IN THE MALAWI SUPREME COURT OF APPEAL
AT
BLANTYRE
MSCA
CIVIL APPEAL NO. 9 OF 199
(Being High Court Civil Cause No. 359 of 1998)
BETWEEN:
THE REGISTERED
TRUSTEES OF THE
CHRISTIAN SERVICE
COMMITTEE...........................................APPELLANTS
-
and -
MANDALA
BUILDING AND
CONSTRUCTION
COMPANY LIMITED....................................RESPONDENTS
BEFORE: THE
HONOURABLE MR JUSTICE KALAILE, JA
THE HONOURABLE MR JUSTICE TAMBALA, JA
THE HONOURABLE JUSTICE MRS MSOSA, JA
Kaliwo, Counsel for the Appellants
Sidhu, Counsel for the Respondents
Ngaiyaye, Official Interpreter
Marsen, Recording Officer
J
U D G M E N T
Kalaile, JA
The facts of the case are lucidly presented, save for
a few omissions, in the Respondent’s skeleton arguments. It is stated therein that the Appellants
engaged the Respondents to carry out construction work of an office block along
Angoni Road, off Zalewa Road, in the City of Blantyre. The project was agreed at a contractual sum
of K9.6 million. The Appellants and
Respondents duly entered into a contract for that purpose and thereafter the
Respondents embarked on the project in May 1995. The contract project is Exhibit BC1 and its full title is “Articles
of Agreement and Conditions of Contract for the erection of office complex
situated at Angoni Road, Blantyre”.
We shall refer to this document hereinafter merely as “the project
contract”.
The whole project contract was intended to be
completed within a period of sixty weeks, starting from May 1995 and ending on
or about 19th July 1996. Furthermore,
the Appellants appointed Messrs Kamwaza Design Partnership, Chartered
Architects as lead consultants to manage the building project and to render
architectural services for the project.
Messrs Fitzwilliam Partnership, who are Chartered Quantity Surveyors and
Consultants, were also appointed to provide quantity surveying services for the
entire project.
However, the project failed to get completed within
the contractual period of sixty weeks.
Apparently, there were cost over-runs, and the Appellants blamed the
delay and cost over-runs on the Respondents.
On the other hand, the Respondents blamed the delays and cost-over-runs
on the Appellants and Messrs Kamwaza Design Partnership as the sole cause of
the same. As a result of these
disagreements, the Respondents, on 1st August 1997, gave notice of termination
of the project contract. Pursuant to
the provisions of Clause 27(2) of the project contract, the Respondents
detained a quantity of building materials which had been supplied to them by
the Appellants. The proviso to Clause
27(2) of the project contract stated that -
“Provided that in addition to all other remedies the
contractor upon such determination may take possession of and shall have a lien
upon all unfixed goods and materials which may have become the property of the
employer under Clause 14 of the Conditions until payment of all monies due to
the Contractor from the Employer.”
In this context, the “Contractor” is the Respondents
and “Employer” is the Appellants. The
Appellants put the value of these materials at K1.95 million, which value the
Respondents did not dispute. The
Appellants wanted these materials back, but the Respondents declined to return
them, contending that they had a lien over them, in that the Appellants still
owed the Respondents arrears in payment in the sum of K3.5 million for the work
done.
It was argued, on behalf of the Appellants, that they
did not owe the Respondents the sum of K3.5 million, because in accordance to
Clause 31 of the project contract, only the architect is empowered to issue
certificates stating the amount due to the contractor from the employer. No such certificate was issued with regard
to the claim for the sum of K3.5 million.
In other words, this claim is not valid, as it failed to comply with the
specific provisions of the project contract.
The Respondents appeared to ignore the fact that only the architect
could issue such certificates and not the Quantity Surveyors’ valuations, which
seem to be the basis for the claim for the sum of K3.5 million. The letter from Kamwaza Design Partnership
which we reproduce below clearly highlights this point. The Quantity Surveyors valuations cannot be
a substitute for the architect’s certificates under the terms stipulated in the
project contract. This is how Mr
Kamwaza put it -
“16 July 1997
Mandala Building & Construction Limited
P O Box 2137
BLANTYRE
Attention Mr B Clow
Dear Sir
RE: OFFICE BLOCK ON ANGONI ROAD BLANTYRE FOR CHRISTIAN SERVICE
COMMITTEE
__________________________________________________________
Thank you for your letter dated 16 July 1997 on the
above. We have noted your interest to
take sides with the Quantity Surveyors but wonder what authority moral or
professional you have for such a stance?
