Scott John Smith and Dustine Anne Smith v Kojo Malcom Paris and Kingdom Bakery (Private) Limited and Registrar of Deeds

### Preamble
1
HH 162-13
HC 4521/05
SCOTT JOHN SMITH
and
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==============================

SCOTT JOHN SMITH
and
DUSTINE ANNE SMITH
versus
KOJO MALCOM PARIS
and
KINGDOM BAKERY (PRIVATE) LIMITED
and
REGISTRAR OF DEEDS

HIGH COURT OF ZIMBABWE
HUNGWÉ J
HARARE, 3 & 4 March 2009 & 22 May 2013

Civil Trial

Advocate E W Morris, for the plaintiff
Advocate H Zhou, for the 1st defendant
Advocate T Mpofu, for the 2nd defendant

Introduction

HUNGWÉ J: Kojo Malcom Parris (“Parris”) intended to sell his house in Harare. He instructed an acquaintance, June Mossdorf, (“Mossdorf”) of Fox & Carney Estate Agents to market the immovable property for him. He was by that time resident in South Africa. Mossdorf found the plaintiffs with whom she negotiated and agreed on a possible sale. The plaintiffs paid a deposit to Mossdorf. When she asked Parris to instruct his lawyers to draw the necessary papers, he refused. She instructed his lawyers to proceed with the sale as she believed a binding contract of sale was in existence. The lawyers refused to take her instructions. The plaintiffs sued for specific performance of the contract by Parris. He resists this claim.

In order to resolve this dispute, this court ought to decide whether there was a binding contract of sale, and if so, whether Parris breached it.

The evidence


The evidence led at trial consisted of two witnesses for the plaintiffs and the first defendant as well as a director of the second defendant. The third defendant did not file any papers and is assumed that the third defendant will abide the court’s ruling on the matter. Each party relied on the pleadings filed of record and the defendant’s bundle of documents used during trial. All this evidence will be assessed in determining the issues put forward in the joint pre-trial conference filed by the parties.

The plaintiff’s case is based on a claim that on 9 August 2005, the parties entered into an oral agreement of sale of an immovable property namely stand number 393 Mount Pleasant, Harare otherwise known as 10 Trail Road, Northwood, Harare. The terms of the oral agreement were:

1. That the purchase price for the property was ZW$2 600 000 000,00
2. The purchase price will be paid by way of the deposit of ZW$300 000 000,00 which was payable on or before the 27th of August 2005 and the balance of ZW$2 300 000 000,00 payable against transfer.
3. The purchase price of ZW$2 600 000 000,00 was inclusive of all the fixtures and fittings, swimming pool pump and motor, borehole pump and motor, satellite dish, electric fence and alarm system.
4. The first respondent would provide approved plans for the cottage on the premises.
5. That the transfer of the property would be handled by Messrs Gill, Godlonton & Gerrans.

According to the summons, the plaintiffs were represented in the transaction by their duly authorized agent, Roger John Smith, (“Smith”) while the first defendant represented himself. The plaintiffs paid ZW$300 000 000,00 deposit on 27 August 2005 to Fox & Carney, the first defendant’s appointed agents in terms of the agreement. The balance of the purchase price was due and payable on transfer. In breach of the said agreement, the first defendant concluded another agreement of sale of the same property with the second defendant.

Smith’s evidence was that his wife and daughter-in-law reacted to an advertisement in the press. He later went to see the property. He was satisfied with it and asked his wife and daughter to make an offer for the property to Mossdorf. The latter told him that they had to sort out the pool otherwise she was to contact Grace who was acting on Parris’ behalf. He later signed an agreement of sale which Mossdorf also signed. According to Smith Parris accepted the offer of ZW$2.6 billion on or about 15 August 2005. He had made his offer to purchase on 11 August 2005. When it was put to Smith that in case number HC 4544/05 he had indicated that the offer made on 9 August 2005 was accepted on the same date he maintained that the correct date should be 11 August 2005 and not 9 August 2005.

During cross-examination Smith was referred to pp 22 and 23 of the bundle of documents. These are e-mails between Mossdorf and Parris. In them Mossdorf explains to the first defendant’s legal practitioners that she had advertised the property on the 4th but due to overwhelming response, she had had to re-open the property on 6th and 9th. She indicates in that letter that she advised Parris on 10 August of offers ranging from ZW$1.8 billion to ZW$2.5 billion. She states that on 13 August she messaged him to say that she had received a further cash offer of ZW$2.6 billion which was subject to the pool being in working condition. Smith says that Mossdorf must have taken two days to send the news of the offer. Smith’s evidence was that his offer was conditional on the building plans for the cottage being available as municipality was pulling down structures which had no approved plans. The state of the pool pump was not a condition as this had been resolved by Mossdorf and Parris. Although Mossdorf was still raising the issue of the pool pump and the gate as late as 19 August 2005, Smith insisted that these were not issues. He had only raised them because he had seen them when he took a tour of the premises. When asked exactly when an agreement regarding a deposit was made, Smith could not say exactly but relied on the reference to seven days after the 19th in the agreement of sale which stipulated that deposit was to be paid within 7 days of signature of the agreement. Since 26 August is on or before 27 August 2005, Smith maintained that he paid the deposit in terms of the agreement.

