No. SC 90/02
Appeal No. 210/01
GARDENS RESIDENTS ASSOCIATION v
ZIMBABWE REINSURANCE CORPORATION LIMITED
RICHARD ELLIS (3) THE REGISTRAR OF DEEDS
COURT OF ZIMBABWE
CJ, ZIYAMBI JA & MALABA JA
JULY 1 & OCTOBER 30, 2002
for the appellant
for the first respondent
appearance for the second and third respondents
JA: This is an appeal from a judgment of the High Court delivered
on 18 July 2001 discharging a provisional order
with costs the application made by the appellant for an interim
interdict against the respondents in case HC 6127/01.
first respondent is the owner of three hundred and eighty-four
two-bedroom flats in Harare, collectively known as Eastview
Gardens. The appellants members rented the flats from the
first respondent. It is common cause that the first respondent
a decision to sell the flats and instructed the second respondent and
other estate agents to do so on its behalf.
9 February 2001 a letter was written on behalf of the first
respondent to the sitting tenants of Eastview Gardens by National
Real Estate (Private) Limited in the following terms:
PROPOSED SALE OF EASTVIEW GARDENS
is made to the above matter. The owners of Eastview Gardens, the
Zimbabwe Reinsurance Company Limited, have advised that
they shall be
selling the premises you are leasing from them. The sale shall be
on sectional title basis and each flat shall have
title deeds on
a sitting tenant, we are hereby giving you notice of the owners
intention to sell the flat and advise that we are offering you
option) to purchase if you are interested in doing so. The purchase
price for the flat is $950 000.00. The terms of
payment are as
* 25% cash deposit and the
balance payable by mortgage loan; or
cash deposit and the balance payable over six equal monthly
deposit and/or full mortgage bond/loan from employer.
you please advise us in writing whether or not you shall be taking up
the offer as soon as possible and in any event by 28 February
2001. In addition, if you are taking up the offer, may you please
call at our offices in person to complete the necessary formalities
by the same date.
first respondent later decided to offer the flats for sale block by
block. On 15 February 2001 a letter was written to
advising them of the new decision and withdrawing the offer made on
9 February 2001 to sell the flats to them as
It read as follows:
PROPOSED SALE OF EASTVIEW GARDENS
is made to our letter of 9 February 2001 in respect of the above
be advised that the offer made to purchase the unit you occupy has
been withdrawn. This follows the decision by the seller
to sell the
flats block by block. However, should you wish to purchase a unit
into Eastview Gardens now, you may choose from the
block that shall
be selling at any one point in time.
any event, you still need to confirm your interest in purchasing a
unit by close of business on 28 February 2001.
close of business on 28 February 2001 some of the tenants had
taken up the offer. They had indicated the units they wanted
purchase. Others had not done so. The flats were then offered to
members of the public at the same price they were offered
Some of the tenants who had not,
by close of business on 28 February 2001, accepted the offer to
purchase units in Eastview Gardens,
turned to court in a bid to force
the first respondent to sell them the flats they occupied. They
made an urgent application to
the High Court on 13 March 2001
for an interim interdict restraining National Real Estate (Private)
Limited from selling and
transferring all the flats constituting
Eastview Gardens to any other party pending the outcome of
proceedings to be instituted
at the High Court, Harare, for a
determination of (the) applicants rights of pre-emption in terms
of the lease agreements.
The applicant was, however, the
appellant, which claimed rights as if it was a tenant.
averments made in the founding affidavit deposed to by the
appellants chairman in case HC 2665/01 were that the
first respondent had, in the letter of 9 February 2001, given
the appellant a right of first refusal to buy the flats.
alleged that the first respondent had wrongfully revoked the right of
pre-emption in the letter of 15 February 2001.
opposing the application, National Real Estate (Private) Limited made
three observations. It indicated that it was the wrong
party to be
sued. As an estate agent, it was carrying out instructions from the
owner of the flats. As such it could not decide
whether or not they
should be sold. The second observation made was that the letter of
9 February 2001 did not grant a right
of pre-emption to the
sitting tenants. It was said the letter contained a simple offer to
sell the flats to the tenants. They,
in turn, had to accept the
offer by the close of business on 28 February 2001. The last
contention was that the appellant,
as an association, could not claim
a right of pre-emption over the flats. The letter of 9 February
2001, on which the alleged
cause of action was based, had not been
addressed to it. The appellant had no lease agreement with the
application was dismissed on 26 March 2001.
the same day that the urgent chamber application in case HC 2665/01
was dismissed, a court application was made in the name
appellant in case HC 3277/01. This time the respondents were
the Zimbabwe Reinsurance Corporation Limited, National
(Private) Limited and Gainsborough Estate Agents. The relief sought
was an order that:
1. The applicants members,
totalling three hundred and nine, be and are hereby granted the right
to purchase their respective flats,
which right they should exercise
within twelve months from the date of this order.
