National Foods Ltd v Knight Frank (Pvt) Ltd

### Preamble
1
HH 598-18
HC 3803/14
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NATIONAL FOODS LTD

versus

KNIGHT FRANK (PVT) LTD

HIGH COURT OF ZIMBABWE

DUBE J

HARARE, 28 June 2018 & 3 October 2018

Trial

T Mpofu, for the plaintiff

T Magwaliba, for the defendant

DUBE J: The plaintiff claims damages based on the following common cause facts;

An entity known as Superbake trading as Trinpac Investments (Pvt) Ltd, [Trinpac] and Medworth Properties (Pvt) Ltd, [Medworth], applied for a credit facility from the plaintiff. Superbake agreed to transfer its rights, title and interest in Stand 10482 Seki Township, [hereinafter referred to as the stand], as security for the debt. The plaintiff commissioned production of a valuation report of the stand. A mortgage bond was registered over the property and the stand was valued at $250 000.00. Superbake defaulted. The plaintiff entered into an agreement with its debtor in terms of which the plaintiff accepted two immovable properties in full and final settlement of the liability owed.  Later, it was discovered that the valuation of the stand included improvements on stand 10481. A second valuation report valued the stand at $100.000.00.The first valuation had overstated the value of the stand by $150 000.00.

The plaintiff claims that it relied on the first valuation resulting in it entering into an agreement with its debtor based on an incorrect valuation. It asserts that  defendant negligently took into account developments on an adjoining property .When it was discovered that the valuation was incorrect, the plaintiff had already committed itself to an  irrevocable agreement  with its debtor on the basis of what it thought was sufficient security. The plaintiff claims $150 000.00 being the difference between the initial and second valuation. The plaintiff maintains that the valuation was carried out by the defendant.

The defendant defends the claim. It refutes that it is a real estate company and that it carried out the valuation but asserts that it was done by Knight Frank Zimbabwe, a Partnership of persons distinct from the defendant. It denies the averments of error and negligence on its part. The defendant initially took the position that the valuation report was not prepared for plaintiff but later conceded during the trial that the valuation was prepared for the plaintiff.	The following issues were referred to trial

1.	Whether or not plaintiff was in existence on 7 June 2010. If so, whether the valuation and report dated 7 June in respect of Stand 10482 was prepared for plaintiff, or for the use of plaintiff.

2. 	Whether or not defendant was at all material times a registered real estate or property valuer trading in either business to the public. If so, whether defendant and the partnership called Knight Frank Zimbabwe can be considered as two distinct and/or separable entities for the purposes of this dispute.

3.	 Whether or not it was defendant that prepared the valuation and report in respect of Stand 10482 on 7 June 2010.If so, whether Defendant was professionally negligent in its valuation and report.

4. 	If the valuation and report were prepared by the partnership called Knight Frank Zimbabwe, whether the members of that partnership were the directors of defendant, whether the partnership and defendant were both in the real estate business, whether they used the same acronym and/or logo, whether their business operations were inextricably linked, whether they failed to inform the public of the distinction between them, and whether defendant can be held professionally negligent on the basis of the same economic entity principle.

5. 	Whether plaintiff relied on the valuation report as its basis for committing to the Agreement of 27 September 2011 with Trinpac Investments (Pvt) Ltd and Medworth Investments (Pvt) Ltd. If so, whether the plaintiff was able to resile from or renegotiate the Agreement.

6. 	Whether or not plaintiff suffered pecuniary loss in the sum of US$150 000.00 or at all as a result of the inaccuracy of the valuation and report, and, if so, whether such loss was recovered by it from any third party or source.

The plaintiff called its Group Chief Executive Ntokozo Mkandla as its sole witness. She testified as follows. In 2013 National Foods Operations approached Knight Frank to do a valuation of a property that was offered by their customer Superbake, trading as Trinpac (Pvt) Ltd as collateral for a credit facility for the supply of flower. The credit was applied for in about May 2010 for $650 000.00. Trinpac offered two properties, one in Ardbenie and the other in Seke. National Foods required a valuation to ensure that the credit facility that they offered Superbake was adequately secured. The first valuation, of 7 June 2010, resulted in an erroneous valuation. It included improvements on stand 10481. Knight Frank did not pick up that the property was actually subdivided when it did the valuation. A credit agreement was entered into between National Foods and Trinpac for the supply of flower on 27 September 2011 based on the valuation. The plaintiff advanced credit on the basis of a false valuation report and used it to assess what credit facility to advance.  At the time that the agreement was entered into, it was believed that the value of the collateral property was US$250 000.00. The defendant was negligent.

