National Pension Scheme Authority v Keegan Nakabombo Lwiindi (2020/HPC/0208) [2022] ZMHC 40 (16 December 2022)

IN THE MATTER OF: SECTION 4 (e), 13(1)(a) AND 14 OF THE RENT ACT, CAP 206 OF THE LAWS OF ZAMBIA IN THE MATTER OF: RULE 3 OF THE RENT RULES, CAP 206 OF THE LAWS OF ZAMBIA (_-· IN THE MATTER OF: AN APPLICATION FOR AN ORDER FOR RECOVERY OF RENTAL ARREARS AND POSSESSION OF THE PREMISES K NOWN AS FLAT K02, NYUMBA YANGA HIGH RISE FLATS LUSAKA BETWEEN NATIONAL PENSION SCHEME AUTHORITY APPLICANT AND KEEGAN NAKABOMBO LWIINDI RESPONDENT /Jeforr- Lady ,Jus tice B. G. S lwnga this 1611• day of December, 2 0 22 (l ,_ For the Plaintiff Ms. S. N. Aongola (In- house) Par lhe Defe ndant: Mr. J<. Mamuwe, Messer. Ferd J ere & Co. JU Cases Referred to: 1. Printing and Numerical Registering Company v Simpson [1875] L. R. 19 E. Q.462. J2 2. Colgate Palmolive (z) Inc vAble Shemu and 110 others Appeal No.181 of 2005. Legislation and Other Material Referred To: 1. The Rent Act, Chapter 206 of the Laws of Zambia: s. 4 (e) and 13 (1) (a). 2. Cheshire, Fifoot & Furmston 's Law of Contract, 5 th Edition, (New York, Oxford University Press, 2007) at p. 709. 3. Chitty on Contracts, volume 1, General Principles, 31st edition (London, Sweet and Maxwell, 2012) para 12-002 at p. 907. 4 . Butterworths Common Law Series, The Law of Contract, 4 th Edition (London, LexisNexis, 2010) at para 7.1 atp. 1589. 1.0 BACKGROUND The app li cant commen ced these proceedings by way of Originating Notice of Motion, filed together with a supporting affidavit on 2 0 1h March, 2020. The applicant claims the following reliefs: (i) payment of the s um of K52,000 in rental arrears allegedly owed to it by the respondent as of 3 0 th September, 2 019; or all rent found to b e due as of the date of Judgement; (ii) payment of the charge fees a mounting to ZWM 24,000 for the period between 1st October , J3 2019 and March, 2020, allegedly accrued by the respondent due to his failure to vacate Flat K02 Nyumba Yanga High Rise Flats, Lusaka (the "demised premises"); iii) immediate vacant possession of the demised premises; (iv) interest on the amounts found due; (v) costs for these proceedings; and (vi) any other relief the Court may d eem fit. On lQth .. June, 2020, the respondent filed an affidavit 111 opposition and skeleton arguments. 2.0 SUPPORTING AFFIDAVIT The affid avit in s upport is deposed by Butete Kaliye, the a pplicant's H ead of Real Estates 1n the Investments Dep a rtm e nt. According to the aJfid avit, the respondent was, at all material times, a tenant of the applicant, who rented the demised premises. The respondent, it is averred, has bee n entering into annual lease agreem ents with the applicant for the possession and occupancy of th e d e mised premises from June 201 7 , at an agreed r ent of ZMW4, 000.00 p er month. J4 The affidavit states that by letter dated 30th January, 2019, the respondent was given a conditional offer, being the ((Initial Offer", to purchase the dernised premises at a purchase price of K730,000.00 on specific terms and conditions; that the purchase price and outstanding rental arrears were to be fully paid within three (3) months from the date of offer; and that the respondent accepted the offer on 6 th February, 2019. A copy of the offer and acceptance letter is before Court, exhibited throu gh the affidavit, marked "BKl ". According to the d e ponent, on 19th March, 2019, the applicant wrote to Lhe respondent to give him a second conditional offer, th e "Fina l Offer" which was to supersede the Initial Offer, albeit the purc h a se price remained the same. It is avowed however ' ) tha t the respondent did not endorse his acceptance of the Final Offer. A copy of the Final Offer is before Court, exhibit marked "BK2" to the affidavit. The affidavit goes on to reveal that on 10th October 2019 the ) ' respondent made payment, in the sum of K84, 000. 