Raymond Muimo v Pascal Bwalya Ndakala and Anor (APPEAL NO. 32/2017) [2017] ZMCA 506 (9 November 2017)

,-.., IN THE COURT OF APPEAL FOR ZAMBIA APPEAL NO.32/2017 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: RAYMOND MUIMO .... \, V (, I, ~ AND APPELLANT ) PASCAL BWALYA NDAKALA MAGGIE NDAKALA 1 STRESPONDENT 2ND RESPONDENT Coram: C. K. Makungu, F. M. Chishimba, M . M. Kondolo J. J. A On 21 s tJune , 2017 and 9 t h November, 2017. For the Appellant: Mr. C. L. Mundia S. C. of C. L Mundia& Co For the Respondent: Mr. Kaunda from Ellis and Com pany JUDGMENT C. K. MAKUNGU ,JA delivered the Judgment of the Court. Cases referred to: 1. ZESCO Limited v Bakewell Bakeries Appeal no. 20 of 2015 2 . Stickney v Keeble (1915) P. 386 3. Chilanga Cement Plc v KasoteSingogo (2009) ZR 65 4. Anderson Kambela Mazoka and Others v Levyson Patrick Mwanawasa, The Electoral Commission of Zambia, The Attorney Genera l (2005) ZR 138 (S. CJ 5. Zambia Railways Limited v Pauline S. Mundia, Brian Sialumba(2008) ZR Vol. 1 287 6. Beresford v Royal Insurance Company Limited (1938) 2 ALL EE .s w , . 7. Wilson Masauso Zulu v Avondale Housing Project Limited (1982) ZR 172 8. Printing and Numerical Registered Company v Simpson (1875) LR 19 Eq 462 9. Tito v. Waddel and others No. 2 (1977) Ch D 106 10. Jane Mwenya and Jason Randee v. Paul Kapinga (1998) ZR Legislation referred to: 1. The Lands and Deeds Registry Act, Chapter 185 of the Laws of Zambia - Section 33 Other authorities referred to: 1. Kim L ewison: The Interpretation of Contracts, 1997, 2 nd edition. Sweet & Maxwell: London. 2. Halsbury's Laws of England, 1983, vol.42, 4 thed by Lord Hailsham of Marylebone, London; Butterworths. This is an appeal against the j u dgment of the High Court delivered on 22 ndAugust, 2016. In the summary of evidence on record we shall refer to the respondents as first and second plaintiffs respectively and the appellant as the defendant as those were their designations in the court below. Accordingly: Sometime in December, 2011 the defendant agreed to sale subdivision 's' of his farm number 2761 Chisamba in extent 100 hectares to the plaintiffs at the price of unrebased K500m. The plaintiffs paid the sum of Kl00m (unrebased) on 5 th April, 2012. It was agreed that the balance of K400m would be paid upon -J2- completion of the contract. The dispute arose when the defendant purportedly declined to give the plaintiff's an additional stretch of 20 metres of land on the southern boundary of the farm for purposes of making an access road to meet the nearby Dar Farms road. It was common ground that the survey diagrams issued later did not depict a road reserve on the Southern side of the portion of the land that was sold. The original Certificate of Title was given to the plaintiffs' advocates namely Messrs Ellis and Company by the defendant's advocates Messrs C. L Mundia and Co to facilitate the transaction. Due to financial hardship the defendant decided to rescind the contract by letter dated 17th October, 2013 wherein he demanded for the return of the Certificate of Title. The plaintiffs have since refused to return the Title Deed insisting on the completion of the contract. The defendant's contention was that he could not grant a road reserve on the southern side of the plot because he was using that area for cropping, ranching and quarrying activities and that the area has paddocks. Further that, there was an existing road reserve on the Northern side which the plaintiffs could use. As a result, the purchaser delayed to pay the balance which they only paid into Court on 9 th April, 2014 . -J3- The trial Judge that the sketch plan depicting the road reserve was incorporated in the contract of sale and non-inclusion of the reserve on the survey diagram was a clear breach of con tract and as such, the plaintiffs were justified in withholding the balance of the purchase price. Therefore, the respondent's claims for specific performance of the contract of sale dated 6 th March, 2012 , damages for breach of contract and costs were upheld. The appellants' counter claims for damages for mental distress and anguish, damages for loss of business and the return of the Certificate of Title for farm 2761 were dismissed. This appeal 1s based on seven grounds which are couched as follows: 1. The lower Court erred in law and fact when it ordered specific performance of the contract of sale of 6th March, 2012 and that the plaintiffs were justified in withholding the balance of the purchase price due to the defendant. 2. The lower Court erred in law and fact when it held that there was no breach of contract on the part of the plaintiffs and awarded damages to the plaintiffs for breach of contract of sale of 6th March, 2012. 3. The Court below erred in law and in fact when it dismissed the defendant's claim for damages for mental strain and anguish as a result of the plaintiffs actions to demand extraneous fulfilment by the defendant when in fact what they were demanding was already provided for as per survey diagram no. 3140/2013 -J4- . . . 