Dominic Chola Mulaisho and Anor v Development Bank of Zambia and Ors (2002/HP/0659) [2022] ZMHC 116 (25 March 2022)

IN THE HIGH COURT FOR ZAMBIA AT THE PRINCIPAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) 2002/HP/0659 IN THE MATTER OF: A LEGAL MORTGAGE RELATING TO J OF FARM 34a SUBDIVISION TON,LUSAKA AN ,_M.tS~~ ~ o BETWEEN: DOMINIC CHOLA MULAIS KALULUZI INVESTMENT AND PLAINTIFF PLAINTIFF DEVELOPMENT BANK OF ZAMBIA 1 ST DEFENDANT SIPHO PHIRI (Sued in his capacity as joint receiver of Kaunga Investment Limited) 2ND DEFENDANT WILLIAM KABEMBA (Sued in his capacity as joint receiver of Kaunga Investment Limited) ANNABEL FLOWERS LIMITED 3RD DEFENDANT 4TH DEFENDANT Before Hon. Mrs. Justice S. M. Wanjelani in Chambers on the 25 th day of March 2022 For the Plaintiffs: For the 1st Defendant: For the 2 n d Defendant: For the 4 th Defendant: M. Kapotwe, Messrs. Theotis Mutemi Legal Practitioners A. Simunyola, Messrs. Eric Silwamba, Jalasi and Linyama Legal Practitioners Y. Siame, Messrs. Akalutu & Associates N. Ndalameta, Messrs. Musa Dudhia & Company RULING ON 4TH DEFENDANT'S NOTICE OF MOTION TO RAISE PRELIMINARY ISSUES Cases referred to: 1. Ashmore v Corporation of Lloyd's (No. 1) (1992) 2 ALL ER486 2. United Engineering Group Limited v Mackson Mungalu (2007) ZR 3. Josiah Tembo and Henry Jawa v Peter Chimbala (2009) ZR 4. Krige and another v Christian Counsel of Zambia (1975) ZR 5. Dora Siliya and Others v the Attorney General and Others (2013) ZMHC 21 6. Dunlop Pneumatic Tyre Company Limited v Selfridge and Company Limited (1914-5) ALL ER 334 7. Muleya v Nangoyi Appeal No. 128/2018 Legislation referred to: 1. The Lands and Deeds Registry Act, Cap 185 of the Laws of Zambia. 2. The Wills and Administration of Testate Estates Act, Chapter 60 of the Laws of Zambia. 3. The High Court Rules, Chapter 27 of the Laws of Zambia 4. The Rules of the Supreme Court, 1999 1. INTRODUCTION 1.1 The 4 th Defendant filed a Notice of Intention to raise Preliminary Issues pursuant to Order 14A and 33 Rule 3 of the Rules of the Supreme Court, and the Court's inherent jurisdiction. 1.2 The application was filed on 18th March 202. However, the Court Case Record could not be traced thereby contributing to the delay in the delivery of the Ruling. 2. FOURTH DEFENDANT'S AFFIDAVIT IN SUPPORT 2.1 The Notice of Motion was accompanied by an Affidavit in Support and skeleton arguments. According to the Affidavit sworn Timothy Robert Evans, a Director in the 4 th Defendant Company, in 1996 Kaunga Investments R2 Limited borrowed a sum of USD825,000.00, from the 1st Defendant for the development of a Rose Farm at Subdivision J of Farm 34a, Lusaka (the Property), and the Chief Executive Officer of the Company, the late Dominic Chola Mulaisho, gave as Security for the Loan a mortgage over the Property in favor of the 1st Defendant. 2.2 He deposed that when Kaunga Investments Limited failed to service the loan, the 1st Defendant, on 5 th November, 2001 appointed the 2 nd Defendant and William Kabemba, as Joint Receivers of Kaunga Investments Limited. 2.3 It was averred that the 1st Defendant and the 4 th Defendant executed a Contract of Sale for the purchase of the Property on 24 th July, 2002, and that the late Dominic Mulaisho and Kaluluzi Investment Limited, subsequently commenced this action seeking to assert equity redemption. 2.4 The Deponent averred that Dominic Chola Mulaisho died on 1st July, 2013, and Michael Glenn Taylor and Kizito Kamuvwi Mulaisho, obtained Letters of Administration for his Estate on 29 th July, 2013 as per exhibit "TRE 2". He averred that 1n unexplained circumstances, Kizito Kamuvwi Mulaisho and Dominic Mazuwa Mulaisho subsequently obtained Letters of Administration on 22 nd February, 2019 as per exhibit "TRE3" and they were subsequently substituted as 1st Plaintiffs to prosecute this claim on behalf of the Estate of the late Dominic Mulaisho. 2.5 It was vied that the advice from Counsel which he believed to be true was that in order to properly prosecute this R3 matter, in relation to the Property, both sets of Letters of Administration ought to have been registered in the Lands and Deeds Registry, but this has not been done as evidenced by the copy of the Certificate of official search marked "TRE4". 