Nighert Savania and Norwich Trading (Pvt) Ltd v Nathan Mnaba

### Preamble
1
HH 730-18
HC 9654/13
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NIGHERT SAVANIA

and

NORWICH TRADING (PVT) LTD

versus

NATHAN MNABA

HIGH COURT OF ZIMBABWE

MATHONSI J

HARARE, 23 October 2018 & 7 November 2018

Civil Trial

T W Nyamakura, for the plaintiffs

G Madzoka with Ms F Chinawadzimba, for the defendant

MATHONSI J: In essence this is a dispute over ownership of an immovable property known as stand 750 Greystone Township 10 of  Greystone A, Harare which is also known as 750 Gaydon Road Greystone Park, Harare. It is a case which graphically illustrates the conundrum of deploying incorporation laws and rules to register ownership of immovable property, a favourite pastime of many business people in this country. It is a habit usually informed by a desire to take advantage of the protection afforded by company law, in particular that an incorporation once incorporated, has the capacity of a natural person in terms of s 9 of the Companies Act [Chapter 24:03].

The protection arises from the legal principle that a corporation has juristic nature and is itself a person, albeit a fictitious one. The concept that a corporation has legal personality, a legal existence and rights and liability of its own quite distinct from its members who promoted it, is as old as company law itself having its parentage in the seminal judgment in Salomon v Salomon & Co Ltd [1897] AC 22 (HL) . It is said that as a separate  legal persona a company is capable, not only of owning property of its own, but also of suing and being sued in its own right.

Business people intent on shielding their properties from the vicissitudes of the business world with their attendant risks of execution, usually see it fit to acquire and hold properties in the names of investment companies with no other business but to own property. Quite often in this jurisdiction one encounters so many of these corporations, not involved in any business activity but only owning a house or some other immovable property. The investor then controls and enjoys the benefit of the property via the ownership of all the shares in that company. Only that the concept of incorporation has its own pitfalls for the property owner given that there are certain statutory obligations, procedures and requirements prescribed by the Companies Act which have to be complied with if the corporation has to “breathe”. It is that which brings a host of problems for the property owner. In an effort to apply the laws of incorporation in what is purely a matter involving the ownership and sale of immovable property ordinarily governed by property law and the Deeds Registries Act [Chapter 20:05], the parties have burnt their fingers and through a comedy of errors, they find themselves in this court but unable to extricate themselves from the mess.

The first plaintiff and her late husband Mahendra Kumar Jivan Savania, who died on 9 March 2010, definitely controlled Norwich Trading (Private) Ltd, an incorporation which is the second Plaintiff herein. They used it to own an immovable property described above which shall henceforth be referred to as “the property.” I say they definitely controlled it because it appears common cause that the second plaintiff is not a trading company and that its only asset is the property in dispute. They also operated a restaurant business at the property under the style “Dehli Palace”. It is also common cause that at the time the parties entered into a sale agreement involving the property, the plaintiff had long stopped running the restaurant and that “the property had been closed for over a year” (See para  8 (b) (ii) of the defendant’s plea dated 16 January 2014)

The plaintiffs have sued the defendant for eviction from the property, holding over damages of $7 000 per month from the date of occupation to date of eviction together with interest at the prescribed rate and alternatively they would want to be allowed to retain the sum of $250 000 paid by the defendant towards the purchase price of the shares as rouwkoop. They also seek an order of cancellation of the current CR 14 form of the second plaintiff submitted to the company registry at the instance of the defendant.

The parties filed a number of pleadings including amendments of the original pleadings, but the essence of the plaintiffs’ claim is that the first plaintiff, acting in her capacity as a 50% shareholder in the second plaintiff, and as a beneficiary in the estate of her late husband, sold the entire shareholding in the company to the defendant by written agreement signed on 10 October 2011. The other 50% shareholding was held by the estate of her late husband but she was entitled to dispose of it having secured the oral consent of her 3 children, co-beneficiaries in the estate. The purchase price was the sum of $380 000 payable by the defendant in certain installments.

