IN THE HIGH COURT OF
MALAWI
PRINCIPAL REGISTRY
CIVIL CAUSE NO. 3456 OF
1999
BETWEEN : -
SATEHZAN LIMITED
........................................ PLAINTIFF
- and -
MOBIL OIL (PVT) LIMITED
............................ DEFENDANT
CORAM -
CHIMASULA PHIRI, J.
K.W. Chibambo/P.C. Nkhono of
counsel for defendant/applicant
M.F. Tsingano of counsel for
plaintiff/respondent
Mrs M. Katunga - Court Clerk
RULING
The defendant applies to
this court for an order to discharge an ex-parte
interlocutory injunction obtained on 5th November 1999 but dated 8th November
1999. The plaintiff moved the court to
order and direct that an injunction be granted requiring the defendant to
vacate the filling station premises known as Plot No. 218 at Monkey Bay in
Mangochi within 10 days of the service of the order. Secondly, that the defendant whether by its servant’s of agents
refrain from trespassing upon the said premises. The court so directed as prayed for by the plaintiff on the usual
undertaking as to damages as well as granting opportunity to the defendant to
have the ex-parte order set aside by bringing in an inter-partes
application on 2 clear days notice.
This present summons
seeks an order to discharge the ex-parte order on the
grounds that the plaintiff suppressed material facts when it obtained ex-parte
the interlocutory injunction and/or that in any event the plaintiff is not
entitled to the right it seeks to protect by the said injunction. There is an affidavit of Mr Nkhono sworn on
19th November, 1999 to which there are exhibited a number of documents and
another affidavit sworn on 17th November 1999.
The plaintiff filed an affidavit in opposition contending that the
plaintiff disclosed all the relevant material facts as far as its cause of
action was concerned. Therefore the
plaintiff denies that it suppressed material facts in its application for an
ex-parte injunction order.
The plaintiff went further to argue that the under-lease entered into
between Malawi Railways Limited and the defendant expired on 30th September
1991 and that the document entitled Letter of Intent upon which
the defendant relies as an agreement for a 10 year lease was but only indeed a
letter of intent and no more.
Furthermore, that if the letter of intent be taken to be a lease
agreement, the same was subject to Government approval and no such approval
having been obtained, the lease agreement for 10 years never came into existence
at all. The plaintiff has also
contended that the defendant has not expended K2,019,600.00 for developments on
the premises and that if at all any such expenditure has been incurred, the
defendant is taking into account its equipment such as fuel pumps and
under-ground tanks which the defendant can easily remove and use again
elsewhere.
Finally, the plaintiff
has contended that it is the beneficial owner of the premises and that this has
been acknowledged by the defendant as demonstrated by the defendant’s payment
of rent directly to Malawi Lake Services Limited and also negotiating issues
pertaining to the said property directly with Malawi Lake Services
Limited. Furthermore that Malawi Lake
Services Limited as Beneficial owner and Malawi Railways Limited as a legal
owner exercised their proprietary rights by choosing the plaintiff as their
prospective lessee and ministerial consent is being awaited. The plaintiff prays that the application be
dismissed and that the interlocutory injunction herein should be allowed to
remain in place until after determination of the issues in the substantive
action.
The facts upon which the
ex-parte order was made are contained in the affidavit of Zanil Sacranie,
General Manager of the plaintiff company.
It is deponed therein that sometime unknown to the deponent, the
defendant entered into a lease agreement with Malawi Railways Limited whereby
the premises in dispute were leased to the defendant. Thereafter Malawi Railways Limited was restructured and a Limited
Company called Malawi Lake Services Limited was incorporated. Under the reconstruction programme Malawi
Railways Limited held the said premises in trust for Malawi Lake Services
Limited and will in due course assign the same to Malawi Lake Services
Limited. It has been contended in the
affidavit that the lease between the defendant and Malawi Railways Limited
expired some time unknown to the deponent but that the defendant has continued
occupying the premises. Furthermore
that following the expiration of the lease aforementioned, the plaintiff
approached Malawi Railways Limited and Malawi Lake Services Limited for a lease
of the same premises. The response was
favourable and plaintiff was offered a 15 year lease commencing from 1st October,
1999. The Agreement is exhibited.
When the defendant got
wind of the negotiations between the plaintiff and Malawi Lake Services
Limited, the defendant requested for a renewal of the lease entered into
between itself and Malawi Railways Limited. The plaintiff exhibited a letter from Malawi Lake Services Limited
turning down the defendant’s offer.
