Salima t/a Quality Trading v CAMFED (Commercial Cause 376 of 2019) [2021] MWHCCiv 23 (12 October 2021)

Asal Republic of Malawi | IN THE HIGH COURT OF MALAWI COMMERCIAL DIVISION BLANTYRE REGISTRY COMMERCIAL CAUSE NUMBER 376 OF 2019 (Before Honourable Justice Msungama) BETWEEN: GLYN SALIMA T/A QUALITY TRADING. ...........seeeeeeeeeeceeeeeeeeeceeeees CLAIMANT AND CAMBEED ..........ccccccccccccccccscecccesscscssccsscesscsoccsenessessssssesecssscseseees DEFENDANT Coram: Msungama, J. Banda, Counsel for the Claimant Chagoma, Counsel for the Defendant Makombe, Court Clerk 1. 2. Judgment Introduction 1.1 The Claimant in this matter is a businessman who is in printing business. The Defendant is an organization that undertakes activities aimed at empowering girls through education. 1.2 The Claimant has brought this action against the Defendant claiming certain specified amounts of money and damages for breach of contract as a result of the cancellation of an order for the printing and supply of books by the Claimant to the Defendant. Pleadings The Claimant’s Statement of Case 2.1 Inhis statement of case, the Claimant states that by a contract between the parties herein concluded on the 28" day of August, 2019, the parties agreed that in consideration of the Claimant printing 945 books titled ‘Promoting Young Women Activism’ and 992 books titled ‘My Better World’, the Defendant would pay him MK30,000 and MK28,000 respectively for each book resulting in a total cost of MK56,622,000. The books were supposed to be delivered to the Defendant by the 30 August, 2019. Time, according to the Claimant, was of the essence. In pursuance of the agreement, the Claimant says he procured materials worth MK14,800,000 for the printing of the books. The materials procured were unique for the printing of the books required by the Defendant and could not be used for any other job. 2.2 In breach of the agreement, the Defendant terminated the contract before the delivery of the books. The termination has resulted in the Claimant suffering loss and damage. In the circumstances, the Claimant is claiming the sum of MK 14,800,000 being the cost of procuring the printing materials, interest on the said sum at A% above National Bank of Malawi base lending rate, damages for breach of contract, collection costs and party and party costs. The Defendant’s Statement of Defence 73 On the other hand, the Defendant is denying that it is liable to the Claimant. In its statement of defence, the Defendant states that it had an intention of contracting the Defendant to print books. In pursuance of that intention, it delivered an LPO to the Claimant on the 28" of August, 2019 before he was given specifications and details of the books which were to be printed. The delivery of the LPO was premature since the Defendant had not yet provided the Claimant full details of the books and had not yet verified the capacity of the Claimant. A few hours after the premature delivery of the LPO, the Defendant indicated to the Claimant that it wanted to retrieve the LPO but the Claimant refused to give it back. 2.4 The Defendant suspected that the Claimant had no capacity to print the books and its suspicion was later confirmed when it found out that the Claimant was intending to outsource the printing services to a third party. The Claimant’s lack of capacity was a fundamental breach of the agreement and therefore, the Defendant could not proceed to engage the Claimant. 2.5 The Defendant disputes that time was of the essence of the contract as the Defendant had not yet provided the Claimant with the specifications of the books to be printed. Further, it is contended by the Defendant, that it is not true that delivery of the books was to be done on 30 August, 2019. The Defendant also disputes that the Claimant procured the alleged materials. They contend that the Claimant could not have acquired the materials he is alleging to have bought in preparation for the printing work because: 25.1 the LPO was cancelled a few hours after it was delivered to the Claimant; 9.5.2 the book specifications and details had not yet been communicated to the Claimant by the Defendant; and 353 some of the materials claimed to have been procured were a not available on the local market. The Defendant, therefore, denies breaching the contract. It also denies that the Claimant suffered the alleged loss and damage. The Defendant contends that in fact it is the Claimant who breached the contract. The Defendant, therefore, would like the Court to dismiss the Claimant’s action with costs. 3, Issues The issues for the determination of the Court are as follows: 3.1 whether there was a contract between the two parties for the Clamant to print and supply books to the Defendant; 3.2 if there was such a contract, whether time was of the essence of such contract; and 3.3 if there was such a contract, whether the same was breached by either of the parties thereto. 