Ruth Kumbi v Robinson Kaleb Zulu (SCZ/APPEAL NO 133/2009) [2013] ZMSC 61 (29 August 2013)

I REMECOURTFORZAMB~ IN 1.'HE SUP ·aoLDEN AT _Lu_sAK!!: lCivil Jurisd1ctto~) $CZ/APPEAL NO 133/200_2_ BETWEEN: RUTHKUMBl AND ROBINSON KALEB ZULU APPELLANT RESPONDENT • coRAM: Mumba, Ac• t DCJ Wan 1, , k . JS and Lengalenga Act. JS . On 30 ~\\ ~ t\\ '2013 and 29th August 2013 :P ' R. P Bwalya, ~au.an~ \e%a'. . . ~ i\~ C\\t\le\Or Women. For the Appellant: For the Respondent: E. Mwansa of Messrs. Mwansa Phiri & Partners. JUDGMENT Mumba, Act. DCJ delivered the Judgment of the Court. Cases referred to: 1. Development Bank of Zambia and Livingstone Saw Mills Limited v. Jet Cheer Development (Z) Limited (2000) Z. R. 144 2. Crown Cork (Zambia) Limited v. Pamela Hellen Jackson (Married Woman), (1988-1989)Z. R. 82 3. State Lotteries Board of Zambia v. Alice Tembo (1988-1989) Z. R. 16 4. Photo Production Limited v. Securicor Transport Limited (1980) A. C. 5 . Gideon Mundanda v. Timothy Mulwani and Agricultural Finance Company Limited And S. S. S. Mwiinga (1987) Z. R. 29 6. Swarp Spining Mills Plc v. Chileshe and Others (2002) Z. R. 23 7. Mwenya and Randee v. Kapinga(1998) Z. R.12 Legislation Referred To: 1. High Court Act, Chapter 28 of The Laws of Zambia J2 • Works Referred To: th dition Cheshire and Fifoot, . . Law of Contract, 12 E 1. 2. Black's Law Die wn , . t· ary 9th Edition, page 740 This is an appeal agrunst t e J . h ·udgment of the High Court · dated the 27th day of Septem ber 2007. ' The facts that give nse to the a . . ction are that the appellant was offered to purchase property being house number 7921, Woodlands, by her then employer Zambia Agricultural Development Limited. When she failed to raise the money to purchase the said house within the time frame given by her employer, the appellant approached the respondent and offered hiin to buy the said house from her at the sum of ZMK 26,000,000. On the 17th of April 1996, a contract for the sale of the said house was entered into between the appellant and the respondent. Pursuant to the said contract, the respondent paid the sum of ZMK14, 000,000 to Zambia Agricultural Development Limited for the purchase of the said house as agreed with the appellant. The balance of ZMK 12, 000, 000 was to be paid to the appellant upon transfer of the title to the respondent. The parties used the services of a mutual lawyer, Lekiwe Zulu, who was PW2 in this matter. When the appellant refused to transfer the . .:~, ~~---- ' ,.,:i; . W, . ~- ~ ~ 'f!N- . I r,;·cpl"~r(y to :.he respondent, be brought an action and in his 1. LL Specific performance of the contract of sale; 1'/If:s:ne ptofits vi .th effect fron1 th~ J. 7 th of April, 1997 to the date of J.iayment; ;n. 1".:'an~ages .ft;1· b1-;_=: 1ch of contract; and 1v. Costs. Tb(~ rcspoad'=-r:i-. filed in a defence and counter-claim. At ~iial, tl~e a.?pellant. <.lgrted to having entered into a contract with · the rr.::·.::r~mder:it for the s:-2.le of plot nun1bcr- 7921, Woodlands. She ad.rnitled tha.t th,.; respondent n1ade an initial payment of ZMKl~-,000,000 but .de!'lied that this is the money that went to her forn1er employer for the purchase of the said house. The appellant alleged that the respondent was in breach of the c.;ontr8.ct as hi:! had. travelled out of the country and had not paid the balance of th~ pu;_·,;:.1 ~1.se price. She also blamed their mutual l::i.~Nycr, PW2, claiming that she complicated the contract. In his Judgrr;.cnt-, the learned trial Judge found that the c-_;<1.iruct h2.d be':.!~1. duly executed. He further found that the sale J4 bad 1:1ct heen con1.pleted because the appellant did not provide the c ertificate of title to their mutual lawyer to enable her proceed v.ri.t.h th ,; .:..ssi.gnment of the property. He found that the appellant had. brc8.ched the cor..ditions of the contract of sale and consequently ordered that the appellant transfers plot number 7921, V/c1odlands, to the respondent. The appellant, beir~g dissatisfied with the judgment of the learned trial Judge filed in three grounds of appeal as follows: J.. Th'l lca::ned td.al Judge erred in law and in fact in awarding an order for . specific performance in the . c:irct;.mstances where the conciuct of the respondent cannot be said to be blameless and where no notice to ~omplete was ever served by the respondent. In this ground, learned Counsel for the appellant, Mrs Bwalya contended that the learned trial Judge should not have awarded specific perfonnance as . the