00, towards JS the purchase pnce. A copy of the respondent's Payment Summary was presented for my consideration, being exhibit marked "BK4" to the affidavit. The deponent further attests that the Final Offer lapsed, and with the lapsing of that Offer, the tenancy agreement was terminated and the respondent was to settle his rental arrears and vacate the demised premises. In addition, the deponent avows that d espite demand having been made upon the respondent, the respondent has not only failed to settle his r ental arrears but has also refused to vacate the demised 3.0. AFFIDAVIT IN OPPOSITION c- The a ffid avit in oppos ition is deposed by the respondent. In it, h e a t tests that he executed an a nnual tenancy agreement with the a pplicant in J anu ary, 2018. He accepts that the tenancy was in respect of the d emised premises and that he was paying ZMW4000.00 monthly r enta ls. J6 The respondent proceeds to acknowledge that in January, 2019, the applicant gave him an offer to purchase the demised premises on the express terms that the purchase price of ZMW730,000.00 was to be liquidated in three months. According to the respondent, subsequent to rece1v1ng the applicant's offer, he and a group of affected colleagues established a committee which engaged the applicant to reconsider the purchase price and the terms of agreement relating to paym ent pe riod. The respondent dre\v my attention to exhibit "KNLl" to th e affidavit in opposition. That letter, dated 25 t h Fe brua ry, 2 019 , is addressed to the Secretary to the Cabine t from the Chairperson of NAPSA High Rise Flats residents. In it, t h e r esidents appeal to the Secretary to the Cab inet to interven e as the residents were unable to raise the purch ase price of K730, 000.00 within three (3) months. The le tter indicates that e fforts to s ecure a udience with the applicant h a d fail ed. As for payme nts m a de, the respondent a dmits that he made a payment of ZWM 84,000.00 sometime in October 2019 ' ) J8 The deponent explains that following the respondent's failure to meet the conditions of offer, the applicant exercised its right to terminate the lease, call in payment of rent accrued by the respondent and commence applying charge fees in accordance with the Final Offer. That as of June 2020, the respondent was indebted to the applicant to the tune of ZMW88,000.00 1n respect of rental arrears and accrued charges. 4.0 DETERMINATION I h ave consider ed the affidavit evidence, submissions and legal a rgu me nts be fore Court. Firstly, I accept that this Court has the powe r , und e r section 4 (e) as read with section 13 (1) (a) of the Rent Act, Chapter 206 of the Laws of Zambia to make an order for recovery of possession of premises, whether in the occupation of a tenant or any other person and costs; and to order the recovery of arrears of standard r ent where some rent lawfully due from the tenant h as not b een paid. In this case, it is not in dispute that by letter dated 30th January, 20 19, while the respondent was the applicant's tenant J9 occupying the demised premises, the applicant made an offer to the respondent to purchase the said premises at a price of K730, 000. 00. It is also agreed that the respondent accepted the offer on 6 th February, 2020 . I have studied the terms of the offer which contained, amongst other things, the following salient condition precedents: (i) That sitting t enants with outstanding rental arrears were give n conditional offers that would become absolute only upon liquida tion of all outstanding rental arrears. The r espond ent's arrears were stated to have stood at K16,000 as of 3 1:;t December, 2018. (ii) The full purchase price was to b e paid within three (3) months of the d a te of the letter of 3Qth January, 2019. (iii) The offer would automatically lapse if the respondent failed to pay the full purchase price within the three months period. J9 occupying the demised premises, the applicant made an offer to the respondent to purchase the said premises at a price of K730, 000.00. It is also agreed that the respondent accepted the offer on 6 th February, 2020. I have studied the t erms of the offer which contained, amongst other things, the following salient condition precedents: (i) That sitting tenants with outstanding rental arrears were given conditional offers that would become absolute only upon }jquidalion of all outstanding rental arrears. The re sponde nt 's arrears were stated to have stood at Kl6 ,000 as of 31 5 1 December, 2018. (ii) The full purch ase price was to b e paid within three (3) months of the date of the