Court name
Supreme Court of Zimbabwe
Case number
SC 68 of 2007
Civil Appeal 88 of 2004

M.B. Ziko (Pvt) Ltd. and Another v Cestaron Investments (Pvt) Ltd. and Another (88/04) (SC 68 of 2007, Civil Appeal 88 of 2004) [2008] ZWSC 68 (08 July 2008);

Law report citations
Media neutral citation
[2008] ZWSC 68

REPORTABLE ZLR (62)








Judgment
No. SC 68/07


Civil
Appeal 88/04








(1)
M.B. ZIKO (PRIVATE) LIMITED (2) MANASE AND
MANASE LEGAL PRACTITIONERS v (1)
CESTARON
INVESTMENTS (PRIVATE) LIMITED (2) KILBERRY
INVESTMENTS (PRIVATE) LIMITED








SUPREME COURT OF
ZIMBABWE


MALABA JA, GWAUNZA JA &
GARWE JA


HARARE, FEBRUARY 14,
2007 & JULY 9, 2008








H
Zhou
, for the appellants


E
T Matinenga
, for the respondents







MALABA JA: This is an appeal from a judgment of the High Court
dated 11 February 2004 by which the first appellant was ordered
to
transfer to the first respondent within 14 days of the order a
certain piece of land situate in the District of Salisbury known
as
Amsterdam Portion of Odar against payment of the balance of the
purchase price whilst the second appellant was ordered to render
to
the second respondent within 30 days of the order a statement of
account in respect of all moneys received by it on behalf of
the
second respondent, a debatement of such account and payment of all
monies due to the second respondent in terms of the account.
The
appellants were ordered to pay the costs of suit jointly and
severally one paying the other to be absolved.







On 11 April 1996 the first appellant represented by one of its
directors M.B. Ziko, and Amsterdam Farm (1987) (Pvt) Ltd represented

by M J Smith entered into an agreement of sale in terms of which the
latter sold and the former purchased a piece of land situate
in the
District of Salisbury known as Amsterdam Portion of Odar (“the
property”) measuring 102,3821 hectares held under Deed
of Transfer
No 15/88 for $700 000. It was a term of the agreement of sale that
the purchaser had to secure from Founders Building
Society an offer
of a loan for the full purchase price payable against transfer of the
property within 60 days of the agreement.
Transfer, which had to be
done by the seller’s legal practitioners Atherstone & Cook, had
to be tendered within 14 days
of the offer of the loan to the
purchaser by Founders Building Society.







On 1 July 1998 M J Smith executed on behalf of Amsterdam
Farm (1987) (Pvt) Ltd a Power of Attorney in terms of which the
second appellant was given the
power to transfer the property to the
first appellant. It is clear from the Power of Attorney that the
full purchase price had
been paid to the seller. Transfer of the
property into the first appellant’s name was effected on 12
February 1999.







On 7 May 1998 the first appellant represented by M.B. Ziko, and the
first respondent, represented by one of its directors G Dzubinsky,

entered into an agreement of sale in terms of which the former sold
and the latter purchased the property for $7 000 000.00. In
the
preamble to the agreement of sale the first appellant is referred to
as “the owner of a piece of land Amsterdam Portion of
ODAR”







Under Clause 2 of the agreement of sale the parties provided that
the purchase price was payable as follows:



“2(a)   The Purchaser shall pay $1 051 181 upon
signing of the agreement            which

amount will be forwarded to FOUNDERS BUILDING
           SOCIETY in

order to obtain the Title Deed of the above            



Amsterdam Portion of ODAR.







  1. $2
    500 00 to be paid after we obtain the original Title Deed from
    Founders Building Society and the balance to be paid in
    six (6)
       monthly instalments.”












Clause 3 authorised the purchaser to take occupation of the property
immediately in order to develop the land. Under Clause 9
of the
agreement of sale transfer of the property had to be effected by the
second appellant upon payment by the first respondent
of the purchase
price or production of a guarantee from a Building Society or Bank of
payment of the same upon registration of
transfer.







On the day of signing of the agreement of sale the sum of $1 051 181
was given to the second appellant who forwarded it to Founders

Building Society. The second appellant had been appointed on behalf
of the first respondent as its agent with authority to forward
the
deposit to Founders Building Society. It had also been authorised to
receive the original title deed for the property on behalf
of the
first respondent.