respondent's behaviour cannot be said to have been blameless. She submitted that the evidence from the court below is clear in that the respondent had travelled to the United Kingdom shortly after signing the contract a nd only returned after three years. Mrs Bvvalya pointed out that JS upon the respondent's return, he asked for the contract to be completed but before this could be done, he left for another three years. It was further submitted that there is evidence that the appellant had made efforts to locate the respondent and even Counsel who acted for both parties could not locate him. She contended that this shows that his absence from jurisdiction made it difficult for the appellant to complete as she did not know where to locate him. Mrs Bwalya argued that the respondent's conduct was not blameless and he was therefore not entitled to specific performance, being an equitable remedy. In support of her argument, she cited the case of DEVELOPMENT BANK OF ZAMBIA AND LIVINGSTONE SAW MILLS (Z) LIMITED VS JET CHEER DEVELOPMENT ZAMBIA LIMITED <11 in which we held that: "(ii) Specific performance is an equitable relief and the maxim that applies in a case of this nature is "he who comes to equity must come with clean hands." Mrs Bwalya also argued that the respondent's long absence from jurisdiction amounted to an implied repudiation of the contract and in support of this s u bmission cited the case of J6 CROWN CORK (ZAMBIA) LIMITED V PAMELA HELLEN JACKSON (MARRIED WOMAN) 121 in which we held that: "Where there is no express repudiation by the party in default and where time is not the essence of the contract because a notice to complete has not been properly served, a party can only rely upon implied repudiation if it can be shown that the party has so conducted herself as to lead a reasonable person to believe that she would be unable to perform the contract." She contended that the respondent's long absence from jurisdiction justified the appellant's refusal to complete the transaction as his conduct implied a repudiation of the contract. In response learned Counsel for the respondent, Mr. Mwansa submitted that the learned trial Judge was on firm ground in ordering specific performance as the respondent's trip to the United Kingdom did not in any way undermine the contract since the parties had a mutual advocate who was within the jurisdiction. He submitted that there is evidence from PW2 in the court below that she could not proceed to prepare the J7 assignment in respect of plot number 7921, Woodlands, because the appellant had refused to hand over the title deed in respect of the said property. He pointed out that it is clear that the assignment of the property could not be done as the appellant is still holding on to the title deed for the property. Mr. Mwansa further submitted that it was not attainable for the respondent to serve a notice to complete on the appellant since both parties were using the services of the same lawyer. He further argued that in this particular contract, failure by the respondent to serve the notice to complete does not amount to a repudiation of the contract. He insisted that there was nothing blameworthy on the part of the respondent in this case and he was entitled to the award of specific performance . 2. The learned trial Judge erred in law and in fact in awarding a remedy in equity without first considering whether damages were an adequate remedy. In this ground, Mrs Bwalya referred us to clause 10 of the special conditions of the contract of sale that reads as follows: "If the transaction be frustrated as a result of default on the part of the purchaser or vendor which cannot be ,,,,. JS conveniently remedied, the amount paid so far shall be refunded with costs." Mrs. Bwalya submitted that the above clause suggests that the parties intended for damages to be an adequate remedy in the event of default by either party. This intention, it was submitted, was evidenced by the letters written by the respondent to the appellant asking for a refund of the balance paid barely three months after the contract had been entered into. She submitted that courts are generally bound to apply express terms of a contract and in so doing uphold the fundamental principle of freedom of contract. She cited the case of STATE LOTTERIES BOARD OF ZAMBIA VS ALICE TEMBO 131 in support of this submission. Mrs. Bwalya also referred us to the case of PHOTO PRODUCTION LIMITED VS SECURICOR TRANSPORT LIMITED 141 in