IN THE HIGH COURT OF LESOTHO In the
Application of :
LESOTHO AGRICULTURAL DEVELOPMENT BANK LTD. Applicant
vsALBERT J.M. TLALI Respondent
REASONS FOR JUDGMENT
Filed by the Hon. Acting Judge Mr, Justice J.M. Kheola
on the 5th October. 1983.
This is an application for the compulsory sequestration
of the estate of the respondent. The applicant seeks an order in the
1. That the estate of Albert J.M. Tlali be and
is hereby placed under provisional sequestration in the
hands of the Master of the High Court of Lesotho, Maseru.
That a rule nisi do issue calling upon the saidAlbert
J.M. Tlali and all other interested persons,t6 show cause, if
any, to this Honourable Court onMonday the day of
1983 at 9.30 a.m.in the forenoon or as soon thereafter as
counselmay be heard, why a final order of sequestrationof
the respondent's estate should not be granted.
Further and for alternative relief.
This application is supported by an affidavit sworn to
by one Gabriel Mashape who is the managing Director of the
applicant duly authorised to represent the applicant.
He states that on the 2nd March, 1981 the applicant entered into a
loan agreement with the respondent and advanced to him the
sum of R20,578.50. The respondent breached the terms of the
on various occasions. The applicant sued the respondent
under case number CIV/T/91/1982 for payment of the balance
terms of the loan agreement. The respondent consented
to judgment in the amount of R18,864.60, costs of suit and interest
rate of 6% per annum a tempore morae as from the date
of issue of the summons to the date of payment. A consent order was
granted by this Court
on the 31st May, 1982.
On the 2nd June, 1982 a writ of execution was issued. On
the 16th November, 1982 the deputy sheriff filed a return of service
he stated that respondent "has no attachable property."
Since the date of the judgment in CIV/T/91/82
respondent attempted to repay the loan by way of monthly instalments
of R1000 per month. The three cheques which the
payable to applicant's attorney, Mr. Harley were dishonoured and
returned marked "refer to drawer," There
creditors to whom the respondent is indebted in the sum totalling
On the 13th June, 1983 Mofokeng, J. granted the
application as prayed and a rule nisi was issued for an order in the
1. That the estate of the defendant/respondent
Mr. A.J.M. Tlali being is hereby provisionally
sequestrated in the hands of the Master of the High
2. That the respondent, or any other person, be andis
hereby called upon to show cause, if any, onMonday the 11th day
of July, 1983 at 9.30 a.m.
in the forenoon or as soon thereafter as the matter may
be heard why his estate should not be finally sequestrated.
That a copy of this 0rder is to be advertised
beforethe return date, once in the Government Gazette,and
once in the Lesotho Weekly.
That Mr. Frederick Pretoius be and is herebyappointed
as the Provisional Trustee.
The respondent has filed an opposing affidavit in which
he admits that he is indebted to the applicant in the sum of
interest. He contends that the repayment of the loan
must be made within the prescribed period of five years. He seems to
the impression that applicant is not entitled to demand
repayment of the full amount before the expiry of the prescribed
five years. I do not agree with the respondent because
clause 10 of the Loan Agreement reads as follows .
"It is further agreed that in the event of the
breach by the borrower of any prevision of this agreement the full
the loan and interest then outstanding shall thereupon be
payable, and the bank shall thereupon be entitled to enforce the
held in respect of the loan. The borrower shall not be
deemed to be in default until after the lapse of twenty-one (21) days
has been given to him in writing notifying him of the default
in payment of instalments in which event the Bank shall be legally
entitled to claim the repayment of the whole balance of the unpaid
capital and interest."
The respondent admits that he was in arrears as far as
the payment of instalments is concerned but he says that this was due
beyond his control. One of the so called
circumstances beyond his control is that the local Health Inspector
ordered him to stop
carrying on with poultry farming at his
(respondent's) residential site because the smell from the poultry
shed was apparently a
health hazard to the other residents. This is
something that the respondent ought to have forseen. He further says
that after all
these events there was an outbreak of poultry disease
and his hens could not lay enough eggs to enable him to pay the
I do not think this is true because on the 11th
May, 1981 his poultry business was in such a good condition that
officials of the
Bank went to Mafeteng and took photographs to be
published "in the Bank's annual report. (See Annexure I to the
On the 14th April, 1982 the business was still
thriving because the respondent still had 1,500 laying hens. (See
to the opposing affidavit). It is, therefore,
not true that in March, 1982 when civil proceedings were instituted
against the respondent
in CIV/T/91/82 he had only a few hens.
Section 12 of the Insolvency Proclamation No. 51 of 1957
reads as follows :-
12 (1) If at the hearing pursuant to the aforesaid
rule nisi the Court is satisfied that -
the petitioning creditor has establishedagainst the
debtor a claim such as ismentioned in sub-section (1) of
the debtor has committed an act of insolvencyor is
(c) there is reason to believe that it will be to the
advantage of creditors of the debtor if his estate is sequestrated,
sequestrate the estate of the debtor.
The petitioning creditor in this application has proved
that the respondent owes it the sum of R18,864.60 plus interest and
of suit. This sum is far in excess of the minimum of R100.00
prescribed by section 9(1) of the Insolvency Proclamation.
The petitioning creditor has proved that the respondent
has committed an act of insolvency by producing not only a return ofnulla bona in CIV/T/91/82, but by also annexing three
dishonoured cheques for the sum of R4910.22. These cheques were
drawn by the respondent
in favour of the applicant in an attempt to
repay the debt in respect of which the applicant had obtained a
judgment in CIV/T/91/82.
I am of the opinion that it will be to the advantage of
the respondent's creditors if his estate is sequestrated because the
will have possession and control of all assets found to
belong to the respondent and will be able to realise them for the
of all the creditors. In Wilkins v Pieterse 1937
C.P.D. 165 at page 168 Davis, J. is quoted as having said :
"No doubt experience shows that in the great
majority of cases, when a debtor has committed an act of insolvency,
it is to the
advantage of creditors that his estate be sequestrated.
Consequently the mere fact of such an act clearly affords "reason
believe" that it will be to their advantage, and if the
matter rests there, the Court will sequestrate."
In the present application I have every reason to
believe that it will be to the advantage of the respondent's
creditors to sequestrate his estate. In his opposing
affidavit the respondent says that he intends to divert the remaining
to "a massive irrigation scheme" and it is not clear
to me what that means. If he means that this Court should allow
to go into another venture while his present creditors are suffering
that cannot be allowed. Allowing the respondent to take
such a risk
would be prejudicial against the interests of his present creditors.
I also take the view that the respondent does not
appear to be an
honest man; he says that he did not read the loan contract well and
that Clause 10 was not clear to him but he signed
because he did not want to enter into an unnecessary argument with
the officials of the applicant, I disagree. He is
bound by the terms
of the loan contract as they appear in the contract.
The respondent signed a consent to judgment in terms of
Rule 27 (1) of the High Court Rules; he is now trying to say he did
pressure from applicant's attorneys. I disagree. He knew
that he was indebted to the applicant and had no valid defence
their claim. In any case, he has never applied for
rescission of the consent Judgment granted on the 31st May, 1982 in
which is the basis for the present application.
The respondent drew three cheques in favour of the
applicant in an attempt to repay the loan. The cheques were all
All these things are indicative of the fact that the
respondent has not been very honest in his dealings with the
made no attempt to make sure that the cheques were met
For the reasons I have stated above, on the 22nd
September, 1983 the rule nisi was confirmed with costs.
ACTING JUDGE. 5th October, 1983.
For the Applicant - Mr. Harley For the Respondent -
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