored. To quote in extensor from
paragraph 6.3 of his opposing affidavit -
“6.3 I proceeded to sell the property to a second
purchaser, namely, Gilbert Jonga, with the knowledge and clear understanding
that the sale to the Applicants had been cancelled and was invalid. The sale of
the property to Gilbert Jonga still stands and my conveyancers are attending to
the transfer. Furthermore, the second purchaser has since paid a total sum of
$6,735,868=69 in and under his sale agreement with me. I enclose as Annexure
'B' being a copy of my conveyancers' letter to the second purchaser. The
latter's sale agreement is attached as Annexures 'C1' to 'C6'. In addition,
Gilbert Jonga paid a sum of $1,800,000= directly to me so that I could finish
off building the property.”
And in paragraph 10 thereof that -
“The second purchaser, as per Annexure 'B', has paid a
total sum of$6,735,868=69 to Founders Building Society and Zimbabwe Banking
Corporation Limited being arrears outstanding on the two mortgages registered
over the property. A transfer to the Applicants will mean that the two
financial institutions mentioned will move in to sell the property as Gilbert
Jonga guarantees to them will fall away. I point out that the payments made to
them were conditional upon transfer being registered in favour of Gilbert Jonga,
the second purchaser, who retains a right to claim a refund if transfer is not
made to him.”
Further on that:-
“The second purchaser is an innocent party who would be
unduly prejudiced if specific performance were to be ordered. Most importantly,
if the second purchaser's guarantees and conditional offers of payment to my
creditors were to fall away, the property would most certainly be sold in
execution by my creditors who retain the right to do so until they are fully
paid.”
In paragraph 14 thereof, he went on to confirm the fact
that the $2,697,236=53 cheque was not to extinguish the debt but the fourth
respondent was to obtain a bond to pay the balance of the debt when he said
that:-
“I attach as Annexure “G” a letter from Byron Venturas
and Partners to Honey and Blanckenberg which confirms that the second purchaser
paid a total sum of $2,697,236=53 and provided a guarantee for the sum of $3,004,000=
to meet Founders Building Society's cancellation requirements. I refer to the
last paragraph of that letter from which it will appear clearly that my
conveyancers specifically requested Founders Building Society to hold the money
in trust pending cancellation of the bond and to enable the second purchaser to
apply for a refund should the property not be registered in his name. I also
attach as Annexures “H” and “I” letters dated 6 December 2001 and 17 October
2002 from Byron Venturas and Partners to Gill, Godlonton and Gerrans the first
of which enclosed a cheque of $1,034,632=16 paid by the second purchaser
conditionally to Zimbabwe Banking Corporation Limited to meet their
cancellation requirements. The second letter confirms that the cancellation
costs were paid by Gilbert Jonga on my behalf. This letter points out that the
cancellation of the bond can only be effected upon transfer to Gilbert Jonga…,.”
The import of the above is that as of the date of the
affidavit the applicant confirmed that the fourth respondent's guarantees and
conditional offer to pay were dependent on the transfer taking place - only
then will his creditors be paid in full. When transfer did not take place,
despite giving instructions to his conveyancers, the applicant seemed to have
opted to use that as an excuse to resile from the Agreement. Unfortunately for
him, the fourth respondent made payments which he acknowledged and whose total
sum exceeded the purchase price. The applicant also acknowledged that part of
the money paid directly to him was for him to continue with the construction of
the property.
The applicant, having acknowledged receipt of the sums in
question, can surely not be allowed to resile from the Agreement of Sale at his
own whim.
I am inclined to conclude that the fourth respondent
fulfilled his obligation and is thus entitled to obtain transfer of the
property in question. Accordingly, it is hereby ordered that:-
1. The counter application be and is hereby granted.
2. The applicant, Mr. Fanuel Mwayera, be and is hereby
directed to sign all documents necessary to effect transfer of a certain piece
of immovable property, being subdivision 4 of Lot D of Stand 671 Borrowdale
Township, Borrowdale, measuring 5427 square metres held under Deed of Transfer
Number 1814/96 to the fourth respondent, Gilbert Jonga, within 5 days of the
date of the service of this order on him.
3. Should Fanuel Mwayera fail to comply with the terms of
paragraph 2 above, the Deputy Sheriff be and is hereby authorized, directed,
and empowered to sign all the necessary transfer documents in his stead.
4. Applicant, Fanuel Mwayera, shall bear the
costs of the counter application.
