Mberi v Mbewe & Anor (HC 2473 of 2014) [2015] ZWHHC 420 (29 April 2015)

1 HH 420-15 HC 2473/14 BRIGHTON MBERI versus SAVIOUS MBEWE and NORTON TOWN COUNCIL HIGH COURT OF ZIMBABWE MAFUSIRE J HARARE, 7 & 30 April 2015 Opposed Application E. Mangezi, for the applicant J. M. Bhamu, for the first respondent A. Makoni, for the second respondent MAFUSIRE J: In his application the applicant said his claim was for “specific performance” against the second respondent. This was in respect of an immovable property, a house in one of the high density suburbs administered by the second respondent. At the end of the hearing I dismissed the application with costs and promised to deliver the reasons later. These are they. The applicant said he had “bought” the house from the first respondent. The first respondent was the son to his late father (“the deceased”) and the heir to the estate. The deceased had been buying the property from the second respondent under the usual rent-to- buy agreement common among the local authorities. The applicant’s case was that the respondent was refusing to “transfer” the property to him for the most unreasonable of reasons. The second respondent was saying it could not consent to the “transfer” because it was aware that the deceased’s widow, one Mlingo Mbewe, had certain rights over the house which the son, the first respondent, was trying to override or trample upon by surreptitiously “selling” it to a third party, the applicant. The second respondent did not exactly use such words. But that was clearly the import of its opposition. It said until the widow was joined to the application, and until it was satisfied that the dispute between her and the son had been resolved, it was not going to consent. It seems that previously the son had instituted an action to evict the widow from the house. However, the action had not been proceeded with. The matter had been resolved on HH 420-15 HC 2473/14 the basis that the son would have entitlement to one of the rooms at the house and another room in the outbuilding, with both of them sharing the rentals from the remainder of the rooms. To that the applicant said the second respondent was not raising any defence valid at law but was merely trying to protect the widow out of sympathy for her. That was corruption and an abuse of office, he said. The first respondent, the son, supported the applicant’s case. He filed a “Consent to Judgment” in terms of which he was consenting to be ordered by this court to “… take all the necessary steps to transfer [the] right, title and interest in [the] property…), failing which the Sheriff should be authorised to do that on his behalf. What was remarkable in this case was the misconception exhibited by all the parties in relation to the true nature of their rights and obligations. Terms such as “sale/ purchase of rights, title and interest in”, “transfer”, etc. were manifestly misguided. Only somewhere in the second respondent’s heads of argument was there a fleeting reference to the true legal position. In paragraph 21 it was said: “21 The record must be correctly set. Ownership of the property in dispute vests in the 2nd Respondent. The 1st respondent, on his own, as asserted by Application (sic) or jointly with Mlingo Mbewe, in 2nd Respondent’s view, only hold personal rights in the property.” As long ago as 1992 the Supreme Court voiced concern over the use of such wrong terminology in such situations. That was in the case of Gomba v Makwarimba1. At pp 27 -28 McNALLY JA said: “As so often happens, the parties have used the word ‘sale’ to describe what was in reality a cession of rights, since the house actually belongs to the Chitungwiza Town Council. …. It is unfortunate that legal practitioners persist in ignoring the distinctions between sale and cession of rights in these cases, both because there are many such cases and because there are many such distinctions. In this case the respondent was not the owner of the disputed immovable property but merely a ‘lessee-to-buy’. The contract in terms of which the respondent acquired and held her rights in the property, and which defined her rights in the property, was not before the Court. Nor was the owner cited as a party.” In the present case, although the owner, the second respondent, was cited as a party (undoubtedly because it was the one refusing to consent), the rent-to-buy agreement was not 1 1992 (2) ZLR 26 (SC) HH 420-15 HC 2473/14 produced by any of the parties. But it was common cause that any rights in the property had devolved to the deceased, and subsequently to the first respondent, in terms of that agreement. None of the parties gave any coherent answer why that agreement was not produced. The applicant was content to start and end with his own agreement with the first respondent. But that agreement was irrelevant, particularly given that the first respondent was actually supporting his cause. The applicant’s true grievance lay with the second respondent. If he claimed that the second respondent’s refusal to consent to the cession (not transfer) was unreasonable, then he ought to have produced that agreement and pointed out those terms that showed that such refusal was unreasonable. That was so because, among other things, the usual rent-to-buy agreement contains clauses expressly prohibiting the cession or assignment of rights under them, or the parting of rights of occupation of the property, or the alienation or disposal of the property without the prior written consent of the local authority. In the case of Hundah v Murauro2 McNALLY JA said3: “It is surely a matter of general common knowledge, at least among lawyers, that land in the high density suburbs belonged to the local authority or, occasionally, to central government. Occupants of the houses built in these suburbs fall into three categories (ignoring the fourth category of lodgers or dependants). They were: 1. simple tenants under a lease agreement with the local authority or central government; 2. tenants-to-buy, under an agreement which permitted them to take title once the property was surveyed and the full price paid; 3. owners, who graduated from category two, in the fullness of time. “It is astonishing that no one thought to ask [the appellant] into which of these categories he fell. Even more astonishing when one remembers that he actually alleged ‘it is still property of the City of Harare’. “[The appellant] was not the owner of the property. [He] is not now the owner of the property. At the time the estate agent drew up the agreement …… he was not even a tenant-to-buy. He was just a simple tenant. …. … “In this situation we regularly hear the submission –‘But Roman-Dutch law does not require a seller to own the property he sells. He can enter into a valid agreement of sale as long as he realises he may face an action for damages if he is unable to give good title to the purchaser when the time comes to hand over vacant possession and, in the case of immovable property, give transfer’. 