Habp Lubricants Distributors v Gondwe t/a LGK Services (Commercial Case 330 of 2012) [2013] MWHC 494 (30 October 2013)

IN THE HIGH COURT OF MALAWI ZOMBA REGISTRY COMMERCIAL CASE NO, 330 OF 2012 BETWEEN: HABP LUBRICANTS DISTRIBUTORS ..... evesavccvarcousssenssresensacses eeeEeeeeee PLAINTIFF And LEYTON K. GONDWE t/a LGK SERVICES .2cccoeescesssnsncesssesscecssssseneeeesseeee+DEFENDANT Coram: Howard Pemba Assistant Registrar Mr Mwangomba Counsel for the plaintiff Miss Kalua Counsel for the defendants Mrs Ndanga Official interpreter RULING This is an application by the Plaintiffs for summary judgment and/or judgment on admission against the Defendants on the ground that the Defendants have no defence to the whole of the Plaintiff’s claim or part thereof except perhaps as to damages claimed. The brief background of all this is that by a specially endorsed writ of summons issued and subsequently amended by this court on 19" September 2012, the Plaintiffs commenced the present action against the Defendants claiming the sum of K13,381,393.76, compound interest at 4% above lending rate of NBS Bank Ltd for the date each invoice was due to the date of payment, and costs of the action. It is alleged that the claim is pursuant to the Defendants’ breach of contract that was entered between the two by failing or wilfully neglecting to make payment of the said sums which was outstanding for goods duly supplied to the defendant as agreed. Defendants entered their defence on the Plaintiffs’ legal practitioners on 14th "12 denying liability altogether. The Plaintiff then took out the present “ing an order by the court for summary judgment or judgment on 1 admission in favour of the plaintiff as prayed in the statement of claim alleging that the defendant has no sustainable defence. In support of this application, the Plaintiff filed an affidavit sworn by Mr. Harold Lungu, the Managing Director of the Plaintiff Company. In addition to the said affidavit, counsel for the Plaintiff also filed skeletal arguments in which he similarly made his submissions in light of the relevant and applicable law. It is averred in this affidavit that by contracts made from to time between the Plaintiff and the Defendant as evidenced by invoices and running statement of accounts, the Plaintiff supplied goods to the Defendant at the latter’s own request. There are attached to the said affidavit, copies of the said statement of accounts and invoices marked P1 to P32 which came as a result of the said contractual agreement. The Plaintiff further states that the total cost of goods supplied to the defendant came to K13,381,383.76 and by a letter dated 17 September, 2009, the defendant admitted owing the Plaintiff the said sums. There is also an attached copy of the said letter and the Defendant’s proposed payment schedule marked P33. It is further in the Plaintiff’s affidavit that the Defendant, however never honoured their own proposal on how they wanted to pay the debts. There is also a copy of the fax transmittal sheet exhibited P34 which the Plaintiff also claims to be an admission of the defendant’ indebtedness. The Plaintiff says that the Defendant’s only contention in his defence was that he had made some payments to the Plaintiff but the Plaintiff discovered that two of the cheques bounced while others were indicating BP Malawi as payee and the said payee denied having received the cheques. In view of this, the Plaintiff says that it is very clear fromm the foregoing that the defendant has no defence to the Plaintiff’s claim and the purported defence is a mere sham. Therefore they pray to this court that judgment on admission of Liability or in the alternative summary judgment be entered for the Plaintiffs as pleaded in the statement of claim. in opposition to the application herein, the Defendant also filed an affidavit sworn by him and skeletal arguments, in both of which he essentially opposes to the whole of the Plaintif?’s claim and assertions. The Defendant disputes some of the invoices which he claims were not signed by him. He says that most of the attached invoices to the Plaintiff’s affidavit are unsigned by him and because of this, such invoices were either not submitted to them or they would have disputed them. It is further averred by the Defendant that he paid for all the exhibited invoices and there are attached cheque scans marked Di to D7. Thus, the Defendant prays to this court that the Plaintiff’s application should be dismissed and an order should be made granting the defendant teave to defend the action herein. To this far, | wish to extend many thanks to counsels for both the Plaintiff and the Defendant for their industrious research portrayed in the submissions filed on the within application herein. | have had ample time to consider all the case authorities as cited by both parties. Furthermore, | have equally had an opportunity to look at each and every attached