Following this situation, the relationship between the plaintiff and the
defendant has soured and the defendant has refused to recognise the plaintiff as
new lessee of the premises. The
plaintiff wishes the defendant vacated the premises and that the plaintiff
sub-leases the same to Caltex Oil (Malawi) Limited, another oil company to
continue with similar business of the defendant.
Practice note 29/1/17 of
Order 29 Rule 1 of the Rules of the Supreme Court sets out a number of
circumstances under which a court can discharge or dissolve or waive an
ex-parte injunction order. This court
has on previous occasions dealt with this subject of discharging interlocutory
injunction in several cases including - Jimmy Koreia vs Designated
Schools Board Civil Cause No. 1908 of 1995 (unreported); Press Agribusiness Limited vs Farmers
World Limited - Civil Cause No. 284 of 1997 (unreported); ICL (Malawi)
Limited vs Lilongwe Water Board - Misc Civil Case No 64
of 1998 (unreported); Thusitha Perera vs Asoka Dhanapala - Civil
Cause No. 1597 of 1998 (unreported) and Brian Mungomo (MCP) and Goodwin
Mvula (AFORD) vs The Electoral Commission - Misc. Civil Application No. 23 of 1999 (unreported). In all these cases it is clear that if a
material fact has been suppressed the court can discharge or dissolve the ex-parte
order either on an ex-parte application or where the court
directs that there be an inter-partes application, on the
hearing of such an application. The
approach of the court to an application of this nature has always been a
consideration of the original application in the light of the new facts and
determine whether the new facts would lead the court to decide
differently. If the decision would be
different, the suppressed information is material. If the decision would not change even in the light of the new facts,
then the suppressed facts are not material.
In considering the totality of the facts if the ex-parte
order is to be upheld it must be shown that the plaintiff has a good arguable
claim to which it seeks to protect and that there is a serious question to be
tried. The remedy is granted in the
discretion of the court. It is an equitable
remedy and where damages would be sufficient remedy, the order would normally
be denied. The purpose of having such a
remedy is to ensure that a status quo is maintained until
the rights of the parties are determined through the trial. The case of American Cynamid
(1975) AC 396 is the bedrock of judicial intervention for interlocutory
injunctions. Damages are said not to be
sufficient if the wrong is irreparable or outside the scope of pecuniary
compensation or if damages would be very difficult to assess. The court will always consider preservation
of the status quo and abatement of the wrongful act or
deed. It will be, generally, material
to consider whether more harm will be done by granting or by refusing an
injunction order. In particular it will
usually be wiser to delay a new activity rather than to risk damaging one that
is established. See - Granada
Group Limited vs Ford Motor Co. Limited (1972) FSR 103.
In the present case the
issue of whether or not the Letter of Intent is a mere letter of
intent or an actual agreement is a triable issue and requires factual evidence
to decide its status. This Letter of
Intent provided for a 10 year Lease from the expiration of the initial lease agreement
between the defendant and Malawi Railways Limited. In the affidavit of Sacranie the duration of the lease which is
said to have expired was not disclosed either wilfully or intentionally or
negligently or through lack of information on the part of the plaintiff. The court thinks that the plaintiff did so
deliberately or intentionally because as a prospective lessee the plaintiff
should have carried out a diligent inquiry with Malawi Lake Services Limited to
ensure that there were no encumbrances on the title for these premises. If the court had been told about the letter
of intent and that it was that document which governed the relationship between
the defendant and Malawi Lake Services Limited and Malawi Railways Limited, the
court would not have granted the interlocutory injunction order. The situation would have been that the
defendant is claiming to be a lessee under the agreement duly executed by the
defendant and Malawi Railways Limited in 1988 while on the other hand the
plaintiff is claiming to be lessee under a Lease Agreement between Malawi Lake
Services Limited and Malawi Railways Limited on the one hand and Satehzan Car
Hire Limited on the other. This
contract was executed by Malawi Lake Service Limited and Satehzan Car Hire
Limited. The Malawi Railways Limited
which is said to be the Trustee for Malawi Lake Services Limited did not
execute. Furthermore, no relationship
has been established between the plaintiff and Satehzan Car Hire Limited i.e.
