Catherine Vongai Wamambo v Municipality of Chegutu

### Preamble
1
HH 234-12
HC 2837/11
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CATHERINE VONGAI WAMAMBO

versus

MUNICIPALITY OF CHEGUTU

HIGH COURT OF ZIMBABWE

MATHONSI J

HARARE, 8, 9, May 2012 & 6 June 2012

Civil Trial

F. Piki, for the plaintiff

A. Zeure, for the defendant

MATHONSI J: The plaintiff instituted proceedings against the defendant on 18 March 2011 seeking contractual damages arising from what she perceived to be an unlawful cancellation of an agreement of sale of a vacant stand entered into between the parties.

The action was defended and after entering appearance to defend the defendant filed a plea on 24 May 2011 denying liability and stating that it had cancelled the agreement of sale as a result of the plaintiff’s failure to comply with a provision in it requiring her to develop the stand within the time prescribed in the sale agreement.

I mention the dates when the processes were filed because, much later on 24 October 2011 the defendant purported to file a claim in reconvention which, although it may have been abandoned at the pre- trial conference, the defendant appeared to resuscitate at the trial. I need to dispose of this issue now before taking the matter further.

The filing of a claim n reconvention is provided for in Order 18 of the High Court of Zimbabwe Rules, 1971, r 121(1) of which is of peremptory application. It provides:-

“A claim in reconvention shall be so described and shall be bound and filed with he defendant’s plea”  (The underlining is mine)

As stated above, the defendant’s claim in reconvention was not filed with its plea. It was filed exactly 5 months after the plea was filed and in clear violation of r 121(1). This was incompetent.

While a departure from the rules can be allowed, this can only be through condonation by the court. No application for condonation was made and such cannot be given unsolicited. The defendant was not entitled to counter claim and its nervous attempt to reintroduce the irregular claim in reconvention at the trial cannot be accepted.

Even if I am wrong in that conclusion, the defendant’s claim in reconvention would still fail on the basis that it was not among the issues for trial agreed at the pre-trial conference. I shall return to that later in this judgment.

At the pre-trial conference of the matter, only one issue was identified as being the issue for trial, namely whether or not the plaintiff is entitled to damages in the sum of US$19500-00. The parties also made the following admissions which are contained in the joint pre-trial conference minute:

“3.	Admissions Made

3.1	That the plaintiff was in breach of the deed of sale between

the plaintiff and the defendant.

3.2	That the Contractual Penalties Act is applicable.

3.3	That the defendant did not give adequate notice to the plaintiff to rectify breach as required in terms of the Contractual Penalties Act.

3.4	That the stand 1279 Chegutu Township, belonging to the plaintiff was sold to a third party by the defendant and is longer available”.

At the trial of this matter, the plaintiff gave evidence which is to the

effect that in 2002 she entered into a written agreement of sale with the defendant Municipality in terms of which she purchased from the defendant, a vacant stand being stand 1279 Hintonvile Chegutu for $35 000-00 Zimbabwean currency. She paid cash for the stand. The said agreement was produced as an exhibit.

It was a term of the agreement that she would develop the stand by constructing a dwelling within 2 years of the signing of the agreement. Although she submitted plans for the building to the defendant, which plans were approved by the defendant, she was unable to develop the stand due to financial constraints. She however continued to pay rates and taxes to the defendant which the latter gladly accepted.

Sometime in 2009, she sent someone to the offices of the defendant to pay the rates but the defendant refused to accept the rates payment on the basis that her stand had been repossessed by the defendant. The plaintiff testified that at no point had she been served with a notice of repossession or any notice for that matter. She only got to know of it when the defendant refused to accept rates payment.

She stated that she proceeded to the offices of the defendant where she spoke to the Housing Officer, a Mrs Mandeya, who told her that the defendant had repossessed the stand owing to her failure to develop it. When she tried to negotiate to get it back she was advised that she would have to pay for it again but his time at a value of US$10-00 per square metre and, given that the stand in question measured 1950 square metres, simple arithmetics meant that she had to pay an extra US$19 500-00.

The plaintiff stated that the defendant however made it clear to her that stand 1279 Hintonvile Chegutu was no longer available for her to even re-purchase it as it had been re-sold to someone else. Her further investigations revealed that it had in fact been sold to Mr and Mrs Shiku of Chakari who still owed the defendant a sum in excess of US$16 000-00 towards the purchase price although he did not know for how much it had been sold.

The plaintiff produced a document with the title:

“Rates Calculation: Replacement Stand for Stand 1279 C. Wamambo. Basis: Vacant/Undeveloped Occupied Land. Rates based on valuation of land and expected improvements. Expected Development: Standard low density dwelling measuring 300m2

Valuation done at current rates”.

