Lusaka City Council & Another v Mwamba and 4 Others (S.C.Z. Judgment 21 of 1999) [1999] ZMSC 29 (17 June 1999)

LUSAKA CITY COUNCIL, NATIONAL AIRPORTS CORPORATION v GRACE MWAMBA AND 4 OTHERS SUPREME COURT SAKALA, D. C. J., CHAILA, LEWANIKA, JJ. S. 12TH NOVEMBER, 1998 AND 18TH JUNE, 1999 (S. C. Z JUDGMENT NO. 21 OF 1999) Flynote Contract - Letters of Offer - Whether they constitute valid contract Evidence - Judicial Notice - Government policy to sell council houses Headnote The respondents were the employees of the 2nd appellant. They were accommodated with other employees in the houses rented by the 2nd Appellant from the 1st Appellant, through the Ministry of Local Government and Housing. The government through the Ministry issued two circulars and instructions to the Council which included the 1st appellant on the sale to the sitting tenants of the houses and flats or units. The two circulars imposed restrictions and conditions of the houses and units. The council offered letters of sale to the respondents. These letters were later drawn when the 2nd appellant drew the council's attention to the provisions of the circulars in question. The respondents challenged the withdrawal and sought the intervention of the High Court through judicial review. The High Court held that the letters of offer had been accepted by the respondents resulting in validly-made contracts by which the 1st appellant was bound. Held: (i) The offers to the respondents had been made in error and 1st appellant was entitled to withdraw them and correct the situation. For the 1st Appellant: For the 2nd Appellant: Respondents: Mr. F. M. Lengesela, Director Legal Services, Lusaka City Council. Mr. S. Simuchoba of Cave Malik & Company, Lusaka. Mrs D. for the Ng’ambi of Nyankhata Chambers, Lusaka. _________________________________________ Judgment CHAILA, J. S.: delivered the judgment of the court. This is an appeal by the appellants against the decision of the High Court declaring that the letters of offers sent to the respondents constituted valid contract and had to be executed. Briefly, the facts of this case were that the respondents were the employees of the 2 Appellant. They were accommodated together with other employees in the houses rented by nd st the 2 Appellant from the 1 Appellant, through the Ministry of Local Government and nd Housing issued a circular and instructions to the Council which included the 1 the sale to the sitting tenants of the houses and flats or units. The first circular was dated 2 May, 1996. Another one called corrigenda circular was issued on 7 May, 1996. These circulars imposed restrictions and conditions on the sale of the houses and units. The council offered letters of sale of the houses and units. The Council offered letters of sale to the respondents. These letters were later withdrawn when the 2 Appellant drew the council’s attention to the provisions of the circulars in questions. The respondents challenged the withdrawal and sought the intervention of the High Court through judicial review. The High Court ruled that since the letters of offers had been accepted by the respondents, contracts had been validly made and the 1 Appellant was bound to respect the contracts. st th nd st Appellant, on nd The appeal was argued without written heads of argument. The appellants relied on the following grounds: 1. 2. The Judge’s order is against Government Circular No. 2 of 1996 regarding the sale of council houses. The Judge failed, ignored and neglected to take into account exhibit “SP 6” which nullified the contents of exhibit “SP 5”. Appellant Mr. L`engesela decided not to address us because of what Counsel for the 1 transpired to their application to stay the judgment of the High Court. He told the court that he would let the 2 Appellant argue the appeal and would advise his clients to effect the st nd judgment of this court. Counsel for the 2 Appellant Mr. Simuchoba submitted very strongly that the letters of offers were issued in error since they contravened the government circular No. 2 of 1996. He drew our attention to pages 54 and 55 of the record. He further drew our nd attention to paragraph (n)(iv) of the Corrigenda circular No 2. Dated 7 paragraph reads as follows: th May, 1996. The “Units which are occupied by several families shall not be subject to sale until the council is able to offer another house to one of the families.” This, according to Mr. Simuchoba, should be read together with paragraph (e)(I) of the same circular. The paragraph reads as follows: “Houses on block allocation to institutions such as Government/Private firms, Parastatals etc, shall be offered to actual individual occupiers to purchase within the prescribed 18 months. Provided that such occupiers shall be expected to declare their intentions to purchase the houses within 30 days from the date of offer.” Mr. Simuchoba argued that the letters of offers were issued between July and