African Trading Limited v M.M Integrated Steel Mills Limited (APPEAL NO.48/2023) [2025] ZMCA 42 (26 February 2025)

IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO.48/2023 HOLDEN AT NDOLA ( Civil Jurisdiction) AND M. M. INTEGRATED STEEL MILLS LIMITED RESPONDENT Coram: Chashi, Makungu and Banda-Bobo, JJA On the 19th and 26th February, 2025 For the Appellant: Mr. J. Kayuni from John Kayuni & Partners For the Respondent: Mr. W. Muhanga of Messrs Willis, Clement & Partners JUDGMENT MAKUNGU JA, delivered the judgment of the Court. Cases referred to: 1. Wisdom Chiyala, Busiku Chiyala v. Joseph Kamanga, SCZ Appeal No. 15 of 2 . Aubrey Gondwe Wafwa v. Supa Baking Company Limited, SCZ Judgment No.9 of 2001 3. Rowland v. Divall (1923) 2 K. B. 500 4 . Patel v. Attorney General, SCZ judgment No. 14 of 2 002 5. Zambia Consolidated Copp er Mines Limited v. Eddie Katalayi and Max Chilongo (2001 ) Z. R 28 6. Edith Zewelani Nawakwi v. Lusaka City Council, SCZ Appeal No . 26 of 2001, 7. Nora Mwaanga Kayoba and Alizani Banda v. Eunice Kumwenda Ngulube and Andrew Ngulube, SCZ Judgment No. 19 of 2003 8. Pilcher v. Rawlins (1872) 7 Ch App 259 Legislation referred to: 1. The Public Roads Act, No. 12 of 2002, of the Laws of Zambia 2 . The Lands and Deeds Registry Act, Chapter 185 of the Laws of Zambia Authorities referred to: 1. Fredrick S. Mudenda, Land Law in Zambia: Cases and Materials, UNZA Press, Lusaka, 2007. 2 . Cheshire, Modem Law of Real Property by Bum B. H. 9th Edition, London, Butterworths Publishers 1986 P 65 1.0 INTRODUCTION 1. 1 This is an appeal against the decision of Honourable Mrs. Justice S. K. Newa of the High Court at Lusaka, delivered on the 13th of June, 2022. In that judgment, the learned trial judge declared, inter alia, that the subdivisions numbered F/378a/A/l/86 to F/378a/A/ 1/90, Lusaka were illegally created within the respondent's land and further held that the a ppellants could not be regarded as innocent purchasers of those subdivisions. 2.0 BACKGROUND 2. 1 On the 8 th of January, 2018, the plaintiff now respondent commenced an action against African Trading Limited, Cardinal Distributors Limited, Lusaka City Council and the J2 Attorney General by a writ of summons accompanied by a statement of claim. The statement of claim was subsequently amended on the 12th of October, 2018. Accordingly, the plaintiff sought the following reliefs: l. An Order of Injunction restraining the 1st and 2nd Defendants from developing structures, carrying out any construction, or undertaking any other related works on the subject properties identified as Fl 378al Al 1186, Fl 378al Al 11 87, Fl 378al Al l l 88, Fl 378al Al l l 89 and Fl 378al Al 11 90, Lusaka. These properties were alleged to have been created within the remaining extent of property number Fl 378al Al 1, in Lusaka, which is legally owned by the Plaintiff ii. A declaration that property number FI 3 78al Al 1 Lusaka, under Certificate of Title number 203790, with the area stated therein, legally belongs to the plaintiff m. An order to nullify and cancel all subdivisions illegally created on the Plaintiffs property, as well as all transactions conducted on the said property without the plaintiffs consent. w . An order of remediation, Possession, and restitution of the land to the plaintiff J3 v. An order for damages and compensation directed to the respective defendants. vi. Interest on any claims awarded by the court. vii. Costs. viii. Further or other relief the court may deem fit and just in the circumstances. 3.0 THE AMENDED STATEMENT OF CLAIM 3 . 1 In the amended statement of claim the plaintiff contended that: i. The subdivisions were created within its titled property without its consent. ii. The process of creation) allocation) and alienation by the J rd and 4th Defendants was unlawful. m. Subsequent transactions transferring the subdivisions to the 2nd defendant were a nullity. iv. The actions of the 3 rd and 4th defendants did not comply with the Land Circular Policy No. 1 of 1985) rendering the entire process irregular. J4 Allegations of Fraud and Negligence 3.2 The plaintiff alleged that the creation of subdivisions within its titled land was fraudulent and the particulars of fraud were as follows: 1. The land already belonged to the Plaintiff and could not legally be subdivided or alienated without its consent. II. The 3rd and 4th def end ants acted without legal authority during the process of creation, allocation and alienation of the said subdivisions. m. The subsequent assignments of the subdivisions to the 2nd defendant emanated from an illegal process. w. The process of creation, allocation and alienation of the said subdivisions by the 3rd and 4th defendants was void, as it bypassed all the requisite procedures for land allocation and breached the Land Circular Policy No. l of 1985. 