The plaintiff filed a delictual claim against the defendant, seeking damages in the sum of US$709,948.

It was specifically alleged in the plaintiff's declaration that the defendant wrongfully and unlawfully sought to levy import duty on certain resin imported by the plaintiff for its manufacturing processes using an incorrect tariff, causing the plaintiff to litigate on the matter. By the time the litigation was resolved, in favour of the plaintiff, the imported resin, which remained uncleared for customs purposes, had become moribund and useless to the importer, thereby causing the total loss that was claimed in the summons under various heads…,.

The claim was defended primarily on the basis, that, in seeking to levy duty on a higher tariff than previously levied, the defendant was not acting with malice and that its actions were not wrongful and unlawful to ground an action in delict. Further, it was denied that the containers of the imported resin were presented to the defendant for the purposes of customs clearance.

The facts giving rise to the suit between the parties are largely common cause.

The plaintiff is an established public company, specializing in the production and manufacture of timber and timber products. It is listed on the local bourse. As part of its manufacturing processes, it uses a certain resin (hereinafter referred to as “the chemical”), that is imported into the country and import duty paid.

Over a period of about ten years, the plaintiff imported this resin at a steady 5% duty payable to the defendant.

In or about February 2005, the plaintiff received four containers of the imported chemical. When it presented the chemicals to the defendant for clearance, duty was levied not on the usual and expected 5% but at 25%.

The plaintiff approached this court for adjudication on the correct level of duty payable and its contentions were upheld. The defendant immediately noted an appeal against the decision of this court. In the meanwhile, the parties reached an agreement that the four containers be released upon the plaintiff paying a deposit against the required duty.

Again, in the meanwhile, in May 2005, the plaintiff imported into the country ten other containers of the chemical while the legal wrangle was still on. There is a dispute as to whether these ten containers were presented for customs clearance or not….,.

On 7 April 2006, the Supreme Court handed down its judgment, upholding the High Court judgment and vindicating the plaintiff's stance.

In June 2006, the ten containers of the chemical were cleared by the defendant at 5% duty. It was then discovered that the chemical had become moribund and valueless to the importer.

On 27 September 2006, the plaintiff issued summons against the defendant as detailed above.

In the summons, the plaintiff claimed the sum of US$285,123=76 as the replacement value of the chemical that went moribund; US$20,016=44 as the value of orders that were lost as a result of the plaintiff's failure to use the moribund chemical; and the sum of US$404,807=80 as damages for lost business.

At the trial of the matter, three issues had to be resolved by evidence. These were;

(i) Firstly, whether the order issued by this court also covered the ten containers, the subject of this dispute; and

(ii) Secondly, whether the ten containers were presented to the defendant for duty purposes;

(iii) Thirdly, in issue was the quantum of damages that the plaintiff would be entitled to in the event that the defendant was found liable.

In support of its case, the plaintiff led evidence, firstly, from one Joseph Chikwana. He was the plaintiff's Purchasing Manager at the time the dispute arose.

His testimony was largely to reiterate the facts that are common cause in this dispute concerning the first four containers of the chemical. Regarding the ten containers forming the subject of this suit, he testified as follows:

These were imported about six months after the first four and in respect of which the parties were before this court, locked in litigation over the correct tariff to be used for calculating duty. The ten containers came through Beira, and, when they arrived in Mutare, the plaintiff sought to have them cleared. The plaintiff did not submit any documents to the defendant as there was a pending case between the parties. The containers were placed in a bonded warehouse.

When the customs clearance agent came back with the news of the stalemate between the parties, the witness personally visited the defendant's office and was attended to by a Mr Chamboko and a lady officer who was assisting Mr Chamboko. The discussions referred to the pending case and the parties felt that they could not move from that position due to the pending litigation. The defendant demanded duty at the higher rate which the plaintiff was not in a position to pay at the time.

The witness was involved in the formulation of the claims that the plaintiff finally brought against the defendant.

He explained that the claim for $22 billion was the fees that the plaintiff paid to the agent to have the containers released.

During the period of the dispute, the plaintiff had pending orders from its overseas customers. Because of the time it took to resolve the issue, the plaintiff was unable to meet the orders, resulting in the orders being cancelled. The value of the lost orders was captured in a spread sheet that the plaintiff's Finance Department generated. The spread sheet was adduced into evidence. The value of the lost orders was in the sum of US$74,134=97.

Using a profit margin of 27%, the plaintiff claimed damages in the sum of US$20,016=44 under this head.

The chemicals expired whilst they were in the containers and awaiting clearance. The value of replacing the chemical was in the sum of US$285,123=76.

During the time that the parties were locked in the dispute, the plaintiff could not produce most of its products and thus lost business due to the unavailability of its products. It calculated this loss at US$404,807=80. Another spread sheet was adduced into evidence, through the witness, showing the plaintiff's calculation of the lost business.

The plaintiff tried to mitigate its damages by borrowing glue from other timber processing companies.

When the judgment of the High Court became available, in November 2005, the witness took the judgment to the defendant, seeking release of the ten containers. He was informed that the defendant would appeal against the judgment - which they did.

Pending determination of the appeal, the plaintiff again approached the defendant for the release of the containers. The approach was not successful leading the plaintiff to approach this court on a certificate of urgency. No judgment was handed down in the matter which was heard on 8 December 2005.

In my view, the witness is an articulate and confident man who fared well under cross examination. He was forthright in his answers to questions put to him under cross-examination and readily admitted to some of the shortcomings in the assumptions that had been used in calculating the damages claimed by the plaintiff. While I found the witness unnecessarily verbose in his responses, I have no reason to disbelieve his evidence.

The second witness to testify on the plaintiff's behalf was one Prince Nyemba. At the time, he was the plaintiff's Finance Director. He joined the plaintiff's employment in August 2006 and was not yet with the plaintiff in May 2005 when the events forming the subject of this trial were unfolding. The plaintiff naturally keeps records of its transactions and the witness had access to these.

The witness then testified as to what the plaintiff's records revealed its loss to be as a result of the delay in having the glue released to it by the defendant.

Under cross-examination, the witness admitted that the claims by the plaintiff had been calculated without taking into account certain exigencies and variables such as changing exchange rates and fluctuating costs of production.

Due to the fact that the witness was not an employee of the plaintiff at the relevant time, and also due to the concessions that he made under cross examination, that the plaintiff's claim was aggressively if not inaccurately calculated, I shall place marginal probative value on his testimony and will only rely on it where it is corroborated by other reliable evidence.

After the testimony of this witness, the plaintiff closed its case.

The defendant opened its case by calling one Clements Kwenda. He is employed by the defendant as a team Leader at Forbes Border Post, having joined the then Department of Customs and Excise in 1990.

The witness detailed the procedures that an importer of goods into the country has to observe before his or her goods can be cleared. Regarding the claim before the court, he testified as follows:

The plaintiff imported two separate lots of chemicals. Firstly, it imported four containers of the chemicals. An entry for the four was submitted to the defendant. A dispute arose as the defendant called for duty at a rate higher than the plaintiff was offering. The matter was then referred to the courts. At a later stage, and while the matter was pending before the court, the plaintiff paid a deposit for the release of the four containers.

As at 25 February 2005, the plaintiff was aware that it could have the ten containers released upon payment of a deposit.

In respect of the ten containers, Bills of Entry for the ten were submitted to the defendant on 29 June 2006. The containers were all cleared on the same date. Prior to this, he was unaware of any letter that the plaintiff had written to the defendant seeking the release of the ten containers. He was aware that a letter had been addressed to the defendant's Harare office though he had not seen it.

Under cross-examination, the witness could not dispute, that, for the previous eleven years the plaintiff had imported the chemical at 5% duty. In his opinion, the officer who inspected the goods and asked for duty at a higher rate was simply doing his work and did not err. He did not agree that the departure from the classification that had been used for the past eleven years had been done with an improper motive.

The witness gave his evidence well. I find that most of his testimony was on facts that are common cause. He was clear as to what transpired between the parties although his attempt to draw a distinction between the Harare and the Mutare offices of the defendant was without basis. On the main, I will rely on the testimony of this witness.

The defendant called the testimony of one Clifford Mubaiwa Chamboko next. He is the man in charge of the defendant's offices in Mutare.

On 17 February 2005, a meeting was held in his office pertaining to the clearance of the four containers. The plaintiff's first witness and the clearing agent were in attendance. The tariff dispute between the parties was discussed.

At no stage did the defendant refuse to accept the entry relating to the ten containers. There was no meeting between the parties regarding the ten containers.

Under cross-examination, the witness maintained that the defendant was justified in re-classifying the imported chemicals. He pointed out that the classification of imports is a complex matter and that for that matter, errors would occur.

The witness gave his evidence in a very measured way; so measured was he, that, at times, he appeared slow. Despite this, I have no reason to disbelieve his evidence as, in my view, there are few material disputes of facts in this matter.

After the testimony of this witness, the defendant closed its case.

At the pre–trial conference of the matter, eight issues were identified for trial as follows:

1. Whether the declarator issued by the Honourable Justice Hungwe, under case no HC838/05, covered the four containers or the ten containers, which are the subject matter of this dispute;

2. Whether the containers were declared for duty purposes;

3. What is the procedure to be followed by an importer of goods in circumstances where there is a dispute in relation to a consignment that has been declared for duty purposes;

4. Whether, in the absence of compliance with such procedure, any liability attaches to the defendant;

5. Whether the defendant is liable to the plaintiff in respect of contents (that) became moribund as well as the customs clearance, storage charges and demurrage charges associated with the containers;

6. Whether the defendant is liable to the plaintiff for special damages in respect of cancelled orders and lost business;

7. In respect of all damages, the quantum of damages that may be awarded to the plaintiff, if any; and

8. What order is to be made as regards costs.

In my view, the issue that falls for determination in this trial, in the main, is whether or not the defendant's conduct was culpable under the lex Aquilia. If so, what damages did the plaintiff suffer?

I narrow down the issues in this manner as, in my view, resolution of issues one to four, as settled at the pre-trial conference, will not resolve the dispute between the parties.

Having listened to the evidence of the parties, it appears clear to me that while the declarator by HUNGWE J specifically dealt with the four containers in respect of which a dispute had been formally declared, his ruling, and that of the Supreme Court on the matter would bind the parties in the importation of similar chemicals and would thus have a direct bearing on the importation of the ten containers.

I also note that while the ten containers may not have been formally presented to the defendant for clearance, the parties were locked in a dispute over the four containers in respect of the duty payable, and, on a practical note, the defendant was most unlikely to accept duty at the lower tariff pending determination of the litigation that was then unfolding between the parties.

The parties are all familiar with the procedures that have to be observed in relation to the importation of products and an answer to this question will, in my view, not bring us nearer to the resolution of the matter than we were when we started off.

I further form the view that the plaintiff has not approached this court because the defendant allegedly did not clear the ten containers of the chemical. The dispute between the parties relates to the defendant's insistence on the incorrect rate of duty after the High Court ruling, and, the issue that arises, in my view, is whether such insistence, including the unsuccessful approach to the Supreme Court on the issue is culpable and renders the defendant liable to the plaintiff in delict.

I now return to the issues as I see them.

In my view, the plaintiff's claim could have been pleaded with greater clarity to reveal the plaintiff's cause of action against the defendant. I must confess, that, I am at a loss as to the cause of action that the plaintiff is raising against the defendant. I had hoped that the cause of action would become clear with the leading of evidence and the final submissions by counsel in the matter.

Unfortunately, it has not, as I shall show below.

The plaintiff has pleaded, in its declaration, that the defendant acted wrongfully against the plaintiff, leading to the plaintiff incurring certain losses.

Reading through the plaintiff's declaration, I discern three possible actions by the defendant that the plaintiff appears to be terming “wrongful”:

(i) Firstly, the plaintiff alleges, in paragraph 4 of the declaration, that the defendant acted wrongfully and unlawfully when it demanded duty for the first four containers at 25%.

(ii) Secondly, it is alleged, in paragraph 6, that the defendant acted wrongfully and unlawfully and with malice when it noted an appeal against the decision of this court.

(iii) Finally, the plaintiff alleges, in paragraph 7, that the defendant acted wrongfully by refusing to clear the ten containers on duty other than the erroneously calculated 25%.

As pleaded above, the plaintiff alleges wrongful action leading to an economic loss without grounding its claim in the lex Aquilia that requires a mental element in the form of negligence or dolus before liability can be founded.

It is my understanding of our law of delict that actions under the lex Aquilia are meant to compensate the plaintiff for the damages occasioned to him or her by the wrongful act attributable to the defendant's fault. Thus, for a successful prosecution of a claim under the action, a plaintiff must prove a wrongful act by the defendant, patrimonial or economic loss, and fault on the part of the defendant.

It is common cause that the plaintiff has not pleaded that the defendant acted negligently in the circumstances of this matter. No particulars of the negligence are pleaded. The plaintiff has not specifically pleaded that the defendant acted intentionally and that it intended to cause loss to the plaintiff by its actions.

It is trite, in my view, that in an action founded on the lex Aquilia, the mental element status of the defendant must be specifically pleaded so that the defendant knows the case that it has to meet. Lack of such particularity, in my view, is fatal to the plaintiff's claim as it does not disclose the plaintiff's cause of action.

On this basis alone, I would absolve the defendant from the instance.

However, I am somewhat handicapped by two events that did not occur in this matter:

(i) Firstly, the defendant did not except to the plaintiff's pleadings for the cause of action to be crystallized before the defendant pleaded thereto.

(ii) Secondly, the matter proceeded through a pre-trial conference where the parties appeared to have been agreed that what was being pleaded was the lex Aquilia and the real issue for determination was whether the defendant was liable to the plaintiff for the pure economic loss that resulted from the defendant's actions.

It is true, in practice, that evidence led at the trial to prove culpa under the lex Aquilia invariably proves the wrongfulness of the conduct: see Van Der Eeecken v Salvation Army Property Co and Another 2008 (4) SA 28 (T)…,.

However, the correct legal position, in my view, is that culpa, in the form of negligence or dolus, like wrongfulness, is an essential requirement for liability under the Aquilian action. While culpable conduct causing harm is not actionable unless it is also wrongful, conduct that is not negligently or intentionally caused but that results in harm is equally not actionable unless there was a duty to prevent the occurrence of harm to the plaintiff. Where the defendant owes the plaintiff no legal duty, there is no wrongfulness. This means that despite the existence of blameworthy conduct on his or her part, the defendant enjoys immunity against liability for damages resulting from such conduct.

I will therefore proceed to examine the evidence that was led at the trial to assess whether the evidence establishes both the culpa and the wrongfulness.

As indicated above, the plaintiff did not plead negligence. Similarly, the tenor of the evidence led at the trial was not suggestive of any negligent conduct on the part of the defendant.

The essence of Joseph Chikwana's evidence was to the effect that the defendant simply refused to release all the containers of chemicals on duty other than at the wrongly calculated 25%. He did not proceed to suggest that such conduct by the defendant in this regard was negligent in any respect.

In his evidence in chief, the plaintiff's main witness did not at all testify as to the defendant's state of mind in refusing to release the containers of the chemicals at 5% duty. It was only in answer to a question put to him in cross-examination that the witness was drawn into testifying that the actions by the defendant were malicious and deliberate although the plaintiff had no complaints to make against the employees of the defendant.

One clearly discerns a contradiction in the evidence so elicited from the witness.

It is common cause that the defendant acts though the agency of its employees. and, if the plaintiff had no complaints about the manner in which the defendant's employees had handled the matters, it is difficult to envisage in what way the defendant acted maliciously and intentionally against the plaintiff.

On the basis of the above, I would find that the plaintiff did not lead any evidence to show that the defendant's conduct, even if found wrongful, was accompanied by such a mental element as to find liability under the lex Aquilia.

This is an appeal from a judgment of the High Court given on 9 March 2006 dismissing with costs an application for an order compelling the first respondent to transfer Stand 151 of Plot 216 of Good Hope Township of Good Hope into the appellant's name in terms of an agreement of sale entered into between the appellant and the late Robert Mubayiwa Marere on 30 October 1998.

The appellant and the late Robert Mubayiwa Marere (“the deceased”) entered into a written contract on 30 October 1998 in terms of which the latter agreed to sell and the former agreed to purchase Stand 151 of Plot 216 of Good Hope Township of Good Hope (“the property”) for $230,000=.

The parties provided for two alternative methods of payment of the purchase price under Clauses 12 and 7. Under Clause 12, they agreed that the purchase price would be paid as follows:

“1. The sum of $50,000= (fifty thousand dollars) to be paid to ERS REALTY'S TRUST ACCOUNT on signing of this Agreement of Sale.

2. The balance of $180,000= (one hundred and eighty thousand dollars) to be paid at the rate of $30,000= (thirty thousand dollars) per month commencing on the 1st of July 1998 with interest at the rate of 25% effected if the purchaser does not meet the deadline of 30 December 1998.”

Under Clause 7, headed “TRANSFER”, the parties agreed that:

“Transfer shall be effected by the seller's conveyancers and the purchaser shall, within a period of fourteen days, pay or furnish a Bank or Building Society guarantee for payment of the purchase price against transfer. If such payment or guarantee shall not be furnished to the seller's conveyancers the purchase price shall bear interest at 19% per annum from the expiry of such period of fourteen (14) days until transfer shall be effected.”

The details of payment provided for under Clause 7 are so different from those under Clause 12 that an inference must be drawn, as a matter of construction from the terms used, that the parties intended that the appellant would have to decide which of the two methods of payment to follow and be bound by the terms.

Under Clause 10, the parties agreed that in the event of the purchaser failing to pay any sum owing under the agreement on the due date or in the event of any breach of any other condition of the agreement, the seller had to give the purchaser written notice to remedy the breach within fourteen days of the posting of such notice failing which the seller would be entitled to cancel and terminate the agreement of sale, or, alternatively, have the option to institute legal proceedings against the purchaser for the balance of the purchase price then owing under the agreement.

Lastly, they agreed, under Clause 11, that the agreement of sale constituted the entire contract between them and no variation of it would be valid unless reduced to writing and signed by or on behalf of the parties.

No payment of the sum of $50,000 was made by the appellant on signing of the agreement on 30 October 1998 in terms of Clause 12(1) of the contract. An amount of $50,000 had been paid to ERS Realty on 21 May 1998. The receipt states that the money was paid as a deposit of the purchase price in respect of Stand 21G of Lot 216 of Good Hope Township.

Counsel for the appellant argued, on appeal, that Stand 21G of Lot 216 was in fact the same as Stand 151 of Lot 216 of Good Hope Township.

Whilst that may be the case there was nothing said by the appellant in the founding affidavit to support the contention. Similarly, the founding affidavit was silent as to whether Stand 21G of Lot 216 of Good Hope Township in respect of the purchase price of which an instalment of $3,000 was paid to ERS Realty on 31 July 1998 was the same as Stand 151 of Lot 216 of Good Hope Township.

Five receipts of payments of $30,000 made by the appellant to Messrs Manase & Manase, a firm of legal practitioners appointed as the seller's conveyancers, were annexed to the founding affidavit. The payments were all made between 31 March and 12 October 1999. Each receipt states that the payment was a deposit for a purchase price for an unidentified piece of land. The payment is said to be to the credit of an entity called NYIKA Engineering.

Counsel for the appellant suggested, in argument on appeal, that NYIKA Engineering was a company owned by the deceased.

There was no reference to NYIKA Engineering in the founding affidavit.

Even if it is a company there was no explanation given as to why it received payment of the money in terms of a contract to which it was not a party.

The respondent, who became the executrix dative on 24 October 2003 in her husband's estate, denied that the estate received any of the sums of money paid by the appellant to ERS Realty and Messrs Manase & Manase for the property. She denied knowledge of any relationship between NYIKA Engineering and the deceased in his lifetime. She went on to aver, in paragraph 2 of the opposing affidavit that:

“It is also telling that the applicant has not been able to take vacant possession of the said Stand since 1998 and has not claimed it until well after my husband's death and has not sought to enforce his rights to take transfer. This is so because my husband repeatedly informed him that he had not received the purchase price. It is therefore apparent that the applicant knows of the problems associated with this sale and wishes to take his chances with me.”

The court a quo held that payment of the instalments of $30,000= per month to Messrs Manase & Manase constituted a breach of Clause 12(2) of the Agreement of Sale as the appellant was bound to pay the money to ERS Realty. As a result, the application was dismissed with costs.

The contention, on appeal, was that the learned Judge misdirected herself in making the finding that the payment of the instalments to Messrs Manase & Manase was in breach of Clause 12(2) of the agreement of sale. It was argued, in the alternative, that even if the payment was a breach of contract, the learned Judge ought not to have dismissed the application because the deceased or the first respondent had not initiated and completed the procedure agreed on by the parties under Clause 10 of the agreement of sale for termination of the contract.

To determine the correctness of the contention that the court a quo misdirected itself in holding that payment to Messrs Manase & Manase was in breach of Clause 12(2) it is necessary to decide the question as to which of the two methods of payment of the purchase price the appellant was found to have decided to follow.

It is clear that the learned Judge took the view that he followed the method of payment provided for under Clause 12 of the contract. Counsel for the appellant argued that the payments of the instalments were made in terms of Clause 7 of the agreement of sale.

The fact that there was in fact no payment of the deposit of $50,000 on signing of the agreement of sale on 30 October 1998 in terms of Clause 12(1) of the contract would suggest that the appellant decided to pay the purchase price in terms of Clause 7. It is, however, clear from the facts of the case that although the payment of $50,000 to ERS Realty by the appellant on 21 May 1998 was, at law, not payment in terms of the agreement of sale, he believed that it was payment towards the purchase price of the property.

Although he produced no evidence to support the allegation, the appellant had his case argued on the basis that Stand 21G of Lot 216 of Good Hope Township for the purchase price of which $50,000 was paid was in fact Stand 151 of Lot 216 of Good Hope Township.

The learned Judge was correct in finding, on the facts, that the appellant believed he had made the payments in terms of Clause 12 of the agreement of sale. I, however, do not agree with the finding by the learned Judge that if the payment to Messrs Manase & Manase was indeed in respect of Stand 151 of Lot 216 of Good Hope Township it was in breach of Clause 12(2) because it ought to have been made to ERS Realty.

The appellant was specifically required, under Clause 12(1) of the agreement of sale, to pay $50,000 of the purchase price to ERS Realty on signing of the contract. That exclusive mandate did not extend to the payment of the balance of $180,000. Clause 12(2), relating to the payment of the balance, is silent as to whom the payment was to be made. It therefore had to be made to the deceased.

Payment of the instalments of the purchase price to Messrs Manase & Manase, in terms of clause 12(2) of the agreement, would not be in breach of the contract provided the appellant made sure that the deceased received the money.

It is clear from the facts that the appellant failed to prove that the payments he made were in terms of the contract. He failed to show that there was payment of $50,000 to ERS Realty on signing of the agreement. There was no term in the agreement of sale by which the parties acknowledged payment of $50,000 before the signing of the contract. There was no evidence at all in the papers to show that the deceased received any of the payments made either to ERS Realty before the signing of the agreement of sale or to Messrs Manase & Manase after the signing of it.

The first respondent denied that the deceased received any of the payments. All that the appellant could say in the answering affidavit was that the question whether the deceased received the money in terms of the contract was not for him to answer.

The plaintiff, as represented by its Managing Director, Ms Elizabeth Chidavaenzi, issued summons out of this court on 9 June 2008 seeking the ejectment of the defendant from Stand number 3182 of subdivision A of Stand 159 Prospect in Harare ('the property').

On 2 October 2008 the defendant filed her plea and sought the dismissal of the plaintiff's claim on the basis that she was a legitimate possessor and occupier of the property in question, the right, title and interest in the property having been lawfully transferred to her by virtue of “the declaratory order issued by this court under case number HC7594A/06”.

It was further the defendant's contention that she was in occupation of the property pursuant to a sale agreement entered between herself and a company called Champion Constructors (Pvt) Ltd.

Alternatively, it was contended, by the defendant, that the plaintiff was estopped from denying that the seller, Champion Constructors (Pvt) Ltd, was the holder of rights, title and interest in, and was entitled to dispose of the property in the manner it allegedly did.

The Evidence

In support of its contention, the plaintiff relied on the evidence of its Managing Director and representative, Ms Elizabeth Chidavaenzi. Several documentary exhibits were tendered in support of the plaintiff's position which was mainly an unequivocal denial of Champion Constructors (Pvt) Ltd having been authorized to dispose of the property in the manner it did or at all.

The defendant relied on her own evidence together with the testimony of two former workers of Fingold Real Estate Agents which was said to have been mandated by Champion Constructors (Pvt) Ltd to dispose of the property to the defendant. In addition, reliance was also sought on several documentary exhibits…,.

The Issues

At the pre-trial conference which was held on 9 July 2007 the parties were unanimously agreed that the matter be referred to trial on basically two issues, viz;

(1) Whether the defendant has right of occupation over Stand number 3182 of subdivision A of 159 Prospect; and

(2) Whether the plaintiff has the right to evict the defendant from the property in question.

The Plaintiff's Evidence

The thrust of the plaintiff's representative's evidence was to demonstrate to the court that the plaintiff was the registered owner of the property in issue and that no mandate was given to anyone to sell the property.

The evidence, as presented by Ms Elizabeth Chidavaenzi, its Managing Director, who happens to be a major and controlling shareholder in both the plaintiff and Champions Constructors (Pvt) Ltd was that the property in issue was owned by the plaintiff as one of the 39 subdivisions of Stand 159 Prospect. Ms Elizabeth Chidavaenzi produced a title deed to confirm the ownership of this property by the plaintiff….,.

As regards the relationship between the plaintiff and Champion Constructors (Pvt) Ltd, it was Ms Elizabeth Chidavaenzi's testimony that the latter was contracted by the plaintiff to service the land and develop residential houses on the subdivisions and would be paid in kind for its services or in the form of completed houses which it would in turn sell to prospective home owners in order to recoup its expenses.

It was Ms Elizabeth Chidavaenzi's testimony that whilst in the past the plaintiff, through Champions Constructors (Pvt) Ltd, had mandated an estate agent called Fingold Real Estate to dispose two of its properties, it did not sanction the sale of the property in issue. According to this witness's testimony, this explains why the agreement pertaining to the defendant was not signed by the seller. To put it bluntly, she said it was a fraudulent sale which was masterminded by John Chagaresango (an employee of Finglold Real Estate) who is a close relative of the defendant.

Ms Chidavaenzi believed that John Chagaresango acted in collusion with his erstwhile fellow sales agent Ms Mutodi. It was the witness's further testimony that her attention to the 'agreement' signed by the defendant on 26 September 2006 was drawn to her for the first time ever when the defendant's legal practitioners sent her a letter of demand in November 2006 in which the lawyers were demanding that she signs the 'agreement' and that her immediate reaction was simply not to ratify such a fraudulent agreement.

It was significant that, according to this witness's testimony, Fingold Real Estate, the supposed agent of Champion Constructors (Pvt) Ltd did not present the 'agreement' to her for her signature. The witness strongly believed that Fingold sales agents, who had had the privilege of doing work for her company in the disposal of two houses earlier on, took advantage of their inside knowledge of the project to fraudulently 'sell' the property in question to the defendant.

