The applicant instituted summons action against the three
respondents in HC707/15 for payment of $320,000= as recompense for the
financial loss it suffered as a result of the alleged negligent
misrepresentation by them that they had a mandate to sell an undivided portion
of Stand 32 Gatooma Township held by a company known as Laxman Investments Company
(Pvt) Ltd on behalf of that company when in actual fact they did not.
It averred, in its declaration, that in the course and
scope of their business of providing legal services as a law firm, the
respondents represented to it that they were mandated and authorized by the
owner to be its agents and attorneys to sell the property. They represented
that the third respondent had been granted a general power of attorney by the
owner to represent the owner in concluding a sale agreement and to accept payment
of the purchase price and to do the conveyancing work in order to pass transfer
of the property to the seller.
The applicant further averred that by virtue of their
special position, as providers of legal services, it was reasonably foreseeable
that the plaintiff would rely on their representation to decide to enter into a
sale agreement involving the property. The applicant was induced by such
representation to enter into a sale agreement and to pay the purchase price of
$320,000= through the medium of the respondents who forwarded it to the seller
who turned out not to be the owner of the property.
It averred that the respondents, as providers of
professional legal services, owed it a duty to take reasonable care that their
representation was true and reliable. They, however, wrongfully breached that
duty of care in that the representation turned out to be a negligent
misrepresentation which was incorrect and false because the true owner never
mandated them as alleged. In addition, it was legally impossible to sell the
undivided portion of the land as there was no subdivision permit as provided
for in the Regional, Town and Country Planning Act [Chapter 29:12].
The respondents entered appearance to defend and filed a
joint plea in the following:
“Defendants plead as follows to plaintiff's summons and
Declaration;
1. Ad Paras 1,2
No issues
2. Ad Para 3
It is denied that third defendant is employed by first and
second defendants as a legal secretary.
3. Ad Para 4
It is denied that first and second defendants made any of
the representations alleged, either personally or through third defendant, or
during the course and scope of their business. It is admitted that third
defendant, in her personal capacity, made representations that she was mandated
by General Power of Attorney;
3.1 To sell the property and receive the purchase price on
behalf of the seller.
3.2 To prepare an agreement of sale and issue the necessary
instructions to effect subdivision and transfer of the property.
4. Ad Para 5
It is denied that first and second defendants could
reasonably have foreseen that plaintiff would place any reliance upon them. It
is further denied that they made any representations to plaintiff.
5. Ad Para 6
5.1 It is denied that first and second defendants made any
representations to plaintiff or that there was any nexus between plaintiff and
themselves as legal practitioners, or that they played any part in inducing
plaintiff as averred.
5.2 It is denied that third defendant's representations to
plaintiff induced him to enter into the written agreement of sale.
5.3 It is admitted that third defendant received the sum
of US$320,000= from plaintiff on behalf of the seller of the property and that
payment was made by plaintiff in the belief that third defendant was authorized
to receive payment in terms of a power of attorney executed by the seller.
5.4 Apart from the admission aforesaid, all averments
herein are denied and plaintiff is put to the proof whereof.
6. Ad Para 7
This is denied and plaintiff is put to the proof thereof.
7. Ad Para 8
7.1 Ad Para 8.3, it is admitted that first and second
defendants ought to have known of the provisions of the said Act. It is denied,
however, that they prepared the agreement of sale. It is further denied that
the agreement of sale in any way contravenes the said Act.
7.2 In all other respects, the averments in this Para are
denied and plaintiff is put to the proof thereof.
8. Ad Para 9, 10 and 11
These are denied and plaintiff is put to the proof thereof.
9. Ad Para 12
It is denied that first and second defendants provided any
professional legal services to plaintiff. In all other respects, the averments
herein are denied and plaintiff is put to the proof thereof.
10. These are denied and plaintiff is put to the proof
thereof.
WHEREFORE, defendants pray for dismissal of plaintiff's
claim and costs of this action.”…,.
It is significant that the plea in question, and, indeed,
the notice of appearance to defend were prepared, signed and filed by the law
firm of Jarvis Palframan. In addition, it is noted that the reference of the
person dealing with the matter is given as 'DGP/jo.' The first respondent's
initials, even from the letter that he wrote on 13 November 2014, annexure “D”
to the application, are 'DGP'. One cannot help observing that the third
respondent's initials are 'JO' for Jolie Obert. Put together, therefore, it
means that the individuals who were dealing with this matter right from the
start are the first and third respondents.
