Kenneth Charles Greebe and Sheila Greebe v Famaps Investments (Private) Limited and William Zvinavashe

The applicants were registered owners of all shares in Turnpike Service Station (Pvt) Limited and owned a residential property in Norton. The second respondent, managing director of the first respondent, offered to purchase the shares for R3,000,000 and the property with contents and vehicles for R1,140,000, warranting he had funds lawfully held outside Zimbabwe. Both agreements were conditional upon payment by 30 November 2002. The second respondent was given possession based on undertakings to pay. He tendered a Lloyds Bank cheque for $600,000 which was dishonoured. Despite various promises, only R24,000 and Z$150,000 were paid. The applicants' legal practitioners notified the respondents that unless full payment was made by 11 June 2003, the agreements would be treated as void. The respondents failed to pay and claimed the agreements transferred rights to them, giving them only personal rights to claim the purchase price. The respondents also argued the agreements were illegal under section 11 of the Exchange Control Regulations, 1996, as no prior authority was obtained to make payment outside Zimbabwe.

• Whether a supplementary opposing affidavit filed without leave of court should be admitted
• Whether the agreements of sale contravened section 11 of the Exchange Control Regulations, 1996
• Whether the court should enforce or grant relief in respect of agreements tainted with illegality
• Whether the par delictum rule should be relaxed to prevent unjust enrichment
• Whether the applicants were entitled to return of possession of the properties and assets

1. The agreements of sale dated 22 November 2002 were declared to be of no force or effect. 2. The respondents were ordered to return to the applicants within seven days possession of Turnpike Service Station and its contents, stand 42 and its contents, the Honda motor vehicle registration number 721-856 G and Isuzu 280 D Twincab registration number 785-755 F, failing which the Deputy Sheriff was authorized to evict them and recover the contents and vehicles. 3. Each party to bear its own costs.

Where a contract is illegal due to contravention of Exchange Control Regulations but one party has taken possession of property without paying the agreed consideration, the court may relax the par delictum rule and grant restitutionary relief to prevent unjust enrichment. The court may look at an illegal agreement not to enforce it, but to determine whether justice requires granting relief for return of property delivered under it. Where the party in possession warranted they had funds lawfully held externally and public policy is not foreseeably affected by granting relief, the court should do justice between the parties rather than allow the wrongdoer to benefit from retaining possession without payment. A supplementary opposing affidavit filed without leave of court and without proper justification is inadmissible.

The court expressed that even if it is accepted that the agreements contravene section 11 of the Exchange Control Regulations, the facts called for relaxation of the par delictum rule as refusal to grant the application would almost be akin to putting a premium on deceit. The court noted its misgivings about paragraph 4 of the applicants' draft order, though counsel indicated he was not persisting with it. The court observed that each party should bear its own costs as the agreements were tainted with illegality, departing from the usual principle that costs follow the event.

This case is significant in Zimbabwean jurisprudence as it demonstrates the application of the principle that courts may relax the par delictum rule (in pari delicto potior est conditio possidentis) to prevent unjust enrichment where contracts are tainted with illegality. It illustrates that even where agreements contravene Exchange Control Regulations, courts will grant restitutionary relief where one party has taken possession of property without payment and would otherwise be unjustly enriched. The case balances the public policy against enforcing illegal contracts with the public policy of doing simple justice between parties and preventing one party from benefiting from their own wrongdoing. It also affirms principles regarding admissibility of supplementary affidavits filed without leave of court.