IN THE HIGH COURT OF ESWATINI
JUDGMENT
In the matter Between: Case No. 163/18
ALDONA LAPIDOS Applicant
And
ZINHLE MASEKO-MASEKO MDLULI 1st Respondent
MZAMO MAMBA 2nd Respondent
REGISTRAR OF DEEDS 3rd Respondent
Neutral citation : Aldona Lapidos & Zinhle Maseko-Mdluli and Two
Others (163/18) [2019] SZHC 27 ( February 2019)
Coram : M. Dlamini J
Heard : 14th February, 2019
Delivered :
Summary: Applicant alleges that she concluded a deed of sale with the 1st respondent on the basis of misrepresentation to her by 2nd respondent who was 1st respondent’s agent. She seeks for cancellation of the deed of sale and return of E900 000 as purchase price together with accrued interest thereof and a sum of E2150.00 as rates paid by her for the immovable property. 1st respondent is strenuously opposed the application on the main ground that if there were any misrepresentation, they were made by applicant’s agents.
The Parties
[1] The applicant is an adult female of Thembelihle, Mbabane, Hhohho region. She is the purchaser in the deed of sale. The 1st respondent is an adult female of Mbabane, region of Hhohho. She is the seller under the deed of sale. The 2nd respondent is an adult male of Mbabane, region of Hhohho. He is the agent of the 1st respondent. The 3rd respondent is the Registrar of Deeds, whose main function includes registering and deregister immovable properties and maintains the Deeds Registry.
[2] The pleadings also point out as follows:
“The fifth respondent is dully represented by the Attorney General, whose principal place of business is 4th floor Usuthu Link Road Mbabane, District of Hhohho.”
[3] Obvious there is no 4th respondent from the citation of the parties serving before court, let alone the 5th respondent. It appears the pleadings were drafted in haste in this regard. I must point out that by virtue of citing the Registrar of Deeds, the Attorney General ought to have been cited as he is the legal representative of every government office. I make no issue however of his non citation as the Attorney General would have no direct and substantial interest in the matter just like the Registrar of Deeds (3rd respondent) except to abide by the court’s ruling. Respondents did not object to its non joinder.
Applicant’s prayers
[4] The applicant seeks the following as orders:
“1. Cancellation and/or rescission of the Deed of Sale Agreement between the Applicant and First Respondent for the sale of property described as Portion 5 of Lot 2417 Ext. 21 Mbangweni;
2. Directing the 3rd Respondent to expunge and/or set aside the Deed of Transfer 1010/2016 from the Registrar of Deeds;
3. Directing the First Respondent to reimburse the applicant the following sums of money; as against return of the property back to the 1st Respondent;
3.1 E900,000 (nine Hundred Thousand Emalangeni)
back to the Applicant being the purchase price of the property, plus any accrued interest starting from January 2017.
3.2 E2150.00 in rates plus further accruing rates whilst
the property is registered to the Applicant
4. Directing the First Respondent to pay costs of suit at the scale as between attorney and own client.
5. Directing the 2nd and 3rd Respondent to pay costs only in the event of opposition of the relief sought by the Applicant.”
The Parties’ case
Applicant
[5] The applicant’s version is summed up neatly as follows:
“8.2 I entered into the Agreement pursuant to representations made by the Second respondent with regards to the property that was being sold by the First Respondent. The Second respondent represented that the immovable property described as Portion 5 of Lot 2417, Extension 21, Mbangweni (hereinafter referred to as “the property”) consists of two (2) two-bedroom units and it was available for sale;
8.3 I entered into the Sale Agreement on the strength of the representations;
8.4 The aforesaid representations which induced the agreement have turned out to be false.”
Respondent
[6] 2nd respondent answered concisely as follows:
“6.1 I wanted to sell the property in issue and I engaged the services of 2nd Respondent to find a buyer for me.
6.2 I instructed the 2nd Respondent that I wanted E850 000.00 (Eight Hundred and Fifty Thousand Emalangeni) and that his commission would be 5% of the purchase price.
6.3 I further advised the 2nd Respondent that I had a valuation done in 2015 which placed the value of the property at E690 000.00 (Six Hundred and Ninety Thousand Emalangeni) and as such I was of the view that since immovable properties appreciate in value every year, then I was expecting to receive more than the 2015 evaluation. I enclose a copy of the valuation marked “ZM1”.
6.4 The 2nd Respondent told me that he will sell the property for E900 000.00 (Nine Hundred Thousand Emalangeni) so that if a buyer negotiates down the price can then go down to the E850 000.00 (Eight Hundred and Fifty Thousand Emalangeni) I wanted. I agreed to this;
6.5 I showed the 2nd Respondent the property. I never said that units are mine. I only owned one unit and I was selling that one unit.”
