REPORTABLE ZLR (14)

Judgment No. 23/08

Civil Application No. 231/07

FELISTANO KHUMALO v (1) LIZZIE MANDEYA (2) BULAWAYO CITY COUNCIL

SUPREME COURT OF ZIMBABWE

HARARE, JANUARY 16 & SEPTEMBER 30, 2008

N G Maphosa, for the applicant

H Zhou, for the first respondent

No appearance for the second respondent

Before MALABA JA: In Chambers in terms of r 31(1) of the Rules of the Supreme Court (“the Rules”).

This is an application for condonation of non-compliance with r 30(1) of the Rules and extension of time within which to note an appeal. Rule 30(1) provides that a party wishing to appeal against a judgment of the High Court must institute the appeal within fifteen days of the date of the judgment appealed against. The judgment against which the appeal was noted out of time was delivered on 13 September 2007.

The facts to be considered in the determination of the application are these. The applicant entered into a lease–to–buy agreement with Bulawayo City Council (“the City Council”) in respect of Stand No. 71072 Lobengula West. I shall hereinafter refer to the agreement as “the lease–to–buy”. The written lease-to-buy contains the usual terms and conditions found in similar agreements involving high density residential premises owned by municipalities. It contained a clause in terms of which the applicant was prohibited, prior to transfer of the property to himself, from ceding or assigning the agreement or any rights acquired by him thereunder, or parting with the possession of the property or any part thereof or alienating, donating or otherwise disposing of the same without the prior consent in writing of the City Council (the pactum non cedendo).

The applicant subsequently entered into a written agreement with the first respondent in respect of the property prior to transfer of ownership of the property to him by the City Council. The transaction entered into was described by the parties as an “agreement of sale”. The subject matter of the sale was referred to as “a piece of land, situate in the District of Bulawayo being 71072 Lobengula West comprising 4 bedrooms …”.

The property was “sold” for $75 million payable as follows:

1. a deposit of $10 million upon signing of the agreement;

2. $40 million on or before 3 May 2004; and

3. the balance of $25 million within a period of six (6) months from the date of signing the agreement.

The applicant had sought and obtained the written consent of the City Council. With the written consent of the City Council the applicant ceded all his rights and interests in the property under the lease-to-buy to the first respondent. It appears from the judgment of the court a quo that the first respondent failed to pay the whole amount of $10 million required as a deposit upon signing the agreement. She also failed to pay the whole amount of $40 million on or before 3 May 2004 nor did she pay the purchase price in full within the period of six months from the date of signature to the agreement. Whilst it was accepted that she paid some money towards the purchase price we are not told how much she paid and when.

Under clause 10.1. of the agreement of “sale” the parties provided that should the purchase commit any breach of the contract, the seller had to give her written notice advising of the breach and calling upon her to remedy or rectify such breach within a period of 14 days from the date of receipt of the notice and that should she fail to remedy the breach, the seller had the right to cancel the agreement. It is common cause that the applicant gave the first respondent, who admittedly was in breach of the contract, the requisite notice. When she failed to remedy the breach within the time limit prescribed in the notice, he cancelled the agreement.

The first respondent made an application to the High Court in case HC 664/05 seeking an order declaring the cancellation of the agreement of “sale” by the applicant null and void on the ground that the written notice given to her and calling upon her to remedy the breach fell foul of the mandatory provisions of s 8(2)(c)(1) of the Contractual Penalties Act [Cap 8:04] (“the Act”). Section 8(1) of the Act prohibits a seller under an instalment sale of land from terminating the contract on account of any breach of by the purchaser unless he has given notice in terms of subs (2) and the period of the notice has expired without the breach being remedied, rectified or discontinued.

Section 8(2) provides that –

“(2) Notice for the purposes of subsection (1) shall –

1. be given in writing to the purchaser, and

2. advise the purchaser of the breach concerned; and

3. call upon the purchaser to remedy, rectify or desist from continuing as the case may be, the breach concerned within a reasonable period specified in the notice, which period shall not be less than –

1. the period fixed for the purpose in the instalment sale of the land concerned; or

2. thirty days;

whichever is the longer period.”

An “instalment sale of land” is defined in s 2 of the Act as:

“… a contract for the sale of land whereby payment is required to be made –

1. in three or more instalments; or

2. by way of a deposit and two or more instalments; and ownership of the land is not transferred until payment is completed.”

