Guest and Turner Real Estates (Pvt) Ltd v Hazel Stokes

In 2006 or early 2007, the appellant (Guest and Turner Real Estates) entered into a property management agreement with the respondent (Hazel Stokes) to manage two properties: No. 6 Roseberry Place Avondale, Harare and No. 103 Newbury Court, Baines Avenue, Harare. The appellant's mandate included ensuring properties were kept in good condition, ensuring rentals were paid on time, and ensuring all utility bills and levies were paid on time. The appellant secured tenants for both properties. Later, property No. 6 Roseberry Place was sold, and appellant deducted levies of US$1,862.00 and ZESA bills of US$692.00 from the purchase price, which the respondent contended should have been paid by the tenant. Property No. 103 Newbury Court was damaged by tenants, and the respondent alleged the appellant failed to conduct periodic inspections to ensure damages were attended to. The respondent sued the appellant for US$1,862.00, US$692.00 and repair costs as damages, alleging negligence or incompetence in performing its agency duties. The Magistrate's Court found for the respondent, and the appellant appealed to the High Court.

• Whether the appellant, as property management agent, was liable for the tenant's failure to pay levies and electricity charges
• Whether the appellant was liable for damage caused to the respondent's property by tenants
• Whether the appellant breached its contract with the respondent
• Whether the appellant had a duty of care to ensure tenants paid levies and electricity charges
• Whether the appellant had a duty of care to prevent tenants from damaging the respondent's property
• Whether the requirements for imposing a duty of care on an agent and holding an agent liable for breach were satisfied
• Whether the trial magistrate erred in his findings of fact and application of the law

The appeal was dismissed with costs.

An agent who undertakes to manage property impliedly warrants that he possesses the requisite knowledge, skill and qualifications, and must carry out his mandate with reasonable care and diligence. Where an agent negligently or incompetently fails to perform his obligations under the agency agreement, and thereby causes loss to his principal, he is liable in damages for the losses directly flowing from that breach. The measure of damages is the loss the principal would not have suffered had the agent properly performed his mandate. An appellate court will not interfere with a trial court's findings of fact unless satisfied that, having regard to the evidence, the finding is so outrageous in its defiance of logic that no sensible person could have arrived at such a conclusion (applying Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S)).

The court observed that the appellant's case was significantly handicapped by calling a witness who was not employed by the appellant during the relevant period and who admitted he knew nothing about the specific terms of the contract. The court noted that the witness could only testify on general terms of property management rather than the specific performance of the appellant during the period in question. The court also noted that whether the agreement was in writing or oral was unclear, with the respondent believing it was written (with all copies retained by appellant) while appellant's witness said it was verbal. The court further observed that had the witness tendered documents relevant to the contract, he might have been of some relevance despite not being party to the original agreement.

This case reinforces important principles in Zimbabwean law (applicable to South African law given the shared legal heritage and citation of South African authorities) regarding: (1) the obligations of agents, particularly property management agents, to act with reasonable care, skill and diligence in performing their mandate; (2) the liability of agents for breach of contract when they fail to properly perform their duties; (3) the measure of damages for breach of agency agreements, being the losses directly flowing from the agent's failure to perform; (4) the limited scope for appellate interference with trial courts' findings of fact and credibility assessments; and (5) the evidential burden on an agent/defendant to rebut allegations of negligence or incompetence in performing agency duties. The case emphasizes that property management agents impliedly warrant they possess the requisite knowledge, skill and qualifications, and will be held liable for losses caused by their failure to exercise proper care.