Osman Dodia v Sikaunda (Appeal 38 of 2009) [2011] ZMSC 27 (13 May 2011)

IN THE SUPREME COURT FOR ZAMBIA APPEAL NO. 38/2009 HOLDEN AT LUSAKA (Civil Jurisdiction) IN THE MATTER OF: SCZ/8/17/2009 SECTION 81(1) OF THE LANDS AND DEEDS REGISTRY ACT IN THE MATTER OF: S/D 93 OF S/D OF FARM 378a LUSAKA BETWEEN OSMAN DODIA AND APPELLANT MARTIN BEN KAWALA SIKAUNDA RESPONDENT Coram: Chirwa; Mwanamwambwa and Muyovwe J. J. S On the 1st February, 2011 and 13th May, 2011 For the Appellant: Mr. C. Chula, Messrs Chibesakunda & Company For the Respondent: Ms. I. Chongo-Lamba, Messrs Chongo, Ma'nda & Associates MUYOVWE, JS, delivered the Judgment of the Court Cases referred to: 1. Turnkey Properties Limited vs. Lusaka West Development Company and Zambia State Insurance Corporation Limited (1984) Z. R. 85 Ji 2. Florence Mwanamwale Billingsley vs. The estate of the late Dr. John Wesley Billingsley (1991) 3. Stella Upton vs. William Derek Walter (1971) Z. R. 192 4. Jane Mwenya and Jason Randee vs. Paul Kapinga (1998) Z. R. 17 5. Edith Nawakwi vs. Lusaka City Council and Sikanyika Nkaka Bernadette Appeal No. 26/2001 6. Nora Mwaanga Kayoba and Another vs. Eunice Kumwenda Ngulube and Another (2003) Z. R 132 7. M. M. Simpemba and 2 Others vs. K. M. Simpemba Appeal No.9/2000 This appeal is against the Judgment of the High Court which found in favour of the Respondent. By Originating Summons, the Respondent, who was the Plaintiff in the Court below, moved the Court to determine the following questions: a) That the plaintiff is the lawful owner of the property known as S/D 93 of Farm 378a Lusaka Avondale by a lawfully executed contract of sale with the previous owne r b) c) d) e) That the defendant’s caveat over the same property should therefore be removed. That the plaintiff is further or in the alternative entitled to be refunded K40million plus interest from 27th May 1998 the contract by the defendant for the said property. Further or other relief as the Court may think fit. Costs. J2 According to the affidavit in support and viva voce evidence, on the 27th May, 1998 the Respondent executed a contract for the purchase of the disputed property from Chilufya Simutowe who was licensed by her husband’s former employers Zambia Airways to sell the property. The Respondent proceeded to pay K40m in two instalments through Messrs Mulungushi Chambers (Vendors’ Advocates) upon which the Original Certificate of Title with relevant documents were forwarded to them. When the Respondent’s advocates attempted to register the transaction, they found that there was a caveat on the property placed by the Appellant on 26th May 1998. His advocates wrote to the Appellant’s advocates demanding the removal of the caveat but this was not done hence these proceedings. The Respondent exhibited various documents in support of his case. On the other hand, the Appellant who was the defendant in the Court below, in his affidavit in opposition and viva voce evidence stated that he placed the Caveat as intending purchaser as per the contract of sale signed between himself and the late Kelvin Simutowe who was the sitting tenant. The late Kelvin Simutowe was J3 former employee of Zambia Airways. He submitted that, the sub- sale agreement between late Kelvin Simutowe and the Appellant, was executed on 27th May 1996 and that the Appellant was to finance and purchase the disputed property from late Kelvin Simutowe, who had a contract with the liquidators. Mr. Chula argued that the agreement shows that late Kelvin Simutowe was already paid his dues while the balance was to be paid to the liquidators. Mr. Chula submitted that, there is nothing questionable or illegal about the agreement between late Kelvin Simutowe and the Appellant. Mr. Chula contended that the learned trial Judge fell into error when she concluded that the contract between Kelvin Simutowe and the Appellant was a nullity. Mr. Chula’s submission is that, the lower Court in coming to this finding effectively made the finding that the contract between Kelvin Simutowe and the liquidators is a nullity because he had died. He submitted that, contracts for sale of land do not extinguish upon death. He cited the case of Turnkey Properties Limited vs. Lusaka West Development Company and Zambia State Insurance Corporation Limited1 where we stated that a sub-sale is a legally recognized agreement. J8 Court below is to the effect that the party who should have dealt with the disputed property is an administrator and that the