Specific Performance re: Time of Performance iro Debtors Mora, Mora Ex Re, Mora Ex Persona, Interpellatio & Time of Essence

HH15-09 : GRISON MUWIDZI vs OPTIMACK INVESTMENTS (PVT) LTD and REGISTRAR OF DEEDS
Ruled By: UCHENA J

The applicant and the first respondent entered into an agreement of sale. In terms of that agreement, the applicant was to purchase Stand 58 Greystone Township 2 of Lot A of Borrowdale Estate measuring 4,730 square meters. The agreement was entered into on 18 February 2008. In terms of clause 2, which deals with the terms ...

In terms of clause 2, which deals with the terms of payment, $1,950,000,000,000 (One trillion nine hundred and fifty billion Zimbabwe dollars) was to be paid “within three (3) days of signing this agreement of sale to Kingdom Asset Management.”

The applicant completed an RTGS form on 21 February 2008 and presented it to his Bank, instructing it to pay the first respondent's agent the purchase price. The RTGS form which was attached as annexure B to the applicant's application has the following material details;

It was addressed to CFX Bank requesting it to transfer $1,950,000,000,000 to Kingdom Securities Ltd Call Account. It is dated 21 February 2008. The value date is indicated as 22 February 2008. The account to be debited is indicated as c/o CFX. It is endorsed at the bottom in long hand “Debit new account No. 172 1197287-011” and “pd. 22/2”.

The following facts are common cause;-

1. The first respondent sold the property to a third party on 21 February 2008.

2. The applicant was offered another unspecified Stand on a without prejudice basis.

3. The applicant applied for a provisional order interdicting the first respondent from selling, disposing, transferring or alienating the immovable property to any person other than the applicant.

4. The provisional order was granted by HLATSHWAYO J on 5 March 2008.

The applicant now seeks confirmation of the provisional order. The first respondent seeks its discharge. The issue to be decided is whether or not the applicant paid the purchase price within the agreed period.

Counsel for the applicant submitted that the provisional order should be confirmed as the applicant has a clear right emanating from his having complied with the terms of the agreement of sale by paying the purchase price within the stipulated period. Counsel for the first respondent submitted that the provisional order should be discharged as the applicant has not established a clear right as the agreement lapsed when the applicant failed to pay the purchase price by the 21^st of February 2008.

The issue on which this case hinges is whether or not the applicant paid the purchase price within the stipulated period. Put differently, the issue is whether the instruction given by the applicant to CFX Bank on 21 February 2008 constitutes payment within three (3) days as provided in clause 2, or payment by the 21^st of February 2008 as provided in clause 17 of the agreement of sale.

Clause 17 provides as follows;-

“It is a condition precedent of this agreement that the Purchaser signs and pays the full purchase price stipulated in paragraph 2.1 (sic) on or before 21 February 2008 failing which the agreement shall immediately lapse and be of no further force or effect.”

Clause 2 of the agreement provides as follows;-

“Z$1,950,000,000,000 (one trillion nine hundred and fifty billion Zimbabwe dollars) to be paid within three (3) working days of signing this agreement of sale to Kingdom Asset Management.”

It is clear from clauses 2 and 17 that payment was to be made before the closing of business on 21 February 2008. Failure to comply would lead to the lapsing of the agreement of sale.

Counsel for the applicant submitted that the ZETTSS Payment Form, annexure B, proves that the applicant paid within 3 days as required by clause 2, and on or before 21 February 2008 as stipulated by clause 17. He relied on Rule 1.1 of the Zimbabwe Electronic Transfer and Settlement System Operating Rules, (R.B.Z.ZETSS - 1 (Issue 5) which provides as follows;-

“1.1 The Zimbabwe Electronic Transfer and Settlement System (ZETSS) allows for the real time, irrevocable, interbank transfer of funds on a same-day value basis using settlement accounts held at the Reserve Bank of Zimbabwe.”

Counsel for the respondent, on the other hand, submitted that payment is made when the sending Bank's account is debited and the receiving Bank's account is credited with the amount specified in the payment instruction. He relied on Rule 9 of the Zimbabwe Electronic Transfer and Settlement System Operating Rules which provides as follows;-

“9. A payment instruction under ZETSS is deemed to be final and irrevocable once the sending Bank's account is debited and the receiving Bank's account is credited with the amount specified in the payment instruction.”

It seems to me that the submissions made by counsel for the applicant are correct.

Rule 1.1 deals with the general intention behind the introduction of this type of transfer of funds. It was intended to be a quick way of transferring funds so that the funds so transferred could reflect in the recipient's Bank account on the same day. It makes it clear that once the instruction is given it becomes irrevocable, meaning that payment must be deemed to have been made at the time the instruction was given. Rule 9, on the other hand, provides for the stage when such a payment becomes final and irrevocable. In my view, this merely provides for the finality of an already irrevocable payment. I would therefore not agree with counsel for the respondent that payment is made at the time the receiving account is credited.

Rules 1.1 and 9 must be interpreted within the context of other provisions of the operating rules. Rules 7.1 and 7.4(a) of the Zimbabwe Electronic Transfer and Settlement System Operating Rules shed light to their true meaning. They provide as follows;-

“7.1 Only unconditional, irrevocable payment instructions between participants and between participants and the Reserve Bank may be made through the System;” and

“7.4 Participants may capture payments that are to be effected at a future date or time, on condition that:-

(a) Such payments shall be scheduled for a business day and time the System is in operation:”

This, to me, means, as a general rule only, unconditional, irrevocable payment instructions between participants and the Reserve Bank can be made. This would mean payment would be deemed to have been made on the day the paying party gave instructions to his Bank.

In this case, it would mean payment was made on 21 March 2008.

If there was no exceptions to Rules 1.1 and 7.1 I would have had no difficulties in finding that the applicant paid within the agreed period. However, the paying participant can, in terms of Rule 7.4(a) of the Zimbabwe Electronic Transfer and Settlement System Operating Rules, instruct his Bank to capture a payment that is to be made in the future. If he does, payment cannot be deemed to have been made on the date of the instruction but on the stipulated future date.

In this case, it is common cause that the applicant, in giving instructions to his Bank in annexure B, indicated the value date as 22 February 2008. That is the date on which he intended to effect payment. That is the date on which his Bank effected payment as he had instructed it to. The date of payment is, in this case, not the day the instruction was given but the future date stipulated by the applicant in his instructions. In the result, the applicant paid on 22 February 2008 when the agreement required him to pay by the 21^st of February 2008. This means the agreement lapsed at the close of business on 21 February 2008.

There is therefore no legal basis on which the provisional order granted on 5 March 2008 can be confirmed. The right on which it depended was extinguished by the lapsing of the agreement of sale. It is therefore discharged with costs.

HH67-10 : JAMES MUTETWA vs BARRIE DIXON and MARKO MAVHURUNE N.O. (as Executor Estate Late Samuel Mushaninga) and KENIAS MUTYASIRA N.O. (as Executor Estate Late Salome Chisvo) and REGISTRAR OF DEEDS
Ruled By: MAKARAU JP

In or about January 2006, the applicant and the first respondent entered into an Agreement of Sale in respect of certain immovable property called Stand Number 584 Greystone Park Township of Greystone. In terms of the written agreement, the purchase price for the property was the sum of $400,000,000= and this was to be paid in ...

In terms of the written agreement, the purchase price for the property was the sum of $400,000,000= and this was to be paid in full within 5 days of the signing of the agreement. The payments clause in the Agreement of Sale provided that the purchase price was payable in full upon the signing of the agreement but a special condition of the agreement provided that the payment be made within five working days of the signing of the agreement failing which the agreement would be considered null and void.

It is common cause that the applicant did not pay the full purchase price within the stipulated period or at any time thereafter. The parties appear to have agreed, immediately after executing the agreement, that the purchase price of the property be converted to the sum of US$120,000= and that payment be made into a Channel Islands bank account whose details were furnished to the applicant by the first respondent.

This variation to the written agreement was not itself reduced to writing.

In pursuance of the new agreement, the applicant paid the sum of US$30,000= to the applicant by making a deposit into the nominated account. He also paid the estates agents' commission in local currency in the sum of $30,000,000= directly to the estate agents who had arranged the sale.

In due course, the first respondent pressed for payment of the balance of the purchase price in foreign currency as the applicant was taking too long to remit same. The applicant tendered local currency which was spurned by the first respondent. On 22 February 2007, the estate agency, acting on behalf of the first respondent, wrote to the applicant canceling the Agreement of Sale.

In the letter, the agency alleged that the applicant was in breach of the written agreement of sale in that he had failed to pay the full purchase price within five working days of the execution of the agreement of sale.

The applicant denied that he was in breach of the agreement but did not thereafter take any steps to enforce the agreement of sale against the first respondent.

In due course, the property was sold, jointly, to the Late Samuel Mushaninga and the Late Salome Kudzai Chisvo. Before transfer could be effected in favour of the second purchasers, the applicant obtained an order restraining the first respondent from doing so. In the meantime, the second purchasers took occupation of the property.

On 10 July 2009, the applicant filed this application, seeking an order compelling the first respondent to pass transfer of the property to him against payment of the sum of Z$370,000,000= and also evicting the first respondent and all those occupying through him from the property.

It may be pertinent, at this stage, to note that the applicant brought a similar application in 2007 which he withdrew in June 2009 with a tender of costs.

The first respondent was served with the application through service upon one Violet Tanda at the disputed property. It is not indicated on the certificate of service who Violet Tanda is and in what capacity she accepted service of the court application on behalf of the first respondent as it is common cause that the first respondent left the country immediately after selling the property to the applicant and that the families of the late Samuel Mushaninga and the late Salome Kudzai Chisvo are the ones in occupation of the property.

Not surprisingly, the first respondent did not oppose the application.

I have considered, but have not decided, on the issue whether the purported service on the first respondent in this matter is proper. In view of the conclusion that I reach in this matter, it is not necessary that I determine the issue. I simply raise it to highlight that in another forum the issue will have to be determined before an order can be made against the first respondent.

The second and third respondents did oppose the application.

Of material importance in the opposing affidavits filed by the second and third respondents is a narration of how the Late Mushaninga and the Late Chisvo purchased the property from the first respondent and paid the full purchase price. The respondents also sought to argue that the applicant was in breach of the contract between himself and the first respondent, prompting the applicant to challenge their locus standi to make such allegations.

The situation presented by the facts of this mater depicts to me the classical double sale situation.

The first respondent first sold the property in dispute to the applicant, and, thereafter, to the late Mushaninga and the late Chisvo who purchased the property jointly. The first purchaser now approaches court for an order of specific performance ahead of the second purchasers.

As stated above, at the hearing of the matter, the applicant took the point in limine that the second and third respondents had no locus standi in the matter to challenge the validity of the contract between the applicant and the first respondent.

In this regard, the use of the term “locus standi” was, in my view, misplaced.

Locus relates to the standing of the party before the court. It does not relate to the weight that should attach to the evidence of a party that was not close to the transaction and who has no personal knowledge of such. The issue of locus standi does not arise in this matter as the second and third respondents have each an interest to protect in the property in dispute. In any event, the applicant cited the second and third respondents in this application and it cannot lie in his mouth to deny them locus standi after he has dragged them to court.

It appears to me that what the applicant intended to do was to urge the court not to attach any weight to the averments of the respondents regarding the alleged breach of the sale agreement by the applicant as they were not close to the transaction. As will emerge from this judgment, the breach of the agreement by the applicant is, in my view, self confessed.

The law relating to double sales is well settled.

The principles which apply where a person sells a property to two or more persons, separately, were set out by this court in Crundall Brothers (Pvt) Ltd v Lazarus NO & Anor 1991 (2) ZLR 125 (S)…,.

Relying on the Article by Professor E.M. Burchell titled “Successive Sales” and published in the South African Law Journal in 1974, this court adopted the approach set out by the late Professor McKerron in his article, “Purchaser with Notice”, published in 1935 in the South African Law Times. The conclusions reached at by Professor Mackeron appeared in his article as follows:

“It is submitted that where A sells a piece of land to B and then to C…, the rights of the parties are as follows:

(1) Where transfer has been passed to B; B acquires an indefeasible right, and C's only remedy is an action for damages against A.

(2) Where transfer has been passed to C; C acquires an indefeasible right if he had no knowledge, either at the time of the sale or at the time he took transfer, of the prior sale to B, and B's only remedy is an action for damages against A. If, however, C had knowledge at either of those dates, B, in the absence of special circumstances affecting the balance of equities, can recover the land from him, and, in that event, C's only remedy is an action for damages against A.

(3) Where transfer has been passed to neither; B, in the absence of special circumstances affecting the balance of equities, can interdict A from passing transfer to C and obtain specific performance on the contract, and, in that event, C's only remedy is an action for damages against A.”

The facts of the matter before me fall into the third conclusion reached by the Late Professor R G McKerron. Transfer has passed to neither.

The issue that immediately falls to be determined is whether the applicant is entitled to specific performance on the written contract of sale as he prays for. If he is so entitled, his right to the property should prevail unless there are special circumstances in the matter that favour the second purchasers.

Specific performance is a discretionary remedy.

Generally speaking, any party to a binding contract, who is ready to carry out his own obligations, has a right to demand, from the other party, so far as this is possible, reciprocity. See Farmer's Coop Society (Reg) v Berry 1912 AD 343 and Haynes v Kingswilliamtown Municipality 1951 (2) SA 371 (A)…,.

It is trite that before a party can approach the court for specific performance he or she must set up a contract whose terms are clear and unequivocal and in terms of which the order is to be granted.

Trite as it may be, the issue arises before me as to what contract the applicant is setting up before me and upon whose terms I must grant specific performance as the applicant has deposed to two possible agreements between the parties. I find, however, that each is fraught with fatal difficulties.

It is convenient that I dispose of the second agreement first.

As stated above, after the parties had concluded the written Agreement of Sale, they verbally agreed that the purchase price be converted to the sum of US$120,000= and that payments be made into an offshore account whose details the first respondent furnished to the applicant. The applicant part performed under this verbal agreement and when he failed to pay the balance of the US$120,000=, the first respondent purportedly cancelled the Agreement of Sale.

I cannot grant specific performance of the second agreement of sale for two good reasons.

Firstly, and this should effectively close the matter, the applicant has not sought specific performance of this arrangement. He urges me to ignore it and for me to revert to the written agreement between the parties.

Secondly, even if I could find that this was the effective agreement between the parties, as I am inclined to, I would not have been able to grant specific performance on it as it was tainted with illegality. The parties, whilst resident in this country and without the prior approval of the foreign exchange authorities, had sought to trade in foreign currency for a property in Zimbabwe.

It appears to me that being aware of the illegality tainting the second arrangement, and, most probably, also wishing to avoid the onerous obligations imposed upon him by the arrangement, the applicant has urged me to enforce the written agreement between the parties wherein the purchase price was payable in local currency.

The applicant has not given me a reason why I should revert to the written agreement in view of the subsequent developments between the parties.

It is common cause that almost immediately after concluding the written Agreement of Sale, the parties entered into the verbal arrangement, the details of which I have already given. It is further common cause that the applicant did not pay the local purchase price of the property in local currency within the stipulated five days - or at all.

In my view, the fact that the second arrangement was entered into almost at the same time as the written agreement and was acted upon whilst the terms of the written agreement were not, strongly suggests that the parties did not intend to be bound by the written agreement at all. It was a sham. It was not contracted with the necessary animus. It was never meant to be binding between the parties but to clothe the transaction between the parties with some legality in the event that the transaction attracted the scrutiny of the authorities.

I am fortified in reaching this conclusion from the actions of the parties.

The first respondent never demanded payment of the purchase price in local currency. The applicant himself did not approach the court to enforce the contract by tendering the purchase price in local currency. It was as if the written contract was never written until the applicant failed to raise the balance of the foreign currency. Then, for convenience, the first respondent alleged breach of the written agreement.

Assuming that I have erred in holding that the written agreement was concluded without the necessary animus and is thus not binding between the parties, I still would have refused the applicant an order of specific performance on the same.

By his own confession, the applicant is in breach of the agreement. It was a specific term of the agreement that the purchase price in full be paid within five working days of the agreement. Failure to pay within the stipulated period would render the agreement of no force and effect. Thus, the failure by the applicant to make the stipulated payment on due date made the agreement lapse ipso facto. At the time he brought his application to court, the contract had long lapsed and could not be revived for enforcement.

SC21-09 : ZIMBABWE EXPRESS SERVICES (PRIVATE) LIMITED vs NUANETSI RANCH (PRIVATE) LIMITED
Ruled By: ZIYAMBI JA, GWAUNZA JA and GARWE JA

This is an appeal against the decision of the High Court dismissing with costs the appellant's claim for delivery of two hundred heifers and two hundred steers. The background to this matter is as follows; At the relevant time, Nuanetsi Ranch (Pvt) Ltd (“the respondent”) was one of the largest cattle breeders in the country. During 2003, the respondent ...

This is an appeal against the decision of the High Court dismissing with costs the appellant's claim for delivery of two hundred heifers and two hundred steers.

The background to this matter is as follows;

At the relevant time, Nuanetsi Ranch (Pvt) Ltd (“the respondent”) was one of the largest cattle breeders in the country. During 2003, the respondent experienced acute cash flow problems as a result of which a decision was taken, by management, to dispose of some of the cattle in order to raise money. On or about 7 May 2003 the respondent entered into a written agreement with the appellant in terms of which the respondent sold to the appellant a total of four hundred cattle consisting of two hundred heifers and two hundred steers. The purchase price was agreed at Z$450 per kilogram for the heifers and Z$500 per kilogram for the steers.

The appellant paid the agreed deposit of Z$15 million on 8 May 2003. In terms of the agreement, the balance of the purchase was payable “on Monday 12 May 2003 or after the animals have been weighed and delivered whichever occurs later.”

The cattle were not weighed by 12 May 2003, and, consequently, the balance was not paid by that date.

In June 2003, the respondent then advised the appellant that it could collect one hundred and twenty steers which the respondent said was equivalent to the deposit of Z$15 million previously paid.

At the hearing of the matter before the court a quo, the court found that the cattle had been weighed on 16 May 2003, and, that although the appellant had been advised of this fact no payment had been forthcoming despite numerous visits and telephone calls by the respondent's Managing Director. The court also found that the respondent had cancelled the contract and that it had done so by implication. Consequent upon these findings, the court a quo dismissed the appellant's claim with costs.

It is against this order that the appellant has appealed to this Court.

In its grounds of appeal, the appellant has raised various issues. These are that the court a quo erred:

(1) In finding that the cattle were weighed on 16 May 2003 and that the appellant was advised of this fact and the need to pay.

(2) In finding that the respondent cancelled the contract between the parties by implication.

(3) In not making a finding whether the respondent placed the appellant in mora.

(4) In declining to grant the appellant an order of specific performance.

I propose to deal with the first two grounds together as they are inter-related and arise from the same set of circumstances.

There is a dearth of evidence as to what happened exactly after the payment of the deposit of Z$15 million was made. The respondent says the cattle were weighed on 16 May 2003 after which the appellant was then advised of the fact. How the appellant was advised was never clarified during the trial. The witnesses who gave evidence for the respondent told the court a quo that the invoice was faxed to the appellant.

A copy of the fax slip was, however, not produced to confirm this.

The witnesses further told the court that the invoice had been sent by fax and the original by post and that one Betty Mudenge had done so. Betty Mudenge was not called to testify to this fact.

At the end of the day, therefore, all that was before the court a quo was an unsubstantiated claim that an invoice had been forwarded to the appellant on or about 16 May 2003.

On the basis of such evidence, the court a quo had no basis for finding that the invoice was forwarded to the appellant on or about 16 May 2003 and that the appellant, having seen the invoice, failed or refused to pay. Clearly, there was no such evidence before the court a quo.

There was evidence, however, that there were numerous visits and telephone calls by the respondent's Managing Director to the appellant's offices. I agree with the trial court that the cattle were in fact weighed at some stage and that, as a result, the respondent's Managing Director then made numerous calls in order to get payment.

It is unlikely that the respondent's Managing Director would have behaved in such a fashion if in fact the cattle had not been weighed. However, it is unclear when he made the calls or paid visits to the appellant's offices.

The evidence on record shows that what next happened was that the respondent wrote to the appellant on 12 June 2003. In that letter, the respondent advised the appellant that the deposit it had paid was equivalent to one hundred and twenty steers and that an invoice to that effect was attached to that letter. The letter was received and responded to by Mr D G Lupepe, the appellant's Managing Director. In his response, Mr Lupepe accepted the one hundred and twenty steers but rejected the suggestion that there should be a fresh quotation in respect of the remainder of the cattle.

I am prepared to find, on the evidence, that the cattle must have been weighed and the appellant notified on an unknown date but before 12 June 2003. The appellant, it is common cause, did not pay.

The question that now arises is whether the contract was properly cancelled.

It was the evidence of the respondent's Managing Director that the cancellation was implied from the letter of 13 June 2003. In other words, it was accepted that the respondent did not explicitly cancel the contract.

In its submissions, the appellant says cancellation by implication is unknown at law. The respondent disagrees.

It is clear that in its letter of 13 June 2003 the respondent was suggesting that it was prepared to let the appellant take delivery of one hundred and twenty steers against the deposit of $15 million previously paid. The remark by the respondent that “if you need more cattle, you are free to contact us and we give you a fresh quotation” suggests that the respondent considered, at that stage, that the contract was no longer in existence.

The appellant's immediate reaction was that the contract was still in force and that the respondent should comply with that contract.

The position is now settled that:

“Notice of cancellation must be clear and unequivocal and takes effect from the time it is communicated to the other party…,.”

R H CHRISTIE, The Law of Contract in South Africa, 3ed…,. See also Du Plessis v Government of the Republic of Namibia 1995 (1) SA 603…,.

A notice of intention to cancel must be such that the other party is or ought to be aware of its nature, but it is not necessary to use the word “cancellation.” The intention to cancel may be made sufficiently clear in other ways; KERR, The Principles of the Law of Contract, 4ed…,.

On the evidence, the respondent did not cancel the agreement in clear and unequivocal terms. Indeed, this is common cause. The respondent's evidence was that the cancellation was implicit from its letter of 13 June 2003.

In that letter the respondent wrote:

“Find attached your receipt for the 120 steers which you purchased from Nuanetsi Ranch. If you need more cattle, you are free to contact us and we give you a fresh quotation.”

This letter clearly implied that the contract was no longer in existence and that if the appellant required to purchase more cattle a fresh quotation would have to be provided.

Indeed, the appellant understood the letter to mean that the contract was no longer in existence, and, for that reason, wrote back to say that as far as the appellant was concerned the contract was still binding.

The question that now arises is whether, in law, a contract can be cancelled by conduct. Although the appellant has submitted that cancellation by implication is unknown to law, the question really is whether cancellation can be by conduct.

In Du Plessis v Government of the Republic of Namibia 1995 (1) SA 603…, the Namibian High Court accepted that a summons claiming damages was an implied notice of cancellation. The decision to cancel a contract may also be by conduct – see KERR, Principles of the Law of Contract, 4ed…,.

Indeed, repudiation of a contract by the defaulting party may be by words or conduct justifying cancellation by the aggrieved party; KERR, Principles of the Law of Contract, 4ed…,.

If the defaulting party can repudiate by words or conduct, surely, the aggrieved party should be able to terminate the contract by conduct too.

Suppose that the defaulting party has evinced an intention to repudiate the contract. Suppose too that the aggrieved party accepts such repudiation, and, by his conduct, clearly evinces his view that the contract has terminated. Would one not talk of termination in such a case? The answer, in my view, is in the affirmative.

As in all cases, the circumstances must be such that that is the only reasonable inference that may be reached. In such a case, I would have no difficulty in describing the contract as having been terminated by conduct.

Considering the circumstances of this case, I would have no difficulty in concluding that the respondent's Managing Director was in fact saying the contract had come to an end and that if the appellant wished to buy more cattle, then it would have to enter into a new agreement. I find, therefore, that the respondent did, in fact, cancel the agreement although it did not do so expressly.

The question that now falls for determination is whether the respondent lawfully terminated the agreement, and, in particular, whether the appellant had been placed in mora.

It is clear from all the facts of the case that the respondent was in financial dire straits and required payment as a matter of urgency. Clearly, therefore, this was a contract in which time was of the essence. However, since the cattle were not weighed by 12 May 2003, no time had been fixed within which payment had to be made.

In cases such as the present, the general rule is that:

“When the contract does not fix a time for performance there can be no mora ex re, only mora ex persona, so a demand by the creditor is necessary in order to place the debtor in mora…,.”

R H CHRISTIE, The Law of Contract in South Africa, 3ed…,.

The view has been expressed in several decided cases that no demand is necessary to place the debtor in mora when no time for performance was stipulated but it is clear that immediate performance was contemplated; R H CHRISTIE, The Law of Contract in South Africa, 3ed…,.

This view does not appear to correctly reflect the law as it currently stands. The present position is that:

“When no time for performance is fixed but time is of the essence, the debtor is not in mora and the creditor cannot cancel for non-performance unless a proper demand for performance has been made….,. The concept of time of the essence relates to the consequences of a breach and not to the breach itself, so if no time is fixed there can be no breach by non-performance, whether or not time is of the essence, until the creditor has informed the debtor when he maintains performance is due.” R H CHRISTIE, The Law of Contract in South Africa, 3ed…,.

In the present case it is clear that the appellant was never placed in mora.

The respondent proceeded to cancel the agreement but did not place the respondent in mora. In the circumstances, the contract was not lawfully terminated and therefore continued to subsist.

HH202-10 : OBRIDGE ENTERPRISES (PVT) LTD vs PULWICK ENTERPRISES (PVT) LTD
Ruled By: KUDYA J

The plaintiff asked for interest and costs on a legal practitioner and client scale. As far back as 5 November 2009, the plaintiff placed the defendant in mora. It will be entitled to interest in terms of the summons.

