MALABA
CJ:
This
is an appeal against the whole judgment of the High Court (“the
court a
quo”)
holding that the first respondent had complied with the provisions of
the Contractual Penalties Act [Chapter
8:04]
(“the Contractual Penalties Act”) in sending a notice of
cancellation of an agreement to the appellants by registered post.
The
Court holds that the delivery of a registered mail slip at the
appellants chosen domicilium
citandi
constituted due delivery as contemplated by section 8(3)(b) of the
Contractual Penalties Act, and as provided for in the parties
agreement.
It
was not necessary for the document containing the written notice to
be delivered to the appellants. Once there was delivery of the
registered mail slip then there was delivery of the notice in the
same manner as when one is given keys to a house or motor vehicle.
FACTUAL
BACKGROUND
On
24 February 2015 the appellants and the first respondent entered into
an agreement of sale (“the agreement”), in terms of which the
first respondent sold to the appellants a vacant piece of land
described as stand number 321 being a subdivision of Marconi Farm of
Kinvara, held under Deed of Transfer number 1136/2002 (“the
property”).
The
purchase price of the property was pegged at US$30,000.
A
deposit of US$15,000 was to be paid in instalments. The first
US$10,000 towards the deposit was to be paid upon the signing of the
agreement. The balance of the deposit of US$5,000 was to be paid in
instalments of US$1,666.67 for a period of three months starting from
30 April 2015. The remaining balance of the purchase price of
US$15,000 was to be paid over a period of eighteen months. That
balance of the purchase price was to attract interest at the rate of
20% per annum.
Possession
of the property was to be given to the purchaser upon payment of 50%
of the purchase price.
It
was further agreed between the parties that if the purchaser failed
to perform any of the obligations under the agreement and failed to
rectify such breach within thirty days of dispatch by the seller of
written notice of such breach by registered post or hand delivery,
the seller would have the right to cancel the agreement.
It
was further agreed that in such circumstances the seller would regain
possession of the property and claim damages by way of a cancellation
fee in the sum of US$2,000 subject to compliance with the provisions
of the Contractual Penalties Act, or claim specific performance in
terms of the agreement with interest at the rate of 20% per annum.
Pursuant
to the agreement, the appellants took possession of the property.
In
breach of the terms of the agreement the appellants failed to pay
some of the instalments of the purchase price when they became due
for payment. Consequently, the first respondent cancelled the
agreement.
The
cancellation resulted in the appellants instituting summons in the
court a
quo.
They contended that, contrary to the terms of the agreement of sale,
there was no thirty day notice given by the first respondent to
enable them to rectify the breach.
The
allegation was that the first respondent's conduct was in violation
of the terms of the agreement.
The
appellants sought an order from the court a
quo
declaring the cancellation of the agreement to be invalid. They also
asked the court a
quo
to order the first respondent to accept payment of the arrear
instalments together with interest thereon. Lastly, they sought an
order compelling the first respondent to sign all documents necessary
for the transfer to themselves of the property.
The
first respondent filed a plea and a counter-claim in response to the
appellants claim.
In
the counter-claim, the first respondent averred that the appellants
breached the agreement when they defaulted on the payment of
instalments towards the purchase price for the property when the
payment became due. As at 31 October 2017 they had accrued arrears in
the sum of US$24,194.04.
The
first respondent further contended that, acting in terms of clause 11
of the agreement, it notified the appellants of the breach through a
letter which was served on them via registered mail on 20 November
2017.
The
allegation was that the appellants did not rectify the breach,
leading to the first respondent cancelling the agreement on 30
October 2018 through a letter which was again served on the
appellants via registered mail.
The
first respondent prayed for the confirmation of the cancellation of
the agreement, eviction of the appellants from the property, the
payment of US$2,000 as cancellation fee, payment of holding over
damages of US$600 per month, and costs of suit.
In
response to the counter-claim, the appellants denied all the
averments made by the first respondent. They alleged that the notice
of breach of the agreement given by the first respondent did not
comply with the requirements of the contract between the parties. The
appellants accepted that they had breached the agreement by failing
to pay the instalments when they became due and payable.
