Annie Mwiinga Mapala v George Chewe and Naomi Chitambala Chewe (suing in their capacities as Administrators of the estate of the late Lt. Alex Chewe) (APPEAL NO. 73 OF 2017) [2018] ZMCA 635 (21 February 2018)

IN THE COURT OF APPEAL HOLDEN AT LUSAKA (CIVIL JURISDICTION) BETWEEN: APPEAL NO.73 OF 2017 ANNIE MWIINGA MAPALA UCOF RTOFA.;~£ ;; ~, it., ., APPELLANT .... "-- AND GEORGE CHEWE AND NAO CHITAMBALA CHEWE (su ing in their capacities as Administrators of the estate of the late Lt. Alex Chew!:!) ~ .~.~~V!"• · ~•,•.:-i,..-y,,-: ' ~~ .. ' '/QJ, ~ Z 1 FEB 2018 Lit-~ \ ~ . . ........ ..... ~.......... • 11.:..1<.,1:,J -~ EGIS'fRV SPONDENT Coram: Makungu, Chashi and Sichinga, J. J. A On 15th day of November, 2017 and 21 st Day of February, 2018 For the Appellant: Mr. A. Chileshe of Mambwe Siwila and Lisimba Advocates For the Respondent: Mr. W Mwenya of Lukona Chambers JUDGMENT Makungu, JA, delivered the Judgment of the Court. Cases referred to: 1. Wesley Mulungushi v. Catherine Bwale Mizi Chomba (2004) ZR 96 (S. C) 2. Scott v. Corporation of Liverpool (1858) 28 LJ ch 230 app 235 3. Attorney General v. Achiume (1983) ZR 1 (S. C) 4. Jane Mwenya and Jason Randee v. Paul Kapinga (1998) ZR 17 5. Zambia State Insurance Corporation and Helmes Transport Limited v. Joseph Chanda (TIA Link Express Motorways) (1990-1992) ZR 175 (S. C) 6. Crown Cork Co. (Z) Limited v. Jackson (1988-1989) ZR 82 (S. C) Other Authorities referred to: 1. Halsbury's Laws of England by Lord Mackey of Clashfern (4th edition) (1999) Re-issue Vol. 42, London: Butterworths. This appeal arises from the judgment of the High Court made on 27 th March, 2017. In the summary of the evidence and the Judgment in the Court below, we shall refer to the appellant as the defendant and the respondent as the plaintiff because those were their designations in the court below. In the Court below, the plaintiff made the following claims: 1. Specific performance of the contract of sale. 2. Damages for wrongful, fraudulent conversion of the property or breach of contract. 3. An injunction 4 . Interest 5. Any other relief The defendant counter-claimed: 1. Rescission of the contract of sale 2. Mesne profits 3. Vacant possession 4. Removal of the caveat 5. Costs. The brief facts of the case are that, before December, 2002 the late Alex Chewe was in occupation of the defendant's house number 27 Pemba Road Chilenje South, Lusaka otherwise known as sub division 769 of stand 7417 as a tenant. On 29 th November, 2002 the defendant made a written offer to the plaintiff to sell the said house to him at K45,000,000.00 (unrebased). The plaintiff accepted the -J2- offer through a letter dated 4 th December, 2002, wherein he requested that a contract of sale be prepared as soon as possible. However, by the time of Alex Chewe's death on 3 rd March, 2012 no formal contract had been drawn up. There was a dispute between the parties as to how much was paid towards the purchase price as the plaintiff added that it was K39,200.00 (rebased) while the defendant alleged that it was only K26,000.00 (rebased) . There was also a dispute as to when the balance of the purchase price was supposed to be paid. On 2 nd October, 2007 through her advocates, the defendant demanded for payment of the balance of the purchase price with interest at 40% from the date of the sale agreement. She threatened to rescind the contract within 14 days if no payment was made. She also offered to refund the amount paid towards the purchase price thus far. On 11 th October, 2007 the plaintiff through his advocates replied to the letter of 2 nd October indicating that the sum of K39, 200.00 had been paid, leaving a balance of KS,800.00 which he was prepared to pay. That payment was withheld because title had not yet been deduced by the defendant. In 2009, the plaintiff discovered that the defendant had mortgaged the property to Inda Zambia Bank, which mortgage was redeemed by 10t h December, 2007. By 2009 the plaintiff had built a boundary wall on the property, replaced the windows and constructed a guest -J3- wing. The plaintiff placed a caveat on the property on 19th February, 2008. In his judgment, the learned trial Judge found that there was a valid contract of sale evidenced by the letters of offer and acceptance. Further that, the contention by the defendant that the plaintiffs uncle Mr. Ngona was supposed to pay the balance of the purchase price within 3 months from the date of acceptance of the offer was not supported by any documentary evidence. That the letters of offer and acceptance did state the time of payment of the purchase price but time was not of the essence in the absence of any express provision in the contract. He also found that the defendant had failed, neglected or refused to deduce title. The trial Judge granted an order of specific performance of the contract of sale. He directed that the completion should take place within 30 days from the date of judgment. That the necessary consent and statutory impositions inclusive of withholding tax be paid at the consideration of re based K 45,000.00 . Further that, the plaintiff should pay the defendant the sum of KS,800.00 being the balance of the purchase price during the time of the completion with interest from 23 rd June, 2008 when the action was commenced at the rate of 10%> per annum simple interest. Having