Unilec Industries (PTY) Ltd v Sheikh t/a Freight Handlers (Civil Cause 677 of 1993) [1994] MWHCCiv 38 (5 January 1994)

( I IN 'fIIE HIGH COUR'f OF M.l\L.l\WJ PRINCIPAL RE:GISTRY CIVIL CAUSE NUHBER 677 OF 19 93 BETWE EN: UNILEC INDUSTRIES . ( P'l'Y) LIMITED and SALDI SHEIKH t / a FREIGHT HANDLERS PL AINTIFF DE FENDANT CORAM: D F MWAUNGULU, REGISTRAR Nkhono, Counsel for the Plaintiff Hsisha, Counsel for the Defendant Ndalama (Mrs), Court Clerk ORDEH - - --- Yest erday when I heard the plaintiff's a p p licat ion for j udg ment on admission, I reserved ruling. I pro ceed now t o g ive the order of the Court. The facts, ascertainable from t he S t atem ent o f claim defe nce and the affidavit in support of th e appl ication, are as follows. The plaintiff, a South Af r i can compa n y, I as sume, had d e alings with the defe n dan t, a Malawian c omp any. The defendant, according to the d efen ce, is a fr ei ght handling company and acts only as age nt for impo rters or exporters in procuring transpo rt fac i l i t i es or moving goods on the instructions of th e exp orter or impo rter . the price of salt the plai ntiff sold to the defeniant. The action is for The plaintiff took out this action on th e 26th of l! ay 199 3 cla i ming th e price of the salt. It is aver red t h at the salt was bou g ht by the defendant and de 1 i ve r ed by the It is further ave rred that the plai ntiff in July 1990. l etter of 6th the claim defe ndant acknoHledged Augu st, 1 992 and issued a cheque in respect of it on 22nd Febr uary 1993 drawn by the Price Worth Whol esale rs. The cheq ue, it is averred, was returned to the defend ant only The a ction is b eca use of lack of a second signature. ther efor e , for the sum of Rl00,724.93 and i nter est at a norm al banking rate. in a 2 I . ...• ./ - ·- i s a d e fence, a very brief defence. The d e f end a nt Ther e deni es buying and r eceiving delivery of the sa lt. The is that he only deals with grav e men of his defence impo rte rs and exp o rters helping them in freigh t , h e co uld not an d never bought the salt in questi o n. t oo k out theref ore , this s u mm o n s The admi s si o n the plajntiff 's The p l a intiff, f o r j udgm e nt on a _dmission under Order 27, rul e 2 of t he Rule s i s c ont a in ed in a of th e Supr e me Court. lett er from the plaintiff of 6th August, 19 92 , in whi c h t he de fend a nt wrote th at h e ag re es that they owe the sum of Rl00,724.9 3 a nd n o more. The d e f e nd a nt furth e r requested the plain t iff th a t, until busin es s improv e d, the amount should be paid in 2 4 equal i nst a lments. E xc ep t for th e cu r ren c y in whi c h t h e mo n ey is e xpr es se d c l e a r ad missio n o n wh i c h, as a ma tt e r o f c o ur se , a c o u r t wo u ld Mr . Msish a, e nt er ap pea ri ng r aised two o b jectio ns t o th e letter. the defendant, h o we v e r, h as judgm e nt o n fo r the am o unt admitted. l e tter, l aw y e r s v e ry thi s the in i s a th e i s th a t Th e f irs t obj ec ti o n l e tter, th e b asis of t h e a dmis s i o n was written on a "without prejudice " f ootin g . tl r . Msis ha s ubmi t s that th e c ommunication i s p r i v i le ged this appli ca ti o n or a ny for a nd can n o t pur p ose but in the excepted cases. Mr. Nkh o n o , wh o was no t q ui te ready for this twist to the s ummon s , submit s t h a t th e sort of ad mis sio n h er e. then is the le t ter h ere pr ivi lege d . t h e privilege would n o t The questi o n a dmitted a pply to be On th e g ener a l prin c iple o n co mmuni c ation s o n a "with o ut prejudice'' fo o ting, Mr. Hsisha i s righ t. S u c h co mmuni c ations would b e privileged. The ma t ter has n ot b e en d ec id e d o n by the S upreme Co u r t o f App eal or th e High Co urt in ll a l a wi. The House o f L o r d s h as dec id ed o n i t in Rush & Tomkins Ltd. V. Gre a te r L o n d on Co un c i l [1 988 ] 3 All E. R. 7 3 7. J u s ti ces Bridge, Branden Oliv e r a nd Go ff L o rd Gr iffi ths a g re ed, a p p r o v e d of th e statem e nt of pri n cip l e by L o rd Ju s ti c e OU . v e r [198 4] 1 All E. R . 