are they one and same entity or is the plaintiff a beneficiary of Satehzan Car
Hire Limited. I have no doubt that both
the plaintiff and defendant contend that they entered into a long term lease
for the premises where ministerial consent should have been sanctioned. Both do not as yet have such ministerial
consent. The plaintiff contends it has
applied for one while the defendant contends that Malawi Railways Limited
and/or Malawi Lake Services Limited should not use lack of ministerial consent
to vitiate the contract because that would be tantamount to reliance on self
induced frustration of contract. I am
of the view that the plaintiff is not an innocent purchaser for value without
notice. Equity does not assist a volunteer. Furthermore, he who seeks equity must come
with clean hands. The plaintiff
deliberately chose not to inquire into the status of the defendant visa
vis the premises in dispute.
The law requires a search spanning 40 years back for one to be assured
of a clean title. Even where the
dealings between the defendant and Malawi Railways Limited were not registered,
the plaintiff or Satehzan Car Hire Limited or Satehzan Filling Station Limited
should have inquired from the defendant to say the least, because the plaintiff
had knowledge that the defendant had a prior lease agreement with Malawi
Railways Limited and was still in occupation even after there were allegations
that the lease had since expired. The
plaintiff cannot claim any better title than the defendant. The balance of convenience would favour that
the defendant should still remain in occupation until the issue is determined
by the court. On that score alone I
would discharge the interlocutory injunction order.
The other point raised
by the defendant is that the plaintiff does not have any right that would
require protection by injunction order.
The argument is that Malawi Railways Limited is still the registered
owner and beneficiary of these premises according to search done at the Deeds
Registry. The argument goes on that
even following a restructuring programme of Malawi Railways Limited and the
birth of Malawi Lake Services Limited there should have been a deed of
assignment conveying the legal title.
Therefore, at most what Malawi Lake Services Limited inherited was
beneficial interest of an equitable nature.
Therefore, following the non-execution of the Lease Agreement by Malawi
Railways Limited, no legal title passed to Satehzan Car Hire Limited. As such Satehzan Car Hire Limited or the plaintiff have no legal right which
should be protected by an injunction order.
Under order 29 of the Rules of the Supreme Court there must be a legal
right which an application for interlocutory injunction should seek to
protect. On the face of it, the
plaintiff does not have a legal right unless it had joined Malawi Railways
Limited, Malawi Lake Services Limited and Satehzan Filling Station Limited as
co-plaintiffs. There cannot be any
dispute about the plaintiff’s equitable right to the property but that is not
good enough to sustain the injunction order as it came after the defendant’s
existing right and is not of a superior nature.
Lastly, the plaintiff
has contended that the defendant has put little development on the premises
save for the defendant’s equipment comprising fuel pumps and under-ground fuel
tanks. Suffice to say that this
argument is misplaced and misguided because when one talks of development in
relation to a filling station one talks of these equipments. Therefore it is clear that the defendant has
made substantial contribution towards the enhancement of the monetary value of
the premises and even without legal title to the premises equity would come to
its aid and restrain Malawi Railways Limited and or Malawi Lake Services
Limited from evicting the defendant from these premises before the expiry or
collection of the defendant’s fruits of its investment. This is an area where equity would follow
the law with dragging feet. The remedy
of injunction being equitable, I would have exercised my discretion in favour
of the defendant and discharged the injunction order on that ground too.
The issue of costs is
discretionary, Costs normally follow the event. In the circumstances of this case I do not find any reason why
the general rule should not apply. I order that the plaintiff will pay costs of
and incidental to this application.
However, the issue of the undertaking as to damages made by the
plaintiff will still pend until the determination of the main action.
MADE IN CHAMBERS this 30th day of
November, 1999 at Blantyre.
CHIMASULA PHIRI
JUDGE