Johnson Kabwe v ZESCO Limited [2019] ZMCA 367 (27 June 2019)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT NDOLA (Civil Jurisdiction) APPEAL N9 120/2018 BETWEEN: JOHNSON KABWE cOj APPELLANT AND ZESCO LIMITED Al 27 . Jlw 2,919 CIVIL REGISTRY 2 RESPONDENT CORAM: Chashi, Lengalenga and Siavwapa, JJA On 20" February, 2019 and June, 2019. 27th For the Appellant: (cid:9) In person. For the Respondent: (cid:9) Mr. Mileji - In-House Counsel JUDGMENT LENGALENGA, JA delivered the Judgment of the Court. Cases referred to: 1. ZAMBIA CONSOLIDATED COPPER MINES LTD v JOSEPH DANIEL CHILESHE - SCZ JUDGMENT N9 21 OF 2002 2. THE RATING VALUATION CONSORTIUM & ANOR v THE LUSAKA CITY COUNCIL & ANOR (2004) ZR 109 (SC) 3. NDONGO v MULYANGO & ANOR (2011) 1 ZR 187 Ji Legislation referred to: 1. THE LIMITATION ACT OF 1939 Other works: 1. TREITEL, THE LAW OF CONTRACT, Twelfth Edition. This is an appeal against the High Court's ruling dated 16th May, 2018 by which it dismissed the substantive matter for being statute barred. The background to the appeal is that the Appellant commenced an action by way of Writ of Summons on 15th April, 2017 in which he sought the following reliefs: (I) (cid:9) An order for specific performance in relation to the sale of Stand N2 144, Kawambwa, Luapula Province. (ii) Damages for mental distress and inconvenience. (iii) An order for interim injunction to restrain the defendant from evicting the plaintiff from Stand NO- 144, Kawambwa. 144, The said action arose from an application that the Appellant had made to purchase Stand NQ 144, Kawambwa, also known as the old ZESCO Offices, for use as a guest house. By a letter dated 8th June, 1988, the Appellant applied to the Respondent to rent and eventually purchase the said J2 property. In response to the Appellant's application, the Respondent by a letter dated 12th July, 1988, offered the said property to the Appellant for rent at a monthly rental of K100.00 (unrebased) with effect from 15t August, 1988, with a view to selling it once it was valued. Consequently, the Appellant duly renovated the said building and operated it as a guest house up to the time he was asked to vacate the premises. From the time the Appellant started operating the property as a guest house up to the time of being asked to vacate the premises, the said property was valued twice. The first valuation was done in 1995 and the report is dated 19th May, 1995, however, the Appellant did not pursue the issue of the purchase. A second valuation was done years later and the valuation report is dated 7th June, 2002 and the Appellant did not follow up on the issue of purchasing the property. Both valuation reports were only valid for a period of six months from date of issuance. Thereafter, neither party took any further steps in the matter for over a decade until the Respondent, by letters dated 13th November, 2013 and 4 March, 2014 respectively gave the Appellant notice to vacate the subject property. J3 The Appellant reacted to the Respondent's eviction notice by seeking legal redress and filed this action in the High Court. However, before the main matter could be heard, the Respondent filed a notice to raise a preliminary issue that the action was statute barred. It relied on section 4(3) of the Limitation Act, 1939, which limits the institution of an action involving the recovery of land to twelve (12) years from the time when the right of action accrues to a person. After considering the Respondent's application, the court below concluded that the valuation report dated 1 91 May, 1995 effectively expired on 19th November, 1995 without the Respondent making an offer to the Appellant and without the Appellant pursuing the offer to purchase the subject property. The court below found that the Appellant's cause of action accrued on 19th November, 1995 when the first valuation report expired. It therefore, determined that 19th November, 1995 was the effective date when time started running for the Appellant to have commenced his action for specific performance against the Respondent. The court below was also of the view that neither the 7th June, 2002 valuation report nor negotiations between the parties could have stopped J4 the time from running (see ZAMBIA CONSOLIDATED COPPER MINES LTD v JOSEPH DANIEL CHILESHE1). Consequently, the court below found that the Appellant's action was commenced after the expiry of the statutory twelve year period from the date when the cause of action accrued. It was of the view that the Appellant's action was statute barred and it, accordingly, dismissed it. Being dissatisfied with the said Ruling, the Appellant appealed to this Court and advanced one ground of appeal as follows: "The court below erred in both law and fact when it held that November, the Appellant's cause of action accrued on 1995, in light of the evidence that the Respondent did not offer the said property to the Appellant on the said date." 191h Heads of argument were filed into court on behalf of both the Appellant and the Respondent to support their respective positions. We have considered the evidence on record, the Ruling appealed against, heads of argument, authorities cited and the sole ground of appeal. In light of the view we take of this appeal, we do not find it necessary to