2 1993 (2) ZLR 401 (SC) 3 At p 403 - 404 HH 420-15 HC 2473/14 “This answer may score well in an examination, but it overlooks the fact, which should be common knowledge among practitioners, that the standard agreement of lease or lease to buy used by the Harare and Chitungwiza Municipalities (and many others) contains a clause designed to prevent such agreements.” The pronouncement by the Supreme Court in the Hundah case above all but sums up the applicant’s insurmountable problems in this case. In a great number of cases of this nature the local authority is little concerned with what the tenant-to-buy does with his rights and interest in the property. The local authorities normally consent in advance of the alienation or disposal of such rights, or they subsequently ratify. When litigation ensues, often against the double-dealing or recalcitrant lessee-to-buy, the local authorities simply indicate their willingness to abide by the order of the court. Unfortunately for the applicant in this matter, this was not the case. In the present matter, not only had the local authority not given its consent to the intended cession, but it was expressly refusing to grant it. The applicant’s situation was actually worse off than any of those in similar situations, for example, in the Hundah and Gomba cases above. There were others. In Pedzisa v Chikonyora4 GUBBAY CJ had this to say5: “It is trite that where a contract of lease contains prohibitions against sub-letting, cession or assignment, either absolutely or without the lessor’s consent, a sub-lease, cession or assignment, entered into without title to do so, is valueless and confers no rights on the third party; for he can acquire no greater rights in the property than the lessee has. ….. A further obvious consequence of the prohibition is that the court will refuse to enforce the sub-lease, cession or assignment, at the instance of the lessee. To do otherwise would be to confer a right upon the lessee not given by the lessor. …………………. “Plainly enough in the present case the content of the lease-to-buy agreement was … invalid because of a failure of the parties to it to request and obtain the written consent of the Council – a failure that related to a contractual formality. ……” In Magwenzi v Chamunorwa & Anor6 , a case only marginally different from the present one in that the tenant-to-buy had since obtained title to the property even though at the time that he had purported to sell it to the third party he had not, EBRAHIM JA said this7: “Once the first defendant had taken transfer of the property, he was entitled to sell it. The first defendant had agreed to sell at a time when he was not the registered owner. All the time that 4 1992 (2) ZLR 445 (SC) 5 At pp 453 - 454 6 1995 (2) ZLR 332 (S) 7 At pp 335- 336 HH 420-15 HC 2473/14 the City of Harare remained the owner, the agreement to sell was unenforceable, because the first defendant could not transfer ownership without the consent of the Municipality. Once the Municipality’s consent was not required, however, the contract became enforceable. …………… “The agreement in Pedzisa’s case supra was described as ‘invalid’, because it had failed to comply with a contractual formality. ………” In Jangara v Nyakuyamba & Ors8 GILLESPIE J reviewed a number of decisions of both this court and the Supreme Court on the issue of “township houses” administered by local authorities under the lease-to-buy agreements and which are disposed of in breach of the terms of such agreements. Some of those cases that the learned judge reviewed included Pedzisa; Hundah; Magwenzi, supra; Guta v Chimbunde & Anor9 and Nkomo v Mujuru10. At p 481 the learned judge said: “I am therefore of the respectful view that the following statement of principle is to be gleaned from the Supreme Court decisions. A cession of a right, originally acquired subject to a pactum de non cedendo, but in breach of that reservation, creates rights as between the parties to that subsequent cession, which rights, however, cannot bind the original holder of those rights. The court may, at the instance of the third party, enforce that contract as against the lessee-purchaser; no order, however, may be given which can bind the original holder of those rights. Thus no order of transfer can be given against that original holder. An order of specific performance of transfer may, at the court's discretion, be given against the lessee-purchaser; such an order has the effect of obliging that party to effect transfer if he is in a position to do so, or to take transfer of the property in order to give it, if such be necessary. Depending on the circumstances, however, the court may confine a third party to an alternative claim against the lessee-purchaser in damages. This statement of principle explains completely the results in all the other judgments, and was the principle expressly applied by SMITH J and ROBINSON J in Guta and Magwenzi.” (my emphasis) In the present case, whether the second respondent withheld its consent to the cession because the widow had not been cited, and whether or not such a reason was unreasonable under the circumstances, are issues that are immaterial, especially in the absence of the rent- to-buy agreement. If the first respondent required the prior written consent of the second respondent before he could in any way alienate or dispose of his rights in the property to somebody else, and if the first respondent had not obtained that consent prior to selling his rights to the applicant, then that was the end of the road for the applicant in his claim against the second respondent. Whether or not the applicant does have a remedy against the first respondent is an issue of no concern in the present application. As stated in Pedzisa, the 8 1998 (2) ZLR 475 (HC) 9 HH 194-94 10 1997 (1) ZLR 155 (H) HH 420-15 HC 2473/14 agreement between him and the first respondent was invalid or unenforceable against the second respondent for want of compliance with a contractual formality. It was for that reason that at the end of the hearing I dismissed the application with costs. 30 April 2015 J. Mambara & Associates, applicant’s legal practitioners Tamuka Moyo Attorneys, first respondent’s legal practitioners Mbidzo Muchadehama & Makoni, second respondent’s legal practitioners