A second valuation was requested and done in order to get a proper valuation and to determine the prejudice to National Foods as a result of the error in valuation. The value of the stand was placed at $100 000.00.  The erroneous valuation resulted in prejudice of

$150 000.00 to National Foods when the customer defaulted. An agreement was entered into between Trinpac and National Foods   whereby the collateral property over which they had a mortgage bond was transferred to Piliroute Investments (Pvt) Ltd, a subsidiary of the plaintiff in full and final settlement of the outstanding debt in January 2012. Trinpac was going into liquidation so the plaintiff could not resile from the agreement. The property was valued at   $354 970.26. There was no valuation report at that time when the transfer happened. The value was negotiated between the parties. The defendant must be paid $150 000.00 being the prejudice the plaintiff suffered.

When they engaged Knight Frank to do the valuation their understanding was that Knight Frank is a property valuation company. They were not told that the valuation was going to be done by a Partnership. National Foods had been using Knight Frank for other valuation assignments. The company is known to them as a company that does valuations. She is not aware that there are various other Knight Franks. They believed that they were dealing with a company and there was nothing to suggest that they were dealing with a Partnership and hence their claim was made against Knight Frank (Pvt) Ltd. When they engaged Knight Frank, Mr Mazarire whom plaintiff's officials dealt with, never refuted that the defendant was commissioned to do the valuation. They were not told that the valuation was going to be done by a Partnership or a (Pvt) Ltd company.

She knew the real estate company and property management company. The logo of the company they dealt with is written Knight Frank. The letter dated 7 June 2016 written by Knight Frank speaks to the valuation. The letter gives an understanding that the valuation was done by a professional. She later learnt that Mr Mazarire is a shareholder of Knight Frank (Pvt) Ltd together with M.P Mtara. She did not know the partners of Knight Frank. At all times, they considered that they were dealing with the defendant. There were attempts at settlement after the summons. The defendant participated in the negotiations until after the lapse of 3 years after the cause of action arose when the defendant took the position that the valuation had not been done by it. They approached the Estates Agents Council against the defendant but there was no response. The many Knight Franks are meant to generate confusion which the defendant is capitalising on. She maintained under cross-examination that they just wanted a valuation done and did not go beyond Knight Frank’s façade. Although the witness was subjected to lengthy and rigorous questioning under cross-examination, she maintained her version. She testified well and the court found her to be an honest witness who was quick to concede the correct position.

The defendant called Amos Mazarire as its witness. His evidence is as follows. He is a valuer.  He is a director in the defendant’s company and represents it. The defendant is a dormant company since it was incorporated in 1981. Knight Frank Zimbabwe is not a trading company. He is a partner in Knight Frank Zimbabwe Partnership. When Knight Frank came into Zimbabwe it was a partnership and in order to protect the name of the partnership and stop other entities having title similar to theirs, they protected the name by registering protection companies. The protection companies are registered as Rutley (Pvt) Ltd, Knight Frank Zimbabwe (Pvt) Ltd. As a result, nobody else can register a Knight Frank Company. The partnership is Knight Frank Zimbabwe .The partnership benefits from the protection. The logo ‘Knight Frank’ on p 14 is for the Partnership and which is registered with the Estates Agents Council. He holds a share in Knight Frank (Pvt) Ltd and in trust for the partners of Knight Frank Zimbabwe. It is Knight Frank Zimbabwe, the Partnership that is involved in the real estate business. The defendant could not carry out the valuation as it is dormant. The company known as Knight Frank, (Pvt) Ltd is the defendant in this case. Knight Frank (Pvt) Ltd has no employees as it does not do business. Knight Frank (Pvt) Ltd has no logo. The partnership and the defendant share the same offices.

The valuation was done by the Partnership for the plaintiff. It is the Partnership that gave the terms of engagement. The first valuation report for $250 000.00 includes improvements which were overstated. A second valuation valued the same property at $100 000.00. When the mortgage bond was registered the valuation report had not been prepared. The plaintiff could not have relied on this report as they did not know the value they were going to declare. He insisted under cross-examination that the plaintiff sued the wrong party. He accepted that Knight Frank was a trade name. He was taken to task over the necessity to incorporate three companies with identical names. He maintained that this was done in order to protect the name Knight Frank. He maintained that there was no prejudice suffered by the plaintiff because it took transfer of the property at a higher value. If the plaintiff was going to suffer any prejudice, it was supposed to mitigate its loss by resiling from the contract. The witness appeared very excited and seemed to be in court for a show down with the plaintiff’s legal practitioner. He did not impress as a good witness.