liquidators should not have entered into any contract except with the administrator of the estate of the deceased. Mr. Chula argued that in fact there was never a contract between Chilufya Simutowe and the liquidators and his contention is that this cemented the recognition of the rights and obligations of the deceased to the liquidators and in turn the rights between the deceased and the Appellant. He submitted that, the Court below misdirected itself in law and in fact, when she disregarded the need for an administrator and by upholding the contract between the Respondent and Chilufya Simutowe. He argued that there was no evidence in the Court below to show that the liquidators had sold the property or that Chilufya Simutowe had bought the property. from the liquidators. Mr. Chula contended that Chilufya Simutowe had no legal standing whatsoever to either have the property transferred into her name or to sell the property to the Respondent as she was not a representative of the estate of her deceased husband. He relied on the cases of Florence Mwanamwale Billingsley vs. The J10 estate of the late Dr. John Wesley Billingsley2 and Stella Upton vs. William Derek Walter3 With regard to ground 5, Mr. Chula highlighted factors which he contended were evident and which, he argued, should have compelled the learned trial Judge into finding in favour of the Appellant, instead of the Respondent. These factors include inter J e • alia: The fact that Kelvin Simutowe had entered into a lawfully binding and enforceable contract with Zambia Airways; the contract between Kelvin Simutowe and the Appellant was also legally binding and enforceable; there should have been an administrator appointed to administer the estate of Kelvin Simutowe; the Liquidators should not have authorized the transfer of the property to Chilufya Simutowe as she was not the administrator of the estate; since she was not the administrator of the estate, she had no legal capacity to contract over the disputed property which was the subject of a pre-existing contract; that the contract between Chilufya Simutowe and the Respondent was a nullity as there was no administrator in place; the Respondent should direct his claim to Chilufya Simutowe and the liquidators and the caveat was validly jii lodged by the Appellant to protect his lawful interest in the property. Mr. Chula prayed that the decision of the Court below be overturned and this Court should find in favour of the Appellant as the legal and beneficial owner of the disputed property. In response, Ms. Chongo-Lamba learned counsel for the Respondent in her written and oral submissions, starting with Ground 1 submitted inter alia that the lower Court was on firm ground in holding that the sale of the disputed property by the deceased to the Appellant was a nullity. She argued that the Certificate of Title produced in Court showed that the property originally belonged to Zambia Airways Limited. She submitted that there is no evidence to show that the sale of the property between the deceased and Zambia Airways was ever concluded or that title ever passed to him. She pointed out that in his evidence, the Appellant admitted that there was no documentation to prove that the deceased was the owner of the property at the time when he sold it to the Appellant. She argued that in fact the Appellant confirmed that the deceased had no legal capacity to sell the J12 property at that time. Like Mr. Chula, Ms. Chongo-Lamba also referred to the evidence of DW2. She pointed out that DW2 confirmed to the Court below that there was no Consent to Assign applied for or granted to Zambia Airways and the deceased; DW2 was not aware that the property had been sold to the Appellant as no document-had been submitted to the liquidators to alert them of the pre-existing sale of the property. Ms. Chongo-Lamba submitted that the late Kelvin Simutowe could not pass title, when in the first place, he had no title to the property in question. Ms. Chongo- Lamba contended that instead, it is the Respondent who showed that he legitimately bought the property from Chilufya Simutowe who had authority from Zambia Airways by virtue of the letter which they wrote to her; the State Consent to Assign and the Assignment between them which were produced in court. She submitted that the original certificate of title was sent to the Respondent’s advocates to facilitate change of ownership into his name. In relation to Grounds 2 and 3 she responded that