Matenda v Commercial Bank of Malawi (Civil Cause 2409 of 1994) [1995] MWHCCiv 24 (13 March 1995)

. ----=--------------- ,- '" .. ~ IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY CIVIL CAUSE NO. 2409 OF 1994 COMMERCIAL BANK OF MALAWI - AND - CORAM: Tembo, Acting J Chizeze, of Counsel for the Plaintiff Sauti Phiri, of counsel for the Defendant Tsoka, Official Interpreter R U L I N G PLAINTIFF / is an application by This tt1e defendant to vacate an order of injuction wl1ich order was made by this court on 29th December, the affidavit of counsel 1994. for the defendant and there is no affidavit in opposition by the plaintiff. The application is supported by The grounds upon wl1ich are set out in the affidavit as follows: tt1e defendant has based his application "2 in if injuction I contend that it was incorrect on the plaintiff's part this matter on an exparte to obtain an In any case, summons since the matter was not urgent. for even the matter was urgent, injuction ought to have been made promptly. Indications are that the Plaintiff was aware of this development as early as October, 1994. (the plaintiff's fax message of 21 October 1994 is hereto annexed marked "M1"). She therefore ought soon thereafter. to have submitted her application so the application is obtained concerned, a prohibitory I contend that injuction in so far as "3 Further, and notwithstanding the contents of paragraph 2 1·1ereof, the plaintiff by paragraph (i) of the Injuction the has law of Defendant. contract are the case of breach of a negative gran t able only promise. the By the Defendant made Defendant is in breach, which is denied, the appropriate course of action available to the plaintiff is to seek inadequate, damages, specific i n s t i t u t e d a c l a i m f or p e r f o rm a n c e . An damages and in the alleged a positive promise ( if inadequate) specific performance. are they T 11 e p 1 a i n t i f f h a s against the injuctions for to sell. prohibitory sale, If agreement and if - 2 - (and award of damages indeed specific performance) would be a sufficient remedy. Besides, the Defendant has more the capacity to pay damages or comply with specific performance. The balance of convenience is consequently against the sustenance of this part of the injuction. than tt1an the Defendant who Paragraph (ii) of the Injuction requires the Defendant to deliver to the High Court all relevant documents of etitle. The plaintiff's statement of claim, however, does not state that the plaintiff has any better right to them is presently retainin them as its security for a charge duly registered. As aresult of the plaintiff's failur as aforesaid, it is difficult to imagine what right she seeks to protect by paragraph (ii) of the the Injuction. Injuction therefore fails to satisfy the requisite test for granting an Injuction i.e. that a Plaintiff must establish that he has a good arguable claim to a right he seeks to protect.". That part of no there was element of the order of such urgency presen t; the Court shou 1 d discharge During the hearing of the application, Counsel for the defendant submitted that in accordance with Order 29 rule 1 subrule 8, ex parte applications for an Order of an interlocutory injuction are only appropriate for cases of real urgency; that in the instant that, case i nj uct ion therefore, the under considertion. I accept the submission of counsel for defendant as representing a correct statement of the law on the point. However, as to whether indeed in the circumstances of the instant case the element of urgency was present or absent, it in my view, also depend on the view of the plaintiff as to would, the effect of the validity, and the implementation by the parties, of the contract the of sale plaintiff, the defendant had intended to advertise the property for sale after the defendant had communicated to the plaintiff a request for the plaintiff to accept a new, but much higher, purchase price than the one previously agreed to by both parties to the contract of sale. the to defendant expressly informed the plaintiff that if the defendant did not obtain to the new purchase price, the defendant will of course have no choice but to cancel the previous arrangement (by "arrangement" the defendant in fact meant "agreement."). The defendant concluded his communication by the following remark- that respect, Mr Chizeze, for the matter became urgent when the plaintiff's agreement in question. submitted In his communication the conduct of the plaintiff, the defendant respecting therefor, In that "It is difficult to imagine on what basis we could be to proceed with a transaction which is clearly compelled contrary to the law.". The purchase price agreed to by both parties was the defendant's proposed ' p chase price plaintiff has not agreed ·s ,.. K6_Zl>Q..,OOO. OO. new to ;;.,, K270,000.00 and the to which the Alarmed by "-..