Law on Double Sale in Zimbabwe

Introduction

For several years authorities have been introducing measures to simplify and make transparent property purchasing. However, hundreds of cases relating to property fraud still land up in the Zimbabwean civil and criminal courts every year. There are different types of property fraud however this article focuses on double sales. The article starts by defining double sales and explains the law on double sale in Zimbabwe.

 

Definition

The concept of a ‘double sale’ exists generally when a property is sold to two different buyers by the same seller. Thus, a double sale can be defined as a sale of an immovable property in which a seller fraudulently sells the same property to two different buyers and both buyers pay the full purchase price for the property.

 

Double Sale and Contract Law

The contract-based policy position has been adopted by the courts as it is the policy of the law to uphold, within reason, the sanctity of contracts. In double sale cases courts of law generally adopt an approach which discourages sellers from entering into contracts the performance of which will involve breach of an earlier contract (the first purchaser). This approach is meant to reduce a potential cause of hardship due to the rise in property fraud cases in the country. Therefore, the policy to uphold the sanctity of contracts is best served by giving effect to the first contract and leaving the second purchaser to claim damages for breach of contract.[1]

Law on Double Sale

A perusal of Zimbabwean case law illustrates that in a double sale situation, the first buyer has the stronger legal claim and the onus is on the second buyer to prove a preponderance of equities in his favour.[2] The legal position was stated in case Guga vs. Moyo & Others[3]

 

 “The basic rule in double sales where transfer has not been passed to either party is that the first purchaser should succeed. The first in time is the stronger in law. The second purchaser is left with a claim for damages from the seller, which is usually small comfort. But the rule applies only in the absence of special circumstances affecting the balance of equities.

 

Special Circumstances

In a situation where the second buyer had knowledge of the first sale of the property, either at the time of the sale or at the time it took transfer of the property, then, unless there are special circumstances affecting the balance of equities, the first buyer can recover the property from the second buyer even if it has already been transferred. In deciding whether there are special circumstances affecting the balance of equities, the court will bear in mind that the primary right of the wronged buyer is the remedy of specific performance which will be granted unless there is some equitable reason disqualifying him from obtaining such relief.[4]

This qualified position permitting a deviation from the first contract through the examination of special circumstances if there are any, has been used as a beacon in cases such as Chimphonda v Rodriques & Orsand in Guga v Moyo & Ors. Special circumstances affecting the balance of equities were assessed in Dube v Mpala & Others[5]  where the court stated that “The balance of convenience must weigh heavily in favour of the second purchaser before the court can favour her over the first purchaser.” The question of special circumstances referred tolargely depends on the circumstances surrounding a particular case as they are inexhaustive. 

The assessment of equities is not an exhaustive exercise rather it interrogates issues of fairness, which include;

1. Whether or not the second purchaser was an innocent purchaser,
2.  Whether transfer has been effected,
3. How much has been spent by the second purchaser on the property concerned,
4. What has been done by the second purchaser towards the improvement and development of the property.^[6]

 In the Dube v Mpala & Others^[7] case the second purchaser had the following in her favour:

1. She purchased the property without knowledge that first purchaser had already sold it to applicant.
2. The property had not yet been transferred to either purchaser.
3. She had already expended a lot of money on it.
4. The first buyer having purchased the property as far back as May 2002 at slab level had done nothing towards either its development and/or improvement.

These factors cumulatively formed special circumstances which tilted the balance of equities in favour of second buyer.

 

Conclusion

In conclusion when the second purchaser is entirely ignorant of the claims of the first purchaser, and takes transfer in good faith and for value, his real right cannot be disturbed.  However, when the second purchaser knowingly and with intent to defraud the first purchaser takes transfer, his real right can and normally will be overturned. If ever you are a victim of property fraud our qualified team of lawyers at JPLP are ready to assist you in claiming your property. Email us on info@jplp.co.zw

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[1] BP Southern Africa (PTY) Ltd v Desden properties (Pvt) Ltd and Anor 1964 (2) SA 21 ( SR)

[2] Barros &Anor v Chimphonda. 1999(1) ZLR 58 (S)

[3] 2000 (2) ZLR 458 at 459 

[4] 1997 (2) ZLR 63 (H) 

[5] HB-116-05

[6] 2000 (2) ZLR 458(S).

[7] HB-116-05