[7] She also highlighted:
“6.9 I spoke to the 2nd Respondent about the contents thereof and he advised me as follows:
6.9.1 That after I had given him the mandate to sell the property he went to his offices and met with Sibonile Gama and Colani Mdluli, to whom he shared the information about the property;
6.9.2 That he went to show Sibonile and Colani the property that they found the property locked;
6.9.3 That he only showed them the one unit which I owned and that he never told Sibonile and Colani that I was selling two units;
6.9.4 That David Magagula and Innocent went to view the property the following day and found it locked. David
then called him to tell him that the property was
locked;
6.9.5 That Innocent then went to show the Applicant the
property;
6.9.6 That he never told Sibonile, Colani or David that I was
selling a unit for E450 000.00 (Four Hundred and Fifty Thousand Emalangeni) as alleged.”
[8] She also defended:
“10. I am advised by the 2nd Respondent that the alleged representations attributed to him were not made by him.”
Adjudication
Point in limine
[9] The 1st respondent has raised that the First National Bank who are the financer’s of the property described in the deed of sale ought to have been joined in the application. 1st respondent contends that on applicant’s averment, the property is under mortgage bond and therefore remains the property of the bank until the applicant fully discharges her obligation under the mortgage bond.
[10] I must say that I agree with the 1st respondent that the bank ought to have been joined as a party on the basis mentioned by 1st respondent. However, I must be quick to point out that the non-joinder of the bank as a party does not render the applicant’s application fatal. I say this because the present application’s success depends entirely on what the applicant and the 1st and 2nd respondent’s contentions are. In brief, even if the bank was joined as a party, it would take the view that it would abide by the decision of the court. It would not be expected to join the fray and litigate in the present matter.
[11] Further, no orders are sought or necessary to be taken against or in favour of the bank. It is sufficient that the applicant has joined the Registrar of Deeds who is called upon to deregister the property from the name of the applicant. upon granting of prayer 1, if ever.
[12] Thirdly, 1st respondent has not pointed out to this court how non-joinder of the bank would prejudice her case. Correctly so as the mortgage bond sought to be protected by 1st respondent’s submission involves applicant and the bank. 1st respondent is not a party to it. She cannot therefore protect it by calling for a joinder of the bank.
[13] In the final analysis, the bank has no direct and substantial interest in the present matter to warrant a dismissal of applicant’s application on its non-joinder. 1st respondent has further not alleged any prejudice on her part by the non-joinder of the bank. The point in limine stands to be declined.
Principles on agency
[14] AJ Kerr[1] classifies agents into two categories, viz, empowered and unempowered agents. He articulates:
“an “empowered agent” is one who is entitled, on behalf of his principal, to enter into, vary, or terminate a specified contractual obligation, or a specific contract as a whole, or contracts or contractual obligations of a specified class, or contracts or contractual obligations generally; the obligation or obligations or contracts being those of principal, not those of the agent.”
[15] He clarifies on unempowered agent:
“an “unempowered agent” is one whose service contributes to bringing about an opportunity for the principal to enter into, vary, or terminate a contract or a contractual obligation but who does not himself do so on the principal’s behalf.”
[16] He points out that estate agents, for instance, are unempowered agents. However once given the right to conclude, vary or cancel a contract, they become empowered.
Merits
[17] In the present case, it is common cause that the 1st respondent mandate 2nd respondent to secure a purchaser for her, as alluded by 1st respondent and applicant in the pleadings. It is clear further that 2nd respondent was an unempowered agent on behalf of 1st respondent. The bone of contention as raised by the 1st respondent is that in as much as 2nd respondent was her agent, the misrepresentation was not made by 2nd respondent. It was made by other persons who were not her agents. In support of the position 2nd respondent deposed:
“6.9 I spoke to the 2nd Respondent about the contents thereof and he advised me as follows:
6.9.1 That after I had given him the mandate to sell the property
he went to his offices and met with Sibonile Gama and Colani Mdluli, to whom he shared the information about the property;
6.9.2 That he went to show Sibonile and Colani the property. that they found the property locked;
6.9.3 That he only showed them the one unit which I owned and that he never told Sibonile and Colani that I was selling two units”
6.9.4 That David Magagula and Innocent went to view the property the following day and found it locked. David then called him to tell him that the property was locked;
6.9.5 That Innocent then went to show the Applicant the
property;
6.9.6 That he never told Sibonile, Colani or David that I
was selling a unit for E450 000.00 (Four Hundred and Fifty Thousand Emalangeni) as alleged.”
