CIV/APN/146/89

IN THE
HIGH COURT OF LESOTHO

In the
matter between:-

LESOTHO
AGRIC DEVELOPMENT BANK Applicant

and

PAGES
STORES (LESOTHO) (PROPRIETARY) Respondent

LIMITED

JUDGMENT

Delivered
by the Honourable Mr. Justice J.L. Kheola on the 25th day of August,
1989

This is
an application for the ejectment of the respondent from that portion
of the applicant's premises in Kingsway, Maseru, it
presently
occupies and that the respondent be ordered to vacate the said
premises within such period as the Court may, in its discretion,

determine ; and costs of this application.

The facts
of this case are common cause. The applicant was the registered
lessee, in terms of the Land Act 1979, of plot no. 12284-024
and plot
no. 12284-034 situate in Kingsway, Maseru.

2

The
respondent was the registered sub-lessee of certain premises located
on one of the abovementioned properties, namely plot no.
12284-024.

On the
7th February, 1989, by Legal Notice No. 17 of 1989 published in
Government Gazette no. 12 of the 7th . February, 1989, the
Minister
of Interior declared the abovementioned plots together with plot no.
12284-358 as a selected development area in terms
of section 44 of
the Land Act 1979 (See Annexure "CSM2")

On the
6th April, 1989 a lease under the Land Act 1979 in of respect of plot
no. 12284-362 was registered in favour of the applicant
in the Deeds
Registry, Maseru. The said plot no. 12284-362 is a consolidation of
the abovementioned plots nos.. 12284-024 and 12284-034
and 12284-358.
(See Annexure CSM3").

The
respondent, by way of review proceedings, applied to this Court under
CIV/APN/88 of 1989 for an order setting aside the said
declaration as
a selected development area. The respondent's application was
dismissed with costs on the 9th June, 1989.

The
respondent has noted an appeal against the judgment of this Court on
the abovementioned review application. In its founding
affidavit the
applicant has stated that in terms of Rule 6 of the Court of Appeal
Rules 1980, the said noting of appeal does not
have the effect of
legalising respondent's occupation of the leased premises; respondent
will have to obtain an order of this Court
authorising it to remain
in occupation of the leased premises pending the outcome of the
appeal.

3

It is
common cause that the respondent did make such an application on the
23rd June, 1989. However, on the 17th July. 1989 the
respondent made
an application for the withdrawal of the said application for stay of
execution. The reason for withdrawal was
that the respondent as the
appeal was pending before the Court of Appeal, the application for
stay of execu­tion had to be
made before that Court. The Court of
Appeal dismissed the application.

On the
31st July, 1989 this Court granted the respondent;s application for
withdrawal of the application for the stay of execution
pending the
outcome of the appeal.

Mr. C.S.
Molelle, applicant's Managing Director, has deposed that the balance
of hardship or convenience favours the granting of
the applicant's
application for the following reasons:

Applicant
is in the process of erecting a shops and offices building complex on
the consolidated plot no. 12284-362, the total estimated
development
cost of which would be M80,000,000.00 and which will, in its final
stage, comprise thirteen storeys. Apart from applicant's
own use, two
storeys will be made available for shops and other commercial
enterprises while about ten storeys w will be available
for office
space. Extensive parking space will also be provided. The project
will be completed in two phases. The first phase is
to be financed by
way of a loan of M9.000 000 00 from Nedfin Bank Ltd. in South Africa
while the second phase will be financed
from applicant's and
government sources.

4

The
present estimated escalation costs on the first phase only, amount to
at least M30,000-00 per month.

Mr.
Molelle deposes that the first phase was planned in such a manner
that it involves, from the outset, the leased premises presently

occupied by the respondent.. Any change in this planning will involve
extensive costs as well as further del-ays with consequent
increased
escalation of the overall cost of the project. In addition, the
registration of the said M9,000,000-00 mortgage bond
is being delayed
because of the respondent's continued presence on the site and this
is turn has serious consequences as regards
the financing of the
project.

