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IN THE HIGH COURT OF BOTSWANA HELD AT LOBATSE

CVHLB-001830-08

In the matter between:

Jia Bao Liang.............................................................................................................................. Plaintiff

and

Michael Motsamai Motila.......................................................................................................Defendant

Mr. J. Nnoi for the plaintiff

Mr. I Seloko for the defendant

J U D G M E N T

DINGAKE J:

1. At the heart of this dispute is a piece of tribal land held under a Memorandum of Agreement of Lease No. TL 553/07.

2. The defendant is the lessee of the aforesaid piece of land and Kweneng Land Board is the lessor.

3. The plaintiff is Jia Bao Liang, an adult male of full legal capacity.  It is common cause that he is not a citizen of Botswana.

4. The plaintiff sued the defendant for payment of P53200.00 under three separate heads, being Claim “A” “B” and “C” of his Particulars of Claim.  However, the plaintiff has now abandoned Claim “C”, which was for the amount of P3200.00.

5. The plaintiff’s claim is founded on a written contract the parties entered into sometime in 2006.  The plaintiff claims specific performance arising from the aforesaid contract, especially the terms encapsulated by Clause 4.2 thereof.

6. The defendant, on the other hand, opposes the suit and counter-claims. The defendant’s counter-claim arises from the plaintiff’s liability for alleged storage charges of the motor vehicle delivered by the plaintiff to the defendant pursuant to the aforesaid agreement.

7. The parties have submitted a special case for adjudication on points of law in terms of Order 35 of the High Court Rules.

8. The parties have agreed on the facts that underpin their dispute and the said agreed facts are filed of record. In the aforesaid agreed statement facts, the parties also set out their respective positions on the matter.

9. For completeness, I reproduce hereunder the agreed facts in their entirety.

“1. The parties entered into an agreement in terms of which defendant shall upon payment of P5 400-00 and delivery of a certain motor vehicle, have a Notarial Deed of Cession over a piece of tribal land at Kopong registered in favour of Plaintiff.

2. The contract was reduced to writing and was signed by both parties on the 18^th October 2006.

3. The defendant cancelled the contract on the 10^th December 2007 and plaintiff accepted cancellation thereof.

4. The plaintiff contends that in terms of the contract per clause 4.2, the defendant is, upon failure to have the Notarial Deed of Cession registered, liable to plaintiff for payment in the sum of P43 400-00 (Forty Three Thousand Four Hundred Pula) made up of initial payment of P5 400-00 (Five Thousand Four Hundred Pula) and the amount of P38 000-00 (Thirty Eight Thousand Pula) being representative of the agreed value of the motor vehicle.

4.1 The contract per clause 4.2 provides as follows:

“In the event of failure to have the notarial deed of cession not being registered for any reason whatsoever, the Cedent shall be obliged to pay the Cessionary the sum of P43 400-00 together with the costs of any reasonable improvements made by the Cessionary on the property, within a period of ninety (90) days from the date of such refusal.”

4.2 Plaintiff contends that clause 4.2 of the contract can be construed without any necessity of seeking aid from circumstances outside the written contract and without relying on inferences.  In other words, the plaintiff contends that the context and obligations created by clause 4.2 are very clear and need no further interpretation.

4.3 The plaintiff further contends that there is no mention in the contract of the return of the motor vehicle and no provision for payment of any storage charges.

4.4 The plaintiff contends that the parties provided meticulously for payment of a sum certain in money which is due and payable to the plaintiff per clause 4.2

4.5 The plaintiff also claims reimbursement of expenses incurred which include P6 600-00 (Six Thousand Six Hundred Pula) paid to Land Surveyor for preparing a diagram to enable Kweneng Land Board to prepare memorandum of lease.  This claim is premised in the context of clause 4.2 of the agreement.

4.6 The plaintiff abandons claim “C”.

5. The defendant on the other end contends that the agreement between the parties is illegal, unlawful, invalid and incompetent and unenforceable for reasons that:

5.1 There was no requisite ministerial consent in terms of the Tribal Land Act.

5.2 There was no consent by Kweneng Land Board.

5.3 The property in question cannot be sold because it is undeveloped even if the purported agreement was to be found valid.

6. Defendant further contends that by virtue of the above he is entitled to return the motor vehicle to plaintiff.

7. Defendant contends further that plaintiff is liable for storage costs in the amount of P53 950-00 (Fifty Three Thousand Nine Hundred and Fifty Pula) incurred for the duration upon which he remained in possession of the motor vehicle.

