The
plaintiff issued summons against the first, second, third and fourth
defendants claiming the following relief:
1.
An order that the fourth defendant takes all the necessary steps to
pass possession of Stand Number 9314, Budiriro Township, Harare,
within 48 hours of the order of court.
2.
An order that if the fourth defendant fails, within 48 hours of the
court's order, to take the necessary steps, the Deputy Sheriff be
authorized to take such steps on the fourth defendant's behalf.
3.
The first, second and third defendant's pay the costs of suit on
the legal practitioner and client scale jointly and severally, the
one paying the others to be absolved.
The
background to this action is as follows.
Miriam
Munemo and Faina Munemo were both married to Thomas Munemo. He held a
lease-to-buy agreement with the City of Harare over Stand 9314
Budiriro Township, Harare. They assumed his rights, title and
interest over the said Stand upon his death. In September 2002, the
two wives “sold” their rights, title and interest in the Stand to
the third defendant through the agency of one Davison Shonhiwa of
Southern Life Executors. A month later, in October, they “sold”
their rights, title and interest to the plaintiff.
All
formalities were observed regarding obtaining the consent of the
fourth respondent and a Memorandum of Agreement of Assignment was
executed. Prior to the signature of the Memorandum of Agreement of
Assignment of rights, title and interest, it was brought to the
fourth respondent's notice that there existed a prior agreement of
assignment between the two wives and the third defendant. The
assignment was not proceeded with. The plaintiff sued in HC10708/02.
The two wives both died soon thereafter. This action was withdrawn
pending the appointment of the executors to their estates.
It
is common cause that in HC10708/02 the two wives had claimed that the
earlier “sale” had been cancelled for breach (exhibit 3). It is
also common cause that one Davison Shonhiwa had facilitated the
“sale” to the third respondent but had not passed on the proceeds
of the “sale” to the two wives.
After
the appointment of the executors to the late two wives' estates,
the third defendant counter-claimed seeking the same relief as that
which the plaintiff is presently seeking on the basis that a prior
sale takes precedence over a subsequent sale.
At
the pre-trial conference the parties agreed that the issues for
determination were;
(a)
Which agreement, between the two, should be upheld;
(b)
Whether the third defendant's agreement with the two wives was
cancelled for breach;
(c)
Whether the plaintiff is a bona
fide
purchaser; and
(d)
What an appropriate order should be.
At
the trial, the plaintiff was able to show that indeed he had entered
into an “agreement of sale” with the two wives. Pursuant to that
agreement, the parties had attended at the fourth defendant's
sub-office in Budiriro and were referred to the Remembrance Drive
offices where the final documents formalising the cession of rights,
title and interests in favour of the plaintiff would be concluded.
It
was admitted, by the third defendant, that the purchase price paid to
Davison Shonhiwa was not passed on to the two wives. The plaintiff's
witness confirmed that the only “sale” which the last dying wife,
Faina Munemo, acknowledged to him, as executor of her estate, was
that of the subsequent sale to the plaintiff.
The
witnesses for the plaintiff were both credible and honest.
The
plaintiff even admitted that he could not recall the exact amount of
money he had paid over to his legal practitioners as the purchase
price. Had he rehearsed his evidence he could simply have given the
figure.
In
my assessment of the evidence, although the third defendant may have
signed an “agreement of sale” with the two wives at the behest of
a shadowy figure called Davison Shonhiwa, the difficulty her case
faces is that Davison Shonhiwa was an incredibly unreliable character
even in court. He claimed he acted as agent of both the sellers and
the buyer in the transaction. He could not produce any proof that he
had been lawfully appointed to deal with the estate of the late
Thomas Munemo and the estate of the late Miriam and Faina Munemo in
the manner he did. He failed to explain why, for example, his firm of
executors demanded payment from Miriam Munemo if they held any funds
in the form of proceeds of sale from the third defendant in 2002.
The
evidence shows that on 22 and 23 October 2002 Miriam Munemo paid a
total of $125,375= to Southern Life Executor Services. To my mind
this put Davison Shonhiwa's credibility into serious doubt and cast
him as a shameless liar. Even the document his firm admittedly drew
regarding the sale, there is nothing to suggest that his firm was
behind it.
Why
was he hiding his firm's role? Whose agent was he?
The
sellers dispute that he acted for them and claim that he coerced them
into signing exhibit 6 against their will. From the manner he
conducted himself in this case, I cannot put it beyond him.