HH227-10 : MIKE MAKOPE vs GEOFFREY DZUMBUNU and REGISTRAR OF DEEDS N.O. and MINISTER OF LOCAL GOVERNMENT
Ruled By: MAVANGIRA J

The plaintiff issued summons in which he claims for an order setting aside the cancellation of an Agreement of Sale between him and the first defendant and an order for specific performance for the delivery of the property, being a flat called Block 12, Room 93, Mufakose Flats. He later, by consent, amended his claim by adding ...

He later, by consent, amended his claim by adding an alternative claim for damages if the relief of specific performance cannot be granted to him.

During the trial, and as the plaintiff gave his evidence, he indicated that he was abandoning the claim for specific performance. As a result, the outstanding issue for the determination of this court is the claim for damages.

The quantum of damages claimed in terms of the amendment is the amount of ZW$40,000,000,000= or the value of the property at the time of judgment whichever is greater. However, during the trial the parties advised the court that they had agreed on the quantum of damages in the event that the court found the first defendant liable to pay damages to the plaintiff. They advised the court that they had agreed that the quantum of damages be the amount of US$22,000=.

The following issues were referred for determination at trial:

“1. Whether Denrose Agent was an agent for plaintiff and or defendant.

2. Whether or not the oral agreement was entered into by the first defendant and plaintiff prior to 6^th September 2006.

3. Whether or not the oral agreement of sale entered into between the first defendant and plaintiff is valid.

4. Whether or not the plaintiff entered into a written agreement of sale with the first defendant. If so, what were the terms of the agreement?

5. Whether or not the plaintiff honoured all his contractual obligations.

6. Whether or not the cancellation of the agreement is valid.

7. Whether or not the cancellation of the Agreement of Sale complies with the Contractual Penalties Act [Chapter 8:04].

8. Whether or not the plaintiff is entitled to have the property ceded to him.

9. What order should be made as to costs?”

The pertinence of the above issues will emerge from the evidence that was adduced before the court as detailed below.

One Memory Chatambudza Makope was the first witness to give evidence on behalf of the plaintiff. His evidence was to the following effect. He was involved in all transactions involving this matter and was always acting on behalf of his brother, the plaintiff.

He produced a special power of attorney executed in his favour by the plaintiff.

The plaintiff, whilst in the United Kingdom, saw an advertisement in a newspaper to the effect that the immovable property in issue, being a flat in Mufakose known as Block 12 Room 93 was on sale in Zimbabwe. The advert was allegedly placed in the said newspaper by estate agents known as Denrose Real Estate (Denrose). The plaintiff asked the witness, who was in Zimbabwe, to go to the offices of Denrose Real Estate and see one Patrick Disban (Disban) in connection with the advertisement. The witness went to the offices of Denrose Real Estate together with his parents. Patrick Disban indicated that he was already waiting for the witness' arrival. Disban then gave the witness an Agreement of Sale (exhibit 2) in respect of the said property and the witness signed on behalf of the purchaser.

The first defendant was reflected on the agreement as the seller of the property.

The purchase price for the property was $6,500,000= (Zimbabwe currency). The plaintiff made payments from the United Kingdom directly to Denrose Real Estate and Patrick Disban would advise the witness and family accordingly whenever such payments were received. The witness did not receive any receipts in respect of any such payments from Denrose Real Estate. He produced a print-out (exhibit 3) purportedly made by Denrose Real Estate and handed to him which reflects that the plaintiff had made a payment of $6,500,000=; that interest accumulated after investment was $698,082=19; that the purchase price after interest was added on was $7,198,082=19; that to make the purchase price of $10,000,000=, the balance to be paid was $2,801,917=81.

Towards the liquidation of the balance of $10,000,000= the plaintiff made two payments directly to Denrose Real Estate in the respective amounts of $1,196,000= and $800,000= as reflected in exhibit 4 being copies of the relevant receipts.

When the witness inquired why the purchase price had changed to $10,000,000= from $6,500,000= Patrick Disban advised him that as he could not release the money paid as purchase price by the plaintiff to the first defendant before cession was effected, the seller had indicated that because payment of the purchase price was taking long, he had increased the purchase price to $10,000,000=.

Patrick Disban also advised him that the plaintiff had agreed to pay the revised amount.

The witness said that he saw the cession form, exhibit 5, sometime in December 2006 or January 2007. Section 1 of the cession form headed “To be completed by Cedant” was filled in, in the name of the first defendant but was not signed by the first defendant in the space provided for his signature. There is what purports to be a witness' signature and which appears to be the same signature as appears on the Agreement of Sale as that of the witness to the seller's signature thereon. The cession form purports to have been signed by the said witness on 25 September 2006, the same date on which the Agreement of Sale was signed by the seller and his witness. The other sections of the cession form meant for completion by the cessionary, the local authority and the Ministry of Local Government, Public Works and Urban Development were not completed.

It was also the witness' evidence that sometime in December 2006 or January 2007 Patrick Disban gave his father the keys to the flat and since then his father has been in control of the flat to this day.

The witness never had any dealings with the first defendant.

One Mr. Zimbudzana (Zimbudzana), also of Denrose Real Estate, then took over from Patrick Disban. He appeared to occupy a more senior position to Disban. When the witness inquired with him why cession was never completed, Mr Zimbudzana said it was because the first defendant had an outstanding debt that he had to pay to the Ministry of Local Government first before cession could be effected. Thereafter, the witness and his father would regularly go to the offices of Denrose Real Estate and they would be told that the first defendant was in Bulawayo and would be given another date when he would allegedly be in Harare for purposes of effecting the cession. This happened on a number of occasions but cession was never effected.

The witness disputed that Denrose Real Estate was the plaintiff's agent and said that the plaintiff never got his money back from Denrose Real Estate.

The witness produced, as exhibit 6, a letter dated 7 February 2007 from the first defendant's legal practitioners to the plaintiff's legal practitioners. The letter states, inter alia, that the agreement that the plaintiff was seeking to enforce was formally terminated and cancelled by the first defendant and that this was communicated to the plaintiff “through the agents Messrs Renson Real Estate.” The letter further states that the termination was occasioned by the plaintiff's failure to meet the pertinent terms of the agreement and that the first defendant had instructed them to demand that the plaintiff vacates and hands over the keys to the premises failing which legal proceedings would be instituted for the said relief.

The plaintiff then communicated with legal practitioners and since then the witness was not aware of any further attempts thereafter to evict the plaintiff.

When the keys to the flat were handed to his father by Denrose Real Estate, the indication made was that they could have the keys as they had paid in full for the flat and the only outstanding issue was the cession. He disputed the suggestion made that the keys had been given to them only for purposes of viewing the property. He said that they had viewed the property in September 2006 and were not given the keys then. He was not at any time given any written notice that there was a breach on the plaintiff's part which was to be remedied.

With regards to the contents of exhibit 3, the witness said that neither the plaintiff nor he instructed Denrose Real Estate to invest the money and that Denrose Real Estate was supposed to pay the money to the first defendant.

The witness produced as exhibit 7 a letter dated 9 November 2007 from the Ministry of Local Government, Public Works and Urban Development stating that the Ministry would not consent to the cession of the first defendant's rights and interests in the property to the plaintiff. The witness said that it was because of that letter that the plaintiff is now only pursuing the claim for damages only. It was at this stage that both legal practitioners advised the court that they had agreed that if the alternative order for damages is granted the award should be in an amount of US$22,000.

The witness said that he does not know the date when the amount of $6,500,000= was paid by the plaintiff into Denrose Real Estate's account. (NB) They only received the information from Denrose Real Estate that that the amount had been paid and when they asked for cession to be effected, after payment was made, the agent told them that they were waiting for the person who was going to come from Bulawayo (presumably Felix Dzumbunu) to sign the cession forms.

The second and last witness to testify for the plaintiff was Tawona Mike Munetsiwa Makope. He is the father of the last witness and the plaintiff. He said that after the plaintiff had seen an advertisement in the newspaper, while he was in the United Kingdom, he telephoned him and asked him to go and see one Patrick Disban at Denrose Real Estate. Patrick Disban took them to view a residential flat. After that, and on 4 September 2006, Memory Chatambudza Makope, the last witness, signed an Agreement of Sale, exhibit 2, in his presence. They were told to go back home and return the following day in order for cession to be effected. When they went back to Denrose Real Estate the following day they were told that Mr. Dzumbunu, from Bulawayo, had not arrived to attend to the cession. They were told to come back the following day. They did and were, again, told that Mr. Dzumbunu had not yet come from Bulawayo but had made arrangements with his brother, one Geofrey Dzumbunu who was said to stay in Sunningdale. The witness and members of his family went back to Denrose Real Estate the following day, and, again, there was no attendance by the seller.

To date, cession has not been done.

The witness said that when they asked Mr. Zimbudzana, of Denrose Real Estate, why cession was taking so long, he said that they had discovered that Mr. Dzumbunu, of Bulawayo, owed the Ministry of Local Government some money in respect of the flat. Thereafter, he was advised that Mr. Dzumbunu had settled what he owed the Ministry and that cession was imminent - but cession did not take place.

In November, the witness was given the keys by Patrick Disban who told him that the flat was now theirs and that cession would be done later. At the end of November the witness went to the flat and found papers from the Municipality for payment of rates, water, electricity and rentals. He took the papers to Mr. Zimbudzana who told him to pay the bills as Mr. Dzumbunu was not going to do anything about them. All in all the witness paid Z$100,000=. He did not move into the flat at that stage as he was waiting for cession to be done. He later took occupation of the flat through his nephew who moved in at the beginning of January 2007.

When the witness went back to Denrose Real Estate to find out when cession would be done Mr. Zimbudzana showed him exhibit 3 reflecting that the plaintiff had paid an amount of Z$6,500,000=. He said that he paid the monies reflected in the two receipts on exhibit 4 and that the money was not returned to him at any stage. Even though the agreement provided that occupation of the flat would only be after cession, he took occupation because the agent from Denrose Real Estate told him to do so as there was nothing to wait for, the delay in having the cession done having been caused by the other party. Mr. Zimbudzana told him that if there was any money owing by the plaintiff to the first seller he would have advised the witness.

The plaintiff's case was closed after this witness' testimony.

The first defendant then gave evidence to the following effect. He is the present leaseholder (of rights and title) in respect of the property in issue. He acquired the property after making application to the City of Harare after which he was called to an interview by the Ministry of Local Government. Thereafter, the flat was allocated to him.

Although he is not privy to everything that transpired concerning the Agreement of Sale, he agreed to the property being sold.

He stayed in the flat for one and half years but it became too small for his family. He acquired another property and built a house big enough to accommodate his family. He then decided to give the flat to his brother, Felix, who is based in Bulawayo as he used to have accommodation problems when he came to Harare. After some time had elapsed Felix said that he wanted to sell the flat and he gave Felix the go-ahead to sell the flat and deal with the flat as he saw fit.

Under cross examination, the witness was unable to say off-hand the terms of his lease with the City of Harare. He said that there was no paperwork to show that he had ceded his rights to Felix Dzumbunu. He said that exhibit 7, the letter from the Ministry of Local Government, was incorrect in stating that the Ministry entered into an Agreement of Sale with him on 23 September 2006. Initially, the witness said that he did not sign any cession forms. When he was shown exhibit 5 he said that he did not remember signing it. When he was then asked to compare the signature thereon with that on the Agreement of Sale, he then said that the signature was his. He also said that when he signed the Agreement of Sale he did not read it. He received no money from Felix for the property. Felix told him that the people were crooks and that no money had been paid. He also said that the address given in the Agreement of Sale as his address is in fact Felix's address. The address is in Harare and not in Marondera as it states. The two mobile phone numbers recorded thereon are for his brother and him respectively. He does not know and did not have any dealings with the people from Denrose Real Estate and that the agreement was brought to him for his signature by his brother. He said that from the time that he gave the property to Felix he has no knowledge about the movement of the flat keys to Denrose Real Estate and has no knowledge of any other events that transpired. He also said that he started living at his new home in 2004 or 2005 and by then he had already signed the Agreement of Sale. When he signed the Agreement of Sale the flat was still registered in his name at the Ministry of Local Government.

Felix Dzumbunu was the next witness for the first defendant. He is based in Bulawayo. His evidence was to the effect that he is familiar with this matter. The first defendant is his brother. About ten years ago the first defendant, who was renting the flat in question from the Ministry of Local Government, offered the flat to him as it was no longer suitable for his needs due to the size of his family. He accepted the offer which included the responsibility to choose who occupies the flat, to pay rentals and any dues relating to the flat to the relevant authorities and assume all risk in relation thereto. The first defendant however remained, and still remains, the leaseholder of this immovable property.

Sometime in July or August 2006 the witness decided to dispose of the flat. The first defendant was agreeable to the idea. The rest of his siblings were also involved in discussions concerning the witness' decision. It then happened that one distant cousin of the witness, whilst having drinks somewhere in Mufakose where he lives, mentioned this to Patrick Disban of Denrose Real Estate. The witness eventually talked to Patrick Disban and expressed his reservations about the possible complications that were likely to arise as the property was leased to the first defendant. Disban assured him that he was conversant with all the necessary procedures that had to be undertaken in such circumstances. The witness, having been assured that Disban knew all the procedures then gave him the responsibility of ensuring that all the necessary procedures and requirements regarding the transaction were properly attended to. He also gave him the authority to sell the flat. This was about the first week of September 2006. The witness was and remains unfamiliar with the procedures that needed to be done for cession to be effected. They discussed and agreed that the selling price would be between Z$5 million and Z$5,5 million. The discussion took place sometime in early September 2006.

A day after their discussion, Patrick Disban phoned the witness and indicated that he had a prospective buyer for the property. Disban did not name or identify the prospective buyer. They agreed that Disban should prepare a preliminary agreement. Sometime during the first week of September Disban faxed the agreement to him in Bulawayo. The seller was stated to be F. Dzumbunu (the witness) and he asked Disban to correct it. Before faxing the corrected agreement, Disban advised the witness that the buyer had sent money for the purchase price from the United Kingdom. The witness asked Disban to quickly attend to the amendment of the agreement so that he could come to Harare to sign it but Disban took his time, and, in the process, spanning a period of about one and half to two weeks, he was saying that the money which was destined for the account of Denrose Real Estate was lost as the buyer had quoted the wrong name or account number and that the money had to be “resent”.

The witness said that according to their agreement the money was supposed to be passed on to him upon the signing of the agreement. When Patrick Disban said that the money had been lost the agreement had not yet been signed and the witness had had no direct communication with the buyer. After the lapse of the one and half to two weeks period referred to above Disban said the money had been found. The witness was suspicious. Because of the hyper inflationary environment they were forced to re-look at the purchase price which they then agreed to place at Z$6,5 million. He told Disban to prepare the Agreement of Sale. He told Disban that he was going to come to Harare to sign as a witness as the first defendant was not prepared to sign as seller before the witness had signed the agreement as a witness. The witness eventually signed that agreement on 20 September 2006. The first defendant also signed the agreement on the same date. He said that his understanding of the agreement as well as that of Disban was that he was to get the purchase price upon or soon after signing the agreement and that he greatly emphasised the need for him to receive the money expeditiously. His understanding was also that cession would be effected after payment and only after cession would the purchaser take occupation.

The witness did not receive any payment after the signing of the agreement.

When he contacted Patrick Disban, the day after the signing of the agreement, to inquire whether transfer of the money had been made into his account he was surprised to hear that cession had to be done first before payment could be made into his account. Before then the understanding had always been that payment was going to be made first. The witness became suspicious again and thought that Denrose Real Estate possibly did not have the money which had been claimed to have been received from the purchaser for onward transmission to him and on the basis of which information the seller had proceeded with the signing of the agreement. He had been advised that the Z$6,5 million was already available before the signing of the agreement. Thereafter, Disban sent the witness a text message or “sms” asking him to inform the first defendant to go and sign the cession forms in order to speed up transfer of the purchase price into the witness' account before 11.30am on 22 September 2006. He said that he reluctantly asked the first defendant to go to the relevant local authority offices with the agent for the said purpose. At the local council offices, the first defendant was told that an amount of about Z$300,000= had to be paid. The witness said that he declined the purchaser's offer to pay the said amount and that he paid the money himself.

When the witness asked if he could get payment of the purchase price first to enable him to pay the required amount, the response he received was that the cession had to be done first.

A legal practitioner…, who had come onto the scene purporting to be a representative of the purchaser suggested that they pay some Government officials Z$80,000 in order to secure the processing of the documents. He did not agree with the suggestion.

The witness raised with Mr Zimbudzana his concerns over what had happened. He also raised the issue of payment of the purchase price again. Several excuses were raised and sometimes Mr Zimbudzana would avoid talking to the witness when he called from Bulawayo. About the first or second week of October 2006, after several phone calls from both sides, Mr Zimbudzana suggested that they hold a meeting primarily to look at another agreement as the witness was complaining about the delay in payment. Mr Zimbudzana advised him, over the phone, whilst he was still in Bulawayo, that there had been unforeseen delays in paying the money to the witness. He met with Mr Zimbudzana and Patrick Disban in Harare at the Jameson Hotel. They asked him what he thought would be a fair price as at that date. He assumed that they were mandated by the purchaser when they indicated a revised offer of Z$9 million. The witness suggested Z$12 million. They eventually agreed at Z$10 million which was to be paid immediately after the signing of the agreement (NB: No second agreement was ever signed).

It was agreed at the said meeting that Denrose Real Estate would prepare a new agreement by the Monday following the day of the meeting and that it would be faxed to the witness for verification and signing. They also agreed on certain variations to the previous agreement, exhibit 2. They agreed that because of the history of unfulfilled promises, if Z$9 million was not paid within a week or five working days the witness would “automatically” cancel the agreement. He then sought to qualify this by stating that the Z$10 million was split into two amounts; Z$9 million was to be paid immediately upon signing the agreement and the remaining Z$1 million was to be paid at the end of December 2006. The agents said that they had Z$6,5 million in the Bank and were expecting the plaintiff to send through telegraphic transfer the balance to make up the Z$9 million. Payment to the witness would thus be done within a few days. He then also stated that they agreed that the Z$6,5 million was to be paid immediately by way of bank transfer as it was alleged to be available and that as he used the same bankers with Denrose Real Estate it was going to be an internal transfer which would have immediate effect.

Neither the Z$6,5 million nor the Z$9 million was paid or transferred into the witness' account as agreed. The witness said that he never saw any proof that the plaintiff had paid the monies he was alleged to have paid to Denrose Real Estate.

It was also the witness' evidence that at the time that the agreement placing the purchase price was reached the flat was vacant but he had since given the keys to the estate agents before then so that they would be able to show the flat to prospective purchasers. He was not however sure as to how the plaintiff managed to obtain possession and control of the flat but only assumed that the plaintiff was given the keys by the estate agents. He did not authorise the estate agents to give the keys to the plaintiff as he had not received the purchase price in terms of the agreement, and, in terms of the agreement, occupation was supposed to be after payment and cession. He only became aware that the plaintiff had taken control of the flat at the end of November 2006 when he sent one of his employees on a routine check of the property. The witness' employee found a man who claimed to be the plaintiff's nephew. Thereafter, the witness advised the nephew to let the plaintiff know that there were outstanding issues relating to the sale of the flat.

When the witness checked on his bank account during the first week of December 2006, in the normal course of business, he found that an amount of Z$6,650,000 had been transferred into his account. The Bank confirmed that the money had come from Denrose Real Estate. The said amount was credited into his account on 24 November 2006. Noone from Denrose Real Estate had communicated to him about the transfer.

The witness said that he immediately called the estate agents and advised them that he was cancelling the agreement due to their non payment, in violation of their agreement, and that he made this communication during the third week of November 2006 (note discrepancy in dates here). He wrote cheques payable to Denrose Real Estate in the full amount and hand deposited the envelope to Denrose Real Estate offices during the period around 13 and 15 December 2006. He was told that the purchaser would be advised of this development. As his account was later debited he took it that Denrose Real Estate deposited the cheques into its account. There was no further communication between the witness and the estate agents representatives concerning the Agreement of the Sale of the flat.

With regard to cession, the witness said that after signing the cession form the parties proceeded to the City Council offices and to the offices of the Ministry of Local Government where relevant payments were made. The witness said that after he signed the cession form he handed it back to the estate agents who were familiar with the necessary procedures and who were supposed to finalise the matter with the first defendant. As he never saw any document confirming that the cession was finally approved, his assumption was that cession was not finalised or effected.

When asked to comment on exhibit 7, the letter from the Ministry of Local Government, the witness said that he was led by the estate agents to believe that it was possible to sell the property legally. Furthermore, in terms of their agreement (which one, if the written one, is he therefore saying it was not cancelled?) the purchaser ought to have acquainted himself with all the encumbrances that might apply to the property. He said that the date of September 2006 which is stated in the letter is wrong and that to his knowledge the lease agreement between the first defendant and the Ministry of Local Government was entered into in 1994.

The witness said that he did not receive the purchase price of Z$6,5 million in terms of the written Agreement of Sale, exhibit 2, neither did he receive the purchase price of Z$10 million in terms of the subsequent agreement. He did not authorise the plaintiff to take occupation of the flat.

Under cross-examination, the witness said that whilst in terms of the Agreement of Sale, exhibit 2, the payment of the agent's commission by the seller meant that Denrose Real Estate was the seller's agent, it was not conclusive proof that Denrose Real Estate was not also acting as the purchaser's agent as well. Although Denrose Real Estate was supposed to be the seller's agent the actions of Messrs Patrick Disban and Mr Zimbudzana, and the authority that they exercised during negotiations, made it clear to him that they were also acting as the purchaser's agent.

As to why he, as witness would, before the first defendant, as seller, sign the Agreement of Sale he said that that was because he had effective control of the flat as the first defendant had given it to him. He said that although the Agreement of Sale did not specifically make time of payment of the essence of the agreement it was, at all relevant times, the clear understanding that payment was going to be made immediately after signing or within a reasonable time “for as long as it took to effect transfer.”

It was highlighted to him that whilst he signed the agreement as a witness on 20 September 2006 the first defendant only signed as the seller on 25 September 2006. He answered that after signing the agreement he left it with another of his brothers who was to take it to the first defendant for his signature and he was not sure what transpired thereafter.

He was then asked why he would expect payment soon after he had signed yet he was only signing as a witness. His response was that they had always agreed that because of the inflationary environment, payment had to be prompt.

The witness' attention was drawn to the first defendant's synopsis of evidence which states that the parties entered into an agreement on or about 6 September 2006. He commented that this was not correct and said that there was no written agreement on 6 September 2006. He was also referred to paragraph 1 of the first defendant's plea which states that the…, defendant entered into a written agreement of sale on 4 September 2006 and he said that he had no comment to make about that. He said that the only discussions that he ever had concerning the agreement of sale were with the two named gentlemen from Denrose Real Estate. He only had a brief casual discussion with Mr. Makope (senior) but it was not about the contents or details of the agreement of sale.

He was asked why it had taken him until the third week of November 2006 to cancel the Agreement of Sale yet their agreement at the Jameson Hotel meeting was that if payment of Z$9 million was not made within a week thereof, translating to about the third week of October 2006, cancellation would be immediate.

His response was that communication was always being made to establish the reasons for the non-payment. Sometimes the agent would not take his calls whilst at other times he would be told that payment would be made the following day but he eventually decided to cancel as the payment was not made.

It was put to the witness that the plaintiff's stance was that he only paid the additional amount because he wanted the flat and not because of any new agreement.

He said that there was a new agreement which he negotiated with Denrose Real Estate as the plaintiff's agent. He said that Denrose Real Estate represented both the plaintiff and the first defendant. He also said the figure of Z$11 million, in paragraphs 5 and 6 of the first defendant's synopsis of evidence, looked like an error to him and he denied the suggestion put to him that he kept increasing the purchase price for the flat.

The witness was referred to clause 6 of the Agreement of Sale, exhibit 2, which requires the giving of 14 days' notice to remedy a breach and was asked if he had given such notice in relation to the written agreement.

He said that he did not need to give notice as the action that cancelled the agreement came from the plaintiff who made new proposals.

It was put to him that as no notice had ever been given the Agreement of Sale, exhibit 2, had therefore never been cancelled and was still a valid agreement of sale.

He denied this and said that they had entered into a new agreement of sale which naturally superseded exhibit 2. Although the new document that the parties were supposed to have signed was never produced, the parties' actions, particularly the payment of Z$6,6 million into his account by the purchaser and subsequent payments of Z$800,000 and Z$1,1 million were all meant to fulfill the new purchase price.

The witness said that he asked for, but Denrose Real Estate never produced proof of any payment that they allegedly received from the plaintiff. Neither did the plaintiff furnish him with any proof of payment to Denrose Real Estate except for the manually produced exhibit 3 which does not give the dates or methods of payment. He insisted that the plaintiff took occupation in November 2006 and not end of December 2006 or beginning of January 2007 as claimed by the plaintiff.

His attention was drawn to paragraph 3.5 of the first defendant's plea which states that the first defendant allowed the plaintiff to occupy the flat in September 2006. It was put to him that he allowed the plaintiff to take occupation because he had paid Z$6,5 million in terms of the written agreement.

He denied this. He was asked to produce, but could not, documentary proof that the Z$6,6 million was returned to Denrose Real Estate. He was however surprised by the suggestion that the plaintiff had never received that money as the agents in their correspondence never disputed that they had received the money. The said correspondence was not however produced before the court.

As to why the witness did not claim rentals from the plaintiff after he took occupation of the flat the witness said that they instead wanted to take action to evict the plaintiff from the premises. He had however not filed any papers for the eviction of the plaintiff. It was then put to him that that was because the plaintiff was in lawful occupation. He also believed that any such dues or any monies that would have accrued to him through the occupation of the premises by the plaintiff would be taken into account when this court makes its judgment.

