James Campion Mutetwa v Barrie James Clarke Dixon and Others

In January 2006, the applicant and first respondent entered into a written agreement of sale for immovable property (Stand 584 Greystone Park) for Z$400 million, payable within 5 working days, failing which the agreement would be null and void. The applicant did not pay within the stipulated period. The parties then verbally agreed to convert the purchase price to US$120,000 payable into an offshore Channel Islands bank account. The applicant paid US$30,000 and estate agent commission of Z$30 million but failed to pay the balance. The first respondent demanded payment in foreign currency but the applicant tendered local currency. On 22 February 2007, the estate agency cancelled the agreement alleging breach. The first respondent subsequently sold the property to the Late Samuel Mushaninga and the Late Salome Kudzayi Chisvo (second purchasers), who took occupation. The applicant obtained an interdict restraining transfer to the second purchasers and in July 2009 brought this application seeking specific performance and transfer of the property against payment of Z$370 million.

• Whether the applicant was entitled to specific performance of the written agreement of sale
• Whether the written agreement was binding between the parties or had been superseded by the subsequent verbal arrangement
• Whether the applicant was in breach of the written agreement by failing to pay within the stipulated 5-day period
• Whether the court should exercise its discretion to grant specific performance in circumstances where the purchase price had been eroded by inflation
• The application of the law relating to double sales where transfer has not been passed to either purchaser
• Whether the second and third respondents had locus standi to challenge the validity of the contract

The application was dismissed with costs against the applicant.

Specific performance is a discretionary remedy that requires the applicant to establish a clear, valid and binding contract. A court will refuse specific performance where: (1) the contract relied upon was concluded without the necessary animus contractandi and was merely a sham to clothe an illegal transaction with legality; (2) the applicant is in material breach of an essential term of the contract, particularly where breach causes the contract to lapse ipso facto; (3) granting the order would result in manifest injustice, such as where currency devaluation and hyperinflation have rendered the contract price valueless, allowing a party to obtain valuable property for virtually nothing. An agreement to trade in foreign currency without the approval of exchange control authorities is tainted with illegality and cannot be enforced. In cases of double sales where transfer has not been passed to either purchaser, the first purchaser can only obtain relief if entitled to specific performance of the contract.

The court raised but did not decide the issue of whether service on the first respondent through one Violet Tanda at the disputed property was proper service, given that the first respondent had left the country and the second purchasers' families were in occupation. The court noted this would need to be determined in another forum before an order could be made against the first respondent. The court also commented that the applicant's use of the term "locus standi" in challenging the second and third respondents' standing to dispute the contract was misplaced - the issue was not their standing (as they had an interest to protect and had been cited by the applicant) but rather the weight to be attached to their evidence regarding matters to which they were not close. The court observed that in any event, the applicant's breach of the agreement was self-confessed, making the respondents' evidence on this point unnecessary to the decision.

This case is significant for its application of principles relating to double sales of immovable property in Zimbabwe and the exercise of judicial discretion in granting specific performance. It reinforces that specific performance is a discretionary remedy that will be refused where enforcement would result in manifest injustice, particularly in the context of hyperinflation and currency devaluation. The case also illustrates the principle that parties must demonstrate a clear, valid and binding contract before seeking specific performance, and that courts will look beyond the written form to determine the true agreement between parties. The judgment provides guidance on the law of double sales where transfer has not been passed to either purchaser, following the principles established in Crundall Brothers (Pvt) Ltd v Lazarus NO & Anor 1991 (2) ZLR 125 (S).