HIGH COURT OF LESOTHO
JACOBUS FREDERIK STEYN N.O. Applicant
CAPACITY AS PROVISIONAL TRUSTEE Petitioner
ESTATE GUISEPPE FLORIO)
HOTELS INTERNATIONAL (PTY) LTD 1st Respondent
DIAMOND CUTTING WORKS (PTY) LTD 2nd Respondent
QUALITY AGGREGATE INDUSTRIES (PTY) LTD 3rd Respondent
PROPERTIES (PTY) LTD 4th Respondent
C J C
(PTY) LTD (BOCCACCIO RESTAURANT 5th Respondent
HOLDINGS (PTY) LTD 6th Respondent
VIEW HOTEL (PTY) LTD 7th Respondent
MINING (PTY) LTD 8th Respondent
DRILLING (PTY) LTD 9th Responsdent
CRUSHERS (PTY) LTD 10th Respondent
by the Honourable Mr. Justice J.L. Kheola on the 18th day of
an application that the respondent companies be placed under
provisional compulsory liquidation in the hands of the Master
High Court of Lesotho. On the 19th October, 1988 the applicant/
petitioner was appointed as provisional trustee of the insolvent
estate of Guiseppe Florio.
respondents are all companies registered as such in terms of the
Companies Act 1967 of the Kingdom of Lesotho and are carrying
business variously as such within the Kingdom of Lesotho.
intention of the applicant/petitioner was to move this application on
the 21st October, 1988 as an ex parte application but
Mr. Buys of the
firm of attorneys named Du Preez, Liebetrau & Co. got wind of the
fact that Mr. G. Florio had been provisionally
sequestrated and that
an application was to be made to obtain a provisional compulsory
liquidation of the respondent companies.
He approached the
applicant/petitioner and Mr Pick, counsel for applicant/petitioner,
but they refused to give him any information
21st October, 1988 I made an order in the following terms:
petitioner must serve the respondent companies with the Notice of
Motion and the accompanying documents on or before the 26th
respondents must file their opposing papers on or before the 31st
petitioner shall file replying papers on or before the 2nd November,
shall be made on the respondent companies either at their respective
registered head office addresses, or at their principal
matter shall be heard on the 4th November, 1988 at 9.30 a.m.;
shall be costs in the cause.
application has been withdrawn and the only issue to be decided is
that of costs. Rule 43 (1) (a) of the High Court Rules 1080
"7 (a) A person instituting any proceedings may at any time
before the matter has been set down and thereafter by consent
parties or by leave of the court, withdraw such proceedings."
4th November, 1988 the question of costs was argued before me by Mr.
Edeling, counsel for the respondents and Mr. Lubbe,
counsel for the
applicant/petitioner. It will be necessary to set out correspondence
between the parties' counsel after the order
of sequestration of the
estate of Mr. G. Florio was obtained.
letter was written by Mr. Buys to Messrs Harley & Morris and
reads as follows:
SEQUESTRATION: G A M FLORIO
CLIENT: D.W. FRIEDMAN
letter servos to inform you that we act on behalf of Mr. Florio as
well as on behalf of the companies mentioned in the schedule
Petition in terms o whereof you obtained a Provisional Order of
Sequestration against Mr. Florio, has now come to hand and we
had the opportunity to peruse the documents.
from the Court Order that Mr. Steyn has been appointed as the
Provisional Trustee herein. We hereby inform you that we have
instructions to represent Mr. Florio in this matter and all other
affairs affecting him and give you notice that Mr. Steyn should
communicate with the writer hereof in any matter relating to this
estate or to Mr. Florio.
request Mr. Steyn to contact the writer hereof before he takes any
actions against the insolvent or before carrying out
investigations in the estate due to the fact that the affairs of Mr.
