Chela and Anor v Parmalat Zambia Ltd (Appeal 48 of 2008) [2011] ZMSC 37 (18 January 2011)

OO i LEPC IN THE SUPREME COURT OF ZAMBIA ‘HOLDEN AT LUSAKA (Civil Jurisdiction) APPEAL NO. 48/2008 f. : BETWEEN: HUMPHREY CHELA AND GETRUDE CHELA APPELLANTS AND PARMALAT ZAMBIA LIMITED RESPONDENT Coram: Chirwa, Chibesakunda and Chibomba JUS. 24th September, 2009 and 18th January, 2011. For the Appellants: For the Respondent: Mr G M Chibembe of Messrs JMC & Associates. Mr W Mubanga of Messrs Permanent Chambers. JUDGMENT Chibesakunda, JS Delivered the Judgment of Court. Cases referred to: 1. PAYNE V. BRITISH RECORDER CO. LTD (1921) 2 KB1 2. KHAZID MOHAMMED V. THE ATTORNEY GENERAL (1982) ZR 172 Other Legislation referred to: CHESIRE, FIFOOT AND FURMSTONE ON THE LAW OF CONTRACT, 3. 4. ORDER 13 (RULE 5) OF THE HIGH COURT RULES CAP 2 5. ORDER 4(2)(9) OF THE RSC 1999 EDITION This is appeal against a High Court Judgment in a claim by the Appellants for:- (1) Specific performance of the contract of sale between the Plaintiffs and the Defendants. (2) An injunction restraining the Defendant from doing, whether by itself or by its servants or agents or otherwise howsoever, the following acts or any of them that is to say selling, negotiating for J2 sale, disposing, leasing, parting or dealing with the property situate at stand No.533 KAMBALANGE DRIVE MUFULIRA, otherwise than by.. effectually vesting the same in the Plaintiffs. oe (3) Further or alternatively, damages for breach of contract. (4) Any other relief Court deems fit (5) Costs. Before the High Court, the Appellants’ evidence in support of their claim which was not in dispute, was that the Appellants signed an Agency Agreement with the Respondent on the 29t September, 1998. In that Agency Agreement, there was a provision giving the Appellants the right to live in flat known as Stand No. 533 Kambalange Drive, Mufulira. There was also a clause in the Agency Agreement that the Appellants would be given the first option to purchase the flat in question. This Agency Agreement came to an end. The Respondent on 28 October, 2004 offered the flat in question for sale to the Appellants initially at the price of K100million. The Appellants accepted the offer but rejected the price of K100million and made a counter offer of K40million as purchase price. The Respondents accepted that counter offer of K4Omillion but wrote on the draft sale agreement that the Appellant had to pay a deposit of K2Omillion at the signing of the sale agreement and to pay the balance of K20million in two installments. The evidence of the Appellants which was disputed was that, they paid K4.5million as down payment and on the 13 June, 2006, paid another K17.5million. Their evidence is that, when they paid this 17.5million on the J3 13th of June, 2006, the Respondent refused to accept this money. On the 9th August, 2005, the Respondents sent the Appellants a notice to vacant the flat, § This was followed by a notice to terminate their relationship. - a.) The Appellants case before the High Court is that the Respondents were in breach of the contract because they maintained that, after accepting the Respondents’ offer, there was a valid contract of sale of this flat No. 533 Kambalange Drive Mufulira. Their prayer therefore was that a_ specific performance of the contract must be ordered. The Respondents’ case before the High Court was that, yes there was an Agency Agreement dated 27t December, 1998 between them and Bonita Zambia Limited. This Agency Agreement with the Appellants was to carry out certain duties on their behalf and that it was a consideration to the Agency Agreement that during the term of this Agreement with the Appellants, they would stay in this flat No. 533 Kambalange Drive Mufulira and that there would look after the flat and maintain it and keep it in a good condition. They accepted that the Appellants were to be given a first option of refusal to purchase the flat in question. They accepted that they made the offer to the Appellant after the Agency Agreement came to an end. They offered the flat at K100million initially to the Appellants. The Appellants rejected that and proposed K40million. The evidence is that Counsel who was representing both the Appellant and themselves drew up a contract of sale which he sent to the Appellants with an amended draft contract which was never sent back to them. According to them, due to inordinate delay caused by the Appellants in sending J4 back the draft contract of sale for extension, they withdrew this offer on the 19th August, 2005. According to the Respondent, after they withdrew the