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HH132-10 - CABINET MACHINGAMBI and PATRICIA CHIMBALAMI and SIMBAI MANGENA and OTHERS vs DOUGLAS NYAUDE and D. MNETSI ENTERPRISES and REGISTRAR OF DEEDS

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Law of Contract-viz essential elements re consensus ad idem.

Purchase and Sale-viz purchase price re mode of payment.
Purchase and Sale-viz purchase price re manner of payment.
Law of Property-viz instalment sale of land.
Law of Contract-viz variation of contract.
Law of Contract-viz variation of agreement.
Law of Contract-viz ratification re unilateral variation of a contract.
Law of Contract-viz unilateral variation of an agreement re ratification.
Agency Law-viz real estate agent.
Procedural Law-viz dispute of facts re form of proceedings.
Procedural Law-viz disputes of fact re form of proceedings iro application procedure.
Procedural Law-viz conflicts of fact re form of proceedings iro referral to trial.
Company Law-viz resolutions re quorum iro authority of a meeting to pass legally binding resolutions in the absence of the requisite quorum to constitute a valid meeting.
Procedural Law-viz rules of evidence re documentary evidence iro authentification.
Law of Contract-viz termination re breach of contract.
Law of Contract-viz cancellation re breach of contract.
Law of Contract-viz essential elements re condition precedent.
Law of Contract-viz ratification.

Variation of Contracts re: Approach and Resolution of Contractual Lacunas

The thirteen applicants are members of Printers Housing Co-operative Limited. It is common cause that sometime around 2005 they concluded individual standard contracts of sale with the first respondent, Douglas Nyaude, a registered Estate Agent practicing under the style of Graham and Douglas Real Estate Agent. The contracts were in respect of the sale of certain pieces of immovable properties mentioned in the respective contracts.

Occupation was supposed to take place upon the completion of servicing of the properties.

The applicants proceeded to pay their respective deposits and instalments in terms of their Agreements.

In terms of the standard form of contract, the purchase price was to be paid in instalments. The relevant clause provided as follows:-

“MODE OF PAYMENT:

(i)  A deposit of..., payable as follows:-

-$..., upon signing thereof.

-$..., payable on...,

(ii) The balance of..., plus 30% interest per annum payable in monthly instalments of not less than $..., over a period of 24 months with the first instalment payable on....,”

Owing to rampart inflation, the Seller found it impossible to service the land from the proceeds of the sale.  As a result, the first respondent unilaterally increased the purchase price to cover the increased costs of servicing the stands.

That much is not in dispute.

The bone of contention is whether or not the applicants subsequently ratified the unilateral increase thereby compromising their position.

Approach re: Contract for the Benefit of a Third Party, Stipulatio Alteri & the Ratification or Adoption of Agreements

According to the first respondent, a meeting of stakeholders was convened on 7 October 2006 to chart the way forward. At that meeting, he alleges that it was resolved that-

“Sometime in April, D. Nyaude increased the purchase price to $159,000,000= (REVALUED) per square metre and then communicated to all Stand owners. At the meeting, he apologized for communication breakdown and the apology was unanimously accepted by all stakeholders who attended the meeting.  Due to the fact that two hundred and seventy-eight stakeholders were not paying the proposed purchase price as at April 2006, the stakeholders present at the meeting unanimously resolved that:-

1.  The ratification of April increase.

2. All stakeholders should pay all their arrears of the purchase price as at April on or before 31 October 2006.

3. If one fails to pay by 31 October 2006, the Stand shall be repossessed (sic) and sold to enable to the completion of the project.

4.  A meeting shall be held during the first week of November to check on:-

1.1 Progress on site up to date.

1.2 Payment position by those who had not paid the April increase that had been ratified.

1.3 Way forward.

Signed…………

G. Batani

PROJECT MANAGER.”

The applicants deny that they are bound by the above resolution and insist that the price was unilaterally increased without their consent.

The fundamental dispute to be resolved is, therefore, whether or not the applicants are bound by the resolution.

Disputes of Fact or Conflict of Facts re: Approach, Factual, Non-Factual, Questions of Law and Material Resolutions

Whether or not the applicants consented to the variation of the price stipulated in their original contract of sale is a factual dispute incapable of being resolved on the papers.

On the papers, it cannot be ascertained whether or not the applicants were present at the stakeholders meeting which allegedly unanimously ratified the unilateral increase of the original purchase price.

From the tone of the alleged minutes of that meeting we already know that not all stakeholders or Sand owners attended the meeting. If they were not present it cannot be ascertained, on the papers, whether that meeting had the authority to legally bind the applicants in their absence.