3.3 The Plaintiff further alleged that the defendants' actions have caused it significant loss and that it needs the court's protection. 4.0 THE 18 T AND 2ND DEFENDANT'S DEFENCE 4.1 In their defence filed on 31 s t January 2018, the 1st and 2 nd defendants , maintained that they were innocent purchasers for value without notice of any adverse claims and that no JS encumbrances were registered against the land at the time of acquisition. 4.2 They denied all the plaintiff's claims of fraud and damages. The 1st and 2 nd defendants further stated that should the Court find in favor of the plaintiff, they would claim negligence against the 3 rd and 4 th defendants. It was contended that these defendants owed the 1st and 2 nd defendants a duty of care, which was breached, resulting in general and special damages being suffered by them. The particulars of negligence were as follows: 1. The 3rd defendant carelessly created the five plots known as Fl 378a/ A/ 1/ 86, 87, 88, 89 and 90 along Chirugula Road Chelstone/ Avondale and recommended the same to the Commissioner of Lands to the detriment of the unsuspecting 1st and 2 nd defendants. That they subsequently went on to purchase the same believing the properties were free of any encumbrances as held out by both the 3rd and 4th defendants through their conduct and via the paper work approved and issued by them. The 4 Defendant carelessly issued by them. ii. The 4 th defendant carelessly issued new certificates of title relating to the said properties and updated its' Lands J6 Register to reflect that the initial five (5) owners from whom the 1s t defendant purchased the properties were the true and rightful owners of the same. m. That the 1st and 2 nd defendants when respectively purchasing the properties in question, relied on the documents relating to the said properties and which were carelessly issued by the 3 rd and 4th defendants to their detriment, namely letters of recommendation, invitations to treat, offer letters, survey diagrams, certificates of title and the Lands Register printouts and other related documents. w. The 4th defendant who is under a duty to allow the 2 nd defendant who currently holds certificates of title to the properties to hold and enjoy the same peaceably and without any interruption, has breached this duty as the 2 nd defendant is now unable to hold and/ or enjoy the said properties peaceably. 4 .3 The 1st and 2 n d defendants also claimed that they had suffered general damages and special damages, and in the alternative sought full and complete indemnity from the 3rd and 4 th defendants. 4. 4 The special damages were stated as: J7 i. The costs incurred and or incidental to the purchase of the land in question; namely the five pieces of land known as Fl 387a/ 1/ 86, 87, 88, 89 and 90 along Chirugula Road Chelstone/ Avondale by the 1st Defendant from the initial owners in the sum of ZMWS00, 000.00 and by the 2nd Defendant from the 1st Defendant in the sum of USD$220, 000.00. n. The costs of Property Transfer Tax incurred by the 1s t defendant during the sale of the aforementioned property to the 2nd defendant. m. The cost of changing use of the properties in question which was incurred by the 1st defendant in the sum of ZMWS, 1 79.37. w. The costs incurred and or incidental to the setting up of a service station trading under the name Lake Petroleum on the properties in question to be assessed by the Learned Deputy Registrar. v. Costs of these proceedings. vi. The order for damages sought by the plaintiff against the defendants collectively should be borne by the 3rd and 4th defendants. J8 5. 0 3RD DEFENDANT'S DEFENCE 5. 1 The 3 rd defendant, in its defence filed on 7 th December 2018, admitted to being an agent of the 4 th defendant and stated that its recommendations regarding land use changes are subject to the 4 th defendant's approval. It contended that all procedures were duly followed in this regard. 5. 2 In response to the Plaintiffs assertion that the 3 rd defendant lacked authority to create, allocate, or alienate subdivisions within its land without consent, the 3 rd defendant argued that it operates as an agent of the Ministry of Lands. 