4. The Law Essence of time 4.1 Time is of the essence of the contract where the parties have expressly stipulated in their contract that the time fixed for performance of the contract must be strictly complied with: Hudson v Temple’; Steedman v Drinkle?; Mussen v Van Diemen’s Land Co’; Harold v Wood Brick Co. Ltd v Ferris‘ or that time is to be of the essence: Lombard North Centra PLC v Butterworth’. Further, time is of the essence where the circumstances of the contract or the nature of the subject matter indicate that the fixed date must be strictly complied with for example in a contract for the sale of goods where a time for delivery is fixed: Bowes v Shand © ; Sharp v Christmas’; Hartley v Hymans*. There is no presumption or rule of law that stipulations as to time of delivery are of the essence of the contract, but in commercial contracts they frequently are so construed’. Time is also deemed to be of the essence of the contract if the contract provides that the provision relating to time of performance is be deemed to be a condition or that any breach thereof shall entitle the innocent party to rescind or terminate it. 4.2 The question is whether the time specified in a particular clause was (expressly or by necessary implication) intended by the parties to be essential, e.g. because they needed to know precisely what their respective obligations were'”. 129 Beav. 536 2 [1916] 1 AC 275 3 [1938] Ch. 253 411935] 2 K. B. 198 5 [1987] Q. B. 527 6 (1877) 2 App. Cas. 455 7 (1892) 8 T. L. R. 687 8 [1920] 3 K. B. 475 ° Bowes v Shand (1877) 2 App. Cas. 455; United Scientific Holdings Ltd v Burnley BC [1978] A. C. 904; Bunge Corp v Tradax Export SA [1981] 1 W. L. R. 711; Compagnie Commerciale Sucres et Dunrees v C Czarnikov Ltd [1090] 1 W. L. R. 1337, 1347 10 Bunge Corporation v Tradax Export SA {1981] 1 W. LR. 711; Scandinavian Trading Tanker Co A. B. v Flota Petroleum Equatorianan [1983] 2 A. C. 614, 703-704: Sport International Bussum BY y Inter Maritime Inc (The 3 43 Time fixed by the parties for performance may be postponed by waiver or subsequent variation by an agreement of the parties. The variation may be affected by modifying or altering the terms of the agreement by mutual agreement!!. Such an agreement may either be oral or written'?. However, a contract required by law to be made or evidenced in writing can only be varied in writing)’. A mere unilateral notification by one party to the other, in the absence of any agreement, cannot constitute a variation of a contract!*. The burden of proof 4.4 The general principle is that he who asserts must prove. Generally, although there are exceptions, a claimant or applicant must establish the existence of all the preconditions and other facts entitling him to the order he seeks. The standard of proof 4.5 Where the matters in issue are facts the standard of proof required in non-criminal proceedings is the preponderance of probability, usually referred to as the balance of probability. Lord Nicholls of Birkenhead in Re. H** clarified the position as follows: “The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence. Deliberate physical injury is usually less likely than accidental physical injury. A stepfather is usually less likely to have repeatedly raped and had non-consensual oral sex with his underage stepdaughter than on some occasion to have lost his temper and slapped her. Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation. Although the result is much the same, this does not mean that where a serious allegation is in issue the standard of proof required is higher. It means only that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the Niizum) [1996] 2 Lloyd’s Rep. 66, 71; B. S. & N. Ltd (BVI) v Micado Shipping Ltd (Malta) (“The Sea flower”) [2001] 1 Lloyd’s Rep. 341: Tennara Ltd v Majorarch Ltd [2003] ECHC 2601 (Ch) 11 Robinson v Page (1826) 3 Russ. 114; Goss v Lord Nungent (1833) 5 B. & Ad. 58, 65; Stead v Dawburn (1839) 10 A. & 1. 57, 65; Dodd v Churton [1897] 1 Q. B. 562; Fenner v Blake [1900] 1 Q. B. 426; Royal Exchange Assurance v Hope [1928] Ch. 179. 12 Berry v Berry [1929] 2 K. B. 316 13 British and Beningtons Ltd v N. W. Cachar Tea Co Ltd [1923] AC 48; United Dominions Trust (Jamaica) Lid v Shoucair [1969] 1 AC 340; Newhart Builders Ltd v Brindley [1975] Ch. 342; McCausland v Duncan Lawrie Ltd [1997] 1 W. L. R. 38 14 Cowey v Liberian Operations Ltd [1966] 2 Lloyd’s Rep. 45; T. Cowendy (UK) Ltd v Easy Managed Transport Ltd (2007] EWHC 611 (Comm). 