2.6 It was contended further that these Proceedings cannot be prosecuted by the 2 nd Plaintiff in the absence of the 1st Plaintiffs as the 2 nd Plaintiff was never an owner of the Property and cannot claim the equity of redemption, hence the Matter cannot continue in the face of the irregularities. 3. SKELETON ARGUMENTS IN SUPPORT 3.1 The 4 th Defendant stated that it had raised the issues in order to assist the Court in identifying crucial issues that may be dealt with as expeditiously and inexpensively as possible. Reference was made to the cases of Ashmore v Corporation of Lloyd's1 1l and United Engineering Group Limited v Mackson Mungalu12 l in support of this quest of quick disposal of Matters . 3.2 It was submitted that the Lands and Deeds Registry Act (the Act) requires the registration of the probate of a Will where an interest in land exists under the estate to which the probate of the Will relates, as per Sections 2 and 5(3) of the Act. 3.3 It was contended that consequently, as the root of this dispute relates to the claim by the late Dominic Chola Mulaisho in the Property, then probate or grant Letters of Administration in relation to the Estate should have been registered at the Lands and Deeds Registry. R4 3.4 It was argued that the registration should have been done within 12 months and failure to do so renders such documents null and void. Reliance was placed on the cases of Josiah Tembo and Henry Jawa v Peter Chimbala (31 and Krige and another v Christian Council of Zambia' 4 ' for this position on non-registration. 3 . 5 The 4 th Defendant averred that as the claim by the late Dominic Chola Mulaisho was for the recovery of land which was subject of a Third-Party Mortgage, and the 1st Plaintiffs having failed to register the Letters of Administration, they have no capacity to prosecute the matter with the hope of recovering the Property which is subject of this action. The case of Dora Siliya and Others v the Attorney General and Others'5 ' was cited in aid of the position of the import of locus standi and it was stated that the 1st Plaintiffs are thus strangers to the action. 3. 6 It was further argued that whilst the Court has jurisdiction to allow an extension of time within which to register a document, this should be done in special circumstances, which are not present in this case and further that there is no such application before Court. 3.7 With respect to the 2 nd Plaintiff, it was averred that the late Dominic Mulaisho was the Mortgagee and not the 2 nd Plaintiff. It was submitted that the 2 nd Plaintiff came on the scene much later as an intending purchaser but that the sale fell through. Thus, the 2 nd Plaintiff does not have sufficient interest to prosecute the action for the purpose of redeeming the Mortgage. RS 3.8 It was contended that, in that vein, the 2 nd Plaintiff, being neither the owner of the Property or surety under the mortgage, has no equitable right of redemption and lacks locus standi to prosecute the matter. The case of Dunlop Pneumatic Tyre Company Limited v Selfridge and Company Limitedl6 l was cited for the fate of a person not being a party to a contract. 4. THE PLAINTIFFS' OPPOSITION 4.1 The 1st Plaintiffs, Kizito Kamuvwi Mulaisho and Dominic Mazuwa Mulaisho swore a joint Affidavit in Opposition, in which they deposed that their Counsel had advised and they believed, that there was no legal requirement to register the Letters of Administration of 2013 and 2019, as they do not grant, convey or transfer an interest in the land in question or purport to grant, convey or transfer such interest. 4.2 It was averred that, in addition, the registration of the Letters of Administration was immaterial to the action, because as at the date of obtaining the same, the Property in issue was already owned by the 4 th Defendant. 4.3 The Deponents stated that as advised by their Counsel which advice they believe, their locus standi to maintain or sustain the action arose from their appointment as Administrators and that, that capacity is not affected by the non-registration of the Letters of Administration at the Lands and Deeds Registry. 