Harcharn Singh Virdy v Godfrey Chewe (Appeal 31 of 2004) [2007] ZMSC 35 (18 January 2007)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO. 31 OF 2004 HOLDEN AT KABWE (Civil Jurisdiction) BETWEEN: HARCHARN SINGH VIRDY (cid:9) APPELLANT AND GODFREY CHEWE (cid:9) RESPONDENT CORAM: SAKALA, CJ, MAMBILIMA AND SILOMBA, JJS. On the 2nd August, 2005 and 18th January, 2007. For the Appellant: Mr. S. Simuchoba, NKM and Associates For the Respondent: (cid:9) In Person JUDGMENT SILOMBA, JS, delivered the judgment of the court. The late delivery of this judgment is deeply regretted. This is an appeal against the judgment of the High Court dated the 20th of October, 2004. In that judgment, the learned trial Judge upheld the ruling of the learned Senior Resident Magistrate in which she ordered the refund of K16,000,000.00 as counter-claimed by the respondent because the contract of sale of a property (pavilion) in the Lusaka Show Grounds to the respondent for K20.000,000.00 was null and void for lack of prior written consent of the landlord, the Zambia Agricultural and Commercial Show Society. J2 The undisputed facts of the case before the learned Senior Resident Magistrate, which are repeated in the judgment of the learned trial Judge, were that the appellant was renting from the Zambia Agricultural and Commercial Show Society (hereinafter to be called "the Show Society") a pavilion known as Goldiocks Pavilion. Under the lease agreement with the Show Society, as Landlords, the appellant covenanted not to sale the Pavilion without the prior consent of the Landlord. In the year, 2001, the appellant advertised the sale of the pavilion for catering purposes. Apparently, the respondent was the only applicant who showed interest to purchase the pavilion for K20,000,000.00. Consequently, the appellant and the respondent entered into a written agreement on the 13th of July, 2001. The respondent paid K16,000,000.00 as down payment. Later, the respondent was written to by the Show Society ordering him to vacate the pavilion because he was there illegally. When the defendant carried out his own investigations, he discovered that the appellant had flouted the rules that he had with the Show Society. Consequently, the respondent refused to honour the sale agreement on the 4th of payment of the balance of K4,000,000.00 despite the fact that on the March, 2002 the Show Society gave its blessing to the sale. The appellant has filed two grounds of appeal and these are:- 1. The court below erred at law in its finding of fact that the appellant did not produce to the lower court the Society's consent in writing authorizing him to sell the pavilion. 2. The court below erred at law in finding that the contract between the parties was a nullity for want of State's consent to assign or indeed proof of ownership of the property by the appellant. J3 At the hearing of the appeal, both parties did not make oral submissions but decided to entirely rely on their respective heads of argument. In support of ground one, the appellant submitted that the Show Society granted consent to the appellant to sell the property in issue to the respondent through a letter at page 52 of the record of appeal. In the premises, it was argued that the learned trial Judge was wrong to make a finding of fact that the consent was not produced by the appellant in the Subordinate Court. With regard to ground two, it was submitted that since the appellant did not hold the lease directly from the President of Zambia, it was not incumbent upon the seller (appellant) to obtain the consent of the Commissioner of Lands at that stage of the transaction. The appellant instead relied on Clause E of the Sale Agreement he entered into with the respondent, which provided that "on receipt offull payment for the stand the seller shall write to the Agricultural and Commercial Show Society of Zambia to transfer all rights from the seller to the buyer." We were urged to allow the appeal with costs. The respondent counter-submitted that as per the letter at page 64 of the record of appeal, it was clear that the Show Society, as landlord, never sanctioned the sale of the pavilion by the appellant to the respondent; that on the 1 8th of January, 2002; when he (respondent) avoided the contract of sale, the appellant proceeded to regularize the contract by obtaining the consent of the landlord in March, 2002, an action that was inconsequential as the matter was already in court. We were urged not to disturb the finding of the lower court. J4 On ground two, the respondent counter-submitted that transactions in land had procedures for which a breach of them renders a contract a nullity. In the view of the respondent, the lower court was simply re-stating the law as it stands. On the cross-appeal, which was not opposed by the appellant, the respondent submitted that his money had been kept by the appellant despite the order to have it refunded to him. He accordingly urged us to award him interest, which the trial court failed to do despite his submission to that effect. We have carefully considered the submissions, as well as, the record of appeal. From the outset, it would appear to us, but for different reasons which we shall soon give, that the second ground of appeal has merit. We say so because the issue of obtaining the consent of the President should have not arisen at all as the issues in contention were contractual. A perusal of the judgment of the learned Senior Resident Magistrate, as a court of first instance, shows that the issue of consent under the Lands Act was never canvassed and dealt with. With respect to the finding, the subject of ground one of appeal, that the appellant never produced to the trial court of first instance the Show Society's consent in writing authorizing the appellant to sell the pavilion, our view is that the finding is valid. The question the appellant was required to answer in the affirmative is whether at the time the parties were contemplating to enter into an agreement to sale and buy the pavilion the consent of the Show Society was in place to sanction such an arrangement. J5 We say so because under Clause 9 of the lease agreement between the appellant and the Show Society, the obtaining of consent was a condition precedent. For the avoidance of any doubt, Clause 9 is reproduced and it reads:- "With regard to market valuation the pavilion after permission is given by the Society, the owner of property in consultation with the buyer will arrange to have the property valued and on the agreed price the Society is paid the property transfer fee of 2.5%." The Clause may not have been framed by a seasoned conveyancer or draftsman but the meaning is quite clear to us. It simply means that after the Show Society, as Landlord, had given permission the vendor (appellant) and buyer (respondent) were to arrange for the valuation of the property and on the basis of the agreed price, property transfer fee of 2.5% was to be paid to the Show Society. The evidence before the trial court of first instance does not show that permission of the Show Society was sought and given prior to the signing of the sale agreement, neither does it show that thereafter the pavilion was valued to ascertain the market value; that upon agreeing on the price of K20,000,000.00, 2.5% of the agreed price was paid as property transfer fee to the Show Society in compliance with Clause 9 of the lease agreement. In upholding the learned Senior Resident Magistrate, the learned trial Judge was on firm ground when he found that the sale agreement was null and void and of no effect whatsoever because there was no prior consent of the Show Society authorizing the sale of the pavilion. Further, we agree with the respondent that it was inconsequential and of no benefit to the parties for the appellant to seek the authority of the Show Society, which, in any case, was not in retrospect. J6 On the whole, the appeal is refused. Although the appellant succeeded on ground two, our view is that the ground was not necessary as it was based on a finding that was made per incuriam. In the circumstances, the respondent is entitled to costs, in form of expenses incurred both in this court and in the two courts below; in default of agreement the matter shall go for assessment before the Deputy Registrar. As for the cross appeal, we find, there being no opposition from the appellant, that the respondent is entitled to interest on the K16,000,000.00 based on the average short term deposit rate from the date of the default summons to the date of judgment and thereafter at the current lending rate fixed by the Bank of Zambia until payment. E. L. Sakala, CHIEF JUSTICE. I. M. C. Mambilirna, (cid:9) P- S. S. Silomba, SUPREME COURT JUDGE. (cid:9) SUPREME COURT JUDGE.