The first respondent ceded the right to develop the land to the
second respondent. Mr and Mrs Dzubinsky were the directors of
the
respondent companies. On 22 July 1998 the second respondent,
represented by G Dzubinsky, entered into an agreement of agency
with
the second appellant represented by W T Manase.







The second appellant was authorised to sell on behalf of the second
respondent 475 residential and 100 industrial stands making
up the
property and deposit the proceeds into an account which had to be
opened with Barclays Bank Branch along Nelson Mandela
Avenue in
Harare. The money had to be transferred to the second respondent’s
bank account within 7 days of its receipt by the
second appellant.
The second appellant was to be paid 10% commission on the purchase
price of each stand sold.







On 3 July 1998 W T Manase a senior partner in the second appellant,
wrote a letter to the directors of the first respondent inviting
them
to pay transfer fees in the sum of $522 852.50 on behalf of the first
respondent. When the money was not paid he wrote another
letter on
15 July 1998 saying:



“Dear Sir







TRANSER: M.B. ZIKO (PVT) LTD TO CESTARON (PVT) LTD – AMSTERDAM
FARM REMAINING PORTION OF ODAR




We write to confirm that title deeds are now with us for the
above property to be transferred to Cestaron (Pvt) Ltd. … . We
confirm
that there are no incumbrances, liens, mortgages, or
litigation over the property.”















On 20 July Mr Manase wrote to the first respondent’s directors
again. He said:



“Dear Sir







M.B. ZIKO (PVT LTD







We write upon instructions of the above who ask that you deposit with
us $2 500 000 in terms of clause 2(b) of the agreement of
sale
between the parties. Once payment is made this will enable us to
proceed to transfer the property to yourselves. Mr Ziko
is adamant
that this be done first and urgently as he has other commitments to
meet hence his decision to sell the property to
yourselves.”











It appears that the first respondent’s directors wanted transfer
to take place before payment of the purchase price. The letter
makes
it clear that the obligation to pay the sum of $2 500 000 had become
due. The first respondent’s directors responded to
the letter of
20 July by paying to the second appellant $1 million part of which
they asked that it be for transfer fees. Mr Manase wrote to
the first respondent’s directors on 28 July 1998 saying:



“Dear Sirs







M.B. ZIKO (PVT) LTD







We acknowledge receipt of your cheque in the sum of $1 million which
we accepted and deposited without prejudice. It seems we
are unable
to utilize part of that sum for the transfer of the farm to
yourselves until the $2 500 000 is paid to Mr Ziko of the
above. In
this regard we shall disburse the $1 million to Mr Ziko as part
payment of the $2 500 000 you owe him in terms of clause
2(b) of the
agreement of sale. Mr Ziko has also directed as such. In fact it is
the only way we can handle the matter as we are
unable to transfer
the property to you at this stage. To do so will prejudice our
professional position.







Please therefore do pay the balance of $1 500 000 to enable transfer
to take place.”











The letter of 28 July makes it clear once again that the payment of
the amount $2 500 000 had become due in terms of clause 2(b)
of the
agreement of sale. The fact that the first respondent was under the
duty to pay the outstanding balance of $2 500 00 was
discussed at
meetings held between Mr Manase and Mr & Mrs Dzubinsky. The
letter of 10 August 1998 makes reference to these
discussions. It
reads:







“Dear Sirs







M.B. ZIKO (PVT) LTD







We refer to our previous letter of the 28 July 1998 in which we
implored you to make payment to us the sum of $2 500 00 in terms
of
the agreement. We appreciate what Mr Dzubinsky told us that you are
waiting for payment from Magamba Echimurenga Housing Co-operative
but
Mr Ziko is putting us under extreme pressure over the matter. As
discussed at the luncheon at Monomatapa Hotel between the
writer and
yourselves, we will give to you all the assistance you require but
we are unable to transfer the property prior to
the payment as this
will bring us into conflict with Mr Ziko.”















