Tanzania Railways Authority v Kalumba (Appeal 128 of 2002) [2003] ZMSC 118 (23 December 2003)

IN THE SUPREME COURT OF ZAMBIA HOLDEN AT KABWE APPEAL NO. 128 OF 2002 (CIVIL JURISDICTION) BETWEEN: TANZANIA ZAMBIA RAILWAYS AUTHORITY Appellant ROBINSON C KALUMBA Respondent CORAM: Chirwa, Chitengi and Silomba, JJs on 7th November and 23rd December, 2003 For the Appellants: For the Respondent: Mr. T. S. Chilembo, T. S. Chilembo Chambers Mr. S. S. Zulu, SC, Zulu & Company JUDGMENT Chirwa, J. S. delivered judgment of the Court: - The appeal is from the refusal by the High Court to grant specific performance of contract for sale of house on plot No. 5611 Kalundu, in Lusaka. The undisputed facts in this matter are that the respondent is the registered owner of plot No. 5611, Kalundu, Lusaka. The appellant took possession of the house under circumstances that led to this action. J2 According to the respondent, he asked Dream House Investments Ltd, an Estate Agent, to look for a tenant for his house at £500,000-00 per month and this was in 1992. According to the respondent, his agents found suitable tenants who are the appellant and demanded 2/2 years rent payment in advance which was duly paid. However, according to the appellants, they were looking for a house to purchase for their Regional Manager and they approached a few sellers and the respondents Agents offered three houses which were duly inspected by the representatives of the appellants and the house of the respondent was selected. Agreed price of KI5,000,000-00 was reached upon and the appellants paid the Estate Agent. A Law Association of Zambia Contract and Conditions of Sale was duly executed purportedly by the respondent and the representative of the appellant. In this contract of Sale, the advocate who acted for both parties was indicated as Austin H. Muhyila. An assignment purporting the transfer was also signed by the parties. The appellants, after paying what they thought was a purchase price, raised a number of faults discovered on the house which faults were done after inspection. This was brought to the attention of the Estate Agent who promised to make good and in fact did make good and the appellant took possession of the house. The dispute came to light in January 1995 when the respondent wrote the appellant asking them to give vacant possession of the house by 1st July 1995 as the tenancy would come to an end. This came as surprise J3 to the appellants as throughout they thought they had bought the house and not merely leased it. In light of this latest development the appellants entered a caveat on the property to stop any dealings on the land. They also commenced the action for specific performance per the contract o sale signed by the parties. At the trial, the respondent admitted to be owner of house on Plot 5611, Kalundu and that in 1992 he wanted to lease his property and requested Dream House Investment Ltd to look for a tenant. Dream Homes Investment Ltd did find the appellants as tenants and he demanded rent at K500,000-00 per month and demanded 18 months advance payment which was duly paid and the appellant took possession of the house. He denied instructing Dream House to sell the house on his behalf. He also told the Court that he had no son by the name of Chashele Kalumba. He denied instructing S. P. Mulenga Associates to do valuation of the house. He denied signing any Contract of Sale of his house. He denied ever instructing Mr. Muhyila, as a Lawyer, to act for him in this sale transaction. On the other hand evidence on behalf of the appellant was that at the material time, Mr. Shitambuli, was Administrative Officer, was responsible for property on behalf of the appellant. He testified that the Area Manager for the appellant was accommodated in a rented house in Chilanga at K45,000-00 per month and that the landlord increased the rent to K50,000-00 which they thought was very high and they moved J4 him to Junior Guest House. They then started looking for a suitable house to purchase. They advertised in the national press and they got a number of responses. Among the responses was one from Dream House Investment Ltd. Represented by Mr. Kahoma, who took him and the Regional Manager to three properties to inspect. The purchase prices of three houses ranged from K28 million for the first house; KI 5 million for the second house and KI 6 million for the third house. After inspecting the hoses, they preferred the one going for KI5 million. They told Mr. Kahona that they had to consult with their head office and that they would come back to him. However, the first choice fell through as they were given 7 days within which to make payment. They then fell for the second choice going for KI 6 million. They asked the agent for a valuation report which was duly given to them, the property having been evaluated by Messrs. S. P. Mulenga & Associates registered Valuation Surveyors. They gave the open market value of KI 4 million. The agent, Dream House Investments Limited however told them that the owner wanted KI 5 million. After sometime the appellant paid the KI5 million through the agents. It was evidence of this witness that he and the Regional Manager never saw the owner of the house and that all dealings