IN THE SUPREME COURT OF ZAMBIA= APPEAL No. 37/2015 HOLDEN AT NDOLA $CZ/8/002/2015 (Civil Jurisdiction) BETWEEN: JOYCE NDAVUKA GONDWE AND CHRISTINE ZIWOLILE NGWIRA RESPONDENT CORAM: Mwanamwambwa D.C.J., Hamaundu and Kajimanga, JJS On St September, 2017 and 13% September, 2017 For the Appellant: Mr. J Nyirongo of Messrs Nyirongo & Co. For the Respondent: Mr. B.K Kasote of Messrs Chifumu Banda & Associates. JUDGMENT Mwanamwambwa, DCJ., Delivered the Judgment of the Court. Cases Referred to: 1. Abewe Company Limited __v__Hadow____Mupele Moonga ‘SCZ/8/230/2004 2, Anti-Corruption Commission v Barnnet Development Corporation Ltd (2008) Z.R. 69 3, Attorney General v Marcus Achiume (1983) Z.R.1 (S.C.)4. Eleftheriadis v Attorney-General (1975) Z.R. 69 (S.C.) 5. Gibson Tembo v Alizwani S.C.Z. Judgment No. 6 of 1996 (Unreported) 6. Hunt v Luck [1902] 1 Ch. D.P p 428 7. Mwenya and Randee v Kapinga (1998) Z.R. 17 8. Nora Mwaanga Kayoba & Alizani Banda v Eunice Kumwenda Ngulube & Andrew Ngulube (2003) Z.R. 132 4. Eleftheriadis v Attorney-General (1975) Z.R. 69 (S.C.) 5. Gibson Tembo v Alizwani S.C.Z. Judgment No. 6 of 1996 (Unreported) 6. Hunt v Luck [1902] 1 Ch. D.P p 428 7. Mwenya and Randee v Kapinga (1998) Z.R. 17 8. Nora Mwaanga Kayoba & Alizani Banda v Eunice Kumwenda Ngulube & Andrew Ngutube (2003) Z.R. 132 9. Sithole v State Lottery Board (1975) Z.R. 106 10. Mazoka and Others v Mwanawasa and Others (2005) Z.R. 138 Legislation referred to: 1. The Lands and Deeds Registry Act. Cap. 185 of the Laws of Zambia, section 34 (1), (c) Other Works Referred to: 1. Halsbury’s Laws of England 4‘ Edition. Volume 16, Paragraph 1219. JThis appeal is against a High Court judgment, which found that the Respondent was a bona fide purchaser for value, and entitled to possession, of House No. 2 Bupingulo Avenue, Ndola (‘the House”) The following is the background to this matter. The House was owned by Lima Bank. In 1998, Lima Bank (in Liquidation) offered the house to one Margaret Lubasi, the sitting tenant, according to government policy on sale of houses belonging to former parastatals. Ms. Lubasi had worked for Lima Bank for 23 years before she retired. The house was offered to her at the purchase price of K35 million (unrebased). She suggested that the price be deducted from her terminal benefits, which were still owed to her by the Bank. The Bank refused and purportedly withdrew the offer on the ground that Ms. Lubasi had failed to pay the purchase price within the stipulated time. In March 2001, the Appellant was invited by Joseph Chilunda, one of the liquidators of Lima Bank, to make an offer for the purchase of the house. The Appellant viewed the house and foundthat it was occupied by a young man. Without enquiring from him what interest he had in the house, she proceeded to buy it at the price of K40 million (unrebased). On 6% September 2001, the Liquidation Manager wrote a letter to Ms. Lubasi, informing her that the house had been purchased by “a successful bidder’; that is to say the Appellant. The letter was copied to the Appellant. By then, Ms. Lubasi had sold the house to the Respondent using her 1998 offer letter from Lima Bank. After its purported withdrawal of the offer to Ms. Lubasi, Lima Bank sued her in the High Court, in cause number 2001/HP/1020, for vacant possession. The High Court delivered judgment in favour of Ms. Lubasi on 27 August 2003, ordering that the sale to her be completed. Meanwhile, Ms. Lubasi had paid into court the full purchase price, receipt of which Lima Bank had acknowledged. ‘That judgment was not appealed against, but two days after it was delivered, the Appellant obtained a Certificate of Title to the house. The Appellant commenced this action against Lima Bank (in Liquidation) in 2006 seeking, inter alia, an order restraining the 44Bank from interfering with her quiet possession of the house. Later, the Respondent was joined to the action as an Interested Party. She filed a defence and counterclaim, seeking an order that the purported sale of the house to the Appellant was illegal, wrongful, and null and void. That the Appellant’s Certificate of Title to the house be cancelled because it was obtained fraudulently. Further, that Ms. Lubasi was entitled to buy the house and also to sell it to the Respondent. In reply to the counterclaim, the Appellant denied having bought the house dubiously or obtained title to it fraudulently. After hearing the matter, the learned trial Judge found that the Appellant was ineligible to buy the house as she was not an employee of Lima Bank or a sitting tenant. That the house was illegally offered to her by the liquidators of Lima Bank, who needed a favour from her as a ZESCO employee. They wanted