IN THE HIGH COURT OF MALAWI
CIVIL CAUSE NUMBER 340 OF 2003
JEFFREY CHIKUMBANJE PLAINTIFF
INDEFUND LIMITED DEFENDANT
CORAM: D F MWAUNGULU (JUDGE)
Kadwa, legal practitioner, for the plaintiff
Masumbu, legal practitioner, for the defendant
Machila, official interpreter
this summons the defendant, Indefund Limited, want to dissolve an injunction
the plaintiff, Mr. Chikumbanje, obtained ex
facts are far from complex and, to the extent they resolve issues the
application raises, are as follows. The defendant is a bank to who the
plaintiff was a client of some time, at least, it so appears. The plaintiff
borrowed money from the bank on a charge of his property MC 328 (Title number
13/1). At the time of the ex parte injunction the plaintiff, according to his
affidavit, was K3, 000, 000 in arrears. It seems, from the plaintiff’s letter
3rd February the plaintiff took out this action claiming the house
and cancellation of the sale to Dr Chirwa. He obtained an ex parte injunction on an affidavit in which he swears the bank
sold the house without proper notice and under a private treaty with Dr Chirwa.
On proper notice, his letter of
In my judgment, failure to disclose a previous action on which a court adjudicated and denial that an appropriate notice without which a course of legal conduct cannot occur are suppression of material facts which should undermine an injunction obtained ex parte. By nature ex parte applications are not the normal. They carry with them a subtle danger that orders courts make are based on a denial of another’s right to be heard. A part from urgency they are, and that is how it should be, made at the peril of full disclosure of material facts. Full disclosure enables a court to do the right and the just thing. If a party discloses that previously another court determined a matter between parties on the same subject matter, a court would not, unless, at least, it insists for a hearing inter partes, grant an injunction ex parte. Apart, therefore, from not disclosing that the bank gave the plaintiff proper notice, failure to disclose a previous action on the same subject matter adjudicated by the courts, deprived the judge of material facts on which to exercise the power to grant the injunction ex parte.
The judge’s exercise of the power to grant the injunction ex parte was substantially undermined by the plaintiff’s suggestion in the affidavit that the bank never gave proper notice before selling the charged property. This created in the mind of the judge exercising the power to grant interlocutory relief that, in exercising the power of sale, the bank overlooked the Registered Land Act. If the bank, and in my judgment it did, gave proper notice and the plaintiff never paid in the time the Registered Land Act stipulates, unless before the contract of sale, the plaintiff paid the arrears to the bank or into court, the court could not stop the sale. Certainly, if the plaintiff had informed the judge that he had proper notice under the Act, the judge would not have granted the injunction.
Court in Mkhumbwe v National Bank of
“The plaintiff questions, on several grounds,
the various notices the bank sent. The
mortgagor attacks the notice of demand of
At page 9 this Court continued as follows:
“The chargee need not inform the chargor about the remedy he will deploy. The right springs immediately upon default on a subsection 1 notice. The chargee need not inform the chargor the chargee will sell the property or stipulate the time of sale. Under section 68, upon defaulting payment for over a month, the chargee could notify the chargor to pay. The chargee cannot appoint a receiver or sell the property until after three months of that notice.
“The notice under section 68 is statutory and imposes a duty unknown to the common law. It must be restricted to the situations it covers. It only requires the mortgagee or chargee to notify the mortgagor or chargee and request for payment. If the mortgagor or chargeor complies in the time stipulated, cadit questio. The mortgagee or charger has no further duty if the mortgagor or charger never complies with the notice.
The mortgagee or charger can sell the property privately, without notifying the mortgagor or charger. If, as happened here, the mortgagee or charger sells by public auction, there is notice of the sale to the charger or mortgagor. The charger or mortgagor cannot complain of not being informed when the mortgagor or mortgagee advertised the sale. A public auction is an advertisement to all, including the mortgagor or chargeor.
The plaintiff’s affidavit only suggests the bank’s notices were improper. The plaintiff never disclosed the notices were to the court. If they were, the court would have discovered they complied with the Act.
The bank, after fully complying with the
Act, could, and actually did, properly exercise the power of sale. The
plaintiff when applying for the injunction ex
parte deposed that at the time of sale the bank had in fact sold the
property. The plaintiff could not therefore prevent the sale or successfully
annul the sale. This case is like the cases of Trustees of the Estate of Isaac Leo Douglas Kaunda v
“I do not think however that Dancwerts, L.J., suggests that a court would, where there is no sale in fact, restrain by injunction a chargee’s or mortgagee’s exercise of power of sale where the chargor or mortgagor defaults and never pays arrears to the chargee or mortgagee or into court. If it were so, the chargee or mortgagee may never easily or at all exercise the power of sale for it is the default that triggers the power in the first place… A chargor or mortgagor has, therefore, up to the date of the contract in all other contracts or at the fall of the hammer on an auction, to pay arrears and restrain the mortgagor or charger from exercising the power of sale. If the mortgagor or mortgagor does not pay before a contract of sale to the mortgagee or chargee or into court, a court will not restrain by injunction the lawful exercise of the power of sale.”
In Mkhumbwe v National Bank of
“The contract is an absolute contract, not conditional in any way, and the sale is expressed to be made by the company as mortgagee. If, before the date of the contract, the plaintiff had tendered the principal with interest and costs, or had paid it into Court proceedings, then, if the company had continued to take steps to enter into a contract for sale, or had purported to do so, the plaintiff would, in my opinion, have been entitled to an injunction restraining it from doing so. After a contract has been entered into, however, it is, in my judgement, perfectly clear (subject to what has been said to me to-day) that the mortgagee (in the present case, the company) can be restrained from completing only on the ground that he has not acted in good faith and that the sale is therefore liable to be set aside.”
Crossman, J., states the reason for the rule:
“In my judgment, s. 101 of that Act, which gives to a mortgagee power to sell the mortgaged property, is perfectly clear, and means that the mortgagee has power to sell out and out, by private contract or by auction, and subsequently to complete by conveyance; and the power to sell is, I think, a power by selling to bind the mortgagor. If that were not so, the extra-ordinary result would follow that every purchaser from a mortgagee would, in effect, be getting a conditional contract liable at any time to be set aside by the mortgagor’s coming in and paying the principal, interest, and costs. Such a result would make it impossible for a mortgagee, in the ordinary course of events, to sell unless he was in a position to promise that completion should take place immediately or on the day after the contract, and there would have to be a rush for completion in order to defeat a possible claim by the mortgagor.”
Where the matter reached, the Court could not, therefore, by injunction restrain the sale. As the cases of Trustees of the Estate of Isaac Leo Douglas Kaunda v New Building Society, and Mkhumbwe v National Bank of Malawi, assuming the bank wrongly exercised the power of sale, show, the plaintiff’s remedy lay in damages. A court does not as, a matter of course, grant an interlocutory injunction where damages are an adequate remedy unless, of course, a party cannot pay them. Even on the plaintiff’s affidavit, there was no triable issue to justify granting the injunction and the plaintiff would not have gotten a permanent injury at the end of trial.
I therefore allow the application to dissolve the injunction obtained ex parte on
Made this 28th Day of April 2003.
D F Mwaungulu