Jayesh Shah v Mwenda Mwimanewnwa Nyambe and Anor (APP/188/2021) [2022] ZMCA 168 (31 May 2022)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT LUSAKA (Civil Jurisdiction) APP/188/202 1 BETWEEN: JAYESH SHAH AND APPELLANT 1 ST RESPONDENT MAUREEN MWANGALA MWENDA 2ND RESPONDENT CORAM: CHISHIMBA, SICHINGA AND SIAVWAPA, JJA On 21st April and 31st May 2022 FOR THE APPELLANT: MR. J . ANDY WRIGHT OF WRIGHT CHAMBERS WITH MR. D. MUSHENYA OF THE SAME AND MR. W. SIMUTENDA OF TNW ADVOCATES FOR THE 18T RESPONDENT: MR. KHANGA OF MAKEBI ZULU ADVOCATES FOR THE 2ND RESPONDENT: MISS K. M. CHILESHE OF SUKWANA MWEEMBA & PARTNERS JUDGMEN'"E SIAVWAPA, JA, de live red the Judgment of the Court. J2 Cases referred to: 1. Joyce Ndavuka Gondwe v Christine Ziwolile Appeal No 37 of 2 . Chishala Karabasis Nevil(Male) Sharon Mwale v Laston Geoffrey Mwale Appeal 1 61 of 2015 3. Mwansa & Another v Mpofu and Another Supreme Court Judgment No.34 of 2018 Legislation referred to: 1. The Rent Act Chapter 206 of the Laws of Zambia 2. Rules of the Supreme Court of England (White Book) 3. High Court Rules Chapter 29 of the High Court Act 4. The Lands and Deeds Registry Act Chapter 185 of the Laws of Zambia 1.0 INTRODUCTION This is an appeal against a judgement delivered by the Honorable Mr. Justice E. Hamaundu sitting as High Court judge dated 8 th May, 2020. By that judgment, he dismissed all the Appellant's claims under the Rent Act and upheld the 2 nd Respondent's counterclaim that she was the legal owner of the property the subject of this matter. 2.0 BACKGROUND 2.1 The Appellant executed a contract of sale with the 1st Respondent on 7 t h September 2009 wherein it was agreed that the 1st Respondent would sell to the Appellant Subdivision A of '. , , J3 Subdivision 12 of Farm No. 441a, Roma (the property) for the consideration of US$125,000.00. 2.2 Before the contract was executed, the 1st Respondent presented a Certificate of Title to the property purporting that the same had been subdivided from the 2 nd Respondent's (1 st Respondent's mother) land. 2.3 It was a term of the contract of sale that the 1st Respondent would continue to occupy the property for a period of 12 months from the date of the contract paying to the Appellant a monthly rental of US$5,000.00. 2.4 On 9 th September 2009, Certificate of Title No 89340 relating to the property was registered in the name of the Appellant. 2 .5 As earlier agreed in the contract of sale, the parties entered into a lease agreement relating to the property on 11 th September 2009. 2.6 After four rental payments and one part payment, the 1st Respondent stopped paying rentals to the Appellant. 2.7 On 31 st May 2010, the Appellant wrote to the 1st Respondent informing him that he did not wish to renew the Lease agreement and requesting vacant possession of the property. J4 2.8 Aggrieved by the non-payment of rentals and the refusal to yield vacant possession, the Appellant commenced an action in the Court below. 3.0 CASE IN THE COURT BELOW 3.1 The Appellant commenced this action by originating notice of motion accompanied by an affidavit claiming the following reliefs: i. A declaration that the lease agreement entered by the parties herein for the leasing of the subject property has expired and the Respondent is not entitled to continued occupation thereof zz. For an order ejecting the Respondent from Subdivision A of Subdivision 12 of Farm No 441a, Lusaka zzz. An Order against the Respondent for payment of all outstanding rentals for the period March 201 0 to date of expiration of the notice to quit the premises. w. An order for payment of mesne profits from the date of the expiration of the notice to quit the premises. v. Interest on the amounts found due and payable by the Respondent vi. Any other relief the Court deems fit vzz. Costs of and incidental to this action .. .. JS 3.2 The Appellant stated that following the execution of the lease agreement, the 1st Respondent only paid two month's rentals and an amount of US$2,000.00 for January 2010. 3. 3 At the hearing of the summons, the learned trial Judge subjected the Appellant to cross-examination based on the affidavit evidence on the record. The 1st Respondent was however , allowed to adduce oral evidence and subjected to cross-examination thereafter. 