Batandi Michael Mpofu N.O v Felix Dzumbunu and Others

The plaintiff (a liquidator) entered into an agreement of sale with the 1st defendant in November 2014 for Stand 6505 Bulawayo for USD105,000. The 1st defendant paid a deposit of USD37,000 by March 2015 but breached the agreement by failing to pay the balance of USD68,000 in the prescribed manner. A notice of termination was served on the 1st defendant's worker at his address on 12 August 2015, giving him 30 days to remedy the breach. The 1st defendant failed to comply, and the agreement was cancelled on 4 September 2015. The plaintiff obtained a default judgment on 19 May 2017 confirming the cancellation and evicting the 1st defendant. While this judgment was extant, on 14 March 2018, the plaintiff entered into a second agreement of sale with the 2nd defendant for USD130,000, which the 2nd defendant paid in full. The default judgment was later rescinded on 22 November 2018. The 1st defendant then attempted to remedy his breach by depositing USD68,000 into the plaintiff's legal practitioners' trust account, which was rejected. The parties agreed to a special case for determination of key legal issues.

• Whether the initial agreement of sale between the plaintiff and 1st defendant was lawfully terminated under the Contractual Penalties Act
• Whether service of the notice of termination by leaving it with the 1st defendant's worker constituted valid service under section 8(3) of the Contractual Penalties Act read with section 40(2) of the Interpretation Act
• Whether there existed any legal impediment to the conclusion of the second agreement of sale between the plaintiff and 2nd defendant at the material time
• To whom should the property be transferred
• Whether the 1st defendant is entitled to specific performance after breaching the agreement
• Whether the plaintiff is entitled to occupational damages and eviction

i. The cancellation of the agreement of sale between plaintiff and 1st defendant in respect of Stand 6505 Bulawayo Township of Stand 6541A Bulawayo Township is confirmed. ii. The plaintiff shall transfer the property to the 2nd defendant within 30 days of the order. iii. The 1st defendant shall pay the costs of suit for the plaintiff and 2nd defendant on a party and party scale.

1. Service of a notice of termination under section 8 of the Contractual Penalties Act by leaving it with a person at the purchaser's usual place of abode constitutes valid service under section 8(3) read with section 40(2)(c) of the Interpretation Act, provided the service is effective. 2. The purpose of section 8(3) of the Contractual Penalties Act is to provide for effective service of written notice of breach, not to impose strict formalities that defeat actual notice. 3. A party who has breached an instalment sale agreement is not entitled to the discretionary remedy of specific performance. 4. Where an agreement of sale is lawfully cancelled in accordance with the Contractual Penalties Act, and a court judgment confirming the cancellation is extant at the time of a subsequent sale, there is no legal impediment to the subsequent sale, even if the judgment is later rescinded. 5. Parties to a special case are bound by the statement of agreed facts and cannot seek to contradict or re-open the agreed factual position without withdrawing the concession on valid grounds such as justus error, fraud, or mistake. 6. Occupational damages cannot be claimed under a sale agreement as such an agreement is not a lease agreement.

The court observed that it would be unthinkable for a legal practitioner to append his signature to a statement of agreed facts to be used in court proceedings without having had sight of all supporting documents, emphasizing the professional responsibility of legal practitioners. The court also noted that the 1st defendant's concern about the validity of the second agreement was not relevant to his own case, which turned solely on whether he breached his agreement and whether it was lawfully cancelled. The court emphasized that a party cannot, after breach of an agreement, make a unilateral payment hoping to remedy the breach without the other party's acceptance.

This case provides important guidance on the interpretation and application of the Contractual Penalties Act in instalment sales of land in Zimbabwe. It clarifies that service of a notice of termination by leaving it with a person at the purchaser's usual place of abode constitutes valid service under section 8(3) read with section 40(2)(c) of the Interpretation Act, emphasizing that the legislation's purpose is to ensure effective service rather than strict formality. The case confirms that specific performance is a discretionary remedy not available to a party who has breached a contract. It also establishes that where a sale agreement is lawfully cancelled and subsequently a new sale is concluded while a judgment confirming cancellation is extant, this does not constitute a double sale, and the subsequent purchaser who performs their obligations is entitled to transfer. The judgment reinforces the principle that parties are bound by agreed facts in a special case procedure and cannot later seek to renege from or contradict such agreed facts without proper legal grounds.