MAKONI
JA:
This
is an appeal against the whole judgment of the High Court declaring
the agreement of sale between the appellant and the respondents valid
and binding on the basis that the appellant had the requisite mental
capacity to contract and granting the consequential relief of
eviction of the appellant.
FACTUAL
BACKGROUND
Prior
to 26 January 2006 the appellant had rights and interest, in a
property called Flat 46, Block 13 Odzi Flats, Eastlea, Harare (“the
property”). She instructed Fingold Real Estate (Fingold) to sell
the property on her behalf. An advertisement of the sale of the
property was published in the Herald newspaper by Fingold, prompting
one Abel Murape, the first respondent's father, who acted as the
respondents' agent, to engage with Fingold regarding the sale.
The
respondents are husband and wife.
The
engagement resulted in an agreement of sale between the appellant and
the respondents, wherein the appellant sold her rights and interest
in the property to the respondents. The agreement of sale was reduced
to writing and duly signed by the appellant and Abel Murape before
the estate agent and two witnesses on 26 January 2006.
It
is not in dispute that the full purchase price of ($1,950,000,000.00)
one billion nine hundred and fifty million Zimbabwean dollars was
paid in full on the date of signature of the agreement. It was paid
through Fingold, and of that amount the appellant withdrew fifty
million ($50,000,000.00).
Thereafter,
the appellant together with Abel Murape, proceeded to the Ministry of
Local Government and National Housing (The Ministry) for confirmation
that the purchase price had been paid in full. As the property had no
title deeds the parties proceeded to the City of Harare offices to
effect cession from the appellant into the respondents' names.
A
few days later, on 30 January 2006, and before the respondents had
taken occupation, the appellant wrote a letter to the Fingold
cancelling the agreement of sale. The appellant indicated that the
money paid towards the purchase price, was of no use to her. This was
done notwithstanding the fact that the appellant had already
withdrawn part of the money that had been paid for the property for
her own use.
The
respondents, on 5 March 2006, instituted proceedings in the court a
quo seeking a declaratur that the agreement entered into between the
parties was valid, the eviction of the appellant from the property
and costs of suit.
The
appellant resisted the claim on the basis that, at the material time
that she entered into the agreement of sale, she did not have the
requisite mental capacity to contract. She pleaded in the following
terms;
“1.
At the material time the Defendant did not have the requisite mental
capacity to enter into an Agreement of Sale since she suffers from
psychiatric problems. As such, the Agreement of Sale is null and
void.”
Thereafter
the matter was referred to trial.
PROCEEDINGS
IN THE COURT A QUO
One
of the issues for determination at trial was whether or not the
appellant had capacity to enter into a valid contract.
The
appellant adduced evidence from two witnesses. The first witness was
one Bothwell Tawanda Chinenguo (Bothwell), son to the appellant and
the second witness was Dr Sekai Nhiwatiwa, a medical doctor
specialising in psychiatry.
Bothwell
gave the following evidence.
He
was appointed curator ad litem of the appellant on 22 September 2016.
The appellant was mentally ill and he would occasionally take her for
treatment. It was because of the mental illness that the appellant
left her employment around 2001. He claimed that the respondents took
advantage of appellant's mental condition in buying the property at
a value below the market price as the property was sold at a time
when the country was facing hyperinflation. He could not comment on
the appellant's state of mind at the time of the sale as he was at
a boarding school.
Dr
Sekai Nhiwatiwa testified that she treated the appellant from 2005.
She found that the appellant suffers from 'bipolar affective
disorder' the effects of which include impairment of judgment. She
stated that if a patient takes her medicine properly, she could have
lucid intervals and could work as a professional such as a lawyer or
a doctor. She however conceded that she could not, with certainty,
state that the appellant was not lucid in January 2006 when she sold
the house as she neither examined the appellant nor stayed with her.
She further highlighted that the letter she had written at the time
the appellant sold her property, that she was mentally incapacitated,
was at the request of the appellant's son.
No
medical records were availed to the court to substantiate her
averments.
The
respondents' case was led by two witnesses namely the first
respondent and Abel Murape. The first respondent was not directly
involved in the transaction thus he could not comment on the mental
state of the appellant as the contract was concluded by his father on
his and his wife's behalf.
