REPORTABLE (ZLR) 3

Judgment No. SC 7/09

Civil Appeal No. 275/07

ASHANTI GOLDFIELDS ZIMBABWE LTD v CLEMENTS KOVI

SUPREME COURT OF ZIMBABWE

SANDURA JA, CHEDA JA & ZIYAMBI JA

HARARE, JUNE 24, 2008 & FEBRUARY 23, 2009

T Magwaliba, for the appellant

S Mucheche, for the respondent

CHEDA JA: This is an appeal against the judgment of the High Court in which the appellant was ordered to sign all necessary documents in order to transfer Stand No. 591, Waterberry Crescent, Bindura to the respondent.

In an application filed before the High Court the respondent claimed that he had purchased the above property, but the appellant disputed the claim.

The respondent’s claim was based on the following background -

He was employed by the appellant on 20 June 1990 as a Plant Foreman until the date of his resignation on 27 March 2007. He claimed that on 1 November 2003 he entered into an agreement of sale in which the appellant agreed to dispose of its housing units situated in Chiwaridzo, Grey Line Flats and Low Density to its employees who were sitting tenants effective 1 December 2003.

At the time of signing the Memorandum of Agreement of Sale he was sitting tenant of House No. 591 Waterberry Crescent, Bindura and is still occupying that house. The house was valued at $6.839.145.00 which price he claims to have paid in full. He said the appellant has refused or neglected to expedite progress and sign all relevant documents to ensure transfer passes to him despite demand.

The respondent filed the Memorandum of Agreement. It reads as follows:

“MEMORANDUM OF AGREEMENT

BETWEEN

ASHANTI GOLDFIELDS MANAGEMENT

AND

Employees

Ashanti Goldfiels Zimbabwe hereby agrees to dispose of its housing units situated in Chiwaridzo, Grey Line Flats and Low Density to its employees who are sitting tenants effective 1 December 2003. Find the agreed prices attached.”

The document was then signed by the General Manager of the appellant and the Financial Director.

John Masarira, Emmanuel Gambara and Kingstone Mufoti, who are Workers’ Committee members, signed on behalf of the employees. Thereafter the names of the employees were listed with the house numbers, the new valuations and the monthly repayments.

The respondent also filed receipts showing that he made certain payments totaling $7.000.000.00. When the respondent resigned from the appellant’s employment he was asked to vacate the house in question.

In opposing the application, the appellant denies that the respondent entered into or signed an agreement of sale. The appellant says the document concerned was a Memorandum of Understanding expressing an intention by the appellant to dispose of the housing units to its employees. The appellant also points out that the respondent subsequently signed a lease agreement.

It is clear that the lease agreement was signed about nine days after the signing of the Memorandum of Understanding.

The first question to be asked is: Why would the respondent sign a lease agreement for property that he has just purchased? The second question is: If he signed a lease agreement with an option to purchase did he exercise the option and when?

It is difficult to understand how the Memorandum of Understanding can be said to be an Agreement of Sale. What is clear is that the appellant was offering the houses to the sitting tenants who were its employees. There is nothing to show that the respondent took up the offer. The respondent seeks to argue that the Memorandum was an agreement. There is nothing to show that every one of the employees on the list purchased the houses. At best, the document can only be read as showing who occupied which house and the price they could pay if they accepted the offer to purchase.

The respondent argues that the agreement binds both the appellant and the respondent. It would certainly do so if he had accepted the offer and the appellant refused to sell to him.

The court a quo held that:

“The applicant (that is the employee) also evidenced a genuine intention to buy the house once he became a sitting tenant through the signatures of his agents, the members of the workers’ committee.”

In my view the court erred in adopting this approach. There is nothing to show that the respondent appointed members of the workers’ committee to represent him in the purchase of the property.

The members of the workers committee represented the employees only in-as-far as establishing the right for each employee tenant to purchase the house if they wished.

The lease agreement states very clearly that the respondent would have an option to purchase the property after 60 months. It is therefore incorrect to say he had purchased the house on 1 December 2003 when the lease agreement runs from 10 December of the same year. The lease agreement also shows that the monthly payments for the house were in the sum of $113.985.75. The respondent made lump sum payments which suggest that he was paying rental arrears as there are no monthly rental payments shown.

In his own heads of argument before the court a quo he correctly states the legal position to the effect that:

“A sale in Roman-Dutch law has been defined as a contract in which one person promises to deliver a thing to another, who on his part promises to pay a certain price.”

In this case there was no such arrangement. The respondent never promised to pay the price for the house in which he was a tenant.

The respondent relied on the case of Chikoma v Mukweza 1998(1) ZLR 541(S). That case has no relevance to the facts of this case. It is also clear that the appellant did not accept the sale price from the respondent, but accepted the rental. The respondent could not be paying the rental for property he had purchased.

Proffessor R.H. Christie makes it clear in his Rhodesia Commercial Law Book p 43, that:

“There must obviously be at least two parties to every contract and the necessary agreement between them will always manifest itself in the form of an offer from the one side and an acceptance of that offer by the other side.”

In this case, the document signed by the appellant was clearly an offer to dispose of its houses to its workers who were sitting tenants. There is no acceptance of that offer from the respondent.

Clause 1.1. of the lease agreement signed on 10 December 2003 states that the lessor lets the property for a period of 60 months commencing on January 2004.

Clause 3.1. says the lessee shall have the option to purchase the property after 60 months.

In the circumstances, the respondent could not have purchased the property when he asked for its transfer to himself by 25 July 2006, which was only about 3 years after the signing of the lease agreement.

I am satisfied that the court a quo erred in concluding that the appellant had sold the house to the respondent.

The appeal must therefore succeed.

I therefore make the following order –

1. The appeal is allowed with costs.

2. The judgment of the court a quo is set aside and substituted as follows:-“The application is dismissed with costs”.

SANDURA JA: I agree

ZIYAMBI JA: I agree

Magwaliba & Kwirira, appellant’s legal practitioners

Donsa-Nkomo Legal Practice, respondent’s legal practitioners