Lloyd v J.R. Textiles Limited (SCZ 8 201 of 2011) [2015] ZMSC 50 (26 August 2015)

IN THE SUPREME COURT OF ZAMKA APPEAL NO. 137/2011 HOLDEN AT LUSAKA SC2/8/201/2011 (Civil Jurisdiction) BETWEEN: PETER DAVID LLCYD APPELLANT AND J. R. TEXTILES LIlv.:ITED RESPONDENT CORAM: Mwanamwambwa, DCJ, Muyovwe and Kaoma JJS On the 22nd July, 2015 and 26th August, 2015 For the Appellant: Mr. M. Muchende - Dindi Co Company For the Respondent: Mr. P. Chungu - Ranchhod Chungu Advocates JUDGMENT Kaoma, JS, delivered the Judgment of the Court. Cases referred to: 1. ZambiG Consolidated Copper Mines Limited v Chiles he (2002) Z. R. 86. 2. Hilton v Sutton Steam Laundry (a firm) (1945) 2 ALL. ER. 425 3. Mobile Oil Zambia Limited v Msiska (1983) Z. R. 36 4. Kabwe v KapasC! - SCZ Judgment No. 4/2014 5. Anti-Corruption Commission v Barnnet Development Corporation Limited (2008) Volume 1, Z. R. 69 6. Attorney Genera; v Peter Njovu (1986) Z. R. 12 7. Dongo v Mulyango and another- SCZjudgment No. 4/2011 8. JA Pye (Oxford) Limited v Graham (2002) UKHL 30 J2 9. Lumanyenda and another v Chi'efChamuka and others (1988-89) Z. R. 194. Legislation referred to: 1. 2. 3. 4. 5. RSC 1999, Crders 14A and 113 High Court Rules, Cap 27, Order 6 rule 10 (2) Limitation Act 1939, Sections 4(1),4(3) and 10 Lar.ds and JJ.eedsRegistry Act, Cap 185, Sections 33,34 and 35 Lar.ds Act, Cap 184, Section 9 (1) Other works referred to: 1. 2. Black's Law Dictionary, 8th Edition.. Bryan A. Gamer (1999) p. 1439 Elements of Land Law, Gray and Gray, Edition, 2009, Oxford University Press, New York ~t paragraph The appeal is by Peter Dav:d Lloyd (2nd respondent in the court below) against the decision of the H:gh Court at Livingstone dated 26th August, 2011 dismissing his application made under Order 14ARSC 1999 to dispose of the case on a point of law. The brief facts not in dispute are that JR Textiles Limited (applicant in the court below), is the registered proprietor of Stand No. 726 Limulunga Road, Livingstone. The appellant (2nd respondent in the court below) was permitted by the applicant to stay in the house rent free, for a period of six months. He took possession in 1993. When the agreed period expired he refused to vacate the house. Later an attempt was made by the appellant to swap the house with his Lusc.ka West property but before that J3 arrangement could materialise, he allegeci.ly sold the house to Hermina Marchenback Banda (1st respondent in the court below), who alleged that she had to payoff a mortgage to Union Bank on behalf of the appellant and is the beneficial owner. Later, in 2008 the appellant offered to buy the house but the offer fell through. On 23rd October, 2009, JR Textiles Limited took out originating summons under Order 113 RSC 1999 and Order 6(10)(2) of the High Court Rules, Cap 27, against Hermina Banda seeking, inter alia, for an order that it may be granted possession of the dwellir_ghouse; that Hermi:1a Banda not being a lawful tenant be ordered to vacate the house and to pay damages for illegal possession and occupation of the house, mesne profits/rentals from October, 1994 to date of order; and interest and costs. On 14th May, 2010 upon application by Hermina Banda, the appellant was joined to the proceedings. According to him, since he got possession of the house with the consent of JR Textiles Limited, so a claim for possession under Order 113 RSC should be declined. On 22nd November, 2010 the trial judge ordered that the matter should proceed to trial. On 8th July, 2011 the appellant applied to dispose of the case on point of law on ground that he took J4 possession of the ~'1ousein 1993, while the action was commenced 16 years later, whi::h is after the expiration of 12 years. JR Textiles Limited opposed the application and averred that from 1993 to 2008 the two parties had been discussing options relating to the property, the latest being on 30th May, 2008 when the appellant made a formal offer to buy the house, so the cause of action did not arise when the appellant took possession, but when there was a dispute between them. On these facts, the trial judge found that after expiration of the six months the appellant was allowed to occupy the house rent free, the parties did not agree on how or on what terms he was to remain in :he house; that JR Textiles had wanted the appellant to vacate the house, but he refused and offered to purchase the house but JR Textiles did not and is still not willing to sell the house. The trial judge also found that the stay by the appellant in the house after expiration of the six months was illegal; that while JR Textiles is the title holder, the appellant and Hermina Banda had not shown any title to the house; and that the appellant was an illegal squatter, with no title to the house and therefore, could not set the statute of limitation against the owner