Badwi Construction and Transport Limited & Another v Abdi (Appeal 43 of 2015) [2017] ZMSC 95 (8 September 2017)

Ji IN THE SUPREME COURT OF ZAMBIA HOLDEN AT NDOLA (Civil Jurisdiction) APPEAL NO. 43/2015 SCZ/8/014/2015 BETWEEN: BADWI CONSTRUCTIO MOHAMED JAMA AND 1ST APPELLANT 2ND APPELLANT MOHAMED AHMED ABDI RESPONDENT Coram: (cid:9) Hamaundu, Kaoma and Musonda, JJS on the 5th and 8th September, 2017 For the Appellants: (cid:9) Mr. K. Msoni of J B Sakala & Co. For the Respondent: (cid:9) N/A JUDGMENT MUSONDA, JS, delivered the Judgment of the Court Case referred to: 1. R v. Paddingon (1947) 1 KB 666 Legislation referred to: Lands and Deeds Registry Act No. 40 of 2010 Other Works referred to: White Book (1999 edition) Order 2/2/4 This appeal is arising from a judgment of a High Court Judge sitting at Kabwe who had pronounced a motley of reliefs in favour of the respondent, then plaintiff, consequent upon the (cid:9) (cid:9) J2 appellant, (then defendant)'s failure to honour his side of a written contract which had involved an exchange of the respondent's wife's acid tanker truck with the appellant's two real properties and some cash consideration in the sum of US$ L500.00. The background facts and circumstances which had animated this appeal are of undoubted perspicuity and can briefly be recounted. The 2nd appellant and the respondent are both businessmen of Somali origin resident in Zambia. The 1st appellant is a private limited company incorporated in the Republic of Zambia while the 2ndappellant serves as a director in the 1st appellant company. Sometime prior to 24th October, 2012, the respondent's wife by the name of Zam Zam Ahmed Aden imported an acid tanker from the United Kingdom. According to the evidence which the respondent had placed before the trial court, the acid tanker was owned by the respondent's wife (Zam Zam Ahmed Aden) and the respondent's sister. At some point, the respondent's wife J3 decided to put the acid tanker up for sale and gave her husband the responsibility of managing the sale. One of the persons that had expressed interest in purchasing the tanker was the 2nd appellant who, subsequently, discussed and concluded the transaction with the respondent. Among the terms which the respondent and the 2nd appellant agreed upon was the purchase price which was fixed at USD35,000.00 while the other was that the respondent was going to deliver the tanker to the 2nd appellant's place in Ndeke compound, Ndola. The third significant issue which the respondent and the 2nd appellant had to resolve related to the mode of settling the agreed price The 2nd appellant indicated to the respondent that he did not have cash but proposed to settle the agreed price by way of offering two plots in Serenje being Stand Numbers W.200 and 201, Serenje plus a cash sum of USD1,500.00. On 24th October, 2012 a Letter of Sale was signed between Badwi Construction and Transport Limited of Ndola and Zam Zam Ahmed Aden of Serenje. The substance of the letter of sale in question was that Badwi Construction and Transport Limited J4 had bought the acid tanker trailer in question from Zam Zam Ahmed Aden of Serenje and that the transaction was of the character of barter whereby Badwi Construction and Transport Limited was to receive real properties being Stand Numbers 200 and 201, Serenje in exchange for the tanker in question and a cash sum of USD1,500.00. The respondent subsequently delivered the tanker to the appellants while the latter also yielded vacant possession of the real properties in question to the respondent. In spite of the respective steps which the parties to the barter transaction had taken, the 2nd appellant refused to surrender the original certificates of title relating to the two real properties which had been the subject of the transaction in question. The basis of the 2nd appellant's refusal to surrender the said title deeds was that the tanker which had been delivered to him was allegedly not an acid tanker but a milk tanker. In consequence of the dispute which subsequently ensued between the 2nd appellant and the respondent, the latter caused an action to be instituted in the High Court of Zambia at Kabwe. In terms of that action, the plaintiff sought the following reliefs: J5 1. An Order of Specific performance of an agreement of sale of Land. 2. An Order that the Defendants should surrender Original Certificates of Title for Stands 200 and 201 Serenje to the Plaintiff. 3. An Order that the Defendants effect change of ownership and Execute Deeds in Favour of the Plaintiffs and to pay all such Property Transfer Taxes as may be necessary for the Transactions herein. 4. Damages for breach of Contract. 5. An Order that the Plaintiff is entitled to Possession of the said pieces of land. 6. Any other relief the court deems fit. 7. Interest. 