The first issue falls away as the defendant's witness conceded that the valuation was done for the plaintiff. The real issues to be decided centre on the identity of the entity that carried out the valuation, whether the plaintiff relied on the valuation and the consequences of its reliance if any. The second issue raises questions regarding whether the defendant carries on real estate business and whether the Partnership should be considered as distinct from the defendant. The third and fourth issue feed into the second issue. The fifth and sixth issues centre  on negligence and will be addressed after the issue regarding the identity of the valuer has been resolved.

The defendant’s witness testified that the defendant company was registered in order to protect  the Partnership for the purpose of making it difficult for any other company to be registered as a Knight Frank Company. Further, that it is a dormant company. It has not traded since its incorporation and is not involved in real estate management. Ms Mkandla testified that she was not aware that there were various Knight Franks. The plaintiff understood that Knight Frank was a real estate company and property management company and had been using the company for other valuation assignments. She insisted that the valuation was done by Knight Frank (Pvt) Ltd, the defendant.  The evidence led discloses that there are various Knight Franks. There is the Partnership known as Knight Frank Zimbabwe which is the property valuation company and practices as an estate agent. It is the entity that is registered under the Estates Agents Council as a valuer. No evidence was produced to show that the defendant is registered as a real estate company or property valuer .The onus was on the plaintiff to prove that the defendant is an estate agent and a valuer. It failed to do so. Whether the defendant did in fact trade as a valuer or real estate agent to the public and can be said to have produced the valuation report will be resolved later.

A single economic entity was defined in an article by Neil Mackenzie, Ingrid Rogers and Stephen Langbridge titled, The Single Economic Entity Doctrine in South Africa and its implication for competition policy as follows,

“This is the principle that juristic entities can sometimes be related so closely to each other that it would be artificial to treat them as separate economic actors for purposes of competition law.”

The single economic entity doctrine is a competition law concept. It applies in a case where companies within a corporate group are closely associated with each other, are commonly controlled and operate as a single economic unit. In Viho Europe B v Commission of the European Communities Case No. C 73/95 ECJ, it was shown that a company used to hold one hundred percent shares of its subsidiary companies and that the sales and marketing activities of the subsidiaries were directed by an area team appointed by the parent team. The Commission concluded that the parent company and its subsidiaries formed a single economic unit. In Ben Hashem v Al Shayif and Anor [2008] EWHC 2380 [Fam] the court laid out principles related to the piercing of the corporate veil as follows;

1.	Ownership and control of a company are not of themselves sufficient to justify piercing the veil.

2.	The court cannot pierce the veil, even when no unconnected third party is involved, merely because it is perceived that to do so is necessary in the interests of justice.

3.	The corporate veil can only be pierced when there is some “impropriety.

4.	The company’s involvement in an impropriety will not by itself justify a piercing of its veil: the impropriety “must be linked to use of the company structure to avoid or conceal liability.

5.	It follows that if the court is to pierce the veil, it is necessary to show both control of the company by the wrongdoer and impropriety in the sense of a misuse of the company as a device or façade to conceal wrongdoing.” See also VTB Capital PLC v Nutritek International Corp SC (UKSC) 2012 /0167.

The approach is to treat as one single economic unit companies even though they have separate personalities because they constitute a single unit for economic purposes. The doctrine comes into play where a company with an obligation or liability evades or frustrates liability by concealing the true state of affairs in order to avoid the effects of a court order. In such cases, the court lifts the corporate veil in order to peep under the corporate veil and examine the activities of the companies involved. The corporate veil is only lifted where it has been shown that there is impropriety linked to abuse of the company structure.  A litigant alleging that two or more companies constitute a single economic unity is required to show that there is a connection or affiliation between one and more of the companies. The structure, operations and economic activities of each company must reveal a connection between the companies. There must exist practices that exhibit that the companies constitute the same legal entity. The fact that different companies constitute one single entity may be evidenced by the consolidated financial statements of such companies. It must be shown that the different companies or entities are inextricably linked so as to constitute one legal entity from an economical point of view and act as a whole. There must be allegations of wrongdoing on the part of the entity complained against. The doctrine is invoked mostly in cases where there are allegations of fraud or other improper conduct on the part of one of one or more of the companies. It must be shown that the entity or company involved is a sham or facade. A party which relies on the same economic entity doctrine effectively asks the court to lift the corporate veil in order that the shareholders or other relevant actors on whom the obligations of the entity are placed are made responsible for their actions. Where it is shown that a unit of companies constitute one economic entity, liability attaches to all the entities. The corporate veil may only be lifted in the case of some impropriety linked to use of company structure in order to evade an obligation  and that the entity concerned is controlled   by the wrongdoers and that they used the company to evade liability. Ownership of a company is not on its own sufficient to justify a court lifting the corporate veil.