1511986] AC 563 event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established. ... This approach also provides a means by which the balance of probability standard can accommodate one’s instinctive feeling that even in civil proceedings a court should be more sure before finding serious allegations proved than when deciding less serious or trivial matters. No doubt it is this feeling which prompts judicial comment from time to time that grave issues call for proof to a standard higher than the preponderance of probability. _.. The law looks for probability, not certainty. Certainty is seldom attainable. But probability is an unsatisfactorily vague criterion because there are degrees of probability. In establishing principles regarding the standard of proof, therefore, the law seeks to define the degree of probability appropriate for different types of proceedings. Proof beyond reasonable doubt, in whatever form of words expressed, is one standard. Proof on a preponderance of probability is another, a lower standard having the inbuilt flexibility already mentioned. If the balance of probability standard were departed from, and a third standard were substituted in some civil cases, it would be necessary to identify what the standard is and when it would apply. Herein lies a difficulty. If the standard were to be higher than the balance of probability but lower than the criminal standard of proof beyond reasonable doubt, what would it be? The only alternative which suggests itselfis that the standard should be commensurate with the gravity of the allegation and the seriousness of the consequences. A formula to this effect has its attraction. But I doubt whether in practice it would add much to the present test in civil cases, and it would risk causing confusion and uncertainty. As at present I think it is better to stick to the existing, established law on this subject. I can see no compelling need for a change.”!° 5. Evidence For the Claimant 5.1 The Claimant was the first witness to testify in support of his claim. He adopted his witness statement as his evidence in this matter and was duly cross examined by Counsel for the Defendant. He was subsequently re-examined by his own counsel. It was his evidence that in the month of August 2019 he was asked by one Dickson J amali, an employee of the Defendant to submit a quotation for printing and supply of books to the Defendant. The books in question were to be titled ‘Learners Guide Promoting Young Women Activism’, ‘My Better World’, Kusadziwa Nkufa Komwe’ and ‘Learners Guide Companion Supporting Children’s Wellbeing’. He submitted his quotation dated 23" August, 2019. This quotation was tendered in his evidence as Exhibit GS1. 5.2 Later, on the same day, Mr J amali called him to indicate that he had been awarded the contract to print the books. Upon hearing the good news, he started mobilizing funds to be used in fulfilling his part of the bargain. On 28 August, 2019 he got another call from Mr. Jamali informing him that the LPO was ready and that they required delivery of at least 75% of the books by 30 August, 2019. Mr. J amali further advised that he 16 P.586 was going to email him soft copies of the books to be printed. The LPO was delivered to the Claimant’s office in Blantyre around 8 am by Mr. Jamali. The witness tendered this LPO as Exhibit GS2. It is dated 27" August, 2019. GS2 indicates that the Claimant was to supply 945 books titled ‘Promoting Young Women Activism’ at the price of MK30,000,000 and 992 books titled ‘My Better World’ at the unit price of MK28,000,000. GS2 provided that the delivery date was 2g August, 2019 and payment was to be made after delivery. 53 According to GS2 the witness, did not have any term dealing with the issue of outsourcing of any of the services which were being sought. After receiving GS 2, he proceeded to buy materials, namely tonner, gloss paper and spiral/ring binders to be used in fulfilling his contractual obligations to the Defendant. The materials were bought from By Faith Investments with whom he also agreed to do the printing of part of the books so that he would be able to deliver on the 30 August, 2019. The papers which he acquired were cut according to the specification in GS2. The cost of acquiring the materials and printing came to the sum MK14,800,100. He paid a down payment of MK10,150,000 in cash leaving a balance of MK4,650,100. He tendered in this court the quotation that he was given by By Faith Investments and the receipt which he was issued after paying the MK10,150,000 as Exhibits GS3 and GS4 respectively. It was his evidence that this was not the first time he had dealt with the Defendant. He had previously supplied them with books on two other occasions in 2017 and 2018 worth MK3,800,000 and MK11,000,000 respectively. 