The plaintiffs averred that in pursuance of the agreement the defendant took occupation of the property and has remained in occupation since then, but in breach thereof he failed to pay the full purchase price he having paid only $250 000 leaving a balance of $130 000. After giving the defendant due notice to remedy the breach which was not complied with, the plaintiffs averred that the sale agreement was cancelled. The defendant fraudulently caused the alteration of the second plaintiff’s records at the Companies Registry to reflect that the first plaintiff and her late husband had resigned as directors when they had not. In fact at the time this was done, the first plaintiff’s husband had long died.

The defendant contested the action. In his original plea filed on 16 January 2014, which has never been withdrawn or amended, he pleaded that he did not neglect to pay the outstanding amount, which he acknowledged to be $130 000, but that the plaintiffs frustrated his  business venture by setting up a competing restaurant business in the neighbourhood which they advertised as “ex-Dehli Palace”. This incapacitated him because the business he set  up at the  property sustained losses hence his inability to pay the amount due and, as the plaintiffs contributed to the breach, they are not entitled to cancel the agreement of sale. The defendant also challenged the plaintiffs’ right to retain the deposit paid on the basis that it was inequitable and asserted that his right of occupation “flows from the agreement of sale”. As there was no agreement to pay rent, the plaintiffs are not entitled to holding over damages. More than 2 years later, and after being given leave by order of this court dated 2 November 2015 to amend pleadings, the defendant filed a fresh plea. He did not amend or withdraw the earlier plea which remains part of the pleadings. In the second plea filed on 13 April 2015 he raised a special plea that the first plaintiff is neither a shareholder nor a director of the second plaintiff. She therefore has no locus standi injudicio to institute the action. In addition, the agreement of sale of shares relied upon by the plaintiffs has not yet come into effect and is therefore unenforceable.

On the merits, the defendant made the averment that the share certificate in the possession of the first plaintiff is forged and fraudulent. He disputed that the first plaintiff was the executor of the estate of her late husband or that she was the beneficial shareholder. He admitted that he had instigated the removal of the first plaintiff and her late husband as directors of the second plaintiff but maintained that their removal “as directors was above board and in line with s 126 of the Companies Act.”

Clearly there are contradictions in the defendant’s pleadings. In the original plea he accepted the validity of the written sale agreement relied upon by the plaintiffs in instituting this action. He admitted breaching it but sought to blame the breach on the plaintiffs for setting up a competitive business venture. Without amending that pleading the defendant later pleaded not the invalidity of the written agreement, but its lack of effectiveness because of a clause in it providing that it would only come into effect upon payment of the full purchase price. As shall be seen later, when he testified in court the defendant shifted to another defence not pleaded anywhere, that there was in existence a further agreement between him and the first defendant which was oral and was entered into about August 2011 in terms of which he claims ownership of certain shares in the second plaintiff and the right to continue occupying the property.

In their joint pre-trial conference minute prepared and signed following a conference held before a judge the parties set out a number of issues which, in my view, can be paraphrased and condensed into only a few, namely:

1.  Whether the first plaintiff has locus standi to institute these proceedings

2.  Whether the parties concluded a valid agreement for the purchase and sale of shares in

the second plaintiff company;

3. Whether the removal of the first plaintiff and her late husband Mahendra Jivan Savania

as directors of the plaintiff was valid;

4. Whether the plaintiffs are entitled to an order for the eviction of the defendant and

those claiming occupation through him from the property; and

5.  Whether the plaintiffs are entitled to holding over damages or to retain the sum of

$250 000 paid by the defendant towards the purchase price of the shares.

Presenting evidence on behalf of the plaintiffs the first plaintiff, who struck me as an honest witness, stated that she was married to Mahendra Kumar Jivan Savania who died on 9 March 2010. Their marriage was blessed with 3 children namely Deen Mahendra Jivan Savania, Dushalla Savania and Raoul Mahendra Jivan Savania. Her Husband and herself jointly owned the immovable property which they held through the medium of a company, the second defendant. They both held 50% shareholding in the company. Upon the death of her husband in 2010 she did not immediately register his estate with the Master of the High Court. In fact she only did so in 2015 under DR 3052/15. Without registering the estate and before she was appointed executor of such estate, she met the defendant sometime in June or July 2011 who expressed interest in purchasing the property.

