Msowoya v Malawi Entrepreneurs Development Institute (MEDI) (Civil Cause 80 of 1993) [1997] MWHCCiv 14 (8 January 1997)

IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY CIVIL CAUSE NO 80 OF 1993 BETWEEN S. B. D. MSOWOYA (Male) . . . . . . . . . . . . . . . . . . . . PLAINTIFF and MALAWI ENTREPRENEURS DEVELOPMENT INSTITUTE {MEDI) ... DEFENDANT CORAM: CHIMASULA PHIRI J. Temwa Nyirenda of Counsel for the Plaintiff Dzoole of Counsel for the Defendant Ntondeza Official Interpreter Katunga (Mrs) Recording officer JUDGMENT The Plaintiff's claim is for damages for conversion and loss of use of his motor vehicle registration number MZ 1223. The claim arises from the repossession of the said motor vehicle by the defendant on the 2nd September, 1992. Further or in the alternative the plaintiff's claim arises from the sale of the said motor vehicle to a third party by the defendant by 5th December, 1992. The plaintiff alleges that he was at all the material times the owner of the motor vehicle and that it was sold without his knowledge or consent. The defendant denies having converted the plaintiff's motor vehicle and states that at the material time it was the real owner of the said vehicle while the plaintiff was merely a nominal and titular owner in terms of the registration book. The defendant has further pleaded that in the alternative that if it was not the real owner, it had a lien in the vehicle. The defendant also pleads the defence of set off alleging that the plaintiff owed it a sum of K16,099.39 and that this sum remains unpaid to date and hence counter-claims the same. The parties agreed in their submissions '-f lGH COUHT L'BRft,RY that the issues for determination are basically whether there was conversion of motor vehicle registration number MZ 1223 and secondly whether the defendant has proved its counterclaim. He tender and was offered to purchase The plaintiff was employed as an accountant by the defendant remained in the employment of the on 1st August 1990. defendant until 31st August 1992 when he resigned. On 27th February, 1992 there was offer to sale a Peugeot registration number 45 SC 09 by tender. The plaintiff successfully bid for this this vehicle for He applied for a motor vehicle advance from the K9, 000. 00. The principal of MEDI approved the motor vehicle defendant. advance on 5th March, 1992 and an invoice number 995 dated 11th May, 1992 for K9, 000. 00 was raised. The defendant gave the plaintiff a letter for change of ownership. The plaintiff had ownership changed from MEDI registered from 45 SC 09 to MZ 1223. Arrangement was made that the defendant would deduct from the plaintiff's monthly salary and credit such sums to the plaintiff's motor vehicle advance account. The monthly deduction was supposed to be K200.00. The plaintiff alleges that he paid for 7 months before he resigned. On his resignation the plaintiff trekked yet to another company, and this time it was Constantini and Brothers. On 2nd September, 1992 some officials from MEDI followed him there and demanded payment of balance on the motor vehicle and other loans by 4th September, 1992. These officials had instructions from the defendant to get the keys and the motor vehicle until the loan was paid. These officials took the vehicle to the defendant's premises in Mponela. to himself and the vehicle re There are two pertinent letters written by the defendant dated 1st and 10th September, 1992. In the earlier letter the defendant points to the plaintiff outstanding financial issue relating to the plaintiff's duties specifically underbanked sums totalling K13, 226. 35. In the letter of 10th September the defendant submitted a revised claim and this is split in two portions. The first part relates to debts discovered after audit investigation and totals Kl, 607.66 and the second part relates to other accounts in terms of management records of the defendant institute totalling Kl5, 010. 68. The grand total is shown as K28,237.03. On 21st September, the plaintiff went to MEDI and he paid Kl,607. 66 on receipt number 2246A dated 21st September The plaintiff says this payment was in respect of all 1992. loans except the Vice Principal refused to accept. The plaintiff states that by then the vehicle had already been sold by the defendant to a third party and that it was sold without his consent or approval. The plaintiff has denied the counter-claim. The plaintiff's denial is based on his understanding that the total deductions on the car loan as at end of August were Kl,075.65 and further that on the car insurance loan the deduction was K756. 