of the house. J5 Dissatisfied with this decision the appellant appealed on three grounds. In ground 1 he attacked the trial judge's holding that the cause of action which commenced in 1994 was not statute barred. In ground 2 he faulted the trial judge for making pronouncements declaring the respondents as illegal squatters at preliminary stage. And in ground 3 he assailed the holding that he could not set up the statute of limitation against JR Textiles. For convenience we shall refer to the parties as applicant, 1st respondent and 2nd respondent respectively as they were in the court below. On ground 1, Mr. Muchende argued that the cause of action accrued some six months after March, 1994 when the permission by the applicant to the 2nd respondent is purported to have lapsed and yet the applicant commenced the action on 23rd October, 2009. He quoted Section 4(3) of the Limitation Act 1939 and argued that since the applicant came to court in 2009, he slept on his rights and was, therefore, out of time. He also cited the case of Zambia Consolidated Copper Mines Limited v Chileshe1, where we held that negotiations cannot stop time from running. In support of grounds 2 and 3, Mr. Muchende submitted that the trial judge's pronouncement that the 2nd respondent is an illegal • J7 law is a resound reflection of what equity seeks to protect against in the maxims "Equi~y delights to do justice and not by halves" and "Equity will not suJler a wrong to be without Q remedy." Mr. Chungu also cited sections 33 and 34 of the Lands and Deeds Registry Act, Cap 185 and the cases of Kabwe v Kapasa4 and Anti-Corruption Commission v Barnnet Development Corporation LimitedS wherein sections 33 and 34 were discussed by this Court. He then argued that as the applicant is the registered proprietor of the property as evidenced by the printout from the Lands and Deeds Registry, the certificate of title is conclusive as against the 2nd respondent who does not in any way satisfy the exceptions outlined under sections 33 and 34 of the Act. According to Dim, the trial judge was on firm ground when he held that the cause of action was not statute barred and that the 2nd respondent could not set up the statute of limitation against the applicant. Mr. Chungu further quoted the case of the Attorney General v Peter Njovu6 which is restated in Dongo v Mulyango and another7 on the :ss-..leof findings of fact. Regarding ground 2, Mr. Cnungu referred us to the definition of 'squatter' in Bla:::k'sLaw Dictionary, 8th Edition, Bryan A. Garner • J8 (1999) at page 1439, "as a person who sett!es on property without any legal claim or title," which definition, he argued, is reflected in section 9(1) of the J-ands Act, Cap 184 which provides that a person shall not without lawful authority occupy or continue to occupy vacant land. He submitted that the term "illegal squatter" is not a misdirection on the part of the trial judge since the respondents, regardless of the stage of the proceedings, are without title and should invariably be referred to as such. We have considered the record of appeal and the arguments by both parties. We p:-opose to deal with grounds 1 and 3 at once and ground 2 separately. The argument by Mr. Muchende on grounds 1 and 3 is that since possession of the house was given to the 2nd respondent in 1993 and the applicant came to court in 2009, the applicant slept on his rights for a period exceeding 12 years and is proscribed by section 4(3) of the Limitation Ac:, from coming to court to recover the property. As far as he is concerned, there was no adverse posseSSlCn because the 2nd respondent went into possession with the applicant's consent and after that there was an arrangement to swap the properties. • • J9 First, we agree with Mr. Muchende that section 4(3) of the Limitation Act 1939 lays down as a general rule that no action shall be brought by any person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him. However, by section 10 of the said Act, in order that a right of action should accrue, thereby triggering the commencement of the limitation period, the land concerned must be in the possession of some person in wh::>sefavour the period of limitation can run. According to Gray and Gray, the learned authors of a book titled Elements of Land Law, 5th Edition, 2()09, Oxford University Press, New York at para 9.1.47, possession is never 'adverse' if enjoyed under a lawful title or by the leave or licence of the paper owner. Bu: a Ecencee whose licence has terminated or expired rapidly acquires the status of an adverse possessor in whose favour time can begin to run. Thus in the case of JA Pye (Oxford) Limited v Graham8, Pye allowed his neightours, the Grahams to use 23 hectares of his land, under a grazing agreement. The agreement was to end on the 31st December, 1983 and to continue the