VOTETI TRADING (PVT) LTD v HANCOCK & ANOR 2012 (2) ZLR 182 (H)

Flynote

Agency — estate agent — position of — broker between the parties to the sale of a property — any specific agency vested in an estate agent must be clearly established

Contract — estoppel — reliance upon terms of a written agreement — conduct of seller in accepting payment inconsistent with written agreement — reliance on such conduct by purchaser — potential prejudice to purchaser — seller estopped from insisting upon compliance with terms of agreement of sale to prejudice of purchaser

Contract — interpretation — reference to warranties, representations and conditions made by the parties before or at time of agreement — norelevance to any warranty representation or condition made thereafter

Estate agent — authority — acceptance of payment on behalf of seller — when estate agent so authorised — authority may be actual or implied — amendment of agreement of sale — estate agent having no authority to amend agreement unless instructed by both parties

Headnote

In the absence of specific instructions, an estate agent stands in the unique position of being a broker between the parties rather than as an agent of either. Thus, any specific agency vested in an estate agent must be clearly established from the conduct of the parties, the relevant documentary evidence and the circumstances of the case. As a general rule, in the absence of agreement, an estate agent with authority to sell has no residual or concomitant authority to accept payment of the purchase price on behalf of the seller. Nevertheless, there will be instances when the estate agent is in fact authorised to receive payment and to receive it in a particular form. It is necessary to consider the general principles of contract to determine whether an agent has authority to perform a particular act. Thus, actual authority may be conferred on an agent expressly, impliedly or tacitly. Implied authority may be evidenced by a single act or by a course of dealing. On a similar but somewhat different footing, apparent or ostensible authority to receive payment can be inferred if the seller, by words or conduct, holds out his agent as having such authority.

In a contract of sale, the time and mode of payment stipulated therein are usually of the essence and must be exactly complied with, failing which the seller is entitled to cancel the contract. Furthermore, an estate agent does not have the power or authority to amend an agreement concluded by the prospective seller and purchaser unless instructed to do so by the parties.

In terms of a written agreement of sale entered into by the parties in August 2009, the plaintiff purchased a property in Harare from the first defendant. The plaintiff alleged that the purchase price had been paid in full and sought transfer of the property into his name, alternatively, repayment of the purchase price. The defendant, however, denied having received payment in the manner agreed and counterclaimed for an order declaring the agreement to have been validly cancelled and for an order for the eviction of the plaintiff. The court found that the plaintiff made two payments in respect of the purchase price, totalling just under half the price. The first payment was paid into the estate agent's bank account, and the second into the first defendant's lawyers' trust account. Both such payments were made to the satisfaction of the first defendant. Excluding the estate agent's commission which the plaintiff also paid, the outstanding balance was $65 000. It was this sum which was the subject of a major point of dispute between the parties. It was the plaintiff's case that, as instructed by the estate agent, it had paid the outstanding balance to him, who, the plaintiff alleged, was the first defendant's agent. The first defendant, on the other hand, while conceding that the plaintiff had paid in entirety the full purchase price, denied that the estate agent was her agent for the purpose of accepting payment thereof. For her contention that payment had not been made in the manner agreed, she relied upon the written agreement, which provided for payment into her bank account, less those commission which were to be paid to the estate agent. She also relied upon a clause of the agreement which recorded that the " ... agreement of sale constitutes the entire contract between the seller and the purchaser and no warranties, representations or conditions.... not recorded... shall be binding on... the parties...". No agreement authorizing payment to the estate agent had been made. However, the evidence disclosed that the person who had signed the agreement on her behalf, gave vacant possession of the property to the plaintiff. This was recorded in a memorandum of understanding, upon her behalf, with the estate agent. Also recorded therein was the fact that the estate agent had been paid the full purchase price by the plaintiff. Details were set out in the memorandum of the arrangements for weekly payments to be made by the estate agent into the first defendant's lawyers' trust account. The estate agent did not make these payments and it was this failure to do so which motivated the first defendant into seeking the cancellation of the agreement of sale.

Held, that, on the facts, the estate agent was the agent of the first defendant for the purpose of accepting payment of the purchase price.

Held, further, that the clause of the written agreement of sale did not assist the first defendant in seeking to cancel it. That clause was concerned only with "warranties, representations or conditions" made by the parties before or at the time the agreement was concluded and not, as in casu, made thereafter.

Held, further, that in any event, on the facts of the case, the first defendant and her agent were estopped from insisting upon exact compliance in terms of the written agreement of sale. The first two payments had been paid to the first defendant to her satisfaction through the estate agent and thereafter, through her agent, she had allowed the plaintiff to take occupation of the property. Having paid the full purchase price, the plaintiff would be greatly prejudiced if it had to forfeit the balance thereof and then to relinquish the property.

Held, further, that the plaintiff was entitled to the relief it sought. It was entitled to take transfer of the property, alternatively to the repayment of the purchase price.