Mtemadanga Farm Limited v Agricultural Development & Marketing Corporation (MSCA Civil Appeal 25 of 1988) [1988] MWSC 11 (13 October 1988)

AT BLANTYRE M. S. C. A. CIVIL APPEAL NO.25 OF 1988 (Being Civil Cause No.490 of 1988) BETWEEN: MIEMADANGA FARM LIMITED.......2.2cccccccccces soccccccece - APPLICANT - an - AGRICULTURAL DEVELOPMENT & MARKETING CORPORATION. ......- woe ccccscsececes oe aeercceccccece RESPONDENT Before: The Honourable Mr. Justice Kalaile Nyirenda, Counsel for the Applicant Pitman, Counsel for the Respondent Chigaru, Court Clerk a RULING On 8th September, 1988, Mtegha, J. gave a ruling in which he refused to grant an interlocutory injunction to Mtemadanga Fara Limited restraining the respondent from selling a farm imowm as Rathdrum Farm until after an action by the applicant for specific performance was determined at a full trial. As is to be expected there are now two hotly contested sides of the events as seen by the two parties. ‘The applicant deposed to the following facts through one of its directors, Mr. Clement Xarim Khembo. ‘that the applicant company was by an order by consent dated 17th June, 1988, and granted by the High Court required to give evidence of its ability to pay the balance of the purchase price (upon prior payment of the deposit) and not to appropriate any money to the use of the respondent. "urther, that the request by the respondent in the letter dated 30th June, 1958, issued by Messrs Sacranie, Gow and Comoany was unreasonable and unnecessary insofar as the Court order dated 17th June, 1988, was concerned. ‘The Court order was framed thus: “(a) ‘That the action in this matter be withdravm by mutual consent subject to both parties paying their own legal costs; (b) That the sale of Rathdrum Estate to the plain- tiff takes place on the following terms -~ (i) purchase price 350,000 for the land, buildings and fised assets; (ii) K60,000 for livestock: (iii) other miscellaneous items such as fer- tilizer and chemicals, etc. at a price to be agreed; (vi) oayment method: a) Non-refundable deposit of 30,760 to be paid within 14 days calcu- ced from the 17th June, 1689S: b) Within 30 days from the 17th June, 1988, the plaintiff will provide cocunentary evidence to the satis- faction of the defendant that the plaintifi has the necessary finance to pay the balance of the purchase price. ‘the balance of the pruchase price to be paid on the signing of a formal sale agreement. (v) Subject to Malawi Government consenting to the proposed sale under section 24(a) of the hand Act: (vi) Paysent of all legal costs to the account of the plaintiff.” Tt will be seen that the applicant considered the terms of the following letter from Sacranie, Gow and Canpany to be unreasonable. Before looking at the Sacranie letter, it is pertinent to point out that #reight tink (M) Linited is a company in which Mr. Khembo is a matority shareholder and sole signatory to the ban: account. At the material time Freight in’: had in its bank account the sum of K277,215.44, ‘The rescondent xequested the applicant “chat the monies to be provided shoulé be placed into an account with an irrevocable instruction to the bans that this money is not to be withdrawm”. ‘the money under reference was the sum of K277,215.44 woich was in Freight Lin'’s’s account. “he quoted statement is what the applicant found to be unreasonable and therefore unacceptable. According to the applicant, Messrs. Agason iotors “imited offered the applicant a loan in the sum of 4110.0C0.00 but because of certain misrepresentations made by ifr. John Pitman, the respondent's legal counsel in these proceedings, the loan fell throuch. Essentially, this was the stand on which the application for the grant of an incerin invunction was grounded. Het us now turn to the state of events as seen in the eves of the resoondent as deposed in the afficavits of ir. Joan Magombo, the General Manager of ADMARC and of iix. M. J. Moeta Phiri, as sell as tnat of Fsmail Pantwani. Mr, Magouso deposed to the facts that the anolicant furnished the respondent with Freight “in's's balance sheet as documentary evidence of the applicant's ability to pay the balance of the purchase orice. As a result, ie. Pitman wrote the applicant's counsel the following lecher: Of nee ses "30th June, 1988 T. C. Nyirenda & Co, P. O. Box 2420, BLANTYRE. Dear Six, PURCHASE OF RATHDRUM ESTALE We refer to your letter of the 29th June, 19828 and advise that our clients' instructions are that the copy bank statements and letters are not sufficient evidence of your clients' ability to pay the balance of the purchase price, They request that the monies to be provided should be placed into