GOWORA
J: The first respondent is the registered owner of an immovable property known
as Lot 2 of Lot 20A Waterfalls Induna which is 4195 square metres in extent. On
25 August 2008 the first respondent gave a mandate to the second respondent to
dispose of the property on his behalf. The second respondent is a registered
estate agent. It seems as if the second respondent already had buyers on its
books for a property such as the first respondent had on offer, because on 26
August 2008 an offer was received from the applicant for the purchase of the
property. The offer, which was in writing, was for the sum of $225 000 000-00 Zimbabwe
dollars. The applicant signed the offer form. The first respondent's signature
does not appear on the document. The applicant contends that his offer was
accepted by the first respondent and that an oral agreement was thereby concluded
between the parties which agreement was subsequently reduced to writing and
that he had signed it but the first respondent had not. The applicant further
contends that notwithstanding the refusal by the first respondent to sign the
written agreement, the parties did conclude an agreement and he wished for the
terms to be put into effect by the first respondent being ordered to effect
transfer of the property to himself. The first respondent denies the existence
of an agreement between him and the applicant and consequently prays for a
dismissal of the application.
The applicant contends that he
had initially made an offer of $150 000
000-00 for the property which had subsequently been increased to $225 000
000-00. On 26 August 2008 subsequent to the second offer he and the first
respondent had met and concluded an oral agreement for the sale of the property
at a price of $225 000 000-00. A written agreement was prepared but the first
respondent refused to sign it alleging that the purchase price had been hit by
inflation. The first respondent had apparently wished to purchase an amount of
US dollars from the purchase price. Despite that attitude of the first
respondent to the agreement, it would appear that the applicant had no
misgivings about the contract and proceeded to make a payment for the purchase
of the property.
The first issue for determination is
whether in fact an agreement of sale was concluded between the parties. There
is no dispute that the first respondent gave a mandate to the second respondent
to sell his immovable property. The applicant made two written offers, which he
signed. The first respondent did not sign either. The two offers were made a
day within each other, with both being made within twenty four hours of the
property having been placed on the market. On the same day that the second written
offer was made an amount of money corresponding to the offer made by the
applicant is alleged to have been paid as the purchase price for the property.
It is also the same day that a written agreement was allegedly drawn up for
signature by the parties. The agreement was signed by the applicant and one
other as purchasers but it is not dated. It is not disputed that the first
respondent refused to sign the agreement. Although the written agreement is
part of the documentation produced by the applicant it is the alleged oral
agreement that the applicant wishes the court to uphold and issue in
consequence an order for specific performance against the first respondent.
It is a general principle of our law
that for a contract to be said to exist, there must be a true agreement, a
meeting of the minds by the parties which is a position arrived at after
acceptance by one party of the other party's offer. Where an offer has been
made the acceptance must be clear and unequivocal so as to leave no reasonable
doubt in the offeror's mind that his offer has been accepted. See Christie Business Law in Zimbabwe 2nd
ed p42.
It is submitted on behalf of the
first respondent that for a court to decide whether there was a meeting of the
minds the court must decide the state of mind of the parties as manifested by
word or deed and not in the abstract. I think this is a correct statement of
the law. In order to decide on whether there was a meeting of the minds I have
to examine the documents produced by the parties in the application in relation
to the conduct of the parties as regards the alleged agreement. It is therefore
necessary to examine the manner in which the alleged agreement was made.
The
first is the offer made by the applicant, which bears the signature of the
applicant only. Although the applicant alluded to an initial offer of $150
000-00 that offer has not been produced herein. The only one produced is that
one for $225 000-00. It is however common cause that an offer was made. The
second offer is the one which is the subject matter of this dispute. The offer
would appear to have been made on 26 August 2008, which is the day when all the
events seem to have occurred. According to the applicant, the parties had met
at the offices of the second respondent and the agreement reached on the
purchase price. The suggestion by the applicant is that he made the written
offer after he and the first respondent had met and agreed on the purchase
price. One would assume then that the first respondent would have signed the
offer form in acceptance of the offer. He did not. A payment was then made on
the same day. There is no explanation from the applicant as to when precisely
the payment was made when regard is had to the events enfolding on the day in
question doubt is cast as to where precisely the parties were when the offer
was made and accepted. An offer was made which the applicant signed but the
first respondent did not. It seems then that a written agreement was prepared
again on the same day but the first respondent again refused to sign on the
basis that the money had been eroded by inflation.