8. The issues for “determination by the court” are as follows:

8.1 Whether the contract between the parties is illegal, unlawful, invalid, incompetent and unenforceable.

8.2 Whether the defendant is entitled to return the motor vehicle and claim storage costs thereof.”

10. There can be no doubt in my mind that the plaintiff seeks to enforce the contract referred to in the above agreement.  It is also common cause, as is clear from the agreed facts that the defendant has cancelled the agreement and the plaintiff has accepted the said cancellation.

11. On the main, the defendant contends that the agreement is illegal and therefore unenforceable.  

12. It is also contended by the defendant that the proper cause of action for the plaintiff is not to sue for specific performance but for unjust enrichment.

13. At the outset, it is necessary to set out the governing law and principles that applies to a case of this nature.

14. As I indicated earlier, at the heart of this dispute is a tribal piece of land.  There is no suggestion in the pleadings and/or on the agreed facts that this piece of land is developed. In fact it is implicit that the said land is not developed.

15. The governing law relating to dealing with the aforesaid land is the Memorandum of Agreement of Lease, Tribal Land Act  Cap 32:02 and regulations made thereunder.

16. Clause 9 of the Memorandum of Agreement of Lease dealing with hypothecation, mortgage and pledge provides that:

 “The lessee shall not sublet, cede, assign or make over whether directly or indirectly any of the rights in this lease or in any way part possession with the leased land or any part thereof, without the written consent of the lessor but no consent shall be necessary for purposes of mortgaging, pledging or hypothecating the said land if the lessee is a  citizen.” (Emphasis mine)

17. Section 24 (2) of the Tribal Land Act provides as follows:

“A land board may not grant land under this section to a person who is not a citizen of Botswana without the consent in writing of the Minister.”

18. Section 38 (1) of the aforesaid Act also provides that:

“The rights conferred upon any person in respect of any grant or lease of any tribal land, whether made under or in accordance with Part III or Part IV, or made prior to the coming into operation of this Act, shall not be transferred, whether by sale of otherwise, to any other person without the consent of the land board concerned.

Provided that the provision of this subsection shall not apply in the case of;

(i) land which has been developed to the satisfaction of the land board concerned;

(ii) a sale in execution to a citizen of Botswana;

(iii) a hypothecation by a citizen to Botswana; or

(iv) the devolution of such land on inheritance.”

19. I pause here to highlight that Section 38 (1) is clear that tribal land “shall not be transferred whether by sale or otherwise to any other person without the consent of the landboard concerned”. (Emphasis mine)

20. I have no doubt in my mind that the use of the phrase “not transferred, whether by sale or otherwise” are of wide import and include, among other things, that tribal land shall not be alienated in any manner whatsoever without the consent of the land board.  Whatever legal sophistry may be employed in fashioning contractual obligations, there can be no doubt in my mind that the parties’ Agreement of 2006, in terms of which the defendant ceded or purported to cede his rights to the plaintiff was a form of alienation, and/or transfer of land, other than by sale.

21. As is also clear from the terms of the Memorandum of Agreement of Lease referred to earlier, that cession of rights also require the consent of the land board, which was not obtained in this case. The Memorandum of Agreement of Lease is emphatic in prohibiting unauthorized cession, among other forms of alienating land. The use of the words “directly or indirectly” places matters beyond doubt that any alienation of tribal land, in whatever form it may take, must be authorized by the land board, which is not so in this case.

22. It must also be emphasized that the transaction, the subject matter of this claim does not fall under the proviso to Section 38(1) of the Tribal Land Act.

23. The proviso to Section 38(1) of the Tribal Land Act allows for alienation of developed land, among other examples encapsulated therein.

24. That the legislature views seriously any attempt to transfer land in contravention of the provisions of the Act is manifest from Section 39 (1) (c) of the Tribal Land Act, which provides that:

“39. (1) Any person who –

…

(c) transfers any such land to any other person otherwise than under and in accordance with the provisions of this Act shall be guilty of an offence and shall be liable to a fine of P10 000 and to imprisonment for one year, or if the offender is a corporate body, to a fine of P20 000.”

25. On the strength of Section 38 of the Tribal Act aforesaid, it seems clear to me that the defendant purports to transfer common law rights over tribal land to a non citizen, which is clearly against both the express wording and spirit of the aforesaid section.

26. Even more surprising, the contract between the parties, again contrary to the letter and spirit of Section 38, purports to give the plaintiff the right to transfer the defendant’s rights to the piece of land that would ostensibly have been ceded to the plaintiff, to an entity of the plaintiff choosing.