The witness also said that he had not called Denrose Real Estate to testify because “to a certain extent the agent was surprisingly hostile” to him and he felt that they were conniving with the plaintiff.

The first defendant's case was then closed....,.

The only written agreement between the parties is exhibit 2 which has already been referred to above. It states in clause 1:

“1. THE PURCHASE PRICE AND TERMS OF PAYMENT

The property is sold by the Seller to the Purchaser for the sum of $6,500,000= (six million five hundred thousand dollars) to be paid as follows:

(a) The purchaser pays cash in the sum of $6,500,000= (six million five hundred thousand dollars) after signing this agreement.

(b) The purchaser shall pay the agent's commission on the sale being $487,500 (four hundred and eighty seven thousand five hundred dollars) to be deducted from the purchase price.

As the agreement does not specify the date by which the purchase price was to have been paid, it can only be presumed that the payment was to be made immediately after the signing of the agreement or within a reasonable time thereafter.

Whist the purchaser signed the agreement on 4 September 2006, the seller signed on 25 September 2006. However, the plaintiff's brother and witness, Memory Chatambudza Makope, said in his evidence that he did not know the date when the amount of $6,500,000 was paid by the plaintiff into Denrose Real Estate's account. They only got confirmation of Denrose Real Estate having received the said amount at the time when they were asking for cession to be effected. It is also the first defendant's uncontroverted testimony that he did not receive any payment from Denrose Real Estate or from the plaintiff as purchase price for the property.

Regarding the allegations made that the terms of the agreement were varied with the seller raising the purchase price to $10 million, note is made that Special Condition “A” in the Agreement of Sale provides:

“A. ENTIRE CONTRACT

The parties acknowledge that this agreement constitutes the entire contract between them and there shall be no variation of it save in writing signed by both parties.”

No proof of variation of the agreement in conformity with the requirements of Special Condition “A” was placed before the court. Yet, by purporting to pay the increased purchase price, the first defendant can only be taken to have thereby conceded that payment of the $6,500,000 was not made in terms of clause 1.

HH63-13 : BLESSMORE Z. MABVURAMITI vs ALTFIN INSURANCE COMPANY
Ruled By: MAFUSIRE J

The plaintiff's argument, in the letter from his legal practitioners, seems to be confusing the issues of interpellatio and mora ex persona. Even though he accepts that he did not pay the last premium, the plaintiff insists on the contract being treated as having remained alive because, according to paragraph 7 of the declaration, ...

The plaintiff's argument, in the letter from his legal practitioners, seems to be confusing the issues of interpellatio and mora ex persona. Even though he accepts that he did not pay the last premium, the plaintiff insists on the contract being treated as having remained alive because, according to paragraph 7 of the declaration, he “did not receive any correspondence from the defendant to inform him of the cancellation of the contract.”

In Asharia v Patel & Ors 1991 [2] ZLR 276 [SC] the Supreme Court held that where the performance of a contract has not been agreed upon between the parties, performance is due on conclusion or so soon thereafter as is reasonably possible. But, in that situation, the debtor does not fall into mora ipso facto. He must know he has to perform. This is known as mora ex persona. It only arises after interpellatio or demand.

In this case, interpellatio or demand on the plaintiff to pay his instalments was not necessary to place him in mora ex persona. By his own admission, the payment of the premium by him was the key to unlock the indemnity due by the defendant. The time for payment or performance had expressly been agreed upon. That the defendant may not have sent him correspondence about the cancellation of the contract does not change the legal position. If a party to a contract has committed a major breach of the contract the aggrieved party does not always have to go to the law; see KERR “The Principles of the Law of Contract”, 3^rd edition…,.. The aggrieved party is entitled to disregard the contract, wait for the defaulting party to sue and set up the default as a defence.

The above position is aptly summarised in a passage on pages 377 to 378 of KERR's book “The Principles of the Law of Contract”, 3^rd edition…,. It reads:

“If a party to a contract finds that the other party has committed a major breach of the contract he does not necessarily have to go to the law. If he is clearly in the right and does not desire to take any action at all he is entitled to disregard the contract. In such a case if he is sued on the contract by the other party that party's default is a complete defence. Thus, in Goldestein and Wolff v Maison Blanc [Pty] 1948 [4] 446 [C], defendant company in Cape Town placed an order for certain ladies' frocks to be dispatched to them from Johannesburg during the months of January or February 1945. They were in fact railed on 16 April 1945 and when the parcel was tendered to defendant in Cape Town it refused to accept it. The plaintiff then instituted action for the purchase price and tendered delivery. HERBSTEIN J found that time was of the essence of the contract [the goods being fashion goods which both parties knew were purchased for resale during a season limited in time] and that dispatch six or seven weeks late was not in compliance with the contract. He found too that;

'There was no obligation on the defendant, as alleged in the replication, to intimate at the end of February that it no longer required the goods. It was entitled to wait until delivery and then to repudiate (Federal Tobacco Works v Barron & Co, 1904 TS 483; Strachan & Co Ltd v Natal Milling Co [Pty] Ltd, 1936 NPD 376].'

This is in accordance with the rule enunciated many years ago by LORD BLACKBURN in The Mersey Steel and Iron Co. Ltd v Naylor Benzon & Co [1894] 9 AC 434 [HL] and adopted in our law:

'The rule of law…, is that where there is a contract in which there are two parties, each side having to do something…, if you see that the failure to perform one part of it goes to the root of the contract, goes to the foundation of the whole, it is a good defence to say, “I am not going to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defeated by your misconduct.'”

In an insurance contract, the failure to pay a premium goes to the root and is the very foundation of the contract. Contrary to the assertion by the plaintiff's legal practitioners, the breach was quite material. There was no question of quasi mutual assent. The defendant had repudiated liability.

Appealed
HH86-13 : GOLDEN MILLION ENGINEERING (PVT) LTD vs METTALON GOLD ZIMBABWE (PVT) LTD
Ruled By: KUDYA J

The third issue that was referred to trial was whether proper demand was made for payment before the issue of summons. It is clear to me that the letter of 21 November 2011 did not constitute a letter of demand. It did not set out the amount of indebtedness. It did not state the due date ...

HB158-13 : KERRIES ENGINEERING (PVT) LTD vs MAKOMO RESOURCES (PVT) LTD
Ruled By: MAKONESE J

ANALYSIS OF THE EVIDENCE 1. Whether it was an essential term of the contract that the plaintiff's crane would be available to offload the defendant's cargo at the defendant's workshop in Hwange by 2pm, Wednesday 25th January 2012. The onus lay on the defendant to prove this issue. The defendant's witness, Victor Mutokonyi, revealed to the court that ...

ANALYSIS OF THE EVIDENCE

1. Whether it was an essential term of the contract that the plaintiff's crane would be available to offload the defendant's cargo at the defendant's workshop in Hwange by 2pm, Wednesday 25^th January 2012.

The onus lay on the defendant to prove this issue.

The defendant's witness, Victor Mutokonyi, revealed to the court that he had told Donovan Jones that ''they wanted the crane as soon as possible.'' These were Victor Mutokonyi's exact words and it seems from all the surrounding circumstances related to the transaction that Donovan Jones could not have, and did not, give the defendant a specific arrival time for the crane.

I am satisfied that it was not established that the crane would arrive at 2pm on the 25^th January 2012. In any event, Donovan Jones told both Victor Mutokonyi and Hennie Diedricks that they had never driven the crane for long distances and did not know how long the journey would take. If time was so critical to the defendant it should have opted for an option that had definite certainty with regards time. I therefore make a finding that the defendant failed to establish that time was of the essence and that the parties did not agree that the crane would arrive at Hwange by 2pm on the 25^th January 2012 as alleged by the defendant.

A J KERR, The Principles of the Law of Contract, 4^th Edition…., states the position as follows:

''It is ascertainable if performance is to take place ''immediately'' or ''as soon as possible,'' is , if one is not talking about contracts such as some cash sales over the counter of a shop, a requirement for performance within a short period which, in the circumstances, is reasonable.''

In casu, it cannot be said that the arrival of the plaintiff's crane at Hwange on the 26^th January 2012, in the morning, was unreasonable regard being had to all the concerns the defendant had been alerted by the plaintiff relating to the movement of the crane for long distances.

The defendant therefore failed to discharge the onus on the above issue…,.

4. Is the plaintiff entitled to claim US$10,649= from the defendant?

I am of the firm view that the defendant's evidence that it tried and failed to contact the plaintiff during the course of the day on the 25^th January 2012 is inadequate to absolve the defendant from having to effectively communicate its intention to resile from the agreement. Apart from the attempt to contact Donovan Jones on his mobile phone, the defendant had access to other cellphone numbers, landline numbers and e-mail. These numbers are all contained on one of the e-mails sent to the defendant by the plaintiff.

I am, therefore, satisfied that the plaintiff is entitled to the relief it seeks as it effectively kept its side of the agreement, and, as a consequence, incurred financial losses. They provided the crane within a reasonable time as contemplated by the parties. They are entitled to payment in terms of the contract.

In the result, I make the following order:

(a) Defendant is hereby ordered to pay the plaintiff the sum of US$10,649= together with interest a temporae morae at the prescribed rate from the 7^th February 2012 to date of final payment.

(b) Costs of suit.

Appealed
SC05-18 : JENNIFER BROOKER and ADRIENNE PIERCE vs RICHARD MUDHANDA and THE REGISTRAR OF DEEDS
Ruled By: GOWORA JA, HLATSHWAYO JA and BHUNU JA

In Smart v Rhodesian Machine Tools Ltd 1950 (1) SA 735 (SR), TREDGOLD J…, accepted the general rule that where a contract fixes no time for performance, the debtor is not in mora until a reasonable time for performance has elapsed and the creditor has demanded performance. This principle, as stated above, was also highlighted in Asharia v Patel ...

View Appeal
HH637-15 : RICHARD MUDHANDA vs JENNIFER BROOKER and REGISTRAR OF DEEDS
Ruled By: MUREMBA J

In Asharia v Patel Others 1991 (2) ZLR 276 (SC)…, 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 ...

Appealed
HB59-09 : DINESH MANILAL NARAN vs RONNAH MAFURIRANO and THE REGISTRAR OF DEEDS
Ruled By: KAMOCHA J

The plaintiff in this matter seeks:-“1. An order to declare that the sale agreement executed between him and first defendant on the 30th of September 2001 on Stand 378, Gorebridge Road, Killarney, Bulawayo is still binding and effectual as between the parties;2. An order to compel the first defendant to ...

The plaintiff in this matter seeks:-

“1. An order to declare that the sale agreement executed between him and first defendant on the 30th of September 2001 on Stand 378, Gorebridge Road, Killarney, Bulawayo is still binding and effectual as between the parties;

2. An order to compel the first defendant to transfer all her rights, title and interests in Stand Number 378 Gorebridge Road, Killarney, Bulawayo to plaintiff.

3. An order authorizing the Deputy Sheriff of Bulawayo to sign all the transfer documents for and on behalf of the first defendant in order to effect transfer of Stand 378 Gorebridge Road, Killarney, Bulawayo to plaintiff.

Alternative to 1, 2 and 3 above -

Plaintiff seeks an order:

4(a) To be refunded by first defendant $1,500,000 plus interest a tempore morae at the prescribed rate, effective from the 31st of October 2001; and

(b) To be compensated by first defendant in the sum of $2,500,000.

5. That the first defendant pays all costs of this action on an attorney and client scale.”

When the parties appeared before a judge for a pre-trial conference it was agreed that the issues to be determined by the trial court be as follows:-

“(1) Did plaintiff advise first defendant that plaintiff was no longer prepared to be held to the contract of sale, and, as a result thereof, did plaintiff cancel the contract of sale?

(2) Was the contract of sale perfected?

(3) Is the plaintiff entitled to tender $3,800,000 plus interest, and, in that event, at what rate is the interest to be calculated?

(3) In the alternative, is plaintiff entitled to:-

(a) A refund of $1,500,000 plus interest calculated from the 31st October 2001; and

(b) Compensation for improvements effects (sic) by plaintiff.”

Each party had the onus to prove two of the above issues. The plaintiff had to prove issues 3 and 4 while the defendant had to prove issues 1 and 2.

The plaintiff gave evidence himself and called two witnesses to support him.

The plaintiff's story was that he was a businessman in Bulawayo. Mr Thokozani Khumalo was his business partner who needed a house. Thokozani Khumalo (“Khumalo”) had been initially leasing House Number 378 Gorebridge Road, Killarney, Bulawayo. The house belonged to Ronnah Mafurirano, the first defendant.

The husband of the first defendant, Mr Davis Sunganayi Mafurirano, was the plaintiff's business associate. They knew each other from the time Davis Sunganayi Mafurirano used to work for CBZ Bank.

After Thokozani Khumalo had expressed his wish to purchase the house he was renting, the plaintiff conveyed the message to Davis Sunganayi Mafurirano who asked the plaintiff to make an offer to him.

When the plaintiff made an offer of $2.5 million, Davis Sunganayi Mafurirano said he needed time to go and discuss with his wife, the owner, and would come back to them.

Davis Sunganayi Mafurirano came back with a figure of $5.3 million which the parties agreed on.

Although the house was being purchased for Thokozani Khumalo, the negotiations were being done by the plaintiff, Naran, while Davis Sunganayi Mafurirano represented his wife, the first defendant.

The parties then had a memorandum of agreement of sale reduced to writing which reads in part:

“Purchase Price and Payment

The purchase price payable to the seller by the purchaser for the said Stand shall be the sum of $5,300,000 (five million three hundred thousand dollars). A deposit of $2,500,000 (two million five hundred thousand dollars) shall be paid upon signing of this agreement and the balance of $2,800,000, (two million eight hundred thousand dollars) shall be paid in monthly instalments of $1,500,000 with effect from on/or before the 31st of October 2001 finishing with the balance of $1,300,000. 30% per month interest shall be paid on $2,300,000.”

The plaintiff engaged Sibusiso Ndlovu to represent him.

The seller signed the agreement on 12 September 2001 while the buyer signed it on 30 September 2001.

The plaintiff conceded that he had failed to pay the deposit as stipulated in the agreement. He should have paid $2,500,000 when he signed the agreement on 30 September 2001, but he, instead, paid the sum of $1,500,000 on 26 October 2001.

The plaintiff was clearly in breach of what the parties had agreed on not so long back.

He however seems to take solace in his belief that the $1,500,000 was not rejected by the buyer despite the fact that it was less than what the parties had agreed and was even paid late. He said the money was never sent back to him or his lawyers.

It was his evidence, that, as a business associate in relation to the buying of paper he had given Davis Sunganayi Mafurirano the sum of one million dollars to import paper. That, however, did not materialize but Davis Sunganayi Mafurirano never returned the $1 million.

The plaintiff seemed to suggest that that amount replaced the shortfall of one million he was supposed to pay as a deposit.

The plaintiff denied ever taking any steps to cancel the agreement. Instead, he said it was Davis Sunganayi Mafurirano who appeared to be bent on cancelling the agreement in his letters to be found on pages 12 and 15 of the plaintiff's bundle of documents.

The first one is undated and addressed to Sibusiso Ndlovu & Associates and marked for the attention of Mr S Ndlovu and reads thus:-

“Dear Sir

Re: Sale of House Number 378 Gorebridge Road, Killarney

Further to our telephone conversation on Wednesday 19 September 2001, I wish to confirm that we would like to give your clients up to 24 September 2001, 1400 hours, to pay their deposit. Failing, which, will give us the freedom to allow those who have shown interest to view the house as from 1000 hours on Tuesday 25 September 2001.

Please be advised accordingly, and your client's co-operation will be assumed.

Yours faithfully
D S Mafurirano”

I pause to observe that the above letter did not spur the plaintiff into trying to pay the deposit timeously at all. Instead, an amount of $1,500,000 was paid more than a month later - on 26 October 2001.

The plaintiff still had problems in paying as agreed prompting Mr Mafurirano to address a letter direct to Thokozani Khumalo on 8 November 2001 in the following terms:

“Re: Sale of House Number 378 Gorebridge Road, Killarney

It is with regret that I write to inform you of our decision to cancel the sale of the above property. The sale of the property was linked to a project we wanted to undertake, but we have had to seek alternative financing sources at higher costs than initially anticipated.

This affair concerning the sale of the above property has been one great problem and waste of time to us, simple because we didn't know that we were dealing with not so-serious people or rather people with other interests but to buy a house.

The negotiations for the price and other conditions were concluded on the 12th September 2001, with Mr Ndlovu, Mr D Naran's appointed representative. The payment of $2.5 million deposit was supposed to be immediate, but we had to wait until 26/10/2001 when a down payment of only Z$1.5 million was made. Promises of similar payments every week were made.

The above payment was based on the price and conditions negotiated, and signed for on the 12th September 2001. Mr D Naran called me to discuss the issue of payment, only to tell me that Mr Ndlovu, his representative, had no authority to conclude the negotiations on price and conditions as he did, as such, he, Mr Naran, was not bound by that agreement, which effectively meant there was no agreement in the first place. In fact, there is no agreement as I write, because Mr Naran nullified the one which we thought was binding.

Further, Mr D Naran, indicated that the house was overpriced, and that the whole deal should be abandoned, and that we were to return $1.1 million, with $400,000,00 being payment for inconvenience suffered by us, and that we were to compensate Mr Khumalo for the improvement done.

Despite good intentions we had, we have finally decided not to dispose of this property because we no longer need to, and, most importantly, the problems we have gone through and which we may go through in future, if we carry on as we have done this far.

In this regard, please forward invoices/receipts for the improvements you have undertaken so far for re-imbursement. Further, as discussed with you before, please, no improvements without consulting us first. You can stay if you like, but please we do not want to chase anybody for rent money.

If, in the future, we decide to sell, you will obviously have the first refusal option.

Regards
D S Mafurirano”…,.

The tone of the above letter reveals that the seller was disappointed by the behavior of the buyer who did not appear to be serious to pay on signature of the agreement. When payment was made, more than a month later, the money was one million dollars less than the agreed deposit. According to the letter, Naran did not feel bound by the agreement as he allegedly accused his lawyer of concluding negotiations on the price and conditions without his client's mandate.

The plaintiff denied ever doing or saying what is contained in the letter. He instead alleged that the negotiations were done by him. He did not remember the meeting of 7 November 2001 where he was alleged to have made those remarks.

It was his evidence that although he may have asked for more time to pay, never did he, at any stage, indicate that he wanted to cancel the agreement. It was the defendant who was bent on wanting to cancel the agreement as illustrated by her letter of 17 October 2001 addressed to the plaintiff's legal practitioners marked for the attention of Mr S Ndlovu which reads:

“Re: Sell of House Number 378 Gorebridge Road, Killarney

Further to our various discussions and letters concerning the sale of the above property. It is now almost the anniversary of the signing of an agreement of sale of the above property whose deposit should have been paid immediately after signing. This has not happened for the past 29 days.

I feel you have had ample time to raise and pay the deposit amount, therefore, I wish to officially inform you of my withdrawal from the agreement. And also to inform you that with immediate effect, Mr Khumalo should give access to people wishing to view the house.

Yours faithfully
R. Mafurirano (Mrs)”

The plaintiff went on to say that he had never instructed his legal practitioner to cancel the contract and accordingly wanted it to be enforced.

He said he did not know anything about the letters of 7 February 2002 and 2 May 2002 addressed to him at 6 Hussor Road, Khumalo, Bulawayo as he did not live there. He had never lived, owned, or used that address.

Under cross examination, Naran told the court that he in fact only became aware of the two letters two weeks before the trial when they were sent to him by his legal practitioner. He was not even aware of the letters when he issued summons and emphasized that he could not have been influenced to issue summons by something that he was not even aware of.

Similarly, he claimed the letter of 8 November 2001, addressed to Thokozani Khumalo, was only brought to his attention two weeks before the trial commenced. It also could not have influenced him to institute these proceedings.

In a nutshell, his erstwhile legal practitioner, Sibusiso Ndlovu, never brought to his attention all these letters.

Naran was being untruthful when he said he was not aware of the said letters before he issued summons. That is contrary to what he said in paragraphs 6 and 7 of his declaration where he says the defendant purported to cancel the agreement by addressing two letters to him, copies of which were attached to the declaration marked “B” and “C”. He said he had never received those letters and had accordingly not been put in mora by the defendant.

As can be seem from his declaration, his concern was that he had not been put in mora since he had not received the said letters.

He was clearly aware of the letters before he issued summons.

Consequently, his suggestion that they were only brought to his attention two weeks before the trial commenced is rejected as it is false and so is his suggestion that he was not aware of the letter of 8 November 2001 and that it did not influence him to institute these proceedings.

Further, Naran could not give a satisfactory explanation, under cross-examination, why he was tendering the balance of $3.8 million for the house if he had treated the $1 million meant for the paper project as part of the purchase price for the house. If what he told the court was true he should have tendered $2.8 million. There would have been no reason for him to tender more than what was due and owing.

In any event, the paper project involved Naran and the defendant's husband and had nothing to do with the defendant herself. Hence the $1 million could not have been treated as part of the price for the house.

Naran was an unreliable witness who was not worth to be believed. His evidence was in conflict with that of Thokozani Khumalo who categorically stated, that, on receipt of the letter of 8 November 2001 he discussed the import of its contents telephonically with Naran who distanced himself from the contents and suggested that the letter should be handed over to their lawyer Sibusiso Ndlovu. Indeed, the letter was handed over to the lawyer as suggested by Naran.

Thokozani Khumalo told the court that Naran never told him that the $1 million was part payment for the purchase price. Instead, he said Naran told him that Davis Sunganayi Mafurirano had borrowed the money.

Thokozani Khumalo said he had effected some improvements at the property. He, however, admitted under cross examination that the improvements were made without the authority from the Mafuriranos.

Mr Sibusiso Ndlovu was a friend and business partner of Naran. He was also a friend of Thokozani Khumalo. He was the legal practitioner who drew up the agreement of sale and signed it on behalf of Naran – the plaintiff.

He knew Mrs Mafurirano who had been introduced to him by one Mathew Nhindiri and also had dealings with her from her bank – CBZ Bank. He said he only got to know Mr Mafurirano at the time he drafted the agreement of sale.

He confirmed that three letters were addressed to his law firm but the fourth one was directly addressed to Thokozani Khumalo, who, without delay, handed it to him.

Thokozani Khumalo was reported as having been still agitated as he handed the letter to Sibusiso Ndlovu who got concerned after going through the contents of the letter. The letter in question is the one dated 8 November 2001 quoted from page 4 and 5 supra.

Sibusiso Ndlovu, like Thokozani Khumalo, telephoned Naran about the contents of the letter. Naran denied having agreed to cancel the agreement and told Sibusiso Ndlovu to contact Davis Sunganayi Mafurirano which he did. He went further to advise Davis Sunganayi Mafurirano that Naran and Thokozani Khumalo were still committed to pay but did not have money at that stage because the money they had expected from the payment of a cement consignment from a Zambian buyer was not forthcoming. But, Davis Sunganayi Mafurirano still allegedly told Sibusiso Ndlovu to pressurize Naran to make payment for the house as he knew Naran's plight. He knew about the Zambian consignment and anticipated that Naran would be paid for the consignment at some stage.

Under cross examination, Sibusiso Ndlovu said he had never regarded the letter of 8 November 2001 as a cancellation of the agreement. He also conceded that the defendant still considered herself bound by the agreement in the letter of 7 February 2002. In it, the defendant wanted to know when the plaintiff was going to pay if he was still interested in the agreement. The letter was written by her legal practitioners addressed directly to Naran and sent to 6 Hussar Road, Khumalo which was a wrong address.

The main body of the letter reads:

“Re: Agreement of Sale with Ronnah Marurirano

We refer to the above matter in which we act for Ronnah Mafurirano with whom you entered into a sale agreement in respect of Stand 378 Gorebridge Road, Killarney.

The purchase price was in the sum of $5,300,000 payable as to a deposit of $2,500,000 and the balance of $2.8 million in monthly installments of $1.5 million starting end of October 2001.

You paid $1.5 million as a deposit on the 26th October 2001. This was $1 million less than the agreed deposit.

You have not paid anything further after the $1 million (sic) referred to.

Our clients instruct us to enquire from you, as we hereby do, whether it is still your intention to proceed with the purchase, and, if so, when they can expect to receive the balance which is overdue. If you are no longer interested in the purchase please advise to enable our clients to move forward. Please let us have your election either way within 7 days of this letter failing which we will approach court for an order to declare forfeit as a pre-estimate of damages the deposit paid.

Yours faithfully
Majoko and Majoko”…,.

The contents of this letter clearly establish that the defendant still considered herself bound to the agreement as at 7 February 2002.

This court, therefore, makes a specific finding to that effect.

Another letter addressed directly to Naran, but also sent to the wrong address, was dated 2 May 2002 and it reads this:-

“Dear Sir

Re: Agreement of Sale with Ronnah Mafurirano

We refer to the above matter.

In terms of your agreement, you were supposed to pay a deposit for the purchase price in the sum of $2,500,000 on the date of your signing the agreement. You failed to do so. In fact, you only paid the sum of $1,100,000 (sic).

Through several letters to you our client informed you that time of payment was of the essence. You have failed to make any other payment from the date you made the first installment. You have breached your contract.

Due to your breach of the contract by failing to pay on time and as stipulated in the contract our client now considers your contract cancelled.

Our client also wishes to notify you that he reserves the right to forfeit the installment paid to her.

Yours faithfully
Majoko and Majoko”

The above two letters were sent to a wrong address although they were directed at Naran personally.

Naran said he had never used that address and had never lived there. He went on to state that he did not even know anyone living at that address.

He was being untruthful on that point, because, when Sibusiso Ndlovu asked him if he had once lived there, or had once used the address, or if he knew anyone at that address, he denied ever living there or ever using the address but revealed that his distant cousin lived there but was quick to say he was not close to him.