The witness was quite adamant that for the two properties which Fingold Real Estate Agents had been mandated to sell she had herself given Fingold Real Estate Agents written sale instructions on behalf of Champion Constructors (Pvt) Ltd as is the norm in the industry.

Through her testimony, the witness challenged Fingold Real Estate sales agents to produce her written instructions to them authorising them to sell the property in question.

No such written instructions were produced.

It was Ms Elizabeth Chidavaenzi's further testimony that even if one were to lean backwards and accept for a moment that there had been a proper agreement between the defendant and Champion Constructors (Pvt) Ltd, the defendant had not even made the slightest attempt to comply with various provisions of that agreement to the extent that the defendant would not have been able to enforce it. It is significant that this breach was accepted by the defendant and both Ms Mutodi and John Chagaresango, both of whom sought to justify it on the strength of some other oral promises allegedly made by Ms Elizabeth Chidavaenzi.

Ms Chidavaenzi commented on the final order granted in favour of the defendant…, She said this order was confirmed in default and that an attempt was made to oppose the confirmation of this order but failed on some technicality. The witness further said that the poor handling of this particular case was one of the reasons she severed ties with her erstwhile legal practitioners, namely, Messrs Mandizha and Company. Ms Chidavaenzi further explained that, at the time, herself and Champion Constructors (Pvt) Ltd were barred leading to the granting of the final order in question the parties were engaged in negotiations to try and amicably resolve this matter.

Ms Chidavaenzi's understanding was that the final order in question did not give the defendant the right of occupation but the right to enforce the agreement. She stated that from the time the defendant obtained the order in question she has made no attempt to enforce that order and that even if she had attempted to do so she would not have succeeded.

It was further the evidence of Ms Chidavaenzi that having discovered this fraudulent agreement which involved the defendant, purely out of compassion and consideration for the defendant she initiated negotiations to try and resolve the impasse and that the only original but heavily amended (in pen) document from Fingold Real Estate (which bears the name of Betty Kanyuchi as a replacement of Miss Sibongile Kaziboni) must be looked at within this context.

Indeed, correspondence…, confirm there were in fact some discussions which were carried out on a “without prejudice' basis.

The Defendant's Evidence

In summary, the witness's evidence dealt with how she came to be involved in the “purchase” of the property in issue having been assisted to do so by a close family member, John Chagaresango, a son to her elder sister. She said John Chagaresango was working for Fingold Real Estate Agents.

It was her accepted evidence that she had told John Chagaresango that she wanted to buy a house and that having seen a completed sample house and the house now in issue under construction, she was invited by her nephew, John Chagaresango, to sign an agreement of sale on 26 September 2006 which was witnessed by John Chagaresango, Mr Phiri, her advisor, and one Faith Muzungu a younger and literate relative of hers.

It was her testimony that after signing the agreement…, she commenced to pay in three different instalments on 28 September 2006, 9 October 2006 and 3 November 2006 a total Z$32,500,000=. She had difficulties in explaining why she paid an extra Z$500,000= if the price of the property was pegged at Z$32,000,000=.

She said that sometime in November 2006, after she had made three payments, she went to view progress of construction on site where she met Ms Chidavaenzi for the first time. It was her evidence that, on confronting her on delay in the construction, Ms Chidavaenzi commented that the witness was troublesome and that the house would be finished soon. The record of proceedings will show that despite this being a very critical part of the defendant's case, Ms Chidavaenzi was never cross-examined on her alleged encounter with the defendant.

It was the defendant's evidence that the terms of the agreement which she signed were never explained to her and that she was assured by John Chagaresango that Ms Elizabeth Chidavaenzi would sign the agreement upon full payment of the purchase price of the property.

The defendant further explained that she moved onto the disputed property and started making improvements towards finishing the house. Under cross examination she told the court that Ms Chidavaenzi did not authorise her to make any improvements. It was very clear that the defendant blindly signed the agreement of sale….,.

The Evidence of Evis Monica Mutodi

She was the second witness called by the defendant to bolster her case.

The witness has a fairly balanced academic background and her chain of qualifications were given as follows:- a Bachelar's degree in Chemistry and a Certificate in Education (both from University of Zimbabwe), a qualified examiner with Zimsec and a Diploma in Real Estate with the Estate Agents Council of Zimbabwe. She is a member of the Estate Agents Council of Zimbabwe. The witness said she had 4 years experience in real estate.

It was the witness's evidence that at the relevant time she was employed by Fingold Real Estate as a Sales Negotiator and had previously sold two properties on behalf of Champion Constructors (Pvt) Ltd in the same scheme as the house in issue. The witness said she did not know and never dealt with the plaintiff in this case but dealt with Champion Constructors (Pvt) Ltd.

Ms Mutodi said she got to know of the defendant through her then workmate, John Chagaresango, who introduced her as someone who was looking for a house to buy. She said she then telephoned Ms Chidavaenzi who positively responded by referring her to the house in issue as being available for sale. She then drove to the site with the defendant, John Chagaresango, and another member who she could not remember. On site they were cleared to view a completed sample house first before they proceeded to Stand 3182 (the Stand in issue). The defendant, having shown interest, expressed the desire to purchase the property after which the witness said she telephoned Ms Chidavaenzi to advise of the defendant's interest. It was her evidence that she advised Ms Chidavaenzi that John Chagaresango would be reporting to her office in pursuit of this transaction. She understood, thereafter, an agreement was drawn up but she did not take part in drawing up that agreement.

The witness was emphatic in her evidence in chief that she did not deal with the defendant other than driving her to the construction site. She also remembered that when they visited the Stand in question no work had commenced on that Stand.

Under cross-examination, the witness confirmed that when they visited the property in question no work had commenced on it. However, with further probing she appeared uncertain of what the exact position of the property was.

The difficulty with this witness's evidence was that her alleged telephone conversation with Ms Elizabeth Chidavaenzi, important as it was given the nature of the plaintiff's declaration…, was never put to Ms Chidavaenzi in cross-examination.

Secondly, Evis Monica Mutodi's evidence was characterized by unmistakable prevarication.

In her evidence in chief she said the initial instruction to sell the property in question was given to her by Ms Chidavaenzi. When questioned by the plaintiff's counsel in what form the instruction came, she said it was Ms Chidavaenzi's practice to put instructions on an agreement of sale for Fingold Real Estate.

Probed further, she said such instructions had been given to her over the telephone.

When that averment was further tested, under cross-examination, she changed and said the instructions were in fact given to Mrs Alec over the telephone in her presence but conveniently claimed not to have heard everything that was said.

In one breadth she said she was given the instructions in agreement form and that she had herself taken that initial instruction to the defendant's lawyers. When further probed she changed her story and said that those initial instructions to sell the property were in fact given to Fingold Real Estate typists.

The record of proceedings, particularly where this witness was cross-examined, will reveal a sorry state because at the end of her evidence she had presented a hopelessly confusing piece of evidence.

It must be remembered that this witness was very critical to the defendant's case in that she was supposed to provide the nexus between the original instructions to Fingold Real Estate by Ms Elizabeth Chidavaenzi leading to the alleged contractual agreement with the defendant.

That nexus was heavily compromised by the prevarication which characterized Ms Mutodi's evidence.

Against that prevarication is the clear and concise evidence of Ms Chidavaenzi which was to the effect that she did not authorize or mandate Fingold Real Estate or anyone for that matter to dispose of the property in issue.

It is also significant that the much talked about written initial sale instructions to Fingold Real Estate were never tendered in court. Ms Chidavaenzi was quite categoric that there were no such instructions, and, in my view, the probabilities are firmly in her favour.

There were other aspects of Ms Mutodi's evidence which were far from convincing. It is common cause that both Ms Mutodi and John Chagaresango were employed by Fingold Real Estate Agents as sales agents or negotiators. They had worked together for a fairly reasonable length of time. However, when pushed, under cross examination, Ms Mutodi said she did not know whether or not John Chagaresango was a registered estate agent. She also said she did not know John Chagaresango's qualifications.

Further, her evidence under cross-examination was not consistent with that of the defendant even on the purchase price.

The defendant said the purchase price was pegged at Z$32,000,000= but Ms Mutodi said she told the defendant that the price was Z$32,500,000=. Not only that, but Ms Mutodi told the court in her evidence under cross examination that she disclosed to the defendant about some clauses in the sale agreement. Compare this with the defendant's evidence who said she was never told anything including any escalation in the event of delayed payment and any other clause in the agreement. In fact, the defendant's explanation was that when it came to the agreement itself she dealt with her cousin John Chagaresango and not Ms Mutodi.

The witness was categoric that the purchase price of the property was Z$32,500,000 when everyone else involved in this transaction, including the defendant and John Chagaresango, including the written copy of the supposed agreement, reflect Z$32,000,000 as the purchase price.

As the cross-examination took its toll on her, Ms Mutodi reneged from her earlier evidence that she had personally negotiated the agreement itself with the defendant but rather had dealt with John Chagaresango.

There was more confusion when the defendant's counsel sought to put things right in re-examination. The witness again changed her story and stated that the instructions to sell were given to her and she passed them on to John Chagaresango.

I think, in all fairness, it would be extremely dangerous for this court to seek to be guided by the evidence of this witness. She sufficiently discredited herself and the record of proceedings will confirm this observation.

If Evis Monica Mutodi's evidence was so porous and unconvincing then perhaps it is time to move and look at the evidence of John Chagaresango.

The Evidence of John Chagaresango

This witness was the last one for the defendant and is closely related to the defendant in that he is a son to the defendant's older sister.

The witness told the court that he went as far as Standard Six and did undergo some in-house training as a sales agent at Fingold Real Estate. At the time, he had worked for Fingold Real Estate, as a sales agent, for about 3 and a half years.

From his own testimony, it was clear the witness was quite conversant with his work. He said he was involved in advertising houses for sale, taking potential purchasers to view houses for purchase, verifying ownership of houses by checking title deeds through the Surveyor General's office, and handling agreements of sale.

The witness confirmed that the defendant was indeed closely related to him and that she had mandated him to look for a house to purchase.

The witness told the court that he knew Ms Chidavaenzi as they worshipped at the same church and then later interacted with her at Fingold Real Estate as Ms Chidavaenzi was not only a friend of Ms Violet Alec, the owner of Fingold Real Estate, but had given Fingold Real Estate the mandate to sell certain of her properties.

It was the witness's evidence that he was familiar with the sale of the property in question. Throughout his testimony, he referred to the property in question as Stand 1382. However, the truth is that the correct reference of the property is Stand 3182.

It was quite revealing that John Chagaresango vividly remembered Ms Chidavaenzi instructing Fingold Real Estate to dispose three of her properties but conveniently he said he was only involved in the sale of this particular property which incidentally is linked to his aunt and is the subject of this dispute.

In contrast with the evidence of Evis Monica Mutodi, John Chagaresango told the court that prior to the defendant visiting the site for construction Mrs Violet, Ms Mutodi, Ms Chidavaenzi and himself had been to the site.

John further told the court that it was to him that Ms Chidavaenzi disclosed the purchase price of the property in issue. Compare this with the testimony of Ms Mutodi who had earlier on told the court that it was to her that this same disclosure was made.

John vividly remembered that the agreement of sale was prepared at Fingold Real Estate with him and Ms Mutodi present and having some imput in it. This was inconsistent with the evidence of Ms Mutodi who said, among other things, that she handed the original instructions to John and that once she did that she had nothing further to do with that agreement.

There was further confusion created by John Chagaresango's evidence when he suggested that once the agreements were done, he, together with Evis Monica Mutodi took those copies, together with the original instruction copy, to Ms Chidavaenzi at her office at Robinson House to have the copies signed. It was his evidence that Ms Chidavaenzi then asked them to leave those copies for her to scrutinize after which she would telephone them. John went on to say that when he later followed up on those documents, Ms Chidavaenzi told him not to worry as she would sign the documents.

This piece of John's evidence presented quite some challenge to the court for basically three reasons;

(i) Firstly, it was in sharp contrast with the evidence of Ms Mutodi who clearly stated that once she gave the original instructions to John Chagaresango she never had anything to do with this agreement. She did not herself testify on the visit to Robinson House.

(ii) The second reason why the court had difficulties with this evidence was that, important as it appeared in as far as the plaintiff's declaration was concerned, Ms Chidavaenzi, who was subjected to quite some long and searching cross-examination, was never specifically asked about this visit to her offices by both Ms Mutodi and John Chagaresango as well as John Chagaresango's follow ups.

(iii) Thirdly, and more importantly, is the fact that after the trial had started the defendant filed a supplementary summary of evidence in which she undertook to produce “the original draft agreement with handwritten alterations by Miss E Chidavaenzi which alterations she made at the time of sale before the final draft was produced. This is evidence of her mandate from Ms Chidavaenzi.”

The assumption was that this document was available and would be produced in court. Alas! it was never produced and the explanation by John Chagaresango as regards the fate of this document runs contrary to what the defendant's summary made on the 11^th hour with the indulgence of the court sought to portray.

John further told the court, under cross-examination, that he did not explain all the terms of the agreement to his aunt, the defendant. Asked to explain his reasons for not doing so he retorted as follows:

“I did not because the sale of this property was done on trust between Ms Chidavaenzi and myself.”

In cross examination, the witness was directed to specific clauses of the agreement which were apparently not complied with by the defendant, and all the witness could do was to repeat that this agreement was not based on what the defendant and himself and others (as witnesses) had signed for but on other verbal assurances by Ms Chidavaenzi.

Assuming the agreement was indeed entered into, it was quite curious to the court that given the experience of John Chagaresango in real estate business, he would have failed to appreciate the significance of a written contract, particularly a contract with a variation clause which is as specific as clause 8 of the agreement which is sought to bind the parties in this case.

Surely, if the agreement was to be based on some other verbal assurances by Ms Chidavaenzi, would it have been prudent for a man in the mould of John Chagaresango to encourage his aunt to sign an agreement which was in sharp contrast with such verbal assurances. An inevitable question would then arise, why sign the agreement if one desires not to be bound by the terms above one's signature?

General Assessment of the Evidence

The evidence of the plaintiff's representative and Managing Director of both the plaintiff and the alleged seller, Champion Constructors (Pvt) Ltd, was precise and to the point. The witness was consistent throughout her testimony – firstly, in her plea, followed by her summary of evidence, her evidence in chief, and in her evidence under cross-examination that she did not give Fingold Real Estate, or anyone for that matter, the mandate to dispose of the property in issue and that what happened was tainted with fraud. She was quite clear that she only got to know about the alleged sale which had supposedly taken place on 26 September 2006 in November of the same year when a letter of demand had been dispatched to her by the defendant's legal practitioners and that she decided not to ratify such a fraudulent agreement.

The court was unable detect anything sinister in Ms Chidavaenzi being a major shareholder in both the above entities, that is Champion Constructors (Pvt) Ltd and the plaintiff.

The witness was subjected to a focused and thorough cross-examination, and, in my view, she acquitted herself extremely well and emerged unscathed.

One of the several pointed questions which was thrown at the witness in cross examination which demonstrated her focus and open-mindedness, which, in the court's view, gave some indication as to the possible motives behind the conduct of Evis Monica Mutodi and John Chagarasango in coming up with this idea of this 'sale' is captured in the record of proceedings as follows:-

“Q. Is there any probable reason why Ms Mutodi would go on to sell a specific Stand in respect of which she has no mandate?

A. A human being is not predictable, and, in this case, the most probable reason could have been money because on each sale they made they would earn a commission and Fingold confirms it that Monica Mutodi and John both shared the commission they earned from the unlawful sale.”…,.

As a witness, I found Ms Elizabeth Chidavaenzi focused, emphatic, confident, and convincing throughout the proceedings. Her evidence proclaimed loudly and boldly that there was no contract to talk about between Champions Constructors (Pvt) Ltd and the defendant.

The same cannot be said of the evidence of Evis Monica Mutodi and John Chagaresango. I have already tried to highlight some of the obvious shortcomings in their testimonies. Their evidence, individually and combined, was quite suspect as it failed to tally where it mattered most.

The evidence of the two witnesses was critical to the defendant's case because it was through them or one of them that the defendant's case was supposed to be anchored.

After listening to, and carefully weighing that evidence it became clear to the court that Fingold Real Estate could not possibly have been mandated to sell this property to the defendant by Champion Constructors (Pvt) Ltd or anyone for that matter. If my reading of the evidence is correct (which I am certain it is) then Fingold Real Estate could not possibly have acted as an agent of Champion Constructors (Pvt) Ltd.

We have a scenario where, at most, John Chagaresango acted as an agent of his aunt, the defendant, in looking for a house to purchase. If John abused his position at Fingold Real Estate then the defendant, by initiating this litigation, has targeted the wrong party. She is simply 'barking up the wrong tree.” The defendant's recourse should be against either Fingold Real Estate Agents or its identified former employees, John Chagaresando and Monica Mutodi, if it is true they shared the commission derived from the money paid by the defendant (which allegation incidentally stands unchallenged in the record of proceedings).

The effect of the order of this Honourable Court

That order was an order by default and it was affecting the parties cited therein, viz, the defendant in the instant case, Champion Constructors (Pvt) Ltd and Elizabeth Chidavaenzi.

Paragraph (a) of that order clearly stated that it was “legally binding and enforceable against Champion Constructors (Pvt) Ltd.”

It is common cause that the holder of title of the property in question is the plaintiff in this case, which was not cited in the proceedings of 19^th September 2007. It appears quite clear to me that this order could not possibly have been fully enforced without the citation of the holder of title - the plaintiff.

This might possibly explain why almost three years after obtaining that order the defendant has not attempted to enforce it. The defendant might have fully appreciated the futility of pursuing that route.

In any event, it is doubtful that if the court sitting on 19 September 2007 had been fully armed with the evidence presented in this fully fledged trial would have granted that order. In my view, the court would have been constrained to grant that order given that the title holder was not party to those proceedings. No court desires to be associated with a brutum fulmen decision.

Is the defendant a bona fide possessor?

It is abundantly clear from the evidence that the defendant obtained an order from this court on 19 September 2007 which called upon her to enforce it. The defendant has, from that time, adopted a lackadaisical approach in dealing with that order. She has made no effort to enforce that order and does not seem to be in a hurry to do so.

Instead, as the plaintiff's counsel has correctly observed, the defendant has simply moved onto the property without attempting to properly enforce the order.

The defendant is fully aware that the plaintiff was vehemently opposed to her occupation. Not only that, but when she occupied the property she embarked on unauthorized improvements on the disputed property. I believe that under such circumstances the defendant cannot qualify to be an innocent possessor of the property in question.

In any event, in the light of the findings of the court, the defendant is in a fraudulent agreement masterminded by her own agent, John Chagaresango, and is therefore disabled from deriving any benefit awarded to a bona fide possessor. The defendant must have recourse against either her agent or Fingold Real Estate Agents.

The position the defendant finds herself in was aptly put by RH CHRISTIE, Business Law in Zimbabwe, Juta and Co. Ltd 1985…, in the following:

“But, if the agent fraudulently misrepresents his authority he is liable in delicit for all consequential damages that are not too remote.”

Does the defendant have a right of lien?

The point has been made by the defendant's counsel that the defendant is a bona fide possessor, and, as such, has a lien or ius retentionis to enforce her right to compensation for the improvement she made on the property in issue.

The plaintiff's counsel is of the firm view that the defendant has recourse against her cousin and agent who fraudulently masterminded her entering into an agreement with a non-existent principal.

SILBERBERG and SCHOEMAN, The Law of Property, second edition, published by Butterworth, 1983…, admirably deal with this issue of lien when they state;

“By definition, a lien holder's right lies against the owner of the property which he has maintained, repaired, or improved…,. The headnote of the report states that Brooklyn House case is also authority for the proposition that a person who has improved property of another, in pursuance of a contract with a third party, has the same rights as a person who has merely protected it against loss or damage…,.”

See also Brooklyn House Furnishers (Pvt) Ltd v Knoetze and Sons 1970 3 SA 264 (A) for further guidance on the issue.

It does seem to me that the issue of a lien, not having been pleaded in the alternative or the defendant not having counter-claimed for compensation for the improvements made, that issue falls squarely outside the purview of the enquiry that must seize me. For this reason, this issue which is not part of the pleadings but was only given prominence in court addresses is irrelevant in the enquiry before me. The issue does not call for consideration in this matter for a case is rooted in the pleadings and not in court addresses.

What the plaintiff has successfully established in this case is that it is the holder of title of the property in question and that it did not mandate anyone to dispose of that property. Consequently, the defendant cannot use her improvements as a weapon or defence against her eviction. She can only file a claim if she so desires - but after vacating the premises in question. In this regard, I lean on the reasoning or the ratio in the case of Syfrets Participation Bond Managers Ltd v Estate Co-op Wine Distributors (Pvt) Ltd 1989 (1) SA 106 (T). Although the case involved improvements made by a tenant, I am satisfied that the same principle would apply in the instant case.

Overally, I am satisfied that the plaintiff's case is with merit and judgment is accordingly entered in its favour.

IT IS ORDERED;

1. That the defendant be and is hereby evicted from the property being Stand 3182 of subdivision 'A' of Stand 159 Prospect within seven days from the date of this order.

2. That the defendant pays costs of suit.

On 26 August 2004, the plaintiff instituted proceedings in the High Court wherein it sued for $60,000,000= being the sum assured in terms of a motor vehicle comprehensive policy it held with the second defendant. The first defendants were the insurance brokers who facilitated the policy.

On 21 December 2006, and before the pre-trial conference, the plaintiff amended its claim by the addition of paragraph 10 which is a claim for consequential damages in the sum of $100,000,000= being the replacement value of the vehicle.

The first defendant pleaded that it first acted as the second defendant's agent and its obligation ended as soon as the policy was in place and that the premium had not been paid at the time of the accident hence the policy was revoked.

The second defendant, in its plea, pleaded ignorance of the policy and put the plaintiff to the proof thereof.

At the commencement of the trial, the second defendant applied for, and was granted an amendment to its plea. The amendment was a withdrawal of the initial plea and its substitution with a plea to the effect that;

1. The first defendant, as agent of plaintiff, entered into an agreement with the second defendant that the plaintiff should pay the insurance policy premium of $3,524=26 in equal installments over a period of 3 months as from 25 February 2004.

2. That the plaintiff did not comply with this agreement, and, as at the date of the accident the plaintiff had not performed its obligations to pay the instalments.

3. In any event, the plaintiff is covered for a total of $60,000= in terms of the policy and is contractually precluded from claiming more.

The plaintiff gave evidence through its Managing Director, Mr. Zisengwe. Mr. Gideon Muchakwa gave evidence for the first defendant after which Mr. Moses T. Chakaringa and Mr. Member Murasiranwa gave evidence for the second defendant.

From the evidence adduced in court the following are common cause.

The plaintiff entered into an insurance contract with the second defendant. This was done through the first defendant who acted as broker. The premium was put at $3,524,259=. The insured value was put at $60,000,000= (old currency). On 10 February 2004, the plaintiff paid $200= (revalued) towards the premium. The plaintiff was then issued with a policy document dated 18 February 2004. The period of insurance was stated as 'From 10/02/ 04 to 31/01/05 (both dates inclusive)'.

On 23 March 2004 the motor vehicle so insured was involved in an accident and was declared a write off. As at the time of the accident, the plaintiff had not paid the balance of the premium. Such balance was only paid on 7 April 2004 to the first defendant. When the plaintiff attempted to make a claim on the policy the second defendant refused to honor the claim on the basis that the plaintiff had not paid the premium as per policy.

The testimony by Mr. Zisengwe was to the effect that the plaintiff had been asked to pay the premium in three months. It was never stated that the instalments had to be equal. At the time of the accident the three months period had not lapsed. When the accident occurred the plaintiff was asked to pay the balance in order that its claim can be sent to the second defendant - and it did so. In this regard he tendered two receipts as exhibits 1 and 2 for the payments.

The first defendant's evidence, on the other hand, was to the effect that when Mrs. Zisengwe came to insure the plaintiff's motor vehicle she was told the premium that had to be paid. As she did not have the full amount she was allowed to pay $200= on her undertaking to pay the balance in two weeks time. She was warned of the consequences of not paying the full premium. After failing to pay within that period the first defendant extended the period to three (3) months. According to Mr Muchakwa, this extension was at the plaintiff's risk.

At the pre-trial conference, the issues were viewed as;

“1. The interpretation of clause 1 of the contractual document. It being admitted that plaintiff paid its premium on 25 February 2004; and

2. The quantum of damages.”

After hearing evidence from the witnesses, it was apparent that the parties were not agreed that the premium was paid on 25 February, 2004. The receipts tendered showed the initial payment was on 10 February 2004 and the second payment was on 7 April 2004.

The main issues would thus be;

1. Whether or not the plaintiff had paid the premium in terms of the policy;

2. Whether or not the defendants are liable to the plaintiff as per claim;

3. Whether or not the plaintiff is entitled to payment of the sum of $100,000,000= in respect of its claim for the loss of its motor vehicle in terms of the policy agreement; and

4. Who between the defendants is liable to pay the plaintiff.

PAYMENT IN TERMS OF THE POLICY

The policy document, in its preamble, states that “whereas the insured, by a proposal and declaration which shall be the basis of this contract and deemed to be incorporated herein, has applied to the company for the insurance and has paid the premium as consideration for such insurance in respect of accident loss or damage occurring during the period of insurance.”

That preamble presupposes the applicant has paid the premium.

I did not hear any party to interpret that paragraph in any way as pre-supposing that premium would not have been paid. It is in that light that the issue of payment of the premium is important.

The plaintiff's case was that in spite of this there was a premium payment plan in place which was agreed with the first defendant at the time the policy was agreed in terms of which the premium was payable over a period of three months. Mr. Zisengwe tendered exhibit 3 as proof of the arrangement.

Paragraph 2 thereof states that;

“We hasten to add that a premium payment plan had been agreed to spread payment over three months and initial payment had been effected on receipt of policy before the accident, which we take cognizance of.”

This letter is from the first defendant to the plaintiff. The first paragraph thereof shows clearly that the second defendant was refusing to pay on the premise that premium payment was done after the loss which aspect they contended vitiates the terms and conditions of the policy.

In his evidence Mr. Muchakwa did not deny this.

The first defendant having allowed the plaintiff to pay in instalments found itself in difficulties to persuade the second defendant to pay.

In both its plea and in evidence the first defendant acknowledged that it had no authority to allow the plaintiff to pay its premium in installments. It is because of that lack of authority that it asked the plaintiff to pay up before they could file their claim. It is clear beyond doubt that the payment arrangement was initially as between the plaintiff and the first defendant. That arrangement was apparently not in terms of the policy document. It was an arrangement the first defendant agreed to for the convenience of the plaintiff and not because there was express authority from the second defendant for the first defendant to grant such payment terms.

The second defendant's evidence was to the effect that the insurance policy the plaintiff took out required a one off payment. In the instance case no such payment was made hence it declined the plaintiff's claim. However, in its amended plea, the second defendant stated that “first defendant, acting in its capacity as agent for plaintiff entered into an agreement with second defendant that plaintiff should pay the insurance policy premium of $3,524= 26 in equal installments over a period of 3 months as from 25 February 2004.”

