LESOTHO
IN THE COURT OF APPEAL OF LESOTHO
HELD AT MASERU
C OF A (CIV) 24/2024
CCA/0144/2019
In the matter between:
MATHATO MATSELISO LEFOKA APPELLANT
and
BARALI ESTATES PROPERTIES (PTY) LTD 1ST RESPONDENT
TSEPO THOAHLANE 2ND RESPONDENT
Coram: MUSONDA AJA
CHINHENGO AJA
VAN DER WESTHUIZEN AJA
Heard: 10 October 2024
Delivered: 1 November 2024
Summary
High Court delivering judgment against appellant; Appellant believing that judgment not on the merits but a dismissal on basis that disputes of fact emerged; Appellant instituting action proceedings on the same cause of action between the same parties; Respondents pleading to the, filing a counterclaim and also raising special plea of res judicata. A day before the special plea was to be heard, appellant withdrawing the action proceedings and noting an appeal almost two years after delivery of judgment;
In application for late noting of appeal, condonation refused as appellant failed to did not show any prospects of success on appeal;
Appeal struck off the roll with costs
JUDGMENT
CHINHENGO AJA:-
Introduction
[1] The appellant, Mathato Matseliso Lefoka, instituted motion proceedings in the High Court against the respondents, a company (Barali Estates (Pty) Ltd) and its managing director (Tsepo Thoahlane) in November 2022, who are in the business of land development. The High Court (Mokhesi J) heard the matter on 7 June 2022 and delivered judgment on 25 August 2022. His Lordship dismissed the appellant’s application with costs. The appellant did not immediately note an appeal against the High Court decision and did so about two years later. She noted the appeal on 30 April 2024 and filed an application for condonation of late noting of the appeal on the same day. Later, on 18 June 2024, she filed the record of proceedings.
[2] The main issue for decision in this appeal is whether the application for condonation should be granted. Before addressing this issue, I set out the background of the whole matter.
Background
[3] The appellant owned a large piece of land at Ha Tsiame Likotsi in Maseru. She divided it into thirty plots, each approximately 500 to 600 square meters in extent. She entered into an agreement with the respondents the purpose and salient terms of which are summarised by the judge a quo as follows:
“[2] On 05 March 2017 the parties entered into a Memorandum of Agreement (contract/agreement) in terms of which they agreed to bring their resources together to develop and carry out a housing development project. The development was to take place on the land belonging to the applicant, with the 1st respondent carrying out the developments. The development was to be predominantly for building houses. In terms of clause 3 of the agreement the 1st respondent’s responsibilities are:
a. To take responsibility for all costs related to the transfer of interest in land from ‘Mathatho Lefoka [applicant] to Qhobosheane Housing Development Project and to the buyers in instances where the project is completed, and the houses are successfully sold.
b. To take responsibility for all costs that shall be incurred in the development of the said houses on all the plots of land the parties have agreed to use as development sites of the project.
c. To take responsibility for the marketing and sale of the houses once the project is finalised and deal directly with third parties in matters relating to the development project.
d. To take responsibility for all the legal and financial aspects of this project and shall be, at all material times, the first point of reference for matters relating to the project.
e. To use five (5) sites out of the thirty (25) sites (sic) to construct a building for Mathato Lefoka which shall be used for commercial purposes and the leases of the same sites shall remain in her name and not form part of the houses to be sold.
[3] The applicant, in terms of the same clause 3 undertook to:
a. To transfer her interest in the said 25 plots of land, average of which are 500 m2 per plot, to the Qhobosheane Housing Development Project as soon as the sites’ respective leases are released to her.
b. To do all that is legally required or otherwise needed to her for the transfer of her interests in the said plots of land and registration of the same in favour of Qhobosheane Housing and Development Project.
Clause 4 provides that:
a. ‘Methato Lefoka shall transfer her interest in 25 plots of land to Qhobosheane Housing Development Project for a consideration of M30 000.00 (thirty thousand Maloti) per plot which shall be due and payable to her upon the sale of each developed plot.
b. Barali Estates (Pty) Ltd shall be entitled to all balance of the total proceeds after the sale of each developed plot after the M30 000.00 has been paid to Mathato Lefoka and the amount shall be inclusive of all the costs which are incurred in the development, marketing and transfer of interests in the said land.”
[4] The appellant’s main claim in the High Court was for an order –
“1. Interdicting and restraining the respondents from continuing with any developments on applicant’s sites situated at Ha Tikoe, (Masowe(II)) in the district of Maseru with immediate effect.
2. Declaring the Memorandum of Agreement entered into by and between the Barali Estates (Pty) Ltd and Mathato Matseliso Lefoka signed on the 5th March 2017 null and void and of no force.”
