IN THE HIGH COURT OF LESOTHO
(Commercial Division)
CCT/15/2011
In the matter between:-
GRINAKER-LTA ENGINEERING AND MINING SERVICES LTD 1 APPLICANT
MARC MEIRE 2 APPLICANT
CYRIL KITCHING 3 APPLICANT
ROY MAHABEER 4 APPLICANT
MICHAEL PSOTKA 5 APPLICANT
FRIKKIE LEBENBERG 6 APPLICANT
AVENG (AFRICA)LIMITED 7 APPLICANT
Vs
DDT CIVILS LESOTHO (PTY) LTD RESPONDENT
Date of Hearing : 11 April 2011
Date of Judgment : 11 April 2011
CORAM : MR ACTING JUSTICE J.D. LYONS
Counsel:
Mr.J.P. Daffue SC for Applicants
Mr. Ndebele for Respondent
JUDGMENT
LYONS J. (AGT)
I heard this matter on 11 April. I dismissed the original Notice of Motion. As a consequene all other order made fell away. Herewith are my full reasons. I shall be brief. I have before me the following material
(i) Notice of Motion filed 18 March
(ii) Founding affidavit of Mr. D. Du Toit filed 18 March
(iii) Interim Order of the duty Judge dated 18 March
(iv) Notice of Motion (re:Contempt) filed 30 March
(v) Affidavit of Mr. J. Du Toit
(vi) Notice of Motion filed 8 April
(vii) Affidavit of Mr. C. Kitching.
By ex-parte Motion of 18 March, DDT Civils Lesotho Pty Ltd (DDT) applied as against Grinarker – LTA Engeneering & Mining Services Ltd (Grinarker, for the following relief:-
1. Rule nisi shall be issued on the date and time to be determined by this honourable Court calling upon the Respondents to show caue (if any) why:
(a) Rules as to modes service shall not be dispensed with due to the urgency of the matter;
(b)The Respondent’s assets and properties shall not be attached in order to found jurisdiction;
(c) They be interdicted from removing any of its assets and properties to South Africa.
2. Costs of suit in the Higher Scale.
3. Applicant be granted further and or alternative relief.
4. Prayers 1a, b, and c operate with immediate effect as the Interim Court Order.
Mr. D. Du Toit, in his founding affidavit, deposed as follows:-
1. The Applicant is an Incola Company duly registered and administered in terms of the Laws of Lesotho
2. The Respondent is a peregrinusCompany with its mobile offices at Lepereng next to the Newly Built Hospital in the district of Maseru.
3. The Respondent had contractual relationship with the Applicant wherein the Applicant would provide several services for and on behalf of Respodnent. The said services were provided from the 23rd March 2009 and completed at March 2010.
4. The Respondent breached the material term of the contract and failed to pay for part of the services rendered. To date the Respodnent is indebted to the Applicant in the amount of FOUR HUNDRED AND EIGHTY THREE THOUSAND SEVEN HUNDRED AND FIFTY TWO MALOTI/RAND AND THIRTY TWO LISENTE (M483,752.32).Attached herein is the copy of the payment voucher of the Respondent acknowledging the same debt and it is Marked A.
5. The company has now resolved the institution of summons against the Respodnent upon founding jurisdiction.
6. The Applicant is has properties at Lepereng which include amonth others; 1. Batching Plant, 2 Mobile Grains, Concrete dumpers, Bob Kats, Office equipment, Mobile offices, 8 tone flat bit truck, two 16 sitter toyota taxi, coldish Double cab Toyota ad Black Mistubishi Van and many more others.
7. On the 16th March 2011 I received information from a reliable source that the Respodnent is actually taking and removing its assets and equipments from the country to South Africa. I then personally proceeded to the Respodnent’s offices and found same to be true magnitude of property are already taken out. It is my fear that Respondents want to leave the country without honouring its debts due to the Applicant.
8. On Company is indebted to many Local Companies which supplied it with some services. It would be very difficult for us to honour our own debts and if the Respodnent is allowed to take the property the Applicant will totally have no means to pay the same.
9. I am making this affidavit in support of prayers in the notice of motion
On 18 March the duty Judge granted a rule nisi in terms of the ex-parte motion.
The order should not have been applied for on an ex-parte basis.
The application was premature. Exhibit “A” to Mr. Du Toits’ founding affidavit clearly says that the contractual payment date was 31 March – 13 days hence.
The founding affidavit does not give satisfactory evidence of an anticipated breach of contract. All it gives is evidence that Grinarker was moving to take some equipment out of Lesotho to South Africa. There could be a of reasons for this.
