DISTRIBUTABLE
(20)
Judgment
No. S.C. 2/02
Civil
Appeal No. 209/00
(1) ERS
INVESTMENTS (PRIVATE) LIMITED t/a ERS REALTY
(2)
WILLIAM HAHLANI (3) KEITH MUNGOSHI
v
PATIENCE MANDIZVIDZA
SUPREME
COURT OF ZIMBABWE
CHIDYAUSIKU
CJ, CHEDA JA & ZIYAMBI JA
HARARE,
JANUARY 17, 2002
J
B Wood,
for the appellants
L
Mazonde,
for the respondent
ZIYAMBI
JA: The respondent, on 25 January 1999, entered into an
agreement with the second appellant (Hahlani), through
the
first appellant, for the purchase of a vacant piece of land known as
stand 796 Uplands, Waterfalls, Harare. It is common
cause that
the property was subdivided and no title deeds were available.
The
material terms of the agreement were as follows:
4. OCCUPATION:
(a) The seller
shall give vacant possession of the property hereby sold to the
purchaser on the 1st
of February 1999 or otherwise by mutual consent provided that the
purchaser shall have complied with the provisions of section 12
of the General Conditions of Sale by that date and provided further
that such vacant possession of the said property shall be subject
to
any leases or encumbrances to which the said property may be subject.
7. TRANSFER:
Transfer
shall be effected by the sellers conveyancers and the purchaser
shall, within a period of fourteen days, pay or furnish
a Bank or
Building Society Guarantee for payment of the purchase price against
transfer. If such payment or guarantee shall not
be furnished to
the sellers conveyancers, the purchase price shall bear interest
at 19% per annum from the expiry of such period
of fourteen (14) days
until transfer shall be effected. Should the purchaser fail within
a period of fourteen (14) days to pay
the costs of transfer and sign
such documents as he may be required to sign to secure transfer, the
purchase price shall bear interest
aforesaid. The rights of the
seller under this agreement shall not in any way be prejudiced by any
extensions of time or any other
indulgence or concession which the
seller may grant to the purchaser in respect (of) performance of the
purchasers obligations
under this agreement.
12. PAYMENT:
The
purchase price shall be the sum of $170 000.00 (one hundred and
seventy thousand dollars).
PAYABLE
AS FOLLOWS:
Terms
of Payment
SPECIAL
CONDITIONS:
This
agreement is subject to and conditional upon:-
1. The purchaser being able to
obtain a bond from Finhold within 28 (twenty-eight) days of signing
hereof.
2. It
is agreed that the land has been subdivided and as soon as the
services are completed (i.e. water, roads and electricity
provisional date 30/06/99), the purchaser can proceed with
developments on this stand while title deeds are being processed.
3. The
seller undertakes to provide services with minimal delay. ERS
Realty undertakes to take all reasonable and necessary measures
to
ensure that both parties have fulfilled their responsibilities.
The
respondent denied that in terms of the special conditions, the
purchase price was to be secured by a loan provided by her employer
(Finhold) within 28 days of her signature of the agreement.
According to the respondent, she understood clause 7, as read
with the rest of the agreement, to mean that payment of the purchase
price or a guarantee for payment thereof was to be made by her
within
fourteen days after transfer was tendered by Hahlanis legal
practitioners. Accordingly, on 11 June 1999, about six
months
after the agreement of sale was concluded, her employers legal
practitioners wrote to Hahlanis legal practitioners about
the need
for simultaneous transfer and registration of the bond. No response
was received.
Meanwhile,
she had spent, so she averred, $200 000 to purchase building
materials, her intention being to erect on the stand
a building,
plans for which were approved by the City of Harare. She had also
moved one of her workers onto the stand and erected
a wooden cabin
thereon. Accordingly, she was surprised to learn from a letter
written to her by her employer that the stand in
question had been
sold to the respondent. She was not notified of any breach on her
part as, she contended, is required by clause 10
of the
agreement and Hahlani had proceeded to sell the property to the
third respondent notwithstanding that the agreement of sale
between
her and Hahlani had not been cancelled. The third respondent had,
since the purchase of the property, dug a well and put
in a latrine
on the stand and had threatened to forcefully evict the respondents
worker from the stand.
On
those facts the High Court, on 25 August 1999, issued a
provisional order in the following terms:
(a) That the purported
agreement of sale in respect of stand 796 of stand 777 Midlands
Township of subdivision E of subdivision
A of Waterfalls entered into
between the second and third respondents on 23 July 1999,
through the agency of the first respondent,
be and is hereby declared
null and void;
(b) That
the agreement of sale in respect of the stand mentioned in
paragraph (a) hereof entered into between the applicant and
the
second respondent, through the agency of the first respondent, on
25 January 1999 is hereby declared to be binding between
the
parties to it.
(c) That
the first, second and third respondents shall execute all documents
and do all other acts necessary to transfer the ownership
of stand
796 of stand 777 Midlands Township of subdivision E of subdivision A
of Waterfalls to the applicant within seven days of
being called upon
to do so by the second respondents conveyancers, failing which the
Deputy Sheriff be and is hereby authorised
to do so on their behalf.
