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CIV/APN/39/99 CIV/APN/.../99
IN THE HIGH COURT OF LESOTHO
LESOTHO NATIONAL DEVELOPMENT CORPORATION APPLICANT
AND
GRAYON GARMENT MANUFACTURERS (PTY) LTD RESPONDENT
WING ON GARMENT (PTY) LTD APPLICANT
LESOTHO NATIONAL DEVELOPMENT CORPORATION 1ST RESPONDENTGRAYON GARMENT MANUFACTURERS (PTY) LTD 2ND RESPONDENT
JUDGMENT
Delivered by the Honourable Mrs. Justice K.J. Guni on the 12th day of March 1999.
There are two applications before this court in respect of one subject matter. The first application CIV/APN/39 / 99 is by LESOTHO NATIONAL DEVELOPMENT CORPORATION (LNDC) AGAINST GRAYON GARMENT MANUFACTURERS (PTY) LTD. On or about 9th November 1994 these two parties entered into a Sublease
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Agreement for a period of (30) years. In terms of the said Sublease Agreement LNDC sublet the property-described therein as Plot No.12293-005 THETSANE INDUSTRIAL ESTATE. There is no dispute as regards the existence and/or the validity of the said Sublease Agreement and/or the terms there of. It is also not disputed that GRAYON GARMENT MANUFACTURERS (PTY) LTD paid rentals due but not satisfactorily over a period of time. As a result of not paying rentals properly arrears accumulated to the amount of (Ml,446,797.87) One Million Four Hundred and Forty Six Thousand, Seven Hundred and Ninety Seven Maloti and eighty seven lisente. It is also not in dispute that GRAYON GARMENT MANUFACTURERS (PTY) LTD had a duty to pay those rentals when they became due and payable. The amount being claimed by LNDC is made of arrear rentals. There is no question therefore that that amount of rent is due and payable.
LNDC approached this court in terms of Section 8(4) High Court Rules 1980 by way of ex parte application addressed to the Registrar only. By the time CIV/APN/39/99 was filed with this court, the
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respondent cited therein had already left the jurisdiction area of this court. The fact that GRAYON GARMENT MANUFACTURERS (PTY) LTD had left the Kingdom of Lesotho is mentioned in paragraph 6 of the Founding Affidavit in CIV/APN/39/99, by the Chief Executive of LNDC one SOPHIA MALIKOTSI MOHAPI. This same fact is confirmed in the Founding Affidavit deposit to by one CHARLES BUCHLER who, at paragraph 10 draws to the attention of this court the issue of lack of jurisdiction to deal with GRAYON GARMENT MANUFACTURERS (PTY) LTD because it has removed itself from this country.
In a desperate attempt to recover the arrear rentals LNDC applied for and obtained an interim court order -to attach the assets presently within its premises which are rented out to the respondent - GRAYON GARMENT MANUFACTURERS (PTY) LTD. LNDC acted in that fashion on the ground that as the landlord it has the right of tacit hypothec over the movable property which is still within its rented premises. CHARLES BUCHLER's attempts to take and remove the property out of the rented premises and out of Lesotho were
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thwarted by the issue of that interim court order. The assets subject matter of this dispute is therefore still in Lesotho and therefore even although the company is not in Lesotho this court by virtue of the subject matter being in Lesotho has the jurisdiction to entertain and determine this application.
The second application is by WING ON GARMENT (PTY) LTD in a matter of INTERVENTION against LNDC in that application for attachment of its tenant's movable property left within its rented premises. This second application must have been brought in terms of section 8(5) High Court Rules 1980 which provides as follows:
"Any person having an interest which may be affected by a decision on an application being brought ex parte, may deliver notice of an application by him for leave to oppose, supported by an affidavit setting forth the nature of such interest and the ground upon which he desires to be heard, whereupon the Registrar shall set down such application for hearing at the same time as the ex parte application."
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According to the terms of this provision the intervenor has to satisfy the court on just two requirements. Firstly, he must set forth the nature of his interest. Secondly, the ground upon which he desires to be heard. The intervenor's interest seems to be the control of the assets - the movable property sought to be attached for payment of rent by the landlord. The ground upon which the convenor desires to be heard appears to be the court order vesting in it the control of the said assets.
Although WING ON GARMENT (PTY) LTD had been vested with the control of the assets, the assets remained on the rented premises of LNDC perhaps to be used by the tenant therein for an unspecified period. WING ON GARMENT (PTY) LTD is not the tenant of LNDC. It had no right to occupy nor to keep its property on LNDC's premises. There is nothing on the papers filed of record to show this court why the assets if they are not to be subjected to the landlord's.tacit hypothec were kept within the premises rented to CRAYON GARMENT MANUFACTURERS (PTY) LTD) to be used by the tenant who was then lawfully occupying those premises.
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The main issue perhaps the only issue that must: be determined by this court is which one of the two parties - claiming the right over these assets has a preferential right. The landlord - LNDC bases its claim on the landlord's right of tacit hypothec. WING ON GARMENT (PTY) LTD claims the right to take those assets on the ground that this court on 4th January 1999 made an order vesting the control of those assets in it. It is not argued in anyway by counsel for intervenor that the control over the property equals ownership. The impression I get seems to suggest that even if the control over those assets, does not equal ownership, it is nevertheless a better and higher claim than that based on tacit hypothec. That I totally reject. The third parties movable property left for an indefinite period for the use of the tenant is subject to landlord's hypothec for rent. COLUMBIA FURNISHING CO. v GOLDBLATT 1929 A.D. 27 AT PAGE 31.
