NBS Bank Ltd. v Modern Business Management Ltd. (Commercial Case No. 81 of 2012) [2018] MWCommC 7 (13 July 2018);

Primary tabs

Share

IN THE HIGH COURT OF MALAWI

COMMERCIAL DIVISION

BLANTYRE REGISTRY

 

COMMERCIAL CASE NUMBER 81 OF 2012

 

NBS BANK LIMITED............................................. PLAINTIFF

VERSUS

MODERN BUSINESS MANAGEMENT LIMITED................................. 1st DEFENDANT

HENRY REDSON MWALE......................................................................... 2nd DEFENDANT

CORAM:       HON. JUSTICE J. N. KATSALA

 

P. Mpaka, of counsel for the plaintiff

M. Chisanga, S.C., of counsel for the defendants

Makonyo, Court Clerk/Recording Officer

 

 

The plaintiff commenced this action against the defendants by way of writ of summons claiming the sum of K20,504,311.59 and interest from 7 September 2011 to the date of payment. The plaintiff is also claiming the sum of K 3,075,646,74 as debt collection charges and further collection charges at the prescribed scale and costs of the action. In response, the defendants have each filed a defence and a counterclaim seeking various declarations and orders. The 1st defendant prays for the following; a declaration that the conduct of the plaintiff in selling Tata Buses was a trespass in law; an order for damages in trespass to be assessed; an order that house number KS1/75 was sold at an undervalue; an order that damages for selling the house at an undervalue be assessed; an order that the transaction between the plaintiff and the defendant is a loan transaction and has to be governed by the Loans Recovery Act; an order that the additional interest rates added to the loan sum were unreasonable; an order that the interest cannot be paid over interest; an order that the penalties are illegal and cannot be added on interest and recovery sums on a loan; an order that the transaction be re-opened for the correct interest and sums due to be recalculated; general damages to be assessed and costs. The 2nd defendant counterclaims for the sum of K3,572,371 being the value of rentals from 1 October 2010 to 30 September 2016 as special damages for the wrongful sale of his house Title Number KS1/75; further rentals from 1 October 2016 to date of payment; and general damages for wrongful sale of the house.

 

Briefly, the facts of the case are that the plaintiff is a commercial bank duly registered under the Banking Act and the 1st defendant was one of its customers. The 2nd defendant is a shareholder and a director of the 1st defendant. On 21 August 2008, the plaintiff and the 1st defendant entered into a lease facility agreement for the sum of K20 million for the purchase of 2 Tata Buses from Tata Zambia Limited. The 1st defendant agreed to repay the facility within 36 months from the date of signing the agreement with interest at the rate of 26% or any other rate as the plaintiff would, in its sole discretion, determine as the applicable commercial rate. The lease facility was secured by a surety charge executed by the 2nd defendant over his property known as and being Title Number Soche East KS1/75 and by the two Tata buses on whose registration certificates the plaintiff was endorsed as the Title Holder. Aso, a Bill of Sale was to be executed over the buses in favour of the plaintiff. The 1st defendant’s shareholders were also required to enter into joint and several guarantees for the repayment of the facility.

 

The two buses were duly purchased and the 1st defendant started operating a passenger service business. However, the 1st defendant failed and/or neglected to service the lease facility as a result thereof as at May 2010, arrears had grown to K31,316,945.04. In October 2010, the plaintiff, in exercise of the power of sale under the surety charge, sold the 2nd defendant’s property at the price of K3,875,000.00. The plaintiff also sold one of the Tata Buses (Registration Number BP 5523) through tender at a price of K8 million. In or around September 2011 the plaintiff sold the other Tata bus (Registration Number BP 6188), which was damaged in an accident, through tender at a price of K3.5 million. When all these amounts were credited to the lease account there was an outstanding balance of K20,504.311.59, as at 7 September 2011. The plaintiff then commenced the present proceedings to recover this amount, interest and costs as aforesaid.

 

The 1st defendant contends that immediately upon signing of the lease facility agreement the plaintiff revised the agreed interest rate upwards without consulting it, and that apart from charging interest, the plaintiff also unlawfully charged penalties on the amount due for payment. A Bill of Sale was neither signed nor registered in favour of the plaintiff on the two buses as security for the loan. If a Bill of Sale was signed and/or registered, the 1st defendant contends that the same did not meet the requirements of the Bill of Sale Act and is therefore void ab initio. The 1st defendant also disputes the loan balance and contends that the balance reached such levels because “unagreed” interest and penalties were charged and added to the balance. The 1st defendant denies that it breached the terms of the lease agreement as alleged or at all. It contends that if it breached the said terms of the agreement, such breach was induced by the plaintiff.

