This is an appeal against part of the judgment of the High Court sitting at Bulawayo, dated 2 May 2019.
The court a quo granted the following order:
1. That, the purported Deed of Sale concluded by the parties on 26 January 2010, in respect of a portion of Umguza 100 Acre Lot 5A be and is hereby confirmed to be null and void for want of compliance with the mandatory provisions of the Regional, Town and Country Planning Act [Chapter 29:12].
2. That, the plaintiff's claim for payment by the defendant of reasonable rentals and holding over damages be and is hereby dismissed with costs.
3. That, the plaintiff be and is hereby ordered to pay to the defendant the sum of $125,000 being compensation for improvements effected by the defendant on the plaintiff's property.
4. That, the prescribed rate of interest be levied on the amount under (3), supra, with effect from 24 June 2015 to the date of full payment.
5. That, the plaintiff pays costs of suit.
The part under appeal relates to paragraphs 3, 4 and 5 of the order. The appellant is also aggrieved by the court a quo's failure to pronounce itself on the claim for eviction in that order.
THE FACTS
The facts that are relevant to this appeal are common cause. The appellant sadly passed away on 24 August 2019, before the appeal was heard. He was, by order of this Court, substituted, on 22 July 2020, by his duly appointed executor dative, who also happens to be his son.
The appellant is the registered title holder of Umguza 100 Acre Lot 5A in the District of Bulawayo measuring 67,2123 hectares held under Deed of Transfer No.74/91 (the immovable property). It is situated in the outskirts of Bulawayo and falls under the administrative jurisdiction of the Umguza Rural District Council.
On 17 August 2000, the appellant sought, but failed, to obtain a sub-division permit for the property into units of less than five (5) hectares. The responsible authority adjudged any plots that were less than five (5) hectares not to be viable for agriculture.
The respondent resided on a fully developed six (6) acre plot in the vicinity of the appellant's immovable property.
On 12 January 2010, in anticipation of an agreement of sale to be consummated with the appellant, the respondent sold his plot for the sum of R225,000.
On 26 January 2010, the parties concluded a written agreement for the sale of 10 acres (4,047ha) of the immovable property (the plot) for the sum of US$20,000.
A deposit of US$10,000 was to be paid before the respondent could take occupation.
The balance was payable at the rate of US$2,000 per month from 1 May 2010.
The other terms and conditions of the agreement were that the respondent would “pay the cost of all transactions connected with the transfer of the property, all charges of capital gains, and draw electric power to the homestead of the seller.”
The respondent duly paid the deposit and took occupation on 1 April 2010.
His building plans were approved by the Umguza Rural District Council on 3 April 2010. He constructed a three bedroom cottage and a four bedroom main house in 2010. In 2011, he installed electricity infrastructure for his two dwellings and the appellant's homestead but only drew electricity to his dwellings. He flushed a borehole previously sunk by the appellant, constructed two (2) septic tanks and two (2) blair toilets. He also put up a perimeter fence around “his” plot.
It was common cause that he expended the total sum of US$34,158=75 and R2,220 on these developments.
The relationship between the appellant and the respondent deteriorated soon after the respondent took occupation of the property.
The appellant refused to accept the instalments tendered by the respondent and demanded that the respondent keep his money while he kept his land.
The respondent tendered the balance of the purchase price, and, when it was rejected, he issued summons for specific performance in HC491/11.
Thereafter, with the help of their legal practitioners, a compromise was reached between the parties but was not honoured.
In the result, the appellant then sued the respondent for the payment of the balance of the purchase price, in the sum of US$10,000, in HC2828/12.
During this tumultuous period, unbeknown to the respondent, the appellant sought to regularize the sale of the plot by applying for a subdivision permit to the department of Physical Planning Offices in Bulawayo on 10 January 2011.
It was only in or about October 2012 that the respondent became aware that the appellant did not have a sub-division permit entitling him to subdivide the immovable property and sell the plot.
On 27 February 2013, acting on the appellant's request, the respondent paid US$550 to the appellant's former legal practitioners for the processing of a belated sub-division permit.
Notwithstanding that the immovable property measured 67,2123ha, a permit for the subdivision of the immovable property into two Stands measuring 4,047 and 37,6961 hectares was duly issued on 29 April 2013.
The permit, however, turned out to be a fake document.
Acting on the erroneous belief that the permit was genuine, on 6 June 2013 and 30 January 2014, the respondent paid US$5,000 and US$4,000, respectively, towards the purchase price.
The respondent, therefore, paid to the appellant a total sum of US$19,000 for the purchase of the plot.
He, in addition, expended US$34,158=75 and R2,220 in the development of the immovable property.
By the time a pre-trial conference was held a quo, both parties had withdrawn their earlier actions against each other.
THE PARTIES RESPECTIVE CLAIMS IN THE COURT A QUO
At the pre-trial conference, the parties agreed, inter alia, that their agreement of sale was invalid and illegal for breaching section 39(1)(i) and section 40 of the Regional, Town and Country Planning Act. This was because it had been concluded without a subdivision permit.
