Court name
Supreme Court of Zimbabwe
Case number
SC 2 of 2003
Civil Appeal 186 of 2002

Fichani and Another v Makonye (86/02) (SC 2 of 2003, Civil Appeal 186 of 2002) [2003] ZWSC 2 (16 February 2003);

Law report citations
Media neutral citation
[2003] ZWSC 2



8


SC
2/03















REPORTABLE
(2)


Judgment
No. SC 2/03


Civil
Appeal No. 186/02








(1)
GEORGE PEDZISAI FICHANI


(2)
WENDY BOB MUTUKURA FICHANI





v
JOHANNES CONRAD MAKONYE








SUPREME
COURT OF ZIMBABWE


SANDURA  JA,
CHEDA JA & ZIYAMBI JA


HARARE,
JANUARY 14 & FEBRUARY 17, 2003








T
Masendeke
,
for the appellants





E
W W Morris
,
for the respondent





CHEDA
JA: The parties to this appeal entered into a written agreement on
28 October 1999 in which the appellants purchased
from the
respondent certain immovable property known as Stand 265 Mount
Pleasant Township 9, Harare, measuring 4 125
square metres,
for the sum of $3 200 000.00.






It was
agreed that $1 000 000.00 (one million dollars) was to be
paid upon the signing of the agreement and the balance
of
$2 200 000.00 would be paid as follows –






(1) $1 118 333.00,
which included interest at 35%, was to be paid on or before 1 May
2000;







(2) $1 118 333.00,
which included interest at 35%, was to be paid on or before
1 November 2000; and







(3) $1 118 333.00,
which included interest at 35%, was to be paid on or before 1 May
2001.






The agreement also provided the
following clause:






“7. Breach





7 (1) Should
the purchaser fail to make payment of any instalment on the due date
thereof, or should he commit a breach of any of
the terms and
conditions of this sale, then and in such case the seller shall be
entitled to give to the purchaser notice in writing
requiring him to
make such payment or remedy such breach within thirty days of posting
such notice and if the purchaser fails to
do so, the seller shall
have the right forthwith –






(a) to cancel the sale and to
retake possession of the property hereby sold, without prejudice to
any right of the seller to claim
damages. In the event of
cancellation, the purchaser shall pay to the seller interest at the
rate of 35% per annum compounded at
the 1
st
day of each month on the outstanding balance at the date of such
breach. The said interest shall be calculated as damages and shall
be deducted from any monies held by the seller.







(b) to sue for the recovery of
the whole of the unpaid balance of the purchase price and all
interest due thereon. No waiver, express
or implied, by the seller
of the breach of any term or condition in this Agreement shall
constitute or waiver of any subsequent breach,
of alike or other term
or condition (
sic).”





The
deposit was paid timeously, but the appellant paid the first
instalment late, in the sum of $1 200 000.00 instead
of
$1 118 333.00.





The
instalment due on 1 November 2000 was not received and there was
no communication from the appellants explaining why they
could not
pay. A letter was written to the first appellant on 2 November
2000, giving the appellants notice in terms of the
agreement and
giving them thirty days within which to pay.





On
30 November 2000, following a telephone conversation, the
respondent wrote a reminder but the appellants still failed to
pay
the instalment.






On 2 December 2000 the
respondent wrote a letter cancelling the sale agreement.







The respondent says in his
affidavit that the court application he made was for the purposes of
confirming the cancellation of the
agreement.







The above facts are not denied
by the appellants and are therefore common cause.






The
appellants opposed the court application on the basis that they did
not believe that the applicant (now the respondent) was
serious in
his threat of cancellation as he had previously made such threats but
did not cancel and was merely putting pressure on
them. The other
reason was that after the agreement payment could be deferred pending
their application for a loan from Beverley
Building Society. The
first appellant says the respondent had agreed to this. He says on
applying for a loan, Beverley Building
Society called for audited
accounts for the appellants’ company. This was in October 2000
when the respondent had asked if they
would be in a position to pay
their November instalment. The first appellant says he next spoke
to the respondent in December 2000.
The appellants said the order
sought by the respondent should not be granted as they had agreed
that the November instalment would
be paid after they obtained a loan
from Beverley and, in fact, once they got the bond the whole balance
would be paid. However,
the court
a quo
granted the respondent’s application with costs.






This appeal is against that
decision. Two grounds were given for the appeal, as follows –





“Grounds
of Appeal






1. That the learned judge in the
court
a quo
erred in finding that the requisite notice to cancel an instalment
sale agreement in terms of the Contractual Penalties Act had been
given.






