Saul Murimba and Tendai Flora Murimba v The Laws Organisation (Pvt) Ltd and Others

The plaintiffs responded to an advertisement by the first defendant (an estate agent) for the sale of Stand 780 Greystone Park, Harare. The first defendant was acting as agent for the second defendant as the purported seller. The plaintiffs viewed an unimproved stand at 32 Winchcombe Road and entered into an agreement of sale on 14 September 2009 for US$45,000, which they paid to the first defendant in four instalments. They also paid US$3,518.50 in transfer fees. On 11 December 2009, the plaintiffs discovered from the Surveyor General's Office that Stand 780 actually belonged to Sekai Hove (the true owner), was a developed stand, and had a different physical address from what they had viewed. The second defendant had committed identity fraud by obtaining documents in the name of Sekai Hove and fraudulently misrepresented herself as the owner. The plaintiffs sued all parties involved for US$48,518.50 jointly and severally. The first defendant (estate agent) filed an exception to the declaration.

• Whether the plaintiffs properly pleaded the basis upon which the first defendant (estate agent acting for a disclosed principal) owed them a duty of care not to act negligently
• Whether an agent can be liable for the fraudulent misrepresentations of its principal in the absence of allegations that the agent was aware of or participated in the fraud
• Whether the plaintiffs adequately pleaded particulars of negligence to sustain an actionable claim
• Whether an estate agent has a legal duty to ascertain that its principal is not an imposter when the principal possesses seemingly authentic identity documents
• Whether a claim for restitutio in integrum against an agent is sustainable without alleging inability to recover from the principal/seller
• Whether the first defendant can be held jointly and severally liable with the second defendant in the absence of allegations of collusion or participation in the fraud

The exception was upheld. The plaintiffs were granted leave to amend paragraph 17 of their declaration to remove the offensive paragraphs. The plaintiffs were ordered to pay the costs of the exception.

When claiming damages based on negligence, a plaintiff must plead and prove: (1) the existence of a legal duty of care owed by the defendant to the plaintiff, including the factual basis for such duty; (2) breach of that duty; (3) causation; and (4) patrimonial loss. An agent acting for a disclosed principal owes a contractual duty of care to the principal, not to third parties dealing with the principal, and the plaintiff must plead the specific basis upon which such duty is extended to them. An agent is not liable for the fraudulent misrepresentations of its principal unless the plaintiff alleges and proves that the agent was aware of or participated in the fraud. Negligent conduct alone is not actionable under the lex Aquilia; there must be wrongfulness consisting of a breach of a legal duty. For claims of pure economic loss resulting from negligent omissions, a legal duty not to cause such loss must exist and be pleaded. A claim for restitutio in integrum against a party other than the seller/contracting party requires an allegation that recovery from the seller is impossible or has been unsuccessful. Joint and several liability requires allegations of common purpose or collusion in the wrongdoing.

The court observed that the relationship between an estate agent and its principal may be sui generis and distinguishable from ordinary principal-agent relationships, though this was raised by plaintiff's counsel without supporting authority and was not determinative of the issues. The court noted that selling property one knows does not belong to oneself constitutes fraud (intentional conduct), not negligence, as it involves deliberate conduct to cause prejudice. The court remarked that the plaintiffs appeared to be attempting to "replace the fraudster with the excipient" having realized they could not identify or recover from the actual fraudster. The court expressed sympathy for the plaintiffs' position, noting it would not "put the plaintiffs out of court merely due to bad pleading on the part of its legal practitioners" and acknowledged that the heads of argument filed on behalf of the plaintiffs contained the essentials of negligence that should have been pleaded in the declaration, suggesting there may be an underlying cause of action if properly pleaded.

This case clarifies important principles in Zimbabwean law (applicable to South African jurisprudence given the similar legal systems) regarding: (1) The requirements for pleading negligence claims under the lex Aquilia, particularly the necessity of pleading a duty of care and the factual basis for such duty; (2) The distinction between the duties an agent owes to its principal versus third parties when acting for a disclosed principal; (3) The liability of agents for the fraud of their principals - establishing that an agent is not liable for a principal's fraudulent misrepresentations absent allegations of the agent's knowledge or participation; (4) The limits of a duty to detect fraud, particularly identity fraud involving authentic government-issued documents; (5) The requirements for claiming restitutio in integrum against parties other than the direct contracting party; and (6) The standards for joint and several liability, requiring some degree of collusion or common purpose in wrongdoing. The case also demonstrates judicial discretion in allowing amendment of defective pleadings rather than dismissing claims outright where there may be an underlying cause of action.