Goodrich Merchandise Ltd v Phazi Industries Ltd (153 of 2014) [2016] MWCommC 495 (18 July 2016);

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IN THE HIGH COURT OF MALAWI

COMMERCIAL DIVISION

BLANTYRE REGISTRY

COMMERCIAL CASE NO. 153 OF 2014

 

BETWEEN:

GOODRICH MERCHANDISE LTD                                                       PLAINTIFF

-and-

PHAZI INDUSTRIES LTD                                                                      DEFENDANT

 

CORAM

HON. RACHEL SOPHIE SIKWESE

Gulumba;             Counsel for the Plaintiff

Chipembere Z;    Counsel for the Defendant

Chirundu;             Court Interpreter

 

JUDGMENT

Sikwese J

Facts and Issues

This is a claim brought by the plaintiff against the defendant for the sum of USD 26 777- 73 being payment for assorted merchandise and an injection moulding machinery supplied to the defendant at the defendant's own request in or around 1996 and 2000 respectively. The plaintiff further claims a sum of USD 57 803-24 representing interest on the principal sum owed from May 2008 when the last payment was made to September 2014. They also pray for interest on the total sum owed which is USD 84 580-97 at 3 per cent above the bank lending rate from September 2014 to the date of actual payment. They also pray for legal collection costs and costs of the action. These proceedings were instituted in this court on 13 October 2014.

The defendant denies all the claims. They deny that they owe the plaintiff any money. They deny that the plaintiff is entitled to any interest and in the alternative which seems to be their main defence they argue that the action is caught by the statute of limitations having been instituted more than six years after the cause of action arose. They therefore pray that the action be dismissed.

In response to the defence that the matter is statute barred, the plaintiff averred that much as the matter is long outstanding the plaintiff through its Director Mr. Chandra Mohan (Mohan) has persistently and throughout demanded payment. The defendant through its Managing Director Mr. Igbal Mussa (Mussa) has also persistently and throughout acknowledged his liability and has assured the plaintiff that the money will be paid. To this effect the plaintiff produced and exhibited faxes, a written acknowledgement of partial payment of USD2000-00 ·in 2008 and electronic whatsap messages from around June 2014.

The issue before this Court is whether or not the plaintiff s action is statute barred. If the answer is in the affirmative the plaintiff s action shall be dismissed while as if the answer is in the negative the plaintiff s claim shall succeed.

A secondary matter which is raised as an issue concerns the award of interest at three per cent above commercial bank lending on the total sum due from 2008 to date of actual payment. Resolution of this issue depends on the finding of the main issue above.

The Law and Analysis

Statute of Limitation as a Defence

Section 4(1) of the Limitation Act provides that "actions founded on contract or tort shall not be brought after the expiration of six years from the date on which the cause of action arose". In this case it is the defendant's contention that the cause of action arose more than six years before the plaintiff took the matter to court. On the other hand the plaintiff pleads that the limitation period was extended through acknowledgement and part payment.

Acknowledgement and Part Payment

Section 22 (4) of the Limitation Act provides for fresh accrual of action on acknowledgement or part payment. It states that, "where any right of action has accrued to recover any debt or other liquidated pecuniary claim, and the person liable or accountable thereof acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgement or the last payment".

Written and Signed

It is a requirement that such acknowledgement shall be in writing and signed by the person making the acknowledgement, see section 23 (1) of the Limitation Act.

The record shows that the parties were at some point in constant touch about the sums owing. A number of documents were exhibited especially by the plaintiff s witness. Most of these documents contained demands for the defendant to pay. Some of them were in the form of outstanding account statements. A few documents are in the form of faxes from the defendant to the plaintiff. Of some relevance to this issue were faxes of 25 July 2003 and 8 October 2003 written by Mussa to Mohan. In essence these two faxes are aimed at assuring the plaintiff that the money would be paid. The 25 July fax reads;

" Dear Chandra Mohan, hope you settled well in Australia. First of all my apologies for not replying to your faxes, as I have no answer because I have not yet paid your interest balance. I have always assured you that I will pay but it is a question of time. So please bear with me. Best Rgds to the family. Iqbal"

A second fax of interest is also from Mussa to Mohan dated 8 October 2003. It is faint and illegible in some parts but it captures the relevant content;

"Thank you very much for the fax and your kind words. I have noted all the contents. Would not like to say much but would only say that let us not ...our relationship with unnecessary ... I know I am at fault and at ... I have not refused to pay you. I can only say that as soon as things improve I will start paying as at the ... we have had another 22% devaluation. Rgds. IQBAL".

