REPORTABLE (102)

Judgment No. SC. 100/04

Civil Appeal No. 370/03

JULIUS MAZODZE v FARAI PHINEAS MANGWANDA

SUPREME COURT OF ZIMBABWE

CHIDYAUSIKU CJ, ZIYAMBI JA & GWAUNZA JA

HARARE JULY 15, 2004 & JANUARY 31, 2005

G. Mandizha, for the appellant

G. Machingambi, for the respondent

CHIDYAUSIKU CJ: The facts of this case, which are set out very clearly in the judgment of the court a quo, are as follows.

On 28 January 2003 the parties entered into a written agreement of sale of the appellant’s house, Number 1837 Kushinga Crescent, Ruwa, to the respondent for the sum of $11 000 000.00. The $11 000 000.00, in terms of clause A of the agreement’s special conditions, was to be raised by the respondent obtaining “a 100% bond from Kingdom Bank as referred (sic) in the purchase price and terms of payment above within 30 days of the date hereof which bond will be applied for by the purchaser on the signing hereof and will be applied for by the purchaser on the signing hereof and will be accepted by him when offered”.

Condition 2 of the general conditions provides for a bank guarantee or other guarantee acceptable to the seller for the payment of the purchase price. The agreement provides that in the case of conflict between general conditions and special conditions, special conditions shall prevail.

Instead of applying for the 100% bond from Kingdom Bank the respondent applied for and obtained a CABS loan guaranteed by Kingdom Bank as surety to the CABS loan.

The appellant’s appointed conveyancers on 21 February 2003 wrote to the respondent tendering transfer of the property. The conveyancers attached the mortgage bond for the respondent to sign at the foot of the second page. This means by 21 February 2003 CABS had advised the appellant’s conveyancers of its willingness to loan to the respondent $11 000 000.00 for the purchase of the appellant’s property.

The respondent argued in the court a quo that even though there was a condition precedent he had satisfied it by tendering the purchase price within the stipulated period even though the money was not from Kingdom Bank. He argued that all the parties wanted was securing of the purchase price whether in forma specifica or by an equivalent act. He further argued that his obtaining of a loan from CABS guaranteed by Kingdom Bank constituted a substantial performance of the obligation contained in the special condition which entitled him to an order requiring the appellant to sign all the necessary papers for the transference of the property to his name and, in the alternative, that the Deputy Sheriff be authorised to sign the relevant papers on behalf of the appellant.

The appellant, on the other hand, argued that because the transference was not strictly in accordance with the wording of the agreement he was entitled to resile from the agreement.

The learned judge in the court a quo, after a very careful analysis of the facts and the law applicable came to the conclusion that the respondent should succeed and ordered the appellant to sign all the necessary papers to transfer the property into the name of the respondent. The appellant was dissatisfied and noted an appeal to this Court.

Before the appeal was heard the appellant filed a Chamber Application in terms of Rule 39 subrule (4) of the Rules of this Court to lead further evidence. I ordered that the application to lead further evidence be heard at the same time as this appeal. Accordingly, that application was heard together with this appeal.

The further evidence that the appellant seeks to place before this Court was that on 28 January 2003 he had entered into an agreement of sale for immovable property in terms of which he sold Stand 1837 Kushinga Crescent, Ruwa, to the respondent. On 7 April 2003 he unilaterally cancelled that agreement on the basis that the respondent had breached the agreement by changing the source of the purchase price without his consent and that after he had received the court application on 24 May 2003 in the court a quo, he instructed his legal practitioners to defend the matter. The matter was set down on 21 October 2003 and a court order for specific performance was granted in favour of the respondent. By the time the order for specific performance was granted he had already sold and disposed of the immovable property to a third party by the name of Gordon Chikumbu and that after he had signed all the necessary papers for the registration and transfer of the property into the name of the third party the property was now registered in the name of the third party.

Thus, on the date the court issued an order for specific performance the property in question was registered in the name of the third party and the third party was not a party to the proceedings.

The facts of this case therefore are somewhat unusual. I have no doubt in my mind that the judgment of the court a quo was correct given the facts of the evidence before it. However, I have no doubt in my mind that if the learned judge in the court a quo had been aware that the property in respect of which he was about to issue an order had already been transferred to a third party he would have directed that the third party be joined to the proceedings and given an opportunity to defend his rights in the property in respect of which an order was sought. The court was not aware of the latest development, as no evidence had been placed before it. The court made an order that I have no doubt it would not have made because it was not capable of fulfilment.

Given these facts this Court has no option but to set aside the order given by the court a quo and refer the matter back to the court a quo so that the third party is joined to the proceedings and a fresh determination be made after the third party has been given an opportunity to establish whether he was an innocent purchaser or not, which determination might affect the outcome of the proceedings.

However, this situation has been brought about by the deceitful conduct of the appellant and he should bear the costs of these proceedings on an attorney and client scale.

In the result the appeal succeeds to the extent that the order made by the court a quo is set aside and the matter is remitted to the court a quo for the joinder of the third party and determination of the matter afresh. The appellant shall bear the costs of these proceedings on an attorney and client scale.

ZIYAMBI JA: I agree.

GWAUNZA JA: I agree.

Mhiribidi, Ngarava & Moyo, appellant's legal practitioners

G. Machingambi, respondent's legal practitioner