Sibusiso Ndlovu's evidence also confirmed that Naran was well aware of the above two letters well before the summons was issued. He was in fact aware of all the four letters quoted in this judgment id est;

(a) The undated letter addressed to Sibusiso Ndlovu & Associates;

(b) The one addressed to Thokozani Khumalo dated 8 November 2001;

(c) The one dated 7 February 2002 addressed to himself but sent to the wrong address; and

(d) The last one dated 2 May 2002 also addressed to himself but sent to a wrong address.

Accordingly, Sibusiso Ndlovu's evidence belies Naran's story that he only became aware of the letters two weeks before the trial commenced.

Sibusiso Ndlovu admitted, under cross examination, that, Naran did not disclose to him that he himself had made a tender of the purchase price to the defendant. He further admitted that Naran, the plaintiff, was in material breach of the agreement. He, however, went on to state that despite the fact that Naran was in material breach of the agreement the defendant kept on accepting and granting extensions.

The defence case was closed after the evidence of Sibusiso Ndlovu.

Mrs Mafurirano, the first defendant, gave evidence and called her husband as a defence witness.

She herself did not have much to say as most of what took place in relation to the agreement of sale was done by her husband. He did all the negotiations relating to the sale.

She told the court that she and her husband had more than one property in Bulawayo. The property at the centre of this dispute was registered in her name. Sometime in September 2001 the couple was offered a farm to buy. They needed money to buy it. They then decided to dispose of one of their properties in order to raise the money. They decided to sell the property in question. The first offer was made to Thokozani Khumalo the sitting tenant.

After sometime, her husband brought an Agreement of Sale drawn up by Sibusiso Ndlovu & Associates legal practitioners for her signature.

She confirmed that the plaintiff was in breach of the contract as he failed to pay the deposit in terms of the agreement. The purchase price was also not paid.

Although she had not been involved in the writing of several letters to the plaintiff by her husband she was made aware of what was going on.

Under cross-examination, she maintained that she had not cancelled the contract despite indications in the letters that it would be cancelled. She said she still considered herself bound by the agreement although her attitude was that the whole deal had taken too long. Her major concern was to have the house sold so that they could raise money for the farm project.

Mrs Mafurirano gave her evidence in a simple and clear manner. She was worth to be believed.

She called her husband who was her key witness as he was the one involved in the negotiations for the sale of the house.

The husband, one Davis Sunganayi Mafurirano, had this to say:

He told the court that Thokozani Khumalo was their tenant who rented the house in question. At one stage, an opportunity arose whereby someone was selling a business and a farm. He and his wife got interested in that property. They decided, as a family, to raise some money by selling their Killarney house in an endeavour to acquire the farm and a business. They agreed, as a family, that the husband was going to handle all negotiations and transactions relating to the selling of their Killarney house.

They then approached the sitting tenant, Thokozani Khumalo, and informed him about their wish to dispose of the house. Thokozani Khumalo was interested in the house but said he would seek financial assistance from Naran who was his employer. Later, Thokozani Khumalo advised him to go and see his lawyer, Sibusiso Ndlovu.

He went and had a discussion with Sibusiso Ndlovu. They agreed on a price of $5.3 million for the house. The lawyer, Sibusiso Ndlovu, undertook to draft an Agreement of Sale and said Davis Sunganayi Mafurirano should return the next day to sign it. He returned to the lawyer's office whereat the lawyer and himself made some amendments to the draft Agreement of Sale. Thereafter, he was given the amended draft Agreement of Sale to take to his wife for signature.

His wife signed the Agreement of Sale on 12 September 2001 and Davis Sunganayi Mafurirano immediately returned it to the law firm for the buyer to sign it. Davis Sunganayi Mafurirano expected the buyer to also sign the agreement on 12 September 2001, but, to his surprise and disappointment, the buyer only signed it 18 days later - on 30 September 2001.

Davis Sunganayi Mafurirano's expectations were that Naran was going to pay a deposit of $2.5 million on signature as stipulated in the Agreement of Sale but that never happened. Payment of the deposit was not made even on the belated date of signature by the buyer.

That caused a lot of anxiety to the Mafuriranos as their plans to purchase a farm and business were thrown into disarray. Davis Sunganayi Mafurirano had to go to a Mr Turner to negotiate with him about the time they could pay him for the farm and business.

The deposit was paid in by Thokozani Khumalo on 26 October 2001. To the Mafurirano's further disappointment, Thokozani Khumalo paid in $1.5 million leaving a shortfall of $1 million. That payment was made on a Friday and Thokozani Khumalo had promised to pay the balance the next Monday but failed to do so.

The witness reminded Thokozani Khumalo of his promise but the reminder produced no result. He then decided to go and see Sibusiso Ndlovu who referred him to Naran whom the witness had not dealt with in relation to the sale of the house.

The witness said he embarked on fruitless efforts to have the outstanding part of the balance paid. He went to Thokozani Khumalo who referred him to Sibusiso Ndlovu who in turn referred him to Naran.

As if that was not enough trouble, Naran surprised him by allegedly saying:-

(a) Sibusiso Ndlovu had no right to enter into the agreement;

(b) He also pointed out that the house was over-priced and went on to say he could get a better house for that price in Ilanda or Famona; and

(c) He finally said of the $1.5 million that had been paid that far $1.1 million had to be returned (without specifying to whom) while the witness kept $400,000 for the inconvenience caused to him.

Naran allegedly made the above revelations at a meeting which he had with the witness on 7 November 2001.

The following day, Davis Sunganayi Mafurirano addressed the letter to Thokozani Khumalo quoted supra…,.

The witness denied that he meant to cancel the agreement by writing the letter. He contended that he was merely conveying to Thokozani Khumalo what his benefactor said at the meeting of the previous day. It was the witness' further contention that it was Naran, instead, who was canceling the agreement by revealing that he was not bound by it since Sibusiso Ndlovu had no mandate from him to conclude the agreement.

It was Davis Sunganayi Mafurirano's evidence that the series of letters written by him and his wife were merely intended to cajole Naran and Thokozani Khumalo into honouring their obligation. But, to their disappointment, no written response came from the buyers and their legal practitioners.

They were further disappointed by the fact that the buyers and their legal practitioners drew up the Agreement of Sale wherein they stipulated conditions which they never met. Hence their ultimate conclusion that Naran had cancelled the Agreement of Sale.

That was what prompted them to instruct their legal practitioners to write the final letter on 2 May 2002…,.

According to Davis Sunganayi Mafurirano, the letter was a mere acceptance of the fact that Naran had cancelled the Agreement of Sale.

Davis Sunganayi Mafurirano vehemently denied the suggestion that he was given $1 million dollars which was applied to the purchase of the house.

Davis Sunganayi Mafurirano was subjected to a lengthy and thorough cross-examination. He came out of the cross examination badly bruised as he could not give direct answers to questions and was evasive.

He, however, made it clear, under cross-examination, that, it was not correct that he had been given the $1 million for the purchase of bond paper which money was later applied to the purchase of the house. He said the issue of bond paper only involved $80,000 and not $1 million as had been suggested by the plaintiff. He then referred the court to a document attached to exhibit 3 reflecting that he indeed paid $80,000 for A4 paper on 18 October 2001.

He further emphasized, under cross examination, that, the various letters written to the buyers were not meant to cancel the agreement but were being used as a means to spur them into making payment. They were just a tactic to pressurize Naran and Thokozani Khumalo to honour their contractual obligations.

Davis Sunganayi Mafurirano maintained that the letter of 2 May 2002 was just an acceptance of the fact that Naran had cancelled the agreement.

There is merit in Davis Sunganayi Mafurirano's conclusion in the light of the following findings made by the court:

This court makes a finding that the plaintiff was in material breach of the agreement right from the onset.

He failed to pay the deposit on signing the agreement as stipulated. When he did so, a month later, what he paid was $1 million less than what the parties had agreed.

Although the plaintiff was in material breach of the agreement, the defendant, through desperation, kept on accepting and granting extensions resulting in the plaintiff taking advantage of her and grossly abused that advantage.

Demands for him to pay, coupled with repeated threats to cancel the Agreement of Sale, did not spur him into honouring his side of the bargain.

This court has already found that Naran was an unreliable witness who was not worth to be believed. He contradicted the evidence of Thokozani Khumalo and Sibusiso Ndlovu. He did not end there. He sought to distance himself from his pleadings.

This court further finds, that, the probabilities favour the story that the plaintiff said he was not bound by the agreement, and, in any event, the house was overpriced and he could get a better house for that price in Illanda or Famona.

Here is why:

He did not want to pay the deposit in terms of the agreement. When he did so, after a month, he only paid $1.5 million instead of $2.4 million. He claimed to have lent Davis Sunganayi Mafurirano a sum of $1 million which sum he alleged had been applied to the purchase of the house. As far as he was concerned a total of $2.5 million had been paid.

It is important to note that Naran said he had offered to buy the house for $2.5 million.

Interestingly, after he had paid an amount equal to $2.5 million he made no further payment towards the purchase of the house despite a series of letters urging him to pay. He was simply unwilling to pay more than $2.5 million.

He denied being aware of any of the letters claiming that he had only become aware of them two weeks before the trial.

He was clearly untruthful.

This court also finds that Davis Sunganayi Mafurirano did not answer questions directly and was evasive. He tended to give unsolicited explanations, but, the court cannot go so far as classifying him as a witness who was not worth to be believed.

He was just a seller who had been disappointed by the buyer who had no respect for the agreement the parties had entered into.

The buyer drafted the Sale Agreement and stipulated conditions therein which he thereafter disregarded with impunity.

The Mafuriranos urgently needed the money to purchase a farm and business which explains why they continued to grant extensions of time within which to pay.

In conclusion, this court finds, in the light of the foregoing, that, the plaintiff stated that he was no longer prepared to be held to the contract of sale hence his unwillingness to make any further payments beyond the sum of $2.5 million thereby cancelling the agreement.

He is therefore not entitled to tender the sum of $3,800,000 plus interest.

He is, however, entitled to a refund of $1,500,000 plus interest calculated from 31 October 2001.

He is further entitled to compensation for proved improvements, if any, effected to the said property.

The plaintiff is to blame for the failure of the Agreement of Sale and should accordingly bear the costs of suit.

SC02-21 : EDDIES PFUGARI (PVT) LTD and EDWARD NYANYIWA vs KNOWE RESIDENTS AND RATEPAYERS ASSOCIATION and NORTON TOWN COUNCIL
Ruled By: PATEL JA, BHUNU JA and BERE JA

This is an appeal against the judgment of the High Court granting an application for specific performance lodged by the first respondent against the appellants. Apart from granting the relief sought, including the payment of damages in the alternative, the court a quo also ordered the appellants to pay costs ...

Background

The first respondent is an association of residents of the Knowe Housing Development based in the town of Norton. These residents purchased Stands on the development site from the first appellant whose business is to develop and sell housing Stands.

The second appellant is apparently the only active director of the first appellant.

The second respondent is the Norton Town Council. It did not appear at the hearing of this appeal, having filed heads of argument indicating that it would abide by the decision of this Court.

The first appellant, as the owner and seller of Lot 2 of Knowe Suburb, entered into sale agreements with the first respondent's members in 1998 (Phase 2) and later in 2003 (Phase 3). The Phase 2 residents complied with their respective agreements by paying the first appellant in full over a period of 30 months. The Phase 3 residents also duly complied by paying the first appellant in full within the agreed period of 60 months that ended on 1 February 2008.

The first respondent averred that the first appellant had breached its contract of sale with the Knowe residents. It filed an application for specific performance or the payment of damages in the alternative.

The appellants opposed the application on the merits and also raised three points in limine at the hearing a quo.

High Court Judgment

The court a quo dismissed all three points in limine.

As regards the first point, relating to prescription, the court found that the permits granted to the first appellant did not give any time limit within which the infrastructural development was to be completed and that the contracts with the residents did not specify any time limits for suing the first appellant. Whatever was to be done by the first appellant was to be done within a reasonable time.

With respect to the second point, the court found that there were no material disputes of fact and that, therefore, it was proper for the first respondent to proceed by way of application rather than by way of action.

Lastly, the court dismissed the third point objecting to the citation of the second appellant in his personal capacity on the basis that he was responsible for the first appellant's administrative affairs.

On the merits, the court a quo found that the members of the first respondent had duly performed their part of the agreements. Conversely, the first appellant had performed some part of the agreements but had not fully complied with the agreements and development permits. The court was not satisfied that this failure to perform was mainly because of inflation. The court further found that the first appellant had failed to establish that performance was now impossible in the era of dollarisation.

If the first appellant had serviced the Stands at the time the purchase prices were paid, between 1998 and 2008, there would have been no difficulty in the performance of the contracts. The court rejected the defence of impossibility of performance on the basis that any hardships now encountered by the appellants were self-created.

Finally, the court held, that, if the appellants were unable to comply with an order for specific performance, they must, in the alternative, pay damages.

In the event, the court ordered the appellants to fully service the Stands in Phases 2 and 3 within 90 days to the second respondent's satisfaction and specifications. The latter was ordered to ensure that the relevant statutory requirements were met. Alternatively, the appellants were ordered to pay the sum of US$192,901,995 to the first respondent's members within 30 days. If they failed to pay, the Sheriff was authorised to attach and sell the appellants' property in execution in satisfaction of the damages awarded. Lastly, the appellants were ordered to pay the costs of suit on an attorney and client scale.

Grounds of Appeal and Relief Sought

The 10 grounds of appeal hereunder are unduly prolix and repetitive. They attack the judgment a quo on the following broad bases:

(i) The appellants were not in breach of their obligations in the absence of a finding as to the time when performance was due, and, therefore, the application a quo was premature and not enforceable.

(ii) The claims in casu were prescribed following the execution of their obligations by the residents, and, in that respect, the court misconstrued the first appellant's contractual obligations and its duties in terms of the permits issued by the second respondent.

(iii) The claim for damages required the quantification of damages by way of action, and, consequently, the claim for damages was not proven according to law.

(iv) The court erred in ordering the second appellant to pay damages personally, and, in so doing, it mis-applied the doctrine of piercing the corporate veil.

(v) The court failed to deal with and pronounce upon the defence of currency nominalism and ordered the payment of damages in the currency of circulation and not the currency of performance.

(vi) The court improperly failed to consider the feasibility of performance against the defence of supervening impossibility.

The appellants pray that the appeal be allowed with costs and that the judgment a quo be set aside and substituted with an order dismissing the application with costs.

At the hearing of the appeal, counsel for the appellants moved an amendment to the relief sought, substituting the prayer for dismissal with one for remittal to the court a quo. Counsel for the first respondent had no difficulty with the prayer being substituted as amended. The prayer was accordingly amended, by consent, to provide for the remittal of the matter rather than the dismissal of the application a quo.

Material disputes of fact relating to performance

Counsel for the appellants submits that the matter should not have been dealt with on motion but as a trial case to resolve the material disputes of fact. Evidence was required in relation to prescription, damages, and specific performance.

In the latter respect, the first respondent has not identified the specific work that still remains to be performed and the extent of the works yet to be done remains in dispute. The appellants did comply with some of the conditions stipulated in the subdivision permit. It was on this basis that the second respondent issued title deeds to almost 90 per cent of the first respondent's members in Phase 2.

Ultimately, so it is submitted, the court a quo did not make any findings on what works remained to be carried out.

Counsel for the first respondent submits that a suit for specific performance does not have to proceed by way of trial. There is no material dispute of fact that the appellants have failed to perform. The works outstanding to be performed are clearly set out in the founding affidavit.

In dealing with this, the opposing affidavit does not dispute those averments but raises issues relating to prescription and currency nominalism.

At paragraph 7 of the founding affidavit, the first respondent sets out the nature of the application a quo, i.e. to compel the first appellant to service Phases 2 and 3 of Knowe Suburb and to complete such servicing within a reasonable time as per the agreements of sale between the first respondent's members and the first appellant.

The servicing that is required is specifically identified as including the grading and tarring of roads, the construction of a proper water drainage system, the laying of a proper water reticulation system, the erection of street lights, and the handing over of serviced Stands to the first respondent's members. Such servicing, so it is averred, must all meet the requirements and specifications of the second respondent, the Norton Town Council, as the supervising authority.

In response, at paragraph 21 of his opposing affidavit, the second appellant avers that the claims of the first respondent's members had prescribed in three years after each member completed his or her own obligations under his or her respective Agreement of Sale.

It is further averred that the first respondent is demanding performance in United States dollars, which is not the currency of performance in terms of the agreements of sale, contrary to those agreements.

Lastly, it is averred that the Phase 2 residents have received title to their properties, which is proof that the second respondent was satisfied that work had been done.

The opposing affidavit is deafeningly silent on the specific servicing to be performed, as identified in the founding affidavit. Again, the nature and extent of the works to be carried out are not refuted and there is no denial of the averment that they have not in fact been carried out.

In paragraph 10.6 of the founding affidavit, the first respondent avers that the Phase 2 residents have complied with their part of the contract by paying the first appellant in full over 30 months.

At paragraph 10.7, it is averred that the first appellant has not fulfilled its obligations in respect of the Phase 2 properties relating to the grading and tarring of roads, the connection of a proper water reticulation system, the construction of a proper water drainage and sanitary system, and the erection of street lights.

Similarly, in paragraph 15.3, the first respondent avers that the Phase 3 residents have made full payment to the first appellant within the agreed period of 60 months.

Again, at paragraph 15.4, it is averred that the first appellant has breached the contracts of sale by failing to finance the project and develop the suburb, i.e. by failing to construct tarred roads, connect water reticulation, drainage and sanitary systems, erect street lights, and construct public facilities and amenities as agreed.

In response, at paragraph 27.3 of his opposing affidavit, the second appellant relates to the use of 150mm instead of 350mm water pipes and the use of septic tanks as opposed to a sewer reticulation system. He further contends that “the roads are there but they have not been tarred because the funds for that purpose were obliterated.”

As regards the Phase 3 development, the first appellant's broad retort, at paragraph 36, is that “the purchase price paid by Applicant's members for purposes of development was obliterated and rendered valueless.”

Having regard to the pleadings, it is abundantly clear that the first respondent did identify the specific work that still remained to be performed and that the extent of the works yet to be carried out was not in dispute. In this respect, the court a quo correctly found that the first appellant had not fully complied with the agreements of sale and relevant permits and that most of the terms and conditions in respect of Phases 2 and 3 had not been complied with.

The court accordingly quite correctly ordered the appellants to fully service the residential areas in Phase 2 and 3 to the second respondent's satisfaction and specifications. Furthermore, in its order, the court clearly particularised the specific services to be provided by the appellants.

To conclude this aspect of the matter, I am unable to discern any material dispute of fact relative to the appellants' failure to perform their obligations in respect of Phases 2 and 3. Moreover, I cannot find any fault with the findings of the court a quo in this regard or its consequent order of specific performance in favour of the first respondent and its members.

Given the absence of any contractually stipulated period for the performance of the first appellant's contractual obligations, it was obviously not possible for the court to make any finding as to when such performance was due. By the same token, it cannot be said that the application a quo was premature and not ripe for enforcement.

It follows that the first and second grounds of appeal are devoid of merit and cannot be sustained.

Prescription of Claims

Counsel for the appellants submits that the question of prescription is also one that raises issues requiring evidence.

The cause of action of each member of the first respondent would vary according to individual circumstances pertaining to questions of demand of performance and the placing of the first appellant in mora. There was, so he contends, no evidence on these issues in the proceedings a quo.

He further submits that the first respondent's members could have become aware of the alleged breaches upon exercising reasonable care within the contemplation of section 16(3) of the Prescription Act [Chapter 8:11].

This was also a factual issue requiring further evidence.

I note that, in motivating the prescription argument, counsel for the appellants appears to have side-stepped the stated grounds of appeal premised on the position that the claims in casu were prescribed, in terms of section 15(d) of the Prescription Act, three years after the first respondent's members had executed their own obligations to pay the purchase price in full.

In any event, counsel for the first respondent submits that there is no merit in the prescription argument.

All the pleadings, including the opposing affidavit of the second appellant, are clear that the contracts of sale do not stipulate any time frames for the completion of works by the first appellant. She further notes that the second appellant appears to equivocate as to the running of prescription.

It is trite that for prescription to commence running regard must be had to the date when the cause of action first arose. This ordinarily occurs when the claimant becomes aware of all the relevant facts grounding his or her claim. Additionally, the claimant must make a demand for performance placing the other party in mora: see Brooker v Mudonda SC05-18.

In casu, the first respondent wrote a letter, dated 12 March 2015, addressed to the appellants, bemoaning the lack of activity on their part and enquiring when they would attend to the servicing of the Stands in Phases 2 and 3.

The contents of this letter obviously served to place the appellants in mora.

The response from the appellants' lawyers, dated 20 April 2015, purported to raise various evidently disingenuous queries as to the current status of development at Knowe Suburb.

On 15 May 2015, the first respondent's lawyers replied to those queries, and, additionally, sought a commitment date from the appellants, failing which the first respondent would deem such conduct as an unwillingness to comply on the part of the appellants and proceed to enforce its rights in terms of the law.

In my view, it was at this stage that the first respondent's cause of action arose against the appellants.

The court a quo relied on this correspondence to find, quite correctly, that the first respondent's claim, having been instituted on 15 December 2017, had not prescribed.

In the premises, I am satisfied that the third and fourth grounds of appeal also lack merit and must therefore be dismissed.

HH27-07 : EDWARD MARUME and ELLEN CHAMUNORWA vs TODD MURANGANWA
Ruled By: MAKARAU JP

This matter came before me in Motion Court as an application for default judgment in terms of Rule 58 of the High Court Rules, 1971.

The facts of the matter, as set out in the plaintiffs' affidavit of evidence, are as follows:

The plaintiffs are husband and wife. On 12 April 2005, they sold their rights, title, and interests in a certain piece of land in Budiriro Township in Harare. The agreement of sale was in writing.

It was a specific term of the agreement that the full purchase price would be financed from the proceeds of a staff loan to be advanced to the defendant from his employer.

It was also specifically agreed between the parties that the purchase price would be paid in full against the registration of a mortgage bond within 21 days of the signing of the Agreement of Sale.

On 13 July 2005, the 21-day period having long expired, the plaintiffs caused a letter to be sent to the defendant calling upon him to rectify the breach failing which the contract of sale would be considered cancelled.

In the letter, the plaintiffs also reserved to themselves the right to claim damages for the breach.

Unbeknown to the plaintiffs, the property had been transferred to the purchaser on 21 June 2005 - weeks before the letter of demand was sent.

Payment of the purchase price was only made on 2 August 2005 less certain deductions that were detailed in the letter from the conveyancers enclosing the cheque.

The cheque was sent back with a letter alleging that the Agreement of Sale had been cancelled and a reversal of the transfer would be sought.

On 3 March 2006, the plaintiffs issued summons against the defendant, claiming the sum of $366,503,000, being damages for breach of contract.

The summons was duly served personally on the defendant at his place of residence.

The dies induciae limited in the summons expired without the defendant taking any steps to defend the claim. The plaintiffs then applied for judgment, arguing that due to inflation, the amount of the cheque sent to them had been eroded by about 75%.

They further argued that the purchase price of the property was meant for an investment in a farming venture where the plaintiffs anticipated growing wheat for the 2005 season. Due to the delay in the payment of the funds, they missed their target and the tractor they intended to purchase had since increased in price.

In support of their claim, the plaintiffs attached a valuation report showing the value of the property as at 28 January 2006, months after the purchase price was tendered to the plaintiffs and months after the purchase price was due in terms of the Agreement of Sale.

When the matter was called up before me as an unopposed application for default judgment, I raised a number of issues with the plaintiffs' legal practitioners and requested him to file heads of argument to address those issues.

Heads were only brought to my attention on 29 March 2007, hence the delay in the handing down of the judgment.

Two issues have exercised my mind in this matter:

(i) Firstly, it is whether by allowing transfer of ownership in the property to pass to the defendant well aware of the breach, the plaintiffs can still claim damages based on the same breach....,.

It is common cause that the plaintiffs sent a letter placing the defendant in mora on 13 July 2005.

At the time, it is further common cause that the plaintiffs had passed transfer of the property sold to the defendant well knowing of the breach. Transfer of the property by the plaintiffs was performance of their side of the bargain under the Agreement of Sale.

It matters not, in my view, that transfer was effected by the conveyancers as such conveyancers were acting on a power of attorney drawn in their favour by the plaintiffs. Such power of attorney was not revoked - even after it became clear to the plaintiffs that the defendant had committed a breach of the terms of the contract of sale entitling them to cancel.

The plaintiffs' legal practitioners did not refer me to any authority where the performance of the contract by the aggrieved party, well aware of the breach by the other, still entitled the aggrieved party to claim for damages based on the same breach.

In my view, the conduct of the plaintiffs amounts to approbating and reprobating at the same time.

By allowing transfer to go through in the circumstances of this matter, the plaintiffs arguably gave out to the defendant that they had condoned the delay in the payment of the purchase price.

While I am of the firm view that the plaintiffs cannot rely on the breach by the defendant to claim damages in the circumstances of this matter, it is not necessary that I resolve the matter on this basis.

View Appeal
HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MTSHIYA J

On 29 July 2008, the plaintiff issued summons against the defendant for the following relief:-

“(a) Payment of the sum of US$750,000.

(b) Interest a tempore morae at the London Interbank rate for United States dollars, 3.5% per annum, from 1 September 2005 to date of payment.

(c) Costs of suit.”

The background to the relief sought can briefly be narrated as follows:-

The plaintiff is a manufacturer and supplier of exclusive range of cables for the transmission and distribution of energy and communications involving entities like the Zimbabwe Electricity Supply Authority, the Rural Electrification Agency, and Tel-One.

The plaintiff's business caters for both domestic and export markets. As at end of 2003, 50% of its sales volumes were largely in exports.