3.4 In the turn of events, the 1st Respondent alleged that the sale was a fac;ade to enable him to borrow the sum of USD$125 000 from the Appellant with interest. He alleged that it was a condition of the agreement that the Appellant would not change title into his name. 3 .5 The amount borrowed was to be repaid by way of rentals under the lease agreement. The 1st Respondent stated that he stopped paying the instalments after h e discovered that the Appellant had changed title to the property into his name. 3.6 The 1st Respondent challenged the Appellant's title to the property based on fraud as he alleged that the property belonged to the 2 nd Respondent and that the subdivision of the property was irregularly done claiming that h e acquired title to the property by forgery. I J6 3.7 On 3 rd August, 2011, while the 1st Respondent was still on the stand giving evidence in chief, the 2 n d Respondent filed a summons to join the proceedings as intervenor pursuant to order 15 Rule 6 of the Rules of the Supreme Court 1999 Edition. 3.8 She was accordingly joined to the proceedings as the 2 nd Respondent by consent of all the parties after which she filed an affidavit in support of her claim to the property. 3.9 The 2 nd Respondent deposed that she was the legal owner of the property in dispute and denied ever sub-dividing her property for the benefit of the 1st Respondent. 3.10 In response, the Appellant filed an affidavit in opposition to the 2 nd Respondent's claim stating that his investigations had revealed that the 2 nd Respondent had obtained a duplicate Certificate of Title after which she executed and registered a deed of gift rela ting to the subdivided property in favour of the 1st Respondent on 5 th June 2009. 4.0 DECISION OF THE TRIAL JUDGE 4 . 1 The learned trial Judge noted that the matter had begun by originating notice of motion. J7 4.2 For guidance on how the 2 nd Respondent would prosecute her counterclaim, the learned trial Judge relied on Order 28 rule 7 of the Rules of the Supreme Court to find that a defendant in a matter begun by originating summons may make a counterclaim in the same matter. 4.3 Considering this, the learned trial Judge held that the 2 n d Respondent's affidavit was sufficient notice and particularisation of her counterclaim over the property. On the authority of Section 13 of the High Court Act, he went on to determine all the issues in controversy among the parties. 4.4 The learned trial Judge found that the 1st Respondent obtained title to the property by fraud. This being the case, the Appellant was not protected from exposure to an action by a person deprived of their land by fraud. 4.5 The learned trial Judge further found that the Appellant should have noticed the inconsistencies on the lands register in relation to the conveyance of the property before proceeding with the purchase. He therefore, found the purchaser not to be a bonafide purchaser as envisaged by Sections 34 and 59 of the Lands and Deeds Registry Act and dismissed all the claims. 4.6 The learned trial Judge then ordered the cancellation of the Appellant's title to the property, the 1st Respondent's JS transactions on the 2 nd Respondent's property, and the erasure of all entries from the register relating to the property. 4.7 It was further ordered that the 1st Respondent should reimburse the Appellant the sum of US$125 000 with an interest of 2% per annum from the date of the action to the date of judgment and that the Appellant and 1st Respondent should pay the 2 nd Respondent costs while they would each bear their own costs. 5. 0 THE APPEAL 5.1 Aggrieved by the judgment, the Appellant filed the Notice and Memorandum of Appeal on 17th August 2020 fronting seven grounds as follows: 1. That the learned trial Judge misdirected himself at law when he found that, the Appellant herein is not a "bonafide purchaser for value without notice" of property otherwise known as Subdivision A of Subdivision 12 of Farm No. 441a Lusaka. Thi.s 1s notwithstanding the fact that there was no finding by the Court below of fraud on the part of the Appellant. 