Hamilton Property Holdings Limited v Estate Late Cyprian Musarurwa and Joseph Machipisa and Registrar of Deeds N.O. and The Master of the High Court

### Preamble
1
HH 81-21
HC 9593/19
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HAMILTON PROPERTY HOLDINGS LIMITED

versus

ESTATE LATE CYPRIAN MUSARURWA

and

JOSEPH MACHIPISA

and

REGISTRAR OF DEEDS N.O.

and

THE MASTER OF THE HIGH COURT

HIGH COURT OF ZIMBABWE

MANGOTA J

HARARE, 14 September 2020 & 9 March 2021

Opposed Application

L Uriri, for the applicant

N Piki, for the respondent

MANGOTA J: I heard this matter on 14 September, 2020. I delivered an ex tempore judgment in which I granted the applicant’s prayer.

On 2 October, 2020 the first and second respondents wrote to the High Court registrar. They requested reasons for my decision. They indicated that they wanted to appeal my decision. The reasons are these:

The applicant purchased from one Cyprian Musarurwa (“Musarurwa”), who is now late, a certain piece of land which is situated in the district of Salisbury called stand 282 Chadcombe Township of Stand 221B Chadcombe Township (“the property”). It is 4109 square metres in extent and is held under deed of transfer number 8332/89

The sale of the property took place on 1 October, 2009. It occurred in terms of a written agreement which the applicant and Musarurwa signed on the mentioned date.

The applicant paid full purchase price for the property which payment Musarurwa acknowledged in writing, He signed the power of attorney to pass transfer and he made the seller’s declaration. He surrendered the title deed of the property to the applicant.

Before the applicant took title of the property, Musarurwa subdivided the same. He completed the subdivision through permit number SD/ER/135/13 and he sold a portion of the property to the second respondent.

The application is two-fold. It is one for a declaratur as well as for specific performance. The applicant seeks an order which is to the effect that permit No. SD/ER/135/13 in terms of which the property was subdivided into two portions one of which Musarurwa sold to the second respondent be declared to be null and void. It also moves for an order which compels Musarurwa or the late’s estate to transfer the entire property to it.

The first and second respondents oppose the application. The third and fourth respondents who are cited in their respective official capacities do not oppose the application. My assumption is that they intend to abide by my decision.

The status of the deponent of the first respondent’s opposing affidavit remains questionable. The deponent, one Florence Musarurwa, alleges that she is the executor of the estate of the late Cyprian Musarurwa. She states, in the same breadth, that the fourth respondent has not, as at the time of the deposition, given her the letters of administration.

The question which begs the answer is whether or not her opposing affidavit is properly filed. She produces no proof which shows that she is the executor of the estate of the deceased. In the absence of production of the letters of administration, her notice of opposition cannot be regarded as having been properly filed with the court. It, accordingly, remains a matter for anyone’s guess.

I will, however, for purposes of dealing with the merits of this matter, proceed on the assumption that Florence Musarurwa’s opposing affidavit holds albeit that, at law, it does not. She states, in the same, that the applicant did not purchase the property from the late Cyprian Musarurwa. She alleges that the applicant advanced a loan to a company which is known as Curbstone Enterprises (Pvt) Ltd in which Musarurwa and one F J Chinengundu were directors. Musarurwa, she claims, used the property as security for the loan which the applicant advanced to Curbstone Enterprises (Pvt) Ltd.

F J Chinengundu’s supporting affidavit is to an equal effect. He states that the applicant persuaded Musarurwa to sign an agreement of sale of the property and not one for a loan to the company. Musarurwa, according to him, signed the agreement of sale of the property to the applicant. The agreement, he alleges, served as security for the loan which the applicant advanced to Curbstone Enterprises (Pvt) Ltd.

The second respondent pleaded the defence of the innocent purchaser. He states that he should not be adversely affected by what took place between the applicant and Musarurwa. He insists that the balance of convenience favours his position because of special circumstances which he claims exist in his case. The special circumstances which he alleges exist are that he paid capital gains tax, stamp duty, council duty and had applied for transfer of the property to him when the applicant stopped the process. Both respondents moved for dismissal of the application with punitive costs.

That the applicant has a direct and substantial interest in the property which is the subject of this application requires no debate. The agreement of sale which it attached to its founding papers creates some relationship with Musarurwa or the late’s estate. The relationship creates a binding contract in terms of which rights and obligations arise as between the parties.

The first part of the application is anchored on s 14 of the High Court Act. The section confers power upon me to inquire into and determine existing, future or contingent rights or obligations. The requirements of the section are, therefore, complete the moment it is ascertained, as it is, that the applicant and Musarurwa created a contract between them. Personal rights and obligations which the contract created are sufficient for the declaration to be made by the court. The declaration is, however, subject to the findings of the court as regards the substratum of the parties’ main contract.

Where the finding is that the contract was one of sale, a declaration will invariably be made. Where, on the other hand, the finding is that the applicant did not purchase the property of Musarurwa and that the relationship of the parties was something other than that of purchase and sale, a declaration is difficult to make unless the applicant shows that the created relationship has a bearing on the property which is the subject of this application.