From the Conditions of Contract at Clause 31, it is
clear that the architect is the only one empowered to issue certificates. It is also clear that the contractor must
furnish whatever proof is required to the architect. If you wish to ignore these provisions, we have no problem. We simply find it amazing that you are happy
to boast about how many
years you have been operating as contractors and yet
the most basic of roles in the conditions of Contract are either not understood
or simply ignored.
We are convinced that the sentiments raised in your
letter are based on emotion and not a reasoned assessment of the facts. We have asked for proof of various
items. Why is it so difficult to
provide that information to us?
When in previous correspondence and discussions you
have mistakenly referred to the Quantity Surveyors valuations as certificates,
we were tempted to believe it was a genuine oversight. But we note that this mistake continues to
feature in your letters. Is there a
problem in distinguishing the two?
It would seem that it is your wish to get your Interim
Certificates from the Quantity Surveyors.
Please feel free to do so.
Yours faithfully
KAMWAZA DESIGN PARTNERSHIP
D J KAMWAZA
cc: The Fitzwilliam Partnership
The Director -
Christian Service Committee”
Be that as it may, the Appellants were able to prove,
in terms of Clause 31 of the project contract, that they over-paid the
Respondents by K852,086.98. We
reproduce Exhibit SM4.B, which is the requisite certificate in terms of Clause
31 of the project contract -
“KAMWAZA
DESIGN PARTNERSHIP
CHARTERED ARCHITECTS
INTERIM CERTIFICATE
Employer: CHRISTIAN SERVICE COMMITTEE Job Ref:
P.O. Box 51294 Certificate
No. 12
LIMBE Issue
Date: 14/05/97
Valuation Date: 13/05/97
Contractor: MANDALA BUILDING & CONSTRUCTION TO EMPLOYER
COMPANY LTD TO CONTRACTOR
P.O. BOX
2137 TO ARCHITECT
BLANTYRE TO QUANTITY SURVEYOR
Works: OFFICE BLOCK
Situated at: ANGONI ROAD, BLANTYRE
Under the terms of the contract dated
in the sum of K9,644,00 for
the works named and situated as stated above.
We certify that the following interim payment is due from the employer
to the Contractor; and We direct the
contractor that the amounts of Interim or Final payments to Nominated
Subcontractors included in this Certificate and listed on the attached
statement of Retention and of Nominated Subcontractors’ values are due to be
discharged to those named:
Gross Valuation inclusive of the value of
works by nominated
Subcontractors and WCA and Fluctuations K 11,574,060.57
Less Retention which may be retained by the
employer as detailed
on the statement of Retention K 482,232.20
Less total amount stated as due in Interim
Certificate previously
issued up to and including Interim
Certificate Number 11 and WCA
recovery (K1,928,929.00) K 11,943,915.35
Amount due for payment on this Certificate (K 852,086.98)
(in words)
Credit balance in favour of Christian Service Committee of
EIGHT HUNDRED AND FIFTY-TWO THOUSAND AND
EIGHTY-SIX KWACHA NINETY-EIGHT TAMBALA
SIGNED: D. J. Kamwaza ARCHITECT”
This chronicle of events is what prompted the
application by the Appellants for a mandatory injunction compelling the
Respondents to deliver up possession of the building materials valued at K1.95
million to the Appellants. The
application was dismissed in the Court below and has now come before us on
appeal. On 4th June 1998, we granted a
mandatory injunction as prayed for by the Appellants and ordered that all
materials left in the hands of the Respondents for purposes of completing the
three-storey
building along Angoni Road in the City of Blantyre be returned to the
Appellants. We now give our reasons for
so ordering.
