Mike Appel and Gatto Limited v General Motors South Africa (Pty) Limted (Civil Cause 498 of 2016) [2017] MWHC 112 (22 May 2017)

Mike Appel and Gatto Limited v General Motors South Africa (Pty) Limited Kenyatta Nyirenda, J. JUDICIARY IN THE HIGH COURT OF MALA WI PRINCIPAL REGISTRY CIVIL CAUSE NO 498 OF 2016 BETWEEN MIKE APPEL AND GATTO LIMITED ...................... .......... PLAINTIFF GENERAL MOTORS SOUTH AFRICA (PTY) LIMITED ..... DEFENDANT AND CORAM: THE HONOURABLE JUSTICE Mr. Mbeta, Mr. Jangale, Mr. 0. Chitatu, of Counsel, of Counsel, Court Clerk for the Plaintiff for the Defendant KENYATTA NYIRENDA Kenyatta Nyirenda, J. Introduction ORDER Then� are before the Court two the continuation the "Plaintiffs transferred as the "Defendant's of the injunction application"] applications. order it obtained The Plaintiff for an order for to as herein [hereinafter referred case seeks to have the present to referred of the High Court [hereinafter while the Defendant to the Commercial Division application"]. applies for Isuzu and Chevrolet motor vehicles in the said motor to deal with these the Defendants, the Dealer Sales and Service restrains The injunction executing however designated Malawi/outside whatsoever name of any purported Malawi any such motor vehicles order of the court. manner including appointed its servants, Agreement or whomsoever from agents or any dealership agreement in in Malawi in in the with any car dealer vehicles for the dealership into to be imported launching or advertising agent or importing pending the determination or causing of this matter or further Mike Appel and Gatto Limited v General Motors South Africa {Pty) Limited Kenyatta J. Nyirenda, The injunction way of originating shortly summons seeking after the Plaintiff the following had commenced against an action the Defendant: was granted orders by (a) a declaration that the Defendant's conduct in appointing another the Dealer dealer for Isuzu and Chevrolet terminating plaintiff illegal that the in that the Defendant Plaintiff Sales and Service on the same so could reply thereto within did not write the Plaintiff 30 days; motor vehicles Agreement in Malawi and (DSSA) with the is in breach of clause 4.5 ( c) of the DSSA and therefore (b)a declaration that the Defendant acted illegally and in breach of invoking 3 .2 of the DSSA clause without on the allegation Malawi Revenue Authority disrepute as alleged hence the said termination dealer is illegal another by terminating the dispute resolution that the Plaintiff's the DSSA with the Plaintiff the DSSA mechanism under by the allegations tax evasion had put the Defendant's in its letter of 29th March, 2016; of the DSSA and the appointment by the Defendant in reputation and be set aside; of ( c) a declaration that the Defendant ought to have further had recourse to 6 of DSSA to engage the Constructive clause which has 150 days timeline viability resorted appointment failing which the to;, hence the dealer of another is back to to ensure that the Plaintiff of the DSSA could have been of the DSSA and the termination said termination and be set aside; Engagement is illegal Process ( d) a declaration that Defendant failed to conduct in 'an open and obtain and fair manner and share responsibility input in the '3 of the DSSA decision making under clause before terminating and appointing dealer; of another hence the said termination and be set aside; as specified the DSSA with the Plaintiff business dealer process.' is illegal dealer another of the DSSA and the appointment ought to have reviewed the failure in that the Defendant of the Plaintiff ( e) a declaration performance provide termination said termination illegal and be set aside; under clause 9(7) of the DSSA and before to remedy the failure hence the dealer, is of another dealer another of the DSSA and the appointment of the DSSA and the appointing at least 3 months for the Plaintiff Mike Appel and Gatto Limited v General Motors South Africa (Pty) Limited Kenyatta J. Nyirenda, (f) an order setting appointment dealer of another and for the Malawi Market; aside the termination of the DSSA and the for Isuzu and Chevrolet motor vehicles (g) any order the Court may deem fit for the 'ubuntu' doctrine under the South African Constitution and other laws and policies. The Plaintiffs Application application The Plaintiffs Court (RSC) and it is supported the Plaintiffs affidavit"] Chief Executive is brought under Order 29 of the Rules of the Supreme by the affidavit Officer [hereinafter evidence referred of Mr. Nazeer Osman, to as the "Plaintiffs For reasons that part of the Plaintiffs that will become clear in a moment, affidavit that relates to facts only: it is necessary to set out in full "2. All matters of facts deponed to herein know to me as the