[5] She made several claims in the alternative including monetary claims as detailed in the notice of motion. At paragraph 8 of the notice of motion she prayed for-
“Leave of Court to turn this matter to trial and hear viva voce evidence in the event that there is a dispute of fact which cannot be resolved on papers only.”
[6] The declaration of invalidity sought is based on three grounds. First, that there was no meeting of the minds (consensus ad idem) when the parties signed the agreement. Appellant averred that she was of the view that after the plots were sold to the public, she was to be paid M30 000.00 per plot, and further, that the parties would share the profit made from the sale of each developed plot. Second, the respondents unilaterally fixed M30 000.00 as the price of each plot payable to her, which she considered to be unreasonably low. She signed the agreement and thereafter demanded M80 000.00 per plot as the purchase price. Third, the agreement provides for the plots to be transferred to Qhobosheane Housing Development Project, which she says does not exist as a legal entity and “has never been used in our project activities.” Forth, the agreement is invalid on the basis that the respondent unduly influenced her to enter into the agreement by falsely telling her that she had to sign the agreement as a matter of urgency so as to meet the timelines set by funders of the project. In this connection she averred that she signed the contract at respondents’ offices before a secretary who did not explain the contents of the agreement to her.
[7] The respondent’s position was firmly that the parties did not discuss or agree on profit sharing. The agreement, he said, is very clear on the rights and obligations of the parties and does not provide for any profit sharing. In relation to the signing of the agreement, respondents stated that the agreement was given to appellant for her consideration and opinion of her legal representatives. She had the agreement with her for a week and returned to the respondents’ office to sign it. She did so in the presence of a legal practitioner, Adv Motlamelle. She did not raise any issue regarding the agreement at that stage. It was only later that she expressed dissatisfaction with the agreement
[8] The learned judge a quo considered the alleged invalidity of the agreement. He had regard to the clear provisions of the agreement, in particular clause 4 thereof, and rejected appellant’s contention that the agreement was invalid or “null and void and of no force”. He rejected the appellant’s further contention that the parties agreed to share profits as nowhere provided for in the agreement. Applying the Plascon- Evans[1] rule, he also rejected the applicant’s allegation that she signed the agreement without its contents being explained to her. Thus, the main relief sought by the appellant was not granted.
[9] The appellant’s main alternative claim was for the cancellation of the agreement by the court even though she purported to have cancelled it on 19 June 2019 for breach by the respondents. This claim is clearly inconsistent with the claim for a declaration that the agreement was invalid from the beginning. If indeed the appellant cancelled the agreement on 19 June 2019 as stated in a letter by her legal representatives dated 18 June 2019 and attached to the founding affidavit, the proper relief she should have sought from the court was a confirmation of the cancellation.
[10] The respondents disputed the alleged breach. They advised her that they would continue implementing the agreement until they were stopped by an order of court. The rebuttal is contained in a letter by respondent’s legal representative dated 20 June 2019. The learned judge a quo accepted the respondents’ version which showed that no material breach occurred. He consequently rejected the appellant’s claim for cancellation or confirmation of the cancellation.
[11] The other alternative claims considered by the court a quo were a claim by the appellant for the respondent to return to her or hand back 20 lease documents of the subject plots in light of the purported cancellation of the agreement. The court rejected this claim because, having found that the agreement was valid and subsisted, no other valid basis for the return of the documents was established by appellant. The agreement provided for the handing over of the documents to the respondent, which had been done.
[12] The last of appellant’s claims in the alternative was for payment of sums of money alleged to be outstanding on the purchase price of each of five sites that were developed. She claimed M200 000.00, and M500 000.00 being appellant’s share of profits from the sale each of the five sites, and M180 000.00 being the purchase price and profit on a site which was under construction as at the time the application was lodged.
[13] The court rejected these claims upon a finding that the claims were seriously contested by the respondent and evidence was required to prove the amounts involved.
[14] The learned judge then discussed the approach of the courts in cases where material disputes of fact emerge in motion proceedings. He referred to the rule in Plascon-Evans as one of the ways in which such disputes of fact may be resolved. He came down heavily on appellant’s paragraph 8 of the notice of motion in which she implored the court to refer the matter to trial if material disputes of fact emerged during the hearing of the application. Relying on a passage in Room Hire[2] and another in Lombard[3] the judge dismissed these monetary claims. He said that the respondents genuinely disputed the amounts claimed and the circumstances in which they were claimed. He strongly expressed disapproval of appellant’s solicitation to the court made paragraph 8 of the notice of motion, in these words:
“[26] … What the applicant did in the present matter was to include the above quoted relief for referral. But as can be seen, the relief is made on condition that this court finds that material disputes of fact arise. The question then is whether this kind of procedure is appropriate or sufficient to avoid the consequences of dismissal on account of foreseeable disputes of fact. The answer should surely be in the negative. The stratagem employed by the applicant in this matter is not sufficient to avoid the dismissal. The disputes were reasonably foreseeable even before the application was lodged. The remarks by the court in Di Meo v Capri Restaurant 1961 (4) SA 614 (N) at 615H- 616A are apposite, ….
