The Leasing and Finance Company of Malawi Ltd v Chiume & Anor. (Civil Cause 1375 of 1994) [1997] MWHCCiv 17 (19 August 1997)

IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY CIVIL CAUSE NO. 1375 OF 1994 BETWEEN: THE LEASING AND FINANCE COMPANY OF MALAWI LIMITED . . . . . . . . . . . . . . . . . . PLAINTIFF AND EPHRAIM MKANDA CHIUME . . . . . . . . . . . . . . . . . . . . . . lST DEFENDANT C NYIRENDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2ND DFEENDANT CORAM: QOTO, DEPUTY REGISTRAR Mr Ching'ande of counsel for the plaintiff Counsel for the defendants absent RULING QOTO, DEPUTY REGISTRAR On 4th January, 1996, the plaintiff obtained interlocutory default judgement aga i nst the first defendant for K45, 287. 55 plus interest at the rate of 38½% per annum from 1st July, 1994, and damages for detinue and for trespass to be assessed and for costs to be taxed. By a writ of summons and a statement of claim issued on 8th July, 1994, of the plaintiff claimed against the defendant the sum of K83, 287. 55 and interest thereon at the rate of 38½% claculated with effect from 1st July, 1994, and general damages to trespass to goods and detinue. Service of the writ of summons and the statement of claim was by -2- post and there being default of notice of appointmet to assess damages, the plaintiff obtained the default judgement I have referred to above. The evidence in relation to the assessment damages was given by Mr Maxwell M Honde, an operations manager of the plaintiff company. He said the plaintiff financed the first defendant to enable him to purchase a motor vehicle - a pick up. They had entered into a lease agreement, exhibit Pl. According to this agreement, the total capital sum given to the defendant and charges came to Kl21,338.36. The first defendant, he said, was to repay this loan by monthly instalments with effect from September, 1992. The first defendant effected a few rentals and by September, 1993, he had defaulted to such an extent that the plaintiff determined the lease agreement and decided to exercise its right to re-possess the motor vehicle, the subject - matter of the agreement. The plaintiff then mounted a search for the motor vehicle and it was found it in Mzuzu with the second defendant. The second defendant refused to release it because he said the first defendant owed him money and the motor vehicle was security for that debt. The plaintiff then obtained an injunction against the defendant holding on to the motor vehicle and the Sheriff seized it in August, 1994. The plaintiff then made arrangements to sell the motor vehicle and eventually sold it on 15th September, 1994, at K38,000.00 to one Nkhata of Lever Brothers Limited. At that time, after the plaintiff had credited the first defendant's account with the proceeds of sale of the motor vehicle, there was a balance of K59,394.20 which included the interest which had accrued at that time. He again told the court that since then, the account has continued to attract interest to the extent that the balance -3- plus interest up to June, 1997, was Kl36,823.0l. The calculation has been worked out on exhibit 3. Mr Honde further told the Court that as a result of detention of the motor vehicle by the defendants,, the plaintiff delayed in effecting the sale. Consequently, he said, the plaintiff sold the motor vehicle at a lower price than would have been the case had it been sold earlier. Further, he said, the plaintiff was forced to provide for their account with Reserve Bank of Malawi in respect of the loan for this motor vehicle out of the i r profi t s. I pause here to observe that in working the balance of the debt owed to it by the first defendant, the plaintiff used various rates. It used 46% per annum from July, 1995, up to January, 1997. Thereafter it used the rate of 30% per annum up to June, 1997. This, in my judgement, is clearly wrong. Of course, reading the lease agreement exhibit Pl as a whole and in particular paragraph 1 thereof, you get a clear indication that the rate of interest was to be determined by the plaintiff from time to time on all amounts overdue. But paragraph 1 of the Lease Agreement makes it abundantly clear that in the event of the rate of interest being increased, the plaintiff must give the first defendant notice in writing of such increase. There is no evidence of such notice in writing having been given to the first defendant. As such, the plaintiff wrongfully increased the rate of interest i n this case. Furthermore, in its writ of summons and statement of claim, the plaintiff specifically claimed interest at the rate of 38%½ per annum from 1st July, 1994, and the judgement it obtained was for K45,287.55 plus interest at the rate of 38½% per annum from 1st July, 1994. There has been no amendment of the pleadings and the only rate interest applicable to the sum of K45,287.55 is -4- 38½% which the plaintiff sp e cifically pleaded. I thou ght it was elementary that the pleadings bind the parties a n d so too does the judgement. You cannot introduce matters al ien to the plaedings or to the judgement without amendment . That said, I see that the interest in this case does not fall to be assessed. If counsel for the plaintiff was astut e enough, he ought to have worked the interest on the sum K45,28 7.55 and he should have obtained a judgement for the sum claimed plus interest already worked out. For having specifical ly claimed interest at the rate of 38½% per annum the interest fell to be specifically calculated and not assessed and th e judgement should not have interlocutory only in respect of the future interest. I accordingly order that the plaintiff must wor k out the interest at 38½ % per annum on K45,287.55 and judgement for judgement the total sum. The obtain a final should only be interlocutory in respect of the future interest . I now turn to damages for detinue. The leading c ase on this subject General and Finance Facilities v Cooks Cars (Rainf o rd) I 119631 1 WLR 644. Diplock said at page 648:- "There are important distinctions between a cause of action in conversion and a cause of action in det inue. The former is a single wrongful act and the cause of act ion a c crues at the date of the conversion, the latter is a c o nt inuing cause of action which accrues at the date of the wrongful refusal to deliver up the goods and continues until deliver y up of the goods or judgement in the action for detinue." He continued at page 650 and stated:- "In the result an action in detinue today may result in a judgement in one of the three different forms: (i) for the value of chattel as assessed an d damages -5- for its detention; or (ii) for return of the chattel or reco very of its value as assessed and damages for its d ete nt ion; or (iii) the return of the chattel and damages for its detention." In the present case I find that the chattel has bee n returned to the plaintiff and what the plaintiff seeks are d amages for its detention. The judgement is in the third form o f Diplocks L. J. categories. Under th i s form of judgement the only pecurinary sum recoverable is damages for detention of the c hattel. Reverting to the facts, the plaintiff made a d e mand for the the motor vehicle return of repossessed in August, 1994. When the plaint i ff re-possessed loss and it was forced to i t, it sold the motor vehicle at a in respect of this motor ve hi cle with the service its loan :;_n September , It was 19 93. Reserve Bank of Malawi from its profits. I think KlS,000.00 is fair and adequate for det inue and I award it to the plaintiff. I award also it KS,000.00 as damages for trespa s s. MADE IN CHAMBERS THIS 19TH AUGUST, 1997 AT BLANTYRE. /\ C\,'\ . ',<J , I . I to DEPUTY REGISTRAR