Court name
Supreme Court of Zimbabwe
Case number
SC 65 of 2005
Civil Appeal 37 of 2003

Eastview Gardens Residents Assoication v Zimbabwe Reinsurance Corporation Ltd. and Others (37/03) (SC 65 of 2005, Civil Appeal 37 of 2003) [2005] ZWSC 65 (16 November 2005);

Law report citations
Media neutral citation
[2005] ZWSC 65













REPORTABLE
(ZLR) (55)


Judgment
No. SC. 65/05


Civil
Appeal No. 37/03








EASTVIEW
GARDENS RESIDENTS ASSOCIATION v





(1)
ZIMBABWE REINSURANCE CORPORATION LIMITED


(2)
NATIONAL REAL ESTATE (PRIVATE) LIMITED


(3)
GAINSBOROUGH ESTATE AGENTS (PRIVATE) LIMITED








SUPREME
COURT OF ZIMBABWE


SANDURA
JA, CHEDA JA & GWAUNZA JA


HARARE,
MAY 19 & NOVEMBER 17, 2005








R
M Fitches
, for the appellant





D
S Mehta
, for the first respondent





No
appearance for the second and third respondents





SANDURA
JA: This is an appeal against a judgment of the High Court which
dismissed with costs the appellant’s application for
an order
granting the appellant’s members, totalling three hundred and nine,
the right to purchase the flats which they were renting
from the
first respondent.






The
background facts are as follows. The first respondent owned a
complex of flats in Harare, collectively known as Eastview Gardens,
and the appellant’s members occupied the flats as tenants.





At
the beginning of 2001 the first respondent decided to sell the flats.
Accordingly, it instructed the second and third respondents
to do
so on its behalf.





Thereafter,
on 9 February 2001, the second respondent, acting on the
instructions given by the first respondent, wrote to the
tenants as
follows:






“Dear Sir/Madam,





RE:
PROPOSED SALE OF EASTIVEW GARDENS





Reference
is made to the above matter.





The
owners of Eastview Gardens, the Zimbabwe Reinsurance Company Limited,
have advised that they shall be selling the premises you
are leasing
from them. The sale shall be on sectional title basis and each flat
shall have title deeds on transfer.





As
a sitting tenant, we are hereby giving you notice of the owner’s
intention to sell the flat and advise that we are offering you
to
purchase (sic) if you are interested in doing so. The
purchase price for the flat is $950 000.00. The terms of
payment are as follows
–






  • 25%
    cash deposit and the balance payable by mortgage loan; or








  • 30%
    cash deposit and the balance payable over six equal monthly
    instalments; or








  • cash
    deposit and/or full mortgage bond/loan from employer.







May
you please advise us in writing whether or not you shall be taking up
the offer as soon as possible and in any event by 28 February
2001. In addition, if you are taking up the offer, may you please
call at our offices in person to complete the necessary formalities
by the same date.”






Subsequently,
on 15 February 2001, the second respondent wrote to the tenants
as follows:






“Dear Sir/Madam,





RE:
PROPOSED SALE OF EASTIVEW GARDENS





Reference
is made to our letter of 9 February 2001 in respect of the above
matter.





Please
be advised that the offer made to purchase the unit you occupy has
been withdrawn. This follows the decision by the seller
to sell the
flats block by block. However, should you wish to purchase a unit
into Eastview Gardens now, you may choose from the
block that shall
be selling at any one point in time.





In
any event, you still need to confirm your interest in purchasing a
unit by close of business on 28 February 2001.”






Before
28 February 2001 some of the tenants accepted the offer but
others did not. Those who accepted the offer indicated
how they
proposed to pay the purchase price, and subsequently signed
agreements of sale. These tenants now own their flats and
are not
involved in this appeal.






However,
on 28 February 2001 the appellant wrote to the second
respondent, expressing some concern about the manner in which
the
sale of the flats was being handled, and suggesting that the idea of
selling the flats be shelved until various issues were clarified.

The letter, in relevant part, reads as follows:





“Please
note that we would like to register our objection in the manner in
which you are handling the sale of the flats. It is of
great
concern that you are denying the sitting tenants the first option to
buy the flats, instead you are offering the backdoor sale
through a
third party.






