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CIV/APN/189/99
IN THE HIGH COURT OF LESOTHO
In the Application of:
DONG PINGHUA 1st Applicant
DONG JIN HUA 2nd Applicant
Vs
ZHANG ZHAO TAI Respondent
JUDGMENT
Delivered by the Hon. Mr Justice M.L. Lehohla on the 21st day of June. 1999.
On 27-05-99 which was an extended return day when arguments were heard and Judgment reserved till 21-06-99 I had hoped that by then I would have received transcripts of those arguments and submissions as the instant application is a product of two previous ex parte applications among the same litigants. Unfortunately the transcripts are not on hand still. Since the matter is indeed urgent and there is no saying when the transcripts would be completed the Court
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has advised itself to give its verdict and reasons thereon on this day which was
appointed for that purpose in the first place.
To give background to the instant application which was moved ex parte by Mr Nthethe on behalf of the applicants and argued by Mr Mohau on the return day against the respondent represented by Miss Qhobela it is important to indicate that the first application to start the ball rolling was CIV/APN/149/99 moved ex parte by Miss Qhobela on behalf of the instant respondent against the instant applicants. This was on 15-04-99. The interim order was returnable on 29-04-99.
On the return date the rule was confirmed by default.
On 20-05-99 Miss Qhobela again approached Court ex parte on behalf of the instant respondent against the two respondents (as then cited) plus the Court messenger who was the third respondent.
Having heard Miss Qhobela's earnest pleas the Court was constrained to grant a Rule Nisi based on the following short observations reflecting the court messenger's lack of comprehension of what he was required to do in terms of the Interim Order successfully obtained by the instant respondent who was the
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applicant in CIV/APN/149/99. The matter was at that stage simply getting out of
control and the messenger was apparently not equal to it as it was getting complicated and what seemed to be the brief involvement of police in it and their immediate inactivity further compounded the complexity of the matter.
The brief judgment granted on 20-05-99 was as follows :
"It seems to the Court after the address by Miss Qhobela and perusal of the papers that the present respondents (in CIV/APN/184/99) gained more benefit through the messenger of Courts misunderstanding of the Court Order than was asked for in their papers and granted in that Order.
In the circumstances the respondents are to be placed in the position they had craved in the interim period falling between the granting of the interim order and that prior to the granting of the final order.
In short the prayer in the instant application for reinstatement of the Rule Nisi in CIV/APN/149/99 is granted ex parte and is returnable on 03-06-99.
M.Lehohla
Signed 20-05-99"
Reference to the respondents who had gained more benefit than they had craved is reference to the instant applicants in CIV/APN/189/99 who had obtained an interim order on 11-05-99 for stay of execution of Judgment obtained by default in CIV/APN/149/99 on 29-04-99.
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In the instant application 189/99 the two applicants sought a Rule Nisi
calling upon the Respondent to show cause why :-
1.
the default judgment granted by this Court in CIV/APN/149/99 shall not be stayed, pending the outcome of application for rescission.
the default judgment ................ shall not be
rescinded.
the applicants shall not be granted leave to file their opposition to the said main application.
It was further prayed that prayer 1(a) and (b) should operate as interim interdict with immediate effect.
In his founding affidavit the 1st applicant avers that both he and the 2nd applicant are adult Chinese businessmen carrying on business of BACO SHOP Butha Buthe. The respondent who is an adult Chineseman is presently occupying the business in question. The above averments are common cause.
The 1st applicant further states that the respondents son called Zhang Yan Wu now deceased and this deponent became co-directors with the 1st applicant in Song Tsang(Pty)Ltd. The 1st applicant has attached "DPO1" substantiating his own position as Director of Song Tsang(Pty)Ltd. The respondent denies that his late son became co-directors with the 1st applicant in Song Tsang (Pty)Ltd. He
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avers that his son was the director of what is termed SOU Tsang (Pty)Ltd with
certain individuals as set out in the memorandum of the company attached to his answering papers and marked "ZYW1". But it seems to me that the difference between SONG and SOU is well accounted for in 1st applicants replying affidavit at paragraph 3. As for his assertion that "ZYW1" is not annexed he can only enjoy my sympathy for even I took a long time trying to look for it only to find that the "1" at the end of the marking is written very much like "2" at page 5 of the record. See Articles of Association
Another matter of some puzzlement is how CIV/APN/184/99 which seeks to object to things done in CIV/APN/189/99 bears a prior number instead of a subsequent one to that of the proceeding being sought to be challenged. I shall however let this curious state of affairs rest for it doesn't at all affect the sequence of events.
