Rwatizha & 162 Ors v Luna Estates (Pvt) Ltd & Anor (HC 4717 of 2019; HH 261 of 2021) [2021] ZWHHC 261 (26 May 2021)

1 HH 261-21 HC 4717/19 SABINAH RWATIZHA and TITUS VENGESAI and BRIGHTON MAZITI and TENDAI MUNEDZI and JACOB MANYEMHESA and ASIMA CHEISA and LOVELY CHAGONDA and TATENDA CHAGONDA and EUPHIA MASOKA and GEORGE SILAS MAGAMBA and LONAH BANDA and NIGEL MUNYARADZI DANIEL JERE and CECILIA TINASHE SAMBO and ALLEN MAPURANGA and LETICIA MUTEDE and ENIMY MUTEDE and ROBERT PARAFINI and NYARAI MUCHECHETERE and KUDZANAI TEMBO and TAKURA VENGESA and TAWANDA DEREK NDUDZO and MANAI ANTONY and EDINAH KASEKE and EMELDAR GONDO and CHIPO MUSARA HH 261-21 HC 4717/19 and HENRY TENDENEDZAI and SHINGIAI RAY MANGO and TAPUWA MAGWERE and PETROS PATISANI and IAN MADUME and PRISCILLA SHUWISAI HANDIKATARE and VICTOR PAULINE MBAYO and MARSHALL TSEKE and TONGAI MAVUNDUSE and MERCY MUGWENI and MUSA PHIRI and SIMONDENI NCUBE And JOSHUA BIRI and URITA BIRI and ERNEST NYAMBO and OSWELL TAWINEYI and MUNYARADZI NYANGA and RICHMOND NYAHORE and RUTH NYAHORE and OPPAH MOYO and MOREBLESSINGS MUNOUYA and MACKENZIE EUGENE and NORMAN GWEZUVA and MUNYARADZI LAWRENCE TSUNGA and HH 261-21 HC 4717/19 MUCHIMBIDZIKE FATIMA and MUCHIMBIDZIKE STEWART and LOVEJOY MURAMBIWA and ERASMUS NYAMUSHONYONGORA and COLEEN MAFIKA and HENRY MUVANDIRI and ISAIAH CHINHENGO and NABOTH T. MAGWERE and ALVIN LOVEMORE MAGWERE and LOVEMORE MAGWERE and ALETTER MAGWERE and SHELLY ELIZABETH CHITSUNGO and JEREMIAH JANDA and MAXWELL NEKENDE CHITENDENI and CLIFFORD NKOMO and PRIVILEGE MUKWAIRA and FANUEL KANGONDO and KILLIAN Z MASUKUSA and MEMORY CHIPUNGU and WAYNE PAMIRE and ZACHEO PATISANI and FARAI NYABEZE and VIVIAN S. SITHOLE and EDINAH DAMBUDZO MASIYIWA and LIVISON TIZIRAI HH 261-21 HC 4717/19 and THEODORA MUTSAGO and LIYON CHIKOMO and LINDARAY TANYANYIWA and MARIMIROFA ADVANCE and LETWIN MARIMIROFA and LUNGISANI MAKHALIMA and FADZAI C. MAKHALIMA and FUNGAI FELISTAS GAMU and JOSEPHINE CHAMBALANGA and ELMON MANGENA and RUVIMBO PATRICIA NCUBE and JENIFER DHLIWAYO and PARADZAI MAZUVAMANA and SALLY ANN and SHUPAI MOSES NYAMBO and CHIKOMBINGO SEVERINO and VANESA E. SALIMU and ELISMORE TAVENGWA and NEWTON TAWANDA MURINGAGOMO and CALVIN CHINEKA and PRECIOUS MAKWINJA and SHAKEY MUNYUKI BARE and LEVISON PHIRI and JOSPHINE TIZORA and HH 261-21 HC 4717/19 MASHMELLON TINOTENDA MAZWI and JOYCE TINARWO and MAMBINGI MAKURIRA and GEORGE TINASHE SARE and NOMATTER NIKISI and CONSTANCE CHIMUKA and GODFREE MARIMBIRE and KUDIWA MAZANGO and ABBIGAIL CHARUKA and GARIKAI CHIKWEKWETE and JOE CHAKANYUKA and TICHAYANA MAKOTA and RUTENDO BLESSING MARIZA and MUNYARADI G. MUSWERAKUENDA and JULIET CHIBANDA and CHARLES CHIBANDA and ROPAFADZO MAPOSA and PESEVEARANCE MUZANYA and KENNETH MAKAZA and IREEN MUZAKA and NICODEMUS MUBVUMBA and JOSEPHAT MUBVUMBA and NGONIDZASHE MANIKA and ABIGIRL MANIKA and MANDIPE NGWADZAYI HH 261-21 HC 4717/19 and ESTHER MUTSENGI and ESTHER DLAMINI and DICKSON MAPFUTI and BETTY MAPFUTI and IAN N. MANDIHLARE and TANAKA CLIVE MUKAKA CHITIYO and ACKIM MAKINA and LLOYD DOMBODZVUKU and MARYGRACE VALERIA ZINGONI and ALBERT ZHANJE and DEBBIE MTANDABARE and HERBERT MUNEMO and JOYLINE MHASHO and MASON WHITE and JULIA WHITE and PATMORE MADA and ISRAEL CHARM SIZIBA AND STELLA CHIMBUMU and KUDZAI NEMACHA and TEDDY NYAJEKA and FAITH SHOKO and ROBERT MUCHECHETERE and AGATHA CHIKUKWA and NETSAI MATEWERE and HH 261-21 HC 4717/19 SYNTHIA KATONDO and MODESTA TUTURU and JACKQELINE MUTAMBARA and FREDRICK KASEKE and NOBERT MUSAKWA and CECILIA MUGARIRI and RONWELL CHITAMBIRA and STANFORD BUKUTA and PEARSON NGULUBE and MERCY MUGWENI and IAN MANYANDE and VIMBAI FAITH MBERI and MCDAVID OSLEM MBERI and JULIA MUCHEMWA and PRISCILLA MUGOBERA and LINDIWE MAKONI versus LUNA ESTATES (PRIVATE) LIMITED. and DEVINE AID TRUST COMPANY (PRIVATE) LIMITED HIGH COURT OF ZIMBABWE MANZUNZU J HARARE, 18 & 26 May 2021 Court Application P Kawonde, for the applicant G R J Sithole, for the 1st respondent HH 261-21 HC 4717/19 MANZUNZU J: This is a court application by 163 applicants seeking a declaratory order in the following terms: “IT IS ORDERED AS FOLLOWS: 1. 