In October 2005, the applicants (husband and wife) entered into a written agreement of sale with the respondent for immovable property in Borrowdale, Harare for $4,500,000. The purchase price was to be paid as a deposit of $1 million on the date of agreement and the balance within 21 days. The deposit was not paid on time; $900,000 was paid on 3 November 2005. The parties subsequently agreed to vary the payment terms, with the balance to be paid in 3 installments, the last by 9 December 2005. The first installment ($1 million) due on 25 November was paid on 28 November 2005. The second installment ($1 million) due on 2 December 2005 was only partially paid ($600,000 plus $100,000 held in trust) on 5 December 2005. On 6 December 2005, the respondent purported to cancel the agreement due to non-payment. The applicants paid the outstanding balance in full on 8 December 2005 along with transfer fees, but the respondent refused to effect transfer. The applicants sought an order compelling transfer.
1. The respondent is ordered to take all necessary steps and sign all necessary documents to pass transfer to the applicants of Stand 658 Quinnington Township of Subdivision 6 of Quinnington of Borrowdale, within 14 days of the date of this order, failing which the Deputy Sheriff is empowered and authorized to sign all necessary documents on behalf of the respondent. 2. The respondent is to pay the costs of this application.
Once parties agree that the purchase price of land is to be paid in three or more installments (or a deposit and two or more installments), the agreement becomes an "installment sale of land" under the Conventional Penalties Act [Chapter 9.04] by operation of law, regardless of the initial intention of the parties or when the installment terms were agreed upon. In such cases, section 8 of the Act requires the seller to give the purchaser 30 days notice before cancelling the agreement for breach. A judgment that is purely procedural in nature and does not determine the substantive rights of parties or exhaust the cause of action does not constitute a final and definitive judgment for purposes of res judicata.
The court observed that when considering applications for condonation for late observance of procedural rules prior to default judgment, courts should lean towards granting rather than refusing such applications, though applicants must still satisfy the court that there is good cause to excuse the negligence. The court also noted that the conduct of legal practitioners in closing and archiving a file simply because the other party had not taken steps to set the matter down for six months "borders on the ridiculous". The court distinguished between a subsequent agreement to pay an existing debt by installments (common law position as per Christie) and a contract which as part of the same transaction creates the debt and the method of paying it by installments, but held that the clear provisions of the statute override this common law distinction.
This case is significant in Zimbabwean property and contract law for its interpretation of the Conventional Penalties Act's definition of "installment sale of land". The judgment establishes that the protective provisions of the Act apply based on the objective terms of payment agreed upon, not the subjective initial intention of the parties. It clarifies that when parties vary a cash sale agreement to allow payment in three or more installments, the agreement becomes subject to the Act by operation of law, requiring sellers to provide statutory notice before cancellation. The case also provides guidance on the distinction between procedural judgments and substantive judgments for purposes of res judicata, and reaffirms the factors to be considered when granting condonation for procedural non-compliance.