Looking at the facts of this case, it is apparent that the identity of the valuer was always clear to the plaintiff right from the moment the parties entered into the business transaction which is at the centre of this dispute. A covering letter written on 20 December 2011 by the valuer has the logo ‘Knight Frank’ but is signed by Knight Frank Zimbabwe. The terms of business in the opening statement read as follows,

“The following General Terms of Business apply to all valuations and appraisals undertaken by Knight Frank Zimbabwe unless specifically agreed otherwise in confirming instructions and so stated within the main body of the valuation report”

The terms of business show without any doubt that the valuation was going to be carried out by the partnership. The defence witness told the court that the Partnership uses the logo ‘Knight Frank’ in legal dealings including terms of reference. This is evidenced by communication from the Partnership. It was not shown that the defendant has a logo or that it uses the acronym “Knight Frank.”

The contractual document in terms of which the valuation reports were prepared was executed between the plaintiff and Knight Frank Zimbabwe. The terms of reference for the valuation were given to Mr Mazarire in his capacity as the senior partner of Knight Frank Zimbabwe. It is unlikely that the plaintiff considered that Mr Mazarire was a partner in a private limited company. It is clear from the terms of engagement that the plaintiff was dealing with Knight Frank Zimbabwe. All correspondence from the valuers shows that the plaintiff was dealing with the Partnership as they are signed by Knight Frank Zimbabwe. The last paragraph of the letter  written by the defendant  after commission of the valuation states in the last paragraph, “Thank you for instructing Knight Frank Zimbabwe.''  Here is a clear indication from the Partnership that it is the entity that was carrying out the valuation. Clause 3.2 of the general terms of business for the valuation is explicit that in the event of error or mistake on the valuation report, the plaintiff must bring a claim against the Partnership. That clause was not complied with.

The letter of demand from the plaintiff at p 163 of the plaintiff’s bundle of documents gives the impression that the plaintiff dealt with the Partnership.  The letter is addressed to “The Senior Partner Knight Frank Zimbabwe.” The plaintiff has not explained why the letter was addressed to the partnership if the erroneous valuation had been carried out by the defendant. The allegation in that letter was that the valuation had been carried out by the Partnership. The plaintiff threatened to institute proceedings against the Partnership. The plaintiff proceeded from the premise that the report had been prepared by Knight Frank Zimbabwe. Suddenly in its summons, it sues the defendant. There is no explanation for the sudden change in focus and why summons was eventually issued against the defendant as opposed to Knight Frank Zimbabwe as per the general terms of business and the fact that the valuation had clearly been done by the Partnership. The Partnership is the entity that is registered as a valuer and always gave out that it is the one carrying out the valuation. If the plaintiff was confused about the identity of the valuer, such did not emanate from the defendant. The plaintiff chose instead to argue that the Partnership and the defendant constitute one economic entity.

There was no evidence showing that the defendant is operating or carrying out any economic activities together with or of the Partnership. The defendant failed to show that the two entities carry out any activities in common as the defendant was said not to be operating. No connection or business affiliation has been shown to exist between the two entities. There are no business practices that exhibits that the companies constitute the same legal entity. The defendant sought to suggest that because the Partnership and the defendant both use the acronym and logo “Knight Frank,” they are the same economic unit. The allegation was left unsubstantiated. The plaintiff was required to establish that the defendant was organised or maintained as a device to evade legal obligations. That has not been successfully done. The ownership of the entities involved as well as the decision making structure of the entities does not support the proposition that the entities are a single economic entity. It is not correct that all members of the Partnership are listed as directors of the defendant. Only two partners, Mr Mazarire and Mr Mtara are the directors of the defendant.