 

It is clear from the evidence that the plaintiff and the 1st defendant had a detailed framework setting out their agreement. Under the agreement the security for the 1st defendant’s right to use the two buses was in four aspects, namely, (1) the endorsement of the plaintiff as the Title Holder over each bus, and (2) the registration of a charge in favour of the plaintiff over Title Number Soche East KS1/75, (3) the joint and several guarantees by the 1st defendant’s shareholders, and (4) a Bill of Sale over the two buses.

It is not in doubt that the 1st defendant’s right to possession and use of the buses was dependent on the 1st defendant’s continued satisfaction of the obligation to pay to the plaintiff the agreed instalments. The evidence before the Court clearly shows that the 1st defendant failed on this obligation. And despite all the indulgence that the plaintiff gave, the 1st defendant failed to service the facility. There is no doubt that this was a breach of the agreement between the parties.

In my judgment, by this breach, the 1st defendant forfeited the right to possess and or use the buses. I do not see how the 1st defendant would have been entitled to continue with the possession and/or use of the buses in the absence of a continued satisfaction of the corresponding obligation to pay the instalments when they fell due. I find it to be contrary to both business and legal sense for the 1st defendant to contend that despite its persistent failure to pay the agreed instalments, it was still entitled to the possession and use of the buses. No lawful basis, or indeed any cogent commercial justification has been advanced in support of that contention.

Throughout the lease agreement, the plaintiff remained the title holder of the buses. In defining property, section 2 of the General Interpretation Act provides:

“‘property’ includes money, and every description of property, whether movable or immovable, animate or inanimate, obligations and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to property”

In my judgment, the plaintiff had property in the buses. The definition of title holder and owner in relation to a motor vehicle in section 2 of the Road Traffic Act is very significant. It subjects the property rights in a vehicle to the contractual setting in which the rights of use, possession, nominal and legal title are interwoven. It provides:

“owner” in relation to a vehicle, means—

  1. the person who has the right to the use and enjoyment of a vehicle in terms of a contractual agreement with the title holder of such vehicle;
  2. any person referred to in paragraph (a), for any period during which such person has failed to return that vehicle to the title holder in accordance with the contractual agreement referred to in paragraph (a);
  3. the person who is a title holder and has the use and enjoyment of the vehicle; or
  4. a motor trader who is in possession of a vehicle for the purpose of sale, and who is registered as such under section 11; and “owned” or any like word has a corresponding meaning;

“title holder” in relation to a vehicle, means—

  1. the person who has to give permission for the alienation of that vehicle in terms of a contractual agreement with the owner of such vehicle, or
  2. the person who has the right to alienate that vehicle, and who is registered as such under section 11.”

From the foregoing provisions, it is clear that the plaintiff, having been registered under section 11 as the title holder of the buses, had the right to alienate the buses. In other words, the plaintiff had the right to transfer the property and/or ownership of the buses. As the title holder, they had the right to sell the buses. In that vein, I do not see how the plaintiff can be said to have trespassed when it took possession of the buses following the 1st defendant’s continued failure to pay the agreed instalments. In the same vein, I do not think that the failure to register a Bill of Sale in relation to the buses has any effect on the rights of the plaintiff as a title holder. In any case, the evidence shows that the plaintiff did not proceed in relation to the buses as a holder of the Bill of Sale but as a title holder. Consequently, I find it unnecessary to proceed to discuss whether there was a valid Bill of Sale or not. In this respect, the arguments raised in respect of the legal position on effect of failure to register a Bill of Sale are not of relevance. On the foregoing, it is my finding that the plaintiff did not commit any trespass when it repossessed and/or sold the buses.

The 2nd defendant is one of the five shareholders and directors of the 1st defendant. Save for the surety charge, there was no other agreement between the 2nd defendant and plaintiff regarding the lease facility. The 2nd defendant did not in any other way separately guarantee the repayment of the loan by the 1st defendant to the plaintiff. From the evidence, there is no doubt that the plaintiff held a surety charge over the 2nd defendant’s property Title Number Soche East KS1/75 as security for the repayment of the money advanced under the facility. There is no dispute that following the 1st defendant’s failure to service the lease facility as agreed, the plaintiff was entitled to realise the security. However, the 2nd defendant has raised the issue that his signature on the surety charge was not verified as is required by section 105 (2) of the Registered Land Act as such the surety charge was invalid. And also that the property was sold at a price below its value.