It
has become obvious that your intention as mentioned in your letter
dated 09/02/2001 was not in good faith, hence your immediate
withdrawal of the offer on the 15/02/2001. It is also disturbing to
note that your pricing of the flats is haphazard with no uniformity.

Your pricing is ranging so far from $800 000.00 to
$1 300 000.00.






You
also intend to play the residents against each other by not allowing
them to purchase their own flats, instead you offer them
to buy
another flat, thereby antagonising people who have been living
harmoniously.





Therefore,
it is our belief that you shelve the idea of selling these flats
until the various issues with the tenants have been clarified.”






The
papers placed before the learned judge in the court a quo
did not indicate whether or not there had been any response to this
letter.





Nevertheless,
on 8 March 2001, the third respondent wrote to the tenants as
follows:






“Our letter refers (sic)
to introduce ourselves as the selling agents for the flat you occupy.
As the sitting tenant we would like to offer you the first
refusal
to purchase the flat.





We
are giving you seven days notice to make your offer to buy the same,
failing which the flat will be offered to the public. Your
offer
should be made to the writer within the stipulated period and your
failure to respond will be assumed as a rejection to our
proposal.
Therefore we would like you to allow our prospective buyers to view
your flat at (a) reasonable time.”






It
would appear that this letter was written to those tenants who had
not accepted the offer by 28 February 2001. However,
no
agreements of sale appear to have been concluded as a result of the
new offer.






Subsequently,
when the flats in respect of which no sale agreements had been
concluded were offered for sale to members of the public,
the
appellant, acting on behalf of three hundred and nine of its members,
filed a court application in the High Court seeking an
order granting
those members the right to purchase the flats which they were
occupying. That application was dismissed with costs.
Aggrieved
by that result, the appellant appealed to this Court.





Before
the appeal was heard, the appellant filed a court application in this
Court for leave to adduce further evidence on appeal.
The
application was filed in terms of rule 39(4) of the Rules of the
Supreme Court, 1964, which reads as follows:





“An
application to lead further evidence on appeal shall be accompanied
by that evidence in the form of an affidavit and also by
an
affidavit, or a statement from a legal practitioner, showing why the
evidence was not led at the trial, and also a copy of the
judgment
appealed from, and a statement indicating in what manner it is
alleged the evidence sought to be adduced affects the matters
at
issue.”






The
evidence which the appellant intended to adduce on appeal consisted
of affidavits signed by some of the three hundred and nine
tenants,
alleging that they had informed the second respondent, before
28 February 2001, that they intended to purchase the
flats which
they were occupying, and copies of the letters received by some of
the tenants from the second respondent.






The
statement from the appellant’s legal practitioner, showing why the
evidence was not led before the court a quo, in relevant
part, reads as follows:






“1. The appellants (sic)
issued a court application in the High Court in case number 3277/01.
Messrs Ziweni & Company drafted this court application.
No
evidence of the individual members of the appellant were (sic)
attached or alluded to.





2. The
matter at the hearing was then handled by a Mr Mambosasa of
Kentor (sic) & Immerman. The founding affidavit shows
that the appellant members (sic) tried in vain to get their
legal practitioner at the hearing to furnish the court with proof of
the appellant’s responses to the
first respondent’s two offers.
The appellants (sic) when they complained to the Messrs Kentor
& Immerman (sic) were told that the legal practitioner in
question lacked legal experience to deal with the matter.”







No affidavit or statement from
Messrs Ziweni & Company and Messrs Kantor & Immerman was
filed in order to explain why the
evidence sought to be adduced on
appeal was not placed before the court a quo.





The
leading case in this jurisdiction on whether a court should allow the
admission of fresh evidence on appeal is Farmers’ Co-op Ltd v
Borden
1961 (1) SA 441 (FC). At 442G-443B CLAYDEN FJ, who
was considering an application for leave to adduce fresh evidence on
appeal,
said the following:






“An application of this nature
is never lightly granted. In Brown v Dean, 1910 AC 373 at
p 374, LORD LOREBURN LC, stressed






‘the extreme value of the old
doctrine “interest reipublicae ut sit finis litium”,
remembering as we should that people who have means at their command
are easily able to exhaust the resources of a poor antagonist.’






