HIGH COURT OF LESOTHO
ROOSTER'S CRISPHY CHICKEN
(PTY) LTD 1st Respondent
JOSEPH MOTSHOHI 2nd Respondent
SHERIFF OF THE HIGH
MASERU 4th Respondent
by the Honourable Mr. Justice J.L. Kheola on the 19th day of October.
an application for an order in the following terms:
with the forms and service provided for in the rules of Court and
disposing of this matter at such time and place and
in such manner
and in accordance with such procedures as the court may deem
fit on the grounds of urgency,
a rule nisi to issue calling
upon the Respondents to show cause on date to be fixed by the court
Respondents shall not be restrained individually and severally
from attaching and or remov- . ing the goods listed in
to Mr. Moloi's affidavit annexed hereto to any destination or person
other than to the Registrar of the
above honourable Court.
shall not be ordered to release to the Applicant the goods listed in
annexure "B" to Mr. Moloi's affidavit
annexed hereto being
the property, of the Applicant.
shall not be ordered to pay the costs of this application.
shall not be granted further and or alternative relief.
prayer 2(a) shall operate with imme-
diate effect as interim interdict against the Respondents preventing
them from attaching and or removing the Applicant's goods
annexure "B" to Mr. Molo-i's affidavit annexed to any
destination outside Lesotho and directing them to deliver
same to the
Registrar of the above honourable court pending final determination
of this application.
and or alternative relief.
28th November, 1990 the attorneys of the applicant and the first
respondent appeared before me and by agreement prayer 2(a)
granted with the modification that the goods in question shall not be
removed from the place of storage without the authorisation
Registrar, applicant's attorneys and first respondent's
attorneys. After several extensions the matter was finally
together with a counter-application by the first respondent.
founding affidavit by Mr, Maitse Stanley Moloi it is deposed
that the applicant is the owner of certain cooking equipment
Annexure "B" to the founding affidavit by virtue of a
cession of an instalment sale agreement between the second
and Nedfin Bank Ltd. The copy of the instalment sale agreement is
Annexure "C" and a copy of the cession is
of paragraph 2 of the instalment sale agreement the ownership of the
goods described in Annexure."B" would remain
vested in the
applicant until full payment of the purchase price thereof . has been
paid by the second respondent.
avers that he believes that the second respondent owes the first
respondent an amount of approximately M56,420-80 in respect
and franchise fees for which the first respondent has already
obtained a judgment. In execution of that judgement
respondent has attached and is removing the property of the applicant
listed in Annexure "B". Despite the warning
applicant to the first respondent that the property being used by the
second respondent on premises at Plot 13283-145 does
not belong to
him (second respondent), the first respondent is apparently ignoring
the applicant's claim and is removing the
alleges that the second respondent has not fully paid the purchase
price of the goods in Annexure "B" and he
is at present
owing the applicant M192,640-80.
Matisonn is the Director of the first respondent. He has deposed to
an answering affidavit on behalf of the first respondent
in which he.
avers that the instalment sale agreement does not confer any rights
on the applicant because Nedfin Bank were paid
in full before the
date of the alleged cession. The cession agreement is Annexure "D"
to the founding affidavit and it
is dated the 20th November, 1990 at
Bloemfontein when the cedent signed and the 26th November, 1990 when
the cessionary signed
it at Maseru. The cheque paid by the applicant
to Nedfin Bank was paid on the 4th October, 1990. Mr, Matisonn
alleges that by making
payment to Nedfin Bank, the applicant may have
lent or advanced money to the second respondent and is probably
debit the second respondent in its books, but the full
amount under the instalment sale agreement has been paid and the
invited the applicant to produce copies of its ledger accounts and
statements in respect of the second respondent's accounts
which will reveal that the full amount of the payment to Nedfin Bank
was debited to the second respondent's current account.
This would be
corroboration of the fact that it was simply payment on behalf of the
second respondent by way of a loan.
statements of the second respondent's current account - Loan where
annexed to the applicant's replying affidavit and they
show any entry regarding the loan for the payment of the instalment
sale agreement as loan to the second respondent.