27. In his heads of arguments, the defendant submitted that contracts that are illegal or offend statutory provisions cannot be enforced.

28. The defendant placed reliance on the well-known cases of Matthews v Rabinowitz [1948] 2 SA 867 and Schierhout v Minister of Justice [1926] AD 99.

29. In the case of Schierhout v Minister of Justice 1926 AD 99 at 109 Innes J (as he then was) said:

“It is a fundamental principle of our law that a thing done contrary to the direct prohibition of the law id void and of no effect. The rule is thus stated: “Ea quae lege fieri prohibentur, si fuerint facta, non solum inutilia, sed pro infectis habeantur; licet legislator fieri prohibuerit tantum, nec specialiter dixerit, inutile esse debere quod factum est.”  (Code 1.14.5).  So that what is done contrary to the prohibition of the law is not only of no effect, but must be regarded as never having been done – and that whether the law giver has expressly so decreed or not; the mere prohibition operates to nullify the act.  (See also Brunneman ad Codicem 1.14.5).  The maxim, “Quod contra legem fit pro infecto habetur”, is also recognised in English Law.  And the disregard of peremptory provision of a statue is fatal to the validity to the proceeding affected.  (See remarks of Lord PENZANCE in Howard v Bodington (1877) 2 PD 203, at p210.”

30. I associate myself with the ratio of the above cases that an illegal contract will not be enforced by the courts.

31. There is a reason why the Legislature in its wisdom chose to impose the strict regulatory regime it did and to criminalise breach thereof.

32. This has to do with the importance of land to any economy or legal system.

33. Land is not an infinite resource.  It is also common heritage that must be preserved for the common good.

34. It would be dangerous and contrary to public interest to permit alienation of tribal land, especially to non citizens.  No one can deny that the alienation of tribal land to non citizens in particular is inimical to public interest.  The end result of unbridled alienation of land is that a significant part of this very crucial resource can end up in foreign hands.

35. It is trite law that agreements that are clearly inimical to public interests run counter to social or economic expedience and the courts are entitled to refuse to enforce them on the grounds of public policy.  This case is a perfect example of such agreements.

36. It would be a betrayal of the worst kind if this court were to fail to give effect to the clear intention of the legislature prohibiting the alienation of tribal land contrary to the provisions of the Tribal Land Act.

37. It is a trite principle of our law that a thing done contrary to the dictates of statute is void and of no force and effect.  In fact what is contrary to the prohibition of the law is not only of no effect, but the law regards it as never having been done.  In other words, and as a general rule, the mere prohibition by statutes operates to nullify that which is done contrary to its terms.

38. In this case, not only is alienation of tribal land prohibited, unless it is in compliance with the Tribal Land Act, violation thereof is made a criminal offence.  One clear consequence, in my view, arise from criminalization; namely, the thing purported to be done is rendered void.  Further, the very heavy penalties prescribed by the Act underline the importance the legislature attaches to breach.

39. The plaintiff says in an apparent reference of the illegality argument that it is not seeking to enforce the cession rights, but payment of money as per the written agreement. With respect I cannot agree.  Which agreement? In law there was never any agreement. To fall for the legal sophistry of the plaintiff is to risk losing public confidence in the ability of the court to give effect to the intention of the legislature.  Once the contract is tainted with illegality it is unenforceable in toto.

40. On the basis of the governing law as set out above and case law cited, I am clear in my mind that the contract signed by the parties was illegal and unenforceable.

41. It must follow therefore that an order of specific performance as sought by the plaintiff would be incompetent.

42. The above position is consonant with the views of the learned author Christie, in his treatise, The Law of Contract 4^th ed, at pages 391 – 392, when he wrote:

“The principle of the unenforceability of illegal contracts is contained in the maxim ex turpi causa non oritur action, but must be remembered that is not only turpis, or morally wrong, contracts that are unenforcesable. It should also be appreciated that the principle laid down in Jajbhay v Cassim 1939 AD 537, that the maxim in pari potior est condition Defendant’s may in a proper case be departed from in order to prevent an injustice, is in general not applicable when the Plaintiff is seeking to enforce the contract.  In general, not even the strongest considerations of equity can empower the court to enforce an  unenforcesable contract, so when enforcement is claimed such considerations are irrelevant.”

43. The remedy of specific performance is incompetent at two fronts: (a) that an illegal contract is wholly unenforceable and (b) further that were the contract has been cancelled, an order of specific performance is untenable.

