MIKESOME INVESTMENTS (PVT) LTD v SILCOCKS INVESTMENTS (PVT) LTD 2003 (2) ZLR 56 (H)

Flynote

Contract — legality— contract illegal for want of compliance with statutory formalities — whether payment made is recoverable

Estate agent — commission — contract illegal due to non-compliance with statutory formalities — commission not payable

Land — subdivision — sale of subdivision before approval in terms of s39(1) of the Regional Town and Country Planning Act [Chapter 29:12] — unlawfulness of sale

Sale — land — subdivision —subdivision sold before subdivisional approval granted — illegality of sale

Headnote

The defendant gave the plaintiff estate agent a mandate to sell, on its behalf, certain residential stands on two farms owned by the defendant. A plan had been drawn up showing the subdivisions but approval for the subdivision as required by the Regional Town and Country Planning Act [Chapter 29:12] had not been obtained at the time the plaintiff executed the mandate. The approval was subsequently obtained, but the plaintiff had sold some of the stands before the approval was obtained and the defendant paid the plaintiff a sum of money as part commission on those sales. The plaintiff claimed commission for the sales and the defendant counter-claimed for the refund of the commission it had paid. The matter proceeded as a stated case, subject to certain evidence being led. The questions of law stated for decision were:

1. Whether at the time the plaintiff effected its mandate, the contract was void for want of compliance with s 39(1) of the Act.

2. If so, whether the plaintiff was entitled to sue for its commission.

3. Whether the defendant was entitled to a refund of the part commission it had paid.

A Held, that an agreement for the change of ownership of any portion of a property, except in accordance with a permit granted under the Act which allows for a subdivision, is prohibited. As the sales were illegal, there was no valid basis for the plaintiff to claim commission on the sales it effected.

Held, further, that the enrichment of the plaintiff was without a legal cause because every sale it concluded was illegal. That being the case, the defendant was entitled to a refund of the commission by virtue of the condictio ob turpem vel iniustam causam. The in pari delicto rule did not apply in these circumstances.