31st October, 1990 and under case CIV\APN\268\90 the first applicant
launched an application against the present second and
respondents, for ejectment from the premises described above and for
judgment in the amount of M56,420-00 all being in respect
rental; and for attachment of the movables in the aforesaid premises.
It was clear to the first respondent that the Nedfin
been discharged by payment, since the second respondent's attorney,
Mofolo, had so advised in writing in terms of Annexure "R3".
The second and third respondents were ejected on
the 2nd November,
15th November, 1990, for the first time, the first respondent was
notified of the present applicant's alleged claim to ownership
goods in question. By then the goods bad already been attached by the
deputy sheriff as landlord's hypothec for rent.
replying affidavit Mr. Moloi alleges that the applicant is the owner
of the aforesaid equipment because it was ceded to the
payment of Nedfin Bank on 4th October, 1990 and confirmed in writing
on the 20th November, 1990 through Annexure
issue that I propose to deal with is the validity or invalidity of
the cession between the applicant and Nedfin Bank Limited.
founding affidavit of the applicant no mention is made of the fact
that on the 4th October, 1990 when payment was made to
Nedfin Bank to
settle the instalment sale agreement between Nedfin Bank and the
second respondent, it was because an oral
agreement had been entered into and that it was to be confirmed in
writing at a later stage.
paragraph 3 of the founding affidavit Mr. Moloi says:
"The applicant is the owner of certain cooking equipment more
fully set out in annexure "B" hereto by virtue of
cession of the instalment sale agreement between the 2nd respondent
and Nedfin Bank Limited. A copy of the instalment sale
aforesaid is attached and marked "C". A copy of the cession
agreement aforesaid is attached and marked
very inconceivable that in the preparation of the founding
affidavit the applicant forgot the oral cession which caused
pay a very substantial amount of money. The applicant only remembered
what he calls a confirmation of the cession in writing.
I tend to
think that the written cession is an afterthought because there is no
reason why the oral cession was not mentioned,
in the founding
Raubenheimer, counsel for the applicant, referred to Christie: The
Lew of Contract in South Africa, at page 459 where the learned
"In general no formalities are acquired , for a cession, which
may validly be orally or tacitly even if the rights ceded form
of a written contract."
it is the applicant who is behaving in an unusual way by ignoring the
oral cession in its founding papers and only mentioning
it in the
Edeling, counsel for the first respondent, submitted that the
applicant must have paid Nedfin Bank as a surety of the second
respondent. He has referred to a letter from Nedfin Bank dated the
6th December, 1990 addressed to the first respondent in which
stated by the Assistant Branch Manager that the instalment sale
agreement has been settled in their books by the guarantor,
Lesotho Bank on the 4th October, 1990, He states that all the
relevant documents were subsequently ceded to Lesotho Bank.
course, a letter is not evidence
affidavit. However in the instant case the letter seems to confirm
the inference which we have drawn from the proved facts
that the oral
cession referred to only in the replying affidavit was never agreed
satisfied that the oral cession agreement of the goods aforesaid was
never entered into and seems to be an afterthought. On
October, 1990 when the applicant paid the full purchase price of the
goods aforesaid the second respondent became the new
owner of the
said goods. The applicant settled the debt as a surety or as a
lender but it is not clear why it did not debit
respondent's current account with that amount of money.
If I am
right that the second respondent became the owner of the goods
aforesaid on the 4th October, 1990; it is clear that the
be subject to the landlord's hypothec for rent and they were properly
attached on the 2nd November, 1990.