2. That the learned judge erred
in not finding that the agreement of sale had been varied to extend
payment pending the final approval
of a mortgage loan from a building
society.”





The
first ground of appeal, which is explained in detail in the
appellants’ heads of argument, is to the effect that the notice
of
cancellation did not comply with s 8(2) of the Contractual
Penalties Act (“the Act”) [
Chapter 8:04].






Section 8(1) of the Act
requires that a seller should give written notice to a purchaser to
remedy any breach before cancellation.
Section 8(2) of the same Act
reads as follows:





“Notice
for the purposes of subsection (1) shall –






(a) be
given in writing to the purchaser; and







(b) advise the purchaser of the
breach concerned; and







(c) call upon the purchaser to
remedy, rectify or desist from continuing, as the case may be, the
breach concerned within a reasonable
period specified in the notice,
which period shall not be less than –







(i) the period fixed for the
purpose in the instalment sale of land concerned; or







(ii) thirty days;







whichever is the longer period.”





It
was submitted that the letter sent by the respondent did not advise
of the breach concerned. I do not agree. The letter of
2 November
2000 reads as follows:






“It
is noted with concern that you have again failed to timeously meet
the instalment due 1 November 2000 (
sic).





You
are therefore again put on notice that should you fail to meet this
instalment, due process as provided for by the agreement will
take
effect.”





Certainly
the seller’s concern was put in a manner that left the purchasers
in no doubt as to what the letter was all about.
It refers to the
appellants’ failure to pay the instalment timeously. The
respondent went on to state that he was putting the
appellants on
“notice”. The letter is not ambiguous, as the appellants
suggest. The use of the word “again” simply refers
to the
previous failure to pay in time by the appellants.






The
appellants also raised the point that the period of notice was not
thirty days as required in the Act. I agree with that.
The letter
of notice was dated 2 November 2000. The letter of cancellation was
written on 2 December 2000. Counting from
a day after
2 November 2002, that is, excluding 2 November but
including 2 December according to the Interpretation
Act
[
Chapter 1:01],
s 33, that gives twenty-nine days and not thirty days. On this
point the respondent failed to comply with the clear provisions
of
the Act and the agreement of sale.






However, the applicant approached
the court seeking confirmation of the cancellation of the agreement
of sale on 13 February
2001, when there was still no payment.





When
the appellants received both the notice and the letter of
cancellation they never protested about how the respondent was
handling
the matter.





If
there had been any variation of the agreement of sale, they had the
opportunity to raise the matter with the respondent but instead,
and
according to the first appellant’s affidavit, they did not take the
respondent seriously.





Correspondence
from the respondent shows that at all times he was concerned about
getting payment in time. They never replied to
this correspondence.
I do not see how he could have acted as he did if he had varied the
payment terms. If he had done so, even
the contents of his letters
would have been different.





I
must therefore find that there was no variation of the agreement of
sale.





A
point was raised to the effect that the seller should tell the
purchaser in the notice what he intends to do if the purchaser fails
to remedy the breach.






In response to
this, Mr 
Morris,
for the respondent, argued that the seller can always exercise his
option after the purchaser has defaulted. It is not necessary
for
the seller to make his choice at the time of the notice. In any
case, the purchaser will always be aware that it is open to
the
seller to exercise any of the options.







I agree with
Mr 
Morris’
submissions, save to add that where the seller is clear in his mind
which option he intends to exercise he should make this clear
to the
purchaser.





It
is accepted that the period of notice was insufficient. It should
have been a full thirty days. The notice should have complied
fully
with the requirements of the Act.






The failure
to comply with this specific requirement of the Act is fatal.






Once the
parties signed the agreement, each had certain rights against the
other based on the agreement. One of the purchaser’s
rights was
to be given notice of not less than thirty days before cancellation.






Section 11
of the Act provides as follows:





“11. No
waiver of any right or benefit conferred by this Act shall be of any
force or effect.”





On
the basis of this section, the purchaser’s right to be given not
less than thirty days notice cannot be waived. Giving twenty-nine
days instead of thirty is not proper compliance as required by the
Act.





Accordingly,
the appeal succeeds with costs and the following order is made –






1. The purported cancellation of
the agreement of sale is set aside.







2. The order issued by the court
a quo
is set aside and the following is substituted –







“The
application is dismissed with costs.”
















SANDURA  JA:
I agree.














ZIYAMBI
JA: I agree.















Masendeke &
Partners
,
appellants' legal practitioners


Atherstone
& Cook
,
respondent's legal practitioners