Abel
Murape, who interacted with the appellant and with whom the appellant
concluded the agreement of sale, gave the following evidence.
The
appellant did not show any signs of mental incapacitation during and
after the sale. He accompanied the appellant to the Ministry of Local
Government and National Housing and to the Municipal offices in order
to effect transfer of the property. The appellant wanted to opt out
of the contract because she had, unsuccessfully, requested a top up
of the purchase price after she had withdrawn part of the money from
her estate agents.
DETERMINATION
OF THE COURT A QUO
The
court a quo found that the appellant had failed to discharge the onus
placed on her by law to prove that she did not have the requisite
mental capacity to contract. The court a quo also concluded that no
evidence had been led to show that the appellant exhibited signs of
mental illness at the time the agreement was signed, on 26 January
2006.
It
further found that the evidence of the expert witness was not
sufficient to prove that, at the material time, the appellant was
mentally ill. Instead her testimony was that if the appellant took
her medication daily, she would be sane. She could not dispute that
the appellant might have had a lucid interval at the time the
agreement of sale was entered into.
The
court a quo found as insufficient the evidence of the appellant's
son who testified that the appellant was mentally ill at the time of
contracting. Its reasoning was that when the property was sold, the
son was away at a boarding school and could not therefore comment,
with certainty, on the mental state of the appellant at the material
time.
Further,
it found that there was no evidence to prove that the property was
undervalued at the time that it was sold. As such, the argument
advanced for the appellant that the respondents took advantage of the
appellant to purchase the property for a sum less than its open
market value could not be sustained.
The
court a quo also reasoned that the appellant was not detained at a
mental institution when she signed the agreement. Additionally, no
evidence was led by persons staying with, or neighbours of the
appellant from the time of advertisement of the sale to the time of
signing of the agreement, on her mental state.
The
court believed the testimony of Abel Murape, who interacted with the
appellant at the material time, that the appellant did not exhibit
signs of mental illness. Thus the court a quo found, as a matter of
fact, that the appellant had the mental capacity to contract.
GROUNDS
OF APPEAL
Aggrieved
by this decision, the appellant noted the present appeal on the
following grounds:
1.
The court a quo erred and misdirected itself by failing to appreciate
that the defendant lacked the requisite mental capacity to enter into
an agreement of sale since she suffers from psychiatric illness and
does not appreciate and understand the contractual obligations (sic).
2.
The court a quo erred and misdirected itself on a point of law by
failing to appreciate that a contract that was entered into by a
person who lacked mental capacity to transact was null and void and
of no force and effect.
3.
The court a quo erred and misdirected itself granting an order for
ejectment against the defendant and all those claiming occupation
through her despite the fact that the agreement was contracted by a
person who was suffering from a mental illness or incapacity at the
time of contracting.
4.
The court a quo erred and misdirected itself on points of law by
failing to appreciate that the defendant at the time of the contract
did not appreciate what was going on in her world of living and could
not be accountable for her action whatsoever. As such, the court
misdirected that by ordering that the respondents are entitled to
cession of right, title and interest in Flat No 46 Block 13 Odzi
Flats, Eastlea, Harare.
5.
The court a quo erred and misdirected itself by ordering that the
defendant shall pay costs of suit.
SUBMISSIONS
BEFORE THIS COURT
Counsel
for the appellant, Mr Madhuku, submitted that the court a quo's
misdirection was twofold. Firstly, the court acted on a wrong
principle and secondly it allowed irrelevant factors to guide it in
determining whether or not the appellant was compos mentis at the
time of the sale. As regards the contention that the court a quo
acted on a wrong principle, Mr Madhuku contended that the court ought
to have considered the appellant's medical history in determining
the appellant's mental state rather than consider external
manifestations exhibited by the appellant, at the time of signing the
agreement of sale. He cited the Executive Hotel (Pvt) Ltd v Bennett
NO 2007 (1) ZLR 343 (S) as authority for this proposition.
He
submitted that the court a quo was totally unaware of the three
principles set out in the Executive Hotel case supra. Such failure
was a misdirection. It erred when it ignored the evidence of the
curator and the expert witness yet such evidence was sufficient for
the court to determine, on a balance of probabilities, that the
appellant lacked the requisite mental capacity to contract at the
time of sale.