The document in question was prepared by the Town Planner, Douglas Chimande, who testified in court on behalf of the defendant. It captures the value of land, that is 1920 square metres, as being US$19 200-00 and computed what the plaintiff had to pay as rates for the period 2002 to 2011 as US$12 960-00. The plaintiff submitted that if one divided the value of land given by Chimande as $19 200-00 by the area used, that is 1920 square metres, the answer is $10-00 which she says is the value of land at current rates. This means that for her to replace stand 1279 Hintonvile Chegutu, which measured 1950 square metres and was unlawfully taken away from her by the defendant, with a 1950 square metre comparable stand, she would require $19 500-00, which is what she is claiming in this action. It represents the replacement value of the stand she lost using the defendant's own valuation.

Under cross-examination, the plaintiff maintained that what she was claiming was what the defendant would charge at current rates for a similar stand as the one she lost.

Alois Mutyanda also testified on behalf of the plaintiff. He is a registered estate agent and valuer with 12 years experience.  At the request of the plaintiff, he conducted a valuation of stand 1279 Hintonvile Chegutu visiting the place on 4 May 2012 and then proceeding to the offices of the defendant where he made inquiries about the stand. He was attended to by an assistant of one Mr Matande by the name Mr Mukandiwa. He was unable to interview anyone at the housing office as he had to rush back to Harare for other commitments and it was almost lunch time.

On 7 May 2012, he telephoned the defendant’s offices and obtained information he used to compile his valuation report dated 4 May, 2012 which was produced as an exhibit. The witness reiterated the contents of that report that stand 1279 Chegutu is now owned by MV and F. Shiku of Chakari. It is still vacant. In his opinion its open market value is US$13 650-00 while its forced market value is US$10 737-50.

Alois Mutyanda added that in the course of his investigations he discovered that the defendant did not have any stands available in Hintonvile. However those that it had elsewhere, are selling for US$5-00 per square metre for residential stands and US$10-00 for commercial stands. Using these rates and inquires from other valuers, he had come up with the figure of US$7-00 per square metre which he used to determine the market value of US$13 650-00.

The plaintiff’s case was closed after the presentation of the evidence of Alois Mutyanda. Her evidence was presented in a simple manner and is not only straight forward but also easy to follow.

The defendant led evidence from Douglas Chimande, the Town Planner, who has held that position for 7 years and boasts of 20 years experience in the town planning business. He was not employed by the defendant at the time the sale agreement with the plaintiff was concluded but is aware of it.

He testified that the defendant is a service provider which provides opportunities for home seekers to build houses. As a Municipality, the defendant lays out and services stands for residential purposes, a process which involves providing the roads, sewage and water reticulation, as well as street lighting. The defendant would then invite home-seekers to contribute to the servicing costs through the purchase price of stands which would be set out in agreements of sale signed with such home seekers.

Douglas Chimande went on to say that in order to determine the purchase price of each unit, the defendant would add up the whole gamut of costs of servicing and divide that by the number of stands. The defendant does not sell land pe se but recovers the costs of the benefit.

After the plaintiff failed to construct a dwelling, the defendant concluded that she was holding the land for speculative purposes, even though no home seeker is allowed to sell an undeveloped stand which is the preserve of the Municipality. The stand was then repossessed. The witness stated that the plaintiff is not entitled to a refund of the purchase price she paid because not only would that amount to an abuse of public funds which the defendant does not have anywhere, but also that the defendant does not have a formulae for refunding Zimbabwe Dollar transactions.

In respect of exh I, the document he authored containing computations of rates payable by the plaintiff for the stand and the value of the stand in question, the witness stated that it was an account of the punitive rating system used by the defendant on vacant/undeveloped but occupied land. The punitive measures are taken because the home seeker offered the stand would have wilfully left it undeveloped for speculative purposes. It sums up the total damage that the defendant suffers when occupiers do not meet their obligations in terms of the agreement of sale.

From there on, Douglas Chimande went off the rails departing not only from the pleadings filed on behalf of the defendant but even from the admissions made by the parties at the pre-trial conference, which admissions I have already quoted above.

While in the pleadings the defendant admitted that the Contractual Penalties Act [Cap 8:14] applied to the relationship between the parties, the witness was steadfast in his evidence that it did not apply as the relationship was governed solely by the Urban Councils Act [29:14].  While the defendant made an admission that it did not give adequate notice to the plaintiff to rectify the breach as required by the Contractual Penalties Act, in his evidence the witness sought to distance himself from that admission electing to say that written notice was given to the defendant which notice was delivered at the vacant stand in dispute. This, despite the fact that he stated that before repossessing the stand, the defendant conducted an inspection which must have revealed that no one resided there and the fact that it would have been foolery of gigantic proportions to deliver a notice at a vacant stand.