Issue
[18] Now from the above assertions, could it be said that the 1st respondent’s agent did not make the misrepresentation which applicant relied upon to conclude the contract of sale?
Determination
[19] Vieyra J[2] stated on the subject matter:
“A misrepresentation is an assertion made by one party to the other of some matter or circumstance relating to the proposed contract.”
[20] Vieyra J then refers to Lord Black burula[3] observations:
“If it is proved that the defendant, with a view to induce the plaintiff to enter into a contract made a statement to the plaintiff of such a nature as would be likely to induce a person to enter into a contract, and it is proved that the plaintiff did enter into the contract, it is fair inference of fact that he was induced to do so by the statement.”
[21] In the present can, it is not contentious that the applicant was induced to enter into the contract of sale of the merx. As already alluded, the question is, who induced her? The 1st respondent deposed that having received a correspondence from applicant’s attorney to the effect that the merx delivered did not fit the description of the property sold to her, she contacted her agent. She identified her agent as the 2nd respondent.
[22] It was her deposition that 2nd respondent advised her that a number of other persons were informed by him of the sale of the property. These persons were responsible for showing applicant the property. It was her assertion further that 2nd respondent told her that he had advised third persons that the property had one unit and was for the sum of E900 000.
[23] Counsel for applicant objected to the court considering this portion of 1st respondent’s deposition. He pointed out that in the absence of 2nd respondent confirming the averments by 1st respondent, such remain hearsay and is inadmissible in our law.
[24] It is common cause in these proceedings that the 2nd respondent did not file any pleadings. The assertions by 1st respondent on the conversation between herself 2nd respondent and 3rd parties in the absence of a confirmatory affidavit from 2nd responded becomes hearsay for all intent and purpose. I agree with learned Counsel Z. Hlophe that such evidence must be rejected by the court as inadmissible under our law.
[25] It follows therefore that the attestation by applicant that the Sale Agreement was entered into on the strength of the representations made by an Agent of the Seller, being the Second Respondent. He communicated the representations through an Estate Agency by the name of D.S. Properties (Pty) Ltd. I refer to the Confirmatory Affidavit of Mr. Innocent Ngwenya and that of David Magagula in that regard” stands to be accepted as uncontroverted.
[26] I accept that, as can be gleamed from the applicant’s averment, 2nd respondent did not directly deal with applicant. 2nd respondent solicited the assistance of D.S. Properties (Pty) Ltd to sell the property. I must hasten to point out that there is nothing amiss in terms of our law for an agent delegating its power. An agent can delegate its mandate to another agent. The question however to ask is to who was D.S. Properties (Pty) Ltd responsible at the end of the day. If it was responsible to the principal (1st respondent) then D.S. Properties (Pty) Ltd is referred in our law as substitute agent.
[27] Where however D.S. Properties (Pty) Ltd is responsible to 2nd respondent, D.S. Properties Ltd is a sub-agent. In the present case, it is common cause that the 1st respondent engaged 2nd respondent as an agent. They both agreed on a commission of ---------------- It is common cause that at the conclusion of the contract of sale between applicant and respondent, both 2nd respondent and D.S. Properties shared the commission of ---------------equally. To me D.S. Properties (Pty) Ltd was a sub-agent of 2nd respondent. 1st respondent did not pay any commission above what was initially agreed.
[28] Now the above set of circumstances means that D.S. Properties (Pty) Ltd was accountable to 2nd respondent who was accountable to 1st respondent. 1st respondent is in terms of our law of agency bound by the acts of 2nd respondent as her agent. It is understandable in this regard that 2nd respondent did not file any confirmation affidavit to support the version of 1st respondent. He was well advised in terms of our law that his confirmatory affidavit would not have changed the position of our law that he was bound by the acts of his sub-agent.
[29] This is clearly so in light of the prevailing circumstance in these proceedings that D.S. Properties (Pty) Ltd under David filed a confirmation affidavit in favour of the averment by applicant. At any rate the version of 1st respondent is not different from that of applicant in that both depose to the effect that 2nd respondent approached D.S. Properties and communicated his mandate to it. Worse still, 1st respondent was fully aware of the engagement of D.S. Properties (Pty) Ltd.
[28] 1st respondent also pleaded:
“19.2 I wish to state that the misrepresentations, if they were indeed made, were made by Applicant’s agents and her valuer, not my agent nor myself. I cannot therefore be held responsible for what these people did or said.”
Contents therein are noted. However, I wish to point out that if indeed the alleged representations were made, the same were made by Applicant’s agents, being Innocent Ngwenya and/or David Magagula. Furthermore, the Applicant and her valuer did not do anything to verify the boundaries of the property being sold. Had this been done they would have discovered that Portion 5 of Lot 2417 only has one unit. The other unit is on another plot and I do not know who its owner is, even though the properties share a wall.”