document to the affidavit herein from both sides including the Defendant’s defence. From my own reading of the evidence as adduced, the only issue for determination is whether this matter is one that can property be determined under Order 14 or Order 27 of the Rules of the Supreme Court. |.e. my only task is to determine whether or not the order of summary judgment or judgment in admission herein should be entered in light of the applicable law. This now takes me to briefly look at the applicable law to the present application. The law regulating the present application is provided under Order 14 rule 1 and Order 27 rule 3 of the Rules of the Supreme Court. Order 14 is a means of disposing of cases where there is no bona fide defence. The order is intended to prevent a man clearly entitled to money from being delayed where there is no fairly arguable defence to be brought forward (see Anglo Italian Bank v Wells and Davies (1878) 38 197 CA). Thus, the court will give judgment in favour of the plaintiff not only where 3 there is no defence but also where there is no arguable point to be made on behalt of the defendant:( Robert v Plant [1895] 1QB 597, Malawi College of Accountancy v J Jafuli tla Hopco Estate Agents civil cause number 1248 of 1996.) In the case of Sugar Corporation‘of Malawi v Harding t/a Kirtland Company (SA) [1991] 14 MLR 473 at 475 one of the grounds on which summary judgment could not be granted was the fact that the defendant alleged that he had no knowledge of or connection with the defendant company, a substantial issue was raised which required determination at a full trial. The court explained the application of the arder in the following words: "judgment under the order is justified only in cases where the plaintiff's claim Is clear and obvious and where the defendant has no defence or issue against the action. So that where the defendant shows a defence or a reasonable chance of defence or a bona fide case for the defence the defendant should be given unconditional leave to defend. Order 14 is intended only to apply to cases where there is no reasonable doubt that the plaintiff is entitled to judgment..." In the case of Blantyre Hotels Ltd v Kawamba t/a Market Force [1991] 14 MLR 31, the plaintiffs action was for the sum of K3, 260-57. This was in respect of accommodation from 10 August 1989. The plaintiff's case, just like the present one, was that invoices were sent to the defendant and he had not paid. The defendant did not deny that these invoices were sent to him. The defendant did not file an affidavit in opposition to the one lodged by the plaintiff in support of its application for summary judgment. The defendant's defence was simply that he had paid the plaintiff and that there was therefore, a bona fide defence to the plaintiffs action. Nothing was produced to substantiate the defendant's alleged defence. There was a mere blank statement that said, in effect, “I have paid.” The court was of the view that where the Supreme Court of Appeal held that some evidence of payment had to be produced to validate a defence, the High Court was bound by that decision. However, although the judge on appeal had required the production of receipts as proof of payment, that was not always possible and accordingly not strictly necessary. What would be necessary though would be for the defendant to raise some circumstances or facts which show that there was a payment. For that he had to produce evidence, and it did not matter whether he produced that evidence orally in court or in writing in an affidavit. But a mere blank allegation by a defendant that he has paid may not be enough. Further in the case of Registered Trustees of Sedom v Buleya [1991] 14 MLR 422, the plaintiff instituted action against the defendant, a former employee, for repayment of the sum of K37, 230-02 that the defendant had borrowed from the plaintiff while in its employ. The court allowed the application for summary judgment and pointed out that “the defendant should state why he is not indebted, and state the real nature of the defence relied on". However, for this summons to fail the law requires that the defendant has to satisfy the court that there is a triable issue and sufficient facts and particulars must be given {0.14 r.3 (1)}. Where the defendant raises a triable issue the tendency is to grant leave to defend the action: Leyland DAF (Mal) Ltd v Lambat [1993] 16(1) MLR 245; Shepherds and Company v Wilkinson [1898] 6 TLR 13. Following this principle in the cases of Makwiti v Kaliwo [1992] 15 MLR 218 and Rasul v Tutla [1992] 15 MLR 419 a dispute on facts was one reason why an application for summary judgment was dismissed. The two tests that are appropriate in cases of this nature are: “is what the defendant says credible" and if so “is there a fair or reasonable probability of the defendant having a real or bona fide defence”. Where an issue of fact is raised, the