DISTRIBUTABLE (8)

Judgment No. SC. 10/05

Civil Appeal No. 316/03

MARIA NYARIRANGWE v

(1) ANDREW MHENYU (2) THE REGISTRAR OF DEEDS

SUPREME COURT OF ZIMBABWE

SANDURA JA, ZIYAMBI JA & MALABA JA

HARARE, FEBRUARY 24, 2005

J Dondo, for the appellant

P C Paul, for the first respondent

No appearance for the second respondent

SANDURA JA: This is an appeal against a judgment of the High Court in terms of which the appellant (“Maria”) was ordered to transfer to the first respondent (“Andrew”) immovable property known as 34 Learoyd Road, Braeside, Harare (“the property”).

After hearing both counsel, we dismissed the appeal with costs and indicated that the reasons for that decision would be given in due course. I now set them out.

The factual background in the matter is as follows. On 24 May 2002 Maria and Andrew concluded a written sale agreement, in terms of which Maria sold the property to Andrew for $6 325 000.00. The purchase price was to be paid by means of a loan, which was to be obtained by Andrew from Standard Chartered Bank Zimbabwe Limited (“the Bank”).

The agreement indicated that Maria had appointed Messrs Musunga & Associates to attend to the transfer of the property.

Clause 7 of the agreement provided as follows:

“In the event that the purchase price is to be settled by way of mortgage bond or any form of loan, then this sale is conditional upon such mortgage bond or loan being secured by the purchaser within thirty days of this agreement, extension of which period shall be at the sole discretion of the seller.”

After the conclusion of the agreement, the bank wrote to Messrs Wintertons on 19 June 2002 as follows:

“Dear Sir,

Simultaneous Transfer from Maria Nyarirangwe to Andrew Mhenyu and Registration of a First Deed of Hypothecation in favour of Standard Chartered Bank Zimbabwe Limited by Andrew Mhenyu for $6 785 000.00 over 34 Learoyd Road, Braeside, Harare

We shall be pleased if you could attend to the registration of the abovementioned bond on our behalf. For this purpose, we enclose herewith the following documents –

1. Form 30C signed and witnessed at Gwanda 12 June 2002;

2. Copy of Agreement of Sale.

Kindly liase with Messrs Musunga & Associates for the provision of guarantee requirements as they are attending to the transfer of the property.

Andrew Mhenyu chooses domicilium citandi et executandi at the bonded property …”.

On the following day, 20 June 2002, Messrs Wintertons wrote to Messrs Musunga & Associates as follows:

“Dear Sirs,

Re: Transfer – M Nyarirangwe to A Mhenyu (by you) Reg/Bond – A Mhenyu i.f.o. Standard Chartered Bank (by us)

Property – 34 Learoyd Road, Braeside, Harare

We have been instructed to attend to the above bond and understand that you are, or will be, attending to the transfer of the abovementioned property. To enable us to prepare our documents, we shall be pleased if you would kindly arrange to furnish us with the following information –

1. The full names and dates of birth of the purchasers/mortgagors.

2. A description of the property to be bonded.

3. The date of sale and purchase price as reflected in your stamp duty declarations.

4. Your assurance that –

a. at present there are no servitudes, conditions or encumbrances registered against the property detrimental to the interest of a mortgagee, and that you have not received instructions to register simultaneously with the present transaction any new conditions or servitudes, alternatively please send us the Deed of (sic) draft deeds for inspection;

b. that you are not attending to the simultaneous registration of a Second Bond by the purchaser in favour of the seller or any other third party.

5. A note of any other simultaneous transaction of which you might be aware.

6. The bond has been granted for the sum of $6 785 000.00. Please advise us of your guarantee requirements.” (emphasis added)

Five days later, on 25 June 2002, Messrs Musunga & Associates replied as follows:

“We refer to … your letter dated 20^th June, 2002 (and furnish you with the following information) –

1. Andrew Mhenyu (born 11/01/1968);

2. Certain piece of land situate in the District of Salisbury called Stand 5043 Salisbury Township of Salisbury Township Lands;

3. 24^th May 2002, $6 325 000.00;

4. (a) You have;

(b) Nil;

5. Nil;

6. Guarantee in favour of Musunga & Associates for the sum of $6 325 000.00.”

However, on the same day, i.e. 25 June 2002, Maria purported to cancel the sale agreement on the ground that the purchase price had not been paid within thirty days after the conclusion of the sale agreement.

Aggrieved by the purported cancellation of the sale, Andrew filed an urgent chamber application in the High Court seeking a provisional order calling upon Maria to show cause, on the return day, why she should not be ordered to transfer the property to him. The provisional order was later granted and subsequently confirmed. Maria was, therefore, ordered to transfer the property to Andrew.

Dissatisfied with that result, Maria appealed to this Court.

The sole question for determination by this Court was whether there was any legal basis for the purported cancellation of the sale. In our view, there was not.

It was clear beyond doubt that Clause 7 of the sale agreement did not require Andrew to pay the purchase price within thirty days after the signing of the agreement. All it required him to do was to secure or obtain a loan for the full purchase price within that period.

In view of the contents of the letters already set out in this judgment, we were satisfied that Andrew had been granted a loan to cover the full purchase price before the period of thirty days referred to above had expired.

In the first place, as already indicated, on 19 June 2002 the bank wrote to Messrs Wintertons, asking them to attend to the registration in its favour of a mortgage bond over the property. What that meant was that the bank had agreed to advance the loan to Andrew, and that Andrew had agreed to mortgage the property to the bank as security for the repayment of the loan. In other words, by 19 June 2002, at the latest, Andrew had been granted a loan that covered the full purchase price. That was twenty-six days after the conclusion of the sale agreement.

In addition, as already indicated, on 20 June 2002 Messrs Wintertons wrote to Messrs Musunga & Associates, the conveyancers, stating that they had been instructed by the bank to attend to the registration of the bond over the property. They also stated that “The bond has been granted for the sum of $6 785 000.00”. The sum of $6 785 000.00 consisted of the purchase price of $6 325 000.00 and an additional sum of $460 000.00 which the bank had agreed to advanced to Andrew.

Quite clearly, therefore, by 19 June 2002 Andrew had been granted the loan, and the condition set out in Clause 7 of the agreement had been fulfilled.

In the circumstances, there was no basis for the cancellation of the sale, and the learned judge in the court a quo correctly determined the matter.

The appeal was, therefore, devoid of merit and had to be dismissed with costs.

ZIYAMBI JA: I agree.

MALABA JA: I agree.

Chinamasa, Mudimu & Chinogwenya, appellant's legal practitioners

Wintertons, first respondent's legal practitioners