5.4 Around 4 pm on the same day, i.e. 28" August, 2019, whilst he was awaiting receipt of the soft copies of the two books from Mr. Jamali, he received a call from him stating that the Defendant wanted to cancel the LPO and that they no longer wished him to proceed with the contract. He objected to the cancellation and informed Mr. J amali that he had in fact already spent money in pursuance of certain activities relating to the fulfilment of his part of the contract. He followed up on this position with a letter dated 29% August, 2019 which he tendered as Exhibit GS5. Subsequently, the National Director of the Defendant, in the company of Jamali approached him and advised him that they had jumped certain protocols before awarding the contract hence their decision to cancel the same. The Claimant wants the Defendant to pay him special damages in the said sum of MK14,800,100 as well as general damages for breach of contract. 5.5 The second witness who testified for the Claimant was one Benjamin Folley. He told the Court that he is a businessman and trades by the name of By Faith Investments. He deals primarily in stationery ‘tems. The Claimant approached him to buy stationery items to fulfil a contract which he had been awarded by Camfed, the Defendant. He wanted to buy toner, a sheet of gloss paper, a sheet of laminating paper and spirals. He also wanted him to print for him 945 books because he had very little time to deliver the books which were ordered by the Defendant. He gave the Claimant an invoice for the sum of MK14,800,100. This was tendered in court as Exhibit LBF 1. After accepting the price quoted on the invoice, the Claimant paid a down payment of MK10,150,000 in cash and promised that he would pay the balance after being paid by the Defendant. He issued a receipt to the Claimant for this payment. Upon receipt of this payment, the witness cut the gloss and laminating paper to different sizes in line with the request from the Claimant. Later, the Claimant told him that Defendant had cancelled the contract. The Claimant asked him to sell the items to other customers but the witness refused because the paper had been trimmed to suit particular sizes as requested by the Claimant. The Claimant still owed him the balance as at the date of the trial. For the Defendant 5.6 The Defendant also called two witnesses in support of its defence. The first witness was Mr. Dickson Jamali who at all material times worked for the Defendant as its IT Support Officer. It was his evidence that on the 23" August, 2019 he was told by the Defendant’s National Director that there was need to have certain books printed and supplied. He was told that there was an urgent need to source and collect quotations from service providers since the quarter for spending the money in respect of the printing services was 30 August, 2019. On the 23™ August, 2019 he called the Claimant who was in Lilongwe at the time but nevertheless was able to send his quotation to the Defendant on the same day. On 28" August, 2019 the Defendant issued two LPOs one of which was to the Claimant. He delivered this LPO himself at the Claimant’s offices in Blantyre at Ethyo House. The LPO constituted an agreement between the parties. This LPO, according to the witness, was submitted to the Claimant prematurely before full approval was made and before full specifications and details of the book were given. A few hours later on the same day, it was discovered that the Claimant did not have the materials and equipment for printing of the books. The Claimant in fact informed them that he had outsourced the services of a different entity, namely, By Faith Investments to provide the materials and to print some of the books. As a result of these discoveries, the Defendant, in line with the agreement, cancelled the LPO and notified the Claimant that it would no longer proceed to get the books from him because of his lack of capacity to provide the requested services. An email to that effect was sent to the Claimant. It is worth noting that a copy of the said email was not produced in this court 57 The second witness called by the Defendant was one Madalitso Kapyola. He was at the material time employed by the Defendant as an Impact Manager in its Monitoring, Evaluation and Learning Department. In that capacity he was also the Chairman of the Defendant’s Internal Procurement Committee (“IPC”) which was responsible for overseeing all procurement for the Defendant. He told the Court that in August 2019, the National Director of the Defendant called members of the IPC, namely, Mr. J amali and Mercy Kachingwe to discuss the issue of procuring printing services for certain books which was supposed to be done urgently before 30" August, 2019 the date when the spending of the money allocated for that quarter would expire. He did not attend the meeting himself. The Defendant subsequently issued two LPOs one of which was