6.0 4THDEFENDANT'S DEFENCE 6. 1 In its defence filed on 13th June 2 0 19, the 4 th def end ant conceded that the plaintiff was the legal and beneficial owner of the property described as F / 378a/ A/ 1, Lusaka. That the properties in contention are situated within the plaintiff's property, described as Subdivision No. 1 of Subdivision A of Farm No. 378a, and confirmed that records at the Ministry of Lands indicate the properties are currently registered in the name of the 2 nd defendant. 6 .2 It was averred that on 13th October 2014, the 3 rd defendant recommended to the Commissioner of Lands that the J9 properties 1n contention be allocated to five individuals: Robinson Kalata, Given Lwenshi, Humphrey Kapapula, Geoffrey Mulenga, and Trevor Mulenga. The recommendation was accompanied by a numbered site plan, application forms , and copies of the applicants' national registration cards. On this basis, the 4 t h defendant issued letters of offer to the named individuals and subsequently provided them with Certificates of Title for the properties on 27th May 2015. These titleholders then assigned their properties to the 2 nd defendant, which was issued with corresponding Certificates of Title on the same date. 6. 3 The 4 th defendant further acknowledged the claim that subdivisions F / 378a/ A/ 1 / 86 to F / 378a/ A/ 1 /90 were created within its titled land but denied allegations of fraud. The 4 th defendant stated that the site plans for subdivisions F/378a/A/l/86 to F/378a/A/l/90 were approved by the 3 rd defendant and submitted to the Commissioner of Lands for numbering. 6.4 Lastly, the plaintiff's claim that it has suffered great loss was denied. JlO 7. 0 EVIDENCE AT TRIAL 7 . 1 At trial, the plaintiff called four witnesses while the 1st and 2nd defendants each called one witness, and the 3 rd and 4 th defendants did not call any witnesses. Plaintifrs evidence at trial 7. 2 PWl , Wanchela Kakubo, a Legal Officer from the Ministry of Lands, testified that the plaintiff is the holder of a Certificate of Title for the property F / 378a/ A/ 1, covering 12.6725 hectares, issued on 10th December 2012. According to the Lands Register, the property was previously owned by Lusaka Building and Transport Company Limited, which subdivided the land multiple times before assigning the remaining extent to the plaintiff. PW 1 emphasized that subdivisions F /378a/A/ l /86 to F/378a/A/l/90, created by the 3rd defendant, were erroneous as they overlapped with an existing title. The Ministry of Lands considered these subdivisions as non-existent properties created on titled land without the Plaintiff's consent. 7.3 PWl acknowledged that the 3 rd defendant had submitted recommendations for creating subdivisions F / 378a/ A/ 1 / 86 to F/378a/A/l/90 to the Commissioner of Lands, accompanied by site plans and application forms. However, Jll the Commissioner of Lands issued titles in error. PWl also stated that subdivisions F/378a/A/1/86 to F/378a/A/1/90 were never marked off in the original survey diagrams, and the Ministry of Lands' records confirmed that these subdivisions encroached on the Plaintiff's titled land. 7 .!1 PW2, Njavwa Siwale, a Government Surveyor, Ministry of Lands testified that the plaintiff's property was systematically subdivided over time, leaving 12.6725 hectares, as reflected in the survey diagrams, and the Lands Register. He confirmed that subdivisions F / 378a/ A/ 1 / 86 to F / 378a/ A/ 1 /90 were created within the plaintiff's titled land without authorization and that due diligence was not followed during the surveying process. PW2 stated that the road reserve, where the disputed subdivisions were created, belonged to the plaintiff as part of the remaining extent of its property. He noted that the 3 rd defendant failed to obtain the Plaintiffs consent before creating these subdivisions, rendering the process irregular. 7 .5 PW2 further testified that the Surveyor General's office is responsible for numbering properties, and the 3 rd defendant lacked the authority to create or allocate subdivisions on private land. J12 7 .6 PW3, Barnabas Zulu an Administrator in the plaintiff company, testified that the plaintiff acquired the property in December 2012 and erected a boundary wall to secure it. In 2017, the plaintiff observed unauthorized construction activity, including the erection of a corrugated steel fence within its property. PW3 reported the matter to the 3 rd defendant but the matter was not resolved, prompting the plaintiff to take legal action. He confirmed that the plaintiff did not authorize the creation of subdivisions F / 378a/ A/ 1 / 86 to F / 378a/ A/ 1 /90, which were within its titled property. 