If I am
wrong that the second respondent was the owner of the said goods on
the 2nd November,
think the applicant still has to fail because as a third party and
allegedly the owner of the property aforesaid it failed
to inform the
first respondent ( a landlord) that it (applicant) was the owner of
the goods in question. In Bloemf-ontein Municipality
Ltd. 1929 A.D. 266 at p. 271 Curlewis, J.A. said:
"By a series of decisions in the Courts of South Africa the law
as to the liability of the goods of a third person for
attachment under a landlord's lien or tacit hypothec for arrear rent
has been firmly established, and it may be stated thus: When
belonging to a third person are brought on to leased premises with
the knowledge and consent, express or implied, of the
owner of the
goods, and with the intention that they shall remain there
indefinitely for the use of the tenant, and the. owner,
being in a
position to give notice of his ownership to the landlord, fails to do
so, and the landlord is unaware that the goods
do not belong to the
tenant, the owner will thereby be taken to have consented to the
goods being subject to the landlord's tacit hypothec, and liable to
instant case there is nothing to show that at the time the goods were
installed the first respondent knew that they belonged
to Nedfin Bank
and not to the second respondent or later to the applicant. It was
only on the 15th November, 1990 that a certain
Miss Metsing of the
applicant informed the first respondent that the goods in question
belong to the applicant. She, however, refused
to substantiate the
applicant's claim with any documents.
that a lessor does not form a mistaken belief as to ownership an
owner of property on hired premises should inform
the lessor of the
from a third party owner which reaches the lessor after the lessee
has fallen into arrears with his rent does not protect
party from having his goods attached. Such a notice will however,
protect him against having his property attached for
African Law of Landlord and Tenant, pp. 164-165).
present case the second respondent was already in arrears with his
rent and the notice could not help the applicant even
if it were the
third party owner of the goods.
reasons stated above the Rule Nisi is discharged with costs including
the storage charges of the goods in question.
counter-application the first respondent sought an order in the
the Applicant to pay the First Respondent the sum of M66,560-25
together with interest at the rate of 11% from 1 December
date of payment.
(Alternatively to (A):
the Applicant to sign a guarantee, as will be prepared by the First
Respondent's attorneys, in respect of the obligations
Respondent to First Respondent in
the Applicant to pay to First Respondent the sum of M55,560-25
together with interest at the rate of 11% from 1 December
date of payment.
the Applicant to pay the costs of this counter-application.
further or alternative relief.
parties in the counter-claim are referred to as in the main
application. The applicant was the banker of the second and third
respondents. The first respondent was the owner of a certain
franchise rights relating to the "Mr. Rooster" trademarks
and system and was in control of the premises being plot 13283-145
Cathedral area, Maseru. The second respondent was desirous of
establishing a Mr. Rooster outlet at the above premises, which he
could only do if the first respondent granted him a franchise
agreement for the use of the system, and a lease for the premises.
The lease would be in the franchise in the
the second respondent.
respondent says that it would only be prepared to grant the required
franchise and lease, on condition that the second
bankers (the applicant) would guarantee payment of the rent. The
applicant was involved in the negotiations because
guarantee for payment of the rent it had to pay. On the 14th July,
1989 Mr. Matisonn and Mr. Mafike had a telephone conversation
which they agreed on the wording of the guarantee. On the same day.
Mr. Matisonn transmitted by fax to Mr. Mafike the wording
upon (See Annexure R2). Applicant responded by telex on the same day,
in terms of Annexure R3, which reads:
"We are in total agreement with the draft guarantee contained in
your fax letter dated 14\7\89 - you may now proceed on the
this guarantee will be provided."
respondent says that acting on the strength of the above agreement
and the said written undertaking by the applicant,
written assurance that the first respondent may proceed on
that the guarantee would be provided, the first respondent granted
the third respondent a lease in respect of the premises
on the 1st September, 1989.
respondent never paid the rent except for three months i.e.
September, October and November, 1989 (See Annexure "B").
The first respondent denies that it ever received those three
cheques. The first respondent alleges that it would not have granted
the lease if the applicant had not undertaken the guarantee the
rentals due for the premises. As a result of the said undertaking
by the applicant, the first respondent was . thereby induced to act
to its potential prejudice in entering into the lease agreement.
applicant knew of the importance which the first respondent
placed on the guarantee, and by giving the written undertaking
applicant knew and intended that the first respondent would act
thereon as aforesaid.