8. Costs." The matter was subsequently tried before a High Court judge sitting at Kabwe. The gist of the respondent (then plaintiffs case as it was unraveled before the learned trial judge below was that, having regard to the substance of the Letter of Sale, the appellants (then defendants) were obliged to fulfill their part of the barter transaction in question by facilitating the transfer of title in the two real properties in question to the respondent and/or his wife. For their part, the appellants pleaded in their defence that the respondent had no contractual relationship with them while J6 the party that had executed the barter contract with them, namely, the said respondent's wife, was not the registered owner of the tanker. (cid:9) According to the appellants, the factors highlighted above, coupled with the respondent's alleged failure to settle the USD1,500.00 which had formed part of the respondent's quid pro quo in the barter transaction in question constituted fundamental breaches which had entitled them to resile from that transaction. It is worthy of note here that when the matter was tried before the court below, the key factor which the 2nd appellant articulated as having informed the appellants' decision to resile from the transaction in question was that the tanker which was delivered to the appellants was different from what they believed to have purchased. The learned trial judge considered the evidence which had been placed before him in the context of counsel's submissions thereon and proceeded to uphold the respondent's claim for specific performance. The learned judge accordingly ordered the appellants to perform their part of the barter transaction in question and secure the transfer and vesting of legal title in the real properties earlier identified in the name (cid:9) - J7 The learned judge further ordered that the then pending transfer of title to the real properties in question as between a Mr. Sundi and the 2ndappellant be proceeded with on the basis of having the said Mr. Sundi directly transfer the properties to the respondent and that the costs involved be borne by the appellants. In reaching his Lordship's conclusion as aforesaid, the learned judge had found, as facts, that a valid contract (the barter) had emerged involving the parties earlier identified and that Stand Numbers 200 and 201, Serenje, had been sold by a Mr. Ibrahim Sundi to the 2nd appellant and that, so far as this last transaction was concerned, the only outstanding issue was that of having legal title in the properties in question conveyed by Mr. Sundi to the 2d appellant. With regard to the contention by the 2' appellant that the tanker which the appellants had purchased was not of the description that they believed it was, the learned trial judge swiftly discounted the same on the basis that the 2nd appellant had the opportunity to inspect the tanker before signing the contract which he had signed. Leaving the issue of signing the contract aside, the learned judge observed that the 2nd appellant J8 had asked his cashier to inspect the tanker and that the cashier had given a favourable report as the 2nd appellant's agent. Finally, the learned judge discounted the appellants' contention that the respondent lacked the necessary standing to sue on the footing that the 2nd appellant had admitted in evidence that he had been dealing with the respondent in his capacity as his wife's authorised agent. In sum, the trial judge dismissed all the arguments which the appellants had advanced for the purpose of distancing themselves from the contractual obligations which the contract in question had imposed upon them. The appellants were not satisfied with the outcome of the respondent's action in the court below and have now escalated their dissatisfaction to this court on the basis of the following grounds which are contained in the memorandum of appeal: "GROUND 1 The learned trial judge erred in law and in fact when he found that a valid contract was entered into for the exchange of an acid tanker with two properties situated in Serenje between the Plaintiff and the Defendant because there is sufficient evidence showing that the Plaintiff had no locus standi to sue the Defendants. J9 GROUND 2 The learned trial judge erred in law and fact when he made an order to enforce a contract of sale between the Plaintiff and the Defendants when evidence was presented to the court showing that property known as plot number 201, Serenje was encumbered as there was a caveat placed on it by a third party. GROUND 3 The court below erred when it ordered that a direct transfer of ownership of properties from Mr. Sundi, the seller to the 2nd Defendant, to the Plaintiff be effected when there was no agreement between Mr. Sundi and the Plaintiff. GROUND 4 The court