granted the relief of specific performance, the trial Judge dismissed the plaintiffs claim for damages for wrongful fraudulent conversion of the property and / or breach of contract. The counter claim was dismissed in its entirety. -J4- The appellant has put forward three grounds of appeal couched as follows: "1. The learned trial Judge erred in law and fact by holding that time in which to complete was not of the essence in the absence of any express provision in the contract which in this case was not drawn up by the appellant." "2. The learned trial Judge erred in law and in fact by holding that he agreed with the respondent's submissions that the appellant had failed, neglected or refused to deduce title and that the delay in completion can be traced right at the door steps of the appellant." "3. The learned trial Judge erred in law and fact by holding that the relief of rescission of the contract to sale the property to the respondents by the appellant is declined and dismissed since there exists no ground to justify rescission. " The appellant filed herein written Heads of Argument on 6 th July, 201 7 wherein the first ground was argued as follows: On page 22 of the judgment, the trial Judge found that the notice to complete was issued on 2 nd October, 2007 and therefore in counsel's opinion, time became of essence. That there being default on the part of the purchaser to settle the balance of the purchase price, the appellant was in order to issue a notice to complete notwithstanding the fact that there was no formal contract of sale executed between the parties. He relied on the case of Wesley -JS- Mulungushi v. Catherine Bwale Muzi Chomba f1J where it was held inter alia that: "In a contract, time can be of essence if firstly, it is stipulated in the contract that it shall be so and secondly, if in case where one party has been guilty of undue delay, he is notified by the other that unless performance is completed within a reasonable time, the contract will be regarded as at an end." He stated that the trial Judge erred when he held on page 22 of the Judgment that time was not of the essence because the notice to complete did not stipulate the outstanding balance of the purchase price. Counsel therefore prayed that the first ground be upheld. In response to the first ground, learned counsel for the respondent submitted in the Heads of Argument filed herein on 23 rd August, 201 7 as follows: The court below was on firm ground when it found that time was not of the essence . In the letter of offer and the letter of acceptance, there was no indication of time within which to pay the purchase price and that the appellant abrogated her responsibility to prepare a contract of sale. He further stated that importing a term in the contract of sale on time for completion is impractical as it is unsupported by law. To fortify this , he cited several authorities including Scott v. Corporation of Liverpool f2J where Lord Campbell LC stated that: "There is no equitable construction of agreement distinct from its legal construction. To construe is nothing more -J6- than to arrive at the meaning of the parties to an agreement and this must be the aim and end of all the courts which are called upon to enforce any rights created by and growing out of contract." Counsel went on to refer to various decisions on the appellate court's power to set aside a trial court's findings of fact, including Attorney General v. Achiume f3J where it was held that: "The appellate court will not reverse findings of fact made by a trial Judge unless it is satisfied that the findings in question were either perverse or made in the absence of any a misapprehension of the facts or that they were findings which on a proper view of the evidence, no trial court acting correctly can reasonably make." evidence or upon relevant He further submitted that the issue of notice to complete cannot be construed independent of the issue of deducing title . That the evidence of PW 1 on page 188 and Page 189 shows inter alia that the parties to the sale agreement were on very friendly terms and that there was no definite time for the payment of the purchase price . The agreement was to pay by installments as and when the purchaser had money. When the appellant requested for payment of the balance , it was agreed that the balance would be paid upon the vendor deducing title. From 2003 the vendor was nowhere to be seen until 2007 . Her further evidence was that installments were paid as per document 9 which was prepared by the appellant. That the appellant was even paid rebased Kl , 500. 