The applicant was trying to set up an allegation that the respodnent was some fly-by-night foreign operator who was intending to welch on its debt and leave town, thus leaving the unfortunable locals empty handed and with no prospects of enforcement. By attaching to the purported assets of Grinarker, DDT effectively had its opponent over a barrel. If it obtained ex-parte attachment, it could dictate the terms. All it had to do was use delaying tactics (and perhaps some undue pressure- like a contempt application perhaps) and turn the screw – All without the respondent being permitted its constitutional right to a fair hearing.
In the short time I have been here I have seen this tactic used by applicants to the point that it appears to be an feature of the legal/judicious “culture.” It is unfair, unethical and unconstitutional. The Court of Appeal have spoken on many occasions against the case and frequency with which ex-parte orders are applied for. Notwithstanding these pronouncements of proper judicial policy by our highest court, the practice continues unaboted. The means justify the ends – even if achieved by means of an unjust, unconstituitional ambush. Like pouring a liveral splash of periperi sauce on a chicken wing, DDT ‘flavoured’ its application by alleging (with hold emphasis) that Grinarker was a foreigner (a peregrinus). There was no proper evidence that a search had been conducted at the Registrar of Companies. There was no application for short and substitued on the local representable, whom DDT knew to be close at hand – that would have meant Grinarker’s version of events would be told before any prejudicial order was made.
The fact is that Grinarker is registered an external company in Lesotho under the provisions of the Companies Act. Its registration number is No.91/39 E. A search of the Registrar’s records would have revealed that, as such it is subject to the provisions of the Act and enforcement of any udly found debt was available. Attachment of purported assets by exparte (and premature) methods was not the only viable alternative.
The duty Judge, however, was not told this. And DDT well knew it. On the letter head of the letter of inlent that forms an inlegral part of the contract between the parties, this information of Grinarker’s legal status in Lesotho appears. This letter (dated 12/8/2009 – exhibit ‘C’ to Mr. Kitching’s affidavit) is addressed to Mr. D. Du Toit. It is inconceivable that Mr. D. Du Toit was not aware of this when he swore his founding affidavit. It is a meree co-incidence that the contract documents between DDT and Grinarker are not exhibited to his founding affidavit?
This was a material non-disclosive. I am constrained from saying it was more than mere co-incidence.
Further, it forms out that much of the equipment attached so unjustly by the ex-parte application was not the property of Grinarker but was hired. This hiring of commercial plant and equipment is a common practice on construciton projects, particularly the larger ones. This was a large profed at the new Lesotho Hospital. Grinarker is one of the major contractors. No mention is made of this in Mr. Du Toit’s founding affidavit. The only referece to the new Lesotho Hospital is a geographical one.
It stretches credulity that Mr. D. Du Toit was not aware of the common commercial practice of hiring plant and equipment by contractor’s on major construction projects. Both DDT’s advocate and instructing attorney (A.T. Monyako & Co.) appear regularly in the Commercial division. The Court is entitled to presume both have some awareness of common commercial practices. Nowhere in the material is the duty judge appraised of even the possiblity that this common commercial practice existed (on this large project) and that the plant and equipment sought to be attached may not in fact be the property of Grinarker. Furthermore, if that were to be the case it turnover to be after the respondent is given its constitutional right to a fir hearing), that Grinarker would be liable for hefty hiring costs were an attachment order to be granted – at all, let alone ex-parte.
In my judgemnt this is a perfactly good illustration of an application that should NOT have been made ex-parte. It was obviously short of evidence and equally equally obviously of full and frank disclosure.
I have no hesitation in dissolving the rule nisi order of the 18th March 2011.
The contempt application has been filed. I do not think it has been dealt with by the court. At least no record is on file to that effect, it stands to reason, though, that if it has been granted, it must be dissolved. It has no foundation now the ex-parte attachment order has been dissoved. If it has not been granted, it is dismissed.
Grinarker is entitled to its costs to be taxed if not agreed.
In closing, it is probably a waste of breath adding my voice to that of the Court of Appeal. I suppose anything I were to say (and I have said it elsewhere) will be disregarded with similar disrespect. If this cavalier approach to ex-parte applications is not put a stop to it will be difficult, if not impossible, to establish a credible Commercial Court and meet the objective of encouraging investment (both foreign and local) in commercial activity in the Kingdom of Lesotho. Sir Francis Bacon noted over four centuries ago that the practice of law was a privilege, not a right. With that privilege comes responsibility. The right to be heard is not only a fudamental right entrenched in the Constitution (article 12), it is a fundemental right of our Christian traditions. (John:7:51). At this annual time reflection upon our traditions, it is timely that this be remembered. Infringment upon the right to be heard (and this is what an ex-parte application seeks to achieve) must be approached with great caution and sense of responsibility.
Not only is a careless, cavalier approach subvensive of the rule of law, it is subversive of our spiritual way of life.
J.D. LYONS
JUDGE (AGT)
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