Court name
Supreme Court of Zimbabwe
Case number
SC 41 of 2005
Civil Appeal 167 of 2003

W G Engineering (Pvt) Ltd. t/a Silver Cloud Motors v Permasan (Pvt) Ltd. t/a Ryans Transport (67/03) (SC 41 of 2005, Civil Appeal 167 of 2003) [2005] ZWSC 41 (02 October 2005);

Law report citations
Media neutral citation
[2005] ZWSC 41
















DISTRIBUTABLE
(37)


Judgment
No. SC 41/05


Civil
Appeal No. 167/03











W.G.
ENGINEERING (PRIVATE) LIMITED t/a SILVER CLOUD
MOTORS v





PERMASAN
(PRIVATE) LIMITED t/a RYANS TRANSPORT








SUPREME
COURT OF ZIMBABWE


SANDURA JA,
ZIYAMBI JA & GWAUNZA JA


HARARE,
JULY 5 & October 3, 2005








M
Gijima
, for the
appellant





M
E Motsi
, for the
respondent








ZIYAMBI
JA: The main issue in this appeal is whether it was proved in the
High Court that an agreement of agency was concluded
between the
appellant and the respondent.






In
the High Court the appellant sought an order compelling the
respondent to transfer to it the registration of a horse,
registration
number 602-460 X, a trailer, registration number 561-766
Q and a pup trailer, registration number 599-656 C and to physically
hand
over the vehicles to it.






In support of its application,
the appellant averred that it had concluded an agency agreement with
the respondent in terms of which
the appellant was to secure a buyer
for the respondent’s business as a going concern. In return, the
appellant would earn a commission
in the sum of US$25 000 or
alternatively, two horses, two trailers and a pup trailer. The
appellant averred that it had secured
such a buyer and accordingly
sought an order of specific performance against the respondent.







The alleged agency agreement was
denied by the respondent through its Managing Director Roland Neville
Creigh Smith (“Smith”).
Smith averred that he, on behalf of the
respondent, employed a consultant by the name of Trevor Batezat
(“Batezat”) to identify
potential buyers for the respondent’s
business. Batezat identified Specialised Motors (Private) Limited
as a potential purchaser.
The Operations Manager of Specialised
Motors was Widreck Gore the Managing Director of the appellant. It
was agreed that upon successful
conclusion of the sale of the
company, Batezat was to earn a commission of three horses and three
trailers. The sale was to be
finalised by 5 September 2002 but this
did not happen.







Meanwhile Batezat, unknown to the
respondent and before the sale was finalised, registered two trailers
into the name of a company
wholly owned by him called Shoreline
Investments and one horse and trailer in the name of the appellant.







The learned judge in the court a
quo
found that on the
appellant’s papers an agency agreement had not been established.
She took cognisance of the fact that the appellant
did not, in its
founding affidavit, allege the terms of the agency agreement between
it and the respondent apart from the amount
of the alleged
commission. In this regard the learned judge said:-





“It
is
not averred what the mandate of the applicant was. Was it merely
(to) act as an introducer of a purchaser or was it to introduce
a
purchaser who would conclude a binding sale agreement with the
respondent? These questions remain unanswered after reading the
applicant’s founding affidavit, by which its application will stand
or fall.





Further,
while it has been alleged in the papers that the applicant was
mandated to find a purchaser for the respondent’s business
as a
going concern, the agreement that allegedly resulted from the
introduction allegedly made by the applicant is in respect of
the
sale of Creigh-Smith’s shareholding in the respondent. No attempt
has been made to show that the terms of the agency agreement
covered
this transaction as well.





Further,
it is not clear on the papers whether the applicant would become
entitled to the commission merely upon introducing an interested
buyer or upon the buyer actually purchasing and paying for the
business of the respondent. It is noteworthy that the applicant
claims that it waited until the agreement between the respondent and
Specialised Motors (Private) Limited had been signed and a sum
of $50
000 000,00 deposited into the account of one M J Creigh-Smith before
it procured the registration of one horse and trailer
into its name.
This tends to suggest that it was the applicant’s understanding
that its mandate would be complete upon the introduced
purchaser
paying for the business sold. However, because the applicant has
chosen to proceed by way of application it is my view
that, in the
absence of clear evidence on the affidavits as to the exact terms and
conditions upon which the alleged agency was agreed
and fulfilled,
there is no basis upon which I can hold that there was a binding
agency agreement between the applicant and the respondent
as
alleged”.








It
was however contended on behalf of the appellant that proof of the
contract of agency is to be found in the following paragraphs
of the
appellant’s founding affidavit:-





“Trevor
Batezat, the General Manager for the respondent conducted the sale to
Paradise Holdings including the change of registration
from Permasan
Private Limited to Paradise Holdings.





It
was while I was at respondent’s premises that Trevor Batezat
advised me that respondent was looking for someone to secure a buyer,
who would buy respondent as a going concern, rather than as
individual assets, Trevor Batezat advised that respondent’s major
shareholder
Roland Neville Creigh-Smith had tried to sell respondent
as a going concern since 2001 to no avail.





Trevor
Batezat also advised that the person who would secure a buyer for
respondent would be given a commission of US25 000,00.