4. The Court below erred in law and in fact when it dismissed the defendant's claim to return, through their lawyers, the Certificate of Title for farm no. 2761 , Chisamba to him and to have the plaintiff's condemned in damages for detinue as they through their lawyers had no legal right whatsoever to continue holding onto the said Certificate of Title. 5. The lower Court erred in law and in fact when it held that the appellant herein was paid the first instalment of the purchase price two (2) years before the execution of the contract. 6. The Court below erred in law and in fact when it held that the plaintiff's did not breach the contract by their failure to pay the balance of the purchase price in accordance with the express terms of the contract of sale. 7. The lower Court erred in law and fact when it did not find that the plaintiffs were bound by their pleadings which demonstrated a clear breach of contract. At the h earing of the appeal, the advocates representing the parties herein relied entirely on their written Heads of Argument. In support of ground one, counsel for the appellant argued that there was no basis for ordering specific performance because it is trite law that an order for specific performance is one which h as its establishment in equity and its governing principles. A litigant who comes to equity must do so with clean hands. A breach of the terms of the contract does not entitle one to an equitable relief of the nature of specific performance. To fortify this , he relied on the case of ZESCO Limited v Bakewell Bakeriesl1l wherein the Supreme Court stated that the trial Judge -JS- . . . misdirected himself by ignoring evidence to the effect that the plaintiff had come to court with dirty hands. He further submitted that the lower court erred by awarding the respondents specific performance of the contract of sale because the respondents had breached the contract. Reliance was placed on the case of Stickney v Keeble 121 where Lord Parker stated that: "Indeed, the dominant principle has always been that equity will only grant specific performance if under all the circumstances, it is just and equitable to do so ." It was further stated that the respondents were not justified in withholding the balance of the purchase price because there was no agreement between the parties to have two road reserves. That it was impossible to have a road reserve on the southern side of the farm because of the existence of the paddocks on that side. In support of ground two, it was submitted that the lower Court misdirected itself when it held that there was no breach of contract on the part of the respondents. It was argued that the respondents failed to pay the balance in the sum of K400 million in accordance with clause 5 (b) as read with clause 4 of the special conditions of the contract of sale. -J6- As regards th e t h ird ground of appeal, it was submitted that the demands by the respondents to have a second road reserve on the Southern s ide of th e property in question were only made as an afterthou ght when the appellant's advocates claimed for the payment of the balance of the purchase price. It was argued that the property was sold to the respondents because of the pressure that the appellant had to pay for his daughter's education. Further that, the refusal on the part of the respondents to pay the balance caused him mental stress and anguish. He went on to state that this was an appropriate case for an award of the counter claim. He relied on the case of Chilanga Cement PLC v Kasote Singogo 131where it was held that damages for mental distress and inconvenience would also be recovered in an action for breach of contract. Arguing ground four , Mr. Mundia S. C. submitted that the respondent's advocates had no right to withhold the appellant's Certificate of Title after the appellant repudiated the contract. It was argued that this amounts to detinue. That a Certificate of Title is conclusive evidence of ownership of land as provided for under Section 33 of the Lands and Deeds Registry Act, Chapter 185.' 1 ' He further contended that the detention of the Certificate of Title was adverse to the interests of the appellant as he could not subdivide the property which was in extent 1000 hectares for the benefit of third parties who had bought certain portions of it. The lower court therefore erred when it dismissed the appellant's claim for the return of the Certificate of Title. Under the -J7- circumstances, the appellant should have been awarded damages for detinue. On ground five State Counsel pointed out that the evidence on record reveals that the contract was executed on 6 th March, 2012 and that the respondents paid the deposit on 5 th April, 2012. He argued that the error in the findings of the Court to the effect that the respondents paid the first instalment towards the purchase price two years before execution of the contract, arose on account of the date i.e. 09/07 / 14 on the Notary Public's seal shown on th e contract of sale (page 137 of the Record of Appeal) . In arguing gr oun d six, the appellant 's counsel submitted that the lower Court erred in law and fact when it held that the respondents d id not breach the contract when they had in fact breached the express terms under clause 4 as read with 5 (b). The said breach entitled the appellant to rescind the Contract. On grou nd seven, it was argued on behalf of the appellant that the respondents were bound by the p leadings which demonstrated a clear breach of contract. In su pport of this, t h e case of Anderson Kambela Mazoka and Others v Levy Patrick Mwanawasa, The Electoral Commission of Zambia and The Attorney General14lwas cited. He concluded by arguing that the respondents had failed to prove their case. He relied on the case of Zambia Railways Limited v Pauline S. Mundia, Brian -JS- ' . Sialumba151 where it was held that the old adage is true that he who asserts a claim in a civil trial must prove on a balance of probabilities that the other party is liable. Mr. M undia further stated that the evidence adduced by the 1s t respondent at trial and the contents of the p leadings are clear that the first payment was made on 5 t h April, 2012 instead of 6 th March, 2012 which was the date of execution of the contract. The 2 nd instalment was also paid into court late and in breach of clause 5(b) of the contract. In response to grounds 1, 2 and 6, the gist of the arguments by counsel for the respondents, Mr. Kaunda, was that the contract of sale appearing on pages 66 to 69 of the record of appeal clearly shows that a contract was entered into in 20 12 but does not stipulate the actual date. He quoted Special Condition No. 5 of the said contract which reads as follows: "The purchase price shall be paid in two instalments as follows: a. Kl00, 000, 000. 00 at signing of contract and the balance of b . K400, 000, 000. 00 on date of completion." -J9- Counsel argued that the 1st instalment was made on 5th April, 2012 and that this was confirmed by the 1s t respondent's evidence on page 235 lines 1 to 4 and the bank deposit slip shown on page 70 of the record of appeal. He went on to state that the lower Court was on firm ground in finding that the respondents were right to withhold the balance of the purchase price because the contract in issue had a sketch plan depicting a road reserve on the South, attached to it and this is shown on page 68 of the record of appeal. He submitted that the narrow strip on the Southern side of the property was the basis for the said contract and that this is confirmed by their e-mails reflected on pages 61, 62 and 68 of the record of appeal. He went on to submit that the survey diagram prepared by the appellant had the road reserve in the North instead of the South contrary to the agreement between the parties. Consequently the respondent's refused to complete the transaction and demanded for its correction. H e added that the appellant has willingly refused to rectify the defect notwithstanding the fact that in the lower Court the appellant agreed that the diagrams could be corrected (page 264 of the record of appeal) . The respondents were therefore justified in withholding payment of the balance of the purchase price. He argued further that the appellant's evidence of the existence of paddocks on the south were the road reserve is supposed to be, was unsubstantiate d and an afterthought. -JlO- It was further submitted that the respondents paid the balance into Court in 201 4 as evidenced by the Notice of Payment at page 30 of the record of appeal. It was argued that it was the appellant that breached the contract when he refused to put a road reserve on the South as agreed. That the appellant cannot use his own breach to fault the judgement of the learned trial judge. To buttress this h e relied on the case of Beresford v Royal Insurance Company Limited 161 where Lord Atkin stated as follows: "I think that the principle is that a man is not to be allowed to have recourse to a court of justice to claim a benefit from his crime whether under a contract or under a gift." Further submissions on behalf of the respondents were that there was no evidence on record to sh ow that the appellant was hindered from dealing with his property because his evidence on page 267 line 5 clearly shows that he sold portions of the land to other people. In arguing grounds 5 and 7 , it was counsel's submission that the said grounds are incompetent and misconceived because the payment of the first instalment and the date of execution of the contract of sale was not an issue before the lower Court. -Jl 1- In the alternative, it was Mr. Kaunda's contention that assuming that the 1st instalment was not paid on 5 th April, 2012, there would be no breach of contract because the appellant proceeded to obtain consent to assign on 9 th April, 2013 which was after the execution of the contract and an incorrect survey diagram was prepared at