7. 7 PW3 acknowledged that the 3 rd defendant put up a notice for a change of land use but claimed that the plaintiff's objections were raised after the 30-day period had elapsed. He also noted that the plaintiff was unaware of approvals granted by Zambia Environmental Management agency (ZEMA), Road Development Agency (RDA), or the Energy Regulation Board (ERB) for the construction of a filling station on the disputed land. 7 .8 PW4, Robson Banda, the Town Planner for the 3 rd defendant, testified that subdivisions F / 378a/ A/ 1 / 86 to F / 378a/ A/ 1 /90 were created on a road reserve, which h e claimed the 3 rd defendant had the authority to re-plan as a planning J13 authority. However, he admitted that the 3 rd defendant lacked the authority to create subdivisions on titled land without the consent of the titleholder. PW4 stated that the 3 rd defendant recommended the allocation of subdivisions F /378a/ A/ 1 / 86 to F/378a/A/ 1/90 to five individuals, who wer e later issued titles by th e Ministry of Land s. 2 N° DEFENDANT'S EVIDENCE AT TRIAL 7. 9 DW 1, Safwan Patel, a representative of the 2 nd defendant, testified that he first learnt about the property in question from his relative , Mohammed Nasir, who informed him that the property had been created on a road reserve. DWl visited the site with Mohammed Nasir, where he confirmed the availability of the plots, which were owned by five individuals. During the inspection, DWl observed that the properties were situated adjacent to a road reserve, positioned between a wall fence and the road reserve. There was also a caretaker's house. However, he did not conduct the site visit with a surveyor. 7. 10 In 20 15, the 2 nd defen dant purchased subdivisions F/378a/A/1 / 86 to F/378a/A/1/90 from the respective individuals, paying Kl 00,000.00 for each subdivision, alon g with the applicable taxes. This transaction was completed J14 after conducting due diligence at the Ministry of Lands and with the 3 rd defendants. 7 .11 The 2 nd defendant later sold the properties to the 1st defendant for the construction of a Filling Sta tion at the price of USO 220,000.00. DWI stated that all transactions were based on documents provided by the 3 rd and 4 th defendants , including titles issued to the initial five individuals. He admitted that the 2 nd defendant did not obtain consent from the plaintiff for the subdivisions and claimed that any errors or negligence were the responsibility of the 3 rd and 4 th defendants. 7.12 DW2, Abdul Aziz Ahmed a representative of the 1st defendant, testified that the 1st defendant purchased the properties from the 2 nd defendant to build a filling station. Before proceeding, they verified the authenticity of the titles and obtained approvals from ZEMA, RDA, ERB, and the 3 rd defendant for the change of land use and construction. DW2 claimed th at the 1st defendant was unaware of the plaintiffs claims until litigation commenced. 8 . 0 DECISION OF THE LOWER COURT 8.1 Upon examining the eviden ce on record , the lower Court found as follows: JlS (a) The plaintiff holds a Certificate of Title for property Fl 378a/ A/ 1, measuring 12.6725 hectares,for a term of 100 years from 1st July 1975, issued on 10th December 2012. The plaintiff purchased the land from Lusaka Building and Transport Company Limited. (b) The Commissioner of Lands created five subdivisions (F/378a/A/l/86 to F/378a/A/l/ 90) following a recommendation by the Lusaka City Council (Jrd defendant). (c) These subdivisions were offered to five individuals (Robinson Kalata, Given Junior Lwenshi, Humphrey Kapapula, Geoffrey Mulenga, and Trevor Mulenga). These individuals later sold the land to Cardinal Distributors Limited (2nd defendant), which subsequently sold them to the 1st defendant. (d)The five subdivisions were unlawfully created within the plaintiff's titled property. Although registered as direct leases from the President for 99 years, they were fraudulently created to circumvent the plaintiff's consent. (e) The road reserve where the subdivisions were created fell within the plaintiff's titled land. Section 44 of the Public Roads Act No. 12 of 2002 restricts construction on road J16 reserves, and no authority was obtained to re-plan the area for residential purposes. ff) While the 1s t and 2 nd defendants carried out some investigations, they failed to exhaust all necessary inquiries, such as confirming ownership with the plaintiff This failure disqualified them from being considered innocent purchasers for value. 