her to arrange for reconnection of power to a house which they had sold to a NAPSA employee. The learned trial Judge went on to state the following: 35“Applying the cases of Anti-Corruption Commission v Barnnet Development Corporation Ltd 2) and Gibson Tembo v Alizwani “), I am of the view that the Interested Party has proved with very strong evidence that... the liquidators themselves acted fraudulently in that they sold the house to the Plaintiff (now the Appellant) without formally withdrawing the offer made to the sitting tenant. Furthermore, the sale was done dubiously in that there was no advert just because they wanted the Plaintiff to do them a favour. Fraud is also evident in the documents they filed with ZRA, which had a lot of inconsistencies and anomalies. I further find that it was improper for the Plaintiff to obtain a Certificate of Title on the basis of those documents. It is also highly suspicious that the Certificate of Title was issued only about three days from the date of the Assignment and two days after the judgment of Judge GS. Phiri because normally, the process is quite slow and takes longer than that. I am satisfied that the Plaintiff was involved in all this.”It was further found by the Court below that at the time the Respondent bought the house from Ms. Lubasi, she was not aware of the Appellant's claims in relation to the house. That this is because the Appellant was not in occupation of the house and had not put a caveat on the property. Therefore, the Respondent was a bona fide purchaser for value without notice and was entitled to possession of the house. Dissatisfied with the judgment of the Court below, the Appellant appealed to this Court. The following are the grounds of appeal: 1. That the trial Court erred in law and in fact when it found that the Appellant was offered to purchase Farm 748 Ndola by the liquidators because the said liquidators needed a favour from the Appellant over issues relating to ZESCO Limited, where the Appellant was working when no such evidence exists on record. 2. That the trial Court erred in law when it found that the entire sale process of Farm No. 748, aNdola by the bank was done dubiously and that fraud was evident. 3. The trial Court erred at law when it found that the Respondent was a bona fide purchaser for value when in fact not. Both parties filed heads of arguments, which Counsel augmented orally. The Appellant’s submissions in relation to grounds one and two were combined. Counsel for the Appellant submitted that in civil cases, allegations of fraud must be proved beyond reasonable doubt. That in this case, the Court below should have looked for specific evidence defining the favour which the liquidators allegedly sought, and in consideration of which they offered the house to the Appellant. Counsel submitted that even assuming that the sale was fraudulent, there was no evidential basis for the finding that the Appellant “was involved in all this’. That neither the judgment appealed against nor the record discloses any fraudulent acts of the Appellant. The trial Court imputed fraud to her merely because “the liquidators of the bank needed a favour from her over issues 8relating to Zesco Limited where she was working.” We were invited to take judicial notice that the Appellant was not a ZRA official or a Lands and Deeds Registry officer; she did not process her own title. Counsel referred us to Abewe Company Limited v Hadow Mupele Moonga (1), In that case, we cited Gibson Tembo v Alizwani™), in which we stated that: “If a wholly innocent purchaser acquires a Certificate of Title, his right to the property is not affected by any fraudulent conduct of the vendor unless such conduct had resulted in a third party’s acquiring rights of which the purchaser has notice”. It was submitted that the finding of fraud on the part of the Appellant was “made in the absence of any relevant evidence or upon a misapprehension of the facts”. In support of this submission, Counsel cited the case of Attorney General v Marcus Achiume "). He prayed that we set aside the entire judgment of the lower Court and order a retrial. We were also invited to direct that all relevant officers from the Lands and Deeds Registry and ZRA be summoned to testify on the alleged fraud.On ground three, Counsel for the Appellant referred us to two passages in the judgment appealed against. Firstly, at page 44 of the Record, the judgment states the following: “In this case, at the time that the Interested Party (now Respondent) bought the property, she was unaware of the Plaintiff's claim relating to the same because the Plaintiff was not in occupation of the house and had not put a caveat on it. The Interested Party is, therefore, a bona fide purchaser for value and entitled to possession of the house.” The second passage is at page 35 of the Record of Appeal. In that passage, the learned trial Judge made the following finding of fact in respect of the Appellant: “It is clear that the Defendant herein (Lima Bank) only informed the Plaintiff of Cause Number 2001/HP/1020 after she had paid for the house but before judgment. She was informed that the house was occupied by a tenant on 6th September 2001.” 