Adam v Stanbic Bank Limited (Commeral Casese No. 27 of 2007 ) [2008] MWCommC 15 (17 June 2008);



















Kalanda, of Counsel for the Plaintiff

Masumbu, of Counsel for the Defendant

Kampondeni, Official Recorder







Dr. Mtambo J.



This matter was commenced in the Principal Registry as Civil Cause Number 1843 of 2006. By his Amended Statement of Claim, the Plaintiff claims from the Defendant the sum of US $36,000.00 being market value of farm equipment to wit a Mercey Ferguson and a Ford tractor and a plough allegedly wrongly converted by the Defendant in the year 2000 one year after default by the Plaintiff to service an overdraft, the sum of US$229,250.00 being money lost through non use of the Plaintiff’s farm in Balaka after the Defendant seized the Plaintiff’s said farm equipment and interest on the aggregate sum of US$229,250.00 at the rate applicable on treasury bills from April 2002 till judgment. The case was subsequently transferred to this division by consent of both parties.


In the Principal Registry, the Defendant had prior to the Plaintiff’s action, sued the Plaintiff for K1,259,229.00 unpaid overdraft balance on an overdraft of K704,970.00 advanced to the Plaintiff in the 1996/97 tobacco growing season. This suit was styled Civil Cause Number 383 of 2001 and the Defendant claims that with interest the due sum as at 18th March 2008 stood at K8,208,715.37 plus K414,111.89 further interest. The Defendant’s case was not transferred to this division as the parties are still awaiting the ruling of the Deputy Registrar on the simple issue of consolidation of actions. However, when I granted the Defendant leave to amend its defence in this court at the acquiescence of learned counsel for the Plaintiff, the Defendant discontinued the action in the Principal Registry and put up its case in the form of a counterclaim in the present case. I must state that I did not consolidate the Defendant’s action in the Principal Registry with the action in this division as the Deputy Registrar at the Principal Registry is still seized of the matter and yet to act on the Defendant’s application and that case was not transferred to this division. Consequently, no order of consolidation was prepared by the Defendant for endorsement by the court.


It is not in dispute that the Defendant advanced money to the Plaintiff by way of overdraft and the securities given were a 225 hectare estate known as Chambo estate in Balaka and a fixed deposit of K200,000.00. A security document was prepared and signed by the parties and nowhere therein or in any other document are the two tractors and a plough which the Defendant seized in Balaka mentioned as security.


However, after the seizure of the farm machinery by the Defendant, the Plaintiff wrote a letter to the Defendant two months later stating that he would be prepared for the Defendant to sell the same and apply the proceeds towards extinguishing the overdraft. Two years later, the Plaintiff wrote another letter to the Defendant enquiring how much was realized from the sale of the farm machinery. It must be emphasized that in both letters well before the Plaintiff conceived the notion of suing the Defendant for conversion, the Plaintiff referred to the taking of the farm machinery as a seizure or a snatch. Nevertheless, the Defendant argues that the letters if not qualifying to be express authority to seize and sell the farm equipment amount to acquiescence of the seizure and sale.


The Plaintiff only took legal action against the Defendant in the tort of conversion some six long years after the seizure though within the limitation period. As such, the Defendant in defence argues that the delay in complaining of the seizure and instituting legal action operates as an estoppel preventing the Plaintiff from claiming that the Defendant is guilty of conversion.




By his Amended Statement of Claim, the Plaintiff claims specified amounts of money in the tort of conversion as being market or replacement values of the two tractors which figures were procured from quotations obtained by the Plaintiff. No figures are given with regard to the plough. The Plaintiff also claims specified amounts of money as being profits he could have made had the Defendant not seized the farm equipment which action he claims rendered him unable to farm. In its Amended defence, the Defendant denies that the farm machinery was taken without the Plaintiff’s consent or in the alternative that the Plaintiff acquiesced to the taking of the machinery by his conduct of writing the two letters to the Defendant the first stating the Plaintiff was prepared to have the Defendant sell the machinery seized or snatched to liquidate the overdraft and the second enquiring how much was raised by the Defendant from the sale of the machinery. With respect to the claim for loss of profit, the Defendant further denies liability arguing inter alia that the Plaintiff failed to mitigate loss by staying idle without cultivating by say using hoes.