In October 2004, the plaintiff approached the defendant for assistance. The defendant was then operating a foreign currency auction system. Through that system, the defendant made available, each week, from 25% of export proceeds, an amount of foreign currency for which commercial banks would submit bids for their customers. On the basis of those bids, allocations would then be made to the highest bidder(s).

In line with the auction system, on 24 October 2004, the defendant, through its Governor, informed the plaintiff, that, if it (plaintiff) submitted bids to the auction, the defendant would ensure that it (plaintiff) succeeded to the extent of US$150,000 per week to enable it to pay for essential inputs in its operations.

That process was indeed put into place on a weekly basis as from 14 January 2005 up to June 2005.

This was a special arrangement where the plaintiff would, instead of placing a bid, it would merely be advised, through a telephone call, each week, from the defendant's officials, that, the said allocation of US$150,000 was ready. All the plaintiff was required to do, in turn, was to pay the Zimbabwe dollar equivalent within 24 hours. The plaintiff would then, in turn, transfer, through a Commercial Bank, the requisite Zimbabwean dollar amount and details of the foreign suppliers to be paid in foreign currency (i.e from the US$150,000 allocated to the plaintiff).

The allocation of US$150,000, was, with effect from 16 June 2005, increased to US$250,000.

Weekly allocations, at that new level, were made to the plaintiff until the end of July 2005.

The allocation system was continued in August 2005 resulting in the plaintiff making three transfers of undisputed payments in Zimbabwe dollars for the equivalent of the amount of US$750,000 - now being claimed by the plaintiff.

The payments were, in each case, accompanied by details of external creditors to be paid by the defendant.

Notwithstanding the payment of the equivalent amount in Zimbabwe dollars by the plaintiff, the defendant has, to date, not forwarded the foreign currency to the plaintiff's external creditors or refunded the plaintiff with the said amount of US$750,000. In fact, the plaintiff has already, through other sources, paid its suppliers.

The above, in brief, explains why the plaintiff has resorted to this court action claiming the said amount of US$750,000.

With both the plaintiff and the defendant having amended their pleadings at the pretrial conference, it was agreed that the issues for trial were:-

“(a) Whether defendant is contractually obliged to pay plaintiff the sum of US$750,000;

(b) Whether defendant is estopped from denying its obligation to pay plaintiff the sum of US$750,000;

(c) Whether defendant's tender to repay the sums of Zimbabwean currency paid to it by plaintiff is a proper tender which plaintiff is obliged to accept.”

At the commencement of the trial, I indicated to both parties that, given the fact that both parties were generally agreed on what transpired, my view was that the matter could be determined through merely hearing arguments from both sides.

The plaintiff was, however, opposed to that approach and preferred to lead evidence. The defendant then also adopted the same stance.

I therefore had no option but to allow the parties to lead viva voce evidence.

The plaintiff's only witness, Mr E.W. Turina (Turina) said he was the Chief Executive Officer of the plaintiff at the time of the purchase of US$750,000 from the defendant. He had, however, left the employ of the plaintiff in June 2006.

Mr Turina's evidence was, in the main, a confirmation of what was already contained in the pleadings.

He said due to the scarcity of foreign currency, the plaintiff had reached an agreement with the defendant whereby bids from the plaintiff would be given preferential treatment.

He confirmed, that, the information on the allocations was done telephonically and that once an allocation (ie the initial US$150,000 rising to $250,000) was made, the plaintiff was required to pay the equivalent in Zimbabwe dollars within twenty-four hours (24) hours.

The arrangement had worked well from January 2005 until August 2005 when the defendant failed/neglected to disburse US$750,000 to the plaintiff's customers/suppliers despite the fact that the plaintiff had paid the defendant the equivalent in Zimbabwe dollar as per the standing arrangement.

The Zimbabwe dollars had been paid in three transfers on 1, 11, and 19 August 2005. This was to cater for the increased weekly allocation of US$250,000.

He said when the first allocation was not released, after payment of the equivalent Zimbabwe dollars, the plaintiff had asked for an explanation but was promised that the money would be released.

The same had happened with respect to the two subsequent payments.

After failure by the defendant to forward payment to its suppliers, the plaintiff had then borrowed money from other sources so as to meet supplier requirements. This had led to the withdrawal of invoices from the defendant, which invoices were produced as exhibits 1, 2 and 3.

Mr. Turina confirmed, that, before he left the employ of the plaintiff, in 2006, negotiations for settlement were in progress and that the defendant had indicated that it would secure the US dollars at a later stage for the plaintiff or reimburse the plaintiff in Zimbabwe dollars.

He said some of the discussions were not directly conducted with him.

He had, however, later learnt, that, the defendant was not going to pay the US$750,000.

It was his view, that, once the plaintiff effected payment of the equivalent Zimbabwe dollar amount of the allocated foreign currency “the contract was completed.”

He said the company had opted to wait because the Zimbabwe dollar had become worthless.

Mr Turina stuck to his story under cross-examination.

The defendant also called only one witness, a Mr B. Musoso (Musoso).

The witness said he was employed by the defendant as its Head of Treasury Operations. He said the Treasury Division was responsible for settlement and payment of allocations. The auction system, he said, was run by a separate unit which was responsible for the allocations. The role of his department was to communicate with companies and advise them on foreign exchange rates.

He was aware of a list of special allotees who received payment on a weekly basis. These were companies considered key to the national economy. These included the plaintiff.

He said there were thirty-six (36) companies on the special list and the allocations were made by the auction unit. Some of these were Boc Gases, Quest Motors, Unilever, Olivine Industries, Dunlop, National Oil Company of Zimbabwe (NOCZIM) and the fertilizer companies.

Mr. Musoso said there were no formal contracts with the companies on the special list.

The role of his department was to effect payment when funds were made available.

The witness said his department dispatched foreign exchange quotations to various interested companies. The quotations were meant to enable companies to mobilize the necessary funds before allocations were made. He said payment to allotees depended on instructions from what he called “the front office” and the availability of foreign currency.

He said the non-availability of foreign currency explained why the three payments made by the plaintiff, in August, were not honoured.

Mr. Musoso said when the auction system ceased, in August 2005, there were many unpaid beneficiaries from the special list and the defendant decided to reimburse them in Zimbabwe dollars.

He said he had heard that the plaintiff wanted reimbursement in US dollars instead of the Zimbabwe dollar. It was his evidence, that, in reimbursing beneficiaries, the defendant did not take into account the devalued value of the Zimbabwe dollar because there was no financial obligation: “We were just returning whatever had been paid,” he said.

Under cross examination, Mr. Musoso maintained, that, the successful execution of the arrangement relied solely on the availability of foreign currency.

In addition to Mr. Musoso's evidence, the defendant also relied on responses by Dr G. Gono (Governor of the Reserve Bank of Zimbabwe) and Patience Aisam (Manager Compliance–Treasury Division) to the plaintiff's interrogatories filed on 29 September 2009.

Both responses to interrogatories were filed on 17 November 2009.

In his response, Dr Gono stated that he had, upon the specific request and representations from the plaintiff, advised that he would endeavour to source foreign currency for the plaintiff in the amounts mentioned (i.e initially US$150,000 rising to US$250,000).

He said this was in recognition of the strategic role played by the plaintiff in the national economy.

There was, however, no formal binding agreement.

He said he had indeed been advised that “the plaintiff had made payments totaling Z$13,535,110 being the quoted equivalent at the auction rate of US$750,000”, now being claimed by the plaintiff.

However, he said “due to many other competing and pressing national requirements, the defendant was unable to avail the foreign currency not only to the plaintiff but to many other companies in a similar situation who then accepted an offer for immediate refund. Plaintiff declined the refund.”

It was his evidence that his officers had informed him, that, during August 2005, no disbursements were made to any applicant for foreign currency under the auction system.

In response to the plaintiff's interrogatories, Miss Patience Aisam confirmed, that, from “14 January 2005 to August 2005, she would, on a weekly basis, telephone or instruct that plaintiff be telephoned advising it that its application for foreign currency allocation had been approved.”

She also confirmed, that, the approved amounts were US$150,000 per week from 14 January 2005 to mid-June 2005. Thereafter, the amount was increased to US$250,000 per week….,.

Counsel for the plaintiff submitted that the plaintiff's case was clear and did not warrant argument.

He submitted, that, the undisputed evidence of Mr. Turina had confirmed, that, upon approaching the Governor of the Reserve Bank, Dr Gono, for assistance in obtaining foreign currency, the plaintiff had been granted the status of a permanently successful bidder at the weekly foreign currency auctions.

The plaintiff, with that status, did not need to place bids at the auction, but, was merely telephonically advised of the agreed weekly allocations.

The practice, it was submitted, had been successfully operational from January 2005 to July 2005.

Payment(s) requirements were availed to the plaintiff who complied at all times by effecting the payment(s) of the equivalent amount of the foreign currency in Zimbabwe dollars.

The only condition was that “foreign currency will only be released after receipt of Zimbabwean dollars.”

Counsel for the plaintiff submitted, that, after the foreign currency amounts were not paid, in August 2005, the Deputy Governor, Mr Ncube, of the defendant, offered the plaintiff the choice of having the money paid by the plaintiff refunded in local currency or waiting for the foreign currency to be made available. That evidence was not contradicted.

I agree.

Counsel for the plaintiff further submitted, that, in practice, there were two initial contractual arrangements:

(i) The first was the undertaking by the defendant that the plaintiff would be allocated foreign currency without the need to make bids at the auction system.

(ii) The second was that once the plaintiff effected payment of the Zimbabwean dollars within twenty-four hours (ie equivalent of the foreign currency) the foreign currency allocated would be made available.

The plaintiff had, in all three instances in August 2005, complied with the payment requirements.

Counsel for the plaintiff said the third contractual arrangement, novating the August contracts, occurred when the defendant promised to pay the plaintiff the foreign currency when it became available.

The plaintiff had, in turn, agreed to wait for payment until it became necessary to institute these proceedings.

In support of the need for the plaintiff to institute legal proceedings, counsel for the plaintiff quoted from Asharia v Patel 1991 (2) ZLR 276 where the relevant part of the judgment of the former Chief Justice reads as follows:

“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 as 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 or 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….,.”

The promise to refund was made in 2005 and summons was issued on 29 July 2008.

It was counsel for the plaintiff's submission, that, the evidence of the defendant's witness (Mr. Musoso) was irrelevant since he had no direct dealings with the auction system. He said the defendant had failed to call witnesses who could have given meaningful testimony as to what actually happened.

The only credible evidence available was that of Mr Turina, he argued.

Counsel for the plaintiff concluded by submitting as follows:

“1. That, it was the uncontradicted and unchallenged evidence on plaintiff that Deputy Governor Ncube gave an undertaking to pay plaintiff US$750,000 at a future unspecified date.

2. That, this undertaking was accepted by plaintiff and formed a binding contract.

3. That, the binding contract so formed created an obligation on defendant to perform within a reasonable time.

4. That, after the lapse of a time, that defendant has never claimed is unreasonable, plaintiff made interpellatio by the issue of summons, calling for the enforcement of the contract.

5. That, in the alternative, the second contractual event is binding on the parties.

6. In any event, defendant so conducted itself between January2004 and July 2005 as to cause plaintiff to believe that it had a contractual relationship on an occasion by occasion basis; that plaintiff did so believe, and, as a result of defendant's actions and words, plaintiff altered its position to its detriment.

7. That, in enforcing specific performance of a contract, the court is to treat the State like any other individual.

8. That, in the circumstances, defendant has done nothing to prevent plaintiff from being granted a judgment in terms of the summons.”...,.

HB04-15 : BULAWAYO CITY COUNCIL vs TRISHUL PROPERTIES
Ruled By: TAKUVA J

This is an application for summary judgment in terms of Order 10 Rule 64 of the High Court Rules 1971.

The applicant, a local authority is obliged by the law to provide certain services to residents of the City of Bulawayo which services include the provision of road maintenance, refuse collection, and water and sewer services.

The respondent is a resident of the City of Bulawayo and is the registered owner of a certain immovable property otherwise known as Number 58A Robert Mugabe Way, Bulawayo.

In fulfillment of its legal obligations, the applicant provided the services stated above to the respondent and raised service charges amounting to US$20,126=40.

The respondent failed and/or refused to pay the above mentioned service charges and the applicant issued a summons on 10 December 2013 claiming:

(a) Payment of $20,126=40 being the total service charge due and payable;

(b) Interest a tempore morae, at the prescribed rate, from the 30th day of January 2011 to the date of payment;

(c) Costs of suit.

The summons was served on the respondent on 13 December 2013 and it entered appearance to defend on 17 December 2013. On 10 January 2014, the respondent's legal practitioners requested for further particulars as follows:

“To enable the defendant to plead, plaintiff should supply the following particulars;

1. It is alleged in para 3 of plaintiff's declaration that it provided services to defendant, and, as such, is entitled to levy; rates; road levy; water, and other services; of the $20,126=40, how much is for:

(i) Rates;

(ii) Road levy;

(iii) Water; and

(iv) Other services.

2. The said sum is $20,126=40 is for which period (sic), a full itemized breakdown is requested.

3. The claimed sum is said to have a component of rates:

(a) How much is the monthly rates in respective of the property;

(b) Since the rates are a percentage of the value of the property, how much is the property valued at.”

The applicant supplied its further particulars on 18 March 2014 as follows:

“Plaintiff replies to defendant's request for further particulars as follows:

1. Ad paragraph 1 thereof

(i) The charges vary from month to month but charges are calculated as shown from Annexure “A” hereto which represent the charges for 30th November 2013 totalling $770=36 and for 31st December 2013 in the sum of $699=27.

(ii) For the period 30th January 2011 to the 30th November 2013 amounting to $20 215=50. See Annexure “B” hereto”.

2. Ad paragraph 2 thereof

See Annexure “B” hereto.

3. Ad paragraph 3 thereof

(a) $500 see Annexure “A” hereto.

(b) Land valued at $393,500 and improvements valued at $65,000. See Annexure 'A' hereto.”

The respondent, who was supposed to have filed his plea on or before 3 April 2014 in terms of the Rules of this Court, failed to do so.

The applicant applied for summary judgement on 17 April 2014 on the ground that the respondent has no bona fide defence and that the appearance to defend, and the request for further particulars, were nothing more than ways of buying time.

The application was vigorously opposed on the following grounds:

1. Wilful Disregard of the Law

The submission here is that the present application ought to be dismissed for want of compliance with the peremptory provisions of section 279 and 281 of the Urban Councils Act (hereinafter called the Act). Section 281 reads:

“Legal proceedings for recovery of rates

No legal proceedings for the recovery of rates shall be instituted against any person referred to –

(a) In subsection 2 of section two hundred and seventy-nine unless the council has complied with that subsection and the owner has failed, within fourteen days, to comply with the demand served on him in terms of that subsection requiring him to pay the amount stated therein; or

(b) In subsection (3) of section two hundred and seventy nine unless he has failed, within thirty days, to comply with the demand served on him in terms of that subsection requiring him to pay the amount stated therein, subject to the maximum amount provided for in that subsection.”

Section 279 of the Urban Councils Act states:

“Liability to pay rates

1. The person who is the owner of any property on the date on which any rate fixed and levied by the council becomes due and payable shall be primarily liable for that rate.

2. If, on the date on which a rate becomes due and payable, the owner primarily liable has failed to pay that rate, a demand in writing may be served on him requiring him to pay the amount stated therein within fourteen days of the service of the demand.

3. If the owner primarily liable for a rate fails to comply with the demand referred to in subsection (2) then any person who, at any time during the period in respect of which such rate was fixed and levied –

(a) Is the occupier of the property concerned, shall, if a demand in writing is served on him by the council, be liable for such rate together with any other unpaid rates in respect of such property, not exceeding the amount of any rent in respect of such property due by him but not yet paid at the time of the demand and shall thereafter continue to pay such rents to the council until the amount of the unpaid rates has been paid off;

(b) As agent or otherwise, receives any rent in respect of such property, shall, if a demand in writing is served on him by the council, be liable for such rate, together with any other unpaid rates in respect of that property, not exceeding the amount of any such rent paid to him subsequent to that demand, subject to the deduction by the agent of commission due to him for the collection of that rent.

(c) The persons referred to in paragraphs (a) and (b) of subsection (3) shall be liable for the rates to the amount specified therein jointly and severally with each and with the owner primarily liable.

4….,.”

The crisp point made by the respondent is that, in terms of these provisions, it was incumbent upon the applicant to serve the respondent with a demand, in writing, requiring it to settle its dues within (14) fourteen days from the date of such demand.

It was further contended that these provisions are peremptory in that the applicant cannot institute legal proceedings before serving the owner with the demand giving him fourteen (14) days to comply.

In casu, since such a demand has not been issued by the applicant, it has failed to comply with the law and the proceedings are a nullity, so the argument goes.

The respondent relied on:

(a) MAXWELL: Interpretation of Statutes (7th ed)…,.

(b) Nkisimane & Others v Santam Insurance Co. Ltd 1978 (2) SA 430 (A)…,.

The respondent believed that the letter was prepared merely as an afterthought after the summons had already been issued and after the applicant had realized that the failure to comply with the Urban Councils Act was fatal to its case.

This fact, according to the respondent, is supported by the fact that the letter is not signed...,.

The applicant submitted that it wrote and served Annexure C on the respondent. It was further contended that Annexure C complies with the provisions of section 279 of the Urban Councils Act in that it was written at the instructions of the applicant and it is a letter of demand.

Annexure C is a letter of demand dated 13th November 2013 and addressed to the respondent's manager. It states:

“Re: Bulawayo City Council vs Trishul Properties A/C31408503

We act on behalf of the Bulawayo City Council which has instructed us that you owe it rates and water charges amounting to $20,126=40, which sum, despite demand, you have failed and/or refused to pay.

Our client has instructed us to demand from you, as we hereby do, payment of the whole amount outstanding together with interest at the rate of 5% and legal costs.

You are required to settle the debt by no later than the 30th November 2013 or to agree with us acceptable terms of payment by that date, failing which our instructions are that we should issue summons against you without further notice.”…,.

The argument that the applicant had no authority to delegate its power to a legal practitioner does not make sense at all.

Section 281(a) of the Urban Councils Act does not prohibit the applicant from appointing an agent to act on its behalf.

The letter, that is Annexure C, is as good as if it had been written by the applicant itself.

Consequently, I find that Annexure C is a “demand” as contemplated by section 281 of the Urban Councils Act. Therefore, that defence is devoid of merit.

SC37-09 : EDDIES PFUGARI (PVT) LTD vs KNOWE RESIDENTS ASSOCIATION and NORTON TOWN COUNCIL
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

This is an appeal against the judgment of the High Court directing the appellant to fully service residential stands in Phase 1 of the Knowe Housing Development in Norton.

The facts of this case are these:

The appellant, a private company, is a property developer whilst the respondent is an association of residents of the Knowe Housing Development, who, in 1998, entered into agreements of sale with the appellant in their individual capacities for the purchase of residential Stands.

The association was formed by the residents in order to compel the appellant to carry out its obligations in terms of the various contracts it had entered into with the various individuals who form the association.

The High Court found that the appellant had breached the terms of agreement between itself and the residents in regard to Phase 1 of the development. Consequently, the court granted an order directing the appellant to fully service Phase 1 of the housing development within 90 days, and, in particular, to connect to all Stands reticulated water, sanitary systems, tarred roads, and a proper drainage system.

Dissatisfied with that order, the appellant appealed to this Court on the grounds that:

(a) The court a quo had erred in finding that the respondent had locus standi in judicio to institute the proceedings; and

(b) The court a quo had erred in rejecting the appellant's contention that it had complied with its obligations in terms of the relevant Development Permit.

At the hearing of the matter before this Court, counsel for the appellant abandoned the other grounds of appeal and attacked the judgment of the court a quo on the sole basis that there were material disputes of facts which were incapable of resolution on the papers, and, for that reason, the matter should either have been referred to trial or dismissed.

The sole issue for determination before this Court, therefore, is whether the court a quo erred in resolving the disputes raised on the papers without hearing evidence.

In terms of condition 27 of the Development Permit issued to the appellant by the second respondent, the appellant was obliged, at his own expense, to: “provide all infrastructural services viz roads, electricity, water mains, and sewerage disposal, to the specification approved by and to the satisfaction of Norton Town Council and all such services shall be handed over to Council at a date to be agreed upon by the two parties involved.”

In its founding papers before the High Court, the first respondent alleged that the appellant had breached the contract in various respects.

The first respondent alleged that although the appellant had tarred the roads in Phase 1, it had done so in a substandard manner; that no proper drainage system had been constructed; and tapped water was not available at all the Stands. The first respondent further alleged that no street lighting had been put in place and social amenities, such as schools and clinics, were still to be constructed.

In its opposing affidavit, the appellant asserted, that, it had done its best to carry out its obligations under the difficult economic conditions prevailing in Zimbabwe, and that it was on course to completing its obligations.

It further stated, that, although there were no tarred roads in Phases 1 and 2, it had acquired state of the art equipment in order to carry out this task.

The appellant further stated, that, the roads had not been tarred because of the scarcity of diesel and unavailability of tar in Zimbabwe.

However, the appellant also stated, that, the road network in Phase 1 had been done satisfactorily by a Chinese sub-contractor.

The appellant further remarked, that, no drainage system had been put in place because the tarring of the roads had to be completed first. Culverts too were to be constructed after the roads had been tarred. The drainage was not as bad as suggested by the first respondent.

The appellant also stated, that, water mains had been installed and what remained was for the individual Stand holders to apply for connections.

As regards street lighting, the appellant submitted, that, this could only be attended to once the roads had been tarred.

Lastly, the appellant remarked, that, it had not deliberately avoided fully servicing the area but had been constrained by factors beyond its control, and, that, if given three months, it would ensure that the roads are completed.

In its opposing papers, the second respondent highlighted the fact that the appellant had not successfully completed Phase 1, and, therefore, should not have embarked on Phases 2 and 3 of the development project.

In determining that the appellant was in breach of its contractual obligations, the court a quo remarked, at page 6 of the cyclostyled judgment:

“It was quite apparent, from the papers before me, that the first respondent was indeed in breach of the terms of his contract in regard to Phase One of the development.

The applicant, through its members, has complied with their part of the contract and paid for the Stands in full. In my view, they may properly seek an order for specific performance.

In its opposition, the first respondent argued that the court should not exercise its discretion in favour of the applicant as the obligation was too onerous for it to perform. The excuses made by the first respondent, relating to unavailability of diesel and tar, were, in my view, merely an excuse as the applicant could carry out its obligations if it was diligent in its efforts. Whilst the court takes judicial notice of the socio-economic hardships complained of, it also notes that other successful developments have continued in spite of these challenges.

The second issue raised by the first respondent was that there was no timeframe for performance in the permit and they were therefore still in the process of completing the task.

This, in my view, was no defence to the order sought by the applicants.

Whilst it is noted that the permit does not indeed give a time frame within which the infrastructural development must be carried out, it is an implied term of the contract that performance must be conducted within a reasonable time.

In reading an implied term into a contract, the court must of course be bound by the principles set out in case law: see Mullin (Pvt) Ltd v Benade Ltd 1952 (1) SA 211.

The applicants in this case entered into the contracts with the first respondent in 1998. This application was filed on 22 June 2005. Clearly, the time lapse between the time of entering into the contract and time for performance exceeds, by any stretch of the imagination, the definition of a reasonable time.

In my view, a period in excess of six years is no longer a reasonable time - even in these challenging times.”

On the facts of this case, I am in no doubt that the court a quo was correct in determining the dispute on the papers.

The appellant had obligations which it had failed to discharge - even at the time of the hearing of the matter before the High Court in November 2006. The second respondent had still not issued the appellant with a Certificate of Compliance.

The appellant does not dispute, in its papers, that it had not discharged all its obligations in terms of the permit. Instead, the appellant states that it did the best in the prevailing socio economic situation and that it was on course to discharging its obligations under the contract.

The second respondent, in its papers, states that the servicing of Phase 1 had not been completed.

The remark by the appellant, that the drainage is not as bad as portrayed, is an admission that the work was not complete. Indeed, the appellant admitted that work was still to be done in tarring the roads, constructing a drainage system, and providing amenities.

The dispute, on the facts, could be resolved without hearing evidence. The position is now well established that:

“In motion proceedings, a court should endeavour to resolve the dispute raised in affidavits without the hearing of evidence. It must take a robust and common sense approach and not an over fastidious one; always provided that it is convinced that there is no real possibility of any resolution doing an injustice to the other party concerned.”

See Zimbabwe Bonded Fibreglass (Pvt) Ltd v Peech 1987 (2) ZLR 338 (SC)…,.

I agree with the submission by the respondent that the dispute was not so much on the substance but rather on the extent of non-compliance. I find no basis upon which the approach taken by the court a quo can be impugned.

The appeal is without merit. It is accordingly dismissed with costs.

HH801-22 : EQUITY PROPERTIES (PVT) LTD vs AL SHAMS GLOBAL BVI LIMITED and REGISTRAR OF DEEDS N.O.
Ruled By: MANGOTA J

It is..., trite, that, when a court order provides a time limit within which to do something…, such time limits ought to be followed. Failure to comply with such time limits leads to lapsing of the rights conferred therein: The Sheriff of the High Court of Zimbabwe v Madziro ...

HMA02-19 : JETINOS ZIVANOMOYO vs HELLEN DINGANI
Ruled By: MAWADZE J and MAFUSIRE J

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.

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.

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.

An adjunct to the above objection was that, in terms of the Magistrates Court Act [Chapter 7:10], a Magistrates 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 Magistrates Court Act.

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.

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.

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.

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.”

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, in Intercontinental Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd 1993 (1) ZLR 21 (H):

“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.”…,.

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…,:

“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.”

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)…,.

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.

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).

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?