issued to the Claimant. He immediately left for Mzuzu. On the 29" of August, 2019 when he was coming back from Mzuzu, the Country Director requested him to pass through the offices of the Claimant in Lilongwe to verify its existence and its capacity in line with the terms and conditions of the agreement for printing and supply of the books. When he arrived in Lilongwe, he met the Claimant who took him to an office within Hayat Complex Building which he said was his administrative office. There were six desks and several chairs in the office and a white piece of paper stuck on the office window written ‘Quality Trading’. He took a picture of the office and building. This picture was tendered by him in his evidence as Exhibit MK1. The Claimant then took him to another building along Chilambula Road where he claimed the printing would be done. They failed to get into the building because the individual who apparently had the keys into the building was away. The Claimant also told him that some of the printing would also take place at Malangalanga where the other printing facilities, which belonged to his friend, were located. However, because he, i.e., the witness, was going to Blantyre, they failed to visit that place because of time constraints as it was getting dark. According to the witness, there was really nothing to show that Quality Trading really existed or that it had both the materials and printing equipment. As a result of this conclusion, the Defendant rescinded its decision to proceed with Quality Trading on the agreement for printing services. 6 Facts not in contention The following emerged as undisputed facts in this matter: 6.1 On the 23" of August, 2019 the Defendant through its employee, DW1 called the Claimant by phone and asked him to provide the Defendant with a quote for printing of four types of books entitled (i) ‘Learners Guide Promoting Young Women Activism’, (ii) ‘My Better World’, (iii) ‘Kusadziwa Nkufa Komwe’ and (iv) “Learners Guide Companion Supporting Children’s Wellbeing’. 6.2 The Claimant obliged to the request and duly provided the Defendant with a quotation for the printing of the books. The quotation was delivered to the Defendant on the same day, i.e. the 23" August, 2029. 6.3 In the said quotation the Claimant quoted as follows for each of the above books respectively: (i) MK28,500 Gi) MK30,000 (iii) MK30,000 (iv) MK30,000 6.4 On the 28" August, 2019, around 8 am, DWIcalled the Claimant and informed him that the Defendant had prepared an LPO in his favour. On that particular day the Claimant was in Lilongwe. He therefore advised DW1 to go and drop the LPO at his Blantyre office which the DW1 did. 6.5 The LPO, serial number 01760 was dated 28" August, 2019 and contained the following relevant information: (i) Date of delivery: 28 August, 2019 (ii) Terms of Payment: After delivery 8 (iii)Delivery Point: Blantyre (iv) Order Date: 28" August, 2019 (v) Specification: 1) Promoting Young Women Guides on A4 pages to use for DFID LG Program, Quantity: 945. Unit Price: 30,000. Total: 28,350,000. 2) My Better World A5 to use for DFID LG Program. Quantity: 992. Unit Price: 28,500. Total 28,272,000. (vi)Date prepared: 27" August, 2019 6.6 The LPO indicated on its face that it constituted an agreement between the parties. 6.7 Pertinent terms of the purchase as indicated on the reverse side of the LPO were as follows: 1) Delivery: “Delivery must be completed within the delivery schedule stated on the PO, otherwise Camfed reserves the right to (a) cancel this PO without liability and charge supplier with any loss incurred as a result of the supplier ’s failure to make delivery within the delivery schedule specified, or (b)charge the supplier any costs incurred by Camfed due to late delivery of the goods or services” 2) “7. Warranties: The supplier warrants that (Q) ox (b) It has title to the goods and it is a company that is financially sound and duly licensed with adequate human resource, equipment, competence, expertise and skills to carry out fully and satisfactory, within the stipulated completion period, the delivery of goods in accordance with this PO (G) x (d) No official or any other third party has received or will be offered by the supplier any direct or indirect benefit arising from the PO or award thereof (e) It has not misrepresented or concealed any material facts in procuring this PO 3) Termination and Re procurement Supplier represents and warrants that: (a) Camfed may terminate this PO at any time with one-week written notice to supplier 4) Assignment This PO or any rights arising under it may only be assigned or transferred by the supplier with written permission of Camfed 7 Discussion 7.1 That the parties herein entered into a contract for the printing of the books is not in dispute at all. That the terms of the contract were those endorsed on the LPO which the Defendant issued to the Claimant is also not in dispute. It is further not in dispute that after awarding the contract to the Claimant, the Defendant cancelled the same. What is in dispute is whether time was of the essence of the contract and whether the Claimant was in breach of the said contract entitling the Defendant to cancel the same or whether the Defendant itself breached the contract by the cancellation thereof. Was time of the essence? 