The
matter proceeded by way of a stated case.
The
agreed facts were that the appellants had defaulted in the payment of
the instalments and had fallen into arrears in the amount of
US$24,194.04. It was agreed that, consequent upon the breach of the
agreement between the parties, the first respondent dispatched a
letter by registered post to the appellants domicilium
citandi
on 20 November 2017 giving them thirty days notice of intention to
cancel the agreement.
The
parties also agreed that on 15 December 2017, and prior to the
expiration of the thirty days notice period, the first respondent
dispatched another letter by registered post, purportedly cancelling
the agreement.
The
appellants had moved from the domicilium
citandi
without notifying the first respondent. As a result, the registered
mail remained unclaimed at the Post Office until it was returned to
the first respondent on 11 April 2018.
The
parties were in agreement that on 26 October 2018 the first
respondent sent another letter to the appellants, advising them to
disregard the letter of 15 December 2017 and to consider the letter
of 26 October 2018 as the final cancellation letter.
Notwithstanding
the letter of 26 October 2018, and in an attempt to remedy the breach
of the agreement, the appellants paid into the first respondent's
bank account the sum of US$12,960 on 20 November 2018. They
subsequently made payments of US$14,138.20 and US$3,780 on 7 and 9
January 2019 respectively.
The
payments were not received because the first respondent had closed
the bank account.
The
parties agreed that there was one issue for determination. They
couched it as being:
“Whether
or not the provisions of the Contractual Penalties Act [Chapter
8:04],
in particular section 8(2) as read with section 8(3)(b) that entitles
a debtor to a written notice before a credit provider institutes
action, requires the debtor to actually receive the notice.”
The
court a
quo
found that in sending by registered post the notice to the appellants
to rectify breach of the agreement within the prescribed period the
first respondent had complied with the legal obligation under the
agreement of sale. It held that there was compliance with section
8(3)(b) of the Contractual Penalties Act.
The
appellants claim was dismissed with costs.
Aggrieved
by the decision of the court a
quo,
the appellants noted the present appeal. The issue for determination
is whether the holding by the court a
quo
that the delivery of the registered mail slip at the domicilium
citandi
was service on the appellants of the notice of breach of the
agreement of sale in terms of section 8(3)(b) of the Contractual
Penalties Act was correct.
The
appellants argued that what was delivered at the domicilium
citandi
was
not the package containing the written notice itself.
As
regards the legal consequences of the delivery, counsel referred the
Court to section 40(1) of the Interpretation Act [Chapter
1:01]
(“the Interpretation Act”).
Counsel
for the appellants argued that section 40(1) of the Interpretation
Act regulates the interpretation of section 8(3)(b) of the
Contractual Penalties Act, which deals with the delivery of
registered mail.
It
was further submitted that section 40(1) of the Interpretation Act
envisages a situation where the document with the written notice is
delivered rather than the registered mail slip. He further asserted
that the provisions of section 8(3)(b) of the Contractual Penalties
Act do not depart in principle from those of section 40(1) of the
Interpretation Act.
He
also submitted that section 8(3)(b) of the Contractual Penalties Act
must be read together with section 40(1) of the Interpretation Act.
The
argument was that there was no compliance with section 8(3)(b) of the
Contractual Penalties Act.
Counsel
for the first respondent argued that it was common cause that the
registered mail slip was delivered at the appellants domicilium
citandi.
He
argued that the obligations under section 8(3)(b) of the Contractual
Penalties Act were discharged by the first respondent.
Counsel
further asserted that the first respondent did not have the
additional obligation to ensure that the appellants collected the
registered mail from the Post Office.
Counsel
for the first respondent further stated that, contrary to the terms
of the agreement, the appellants had vacated their chosen domicilium
citandi
without informing the first respondent. He argued that, while the
appellants claimed not to have seen the registered mail slip, they
had admitted receipt of a process sent in the same way subsequent to
the delivery of the registered mail
slip.
