Everson Zhou v Saltana Enterprises (Pvt) Limited and Others

The applicant purchased stand number 7895 Belvedere West, Harare from the first respondent on 7 September 2006 for Z$3,991,650. In October 2015, the applicant discovered that the fourth respondent had taken occupation of the stand, which the second respondent had sold to her. The fifth respondent later joined the proceedings, revealing that he had also purchased the same stand from the first respondent on 26 July 2002 for Z$1,318,125. The first respondent had therefore sold the same stand to multiple purchasers at different times. The applicant had paid $2,500 towards servicing the stand and had paid levies and rates to the City of Harare. Neither the applicant nor the fifth respondent had asserted their rights to the stand for years (2006-2015 and 2002-2015 respectively), both waiting for the first respondent to service the land.

• Whether the principle of sanctity of contracts requires that the first purchaser (fifth respondent) should be preferred over the second purchaser (applicant)
• Whether special circumstances exist to justify departing from the general rule favouring the first purchaser
• Whether the balance of equities favours the applicant over the fifth respondent
• Whether the sale to the applicant was valid despite the first respondent being under judicial management at the time

1. The fifth respondent's counter-application was dismissed. 2. The applicant was declared the owner of stand No. 7895 Belvedere West, Harare. 3. The respondents were interdicted from interfering with the applicant's ownership, occupation or possession of the stand. 4. The first respondent and its Director Davie Fukwa Mutingwende were ordered to pay, jointly and severally, the costs of the application and the counter-application on a higher scale.

Where two innocent purchasers have competing claims to the same property and neither has obtained transfer, the general principle is that the first purchaser should be preferred in accordance with the sanctity of contracts principle. However, this principle may be departed from where special circumstances exist that affect the balance of equities in favour of the second purchaser. In determining the balance of equities, the court will consider: (1) the extent to which each party asserted their rights; (2) additional payments and expenses incurred; (3) the hardship and damage suffered by each party; and (4) which party is likely to suffer greater damage. The person who is likely to be most damaged and who has borne the heavier burden should be assisted by the court.

The court observed that the first respondent and its director Mr Mutingwende engaged in conduct that duped unsuspecting purchasers by concluding multiple sales of one and the same stand. The court noted that had they conducted themselves in a candid and honest manner, the litigation would not have been necessary, and they put everyone to unnecessary expense and wasted the court's time. The court also remarked that the fifth respondent was 'only but trying his luck' when he successfully applied for joinder, but unfortunately his luck left him as soon as he had caught up with it.

This case is significant in Zimbabwean property law as it clarifies the application of the principle of competing claims by multiple purchasers of the same property. It confirms that while the general rule favours the first purchaser (sanctity of contracts principle), courts will consider the balance of equities and may depart from this rule where special circumstances exist. The case demonstrates that factors such as active assertion of rights, additional payments made, hardship endured, and relative damage suffered will be weighed by the court. It also serves as a warning against vendors who engage in fraudulent multiple sales of the same property, as evidenced by the punitive costs order on a higher scale against the first respondent and its director.