8.2 Having established the above, the Judge made the following declarations: (a) That the plaintiff is the rightful owner of property Fl 378a/ A/ 1. (b)Subdivisions F/ 378a/A/ 1/86 to F/378a/A/ 1/9 0 were illegal, and the associated Certificates of Title are to be cancelled. (c) The Plaintiff was granted an order for restitution, remediation, and possession of the land. 8 .3 Regarding the claim for negligence by the 1s t and 2nd defendants against the 3 rd and 4 th defendants, the learned trial judge h eld that the 3 rd and 4 th defendants were n egligent in creating and disposing of the five subdivisions without the plaintiffs consent. (a) Judgment was entered in favour of the 1st defendant for negligence. Awards were made of KSOO, 000. 00 and USD 220,000.00 for the cost of acquiring the properties, property transfer tax, and conversion costs less any amount the 1st defendant did not pay to the 2nd def end ant. The amounts to be assessed by the registrar. (b) It was further ordered that the 1s t defendant be indemnified by the 3 rd and 4th defendants for award to the plaintiff for restitution and remediation. (c) The plaintiff's claim for unspecified damages and compensation was dismissed due to lack of evidence. (d) Costs were awarded to the plaintiff and the 1st and 2 nd d efendants against the 3rd and 4th defendants, to be taxed in default of agreement. 9.0 GROUNDS OF APPEAL 9.1 Dissatisfied with the Judgment, the Appellant appealed to this court advancing the following grounds: 1. The trial Court erred both in law and fact when it ruled that the appellants were not innocent purchasers for J18 value when in fact they had exhausted all reasonable enquiries before purchasing the land in dispute. 2. The trial Court erred both in law and fact when it ruled that there was negligence in the manner which the 5 properties that were proposed for creation and are in dispute were created. 3. The trial Court erred both in law andfact when itfound fraud in the manner which the 5 properties in dispute was created by the 3 rd defendant by assuming this was done to circumvent the need to get consent from the respondent when in fact the creation of the properties was done within the powers vested in the 3 rd defendant. 4. The trial Court erred both in law and fact when it ordered that the certificates of title obtained by the 2 nd defendant and subsequently conveyed to the 1st defendant be cancelled when they were legitimately obtained. 5. The trial Court erred in law and fact when it failed to recognise that the appellant on the strength of its legitimately acquired property had built structures at a considerable value on the said property and is J19 providing sustainable emp loyment to a number of people. 6. Alternatively, the trial Court which is a Court of law and equity erred in fact and law when it did not t ake into account that the initial land was bare but that t he appellant had put in massive investment in the tune of millions of dollars and thus ought to have been left on the land and the respondent compensated w ith alternat ive piece of land by the Mi nistry of Lands and Lusaka City Council. 1 .0 APPELLANT'S ARGUMENTS 10 .1 In the h eads of argumen t dated 27th Febru ary 2023, the appellant's counsel argued only th e first grou nd of appeal, assertin g that th e lower Cou rt erred in law and fact by ruling that the appellants wer e not in nocent purchaser s for value without n otice. 10 .2 Counsel submitted that under section 59 of the Lands and Deeds Registry Act , a bon a fide pu rch aser who pays valu able con sideration without n otice of en cumbrances acqu ires a good title . It was argued th at the appellant fulfilled all the conditions necessary to invoke the doctrine of in nocen t purchaser for valu e with out notice. Counsel explain ed th at th e appellant J20 conducted all the required due diligen ce, wh ich included a search at the Ministry of Land s and Deeds Registry to verify the own ers hip status of the land, an investigation at the Lusaka City Council t o authenticate th e plans , a site visit with a surveyor to verify the land a s depicted on th e title, and a verification of th e vendor's st a tus and cap acity to sell the land. Counsel emphasized that n on e of these inquiries revealed any a dverse claim s or en cumbrances on th e land. 10.3 It was