Civil
Appeal
MAFUSIRE
J:
[1] This
was an appeal from a decision of the magistrate's court. We
dismissed it soon after argument and gave reasons ex
tempore.
The appellant has now sought written reasons.
[2] In
the court a
quo
the respondent, hereafter referred to as “the
purchaser”
where appropriate, sued for specific performance in respect of a
property that she had bought from the appellant in terms of a written
agreement of sale. She proceeded by way of a court application. The
draft order, apart from costs, sought an order directing the
appellant, hereafter referred to as “the
seller”
where appropriate, to sign forthwith all the documents necessary to
enable transfer of the property to herself, failing which the
messenger of court should be empowered to stand in his stead and
sign. She said in terms of the agreement, the parties had consented
to the jurisdiction of the magistrate's court.
[3] In
his notice of opposition the appellant took a point in
limine
that the remedy sought was not one contemplated by the agreement of
sale. He said in terms of it, in the event of a breach by himself,
the only remedy available to the respondent was cancellation of the
agreement upon a prior demand to make good the breach within 14 days
and that this had not been done. He said specific performance was a
remedy alien to the written agreement.
[4] An
adjunct to the above objection was that in terms of the Magistrates
Court Act, Cap
7:10,
a magistrate's court has no jurisdiction to grant specific
performance in the absence of an alternative claim for damages. He
cited section 14(1)(d)
of the Act.
[5] On
the merits, the appellant's basic defence was that the respondent
had only paid part of the purchase price; that as such she was in
breach of the agreement of sale, and that therefore she was not
entitled to specific performance. He prayed for the dismissal of the
application with costs.
[6] The
court a
quo
felt there was a dispute of fact that was incapable of resolution on
the papers. It referred the matter to trial.
[7] After
a full scale trial the court a
quo
found in favour of the respondent and granted specific performance.
The appellant appealed. We felt the appeal had no merit. We dismissed
it as aforesaid.
[8] The
seller's argument that the remedy sought by the purchaser was not
one contemplated by the agreement of sale was premised on clause 11.
It read:
“Should
the Seller breach any of the conditions of the Agreement, the
Purchasers shall in writing within fourteen (14) days call upon the
Seller to remedy, failure to which the Purchasers shall be entitled
to cancel the Agreement and claim the return of the Purchase Price or
damages.”
[9] The
point in
limine
was all smoke. The approach by the seller was to skin and disembowel
the agreement, yank individual clauses out and hang them up to dry.
The result was to turn an otherwise reasonably worded commercial
agreement into a vain document that was an end in itself, instead of
it being a means to an end. The agreement of sale was an instrument
for the seller to transfer real rights in the property sold and the
purchaser to acquire them. That was the object. That was the purpose.
The court had to give effect to it. Otherwise the law would be
damned. As ROBINSON J would put it:
“Let
me add that to have found in this matter that there was no contract
between the parties would
have been artificial in the extreme
and, I am sure, would have prompted any reasonable businessman to
remark that if, before, he had thought the
law was an ass,
he now knew for certain that it was, since it had shown itself to be
the domain of niggling academics out
of touch with reality and to have nothing to do with the cut and
thrust of the business world
where one is concerned, not with the legal niceties pertaining to,
but with the perceived existence of a contract.” (emphasis
added)
[10] The
point is, a purchaser who buys a property and performs his side of
the bargain, or is ready to perform, is entitled to take title. The
seller is obliged to deliver. If he fails or neglects or refuses to
do so, the purchaser is entitled to sue for specific performance.
This is quite elementary. As long ago as 1912 INNES JA said in
Farmers
Co-operative Society (Reg) v Berry
1912 AD 343, at p350:
“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.”
[11] A
plaintiff has the right to choose whether to hold a defendant to his
contract and claim performance by him of what he bound himself to do,
or to claim damages for the breach: see Haynes
v Kingwilliamstown Municipality
1951 (2) SA 371 (A) at p378. The defendant has no such right of
election. He cannot claim to be allowed to pay damages instead of
having an order for specific performance entered against him. In the
exercise of its discretion the court may grant or refuse specific
performance. Specific performance will be refused if it will lead to
an injustice, or if it will be unduly harsh and burdensome on the
defendant. There was nothing like that in this case.
[12] The
court exercises its discretion to grant or refuse specific
performance judiciously, not whimsically. The discretion is not
confined to specific types of cases. It is not circumscribed by rigid
rules. Each case depends on its own set of facts: see
Intercontinental
Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd
1993 (1) ZLR 21 (H).