Two paragraphs in the High Court judgment are pivotal in this appeal and we
shall reproduce them in full in this judgment, since they relate to the law
which the trial Judge applied. The
first paragraph reads as follows -
“The Court has jurisdiction to grant a mandatory
injunction upon an interlocutory application:
Bonner v G W Ry (1883), 24 Ch.D, and Collison v
Warren (1901), 1 Ch.D 812. It
is indeed an exceptional form of relief.
The principles outlined by Lord Diplock in American Cynamid
Co related to negative injunctions, are not relevant to mandatory
injunctions. For a mandatory injunction
to be granted, among other things, the Court ought first to consider that the
case of the applicant is unusually strong and clear. A grant of a mandatory injunction is, of
course, entirely discretionary and, unlike a negative injunction, can never be
“as of course”. Every case must depend
essentially upon its own particular circumstances: per Lord Upjohn in Morris
v Redland Bricks Ltd (1970), AC 65.”
(emphasis supplied)
This is the law which the learned trial Judge applied
to the facts of this case. In applying the law to the facts, this is what the
learned trial judge observed -
“Although an impression may be had that the plaintiff
is seeking from the Court an order for both a negative and a mandatory
injunction, the proper view is that in fact the plaintiff’s application is in
respect of an order for a mandatory injunction. The effect of the orders sought by the plaintiff is that the
plaintiff wants a mandatory injunction.
This is the expressed view of Mr Maziya, the deponent of the affidavit
in support of the plaintiff’s application.
Yes, in paragraph 34 of his affidavit in support of the plaintiff’s
application herein, Mr Maziya humbly prays unto the Court that a mandatory
injunction should be issued by the Court, ordering the defendant to return to
the plaintiff the building materials and items in question. It is the view of the Court that indeed the
application of the plaintiff can only be said to be for a mandatory
injunction. That being the case, the
court must, before granting the order sought, consider whether the case of the
plaintiff now pending for determination before the Court is, or ought, to be
viewed as being one that can be said to be unusually strong and clear. A perusal of the affidavit evidence of the
parties does not create that impression to the Court....Finally, it is the
well-considered view of the Court that the plaintiff can be compensated in
damages. No submission was made on
behalf of the plaintiff that the defendant could not be compensated in damages
and that the defendant would not be able to pay them, if ordered by the Court
so to do.”
It is this judgment which the Appellants are
dissatisfied with, and the first point of law which the Appellants disagree
with are the words, or rather, the proposition that -
“The Court must, before granting the order sought,
consider whether the case of the plaintiff now pending for determination before
the Court is, or ought, to be viewed as being one that can be said to be
unusually strong and clear.”
Although what was said by Lord Upjohn in Morris
v Redland Bricks Ltd was good law in 1970, it would appear that by the
eighties the law had taken a different course.
In 1978, the House of Lords reviewed the law in connection with
interlocutory injunctions, thus in the case of NWL Ltd v Woods (1979),
3 All ER 614, per Lord Diplock -
“In assessing whether what is compendously called the
balance of convenience lies in granting or refusing interlocutory injunctions
in actions between parties of undoubted solvency the judge is engaged in
weighing the respective risks that injustice may result from deciding
one way rather than the other at a stage when the evidence is incomplete. On the one hand, there is the risk that if
the interlocutory injunction is refused but the plaintiff succeeds in
establishing at the trial his legal right for the protection of which the
injunction had been sought he may in the meantime have suffered harm and
inconvenience for which an award of money can provide no adequate
recompense. On the other hand there is
a risk that if the interlocutory injunction is granted but the plaintiff fails
at the trial the defendant may in the meantime have suffered harm and
inconvenience which is similarly irrecompensable.”