THE
LAW AND THE FACTS
The
question is whether the court a
quo
was correct in holding that the delivery of the registered
mail
slip at the appellants domicilium
citandi
constituted service of the written notice of breach of the agreement
between the parties in terms of section 8(3)(b) of the Contractual
Penalties Act. The court a
quo
said at pp9 and 10 of the judgment:
“The
first defendant served the notice in terms of the parties agreement.
Paragraph 15 of that agreement gave either party's chosen
domicilium
citandi
and 268/64 Chiltern Road, Waterfalls was the plaintiffs chosen
domicilium.
The
parties had also indicated in the agreement that any variations or
changes to the contract should be in writing and signed by both
parties. It is in that same contract that the parties agreed on their
respective domicilium
for the purpose of receiving any correspondence. There was no
variation or change to this.
…
A
chosen domicilium
citandi
denotes where a party to a contract desires to receive whatever
communication that is in relation to issues to do with such contract.
It
follows therefore that one's residential address need not be one's
chosen domicilium.
A
party may choose such domicilium
based on where they regard as the most convenient place to receive
legal notices and, should that change, it is to be expected that such
party will duly notify those likely to be sending such notice,
otherwise the whole concept of choosing a domicilium
citandi
loses meaning.
It
is in this context that one must interpret the provisions of section
8(3)(b) of the Act.
I
am therefore persuaded by Mr
Nyahuma's
argument that when the notice dated 17 November 2017 was sent by
registered post to the purchaser's chosen domicilium
citandi,
the first defendant was complying with the exigencies of the
provisions of section 8(3)(b).”
Choosing
a
domicilium
citandi
has specific legal consequences such as -
(i)
The party who elected the domicilium
citandi
should be ready to receive any legal notice that is delivered to that
address;
(ii)
If a change in address occurs, a party should notify the other
contracting party, preferably in writing, of such a change in
address; and
(iii)
Delivery of a legal notice or document to the domicilium
citandi
chosen by a party to a contract will be considered sufficient for the
purposes of legal action and such party would be deemed to have
received the legal notice or document.
Section
8 of the Contractual Penalties Act provides as follows:
“8
Restriction of sellers rights
(1)
No seller under an instalment sale of land may, on account of any
breach of contract by the purchaser —
(a)
enforce a penalty stipulation or a provision for the accelerated
payment of the purchase price; or
(b)
terminate the contract; or
(c)
institute any proceedings for damages;
unless
he has given notice in terms of subsection (2) and the period of the
notice has expired without the breach being remedied, rectified or
discontinued, as the case may be.
(2)
Notice for the purposes of subsection (1) shall —
(a)
be given in writing to the purchaser; and
(b)
advise the purchaser of the breach concerned; and
(c)
call upon the purchaser to remedy, rectify or desist from continuing,
as the case may be, the breach concerned within a reasonable period
specified in the notice, which period shall not be less than —
(i)
the period fixed for the purpose in the instalment sale of the land
concerned; or
(ii)
thirty days;
whichever
is the longer period.
(3)
Without derogation from section 40 of the Interpretation Act [Chapter
1:01],
a notice shall be regarded as having been duly given to the purchaser
for the purposes of subsection (1) —
(a)
if it has been delivered to the purchaser personally or to an agent
chosen by the purchaser for the purpose of receiving such notices; or
(b)
if it has been posted by registered post to the address chosen by the
purchaser for the delivery of correspondence or legal documents
relating to the instalment sale of land concerned or, in the absence
thereof, to the purchaser's usual or last known place of residence
or business.”
Section
40(1) of the Interpretation Act provides as follows:
“40
Service of documents
(1)
Where an enactment authorises or requires a document to be served by
post, and where the word 'serve' or any of the words 'give'
'deliver' or 'send' or any other word is used, the
service of the document may be effected by prepaying, registering and
posting an envelope addressed to the person on whom the document is
to be served at his usual or last-known place of abode or business,
and containing such document,
and, unless the contrary is proved, the document shall be deemed to
have been served at the time at which such envelope would have been
delivered in the ordinary course of post.” (the underlining is for
emphasis)
Parties
to a contract are allowed the discretion to choose different forms of
delivery of documents or legal notices that relate to the contractual
relationship.