There was thus contradiction between the second defendant's plea and evidence by its witnesses. The witnesses could not explain away the contradiction.

Mr Muchakwa who should have been better placed to testify on this was a ball of confusion and contradictions. For instance, whilst being categorical that the policy was of a one off payment at inception he was, at some stage, heard to say the second defendant should nevertheless have honored the claim. He found it difficult to admit the first defendant's negligence in not advising the plaintiff of the consequences of partial payment and also in not advising the second defendant about the credit arrangement with the plaintiff.

The second defendant, through Mr Murasiranwa, indicated that upon receipt of $200 towards payment of the premium they questioned the first defendant about it. The first defendant was reminded that a failure to pay the full premium would lead to the invalidity of the policy for non-remittance. When asked why the second defendant had not advised the first defendant of the invalidity of the policy in view of non payment of the premium Mr Murasiranwa said that events took over as the accident took place. In terms of clause 8 of the General Conditions of the policy document the second defendant could have cancelled the policy.

Despite not receiving full premium the second defendant issued the policy document and had not cancelled it by the time of the accident.

The amended plea acknowledges the arrangement to pay in instalments. If therefore the second defendant wishes to rely on a breach of contract the burden of proof is on it. See Brightside Enterprises (Pvt) Ltd v Zimnat Insurance Co. Ltd 1998 1 ZLR 117.

In casu, the second defendant seemed to have condoned the payment in installments and conceded in its amended plea that; “First defendant, acting in its capacity as agent for plaintiff entered into an agreement with second defendant that plaintiff should pay the insurance policy premium of $3,523=26 in equal installments over a period of 3 months from 25 February 2004.”…,.

The second defendant can thus not seek to rely on such mode of payment not to honor the claim.

Another point regards the first defendant's position.

Though in their initial pleadings impression was created that the first defendant was the second defendant's agent the closing submissions were clear that an insurance broker can act as agent for both the insured and the insurer. In Gordon and Getz on The South African Law of Insurance, 4^th edition by D.M DAVIS…, it is stated that:

“An insurance broker acts primarily as the insured's agent to obtain insurance, though he receives his commission from the insurer, and may, for limited purposes, such as collecting the premium, be the latter's agent.”

In casu, therefore, the first defendant was the insured's agent when they secured insurance cover for the plaintiff from the second defendant, but, in collecting the premiums and remitting them to the second defendant the first defendant acted as the second defendant's agent.

When the first defendant was now collecting money this was for and on behalf of the second defendant. Upon receipt of the money it was the first defendant's responsibility to account to the second defendant as the second defendant's agent. The second defendant, by accepting part payment of the premium, was in fact confirming its acceptance of the arrangement the first defendant had made with the plaintiff for the payment of the premium and that the first defendant was its agent in collecting the premium.

That probably explains the assertion in its amended plea acknowledging the arrangement to pay in three instalments.

If the second defendant had rejected the arrangement it should not have issued the policy document, or, at least, it should have cancelled the contract as soon as it became aware of the credit arrangement if such had not been known to it when it issued the policy document.

Instead of cancelling the contract, the second defendant opted to merely warn the first defendant, who, by then, had become its agent of the risk of non-payment of the full premium yet the contract provides that the second defendant could have cancelled the contract. Paragraph 8 of the General Conditions states that;

“The Company may cancel this policy by sending seven days notice by registered letter to the insured at his last known address, and, in such event, will return to the insured the premium paid pro-rata portion thereof for the period the policy has been in force…,.”

The second defendant gave an impression to the plaintiff that the arrangement was acceptable. If the second defendant now wishes to rely on such breach, which was there from inception, the onus is on it to prove such breach and to show that such vitiated the contract in spite of its own conduct.

This, the second defendant did not do.

The question of payment of the balance of the premium is between the first defendant and the second defendant. This is so because the plaintiff paid to the first defendant and it was for the first defendant, as agent for the second defendant, to account to the second defendant. The first defendant received the money on 7 April 2004 as agent for the second defendant. The second defendant had an arrangement with the first defendant on when and how premiums received on its behalf by the first defendant would be transmitted.

Though the two witnesses for the second defendant did not seem of the same mind on the period of credit the first defendant was granted, it was certainly a period of at least 60 days. Mr. Chakaringa put the credit period granted the broker at 90 days whilst Mr. Murasiranwa put the period at 60 days. They both agreed, however, that such credit was only to the broker and did not extend to the insured. As already alluded to, this contradicts the amended plea. Both witnesses indicated that queries on premium payments would be by the Accounts Department of which they were not part of.

Exhibit 2 confirms payment of the balance to the first defendant on 7 April 2004.

The first defendant alleged that it paid that sum over to the second defendant. As proof of the payment, the first defendant produced a document called BORDEREAU. Mr. Muchakwa argued that this was proof of payment to the second defendant. The document is addressed to Global Insurance from Kantharia Insurance Brokers and is titled; 'INTIMATION OF MARCH 2004 BORDEREAU'. It was tendered in as exhibit 5.

Item 6 thereon refers to the plaintiff and the balance of the premium.

Whilst Mr. Muchakwa argued that that was proof of payment Mr. Murasiranwa said that was just an intimation of what was to be expected. Proof of payment would be titled 'Payment bordereau'.

In any case, this could not have been proof of payment as the plaintiff had not paid the balance.

It is my view that not enough evidence was adduced to show that that sum was paid over to the second defendant. That is however as between the defendants and should not prejudice the plaintiff.

QUANTUM

It is common cause that the plaintiff insured its motor vehicle with the second defendant, through the first defendant, for the sum of $60,000= (revalued). In terms of that contract, the second defendant, in the event of a loss may pay the plaintiff the estimate of the value of the motor vehicle as specified in the schedule or the reasonable market value of the motor vehicle at the time of the loss or damage whichever is less. Paragraph 2(a) of section 1 of the policy document is quite clear on this when it states that, inter alia;

“…,. The Company may, at its own option, repair, reinstate or replace the motor car and /or…, may pay in cash the amount of the loss or damage and the liability of the Company shall not exceed the actual value of the parts damaged or lost plus the reasonable cost of fitting and such parts shall in no case exceed the insured's estimate of the value of the motor car including the accessories and spare parts thereon as specified in the schedule or the reasonable market value of the motor car including accessories and spare parts thereon at the time of the loss or damage whichever is less.”

I did not hear the plaintiff to deny that this was a limited value policy.

In his evidence, Mr. Zisengwe conceded that the policy was indeed a limited value policy. His argument for $100,000,000= was thus not based on the provisions of the contract.

The plaintiff alleged that “as a result of the defendants' breach of the insurance contract the plaintiff has suffered consequential damages in the sum of $100,000,000= which is the current replacement value of the motor vehicle.” This amendment was only to that extent. It did not go so far as to expunge the initial basis of the claim which was contractual.

In his closing submissions, the plaintiff's legal practitioner argued that it is not unheard of that even where a party is contractually bound to perform certain obligations, should he do so negligently the wronged party may sue both in contract and in delict.

Unfortunately, counsel could not cite any authority in support of this, and, in any case, the suit here was in contract and not delict. The nature of the amendment did not change the nature of the suit at all. Nowhere in the amendment is there any allegation of negligence on the part of the defendants.

The basis advanced by the plaintif'fs counsel for seeking consequential damages are based on what he termed common cause that;

1. That the sum assured is $60,000,000= (which is now $60,000= revalued).

2. That at the time of the inception of the contract that sum was the pre-accident estimated value of the motor vehicle.

3. That due to the volatile economic environment (which the court was urged to take judicial notice during the trial), the sum of $60,000= is but a tiny fraction of the actual market value or replacement value of such a vehicle.

4. That the first defendant, in a letter to the plaintiff, acknowledged the premium payment plan and acknowledged liability on behalf of the plaintiff.

5. That had payment of the $60,000= been made in 2004 the plaintiff would have been indemnified against his loss.

6. That the refusal to pay was grossly unreasonable in view of the facts.

Counsel for the plaintiff argued that in view of the above facts and also of what he perceived to be clear liability the defendants acted wrongfully in repudiating the claim.

The law in this aspect is quite clear.

“Property insurance is a contract for indemnity. The insurer's liability is therefore limited to the 'real and actual' value of the loss suffered by the insured through the happening of the event insured against. It cannot exceed either the amount insured or the amount of the insurable interest; and if it exceeds either or both these items, it must be reduced to correspond with the smaller of them.”

See Gordon and Getz on The South African Law of Insurance, 4^th edition by D.M DAVIS …,.

In cases of limited valued policy which specified the agreed value of the subject matter of the insured therefore the parties are bound by the value agreed to. In the case of Elcock v Thomson [1949] 2 ALL ER 381…, MORRIS J said;

“When the parties have agreed a valuation, then, in the absence of fraud or of circumstances invalidating their agreement, they have made an arrangement by which for better or for worse, they are bound.”

In General Principles of Insurance Law by E.R.H. IVAMY, 4^th edition…, the author thereof states that;

“In the case of a 'valued' policy the amount recoverable is fixed by the policy…,. In the case of an insurance upon property, the value of the subject matter may be fixed by agreement and inserted in the policy as the amount recoverable in the event of loss. This valuation is binding, except in the case of fraud or mistake, and dispenses the assured from the necessity of proving the value of his interest, though he still must prove that he has an interest in the subject-matter of insurance.”

A valued policy is one which specifies the agreed value of the subject-matter of the insurance.

In casu, there is no allegation of fraud or mistake. The plaintiff simply argued that by their refusal to pay when he lodged his claim the defendants acted grossly unreasonably and so must be made to pay consequential damages that would enable the plaintiff to buy a similar motor vehicle.

From the evidence adduced can it really be said that the defendants' refusal to pay was grossly unreasonable?

It is my view that there was no such unreasonableness as clearly the defendants were entitled to contest the claim as the plaintiff had only paid a fraction of the premium by the time of the accident. The contract required a one-off payment but for the plaintiff's failure to do so that led to the first defendant granting an extension of time within which to pay the balance. This not having been an express term of the contract, and, in fact, being contrary to the express provisions of the contract the second defendant cannot be said to have been unreasonable in seeking to repudiate the contract.

The defendants had an arguable case.

I am of the view that the plaintiff has not made out a case for a claim outside the policy document. The policy document shows the sum insured as $60,000,000=. In terms of that document there are some deductions to be made in the event of a claim as indicated in exhibit 6. The defendants witnesses outlined the deductions as including salvage value @ 30% of the sum assured, excess applicable in terms of the policy @ 4% of the value.

Mr. Murasiranwa confirmed the calculations as per exhibit 6. The calculations were as follows:

Sum insured of the vehicle at the time of the loss $60,000.00

Less salvage value @ 30% of the sum insured     $18,000.00

                                                                               $42,000.00

Less Excess applicable in terms of the policy

(4% of vehicle value)                                              $ 2,400.00

Claim amount                                                         $39,600.00

Less outstanding premium $3,524.26 less $200    $ 3,324.26

Amount due and payable                                        $36 275.74

As it was proved that the plaintiff paid the balance of $3,324=59, albeit after the accident, it follows that the sum payable to plaintiff is $39,600=.

As between the defendants the issue is who must pay the plaintiff?

In as far as the first defendant acted as agent for the second in collecting the premium, the second defendant cannot be absolved as the principal. Indeed “where the agent has authority to receive payment of premiums on behalf of the insurers, the effect of the payment is the same as if it had been made to the insurers themselves and the fact that the premiums thus received by the agent have been misappropriated by him, or have not reached the insurers owing to his bankruptcy, affords them no defence against a claim by the assured upon the contract.” See General Principles of Insurance Law by E.R.H. IVAMY, 4^th edition…,.

In the circumstances, the second defendant is liable as the insurer.

COSTS

In as far as the plaintiff has succeeded, albeit to the sum as per the policy document, I am of the view that the plaintiff's argument for costs on a higher scale cannot succeed. The plaintiff is entitled to costs on the general scale from both defendants.

Accordingly, judgment is entered for the plaintiff and against the second defendant in the sum of $39,600= (re-valued) with interest at the prescribed rate from the date of summons to date of payment in full.

Costs on the general scale against both defendants jointly and severally with one paying and the other to be absolved.

The plaintiff in this matter seeks an order requiring the defendant to vacate Stands 322 and 324 in Beitbridge Township and pay holding over damages from the 1^st of April 2006 to the date of vacation.

The defendant avers that it is the lawful purchaser of both houses in terms of written agreements of sale and counterclaims for the transfer of the Stands.

The plaintiff disputes the validity of the agreements of sale and pleads, in any event, that the defendant's claim in reconvention has prescribed.

At the trial of this case, the first witness (Peter Lewis Bailey) was called by the defendant. At the conclusion of this witness's testimony, it was agreed by both counsel that there were no material disputes of fact and that no further evidence would be adduced by either party.

Background Facts

In February 1998, Peter Bailey was appointed as the plaintiff's liquidator. Subsequently, in October 1999, a Deed of Compromise (the Deed) was concluded with the creditors and Bubye Minerals (Pvt) Ltd, and, thereafter, sanctioned by this Court in Case No. HC15191/99 [Exhibit 1].

Under the Deed of Compromise, Bubye Minerals was to take transfer of all claims of the creditors against the plaintiff. By virtue of the Court order, Peter Bailey was appointed as agent of the parties; firstly, to effect the transfer of claims in terms of the Deed, and, secondly, in order to receive, administer, and make payments of all amounts payable to the creditors in terms of the Deed. The Court order operated to set aside the winding up of the plaintiff.

Peter Bailey testified that he was approached by Bubye Minerals to sell the two houses in Beitbridge to the defendant. Peter Bailey then authorised both sales which took place in September 2002. At that time, one of the houses was occupied by a third party who had been given notice to vacate by the plaintiff, while the other house was already occupied by the defendant as lessee.

Thereafter, the defendant paid the purchase price in cash and this was immediately transferred to Bubye Minerals. The money was to be used to continue the running of the plaintiff's mines and thereby generate more income for the benefit of all the creditors. Peter Bailey's evidence was that the agreements of sale [Exhibits 2A and 2B] were entirely open and above board. Moreover, there was no indication, at the time, that the parties did not intend the sale of the houses or that the sales should be cancelled and the money paid by the defendant be refunded. On the contrary, after the purchase price was paid, the plaintiff gave vacant possession of both Stands to the defendant who then duly took occupation of the houses.

Authority to Sell

According to Peter Bailey, clause 2.3 of the Deed of Compromise, as read with clauses 4.1.1.3 and 4.2.1, empowered him to authorise Bubye Minerals to effect the sales in casu. Moreover, the disposal of the houses did not require any resolution of the plaintiff's Board of Directors whilst the Deed was in place.

By virtue of clause 2.3 of the Deed of Compromise, for so long as any amount payable to the preferred or concurrent creditors remained unpaid, Bubye Minerals was prohibited from alienating any of the plaintiff's assets “without the prior written consent of the Liquidator having first been obtained.”

In terms of clause 4.2.1, “the Liquidator shall exercise sole and absolute discretion in relation to the interpretation and implementation of this Deed and in the event of a dispute arising thereon, his decision shall be final and binding on all the parties hereto.”

In my view, although Article 2.3 is negatively couched in the form of a prohibition against alienation, when read in conjunction with clause 4.2.1, its necessary implication is that the liquidator was empowered to authorise the disposal of the plaintiff's assets if and when he deemed it appropriate to do so in the execution or furtherance of his general mandate.

In the agreements of sale concluded in September 2002 [Exhibits 2A and 2B] the plaintiff, as the seller, was represented by Adele Farquhar as “being duly authorised thereto”. At that time, Adele Farquhar was the Managing Director of Bubye Minerals. As appears from certain correspondence between March 1998 and March 2006, Adele and Michael Farquhar and/or Bubye Minerals were assumed to be the majority shareholders in the plaintiff [Exhibits 5, 6 and 7], while the Farquhars also evidently became directors of the plaintiff [Exhibits 4A, 4B and 4C].

Article 78 of the plaintiff's Articles of Association [Exhibit 9] provides for the appointment of Board of Directors. It empowers the existing directors to fill casual vacancies or appoint additional directors. Every such appointment is “subject to confirmation by the members at the next ordinary meeting.”

In the instant case, a former Director (one Cowper) gave notification, by letter dated the 30^th of August 2002, of his resignation as director of the plaintiff with immediate effect and his replacement in that capacity by Adele Farquhar. However, no evidence was placed before the Court as to whether the existing directors had concurred in this appointment or whether it was subsequently ratified at the next ordinary meeting of members.

In any event, the agreements of sale in casu were entered into by Adele Farquhar on the 5^th of September 2002 - after her ostensible appointment as a Director of the plaintiff. In this regard, according to Article 101 of the Articles of Association, “all acts done…, by any person acting as a Director shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment of the Directors or persons acting as aforesaid, or that they or any of them are disqualified, be as valid as if every person had been duly appointed or was qualified.”

Under the law of agency, it is trite that the agent's actions operate to create a contractual or other legal tie between the principal and the third party. The agent's authority to act may arise either by dint of actual authority, whether express or implied, or by way of ostensible or apparent authority or authority by estoppel.

According to CHRISTIE: Business Law in Zimbabwe (1985)…,:

“In the language of the law of agency, apparent and ostensible authority are synonymous…, and ostensible authority is sometimes said to be created by the principal holding out the agent as having authority…, although sometimes a distinction seems to be drawn between apparent authority (flowing from the capacity in which the agent is employed) and holding out (by particular words or actions)…,.

Ostensible authority may arise otherwise than from the capacity in which the agent is employed, as exemplified by:…, from a course of dealing;…., from the third party's knowledge that the agent had authority to pay certain debts and presumption that he had authority to pay others;…, where the presumption of continuity was applied and the third party was entitled to assume that an agent to whom (unknown to the third party) the principal had transferred his business was still the principal's agent.

What is not clear is whether apparent authority, ostensible authority and authority by holding out are all synonymous with authority by estoppel, which requires not only a representation by the principal but that the third party has acted on it to his prejudice. No doubt, in ninety-nine cases out of a hundred the third party will have no difficulty in establishing prejudice, but it is suggested that it is not necessary for him to do so, as the situation contains all the elements of quasi-mutual assent, for which proof of prejudice is unnecessary.”

As regards the principal's right to vindicate property disposed of without his authority, the learned author states as follows…,:

“A principal whose agent has, without authority, disposed of property entrusted to his care may recover that property from third parties unless estopped from doing so, as by having given the agent ostensible authority to deal with the property.”

Applying these general principles of agency to the facts of this case, it seems to me that Adele Farquhar was duly authorised to represent the plaintiff as the seller of the two houses in September 2002.

Adele Farquhar's authority to do so derives, firstly, from the sales having been authorised by Peter Bailey in terms of clause 2.3 as read with clause 4.2.1 of the Deed of Compromise, and, secondly, from her ostensible appointment and subsequent acts as a Director of the plaintiff under Article 78 as read with Article 101 of the plaintiff's Articles of Association.

In my view, the cumulative effect of these provisions, coupled with the conduct of the parties before and after the disputed sales, affords the requisite authority to sell the houses in question.

It is to be noted in this regard that the first intimation of the sales being challenged was only provided in a letter from the plaintiff's lawyers addressed to the defendant on the 7^th of September 2004 [Exhibit 8] - over two years after the houses had been sold. In the intervening period, the plaintiff did not question the propriety of the sales and in fact gave vacant possession of the houses to the defendant. The latter, on its part, paid the agreed purchase price in full and took occupation of the houses. If the sales were to be reversed at this juncture, the defendant would be significantly prejudiced in terms of its monetary outlay for the Stands in 2002.

In the premises, I am satisfied that Adele Farquhar did possess the requisite ostensible authority to represent the plaintiff in the agreements of sale and that they were therefore validly concluded. The plaintiff is accordingly bound by the agreements and thereby estopped from recovering the Stands in question.

It follows that the plaintiff's claim for the eviction of the defendant cannot be sustained and it is accordingly dismissed with costs.

It also follows that the defendant is entitled to enforce the binding agreements of sale and therefore succeeds in its counterclaim for the transfer of the two Stands, subject to the determination of the plaintiff's special plea of prescription of the counterclaim.

The facts giving rise to this application are largely common cause. They are as follows:

The applicant is in the farming business, operating a farm in Chakari. In October 2006, it set out to acquire a centre pivot irrigation system for its farm. Its Managing Director, duly authorized to act on behalf of the applicant, approached one Douglas Chihuri (“Chihuri”) who was selling a center pivot system on behalf of the respondent.

An agreement of sale was concluded between the plaintiff and Douglas Chihuri, acting for his principal, regarding a 140HA center pivot system belonging to the respondent.

A purchase price in the sum of $12,000,000 and installation charges of $3,000,000 were agreed upon.

Pursuant to the agreement, an invoice was made out to the applicant giving the total amount payable as $15 million.

It was made clear to Douglas Chihuri that payment would be made through the African Banking Corporation and would take a few weeks to be processed.

A month later, payment was effected in the agreed sum. This was made in favour of Chartered Enterprises, Douglas Chihuri's trading mantle.

A week after payment had been made, the applicant met with the respondent to discuss the details of the delivery of the centre pivot. Douglas Chihuri was in attendance. At the meeting, the respondent unilaterally increased the purchase price of the centre pivot. Instead of holding the respondent to the agreed price, the applicant agreed to pay an additional $5million and executed an acknowledgement of debt to this effect.

The seller also appended his signature to the acknowledgement. So did Douglas Chihuri.

Payment of the $15 million was then made to the respondent according to his instructions. Still acting as the seller's agent, Douglas Chihuri agreed to have the centre pivot delivered to the applicant.

The respondent did not deliver the centre pivot, prompting the applicant to bring this application seeking an order compelling the respondent to deliver a 140HA center pivot to it.

In opposing the application, the respondent denies knowledge of what transpired between the applicant and Douglas Chihuri, but admits that he was, at that time, selling two centre pivots, the details of which he gave to Douglas Chihuri. He further confirmed, that, in time, Douglas Chihuri advised him that he had secured a buyer for one of the centre pivots. He also confirmed that he received the sum of $14 million dollars for the centre pivot that Douglas Chihuri had sold to the applicant on his behalf and that a balance in the sum of $5 million would be paid in due course.

It was also suggested to him that a further $15 million would be paid for the same pivot after the applicant had sold his beasts or that he could collect the beasts himself as further payment for the sold pivot. He however opted for a cash payment. He did not agree to the delivery of the pivot in the absence of full payment and did not deliver the center pivot because he did not receive the full purchase price of $35 million.

At the hearing of the application, it emerged that the respondent had sold the centre pivot, the subject of this dispute, after being served with this application but before the matter was determined.

This emerged from supplementary affidavits filed by both parties days before the hearing and which were filed with my leave. I granted leave to the parties to file the supplementary affidavits as, in my view, they air the full dispute between the parties and bring out the real issue for determination in this matter.

In his supplementary affidavit, the respondent deposed, that, after the filing of the above application, a director of the applicant caused his arrest on allegations of fraud. It was alleged, in the criminal proceedings, that the respondent had fraudulently misrepresented to the said director that the centre pivot was available for sale when he knew that it was not as it was to be sold to a third party. The respondent was duly prosecuted but was acquitted at the close of the trial.

In it own supplementary affidavit, the applicant admitted the facts given in the respondent's additional affidavit but urged me to find the contents of the affidavit inadmissible on the basis of irrelevancy.

Before proceeding further, I will dispose of the admissibility of the contents of the affidavit.

In my view, once a court grants leave to a party to file an additional affidavit, that grant of leave necessarily implies that the contents of the affidavit are admissible. Supplementary affidavits should only be filed if their contents are relevant to the dispute before the court.

It is a general rule of evidence that irrelevant evidence is inadmissible.

Section 26 of the Civil Evidence Act [Chapter 8.01] provides that evidence that is irrelevant or immaterial and cannot lead to the proving or disproving of any point in issue shall not be admissible.

This section is simply a codification of the position at common law which holds that all facts relevant to the issue in legal proceedings may be proved and where a legally recognized exception to this rule is not invoked, relevancy remains the fundamental rule governing the admissibility of evidence.

As indicated above, this is the rule that a court summarily employs before granting leave to file additional affidavits in motion proceedings.

In my view, the rule against admissibility of irrelevant evidence is rooted more in common sense than in a legal principle. It is a common sense approach by the court to govern that which it will accept or reject lest it be inundated by evidence of all facts surrounding a dispute and trials will take longer than is necessary to resolve if the parties were left at liberty to drag in all they wish or think is necessary.

It however remains clear that the rule against irrelevant evidence is against evidence of facts that have little to do with the issue in dispute.

In casu, I was of the view that the disposal of the centre pivot pending litigation is the issue in dispute and thus facts tending to prove the disposal cannot be irrelevant. Further, and in any event, the facts sought to be rendered inadmissible by the applicant are common cause and thus no party will be prejudiced by its admission into evidence.

It is on the basis of the above that I ruled admissible the contents of the two supplementary affidavits.

I now turn to consider the merits of the application.

The issues that fall for determination in this application are mainly two in my view:

(i) Firstly, I have to determine whether or not there was an agreement between the applicant and the respondent for the sale of the centre pivot for $20 million.

The respondent has sought to argue that the agreed purchase price was $35 million. He deposed in his opposing affidavit that after the applicant had paid the first $15 million and had promised a further $5 million, by way of the acknowledgement of debt; the parties agreed to a further payment of $15 million after the applicant had sold its beasts.

Relying on these averments by the respondent, counsel for the respondent argued that the correct purchase price of the center pivot cannot, in the circumstances, be ascertained without the leading of oral evidence and thus the application should fail on this basis.

It is common cause that Douglas Chihuri, acting as the agent of the respondent, agreed to sell the centre pivot to the applicant for $15 million. The parties agreed, later, to vary the purchase price to $20 million, when, after making payment of the initial purchase price, the applicant promised, by way of an acknowledgement of debt, to pay an additional $5 million.

The agency of Douglas Chihuri to represent the respondent, whilst challenged in the opposing affidavit, was not advanced in argument.

In my view, counsel for the respondent was well advised not to advance the argument in view of the affidavit by Douglas Chihuri and the fact that the respondent accepted the sum of $15 million paid by the applicant through Chihuri.

By his own conduct, of accepting the payment, the respondent put paid to whatever argument he may have had against the agency of Douglas Chihuri. By this conduct, he gave out and confirmed that Douglas Chihuri was indeed selling the centre pivot on his behalf and is thus bound not only by what Douglas Chihuri did but by what he also personally did.

If there was any doubt about the agency of Douglas Chihuri, the respondent personally removed that doubt by accepting the part payment of the purchase price and agreeing with the applicant that the balance now stood at $5 million, thereby putting beyond doubt that the purchase price was $20 million.

In my view, he is thus condemned by his own actions as revealed by the papers filed of record.

I am aware that the respondent has repeatedly and vehemently denied, in his affidavit, that the purchase price of the centre pivot was $20 million.

