HAVELOCK COURT (PRIVATE) LIMITED
KANTORA (PRIVATE) LIMITED
SUPREME COURT OF ZIMBABWE
GWAUNZA JA, PATEL JA & GUVAVA JA
BULAWAYO, NOVEMBER 25, 2013 & JULY 28, 2014
V. Majoko, for the appellants
E. Jori, for the respondents
PATEL JA: This is an appeal from a decision of the High Court sitting at Bulawayo dismissing the appellants’ claim for the transfer of two immovable properties situated in the City of Bulawayo. The background to this matter is fairly complicated but may be simplified and summarised as follows.
The first appellant was the former shareholder and director of the respondent companies, which are the registered owners of the two properties in question. He was persuaded to enter into a business transaction involving one Mahomed Jassat and a company called Allen Wack & Shepherd (Pvt) Ltd [AW&S]. Jassat’s dealings with AW&S were conducted through his company known as Youngblood Investments (Pvt) Ltd. In order to reduce his company’s indebtedness to AW&S, Jassat agreed to dispose of ten properties, including the two owned by the respondents, through the sale of shares to AW&S. Consequently, in June 1999, the first appellant concluded two agreements with AW&S for the sale of shares in the respondent companies. At the same time, both appellants also concluded two buy back agreements with the respondents for the repurchase of the two properties within ten years. The purchase price was agreed at ZW$ 9 million and ZW$ 6 million respectively, to be increased by 43.5% per annum from the date of signature to the date when the options to purchase were exercised. Subsequently, the share sale agreements were duly implemented with the issuance of share certificates and changes in the directorship of both respondent companies.
In June 2004, the appellants exercised their options to purchase under the buyback agreements and tendered the sum of ZW$ 30 million in respect of properties, representing ZW$ 15 million capital and ZW$ 15 million interest. However, AW&S rejected this tender and the appellants failed to pay the agreed purchase price within the prescribed three months period. In October 2004, the respondents cancelled the buyback agreements and the options to purchase as having lapsed. The appellants then issued summons for the transfer of both properties.
Following a full trial, the High Court held that the calculation of the option price was not subject to the in duplum rule and that the appellants had failed to tender the correct option price within three (3) months of having exercised their options to purchase. Moreover, the options to purchase had lapsed and the respondents were not obliged to give three (3) months’ notice of cancellation. They were entitled to cancel three (3) months after the options to purchase had been exercised by the appellants. In the event, the court dismissed the appellants’ main and alternative claims with costs.