  1. Whether on the facts the Defendant’s action amounted to conversion.


  1. Whether the Plaintiff’s two letters to the Defendant amounted to authority to seize or snatch the farm equipment.


  1. Whether the taking of time to write to refer the Defendant’s action as a seizure or snatching and the taking of six years to institute legal proceedings for conversion amount to estoppel.


  1. Whether a matter which is discontinued in one division of the High Court where it was commenced within the limitation period for the tactical move to have it re-filed albeit in a different form out of time in another division handling a related matter is caught by the Limitation Act.






In Hollins v Fowler (1875) L.R. H.L. 757, it was held that any act which is an interference with the dominion of the true owner of goods is conversion. Any one who without authority receives or takes possession of another’s goods with the intention of asserting some right or dominion over them, or deals with them in a manner inconsistent with the right of true owner is prima facie guilty of conversion.


It goes without saying that the Plaintiff in an action for conversion must at the outset prove that the property the subject matter of the action is owned by him. In the case of motor vehicles, that will be in the form of registration records from the Road Traffic Department in accordance with the Supreme Court decision in Attorney General v Mishack Soldier Kajanga MSCA Civil Appeal Number 3 of 2003 relating to the prescribed mode of proof under Section 139(1) of the Road Traffic Act 1977. Clearly, it is only the true owner of the property or his legal representative who can sue for conversion or against who the defence of estoppel can be invoked.


Learned Counsel for the Plaintiff Mr. Kalanda sought to rely on the case of Mtawali v New Building Society [1992] 15 MLR 311 (HC) where the Defendant employed the Plaintiff as an accountant and advanced him a loan to purchase a car. The car loan agreement provided that the Defendant would deduct any outstanding balance from the Plaintiff’s terminal benefits in the event that the Plaintiff left his employ before finishing repaying the loan. After dismissal, the Defendant seized the car under protest by the Plaintiff who still kept the car keys. The Defendant had also made a threat to sell the Plaintiff’s houses which were under mortgage with the Defendant as a consequence of which the Plaintiff wrote a letter authorizing the sale. In an action for conversion, the Plaintiff succeeded on the basis that the letter of authorization was not freely given.


Mr. Kalanda also sought to rely on Msowoya v Malaw Entrepreneurs Development Institute (MEDI) [1977] 1MLR 278. The facts of the case as narrated by Counsel being that the Plaintiff was a former employee of the Defendant who obtained a car loan from the Defendant. Before the Plaintiff finished paying the loan through deductions from his salary, he found another job and left his employ but took the car with him. Upon failure by the Plaintiff to repay the loan, the Defendant sent his employees to the Plaintiff to take the car. The Plaintiff wrote a letter to the Defendant stating that he wished to surrender the car MZ 1223 to have the money deducted for the car loan refunded. The Defendant sold the car but refused to give the Plaintiff a refund arguing that the same would cater for the period of use during which the Plaintiff had the car. The Plaintiff’s action for conversion succeeded on the ground that since the condition of the surrender of the car was for refund of the deductions which was not met, the surrender of the motor vehicle failed.


Learned Counsel for the Defendant Mr. Masumbu’s response is that inter alios the matter whether the Defendant’s sale of the seized tractor and failure to apply the proceeds to reduction of the loan rendered any surrender of the farm machinery inoperative was not raised in the pleadings and as such it is not proper to raise it in the submissions.




Where a person by his conduct leads another to believe that he will not insist on his strict legal rights intending that other to act on the premise and that other so acts, then the courts will not allow that person to renege on that position where that would be unfair. The principle was stated by Lord Denning in Plasticmada Societa Per Azioni v Davidson Manchester Limited (1952) Lloyds Report 527. The equitable underpinning of this rule is discernible from the words of Tambala J.A. in Leasing and Finance Company of Malawi Limited v Katundu Haulage Limited MSCA Civil Appeal Number 200 of 2000 where the learned judge remarked:


If a man has so conducted himself that it would be unfair or unjust to allow him to depart from a particular state of affairs which matter has been taken to be settled or correct the courts will interfere and stop that man from going back to the original agreement’.