On 13 August Mr Manase wrote a letter to the first respondent
on behalf of the first appellant demanding the payment of $1 500
000 within thirty
days from the date of the letter and threatening
cancellation of the agreement of sale should the money not be paid
within the
time limit. The letter of demand reads:







“Dear Sirs







M.B. ZIKO (PVT) LTD







We refer to previous correspondence in this matter. We have not
received any response to our letter of the 10 August 1998 and
any
letter before it. Mr Ziko of the above company has requested us to
give you notice to the effect that if no payment is forthcoming

within a period of 30 days from the date of this letter they will
proceed to cancel the agreement of sale entered between yourselves.

M.B. Ziko (Pvt) Ltd is demanding that you settle with them in the sum
of $1.5 million in terms of the agreement for transfer to
be
effected. Please therefore take note that if no payment is received
by us within the 30 days period as counted from the date
of this
letter client will thereafter proceed to cancel the said agreement.”











When no payment of $1 500 000 was made in terms of the letter of
demand a letter of cancellation of the agreement of sale was
written
on behalf of the first appellant on 30 September. It reads:



“Dear Sirs







THE AGREEMENT OF SALE: M.B. ZIKO (PVT) LTD AND YOURSELVES







We write in connection with the above agreement of sale wherein you
purchased a piece of land Amsterdam Portion of ODAR in the
District
of Salisbury. It was a term of the agreement that you were to pay
the seller M B ZIKO (PVT) LTD $7 million as follows:







- $1 051 181 upon signing of the agreement, which was done;







- $2 500 000 upon obtaining title deeds from Founders Building
Society. Only $1 million of this amount has been paid;







-          The balance was to
be paid in 6 monthly instalments. Nothing has been
             paid
so far.







The seller has concluded that a breach of fundamental part of the
agreement has been occasioned by yourselves. In this regard
they are
cancelling the agreement of sale forthwith unless payment is effected
immediately of the full balance of the purchase
price including
interest at 34%. M B Ziko (Pvt) Ltd is calling upon you to vacate
the farm and hand over all items you currently
hold relating to the
farm.”











On 8 October 1998 a cheque for $2 000 000 was drawn in favour of the
second appellant. The cheque was dishonoured on two separate

occasions upon presentation to the bank. It had been intended that
of the sum of $2 million $1 500 000 would be part of the purchase

price whilst $500 000 would be used to pay transfer fees.







On 14 September 1998 the second respondent had requested the second
appellant to provide it with a list of stands sold, names and

addresses of the purchasers and the prices at which the stands were
sold. On 16 November the second appellant wrote to the second

respondent advising that they were holding a sum of $1 946 987.36
from the sale of stands. Mr Manase expressed reluctance in
releasing the monies to the first respondent when the agreement of
sale had been cancelled.







On 12 February 1999 the respondents made an application to the High
Court for an interdict restraining the appellants from selling,

offering for sale or dealing with the property in any manner
prejudicial to their rights pending determination of an action to
be
instituted by them. They also applied for an order directing the
second appellant to deliver to their legal practitioners a
schedule
showing all stands sold and forming part of the property, the
purchase price of each stand, monies received in payment
and interest
accrued. The second appellant was to transfer into a joint interest
bearing account in a financial institution to
be agreed upon by the
parties’ legal practitioners all the monies received as well as the
interest therein reflected in the schedule.
The parties’ legal
practitioners were to be joint signatories to the account.







The ground on which the application for the interdict was made was
that the cancellation of the agreement of sale by the first
appellant
was unlawful because the first appellant had not exhibited to the
first respondent the original title deed in its name
as the owner of
the property in terms of clause 2(b) of the agreement of sale.
Although the application was opposed the High Court
nonetheless
granted it. The respondents were ordered to commence action on or
before 22 March 1999.







Summons commencing action was issued in case HC 4209/99 on 22
March. The cause of action pleaded in paras 6 and 7 of the
declaration
was that the first respondent had not obtained the
original title deed to the property in terms of clause 2(b) at the
time the
agreement of sale was cancelled.







At the trial of the action G Dzubinsky gave evidence for the
respondents. The material aspect of it was to this effect. W T

Manase was authorised as the senior partner in the second appellant
to forward the payment of $1 051 181 to Founders Building Society.

He was to receive the original title deed for the property on behalf
of the first respondent. After the payment of the deposit
he visited
the second appellant’s offices asking for the original title deed.
He was told by the employees in the conveyancing
department that the
title deed was in a locked safe. Mr Manase could not be
contacted as he was said to be out of the country.