[He quoted the relevant passage in that judgment and continued:]
[27] In the present matter, the applicant’s counsel did exactly what she was not permitted to do: made a prayer for referral conditional upon the court finding that a genuine dispute of fact exists. In fact, the applicant’s counsel was adamant, even during arguments that disputes of fact existed. In my considered view the reliefs should be dismissed on this score.”
[15] I have stated that the learned judge dismissed the application as a whole, with costs. The judgment was delivered on 25 August 2022.
Condonation application
[16] The appellant applied for condonation of late noting of the appeal against Mokhesi J’s judgment some twenty months after the handing down of the judgment. She explained the cause of the delay in her condonation application. She said that after the judgment was availed to her and her legal representative, they both, in particular, the legal representative, misunderstood the import of the judgment. They understood it as not having dealt with the merits of the application and held the view, clearly erroneous as they later realised, that the application had been dismissed solely on the basis that disputes of fact became apparent and the application dismissed on that account only. In consequence of the wrong understanding of the import of the judgment, on 20 September 2022, they instituted action proceedings against the respondents on the same facts and cause of action.
[17] The respondents’ reaction to the summons and declaration was a special plea that the matter was res judicata. They pleaded to the merits out of an abundance of caution in case the special plea failed. The respondents also filed a counterclaim for damages in the sum of M30 million as representing their loss in the event the appellant succeeded on its main claim. All the pleadings were filed, and the case was set down for trial on 22 and 25 April 2024.
[18] On 22 April 2024, the court directed that the special plea was to be disposed of first. It further directed the parties to argue the special plea on 25 April 2024. The appellant said that on 24 April 2024, a day before the special plea was to be argued, her legal representative advised her that the action proceedings had to be withdrawn. Of this she says:[4]
“3.8 On or about the 24th April 2024, my attorneys of record invited me for consultation and advised me that upon their reading of the judgment of the Court a quo repeatedly and upon various consultations and discussions with their colleagues on the subject matter, the majority of them understood the judgment to include both the merits and a point of law on material dispute of fact.
3.9 It is on this basis that I was advised to withdraw my action because they concede that res judicata exists, and I then instructed them to withdraw the matter. I beg leave to attach a letter addressed to the other party and a notice of withdrawal and mark them annexure “MML1” and “MML2” respectively.
[19] The above development is appellant’s explanation for the delay in noting the appeal. In light of the explanation, it was submitted this Court should accept that she did not sit on her laurels. The action proceedings were instituted within the time allowed for noting an appeal, an indication that she always wished to pursue the matter. She bemoaned the fact that had she not taken the wrong procedure she would have noted her appeal in time. She dealt with the prejudice she would suffer if condonation is not granted and the importance of this case to her. On the latter aspect she expresses grave concern that the respondents have not withdrawn their counterclaim and if the appeal is not heard she has to deal with that counterclaim to its logical conclusion.
[20] Apart from giving a reasonable explanation for the delay in noting an appeal, an applicant for condonation is, among other things, required to show that she has reasonable prospects on appeal. On the latter, the appellant falls short. She was content only to say that -
“6.1 In order not to burden this Court with unnecessary repetition, I refer the Court to my founding affidavit and supporting affidavits [in the High Court application] to reveal the prospects of success. I pray that the contents thereof be read as if they are incorporated in this affidavit.
6.2 This Honourable Court will therefore find that I have excellent prospects of success which are sufficient to persuade this Honourable Court to condone the late filing of my appeal.”
[21] The prospects of success envisaged by the rules of court are assessed against the decision against which the appeal lies. The appellant did not deal with the judgment of the High Court so as to show the prospects of success against that decision. She did not set out the respects in which the court may have misdirected itself. All she did was to refer this Court to her affidavits in the High Court, which were rejected by that court. She has therefore failed to establish that she has reasonable prospects of success on appeal.
