MUREMBA
J:
On 25 November 2014 the plaintiff issued summons for an order
compelling the first defendant to sign papers for the transfer of
stand numbers 285 and 286 Colne Valley Township held under Deeds of
Transfer numbers 1788/69 and 1688/69 in the plaintiff's favour.
The plaintiff also wants an order directing the second defendant to
process the envisaged transfer.
In
the declaration, the plaintiff said that in 2002, he entered into a
sale agreement in respect of these two stands with the first
defendant. The plaintiff says that he complied with all his
obligations, but when he wanted to have the stands registered in his
names the first defendant opposed the overture.
The
first defendant entered an appearance to defend the claim and later
filed a special plea to the effect that even if the plaintiff's
averment that he personally acquired rights in respect of the two
properties on 6 August 2002 was correct (although it is denied), the
consequent obligations owed to him by the first defendant were
extinguished after 3 years by reason of s 14 and 15 of the
Prescription Act [Chapter
8:11].
The first defendant's counsel argued that prescription begins to
run when the debt becomes due and a debt is due from the moment the
cause of action is complete i.e. when the facts from which the claim
arises have all occurred. To support his submission he cited the case
of Peebles
v Dairibord
Zimbabwe (Pvt) Ltd 1999
(1) ZLR 41 (H) at 44 H-45F. On this basis the first defendant prayed
for the dismissal of the plaintiff's claim. It is the issue of
prescription that I am supposed to determine.
In
opposing this special plea of prescription Mr Chikono
argued that in 2009 the plaintiff once had the two properties
registered in the name of his company, Humworthy Investments (Pvt)
Ltd. He argued that when the two properties were registered in the
plaintiff's company's name in 2009 transfer of ownership was
deemed to have been effected. He submitted that as such the debt had
been settled and prescription was no longer running.
It
is not in dispute that in 2009 the plaintiff had the two properties
registered in his company's name. The name of the company is
Humworthy Investments (Pvt) Ltd. It is also common cause that on 18
July 2011, the first defendant made an application in this court
under case number HC 6909/11 for the cancellation of the transfers of
the two immovable properties to Humworthy Investments (Pvt) Ltd which
application was granted on 27 October 2014.
Mr
Chikono
argued that during the time the properties were registered in the
name of the plaintiff's companies there was no cause of action as
both parties believed that the contract had been performed fully. He
submitted that the cause of action only arose after the nullification
of the title deed in 2014. Mr Chikono
argued
that the prescription period therefore started to run on the date
this court pronounced an order nullifying the registration of the
properties in the name of the company which is 27 October 2014. He
argued that from 27 October 2014 three years have not yet lapsed. Mr
Chikono's
argument gave the impression that the registration of the properties
which happened in 2009 had been done by the consent of the first
defendant and the plaintiff and that what caused the cancellation of
the registration of the properties in the name of Humworthy
Investments (Pvt) Ltd was that the properties had been wrongly
registered in the name of the plaintiff's company instead of the
plaintiff.
In
response the first defendant's counsel, Mr Ochieng
argued
that the plaintiff having signed the agreement of sale himself, he
could not have been mistaken as to the identity of the person who was
supposed to obtain transfer of the properties between himself and his
company. Mr Ochieng
further argued that the mistake of having the properties registered
in the name of the plaintiff's company in 2009 was completely
unreasonable and since it was a mistake as to the identity of the
creditor and not the debtor, it is therefore irrelevant to the
question of prescription. He submitted that that mistake did not
interrupt the running of prescription.
I
could not really appreciate why Mr Ochieng
was drawn into this argument about the properties having been
registered in the names of a wrong person. The argument made it
appear as if the transfers were cancelled on the basis that
registration had been wrongly made in favour of the plaintiff's
company instead of the plaintiff, yet this is not correct.
In
making the application for the cancellation of the transfers, the
first defendant averred in her affidavit that the plaintiff (Richard
Rudhanda) who claimed to represent her in terms of a power of
attorney in order to have the stands transferred into the name of
Humworthy Investments (Pvt) Ltd had used a forged power of attorney.