Following negotiations, they entered into a written agreement prepared by an accounting firm for them which was signed on 10 October 2011 in terms of which she sold the entire issued 100 shares in the second plaintiff to the defendant for a price of $380 000. She did so after consulting and agreeing with her 3 children who were also beneficiaries in their father’s estate and agreed that she inherits their father’s 50% shareholding in the second plaintiff. The sole asset of the company being sold is the property.

It was a term of the agreement that the defendant would take possession and occupation of the property on or before 15 October 2011. She did surrender the keys to the property to the defendant who had possession. It was a further term of the agreement that the purchase price would be paid in installments. A sum of $125 000 had been paid and the balance was to be paid in installments of $125 000 on or before 6 January 2012 and $130 000 on or before 1 August 2012. Upon payment of the full purchase price, she was required to deliver to the defendant the share certificates free from any encumbrances and the title deeds for purposes of completing the sale.

The first plaintiff stated that although the defendant managed to pay a further $125 000, bringing the total paid towards the purchase price to $250 000, he breached the agreement by failing to pay, right up to now, the balance of $130 000. Acting in terms of clause 9.2 of the written agreement she demanded the full balance to be paid through a letter written by her then legal practitioners, Venturas and Samukange, on 20 July 2012. When the defendant failed to pay but asked for an extension of the time to pay to 31 October 2012 through a letter written by his then legal practitioners Hute & Partners on 30 July 2012, he was given 30 days notice to remedy the breach by letter of Venturas and Samukange.

In terms of that notice the defendant had until 19 September 2012 to remedy the breach but he failed. As a result, the agreement was cancelled. The first plaintiff made reference to clause 9.2.2 of the agreement to the effect that where the seller has cancelled the agreement owing to a breach, she was entitled to forfeit the sums already paid as rouwkoop in consideration of the damages suffered. She stated that she was entitled to retain the sum of $250 000 in terms thereof. She further stated that the plaintiffs are also entitled to holding over damages equivalent to the market monthly rentals chargeable for that type of property.

The first plaintiff denied receiving any notification to attend a meeting held on 3 September 2014 in which herself and her late husband were removed from their positions as directors. She maintained that the letter of the defendant dated 1 July 2014 was addressed to the immovable property occupied by the defendant and not to her address. She did not receive it. In any event the defendant did not have a legal right to call for any meeting, not being a shareholder or director. The agreement in terms of which he was purchasing the shares was only to come into effect upon payment of the full purchase price in terms of clause 2. He never paid the full purchase price and never became a shareholder. The first plaintiff denied entering into a verbal agreement with the defendant insisting that their relationship was regulated by the written agreement and nothing more.

She specifically denied resigning as a director stating that her removal and that of her husband, were fraudulent. According to her all the valid documents relating to her status in the company mysteriously went missing and even replacement documents also went missing. Those submitted by the defendant without lawful authority are invalid and fraudulent. The plaintiffs are entitled to the relief sought.

The plaintiffs called Nebeort Mukorowa, a letting agent with Property World Estate Agents whose brief was to give the market rent for the premises.  He could not confirm the monthly rental of $7000-00 claimed by the plaintiffs. According to him over the last 5 years property rentals have fallen drastically and currently the property would fetch a monthly rent of $3000-00. He arrived at that figure on the basis of a market assessment but conceded that he is unable to place a value of the property in 2011 because he was not asked to do so.

The moment the defendant took to the witness stand he immediately charted a different path from the case that he pleaded. I have already referred to the contradictions in his own pleading, but in his oral evidence he stated for the first time, that there were in fact 2 agreements concluded by the parties. The first one was an oral one in which he was initially offered the property by the first plaintiff’s son Deen for $400 000-00. They settled for $380 000-00 after which he was only then taken to the first plaintiff. An oral agreement, on terms completely different from those which he admitted in pleadings, was entered into. He paid $65 000-00 to Deen, not to the plaintiff, in June 2011 and the plaintiff handed over to him a box full of keys for the property. They agreed that he took over the business together with its employees who included the first plaintiff, employed as a chef, and her daughter. It was in terms of that oral agreement that he bought shares equivalent to the amount he paid.