The
parties elected to use the registered mail system as a mode of
delivery. Because they chose this mode of delivery of documents
relating to the contractual relationship, it meant that they agreed
to be bound by it.
The
law of service of documents by registered post prescribes a procedure
for ensuring effective service. The procedure entails that the
registered article, such as an envelope containing the document
concerned and bearing the name of the addressee and place where the
mail is to be delivered, be deposited by the originator or sender at
a Post Office. The registered article must be accepted and its
receipt as a registered item acknowledged.
Using
the internal system of ensuring the security of registered mail, the
Post Office concerned conveys the registered article to the branch
nearest to the address on the registered item. The branch of the Post
Office in possession of the registered item issues out a registered
mail slip directed at the address on the registered article,
notifying the person whose name appears as the addressee of the
availability of the registered item at the Post Office for
collection.
The
registered item becomes capable of retrieval by the addressee from
the Post Office. Delivery of the registered mail slip at the address
appearing on the registered article constitutes effective service of
the registered mail. The collection of the registered item from the
Post Office is the responsibility of the addressee.
The
South African case of Kubaya
v Standard Bank of South Africa Ltd
[2014] ZACC 1 sets out at para 48 a standard practice of the Post
Office on the conveyance and delivery of registered mail similar to
that prevailing in Zimbabwe. The court said:
“It
is so that section 96(1) requires that notices be delivered 'at the
address' provided by the recipient. However, this requirement must
be understood with due regard to the practical aspects of dispatching
a notice by way of registered mail. When a credit provider dispatches
a notice in that manner, the notice is sent to a particular branch of
the Post Office. That branch then sends a notification to the
consumer, indicating that a registered item is available for
collection. It is never the case that an item dispatched by
registered mail will physically be delivered to an individual –
such delivery only occurs if the item is sent by ordinary mail, which
does not suffice for purposes of sections 129 and 130 of the Act. If
a consumer elects not to respond to the notification from the Post
Office, despite the fact that she is able to do so, it does not lie
in her mouth to claim that the credit provider has failed to
discharge its statutory obligation to effect delivery.”
Where
a party to a contract has chosen an address as a domicilium
citandi
where service of documents or correspondence on matters relating to
the contract should be effected and has selected the registered mail
as the preferred mode of service of documents or correspondence,
compliance by the other party with the procedure prescribed under the
law of service by registered post would constitute effective service
of any such document or correspondence upon delivery of the
registered mail slip at the chosen domicilium
citandi.
The
procedure prescribed by the law of service of documents or
correspondence by registered post does not require delivery of the
registered item itself at the chosen domicilium
citandi.
In
Munien
v BMW Financial Services (SA) (Pty) Ltd and Another
2010
(1) SA 549 WALLIS J stated the following at p558E-G:
“It
follows that in my judgment, provided the credit provider delivered
the notice in the manner chosen by the consumer in the agreement and
such manner was one specified in s65(2)(a), it is irrelevant whether
the notice in fact came to the attention of the consumer.
As
the consumer has the right to choose the manner in which notice is to
be given it is for the consumer to ensure that the method chosen will
be one that is reasonably certain to bring any notice to his or her
attention. In the present case the applicant was presumably aware of
the deficiency in the postal services at the address chosen in the
agreement. He was certainly aware that he had moved. In terms of
clause 15.1 of the contract
he
was perfectly entitled to give notice of that fact to the first
respondent and to alter his domicilium.
He did not do so.
His right to alter his address was reinforced by s96 of the NCA. In
addition, he was obliged under s97 of the NCA to inform the first
respondent that the location of the motor vehicle had changed, but it
does not appear that he did so.
The
fact that he did not receive either the notices or the summons
appears to follow very largely from his own actions rather than those
of the first respondent.”
It
is common cause that the parties had agreed under clause 15 of the
agreement that the domicilium
citandi
would be as stated in the agreement. It is also common cause that
under clause 14 of the agreement the parties had agreed that any
variation or change to the contract would be in writing and agreed on
by both parties.