510According to Counsel for the Appellant, the two quotes above from the judgment of the Court below show that the Appellant and the Respondent were unaware of each other’s interest in the house. That since the Appellant became aware of Cause No. 2001/HP/1020 and the presence of a tenant after she had paid for the house in full, she was a bona fide purchaser at market overt. Counsel submitted that the Respondent, on the other hand, was not a bona fide purchaser for value. That according to DW1, the Respondent learnt early that the liquidators had refused to accept Ms. Lubasi’s payment of K35 million. This shows that the Respondent knew at a very early stage that the house was encumbered. The Appellant also took issue with the learned trial Judge’s finding that “the Plaintiff was negligent for not finding out from the young boy or man whom she found in the house whether he was a sitting tenant and what interest he had in the house.” That this shows that the trial Court seems to have glossed over all the flaws in the way the Respondent paid for the house but opted to ‘highlight mathe rather trivial issue concerning the caretaker young man at the unoccupied premises” when the Appellant purchased the house. According to Counsel, this is a clear unbalanced evaluation of evidence. He referred us to the Marcus Achiume Case, where this Court said that findings of fact can be reversed on the ground of ‘an unbalanced evaluation of the evidence, where only the flaws of one side but not of the other are considered...” In response, on ground one, the Respondent defended the trial Court’s finding that the Appellant was offered the house by the liquidators of Lima Bank because they needed a favour from her. Counsel for the Respondent pointed us to the testimony of the Appellant at page 407 of the Record of Appeal. The following is what she had to say: “Twas based at Ndola business office ZESCO as Divisional Credit Manager in 2001. My job then was to collect revenue for ZESCO, so I was in charge of connections and reconnections. In the course of my duties, I was approached by a Mr. Chilunda from Grant Thornton and a certain gentleman from NAPSA who had bought a house nzfrom Lima Bank. They wanted me to arrange for the reconnection of power to the house that he bought. I then explained to them that there was a bill on that house which had to be paid. I asked Lima Bank to make an undertaking that they were going to pay it. I then asked Mr. Chilunda to go and ask Grant Thornton to write an undertaking before a reconnection would be done. Then Mr. Chilunda asked me if I was interested in buying a house as they had 3 houses for sale. Mr. Chilunda was representing Lima Bank...” Counsel for the Respondent submitted that the Appellant’s own testimony quoted above supports the trial Court’s finding that she was offered to purchase the house for a favour. That the request by Lima Bank’s liquidators for reconnection of power was directly tied to their invitation to the Appellant to purchase a house More so that she was not a sitting tenant, and was invited to make an offer in the course of her employment. According to Counsel, since the house was earlier offered to Ms. Lubasi for K35 million, it was odd that the liquidators of Lima J3.Bank advised the Appellant to raise her offer from K30 million to K37 million. Strangely still, the Appellant offered K40 million, at which price she bought the house. That thereafter, in a letter copied to the Appellant, Lima Bank informed Ms. Lubasi that a successful “bidder” had bought the house, yet the Appellant did not buy it through a bid. According to the Respondent, the above set of facts shows that there was more to the Appellant’s offer than meets the eye. Counsel argued that it was on the totality of the foregoing facts and evidence that the Court below drew the only logical inference that Lima Bank’s liquidators invited the Appellant to buy the house for a favour. The case of Eleftheriadis v Attorney-General 4) was cited in aid of the submission that the Court may draw inferences from given facts, if it is only such inferences that can be made. That the finding being challenged was not perverse or made in the absence of evidence or upon a