In practice, law firms use references on correspondence and
court process which start with the initials of the legal practitioner involved
followed by a slash and then the initials of the secretary typing for that
legal practitioner. It is a practice that is as old as the practice of law
itself.
Counsel for the respondents strongly argued that the
inference that the first and third respondents' initials are the ones appended
on all the court processes emanating from that law firm cannot be properly
made.
In my view, that is trifling with the court in the extreme.
A reference is put on court process or correspondence in
order to identify both the legal practitioners and the secretary authoring it
and nothing else. Courts of law are not robots that are programmed to accept
only that which legal practitioners feed them with. They make observations
including that which I have made. The business of judgeship would be extremely
tedious if judges were to turn a blind eye on the obvious merely because it is
convenient for counsel to do so.
Upon receipt of the plea, which I have cited above, the
applicant launched this summary judgment application on the basis that the plea
reveals no bona fide defence at all to the applicant's claim and that
appearance has been entered solely for dilatory purposes. The applicant
maintained that a bald denial that the third respondent was employed by the
firm is made, consistent with the fact that she was at all times employed and
attending to members of the public at the firm, especially as the applicant
received rentals for two months for the property from the third respondent at
the offices of the firm. This was after the purported agreement had been
signed.
The applicant asserted that the sale agreement was prepared
by the law firm whose address is given as that of the seller and it appoints
them as the conveyancers selected by the seller to undertake the transfer.
Accordingly, his claim remains unassailable.
The respondents' lack of bona fides is reflected in their
attempt to disown an employee, who, at all material times, was working from the
business offices of the firm, using their office, computers and stationery,
attending to members of the public, accepting payment of the money being
claimed and liaising with the first respondent on all that she did.
On 4 November 2014, the legal practitioners of the
applicant, Mutatu and Partners, addressed a letter of demand to the law firm.
That letter was responded to on 13 November 2014 by the first respondent, by
email, which reads, in relevant part, thus:
“Thank you for your letter
dated 4th November 2014 which was sent to us by email. Your client
entered into an agreement of sale with Laxman Investments (Pvt) Ltd in respect
of portion of a commercial property owned by the said company. As you are no
doubt aware, the agreement provided for the purchase price to be paid in cash,
direct to the seller. Our Mrs Obert was acting for the seller under a power
of attorney granted by Mr Baloo Laxman, a Director of the seller. The purchase
price was forwarded to the seller by way of a cash-in-transit delivery made by
Fawcetts under armed guard and we hold the Fawcetts delivery note indicating
that delivery.
Despite the fact that
your client appears to have been paid two months rental by the seller and
despite considerable documentation to verify the transaction, the seller is now
alleging that the transaction was inspired by some person resident in Harare
who was acting fraudulently and who has forged signatures of both Directors and
carried out an elaborate scam.
We cannot be certain, at
this stage, as to the true facts. We have taken the precaution, however, of
reporting the matter to the officer in charge of the serious crimes section of
CID Fraud Squad in Harare and we have provided him with detailed statements
relating to your client's transaction and that of a second sale which was
carried out in relation to an adjoining property. The matter is currently under
investigation and we will keep you advised of developments.
Yours faithfully
D. G. Palframan.”
This was before it became too hot in the kitchen; before
the applicant had commenced pointing an accusing finger at the law firm and the
legal practice in question was then accepting that both D. G Palframan and Mrs
Obert were part of it. Things were to take a nasty turn though the moment the
applicant started trying to hold them to account for their professional
conduct. In fact, as is apparent upon reference to the plea which I have quoted
verbatim above, even at that stage of filing a plea, their position was still
that Palframan was part of the firm. That also changed when they opposed the
summary judgment application.
Although Palframan prepared and signed the notice of
opposition which was typed by Obert as his secretary, through the agency of
Jarvis Palframan Legal Practitioners, as signified by his signature and their
reference, in his opposing affidavit he stated that Obert was not an employee
of either himself or the second respondent but worked for him as a Conveyancing
Clerk for many years before he retired eight years ago.
Paraphrasing Palframan's sworn statement on the
relationship of the respondents will not do justice to it. He stated:
“3.1 The 3rd respondent is not an employee of either myself
or the second respondent.