letter of 30th January, 2019. (iii) The offer would a utomatically lapse if the respondent failed to pay the full purchase price within the t hree months p eriod. JlO Further) by clause 3 of the offer, the letter also served as three man ths' notice to vacate effective the date of expiry of the off er to purchase if the offer expired due to failure to pay. Additionally, clause 4 (ii) provided that upon failure of making full payment of the purchase price, the lease would terminate upon expiry of the offer period and rentals would remain payable until the vacation. As regards withdrawal of acceptance to purchase the demised pren1ises: clause 6 reads, in part, as follows: "Should you wish to withdraw from the purchase of the Flat. .. you s h<.ill notify the authority in writing. Having cogitated on the undisputed facts, I find that the Initial Offer was to expire, upon failure of the respondent to comply with the conditions, three n1onths from 30th January 2019 ' being the date of the offer. That is, on 30th April, 2019 (the ' "Expiry Date))). Notwithstanding the above, it is clear from the affidavit evidence before Court that on 19th March, 2019, before the Expiry Date Jll of the Initial Offer, the applicant made another offer, the Final Offer, to the respondent. The Final Offer opened with the following sentence: "Kindly note that this letter serves to supersede our earlier offer of 29th January, 2019 and is effective 1st April, 2019." The Final offer contained the condition precedent that the offer would expire within 3 months of receipt of the said offer. However, there is no evidence before Court to enable me to ascertain when the offer was received. It also required the payme nt of Kl46,000.00 being a 20% down payment within 6 month s from 1s t April, 2019 to 31 st September, 2019. Additiona lly, it incorporated a provision for the charge of loss of use of the demised premises for as long as the purchaser continues to occupy the premises after failure to vacate. The applicant invites me to find that the respondent accepted the Final Offer, by conduct, when he paid K84,000.00 on 10th October, 2019, towards the purchase price. In my view, since the respondent had already accepted the Initial Offer on 6th February, 2019, a valid agreement had already been concluded. J12 I rest on the trite law that the essential requirements of a simple contract are: (i) consensus. (ii) capacity. (iii) consideration (iv) legality (v) formality (vi) Intention to create legal relations. In this case the two parties, whose capacity to contract is not disputed , a greed that the re~pondent would purchase the d e mised pre mises within three months of the date of offer in exc h a n ge for p aym e nt of the purchase price of K730, 000.00 by the respo ndent. Absent a suggestion that the contract was for a n illegal purpose or that it gave rise to a moral rather than a legal obligation, I am satisfied that the parties entered a valid agreement with the intention that the agreement shall have legal consequences and shall be legally enforceable. Having concluded that a valid agreement was entered into by the respondent's acceptance of the Initial Offer, the agreement J1 3 could only be varied by the consent of both parties. The law on variations can be discerned from the instruction of the learned authors of Cheshire, Fifoot & Furmston's Law of Contract, 5 th Edition, (New York, Oxford University Press, 2007) at p. 709 who expound as follows : "what has been created by agreement may be extinguished by agreement. An agreement by the parties to an existing contract to extinguish the rights and obligations that have been created is itself a binding contract, provided that it is either made under seal or supported by consideration." I have analysed the affidavit evidence before me and I observe that there is no evidence before Court to support a conclusion that respondent accepted the Final Offer or that he agreed to a variation of the Initial Offer. Even if I were to consider the payment made by the respondent, that payment fell s hy of the 20% minimum deposit required to b e paid and it was p a id out of tilne in October, 2019, after the September, 2019 d eadline. Therefore, the payment was made outside the t