further argued th at the law does n ot require a purch aser to undertake sp ecial in vestigation s but rath er ordinary 1nqu1nes, as ou tlined in th e equitable doctrine of n otice. Referen ce wa s m ade to Cheshire, Modern Law of Real Property2 at page 65 wh ere it states: "One of the objects of investing title is to discover whether the land is subject to rights vested in persons other than the vendor, and the equitable doctrine of notice orders that a purchaser is bound by any right which he could have discovered had he made the ordinary investigations as sketched above. Again if he fails to make enquiries of third persons who happen to be in possession of the land, he is affected with notice of all equitable interests held by them." J21 10. 4 Counsel further distinguished this case from the case of Wisdom Chiyala, Busiku Chiyala v. Joseph Kamanga 1 where it was held that: "A purchaser who has notice that the vendor is not in possession of the property, should make enquiries from the person in possession as to such persons rights over the property, failing which whatever title he acquires as purchaser will be subject to the titles or rights of the tenants in possession." 10. 5 He argued that in the present case, the respondent was not in possession, and the appellant reasonably relied on the land register, which is considered an official reflection of the land's status. 10 .6 Counsel citing the case of Aubrey Gondwe Wafwa v. Supa Baking Company Limited, 2 further submitted that the appellants acquired good title, as they were third parties who purchased legal estate without notice of any adverse claim. He emphasized that the lower Court improperly applied th e doctrine of innocent purchaser and erroneously suggested that the appellants should have conducted further investigations beyond the s cope of ordinary due diligence . J22 1 . 7 That the plea of bona fide pu rchaser for valu e with out notice is an u nqu alified defence, and the appellants were entitled to rely on the land register and the absence of encumbrances during their inquiries. The failure of th e lower Court to recognize th e appellants' position as innocent pu rchasers was a misapplication of the law. 10 . 8 Counsel concluded by urging the Court to allow th e appeal and overturn th e decision of th e lower Court. 1 l .0 RESPONDENT'S HEADS OF ARGUMENT 1 1. 1 In the h eads of argument dated 25 th September 2023, the respondent opposed the first ground of appeal, contending that the properties sold to the appellant emanated from an illegality. It was submitted that the subdivisions in question were created without auth ority from th e lawful owner or compliance with the law. As such, the p lea of innocent purchaser for value withou t notice cou ld not stand amidst illegality and fraud , as everyth ing flowing from an illegality is void. 11.2 Counsel argued that under the principle established in Rowland v. Divall,3 a seller with out good title cannot pass it to another, meaning the title to the land in this case was tainted from inception. J23 11 .3 To further illustrate this principle, reference was made to the case of Patel v. Attorney General,4 where the Court held that a thief could not pass ownership of a stolen vehicle to a purchaser. Similarly, the a ppellants in this case could not acquire good title to the land, as it was illegally subdivided without the consent of the rightful owner. 11.4 The respondent's counsel further argued that the appellants wer e aware of potential issues with the crea tion of the subdivisions and failed to exhaust reasonable inquiries, as concluded by the lower Cou rt. 11.5 Counsel referenced section 59 of the Lands and Deeds Registry Act and several cases including Zambia Consolidated Copper Mines Limited v. Eddie Katalayi and Max Chilong,5 and Edith Zewelani Nawakwi v. Lusaka City Council, 6 to emphasize that a bona fide p urchaser must not have any notice, whether actual, constructive, or imputed , of potential claims or encumbrances. Citing Land Law in Zambia: Cases and Materials, 1 the respondent outlined the essential elem ents of the doctrine of bona fide purchaser, including good faith, valuable consideration, acquisition of a legal estate, and th e absence of notice. Constructive notice, in particular, requires that a purchaser undertakes full J24 investigations into the title, and failure to do so constitutes negligence, imputing knowledge of facts that should have been discovered. 