The
background facts are that the plaintiff expressed interest in Stand
5233 Salisbury Township Lands, measuring 3,309 square metres, which
is the property in dispute.
The
property belongs to the estate of the late Robert Eric Rae. An
Agreement of Sale was concluded on 22 October 2009 between the
plaintiff and Property Shop, the estate agent firm which handled the
transactions, for the sum of US$220,000=. On mode of payment, the
Agreement provided as follows:
“The
Purchaser shall pay cash deposit of US$100,000= [one hundred thousand
United States Dollars] of which US$30,000= [thirty thousand United
States Dollars] shall be non-refundable] upon signing of the
agreement of sale.
The
purchaser shall pay the sum of US$60,000= [sixty thousand United
States Dollars] on or before 30 November, 2009 and the balance of
US$60,000= [sixty thousand United States Dollars] on or before the
31st
December, 2009.”
The
above mode of payment has been the source of the dispute.
The
plaintiff claims to have paid the US$100,000= cash deposit upon
signing of the Agreement of Sale as stipulated by the clause. The
first defendant, representing the estate, denies, that any deposit
was paid.
The
agreed issues for the trial were whether the plaintiff breached the
Agreement
of Sale
with the first defendant, and, if he did, whether the first defendant
cancelled the sale. The second agreed issue was whether this was a
double sale, with the third defendant as the second purchaser, and,
if so, in whose favour did the balance of equities lie.
In
my view, the first issue for determination by the court is whether
the plaintiff paid the requisite deposit upon signature of the
Agreement.
The
plaintiff's evidence was that he paid US$100,000.00=, in cash, to
Felicity Lock, The Property Shop negotiator, after counting the money
at her house in the presence of Shirley Margaret Rae who represented
the seller, who was still alive, by virtue of a Power of Attorney. He
said he did not ask for a receipt, neither did he obtain any other
proof of payment from Felicity Lock. The plaintiff's evidence was
that he paid the US$100,000= before he signed the Agreement because
payment of that amount was a condition precedent to the signing of
the Agreement.
Felicity
Lock denied that any payment was made.
She
said she expected the plaintiff to pay soon after signing but then
the plaintiff showed her some Kingdom Bank documents and said for him
to get the money to pay, he needed to sell his shares first and for
him to sell the shares, he needed a signed agreement. She said she
then gave him Shirley's Rae's Stanbic Account number and told him
to deposit the money into that account. She also gave him a Property
Shop Account number for him to deposit the agency commission. Her
evidence was that Shirley Rae signed the agreement first, in the
absence of the plaintiff, and, later, she took the agreement to the
plaintiff at some agreed meeting place near Hellenic School.
Shirley
Rae also denied that any payment was made to her or Felicity Lock in
her presence. Her testimony was that she had not even met the
plaintiff when the agreement was executed. She saw him for the first
time at the pre-trial conference.
The
plaintiff told the court that he is an astute businessman aged 35
years. He said he has been in business since he was 22 years old and
has about 13 years business experience. He also said he is a
qualified accountant and he has experience in the acquisition of
properties as he has eleven properties to his name.
The
court found it highly improbable that a qualified accountant and an
experienced property investor would part with US$100,000= cash, in
the year 2009, when foreign currency was still scarce, without
bothering to obtain a receipt or other proof of payment; yet that was
the plaintiff's evidence on pages 51 and 52 of the transcribed
record;
“Q.
Now, before a dispute before the parties erupted, did you ever ask
for a receipt?
A..
No, from Felicity no, I never asked for a receipt…,.
Q.
It's a simple question, did you ever ask for a receipt?
A..
From Felicity Lock.
Q.
Did you ever ask for a receipt?
A..
No, I have proof of payment.”
When
the questioning about not asking for a receipt persisted, the
plaintiff, in response, said Property Shop was operating from home
and the office was not running professionally.
All
the more reason why he should have asked for a receipt or some other
form of proof of payment if he knew that Property Shop was not being
run professionally.
The
plaintiff also told the court, in his evidence, that paying
US$100,000= cash was a condition precedent to the signing of the
agreement. The Agreement is part of the court record and nowhere does
the agreement say payment was a condition precedent. It is also
highly improbable that a qualified accountant would pay US$100,000=
deposit before the agreement has been concluded and leave without any
proof of payment.
Even
if Felicity Lock had no receipts on account of being
“unprofessional”, as the plaintiff alleged, the plaintiff himself
could have prepared an acknowledgement note. He knew this was
possible.
“Q…,.
You could have done an acknowledgement of receipt and say I,
Felicity, acknowledge that I have received US$100,000=; you could
have done that…,.
A.
I could have done that.”…,.
The
plaintiff confirmed that he could have done an acknowledgement of
receipt himself. But he did not. He admitted that as a businessman
he knew that disputes could arise and that he could have had an
independent witness with him to confirm the payment; but he said he
went alone to make this huge cash payment.
On
the other hand, Felicity Lock's evidence was that they did not
accept cash as a matter of policy; they gave clients account details
for them to deposit the money into the appropriate accounts. She said
in this instance she gave the plaintiff Shirley Rae's Stanbic
account. She said once the money was deposited into an account, the
deposit slip would be sufficient proof of payment. Her evidence
sounded truthful and the court accepted it.
Shirley
Rae is an 83 year old lady who was around 78 years at the time of the
incident with the plaintiff. Her evidence was that the plaintiff
never paid cash in her presence and never deposited any money into
her account.
Her
evidence was believable. Why would an 83 year old lie against the
plaintiff and say he did not pay if he had paid? All she wanted was a
purchaser who would pay for her husband's property. If the
plaintiff had paid, why would she have turned down his money in
favour of the third defendant's money when the money tastes the
same? The court therefore accepts her evidence as truthful.
