DISTRIBUTABLE (63)

Judgment No. SC 66/07

Civil Appeal No. 67/06

CEPHAS MACDONALD MUSWERE v (1) REYNOLD MALCOLM BROWN (2) ADRIEN BROWN

SUPREME COURT OF ZIMBABWE

MALABA JA, GWAUNZA JA & GARWE JA

HARARE, FEBRUARY 15, 2007 & JULY 23, 2008

S Mandizha, for the appellant

D Mandaza, for the respondents

GARWE JA:

This appeal is against the decision of the High Court dismissing an application made by the appellant to rescind a default judgment granted against him on 24 February 2005 ordering, inter alia, his eviction from an immovable property known as Green Valley of Glyn Tor, situate in Masvingo.

The background to this matter is as follows. The respondents are the owners of Green Valley of Glyn Tor in Masvingo (“the property”). On or about 22 January 2003, the respondents entered into a verbal agreement of sale of this property with the appellant. The purchase price was agreed at $13,000,000.00. The appellant issued two cheques each in the sum of $6.250.000.00. The first cheque dated 13 March 2003 was met by the appellant’s bankers. When the second cheque dated 3 April 2003 was presented for payment it was dishonoured and returned with the inscription “R/D”. The narration “R/D” on the cheque indicates that the cheque was referred to drawer. It was not stopped as suggested by the appellant. As a result of this development the respondents instructed their legal practitioners to cancel the agreement and demand that the appellant vacates the property. The appellant did not vacate contending that he was not in breach.

The respondents then issued a summons seeking the eviction of the appellant and holding over damages. The appellant entered an appearance to defend and thereafter filed his plea. The respondents then filed an application for summary judgment. That application was set down before the High Court on 24 February 2005. The appellant was in default on that day and consequently a default judgment was granted against him. He then filed a notice of appeal against that judgment on 9 March 2005. Realizing that it is not proper to file an appeal against a default judgment, the appellant then filed an application for the rescission of the default judgment on 30 March 2006. The High Court dismissed the application for rescission of judgment in so far as it related to the eviction of the appellant from the premises in question. The court, however, rescinded the portion of the default judgment granting holding over damages.

The appellant now appeals to this Court against the order dismissing his application for rescission of judgment. His grounds of appeal are:-

1. The learned Judge erred in upholding an order of ejectment of the appellant from Green Valley of Glyn Tor more particularly in that:-

   1. The learned Judge failed to appreciate that there had been no service of the notice of set down on the appellant and that therefore the appellant had not been in wilful default.

2. The learned Judge misdirected herself in coming to the conclusion that the appellant did not have a bona fide defence to the respondent’s claim when it was clear that the sale agreement between the two parties was an instalment sale of land which obliged the aggrieved party to give the other 30 days notice to rectify the breach.

3. The learned Judge misdirected herself in relying on two faxed documents which were correspondence between the appellant and his legal practitioners and therefore privileged.

4. The learned Judge failed to appreciate the fact that in terms of r 449(1) (a) of the High Court Rules the default judgment had been granted in error.

The real issue before this Court therefore is whether the trial Judge misdirected herself in coming to the conclusion that there was no good and sufficient cause for that part of the judgment which ordered the ejectment of the appellant to be rescinded. In examining this issue it will be necessary to consider whether the trial court was correct in coming to the conclusion firstly that the appellant was in wilful default and secondly that he had no bona fide defence on the merits.

I will deal firstly with the question whether the trial Judge misdirected herself in coming to the conclusion that the appellant had been in wilful default. It is the appellant’s claim that he was not in wilful default because both the respondents’ heads of argument and the notice of set down had been served on a legal firm that had never been appointed to act as his legal practitioners’ corresponding legal practitioners in Harare. The appellant’s legal practitioners were based in Masvingo at the relevant time.

It is common cause in this case that the corresponding legal practitioners for Mwonzora & Associates of 50 Hofmeyer Street, Masvingo, who were the appellant’s legal practitioners of record, were Gula Ndebele & Partners of Harare. It is also common cause that both the respondents’ heads of argument and the notice of set down were eventually served on Majome & Associates and not Gula Ndebele & Partners.