It
is difficult to accept that the first respondent would accept an oral offer of
$225 000 000-00, refuse to accept the formal offer by signing and then on the
same day refuse to accept the written offer and again refuse to sign the
agreement of sale on that day on the grounds that the money would have been
eroded by inflationary forces. Yet if the applicant is to be believed the
parties had met at the second respondent's offices where agreement was reached
on the purchase price resulting in the written agreement being prepared. Even
in an inflationary environment as existed then, it would be hard to imagine the
value of money being so subjected by inflation within a few hours as to render
a business transaction unattractive. The first respondent had put up his house
for sale and if he received an offer he thought worthwhile one would naturally
assume he would accept, especially as payment in this instance appeared to be
instant. If they were both at the second respondent's offices as events
unfolded why would the first respondent refuse to sign the offer form or the
agreement of sale.
The
applicant's answering affidavit appears to shed light on the actual
circumstances of the alleged agreement. In para 6 thereof the applicant avers
that he had sat down with the second respondent and had agreed on a purchase
price and the mode of payment. He had then paid to the second respondent as
agent for the first respondent. He avers that the agreement was brokered by the
second respondent at his offices. This, in my view, lends credence to the
denial by the first respondent of the existence of an agreement of sale in
respect of the immovable property in question.
I
turn now to consider the issue of payment. The applicant contends that payment
was effected through the RTGS system and that this was in terms of the
agreement. Both the applicant and the
second respondent aver in their respective affidavits that it was one of the
conditions of the oral agreement of sale that payment of the purchase price
would be effected into the second respondent's account through the system
referred to above. As part of his papers the applicant has annexed an
application form for payment by the RTGS system. The beneficiary's name is that
of Apple Tree Holdings Private Limited, whilst the applicant is described as
Global Gifts and Concepts Private Limited. These names bear no relationship to
the parties appearing before me and no explanation has been proffered on how
these documents appear to be on the record.
The
first respondent has taken the point, rightly so in my view, that there is no
proof of payment into the second respondent's account. Even if payment had been
so effected, payment, according to the first respondent, was accepted by the
second respondent and not himself. It not
infrequently happens that in the sale of immovable property, the purchase price
is paid by the purchaser to the estate agent handling the sale. The vexed
question of whose agent such estate agent is in holding the purchase price has
come before these courts time and time and time again. In Frazer NO v Ruwisi
KORSAH JA had this to say:
“I think this
issue of a receipt of a deposit from a buyer was succinctly dealt with by
WATERMEYER J in Earlie Homes Estates v Miller 1977 (4) SA 288 (C) at 290C-E, where the learned judge said:
'In my view the
estate agent, unless he is the agent of the seller to receive the purchase
price which, in the absence of express or implied authority, he is not (see Tank v Jacobs, 1SC 289; Wessels
v De Villiers, 1 G 141 (1885 OFS 141)
Field & Co v Marks & Co, 12 EDC 13; Roberts
v Bryer Bros 1931 OPD 197; Burt v Claude Cousins & Co Ltd (1971) 2 All ER 611 at 615-618; and Sorrel v Finch (1967) 2 All ER 371) must hold the deposit for the would-be
purchaser. Until such time as the contract of sale is completed the would be purchaser can call upon the
estate agent to return the money, but if the contract is completed then the
estate agent is bound to deal with the deposit in terms of the contract of
sale.'”