The 1st applicant and the wife of the late ZHANG YAN WU are brother and sister. The sister and her husband Zhang Yan Wu died simultaneously
in a road accident; leaving a minor daughter in whose interests the respondent moved the applications in CIV/APN/149/99 and CIV/APN/184/99.
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The 1st applicants averments seem to be opposed at every turn by the respondent such that even the replying affidavit confines itself to reiterating averments in the founding affidavit.
However the 1st applicant avers that the SONG Tsang or SOU Tsang company traded in retail and wholesale business acquiring a small shop at Butha Buthe under the name BACO Fashion Shop. Later as it expanded it traded under the name and style Sharp Wholesales which later changed into BACO SHARP SHOP.
In reaction to this averment the respondent raises his denial and puts the deponent applicant to proof thereof. In response the 1st applicant reiterates his statement in the founding affidavit.
The 1st applicant states in paragraph 8 of his founding affidavit that the late ZHANG terminated his directorship and took all the moneys away with him constituting his shares in the company and set up his own business in Bethlehem but died together with his wife in China before this could actually take off.
The respondent hotly disputes these averments except in so far as they relate
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to the deaths of ZHANG and his wife.
The 1st applicant avers further that after the simultaneous deaths of the two, it was decided to sell the Small Shop at Butha Buthe inside which the stock valued at M27 000-00 was to be given to the deceased's minor child. A copy of the agreement marked "DPO2"
is attached. The upshot of the respondents reaction to this averment is first neutral and he says he has no knowledge of it but later he makes a rambling attack based on speculation and grave doubts as to the deponents truthfulness and motives.
In his attempt to show that both applicants could not have been served with the interim order in CIV/APN/149/99 nor been in wilful default when judgment was taken against them finally, the 1st applicant seeks to indicate that he and 2nd applicant were arrested on 15th April, 1999 by Immigration Officers and taken to the Republic of South Africa only to come back on 25th April, 1999 and not before having been deported to China after being kept in a South African prison.
The deponent states that he and 2nd applicant came to learn only on 7th May, 1999, of the final order having been granted against them. The respondent looks to all this with skepticism and states that it is calculated to mislead the court
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as he avers the applicants were still in the country at the time in question. He maintains they are playing up to the Court for mercy in order to wriggle out of the awkward position in which they placed themselves.
The 1st applicant finally avers that he and 2nd applicant have a bona fide defence and that the shop in question is the property of a company called Dong Si (Proprietary)Ltd of which the applicants are directors. He avers further that the respondent has no locus standi in the affairs of the shop. He attached "D003" in substantiation of his averments in this regard styled Certificate of Incorporation.
Miss Qhobela in argument attacked this document as lacking in genuineness because it does not bear the Seal of the Registrar of Companies. I hold with Mr Mohau that indeed failure by the Registrar of Companies or his or her staff to do their job properly cannot be saddled on the applicants.
Miss Qhobela relying on Rule 4(1)(b) of High Court Rules 1980 submitted that service allegedly effected by the Deputy Sheriff was proper service inasmuch as the Rule in question provides that service of any process of the court.................."shall be effected by the sheriff in one or other of the following manners :-
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by delivering a copy personally to the person to be served.......
by leaving a copy of such process at the place of business or residence of the person to be served.........................".
There cannot be any quarrel with the Rules and what is provided in them. A rather disturbing feature in what is the case in the instant matter would be if the Court should blindly go along with the respondents bare assertion that the applicants were inside the country in the face of their evidence that they had been bundled out of the country in circumstances that could not have made them the unspecified Chinesemen the deputy sheriff says he served there in the shop on the day when the applicants say they were absent from the shop, and only came to know of what happened much much later when the respondent had taken possession of the shop and was denying them entry thereinto. Thus in the absence of concrete proof that they were present in the country and therefore had access to the shop it would be dangerous to come to a conclusion that they were not only served as provided in terms of Rule 4(1)(b) above but must have been in fact served personally in terms of Rule 4(1)(a).
The applicants contend that the respondent had no locua standi to have instituted proceedings in CIV/APN/149/99. Indeed this contention
tends to have
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substance in the light of the fact that the keys of the shop in question belonged to
a company in which the 1St applicant says he was a director. Granting for the sake of argument that this shop was subsequently sold to another company of which both applicants are directors it would seem that if the respondent, as definitely happens to be the case, is neither a director nor a shareholder in the original company he would have no right to bring the application in CIV/APN/149/99; more especially that it is common cause that there was no sole proprietorship in the original company.
