DISTRIBUTABLE (5)

Judgment No S.C.4\04

Civil Appeal No 313\02

JOHN DESMOND STAMBOLIE v (1) BINGA RURAL COUNCIL (2) THE REGISTRAR OF DEEDS, BULAWAYO

SUPREME COURT OF ZIMBABWE

CHIDYAUSIKU CJ, CHEDA JA & GWAUNZA JA

HARARE JANUARY 19 & FEBRUARY 16, 2004

I.E.G. Musimbe, for the appellant

H. Zhou, for the respondent

CHIDYAUSIKU CJ: The appellant in this case sought the following order from the High Court by way of a court application:-

“1. That the First Respondent be and is hereby compelled to transfer to the Applicant, stand 297 Binga Township within 7 days from the date of service of this order upon it.

2. That on failure by the First Respondent to transfer to the Applicant, stand 297 Binga Township as set out in paragraph 1 of this order, the Deputy Sheriff or his lawful assistants are ordered to sign all the necessary documents for the property to be transferred from the First Respondent to the Applicant.

3. That the Second Respondent is ordered to register the transfer of Stand 297 Binga Township from the First Respondent to the Applicant, on payment of any competent charges to be levied by the Second Respondent.

4. The costs of this application shall be borne by the First Respondent on a legal practitioner and client scale.”

The application was opposed. The facts of this case are common cause and straight forward. The appellant wished to purchase a piece of land from the respondent. It would appear some negotiations took place culminating in the appellant’s legal practitioners writing the following letter, Annexure ‘A’, to the respondents. The letter reads as follows:-

“We are instructed that our respective clients have been conducting negotiations between themselves privately and have reached a settlement in this matter. The terms of the settlement are as follows.

1. Our client will purchase the Stand in question from your client together with improvements thereon at a purchase price of $300,000,00.

2. Our client will pay the rental up to and including January 1998 in the sum of $74,250.00. This comprises total rent of $85,250.00 less $11,000.00 paid on account. For the avoidance of doubt, this excludes the rental which our client has been paying since February 1998 and which our client will continue to pay until transfer of the Stand.

3. The Stand is to be transferred into the name of a company controlled by our client namely Greengrove Properties (Private) Limited.

4. Our client will pay your client’s legal costs up to but excluding the application for summary judgment.

5. The rental arrears as set out in 2 above will be paid in four equal monthly instalments with effect from the end of the month in which transfer of the property takes place. The purchase price of the property will be payable in cash against transfer and our client will obviously bear the transfer costs.

6. For the avoidance of doubt there will be no interest on the arrear rental.

We would be glad if you would take instructions from your client to confirm that the matter is settled on the above basis. Assuming that it is, we believe that it would be in the interests of both parties for a formal agreement to be drafted and we propose to do this once we have your confirmation, unless of course you would prefer to draft the agreement.”

The respondent replied to the above letter as follows:-

“Re: BINGA RURAL DISTRICT COUNCIL vs JOHN DESMOND STAMBOLIE AND JACK PENCIL MOLEYA: CASE NO HC845/97

Your minute dated 22 April 1999 on the above matter refers.

Please kindly note that the Binga Rural District Council accepted the above case to be settled along the proposals set out in your letter dated 29^th September 1998 addressed to Calderwood, Bryce Hendrie and Partners.

Please take note that the case is now being dealt with by Webb, Low and Barry.”

On the basis of these two letters the appellant contends that an agreement of sale was concluded.

Paragraphs 5 and 6 of the founding affidavit set out the cause of action in the following terms:-

“5. The said terms and conditions of the sale agreement, were set out in a letter by my previous legal practitioners, Messrs Morris Davies and Company, addressed to the First Respondent’s former legal practitioners, Messrs Calderwood, Bryce Hendrie and Partners, dated 29 September 1998, annexed hereto as ‘A’.