In August 1998 he got a copy of the title deed from a land
surveyor. He discovered that the property was still registered under

Amsterdam Farm (1987) (Pvt) Ltd. He had been made to believe that
the original title deed was in the name of M B Ziko (Pvt) Ltd.
W T
Manase admitted that he knew that the property was registered under
Amsterdam Farm (1987) (Pvt). He also spoke to M J Smith
who assured
him that the registration of the property under Amsterdam Farm (1987)
Pvt Ltd would not affect transfer to the first
respondent. The
letters dated 10 and 13 August 1998 demanding payment of the balance
of $2 500 000 by the first respondent in
terms of clause 2(b) of the
agreement of sale were not received by the first respondent. The
court a quo found G Dzubinsky a credible witness. It said it
believed all that he said in evidence.







Wilson Tatenda Manase gave evidence to this effect. He drew up the
agreement of sale. Mr and Mrs Dzubinsky and Mr and Mrs Ziko

representing their respective companies came to his office on 5 May
1998. They asked him to draw up an agreement of sale relating
to the
property. The title deed was not produced at the time. From the
information the parties gave him on what they had agreed
upon he drew
up the agreement of sale. The parties signed the agreement of sale
on 7 May 1998. On that day he was given the sum
of $1 051 181 on
behalf of the first respondent. The money was forwarded to Founders
Building Society in terms of clause 2(a)
of the agreement of sale.







At the end of May 1998 the original title deed on the property was
brought to the office. He said he looked at the title deed
and
realised that the property was still registered under Amsterdam
(1987) (Pvt) Ltd. Mr and Mrs Dzubinsky were called to the
office
where he showed them the title deed. He explained to them that the
fact that the property was still registered under Amsterdam
Farm
(Pvt) Ltd would not affect transfer to the first respondent. There
would be a double transfer of the property from Amsterdam
Farm (1987)
(Pvt) Ltd to M B Ziko (Pvt) Ltd and then to the first respondent.







Mr Dzubinsky asked him to investigate further whether there could
be any other encumbrances on the property. Having carried
out the
investigations he wrote to the first respondent’s directors on 15
July 1998 telling them that there were no encumbrances,
liens,
mortgages or litigation on the property.







The first respondent’s directors asked him to transfer the
property to the first respondent before payment of the balance of
the
purchase price. He wrote the letters on 20 and 28 July and held
meetings with them to make clear the fact that the first respondent

was under the obligation to pay the sum of $2 500 000 before transfer
of the property could be effected. He explained to them
that
performance of the obligation to pay the money under clause 2(b) of
the agreement of sale had become due. It was in response
to the
letter of 20 July in which payment of $2 500 000 was demanded on the
basis that performance of the obligation under clause
2(b) of the
agreement of sale to pay had become due that the sum of $1 million
was paid on behalf of the first respondent.







When payment of $1 500 000 was not forthcoming he wrote to the
first respondent on behalf of the first appellant on 13 August
1998.
He put the first respondent in mora by telling it that if the
money was not paid within 30 days from the date of the letter the
first appellant would cancel the agreement.







No payment was made in terms of the letter of demand. The
agreement of sale was cancelled by letter of 30 September. In
response
to the cancellation the directors of the first respondent
gave him a cheque of $2 000 000. Of this amount $1 500 000 was for
the
payment of the balance of $2 500 000 whilst $500 000 was for the
payment of transfer fees. On two separate occasions the cheque
was
dishonoured upon presentation to the bank for payment. On the order
for an account, the matter was dealt with in terms of
the order of 22
February. Considering that the agreement of sale had been cancelled
he paid back all the money received for the
stands sold to the
purchasers. At the time of commencement of the action there was no
money in the custody of the second appellant.





The learned Judge was impressed by the witness’s respectful
demeanour. She, however, said he lacked knowledge of details of
some
of the matters in dispute. The learned Judge said that where the
evidence of Mr Manase differed from that given by Mr
Dzubinsky, she preferred the evidence of the latter. She accepted
the evidence that the first
respondent’s directors were not shown
the original title deed and that the letter of 10 and 13 August 1998
were not received
by the first respondent.







