CIV/APN/10/86

IN THE HIGH COURT OF LESOTHO

In the Matter of :

E.H. PHOOFOLO .............. Applicant

and

THE CENTRAL BANK OF LESOTHO Respondent

JUDGMENT

Delivered by the Hon. Mr. Justice B.K. Molai on the 9th day of February, 1967.

On 12th January, 1987, the Applicant herein filed, with the Registrar of this Court, a notice of motion in which he moved the court for an order declaring, inter alia, Respon­dent's suspension of applicant or the withdrawal of the powers and duties delegated to Applicant pursuant to section 11(4) of the Central Bank Act No. 13 of 1978 null and void.

On 14th January, 1987 a notice, intimating the intention of the Respondent Bank to oppose this application was filed with the Registrar. The affidavits were duly filed by the parties. The applicant himself deposed to both the founding and the Replying affidavits. Mr. Karlsson, the Governor of the Respondent Bank, deposed to the answering affidavit.

It is common cause that the Respondent is a body corporate established in terms of the provisions of 5.3(1) of the Central Bank Act No. 13 of 1978. The applicant is the Deputy Governor of the Respondent Bank. He was initially appointed for a term of three (3) years by the Minister of Finance on 16th November, 1981 pursuant to the provisions of S.9(2) of the Central Bank Act 1978. The appointment was on 16th November, 1984 extended for a further term of three (3) years (i.e. until 16th November. 1987) in accordance with the provisions of S. 11(1) of the Central Bank Act. 1978.

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However, before the expiry of his extended term of appointment, the applicant received a spade of letters culminating in the letter of 8th January, 1987 addressed to him by Mr. Karlsson who, as has been pointed out earlier, is the Governor of the Respondent bank. The letter reads, in part:

"Dear Mr. Phoofolo,

A reference is invited to the Secretary to the Military Council's letter CMC/ATS/001 of 5th January, 1987, revoking your suspension Order with immediate effect. In this connection you may be informed that the Board of Directors of the Bank, after having carefully examined your treatment of a foreign exchange transaction arising out of an application by Malibamatso Mining Company for financial rand to the value of US dollar 10,000, 000, has recommended to the Chairman or Military Council and Council of Ministers to advise His Majesty the King to institute investigation proceedings against you under Section 14 of the Lesotho Monetary Act, 1978 as amended.

In these circumstances all powers and duties which have been delegated to you by the Governor of the Central Bank under Section 11(4) of the aforesaid Act are withdrawn with immediate effect. This directive will be operative until the conclusion of the investigation. It is further directed that you shall not have any access to any files of the Bank except on my instructions.

Yours faithfully,

(Sgd) Erik L. Karlsson

Governor "

The applicant took the view that Mr. Karlsson had, in law, no right to act as he did under Para. 3 of the above cited letter. Wherefor, he moved the court for an order as aforesaid.

When on 5th February, 1987, the matter came before me for argument, the applicant raised two points in limine, Firstly that the Respondent bank being a body corporate had filed no resolution. Ex facie papers filed of record there was. therefore, no indication that the Raspondant

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bank indended to oppose the application or that Mr. Karlsson was duly authorised to file the answering affidavit. Secondly, that Mr. Karlsson did not aver that the facts he deposed to in his affidavit were within his personal knowledge., The proceedings were consequently defective.

The court was referred to the case of Lawrence Matime and two Others v. Arthur Vincent Moruthoane, C. of A. (CIV) No. 4 of 1986 where in writing a majority judgment Schuts, P. had this to say inter alia, at page 2:

" nor does it appear from the papers that the two Applicants themselves had the right to bring these proceedings, which among other things would have had the effect of thrusting the school in question upon the church, that church not being a party. It therefore seems to me that at the very commencement the appli­cation was defective in this respect, whether it be called technical or fundamental."

A proper reading of the judgment as a whole leaves no doubt in my mind that the Learned Judge President of the Court of Appeal was here dealing with an application invol­ving an order that would effect the rights of a church which had not been joined as a co-Applicant. The decision is, a body corporate has not filed a resolution intimating its intention to oppose an application and authorising the filing of an affidavit ipso facto renders the proceedings instituted on its behalf defective or will always vitiate the whole proceedings.

It is to be borne in mind that after the Respondent bank had been served with the notice of motion papers, a notice of intention to oppose the application, purporting to emanate from its attorneys, was filed. Section 11 (3) (c) of the Central Bank Act, 1978 specifically provides in part:

"(3) The Governor shall

1. ............................

2. ...........................

3. except as may otherwise be provided in this Act, the by-laws of the Bank or resolutions of the Board, act, contract and sign instruments and documents on behalf of the Bank ____"documents

(My underlinings)

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I conceed that it would have been wiser for Mr. Karlsson in the answering affidavit to have made a specific allegation that the Respondent bank had resolved to oppose the application and authorised him to make the affidavit. However, in view of the fact that a notice of intention to oppose, purporting to emanate from the Res­pondent bank's attorneys, was filed and that in terms of the provisions of S. 11(3) (c) of the Central Bank Act 1978,Mr. Karlsson was authorised to sign documents on behalf of the bank and on that basis apparently signed the answering affidavit, I am of the opinion that it would be carrying formality too far to uphold the first point in limine.

Coming now to the second point in limine, it seems to me that the significance of the allegation that the facts deposed to, in an affidavit, are within the personal knowledge of the deponent is to guard against inadmissible hearsay evidence. In the present case the crucial point is that Mr. Karlsson himself allegedly suspended the applicant or withdrew the powers and duties delegated to him under the provisions of S. 11(4) of the Central Bank Act, 1978.

Even if some of the facts deposed to by Mr. Karlsson may turn out to be hearsay evidence, it appears to me that on the crucial point he, himself is in possession of first hand information. It is highly improbable, therefore, that his deposition will prove to be hearsay evidence on this point. However, this, in my opinion, is not a matter of law but of fact which will properly be decided when dealing with the merit of the application.

In the result, the view that I take is that the points in limine ought not to succeed and they are accor­dingly dismissed with costs.

B.K. MOLAI

JUDGE

9th February, 1987.

For Applicant : Mr. Pheko,

For Respondent : Mr. Tampi