This
is an opposed application where the applicant seeks the following
relief:-
“1.
Applicant shall deposit $10,000,000,000= into the Registrar of High
Court's temporary deposit account the outstanding balance towards
the purchase price of Stand No.3519, Dzivaguru Crescent, Ruwa, for
first respondent.
2.
Thereafter, first respondent shall proceed to cede his rights,
interests and title in Stand No.3519, Dzivaguru Crescent, Ruwa, into
applicant's name within ten (10) days of service of this order on
him failure of which the Deputy Sheriff, Harare, be and is hereby
authorised to sign all relevant cession papers for purpose of ceding
first respondent's rights interests and title in Stand No.3519,
Dzivaguru Crescent, Ruwa, into the applicant's name.
3.
First respondent shall be evicted forthwith from Stand No.3519
Dzavaguru Crescent, Ruwa.
4.
First respondent shall pay the costs of this application on client
legal practitioners.”
In
seeking the above relief, the applicant alleges that the respondent
breached a contract relating to his purchase of Stand No.3519
Dzivaguru Crescent, Ruwa, (the property).
It
is common cause that on 15 February 2008 the applicant and the first
respondent entered into a written agreement whereby the first
respondent would sell his rights in the property to the applicant for
a sum of ZW$20,000,000,000= (twenty billion Zimbabwe dollars). The
applicant paid ZW$10,000,000,000= (ten billion Zimbabwe dollars) upon
the signing of the agreement. It was then agreed that the balance of
ZW$10,000,000,000= would be paid over a period of three months.
On
21 April 2008 (i.e. 66 days after paying the deposit) the applicant
tendered payment of the balance of ZW$10,000,000,000= but the first
respondent refused to accept the payment arguing that he had since
cancelled the agreement after the applicant refused to pay
$3,300,000,000= on 15 March 2009, which payment, according to the
first respondent, would have constituted the first instalment.
On
9 May 2008, the applicant filed this application praying for specific
performance in terms of the draft order (relief) quoted in full
herein…,.
On
9 July 2008, the applicant obtained a default judgment against the
first respondent from this court, and, on the basis of that judgment,
he caused the registration of the property into his name. However,
the default judgment was later rescinded on 7 May 2009.
In
opposing the application, the first respondent argued that the
purchase agreement was not enforceable because it did not carry the
consent of the lessor, namely, the Minister of Local Government and
National Housing (the Minister) who was not even cited in the
proceedings.
The
first respondent based his argument on clause 12 of the lease
agreement between himself as the lessee and the Minister as the
lessor. The said clause provides as follows:
“That
the lessee shall not cede or assign this lease or sublet or part with
the possession of the stand/stands, or any part thereof, or alienate,
mortgage, donate or otherwise dispose of the same, or cede or assign
any right acquired by him/it hereunder without the previous consent
in writing of the Lessor, or until title to the stand/stands shall
have been granted to him/it as hereafter mentioned.”
The
first respondent conceded that, although he, as the seller, had not
complied with the above condition, the agreement between him and the
applicant was not null and void. It was only unenforceable and would
remain so until the Minister (lessor) placed him in a position to
pass title. He, however, correctly argued that the Minister, who was
not a party to the proceedings, could not be compelled to pass title
to either of the two parties.
The
first respondent argued that Ruwa Local Board, cited in the case as
second respondent, was merely an administrative entity and could not
take the place of the lessor who could pass title. It was further
submitted that the second respondent had indeed confirmed that it
would require authority from the Minister for it to pass title. The
second respondent was not therefore compellable to pass title to the
applicant.
The
first respondent further submitted that when the parties concluded
the contract their main intention was that the balance of
$10,000,000,000= would be payable in three equal instalments over a
period of three months. However, in breach of that arrangement, the
applicant had, on 15 March 2008, upon demand, refused to pay the
first instalment of $3,300,000,000=. The applicant had indicated that
he would pay the whole balance at the end of the three months'
period. That refusal to pay led to the cancellation of the agreement
by the first respondent. The first respondent regarded refusal to pay
the first instalment as a breach of contract justifying cancellation
of the
same.
On
his part, the applicant submitted that upon payment of the balance of
$10,000,000,000=, through the High Court, following the rescinded
court order granted on 9 July 2008, he had fully discharged his
obligations under the contract. He had initially tendered the payment
on 21 April 2008 but the first respondent had rejected the same.
