Constantino Maguta versus Wheeler Dealer Car Sales (Private) Limited

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CONSTANTINO MAGUTA
versus
WHEELER DEALER CAR SALES (PRIVATE) LIMITED

HIGH COURT OF ZIMBABWE
PATEL J

Civil Trial

HARARE, 27 September 2011 and 26 January 2012

T. Tandi, for the plaintiff
B. Dhlakama, for the defendant



       PATEL J:    The plaintiff herein seeks the cancellation of an

agreement between the parties for the sale of a motor vehicle and

damages for breach of contract in the sum of US$6,500. The principal

issues for determination are whether the defendant represented that it

was the owner of the motor vehicle and whether it breached the contract

of sale by not guaranteeing vacant possession of the vehicle to the

plaintiff.


The Evidence

       Constantino Maguta, the plaintiff, testified as follows. He knew the

defendant firm as a seller of motor vehicles, both on its own account and

on behalf of third parties. He had previously purchased a Toyota Corona

from the defendant as its owner. On 17 July 2010, he went to the

defendant’s premises in Msasa and purchased a Nissan Double Cab for

US$6,000. As is reflected on the written agreements of sale, he paid a

deposit of US$5,000 on the same day and the balance of US$1,000 on 22

July 2010. He dealt with the owner of the defendant company, Emanuel

Kawenya, and inferred from his conduct that the vehicle was owned by
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the defendant. He was not told that it belonged to any third party or

shown any permission to sell it, nor was he shown the standard

conditions of sale referred to in the agreements of sale. On 22 July 2010,

he collected the vehicle and its keys and registration book from Kawenya.

The registered owner in the book is shown as an unrelated third party.

However, this did not concern the plaintiff as it was not unusual for

ownership of a vehicle to change hands without the registration details

being altered. Moreover, the book itself contains a warning that the book

is not proof of legal ownership. The plaintiff then arranged for the vehicle

to be towed away at a cost of US$50. Subsequently, on 14 October 2010,

he paid US$450 for having the vehicle engine overhauled by a repair firm.

Later that month, he was visited by the police who said that it was a

stolen vehicle and took it away to Southerton Police Station. He then

asked Kawenya for a refund and was told that the money had been given

to two individuals who had brought the vehicle to the defendant. These

two, Tendai Nyamajiwa and Rumbidzai Mapeture, were later charged

with theft of the vehicle from its owner, Loveness Chinomona. Nyamajiwa

was convicted but Mapeture absconded. In the criminal proceedings,

Kawenya gave evidence as a State witness. According to the State

Outline, Nyamajiwa and Mapeture sold the vehicle to the defendant for

US$6,000. Again, as summarised in the State’s closing submissions,

Kawenya himself testified that he agreed to purchase the vehicle from

Mapeture after being persuaded to do so by Nyamajiwa, who was a

fellow church member as well as being a friend.

      Emanuel Kawenya is the Managing Director of the defendant

company. His evidence was that the defendant does not purchase motor

vehicles on its own account but only sells them on commission on behalf

of third parties. The vehicle in question was sold to the plaintiff on behalf
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of Mapeture and the plaintiff was fully aware of that position. On the date

of the sale, he ascertained by telephoning the Central Vehicle Registry

that the vehicle was not a stolen one. However, he accepted that this was

not standard procedure. He produced a permission to sell, dated 17 July

2010, which was signed by Mapeture and which authorised the

defendant to sell the vehicle at a commission of 5%. Mapeture received

US$5,000 from the plaintiff himself on the same day and the balance of

US$1,000 paid by the plaintiff was collected by Nyamajiwa on 26 July

2010. The witness also produced the defendant’s standard conditions of

sale, paragraph 3 of which disclaims liability for any defect in title. This

document was posted on the wall in the defendant’s reception area. He

could not recall whether it was specifically brought to the plaintiff’s

attention. He confirmed having testified at Nyamajiwa’s criminal trial but

denied having made the statements attributed to him in the State’s

closing submissions. He also disputed the correctness of the trial

Magistrates’ notes which record one Detective Ruzvidzo’s evidence to the

effect that Kawenya confirmed having bought the vehicle from the

accused’s accomplice. His own evidence is recorded as showing, though

not very clearly, that the vehicle was sold on behalf of Mapeture.

