Manica Mann George Malawi Limited v The City Centre Limited (Civil Cause 103 of 1979) [1979] MWHC 4 (28 June 1979)

tas IN THE HIGH COURT oF MALAWI AT BLANTYRE CIVIL CAUSE NO. 103 BETWEEN: MANICAR MANN GEORGE C(MPLAWI) LIM - and ~~ OF 1979 ITED oo eecoeePLAINTIFF THE CITY CENTRE LIMITED 0. ecesececcceeeecee DEFENDANT QRODUER This is an application by the Sheriff of Malawi under Order 17, Rule 3, Rules of the Supreme Court. Mr. Baldev appears for the Sheriff, Mr. wills for the execution creditor, and Mr. Savjani for the claimant. to determine summarily the question at issue, I have decided as I am empowered to do by Grder 17, Rule SC 2)» The question at issue between the claimant and the execution creditor is whether, at the time of Seizure of certain goods from The City Centre Limited, 103 of 1979, the goods seized were the Civil Action No. the defendant: in Property of the claimant as against the execution creditor. The execution creditor recovered judgment against The City Centre Limited 42,865.44 and K34 costs. A Writ of on 3rd April and the Sheriff, on the assets from The City Centre Limited, Receiver and Manager of the said The It is common case that The City e7th May 1977, issued a debenture in Bank of Malawi with the Registrar of Deeds Registry on the 22nd June. consideration of the Commercial Bank on the 13th March 1979, for the sum of Fieri Facias was issued 17th May, seized various The claimant is a City Centre Limited. Centre Limited, on the favour of the Commercial Limited, and that such debenture was registered Companies on the lst June and with the The debenture was issued in of Malawi Limited granting to City Centre Limited Overdraft facilities to the extent of K3C ,GC0. Cn the 17th April 1979, there was due and Quing to the Commercial Bank of Malawi Limited the sum of 47,278.98, and the bank, in alleged exercise of debenture, appointed the claimant as all the Property of the said The City Centre Limited. its powers under the Receiver and Manager of appointment was notified to the company on the same day and WaS advertised in the Newspapers and the Gazette. The claimant took possession of the property and assets of the company. Pig by] GH co oi UR yr AP tena, Kopg, NA g. ct Lip The power to appoint a Receiver is contained in Concition 5 of the Concitions attuched to the debenture. The Condition reads as follows: MB o AT ANY time after the moneys hereby secured heve become payeble under Condition 4& hereof the bank may, after giving notice in writing to the company, appoint by writing under the hand of any Maneger, Fecountant, Branch Maneger or Branch “ecountent of the bank, a Receiver or a Receiver and Manager of the company's business, and such Receiver or Receiver and Manager shall heve power to sell the company's business as a going cencern, and ell or any of the property and assets comprised in this security for such consideration as he may think proper." The Commercial Bank of Malawi Limited on the 17th April, 1979, under its common seal anc purporting to be acting in pursuance of the powers conferred on the bank by "Condition 6", appointed the claimant to be the Receiver and Manager of the property, assets and chattels charged by the debenture. The offixing of the commen seal was witnessed by the General Manager ond the Secretary of the bank. The document is Exhibit DGL 5, referred to in the Affidavit Of cone, Lawrence, an employee cf the bank. Mr. Wills submits that such appointment wes defective beccuse Condition 5 lays down a methed of appointment which should be strictly followed and Exhibit DGL 5 did not comply with the Condition, in that it was not made under the hand of a Manager, but was made by the bank under seal. He argues that the writing is not the writing of the Manager but the writing of the banking corporation. He cited the case of Windsor Refrigerator Co. Ltd. And Another vs. Branch Nominees, Ltd. And Others - 1 All E. R. /T96Y7 277. In that case Branch Nominees, Ltd., a bank's wholly cuwned subsidiary, held a debenture as security for a company's overdraft with the bank which conferred power, when the principal money had become payable, to uppoint by writing a Receiver. Q8ranch Nominees, Ltd. affixed its common seal to an undated deed appointing a Receiver, and the sealing was witnessed by two directors. The cocument, undated, was sent to a branch of the benk, and & few days later the bank's Branch Manager inserted therein the then date ond delivered to the company € formal demand for pay- ment, and on payment not being made, produced the decument, handed it te the Receiver, end indicated that the Receiver was appointed. It was held in the High Court that the procedure adopted by Branch Nominees, Ltd. was invalid to effect the appointment of a Receiver under the debenture because the dcecument of appointment wes ineffective as a deed end could not be regarded ag an appointment under hond