She averred that the stands were transferred without her knowledge
and consent. That registration and transfer of the properties had
been made in favour of the plaintiff's company instead of the
plaintiff was not the basis of the first defendant's application to
have the transfers cancelled. The file shows that the plaintiff
opposed the application arguing that the power of attorney was not
forged and that the transfers were done with the full knowledge and
consent of the first defendant. However, according to the submissions
made by the first defendant's counsel, which submissions were not
disputed by the plaintiff, the plaintiff later abandoned his
opposition of the application. On 27 October 2014, this court in
terms of s 8 of the Deeds Registries Act [Chapter
20:05],
granted an order cancelling the transfers of the two properties to
Humworthy Investments (Pvt) Ltd. The court order shows that on the
day it was granted the plaintiff was in attendance, but the court
order does not say that it was granted by consent.
In
the same court order, the court also ordered that its order be
submitted to the Prosecutor General by the Registrar of this court in
order that the Prosecutor General may decide whether or not there
should be a criminal investigation into the matter since the second
defendant had made allegations that the plaintiff had had the
transfers of the properties done fraudulently.
Considering
that the cancellation order was granted uncontested by the plaintiff,
I would therefore say that in a way the plaintiff made a concession
that he had had the transfers made to Humworthy Investments (Pvt) Ltd
without the knowledge and consent of the first defendant. So Mr
Chikono's
argument that the registration of the properties in the name of
Humworthy Investments (Pvt) Ltd in 2009 were a mistake common to both
parties is misplaced and misleading. The cancellation of the
transfers was not made on the basis that the properties had been
wrongly registered in the name of the plaintiff's company instead
of the plaintiff as an individual. In any case at law, a purchaser of
an immovable property is at liberty to have the purchased property
registered even in the name of a third party that he nominates. The
Deeds Registries Act does not say registration must only be made in
favour of the purchaser himself or herself. Registration of a
property in the name of a nominee would therefore not be a sound
reason for cancellation of registration.
Section
16(1) of the Prescription Act says that prescription shall commence
to run as soon as a debt is due. The crucial question in the present
matter is when did the debt become due? In other words when was
ownership supposed to be transferred from the seller (first
defendant) to the buyer (plaintiff)?
To
begin with, it must be realised that an agreement of sale is not an
agreement to transfer ownership. Mackeurtan Sale
of Goods in South Africa
at p1 states that there are 3 essential elements of a contract of
sale. They are (i) the agreement (consensus
ad idem)
(ii) the thing sold (merx)
and (iii) the price (pretium).
The parties enter into a contract with a view to exchange the thing
for a price. If the three elements are there, there is a sale.
Neither delivery nor the payment of the purchase price is necessary
for the creation of the contract. Delivery and payment fall within
the category of the performance of the contract.
A
contract of sale merely obliges the seller to pass vacou
possessio.
As a result, it is not a pre requisite of the contract of sale that
the seller be the owner of the merx.
In
other words a non-owner of a property can enter into a valid
agreement of sale. This means therefore that the signing of an
agreement of sale does not automatically result in ownership being
transferred to the buyer. Parties should therefore agree on when
transfer should be effected. If they agree on the date of transfer,
it is on that agreed date that the debt becomes due in terms of s 16
(1) of the Prescription Act. Prescription begins to run as from that
date as the seller (debtor) would have been placed in mora.
Looking
at the purported sale agreement which the plaintiff relies on which
forms part of file number HC 6909/11 which the parties referred me
to, there is no reference as to when ownership should have passed
from the seller to the buyer. The agreement only makes reference to
the issue of the seller (the first defendant) giving vacant
possession of the property to the buyer (the plaintiff) on or before
the date of transfer.