4.4 They deposed that for the afore-stated reasons, even the 2 nd Plaintiff has locus standi in the matter. Further that R6 by a Contract of Sale with Kaunga Investments Limited's Receivers, the Property and assets in question were sold to the 2 nd Plaintiff and thus it has an independent status to sue under the said Contract. 4.5 The Deponents further deposed, on without prejudice to the above averments, on the attempts that they had made to have the Certificate of Title issued to the 4 th Defendant cancelled while the matter was pending determination. 4.6 They also alluded to attempts to place a Caveat on the Property and to register the probate, which have proved futile to date. To this effect, various comes correspondence with the Acting Commission of Lands and Receipts were produced and exhibited as "KMDM4", "KMDM6", and "KMDM7." 4.7 The Deponents concluded by stating that the var10us encumbrances on the Property, including a Caveat by Christine Evans, claiming an interest, hindered them from registering their interest on the Property. 5. ARGUMENTS IN OPPOSITION 5.1 The Plaintiffs started by referring to the Intestate Succession Act providing for the grant of Letters of Administration to a person interested in the Estate of a deceased person who died intestate, and the case of Muleya v Nangoyi1 7 1 where the Court of Appeal stated that in the absence of Letters of Administration being granted, a person lacks capacity to commence an action on behalf of that Estate. R7 5.2 It was averred that the Plaintiffs having been granted the Letters of Administration, have the capacity to sustain the action as they are merely following the transition of the deceased's interest in the action, to themselves. This was also based on the fact that the law allows for substitution of parties where the interest has not abated on the death of a party to the suit. 5 .3 The Plaintiffs contended that the Consent Order dated 10th June, 2020, by which the 1st Plaintiffs were substituted, has not been challenged and thus their capacity in this matter should not be in dispute. They added that the 4 th Def end ant is merely delaying the matter and the challenge is an afterthought. 5.4 It was further submitted that the provisions of the Lands and Deeds Registry Act that require registration of the Letters of Administration were immaterial in this matter as at the date of obtaining the same, the land was already owned by the 4 th Defendant. Thus, the Property did not form part of the Deceased's Estate and the said Probate does not have effect over the subject Property. 5.5 The Plaintiffs further submitted alluding, in the alternative but without prejudice to the earlier submissions, the attempts to register not only the probate but also a caveat on the Property which had title in the 4 th Defendant's name, which the attempts were all in vain. 5.6 With respect to the 2 nd Plaintiff's lack of claim to the equity redemption, the Plaintiffs averred that the 2 nd Plaintiff acquired an independent status to sue arising from the R8 recession of the Contract of Sale entered into with the 2 nd and 3 rd Defendants, as the Joint Receivers. 5. 7 It was submitted that the Amended Statement of Claim shows that it contains facts upon which the 2 nd Plaintiff can attach liability to the Defendants, independent of the 1st Plaintiffs and that questions have been raised which are fit to be tried. 5.8 Relying on the provisions of Order XVI Rule 4 of the High Court Rules, it was contended that as the 1st Plaintiffs and the 2 nd Plaintiff have locus standi jointly and in the event that the Court finds that the 2 nd Plaintiff's action is not independent of the 1st Plaintiffs, the matter is sustainable by the 1st Plaintiffs. 6. 4™ DEFENDANT'S AFFIDAVIT IN REPLY 6.1 Timothy Robert Evans, deposed to an Affidavit in Reply, that Subdivision J of Farm 34a, Lusaka, rightly belonged to the Late Dominic Mulaisho and that there was nothing that prevented the Letters of Administration of 2013 from being register as the 4 th Defendant only obtained the Certificate of Title on 23 rd June, 2015. 