I would agree with the plaintiffs submission that since the obligation to ensure that his signature on the surety charge was duly verified lied on the 2nd defendant himself, he cannot place any blame on the plaintiff for the alleged failure. Further, he cannot rely on his own failure to escape from the effects of the surety charge. (See Solanke and Solanke v NBS Bank Ltd and others Land Cause Number 34 of 2014 (unreported)). In any case, even if I were to hold that the surety charge was not valid on account of the alleged failure, I do not see what would have stopped me from holding that in the circumstances, an equitable charge was created, as he had deposited the tile deeds with the plaintiff. (See NBS Bank Ltd v Dylan Mafunga (For and on behalf of Fanny Chiunda Kandoje MSCA Civil Appeal Number 22 of 2012 (unreported)). And that the plaintiff would have been entitled to proceed under that equitable charge.

 

There is no convincing evidence before this Court that indeed the property was sold at an under value. In any case, I do not think that even if it were sold at a price below its market value, it would have meant that the sale was wrongful. It must be appreciated that there is no obligation on the part of the chargee to sell the charged property at the highest price obtainable on the market. It is important to remember that the only duty the law places on a chargee exercising his power of sale is to act in good faith and have regard to the interests of the chargor. (See section 71 (1) of the Registered Land Act). That duty, in my judgment, does not entail that the chargee must sell the property at its market value or higher, or that he must hold on to the property until he finds the highest price. The law does not place such a burden on the chargee because it recognises that it would be contrary to business prudence since the power is exercised following failure by the chargor to meet his contractual obligations, such as, the payment of the agreed instalments. In such instances, usually the chargee’s interest is to try, as much as possible, to avoid or to minimise its loses due to the continued accumulation of arrears and the resultant increase in the debt. He thus seeks to recover its money as soon as is possible so that the money can be invested in loans to other borrowers or otherwise and earn returns. Inasmuch as this appears to be in the chargee’s interests, it is also in the best interest of the chargor. It is good for the chargor that the loan should not grow to unmanageable proportions through the continued accumulation of arrears and interest. So, the sooner the property is disposed of and the proceeds applied towards the loan, the better it is for the chargor as well.

Thus, in my view, if the chargee accepts a fair price for the purchase of the property, he will have discharged his duty under section 71(1) of the Registered Land Act. What is a fair price is a matter of fact which will depend on the prevailing circumstances in each particular case. In the present case, the 2nd defendant has not shown that the price at which the property was sold was not fair in the circumstances prevailing at the time of sale. Therefore, I am unable to agree with the defendants that simply because the property may have been sold below its market value then it means that the sale of the property was unfair and or in disregard of the interests of the 2nd defendant.

It is worth mentioning that the value attached to a property is also relative to the purpose for which the valuation is made. For instance, if the valuation is for purposes of obtaining a bank loan, the value may be higher than if it is for purposes of exercising a power of sale under a charge or for purposes of compensation. This would explain why in most cases there are differences in the values of property in a valuation done before obtaining a loan and that done after obtaining the loan. Another important factor is that the circumstances prevailing on the property market at the times of the valuations are also a determining input in the value of a property. If the circumstances are different, the values are bound to be different as well. All the expert property valuers that have come before me over the years have said this in response to the queries from many chargors on why the prices at which their properties are sold are lower than the values attached to them when they were obtaining the loans. I find the explanation convincing. Thus, the fact that the property is sold at a price lower than its value at the time the chargor obtained a loan, per se, is not proof of bad faith on the part of the chargee. There is more that has to be shown. As earlier stated, it is a question of fact to be determined on the circumstances.

The plaintiff contends that the surety charge executed by the 2nd defendant was subject to the NBS Bank Limited Standard Terms and Conditions filed at the Lilongwe Land Registry as Application Number 1044/05 (herein after the “Standard Terms”)- And in terms of those Standard Terms, the 2nd defendant personally guaranteed the full repayment of the 1st defendant’s loan. Consequently, he is liable to pay the loan. The 2nd defendant disputes that he personally guaranteed the repayment of the lease facility by virtue of signing the surety charge. He contends that the said Standard Terms were never shown to him nor brought to his attention before signing the surety charge. In any event, the agreement was that all the shareholders would execute joint and/or several guarantees for the lease facility which guarantees were never demanded or entered into.

