THE DIRECTOR OF HOUSING, CITY OF HARARE
HIGH COURT OF ZIMBABWE
HARARE, 23 June 2016 and 26 April 2017
L Uriri, for the applicant
E Z Mapendere, for the 1st & 2nd respondents
MAKONI J: the applicant approached the court seeking an order for specific performance and costs of suits on a higher scale.
The background to the matter is that sometime in January 2016, the parties entered into an agreement of sale whereby the first and second respondents sold and the applicant purchased stand No 19250, Heyman Road, Gunhill Harare measuring 3 492 square metres (the property). The purchase price was US$70 000-00 payable as follows:
- A cash deposit of $1 500-00 to be paid on or before 15 January 2016 into the trust account of the heaven on Earth Real Estate (realtors).
- The balance of $68 500-00 was to be paid on or before 1 February 2016 into the same account.
The applicant avers that it paid the cash deposit by the stipulated date. The respondents aver that the applicant did not pay the deposit by the stipulated date and by letter dated 19 January 2016 cancelled the agreement through their legal practitioners. The cancellation was confirmed by another letter dated 29 January 2016, addressed to the applicant by the respondents’ legal practitioners. On 19 February 2016, another letter was addressed to the applicant advising him that the stand had been sold to a third party. On 29 February 2016 the applicant filed the present application seeking specific performance of the contract.
The applicant avers that he has fully complied with the obligations placed on him by the agreement of sale. He is therefore entitled to specific performance.
The application is opposed on the basis that the applicant breached the contract and it was properly cancelled.
It was contended on behalf of the applicant by Mr Uriri that there is a valid and subsisting contract. The respondents suggests lack of ad idem in their letter of 29 January 2016 where they raise the issue of arrears that were payable to the City of Harare that it was not clear in terms of the agreement, who was responsible for the payment of the arrears. Mr Uriri submitted that the issue is dealt with in Clause 7 of the agreement. The parties agreed as to who was responsible for the payment of rates.
Mr Uriri further contended that there was no breach regarding the payment of the deposit. The deposit was paid o or before 15 January 2016. The nominated agent confirmed the payment and that proof was given to the respondents.
He further contended that if there was a breach there was no valid cancellation of the agreement. Clause 12 b of the agreement which deals with breach was not followed. He further contended that the issue of impossibility of performance was being raised mala fides in that the third party to whom the property was sold to is not named. The agreement of sale and confirmation that cession took place were not attached. The principles regarding double sale must be applied in favour of the first purchaser, the applicant.
Mr Mapendere submitted that for a party to claim specific performance, he must have performed his part of the obligations. There is no proof that the applicant paid the deposit of $1 500-00. None was attached to the papers.
He further contended that the agreement was validly cancelled in terms of Clause 19 which is paramount to Clause 12.
Regarding the issue of impossibility to perform the contract, Mr Mapendere submitted that the applicant was advised of the existence of a third party by letter dated 19 February 2016. No attempt was made to ascertain the identity to third party before the applicant filed its application.
The issue is whether the applicant complied with his obligations in terms of the agreement and therefore entitled to the granting of an order for specific performance.
In Van der Merwe, Van Huyssteen, Reinecke and Lubbe’s Contract: General Principles 4th ed p 334 the following was stated:
“A contract that creates reciprocal obligations, the one in exchange for the other, is called a reciprocal contract and such a contract is governed by the principle of reciprocity.
The principle of reciprocity entails that performance or a tender of performance by a plaintiff is a requirement for the enforceability of his claim for counter performance Conversely, a party to a reciprocal contract may withhold his own performance until the other contractant performs.”
At p 335 the learned authors go on to say that contracts such as sale, lease, mandate, locatio conductio operis and insurance are treated as reciprocal contracts.
In casu, the contract between the partners is a sale and therefore it is a reciprocal contract and is governed by the principles of reciprocity.
In Savanhu v Marere No & Ors 2009 (1) ZLR 320 (s) at 325 B – C Malaba DCJ (as he then was) had this to say about a claim for specific performance:
“The right to claim specific performance of a contract by the other party is premised on the principle that the appellant must first show that he has performed all his obligations under the contract or that he is ready, able and willing to perform his own side of the bargain. Wessles The Law of Contract in South Africa vol 11 para 3135 states that:
‘The court will not decree specific performance where the plaintiff has himself broken the contract or made a material default in the performance on his part (Lawson, s 472, p. 522).