offer, _ the relationship that remained between them was that of landlord and tenaftt: Their evidence also is that the Appellant tried to make another payment of K17.5 on 17 June, 2006 after they had withdrawn the offer made to the Appellants and according to them; K17.5million was never received or signed for as indicated by them in their evidence. Therefore according to them, there was no agreement between the two. They told the High Court that, in fact, there was no proof that the Appellant paid K4.5million neither was there any proof that they subsequently paid K17.5million as part of the purchase price. Also according to them the payment of K17.5million was effected after the Respondent gave notice to the appellant to vacant the flat in question. In their view, they were fair to the Appellants because instead of giving them 2 months notice as stipulated in the Agreement, they were given 6 months notice. So, on the evidence before the High Court, the learned trial Judge ruled that there was no contract between the two parties and therefore, there was no breach of contract by the Respondent. So, he entered Judgment in favour of the Respondent hence the appeal before this Court. Before this Court, the, Appellants filed 2 grounds of appeal: (1) That the Court below erred both in fact and in law by holding that there was no valid contract of sale of the property in question, when there is ample evidence of offer and acceptance of the agreement to sell property situate on J5 stand No. 533 Kambalange Drive Mufulira and that consideration moved from the offeree (Appellants) to the offeror (Respondent) "Me: (2) That the Court below erred both in fact and in law by entering Judgment for the Respondent in default of defence by the Appellants under Cause No. 2007/HP/0183, when this cause was consolidated with Cause No. 2006/HP/1137 and both became one and that at the hearing, evidence was only adduced in respect of Cause No. 2006/HP.1137 and not in Cause No. 2007/HP/0183. The Court below therefore, arrived at a wrong conclusion after analyzing evidence which was presented in Cause No. 2006/HP/1137 and not in Cause No. 2007/HP/0183. At the hearing of the appeal, Counsel relied on their filed heads of arguments. In the written heads of arguments, the Appellants argued that, the Court below erred in law and in fact by holding that there was no valid contract of sale of the property in question, when there was there was ample evidence of offer and acceptance of the sale of the property in question and that consideration moved from the Appellants to the Respondent. It was argued that the amount of K4.5million was paid through the Respondent’s Advocates Messrs W. C. Lombe and Company. The Appellants made reference to pages 34 lines 3 and 4 of the record of appeal which talks about Messrs W. C. Lombe and Company as representative for the Plaintiffs and the Defendants. It was J6 argued that a further payment of K17.5million was paid by the Appellants to the Respondent although it was not accepted by the Respondent. According to, : the Appellants, on August, 2005 when K4.5million was paid, to thre Respondent, there was a binding contract capable of being enforced. So when on the 19% August, 2005, the Respondent purported to revoke the offer they had given, this was too late because the offer had already been accepted on 10th November, 2004 and 8th March, 2005. Further on 29th June, 2006 when the Respondent’s Advocates purported to have feuded this notice terminating the Landlord and Tenant relationship, the contract of sale was already valid. This was long after the offer had been accepted. So there was a legally binding contract. So why issue notice if the offer was already revoked? Counsel cited Cheshire and Fifoot’s Law on Contract? at page 50, where it says: “since the case of Payne v. Cave in 1789 that revocation is possible and effective at anytime before acceptance: up to this moment ex hypothesis no legal obligation exists” On ground 2 it was argued by the Appellants that the Court below erred in fact and in law by entering a Judgment for the Respondent in default on evidence by the Appellants in Cause No. 2006/HP/1137. It was argued that since this cause of action was consolidated with Cause No. 2007/HP/0183, the evidence adduced was for both causes of action. So the lower Court arrived ata wrong conclusion after analyzing that evidence. Citing the case of Payne v. British Recorder Co. Ltd, it was argued by Counsel for the Appellant that the main purpose of consolidation was to serve money and time. Usually J7 consolidation is ordered where there is