Daphine Nyandoro v Deep Horizon Real Estate Agents and Voster Sawaya

### Preamble
1
HH 461-18
HC 1466/15
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DAPHINE NYANDORO

versus

DEEP HORIZON REAL ESTATE AGENTS

and

VOSTER SAWAYA

HIGH COURT OF ZIMBABWE

CHITAKUNYE J

HARARE, 22, 23 January 2018 & 8 August, 2018

Civil Trial

N Chikowore, for the plaintiff

H P Ingabire, for the 1st and 2nd defendants

CHITAKUNYE J. On the 18th February 2015 the plaintiff sued the defendants, jointly and severally, the one paying the other to be absolved for:

Payment in the sum of US$11 000.00;

Interest on the sum of US$ 11 000.00 at the prescribed rate from the date of service of summons to date of payment in full; and

Costs of suit.

The defendants denied liability in toto. The facts leading to this matter were as follows:

On 31st October 2012 the first defendant was given a mandate to sell an immovable property namely Stand  11499 Glen View Township measuring 442 sq metres also known as No. 11499 Glen View 7, Harare by a person purporting to be Mary Fungai Pisira. The first defendant duly advertised the property in the Herald Newspaper. The second defendant, who had previously been approached by plaintiff seeking an immovable property to buy, duly contacted the plaintiff and advised her on the Glen View property. The plaintiff upon viewing the stand expressed interest in the stand.

The plaintiff alleged that at all material times the second defendant was acting during the course and scope of his employment with first defendant.

In accordance with second defendant’s instructions plaintiff paid the agreed purchase price of US$11 000.00 into the first defendant’s trust account on the morning of 8th  November 2012 before signing the written agreement of sale in the afternoon of that same day.

The agreement of sale was concluded and payment of the purchase price into first defendant’s account made without the purported seller and the buyer meeting.

On about 20 November 2012 plaintiff met the purported seller at first defendant’s offices whereat she was given the documents that had been outstanding pertaining to the property.

In the meantime on 12th November 2012 plaintiff had, at the request of second defendant, written a letter authorising the first defendant to release the purchase price upon the seller providing the outstanding documents.

Thus when the seller provided the outstanding documents on the 20th November, the defendants paid over the purchase price.

When the plaintiff tried to make improvements to the property she was accosted by persons who claimed to be children of the owner of the property. Plaintiff was advised that the owner of the stand had died in December 2004.

In the wake of this, the plaintiff issued out summons against the seller Mary Fungai  Pisira seeking specific performance only to be met by information from the legal practitioner of the estate late Mary Fungai Pisira to the effect that the said Mary Fungai Pisira died in 2004 and so she could not have sold the property in 2012. The plaintiff reverted to the defendants with the information but defendants could not refund her the purchase price she had paid. It was then that she instituted the present action alleging that she has suffered damages in the sum of US$11 000.00 as a result of the second defendant’s negligence. She alleged that second defendant was acting within the course and scope of his employment with first defendant hence first defendant was vicariously liable for the negligence of second defendant.

The particulars of negligent alleged against the second defendant were that:

He did not at the critical time take steps to verify or ensure the true identity of the seller; or

He did not take the necessary steps to verify if there was consent from the Harare City Council regarding the sale of stand 11499 Glen View Township; and or

He released the purchase funds to the purported seller before verifying authenticity of the seller’s identity documents as well as right, title and interest in stand 11499 Glenview Township.

The defendants on the other hand denied that second defendant was negligent in anyway. In their plea they contended that plaintiff insisted on meeting the seller before payment was made and they facilitated this. It was upon being satisfied after meeting the seller that the plaintiff signed the agreement of sale at the same time with the seller and subsequently payment was made. The payment was thereafter released to the seller on plaintiff’s instructions. Thereafter plaintiff was given vacant possession coupled with original lease agreement from the Harare City Council, the seller’s affidavit duly commissioned empowering her to change ownership upon complying with the terms and conditions contained in the original council lease and the seller’s copy of National identity Document, the original of which she insisted on before authorising defendants to release the purchase price to the seller. In a nutshell the defendants were denying liability for what became of the agreement of sale as they had done their part satisfactorily including verifying the aspects alluded to by plaintiff.

The issues for determination were as follows:

Whether or not 2nd defendant was negligent?  if yes, whether Plaintiff suffered damages in the sum of US$11 000.00 as a result of the negligence

Whether or not 1st defendant is vicariously liable for the 2nd defendant’s negligence

Whether or not 1st defendant released funds to the purported seller without Plaintiff’s authorisation? If yes, whether 1st defendant is liable, and the extent of its liability.