erred in law when it made an order directing the Defendants to pay for the cost of the transfer of the properties which are subject of these proceedings as the parties did not agree that the Defendants would meet all costs relating to the transfer. GROUND 5 The learned Judge erred when he held the 2nd Defendant, a director of a limited company personally liable for acts of the 1st Defendant. Counsel for the appellants filed Heads of Argument to buttress the grounds of appeal as they had been set out in the memorandum of appeal. In relation to the first ground, counsel for the appellants argued, in effect, that the respondent did not have the appropriate standing in law to institute or to proceed with the J10 action which had been instituted in the court below and which had culminated in these proceedings given that he was not a party to the contract which was the subject matter of the court action which culminated in the present appeal. To support this proposition, counsel drew our attention to the judgment of Lord Denning in R v. Paddingon' where the learned judge remarked that: "... the court would not listen, of course, to a mere busy body who was interfering in things which did not concern him. But it will listen to anyone whose interests are affected by what has been done." In the view of counsel for the appellants, the mere fact that the respondent was the husband of Zam Zam Ahmed Aden did not create or give rise to locus standi in the way of entitling him to sue on his wife's behalf. Counsel further contended that if the respondent had desired to sue on behalf of his wife, he ought to have secured an appropriate power of attorney for that purpose. In relation to the second ground, counsel for the appellants argued that in the course of the proceedings in the court below the court was infoiiiied that one of the properties (that is, Stand No. 200 Serenje) which had formed part of the consideration for the barter transaction in question had a caveat on it on account ill of a loan which had not been repaid by a Mrs. Sundi. This evidence, according to counsel, was not challenged in the court below. Counsel accordingly submitted that the trial judge seriously erred when he ordered that the 1st and 2nd defendants (now 1st and 2nd appellants) must perform the contract in question. In the view of learned counsel, the contract was incapable of being performed at law. Under ground three, the learned counsel for the appellant argued that it was totally erroneous for the learned judge to have ordered that there should be a direct transfer of ownership of the properties in question from a Mr. Sundi, who had sold those properties to the 2nd appellant, to the respondent or his wife given that Mr. Sundi was not a party to the contract which Zam Zam Ahmed Aden had entered into with the appellants. Counsel further contended that Mr. Sundi had only dealt with the 1st appellant but not with the respondent. With respect to the 4th ground of appeal, learned counsel criticised the judgment/order of the learned judge in terms of which his Lordship had directed the defendants (now appellants) to meet the cost of the conveyance of the real properties in question to the plaintiff (now respondent). Cnh,nQ1 i--'---'- J12 that the learned judge misdirected himself when he pronounced the order requiring the appellants to meet the conveyancing costs earlier alluded regard being had to the fact that the contract of sale between the parties made it clear that all the parties to the contract in question were to share the change of ownership costs. With respect to the fifth and final ground of appeal, counsel for the appellants contended that the trial judge fell in error when he ordered the 2nd appellant, who was a director in the 1St appellant company to assume personal liability for the acts of the 1st appellant. Counsel contended in this regard that the barter contract in question had been entered into between the respondent's wife and the 1st appellant which is a separate legal entity and which is liable for its own acts or omissions. Counsel for the respondent did not react to the appellants' Heads of Argument byway of filing their own Heads of Argument. We are indebted to counsel for the appellant for the brevity and clarity of his arguments. Counsel for the appellants attended the hearing of the appeal and indicated to us that he filed HeIs nf (cid:9) -- J13 which he entirely relied to buttress the appellants' grounds of appeal which had been reduced to four following his decision to abandon ground two (02). The appellants' counsel also indicated to us that the respondent, who was in court, had informed him that his counsel, Mr. Tutwa Ngulube, had been taken ill and could not attend court. We confirm that, following our confirmation that the Notice of hearing relating