Mulwanda v Sichilongo (Appeal 28 of 1990) [1991] ZMSC 43 (18 February 1991)

IN THE SUPREME COURT OF ZAMBIA Appeal No. 28 of 1990 HOLDEM AT LUSAKA (Civil jurisdiction) MANSON SIMFUKUE MULWANDA Appellant -v- SA3ST0N DONALD SICHILONGO Respondent CORAM: Ngulube, D. C. J., Gardner, AJ. S. and Chaila, U. S. On 7th November, 1990 and 18th February, 1991 For the appellant: L. P. Mwanawasa, of Mwanawasa and Company For the Respondent: R. E. Mwape, of Mwape and Company JUDGMENT Ngulube, D. C. J. delivered the judgment of the court Cases referred to: ___ 1) Kapembwa -v~ Malmbolwa and Attorney-General (1981) ZR 127 2) Bailes -v~ Stacey (In re Domingos Assuncao) SCZ Judgment Ho. 21 of 1986 This case concerns a property used as a mote1 and being subdivision "L" of Farm 1446 Kabwe. In summary, the appellant contended as follows: In 1967, he came to learn from one K. D. Desai, the previous owner, that the motel was for sale. He was interested and/mentioned this to the respondent, his nephew-ln-law who happened to be travelling in his company at the time. After discussions, the two agreed to buy the property and the utensiIs-in-trade jointly and to run the motel as equal partners. Each put up some money and thereafter it was agreed that the balance of the purchase price be secured on a Building Society Mortgage in the sole name of the respondent because the appellant’s terms of employment with his employers at the time precluded him from 2/...,.openly - - openly engaging in such business. There were various documents he relied upon to show that there was a partnership and that both the business and the property were the joint concern of both parties. He ran the business for the first eight years and again later returned to save the property when the mortgagees threatened to reposses and to foreclose. Disputes arose and the appellant commenced proceedings In which he requested the court to find that there was equal partnership and beneficial ownership in both the business and the property. 'He also asked that the respondent state an account for the period when the ‘ business was run by him. The respondent's answer to( the foregoing was. tn an nutshell,' that he denied the whole of the appellant's contention. There was no partnership in the business nor was there joint beneficial interest in the property. According to him, the appellant merely loaned him some money amounting to £2,000.00 to enable him to purchase the utenslls-in- trade and towards the down-payment on the property. He learnt of the property being for sale from an advertisement in the press and, through ; his lawyers, offered to buy it. When he was told that his offer had been accepted and that he had to pay a deposit of £2,5007 he approached the appellant and requested him to loan him £1,000 which the latter agreed to do. It was then that he learnt from the appellant that the latter had already purchased the furniture in the motel from the previous owner for a sum of £1,000 and accepted the appellant’s offer that he, the respondent, in turn buy the furniture from the appellant. Thus, he owed the appellant £2,000 but otherwise bought the property and the business alone and it was for this reason that the title deeds and the mortgage were in his name alone. He allowed the appellant to run the business for the first eight years because the latter Insisted on this in order to recover his loan and, when the appellant had done this, he abandoned the motel and shifted elsewhere. In regard to themortgage repayments, this was done entirely on the bank account of the business on which both of them were signatories and subsequently, when the appellant made the repay-ments this was from the earnings of the motel. /.............. With - With regard to the documents relied upon by the appellant, some were explainable on the basis that the appellant was managing the business while others were creations of the appellant who had talked him into signing some blank sheets of paper in case need arose to write business letters. The learned trial judge determined that the case had to be resolved on an issue of credibility. In the process, he steered a middle course by partly believing and partly disbelieving both parties. | He found that there was equal partnership in the business only but ' that the property was owned by the respondent alone in whose name the • title deeds were. The learned trial judge also ordered that each account to the other for the profits of the business, that is to say, the appellant to account for tne period 1957 to 1974 when he was in charge and the respondent to account for tne period 1974 to 1981 when he was running the business; such accounts to be taken under the direction of the district Registrar. Being dissatisfied with the partial failure of his case and the order that he too should render an account, the appellant has appealed to this co.urt. There is no cross-appeal by the respondent who apparently now-accepts the business partnership and supports the whole of the learned trial judge’s judgment. On behalf of the appellant, Mr. Mwanawasa alleged error and misdirection on the part of the learned trial judge in folding that the partnership did not extend to the beneficial ownership in the real property and in accepting any portion of the respondent's evidence regarding the acquisition of this.property. Mr. Mwanawasa argued that, having accepted the appellant's contention that there was a partnership and having disbelieved the respondent's position to the contrary, the learned trial judge ought to have accepted also that the joint venture extended to the real property. He relied on a number of documents which indicated that the parties were in partnership and in particular, ■’ I on documents, signed by the respondent, including one where he stated that, initially, the intention was to purchase the property.jointly. He urged us to reject tne response that the appellant had created some of the letters having first procured the respondent.'s;signature to some 4/...blank blank papers, pointing out that the contents of some of the documents were clearly against the appellant; for instance, the document which outlined the history of the transaction and ended up instructing that steps De taken (presumably by the advocates) to evict the appellant. Hr. Mwanawasa argued that, since the money used to service the mortgage belonged to the partnership and not to the respondent, it could not be maintained that this was the private property of the respondent alone. It was his submission that the learned trial judge gave a bad reason when he hold against the appellant in his explanation for his name’s, not being put on the title deeds, which was