validly made on behalf of the debenture holders. This decision was the Subject of an appeal to the Court of Appeal, and Mr. tills has referred to the judgment of Lord Evershed, M. R. in that Court, particularly to that part of the judgment which appears on pege 261 where, ofter referring to a pessage in the judgment in the court below, in which it Was said that there was no reason to think that the directors who put their names on the appointment were authorised to cdo anything else than to witness the affixing of the seal, end it could not be assumed that they had any authority to bind the company by a document under hend or were purporting to do so, the learned Master of the Rolls continued by saying that it seemed te him that the question was not whether the cirectors, when 3) rea they put their names to the document, were purporting to execute a document under their hands as agents for. the company, or had any authority so to do; the question wos Could the document be taken to be an instrument of the company in writing? ‘He held that it could. that the witnessing of the affixing of the common seal of a Compeny on 2 document dces not meke the document a writing under the hand of the Persons who put their names on it as witnesses of the affixing of the seal. I agree with him, It seems clear to me that where a director puts his name on @ document as evidencing the affixing of the seal of < company, the document is a document of the company and is not & writing of the director, nor is it under the hand of the Girector. Hut I do not see that this in any way advances the execution creditor's Case. The document of the 17th April is a deed, and on the face of it regular. It is true that Condition 5 enables the bank to appoint a Receiver without a Seal; it is allowed ty do sco under the hand of a Manager. But the question I heave to answer is, can it only appoint under the hand of a Manager? Is it Precluded from appointing by deed? it is clecr; I think, that the intention of Condition 5 is to allow the bank an easier method of appointing €a Receiver than would be normally available to it, The method cf eppointing a Receiver must accord with the formalities required by the debenture. In the instant case it seems to me that the Company, i.e. the bank, did comply with the formalities. The bank used a form of doing sc by means of executing and delivering a: deed instead of having «= writing Signed by a Manager. for it. The appointment was made by the benk as required by the debenture, ond it seems to me immaterial that it was done by deed instead of merely by writing. It did. it under seal instecd of by hound of an Agent. I think it would be unduly pedantic to soy that this was not a compliance with Condition 5 of the debenture. The second point taken by Mr. Wills is thet the appointment is defective becsuse the bank purported to exercise it in pursuance of the powers conferred by Cencition 6 endorsed on the debenture instead of stating the eppointment was made by virtue of the powers Contained in Concition Bs Condition 6 deals with the powers of « Receiver end Opens by stating thet a Receiver shall be the Agent of The City Centre Limited, but may be removed et uny time by the bank, who may appoint. another in its stead. It then 90es on to spell out the powers to be enjoyed by a Receiver. It is Mr. Wills'ts argument that the intention was not to appoint & Receiver under Condition 5, but to appoint @ substitute Receiver under Condition 6, or thot in any @vent such an interpretation is open. It is clear from the affidavits before me that there never was an appointment pricr to that made on the 17th April. When I read the notice in its entirety, and when I construe it asa whole, it seoms Clear. to me that the intention Was tO appoint a Receiver pursuant to the powers contained in Condition 5, and indeed it seems to me when I look at the debenture, it is only under Concition 5 that & Receiver, whether the first or & substitute, may be appointed. Ht] es The third point taken by Mr. Wills, and it is not a point on which he pleces much relicnce, crises out of the use of the phrase in the notice that Holman is to be "the Receiver and Manager of the property, assets and chsttels charged" by the debenture. Mr. kills ergques that the power in Condition 5 is to appoint c Receiver to be the Receiver of the compeny's business. fs I see it, the use, of the words "the company's business", where it is first used in Condition 5, is descriptive cf a Manager only, and a reeding of Conditions 5 ant 6 show that a Aeceivet is to be a Receiver of the property charged by the cebenture. I find in favour of the cleimant. The execution creditor will pay the costs of this applicatian of both the Claimant end the Sheriff. Made in Chambers this 2Eth cay of June, 1979, at Blantyre. i \ \ _F\La .. sf Ay Lin ms 7 YN © Ay BR A 7? \ “aw! g he 3. 3. SKINNER CHIEF JUSTICE