first question must be answered in the affirmative before considering the second: National Westminister Bank v Daniel [1994] 7 ALL ER 156, Order 14 rule 4(9). it is trite law that the mere assertion in an affidavit of a given situation does not, ipso facto, provide leave to defend. The defendant must satisfy the court that he has a fair or reasonable probability of showing a real or bona fide defence, i.e that his evidence is reasonably capable of belief: Basque de Paris et des Pays Bas (Suisse) § A v Costa de Naray [1984] Liloyds’s Rep 21; Bhogal v Punjab National Park [1988] 2 All ER 296. |f the evidence of the defendant is incredible in any material respect, it cannot be said that there is a fair or reasonable probability that the defendant has a real or bona fide defence, and judgment will be given to the plaintiff: National Westminister Bank v Daniel [1994] 1 ALL ER 156. In the case of Bouri v Mudalliar 11MLR 345, the court was of the view that: "As a matter of fact, the defendant need not at that stage show a complete defence. All needs to show is that there is a triable or arguable issue or question or that for some other reason there ought to be a triat....” In the case of Kanjala v Norse International Ltd civil cause no. 2353 of 1998, the court stated that: "The purpose of order 74 of the Rules of the Supreme Court is to enable a plaintiff to obtain summary judgment without trial if he can prove his claim clearly and if the defendant is unable to set up a bona fide defence. The order is draconian. Instead of trial first and then judgment, there is never a trial but a judgment once and for all..... Order 14 is for clear cases, that is, cases where there is no serious material factual dispute and, if a legal issue, then no more than a crisp legal question as well decided summarily as otherwise. The procedure is inappropriate where the plaintiff's entitlement to recover any sum is subject to serious dispute, whether of fact or law....whilst the plaintiff must prove his claim clearly to be entitled to 6 summary judgment under Order 14, the hurdle which the defendant has fo jump is a modest one. Unless his alleged defence is practically moonshine, he should be given leave to defend... The reason why the defendant has a modest hurdle to jump is that the effect of order 14 is to deny a litigant the fundamental right to defend himself in court. Only when it is [sic] clear that even given the right to have his say at the trial, he would have nothing worthwhile to say, should he be shut out from defending - otherwise he should be given leave to defend’. Furthermore, Order 27 rule 3 of Rules of the Supreme Court provides as follows: “Where admissions of fact or of part of a case are made by a party to a cause or matter either by his pleadings or otherwise, any other party to the cause or matter may apply to the Court for such judgment or order as upon those admissions he may be entitled to, without waiting for the determination of any other question between the parties and the Court may give such judgment or make such order, on the application as it thinks just. An application for an order under this rule may be made by motion or summons.” Admissions of fact may be express or implied, but they must be clear (See Ellis vs Allen 1914 {Ch 904@909. It must be noted that the jurisdiction of the court under this order is discretionary, but in the absence of reason to the contrary the order is made so as to save time and costs. An admission may also be made in a letter before or since the action was brought or even orally if such admissions can be proved (PN27/3/4). In appropriate case, however, for a personal injury, the court may refuse to grant an application for judgment on admission under Order 27 rule 3 if the defendant admits negligence but does not admit that the plaintiff suffered injury but may instead grant a summary judgment under Order 14 rule 1 (See PN 27/3/7 and the case of Dummer vs Brown (1953)1ALL ER 1158) Coming to the matter at hand, | have heard both parties and | have clearly read their affidavits. | have also taken my time to read and try to understand the Defendant’s defence which has equally been fully discussed by the Plaintiff’s skeletal arguments in 7 support of this application as well as all other Exhibits marked P1 to P32 referred to by the Plaintiff. | have equally appreciated the arguments about the letter and the proposal alluded to by the Plaintiff’s counsel. The bone of contention in the present application revolves around the invoices that came as a result of the contract entered into between the Plaintiff and the Defendant. The plaintiff states that the invoices were not paid and this was a breach of contract. However, the Defendant states that all invoices sent to them were honoured and paid. Those which were not paid were not sent to them as they were unsigned by him and if they were sent to him, he would have disputed