erms of the Final Offer. That being the case, I do not agree that the respondent accepted the Final Offer by conduct. As regards the Initial Offer, it is clear that the respondent expressly accepted it when he endorsed his acceptance on the acceptance section of the offer letter on 6 th February, 2019. Moreover, I note that neither party has presented any written withdrawal of the respondent's acceptance as required by clause 6 of the accepted offer. Considering that the respondent expressly accepted the Initial Offer, and bearing in mind the absence of any evidence of withdrawal, I am of the settled mind that the parties entered into a valid and binding agreement which was never varied or in any other way superseded. Having concluded th at the agreement betv.reen the parties comprised the Initial Offer as expressly accepted by the r espondent, I heed the e rudition of the '\1/riters of Chitty on Contracts, volume 1, General Principles, 31st edition (London, Sweet and Maxwell, 2012) para 12-002 at p . 907. They guide that it is well esta blished that the party signing an agreement that has been reduced to writing will ordinarily be bound by the terms of the written agr eem ent. J15 Moreover, the a pplica nt has illuminated the case of Printing and Numerical Registering Company v Simpson (1), cited at page 8 in the case of Colgate Palmolive (Z} Inc v Shemu and Others (2) to illustrate how the courts have a pplied the principle that where parties have signed a contract, they are bound by the terms of the said con tract. In vie~, of the foregoing, I elect to determine this matter based on the terms and conditions of the agreement that arose from the Initia l Offe r. In so doing, I note that it is not disputed that as of th e Expiry Da te of th e Initial Offer, 30th April, 2019, the respon de n t ha d fa iled to make full payment of the purchase price . Th a t being the case, I accept that the offer lapsed; the '( l lea s e te rmina ted; and the respondent was put on 3 months' notice lo vacate from 3 0 th April, 2 019, in accordance with the contract entered into between the parties. As regards the termination of the lease, I draw attention to the works of Butterworths Common Law Series, The Law of Contract, 4 th Edition (London, LexisNexis, 201 OJ at para 7.1 at p. 1589 which edifies as follows: J16 "'Termination' refers to the discharge of the parties to a contract from the obligation to perfonn their contractual obligations. Termination may occur on the exercise of a right (common law or statutory) to terminate, automatically .. . or by agreement" In this case, the offer to purchase expired by the respondent's failure to satisfy the conditions precedent. Additionally, termination of the lease agreement was automatically activated in accordance with the express terms of the agreement between the parties. Consequently, I consider that the plaintiff has established its case on a preponderance of probability. As a result, Judgement is rendered in favour of the applicant as follows. The respondent is directed to: 1. pay the applicant the sum ZMW 52,000.00 owed to the a pplicant as of 30th September, 2019, plus all accrued outstanding rent fro1n 30th October, 2019 to the date of this Judgment, less the su1n of K84,000.00 paid by the respondent on 10th October, 2019 . . . 11. The respondent shall vacate the demised premises within 14 days of service of this Judgment upon him J17 and he must surrender possession of the prem1ses to the applicant. 111. Interest on the rental arears at 6% per annum from date of writ to date of Judgment and thereafter at 8% per annum until full and final settlement. With respect to the applicant's claim for payment ZWM 24,000 for the period between 1 st October, 2019 and March, 2020, allegedly accrue d by the respondent due to his failure to vacate, I note that the claim emanates from a term contained in the Final Offer. Since the a pplicable agreement between the parties genninatcs from the Initial Offer, which offer did not have a term whic h irnposcd a charge of fees for failure to vacate, that particula r c la im fails and is dismissed. Costs are awarded 1n . ( favour of the a pplicant, to b e taxed in default of agreement. Dated this 16th day of December, 2022