Martsmart (Private) Limited and Brainchild Properties (Private) Limited v Brenan James Michael De Bruyn and Advance Africa Holdings (Private) Limited and City of Kwekwe

In January 2017, Mr De Bruyn offered to sell Martsmart (first applicant) a 50% share in Stand 7612 Kwekwe Township, which he had purchased from the City of Kwekwe in December 2015, due to financial difficulties. On 27 January 2017, the parties entered into a joint venture agreement to create a special purpose vehicle (Brainchild) for developing the property. On 31 January 2017, Mr De Bruyn sold his remaining 50% share to Martsmart for US$245,000. Brainchild was incorporated in February 2017 as the special purpose vehicle. Martsmart paid Mr De Bruyn US$250,000 and paid the balance of the purchase price (US$429,982) to the City of Kwekwe. Despite full payment, Mr De Bruyn refused to cede his rights. In May 2018, his lawyers claimed the transaction was invalid for lack of written consent from the City. Later, in July 2019, they claimed the property belonged to Advance Africa Holdings. In January 2018, Mr De Bruyn had requested the City to cede the property to Advance Africa, and the City retrospectively amended the 2015 agreement to reflect Advance Africa as the purchaser. The City later acknowledged this was an error.

• Whether the applicants had valid contractual rights to the property based on their agreements with Mr De Bruyn
• Whether Mr De Bruyn could resile from the contract by claiming the property belonged to Advance Africa
• Whether the retrospective amendment of the 2015 agreement to reflect Advance Africa as purchaser was valid
• Whether the corporate veil of Advance Africa should be pierced
• Whether the pre-incorporation contract requirements under the Companies Act were met
• Whether the principle that no one can benefit from their own wrongdoing applied

1. The agreement dated 24 December 2015 between 2nd and 3rd respondents in respect of Stand Number 7612 Kwekwe Township was declared null and void. 2. The 1st and 3rd Respondents were ordered to sign necessary transfer documents to effect cession and registration to the 2nd Applicant within 10 days. 3. The Sheriff of Zimbabwe was authorized to sign the transfer documents if the 1st and 3rd Respondents failed to do so. 4. The 1st and 2nd Respondents were ordered to pay costs on a legal practitioner and client scale.

A party who enters into a valid contract and receives full payment cannot subsequently resile from the contract by retrospectively claiming the property belonged to a different entity, particularly where such claims are not supported by the facts and appear designed to evade contractual obligations. The principle "nemo ex proprio dolo consequitur actionem" (no one maintains an action arising out of his own wrong) and "nemo ex suo delicto meliorem suam conditionem facere potest" (no one can make his position better by his own misdeed) prevent a party from benefiting from their own dishonest conduct. Where a party has fulfilled all contractual obligations and has a legitimate expectation of performance, the court will order specific performance. Respondents in application proceedings are bound by their opposing affidavits and cannot raise new substantive defences for the first time at the hearing that were not pleaded.

The court noted that while pleadings are made for the court and not the court for the pleadings, the discretion to consider issues not explicitly pleaded would not be exercised lightly, particularly where the fundamental facts clearly supported the applicant's case. The court also observed that the purpose of pleadings is to clarify the issues at stake and those which the court must determine, citing Kali v Incorporated General Insurance Ltd 1976 (2) SA 179 (D). The court acknowledged the corporate law arguments regarding pre-incorporation contracts under section 47 of the Companies Act [Chapter 24:03] and section 32 of the Companies and Other Business Entities Act [Chapter 24:31], but found these arguments were not properly pleaded and were not determinative given the clear factual matrix.

This case reinforces important principles in Zimbabwean contract and company law: (1) the binding nature of pleadings in application proceedings; (2) the principle that no one can benefit from their own wrongdoing (nemo ex proprio dolo consequitur actionem); (3) that parties cannot induce mistakes and then rely on them to resile from agreements; (4) the sanctity of contractual obligations and the court's willingness to enforce specific performance; and (5) the impropriety of retrospective amendments to contracts designed to defeat legitimate contractual expectations. The case also demonstrates the court's willingness to reject technical arguments raised for the first time at hearing when not properly pleaded.