[13] In
the present case, clause 11 of the agreement did not oust the
purchaser's right to sue for specific performance. It merely
pronounced one of the remedies available to her in the event of a
breach by the seller. A proper and holistic study of the agreement
shows that it was the intention of the parties that upon her
performing her side of the contract she would get transfer of the
property. Otherwise why would clause 1.ii.(4) refer to the payment of
capital gains tax, if not in contemplation of transfer? Or clause
1.iii. that said the balance of the sale proceeds would be released
to the seller upon the registration of transfer? Or clause 5 that
said risk and profit in the property would pass to the purchaser on
the date of registration of transfer?
[14] The
court a
quo
was right to dismiss the point in
limine.
Its adjunct that the claim for specific performance was incompetent
because it was not accompanied by a claim for damages was equally
properly dismissed. The appellant went to town about a patently
harmless error in clause 15 of the agreement of sale which cited a
wrong section in the Magistrates Court Act as being the one in terms
of which litigants can consent to the jurisdiction of that court even
though the claim might exceed its monetary jurisdictional limit.
[15] Clause
15 of the agreement said in part:
“Both
parties hereby consent, in terms of section (13)(1)(c) (sic)of
the Magistrate's Court Act Chapter 18 (sic),
to the province of Masvingo, held at Masvingo in respect of any
action or matter arising out of this Agreement, notwithstanding that
such action or the foregoing, the Seller shall have the right to
institute such proceedings in the High Court of Zimbabwe should
he/she elect to do so.”
[16] To
that, the appellant's argument was:
“The
parties signed an Agreement of Sale where they consented to a
Magistrate's Court sitting at Masvingo in terms of Section 13(1)(c)
of the Magistrate's Court Act, Chapter 18. The Respondent's
lawyers used the copy of the contract to found jurisdiction of the
court a
quo.
On the date of signing, March 2015 the statutes had been amended and
there was no longer Section 13(1)(c) of the Magistrate's Court
Chapter 18. No amendment was done and before the matter was referred
to trial, this point was raised by the Appellant but dismissed by the
Learned Magistrate. Hence in principle the court a
quo
as at the date of hearing the application and trial lacked
jurisdiction to deal with the matter where specific performance was
sought without alternative to damages, in contravention of Section
14(1)(d) of the Magistrate's Court Act (Chapter 7:10).”
[17] The
appellant's argument was all mixed-up. In terms of SI163/2012
(Magistrates Court [Civil Jurisdiction] [Monetary Limits] Rules,
2012), the monetary civil jurisdiction of the magistrates is $10,000
for, among others, actions
for the delivery of movables or immovables.
[18] In
terms of section 11(1)(b)(ii)
of the Magistrates Court Act, the magistrate's court is conferred
with jurisdiction, where the
delivery or transfer of any property, movable or immovable, is
claimed, if the value of such property does not exceed such amount as
may be prescribed in rules (i.e. $10,000), whether in lieu of, or in
addition to, any other claim, which shall include a claim for the
cancellation of any agreement relating to such property.
[19] The
appellant made no reference at all to the proviso to paragraph (b)
of section 11(1). That proviso expressly confers jurisdiction on the
court to try any action or case referred to in, among others,
subparagraph (ii) above, otherwise beyond its jurisdiction if
the defendant has consented thereto in writing.
It is all very clear.
[20] But
of course the appellant's argument was premised on section 14. This
section gives instances when the court has
no
jurisdiction. One such is in subsection (1)(d).
In terms of it, the court has no jurisdiction where the
specific performance of an act is sought without an alternative claim
for damages. But characteristically, the appellant ignored the
proviso thereto. It says: “provided that a court shall have
jurisdiction to order (among other things) the delivery or
transfer
of property, movable or immovable, not exceeding such amount as may
be prescribed in rules.”
[21] The
mistaken reference in the parties agreement of sale to a non-existent
section 13(1)(c) of the Magistrates Court Act was of no moment. The
fact remains that in terms of the Act a defendant can consent to the
jurisdiction of the magistrate's court even where the plaintiff's
claim exceeds that court's monetary jurisdiction. In the present
case both parties had given their advance consent on the signing of
the agreement of sale even though their reference to the specific
provision as permitting such consent was erroneous. That could not
have been a reason to non-suit the respondent.
[22] On
the merits, most of the essential facts were common cause. The
agreement of sale was brokered by a firm called Net Seven Real Estate
(“Net
Seven”).