The agreement was only reduced to writing in October 2011 when they started having arguments. The first plaintiff then demanded that they sign a written agreement, exhibit 1. It does not represent what the parties agreed to and for that reason he is the one who insisted on clause 2 being inserted. It reads:

“2.   EFFECTIVE DATE

Notwithstanding the signature to this Agreement the effective date of this agreement shall be on full settlement of the purchase price.”

His interpretation of that clause is that their relationship would be governed by the oral

agreement concluded in June 2011 and the written one would only become effective after he paid all that was due.

He will never pay the balance of $130 000-00 because he withheld it after the first plaintiff failed to avail to him proof that she owns the shares that she sold to him.

The defendant went on to say that his investigations have shown that the second plaintiff had 94 shares issued to the deceased and 4 to Ignatius Paul in February 1994. A further 25 shares were later issued to Mohamed Shalni Nargis in 1999. There is no record of the first plaintiff being issued shares and as such she is not a shareholder. She is not entitled to be paid any money.

The defendant also challenged the attempt by the Master to validate the sale between himself and the first plaintiff in retrospect after the registration of the estate in 2015. As far as he is now concerned that agreement is invalid by reason, not that the effective date had not arrived for want of payment of the full purchase price as pleaded, but that the first plaintiff was not a shareholder and therefore could not sell shares in the company. Most of the shares belonged to a deceased estate and could not be sold.

If the written sale agreement is invalid the question which arises is: in terms of what stroke of magic is the defendant entitled to ownership and occupation of the property? According to him, it is in terms of the oral agreement he concluded, ironically with the same first plaintiff lacking in locus standi, in June 2011. It is that agreement which entitled him to take occupation in August 2011 after paying $125 000-00 which was equivalent to 33,5 shares. When he paid another $125 000-00 later, he automatically became the proud owner of 66 shares in the second plaintiff and was therefore the major shareholder. Never mind the arithmetic or that the deceased’s shareholding could not be sold before the estate was registered. I agree with Mr Nyamakura for the plaintiffs that the defendant was indeed a shifting witness and that he was intent on creating as much distance as humanly possible between himself and the truth.

Surely, if indeed there was an oral agreement which bestowed onto the defendant so much rights, including the right to convert whatever amount he paid into shares and the right to be an instant shareholder and director upon payment of only $125 000-00, when the parties sat down to reduce the agreement to writing, why were those terms not recorded as well? If indeed the defendant was able to insist on the inclusion of clause 2 suspending the coming into effect of the written agreement, why did he not exercise the same power and freedom to insist on a clause acknowledging the existence of an earlier oral agreement?

If indeed the defendant purchased, upon payment of a mere $125 00-00 of the purchase price of $380 00-00, the business of the company as a going concern, complete with its employees, including the first plaintiff, a director reduced to a chef, why would the defendant plead in his plea filed on 16 January 2014 that:

“8	Ad Paragraph 8

Firstly plaintiffs are not entitled to a claim for damages given the fact that they contributed towards the breach.

Secondly, the forfeiture clause is unjustifiable, unreasonably high and inequitable in the circumstances more particularly in that:

Defendant purchased the property in an almost run down condition. He then effected renovations at a cost of close to US$1000 000-00 (one million United States Dollars Only), thereby substantially enhancing value of the property.

When he purchased, plaintiffs had stopped operating business on the premises. The property had been closed for over a year.

The amount paid constitutes more that 75% of the total purchase price. If such is retained together with the value of renovations, that would constitute an obvious in equality.

There is no indication of the extent of prejudice suffered by plaintiffs.”

(Emphasis added)

It becomes extremely difficult to know what the defendant’s case is and indeed where

the truth lies from his testimony and the pleadings he has filed. It is however from the totality of the foregoing evidence that I am required to resolve the issues placed before me for trial, as I proceed to do.

