Ilyas Vali v Pacific Limited (Commercial Case No. 155 of 2023) [2026] MWHC 23 (8 May 2026)

Ero ILYAS VALI ........CLAIMANT -AND. PACIFIC LIMITED ......DEFENDANT REPUBLIC OF MALAWI IN THE HIGH COURT OF MALAWI PRINCIPAL R.EGISTRY CONIMERCIAL DIVISION ' Commercial Case No. 155 of 2023 (BEFORE HONORABLE JUSTICE ALIDE) CORAM: HON. JUST'ICE J. ALIDE, Mr. Chibayo, of Counsel for the Claimant Mr. Phokoso, of Counsel for the Defendant Mr. Makata, Cout Clerk RULING Alide, J. 1,. 'Ihis is niy ruling on the Defendant's application for an order to set aside the default judgment that was obtained by the Claimant in this matter. I'he Application has been brought under Order 10 Rule 1 and Order 12 Rule 2I (l) aud (2) of the Courts (High Court) (Civil Procedure) Rules, 2017 ("the CPR 2017"). It is supported by a sworn statement of Counsel Ian Nkoka as well as skeleton arguments. The Claimaut opposes the applicatiorr and has to that effect filed a sworn statement by Counsel Alexander Chibayo, and also skeleton argurnents, For the purpose of clarity, I u,ill set the context and sequence of the actions taken by the parties in this matter in detail. The present action is for breach of contract and was coflrmenced by the Claimant against the Defendant on 5 September 2023.It is the Claimant's position that the Defendant breached an agreement for sale of land between the parties by, among other things, failing to facilitate and finance the subdivision of land belonging to the Claimant, and then transferring part thereof to the Defendant, as agreed in the agreement. The Claimant further alleges that the Defendant also failed to pay or discharge the outgoings associated with the land during the time the Defendant was supposed to do the subdivision. The summons, in which the Claimant sought diverse reliefs from the Defendant, were served onthe Defendant on22 September 2023. On27 September2023, Counsel filed aNotice of Appointment as Legal Practitioners for the Defendant. Despite the timely appointment and filing of the notice, the Defendant failed to file a response or a defence to the claim within the prescribed timelines. On 27 October 2023, a month later, the Claimant filed an application for a default judgment. This was granted on 9th ofNovember2}23. A formal orderwas duly filed and was issued by the Court, about three months later, on 2 February 2024. Thereafter, the Claimant proceeded with the enforcement of the judgment. On the 31 May 2024 Counsel for the Defendant filed the current application in which he presented several arguments in support thereof. Firstly, Counsel claimed that the Defendant did not file a response or defence within the prescribed time as required by the rules due to the fact that the transaction subject of this action occurred way back and, due to relocation of offices by the Defendant, they had lost some documentation in respect of the matter. Counsel claimed that as a result of the foregoing, they only received instructions after the Defendant had located the documents surrounding the sale transaction. Secondly, Counsel argued that the Defendant had a bonafide and meritorious defence against the Claimant's claim. To that effect they exhibited a copy of the defence and counterclaim that they had apparently filed in this Court as "fN 3". Thirdly, the Defendant argued that they had filed the application to set aside the default judgment within three months as required by Order 12 Rule 2l (2) of the CPR 2017. With those three observations, the Defendant prayed that it was only appropriate, in the interest of justice, that the default judgment obtained by the Claimant be set aside and that the Defendant be allowed to argue the case in court so that the matter is disposed on its merits. On the other hand, the Clairnant has prayed that the Defendant's application be dismissed on several grounds. Firstly, it is the Claimant's position that Defendant's application to set aside the default judgment had inordinately delayed. The Claimant argued that the application should h.ave been filed within three months from the date of entry of the 4. 5. 6. 7. 8. 9. 10. 11. default judgment in line with Order 12 Rule 2l (2) of the CPR 2017. Counsel argued that in the absence of doing that within the said period, the Defendant was supposed to have explained to the Court why they filed the application after thr"ee months. However, they did not do the same. The Claimant observed that instead, the Defendant, under paragraph 6 of their sworn statement had strangely deponed that the application was made within three months after the issuance of the default judgement which was not correct. Secondly, the Claimant has argued that under Order 12 Rule 21 (2)(b) of the CPR 2017, if an application to set aside default judgement has been made after 3 months, and reasons for delay have properly been'articulated, the Court may proceed and set aside the default judgement in the.interest ofjustice. The