Regarding
the second contention that the court a quo considered extraneous or
irrelevant factors, Mr Madhuku stated as follows;
The
court erred in relying on the outward behaviour of the appellant
which was misleading because it could be an expression of delusions
caused by mental illness. Compos mentis is a matter of fact and the
test is subjective. The court is required to determine the condition
of the state of mind of the contracting party whose capacity is at
issue. That the appellant approached the estate agents and caused the
advertisement for the sale of the property to be published,
accompanied Abel Murape to the Ministry of Local Government and
National Housing, to the City of Harare offices and that she withdrew
part of the money was irrelevant in determining the appellant's
state of mind.
Similarly,
the evidence of the estate agent or the two witnesses who signed the
agreement of sale, or the persons staying with or neighbours of the
appellant during the relevant time could not have been decisive of
the question of fact, that is, whether the appellant was mentally
incapacitated.
Per
contra, Mr Sadowera, for the respondents, argued that the court a quo
took into account all relevant factors including the appellant's
medical history in determining whether the appellant was compos
mentis at the time of signing the agreement of sale. He argued, as a
matter of fact, that no medical records were availed to the court
except for the letters written by Dr Nhiwatiwa at the request of the
curator to the effect that the appellant was mentally incapacitated
at the time she entered into the contract. These letters could not be
relied on as they were influenced by the appellant's son. In one of
the letters, Dr Nhiwatiwa proceeded to comment on the circumstances
surrounding the signing of the agreement of sale, thereby exceeding
her bounds.
Mr
Sadowera further submitted that Dr Nhiwatiwa's evidence was not
credible in that whilst she conceded that the appellant could have
lucid intervals, she did not examine the appellant at about the time
the agreement of sale was signed. The curator's evidence also could
not be relied on as he was not present at the time the agreement of
sale was concluded. Thus he contended that the court was correct in
relying on the evidence of Abel Murape who interacted with the
appellant at the time the agreement of sale was signed.
Counsel
also asserted that in the Executive Hotel case supra, the court took
into account several factors such as evidence adduced in a meeting in
which the appellant attended, the terms of the agreement itself
together with the appellant's medical history. He insisted that the
decision of the court a quo could not be assailed as the court
analysed the witnesses' evidence carefully and correctly applied
the principles set out in the Executive Hotel case supra to the case
before it.
ISSUE
FOR DETERMINATION
Although
the appeal raises various grounds, only one issue arises for
determination in this appeal which is whether or not the appellant
had the mental capacity to contract at the material time.
THE
LAW
The
law relating to whether a person has the mental capacity to contract
is now settled. It was succinctly captured in Executive Hotel (Pvt)
Ltd v Bennett NO supra where the court quoted with approval the
remarks in Pheasant v Warne 1922 AD 481 at p 488 where it was held
that:
“…
a
court of law called upon to decide a question of contractual
liability depending upon mental capacity must determine whether the
person concerned was or was not at the time capable of managing the
particular affair in question – that is to say whether his mind was
such that he could understand and appreciate the transaction into
which he purported to enter.”
At
p 351 A-B the court, in that case, summarised the tests to be
considered in determining the existence or otherwise of compos mentis
as follows:
“1.
Was the state of mind of the contracting party whose capacity is at
issue such that he was incapable of estimating what was or what was
not a fair and beneficial bargain?;
2.
Was the state of mind of the contracting party whose capacity is at
issue such as would in common honesty not make him liable or
responsible for such act or contract?; and
3.
Whether the contracting party whose capacity is at issue was of such
unsound mind as to be incapable of understanding and appreciating the
transaction into which he purported to enter.”
The
court, further down on the same page, at para C, remarked:
“Prof
Christie, in his book The Law of Contract in South Africa 3ed,
commented on these three tests for determining the capacity of
contracting parties and makes the following observation:
'Remembering
that the fundamental question is whether there was consensus, and
that a negative answer to that question has the drastic result of
making the contract void ab initio, the first of three tests –
inability to weigh up a bargain – seems too lenient because such
inability is consistent with mere stupidity, which is not enough.