the lower Court was on firm ground when it found that Chilufya Simutowe had the lawful authority to contract with the Respondent. Against J13 the argument that Chilufya Simutowe had no authority to contract with the Respondent as she was not the administrator, she responded that the Respondent had no notice of the fact that the Appellant had bought the property from late Kelvin Simutowe. She pointed out that DW2 confirmed that there were no records on their file to show that late Kelvin Simutowe had sold the property to the Appellant. She insisted that, therefore, the Respondent was a bona fide purchaser for value without notice of any prior claim and that the court was right to award him his claims. She submitted that the Appellant had slept on his rights and the only recourse is for him to claim from the estate of the late Kelvin Simutowe for the money he allegedly paid to Kelvin and not for possession of the property. As regards grounds 4 and 5 she submitted that while she conceded that sub-sales are generally allowed and lawful, in this case, the late Kelvin Simutowe did not have the legal capacity to enter into such contract. This is so because he was not the legal owner of the property and there was no confirmation from Zambia Airways that he ever had ownership of the property. She argued that none of the documents the Respondent relied on show that late Kelvin Simutowe had any interest in the property and that the J14 documents were not in Kelvin’s name and Chilufya Simutowe was acting in her own capacity and not as administrator of the estate. She submitted that there was no need for her to obtain an Order of Appointment as Administrator and the sale between the Respondent and Chilufya Simutowe was valid and legitimate in the circumstances. She urged the court to dismiss the Appeal. We have considered the evidence in the Court below, the judgment of the Court and the submissions by both learned Counsels. We shall deal with the 1st and 4th ground of Appeal as learned Counsel combined his arguments on the two grounds. We must point out, however, that all the grounds of appeal are somewhat inter-related. The gist of the arguments raised by learned Counsel for the Appellant in ground 1 and 4 is that the lower Court erred in failing to consider the fact that the Appellant had a contract with Kelvin Simutowe which was legally enforceable and that the Court erred in finding that Chilufya Simutowe who had contracted with the Respondent did not have lawful authority to do so. In our considered view, the following facts are clear: that the property J15 came into the hands of late Kelvin Simutowe by virtue of his employment with Zambia Airways; that the property was offered to him to purchase as a sitting tenant; that the late Kelvin Simutowe could not raise the purchase price hence he entered into the contract with the Appellant dated 27th May 1996; that Kelvin Simutowe passed ' on before title could be transferred to the Appellant. According to the documents exhibited by the Appellant, it is evident that Chilufya Simutowe was aware of the contract of sale between her husband and the Appellant. In fact in her submissions during the Appeal, Mrs. Chongo-Lamba admitted that Chilufya Simutowe acted fraudulently or dishonestly when she entered into the contract with the Respondent because she had knowledge of the sub-sale of the property by her late husband to the Appellant. We accept that there was a valid contract between the late Kelvin Simutowe and the Appellant. The lower Court should have borne in mind that Chilufya Simutowe derived interest in the property from her late husband Kelvin and upon his death, she could not legally represent his interest without an Order of Appointment as administrator of his estate. Our view is that the lower Court fell into J16 error when it casually discarded the contract between the Appellant and Kelvin Simutowe in preference of the one between Chilufya Simutowe and the Respondent. The lower Court lost sight of the fact that the property in question was first offered to late Kelvin as an incidence of his employment and Chilufya Simutowe came into the picture as a widow and beneficiary of her late husband. The position of the law in this country is that only a legally appointed administrator is mandated to transact on behalf of a deceased’s estate. In this regard, the provisions of the Intestate Succession Act and the Wills and Testate Administration Act speak for themselves. The following