Claimant has argued that in this regard the Court has to look at several things, including the conduct of the Defendant. The Claimant has argued that looking at the Defendant's conduct, it was not befitting for the Court to set aside the default judgement on that ground. Thirdly, the Clairnant disputed the Defendant's position that they had a bonafide and meritorious defence to the matter and argued that they had none looking at what they had filed before the Court and how they had conducted themselves in respect of the filing of the defence. The Claimant highlighted that on 3l May 2024the Defendant saved the Claimant with their defence and their counterclaim. The same was exhibited as "AC7". The defence and counterclaim was verified by the Defendant's Counsel's own sworn statement. It was the Claimant's submission that strangely, on the 3l hne 2024 the Defendant filed another materially different defence from the one which they previously filed on 31 May 2024. The Defendant attempted to serve the Claimant the same, but the Claimant refused to accept service. Upon further investigation, the Claimant was informed that the original defence had been extracted from the record and replaced with the one dated 3 1 June 2024. The Claimant submitted that the Defendant's actions were aimed at trying to conceal the correct position of the matter and believed that the Defendant's defence filed on 31 June 2024 was merely a sham. In that regard, the Claimant's view remained that the Defbndant did not have any meritorious or bonafide defence in the matter. Having heard the parties herein, the issue before me is whether or not, the default judgment entered by this Court on 2 February 2024 should be set aside. The key and most important provision that deals with present application is Order 12 Rule 21 of the CPR 2017. This provides as follows: "21. (l) A Ce./bndanl ugainst v,hom judgment in deJault has been entered ntay apply tct the Courl to have the judgment set aside. llhe applicutian under sub rule (1.) ma)t be mude not later than 3 months a/ier the judgment is entered ond shall - 12. 13. 14. t 5. (2) 16. (3) (a) set out the reasons why the defendant did not defend the appliccttion: (b) v,here the appiicalion is made more than 3 months afler the itrdgment u,o,s enlered, explain the delay; and the Court shall not sel the.jutlgntent a.;ide, unless it i.s satisJied thttt it is in the interesl,v of justice to do so; b) gire tlelails o/'the deJbnce to the upplication; and (r)) hove o s\t)orn statement in support o.f the appliccrlion. The Court muy set aside the.iudgment in de-fault if it is satis.fied thut tht' defenclctnt (a) has shov'tt reasonable cause .fbr not de.fending the appliccttion; and (b) has r.t meritorious de.fbnce, either about his liobility .frtr tlte ttpplicarion or about the urnounl o.i the uppliccttion." Having heard the Defendant and having considered the sw'ont statements and the skeleton arguments filed in support of the application the question before me is whether the Defendant has fully satisfred the requirernents laid down in the above provision. I will therefore consider the same in the context of the Defendant's three main arguments in and the response thereof from the Claimant. The Delbndant's first argument in support of its application was an explanatiort on why they failed to respond or file a defence on the summons ftorn Claimant despite ha',ring entered an appearance. The Defendant deponed that they did not file a response ot' defence within tlie prescribed time as required due to the fact that the transaction, subject of the present action. occurred u,ay back and. because of the relocation of the Delendant's oft-ices, the-v had lost some documentation in respect of the matter. They' claimed to have received instructions late after the Def'endant had located the documents surrounding the sale transaction. This \ /as apparently why they had delayed in responding and filing a defence in the matter. I must state that I found the Defbndant's argument faulty. It should be obscrved that at the tirne the Claimant was filing and serving the summons on the Defendant, there were two documents in the Claimant's List of Documents, namely; the sale agreement for the land betw,een the Claimant and the Def.endant, and a lettel of demand from the Claimant's Counsel to the Defendant. These documents \\,ere served on the Delendaut logelher rvith the summons as part of front loading. t7 18. r9. In response to the summons> the Defendant filed and served the Claimant its purported defence which showed only one document in their List of Documents i.e., the very same copy of the sale agreement between the Clairnant and the Def'endant that was part of the Claimant's summons. The same sale agreement has also been highlighted in the Defendant's swom statement filed in support of the present application. If one considers the foregoing, one wonders which other documents relevant to the