She worked for me as a Conveyancing Clerk for many years
until I finally retired, approximately eight years ago. Since that time, my
legal work has considered mainly of consulting work which I carry out in Harare
or from my office at home. The third respondent works as an independent agent
and since my retirement she has not received a salary either from myself or
from the second respondent. She sets her own hours and although she uses the
address of the Practice for the sake of convenience, her office merely adjoins
the general complex occupied by the legal firm Jarvis Palframan and is entirely
separate, with a distinct and clearly independent outside entrance separated
from the main entrance to the Practice complex….,.
3.2 The third respondent's work consists of rental
collections for several of her clients and general work relating to agreements
and property transactions. She and I do work together in conveyancing or
certain contractual matters which may arise, in which event we have a
fee-sharing arrangement….,..
3.3 Although third respondent and I would, in normal
circumstances, have benefited from conveyancing fees which would have been due
pursuant to the purported transaction between the applicant and the seller, the
execution of the agreement of sale itself was an entirely separate and
independent transaction which was carried out by the applicant and the third
respondent who was acting in the bona fide belief that she was duly authorized
under a power of attorney granted by the seller.
3.4 I control an office which is next door to third
respondent's office which I use largely to store files and to accommodate the
bookkeeper who is employed by a small mining company with which I am associated….,.
3.5 The legal practice, which is known as Jarvis Palframan,
is owned by second respondent. Nominally, I am still a consultant to the
practice but second respondent and I are not partners and neither am I an
employee of the practice. There is no fee-sharing arrangement between second
respondent and myself….,.
4. The use of the term 'our Mrs Obert' merely indicates an
association and does not signify that she is an employee….,.
4.6 There is nothing in the papers to indicate negligence
or fraud (which has not even been alleged in the summons). Liability has been
denied for very good reason, on the basis that there was no duty of care owed
to applicant and that there was no negligence on the part of the respondents….,.”
Now that is a mouthful.
The other two respondents also deposed to affidavits
generally associating themselves with what Palframan says. Obert generously
added that the discovery that they had been representing what she terms 'a
skilled confidence trickster' was made by none other than Palframan himself
when by chance he met the real Mr Laxman, at which point Palframan and herself
made a report to the police.
The essence of what the respondents are saying is that the
legal practice of Jarvis Palframan belongs to Stephen Murambasvina alone.
However, there is also Douglas Palframan hovering about who
retired eight years ago and does consultancy work at the firm where he has an
office, although he also works from home and Harare but prefers to do mining.
He has retained his former secretary or Conveyancing Clerk, Jolie Obert, as 'an
independent agent', whatever that means, who also has an office somewhere at
that firm and is in some kind of partnership with Palframan. She and Palframan
are involved in conveyancing work together and they have “a fee-sharing
arrangement.”
All that is done in the name of the firm.
However, according to the respondents, both Palframan and
Obert are neither partners nor employees of the firm but stand alone - although
Palframan responds to correspondence addressed to the firm. Although Obert is not a lawyer herself, being
only a former Conveyancing Clerk there, she drafts agreements for clients in
the name of the firm and undertakes conveyancing work in its name (one wonders
who signs her documents for lodgment).
Obert also gets herself appointed by general power of
attorney to represent clients in their transactions with members of the public
(third parties), collects money from third parties on behalf of clients, which
she does not receipt but transmits to her clients by Fawcett Security. When she
receives rentals from clients for transmission to third parties, she does so at
the offices of the firm but does not issue a receipt for what is, in essence,
trust funds.
A volley of questions pop up: What kind of law firm is
this? Is it operating in accordance with the law? Is the Law Society of
Zimbabwe, which regulates legal practitioners in this country, aware of such a
practice? Does it authorize it? Did it issue Palframan with a practicing
certificate when he is into mining not the practice of law? If so, on what
terms? Did it issue Jolie Obert with a practicing certificate?
Clearly, she is practicing law at the premises of that law
firm and if the respondents are to be believed, she is doing so under the watch
of the firm and illegally.
It is only if the story, as presented by the respondents,
on the operations of that practice can be believed that they can successfully
ward off this summary judgment application.