In a later judgment of 1986, Hoffman, J granted
a mandatory injunction where the following were the facts of the case. The defendant was an English company engaged
in film distribution by means of financing and acquiring rights in films which
it then distributed worldwide through sub-distributors in different
countries. In order to effect
distribution in Italy the defendant entered into a contract with R, acting on
behalf of the plaintiff, a company which R later incorporated in Guernsey for
the purpose of the contract. Sometime
later, following a change in the defendant’s management, the defendant wished
to renegotiate the contract with the plaintiff with a view to splitting
distribution proceeds between the defendant and the plaintiff on terms much
less favourable to the plaintiff than previously. The new terms caused a dispute to arise between the parties, and
the defendant, claiming that the plaintiff was in breach of the contract,
refused to send to the plaintiff dubbing material for certain films, with the
result that the plaintiff was unable to distribute them for exhibiting in
Italy. The plaintiff accordingly issued
a summons seeking, inter alia, an interlocutory mandatory injunction
requiring the films to be delivered to the plaintiff.
Hoffman, J
held that in determining whether to grant an interlocutory injunction, the
question for the Court to consider was not whether the injunction sought was
mandatory or prohibitory, but whether the injustice that would be caused to the
defendant if the plaintiff was granted an injunction and later failed at the
trial outweighed the injustice that would be caused to the plaintiff if an
injunction was refused and he succeeded at the trial. This seems to us to be the correct proposition of law to apply.
The main or strongest argument which Counsel for the
Respondents submitted was that which the trial Judge summarised in the following
terms in his judgment -
“Again, the decision of the defendant to hold unto the
building materials supplied to the defendant during the time when the defendant
was working on the project, does appear to be justified by the conditions of
the building contract which accord to the defendant a right of a lien in the
circumstances.”
This is, prima facie, correct, in that the
proviso of Clause 27(2) on page 15 of the project contract does give this right
to the Respondents. But then, this right
is dependent upon the Respondents satisfying the other provisions of the
project contract, such as Clause 31, which stipulates that at the period of
interim certificates named in the appendix to these conditions the architect
supervising officer shall issue a certificate stating the amount due to the
respondents, from the appellants, and the respondents shall, subject to the
deposition of a satisfactory performance bond with the architect supervising
officer, be entitled to payment thereafter within the period named in the
appendix to these conditions.
We are aware that the Respondents were unhappy with
the way Kamwaza Design Partnership conducted their duties, but when it was
proposed that a different firm of architects should take over by evaluating
what Kamwaza Design Partnership had done, the Respondents’ response was, in our
opinion, a prevarication. This can be
seen by reading Exhibit SM 12, which is dated 19th December 1997. We now reproduce that letter, which reads -
“M A N D A L A
__________________________________________________________
EDC/jm
19 December 1997
Christian Service Committee
P O Box 51294
LIMBE
Dear Sirs
CSC OFFICE BLOCK ON ANGONI ROAD
We acknowledge receipt of your letter of 17 December
1997. We confirm that we are currently
in the process of examining Messrs. Chimangafisi and Partners valuation dated
30 November 1997 and have provided them with the labour register as they
requested.
However, there are major differences between their
valuation and our claim which need to be agreed. Some of these we detail as follows :-
1. Roofing. The
waterproofing was carried out by a specialist subcontractor who has been paid
by us for what he had done. He has
stated that the Dermabit used is equal to Derbigum and has issued guarantees to
that effect. (These were sent to
Kamwaza Design Partnership under cover of our letter of 15 July 1997). We believe the Project Architect is being unreasonable
in refusing to sanction this change.
Dermabit has been extensively used in projects within Malawi.
2. Ceilings. Re
rating of Rhinoboard. As the original
measured material was cellotex it follows that the gypsum ceiling board
substitution has to be re rated. It is
not a fluctuation.
3. Ballinstrading.
The ballinstrading was not completed at the time the contract was
determined. There had been numerous
alterations requested by the architects.
As the work is incomplete, we believe that it would be proper for B
& C to be allowed to finish should they so wish. However, they must be paid for what they have already done and
this should be reflected in the final accounts.
4. Electrical sub-contract. The last payment we received - Cert. 11 -
included K564913,75 as the gross payable to Everglo. This was paid within 14 days of our receipt of payment. We did not receive any further payment
after Certificate 11 so we could hardly be expected to make further payment to
this nominated sub-contractor.
5. Materials on/off site. There were insufficient materials supplied
by the client in terms of plumbing materials. The items included as materials on site are in our CSC Store
and will be required to complete the project.