~( .tl\,: Coc_,~Ai'_-.... I • ··<"J ,-.. ,•,-> \.-- / ""-,,.{ ' t - 3 - llas resolved the defendant to cancel unless the Court for an negative attitude of the defendant to the agreement of sale , the plaintiff has issued a writ of summons by which the plaintiff is the contract, which mainly claiming specific performance of if the contract the the new purchase price now proposed by plaintiff accepts In aid of that claim, the plaintiff sough t an order defendant. of injuction, which was duly granted on 29th December, 1994, to subsist until the date for the final determination of the claim of the plaintiff for specific the defendant, performance. regard being had to all circumstances of the case which led the plaintiff to the making of an ex parte application for an order of injuction in question and further to the time when the order therefor was made, the defendant that the element of urgency was absent in the matter to justify my discharge of the injuction. Consequently, I decline to discharge the injuction in question on that ground. I would not agree with counsel Wi t11 due respect to counsel for interlocutory for for In support of paragraph 3 of his affidavit, counsel the defendant cited the case of Zambezi Packa~ing Ltd -v- Mpungulira He Trading Ltd Civil Cause No. 1963 of 1 94 contended in that regard that, as a writ had already been issued remedy of specific performance for specific performance, would suffice and further that an order for an interlocutory in that case, only have been allowed if the injuction would, to sel 1 the property to some other person defendant was about other the In other words, counsel defendant was saying that like in the Zambezi case the defendant in the instant case had simply remained idle about the contract of sale; that in such a case the order for injuction ought not to have been made at all in the first place, and finally, that the injuction should, therefore, be discharged now on that ground. the plaintiff. (unreported). than for the I remind myself of the fact that I am fully entitled to discharge the injuction if I indeed find that the order for injuction had been irregularly obtained by suppression of facts or that it was founded on an erroneous view of the law. As to the former ground for discharging an injuction, the defendant has not asserted or otherwise alleged that the plaintiff had irregularly obtained the injuction by the the suppression of material facts. defendant would like me to discharge the injuction on the ground that the same was founded on an erroneous view of the I proceed to examine the matter on the basis of that ground, if in fact I should thereupon discharge the injuction, in the light of the facts about the case and the law on that point. However, law. The conduct of To begin with, I would like to point out that the circumstances of this case are clearly distinguished from those of the Zambezi case. is the defendant dissimilar to that of the defendant in the lambezi case. In the Zambezi case, the defendant had merely chosen to do nothing about the contract of sale in consequence of which the plaintiff had applied for an injuction and not specific performance. Thus, in that case the substantive remedy sought by the plaintiff was an order for injuction to the effect that the defendant whether by i tse 1 f. or servants or agents or whomsoever be restrained from tl1at the defendant should remaining the premises and instant case in or on the in --,-- - - -- ~ - 4 - taken for an interim injuction It is clear, therefore, that the vacate the premises. On the basis of that action, a summons had been to restrain the defendant from remaining on the land. plaintiff in the Zambezi case had not opted for specific performance directly. On the basis of those facts, the decision of Honourable Acting Justice Mwaungulu was wel 1 founded on the authority of the cases of Whitwood Chemical Co. -v- Hardman 2 Ch. 4 1 6 ; Mort i mer - v - Be c k et t Tf9 2 O ) C h • 5 7 1 w h e r e i n i t w a s h e 1 d t h a t where a person seeks the observance of a positive contract, the is specific performance unless the remedy is not proper remedy available. In that regard Honourable Acting Justice Mwaungulu referred to a statement of Russell, J as follows: "Therefore, I should performance of contract is not negative. form and there is no ho 1 d , t 11 ere fore , that no a contract to that extent be granting specific for personal service. The It is, therefore, positive in independent negative stipulation .