AG, govt agencies in conflict over land deal gone bad

Two government agencies are on a collision course over a land deal gone bad in Lilongwe after the Lilongwe Water Board (LWB) objected to its development.

While the issue had been protracted for years, what broke the camel’s back is a consent order signed between the Attorney General’s (AG) office and Diab Dairy Farm Limited over a piece of land that the company wants to develop into a dairy farm.

LWB—through its lawyer Pempho Likongwe—interprets the consent order as the AG’s office going out of its way to unduly compensate a company that has challenged and in fact lost a court case against government.

The parastatal also says the consent order decision—made in December 2013—also allows Diab to proceed with a project that is too close to LWB’s intake point and has high potential for water pollution from animal waste.

The board says water pollution from dairy farms “not only damages the environment but it can also sicken and kill human beings.”

But in an interview on Tuesday, chief State advocate Zolomphi Nkowani said the AG’s position in the consent order has been “deliberately misunderstood”, “personalised” and “politicised” when these are legal issues that “need to be pursued in their natural environment—untainted and unconstrained by non-legal aspects.”

Nkowani explained that the consent order does not grant Diab permission to resume the project as LWB lawyers put it.

Rather, he said, the order stipulates that if the development is to proceed, it has to be done in accordance with applicable procedures, among other things.

Contextual background

According to a Diab statement of claim filed against LWB (first respondent) and the AG (second respondent) in 2012 in the High Court of Malawi (commercial division) Lilongwe Registry, the dairy firm bought 524.7 hectares from the Lilongwe district commissioner in 2005 at the cost of K10 753 168.

After the land was bought, a lease of 99 years was engrossed over the land known as Area 46/5 in Lilongwe City in favour of the dairy farm developer.

The project is situated along Likuni Road, opposite Malawi Dairy Industries and straddles Lilongwe River between Malingunde and LWB’s treatment plant in Area 3.

After securing the land, Diab said it hired consultants to conduct an environmental impact assessment (EIA) after which, the Department of Environmental Affairs issued an EIA certificate in 2006.

On May 7 2008, the company claims the Water Resources Board granted it water rights from Likuni River with LWB’s approval hence  was surprised that the water supplier objected—at the Lilongwe Town and Country Planning Committee—the development of the farm “without reasonable or probable cause”.

Diab also claims that by letter dated July 29 2011, LWB further objected to the development of the land in issue, which the company suggests culminated into further interfering with its business interests hence the move to sue LWB as first defendant and AG as second defendant.

The company said by reason of the water board’s “wrongful conduct, the plaintiff has suffered loss and damages” in form of the cost of road works in the land, cost of homestead on the farm, cost of three boreholes on the farm, loss of business and loss of use of the land.

Diab thus claimed—through its lawyers T.F. & Partners—K25 577 128.70 as special damages, general damages for wrongful interference with business, aggravated damages for loss of business, interests on the said sum from 2005 and legal costs.

But in defence, LWB denied being consulted on the land transaction and rejected assertions that it objected to the development of the farm without reasonable or probable case, saying it was against the project because the investment posed a serious health hazard to the lives of the capital city’s residents.

The board also contended that the project would have likely infringed the Water Resources Act and the Water Works Act.

LWB also argued that Diab does not deserve any damages.

In his ruling delivered on March 6 2013, High Court judge Ken Manda threw out the case on technicalities, specifically bordering on two major reasons.

First, the judge said it is the decision by the Town and Country Planning Committee that stopped Diab from establishing its farm and not the objections of LWB.

Secondly, Manda said the case was improperly brought before the court, saying the plaintiff should have first exhausted the appellant process stipulated under the Town and Country Planning Act.

The Act states that if an applicant is not satisfied with the committee’s decision, he or she can appeal to the Town and Country Planning Board.

On the other hand, the judge said he found it curious that the Department of Environmental Affairs issued an EIA certificate to the project, yet the Town and Planning Committee rejected the development.

The Lilongwe Town and Country Planning Committee rejected the application on October 31 2008, according to a notice of decision we have seen. This decision came almost two years after the EIA certificate was issued.

The committee’s grounds for the rejection were as follows:

• The proposed development is too close to the intake point for LWB.
• There is high potential for water pollution from animal wastes that would increase water treatment costs for the water board.
• Non-compliance with EIA requirements as evidenced by sinking of boreholes and requests to abstract water from Lilongwe River.

Yet, environmental authorities revoked the EIA certificate on June 25 2010, according to a letter to Diab from the department’s director Yanira Mtupanyama.

Dissatisfied with Manda’s decision in the High Court, in November 2013, Diab filed a notice of appeal in the Supreme Court on grounds that the learned judge erred in making a decision without hearing the parties and also made a mistake in making findings on the matter at a pre-trial hearing conference.

However, the company delayed filing the appeal, which LWB had already objected to.

Malawi Supreme Court of Appeal judge Richard Chinangwa dismissed the whole appeal on July 22 on grounds that there was “inordinate delay” of 35 weeks between the date the judgement was delivered and the day the company filed the appeal.

Apparently, Diab was running two appeal processes—one at the Supreme Court and another at the Town and Country Planning Board, to which LWB lawyer Pempho Likongwe had also objected.

The consent order

Also, around the same time, documents show that the AG’s office entered into negotiations with Diab, resulting in a consent order signed between the two parties  which—in Likongwe’s understanding—stipulates that the dairy project should continue and that government agrees to compensate the company.

In a July 17 2014 letter to the AG, Likongwe said: “It is very surprising to us that the Attorney General is agreeing to pay government money as compensation to Diap when Diab lost the case and does not even have good chances of success on the merits.”

Likongwe told the AG that his office has no powers to grant development permission and asked that the consent order be withdrawn.

He concluded his letter as follows: “The issue has serious ramifications. Posterity will judge those involved when [LWB] starts getting supplied with polluted water.”

And after the Supreme Court’s dismissal of Diab’s appeal for late filing, Likongwe also wrote the AG on August 13 2014, to say since the highest court had thrown out the case and disregarded the “purported consent order on grounds of bad faith,” the order is of no effect.

But Nkowani—in his July 25 2014 response to the Likongwe’s letter—said by the consent order, the AG was not grant planning permission to Diab.

Wrote Nkowani: “The Honourable Attorney General is alert to what the law says and it will not be correct to say that by this consent he has granted planning permission.”

In a separate interview in Tuesday, lawyer representing Diab, Marshal Chilenga, said what is happening to his client’s case is “a travesty of justice”, but declined to say more on the matter, saying the matter is yet to be concluded.