correspondence sheds more light in this matter. Chilufya Simutowe wrote to the Appellant on 4th February, 1998 as follows: Dear Mr. Dodia SALE OF PLOT NO. 378A/A/93A - Close Avondale Reference is made to the discussion on the sale of the above named plot to you. As a widow/spouse to the late Kelvin Simutowe who was the sitting tenant, I wish to state that this agreement on the sale of the above named plot will be completed as soon as the balance agreed upon of J17 K12million is settled...allow me purchase a council house for the two children aged 1942 and 4 years respectively. I will appreciate if this payment can be effected as soon as possible and the agreement signed to allow us close the chapter once and for all. As soon as payment is effected I, as a widow will have no claims upon this plot and an agreement will be reached upon where I can vacate this house within 48 hours of the closure of this deal. Thanking you most sincerely for your prompt attention to this issue. * * • « ■ Yours sincerely, Chilufya Bwalya Below is the response from the then Appellant’s advocates: 25th February, 1998 P. O. Box CH 310084 Chelstone LUSAKA RE: SALE PLOT NO. 378/A/93 - A CLOSE AVONDALE LUSAKA We refer to your letter dated 4th February, 1998 addressed to Mr. Dodia in connection with the sale of Plot No. 378/A/93 ‘A’ Close Avondale, Lusaka which has been referred to us with instructions to reply. Our client informs us that in May, 1996 he entered into a Purchase Agreement with your late husband, Mr. Kelvin Simutowe as the J18 owner of the property and they signed a Contract of Sale which copy we believe you have. We are further informed by our client that after the full purchase price was received by your late husband, he acknowledged the same and endorsed that he will have no further claim to the property whatsoever and consequently, the house was vacated for our client to take occupation. But subsequently, you moved back into the house without consulting our client and now you are demanding a further sum of K12,000,000.00 and our client does not know from what basis you are asking this money. • I * • ’ We have looked at the Contract of Sale which your husband signed and from the Agreement, it is clear that you have no basis upon which you should stay in the house and or demand further amount on the purchase price as the sale was completed. Our instructions are therefore, to demand that you vacate the premises within ten days from the date hereof and if you do not do so our client will have the liberty to have you moved from the house as you are occupying it illegally. Our client is also under no obligation to pay you the demanded K12,000,000.00 as the sale was already concluded by your late husband and you are not the owner of the property. We do hope therefore, that you will co-operate to avoid embarrassments. Yours faithfully (Signed) AJM AND ASSOCIATES J19 Mrs. Simutowe passed on the letter to her lawyers who responded as follows: 10th May, 1998 Messrs AJM & Associates Carousel Shopping Centre 2nd Floor Suite 28-30-32 P. O. Box 50540 LUSAKA RE: ESTATE OF THE LATE KELVIN SIMUTOWE PLOT NO. 78/A/93 “A” CLOSE AVONDALE, LUSAKA We are in receipt of your letter of 25th February, 1998 which has been referred to us to reply to. Our client advises that since there is no Administrator to the Estate appointed yet it is better that this matter pends until one is appointed legally. We shall revert to you as soon as the formalities have been finalised. Yours faithfully VERITAS CHAMBERS ADVOCATES (Signed) MUNDIA F SIKATANA J20 It is interesting to note that while her lawyers wrote the above letter on the 10th May, 1998 she proceeded on the 27th May 1998 to enter into a contract of sale with the Respondent for the same property with the knowledge that her husband had sold the same property to the Appellant before he died. We agree with Mr. Chula that the Court erred in failing to recognize the contract between the Appellant and the late Kelvin Simutowe which was a legally enforceable contract. While we agree, that at the time when he entered into a contract of sale with the Appellant, late Kelvin Simutowe had no title as the title was still in the name of Zambia Airways, this cannot be the basis for declaring that he could not pass good title to the Appellant. In the case of Turnkey Properties Limited vs. Lusaka West Development Company and Another1 cited by Mr. Chula we said: “Our starting point must be to accept that one contract was