Counsel for the respondents submitted that it is not for
the court, in an application of this nature, to concern itself with whether
that explanation makes sense or not or with the conduct of the partners of the
firm, it should be enough that they have denied that Jolie Obert is an employee
or that Palframan is a partner. The truthfulness of that should be tested at
the trial. All they have done is to establish triable issues.
It reminds me of the sentiments of McNALLY JA in Matambo v
Mutsago 1996 (1) ZLR 101 (S)…, where the learned Judge of Appeal said:
“However charmingly, smoothly, or impressively Mr Mutsago
made these statements, the fact is that they are mechanically impossible. If a
witness says he saw water flowing uphill unaided by a pump, you do not judge
his veracity by reference to his demeanour. You apply the law of physics.”
The Law Society of Zimbabwe takes pride in keeping a
hawkish eye on the operations of all law firms in this country. It would not
allow such glaring infractions to exist at a firm in Kwekwe, and, during spot
checks, would certainly bring such malpractices to a stop. What it means is
that the picture painted by the respondents, of a ragged practice, is so
impossible in the circumstances of legal practice in Zimbabwe at the moment
that it should be dismissed as nothing more than the self-serving fulminations
of a group that finds itself cornered by a law suit for professional negligence
which they simply cannot defend.
Summary judgment is an extraordinary remedy in the sense
that it denies a party who has shown an interest to defend a claim, the
opportunity to do so. It is a procedure conceived so that:
“A mala fide defendant might summarily be denied, except
under onerous conditions, the benefit of the fundamental principle of audi
alteram partem…, when all the proposed defences to the plaintiff's claim are
unarguable, both in fact and in law…,.” (Chrisma v Stutchberry 1973 (1) RLR
277).
It has been stated, conversely, that, in order to succeed
in defeating a summary judgment application, the respondent must set out a bona
fide defence by alleging facts which, if proved at the trial, would entitle him
to succeed. As poignantly stated by ZIYAMBI JA in Kingstons Ltd v L. D Ineson
(Pvt) Ltd 2006 (1) ZLR 451 (S)…,:
“Not every defence raised by a defendant will succeed in
defeating a plaintiff's claim for summary judgment. Thus, what the defendant
must do is to raise a bona fide defence – a 'plausible case' – with 'sufficient
clarity and completeness' to enable the court to determine whether the
affidavit discloses a bona fide defence. He must allege facts which, if
established, 'would entitle him to succeed.'
See Jena v
Nechipote 1986 (1) ZLR 29 (S); Mbayiwa v Eastern Highlands Motel (Pvt) Ltd SC139-86; Rex v Rhodian Investments
Trust (Pvt) Ltd 1957 R v N 723 (SR).”
Having contented themselves with denials in the plea while
admitting that the applicant made payment to the third respondent in the belief
that she was authorized to receive payment by the seller, the respondents went
on to burn their fingers in their opposition to this application by setting out
the activities of the third respondent as being entirely the practice of law.
They simply could not disown her as their employee because everything points to
her being one.
To that extent, should the respondents be allowed to go to
trial in order to abuse the court by trying to disprove the obvious? Should
they be given an opportunity to spend more court time arguing that a lawyer
and/or his employee who represent a person in the mistaken belief that such
person is Laxman when in fact that person is not Laxman but “a skilled
confidence trickster” and misleads members of the public into believing that it
is Laxman that they represent, are not negligent? Or that when section 39(1)(b)(i)
of the Regional, Town and Country Planning Act [Chapter 29:12] prohibits the
sale of an undivided piece of land without a subdivision permit, a lawyer who
represents a purported seller in breach of that law is not negligent?
What is there to try in such a matter?...,.
Having said that, the matter is therefore resolved. If ever
the respondents had a defence to this claim which could be stood over for
trial, they did not submit it in their papers - especially in the plea they
intend to rely upon. I am satisfied, therefore, that summary judgment should be
granted.
In the result, it is order that:
1. The respondents, jointly and severally, the one paying
the others to be absolved, shall pay to the applicant the sum of $320,000=
being recompense for the financial loss suffered by him as a result of their
negligent misrepresentation.
2. The respondents shall, jointly and severally, the one
paying the others to be absolved, pay interest on that sum a tempore morae at
the prescribed rate from 10 April 2014 to date of payment.
3. The respondents shall pay costs of suit on an
ordinary scale.