common question of law or fact. Citing also the case of Khazid Mohammed v. The Attorney General,? Counsel, argued that a Plaintiff cannot automatically succeed whenever a defence Has failed. He must prove his case. On behalf of the Respondent, Counsel argued in his written arguments that the Court below properly considered and subsequently held that there was no valid Contract of Sale of the property in question as the Appellants failed to respond to the Respondent’s offer that the Appellants pay K2Omillion deposit as down payment on signing of the contract and subsequently to pay two K10million installments making a total of K4Omillion as purchase price. Counsel argued that, the principle of consensus ad idem legally makes an agreement a legally binding contract, as there must be a mecting of the minds of both parties. It entails that both parties must agree to the same thing in the same sense. In this case, Counsel pointed out that the minds of the Appellants and the Respondents had not met. There was no expression of mutual and final assent necessary to complete a binding agreement. In this case, the two parties had not gotten to that stage. He submitted that the following circumstances established that there was no consensus ad idem by two parties: (a) That the letter from the Appellants’ Advocates to the Respondent of 8th March, 2005 was meant to be sent back to the Appellants’ Advocates in order to prepare a real contract of sale by way of response. J8 (b) The draft contract of the sale at page 196-199 of the record which provides for purchase price of K4Omillion upon the. accompanying terms and conditions but in the same draft contract under special conditions, there is a provision of payment of deposit of K14million and the balance to be paid in 3 installments starting from the proceeding 30 days after the said exchange of contract. This provision is a sharp departure or variation from the offer by the Renpondent endorsed at page 195 of the record which was the endorsement for a down payment of K2Omillion and two K10million installments and therefore is a counter-offer which is clear indication that there was nothing conclusive culminating into a valid contract but was only evidence of ongoing negotiations. (c) On 3 August, 2005 there was a purported payment of K4.5million deposit by the Appellants towards the purchase price to Messrs W. C. Lombe And Company. This is in a letter at page 200 of the record. this letter referred to the fact that the Appellants’ Advocates were still obtaining instructions regarding certain special conditions in the draft instructions regarding certain special conditions in the draft Contract of Sale and that they would revert to Messrs W. C. Lombe and Company as soon as they have been given further instructions. There was no definite explanation or evidence in the said letter to the effect that the Respondent’s offer to the Appellant was accepted. J9 (d) There is also reference to the sum of K17.5million which the Appellants claim to have paid to the Respondent on the13t» June,_ 2006 as deposit for the purchase of the property in question. There was no evidence as to how that figure was paid and how the balance was to be paid if at all. This again does not tarry with the Respondent’s endorsement that they should be_ three installments. Anchoring on all these facts, Counsel argued that it must come out clearly that there was no consensus ad idem and as such no contract of sale between the two parties existed. He referred to the learned authors of the book Chesire, Fifoot And Furmstone On The Law Of Contract? at page 28, toa passage which reads: “In order to determine whether in any given case, it is reasonable to infer the existence of an agreement” it has long been usual to employ the language of offer and acceptance. In other words, the Court examines all the circumstances to see if the one part may be assumed to have made a firm ‘offer’ and if the other may likewise be taken to have ‘accepted’ the ‘offer’ In response, on the document at pages 194-195 of the record, Counsel argued that those documents would have constituted an offer and acceptance, had the offer of K100million, as indicated by the Respondent as purchase price, been accepted by the Appellants. That would have amounted to acceptance to the Respondent’s offer and that would have amounted to entering into a binding contract. Counsel further pointed out that, it is J10 common ground that the Appellants instead counter offered to buy the flat in question at K4Omillion as the purchase price. It is also common ground that, “the Respondent responded