I also note, in passing, that the minutes do not appear to have been signed or authenticated by anyone purporting to represent the owners or stakeholders – let alone the applicants. The validity or otherwise of the minutes is, however, a question of evidence.

The resolution of the above factual disputes is, in my view, central to the determination of the legality or otherwise of the cancellation of the applicant's respective contracts of sale on allegations of breach of payment of the purchase price.

In the interests of justice, it is necessary that the matter be referred to trial for the resolution of the factual disputes in this case. It is accordingly ordered-

1. That this matter be and is hereby referred to trial.

2. That the papers already filed shall stand as pleadings with the parties being granted leave to file any supplementary pleadings.

3. That the parties shall observe all procedural requirements before proceeding to trial.

BHUNU J:   The thirteen applicants are members of Printers Housing Cooperative Limited. It is common cause that sometime around 2005 they concluded individual standard form contracts of sale with the first respondent Douglas Nyaude a registered estate agent practicing under the style of Graham and Douglas, Real Estate Agent. The contracts were in respect of the sale of certain pieces of immovable properties mentioned in their respective contracts.

In terms of the standard form contract the purchase price was to be paid in installments. The relevant clause provided as follows:

 

“MODE OF PAYMENT:

 

i)                    a deposit of ….. payable as follows

-           $ ..... upon signing there of.

-           $ ...... payable on ….

(ii)               The balance of … plus 30% interest per annum payable in monthly installments of not less than $ ...... over a period of 24 months with the first installment payable on ….”

 

Occupation was supposed to take place upon the completion of servicing of the properties. The applicants proceeded to pay their respective deposits and installments in terms of their agreements. Owing to rampant inflation the seller found it impossible to service the land from the proceeds of the sale. As a result the first respondent unilaterally increased the purchase price to cover the increased costs of servicing the stands. That much is not in dispute.

The bone of contention is whether or not the applicants subsequently ratified the unilateral increase thereby compromising their position.

According to the first respondent a meeting of stake holders was convened on 7 October 2006 to chart the way forward.  At that meeting he alleges that it was resolved that:

 

“Some time in April D Nyaude increased the purchase price to $159,000,000-00 (REVALUED), per square metre and then communicated to all stand owners. At the meeting he apologized for communication breakdown and the apology was unanimously accepted by all stakeholders who attended the meeting.

 

Due to the fact that two hundred and seventy eight stakeholders were not paying the proposed purchase price as at April 2006 the stakeholders present at the meeting unanimously resolved that:-

 

1.         The ratification of April increase

2.         All stake holders should pay all their arrears of the purchase price as at April on or before 31 October 2006.

3.         If one fails to pay by 31 October 2006 the stand shall repossessed (sic) and sold to enable to the completion of the project.

4.         A meeting shall be held during the first week of November to check on:-

 

1.1              Progress on site up to that date.

1.2              Payment position by those who had not paid the April increase that had been ratified.

1.3              Way forward.

 

 

Signed…………………………….

G. Batani

PROJECT MANAGER.”

 

The applicants deny that they are bound by the above resolution and insist that the price was unilaterally increased without their consent. The fundamental dispute to be resolved is therefore whether or not the applicants are bound by that resolution. Whether or not the applicants consented to the variation of the price stipulated in their original contract of sale is a factual dispute incapable of being resolved on the papers.

On the papers it cannot be ascertained whether or not the applicants were present at the stakeholders meeting which allegedly unanimously ratified the unilateral increase of the original purchase price. From the tone of the alleged minutes of that meeting we already know that not all stakeholders or stand owners attended the meeting. If they were not present it cannot be ascertained on the papers whether that meeting had the authority to legally bind the applicants in their absence. I also note in passing that the minutes do not appear to have been signed or authenticated by anyone purporting to represent the owners or stakeholders let alone the applicants. The validity or otherwise of the minutes is however a question of evidence.

The resolution of the above factual disputes is in my view central to the determination of the legality or otherwise of the cancellation of the applicants' respective contracts of sale on allegations of breach of payment of the purchase price.

In the interest of justice it is necessary that the matter be referred to trial for the resolution of the factual disputes in this case. It is accordingly ordered:

 

1.                  That this matter be and is hereby referred to trial.

2.                  That the papers already filed shall stand as pleadings with parties being granted leave to file any supplementary pleadings.

3.                  That the parties shall observe all procedural requirements before proceeding to trial.

 

 

Chikumbirike & Associates, applicants' legal practitioners.

Mbidzo Muchadehama & Makoni, respondents' legal practitioners
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