11.6 It was submitted that the appellants did not exercise adequate due diligence. According to the testimony of DWl , during the site visit, the subdivisions were found to be situated between a wall fence and a road reserve, and the appellants were unaware of the boundaries of the properties they sought to purchase. No surveyor was engaged to ascertain these boundaries, which was a significant omission, particularly in light of the presence of a caretaker's property within the land. The presence of this structure should have prompted further inquiries, as it indicated a pre-existing interest by a third party. The appellants failed to engage in such inquiries, thereby failing to discover the respondent's interest in the land. 1 1. 7 Counsel further argued that purchasing real property requires a level of scrutiny and due diligence far exceeding that involved in purchasing goods. It was emphasized that the lower Court did not require special investigations, as alleged by the appellants, but merely held that had they exhausted all reasonable 1nqu1nes, they would have established the J25 respondent's interest in the property. The failure to investigate th e legality of the subdivisions and boundaries constituted constructive notice, which barred the appellants from claimin g the defence of an innocent purchaser. 11.8 Reliance was placed on the case of Nora Mwaanga Kayoba and Alizani Banda v. Eunice Kumwenda Ngulube and Andrew Ngulube, 7 where the Supreme Court held that an intending purchaser must inspect and inquire into the property before entering into a contract. Any actual or constructive notice received by an agent or legal representative is imputed to th e purchaser, and failing to make these inquiries undermines th e defence of bona purchaser for value. 11.9 Finally, the respondent's counsel argued that the appellants failed to establish their claim as bona fide purchasers for value without notice. The subdivisions were created unlawfully, and the appellants ' failure to undertake adequate inquiries rendered their reliance on the doctrine untenable. We were urged to dismiss the appeal. 12.0 ANALYSIS AND DETERMINATION 12. 1 We have carefully considered the record of appeal and the arguments advanced by counsel for both parties. The grounds of appeal will be tackled together a s they are related. J26 12.2 The central issue in this case is whether the appellant can be regarded as an innocent purchaser for value without notice of any adverse claims concerning the p roperties in dispute. 12 .3 The doctrine of an innocent purchaser for value without notice protects a bona fide purchaser who acquires property for valuable consideration without notice of any adverse claims or encumbrances. Section 59 of the Lands and Deeds Registry Act, 2 provides statutory protection for such purchasers, safeguarding their title if specific conditions are met. The s ection states: "Nothing in Parts 111 to VII shall be so interpreted as to render subject to action for recovery of damages, or for possession, or to deprivation of any land in respect to which a Certificate of Title has been issued, any purchaser or mortgagee bona fide for valuable consideration of such land on the ground that his vendor or mortgagor may have become a Registered Proprietor through fraud, or error, or under any void or voidable instrument, or may have derived from or through a Registered Proprietor throughfraud or error, or under any void or voidable instrument, and this whether such fraud or error consists in wrong description of the boundaries or of the parcels of any land, or otherwise howsoever." J27 12. 4 The protection afforded under the said doctrine is further illustrated in the case of Pilcher v. Rawlins, 8 where Jams L. J. pointed out that the plea of purchaser of a legal estate for value without notice is an absolute , unqualified, unanswerable defence. The burden of proof lies on the person who would wish to rely on the defence. 