6. The First Respondent accepted the said terms and conditions set out in the letter dated 29 September 1998, by way of its letter dated 12 May 1999, of which a copy is annexed hereto as ‘B’, thereby consisting a legally binding agreement.”

The respondents’ response to the above allegation is to be found in paragraph 9 of the opposing affidavit which reads as follows:-

“9. The averments thereon are not disputed, save to say that the agreement was never concluded as it was still subject to being formalised, where the detailed terms such as when exactly payment was to be made, when exactly transfer was to be effected and who was to effect the transfer, and the compliance with the requirements of the Rural District Council Act were to be included. Accordingly, it is 1^st Respondent’s contention, that an agreement was never concluded.”

At the hearing of this matter in the court a quo the respondent argued that the so called agreement of sale was incomplete and, consequently, not binding. The respondent also argued that the agreement was null and void for lack of compliance with the provisions of section 79(3) of the Rural District Councils Act [Chapter 29:13], (“the Act”).

The appellant argued that agreement between the parties was complete and a compromise of a previous agreement therefore compliance with section 79(3) of the Act was not necessary. The appellant also argued that the respondent could not raise the issue of non-compliance with the Act because there was no factual basis laid on the papers and could not be raised in the heads of argument for the first time.

The same arguments raised in the court a quo were relied on by both parties in this Court.

The learned judge in the court a quo took the view that the matter should be determined on the basis of whether or not there was compliance with the provisions of the Act. In this regard the learned judge concluded as follows:-

“It is further submitted that whether the cause of action is based on a compromise or on the original agreement, the point remains that, it is an agreement of sale of council property, therefore section 79(3) of the Act applies.

The provisions of section 79(3) provide that, before a council enters into a contract of sale of property of council, the council shall call for tenders by notice posted at the office of the council and advertised in two issues of a newspaper.

It is clear from the facts of this matter that the procedure outlined in section 79(3) of the Act, was not followed. What is then the effect of that, on the purported agreement.

As a general rule, a contract of agreement which is expressly prohibited by statute is illegal and null and void, even where there is no declaration of nullity, even where no declaration of nullity has been added by the statute.

I refer to the case of SA Investments v Vandashief and Others 1999 (3) SA 340 at page 350. But whether a statutory prohibition falls within this general rule, depends on the construction of the enactment concerned.

Section 79(3) uses the word shall, which is peremptory, which points to an intention on the part of the legislature that the illegality would be visited with a nullity.

It is quite clear that the procedures laid down in section 79(3) were not followed. As submitted by the respondent, to uphold such a contract would be to defeat the whole purpose of legislation, which to quote from McNALLY JA, is designed to protect rate payers, in the case of Gweru, and indeed taxpayers in general insofar as the council may be subsidised by Central Government, from what may broadly be described as insider dealing. That was in the case of City of Gweru v Kombayi 1991 (1) ZLR at page 333.

Considering the above authorities, I am satisfied that the agreement sought to be relied on by the applicant is null and void. In my view, it will not be necessary for me to address the other aspects raised and, accordingly, the application is dismissed with costs.”

The reasoning and the conclusion of the learned judge in the court a quo cannot be faulted. The appellant’s contention that the issue of compliance with the Act was not raised in the affidavit is not correct. That issue is raised, perhaps not in the best manner possible, in paragraph 9 of the respondent’s affidavit. In any event, as the judge correctly points out, it is a point of law that can be raised at any stage. Either the Act was complied with or was not complied with. The respondent says there was no such compliance. If it is the appellant’s case that there was compliance then it is up to the appellant to establish such compliance. Nothing was placed before the court to support the appellant’s contention.

In the result I am satisfied that the court a quo was correct in both its reasoning and conclusion.

Accordingly, the appeal is dismissed with costs.

CHEDA JA: I agree

GWAUNZA JA: I agree

I.E.G. Musimbe and Partners, appellant's legal practitioners

Webb, Low & Barry, first respondent's legal practitioners