with the agent. It is also evidence of this witness that after having selected on this house which turned out to be the respondent, his Regional Manager took over the affairs and the mater was referred to their head office. It was his evidence also that the sum of KI 5 million was paid to Dream House J5 Investments Ltd and a receipt was receipted showing that it was “Received the sum of Ki5 million kwacha being payment for Mr. Kalumba’s house in Kalundu.” Thereafter Contract and Conditions of Sale and Assignment were executed at head office and Advocates Messrs Austin H. Muhyila, introduced to them by the agent acted for both the vendor H. Muhyila, introduced to them by the agent acted for both the vendor and purchaser and the fees were paid on 50/50 basis. It came as a shock to him that they asked to vacate the house as the lease period had finished and the advance rent paid was exhausted. It was then indicated that they were renting the house at K500,000-00 per month and the KI 5 million was advance rent paid for 2 years. It is from this point, as we have already stated, that the dispute arose and the appellant sued for specific performance. In declining to order specific performance, the learned trial judge was of the view that the conduct of the appellant was unreasonable in that they purported to work through lawyers they did not know and that they never pursued to get title deeds. He was of the view that the failure by the appellant to call anybody from Dream House Investment Ltd to support their claim and lack of proof of authentication of the respondent’s documents was fatal to their case. In dismissing the appellant’s case, the learned trial judge entered judgment in favour of the respondent on his counter-claim by awarding him rent arrears at K500,000-00 per month from 1st July 1995 until vacant possession is given and the amount attracted interest at the current Bank of Zambia fixed deposit rate from date of the writ to date of judgment, thereafter the whole judgment sum to J6 carry 8% interest until payment. It is against these finds that the appellants have appealed. To support the appeal, the appellant had four (4) grounds of appeal which were backed by detailed written heads of argument and oral submissions. The respondent also filed detailed written submissions and also made strong oral submission supporting the findings of the learned trial judge. We will deal with the first two grounds together. In the first ground of appeal, it was said that the learned trial judge erred both in law and in fact by holding that no sale of Plot No. 5611 Kalundu took place when all the documentary evidence on record prove that there was a sale and not a lease agreement. In arguing this ground of appeal reference was made to correspondent between the Estate Agent and the appellant especially the letter of acceptance, the receipt for KI 5 million, the valuation report by Messrs S. P. Mulenga & Associates and the Law Association of Zambia Contract of Sale and the assignment. It was submitted that a proper consideration of these documents together with the evidence of PW1 the learned trial judge misdirected himself in holding that there was no sale agreement but a lease agreement of the property. In answer to this ground of appeal it was submitted that the important documents in this case are the Contract of Sale and the Assignment and that from the evidence of the respondent that he is blind and can only sign by a special rubber stamp, these documents are useless J7 to the appellant. It was further argued that the lawyer who is purportedly to have prepared both the Contract of Sale and Assignment denied preparing the documents. It was submitted that with such evidence, the learned trial judge was on a firm ground in believing the evidence of the respondent. The second ground of appeal was that the learned trial judge erred both in law and in fact when he concluded that PW1 was an irrelevant witness with regard to whether what took place was a sale or lease agreement as it was this witness who produced documentary evidence to show that in fact there was a sale of which he played a role. It was agreed under this ground that PW1 was a relevant witness as it was him who was involved in the search and choice of the house to purchase. He dealt with the respondent’s agent during the transaction and as such his evidence was relevant. In answer to this ground it was submitted that at best the evidence of PWlwas hearsay evidence. It was submitted that the respondent’s agent was dealing with the Area Manager and the witness was a mere Administrative Officer and in his testimony he used the word “We” and not “I”. Further the evaluation report from Messrs S. P. Mulenga & Associates, no one from there was called to testify as to who gave them instructions. We have considered these two grounds. From the evidence it would be wrong to say that PW1 was irrelevant and that his evidence was J8 hearsay. He was in charge of property for the appellant and he was involved in looking for a suitable accommodation for the Area Manager. He testified that the Area Manager was accommodated in a house in Chilanga where the appellant was paying K45,000-00 per month and when the landlord decided to