It is my view that it is not the number of times a denial is made or the vehemence with which a denial is made that will create a conflict of fact such as was referred to by McNALLY J…, in Masukusa v National Foods Ltd and Another 1983 (1) ZLR 232 (H) and in all the other cases that have followed.

A material dispute of fact arises when material facts alleged by the applicant are disputed and traversed by the respondent in such a manner as to leave the court with no ready answer to the dispute between the parties in the absence of further evidence.

In casu, I believe the papers filed of record present ready answers to the questions posed by the respondent. He argues that he wanted more than the $20 million that the applicant contends was the agreed purchase price.

(a) Firstly, the papers filed of record clearly show that the respondent's agent negotiated and agreed to the sum of $20 million.

At law, the actions of the agent bind the principal - even if the agent is breaching his own contract of agency with the principal.

There is thus no need to lead evidence to show what the terms of the agency contract were regarding the purchase price he had to seek. The respondent, through the agency of Douglas Chihuri, agreed to $20 million that the applicant has paid in full.

(b) Secondly, it is common cause that the respondent received the sum of $15 million dollars through his agent, and, thereafter, acknowledged, in writing, that the balance due was $5 million.

He did not, at that stage, query the fact that the balance was only $5 million instead of $20 million according to his assertions.

By appending his signature to the acknowledgement of debt, which clearly indicates the balance as $5million, he gave out to the applicant that he agreed with the applicant in this regard.

Thus, in my view, on the basis of the papers, it is clear that the total purchase price agreed to between parties was in the sum of $20 million which was paid in full.

I find nothing on the papers to indicate that the parties may have agreed to a price other than $20 million.

The only suggestion that this may be so is the averment by the respondent, in his opposing affidavit, to this effect. It is not backed up by any other evidence. It is contradicted by the facts that are common cause and is thus clearly simply meant to introduce an illusory conflict where none exists.

Aligned to the alleged conflict of fact on the agreed purchase price is whether the respondent agreed to deliver the centre pivot before payment of the purchase price in full.

Again, counsel for the respondent urged me to find that I could not resolve this dispute in the absence of oral evidence.

I am afraid I cannot agree.

Having found that the agreed purchase price was $20 million which was paid in full, it matters not, in my view, if the respondent agreed to deliver the centre pivot as delivery is a legal consequence following the conclusion of a sale agreement. It cannot be the subject of a separate agreement between the parties.

It is therefore my finding, that, there is no material conflict of fact in this application.

The parties concluded an agreement of sale of the centre pivot for the sum of $20 million which has since been paid in full. The respondent is bound by the law of sale to deliver the centre pivot to the applicant.

The general law on agency as enunciated by AJ KERR in Law of Agency, 3^rd ed 1991..., is that –

“In the standard case, the services of empowered agents acting within the terms of their authority result in, and the services of un-empowered agents, contribute to the formation of a contract between the principal, disclosed and named, and the third person. The resulting legal position, as far as the principal and the third person are concerned, is the same as if the principal had entered into the contract himself, as in the case of un-empowered agents, as if the principal had conducted the negotiations himself.”

In this case, the first respondent held out Mr. Michael Hanyani as its Managing Director, and authorised him to deal with Nandi Properties (Private) Limited on its behalf. Any person dealing with him was entitled to assume that he had the apparent authority to contract on behalf of the company, which is generally available to all Managing Directors of similar companies.

This rule relating to apparent authority was derived from Bowstead on Agency, and quoted with approval by STRATFORD J in Monzali v Smith 1929 AD 382..., where it is stated that –

“Where any person, by words or conduct, represents, or permits it to be represented that another has authority to act on his behalf, he is bound by the acts of such other persons with respect to anyone dealing with him as an agent on the faith of any such representation, to the same extent as if such other person had authority which he so represented.”

 At p293 of Bowstead on Agency 15^th ed 1985, the author states that –

“Where a person is held out by the company as having an authority that he might consistently, with the provisions of the Memorandum and Articles, possess, a third party is, in some cases, entitled to assume that he has authority, and, that the relevant procedures of indoor management (the documents concerning which are not available to him) for giving him this authority, have been completed...,.

The first type of holding out occurs where the agent is appointed to a position carrying with it a usual authority, eg. that of Managing Director. Here, provided that the act performed by the agent is within the usual authority of persons holding a position such as that held by the agent, an estoppel operates against the company, and it is bound by his acts, even though these were unauthorised or, even though, the procedures necessary for authorising him had not been applied.”

Clearly, therefore, when one is appointed to a certain position, or post, the principal represents, by such, that that person/agent has such powers as other persons holding similar positions in companies dealing in similar businesses. See Reed N.O. v Sagers Motor (Pvt) Ltd 1970 (1) SA 521 (RAD)...,.; Stewart v Zagreb Properties (Pvt) Ltd 1971 (2) SA 349 (RAD); and Southern Life Association Ltd v Beyleveld N.O. 1989 (1) SA 496 (A)...,.  

From the manner in which the applicant framed his application and Heads of Argument, and indeed from submissions made in similar matters that have been placed before me at trial, and at pre-trial conferences, it would appear that the relationship of an estate agent and the purchasers that he, or she, identifies on behalf of the seller, bears repeating.

In this regard, without seeking in any way to downplay the personal anguish that the applicant may have felt when the first respondent refused to sign the Agreement of Sale, I would suggest that the facts of this matter are common place, and represent a number of transactions that are unfolding on the market scene on a daily basis. Prospective purchasers of land throng the offices of estate agents in search of properties, and deal exclusively with estate agents, who advise them of the terms upon which the seller will sell his, or her, property. Upon satisfying these, the prospective purchasers genuinely believe they have Agreements of Sale, even before the seller has agreed to the sale.   

I believe that the relationship between the estate agent and the seller, whilst not arising in this application, is a good starting point.

While it is legally correct that an estate agent, and the seller of the property, are in an agent-principal relationship, the Roman-Dutch Law of Agency has since adopted the position that obtained in English Law that places the estate agent in a position of suis generis.

Professor ELLISON KHAN, in an article in (1980) 97 SAJL 342, describes the estate agent as a “legal oddity”. This is easy to understand, as, generally speaking, an estate agent is not an agent strictu sensu, clothed with authority to transact fully on behalf of his principal.

An estate agent is merely mandated to find a prospective purchaser of the seller's property. After accepting the mandate, he is under no obligation to find the purchaser, and no action will lie against him for failing to find a purchaser, or for finding a purchaser who will not eventually go through with the sale. After finding a prospective purchaser, he is not clothed with authority to bind his principal in the Sale Agreement. Hence his oddity as an agent strictu sensu would not be thus restricted.  

In Bird v Summerville 1961 (3) SA 194 (A)..., a case referred to in Professor ELLISON KHAN''s article in (1980) 97 SAJL 342, HOEXTER ACJ explains the unique position that the estate agent enjoys, vis a vis the seller of the property, in the following terms, which I find quite instructive –

“The estate agents, on their part, did not undertake anything at all, if they wanted to earn a commission, they would have to find a purchaser, but they could not be compelled to earn their commission, nor, if they found a purchaser, or purchasers, were they bound to introduce him, or them, to the appellant. They clearly had no authority to enter into a contract of sale on behalf of the appellant, nor could they foist on him a buyer without his consent. They could only produce a prospective buyer, but they could not force the appellant to sell to him, or sell at all; indeed, the right to refuse to sell to any prospective buyer, or to choose one out of several, was always that of the appellant, and the appellant only.”

In my view, the relationship between the estate agent, and the seller, of the property is aptly, and concisely stated by NUGENT AJA in..., his judgment in Ronstan Investments (Pty) Ltd and Another v Littlewood 2001 (3) SA 555 (SCA) as follows –

“(1) The appointment of an estate agent to find a purchaser for immovable property in return for a commission, without more, places the agent under no contractual obligations. The contract is merely a promise, binding upon the principal, to pay a sum of money upon the happening of a specified event.”

While the estate agent assumes no obligations under his contract with the seller of the property, equally, in this relationship suis generis, the seller is not obliged to accept any of the purchasers that the estate agent may find. The seller is simply bound to pay the agent's commission where the agent does find a prospective buyer. (See Bird v Summerville 1961 (3) SA 194 (A)).

It was argued to me, on behalf of the applicant, that the second respondent had a mandate from the first respondent to conclude a sale with the applicant, and that he did fulfil that mandate, thereby birthing a valid and enforceable agreement between the applicant and the first respondent. In support of this submission, reliance was placed on the general principle of agency found in WILLE's Principles of South African Law, 7^th Ed..., to the effect that a principle is bound by the acts of his duly authorized agent.

It is..., accepted that an estate agent may be authorised to conclude an Agreement of Sale on behalf of the seller.

As stated by LORD GREENE MR in Wragg v Lovett (1948) 2All ER 968, although on the facts of the individual case the seller may authorise the estate agent to conclude the contract, such authorization is not to be lightly inferred from vague and ambiguous language.

It is in this vein that the second respondent, in an attempt to save the applicant's case, sought to argue that, in casu, the first respondent authorized the second respondent to conclude the Agreement of Sale. In support of this submission, counsel for the second respondent relied on the fact that the estate agent was authorized to accept payments for his commission before forwarding the draft Agreements of Sale to the first respondent for “administrative purposes”.

In Frazer v Ruwisi 1990 (2) ZLR 99 (SC), a similar point was made, and discussed, relating to the payment, and acceptance of a deposit for the property being sold. It was held that in that case that the mere acceptance of the deposit of the purchase price does not take out the estate agent from the ordinary relationship of estate agent and principal.

In casu, however, the agent did not receive the purchase price. He directed that the purchase price be deposited directly into the seller's account. This was done, but the fact that the purchase price had been paid for this particular property, and by the applicant, was unbeknown to the seller. The payment of the purchase price into the seller's account was, therefore, neither here nor there, as it had no legal impact. It could not show that the agent had authority to conclude the sale, as the agent had no authority to even receive the purchase price, or to sign the Agreement.

It is common cause that the agent asked for, and received its commission from the applicant.

It is not clear why it was the applicant who had to pay the agent's commission. I am assuming that the agent merely asked the applicant to deduct the amount of the commission from the purchase price that was deposited into the seller's account. It has exercised my mind what to make of this transaction between the applicant and the agent.

What it is clearly not, in my view, is a grant of authority by the first respondent, as seller, to the agent, to conclude the Sale Agreement. I cannot see how the payment of the commission can be taken as the clear and unambiguous language coming from the seller that the agent can conclude the Agreement of Sale that LORD GREENE MR had in mind in the Wragg v Lovett (1948) 2All ER 968 case.

It appears to me that counsel for the first respondent had an admirably easy task in this matter.

As correctly submitted by him, there was no contract between the applicant and the first respondent, as the first respondent was under no obligations to conclude a contract with the applicant, even if the applicant was prepared to, and had actually met all the conditions that the estate agent had told him the seller was looking for.

In casu, I find that the applicant and the second respondent were in an ordinary estate agent and seller relationship. The estate agent found a prospective buyer for the property who was not only happy to meet the conditions the conditions advised him by the agent, but went further to perform all such conditions, with the urging of the estate agent. In reality, the seller may well have accepted the applicant as a purchaser of the property had it been advised of the applicant in good time.

The seller was, however, under no legal obligation to conclude the Agreement of Sale with the applicant, even if it had been advised of his presence in good time.

I have searched and failed to find a basis upon which I can vary the law of estate agents and principals in this case...,.

I fail to find that the seller had put it clearly, and in unambiguous language, to the estate agent, and to the world at large, that the estate agent had authority to conclude an Agreement of Sale in respect of the land in dispute.

On the foregoing, I come to the conclusion that the second respondent in this matter was acting as an ordinary estate agent in this matter, and that the applicant has failed to show clear language on the part of the first respondent granting the second respondent authority to conclude a binding agreement between him and the first respondent.

In the result, I make the following order:

1. The application is dismissed with costs.

It was further argued, on behalf of the defendants, that the amount of damages had to be further reduced in light of the fact that the breach of the contract by the defendant was not self-inflicted but was actuated by an agent acting outside its mandate.

It seems to me that the parties to this dispute entered into a contract for the supply and purchase of two Mercedes Benz motor vehicles, which vehicles the defendants failed to supply. They blame their failure on some clearing agent who did not measure up to their expectations. It is clear that the defendants have, therefore, breached their Agreement with the plaintiff, and should pay damages for the failure to supply the plaintiff with the vehicles.

For its case, the plaintiff called one witness, a Mr. Darlington Tapiwa Mandaza of CB Richard Ellis (Pvt) Ltd, who are the plaintiff's agents managing the premises.

Darlington Tapiwa Mandaza said he is the Property Portfolio Manager at CB Richard Ellis (Pvt) Ltd.

He said he dealt with both defendants in this matter since January 2009. He said there was indeed a dispute over the amount of rent payable but insisted that the defendants, instead of not paying any rent at all, should have continued paying what they were offering, namely US$2= per square metre. The dispute had arisen when they proposed a new rental of US$5= per square metre, in line with market trends. He was, however, convinced that the defendants did not want to pay any rent at all hence the reason for not even approaching the Commercial Rent Board or an Arbitrator.

The witness said he was fully aware that the correct thing to do was to approach the Commercial Rent Board or go to arbitration for the fixing of a fair rent.

Under cross-examination, Darlington Tapiwa Mandaza maintained that they (CB Richard Ellis (Pvt) Ltd) were convinced that there was no commitment on the part of the defendants to pay any rent at all.

He said, although not produced in court, statements had been sent to the defendants in March 2009. He did not indicate, though, what rentals were reflected on these statements. He also said apart from their proposal of 3 February 2009, which suggested US$5= per square metre, another proposal had been sent to the defendants on 1 January 2009 proposing that rentals be paid in the form of fuel coupons.

It was his evidence that by end of February 2009, it was clear that there would be no agreement on the issue of rent and hence the decision to institute legal proceedings.

I must point out that the plaintiff's agents totally mishandled this matter.

The applicant alleges that on 26 October 2007 it instructed its letting agent, Knight Frank Zimbabwe, to give the respondent three months notice to vacate the premises on the grounds that it required the premises for its own use. As a result, Knight Frank Zimbabwe gave the respondent the required three months notice extending from 1 November 2007 to 31 January 2008.  

Counsel for the applicant submitted that the respondent had no prospects of success on appeal. He contended that I made findings of fact which the appeal court would not lightly interfere with. One of these findings was that the respondent had contracted, as principal, with the applicant in the purchase of the raw materials to the value of ZAR353,199=47.

The value of the materials was not in dispute.

The respondent's defence was that the applicant executed the contract of sale with Cyriel (Pvt) Ltd and Stakeholders (Pvt) Ltd, who, in turn, sold the goods to it.

I found, from the evidence, and especially from the documentary exhibits, that Cyriel (Pvt) Ltd and Stakeholders (Pvt) Ltd were agents of the respondent. That the respondent was the principal was demonstrated by the fact that the respondent placed the orders to the applicant, requested the purchase price of the of the materials from the applicant, selected the transporters of the purchases, and received the materials un-opened by either Cyriel (Pvt) Ltd or Stakeholders (Pvt) Ltd.

I found from the contents of exhibits 1 and 2 (letters written by the deponent to the respondent's opposing affidavit and its sole witness at the trial) that it was common cause that these two entities were used by the respondent to overcome  the complications arising from stringent Central Bank regulations on accessing foreign currency on the auction system. It was agreed that the respondent introduced the applicant to these two entities. My finding was that the two entities were smokescreens of the respondent. The respondent did not adduce any evidence to show that it purchased the raw materials from either Cyriel (Pvt) Ltd or Stakeholders (Pvt) Ltd. It was also agreed that when Cyriel (Pvt) Ltd failed to pay the amount due to the applicant in foreign currency, the local currency held by it was returned to the respondent. The end result was that the respondent received the raw materials from the applicant while the applicant did not receive any value for the consignment.

The thrust of my judgment was that it was in a bid to get value that the applicant sought the help of the respondent to receive payment from the respondent's agent. My finding was that the exhibits that contained these requests, and the investigations mounted by the applicant, showed that the applicant looked up to the respondent for payment.

It does not appear to me that those findings might be upset on appeal. They are firmly grounded on the bedrock of the evidence adduced during the trial.

I am satisfied that the appeal lodged by the respondent does not have prospects of success and was merely noted for the mala fide purpose of delaying payment to the applicant.

It is not in dispute that the instant transaction was not a “once off” one.

The parties had dealt with each other in the past, as evidenced by Exhibits 2 and 3 which confirm that the defendant, on two separate occasions, sold two motor vehicles on behalf of the plaintiff, and paid the latter in foreign currency.

These transactions were completed without difficulties.

Exhibits 2 and 3 show a consistent pattern in the manner the plaintiff, and the defendant, were conducting their business. Exhibit 1 is equally consistent with those two Exhibits.

Exhibit 1 must be conclusive insofar as it deals with the undertaking of the parties to each other.

The second respondent is an Estate Agent operating in Mutare.

More importantly, it is clear that in the absence of the evidence of Mr. Muzondiwa the court cannot, on a balance of probability, accept that he authorized any alterations to the contract entered into by the parties, and that when he did so he was acting as an agent for Total Zimbabwe. This is so because even Total Zimbabwe itself did not confirm this. In fact, if there was need to glean for further evidence in support of the plaintiff's contention that the manufactured tanks were in violation of the Agreement one would need to go no further than merely looking at the attitude exhibited by Total Zimbabwe as contained in their report on the tanks...,. Item 'D' concluded as follows –

“Recommendations

Based on the above, it is recommended that the tanks should not be accepted as they do not meet the required design specifications, especially where a 4,5mm plate was used instead of 6mm.”

In the absence of the evidence of Mr. Muzondiwa, it is too far-fetched to try and infer agency to the plaintiff, particularly in light of the plaintiff's clear evidence.

Even if it is accepted, for whatever reason, that Mr. Muzondiwa authorized the alteration of the specifications originally agreed upon by the contracting parties, such alterations cannot possibly bind the plaintiff since the plaintiff has categorically stated that Mr. Muzondiwa was never employed as his agent.

There was no attempt made by the defendant to controvert this evidence.

It seems to me that the parties intended to be bound by an agreement to sell. They concluded exhibit 1, for some reason there was a discussion as to the need to change the method of payment. If the defendant was not involved in this discussion it is clear someone on his behalf was involved. The defendant, in my view, is estopped from denying the subsequent discussions since an agent of his had previously acted on his behalf and signed exhibit 1.

This is an appeal against the entire High Court judgment of MAFUSIRE J which dismissed with costs the appellants' claims against the respondents. It was handed down on 12 August 2013. The appellants pray that the appeal succeeds and that the respondents be ordered to pay the costs of suit on a higher scale.

The facts of and background to the dispute are explicitly set out in the judgment of the court a quo, and are as follows:

In September 2010, some eleven (11) farmers from the Glendale farming area of Zimbabwe sued, on separate summonses, a company called Farmers Commodity Stock Exchange (Private) Limited (“FCSE”) in the one case, and one Peter Kenneth (“Peter Kenneth”) jointly with that company in the other cases.  The claims were for payment of various sums of money. The farmers claimed they had sold maize grain to Farmers Commodity Stock Exchange (Private) Limited (hereafter referred to as FCSE) through Peter Kenneth. They alleged that Peter Kenneth was an employee or agent of Farmers Commodity Stock Exchange (Private) Limited. The plaintiff in case no. 1, Tonderai Abel Masango (hereafter referred to as “the first plaintiff”), alleged that he had sold and delivered soya beans as well.

The background to the claims was common cause.

Farmers Commodity Stock Exchange (Private) Limited was in the business of buying maize from various parts of the country. In the Glendale area, they were buying the maize through Peter Kenneth. Peter Kenneth was renting premises from the local authority. He used those premises as a collection depot.  The bagged grain would be collected from the different farms by trucks contracted by Farmers Commodity Stock Exchange (Private) Limited or Peter Kenneth. At Peter Kenneth's depot were large containers belonging to Farmers Commodity Stock Exchange (Private) Limited. The grain would be stored in those containers before dispatch to the various customers in and around Harare. Peter Kenneth dealt directly with the farmers. He sourced the grain and paid the farmers. His terms of payment were said to be cash within 7 days of delivery. Farmers Commodity Stock Exchange (Private) Limited was supplying the cash. Peter Kenneth moved around with a mazda van emblazoned with Farmers Commodity Stock Exchange (Private) Limited's name and logo.

Problems soon arose.

Peter Kenneth did not pay for all the grain delivered. The famers complained. Peter Kenneth became evasive. The famers reported the matter to the police. Initially, more than fifty (50) farmers were involved.  Both Peter Kenneth and certain representatives of Farmers Commodity Stock Exchange (Private) Limited were arrested. Peter Kenneth took rat poison in a suicide attempt. He was rushed to hospital just on time. He survived. Farmers Commodity Stock Exchange (Private) Limited's representatives, Mark Oliver Hutchings (Mark Hutchings) and Jonathan Paul Kennedy (J.P. Kennedy) were detained in custody for several weeks before being released on bail. They were eventually acquitted.

The farmers were disgruntled by the outcome of the criminal proceedings. Eleven (11) of them decided to bring civil proceedings before this Court. But of the initial eleven (11) only six (6) actually turned up at the trial. The other five (5) were in default and their claims were dismissed with costs.

Peter Kenneth was a co-defendant in all but one of the eleven (11) cases. However, he neither filed any papers nor appeared at the trial.

The farmers' cases before this court were all based on the allegation that Peter Kenneth was an “employee” of Farmers Commodity Stock Exchange (Private) Limited whose duty had been to procure grain on behalf of that company. They all claimed that they had contracted with Farmers Commodity Stock Exchange (Private) Limited through Peter Kenneth; that they had delivered their grains to Farmers Commodity Stock Exchange (Private) Limited through him; that they had been paid for part of the deliveries by Farmers Commodity Stock Exchange (Private) Limited through Peter Kenneth and that they looked to Farmers Commodity Stock Exchange (Private) Limited for the remainder of their money.

On the other hand, Farmers Commodity Stock Exchange (Private) Limited denied that Peter Kenneth had been their employee at the time or any other, but that he was someone the company had contracted as an independent agent to procure maize for it in the Glendale-Mvurwi area. He had been on a commission.

The court a quo determined, correctly, that the crisp issue before it was whether the first respondent, Peter Kenneth, was an employee and/or agent of Farmers Commodity Stock Exchange (Private) Limited or whether he was an independent contractor. 

The court a quo determined the matter against the appellants and they have now appealed to this Court on essentially two grounds:

1. That the court a quo erred by holding that the first respondent was “plainly” an independent contractor rather than an agent of the second respondent; and

2. That the court a quo misdirected itself in failing to find that the appellants had established their case on a balance of probabilities in circumstances where the respondents had failed to prove a defence to their claims.

It appears to me that the essential facts of the matter are not in dispute. What is in dispute is what those facts established as being the true nature of the relationship between the first respondent and the second respondent. The parties, as already indicated, took opposite positions on this matter. What therefore falls to be determined in casu is whether or not in adopting the position of the second respondent – thereby rejecting the appellants' – the court a quo erred or misdirected itself.

The court a quo commendably, and extensively, considered the law and authorities governing what, at law, constitutes an employer/employee relationship on the one hand and a principal/independent contractor relationship on the other. The court started from the premise that an employee, agent or independent contractor, all render services to another for a consideration. It then properly considered what the relevant authorities have laid down as elements that enable a distinction of one from the other to be made.

Of the numerous authorities cited by the court a quo in order to highlight and underline the distinction between an employee and an independent contractor (among others; Smit v Workmans Compensation Commissioner 1979 (1) SA 51 A; Southampton Assurance Co of Zimbabwe Ltd v Mutuma & Anor 1990 (1) ZLR 12 (HC)), I find the following dictum, Colonial Mutual Life Assurance Society Ltd v Mcdonald 1931 SA 412 (AD), to be apposite as well as particularly instructive;

“Bowstead on Agency…, is equally clear: 'The difference,' he says, 'between an agent and an independent contractor is, that an agent is bound to act in the matter of the agency subject to the directions and control of the principal, whereas an independent contractor merely undertakes to perform certain specified work, or produce a certain specified result, the manner and means of performance of production being left to his discretion, except as far as they are specified by the contract.' This is a distinction which, in our law, cannot be ignored for the contract between master and servant is one of letting and hiring of services (locatio conductio operarum) whereas the contract between the principal and a contractor is the letting and hiring of some definite piece of work (locatio conductio operis). In the former case, the relation between the two contracting parties is much more intimate than in the latter, the servant becoming subordinate to the master, whereas in the latter case the contractor remains on a footing of equality with the employer. The crucial difference between these two cases lies in the fact that where a master engages a servant to work for him the master is entitled, under the contract, to supervise and control the work of the servant. He is entitled, at any time, to order the servant to desist, and, if the matter is sufficiently serious, may even dismiss him for disobedience.”

A useful definition of “control” according to JOUBES JA in Smit v Workmans Compensation Commissioner 1979 (1) SA 51 A is given as follows:

“…, it includes, inter alia, the right of an employer to decide what work is to be done by the employee, the manner in which it is to be done by him, the means to be employed by him in doing it, the time when and the place where it is to be done by him…,. Supervision implies the right of the employer to inspect and direct the work being done by the employee. JONATHAN M. SILKE's “The Law of Agency in South Africa”, 3^rd ed.”

The authorities cited above also re-state the principle that a principal is liable for the delict of his agent where such agent is a servant but not where he is a contractor, sub-contractor or their servant.

The appellants argue that all the elements of an employee/employer relationship existed between the first and the second respondent. The court a quo found this not to be the case, and opined as follows;

“I find that there is no evidence that Peter Kenneth was an employee of FCSE. Even the best evidence of some of the plaintiffs, such as first plaintiff's claim that PJ Kennedy had told him that Peter Kenneth was their employee; or that of the fourth plaintiff that PJ Kennedy had told him that Peter Kenneth was “their man”; or that of several other plaintiffs that Peter Kenneth drove a motor vehicle emblazoned with FCSE's name and logo; all falls woefully short of what is required to establish a master and servant relationship.  What the parties call each other in such a contractual relationship, or what they perceive their relationship to be is not decisive and may actually be irrelevant. The court looks at the totality of the evidence and all the circumstances to determine the true nature of the relationship.

The point is, even accepting the first plaintiff's claim in casu that PJ Kennedy had told him that Peter Kenneth was “their employee”, this takes the plaintiffs' cases no further. Apart from the fact that it is highly unlikely that PJ Kennedy would have been using “employee” in its more technical sense, the nature of the relationship between Peter Kenneth and FCSE, as disclosed by the totality of the evidence, was completely nowhere near that of master and servant. Peter Kenneth was plainly an independent contractor.”

I find the above analysis of the evidence before the court a quo and the conclusions the judges drew from it to be eminently sound.