It
should, however, be noted that notwithstanding the rescission of the
court's order of 9 July 2008, on 7 May 2009, the applicant went
ahead to register the property into his name.
The
applicant averred that the refusal by the first respondent to accept
the balance was due to the fact that he (the first respondent) wanted
to fetch a higher price from an unnamed third party. He said the
agreement did not spell out any specific instalments for the three
months period. The first respondent could not therefore resile from a
contract that was entered into freely and voluntarily. Payment had
been made within the confines of the agreement and that payment was
subsequently paid through the court.
The
applicant agreed that although the agreement in question was legal it
did not bind the lessor (Minister). See Jangara
v Nyajuyamba
1998
(2) ZLR 475 (H) and Chanda
v Mutandadzi and Anor
SC74-94.
He
said clause 12 of the lease agreement merely enunciated general
policy. In the main, however, the City Councils/Local Boards are, on
behalf of the Minister, the ones who approve of persons who are
eligible to purchase or occupy any piece of land. The City Council(s)
or local board(s), with authority from the Minister, can ratify what
the parties will have concluded outside the non-cession clause. To
that end, it was argued, it is the city councils/local boards that
obtain the necessary authority for cession(s) from the lessor (in
casu:
the Minister). He said authority to cede would only be withheld where
public policy would be injured.
In
the premises, and because the applicant had fully discharged his
obligations under the contract, it was argued, it would be unjust and
inequitable for the court not to order specific performance. He urged
the court to find the agreement legal and enforceable – hence his
cry for specific performance.
In
dealing with this matter, I want to take judicial notice of the fact
that, generally, State land in municipalities is administered by
local councils through delegated authority from the Minister. The
lessee, for all practical purposes, dealt with the Ruwa Local Board
which was mandated by the lessor (Minister) to approve developments
on the Stand or property that was the subject of purchase. Ruwa Local
Board was therefore the authorized agent of the Minister.
To
that end, I do not see any prejudice in the non-citation of the
Minister who appears in the lease agreement as the lessor.
Pursuing
that argument, in any case, is now academic in the sense that, at the
time of the hearing of this of matter, the second respondent had
already exercised its delegated authority by effecting cession to the
applicant.
It
is important to note that the court order that was later rescinded
was never challenged by the lessor. That, alone, is testimony to the
fact that Ruwa Local Board is the authorized agent of the lessor.
The
problem faced by both parties regarding their contractual
relationship is the interpretation of the phrase “balance
over three months from date of sale.”
There
is no mention of what would be paid per each month. However, in his
opposing affidavit, the respondent states the following:-
“5.4
Reference to payments “over three moths” was clear reference to
the monthly instalments which were agreed by the parties.
5.5
I recall that on or about the 15th
of March 2008, I demanded payment of the first instalment Zimbabwean
dollars. The applicant refused to pay the amount and indicated that
he was to going to pay the amount at the end of three months period
together with the subsequent instalments. I
advised him that because of loss of value for money, I was not
prepared to accept the full payment of 10,000,000,000= (ten billion)
Zimbabwean dollars at the end of the three months period. I
accordingly insisted on the payment of instalment. The applicant
refused. As a result, I advised him that I was cancelling the
agreement of sale.….,.
5.6
On or about the 15th
of April 2008, some two months after the cancellation of the
agreement of sale, the applicant came to my residence and tendered
the payment of the sum of $10,000,000,000= (ten billion) Zimbabwean
dollars. I rejected the payment indicating that I had already
cancelled the agreement of sale to his knowledge. That resulted in
him writing the letter, which is attached to the applicant's
founding affidavit papers, to the Ruwa Local Board. The said letter
was however not copied to me.
5.7
I wish to point out that, originally, I had indicated to the
applicant that the purchase of the property should have been made on
cash basis. He negotiated with me and pleaded with me to accept a
deposit in the sum of $15,000,000,000= (fifteen billion) Zimbabwean
dollars. However, on the appointed day when the agreement was
drafted, he came up with the sum of $10,000,000,000= (ten billion)
Zimbabwean dollars. Initially, I had insisted that the balance which
would have remained, in the sum of $5,000,000,000= (five billion)
Zimbabwean dollars should have been paid within a month of the
agreement of sale, that is by the 15th
of March 2008. On the date when the agreement was drawn up, it was
after pleading of the applicant that I asked him to pay the balance
spread over three months.”