5 97 , 60 5 - 60 6 : In that c a se , L o r d in ~_utt s V. He ad th e l e a s t i n part, on r ul e res ts, a t f ro m ma. n y auth o rities a n d " T h a t pub li c poli cy is c l ea r the co nv e n ie nt star ting p oi nt of t h e in q u iry i s the n at ur e o f th e und e rlying poli c y. par ties s hould b e enc o uraged so f ar as p o ssible to se t t l e their dispute s without r eso r t li tigati o n a nd sh o uld not be dis c our a g e d b y th e k n o wl e dg e th a t a nything th a t is sa id in t h e c ou r s e of s u c h negotiations (and th at in c lu des, of c our s e, a s much the faiJ .ure to ~ eply to a n o ffe r as a n actual reply) may b e u se d to t h eir is th at to I t - - pr ejudi ce in t he co urse o f the pr ocee d ing s . T hey should, as it wa s ex p r es sed Cla u son J i n S cott Paper Wo rks Ltd (19 2 7) 44 RPC 1 5 1 at 1 5 7 , b e encour a ged freely and frankly t o p ut thei r ca rds on th e j ustificati o n, in truth, essenti al ly r e sts o n t h e desirability of preven t ing s t a t e me n ts o r o ffers made in the cours e o f negoti a ti ons fo r se ttlem e nt b e ing b r ought bef or e th e c o u rt of t rial as a dm iss ion s o n the qu es ti ons o n the q u e stion of l ia bil i ty . " t abl e ... The p u bli c p o li cy The ru le is ve r y p e rvasive in terms o f betw e en pa rti es whi c h it is inten de d After c iting the a b ov e passage, Lor d J u s t i c e Grif fiths continue d: t o cry s t alis e. t h e s t atement s t h e n egotiat ions 'with o ut prejud ice ' to ma k e cle ar f r om the surroundin g circ um s t a n ces th at r u le appli es to ex clu de a l l n egotiations "'I' h e genu in e ly a imed a t settlement whe th e r oral or in writ ing fr o m bein g giv e n in eviden ce . A compe tent s o l i c i t or wi ll a l way s head a ny ne go t ia tin g co rre sponden ce bey ond do ubt that in the eve n t o f bei ng unsuc c ess f ul th e y are not t o b e re f erred to at the subsequ e nt trial. Ho we v e r, t he a ppl ic a tion of th e rule is n o t de pe nd e n t on th e u se of the o f the p hrase 'with o ut p re judi ce ' and if i t is c le a r the pa rt i e s were s eeking to c om promise t he act io n, evidence of t h e c ont e nt o f as a ge n e r al rul e , a nd ca nn ot be u se d to establ i sh an a dmi s s ion o r par ti al admis si o n. the Court o f Ap p eal that the probl e m in t he pr ese n t case s hou ld be r esolved by a lingui s ti c a pproa ch to the mea nin g of t h e phr a se bel i e v e th a t b r oa dly a n d res ol ve d by balancing t wo differ e n t pub lic int er e sts n a mely the p ubli c intere st in pro mo t i ng se t tl e me n ts a nd t he pu bli c in f ul l disc o v er y b e tw ee n pa rties to l iti gat ion." th ose n e g o ti a t ions will, n o t be adm iss ibl e at the tr ial I cannot ther ef ore ag ree wi th ' with o u t p re jud ice'. the q ue s tion ha s l o oked at more i n te r es t t o be I Gen er a ll y , q u alif i c a t i o n wo ul d b e and pri vi leged a nd i n adm i s si b l e . t h e n, lette r s Hi t h a " wit h o ut prejudi ce" i t be th o ught tha t a ny thi n g goe s , Le s t, h o we v er , Court of Ap p e a l h as r e strained the e xc e s s. The matter c am e be f ore th a t Co urt in Buckingh a mshi re Co unty Counci l V . Mora n [1989]2 All E. R . 22 5. The qu e sti on, it see ms is , wh e th e r proper ly b e mu c h so t hat i f r eg a r ded a s a n e g o ti at ing d oc ume nt. the d oc ument so marke d c ould i s in te n ded to asse rt a the d oc umen t t he So - -- rig ht or entitlement it will not be excluded simply beca us e it wears the lab e l ''without prejudic e ": "In Re Daintrey, exp Holt (1 893 ] 2 QB at 119 - 120 , [1891-4] All ER Rep 209 at 2 11 Vaughan Williams J, d el ivering the judgement of the co urt, stated the cond ition s for the applicatio n of the 'without prejudice' rule as follows: r ul e which excludes 'I n o u r opini o n th e do cuments mark e d "without p r ejudice" has no app lication unless some person is in dispute or negotiati on with another, and terms are offere d for the settlement of the dispu te or negotiation , a nd it see ms to us that the Ju dge must necessarily be entitled to look at the doc ument in order to determine whether t h e con ditions, under which alone the rule a p plies , ex ist . disputants without prejudice to engage i n dis cussion for th e purpose of arriving a t of peace, and unless there is a dispute or negotiations a nd an offer the rule has n o ap plicati o ns. · The rul e is a rule adopted to enable terms I f this s tatement represented the outer li mit s of the 'without