Chief Executive same to be true to the best of my knowledge and information. are, unless Officer for the Plaintiff otherwise stated; personally the believe and I verily 3. The Plaintiff a dealer Vehicle to General has been for Isuzu Motor since 1970 under 1970 under Isuzu Japan and from 1994 under Delta Motor Corporation changed (GMSA) in 2003. Thus the Plaintiff has been an Isuzu dealer in Africa. I exhibit distributor Motor Corporafion/GMS agreement copies of the email correspondence dated 20th June, 202 and the current with GMSA marked NO 1 and NO 2 respectively. (Pty) Limited 46 years ruining and the oldest Isuzu with Delta A (in transition) Motor South Africa which ,then 4. Sometime in 2014, the Malawi Revenue Authority seized our books of accounts on investigations date. which have been on going to the present on or about 29th February, tax evasion alleged However, illegally Lilongwe publication levied and this was published by the Malawi Revenue distress Authority. and shut down our company in the Newspapers 2016, the Malawi Revenue Authority premises in Malawi as well as online in Limbe as well as 5. The Defendant got the news of the closure Malawi Revenue Authority through us suggesting the publication exhibit an online of the franchise the reputation 2016 marked N0.3. the termination dated th April, a copy of our letter had brought of our company premises by the wrote publication by 31st May, 2016 on account that I of the Defendant and subsequently into disrepute. 6 The Plaintiff letter to the Defendant's responded dated 8th April, circumstances and letter underlying exhibit 2016 in which we did explain regarding dated 8th April, 2016 marked N0.4. the closure a copy of our letter 29th March, 2016 through emails all the to the defendant of our company premises. I Mike Appel and Gatto Limited v General Motors South Africa (Pty) Limited Kenyatta J. Nyirenda, but instead, on rt July, 2016, Peter the Defendant's but also 7. The Defendant Leyland, all the MRA issues to act alongside the long impeccable cordial meeting appreciated the Plaintiff and he assured did not reply to our said letter Export Manager, asked if the Defendant which suggestion came to Malawi and discussed could appoint with us another dealer to in view of the Plaintiff objected This was a on Isuzu motor vehicles. dealership history our MRA predicament. us that the dealership was intact as the Defendant 8. As a way of appraising the Defendant 2016 I did send a copy of the Tax Clearance exhibit marked N0.5. of the Tax Clearance copies of the MRA issues, Certificate duly issued in August, by MRA. I sometime Certificate and the email to the Defendant on 29th August, 9. Surprisingly, that the Defendant renew the subsisting letter Defendant's contract dated 29th August, will appoint 2016, the Defendant another leadership with the Plaintiff. I exhibit wrote the Plaintiff in Malawi and will also not a copy of the 2016 marked N0.6. indicating 10. As required letter N0.7. dated 14th October, by the dealership, by our we lodged an appeal with the Defendant and marked 2016. A copy of the said letter is exhibited 11. Again to our surprise, the Defendant rejected the appeal by letter dated 19th October, marked No.8. 2016 and further advised a copy of the said letter is exhibited.and 12. The Plaintiff Dealer verily Sales and, Service Agreement (DSSA) as follows: believes that the Defendant's conduct is in clear breach of the 12.1 Under clause 4. 5 (C) of the DSSA, the Defendant in Malawi unless the Defendant dealer another same and the Plaintiff Instead, the Defendant communicated marked NO. 6 and N0.8 dealer has to reply within in letters 30 days. This was never done. of the appointn:zent of another on the writes the Plaintiff could not appoint 12.2 It is clear that there was a dispute between the Plaintiff that the MRA issue had put the Defendant's by the Defendant in their letter dated the Defendant ought to have envoked and the Defendant reputation in 29th March, clause on the allegation disrepute as alleged 2016 (N0.3). In that regard, 3.2 of the DSSA which was not done. 12. 3 The Defendant ought to have further to clause 6 of DSSA to had recourse Process engage the Constructive that the plaintiff to ensure of the DSSA could have been resorted to. is back to viability Engagement which has 150 days timeline failing which the termination 12. 