As
can be seen, the above statements attempt to introduce new terms to
the agreement that the parties signed on 15 February 2008.
The
statements, being outside the contract, are denied by the applicant.
The applicant's position is that he would only be in breach if he
failed to pay the balance within the three months period.
I
agree.
The
failure by the parties to incorporate the issue of instalments in the
agreement, in my view, suggests that what was most important is that
the balance should have been cleared within the three months period.
The applicant could have paid any amount, even the total balance,
before the expiry of the three months period. What the applicant
could not do, however, was to effect payment outside the three months
period.
That
view is consistent with the need to restrict the interpretation of
the intentions of the parties to the contents of the agreed document
ie within the four corners of the contract.
Accordingly,
my view is that the respondent lacked competence to cancel the
contract on 15 March 2008 before the expiry of the three months
period.
I
also believe that the short period within which the balance was to be
paid was meant to accommodate the issue of inflation raised by the
respondent. In fact, the reason for refusing to accept the money was
given as:-
“I
advised him that because of loss of value for money, I was not
prepared to accept the full payment of $10,000,000,000= (ten billion)
Zimbabwean dollars at the end of the three months period.”
The
first respondent accepts the contract signed on 15 February 2008 but
now wants to add the issue of defined instalments. That may sound a
reasonable expectation but it was not part of the contract. I
therefore strongly hold the view that the first respondent could only
talk of breach and cancellation of the contract after the expiry of
the three months period.
This
court cannot, therefore, be used as a platform to assist parties who
enter into 'bad' deals by way of allowing unilateral variation of
contracts. The respondent therefore refused to accept the full
payment on 21 April 2008 at his own peril.
On
the basis of the principle that the law respects the sanctity of
contracts, the respondent cannot therefore be allowed to resile from
the contract. There was no breach on the party of the applicant and
the purported cancellation of the contract was therefore null and
void.
Having
complied with the terms of the contract, the applicant is entitled to
an order of specific performance.
In
Unilever South East Africa v Viewleen Investments (Private) Limited
HH37-07, CHITAKUNYE J, dealing with the issue of specific performance
and relying on what the late ROBINSON J said in Intercontinental
Trading (Pvt) Ltd v Nestle Zimbabwe Ltd 1993 (1) ZLR (H), had this to
say:-
“The
money loss or inconvenience to be suffered by the defendant as a
result of its own delay or failure to perform was discussed in the
Intercontinental case, supra,
and was held not to be good enough a ground to deny a party a prayer
for specific performance.
Indeed,
it would be a disservice to the business community if parties were to
be allowed to will-nilly use likely monetary loss as a ground to
defeat a prayer for specific performance.
I
can do no better than quote the late ROBINSON J, in Intercontinental
case, supra,
at p37 where he said:
“I
would wind up by saying that if the right of specific performance is
to be shown to have real meaning to businessmen, then the loud and
clear message to go out from the courts is: businessmen beware. If
you fail to honour your contracts, then don't start crying if,
because of your failure, the other party comes to court and obtains
an order compelling you to perform what you undertook to do under
your contract. In other words, businessmen who wrongfully break their
contracts must not think they can count on the courts, when the
matter eventually comes before them, simply to make an award of
damages in money, the value of which has probably fallen drastically
compared to its value at the time of the breach. Businessmen at fault
will therefore, in the absence of good grounds showing why specific
performance should not be decreed, find themselves ordered to perform
their side of the bargain, no matter how costly that may turn out to
be for them…,.”
This
was a commercial transaction and I am therefore in complete agreement
with the views expressed in the two judgments quoted above.
In
casu,
the
first respondent, for financial considerations, refused to accept a
legitimate payment that was being effected within the agreed period.
The law is unable to protect him from his own deliberate but costly
and legally unbackable action.
Accordingly
I order as follows:-
1.
That the purported cancellation of the agreement of sale signed on 15
February 2008 between the first respondent and the applicant be and
is hereby declared null and void.
2.
That the cession of the first respondent's rights, interests and
title in Stand Number 3519 Dzivaguru Crescent, Ruwa into the
applicant's name be and is hereby confirmed.
3.
That the applicant be and is hereby authorized to evict the first
respondent from Stand Number 3519 Dzivaguru Crescent, Ruwa within
seven (7) days from service of this order; and
4.
That the first respondent shall pay the costs of this application.
