Gabroc Enterprises (Pvt) Ltd and National Social Security Authority v Municipality of Chegutu and The Town Clerk (Chegutu) N.O.

In September 2001, the first applicant (Gabroc Enterprises), a land developer, applied to the first respondent (Municipality of Chegutu) to purchase and develop 526 hectares of virgin land in Chegutu for residential stands. The Council approved the application and in October 2001, an agreement was executed and signed by the Executive Mayor and Town Clerk for the sale of the land at a total price of $10,520,000.00, with $1,052,000.00 payable upon signing and the balance within 36 months. The first applicant subsequently decided to cede its rights to the second applicant (National Social Security Authority). The Town Clerk indicated the Municipality would not oppose the cession if full payment was made, which it was. However, in 2017, the first respondent informed the applicants that the cession would be illegal as the land did not exist. The applicants then brought an application seeking a declaration that the agreement of sale and cession were valid and enforceable.

• Whether the agreement between the parties constituted a valid and enforceable agreement for the sale of land under Zimbabwean law
• Whether the transaction complied with the statutory requirements for the disposal of state/municipal land under the Urban Councils Act Chapter 29:15
• Whether the court could enforce an agreement that violated peremptory statutory provisions
• Whether the ex turpi causa rule applied to prevent enforcement of an illegal transaction

The application was dismissed with costs. The court declared that the agreement between the first applicant and the respondents was null and void ab initio and of no force or effect.

An agreement for the disposal of municipal or state land that does not comply with the peremptory provisions of the Urban Councils Act Chapter 29:15 (including publication requirements, objection periods, and ministerial consent) is null and void ab initio and unenforceable. Courts will not enforce illegal agreements or grant relief arising from transactions that deliberately defeat or circumvent statutory requirements. A thing done contrary to the direct prohibition of the law is void and of no effect, and must be regarded as not having been done at all.

The court observed that it was surprising that the second applicant (National Social Security Authority), which administers public funds and is expected to execute this mandate diligently, would invest in such a transaction when simple and cost-effective due diligence could have revealed the illegality. The court suggested that while the second applicant may have recourse at law (presumably against other parties), it could not succeed on the present application. The court also noted that the addendum to the agreement appeared to have been executed irregularly and specifically for the purpose of avoiding legal requirements, which could be argued as being in fraudem legis (in fraud of the law).

This case is significant in Zimbabwean law as it reinforces the principle that statutory requirements for the disposal of state/municipal land are peremptory and must be strictly complied with. It emphasizes that courts will not enforce agreements that contravene statutory provisions, regardless of the parties' intentions or commercial considerations. The case underscores the importance of transparency in the administration of public assets and the application of the ex turpi causa rule to prevent parties from benefiting from their own illegal conduct. It serves as a warning to purchasers and investors (particularly public entities) to conduct proper due diligence when dealing with municipal or state land to ensure statutory compliance.