CIV/APN/80/2005
CIV/T/500/2004
IN THE HIGH COURT OF LESOTHO
In the matter between:
THESE CONSTRACTION SERVICE (PTY) LTD APPLICANT
AND
FIRST NATIONAL BANK RESPONDENT
CIV/APN/92/2005
NED BANK (LESOTHO)LTD APPLICANT
THESE CONSTRUCTION SERVICE (PTY) LTD RESPONDENT
JUDGMENT
Delivered by Mr Justice W.C.M. Maqutu on the 9th May 2005
These matters were on the 4th March. 2005 consolidated. Consequently to avoid confusion I will refer each of the parties by name for convenience I will refer to These Construction Service for convenience simply as These Construction (Pty) Ltd through out the judgment.
On the 14lh March 2005 CIV/APN/80/2005 and CIV/APN/92/2005 were consolidated and postponed to 2nd May 2005. Consequently they are today argued before me. Mr Loubsher assisted by Roberts appear for both banks while Mr Matooane appears for These Constriction (Pty)Ltd a former client or judgment debtor of Ned Bank who is currently banking with First National Bank.
These two applications are the consequence of the execution of a final judgment in CIV/T/500/2004 in respect of M356 633.92. This amount is pan of the total amount of M498 243.65 which had bee claimed by Ned Bank from These Construction (Pty) Ltd.
Normally 1 should not have had to book at the file of the trial because the issue is execution of judgment - but Mr Loubsher for Ned Bank insisted that I should look at it. At the root of this was the return of service that showed that on the 23rd February 2005 These Construction (Pty) Ltd was served with an attachment of its money at the First National Bank. Mr Matooane for These Construction (Pty) Ltd had no knowledge of it - he did not hesitate to say it was a fishy document. Mr Matooane also said nowhere had it been referred to by Ned Bank in the papers before. I warned Mr Matooane that if he insists with his line of argument I will go into the matter. How ever should I find he was wasting time and attacking his adversaries unnecessarily, I was going to award costs on an attorney and client scale. Mr Matooane pressed his point regardless - so I have to deal with this point.
A writ of Execution authorizing the Deputy Sheriff to attach the property of These Construction (Pty) Ltd was issued on the 16lh February 2005 by Ned Bank. A return of service dated 18th February 2005 shows that on the 17 lh February 2005 the Deputy Sheriff attached property whose inventory is attached to the return of service. These Construction (Pty) Ltd also gave the Deputy Sheriff a cheque of M50 000.00 in favour of Ned Band drawn on First National Bank.
1 noted that the Order of the Court dated 16'h February 2004 does not correspond with the judgment that had been given by the court on the 7th February 2004. The judge had not awarded Ned Bank half of the costs, nor had he given defendant leave to defend to These Construction (Pty) Ltd.
The order of 7lh February does not even say the judgment that was given was a summary judgment. Since both parties were represented on the face of it, it is a final judgment that was rendered in the following words:
"Judgment granted in favour of plaintiff in the amount of M356 663.92."
Could it be the parties had agreed but did no ensure their agreement was made an order of court? What is clear is that the Registrar should not have signed the order that did not correspond with what the court ordered. This court order that is signed by the Registrar which had been date stamped 16 February 2005 but does not disclose when it was granted. The return of service that reported what the Deputy Sheriff did with First National Bank staled:
"On the 22nd February 2005 we served the writ of Execution and the Court Order upon Richard Hudson Chief Executive of First National Bank Lesotho and attached an amount mentioned in the writ available in the current (Pty) Ltd with First National Bank in Account No 62077845158.
It is further stated that this service of the writ on First National Bank was done in terms of Rule 46 (8) (c) of the Rules of the High Court.
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There is a photo copy of another Return of Service - whose geniuness Mr Matooane for These Construction (Pry) Ltd strenuously disputes. It states:
"On the 23rd February 2005 I served a copy of Our Return of Service indicating attachment of the writ on the current account of defendant at the First National Bank upon'Mphalla Ranthimo being the employee of the defendant at the offices of the defendant. In our presence he phoned Mr These and informed him."
This writ was served on a person above the age of 21 years.