[29] The above is glaringly contrary to her paragraph 6.9 where she attested that 2nd respondent mandated D.S. Properties (Pty) Ltd to sell the property. She further showed this property to D.S. Properties. She does not say that 2nd respondent showed applicant the said property. How then could D.S. Properties (Pty) Ltd be said to be applicant’s agents when it is 1st respondent agent that first approached D.S. Properties (Pty) Ltd? The applicant was taken by D.S. Properties to view the property. D.S. Property came into the picture by invitation of 1st respondent not applicant. It follows that the allegation by 1st respondent that D.S. Properties (Pty) Ltd was applicant’s agent stands to be rejected as it lacks any consistency and evidence supporting the same.
Deed of sale
[30] 1st respondent referred the court to the deed of sale and pointed out that the description of the property there at reflects what was sold. The applicant is bound under the caveat subscript principle. I must point out from the onset that the deed of sale reflects the merx as:
“Certain: Portion 5 of Lot 2417 Ext 21 Mbangweni, in the District of Hhohho Swaziland.”
[31] There is no description of the improvements or number of units in the deed of sale. It is completely silent of the structures on the property. For this reason, applicant cannot be faulted.
Valuation
[32] The 1st respondent further averred that it is the valuator’s report that misled the applicant. The valuator was mandated by applicant and not her. There is a practical fallacy to the assertion by 1st respondent, unfortunately. The valuator was sourced because applicant needed her bank to finance the transaction. She had already formed the intention to enter into the contract based on the misrepresentation at the instance of 1st respondent. If applicant had cash at hand the valuation report would have been unnecessary. Lastly, the valuator was not a surveyor. It was reasonable for him to believe the statements that the property had two units.
[33] Further 1st respondent does not assert that in such transaction applicant was duly bound to scrutinize the valuation report. This is because the valuation report was never intended to. As correctly pointed out by Mr. Z. Hlophe, the valuation report is evidence of how far the misrepresentation was carried. It did not only end with applicant but extended to the valuator as well. 1st respondent does not assert that applicant was influenced by the valuation report to enter into the contract of sale. She does not dispute applicant’s averments that it is 1st respondent misrepresentation that caused her to conclude the deed of sale.
Rentals collected
[34] 1st respondent pleaded further that should the court be inclined to grant the applicant’s prayers, it should order a deduction of rentals collected. Applicant refuted any rentals collected at her instance. This matter is contentions. 1st respondent did not file a counter-claim for the rentals collected by applicant. It was not necessary for this court therefore to refer this portion to trial. The court cannot further decide on it in the absence of a counter-claim.
Time to settle
[35] The 1st respondent has urged the court to allow her time to dispose of the property in order to comply with restitution integram. This is a fair and just appeal. During the submission her Counsel who doubles as conveyancer indicated to court that property below E1 million is expeditiously disposed off. He indicated a period of two weeks.
[36] I am inclined to grant 1st respondent period of two months to restore applicant to her previous position. In the final analysis, I enter the following orders:
36 (a) It was contended on behalf of 1st respondent that applicant ought to have accepted rentals and thereby mitigate her loses. Mr. Z. Hlophe correctly pointed out that the principle calling upon a party to mitigate it’s loses in an on delictual claim. I must emphasise that there are different requirements for a party claiming restitution owing to misrepresentation which led to a contract and one claiming compensation due to misstatement. Their Lordship’s Administrateur Natal v Trust Bank Van Africa BPK[4] drew the distinction with clarity as follows:
“In a contractual context ‘misrepresentation’ has a somewhat legal – legal technical meaning. It must be e.g. a representation of an existing fact and therefore does not normally embrace the expression of an opinion or the giving of advice. This requirement is not necessarily applicable to a ‘negligent misrepresentation.”
36 (b) In other words, a party claiming rescission of a contract and thereby restitution in integrum must prove the misrepresentation of a fact upon which he acted upon. However, one claiming compensation or pecuniary loss under the aquilian action must adduce evidence of negligent misstatement. This is where the requirements of duty of care, unlawfulness and culpa arise.
___________________________
M. DLAMINI J
For the Applicant : Z. B. Hlophe of Magagula and Hlophe Attorneys
For the Respondent : N. Manzini of C.J. Litter and Company
[1] The law of Agency 3rd Ed page 3-4
[2] In Pretorius and Another v Natal South Sea Investment Trust Ltd 1965 (3) SA 410 at 415
[3] Smith v Chadwick and Others 9A.C 187 at 196, see also supra
[4] 1979 (3) South Africa 824 at 824 - 5