Limitation of Actions


Under section 4(1) of the Limitation Act Cap 6:02 of the Laws of Malawi, an action founded on contract shall not be brought after the expiration of six year from the date on which the cause of action arose. According to Gomani t/a Icegepco v City of Blantyre [1990] 13 MLR 120, in actions founded on contract, the cause of action arises from the moment of breach. In my view, the intention of this rule was to prevent people from sitting on their laurels and not to cover the scenario where a person files a case as a claim in time and then discontinues the case to file the same cause in another division as a counterclaim for tactical purposes of having a court handling a complaint arising out of the same facts dispose of the two maters simultaneously.


I must lament that I find the conduct of Counsel for the Plaintiff in relation to the argument of limitation of actions very disturbing. When both counsel appeared before me on the date I granted the Defendant leave to amend its pleading, the Plaintiff’s counsel agreed that the Defendant’s matter languishing in the Principal Registry could be handled in the form of a counterclaim in this division. After the Defendant acted on that understanding though perhaps not cast in stone, counsel now wishes to shift the goal posts and is bent on winning the case at all costs without being bothered by an iota of remorse on the evident tragic demise of the word and honour of an officer of the court.


General and Special damages


Special damages are those claimed with specificity and in many cases relate to actual sums expended and/or anticipated income and need to be pleaded and strictly proved. If not, they will not be awarded. On the other hand, general damages are not claimed with specificity and if proved, the court normally orders assessment by the Registrar. Thus, in NBS Bank v BP Malawi Ltd. Commercial case number 12 of 2007, this court held that a Plaintiff who was unable to prove special damages for loss of banking business when the Defendant wrongly refused to vacate the Plaintiff’s rented premises which the Plaintiff wished to convert into a customers’ car park was not entitled to the same. It was further held that the court could not order an assessment of damages as the matter related to special as opposed to general damages.


A claim for loss of income in the growing of tobacco due to seizure of farm machinery in the manner it was proferred in this court is a claim for special damages where specific figures relating to previous and future income and expenditure must be adduced in evidence. In Chikaoneka t/a Madalitso Clothing Factory v Indefund Limited MSCA Civil Appeal number 22 of 2001 Mtegha J. A., in a case where old business records were not produced to the court, emphasized the need for such records in claims for loss of business. And in Zimpita and Another v Okoyo Garage [1991] MLR HC, Banda J. disregarded evidence claiming loss of profit of between K6,000.00 and K7,000.00 given by a wife based on what her deceased husband had told her. The wife did not say whether it was gross or net profit. She was unable to say what expenses were incurred in the business and it was clear that she was not fully aware of the business transactions the deceased was engaged in.




The Plaintiff called three witnesses. These were the Plaintiff himself, Mr. Mark Adam as PW2, and Kamando Adam as PW3. Although with some variations, the gist of their evidence in relation to the farm equipment was that a Mr. Chirambo, the Defendant’s agent took it without the consent of the Plaintiff. The Paintiff and PW2 stated the matter of the seizure of the farm machinery was reported to Balaka Police when subsequent developments turned suspicious and the police referred them to the Defendant’s head office in Blantyre. Several correspondence from the Plaintiff to the Defendant enquring on the fate of the seized farm implements and the loan account had previously received no response from the Defendant.


When the Plaintiff and PW2 went to Blantyre, they met with the Defendant’s then legal counsel Mr. Bandawe in the presence of Mr. Chirambo the officer who seized the machinery. At this meeting, Mr. Bandawe is said to have admitted that the seizure of the machinery was wrong and advised the Plaintiff to get quotations for reimbursement. Settlement was not reached because Mr. Bandawe thought the quotations were on the high side. The evidence of the Plaintiff alleging admission of liability by the Defendant was neither challenged by the Defendant nor did they call Mr. Bandawe to rebut the statements imputed to him. While asking this court to invoke the equitable defence of estoppel in its favour, the Defendant is content on relying on the legality that the evidence of Mr. Bandawe was not an issue in the pleadings and can not be raised in submissions by the Plaintiff.


The Plaintiff did not produce any documentation to show who was the owner of the farm equipment that was seized but stated in cross examination that it belonged to his deceased father. The Plaintiff does not indicate in the pleadings or evidence that he has letters of administration with respect to the estate of the deceased father and it is clear that he is not the administrator.