However this matter is viewed, a declaration cannot fail to be made. It should be made on the applicant’s averments. It should also be made on the respondents’ pleadings. If, as they allege, the property was used as security for the loan which the applicant advanced to Curbstone Enterprises (Pvt) Ltd, the applicant has a direct and substantial interest in the property. It would not allow any portion of the property to be alienated until the advanced loan has been serviced in full. Any alienation of the property or part of it has the effect of reducing the value of the property with adverse consequences on the part of the applicant. It is for the mentioned reason, if for no other, that the declaration was/is made as prayed for by the applicant.

Whether or not the relationship which the applicant and Musarurwa created is one of sale or one of a loan which was secured by the property of Musarurwa depends, in a large measure, on documentary evidence which the parties filed of record in support of their respective cases. Annexures A, B, C and D which the applicant attached to its founding papers show, in a clear and unambiguous language, that the applicant purchased the property from Musarurwa on 1 October, 2009. The annexures respectively appear at pp 13, 16, 17 and 18 of the record.

Annexure A is the agreement of sale of the property. Its recital reads:

“AND WHEREAS the seller is desirous of selling the said property and the purchaser is desirous 	of purchasing the said property.” (emphasis added)

Annexures B is Musarurwa’s acknowledgment of receipt of the purchase price in the sum of US$21 700 being the purchase price for the property. Annexure C is Musarurwa’s power of attorney to pass transfer of the property to the applicant. Annexure D is Musarurwa’s declaration as seller of the property to the applicant.

No one can, therefore, mistake the contents of the four annexures to refer to anything other than to the contract of purchase and sale which occurred between the applicant, on the one hand, and Musarurwa, on the other. All the requirements for the contract of sale are present in the relationship of the parties. These were aptly stated in Warren Park Trust v Pahwaringira and Ors, HH 39/09 as follows:

“It is trite and a matter of elementary law that the essential elements of a valid contract of sale 	comprise: Agreement (consensus ad idem) as to:

1.	The thing sold (the merx) and

2.	the price of the thing sold (the pretium)

In other words a contract of sale comprises three elements that is to say:

1.	an agreement between the parties to buy and sell.

2.	an agreement on the commodity or thing sold known as the merx

3.	an agreement on the price known as a  pretium.”

The statement of the respondents which is to the effect that Musarurwa obtained a loan from the applicant and used the property as security for the loan cannot hold. Neither Florence Musarurwa nor F J Chinengundu were/are privy to the contract which the applicant and Musarurwa signed on 1 October, 2009. What they deposed to is nothing at all other than hearsay evidence which, as is known, is inadmissible. None of them took part in the negotiations which ripened into the contract which the parties signed. The fact that Chiengundu signed the four annexures as a witness to each does not place him in a position to competently controvert the intention of the applicant and Musarurwa which intention is clear and unambiguous from a reading of the annexures.

Florence Musarurwa and F J Chinengundu tell their story in dribs and drabs. They do not, for instance, show that Curbstone Enterprises (Pvt) Ltd exists. A certificate of registration of the company would have cured the defect. They do not show that the late Musarurwa and F J Chinengundu were directors of Curbstone Enteprises (Pvt) Ltd. An attachment of the company’s CR 14 would have established the stated matter. They do not show that Curbstone Enterprises (Pvt) Ltd, resolved to borrow any money from the applicant. A director’s resolution attached to their notice of opposition would have cleared the air which relates to the alleged loan.

In stating as I am doing, I am not insisting on the point that the respondents should prove their case. It is not their duty to do so. The duty lies on the applicant to prove his case on a balance of probabilities. However, given the strength of the applicant’s case as supported by the annexures which it attached to its founding papers, the respondents were /are duty-bound to rebut such by concrete evidence. This is a fortiori where , as in casu, they tell a story which is diametrically opposed to what the applicant advanced. They should, in my view, have made an effort to show the other side of the story of the property which is the subject of the parties’ dispute. Their failure to rebut the applicant’s incontrovertible evidence throws their case into serious oblivion.

The documents which the respondents attached to their notice of opposition are neither here nor there. They fail to sustain the story which the respondents appear to have hatched. F J Chinengundu, for instance, states that the applicant advanced a loan of US$21 700 to Curbstone Enterprises (Pvt) Ltd. He, however, does not elaborate the relationship of that company to Musarurwa and him. Nor does he explain how the applicant becomes part of the alleged loan as the applicant’s name does not appear in the annexures which he attached to his opposing papers. 	Whilst it appears, from a reading of his Annexure which is at p 48, that some payments were made into the applicant’s Stanbic Bank account No. 0240058501501, the person who made the payments remains unmentioned and, therefore, unknown. There is, accordingly, no proof that Musarurwa made the payments to liquidate the alleged loan as F J Chiengundu seems to suggest. Annexures D1 – D2 which Chinengundu makes mention of in his notice of opposition show some payments which Musarurwa or him made to some unknown person or legal entity. He, in any event, states that Musarurwa signed not a loan agreement but an agreement of sale. The stated matter makes the case of the applicant unassailable. The long and short of the statement of the first and second respondents is that the documents which they attached to their notice of opposition do not support the allegation of a loan having been advanced to Musarurwa. They suffer a very serious disconnect of the alleged advancement of any loan to Musarurwa.