4 Besides, has failed the Defendant manner and share responsibility making process. Constructive Engagement Process under clauses ' as specified 3 of the DSSA. Thus both the provisions and the Dispute resolution to conduct and obtain dealer in 'an open and fair input in the decision business Mike Appel and Gatto Limited v General Motors South Africa (Pty) Limited Kenyatta J. Nyirenda, were violated proceeded to appoint another dealer. and without the engagement of the Plaintiff, the Defendant 12.5 Under clause 9 (7) of the DSSA, the Defendant in performance failure remedy the failure. The defendant of the Plaintiff and provide did not do this as well. ought to have reviewed the at least 3 months to 13. The Plaintiff verily believes that the contract MRA issue was a force majeure without could not have based to terminate the for which the the invoking Defendant other remedial clause in the DSSA. 14. Furthermore, between the parties the contract due to the impeccable performance business of the Plaintiff over the 46 automatically years of dealership. vehicles market which is now being unfairly, Defendant's Thus the Plaintiff's and have built an enviable termination of the contract. dealership illegal inequitable reputation has been mainly Isuzu motor and goodwill compromised in the by the and wrongly was renewable almost believes that the illegal conduct of the Defendant further verily to compensation 15. The Plaintiff cannot be left 46 years difficult essentially the Plaintiff's will make good for such damage. make the Plaintiff existence to assess as not only is the damage to the goodwill of over is to conduct but the net effect of the Defendant's of shut down its operations. Thus the very essence and no amount of damages is being greatly undermined it is only fair and equitable that the Defendant for Isuzu and Chevrolet motor vehicles to deal in the said vehicles be restrained from agreement or any dealership with any other car in Malawi in whatsoever Agreement 16. In the premises, executing the Dealer Sales and Service desigiwted however dealer in Malawi/outside manner including purported any such motor vehicles. appointed launching or advertising for the dealership in the name of any agent or importing or causing to be imported into Malawi 16. The Plaintiff makes an undertaking that Court ought not to have granted an order of injunction that it has suffered damages, as may be asserted damages the Plaintiff by the Court ... " in the event it is later determined that the prove and the Defendant to pay the will be held responsible is opposed The Defendant opposition, sworn affidavit"]. of parity in full the substantive For purposes application by Mr. Elton Jangale [hereinafter referred to as the "Defendant's and it filed an affidavit to the Plaintiffs in of treatment and transparency, I will also set out part of the Defendant's affidavit. It reads: "2. THAT I have carefully gone through sworn by Mr. Nazeer Osman and all the exhibits that the matters in the Originating Summons and Affidavit It is thereto. to motor out of a commercial transaction relating attached arises support evident v General Mike Appel and Gatto Limited Mo.tors South Africa {Pty) Limited Kenyatta J. Nyirenda, s dealer sales and services dealership agreement between the Plaintiff and vehicle the Defendant. 3. THAT Exhibit entered Date"). NO 2 is the said Dealer Sales and Service Agreement covering a period from 1st January 2015 to 3F' December ("DSSA ") 2016 ("Expiry 4. THAT there is no evidence ended prematurely Date"). deponed prior to its expiry date of 3F' by the Plaintiff to show that the DSSA was December 2016 ("Expiry 5. THAT to the contrary, Exhibits to an end automatically on the Expiry Date. NO 6 and NO 8 show that the DSSA would come 6. THAT Exhibit NO 6, which is a letter dated 29 August 2016 from the Defendant to the Plaintiff, shows that the Defendant going to renew the DSSA 31 December to 31 December intention date. to the expiry 2016. As the DSSA was for a period covering.from 2016. This means that the Defendant advised not to renew the DSSA more than 90 days (to be precise, 123 days) prior the Plaintiff to an end on the Expiry that it was not Date on 1 January of its the Plaintiff when it formally comes informed 7. THAT Exhibit NO 8, which is a letter dated 19 October 2016.from the Defendant to the Plaintiff, would come to an end on the Expiry shows that the Defendant Date. echoed to the Plaintiff that the DSSA 8. THAT two(2) days before the DSSA came to an end on the Expiry Date, the [[ obtained an interim disclosing Plainti 2016, without claiming breach, terminated the DSSA. in its Affidavit particularl that the DSSA would end on the Expiry Date, but y at paragraph 18 that the Defendant had, in order of interlocutory in;unction on 291h December 9. In obtaining disclose 2016. December the order, the Plaintiff suppressed material facts by failing to the Court that the DSSA was yet to come to end automatically to on 3 F' WHEREFORE I humbly pray that this Court make an order discharging order of interlocutory facts to obtain on the ground that the Plaintiff " the injunction. injunction had suppressed the interim material I have set out all these relevant