The
dispute in
casu
is steeped in the sale of a deceased immovable property whose
purchase price was paid by the applicant but transfer of which the
respondent failed to effect. The draft order the applicant seeks is
couched in these words:
“IT
IS HEREBY ORDERED THAT:
1.
The respondent is hereby ordered to deliver and register a four
roomed house; comprising two bedrooms, kitchen, dining room and a
toilet in either Nyameni, Dombotombo, Rujeko or Rusike high density
Suburbs of Marondera, to the plaintiff (sic)
within thirty (30) working days of this order.
2.
In the event of the respondent failing to perform in accordance with
para 1 above, the applicant is hereby empowered to execute this order
against respondent's property.
3.
The respondent to pay costs of suit on a client legal practitioner
scale.”
THE
FACTS
The
respondent is a co-director of Pricassons Investments (Pvt) Ltd, a
company, as can be gleaned
from its letterheads, whose core business is buying and selling of
Stands and houses, developers and brokers, driving school, car hire,
dealers in imported new and used cars, trucks and mini buses and
construction of agreements of sale.
In
December 2007, the respondent, acting on behalf of Joseph Tsamwayi,
the appointed executor of the estate of the late Patrick Tsamwayi,
entered into an agreement of sale with the applicant in terms of
annexure A1-A5 wherein the applicant purchased Stand Number 8 Dziva,
Dombotombo, Marondera for a purchase price of Z$18 billion. The
salient terms of annexure A1-A5 are:-
(i)
Clause 2(c), providing that all the moneys shall be deposited into
Pricassons (Pvt) Ltd's Standard Chartered account number
0100254284900;
(ii)
Clause 9, providing that in the event of the seller breaching any
term or condition of this agreement and the seller fails to remedy
the breach within 7 days of written notice to do so, then, without
prejudice to his rights at law, the purchaser shall be entitled to
either cancel the agreement and claim damages which shall be equal to
the value of purchasing a similar comparable property at the time of
such claim or seek an order of specific performance;
(iii)
Clause 10, providing that the seller shall cede all rights in the
property to the purchaser within three months of signing this
agreement which time it is anticipated the seller would have been
issued with the certificate of authority by the Master of the High
Court; and
(iv)
Clause 11, providing that the agent, Mr Patson Nawasha, of Pricassons
(Private) Limited hereby undertakes and guarantees that the seller
will perform as per the agreement, and, in the event of any material
breach, he will be jointly responsible with the
seller in paying damages to the purchaser.
The
applicant paid the full purchase price for the house, which was brick
under asbestos, composed of two bedrooms, kitchen, lounge and toilet.
The
respondent failed to fulfil his part of the agreement and admitted
that he had sold a deceased estate house which had a dispute – the
minor children of the deceased having refused to approve of the sale.
On
4 July 2008 the parties signed a Memorandum of Understanding
(annexure 'B') clause two of which stipulated that the respondent
would deliver to the applicant an alternative house within 14 days of
signing of the memorandum. Despite this undertaking, the respondent
still did not deliver the alternative house. On 26 July 2008 the
respondent wrote to the applicant and her then husband, Gideon
Muchada, reiterating that he wanted to honour his undertaking in
annexure 'B' vide annexure 'C'. However, to date the
respondent has not fulfilled his undertaking.
THE
DEFENCE
In
his opposing papers, as well as the heads of argument, the respondent
basically raised three issues or defences.
The
first is that there exists a material dispute of fact which cannot be
resolved on the papers without hearing viva
voce
evidence. This is premised on the allegation by the respondent that
the applicant averred that the respondent knew that the estate
property had a dispute and despite that knowledge he fraudulently
misrepresented to the applicant to enter into the contract of sale.
Because the respondent disputes this averment this necessitates the
hearing of viva
voce
evidence.
The
second issue raised is one of supervening impossibility. This is
premised on the fact that the purchase price was deposited into the
respondent's trust account and it remained there until the Zimbabwe
dollar currency became moribund through no fault of the respondent.
This was out of his control hence constitutes a supervening
impossibility to perform. He could not provide the alternative house
he had guaranteed to do because the purchase price paid had been
rendered valueless.
The
third issue raised relates to non-joinder of the principal, viz
Joseph Tsamwayi. For this averment, the respondent relies on clause
11 of the agreement of sale alluded to supra,
viz that in the event of any material breach of the agreement by the
seller the respondent will be jointly responsible with the seller in
paying damages to the purchaser. The non-joinder of the seller, so
the argument went, is fatal to the application.
Mr
Mahuni
is
from the law firm Matsanura and Associates who are corresponding
attorneys of Messrs Laita and Partners representing the respondent.
The latter firm drafted the respondent's opposing papers including
the heads of argument. At the hearing of argument Mr Mahuni conceded,
correctly in my view, that the averments that there exist a material
dispute of fact and also supervening impossibility have no legal leg
to stand on. The concession's propriety is hinged on the fact that
the alleged material dispute of fact is misplaced because the
applicant's cause of action is founded not on the agreement of sale
annexure 'A1-A5' but on annexures 'B' and 'C' and also
that for more than a year the purchase price lay in the respondent's
trust account without the respondent either purchasing an alternative
house for the applicant or reversing the transfer of the deposited
funds.
The
sole issue that is left for my resolution is the one relating to the
alleged non-joinder of the principal.
THE
LAW AND ITS APPLICATION TO THE FACTS
In
Wood
v Visser
1929
CPD 55 WATERMEYER J…, restated the general rule regarding the
liability of agents
in these words:-
“The
general rule, undoubtedly, is that a person contracting with an agent
can only sue the principal on that contract, but, in some cases, he
can sue the agent; if, for example, he contracts with the agent as a
principal, makes him his debtor and gives credit to him and not to
his principal, then he can sue the agent personally on such
contract.”