2. It is declared that the agreements of sale which were entered into between the applicants and the 1st respondent represented by the 2nd respondent be and are hereby held to be valid. The 1st respondent pays costs of this application on a legal practitioner and client scale.” The background to the matter is largely common cause. The first respondent is the registered owner of a piece of land in the district of Zvimba measuring 200.72 hectares (the property). In the year 2012 the first respondent and second respondent entered into a land development agreement for the second respondent to develop the property into residential and business stands. The second respondent was also given the mandate to sell the subdivided stands on behalf of first respondent. The applicants are some of the people who bought the stands from the first respondent through the second respondent. Agreements of sale were signed between the individual applicants and the second respondent as agent of the first respondent. The first and second respondents’ contractual relationship fell sour and they went for arbitration. An arbitration award confirmed, inter alia, the cancellation of the memorandum agreement for land development between the respondents as at 20 July 2017. Despite the termination of the land development agreement, the second respondent went ahead to sign some agreements of sale purportedly as agent of the first respondent with some 21 of these applicants. It is in respect to those 21 applicants that the first respondent has resisted the order prayed for. The first respondent concedes to the order being sought by the applicants save in respect to the 21 applicants who signed their agreements after the second respondent’s mandate was terminated on 20 July 2017. The 1st respondent claims the following 21 applicants have no cause of action against it, 13th, 19th, 20th, 24th, 25th, 43rd, 44th, 57th, 58th, 70th, 99th, 101th, 102th, 103th, 112th, 113th, 114th, 123rd, 130th, 15,2nd and 160th. The 21 applicants have maintained that the first respondent was bound by the agreements they signed with the second respondent on the basis of ostensible authority. The first respondent argues that ostensible authority cannot be sustained in the face of fraudulent acts by the second respondent. HH 261-21 HC 4717/19 Two issues came out for determination; whether the first respondent can be held liable on the basis of ostensible authority and secondly, whether applicants in the event of success should be awarded costs at legal practitioner and client scale. OSTENSIBLE AUTHORITY Several authorities have defined and considered when ostensible authority is said to exist. In Reed NO v Sager’s Motors (Pvt) Ltd 1969 (2) RLR 519 (A) BEADLE CJ stated that: “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 this capacity) held the servant or agent 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.” In casu, the second respondent as an agent was expressly authorized to enter into agreements with prospective buyers of stands on behalf of first respondent. That is the situation obtained from 2012 to 20 July 2017 when the land development agreement was terminated. The issue of termination was not published to the world at large. It was known between first and second respondents. The question is how were the 21 applicants expected to know that first respondent had terminated its authority with the second respondent? The second respondent continued to use the first respondent’s standard agreement after 20 July 2017 as if it were expressly authorized to do so. The first respondent’s defence is that the second respondent was committing a fraud hence the applicants cannot rely on ostensible authority. This is despite the first respondent’s admission that the public were not warned that second respondent was no longer its agent. The first respondent had a duty to warn members of the public about the severance of its relationship with the second respondent. I do not think this is a matter where first respondent can successfully wash its hands like Pontius Pilate in the face of its failure to give notice to the public and hide behind a claim for fraud to the prejudice of the applicants. There was nothing to stop the 21 applicants from