Counsel
for both the plaintiff and the third defendant argued this case as if
it involved an agreement of sale of immovable property. That approach
is misplaced because it in effect ignores the fact that what is being
claimed is not the transfer of right, title and interest by the
plaintiff from the first, second and fourth defendants but a cession
of the rights enshrined in the “lease-to-buy” agreement between
the fourth defendant, who is the owner of the land, and the “sellers”
who signed off their rights to two different parties.
Where
a seller fraudulently sells immovable property to two purchasers the
court has to decide between two innocent buyers. Where transfer has
not been passed to either party the basic rule, in cases of double
sales, is that the first purchaser should succeed, in the absence of
special circumstances. The first purchaser is treated as having the
stronger claim and the second purchaser is left with a claim for
damages against the seller. Guga
Moyo & Ors
2000
(2) ZLR
458
(SC).
But
that rule applies only "in the absence of special circumstances
affecting the balance of equities". See McKERRON (1935) 4 SA Law
Times 178; BURCHELL
(1974)
91 SALJ 40.
BURCHELL
was of the view that "the balance of equities must weigh heavily
in favour of the second purchaser" before the court could favour
her over the first purchaser….,.
In
BP
Southern Africa (Pty) Ltd v Desden Properties (Pvt) Ltd
1964
RLR 7 (G), MACDONALD J…, said:
"In
my view, the policy of the law will best be served in the ordinary
run of cases by giving effect to the first contract and leaving the
second purchaser to pursue his claim for damages for breach of
contract. I do not suggest that this should be the invariable rule,
but I agree with the view expressed by Professor McKerron that save
in 'special circumstances' the first purchaser is to be preferred."
The
broad principle, as set out above, was acknowledged to be our law in
Barros
& Anor v Chimphonda
1999
(1) ZLR 58 (S)
although
that case turned on the fact that the second purchaser had knowledge
of the first purchase. See also
Lindsay
v Mathews & Anor
1972
(1) SA RLR 186
(G)…,.
In
Jangara
v Nyakuyamba & Ors
1998
(2) ZLR 475, the head note of which reads:
“The
cession of the rights in breach of the non-cession clause creates
rights between the lessee-purchaser and the third party, but it
cannot bind the lessor-seller. This agreement is not illegal and
invalid, but is only unenforceable against the lessor-seller. At the
instance of the third party, the court may enforce the contract as
against the lessee-purchaser but it cannot make an order, such as an
order of transfer, that can bind the lessor-seller. The court has the
discretion to order the lessee-purchaser to make transfer if he is in
a position to do so or to take transfer of the property in order to
give transfer to the third party. Where the lessor-seller is joined
in the action and does not oppose the transfer, the court can
exercise a discretion to order specific performance of a contract
which, had the lessor-seller objected to transfer, would only have
been enforceable by way of damages.”
That
case is authority for the proposition that the court may confine the
third party lessee-buyer to a claim for damages even if his claim may
have been earlier in time, depending in the circumstances of the
particular case.
In
the present case, I consider the fact that the lessor-seller had
virtually approved of the cession to be of overriding importance.
This is a special circumstance because the lessee-buyer had signed
the relevant documentation together with the City of Harare virtually
assigning their rights, title and interest to third party thereby
placing that third party in a position to enforce the right to claim
transfer upon fulfilment of whatever obligations are set out in the
lease-to-buy agreement. Payment of the full purchase price to the
lessee-buyer by third party puts his claim on a stronger footing
compared to the other party whose payment is held by the executor.
The
third defendant has a claim in damages against her agent, the said
Davison Shonhiwa.
Her
“agreement” cannot be held to have earned the approval of the
fourth defendant who had already considered and approved the
plaintiff's Agreement of Sale (exhibit 1), Memorandum of Agreement
of Assignment dated 30 October 2002 (p14 of bundle of documents) and
the parties “Application For Cession” (exhibit(s) 2) taken
together.
I
am satisfied that the plaintiff has succeeded in making a case for
the order he claims.
As
for costs, normally costs follow the event but this is an unusual
situation where, from the evidence, it appears that the third
defendant was a victim of unscrupulous executors. I will not grant
the order prayed for but on party and party scale.
In
the result therefore, I make the following order:
1.
The fourth defendant be and is hereby ordered to finalise the process
initiated on 22 October 2002 by taking all the necessary steps to
pass cession of all rights, title and interest in favour of the
plaintiff within fourteen days of the date of this order.
2.
In the event that the fourth defendant fails or neglects to comply
with paragraph (1) above, then in that event, the Deputy Sheriff be
and is hereby authorised to take such steps on the fourth defendant's
behalf.
3.
The third defendant's counter-claim be and is hereby dismissed with
costs.
4.
The first, second and third defendants to pay the plaintiff's
costs.
