Finance Bank of Malawi Ltd v MDC Ltd & Anor. (20 of 2010) [2010] MWSC 17 (15 September 2010)

IN THE MALAWI SUPREME COURT OF APPEAL AT BLANTYRE MSCA CIVIL CAUSE NO. 20 OF 2O1O (Being High Court Commercial Camse No. 135 of 2008) BETWEEN: IIINANCE BANK OF MALAWI LIMITED (IN LIQUIDATION) ,1ST APPELLANT LAND PROPERTY AGtrNTS. ...... .2ND DtrF'trNDANT - AND_ MDC LIMITED. MDC SPORTS CLUB LIMITED 1ST RESPONDENT .......2ND RESPONDtrNT BEFORE: THE HON. JUSTICE TAMBALA, SC, JA THE HON. JUSTICE TEMBO, SC, JA THE HON. JUSTICE NYIRENDA, SC, JA Mpaka, Counsel for the Appeiiant Kainja, not present, Counsel for the Respondent Mwale, Recording Officer Singano (Mrs), Senior Personal Secretary JUDGMENT NYIRENDA, SC, JA Justice i{apanda of the High Court (Commercial Division) b}, his ruling of the 12th June, 2OO9 found for the respondents, vthcr \ iere then the plaintiffs, against the first defendant, the appeilant in the present appeal, and the second defendant. The sole qurestion for determination in this appeal is horn, the orders made in the ruling referred to should be complied u,ith ou,ing to subsequent orders that the learned Judge made. The facts u'ill pr-rt the appeal in perspective. The background is that the respondents obtained a loan of Kr2,000,000. oo from the appellant. The loan \^/as secur-ed on property title number Likabula 1 88, otheru'ise knou,n as MDC Stadium. The respondents failed to service the loan resulting in the appeilant moving in to reafrze the securitl, thereof. In ord"er to liquidate the security the appellant engaged the senices of 1fie lna defendant who diligently sold the propertl, to the Football Association of Malawi. The property was sold at K22,o00,O0O. OO and the 2nd defendant deducted a commission of K?,OO0,O0O. O0 weil in advance. which was the agreed ten percent commission rn'ith the appellant. The rest of the purchase price \ /as being paid bJ' instalments. obviously upon the entire K22,000.000.00 being paid and upon the appellant realising their loan in fu1l, the baiance of the purchase price \^ras payable to the respondents by the appellant. In a separate and unrelated transaction the appeliant orn'ed the second defendant the sum of K9,O 17 .244.26. The second defendant had already obtained judgment in that sum. In the second defendant's rn'isdom or for lack of it, thev decided to irelp themselves to the proceeds of sale of property Likabula 1BB and refused to remit the sum of K9,0I7,314.28 to the appellant in'hich amount of money the appellant rn'as to pass on to the respondents as being the baiance on the purchase price. The matter before Justice Kapanda, in substance, \^'ils u'hether the 2"0 defendant was entitled to u'ithhold that amount of monelr as they did and in the circumstances of the matter. There was a preiiminary question r,l,hether the 2nd defendant \ /as at all properly joined as a party to the action since there was no direct relationshir: between the respondents and the 2nd defendant. The learned Judge had no difficulties, and rightly so in our own view, in finding that tTte 2"d defendant was properly joined as a party and further that 2"d defendant was wrong in u,ithholding the money. It is here that we must set out the specific Orders that the Judge made; only to the extent relevant to the appeal before us: The conciusion of the ruling states: "The long arud shorl of it is that the plaintiffs haue made out their case against the 1"t and 2"d defendant. I so Jirtd antd conclude. Accordinglg, this Court makes the follotuing Orders reflecting the conclusions and Jindings made aboue. The l,t defetzdant has no lawful excLtse to refuse to remit to tlrc claimant tLte excess morzies realized bg the 1"t dekndant durirtg the sale of MDC Stadium. The 2"d dekndant has no lauful excuse for uithholding the proceeds o.f charged propertg sold by tlrc Chargee throtLgh their agerLCA. Actuallg, flls )r'Ld dekndant's retention of the sum of K9,017,314.28 being the balance of the purchase of pice of the sale of charged property is outside the scope its authoritg as an agent for the l"t defendant. The plaintiffs are entitled to claim interest against the defendants herein for wrongfully depriuing them of their monies f,"om 29tt' July, 2006 to date. In my judgment the plaintiff hauing prouen to the sufficient standard that the moneA withheld from them rigtltfullg belong to the plaintiffs it goes witLtout saying that they are entitled to receiue the utithheld moneA plus interest as pleaded. Accordingly, the sum of K9,017,314.28 so withheld is payable plus interest hereon at the current commercial banlc's lendirtg to the date of fut payment. The said interesl ls to be assessed bg the Assistant Registrar of tLtis Courl. The 2trd defendartt tuas corcectly joined as panly to tlzis action. Therefore, under R. S. C. Order 15, Landed Property Agents was correctly joined as a defendant to the plainttff action. Indeed, as a result of that the Court was able to detennine uhetlter or not the 2,d defendant was at lat u entitled to set off tl'te sums outed to it by the Bank against ttte proceeds of sale receiued on behalf of the Banlc. 71'rs )nd defendant was bound to pay tlte moneA ouer to the Banh by uirtue of Section 287 of the Company Ac| 1984 so that the moneg LUas euentually remitted to the liquidator of the plaintiffs." Almost six months after the ruling, on the 1't of December, 2009, and astonished that the money was not forthcoming, the first and second respondents took out summons to fix time for pal.ment of the judgment debt. The order which the learned Judge made is what prompted this appeal. It was as follorn's: "The Courl hauing heard Counsel for the plaintrff a.nd the J.r defendant HEREBY ORDERS the lst dekndant to pag the judgment debt uithin 14 (fourteen) dags from the date of this Order. Dated I Ut ictg of December, 2009." By this appeal the appellant contends, in the main, that the Order above was meant to put into effect the ruiing of the I2th June , 2009. Unfortunately in trying to do so the learned Judge ended up virtually excluding the 2"0 defendant from liability. We hasten to agree with the appellant. The Order of 1 1th December, 2OO9 in effect materially varies and substantially distorts the ruling of the Court of the 12th June 2OO9. As a matter of fact by leaving out the 2nd Defendant from enforcement, the Order in effect substantially defeats the ruling of the l2th June, 2OOg because the main thrust of that ruling \ ras to require the 2'd defendant to pay the money over to the appeliant in order for the appellant to pay it to the respondents. Clearly this appeal should be allowed and we think ure carr expedite the process of recovery of this debt which is now long overdue owing to the unprofessional conduct of the 2"d defendant. We think we are entitled to order that the 2"4 defendant should pay, forthu'ith, the sum of K9,017,3I4.28, with interest as ordered by Court below, directly to the respondents. We make no order regarding costs in respect of the appeal and indeed none hanre been sought. PRONOUNCED in Open court at Blantyre this 16th d.y of Septemb er, 2OIO. signea. Akg.i,:r D. G. Tambala, SC, JA --l =\ Slgne0.. . .. . .) . .r.);. .1" ..-. ;.. ^: A. K. Tembo, SC, JA , ---- t. Signed. A. K. C. Nyirenda, SC, JA