IN THE HIGH COURT OF LESOTHO
In the matter between.-
WAYNE E. BATEMAN Applicant
G. GOVONI IMPORTS & EXPORTS (PTY) LTD 1st Responded
GOVONI IMPORTS & EXPORTS LESOTHO (PTY) 2nd Respondent
STANDARD CHARTERED BANK AFRICA PLC 3rd Respondent
Delivered by the Honourable Mr. Justice J.L. Kheola on the 23rd day of February, 1988.
On the 27th January, 1987 the applicant obtained an interim order couched in the following terms
That Applicant be and is hereby granted leave to sue 1st Respondent by edict by having the summons in CIV/T/36/87 served upon said Respondent through an Office of Attorneys practising in South Africa or through the Office of the Sheriff of the Transvaal Province of South Africa or his lawful deputy.
That the Sheriff or his deputy be and is hereby directed to immediately attach the amount of M10,000-00 in a suspense account with Standard Bank (3rd Respondent herein) under the name of Govoni Importers & Exporters Lesotho (Pty) Ltd (1st Respondent herein) as security for Applicants claim in CIV/T/36/87 as follows -
Payment of damages in the sum of R8,830-91 arising from Respondents breach of Applicants' Contract of service with them, the one paying the other absolved.
1.1. Interest thereon at the rate of 18% per annum calculated from the 30th January 1987 to date of payment.
1.2. Costs of suit.
1.3. Further and/or alternative relief.
That order 2 above operate with immediate effect as an interim order.
That the Respondents should show cause, if any, on the 16th day of February, why order 2 herein should not be made final.
That the period of notice required by the rules of Court for Applications be and is hereby dispensed with.
Costs of this application.
The matter was argued before me on the 16th February, 1987. On that day Mr. Koornhof, counsel for the respondents raised a point in limine. I do not propose to repeat what the point in limine was was because that appears in my judgment delivered on the 23rd February, 1987. The point raised in limine was dismissed but no order was made as to costs.
On the 8th February, 1987 the matter was set down for hearing on the question of costs. When the matter was called Mr. Koornhof submitted that the matter had not been fully argued and that the decision of the Court on the 23rd February, 1987 was on the point or points raised in limine. On the other hand Mr. Addy argued that the matter had been fully argued and that the judgment of the Court dated the 23rd February, 1987 was final and only the question of cots had, be argued.
I agree with Mr. Koornhof that the judgment of the 23rd February, 1987- was on the points raised in limine. The counsel were not given the chance to address the Court on the merits of the application. This was probably due to the fact that the points raised in limine went to the root of the matter so that after hearinq the so called points in limine there was not much left. Be that as it may I allowed both counsel to address me on the merits of the application. Unfortunately, their addresses went far beyond the merits of the application and they addressed me on the merits of the dispute in CIV/T/36/87.
It is trite law that the court will not in applications for security for costs inquire into the merits of the dispute and the bona fides of the parties. In the case of Alexander v. Jokl and others, 1948 (3) S.A. 269 at 281 Williamson, A.J., confirmed the law and said
"The bona fides or the soundness of the claim of the peregrinus is at no time a factor which influences the discretion to be exercised in deciding whether or not an incola should be protected against possible loss in regard to the costs of defending the claim brought against him.. The Court in ordering security for such a purpose does not in any way anticipate the eventual decision on the claim by investigating and weighing up at that stage the probabilities of success or the bona fides of the claim and I do not think that at the present stage I should be influenced by the fact that the probabilities as to the soundness and bona fides or the claim may have been considerably enhanced."
See Arkell a Douglas v. Berold 1922 C.P.D 198, Estate Fawcus v Wo ' 1934 C.P.D. 243 at p. 249, Santam Insurance Co. Ltd v. Korste, 1962 () S.A 53 at p. 56.
I shall therefore ignore what was argued before me on the merits of the dispute and the bona fides of the parties and restrict myself to the relevant points at this stage of the proceedings. One such point is the allegation that the money in question is not an asset of the second respondent. In the answering affidavit of the 1st respondent the amount of M10,000-00 is described as belonging to the 3rd respondent as an amount paid by 1st respondent to 3rd respondent to enable the latter to issue a security bond in favour of the Department of Customs and Excise.
It is alleged that the moneys are encumbered funds in the hands of the 3rd respondent and they can therefore not be attached, frozen or dealt with otherwise by any other person The funds form a first security in favour of the 3rd respondent and therefore cannot form the basis of any further form of security in favour of other parties.
It seems to me that there is nothing wrong with the attachment of the money in question because the money is held by the 3rd respondend as security in case the 2nd respondent may, in transacting his business, contravene some provisions, rules or regulations of the laws of the Kingdom of Lesotho relating to Customs and Excise. It is only in the case of contravention of the Customs and Excise Laws that the 3rd respondent may be called upon to fulfil its obligations under the agreement. There is nothing to suggest that the 2nd respondent has conducted its business contrary to the law, the indications are that 2nd respondent has virtually stopped its operations and its obligations under the bond have become void The funds are now without any encumbrances and are likely to be released to the 2nd respondent.
The money was paid to the 3rd respondent by the 2nd respondent and nut by the 1st respondent as alleged by the 1st respondent in its affidavit. See Annexure "F" to the answering affidavit by 1st respondent.
The 3rd respondent may be a secured creditor but there is nothing in law for an unsecured creditor to attach the encumbered funds especially in a case of a covering bond The funds may become encumbered in the future if the 2nd respondent breaks the law. as I have indicated above the evidence seems to be that up to now the 2nd respondent has conducted its business in full compliance of the law and that its business is closing down. If this Court were to discharge the rule the 2nd respondent would receive its money within a few days if it has in fact ceased to operate. The Court cannot do that because the applicant has furnished security for costs of the action and it would be unfair to release the funds which will make his judgment effective in case he is successful I have declined to inquire into the merits of the dispute and as such I am not in a position to say what prospects are there for success
The rule is confirmed with costs including the costs of the 16th February, 1937 and 23rd February, 1937 when the arguments on the point raised in limine were heard and a decision made in favour of the applicant.
23rd February, 1980
For the Applicant Mr. Addy
For the Respondents Mr. Koornhof.
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