The surety charge was drawn up by the plaintiff. The provision that makes reference to the Standard Terms reads as follows:

“THIS CHARGE is subject to the terms and conditions filed at the Lilongwe Land Registry as Application Number 1044/05 by the Chargee and every reference therein to the said Bank shall be constructed as being reference mutatis mutandis to the said conditions in which case the latter conditions shall then have reference to this charge in place of the conditions aforesaid.”

Clause 33 of the Standard Terms provides:

“IT HAVING formed part of the terms upon which the Bank agreed to advance to the BORROWER the said loan that the Surety should guarantee the repayment of the money secured by the Charge the Surety hereby covenants and agrees with the Bank in the terms of all the agreements by the BORROWER and the agreement hereinbefore contained and such agreements shall operate and take effect in all respects as joint and several covenants by the BORROWER and Surety with the Bank and the said agreements shall be binding as well on the Surety as on the BORROWER and WITHOUT prejudice to all rights of the Surety against the BORROWER as principal debtor the Surety shall as between the Surety and the Bank be deemed a principal debtor under the foregoing agreements by the Surety and not merely a Surety and accordingly shall not be discharged nor shall the Surety’s liability be affected by any time or indulgence being given to or any arrangement or alteration of terms being made with the BORROWER or by the making of any further advance or re-advance or by the variation of the provisions of the Charge or the Loan Documents or by the transfer of the benefit of the Charge under the provisions of Clause 23 above or by any other act thing omission or means whatever whereby the Surety’s liability as Surety only would or might but for this provision have been discharged.”

The question I must decide now is whether the defendant’s Standard Terms formed an integral part of the surety charge and/or the contract of guarantee between the plaintiff and the 2nd defendant. The general rule is that if a party signs a document which contains contractual terms at the time when he enters into a contract he is bound by the contents of the document. (See Ndasowanjira Art Studio v Casalee Cargo Ltd. [1991] 14 MLR 367). In that case the judge cited with approval what the learned authors of Cheshire and Fifoot, Law of Contract (9 ed) state at 151:

“If the document is signed it will normally be impossible, or at least difficult, to deny its contractual character, and evidence of notice, actual or constructive, is irrelevant. In the absence of fraud or misrepresentation, a person is bound by a writing to which he has put his signature, whether he has read its contents or he has chosen to leave them unread.”

The evidence before this Court shows that it was one of the terms of the loan agreement that the 1st defendant’s shareholders were to execute a joint and several guarantee securing the repayment of the facility. However, no such guarantees were executed by the shareholders. There is no evidence that the guarantees were ever drawn up and sent to the shareholders for execution. Nor is there evidence that the guarantees were to be entered into through the execution of the surety charge(s). In the absence of execution of such guarantees, it is not surprising, therefore, that the 2nd defendant was very astonished to hear that by pledging his property as security for the loan he had also personally guaranteed the repayment of the loan. From the totality of the evidence before the court it appears to me that, for reasons only known to the plaintiff, the plaintiff was not keen on obtaining the joint and several guarantees from the shareholders. There is no explanation from the plaintiff why the shareholders were not asked to satisfy this requirement under the facility agreement. And from the totality of the evidence before me, it is also clear that the contention that the 2nd defendant personally guaranteed the loan facility through the surety charge is an after-the- event manoeuvre on the part of the plaintiff with the hope of attaching personal liability for the loan to the 2nd defendant.