The
second test, with its reference to common honesty, is a useful
reminder of the policy of the law to protect the insane at the
expense of other parties to contracts.
The
third test accords with that laid down by INNES CJ in Pheasant v
Warne 1922 AD 481 at 488: … [quoted above]. This is the test which,
with slight variations of wording, has been applied in most of the
cases. But it is not exclusive of other tests …'”
It
follows that where these requirements are absent, no consequences
flow from the purported contract. This is for the reason that where
capacity to contract is lacking, the resultant transaction is void
for want of capacity.
Voet,
as quoted in The Law of South Africa by Sir J.W. Wessels Vol 1 2nd Ed
at p 226 says:
“Every
act of a lunatic is null and void as having been done by a person
deprived of reason.”
See
also Lange v Lange 1945 AD 332 at p 341.
It
is settled law that the onus of proving that a transaction is invalid
for want of mental capacity rests on the party alleging it. See
Pheasant v Warne supra at p 482.
The
inquiry into the mental state of a contracting party is a matter of
fact to be decided by the court. See Blamire's Executrix v Milner
and Wirsing 1969 NLR 39.
It
is also settled law that when a subordinate court makes a finding of
fact, an Appellate Court is slow to upset that finding unless that
decision is grossly unreasonable. This point was underscored in ZINWA
v Mwoyounotsva SC28/15 where the court had occasion to comment thus:
“It
is settled that an Appellate Court will not interfere with factual
findings made by a lower court unless those findings were grossly
unreasonable in the sense that no reasonable tribunal applying its
mind to the same facts would have arrived at the same conclusion; or
that the court had taken leave of its senses; or, put otherwise, the
decision is so outrageous in its defiance of logic that no sensible
person who had applied his mind to the question to be decided could
have arrived at it, or that the decision was clearly wrong.”
For
this Court to set aside the decision of the court a quo, the
appellant must demonstrate that the court a quo made such an
outrageous decision that no other right minded tribunal in the same
circumstances could have made. It is not enough to merely establish
that another court would have arrived at a different conclusion on
the same set of facts. One must go beyond that to prove that the
court making the decision had taken leave of its senses when it made
the decision.
This
time honoured principle of law was ably laid down in Hama v NZR 1996
(1) ZLR 664 (S) as follows:
“In
other words, the decision must have been irrational, in the sense of
being outrageous in its defiance of logic or of accepted moral
standards that no sensible person who applied his mind to the
question could have arrived at such a conclusion.”
It
becomes imperative to assess the evidence and facts placed before the
court a quo to determine whether or not the decision of the court a
quo that the appellant had the requisite mental capacity to contract
was irrational.
APPLICATION
OF THE LAW TO THE FACTS
The
court a quo found the evidence of the two witnesses led by the
appellant insufficient for it to make a determination that the
appellant was not compos mentis when she concluded the agreement of
sale. This is in light of the concession by Dr Nhiwatiwa that the
appellant could have lucid intervals, if she effectively managed her
medication.
It
is only the persons who transacted or interacted with the appellant
who could have observed the appellant's behaviour at the material
time to determine whether or not the appellant was mentally capable
of transacting at that time.
Abel
Murape who transacted with the appellant gave evidence, which the
court deemed truthful, that the appellant was compos mentis at the
time the agreement was signed. This evidence was uncontroverted.
The
learned author Sir J.W. Wessels supra in paragraph 698 at p226
observes:
“If
a person normally a lunatic does an act, the presumption is that the
act is void, but if it can be shown that he did it during a lucid
interval, it will be valid.C.4.38.2; Estate Rehne v Rehne, 1930 O.P.D
80.”
The
court a quo's decision cannot, therefore, be faulted.
The
judgment of the court a quo reflects that the learned judge was alive
to the principles that ought to be applied when determining whether a
party had no capacity to contract by reason of mental illness. I do
not find Mr Madhuku's contention that the court overlooked the
appellant's medical history persuasive. The court considered the
evidence of Dr Nhiwatiwa and correctly discounted it. It is
significant to note that no medical records were placed before the
court, to establish the medical history of the appellant, except for
letters which were drawn at the request of the appellant's son. In
one of the letters dated 20 January 2010 the Doctor stated the
following:
“I
have been looking after the above named lady for over ten years now.