24. Therefore, the car loan could not be KS,375.00. Secondly, on repossession of the vehicle the defendant should have cancelled the comprehensive insurance policy. He denies that he owes the defendant K4, 872. 00 loan, which he alleges, the vehicle f o r for insurance the plaintiff wrote the salary deductions for for noti ce pay o n the ground that he had accrued leave of 3 months a nd t his set off that claim. The plaintiff denies that there are any outstand ing debts because money which was released Insurance Company on his pension b enefi ts was from Nat iona l It is also worth not ing that on utilised to c lear these d e bts. 9th November, 1992 the defendant indicati n g the car loan and its The plaintiff admits outstanding balance of insurance c over. The plaintiff in that letter K744. 56 requested the defend ant to refund Kl, 831 . 8 9 being car loan deduction and car i nsuranc e deductions . The plainti ff indicated that on r eceipt of tha t s um he would arrange to change ownership of the ve h icl e . On 2nd December , 1992 the defendan t wrote the plaintif f h igh lighting the fact that the plaintiff had gone on leave henc e, no issue of accrued leave to cover t he issue of three mont hs no ti c e a nd secondly that the deductions for the car loan and i nsuranc e would be off set towards the pla intiff's use of the c ar fo r that period . Thirdly , the letter indicated hope that the p ension be n efits would clear the other loans . The pension re fu nd remi t ted to MEDI on 11th January, 1993 was actually Kl,0 85.56 . loan. The def endant by its pleadings has particu larised counter- c l aim as follows : - the ( i) (ii) (iii) (iv) Bal a n c e o n motor vehicle adv ance .... . ... 9,250.38 Car I n surance advance . . . . ... ... . ... . ... 1,517.05 Eme r gencyadvances .. . . . .. . ...... . ..... . . 1,691.61 Sal ary advan ce . .. .. . .. . . . . .... ... ..... . . 300.00 Le s s Monthly deductions ... . . . .... ....... 2,857.82 Balance 9,901.22 (v) (vi) Monies irregularly obtained ... .. . . Three months salary in lieu of notic e .. 1,607.66 4,590.51 16,099.39 invoice raised against the plaintiff for Exhibit D15 is a n purchase o f moto r v ehicle at K9,000 . 00. It is dat ed 11th May, 1992. Exhibi t Dll c l early states that the motor ve hicle advance would be at 1 0 % int e re st rate per year and repayme nt would be in 72 mont hs and that the monthly repayment would be K200.00. This is the pl aint iff 's own letter to the defendant . In Exhibit D2 which is a not her let t er f rom the plaintiff, he shows a breakdown of his r epayment s from March, 1992 to August 199 2 some of which were K12 5 .00 ins te a d of K2 0 0 . 00. The total is put at Kl,075.65. I find as a fact that t h e plaintiff had not paid the K9,000.00 plus int e rest to MEDI at the time of his resignati on. Se condly on the insurance claim of Kl , 517 . 05. I would also refer the pl aintiff's own letter acknowledging indebtedness of K744.56 o n t he insurance loan. However, this does n ot take into account inte rest that accrued. On the e mergency advances that plaintiff in hi s own letter of 4th November , 1 992 acknowledges that he had outstanding advances and loans although he was not sure of t he extent of those d ebts. The plaintiff assigned his pension benefits estimated at Kl, 6 0 0 . 00 to cover those debts. As has already been seen, NICO remitted Kl, 085 . 56 only. There is no indi c ation that this has be en d e ducted in the defendant's count er-claim of I f that is done it would leave the defendant's claim Kl,691.61 . at K606. 05 f or emergency advances. The defendant has to prove this. S imilarly the defendant claims Kl,607.66 which appears to have b een paid under receipt number 2246A of 21 st September 1992. The re ceipt clearly states that it is a" payment for the outstanding a ccount government auditors". Therefore, I find as a fact t hat t his claim of Kl,607.66 cannot be supported. The issue of three months notice pay featured prominently in the evidence of both parties. It is not in dispute that the plaintiff or the defendant were supposed to give each other a three months notice on resignation or termination of services respective ly. The plaintiff argued that he had acc rued leave of three mont hs because according to his terms of employment he was entitled t o 3 0 days leave per annum. He contended t hat from 1st August 1 99 0 u p to 31st August 1992 he never went on l eave because management of the defendant institute wanted him to be at work. The plaint iff submits that the days of his leave s hould be off set to hi s notice pay. The defendant denies that t he plaintiff had any acc rued leave days and that even if he had such accrued leave, t hey would only