CIV/APN/361/08

IN
THE HIGH COURT OF LESOTHO

In
the matter between:-

MANKHASI
MAHAO APPLICANT

Vs

LESOTHO
ELECTRICITY CORPORATION 1^ST
RESPONDENT

MAREITUMETSE
POSHOLI /ZULU 2^ND
RESPONDENT

MASTER
OF THE HIGH COURT 3^RD
RESPONDENT

ATTORNEY
GENERAL 4^TH
RESPONDENT

LABOUR
COMMISSIONER 5^TH
RESPONDENT

JUDGMENT

Delivered
by the Honourable Madam Justice N. Majara

on
the 10^th
March 2009

The facts of this
application are by-and-large common cause. Applicant and the late
Moima
Posholi
are siblings. During his lifetime, the late Moima
Posholi
and the 2^nd
respondent were cohabiting. The 2^nd
respondent had previously been married to one Zulu
who filed the supporting affidavit to the application. At some
point, the 2^nd
respondent sought and was granted a decree of divorce against him.

The late Moima
worked
for the 1^st
respondent during his lifetime and he appointed 2^nd
respondent and her minor child Reitumetse
as
beneficiaries to the LEC Provident Fund in terms of a form styled
Beneficiary
Nomination Form
hereunto attached and marked LEC
“1”.
Post Moima’s
death and burial, applicant was appointed by the Posholi
family as the heiress to his estate as he had died a bachelor.

Applicant then
approached 1^st
respondent and requested that they pay out Moima’s
terminal benefits and monies accruing from the Provident Fund to her
as the lawful heiress. Applicant was given the amount of
M10, 000.00
and M5, 000. 00 respectively out of
Moima’s
terminal benefits but not out of the Provident Fund. She later
demanded that 1^st
respondent should pay out to her the amount of M11,
427. 28
inter
alia,
from the said Provident Fund and she was informed that the said
monies had already been paid out to the 3^rd
respondent on behalf of the child, Reitumetse
Posholi.

It is then that
applicant took steps to approach this Court for relief in the
following terms:-

1. 
   Dispensing with
   the normal rules and periods relating to the mode of service on the
   grounds of urgency hereof;

   
   

2. 
   That a rule nisi
   issue calling upon the respondents to show cause, if any, on a date
   to be determined by the Honourable Court
   why;

   
   
   
   

   1. 
      The 1^st
      respondent shall no be restrained and interdicted from paying to
      2^nd
      Respondent monies out of the estate of the late Moima
      Posholi
      or cause 3^rd
      Respondent to receive certain monies at the instance of Reitumetsi
      Mohapi (Posholi).

      
      

   2. 
      The 1^st
      Respondent shall not be directed and ordered to pay all the monies
      due and payable to the Applicant in pursuance of her capacity
      as
      the lawful heiress to the estate of Moima
      Posholi
      forthwith.

      
      

   3. 
      The 2^nd
      Respondent should not be interdicted from herself out as the wife
      and heiress to the estate of the late Moima
      Baptista Posholi.

      
      
   
   

She obtained a
rule nisi in that regard. In support of its opposition to the
application, 1^st
respondent filed an answering affidavit deposed to by one M.
F. Hloaele
and he averred as follows at paragraph 3 in parts:-

“The
Lesotho
Electricity Corporation
does not have any interest in the dispute between Applicant and the
Second Respondent. The LEC
was the employer of the deceased herein and has dealt with the
terminal benefits in terms of law and in terms of the deceased’s

instructions as contained in the Beneficiary Nomination Form hereto
annexed and marked LEC
“1”. The
last payment was made to the beneficiary in terms of the said form on
the 15^th
August 2008 while the other terminal benefits have also been paid
and/or transferred to the Master of the High Court in terms of
the
law….”

Whereas in her
answering affidavit 2^nd
respondent raised points of law in
limine
to wit, urgency and ex
parte
procedure, violation of High Court Rule 8 (19), Non-disclosure of
material facts, interdict.

Urgency and ex
parte procedure

It is 2^nd
respondent’s case that the late Moima
died in June 2007 and that applicant failed to provide any
explanation why she delayed in the prosecution of the application yet

she had planned to launch same as far back as August 2007. Further
that applicant failed to state why she proceeded with the proceedings

without notice yet she was seeking a potentially prejudicial order
against the 2^nd
respondent.

Violation of
Rule 8 (19)

It was the 2^nd
respondent’s submission that applicant failed to comply with
provisions of the above rule yet she joined the Master of the
High
Court as one of the respondents in this application i.e. she failed
to serve the application upon the 3^rd
respondent as it is required by the provision.

Interdict

Under this point,
it was 2^nd
respondent’s contention that the applicant had not established
a clear right with respect to the monies she claims, yet she
is
seeking an interdict against respondents.

