Jane Bester Phiri v Patson Nawasha

In December 2007, the respondent, acting on behalf of Joseph Tsamwayi (executor of the estate of the late Patrick Tsamwayi), entered into an agreement of sale with the applicant for the purchase of stand number 8 Dziva, Dombotombo, Marondera for Z$18 billion. The applicant paid the full purchase price for a house (brick under asbestos, comprising two bedrooms, kitchen, lounge and toilet), with the money deposited into Pricassons (Pvt) Ltd's trust account. The respondent was a co-director of Pricassons Investments (Pvt) Ltd and acted as agent and guarantor in the transaction. The respondent failed to transfer the property, admitting he had sold a deceased estate house with a dispute - the minor children of the deceased had refused to approve the sale. On 4 July 2008, the parties signed a memorandum of understanding wherein the respondent undertook to deliver an alternative house within 14 days. Despite this undertaking and a further letter dated 26 July 2008 reiterating his intention to honour the undertaking, the respondent failed to deliver any property. The purchase price remained in the respondent's trust account for approximately 13 months until the Zimbabwe dollar currency became moribund.

• Whether there was a material dispute of fact requiring viva voce evidence
• Whether supervening impossibility (currency devaluation) constituted a valid defence to performance
• Whether the non-joinder of the principal debtor (Joseph Tsamwayi) was fatal to the application
• Whether the respondent could be held personally liable as agent and guarantor under clause 11 of the agreement
• Whether specific performance should be granted in the circumstances

Judgment entered for the applicant. The respondent was ordered to deliver and register a four-roomed house comprising two bedrooms, kitchen, dining room and a toilet in either Nyameni, Dombotombo, Rujeko or Rusike high density suburbs of Marondera within thirty (30) working days of the order. In the event of the respondent's failure to perform, the applicant was empowered to execute the order against the respondent's property. The respondent was ordered to pay costs of suit on the ordinary scale.

Where an agent in a contract of sale undertakes liability as guarantor and surety, agreeing to be "jointly responsible" with the seller for any material breach, the agent becomes a co-principal debtor who tacitly renounces the ordinary benefits available to a surety (such as excussion and division) and becomes jointly and severally liable with the principal debtor. The creditor/purchaser is entitled to proceed against either party at her discretion without being required to join both parties to the suit. Where a party seeking specific performance has fully performed their contractual obligations and the defaulting party has not raised or proven impossibility of performance, the court will exercise its discretion to grant specific performance unless it would produce injustice or operate unreasonably harshly on the defendant. Denying specific performance where the innocent party has paid the purchase price in full and the defaulting party retained those funds would offend against equity and justice, particularly where currency devaluation has rendered damages an inadequate remedy.

The court observed that the statements of account attached to the respondent's opposing affidavit were of no probative value as they only showed the initial deposit and ran only to 29 February 2008, failing to prove that the purchase price was still locked in the trust account by February 2009 when the new currency regime was introduced. The court noted that the respondent "could have and must have used it for his benefit." The court also commented that public policy considerations supported granting specific performance in these circumstances, as it would be inequitable to allow the respondent to benefit from retaining the applicant's money while avoiding his contractual obligations.

This case is significant for its application of the law of suretyship and agency in the context of property transactions. It clarifies that an agent who guarantees performance and holds himself out as a co-principal debtor renounces the benefit of excussion and can be sued independently without joining the principal debtor. The case also demonstrates the court's approach to granting specific performance in circumstances involving currency devaluation, emphasizing that equity and justice require specific performance where the innocent party has fully performed and denial of the remedy would cause grave injustice. It reinforces that the onus lies on the defendant to prove impossibility of performance, and failure to do so will result in specific performance being granted where equitable.