M B Ziko gave evidence for the first appellant to this effect. In
1996 the first appellant purchased stand No 194 in Chitungwiza
with a
loan from Founders Building Society. A Mortgage bond was raised over
stand 194 in favour of Founders Building Society.
A few days later
some one at Founders Building Society asked him whether he was
interested in purchasing Amsterdam Portions of
ODAR which was on
sale. He was interested in purchasing the property.







A loan was advanced by Founders Building Society. The first
appellant purchased Amsterdam Portion of ODAR from Amsterdam Farm

(1987) (Pvt) Ltd. The title deed for the property was with
Atherstone & Cook. Instead of a separate mortgage bond being
registered over the property in favour of Founders Building Society
one mortgage bond relating to stand 194 was used to secure the
total
amount advanced to the first appellant.







During the negotiations with Mr and Mrs Dzubinsky on behalf of
their respective companies on the sale and purchase of Amsterdam

Portion of ODAR he told them that there was money owed to Founders
Building Society that had to be paid for the original title
deed to
be released. On the day the agreement of sale was drawn up by Mr
Manase he went to Founders Building Society and ascertained the
amount still owed by the first appellant. The figure given was the

outstanding balance of the total indebtedness of the first appellant
to Founders Building society in respect of stand 194 and the

property. As one mortgage bond was used to secure the total amount
of money advanced to the first appellant to purchase the two

properties the outstanding amount had to be paid for the title deed
for Amsterdam Portion of ODAR to be released.







The sum of $1 051 181 was paid on behalf of the first respondent
and forwarded by the second appellant. He said the original
title
deed to the property was released into the custody of the second
appellant. As the property was still registered under Amsterdam
Farm
(1987) (Pvt) Ltd the first appellant was referred to in the preamble
to the agreement of sale as the owner of the property.
The reason
was that it had purchased the property from Amsterdam Farm (1987)
(Pvt) Ltd. He had told Mr and Mrs Dzubinsky that
the property was
still registered under the previous seller’s name.







The learned Judge was not impressed by the witness’s demeanour
when he gave evidence. She noted that he kept his eyes directed
at
the ceiling.







On the basis of the assessment of the credibility of the witnesses
the learned Judge made the following finding of facts on which
the
judgment appealed against was based. She said:



“On a balance of probabilities I find that the first plaintiff’s
directors were not shown the deed after they had paid the
deposit.
It is probable that the defendants did not want the first plaintiff
to discover that it had been tricked into paying
the deposit meant
for Founders Building Society to release the deed. It is common
cause that the deed was with Messrs Atherstone
& Cook and not
with Founders Building Society. It is further common cause that the
payment that was made to Founders Building
Society was for the first
defendant’s other indebtedness to that institution and had nothing
to do with the piece of land sold
to the first plaintiff … . It is
not clear from the testimony of both defendants when the deed was
obtained from Messrs Atherstone
& Cook. Thus it cannot be stated
with any certainty as to when the obligation by the first plaintiff
to perform under clause
2(b) of the agreement became due. The time
for performance was not set nor was it clear. In such circumstances
it was incumbent
upon the first defendant to place the first
plaintiff in mora. The defendants have argued that the
first plaintiff was placed in mora by letters from the
second defendant dated 28 July, 10 August and 13 August 1998. George
Dzubinsky on behalf of the first plaintiff
testified that the last
two letters were never received. I believe him and agree with the
submission by Mr Matinenga that these
two letters were an obvious
creation on the part of the defendants to meet the case that the
first plaintiff was making. … .
In the absence of a proper demand
having been made upon the first plaintiff the purported cancellation
of the sale agreement is
of no force and effect.”











On the claim against the second appellant, the learned Judge did not
consider the evidence that the order made on 22 February
1999 covered
the same subject matter of the imposition of the duty on the second
appellant to render to the second respondent an
account of the stands
sold, the names and addresses of the purchasers and the monies
received on its behalf. She held that the
second appellant was bound
to account to the second respondent in terms of the order sought.







The question on appeal is whether the findings of fact made by the
court a quo are correct. The determination of that question
necessitates an inquiry into the question whether considering all the
circumstances
of the case the learned Judge’s assessment of the
credibility of the witnesses can be supported.