The Standard Terms are not attached to the surety charge. They are contained in a separate document which is filed at the Lilongwe Land Registry as Application Number 1044/05. This means that for the 2nd defendant to access the document he needed to visit and conduct a search on it at the Lilongwe Land Registry, which is situated in the City of Lilongwe, about 300 kilometres away from the City of Blantyre where the parties were transacting. There is no evidence before the Court showing that the clause in the surety charge incorporating the Standard Terms or indeed the existence of the Standard Terms were brought to the 2nd defendant’s attention before he signed the surety charge. Further, there is no explanation why the Standard Terms were not attached to the surety charge or could not be given to the 2nd defendant at the time of or before executing the surety charge. I somehow find it strange that the plaintiff expected the 2nd defendant to travel a distance of about 300 kilometres to the Lilongwe Land Registry to conduct a search in order to access the Standard Terms which were part and parcel of the surety charge. Bearing in mind the purported effect of the Standard Terms on the rights and obligations of the parties under the surety charge, I am somehow inclined to think that the plaintiff were calculatedly not very transparent about the full terms and conditions of the surety charge. I find it absurd that a party to a contract who draws up the contract would provide the other party with only some of the terms of the contract and require that other party to go to some other place in order to access the other terms of the contract. In my view, there is no room for ‘hide and seek’ on this issue. A party to a contract is entitled to full and accessible disclosure of the terms and conditions of the contract they are entering into. Therefore, there is an obligation on the parties to disclose to each other all the terms they want to be included in the contract so that each one of them can make an informed decision on whether to proceed with the contract or not. Otherwise, there will not be a meeting of the minds. Where the contract involves the adoption of standard trading terms, as was the case in the present matter, it is even more imperative that all the terms of the contract must be provided to the other party, or, must, at least, be readily available for the immediate inspection by the other party at the time and place of entering the contract. May be, and I say, may be, it would be a bit different if a party were to provide to the other party a synopsis of those other terms which he has not included in the contract and then refer that other party to some other place for the full text of the terms.

Further, the clause in the surety charge, purportedly incorporating the Standard Terms, which I have reproduced above, in my judgment, is ambiguous. I do not think it conveys whatever it is that it was intended to convey. Except for the first part, one cannot make much sense, if any, out of it. Upon reading it, one is left wondering what is it that it is really talking about. Even after reading it many times you still cannot make sense out of it. It is fundamentally ambiguous. The law is that when a clause is ambiguous, it must be construed against the party that introduced it and is seeking to rely on it. (See Selemani and another v Advanx (Blantyre) Ltd [1995] 1 MLR 262 (HC) and White v John Warrick & Co Ltd [1953] 2 All ER 1021). The evidence is that the surety charge was prepared by the plaintiff and given to the 2nd defendant to sign his part. Therefore, the ambiguity must be construed against the plaintiff and in favour of the 2nd defendant.

The general approach of the courts is that contracts of suretyship must be strictly construed in favour of the surety and that no liability is to be imposed on him which is not clearly and distinctly covered by the contract. (See Blest v Brown (1882) 4 De G.F. & J. 367 and Pearsal v Summerset (1812) 4 Taunt 593). In the circumstances of this case, I find it very difficult to hold that this clause, with all the ambiguity it carries, was sufficient to incorporate the Standard Terms into the surety charge so as to create a contract of suretyship between the plaintiff and the 2nd defendant. Though the general rule is that a party who signs a document which contains contractual terms at the time he is entering into a contract is bound by the contents of the document, in view of the ambiguity in the clause as aforesaid, and the calculated concealment of the full terms of the surety charge, I am unable to hold that the Standard Terms were part and parcel of the surety charge. Consequently, I am unable to hold that the 2nd defendant personally guaranteed the repayment of the loan by virtue of his signing of the surety charge.

But in case I am wrong in my finding, I would further hold that, as earlier indicated, the intention of the parties as can be ascertained from the evidence before this Court, was that the shareholders of the 1st defendant would execute joint and several guarantees in respect of the loan. It was not

their intention that the guarantees would be entered into through the execution of surety charges. I am sure that if such were their intention, the facility letter would have expressly said so. And also, all the shareholders would have been required to execute surety charges in favour of the plaintiff. The fact that only the 2nd defendant executed a surety charge strongly suggests that such was not the parties’ intention. Clearly, the intention was to only pledge the 2nd defendant’s property as security for the loan and nothing more. Therefore, I find it difficult to hold that the 2nd defendant personally guaranteed the loan by virtue of the surety charge. I have no doubt that on the facts of this case, to hold otherwise would run afoul of the intention of the parties as is evident from the facility letter. This finding is in line with the paramount principle in interpretation of contracts, viz, the object is to ascertain what the mutual intentions of the parties were as to the legal obligations each assumed by the contractual words in which they sought to express them. (See Finance Bank of Malawi v Hanks and others [2000-2001] MLR 110). What comes out clear from the facility letter is that the intention of the parties was that the shareholders’ personal liability for the facility was to be secured through their entering into joint and several guarantees.

