INTRODUCTION
With the aid of relevant authorities, this essay will discuss the rights of the parties in the matter
above and explain the likely outcome in this matter should the parties decide to take the matter to
court. The essay will involve discussion of legal and equitable rights or interests and then analysis
of legal issues that may arise. The following are the legal issues that arise from the given set of
facts:
1. Whether Bouche is a bona fide purchaser for value without notice.
2. Whether the receipt Lucie obtained from Zambie State Holdings Ltd (the company),
constituted a note or memorandum to satisfy Section 4 of the Statute of Frauds Act
1677 and thus whether the oral agreement between Lucie and the company is valid.
3. Whether or not a remedy can be granted to either Lucie or Bouche should the matter
be taken to court.
Legal rights are rights in rem or in the thing itself and bind all the world.1 This was enunciated by
the learned authors in Megarry’s Manual of the Law of Real Property stating that “a legal interest
in land is a right in the land itself, so that whoever acquires the land is bound by that right, whether
he knew of it or not.”2 A legal right is created or transferred when a person obtains full legal
ownership of property. According to Section 33 of the Lands and Deeds Registry Act, a Certificate
of Title is conclusive evidence of ownership of land by the holder of a certificate of title. Therefore,
until a sale of land is completed by deed the sale is generally ineffective to convey or create a legal
right. It was espoused in the case of Pilcher v Rawlins3 that a purchaser for valuable consideration
without notice obtained upon the occasion of his purchase and by means of his purchase deed,
some legal estate, some legal right and some legal advantage. As a general rule, legal rights are
superior to equitable rights. From the facts Zambie State Holdings Ltd is the legal owner of the
residential house. Thus, it has an overriding legal interest which is good against the whole world.
Equitable rights are rights in personam meaning they are enforceable against certain persons only.4
These rights bind all persons except a bona fide purchaser (sometimes referred to as ‘Equity’s
1
Mudenda F. S, Land Law in Zambia Cases and Materials (Unza Press 2007) p147
Megarry, R.E and Wade, The law of Real Property (Sweet & Maxwell 2012)
3
(1872) 7 LR Ch App 259
4
Mudenda F. S, Land Law in Zambia Cases and Materials (Unza Press 2007) p147
2
Darling’) of a legal estate for value without notice and those claiming under such a purchaser.5
This is referred to as the doctrine of notice. Under the doctrine of notice, the person claiming to be
‘Equity’s Darling’ must prove that he is be a bona fide purchaser with notice. A buyer of real
property acquires equitable title to the property when they execute a purchase and sale agreement
with a seller. The case of Banda v Mwanza6 reiterates this as it stated that a purchaser even before
conveyance acquires an immediate equitable interest.
To address the first legal issue,a bona fide purchaser for value without notice means “a good faith
purchaser who buys for value without notice of any other party’s claim or equitable interest against
property.”7 The salient features of the doctrine of bona fide purchaser include; bona fide or good
faith, purchaser for value, of a legal estate and without notice.
Bona fide or good faith implies a purchaser must show that his absence of notice is genuine and
honest.8 Purchaser for value means some value must be given. It is immaterial whether the person
pays too much or too little unless evidence of fraud or mistake is proved.9 Furthermore, the estate
purchased must be a legal estate and not a mere equitable interest.10 The purchaser must obtain
legal interest in the land. If he only has an equitable interest, then even if he has no notice, he is
bound by any prior equitable interests because equity operates on the principle that where the
equities are equal the first in time prevails.11 And lastly, the purchaser must have had no notice of
the equitable interest at the time he gave his consideration for the conveyance 12. In the case of
Mwenya And Another v Kapinga 13 it was enunciated that “notice can be actual or constructive
and where the said notice is imputed on the subsequent purchaser then the plea of purchaser
without notice is defeated.” A purchaser has actual notice where the equity is within his actual
knowledge14 provided the facts have not been brought to his attention by way of vague rumors.15
Constructive notice is where the equity would have come to the knowledge of the purchaser if
5
Maitland, F.W, Equity ( Brunyate J.W, 2nd edn, Cambridge: CUP 1936) p114-115
Banda v Mwanza [2011] ZMHC 72
7
Milambo and Anor v Mweemba (2021) ZMCA 174
8
Midland Bank Trust Co Ltd v Green [1981] AC 513
9
Njobvu v Banda (2014) ZMHC 177
10
Mudenda F. S, Land Law in Zambia Cases and Materials (Unza Press 2007) p148
11
Ibid
12
Banda and Another v Mudimba (2011) ZMHC 116
13
(1998) ZR 17 (SC).