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.

HMA55-19 : GREAT ZIMBABWE UNIVERSITY vs NESBERT MAREVERWA
Ruled By: WAMAMBO J

The applicant seeks a rei vindicatio order. It seeks to recover its property retained by the respondent.

The applicant is a body corporate duly constituted in terms of the Great Zimbabwe University Act [Chapter 25:24].

The respondent was an employee of the applicant holding the position of Chief Security Officer.

The respondent holds property belonging to the applicant, which property the respondent was holding by virtue of his being an employee of the applicant. The property consists of guns, a security motor vehicle and office and gun cabinet keys.

The respondent's contract of employment with the applicant has been terminated....,.

On the merits, the application is for rei vindicatio.

In Chitungwiza Municipality v Maxwell Karenyi HH93-18 TAGU J formulated the requirements of rei vindicatio the applicant must satisfy as follows…,:

“1. That, he is the owner of the property; Jolly Shannon and Anor 1998 (1) ZLR 78.

2. That, at the commencement of the action, the thing to be vindicated was still in existence and the respondent was in possession of the property; Masuli v Jera HH67-07; and

3. That, the respondent's possession is without his consent; Stanbic Finance Zimbabwe v Chivhunga 1999 (1) ZLR 262.”

The respondent avers, that, he is challenging the termination of his employment. That is clearly not material.

When dealing with the same contention, MWAYERA J, in The Minister of Higher and Tertiary Education, Science and Technology Development v Rudolf Pimai Matsanga HH104-19 says as follows…,:

“Whether or not the respondent is challenging the termination of employment is immaterial. The basis of occupation, which is employment, no longer exits, and the owner of property is entitled to vindicate.”

In the case of Montclair Hotel and Casino v Farai Mukutwa HH200-15, MATHONSI J made pertinent remarks emphasizing, that, once the basis of occupation has been terminated then the owner is entitled to vindicate. The Honourable Judge MATHONSI remarked:

“Just from where do former employees think they can derive the authority to hold onto property belonging to a former employer given to them for use during the subsistence of the contract of employment, in the discharge of their duties as employees, after they have lost employment? This matter is one of several of its nature which are now finding their way to the court with alarming frequency of late where a dismissed employee would simply not surrender the employer's property but would cling to it as if life depends on it.”

The above sentiments apply with equal force to the instant matter.

Apparently, as a red herring, the applicant contends, that, the guns in question are registered in his name and he fears that if they get in the wrong hands mayhem may ensure and he will be held accountable.

It is common cause that the guns are owned by the applicant and the respondent's name appears on the firearm certificate as a representative of the applicant.

Apparently, efforts are underway by the applicant to appoint persons to be responsible for the firearms: see the letter dated 4 November 2019 addressed to the Officer Commanding, Masvingo Province, ZRP by the applicant through its Registrar's Office.

Whilst an attempt has been made to justify possession of the keys to the office and cabinet wherein the guns are lodged, the issue of the security vehicle is not addressed in depth by the respondent.

The applicant contends, that, the vehicle in question is a security vehicle and its absence impacts on the security of the applicant's premises.

It is common cause that the guns, the office, and cabinet where they are lodged belong to the applicant. The keys to both the office and gun cabinet belong to the applicant. The same applies to the security vehicle.

It is common cause that the above property existed at the time of action and that the respondent was in possession of the said property. The efforts by the applicant, to have the property retained, has not succeeded. The action by the police is one such result of the applicant's attempt to retain its property. It also reflects that the respondent possesses the property without the applicant's consent.

A somewhat novel argument was raised by counsel for the respondent; it is to the effect that there has not been a demand for the return of the property in question.

A number of letters addressed to the respondent reflect that a request was made for the return of the applicant's property in the possession of the respondent. A letter dated 30 September 2019, addressed to the respondent, reads, in part, as follows:

“Pursuant to our letter dated 25 September 2019 informing you of the abolishment of the post of Chief Security Officer, kindly handover property of the University in your possession to Mr Richard Tivakudze, the Senior Security Officer. For security sensitive items, such as guns and ammunition, kindly do the handover in the presence of the Acting Vice Chancellor, Dr E. Chikodza, Acting Registrar, Mr I. Chinyemba, and Acting Bursar, Mr I. Jamela.”

Following the above letter are other letters addressed to the respondent requesting the handing over of the property in question; see letters dated 10, 21, 23 and 29 October 2019.

In the circumstances, I find that the applicant has proven that he is entitled to the interim relief he seeks. For clarity, I will grant the interim order as prayed for as amended. The applicant appears to have repeated the contents of paragraph 1. To that end, paragraph 2 of the draft order is deleted.

IT IS HEREBY ORDERED AS FOLLOWS:

Pending confirmation or discharge of this provisional order, the applicant is granted the following relief;

1. The respondent be and is hereby ordered to surrender and return –

(a) 3 guns and rounds of ammunition (the details of the guns are listed below);

(a)(i) Revolver Taurus, Serial Number 1290665.

(a)(ii) Shortgun B.S.A. Serial Number 111-3754.

(a)(iii) Pistol Norinco Serial Number 49109461.

(b) Keys to the gun cabinet.

(c) Applicant's vehicle, MAZDA BT50 Registration Number 9417.

(d) Applicant's office and keys; upon service of this order, failing which the Sheriff of Zimbabwe or his lawful deputy be and is hereby authorised to take all the necessary steps to recover the said property from the respondent or any person, whomsoever, is in possession thereof and wherever the property may be situate and return the same to applicant where it shall be kept by the applicant.

2. The applicant and/or his legal practitioners be and are hereby authorised to serve this Provisional Order on the respondent.

HH62-14 : JOHANNES MAKONYE vs KENAE RAMODIMOOSI and ENTREDEV PROPERTY GROUP and C.H. LUKAS
Ruled By: CHIGUMBA J

This is an application in terms of section 34 of the Model Law as set out in the Second Schedule to the Arbitration Act [Chapter 7:15] for the setting aside of an arbitral award dated 23 February 2012, granted by the third respondent.

The second respondent was the applicant's estate agent.

At the hearing of the matter, I dismissed the application with costs on a legal practitioner client scale, being of the view that the application was entirely devoid of merit. I have now been asked to provide detailed reasons for judgment for purposes of appeal.

These are they.

The arbitral award that is sought to be impugned reads as follows:

“IT IS AND IS ORDERED THAT:

1. The termination of the agreement of lease in respect of Number 7 Westcott Road, Mount Pleasant, Harare signed by the parties on the 6th of September 2011 is confirmed.

2. The respondent (applicant in the matter now under consideration) refunds and pays to the claimant the sum of US$16,800 plus interest thereon from the 1st of November 2011 to the date of receipt of payment.

3. The costs of the Arbitrator, amounting to US$2,000, and covered by a deposit paid by the claimant, be refunded to the claimant by the respondent.”

The background giving rise to the dispute between the applicant and the first respondent involved the termination of a lease agreement entered into by the parties on 6 September 2011.

The parties had agreed that the first respondent would occupy the leased premises on 1 November 2011. The premises were under renovation, and the applicant gave an assurance that the renovations would be complete by the date of occupation.

The first respondent paid a sum of US$16,800, being a deposit and six months rent in advance, to the applicant.

Both parties submitted voluminous written statements to the arbitrator, the applicant, as the respondent, on 31 December 2011. The second respondent, the letting agent, also submitted a written statement to the arbitrator, on 9 February 2012.

The arbitrator found, that, the rental amount had been assessed based on the size of the kitchen, which the applicant had promised to extend and make bigger according to the first respondent's specifications.

This is the reason why the first respondent had agreed to pay six months rent in advance.

The applicant was unable to complete the renovations by the agreed date of occupation.

The parties entered into further negotiations which broke down after the applicant demanded more money which the first respondent refused to advance.

On 1 November 2011, the date of occupation, the premises were still under renovation.

The first respondent terminated the lease agreement and claimed a refund of the US$16,800 that had been advanced.

The arbitrator found, that, the applicant's inability to renovate the kitchen by the agreed date went to the root of the lease agreement, and confirmed that the lease agreement had been correctly terminated, and ordered that the applicant refund the monies advanced to him by the first respondent.

The basis of the application to set aside the arbitral award is that the applicant was not given an opportunity to be heard by the arbitrator.

He averred, that, he never agreed that the arbitrator could determine the mater on the papers filed by the parties. He averred, further, that, the third respondent only remitted US$12,800 to him, and that the first respondent had already been reimbursed US$3,840 by the second respondent.

The applicant averred, that, the arbitral award should be set aside on the basis that it had been awarded contrary to public policy in Zimbabwe, and in breach of the rules of natural justice.

The first respondent opposed the application on the basis, that, the applicant had given a mandate to the respondents to file a written report before the arbitrator in an electronic mail dated 7 January 2012.

The first respondent averred further, that, the arbitrator, had, in an electronic mail communication to all the parties, dated 5 January 2012, asked the parties how they wished to proceed and the parties agreed to make written submissions to the arbitrator.

The first respondent pointed out, that, the applicant, in the email dated 7 January 2012, to the arbitrator, stated that:

“…, written submissions only are fine, more focused and cheaper financially and time wise by me.”

The first respondent admitted, that, the amount outstanding was US$12,800 and averred, that, when the arbitral award is registered, it will be registered in that sum.

The first respondent reiterated, that, it was not fatal to an arbitral award if parties agreed to forgo an oral hearing and mandated the arbitrator to make a determination on the basis of written submissions.

The second respondent opposed the application and averred that it had no interest in the outcome of the matter, but merely wished to protect itself against an adverse order as to costs.

The second respondent averred, that, it was given a mandate to manage the applicant's property, Number 7 Westcott Road, Mt Pleasant, Harare, in August 2011.

Pursuant to that mandate, it secured the first respondent as a tenant for those premises. It averred that a dispute arose between the parties which resulted in the first respondent terminating the lease agreement and to demand a refund of rentals and deposit paid in advance.

The second respondent confirmed that both the applicant and the first respondent requested that it submit a written report to the arbitrator....,.

In regards to the merits of the matter, the second respondent averred that it failed to find any justification in the applicant's complaints against its report - which the applicant had specifically requested that it be submitted to the arbitrator.

Copies of e-mails between the parties were attached to confirm the second respondent's version of events.

The second respondent reiterated that the applicant's contention, that it was not given an opportunity to be heard, were entirely devoid of merit....,.

The question that the court must determine is whether the arbitral award handed down by the third respondent is contrary to public policy in Zimbabwe as envisaged by Article 34 of the Model Law, Arbitration Act [Chapter 7:15].

In other words, did the third respondent grant the arbitral award without proper consideration of the terms of the lease agreement between the parties; without affording the applicant an opportunity to be heard; or with fraud and corruption?

Article 34 of the Model Law provides that:

“Article 34 Application for setting aside as exclusive recourse against arbitral award

(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this article.

(2) An arbitral award may be set aside by the High Court only if —

(a) The party making the application furnishes proof that —

(i)…,.

(ii) The party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iii)…,.

(iv)…,.

(b) The High Court finds, that —

(i)…,.

(ii) The award is in conflict with the public policy of Zimbabwe.”

“Article 19 Determination of Rules of Procedure

(1) Subject to the provisions of this Model Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.

(2) Failing such agreement, the arbitral tribunal may, subject to the provisions of this Model Law, conduct the arbitration in such manner as it considers appropriate. The power conferred upon the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence.”

Article 24 of the Model Law provides that:

“Article 24 Hearings and Written Proceedings

(1) Subject to any contrary agreement by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials.”

The test applies to an arbitral award, in order to set it aside on the basis that it is contrary to public policy is that:

“An arbitral decision can only be held to be contrary to public policy if some fundamental principle of law or morality or justice is violated or if it is so defiant of logic or accepted moral standards that the concept of justice in Zimbabwe would be intolerably hurt.”

See Chanakira v Mapfumo & Anor HH155-10; and Husaihwevanhu & Ors v USF Collaborative Research Programme HH237-10, where the court stated that:

“The courts in this country have construed the defense of public policy very restrictively so that the objective of finality to arbitration is achieved.

It follows, that, the grounds upon which an award may be set aside…, are very narrow. The import of Article 34 and Article 36 of the First Schedule to the Act is not to endow the court before which the award is set aside with powers of appeal to determine the correctness of the decision of the arbitrator;…, an award by the Arbitrator is not contrary to public policy merely because it wrong in law or in fact in reaching the conclusion arrived at…, award…, goes beyond mere faultiness or incorrectness and constitutes a palpable iniquity that is so far reaching…,.”

See Pioneer Transport (Private) Limited v Delta Corporation Ltd & Anor HH18-12.

Based on the provisions of Article 19 of the Model Law, I find that it was entirely proper and permissible for the arbitrator and the applicant and the first respondent to agree on the procedure to be followed.

The arbitrator was even at liberty to conduct the arbitration in such manner as it considered appropriate if the parties failed to agree on which procedure could be used (Article 19(2) of the Model Law).

The power conferred on the tribunal included the power to: “determine the admissibility, relevance, materiality and weight of any evidence.”

There is nothing in the papers filed of record which suggests that the arbitrator did not have these powers.

The evidence placed before this court, via copies of electronic mail communication between the parties, clearly shows that the applicant consented to the matter being determined on the basis of written submissions placed before the arbitrator. The applicant is on record as celebrating the advantages of this course of action as being cheaper and less time consuming.

To turn around now and ask this court to find that the arbitral award was made without affording the applicant an opportunity to be heard is downright dishonest and dishonorable.

Article 24 of the Model Law gives the arbitrator the power to override any agreement between the parties themselves in regards to how the matter should proceed, and stipulates that the arbitral tribunal SHALL decide whether to hold an oral hearing or whether the proceedings shall be conducted on the basis of documents or other materials.

In essence, the conduct of the hearing is entirely at the tribunal's discretion.

There is no onus on the tribunal to hear oral submissions. The onus on the tribunal relates to notification of the hearing; and, an arbitrator has exclusive jurisdiction, contrary to the parties wishes, to decide how to collate evidence. There is no provision to compel the arbitrator to hear oral evidence.

What is required is for all the parties to be notified of the hearing, to be given an opportunity to present their case as stipulated by the arbitrator, and to have sight of the submissions made by the other parties, if in writing.

The second respondent was clearly implored by all the parties to submit a written report to the arbitrator.

A careful reading of the party's emails will confirm this.

There is therefore no basis on which the applicant can aver, that, despite advising the arbitrator that he preferred being heard verbally, his request was denied or ignored. In fact, the evidence before the court is that the applicant submitted the most voluminous written submissions before the arbitrator.

The court has also been unable to find any evidence of fraud on the part of the arbitrator in determining the arbitral award.

There is no evidence that the offence of fraud was committed or reported to the police by the applicant.

Fraud is a criminal offence which involves an element of misrepresentation to deceive another to his prejudice.

There is no evidence that the applicant was operating under any misrepresentation by the arbitrator, or of any prejudice which he may have suffered as a result of such misrepresentation.

According to Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (SC)…, Article 34 of the Model Law “…, means that, if, for example, if the arbitrator was fraudulently misled or bribed by a party, the award, however innocuous, would be contaminated in the process of making and contrary to public policy. There is simply no evidence before the court that the third respondent misrepresented himself in order to deceive or cause prejudice to any of the parties, or that he received a gift or benefitted in any way in reaching the decision that he did.”

The allegations of fraud and corruption against the third respondent, by the applicant, are clearly baseless and without foundation.

The Court has been unable to find any evidence that the arbitrator mis-interpreted the terms of the lease agreement between the parties.

Clearly, the applicant has been unjustly enriched by the deposit and rental in advance paid by the first respondent.

On the termination of the lease agreement, it was just and equitable that the first respondent be re-imbursed US$16,800, in the absence of evidence of fraud, corruption, breach of public policy, breach of the rules of natural justice, as provided in Article 34 of the Model Law.

The test for contravening public policy, that: “…, some fundamental principle of law or morality or justice is violated or if it is so defiant of logic or accepted moral standards that the concept of justice in Zimbabwe would be intolerably hurt” was not established.

There was nothing immoral about the arbitral award that the applicant return monies given to him pursuant to a lease agreement which was terminated before it commenced, due to failure on his part to complete renovations to the property by an agreed date.

That award did not defy logic, or intolerably hurt the concept of justice in Zimbabwe.

In fact, the opposite is true; the concept of justice in Zimbabwe would have been hurt by allowing the applicant to keep the US$16,800. The applicant would have been unjustly enriched at the expense of the first respondent, who was innocent of any wrongdoing which resulted in the termination of the lease agreement.

The applicant is not entitled to have the arbitral award set aside.

Further, the basis of the application before the court is so flimsy; it would appear the application was conceived as a gimmick to frustrate the first respondent by delaying payment. It is for that reason that the court acceded to the application that costs be awarded on a higher scale, to discourage such conduct in future, and to mark its displeasure at the blatant abuse of court process.

This application is entirely devoid of merit and is dismissed with costs on the higher scale of legal practitioner and client.

It is ordered that the second respondent cease to be a party to these proceedings, and that the applicant pay the second respondent's costs on a legal practitioner client scale.

HH109-08 : LLOYD GAMBIZA vs PIKIRAI TAZIVA
Ruled By: GOWORA J

On 1 March 2007, the plaintiff issued summons out of this court for an order as follows:

“(a) An order declaring the agreement, Annexure A to the particulars of the claim, dated 18 December 2006, to have been validly cancelled and incapable of performance.

(b) An order for the return to the plaintiff of motor vehicle Mitsubishi Chariot Reg number AAN 8616, or, alternatively;

(c) Payment of the sum of R17,000 being the balance of the purchase price due to the plaintiff.

(d) Costs of suit.”

The facts which give rise to the dispute are these:

The plaintiff and the defendant were not only friends, they were also business partners. On 18 December 2006, the parties entered into a written agreement of sale in respect of a Mistubishi Chariot owned by the plaintiff. It was agreed between the parties that the vehicle would be sold to the defendant for a price of ZAR25,000 or Z$6 million. A deposit of R8,000 was recorded as having been paid with the balance of R17,000 being paid in two or more installments on or before 20 January 2007.

In his declaration, the plaintiff avers, that, the defendant has not paid any other amount aside from the initial R8,000. He therefore sues for the return of the vehicle or payment of the outstanding amount.

The defendant admits the existence of the agreement and the terms of the written agreement. He agrees that the balance had to be paid by 20 January 2007, but denies that he had breached the agreement as claimed by the plaintiff.

He avers that he tendered payment within the stipulated period but that the plaintiff refused to accept payment because it was not in Rand.

The defendant states, that, the offered payment, in Zimbabwe dollars, as an alternative amount, had been stipulated in the agreement. He tendered, in his plea, payment of the balance owing to the plaintiff against delivery to him of the registration book in respect of the vehicle.

He has also filed a counter-claim where he seeks delivery of the registration book to him against payment by him of the outstanding balance payable in local currency.

I will now deal with the evidence which was common cause between the parties.

The agreement concluded was for the defendant to purchase the vehicle for the sum of the R25,000. The defendant paid an amount of R8,000 on the date that the agreement was signed. The defendant was obliged to have paid the balance by 20 January 2007. However, payment was not effected by the stipulated date. The balance was stated as R17,000 on the agreement.

The Zimbabwe dollar equivalent was not stated in the agreement.

As to the dispute between them, the plaintiff indicated that the defendant had not tendered payment.

During cross-examination, it was clear, however, that the defendant had tendered payment of the Zimbabwe dollar component based on official rates of exchange but the plaintiff had refused to accept any payment in local currency.

There is no indication as to how much the defendant had tendered.

Although in the summons and declaration, the plaintiff had an alternative claim for him to be paid the sum of R17,000 when he gave evidence he indicated that he had abandoned that claim as he said that he had been advised that an individual could receive any payment in foreign currency and that he understood that the agreement was illegal to that extent. He said it was not capable of execution and said that it was, as a result, null and void.

Initially, it was contended, on behalf of the plaintiff, that, the agreement was per se illegal and incapable of enforcement due to the same.

It was further submitted on his behalf, that, not only was the purchase price quoted in foreign currency but that the equivalent in the local currency was calculated by the use of the parallel market rate of exchange which in itself is illegal.

The plaintiff further contended, that, the parties were illegally dealing in foreign currency and that the court was, as a result, precluded from giving effect to the agreement.

The defendant, through his counsel, also conceded that the agreement was illegal and that both parties participated in the illegality. Counsel prayed that I find that the in pari delicto principle applied and that I should let the loss lie where it falls.

Effectively, this would mean that the defendant would retain a vehicle for which he contracted to pay ZAR25,000 and for which he only paid ZAR8,000.

The defendant would thus be enriched at the expense of the plaintiff.

I was not convinced that both counsel had properly addressed the legal issues before me and I requested that they address me further by way of supplementary submissions.

These have now been filed and I am grateful to counsel for acceding to my direction.

The plaintiff now contends, that, the agreement executed by the parties is legal and valid and that the court can give effect to the same. He relies on the provisions of section 4(1) of the Exchange Control Regulations SI109 of 1996, which he says, prescribes the buying, selling, borrowing, lending or exchange of any foreign currency without permission from the Exchange Control authority.

It is contended on his behalf, that, although the agreement provided for payment of the purchase price in foreign currency, this was not illegal as it was not an offence to receive foreign currency.

The defendant has submitted, contrary to the plaintiff, that, the agreement, as it provides for payment of the purchase price in foreign currency, is illegal, and that this court should not give effect to it as that would encourage parties to such agreements to commit illegal acts.

Section 4(1) of the Exchange Control Regulations, S.I.109 of 1996 (“the Regulations”) is in the following terms:

“Subject to subs (3), unless permitted to do so by an exchange control authority;

(a) No person shall, in Zimbabwe -

(i) Buy any foreign currency from or sell any foreign currency to any person other than an authorized dealer or foreign exchange bureau de change; and

(ii) Borrow any foreign currency, lend any foreign currency to, or exchange any foreign currency with any person other than an authorized dealer.”

It is not in dispute, that, when the agreement between the plaintiff and the defendant was concluded the defendant had paid an amount of ZAR8,000 as deposit on part of the purchase price.

In terms of the agreement between the parties, the equivalent of the ZAR8,000 in local currency was $6 million. The rate of exchange was not given, but, it is accepted by both parties that the conversion rate was not the authorized one.

The balance outstanding was stated to be ZAR17,000. The equivalent in local currency was not stated.

Counsel for the plaintiff is correct when he says that the law does not proscribe the conclusion by parties of agreements where prices are quoted in foreign currency.

A careful scrutiny of section 4(a)(ii) of the Exchange Control Regulations, SI109/1996 leads me to the conclusion that his submission is correct. The Regulations do not forbid parties from transacting in foreign currency in general terms, but, they detail specific conduct that involves foreign currency which is then prohibited.

What is pertinent is to determine whether the manner in which the parties herein conducted their agreement falls under the species of proscribed conduct within the ambit of the Exchange Control Regulations, S.I.109/1996. The only word that would apply to the present is 'exchange' and what meaning can be ascribed to it.

The Shorter Oxford Dictionary defines exchange, as a noun, variously, as follows:

“The action, or an act, of reciprocal giving and receiving; a mutual grant of equal interest, the one in consideration of the other.”

In respect of the verb, the dictionary ascribes the following meanings to 'exchange' -

“To change away; to dispose of by exchange; to give or part with (something) for something in return; to give and receive reciprocally; to interchange.”

In Matsika v Jumvea & Anor HH09-03, CHINHENGO J had to consider whether or not an agreement for the purchase of a motor vehicle, within Zimbabwe, in currency other than the local currency was legal.

It is not my intention to traverse the path taken by the learned judge in his examination of the matter, for, to do so, would be repetitive and disrespectful.

He concluded, that, in accordance with the Decimal Currency Act [Chapter 22:04], the legal tender in this country is the Zimbabwe dollar. He also concluded, that, according to the provisions of the Reserve Bank Act [Chapter 22:10], a tender of notes and coins issued by the Reserve Bank, which has not been demonetized shall be legal tender in Zimbabwe. He also found, that, the Reserve Bank Act does not prohibit the transaction by Zimbabweans of business in foreign currency.

With regard to the application before him, on the facts, as presented, the learned judge had no hesitation in finding, that, when the applicant paid US$1,700 and US$1,730, to the respondent, for the purchase price of a vehicle, without first having obtained the permission of an exchange authority, the parties had contravened the Exchange Control Regulations, SI109 of 1996.

In the context in which 'exchange' is used by the legislature in the Exchange Control Regulations, the meaning that can therefore be ascribed to it is “to pay” and “to receive”.

The defendant paid ZAR8,000 without the permission of an exchange control authority, and, in the circumstances, there can be no doubt that this is prohibited by the Exchange Control Regulations.

Thus, the agreement is tainted with illegality and cannot be enforced.

It is trite that there must be no illegality in a contract. An agreement is illegal if the making of the agreement, the performance agreed upon, or the ultimate purpose of both parties in contracting is prohibited by common or statute law, that is, if it is contrary to public policy or is contra bonos mores: see Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A).

A contract will be contrary to public policy if its performance, even though not illegal or immoral, is one which the courts will not enforce because performance would be detrimental to the interests of the community.

From the evidence given by the parties, it emerged that one of the parties, if not both, was aware that their transaction might not have been exactly above board.

The defendant gives as his reason for refusing to pay the balance in Rand the knowledge that the payment in foreign currency was illegal. This, he averred, was the reason why he did not pay, as he was afraid of committing an offence. He does not say when he became aware of the illegality attached to the payment in foreign currency in view of his initial payment of the deposit in foreign currency.

In his declaration, the plaintiff makes the averment, that, the contract was illegal as it contravened the Exchange Control Regulations and thus it was incapable of being enforced.

Whilst the agreement itself is not per se illegal, it has nevertheless been tainted by illegality in that the parties breached the Exchange Control Regulations when they were giving effect to its terms and conditions.