Whether the 1st plaintiff has locus standi to institute these proceedings

There is no magic in the expression locus standi in judicio. It simply connotes the right of a party to sue for relief in a court of law. It is common cause that the parties entered into a contractual relationship intending to create certain rights and obligations out of it. The first plaintiff has said the contract was in writing and signed by himself and the defendant on 10 October 2011 and has produced it. The defendant has admitted signing that written contract but his defence takes the form of a confession and avoidance. He alleges that apart from the written contract the parties entered into an oral one which he is enforcing. At the same time he alleges that the first plaintiff, through whom he acquired whatever vestige of rights he clings on, cannot sue because she is neither a shareholder nor a director. In fact she is not a director thanks to the defendant’s own conduct of purporting to remove her, a course of action which is very contested.

In my view it is a completely confused argument to say that the defendant can acquire and asset rights in terms of an agreement with the first plaintiff while the latter has no right of action under that agreement whether written or oral. This is the same defendant who testified that he took occupation of the property after concluding an agreement with the first plaintiff and that it is her who handed over to him a box full of keys which he used to gain access to the property. To then say the person who gave her access does not have locus standi to approach the court seeking to divest him of the possession she gave him amounts to raving with the mob about the unattired Royal’s beautiful attire. Clearly as a party to the agreement and indeed a director of the second plaintiff, removed by the defendant under contested circumstances, she has locus standi to sue. I therefore answer the first question in the affirmative.

Whether the parties concluded a valid agreement for the purchase and sale of shares in the 2nd plaintiff company

The contrasting positions of the parties as I have said relate to the nature of the agreement they entered into. According to the plaintiffs the only agreement they entered into is the written one signed on 10 October 2011 while the defendant’s case is  that the written agreement, though signed by both parties, did not come to effect by virtue of clause 2 and therefore did not give rise to rights and obligations. It was also invalid by reason that the first plaintiff did not have the right to sell the shares which did not belong to her but to the estate of her late husband. According to the defendant the oral agreement entered into between him and the first plaintiff in June 2011 is the only valid one and it entitles him to hold 66% shares in the company.

I tend to agree with Mr Nyamakura for the plaintiffs that the defendant has approbated and reprobated his course in this action throughout. Surely it should have been apparent to him that if the written agreement relied upon by the plaintiffs whether validly cancelled or not was invalid by reason of the first plaintiff’s incapacity to sell shares in the company for one reason on the other, so was any other agreement by the first plaintiff to sell the same shares whether oral or not and whether entered into in June 2011 or any other date. Validity is not predicated upon reducing the agreement to writing but upon capacity to sell.

The defendant was a dishonest and demonstrably unreliable witness who prevaricated a lot and even contradicted his own pleadings. I therefore reject completely his evidence that there was another agreement which was oral as being a most recent fabrication which he only thought of having realised he could not lay a claim on the property on the basis of the impugned written agreement. In the process of fabrication it was lost to the defendant that even that oral agreement would not assist his situation at all.

I have already said that if the oral agreement existed it would have been recorded in the written one. There is more. It is that when a contract has been reduced to writing, the writing becomes the exclusive memorial of the transaction and as such the defendant is precluded from resorting to extrinsic evidence to contradict its contents. The courts have always upheld what is known as the parole evidence rule. The principle is explained by Watermeyer JA in Union Government v Vianini Ferro-Concrete Pipes (Pty) Ltd  1941 AD 43 at p 47 (which was quoted with approval by our Supreme Court in Nhunda v Chiota and Anor S-28-07) in the following words:

“Now this court has accepted the rule that when a contract has been reduced to writing, the writing is, in general, regarded as the exclusive memorial of the transaction and in a suit between the parties no evidence to prove its terms may be given save the document or secondary evidence of its contents, nor may the contents of such document be contradicted, altered, added to or varied by parole evidence.”

There is also the caveat subscripto rule which pins the defendant down to the written

agreement. He has not disputed his signature on that document, neither has he alleged any duress or undue influence brought to bear upon him to sign the written agreement when he already had an oral one. It postulates that a signature on a written contract binds the signatory to the terms of the contract whether the party has read or understood the contract. See Oasis Medical Centre (Pvt) Ltd v Beck & Anor HH 84-16;  Fusire v Chitoro HH 15 -16; R H Christe, Business Law in Zimbabwe,  2nd ed, Juta & Co Ltd p 67.