6. Kitchen Units.
The kitchen units were made redundant by the change in layout - it was
just an excuse to say they were of unacceptable standard. However, we will use them elsewhere so I
agree that they can be excluded.
7. Additional Reinforcement. No allowance has been made for waste and wrongly supplied bars
etc. Our claim for this was carefully
calculated and we will expect full reimbursement.
8. Fluctuations.
The labour register has been given to the Q.S. The 20% mark-up on fluctuations was agreed - refer to minute
1.12.03 of the pre contract meeting.
It is apparent from the above, that there is still a
fair amount to do before the account can be stated as agreed. We believe there is still a considerable
amount of money due to us and in terms of the contract will maintain our ‘lien’
on materials until we have had full and final settlement.
Yours faithfully
E D Campbell
COMPANY SECRETARY
cc : Kamwaza Design
Chimangafisi & Partners”
It should also be noted that the Respondents wrote the
above-cited letter on 19th December 1997, whereas they terminated the contract
on 1st August 1997, that is to say, four months earlier. This is clearly unacceptable conduct on the
part of the Respondents. Had it been
that this letter was written before the Respondents terminated the project
contract, we would have been less hasty in granting the mandatory injunction as
we did on the 4th of June 1998. This is
so, as it would have shown that the Respondents took all possible steps to try
to accommodate the viewpoints of the Appellants and or Kamwaza Design
Partnership. But the way the
Respondents conducted themselves shows that they were prepared to terminate the
project contract, and, at the same time, retain the building materials on site,
regardless of the concerns expressed by the Appellants.
Perhaps the following paragraph from Halsbury’s
Laws of England aptly summarises our approach in the manner in which we
came to our decision in this matter -
“Conduct of Parties. In considering whether an interlocutory injunction should be
granted, the court has regard to the conduct and dealings of the parties before
application was made by the plaintiff to preserve and protect his right, since
the jurisdiction to interfere, being purely equitable, is governed by equitable
principles.” Halsbury’s Laws of
England 4th Edn. para 957, at page 540.
In his judgment, the trial Judge placed reliance on
the principle that a court ought first to consider that the case of the
applicant is unusually strong and clear when granting a mandatory
injunction. This is indeed true, but
this is not the only principle that applies.
Halsbury’s Laws of England, 4th Edn., at para 948, demonstrates
that there are other principles which would apply with equal force in granting
mandatory injunctions. The said
paragraph reads, at page 534, as follows -
“Mandatory injunctions on interlocutory
applications. A mandatory
injunction can be granted on an interlocutory application as well as the
hearing, but, in the absence of special circumstances, it will not normally be
granted. However, if the case is
clear and one which the court thinks ought to be decided at once, or if the
act done is a simple and summary one which can be easily remedied, or if the
defendant attempts to steal a march on the plaintiff, such as where, on receipt
of notice that an injunction is about to be applied for, the defendant hurries
on the work in respect of which complaint is made so that when he receives
notice of an interim injunction, it is completed, a mandatory injunction will
be granted on an interlocutory application.”
In our considered opinion, it is proper to grant a
mandatory injunction in the present circumstances, as we are of the view that
the case is perfectly clear and one
which we feel ought to be decided promptly, especially since there is no
evidence that either party is insolvent.
Again, it is clear to us that the Respondents have not fulfilled their
contractual obligations under Clause 31 of the project contract. It is equally clear that the Respondents did
not act bona fide by presenting their side of the story in writing prior to
terminating the project contract as evidenced by the letter dated 19th December
1997, which was signed by the Company Secretary, Mr E D Campbell. Whereas the Appellants may not have been
totally blameless either, we find that the Respondents cannot avail themselves
of the provisions of Clause 27(2) by retaining
possession of building materials which were bought by the
Appellants. Let the Appellants complete
the building structure, then the Respondents can enforce their rights, if any,
thereafter.
It is for these reasons that we decided to grant the
mandatory injunction which the appellants prayed for in these proceedings.
DELIVERED in open Court this 11th day of August 1998,
at Blantyre.
Signed: ......................................................
J B KALAILE, JA
Signed: ......................................................
D G TAMBALA, JA
Signed: ......................................................
A S E MSOSA, JA