This document Mr Matooane vehemently disputes because he says - had it been there in the court file he would not have brought this application. On the day of the hearing the original of this return of service was not in the court's file - only its photo copy was. It is on the absence of this Return of Service that the application CIV/APN/80/2005. Another document that appears in the main file is the following"
"NOTICE IN TERMS OF RULE 46( 12) OF THE RULES OF THE HIGH COURT
TO: THE CHIEF EXECUTIVE OFFICER
FIRST NATIONAL BANK OF LESOTHO
SHOP NUMBER 4
LNDC BUILDING
KINGSWAY
MASERU
KINDLY TAKE NOTICE that having already attached the amount of M365.633.92 available in the current account of the Defendant with your bank in account number 62077845158 03 on 22 February 2005
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in terms of a Writ of Execution issued by the Registrar of the High Court of Lesotho under the above mentioned case number;
You are in terms of High Court Rule 46 (12) (a) hereby required to pay over to me, the undersigned Deputy sheriff, the amount of M356,633.92 on the basis of the above mentioned attachment of the same amount in account number 62077845158 03 held by your bank in favour of These Construction Services (Pry) Limited.
TAKE FURTHER NOTICE that upon receipt of such amount, I, the Deputy Sheriff, will issue a receipt to you which shall be a discharge of the debt attached.
DATE at MASERU this 25th day of FEBRUARY, 2005.
TMOKHOTHU : DEPUTY SHERIFF"
Rule 46 (12) (a) provides;
"(12) (a) Whenever it is brought to the knowledge of the sheriff that there are debts which are subject to attachment, and are owing or accruing from a third person to the judgment debtor, the sheriff may, if requested thereto by the judgment debtor, attach the same, and thereupon shall serve a notice on such third person, hereinafter called the garnishee, requiring payment to him by the sheriff of so much of the debt as may be sufficient to satisfy the writ, and the sheriff may. upon any such payment, give a receipt to the garnishee which shall be a discharge, pro-tanto, of the debt attached.
It is also the basis of These Construction (Pty) Ltd in CIV/APN/80/2005 that it never authorized the Deputy Sheriff (as judgment debtor) to attach the debt First National Bank owes to it. Consequently the above Notice was not made at its request in terms of Rule 46 (12) (a). When this Notice was served by the Deputy Sheriff, These Construction (Pty) Ltd had already launched CIV/APN/80/2005 asking the court to direct the First National Bank to ''unfreeze" its account. The Ned Bank and the Deputy Sheriff had not been cited although they had an interest.
On the 23rd February 2005 These Construction brought an urgent application in C1V/APN.80/2005 against First National Bank as aforementioned because its bank account with that bank was frozen. The case of These Construction (Pty) Ltd is that its cheque marked "A" drawn on First National Bank was dishounored when it had funds to meet it.
Enquiries of These Construction (Ply) Ltd revealed that the Deputy Sheriff had attached the money in the Bank account of These Construction deposited with First National Bank in Account Number 62077845158. It was shown a Court order and a writ of execution. The court Order that it was shown dated 16th February 2005 is the one I have already referred to. It is annexed and marked "B". The Writ dated 16lh February 2005 marked "C"
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is the one already referred to earlier. At the back date stamp that the cheque was dishounoured on 22nd February 2005.
These Construction (Pty) Ltd complaint was that execution of the writ had already taken place and it was aware of the Writ and the Court Order. The following property had been attached:
No Description/Details No. Of
Items
1 Desk 2
2 Computers 3
3 Deep Freezer 1
4 Tables 2
5 Chairs 3
6 Door Frames 22
7 Motor Cycle 1
8 Geyser 1
9 Corrugated Roof sheeting 1
10 Double Door Frames with Steel Gates 2
11 Wheel Barrows 10
12 IBR Roof Sheeting 5
13 Roof Trusses 3
14 Gutter Pipes 10
15 Toyota Hilux: No E 2772 Colour: White 1
16 Various Building Materials (Used)
As the return of service shows and the letter from T. Matooane and Co shows These Construction (Pty) Ltd marked "D" defendant sent a First National Bank of M50 000.00 as part payment, by cheque. It says it knew about the return of service and the goods attached.