6.2 It was averred that the Plaintiffs were able to register other documents even after Title to the Property was registered in the 4 th Defendant's name as shown by exhibit "TRE 4". In addition, it was vied that the Plaintiffs have not shown the Lodgment Schedule for the Lands and Deeds Registry to show their attempts to register their Letters of Administration on the Property. R9 7. CONSIDERATION AND DECISION OF THIS COURT. 7. 1 I have considered the Notice of Notion and the process on Record as submitted by the Parties. 7.2 The 4 th Defendant's main contention is that the Letters of Administration obtained in 2013 and 2019 respectively, have never been registered in the Lands and Deeds Registry as required by section 5(3) of the Lands and Deeds Registry Act. That consequently, the 1st Plaintiffs have no capacity to maintain this action as the lack of registration renders the Letters of Administration void with respect to these Proceedings. 7.3 The Plaintiffs, on the other hand, submitted that the non registration is of no consequence in relation to sustaining this action as they are merely continuing the Proceedings that the late Dominic Chola Mulaisho started. And further that they are not registering or transferring an interest in land. They have argued additionally without prejudice to the above, that they had made attempts to register a Caveat and Letters of Administration on the Property, which is now under Title to the 4 th Defendant, and these attempts have been in vain. 7.4 What is not in dispute is that the two sets of the Letters of Administration obtained by the Administrators of the Estate of the Late Dominic Mulaisho, have not been registered to date. The said Letters of Administration obtained on 29 th July 2013 and 22 nd February, 2019 as per exhibits "TRE2" and "TRE3" respectively, to the Affidavit RlO 1n Opposition indicate at the bottom of the following statement: "Note - If this grant affects land or any interest in land, it is required to be registered in the Lands and Deeds Registry within twelve months of the date hereof." 7.5 A perusal of the Amended Statement of Claim filed on 17th July, 2020, shows some of the reliefs being sought, and of relevance to this Notice of Motion, include: (i) a declaration that the purported sale on 24th July, 2002 by the 1st Defendant of Subdivision J of Farm 34a, Annisdale Chelstone Lusaka to Annabel flower is irregular, null and void. (ii) A .... (iii) a declaration that, in order to rescind the said Contract of Sale of 17th January, 2002, William Kabemba, their servant or employee were required at law to give fresh Notice of their Intention to the Plaintiffs. (iv) a declaration that the sale agreement made on 17th January 2002, between the Joint Receivers/ Manager of Kaunga Investment Limited is still valid and subsisting. (v) An order for specific performance of the said Contract of Sale of 17th January 2002, relating to Subdivision J of Farm 34a Annisdale Chelstone Lusaka. (vi) A declaration that the Contract relating to the sale of fixed and moveable assets of Kaunga Investments to the Plaintiffs has been frustrated by wear and tear Rll and deterioration of the said fixed and moveable assets over a period of seventeen years since July, 2002. (vii) An order that the Lands Register relating to Subdivision J of Farm 34a Annisdale, Lusaka be rectified and the Certificate of Title No. CT - 16623 issued to Annabel Flowers Limited on 23rd June, 2015, be cancelled. (viii) 7 .6 The import of the relief under (i) means that if granted, Subdivision J of Farm 34a, Annisdale Chelstone, Lusaka reverts to the late Dominic Chola Mulaisho and consequently to his Estate, which is being administered by the 1st Plaintiffs. This is an interest in land that would be subject to the provisions of the Lands and Deeds Registry Act, including the registration of the Letters of Administration. 7. 