VICTORIA FALLS PROPERTIES (PVT) LTD v FEDERATED PROPERTIES (PVT) LTD 1998 (2) ZLR 136 (S)

Flynote

Immovable property — ownership — sectional title — right of sectional title holder to use common areas — no subdivision made to exclude common areas — notarial deed — amendment of — when deed may be amended — requirement to give notice to Registrar of Deeds — title to one section sold to third party — whether deed can be amended on basis of what parties had originally intended

Headnote

The appellant owned a stand in Victoria Falls township, on which it built a shopping arcade which consisted of several shops and flats. Part of the stand was undeveloped. There was also on the land a smaller building. In respect of the shopping arcade, the appellant wanted to sell off the shops and flats under the procedure specified in s 27 of the Deeds Registries Act [Chapter 20:05]. This allows for the creation of undivided shares with exclusive rights of occupation and equates in other countries to sectional title. No subdivision of the property was made to exclude the undeveloped part of the stand or the smaller building from the scope of the sectional title scheme.

Several years after the scheme was drawn up and the shops and flats disposed of, the respondent bought five of the undivided shares from the original owner. The respondent then asserted that it had the right to make use of the "common property", which was defined in the constitution of the shop owners' association as being that portion of the property over which no exclusive right of occupation had been granted. The appellant sought a declaratory order to the effect that the land outside the shopping arcade, as well as the smaller building, did not belong to the respondent and the other shop and flat owners as their common property, and that the appellant was entitled to register its ownership of the land either by amending the original notarial deed or by obtaining a certificate of registered title. The High Court declined to grant the order. On appeal:

Held, that s 27(3) of the Deed Registries Act prohibits an amendment to a notarial deed which would have the effect of altering the number of undivided shares in the land as originally created unless the land had been subdivided. A permit would be required from the local authority before there could be any subdivision, and the appellant would have to make the necessary application to the authority.

Held, further, that the original deed, which the shop and flat owners had no part in drawing up, was so full of mistakes and contradictions that no clear intent could be said to emerge from it. While a contract can be amended by the court to reflect what the parties originally intended, to prevent the document being used as a vehicle for fraud whereby a person could

obtain what he knows he was never entitled to, this was not the situation here. The respondent was an innocent purchaser for value. Secondly, the true intentions of the original parties (as contended by the appellant) could not have been given effect to, because subdivision was a legal requirement. Thirdly, there was no mutual mistake: the respondent claimed to have bought what the deed stated, that is, exclusive rights of occupation of five shops with an undivided share in the common property.

Held, further, that the court could not rectify an error in the deed of transfer. The error lay outside the deed, in drawing the deed without seeking subdivision. Once the appellant did that, the scheme necessarily resulted in the land shares becoming common property.