Consequently, the appellant tendered the purchase price of US$19,000 and sought the eviction of the respondent from the plot.
He also claimed an ascertainable amount for unjust enrichment for the period of the respondent's stay to the date of his eviction.
The quantum for the enrichment claim was based on what the appellant perceived to be the reasonable rentals that the respondent would have paid for the occupation of the property.
He, therefore, claimed US$18,000 for the occupation of the plot from March 2010 to April 2015 and “holding over damages at the rate of US$10 per day…, from 1 May 2015 to the date of vacation” and costs on the higher scale.
The respondent contested the action.
He disputed being unjustly enriched and averred, that, he was a bona fide occupier by virtue of the invalid agreement. He also averred, that, in the absence of a lease agreement, the appellant did not have a valid cause of action for the payment of reasonable rentals and holding over damages.
He, in turn, counter claimed for unjust enrichment for the improvements he had made on the immovable property.
He averred that the appellant was enriched at his expense by these improvements.
He further alleged that the appellant was enriched by the payment of US$19,000 towards the purchase price and US$550 for the procurement of the subdivision permit.
The respondent, therefore, sought the repayment of the denominated amounts; a refund of the expenses incurred in erecting the electricity infrastructure; and the depreciated replacement cost (being the current cost of reproduction or replacement of an asset less deductions for physical deterioration, obsolescence and optimization) of the improvements he made on the plot.
He specially entreated the court to award him “such payments as will be sufficient to enable the defendant to purchase a property of comparable value including all the improvements he had effected.”
He also sought interest at the prescribed rate from the date of summons to the date of payment in full and costs on the higher scale.
In his plea to the counter-claim, the appellant, again, tendered the refund of US$19,000.
He disputed to being unjustly enriched by the developments made by the respondent on the immovable property. He averred, that, the respondent had failed to draw electricity to his homestead and had fraudulently facilitated the issuance of the fake permit. He also alleged that the respondent's dwellings were constructed without his authority and that he was therefore a mala fide occupier. Lastly, he stated that these dwellings would not be useful to him.
The two issues referred to trial a quo where whether or not:
1. The appellant was entitled to a reasonable rental arising from the respondent's occupation of the plot; and
2. The defendant has been unjustly impoverished, and plaintiff unjustly enriched, as a result of the alleged developments made by the defendant upon the plot; and, if so, the quantum thereof.
THE FINDINGS OF THE COURT A QUO
The court a quo confirmed the invalidity of the agreement of sale on the ground that it was contrary to the mandatory dictates of sections 39(1)(i) and 40 the Regional, Town and Country Planning Act.
The confirmation was in accordance with established authority emanating from this Court in such cases as X-Trend–A Home (Pvt) Ltd v Hoselaw (Pvt) Ltd 2000 (2) ZLR 348 (S) and City of Gweru v Kombayi 1991 (1) ZLR 333 (S).
It held, on the authority of Magodora & Ors v Care International Zimbabwe 2014 (1) ZLR 397 (S)…, that a lease agreement could not possibly be extrapolated from the invalid agreement of sale; and, resultantly, dismissed the claim for rentals and holding over damages sought by the appellant in the main.
It is clear from a reading of the judgment, that, the court a quo did not relate the request for reasonable rentals and holding over damages to the appellant's own enrichment claim against the respondent.
The appellant pleaded such a cause of action.
He testified during the trial, that, the respondent derived benefit from the farming activities he conducted on the plot. He also asserted that another benefit that accrued to the respondent was in the form of rental savings that he would have been obliged to pay elsewhere but for his stay on the plot.
These assertions were not, and could not, be controverted by the respondent.
However, it appears that counsel for the appellant misconceived the appellant's case and did not pursue the claim to fruition.
The court a quo, on the basis of credibility findings and the probabilities of the case, further found the respondent to have been a bona fide occupier and the appellant a mala fide seller.
Consequently, it relaxed the in pari delicto rule in favour of the respondent.
It, thus, held that the appellant had been unjustly enriched at the expense of the respondent, who was concomitantly impoverished by the transaction.
The court a quo, therefore, upheld the respondent's counter claim.
In computing the measure of the benefit that accrued to the appellant, the court a quo applied the pari delictum rule.
In the exercise of its broad discretion, it relaxed the pari delictum rule in a bid to do justice between the two protagonists.
It had no difficulties in finding the appellant to have been enriched in the sum of US$19,550 constituted by the payments towards the purchase price and the facilitation of the procurement of the sub division permit.
The correctness of this finding is beyond question.
After all, the appellant did not retract his tender of US$19,000, and conceded the payment of US$550 for the stated purpose.
The parties disagreed on whether or not the respondent was entitled to compensation for the improvements that he made on the immovable property.
The appellant submitted a quo that the respondent was not entitled to the value of the improvements:
(i) Firstly, because the respondent had not properly framed them under the enrichment cause of action in his pleadings.
(ii) The second was that the improvements were not, nor would they be, useful to him.
He, in any event, agitated for their urgent removal from his property.