an account with an irrevocable instruction to the bank that this money is not to be withdrawn. At the present moment there is nothing stopping Freight fink (M) Limited from withdrawing the amount shown in the statement. In respect of the sale of tyres the proposed purchase to Ngolanga Wholesalers may not ever take place. We therefore await hearing from you in due course. Yours faithfully, J. Pitman for: SACRANTE, GOW & CO." The deposit was duly paid under cover of a letter dated Ist July, 1988. On 18th July, 1988, the applicant's legal counsel supplied further evidence of the applicant's ability to pay the balance of the purchase price by enclosing a letter from Agason Motors Limited in which a loan of K110.000 was offered to Mtemadanga Farm “Limited for the purchase of Rathdrum Estate. On 1Sth August, 1988, Mr. Panjwani of Agason Motors Limited wrote Sacranie, Gow & Co. with a copy to Mtemadanga Fama Limited indicating that the loan was no longer available to iitemadanga. Mr. M. J. Mpeta Phiri, an Assistant General Manager of ADMARC, deposed to the effect that Rathdrum Farm consists of 924.83 acres and is used mainly for growing burley anc flue-cured tobacco, maize and lastly has a dairy farm. That all farming activities except the dairy on the said farm stopped running when the farm closed operations by the end of July, 1988, in anticipation of signing a sale agreement between the parties to these proceedings. ‘That the respondent expected the purchaser to move in immediately and, consequently, the respondent has neither made any nursery preparation for cultivation of land nor made provision for soil conservation measures so that the land and farm ecuip- ment has remained idle throughout. Mr. Mpeta Phiri finally deposed to the fact that if an injunction were to be granted to the applicant restraining the respondent fron selling the said farm, then no other purchaser will be in a position to occupy the land and prepare it for cultivation until the following Afaocses season thereby causing irreparable damage to the farm which may not be compensated for in terms of damages. Mr. Panjwani's depositions were to the effect that he was only prepared to offer a loan to the applicant on condition that certain securities were made available to him. As these were not forthcoming, he withdrew the loan facility from the applicant. The first ground of appeal filed by the applicant is that the Honourable Judge erred in holding that there was no serious issue to be tried. Mr. Pitman took issue with this ground of appeal by pointing out that that was not the wording of the ruling by the Honourable Judge. Mcegha, J.'s Ruling states that: “In my considered opinion the applicant has not satisfied me that there is a triable issue, because non-compliance with the Order entitled the respondent to cancel the sale, and this the respondent did." The words cited above cannot, with due respect, be said to mean that "Shere is no serious issue to be tried'. Mr. Pitman argued before me that the position which the respondent toook before Mtegha, J. was that the application was frivolous and vexatious and that the applicant was using the court to delay the sale because he was unable to furnish proof of ability to pay the balance of the purchase price. Again, let us revert to the pertinent provision of the Court Order. It states: "(b) Within 30 days from the 17th June, 1988, the Plaintiff will provide evidence to the satisfaction of the Defendant that the Plaintiff has the necessary finance to pay the balance of the purchase price. The balance of the purchase price to be paid on the signing of a formal Sale Agreement.” To my mind the underlined words provide the key to the issues to be determined. Did the applicant furnish documentary evidence to the satisfaction of the respondent? I do not think so. In paragraph 3(a) of his affidavit, Mr. Khembo deposed that his company was only required to give evidence of its ability te pay the balance of the purchase price and not to appropriate any money to the use of the respondent. I respectifully disagree with that deposition. Mr. Pitman's letter of 30th June requested that “The monies to be provided should be placed into an account with an irrevocable instruction to the bank that this money is not to be withdraw". ‘That request is not an appropriation of the applicant's money to the use of the respondent. The request conveyed in Mr. Pitman's letter is a perfectly proper one in my considered view. If the freight Link account was under the sole control of ir. Khembo, why was it necessary to obtain assurances from Ngolanga Whole- salers or to borrow money from Agason Motors Fimited? Obviously