In
addition to that, on 27 October 2009, when the plaintiff wrote to the
second defendant through his lawyers requesting him to put a caveat
on the property, he never said he had paid anything. The third
paragraph of that letter stated the following;
“The
agreement of sale is to be satisfied within a period of three
instalments as it fully appears from the attached copy of the
agreement of sale.”
The
use of the phrase 'is to be satisfied' shows that payment had not
yet been done. If the plaintiff had already paid US$100,000= the
letter would have said so.
In
view of the above improbabilities in the plaintiff's claims, the
court rejects the plaintiff's testimony and accepts that of
Felicity Lock and Shirley Rae that no US$100,000= cash was ever paid
by the plaintiff as a deposit for the property.
The
above finding means the plaintiff was in breach of contract from the
very day the sale agreement was concluded. He ought to have paid
US$100,000= on signing of the agreement; he did not. That was the
first breach.
The
plaintiff admitted breaching the further requirements to pay $60,000=
by end of November and $60,000= by end of December. These were the
second and third breaches respectively.
In
view of the three breaches, the plaintiff has no basis to claim
specific performance by the first defendant.
As
held in the case of Lasagne
Investments (Pvt) Ltd & Others v Highdon Investments (Pvt) Ltd &
Others
2010
(2) ZLR 296…, referred to by the third defendant's counsel, a
litigant who seeks an order for specific performance must perforce
establish that he has complied with his obligations under the
agreement.
The
first defendant, through its representatives, comprising of Property
Shop and Sinyoro and Partners, gave the plaintiff some grace period.
Felicity
Lock's evidence was that she continued to follow up for payment.
Mataba, of Sinyoro and Partners', evidence was that when the
plaintiff stopped responding to Property Shop's follow up, he got
into the fray and also followed up the plaintiff.
All
the plaintiff paid was the agent's commission and the conveyancing
fees.
These
follow ups and indulgences were in order because of the provisions of
clause 8 of the Agreement of Sale between the parties.
After
getting no joy from the follow-ups for payment, on 27 November 2009,
Sinyoro and Partners gave the plaintiff 30 days' notice to remedy
the breach. The letter was sent to the plaintiff's domicilium
citandi executandi
given in the Agreement of Sale on the schedule of details as 40 Dover
Road, Chisipite, Harare as provided in clause 9 of the Agreement of
Sale.
The
plaintiff claimed not to have seen the notice. However, since the
notice was sent to his domicilium,
in terms of the Agreement, the notice was validly given.
Clause
9.2 of the Agreement of Sale provides as follows:
“All
notices required to be given in terms of this agreement and all
process shall be deemed to have been validly given or served if
addressed to the party concerned and delivered to the given
domicilium,
postal, or e-mail address.”
This
means that a party had to choose to deliver to the given domicilium,
post to the domicilium
or
use an email address.
In
this instance, the notice was “addressed to the party concerned and
delivered to the given domicilium.”
The
plaintiff did nothing about the notice, and, on 30 December 2009, a
letter confirming the cancellation of the Agreement was addressed to
the plaintiff and sent to the given domicilium.
During
the trial, the plaintiff tried to take issue with the fact that by 30
December 2009, thirty (30) days notice was not complete.
While
the plaintiff's basis for saying that is not clear, the court notes
that no prejudice was caused to the plaintiff thereby because the
third defendant's evidence clearly shows that his own Agreement of
Sale was concluded when thirty days had expired - in January 2010.
In
any event, the default clause provided that the breach should be
rectified “within thirty (30) days of notice calling upon him to do
so”. It did not say after thirty (30) days' notice.
It
is clear from the facts of this case that the first defendant and its
representatives always sought to abide by the terms of the contract
while the plaintiff was busy doing his own thing - which was at
complete variance with the signed agreement. He therefore repudiated
the contract from the onset.
The
cases referred to by the first defendant's counsel on repudiation
of contracts are relevant to this case. In Chinyerere
v Fraser
NO
1994 (2) ZLR 234 it was held that -
“Before
a contract could be said to have been fulfilled per acquipollens, it
was necessary that the act or performance tendered must be equivalent
to that mentioned in the contract…,.”
In
this instance, the performance which was required was that of paying
$100,000= “upon signing the contract.” The plaintiff did not pay
upon signing as required by contract. In Ross
T Smyth & Co Ltd v TD Bailey, Sons Co
[1940] ALL ER 60 (HL)…, the court said -
“I
do not say that it is necessary to show that the party alleged to
have repudiated should have an actual intention not to fulfil the
contract. He may intend, in fact, to fulfil it, but may be determined
to do so only in a manner substantially inconsistent with his
obligation, and in no other way.”
The
plaintiff's case is a good example of a party wanting to pay on his
own terms, and not in terms of the stipulation in the contract. As
held in Ross
T Smyth & Co Ltd v TD Bailey, Sons Co
[1940] ALL ER 60 (HL), such conduct amounts to repudiation.
Consequently,
the plaintiff's contract was validly terminated after he breached
it from the outset and failed to remedy the breach during the grace
period accorded to him.
The
third defendant is therefore not a second purchaser because there was
no other agreement in force when his own contract of sale was
concluded.
The
plaintiff's claims that his contract be declared valid and
enforceable while that of the third defendant is declared null and
void are therefore dismissed.
All
the parties prayed for costs on a higher scale, and, during the
proceedings, they all made some justification for the higher scale.
The
plaintiff shall therefore pay the defendants' costs on the legal
practitioner and client scale.