And
in Colman v Dunbar, 1933 AD 141 at p 161, WESSELS CJ
said:





‘It
is essential that there should be finality to a trial, and therefore
if a suitor elects to stand by the evidence which he adduces
he
should not be allowed to adduce further evidence except in
exceptional circumstances.’






There
are certain guiding principles which the Courts apply in exercising
discretion. The first is that the evidence tendered could
not have
been obtained with reasonable diligence for use at the trial – see
Ladd v Marshall 1954 (3) A.E.R. 745 at p 748; Colman v
Dunbar supra
at p 161. The second is that the evidence
must be such as is ‘presumably to be believed’ or ‘apparently
credible’,
see Ladd v Marshall supra at p 748; Colman
v Dunbar supra
at p 162. The third relates to the effect
which it would have on the case. … The last is that conditions
since the trial
must not have so changed that the fresh evidence will
prejudice the opposite party – see Colman v Dunbar supra
at p 162.”






The
principles set out by CLAYDEN FJ in the Farmers’ Co-op
case supra have been applied in a number of cases. See, for
example, Leopard Rock Hotel Co (Pvt) Ltd & Anor v Walenn
Construction (Pvt) Ltd
1994 (1) ZLR 255 (S) at 260 C-H; S
v Banga
1995 (2) ZLR 297 (S) at 301 G-H; and
Warren-Codrington v Forsyth Trust (Pvt) Ltd 2000 (2) ZLR 377
(S) at 380 G-H.





Applying
the principles set out by CLAYDEN FJ to the facts of this case,
there can be no doubt that the application for leave
to adduce fresh
evidence on appeal cannot succeed. According to the appellant’s
own evidence, the fresh evidence sought to be
adduced on appeal was
in the possession of the appellant’s legal practitioner when the
application was heard in the court a quo. However, for
reasons best known to him, the legal practitioner concerned decided
not to place the evidence before the court which
heard the
application. If the appellant were now permitted to adduce such
evidence on appeal, that would set a dangerous precedent,
and there
might be no end to litigation.





The
appellant’s allegation that the legal practitioner who represented
it in the court a quo was inexperienced does not assist
the appellant. As GREENBERG JA said in R v Carr 1949
(2) SA 693 (AD) at 699:






“… it must be emphasised that
the inadequate presentation of the defence case at the trial will
only in the rarest instances be remediable
by the adduction of
further evidence at the appeal stage. However serious the
consequences may be to the party concerned of a refusal
to permit
such evidence to be led the due administration of justice would be
greatly prejudiced if such permission were lightly granted.”






In
my view, the present case is not one of those “rarest instances”
where the inadequate presentation of a party’s case at
the trial
stage, assuming that to be true, should be remedied by allowing the
party to adduce fresh evidence on appeal. As already
stated, no
affidavit or statement from the legal practitioner concerned,
confirming that the evidence in question was in his possession
when
the application was heard in the court a quo, and
explaining why he did not place it before the court, has been filed.





In
addition, the fresh evidence sought to be adduced on appeal is
contradictory to the averments made by the appellant in its founding
affidavit filed in the court a quo.





In
its founding affidavit, the appellant alleged that its members had
been wrongfully prevented from accepting the offer made in
the letter
dated 9 February 2001 by the withdrawal of the offer by the
second respondent before 28 February 2001. That
was a clear
admission that the appellant’s members had not accepted the offer
before 28 February 2001.





However,
in the founding affidavit filed in this Court by the appellant in
support of its application for leave to adduce fresh
evidence on
appeal, the appellant avers that at least sixty-two of its members
accepted the offer before 28 February 2001.
The obvious
contradiction has not been explained by the appellant.





Since
the evidence sought to be adduced on appeal was in the possession of
the appellant’s legal practitioner when the application
was heard
in the court a quo, the effect which the evidence would
have on the case if admitted on appeal is of no significance in
determining whether or not the
evidence should be adduced at this
stage.