The plaintiff gave evidence and called one witness. The defendants thereafter gave evidence through second defendant.

The plaintiff’s evidence was to the effect that in October 2012 she was in search of an immovable property to buy. She was referred to second defendant by a cousin. Upon meeting the second defendant at first defendant’s premises she advised him of her search for an immovable property and her price range. Later second defendant contacted her advising her of a stand in Marlborough. That did not however materialise as the seller wanted a sum she could not afford. Later the second defendant contacted her and informed her about the property now in issue being stand 11499 Glen View 7 Harare. She went and viewed that stand after which she advised the second defendant of her interest in the Stand. Upon negotiating a purchase price of US$ 11 000 was agreed between plaintiff and second defendant.

The second defendant went on to draw the agreement of sale tendered as exhibit 2. She was then asked to transfer the purchase price into first defendant’s Trust account and this she did on the morning of 8 November 2012. In the afternoon of the same date she took the proof of the transfer to second defendant who then asked her to append her signature to the agreement of sale which he had prepared. That agreement showed the seller as Mary Fungai Pisira. When she inquired about the absence of the seller she was told by second defendant that the seller had gone to her rural home to attend a funeral of her child. The plaintiff thus paid the purchase price and signed the agreement of sale without having met the seller. She however noted a signature on the seller’s portion. All negotiations were between plaintiff and second defendant, as agent of the seller.

After the signing of the agreement of sale she was given a copy of that agreement of sale and a copy of the agreement of sale between Mary Fungai Pisira and the City of Harare. She was advised that as the property was for cession, she would only be able to change ownership after erecting a structure.

On 12th November 2012 she authorised, in writing, the release of the purchase price by the first defendant to the seller, subject to the seller having surrendered to the first defendant all remaining documents in respect of the property in question. The plaintiff said that she gave such authorisation despite not having met the seller because second defendant had assured her that once she had received those documents in her possession, there was no possibility of the sale falling through, or a risk of financial loss. She thus believed second defendant’s assurance and authored the letter for the release of the money to the seller. She also had faith in the defendants as she believed they were trustworthy and professional.

It was her evidence that she was later called by second defendant to collect the remaining documents on about 20th November 2012. That was the only day she met the alleged seller.

Plaintiff further testified that upon receipt of all the documents including the alleged original agreement between the seller and the City of Harare, the agreement of sale between herself and the seller, a copy of the seller’s identity document, a power of attorney, and an affidavit, she took possession of Stand 11499. She thereafter began mobilising financial resources to enable her to put up a structure as required before she could take cession. After about a year her possession was disturbed when some persons who claimed to be children of Mary Fungai Pisira, contacted her and advised her that the owner of the Stand Mary Fungai Pisira died in 2004 and so could not have sold the property to her in 2012. Upon informing second defendant, he could not believe it and insisted that he had been to City of Harare and had verified the ownership of that stand.

Upon seeking legal advice plaintiff said she initially issued summons against the seller Mary Fungai Pisira. In response to the summons plaintiff’s legal practitioners received correspondence from Hove and Associates, advising that they acted for the estate late Mary Fungai Pisira, the true owner of Stand 11499 Glen View 7, and that she had died in December 2004. Included in the correspondence was a copy of the late Mary Fungai Pisira’s death certificate confirming that she had died on the 7th December 2004. It was thus evident that the late owner could not have sold the property to plaintiff in 2012. That is when it dawned upon her that she had been defrauded by an imposter purporting to be the owner of the stand.

It was then that plaintiff sued the defendants as she realised she had been sold a stand by an imposter of which if the second defendant had carried out appropriate verification he could have found out that the person who gave them the mandate to sell purporting to be the owner of stand 11499 Glen View 7 was in fact not the owner.

Under cross examination plaintiff confirmed that she had in fact had had the plan for the building structure at Stand 11499 redrawn to suit her needs. The plan had remained in the name of Mary Fungal Pisira. The approval of the plan did not demand that such plan be presented by the owner. All that was required was that the plan be in the name of the owner.

The plaintiff’s second witness was Mr. Munyaradzi Pindura, who is employed by the Harare City Council as a housing manager at the housing head office. His evidence was to the effect that he has been employed in the housing department since 2000. His responsibilities included processing of change of ownership of immovable properties through cession and also change of title from City of Harare to owners. He also supervises housing management clerks who are in the employ of Harare City Council.