Material
non-disclosure

In his written and
verbal submissions, Mr.
Mothibeli
counsel for 2^nd
respondent stated that without subordinating the importance of the
other point in
limine,
their point of emphasis was with respect to the issue of material
non-disclosure in that in obtaining the interim Court order without

notice to the other parties, applicant failed to disclose the fact
that 2^nd
respondent and Tseliso
Zulu
were since divorced. To this end he referred the Court to the case
of Trakman
NO. vs Livshitz and Others 1995 (1) SA at 288.

On the merits, it
was Mr.
Mothibeli’s
submission that 2^nd
respondent was not disputing the appointment of applicant as the heir
to the late Moima’s
estate
but rather that 2^nd
respondent was entitled to the monies under the provident fund
because she was appointed as the beneficiary by the deceased and
that
this is the case in terms of the principle of stipulatio
alteri.
In this regard he referred the Court to the work of Davies
D. M. Gordon and Getz; The South African Law of Insurance 4^th
Edition Juta & Co. Ltd p329
as well as the case of Ex
Parte Calderwood No. In re Estate Wixley 1981 (3) SA 727.

Mr. Mothibeli
made
the submission that case law is unanimous that money from a policy
wherein the insured has duly designated a beneficiary does
not form
part of the deceased estate. Counsel for 2^nd
respondent also referred the Court to the case of Ramahata
v Ramahata LAC (1985-89) 184
wherein the Court of Appeal held that the stipulatio
alteri
principle also forms part of the law of Lesotho.

Mr. Phafane
who appeared for 1^st
respondent aligned himself with Mr.
Mothibeli’s
submissions and added that insofar as the prayers sought against them
go, the application was meaningless for the reason that it
had long
been overtaken by events in that the funds in dispute had long been
transferred and that applicant should not have sought
the said
prayers as they were not tenable. He added that applicant should
have abandoned the application as soon as she received
their
answering papers instead of asserting in her replying affidavit that
1^st
respondents transferred the funds ‘deliberately’.

In reaction to
these submissions Mr.
Lephuthing
counsel for applicant made the contention that they had to approach
the Court on an urgent basis and without notice because applicant’s

rights as the appointed heiress to the estate of the late Moima
were
being violated. He however conceded that they indeed violated the
provisions of Rule 8 (19).

On material
non-disclosure, counsel for applicant made the submission that
applicant cannot be found guilty of same because she
had no knowledge
of the divorce order.

On the principle
of stipulatio
alteri,
Counsel for applicant made the contention that the contract that the
deceased entered into with 1^st
respondent of which he made the 2^nd
respondent his beneficiary is invalid and cannot be legally binding.

He added that the
third party in LEC
“1”
is 2^nd
respondent in her capacity as wife and her son Reitumetse
Posholi
as the son. It was his further contention that since 2^nd
respondent admits on affidavit that the deceased died a bachelor but
confirms that she however received a cheque amounting to
M38, 201.50
under the names of Tiisetso
Mohapi
she must expressly state the source of the alleged right to the
money.

Mr. Lephuthing
made the submission that since 2^nd
respondent has never been the wife of the deceased and Reitumetse
never his son, the allocation of the deceased’s Provident Fund
monies to the two is unlawful and that 1^st
respondent proceeded with payment of the said money to them with full
knowledge of the wrongfulness of the process. In this regard
he
quoted the case of Sea
Lake (Pty) Ltd v Chung Hwa Enterprise Co. (Pty) Ltd & Another
1999-2000 LLR & LB 395.

I now proceed to
deal with the points of law seriatim.

Application on
an urgent basis and without notice to the other party(s)

It is trite that a
party that approaches the Court on an urgent basis and without giving
notice to other parties who might be affected
by the order sought has
the duty to set forth in detail the circumstances which he avers
render the application urgent and also
the reasons why he claims that
he could not be afforded substantial relief in an hearing in due
course. This is a mandatory requirement
of High
Court Rule 8 (22) (b)
and a plethora of authorities.

For instance, in
the case of The
Commander LDF & Another v Tseliso Matela 1999-2000 LLR/LB 13 at
16, Steyn P (as he then was)
stated that:-

“As a
general rule, basic considerations of fairness and the need to
prevent the administration of justice being brought into disrepute

require appropriate notice to be given. Orders should only be
granted without notice where this is rigorously justified….

It is also not
enough that counsel merely certifies urgency. Certificates of
urgency must shortly state the grounds
for urgency. Again failure to do so may well lend to a dismissal of
applications and special costs orders in appropriate circumstances.”