14
Lloyd v Banks (1868) 3 Ch App 488.
15
Barnhart v Greenshields (1853) 9 Moo PCC 18 at 36
6
proper inquiries had been made. Section 22 of the Lands and Deeds Registry Act16 provides for a
due diligence search by the purchaser of land. Thus, he can only plead absence of notice if he made
all usual and proper enquires. As such, in the case of Mwenya and Another v Kapinga17 it was
held that the appellant had constructive notice and when he purchased the property his purchase
was subject to the respondent's title or rights of the respondent. Therefore, the appellant was not a
bona fide purchaser for value without notice. Similarly, Failure to investigate the nature of interest
held by the person in possession of land subjects the purchaser to the rights of the tenant. This was
illustrated in the case of Match Corporation V Choolwe and Another 18 where the title the Third
Party acquired was subject to the rights of the Plaintiff. Therefore, if anyone except the vendor is
in
occupation
the
purchaser
must
make inquiry of the occupier personally.19 As stated in the case of Banda v Mwanza20, purchasers
should inquire about equitable interests with no less diligence than about legal interests. This is in
light of the fact that ‘the purchasing of realty should not be approached as casually as purchasing
household goods.’21
In application to the facts, Zambie State Holdings Ltd had given Bouche an offer letter for the
purchase of a residential house owned by the company. The company had in fact begun to deduct
K3.5 Million against the terminal benefits of Bouche as soon as the Bank had approved the loan.
Bouche also received a telephone call from the Director at Zambie State Holdings Ltd to verify
that money had been paid by the Bank to the Company. Bouche is a purchaser for value as he is
giving sufficient consideration toward the purchase of the house by means of these payments.
Bouche had however sent a notice to Lucie requesting she vacate the house in 3 month and hand
over the possession to him as beneficial owner. Bouche’s actions demonstrate that he was aware
that Lucie was a sitting tenant at the residential house. It is however worth noting that the facts are
silent as to whether or not Bouche was given actual notice or at what point in time Bouche became
aware of Lucie’s presence as a sitting tenant. It can however be inferred from the authority cited
above that Bouche did in fact fail to investigate the nature of Lucie’s interest as she was in
16
Lands and Deeds Registry Act, Cap 185
(1998) ZR 17 (SC).
18
Supreme Court appeal No. 75 of 2002 [unreported]
19
Hodgson v Marks [1971] Ch 892
20
[2011] ZMHC 72
21
Nawakwi v Lusaka City Council and Another, appeal number 26 of 2001 (unreported)
17
possession of the land. Thus, Bouche’s rights are subject to Lucie’s Equitable rights. This is
because he has a duty of due diligence to search real property as provided for in Section 22 of the
Lands and Deeds Registry Act. Bouche was not a prudent purchaser as he did not make inquiries
as to the terms of Lucie’s tenancy agreement. Bouche is not a bona fide purchaser for value as he
has no legal right in relation to the house in question. What Bouche has is an Equitable right as a
buyer of real property acquires equitable title to the property when they execute a purchase and
sale agreement with a seller.
To address the second legal issue, a valid contract requires an agreement, the intention to create
legal relations and consideration. It is immaterial that the consideration is inadequate rather it needs
to be sufficient. 22 Moreover, acceptance of an offer may be by conduct.23 Where the time of
completion of the sale of land is not a term of a contract, there is no justification for rescinding
such a contract.24
The Statute of Frauds Act of 167725 is applicable in Zambia by virtue of the British Acts
(Extension) Act26. Section 4 of the Statute of Frauds Act 1677 provides that in order to bring an
action upon any contract for the sale of land, there must be some memorandum or note in writing
and signed by the party to be charged there with or some other person there unto by him lawfully
authorized.27 A note or memorandum is sufficient provided it contains all the material terms of the
contract, such as names, adequate identification of the subject matter and the nature of
consideration. 28 The agreement itself need not be in writing.29 In this light, the case of Howes &
Others v Buttscarbin30 held that a receipt can amount to a contract of sale and purchase and that
the learned trial Judge erred in law when he held that there were no contracts of sale. The equitable
principle of ‘Equity looks on as done that which ought to be done’ was enunciated in the case of
22
Njobvu v Banda (2014) ZMHC 177
Brogden v Metropolitan Railway Co (1877) 2 App cas 666
24
Mwenya and Another v Kapinga (1998) ZR 17 (SC)
25
Statute of Frauds Act 1677
26
British Acts (Extension) Act Chapter 10, of the laws of Zambia
27
Statute of Frauds Act 1677
28
Wesley Mulungushi v Catherine Bwale Mizi Chomba (2004) ZR 96
29
Mijoni Vs. Zambia Publishing Company Limited Appeal No. 10 of 1986 (unreported)
30
(Appeal 64 of 2005) [2005] ZMSC 7
23
Walsh v Lonsdale.31 The principle is applied in relation to an equitable interest in land. Once
parties enter into an agreement it must be treated as though it has been executed.
