Far Stationery v Malawi Posts Corporation (44 of 2016) [2018] MWHC 1342 (24 October 2018)

RR % Wis ke eee EDN REPUBLIC OF MALAWI IN THE HIGH COURT OF MALAWI COMMERCIAL DIVISION BLANTYRE DISTRICT REGISTRY COMMERCIAL CASE NUMBER 44 OF 2016 BETWEEN: PAR STATIONERY. «.sucowursessevrnevservaperansoueseeersupamsa vee CLAIMANT AND MALAWI POSTS CORPORATION re eer ret DEFENDANT CORAM Honourable Justice Dr. M. C. Mtambo L. Gondwe,counsel for the Claimant. Kaduya/Masumbu, counsel for the Defendant. Makombe, official Interpreter - JUDGMENT The claimant is a firm that supplies stationery and the defendant is a corporation in the postal services industry. By a specially endorsed writ of summons, the claimant seeks from the court an order of specific performance or an order of injunction compelling the defendant to accept delivery of goods; or in the alternative, payment of a contract price in the sum of K166,3227,0850, interest on the principal sum, legal collection costs being 15°% of the sum claimed and costs of the action. The defendant denies the claim and asserts that it never entered into the contract alleged with the claimant. It is the claimant’s case that it received a telephone call from the defendant’s employee one, Mr. Chingwalu to provide a quotation for printing services. Subsequent to this telephone conversation, the defendant issued to it a Local Purchase Order (LPO) on the basis of which the claimant proceeded to print books. The printing job was sub contractedto Assemblies of God Printers. Upon being informed of the completion of the work, the defendant refused to take delivery of the books. It is the defendants’ case that its practice is thatcontracts of the magnitude of funds such as in this case are only done through a Request for Quotation (RFQ). It never issued the RFQ to the claimant. The LPOs tendered by the claimant did not originate from the defendant. They are forgeries. Mr. Chinewalu, the defendant’s employee who the claimant claims procured the alleged contract of supply of services from the claimant was a mete stores person whose job description did not include the order of goods on behalf of the defendant. There are two issues for the Court to determine. First, whether there was a contract between the claimant and the defendant for the printing of the books in question, and second, whether Mr. Chingwalu was an agent of the defendant having actual or ostensibleauthority from the defendant to deal with the claimant in the manner alleged. It needs no mention that the claimant bears the burden to prove that there existed a contract for printing services between it and the defendant and thats Mr. Chingwalu had actual or ostensible authority from the defendant to order the setvices from the defendant. A contract is an agreement between two or more patties which creates legal relationship between them. There are five essentials for the creation of a contract. The essential which is relevant to this matter is the existenceof an agreement. The two components of an agreement are offer and acceptance. ‘The issue of an agreement was discussed by this Court in the case of Chidanti-Malunga v Fintec Consultants (A Firm)and Another [2008] MLR (Com) 243 at 249 in the words: “for there to be a valid contract, one of the essentials is that there must be an agreement. The agreement is made of offer and acceptance. An offer is an expression of willingness by one person, the offeror to enter into a relationship with another person, the offeree with an intentionthat the relationship shall be bidding on the offeror as soon as the offer is accepted by the offeree ...” It important at this juncture to analyse the legal effect of an RFQ and anLPO. In the law of contract,an RFQ is an invitation to treat and an LPO is an offer. The otder of goods or services would constitute an acceptance. The claimant called one witness, Chimwemwe Mkandawire(CW1) and the defendant called two witnesses,Knox Makonyola (DW1) and Noel Fole (DW2). CW1 claimed that he received a RFQ from the defendant and sent them a quotation. However, he could not produce both documents. He did not know the specifications of the books that were to be printed such as colour, number of pages, and type of paper. He couldnot mention other persons he dealt with in the transactions in question apart from Mr. Chingwalu. He admitted that the stamps and signatures on the LPOs produced by the claimant in evidence were different from those on LPOs that had been issued before. He could not produce the letter he claimed to have received from the defendant to proceed with the printing of the books. Despite saying that the claimant had sub contracted the printing works to Assemblies of God to print the books, the witness could not produce the sub contract. He did not know its cost. On behalf of the defendant, DW1 testified that he at one time received a phone call from CW1 that they had finalised the order of printing books. He asked what this wasall about becausethe defendant had no knowledge of the transaction. Mr. Chingwalu was the defendants’ stores assistant and had no authority to place orders. Mr. Chingwalu was nowhere to be seen. The defendant submits that the requirement under the Public Procurement Act is that any procurement involving a sum of K5 million and above must be floated in the public media. This must be realised by means of open tendering proceedings, subject to exceptions provided in law as follows: “(8) The request for quotations method may be used for the procurement of — a) Readily available commercially standard goods not specially manufactured to the particular specifications of the procuring entity, when the estimated value of the procurement does not exceed the amount set by the regulation; b) Small works, when the estimated value of the procurement does not exceed the amount set by regulation; c) Routine service, when the estimated value of the procurement does not exceed the amount set by regulation. (9) Local request-for-quotations proceedings shall be used when the desired goods, construction or services ate ordinarily available from more than two sources in Malawi at competitive prices. (10) Public procurement by means of the single-source procurement method is permitted only in the following circumstances, namely- a) When the estimated value of the procurement does not exceed the amount set in the Regulation; b) 2.” DW2 testifiedthat Mr. Chingwalu’s duty was only to receive goods, not to order them. The court finds that the contract in question of a magnitude of over K166 million requited careful handling by the claimant. It required public procurement. The fact that the claimant may have been ignorant of this requirement is no excuse. The legal position is zgnorantis uris non excusat. The signature on the LPO produced by the claimant as evidence of an order having been made by the defendant was forged. A forgery is a nullity at law and does not confer rights on anyone (Rightprice Wholesalers v National Bank of Malawi, Commercial Case Number 242 of 2009). Therefore, the forged LPO does not bind the defendant. An agent is a person who has authority or capacity to act on behalf of another and bind that other in a contractual relationship with a third party. The maxim is gu fait per aliumfait per se. The evidence shows that Mr. Chingwalu had no actual authority to place an order on behalf of the defendant. His authority only extended to receipt of goods properly ordered not ordering anything.to be supplied. He could not have had ostensive authority as the claimant did not adduce evidence that he was held out by the defendant to have authority in excess of a mete receiver of goods. In the final analysis, the claimant has failed to discharge the burden of proof placed on it to establish that there was a contract between it and the defendant and that Mr. Chingwalu was an agent of the defendant in the claimed transaction. I therefore dismiss the claim with costs. Pronounced at Blantyre this. & td Nday of ne ag -— Dt. M. C. Mtambo , — JUDGE