Jerome Okeke v M Duro and Company (Pvt) Ltd

The plaintiff, a Nigerian national with permanent residence in Zimbabwe, purchased the defendant's rights to Flat no 11 Cranford Court, Harare for $640,000 on 13 July 2001. The property was held under a share certificate system administered by Cranford Court Homeowners Association. After the purchase price was paid, the estate agency requested the association to issue a certificate in the plaintiff's name. The association unanimously refused this request, displaying xenophobic attitudes against foreign nationals. The defendant then cancelled the sale to the plaintiff and sold the property to a Zimbabwean national for $650,000, who was accepted by the association and issued a certificate. The plaintiff issued summons on 24 September 2002, claiming $7.5 billion in damages for breach of contract, representing the replacement value of a similar flat. The plaintiff kept the purchase price (which was held in trust) for about 18 months before withdrawing it.

• Whether the defendant breached the sale agreement by selling the property to a third party after the homeowners association refused to issue a certificate to the plaintiff
• Whether the defendant had an obligation to wait for the plaintiff to compel the association to accept him before cancelling the agreement
• Whether the sale agreement was a conditional contract subject to the approval of the homeowners association
• The nature of rights held under a share certificate system and whether such rights could be transferred without the consent of the association
• Whether refusal by the association to consent to transfer constituted breach of contract by the defendant

The plaintiff's claim was dismissed with costs.

Where property is held under a share certificate system by a homeowners association, a sale of rights to exclusively occupy a flat constitutes a cession of rights rather than a sale of immovable property. Such a sale is impliedly conditional upon the consent of the association to issue a certificate in the purchaser's name. When the association withholds consent, the conditional sale falls through and the seller cannot be held in breach of contract for failing to complete the transaction. The seller has no obligation to compel the association to grant consent, as the seller does not possess such power. The refusal by the association to consent to the cession does not constitute a breach by the seller of its obligations under the sale agreement.

The court made strong obiter comments condemning the "unjustified attack" and "xenophobic tirade of abuse" by the Cranford Court Homeowners Association against foreign nationals, including Nigerians. Makarau J criticized legal practitioners for persistently failing to distinguish between sale and cession of rights in such cases, citing Gomba v Makwarimba and emphasizing that such errors, though common to both parties, reflect poor legal drafting. The court noted that the appointment of conveyancers was unnecessary as there was no freehold title to convey. The judge also expressed disbelief regarding the plaintiff's testimony that he kept money with conveyancers for over a year hoping for ratification despite knowing the property had been sold to a third party, and that he thereafter kept the money "on his person" without investing it.

This case clarifies the legal nature of share certificate property holdings in Zimbabwe and the obligations of parties when selling rights to occupy flats in blocks owned by homeowners associations. It establishes that such transactions involve cession of rights rather than sale of immovable property, and that such sales are impliedly conditional upon the association's consent. The case provides important guidance on the distinction between sale and cession of rights in property transactions, particularly in the context of share certificate systems and suspensive sale agreements. The judgment also serves as a strong judicial condemnation of xenophobic practices by homeowners associations, though the court correctly separated this moral issue from the legal question of contractual breach.