the instance of the appellant and approved on 6 th May, 2013. He therefore submitted that the appeal 1s misconceived and should be dismissed with costs. We have read the record of appeal and considered in detail the heads of argument filed by both advocates. We have not found it necessary to determine the grounds of appeal seriatim because the issues raised are inter-reliant. We shall therefore determine them collectively. We agree with counsel for the respondents that indeed the contract of sale reflected on pages 65 - 69 of the record of appeal does not specify the date of execution of the contract. The first line on the cover thereof only reads: "Dated the ... .... .. day of February 2012." Further, the two notarial seals for Magdalena Holden, a Notary Public of IOWA, U. S . A appearing therein besides the signatures of the respondents indicate 9 /07/2014 as the date of expiry of the said Notary's comm1ss10n. The lower court therefore misapprehended the facts when it found that the contract was signed in 2014 and that the deposit was made well in advance. Therefore we hereby set aside that finding on the basis of Masauso Zulu v. Avondale Housing Project Limited m. -J12- The appellant is bound by the terms of the agreement and in this regard we are fortified by the decision in the case of Printing and Numerical Registered Company v Simpson 181 wherein it was held as follows: " ... If there is one thing more than another which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty in contracting and that their contract when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice." Further in the book - The Interpretation of Contracts, the learned author Kim Lewison 111gives the following guidelines: "In construing any written agreement the court is entitled to look at evidence of the objective factual background known to the parties at or before the date of the contract, including evidence of the 'genesis' and objectively the 'aim' of the transaction. However, this does not entitle the court to look at evidence of the parties' subjective intentions." In light of the foregoing, we h ave found it n ecessary to consider the e-mails r eflected on p ages 6 1, 62 of the record of appeal b etween the appellant and the 1st r espondent which were p a ssed -J13- b efor e th e contract of sale wa s executed. Th e s ame read a s follows: To: Raymond Muimo from Bwalya Ndakala December 11, 2011 Subject: Proposal Mr. Muimo, please note that the narrow strip next to Dar Farms is very important to us because of access to the road ... Bwalya N dakala From the 1st respondent to the appellant December 18, 2011 " ... It is my understanding that you have agreed to sale us 100 hectares on the same side of your farm as was previously agreed. You have also indicated that you will provide a road reserve of about 20 meters wide next to Dar Farms for our access. I have drawn a sketch showing my understanding of our conversation on the phone ... " From the Appellant to 1st Respondent "Yes, your diagram shows the correct interpretation of our discussion. I will instruct the -Jl4- ' • 'v I surveyors to scale the drawings and get approval once we are approached by our lawyers. Raymond Muimo These e-mails clearly indicate that the negotiations for the sale agreement involved the provision of a road reserve on the southern side of the property in issue for it was vital to the respondents. As a result, the contract of sale clearly states under particulars (Description of property) that; "Leasehold property being; ALL that piece of land in extent 100 hectares more or less being a portion to be demarcated of Farm No. 2761 situ ate at Chisamba in the Central Province of the Republic of Zambia as agreed upon by the Purchaser and the Vendor as evidenced by the sketch plan attached hereto. (Underlined by the court for emphasis only)". We therefore have no difficulties in accepting the lower Court's finding that the contract incorporated a road reserve in the South. Therefore, the appellant's refusal to provide the said road reserve was a fundamental breach. In determining the question whether specific performance was rightly ordered, we have taken into account firstly the case of Stickney v. Keeble. 121Secondly, Tito v. Waddel and others19l at p.322 where it was held inter alia that: -J15- \ j ' ( t "The court gives specific performance instead of damages only when it can by that means do more perfect and complete justice." And thirdly, the case of Jane Mwenya and Jason Randee v. Paul Kapinga1101where the Supreme Court held inter alia that: "The law takes the view that damages cannot adequately compensate a party for breach of contract for the sale of an interest in a particular piece of land or of a particular house however ordinary." We have also taken into account paragraph 248 of the Halsbury Laws of England 121 which sets the instances when specific performance will be refused as follows: "The claimant is not entitled to the remedy of specific performance if there