(d) That
the first, second and third respondents shall pay the costs of this
application jointly and severally, the one paying the
others to be
absolved.
(e) The
costs associated with the postponement of this matter on 30 May
2000 shall be paid by the applicant.
The
main ground of opposition advanced in the court a quo,
and which did not find favour with the learned trial judge who
confirmed the provisional order, was that the agreement was
conditional
upon the fulfilment of the special condition and that
condition remained unfulfilled as the respondent had failed to
provide payment
or a guarantee thereof from her employer for the due
payment of the purchase price in terms of the agreement. The
appellants stressed
in the court a quo
that the idea behind the agreement was that the respondent would take
occupation of the property as soon as payment of the purchase
price
had been made but before transfer was effected as there were no title
deeds to the property in question.
The
learned trial judge took the view that the only clauses relevant for
a determination of the matter were clauses 7 and 11 of
the agreement.
He also took the view that clause 7 was to be interpreted to
mean that the purchase price was to be paid against
transfer and
within fourteen days of demand by the sellers conveyancers. The
latter view was supported, he reasoned, by the
fact that the purchase
price would bear interest from the expiry of the fourteen day period
up to the date of transfer.
Before
us Mrs Wood,
for the appellants, persisted in her submission, made in the court
a quo,
that the agreement never came into effect as it was subject to a
condition precedent which suspended its operation pending fulfilment
of the condition. Since there was no compliance with the condition
precedent, it followed that the agreement of sale did not come
into
effect. She submitted further that since it was not disputed that
the first appellant had made it clear that what was required
was
cash up front or an acceptable guarantee of payment, what was
meant by the word bond was in fact a loan and that
the loan had
to be paid within 28 days.
It
is clear from a reading of special condition 1 that the intention of
the parties was that the operation of the entire agreement
would be
suspended pending the grant of a loan by Finhold to the respondent
within 28 days of the date of signature of the agreement.
The loan
not having been granted within the stipulated time, the contract did
not come into effect and accordingly no enforceable
obligations arose
from it. The respondent, in her founding affidavit, deals with the
special conditions referred to above in the
following manner:
To
compound matters further there are three
special conditions to the sale. The first is to the effect that I
had to obtain a bond from my employer within 28 days of signature
of
the agreement. This special condition contradicts the provision in
clause 7 which talks of 14 days unless clause 7 is meant
to mean 14
days from the date upon which transfer is tendered.
The
agreement provides for the giving of notice in writing to the
defaulting party. Such notice was never posted to me
after
the
expiry of 28 days from the date when I signed the agreement. I
submit that I could not possibly have obtained a mortgage
bond from
my employer by the end of February 1999. This is because the
respondents have not tendered transfer to me as the
subdivisions are
yet to be registered. Obviously, any mortgage bond would have to
be registered simultaneously with transfer
of the subdivision in
question to me.
The
clear import of the agreement between the parties is that clause 7
was one of the terms of the contract which would come into
effect
upon the fulfillment of special condition 1 of the agreement. To
attribute any other meaning to the agreement between the
parties
would be to ignore the intention of the parties as expressed by them
in the agreement.
As
to the bond, it was known by the respondent that there were no
title deeds and that consequently a mortgage bond, to be
registered
simultaneously with the transfer could not possibly be obtained
within 28 days. Accordingly, there is substance in
the submission
by Mrs Wood
that it was a loan rather than a mortgage bond which was contemplated
by the parties, such loan to be available within 28 days.
To
borrow from the words of GREENLAND J in Malaba
v Takangovada 1991 (1)
ZLR 1 (HC) at page 6:
it
is clear to me that (Clause 2) under the heading of "SPECIAL
CONDITIONS" constitutes a condition precedent proper.
The
clauses under the heading of "GENERAL CONDITIONS"
constitute terms of the would be contract. These are the
conclusions
that must be reached in the light of the general lay-out
of the agreement and the plain meaning of the words employed. In
particular:
the
words employed generally under and including the heading of
"SPECIAL CONDITIONS" reveal a clear intention to suspend
the operation of the sale contract and render its coming into being
conditional on (the) applicant, as purchaser, securing a loan
in
order to finance the purchase price
.
The
actions of the respondent, as revealed from an extract from the
message book of the first appellant, (Annexure A to the opposing
affidavit) are consistent with this interpretation, namely, that
payment was required within the 28 days stipulated in the special
conditions. The message which she left at the first appellants
offices on 2 March, the last date for payment, was that
the
cheque would be ready the following day. A further message left on
5 March indicated that personnel had not finished
processing but that she would telephone later to advise the first
appellant of the progress. The messages, the existence
of
which was not challenged, are, in my view, inconsistent with her
assertion that payment was to be made against transfer of the
property to her. On the contrary they point to the fact that the
respondent was endeavouring to raise the purchase price within
the
time limit imposed by special condition 1 of the agreement.
Accordingly,
the appeal is allowed with costs. Paragraph 1 of the order of the
High Court is set aside and the following substituted:
The
provisional order is discharged with costs.
CHIDYAUSIKU
CJ: I agree.
CHEDA JA:
I agree.
Byron
Venturas & Partners,
appellants' legal practitioners
Musunga
& Associates,
respondent's legal practitioners