The
relevant clause reads,
“Occupation,
Risk and Profit
The seller shall give vacant
possession of the property on or before the date of transfer. Risk
and Profit shall pass on to the purchaser on the date of occupation
or transfer whichever is the earlier”
Other
than the above clause there is no other clause which deals with the
issue of transfer of ownership. It is clear from the above clause
that it does not say when exactly transfer of ownership should be
effected. In the absence of an agreed date of transfer of ownership,
the first defendant's submission that prescription began to run on
6 August 2002 cannot be said to be correct. It cannot be correct
because the debtor who is the seller was never placed in mora.
The seller was never made aware that she was now supposed to effect
transfer of ownership. It is wrong to say that since the parties
signed the agreement of sale on 6 August 2002 therefore the seller
should have passed ownership with effect from that date and that as
such prescription began to run from that date. There is no basis for
making that averment. In order for prescription to begin to run there
is need for the creditor to place the debtor in mora
first.
In Asharia
v
Patel & others
1991 (2) ZLR 276 (SC) at p280 GUBBAY CJ said
“The
general applicable rule is that where time for performance has not
been agreed upon by the parties, performance is due immediately on
conclusion of their contract or as soon thereafter as is reasonably
possible in the circumstances. But the debtor does not fall into mora
ipso facto if he fails
to perform forthwith or within a reasonable time. He must know that
he has to perform. This form of mora,
known as mora ex
persona,
only arises if, after a demand has been made calling upon the debtor
to perform by a specified date, he is still in default. The demand,
or interpellatio,
may be made either judicially by means of a summons or
extra-judicially by means of a letter of demand or even orally; and
to be valid it must allow the debtor a reasonable opportunity to
perform by stipulating a period for performance which is not
unreasonable. If unreasonable, the demand is ineffective.”
In
the circumstances of this case whereby the parties did not make it
clear in the agreement of sale when transfer was supposed to be made,
the purchaser should have placed the seller in mora
by
demanding transfer of the properties. After the demand for transfer,
prescription would have begun to run from the date the parties agreed
transfer should be effected. That date would have been the date when
the debt became due.
The
papers before me do not say when plaintiff demanded transfer of
ownership of the two properties, but it is common cause that in 2009
the plaintiff had transfer of ownership effected in the name of his
company, although the registrations were later cancelled by this
court on 27 October 2014.
The
first defendant having averred that her properties were transferred
fraudulently without her knowledge and consent and obtained judgment
in her favour cancelling the registrations, I will completely
disregard the whole period when the two properties were registered in
Humworthy Investments (Pvt) Ltd's name. Since the transfers were
said to have been done fraudulently, I will take that period as a
non-event, as if no transfer of ownership ever happened.
As
I have already stated, following the agreement of sale the purchaser
(plaintiff) ought to have demanded transfer of ownership from the
seller (first defendant) thereby placing the debtor (first defendant)
in mora.
Although the plaintiff in his summons says that he demanded transfer
of ownership, nothing in the papers shows when this demand for
transfer was done. With this, the court cannot tell when prescription
began to run.
Submissions
were made by the first defendant to the effect that the agreement of
sale that the plaintiff is relying on is fraudulent. It must be
noted that the court order of 27 October 2014 only nullified the
transfers of ownership which were allegedly done fraudulently, but it
did not cancel the purported agreement of sale of 2002. I must point
out that I am not here to decide on the authenticity or otherwise of
the agreement of sale, but the special plea of prescription. So I
will not delve into that issue. It is an issue which should be
determined by the court which will deal with the issue of transfer of
ownership of the properties from the first defendant to the
plaintiff.
In
the absence of evidence showing when exactly the first defendant was
placed in mora
by the plaintiff for transfer of ownership of the properties from the
first defendant to the plaintiff, I am not inclined to grant the
first defendant's special plea.
In
the result, it be and is hereby ordered that:
-
The
special plea of prescription raised by the first defendant is
dismissed.
-
The
first defendant is to pay costs.
Ngarava,
Moyo, Chikono,
plaintiff's legal practitioners
Wintertons,
1st
defendant's legal practitioners
