The appellant issued summons in the High Court, Bulawayo,
seeking an order declaring the sale agreement concluded between him and the
first respondent to be valid and binding on the parties as well as an order
compelling the first respondent to transfer, to the appellant, her rights title
and interest in Stand Number 378 Gorebridge Road, Killarney, Bulawayo
(hereinafter referred to as “the property”) failing which the Deputy Sheriff be
authorized to sign all documents necessary to effect the transfer.
In the alternative, the appellant sought a refund in the
sum of Z$1,500,000= plus interest a tempore morae from 31 October 2001,
compensation in the sum of Z$2,500,000= for improvements on the property and
costs of suit against the first respondent on a legal practitioner and client
scale.
The High Court found that the agreement between the parties
had been cancelled by the appellant and that the latter was entitled to a
refund of the sum of Z$1,500,000= as well as compensation for proved
improvements. The appellant was ordered to pay the costs of suit.
This is an appeal against the judgment of the High Court.
Out of the numerous grounds of appeal (19 in all) forming
part of the notice of appeal most of which amounted to no grounds at all in
terms of the Rules of the Supreme Court, the determining issue is whether or
not the trial court was wrong in its finding that it was the appellant himself
who cancelled the agreement.
The facts may be briefly stated as follows.
The appellant (“Naran”) and Thokozani Khumalo (“Khumalo”)
are business partners. Khumalo was a tenant at the property which is owned by
the first respondent. Sometime in 2001, an opportunity arose for the first
respondent and her husband (“Mr Mafurirano”) to purchase a farm and a business.
They decided to sell the property in order to raise money for that purpose and
gave Khumalo the first option to purchase it. Khumalo sought financial
assistance from Naran, and, shortly thereafter, the Mafuriranos were referred
to Naran's legal practitioner (“Mr
Ndlovu”) with whom they agreed on a
price of Z$5.3 million. An Agreement of Sale was drawn up between Naran and Mrs
Mafurirano. Paragraph 1 of the Agreement provided as follows:
“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 Z$2,500,000= (two million five hundred thousand
dollars) shall be paid upon the signing of this Agreement and the balance of
Z$2,800,000= (two million eight hundred thousand) shall be paid in monthly
instalments of Z$1,500,000= with effect from on or before the 31 October
2001 finishing with the balance of Z$1,300,000=. 30% per month interest shall
be paid on Z$2,300,000=.”
Mrs Mafurirano signed the agreement on 12 September
2001 and returned it to Mr Ndlovu for signing by Naran who eventually signed on
30 September 2001.
No payment of the deposit was made on that date
notwithstanding the provision for payment of a deposit upon signature of the Agreement.
It was not until 26 October 2001 that Naran made a payment of Z$1,500,000=.
Numerous efforts by the Mafuriranos to obtain further
payment from him met with no success. They consulted Mr Ndlovu, who referred
them to Naran. On 7 November 2001, Mr Mafurirano had a meeting with Naran who
advised him, firstly, that Mr Ndlovu had had no right to enter into the Agreement
on his behalf, secondly, the house was overpriced and he could get a better
house for the same price in Ilanda or Famona, and, thirdly, that of the Z$1.5
million which he had paid, $1.1 million was to be returned and the balance of $400
000, 00 was to be kept by the Mafuriranos for the inconvenience caused to them.
It was the Mafurirano's understanding that by making the
above utterances to him, Naran had cancelled the Agreement.
He therefore wrote to Khumalo the following day relating
the above and informing Khumalo, inter alia, that the Mafuriranos had, in the
circumstances, taken a decision not to dispose of the property. No response
having been received from Khumalo to the letter, the Mafuriranos instructed
their legal practitioners to write to Naran. The letter, dated 7 February 2002,
read in relevant part, as follows:
“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
instalments 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 that 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”…,.
Still no response having been received, another letter,
dated 2 May 2002, was written. It read thus:
“Dear Sir
Re:
Agreement of Sale with Ronnah Mafurirano
We refer to the above.
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 so. In fact you only paid the sum of $1,100,00=
(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 instalment. You have breached your
contract.
Due to your breach of 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 instalment paid to her.
Yours faithfully
Majoko and Majoko”
Both letters were addressed to Naran, personally, but were
sent to a wrong address. However, Mr Ndlovu,
his legal practitioner, admitted that they had been received at his office and
that, despite his denials, Naran was aware of the letters. Mr Ndlovu also admitted, in his evidence to
the court a quo, that although Naran was in material breach of the agreement,
the Mafuriranos kept on granting extensions up to 2 May 2002 when they
caused the letter to be written by their legal practitioners accepting the
cancellation of the agreement.
Naran's allegations to the contrary were not accepted by
the court a quo. His evidence was rejected by that court as being unworthy of
belief. The evidence of Naran conflicted with that of his two witnesses
(including his legal practitioner) both of whose evidence supported the
evidence of Mr Mafurirano.
It was contended, on behalf of the appellant, that the sale,
being an instalment sale, was unilaterally cancelled by the first respondent in
violation of section 8 of the Contractual Penalties Act [Chapter 8:04], which
requires that notice of cancellation should be given to the purchaser by the
seller and specifies the manner in which such notice should be given.
The learned Judge, however, accepted, on the evidence of Mr
Mafurirano, as corroborated by Mr Ndlovu, that the Agreement was cancelled, not
by the first respondent but by Naran.
This conclusion, in our view, is amply supported by the
evidence.
The appeal is therefore devoid of ment.
It is for the above reasons that after hearing
counsel, we dismissed the appeal with costs and indicated that our reasons
would follow.