September, 1996, long after his circular had been issued. He submitted further that the Director of Housing th nd by letters dated 15 October, 1997, withdrew the offers and pointed out that the offers were issued in error. Mr. Simuchoba further argued that the council could not offer alternative Appellant’s employees because of the shortage of houses. Mr. Simuchoba houses to the 2 maintained that there were no contracts of sales because they were offered by mistake. The council had no capacity to offer the houses because the enabling directive from the government was contravened by the council. In the alternative Mr. Simuchoba argued that the offers should remain suspended until the council is able to offer the alternatives. He argued further that in this exercise there was an element of equity. The spirit of this particular sale of houses was to empower Zambians to own houses. He vigorously argued that the interest of justice could be best served with by following the circular which directed the council not to sell until they are in a position to offer alternative houses to the families sharing the houses or alternatively, the families sharing the houses be allowed to buy jointly. Counsel for the 1 st Appellant supported what Mr. Simuchoba had said. On behalf of the respondents, Mrs. Ng’ambi submitted that the learned trial Judge was on a firm ground when he held that there was a contract of sale between the appellants and the respondents. She argued that the houses were not occupied jointly and that the sitting tenants were those mentioned in the tenant cards and that the offers were based on the cards. In answer to this point on cards, Mr. Simuchoba drew our attention to the affidavit on record, particularly on pages 60 and 64 where it was established that the houses were given by the council and then the Corporation gave them to the workers. It is common cause and this court takes a judicial notice that the government pronounced a policy of empowering sitting tenants by directing various agents of the government to sell at reasonable prices the houses occupied by sitting tenants. The 1 Appellant is one of the government agents. The government through the Ministry of Local Government and Housing issued instructions and directed how the exercise should be carried out. There is no doubt st from the evidence on record that the houses which were offered for sale to the respondents by Appellant gave the the 1 houses to their workers who included the respondents. Further, there is no doubt that the Appellant were being rented by the 2 Appellant and the 2 nd nd st units being rented by the 2 Appellant were being shared by other families. Since the houses were being shared, clause (n)(iv) is most relevant. We have already been referred to this clause. The clause is very clear and it says that the units occupied by several families shall not be sold until the council is able to offer another house to one of the families. In the present nd case, the units or houses being rented by the 2 The circular imposing restrictions and conditions was issued in May,1996. Appellant were occupied by several families. nd The offers to the respondents were issued later, according to the evidence on record. These were no doubt issued in error. They should not have been issued until the other families had been found alternative units. The evidence on record shows that the council had not offered the other families alternative units. The 2 Appellant to this mistake and the Director realised that the offers had been issued wrongly. The Director was on a right footing in taking that decision. The offers had been made contrary to the directives. Appellant drew the attention of the 1 nd st In his short judgment, the learned trial Judge ruled that the withdrawal of the offers already accepted Mounted to a breach of contract and that the good intention of the government to empower the citizens of this country should not be frustrated and any attempt to do so is null and void. The learned trial Judge failed to take into account that the circular safeguarded also the interests of other families that were sharing the units with the respondents. The other families are also entitled to enjoy the government policy of empowering the citizens. We agree with the submissions of counsel for the Appellants that the offers to the Respondents had been made in error and that the 1 Appellant was entitled to withdraw and correct the situation. The appeal is allowed. The order of the learned trial Judge is set aside. The sales are hereby cancelled and if there were any payments made to the council, these should be refunded to the respondents. st For avoidance of any doubt if certificates of title or title deeds have been issued, we direct the appropriate authorities to cancel them. As regards costs, we feel this is a case where each party should bear his own costs and we so order. _________________________________________