In coming to the conclusion that there was no reasonable explanation for the default, the trial court took into account the contents of two affidavits attached to the respondents’ opposing affidavit. The first affidavit was deposed to by one Richie Madyira a legal clerk with Gula Ndebele & Partners. He states in the affidavit that Gula Ndebele & Partners ceased to be corresponding legal practitioners for Mwonzora & Associates on 20 September 2004. He received verbal notification that the new corresponding legal practitioners were Jessie Majome & Associates. Following this development all correspondences for Mwonzora & Associates was re-directed to Majome & Associates. He says he delivered the notice of set down which had been served on Gula Ndebele & Partners to Jessie Majome & Associates.

The second affidavit was deposed to by Tendai Chaitwa a clerk at Muzangaza, Mandaza & Tomana the respondents’ legal practitioners of record. He states in that affidavit that on attempting to serve heads of argument on Gula Ndebele & Partners the receptionist refused to accept delivery and instead directed him to Jessie Majome & Company who she said were the new corresponding legal practitioners for Mwonzora & Associates.

Despite the contents of these two affidavits the appellant made no effort to show that Jessie Majome & Associates were not his lawyers’ corresponding legal practitioners. In my view, once the respondent had established that Gula Ndebele & Partners had directed that all correspondence be now channeled to Majome & Associates, the onus shifted to the appellant to show who at the relevant time his corresponding legal practitioners in Harare were if in fact Majome & Associates were not. The appellant did not do so.

The trial Judge also took into consideration a fax message sent by the appellant to his lawyers dated 24 February 2005. The date of that fax is significant. It was on 24 February 2005 that the default judgment was granted against him. The appellant of his own volition sent a copy of the fax to the respondents’ legal practitioners. In that fax the appellant refers to the original notice of opposition and requests his lawyers to speedily lodge an appeal against the judgment. Rather than explain why he sent this message if he was not aware of the set down of the matter, the appellant has sought to have the fax excluded on the basis that it is privileged. This fax message was sent by the appellant himself to the respondents’ legal practitioners for their information. It cannot, in these circumstances, be said to be a privileged document.

The trial Judge concluded that no reasonable explanation for the default had been given. I see no basis upon which the trial Judge could be said to have misdirected herself. I agree with her comments that the fax transmission cries for an explanation. Clearly there has been no reasonable explanation for the default.

On the question whether or not the appellant had a bona fide defence on the merits, the trial court reached the conclusion that he had not discharged the onus to show that he had such a defence. The trial court noted that the appellant had given many versions. Indeed, it is apparent that the appellant has not been consistent in his narration of the events that took place. When a letter was written to him by the respondents’ legal practitioners advising him of the fact that his cheque had been dishonoured by the bank, the appellant denied that he was in breach and stated that it had been agreed that the balance of the purchase price would be paid upon transfer and that once the title deeds were made available then payment would be effected. In other words he accepted that the balance of the purchase price was still due. He did not in that letter indicate that he had paid R5 000 to the respondent. In his plea, however, he says he had paid to the respondent the sum of South African R5 000 which was equivalent to $6.000.000.00 and that it was for that reason he stopped the second cheque from being paid. In other words he was saying the monies represented by the second cheque had largely been paid. It is also clear that although he says he stopped the cheque, the cheque was in fact dishonoured by the bank. The narration “R/D” on the face of the cheque is a clear indication that the cheque was dishonoured and not simply stopped. The appellant therefore did not tell the truth when he stated that he had stopped the cheque. The appellant also seemed unsure as to how much exactly he paid. In his plea filed on 20 February 2004 he says he paid $6.000.000.00 and thereafter R5 000 which was equivalent to $6.000.000.00. He says the total sum paid was $12.000.000.00 leaving a balance of $1.000.000.00. He says he then paid $500.000.00 to Zimra leaving a balance of $500.000.00. In his application for rescission of judgment he states that in fact he paid $6.250.000.00 by cheque and R5 000 (equivalent to $6.000.000.00) leaving a balance of $750.000.00.

It is also apparent that after the issue of the application for summary judgment by the respondents, the appellant offered to pay the sum of $20.000.000.00. In that fax message, dated 28 February 2005, the appellant offered “an extra Z$20.000.000.00 as settlement to cover for (sic) the last payment which was supposed to be Z$6.000.000.00.”