In this case, the
applicant stated her reasons of urgency in her founding affidavit at
paragraph 11 in the following words:-

“The
matter is urgent for the following reasons: First, if the terminal
benefits alluded to above are paid over to Mareitumetse and

Reitumetse, they will be unduly enriched at my expense as there is no
other remedy or way available to me except to proceed in
the manner I
have chosen. Second, if the monies are released to Mareitumetse, it
will be totally impossible to recover damages
against her given that
she might be convicted and I discovered that she had deserted her
matrimonial home and is a fraudster of
straw.”

The averments are
denied by both the 1^st
and 2^nd
respondent respectively. In the answering affidavit deposed to by
Hloaele
on behalf of 1^st
respondent, he points out that the orders sought by 1^st
respondent have been overtaken by events in that 1^st
respondent had already paid out the money to 2^nd
respondent in terms of the Beneficiary Nomination Form per the
instructions of the deceased who was under the employ of 1^st
respondent.

2nd respondent in
turn asserts in her answering affidavit that even if she were to ‘be
unduly enriched, then applicant is free to issue summons in recovery
of the enrichment unjustly so gathered.’
She also denies that she is a fraudster that is about to be
convicted.

Applicant
acknowledges that the terminal benefits under the Nomination Form
have already been paid out but goes on to add that this
1^st
respondent did on purpose. Mr.
Lephuthing
also made the verbal submission that applicant was justified in
adopting this route because her rights were being violated. This

begs the question; does that factor alone warrant that a matter
should be treated as urgent without adherence to the periods and

modes of service prescribed by the Rules of Court?

Needless to say,
the answer is in the negative for a number of reasons, including but
not limited to the fact that litigation is
usually resorted due to
the very fact that others’ rights are trampled upon. This does
not mean that other interested parties
should not be given adequate
notice and time to state their case in response to such allegations.

Further,
as
Mr.
Phafane
correctly pointed out, at the time she launched this application or
at least upon being served with the answering affidavits, applicant

was well aware of the fact that the funds, the subject matter herein
had already been transferred by 1^st
respondent to 2^nd
respondent. She confirms this in her reply.

Given the above
scenario, I am of the view that applicant did fail to satisfy the
requirements of Rule 8 as already mentioned above
and therefore had
no right to approach this Court on an urgent basis and without notice
to the other parties. This is because,
even if the money had not yet
been transferred, she still had other remedies available to her.
Secondly, it is clear that she
was or became aware of the transfer at
the pleading stage, yet she persisted with this application this
factor notwithstanding.

Interdict

It is my opinion
that the point discussed immediately is also linked to the prayer for
an interdict without notice to the other
parties. As Mr.
Mothibeli
correctly submitted, applicant has failed to satisfy the requirements
of same. Firstly, she did not establish that she has a clear
right
to the funds especially in the light of the contents of the
Beneficiary
Nomination Form in
which (and this applicant does not deny) 2^nd
respondent was appointed as beneficiary by the late Moima.
Rather, she is challenging the validity of the document for the
reason that 2^nd
respondent is described as the wife.

Further, she
failed to show that there was no other legal remedy available for her
to obtain adequate redress. Authority in this
regard is legion. See,
The
Commander LDF (Supra) p 18 as
well as the case of Erasmus
v Afrikander Proprietary Mines Ltd 1976 (1) SA 950 which
was cited with approval by the Court of Appeal in the former.
Thirdly, I accept the submission that the prayers sought by
applicant
are not tenable because in her reply, she is not disputing that the
funds in question have since been transferred which
means this Court
is not in a position to can restrain and/or interdict 1^st
respondent from transferring them to the 2^nd
respondent.

Material
Non-disclosure

The issue of
material on-disclosure is dealt with excellently by Le Roux J in the
case of Schlesinger
v Schlesinger 1979 (4) SA 342 wherein
the learned judge also formulated three broad principles, to wit;

“(1)
in ex parte applications, all material facts must be disclosed which
might influence a Court in coming to a decision;

(2)
the non-disclosure or suppression of facts need not be willful or
mala fide to incur the penalty of rescission; and

(3)
the Court, apprised of the true facts, has a discretion to set aside
the former order or to preserve it.”

In the present
application, Mr.
Mothibeli
made the contention that applicant failed to disclose to this Court
that 2^nd
respondent and Zulu
who filed the supporting affidavit to the notice of Motion were
granted divorce by this Court and submitted that if the Court had

been aware of this fact, it would not have granted the rule nisi.
Although Mr.
Lephuthing
argued that applicant was not aware of this fact, I am of the view
that she did but decided with the support of Zulu
to suppress the true facts and only tell the Court about the marriage
between the two. She is indeed guilty of material non-disclosure.
I
therefore accept Mr.
Mothibeli’s submission
as correct and find that this point was well taken by 2^nd
respondent.