In Mthimkhulu v Nkiwane & Anor S-136-01 at p 3-4 of the
cyclostyled judgment it is stated that:



“The principles that govern the approach by an appellate court to
the question of the correctness of the trial court’s finding
of
fact is that as a general rule the trial court’s finding on the
credibility of witnesses should not be lightly disturbed because
that
court would have seen the witnesses give evidence and from that
position was better placed to comment accurately on their
demeanour.
An appeal is however a re-trial on recorded evidence. An appellate
court may still disagree with the finding of the
trial court if on
examination of the evidence and considering all the circumstances
(such as inferences from unquestioned facts
and probabilities) of the
case, it comes to the conclusion that the trial court’s findings on
the credibility of witnesses cannot
be supported. See Forbes v
Golach & Cohen
1917 AD 559 at 560 – 561; Lewis v Elske
1921 AD 36 at 38–42, National Employers Mutual General Insurance
Association v Gany
1931 AD 187 at 199.”







With every respect to the learned Judge, I have come to an entirely
different conclusion on the credibility of the witnesses.
I reached
this conclusion after a careful examination of the recorded evidence
of the witnesses and consideration of the documentary
evidence. I
bore in mind the fact that the learned Judge was better placed to
comment accurately on the demeanour of the witnesses.
I was
nonetheless mindful of the fact that whilst demeanour is an important
factor to be taken into account in the assessment
of a witness’s
credibility the weight to be placed on it in determining the question
whether the evidence given is reliable and
probative of the facts in
issue must depend on all the circumstances of the case.







The first question for the determination of which the credibility
of the witnesses became a decisive factor was whether or not
the
first respondent became aware of the fact that the original title
deed for the property had been obtained as a result of the
forwarding
of $1 051 181 to Founders Building Society. The first respondent’s
directors appointed the second appellant as its
agent and authorized
W T Manase to obtain the original title deed on its behalf. Mr
Manase gave evidence to the effect that the original title deed
came into his possession at the end of May 1998. It is highly
unlikely
that the letter of 3 July would have been written to the
first respondent’s directors calling upon them to pay transfer fees
on its behalf if the title deed was not in the second appellant’s
possession. The letter of 15 July put the fact that the original

title deed was in the possession of the second appellant by that date
beyond any doubt. The learned Judge accepted as a fact that
the
title deed was in the possession of the second appellant. She held
that the first respondent did not “obtain” the original
title
deed because it was withheld from its directors by the second
appellant’s witness.







The learned Judge overlooked the fact that the first respondent’s
directors appointed the second appellant as its agent for
the
purposes of obtaining the original title deed in terms of clause 2(b)
of the agreement of sale. Knowledge of the second appellant’s

witness that the title deed had been obtained and was in the agent’s
custody as disclosed in the letter of 15 July 1998 was imputable
to
the first respondent as the principal for the purposes of the
fulfilment of the condition precedent to the performance of the

obligation to pay the sum of $2 500 000 in terms of clause 2(b) of
the agreement of sale.







Mr Manase’s evidence that after the title deed came into
the possession of the second appellant at the end of May 1998 he
called the first respondent’s
directors and showed them the
document is supported by probabilities. His conduct would be
consistent with the fulfilment of the
mandate in terms of which the
second appellant was required to obtain the title deed on behalf of
the first respondent.







The Power of Attorney signed by Mr Smith on behalf of Amsterdam
Farm (1987) (Pvt) Ltd, on 1 July 1998 appointing the second appellant

as the conveyancers to transfer the property to the first appellant
was overlooked by the court a quo. The Power of Attorney
states that as of 1 July 1998 the full purchase price at which the
property had been sold to the first
appellant had been paid. It is
common cause that all the indebtedness of the first appellant to
Founders Building Society in respect
of the property had been
discharged upon payment of $1 051 181. The first respondent
undertook to pay this money as part of the
purchase price. That the
money was used to discharge the indebtedness of the first appellant
to Founders Building Society in respect
of stand 194 and the property
was of no consequence to the interests of the first respondent
provided the payment had the effect
of having the original title deed
to the property released into the custody of the second appellant.