add to 60 days i.e . from August 1990 to 31st July 199 1 - 30 days and from 1st August, 1991 t o 31st July, 1992 -30 d ays. The plaintiff wrote on 8th May, 1992 to the Principa l confirming the principal's verbal instruc tions on 7th the plaint iff should go on leave from 7th May, May, 1992 that 1992 to 1 8 th August, 1992 i.e 72 days. This is e xhibit D14. The princ ipal in his evidence clearly stated that when the plaintiff went on leave he never resumed h i s duti es until he He only reported for duties as and when he was resigned. required t o r espond to querries . I would pre f er the defendant's evidence on t his issue and find that the plaintiff n ever had any accrued l e ave days . As such the defendant would be entitled to notice pay equivalent to three months salary. I would now revert to the main issue. Firstly, the claim for conve r sion. Convers i on is dealing with goods in a manner inconsist e nt with the right of the true owner , provided there is an intent i on on the part of the person so dea l ing wi th the goods to negativ e the right of the owner to assert a right inconsistent therewith . MacNicole (19 19) 8 8 LJKB 601. This has been put in simple terms Lancashire and Yorkshire Rai lways -vs- See I n -Vs- 19 92. loan s. Freebody the vehicle . the case of Tear in the case o f Chitungu and Chiutsi -Vs- Napolo Ukana Breweries Limited, Civ i l Cause No 601 of 1992 High Court (unreported ) where Mtegha J sa id "Conversion is an act of wilful interference with any c hat tel i n a manner inconsistent with the right of another without l aw fu l justification, whereby that other is depr ived of the use and p ossession of the chattel". On 2nd Septembe r, 1992 when the te a m of officials went to see the plaintiff at h is new place of work they went there to demand repayment of car l oan and The plaintiff was given a deadline of 4th other September , The The defendant seized plaintif f h as submitted that in the circumstances of this case the repo sse s sion of the vehicle was conversion. The pl aintiff relies on the case of Tear Vs Freebody (1858) 4 CB(NS ) 228 for the proposi ti on that the taking need not be with the int ention of acqui r ing f ull ownersh i p, suffice it to say that any interest truly claimed is i nconsistent with the right of the person entitled . the defendant wrongfully took possession of certain goods with the intention of acquiring lien and it was held that he was guilty of conve rs ion . Similarly, taking by duress , under a threat of certain cons equences is conversion - see Grainger -Vs - Hill The position of this current ca se must (1838) 4 Bin g NC 212. It differs from the p osition be unders t o od in its own context. in the cas e of Chitungu the present case the (ante) . defendant d emanded repayment of car loan as tabulated in the letter o f 1 st September, 1992 and repossession of the car until repayment. The evidence of Kanyama is very pertinent. He was in the t eam of officials. The letter was delivered to the plaintif f a nd after r eading the letter and holding discussions the plai nt iff surrendered the keys and the vehicle but r etained the reg i s t rati on book . My own view is that the interfe rence with the vehic l e in a manner inconsistent with the right s of the plaintiff was with lawful justification. In the case of Chitungu the chatt e ls belonged to the third party hence wrongful seizure The law but in t hi s c ase the veh i cle belonged the plaintif f . would fai l to protect the public if each and every time a person seized a no ther 's own property as lien to force him honour his obligati on, t he latter succeeded in a conversion suit . I do not the plaintiff was threatened to surrender this even fin d tha t vehicle to the team of officials. It was done voluntar ily by the plaintif f a nd I would not find any conversion on the inc ident of 2nd Sept ember, 1992. (ant e) In The ot he r act complained of is that of sale of the chattel in December , 1 992 . The defendant admits that it sold the vehicle to a thi rd pa rty . The plaintiff wrote on 4th Novembe r, 1992 surrender i ng the vehicle to the defendant. The defendant wrote as follow s :- "I wish to surrender MZ 1223 to you and have t h e money y ou dedu cted for the car loan refunded." The respon se of the defendant on this issue is in the letter dated 2nd De cember, 1992 - Exhibit Pll and states as f ol l ows:- "Management have considered your offer . to sur rend er the car, and agree with you that in these circums tan c e s this is p robably the best thing to do. What we do n o t unders tan d however, is your request that the money dedu c ted from your salary as loan repayment