The property was a 3-bedroomed house, and other rooms, in the high
density suburb of Runyararo West, Masvingo. The purchase price was
$31,000. It was payable in cash upon the signing of the agreement. An
additional $300 was payable by the purchaser by way of service
charges to cover administration costs. All payments would be made
into Net Seven's trust account with Standard Chartered Bank. The
purchase price would be held in trust pending transfer of the
property. But before transfer, payments out of the purchase price
would be permissible for any mortgage bond; agents commission; rates,
water and electricity and capital gains tax. The balance would be
disbursed to the seller upon the registration of transfer.
[23] The
purchaser signed the agreement on 30 March 2015. The actual date in
March when the seller might also have signed was not inserted. In
fact, there is no telling whether it was in March or some other month
that the seller signed. However, this was not an issue. On 2 April
2015 the seller signed the special power of attorney to pass
transfer. The purchaser deposited $300 and $31,000 into Net Seven's
trust account on 8 April 2015. From the purchase price the seller
withdrew $16,290 to clear the mortgage bond outstanding against the
property. On 16 April 2015 both parties signed the statutory
declarations regarding capital gains tax whereby the purchaser
guaranteed that she had paid the purchase price in full, and the
seller also guaranteed that he had received it in full.
[24] What
triggered the litigation was, according to the purchaser and her
witnesses, the lack of cooperation by the seller to take the
necessary final step to effect transfer. The parties had to appear
before the Zimbabwe Revenue Authority (“Zimra”)
for the purposes of pre-transfer interviews in connection with the
sale, as a prelude to the issuing by Zimra of the capital gains tax
clearance certificate that is one of the batch of documents required
to be lodged with the Deeds Registry on the registration of transfer.
[25] That
the seller was not cooperative was self-evident. He claimed the
purchaser had not paid the purchase price in full. But this was
factually incorrect. The purchaser had paid the purchase price in
full. Receipts given to her by Net Seven on the payment of the $300
and $31,000 were produced. At any rate, the seller had already
declared that she had paid in full. He had even gone on to sign the
special power of attorney to pass transfer.
[26] The
seller's real gripe was in fact that the sum of $14,710 still
remained outstanding. This was the balance of the $31,000 after he
had withdrawn the $16,290 for his outstanding mortgage. There were
allegations that appeared uncontroverted that a director or employee
of Net Seven, who had brokered the sale, had stolen the balance of
the purchase price and skipped the country. The purchaser had
reported the matter to the police and the seller had been called as a
witness in the pending criminal case which apparently was in an
indeterminate state owing to the absence of the accused.
[27] Given
the nature of the appellant's defence, the whole case before the
court a
quo,
apart from the points in
limine
above, was whose agent was Net Seven in the agreement of sale? The
purchaser said Net Seven was the seller's agent; that once she had
paid in terms of the agreement of sale she had discharged her
obligations and was entitled to take transfer. The seller said Net
Seven was no one's agent but merely a broker that had fixed the
agreement of sale on behalf of both parties. He argued that both
parties had been responsible for paying Net Seven and pointed to the
$300 that the purchaser had paid.
[28] The
seller's arguments were fallacious. Net Seven was not a broker for
both parties. It was the seller's agent. Evidence placed before the
court a
quo
was that it was the seller who approached Net Seven with instructions
to sell the property and to find a buyer. Net Seven looked up to him
for their commission. The commission was guaranteed from the purchase
price. The $300 paid by the purchaser was not a commission but a
service charge.
[29] Thus
the court a
quo
was correct to find that the respondent's payment to Net Seven was
payment to the appellant. She had fulfilled her obligations in terms
of the agreement of sale. That the purchaser might have at one time
reported a case of theft against a director or employee of Net Seven
in which the appellant might have been lined up as a witness was a
harmless diversion. It had no legal consequence on the parties rights
and obligations under the agreement of sale. It was up to the
appellant to pursue the theft case himself if there was substance to
it. Otherwise, I agree with the respondent that this case is on all
fours with that of Cleogoz
Investments (Pvt) Ltd v Hougaard & Anor
HH250-17 where this court held that payment of the purchase price by
the purchaser to the estate agent contracted by the seller was
payment to the seller. To have held otherwise would have led to an
absurdity. If the estate agent was held to be the purchaser's
agent, then the purchaser would in fact, be paying to herself. That
would be absurd.
[30] It
was upon the above reasons that we dismissed the appeal with costs.
16
January 2019
Hon MAWADZE J: I
agree_____________________
Muzenda
& Partners,
legal practitioners for the appellant
Mutendi,
Mudisi & Shumba,
legal practitioners for the respondent
1.
In Intercontinental Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd
1993 (1) ZLR 21 (H)
2.
Paragraph 8.2 of the Appellant's Heads of Argument