Coming to the issue of interest, it is a long-standing principle that when someone borrows money they should expect that on repayment they are also required to pay interest over and above the loan. See Burco Electronic Systems Ltd And Estate Of David Anthony Vandell (Deseased) v Nico Life Insurance Company Ltd Commercial Cause Number 81 Of 2012 (unreported). Interest in the commercial context is calculated on compound basis. It would be commercially unjust for one to borrow from a money lending institution large amounts of money and not repay it with interest. Lord Nicholls of Birkenhead in Sempra Metals Ltd v Commissioners of Inland Revenue and another [2007] 4 All E.R. 657 expressed this point clearly when he stated that:

‘We live in a world where interest payments for the use of money are calculated on compound basis. Money is not available commercially on simple interest terms. This is the daily experience of everyone, whether borrowing money on overdrafts or credit cards or mortgages or shopping around for the best rates when depositing savings with banks or building societies. If the law is to achieve a fair and just outcome when assessing financial loss it must recognise and give effect to this reality. ’

Obviously, there is a difference between compound interest and penalty interest. Compound interest (or compounding interest) is interest which is calculated on the initial principal sum and also on the accruing interest of previous periods of a loan. This in effect means that interest accrues throughout the period of the loan. There can be no doubt that this interest is applicable in the present case.

Penalty interest, also known as default interest, is interest which is charged when a party defaults on repayment. It is triggered by nonpayment of the loan after the prescribed agreed repayment period has lapsed. In Harry Gunda t/a Halls Protective Clothing General Dealers v Indebank Limited Commercial Case No. 186 Of 2015 it was stated that our statutory laws as they presently stand do not prohibit penalty interest. It is governed by common law. However, I must say that the lease facility agreement signed by the parties did not provide for penalty interest. Nowhere does it say that the plaintiff will charge penalty interest in case of default on the agreed instalments. In my judgment, the plaintiff does not have the liberty to introduce the issue of penalty interest after the contract was already concluded without the express consent of the 1st defendant.

The facility letter provides as follows on interest:

“INTEREST

  1. Interest on the facility will be at an initial rate of 26% i.e. our base interest rate of 19% plus 7%.
  2. This interest rate will be subject to change at the sole discretion of NBS Bank Limited.”

This provision in my view did not cater for penalty interest. The fact that it provided that the interest rate may change at the discretion of the plaintiff did not mean that the plaintiff could introduce any other kind of interest without the 1st defendant’s consent. Just as it was the parties intention that the facility would attract interest at the agreed initial rate of 26%, the parties would also have stated in the agreement that penalty interest would be charged in the event of default on payment of the instalments. I am not persuaded by the argument that since it is the practice in the banking industry to charge penalty interest when a borrower defaults on agreed instalment, the 5% penalty interest charged by the plaintiff must be allowed. Penalty interest is a crucial issue in loan transactions. I do not think that the parties herein could have left such an important issue to be governed by the practice in the banking industry. I do not see anything else which could have stopped the parties from expressly providing for penalty interest in their agreement except that it was their intention that such interest would not apply to the facility. On this footing, I find that the charging of penalty interest by the plaintiff was wrongful.

Further, on the same issue of penalty interest I wish to adopt the reasoning in the case of Harry Gunda t/a Halls Protective Clothing General Dealers v Indebank Limited (supra) and the recent decision of this Court in National Bank of Malawi Ltd v Lilongwe Gas Company Ltd Commercial Case Number 165 of 2016 (unreported). These decisions give a comprehensive discussion of the law on penalty interest and the applicability/non applicability of penalty interest in our jurisdiction. I do not wish to repeat what is said therein suffice to say that the views I expressed on the point in the latter case have not changed. So even if the parties herein had agreed that penalty interest would be charged on default, there would still have been the need for them to justify that that interest does not offend the rule against penalties. In the present case such justification is lacking. Thus, I do not see how I would have upheld the claim for penalty interest herein.

On the foregoing I find that the plaintiffs action against the 1st defendant must succeed in part. The plaintiff is entitled to be paid the balance of the loan plus interest less all the penalty interest that was charged. This also means that the 1st defendant’s counter claim succeeds only to this limited extent. The Assistant Registrar will assess the amount payable if the parties fail to agree. Debt collection charges will be payable in respect of the amount that will be found due. The plaintiffs action against the 2nd defendant fails and it is dismissed. The 2nd defendant’s counter claim also fails and it, too, is dismissed. In view of the failures of the cases between the plaintiff and the 2nd defendant, and the limited successes of the plaintiffs and the 1st defendant’s cases, I find that it would only be fair and just to order that each party must bear its own costs. I so order.

Pronounced at Blantyre this 13th day of July, 2018.

 

J S KATSALA
JUDGE