Mr Pindura testified on the processes involved in the sale of Council owned properties. It was his evidence that where parties wish to sell each other such Council owned properties, both the seller and the prospective purchaser, or their representatives, are required to attend at the Harare City Council (HCC) District Office in the district the property is located, with their identification particulars.  The property file relating to the property in question is then inspected and a physical attendance is made at the property site. Thereafter parties attend at the HCC Housing Head Office where the housing management clerk once again verifies the seller’s identity and inspects the property’s file at head office. Once these checks are complete, an application for cession is then made, and a cession fee of US$230.00 is paid. The application for cession is then forwarded to the Housing Director for his approval.

Mr Pindura testified that in this case, the above procedure was not done. Had such a process been done the sale of the stand in question in 2012 would have been stopped in its tracks as HCC had, at the material time, information on file to the effect that the true owner of the property was deceased. To buttress this fact he tendered a letter dated 20 October 2010 from Hove and Associates to HCC advising that the estate of Mary Fungai Pisira had been wound up and requesting Stand 11499 Glenview 7 to be registered in favour of the estate’s beneficiaries (exhibit 6). This correspondence was received by HCC on 21 April 2010 and was thus on file at the time of the sale in question.

In answer to an assertion under cross examination that second defendant had approached the Glen View 7 district office who had given a clean bill on the property in question, apparently without consulting head office, Mr. Pindura was emphatic that the district office at Glen view would not have given the property a clean bill before consulting head office as each property has a file at district office and another file at head office. The district office file would not be complete on its own as some correspondence is directed to head office such as relate to cessions as these are done by head office. He maintained that the normal process is that where cession is involved a check at district office should be followed by a check at head office to ensure that the property is free of any encumbrance. It was his evidence that as a sale by cession involved potential financial risk the district officer would not have communicated information relating to the file for sale by cession purposes, without first seeking and obtaining written communication from the housing head office.

The defendant’s counsel also submitted that this witness had no authority to represent HCC in this matter as there was no resolution from the Council authorising him to represent the Council. In that vein he contended that the witness’ evidence was inadmissible. It is my view that this submission was misplaced. Mr. Pindura clearly indicated that the plaintiff wrote a letter to Council seeking an officer from Council to testify in relation to processes involved in sales of Council property. Mr. Pindura was availed by Council as a witness called by plaintiff to give evidence on specific issues within his knowledge. As council was not a party to these proceedings he did not need Council resolution to represent Council. He testified as a housing manager reposed with knowledge on the procedures involved in sales of properties owned by council. He testified as plaintiff’s witness. I am of the view that his evidence is admissible.

The second defendant thereafter gave evidence for the two defendants. He confirmed that he is employed by first defendant as a manager and it is in that capacity that he dealt with the plaintiff. He testified that upon receiving a mandate to sell from the seller he contacted the plaintiff. He negotiated the purchase price and prepared the agreement of sale. He confirmed that the seller and purchaser signed the agreement of sale on separate dates and this was before they had met in person. He also confirmed plaintiff’s evidence that she transferred the purchase price into first defendant trust account before signing the agreement of sale.

This witness’ evidence on events leading to the sale of the property did not differ materially from plaintiff’s evidence. He also confirmed that plaintiff authored a letter authorising the release of the purchase price to the seller, on condition that the seller surrendered to first defendant all the required documents for cession as per his advise that with such documents cession would go through.

It is however pertinent note that second defendant’s evidence differed materially from the defendants’ plea on some vital aspects.

Whilst in his evidence he confirmed that plaintiff transferred the purchase price before signing the agreement of sale and that he signed the agreement of sale before meeting the seller this was not the same as their plea. In their plea defendants stated, inter alia, that:-

“.. Plaintiff insisted to be introduced to the seller before payment was made. Defendants 	introduced Plaintiff to the Seller who had given mandate to sell to defendants. Upon 	satisfaction, plaintiff signed an agreement of sale at the same time with the seller and 	subsequently payment was made, which payment was released by defendants upon Plaintiff’s 	approval.”

It is clear that the sequence of events in the plea is the opposite of what actually happened as noted above. When asked to explain the contradiction in the plea and his evidence in court the second defendant had no plausible explanation to offer. Clearly the sequence of events in the plea was intended to sanitise a process defendants knew had not gone on well. Unfortunately in his testimony second defendant found himself contradicting that sequence of events for reasons he could not proffer. It may have been a situation of unwittingly telling the truth which was then not easy to take back.