The statement of the first and second respondents which is to the effect that Musarurwa signed an agreement of sale of his property to secure a loan for the operations of Curbstone Enterprises (Pvt) Ltd does not resonate well with the dictum which Innes CJ made in Burger v Central South African Railways 1903 19571 at 578 wherein the learned Chief Justice remarked:

“It is a sound principle of law that a man, when he signs a contract, is taken to be bound by the 	ordinary meaning and effect of the words which appear over his signature” (emphasis added)

The first respondent is, on the basis of the above – cited dictum, bound by the contract which Musarurwa signed. It cannot shake itself off it by claiming  as Chinengundu is bidding on its behalf.

Clause 10 of the contract is relevant. It reads:

“THE parties hereto acknowledge that this agreement constitutes the entire contact between them 	and no terms, conditions, stipulations, warranties or representations whatsoever have been made, 	expressly or by implication by either party or his agent other than those specifically incorporated 	herein. Any alterations or changes to this contract shall be made in writing and signed by both 	parties.”

The clause, it is evident, speaks to the completeness of the contract. The contract, therefore, excludes, by clause 10, the statement of the first and second respondents. It is in sync with what Watermayer JA stated in Union Government v Vianini Fero Congrete Pipes (Pty) Ltd 1941 AD 43 at p 47 when he said:

“This court has accepted the rule that when a contract has been reduced to writing, the writing is , 	in general regarded as the exclusive memorial of the transaction and, in a  suit between, the parties, 	no evidence to prove its terms may be given save the document or secondary evidence of its 	contents nor may the contents of such a document be contradicted, altered, added to or varied by 		parole evidence “ (emphasis added)

Manzunzu J elaborated on the meaning and import of the parole evidence rule in a clear and unambiguous manner. The remarks which the learned judge made in Chirombo v Mutamburo. HH 42/20 are relevant. He said:

“The parole evidence rule is a principle that preserves integrity of written documents. The rule 	applies to integrated contracts where parties acknowledge in writing that the document or statement 	is the complete and  exclusive declaration of their agreement.”

The statement of the first and second respondents cannot survive the doctrine of quasi- mutual absent which Lord Blackburn was pleased to make as far back as 1871 when the learned Lord Justice stated in Smith v Hughes (1871) CR 6 and 13 597 – 60 that:

“If whatever a man’s real intention may be, he so conducts himself that a reasonable man would 	believe that he was assenting to the terms proposed by the other party, and that other party upon 	that belief enters into the contract with him, the man thus conducting himself would be equally 	bound as if he had intended to agree to the other party’s terms.”

Musarurwa, it is evident, led the applicant to believe that he was assenting to the terms of the contract of sale. He did so notwithstanding his apparently real intention which the first and second respondents are stating in casu. He cannot be heard to state, at this eleventh hour, that the contract which he signed with the applicant was/is one of a loan which he secured by the property. He is, in fact, bound as if he had intended to agree to the applicant’s terms.

The applicant purchased the property in October, 2009. The second respondent purchased a portion of the property on a date which he does not state but after the applicant’s purchase of the same.

Precedent shows that the case of the first purchaser is stronger at law than that of the subsequent purchaser. Reference is made in the mentioned regard to the dictum of McNally JA who states in Guga v Moyo and others, 2000 CZ ZLR 458 at 459 that:

“The basic rule in double sales where transfer has not been passed to either party is that the first 	purchaser should succeed. The first in time is stronger in law. The second purchaser is left with a 	claim for damages from the seller, which is usually small comfort. But the rule applies only in the 	absence of special circumstances affecting the balance of equities.”

It is common cause that transfer has not yet taken place. Neither the applicant nor the second respondent has taken title of the property. Going by the generally accepted position, therefore, the applicant should, all things being equal, succeed. Its contract of sale of the property with Musarurwa is earlier in time than the second respondent’s contract of sale of a portion of the property. It is the first in time and is, therefore, stronger in law.

The second respondent places reliance on the exception which McNally JA made in the Guga v Moyo case. He alleges that special circumstances exist in his case. He claims that the same comprise his payment of capital gains tax, stamp duty and council duty.

His claim, however, remains in the form of an unsubstantiated statement. He produced no evidence of what he alleges he paid. His case, therefore, remains where he left it when he failed to show the existence of special circumstances which he seeks to rely upon.

The applicant proved its case on a balance of probabilities. It showed that the subdivision of the property should be nullified and the entire property be transferred to it. The application is, in the result, granted as prayed in the draft.

Mushoriwa Pasi Corporate Attorneys, plaintiff’s legal practitioners

Chadyiwa and Associates, respondents’ legal practitioners