arrangement a new contract was required to be entered into. Pye did not enter into • • no another agreement as he wanted to develop the land but the Grahams continued to occupy the land. After 12 years the Grahams sought to obtain it under the English law of adverse possession. In the High Court Neuberger J ruled that under the Land Registration Act 1925 the Grahams were the lawful owners of the land as Pye had failed to take possession of this land. The Court of Appeal overturned the ruling of the High Court and held that the Grahams were only using the land because of the gr3Zing agreement, thus they had nDt been in possession of it. However, the House of Lords rejected the Court of Appeal's decision and restored the decision of Neuberger J. The case went to the European Court 0:- Human Rights which originally ruled that obtaining property via adverse possession was contrary to the right to the peaceful enjoyment of one's possessions (Article 1 of Protocol 1 of the European Convention on Human Rights). But on appeal, the Grand Chamber held that although there was an interference with Convention rights, it was a proportionate and bus permissible interference. It is fundame:1tal to understand that the only way that the limitation period under section 4(3) of the Limitation Act can start to • • J1i run m favour of the respondents IS if they were m adverse possesslOn. Mr. Muchende's argument that there was no adverse possession is self-c:efeating if he has :0 rely on section 4(3). According to Gray and Gray (supra) at r;ara 9.1.2, the owner of an unregistered estate who fails within the allotted statutory period to initiate the eviction of a squatter or trespasser finds that he is definitely barred from recovering the land and that his title to an estate in that land is peremptorily extinguished. Thus, we agree with Mr. Muchende bat the Limitation Act reflects a policy that those who go to sleep upon their claims should not be assisted by the courts in recovering their property as under the Act unchallenged adverse possession by 81 intruder or squatter is deemed conclusively to 'toll' or bar prior rights of recovery following the expiration of the legally stipulated limitation period. It is Mr. Muchende's argument that section 4(3) of the Limitation Act does not distinguish between ti:led and untitled land. However, G:-ayand Gray (supra) state as follows at para. 9.1.14: it has come to appear increasingly strange that "In recent years adverse possession should have any relevance in a regime where the formal registration of title supposedly provides an accurate and definitive record of estate ownership. The last decade of the 20th Century S2W a gathering of force behind the view that while the • • J12 :imitation principle may play a valuable role in resolving some uncertainries of title in u!!registered land, these uncertainties are highly uniikely to arise under a regime of compulsory registration of iand ownership. Title to registered land is readily ascertainable by inspec~ion of the relevant proprietorship register and as Neuberger J observed at first instance in JA Pye (Oxford) Limited v Graham (2000) 0. 676 at 709, it is 'hard to see what principle of justice entitles tf"oetrespasser to acquire land for nothing from the owner simply because he has been permitted to remain there for 12 years. " In Za:nbia, section 4 (1) of the Lands and Deeds Registry Act, Cap 185 requires every document purporting to grant, conveyor transfer land or any interest in land for a longer term than one year to be registered. And as rightly submitted by Mr. Chungu, section 33 of the said Act provides that a certificate of title shall be conclusive eviden:::e of ownership from the date of Issue notwithstanding existence m any other person of any estate or interest except in the case of fraud or for reasons of impropriety in its acquisition as stipulated under section 34 .:Jfthe said Act. Mr. Muchende had also argued that section 34 proscribes a person with adverse possession from taking cut an action against a registered proprietor and so, it does not apply here since it is the applicant who has sued for recovery of land. What Mr. Muchende has ignored is that section 35 of the Act explicitly provides for protection against adverse possession. It reads as follows: • • J13 "After land has become the subject of a Certificate of Title, no title in, upon or over the thereto, or to any right, privilege, or easement same, to or in shall be acquired by possession derogation of the title of the Registered Proprietor." or user adversely We had occasion to discuss this provision In the case of Lumanyenda and another v Chief Chamuka and others9. In that case, the appellants claimed title by prescription as occupiers of land to which the third respondent said it had a certificate of title. At the trial