Lastly, I now turn
to deal with the main bone of contention which is that of the
principle of stipulatio
alteri
i.e. contract for the benefit of a third party. This principle has
been discussed in several authorities including those quoted
to this
Court. The position of the law as stated therein is that a contract
for the benefit of a third party does not form part
of the deceased
estate. This means that the insured can enter into such a contract
with the insurer for the benefit of another
person who is not a party
to the contract. However, such third party does not acquire rights
to the contract unless and until
he/she has accepted the benefit.
See Gordon
and Getz; The South African Law of Insurance 4^th
Edition p278.

The case of
Jankelow
v Binder, Gering and Co. 1927 T.P.D 364
quoted to this Court by Mr.
Lephuthing
does not detract from this general principle so it does not take
applicant’s place anywhere. Instead, the Court therein
found
that on the terms of the agreement in issue, it was never intended to
be a contract between the assignor and the assignee
for the benefit
of the individual creditor upon which the latter could sue.
Greenberg J went on to state:-

“Now I
think Mr. Schreiner is right when says the test whether the contract
is made for the benefit of a third party is whether that
third party,
by adopting the contract, can become a party to it—the position
being that if a contract is made by A and B,
with a stipulation in it
for the benefit of C, then C by adoption can enter into that
contract. If one applies that test, it appears
to me the present
contract cannot be so described.”

In my opinion, the
Judge was simply stating that insofar as the facts of that case went,
a distinction could be drawn between them
and a contract for the
benefit of a third party. He found that the respondent had no rights
under the contract against the appellant.

Per the contention
of Mr.
Lephuthing,
2^nd
respondent herein could not accept the contract because she was not
married to the late Moima
yet she was described as the wife under the Beneficiary Nomination
Form. It is my opinion that his argument is flawed because
nowhere
does the stipulatio
alteri
requires that the third party should hold any form of status be that
of a spouse or other so that in terms of this principle, status
of
the third party is immaterial as long as he/she accepts the benefit
that was intended for him/her.

This further finds
support in the case of Ramahata
(also known as Phephetho) v Ramahata LAC (1985-1989) p184.
In overturning the decision of the Court a quo which had decided the
matter on the footing that the real issue was whether there
was a
marriage Schutz
P
(as he then was) had this to say:-

“The
judge rejected the appellant’s contention that she was entitled
to the M6,000. 00 not by virtue of her marriage, by virtue
of her
nomination as death beneficiary. The learned Judge opined that any
claim would be governed by the South African Insurance
Act 27 of
1943, that there was no similar statute in Lesotho, and that death
benefits would pass to the son’s deceased (sic)
estate. I do not agree with this reasoning at all. In passing I
would point out that foreign law cannot be disregarded where
it is
the proper law in a case. If it such it will ordinarily be given
effect to.

This case is a
simple one. The appellant has established a stipulatio
alteri
(contract for the benefit of a third party) between the son and the
insurance company; See e g Croce
v Croce 1940 TPD 251.
The institution of stipulatio
alteri;
by virtue of being part of the Roman Dutch Law, also forms part of
the law of Lesotho. The
contract is to the effect that she is entitled to accept the benefit
of this contract, and the evidence is that she has in fact
done so.
Her rights therefore flow from the contract and the M6,000. 00 has
nothing to do with the deceased estate.”
(My underline)

On the strength of
the quoted authorities, the principle is that the issue of the
marital status and/or relationship between the
beneficiary and the
insured is immaterial. Further, the benefits that flow from such
contract/agreement do not form part of the
deceases’ estate.
Applying this in
casu,
what is important is that 2^nd
respondent was made the beneficiary, was entitled to and did accept
the benefit of the provident fund. The conditions of the principle

were thus satisfied.

It is on the basis
of the above reasons, that I find that applicant has failed to make
out her case for the relief sought and I
therefore dismiss the
application and discharge the rule nisi.

COSTS

Both Counsel for
respondents prayed that the Court should make a punitive order of
costs against the other side and that applicant’s
counsel
should be ordered to pay costs de
bonis propriis.
They submitted that he abused the Court’s process in that he
persisted with the application in spite of the fact that he
was aware
that it had since been overtaken by events.

Over and above
that, he approached the Court on an urgent basis and without notice
to the other parties and also flaunted the other
requirements for
applications of this nature as already discussed above.

I agree that
applicant’s counsel is indeed guilty of abuse of court process
in the manner already stated and it is on the
strength of the
decision of the Court of Appeal in the case of Mapuseletso
Mahlakeng and 55 Others v Southern Sky (PTY) LTD and 7 Others C of A
(CIV) No.16 of 2003 (unreported) p 28 and
the remarks in that of Matela
(Supra) as
well as other authorities that
the
applicant’s counsel is ordered to pay costs de
bonis propriis.

N.
MAJARA

JUDGE

For
applicant : Mr. Lephuthing

For
respondents : Mr. S. Phafane (K.C.)

: Mr.
Mothibeli