IN THE HIGH COURT OF LESOTHO
HELD AT MASERU CIV/PET/01/2010
In the matter between:
TSOAKINYE PETER MOSEBO Petitioner
ANGEL DIAMOND Respondent
Delivered by the Hon Mr Justice T. E. Monapathi
On the 25th Day of March 2011
1. I made a ruling in the matter on the 17th November 2010. The reasons for my decision now follow.
2. In terms of Rule 48 (1) of the High Court Rules 1980, the Registrar is required to fix an amount of security in such cases where the other party is an incola (as was the Respondent). It appears easier to refer the parties herein by the names. In this application the First Applicant (Mosebo) felt that such security having been fixed as in the amount of M25,000.00 (by payment “in cash” into court). According to the Applicants on the 2nd August 2010, Respondents had defaulted and/or alternatively had not given “good and affective security.” Applicants were not satisfied with the quality of such security as will be revealed. Hence this application which was filed for the following, that is to:
a) Dismiss the above Respondent’s counter application;
b) Strike out the above Respondent’s defence;
c) Confirm the rule nisi of the 2010;
d) Make an order as prayer in the ordinary relief as per notice of motion;
e) Order above Respondents to pay costs.
3. It is perhaps useful to give a brief history of the events as after the Registrar had fixed the security as aforesaid. This will perhaps answer some of the questions about various delays which the parties accused each other of. Suffice it to say that it was common cause that when the above application was filed the Respondent had in fact defaulted. This has not attracted a prayer for condonation. But as to the filing of process and affidavits the parties agreed that no objection would be presented about undue delays.
4. The same Respondent (Thabex) contended that it has given security for Mosebo’s costs. This is disputed not only on the ground that such was not given at the time of filing of application but on a number of grounds raised and argued by Mr Edling for Mosebo. As regard those grounds Mr Letsika would/did substantially argued amongst others that the Registrar herself had been satisfied with the bank guarantee issue foe/by Thabex and where the Registrar had not been taken on by way of review, the Applicant (having not sought for review) did not have any remedy before this court. This application was accordingly misconceived.
5. It is common cause that eventually an application was filed by Mosebo to dismiss application. Having been at down it was postponed. Weltagen had later launched an application to compel Engelbrect to give security to for costs in his papers.
6. It is contended that Thabex has after the 20th August 2010 given security for Mosebo’s costs and a copy of a payment guarantee in that respect had been issued by the First National Bank. It is that payment guarantee which Mr Fraser, Mosebo’s attorney was initially of opinion that it was good and in order and had accordingly agreed to a postponement. The said attorney had since consulted his correspondents and eventually discovered, having consulted, that this alleged security relied on by Thabex was not good and sufficient. This precipitated Mosebo (on advice) to make a replying affidavit and had the application enrolled to dismiss Respondent’s pleadings and ask for a final judgement on the understanding that the Respondents have failed to comply with the Registrar’s decision to file security in cash.
7. Engelbrect and Mosebo now argue against Weltagen’s position that they are not bound by the initial view expressed by Mr Fraser, their attorney who had accepted that “payment guarantee” issued by the First National Bank was good and sufficient security for the reasons that will be shown hereunder.
8. The initial view expressed by the attorney who had accepted that that payment guarantee “issued by the First National Bank was good and sufficient security” for the reasons that will be shown hereunder.
9. Mosebo and Weltagen will further argue that once (if) the Registrar had fixed security as a foresaid but such security was found not to be good it was not necessary to revert to the Registrar, await her decision and only come up or being dissatisfied with her decision to come by way of review of that decision. The reason is that the Registrar has already made her decision and a lot of prejudice would, result in that kind of double jeopardy or attempt to exhaust local remedies while already being functus officio. I agreed with respect. Indeed what more would the Registrar add then to say she has fixed the amount of security and she expected her decision to be obeyed.
10. I formed that impression that Mr Edling was prepared to argue that albeit that the security may have not been given with a reasonable time, the Respondents had not complied with their obligation to give security for Mosebo’s costs the guarantee that would remain whether Mosebo was bound by the view expressed by Mr Fraser, his attorney who accepted the payment guarantee issued by First National Bank as being good and sufficient security. In other words was the security effective for the purpose of granting Mosebo’s costs and not a farce or an empty rendering.
11. Mr Edling pointed out a few considerations as pointing out that the intended security would end up not being effective but empty. It was because there were a number of problems as he submitted mostly to do with the need for precision in the guarantee itself.
12. Firstly, this guarantee was given only on behalf of Thabex (one Respondent) and not the other Respondents. If judgement should be given in favour of Mosebo against all Respondents except Thabex, the guarantee would not be paid out. Hence the very wisdom of the need to have paid in cash. I thought this was unarguable.
13. Secondly, the guarantee (as recorded in it) related to an alleged “action” with case number CIV/APN/333/2010 instead of “application” (which it was) under case number CIV/APN/33/2010. While this aspect would engender a debate it cannot seriously be argued that the case/matter involved could have been identified despite the typographical error. I did not think there ought to be an undue worry about this one, expect as indication of carelessness where there should be none.
14. As contained in the guarantee, it contemplates an amount which may be found to be due by Thabex “to the High Court of Lesotho”. Counsel contended that this amounts to a misrepresentation because such an amount will never be found to exist. And that this is primary so because the High Court has no claim against Thabex. Since the amount of security was fixed by Registrar for Mosebo’s costs, it is a reasonable feeling that this is not only intriguing. It is intended by avoiding simple and elegant language, to deflect the purpose of “security for costs” in favour of Tsoakinye Peter Mosebo in certain High Court case No. CIV/APN/333/2010. Again I found that this creates a doubt or rather there is a lot of room for even suspecting that Thabex is not acting in good faith.
15. I agreed that the guarantee would not have been efficacious if there had been no delivery of the document.
16. I agreed with Mr Edling that the requirements that a demand need to be made for execution or fruition of the guarantee while misplaced in many respects it was more difficult if it had to depend on inclusion or accompaniment of a “copy of the final unappealable judgement”. It also begged the question as to who would certify that a judgement was final and unapealable. This was another undoing of the liquidity of the bank guarantee.
17. Again it was difficult to understand a stipulation in the guarantee that the payment guarantee will expire upon “judgement in favour of the Respondents”, before the finalization of any appeal against such judgement. It was well argued in the circumstances therefore that if Thabex should win the application, but then on appeal Mosebo wins, Mosebo will have no security since the guarantee will have expired upon judgement in favour of Thabex. A travesty of course. At different parts where the wording of the guarantee is found to be faulty with prior discussion and invitation for input more because there was delay, this could have been cured failing which a hopeless situation has been created.
18. I accepted that following on Applicant’s submission it was an unfair stipulation in the guarantee that the bank’s liability under the payment guarantee would expire on 30th September 2015. Indeed it created an incentive, wrongly of course, for Thabex to delay finalization of the matter on any appeal. As said before, a guarantee has to be effective in order to give the favoured party an obvious advantage.
19. Again I would remark that in no way would the security be said to have been to the satisfaction of the Registrar. Furthermore, reasonable time had lapsed for giving of security. Finally, in no way would Applicant be bound by the fact that Mr Fraser at one stage expressed a contrary view. As I have discussed earlier how would the Registrar be bound.
20. I therefore concluded that the necessary security was not duly given within a reasonable time. This court is accordingly entitled to grant the order requested by Mosebo in terms of prayer 1 to 6 of the notice of motion and as more fully shown in the draft order.
T. E. Monapathi
For Petitioner : Adv. Edeling
For Respondents : Mr Letsika
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