A plaintiff is not entitled to succeed against a defendant in an action for breach of contract unless he can show that he has performed his part or is ready to do so, and therefore he cannot ask for specific performance unless he has either performed his part of the contract or unless he has prevented from doing so by the defendant.”
The first question would be whether the applicant complied with his reciprocal obligations in terms of the agreement. In terms of clause 3 of the agreement, the applicant was obligated to make a cash deposit of $1 500-00 to the trust account of the realtors on or before 15 January 2010. The applicant averred that he made the deposit at the stipulated time. This issue was challenged by the respondents in their Notice of Opposition in the following terms:
“8.1. There is no documentary evidence attached that shows that a deposit of US$1 500 had been made by 15 January 2016. This explains why Messrs. Mukanhairi – Makodza Attorney cancelled the agreement. In the absence of such proof, I can assume that Applicant was in breach and thus the provisions of Paragraph 19 of the contract should take effect.
8.2. I went to the offices of Heaven on Earth on divers occasions and made several phone calls to demand for this proof and was never given any proof, which left me satisfied that either Applicant had not paid the money or did not have the money. This explains why I instructed Messrs Mukanhairi – Makodza to write the aforesaid letter of cancellation of the agreement.”
The applicant had an opportunity to respond to these averments in his Answering Affidavit. This is what he had to say.
“The sellers have no legal basis to assume that no payment was made when I attach proof that it was. I understand that the said proof was shown to the sellers.”
He did not attach proof of payment to the answering affidavit. In the submissions made on his behalf, the applicant persisted with the argument that he paid the purchase price on the stipulated date to the realtor. He made reference to the letter written by the realtor to the respondent’s legal practitioners where it was stated:
“1. The Purchaser made the payment of US$1 500-00 [One Thousand Five Hundred united States Dollars] into our Trust account on the 15th of January 2016 in terms of Clause 3 of the agreement of sale. We gave proof of payment to the Seller but in case you did not get a copy, we hereby attach it herein.
2. The Buyer therefore complied with his obligations and we now wait for him to pay the balance of the purchase price in order for cession to be done.”
It was contended that proof of payment in the form of a further copy, over and above that given to seller, was attached to that letter.
One would have expected the applicant to attach a copy to the Answering Affidavit to confirm payment since the respondents were denying ever having had sight of the proof of payment. This would be in the form of a copy of a deposit slip or a bank statement from the Estate Agency. None were attached up to the date of hearing. It leaves me with no choice but to conclude that the applicant failed to show that he had fulfilled his reciprocal obligations in terms of the agreement and the respondents were within their rights to cancel the agreement.
The next issue for determination is whether that agreement was validly cancelled.
The Applicant contended that in terms of clause 12 (b), the respondents were obliged to give seven (7) days’ notice to the applicant to remedy his breach. This was not done.
The respondent’s contended that the contract was cancelled in terms of clause 19 of the agreement and not in terms of clause 12 (b).
Clause 19 provides:
“19. Special Conditions
The provision of this special condition overrides any condition in this agreement of sale with which it may be inconsistent. Should the purchaser fail to make payment within the time stipulated in clause three above, this agreement shall be cancelled without notice and shall become null and void.”
The language used in that clause is very clear and should be given its ordinary grammatical meaning. It is a special clause which kicks in when the purchaser fails to comply with his obligations in terms of clause 3 of the agreement which relates to payment terms. I have already made a finding that the applicant failed to establish that he paid the deposit of $1 500-00. Clause 19 would then be available to the respondents to cancel the agreement which is what they did. The agreement was therefore validly cancelled.
In view of the findings that I have made above, it will not be necessary for me to determine the issue of impossibility of performance. In the result, the applicant cannot succeed in his claim.
The respondents claimed costs on a punitive scale on the basis that the applicant was suing the respondents for an order that was impossible to perform. The matter was not determined on that point and it is my view that the circumstances of this matter do not warrant costs on a punitive scale.
I will therefore make the following order:
1. The applicant is dismissed.
2. The applicant to pay the 1st and 2nd respondent’s costs.
Mandizha & Company, applicant’s legal practitioners
Mapendere & Partners, 1st & 2nd respondents’ legal practitioners