entered into between the Respondents inter se and another contract between the first Respondent and the Appellant. The Appellant claims to be a purchaser under the sub-sale which, prima facie, is a contract which may validly be entered into and in which the first Respondent could, in equity, legitimately describe himself as the beneficial owner. We need only cite Gordon Hill Ltd. vs. Segall (2) as one of the many authorities for the recognition of the validity of a contract of sub-sale.” J21 I In this case, late Kelvin Simutowe was offered the property by Zambia Airways and he entered into a contract of sale oh 31st May ■ *■ 1 ' ' L « 1996. Since he had no money, instead of losing the property, he approached the Appellant and entered into a contract so that he the * b z - k Appellant could pay on his behalf as purchaser of the said property and title was to‘change when all formalities were completed; But I p * I g before this could happen, Kelvin Simutowe died. Going by the authority in Turnkey Properties1 we must agree with Mr. Chula II ’ , » . b • f . • - I c I that the contract did not extinguish upon the death of Kelvin Simutowe. The contract between Kelvin Simutowe and the A ' ■f ' , " p ■■ Liquidators also remained iri effect upon his death and the Liquidators should have demanded for letters of administration * I , • ft I •. from his widow. Indeed, it appears that the Liquidators, at the time A of dealing with Chilufya SimUkoko may not have been aware of • I b » »• I l" b contract between late Kelvin Simutowe and the Appellant but this d cannot render the said contract null and void. It appears that % Chilufya Simutowe ignored her own lawyers’ advice and somehow " J proceeded on her own to sell the property at a higher price after she failed to get K12milliori more from the Appellant. In fact the record J22 rather strange that Chilufya Simutowe was left scot-free by the Respondent when she is the one who sold him the property and, therefore, she was in a better position to explain why the Appellant was claiming for the same property. She was still alive then and would have answered for her actions, yet the Respondent decided to go against the Appellant only. The 5th ground of appeal is to the effect that the learned trial Judge erred in finding in favour of the Respondent having regard to the favourable evidence supporting the Appellant’s case. In her response, Ms. Chongo-Lamba concedes that Chilufya Simutowe was acting in her own capacity and that she got authority from Zambia Airways, the original owners. The problem with this argument, as we have stated above, is that Chilufya Simutowe was not the legally appointed Administrator of the estate and she entered into an agreement with the Respondent knowing that the Appellant had already paid for the property. Learned Counsel Ms. Chongo-Lamba in her quest to convince us that Chilufya Simutowe’s actions were within the law, did not cite any authority for this proposition. As far as we know, there is no law in our country which allows widows/widowers or beneficiaries of a deceased estate to act on J25 a behalf of the estate in their own capacity. As we said in M. M. Simpemba and 2 Others vs. K. M. Simpemba7 where a person has no valid title to property, he has no capacity to pass title to another person, even if such other person is a bonafide purchaser without notice, for value. We hasten to add here that the Respondent after discovering the caveat on the property could not claim to be a bona fide purchaser without notice. I In this case, the liquidators should have requested for letters of administration before assigning the property to Chilufya Simutowe especially that they had earlier offered the property to late Kelvin Simutowe and they should not have allowed his widow to purportedly transact on behalf of her deceased husband without lawful authority. Chilufya Simutowe was not the sitting tenant and their records should have confirmed this. We find that the sale to the Respondent by Chilufya Simutowe was a nullity, having regard to the reasons stated herein. On the totality of the evidence, we find that the lower Court erred in finding in favour of the Respondent. We set aside the J26 __b M * M Judgment of the lower Court and allow this Appeal. Costs to the Appellant to be taxed in default of agreement. p D. K. CHIRWA SUPREME COURT FUDGE SUPREME COURT FUDGE E. N. C. MUYOVWE SUPREME COURT FUDGE ---------- J 27------ ---------------------------------------------