•• I i n j u ct i on ought to be granted • 11 • the Zambezi Case Honourable Acting Justice Mwaungulu further In stated the following: ''In the present case the contract has positive stipulations. If the plaintiff has failed in any of his The defendant agreed to sel 1 and deliver the property to the plaintiff. undertakings the plaintiff could at law sue for damages and at equity for specific performance •.. There is of course another line of authorities where, even though the contract is positive in form but is very clear, injuctions have been ordered to aid an action for specific performance. In all these cases, unlike here, the defendant has set out acting inconsistently with his obligations in the contract. When therefore, there courts have granted an to restrain the vendor injuction from dealing with the property, but again only where there is a clear contract.". is an action for specific performance, In that regard, I fully concur with my brother, Honourable Acting Justice Mwaungulu and also with Lord Justice Turner who, in the case of Hadley -v- London Bank of Scotland (1865) 3 De A J and S the equitable right of the~as1s on which M 63, 1nJuction would be granted, as follows: lafCJOown third person "I have always understood the rule of the Court to be that if there is a clear valid contract of sale, the Court will the vendor afterwards legal not permi t to transfer the estate third person would be a to affected by Lis pendens. I think this rule well founded in principle, for the property is in equity transfered to the purchaser by contracts, the vendor then becomes a trustee for him, and cannot be permitted to deal with the estate as In a case, therefore, where there is to inconvenience him. a clear undisputed contract the Court would in my opinion interefere.". such In the instant case there was a clear contract of sale and the - 5 - defendant had subsequently sought to act inconsistently with his obligations under that contract of sale, the effect of which would result in the inconvenience to the plaintiff in so far as the property was concerned, namely, failure to have the property conveyed to him as agreed between the parties. All these facts the affidavit of the plaintiff which had been filed e merge from in support of in question. the Paragraph 2 of that affidavit stated that an agreement had been their evidenced by agents, Trust Auctioneers and Estate Agents, and the plaintiff, which letters had been exhibited to that affidavit. From letter from the defendant to the Agent thereof, the exhibited as in defendant had principle as follows: letters exchanged between the apl ication for its approval of the defendants, transaction signified injuction 11 RMI 11 the "We ... confirm our agreement offer from Miss R Matenda .. to course, Matencla's for Society". application interested be ~~e will of course, in principle to the proposed in due the outcome of Miss New Building loan with learn a That was a reply to a letter from marked exhibit "RM2", whose material contents were as follows: the Agent to the defendant "I have received an offer for the above house from Miss Rose She proposes to pay Matenda K?0,000.00 cash deDosit and another K?0,000.00 in a month's time. The balance will be paid tlirough loan.". r" .. the sum of K270,000.00. in a further communication In exhibited as "RM3", from the defendant to the Agent, the defendant stated the following: " Y o u , h o 1-1 e v e r , a d v i s e d rn e t h a t , o n t h e s t r e n gt h o f my l· et t e r of acceptance to yo u dated 29th Ju 1 y 1994, ( 11 RMI" referred to above) you had already concluded an agreement with a prospective buyer who yesterday morning paid K?0,000.00 by cheque being deposit. The position therefore is that if a contract was already concluded, as appears to be the case, then the injuction came too late.". Finally in the letter of the defendant's Agent to the plaintiff marked "RM5" the plaintiff was notified of the sale of the property to her, the Agent wrote the following: in which "We write to confirm tl1at a house at above plot was sold to you at K270,000.00. You the New Building may proceed asking Society and we will appreciate if this exercise can be done as soon as possible.". You paid deposit of K?0,000.00. from for mortgage The foregoing would indeed give me the impression and a firm view that a contract of sale had been concluded between the plaintiff Indeed, such must be the case in the absence and the defendant. of Subsequent thereto, the defendant had sought to change the price agreed upon the by both parties as evidenced by the plaintiff's application, marked af fidavit any contention by letter exhibited in support of tt1e defendant to contrary. to a letter "RM7", material part is as follows: from a the defendant to the plaintiff whose - 6 - "The purchase price of K270,000.00 appears to have been based on a gross undervaluation of the subject plot. A subsequent independent valuation has confirmed the market value of the property at K640,000.00. We, as mortgages, are obliged in law to sell the property at a proper price. than K640,000.00. that Consequently, we communicated they should seek your agreement to a purchase price of no an less such agreement we will of course have no choice but cancel the It is difficult to imagine on what previous arrangement. basis we could be compelled to proceed with a transaction which is clearly contrary to the law.". If we do not obtain to Trust Auctioneers inconsistently with his obligations under I do not agree that With respect to Counsel for the defendant, the defendant simply stayed idle as was the case in the Zambezi It is clear that the defendant has sought to act, and has case. in fact acted, the contract of sale and further that in the instant case, unlike in the Zambezi case, the plaintiff had applied for an interlocutory injuction, not as a substantive remedy, but merely one in aid of a writ of those specific circumstances, the law is very clear that the Court may intervene injuction. by granting for Consequently, the injuction on the ground set out in paragraph 3 of the affidavit of counsel for the defendant. an I would, once again, decline interlocutory to discharge performance. application summons for In an In for in support thereof, to find that the grant of injuction, to paragraph 4 of his affidavit, Counsel the With regard defendant cited, the ruling of Honourable Justice Tambala in the case of Mrs Saonda -v- Mr Chikaonda Civil the main counsel had Cause No. 1374 of 1994 (unreRorted). in sought to impress on me respect of paragraph (ii) tl1ereof, had failed the req uisite test for granting injuctions, namely, that a plaintiff must establish that he has a good arguable claim to a right he seeks to protect. If only on the basis of my finding above that there was clearly established a contract of sale in the instant case, counsel's contention on that basis alone must fail. The • a _good u r % u a b I e ~ I a i '!1 11 o p er a t i v e e x p re s s i o n i n t h a t e applied 1n to the right he seeks to protect. The pr1nc1ple to applications been have authoritatively explained by Lord Diplock in the case of American Cyanamid Company-V-Ethicon Ltd (1975) AC p. 396, as follows: interlocutory injunctions to satisfy r e g a r d i s for "(a) that the plaintiff must establish that he has a to to the right he seeks good urguable claim protect; and (b) the court must not attempt to decide this claim on the plaintiff the affidavits, it is enough shows to be tried 11 is a serious question t here that if • - 7 - With respect to counsel for the defendant, it is my firm view that both these tests were satisfied on the affidavit evidence in the instant case ancl that indeed the balance of convenience had weighed in favour of the plaintiff's application for injunction. The order was not for the documents of title to be delivered to the plaintiff, but to the court, in order to maintain the status quo until the rights of the parties shall have been determined in the action commenced by the writ of summons of the plaintiff for In that respect, the Saonda Case does not specific performance. help the decision of Honourable Justice Tambala was clearly based on the ground that a grant of that case would have occasioned injustice to the respondent concerned and would therefore have been contrary to the principles of equity. Let me add that such a situation does not arise in the instant case. In the direct words of Honourahle Justice Tambala, the following was the basis of the decision in that case:- the defendant at all. injunction that case in an In the time the plot at lease was offered in occupation "Then it seems to me that the respondent was of the to the applicant. The fact that Blantyre City Council has offered him another plot to enable him to move out of the disputed plot would support that view. In that case the respondent may have certain rights against the City Council which may b e p r e j u cl i c e d I h a v e a i n j u n c t i o n feeling that the granting of the injunction represented by the the respondent. It would be contrary to the principles of equity to grant an injunction wt1ich would cause injustice". to is an equitable remedy. applicant would i s g r a n t e d . inj unction injustice serious cause t 11 e i f An Accordingly, entirety with costs. I dismiss the application of the defendant in its MADE in Chambers this 13th day of March, 1995, at Blantyre. ~~-v AK Tembo ACTING JUDGE