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These Construction (Pty) Ltd was clearly very angry consequently it emphasizes its current cash flow problems and other creditors that have to be paid. First National Bank is accused of arrogance and it is prayed that not only must the Bank Account be unfrozen, First National Bank should be ordered to pay costs on an attorney and client scale. In the company's view there was no legal basis to freeze its account because of the execution of the judgment of Net Bank. During argument it was said there was no lawful attachment of its money deposited with First National Bank, despite what Rule 46 (8) states - about the attachment, which would be incomplete until all interested parties had been served.
Unfortunately for First National Bank it used the services of the attorneys of Ned Bank the judgment creditor in the very writ that is the subject of CIV/APN/80/2005. This was an error of judgment and a breach of its banker and client relationship the First National Bank has with These Construction (Pty) Ltd. Nevertheless the attorneys of Ned Bank, they should have also forseen that they cannot run with the hares and chase with the hounds. Both First National Bank and the Attorneys put themselves in an unconscionable position with a clear conflict of interests. Ethics of court
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officers are this court's business - the Law Society mere prosecutes offenders. All I can say is that do not expect to see this happen again. No one should put himself in a position of serving two masters that are fighting each other.
First Nation Bank opposed the applicant CIV/APN/80/2005. The opposition was simply that it could not ignore the writ of execution attaching the amount equal to the judgment debt. By the same token it was unable to hand over the said amount without a court order. First National Bank made it plain that it had no interest in the matter. The account of These Construction (Pty) Ltd was not frozen. It was put on ''a hard hold" position to enable decision to be taken at a high level after investigation. The cheque was not referred to drawer. In any event the "hard hold" had already been lifted save for the judgment debt. The cheque of M50 000.00 which was a partial payment of the judgment debt was never presented.
First national Bank denied the allegation that it had acted arrogantly and in a high handed manner and in turn asked for dismissal of this application of These Construction (Pty) Ltd with costs on attorney and client scale.
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It is clear that there is a comic side to this application. These Construction (Pry) Ltd seems not to be aware that it is not the only one with a cash flow problem. Ned Bank (Lesotho) Ltd if it is in business must have a cash flow problem as well.
Consequently These Construction (Pty) Ltd was obliged to satisfy the writ in terms of Rule 46 (3) (a) on demand. It could not refuse or neglect to pay, and at its discretion point out such property as could satisfy the writ and then issue a cheque as part payment as it saw fit. Rule 46 (3) shows clearly that the Deputy Sheriff only does what the judgment creditor directs. If he comes with an inventory of the property attached sufficient to satisfy the debt as in this case, plus evidence that the judgment creditor has cash some where and gives it to the attorney of the judgment creditor that is not end of the matter.
The attorney must seek instructions from the judgment creditor who may or may not choose to wait for months until a sale in execution takes place. Indeed the attorney has the mandate to refuse to wait Consequently the judgment creditor can direct the Deputy sheriff to attach the cash in a Bank if he knows the judgment debtor's bank account. These Construction (Pty)
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Ltd wrongly assumed it could dictate to the judgment creditor in respect of the satisfaction of the judgment debt. Even if the judgment creditor had no cash flow problem, he is entitled to have the judgment debt instantly satisfied because he must have his money. The judgment creditor may if he chooses allow the judgment debtor time to pay - if asked. These Construction (Pty) Ltd did not even bother to ask the judgment creditor for time to pay.
Mr Matooane's argument against First National Bank implies that it should have ignored the Writ of execution and the Deputy Sheriffs attachment of the funds of These Construction (Pty) Ltd because it was not complete. How the bank could have known this puzzles me. It is clear that this line of argument is Hawed. A writ of execution is issued at the risk of the judgment creditor see Rule 46 (1) of the High Court Rules which provides:
"46 (1) a party in whose favour any judgment of the court has been given may, at his own risk, sue out of the office of the Registrar one or more writs for execution thereof as near as may be in accordance with Form V (1) of the First Schedule annexed hereto."
I shall therefore deal with the issue of validity of attachment funds of These Construction (Pty) Ltd that had been deposited with First National Bank when I deal with Ned Bank - the judgment creditor.
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It would appear in CIV/APN/80/2005, it is These Construction (Pty) Ltd that acted precipitately. Had its ignorance not be manifest - it could be accused of arrogance and high - handedness by rushing to court. It is clear that it hauled First National Bank before this court wrongfully. Consequently I am obliged to dismiss its application against First National Bank costs.