The landlord's right of tacit hypothec is one of the oldest class of securities recognised by Roman Dutch Law (Trustee v Ed Meades (1884) 3 sc 25 at 29.
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Landlord's tacit hypothec confers real right over movable property without there being any formality or notice to the public in general. (BRINK'S TRUSTEE v VAN REENEN (1865) 5 Searle 151 at 162) .
The argument by Mr. Mosito for applicant in the matter of Intervention - seems to suggest that once the court order vesting the control of those assets upon WING ON GARMENT (PTY) LTD was made, the landlord's right of tacit hypothec is defeated. The property in question is still upon the rented premises. It has not been removed. The landlord - LNDC in our case came to stop the removal of the said assets from its premises. WIN ON GARMENT (PTY) LTD is a third party whose rights if any have to be determined in the light of the landlord's right of tacit hypothec.
The vesting of control of the assets in the applicant in the matter of intervention, as pointed out by Mr. Poopa counsel for LNDC 1st Respondent therein - did not confer ownership of the assets upon that applicant. In my view the position of WING ON GARMENT (PTY) LTD as regards those assets is less than that of
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a third party who bases his claim on the right of ownership. WING ON GARMENT (PTY) LTD must have been aware when the court vested the control of the assets in it, that those assets will remain or were on the premises rented from LNDC by GRAYON GARMENT MANUFACTURES (PTY) LTD and hence subject to the landlord's tacit hypothec. "The landlord has a tacit hypothec over all movable property brought on to the rented premises by his tenant to secure arrear rent and compensation for damage to the premises." Quite clearly the landlord has a preferential right of tacit hypothec for rent even against the owner of the property which has been left for an indefinite period on the rented premises. The most important two requirements for the purpose of exercising that right of tacit hypothec are:-
The movable property must be within therented premises.
The rent must be owing.
There is no dispute as regards these two requirements. The landlord is therefore entitled and free to exercise its right of tacit hypothec for rent in our
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present case.
There are a few points which were raised in limine by counsel for respondent in the matter of intervention. The first point deals with lack of locus standi in judicio on the part of the applicant in the matter of intervention. The applicant is WING ON GARMENT (PTY) LTD described as a company with limited liability duly established and existing as such in accordance with the laws of Lesotho. There is no business address for this company in Lesotho. There is no head office address either. As appears in the Founding Affidavit by one CHARLES BUCHLER the only address in this country is that of Advocate K.E. Mosito who convinced the deponent, that he is the attorney of record of WING ON GARMENT (PTY) LTD. Does the attorney of record's office act as a substitute for the business address of the company? How and where does the court reach this litigant? Only through his attorney of record as long as he is holding that special power of attorney. I am a little worried that like GRAYON GARMENT MANUFACTURERS (PTY) LTD, WING ON GARMENT (PTY) LTD exist by name only in this country. As appears on
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Mosito) there is nowhere it could be said that this company operates from in this country. Although it is WING ON GARMENT (PTY) LTD which is claiming the assets it is not represented by anyone before this court. There is no one who is claiming to represent this company. Being an artificial person it can only function through some agent of some kind - MALL (CAPE) (PTY) LTD v MERINO CO-OPERASIE BPK 1957 (2) SA 347. It can only take decisions by passing of resolutions in the manner prescribed by its constitution. There is no resolution from the company on whose behalf this application for intervention is being made. The only deponent to the Founding Affidavit - CHARLES BUCHLER in the said affidavit claims to be duly authorised to depose to the affidavit and stops right there. There is no mention of the name of the person who so authorised him. There is no proof of the alleged authorisation.
As appears on the papers filed of record this CHARLES BUCHLER is but a mere witness. According to the averments in his affidavit, he is a director and
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(Merchandising Services (Pty) Ltd - incorporated under the laws of the Republic of South Africa. Its address is in South Africa. There is no connection nor relationship with this Lesotho company on whose behalf he has deposed to the Founding affidavit. It is correct that in terms of the provisions of section 8(5) any person having an interest which may be affected by a decision on an application being brought ex-parte, may deliver notice of an application by him for leave to oppose, supported by an affidavit setting forth the nature of such interest. (My underlining).
"Any person" means just that - anybody. In our present case that any person seems to be WING ON GARMENT (PTY) LTD - the applicant in the matter for intervention in the ex-parte application brought by LNDC. This WING ON GARMENT (PTY) LTD is an artificial person whose functions more especially of the kind like the one which it has taken - a legal action against someone must be performed by a natural person duly authorised by the members of the said company. The proof of such authorisation can be the resolution
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of The Central Bank of Lesotho v E.H. Phoofolo C of
A (CIV) No. 6 of 1987. There is no document in our present case which connects anyone with WING ON GARMENT (PTY) LTD. In fact this company is not represented before this court. There is no one claiming to represent it. On this ground alone the application for leave to intervene must be dismissed. Secondly as I have pointed out earlier on the landlord's right of tacit hypothec over movable property still within its rented premises supersedes that of control to be exercised by the applicant in the matter of intervention. In the circumstances an interim court order obtained by LNDC - applicant in CIV/APN/39/99 is confirmed.
K.J. GUNI JUDGE
12 March 1999
For Applicant : Mr. Poopa For Respondent: Mr. Mosito