There was no question of the first respondent being tricked into
doing what it had voluntarily undertaken to do in pursuance of
its
interest to purchase the property. Mr Manase said after the
directors of the first respondent had sight of the original title
deed and noted the fact that the property was
still registered under
Amsterdam Farm (1987) (Pvt) Ltd they asked him to carry out further
investigations and ascertain whether
there were any further
incumbrances on the property. The letter of 15 July 1998 is in
substance a report to the first respondent’s
directors that the
investigations carried out as directed revealed that there was no
incumbrance, lien, mortgage bond or litigation
on the property. The
first respondent’s directors did not deny that they received the
letter. They also did not deny the evidence
that after receipt of
the letter of 15 July 1998 they sought to have the property
transferred into the first respondent’s name
before payment of the
sum of $2 500 000 in terms of clause 2(b) of the agreement of sale.
How could they have the property transferred
into the first
respondent’s name without the knowledge that the original title
deed was available?







The learned Judge’s finding that it was not clear from the
evidence of the appellants when the performance of the obligation
to
pay the sum of $2 500 000 became due was a clear misdirection. It
was in the contemplation of the parties that the performance
by the
first respondent in terms of clause 2(b) would become due immediately
following the obtaining of the original title deed.
Mr Manase
said the original title deed came into the possession of the second
appellant as the first respondent’s agent at the end
of May 1998.







There is no doubt at least that upon receipt of the letter of 15
July the first respondent’s directors became aware of the
fact that
the condition precedent to the due performance of the obligation to
pay the money had materialised. The letter of 20
July 1998 was an
unequivocal demand for the payment of $2 500 000 in terms of clause
2(b) of the agreement of sale. At least as
of that date the first
respondent’s directors were made aware of the fact that performance
by the first respondent of the obligation
to pay the money had become
due. Payment of $1 million made in response to the demand made in
the letter of 20 July was an acknowledgement
of the fact that the
performance of the obligation under clause 2(b) of the agreement of
sale had become due. Had sufficient weight
been placed on the
evidence of the letters, the court a quo would have arrived at
a different conclusion in its assessment of the credibility of the
witnesses.







The second question the determination of which was based on the
assessment by the court a quo of the credibility of witnesses
was whether or not the first respondent was put in mora before
the agreement of sale was cancelled. It is important to bear in mind
the fact that the parties entered into an agreement
of sale of land
in terms of which the purchase price was payable in two or more
instalments. The first appellant was obliged by
the provisions of s
8 of the Contractual Penalties Act [Cap 8:04](“the
Act”) to give the first respondent not less than 30 days within
which to pay the balance of the purchase price which
was due before
cancellation of the agreement of sale.







It is clear that the letter of 13 August 1998 would have had the
effect of putting the first respondent in mora for the
purposes of s 8 of the Act if the evidence that it was received was
accepted. Mr Dzubinsky said the letters of 10 and
13 August were not
received on behalf of the first respondent. He did not say the
letters were not written on the dates they bear.







Mr Matinenga suggested to Mr Manase during
cross-examination that the letters were written after the
commencement of the action to meet the case being made by the
first
respondent. The basis for this proposition was that the photocopies
of the two letters were of dark shading. It was also
said that when
further particulars of the letters of demand the first appellant had
alleged in its plea to have sent to the first
respondent were ordered
as requested on behalf of the first respondent, for purposes of
replication, the letters were referred
to as annexure A, B, C, D and
E whilst the letter of 13 August appeared as annexure E1. It was
suggested that annexure E1 was
inserted to meet the case the first
respondent intended to make against the first appellant at the trial.
The contention was that
the two letters were fabricated and given
the dates they bear to create the impression that they were written
on 10 and 13 August
1998. Mr Manase denied the accusation.
The learned Judge accepted the proposition put to the witness by
Mr Matinenga.







The learned Judge failed to appreciate the fact that there had to be
reasonable grounds before so serious allegations of deliberate

fabrication of documentary evidence for purposes of meeting a case
for the opposing party is made against a legal practitioner
who is an
officer of court. In this case there was no basis for the accusation
leveled against the legal practitioner.