See
also Blower
v Van Noorden
1909 T.S. 898 where INNES CJ said:-
“The
usual test would be to enquire to whom the contracting party looked.
Nam
in
talibus
contractibus semper inspictur cujus fides secuta sit.
That would be the governing principle.”
In
clause 11 of the agreement of sale quoted above, the respondent holds
himself out as a guarantor
and surety, and will be “jointly responsible with the seller in
paying damages to the purchaser” in case of a material breach of
the contract. He thus makes himself a co-principal debtor.
In
Neon
& Cold Cathode Illuminations (Pty) Ltd v Ephron
1978 (1) SALR 463 it was held that the only consequence (albeit an
important one) that flows from a surety also undertaking liability as
a co-principal debtor is that vis-à-vis the creditor he thereby
tacitly renounces the ordinary benefits available to a surety, such
as those of excussion and division and he becomes liable jointly and
severally with the principal debtor…,. See also CANEY's The
Law of Suretyship In South Africa,
Juta and Co. Ltd 3rd
ed. 1982…,.
In
the instant case, it is beyond caevil that the unassailable
interpretation that must be gleaned from the wording of clause 11 of
the agreement of sale is that by holding himself out as a guarantor
and surety, followed by his conduct of retaining the purchase price
in his company's trust account for some 13 months, coupled with his
undertaking in annexure 'B' as “agent and guarantor in the main
agreement of sale…, to secure for the purchaser an alternative
property within 14 days from the signing of this agreement”, the
applicant purchaser looked to the respondent not only as a
co-principal debtor, but, through novation, via annexure 'B', as
the sole debtor who could be sued in either instance alone without
joining the principal or original principal as the case may be.
In
any event, by agreeing to be a co-principal debtor, the respondent
tacitly renounced the benefit of excussion, and, consequently, it is
idle for him to now clamour or grope for it.
The
applicant is perfectly entitled, at law, to proceed against either
party at her discretion. The party successfully sued may be
reimbursed by the other party who has not been joined to the suit.
CAN
APPLICANT RIGHTLY DEMAND SPECIFIC PERFORMACNE FROM RESPONDENT
As
far back as the 17th
century it was held, in Cohen
v Shires McHattie & King
(1882)
1 SAR 41, that Roman Dutch law clearly recognised the right to a
specific performance of a contract.
And
in
Farmers' Co-operative Society (Reg) v Berry
1912 AD 343…, INNES JA stated:-
“Prima
facie,
every party to a binding agreement who is ready to carry out his own
obligation under it has a right to demand from the other party, so
far as it is possible, a performance of his undertaking in terms of
the contract.”
That
right has been recognised and re-affirmed in a plethora of cases such
as Woods
v Walters
1921 AD 303…,; Haynes
v King Williamstown Municipality
1951 (2) SA 371 (A)…,; and Intercontinental
Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd
1993 (1) ZLR 21 (HC).
It
is settled law that the grant or refusal of an order for specific
performance is entirely a matter for the discretion of the court in
which the claim for specific performance is made: Intercontinental
Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd
1993 (1) ZLR 21 (HC)…,.
This
judicial discretion is not circumscribed by rigid rules; rather, each
case must be judged in the light of its own circumstances. Courts
have ruled that the remedy of specific performance can be eschewed
where such an order is inequitable to the defaulting party or
operates unreasonably harshly on the defendant, or where the
agreement giving rise to the claim was unreasonable, or where the
decree would produce injustice or would be inequitable under all
circumstances. See Haynes
v King Williamstown Municipality
1951 (2) SA 371 (A).
In
Tamarillo
(Pvt) Ltd v R.N. Aitken (Pty) Ltd
1982
(1) SA 398 (A) MILLER JA…, dealt with the question of what the
plaintiff or the defendant must do in order to persuade the court, in
the exercise of its discretion, to grant or refuse an order for
specific performance and on which party the onus lies. It is for the
defendant to raise impossibility as a defence and the onus rests on
him to prove impossibility.
In
the instant case, the respondent did not raise the defence of
impossibility of performance. In fact the defence of supervening
impossibility that was initially raised was abandoned at the hearing
by Mr Mahuni.
The sole defence that remained for resolution pertained to the
non-joinder of the principal which I have already disposed of supra.
Mr Mahuni
submitted that the respondent was not disputing liability in the face
of annexures 'A' and 'B'. His only quarrel was regarding the
non-joinder.
On
the facts of this case, it has not been shown that a decree of
specific performance, as prayed for in the draft order, would produce
injustice or be inequitable or operate unreasonably harshly upon the
respondent. On the contrary, its refusal would wrought grave
injustice or operate unreasonably harshly on the applicant who parted
with her life time savings paying for a house which the respondent
failed to deliver, even following an undertaking to deliver an
alternative property within 14 days, yet the respondent kept her
money in his company's trust account for 13 months. To deny the
decree and direct that the applicant should claim damages when the
currency she paid is no longer of any value to anyone would offend
against all known tenets of equity and justice. She performed her
part of the contract and was not responsible for the respondent's
non-performance.
The
statements of account attached to the respondent's opposing
affidavit are of no probative value. They simply indicate that the
applicant, on 24 December 2007, deposited Z$15 billion. The
statements run up to 29 February 2008. It has not been proven that by
February 2009, when the new currency regime was introduced, the
applicant's purchase price was still locked in that trust account.
The respondent could have, and must have, used it for his benefit.
Why
should the applicant be unduly harshly treated by denial of the
decree in the circumstances? Justice, and even public policy
considerations, would not allow it.
In
the result, judgment be and is hereby entered for the applicant in
terms of the draft order with the amendment in paragraph 3 thereof
that costs be on the ordinary scale.