As regards the processes that are undertaken in a sale of a property owned by HCC, the second defendant testified that upon receiving the mandate he duly attended at HCC Glen view District office to verify on the availability of the property for cession and ownership thereof. At the district office he was advised that ownership of that property can only be changed after the construction of a structure. Second defendant maintained that he did all the necessary checks to verify the owner and availability of the property. He refuted the assertion by Mr. Pindura that there was a requirement to also check with HCC housing head office before parties concluded an agreement of sale in respect of council owned properties. As far as he was concerned parties were only required to attend at the district office. Once that office gave a green light parties could proceed with the sale transaction. He said that attendance at HCC Housing head office would be at a later stage to have the cession approved.

Both second defendant and Mr. Pindura were agreed that parties had to attend at head office for approval of cession but they disagreed as to when such attendance had to be done.

From the evidence adduced it is common cause that second defendant was required to take certain verification processes upon being mandated to sell council owned property. The processes were necessary so that defendants do not find themselves selling properties that are encumbered or are simply not available. Such processes are also necessary because defendant, as estate agents, will be interfacing with purchasers who would need to be assured that the property they wish to buy is available. It is in this regard that the plaintiff placed her trust in the defendant’s professional diligence. The defendants were required to verify the identity of the seller, the seller’s title, right and interest in the property to be sold and the availability of the property for the envisaged transaction.  It is also common cause that the seller turned out to be an impostor.

The first issue for determination is whether or not 2nd defendant was negligent? If yes, whether Plaintiff suffered damages in the sum of US$11 000.00 as a result of such negligence.

In that regard it is necessary to consider the nature of conduct and standard that was expected of second defendant as an estate agent.

If it is that second defendant omitted to do anything that would have prevented plaintiff’s loss, whether such was wrongful and negligent making him liable for the damages suffered.

It is pertinent to note that an omission will be considered wrongful only if it occurs in circumstances that the law regards as sufficient to give rise to a legal duty to avoid negligently causing harm.

In A Guide to the Zimbabwean Law of Delict, 3rd ed (2001), by Professor G Feltoe, the learned author states at page 29 that:-

“Where patrimonial loss accrues as a result of harm caused by an omission as opposed to positive physical conduct there are special rules which apply. In general terms, there is no delictual liability for an omission unless, in the circumstances, the law recognises that there is a legal duty to take positive action to prevent the harm from occurring.”

As regards the circumstances when there is a positive legal duty to act in  Mapingure Minister of Home Affairs & Others 2014(1)ZLR 369(H) at 380B-E court quoted with approval the words of RUMPFF CJ in Minister of Police v Ewels 1975(3)SA590(AD) wherein the Chief Justice stated at 596-597 that:-

“It would appear that the question of an omission, as delictual unlawful conduct, has reached a measure of clarity, cf. ………. The premise is accepted that there is no general legal duty on a person to prevent harm to another, even if such person could easily prevent such harm, and even if one could expect, on purely moral grounds, that such person act positively to prevent damage. It is also however accepted that in certain circumstances there is a legal duty on a person to prevent harm to another. If he fails to comply with that duty, there is an unlawful omission which can give rise to a claim for damages. ………… It appears that the stage has been reached where an omission is regarded as unlawful conduct when the circumstances of the case are such that the omission not only occasions moral indignation but where the legal convictions of the community require that the omission be regarded as unlawful and that the loss suffered be compensated by the person who failed to act positively. When determining unlawfulness, one is not concerned, in any given case of an omission, with the customary ‘negligence’ of the bonus paterfamilias, but with the question whether, all facts considered, there was a legal duty to act reasonably. …………

Just as a duty to rescue can sometimes be a legal duty, so a duty to protect may be a legal duty, and it would depend on all the facts whether such duty is a legal duty or not. Clearly it is impossible to determine in general when such a legal duty would arise.”

In casu, it is pertinent to establish whether the second defendant had a legal duty to act positively to prevent harm suffered by the plaintiff as alluded to above. Counsel for the plaintiff argued that second defendant had a legal duty to act positively to prevent the harm. He also submitted that there were compelling public policy considerations which required the imposition upon second defendant, a positive duty to have verified the seller’s title and interests in stand 11499 and the legal convictions of the community demand that his failure to do so ought to be regarded as unlawful.

