Agrivest Shipping Limited v Elite World Construction and Nyasulu (Commercial Case No. 381 of 2019) [2021] MWCommC 1 (28 October 2021)

IN THE HIGH COURT OF MALAWI (COMMERCIAL DIVISION) LILONGWE REGISTRY COMMERCIAL CASE NO. 381 OF 2019 AGRIVEST SHIPPING LIMITED ………………………CLAIMANT AND ELITE WORLD CONSTRUCTION …………………1ST DEFENDANT KAMPHINDA GOWA NYASULU……………………2ND DEFENDANT Coram: Hon. Justice Charlotte Wezi Mesikano Malonda Mr Kaphamtengo , of Counsel for the Claimant Mr Nkhata , of Counsel for the Respondent Mr. Nanga , Court Clerk RULING ON APPLICATION FOR SUMMARY JUDGMENT MESIKANO MALONDA , J 1. This is an Application by the Claimant for Summary Judgment, pursuant to Order 12 rule 23 of the Courts (High Court) (Civil Procedure) rules 2017, for the court to enter a Judgement for the Claimant without a hearing, fully discharging claims in the proceeding. 2. The application is supported by the sworn statement of Ms Samantha Bisset made on 27th April 2020. The application was further supported by Skeletal arguments and oral submissions. 3. The Defence opposed the application through oral arguments. 4. I will not repeat what is in the sworn statement. Analysis and Finding Page 1 of 5 6. It is settled in law that the purpose of the summary judgment procedure is to enable a plaintiff to obtain quick judgment where there is no bona fide defence to the claim. So, in order to obtain summary judgment herein the Plaintiff must show that the Defendant has no bona fide defence. By law, where the court is satisfied that valid arguable points of law and/or fact subsist, the court must deny the application for summary judgment (see Lenner Exports (Pty) Ltd v City Motors Ltd [1998] MLR 153). If a defendant shows that there is a bona fide defence or reasonable grounds for setting up a defence then the court must give him a chance to defend the action (see Alpine Enterprises v Sacranie [1994] MLR 15). 7. In the case of Duwa Mutharika and others v Francis Ndende t/a Francis Franklin & Company (MSCA Civil Appeal Nos. 63 of 2013 and 24 of 2014) the Supreme Court of Appeal reiterated that where a defendant raises a triable issue a court is enjoined not to enter such type of judgment. 8. Order 12 rule 25 (2), the court enters Summary Judgement: (2) ) Where the Court is satisfied that― (a) the defendant has no arguable defence to the claim or part of the claim as presented in the application; and (b) there is no need for a trial of the application or that part of the application, the Court shall― (i) give judgment for the applicant for the application or part of the application; and (ii) make any other order the Court deem appropriate. Rule 26 further provides that: The Court shall not enter summary judgment against a defendant where it is satisfied that there is a relevant dispute between the parties about a fact or an arguable question of law. 9. The current dispute relates to a contract between the Claimant, and the Defendant who was contracted to undertake some construction work. 10. The relevant market for this case is the construction market. Section 20(1) of the National Construction Industry Act provides that: Page 2 of 5 No person shall carry on business in the construction industry in Malawi unless he is registered under this Act. 11. The Claimant argues on several points of law in support for the entering of a Summary Judgement. 12. Most prominent is that the Defendant was not registered or licensed to carry out business in the construction industry in Malawi in light of Section 20 of the NCIA and they knew of this illegality at the time of entering the contract. The Claimant further avers in their Sworn statement that they became aware of this lack of registration through the Press release issued by the National Construction Industry Council on 21st November 2020 titled ‘Press Release, ELITE WORLD CONSTRUCTION’. The press release informs the general public that the 1st Defendant ‘has never been issued a licence…as such Elite World Construction is prohibited by law to carry on business in the Construction Industry in Malawi’. The claimant submits therefore that their contract with the was illegal and unenforceable. 13. Summary judgment can only be obtained where there is no reasonable doubt that a claimant is entitled to judgment and the Defendant does not have a bonafide defence. Because of this, the court pays particular attention to the Defence filed by the Defendant. 14. I have gone through the court record, and the Defence in particular. There is clearly an admission that the Defendant was enganged and actively undertaking construction work for the Claimant, and there is a counterclaim raised by the 1st Defendant arising from some altering of the contract which was done verbally at some point. 15. The Defendant submits that there are some factual issues regarding the payments made that cannot be resolved using affidavit evidence and that the illegality of the contract cannot be disposed of summarily and that it is a matter of legal interpretation. The Defendant insist that the dispute at hand is related to the amounts and this can only be disposed of fairly during a full trial. Page 3 of 5 16. I beg to differ because of the following reasons. The existence of the Contract is not in dispute and the Defendant has not offered any explanation to rebut their none registration or lack of licensing as required by law. The only explanation they have given is that ‘it depends how one interprets the law’. The Notice by NCIC exhibited as SB7, is clearly in black and white and its emphatic to the effect that it is against the law to award a construction contract to a person (s) not registered with the council. The Press release was relating to only the Defendant and no other contractor which shows how important it was to raise the attention of the public and warn about the Defendant’s conduct. 17. The Defendant has not traversed the allegation of illegality in his conduct. This to me, speaks to the gravity of the offence due to the Defendant’s conduct. The Defendant has not proffered any evidence that they disputed the public notice directly to NCIC nor the Claimant. This shows that they do know that they conducted themselves illegally during the period in question as they were not registered by NCIC. 18. Mtalimanja J, in Austin Banda V Stephen Aipira Commercial Case No. 28 Of 2015, added her voice to the issue of illegal contracts: ‘An agreement to do something that is illegal or immoral or contrary to public policy, or to do any act for a consideration that is illegal, immoral or contrary to public policy is unlawful and therefore void. Where parties have agreed to do something which is prohibited by an Act of Parliament, the contract is unenforceable by either party - see Winga v Southern Bottlers Ltd [1997] 1 MLR 373 (HC). I thus find that the agency agreement herein was illegal and therefore void ab initio. The plaintiff cannot recover the K2.8 million he charged as commission under the agreement. This court will not aid the plaintiff to enforce a contract formed and performed illegally, more so where the illegality is on his part’. 19. The court cannot validate any purported rights accruing from an illegal contract as this will be contrary to public policy which is aimed at protecting Page 4 of 5 the public and ensuring adherence to set professional and legal standards. If at all the Defendant performed this contract in full or in part, he did so illegally and no rights can accrue from such illegality. 20. In consideration of the material before me, I am of the considered view that the Defendant has not raised arguable points of law which necessitates a chance to defend the action. I am not convinced that there is a relevant dispute between the parties about a fact or an arguable question of law. The defence is merely to delay the case and reduce the amount that the Defendant has not accounted for which is subject under this claim. Consequently, out of an illegal contract, no rights will accrue. Conclusion 14. There is no triable issue in this case which warrants a trial. The Application for Summary Judgement is granted and Judgement is entered in favour of the Claimant with cost 15. It is further Ordered that Assessment be done by the Assistant Registrar. Made in Chambers this 28th Day of October, 2021 ……………………………………… Charlotte Wezi Mesikano Malonda JUDGE Page 5 of 5