increase the rental to K5 0,000-00 the appellant felt that that was very expensive and they moved their Area Manager to their Junior Guest House and they then started looking for a suitable house to purchase and in response to the advertisement, Dream House Investment Limited came in offering houses for sale. PW1 and the Area Manager, in the company of Mr. Kahona from Dream House Investment Ltd, visited three houses and they chose one going for K15 million. They lost this one because they were required to pay the purchase price within 7 days and they then went for the second choice which was going for K16 million. In all these activities, PW1 was involved. The use of the word “We” instead of “I” cannot make his evidence hearsay. The inspection and selection of the houses was done by him and his Area Manager, hence the use of the work “We”. Equally his involvement in the affair cannot be called irrelevant. His involvement continued even after payment for the house was made and occupation of the house taken because correspondence shows that the appellant complained to Dream house Investments Ltd about the state of the house that it was not in the state they bought as a few fittings had been removed and Dream House Investments Limited promised to make goof of the same. PWl’s evidence is therefore not irrelevant nor hearsay. His evidence, is from the most suited person from the appellant’s outfit. It was, therefore, misdirection by the learned trial judge to refer to PW1 as J9 irrelevant or even to say that the person who should have testified on behalf of the appellant was the Area Manager. PW1 was the right person as he was in charge of the estate and property of the appellant. We would, therefore, allow this second ground of appeal. Coming to the first ground of appeal, the evidence has to be looked at its totality. The respondent does not dispute dealing with Dream House Investment Limited were his agents, but according to him, agents to find tenants for the house. There are a number of factors that have to be considered before accepting this piece of evidence. It is too much of a coincidence that Messrs S. P. Mulenga & Associates should be engaged in this matter. In their report the specifically state that they had been requested by Mr. Robinson C. Kalumba for the purpose of determining the open market value for possible sale. This report was sent to the appellant by the respondent’s agent on request. Further, the action by the appellant to accept to lease the house at K500,000.00 per month goes beyond simple and damnest logic that they could complain an increase of rent of K50,000-00 per month where they were renting as very expensive and accept to rent a house at K500,000.00. It does not fit with any logic at all. There further sets of facts which do not follow its proper logic. Accepting that the purported lawyer did not prepare the Contract of Sale and Assignments it appears not to be a mere circulation that he should testify that he knew the respondent’s son by the name of Chosele J10 Kalumba, since deceased and he the respondent in his evidence seems not to have had a son by that name. In his own evidence: “I have no son called Chashele Kalumba”. The lawyer explained that he used to play with the late Chashele Kalumba and that that could possibly be how he may have used his name. We agree with Mr Zulu that there is a fraud in this matter. But we go further to hold that the many coincidences and conduct of the parties point that the nucleus of the fraud is the respondent. The coincidences are too much to support the theory put forward by the respondent that he approached Dream Investments Limited for the purpose of finding a tenant. To the contrary, he engaged Dream House Investments Limited to find a purchaser (lawyer) for him and Dream Investments Limited acted on those instructions and found the appellants as purchasers. The respondent does not dispute receiving the proceeds of the purchase from Dream House Investments Limited. On the facts of the case, we are satisfied that the parties agreed on the sale and purchase of the house on Plot 5611 Kalundu, Lusaka and that in pursuant to that agreement, the appellant paid the purchase price of KI 5 million through the agents of the respondent and the respondent actually received the purchase price. We are satisfied that the learned trial judge misdirected himself in finding that there was no Contract of Sale and we accordingly set aside his finding and in its place hold that there was a valid Contract of Sale. We order the specific performance prayed for and order that the respondent executes the sale within 30 days JU from today failure to which this judgment shall be sufficient authority for the Registrar of Lands and deeds to cancel the Certificate of title on Plot 5611 Kalundu in favour of the respondent and in its place issue a certificate of title to the appellant. It is therefore unnecessary to consider the other grounds of the appeal. The appeal is allowed. The orders in favour of the respondent made by the learned trial judge are set aside. Cost to the appellant, to be agreed, in default to be taxed. D K Chirwa JUDGE OF THE SUPREME COURT P Chitengi JUDGE OF THE SUPREME COURT S S Silomba JUDGE OF THE SUPREME COURT