The defendants’ counsel on the other hand submitted that there was nothing else the second defendant could have done as he had done all there was to do. He contended that second defendant verified the identity of the seller with the Glen View district office of Harare City Council. He further submitted that both plaintiff and 2nd defendant were victims of a fraudster who produced original documents and no one could have suspected that she was not entitled to sell the property. Apart from deceiving the parties, some documents were in fact commissioned by commissioners of oath showing the sophistication of the fraudster in her bid to succeed.

It would appear that defendants in such submission were seeking that loss should lie where it is as they did what they could. In this regard counsel referred to Music Room (Private Ltd v ANZ Grindlays Bank of Zimbabwe 1995(2) ZLR 167(H) wherein court held that when a reasonable person is likely to say that both parties were victims of fraud, the Defendant should not be held accountable for fraud suffered by plaintiff.

However, in that case court also held that:-

“…. for a claim for damages for purely economic loss to succeed, not only must there have been negligence on the part of defendant but, in the circumstances of the particular case, the defendant must also have owed a legal duty of care to the plaintiff to avoid causing him such loss by his negligence.”

Upon considering the circumstances of that case which included the negligence of both the plaintiff’s employee and the defendant’s employee the court then held at 168E-F that:

“.. in the circumstances of this case it would not be in the interest of society to impose a legal duty of care on the bank in respect of economic loss suffered by the plaintiff. The legal convictions of the community did not demand that this negligent act be regarded as unlawful. A reasonable person is likely to say that both parties were victims of fraud and the loss should lie where it falls.”

It is clear that considerations of legal duty of care and legal convictions of the community are critical. The circumstances of each case must be considered on their own merits. In casu, there was no negligence on the part of the plaintiff. The responsibility was on the second defendant, as the face and agent of the seller to ensure that he had verified the true identity of the seller and that he had not been given a mandate to sell by a fraudster or imposter. Any failure in that regard was bound to have devastating ramifications as the Plaintiff was bound to rely on his professional diligence in that regard.

In the circumstances of this case, whilst indeed defendants contended that 2nd defendant had verified the information and even saw the seller’s identity document and satisfied himself that he was dealing with a true owner, it is not denied that the seller was in fact an imposter. It is my view there was a failure in that regard. Had 2nd defendant carefully examined the identify document and checked with the relevant housing authority as alluded to by Mr. Pindura, he would have picked some anomalies.

A further problem with 2nd defendant’s stance is that whilst contending that verification with HCC Housing head office was not necessary, he conceded that for cession to go through head office approval was needed. It follows that by not seeking such approval at this stage he was taking a risk whereby after completing the requisite structure cession to plaintiff would still be declined. I say so for the simple reason that I did not hear second defendant to allege that head office’s approval was a mere formality or inconsequential. By adopting such a short cut to sales involving cessions whereby he did not verify with the authority charged with approving cessions second defendant was acting negligently and not in accordance with a standard expected in the real estate industry. It is because of such risk that plaintiff expressed her misgivings about entering into a transaction without having seen the seller of which second defendant assured her that ‘all’ was in order. Now that ‘all’ has not been in order as had been assured surely second defendant cannot escape the consequences of his failure to verify with housing head office. It was upon him to verify the identity of the seller and verify with the authority responsible for approving cessions that he had been given the mandate by a true owner with title, rights and interest in the property. The plaintiff was reliant upon him to professionally handle the transaction.

The defendants’ being in real estate business would surely have known about numerous cases of fraudsters selling properties they did not own and should have not taken chances by not verifying with all the offices. Had the second defendant checked with HCC housing head office he would have been informed of the status of the property as by the time he was given the mandate to sell, the council had in its file a letter from Hove & Associates showing that the true owner Mary Fungai Pisira had in fact passed on in 2004. It was incumbent upon the second defendant to verify with the relevant offices as he owed plaintiff a legal duty of care to act in a way that would not harm her.