Instead of exchanging Rand, the parties could have calculated the official rate of the local currency and payment made accordingly and thus there would have been legal performance of the agreement.

Whilst the plaintiff has prayed that the agreement be cancelled, and for the return of the motor vehicle, the defendant has counter-claimed for the delivery to him of the registration book of the motor against a tender of payment by the defendant of an amount of $3,840,000 which he states is the outstanding balance on the purchase price.

The question that now confronts me is whether or not the contract can be cancelled or whether it is capable of being enforced thus entitling the defendant to an order in terms of the counterclaim.

I would, on this point, respectfully refer to the comments of GUBBAY CJ in Dube v Khumalo 1986 (2) ZLR 103 (SC)…, where he stated:

“There are two rules which are of general application. The first is that an illegal agreement which has not yet been performed, either in whole or in part, will never be enforced. This rule is absolute and admits no exception: see Mathews v Rabinowitz 1948 (2) SA 876 (W) at 878; York Estates Ltd v Wareham 1950 (1) SA 125 (SR) at 128. It is expressed in another maxim ex turpi causa non oritur actio.

The second is expressed in another maxim in pari delicto est potior conditio possidentis, which may be translated as meaning 'where parties are equally in the wrong, he who is in possession will prevail'.

The effect of this rule is that where something has been delivered pursuant to an illegal agreement, the loss lies where it falls.

The objective of the rule is to discourage illegality by denying judicial assistance to persons who part with money, goods, or incorporeal rights, in furtherance of an illegal transaction.

But, in suitable cases, the courts will relax the par delictum rule and order restitution to be made. They will do so in order to prevent injustice, on the basis that public policy 'should properly take into account the doing of simple justice between man and man.'”

The agreement before me has only been partially performed by either of the parties.

Whilst the defendant had paid less than half of the purchase price, the plaintiff had not really effected delivery in that the registration book had not been given to the defendant and thus he cannot assume ownership of the vehicle.

Although the agreement itself is not illegal, the manner in which the parties performed part of the agreement has rendered it illegal, and, any order on my part that would lead to the performance of the remaining part of the same would have the effect of giving sanction to the actions of the parties in violating the Exchange Control Regulations.

As a court, I am precluded from encouraging, through orders of court, the commission of acts that are proscribed by the law or the further perpetuation of such acts in clear violation of statutory provisions.

I am therefore of the view, that, this is not an agreement that can be given effect to and this, in my view, disposes of the counter claim of the defendant.

The question remaining on this issue is whether I should then declare the agreement duly cancelled.

When something is illegal, it is in fact null and void.

Thus, a declaration that it has been duly cancelled would clothe the agreement with legality. The only logical manner to treat the agreement is therefore to declare that it is of no force and effect.

What remains now is what is to be done with the vehicle.

The defendant, having acknowledged the unlawful nature of the agreement, has submitted that the court has several options on how to dispose of the matter:

(i) The first is to dismiss the plaintiff's claim in its entirety.

(ii) The second option is strike out the quotation of the price in Rand is not appropriate in view of the illegality of the agreement.

(iii) The defendant has also suggested that the defendant be made to pay the equivalent of ZAR17,000 calculated in accordance with the prevailing rates of exchange, and that, consequentially, the plaintiff be ordered to surrender the registration book to the defendant.

The last three options suggested by the defendant would result in the court giving effect to an illegal agreement. This would run counter to the two maxims that were pronounced by GUBBAY CJ in Dube v Khumalo 1986 (2) ZLR 103 (SC).

The usual manner of treating illegal agreements, where the parties to the same are equally to blame, is to let the loss lie where it fell. However, the courts have a discretion, in suitable cases, to relax the par delicto rule in order to do justice between man and man.

The rationale for this discretion is to prevent injustice where one party is enriched at the expense of another.

In Jajbhay v Cassim 1939 AD 537…, STRATFORD CJ stated the following:

“Courts of law are free to reject or grant a prayer for restoration of something given under an illegal contract, being guided in each case by the principle which underlies and inspired the maxim.

And, in this last connection, I think a court should not disregard the various degrees of turpitude in delictual contracts. And, when the delict falls within the category of crimes, a civil court can reasonably suppose that the criminal law provided an adequate deterring punishment, and, therefore, ordinarily speaking, should not, by its order, increase the punishment of the one delinquent and lessen it of the other by enriching one to the detriment of the other.

And, it follows from what I have said above, in cases where public policy is not foreseeably affected by a grant or refusal of the relief claimed, that a court of law might well decide in favour of doing justice between the individuals concerned and so prevent unjust enrichment.”

It is trite, therefore, that, where an agreement is illegal, a court has the discretion to relax the par delicto rule in order to do justice between man and man where the relief granted would be contrary to public policy.

I was not addressed by either counsel on the question whether granting the relief sought would be contrary to public policy, and, as a consequence, I find that I am not constrained from relaxing the par delicto rule.

Considering the circumstances of the case, it is only proper that I do so in order to do justice between man and man.

The plaintiff parted with a valuable item against payment of an amount which was less than half the purchase price. The defendant thereafter did not pay the outstanding amount within the stipulated period. The agreement provided, that, the full purchase price should have been paid before 20 January 2007.

The defendant readily admitted having failed to pay as stipulated therein.

In his evidence, he alluded to an agreement between himself and the plaintiff, concluded in South Africa, where the plaintiff agreed to extend the period by which payment could be made.

The defendant, however, was unable to state the date by when he was supposed to have made payment under the alleged verbal contract.

It is highly improbable, in my view, that the plaintiff, having in the agreement of sale stipulated a time period for payment of the purchase price, would be so accommodating as to allow the defendant an unlimited extension of time by which to pay the balance.

The defendant was already in mora and it would only be sensible and reasonable if the plaintiff was to allow more time to put the defendant on terms about payment.

In his evidence, which was not seriously challenged by the defendant, the plaintiff said he wanted to use the money for a business venture hence his stipulation for a time period on when balance was to have been paid in full.

The plaintiff denied that he had extended the time to the defendant for payment of the balance or that he had given an impression to that effect.

HH128-06 : DOBROCK HOLDINGS (PVT) LTD and TURNER AND SONS (PVT) LTD vs TURNER AND SONS (PVT) LTD and ANTHONY TURNER and MARTIN KING and ZAMBEZI PADDLE STEAMER (PVT) LTD and DOBROCK (PVT) LTD
Ruled By: KUDYA J

An order for the consolidation of these two matters was granted by UCHENA J, by consent, with no order as to costs, on 2 June 2006, for hearing before me on 7 June 2006 in Case Number 3157/06.

The first application, Case No. HC5186/05, concerns an order for specific performance while the second one, Case No.5264/05 seeks an order for the provisional liquidation of Zambezi Paddle Steamer (Pvt) Ltd (hereinafter called ZPS).

On 7 June 2006, at the request of the parties, I postponed the hearing to 13 July 2006.

When the hearing resumed, Mrs Wood, for Turner and Sons (Pvt) Ltd, applied for the forced recusal of Mr de Bourbon, for Dobrock (Pvt) Ltd, on the basis that he had been an arbitrator between these parties in 1994.

She referred to Pertisilis v Calaterra & Anor 1999 (1) ZLR 70 (H) as authority for the proposition that the legal practitioner who acted for a former client is precluded from representing a different client in circumstances where a conflict of interest is likely to arise between the former and present client. SMITH J set out the basis of the rule…, as being that:

“A legal practitioner who represents the adversary of his own client in litigation would clearly be violating his or her duty of loyalty and the common law rules against conflict of interest.”

He proceeded to survey American, English, South Africa, and Zimbabwean decided cases on the point at pages 74C–77F.

While he held that neither a partner nor his employee could represent an opponent of a former client in order to fulfill the adage that justice must not only be done but that it must manifestly and undoubtedly be seen to be done, he nevertheless permitted a partner to represent the opponent on the basis that there was no allegation that the other partner had acquired information from the papers in the possession of his firm which could be used to the former client's disadvantage.

Mrs Wood contended, that, justice will not be seen to be done if Mr de Bourbon was allowed to represent Dobrock (Pvt) Ltd, especially on the liquidation case, where Turner and Sons allege a deadlock has manifested itself between the joint shareholders, a fact found by Mr de Bourbon, as arbitrator, to exist in his 25 June 1994 ruling.

She further foresaw a need to call Mr de Bourbon on the deadlock issue in the liquidation case.

Mr de Bourbon countered by contending that he did not represent either Dobrock (Pvt) Ltd or Turner and Sons (Pvt) Ltd but acted in a quasi-judicial capacity.

He knew of no law which debarred him from representing either party as long as he had not possessed confidential information which could be used to the detriment of his client's adversary. He referred to Benmac Manufacturing (Pvt) Ltd v Angelique Enterprises (Pvt) Ltd 1988 (2) ZLR 52 (H).

In that case, Mr de Bourbon accepted a general retainer from Angelique Enterprises in a matter in which that company was involved in a dispute with Albco. He was, at that time, already seized with a retainer for Benmac Manufacturing in its contest with Angelique Enterprises, supra. He had accepted the retainer in the matter against Albco after assurance from his instructing attorney that there would be no conflict of interest.

It was accepted, in that case, by that attorney, that, he had not come into contact with any confidential information which would prejudice Angelique Enterprises in its contest with Benmac. The Law Society, and two other counsel, had absolved him of any impropriety, but, the Managing Director of Angelique Enterprise, Mr Holland, was not satisfied with their findings and advice.

REYNOLDS J held, that, Angelique Enterprises had not shown that Mr de Bourbon had in fact become acquainted with information that could be used to its detriment which would result in real mischief and real prejudice if he continued to act for Benmac Manufacturing. He did express his reservation on a legal practitioner acting for and against his client in the same or different matters.

Mr de Bourbon submitted that he had not acquired any information that he could possibly utilize to the prejudice of Turner and Sons (Pvt) Ltd and that his impartiality in 1994 had not been impugned by any of the parties.

I went through the arbitral award.

It concerned and dealt with the share of each joint shareholder in the extra costs, which were above the original cost of construction of the large commercial houseboat which Zambezi Paddle Steamer (Pvt) Ltd (ZPS) was to own.

Turner and Sons (Pvt) Ltd was not able to show what information Mr de Bourbon accessed which could prejudice its present defence and claim. If anything, I was satisfied that the arbitral award stands on its own and there would be no need to call the arbitrator to testify on it.

I accordingly dismissed the application for the forced withdrawal of Dobrock (Pvt) Ltd's counsel.

I also postponed the hearing sine die and granted, by consent, authority to Turner and Sons (Pvt) Ltd to file a further affidavit in response to Dobrock (Pvt) Ltd's supplementary affidavit.

I further reserved the question of costs in the provisional liquidation claim to which these additional affidavits pertained.

I eventually set down the matter for hearing on 1 November 2006. I directed that the parties argue the specific performance case first and thereafter proceed to argue the liquidation case.

On 12 October 2005, Dobrock (Pvt) Ltd filed the court application for specific performance against Turner and Sons (Pvt) Ltd and two others. It sought the following order:

“1. That, the respondents, jointly as well as severally, the one paying the other to be absolved shall forthwith undertake all that is necessary and required, including making all payments and completion and signing all documents required in order to procure transfer, without delay, by first respondent to applicant of first respondent's entire shareholding in Zambezi Paddle Steamer (Pvt) Ltd.

2. That, immediately upon registration of transfer in the share register of Zambezi Paddle Steamer (Pvt) Ltd (ZPS) applicant shall pay to first respondent the balance of the purchase price for the said shares; such balance being the sum of $138 million.

3. That, the respondents, jointly as well as severally, the one paying the other to be absolved, shall pay the costs of this application on the scale of legal practitioner and own client.”

The application was served on the three respondents on 13 October 2005 (see Peter Dobson's opposing affidavit of 9 November 2005 for which this averment was accepted by Antony Turner on 2 December 2005).

The three respondents filed their opposition papers on 27 October 2005 and prayed for the dismissal of the applicant's case with costs on the higher scale and made reference to the liquidation claim, case number HC5264/2005.

Case number 5264/05 is a court application brought on 17 October 2005 by Turner and Sons (Pvt) Ltd against Zambezi Paddle Steamer (Pvt) Ltd and Dobrock (Pvt) Ltd. It prayed for the winding up of Zambezi Paddle Steamer (Pvt) Ltd and that a liquidator be appointed in the following terms:

“1. That, first respondent, Zimbabwe Paddle Steamers (Pvt) Ltd be provisionally wound up pending the granting of an order in terms of paragraph 3 hereof or the discharge of this order.

2. That, Mrs Theresa Grimmel, of KPMG Chartered Accountants, Mutual Gardens, 100 The Chase, Emerald Hill, Harare be appointed as provisional liquidator of first respondent company with the powers set out in section 221 of the Act.

3. Any interested party appear before this court sitting at Harare on (a date sixty days from the date of the order) to show cause why an order should not be made placing first respondent's company in liquidation and order that the costs of these proceedings all be costs of the liquidation.

4. That, this order shall be published once in the Government Gazette and once in the Herald Newspaper. Publication shall be in the short form annexed to this order.

5. Any person intending to oppose or support the application on the return day of this order shall:

5.1. Give due notice to the applicant at Messrs Byron Venturas & Partners, 2nd Floor Tanganyika House, Corner 3rd Street/Kwame Nkrumah Avenue, Harare.

5.2. Serve on the applicant, at the address given above, a copy of any affidavit which he files with the Registrar of the High Court.”

The application for provisional liquidation was served on the respondents on 17 October 2005, who entered opposition on 31 October 2005 and filed, on that day, their opposing affidavit by fascimile. The actual opposing affidavit was filed on 9 November 2005.

These two applications were consolidated on the bases that the principal parties were the same and that the fundamental issue in each matter related to the ownership and management control of Zambezi Paddle Steamer (Pvt) Ltd (ZPS).

The pleadings in these consolidated matters are voluminous.

The founding, opposing, answering and supplementary affidavits are reinforced by an assortment of attachments which consists of the Memorandum of Association of Zambezi Paddle Steamer (Pvt) Ltd, electronic mail between the parties, and other documents raised by various people who worked for the parties in various capacities.

I have read all these documents.

It is apparent from these documents that there are areas in which the parties agree and others where they are at variance.

It is appropriate that I first deal with the facts as I have determined them to be from the wealth of information that is set out in the pleadings in both these cases.

The preliminary details on the formation of Zambezi Paddle Steamer (Pvt) Ltd (ZPS), on 3 April 1989, are set out in detail by Anthony Turner (Antony) in his founding affidavit in the liquidation matter, case HC5264/05 (Case No.2). Those details were admitted to by Peter Jameson Dobson (Peter) in his opposing affidavit in that case.

Turner and Sons (Pvt) Ltd agreed with Dobrock (Pvt) Ltd, in 1988, on a joint venture to construct and thereafter operate a 'Mississippi River Boat' for commercial use on Lake Kariba.

The concept of the “Southern Belle” was created by Turner and Sons (Pvt) Ltd who approached Dobrock (Pvt) Ltd.

Dobrock (Pvt) Ltd agreed to become its joint partner in the venture and to provide working capital and investment in the project.

Zambezi Paddle Steamer (Pvt) Ltd was incorporated as the special purpose vehicle through which the large commercial houseboat, MV Southern Belle, would be owned and operated.

Zambezi Paddle Steamer (Pvt) Ltd was incorporated in terms of the Companies Act [Chapter 24:03] with an issued share capital of $30,000 divided into 30,000 shares of $1 each fully paid up. Each of the two joint partners subscribed to 15,000 shares of $1 each in Zambezi Paddle Steamer (Pvt) Ltd.

The joint shareholders agreed that Turner and Sons (Pvt) Ltd would first build a model of the craft, and, thereafter, carryout the necessary construction work and interior design of the vessel at a contracted price. Dobrock (Pvt) Ltd would source both local and foreign raw materials for this construction. The total costs of both these operations would be the total cost of the vessel and would be met equally by the joint shareholders.

The agreement was reduced to writing and signed on 31 May 1991.

The arbitral award, of 15 June 1994, indicated that the vessel was completed in 1994. The original construction price was set at $5,950,000.

The issue before the arbitrator centred on the amount by which the original contract price increased, which issue he resolved.

Zambezi Paddle Steamer (Pvt) Ltd was run for 18 months, from the completion of the vessel in 1994, by Turner and Sons (Pvt) Ltd. Dobrock (Pvt) Ltd thereafter took over the management control of Zambezi Paddle Steamer (Pvt) Ltd and appointed a Managing Director, Adamson, to run it.

It was common cause, that, from 2000, the tourism industry went into decline and this affected the bottom line of the MV Southern Belle operations of Zambezi Paddle Steamer (Pvt) Ltd.

There is evidence, in the form of electronic mail exchanged between Peter Jameson Dobson and Anthony Turner, the principal shareholders in Dobrock (Pvt) Ltd and Turner and Sons (Pvt) Ltd, respectively, between 19 January 2003 and 7 April 2004, that, the joint shareholders were prepared to sell their respective shareholdings in Zambezi Paddle Steamer (Pvt) Ltd to the right suitor - if one came along.

On 4 May 2004, Zambezi Paddle Steamer (Pvt) Ltd Managing Director presented a report which highlighted the difficult circumstances the commercial houseboat operations were in. It required urgent maintenance and refurbishment to attain its former glittering glory.

On 6 June 2004, Anthony Turner indicated his decision to sell his shares in the commercial houseboat to Peter Jameson Dobson. This was a clear pointer to his unwillingness to inject funds for maintenance and refurbishment of the houseboat.

On 18 June 2004, Peter Jameson Dobson indicated his willingness to inject $250 million, for this purpose, provided his shareholding in Zambezi Paddle Steamer (Pvt) Ltd increased by 10% while that of Anthony Turner was reduced by the same percentage. He suggested that the houseboat was valued at approximately $3.5 billion. He followed up this by another e-mail of 25 June 2004.

He received a response on that same day (contained in an email wrongly dated as 6 June 2004) from Anthony Turner in which he offered him his shareholding in Zambezi Paddle Steamer (Pvt) Ltd for the sum of $250 million.

Peter Jameson Dobson duly accepted the offer.

He came to Harare, and, during the period 28 June to 14 July 2004, discussed with Anthony Turner on the terms of payment of Antony's entire shareholding.

He agreed to procure payment where and when Anthony Turner wanted.

The purchase price was agreed at $250 million. It was to be paid by Peter Jameson Dobson into the account of Antony's daughter, Jenny, in the United Kingdom, the bank account details of which he received.

The following day, after the terms of payment had been agreed, Anthony Turner requested part payment of the purchase price in local currency.

Peter Jameson Dobson alleged that he made out cheque payments to Chitekeshe of $115 million and to Vretto of $25 million, as part payment, a total of $140 million which Anthony Turner used to buy a pick-up truck.

This averment was not disputed by Anthony Turner, yet, he maintained, in his other affidavits, that, he was paid $138 million and $112 million remained outstanding.

Peter Jameson Dobson, in his prayer, and in Mr de Bourbon's submissions on behalf of Peter's company, accepted that the outstanding purchase price was $112 million.

No cheques or proof of payment in the sum of $140 million was produced.

I am therefore prepared to hold, that, Peter Jameson Dobson paid $138 million and had an outstanding balance of $112 million.

Anthony Turner averred, in his opposing affidavit, that, he required £12,000 to import a new engine for the craft that he was building, known as the “Zambezi Trader”. This craft would not be in competition with the houseboat at all and he was building it for his own account with the moral support and blessing of Peter Jameson Dobson.

Peter Jameson Dobson agreed to pay this amount into his daughter's bank account in the United Kingdom.

He repeated this allegation in paragraphs 31 and 32 of his founding affidavit in Case No. HC5264/05.

This was to be in lieu of the balance of the purchase price of $112 million.

In Case No. 5264/05, in paragraphs 26 and 27 of his opposing affidavit, Peter Jameson Dobson did not respond to these averments in so far as they refer to the alleged mode of payment in foreign currency.

That payment was to be in foreign currency is clear from Peter Jameson Dobson's own founding affidavit.

In paragraph 18, he averred, that, even when he met Anthony Turner, per chance, at the Borrowdale Race Course, in November 2004, he reassured him, that, notwithstanding the fall in the value of the Zimbabwean dollar against the Pound Sterling, the amount outstanding as the purchase price remained £12,000 being the amount in pounds in July 2004.

The two gentlemen agreed, that, the accountant and company secretary of Zambezi Paddle Steamer (Pvt) Ltd, Paul Turner (Paul), a partner in Ernst and Young Chartered Accountants, would effect the share transfer and receive Anthony Turner's letter of resignation as a director therein.

There was a delay in the transfer of the shares which was occasioned by Paul Turner's attempts to structure a tax avoidance scheme for the benefit and at the insistence of Antony Turner.

I make this finding based on Antony Turner's deliberate failure to respond to Paul Turner's affidavit, which was filed in support of Peter Jameson Dobson's founding affidavit.

It was agreed, that, on 3 August 2004 and 21 August 2004, Peter Jameson Dobson wrote to Anthony Turner enquiring whether or not he had signed the necessary transfer documents and resigned as a director of Zambezi Paddle Steamer (Pvt) Ltd - the two factors which would trigger the payment of the balance of the purchase price by Peter.

It also appears, that, even on 5 November 2004, a date disputed by Athony Turner, who put it as being sometime in September 2004, when the two met at Borrowdale Race Course, Antony intimated that he had been too busy to visit Paul Turner. The parties re-affirmed, that, despite an adverse movement of the Zimbabwe dollar since July 2004, the balance of the purchase price would be paid into Antony's daughter's account in the United Kingdom at the exchange rate agreed in July 2004.

On 17 January 2005, Antony Turner proceeded to appoint Peter Drummond and Martin King as directors of Turner & Sons (Pvt) Ltd, in his stead, who were charged with the responsibility of overseeing Turner & Sons (Pvt) Ltd's interests in the Southern Belle.

A flurry of e-mails followed which attempted to resolve the issue of the sale of Antony Turner's shares in Zambezi Paddle Steamer (Pvt) Ltd, who was claiming, that, the failure by Peter Jameson Dobson to pay the balance of the purchase price timeously amounted to repudiation of the contract.

He therefore regarded himself released from the contract.

The negotiations by the parties culminated in a letter of 23 August 2004 by Turner & Sons (Pvt) Ltd's erstwhile legal practitioners to Dobrock (Pvt) Ltd's legal practitioners which set out the history of their association.

In that letter, Turner & Sons (Pvt) Ltd indicated that it would seek an order to wind up the company in terms of section 206(g) of the Companies Act [Chapter 24:03].

Dobrock (Pvt) Ltd held the firm belief that it had purchased Turner & Sons shareholding and was therefore the sole shareholder in Zambezi Paddle Steamer (Pvt) Ltd.

These disagreements resulted in the two applications, for specific performance and liquidation, that are now before me.

The first issue for determination is whether or not a binding contract of sale was reached between Dobrock (Pvt) Ltd and Turner & Sons (Pvt) Ltd.

It is, I believe, common cause that an agreement of sale was entered into.

In its opposing affidavit, in paragraph 17, Turner & Sons (Pvt) Ltd acknowledges that the parties had a loose gentleman's agreement. Antony Turner concludes that paragraph by stating that "I believe, with respect, that the only explanation that is reasonable in the circumstances is that applicant repudiated the contract."

Paragraph 49(iii), in Case No. HC5264/05, by Turner & Sons (Pvt) Ltd, is to the same effect.

Turner & Sons (Pvt) Ltd's defence was, in the main, predicated on repudiation by conduct of the contract that was executed between the parties. Indeed, Mrs Wood, for Turner & Sons (Pvt) Ltd, in paragraph 2 of her written heads of argument, wrote:

"It is apparent from the applicant's own case that the agreement in question was very loose even if it was binding between the parties."

Counsel concentrated their submissions on the question whether time was of the essence in the performance by Dobrock (Pvt) Ltd of the term relating to payment of the outstanding purchase price.

It was on the assumption that it was of the essence that Turner & Sons (Pvt) Ltd alleged repudiation.

The onus, in my view, lies on Turner & Sons (Pvt) Ltd to show that time was of the essence and that the failure by Dobrock (Pvt) Ltd to act timeously entitled it to rescind the contract.

Turner & Sons (Pvt) Ltd blamed Dobrock (Pvt) Ltd for the delay in paying the balance of the purchase price.

The facts, as I find them, do not bear out the correctness of Turner & Sons (Pvt) Ltd's view.

Paul Turner indicated, in his unchallenged affidavit, that, the tax avoidance scheme was initiated at the instance of Antony Turner, and was for Turner & Sons (Pvt) Ltd's benefit.

My view is that, at that stage, Paul Turner was working as an agent of Turner & Sons. It became, in my finding, the duty of Turner & Sons to impress on him to act with speed if time was of the essence to it.

It is clear to me, that, Antony Turner understood and appreciated that the balance of the purchase price would not be paid out until the share transfer had been effected by Paul Turner; until Antony Turner had resigned as a director of Zambezi Paddle Steamer (Pvt) Ltd; and, until Antony Turner had obtained a capital gains clearance certificate from the Zimbabwe Revenue Authority (ZIMRA).

The delay cannot, therefore, be attributed to Dobrock (Pvt) Ltd.

Peter Jameson Dobson, after all, was desirous that transfer be effected with speed as shown by his enquiries of 4 August and 21 August 2004 which Antony Turner did not acknowledge.

Antony Turner never did challenge the averment, that, when they met at Borrowdale Race Course, he indicated that he was responsible for the delay for he was too busy to make a follow up with Paul Turner.

Paul Turner, after all, was acting, as regards the tax avoidance scheme only, as an agent of Antony Turner.

It is therefore my finding, on the papers, that, it was in fact Antony Turner who was responsible for the delay. He could not, therefore, lawfully repudiate the contract by projecting his own inaction onto Dobrock (Pvt) Ltd.