which Lord Diplock observed as follows: "That a basic principle of the law of contract ..... is that the parties to a contract are free to determine for themselves what primary obligations they will accept." Mrs Bwalya contended that the appellant and the respondent had expressly agreed to a refund clause in the J9 contract and the learned trial Judge ought to have applied it in his judgment as opposed to awarding the remedy of specific performance . She argued that the learned trial Judge should have awarded damages as in tended by the parties as opposed to specific performance . In response , Mr. Mwansa submitted that the learned trial Judge was on firm ground in ordering specific performance. He submitted that to begin with, there is in existence a written contract for the purchase of plot number 7921, Woodlands , for the sum of ZMK26,000,000 and the respondent made a part payment of ZMK14 ,000,000 towards the same. That by that payment, the respondent acquired an interest in the property which he seeks to enforce. He submitted that while specific performance is a discretionary remedy, it is settled law as per CHESHIRE AND FIFOOT'S LAW OF CONTRACT, 12th Edition that: "Where a vendor refuses to convey a land sale, a mere award of damages would defeat the just and reasonable expectations of the plaintiff." JlO Mr. Mwansa also referred us to the case of GIDEON MUNDANDA VS TIMOTHY MULWANI AND AGRICULTURAL FINANCE COMPANY LIMITED AND S. S. S MWIINGA 151 in which we held that: "(i) A Judge's discretion in relation to specific performance of a contract for the sale of land is limited as damages cannot adequately compensate a party for breach of a contract for the sale of land" Mr. Mwansa pointed out that the appellant has been unwilling to proceed with the sale of the house from the onset despite the respondent providing the initial payment for the appellant to purchase the house in issue from her former employer. That upon realising the unwillingness on the part of the appellant to perform her obligations under the contract, the respondent asked for a refund of the down payment which the appellant refused to give back. Mr. Mwansa submitted that with so many years down the line, no amount of compensation would be adequate for the respondent. He argued that it was too late in the day for the ·appellant · to hold the respondent to damages when that offer had been turned down and the respondent had since moved to apply to court for specific performance. r r _· . ' Jll 3. The learned trial Judge erred in law and in fact when he failed to consider the pleadings in the matter and in failing to consider the plaintiffs counter-claim in light of the evidence adduced. Learned Counsel for the appellant, Mrs. Bwalya submitted that the appellant had counter-claimed for damages for breach of contract that arose as a result of the respondent's failure to pay the balance of the contracted amount and to meet other statutory obligations. She contended that the appellant suffered damages as a result of the respondent's failure to pay the balance leaving her in uncertainty for years as well as causing her mental anguish . It was further contended that due to various interventions by the respondent, the appellant has been unable to use the property in issue for financial gain. Mrs Bwalya further submitted that the failure by the respondent to pay the full purchase price at the required time prevented the appellant from acquiring another property to replace the one that she had sold . She contended that this is one such case in which damages should be considered and in support of this argument, cited the case of SWARP $PINING MILLS PLC VS CHILESHE AND OTHERS. 161 J12 In response, learned Counsel for the respondent, Mr. Mwansa argued that the appellant cannot claim that her counter claim was not considered by the trial court when she did not adduce any evidence to support her allegation for breach of contract by the respondent. He submitted that in paragraph 5 of her counter-claim, the appellant pleaded that the date fixed for completion of the contract was four weeks after obtaining states consent to assign yet she did not hand over title to their mutual lawyer from which the certificate of title number could be extracted for purposes of obtaining the state's consent to assign and facilitate payment of property transfer tax. Further, the appellant did not rebut the evidence of PWl and PW2 that she ( refused to hand over the certificate of title relating to