00 in order for her to pay for processing of the title deed. Counsel stated that this evidence was unchallenged. He contended that the appellant should -J7- not be allowed to rely on her own default to enforce the notice to complete because courts ordinarily take judicial notice that before the final payment is made on a contract of sale of land, the vendor must deduce title. The record of appeal shows clearly that the appellant never deduced title even though the appellant testified that she was in possession of the original Certificate of Title. Counsel for the respondent proceeded to distinguish the present case from the case of Wesley Mulugunshi v. Catherine Bwale Mizi Chomba f1J as follows: Firstly, in the Wesley Mulungushi case, time within which to pay the purchase price was a term of the contract. This is not so in the present case. Secondly, the appellant herein wants to rely on her own failure to deduce title to enforce a non-contractual term of the contract. Thirdly, the letter from the respondent's advocates to the appellant's advocates dated 4 th June, 2008 on page 110 of the record of appeal was not responded to by either the appellant or her advocates. That the letter states partly that: "There is no basis upon which your client can claim interest. This is especially that failure to complete the transaction herein is due to her default and refusal to do the needful." Counsel therefore prayed that the first ground be dismissed. As regards the second ground of appeal, the appellant argued that the fact that the appellant had mortgaged the property in issue, cannot reasonably be the basis for a finding which the learned trial -JS- Judge made that the appellant failed, neglected or refused to deduce title. There was no written evidence that the respondents requested the appellant to deduce title and the appellant refused to do so. He therefore urged us to reverse the said findings as he claims that they were not made on the basis of the evidence on record. He pointed out that the only time that a request for a Certificate of Title was made was on 11 th October, 2007 through a letter from Lukona Chambers appearing on pages 99-100 of the record. That the request was only made after the appellant had served the respondents with a notice to complete dated 2 nd October, 2007. Therefore, the appellant is not to blame for the delay in completing the contract. He therefore prayed that the second ground should also be upheld. In response to the second ground, learned counsel for the respondent relied on his arguments in ground 1 and submitted that the findings of the trial court were based on the evidence on record and the judgment was well reasoned and fortified by authorities. On the hearing of the appeal the 1st and 2 nd grounds were argued together because they are interrelated. Our views on these two grounds are as follows: The trial Judge was on firm ground when he found that the letters of offer and acceptance did not indicate that time was of the essence. However, he erred in fact when he found on J20 line 19 that "In the letters of offer and acceptance there was mention -J9- of time in which to pay the purchase price" because we have perused both letters on pages 95 and 96 of the record respectively and ascertained that they do not. We therefore quash that finding on the authority of Attorney General v. Achiume. f3J Wesley Mulugunshi v. Catherine Bwale Muzi Chomba f11 is clear as regards when time can be regarded as of essence in a contract of sale of a piece of land. In the present case, the appellant gave the respondent notice to complete because the balance of the purchase price had been outstanding for years. The main issue that has arisen in this appeal is whether the notice to complete was under the circumstances of this particular case properly issued and served so as to make time of the essence of the contract. We have taken into account what the learned authors of Halsbury's Laws of England f1J say in paragraph 185 on "material dates for completion of contract" inter alia that: "Three dates are material completion of the contract: in regard to the (1) The date, if any, fixed by the contract for completion; (2) The date when the vendor shows and verifies such a title as the purchaser can require, and (3) The date of actual completion ... " The Completion of the contract is conditional on the vendor making out his title. Until the vendor makes out his title, the purchaser is not safe in paying the purchase money and taking possession. Hence the date when the vendor makes out his title -JlO- is the earliest date at which completion should take place, and it is the proper date for completion if no date is fixed by the contract." ..... If time is not of the essence of the contract, and the title has not then been made out, the purchaser can be required to complete as soon as the title has been made out. In case of undue delay, either party may ftx a reasonable time for completion, and this time then becomes of the essence of the contract." In light of the foregoing, we are of the firm view that in the present case, the notice to complete was not properly issued because of the appellant's failure to deduce title. It is necessary for a vendor to deduce title before issuing a notice to complete. The respondent was therefore entitled to withhold the payment pending deduction of title. It is undisputed that in response to the notice to complete, the respondent informed the appellant in no uncertain terms that he was willing to settle the balance of the purchase price as soon as title was deduced. The respondent therefore withheld the payment on reasonable and lawful grounds. There is no authority cited by the appellant for the proposition that title should only be deduced if the buyer requests for it. Halsbury's Laws of England f1J quoted above categorically states that it is a legal requirement that title be deduced. Therefore, a diligent vendor should deduce title early in the transaction notwithstanding that there is no formal request. Further, a vendor wishing to