them. i should point out that | am very mindful that as a matter of fact, the Defendant needs not at this stage show a complete defence. All what is to be shown is that there is a triable or arguable issue or question or that for some other reasen there ought to be a trial. In United General Insurance Company Ltd vs Shepher Mumba MSCA Civil Appeal No. 12 of 2010, Justice E. M Singini said in relation to the application of Order 14 which | have found it quite iltuminating: “...1t is a procedure to enable a plaintiff to obtain judgement without proceeding to trial (that is to say, obtain judgment summarily) on the ground that he believes that his opponent has no defence to a claim or counterclaim. The procedure will not apply where, for instance the defendant satisfies the court that there is an issue or question in dispute that ought to be tried or that there ought for other reason to be a trial...” it must be noted from the above quotation that proceedings under Order 14 presupposes that there are no disputes as to facts. Otherwise if there are any, thena full trial must be conducted. In considering whether proceedings under Order 14 are suitable, the court ought to look at all the facts surrounding the case. In this case before me, matters of law and facts have been raised on the part of the plaintiff, i.e. issues relating to breach of contract by the said non payment of the said invoices herein have been alleged by the Plaintiff. The same have been denied by the Defendant in their defence as well as the skeletal argumenis. Obviously one would already visualize a dispute herein as to whether indeed there was breach of contract on the part of the Defendant. Furthermore, there are issues relating to the validity of the invoices which were sent to the Defendant. The Defendant has further said that there is misrepresentation of facts by the Plaintiff which shows that even the facts herein are in dispute. For this reason, the Defendant has managed to show that there are issues of facts and law yet to be determined in this action. This court is therefore of the view that the Defendant's defence raises triabie or arguable issues of fact and law. i wish to hold the view that this is not a matter that can be determined fairly and justly by means of the summary process of Order 14. It must be recalled that Order 14 is specific that it must be shown that the Defendant has no defence to a claim included in the writ. The defendant in their purported defence denies breaching the contract. In my considerable opinion, matters of breach of contract and facts relating to the non payment of the invoices as particularized in the statement of claim and subsequent denial by the Defendant in his defence as well as affidavit in opposition are not trivial so as to be ignored. Such issues would only be settled by the Plaintiff bringing in evidence at trial to prove their particular issue as to whether there was breach of contract or not. With regard to whether judgment on admission should be entered or not, | have seen that counsel for the Plaintiff is relying heavily on the letter and Facsimile transmittal sheet exhibited P33 and P34 as an admission respectively. Through my own perusal of the said documents, | am afraid, but | do not see any admission of the claim herein. | wish to strongly concur with the Defendant that the letter was merely a note to the Plaintiff explaining that even though they were claiming K15,000,000.00, however, their own records only supported about K10,000,000.00. The letter does not show that Defendant admitted owing the Plaintiff the sum of K15,000,000.00 let alone the sum 9 of K13,381,393.76 that the Plaintiff is now claiming. The copy of the Defendant’s proposed payment schedule attached to Exhibit P33 does not, in my view, show an admission of the claimed sum. Thus, | have not even found the matter herein necessary to fit in under Order 27 rule 3 of Rules of the Supreme Court as | have not seen any admission by the Defendant in tandem with the Plaintiff’s claims. In conclusion, | deem it necessary that | should proceed with caution so that justice is eventually attained fairly as the matter deserves. | take it that this is such a matter in which summary judgment let alone judgment on admission is not proper. This, in my considerable opinion, is a matter that should be referred to trial during which the Plaintiff’s evidence may be properly tested. | therefore proceed to dismiss the summons for summary judgment or judgment on admission herein on the grounds that the matter raises triable issues and there has not been any clear admission by the Defendant in any of the documents adduced as evidence before this court. The Plaintiff should presently subject this action to trial since it already past mandatory mediation. Costs to be in the cause. Pronounced in chambers this 30“ day of October 2013 at Zomba. / Nt es “G ve f Howard Pemba ASSISTANT REGISTRAR 10