suggested to be "the Leader­ ship Code" which was then not even there. It was pointed out that the appellant himself had at nd"time mentioned the Leadership Code; only his terms of employment with his them employers. With this last observation we are in complete agreement with Hr. Mwanawasa. The learned trial judge had further held against the appellant because he considered that the appellant had purposely, procured Desai to write a letter after the action had began'apparently in order to lend credence to his claim. Hr. Mwanawasa argued that there was nothing in that ., letter which was inconsistent with the facts common to both parties in as far as the payments mentioned there were made. OhcOgain, we agree with this observation. Mr. Mwanawasa further argued to the effect that since the learned trial judge did not believe the respondent's denial of a partnership, he ought to have found that it was not reasonable for, the respondent to explain away the fact that the appellant ran the- motel for eight years on thebasis of loan recovery. What was more, the conduct of the appellant in personally making frantic efforts to rescue the property from rrepossesion by the Building Society showed that the appellant had d beneficial interest to protect. It was submitted that, since all the documentary evidence on record supported the appellant's case and was inconsistent .with the case put forward by the respondent, the learneo trial judge ought to have found that the partner ship extended to the real property. Mr. Mwape's reply was that the learned trial judge should be upheld because, according to a letter dated 25th October, 1967 from - 5 - a firm of lawyers and indeed according to the title deeds, only the respondent was mentioned. It was his submission that, even if bad reasons may have been given by the learned trial judge for resolving the question of credibility, the evidence as a whole was such that the appellant had to be disbelieved on the issue of ownership of the property. According to Mr. Mwape, the question of payments on the mortgage and other conduct by the appellant is now supportable on the basis of the business partnership which the respondent now accepts, even though his position has always been that there was a loan. We have given anxious consideration to the grounds of appeal and the submissions on the issue concerning the beneficial ownership of the real property in this case. We agree that the learned trial judge gave reasons for partly believing and disbelieving the appellant which were clearly insupportable for having been based on misdirections as to fact, as was pointed out by Mr. Mwanawasa in his submissions to which we have already made reference. ■'Accordingly, there are gounds upon which we can interfere with the findings made by the learned trial judge: See Kapembwa -v- Halmbolwa and Attorney-General (1). In our considered opinion, it was plainly unrealistic to attempt to split the complementary contentions so as to enable the trial court to accept some claims and reject others based on exactly the same premise and a single account. In particular, it was obvious that none of the respondent1 own contentions could be upheld and they were all rejected. In our view, the respondent gave a frankly incredible story. The reasons given for rejecting the appellant's contentions in relation to the real property can not be sustained and there were in fact none upon which the appellant’s story - which was in fact an indivisible, entire, single story - could be severed and rejected. The additional reference by the court below to the effect of a certificate of title with regard to ownership in terms of Section 54 of the Lands and Deeds Registry Act, Cap 287, only served to beg the question. Essentially, the court was faced with an action raising the issue of a constructive trust, with the appellant asserting against the respondent in whom the legal title is vested, that he had acquired a6yenefi£^lc the circumstances already adumbrated. As we pointed out in Bailes -v- Stacey (In re Domingos Assuncao) (2) the constructive trust is a creature of equity and taay be imposed in order to satisfy the demands of Justice and good conscience. The appellant here was intended to participate in the acquisition and had so participated right from the beginning. He made a substantial cash contribution in the initial stages; thereafter, partnership money in which he had a fifty percentum Interest was used to pay the mortgage. He personally rescued the property when it was about to be repossessed. The whole of the relationship between the parties showed that this was a joint venture under which a Joint business would be operated. We are satisfied that this part of the judgment below must be reversed and we enter a declaratory judgment that the appellant has an equal beneficial interest in the real property and that the respondent holds it on trust for sale, and the proceeds of such sale are to be divided between the two parties equally. Should the respondent desire to keep the property as his own alone, he is granted liberty to pay off the appellant his share upon a valuation. In this regard, liberty is granted to either party to apply to the District Registrar to facilitate compliance with this decision, should there be default of agreement between them. Should the respondent fail to exercise this option to pay out the appellant within a reasonable time acceptable to the appellant, then, of course, the burden of our decision to the effect that the property is held on trust for sale and , , ) the proceeds to be divided equally will prevail. With regard to the order for taking of an account, we do not disturb that part as related to the respondent rendering an account since he has not appealed and, therefore, does not complain. However, we do have to agree with Mr. Mwanawasa that, as the respondent did not make a cross request in the case and, more importantly, as he had by a letter dated 8th January, 1973 expressed satisfaction with the accounts thusfar, there was no need to order that the appellant should render an account. It cannot follow, as Hr. Mwape sought to argue, that each must render an account simply because one of them asked for one when regard is had to the two points we have mentioned. It follows from the 7/...... foregoing 7 - foregoing that this appeal is allowed* with costs to be taxed in default of agreement. - w . . . I va ' ■ ■ •. w ?■ As ■ s '■ W M. M. S. W. Ngulube 8. T. Gardner v-- - < -'W DEPUTY CHIEF JUSTICE -------------------------------------------------------------- ----------------------------------------------------------------------------- --- ACTING SUPREME COURT JUDGE > -