CIV\APN\268\90 the first respondent sued the second and the third
respondent. Judgment was granted for arrear rent; the second
third respondents were ejected from the premises, and
granted to attach the movables in and on the premises to secure the
first respondent's hypothec for arrear rent. The movables
judicially attached, but before they could be removed and sold, the
applicant launched the main application to interdict
the removal and
opposing affidavit Mr. Moloi on behalf of the applicant, avers that
the applicant was never advised by the first respondent
grant of franchise rights and lease rights were dependent upon the
provision of the guarantee by the applicant for payments
of rent by
the third respondent.
that to the best of his knowledge and belief a proper guarantee with
full details of the terms thereof has never been given
applicant by the first respondent for final approval and signature.
The documents referred by Mr. Matisonn (Annexure R2)
forwarded to the applicant for final approval and signature. He
denies that a valid guarantee exists in terms of which
can be required to pay M66,560-25 alleged arrear rental or any
portion of that sum.
to me that the most important issue in the counter-application is the
interpretation of Mr. Mafike's telex of the 14th
July, 1989. He
accepted the draft guarantee contained in Mr. Matisonn's fax letter
of the same date. He then went on and said:
"You may now proceed
on the basis that this guarantee will be provided." This
statement is rather ambiguous in that it
is not clear whether Mr.
Mafike was saying Mr. Matisonn should proceed with the preparation of
the written guarantee or to the
granting of the lease to the third
as it may, there is one thing that is very clear. The parties
intended their agreement to be in writing. In Goldblatt v.
1920 A.D, 123 at pp 128-129 Innes, C.J. said:
"Subject to certain exceptions, mostly statutory, any contract
may be verbally entered into; writing is not essential to contractual
validity. And if during negotiations mention is made of a written
document, the Court will assume that the object was merely to
facility of proof of the verbal agreement, unless it
is clear that the parties intended that the writing should embody the
contract. (Grotius 3.14.26 etc). At the same time it is always
to parties to agree that their contract shall be a written one (see
Voet 5.1.73. v. Leeuwen 4.2., sec. 2. Decker's note);
and in that
case there will be no binding obligation until the terms have been
reduced to writing and signed. The question is in
each case one of
construction. In the present instance the learned Judge, after
con-siderable hesitation, dealt with the matter
on the basis that the
parties were bound by their verbal agreement, but that it was a
condition of that agreement that it should
be executed in writing
within a reasonable time by both of them. Such a condition he
regarded as a concurrent one, which there
was a reciprocal
obligation to perform. The point of construction is not
easy; but in my opinion the better view is that
there was no contract
until its terms had been confirmed by both parties in writing. For it
was definitely agreed that the particulars
arranged should be reduced to writing by Fremantle, and should be
confirmed in writing by Goldblatt, The former was to formulate
his own signature what he considered to be the result of the
interview, and the latter was to confirm in writing, also
his signature, the result thus submitted. That amounted, in my
opinion, to an agreement that the contract should be concluded
verbally, but in writing. And a written contract involved the
signature of both. Such a contract in the words of Maasdorp,
(Richmond v. Crofton 15 S.C., at page 189), "cannot be said to
have been fully executed until the consent of the parties
expressed by their signature upon the document or documents
constituting the written contract."
instant case the parties agreed that Mr. Matisonn would draft the
guarantee and then show it to Mr. Mafike before making
document. The latter approved the draft but for many months the first
respondent never submitted the guarantee documents
to the applicant
fact that the parties agreed that there should be a draft guarantee
agreement suggests that the parties intended that
would be in writing and that it will bring about no binding
obligation until the terms had been reduced to writing
ground alone this application is dismissed with costs the alternative
prayers are also dismissed because they are made after
a very long
delay when many things have changed. The second and third respondents
have stopped trading and have vacated the premises.
The contract was
to be in writing but the first respondent never performed its
part of the contract by failing to submit a
written contract for
signature. It has itself to blame for not acting in time.
Applicant - Mr. Reubenheimer,
Respondent - Mr. Edeling
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