To start with, the appellants, not being privy to the contract between the first and second respondent, had little with which to challenge the assertion by the second respondent that it exercised little or no control over how the first respondent was to carry out his obligation under the contract. Nothing that the appellants said in relation to what they perceived to be indicia of a servant rendering services for his employer could, in my view, be taken as disproving the second respondent's evidence to the following effect;

(a) That beyond being given money by the second respondent to buy maize, the first respondent was entirely his own agent in deciding where to go in order to source the maize in question, who specifically to approach for this purpose, and how, when exactly he was to do so; and on;

(b) That in all this, the second respondent neither “inspected nor directed” the work done by the respondent beyond his delivery of the required maize; and

(c) That the second respondent did not get to know of what quantities of grain were sourced from which farmer and on what terms, until Peter Kenneth's arrest.

The appellants aver that the payment of a commission to the first respondent by the second respondent was further evidence of an employee/employer relationship. The court a quo was not swayed by this averment, and, relying on a number of authorities, the learned judge stated;

“In the cases of Denniss Edwards and Co. v Lloyd 1919 TPD 29 and the judgement of the lower court in Smit v Workman's Compensation 1978 (1) SA 339 (C) (at page 345 G-H) it was noted that the provision in a contract, of remuneration by commission, although not by itself decisive, is a strong indication against a relationship of master and servant.” 

When the issue of the payment to Peter Kenneth of a commission is considered together with the evidence pointing to the independent manner by which he discharged his obligations, I find that the decision of the court a quo on this point cannot be assailed.

The facts in Colonial Mutual Life Assurance Society Ltd v Mcdonald 1931 SA 412 (AD) are almost on all fours with the case at hand. In that case, a life insurance agency used a car sold to him by the life assurance company to perform duties related entirely to the business of the company. He was paid a commission for the work. In holding that the agent in question was an independent contractor rather than an employee, the learned judge remarked as follows;

“The agreement about the motor vehicle does not order Britain to use the car. He may use any means he likes, and, in addition, he may use the motor car in any way which he chooses but only for the business of the Society. This cannot affect the nature of his position or relationship between him and the Society.”

And so it is in casu.

The appellants did not allege that the first respondent was bound by contract to use only the vehicle in question to transport the maize that he collected on behalf of the second respondent. There is also no suggestion by the appellants that, without the vehicle in question or the storage containers, the first respondent would not have been able to perform his obligations under the contract. He could have used other means to transport the maize and still been able to discharge his obligations under the contract.

In relation to the use of a vehicle emblazoned with the second respondent's logo, the court, in my view, correctly found that this did not carry the appellant's case any further. They could not disprove the second respondent's assertion that the vehicle in question was under purchase by the first respondent in terms of a credit scheme agreed between the respondents. The court a quo found the explanation of the second respondent to be credible, that certain measures were taken merely for convenience and to facilitate effective performance by the first respondent of his obligations under the contract. These included the loan agreement in respect of, and the allocation of, the vehicle to the first respondent, and the placement of containers within the first respondent's premises, for the storage of the maize. Under these circumstances, not much significance can be placed on the fact that the vehicle in question bore the logo of the second respondent.

I am, accordingly, not persuaded that the existence of and use by him of the disputed vehicle should be taken as conclusive evidence of the employee/employer relationship alleged.

There were also other indications relied on by the second respondent to dispute the existence of an employee/employer relationship between it and the first respondent. One was the fact that all invoices tendered in evidence by the appellants, and issued in relation to the receipt of and partial payments made for the maize received by the first respondent, reflected the name of his own company, not the second respondent's. The other evidence tendered by the second respondent, which the appellants could not in truth dispute, was that it had instructed the first respondent to procure maize from unspecified farmers at a price of $150= per tonne. The second respondent would then sell it to its customers at a price of $290=, an amount which fell short of the $300= per tonne that the first respondent is said to have promised to pay the farmers for the maize collected by him. The fact that it would not have made economic sense for the second respondent to buy maize at a cost that exceeded what they would sell the maize for, seriously undermined the integrity of the first respondent in his dealings with and utterances to the farmers. More importantly, it lent credence to the second respondent's averments that it exercised neither control nor supervision over the first respondent's activities, beyond giving him money to buy maize at $150= per tonne. It also belies the first respondent's assertion that the second respondent was his “boss”. 

As the court a quo correctly observed, it was the first respondent's conduct, rather than what he said to the appellants, that defined his relationship with the second respondent.

The appellants made much of the definition of “employee” that is contained in the section 2 of Labour Act [Chapter 28:01], which reads as follows;

“Employee” means any person who performs work or services for another person for remuneration or reward on such terms and conditions as agreed upon by the parties or as provided for in this Act, and includes a person performing work or services for another person -

(a) In circumstances where, even if the person performing the work or services supplies his own tools or works under flexible conditions of service, the hirer provides the substantial investment in or assumes the substantial risk of the undertaking; or

(b) In any other circumstances that more closely resemble the relationship between an employee and employer than that between an independent contractor and hirer of services.”

I agree with the observation of the judge a quo that this definition was unhelpful in determining whether the first respondent was, at the relevant time, an employee of the second respondent, or an independent contractor. 

In the light of all that has been stated regarding the first respondent's conduct in his dealing with the appellants, there can, in my view, be little doubt that the first respondent rendered services for the second respondent in circumstances that deviated from those that would “more closely resemble the relationship between an employee and employer.” The circumstances clearly established a relationship between an independent contractor and hirer of services. I find that they disclose what, in Colonial Mutual Life Assurance Society Ltd v Mcdonald 1931 SA 412 (AD), was described as a locatio conductio operis.

The first respondent, in my view, also fell squarely within this definition of an independent contractor that is to be found at page 540 of De VILLIES MacINTHOSH's “Law of Agency in South Africa”;

“One who is his own master, free of his employer's control, and representing no one else, when performing the obligations he was called to perform under the contract which he has entered into with his employer, such obligations not being those of contracting legal relations with third parties on behalf of his employees.”

This statement is echoed in the following words by JONATHAN M SILKE in his book The Law of Agency in South Africa, 3rd ed….,.;

“An accurate test for distinguishing the agent from the independent contractor is that the agent has authority to bind his principal in contract whereas the independent contractor has no such power.”

It is not in dispute that there were no direct dealings between the second respondent and the appellants. As already stated, economic considerations would have ruled out the notion that the second respondent could have instructed the first respondent to buy the appellant's maize at the price of $300= per tonne.  Clearly, the first respondent made misrepresentations to them in this respect. Under such circumstances, I am persuaded there can be no basis for holding the second respondent liable for such conduct.

It is a matter of regret that the appellants lost huge amounts of money earned through sweat and hard work. Quite clearly, the circumstances under which it happened bear all the hallmarks of a fraudster's scam. The second respondent appears to have been a pawn in a reprehensible game in which its money was used to lure the trusting and seemingly naïve farmers into the first respondent's trap. The second respondent, on its evidence, was also a victim in another sense. Only after it made detailed reconciliations did it transpire that there was a huge discrepancy between the money they had given to Peter Kenneth and the quantities of grain that he delivered to them. It seems unlikely that both the appellants and the second respondent will succeed in any effort to recover their losses.

Whilst all one can feel for the appellants is some degree of sympathy, I find in the final analysis that the appeal has no merit. It is accordingly ordered as follows:

The appeal be and is hereby dismissed with costs.

It not infrequently happens that in the sale of immovable property, the purchase price is paid by the purchaser to the estate agent handling the sale. The vexed question of whose agent such estate agent is in holding the purchase price has come before these courts time and time and time again. In Frazer NO v Ruwisi 1990 (2) ZLR 99 (SC) KORSAH JA had this to say -

“I think this issue of a receipt of a deposit from a buyer was succinctly dealt with by WATERMEYER J in Earlie Homes Estates v Miller 1977 (4) SA 288 (C) at 290C-E, where the learned judge said:

'In my view, the estate agent, unless he is the agent of the seller to receive the purchase price, which, in the absence of express or implied authority, he is not (see Tank v Jacobs, 1SC 289; Wessels v De Villiers, 1 G 141 (1885 OFS 141); Field & Co v Marks & Co, 12 EDC 13; Roberts v Bryer Bros 1931 OPD 197; Burt v Claude Cousins & Co Ltd (1971) 2 All ER 611 at 615-618; and Sorrel v Finch (1967) 2 All ER 371) must hold the deposit for the would-be purchaser. Until such time as the contract of sale is completed, the would-be purchaser can call upon the estate agent to return the money, but, if the contract is completed, then the estate agent is bound to deal with the deposit in terms of the contract of sale.'”

Sometimes an estate agent is authorized to accept payment from the buyer of a deposit against the purchase price. In this case, he would be acting in the capacity of agent for the seller. However, in most instances, the estate agent acts as a broker, in which case, he holds the deposit as agent for both parties and the deposit or purchase price remains vested in the purchaser until transfer is effected to the buyer and thereupon ownership passes to the seller.

The applicant has sought to argue that the payment of $225,000= was, in terms of the oral agreement, deposited into the account of the second respondent by RTGS on the instructions of the first respondent. The applicant, however, contends that the payment was accepted by the second respondent in its capacity as an agent for the first respondent.

What I find significant is that nowhere in his two affidavits does L.T. Chitsaka categorically state that the first respondent mandated him to conclude an Agreement and accept the purchase price. The acceptance of a purchase price by an estate agent does not categorically point to the principal having given the estate agent a mandate to conclude the Agreement on his behalf. He, in fact, says that the parties concluded an oral agreement which he then reduced to writing. In an affidavit filed by him under case number HC4617/08, which was an application brought by the first respondent for a declaratur that the alleged Agreement was null and void, Lawrence Chitsaka does make an averment in his opposing affidavit that an Agreement was concluded for $150,000= and that it was a term of that oral agreement that cash be deposited in accounts where he had signing powers to facilitate the withdrawal by him of cash so that the first respondent would be better able to access cash to purchase foreign currency on the black market. It is in this affidavit that he states he was mandated by the seller to conclude an Agreement of Sale on his behalf.

The plaintiff issued summons in which he claims for an order setting aside the cancellation of an Agreement of Sale between him and the first defendant and an order for specific performance for the delivery of the property, being a flat called Block 12, Room 93, Mufakose Flats.

He later, by consent, amended his claim by adding an alternative claim for damages if the relief of specific performance cannot be granted to him.

During the trial, and as the plaintiff gave his evidence, he indicated that he was abandoning the claim for specific performance. As a result, the outstanding issue for the determination of this court is the claim for damages.

The quantum of damages claimed in terms of the amendment is the amount of ZW$40,000,000,000= or the value of the property at the time of judgment whichever is greater. However, during the trial the parties advised the court that they had agreed on the quantum of damages in the event that the court found the first defendant liable to pay damages to the plaintiff. They advised the court that they had agreed that the quantum of damages be the amount of US$22,000=.

The following issues were referred for determination at trial:

“1. Whether Denrose Agent was an agent for plaintiff and or defendant.

2. Whether or not the oral agreement was entered into by the first defendant and plaintiff prior to 6^th September 2006.

3. Whether or not the oral agreement of sale entered into between the first defendant and plaintiff is valid.

4. Whether or not the plaintiff entered into a written agreement of sale with the first defendant. If so, what were the terms of the agreement?

5. Whether or not the plaintiff honoured all his contractual obligations.

6. Whether or not the cancellation of the agreement is valid.

7. Whether or not the cancellation of the Agreement of Sale complies with the Contractual Penalties Act [Chapter 8:04].

8. Whether or not the plaintiff is entitled to have the property ceded to him.

9. What order should be made as to costs?”

The pertinence of the above issues will emerge from the evidence that was adduced before the court as detailed below.

One Memory Chatambudza Makope was the first witness to give evidence on behalf of the plaintiff. His evidence was to the following effect. He was involved in all transactions involving this matter and was always acting on behalf of his brother, the plaintiff.

He produced a special power of attorney executed in his favour by the plaintiff.

The plaintiff, whilst in the United Kingdom, saw an advertisement in a newspaper to the effect that the immovable property in issue, being a flat in Mufakose known as Block 12 Room 93 was on sale in Zimbabwe. The advert was allegedly placed in the said newspaper by estate agents known as Denrose Real Estate (Denrose). The plaintiff asked the witness, who was in Zimbabwe, to go to the offices of Denrose Real Estate and see one Patrick Disban (Disban) in connection with the advertisement. The witness went to the offices of Denrose Real Estate together with his parents. Patrick Disban indicated that he was already waiting for the witness' arrival. Disban then gave the witness an Agreement of Sale (exhibit 2) in respect of the said property and the witness signed on behalf of the purchaser.

The first defendant was reflected on the agreement as the seller of the property.

The purchase price for the property was $6,500,000= (Zimbabwe currency). The plaintiff made payments from the United Kingdom directly to Denrose Real Estate and Patrick Disban would advise the witness and family accordingly whenever such payments were received. The witness did not receive any receipts in respect of any such payments from Denrose Real Estate. He produced a print-out (exhibit 3) purportedly made by Denrose Real Estate and handed to him which reflects that the plaintiff had made a payment of $6,500,000=; that interest accumulated after investment was $698,082=19; that the purchase price after interest was added on was $7,198,082=19; that to make the purchase price of $10,000,000=, the balance to be paid was $2,801,917=81.

Towards the liquidation of the balance of $10,000,000= the plaintiff made two payments directly to Denrose Real Estate in the respective amounts of $1,196,000= and $800,000= as reflected in exhibit 4 being copies of the relevant receipts.

When the witness inquired why the purchase price had changed to $10,000,000= from $6,500,000= Patrick Disban advised him that as he could not release the money paid as purchase price by the plaintiff to the first defendant before cession was effected, the seller had indicated that because payment of the purchase price was taking long, he had increased the purchase price to $10,000,000=.

Patrick Disban also advised him that the plaintiff had agreed to pay the revised amount.

The witness said that he saw the cession form, exhibit 5, sometime in December 2006 or January 2007. Section 1 of the cession form headed “To be completed by Cedant” was filled in, in the name of the first defendant but was not signed by the first defendant in the space provided for his signature. There is what purports to be a witness' signature and which appears to be the same signature as appears on the Agreement of Sale as that of the witness to the seller's signature thereon. The cession form purports to have been signed by the said witness on 25 September 2006, the same date on which the Agreement of Sale was signed by the seller and his witness. The other sections of the cession form meant for completion by the cessionary, the local authority and the Ministry of Local Government, Public Works and Urban Development were not completed.

It was also the witness' evidence that sometime in December 2006 or January 2007 Patrick Disban gave his father the keys to the flat and since then his father has been in control of the flat to this day.

The witness never had any dealings with the first defendant.

One Mr. Zimbudzana (Zimbudzana), also of Denrose Real Estate, then took over from Patrick Disban. He appeared to occupy a more senior position to Disban. When the witness inquired with him why cession was never completed, Mr Zimbudzana said it was because the first defendant had an outstanding debt that he had to pay to the Ministry of Local Government first before cession could be effected. Thereafter, the witness and his father would regularly go to the offices of Denrose Real Estate and they would be told that the first defendant was in Bulawayo and would be given another date when he would allegedly be in Harare for purposes of effecting the cession. This happened on a number of occasions but cession was never effected.

The witness disputed that Denrose Real Estate was the plaintiff's agent and said that the plaintiff never got his money back from Denrose Real Estate.

The witness produced, as exhibit 6, a letter dated 7 February 2007 from the first defendant's legal practitioners to the plaintiff's legal practitioners. The letter states, inter alia, that the agreement that the plaintiff was seeking to enforce was formally terminated and cancelled by the first defendant and that this was communicated to the plaintiff “through the agents Messrs Renson Real Estate.” The letter further states that the termination was occasioned by the plaintiff's failure to meet the pertinent terms of the agreement and that the first defendant had instructed them to demand that the plaintiff vacates and hands over the keys to the premises failing which legal proceedings would be instituted for the said relief.

The plaintiff then communicated with legal practitioners and since then the witness was not aware of any further attempts thereafter to evict the plaintiff.

When the keys to the flat were handed to his father by Denrose Real Estate, the indication made was that they could have the keys as they had paid in full for the flat and the only outstanding issue was the cession. He disputed the suggestion made that the keys had been given to them only for purposes of viewing the property. He said that they had viewed the property in September 2006 and were not given the keys then. He was not at any time given any written notice that there was a breach on the plaintiff's part which was to be remedied.

With regards to the contents of exhibit 3, the witness said that neither the plaintiff nor he instructed Denrose Real Estate to invest the money and that Denrose Real Estate was supposed to pay the money to the first defendant.

The witness produced as exhibit 7 a letter dated 9 November 2007 from the Ministry of Local Government, Public Works and Urban Development stating that the Ministry would not consent to the cession of the first defendant's rights and interests in the property to the plaintiff. The witness said that it was because of that letter that the plaintiff is now only pursuing the claim for damages only. It was at this stage that both legal practitioners advised the court that they had agreed that if the alternative order for damages is granted the award should be in an amount of US$22,000.

The witness said that he does not know the date when the amount of $6,500,000= was paid by the plaintiff into Denrose Real Estate's account. (NB) They only received the information from Denrose Real Estate that that the amount had been paid and when they asked for cession to be effected, after payment was made, the agent told them that they were waiting for the person who was going to come from Bulawayo (presumably Felix Dzumbunu) to sign the cession forms.

The second and last witness to testify for the plaintiff was Tawona Mike Munetsiwa Makope. He is the father of the last witness and the plaintiff. He said that after the plaintiff had seen an advertisement in the newspaper, while he was in the United Kingdom, he telephoned him and asked him to go and see one Patrick Disban at Denrose Real Estate. Patrick Disban took them to view a residential flat. After that, and on 4 September 2006, Memory Chatambudza Makope, the last witness, signed an Agreement of Sale, exhibit 2, in his presence. They were told to go back home and return the following day in order for cession to be effected. When they went back to Denrose Real Estate the following day they were told that Mr. Dzumbunu, from Bulawayo, had not arrived to attend to the cession. They were told to come back the following day. They did and were, again, told that Mr. Dzumbunu had not yet come from Bulawayo but had made arrangements with his brother, one Geofrey Dzumbunu who was said to stay in Sunningdale. The witness and members of his family went back to Denrose Real Estate the following day, and, again, there was no attendance by the seller.

To date, cession has not been done.

The witness said that when they asked Mr. Zimbudzana, of Denrose Real Estate, why cession was taking so long, he said that they had discovered that Mr. Dzumbunu, of Bulawayo, owed the Ministry of Local Government some money in respect of the flat. Thereafter, he was advised that Mr. Dzumbunu had settled what he owed the Ministry and that cession was imminent - but cession did not take place.

In November, the witness was given the keys by Patrick Disban who told him that the flat was now theirs and that cession would be done later. At the end of November the witness went to the flat and found papers from the Municipality for payment of rates, water, electricity and rentals. He took the papers to Mr. Zimbudzana who told him to pay the bills as Mr. Dzumbunu was not going to do anything about them. All in all the witness paid Z$100,000=. He did not move into the flat at that stage as he was waiting for cession to be done. He later took occupation of the flat through his nephew who moved in at the beginning of January 2007.

When the witness went back to Denrose Real Estate to find out when cession would be done Mr. Zimbudzana showed him exhibit 3 reflecting that the plaintiff had paid an amount of Z$6,500,000=. He said that he paid the monies reflected in the two receipts on exhibit 4 and that the money was not returned to him at any stage. Even though the agreement provided that occupation of the flat would only be after cession, he took occupation because the agent from Denrose Real Estate told him to do so as there was nothing to wait for, the delay in having the cession done having been caused by the other party. Mr. Zimbudzana told him that if there was any money owing by the plaintiff to the first seller he would have advised the witness.

The plaintiff's case was closed after this witness' testimony.

The first defendant then gave evidence to the following effect. He is the present leaseholder (of rights and title) in respect of the property in issue. He acquired the property after making application to the City of Harare after which he was called to an interview by the Ministry of Local Government. Thereafter, the flat was allocated to him.

Although he is not privy to everything that transpired concerning the Agreement of Sale, he agreed to the property being sold.

He stayed in the flat for one and half years but it became too small for his family. He acquired another property and built a house big enough to accommodate his family. He then decided to give the flat to his brother, Felix, who is based in Bulawayo as he used to have accommodation problems when he came to Harare. After some time had elapsed Felix said that he wanted to sell the flat and he gave Felix the go-ahead to sell the flat and deal with the flat as he saw fit.

Under cross examination, the witness was unable to say off-hand the terms of his lease with the City of Harare. He said that there was no paperwork to show that he had ceded his rights to Felix Dzumbunu. He said that exhibit 7, the letter from the Ministry of Local Government, was incorrect in stating that the Ministry entered into an Agreement of Sale with him on 23 September 2006. Initially, the witness said that he did not sign any cession forms. When he was shown exhibit 5 he said that he did not remember signing it. When he was then asked to compare the signature thereon with that on the Agreement of Sale, he then said that the signature was his. He also said that when he signed the Agreement of Sale he did not read it. He received no money from Felix for the property. Felix told him that the people were crooks and that no money had been paid. He also said that the address given in the Agreement of Sale as his address is in fact Felix's address. The address is in Harare and not in Marondera as it states. The two mobile phone numbers recorded thereon are for his brother and him respectively. He does not know and did not have any dealings with the people from Denrose Real Estate and that the agreement was brought to him for his signature by his brother. He said that from the time that he gave the property to Felix he has no knowledge about the movement of the flat keys to Denrose Real Estate and has no knowledge of any other events that transpired. He also said that he started living at his new home in 2004 or 2005 and by then he had already signed the Agreement of Sale. When he signed the Agreement of Sale the flat was still registered in his name at the Ministry of Local Government.

Felix Dzumbunu was the next witness for the first defendant. He is based in Bulawayo. His evidence was to the effect that he is familiar with this matter. The first defendant is his brother. About ten years ago the first defendant, who was renting the flat in question from the Ministry of Local Government, offered the flat to him as it was no longer suitable for his needs due to the size of his family. He accepted the offer which included the responsibility to choose who occupies the flat, to pay rentals and any dues relating to the flat to the relevant authorities and assume all risk in relation thereto. The first defendant however remained, and still remains, the leaseholder of this immovable property.

Sometime in July or August 2006 the witness decided to dispose of the flat. The first defendant was agreeable to the idea. The rest of his siblings were also involved in discussions concerning the witness' decision. It then happened that one distant cousin of the witness, whilst having drinks somewhere in Mufakose where he lives, mentioned this to Patrick Disban of Denrose Real Estate. The witness eventually talked to Patrick Disban and expressed his reservations about the possible complications that were likely to arise as the property was leased to the first defendant. Disban assured him that he was conversant with all the necessary procedures that had to be undertaken in such circumstances. The witness, having been assured that Disban knew all the procedures then gave him the responsibility of ensuring that all the necessary procedures and requirements regarding the transaction were properly attended to. He also gave him the authority to sell the flat. This was about the first week of September 2006. The witness was and remains unfamiliar with the procedures that needed to be done for cession to be effected. They discussed and agreed that the selling price would be between Z$5 million and Z$5,5 million. The discussion took place sometime in early September 2006.

A day after their discussion, Patrick Disban phoned the witness and indicated that he had a prospective buyer for the property. Disban did not name or identify the prospective buyer. They agreed that Disban should prepare a preliminary agreement. Sometime during the first week of September Disban faxed the agreement to him in Bulawayo. The seller was stated to be F. Dzumbunu (the witness) and he asked Disban to correct it. Before faxing the corrected agreement, Disban advised the witness that the buyer had sent money for the purchase price from the United Kingdom. The witness asked Disban to quickly attend to the amendment of the agreement so that he could come to Harare to sign it but Disban took his time, and, in the process, spanning a period of about one and half to two weeks, he was saying that the money which was destined for the account of Denrose Real Estate was lost as the buyer had quoted the wrong name or account number and that the money had to be “resent”.

The witness said that according to their agreement the money was supposed to be passed on to him upon the signing of the agreement. When Patrick Disban said that the money had been lost the agreement had not yet been signed and the witness had had no direct communication with the buyer. After the lapse of the one and half to two weeks period referred to above Disban said the money had been found. The witness was suspicious. Because of the hyper inflationary environment they were forced to re-look at the purchase price which they then agreed to place at Z$6,5 million. He told Disban to prepare the Agreement of Sale. He told Disban that he was going to come to Harare to sign as a witness as the first defendant was not prepared to sign as seller before the witness had signed the agreement as a witness. The witness eventually signed that agreement on 20 September 2006. The first defendant also signed the agreement on the same date. He said that his understanding of the agreement as well as that of Disban was that he was to get the purchase price upon or soon after signing the agreement and that he greatly emphasised the need for him to receive the money expeditiously. His understanding was also that cession would be effected after payment and only after cession would the purchaser take occupation.

The witness did not receive any payment after the signing of the agreement.

When he contacted Patrick Disban, the day after the signing of the agreement, to inquire whether transfer of the money had been made into his account he was surprised to hear that cession had to be done first before payment could be made into his account. Before then the understanding had always been that payment was going to be made first. The witness became suspicious again and thought that Denrose Real Estate possibly did not have the money which had been claimed to have been received from the purchaser for onward transmission to him and on the basis of which information the seller had proceeded with the signing of the agreement. He had been advised that the Z$6,5 million was already available before the signing of the agreement. Thereafter, Disban sent the witness a text message or “sms” asking him to inform the first defendant to go and sign the cession forms in order to speed up transfer of the purchase price into the witness' account before 11.30am on 22 September 2006. He said that he reluctantly asked the first defendant to go to the relevant local authority offices with the agent for the said purpose. At the local council offices, the first defendant was told that an amount of about Z$300,000= had to be paid. The witness said that he declined the purchaser's offer to pay the said amount and that he paid the money himself.

When the witness asked if he could get payment of the purchase price first to enable him to pay the required amount, the response he received was that the cession had to be done first.

A legal practitioner…, who had come onto the scene purporting to be a representative of the purchaser suggested that they pay some Government officials Z$80,000 in order to secure the processing of the documents. He did not agree with the suggestion.

The witness raised with Mr Zimbudzana his concerns over what had happened. He also raised the issue of payment of the purchase price again. Several excuses were raised and sometimes Mr Zimbudzana would avoid talking to the witness when he called from Bulawayo. About the first or second week of October 2006, after several phone calls from both sides, Mr Zimbudzana suggested that they hold a meeting primarily to look at another agreement as the witness was complaining about the delay in payment. Mr Zimbudzana advised him, over the phone, whilst he was still in Bulawayo, that there had been unforeseen delays in paying the money to the witness. He met with Mr Zimbudzana and Patrick Disban in Harare at the Jameson Hotel. They asked him what he thought would be a fair price as at that date. He assumed that they were mandated by the purchaser when they indicated a revised offer of Z$9 million. The witness suggested Z$12 million. They eventually agreed at Z$10 million which was to be paid immediately after the signing of the agreement (NB: No second agreement was ever signed).

