Ranoth Matshazi v Joel Mlotshwa and The Registrar of Deeds

The plaintiff (Matshazi) was the maternal nephew of the first defendant (Mlotshwa), an 88-year-old man who raised him after his parents' death. Mlotshwa, who never married or had children, owned farm number 127 Gwatemba Purchase Area. In 1991, pursuant to a verbal agreement, Matshazi relocated from Bulawayo to reside on and farm the defendant's property. Matshazi made substantial improvements to the farm including constructing a two-bedroom brick homestead with zinc roof, five round huts, an open well, 7 hectares of arable land, an orchard, three granary huts, a toilet, and roads. Matshazi resided on the farm without paying rent from 1991 until the defendant sold the farm to one Pardon Mbondia for US$8,500 on 26 May 2009. The defendant gave Matshazi two cows in 1996. Matshazi claimed he had been granted a lifelong usufruct, a right of first refusal, and sought compensation for improvements made to the property.

• Whether the defendant verbally granted the plaintiff a lifelong usufruct in respect of the farm
• Whether the defendant gave the plaintiff a right of first refusal to purchase the farm
• Whether the plaintiff made necessary and bona fide improvements to the farm
• What compensation, if any, should accrue to the plaintiff for improvements made
• What is the legal status of the plaintiff as possessor of the property (bona fide or mala fide possessor)
• What categories of expenses (necessary expenses - impensae necessariae, or useful expenses - impensae utiles) are recoverable by a mala fide possessor

1. The defendant shall pay the plaintiff the sum of US$2,500.00 as compensation for the improvements together with interest thereon at the prescribed rate of 5% from the date of this order to date of payment in full. 2. Each party to bear its own costs.

A mala fide possessor (a person who holds property animo domini but is aware they are not the owner) is entitled to claim: (1) necessary expenses (impensae necessariae) incurred for the preservation or protection of property, which may be recovered in full; and (2) useful expenses (impensae utiles) which result in actual tangible improvement of the land, recoverable to the extent of either the value by which the property has been enhanced or the actual expenditure incurred, whichever is lesser. The extent of compensation for useful expenses may be reduced if the improvements were not useful to the owner or the expenditure was excessive having regard to the owner's means and position. A possessor who occupies property without paying rent and receives other benefits (such as livestock) during occupation may have these factors considered when determining the quantum of compensation for improvements.

The court observed that the right to compensation for useful expenses has not yet been authoritatively settled in the law, though the weight of authority seems to favor the view that mala fide possessors are so entitled, citing Spencer v Gastelow 1920 AD 636, Lechoana v Cloete 1925 AD 536 at 547-548, Raba v Ngoma 1913 EDL 469, and Standard Kredietkorporasie Bpk v JOT Motors (Edms) Bpk hla Vaal Motors 1986 (1) SA 223 (A) at 235. The court expressed the view that such possessors should be entitled to useful expenses. The court also noted that if the plaintiff seriously wanted to exercise a lifelong usufruct right, he would have had to cite and involve the purchaser Mbondia in the proceedings, and commented that the latter appeared to be a bona fide third party purchaser. The court observed that it is unlikely parties who are close relatives would negotiate and conclude a verbal right of first refusal on their own, as they were accommodating each other in a family context.

This case is significant in South African and Zimbabwean property law jurisprudence as it clarifies the principles governing compensation for improvements made by possessors who lack ownership rights. The judgment reinforces the classification of possessors (bona fide vs mala fide) and demonstrates the application of Roman-Dutch law principles regarding impensae necessariae (necessary expenses) and impensae utiles (useful expenses). It confirms that a mala fide possessor - one who knows they are not the owner but acts as if they are - is entitled to compensation for both necessary and useful expenses, with different recovery principles applying to each category. The case also illustrates the evidentiary requirements for establishing informal property rights such as usufructs or rights of first refusal, emphasizing that clear evidence is required to prove such arrangements, particularly in family contexts where parties may rely on informal understandings.