Assuming that it is correct that the applicants were outside the country during the time of the alleged service and at the time when the matter went by default it requires no stretch of one's imagination to conclude that they would not have been able to defend the matter on the return day.
In view of the fact that what is required of the applicants is not whether their story is correct but merely that if proved it would defeat the respondent I am inclined to conclude that the applicants have shown good cause on a balance why they couldn't have defended the matter in CIV/APN/149/99 when they were outside the country at the time. See Van Rensburg & Vennote vs Den Dulk 1971(1) SA 112 where it was held as follows :
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"When, after a plaintiff has applied for default Judgment, the defendant applies for removal of bar and the plaintiff opposes it on the ground that the defence disclosed is insupportable in law, the Court will not regard the defendants allegation that he bona fide believes that he has a good defence, as sufficient. If the defence is in fact unacceptable in law, then removal of bar should be refused and default judgment granted".
In the instant proceeding I don't think it could be argued that the defence raised in respect of CIV/APN/149/99 is insupportable in law.
Given that the respondent is neither a director nor a shareholder in the company involved in CIV/APN/149/99, and that he was acting on behalf of his orphaned grand-child when he brought proceedings in that application, and given further that the grandchild is neither a director nor a shareholder in that company it becomes questionable that people with standing in that company i.e. directors or shareholders did not bring proceedings in that application if indeed there is substance in reasons that prompted that such application be moved.
Mr Mohau's argument is compelling that companies have a standing of their own and proper ways of dealing with their affairs. One such way is illustrated by the fact that if a company commits a wrong the proper person to sue is the company itself; not an individual
shareholder. Thus it would seem a sound
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proposition that if the original sale of the shop amounted to a wrong against that company it is that company that ought to have brought proceedings and not the present respondent. The basis for this being that a company can sue and be sued in its own name as a distinct juristic persona.
The applicants contend that proceeds of sale of the original company were, by agreement with the respondents late son, to be for the benefit of the respondents orphaned grand-daughter.
I need repeat that the respondent has filed CIV/APN/184/99 wherein he seeks, among other things, reinstatement of the Rule in CIV/APN/149/99. The respondents in both those applications (who are applicants in the instant matter) contend that the Rule in CIV/APN/149/99 having been confirmed and then subsequently stayed in terms of an Order in CIV/APN/189/99 cannot properly be reinstated. The proper procedure
being that the applicant in CIV/APN/184/99 proceeding was obliged to anticipate the Rule relating to the return date in CIV/APN/189/99.
As stated earlier the Court was much constrained to grant the order that was sought without adopting the proper procedure requiring anticipation of the return
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date as provided in the Rules in the event that the respondent feels prejudiced by the length of the interval between the granting of the interim order and the return date.
Rule 8( 18) unambiguously provides that:
"Any person against whom an order is granted ex parte may anticipate the return day..............................."
On the back of the above Rule is the authority of Lesotho Football Association vs Lesotho Sports Council 1991-92 LLB-LB 26 which is pertinent to the instant proceeding. In that case BROWDE J.A. was confronted with the following situation
"On 26th July 1991, appellant obtained an interdict against respondent on an ex parte urgent basis.
The rule nisi was made returnable on 2nd August, 1991. After appellant had obtained its rule, respondent also obtained a rule ex parte, which had the effect of suspending the operation of the order obtained by appellant.............................................."
The learned Judge unanimously with the other Members of the Appeal Court held,
"that once a rule nisi has been granted, it can either be abandoned by the party in whose favour it was granted, or it may be confirmed 14 or discharged by the Court on the return day;
further that, once it had granted the rule nisi, the court a quo was functus officio and could only deal with the rule on the return day.
further that, the only way the court could have varied or rescinded the rule at the instance of the respondent under rule 45, should have been after appellant had been given due notice".
Confronted with this authoritative statement of the law Miss Qhobela conceded, very properly in my view, that it would be near impossible for this Court to be persuaded to such extent as to subvert its tenor and spirit.
Needless to say I am not persuaded that the application for rescission in the instant proceeding is intended merely for delaying the claim in CIV/APN/149/99.
See Mthembu vs Igbala 1980(2) LLR 510 at 515.
Even if any of the respondents objections could be entertained it is inconceivable that they could prevail against Browde J.A's dictum in LEFA above.
Consequently it is ordered that the rule in CIV/APN/189/99 be confirmed with costs in terms of prayer 1(b), (c) and (d); while that in CIV/APN/184/99 is
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discharged with costs.
JUDGE
21st June,1999
For Applicants : Miss Qhobela
For Respondent: Mr Mohan
