HIGH COURT OF LESOTHO
Application of :
AGRICULTURAL DEVELOPMENT BANK LTD. Applicant
J.M. TLALI Respondent
the Hon. Acting Judge Mr, Justice J.M. Kheola on the 5th October.
an application for the compulsory sequestration of the estate of the
applicant seeks an order in the following terms :-
the estate of Albert J.M. Tlali be and is hereby placed under
provisional sequestration in the hands of the Master of the
Court of Lesotho, Maseru.
a rule nisi do issue calling upon the said Albert J.M. Tlali and all
other interested persons, t6 show cause, if any, to
Court on Monday the day of 1983 at 9.30 a.m. in the forenoon or as
soon thereafter as counsel may be heard, why
a final order of
sequestration of the respondent's estate should not be granted.
and for alternative relief. This application is supported by an
affidavit sworn to by one Gabriel Mashape who is the managing
Director of the
duly authorised to represent the applicant. He states that on the 2nd
March, 1981 the applicant entered into a written
loan agreement with
the respondent and advanced to him the sum of R20,578.50. The
respondent breached the terms of the agreement
on various occasions.
The applicant sued the respondent under case number CIV/T/91/1982 for
payment of the balance outstanding
in terms of the loan agreement.
The respondent consented to judgment in the amount of R18,864.60,
costs of suit and interest at
the rate of 6% per annum a tempore
morae as from the date of issue of the summons to the date of
payment. A consent order was granted
by this Court on the 31st May,
2nd June, 1982 a writ of execution was issued. On the 16th November,
1982 the deputy sheriff filed a return of service in
which he stated
that respondent "has no attachable property."
date of the judgment in CIV/T/91/82 respondent attempted to repay the
loan by way of monthly instalments of R1000 per
month. The three
cheques which the respondent made payable to applicant's attorney,
Mr. Harley were dishonoured and returned marked
drawer," There are other creditors to whom the respondent is
indebted in the sum totalling R4004.10.
13th June, 1983 Mofokeng, J. granted the application as prayed and a
rule nisi was issued for an order in the following terms:-
the estate of the defendant/respondent Mr. A.J.M. Tlali being is
sequestrated in the hands of the Master of the High Court, Maseru.
the respondent, or any other person, be and is hereby called upon to
show cause, if any, on Monday the 11th day of July,
1983 at 9.30
a.m. in the forenoon or as soon thereafter as the matter may be
heard why his estate should not be finally sequestrated.
a copy of this 0rder is to be advertised before the return date,
once in the Government Gazette, and once in the Lesotho
Mr. Frederick Pretoius be and is hereby appointed as the Provisional
respondent has filed an opposing affidavit in which he admits that he
is indebted to the applicant in the sum of R13,719.00
He contends that the repayment of the loan must be made within the
prescribed period of five years. He seems to
be under the impression
that applicant is not entitled to demand repayment of the full amount
before the expiry of the prescribed
period of five years. I do not
agree with the respondent because clause 10 of the Loan Agreement
reads as follows .
"It is further agreed that in the event of the breach by the
borrower of any prevision of this agreement the full balance
loan and interest then outstanding shall thereupon be payable, and
the bank shall thereupon be entitled to enforce the security
respect of the loan. The borrower shall not be deemed to be in
default until after the lapse of twenty-one (21) days notice
given to him in writing notifying him of the default in payment of
instalments in which event the Bank shall be legally
claim the repayment of the whole balance of the unpaid capital and
respondent admits that he was in arrears as far as the payment of
instalments is concerned but he says that this was due to
circumstances beyond his control. One of the so called circumstances
beyond his control is that the local Health Inspector ordered
stop carrying on with poultry farming at his (respondent's)
residential site because the smell from the poultry shed was
apparently a health hazard to the other residents. This is something
that the respondent ought to have forseen. He further says
all these events there was an outbreak of poultry disease and his
hens could not lay enough eggs to enable him to pay
instalments. I do not think this is true because on the 11th May,
1981 his poultry business was in such a good condition
of the Bank went to Mafeteng and took photographs to be published "in
the Bank's annual report. (See Annexure
I to the opposing affidavit).
On the 14th April, 1982 the business was still thriving because the
respondent still had 1,500 laying
hens. (See Annexure "K"
to the opposing affidavit). It is, therefore, not true that in March,
1982 when civil proceedings
were instituted against the respondent in
CIV/T/91/82 he had only a few hens.
12 of the Insolvency Proclamation No. 51 of 1957 reads as follows :-
If at the hearing pursuant to the aforesaid rule nisi the Court is
satisfied that –
petitioning creditor has established against the debtor a claim such
as is mentioned in sub-section (1) of section nine; and
debtor has committed an act of insolvency or is insolvent; and
is reason to believe that it will be to the advantage of creditors
of the debtor if his estate is sequestrated, it may sequestrate
estate of the debtor.
petitioning creditor in this application has proved that the
respondent owes it the sum of R18,864.60 plus interest and costs
suit. This sum is far in excess of the minimum of R100.00 prescribed
by section 9(1) of the Insolvency Proclamation.
petitioning creditor has proved that the respondent has committed an
act of insolvency by producing not only a return of nulla
CIV/T/91/82, but by also annexing three dishonoured cheques for the
sum of R4910.22. These cheques were drawn by the respondent
of the applicant in an attempt to repay the debt in respect of which
the applicant had obtained a judgment in CIV/T/91/82.
I am of
the opinion that it will be to the advantage of the respondent's
creditors if his estate is sequestrated because the Trustees
have possession and control of all assets found to belong to the
respondent and will be able to realise them for the benefit
the creditors. In Wilkins v Pieterse 1937 C.P.D. 165 at page 168
Davis, J. is quoted as having said :
"No doubt experience shows that in the great majority of cases,
when a debtor has committed an act of insolvency, it is to
advantage of creditors that his estate be sequestrated. Consequently
the mere fact of such an act clearly affords "reason
that it will be to their advantage, and if the matter rests there,
the Court will sequestrate."
present application I have every reason to believe that it will be to
the advantage of the respondent's
to sequestrate his estate. In his opposing affidavit the respondent
says that he intends to divert the remaining assets
massive irrigation scheme" and it is not clear to me what that
means. If he means that this Court should allow
him to go into
another venture while his present creditors are suffering that cannot
be allowed. Allowing the respondent to take
such a risk would be
prejudicial against the interests of his present creditors. I also
take the view that the respondent does
not appear to be an honest
man; he says that he did not read the loan contract well and that
Clause 10 was not clear to him but
he signed the contract because he
did not want to enter into an unnecessary argument with the officials
of the applicant, I disagree.
He is bound by the terms of the loan
contract as they appear in the contract.
respondent signed a consent to judgment in terms of Rule 27 (1) of
the High Court Rules; he is now trying to say he did so through
pressure from applicant's attorneys. I disagree. He knew that he was
indebted to the applicant and had no valid defence against
claim. In any case, he has never applied for rescission of the
consent Judgment granted on the 31st May, 1982 in CIV/T/91/82
is the basis for the present application.
respondent drew three cheques in favour of the applicant in an
attempt to repay the loan. The cheques were all dishonoured.
these things are indicative of the fact that the respondent has not
been very honest in his dealings with the applicant. He
attempt to make sure that the cheques were met on presentation.
reasons I have stated above, on the 22nd September, 1983 the rule
nisi was confirmed with costs.
Applicant - Mr. Harley
Respondent - No Appearance.
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