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CIV\T\70\92
IN THE HIGH COURT OF LESOTHO
In the matter between:
MAMPE KHAEBANA Plaintiff
and
KENNETH YEH t\a TODAY'S CONSTRUCTION Defendant
JUDGMENT
Delivered by the Honourable Mr. Justice J.L. Kheola on the 6th day of April 1992,
In this action the plaintiff claims from the defendant the following:
The sum of M13, 115.45 made up as follows:
(i) M1727.39 being Plaintiff's mortgage instalment to the LBFC for the month of July, 1991;
(ii) M1l,388.06 being the total of Plaintiff's mortgage instalments to the LBFC for the months of August 1991 to January, 1992 at the rate of M1898.01 per month;
(b) Interest on the amounts in (a) (i) and (ii) above at the rate of 17% per annum from July 1991 to date of payment.
(c) An additional amount of M1898.01 per month or such other increased amount as the LBFC shall charge Plaintiff in respect of its monthly instalment from February, 1992 to the date when Defendant completes the repair work on Plaintiff's house and hands same
over to Plaintiff, together with interest at the LBFC's then current interest rates should any instalment not be paid on due date.
Costs of suit;
Further and\or alternative relief.
The facts of this case are not in dispute and they are as follows:
The plaintiff engaged the defendant to built for her a residential house at Moshoeshoe II, Maseru, under a construction agreement signed on the 16th May, 1989. One of the terms of the agreement provided that "in case of any dispute or difference between the Proprietor or the Architect on his behalf and the Contractor, the matter shall be referred to the arbitration of the nominee of the President for the time being of the Lesotho Architects, Engineers, Surveyors Association, and his findings shall be final and binding on both parties."
The building of the house was not carried out to the satisfaction of the plaintiff and this led to disputes between the plaintiff and the defendant. The plaintiff did not take the disputes to arbitration but tried to resolve the matter amicably. In the course of trying to resolve the disputes arising from the defendant's bad performance under the above agreement, the Lesotho
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Building Finance Corporation (LBFC) which had loaned the plaintiff money to finance construction of the house demanded repayment of its loan from the plaintiff.
The Plaintiff was not in the position to repay the loan due to the fact that she could neither lease nor occupy the house herself and was still living in a rented accommodation elsewhere as the defendant was still in occupation of the house for the purposes of rectifying the defects in terms of the contract.
On the 16th July, 1991 a meeting was held at the offices of the plaintiff's attorneys which was attended by the plaintiff, the defendant, Mrs. Makara and Mrs Chimombe who are plaintiff's attorneys, Mr. Mabulu of Archiplan Studio and Mr. Ntene of Cost Associates. In regard to item (c) on the agenda the minutes read as follows:
"Items (c) regarding liability for the resultant losses: Ms. Khaebana pointed out that she was insisting that the mortgage
payments plus interest due to the Lesotho Building Finance should be paid by Mr. Yeh, Mr. Yah on the other hand insisted that he was only liable for the said amounts for the period he would take possession of the site while doing the repair work. It was agreed that discussion and finalisation of the issue would be deferred to a later date and that Mrs. Makara would convene another meeting to address the issue specifically.
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The meeting adjourned having agreed on all items except item (c)."
It is common cause that the defendant is refusing to pay the mortgage instalments. He is of the opinion that the non-fulfilment of his undertaking aforesaid as being a dispute or difference between him and the plaintiff under the construction agreement and therefore subject to determination by arbitration as provided for under the agreement. Hence he has raised a special plea in abatement in that arbitration is a condition precedent to the above action.
Alternatively that the minutes quoted above clearly show that there was no contract because there was no meeting of the minds of the parties.
On the other hand the plaintiff's attorney's submission is that the defendant's undertaking in the above minutes, although arising during the course of negotiations aimed at rectifying defendant's mistakes under the construction contract, is an altogether new agreement and does not form a term of the construction contract. So that disputes arising from it cannot be subject to arbitration under the construction contract unless it can be shown that this was the intention of the parties. The onus falls on the defendant to prove on a
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balance of probabilities that it was in fact the intention of the parties that disputes arising from this new agreement had to be referred to arbitration (See French v. Sterling Finance Corporation (Pty) Ltd. 1961 (4) S.A. 732).
It seems to me that the first issue to be resolved is whether at the meeting held on the 16th July, 1991 the parties reached any agreement. If it is found that they entered into any contract the Court will have to determine whether that was an altogether new contract which had nothing to do with the original construction contract and that it shall not be referred to arbitration. If the Court finds that there was no new contract, that will be the end of the matter.
The last sentence of the minutes of the meeting of the 16th July, 1991 is very clear. The words used are very simple and straightforward. "The cardinal rule of construction is that words must be given their ordinary, literal, grammatical meaning" - Volschenk v. Volachenk 1946 T.P.D. 486 at p. 487.
Note, however, that 'what seems a clear meaning to one man may not seem clear to another........ The "literal" meaning is not something revealed to judges by
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a sort of authentic dictionary; it is only what individual judges think is the literal meaning' per Schreiner, J.A. in Savage v. Commissioner for Inland Revenue 1951 (4) S.A. 400 (A.D.) at p. 410.
Giving the words in the last sentence of the minutes their ordinary literal and grammatical meaning I come to the conclusion that there was no agreement. In other words no new contract was entered into.
When the whole of item (c) of the minutes is read it becomes even clearer that there was no new contract. It was agreed that discussion and finalisation of the issue would be deferred to a later date and that Mrs. Makara would convene another meeting to address the issue specifically. No such meeting was convened and there is no indication that the issue was ever discussed again as agreed by the parties.
It is clear that what transpired at the meeting was a discussion but no agreement. The plaintiff insisted that mortgage payments plus interest due to LBFC should be paid by the defendant. On the other hand the defendant insisted that he was only liable for the said amounts for the period he would take occupation of the site while doing the repair work. The defendant never
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agreed to pay the mortgage payments plus interest due to LBFC. But the plaintiff is now claiming the whole amount basing her claim on what she regards as an undertaking by the defendant at the meeting of the 16th July, 1991. There was no such undertaking. The parties agreed that the discussion and finalisation of the issue would be deferred to a later date. Finally it was stated in no uncertain terms that the meeting adjourned having agreed on all the items except item (c).
It seems to me that what happened was that the defendant was making an offer that he would pay mortgage instalments plus interest for the period he would take occupation of the site while doing the repair work. On the other hand the plaintiff was insisting that the mortgage payments plus interest due to LBFC must be paid by the defendant. She was not restricting the payment only to the period during which defendant would be in occupation of the site while doing the repair work. The parties did not agree on the period when the defendant would be liable. That was the reason why it was agreed that the discussion and finalisation of the issue was deferred to a later date.
I have come to the conclusion that there was no contract between the parties and that there is no cause
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of action based on any contract.
In the result the action is dismissed with costs.
J.L. KHEOLA
JUDGE .
6th April, 1992.
For the Plaintiff - Mrs. Makara
For the Defendant - Mr. Klaas.