plot number 7921, Woodlands. He argued that the trial court could not have commented on pleadings in respect of which no evidence was adduced as this is tantamount to the court creating evidence which is not before it. Mr. Mwansa submitted that until a pleading is substantiated by evidence, it remains a pleading. He argued that since the appellant did not adduce any evidence in respect of the counter claim, the counter-claim consequently fell off. ~ ,r . '. J13 We have examined the grounds of appeal and submissions made by Counsel thereon . We will deal with the grounds of appeal as they appear. In the first ground of appeal, learned Counsel for the appellant, Mrs Bwalya argues that the learned trial Judge erred in awarding specific performance as the respondent's conduct cannot be said to be blameless. She submitted that the respondent went out of the country shortly after the contract was entered into and the appellant as well as their mutual lawyer PW2 could not locate him. That he only returned in 1999 after a three year period and left again only to return in 2002. On behalf of the respondent, Mr. Mwansa's reply is that the respondent's ~ absence from jurisdiction did not undermine the contract as the parties had a mutual lawyer who was present in the country. He further pointed out that even before the respondent left the country, the appellant had shown reluctance to proceed with the sale of the house hence his demand for the refund. He submitted that the respondent's conduct was not in any way blameworthy. From the record of appeal, it is clear that the appellant and the respondent entered into a contract for the sale of plot number 7921, Woodlands, on the 17th of April 1996 for the sum of J14 ZMK26,000,000. The respondent made a down payment of ZMK14,000,000 and the balance was to be paid upon transfer of title to the respondent as per clause 9 (b) of the special conditions of the contract of sale which reads as follows: "The balance of the purchase price in the sum of Kwacha eleven Million shall be paid on title being transferred." 9 We must state that PW2, the parties mutual advocate admitted that the balance in this clause should have shown twelve million kwacha and not eleven million kwacha. It was also a term of the contract that the respondent shall discharge the payment for property transfer tax, consent to assign and registration as well as the legal fees. The vendor on the other hand had the duty to obtain the state's consent to e assign as per clause 4 of the special conditions of the contract of sale. The consent had to be obtained within 10 weeks from the date of the contract. However, there is no evidence on record to show that the appellant obtained this consent as required within the stipulated time frame or at all. PW2 who was acting for both parties testified that she could not prepare the assignment for the J15 property as the appellant had refused to submit the title deed relating to plot number 7921. Nowhere in her testimony does PW2 attribute the failure to complete to the respondent's absence from jurisdiction as stated by the appellant's counsel in her submissions. We have also noted from the record of proceedings in the court below that when the respondent sensed the appellant's reluctance to convey the property, he asked for a refund of his money with costs, which request the appellant turned down. This is before he travelled out of jurisdiction and is evidenced by the letters written by the respondent as well as by his former employer (who had provided the mortgage to purchase the said house) on pages 76 and 77 of the record of appeal. This shows that the appellant was not willing to assign the property even when the respondent was still in the country. We do agree with Mr. Mwansa that the respondent's trip to the United Kingdom did not in any way undermine the contract of sale. In so doing we once more wish to refer to the evidence of PW2 the mutual advocate for the parties who stated that all efforts to collect the title deed from the appellant to enable her prepare the assignment proved futile. The certificate of title which ' . J16 is cardinal to the fulfilment of the contract to date remains with the appellant. In the case of DEVELOPMENT BANK OF ZAMBIA AND LIVINGSTONE SAW MILLS (Z) VS JET CHEER DEVELOPMENT ZAMBIA LIMITED 111 that Mrs. Bwalya has referred us to, we allowed the appeal against an order for specific performance due to fraud on the part of the respondent. In that case we