IN THE HIGH COURT OF MALAWI
PRINCIPAL
REGISTRY
CIVIL
CAUSE NO. 713 OF 1994
BETWEEN:
AMERICAN STORES LIMITED ……………………………PLAINTIFF
AND
ATTORNEY GENERAL …………………………………DEFENDANT
CORAM: KALEMBERA, DEPUTY REGISTRAR
Msisha SC, Counsel for the
Plaintiff
ORDER ON
ASSESSMENT OF DAMAGES
This is an order for
assessment of damages pursuant to the judgment of Mwaungulu J dated the 22nd
day of October, 2003 and a further order of the Judge made on 30th
day of March, 2004 directing that assessment of damages be made by the
Registrar.
The plaintiff, American
Stores Limited by Originating Summons issued on the 7th day of
April, 1994 commenced this action against the defendant, the Attorney General
seeking the determination of the following questions:
1. Whether the Forfeiture Act under which the
plaintiff’s assets were seized
was in contravention of the constitution and the Universal Declaration of Human
Rights.
2. Whether the application of the said Act to the
plaintiff was constitutional.
3. Whether the
failure to inform the plaintiff of the grounds for the application of the
provision of the said Act did not render the defendants’ action
unconstitutional and invalid as being contrary to natural justice.
4. Whether it was
lawful to apply the provision of the said Act to a limited company.
Further, the plaintiffs
sought for an order for an account for assets seized and disposed of by the
Government of Malawi.
The court granted the orders
prayed for and directed that assessment of damages be before the Registrar.
The defendants despite being
served with notice of appointment to assess damages did not attend the
assessment. The plaintiff brought one
witness.
Edward Augustine Kavwenje of
Kavwenje Associate, P O Box 1406, Blantyre testified on behalf of the
plaintiff. It was his testimony that he
is a fellow of Association of Chartered Accountants since 1993 and that he has
15 years experience in public auditing in which he has worked for various
auditing firms auditing for for organizations, companies, donor funded projects
etcetera. He informed the court that he
knows the plaintiff company as a result of an assignment he was given to work
out the current value of the company which was valued at K11,250,000 in 1983. He further informed the court that he considered
the valuation from two perspectives namely: rates of exchange in relation to US
dollars and interest rates prevailing in Malawi from 1983. In following the exchange rate approach he
informed the court that in 1983 US $1.00 was equal to K1.13 and in June 2004
the exchange rate is at US $1.00 for K110.
it was therefore his further testimony that in 1983 K11,250.000
translated to $9,956,000 which in 2004 converts to K1,095,160,000.00, that is
assuming the money was just locked up somewhere without being used, that is the
conservative approach.
He then took the court
through the interest approach. He
informed the court that he used this
approach to signify that if the money had been placed in a deposit earning
account it would have generated some money through interest. He therefore informed the court that he
considered a rate below the prevailing current bank lending rates, hence also
adopting a conservative approach. In
that respect he informed the court that between 1983 and March 1992he adopted a
rate of 15% per annum which translates to 1.25% per month and between April
1992 and April 2004 he adopted a rate of 35% which therefore translates to a
total accumulative interest of K1,722,320,485.00 which would have been earned. (He tendered Exhibits ‘EAK1’ sheet of
exchange rates; and ‘EAK 2’ sheet of computations).
This witness then informed
the court that during the period in question the rate on return on Treasury
Bills averaged over 40% and that if he had assumed this money was being traded
then the returns would be very high on capital from 35% to over 50%. Furthermore that when two approaches give
slightly different figures then one ought to take the average. In that respect he calculated the average of
the two figures which came to K1,408,740,243.
Mr Msiska, SC made a strong
and detailed submission on behalf of the plaintiff and I thank him for
assisting the court. He has therefore
submitted that all things considered the plaintiff ought to be awarded sufficient
damages to compensate for the deliberate acts of the State which grossly
interfered with and interrupted the running and growth of a business
venture. He has further submitted that
the plaintiff business was likely to have grown although the figures worked out
assume a static business. He finally
submits that in the instant case the plaintiff is entitled to
K1,408,740,243.00.
The matter arises as a
result of the seizure of assets of the plaintiff company by Government and
therefore damages awarded ought to be for conversion.
It has been stated by the
learned author of Mc Gregor on Damages, 14th edition at page 717
that the normal measure of damages for conversion is the market value of the
goods converted. This is said to be
well settled as per Lord Macmillan in Caxton Publishing Co. v.
Sutherland Publishing Co.
[1939] AC 178/190:
“The principle on
which damages for conversion should be awarded ……. Is well settled.”
The same principle is well
emphasized in the words of Greer, L.J. in Hall v. Barclay
[1937] 3 ALL ER 620 at p. 623 as follows:
“where you are
dealing with goods which can be readily bought in the market, a man whose
rights have been interfered with is never entitled to more than what he would
have to pay to buy a similar article in the market.”
The plaintiff in this matter
having lost its assets in 1983 if the same were to be restored they would be
entitled to the present market value of the assets. The problem arises where there is no market value or the market
value cannot be ascertained.
Nevertheless courts have held that the value may be calculated as at the
time of conversion or at any subsequent time because the plaintiff might have
had a good opportunity of selling the goods if they had not been detained Greening
v. Wilkinson [1825] 1 C9P. 625.
The learned author of Mc
Gregor on Damages 14th ed. P. 719 further submits as follows:
“….the soundest
approach is to start off with the value at the time of conversion as the prima
facie measure: this is in accord with the general principle that damages are to
be assessed as at the date of the wrong.
The effect upon this measure of damages of increases and decreases in
the value between wrong and judgment must then be considered….”
This view was further
enunciated and emphasized in Sachs
v. Miklos [1948] 2KB 23 at p. 39 where the court of Appeal stated
thus:
“The value of the goods converted at
the time of their conversion, is one thing…. but it does not follow that the
sum is the measure of the plaintiff loss.
The question is what is the plaintiff’s loss, what damage he has
suffered, by the wrongful acts of the defendants.”
The plaintiff as already
stated herein brought one witness who satisfied the court that he is an expert
witness. By employing the two
approaches be used he has assisted the court in coming up with
a figure representing in a way what the plaintiff’s company would be valued as
at of April 2004. He has explained to
the court as to the loss occasioned to the plaintiff as a consequence of the
defendants’ wrongful actions.
Furthermore this witness, to
the satisfaction of the court explained why he settled for the average of two
two figures from the two approaches he followed, to ascertain the loss incurred
by the plaintiff. His testimony was
unchallenged and therefore it ought to stand.
In the circumstances I am
satisfied that the loss occasioned to the plaintiff as a result of the
defendants wrongful act amounts to K1,408,740,243.00 and I consequently award
damages for conversion in that sum of K1,408,740,243.00 to the plaintiff with costs.
MADE in Chambers this 29th
day of June, 2004 at Blantyre.
S A Kalembera
DEPUTY REGISTRAR