complete must deduce title before issuing a notice to complete. -Jll- For the foregoing reasons, both the first and second grounds of appeal fail. In support of ground 3, Mr. Chileshe submitted that in declining the relief of rescission the lower court relied on Jane Mwenya and Jason Randee v. Paul Kapinga f4J where it was held inter alia that: "A sufficient note or memorandum existed of which time was not of essence. There was no unreasonable delay to complete and no completion notice was issued. Therefore, there was no basis for rescinding the contract." He went on to distinguish the facts of the cited case from the facts of the one at hand as follows: That in the case referred to, there was no undue delay in paying the balance of the purchase price as it was paid a month after the agreement was made but the vendor (1 st Appellant) refused to accept the payment alleging delay and that the house was sold to the second appellant. In the present case, the respondents have delayed to settle the balance of the purchase price for over 5 years since 2003 when a deposit totaling K39,200.00 was paid leaving a balance of KS,800.00 as found by the trial court. In the case referred to, time of completion of sale was not a term of the contract and no notice to complete was issued, therefore there was no justification for rescinding the contract. In the present case, notice to complete was issued on 2 nd October, 2007 which made -J12- • time of the essence. There being no breach of contract on the appellant's part, the appellant is entitled to the relief of rescission. In the premise he urged us to uphold ground 3 and the whole appeal and order costs to the appellant. Mr. Mwenya's arguments in opposition to the 3 rd ground were that rescission is a discretionary remedy especially in cases of sale of land. A party seeking rescission must therefore show that his or her hands are clean. To buttress this, he relied on the case of Zambia State Insurance Corporation and Helmes Transport Limited v. Joseph Chanda (TIA Link Express Motorways). f5J He also relied on the case of Crown Cork Co. (Z) Limited v. Jackson f6J where it was held that: "Where there is no express repudiation by the party in default and where time is not the essence of the contract because a notice to complete has not been properly served, a party can only rely upon implied repudiation if it can be shown that the party in default has so conducted herself as to lead a reasonable person to believe that she would not perform or would be unable to perform the contract." That the record shows that the respondent did not commit any default that would entitle the appellant to repudiate the contract. In fact, it is the appellant who was in default. Therefore, the appellant is not entitled to rescind the contract. It is clear from the record that the respondent were willing to pay as soon as title was -J13- • deduced. He submitted therefore that ground 3 lacks merit and the whole appeal should be dismissed with costs to the respondents. On the third ground of appeal, applying the case of Crown Cork Co. (Z) Limited v. Jackson f6J we are of the view that, in the present case there was no express repudiation by the appellant who had unreasonably defaulted to deduce title. Time was not of the essence because the notice to complete was not properly issued and the contract did not stipulate that time was of essence. Therefore, even if the respondent had refused to settle the balance for about five years, repudiation could not be implied because any reasonable person would under the circumstances take it that the respondent would be able to perform the contract as soon as title is deduced. The trial Judge rightly found that the appellant was to blame for the delay in completing the contract because the record shows that the appellant had the Certificate of Title in 2007 which she had even pledged to Indo Zambia Bank as security for a mortgage in 2007. Furthermore, the appellant during trial admitted to being in possession of the Certificate of Title but gave no reason for failing to give the respondent a copy thereof as a way of deducing title. The record also indicates that the appellant did not follow up performance of the contract from 2003 to October, 2007 which was a period of 4 years and yet it was the respondent who facilitated the processing of the title deed by paying her Kl, 500. 00. It is important to note that although there was no single formal written contract of sale, there was in this case sufficient memoranda from which a contract of sale could be deduced like in -J14- f the case of Jane Mwenya and Jason Randee v. Paul Kapinga. f4J Such documents were the offer letter, acceptance letter, statement accounting for the payments made towards the purchase price (document 9) and other correspondence that was exchanged by the parties. There was a clear indication of offer, acceptance and consideration signifying a legal contract of sale. Therefore, reference to lack of a formal contract of sale was superfluous. For the reasons stated above, we find no merit in ground 3. As a result, the entire appeal is dismissed with costs which should be taxed in default of agreement. Dated this 21st day of February, 2018. C. K. MAKUNGU COURT OF APPEAL JUDGE J. CHASHI COURT OF APPEAL JUDGE .. . . . COURT F A . •••.••..... GA L JUDGE -J15-