2. Any sales of the respective
flats which the respondents had approved prior to the date of this
order be and are hereby cancelled.
founding affidavit, deposed to by the secretary of the appellant,
contained the same allegations of fact as had been made in the
founding affidavit in case HC 2665/01. The respondents filed
the matter was heard, the appellant made yet another urgent chamber
application on 23 June 2001, in case HC 6127/01.
case the appellant sued the three respondents now before this Court.
The application seems to have been prompted by an
placed in a daily newspaper by the second respondent on 21 June
2001, to the effect that the flats in Eastview
Gardens were on sale.
The first and second respondents were called upon to show cause why
a final order should not be made against
them, prohibiting the
disposal of the flats occupied by the three hundred and nine tenants
pending the finalisation of the proceedings
in case HC 3277/01.
The third respondent was called upon to show cause why he should not
be prohibited from registering the
transfer of any of the flats
specified therein pending the finalisation of the proceedings in case
HC 3277/01. The appellant
sought and was granted as interim
relief an interdict restraining the respondents from committing any
of the prohibited acts pending
the discharge or confirmation of the
allegations made in the founding affidavit in support of the
application were again that the letter of 9 February 2001
to the appellant a right of pre-emption. In opposing the
application, the first respondent contended that the letter did not
the right claimed by the appellant. It said the letter was
a simple offer to sell to the sitting tenants the flats at the
price. The submissions made on behalf of the appellant
did not find favour with the learned judge who heard the application.
He discharged the provisional order and dismissed the application
with costs. He said:
an interdict prohibiting the
first respondent from selling the vast majority of the flats in the
complex cannot, in my mind, be justified.
There is no evidence that
all of the tenants in those flats are interested (in) and able to buy
the flat each occupies. The applicant
itself has no right of first
refusal as claimed in the founding affidavit. Such a right was
offered to the tenant of each flat.
It is only those tenants who
have accepted the offer that can seek to enforce them.
grounds of appeal were that the learned judge in the court a
quo erred in
discharging the temporary interdict and paved the way for the first
respondent to dispose of the flats to the detriment
of the rights of
the appellants members in case HC 3277/01.
question to be answered is whether or not the appellant placed before
the court a quo
facts from which the learned judge ought to have found that the
requirements for the granting of a temporary interdict had been met.
Eriksen Motors (Welkom)
Ltd v Proten Motors, Warrenton & Anor
1973 (3) SA 685 (A) HOLMES JA, dealing with the requirements of
temporary interdicts, said the following at 691 C-G:
granting of an interim interdict pending an action is an
extraordinary remedy within the discretion of the Court. Where the
right which it is sought to protect is not clear, the Courts
approach in the matter of an interim interdict was lucidly laid down
by INNES JA in Setlogelo
v Setlogelo 1914 AD
221 at p 227. In general, the requisites are:
(a) a right which, though
established, is open to some doubt;
well grounded apprehension of irreparable injury;
(c) the absence of ordinary
In exercising its discretion the
Court weighs, inter
alia, the prejudice to
the applicant if the interdict is withheld, against the prejudice to
the respondent if it is granted. This is
sometimes called the
balance of convenience.
foregoing considerations are not individually decisive, but are
interrelated; for example, the stronger the applicants prospects
of success the less his need to rely on prejudice to himself.
Conversely, the more the element of some doubt, the greater
need for the other factors to favour him.
Viewed in that
light, the reference to a right which, though prima
facie established, is
open to some doubt, is apt, flexible and practical, and needs no
was, in my view, no question of the right of pre-emption having been
established on the facts of this case. The right was just not
available to the appellant or the tenants themselves because the
letter of 9 February 2001 did not create it.