[22] The respondents opposed the application for condonation on several grounds and labelled it an “afterthought… an abuse of court process as it has been noted for an ulterior purpose … and therefore lacks bona fides.”[5] They contended that by instituting the action proceedings, the appellant acquiesced in the High Court judgment. It was on the eve of the hearing of the special plea that appellant withdrew that action and, in the letter accompanying the notice of withdrawal, she admitted their careless “flippancy in reading the judgment.” Respondents interpreted the withdrawal as a calculated move to delay or frustrate the finalization of the action proceedings and re-argue the failed application in the High Court. They submitted that a misreading of a judgment cannot be a basis for a condonation application, more so when the delay in noting the appeal is inordinate. The appellant had reconciled herself with the High Court judgment. In those circumstances she was precluded by pre-emption from appealing. In other words, by conduct inconsistent with an intention to appeal, i.e., instituting action proceedings, she acquiesced in the judgment and abandoned the right to appeal.
[23] I do not think the doctrine of peremption applies in this case. While the doctrine requires a party to make up its mind and not acquiesce in the judgment and later seek to appeal, it is also true that the conduct of the party must be such as point necessarily to the conclusion that the party does not intend to challenge the judgment: the conduct must not be inconsistent with an intention to appeal- Busamed Health Care (Pty) Ltd v Du Plessis Van Der Nest[6] and Jiyana v Absa Bank Ltd.[7] The action proceedings by the appellant are an indication that they did not agree with the outcome. Although the institution of action proceedings was a wrong step to take, and a costly one at that, appellant’s conduct cannot be said to point indubitably to the conclusion that she did not intend to challenge the adverse judgment. The respondents’ argument on peremption cannot, in my view carry the day.
[24] The respondent are not certain about their position in relation to the withdrawn action, in which they are pursuing a counterclaim. They are at the same time contesting the appeal. The uncertainty is apparent from paragraph 7.3 of the answering affidavit where they state: “In any event the progression of the trial would determine the very issues in dispute to which she has consciously to withdraw, creating an uncertainty as to the progress and conclusion of the counterclaim.”
[25] At the hearing of the appeal we inquired from them what position they were adopting in respect of the counterclaim. They indicated that they may have to withdraw the counterclaim if the appeal fails. In my view, that is a matter for them to decide. What is clear to this Court, however, is that if the appeal fails, they may not duplicate the proceedings by pursuing the counterclaim.
[26] The most convincing submission by respondents is that the appellant has not established any prospects of success: nothing has been advanced to convince this Court that there are reasonable prospects of success on appeal. Although in the replying affidavit in the condonation application, appellant regurgitated the averments she made in her affidavits in the High Court, she did not at all show how the court a quo misdirected itself. The learned judge a quo gave sound reasons for the conclusion that the agreement is valid, and that the cancellation, as an alternative claim was not justified. He also concluded, correctly so, that the monetary claims were riddled with disputes of fact. I agree with him.
[27] Where a party fails to show that it has reasonable prospects of success on appeal, its explanation for the delay in noting the appeal, however satisfactory it may be, cannot entitle the party to a condonation of the late noting of the appeal. The failure to understand the judgment could have been cured by a request to the presiding judge to clarify it for the appellant’s benefit. That should have been done as soon as the appellant received the judgment. Taking nearly two years without recognising the import of a judgment is inexcusable and the attempt to re-launch the appeal smacks of an afterthought. The High Court judgment is eminently sound, and appellant has not shown why it must be interfered with.
[28] In the result the condonation application is refused. The appeal is struck off the roll with the appellant to pay the respondents’ cost of appeal as prayed.
_____________________________
M H CHINHENGO
Acting Justice of Appeal
I agree:
___________________________
P MUSONDA
Acting Justice of Appeal
I agree:
____________________________
JW VAN DER WESTHUISEN
Acting Justice of Appeal
FOR THE APPELLANT: Ms M Lephatsa
FOR THE RESPONDENTS: Adv. M T Mpaka
[1] The rule in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984(3) SA 623 at 634E-635C
[2] Room Hire Co. (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1162, where the court said –
“… [An] application may be dismissed with costs, particularly when the applicant should have realised when launching his application that a serious dispute of fact was bound to develop. It is certainly not proper that an applicant should commence proceedings by motion with knowledge of the probability of a protracted enquiry into the disputed facts not capable of easy ascertainment … what essentially is essentially subject of a trial action.”
[3] Lombard v Droprop CC & Others 2010 (5) SA 1 (SCA) 11 where the court said-
“… Therefore, if a party ha=s knowledge of a material and bona fide dispute or should reasonably foresee its occurrence and nevertheless proceeds on motion, that party will usually find the application dismissed.”
[4] At paras 3.8 and 3.9 of founding affidavit in condonation application
[5] Para 3 of answering affidavit
[6] SC No. 2020 JDR 1331(GP)
[7] 2020 JDR 0650 (SCA)