prejudi ce ' rule, ther e co uld be no quest io n of its availing the defendant, since by h is letter of 20 January 1976, he wa s not offering terms for settle ment of any dispu t e or n ego tition subsisti n g between h i m and the counc il. e xpr essed the prin c iple in rather wider te r ms. Th is court in Sout h Shropshire DC v Amos [ 1 9 8 7 ] 1 All ER 3 40, [19 86 ]1 WLR 12 71 held th a t previlege can at t ac h to a d oc ument headed preju dice' ev en if it is merely a n in nego tiati o ns. As Par ker L J said [1 987 ] All ER 34 0, [1986]1 WLR 1 2 71 at 1 2 77 - 1 2 7 8) : L a ter authorities, however, have ' openi ng shot' 'with o ut 'It attaches to all documents which are ma rked "wi th out prejudice " and form part of negotiations, whether or not they ar e th emselve s offers, unless the pr iv ilege is def eat e d on some other ground s as was th e case in Re Daintrey, exp Holt. ' Mo re recently, the Ho use of the Lord s in Ru s h and Tompkins Ltd v Greater London Council 8 [198 8]3 All ER 73 7 at 740, (19 88 ] 3 WLR 939 at 942 per Lord Griffiths has stated th e general principle t h at the rule applies ' t o exclude all neg otiatio ns genui nely aimed at the settlement whether oral or in wr i ting from being given in evidence . · - - think the judge was right to regard the relevant I question as being whether or not the letter of 20 January 1976 could properly be regarded as a negotiating document" I am now looking at the letter, the basis of this application. With all f airness to Hr. Hsisha, there is no way in which the letter under consideration can be regarded as having been made in the course or for purposes of negotiations. The letter in both emphasis and purport was to assert that the indebtedness was in Kwachas and probably not in rands. for purposes of negotiations, it is not privileged under the principle enunciated by Hr. Msisha. It being made not I would have different considerati o ns if It must be appreciated that at the time of the letter the plaintiff had legal representation. The defendant had not. the alleged admission was made by the defendant after legal ad vice. Evans V. Bartlam [1937] A. C. 473,479 are pert n ent. I do not think that it would be fair to pin the defendant to this admission in view of his de f ence. I think the words of Lord Atki n in It could ~ery well be, as the plaintiff The defendant says that he personally did not import or export anything. He only helped exporters and importers to freight their goods. The suggestion being that the plaintiff dealt with somebody else and only pins the defendant because he handled the freight. alleges, his defence is a sham. defendant against the plaintiff. matter for trial. Even in the face of an admission, if the matter can be resolved by trial, in exercise of its discretion, the Court will not order summary judgment. The Court will look at all the circumstantances of the case (see the remarks of Kekewich J in Re Wright Kirke V. North[1895]2 Ch. 747, 750. Lord Justice Jessel, M. R., said: In Melloo V. Redbottom [1877)5 Ch . D 342, 344, It is the word of the I think that is a "We think that this js a case in which the Judge has a discretion, with the exercise of which we ought not to interfere. Thes e applications come o n upon an ordinary motion day, and it would be very inconvenient if parties were entitled as a matter of right to interfere with the ordinary motions by bringing on in this form questions which might be decided on demurrer or at the trial; and we consider that the Judge h as a discretion as to whether a case involves q uestions which can conveniently be disposed of on a mo t i on o f th i s k i n d . ·· In my opinio n the question whether the defendant bought and received the goods from the'plaintiff is - - It is not resolved by the If the defendant is not legally r e critical to the action. admission alleged. represented, it is possible and plausible that he thought he was liable to pay for his exporters and importers when in fa c t he was only liable to the extent of the freight and not to the price of goods. The answer could be that that is a lie. Credibility is better answered at the trial than by affidavits. would exercise my discretion in favour of the I·dismiss the summons with costs. defendant. I Made in Chambers this 5th day of January, 1994. D F Mwau REGISTRAR OFT ulu HIGH COURT