right of first refusal or pre-emption is created when in an agreement
one party (the grantor) undertakes that when he decides
to sell his
property he will first give the other party (the grantee) the
opportunity of refusing or buying the property at a price
that offered by another person. The grantor is then said to be
under an obligation to do, at the time he sells the property,
voluntarily bound himself to do, that is, offer the property to the
grantee first at a price equal to that offered by a third
which he is prepared to accept from any other would-be buyer. The
grantee is said to have acquired the correlative right
to have the
property offered to him first so that he can match the price offered
by the third party or refuse the offer. The grant
does not entail
an existing offer because it conditions it. See Manchester
Ship Canal Company v Manchester Racecourse Company
 2 Ch 37 at 46-47; Sher
v Allan 1929 OPD 137
at 140-142; Cohen v
Behr 1946 CPD 942 at
946-947; Bellairs v
Hodnett & Anor
1978 (1) SA 1109 at 1138F-1139H; Hirschowitz
v Moolman & Ors
1983 (4) SA 1 at 6 A-H; Sotoriou
v Retco Poyntons (Pty) Ltd
1985 (2)SA 922 at 932 B-G; Madan
v Macedo Heirs & Anor
1991 (1) ZLR 295 (S) at 302A-303D.
is clear from all these decided cases that a right of pre-emption can
only be created by contract or agreement between the grantor
grantee. Where breach of the right is alleged as a cause of action
and its existence is denied, the onus
is on the plaintiff to show that there was an agreement between the
parties in terms of which the defendant undertook to offer to
property at a price equal to that offered by another.
establish a prima facie
existence of the right of pre-emption in its favour or in favour of
the tenants, the appellant had to show that the letter of 9 February
2001 contained an offer, the terms of which constituted a right of
pre-emption and that there was acceptance of the offer.
for a moment the question whether the letter contained an offer of a
right of first refusal as defined above, the appellant
the tenants interested in the relief sought in case HC 3277/01
did not accept the offer contained in the letter.
The reason given
for the non-acceptance of the offer was that it was withdrawn by the
first respondent on 15 February 2001.
On its own admission, it
is clear that there was no contract reached by the parties in terms
of which the right of pre-emption was
created. Without a contract
there cannot be a right of pre-emption.
there is no question of the letter of 9 February 2001 being an
offer of a right of first refusal. It does not mention
the right at
all. I agree with Mr Girach
that the letter contains a simple offer by the first respondent to
sell the flats to the sitting tenants at the specified price.
is an invitation to them to indicate in writing acceptance of the
offer by close of business on 28 February 2001.
It is an
ordinary offer unaccompanied by an undertaking by the first
respondent to keep it open until close of business on 28 February
2001. There was no promise not to revoke the offer during the
period fixed for the notification of its acceptance.
general rule is that an ordinary offer may be withdrawn on notice to
the offeree at any time before it is accepted. See
Yates v Dalton 1938
EDL 177; Bird v
Sumerville 1960 (4) SA
395 (N) at 400F; Stewart
v Zagreb Properties (Pvt) Ltd
1971 (2) SA 346 (R, AD) at 352.
the time the offer contained in the letter of 9 February 2001
was withdrawn none of the three hundred and nine tenants involved
case HC 3277/01 had indicated in writing acceptance of the
offer. In fact, none of them accepted the offer before the close
business on 28 February 2001.
offer lapsed on the expiry of the period within which its acceptance
had to be communicated to the first respondent. Mr Zhou,
who appeared on behalf of the appellant, could not argue that the
withdrawal of the offer contained in the letter of 9 February
2001 had the effect of extending the time within which the parties
ought to have entered into contracts of sale on the terms of the
offer of 9 or 15 February 2001.
not communicating to the first respondent their mental states on the
offer before the close of business on 28 February 2001
tenants were presumed to have rejected the offer made on 9 February
2001. They did not accept the new offer made on 15 February
appellant sought the interim interdict to protect a right it knew had
not accrued to it or its members at the time it made the
The relief sought in case HC 3277/01 was a court order
granting the tenants a right to purchase the flats they
To successfully interdict the first respondent from selling its
property to whomsoever it chose to contract with, the
the tenants had to found the cause of action on a breach of contract
appellant and its members knew they could not found a cause of action
against the first respondent on the lease agreements.
was not a party to the lease agreements and the agreements did not
contain any term, the breach of which could entitle
the tenants to an
interdict restraining the first respondent from exercising the right
of alienation of the flats. Realising the
futility of an attempt to
found a cause of action against the first respondent on an alleged
breach of a right of pre-emption as
they clearly could not prove the
existence of a contract in which the right was given, the appellant
and its members sought to found
a cause of action in a court order.
have no power to create legal rights. Their duty is to interpret
the law and declare existing rights which they enforce.
If, as was
the case here, there was no agreement between the first respondent
and the tenants in terms of which the right to purchase
they occupied was given to the tenants, the Court had no basis on
which to grant them a right to purchase the same. Courts
make contracts for parties.
appeal is without merit. It is dismissed with costs.
CJ: I agree.
appellant's legal practitioners
respondents legal practitioners