Mr Nyamakura has added another dimension to the issue namely what is called the integration rule propounded by Corbett JA in Johnston v Leal 1980 (3) SA 927 (A) at 943 that:

“Dealing first with the integration rule, it is clear to me that the aim and effect of this rule is to prevent a party to a contract which has been integrated into a single and complete written memorial from seeking to contradict it, add to or modify the writing by reference to extrinsic evidence and in that way to redefine the terms of the contract. The object of the party seeking to adduce such extrinsic evidence is usually to enforce the contract as redefined or, at any rate, to rely upon the contractual force of the additional or varied terms, as established by the extrinsic evidence.”

It also comes to the same conclusion that a party to a written agreement is prevented from altering the recorded terms of an integrated contract by the production of extrinsic evidence. So even if indeed there was a prior oral agreement, such was integrated into the written memorial which is relied upon by the plaintiffs and the defendant is precluded from adducing oral evidence of another agreement the terms of which are at variance with the written memorial.

That then brings me to the question in whether the written agreement was itself valid. Allied to that is the question whether, if it was invalid, it could be regularised or validated by the Sheriff retrospectively in 2015 when the deceased  estate was registered.  I do not think this issue should detain me unduly because the law relating to disposal of property belonging to a deceased estate is cast in stone and the Supreme Court has pronounced itself most eminently on it. In terms of s 41 of the Administration of Estates Act [Chapter 6:01]:

“If ………..

a) before letters of administration are granted by the Master to any executor for the 	administration of any estate, any person takes (it) upon himself to administer, distribute or any 	manner dispose of such estate or any part thereof, except in so far as may be authorised by any 	competent court or by the Master or may be absolutely necessary for the safe custody or 	preservation thereof or for providing suitable funeral for the deceased or for the subsistence of the 	family or household or livestock left by the deceased; or

b) ………..

every such person shall thereupon become personally liable to pay to the creditors and legatees of 	the deceased all debts due by the deceased at the time of his death or which have thereafter 	become due by his estate, and all legacies left by the deceased in so far as the proceeds and assets 	of such estate are insufficient for the full payment of such debts and legacies.”

In terms of s 42 every person who is not the executor but is in possession or custody of any property or asset belonging to the estate is required to forthwith deliver it to the executor or report to the Master. The Supreme Court had occasion to interpret these provisions in Muchini & Adams 2013 (1) ZLR 67 (S) and was emphatic in its pronouncement that the clear intention of the legislature in enacting s 41 and s 42 was to prohibit the distribution of a deceased estate by persons who are not executors. At 72 D-G Ziyambi JA remarked:

“I agree with the submissions by Ms Mahere that the intention of the legislature in enacting s 42, 	and indeed s 41 of the Act, was to protect the position of beneficiaries and, I would add, creditors 	of a deceased person pending the administration of the estate and that were the court to sanction 	the disposal of an estate asset in circumstances such as the present, it would bring about the very 	situation which the legislature sought to prevent thereby causing prejudice to both the 	beneficiaries and creditors of the estate. The clear intention as expressed in the Act, and in 	particular the sections thereof quoted above, is to prohibit the distribution of a deceased estate by 	persons other than executors. Further the authority to dispose of certain assets of a deceased estate 	before the appointment of an executor is strictly limited to the circumstances set out in s 41. In 	the present case it would have to be shown that the sale of the property was absolutely necessary 	for the subsistence of the family. The use of the word, absolutely is significant and is indicative of 	a higher standard than mere necessity.” [emphasis added]

In the present matter no evidence was led to even begin to suggest that the sale met the requirements of s 41 of the Act, that it was “absolutely necessary” to undertake it. Indeed none of the other provisions of the Act were met either.  See Tekere v Sibanda & Anor HB 90-18. What the evidence shows is that the first plaintiff purported to sell all the issued shares in the company to the defendant in October 2011. Some of those shares belonged to a deceased estate which had not been registered at the time of the sale. When she purported to sell them she was not the executor of her husband’s estate. She could not lawfully do that because that was prohibited by statute, it being trite that an act done contrary to the direct prohibition of the law is void and of no effect or consequence. It must be regarded as not having been done at all. It is a nullity. See Schierhout v Minister of Justice 1926 AD 99 at 109.