matter had allegedly gone rnissirrg at the time of the Defendant's alleged relocation to another office as claimed by the Defendant i.e., the documents which had resulted in Counsel's delayed receipt of instructioris from the Defendant and then the filing of the response and the defence? It is.very clear that the only document that the Defendant had was the sale agreement that was served to the Defendant together with summons. There is not any other document on the Defendant's List of Documents apart from the sale agreement. So which documents were allegedly located after a while leading to the delay in the filing of the purported defence as claimed by the Defendant? I do not think there were any. The foregoing is fuither fortified by the Defendant's own indication its List of Documents form that the Defendant is not in possession of any documents relating to the claim. For that reason, I find that Counsel was simply trying to pull a fast one on this Court, which is very unforlunate. As much as we, sometimes, find ourselves on the right end of Counsel's misrepresentation, surely this does not happen all the time. This is one such example. This conduct is never appreciated and must be condemned with the contempt it deserves. On the Defendant's second argument that it has a bonafide and meritorious defence against the Claimant's claim, I note that the Defendant has exhibited a defence filed in this Court as "fN3". What is confusing though is that the defetrce was filed on 31 June 2024, yet the current application before this Court was filed on 31 May 2024. So, how did the Defendant exhibit a defence filed on 31 June 2024 in an application filed on 31 May 2024? The above confusion has, however, been debunked by the Claimant's sworn staternent in opposition to the application. The sworn statement has exhibited another defence that was filed on the 31 May 2024. What is clear from this version of defence is that its contents are slightly different from those in the other defence filed on 31 June 2024. I will not make direct reference to the contents of these 'odetbnces" save to state that they show varying positions from the Defendant in respect of the rnatter. From the Claimant's explanation, which makes so much sense, the above confusion arose because of the Defendant's unethical and underhand conduct. The Claimant explains in paragraph 11 of the sworn statement as follows: "(Ipon incluirl: v'i,.h the de/izndanl'^\ process server, the prctces's server in/ormed me thol the "/irst deJbnce.filed on 3l't May 2021tt'a,g remcvecl 20. 21. 22. 23. 24. 26. fi'om the Court file. It is my belief that the removal of the defence filed on 3l'/ May 2021 /rom the Court file is to conceal the real position of the deJbndant. I believe that de.fence contained in exhibit 1I3 ls merely a sham. " 25. And in paragraph 12 of the sworn statement. Counsel depones as fbllows: " It is my further belief that the removal of a document duly filed with the Court of record is an abuse of the court process." I must say that tlle Defendant's conduct of this matter left so many things to be desired. Apart from trying to mislead the Court on the reasons for the Defendant's failure to respond and file its defence, this time around, the Defendant proceeded and filed a defence on the Court file on 31 May 2026, showing its position on the matter, fully backed by a sworn statement veriffing the same. However, the very Defendant silently and unprocedurally extracted the said defence from the Court file and unprocedurally replaced it with a substantially different defence, fully verified by another sworn statement. As it stands, the record only has the defence filed on 3 1 June 2024. What beats this Court is that the Defendant's counsel surely knew that what he did was not in order. I am very sure that he was convinced that he had pulled it off and was going to get away with it. Indeed, in the absence of the Claimant's counsel refusing to accept service of the 31 June 2024 defence, they could have gotten away with it. This leaves a sour taste and begs further questions: what is it that has gone so wrong with the so-called honourable profession? Looking at the turn of the events, it is very clear that the Defendant's counsel conduct falls short of a party who has a bonafide and meritorious defence in the matter. It shows apary who, through counsel, is insincere and willing to do anything unprofessional and unprocedural just to secure an opportunity to have the default judgment set aside. And looking at the purported defences, I am convinced that the Defendant does not have a bonafide and meritorious defence in this matter. In any case, these purported defences were of no effect because they were both filed after the Court had long entered a default judgement which is still in effect. The Defendant's third argument in support of its application is that they had filed the application to set aside the default judgment within three months as required by Order 12 Rule 21(2)(b) of the CPR 2017. I find this strange because it is very clear that the Defendant's applicationwas filed on 31 May 2024. This is beyondthree months for a default judgement that was entered on 2 February 2024. A simple count of the days show that the application was filed after 3 months and 29 days from the date the default judgment was entered. This cannot be said to be an application that was made within 3 months. 