Mossdorf’s evidence was after Smith has seen the property he made an offer of ZW$2.6 billion which she immediately passed on to Parris by SMS. The offer was subject to the gate and swimming pool motors being fixed and the building plans for the cottage being available. Parris responded that he would not fix the first two items and that Grace would help with plans for the cottage. All this occurred on or about 11th or 12th August 2005. On 15 August she wrote an e-mail to Parris stating that she had an offer for ZW$2.6 billion but needed the details to finalize the agreement. According to Mossdorf after an exchange of the SMS a contract of sale was concluded as she had accepted an offer on behalf of the seller. All that was left were the finer details needed to reduce it in writing. She prepared an agreement of sale. When she gave this agreement of sale to Parris for his signature he did not sign it as he said he needed to study it. He did not sign it as he said he had received a better offer. She told him that a binding contract existed and he would be liable in terms of that binding contract which she had concluded herself. He referred her to Mr Lloyd of Gill Godlonton & Gerrans, legal practitioners.

Under cross-examination Mossdorf revealed the following. Generally all offers made by buyers are reduced to writing. In this case the Smith offer was however not reduced to writing as the seller was out of the country. When she had drafted an agreement of sale she presented it to Parris when next he came into Harare. She was unaware that Grace held a power of attorney for Parris. She denied that she felt that she might lose the business to Tony West when she became aware that Tony West also held agency to sell the same property. The reason she mentioned this fact in her correspondence with Parris was that she felt that he had given the other agent an advantage over her as their selling price was lower that hers. Mossdorf appears to contradict her principal regarding what instructions she held from him. As an example, she told the court that he had indicated to her that the swimming pool pump and gate motor must have been working when the tenant moved in so she should sort that out with the tenant. Parris on the other hand told the court that he never gave such instructions because to his knowledge when the tenant moved in these were not working at all. This aspect of her evidence caught her out. She wrote a letter intimating that she had instructions from Parris that the tenant was to fix these items as he had assumed tenancy when these were in working order. Parris categorically denied giving this instruction.

When the tone of her communication with Parris is closely examined it becomes clear that she persisted with procuring a sale against the express prohibition of the seller. Her mandate was not in writing. The practice is that such mandates are reduce to writing. The advantages of written mandate are that the exact limits are set out. It reduces argument on whether an agent has exceeded his or her authority. From 2nd August 2005 Mossdorf was aware that the lowest price Parris wanted to sell at was ZW$2.8 billion on condition the purchase price was available to buy an available flat. She knew he was selling 10 Trail road voetstoots. Yet she purports to have accepted an offer of ZW$2.6 billion as binding on him. Mossdorf appears to be convinced that by her mere claim that a binding contract had come into existence it indeed came into existence. When she is asked whether she was not in a hurry to get the property transferred without the first defendant’s consent, her response is quite telling. She says that she indeed was in a hurry to do so as Parris did not seem to understand that he and a binding contract and that should he go against that contract it would cause him a problem. She was acting in his interest. When she is told to consult Mr Lloyd over the issue she thinks she is acting in his interest by instructing Mr Lloyd to effect transfer. In fact the referral to Mr Lloyd was for the purposes of checking how off the mark she was in her understanding of the law regarding the existence or otherwise of a contract of sale. She was far too presumptuous of her understanding not just the extent of her mandate but also the law of agency. The mere fact that she had received a deposit on behalf of a seller did not mean there was a sale. For a sale to exist there must be agreement between the seller and the buyer on the thing to be sold and the price at which that thing is being sold. Once these two elements are agreed, then the method of payment can be settled between the seller and the buyer. It can be agreed that the merx it sold for cash or for credit.