2. That the learned trial Judge misdirected himself at law when he dismissed the Appellant's claim under the Rent Act Section 3 CAP 206 of the Laws of Zambia J9 3. That the learned trial Judge misdirected himself at law by failing to take into account and/ or give sufficient weight to the evidence that, the ]st and 2nd Respondent failed to substantiate the allegation of fraud, against the Appellant; this is notwithstanding that the 1st Respondent admitted fraud on his part. 4. That the learned trial judge misdirected himself at law and/ or misapprehended the facts when he found and/ or stated that the documents in the Appellant's affidavit in opposition are the documents the Appellant . relied upon when purchasing the property. 5. That the learned trial Judge misdirected himself at law when he failed to give proper direction at trial thereof and/ or failed to take into account the following to wit: (i) That the 2 nd Respondent joined the proceedings after the Appellant had closed his case and that the Appellant was not given the opportunity to defend himself properly against the 2nd Respondent's counterclaim grounded upon an allegation of fraud (ii) That the learned trial Judge misdirected himself at law when he held that in a matter dealing with fraud in terms of Order 28 Rule 7 of the Rules of the Supreme Court (1999) edition (White book) an affidavit served as a valid counterclaim JlO (iii) That the learned trial Judge misdirected himself at law by Jailing to take into account that the allegation of fraud was not specifically pleaded and/ or particularized per Order 18 Rule 8 of the Supreme Court Rules(l 999) Edition (White Book) 6. That the learned trial Judge misdirected himself at law, when he ordered that, the 1st Respondent should repay the purchase price to the Appellant. 7. That the learned trial Judge wrongly exercised his discretion to award costs against the Appellant herein. 6.0 ARGUMENTS IN SUPPORT 6.1 In grounds one and four, the Appellant attacks the learned trial Judge's finding that he was not a bonafide purchaser of land without notice. He argues that the documents that he examined at the time of purchasing the property relate to Stand No F / 441 a/ 12 which was not the property he was purchasing. 6.2 He further argues that since the printout relating to Stand No F/441a/12 and the property were printed on 19th June 2013 and 21st April 2011 respectively, the learned trial Judge could not rely on them to hold that he had notice as they were printed years after the he bought the property. Jll 6.3 The Appellant also faults the learned trial Judge for finding that he had notice of the 1st Respondent's fraudulent title without finding him guilty of fraud. He called into aid the case of Joyce Ndavuka Gondwe v Christine Ziwolile 1 to argue that the fraud of a vendor cannot vitiate a Certificate of Title. 6.4 The Appellant also relies on sections 58 and 59 of the Lands and Deeds Registry Act Chapter 185 of the Laws of Zambia to argue that he was not required to ascertain how the 1st Respondent acquired interest in the land as he took land from a registered proprietor to whom a Certificate of Title had been issued. 6.5 In grounds three and five, the Appellant takes issue with the learned trial Judge's application of Order 28 of the Rules of the Supreme Court. The argument is that while the Court has power to order that a matter commenced by originating summons be treated as if commenced by writ of summons, the Court must give directions as to the conduct of the matter. 6.6 The Appellant alleges that the learned trial Judge only gave directions in the judgement contrary to Order 28 of the Rules of the Supreme Court. It is further his argument that the failure to give directions deprived him of the opportunity to defend himself against the 2 nd Respondent's claims and allegations of fraud and left the Court without jurisdiction to entertain the 2 nd Respondent's claim. J12 6.7 Relying on the case of Chishala Karabasis Nevil {Male) Sharon Mwale v Laston Geoffrey Mwale2 the Appellant argues that the 2 nd Respondent should have specifically pleaded and particularised her allegation of fraud. 6.8 In grounds two and six and flowing from the preceding arguments, the Appellant argues that the learned trial Judge should not have dismissed his claims under the Rent Act. He faults the learned trial Judge's reliance on Section 13 of the High Court Act on the basis that the learned Judge lacked jurisdiction as stated in paragraph 5.6 above and that the reliefs granted pursuant to that claim were not justified by both the pleadings and the evidence. 