Chanakira v Malcom N.O. & Ors (HC 1813 of 2010) [2015] ZWHHC 535 (16 June 2015)

1 HH 535-15 HC 1813/10 BLESSMORE CHANAKIRA versus SHEPHERD MALCOM N. O. and REGISTRAR OF DEEDS and PHIL RUSCH HIGH COURT OF ZIMBABWE NDEWERE J HARARE, 10 February 2015, and 17 June 2015 Civil Trial L Uriri, for the plaintiff T Mpofu, for the 1st defendant No appearance for the 2nd defendant D Ochieng, for the 3rd defendant NDEWERE J: The background facts are that the plaintiff expressed interest in Stand 5233 Salisbury Township Lands measuring 3309 square metres which is the property in dispute. The property belongs to the estate of the late Robert Eric Rae. An agreement of sale was concluded on 22 October, 2009 between the plaintiff and Property Shop, the Estate Agent firm which handled the transactions for the sum of US$220 000.00. On mode of payment the agreement provided as follows: “The Purchaser shall pay cash deposit of US$100 000[one hundred thousand United States Dollars] of which US$30 000[thirty thousand United States Dollars] shall be non-refundable] upon signing of the agreement of sale. The purchaser shall pay the sum of US$60 000[sixty thousand United States Dollars] on or before 30 November, 2009 and the balance of US$60 000[sixty thousand United States Dollars] on or before the 31st December, 2009.” The above mode of payment has been the source of the dispute. The plaintiff claims to have paid theUS$100 000.00 cash deposit upon signing of the agreement of sale as stipulated by the clause. The first defendant, representing the estate, denies, that any deposit was paid. The agreed issues for the trial were whether the plaintiff breached the agreement of sale with first defendant and if he did, whether the first defendant cancelled the sale. The HH 535-15 HC 1813/10 second agreed issue was whether this was a double sale, with the third defendant as the second purchaser and if so in whose favour did the balance of equities lie. In my view the first issue for determination by the court is whether the plaintiff paid the requisite deposit upon signature of the agreement. The plaintiff’s evidence was that he paid US$100 000.00 in cash to Felicity Lock, The Property Shop negotiator, after counting the money: at her house in the presence of Shirley Margaret Rae who represented the seller who was still alive by virtue of a Power of Attorney. He said he did not ask for a receipt, neither did he obtain any other proof of payment from Felicity Lock. The plaintiff’s evidence was that he paid the US$100 000.00 before he signed the agreement because payment of that amount was a condition precedent to the signing of the agreement. Felicity Lock denied that any payment was made. She said she expected the plaintiff to pay soon after signing but then the plaintiff showed her some Kingdom Bank documents and said for him to get the money to pay, he needed to sell his shares first and for him to sell the shares, he needed a signed agreement. She said she then gave him Shirley’s Rae’s Stanbic Account number and told him to deposit the money into that account. She also gave him a Property Shop Account number for him to deposit the agency commission. Her evidence was that Shirley Rae signed the agreement first, in the absence of the plaintiff and later, he took the agreement to the plaintiff at some agreed meeting place near Hellenic School. Shirley Rae also denied that any payment was made to her or Felicity in her presence. Her testimony was that she had not even met the plaintiff when the agreement was executed, she saw him for the first time at the pre-trial conference. The plaintiff told the court that he is an astute businessman aged 35 years. He said he has been in business since he was 22 years old and has about 13 years business experience. He also said he is a qualified accountant and he has experience in the acquisition of properties as he has eleven properties to his name. The court found it highly improbable that a qualified accountant and an experienced property investor would part with US$100 000.00 cash in the year 2009, when foreign currency was still scarce, without bothering to obtain a receipt or other proof of payment; yet that was the plaintiff’s evidence on pages 51 and 52 of the transcribed record; “Q. Now, before a dispute before the parties erupted, did you ever ask for a receipt? A. No from Felicity no I never asked for a receipt….. Q. It’s a simple question, did you ever ask for a receipt? HH 535-15 HC 1813/10 A. From Felicity Lock Q. Did you ever ask for a receipt? A. No I have proof of payment.” When the questioning about not asking for a receipt persisted, the plaintiff in response said Property Shop was operating from home and the office was not running professionally. All the more reason why he should have asked for a receipt or some other form of proof of payment if he knew that Property Shop was not being run professionally. The plaintiff also told the court in his evidence that paying US$100 000.00 cash was a condition precedent to the signing of the agreement. The agreement is part of the court record and nowhere does the agreement say payment was a condition precedent. It is also highly improbable that a qualified accountant would pay US$100 000.00 deposit before the agreement has been concluded and leave without any proof of payment. Even if Felicity Lock had no receipts on account of being “unprofessional” as plaintiff alleged, the plaintiff himself could have prepared an acknowledgement note. He knew this was possible. “Q….. you could have done an acknowledgement of receipt and say I, Felicity acknowledge that I have received US$100 000.00, you could have done that ……. A. I could have done that” (p 57 to 58 of the transcribed record) The plaintiff confirmed that he could have done an acknowledgement of receipt himself. But he did not. He admitted that as a businessman he knew that disputes could arise and that he could have had an independent witness with him to confirm the payment; but he said he went alone to make this huge cash payment. On the other hand, Felicity Lock’s evidence was that they did not accept cash as a matter of policy; they gave clients account details for them to deposit the money into the appropriate accounts. She said in this instance she gave the plaintiff Shirley Rae’s Stanbic account. She said once the money was deposited into an account, the deposit slip would be sufficient proof of payment. Her evidence sounded truthful and the court accepted it. Shirley Rae is an 83 year old lady who was around 78 years at the time of the incident with the plaintiff. Her evidence was that the plaintiff never paid cash in her presence and never deposited any money into her account. Her evidence was believable. Why would an 83 year old