It was not shown that the defendant has employees and specifically that it employs valuers. The defendant is not a valuer and cannot be accountable for the activities of a valuer. The fact that two entities share the same office does not make one accountable for the actions of the other. It does not make them one economic entity. No evidence was led on the business operations of the defendant to rebut evidence that the defendant is a dormant company, does not operate and hence does not do valuations. Although the Declaration of Trust and Deed of Waiver suggests that the defendant does business when it refers to “other monies that may accrue,” the defence witness maintained that no monies have accrued so far. That assertion was not rebutted. The defendant is not a registered real estate or property valuer. It was not shown that it carries out any business operations. This in no way suggests that it is a sham. It is not good enough for a party relying on the single economic doctrine to simply prove that two or more entities constitute one economic entity. It is the activities and dealings of the two entities that make them one single entity. Proof of ownership of a company is not in itself justification for lifting the corporate veil. It must be shown that the entities are inextricably linked and indivisible. There has to be evidence of impropriety, wrong doing or conduct that is attributes to the entity complained against. The plaintiff does not allege any fraud deceit, mala fides or other improper conduct on the part of the defendant or the Partnership in the summons. A party that seeks to rely on fraud is not only required to plead fraud, it must also prove it. The plaintiff has only at trial stage sought to allege that the defendant deliberately, together with the companies associated with it, set out to deceive members of the public. It has not been shown that the defendant or Partnership was involved in any fraudulent activities or any other improper conduct in a bid to evade its legal responsibilities. The identity of the entity that the plaintiff dealt with was always known to it and hence there is no fraud to talk about. There is no suggestion that the defendant is a sham or was used to avoid or conceal liability. There is no evidence to show that the defendant was incorporated for any unlawful purpose or that it is a sham and was incorporated in order to evade either pre-existing or existing debts. Further that it is deliberately trying to evade the effects of a court order. There is also no evidence of any wrong doing by the defendant as evidence reveals that it is the Partnership that carried out the valuation.

The court is unable to find that the business operations of Knight Frank Zimbabwe and Knight Frank (Pvt) Ltd are so inextricably linked as to constitute one legal entity from an economical point of view and act as a whole. Even if the plaintiff had managed to show that the two entities constitute one economic entity, there being is no evidence to show any wrongdoing on the part of the defendant. I am not convinced that the corporate veil should be lifted. A litigant who seeks to rely on the single economic entity doctrine is required to allege and prove wrongdoing on the part of the party complained against. The plaintiff cannot ask the court to pierce the corporate veil because its remedy lay in suing the partnership and it failed to take that course. No basis has been shown for lifting the corporate veil. Once the plaintiff became aware at the stage of negotiations that the defendant was denying liability, it ought to have pursued the partnership instead of persisting against the defendant. The court is not persuaded to lift the corporate veil.

Out of folly, the plaintiff pursed the wrong party. The fact that the plaintiff may have confused itself over the identity of the valuer does not mean that there are other members of the public who were confused about the identity of the valuer. There was no need on the part of the defendant to inform the general public of the distinction between it and the Partnership as it did not operate. It was clear from the beginning that the plaintiff was dealing with the Partnership. It was up to the plaintiff to visit the Deeds Registries Office where companies are registered in order to establish the structure and true identity of the entity it was dealing with through company registration documents in terms of s 357 of the Companies Act. No blame lies on the defendant for plaintiff’s failure to do a due diligence search.

The court has also considered that accompany cannot be held accountable for professional negligence on the basis of the same economic entity principle if it is not involved in the trade or profession in respect of which the negligence is alleged. It has not been shown that the defendant is a valuer or that it employs professional valuers. The defendant cannot be sued for professional negligence when it is not a professional valuer and did not carry out the valuation. There was no evidence led to support the assertion that the defendant carried out the valuation either on its own or on any other basis.

Even assuming that the court’s finding that the report was prepared by the Partnership is not correct, the evidence led does not disclose that the plaintiff relied on the valuation report as a basis for committing to the agreement of 27 September 2011. The plaintiff’s witness testified that the plaintiff relied on the valuation report as its basis for committing to the agreement. There is no suggestion that the plaintiff relied on the valuation for any purpose whatsoever. When credit was granted and security registered, the valuation report was not yet in existence. When collateral was taken, by the registration of the mortgage bond on 4 June 2010, the valuation report had not been prepared. The grant of credit supposedly based on the property as collateral could not have been based on the valuation report which was only prepared and presented to plaintiff on 7 June 2010. The plaintiff could not have relied on this report as they did not know the value the valuation was going to declare.