In Ruth Chirimuuta v Action Property Sales (Pvt) HH 5/07, the estate agent had drawn up an agreement of sale before confirming that the seller had authority to sell the property, and had proceeded to release part of the purchase price before verifying the authenticity of the seller’s title in the property being sold. It later turned out that the purported seller was an imposter, just like in this case, and transfer could not go through. The purchaser sued the estate agent for damages on the grounds that the estate agent had been negligent in failing to uncover the true identity and authenticity of the sellers and their title in the property. At page 6 of the judgment, the HON. PATEL J (as he then was) opined that:-

“I am of the firm view that the Defendant owed the plaintiff a duty of care not only to confirm the seller’s identity and authority to sell, but also to verify the authenticity of the seller’s title in the property being sold. In the circumstances of this case, it was reasonably foreseeable that the Plaintiff would be prejudiced if the defendant’s duty of care was not complied with before the sale was concluded and especially before the purchase funds were transferred.”

A similar position was arrived at in Alex Masiya & Another v Roland Takawira Sadomba & Another HH 28/12. In that case the plaintiffs sued for damages against the defendants(real estate agents)on the grounds that defendants had breached their duty of care in the sale of a piece of land, which turned out not to belong to the purported sellers introduced to the plaintiffs by 1st defendant. By the time the plaintiffs discovered the true position part of the purchase price had already been paid to the purported sellers. In arriving at the conclusion that the estate agent owed the purchasers a legal duty of care, and had in fact breached that duty, the HON. MUTEMA J stated that:-

“In the real estate industry, can an estate agent or property consultant/negotiator be held liable for negligently breaching a duty of care which occasions financial loss to purchasers to whom he had made assurances that they would not be defrauded by the prospective seller; ………”

Later, at pages 8-9, the learned Judge reasoned that:

“The first defendant assured them that he was a professional who had been in the business for a long time and that their money would be safe. In other words, the first defendant assured the plaintiffs that he would protect their interests. He therefore owed the plaintiffs a duty of care.

I say so because as between the defendants and the plaintiffs, there was created a sufficient relationship of proximity such that in the reasonable contemplation of the former, negligence/carelessness on their part might be likely to cause damage to the latter. Every person has a right not to be injured in their property by the negligence of another. The transaction in the instant case took place at a time when the real estate industry was awash with prospective innocent purchasers being conned of their hard earned money by fraudsters who thrived on the innocence or gullibility of the former. Where therefore a purchaser entrusts his/her money to a professional estate agency/property consultant who assures him/her that the money would be safe, a duty of care is thereby established. If the estate agency negligently breaches the duty of care so created, it must be held liable in damages for the ensuing harm where a diligens paterfamilias would have foreseen the danger and guarded against it.”

The learned judge further stated at page11 that:

“On the totality of the evidence adduced, the probabilities and the law, I find it not only equitable but good law that in the real estate industry, an estate  agent or property negotiator/consultant can be held liable for negligently breaching a duty of care which occasions financial loss to a client……”

In casu, there is no denying that second defendant made assurances to the plaintiff that the sale would not go wrong, and that as long as Plaintiff had in her possession the original sale and purchase agreement in respect of stand 11499, which had been concluded between the seller and the Harare City Council, she would be safe. It was a result of such assurance that plaintiff signed the agreement of sale and paid the money before meeting the seller. As a result of such assurances plaintiff felt her interests were protected as she was dealing with a professional estate agent. In these circumstances I am of the view that second defendant owed plaintiff a duty of care.

It is apparent that the second defendant as agent of the seller had given the plaintiff the belief that the seller was the true owner of the property and that he had verified the seller’s title and capacity to sell the pretty, by virtue of such assurances to plaintiff a relationship akin to fiduciary relationship was created. In my view a sufficient relationship of proximity or neighbourhood between second defendant and plaintiff was created, such that it must have been in the contemplation of second defendant that carelessness on his part would be likely to cause damage to the plaintiff. This again gave rise to a duty of care. The relationship required second defendant to act with due diligence to avoid harm befalling plaintiff. This he was required to do by ascertaining the true identity of the seller and to confirm title of the seller and ability to cede the property with the relevant authority. It was not good enough to just conduct part verification; he ought to have verified with the Harare City Council Housing head office as he knew that that is the office that would eventually approve or decline to approve the cession.

In my view, a real estate agent is deemed to have skill and experience in real estate matters, superior to that of a lay person, and that he is under a duty to use his superior skill and knowledge while pursuing the affairs of both the seller and the purchaser. This duty includes an obligation to discover facts relating to the seller and the property that a reasonable and prudent agent would be expected to investigate.

In the circumstances of this case, I am of the view that the second defendant owed the plaintiff a legal duty of care. The nature of that duty required the second defendant to act positively to fully verify the seller’s identity, title and interest in Stand 11499 Glen View 7 before conclusion of the sale agreement, and/ or before the release of the purchase price to the seller. The question is thus did he fulfil that legal duty of care which, in my view, would be within the conviction of the community that he should fulfil or was he negligent in that regard?