44. The latter point was explained with breathtaking clarity, by Van Heerden JA in the case of Thomas v Henry and Another 1985 (3) 889 at pages 895I–896 E as follows:

“At the outset it is necessary, however, to elaborate somewhat on the legal principles governing a case such as this one.  It has often been said that if an innocent party is entitled to cancel a contract, whether on the ground of misrepresentation or breach of contract, he must exercise an election between two inconsistent remedies, i.e. whether to cancel or to abide by the contract; that the election of one remedy necessarily involves the abandonment of the other and that he therefore cannot both approbate and reprobate.  In Feinstein v Niggli and Another 1981 (2) SA 684 (A) at 698 TROLLIP JA said that election generally involves a waiver in the sense that one right is waived by choosing to exercise another right which is inconsistent with the former, and pointed out that election and waiver have been equated as being species of the same general legal concept.  Hence the learned Judge concluded that no reason exists why the same rule about the overall onus of proof applicable in waiver should not also apply to election mutatis mutandis.  TROLLIP JA did, however, mention one possible qualification, ie whether in election, as distinguished from waiver, proof merely of the innocent party’s knowledge of the material facts giving rise to his remedies suffices, or whether knowledge of his rights must also be proved.  Although TROLLIP JA expressed a preference for a second possibility, he found it unnecessary to pronounce a firm view thereon.

Once the innocent party has decided to cancel – and has communicated his decision to the other party – he has, of course, exercised his election.  He then no longer has a choice of remedies and may not, without the consent of the other party, undo his decision.  The concept of election is therefore not appropriate in regard to conduct which appears to be in conflict with an intention to rely on the chosen remedy.  It is perhaps more accurate to designate such conduct as a waiver or abandonment of an accrued right, but, as was pointed out by KUMLEBEN J in Mahabeer v Sharma NO and Another 1983 (4) SA 421 (D) at 423–4, the term “waiver” (and, I may add, also “abandonment”) is an imprecise one which can be used in different senses.  However, for the sake of convenience I shall use the word “waiver” with reference to conduct of the innocent party which precludes him from relying on his prior cancellation of a contract (if, of course, the other party is prepared to accept the volteface).”

45. The doctrine of election is also stated by Watermeyer AJ in Segal v Mazzur 1920 CPD, 634, 644–5

“Now, when an event occurs which entitled one party to a contract to refuse to carry out his part of the contract, that party has the choice of two courses.  He can either elect to take advantage of the event or he can elect not to do so.  He is entitled to a reasonable time in which to make up his mind, but when once he has made his election he is bound by that election and cannot afterwards change his mind.  Whether he has made an election one way or the other is a question of fact to be decided by the evidence.  IF, with knowledge of the breach, he does an unequivocal act which necessarily implies that he has made his election one way, he will be held to have made his election that way; this is, however, not a rule of law, but a necessary inference of fact from his conduct:..”

46. It follows from the above that the plaintiff’s action is liable to be dismissed as I shall pronounce in due course.

47. I turn now to consider the defendant’s counter-claim.

48. For convenience, I will, in this judgment, simply refer to the plaintiff in reconvention as the defendant and the defendant in reconvention as the plaintiff.

49. Essentially, the defendant’s counterclaim is based on the averment/allegation that, upon cancellation of the agreement the plaintiff refused to accept the vehicle that was the subject of the agreement when the defendant tendered same with the result that the plaintiff is liable to pay storage charges that accrued in the sum of P50.00 per day.

50. The defendant says that the plaintiff is liable to pay the storage or rental charges and or reimburse the plaintiff in reconvention.

51. In my view, the defendant’s counterclaim has no merit for one or more of the following reasons.  The counter-claim being an intrinsic part of the illegal agreement, as I have already held, cannot be enforced.  Even assuming I may be wrong in so holding, the defendant has not proved on a balance of

probabilities that it is entitled to the prayers sought.  His case must therefore fail on the basis that no sufficient evidence was placed before the court to justify the prayers sought.

52. In the result:

52.1 The plaintiff’s action is dismissed.

52.2 The defendant’s counter-claim also is dismissed.

52.3 There is no order as to costs.

DELIVERED IN OPEN COURT THIS 8^th DAY OF SEPTEMBER 2010

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OBK DINGAKE

JUDGE

NNOI & CHILUME ATTORNEYS – PLAINTIFF’S ATTORNEYS ISAAC SELOKO ATTORNEYS – DEFENDANT’S ATTORNEYS

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