When the agreement of 27 September 2011 to transfer the debtor’s property to the plaintiff was concluded, this was 15 months after the valuation report. No evidence was led to show that the plaintiff relied on the report. The plaintiff’s witness could not say why she alleged that the plaintiff relied on the report. The person who signed the agreement on behalf of the plaintiff was not called. Pilerroute Investments (Pvt) Ltd   took transfer of the property valued at $354 970.26, a value higher than that ascribed to it by the valuation report. The value given to the property is much higher than the value given to it by the valuer in the erroneous valuation. The plaintiff’s witness attributed this value to discussions between the directors of plaintiff and Mr Canaan Dube. Nothing suggests that the plaintiff relied on the valuation report.

In Taunton Enterprises (Pvt) Ltd and Anor v Marais 1996 (2) ZLR 303 (H) the court laid out the principles to be followed in a delictual claim where a plaintiff relies on negligent misstatements as follows:

“1. 	The plaintiff should have made a serious inquiry of or sought important information from the defendant on a matter relating to a business or professional transaction whose nature he revealed to the defendant.

2.	The defendant should have voluntarily undertaken or assumed the responsibility of providing the plaintiff with the correct information on the subject matter of the inquiry.

3. 	The defendant should know or ought to have known from the nature of the transaction of the gravity of the inquiry, and by the importance and influence attached by the inquirer to the answer, that the information was wanted for serious purposes and that the inquirer intended to rely and act on the answer.

4.	 The defendant does not have to be in the business of giving advice on the matters asked for nor does he have to hold himself out to be in possession of a special skill or competence in the subject-matter of the inquiry.

5. 	The defendant should have made the misstatement to the plaintiff without a disclaimer of responsibility for or qualification of its accuracy.

6. 	The plaintiff should have relied and acted on the misstatement as a result of which he suffered financial loss.

7.	 It should have been reasonable in the circumstances of the case for the plaintiff to rely and act on the statement made by the defendant.”

In Thomas v BMW South Africa (Pty) Ltd 1962 (2) SA 106 (c) the court stated thus,

“There can be no delict in the absence of a wrongful act or omission on the part of the wrongdoer. An act of omission can be characterized as wrongful only if it results in damnum. Until that happens, an act or omission constitutes no more than “negligence in the air.”

The same principle was enunciated in Mukheiber v Raath and Anor 1999 (3) SA 1065 (SCA) at 1075 where the remarked as follows;

“Common to all approaches to “the unlawfulness of a misrepresentation” is the fundamental principle that tortious liability is founded not upon the act performed by the defendant, but upon the consequences of that act (Viscount Simonds in overseas Tanksh (UK) Ltd v Marks Dook & Engineering Co Ltd [1961] ALL ER 404 (PC) (Wagon Mount M.O.I) 41 SA. “But there can be no liability until the damage has been done. It is not the act but the consequence on which the tortious liability is founded just as (as it has been said) that there is no such thing as liability in the air.”

The plaintiff was required to show that it acted on the report resulting in loss to it arising from its reliance on the valuation report. A litigant who brings a claim on the basis of a negligent misstatement must show, in addition to the requirements laid down in the Taunton case show that he relied on the misstatement resulting in him suffering damages. Even if the claim had been brought against the correct party, the plaintiff does not satisfy the 6th requirement as laid out in the Taunton case. The plaintiff has failed to show that it relied and acted on the misstatement or valuation and hence has failed to satisfy the requirements of the law.

Once it is accepted that the plaintiff did not rely on the valuation report for it to enter into the agreement of 21 September 2011, it follows that there was no wrongful act or omission and hence no delict complained of. The fact of a wrong valuation remains no more than, “negligence in the air.” The negligence of the defendant in conducting a wrong valuation did not cause any loss to the plaintiff. Tortious liability is founded on proof of consequences arising out of an act or omission. It is not sufficient in a delictual  claim to merely prove that a defendant committed a wrongful act or omission. It must be shown that the act complained against has consequences which resulted in loss to the defendant. Negligence can only be founded on an act or omission that results directly in loss or prejudice suffered. There is no claim and no pecuniary loss that the plaintiff suffered as it took transfer of the property at a higher value and hence there can be no valid claim. A claimant who fails to prove that he acted and relied on a misstatement by a defendant cannot succeed in convincing a court to find for him in a delictual claim for damages. The defendant has failed to prove that it relied and acted on the valuation resulting in it suffering financial loss.

In the result it is ordered as follows,

The plaintiff’s claim is dismissed with costs.

Dube, Manikai & Hwacha, plaintiff’s legal practitioners

Wintertons, respondent’s legal practitioners