lie against the plaintiff and say he did not pay if he had paid? All she wanted was a purchaser who would pay for her husband’s property. If the plaintiff had paid, why would HH 535-15 HC 1813/10 she have turned down his money in favour of the third defendant’s money when the money tastes the same? The court therefore accepts her evidence as truthful. In addition to that, on 27 October 2009 when the plaintiff wrote to the second defendant through his lawyers requesting him to put a caveat on the property, he never said he had paid anything. The third paragraph of that letter stated the following; “The agreement of sale is to be satisfied within a period of three instalments as it fully appears from the attached copy of the agreement of sale.” The use of the phrase “is to be satisfied” shows that payment had not yet been done. If the plaintiff had already paid US$100 000.00 the letter would have said so. In view of the above improbabilities in the plaintiff’s claims the court rejects the plaintiff’s testimony and accepts that of Felicity and Shirley Rae that no US$100 000.00 cash was ever paid by the plaintiff as a deposit for the property. The above finding means the plaintiff was in breach of contract from the very day the sale agreement was concluded. He ought to have paid US$100 000.00 on signing of the agreement, he did not. That was the first breach. The plaintiff admitted breaching the further requirements to pay $60 000 by end of November and $60 000 by end of December. These were the second and third breaches respectively. In view of the three breaches, the plaintiff has no basis to claim specific performance by the first defendant. As held in the case of Lasagne Investments (Pvt) Ltd & Others v Highdon Investments (Pvt) Ltd & Others 2010 (2) ZLR 296 at 302 D-303 A referred to by third defendant’s counsel a litigant who seeks an order for specific performance must perforce establish that he has complied with his obligations under the agreement. The first defendant, through its representatives comprising of Property Shop and Sinyoro and Partners gave the plaintiff some grace period. Felicity’s evidence was that she continued to follow up for payment. Mataba of Sinyoro and Partners’ evidence was that when the plaintiff stopped responding to Property Shop’s follow up, he got into the fray and also followed up the plaintiff. All the plaintiff paid was the Agents Commission and the Conveyancing fees. These follow ups and indulgences were in order because of the provisions of clause 8 of the agreement of sale between the parties. After getting no joy from the follow ups for payment, on 27 November, 2009 Sinyoro and Partners gave the plaintiff 30 days’ notice to remedy the breach. The letter was sent to the plaintiff’s domicilium citandi executandi given in the agreement of sale on the schedule of details as 40 Dover Road, Chisipite, Harare as provided in clause 9 of the agreement of sale. HH 535-15 HC 1813/10 The plaintiff claimed not to have seen the notice. However, since the notice was sent to his domicilium in terms of the agreement, the notice was validly given. Clause 9.2 of the agreement of sale provides as follows: “All notices required to be given in terms of this agreement and all process shall be deemed to have been validly given or served if addressed to the party concerned and delivered to the given domicilium, postal, or e-mail address.” This means that a party had to choose to deliver to the given domicilium, post to the domicilium or use an e-mail address. In this instance the notice was “addressed to the party concerned and delivered to the given domicilium.” The plaintiff did nothing about the notice and on 30 December, 2009, a letter confirming the cancellation of the agreement was addressed to the plaintiff and sent to the given domicilium. During the trial the plaintiff tried to take issue with the fact that by 30 December, 2009 30days notice was not complete. While the plaintiff’s basis for saying that is not clear, the court notes that no prejudice was caused to the plaintiff thereby because the third defendant’s evidence clearly shows that his own agreement of sale was concluded when thirty days had expired, in January, 2010. In any event, the default clause provided that the breach should be rectified “within thirty (30) days of notice calling upon him to do so”. It did not say after 30 days’ notice. It is clear from the facts of this case that the first defendant and its representatives always sought to abide by the terms of the contract while the plaintiff was busy doing his own thing which was at complete variance with the signed agreement. He therefore repudiated the contract from the onset. The cases referred to by first defendant’s counsel on repudiation of contracts are relevant to this case. In Chinyerere v Fraser NO 1994 (2) ZLR 234 it was held “that before a contract could be said to have been fulfilled per acquipollens, it was necessary that the act or performance tendered must be equivalent to that mentioned in the contract,….”. In this instance, the performance which was required was that of paying $100 000.00 “upon signing the contract”. The plaintiff did not pay upon signing as required by contract. In Ross T Smyth & Co Ltd v TD Bailey, Sons Co [1940] ALL ER 60 (HL) at 73, the court said, “I do not say that it is necessary to show that the party alleged to have repudiated should have an actual intention not to fulfil the contract. He may intend in fact to HH 535-15 HC 1813/10 fulfil it, but may be determined to do so only in a manner substantially inconsistent with his obligation, and in no other way.” The plaintiff’s case is a good example of a party wanting to pay on his own terms, and not in terms of the stipulation in the contract. As held in Ross T Smyth & Co Ltd v TD Bailey, Sons & Co supra, such conduct amounts to repudiation. Consequently, the plaintiff’s contract was validly terminated after he breached it from the outset and failed to remedy the breach during the grace period accorded to him. The third defendant is therefore not a second purchaser because there was no other agreement in force when his own contract of sale was concluded. The plaintiff’s claims that his contract be declared valid and enforceable while that of the third defendant is declared null and void are therefore dismissed. All the parties prayed for costs on a higher scale and during the proceedings, they all made some justification for the higher scale. The plaintiff shall therefore pay the defendants’ costs on the legal practitioner and client scale. Hamunakwadi, Nyandoro & Nyambiya, plaintiff’s legal practitioners Matsikidze & Mucheche, 1st defendant’s legal practitioners Coghlan Welsh & Guest, 3rd defendant’s legal practitioners