More importantly, the agreement of sale signed by the parties provided an address for service for the plaintiff, namely P.O. Box 6328 Harare. He did not explain why this was not used.

Matande also claimed that a further notice was given to the plaintiff via the Sunday Mail of 22-28 July 2007 which notice gave the effective date of repossession as 21 days from the date of publication. This, despite the fact that the defendant had earlier on, on 30 March 2006, sent another written notice to the plaintiff which was delivered at the vacant stand being 1279 Hintonvile aforesaid. He did not give any meaningful explanation as to why it became necessary to give another notice more than a year after the repossession.

Needless to say that the ubiquitous town planner did not tender a copy of either the notice of 30 March 2006 or that of 22 July 2007 as exhibits. If one takes this part of his evidence with the in situ admissions made earlier at the pre-trial conference it is not difficult to reject it.

Matande could not even confirm that stand 1279 was no longer available choosing to hedge behind saying he could not recall off hand and needed to consult records at the housing desk. It is not clear why he did not do so before venturing to court when he knew he was the sole witness for the defendant. This prevarication should also be considered together with the admission made by the defendant that the said stand was sold to a third party and is no longer available, an admission made 6 months before the trial commenced.

To his credit, Matande did confirm that there are no vacant stands available for sale in Hintonvile. He mentioned that the defendant has a current scheme called Chegutu East which is contiguous to Hintonvile wherein the defendant incurred the same costs in developing it as Hintonvile at current rates. It is these servicing costs which he used when computing the replacement value and rates of the disputed stand which are contained in exhibit 1 which I have referred to.

Douglas Chimande did not give his evidence well. He prevaricated a lot and in the process contradicted not only himself but also the defendant’s case set out in the pleadings. His evidence is unreliable in many respects.

Mr Piki appearing for the plaintiff has strongly argued that the defendant cannot lawfully attempt to disprove admissions that it has made. He relies on s 36 of the Civil Evidence Act [Cap 8:01]. That section provides, in relevant part, as follows:-

“36 Admissions

An admission as to any fact in issue in civil proceedings, made by or on behalf of a party to those proceedings, shall be admissible in evidence as proof of that fact, whether the admission was made orally or in writing or otherwise.

……

It shall not be necessary for any party to civil proceedings to prove any fact admitted on the record of proceedings.

It shall not be competent for any party to civil proceedings to disprove any fact admitted by him on the record of proceedings;

Provided that this subsection shall not prevent any such admission being withdrawn with leave of the court, in which event the fact that the admission was made may be proved in evidence and the court may give such weight to the admission as the court considers appropriate, bearing in mind the circumstances in which it was made and withdrawn”.

Ms Zeure for the defendant did not make any submissions on that

legal point. The defendant did not seek leave of the court to withdraw the admissions it made as provided for in the proviso to subs (4) of s 36 of the Civil Evidence Act. Indeed no attempt was made to amend the joint pre-trial conference memorandum.

It is therefore mysterious that the defendant led evidence which had the effect of withdrawing a confessionary pleading without attempting to amend such pleading and ultimately without any leave of the court. No explanation whatsoever was given for doing so. Even if I was inclined to do so, I an unable to exercise the discretion reposed upon me to allow the defendant to withdraw the admission because, as stated earlier, I have not been requested to do so.

The admissions made by the defendant amount to a confessionary pleading and as such they are taken for granted making it unnecessary for the plaintiff to prove them. Adler v Elliot 1988(2) ZLR 283(S) at 288C; Copper Trading Co (Pvt) Ltd v City of Bulawayo 1992(1) ZLR 134(S) at 143H-144B and 144G.

Having come to that conclusion, it means that the testimony of Matande in which he attempted to renege from the admissions made at the pre-trial conference was an exercise in futility. The defendant is bound by those admissions.

There is a related issue, which is the attempt by the defendant to revive a claim in reconvention which it abandoned at the pre-trial conference.

Ms Zeure, for the defendant submitted that the defendant did not abandon the claim in reconvention for rates in the sum of US$7 338-00. I have already stated that it was not competent for the defendant to file the claim in reconvention in violation of r 121(1) of the High Court rules.

In addition to that when the defendant attested to a joint pre-trial conference minute in which the only issue for trial was set out as whether the plaintiff is entitled to damages in the sum claimed, it was effectively abandoning its counter claim and it is bound by that unless it had applied to amend the minute. It did not. Pre-trial conference proceedings are part of the process of resolving the dispute between parties. It would be a sad day indeed if parties to an action were to be allowed to flip flop and agree on issues at the pre-trial conference and then, without more, just reinstate settled issues at the trial. That would make nonsense of the very important and useful process of curtailment of proceedings.

In casu, the parties entered into an agreement for the purchase and sale of land in instalments. There is a valid admission that there was no notice given to the plaintiff to rectify the breach and that the Contractual Penalties Act applies to the relationship between the parties.