In application, Lucie as a sitting tenant, had been offered the same property by her employers
verbally. This constituted an oral contract as her employers had the intention to create legal
relations. Further, Lucie had paid 10% deposit amounting to K700, 000:00. The 10% payment by
Lucie to the company amounted to sufficient value or consideration toward the purchase of the
house. This payment as well illustrates acceptance on the part of Lucie as acceptance may be by
conduct as aforementioned. Furthermore, the Company had given Lucie a receipt upon paying the
K700,00:00. No formal contract had been executed between the parties. Though the contract of
sale was not in writing, the payment made by the Lucie amounting to k700,000.00 towards the
purchase price was evidenced in writing. As elucidated in the cases of Howes & Others v
Buttscarbin and Milambo and Anor v Mweemba, a receipt can amount to a note or
memorandum in the Statute of Frauds Act 1677. The oral agreement was therefore valid in view
as there was a sufficient memorandum through the receipt. It is worth noting that the facts are
silent as to the detail of the receipt, however Lucie can rely on the equitable principle of ‘Equity
looks on as done that which ought to be done’. In so doing because the parties entered into a valid
oral agreement it must be treated as though it has been executed. Thus, making the contract
between Lucie and the Company enforceable under common by way of the Statute of Frauds Act
and by the doctrine of equity as espoused in the case of Walsh v Lonsdale.
To address the third legal issue, the basic rule in equity is that estates and interests primarily rank
in the order in which they are created. In accordance to the case of Edith Nawakwi v Lusaka City
Council, Lucie has been a sitting tenant. She had accrued rights to have first option of purchasing
and since Bouche is not a bona fide purchaser for value without notice he’s rights are subject to
those of Lucie. Thus, at the court’s discretion Lucie can be granted the equitable remedy of specific
performance as it would do complete justice than award of damages. 32 Considering the fact that
the court cannot order a legal owner to make an offer,33 Bouche may then plea or give a prayer
that he be refunded.
31
(1882) 21 CHD 9.
Tito v Waddel [No. 2 1997] Ch. D. P.106.
33
Ibid
32
BIBLIOGRAPHY
STATUTES
Lands and Deeds Registry Act, Cap 185.
British Acts (Extension) Act Chapter 10, of the laws of Zambia
Statute of Frauds Act, 1677
CASES
Banda v Mwanza (2011) ZMHC 72
Barnhart v Greenshields (1853) 9 Moo PCC 18
Banda and Another v Mudimba (2011) ZMHC 116
Brogden v Metropolitan Railway Co (1877) 2 App cas 666
Match Corporation v Choolwe and Another Supreme Court appeal No. 75 of 2002 (unreported)
Hodgson v Marks [1971] Ch 892
Hunt v Luck [1902] 1 Ch. D. P.428
Kabwe v Kapasa (Appeal 35 of 2012) [2014] ZMSC 6
Lloyd v Banks (1868) 3 Ch App 488.
Midland Bank Trust Co Ltd v Green (1981) AC 513
Mijoni Vs. Zambia Publishing Company Limited Appeal No. 10 of 1986 (unreported)
Milambo and Anor v Mweemba (2021) ZMCA 174
Mwenya and Another v Kapinga (1998) ZR 17 (SC)
Nawakwi v Lusaka City Council and Another, appeal number 26 of 2001 (unreported)
Njobvu v Banda (2014) ZMHC 177
Walsh v Lonsdale (1882) 21 CHD 9.
Wesley Mulungushi v Catherine Bwale Mizi Chomba (2004) ZR 96
BOOKS
Maitland, F.W, Equity ( Brunyate J.W, 2nd edn, Cambridge: CUP 1936)
Megarry, R.E and Wade, The law of Real Property (Sweet & Maxwell 2012)
Mudenda F. S, Land Law in Zambia Cases and Materials (Unza Press 2007)
Riddal, J.G, Introduction to land law (4th edn, Butterworths, London 1988)
JOURNAL ARTICLES
Nicholas Hopkins, ‘Acquiring Property Rights from Uncompleted Sales of Land’ (July 1998)
61(4) The Modern Law Review 486 < https://www.jstor.org/stable/1097305 > accessed 29th April
2022