the applicant knew that he did not have the ability to pay. In fact, T would go further than Mtegha, J. by holding that this application is frivolous and vexatious as was argued by Mr. Pitman. Tt is my view that this application is not made bona fide but is so made merely to delay the prososed sale. ‘this application falls within the definition of the expression ‘frivilous and vexatious’ as stated by Lush, J. at p.859 in Norman v. Mathews (1915) 85 L. J. K. B., 857. In that case, Mr. Justice Lush observed that: “There is an inherent power in every court to stay and dismiss actions or applications which are frivolous and vexatious and abusive of the process of the court e+eee In order to bring the case within the descrip- tion it is not sufficient merely to say that the plain- tiff has no cause of action. It must appear that his alleged cause of action is one, which on the face of it is clearly one which no reasonable person could pro- perly treat as bona fide, and contend that he had a grievance which he was entitled to bring before the court." The next ground of appeal was that the Judge having decided that he could not decide on the question of estoppel without evaluating the affidavits filed by the defendant, should have proceeded to grant an interlocutory injunction. Mr. Nyirenda did not supsport this ground of appeal with any argument or legal authority and for that reason alone, I see no merit in this particular ground of appeal. The third ground of appeal was that the Judge should not have decided on the sufficiency of proof of ability to pay the balance of the purchase price as by so doing he embarked on a trial of the issues. In the course of dealing with the first ground of appeal, I have indica- ted at some length why I am of the opinion that the respondent failed to comply with the Court Order dated 17th June, 1988. In any event, my stand is in consonance with quite ancient legal authority as stated by Megarry, J. in Woodford v. Smith (1970) 1 All E. R., 1091 at 1093 Megarry J. opined that: “Counsel for the defendants also read me a passage in the Supreme Court Practice 1970, which runs as follows - "It is not the practice of the Court (except by consent) to grant on an interlocutory application an injunction which will have the practical effect of granting the sole relief claimed (Dodd v. Amalgamated Marine Workers' Union). ‘this does not deter the court from granting such interlocutory injunction as ~ay be necessary to prepare property or prevent irreparable damage. ' When T ventured to assert that this did not represent the law, counsel for the defendants accepted that as being the case. I do not think that there is anything to pre- vent the court in a proper case from granting on motion substantially all the relief claimed in the action. It is true that in Dodd v. Amalgamated Marine Workers' Union it was said in the Court of Appeal that it was not the ‘usual practice’ or the *general rule of practice’ to grant on motion all the relief claimed in the action. But this language is general rather than absolute, the judgments are very brief, no reasons are given, and there have been later decisions. ‘Thus in Bailey (Malta) Ltd. v. Bailey, Lord Denning M. R. flatly said that it seemed SEED PT Pe we 2. OREO =o " : a oe to him that there was ‘no such rule.' In this, he based himself on what Sargant, L. J. had said in A. G. v. Stockton -~on-Tees Corpn., where there is what I may call a reasoned cemolition of the proposed rule, the basis of which seems to have been an objection to trying the same point twice over. In the Bailey case Harman, L. J. referred to the supposed rule as a theory which had in his view ‘long been exploded’: see also Heywood v. BDC Properties itd. and Booker v. James. I have ventured to refer to these autho- rities (which were not discussed before, since there was no need) because it is time that the passage in the Supreme Court Practice 1970 which T have read, received the firm touch of a revising hand". That passage, to my mind, squarely disposes of the third ground of appeal. The final ground of appeal orovided that the Judge erred in holding that the application was intended merely to delay the disposal of the farm. Again, in the course of dealing with the first ground of appeal I already held that the application was, indeed, intended merely to delay the disposal of the farm since Mr. Pitman has eloquently demonstrated the applicant's inability to pay the balance of the purchase price. That being so, I dismisss this application with costs to the respon- dents. MADE in Chambers this 13th day of October, 1988, at Blantyre. { \ \ : ; ir { KY ( Prd J. B. Kalaile : JUDGE oy