7.2 The Claimant contends that time was of the essence of the contract whilst the Defendant contends that it was not. The Claimant’s position on this point is that the agreement which he had reached with the Defendant was to the effect that all books were to be delivered by the 30" day of August 2019. The Defendant states that the Claimant has in fact contradicted himself in that in one breath he says that the date of delivery was 30" August, 2019 and, in another breath, he says that he was advised by the Defendant that he was supposed to deliver 75% of the books by the 30 August, 2019. The Defendant contends that as per the LPO delivery “must be completed within the delivery schedule stated on the LPO”. It is true that the LPO itself stipulates that delivery must be completed within the delivery schedule on the LPO. The LPO indicates 28" August, 2019 as delivery date. The Defendant argues that since the LPO was delivered to the Claimant on the same date indicated as the delivery date, it was impossible for the Claimant to effect delivery as per the date on the LPO. Well, when the LPO was delivered by the Defendant on the Claimant, the Defendant must have known that it was going to be difficult for the Claimant to effect delivery on the same day. I have no hesitation in believing that the Defendant later advised the Claimant that delivery date was actually the 30th August 2019. This is corroborated by DW2 who said in cross examination that delivery of the books had to be done by the 30" day of August 2019 as the money which was budgeted for this acquisition had the end of August 2019 as the deadline in terms of its expenditure. It matters not to this court as regards whether what was to be delivered by the 30" August, 2019 was 75% of the total books ordered or all the books ordered. There was clearly, in my view a variation effected to the agreement as regards the date of delivery from the 28 of August, 2019 to the 30% August 2019. This makes a lot of practical sense. It is my view that the parties were actually ad idem as regards the delivery date. On one hand, the Claimant believed, as he ought to have done, that he had to deliver by the 30 August, 2019 since the Defendant was working on a deadline as regards expenditure in relation to these books. On the other hand, the Defendant clearly told the court in no uncertain terms that the delivery had to be done by the 30" August, 2019. Time, in my humble view, was of the essence as failure by the Claimant to deliver on the 30 August, 2019 would have amounted to a breach of the Contract which would have entitled the Defendant to claim any losses arising from the cancellation according to the provisions of the LPO.!” Even if I am wrong in concluding 1) ‘7 Condition 3 of the PO stated Delivery: “Delivery must be completed within the delivery schedule stated on the PO, otherwise Camfed reserves the right to (a) cancel this PO without liability and charge supplier with any loss incurred as a result of the supplier’s failure to make delivery within the delivery schedule specified, or (b)charge the supplier any costs incurred by Camfed due to late delivery of the goods or services” 10 that time was of the essence, | would still hold that the Claimant was entitled to proceed with procurement of the materials in order for him to perform his part of the agreement. Capacity 7.3 The Defendant contends that the Claimant did not have the requisite capacity to print the books for the Defendant. The Defendant feels that the Claimant misrepresented to the Defendant that “it was a company that was financially sound with adequate human resource, equipment, expertise and skills necessary to fully and satisfactorily perform its part of the contract’. The Defendant argues that contrary to this undertaking the Claimant had no capacity to print the books as required by the LPO due to the following: 7 4 Itis further contended that the Claimant was not financially sound. I find it amazing that the Defendant is advancing this argument on the basis of the paragraphs 17 and 25 of the Claimant’s witness statement in which he stated that he was only able to pay MK10,150,000 of the MK14,800,000 which he was charged for materials and labour leaving a balance still outstanding. Is this