Nenyasha Housing Co-Operative v Sibanda Violine

The applicant, a Cooperative Society registered under the Cooperative Societies Act, sold stand 1072 Merwede Township to the respondent on 28 August 2013 for US$20,000.00, payable in 30 instalments of not less than US$667.00, with final payment due on 7 January 2016. The respondent's payments were intermittent and erratic, paying only US$1,700.00 in the entire 30-month period. The applicant instituted proceedings under HC 9789/17 which it later withdrew after the respondent indicated she wanted to remain bound by the agreement. By 12 January 2018, the respondent had paid only US$3,333.00. On 12 January 2018, the applicant issued a three-month written notice to remedy the breach, served on 8 February 2018 via FedEx courier. The respondent failed to remedy the breach. The respondent had erected a perimeter wall and structures on the stand valued at US$10,000.00. The agreement provided for a 30% cancellation fee in clause 6.2, and clause 6.1 gave the seller the right to cancel if the buyer missed three consecutive monthly payments.

• Whether the notice to remedy the breach was validly served in terms of section 8 of the Contractual Penalties Act [Chapter 8:04]
• Whether delivery of the notice via FedEx courier service constitutes valid personal delivery under section 8(3)(a) of the Act
• Whether the notice was prematurely issued given that there were pending proceedings between the parties
• Whether the applicant was entitled to confirmation of cancellation of the instalment sale agreement
• Whether the respondent was entitled to compensation for improvements made to the property
• Whether the applicant was entitled to levy a 30% cancellation fee

1. Cancellation of the sale agreement dated 28 August 2013 for stand 1072 Merwede Township was confirmed. 2. The respondent and those claiming occupation through her were ordered to vacate the stand within 10 days, failing which the Sheriff was authorized to eject them. 3. The respondent was ordered to remove the perimeter wall and structure within 14 days, failing which the Sheriff was authorized to remove them at the respondent's cost. 4. The applicant was authorized to withhold 30% of instalments payable as cancellation fees from amounts paid by the respondent. 5. The respondent was ordered to pay costs of suit.

1. In instalment sales of land, section 8 of the Contractual Penalties Act requires a seller to give written notice to the purchaser to remedy, rectify or discontinue a breach before terminating the contract or instituting cancellation proceedings. 2. Delivery of a notice to remedy breach via courier service (FedEx) constitutes valid personal delivery under section 8(3)(a) of the Contractual Penalties Act - the section is not limited to registered post and allows for any mode of delivery that achieves the intended purpose of the notice reaching the recipient. 3. Personal service on a purchaser is valid under section 8(3)(a) even where the seller is aware that the purchaser is represented by legal practitioners - there is no bar to personal service in such circumstances. 4. Where a purchaser has materially breached an instalment sale agreement by failing to make required payments and fails to remedy the breach after valid notice, the seller is entitled to confirmation of cancellation. 5. A court must consider all circumstances under section 9 of the Contractual Penalties Act when assessing relief, including any contractually agreed cancellation fees, which will be upheld where the parties have agreed to such terms.

The court observed that possessors or occupiers of property who improve the property retain certain rights in respect of the improvements, including the ius tollendi (the right to remove improvements if this can be done without damage to the land) and entitlement to compensation for improvements. The court noted with approval the principles from Bangure v Gweru City Council 1998 (2) ZLR 396 and Derby Farm (Pvt) Ltd v Stewart Musonza HH 82-2007. The court also commented that where a seller has initiated proceedings for cancellation without first giving notice to remedy breach (in violation of section 8), there is no bar to the seller withdrawing those proceedings and then adopting the correct procedure by issuing the notice first, followed by fresh cancellation proceedings. The court distinguished the case from Saltana Enterprises Pvt Ltd v Ngoni Takundwa & Anor HH 143/17 where no valid notice to remedy breach had been served.

This case is significant in Zimbabwean property and contract law as it clarifies the procedure for cancellation of instalment sale agreements under section 8 of the Contractual Penalties Act [Chapter 8:04]. It establishes important principles regarding: (1) the validity of service through modern courier services (FedEx) as constituting personal delivery under section 8(3)(a); (2) that personal service on a purchaser is valid even where the seller knows the purchaser is legally represented; (3) the protection afforded to purchasers in instalment sales through mandatory notice to remedy breach provisions; (4) the application of contractually agreed cancellation fees under section 9 of the Act; and (5) the rights and remedies regarding improvements made by purchasers who subsequently lose their rights to the property. The judgment reinforces the policy of protecting purchasers in instalment sales while also upholding contractual terms where proper procedures have been followed.