eBusiness Weekly
Arthur Marara
A “double sale” in the context of immovable property typically refers to a situation where the same property is sold to multiple buyers by the same seller, resulting in a conflict over ownership rights.
This situation may arise due to various reasons, such as errors or negligence on the part of the seller or outright fraudulent activities.
There are a few scenarios in which a double sale may occur:
1. Error or oversight: The seller mistakenly enters into separate agreements to sell the same property to different buyers. This could happen due to administrative errors, miscommunication, or lack of proper documentation.
2. Fraudulent activities: In certain cases, fraudulent sellers intentionally engage in double sales to deceive multiple buyers, thereby obtaining multiple payments for the same property.
The Courts and indeed media is awash with a number of these cases where individuals and sadly individuals in many instances are fraudulently selling the same property to unsuspecting members of the public. I once did an article on the important safeguards before acquiring a property.
3. Invalid or unauthorised sales: If the property is sold by someone who does not have legal authority to do so, such as an unauthorised agent or a person without proper ownership rights, it can lead to a double sale situation.
The question therefore is what is the legal position in a double sale situation. The position of the law is settled. In the case of Guga v Moyo & Ors 2000 (2) ZLR 458 (S) at 459E-H; where McNally JA said: “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 against the seller, which is usually small comfort. But that rule applies only ‘in the absence of special circumstances affecting the balance of equities’ (emphasis added). See Mckerron (1935) 4 SA Law Times 178, Burchell (1974) 91 SALJ 40.
Burchell was of the view that ‘the balance of equities must weigh heavily in favour of the second purchaser’ before the court could favour her over the first purchaser.” See also Mwayipaida Family Trust v Madoroba & Ors 2004 (1) ZLR 439 (S), at 443F-444C, Barros & Anor v Chimphonda 1999 (1) ZLR 58 (S).
In BP Southern Africa (Pty) (Ltd) v Densden Properties (Pvt) Ltd 1964 RLR 7 (G), MacDonald J (as he then was) said, “In my view, the policy of the law will best be served in the ordinary run of cases by giving effect to the first contract and leaving the second purchaser to pursue his claim to damages for breach of contract.
I do not suggest that his should be the invariable rule, but I agree with the view expressed by Professor McKerron that save in “special circumstances” the first purchaser is to be preferred.” “ . . . the broad principle as set out above was acknowledged to be our law in Barros and Another v Chimphonda 1999 (1) ZLR 58 (s) . . . Similarly, in Charuma Blasting and Earthmoving Services (Pvt) Ltd v Nyainjai and others 2000 (1) ZLR 85 (S)
See also Crundall Brothers (Pvt) Ltd v Lazarus NO and Another 1991 (2) ZLR 125 (S). The onus is on the second purchaser to prove the special circumstances tilting the balance of equities in his or her favour.
This is the approach in the South African courts per Van Zyl in Gugu and Another v Zongwana and Others (2014) 1 ALL SA 203 who expressed it as follows, ‘The accepted approach to successive sales and competing rights is that as a point of departure, the possessor of the earlier right, in this case is the appellants, is entitled to specific performance, unless the second purchaser can show that the balance of fairness is in his favour . . . ’
The same applies in our jurisdiction see Barros and Another v Chimphonda (supra) where the court had this to say, ‘One further point needs to be underscored.
It is the 2nd Appellant (2nd purchaser) bore the burden of establishing on a preponderance of equities in its favour . . . Put differently, it was for the 2nd appellant to prove the special circumstances which rendered it inequitable to apply the maxim , ‘qui prior est tempore est jure’ in favour of respondent.
In short, the first purchaser must succeed where title has not passed to either party unless special circumstances exist in favour of the second purchaser.
There is no definition of special circumstances in double sales, but courts have considered individual factors for each party and their effect on the balance of equities. The second purchaser must prove such special circumstances. It is not enough to merely allege certain factors.
In the Mwayipaida Family Trust v Madoroba and Others SC 22/04 case, the Supreme Court upheld the cancellation of the deed of transfer in favour of the first purchaser, even though title had already been passed to the second purchaser.
The court recognised that the first purchaser had taken all necessary steps to safeguard its rights, but due to unforeseen circumstances, those rights were compromised, leading to the transfer.
In the Guga v Moyo (supra) case, the court deemed certain factors as special circumstances, including the second purchaser’s occupation of the property, significant renovations costing $78,024.63, her genuine belief in the legitimacy of the purchase, and the significant difference in price compared to the first sale. (See also Gandawa v Gopoza & 3 Ors (HH 221-21).
To be continued . . .
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]