to the appeal had been served on the parties we indicated to counsel present that we were going to proceed with the hearing of the appeal and added that even if Mr. Tutwa Ngulube, counsel for the respondent had been present, we were not going to hear him given that he did not even file the respondent's Heads of Argument. We have given anxious consideration to the grounds of appeal and the arguments which counsel for the appellants canvassed before us in the context of the judgment of the court below which is now being assailed by or on behalf of the appellant. J14 We must say, from the outset, that we have been at pains to appreciate what, precisely, the appellants are complaining about under the 1st ground of appeal. According to this ground, the trial judge, "... erred in law and in fact when he found that a valid contract was entered into for the exchange of an acid tanker with two properties situated in Serenje between the plaintiff and the defendant because there is sufficient evidence showing that the plaintiff had no locus standi to sue the defendants." What exactly are the appellants saying in this ground? Are they saying that the barter contract in question was not valid because ". . . the plaintiff (now respondent) had no locus standi to sue the defendants (now appellants)?" If we should understand this ground as questioning the respondent's right or entitlement to take out this action in the court below, our reaction would be that it was a little too late in the day for the appellants to have cried foul at the time when they did. According to the finding of the trial judge, "...it [was] not in dispute that the seller of the tanker [was] Zam Zam and ... Zam Zam is the plaintiff [respondent]'s wife. The 2nd defendant [now appellant].., admitted that he was dealing with J15 the [respondent] as an agent of Zam Zam (who) had authorised the (respondent) to sign the [barter] contract on her behalf." According to the learned trial judge, "Having accepted that arrangement, the 2nd [appellant] is now [estopped] from alleging that the [respondent] had no locus standi to sue [the 2nd appellant]." We would respectfully agree with the reasoning of the learned trial judge. Indeed, the issue was never in doubt that the respondent had transacted with the appellants in his capacity as his wife's agent. Not only did the respondent represent to the 2nd appellant that he had actual authority to bind his wife as his principal but had disclosed who that principal was. Indeed, the fact of the respondent having been acting in the manner we have described above was never contested by the appellants or either one of them. Leaving aside what we have adumbrated above, there is also the question of how the appellants had reacted to the institution of the legal action by the respondent. The record reveals that, at the time when the relevant court process was taken out by the respondent in the court below and subsequently served upon the appellants, the latter did not do anything or take any step which wnhllrl Ho J16 the irregularity which is implied in ground one of the appeal. Instead, the appellants proceeded to unconditionally appear to the writ of summons that had been taken out against them and, thereby, waived any irregularities in the institution or service of the court process in question. The White Book (1999 edition) notes in Order 2/2/4 that: "Steps taken, with knowledge of an irregularity, either with a view to defending the case on the merits.., or to obtain an advantage such as security for costs ... will waive irregularities in the institution or service of proceedings since they could only usefully be taken on the basis that the proceedings were valid." In the context of the action which the respondent had taken out in the court below, it was doubtlessly open to the appellants to nip the respondent's action in the bud on the basis that it had been instituted by a party (the respondent) who, according to the appellants, had no legal right to do so. Indeed, even the appellants' apparent grumbling in their defence over the appropriateness of the action amounted to nothing in the absence of the necessary pre-emptive strike which could have served to thwart the 'irregular' court action. The net effect of the foregoing is that ground one fails. J17 As to ground three, the lower court found, as fact, that the two real properties, namely, Stand Numbers 200 and 201, Serenje which were the subject of the barter transaction in question had been sold to the 2nd appellant by Mr. Ibrahim Sundi on 15th January, 2010 and that the only issue which had remained outstanding was that of effecting transfer of ownership. Under these circumstances, the learned trial judge reasoned that the question of the defendants' entitlement to dispose of the said real properties