The inevitable answer seems to be that he failed in this regard as a result of which plaintiff lost the entire sum she paid as purchase price to an imposter.

Real estate is a profession governed and regulated under relevant legal provisions. It is in recognition of its professional nature that section 5 of the Estate Agents Professional Conduct Rules, 1987; Statutory Instrument 200 1987 states that:

“An estate agent shall act bona fide and in a fiduciary manner towards all persons with whom he has dealings in his professional capacity.”

In considering whether an estate agent was negligent or not the test is thus that of a professional estate agent.

In Mapingure v Minister of Home Affairs & Others (supra) court in considering this issue, quoted with approval the words of OLIVIER JA in Mukheiber v Raath & Anor 1999(3)SA 1065(SCA) wherein the learned judge of Appeal at 1077D-I stated as follows:

“For the purposes of liability culpa arises if–

(a)  a reasonable person in the position of the defendant-

(i)   would have foreseen harm of the general kind that actually occurred;

(ii)  would have foreseen the general kind of causal consequence by which  that harm occurred;

(iii)  would have taken steps to guard against it; and

(b)  the defendant failed to take those steps.

In the case of an expert, such as a surgeon, the standard is higher than that of the ordinary lay person and the Court must consider the general level of skill and diligence possessed and exercised at the time by the members of the branch of the profession to which the practitioner belongs (Van Wyk v Lewis 1924 AD 438 at 444).”

The second defendant testified that he had been in real estate industry since 2000 and so when this transaction took place he had at least 12 years experience. He was thus not a novice.

It is my view that a reasonable estate agent with such experience would have foreseen the possibility of financial loss being occasioned to the plaintiff if the sale agreement was concluded and the purchase price released to the seller, before verifying the seller’s title, rights and interest in stand 11499 Glen view 7 with Harare City Council. It was a condition of the agreement of sale he drew that full purchase price would be paid on signing of the agreement of sale and so it was imperative that such verification be done before money was released. When one has regard to the numerous acts of fraud perpetrated by imposters in the real estate industry, it is clear that the foreseeability of such harm was real. The second defendant having been in the industry for at least 12 years would surely have come across numerous reports of acts frauds perpetrator by imposters purporting to own properties. This is a phenomenon that has dogged the real estate industry for a long time and it should have put players in that industry on the alert.

On whether a reasonable estate agent would have taken reasonable steps to guard against the foreseeable harm alluded to above, I am of the view that this was very much possible. In A Guide to the Zimbabwean law of delict (supra) at13 Professor G Feltoe opined that:

“When deciding whether the reasonable person would have guarded against harm that was reasonably foreseeable the courts will take into account the following factors:

The degree of risk that the harm would occur(was it probable or unlikely that the harm would occur)

The nature of the harm that would occur (if the harm occurred would it be serious harm or only trivial harm?)

The nature of the precautions required to prevent the harm (were these elaborate and expensive or easy and inexpensive?)

The objective that D was seeking to attain (was this legitimate or illegitimate?)”

In this case, in the environment obtaining of numerous cases of imposters, the risk of drafting an agreement of sale with a clause that allowed payment of the full purchase price on signing of the agreement and releasing of the purchase price to the seller, without verifying the seller’s title, right and interest in the property with the office responsible for approving cessions was great, as was the gravity of possible consequences. The second defendant could easily have eliminated this risk by making the verification with the office responsible for authorising cessions rather than just with the district office, which office he knew had no final authority on whether a cession should go through or not. He was well aware that the district office that he claimed to have checked with had no final say on whether a sale by cession should go through or not yet he chose to rely on the information he claims to have received from that office. Had he attended at both the district office and the head office the fact of the true owner having died in 2004 would have been brought to his attention as such information was already in the file at Harare City Council Housing head office on the property in question.

I thus conclude that as a matter of probability the fraud occasioned on the plaintiff would not have succeeded had the second defendant verified the seller’s title, rights and interests in stand 11499 Glen View 7 with Harare City Council district and head offices before the sale was concluded or before the money was released to the imposter seller.

Accordingly I find that second defendant was negligent in the circumstances of this case.

Whether or not first defendant is vicariously liable for the second defendant’s negligence.