has been conduct on his part, such as misrepresentation, disentitling him to the relief in equity, and the remedy may be refused if it would impose great hardship on an innocent vendor, where for instance he has entered into the contract under a mistake, although the other party has not contributed to it. -J16- Delay in itself is not a bar to the award of specific performance, the question is whether, in all the circumstances it would be unjust to the defendant to grant the decree. Where by notice or otherwise time if of the essence of the contract, a party who is unable or unwilling to complete on the completion date is not entitled, to specific performance." In casu, the appellant's evidence was that he could not provide an easement on the Southern side b ecause there was another one on the North. Further that, there were paddocks on the Southern side where he was carrying out some activities which prevented him from providing a road reserve. The first reason could not stand because the parties h ad agreed on an easement on the South. The second reason was also lame because the appellant did not substantiate his allegations. Since the respondents were not guilty of any conduct disentitling them to the relief in equity, the judge judiciously exercised her discretion to order specific performance of the contract. We have scrutinised the terms and conditions of the contract especially conditions 4 and 5 which read as follows: "4. The date fixed for completion shall be two weeks after the vendor has advised the purchaser of the receipt of the survey diagrams relating to the property. -Jl7- . . , 5. The purchase price shall be paid in two instalments as follows: (a) Kl00, 000, 000 at signing of contract and the balance of (b) K400, 000, 000 on date of completion." In Mwenya & Randee v. Kapinga1101 the Supreme Court observed that time can be of essence if, firstly, it is stipulated in the contract that it shall be so; and secondly, if in case where one party has been guilty of undue delay, he is notified by the other that unless performance is completed within a reasonable time , the contract will be regarded as at an end. The view we take is that time was not of the essence as it was not stipulated in the contract. Although the respondents were warned before the purported termination of contract, it is clear from the evidence on record that the appellant's action was prompted by ill motive because he was the one who had breached the contract in the first place. His breach led to the delay in payment of the balance of the purchase price. By law cited above delay in itself is not a bar to the award of specific performance. The respondents in fact paid the balance of the purchase price in the sum of K400m into court on 9th April, 2014 (page 30 of the Record of appeal shows Notice of payment into court). Therefore, the appellant would not suffer hardship by any award of specific performance. -Jl8- ' ' t .. •. • In paragraph 232 on resc1ss10n, Halsbury's Laws of England121 states among other things that: "If the contract contains a condition entitling the vendor to rescind on the happening of certain events and those events happen, the vendor may rescind. In the absence of such a condition, the vendor may rescind only if the purchaser's conduct is such as to amount to a repudiation of the contract and the parties can be restored to their former position" In the present case, the contract did not contain a condition entitling the vendor to rescind on the happening of certain events. Therefore the vendor (appellant) may rescind only if the purchasers (respondents) conduct was such as to amount to repudiation of the contract. It is clear to us that the respondent's conduct did not amount to repudiation of the contract because in all correspondence from their advocates to the appellant's advocates they indicated an intention to complete the contract for as long as the road reserve on the South was provided for. The purported rescission of the contract was therefore unjustified and the ref ore the rescission is ineffective. The correct survey diagram depicting a road reserve in the south was never issued. Therefore, the lower court properly directed itself when it found that the respondents were justified in withholding the balance of the purchase price and the Certificate of Title because they had a lien over it after executing the contract and paying the deposit on the purchase price. The lower -J19- court was therefore on firm ground when it found that the respondents were not in breach of the contract. For the reasons which we have given, the appeal fails on all grounds except ground 5. The Judgment of the lower Court is h ereby upheld to the stated extent. We order that the parties shall bare their own costs. Dated at Lusaka this -~~ day of .. t:J.ct.;J .. 1• 2017. C. K. MAKUNGU COURT OF APPEAL JUDGE F. M. CHISHIMBA ~ --c2__ .................................... M. M. KONDOLO S. C. COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE -J20-