misapprehension of facts, to warrant being reversed by this Court. In response on ground two, Counsel for the Respondent agreed that fraud must be specifically pleaded and its particulars ualaid out. That the party alleging fraud must, at trial, lead evidence on those particulars to prove the allegation to a standard much higher than a mere balance of probabilities. It was submitted that in the Court below, the Respondent did plead fraud on the part of the Appellant, and led evidence to that effect. We were referred to paragraph 13 of the counterclaim, where the Respondent stated the following: “The Interested Party will tell the Court during trial of this matter that Ms. Margaret Ngoma Lubasi, who was the recognized sitting tenant of the property in dispute, was the only one entitled to buy the property and was equally entitled to sell it to her. The Plaintiff therefore obtained title fraudulently.” In defence of the trial Court's finding that the sale of the house to the Appellant was dubious and fraudulent, the Respondent cited several facts on record. The following are some of the facts that were highlighted: Firstly, that on 6 September, 2001, Lima Bank wrote to Ms. Lubasi, informing her that the house had been purchased by “a 415successful bidder’. It was Counsel’s submission that by that letter, the Bank intended to make Ms. Lubasi believe that the house had been sold by way of a “bid”. That the letter was copied to the Appellant who, despite knowing that she did not “bid” for the house, went ahead to register the Assignment. Secondly, despite knowing that there was a sitting tenant, the Appellant proceeded to complete the transaction. Thirdly, Counsel based his defence of the trial Court’s finding of fraud in the sale of the house to the Appellant on the events following the judgment in Cause No. 2001/HP/1020. That “the Assignment was registered on 29% August, 2003, just two days after Judgment.” In addition, Counsel drew our attention to DW1’s testimony at trial. According to DW1, the date on the tax clearance certificate showed that the certificate was written before the vendor made the declaration of the price of the house. That this pointed to fraud in the sale of the house to the Appellant. Further, the Assignment showed that property transfer tax was paid on 10% January 2002, 116yet the contract of sale was dated 23" January 2002. DW1 testified that there was no way consent to assign could precede tax clearance, and tax could not have been paid before the contract was drawn. Also pointed out was the evidence of DW2. Between April, 2003 and mid-2006, DW2 was an employee of ZRA in charge of property transfer tax issues in Zambia. According to him, the date of declaration by the vendor suggests that it was made “a year after the document was processed’. This was materially anomalous. He also testified that although the tax clearance certificate bore his name, it was not from his office as it did not bear his signature. This rendered it invalid. Counsel for the Respondent contended that it was fraudulent of the Appellant herself to register an assignment using an invalid tax clearance certificate. In responding to ground three, Counsel submitted that the trial Court was on firm ground when it held that the Respondent was a bona fide purchaser. He cited the case of Mwenya and 47Randee v Kapinga", in which we upheld the principle in Hunt v Luck, that: “...the occupation of land by a tenant affects a purchaser of land with constructive notice of all that tenant’s rights including an agreement for sale to him by the vendor... A tenant's occupation is notice of all the tenant's rights. It means that if a purchaser has notice that the vendor is not in possession of the property, he must make inquiries of the person in possession and find out from him what his rights are and, if he does not choose to do that, then whatever title he acquires as purchaser will be subject to the title or rights of the tenant in possession.” Counsel referred us to the evidence of DW1 that at the date of the contract of sale between Ms. Lubasi and the Respondent, the Respondent was not aware of any adverse interest in the house. ‘That there is no evidence on record to the contrary. Thus, the Court below correctly found that the Respondent was a bona fide purchaser. JasWe have keenly considered the evidence on record and the submissions by both parties. We have also perused the learned trial Judge’s judgment, the documents and the authorities cited. ‘The issues for determination, in our view, are the following: Firstly, whether the Lima Bank liquidators’ invitation to the Appellant to purchase the house was underpinned by a desire to receive a favour from the Appellant; secondly, whether