observed as follows: " .......................... , the respondent in seeking specific performance did not come to court or equity with clean hands. The relief of specific performance was not available to it." In this case, we find nothing wanting with regard to the respondent's conduct in the performance of the contract. On the 4t other hand, there is nothing of the appellant's conduct to show that she was willing to assign the property to the respondent. After receiving part payment for the property, she held on to the title deed making it impossible for their mutual advocate to prepare the assignment. We do agree with Mr. Mwansa that the ,, , • ' I I f Jl7 I respondent's conduct 1s blameless as it did not affect performance of the contract in any way. Further, Mrs. Bwalya submitted that the respondent's long stay outside jurisdiction amounted to an implied repudiation of the contract and therefore justified the appellant's refusal to complete the transaction. We do not agree with this submission as there is nothing in the respondent's conduct to show that he was unwilling to perform his side of the contract and from which repudiation can be implied. He could only perform his obligations under the contract after the appellant had submitted the title deed which she has not done to date . As we have already pointed out, the appellant was not willing to complete the sale even befote the respondent left the country. Further, as Mr. Mwansa has submitted, both parties used the services of the same lawyer who was within the country and she clearly stated that the sale could not proceed on account of the appellant's refusal to hand over the title deed relating to the property. Therefore, the appellant cannot claim that the respondent's long stay outside jurisdiction amounted to an implied repudiation of the contract. J18 ' I ' In the circumstances of this case, we do agree with the learned trial Judge in awarding specific performance to the respondent as the respondent's conduct was not blameworthy. The first ground of this appeal lacks merit and therefore fails . In the second ground of appeal, Mrs. Bwalya submitted that the learned trial Judge ought to have awarded damages as opposed to specific performance because that is what the parties had envisaged in clause 10 of the special conditions of the contract of sale. We will reproduce clause 10 of the special conditions of the contract of sale which reads as follows : "If the transaction be frustrated as a result of default on the part of the purchaser or vendor which cannot be conveniently remedied, the amounts paid so far shall be refunded with costs." - She argued that the learned trial Judge should have applied this clause in his judgment so as to fortify freedom of contract. In our view, clause 10 of the special conditions of the contract of sale relates to frustration of the contract. Frustration is defined as "The prevention or hindering of the attainment of a goal, such as contractual performance" and commercial • J19 frustration 1s defined as "An excuse for a party's non- performance because of some unforeseeable and uncontrollable circumstance." (Black's Law Dictionary, 9th Edition, page 740). From the evidence adduced by both the appellant and the respondent in the court below, the contract between the parties has not been frustrated as they are both in a position to perform their obligations under the said contract. There is nothing in the appellant's conduct to suggest that there was some occurrence which prevented her from performing her part of the contract. After receiving the down payment of ZMK14,000,000 from the respondent, it would appear the appellant changed her mind about the sale. The appellant has simply refused to assign plot number 7921, Woodlands, to the respondent and we hold the view that a mere refusal to perform one's obligations under a contract does not amount to a - frustration of the contract. We therefore do not agree that clause 10 of the contract of sale limits the remedy that the trial court could grant to damages. In contracts pertaining to the sale of land, the trial Judge has very limited discretion with regard to the remedy to award as we held in the case of GIDEON J20 MUNDANDA V TIMOTHY MULWANI, THE AGRICULTURAL FINANCE COMPANY LIMITED AND S. S . S MWIINGA. 