When Mr Manase explained in evidence in answer to the
suggestion by Mr Matinenga that the letters of 10 and 13
August 1998 were referred to as annexures E and E1 when further
particulars were provided in terms
of the order of 9 March 2000 the
explanation ought to have been accepted. The reason is that there
was no evidence with which
the veracity of the explanation could be
challenged. In the replication it was not alleged that the letters
were not written on
the dates they bear. It was even not suggested
that they were not received. The allegation made was that the
letters did not
constitute demand at law. Apart from the speculative
cross-examination of Mr Manase there was no basis in the
evidence for the first respondent for the finding by the learned
Judge that the letters of 10 and 13
August 1998 were fabricated to
meet the case the first respondent intended to make at the trial.







The question for determination is whether Mr Dzubinsky told the truth
when he said that the two letters were not received by the
first
respondent. For the letter of 13 August to constitute demand for
purposes of putting the first respondent in mora as
required by s 8 of the Act, it had to be received by the first
respondent. The two letters were addressed to the first respondent’s

directors and posted to the same Post Office address to which all the
other letters that were received by the first respondent’s

directors were sent.







The other letters had not been replied to and no acknowledgement of
their receipt had been communicated to the appellants. The
two
letters were also not returned by the Post Office as not having been
claimed. It is also important to note that the postal
address was
given by the first respondent’s directors in the agreement of sale
as the reliable address to which correspondence
between the parties
on matters arising from their contractual relationship should be
sent.







The post was chosen by the first respondent’s directors as the
reliable method of communication between the parties. Where a

specific method of communication has been chosen by the parties and
all the necessary requirements for its use such as proper addressing

and posting have been complied with as directed, a presumption arises
of the fact that the letter was delivered or received unless
there is
proof to the contrary. Van der Merwe v Colonial Government
(1904) 21 SC 520; Dougan v Estment 1910 TPD 998.







There is also a presumption that a document was executed on the day
of the date it bears. In other words unless the contrary is
proved
the date on a document must be taken as its true date. Phipson On
Evidence
13 ed para 35-03.







The first respondent’s witness merely denied having received the
letters of 10 and 13 August 1998 on behalf of the first respondent.

There was no suggestion that the letters were not sent at all by post
or that they were sent to a wrong address. The bare denial
of
receipt of the letters was not sufficient to discharge the onus on
the first respondent to rebut the presumption that the letters were
delivered at the address to which they were posted. There
was also
no basis on which the first respondent could be said to have
discharged the onus to rebut the presumption that the two
letters were written on the dates they bear. The court a quo
ought to have found that the first respondent’s directors received
the letters of 10 and 13 August 1998. The first respondent
was put
in mora.




On the relief sought against the second appellant by the second
respondent it is clear that the former was authorised to sell the

stands to members of the public and receive the proceeds thereof on
behalf of the second respondent. The second appellant was
under the
duty as an agent to account to the second respondent for the stands
sold, the names and addresses of the purchasers and
the proceeds
received on its behalf. The second appellant could not defeat the
claim for a statement of account by raising the
rights of third
parties such as the purchasers. In Blaustein v Maltz Mitchell &
Co
(1937) 1 ALL E R 497 at p 502 SLESSER LJ said that:



“Where an agent would otherwise be bound to account to his
principal in respect of moneys paid to him, he cannot resist the
claim of his principal by alleging some claims made to it by some
other person.”







SCOTT LJ at p 505 said:



“The law is perfectly clear that an agent receiving money
rightfully for his principal is not liable in respect of that money

to the owner of the money even where the principal, upon receiving
it, would be bound to pay it over to the owner.”







At the time the second appellant sold the stands and received the
proceeds thereof the second appellant did so on behalf of the
second
respondent. It was under the duty to account to the second
respondent for the number of stands sold and the proceeds received

even if the monies had been refunded to the purchasers.







The point raised on behalf of the second appellant which was not
dealt with by the court a quo was that the obligation to
account to the second respondent was enforceable under the order to
account made against it on 22 February
1999. It appears to me that
whilst the order which dealt with the same subject matter had not
been abandoned the second respondent
was debarred from instituting an
action claiming an order to account against the second appellant. It
should have enforced the
order of 22 February 1999.







As a result the appeal succeeds with costs. The order of the court a
quo
is set aside and substituted with the following –



“The action is dismissed with costs.”



















GWAUNZA JA: I agree



















GARWE JA: I agree



















Manase & Manase, appellants’ legal practitioners



Musunga & Associates, respondents’ legal practitioners