Design Cargo Logistics (Pvt) Ltd and Julious Bvochora v La Cargo Logistics (Private) Limited and Collin Mutevhani

In April 2022, the first respondent (plaintiff in the court a quo) engaged the appellants (first and second defendants below) to transport a Ministry of Defence consignment consisting of three excavators from Durban to Zimbabwe at a total cost of USD 45,000.00. The first respondent paid the full amount upfront via FNB transfer. After payment, the second respondent (third defendant below) was introduced and extorted an additional USD 5,000.00 for the first delivery, allegedly due to increased distance. The third excavator was not delivered, purportedly due to issues with a subcontractor's deceased estate. The first respondent's investigations revealed that the appellants had failed to pay the actual third-party transporter. To secure release of the final machine and protect his reputation with the Ministry of Defence, the first respondent paid an additional ZAR 380,000.00 to the third-party transporter. The appellants claimed they were merely intermediaries who introduced the parties and denied liability, arguing the contractual relationship was between the first and second respondents. The appellants contended that all payments were made to the South African-based second respondent and that an acknowledgment of debt from the second respondent confirmed the direct contractual relationship between those parties.

• Whether the appellants were principals to the contract or merely intermediaries/facilitators
• Whether the doctrine of apparent authority applied to bind the appellants as principals to the contract
• Whether the appellants were liable for unjust enrichment for the USD 5,000.00 additional payment
• Whether the appellants were liable for breach of contract damages of ZAR 380,000.00
• Whether the acknowledgment of debt from the second respondent constituted novation relieving the appellants of liability
• Whether the court a quo properly exercised its discretion in awarding costs on a legal practitioner-client (punitive) scale

The appeal was dismissed with costs.

Where a party's external manifestations—including pre-contractual negotiations, payment instructions, continuous communication, and references to subcontractors as "our guy"—objectively indicate they are acting as principals to a contract, they cannot later escape liability by claiming they were merely intermediaries or facilitators. The doctrine of apparent authority binds parties who hold themselves out as principals, regardless of their subjective internal understanding of the arrangement. A contractor cannot unilaterally outsource legal accountability to a third party simply because they facilitated an introduction after consideration has been paid. An acknowledgment of debt obtained from a third party does not constitute novation relieving the original contracting parties of liability unless there is explicit absolution of those original parties; such acknowledgment is merely a collateral attempt to mitigate losses. Parties who receive payment under a contract and fail to discharge their obligations to third-party service providers, thereby forcing the other contracting party to make additional payments to secure performance, are liable for unjust enrichment.

The court observed that the appellants' attempt to recharacterize their role appeared to be strategic re-labeling contradicting functional reality. The court noted that the appellants' silence at key moments—when the first respondent raised concerns about additional charges, faced threats from the Ministry of Defence, and was forced to conduct independent investigations—demonstrated conduct that went beyond mere negligence and amounted to bad faith. The court commented that costs on a legal practitioner-client scale are exceptional and reserved for conduct that offends the litigation process, citing Herbstein and Van Winsen's treatise. The court referenced the principle from In re: Alluvial Creek Ltd that punitive costs may be awarded not only for malice or misleading the court, but also where proceedings are "vexatious" in putting the other side to unnecessary trouble and expense they ought not to bear, even if entered into with upright purpose. The court expressed the view that the appellants' defense was a "sham designed to avoid clear liability" constituting mala fides, and that they had "concocted an unbelievable story to frustrate the first respondent further."

This case is significant in Zimbabwean contract law for its application of the doctrine of apparent authority and the "external manifestations" test to determine contractual privity. It establishes that parties cannot escape contractual liability by retrospectively recharacterizing their role as intermediaries when their conduct objectively manifested that they were principals. The case reinforces that contractors cannot unilaterally outsource legal accountability to third parties after consideration has been paid. It also provides guidance on when punitive costs are appropriate, confirming that mala fides defenses designed to avoid clear liability, combined with conduct that forces the other party to incur unnecessary trouble and expense, warrant costs on a legal practitioner-client scale. The judgment emphasizes that introducing a third party and obtaining an acknowledgment of debt does not automatically constitute novation unless there is explicit absolution of the original contracting parties.