To the question whether the parties concluded a valid agreement for the sale of shares in the company, the answer is therefore in the negative. That conclusion must of necessity also dispose of the third issue for trial, that is, whether the removal of the first plaintiff and her late husband as directors of the second plaintiff was valid. The defendant believed that he had become a major shareholder in the second plaintiff by virtue of having purchased some of its shares from the first plaintiff. Having found that the purported sale was a nullity, it must follow that he never became a member of the company and never acquired rights of any form in it. He could therefore not act to remove directors, or convene meetings or appoint directors of the company. He was in fact in borrowed robes when he purported to do so and engaging in an exercise in futility. A legal nullity cannot give rise to rights and obligations. I find therefore that the purported removal of the directors and their substitution with the defendant and his acolytes was invalid.

In any event the defendant could not have been a shareholder in the company because the only agreement which l have found existed did not give him any shares until he paid the full purchase price. He failed to pay it. Section 126 of the Companies Act [Chapter 24:03] in terms of which he claimed to have the authority to call a meeting only applies to members of a company who are paid up. He was not such a member and was therefore wasting his time.

After the registration of the estate in 2015 the Sheriff purported to “regularize” the sale agreement between the parties by giving it a thumbs up in retrospect. He said his decision was informed by the consent to the sale given by the beneficiaries, the deceased’s three children, and that the defendant was not prejudiced. Surprisingly the defendant spurned that gesture insisting that it was a legal nullity. He obviously was acting on wrong advice, he having wallowed under the misapprehension that the circus he had engaged in when he purported to call a meeting in September 2014 and installed himself and his hangerlings as company officials entitled him to take over the company. By so doing he lost the only opportunity to salvage something out of this whole misadventure.

The consent of the Master for the sale of property belonging to the estate otherwise than by private auction is given in terms of s 120 of the Administration of Estates Act. It is that provision which the Master relied upon in authorising the first plaintiff, as executrix, to sell 50% shares in the second plaintiff. I have already said that the sale of the shares in 2011 was a nullity. In my view a nullity cannot be “authorised” or “regularized”. It is for all intents and purposes null and void and of no legal consequence. The approval of the sale was patently wrong and patently irregular to the extent that he purported to act in terms of s 120. That section does not empower the Master to validate a sale by a non-executor conducted without authority. See Matanhire v BP Shell Marketing Services (Pvt) Ltd 2005 (1) ZLR 140 (S) at 147 F – G.

Whether the plaintiffs are entitled to an eviction order

The defendant devoted a lot of time to pursuing a phantom, that he could dig dirt about the conduct and indeed the status of the first plaintiff in the running of the company in the forlorn hope that by discrediting the manner in which the company was regulated and managed then he would just work up as the owner of that company. It was tantamount to chasing a mirage. Whatever vestige of right he may have had did not depend on any of that. It depended on his agreement with the first plaintiff and nothing else because it is the first plaintiff that gave such right to the defendant.

That the first plaintiff was in effective and lawful control of both the property and the company in October 2011 when she entered into a relationship with the defendant is beyond any doubt. She had the keys to the property. She is a director of the second plaintiff. She was the spouse of the deceased and, by the defendant’s own admission, it is the first plaintiff who gave him a box full of keys which he then used to take possession. Now that the sale agreement has been found to have been invalid the status quo ante must be restored. Mr Madzoka for the defendant submitted that eviction proceedings are vindicatory in nature and can only be pursued by the owner of the property. See Lafarge Cement (Zimbabwe) Ltd v Chatizembwa HH 413-18. He submitted that not being the owner  the first plaintiff cannot vindicate against the defendant.

It occurs to me that this is an academic argument. For a start, the first plaintiff was not lawfully removed from her position as a director and remains a director. She is entitled to act on behalf of the second plaintiff, which in any event is a co-plaintiff seeking the same relief. It matters not that one of the shareholders is deceased. The essence of the separate legal persona principle of our company law that a company exists as a stand-alone person capable of suing and being sued in its own right exists for precisely that purpose. The property belongs to the second plaintiff which acts through its directors, one of whom is the first plaintiff. The two of them combined are entitled to vindicate.