The
written notice, drawing the attention of the appellants as purchasers
to breach of the contract and calling upon them to rectify the breach
within thirty days of service of the notice on them failing which
cancellation of the contract would follow, was sent by registered
post to the branch of the Post Office nearest to the address the
appellants had chosen as the domicilium
citandi.
The
Post Office issued out a registered mail slip to the domicilium
citandi,
notifying the appellants of the availability of the registered item
for collection. The registered mail slip was delivered at the
domicilium
citandi.
The
act of delivery of the registered mail slip at the domicilium
citandi
completed the process of effective service of the notice by
registered post contemplated under s8(3)(b) of the Contractual
Penalties Act.
Section
8(3)(b) of the Contractual Penalties Act does not require actual
receipt of the registered mail itself by the addressee. It does not
require the seller under an instalment sale of land to bring the
contents of the notice of breach to the subjective attention of the
purchaser.
Section
8(3)(b) of the Contractual Penalties Act is to the effect that the
notice shall be regarded as having been duly given to the purchaser
if it has been posted by registered post to the address chosen by the
purchaser for the delivery of correspondence or legal documents
relating to the instalment sale of land concerned.
The
seller discharged its obligation to the appellants as purchasers in
terms of the contract, as read with section 8(3)(b) of the
Contractual Penalties Act, regarding the mode of service of the
notice of breach of the contract.
The
fact that the appellants no longer resided at the chosen domicilium
citandi
was of no consequence to the determination of the question whether
delivery of the registered mail slip at the domicilium
citandi
constituted effective service of the notice of breach of the contract
for purposes of section 8(3)(b) of the Contractual Penalties Act.
The
risk of non-receipt of the registered item lay with the appellants
once the registered mail slip was delivered at the domicilium
citandi.
The obligation to notify the seller in writing that they were no
longer residing at the chosen domicilium
citandi
was theirs.
In
Van
Niekerk and Another v Favel and Another
2006 (4) SA 548 (W) at p561C-D it was held that the requirement of
notifying the purchaser of breach of contract and making demand of
the purchaser to rectify the breach was satisfied provided that the
letter had in fact been sent to him by registered post, whether or
not it was received by the purchaser.
The
contention advanced on behalf of the appellants was that the service
of the written notice of breach by the seller on the purchaser by
registered mail required under section 8(3)(b) of the Contractual
Penalties Act was the delivery of the written notice itself in a
registered envelope at the chosen domicilium
citandi.
That
meaning of section 8(3)(b) of the Contractual Penalties Act was said
to be derived from the application of section 40(1) of the
Interpretation Act on the interpretation of enactments providing for
service of documents by registered post.
The
contention advanced on behalf of the appellants overlooked the
principle contained in section 2(1)(a) of the Interpretation Act, to
the effect that the application of the provisions of the
Interpretation Act to the construction of any enactment must be
consistent with the intention, purpose or context of the enactment.
The
purpose of section 8(3)(b) of the Contractual Penalties Act is to
make provision for effective service of a written notice of breach of
the instalment sale of land by the seller to the purchaser where it
has been posted by registered post to the address chosen by the
purchaser for the delivery of correspondence or legal documents
relating to the instalment sale of land.
Section
8(3)(b) of the Contractual Penalties Act expressly provides that the
notice shall be regarded as having been duly given to the purchaser
for the purposes of subs (1)(b) (termination of the contract) if it
has been posted by registered post to the address chosen by the
purchaser as the domicilium
citandi.
Given
the provisions of section 2 of the Interpretation Act, section 40(1)
of the same Act may not be relied upon to contradict the purpose of
section 8(3)(b) of the Contractual Penalties Act.
Section
8(3)(b) of the Contractual Penalties Act does not need the
application of section 40(1) of the Interpretation Act because its
provisions are clear and unambiguous.
DISPOSITION
Accordingly,
it is ordered as follows -
“The
appeal is dismissed with costs.”
UCHENA
JA: I concur
CHIWESHE
AJA: I concur
Dube-Tachiona
and Tsvangirai,
appellants legal practitioners
Nyahuma's
Law,
first respondent's legal practitioners