Florio are very complex and are, most of the time, not
as they appear
from the outside. \We hereby tender our fullest co-operation and
assistance to the Provisional Trustee in carrying
out his duties.
reason why we request you to communicate with us in all the matters
relating to the affairs of cur client, is specifically because
about G.45 p.m. on the 20th day of October 1988 and at the Maseru
Cabanas, the writer hereof approached Mr. Steyn in the gambling
and asked him whether it was true that an Order for Provisional
Sequestration was granted against Mr. Florio and that
he was .
involved. Mr. Steyn emphatically denied this fact and in fact said
that he knew nothing of the sequestration. It has
now become clear
that this was a blatant lie as Mr. Steyn signed an affidavit on 19th
October, 1988 consenting to be appointed
as the Provisional Trustee
in the estate of Mr. Florio.
the same occasion the writer hereof approached Advocate Pick of
Bloemfontein, also in the gambling hall, whether he was involved
the application that was moved against Mr. Florio. At first he
denied any knowledge of this fact but after the writer hereof
confronted him that he was not telling the truth, ho said that it
might be the truth. He also declined to give further information
said that "the men might not like it."
was quite clear to the writer hereof that both these gentlemen were
not prepared to disclose any fact or to be helpful in any
in fact, tried everything to not disclose any matters relating
to this sequestration.
view of the fact that the Court Order is dated 20th October 1988,
Mr. Steyn was already the Provisional Trustee. He therefore
the writer hereof who was representing Mr. Florio. Although Mr.
Steyn did not, at that stage, know that the writer hereof
on behalf of Mr. Florio, he should have clarified the . writer's
involvement in the matter and thereafter state that
he was not
prepared to release any information or to co-operate with him.
there is going to be a situation where the Provisonal Trustee
withholds Information, it can only prejudice . the affairs of
Florio and all parties involved.
tried on two occasions during this morning to make contact with Mr.
Steyn but were, on both occasions, advised that Mr. Steyn
in consultation, and not able to talk to the writer, He, however,
undertook to return the call but has, to the time
hereof, not done so.
clear from the papers that you intend to involve the affairs of the
companies where Mr. Florio is involved, in his personal
hereby give you notice that you should not interfere with the
companies or with the business activities of those companies
do not form part of the estate of Mr. Florio and should not be
prejudiced in any way.
further notice that if you do, in fact, intorefere in the affairs of
the companies, we reserve the right to approach the Court
and to claim damages should the companies sustain any damages as a
result of your interference.
hereby give you notice that the writer hereof will not be in office
from 1.00 p.m. today but all matters can be communicated
Koornnof of this office.
notice that if you intend to bring any further proceedings either
against our client or against any of the companies,
adequate notice should be given to this office.
Yours faithfully, -
DU PREES. LIEBETRAU & CO. "
The reply to the above letter reads:
We acknowledge receipt of your letter dated the 21st October 1988 and
note the contents thereof.
The liquidation proceedings of the Respondent Companies under Civil
Application 325/33 will not be proceeded with at the present
pending what emerges from a meeting proposed between the Trustee of
Florio's Insolvent Estate, your Mr. S.C. Buys and Mr.
tomorrow at 2.30 p.m. at your offices in Ladybrand.
Consequently, we hereby file a Notice of Withdrawal from the-Rolls
and in the meantime this application will not be moved until
Trustee has completed his investigations with your Mr. Buys and Mr.
Florio as per paragraph 4 in your letter under reply. We
went to give
you the opportunity to make full disclosure of your Client affairs.
HARLEY & MORRIS."
28th'October, 1988 the respondents' attorney wrote a letter to
applicant's attorneys which reads as follows:
D. FRIEDMAN / G.A.M. FL0RIO
We refer to your letter dated 25th October 1988 and noted the
We wish to advise you that we intend to keep strictly to the Order
made by His Honourable Mr. Justice Kheola on the 24th instant,
also to comply with the time limits set out therein.
We hereby place on record that you have not served the papers in
terms of the Court Order and that wo intend to include this aspect
our opposing papers.
We do not understand what effect the discussions you mention in your
letter, can have on the liquidation application.
We confirm that we have the discussions with Mr. Steyn and it did not
change the situation at all.
DU PREEZ, LIEBETRAU & CO."
The Notice of Withdrawal from the Rolls reads as follows:
"Kindly note that the above mentioned matter, previously set
down for hearing on Friday the 4th day of November 1988 on an
basis, be and is hereby withdrawn from the Rolls for hearing on that
date, and may be reinstated for hearing at a date to
be arranged by
the Registrar and and the Attorneys acting for the other side."
It is dated the 25th October, 1988.