It was agreed at the said meeting that Denrose Real Estate would prepare a new agreement by the Monday following the day of the meeting and that it would be faxed to the witness for verification and signing. They also agreed on certain variations to the previous agreement, exhibit 2. They agreed that because of the history of unfulfilled promises, if Z$9 million was not paid within a week or five working days the witness would “automatically” cancel the agreement. He then sought to qualify this by stating that the Z$10 million was split into two amounts; Z$9 million was to be paid immediately upon signing the agreement and the remaining Z$1 million was to be paid at the end of December 2006. The agents said that they had Z$6,5 million in the Bank and were expecting the plaintiff to send through telegraphic transfer the balance to make up the Z$9 million. Payment to the witness would thus be done within a few days. He then also stated that they agreed that the Z$6,5 million was to be paid immediately by way of bank transfer as it was alleged to be available and that as he used the same bankers with Denrose Real Estate it was going to be an internal transfer which would have immediate effect.

Neither the Z$6,5 million nor the Z$9 million was paid or transferred into the witness' account as agreed. The witness said that he never saw any proof that the plaintiff had paid the monies he was alleged to have paid to Denrose Real Estate.

It was also the witness' evidence that at the time that the agreement placing the purchase price was reached the flat was vacant but he had since given the keys to the estate agents before then so that they would be able to show the flat to prospective purchasers. He was not however sure as to how the plaintiff managed to obtain possession and control of the flat but only assumed that the plaintiff was given the keys by the estate agents. He did not authorise the estate agents to give the keys to the plaintiff as he had not received the purchase price in terms of the agreement, and, in terms of the agreement, occupation was supposed to be after payment and cession. He only became aware that the plaintiff had taken control of the flat at the end of November 2006 when he sent one of his employees on a routine check of the property. The witness' employee found a man who claimed to be the plaintiff's nephew. Thereafter, the witness advised the nephew to let the plaintiff know that there were outstanding issues relating to the sale of the flat.

When the witness checked on his bank account during the first week of December 2006, in the normal course of business, he found that an amount of Z$6,650,000 had been transferred into his account. The Bank confirmed that the money had come from Denrose Real Estate. The said amount was credited into his account on 24 November 2006. Noone from Denrose Real Estate had communicated to him about the transfer.

The witness said that he immediately called the estate agents and advised them that he was cancelling the agreement due to their non payment, in violation of their agreement, and that he made this communication during the third week of November 2006 (note discrepancy in dates here). He wrote cheques payable to Denrose Real Estate in the full amount and hand deposited the envelope to Denrose Real Estate offices during the period around 13 and 15 December 2006. He was told that the purchaser would be advised of this development. As his account was later debited he took it that Denrose Real Estate deposited the cheques into its account. There was no further communication between the witness and the estate agents representatives concerning the Agreement of the Sale of the flat.

With regard to cession, the witness said that after signing the cession form the parties proceeded to the City Council offices and to the offices of the Ministry of Local Government where relevant payments were made. The witness said that after he signed the cession form he handed it back to the estate agents who were familiar with the necessary procedures and who were supposed to finalise the matter with the first defendant. As he never saw any document confirming that the cession was finally approved, his assumption was that cession was not finalised or effected.

When asked to comment on exhibit 7, the letter from the Ministry of Local Government, the witness said that he was led by the estate agents to believe that it was possible to sell the property legally. Furthermore, in terms of their agreement (which one, if the written one, is he therefore saying it was not cancelled?) the purchaser ought to have acquainted himself with all the encumbrances that might apply to the property. He said that the date of September 2006 which is stated in the letter is wrong and that to his knowledge the lease agreement between the first defendant and the Ministry of Local Government was entered into in 1994.

The witness said that he did not receive the purchase price of Z$6,5 million in terms of the written Agreement of Sale, exhibit 2, neither did he receive the purchase price of Z$10 million in terms of the subsequent agreement. He did not authorise the plaintiff to take occupation of the flat.

Under cross-examination, the witness said that whilst in terms of the Agreement of Sale, exhibit 2, the payment of the agent's commission by the seller meant that Denrose Real Estate was the seller's agent, it was not conclusive proof that Denrose Real Estate was not also acting as the purchaser's agent as well. Although Denrose Real Estate was supposed to be the seller's agent the actions of Messrs Patrick Disban and Mr Zimbudzana, and the authority that they exercised during negotiations, made it clear to him that they were also acting as the purchaser's agent.

As to why he, as witness would, before the first defendant, as seller, sign the Agreement of Sale he said that that was because he had effective control of the flat as the first defendant had given it to him. He said that although the Agreement of Sale did not specifically make time of payment of the essence of the agreement it was, at all relevant times, the clear understanding that payment was going to be made immediately after signing or within a reasonable time “for as long as it took to effect transfer.”

It was highlighted to him that whilst he signed the agreement as a witness on 20 September 2006 the first defendant only signed as the seller on 25 September 2006. He answered that after signing the agreement he left it with another of his brothers who was to take it to the first defendant for his signature and he was not sure what transpired thereafter.

He was then asked why he would expect payment soon after he had signed yet he was only signing as a witness. His response was that they had always agreed that because of the inflationary environment, payment had to be prompt.

The witness' attention was drawn to the first defendant's synopsis of evidence which states that the parties entered into an agreement on or about 6 September 2006. He commented that this was not correct and said that there was no written agreement on 6 September 2006. He was also referred to paragraph 1 of the first defendant's plea which states that the…, defendant entered into a written agreement of sale on 4 September 2006 and he said that he had no comment to make about that. He said that the only discussions that he ever had concerning the agreement of sale were with the two named gentlemen from Denrose Real Estate. He only had a brief casual discussion with Mr. Makope (senior) but it was not about the contents or details of the agreement of sale.

He was asked why it had taken him until the third week of November 2006 to cancel the Agreement of Sale yet their agreement at the Jameson Hotel meeting was that if payment of Z$9 million was not made within a week thereof, translating to about the third week of October 2006, cancellation would be immediate.

His response was that communication was always being made to establish the reasons for the non-payment. Sometimes the agent would not take his calls whilst at other times he would be told that payment would be made the following day but he eventually decided to cancel as the payment was not made.

It was put to the witness that the plaintiff's stance was that he only paid the additional amount because he wanted the flat and not because of any new agreement.

He said that there was a new agreement which he negotiated with Denrose Real Estate as the plaintiff's agent. He said that Denrose Real Estate represented both the plaintiff and the first defendant. He also said the figure of Z$11 million, in paragraphs 5 and 6 of the first defendant's synopsis of evidence, looked like an error to him and he denied the suggestion put to him that he kept increasing the purchase price for the flat.

The witness was referred to clause 6 of the Agreement of Sale, exhibit 2, which requires the giving of 14 days' notice to remedy a breach and was asked if he had given such notice in relation to the written agreement.

He said that he did not need to give notice as the action that cancelled the agreement came from the plaintiff who made new proposals.

It was put to him that as no notice had ever been given the Agreement of Sale, exhibit 2, had therefore never been cancelled and was still a valid agreement of sale.

He denied this and said that they had entered into a new agreement of sale which naturally superseded exhibit 2. Although the new document that the parties were supposed to have signed was never produced, the parties' actions, particularly the payment of Z$6,6 million into his account by the purchaser and subsequent payments of Z$800,000 and Z$1,1 million were all meant to fulfill the new purchase price.

The witness said that he asked for, but Denrose Real Estate never produced proof of any payment that they allegedly received from the plaintiff. Neither did the plaintiff furnish him with any proof of payment to Denrose Real Estate except for the manually produced exhibit 3 which does not give the dates or methods of payment. He insisted that the plaintiff took occupation in November 2006 and not end of December 2006 or beginning of January 2007 as claimed by the plaintiff.

His attention was drawn to paragraph 3.5 of the first defendant's plea which states that the first defendant allowed the plaintiff to occupy the flat in September 2006. It was put to him that he allowed the plaintiff to take occupation because he had paid Z$6,5 million in terms of the written agreement.

He denied this. He was asked to produce, but could not, documentary proof that the Z$6,6 million was returned to Denrose Real Estate. He was however surprised by the suggestion that the plaintiff had never received that money as the agents in their correspondence never disputed that they had received the money. The said correspondence was not however produced before the court.

As to why the witness did not claim rentals from the plaintiff after he took occupation of the flat the witness said that they instead wanted to take action to evict the plaintiff from the premises. He had however not filed any papers for the eviction of the plaintiff. It was then put to him that that was because the plaintiff was in lawful occupation. He also believed that any such dues or any monies that would have accrued to him through the occupation of the premises by the plaintiff would be taken into account when this court makes its judgment.

The witness also said that he had not called Denrose Real Estate to testify because “to a certain extent the agent was surprisingly hostile” to him and he felt that they were conniving with the plaintiff.

The first defendant's case was then closed.

The first issue referred for determination is whether Denrose Real Estate was agent for the plaintiff or for the defendant

In Frazer NO v Ruwisi 1990 (2) ZLR 99 (SC)…, KORSAH JA said:

“In Balzun v O'Hara & Ors 1964 (3) SA 1 (T) at p4, Colman J quoted, with approval, the following words from the judgment of Lord Greene MR in Wragg v Lovett [1948] 2 All ER 968 (CA) at p969G:

'…, we must not be understood as suggesting that when a vendor merely authorises a house agent to 'sell' at a stated price he must be taken to be authorising the agent to do more than agree with an intending purchaser the essential (and, generally, the most essential) term, ie the price. The making of a contract is no part of an estate agent's business, and, although, on the facts of an individual case, the person who employs him may authorise him to make a contract, such an authorization is not lightly to be inferred from vague or ambiguous language.'

Relying on the above quoted words of Lord Greene MR, QUENET JP held, in Guest and Tanner (Pvt) Ltd v Lynch 1964 RLR 252 (A)…, that:

'.., the words 'go ahead and prepare the agreements to clinch the sale' are susceptible of the meaning, 'prepare the agreement so that a sale can be concluded', and do not necessarily, mean 'prepare the agreements and you conclude the sale'.

And CHRISTIE, in his book Business Law in Zimbabwe…, observes that:

'…, the presumption that the ordinary relationship (between an estate agent and his principal) is intended is so strong that instructions to 'sell' or to 'go ahead and prepare the agreements to clinch the sale' will not be interpreted as authorizing an estate agent to conclude the sale.'

It seems to me that the mere acceptance of a deposit by an estate agent, without more is not unequivocal evidence of a mandate to conclude a contract on behalf of his principal. It is susceptible to the inference that if the deposit and the proposed terms of the payment of the balance of the purchase price meet with the approval of his principal, then the seller and purchaser may conclude an agreement of sale. The doctrine of consideration has no place in the law of Zimbabwe, and I do not see that the only inference to be drawn from the acceptance of a deposit by an estate agent, without more, is that he has a mandate to conclude an agreement on behalf of his principal.…,.

I think this issue of a receipt of a deposit from a buyer was succinctly dealt with by WATERMEYER J in Earlie Homes Estates v Miller 1977 (4) SA 288 (C)…, where the learned judge said:

'In my view, the estate agent, unless he is the agent of the seller to receive the purchase price which, in the absence of express or implied authority, he is not (see Tank v Jacobs 1 SC 289; Wessels v De Villiers, 1 G 141 (1885 OFS 141); Field & Co v Marks & Co Ltd 12 EDC 13; Roberts v Bryer Bros 1931 OPD 197; Burt v Claude Cousins & Co Ltd [1971] 2 All ER 611 at pp615-618; and Sorrel v Finch [1976] 2 All ER 371) must hold the deposit for the would-be purchaser. Until such time as the contract of sale is completed the would-be purchaser can call upon the estate agent to return the money, but if the contract of sale is completed then the estate agent is bound to deal with the deposit in terms of the contract of sale.'

It seems clear from the authorities that, where an estate agent, before any binding contract is made, asks for and receives a deposit, giving the receipt in his own name without more, he does not receive as an agent for the vendor; for it that were so the estate agent would be under duty to pay the deposit to the vendor forthwith. Since, however, he can only pay it to the vendor against transfer of the property or return it to the purchaser if the contract is not concluded, he holds the deposit in trust for both to await the event. He is nothing more than a 'stakeholder' and not a mandated agent of the vendor.”…,..

The Agreement of Sale makes reference to the agent in two clauses only. Clause 1(b) provides:

“The purchaser shall pay the agent's commission on the sale being $487,500= (four hundred and eighty seven thousand five hundred dollars) to be deducted from the purchase price.”

Clause 1 under “GENERAL CONDITIONS” provides:

“The agent's commission and survey fees, if any, on this sale shall be paid by the seller. The cost of transfer of the property from the seller to the purchaser including conveyancing fees, transfer duty and stamp duty, shall be paid by the purchaser. The transfer shall be carried out by the conveyancer appointed by the seller.”

On the basis of the above cited authorities, and the evidence adduced before this court, Denrose Real Estate or Messrs Patrick Disban and Mr Zimbudzana cannot, in this case, be said to be agents of one party to the exclusion of the other. They received and held the deposit for the would-be purchaser whilst awaiting the completion of the contract. They did not pay the money to the vendor.

In the case of Gabriel Real Estate, counsel for the plaintiff conceded that it was an agent of a disclosed principal, and could, therefore, not be held liable for its principal's conduct.

In Taunton Enterprises (Pvt) Ltd & Anor v Marais 1996 (2) ZLR 303…, MALABA J…, said-

“The general rule is that a person who acts as an agent and contracts with a third party in the name of the disclosed principal is not a party to the contract and is not personally liable on the contract: Wood v Visser 1929 CPD 55; Marais v Perks 1963 (4) SA 802 (E); DE VILLIERS & MACINTOSH The Law of Agency in South Africa 3^rd ed at 560.

After pointing out the fact that the general rule, that an agent who contracts with a third party in the name of a disclosed  principal is not personally liable to the third party on the contract, is founded on general convenience and sound policy, JOSEPH STORY, in The Law of Agency, states that our law does not, however, exempt the agent from personal responsibility where he has chosen, "by his own conduct or form of the act or contract," to create personal liability or where personal liability is implied or created by the operation of the law. These are obvious exceptions to the general rule.

The learned author sets out, in para 393, the forms in which the exceptions may find expression. Of relevance to this judgment is the first exception which is mentioned as being:

'Where, the contract is made in writing expressly with the agent and imports to be a contract personally with him although he may be known to act as an agent.'

The exception extends to oral contracts: Alien v du Preez 1950 (1) SA 4 10 (W); Overseas Trust Corporation v Godfrey 1940 CPD 183.”

The next issue to be considered is whether Thando Mabaisa or Calderwood, Bryce-Hendrie and Partners Legal Practitioners had the mandate to enter into the purported written Agreement for Sale in the manner they did.

The duty of an agent is to introduce the Buyer to the Seller. That is all.  An agent may not, without a special mandate, sign an agreement on behalf of a principal nor can he receive part or whole of the purchase price.

In casu, Thando Mabaisa or Calderwood, Bryce-Hendrie and Partners were specifically mandated to find a buyer with who Sibonginkosi Chidakwa and her under Single Moyo would negotiate the purchase price.  Calderwood, Bryce-Hendrie and Partners or Thando Mabaisa were not mandated to sign any Agreement of Sale of the property on behalf of Sibonginkosi Chidakwa and her sister - let alone receiving the purchase price on their behalf. See Skido Property Trust vs Peter Mkwananzi and John Pockock HB108-07.

Consequently, it follows that the Agreement of Sale entered into by the applicant and Thando Mabaisa, purportedly representing the first respondent, was invalid and of no force or effect.

In his “To whom it may concern” letter dated 20 October 2006, Mr. McNair states-

“…,. We have appointed Mr. George Graham to act on our behalf [sic] in the resuscitating of farming operations and to ensure the security of the above farm and due operations.”

I also consider it unnecessary to discuss the issue of whether or not the second defendant was an agent of the plaintiff or whether he had a mandate to sell the house.

This is because the evidence shows that, at all material times, the first defendant dealt with the plaintiff.  She is the one who showed them the house and negotiated the price, she led them to the second defendant where the Agreement was signed in her presence and she is the one who received the purchase price and proceeded to sign the documents to pass transfer.

I have no doubt in my mind that the second defendant is a crook who may have specialised in the business of swindling people of their properties. It may well be that after the transaction he swindled the plaintiff of her money hence the decision to go back on her promises. This, however, has nothing to do with the first defendant who was an innocent purchaser who paid his money to the plaintiff.  In her wisdom, the plaintiff elected to pass on the money to a trickster and must therefore live with the consequences of her choice.

In the result, I find in favour of the first defendant and make the following order, to wit-

(1) The plaintiff's claim be and is hereby dismissed.

(2) Judgment be and is hereby entered in favour of the first defendant to the effect that he is the lawful owner of Stand 6638 Nketa 9, Bulawayo.

(3) The plaintiff and those claiming through her should vacate the said premises within 21 days from the date of this order failing which the first defendant is entitled to evict them.

Counsel for the applicant's contention that the conviction of the applicant's agent and the decision by the first respondent to dismiss the appeal against the seizure is not relevant because this court has inherent jurisdiction cannot be taken seriously. 

The appellant is the registered owner of  a certain property called Lot 4 of Stand 31A, Groombridge Township 2, Harare, measuring 4318 square meters and held under deed of Transfer No. 5295/74.(“the property”).

She is resident in the United Kingdom. Sometime in January 2009, she gave to Vivian John de Villiers (“de Villiers”) power of attorney to manage her affairs here in Zimbabwe. In about July 2009, Vivian John de Villiers advertised the property for sale on the internet. The respondent's Director, Mrs Chipo Makamure, who had been on the lookout for a property to buy, heard of it through Midstar Properties (Private) Limited Estate Agents (“Midstar”). Together with her husband, Alex Makamure, she viewed the property and made an offer to purchase which resulted in an Agreement of Sale being concluded on 25 August 2009. The Agreement was drawn by Midstar Properties (Private) Limited Estate Agents and signed by Vivian John de Villiers on behalf of the Seller, and Mrs Makamure for Voteti.

Clause 9 of the Agreement contained the terms of payment. The purchase price was USD145,000= of which USD10,000= was to be paid by the Seller as commission. A deposit of USD50,000= was to be paid upon signature of the Agreement and the balance of USD95,000= was to be paid into the Seller's account. No account was nominated in the Agreement.  Vacant possession was to be given to the Purchaser on 1 November 2009.

When Mr Makamure, on behalf of Voteti, attempted to make payment into the offshore account details of which were provided by Vivian John de Villiers (through Midstar Properties (Private) Limited Estate Agents) he was advised that the funds in Voteti's account were not free funds and could not be transferred to a foreign account without the approval of the Reserve Bank of Zimbabwe. Further, it would cost an additional USD2,000= to effect the transfer. The Makamures returned to Midstar Properties (Private) Limited Estate Agents to advise of the problem. Midstar Properties (Private) Limited Estate Agents's Group Chief Executive Officer, Dr A Magirazi, (“Magirazi”) telephoned Vivian John de Villiers who authorized payment of the purchase price into Midstar Properties (Private) Limited Estate Agents's account.

On 2 September 2009, Voteti made full payment of the purchase price into the account of Midstar Properties (Private) Limited Estate Agents. On 4 September 2009, Dr A Magirazi wrote to Musariri Law Chambers instructing them to attend to the transfer of the property to Voteti.

In October 2009, the date is not given, the appellant came to Zimbabwe. During her stay, she sold her personal belongings (which were at the property) and had cordial meetings with the Makamures. She was aware, according to Vivian John de Villiers, that Midstar Properties (Private) Limited Estate Agents was in receipt of the entire purchase price, USD40,000= of which had already been transferred into the nominated account in Ireland which was held by her niece, one Fiona Fields. She did not discuss the purchase price with the Makamures. She met with Dr A Magirazi and her attorneys, Lofty and Fraser.  She returned to the UK after giving instructions to Vivian John de Villiers that the balance of the purchase price should be paid into Lofty and Fraser's trust account. The title deeds of the property were being kept by that firm.

By 19 October 2009, transfer of the property to Voteti had not been effected and its legal practitioners wrote to Dr A Magirazi as well as to Lofty and Fraser demanding the release of the title deeds to enable the transfer to be effected and advising that in the event of their failure to comply with that demand it was their intention to sue for specific performance of the contract and damages. No response was received to this letter. Instead, on 1 November 2009, Voteti was given vacant possession of the property by Vivian John de Villiers.  By then, the balance of the purchase price had not been paid by Midstar Properties (Private) Limited Estate Agents to Lofty and Fraser.

On 3 November 2009, an agreement described as a 'Memorandum of Understanding' (MOU) was concluded between “Mr Viv De Villias “FOR KATHLEEN HANCOCK” being the Seller of No.7 Thornburg Avenue, Mount Pleasant, Harare” (it is common cause that this was a misspelling of De Villiers) and “Midstar Properties (Pvt) Ltd HERETO REFERRED TO AS THE SELLERS' AGENT.” 

The terms of the Agreement were as follows:

“THE PARTIES TO THIS MEMORANDUM AGREED THAT:-

1. Midstar Properties (Pvt) Ltd received from Voteti Trading (Pvt) Ltd the sum of US145,000= for the purchase of No.7 Thornburg Ave Mt Pleasant by the later.

2. The agent's negotiated commission was US$10,000=. The deposit amount of US$40,000= was transferred by Midstar Properties (Pvt) Ltd into the seller's offshore account on 1^st September 2009.

3. The next payment of US$30,000= was paid by the agent into Lofty and Frazer Legal Practitioner's Stanbic Account on 29^th October 2009.

4. Upon confirmation of delivery of US$30,000=, the total released at the date of this understanding is US$70,000= leaving a balance of US$65,000=.

5. The balance will be paid in weekly instalments of US$20,000= effective 1^st November 2009.

6. The agent, Midstar Properties (Pvt) Ltd, guarantees that these amounts shall be disbursed through telegraphic transfer into Lofty and Frazer Legal Practitioner's Stanbic Account.

7. The seller will allow the buyer to take occupancy of the property, namely, No.7 Thornburg Avenue, Mount Pleasant, Harare effective 1^st November 2009 on a rental basis at a cost of US$600= per month. This cost to (sic) shall be borne by the Agent and shall be payable until such time as payment has been received in full.

8. Legal costs incurred by both the buyer and seller as a result of the handling of this sale shall be borne by Midstar Properties (Pvt) Ltd and paid on presentation.

9. This understanding shall remain in force until such time as the agent has paid the whole outstanding amount and no amendments shall be made by either party unless by consent and in writing.”

Following this Memorandum of Understanding, a payment of USD10,000= was deposited by Dr A Magirazi on 4 November 2009 into the trust account of Lofty and Fraser.

It was not until 4 January 2010 that the appellant's legal practitioners wrote to Voteti's legal practitioners responding to their letter of 19 October 2009. In that letter, they alleged that the purchase price had not been paid in full in accordance with the terms of the Agreement and that unless the full purchase price was paid, it was the Seller's intention to cancel the contract.

Four months later, on 7 April 2010, the appellant's legal practitioners, by letter to Voteti's legal practitioners, advised that the Agreement was cancelled.

By 13 June 2010, no further payment in terms of the Memorandum of Understanding had been made and Vivian John de Villiers reported the matter to the police. Two days later, on 15 June 2010, Voteti issued summons against the appellant claiming, inter alia, transfer of the property, and, in the alternative, a refund of the purchase money paid in the sum of USD145,000=.

The appellant counter- claimed for the ejectment of Voteti from the property and tendered the amount received by her which she claimed to be USD80,000=.

The court a quo heard evidence from Alex Makamure and Vivian John de Villiers. It found Alex Makamure's evidence to be 'more consistent and certainly more credible than the contradictory version presented by de Villiers.' It found that Midstar Properties (Private) Limited Estate Agents was the agent of the Seller and that it was endowed with authority by the Seller's representative, Vivian John de Villiers, to receive payment of the purchase money into its account. It concluded that the payment by Voteti into the account of Midstar Properties (Private) Limited Estate Agents constituted a valid discharge of its obligations in terms of the contract of sale.

The main issues argued on appeal were whether the court a quo was correct in finding that Midstar Properties (Private) Limited Estate Agents was the agent of the Seller, and, if so, whether Midstar Properties (Private) Limited Estate Agents was possessed of the necessary authority to receive payment on behalf of the Seller. 

These issues are dealt with in turn.

Whether Midstar Properties (Private) Limited Estate Agents was the agent of the Seller or the Purchaser

It was contended, on behalf of the appellant, that the finding of the court a quo that Midstar Properties (Private) Limited Estate Agents was the agent of the Seller was wrong. It was also contended that Midstar Properties (Private) Limited Estate Agents was, in fact, the agent of Voteti since it was mandated by the Makamures to find them a property to purchase. The Memorandum of Understanding, so it was submitted, was drawn up by Memorandum of Understanding in discharge of its mandate as agent of Voteti.

Apart from the denial by Makamure that Midstar Properties (Private) Limited Estate Agents was Voteti's agent, there are pointers in the evidence which support the conclusion arrived at by the trial judge.

a) The Memorandum of Understanding signed by Vivian John de Villiers and Dr A Magirazi on the 4th November 2009, states clearly that Dr A Magirazi is the Seller's agent.

b) In its (Voteti's) further particulars, filed on the 28^th July 2010, in response to a request filed by the appellant, the following paragraph appears:

“1. Ad Paragraph 1

First Defendant sold the house through her agent, Viv de Villiers and estate agent, Midstar Properties (Private) Limited. Plaintiff was instructed, verbally, to deposit the full purchase price into the Midstar Properties account, namely, Kingdom Bank Limited account number 47025427.”

c) When, on the 7^th October 2010, the appellant filed her plea and counter-claim she made the following allegation in paragraph 5 of the counterclaim:

“5. Midstar Properties (Private) Limited, an estate agency was appointed prior to the signing of the agreement by Plaintiff (Appellant) for the purpose of, specifically, finding a willing and able buyer of the abovementioned property.”…,.

d) Prior to that, on the 26^th June 2010, following upon the report made by Vivian John de Villiers on the 13^th June, the police recorded a statement from Vivian John de Villiers. Thereafter, on the 23^rd August 2010, Dr A Magirazi was charged with Theft of Trust Property and a warned and cautioned statement was recorded from him. The preamble to that statement reads as follows:

“I, ANDREW MAGIRAZI NR – 43-089352B-43 of the house number 528 Gemsbok Close, Mandara, Harare, do admit having been informed by Detective Assistant Inspector Nduva of Criminal Investigation Department; Serious Fraud Squad, Harare, that enquiries are being made in connection with a case of Theft of Trust Property as Defined in Section 113 of Criminal Law [Codification and Reform] Act [Chapter 9:23], which occurred on the 25^th of August 2009 at number 9 Lezard Avenue, Milton Park, Harare where it is being alleged that I was mandated by Viv De Villias to sell property styled 7 Thornburg Avenue, Mount Pleasant, Harare, for USD145,000= on behalf of the property owner KATHLEEN HANCOCK. It is further alleged that my company sold the said property and realised USD145,000= but only remitted USD80,000= to the owner of the property through Viv De Villias. I make this statement on my own free will.”

On 28 October 2010, Voteti filed its plea to the counterclaim filed by the appellant. In relation to paragraph 5 of the counterclaim (set out above), Voteti pleaded:

“2. Ad Paragraph 5

Plaintiff has no knowledge of the particular terms of reference for Midstar Properties and only knows that it is First Defendant's Estate Agent with the usual mandate for Estate Agents.”