12.5 As outlined in Land Law in Zambia: Cases and Materials, several conditions must be satisfied for the defence to apply: These include: (i) Bonafide - the purchaser must act in good faith, i. e there must be no fraud or sharp practices. (ii) Purchaser for value includes any person who takes the property by sale, mortgage, lease, or otherwise but excludes any acquisition by operation of the law. (iii) Of a legal estate- the estate purchased must be a legal estate and not a mere equitable interest. (iv) Without notice- notice may either be actual, constructive, or imputed. (a) Actual notice ..... . (b) Constructive notice- a purchaser is under obligation to undertake full investigation of title before completing his purchase. He can only plead the absence of notice if he made all usual and proper enquiries. If he does not do so or is care less or negligent he is deemed to have constructive notice. J28 A person has constructive notice of all facts of which he could have acquired notice had he made those inquiries and inspections which he ought reasonably to have made. (c) Imputed notice- where a purchaser employs an agent such as a legal practitioner; any notice (whether actual or constructive) attributed to the agent is imputed to the purchaser." 12.6 The appellant argued that it acted in good faith by condu cting searches at the Ministry of Lands, Lusaka City Council, and the site. However, good faith requires not only honesty but also reasonable diligence. The presence of a wall fence and a caretaker 's house should have raised questions about the ownership and boundaries of the land. In the case of Pilcher v. Rawlins, 8 good faith is deemed absent where reasonable inquiries are neglected, and such negligence undermines the plea of innocent purchaser. 12.7 Although, it is undisputed that the appellant paid valuable consideration for the properties and made inquiries at the Lusaka City Council and Lands and Deeds Registry, that in itself does not establish the defence of innocent purchaser if other elements, such as the a bsence of notice, are not satisfied. J29 12.8 The evidence on record, indicates that the appellant had constructive notice of the respondent's interest in the land. Constructive notice arises when a purchaser fails to conduct reasonable inquiries that would have revealed an adverse claim. The red flags observed during the site visit, such as the location of the property in question which was on the road reserve near the boundary wall and in the vicinity of the caretaker's house, were sufficient to put the appellant on alert for potential competing interests. It would have been prudent under the circumstances for the appellant to engage a qualified surveyor to ascertain the boundaries of the property. Further, the appellant should have enquired as to who the owner of the caretaker's house was. In the case of Nora Mwaanga Kayoba v. Eunice Kumwenda Ngulube, 7 the Supreme Court guided that a purchaser must inspect and inquire into the property's status, particularly when potential issues are evident. 12.9 In light of the foregoing, we hold that the appellant's failure to engage a surveyor or to make further inquiries constitutes negligence and constructive notice of the respondent's ownership of the land. Therefore, the lower Court was on firm J30 ground when it found that the appellant was not an innocent purchaser for value without notice. 12.10 Further evidence revealed that the subdivisions were created unlawfully, without the respondent's consent, and in violation of section 44 of the Public Roads Act. As h eld in Rowland v. Dival13 and Patel v. Attorney General,4 a seller without title cannot pass good title to another. The fraudulent creation of the subdivisions jointly by the Ministry of Lands as principal and Lusaka City Council as their agent, and as direct leases from the President, also invalidates the appellant's title to the property in dispute. 12. 11 We are of the firm view that the lower Court was on firm ground in holding that the subdivisions were created illegally without the respondent's consent. Consequently, the appellant's acquisition of the properties was void from inception. It follows that the order for cancellation of the appellant's Certificate of Title was justified. 12 .1 2 For the foregoing reasons, we find no merit in all the grounds of appeal. 13.0 CONCLUSION 13. 1 In sum, while the appellant conducted some inquiries, its failure to take h eed of the conspicuous red flags undermines J31 \ " ' its claim. The illegality surrounding the creation of the subdivisions invalidates the appellant's title to the property. 13.2 The appellant's reliance on the doctrine of bonafide purchaser without notice is untenable for inter-alia the title it obtained being void ab initio. 13.3 Ultimately, the respondent's interest in the property remains superior as the appeal fails in its entirety and it is dismissed with costs; the same to be taxed in default of agreement between the parties. J . CHAS COURT OF APPEAL JUDGE ···c:~ ·-· COURT OF APPEAL JUDGE ·-······· ····-~ A. M. BANDA BOBO COURT OF APPEAL JUDGE J32