a sign of financial unsoundness? Not at all in my considered view. It is actually a sign of financial soundness. It is not necessary in my view for a business like that of the Claimant, let alone any business, to actually have within its coffers all the finance that is necessary to execute a contract in order for it to be deemed to be financially sound. What is important, in my opinion, is the ability to mobilize the requisite resources. That is normal in daily business. In this case it would appear that clearly the Claimant was able to pay a substantial amount out of what he was charged for the acquisition of the materials and printing for some of the books. He had agreed with the seller that he would pay the balance after he was paid by the Defendant. I do not think the Defendant has managed to demonstrate that the Claimant lacked financial capacity to deliver the contract. The fact that he was able to get materials and services on credit is good enough evidence that he had the financial capacity to execute the contract. 7.5 He had no printing equipment to enable him to print the books. The Defendant contends that the Claimant was not in a position to deliver on the contract as he had no printing equipment. The contention is based on the alleged findings of DW2 who the Defendant states was sent to physically inspect the Claimant’s technical and financial capability. The Claimant on the other hand states that he was able to deliver. DW2 told the court that when he went to inspect the Claimant’s premises, he did not see any printing equipment. However, +t was also his evidence that he was unable to gain access to the site where some of the printing equipment was allegedly located because the one who had keys for the premises was not available. Further, it was DW2’s evidence that they failed to visit Malangalanga premises where the other printing works would have taken place because of time constraints. He told the court that it was getting dark and he had to travel back to Blantyre. It appears to me that the whole inspection exercise was not something that was undertaken with any seriousness or in good faith. Why do I say so? I say so because of the following reasons: a) Although the decision to award the contract to the Claimant was made by the 234 August 2019, the decision to inspect the Claimant’s premises was only made on the 29th August, 2019. The Defendant had plenty of opportunity to arrange for a proper inspection. No wonder they were not able to doa 11 proper job. b) The inspection seems for all intents and purposes to have been an afterthought. It was only when DW1 was coming from Mzuzu on the 29" August, 2019 that he got a call from his Country Director that he should go and conduct inspection of the Claimant’s premises to verify his readiness to execute the contract. One would have thought that in the normal course of things, the Defendant would have given a proper notice to the Claimant that it was going to conduct an inspection to verify the Claimant’s readiness to execute the contract. Nothing of that sort happened. The Defendant cannot turn around now and base their decision on a rather casual inspection to determine the Claimant’s ability to execute the contract. In any case, the inspection was conducted a day after the contract had already been cancelled. The results of the inspection can, therefore not be said to be the basis of the cancellation. Whether LPO delivered before specifications 7.6 The other contention by the Defendant is that the LPO was delivered before specifications of the books to be printed were delivered to the Claimant. The Defendant argues that the soft copies of the books and trim size had not yet been supplied to the Claimant by the Defendant. As such, it is implied by the Defendant, there was no way the Claimant could have gone ahead to source materials for the production of the books because by then he did not know the trim size and had no soft copies of the books. I think for us to resolve this issue, it is important to revisit the contents of the quotation which the Claimant provided to the Defendant on the basis of which the LPO was prepared. The quotation has five columns. The first column is not headed. The second column is headed ‘Description; the second one is headed ‘Individual Item Cost’, the third is headed ‘Printing cost per Page’ and the fifth column is headed ‘Cost per Book’. The first item which is described, under Description is ‘My Better World Manual A5- 256 pages colour printed on gloss paper 150 gms with plastic spirals’. Under the column of individual Item cost there is indicated the figure of 22,000. Under printing cost per page, the figure of 85.9375 and the column of cost per book there is indicated the figure of 28,500. I have assumed that these figures represent the local Kwacha currency. When you look at the LPO which was prepared by the Defendant only after receipt of the quotation, under the column entitled “specification” the Defendant specifies that it is ordering the book entitled ‘My better World A5...