Oh the 26th October, 1988 respondents' attorney filed a Notice of
Application in terms of Rule 30 (1) indicating that on the
November, 1988 an application would be made for the setting aside of
the Notice of Withdrawal from the Rolls on the ground that
it was an
irregular and improper step inasmuch as the date of hearing was fixed
by an order of Court and it followed that any proposed
from the Roll required leave of the Court. It was further noted that
the Withdrawal was a unilateral attempt by the
applicant to postpone
the matter sine die without a tender of costs and without leave of
the Court or the consent of the respondents.
respondents noted that they intended to abide by and to comply with
the abovementioned order of the Court.
1st November, 1988 the applicant's attorneys filed a Notice of
Withdrawal in which the application was withdrawn against
respondent companies and a tender of taxed party and party costs was
made to the respondents.
conceded that the application is fatally defective because the
petitioner had no authority to institute these proceedings
of section 18 (3) of the Insolvency Proclamation No. 51 of 1957 which
provides that without the authority of the High
Court a trustee shall
not bring or defend any legal proceedings. However, he submitted that
there was no need for the respondents
to file a lengthy opposing
affidavit on the 31st October, 1988 because on the 25th October, 1988
applicant's attorneys clearly
indicated that the application would
not be heard on the 4th November as it was being withdrawn from the
Edeling argued that the Notice of Withdrawal from the Roll was
irregular in that it was a unilateral attempt by the applicant
postpone the matter sine die. I agree with Mr. Edeling that in terms
of Rule 43 (1) (a) the applicant was bound to obtain the
the respondents or leave of the Court to withdraw the application. He
never approached the respondents' attorneys about
the withdrawal nor
did he indicate that leave of the Court would be sought. In any case
the so-called Notice of Withdrawal from
the Roll was not at all a
withdrawal of the matter as contemplated by Rule 43. It was an
attempt to postpone the matter sine die
as the applicant made it
quite clear that the matter "may be reinstated for hearing at a
date to be arranged by the Registrar
and the Attorneys acting for the
to me that the matter was not actually withdrawn by the Notice of
Withdrawal dated the 25th October, 1988 and that ' the
could not take any chance and neglect to file opposing affidavits. On
the day the matter was reinstated they would
probably be barred from
filing it. The Court Order made it quite clear that they must file
their opposing affidavits on or before
the 31st October, 1988.
applicant has indirectly admitted that the Notice of Withdrawal from
the Rolls dated the 25th October was not a proper withdrawal
on the 1st November, 1988 he filed a proper Notice of Withdrawal in
which costs on party and party scale were tendered.
that the respondents unnecessarily incurred expenses by filing a
lengthy affidavit is untenable inasmuch as the
satisfied that the respondents were entitled to file the opposing
affidavits because the application was withdrawn after the
October which was the date on which the Court Order required them to
file their opposing affidavits. I therefore come to the
that the costs must include the opposing affidavits and appearance of
counsel on the 4th November' to move application
in terms of Rule 30
(1). The Notice of Withdrawal dated the 1st November was also
defective and was an irregular and improper step.
The applicant could
withdraw the matter only with the consent of the respondents or by
leave of the Court, neither of which has
question to decide is whether the applicant should pay respondents'
cost on party and party scale or on attorney and client
bonis propriis. In the case of In Re Alluvial Creek, LTD. it was held
that an order against a party to pay attorney and
client costs may be
made by the Court not only where there has been something in the
conduct of that party such as malice or misleading
the Court Which
merits punishment but also where the proceedings are vexatious, by
which is meant that the proceedings have the
effect of being
vexatious although the intent may not have been that they should be
of Schlesinger v. Schlesinger, 1979 (4) S.A. 342 is is authority for
the proposition that attorney and client costs are
awarded if there
is proof that the applicant and the legal advisers had brought the
application with a reckless disregard for the
full and true facts in
an effort to obtain some tactical advantage of the respondents.
also authority that the non-disclosure or suppression of facts need
not be willful or mala fide to incur the penalty of
and that a litigant who approaches a Court ex parte is not entitled
to omit a fact or attitude of his opponent which
is relevant to the
point in issue merely because he is not prepared to accept the
Estate & Trust Corporation v. Central India Estates, LTD 1923
W.L.D, 121 an application for the liquidation of a company
withdrawn on the return day, and the Court being satisfied that the
applicant acted in a reckless, vexatious and malicious
ordered him to pay respondent's attorney and client costs.
clear from the cases quoted above that attorney and client costs are
awarded where the applicant acted in a reckless, vexatious
malicious manner. In the letter of the 21st October, 1986 addressed
to applicant's attorneys, Mr. Buys made it quite clear
in the first
paragraph that they (i.e. Du Preez, Liobetrau & Co.) were acting
on behalf of all respondents except the 4th and
6th respondents. Mr.
