FERNANDES v FERNANDES & ORS

HIGH COURT, HARARE

[Civil Trial – Special Case HH 815-16]

December 21, 2016

MAFUSIRE J

Property law – Ownership – Right to alienate property co-owned with another.

Held, that an undivided share in a property is not regarded as a portion of the property for purposes of s 39 of the Regional, Town and Country Planning Act [Chapter 29:12]. Every co-owner of a jointly owned property has the right to freely and, without reference to the other co-owner or owners, alienate his or her share or even a part of it.

Cases cited:

Pretorius v Nefdt and Glas 1908 TS 854, compared

X-Trend-A-Home (Pvt) Ltd v Hoselaw Investments (Pvt) Ltd 2000 (2) ZLR 348 (S), referred to

Legislation considered:

Deeds Registries Act [Chapter 20:05]

Prescription Act [Chapter 8:11], s 2

Regional, Town and Country Planning Act [Chapter 29:12], s 39

High Court Rules, 1971 (RGN 1047 of 1971), O 29

Book cited:

Badenhorst PJ, Piennar JM and Mostert H Silberberg and Schoeman’s The Law of Property (5th edn, LexisNexis Butterworths, Durban, 2006) pp 133-134, 135

B Madanhe, for the plaintiff

F Nyamayaro, for the first defendant

G Mhlanga, for the fourth defendant

No appearance for the second and third defendants

MAFUSIRE J:

Upon queries raised by myself, the parties readily opted to proceed with this matter as a special case in terms of O 29 of the High Court Rules, 1971 (RGN 1047 of 1971).

The plaintiff (“Honorato”) and the first defendant (“Vereno”) were brothers. They were, since 1996, the joint and equal owners, on a single title deed, of undivided shares in a certain commercial property at Kamfinsa Shopping Centre in Harare. The property was on 3 505 m2 of land. Some shops and offices were built on it. These were being leased out to various tenants, the brothers sharing the expenses and the rentals in equal shares.

In 2006, the brothers entered into a written agreement which they titled “memorandum of an agreement of dissolution of the de facto partnership”. In the preamble, the status quo was recognised as a de facto partnership being one arising out of their arrangement to lease out the property and sharing the expenses and the income as aforesaid. Next, it was recorded that owing to constant disputes between them, the brothers had resolved to dissolve the partnership as they could no longer work together amicably. The assets would be distributed, in particular, the right of occupation and enjoyment of the fruits of their joint ownership of the property. The preamble also mentioned the intention, at some future date, to subdivide the property, which was said to be impossible at that time. In the meantime, all what they would do was to assign to each the rights in, and to certain defined premises within the property, and to agree the manner in which common rights and obligations would be dealt with.

To give effect to their intention, the property, or the developments on them, was/were split in two and assigned to each. The essence of the main part of the agreement was to dissolve the partnership and to bestow to each the exclusive right to the beneficial use and profits of those portions of the premises assigned to them. The operative part of the agreement permitted each to lease out their respective portions; to alienate or transfer such rights, and generally to deal with their respective allotments to their best advantage. However, to each was reserved the right of first refusal in respect of the other’s portion in the event of an alienation or a transfer. They would be jointly responsible for the common areas. Rates and water accounts would be shared in proportion to the respective areas occupied.

Simultaneously with the above agreement was another one titled “cession and assignment”. The essence of this second agreement was to record the cession and assignment to each other, of certain defined lettable portions of the premises. It was also indicated that they would register by Sectional Title in terms of the Deeds Registries Act [Chapter 20:05], the divisions so created.

A year later, Vereno sold, or purported to sell, to the fourth respondent (“Hudgame”) two of the shops assigned to him. In the preamble, Vereno was described as the owner of those shops. It was also recorded that he was in the process of acquiring Sectional Title for them. The agreement had the usual terms and conditions, such as those dealing with the purchase price; the mode of payment; transfer; risk and profit; capital gains tax, and the like. To protect its interests, Hudgame caused an XN caveat to be registered on the whole property.

In 2015, i.e. nine years after the two agreements aforesaid, Honorato brought this action against Vereno, the Registrar of Deeds, the Sheriff and Hudgame. Apart from costs, his claim was for the following orders:

i. to terminate the brothers’ joint ownership of the property;

ii. to compel Vereno, or, if he would not comply, the Sheriff, to sign all the documents and to do everything necessary for the application for a sub-division permit in respect of the property;

iii. to declare the brothers jointly liable, in equal portions, for the costs of effecting the sub-division;

iv. to declare the two agreements aforesaid (dissolution of the de facto partnership and the cession and assignment), and Vereno’s agreement of sale with Hudgame, illegal and therefore null and void for being contrary to law;

v. to compel the Registrar of Deeds to uplift the XN caveat.

Honorato’s cause of action was that he now wanted the property subdivided so that he could have exclusive ownership and control of a portion because he and Vereno had not been agreeing on the methods of managing the property. He alleged that Vereno had attempted to alienate a portion of the land without Honorato’s knowledge; that Vereno was not contributing to the payment of the utility bills and rates; that Vereno was not co-operating in having the property subdivided; that the property was capable of being subdivided, and that the two agreements (of dissolution of the de facto partnership and of cession and assignment) were illegal because they were prohibited by law since, in the words of the plaintiff’s declaration, they were “...clustered with the effect of transferring the ownership of a piece of land without (first) obtaining a permit (for) a subdivision…” Vereno’s sale agreement with Hudgame was said to be illegal because it had not been done with Honorato’s consent as joint owner, yet it had the effect of transferring ownership of a portion of the land without a subdivision permit.

Vereno defended the action on the basis that a subdivision was impossible owing to the manner of the developments on the property. He said any subdivision would not be possible without damaging the existing buildings, and he did not wish the property subdivided anyway. He denied that he was not contributing to the common expenses or that he was not co-operating in the management of the building. He said since the agreements in question, each of them had been confined to their respective portions for administrative purposes and that there had been no problems at all. There was nothing illegal in those agreements as none of them had the effect of transferring ownership. Of his agreement with Hudgame, he denied that it was illegal because the sale had been conditional and not absolute.

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