be r e funded to y ou . Our understanding was that this money wo ul d compen sa te for the use of the car during the f ive months in whi ch the car was in your possession . If you s e e otherwise , how wi ll you pay MEDI for using the c a r? " It appears the parties never agreed on any course o f act ion to dispose o f t he ir dispute amicably. The question to b e a sked is whether t he d efendant committed conversion through t h e s ale of I find as a fact that the plaintiff did n ot c on s ent the vehic le . or approve t he sale of the vehicle . His surrender of t h e vehicle was made on a condition that he would be refunded the mon e y that was deduc te d from his salary in respect of car loa n a ccount. Therefore, tha t condition having not been met by the def endant, the surren der of the vehicle failed. In the abs e n ce of a stipulation that ownership would not pass to the plain ti f f until after ful l repayme nt of the car loan, the defendant wou ld not have prop ri et ary rights to enable it sale the vehi c le o r deal with the v ehicle in any such manner inconsistent with the proprietary rights of the plaintiff. The sale shoul d have been sanctioned by the plaintiff otherwise the defendant' s ac t lacked lawful j ust if ication in the interference with the p laintiff's proprieta r y ri ghts. Sale advertisement in the newspap er did not constitute n o t ice to t he plaintiff about the defendant ' s wish to sale the ve hic le. The defendant should have specifical l y written to the pl aint iff seeking his consent and approval t o s ell the I f t he p l aintiff had unreasonably withheld h is consent vehicle. and approv al it would have been the duty of thi s Court to determine whet her or not such withholding of consent a n d a pproval was reasonable or unreasonable . Thefore, I would fi n d t hat the sale of t he v ehicle in December, 1992 amounted to c on v ersion. The defe ndant The d a ma g es for conversion by sale is the market value of the thing c o nve rted at See Wickham Holdings Ltd - Vs - Broo k the time of c onversion. The value at t h e date of House Mo tors Ltd (1967} W. L. R. 295. sale was Kl2, 000.00 and it was sold at K12,000.00. I n a dditi o n to the v alue of the chattel the plaintiff would be e n tit led to damages f or l oss of use. Counsel for the plaintiff h a s ci ted the case of J . L . M. Pangani Vs Rashid Hussein Jussab, Civi l Cause No 512 of 19 9 0 where the plaintiff was awarded KS,000 . 0 0 for loss of vehicl e fo r 17 months. Also in the case of P. J. Chinema Vs World Vis ion International, Civil Cause No 109 7 (unreported ) where the plaintiff was awarded K7,000 . 00 for use In the presen t c ase the of his ve h icle for Six and half months. plaintiff wa s deprived the enjoyment of use of t he vehicle. However, the plaintiff contributed gre a tly to the occurrence. The manner in which he conducted himself i n c learing the debts he had with the defendant forced the latte r to opt for is liable for conversion. i n r eality o f the sale o f I would therefore, award the plaintiff nominal damages of K2, 0 00. 00. Therefore the total award to the plaintiff becomes K14,0 00.00. the motor v ehicle to a third party. As f o r t he defendant's counter-claim I find that t he same the the requ i s i te standard on to has also be en p r oved up followin g i tems: - ( i} (ii} (ii i } Balanc e on motor vehicle advance . . . .. K 8 ,375.00 Vehicle insurance advance... . .. . . . . . . . 744.56 Three months salary in lieu of notice .. 4 ,590.51 TOTAL K13 ,710.07 The evidence o f the de fendant on the other emergenc y and salary advances a llegedly gra nted t o the pla i n t iff does not sat isfy me up to the requ isite ma r k that there is a balance d ue a n d owing. The defend ant does not state how much wa s borrowed and h ow much I wi ll assume that the was deduct e d f rom the plaintiff's salary. Kl,085.56 from the Na tional Insurance company i n respec t of the plaintiff's p ension bene fit settled his indebtednes s with defendant. There wou ld be no further claims by the de fendant worth considering. the Therefore , by off setting the c ounter - claim fr om plaintiff's a ward there is a balance of K2 89.93 due and payable by the de f endant to t he plaintiff. I order that the de fendant shall pay t his sum to the plaintiff. The issue of costs is discretionary. Normally costs follow the event. Bo th part i es have substantially succeeded on their claims. It would the r efore be fair and just if each p arty paid its own c os ts of these proceedings and I so order. Pronounced i n open court at Bl antyre t h is 8th Day of January, 1997 . G. M . Chimasula Phiri Judge