The Defendant called four witnesses. These were Mrs Etness Chanza as DW1, Mr. Chirambo as DW 2, Mr. Jackson Khomba as DW3 and Mr. Kondwani Mulima as DW4. DW2 and DW3 stated that they went to the Plaintiff’s farm after default on the loan to secure settlement or otherwise and that the Plaintiff did not want the farm given as security to be sold and asked them to take the farm machinery instead. Although the witnesses claimed that the taking was consented to, they did not as prudent bankers should have done, procure any written evidence of this consent. Instead, they including DW1 ironically referred to the letters written by the Plaintiff after the fact as being the authority to seize.


DW1 testified that she worked in the Defendant’s legal department. Regarding the seized farm equipment, she stated that one of the Plaintiff’s tractor was sold to Mr. Victor Mbewe who was the Defendant’s former chief executive at a price of K300,000.00. The other farm equipment was still lying at the Defendant’s premises in Balaka and had not been sold due to its dilapidated state. She lamentably could not trace the file containing the details of the sale even though according to her own evidence three files should have been in place on the transaction.


I must state that despite the state of our legal authorities relating to the apparent unfettered rights of a security holder to dispose of the property in a manner they deem fit, I understand the expressed frustration and suspicion of the Plaintiff though not pleaded about a sale to an inside senior officer of the Defendant at a price one may argue was woefully inadequate given the values indicated in the quotations tendered by the Plaintiff though with respect to new tractors. This is perhaps an area that needs reform in the lines that our commonwealth counterparts in Ghana have done to protect helpless debtors such as the Plaintiff to require an independent valuation with the debtor’s involvement of property subject to execution before its disposal. This valuation is treated as a reserve price for any sale of the goods. If an offer is not received at or above the reserve price, an application is made to court to sanction a sale at a price below the reserve price.


Looking at the evidence in this matter, I make a finding that the Defendant was not authorized by the Plaintiff to seize the farm machinery. If that authority were given, there should have been a letter written and signed by the Plaintiff to that effect. It is incredulous for a serious bank such as the Defendant to have varied the formal security arrangement in place by mere verbal agreement. I also find that the letters written by the Plaintiff to the Defendant after the seizure did not amount to authority to seize. How can the Defendant say in one breath that they took the farm machinery with authority from the Plaintiff and yet in another breath say that they were authorized to take the farm machinery after the fact?


Regarding the defence of estoppel, I must emphasize that it is not enough that by one’s conduct a person has represented to another that they will not insist on their strict legal rights and the other acts on that representation. Importantly, the court should be of the view that it would be unfair to allow that person to go back on the representation. Whereas it may be true that the Plaintiff’s letters to the Defendant after the seizure represented that the Plaintiff would not insist on the claim of conversion. It is my considered view that it is not unfair to allow the Plaintiff to renege on that position. This is because the Plaintiff appeared to me to be a simple person who does not understand sophisticated issues. It came out in cross examination that he is semi literate and the letters he wrote to the Defendant were infact written for him.


On the other hand, the Defendant is very sophisticated and informed to the extent that it has well educated professionals working for it and on the evidence I had an impression that the Defendant did not treat the Plaintiff professionally. They did not answer several of his enquiries, they did not inform him of the sale of one tractor and how much was realized from it, even up to the time of the trial they did not credit the loan account with the proceeds of the sale of the tractor. In short, the Defendant acted like a maverick or renegade bank. And they came to this court asking for the equitable relief of estoppel with those type of hands.


Surely, if the purpose of seizing the Plaintiff’s farm equipment was to sell and reduce the outstanding loan, then on such sale the balance ought to have been reduced and assertions by DW1 that this was not done because the loan was out of the system is nothing but an exercise in the kiting of lame excuses. The credit could easily have been made manually. I am disposed to make this finding notwithstanding legal arguments by learned counsel for the Defendant that the matter was not raised in the pleadings and could not therefore be raised in submissions in view of the equitable as opposed to strict law ramifications of this case.