In any event, the defendant is holding onto property belonging to a deceased estate. In terms of s 42 of the Act, which is a statutory command to every person who is not an executor but who is in possession or custody of any property or asset belonging to an estate, the defendant is required to deliver such property or asset to the duly appointed executor. The first plaintiff has now been appointed executor and is therefore entitled, by operation of law, to take possession of the property. I conclude therefore that the plaintiffs are indeed entitled to an eviction order.

Whether the plaintiffs are entitled to holding over damages or to retain the sum of $250 000.00 paid by the defendant towards the purchase price

I have had occasion to pronounce myself on the issue of the retention clause relied upon by the plaintiffs in seeking to retain the sum paid by the defendant in Savania & Anor v Mnaba HH 332-13, a matter in which the first plaintiff’s incapacity to sell the shares belonging to her deceased husband did not arise at all and was not disclosed to the court. In that case l expressed the view that the penalty stipulation appeared out of proportion with whatever prejudice the plaintiff’s may have suffered. That has now been rendered irrelevant by reason that the agreement in question has been found to be invalid. For that reason it cannot found a valid legal claim.

There is however the issue of holding over damages. The plaintiffs pleaded a claim for $7 000.00 per month as holding over damages. They led evidence from a letting agent who claimed that although he had not inspected the property but merely made a market assessment, his view was that the current value is $3 000.00 a month. He did not bother to evaluate the property as at the time the defendant took occupation in October 2011 or any other time subsequent to that. There is therefore no reliable evidence from the plaintiff upon which this court can quantify the damages and l am certainly not persuaded that the plaintiffs have proved a claim for either $7 000.00 or $3 000.00 per month as holding over damages.

Mr Madzoka submitted that  the claim should be dismissed out of hand. I do not agree. While it is trite that in a claim for such damages the plaintiff have the onus to place before the court enough evidence to enable it to compensate them by an award of money and that the court should not be made to engage in guesswork, I am of the view that this court has enough evidence from which to make some form of an award. See Aarons Whale Rock Trust v Murray and Roberts & Anor 1992 (1) SA 652. It is common cause that for 7 years the defendant has enjoyed the benefit of use of the property while running a restaurant business at it without paying anything to the plaintiffs. In my view this court cannot fail to make an award in those circumstances.

Thankfully in his evidence the defendant made an admission to the effect that a sum of   $1 000.00 per month is the fair market value of the property. I have no doubt that the amount appears very low but the plaintiffs have not placed sufficient evidence to rebut that assertion. I am therefore only prepared to make an award for holding over damages as admitted by the defendant.

Regarding the issue of costs I am of the view that this case calls for an award on the superior scale, in consideration of the conduct of the defendant. This is a person who right from the very start made the concession he was unable to raise the balance of the purchase price and asked for time to pay. He was denied that time and had the agreement cancelled but refused to vacate. He then set about illegally trying to divest the first plaintiff of her rights in the company by attempting to snatch the company away. Even when he was given an indulgence to revive the invalid agreement he remained hell-bent on acting outside the law and tried to mislead the court in a big way. In the process he has made financial gains at the expense of a hapless widow and must therefore bear the consequences. The matter should not have come this far.

In the result, it is ordered that:

The defendant and all those claiming occupation through him are evicted from stand 750 Greystone Township 10 of Greystone A, also known as 750 Gaydon Road Greystone Park, Harare.

The defendant shall pay holding over damages of $1 000.00 per month from 10 October 2011 to date of eviction together with interest at the prescribed rate from due date to date of payment in full.

The CR 14 Form submitted by the defendant or his agents to the Registrar of Companies in respect of the directorship of the 2nd plaintiff  is hereby cancelled and the one that was in place immediately before that reflecting the first plaintiff and the late Mahendra-Kumar Jivan Savania as directors is restored.

The plaintiffs’ claim for $250 000.00 paid by the defendant towards the purchase price as rouwkoop is hereby dismissed.

The defendant shall bear the costs of suit on a legal practitioners and client scale

Mtetwa & Nyambirai, Plaintiff’s Legal Practitioners

B Matanga I P Attorneys, Defendant’s legal Practitioners