The court a quo held, that, while on the pleadings, the cause of action for the improvements was poorly and inelegantly framed, the respondent had obliquely included them in his enrichment cause.
Further, that the purported defective pleadings had, in any event, been amplified and cured:
(i) Firstly, by the inclusion of the developments in the second issue referred to trial at the pretrial conference; and
(ii) Secondly, by the overwhelming evidence adduced by the respondent at the trial together with the scope and tenor of the questions asked and answers rendered during cross examination.
The court a quo also held, on the authority of Reza v Nyangani 2001 (1) ZLR 202 (S)…, that usefulness was to be measured objectively, and not subjectively, on the basis of added value.
It, therefore, found the improvements to be objectively useful to the appellant. It also found that they could not be removed because they were fixed to the immovable property.
The court a quo estimated the added value of the improvements at $125,000 and not US$132,833=33 claimed by the respondent.
It adopted the lowest depreciated replacement value of $90,000 provided in one of the three valuation reports produced in January 2018. The court a quo then added the depreciated replacement value of the plot, estimated in two of the valuation reports at $35,000, to this figure.
It, therefore, awarded the aggregate amount of $125,000 to the respondent as a fair and equitable amount that adequately represented the enrichment that accrued to the appellant and constituted his concomitant impoverishment.
Lastly, the court a quo declined to immediately evict the respondent from the immovable property on two grounds:
(i) The first was that he had a real improvement lien on the property, dischargeable on full payment of the award.
(ii) The second was that the respondent had invested all the resources he had on the plot.
To evict him from the plot, empty-handed, would not only be intolerable, but, would consign him and his family to the indignity of homelessness and destitution.
I quote below the concluding remarks of the court a quo in this regard. At p15 of its cyclostyled judgment, it stated that:
“This Court firmly believes that this is a proper case to exercise its discretion in the interest of equity and fairness by ordering that the defendant be evicted only upon payment of the full compensation ordered by the court per the defendant's counter-claim. This is mainly because the defendant has a real lien over the portion of the land in issue.”…,.
Notwithstanding the firm belief, the court a quo omitted to make the contemplated order of eviction in the final order that issued.
THE GROUNDS OF APPEAL
The appellant initially raised six grounds of appeal. At the commencement of the appeal hearing, in Bulawayo, counsel for the appellant moved for the deletion of the second ground of appeal and the amendment of the fourth ground.
Counsel for the respondent did not oppose the amendments.
We, accordingly, granted the amendments by consent of the parties.
Resultantly, the following five grounds of appeal remained in contention:
1. The Honourable Court a quo misdirected itself in law in holding, that, despite the respondent's failure to plead unjust enrichment with regards to the improvements upon the property at issue, such failure to specifically plead unjust enrichment was curable by the evidence.
2. The court a quo misdirected itself at law by failing to order either for or against the appellant on a claim of eviction of the respondent from the appellant's land when such a claim was put before the court a quo for determination by that court.
3. The court a quo misdirected itself in its application of the law in awarding what amounts to contractual damages in the relaxation of the in pari delicto principle in that the court a quo relied on valuations provided by the respondent, when, in fact, the court a quo could only have relied on the actual proof of expenditure upon such land having been pleaded and proof provided.
4. The Honourable Court a quo erred in ordering that interest on the judgment debt be paid by the appellant from 24 June 2015, when, in fact, the valuation relied upon for the monetary award in issue was done in 2018.
5. The Honourable Court a quo misdirected itself at law by ordering that the appellant pays the costs, when, in fact, the appellant was partially successful in the court a quo.
The relief sought from these grounds of appeal was:
(i) Firstly, that the appeal succeeds with costs.
(ii) Secondly, that the judgment a quo be altered by setting aside the paragraphs relating to the payment of the sum of $125,000, interest, and costs. These were to be substituted by an award for the payment of the purchase price paid of $19,000 and the actual expenditure proved to have been incurred in the improvements to the immovable property in the sum of $34,158=75 and ZAR2,220. The interest on these sums was to run from the date of the order and each party was to bear his own costs.
The appellant further sought the inclusion of an order of eviction to the substituted order.
THE ISSUES FOR DETERMINATION
The issues that arise from the grounds of appeal are these:
1. Whether or not the court a quo erred in finding that the respondent had proved his case and was therefore entitled to damages for unjust enrichment.
2. Whether or not the court a quo erred in relaxing the pari delicto rule and in awarding the respondent compensation in the nature of contractual damages.
3. The date on which interest should commence to run and the appropriateness of a cost order against the appellant a quo.
THE CONTENTIONS BEFORE US
During counsel for the appellant's oral submissions, it appeared to the court that the parties required an opportunity to attempt settlement of the matter. Counsel for the respondent was amenable to such a course of action.
The parties requested for a period of three (3) weeks to pursue the attempt at settlement.
We accorded them the opportunity to do so. The matter was accordingly postponed for continuation in Harare on 24 August 2020.
The attempt at settlement was, however, not successful.
The appeal proceeded in Harare.
