Judgment Delivered on 25th April 2019
Court: In the Court of
Appeal of Zambia, Holden at Lusaka (Civil Jurisdiction)
Panel: Chashi,
Sichinga and Lengalenga, JJA
Judgment of the
Court by: Chashi, JA
Subject Matter: Customary Land in Zambia - Bona Fide Purchaser for Value Without Notice in Zambia- Conversion of Customary Land to Leasehold Tenure in Zambia
Facts:
This case revolves around a 5.88-hectare piece of
land, originally traditional land, owned by Lazarous Phiri since 1956. Upon his
death in 1976, it devolved to his five children (the Respondents), who in 2004
executed a Consent Settlement Order, equally sharing the land in 1.2-hectare
portions. In 2006, the Appellant, Dr. George Banda, bought some traditional
land from the 1st Respondent for K31,500.00. He then applied to convert it to
leasehold tenure and obtained a certificate of title on 12th September 2014.
The Appellant subsequently fenced off the entire land.
On 2nd September 2014, the 2nd, 3rd, 4th, and 5th
Respondents filed a complaint in the Lands Tribunal, claiming they were not
consulted about the sale and did not consent to it. They sought reliefs
including the allocation of the 1st Respondent's portion to the Appellant, each
Respondent taking possession of their 1.2 hectares, removal of the fence, and a
declaration that they were the bona fide beneficiaries of the land. The 1st
Respondent maintained he only sold his 1.2-hectare portion. The Appellant claimed
he bought the entire land, having been shown the boundaries by the 1st
Respondent and his wife, and that no one had made a claim until 2014 when the
1st Respondent's sister demanded an additional K70,000.00.
The Tribunal, adjudicating on affidavit evidence,
found that the demand for additional payment should have alerted the Appellant
to other interests. It also found no evidence of consent from the Chief or
local authority. Considering Section 7 and Section 3(4) of The Lands Act, the
Tribunal concluded the Respondents had a legal right. It further found that the
requirements for conversion were not met due to the lack of consent from all
affected parties, relying on Siwale and Others v Siwale and Still Water Farms
Limited v Mpongwe District and Others. The Tribunal granted the reliefs sought
by the Respondents.
The Appellant appealed to the High Court, arguing
that he was a bona fide purchaser for value without notice, that he was the
holder of the customary land since 2006, and that the Tribunal erred in not
admitting recordings of the Respondents allegedly scheming to reverse the sale.
The High Court upheld the Tribunal's decision, stating that the defence of bona
fide purchaser for value without notice was not applicable as the Respondents
had a legal right, not equitable interests. The High Court also held that the
Appellant, being Zambian, should have had constructive notice of communal
interests in customary land and should have made reasonable inquiries beyond
the 1st Respondent. It further agreed that the Appellant should not have
ignored the additional payment claims. Regarding the recordings, the High Court
found that admitting them would be prejudicial to the Respondents as the
dispute was agreed to be determined solely on affidavit evidence.
Issues:
· Whether the
Appellant was a bona fide purchaser for value without notice of the land, given
the presumption of constructive notice of the Respondents' interests.
· Whether the
Appellant was the holder of the customary land since 2006, requiring the express
consent of the 2nd, 3rd, 4th, and 5th Respondents.
· Whether the
Tribunal and the High Court erred in refusing to admit recordings as evidence,
which the Appellant claimed proved a scheme to unlawfully reverse the
transaction.
Holding:
On the first and
second grounds (Bona Fide Purchaser and Consent): The Court of Appeal
agreed with the High Court that the
defence of bona fide purchaser for value without notice is confined to prior
interests or rights in equity and was not applicable in this case, as the
Respondents had a legal right, not equitable interests.
The Court affirmed that the Appellant, being Zambian
and dealing with customary land, should have had constructive notice that such
land is ordinarily subject to interests and rights from more than one person,
typically close family members.
The Court emphasized that a purchaser is obligated
to undertake a full investigation of title and is deemed to have constructive notice
of matters discoverable through diligent inquiries.
The Court found that the Appellant was aware the
land was customary land and should have known the implications. His failure to
heed the additional payment claims by the 1st Respondent's sister before
obtaining the certificate of title amounted to an attempt to deprive the
Respondents of their unregistered interest through registration, which the
Court considered fraud.
The Court reiterated that customary land in Zambia
cannot be bought or sold; it can only be alienated. Only land under leasehold
tenure can be bought or sold. Therefore, the defence of bona fide purchaser for
value without notice was not available to the Appellant as the land was
customary at the time of the transaction, and the essentials for such a defence
were not met.
On the third
ground (Admissibility of Recordings): The Court upheld
the Tribunal's refusal to admit the recordings. It noted that the parties had
agreed to determine the matter solely on affidavit evidence.
Introducing electronic evidence via a further
affidavit would have been against the spirit of the agreement and prejudicial
to the Respondents, as they would not have had the opportunity to interrogate
and test the authenticity of the recordings or lay the foundation of the
evidence in accordance with The Evidence Act.
The Court of Appeal dismissed the appeal, finding no
merit in any of the three grounds.
Full Case: Here