facts in extenso are involved in this matter. so as to show clearly the issues that that as far as an ex parte application is concerned, all the facts must be It is trite laid before the Court and fides on the part of the applicant: Commissioners, referred to as the "Kensington exp. Princess nothing must be suppressed. The Court requires uberrima see R. v. Kensington Income Tax Edmond De Polignac (1917] KB 486 [hereinafter Income Tax Commissioner Case"]. Mike Appel and Gatto Limited v General Motors South Africa (Pty) Limited Kenyatta J. Nyirenda, upon an affidavit which was not candid Income Tax Commissioners Case is that if an and The ratio decidendi of Kensington ex parte injunction has been granted did not fairly state the facts, but state them in such a way as to mislead and deceive and prevent the Court,there is power inherent in the Court, in order to protect on and even to refuse to proceed ah abuse of process, to discharge further with the examination see also Somanje v. Somanje, (Trading Chilamwa and Stumbles v. Vitsitsi 12 MLR 326, Vitsitsi Designated Communications Limited and Joy Radio Limited, HC/PR Judicial (unreported). as Sacranie, Gow and Company) [1987-89] [2002-2003] School Board [1995] 2 MLR 649(HC) and The State v. Malawi Radio Malawi the injuncti of the merits: Regulatory Authority, MLR 419 (SCA), Koreia v Review Cause No. 29 of 2011 ex-parte Capital itself case, it is clear from a perusal failed to disclose In the instant the Plaintiff inexplicably came to an end on its Expiry Date without Defendant. all persuaded that fact which should have been disclosed to the judge duri ng the ex-parte application. that the DSSA any breach on the part of the fact went unchallenged. was due to inadvertency. This was a material of the documents relevant the non-disclosure It is noteworthy before the Court that that this damning facts, namely, I am not at and in view of the conclusion that I have reached on the issue In the circumstances of suppression argued decision on the sole of material before me as being in anyway necessary any longer. ff suppressed materi facts, I do not see the consideration ground,that the Plainti al facts. of the other grounds I, accordingly, rest my d. The injunction All in all, the continuation of the injunction cannot be sustaine has, accordingly, to arged with costs. be disch I so order. The Defendant's Application This is an application to the Commercial Div by the Defendant d to the ision. The Plaintiff for a transfer is oppose of this case from this Division transfer of the case. by Counsel Jangale were The submissions clear from a perusal arises that this matter proceeded Jangale Division commercial with hearing of commercial matte He contended that it is Summons as well as the Plaintiffs relating 6A of the Courts of the Originating from a commercial that in terms of section and not the Civil Division of the High Court that is charged Affidavit to the DSSA. Counsel transaction concise and brief. to assert Act, it is the rs. To buttress his submissions, Counsel Jangale cited the case of Leonard Dickson Chiutsi v. National Bank of Malawi, HC/ PR Civil Cause 119 of 2016 Mike Appel and Gatto Limited v General Motors South Africa (Pty) Limited Kenyatta J. Nyirenda, rd November 2016) as authority for the proposition that the default must be commenced of such a matter the matter transferred. in the Commercial bears the burden of (unreported:3 is that a commercial position Division and a party resisting showing•compelling · The submissions the Plaintiffs Affidavit in Opposition order to quote in full the material parts thereof: matter the transfer for not having by Counsel reasons Khan more or less followed the "legal arguments" in to Transfer Matter and it might not be out of "4. that this matter's in the Commercial In as far as the matter is a commercial commenced Division believe Division clause is exhibited matter and should have ordinarily been I verily of the High Court of Malawi, Local have been Port Elizabeth with in accordance Agr eement a copy of which no. 10.3 of the GMSA Dealer Sales and Service of the High Court in the Republic of the Originating first court of call should as NO 2 in my Affidavit of South Africa in Support Summons. 5. because of the High Court in the Republic of the non-exclusive However, Division parties before which I verily herein, any court of competent the Plaintiff believe this Court is. of South Africa as agr eed by the was at liberty to commence the present proceedings similar jurisdiction to the said South African Court jurisdiction of the Port Elizabeth Local 6. Furthermore, clause laws in as far as the construction therefrom are the laws of the Republic of states of the said contract 10. 