The Sunday Mail
Legal Matters with Arthur Marara
We are continuing the conversation on bona fide purchasers. The reality is that a number of people find themselves in this position due to a variety of reasons. One of them is outright dishonesty on the part of the party selling the property. Our focus as highlighted in the last article is on immovable properties.
In Mapedzamombe v CBZ and Another 1996 (1) 257 (S), the court proffered a legal definition of bona fide purchaser: “One who acts without covin, fraud or collusion; one who, in the commission of fraud, pays full price for the property and in good faith, honesty, and in fair dealing buys and goes into possession . . . is one who buys property of another without notice that some third party has a right to, or interest in, such property and pays a full and fair price for the same.”
In the case of Chiwadza v Matanda and Others 2004 (2) 203 (H), the court held that where transfer has already taken place, the sale cannot be impeached in the absence of bad faith or knowledge of prior irregularities in the sale or fraud.
The court has to look at special circumstances when considering the position of the bona fide purchaser. In Guga Moyo & Others 2000 (2) ZLR 458 (SC), the court considered what constitutes special circumstances. These include the purchase price paid by the parties, whether any of the parties had taken possession, any improvements on the property and whether the second purchaser was not aware of the earlier sale. The reasoning of the court was emphasised by the High Court in Zimunya and Another v Shumba and 2 Others (1 of 2022) [2022] ZWHHC 1.
In the previous article, we went through the case of CBZ Bank Limited v David Moyo and Another SC17/201. I promised that I was going to look at the reasoning of the court, and ultimately the decision of the court. In that David Moyo case, the Supreme Court observed the following:
◆ The first respondent purchased and paid the full purchase price for the property in August 2010. It is common cause that the first respondent acted promptly to secure registration of title by paying the transfer fees and obtaining tax and rates clearance certificates. It is further common cause that the first respondent, in terms of the contract of sale, was entitled to take vacant possession three months after the date of payment of the purchase price, that is, from November 2010. When the appellant served summons against Nompiliso Maposa, the first respondent was already residing at the property in question, where service of the summons was effected.
◆ Failure to protect the first respondent, who had, without colluding with the seller, purchased the property in good faith when the property was free from any right of preference, would be unjust. It would allow the judgment debtor to pay his debt through the sale in execution of property he had already sold and had received payment for. It would enable the judgment debtor to benefit twice from the same property. It exposes the first respondent to double loss. He will lose the purchase price and the property, and be left with the remedy of damages against a seller whose property will have been executed against by other creditors. He will most likely not be able to recover anything from the seller. Such hardships should not be allowed against the first respondent, who is an innocent purchaser.
◆ It must be noted that notions of fairness, justice, equity and reasonableness cannot be separated from public policy. Public policy takes into account the necessity to do simple justice between individuals. See the cases of Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A) at 9F-G and Jajbhay v Cassim 1939 AD 537 at 544. In my view, simple justice in the circumstances of this case demands the setting aside of the appellant’s writ of execution and upholding the decision of the court a quo.
◆ The first respondent advised the appellant that he had purchased the property and that the seller no longer stayed on that property, as he was in possession of the property. In spite of being given this information, the appellant applied for and was granted default judgment on the basis of service on the first respondent, well aware that service had not been effected on the judgment debtor.
◆ The court was satisfied that there were special circumstances in this case, which justify the court a quo decision.
The first respondent clearly demonstrated that the judgment debtor’s title to the property merely remained on paper, as she had relinquished all her rights in the property to the first respondent, long before the judgment the appellant sought to enforce had been granted. Even though David Moyo did not have title in his name at that time, the special circumstances demonstrated that there had been that shift.
Bona fide purchasers do receive protection in terms of the law. Consult your attorneys for advice should you ever find yourself in such a situation.
◆ Arthur Marara is a corporate law attorney practising law in Harare. He is also a notary public and conveyancer. He is also passionate about labour law, commercial and family law, and promoting legal awareness and access to justice. He writes in his personal capacity. You can follow him on social media (Facebook Attorney Arthur Marara), or WhatsApp him on +263780055152 or email [email protected]