      Under cross-examination, he was unable to explain the admission

in paragraph 1 of the defendant’s Summary of Evidence that the

defendant was in the business of selling vehicles which belong to it and

also to third parties. When re-examined, he confirmed this contradiction

with his evidence-in-chief. Again, he could not explain why the payment

of US$5,000 by the plaintiff directly to Mapeture was not mentioned in

the defendant’s pleadings or why the conditions of sale document was

not listed in the defendant’s Discovery Schedule, even though these were

material aspects of its defence. Furthermore, he stated that he received
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the sum of US$300 as 5% commission from Mapeture, but was unable to

produce any receipt for that amount. He also conceded that the

agreements of sale in casu show that he signed them as the seller,

without any reference to any sale on behalf of a third party.

      My overall assessment of the plaintiff’s evidence is that it was

consistent and substantially in accord with his pleadings. His version of

what transpired is plausible and generally credible. In contrast,

Kawenya’s evidence was riddled with material contradictions and multiple

inconsistencies as between his testimony and the defendant’s pleadings

and the record of proceedings in Nyamajiwa’s criminal trial. It is difficult

to accept the submission that he acted in good faith at all times and was

simply a victim of criminal conduct perpetrated by Nyamajiwa and

Mapeture. The more likely scenario is that he was not entirely truthful

when he was interrogated by the police and made conflicting statements

at different times in order to suit the circumstances. In short, the

discrepancies in Kawenya’s evidence as the defendant’s only witness do

not favour the defendant’s case.


Representations as to Ownership of Vehicle

      The written agreement between the parties, as embodied in two

separate documents, is signed on behalf of the defendant as the seller

and by the plaintiff as the purchaser. There is no indication whatsoever

that the defendant was acting as an agent representing some other

party. In effect, the defendant represented itself as the owner of the

vehicle sold to the plaintiff. According to the parol evidence rule, a

contract that has been reduced to writing is regarded as the exclusive

memorial of the transaction in question. Consequently, save for certain

limited exceptions, no extrinsic evidence may be adduced to prove the
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terms of the document or to contradict, alter or add to its contents. See

Union Government v Vianini Ferro-Concrete Pipes (Pty) Ltd 1941 AD 43 at 47.

In the instant case, in the absence of any special circumstances, the

permission to sell produced by the defendant, even if it was genuine, falls

into the category of inadmissible parol evidence.

      Additionally, the evidence shows that Kawenya made various

representations as to the vehicle’s mechanical defects, as if the defendant

were its true owner. More significantly, the plaintiff’s evidence, which is

more credible in this regard, was that the defendant did not at any stage

disclose that it was acting on behalf of a third party. As a rule, where an

agent fails to disclose his principal, the other party is entitled to sue

either the agent with whom he contracted or the actual principal. See

Natal Trading and Milling Co Ltd v Inglis 1925 TPD 724 at 727. Moreover,

the agent, as the apparent or ostensible party to the contract, is

estopped from denying his liability by reason of his conduct inducing the

other party to believe that he was really the principal. See O’Leary &

Another v Harbord (1888) 5 HCG 1 at 11, cited in Kerr: The Law of Agency

(1972) at p. 188. In the present matter, there is no evidence to the effect

that the plaintiff was actually shown Mapeture’s permission to sell. If the

defendant had produced it before the transaction was concluded, the

plaintiff would probably have approached Mapeture directly in order to

negotiate a lower purchase price. As for Kawenya’s evidence that the

plaintiff himself paid the initial US$5,000 to Mapeture, this appears to be

a belated fabrication in light of its absence from the defendant’s

pleadings and the evidence at Nyamajiwa’s criminal trial.

