Barloworld Equipment Limited and Mkaka Construction Company Limited (Civil Cause 534 of 2012) [2018] MWHC 26 (7 March 2018)

Barlow orld E quipm ent Lim ited v. M kaka Construction C om pany Lim ited K enyatta N yirenda, J. j H I G H c o u r t J C l Q R A R Y JUDICIARY IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY CIVIL CAUSE NO. 534 OF 2012 BETWEEN BARLOWORLD EQUIPMENT LIMITED................................ CLAIMANT AND MKAKA CONSTRUCTION COMPANY LIMITED.............. DEFENDANT CORAM: THE HONOURABLE JUSTICE KENYATTA NYIRENDA Mr. Chinangwa, of Counsel, for the Claimant Ms. Mbendera, of Counsel, for Defendant ______________________________ O R D E R ____________ _______ Kenyatta Nyirenda, J. This is this Court’ s ruling on a preliminary objection raised by the Defendant. A b rie f outline o f the background to this matter is as follow s. On 14th Decem ber 2012, the Claimant sued the Defendant for the sums o f U S$ 124, 167.18 (bein g K42,527,259.15) on the M achine Sales Account and K 10,577,403 on the Parts and Services Account, being the balance that remained due and payable. The Defendant paid part o f the amount and remained with a total balance o f K 2 3 ,115,189.73. The parties then executed a mediation agreement dated 17 June 2014 whereby the Defendant was ordered to pay the Claimant the sum o f US$97,125.00 in ten instalments beginning from the month o f M a y 2014 to February 2015. A s at October 2015, the balance was US$34,216.59. B y its application dated 27th A p ril 2016, the Defendant m oved the Court for an order to pay the debt then amounting to K 2 8,222,400.00 in tw elve months. The Court allow ed the application and ordered that the Defendant to pay the judgm ent l Barlow orld E quipm ent Lim ited v. M kaka C onstruction C om pany Lim ited K enyatta N yirenda, J. debt in tw elve monthly instalments [Hereinafter referred to as the “ Payment Schedule” ] as follow s: 1st month - K 1,000,000.00 2nd month - K 3 ,200,000.00 3rd month - K 2 ,500,000.00 4th month - K 2 ,500,000.00 5th month - K 2 ,500,000.00 6th month - K 2 ,500,000.00 7th month - K 2 ,500,000.00 8th month - K 2 ,500,000.00 9th month - K 2 ,500,000.00 10th month - K 2 ,500,000.00 11th month - K 2 ,500,000.00 12th month - K 1,522,400.00 On 3rd N ovem ber 2017, the Claimant filed with the Court an application, made under s. 16(1) o f the Courts A c t as read with Order 30, rule 5, o f the Courts (H igh Court) (C iv il Procedure) Rules (C P R ) for an order o f comm ittal o f the D efendant’ s M anaging Director to prison fo r contempt o f court. Th e application is supported by a sworn statement o f M r. A lexiu s Ernest Nam pota [Hereinafter referred to as the “ Claimant’ s statement” ]. It is the case o f the Claimant that the Defendant is in contempt o f court in that it has defaulted on the last three monthly instalments. This is to be found in paragraphs 9 to 16 o f the Claim ant’ s statement and these paragraphs read as follow s: “9. THAT the defendant made several payments in com pliance with the order, and the last time the defendant made payment was on the 11th August 2017. 10. T H A T the said payment was made through a cheque num ber 003870. Now p ro d u ce d to me is a copy o f the cheque m arked as A E N 2 11. 12. T H A T the payment in paragraph 8 above is the 9th m onthly instalment under the order. T H A T the 10th M on th ly paym ent was due on the 30th Septem ber 2017 whereas the 11 ’ m onthly paym ent was due on the 31st O cto b e r 2017, under the ord er on the paym ent by instalment made by this court. Barlow orld E quipm ent Lim ited v. M ka k a C onstruction C om pany Lim ited K enyatta N yirenda, J. 13. T H A T the defendant has deliberately decided to ig n ore the o rd er made under its own p ra y er by deliberately deciding not to h on ou r the o rd er by rem ittin g the 10th and 11th months payments when the same were due. 14. T H A T I verily believe that there is no oth er reason f o r the defendants’ contemptuous, deliberate and fra g ra n t defiance o f the C ou rt ord er than to deliberately defeat the adm inistration o f ju stice, taking into a ccou nt that this paym ent scheme was p rop osed by themselves. 15. T H A T this contemptuous, deliberate and fra g ra n t defiance o f the co u rt ord er is also manifested in the fa c t that this is the second time d isrega rd in g an ord er o f the co u rt fo llo w in g their disobedience o f the m ediation agreem ent issued by the court. 16. T H A T I verily believe that this is a clea r act o f contem pt o f co u rt authority on the p a rt o f the defendant. 