City of Harare v Norton Town Council

The City of Harare (plaintiff) sued Norton Town Council (defendant) for payment of $541,217.84 (later amended to $528,614.85) being outstanding balance as at 2 December 2013 for the supply of treated water. The plaintiff supplied water from Morton Jaffrey to the defendant through a meter, and issued monthly invoices for water consumed for the period July 2013 to December 2013. The defendant acknowledged receiving water but raised several defences: (1) that it was an agent of the plaintiff responsible for onward supply to Norton residents and payment was only due upon collection from residents; (2) that the plaintiff breached the agreement by failing to supply agreed quantities and maintain water pipes; (3) that bills were estimated not actual; (4) that government write-off policies and court judgments against water cut-offs affected its capacity to collect. A previous similar dispute between the parties had been settled by deed of settlement without raising the agency defence. The parties differed on the amount to be written off pursuant to a 2013 Ministerial directive requiring write-offs of debts as at 30 June 2013.

• Whether the defendant was liable to the plaintiff for the amount claimed for water supplied
• Whether the bills presented represented actual or estimated readings
• Whether an agency relationship existed between the plaintiff and defendant
• Whether the plaintiff was responsible for maintenance of water pipes from Morton Jaffrey Plant to defendant's reservoirs
• Whether payment by defendant was conditional on collection from its customers
• Whether it was impossible for the defendant to perform under the agreement
• The correct calculation of amounts written off pursuant to the Ministerial directive of 30 June 2013

The defendant was ordered to pay the plaintiff $437,363.43 together with interest at the prescribed rate from 30 January 2014 to date of full payment. The defendant was ordered to pay costs of suit.

An agency relationship cannot be established without proof of an agency contract, either written or oral, whereby the principal authorizes the agent to act on its behalf to create legal relations with third parties. The burden of proving agency rests on the party asserting it. Mere assistance in collections does not create an agency relationship. Where parties have previously settled similar disputes without raising a particular defence, and the party cannot prove the factual basis for that defence, a court may infer the defence is raised to delay performance. In interpreting government directives for debt write-offs, courts will apply the plain meaning of the specified date - debts "as at 30 June 2013" include debts on that date, not only up to 29 June 2013. A bulk water customer of a local authority is liable to pay for water supplied as a debtor-creditor relationship, regardless of whether the customer has collected payment from its own end-users.

The court observed that the agency defence appeared to have been raised simply to delay payment, given that it was not raised in a previous similar matter between the same parties. The court noted that plaintiff's witnesses and defendant's witness testified to occasions where plaintiff assisted defendant in revenue collections from Norton residents, but found this did not establish agency. The court commented on difficulties in collection from residents ahead of elections due to expectations of write-offs, but this did not affect the defendant's liability to the plaintiff.

This case clarifies the legal requirements for establishing an agency relationship in Zimbabwean law, particularly in the context of local government water supply arrangements. It confirms that agency cannot be claimed without proof of an agency contract or agreement conferring rights on the agent to act on the principal's behalf. The case also demonstrates the principle that parties cannot belatedly raise defences not raised in previous similar disputes between them. It provides guidance on the interpretation of Ministerial directives for debt write-offs, emphasizing that courts will apply the plain meaning of dates specified in such directives. The case reinforces that bulk water customers of local authorities are liable for payment as customers, not agents, unless a clear agency relationship is proven.