MATHONSI J: The second respondent is a land developer who was
allocated vacant stands in the high density suburb of Cowdray Park by the
fourth respondent for purposes of constructing houses for home seekers in
Bulawayo. The terms of the agreement
between the second and fourth respondents are not the subject of this
application.
The
second respondent entered into an agreement with the first respondent sometime
in 1999 in terms of which the second respondent allocated stand 6711 Cowdray
Park, Bulawayo to the first respondent and agreed to construct a two roomed
house on the stand subject to certain terms and conditions. The relevant terms of that agreement as set
out in fourth respondent's pleadings in case number HC 2367/05 were that the
first respondent would pay a deposit towards the purchase of the stand. He would pay the balance of the purchase
price and the costs of construction of the house in due course.
In
return, the second respondent would construct the house for the first
respondent. In order to facilitate the
funding of the construction project, the second respondent arranged to transfer
the stand to the first respondent to pave the way for the registration of a
mortgage bond in favour of Founders Building Society, the financier which had
agreed to fund the construction work.
This
was done by deed of transfer number 4570/99 in favour of the first respondent
and mortgage bond number 5210/99 for $60725.00 in Zimbabwean currency. The second respondent has alleged that the
first respondent failed to honour his part of the bargain and did not pay
anything towards the purchase price of the stand and the cost of
construction. He did not even take up
the loan facility which had been made available to him by Founders Building
Society resulting in the mortgage bond being cancelled on 5 October 2006.
The
second respondent withdrew the stand from first respondent and offered it to
the applicant who immediately paid for it and secured funding from Beverley
Building Society in the sum of $184000-00 for the cost of construction. To facilitate registration of the mortgage
bond, the stand was transferred to the applicant by deed of transfer number
1272/2002 on which mortgage bond number 6969/2004 was registered in favour of
Beverley Building Society. At that time
first respondent had disappeared.
It
would appear that there was an error at the Deeds Registry in that deed of transfer
number 1272/2002 was registered without cancellation of deed of transfer number
4570/99 in first respondent's favour. Be
that as it may, the applicant obtained funds from the bank which were used to
construct a three roomed house by the second respondent as opposed to the two
roomed house which the first respondent had negotiated.
Attempts
to cancel the first transfer to the first respondent did not succeed. Instead third respondent purported to cancel
the second transfer in favour of the applicant by letter dated 13 December 2004
addressed to second respondent, which reads in part as follows:
“RE:
STAND 6711 COWDRAY PARK TOWNSHIP OF COWDRAY PARK OF THE HELENVALE BLOCK.
This serves to confirm that
the above stand was first titled on 15 September 1999 under deed of transfer
number 4570/1999. On 23rd May
2002 in error Deed of Transfer number 1272/2002 was registered in the name of
Sehlukene Sibanda. This deed should be
cancelled as its registration was done in error. Such an error is sincerely regretted.
The true registered owner of
the above stand therefore Sifiso Somfula Thebe.
Yours sincerely
(Signed)
F. Maphosa (Mrs)
REGISTRAR OF DEEDS, BULAWAYO.”
Section 8(1) of
the Deeds Registries Act, [Chapter 20:05] provides:
“Save as is otherwise provided
in this Act or in any other enactment, no registered deed of grant, deed of
transfer, certificate of title or other deed conferring or conveying title to
land, or any real right in land other than a mortgage bond, and no cession of
any registered bond not made, as security, shall be cancelled by a registrar
except upon an order of court.”
In
my view, while there was an error in the registration of the deed of transfer
in favour of the applicant, regard being had to the fact that the same property
had already been registered in the name of the first respondent, the third
respondent however did not have authority to cancel that deed which could only
be cancelled upon an order of court.
The
purported cancellation is therefore a nullity.
The situation obtaining at the moment therefore is that there are two
deeds in respect of the same property with the second one in favour of the
applicant having been registered in error.
The
first respondent appeared in person and submitted deed of transfer No. 4570/99
as proof of ownership. He stated that he
was given the deed by second respondent after he had paid for the stand and the
construction in full, otherwise second respondent would not have given him the
deed. His attention was drawn to the
fact that the mortgage bond registered on his deed had been cancelled on 5
October 2001 long before construction of the house had commenced. He could not explain how this happened.
The
first respondent confirmed that when he visited the site in 2002 there was a
structure being constructed. Asked to
produce proof that he had paid for the stand and the construction he produced four
receipts. The first receipt was issued
by second respondent on 1 April 1997 in the sum of $400-00 local currency and
shows that the payment was “accommodation deposit”. The second is a receipt issued by Webb Low and Barry legal practitioners
on 27 April 1999 in the sum of $1863-10 local currency, for “Bond FBS”
presumably for the registration of a bond in favour of Founders Building
Society.
The
third receipt is for $17250-00, local currency, issued by Coghlan and Welsh legal practitioners on 5 November 2003as
consultation fee. The last one is a
Barclays Bank cash deposit slip of $150000-00 local currency into the account of
TLP AGENCIES (PVT) LTD. The depositor's
address is given as 6711 Cowdray Park Bulawayo.