Mrs Wood contended, with reference to Concrete Products Co. (Pty) Ltd v Natal Leather Industries 1946 NPD 377…, and Broderick Properties v Rood 1962 (4) SA 447 that the mere fact that the agreement did not provide a particular date of performance did not mean that time was not of the essence.

She submitted, that, to Peter Jameson Dobson's knowledge, Antony Turner had to purchase an engine for another boat that he was building for £12,000 immediately, that is, at the time that they concluded the agreement.

In her view, though not spelt out in the oral agreement, the nature of that agreement, and the purpose to which Antony Turner wanted to utilize the funds were inherently indicative that both parties contemplated that payment had to be speedily made.

Speed payment was inherent in the agreement itself.

The proposition, in my view, conforms with the examples that were highlighted in Broderick Properties v Rood 1962 (4) SA 447 concerning the purchase of theatre tickets and repairs of a motor vehicle at a garage which are required for use within a set time frame.

The appreciation that I attribute to Antony Turner, of the conditions that had to be fulfilled before payment was made, in my view, removes his case from one relating to mora ex re (time set out in the contract) to one of mora ex persona, which requires demand before the time limits for performance are reached.

I associate myself with the statement of law that was propounded by GUBBAY CJ in Asharia v Patel 1991 (2) ZLR 276…,. He stated thus:

"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 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 of performance which is not unreasonable - if unreasonable, the demand is ineffective.

Where a debtor has fallen into the mora ex persona after demand, the creditor can acquire a right to cancel the contract by serving notice of rescission, in which a second reasonable time limit is stipulated, making time of the essence. Both demand and notice of rescission are necessary in order to allow for cancellation for non-performance. The two may be, and commonly are, contained in the same notice. Such notice will then fulfil a double function. It will fix a time for performance after which the debtor will be in mora, and create a right in the creditor to rescind the contract on account of the mora."

In the present case, payment of the purchase price was not due immediately on conclusion of the contract. It was due as soon thereafter as was reasonably possible in the circumstances.

The circumstances related to the transfer of Turner & Sons (Pvt) Ltd's shareholding by Paul Turner; receipt by him of Antony Turner's resignation letter; and of a clearance certificate from the Zimbabwe Revenue Authority (ZIMRA).

It was within Antony Turner's power to expedite these matters.

Indeed, that it was not immediate was clearly demonstrated by the use put by Antony Turner of the part payment which was made of $138 million. He bought a pick up vehicle.

He also was duty bound to place Peter Jameson Dobson in mora if he believed that a delay had been occasioned in paying up the outstanding balance of the purchase price.

CHRISTIE, in The Law of Contract in South Africa, 3rd edition, Butterworths, 1996 deals with the line of cases culminating in Broderick Properties v Rood 1962 (4) SA 447 at pages 556 to 557. At page 555 he stated:

"The general rule will be seen in the next section, is that, when the contract does not fix a time for performance there can be no mora ex re, only mora ex persona; so, a demand by the creditor is necessary in order to place the debtor in mora. Whether there are exceptions to this general rule is a question that has led to differences of judicial opinion, but the present law can be stated with a fair degree of confidence."

It seems to me, that, in Zimbabwe, Asharia v Patel 1991 (2) ZLR 276 has provided the answer.

It confirms the correctness of the general rule as set out by CHRISTIE.

It appears to me too, that, the differences of judicial opinion that CHRISTIE noted may be resolved by applying the general rule to the particular facts of each matter in order to ascertain its validity to the time frames as contemplated by the parties. It is only after this has been done that a decision on whether mora ex re or mora ex persona applies can be made.

I, therefore, hold, in the present matter, that, Turner & Sons (Pvt) Ltd could not lawfully repudiate the contract without first placing Dobrock (Pvt) Ltd in mora.

HH535-15 : BLESSMORE CHANAKIRA vs SHEPHERD MALCOM N.O. and REGISTRAR OF DEEDS and PHIL RUSCH
Ruled By: NDEWERE J

The background facts are that the plaintiff expressed interest in Stand 5233 Salisbury Township Lands measuring 3,309 square metres which is the property in dispute.

The property belongs to the estate of the late Robert Eric Rae.

An agreement of sale was concluded, on 22 October 2009, between the plaintiff and the Property Shop, the Estate Agent firm which handled the transactions, for the sum of US$220,000.

On mode of payment, the agreement provided as follows:

“The Purchaser shall pay cash deposit of US$100,000 [one hundred thousand United States Dollars] of which US$30,000 [thirty thousand United States Dollars] shall be non-refundable] upon signing of the agreement of sale.

The purchaser shall pay the sum of US$60,000 [sixty thousand United States Dollars] on or before 30 November 2009 and the balance of US$60,000 [sixty thousand United States Dollars] on or before the 31st December 2009.”

The above mode of payment has been the source of the dispute.

The plaintiff claims to have paid theUS$100,000 cash deposit upon signing of the agreement of sale as stipulated by the clause. The first defendant, representing the estate, denies, that any deposit was paid.

The agreed issues for the trial were:

(i) Whether the plaintiff breached the agreement of sale with the first defendant, and, if he did, whether the first defendant cancelled the sale.

(ii) The second agreed issue was whether this was a double sale, with the third defendant as the second purchaser, and, if so, in whose favour did the balance of equities lie.

In my view, the first issue for determination by the court is whether the plaintiff paid the requisite deposit upon signature of the agreement.

The plaintiff's evidence was that he paid US$100,000, in cash, to Felicity Lock, The Property Shop negotiator, after counting the money, at her house, in the presence of Shirley Margaret Rae who represented the seller, who was still alive, by virtue of a Power of Attorney.

He said he did not ask for a receipt, neither did he obtain any other proof of payment from Felicity Lock.

The plaintiff's evidence was that he paid the US$100,000 before he signed the agreement because payment of that amount was a condition precedent to the signing of the agreement.

Felicity Lock denied that any payment was made.

She said she expected the plaintiff to pay soon after signing but then the plaintiff showed her some Kingdom Bank documents and said for him to get the money to pay, he needed to sell his shares first, and, for him to sell the shares, he needed a signed agreement.

She said she then gave him Shirley's Rae's Stanbic Account number and told him to deposit the money into that account. She also gave him a Property Shop Account number for him to deposit the agency commission.

Her evidence was that Shirley Rae signed the agreement first, in the absence of the plaintiff, and, later, she took the agreement to the plaintiff at some agreed meeting place near Hellenic School.

Shirley Rae also denied that any payment was made to her or Felicity Lock in her presence.

Her testimony was that she had not even met the plaintiff when the agreement was executed; she saw him, for the first time, at the pre-trial conference.

The plaintiff told the court that he is an astute businessman aged 35 years. He said he has been in business since he was 22 years old and has about 13 years business experience. He also said he is a qualified accountant and he has experience in the acquisition of properties as he has eleven properties to his name.

The court found it highly improbable that a qualified accountant, and an experienced property investor, would part with US$100,000 cash in the year 2009, when foreign currency was still scarce, without bothering to obtain a receipt or other proof of payment; yet that was the plaintiff's evidence on pages 51 and 52 of the transcribed record;

“Q. Now, before a dispute before the parties erupted, did you ever ask for a receipt?

A. No, from Felicity, no, I never asked for a receipt….,.

Q. It's a simple question, did you ever ask for a receipt?

A. From Felicity Lock.

Q. Did you ever ask for a receipt?

A. No, I have proof of payment.”

When the questioning about not asking for a receipt persisted, the plaintiff, in response, said, Property Shop was operating from home and the office was not running professionally.

All the more reason why he should have asked for a receipt, or some other form of proof of payment, if he knew that Property Shop was not being run professionally.

The plaintiff also told the court, in his evidence, that, paying US$100,000 cash was a condition precedent to the signing of the agreement.

The agreement is part of the court record, and, nowhere does the agreement say payment was a condition precedent.

It is also highly improbable that a qualified accountant would pay US$100,000 deposit before the agreement has been concluded and leave without any proof of payment.

Even if Felicity Lock had no receipts, on account of being “unprofessional” as the plaintiff alleged, the plaintiff himself could have prepared an acknowledgement note.

He knew this was possible:

“Q…., you could have done an acknowledgement of receipt and say I, Felicity acknowledge that I have received US$100 000, you could have done that….,.

A. I could have done that.”…,. (p57 to 58 of the transcribed record)

The plaintiff confirmed, that, he could have done an acknowledgement of receipt himself - but he did not.

He admitted, that, as a businessman, he knew that disputes could arise and that he could have had an independent witness with him to confirm the payment; but, he said he went alone to make this huge cash payment.

On the other hand, Felicity Lock's evidence was that they did not accept cash as a matter of policy; they gave clients account details for them to deposit the money into the appropriate accounts.

She said, in this instance, she gave the plaintiff Shirley Rae's Stanbic account.

She said once the money was deposited into an account, the deposit slip would be sufficient proof of payment.

Her evidence sounded truthful and the court accepted it.

Shirley Rae is an 83 year old lady who was around 78 years at the time of the incident with the plaintiff.

Her evidence was that the plaintiff never paid cash in her presence and never deposited any money into her account.

Her evidence was believable.

Why would an 83 year old lie against the plaintiff and say he did not pay if he had paid? All she wanted was a purchaser who would pay for her husband's property. If the plaintiff had paid, why would she have turned down his money in favour of the third defendant's money when the money tastes the same?

The court therefore accepts her evidence as truthful.

In addition to that, on 27 October 2009, when the plaintiff wrote to the second defendant, through his lawyers, requesting him to put a caveat on the property, he never said he had paid anything.

The third paragraph of that letter stated the following;

“The agreement of sale is to be satisfied within a period of three instalments as it fully appears from the attached copy of the agreement of sale.”

The use of the phrase “is to be satisfied” shows that payment had not yet been done.

If the plaintiff had already paid US$100,000 the letter would have said so.

In view of the above improbabilities in the plaintiff's claims, the court rejects the plaintiff's testimony and accepts that of Felicity Lock and Shirley Rae, that, no US$100,000 cash was ever paid by the plaintiff as a deposit for the property.

The above finding means the plaintiff was in breach of contract from the very day the sale agreement was concluded. He ought to have paid US$100,000 on signing of the agreement - he did not.

That was the first breach.

The plaintiff admitted breaching the further requirements to pay $60,000 by end of November and $60,000 by end of December.

These were the second and third breaches respectively.

In view of the three breaches, the plaintiff has no basis to claim specific performance by the first defendant.

As held in the case of Lasagne Investments (Pvt) Ltd & Others v Highdon Investments (Pvt) Ltd & Others 2010 (2) ZLR 296…, referred to by the third defendant's counsel, a litigant who seeks an order for specific performance must perforce establish that he has complied with his obligations under the agreement.

The first defendant, through its representatives, comprising of the Property Shop and Sinyoro and Partners, gave the plaintiff some grace period.

Felicity Lock's evidence was that she continued to follow up for payment.

Mataba of Sinyoro and Partners evidence was that when the plaintiff stopped responding to the Property Shop's follow-up, he got into the fray and also followed up the plaintiff.

All the plaintiff paid was the Agents Commission and the Conveyancing fees.

These follow ups and indulgences were in order because of the provisions of clause 8 of the agreement of sale between the parties.

After getting no joy from the follow ups for payment, on 27 November 2009, Sinyoro and Partners gave the plaintiff 30 days notice to remedy the breach.

The letter was sent to the plaintiff's domicilium citandi executandi given in the agreement of sale, on the schedule of details, as 40 Dover Road, Chisipite, Harare as provided in clause 9 of the agreement of sale.

The plaintiff claimed not to have seen the notice.

However, since the notice was sent to his domicilium, in terms of the agreement, the notice was validly given.

Clause 9.2 of the agreement of sale provides as follows:

“All notices required to be given in terms of this agreement, and all process, shall be deemed to have been validly given or served if addressed to the party concerned and delivered to the given domicilium, postal, or e-mail address.”

This means that a party had to choose to deliver to the given domicilium, post to the domicilium or use an email address.

In this instance, the notice was “addressed to the party concerned and delivered to the given domicilium.”

The plaintiff did nothing about the notice, and, on 30 December 2009, a letter confirming the cancellation of the agreement was addressed to the plaintiff and sent to the given domicilium.

During the trial, the plaintiff tried to take issue with the fact, that, by 30 December 2009, 30 days notice was not complete.

While the plaintiff's basis for saying that is not clear, the court notes, that, no prejudice was caused to the plaintiff thereby because the third defendant's evidence clearly shows, that, his own agreement of sale was concluded when thirty days had expired - in January 2010.

In any event, the default clause provided, that, the breach should be rectified “within thirty (30) days of notice calling upon him to do so.”

It did not say after 30 days notice.

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Zimbabwe

Specific Performance re: Time of Performance iro Debtors Mora, Mora Ex Re, Mora Ex Persona, Interpellatio & Time of Essence

HH15-09 : GRISON MUWIDZI vs OPTIMACK INVESTMENTS (PVT) LTD and REGISTRAR OF DEEDS
Ruled By: UCHENA J

HH67-10 : JAMES MUTETWA vs BARRIE DIXON and MARKO MAVHURUNE N.O. (as Executor Estate Late Samuel Mushaninga) and KENIAS MUTYASIRA N.O. (as Executor Estate Late Salome Chisvo) and REGISTRAR OF DEEDS
Ruled By: MAKARAU JP

SC21-09 : ZIMBABWE EXPRESS SERVICES (PRIVATE) LIMITED vs NUANETSI RANCH (PRIVATE) LIMITED
Ruled By: ZIYAMBI JA, GWAUNZA JA and GARWE JA

HH202-10 : OBRIDGE ENTERPRISES (PVT) LTD vs PULWICK ENTERPRISES (PVT) LTD
Ruled By: KUDYA J

HH227-10 : MIKE MAKOPE vs GEOFFREY DZUMBUNU and REGISTRAR OF DEEDS N.O. and MINISTER OF LOCAL GOVERNMENT
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HH63-13 : BLESSMORE Z. MABVURAMITI vs ALTFIN INSURANCE COMPANY
Ruled By: MAFUSIRE J

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HH86-13 : GOLDEN MILLION ENGINEERING (PVT) LTD vs METTALON GOLD ZIMBABWE (PVT) LTD
Ruled By: KUDYA J

HB158-13 : KERRIES ENGINEERING (PVT) LTD vs MAKOMO RESOURCES (PVT) LTD
Ruled By: MAKONESE J

Appealed
SC05-18 : JENNIFER BROOKER and ADRIENNE PIERCE vs RICHARD MUDHANDA and THE REGISTRAR OF DEEDS
Ruled By: GOWORA JA, HLATSHWAYO JA and BHUNU JA

View Appeal
HH637-15 : RICHARD MUDHANDA vs JENNIFER BROOKER and REGISTRAR OF DEEDS
Ruled By: MUREMBA J

Appealed
HB59-09 : DINESH MANILAL NARAN vs RONNAH MAFURIRANO and THE REGISTRAR OF DEEDS
Ruled By: KAMOCHA J

SC02-21 : EDDIES PFUGARI (PVT) LTD and EDWARD NYANYIWA vs KNOWE RESIDENTS AND RATEPAYERS ASSOCIATION and NORTON TOWN COUNCIL
Ruled By: PATEL JA, BHUNU JA and BERE JA

HH27-07 : EDWARD MARUME and ELLEN CHAMUNORWA vs TODD MURANGANWA
Ruled By: MAKARAU JP

View Appeal
HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MTSHIYA J

HB04-15 : BULAWAYO CITY COUNCIL vs TRISHUL PROPERTIES
Ruled By: TAKUVA J

SC37-09 : EDDIES PFUGARI (PVT) LTD vs KNOWE RESIDENTS ASSOCIATION and NORTON TOWN COUNCIL
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

HH801-22 : EQUITY PROPERTIES (PVT) LTD vs AL SHAMS GLOBAL BVI LIMITED and REGISTRAR OF DEEDS N.O.
Ruled By: MANGOTA J

HMA02-19 : JETINOS ZIVANOMOYO vs HELLEN DINGANI
Ruled By: MAWADZE J and MAFUSIRE J

HMA55-19 : GREAT ZIMBABWE UNIVERSITY vs NESBERT MAREVERWA
Ruled By: WAMAMBO J

HH62-14 : JOHANNES MAKONYE vs KENAE RAMODIMOOSI and ENTREDEV PROPERTY GROUP and C.H. LUKAS
Ruled By: CHIGUMBA J

HH109-08 : LLOYD GAMBIZA vs PIKIRAI TAZIVA
Ruled By: GOWORA J

HH128-06 : DOBROCK HOLDINGS (PVT) LTD and TURNER AND SONS (PVT) LTD vs TURNER AND SONS (PVT) LTD and ANTHONY TURNER and MARTIN KING and ZAMBEZI PADDLE STEAMER (PVT) LTD and DOBROCK (PVT) LTD
Ruled By: KUDYA J

HH535-15 : BLESSMORE CHANAKIRA vs SHEPHERD MALCOM N.O. and REGISTRAR OF DEEDS and PHIL RUSCH
Ruled By: NDEWERE J

Categories

Law Portal Zimbabwe

Specific Performance re: Time of Performance iro Debtors Mora, Mora Ex Re, Mora Ex Persona, Interpellatio & Time of Essence

HH15-09 : GRISON MUWIDZI vs OPTIMACK INVESTMENTS (PVT) LTD and REGISTRAR OF DEEDS Ruled By: UCHENA J

HH67-10 : JAMES MUTETWA vs BARRIE DIXON and MARKO MAVHURUNE N.O. (as Executor Estate Late Samuel Mushaninga) and KENIAS MUTYASIRA N.O. (as Executor Estate Late Salome Chisvo) and REGISTRAR OF DEEDS Ruled By: MAKARAU JP

SC21-09 : ZIMBABWE EXPRESS SERVICES (PRIVATE) LIMITED vs NUANETSI RANCH (PRIVATE) LIMITED Ruled By: ZIYAMBI JA, GWAUNZA JA and GARWE JA

HH202-10 : OBRIDGE ENTERPRISES (PVT) LTD vs PULWICK ENTERPRISES (PVT) LTD Ruled By: KUDYA J

HH227-10 : MIKE MAKOPE vs GEOFFREY DZUMBUNU and REGISTRAR OF DEEDS N.O. and MINISTER OF LOCAL GOVERNMENT Ruled By: MAVANGIRA J

HH63-13 : BLESSMORE Z. MABVURAMITI vs ALTFIN INSURANCE COMPANY Ruled By: MAFUSIRE J

Appealed HH86-13 : GOLDEN MILLION ENGINEERING (PVT) LTD vs METTALON GOLD ZIMBABWE (PVT) LTD Ruled By: KUDYA J

HB158-13 : KERRIES ENGINEERING (PVT) LTD vs MAKOMO RESOURCES (PVT) LTD Ruled By: MAKONESE J

Appealed SC05-18 : JENNIFER BROOKER and ADRIENNE PIERCE vs RICHARD MUDHANDA and THE REGISTRAR OF DEEDS Ruled By: GOWORA JA, HLATSHWAYO JA and BHUNU JA

View Appeal HH637-15 : RICHARD MUDHANDA vs JENNIFER BROOKER and REGISTRAR OF DEEDS Ruled By: MUREMBA J

Appealed HB59-09 : DINESH MANILAL NARAN vs RONNAH MAFURIRANO and THE REGISTRAR OF DEEDS Ruled By: KAMOCHA J

SC02-21 : EDDIES PFUGARI (PVT) LTD and EDWARD NYANYIWA vs KNOWE RESIDENTS AND RATEPAYERS ASSOCIATION and NORTON TOWN COUNCIL Ruled By: PATEL JA, BHUNU JA and BERE JA

HH27-07 : EDWARD MARUME and ELLEN CHAMUNORWA vs TODD MURANGANWA Ruled By: MAKARAU JP

View Appeal HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE Ruled By: MTSHIYA J

HB04-15 : BULAWAYO CITY COUNCIL vs TRISHUL PROPERTIES Ruled By: TAKUVA J

SC37-09 : EDDIES PFUGARI (PVT) LTD vs KNOWE RESIDENTS ASSOCIATION and NORTON TOWN COUNCIL Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

HH801-22 : EQUITY PROPERTIES (PVT) LTD vs AL SHAMS GLOBAL BVI LIMITED and REGISTRAR OF DEEDS N.O. Ruled By: MANGOTA J

HMA02-19 : JETINOS ZIVANOMOYO vs HELLEN DINGANI Ruled By: MAWADZE J and MAFUSIRE J

HMA55-19 : GREAT ZIMBABWE UNIVERSITY vs NESBERT MAREVERWA Ruled By: WAMAMBO J

HH62-14 : JOHANNES MAKONYE vs KENAE RAMODIMOOSI and ENTREDEV PROPERTY GROUP and C.H. LUKAS Ruled By: CHIGUMBA J

HH109-08 : LLOYD GAMBIZA vs PIKIRAI TAZIVA Ruled By: GOWORA J

HH128-06 : DOBROCK HOLDINGS (PVT) LTD and TURNER AND SONS (PVT) LTD vs TURNER AND SONS (PVT) LTD and ANTHONY TURNER and MARTIN KING and ZAMBEZI PADDLE STEAMER (PVT) LTD and DOBROCK (PVT) LTD Ruled By: KUDYA J

HH535-15 : BLESSMORE CHANAKIRA vs SHEPHERD MALCOM N.O. and REGISTRAR OF DEEDS and PHIL RUSCH Ruled By: NDEWERE J

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Law Portal
Zimbabwe

HH15-09 : GRISON MUWIDZI vs OPTIMACK INVESTMENTS (PVT) LTD and REGISTRAR OF DEEDS
Ruled By: UCHENA J

HH67-10 : JAMES MUTETWA vs BARRIE DIXON and MARKO MAVHURUNE N.O. (as Executor Estate Late Samuel Mushaninga) and KENIAS MUTYASIRA N.O. (as Executor Estate Late Salome Chisvo) and REGISTRAR OF DEEDS
Ruled By: MAKARAU JP

SC21-09 : ZIMBABWE EXPRESS SERVICES (PRIVATE) LIMITED vs NUANETSI RANCH (PRIVATE) LIMITED
Ruled By: ZIYAMBI JA, GWAUNZA JA and GARWE JA

HH202-10 : OBRIDGE ENTERPRISES (PVT) LTD vs PULWICK ENTERPRISES (PVT) LTD
Ruled By: KUDYA J

HH227-10 : MIKE MAKOPE vs GEOFFREY DZUMBUNU and REGISTRAR OF DEEDS N.O. and MINISTER OF LOCAL GOVERNMENT
Ruled By: MAVANGIRA J

HH63-13 : BLESSMORE Z. MABVURAMITI vs ALTFIN INSURANCE COMPANY
Ruled By: MAFUSIRE J

Appealed
HH86-13 : GOLDEN MILLION ENGINEERING (PVT) LTD vs METTALON GOLD ZIMBABWE (PVT) LTD
Ruled By: KUDYA J

HB158-13 : KERRIES ENGINEERING (PVT) LTD vs MAKOMO RESOURCES (PVT) LTD
Ruled By: MAKONESE J

Appealed
SC05-18 : JENNIFER BROOKER and ADRIENNE PIERCE vs RICHARD MUDHANDA and THE REGISTRAR OF DEEDS
Ruled By: GOWORA JA, HLATSHWAYO JA and BHUNU JA

View Appeal
HH637-15 : RICHARD MUDHANDA vs JENNIFER BROOKER and REGISTRAR OF DEEDS
Ruled By: MUREMBA J

Appealed
HB59-09 : DINESH MANILAL NARAN vs RONNAH MAFURIRANO and THE REGISTRAR OF DEEDS
Ruled By: KAMOCHA J

SC02-21 : EDDIES PFUGARI (PVT) LTD and EDWARD NYANYIWA vs KNOWE RESIDENTS AND RATEPAYERS ASSOCIATION and NORTON TOWN COUNCIL
Ruled By: PATEL JA, BHUNU JA and BERE JA

HH27-07 : EDWARD MARUME and ELLEN CHAMUNORWA vs TODD MURANGANWA
Ruled By: MAKARAU JP

View Appeal
HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MTSHIYA J

HB04-15 : BULAWAYO CITY COUNCIL vs TRISHUL PROPERTIES
Ruled By: TAKUVA J

SC37-09 : EDDIES PFUGARI (PVT) LTD vs KNOWE RESIDENTS ASSOCIATION and NORTON TOWN COUNCIL
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

HH801-22 : EQUITY PROPERTIES (PVT) LTD vs AL SHAMS GLOBAL BVI LIMITED and REGISTRAR OF DEEDS N.O.
Ruled By: MANGOTA J

HMA02-19 : JETINOS ZIVANOMOYO vs HELLEN DINGANI
Ruled By: MAWADZE J and MAFUSIRE J

HMA55-19 : GREAT ZIMBABWE UNIVERSITY vs NESBERT MAREVERWA
Ruled By: WAMAMBO J

HH62-14 : JOHANNES MAKONYE vs KENAE RAMODIMOOSI and ENTREDEV PROPERTY GROUP and C.H. LUKAS
Ruled By: CHIGUMBA J

HH109-08 : LLOYD GAMBIZA vs PIKIRAI TAZIVA
Ruled By: GOWORA J

HH128-06 : DOBROCK HOLDINGS (PVT) LTD and TURNER AND SONS (PVT) LTD vs TURNER AND SONS (PVT) LTD and ANTHONY TURNER and MARTIN KING and ZAMBEZI PADDLE STEAMER (PVT) LTD and DOBROCK (PVT) LTD
Ruled By: KUDYA J

HH535-15 : BLESSMORE CHANAKIRA vs SHEPHERD MALCOM N.O. and REGISTRAR OF DEEDS and PHIL RUSCH
Ruled By: NDEWERE J