I feel obliged to do as mark my disapproval of the conduct of attorney and counsel who chose act for parties with conflicting interests in an ongoing dispute. The First National Bank breached the banking principles that govern its customer relationship with These Construction (Pty) Ltd (the judgment debtor) by using the very attorneys for the judgment creditor claiming the judgment debtor's assets in its custody. - That was not an excuse for the attorney and counsel to do the same. They should have remembered what the courts and the public expect of them. 1 have chosen not to show my disapproval by an adverse order as to costs. The reason is simply that These Construction (Pty) Ltd is responsible for this chain of events.
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I had already observed earlier that These Construction (Pty) Ltd had not joined Ned Bank and the Deputy Sheriff. Ned Bank consequently applied for joinder as it had an interest in the matter. Furthermore it had an interest in the finalization of the process of execution of its judgment in CIV/T/500/2004. It was for those reasons it brought CIV/APN/92/2005.
I have already said that Ned Bank was entitled to ensure that it gets its money as quickly as possible - after all it had waited for six months to get its money through a judgment. It had waited another nine days before it issued a writ of execution. If These Construction (Pty) Ltd had wanted to negotiate terms of payment because it had cash flow problems, it should have done so - and not wait for the writ to be issued. The Deputy Sheriff went to the judgment debtor clothed with the following powers in terms of
Rule 46 (3):
demand satisfaction of the writ and failing satisfaction,
demand that so much movable and disposable property be pointed out as he may deem sufficient to satisfy the said writ, and failing such pointing out.
search for such property."
That being the position - Ned Bank was entitled to direct the Deputy Sheriff to go for the money of These construction (Pty) Ltd where ever it could be
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found once, it had learned where it was. It was entitled not to wait for the attached property that would be sold months later.
It seems to me not challengeable - and These Construction (Pty) Ltd cannot be heard to say - that Ned Bank in correctly attached money in its bank account because in terms of
Rule 46 (8)
"If incorporeal property whether movable or immovable is available for attachment, it may be attached without the necessity of a prior application to court in the manner hereinafter provided:-
However, These Construction (Pty) Ltd argues that the attachment was not complete because in terms of Rule 46 (S)
"(c) In the case of the attachment of all other incorporeal property or incorporeal rights in property as aforesaid.
(i) The notice of the attachment shall only be complete when
notice of the attachment has been given in writing by the deputy-sheriff to all interested parties and where the asset consists of incorporeal immovable property, notice shall also have been given to the Registrar of Deeds, and
the deputy-sheriff shall have taken possession of the writing or document evidencing the ownership of such property or right, or shall have certified that he has been unable , despite diligent search, to obtain possession of the writing or document.
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There is a return of service dated 23rd February 2005 which is no annexed to the papers in which the Deputy Sheriff opposed CIV/APN/80/2005 which is in CIV/APN/92/2005. In it the Deputy Sheriff states that he served These Construction (Pty) Ltd with the Notice of attachment of its funds deposited in First National Bank. The Deputy Sheriff does not refer to this Return of Service in his affidavit in CIV/APN/92/2005. Counsel for Ned Bank (Mr Loubsher) found it in the possession of the attorney in the file of CIV/T/500/2005 and handed it in. There was also the photo copy of this Return of Service in the court's file in CIV/T/500/2005 Mr Matooane says he checked that file, but it was not there. Two counsels that are officers of the court gave this evidence from the bar.
It seems to me that I cannot blame either counsel or attorney because it is a notorious fact that court process are often misplaced and misfiled. Even files are often not found on the day of trial.
Be that as it may. I only ask myself how Ned Bank expected to get its money quickly. If the money was with First National Bank, there was no way it could be accessed without the participation of These Construction (Pty) Ltd or by court order. Apart from that Rule 46 (12) (a) specifically states that
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progress towards accessing the attached money must be through the judgment debtor in the following words:
"12 (a) Whenever it is brought to the knowledge of the sheriff that there are debts which are subject to attachment, and are owing.or accruing from a third person to the judgment debtor, the sheriff may, if requested thereto by the judgment debtor, attach the same, and thereupon shall serve a notice on such third person, hereinafter called the garnishee, requiring payment to him by the sheriff of so much of the debt as may be sufficient to satisfy the writ, and the sheriff may, upon any such payment, give a receipt to the garnishee which shall be a discharge, pro-tanto, of the debt attached.