15 > The contract between the appellant and the respondent being valid, we do agree with Mr. Mwansa that looking at the circumstances of the case and the time that has lapsed from the date of the contract, no amount of compensation could be adequate for the respondent save for an award of specific performance. The subject matter of this contract being a house, it would be a grave injustice to order damages as indeed the respondent's just and reasonable expectation would be defeated. In the case of MWENYA AND RANDEE V KAPINGA 17 > we held that: "(ii) The law takes the view that damages cannot adequately compensate a party for breach of contract for sale of an interest in a particular piece of land or of a particular house, however ordinary." In our view the learned trial Judge was on firm ground in awarding specific performance. The second ground of appeal lacks merit and therefore fails. ,. . . ... ' J21 '' ' On the third ground of appeal, Mrs. Bwalya submitted that the learned trial Judge failed to consider the appellant's counter claim in the court below for damages for breach of contract as a result of the respondent's failure to pay the balance of the contracted su1n and to meet other statutory obligations. Mr. Mwansa on the other hand argued that the appellant did not adduce any evidence in support of her counter-claim. He submitted that until a pleading is supported by evidence it remains a pleading and the learned trial Judge cannot as such refer to it in his judgment. He contended that since no evidence was adduced in support of the counter-claim, it consequently fell off. We have noted from the Judgment of the learned trial Judge that he did not specifically make mention of the counter-claim before him. On page 31 of the record of appeal, paragraph 2, lines 11-12 the learned trial Judge merely stated that: ''I have carefully considered the evidence adduced on behalf of the plaintiff and the defendant ....... " I We must state that a counter-claim 1s substantially a cross action and not merely a defence. ORDER 28 RULE 3 of the HIGH COURT RULES reads as follows: "A defendant in an action may ............ set up by way of counter-claim against the claim of the plaintiff, any right or claim, whether such........ counter-claim sound in damages or not, and such. ........ counter-claim shall have the same effect as a statement of claim in a cross action so as to enable the Court to pronounce a final judgment in the same action, both on the original and on the cross-claim. ............ ". In view of the above , there is need for a trial Judge to clearly state what the fate of a counter-claim is as it is a separate claim. In this case however, we do agree with Mr. Mwansa that the appellant did not adduce any evidence in support of her counter claim. After giving her defence, the appellant did not proceed to adduce evidence in support of her counter-claim but instead closed her case. In justifying that the appellant is entitled to damages, Mrs Bwalya submits that the appellant did not enjoy any financial gain from the said property due to the interventions by the respondent. However, evidence frorrf the court below is to • ,r. .. .. t., l l J J23 the contrary. The appellant was receiving rentals from the said house which act prompted the respondent to apply to court for the rentals to be paid into court until the determination of the matter. This is evidenced by the rulings of the learned trial Judge and a single Judge of the Supreme Court ordering the appellant to pay the rentals into Court. She ignored both rulings . Mrs Bwalya also submitted that the appellant was entitled to damages as she had lost the opportunity to purchase another house using the balance that remains unpaid to date. A perusal of the record of proceedings will show that at no point in her testimony did the appellant make this claim. This in our opinion is tantamount to introducing evidence not adduced in the Court below. In our view the appellant did not adduce any evidence to show that she was entitled to damages as claimed. In this regard, we hold the view that the failure by the appellant to adduce evidence in support of her counter claim implies that the counter-claim consequently fell off. The third ground of appeal lacks merit and therefore fails. On the totality of the issues we have come to the conclusion that this appeal has no merit and therefore fails. We award cos~s J24 to the respondent, both here and below to be taxed in default of agreement. The judgment below is upheld . F . N . M. Mumba ACTING DEPUTY CHIEF JUSTICE M. E. Wanki SUPREME COURT JUDGE ···········~········:£·········· F . M. Lengalenga ACT. SUPREME COURT JUDGE ' .