°. The quantity is indicated as 992 at the unit price of 28,500 with a total value of 28,272,000.00. It is my considered opinion that the parties here were ad idem as regards what the Defendant required the Claimant to supply. There must obviously have been quite some detail that was verbally communicated to the claimant by the Defendant, as claimed by the Claimant, in terms of what the Defendant required. At the time the Claimant was preparing his quotation, he obviously had a fair idea what the Defendant needed. This line of thinking is vindicated by the fact that the LPO confirms the size of the paper on which the book was to be printed. The cost of the book as per the Claimant’s quotation is based on a book of 256 pages. I, therefore, refuse to be persuaded by the argument that the Claimant could not have gone ahead to source the materials for the books unless he had the trim size or the soft copies of the books. I also refuse to take judicial notice, as suggested by the Defendant, of the fact that trim size, artwork, design templates font size are prerequisites specifications in such transactions as suggested by the Defendant. If such were the case, the Defendant should have brought evidence to persuade me to make that 12 conclusion. I conclude on this point by saying that the Claimant knew exactly what he needed in order to produce the books which were required by the Defendant. It was prudent for him to go ahead with sourcing of materials to enable him execute the contract as soon as he was supplied with the soft copies of the books. It would, in my opinion, have been unreasonable for him to await receipt of the soft copies of the books for him to start making preparation ¢.g., sourcing materials. Cutting the papers to the requisite size did not have to await receipt of the soft copies. The soft copies had nothing to do with paper and trim size. Whether the Claimant had procured printing materials 7.7 There is ample evidence that materials were procured by the Claimant to be used for the production of the books. I therefore find that as a fact. Was the cancellation of the agreement lawful? 7.8 Clause 10 of the conditions at the back of the LPO which constitutes the agreement between the parties, stipulates that the Defendant ‘may terminate this PO at any time with one-week written notice to the supplier’. The Defendant says that as soon as it was discovered that the Claimant had no financial and technical capacity to deliver on the contract, it informed the Claimant through a phone call that was made at 4 pm on the 28% August, 2019. The Court was told by DW2 that the verbal cancellation of the agreement was followed up with an email sent to the Claimant on the same day. A copy of the alleged email, as noted elsewhere above, was not tendered as evidence in this court. The reason for the non-production of the said email was that the one who sent it was the former Country Director who has since left the organisation. There was no evidence adduced to indicate what attempts, if any, were made by the Defendant, to obtain a copy of this email from the said former Country Director. In the circumstances, the court is left with no other option rather than to believe that no such email was sent to the Claimant. Assuming that I am wrong in concluding that such email communication was not made, I would still think that such termination was not in line with the provisions of the contract as it did not give the Claimant one week notice of termination as per the parties’ agreement. § Conclusion and determination In view of my findings above I determine the issues in this matter as follows; 82 there was a contract between the two parties for the Clamant to print certain books for the Defendant; 8.3 time was of the essence of such contract; and 8.4 the said contract was breached by the Defendant when it cancelled the same. In the circumstances | find that the Claimant has proved his case to the requisite standard. i order that the Defendant pay the Claimant damages for breach of the contract. The quantum of the said damages shall be assessed by the Assistant Registrar if not agreed by the parties. 13 9 Costs Ordinarily costs follow the event. I see no particular reason why I should depart from this norm. In the circumstances, these are awarded to the Claimant. Just like the damages, the costs shall be assessed by the Registrar if not agreed by the parties. Delivered in open court this 12" day of October, 2021 at the High Court, Commercial Division, Blantyre. { f whe: 7 JUDGE 14