3 of the said Agreement clearly South Africa. that the applicable and disputes arising 7. that this matter is in the right forum in as far as the parties believe agr eed to submit competence l thus, verily clearly similar Republic of South Africa. to the laws of the Republic as the Port Elizabeth Local Division of South Africa and a court of of the High Court of the '8. there are no special circumstances advanced by the Defendant to Furthermore, warrant matter the transfer as envisaged of the matter from under clause 10. 3 of the said Agr eement. a Court that has competence to handle the 9. is already set for hearing has already filed its Affidavits that since the matter believe I further Summons and the Defendant Originating transfer Summons which I believe that the transfer Summons, the of the matter by filling documents is akin to pleading in opposition to the originating will delay the resolution of the matter. in Opposition of the Originating to the on the to the Originating but also process Defendant not only waived the right to insist it is in the interest In the premises, which has the competence Local Division quick disposal of justice to deal with the matter of the High Court of the Republic between of the dispute the parties " herein. that the matter be tried by this Court, just like the Port Elizabeth of South Africa and to ensure Mike Appel and Gatto Limited v General Motors South Africa (Pty) Limited Kenyatta J. Nyirenda, the grounds of this matter agree that the case concerns advanced to the Commercial Division a commercial for objecting Both and I find them wanting. matter. by the Plaintiff to the Section 2 of the Courts Act, 2016 [Act No. 23 of 2016], I have considered transfer parties Act, as amended defines a " commercial matter" a s follows: by the Courts (Amendment) ial matter" matter with any relationship means a civil of commercial or business significance arising contractual nature, of commercial whether out of or or governance of a business or commercial organization,· relationship of a business or commercial organization; commercial or business transactions; debts; of commercial up of companies or bankruptcy of persons; of commercial arbitration award,· judgments of commercial matters subject to the or exchange of goods and services; negotiable instruments, international credit and similar financial "commerc connected or not, including- ( a) the formation (b) the contractual (c) liabilities arising/ram (d) the restructuring or payment (e) the winding (f) the enforcement (g) the enforcement provisions or review of the law; of foreign (h) the supply (i) banking, services,· services,· 0) insurance or (k)the operation in the event of doubt as to whether of the action, or during the course of stock and foreign exchange markets, a matter is commercial shall have power to resolve the issue;" or not, the judge at the outset it is important when considering the definition by this Court in Chiutsi v. National Bank of Malawi to of "commercial matter" that fall within As was aptly observed supra, bear irt mind that paragraphs the phrase, matters "a civil matter of commercial relationship or business long as a civil case is of commercial with any relationship matter commercial of commercial under the Courts Act. (a) to (k) inclusive which is in the chapeau merely set out a few examples of of the definition, that is, arising significance nature, significance whether and it arises out of or connected with any or not". As contractual out of or connected it qualifies nature, as a of commercial or business It is clear from the evidence the case herein On the basis of the foregoing, so far before this Court that both parties that concede pertains to the DSSA and the same involves huge sums of money. there is no doubt in my mind that what we have here Mike Appel and Gatto Limited v General Motors South Africa (Pty) Limited Kenyatta Nyirenda, J. matter of commercial with a significance arising out of or connected of commercial or business nature. Whether or not a hearing of such a of South Africa could have taken place within or without the is a civil relationship matter Port Elizabeth Accordingly, it is m in the Republic Local Division of t he High Court is nei ther here or there. r. y finding that the case herein is a commercial matte In terms of section 6A of the Courts Act, it is the Commercial Division, and not this Court (Civil Division), that is charged with hearing premises, I, this matter has to be transferred accordingly, direct that the Plaintiff should have this case transferred to Commercial automatically Division within 14 days hereof, stand dismissed. to the Commercial failing which the action shall commercial matters. In the Division. Pronounced Malawi. in Chambers this 22nd day of May 2017 at Blantyre in the Republic of Kenyatta JUDGE Nyirenda 10