Judgment No. HB 69/06
Case No. HC 1351/03
REGISTRAR OF DEEDS
IN THE HIGH COURT OF ZIMBABWE
BULAWAYO 7 NOVEMBER 2005 AND 13 JULY 2006
K Phulufor the applicant
First respondent in person
NDOU J: The applicant seeks an order in the following terms:
“It is ordered that:
The first respondent be and is hereby ordered to take all the necessary steps to transfer right, title and interest of house number 3931 Cowdray Park, Bulawayo to applicant within five(5) days of service of the order.
Failing compliance with 1 above, the Deputy Sheriff be and is hereby authorised to sign the relevant papers for the effecting of transfer to applicant.
That third respondent be barred from effecting any transfer of the property to anyone other than applicant.
That the first respondent pays costs.”
The application is opposed by the first respondent. Most facts in this matter are common cause and can be summarised in the following manner.
On 26 November 2002, applicant and first respondent entered into an agreement of sale of a certain immovable property commonly known as
house number 3931 Cowdray Park, Bulawayo. The terms of the contract were that applicant would pay to first respondent the sum of $1 450 000,00 as the purchase price. This purchase price was to be paid through first respondent’s instructed estate agents. Accordingly, applicant fulfilled his contractual obligations and paid the full purchase price plus the transfer fees. First respondent has refused to effect transfer of the property and alleges that the purchase price, save for the sum of $325 000,00 received by her in November 2002, was never received by her and was misappropriated by her own agents, i.e. second respondent. First respondent contends in her opposing affidavit (on page 2) that the contract “has been frustrated” and “has been brought to an end by virtue of the estate agent’s conduct of dishonesty converting the funds which he held on trust (sic) for the purchaser, pending transfer”. She further avers that the contract has been put to an end “by the operation of law”. In short the applicant’s case is that the first respondent is obliged to pass transfer to applicant since applicant discharged his obligations in terms of the agreement. Further, applicant avers that it is just and equitable and would not cause undue hardship to first respondent if an order for specific performance is granted by this court. It is trite that first respondent, in an
opposing affidavit she deposed to, clearly sets out that applicant was “to pay cash through Universal Properties at the sum of $1 450 000,00.”
Accordingly, applicant made payment of the said purchase price, along with transfer fees, to the said estate agents who received it on behalf of the seller, first respondent. Thus, by making payment to the estate
agent, applicant discharged his obligations in terms of the agreement. First respondent was consequently obliged to pass transfer to applicant – Verbeek v Mather 1978(1) SA 61(N).
According to J W Wessels, Law of Contract in South Africa (2ndEd) at paragraph 2118, “a contract is said to be performed by a party when he has done all that he was obliged to do under obligation.” Payment to an agent expressly authorised to receive payment, discharges the obligation to make payment – Trustee of De Roubaix v Breda’s Curator 1876 Buch 196. In casu, payment was made to the second respondent at the behest of the first respondent and such payment was therefore effectively paid to the seller. Thus, applicant fulfilled his obligations in forma specifica. That the second respondent was the agent of the seller is evinced by the fact that all the negotiations were between the seller and the applicant directly and not through the estate agent hence the affidavit by the first respondent canvassing the agreement between the parties. The role of the estate agent was to receive the purchase price on behalf of the seller pending transfer and indeed, second respondent received the full purchase price from applicant who by so advancing discharged his obligations under the contract. In relation to the agreement at hand, second respondent’s role was that of an adjectus solutionis gratia i.e. a third person whose name is inserted in the contract for the purpose of receiving payment. The applicant was justified in paying the adjectus (second respondent) and such payment discharged the debt - Mahomed v Lockhat Brothers & Co Ltd 1944 AD 230 at 237; Baker v Probert 1985(3) SA 429 A at 440; Compaan v
Dorbyl Structural Engineering (Pty) Ltd 1983(4) SA 107 (T) and Pettigrew (Pvt) Ltd v Cone Textiles (Pvt) Ltd 1976(3) SA 569 ( R). The first respondent also relies on the English doctrine of frustration. I do not think this doctrine is still a part of our law – R Christie, The Law of Contract (3rdEd) at 524. In any case, the “common object” has not been frustrated i.e. the property. What seems to have been frustrated is the individual advantage of the first respondent when second respondent misappropriated part of the purchase price. This is not covered by the doctrine of frustration even if the doctrine is found to be still part of our law – Joseph Constantine S S Ltd  A C 154 and Hirji Mulji v Cheong Yue S S Co (1926 AC 497).