When she sold her house in 2006 she was psychotic and did not know
what she was doing. I believe the house was sold below market value.
The buyer at some point knew that Muchaneta was ill but proceeded
with the deal anyway. If a detailed report is needed I need time to
complete it.”
She
conceded, during her testimony, that she did not have independent
knowledge of the facts surrounding the agreement of sale as she
neither examined the appellant nor lived with her. The court a quo
cannot therefore be faulted for discounting her evidence.
Whilst
medical history is vital in determining whether or not one is compos
mentis, at the material time of signing of the agreement, other
factors surrounding the transaction must equally be considered. R H
Christie supra at p 274 puts it this way:
“Because
of the nature of the enquiry it will usually be necessary to draw
inferences from the evidence, including evidence of the nature of the
contract and the circumstances surrounding its making.”
One
such factor is the letter written by the appellant to Fingold
purportedly cancelling the agreement of sale.
It
is common cause that the appellant authored the letter four days
after the agreement of sale had been concluded and after she had
withdrawn part of the purchase price. Its coherence cannot be
overlooked. The relevant part reads as follows:
“…
The
Manager Fingold Eastate Agent
Dear
Sir/Madam
Cancellation
of an Agreement of Sale
I
am cancelling this Agreement of Sale because the money is of no use
to me. I am cancelling the sell. Yours faithful M Chatambudza …
cc:
Ministry of Local Govt and Housing”
It
is evident that the intention to invalidate the agreement of sale was
clearly put across. She had the mind to even copy the letter to the
responsible Ministry. It boggles the mind as to how the appellant was
able to write such a logical letter if she was not compos mentis.
It
appears to me that the decision by the appellant to cancel the
agreement was simply an afterthought, having failed to get a top up
on the purchase price.
Further,
a step by step exercise of the test laid out in Executive Hotel case
supra will show that the appellant's case fell short of that
standard.
(a)
Firstly, there was nothing placed before the court a quo to suggest
that the appellant had no idea of what a fair and beneficial bargain
would be. It was incumbent upon the appellant to demonstrate that she
did not have the capacity to estimate what a fair and beneficial
bargain would have been in the circumstances. An estimate of the
market value of the property at the time it was sold and the purchase
price that was paid would be one such factor that would establish the
lack of capacity to fairly bargain for herself. No evidence was led
to that effect.
(b)
Secondly, it was not proven that the appellant's state of mind, at
that time, would in common honesty not make her liable or responsible
for such act or contract. She had the mind to engage estate agents.
She appreciated that they had to go to the relevant Ministry and
other departments to effect the transfer of the property. The
appellant's conduct does not justify a finding exempting her from
liability. To the contrary, her conduct reasonably suggests that she
was responsible for her conduct.
(c)
Thirdly, there is nothing to suggest that the appellant was incapable
of understanding and appreciating the transaction to which she was a
party. None of the terms of the agreement of sale was criticised as
being unreasonable such that it can be said that the agreement was
not the kind of agreement which an ordinary mentally lucid person
would have concluded. As already alluded to above, she appreciated
that she had to visit various offices to effect the transfer in terms
of the agreement.
DISPOSITION
In
the result, I find that the decision of the court a quo that the
appellant had the requisite capacity to contract cannot be assailed.
The appellant is challenging a factual finding of the court a quo.
She has not demonstrated that the court a quo acted irrationally,
illogically or unreasonably.
Accordingly,
the appeal has no merit and must be dismissed.
The
respondents had prayed for costs on a punitive scale on the basis
that there is an element of harassment of the respondents taking into
account the manner in which the appellant has conducted her case from
the beginning.
However
at the commencement of the hearing Mr Madhuku advised the court that
he was representing the appellant in forma pauperis.
In
view of that Mr Sadowera did not persist with the issue of costs on
the punitive scale. He proposed that each party bears its own costs.
In
the result, I make the following order;
“The
appeal be and is hereby dismissed with each party to bear its own
costs.”
GWAUNZA:
DCJ
GARWE:
JA
Lovemore
Madhuku Lawyers, appellant's legal practitioners
Tadiwa
& Associates, respondent's legal practitioners.