17. T H A T I therefore verily believe that it w ill serve the best interests o fju s tic e i f an o rd e r is gra n ted com m ittin g the defendant’s M a n a g in g D ir e c to r to p ris on f o r a p e rio d o f 6 weeks o r such other p e rio d as the c o u rt may deem fit. ” Hearing o f the application was set for 29th January 2018. M ean w hile, on 26th January 2018, the Defendant filed with the Court a N o tice o f Prelim inary Issue. The preliminary issue is w orded thus: “ Whether the respondent is indebted to the claim ant in view o f the fa c t that the total debt as p e r the schedule o f m onthly instalments included s h e rifffee s which were already p a id directly to the S h e riff o f M a la w i” The Defendant’ s Finance M anager, Mr. Gospel Mavutula, filed a sworn statement dated 26th January 2018 in support o f the preliminary issue [H ereinafter referred to as the “ Defendant’ s statement” ]. The Defendant’ s statement is couched in the fo llo w in g terms: “4. T H A T with reference to p a ragraph 3 above, as p e r the m onthly instalments, the total am ounted to M K28, 222,400.00. H ow ever the cla im a n t’s claim was f o r M K22, 229,149.86. 5. T H A T the said schedule o f installments as p e r pa ra gra p h 3 above inadvertently included s h e riff fees since at the time, the sheriffs had levied executed on the respondent. The said schedule had e a rlier been presented to the sheriffs but was rejected. Barlow orld E quipm ent Lim ited v. M ka k a Construction C om pany Lim ited K enyatta N yirenda, J. 6. T H A T the s h e riff fees were therefore p a id by the respondent d irectly to the sheriffs at which p o in t the same ought to have been deducted f r o m the schedule o f m onthly instalments. 7. T H A T further to the paragraphs 5 and 6 above, the said schedule was the one that was inadvertently presented before the c o u rt in the applica tion to settle the debt through instalments. There is now p ro d u ce d and exhibited hereto a copy o f the acknow ledgement o f receip t by the s h e riff o f M a la w i the sum o f M K3, 454,371.80 m arked “ G M 1 ” 8. T H A T i f we are to deduct the said sum o f M K 3 ,454,271.80 fro m M K 2 8 ,222,400.00 we w ould rem ain with M K 2 4 ,768,028.20 9. T H A T to date the respondent has so f a r settled the sum o f M K 24, 200,000.00 which sum includes the 10th installments. There is now p ro d u ce d and exhibited hereto a copy o f the instalments summary status m arked “ G M 2 ” 10. T H A T in lig h t o f the p re ced in g paragraphs, it is cle a r that the respondent has so f a r settled m onthly instalments in excess o f the cla im ed sum o fM K 2 2 , 229,149.86 11. T H A T in lig h t o f the fo re g o in g , the fo llo w in g fa cts are cle a r and unequivocal; 11.1 The schedule o f m onthly instalments inadvertently included s h e riff fees in sum o f M K 3, 454,371.80 which sum was p a id d irectly to the sheriffs; 11.2 The respondent has dem onstrated that it has been settlin g the m onthly instalments which total amount now stands at MK24,200,000.00; 11.3 The instalments settled by the respondent are in excess o f the cla im a n t’s claim ed fig u re o fM K 2 2 , 229,149.86; ” The Claimant filed a supplementary sworn statement dated 31st January 2018 in which it denies that the judgem ent debt included sh eriff fees. The principle purposes o f the law o f contempt o f court is to preserve an efficient and impartial system o f justice, to maintain public confidence in the administration o f justice as administered by the courts, and to guarantee untrammeled access to the courts by potential litigants. A contempt o f court is an offen ce o f a criminal character. A man m ay be sent to prison for it: see Order 30, r.17, o f C PR , Mpinganjira v. Lemani and Another [2000-2001] MLR 295, Knight v. Clifton [1971] Ch. D 700 and Re Bramble Ltd [1970] Ch. 128. It is, therefore, necessary that before an alleged contemnor is committed, the Court must be satisfied that the default in payment o f the outstanding monthly instalments was deliberate and w illfu l defiance o f the Order. Barlow orld E q uipm ent Lim ited v. M ka k a C onstruction C om pany Lim ited K enyatta N yirenda, J. H avin g review ed the a ffid avit evidence in this case and having considered the submission by Counsel on b eh alf o f their respective clients, I entertain great doubts that the default was contemptuous. It is not uninteresting to note that the Defendant religiou sly com plied with the Order: it only stopped making payments after the sum o f K24,200,000.00 had been settled. The Defendant believes, on good grounds, that the Schedule o f Payments included sh eriff fees. In the premises, and having regard to the foregoin g, it is ordered that the parties should carry out join t calculations with a v ie w o f finding out whether or not the Schedule o f Payments included sh eriff fees. It is ordered that the jo in t calculations be done within 7 days hereof. In the event that it is found that the Schedule o f Payments did not include sh eriff fees and proceeding on the basis that the Defendant has so far settled the sum o f K24,200,000.00, then the Defendant shall pay the outstanding debt (K 4 ,022,400.00) in tw o monthly instalments, with the 1st instalment in the sum o f K 2 ,500,000.00 being paid not later 31st M arch 2018 and the 2nd instalment in the sum o f K l , 522,400.00 being paid not later than 30th A p ril 2018. Pronounced in Chambers this 7th day o f M arch 2018 at Blantyre in the Republic o f M alaw i. Kenyatta Nyirenda JUDGE 5