27. 28. 29. However, as can be noted, Order 12 Rule 21 (2)(b) provides a lifeline. It states as follows: 30. "where the application is made more than 3 months after the judgment was entered, explain the deloy; and the Court shall not set the judgment aside, unless it is satisfied that it is in the interests of justice to do so " My view is that the lifeline only applies where the delay has been explained. In other words, the Court will only consider setting aside the judgement in the interest of justice where there is an explanation on the delay. Where there is no such explanation the lifeline will not be triggered. Due to the firm belief that"they had made the application within three months; the Defendant has noJ explained the delay in making the application as required by Order 12 Rule 21(2)(b). Assuming the Defendant's reason for having failed to file the application within three months goes back to their earlier argument of missing documents due to the Defendant's office relocation, then that falls off for the very same reason I refused to accept it in the first place. In any case, I was still going to have difficulties in accepting the Defendant's reliance of the lifeline in Order 12 Rule 2l(2)(b) even if the Defendant had given reasons for the delay in filing the application for many reasons. It should be noted that deciding a matter in the interest of justice means allorving the Court to prioritize fairness or equity and reasonable outcomes over strict adherence to procedural rules. In other words, the Court follows rather a flexible approach to the strict adherence to the procedural provisions in favour of looking at the net effect of the matter i.e., whether iustice is done in the matter. This is usually done to preserve and maintain the integrity of the legal system. In deciding a matter in the interest ofjustice, the Court must balance the needs of both sides before rushing to decide on the same otherwise rules of procedure may be rendered obsolete. InAlpine Bulk Transport Co. Inc. v. Saudi Eagle Shipping Co. Inc. (The Saudi Eagle) [i986] 2 Lloyd's Rep.22l, the conduct of the defendant's lawyers was key in the court's decision not to set aside a default judgment. In the matter, the defendant's lawyers were criticized by the court for having acted in a reckless manner resulting in a deliberate failure to defend the claim. This lack of diligence was found to be unacceptable and resulted in the court distinguishing it from a simple procedural blip. The court deemed this behaviour as treating the court with contempt. In the present case, as per my earlier observations, which I will not belabour to repeat, it is very clear that the defendant's conduct left a lot of undesirable marks across the board. The Defendant have attempted to deliberately mislead this Court in so many instances in the rnatter. They proceeded and filed two distinct 'defences' in Court both of u,hich were verified by a sworn as to their contents, yet they were different. The Defendant's counsel unprocedurally expunged a docurnent from the Court's file without leave or permission from the Court. 3t. 3 /.. )J. 34. 35. 36. Section 89(2) of the Legal Education and Legal Practitioners Act makes it a disciplinary offence for Counsel to mislead the Court. In the same vein, removing Court documents from the Court file without leave or permission of the court, or replacing any document duly filed in the Court file without leave or permission of the Court is a misconduct. In summary, the conduct of the Defendant's Counsel in this matter has been one which borders on contempt and an abuse of the process of the court. Use of unethical tactics in litigation should not be allowed in the legal practice at all cost. Any Court and indeed this Court should not patrcihize that kind of conduct by counsel as it can erode the integrity of the entire legal system. Accordingly, looking at all the factors, including the conduct of the Defendant's counsel in the matter,I do not have any justification to consider the matter in the interest ofjustice. Overall, and in conclusion, it is my finding that the Defendant's application has failed not only to satisff the requirements of Order 12 Rule 2l of the CPR 2017 but also transgressed the considerations that this Court takes into account when looking at matters in the interest ofjustice. In that rcgard, the application is dismissed in its entirety. I further award the Claimant costs of this application. -)/. B