Corisco Design Team (Codet) v Zimsun Leisure (Private) Limited

In 2006, the President of Equatorial Guinea visited Zimbabwe and was impressed by the Elephant Hills Hotel in Victoria Falls, owned by the respondent. He approached the respondent to build and operate a similar hotel on Corisco Island in Equatorial Guinea. The respondent hired a team of experts called Corisco Design Team (Codet), described as "a company to be formed," to provide architectural and other professional services for the project. The contract was expressly subject to approval and payment by the government of Equatorial Guinea. Two written agreements were drafted but never signed by the respondent. The government of Equatorial Guinea rejected the project in 2010 as too expensive (costing $300 million USD). The appellant sued the respondent for $16,175,740.72 in professional fees. The respondent denied liability, stating the condition precedent (government approval) was never fulfilled. At the close of the appellant's case, the respondent applied for absolution from the instance, which was granted by the High Court. The court also ordered costs at legal practitioner and client scale to be borne personally by Ozywell Manyara, who had taken over representation of the appellant after Benox Mugabe advised against pursuing the claim.

• Whether the court a quo erred in granting absolution from the instance
• Whether an unincorporated association or company yet to be formed has legal standing to sue
• Whether the appellant proved the existence of an oral contract with the respondent
• Whether the appellant could enforce a contract to which it was not privy (doctrine of privity of contract)
• Whether the condition precedent (approval by the government of Equatorial Guinea) was fulfilled
• Whether the court a quo erred in ordering costs at legal practitioner and client scale to be borne personally by Ozywell Manyara

The appeal was dismissed with costs at the legal practitioner and client scale to be borne personally by Ozywell Manyara. The High Court's decision granting absolution from the instance and its costs order were upheld.

The binding legal principles established are: (1) A contract subject to a condition precedent that has not been fulfilled does not create enforceable rights or obligations; (2) The doctrine of privity of contract prevents third parties from enforcing contracts to which they are not parties, even if they would benefit from performance; (3) A party alleging the existence of an oral contract bears the onus of proving it on a balance of probabilities; (4) Unsigned written agreements that make no reference to an alleged oral contract do not constitute proof of that oral agreement; (5) For absolution from the instance to be refused, there must be evidence upon which a reasonable person might (not should) find for the plaintiff; (6) A company yet to be formed lacks the legal capacity to sue in its own name for contractual obligations allegedly incurred before its formation; (7) Courts may exercise discretion to award costs personally against a representative who pursues litigation knowing it is without merit.

The Court made several non-binding observations: (1) Although counsel for the appellant submitted that the appellant was an unincorporated association that could sue under rules 7 and 8 of the High Court Rules 1971, this was not supported by evidence - the evidence established the appellant was a company yet to be formed; (2) The Court noted that despite Mr. Uriri's argument about the principle of stipulatio alteri (contracting for the benefit of a third party), this did not assist the appellant's case; (3) The Court observed that disagreements within the appellant's own camp about entitlement to claim were evidenced by minutes showing Benox Mugabe's clear position that no payment was due without government approval; (4) The Court commented that the appellant pursued the claim "against sound advice" from its original representative; (5) The Court noted that Ozywell Manyara "took a risk" in leading the litigation despite his predecessor's advice against it.

This case is significant in Zimbabwean contract law for: (1) Reaffirming the doctrine of privity of contract - that only parties to a contract can enforce it; (2) Clarifying the legal effect of conditions precedent - that an agreement subject to an unfulfilled condition precedent does not create enforceable rights; (3) Establishing the evidentiary burden for proving oral contracts - that unsigned written documents cannot prove an oral agreement without additional evidence; (4) Demonstrating the test for absolution from the instance; (5) Illustrating the court's discretion to award costs personally against representatives who pursue litigation despite knowing it is without merit; (6) Addressing the limited legal capacity of unincorporated associations and companies yet to be formed to sue in their own name. The case serves as a warning against pursuing hopeless litigation and emphasizes the importance of ensuring conditions precedent are satisfied before claiming contractual rights.