Buys specifically stated in the last paragraph of the letter that if
the applicant's attorneys intend to bring
any further proceedings
cither against Mr. Florio or against any of the companies prior and
adequate notice should be given to
his office. He also mentions in
paragraph 4 that, the affairs of Mr. Florio are complex and tendered
his fullest co-operation and
assistance to the provisional trustee
(applicant) in carrying out his duties.
applicant and his attorneys and counsel refused to give notice to the
respondents' attorneys and decided to move this application
parte basis. On the 24th October I ordered that
respondents must be served with the Notice of Motion. Mr. Fick had
argued that Mr. Koornhof had no locus standi yet he had not
given chance to prove that he had locus standi. In his affidavit
supporting liquidation of the respondents the applicant omits
mention that respondents' attorneys had requested prior service and
that the affairs of Florio wore very complex and that Mr.
offered his fullest cooperation and assistance. This information had
to be disclosed to the Court even if the applicant did
not accept its
21st October, 1988 an advertisement appeared in the "Lesotho
Today" and reads as follows:
"Various business and commercial buildings for sale: We have
various businesses i.e. butchery, restaurant, lodge, hotel and
commercial premises for sale. Only serious buyers please."
advertisement was made by Mr. Buys. In the addendum to the petition
the applicant suddenly came to the conclusion that the properties
advertised were the assets of the respondents; he said the
advertisement ironically confirmed what he had previously informed
this Court, both in CIV/APN/325/88 and CIV/APN/323/88 and verified
what Mr. Telford had indicated in his affidavits in regard to
disposal of these assets. The petitioner had made no inquiry.:;
concerning the properties advertised, he merely assumed that
were respondents' assets. It has now turned out that the
advertisement concerned entirely different properties which
nothing to do with the respondents.
to me that the applicant did not make proper
by contacting Mr. Buys and establishing exactly which businesses were
involved. Ho was reckless and wanted to snatch
an order at all costs.
As a provisional trustee of the insolvent estate of Mr. Florio, the
applicant had a duty to this Court and
to the Master of the High
Court to make a proper investigation of the affairs of the insolvent
and his companies so that he could
bo in a position to make a proper
report. He alleges that he has analysed the situation, and consulted
extensively and that he
has an intimate knowledge of Florio's
affairs, which are inter-mixed inextricably with the affairs of the
In making this bold statement the applicant was
relying mostly on what he had been told by Mr. Telford. He had taken
no steps to
seek corroboration of Mr. Telford's story. He could have
gone to head offices of the respondents to check if it were true that
no books wore kept. He refused to contact Mr. Buys who had shown his
willingness to cooperate with him in the investigations.
am of the view that the petitioner was reckless and misled the Court
by alleging that he had made extensive investigations
As a lawyer the
applicant knows very well how dangerous it is to rely on hearsay
evidence. Mr. Telford did not have any books or
letters to confirm
his stories. He had been an employee of Mr. Florio; the applicant
ought to have obtained corroboration of his
story because ho might
have left Mr. Florio's employment because of a misunderstanding
that the applicant's attorneys and counsel behaved in a manner that
leaves much to be desired by refusing to serve the-respondents'
attorneys and by trying by all means to get an order in the
where the interested party opposing an ex parte application which had
come to his notice fortuitously or by informal notice.
Be that as it
may, I am not of the view that applicant's attorney and counsel have
to be punished by an order that they pay costs
de bonis propriis.
As far as
the applicant is concerned it was common cause ' that he must pay
costs de bonis propriis because he hod no authority
to bring these
proceedings, hence the insolvent estate cannot be burdened with costs
incurred without proper authority. I have
found that ho was reckless
and that these proceedings were vexatious.
of the Court is that the applicant/petitioner must pay respondents'
attorney and client costs which costs shall include
affidavit filed on the 31st October, 1983.
Applicant/Petitioner - Mr. Fick
Respondents - Mr. Edeling.
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