6.9 Ground seven is a call upon us to set aside the order for costs on the basis of his arguments. 7.0 OUR ANALYSIS AND DECISION 7 .1 In view of the challenge to the jurisdiction of the Court below to entertain the matter as proposed in grounds three and five, we shall start from that point. 7.2 The main cause of discontent is that the learned Judge failed to give directions following the 2 nd Respondent's claims, referred to as a counter claim. It is contended that in failing to J13 give directions, the learned Judge fell afoul of Order 28 rule 8(i) of the Rules of the Supreme Court which provides as follows; 'where, in the case of a cause or matter begun by originating summons, it appears to the Court at any stage of the proceedings that the proceedings should for any reason be continued as if the cause or matter had been begun by writ, it · may order the proceedings to continue as if the cause or matter had been so begun and may, in particular, order that any affidavits shall stand as pleadings, with or without liberty to any of the parties to add thereto or to apply for particulars thereof'. 7.3 We have carefully considered the proceedings in the Court below and the ensuing Judgment. It is noted from the Judgment in particular, at page 18 (J8) of the Record of Appeal from line 20 that the learned Judge made reference to Order 28 rule 7 of the Rules of the Supreme Court 1999 edition which provides the procedure for launching a counterclaim to an action begun by originating summons. 7.4 We however, find a distinction between the said provision and the facts before the learned Judge in relation to the 2 nd Respondent's joinder. J14 7.5 In this case, there was no counterclaim to the action commenced by originating summons by the Appellant. What we have is an intervenor who is joined to proceedings as a 2 nd Defendant by consent of all parties. 7.6 In the circumstances, the applicable provision is not Order 28 rule 7(1) but Order 28 rule 8(1) as argued by the Appellant because the 2nd Respondent did not lodge a counterclaim in the context of Order 28 rule 7. 7. 7 We will therefore, focus our attention on the argument that the learned Judge failed to give direction in accordance with Order 28 rule 8 ( 1) of the Rules of the Supreme Court. 7.8 Our scrutiny of the Record in the Court below, at page 225, shows that the Judge gave what appears to be an order for directions on how he wanted to proceed after the 2 nd Respondent had been made a party and filed an affidavit in opposition to the Applicant's originating summons. 7.9 The learned Judge ordered parties to file written submissions by particular dates after which trial would be held. 7.10 We are clear in our minds that this order was sufficient for the purposes of fulfilling the requirements of Order 28 rule 8 (1) of the Rules of the Supreme Court. .. JlS 7.11 It is therefore, not correct for the Appellant to aver that the learned Judge only gave direction in the Judgment. We therefore find no merit in the grounds seeking to divest the learned Judge of jurisdiction. 7.12 The argument that fraud was not specifically pleaded is misplaced because the 1st Respondent did raise fraud in his evidence-in-chief given that he did not file an affidavit in opposition. Further to that, the 2nd Respondent was very clear in her affidavit in opposition and in her evidence in-chief-that she did not gift the 1st Respondent with any portion of her land thereby implying that the purported sale of stand 441 / a/ 12/ A by the 1st Respondent was by fraud. 7.13 We are fortified in our position by the Supreme Court of Zambia's decision in Mwansa and Another v Mpofu and Another3 • In that case the Supreme Court stated as follows; is the law simply requires "What the originating process must give distinct particulars of If a party has neither the allegation of fraud. pleaded fraud nor outlined facts that disclose fraud but has adduced evidence of fraud at trial and that evidence has not been objected to, the court is required to consider that evidence". that 7.14 Grounds 1 and 4 seek to impugn the learned Judge's finding that the Appellant was not a bonafide purchaser for value J16 without notice. The basis of this argument is that he only investigated title on the property he bought while the irregularities the learned Judge used to make the said finding were on the parent title which he did not investigate. 