These faxes were signed off in Mussa's first name 'Iqbal' in small letters in one and in capital letters 'IQBAL' in another. It is not clear whether these represent his signature. Counsel for the plaintiff did not address the court on this point. Assuming however that Iqbal or IQBAL as appears on the two faxes which clearly acknowledge the debt, is the defendant's representative's signature, would the plaintiff have satisfied the requirement under section 22 (4)? The answer would be in the affirmative. This is because through the acknowledgement, the right of action is deemed to have accrued on that date, in this case on 8 October 2003 because that was the latest date that written communication was received by the plaintiff acknowledging liability.

The action was however only commenced on 13 October 2014, way beyond the six year period. Therefore even if it was the case that the faxes were signed by Mussa, failure to commence legal proceedings within six years from that date renders the action statute barred. This as it may and as indicated above Counsel for the plaintiff did not produce Mussa's signature neither any document acknowledging liability signed by the defendant after October 2003.

The plaintiff went on to argue that whatsap messages exchanged between Mussa and Mohan from 6 June 2014 revived the action. This was more than six years after the part payment. In its defence the defendant argued that these electronic exchanges were not credible, they lacked authenticity. The factual basis of this argument was not provided. Mussa was not called as a witness to refute the plaintiff s claim that the whatsap messages originated from him. The whatsap messages were an essential evidentiary material going to the root of the defendant's objection to their admissibility. It is strange that the defendant did not see it fit to bring the witness to controvert the plaintiff s assertion that the whatsap messages were credible. It was held in Maonga and others v Blantyre Print and Publishing [1991] MLR 240 that; "if a witness who is available is not called, it may be presumed that his evidence would be contrary to the case of the party who failed to call him". It is therefore found that the whatsap messages are credible and authentic in that they originated from Mussa to Mohan.

In some of these messages especially those of 26 June 2014 at 3:08:49 PM, 3 July 2014 at 2:57:38 AM, 3:07:03 AM and 3:10:38 AM, Mussa for the defendant is repeatedly acknowledging owing the plaintiff. The question is whether these acknowledgments appear in the format prescribed by law?

Counsel on both sides agree that it is a requirement that the acknowledgment referred to in the Limitation Act must be in writing and signed by the party admitting liability. The missing link in these whatsap messages is therefore the signature. The whatsap messages are not signed. In his submissions counsel for the plaintiff did not address the court on the issue.

May 2008. Going by calendar months and counting from date of part payment, the six year limitation period expired on 26 May 2014. Therefore even a consideration of part payment is caught by the statute of limitations. The Court need to mention that the defendant objected to the submission of the acknowledgement of receipt of the USD2000 on ground that it was paid as a gift and not in respect of any debt. The Court found the argument lame considering that all along and throughout the trial the defendant has not produced any evidence to show that they paid the plaintiff what they owed to entitle them plead a payment of gratuitous gift of USD2000 in cash.

Rationale behind Limitation Periods

Limitation periods exist to prevent oppression, to protect individuals from having to defend themselves against claims when basic facts have become obscured with the passage of time. They are founded on grounds of public policy and give effect to two maxims, firstly; 'reipublicae ut sit finis litium- the interest of the State requires that there should be a limit to litigation; and secondly; vigilantibus non dormientibus Jura subveniunt- the laws aid the vigilant and not those who slumber, see generally Stambolie v Commissioner of Police 1989 (3) ZLR 287, referred to in Zibelu Banda, R. (ed.) Sources and Institutions of Labour Law in Malawi (Montfort Press, Limbe, 2008 at page 41).

Finding

It is one of the unfortunate situations where a claim must fail because the plaintiff failed to pursue it with vigilance. This action is dismissed in its entirety with costs to the defendant.

Pronounced in Open Court this 18th day of July 2016 at High Court (Commercial Division) Blantyre.

____________________

Rachel Sophie Sikwese

JUDGE