Norse Interantional Ltd v Malawi Housing Corporation (Civil Cause 1474 of 1994) [1996] MWHCCiv 1 (3 April 1996)

~-· - - -- -- - - - - -- ·- --·-------------- - IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY CIVIL CAUSE NUMBER 1474 OF 1994 BETWE EN: NOR SE INTERNATION AL LIMITED ... ........ ... ..... ...... ... PLAIN TIFF and MAL AWI HOUSING CORPORATION ..... ... ....... .. ...... DEF END ANT Coram : r ••-·• RULING The plaintiff and defendant entered into a contract; the plaintiffs were to build ac ce ss roads on the defendants housing estate in Zomba. By the tenns of contract which were properly documented 1 the plaintiff was to be paid 50% in local currency and 50% in foreign currency of the pla intiffs choice at a bank elected by the plaintiff. The plaintiff elected to be paid the foreig n component in Deutchrnark at a bank in the Channel Islands . It came out in the course of the evidence that the defendant was to pay 5% of the local compone nt and 45% was to be paid by Malaw i Governm ent through a loa n se cured with an international donor : the Internatio nal Development Aid (IOA). The pla in tiff contended that they produced certificates forpaym ent and of these certific ates 8 and 9 foreign components were not paid. The plaintiff '21 .... , - 2 - the refore claim ed the principle and interest.payable thet~eon at.agree d 1/2 above basic le nding rate ruling in Malawi. The plaintiff further c la imed intere st on the local component of K28,176.47 which was paid late : from 21 October 1993 to 13 April 1994 and further KBS.15 being shortfa ll in the principle paym ent The defend ant on the other hand claimed that all payments were duly pa id save certificate No . 5 and certificate No. 8 on the foreign com pon ent. It contended that certificate No. 9 was pa id to the p laintiff although it wa s wrongly paid into the local account Th is wa s the gistofthe parties 'case . Th e parties argued and acknowledged part of the shortfall in the principle was due to ba nk char·ges and that the contractdid notstipulate who was to bear the ba nk charges. I had examined the contract docum ents and I noted tha t a lthough it makes provision for special risks : clause 65, this does no t include bank charges. It only refers to civil disturba nces and co vers rem ov al of plant However, looking atclause 60:1(iii) on e gets the impression th at what could be raised in the certificate was lim ited and co u Id not cov er bank charges. The parties therefore were precluded by tha t cla use from raising charges of this sort in the certificate. In this reg ard therefore) I would agree with DW1 that the plaintiff should have raise d th is in their preliminary and general items. I am further of the view tha t from th e "Instruction to tenders strict liability terms", item 4 ca ters for "do ubt and obscurity" to be referred to the engineer "10 days before the 3/ .. '" - 3 - date fix ed for de livery of th e Tende,~er". The p la intiffJ if it was so m indedJ co uld hav e done so. For these reasons therefore 1 I decline to award damage s in fo rm of shortfall due to bank charges . Having come to this I gr-ant that by clause 69(1) of the co ntract) the plaintiff was e ntitled to payment of intereston all overdue ac counts . From the evidence ) there is no dispute that K28 1176.74 was paid la te and that th e pla in tiff is entitled to acc ordi ng to schedule 3 of the plaintiff which I find to be in order) I grant interest thereon at 1 /2% above basic rate the p la intiff K3J399.70 interest on this . Further on the evide nce I find that there is no dispute on the non-payment of DM9 J022. On certificate No . 8 I award the plaintiff the princ iple so c laimed plus interest at DM3 1 378 .36. The interest rate would be at the fixed contrac t rate of exchange. There wa s co ntroversy ab outpaymentofcertificate No. 9. !t is however c lear from the evid ence th at this money was paid in local curre ncy in the local ba nk . The defendant treated this as an overpaymentand so notified the plaintiff as per PEX 2s last two docum e nts . The defendant claim that this sho uld be treated as a payment since Malawi Governm ent notified th em that th is was pa id : the defendant produced DEX1 to es tablish this. T he complic ation here is that the,-e is a third party involved and there seems to l1a ve be e n no meeting of minds between the pla intiff and the defenda nt I note that the plaintiff in their submission claim that the paymen t into the loca l ac co unt should be treated as a breach of the 4/ .. . " -- 4 - con tract term s . While this would be so, it would not have entitle d the plaintiff to appropriate the money to other uses . They would only be entitled to damages for brea ch. I have exam ined the last document in PEX 2 which outlines the defenda nts liability on interest - I note that there was some r correspo ndenc e between the parties before this letter. It is d ifficult therefore for o ne to say whether the blame should lie on the defen dant or the plain tiff. I have looked at the credit notification in PEX 2 on the payme nt of K3 5J565 .98 it clearly shows that this was payment for the OM portion of certificate No . 9. The plaintjfftherefore carry the blame for this. They ca nno t now turn around to claim benefitofnotbeing paid an d claim interest It is my finding that although the plaintiff could claim damages for the defe ndants agents mistake in paying into the wrong acco unt, the money was pa id - they detained it instead of correcting the error. I find in my judgm e nt therefore that the plaintiffs are only entitJed to recover K28J28 4.70 o n the local cun-ency portion of payment, when we take out whattJ7e y cred ited to themselves) plus interest thereon atK10/59 1.47 and I so award. I have looked at clause 67 ofthe coniracton submission to arbitra tion and I am of the vie w that it is applicable in the present case . There has been no argum en t advanced against the application of this clause by the plaintiff. For this reason I order tJ1ateach pat-ty to bear its own costs . 5/" " ' - 5 - Prono unced in chambers tnis 3rd- ay of April, 1996) at Bla nfyre. I - E.~ . fwea REGISTRAR