This is a payment which was made long after the house had been
constructed using funds availed by Beverley Building Society through a loan
facility extended to the applicant who serviced the loan in full.
The
first respondent therefore has not shown that he paid the purchase price of the
stand and the costs of construction of the house.
At
the hearing I allowed the parties to submit further documents if they so wished
which would help clarify the issues in dispute.
The documents submitted by first respondent show that he had been
offered a loan by Founders Building Society to develop the stand but he never
took that loan.
An
affidavit by one Edmond Moyo was also put in and it reads as follows:
“I am employed by Alpha
Construction as an administration director.
When we went into an agreement with Sifiso Thebe, we arranged with our
financers Founders Building Society to give him a mortgage bond for House No.
6711 Cowdray Park. He never withdrew the
mortgage money, so no payment was done to us.
We later sold the property to
Sehlukene Sibanda after failing to trace Thebe who was reported to be working
in Botswana. It took more than 4 years
before we saw Thebe who only appeared demanding the house which had already
been constructed for Sehlukene Sibanda and was staying there, using funds from
Beverley mortgage bond for Sehlukene Sibanda.
The property was paid for by Beverley Building Society not Thebe's
Founders Building Society.
We were only made aware of
this case when Thebe approached us seeking assistance. We are not able to assist Mr Thebe since he
never paid for the property. Accordingly
the property, according to our records belongs to Sehlukene Sibanda.
When we discovered that the
property had been double registered we approached the Deeds Office who
apologised and advised us that the error was regrettable. Founders Building Society have and had no
interest in the said property since they never parted with any money for the
property.”
This
explanation puts the matter in proper perspective and shows why the first
respondent was unable to produce proof that he paid for the property. What we have here is a situation where the
first respondent took advantage of the title deed in his name which had not
been cancelled. When applicant bought
the property it had been repossessed from the first Respondent but he unlawfully
evicted the applicant who had paid for the construction of the house on the
stand.
This
is clearly a case of a double sale in which the same property was sold to both
first respondent and the applicant. I
had occasion to examine the law relating to double sales of immovable property
in Howera v Mudzingwa and Others HB
123/10 at pages 8-9 of the cyclostyled report where I made reference to Crundall Brothers (Pvt) Ltd v Lazarus N.O
and another 1991 (2) ZLR 125 (S) at 132G and 133A-B where the Supreme Court
stated:
“This approach was set out as
follows by Professor McKerron in (1935) 4 SA Law Times 178 and repeated with
approval by Professor Burchell in (1974) 91 SALJ 40:
“It is submitted that where A
sells a piece of land first to B and then to C – and the position is the same mutatis
mutandis in the case of a sale of a movable of which the court would decree
specific performance – the rights of the parties are as follows:-
(1) ---
(2) where transfer has been passed to C, C
acquires an indefeasible right if he had no knowledge, either at the time of
sale or at the time he took transfer, of the prior sale to B, and B's only
remedy is an action for damages against A
If, however, C had knowledge
at either of these dates, B, in the absence of special circumstances
affecting the balance of equities, can recover the land from him, and in
that event C's only remedy is an action for damages against A.”
In
that case the court accepted that when the second purchaser is entirely
ignorant of the claims of the first purchaser, and takes transfer in good faith
and for value, his real right cannot be disturbed (p131F). It also accepted that there may be special
circumstances affecting the balance of equities, which should guide the court
even where the second purchaser was aware of the first purchaser's prior right.
In
casu, at the time the applicant entered into a sale agreement with the
second respondent he was advised that the vacant stand in question had been repossessed
from the first respondent for failure to pay. He was given a copy of a letter
addressed to the conveyancers, James Moyo
Majwabu and Nyoni by the seller to that effect. He therefore was entirely unaware that the
first respondent would raise a claim.
For that reason, the applicant's claim deserves to be respected.
Even
if I am wrong in that conclusion, this is a case where there are special
circumstances which affect the balance of equities. The applicant purchased the property for
value at a time when it was a vacant stand.
He paid for the construction of a three roomed house as opposed to the first
respondent's two roomed one. The first
respondent did not pay for the construction and only surfaced after completion
of the house.
The
first respondent unlawfully evicted the applicant from the house when the
latter had title to it. This is a peculiar
case where both of them hold title even though that of the applicant ought not
to have been registered. The balance of
equities however favour the applicant.
I
am therefore persuaded that the applicant has made out a good case for the
relief sought.
In
the result it is ordered that:
(1) The deed of transfer
number 4570/99 for stand 6711 Cowdray Park Township of Cowdray Park of the
Helenvale Block, Bulawayo, in favour of the first respondent is hereby
cancelled.
(2) The deed of transfer number
1272/2002 for stand 6711 Cowdray Park Township of Cowdray Park of the Helenvale
Block, Bulawayo in favour of the Applicant is hereby upheld.
(3) The first respondent and
all those claiming occupation of the said stand through him are directed to
forthwith vacate the property failing which the Deputy Sheriff should eject
them.
(4) The costs of this application shall be
borne by the first respondent.
Bulawayo Legal Projects
Centre, applicant's legal practitioners
