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.

2

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

3

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)

4

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