After
respondents’ dealings with Paradise Holdings were finished,
applicant through me then advised Trevor Batezat that applicant
could
secure a buyer for respondent and was interested in entering into the
agreement wherein applicant would then get the commission
after
having secured a buyer.





Respondent’s
General Manager then called Roland Neville Creigh-Smith on his mobile
South African number, being 002782775329 and
advised said Roland
Neville Creigh-Smith that applicant had accepted the offer that, upon
securing a buyer who would buy respondent
as a going concern, then
applicant would get a commission, of US 25 000,00 or two horses and
two trailers and a pup trailer …”








What
does the term “secure a buyer” mean? As the learned judge
found, the expression does not clarify whether the buyer was
merely
to be introduced to the respondent or whether the mandate was only
completed when the sale was successfully concluded. Indeed
the
probabilities favour the latter interpretation as the respondent was
hardly likely to part with US 25 000 or 3 horses and 3 trailers
if
the sale was not successfully concluded. See
De
Villiers and Macintosh: The Law of Agency in South Africa, Third
Edition by S.M. Silke

at p 372 where the authors state:-







“The
contract created when a property is placed in the hands of an agent
on commission terms by an owner desirous of disposing thereof
is, in
the absence of specific provisions, not a contract of employment in
the ordinary meaning of the term; and consists merely
of promises
binding on the principal to pay a sum of money upon the happening of
a specified event which involves the rendering of
some service by the
agent.

The agent’s right to commission depends, in the first instance,
therefore, upon the ascertainment of this specified event.






There
are two particular classes into which promises of this kind may fall.
The first is where the commission is promised if the
agent succeeds
in introducing to the principal a person who makes an adequate offer.
The second is where the agent is promised
his commission only upon
completion of the transaction (ie the conclusion of the sale) which
he is endeavouring to bring about between
the offeror and the
principal.





While
promises of the first class, namely, to pay remuneration merely on
the introduction of an offer, are not impossible, the general
balance
of probability is against an arrangement of this character; and such
a construction of the contract would require clear and
unequivocal
language. Normally the principal has in contemplation an actual
sale as the event upon which his promise to pay commission
must be
fulfilled and the agent realizes this”.







From
what has been said above it is clear that there was insufficient
evidence, before the court
a
quo
, to establish the
terms of the alleged agency agreement.






It was also contended on behalf
of the appellant that it had carried out its mandate in terms of the
alleged agency agreement.
But what was the mandate? Counsel for
the appellant does not tell us. If the mandate was merely to
introduce the respondent
to a prospective purchaser as the appellant
appears to suggest in his papers filed of record, was that fact
established on the evidence?
The respondent denied that the
appellant introduced Specialised Motors to it. The learned judge
found that this raised a factual
conflict which could not be resolved
in the appellant’s favour on the papers before her.





The
learned judge’s approach was in my view correct. The conflict of
fact could not be resolved on the papers and oral evidence
was
necessary. The appellant adopted the wrong procedure. In this
regard the learned judge remarked:-







“In
my view, there are other conflicts of facts in the applicant’s
application. The applicant must have been aware that such conflicts
would arise as there had been a spate of litigation between the
parties over the same vehicles before this application was filed.

To have proceeded to file a court application in these circumstances
was perilous. See Masukusa
v National Foods Limited and Anor

1983(1) ZLR 232 (H). In the premises, I would dismiss the
applicant’s application for specific performance of the alleged
agency
agreement on this ground. The applicant used the wrong
procedure to procure its remedy”.








The
learned judge having found that there was no agency agreement between
the appellant and the respondent dismissed, correctly in
my view, the
claim by the appellant that it had acquired ownership of the
vehicles, the subject of this application. The appellant,
however,
contended that the fact that for two months the vehicles were parked
on its premises to the knowledge of the respondent
and sporting its
logo and colours was, on its own, indicative of delivery of the same
having been made to the appellant.





It
is to be noted that the appellant did not allege that there was
delivery to it of the vehicles. In this connection the learned
judge said:-





“The
applicant does not allege in its application that there was delivery
of the vehicles to it. The applicant took possession of
the
vehicles and had them registered in its name, purportedly in terms of
the disputed agreement of agency. The taking of possession
of the
vehicles in such circumstances amounts to a unilateral act of
acquiring possession that would not transfer ownership at law.
Even
if there was an agreement of agency between the parties, for the
possession of the vehicles by the applicant to divest ownership
from
the respondent, the respondent must have delivered the vehicles to
the applicant with the intention of vesting ownership of
those
vehicles in the applicant. This is not alleged in the application
and on that basis alone, I would hold that ownership of
the vehicles
still vests in the respondent”.








As
the learned judge correctly stated:-






“… a
unilateral act of taking possession of property is not sufficient to
acquire ownership in that property at law. The cooperation
of the
predecessor in title together with the requisite mental attitude on
the part of both is required. The law requires that
the person
giving up possession does so with the intention of divesting himself
or herself of ownership in that property. This
is what is meant by
delivery at law. (See
Marcus
v Stamper & Zoutendijk

1910 AD 58)”.













Accordingly there is no merit in
the appeal and it is hereby dismissed with costs.











SANDURA  JA: I
agree.
















GWAUNZA JA: I agree.












Mbidzo, Muchadehama and
Makoni
, appellant's
legal practitioners


Mabulala
& Motsi
,
respondent's legal practitioners