Section 8 of the Contractual Penalties Act, which the defendant has admitted applies to this case, provides:-

“8 Restriction of Seller’s Rights

No seller under an instalment sale of land may, on account of any breach of contract by the purchaser __

enforce a penalty stipulation or a provision for the accelerated payment of the purchase price; or

terminate the contract; or

institute any proceedings for damages;

unless he has given notice in terms of subs (2) and the period of the notice has expired without the breach being remedied, rectified or discontinued, as the case may be.

Notice for the purposes of subs (1) shall ------

be given in writing to the purchaser; and

advise the purchaser of the breach concerned; and

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 ----

The period fixed for the purpose in the instalment sale of the land concerned; or

thirty days

whichever is the longer period.

Without derogation from s 40 of the Interpretation Act [Cap 1:01], a notice shall be regarded as having been duly given to the purchaser for the purposes of subs(1) ---

if it has been delivered to the purchaser personally or to an agent chosen by the purchaser for the purpose of receiving such notices; or

if it has been posted by registered post to the address chosen by the purchaser for the delivery of correspondence or legal documents relating to the land concerned or, in the absence thereof, to the purchaser’s usual or last known place of residence or business”.

In the present case, there was a wholesale failure to comply with the foregoing provisions as no notice to rectify the breach was given to the plaintiff. For that reason the defendant’s purported cancellation of the sale was a nullity. It would have been proper to direct the defendant to return the land to the plaintiff and if still persistent to enforce the penalty stipulation in the agreement, to comply with the law. However, as the evidence has shown, the defendant has made it impossible for such an order to be made by alienating the land in question, it having been re-sold to a third party.

It is for that reason that the plaintiff amended her claim to seek contractual damages in the sum of US$19 500-00 which she claims is what she requires to replace the stand unlawfully taken from her. The plaintiff is entitled to a stand, comparable to stand 1279 Hintonvile Chegutu, which she would have had if the defendant had not unlawfully terminated the sale agreement.

According to the learned author R.H. Christie; Business Law in Zimbabwe 2nd ed, Juta & Co Ltd, 1998 at p 124.

“Damages for breach of contract are intended to place the innocent party in the position he would have occupied had the contract been performed, so far as that can be done by the payment of money, and without undue hardship to the defaulting party. Damages for breach are therefore not calculated in the same way as damages for delict, which are intended to compensate the innocent party for what he has lost rather than what he should have gained”.

The question which arises is; how much does the plaintiff require in monetary terms to secure a 1950 square metre stand comparable to stand 1279 Hintonvile Chegutu? The evidence that is available is that only the defendant sells vacant stands in Chegutu. Private individuals are not allowed to sell vacant stands they would have obtained from the defendant as that would amount to a breach of the agreement with the defendant.

The plaintiff testified that the sum of $19 500-00 she is claiming was arrived at using the figure of US$ 10-00 per square metre obtained from the defendant. This was disputed by the town planner whose evidence was to the effect that the value in question represents the punitive figures used to recover arrear rates from defaulting home seekers. The town planner is the author of the document the plaintiff seeks to rely on.

I found Douglas Chimande to be an extremely unreliable witness whose main concern was to hedge the defendant from liability even when it was not possible to do so. It is therefore difficult to place any weight on his figures especially as he disowned those figures in his evidence and flatly refused to release the figures the defendant is now using to sell land.

Happily though we have the evidence of the valuer Alois Mutyanda whose evidence was not impeached at all and can be relied upon in determining the replacement value of the stand. That witness conducted inquiries from both the Municipality and other independent valuers. He uncovered that the defendant is currently selling residential land at US$5-00 per square metre. He then came up with the market value of US$13 650-00 having regard to all the other relevant factors. I believe him.

In my view, it matters not what one calls these damages whether they represent the market value of the stand in question or the replacement value. What is clear from the evidence which I have accepted is that the defendant currently sells vacant land at the rate estimated by a qualified valuer. For the plaintiff to secure that land in lieu of that which was improperly taken from her, she has to approach the same source, the defendant, as the sole seller of such land and purchase it at that price.

I conclude therefore that on a balance of probabilities, the plaintiff has proved that she is entitled to damages in the sum of $13 650-00 arising out of the breach of the agreement of sale committed by the defendant.

In the result I make the following order, that:-

Judgment be and is hereby entered against the defendant in favour of the plaintiff in the sum of US$13 650-00 in respect of damages for breach of contract.

Interest on the sum of $13 650-00 at the rate of 5% per annum from the date of judgment to date of payment.

Costs of suit on the ordinary scale.

IEG Musimbe & Partners, plaintiff’s legal practitioners

Warara & Associates, defendant’s legal practitioners