believing that the second respondent was still acting within the scope of its authority with the first respondent which authority was, for a considerable period of time, so exercised. In alleging fraud the first respondent relied on the findings of the arbitration. In fact, instead of being specific, the issue was argued in a generalized form. The court was referred to the entire arbitration award ranging from page 1054 to 1088 of the record. There was no HH 261-21 HC 4717/19 evidence to show that the money received from the 21 applicants was not handed over to the first respondent. The issue of fraud was not proved on a balance of probabilities. The first respondent should have realized that the acts by second respondent after 20 July 2017 would bind it unless the public were warned. This is a matter where ostensible authority must be upheld. COSTS Applicants asked for costs at legal practitioner and client scale. Costs are at the court’s discretion. The first respondent asked that each party must pay its own costs. Ordinarily costs follow the cause. There was no justification for each party to bear its own costs at the expense of a winning party. Costs were asked at a higher scale because of 1st respondent’s attitude. The history of this matter shows that this application is not the first of its own kind. In HC 6816/18 an application by 140 applicants against the respondents seeking a similar declaratory order was granted by this court on 3 December 2018. The first respondent filed an appeal with the Supreme court but the order of this court was confirmed. The applicants through their lawyers had on 6 December 2018 written to the respondents’ lawyers to accept their agreements as valid more so in light of the order of this court of 3 December 2018. The response of 12 December 2018 by the respondents, to say the least, was arrogant coupled with a threat to invoke penalty clauses in the agreements for these applicants and those in HC 6816/18. At the time the first respondent did not differentiate the applicants according to when they signed the agreements. Despite this matter being capable of amicable resolution between the parties, the first respondent’s attitude made it impossible to take that route hence the parties found themselves embroiled in this litigation with a bulky record running into 1174 pages. The first respondent has not shown to have any valid defence to the application from the beginning apart from its arm twist approach. The opposing affidavit also bears testimony to this in paragraph 7:1 when it states; “This is an application that ought not to have been made at all. I content that there is absolutely no legal disputes between the applicants and the 1st respondent.” One may then pause to ask as to why applicants proceeded with litigation. The answer in my view is simple, ‘because of the first respondent’s big brother attitude.’ The first respondent wanted to use its upper hand position in the agreement to coerce the applicants to resile from their existing agreements and create new agreements with new terms to its advantage. HH 261-21 HC 4717/19 Courts will ordinarily not grant punitive costs unless it is shown that the losing litigant was not genuine in pursuing litigation. See Mahembe v Matambo 2003 (1) ZLR 149 (H). In Chizura v Chiweshe HB 80/03 the court had this to say; “In awarding costs at a higher scale the losing litigant’s attitude in the proceedings is an essential ingredient which should be taken into account as it impacts negatively in the expenses of the litigant – see Mahomed & Son v Mahomed 1959 (2) SA 688.” This is a proper case where a successful party was unnecessarily put out of pocket by this litigation. It is just and proper that the losing party must compensate. Disposition: IT IS ORDERED THAT: 1. It is declared that the agreements of sale which were entered into between the applicants and the 1st respondent represented by the 2nd respondent be and are hereby held to be valid. 2. The 1st respondent pays costs of this application on a legal practitioner and client scale. Kawonde Legal Services, applicants’ legal practitioners Muza and Nyapadi, 1st respondent’s legal practitioners