Thakor Ranchod Kewada (N.O) v United Harvest (Pvt) Ltd and The Master of the High Court (N.O)

The deceased, John Vigo Naested, and the 1st respondent (United Harvest) entered into an agreement of sale on 12 August 2020 for a property known as Lot 18 Gardiner East of Gardiner for US$400,000, payable in instalments until 31 March 2021. The 1st respondent took occupation on 1 August 2020. The 1st respondent failed to pay according to the agreement and proposed restructured payments on 21 December 2020. On 15 March 2021, the 1st respondent proposed monthly payments of US$15,000, which the deceased accepted on 16 March 2021. The deceased passed away on 8 May 2021. The 1st respondent failed to honour the payment proposal, having paid US$200,955.49, leaving a balance of US$199,044.51. The applicant, appointed as executor on 17 December 2021, cancelled the agreement on 28 February 2022 and gave notice to vacate on 28 March 2022. The 1st respondent opposed the ejectment, claiming the agreement had been novated and that only outstanding instalments were due, not the full balance.

• Whether the agreement of sale was novated or merely varied by the parties' subsequent arrangements regarding payment
• Whether upon breach of the payment terms, the full balance of the purchase price became due and payable or only the outstanding instalments
• Whether the cancellation of the agreement was lawful and effective
• Whether the 1st respondent was entitled to a refund of monies paid and compensation for improvements effected

Main Application: (1) The agreement of sale dated 12 August 2020 in respect of Lot 18 Gardiner East of Gardiner was cancelled. (2)(a) The 1st respondent and all those claiming title through it were ordered to vacate the property within 7 days of being served with the order. (2)(b) The Sheriff was authorized to evict them should they fail to vacate. (3) The 1st respondent was ordered to pay costs of suit. Counter Application: (1) The Estate of the Late John Vigo Naested was ordered to refund the 1st respondent the sum of US$200,955.51 and the 2nd respondent (Master of the High Court) was directed to accept that amount as a claim against the estate. (2) The 1st respondent was ordered to pay costs of suit.

Where parties modify specific terms of an agreement (such as payment terms) without intending to replace the entire contract, this constitutes variation and not novation. The unmodified terms of the original agreement, including breach clauses, remain intact and enforceable. When a breach clause provides that the full balance becomes due upon non-payment or breach, this clause is enforceable notwithstanding subsequent variations to payment schedules. Novation requires clear intention by parties to replace a valid contract entirely with another valid contract; it is not lightly inferred from mere modification of contractual terms.

The court noted that the counter-application ought not to have been filed since the applicant had already undertaken to repay the purchase price paid by the 1st respondent. The court observed that while the 1st respondent sought an order declaring the property specially executable, since it was estate property, the proper procedure was to lodge a claim against the estate. The court also noted that the time frame for lodging claims may have expired and therefore granted an order directing the estate to accept the claim. The court referenced that the deceased estate is represented by its executor, citing the principle from Klepman v Law Union and Rock Insurance 1957(1) SA 506.

This case clarifies the important distinction in Zimbabwean contract law between novation and variation of contracts. It reinforces that novation requires clear intention to replace an existing valid contract with a new one entirely, and is not to be lightly inferred. The case demonstrates that modification of specific terms (particularly payment terms) while retaining other clauses constitutes variation, not novation. The judgment is significant for establishing that where a breach clause in the original agreement survives variation, it remains enforceable according to its terms. The case also illustrates the application of the Contractual Penalties Act in relation to cancellation notices and the proper procedure for claims against deceased estates.