First respondent also relied on supervening impossibility. In this case it is still possible for the first respondent to pass transfer to applicant. Indeed, she admits that applicant has satisfied his obligations. It was never stated in the contract that such an occurrence would entitle one to repudiate the contract. The fact that the unfortunate occurrence has made it uneconomical for first respondent to carry out her obligations does not mean that it has become impossible – first respondent is the one who appointed second respondent as her adjectus. Equity demands that she bears the consequences of such appointment. She cannot visit applicant with the punishment of sins of her own adjectus – Koening v Johnson & Co Ltd 1923 AD 262 and Scolt v Paipard 1971(2) SA 373(A). The first respondent cannot seek to avoid her obligations and the terms of the contract on the basis that her agents have defrauded her. Indeed, there is privity of contract between first and second respondents and none
between applicant and the latter. It is first respondent and not applicant who elected to employ the services of second respondent.
It would be just and equitable for an order for specific performance to be granted. On the one hand, no undue hardship would be occasioned to first respondent should an order for specific performance be made because first respondent can seek recourse through section 34 of the Estate Agents Act [Chapter 27:05]. She can make a claim to the Estate Agents Council and recover the balance of the purchase price and therefore suffer no prejudice if ordered to transfer the property.
On the other hand, applicant would incur immense hardship should an order for specific performance be refused. This is so because while first respondent can claim from the Council, supra, applicant can never hope to acquire an immovable property for the price of $1 450 000,00 in the current economic environment. Applicant has also effected costly renovations on the property and he and his family consider it their permanent home. In the locus classicus on specific performance, Farmers Co-op Society v Berry 1912 AD 343 at 350, INNESJ enunciated;
“Prima facie every party to a binding agreement who is ready to carry out his own obligation under it has a right to demand from the other party, so far as it is possible, a performance of his undertaking in terms of the contract. As remarked by KOTZECJ in Thompson v Pullinger (1894) or at p 301 ‘the right of a plaintiff to the specific performance of a contract where the defendant is in a position to do so is beyond all doubt.’ It is true that courts will exercise discretion in determining whether or not decrees of specific performance will be made. They will not, of course, be issued where it is impossible for the defendant to comply with them. And there are many cases in which justice between the parties can be fully and conveniently done by an award of damages. But that is a different thing from saying that a defendant who has broken his undertaking has the
option to purge his default by the payment of money. For in the words of Storey (Equity Jurisprudence, sec 717(a)), ‘it is against conscience that a party should have a right of election whether he would perform his contract or only pay damages for the breach of it’. The election is rather with the injured party, subject to be discretion of the court.”
The discretion must be exercised judicially – Haynes v King William”s Town Municipality 1951(1) SA 371 AD. At p 378 De VILLIERSJA stated:
“The discretion which the court enjoys although it must be exercised judicially is not confined to specific types of cases nor is it circumscribed by rigid rules. Each case must be judged in the light of its own circumstances. As examples of the grounds on which the courts have exercised their discretion in refusing to order specific performance although performance was not impossible may be mentioned;
where damages would adequately compensate the plaintiff;
where it would be difficult for the court to enforce its decree;
where the thing claimed can be readily bought elsewhere;
where specific performance entails a rendering of services of a personal nature. To these may be added examples given by WESSELS, Contract Vol 2, sec 3119. All good and sufficient grounds for refusing the decree.
Where it would operate unreasonably hardly on the defendant or where the agreement giving rise to the scheme is not reasonable or where the decree would produce hardship in those circumstances or would be inequitable under all the circumstances.”
see Wheeldon v Moldenhaver, 1910 EDL 97; Swart & Son (Pty) Ltd v Wolmaransstad Town Council, 1960(2) SA 1 (T); Mohr v Kriek 1953(3) SA 600 (SR); R v Milne and Ertleigh (7), 1951(1) SA 791 (AD);Macrides v Miltiadous 1947 (4) SA 860 (W) and Crispette and Candy Co Ltd v Michaelis NO & Anor 1947(4) SA 521 (AD).
In casu, an award of damages would not adequately compensate applicant, nor can such a property be readily bought elsewhere for the same amount. It would not be difficult for the court to enforce the
agreement as the merx forming the subject of the agreement is in the hands of first respondent. The service required here is not of a personal nature. The decree of specific performance would not operate unreasonably hardly on first respondent, neither would it produce injustice. Such a decree would no inequitable under the circumstances of this case.
Accordingly, I grant the order in terms of the above mentioned draft.
Coghlan & Welsh, applicant’s legal practitioners