In relation to the claim for loss of profit in the farming of tobacco after the seizure of the farm equipment, the Plaintiff stated that although he could have used hoes to farm as opposed to sitting idle as he did, a big farm of 225 hectares could not be farmed by hoes. However, the witness admitted in cross examination that even before the seizure of the machinery, he did not cultivate that farm season as he had no money since the bank could not give them money. It is therefore clear that the Plaintiff’s failure to grow tobacco was not because of the seizure of the farm machinery but other reasons.


The Plaintiff did not produce to the court any record of previous expenditure and income on the farm from which projections of future expected income could be made. Further, he had serious difficulties and was illogical in the explanations given for the figures of lost income claimed. For instance, inspite of the pleadings asserting that the figures detailed in the statement of claim were gross profits, the Plaintiff testified that they were net profits. Regarding figures for the year 2007, the Plaintiff testified that the claimed figure of US$146,027.81 was net profit and the gross profit would be K3,000,000.00. When it was illustrated to him that K3,000,000.00 is equivalent to only US$24,000.00 the Plaintiff was lost for words.


With respect to the counterclaim, DW4 testifies as to the calculations on principal and interest and gave the outstanding loan amount at 31st December 2007 as being K8,208,715.37. These workings did not reflect any reduction by the proceeds of the sale of the Plaintiff’s tractor by the Defendant. In cross examination, the Plaintiff’s counsel demonstrated that the figures given by the witness contradicted with figures the Defendant earlier on communicated to the Plaintiff. In my view, I dare say that this discrepancy could be due to the interest factor variance on active accounts still in the system and closed accounts not in the system or indeed error. However, that discrepancy is not of such a serious nature to warrant the court to dismiss the whole of the Defendant’s counterclaim particularly that the indebtedness is not denied.




The Defendant’s claim for unpaid loan balance was instituted in the Principal Registry within the limitation period in 2001 two years after the cause of action arose to wit default. The fact that it was discontinued in 2008 does not erase the fact that the action was commenced on time. After being discontinued in the Principal Registry, the action was recommenced in this court as a counterclaim in a matter of days. For the purposes of computing time, I would add two years on the few days between the date of discontinuance and the date of refiling and conclude that the period is within the six year limitation period. Therefore the Defendant’s counterclaim is not statute barred.


It is clear from the evidence that the tractors and plough which the Defendant seized were not part of the securities listed in the security document. The Defendant’s seizure of the same therefore amounted to conversion. As the evidence before the court has shown that the Plaintiff was not the owner of the seized farm equipment, he could not have authorized the Defendant to seize the same and his delay in complaining and taking legal action have no relevance to property not his own. Therefore, the Defendant’s defence of estoppel is misconceived.


It is surprising that after the issue of the Plaintiff’s locus standi was raised by the Defendant at one time in the course of the proceedings by way of questioning whether the Plaintiff had any letters of administration, the Plaintiff just ignored the matter and proceeded in the defective manner he did.


The Plaintiff has failed to prove the special damages claimed for loss of profit in the growing of tobacco. In any event, the failure to grow the tobacco was not caused by the seizure of the farm equipment but by the Plaintiff’s admitted lack of funds evident from the fact that there was no farming the season prior to the seizure of the farm equipment.


On the other hand, it is not in dispute that the Defendant is owed money by the Plaintiff on an overdraft. The only reasonable dispute appears to relate to the amount as there are contradictory figures emanating from the Defendant with respect to similar time periods.


In the circumstances therefore I dismiss the Plaintiff’s action for conversion. The Defendant succeeds in its counterclaim. However, as the calculation given by DW 4 does not factor in the K300,000.00 proceeds of the sale of the tractor seized to reduce the overdraft and is disputed by the Plaintiff, I order that the Registrar calculates the amount truly owing. For the avoidance of doubt, interest on the loan shall be compounded up to the date of judgment in terms of the agreement and normal banking practice but be simple after the date of judgment.


The dismissal of the Plaintiff’s claim for conversion is without prejudice to the rights of the true owner of the farm equipment or his proper legal representative. However, this judgment does not automatically anure to the benefit of such owner or legal representative not having been a party to these proceedings.


As the Defendant has succeeded on a technical point of law and in view of the Defendant’s unimpressive handling of the Plaintiff and the account in question, I order that each party pays their own costs.


Pronounced in open court at Blantyre this 18th day of June 2008.




Dr. M.C Mtambo