Sometimes
an estate agent is authorized to accept payment from the buyer of a deposit
against the purchase price. In this case he would be acting in the capacity of
agent for the seller. However in most instances the estate agent acts as a
broker in which case he holds the deposit as agent for both parties and the
deposit or purchase price remains vested in the purchaser until transfer is
effected to the buyer and thereupon ownership passes to the seller. The
applicant has sought to argue that payment of $225 000-00 was in terms of the
oral agreement deposited into the account of the second respondent's by RTGS on
the instructions of the first respondent. The applicant however contends that
the payment was accepted by the second respondent in its capacity as an agent
for the first respondent.
On
1 September 2008 LT Chitsaka, the Chief Executive Officer of the second respondent,
made an electronic transfer of $38 884-00 to Global Gifts & Concepts P/L
which is the name of the account in whose favour the deposit of $225 000-00 had
been made. Again on the same day Apple Tree Holdings which had been named as
the beneficiary into whose account the $225 000-00 had been deposited into made
an electronic transfer into the account of Global Gifts & Concepts of an
amount of $146 900-00. On 15 September 2008 LT Chitsaka, who handled the
transactions on the sale, deposed to an affidavit wherein he narrated his part
in the whole saga. He does not favour the court with the reason why the first
respondent, having insisted on a purchase price of $225 000-00, had not signed
the offer form in the sum suggested by him. He also states that he prepared an
agreement for signature by the parties but again does not explain when exactly
the agreement was prepared and further, why the first respondent did not sign
the same. More importantly, he fails to explain how the money came to be
deposited into an account over which he had control given the refusal or
disinclination by the first respondent to sign any of the documents. This
account is not in the name of the second respondent, the estate agent for the
sale and purchase of the immovable property. He states that has returned the
money yet in his affidavit he contends that he is holding onto the money on
behalf of the first respondent. He states that he has asked the first
respondent to take the money. This is not true. The second respondent
apparently tried to return the money as the Annexures G1 and G2 show. He does
not explain why he attempted to return the money to the purchaser barely four
days after the transaction had been concluded. He has omitted to tell this
important fact and the reason why the money was returned. In my view he is not
being candid with the court.
What
I find significant is that nowhere in his two affidavits does he categorically
state that the first respondent mandated him to conclude an agreement and accept
the purchase price. The acceptance of a purchase price by an estate agent does
not categorically point to the principal having given the estate agent a
mandate to conclude the agreement on his behalf. He in fact says that the
parties concluded an oral agreement which he then reduced to writing. In an
affidavit filed by him under case number HC 4617/08 which was an application
brought by the first respondent for a declaratur that the alleged agreement was
null and void, Lawrence Chitsaka does make an averment in his opposing
affidavit that an agreement was concluded for $150 000-00 and that it was a
term of that oral agreement that cash be deposited in accounts were he had
signing powers to facilitate the withdrawal by him of cash so that the first respondent
would be better able to access cash to purchase foreign currency on the black
market. It is in this affidavit that he states he was mandated by the seller to
conclude an agreement of sale on his behalf. In casu however, the first respondent specifically denied ever giving
the estate agent the mandate to conclude the sale and questions how the money
was deposited into the second respondent's accounts. The estate agent did not
specifically address the matters raised by the seller or how the money came to
be deposited in the accounts in question. The applicant's legal practitioners
have not been able, in the heads of argument or even in submissions in court,
to fully explain why payment was made into the accounts in question or why
there was an attempt on the part of the estate agent to refund the money to the
purchaser.
The
mode of payment of the purchase price would be one of the terms that the parties would have agreed upon when
concluding the agreement of sale. The applicant relies on an oral agreement and
it is harder to establish agreed terms when relying on an oral agreement. In
this instance the applicant has not been able to establish on the papers what
the parties had agreed to in relation to the payment. Other conditions
including vacant possession, transfer and other requirements to the sale of an
immovable property have not even been mentioned. If the parties concluded an
oral agreement as is averred by the applicant, then it was incumbent upon the
applicant to establish the terms of that agreement and further that he as purchaser
had complied with the terms agreed to by the parties. The applicant has not
established such terms.
In
the premises I find that the applicant has not established his claim and the
application for specific performance is dismissed with costs.
Chinyama & Partners, applicant's legal practitioners
Munangati &
Associates, first respondent's legal practitioners