As
TUCKER LJ said in E.H. Lewis & Son, Ltd v Morelli &
Anor
[1948] 2 All ER 1021 (CA) at 1024 A-B:





“For
the purposes of my judgment, I am prepared to assume that the
evidence, if admitted, would be conclusive in favour of counsel
for
the plaintiffs, but, nonetheless, it is evidence which could have
been obtained with the greatest possible ease. True that
it is
evidence dealing with the status of premises, but it is evidence of a
fact which it was necessary to prove to show the status
of the
premises. In view of the admission made in the court below, and in
view of the fact that this evidence could have been obtained
by
ordinary elementary precautions and care, I think that, if we were to
admit it, we should be creating a dangerous precedent and
be acting
far beyond what has been laid down in the authorities. In my view,
therefore, this evidence should not be admitted.”







I shall not, therefore, consider
what effect the evidence would have if admitted.






In
the circumstances, the application for leave to adduce fresh evidence
on appeal cannot succeed. The appeal should, therefore,
be
determined on the basis of the evidence which was placed before the
learned judge in the court a quo.





Although
in its notice of appeal the appellant set out eleven grounds of
appeal, the two main ones are that:






“1. The Honourable judge erred
in finding that no right of pre-emption was extended to the
applicant’s (appellant's) members.






2. In
the alternative, the learned judge a quo erred in not
finding that as the acceptance of the offer embodied in the second
respondent’s letter dated 9 February 2004
(sic) was
conditioned to be made within a time prescribed by the first
respondent, then the prescribed time limit should have been adhered
to and not unilaterally withdrawn or altered before the expiry of the
said time limit.”







The main argument advanced on
behalf of the appellant in this Court and in the court a quo
was that the letter of 9 February 2001 granted the appellant’s
members the right of pre-emption which could not be withdrawn.
I
disagree with that contention.





The
right of pre-emption is a right created by an agreement between the
grantor and the grantee of the right, in terms of which
the grantor
of the right undertakes that before selling the subject-matter of the
right to a third party he will give the grantee
of the right the
opportunity to purchase the subject-matter of the right at the price
offered by the third party which is acceptable
to the grantor. See,
for example, Madan v Macedo Heirs & Anor 1991 (1) ZLR 295
(SC) at 302 A-B; and Owsianick v African Consolidated
Theatres (Pty) Ltd
1967 (3) SA 310 (AD) at 316 C-D.





In
my view, it is clear beyond doubt that the letter of 9 February
2001 did not set out an agreement between the appellant’s
members
and the respondents on the right of pre-emption allegedly granted to
the appellant’s members. The letter did not even
constitute an
offer, to the appellant’s members, of the right of pre-emption.





In
addition, as already stated, the appellant averred in its founding
affidavit that its members had been prevented from accepting
the
offer of 9 February 2001 by the withdrawal of that offer before
28 February 2001. That was a clear admission that
the
appellant’s members did not accept the offer within the specified
period.





Thus,
even if the letter of 9 February 2001 were construed as
containing the offer of the right of pre-emption to the appellant’s
members, no agreement would have been concluded on the matter as the
offer had not been accepted, and no right of pre-emption would,
therefore, have been granted to the appellant’s members.





However,
as the offer of 9 February 2001 was obviously not an offer of the
right of pre-emption, it was a simple offer which specified
the
period within which it could be accepted and which could, therefore,
be withdrawn by the offeror at any time before it was accepted
by the
offeree.





In
addition, the evidence placed before the court a quo did
not indicate that any of the appellant’s three hundred and nine
members had accepted the offer set out in the letter dated
15 February 2001 or the one contained in the letter dated
8 March 2001. Indeed, the appellant did not rely upon these
two letters for the submission that its members had been granted the
right of pre-emption.





Furthermore,
it is pertinent to note that nowhere in the letter dated 9 February
2001 or in the one dated 15 February
2001 was it stated that the
second respondent undertook to keep the offer open until 28 February
2001, or declared that the
offer was irrevocable during the specified
period. That being the case, the second respondent was not estopped
from revoking the
offer before 28 February 2001.





As
none of the appellant’s three hundred and nine members accepted the
offer of 9 February 2001, or the one in the letter
dated
15 February 2001, within the specified period, cadit
quaestio
. That is the end of the matter, and the appeal cannot
succeed.





In
the circumstances, the appeal is dismissed with costs.

















CHEDA
JA: I agree.

















GWAUNZA
JA: I agree.



















Hussein Ranchhod & Co,
appellant's legal practitioners


Costa
& Madzonga
, first respondent's legal practitioners