7 .15. The learned Judge went to great lengths in reviewing the law on notice by intending purchaser of real property and extensively quoted. SNELL'S PRINCIPLES OF EQUITY and judicial precedents after which he came to the conclusion that the Appellant had adequate notice through "many glaring anomalies" as to the fraudulent nature of the transaction. 7.16 We have equally carefully examined the documents exhibited to the Appellant's (Applicant in the court below) affidavit in opposition to the 2 nd Respondent's claims occurring from page 144 to 150 of the Record of Appeal. 7.17 Of particular interest are the printouts of the Lands Register from page 147 to 150. The first printout relates to property No F / 441 a/ 12 covering pages 14 7 to 149 of the Record of Appeal. The second printout relates to property No F/441a/12/A covering page 150 only. 7.18 We have taken into account the Appellant's argument that he only investigated title on property No F / 44a/ 12 / A which is the J17 sub-division he bought from the 1st Respondent which, according to him, had no anomalies. 7 .19 This argument flies in the Appellant's face because to start with, if he cared and applied due diligence, the Appellant would have noticed that firstly, the area of land purportedly gifted to the 1st Respondent by the 2 nd Respondent in entry No. 1 at page 150 is .9999 hectares. However, in entry 2, the Certificate .of Title No. 86615 issued in the name of the 1st Respondent shows the area as .2066 hectares. The Appellant's curiosity should have also been raised by the fact that the Certificate of Title was issued the same day the Deed of Gift was registered. 7 .20 The second factor that should have raised suspicion is that the Certificate of Title issued to the 1st Respondent occurring at page 1 77 of the Record of Appeal, gives the extent of the land as 2066 square metres as opposed to .2066 hectares portrayed in entry 2. 7.21 The third point that should have been a red flag for the Appellant as to the possibility of fraud is entry 3 which was made on 9 th September 2009. That entry shows the assignor as Mwenda Maureen Mwangala, the 2 nd Respondent. This is contrary to the Assignment occurring at page 167 of the .. •' • " J18 Record of Appeal which shows the 1st Appellant as the Assignor. 7.22 We therefore, hold that given the glaring anomalies revealed by the printout of the Register relating to the sold property and the discrepancies between the said Register and the Assignment, on the one hand and the Certificate of Title on the other, the learned Judge cannot be faulted in coming to the conclusion that the Appellant had sufficient constructive notice of fraud in the manner the transaction was carried out. 7.23 The final issue raised is that the learned Judge was at fault to cancel the Certificate of Title in the absence of proof of fraud on the part of the Appellant. 7.24 We have noted that the learned Judge did state very clearly in the Judgment that the fraudster is the 1st Respondent in the process, leading to the purported sub-division sold to the Appellant. 7.25 Having established the fraudulent process and the Appellant's negligence in investigating title, and in light of the clear anomalies, the learned Judge found that the Appellant was not a bonafide purchaser for value without notice. ., J19 7.26 We however, wish to add that because there is undisputed fraud in the process by which the 1st Respondent obtained title to sub-division F / 144a/ 12/ A, he himself did not acquire good title to it. Consequently he could not pass any good title to the Appellant. 8.0 CONCLUSION 8.1 On the basis of what we have stated and our expressed views, we have no cause to interfere with the Judgment of the Court below. 8.2 We accordingly find no merit in all the grounds of appeal advanced and we dismiss the appeal with costs to be taxed in default of agreement. F. M. Chishimba COURT OF APPEAL JUDGE ... ~- .. '". f: ........ q ....... . D. L. Y,. iching , ,SC M. J. Siavwapa COURT APPEA JUDGE COURT OF APPEAL JUDGE