the respondent produced a certificate of title under a lease and upon that evidence the court found in their favour on the basis that title by prescription does not apply to leasehold land. On appeal the arguments were based on adverse possession. It was a:-gued that in terms of section 35 of the Lands and Deeds Registry Act, adverse possession cannot be acquired against land to which there is a certificate of title. The appellants argued that under section 32 of the Act, any rights or benefits that existed at the time of the issue of the certificate of title still accrue and will override the issue of a certificate of title. It was held as follows at page 196: that "So far as English law is concerned, we are quite satisfied specifically section 70 of the Land Registrc.tion Act 1929 provides that all re:;istration of land shal! be deemed to be subject to certain o'Jerriding interests which include rights acquired or are in the course of being acquired under the Limitation Act. However, we are the Lands and Deeds Registry Act t.'wt section 35 of satisfied th~t such a law shall not apply in equally specifically provides • Zambia a:'1dno rights by adverse possession becomes The subject of a certificate of title". can be acquired if land Definitely, th:s decision settles this matter. What it means is t~at adverse possession cannot in itself extinguish the registered proprietor's title at the Lands Registry and it becomes immaterial whether the registered proprietor has made any attempt within the prescribed 12 years to commence legal proceedings for the purpose of terminating the squatter's or trespasser's possession. In this case, the trial judge made definite findings of fact that the stay by the appellant in the house after expiration of the six months he was allcwed free of rent was illegal for it was not allowed by the ap:;>licant; and that the 2nd respondent was an illegal squatter. Clearly, these findings of fact were supported by the affidavit evidence before the trial judge. And since section 35 of t":""eLands and Deeds Registry Act affords protection against ad\'erse possession to a registered proprietor of land, the judge WE. S right wher: he held that the 2nd respondent could not set up the statute of limitation against the owner of the hOl:.se and when he dismissed the appellant's application on the basis that the matter was not statute barred. • •• J15 The case of Zambia Consolidated Copper Mines Limited v Chileshe1, cited by the appellant reflects the correct position that the mere fact that negotiations have taken place between a plaintiff and a defendant :ioes not debar the defendant from pleading a statute of limitation, even though the negotiations may have led to delay and caused the plaintiff not to bring his action until the statutory period had passed. Hilton v Sutton Steam Laundry (a firmj2 also reflects the law that the statute of limitation is not concerned with merits and once the axe falls, it falls and a defendant who is fortunate enough to have acquired the benefit of tl'_e statute is entitled, of course, to insist on his right. Sadly, that case is not applicable to this particular case. As conceded by Mr. Muchende, the case did not deal with land or registered land for that matter. For these reasons, grounds 1 and 3 must fail for lack of merit. Regarding ground 2, and the contenticn that the trial judge should not have made pronouncements declaring the respondents as illegal squatters at preliminary stage, the judge was moved under Order 14A RSC 1999 to dispose of the case on point of law on the ground that the action was statute barred. • ( • In determining that question the judge had to make definite findings of fact based on the evidence and the parties had an opportunity of being heard. And as the determination would finally determine the m3.tter or entire cause, the judge was not restricted as to the findings of fact he cO',l1dmake on the evidence before him. Moreover, Order 14A (1)(2) empowers the court upon such determination to either dismiss the cause or matter or make such order or judgment as it thinks just. In this case, the trial judge dismissed the 2nd respondent's application, meaning that the respondents still have an opportunity to defend the action. However, the point is that after the expiration of the SlX months in which the 2nd respondent was permitted to occupy the house rent free, he is deemed to have had no right to possession or occupation and therefore, to have been a trespasser or a squatter. Therefore, there was no misdirection on the part of the trial judge. For the reasons we have given, we dismiss the appeal with costs. The matter should take its full course in the court below. STICE J17 ~ / ~ ~-E-- /------_?>:::::, SUPREME COURT JUDGE _.p ~ V\ ~ ---. C = -------~-C E - ~-= -------- R. M. C. KAOMA SUPREME COURT JUDGE