7 I note that the 1st Plaintiffs have argued that the issue of registration only arises 1n the event of conveying or transferring an interest 1n the land by the Plaintiffs. However, Section 5(3) of the Lands and Deeds Registry Act specifically and simply provides for the registration of probate of a Will affecting land or any interest in land within 12 months of the grant whether or not it is to be conveyed or transferred. 7.8 In addition, Section 44(2) of the Wills and Testate Estate Act, as cited by the Plaintiffs, provides that the R12 Letters of Administration have an effect over all the Property of the deceased. 7.9 In my view, this entails that the Letters of Administration have to be registered even for the Administrators to hold an interest in the land that had belonged to the deceased. Thus, as indicated in the Letters of Administration marked as "TRE3" and "TRE4", these Letters should have been registered within the twelve months of being granted. 7.10 The effect of non-registration has been clearly stated in Section 6 of the Lands and Registry Act as well as in the cited case of Krige and another v Christian Council of Zambia141. 7. 11 This the ref ore means that the Letters of Administration granted to the 1st Plaintiffs are null and void in relation to any matter affecting the interest in land of the Deceased. The Consent Order dated 10th June ,2020, in my view did not delve into the capacity of the 1st Plaintiffs to prosecute this Matter. I thus find that the 1st Plaintiffs lack capacity in this regard and are improperly before me. 7.12 I take note of the 1st Plaintiff's argument in the alternative but on without prejudice submissions, that attempts were made to register the Letters of Administration but all in va.1n. The Letters exhibited as "KMDM6"and "K. MDM7" refer to the alleged fraudulent purchase of the Property and attempting to place a caveat, without any mention of the Letters Administration. This alternative argument consequently, does not help the 1st Plaintiffs' case or make any difference to my findings above. R13 8. THE 2ND PLAINTIFF'S STATUS 8.1 The cardinal issue in this dispute centers around the first relief, that is, the declaration of the sale to the 4 th Defendant being void. If this were determined in favor of the 1st Plain tiffs, then the Court would have to consider the validity of the Contract from which the 2 nd Plaintiff derived its right to seek the reliefs herein. 8.2 However, having found that the 1st Plaintiffs are incompetently before me, the 2 nd Plaintiff cannot maintain this action on its own. 8.3 In addition, the basis of the dispute is the mortgage action to which, as pointed out by the 4 th Defendant, the 2 nd Plaintiff was not a Party, and the doctrine of privy of contract is very clear as to who can sue and be sued under a contract. 8.4 The Plaintiffs have argued that the Amended Statement of Claim reveals that it contains facts upon which the 2 nd Plaintiff can attach liability to the Defendants, independent of the 1st Plaintiffs. In this vein, I note the following averments in the Amended Statement of Claim filed on 17th July, 2020: Paragraph 15. On 1 7th January, 2002, Kaunga Investments Limited through its Receivers/ Manager executed a contract of sale with Kaluluzi Investments Limited for the purchase of the said Subdivision J of Farm 34a, Annisdale Lusaka for USD45, 000. 00, in respect of the said land and buildings, and the purchase of fixed and movable assets for USDl 75,250 including VATof USD 5,250. R14 Paragraph 16. The total purchase price of USD220,250 including VAT was payable by the 2 nd Plaintiff on the execution of the Contract of Sale. Paragraph 17. The 2 nd Plaintiff was unable to pay the said purchase price on execution of the contract. 8.5 The above cited Paragraphs of the Amended Statement of Claim do not reveal, prima facie, that there is a cause of action upon which liability can attach, particularly. 9. CONCLUSION 9.1 The sum total of my Ruling is that I find merit in the 4 th Defendant's Notice of Intention to raise Preliminary Issues. I find that this Matter is incompetently before me and is hereby dismissed with costs to the 4 th Defendant, to be taxed in default of agreement. Leave to appeal is granted. Delivered at Lusaka this 25th d -rr;;:r-o......._..,._ h 2022. IGH CQ l · .. I Bi I t N 1, J 6 7, llJSA J<A RlS