**Was there agreement on the price?**

At p 9 of the bundle which Mossdorf relies as her written mandate to sell clearly indicates that she put the price of the property around ZW$2.8 billion. Parris wrote instructing her to market it at that price the following day 2nd August 2005 subject to getting a flat to buy around that price. She never got a flat to buy around that price before writing to say that he has accepted the offer for ZW$2.6 billion. Clearly, she was in a hurry to secure a sale but was she mandated to do so on behalf of the first defendant? The first defendant’s evidence on this aspect is that he had signed a power of attorney in favour of Grace Makuvatsine to administer his affairs when he moved from Zimbabwe to South Africa. He had referred Mossdorf to Grace on certain aspects surrounding the sale of the house, for instance she would look to Grace for the building plans of the cottage. Mossdorf knew that if she wanted to contact him by phone urgently but could not, she would have to rely on Grace to do so. If therefore she needed to conclude an issue but could not find the first defendant, Mossdorf knew that she ought to verify that issue with Grace in the absence of the first defendant. In my view his evidence is to be preferred to Mossdorf when he says that the mandate was to look for buyers only. She did not have a mandate to bind him especially in circumstances where he had indicated the price he would be expecting on his property. The mandate was to find buyers. The buyers would have to make offers for the property. If I understood his evidence well, which I believe I did, Mossdorf was too presumptuous on a lot of things. She came across as such in her demeanor when she gave evidence. Clearly, in my view she misconceived her role. She was not clothed with the authority which she thought she had. In any event even if she misconceived her role, all she needed to do was refer to either Parris or Grace if she thought she had a good prospect of securing a sale closest to the terms sought by the seller.

**Findings**

As to whether there was a valid contract, my findings are that there was no valid agreement of sale between the plaintiffs and the first defendant. The offer by the plaintiffs could not create valid and binding contract without it being accepted by the seller. It remained an offer until accepted by the seller. The buyers knew that Mossdorf was acting as an agent for the seller and as such they knew that the deal would not be sealed unless the seller gave his consent to it. If at all they believe that they suffered damages as a result of representations, their relief lies with the agent who misrepresented to them that a sale had been concluded when it had not. The seller referred Mossdorf to his lawyers so that she gets the correct legal advice on whether there was a deal. Instead she instructs the lawyers to effect transfer of a property without securing the consent of the seller. It was Mossdorf’s duty as agent to ensure that the terms suited her client rather than stitch deal with buyers which did not have the seller’s approval. She could have found out from Grace if the seller would be happy with a sale when she had not found a flat to buy. She did not. She could have explained to the buyers the conditions attaching to her mandate. She did not. She failed to meet the basic requirements for a valid agreement of sale. Therefore no agreement resulted.

Discussing the concept of offer and acceptance in *Orion Investments (Pvt) v Ujamaa Investments (Pvt) Ltd & Others* 1987(1) ZLR 141 (SC) @p 147 DUMBUTSHENA CJ stated:

“In *Robophone Facilities Ltd v Blank* [1966] 3 All ER 128 (CA), at 1311-132C LORD DENNING MR put the general rule in these terms:

‘In order to become binding, someone duly authorised would have to sign it as accepted on behalf of the plaintiffs; and, moreover, their acceptance would have to be communicated to the defendant. The general rule undoubtedly is that, when an offer is made, it is necessary, in order to make a binding contract, not only that it should be accepted, but that the acceptance should be notified: see *Carilli v Carbolic Smoke Ball Co* [1893] 1 QB 256; [1890-94] All ER Rep 127 at 130 per LINDLEY LJ, *Entores Ltd v Miles Far East Corpn* [1955] 2 All ER 493 at 497 per PARKER LJ. Clause 14 does not dispense with the necessity of notification; Signing without notification is not enough. It would be deplorable if it were. The plaintiffs would be able to keep the form in their office unsigned, and then play fast and loose as they pleased. The defendant would not know whether or not there was a contract binding them to supply or him to take. Just as mental acceptance is not enough (see *Fellhouse v Bindley* (1862) 11 CBNS 69), nor is internal acceptance within the plaintiff's office. In this very case we know that the plaintiffs signed it sometime or other (for it was produced at the trial complete with signature), but we do not know when the plaintiffs signed it. No evidence was given on the point. In the circumstances I think that, until the plaintiffs notified the defendant of their acceptance, the agreement was not complete. It was, in the words of the defendant himself, provisional.' "

As a general rule "a contract is not concluded until the offeree has not only decided in his own mind to accept the offer, but has communicated his acceptance to the offeror". See Christie The Law of Contract in South Africa at 65; Wessels Law of Contract in South Africa 2 ed vol I at para 105 and 111-120; Cheshire, Fifoot & Furmston's Law of Contract 11 ed at 47. There must be a consensus between the offeror and the offeree and this consensus cannot be there until the offeror knows that his offer has been accepted. To my mind until the Smiths knew that their offer to buy the house at ZW$2.6 billion had been accepted by the seller, no contract came into existence.

In light of the above finding, the other issues do not arise for determination since in the first place there was no sale.

**Disposition**

In the circumstances, I dismiss the plaintiff’s claim with costs.

*Mawere & Sibanda*, plaintiffs’ legal practitioners
*Kantor & Immerman*, 1st defendant’s legal practitioners
*Gula-Ndebele & Partners*, 2nd defendant’s legal practitioners
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