The appellant's response in its replication in reconvention, dated 15 November 2010, was:

“2. Ad paragraph 2

The mandate of the estate agent excluded receipt of funds. The agreement quite clearly demonstrates this. There was no express mandate to receive payment.”…,.

Clearly, the appellant was, up to 15 November, asserting that Midstar Properties (Private) Limited Estate Agents was her agent.

It was common cause at the hearing of the appeal that no amendment of the pleadings was applied for or granted. Thus, it is difficult to understand why the question of the agency of Midstar Properties (Private) Limited Estate Agents became an issue which was stated in the joint pre-trial conference minute for determination at the trial.

In view of all the statements emanating from the appellant that Midstar Properties (Private) Limited Estate Agents was her agent the trial court's conclusion to that effect cannot be faulted.

Whether Midstar Properties (Private) Limited Estate Agents was authorized to receive payment on behalf of the Seller

The resolution of this issue depends on the evidence which the court a quo accepted as credible. In this regard, this Court, as an appellate court, is at a disadvantage. This is because:

“The trial judge has advantages - which the appellate court cannot have - in seeing and hearing the witnesses and in being steeped in the atmosphere of the trial. Not only has he had the opportunity of observing their demeanour, but also their appearance and whole personality. This should never be overlooked. Consequently, the appellate court is very reluctant to upset the findings of the trial judge.”

See The Civil Practice of Superior Courts in South Africa by HERBSTEIN & VAN WINSEN 3ed….,. See also Beckford v Beckford 2009 (1) ZLR 271 (S)…,.

The court a quo believed Alex Makamure having found his evidence to be credible and that of Vivian John de Villiers to be contradictory. This finding was justified on the papers. The appellant has not been honest. The denial of the fact of the agency of Midstar Properties (Private) Limited Estate Agents which it had accepted up to 15 November 2010 is clear evidence of this. Alex Makamure 's evidence was that when he encountered difficulties in making the payment into the account of Fiona Fields, he and his wife approached Alex Makamure and advised Dr A Magirazi of the problem. In their presence, he telephoned Vivian John de Villiers and explained the problem. Dr A Magirazi then advised them that Vivian John de Villiers had authorised him to receive payment of the purchase price into his account. They then proceeded to make the payment as advised.

Vivian John de Villiers' behavior, after the payment into Midstar Properties (Private) Limited Estate Agents's account is supportive of the fact that he had indeed authorised Midstar Properties (Private) Limited Estate Agents to receive the money into its account. He did not call the Makamures and request the balance of the purchase price. Instead of demanding the full amount of the purchase price, which he knew was being held by Midstar Properties (Private) Limited Estate Agents, he entered into an agreement with Dr A Magirazi extending the time of payment into Lofty and Fraser's account by four to five weeks.   He accepted an offer by Dr A Magirazi to pay rent at US$600= per month until full payment of the purchase price was effected. At no time did he indicate to the Makamures that the purchase price had not been paid as per his instructions. Instead, he proceeded to give vacant possession of the property to Voteti assuring the Makamures that there was nothing to worry about.

The evidence, in my view, clearly established that Vivian John de Villiers authorized Midstar Properties (Private) Limited Estate Agents to receive payment of the purchase price into its account on behalf of the Seller.

This is an appeal against the decision of the High Court granting summary judgment against the appellant in the sum of US$8,330,470=52 together with interest at 2.5% per annum above the prime overdraft Bank rate and costs of suit.

The claim against the appellant arose from a Service Provider Agreement concluded between the parties on 10 March 2006 (the Agreement). The Agreement required the appellant to pay the sums due thereunder within thirty days of receiving the respondent's invoices.

It is common cause that the appellant owed the respondent the outstanding amount claimed as at 30 September 2010.

The respondent issued summons on 16 November 2010, and, following the appellant's appearance to defend, applied for summary judgement on 14 February 2011.

The court a quo held that the respondent's claim was unimpeachable and that the appellant had no plausible defences to the claim. In particular, the court found that there was no supervening impossibility due to the currency regime changeover between January and March 2009, entailing any objective impossibility of recovering debts from the appellant's customers. Additionally, there was no condition precedent in the Agreement that those customers should first pay the appellant before it became obliged to pay the respondent. Lastly, there was no principal and agent relationship between the parties to preclude the recovery of payments from the appellant upon presentation of the respondent's invoices.

The grounds of appeal herein arise from the defences raised in the High Court, viz: supervening impossibility of performance, recovery from customers as a condition precedent for payment, and the existence of a principal and agent relationship between the parties.

In essence, the question to be determined is whether the learned judge was correct in holding that the respondent's claim was unassailable and that the appellant had no bona fide defences to that claim....,.

GROUNDS OF APPEAL

The grounds of appeal set out in the notice of appeal appear to have conflated the three defences raised in the court a quo.

The essence of these grounds is that the relationship between the parties, based on their conduct after the inception of the Agreement, was one of principal and agent, whereby the appellant was an agent of the respondent in sourcing customers for post-paid cellular airtime usage, collecting payments for the airtime used or sold, and then remitting payments to the respondent after deducting its commission.

Consequently, since payments to the respondent would only be due upon the appellant recovering the same from its customers, payment by the latter was a condition precedent to any payment to the respondent. This applies to the entire amount of US$8,330,470=52 claimed by the respondent.

Again, on the same footing, the appellant's failure to recover the payments from its customers constituted a supervening impossibility suspending the appellant's obligation to remit payments to the respondent, there being nothing to remit until such time as payments had been made by or recovered from the customers.

PRINCIPAL AND AGENT RELATIONSHIP

The appellant's position, as I understand it, is as follows:

Although not expressly stated in the Agreement, the common understanding of the parties was that the appellant would be paid by its customers for network service usage and would then deduct its commission and pass on the balance to the respondent.

This position appears to be buttressed by paragraph 3 of the respondent's declaration which states that the appellant would collect payments for airtime used by its customers and remit the collected amounts less its commission to the respondent.

In this connection, counsel for the appellant submits that the Court must look at the true nature and substance of the Agreement and not merely at its form. The description of the parties contained in the Agreement is not necessarily conclusive as it disguises the true nature of their principal and agent relationship.

I note in this regard the remarks of SILKE: The Law of Agency in South Africa (3rd ed.)…, where the learned author adverts to the difficulties in ascertaining the true nature of an agency relationship.

Turning to the provisions of the Agreement itself, clause 2 thereof sets out the principal rights and obligations of the parties.

The respondent undertakes to supply and distribute terminal equipment and network services to the appellant's customers (clause 2.1). In turn, the appellant may from time to time order and purchase quantities of smartcards from the respondent (clause 2.2.1). The respondent is then obliged to make the network service available to the appellant for onward supply to the appellant's customers (clause 2.2.2 as read with clause 6.1). The smartcards ordered and purchased by the appellant are allocated by it to its own customers (clause 4.1). The appellant is liable to the respondent for all charges generated in respect of each smartcard activated by the appellant with effect from the date of such activation (clauses 4.5.1 and 4.5.2). The respondent is then entitled to raise call charges, monthly service charges, and all other charges for the account of the appellant (clause 8.1). Thereafter, all charges invoiced by the respondent to the appellant shall be paid by the appellant to the respondent within 30 days of the date of the relevant tax invoice (clause 8.3).

My reading of the afore-cited provisions of the Agreement is that they clearly spell out the true nature of the relationship between the parties.

In essence, it was agreed that the appellant would go to the airtime market and source its own customers for the network services to be provided by the respondent. The respondent did not decide who those customers would be or which of them would receive network service on credit. More significantly, it was the appellant itself that carried the risk of default by its customers.

As was quite correctly conceded by counsel for the appellant, the respondent had no right, except where this was ceded to it by the appellant, in terms of clause 17.1, to sue the appellant's customers in order to enforce and collect any payments due and outstanding from them. There was simply no nexus or privity of contract between the respondent and the appellant's customers. If the appellant was merely an agent for the respondent, as its principal, those customers would have been directly liable to the respondent.

The apparent admission of agency emanating from paragraph 3 of the respondent's declaration is not, in my view, of any material significance.

The importance of pleadings should not be unduly magnified so long as there is no likelihood of prejudice being occasioned to any of the parties. While the parties should ordinarily be restricted to the averments in their pleadings, the courts should not enslave themselves to the pleadings in complete disregard of their duty to decide the real dispute between the parties so that justice is eventually attained.

See, in this context, the very pertinent observations of CHATIKOBO J in Musadzikwa v Minister of Home Affairs & Another 2000 (1) ZLR 405 (H)…, and the authorities there cited, which were subsequently applied by this Court, per ZIYAMBI JA in Moyo & Another v Intermarket Discount House Ltd 2008 (1) ZLR 268 (S)…,.

In short, pleadings cannot be construed so as to compromise the delivery of justice.

In the instant case, although paragraph 3 of the declaration is somewhat ineptly worded, it cannot be elevated above the entire declaration and the clear terms of the Agreement itself.

In any event, that paragraph makes explicit reference to the Agreement itself. More importantly, it is immediately followed by paragraph 4 which captures the essence of the appellant's obligation to pay in terms of the Agreement, i.e. to make payment for all charges within thirty days of receiving the respondent's tax invoice.

Having regard to the Agreement as a whole, I am unable to discern from its express provisions anything approximating the principal and agent relationship espoused by the appellant. It was clearly contemplated by the parties that the appellant would be engaged as an independent contractor to distribute to its own customers the network services provided by the respondent.

An order for the consolidation of these two matters was granted by UCHENA J, by consent, with no order as to costs, on 2 June 2006, for hearing before me on 7 June 2006 in Case Number 3157/06.

The first application, Case No. HC5186/05, concerns an order for specific performance while the second one, Case No.5264/05 seeks an order for the provisional liquidation of Zambezi Paddle Steamer (Pvt) Ltd (hereinafter called ZPS).

On 7 June 2006, at the request of the parties, I postponed the hearing to 13 July 2006.

When the hearing resumed, Mrs Wood, for Turner and Sons (Pvt) Ltd, applied for the forced recusal of Mr de Bourbon, for Dobrock (Pvt) Ltd, on the basis that he had been an arbitrator between these parties in 1994.

She referred to Pertisilis v Calaterra & Anor 1999 (1) ZLR 70 (H) as authority for the proposition that the legal practitioner who acted for a former client is precluded from representing a different client in circumstances where a conflict of interest is likely to arise between the former and present client. SMITH J set out the basis of the rule…, as being that:

“A legal practitioner who represents the adversary of his own client in litigation would clearly be violating his or her duty of loyalty and the common law rules against conflict of interest.”

He proceeded to survey American, English, South Africa, and Zimbabwean decided cases on the point at pages 74C–77F.

While he held that neither a partner nor his employee could represent an opponent of a former client in order to fulfill the adage that justice must not only be done but that it must manifestly and undoubtedly be seen to be done, he nevertheless permitted a partner to represent the opponent on the basis that there was no allegation that the other partner had acquired information from the papers in the possession of his firm which could be used to the former client's disadvantage.

Mrs Wood contended, that, justice will not be seen to be done if Mr de Bourbon was allowed to represent Dobrock (Pvt) Ltd, especially on the liquidation case, where Turner and Sons allege a deadlock has manifested itself between the joint shareholders, a fact found by Mr de Bourbon, as arbitrator, to exist in his 25 June 1994 ruling.

She further foresaw a need to call Mr de Bourbon on the deadlock issue in the liquidation case.

Mr de Bourbon countered by contending that he did not represent either Dobrock (Pvt) Ltd or Turner and Sons (Pvt) Ltd but acted in a quasi-judicial capacity.

He knew of no law which debarred him from representing either party as long as he had not possessed confidential information which could be used to the detriment of his client's adversary. He referred to Benmac Manufacturing (Pvt) Ltd v Angelique Enterprises (Pvt) Ltd 1988 (2) ZLR 52 (H).

In that case, Mr de Bourbon accepted a general retainer from Angelique Enterprises in a matter in which that company was involved in a dispute with Albco. He was, at that time, already seized with a retainer for Benmac Manufacturing in its contest with Angelique Enterprises, supra. He had accepted the retainer in the matter against Albco after assurance from his instructing attorney that there would be no conflict of interest.

It was accepted, in that case, by that attorney, that, he had not come into contact with any confidential information which would prejudice Angelique Enterprises in its contest with Benmac. The Law Society, and two other counsel, had absolved him of any impropriety, but, the Managing Director of Angelique Enterprise, Mr Holland, was not satisfied with their findings and advice.

REYNOLDS J held, that, Angelique Enterprises had not shown that Mr de Bourbon had in fact become acquainted with information that could be used to its detriment which would result in real mischief and real prejudice if he continued to act for Benmac Manufacturing. He did express his reservation on a legal practitioner acting for and against his client in the same or different matters.

Mr de Bourbon submitted that he had not acquired any information that he could possibly utilize to the prejudice of Turner and Sons (Pvt) Ltd and that his impartiality in 1994 had not been impugned by any of the parties.

I went through the arbitral award.

It concerned and dealt with the share of each joint shareholder in the extra costs, which were above the original cost of construction of the large commercial houseboat which Zambezi Paddle Steamer (Pvt) Ltd (ZPS) was to own.

Turner and Sons (Pvt) Ltd was not able to show what information Mr de Bourbon accessed which could prejudice its present defence and claim. If anything, I was satisfied that the arbitral award stands on its own and there would be no need to call the arbitrator to testify on it.

I accordingly dismissed the application for the forced withdrawal of Dobrock (Pvt) Ltd's counsel.

I also postponed the hearing sine die and granted, by consent, authority to Turner and Sons (Pvt) Ltd to file a further affidavit in response to Dobrock (Pvt) Ltd's supplementary affidavit.

I further reserved the question of costs in the provisional liquidation claim to which these additional affidavits pertained.

I eventually set down the matter for hearing on 1 November 2006. I directed that the parties argue the specific performance case first and thereafter proceed to argue the liquidation case.

On 12 October 2005, Dobrock (Pvt) Ltd filed the court application for specific performance against Turner and Sons (Pvt) Ltd and two others. It sought the following order:

“1. That, the respondents, jointly as well as severally, the one paying the other to be absolved shall forthwith undertake all that is necessary and required, including making all payments and completion and signing all documents required in order to procure transfer, without delay, by first respondent to applicant of first respondent's entire shareholding in Zambezi Paddle Steamer (Pvt) Ltd.

2. That, immediately upon registration of transfer in the share register of Zambezi Paddle Steamer (Pvt) Ltd (ZPS) applicant shall pay to first respondent the balance of the purchase price for the said shares; such balance being the sum of $138 million.

3. That, the respondents, jointly as well as severally, the one paying the other to be absolved, shall pay the costs of this application on the scale of legal practitioner and own client.”

The application was served on the three respondents on 13 October 2005 (see Peter Dobson's opposing affidavit of 9 November 2005 for which this averment was accepted by Antony Turner on 2 December 2005).

The three respondents filed their opposition papers on 27 October 2005 and prayed for the dismissal of the applicant's case with costs on the higher scale and made reference to the liquidation claim, case number HC5264/2005.

Case number 5264/05 is a court application brought on 17 October 2005 by Turner and Sons (Pvt) Ltd against Zambezi Paddle Steamer (Pvt) Ltd and Dobrock (Pvt) Ltd. It prayed for the winding up of Zambezi Paddle Steamer (Pvt) Ltd and that a liquidator be appointed in the following terms:

“1. That, first respondent, Zimbabwe Paddle Steamers (Pvt) Ltd be provisionally wound up pending the granting of an order in terms of paragraph 3 hereof or the discharge of this order.

2. That, Mrs Theresa Grimmel, of KPMG Chartered Accountants, Mutual Gardens, 100 The Chase, Emerald Hill, Harare be appointed as provisional liquidator of first respondent company with the powers set out in section 221 of the Act.

3. Any interested party appear before this court sitting at Harare on (a date sixty days from the date of the order) to show cause why an order should not be made placing first respondent's company in liquidation and order that the costs of these proceedings all be costs of the liquidation.

4. That, this order shall be published once in the Government Gazette and once in the Herald Newspaper. Publication shall be in the short form annexed to this order.

5. Any person intending to oppose or support the application on the return day of this order shall:

5.1. Give due notice to the applicant at Messrs Byron Venturas & Partners, 2nd Floor Tanganyika House, Corner 3rd Street/Kwame Nkrumah Avenue, Harare.

5.2. Serve on the applicant, at the address given above, a copy of any affidavit which he files with the Registrar of the High Court.”

The application for provisional liquidation was served on the respondents on 17 October 2005, who entered opposition on 31 October 2005 and filed, on that day, their opposing affidavit by fascimile. The actual opposing affidavit was filed on 9 November 2005.

These two applications were consolidated on the bases that the principal parties were the same and that the fundamental issue in each matter related to the ownership and management control of Zambezi Paddle Steamer (Pvt) Ltd (ZPS).

The pleadings in these consolidated matters are voluminous.

The founding, opposing, answering and supplementary affidavits are reinforced by an assortment of attachments which consists of the Memorandum of Association of Zambezi Paddle Steamer (Pvt) Ltd, electronic mail between the parties, and other documents raised by various people who worked for the parties in various capacities.

I have read all these documents.

It is apparent from these documents that there are areas in which the parties agree and others where they are at variance.

It is appropriate that I first deal with the facts as I have determined them to be from the wealth of information that is set out in the pleadings in both these cases.

The preliminary details on the formation of Zambezi Paddle Steamer (Pvt) Ltd (ZPS), on 3 April 1989, are set out in detail by Anthony Turner (Antony) in his founding affidavit in the liquidation matter, case HC5264/05 (Case No.2). Those details were admitted to by Peter Jameson Dobson (Peter) in his opposing affidavit in that case.

Turner and Sons (Pvt) Ltd agreed with Dobrock (Pvt) Ltd, in 1988, on a joint venture to construct and thereafter operate a 'Mississippi River Boat' for commercial use on Lake Kariba.

The concept of the “Southern Belle” was created by Turner and Sons (Pvt) Ltd who approached Dobrock (Pvt) Ltd.

Dobrock (Pvt) Ltd agreed to become its joint partner in the venture and to provide working capital and investment in the project.

Zambezi Paddle Steamer (Pvt) Ltd was incorporated as the special purpose vehicle through which the large commercial houseboat, MV Southern Belle, would be owned and operated.

Zambezi Paddle Steamer (Pvt) Ltd was incorporated in terms of the Companies Act [Chapter 24:03] with an issued share capital of $30,000 divided into 30,000 shares of $1 each fully paid up. Each of the two joint partners subscribed to 15,000 shares of $1 each in Zambezi Paddle Steamer (Pvt) Ltd.

The joint shareholders agreed that Turner and Sons (Pvt) Ltd would first build a model of the craft, and, thereafter, carryout the necessary construction work and interior design of the vessel at a contracted price. Dobrock (Pvt) Ltd would source both local and foreign raw materials for this construction. The total costs of both these operations would be the total cost of the vessel and would be met equally by the joint shareholders.

The agreement was reduced to writing and signed on 31 May 1991.

The arbitral award, of 15 June 1994, indicated that the vessel was completed in 1994. The original construction price was set at $5,950,000.

The issue before the arbitrator centred on the amount by which the original contract price increased, which issue he resolved.

Zambezi Paddle Steamer (Pvt) Ltd was run for 18 months, from the completion of the vessel in 1994, by Turner and Sons (Pvt) Ltd. Dobrock (Pvt) Ltd thereafter took over the management control of Zambezi Paddle Steamer (Pvt) Ltd and appointed a Managing Director, Adamson, to run it.

It was common cause, that, from 2000, the tourism industry went into decline and this affected the bottom line of the MV Southern Belle operations of Zambezi Paddle Steamer (Pvt) Ltd.

There is evidence, in the form of electronic mail exchanged between Peter Jameson Dobson and Anthony Turner, the principal shareholders in Dobrock (Pvt) Ltd and Turner and Sons (Pvt) Ltd, respectively, between 19 January 2003 and 7 April 2004, that, the joint shareholders were prepared to sell their respective shareholdings in Zambezi Paddle Steamer (Pvt) Ltd to the right suitor - if one came along.

On 4 May 2004, Zambezi Paddle Steamer (Pvt) Ltd Managing Director presented a report which highlighted the difficult circumstances the commercial houseboat operations were in. It required urgent maintenance and refurbishment to attain its former glittering glory.

On 6 June 2004, Anthony Turner indicated his decision to sell his shares in the commercial houseboat to Peter Jameson Dobson. This was a clear pointer to his unwillingness to inject funds for maintenance and refurbishment of the houseboat.

On 18 June 2004, Peter Jameson Dobson indicated his willingness to inject $250 million, for this purpose, provided his shareholding in Zambezi Paddle Steamer (Pvt) Ltd increased by 10% while that of Anthony Turner was reduced by the same percentage. He suggested that the houseboat was valued at approximately $3.5 billion. He followed up this by another e-mail of 25 June 2004.

He received a response on that same day (contained in an email wrongly dated as 6 June 2004) from Anthony Turner in which he offered him his shareholding in Zambezi Paddle Steamer (Pvt) Ltd for the sum of $250 million.

Peter Jameson Dobson duly accepted the offer.

He came to Harare, and, during the period 28 June to 14 July 2004, discussed with Anthony Turner on the terms of payment of Antony's entire shareholding.

He agreed to procure payment where and when Anthony Turner wanted.

The purchase price was agreed at $250 million. It was to be paid by Peter Jameson Dobson into the account of Antony's daughter, Jenny, in the United Kingdom, the bank account details of which he received.

The following day, after the terms of payment had been agreed, Anthony Turner requested part payment of the purchase price in local currency.

Peter Jameson Dobson alleged that he made out cheque payments to Chitekeshe of $115 million and to Vretto of $25 million, as part payment, a total of $140 million which Anthony Turner used to buy a pick-up truck.

This averment was not disputed by Anthony Turner, yet, he maintained, in his other affidavits, that, he was paid $138 million and $112 million remained outstanding.

Peter Jameson Dobson, in his prayer, and in Mr de Bourbon's submissions on behalf of Peter's company, accepted that the outstanding purchase price was $112 million.

No cheques or proof of payment in the sum of $140 million was produced.

I am therefore prepared to hold, that, Peter Jameson Dobson paid $138 million and had an outstanding balance of $112 million.

Anthony Turner averred, in his opposing affidavit, that, he required £12,000 to import a new engine for the craft that he was building, known as the “Zambezi Trader”. This craft would not be in competition with the houseboat at all and he was building it for his own account with the moral support and blessing of Peter Jameson Dobson.

Peter Jameson Dobson agreed to pay this amount into his daughter's bank account in the United Kingdom.

He repeated this allegation in paragraphs 31 and 32 of his founding affidavit in Case No. HC5264/05.

This was to be in lieu of the balance of the purchase price of $112 million.

In Case No. 5264/05, in paragraphs 26 and 27 of his opposing affidavit, Peter Jameson Dobson did not respond to these averments in so far as they refer to the alleged mode of payment in foreign currency.

That payment was to be in foreign currency is clear from Peter Jameson Dobson's own founding affidavit.

In paragraph 18, he averred, that, even when he met Anthony Turner, per chance, at the Borrowdale Race Course, in November 2004, he reassured him, that, notwithstanding the fall in the value of the Zimbabwean dollar against the Pound Sterling, the amount outstanding as the purchase price remained £12,000 being the amount in pounds in July 2004.

The two gentlemen agreed, that, the accountant and company secretary of Zambezi Paddle Steamer (Pvt) Ltd, Paul Turner (Paul), a partner in Ernst and Young Chartered Accountants, would effect the share transfer and receive Anthony Turner's letter of resignation as a director therein.

There was a delay in the transfer of the shares which was occasioned by Paul Turner's attempts to structure a tax avoidance scheme for the benefit and at the insistence of Antony Turner.

I make this finding based on Antony Turner's deliberate failure to respond to Paul Turner's affidavit, which was filed in support of Peter Jameson Dobson's founding affidavit.

It was agreed, that, on 3 August 2004 and 21 August 2004, Peter Jameson Dobson wrote to Anthony Turner enquiring whether or not he had signed the necessary transfer documents and resigned as a director of Zambezi Paddle Steamer (Pvt) Ltd - the two factors which would trigger the payment of the balance of the purchase price by Peter.

It also appears, that, even on 5 November 2004, a date disputed by Athony Turner, who put it as being sometime in September 2004, when the two met at Borrowdale Race Course, Antony intimated that he had been too busy to visit Paul Turner. The parties re-affirmed, that, despite an adverse movement of the Zimbabwe dollar since July 2004, the balance of the purchase price would be paid into Antony's daughter's account in the United Kingdom at the exchange rate agreed in July 2004.

On 17 January 2005, Antony Turner proceeded to appoint Peter Drummond and Martin King as directors of Turner & Sons (Pvt) Ltd, in his stead, who were charged with the responsibility of overseeing Turner & Sons (Pvt) Ltd's interests in the Southern Belle.

A flurry of e-mails followed which attempted to resolve the issue of the sale of Antony Turner's shares in Zambezi Paddle Steamer (Pvt) Ltd, who was claiming, that, the failure by Peter Jameson Dobson to pay the balance of the purchase price timeously amounted to repudiation of the contract.

He therefore regarded himself released from the contract.

The negotiations by the parties culminated in a letter of 23 August 2004 by Turner & Sons (Pvt) Ltd's erstwhile legal practitioners to Dobrock (Pvt) Ltd's legal practitioners which set out the history of their association.

In that letter, Turner & Sons (Pvt) Ltd indicated that it would seek an order to wind up the company in terms of section 206(g) of the Companies Act [Chapter 24:03].

Dobrock (Pvt) Ltd held the firm belief that it had purchased Turner & Sons shareholding and was therefore the sole shareholder in Zambezi Paddle Steamer (Pvt) Ltd.

These disagreements resulted in the two applications, for specific performance and liquidation, that are now before me.

The first issue for determination is whether or not a binding contract of sale was reached between Dobrock (Pvt) Ltd and Turner & Sons (Pvt) Ltd.

It is, I believe, common cause that an agreement of sale was entered into.

In its opposing affidavit, in paragraph 17, Turner & Sons (Pvt) Ltd acknowledges that the parties had a loose gentleman's agreement. Antony Turner concludes that paragraph by stating that "I believe, with respect, that the only explanation that is reasonable in the circumstances is that applicant repudiated the contract."

Paragraph 49(iii), in Case No. HC5264/05, by Turner & Sons (Pvt) Ltd, is to the same effect.

Turner & Sons (Pvt) Ltd's defence was, in the main, predicated on repudiation by conduct of the contract that was executed between the parties. Indeed, Mrs Wood, for Turner & Sons (Pvt) Ltd, in paragraph 2 of her written heads of argument, wrote:

"It is apparent from the applicant's own case that the agreement in question was very loose even if it was binding between the parties."

Counsel concentrated their submissions on the question whether time was of the essence in the performance by Dobrock (Pvt) Ltd of the term relating to payment of the outstanding purchase price.

It was on the assumption that it was of the essence that Turner & Sons (Pvt) Ltd alleged repudiation.

