The law on double sales

29 Sep, 2023 - 00:09 0 Views
The law on double sales

eBusiness Weekly

Arthur Marara

Part 2

The question that arises is what is meant by “special circumstances affecting the balance of equities’.

In a scenario where the second buyer is aware of the first sale either at the time of purchase or when taking ownership of the property, the first buyer generally has the right to reclaim the property from the second buyer, even if the transfer has already occurred.

However, certain exceptional circumstances may impact the balance of fairness, influencing the court’s decision.

When determining if there are any exceptional circumstances that affect the equitable balance, the court will consider that the primary remedy for the aggrieved buyer is specific performance.

This means that unless there is a valid equity-based reason that disqualifies the buyer from obtaining such relief, the court will likely grant the request for specific performance.

In simpler terms, if the second buyer knew about the first sale but still went ahead with the purchase, the first buyer can usually reclaim the property unless there are significant reasons that favour the second buyer.

The court will prioritise enforcing the first buyer’s right to complete the purchase unless there are compelling arguments against it.

This established position, which allows for deviations from the first contract by considering special circumstances, has served as a guiding principle in notable cases such as Chimphonda v Rodriques & Ors and Guga v Moyo & Ors.

The evaluation of special circumstances that impact the equitable balance was examined in Dube v Mpala & Others, wherein the court emphasised that “The balance of convenience must strongly favour the second buyer for the court to prioritise them over the first buyer.”

Determining the presence of special circumstances largely depends on the unique circumstances of each case, as they cannot be exhaustively defined.

The assessment of equities does not involve a comprehensive checklist, but rather delves into the concept of fairness.

Factors considered in this process include:

The innocence of the second purchaser.

The completion of the transfer process.

The amount invested by the second purchaser in the property in question.

The efforts made by the second purchaser to enhance and develop the property.

In the case of Dube v Mpala & Others HB-116-05, the second purchaser had several favourable factors:

1. Unawareness: She bought the property without being aware that the first purchaser had already sold it to the applicant.

2. Pending transfer: The property had not been officially transferred to either purchaser at that point.

3. Significant investment: She had already spent a substantial amount of money on the property.

4. Inactivity of the first buyer: The first purchaser had acquired the property back in May 2002 when it was at the slab level, but had not taken any steps towards its development or improvement.

There are also instances where a party obtains defective title. In such instances the consideration is not whether or not that particular party was the first purchaser.

What is material at this stage is that the party obtained defective invalid title either in defiance of a valid court order and caveat. It is an established principle of our law that anything done contrary to the law is a nullity.

In Guoxing Gong v Mayor Logistics (Private) Limited and Anor SC2/2017 the Supreme Court was concerned with such a scenario.

The Court observed that from the summation of the undisputed facts it is plain that both the appellant and its legal practitioner were patently aware of the existence of both the court order and caveat barring transfer of the property in question.

Despite such knowledge they connived and deviously obtained transfer of the disputed property.

Procuring transfer under such circumstances only amount to acquiring defective title which at law is a nullity and an exercise in futility.

It’s important to consult with a qualified real estate attorney or legal professional who can provide guidance specific to your case and circumstances if you find yourself involved in a double sale situation.

LEGAL DISCLAIMER: The material contained in this post is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the post. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.

Arthur Marara

Arthur Marara is a practising Attorney. Bestselling Author. Human Capital Trainer. Business Speaker. Thought Leader. Law Lecturer. Consultant. Coach Legal Proctor (UZ). He has vast experience in employment law and has worked with several corporates, and organisations. He is also a notary public and conveyancer. He is passionate about 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].

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