      Having regard to all of the foregoing, I am satisfied on a balance of

probabilities that the plaintiff has discharged the onus of establishing
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that the defendant, through Kawenya, represented to the plaintiff that it

was the owner of the vehicle in question.


Breach of Contract

       Before addressing this aspect of this case, it is necessary to deal

with the conditions of sale referred to in the contract of sale and

allegedly posted on the wall of the defendant’s reception area. The

plaintiff categorically denied having seen this document and there was

nothing in the defendant’s evidence to controvert this denial. Indeed,

Kawenya could not recall whether it had specifically been brought to the

plaintiff’s attention. It must therefore be accepted that the plaintiff had

no notice of the document, nor did he acknowledge its contents by

signing it. It follows that the disclaimer from liability for any defect in title,

as stipulated in paragraph 3 of the document, is not binding on the

plaintiff and does not avail the defendant. See, with respect to disclaimer

clauses and their validity and legal effect generally, Mudukuti v FCM

Motors (Pvt) Ltd 2007 (1) ZLR 183 (H) at 188-191.

       A fundamental premise of every contract of sale is that the

purchaser should acquire ownership and/or peaceful and undisturbed

possession of the thing sold, free of all encumbrances and the superior

rights of other parties. In effect, the seller owes an implied duty to

warrant or guarantee such ownership or possession and, if he fails to do

so, he will be held to have breached the contract. See Hackwill:

Mackeurtan’s Sale of Goods in South Africa (5th ed.) at p. 164. This would be

the position even where the purchaser voluntarily surrenders possession

of the merx to a third party, provided he does so in circumstances where

he cannot successfully contest the grounds upon which that party claims

it. See Garden City Motors (Pty) Ltd v Bank of OFS Ltd 1983 (2) SA 104 (N) at
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107, followed in Kanokanga v Evans & Others 2000 (2) ZLR 41 (H) at 48 &

50.

       On the facts herein, the defendant clearly owed an implied duty to

warrant ownership and undisturbed possession of the vehicle that it sold

to the plaintiff. The plaintiff was then dispossessed of the vehicle by the

police who seized it as a stolen vehicle, in accordance with their

investigative duties and their legally unassailable powers of seizure. The

defendant did not intervene to prevent this seizure, and the plaintiff was

left with no option but to surrender the vehicle to the police. In the event,

the defendant failed to guarantee unencumbered ownership and

undisturbed possession of the vehicle, and thereby breached the contract

of sale.


Damages for Breach

       It is trite law that the purchaser under a contract of sale is entitled

to claim damages for breach of contract, which are to be assessed at the

time of the breach, the time of performance or the time of cancellation.

See Visser & Potgieter: Law of Damages, at pp. 76-77, cited in Munhuwa v

Mhukahuru Bus Services (Pvt) Ltd 1994 (2) ZLR 382 (H) at 388. Such

damages include the full purchase price paid for the merx as well as

ancillary wasted costs and expenses foreseen by the parties or incurred

as a direct result of the breach. See Hackwill, op. cit., at pp.176-177.

       At the time of the defendant’s breach in casu, the plaintiff had paid

US$6,000 as the purchase price of the vehicle. He had also incurred

further expenses, which were within the contemplation of the parties, in

the amount of US$500 by way of towage charges and repair costs. There

can be no doubt that he is entitled to the full amount that he claims

pursuant to the defendant’s breach of contract.
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Disposition

      In the result, judgment is granted in favour of the plaintiff as

against the defendant in terms of the Summons. It is ordered that:

   1. The agreement of sale concluded between the parties in July 2010

      be and is hereby cancelled.

   2. The defendant shall pay to the plaintiff the sum of US$6,500

      together with interest thereon at the prescribed rate, reckoned

      from the 2nd of December 2010 to the date of payment in full, and

      the costs of suit.




Kantor & Immerman, plaintiff’s legal practitioners
B. Dhlakama Attorneys, defendant’s legal practitioners