recapitulate the arguments. (cid:9) In his action against the Respondent in the court below, the Appellant sought specific performance in relation to the sale of Stand NP 144, Kawambwa, Luapula Province and damages for mental distress and inconvenience. (cid:9) Matters relating to specific performance have been deliberated on and determined in numerous cases. What is apparent upon our perusal of the Appellant's sole ground is that it is based on what he perceives as a cause of action arising from the Respondent's promise to sell him the subject property once it was valued. We are mindful that the court below determined this matter based on the preliminary issue raised by the Respondent that the action was statute barred and dismissed it on that basis. However, after considering the facts of this case from the record, we are of the view that the issue of limitation of time can only arise where there is a cause of action. It is the Appellant's contention that the Respondent's letter of 12th July, 1988 constituted a binding contract between the parties as the Respondent undertook to sell the subject property once it was valued. We have noted, however, that whilst the Respondent had expressed an intention to sell the said property to the Appellant in the future, it leased out the property to him pending the valuation of the same. The J6 letter of 12th July, 1988 even referred to the Respondent sending tenancy agreement forms to the Appellant for completion. We, however, observed from the record and the arguments by both parties that, there is no reference to an offer for the sale of the property. We noted that the letter of 12th July, 1988 by which the Appellant was offered a lease of the property, referred to the Respondent selling the property after it was valued. We, however, further noted that even after two valuations were done as evidenced by the valuation reports dated 19th May, 1995 and 7th June, 2002 respectively, no offer was made by the Respondent to the Appellant. The Appellant never produced any evidence of any such offer and he did not pursue the Respondent to sell the property. The Respondent expressed doubt if at all, the letter of 12" July, 1988 constituted a binding contract between the parties as contended by the Appellant. For guidance, we called in aid the case of THE RATING VALUATION CONSORTIUM & ANOR v THE LUSAKA CITY COUNCIL & ANOR2 where the Supreme Court considered whether communication in J7 form of letters between the parties constituted a contract and held inter al/a that: 111. The approach of analyzing the process of reaching business relationships in simplistic terms of offer and acceptance, gives rise to complications. (cid:9) What is required is for the court to discern the clear intention of the parties to create a legally binding agreement. 3. (cid:9) It is generally and legally accepted that parties can reach a provisional agreement and then agree to set it out in a formal document later. Such an agreement is legally binding." We must, however, hasten to point out that the cited case is distinguishable from the present case because in that case there was continuous correspondence between the parties over a period of time. Whereas in the present case, once the Appellant took possession of the Respondent's building as a tenant and converted it to a guest house, he became complacent and did not pursue the issue of the purchase with the Respondent despite the fact that the property was valued twice over a period of twelve years. In the circumstance, we cannot consider the letter of 12th July, 1988 as a legally binding agreement, especially since the Respondent's intention at J8 that time was clear that they would initially enter into a tenancy agreement with a view to sell the property. We further had occasion to look at TREITEL, THE LAW OF CONTRACT, Twelfth Edition, para 1-001 where the learned author defined a contract as an agreement that gives rise to obligations which are enforceable and recognised by law. He further stated that: "The factor which distinguishes contractual from other legal obligations is that they are based on the agreement of the contracting parties." Furthermore, since Stand N9 144, Kawambwa comprises real property, any sale or disposal of interest in it should be in writing or evidenced by a memorandum in writing for it to be enforceable. Hence the Supreme Court's observation and decision in the case of NDONGO v MULYANGO & ANOR3 that: "The purchasing of real property should not be taken as casually as purchasing of household goods." In the circumstances, we are of the considered view that since there is no evidence of contract having been executed between the Appellant and the Respondent, we find that the Appellant has no cause of action. J9 Consequently, the issue of limitation of time does not arise, as time can only start running from the date when the cause of action arises. Therefore, we find that the action was properly dismissed, albeit, not for the reasons given in the court below, but for the reasons we have stated. In conclusion, we find that the sole ground of appeal is devoid of merit and we, accordingly, dismiss it with costs for the Respondent. J. Chashi COURT OF APPEAL JUDGE F. M. Lengalenga COURT OF APPEAL JUDGE M. J. Siavwapa COURT OF APPEAL JUDGE