It is common cause that second defendant was at all material times employed by the first defendant. The transaction in question was entered into during the course and scope of his employment with first defendant. Whatever he did with plaintiff was within his scope of such employment and first defendant must have received commission of 7.5% of the purchase price as is reflected in the mandate to sell document signed by the imposter seller on 31st October 2012. The agreement of sale was drawn under the cover of the first defendant. see exhibit 2.

Further the purchase price was paid into first defendant’s trust account. Throughout the evidence I did not hear first defendant to deny vicarious liability in the event second defendant was found to have been negligent.  In the circumstances if second defendant is found liable of negligence the 1st defendant must be held equally liable.

Whether or not 1st defendant released funds to the purported seller without plaintiff’s authorisation? If yes, whether 1st defendant is liable and the extent of its liability.

It is common cause that on the 12th November 2012, the plaintiff authorised the first defendant to release the purchase price to the seller only on condition that all the remaining documents have been surrendered to first defendant. It is this letter of authorisation that defendants sought to cling onto to absolve themselves of liability in the release of the money. Such reliance was however misplaced in that second defendant admitted that this letter was written under his assurance to the plaintiff that all was well and once the remaining documents were provided she had nothing to fear. It was a result of second defendant’s assurances which plaintiff deemed as professional that she authored that letter. The letter was not a result of plaintiff’s own satisfaction that all was in order. Clearly plaintiff relied on second defendant in this regard. This is a guided letter of authorisation given under second defendant’s assurance that all was in order. Even the documents she asked to be surrendered to first defendant were as per what second defendant had told her and assured her that those would be sufficient. The second defendant confirmed under cross examination that he had assured plaintiff of the sufficiency of these documents. It was therefore against the background of such assurances that the written authorisation for the release of the purchase price was given. The authorisation in such circumstances was inconsequential and would not absolve defendants from liability for failure in their duty of care.

The inconsequential nature of such written authorisation given due to assurances by defendants was also alluded to in Ruth Chirimuuta v Action Property Sales (supra) wherein at page 7 the learned judge stated that:

“It is common cause that the plaintiff authorised the defendant to release the cash payment of $82 million to Robert Marange. Nevertheless, it is clear from the evidence adduced that the plaintiff only did so on the strength of Coetzee’s assurances as to the proper identity and title of the seller.

As already found, Coetzee’s conduct was patently negligent in relation to the identity of the seller, his authority to transfer title and the authenticity of the title deeds presented by him. In my view, her negligence in these respects renders the plaintiff’s authorisation immaterial and continues to attach liability to the defendant for the negligent release of funds to Marange.”

Similar sentiments were expressed in Alex Masiya & Another v Ronald Takawira & Another (supra). In that case the plaintiff had like in this case, authorised the estate agent to release the purchase price to the seller, on the strength of assurances made by the estate agent. At page 9 of the cyclostyled judgement the learned Judge stated as follows:-

“In the case at hand, to hold that because in clause (a) of exh 1 the plaintiffs authorised the defendants to release the purchase price once the sellers had signed the relevant transfer documents, the defendants are not liable for the loss would not only be too simplistic and positivist, but the law would have dismally failed to do justice to the citizenry whom it is supposed to protect. It would also amount to glorifying fraud or con artistry.”

In casu, it is clear that the written authority to release the funds was against assurances by the second defendant. The defendants cannot therefore escape liability. The plaintiff’s entitlement to recover should not be affected by a written authority given in these circumstances.

In conclusion I am of the view that the defendants failed in their duty to verify the seller’s identity, title, right and interests in stand 11499 Glen View 7 resulting in the loss to plaintiff. The fraud could have been prevented had the second defendant attended to both the HCC district office and housing head office, were the death of Mary Fungai Pisira, the true owner, would have been brought to his attention. These unlawful omissions took place within the course and scope of the second defendant’s employment with first defendant therefore first defendant is vicariously liable for the harm occasioned to plaintiff and must make good such loss to the extent of the loss in the sum of $11 000.00.

Accordingly therefore judgement is granted in favour of the plaintiff as against the defendants as follows:-

The 1st and 2nd defendants be and are hereby ordered, jointly and severally, one paying the other to be absolved to pay to the plaintiff the sum of US$11 000.00 with interest thereon at the prescribed rate from the date of summons to date of payment in full.

To pay costs of suit.

Gwaunza & Mapota, plaintiff’s legal practitioners

Muchengeti & Company, 1st and 2nd defendants’’ legal practitioners