the sale of the house to the Appellant was dubious and fraudulent; and thirdly, whether the Respondent was a bona fide purchaser of the house. On ground one, the Appellant’s contention is that there is no evidence on record that the liquidators of Lima Bank offered the Appellant to purchase the house because they needed a favour from her over issues relating to ZESCO. ‘The record shows that the Appellant, in her testimony, said the liquidators of Lima Bank approached her because they wanted her to arrange for reconnection of power to a house which they had sold. Mr. Chilunda approached her, as she put it, “in the course of my duties’, When she mentioned the precondition of an J19undertaking to pay the outstanding electricity bill, again to use her words, “Then Mr. Chilunda asked me if I was interested in buying a house as they had 3 houses for sale.” We agree with Counsel for the Respondent that the invitation to the Appellant to purchase a house was directly tied to the liquidators’ efforts to have the Appellant help them secure a reconnection of power to the NAPSA employee’s house. Further, the Appellant offered to buy the house at K30 million (unrebased), which was less than the K35 million offer purportedly withdrawn from the sitting tenant. Like the Court below, we find it dubious that the liquidators of Lima Bank then advised the Appellant to raise her offer to K37,000.00; even so, she opted to buy the house at K40,000.00. Given the foregoing, we refuse to disturb the trial Court’s finding that the liquidators availed the house to the Appellant because they wanted her to arrange for reconnection of power to another house. In our view, ground one lacks merit, and it fails. 320We now turn to ground two. First, we must comment on the submission by Counsel for the Appellant that in civil cases, fraud must be proved beyond reasonable doubt. We disagree. Suffice to mention that no authority was cited in support of that assertion. Instead, we agree with the Respondent’s submission that in civil cases fraud must be proved to a standard higher than a mere balance of probabilities: See SITHOLE V STATE LOTTERIES BOARD °°). According to Halsbury’s Laws of England, 4 Edition, Volume 16, paragraph 1219, fraud “usually takes the form of a statement that is false or suppression of what is true.” We agree with Counsel for the Respondent that the trial Court’s finding of fraud on the part of the Bank is supported by the fact that the Bank falsely claimed to have sold the house to a successful “bidder’. That by its letter of 6t September, 2001, the Bank intended to make Ms. Lubasi believe that the house had been sold to someone else on the basis of bids.Additionally, DW1 and DW2 gave evidence of anomalies in the way the vendor obtained tax clearance and consent to assign. That evidence, too, pointed to fraud on the part of the liquidators of Lima Bank. On the evidence on record, we are of the view that the Lima Bank’s sale of the House to the Appellant was tainted with fraud. Additionally, we find it odd that the Lima Bank later accepted payment for the same House, from Ms. Lubasi. At this stage, the question we must resolve is whether the Appellant was involved in the fraud. This is important because, as we stated in Gibson Tembo v Alizwani “', cited by Mr. Nyirongo, “only the fraud of the purchaser, and not that of the vendor, can vitiate a Certificate of Title.” Lima Bank’s letter of 6 September 2001, was copied to the Appellant. Therefore, she was aware of the false impression intended to be created by the Bank that the house had been sold to her as “a successful bidder’. Instead of distancing herself from this falsehood, the Appellant chose to exploit it to her benefit by 322,proceeding with the transaction, not to mention her registration of the Assignment. In addition, the Appellant testified on oath that when the liquidators of Lima Bank asked her to raise her offer, they did not say what amount they expected. On the contrary, the letter at page 176 of the Record of Appeal shows, in bold, that the Appellant was advised to raise her offer “from K30,000,000.00 to K37,000,000.00". For the Appellant to have lied on oath, she clearly had something to hide about the Lima Bank’s fraudulent sale of the house to her. Further, the Appellant registered the assignment on a false Tax clearance certificate. The certificate of Property Transfer Tax was dated 10! January 2002. That was 13 days before 23 January 2002, when she signed the contract of sale of the House to her. The Certificate of Property Transfer Tax was fraudulent, at the instance of the vendor, the Lima Bank. We are of the view that by using it to register the assignment, the Appellant adopted the fraud. 