(b) If the garnishee shall refuse or neglect to comply with such notice, the sheriff shall forthwith notify the judgment creditor and the judgment creditor may call upon the garnishee to appear before the court to show cause why he should not pay to the sheriff the debt due. or so much thereof as may be sufficient to satisfy the writ, and if the garnishee does not dispute the debt due, or claimed to be due by him to the party against whom execution is issued, or if he does not appear to answer to such notice, then the court may order execution to issue, and it may issue accordingly, without any previous writ, or process, for the amount due from such garnishee, or so much thereof as may be sufficient to satisfy the writ."
In other words unless the First National Bank is made the garnishee by their client These Construction (Pty) Ltd, Ned Bank cannot have its money. Any other mode of taking action to recover the money would be cutting the corners.
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The dispute about the service of the attachment at First National Bank of incorporeal moveable property of These Construction (Pty) Ltd on it as judgment debtor was made important in these proceedings as part of a challenge to the validity of attachment. I have already said it is not important because, even if the attachment was incomplete First National Bank could not ignore it. because it could not know whether or not Ned Bank would not cause it to be served on These Construction (Pty) Ltd the judgment debtor as an interested party. However, that is not the end of the matter.
The Deputy Sheriff in terms of Rule 46 (8) (c) (ii) had a duty to obtain documents (if the incorporeal property was a lease or the liquid document itself) such a cheque. In other words he had to put himself in a position to have access to the incorporeal property itself so that it could be sold for cash or drawn on the bank if it was a cheque. To put himself in this position the Deputy Sheriff had to make demands on the judgment creditor. Any obstruction that the judgment debtor might attempt would be reported to the court, so that the court could provide a remedy. That of course would be accompanied by an adverse order of costs.
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Unfortunately Ned Bank directed the Deputy Sheriff to demand payment from First National Bank purporting to act in terms of Rule 46 (12) (a). This was an irregular step, because it was the judgment debtor who should have been prevailed upon to direct the bank to release the funds to the Deputy Sheriff for onward transmission to the Ned Bank. What unfortunately happened was to go behind the judgment debtor to the judgment debtor's bank to claim the money that stood to the credit of These Construction (Pty) Ltd. This the First National Bank could not do acquiesce in, or because it had no relationship with the Deputy Sheriff or the Ned Bank.
Now in CIV/APN/92/2005 read along with CIV/APN80/2005, Ned Bank is forced to approach the court in order to access the funds because it is being querried by These Construction (Pty) Ltd and First National Bank. Had These Construction (Ply) Ltd refused to co-operate then Ned Bank would have legitimately brought the application against These Construction (Pty) Ltd and thereby caused it to be mulcted it in costs. The way 1 see it, the procedure in Rule 46 (12) (a) is a procedure that enables a judgment debtor to co-operate with the Deputy Sheriff so as to avoid an adverse court order, should he fail to co-operate.
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It seems to me it is Ned Bank that ought to be mulcted with costs for causing the Deputy sheriff to act irregularly purportedly in terms of Rule 46 (12) (a). However, These Construction (Pty) Ltd is not without fault because it did not join Ned Bank and the Deputy Sheriff in CIV/APN/80/2005 although they were vitally interested. Secondly had These Construction (Pty) Ltd not embarked on a procedure that would delay satisfaction of the judgment debt, these applications that are before court would not have had to be made. I have already said problems of cash flow are universal, consequently they cannot be an excuse to infringe the rights of others. That being the case in CIV/APN/92/2005 there will be no order as to costs. To finalise the matter, I think I should not refer the parties back. The balance of convenience favours an order directing First National Bank to release the attached funds to Ned Bank. Consequently it is so ordered.
CONCLUSION:
The orders that this court has made are the following:
Application against First National Bank is dismissed with costs.
First National Bank is directed to release the attached money that belongs to These Construction Services (Pty) Ltd to Ned Bank.
All the other parties except First National Bank are directed to pay their own costs.
W.C.M MAQUTU
JUDGE
For Applicant: Mr Loubsher
For Respondent: Mr Matooane
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