As the trial court correctly noted, if the applicant had paid the full purchase price except for the nominal amount of $500.00.00 or $250,000.00, he would not have made that offer. He would have advised the respondents that the money had been paid. Instead his legal practitioners wrote to the respondents’ legal practitioners stating that the balance of the purchase price was payable only upon transfer.

The appellant’s defence is also that the sale was an instalment sale of land and in terms of the Contractual Penalties Act [Cap 8:04], the respondents should have given him thirty (30) days’ notice to rectify any breach. The respondents vehemently denied in their papers that this was an instalment sale of land. Their version was that such a discussion never took place. They stated that it was the appellant himself who unilaterally decided to issue two cheques. They had wanted the money in one lump sum but the appellant issued two cheques, one of which was dishonoured by the bank.

In terms of the Contractual Penalties Act, [Cap 8:04] an instalment sale of land is a contract for the sale of land whereby payment is required to be made in three or more instalments. In terms of s 7, every instalment sale of land shall be in writing. Where such contract or a term thereof has not been reduced to writing the onus of proving the existence of that contract or term shall rest on the person alleging its existence. In terms of s 8 of the Act, no seller may terminate the contract unless he has given written notice of the breach to the purchaser to remedy the breach within the period fixed in the agreement or thirty days, whichever is the longer period.

The court a quo reached the conclusion that there was a dispute on the papers and that the appellant had not therefore discharged the onus. If my understanding of the reasoning of the court a quo is correct, the Court appears to have accepted that there was indeed a dispute but that the appellant had failed to discharge the onus of showing that it was an instalment sale of land. This was a misdirection on the part of the court a quo. For purposes of the application for rescission of judgment, all that was required of the appellant was to show that he had a bona fide defence. It was not necessary for the appellant at that stage to discharge the onus of showing that this was indeed an instalment sale of land. There would have been need to discharge that onus at the trial, that is, if the matter had proceeded that far.

Considering all the circumstances, however, I am satisfied that the appellant’s defence in this regard is not bona fide. Firstly the claim is a bald one which has been raised by the appellant at the eleventh hour. The suggestion that there was such an agreement was only made for the first time in the application for rescission of judgment. There was no such suggestion either in his plea to the main action or in his opposing papers to the application for summary judgment. The claim that this was an instalment sale of land was an afterthought. It is clear there was no such agreement and that it was the appellant who failed to pay the purchase price of $13.000.000.00 in one lump sum but instead split the payments. I am satisfied, but for different reasons, that the trial court was correct in concluding that the appellant had no bona fide defence in this regard.

Before concluding I need to comment on the suggestion in the appellant’s notice of appeal as well as heads of argument that r 449(1)(a)(d) of the High Court Rules should have applied and the default judgment rescinded without further inquiry. I do not agree with this suggestion. In the first instance the application filed before the High Court was not in terms of r 449 but in terms of r 63. Indeed in para 3 of his founding affidavit the appellant states that this was an application for rescission of judgment in terms of r 63 of the High Court Rules. At no stage did the appellant indicate that the Court should proceed in terms of r 449 or that the court should mero motu rescind the judgment. I am satisfied in any event that there was no basis upon which the Court could have proceeded under r 449. The judgment had not been granted in error. Well knowing that the matter had been set down, the appellant and his legal practitioners failed to attend the hearing and a default judgment was granted. There was prima facie evidence of a breach of the agreement by the appellant and the court a quo was therefore entitled to grant the default judgment. The suggestion that a party to a contract must be placed in mora before cancellation of the agreement does not correctly represent the law in this country. Except where giving such a notice is a condition precedent to termination, there is no obligation on the innocent party to place the person defaulting in mora. The absence of a demand in such cases merely exposes the innocent party to the risk of losing his costs if the defendant tenders payment within a reasonable time – Wan Winsen, The Civil Practice of the Supreme Court of South Africa, 4 ed p 192.

I am satisfied that there is no merit to this appeal.

The appeal is accordingly dismissed with costs.

MALABA JA: I agree

GWAUNZA JA: I agree

Muzangaza, Mandaza & Tomana, respondent’s legal practitioners