Esther Gandawa v Joshua Gopoza

On 13 November 2018, the plaintiff and defendant entered into an agreement of sale for immovable property number 2657 Aspindale Gated Community, Harare, measuring 200 square metres, at a purchase price of US$45,000. The property was registered in the name of Marimba Industrial Properties Limited. Plaintiff paid an initial deposit of US$25,000 in cash and was to pay the balance of US$20,000 over eight months via bank transfer. She was given keys to the property. Three days later, on 16 November 2018, the defendant sold the same property (number 2657) to Fanuel Kapanje for US$140,000 through a different agent. The plaintiff paid the full purchase price (the balance in RTGS on a 1:1 basis as required by law at the time). When she discovered the double sale, she instituted legal proceedings. By judgment in HC 221/21 (case number HC 4826/20), the property was awarded to Fanuel Kapanje, and plaintiff lost the property. Plaintiff incurred legal fees of US$6,500 in that litigation. The defendant claimed he sold stand 2659 to plaintiff (not 2657) and that there was an error in the agreement, seeking rectification.

• Whether the defendant committed fraud in regard to the sale of the immovable property in question
• Whether the immovable property sold by the defendant and bought by the plaintiff was stand 2659 or stand 2657
• Whether the plaintiff committed a breach of the agreement of sale
• Whether the defendant committed a breach of the agreement of sale and in what respect
• Whether the plaintiff suffered damages by reason of the defendant's breach of contract and the quantum of damages
• Whether the defendant was liable for the legal fees incurred by the plaintiff in litigation arising from the double sale

1. Defendant to pay plaintiff US$65,000 (or lawful Zimbabwe dollar equivalent at date of payment) being reasonable cost of replacing the property at 2657 Aspindale Gated Community, Harare, measuring 200 square metres. 2. Defendant to pay plaintiff US$6,500 (or lawful Zimbabwe dollar equivalent at date of payment) being legal fees expended in case HC 4826/20. 3. Interest at the prescribed rate from date of judgment to date of full payment. 4. Defendant to bear costs of suit on legal practitioner and client scale.

The binding legal principles established are: (1) The caveat subscriptor rule binds a party to a contract by their signature, whether or not they have read or understood it, and a party who signs an agreement after reading it without objection cannot later claim error or different terms. (2) A seller who double-sells immovable property while knowing of an existing valid agreement commits fraud. (3) Damages for breach of contract are intended to place the innocent party in the position they would have occupied had the contract been performed, so far as can be done by payment of money. (4) In assessing damages for breach of a property sale agreement, the court may consider comparable sales of similar properties in determining reasonable replacement cost, rather than automatically awarding the highest price obtained in a subsequent sale. (5) A party who commits fraudulent breach of contract is liable for legal fees reasonably incurred by the innocent party in litigation necessitated by that breach. (6) Obligations incurred in US dollars before February 2019 could be discharged in RTGS at a 1:1 ratio pursuant to Finance Act No. 2/2019, and such payment constitutes proper performance.

The court observed that the matter could have been settled amicably without need for trial, and specifically noted that the defendant's intransigence on possible settlement issues led to the matter being referred to trial. This observation influenced the court's decision to award costs on the higher attorney-client scale. The court also made an observation about defendant's failure to call his wife as a witness to support his version of events, drawing an adverse inference from this omission. The court commented on the implausibility of the defendant's claim that the sale price to Kapanje was in RTGS rather than US dollars, noting "tough luck" for defendant if he felt short-changed by the change in law regarding currency, as he could not be allowed to revert to a different purchase price. The judge also remarked on the defendant's failure to file a response in the earlier case HC 4826/20.

This case is significant in Zimbabwean contract and property law for several reasons: (1) It reinforces the application of the caveat subscriptor rule, holding parties strictly to their signed agreements regardless of claimed mistakes or misunderstandings. (2) It establishes clear principles for dealing with double sales of immovable property and fraudulent conduct by sellers. (3) It clarifies the measure of damages for breach of property sale agreements, balancing the expectation interest principle with reasonableness and comparable market values. (4) It addresses the application of Finance Act No. 2/2019 regarding currency obligations incurred before February 2019, confirming the 1:1 RTGS to US dollar conversion ratio. (5) It confirms that legal fees incurred as a direct result of a defendant's fraudulent breach are recoverable as damages. (6) The award of costs on attorney-client scale reflects the court's view on defendant's bad faith and intransigence in refusing settlement.