It is common cause that the period given to the first respondent within which she was called upon to remedy the breach was less than thirty days. The question for determination by the court a quo was whether the applicant was bound to give the first respondent a period of thirty days within which to remedy the breach of the contract. He would be bound by the provisions of s 8(2)(c)(ii) of the Act if the agreement between the parties was an “instalment sale of land” as defined under s 2 of the Act. The learned Judge held that the agreement was an “instalment sale of land” as the subject matter of the sale was “land”, the purchase price for which was payable by way of a deposit and two or more instalments. He declared the cancellation of the agreement by the applicant null and void ab initio.

The appeal against the judgment was not noted until 16 October 2007. The notice of appeal was filed eight days out of time. The explanation given for failure to comply with r 30(1) was that the applicant’s legal practitioner was waiting for a copy of the written judgment to be released by the Registrar. The explanation is unacceptable because the applicant’s legal practitioner was in court to note the reasons for judgment on the day it was delivered. The judgment was in fact in writing although it contained some corrections in longhand.

The applicant did not make the application for condonation of non-compliance with r 30(1) until on 25 October 2007. The explanation for the failure to make the application on 16 October was that the legal practitioner laboured under a misapprehension that the dies induciae for instituting an appeal against a judgment of the High Court was 21 days from the date of the judgment appealed against. Not only does the explanation show that the legal practitioner did not bother to read the relevant rule by which the applicant was bound to act in seeking relief from the Court, it also confirms the irrelevance of the explanation given by the same legal practitioner for purporting to file a notice of appeal on 16 October.

In Maheya v Independent African Church S-58-07 it is stated at p 5 of the cyclostyled judgment that:

“In considering an application for condonation of non-compliance with its Rules, the Court has a discretion which it has to exercise judicially in the sense that it has to consider all the facts and apply established principles bearing in mind that it has to do justice. Some of the relevant factors that may be considered and weighed one against the other are: the degree of non-compliance; the explanation therefor; the prospects of success on appeal; the importance of the case; the respondent’s interests in the finality of the judgment; the convenience to the court and avoidance of unnecessary delays in the administration of justice. Bishi v Secretary for Education 1989(2) ZLR 240(H) at 242D-343C.”

Had it not been for the fact that I consider the prospects of success on appeal to be good I would have dismissed the application. It is clear that the learned Judge came to the conclusion that the contract between the parties was an “instalment sale of land” on the basis that in para 1 of the agreement the parties described the subject-matter of the “sale” as the “piece of land” being Stand 71072 Lobengula West including the improvements thereon. The question whether the subject-matter of the agreement of sale was “land” was in my view a question of fact, the determination of which required the court a quo to consider all the circumstances of the case. Whilst the concept used by the parties to describe the merx was an important factor to consider in the determination of the question it was not an overriding one.

At the time the parties entered into the agreement, the applicant was not the owner of the land and improvements thereon. He could not pass title to the land to the first respondent at the payment of the purchase price in terms of the agreement of sale. Mr Zhou argued that under our law a person can sell property which he does not own as long as the property exists and he realizes that he may face an action for damages if he is unable to give good title to the purchaser when the time comes to hand over vacant possession and in the case of immovable property give transfer: Frye’s (Pvt) Ltd v Ries 1957(3) SA 575(A) at p 582A.

It appears to me that the principle of law on which Mr Zhou relied to support the contention that what was sold by the applicant to the first respondent was “land” is not applicable to the facts of the case. It is common cause that at the time the parties entered into the agreement of sale, the applicant held rights and interests in the land and improvements thereon under the lease-to-buy. It is also common cause that with the written consent of the City Council he ceded those rights and interests to the first respondent who stepped into his shoes as the cessionary and acquired them under the lease-to-buy.

A cession is an act of transfer of personal rights and interests from the cedent to the cessionary. It appears to me that the applicant ceded to the first respondent what he sold under the agreement of sale. In the circumstances the argument by Miss Maphosa that notwithstanding the language used by the parties in para 1 of the agreement of sale what was in effect sold and purchased were rights and interests in the land recognizes the legal significance of the cession effected in the interests of the parties with the written consent of the City Council. To uphold the decision of the court a quo that the real rights in the land and improvements thereon in the sense of dominium was sold and purchased under the agreement of sale would accord no legal effect at all to the cession and the limited rights it transferred from the applicant to the first respondent.

The application for condonation of non-compliance with r 30(1) of the Rules and an extension of the time within which to note the appeal is granted. The appeal shall be deemed to have been instituted in accordance with the notice of appeal filed in the application on the date of this order. The first respondent is to pay the costs of the application.

Calderwood, Bryce Hendrie & Partners, applicant’s legal practitioners

Marondedze, Mukuku, Ndove & Partners, first respondent’s legal practitioners