by accepting that offer conditionally with: (a) tiiat the Appellants should pay K2Omillion at the signing of the contract and (b) pay K20million in two installments. It is common ground that the Appellants did not indicate whether or not they accepted this counter offer by the Respondent. This shows that there was no ‘consensus ad idem as there was no mutual assent necessary to bring about a binding spusmineit Then the Respondent further told the Court that it made an initial offer of selling the flat in question for K100million. The Appellants paid K4.5million as down payment. This payment on their behalf would have been regarded as consideration moving from them had the Appellants accepted the offer by the Respondent to buy the flat in question for K100million. But the Appellants rejected that offer and made counter offer. On ground 2, Counsel cited Order 13 (Rule 5) of the High Court Rules Cap 273 and Order 4(2)(9) of the RSC 1999 Edition* and argued that the import of the provisions cited was with regard to what types of causes or matters that can be subject to consideration. He argued that it is causes or matters where these have same common questions of law or facts both in all of them as was in this case. He went on to argue that although it is common ground that the main purpose of consolidation is to save costs, it is equally trite law that the parties do not abandon their respective claims and their right to reliefs claimed. So they are in turn under an obligation to argue and at the Jil same time to defend their respective causes. So now, in the present case, the Appellants failed as they never presented in Court their case, whereas the... Respondents successfully proved its case in cause No. 2007/HP1137. Fa *s We have read the record of appeal and also considered the issues in this appeal. After looking at the facts and taking into account the legal proposition, it is clear to us firstly that, even if the Appellants paid the amount of K4.5million, that would not have advanced their case because the Appellants did not accept the Respondent’s offer to buy the flat in question at K100million. Had they accepted that offer, the payment of K4.5million would have been considered as consideration moving from the Appellants to the Respondent and that could have brought about a binding contract. However, in this case, the Appellants instead of accepting that offer to purchase the flat in question at K100million, counter offered to buy the property for K4Omillion. That was not the end of the story. In response to this offer, the Respondent also counter offered to the Appellants in that they demanded that the Appellants pay K40Omillion in two installments, the first of K2Omillion to be paid at the signing of the contract and the other K20million to be paid in two subsequent K10million installments. Again that offer was not accepted by the Appellants. In our view this is a classic example of case where the minds of the two parties never met. So there was no agreement on the same thing in the same sense. We are therefore satisfied that there was no binding contract between the parties. What comes out in the record is offers and counter offers which have no legal effect. Using the words of the learned authors of Chesire, Fifoot And Furmstone On The Law Of Contract;, “revocation is J12 possible and effective at any time before acceptance.” Ground one of the appeal therefore has no merit. Coming to ground 2, we accept the Counsel for the Respondents » submission that it is trite law that every claimant in any matter has an obligation to prove his or her case on a balance of probabilities. It is also equally trite law that the import of the provisions cited, with regard to consolidation on causes of action or matters, is to save on costs. However, it does not take away the obligation of any litigant to prove his/her case or to defend his/her rights. In this case according to what is on record, after consolidation, the Appellants failed to present their case before the Court. The evidence which is on record establishes that there was no contract between the two parties. Also the Appellants coming to Court, seeking an equitable remedy “must come with clean hands.” They failed to pay a deposit of K2Qmillion. Therefore they are not coming to Court with clean hands. So they cannot succeed. Ground 2 also has no merit. Because of the foregoing, we find no merit in the appeal. We dismiss it. Considering the condition of the parties, we make no order on costs. SUPRME COURT JUDGE dy ohh L. P. Chibesakunda SUPREME COURT JUDGE J13 H. Chibomba SUPREME COURT JUDGE