Fidelis Munyoro-Chief Court Reporter
AT least 163 prospective home seekers breathed a sigh of relief after the High Court declared valid residential stands agreements of sale signed between them and the late national hero Kumbirai Kangai’s company, Luna Estate.
The home-seekers had approached the High Court to declare the agreements they signed with Luna Estate represented by Devine Aid Trust Company (Datco) valid.
Luna Estate is the registered owner of a piece of land under Zvimba district council, measuring 200 hectares.
Luna Estate and Datco listed as respondents in the matter entered into a land development agreement for the latter to develop the property into residential and business stands.
It was also agreed that Datco would sell the subdivided stands on behalf of Luna Estate. And the applicants were some of the people who bought the stands from Luna Estate through Datco.
Agreements of sale were signed between the individual applicants and Datco as agent of Luna Estate. However, the respondents’ contractual relationship went sour leading to an arbitration, which among other things confirmed the cancellation of the memorandum agreement for land development between the two as at July 2017.
Despite the termination of the development agreement, Datco went ahead to sign some agreements of sale purportedly as agent of Luna Estate with some 21 of the applicants.
Luna Estate conceded to the order sought by the applicants save for the 21 who signed their agreements after Datco mandate was terminated on July 20, 2017.
But the 21 maintained that Luna Estate was bound by the agreements they signed with Datco on the basis of ostensible authority.
However, Luna Estate argued could not be sustained in the face of fraudulent acts by Datco. In this case two issues came out for determination, whether Luna Estate could be held liable on the basis of ostensible authority and secondly whether applicants in the event of success should be awarded costs at legal practitioner and client scale.
But in its ruling the High Court declared that the agreements of sale which were entered into between the applicants and Luna Estate represented by Datco valid.
Justice Jacob Manzunzu said Luna Estate did not make a public warning to the world at large that it had terminated its contract with Datco and could not hide behind a claim for fraud to the prejudice of the applicants.
He also queried how the 21 applicants were expected to know that Luna Estate had terminated its authority with Datco.
Luna Estate’s defence that the Datco was committing fraud hence the applicants could not rely on ostensible authority, Justice Manzunzu said was untenable.
“The first respondent had a duty to warn members of the public about the severance of its relationship with the second respondent,” he said.
“The first respondent (Luna Estate) should have realised that the acts of by Datco after 20 July would bind it unless the public were warned. This is a matter where ostensible authority must be upheld.”
On costs of suit, Justice Manzunzu frowned on Luna Estate’s big brother attitude for using its upper hand position in the agreements to coerce the applicants to resile from their existing agreements and create new agreements with new terms to its advantage.
“This is a proper case where a successful party was unnecessarily put out of pocket by this litigation.
‘‘It is just and proper that the losing party must compensate,” said Justice Manzunzu slapping Luna Estate with costs on a legal practitioner and client scale.