323She became part, and beneficiary, of the fraud. She was equally guilty of it. Accordingly, it affected her Certificate of Title. We note that fraud was generally and casually pleaded by the Respondent in paragraph 13 of her Counterclaim. No particulars were given, as required by the rules of pleadings. However, at trial she adduced evidence of fraud, which touched both the vendor and her, as the purchaser. Here we are referring to the false Certificate of payment of Property Transfer Tax That evidence was not objected to by the Appellant. On the authority of Mazoka v Mwanawasa \), the trial court was entitled to act on it. Accordingly, we uphold the learned trial Judge’s finding that the Appellant obtained her Certificate of Title by fraud. In effect, we find no merit in ground two. It is hereby dismissed. Next, we move to ground three. There are two issues in this ground. One is whether, as submitted by Counsel for the Appellant, the trial Court should have found that the Appellant was a purchaser of the House, for value, without notice. The other is 2awhether the trial Court was right in finding that the Respondent was a bona fide purchaser for value, without notice. It is not in dispute that when the Appellant went to view the House, she found it occupied by a young man. It is also not in dispute that she did not enquire from him what interest he had in it. Given the principle in Hunt v Luck “, which we upheld in Mwenya and Randee v Kapinga ", the Appellant cannot be said to have been a bona fide purchaser for value without notice. We wish to restate our holding in Nora Mwaanga Kayoba & Alizani Banda v Eunice Kumwenda Ngulube & Andrew Ngulube ), that: “In purchasing real properties parties are expected to approach such transaction with much more serious inquiries to establish whether or not the property in question has encumbrances. Buying real property is not as casual as buying household goods or other personal property.” We are surprised that Counsel for the Appellant describes as a “rather trivial issue’, the occupation of the House by a young man at the time the Appellant viewed it. Mwenya and Randee v Kapinga 25( is settled law on constructive notice in sale of land transactions. Certainly, the Court below cannot be faulted for not finding that the Appellant was a bona fide purchaser for value without notice. On the second issue, the trial Court found as a fact that at the date of the contract of sale between Ms. Lubasi and the Respondent, the Appellant was not in occupation of the House and had not put a caveat on it. The Appellant has not challenged that finding or the evidence on record to that effect. If anything, the Appellant’s submission that “both Appellant and Respondent were unaware of each other’s interest in the subject house’, acknowledges the fact that the Respondent had no notice of adverse claim to the House. Also unopposed is the evidence that the Respondent bought the house from a sitting tenant, who showed the Respondent a letter of offer from Lima Bank. We agree with the learned trial Judge that at the time the Respondent bought the House from Ms. Lubasi, she was unaware of the Appellant’s claims in relation to the House. There was no way she could not have known about any 126such claim. We uphold the trial Court’s finding that the Respondent was a bona fide purchaser for value without notice. This brings in section 34(1) (c) of the Lands and Deed Act, it provides as follows: “S. 34. (1) No action for possession, or other action for the recovery of any land, shall lie or be sustained against the Registered Proprietor holding a Certificate of Title for the estate or interest in respect to which he is registered, except in any of the following cases, that is to say: (a). (c)the case of a person deprived of any land by fraud, as against the person registered as proprietor of such land through fraud, or against a person deriving otherwise than as a transferee bona fide for value from or through a person so registered through fraud” The combined effect of fraud, as set out above, and the fact that the Appellant was not a bona fide purchaser for value, without notice, is that the Appellant’s Certificate of Title was liable to be set aside, or cancelled, under section 34 (1), (c) of The Act.Accordingly, we uphold the learned trial Judge’s decision in ordering its cancellation. Therefore, ground 3 fails too. It is hereby dismissed. All the three grounds having been unsuccessful, we refuse to grant an order for a retrial. The appeal is hereby dismissed. We award costs to the Respondent, to be taxed in default of agreement. A DEPUTY CHIEF JUSTICE E.M Her. : CL KASIMANGA SUPREME COURT JUDGE SUPREME COURT JUDGE Re