The onus, in my view, lies on Turner & Sons (Pvt) Ltd to show that time was of the essence and that the failure by Dobrock (Pvt) Ltd to act timeously entitled it to rescind the contract.

Turner & Sons (Pvt) Ltd blamed Dobrock (Pvt) Ltd for the delay in paying the balance of the purchase price.

The facts, as I find them, do not bear out the correctness of Turner & Sons (Pvt) Ltd's view.

Paul Turner indicated, in his unchallenged affidavit, that, the tax avoidance scheme was initiated at the instance of Antony Turner, and was for Turner & Sons (Pvt) Ltd's benefit.

My view is that, at that stage, Paul Turner was working as an agent of Turner & Sons. It became, in my finding, the duty of Turner & Sons to impress on him to act with speed if time was of the essence to it.

It is clear to me, that, Antony Turner understood and appreciated that the balance of the purchase price would not be paid out until the share transfer had been effected by Paul Turner; until Antony Turner had resigned as a director of Zambezi Paddle Steamer (Pvt) Ltd; and, until Antony Turner had obtained a capital gains clearance certificate from the Zimbabwe Revenue Authority (ZIMRA).

The delay cannot, therefore, be attributed to Dobrock (Pvt) Ltd.

Peter Jameson Dobson, after all, was desirous that transfer be effected with speed as shown by his enquiries of 4 August and 21 August 2004 which Antony Turner did not acknowledge.

Antony Turner never did challenge the averment, that, when they met at Borrowdale Race Course, he indicated that he was responsible for the delay for he was too busy to make a follow up with Paul Turner.

Paul Turner, after all, was acting, as regards the tax avoidance scheme only, as an agent of Antony Turner.

It is therefore my finding, on the papers, that, it was in fact Antony Turner who was responsible for the delay. He could not, therefore, lawfully repudiate the contract by projecting his own inaction onto Dobrock (Pvt) Ltd.

The defendant maintains that there has been a misjoinder or non-joinder, especially with relation to the insurance contract, in that the plaintiff has sued an agent instead of the principal.

The law of agency on the relationship between an agent and a principal on whose behalf the agent contracts is now settled. In The South African Law of Insurance, GORDON & GETZ 3rd ed, the authors state as follows:-

“A contract made by an agent, on behalf of his principal, with a third party, is regarded, in law, as having been made by the principal himself.”

In Taunton Enterprises (Pvt) Ltd & Anor 1996 (2) ZLR (H) 314, the court expressed the general rule as follows:-

“A person who acts as an agent and contracts with a third party in the name of the disclosed principal is not a party to the contract and is not personally liable in contract.”

See also Wood v Visser 1929 CPD 55 where the court qualified this statement and remarked thus -

“The general rule, undoubtedly, is that a person contracting with an agent can only sue the principal on that contract, but, in some cases, he can sue the agent, if, for example, he contracts with the agent as a principal, makes him his debtor and gives credit to him and not his principal, then he can sue the agent personally on such contract.”

A party who acts as an agent, and enters into a contract on behalf of a principal with a third party, does so on behalf of the principal. He does not become a party to the contact and no liability attaches to the agent. A party wishing to hold an agent accountable is required to show that he contracted with the agent as a principal. Where the contract benefits the principal only, the agent cannot be held accountable. An agent will only be denied the protection of this general rule where he has chosen, by his own conduct or form of the act or contract, to create personal liability or where personal liability is implied or created by operation of the law.

It is trite that a claim for non-payment of an insurance claim cannot be directed towards an agent. The defendant was not a party to the insurance contract but merely an agent.

The plaintiff's claim is based on the fact that the defendant failed to pay the plaintiff's premiums and lodge an insurance claim on its behalf.

This does not make this claim an insurance claim.

The plaintiff would have been required to join the insurance company only if the claim related to insurance pay-outs or if the omissions complained about were the insurer's responsibility. CBZ Insurance Company (CBZ) was not required to be cited as no insurance claim is being made against it. The plaintiff is simply saying, you caused me to fail to make a claim with the insurer because you neglected to pay my premiums and did not make an insurance claim on time resulting in me failing to claim for the damage caused to the crop. That, therefore, you must pay me for the loss the insurer would have met.

I am not satisfied that there has been a misjoinder or non-joinder of CBZ Insurance Company (CBZ). I have also considered that no remedy related to the insurance contract against CBZ Insurance Company (CBZ) is being sought. The issue is whether a cause of action has been established against the defendant rather than a question of a mis-joinder.

Even assuming that there was a misjoinder or non joinder, the Rules provide for such a scenario. In any case where there has been a mis-joinder, the court may, in terms of Rule 87, proceed and determine the merits of the matter between the parties before it. Rule 87 provides as follows:-

“Rule 87

(1) No cause or matter shall be defeated by reason of the misjoinder or non-joinder of any party and the court may, in any cause or matter, determine the issues or questions in dispute so far as they affect the rights and interests of the persons who are parties to the cause or matter.''

The effect of this Rule is that no proceedings shall be defeated because of a mis-joinder.

A court may still proceed and determine the issues that arose in so far as they affect the rights and interests of the parties present. Where, upon an inquiry into the merits of the matter, it is found that the party cited is not liable for the claim, the misjoinder may result in the dismissal of the claim.

See Rose v Arnold & Ors 1995 (2) ZLR 17 (H); Mawere & Ors v Minister of Mines & Mining Development HH87-14 for that proposition.

On 23 January 2015, after hearing counsel and having gone through papers filed of record, and the parties having failed to settle the matter on the basis of recent precedent, I gave an order dismissing the appeal with costs and indicated that reasons thereof will follow in due course.

I now proceed to set them down below.

The facts of this matter are common cause:

By correspondence dated 13 March 2007, the respondent made a ruling, that, the appellant was obliged to withhold and remit non–resident tax on fees paid to an entity known as Centachrome, an agent based in Switzerland.

Centachrome was appointed “sub-agent” in an agreement entered into by and between the appellant (“producer”), the Minerals Marketing Corporation of Zimbabwe (MMCZ) (“marketing agent”) and Centachrome.

Centachrome was supposed to facilitate the selling of ferrochrome produced by the appellant, but sold through the Minerals Marketing Corporation of Zimbabwe (MMCZ) in terms of the Minerals Marketing Corporation of Zimbabwe Act [Chapter 21:04] which requires that all minerals mined in Zimbabwe are marketed by and through the MMCZ.

On 11 May 2007, the appellant wrote to the respondent objecting to the ruling. By letter dated 15 November 2007, the respondent disallowed the objection but reduced the penalty to 60% from the initial 100% it had stipulated.

Aggrieved by the decision of the respondent, the appellant noted an appeal to this Court challenging the decision of the respondent on grounds that may be summarised as follows:

(a) The appointment of Centachrome had the effect of making it an agent of the Minerals Marketing Corporation of Zimbabwe (MMCZ) and not an agent of the appellant.

(b) The appellant was not obliged to pay withholding non–resident tax since the money paid to Centachrome was commission and commission is not fees as defined in terms of the 17th Schedule of the Income Tax Act [Chapter 23:06].

(c) The money paid to Centachrome was not derived from a source within Zimbabwe as stipulated by the 17th Schedule of the Income Tax Act [Chapter 23:06].

WHOSE AGENT WAS CENTACHROME?

While the preamble to the agreement creates the impression that Centachrome is the agent of the Minerals Marketing Corporation of Zimbabwe (MMCZ), the rest of the agreement, and the facts on the ground, clearly show that the appellant was the real principal for Centachrome.

The Minerals Marketing Corporation of Zimbabwe (MMCZ) only appears as principal to fulfil the requirements of the law on the sale of minerals - and nothing more.

The appellant is ultimately responsible for the payment of Centachrome's commission from the proceeds of its chrome; the Swiss firm places orders with both 'principals'; the investigations into chrome content are done by the appellant and Centachrome with the Minerals Marketing Corporation of Zimbabwe (MMCZ) approving any agreement reached, and, finally, in terms of the Process Flow Chart, the payment confirmation is sent directly to the appellant and only copied to MMCZ.

Both, in its heads of argument and in the presentation in court of its case, the appellant did not place much store on this argument, and, rightly so, in my view.

It is simply not sustainable.

The letter was written by the respondent's legal practitioners, on clients' instructions and on their behalf.

The respondents have not denied giving those instructions to their legal practitioners. The respondents' contention that it is their legal practitioners who wrote the letter and not the respondents themselves, and, hence, it is not binding on them is preposterous.

Who better than the respondent's own legal practitioners to have communicated the resignation?

It is their letter and the respondents own the contents therein. Where a legal practitioner tenders a resignation on behalf of his client and he communicates it, that resignation is binding on the client and becomes that of the client unless it has been shown that the legal practitioner acted without instructions.

An agent, by definition, is a party that acts on behalf of another and whose conduct binds the principal.

It is my view that it was not incumbent upon the executor or the Master of the High Court to consult the applicant personally when she had appointed an agent for that purpose. The agent's mandate was adequate for the consultations to be valid and binding. I am of the view that the agent acted within his mandate.

See Seniors Service (Pvt) Ltd v Nyoni 1986 (2) ZLR 293 (S).

Express authority exists in a situation where there is actual or express authority to do a thing. Implied authority is defined, in LEE and HONORE, The South African Law of Obligations, 2^nd ed…, as follows:

“Every agent, unless the contrary manifestly appears to be the intention of his principal, has implied authority to employ all lawful means necessary and usual for the execution of his express authority. An agent having authority to conduct a particular trade or business or undertaking, has authority to do every lawful thing necessary or usually incidental thereto.”

This type of authority stems from an agent's actual or express authority.

The third category is that of ostensible authority. This type of authority was defined in River Ranch Limited v Delta Corporation Limited HH01-10 as follows;

“In the language of the Law of Agency, apparent and ostensible authority is synonymous…,; and ostensible authority is sometimes said to be created by the principal holding out the agent as having authority…, although sometimes a distinction seems to be drawn between apparent authority (flowing from the capacity in which the agent is employed) and holding out (by particular words or actions)…,.”

In Monzali v Smith 1929 AD 345 the court stated as follows regarding ostensible authority;

“Where any person, by words or conduct, represents or permits it to be represented that another has authority to act on his behalf he is bound by the acts of such persons with respect to any dealing with him as an agent on the faith of any such representation, to the same extent as if such other person had authority which he so represented.”

See also Powerspeed Electrical Ltd v Enfield Zimbabwe HH107-13, where this court discussed the need to consider the conduct of the warring parties, especially that of the one challenging the contract, where there is evidence of continued association.

It follows that the letters under discussion were therefore competent as they were written by agents of the second respondent. The case of Gwafa v Small Enterprises Development Corporation & Anor 1999 (2) ZLR 261 (SC) reasoned that:

“The principles on which a seller can be bound by the ostensible authority of his agent have been set out in a number of cases which have come before this Court. In Stewart Zagreb Properties (Pvt) Ltd 1971 1 RLR 180 (RA) at 184C-F; 1971 (2) SA 346 (RA) at 349 F-H, BEADLE CJ said:

'The principles on which a seller or a principal can be bound by the ostensible authority of an agent have been set out recently by this Court in the case of Reed NO v Sager's Motors (Pvt) Ltd 1970 (1) SA 521 (RA). The headnote to that case, which accurately sets out the judgment, is as follows:

'If a principal employs a servant or agent in a certain capacity, and it is generally recognized that servants or agents employed in this capacity have authority to do certain acts, then any of those acts performed by such servant or agent will bind the principal because they are within the scope of his 'apparent' authority. The principal is bound even though he never expressly or impliedly authorized the servant or agent to do these acts, nor had he by any special act (other than the act of appointing him in his capacity) held the servant out as having this authority. The agent's authority flows from the fact that persons employed in the particular capacity in which he is employed normally have authority to do what he did. Whether an act is or is not within the scope of the apparent authority of an agent is essentially a question of fact.'”

On the reasoning in Gwafa v Small Enterprises Development Corporation & Anor 1999 (2) ZLR 261 (SC), the authors of the letters related to had the ostensible authority to write them on behalf of the second respondent....,.

For the appellant to succeed in proving estoppel, it has to prove, and the authority for this proposition is the case of Andrew Phillips (Pvt) Ltd v GDR Pneumatics (Pvt) Ltd 1986 (2) ZLR 65 (SC) 67, that the respondents or their officers made a representation in word or deed which might have reasonably misled the appellant; that the appellant was misled; and that the representation induced the appellant to act as it did.

This is an appeal from a judgment of the High Court in which it granted an application for an eviction order against the appellant on the basis that the respondent was the owner of the property known as Stand number 3182 of Subdivision A of 159 of Prospect, Harare. The appellant was found not to have a right of occupation.

The appellant had challenged the vindicatory action instituted by the respondent on the basis that she had a right of occupation derived from an agreement of sale of the property entered into between her and a company called Champion Constructors (Pvt) Ltd, duly represented by one of its directors and a shareholder, Ms Elizabeth Chidavaenzi.

After hearing argument from counsel for both parties, the appeal was dismissed. It was indicated then that reasons for the decision would follow in due course.

It was not in dispute that the respondent was the registered owner of Stand number 3182 of subdivision A of 159 of Prospect, Harare. The issue before the court a quo was whether there was a binding agreement of sale which gave the appellant the right of occupation.

The court a quo found against the appellant.

The question before this Court is whether the decision of the court a quo is correct on the evidence placed before it by the parties.

The facts of this case are as follows.

The respondent issued summons for the ejectment of the appellant from Stand number 3182 of Subdivision A of Stand 159 Prospect in Harare on 9 June 2008. In her plea, the appellant sought the dismissal of the claim on the basis that she was a legitimate possessor and occupier of the property. The contention was that the right, title and interest in the property was lawfully transferred to her by a declaratory order issued by the High Court in case No. HC7594A/06.

The appellant contended that she was in occupation of the property pursuant to an agreement of sale entered into between herself and a company called Champion Constructors (Pvt) Ltd. The appellant contended that, alternatively, the respondent was estopped from denying that Champion Constructors (Pvt) Ltd was the holder of rights, title and interest in the property and was entitled to dispose of the property as it did.

The respondent, through its managing director, Mrs Elizabeth Chidavaenzi, tendered various documentary exhibits in support of its position. She denied that Champion Constructors (Pvt) Ltd had ever been authorised to dispose of the property in the manner alleged or at all.

The appellant relied on her own testimony and on the evidence of two former workers of Fingold Real Estate, which had allegedly been mandated by Champion Constructors (Pvt) Ltd to dispose of the property to her.

The court a quo accepted that the respondent was the registered owner of the property in question on the basis of irrefutable evidence - the title deeds to the property. The court also accepted that Mrs Elizabeth Chidavaenzi was the managing director and controlling shareholder of the respondent. The evidence placed before the court a quo pertaining to the relationship between the respondent and Champion Constructors (Pvt) Ltd was that the respondent company had contracted Champion Constructors (Pvt) Ltd to service the land and develop residential houses on the subdivisions. The agreement between the parties was that Champion Constructors (Pvt) Ltd would be paid in kind for its services or in the form of completed houses which it would, in turn, sell to prospective home-owners in order to recoup its expenses.

Mrs Elizabeth Chidavaenzi told the court a quo that, in the past, the respondent had mandated Fingold Real Estate to sell two of its properties but it did not sanction the sale of the property in issue. She testified, further, that this is the reason why the agreement of sale was not signed by the seller. Her testimony was to the effect that the appellant was involved in a fraudulent sale which had been masterminded by John Chagaresango of Finhold Real Estate, a close relative of the appellant.

Ms Chidavaenzi said that the first time she became aware of the purported agreement of sale of 26 September 2006, between the appellant and Champion Constructors (Pvt) Ltd, was in November 2006 when lawyers for the appellant began pestering her with demands that she sign the document. She also told the court a quo that on the two occasions that she had mandated Fingold Real Estate to sell properties on the respondent's behalf, she had given them instructions in writing, which she denied doing in this case.

The appellant admitted before the court a quo that John Chagaresango of Fingold Real Estate was a close relation of hers, her elder sister's son. She testified that she signed the agreement of sale before John Chagaresango, Mr Phiri and Faith Muzungu on 26 September 2006. Thereafter, she paid Z$32,500,000= on 28 September 2006, 9 October 2006 and 3 November 2006. The appellant's evidence before the court a quo was that the terms of the agreement of sale were not fully explained to her. She admitted that Ms Chidavaenzi had never authorised her to make improvements to the property.

The court a quo found that, despite being a major shareholder in both the respondent and Champion Constructors (Pvt) Ltd, Ms Chidavaenzi was a “focused, confident and convincing” witness whose “evidence proclaimed loudly and boldly that there was no contract to talk about between Champion Constructors and the appellant.”

The court found, further, that, Fingold Real Estate could not possibly have been mandated to sell the property in question to the appellant by Champion Constructors (Pvt) Ltd or anyone else. The estate agent failed to produce proof of its mandate to sell that particular property.

On the effect of the High Court order relied upon by the appellant as bestowing or confirming that the appellant had acquired the rights, title and interest in the property, the court a quo found that the order was made in default and was against Champion Constructors (Pvt) Ltd and Elizabeth Chidavaenzi. The court's view was that the order was not binding on Drawing Services (Pvt) Ltd or enforceable against it, because, despite being the registered owner of the property, it had also not been cited as a party to the proceedings.

According to the appellant's testimony before the court a quo, John Chagaresango, who worked for Fingold Real Estate, advised her that the property in question was for sale. Accompanied by John Chagaresango, she went to view the property. The property was in the care of Champion Constructors (Pvt) Ltd, which, together with Drawing Services (Pvt) Ltd, the respondent, were under the directorship and shareholding of Elizabeth Chidavaenzi and Keroni Tevera (according to form CR14 produced before the court a quo).

Elizabeth Chidavaenzi testified that Keroni Tevera was a passive participant in the management of the affairs of Champion Constructors (Pvt) Ltd. According to the evidence before the court a quo, after the visit to the Stand, John Chagaresango contacted Elizabeth Chidavaenzi and advised her that the appellant wished to purchase the Stand. It would appear that, upon instruction, Fingold Real Estate drew up a draft agreement, in terms of which the seller, Champion Constructors (Pvt) Ltd, held itself out as being the holder of the rights, title and interest in the property, and as agreeing to sell to the purchaser, the appellant, its right, title and interest on some of the following conditions:

1. The purchase price of the property of Z$32,000,000= (thirty two million Zimbabwe dollars) plus 15% value added tax be paid.

2. A deposit of Z$21,000,000= (twenty one million Zimbabwe dollars) to be paid in full within 48 hours of signing the agreement of sale, failing which the seller shall be entitled to cancel the agreement without further notice.

3. A cash deposit was to be paid by Bank cash transfer to Champion Constructors (Pvt) Ltd.

Clause 8 of the document of sale provided that there would be no variation of the conditions of the agreement unless the variation was in writing and signed by the parties.

In Clause 14, the parties acknowledged that the written agreement between them would be the only agreement and that no other conditions, stipulations, warranties or guarantees would be valid unless included in the agreement.

The appellant signed the proposed agreement on 26 September 2006 before two witnesses. The respondent did not sign. Champion Constructors (Pvt) Ltd did not sign. Elizabeth Chidavaenzi alleges that the estate agents drafted the document without her knowledge and consent. The appellant paid the deposit before the respondent signed the agreement of sale.

Her first instalment was paid on 28 September 2006. It took her up to 3 November to pay the deposit in full, contrary to the provisions of clause 1 of the alleged agreement of sale which stipulated that the deposit must be paid in full within 48 hours of the date of the signature of the agreement. If the appellant signed the alleged agreement on 26 September, and assumed that the seller had done the same, the deposit ought to have been fully paid by 28 September 2006.

It is not in dispute that the appellant subsequently paid the purchase price in full to Champion Constructors (Pvt) Ltd. When she sought to take occupation she was prevented from doing so by the respondent. The appellant applied to the High Court seeking an order declaring that the document she signed on 26 September 2006 constituted a valid and binding agreement of sale between herself and Champion Constructors (Pvt) Ltd. On 19 September 2007, the High Court issued an order on the following terms:

1. The provisional order in case number HC7594A/06 be and is hereby confirmed on the following terms:

(a) That the agreement of sale between the applicant and the first respondent, signed on 26 September 2006, in respect of Stand 3182 of Subdivision A of 159 Prospect be and is hereby declared to be legally binding and enforceable against the first respondent.

Armed with the order, the appellant took occupation of the property against protestation by Elizabeth Chidavaenzi. On 9 June 2008 the respondent issued summons out of the High Court claiming, by vindicatory action, ejectment of the appellant from Stand 3182 of Subdivision A of Stand 159 of Prospect Harare. It alleged that it was the owner of the property in terms of Deed of Transfer DT5668/72.

The respondent alleged that the appellant had no right to occupy the property as she had not entered into an agreement of sale with the registered owner of the property. The respondent alleged that there was no privity of contract between the appellant and the respondent.

In resisting the action, the appellant raised three points:

1. She denied that the respondent was the owner of the property and argued that the right, title, and interest in the property had been lawfully transferred to her by virtue of the declaratory order issued in her favour by the High Court order of 19 September 2007.

2. The appellant alleged that she had a right of occupation to the property by virtue of the agreement of sale with Champion Constructors (Pvt) Ltd.

3. The appellant denied that there was no privity of contract between the respondent and Champion Constructors (Pvt) Ltd as they were both under the directorship of Ms Chidavaenzi, who, according to the appellant, knew about the agreement of sale.

After hearing the evidence of the parties relating to the issues, the court a quo found that the appellant was not a credible witness. The court was not assisted by the evidence of the witnesses called by the appellant to bolster her case. It found Evis Monica Mutodi to have given “a hopelessly confusing piece of evidence”, which, under cross examination, was not consistent with that of the appellant even on the purchase price.

The court found that the appellant said that the purchase price was pegged at $32,000,000= while Evis Monica Mutodi said the purchase price was $32,000,500=. While Evis Monica Mutodi told the court that she had discussed the clauses of the alleged agreement of sale with her, the alleged appellant denied this and testified that she only discussed the agreement of sale with John Chagaresango.

On the veracity of the evidence of John Chagaresango, the court found that he testified to being given a mandate by Elizabeth Chidavaenzi to sell certain of her properties, including what he constantly referred to as Stand 1382, which, in reality, was Stand 3182. The court found his evidence at variance with that of Evis Monica Mutodi when he said that Ms Chidavaenzi had visited the site prior to the appellant doing so. The court also found that when directed to clauses that the appellant had not complied with, all John Chagaresango could say was that the agreement was not based on what the appellant and the witnesses had signed, but other verbal assurances by Ms Chidavaenzi.

In contrast, the court found the evidence of Ms Chidavaenzi to be precise and to the point. It found that the evidence was consistent with her plea and summary of evidence; and, in her evidence-in-chief, and under cross-examination, she maintained the denial that she gave Fingold Real Estate, or anyone, a mandate to dispose of the property.

Having dismissed the defence by the appellant, the court granted the eviction order. It is against the order that the appeal was instituted on the following grounds:

1. The court misdirected itself in concluding that Elizabeth Chidavaenzi was a credible witness, yet her demeanour and the inconsistencies and improbabilities in her evidence justified a finding that she lacked credibility.

2. The Judge misdirected himself by relying on what he considered as not having been put to the plaintiff's witness in cross-examination, yet, those matters related to areas where the evidence of the witnesses was mutually destructive.

3. The court misdirected itself by failing to determine that Elizabeth Chidavaenzi represented both the plaintiff and Champion Constructors (Pvt) Ltd when she sold the property in dispute to the defendant.

4. The Judge misdirected himself in his conclusion that Evis Monica Mutodi's evidence was “hopelessly confusing.”

5. The court misdirected itself in accepting, without criticism, the evidence of Elizabeth Chidavaenzi to the effect that she did not mandate Fingold Real Estate to sell the property in dispute.

6. The court misdirected itself by coming to a contrary conclusion in respect of a fact which was issue estoppel.

7. The court misdirected itself by relying on principles applicable to a lessee to conclude that the defendant, a bona fide possessor, had no right of retention pending compensation for improvements.

8. The Judge misdirected himself by failing to consider that the right of retention arises by operation of law upon the defendant showing that she is a bona fide possessor, and not upon the defendant instituting proceedings to enforce the agreement of sale.

The question whether the respondent, Drawing Services (Private) Limited, was a party to the proposed agreement of sale with the appellant must be answered in the negative. This means that there was simply no privity of contract between the appellant and the respondent. The appellant purported to contract with Champion Constructors (Pvt) Limited - a separate legal entity from the respondent.

The appellant's submission that the matter before the court a quo was res judicata must be rejected for the same reason. The respondent was not a party to the proceedings in which the High Court issued a declaratory order that the appellant could enforce her agreement of sale with Champion Constructors (Pvt) Limited.

There was no agreement between the appellant and the respondent in this case as evidenced by the fact that the respondent did not sign the proposed agreement of sale. In fact, the respondent denies offering the property for sale to the appellant.

Clause 14 of the proposed agreement of sale signed by the appellant stipulated that the agreement between the parties would only be valid and binding if reduced to writing and signed by both parties. This is intrinsic evidence of the intention of the parties. There was no binding contract between the appellant and Champion Constructors (Pvt) Ltd. If there was to be an agreement of sale, as alleged by the appellant, it would have to be evidenced by production of a written document signed by both parties.

We are of the view that there was no misdirection on the part of the court a quo for the following reasons:

1. There was no contract of sale between the appellant and the respondent.

2. The registered owner of the property, the respondent, had a right to vindicate its property against a person in occupation without its authority.

3. The appellant could not claim a right of occupation against the respondent on the basis that she was granted the right by an agreement that it entered into with another company which was not acting as an agent of the respondent to enter into the agreement on its behalf.

4. The High Court order on which it was sought to found the right of occupation did not grant the appellant such a right. That order, if it is correct, declared the validity and bindingness of the agreement purportedly entered into between the appellant and a Champion Constructors (Pvt) Ltd. Unfortunately, the order granted has no legal force or effect in the sense in which the appellant interprets it. It purports to declare the validity and bindingness of a written agreement which was signed by both parties on 26 September 2006. In fact, no such agreement exists. The proposed agreement was never signed by both parties. Only the appellant signed it. No reliance can therefore be placed on that order of the High Court.

Counsel for the appellant, having noticed the difficulty the appellant's case was meeting on appeal, argued that the parties entered into an oral agreement.

With respect, this was never alleged before the court a quo when the parties actually gave evidence and it is not alleged as a ground of appeal. It is also contrary to the clear intention of the parties as expressed in the document signed by the appellant on 26 September 2006.

For instance, in clause 14, the document declares itself to contain all the conditions and representations by which the parties wish to be bound. It goes on to exclude anything else not contained therein which is not in writing and signed by the parties. It expressly denies force to oral evidence as proof of a valid contract of sale between the parties.

The appellant accordingly paid her cash deposit when there was no obligation on her to pay. Only one party had signed the document on the dates that she paid.

In light of the evidence that there was no agreement of sale between the appellant and the respondent, the fact that both companies are under the directorship of Elizabeth Chidavaenzi does not assist the appellant's case.

It was for these reasons that the appeal was dismissed with costs.