was virtually guaranteed. The court below also found, as a fact, that, in point of fact the original certificate of title relating to Stand No. 200, Serenje had already been surrendered to the 2nd appellant while the necessary authority to transfer legal ownership to the 2nd appellant had already been granted. The learned trial judge also correctly discounted the argument that the caveat on one of the two real properties could stand in the way of effecting the transfer in question. Having regard to the findings of the trial court, we really are in great difficulty to appreciate why the reasoning and conclusion of the trial judge is being assailed via this ground. In the view that we have taken, the learned trial judge had adopted J18 a realistic, practical and cost-effective approach towards the resolution of the dispute which had been thrust upon that court. Given the position which the record reveals, namely, that the then pending transfer of the properties in question by Mr. Sundi to the 2nd appellant was nothing beyond a mere formality, the apprehension which the appellants raise via ground three is more fictitious than real. We also find it rather odd and preposterous that the appellants should be turning a blind eye to the cost ramifications of the apprehension which they have packaged as ground three while, at the same time, mounting a strong objection founded on costs in ground four. In all seriousness, ground three has to incur the same fate as did the first ground of appeal. As to the fourth ground of appeal, the appellants' grievance as expressed in this ground revolves around the order of the trial judge directing the appellants to meet the cost of the transfer of ownership in the two real properties which were the subject of the barter transaction to the respondent. We have considered this ground in the context of the Letter of Sale evidencing the barter transaction in question, the J19 judgment appealed against and all the circumstances surrounding this appeal and have come to the conclusion that the order of the court below now under attack via this ground did not sit well with the primary outcome of the judgment in question so far as that outcome can be related to the primary relief which the respondent was seeking in the court below. Earlier in this judgment we did unpack the various reliefs which were being sought by the respondent in his action in the court below. In his judgment, the learned trial judge upheld such of the relief that the respondent was seeking as was going to effectuate the meaning and effect of the barter transaction in question. That meaning, in our view, entailed having the parties to the barter transaction specifically perform or discharge their respective obligations under the subject transaction. It is also worthy of note that the Letter of Sale which had evidenced the barter transaction in question had clearly obligated all the parties to the transaction to meet the costs relating to change of ownership. Having regard to the foregoing and having further regard to the fact that the court below pronounced legal costs in favour of the respondent, we take the view that the order directing the appellants to meet the cost of J20 the transfers earlier mentioned must be disturbed. In its place, we order that the respondent will meet the registration charges as prescribed under the Lands and Deeds Registry Act No. 40 of 2010 while the appellants will meet all the usual costs that are ordinarily met by sellers in conveyancing transactions including property transfer tax, ground rent, lease charges and consent to assign fees. As to the fifth and final ground of appeal, we have been at pains to locate where, in the judgment under attack, the learned judge below "held" or directed that the 2nd appellant should personally be liable for the acts of the 1st appellant. Which, if we may ask, were these (presumably wrongful) acts of the 1st appellant that the court below ordered or directed the 2d appellant to assume personal liability for? Unfortunately, not even the appellants' arguments relative to this ground identified the portion or section of the judgment of the court below which speaks to what is being alleged in ground five. Indeed, even the pages of the record which have been suggested in the appellants' Heads of Argument have absolutely nothing to do with the allegation or assertion being made. Under these circumstances, we have no difficulty to come J21 to the conclusion that the appellants' assertion or allegation as embedded in ground five is wholly illusory. Accordingly, we dismiss this ground. In sum and save to the extent indicated under ground four, this appeal fails and stands dismissed with costs. E. M. HAMAUNDU SUPREME COURT JUDGE R. M. C. KAOMA SUPREME COURT JUDGE M. MUSONDA, SC SUPREME COURT JUDGE