On 16 July 1998, Charuma purchased property from Preston for $2,500,000, payable by deposit and instalments. When Charuma failed to pay the second instalment on time, Preston purported to cancel the sale after giving 14 days' notice. Charuma filed an urgent application in the High Court challenging the cancellation on the basis that the Contractual Penalties Act required 30 days' notice. Before that application was determined, Preston sold the same property to Njainjai on 1 November 1998 for $1,500,000. Charuma notified Njainjai of its prior claim and pending litigation on 7 December 1998. Njainjai's legal practitioner was fully briefed about the first sale and pending application on 15 December 1998. Despite this knowledge, Preston transferred the property to Njainjai in February 1999. Charuma then applied for a provisional order to set aside the transfer to Njainjai and for a temporary interdict restraining Njainjai from disposing of the property. The High Court dismissed the application, finding no basis for an interdict as the transfer had already occurred.
The appeal was allowed with costs. The order of the High Court was set aside and substituted with an order granting the application in terms of the draft order (granting the provisional order calling upon respondents to show cause why the transfer to Njainjai should not be set aside, and granting the temporary interdict restraining Njainjai from disposing of the property).
1. The requirements for an interdict are: (a) a clear right (or a right prima facie established though open to some doubt); (b) injury actually committed or reasonably apprehended (which need not be irreparable where a clear right is established); and (c) absence of similar protection by any other ordinary remedy. 2. Where an applicant establishes a clear right not open to doubt, it is not necessary to establish irreparable harm. 3. Under the doctrine of notice, where property is sold twice, the second purchaser acquires an indefeasible right only if he had no knowledge of the prior sale at the time of either the sale or transfer. If the second purchaser had knowledge at either date, the first purchaser can recover the property absent special circumstances. The doctrine requires only notice or knowledge of the prior claim, not mala fides or fraud. 4. An appellate court may interfere with the exercise of judicial discretion where the court below acted upon a wrong principle, allowed extraneous or irrelevant matters to affect it, mistook the facts, or failed to take into account relevant considerations.
The Court noted that the balance of convenience is a relevant consideration in interdict applications, where the court weighs the prejudice to the applicant if the interdict is withheld against the prejudice to the respondent if it is granted. The Court observed that these considerations are interrelated rather than individually decisive - the stronger the applicant's prospects of success, the less the need to rely on prejudice. The Court also noted that the main application challenging the cancellation of the first sale agreement had subsequently been successful and Preston's appeal to the Supreme Court had been dismissed, vindicating Charuma's position.
This case is significant in Zimbabwean law (applicable to South African jurisprudence given the common law heritage) for clarifying: (1) the requirements for interdicts, particularly that where a clear right is established, irreparable harm need not be proven; (2) the purpose and proper basis for granting temporary interdicts to preserve the status quo pending determination of main applications; (3) the application of the doctrine of notice in cases of double sales of property, confirming that knowledge (not mala fides) of a prior claim at the time of transfer is sufficient to defeat a second purchaser's claim; and (4) the grounds upon which an appellate court may interfere with the exercise of judicial discretion, including where the court below mistakes the facts or acts on a wrong principle.