In its
opposing affidavit deposed to by a certain Mr. Neil Whiffler, the
respondent alleges that for as long as its appeal is pending
in the
Court of Appeal, applicant cannot claim that, the Minister's order is
a valid order due to the fact that the question of
its validity is
pending before the said Court of Appeal. Furthermore on the 14th
April, 1989 the applicant solemnly entered into
an undertaking which
was made an order of Court that pending the final determination of
the review proceedings, the applicant would
not seek to eject
respondent from the said premises.

The
respondent denies that its occupation is illegal. In the first place
the decision of this Court is not final in that it is subject
to
appeal which appeal has been noted as is presently pending before the
Court of Appeal. In the second place the applicant undertook
not to
eject the respondent until the final determination of the review
proceedings which final determination

5

will only
come about when the decision on appeal is given.

It
alleges that the balance of hardship is irrelevant, but in any event,
favours the respondent. Applicant has made no attempt to
ensure that
the appeal is heard speedily but merely complains that it will suffer
prejudice if it is not. The respondent denies
that its damages, if it
is forced to vacate prematurely, are easily quantifiable and says
that in any case the applicant cannot
force it to accept a money
substitute for its right to be protected in its occupation.

I agree
with Mr- Dison, counsel for the respondent, that the Court may have
regard to the following points or factors when assessing
whether to
grant a stay or not:-

1. Respondent's
   prospects of success in the appeal;

   
   

2. The
   prejudice or harm likely to be sustained by respondent if a stay is
   not granted;

   
   

3. The
   prejudice or harm to be sustained by applicant if a stay is granted.

   
   

In my
judgment in the review proceedings I formed the opinion that although
section 44 of the Land Act 1979 does not expressly exclude
the audi
alteram partern-rule, it does so by implication. In order to come to
that conclusion I did not consider section 44 in
isolation. I looked
at other sections of the Land Act 1979, especially sections 42, 13
and 54, which specifically provide that
notice shall be given to the
occupier of the land. If

6

the
Legislature had intended that under section 44 the occupier or
sublessee should be given notice and be given chance to make
any
representations before the declaration is made it would have done so
like it has done in section 42.(2).

It was
submitted on behalf of the respondent that the Minister of the
interior Misdirected himself by saying he consi­dered
himself
bound to ensure that applicant's development project became a
reality. It was submitted that that is a significant indication
that
he failed to exercise an unfettered discretion,, I have already dealt
with this argument in my judgment in the review proceedings,
However,
I may repreat that the Minister of the Interior considered the
project and found that it is one of the most important
developments
in Maseru and that the Government must support it. He exercised his
unfettered discretion in favour-of the development.
I am of the
opinion that he properly applied his mind to the application for the
development project in question and exercised
his unfettered
discretion in favour of the development. project.

The
submission that the Minister of the Interior exercised his discretion
for an improper purpose because he was aware of the respondent's

tenancy and the related dispute, is not supported by any evidence. It
must be assumed that he was aware of the respondent's tenancy
because
he gave his consent to it in terms of the law., However, he was not
bound by law to consult with the respondent, before
the area was
declared a selected development area. Section 46 refers to lessees
and allotees and not to a sub-lessee. It seems
to me that even the
compensation referred to in section 56 is payable to the lessee or
allottee and not to the sub-lessee.

7

For the
reasons stated above I came to the conclusion that the respondent has
no prospects of success on appeal.

Mr. Dison
submitted that in ejectment matters, the courts be have been slow to
allow a tenant to be put out of the premises pending
an appeal. In
Byron v. Anderson & Co., 1955 (3) S.A. 590 (D) at p. 597,
Hunochsberg, A.J. held as follows:-

"Applicant is a statutory tenant. It has been held in Makhubelu
& Makhubelu v. Ebrahim 1947 (1) SA 19 W -and on appeal
1947 (3)
5A 155 T - that a statutory tenant, who has been evicted by process
of law, is not entitled to be given repossession of
the premises
against the lessor who has reoccupied the premises, if it is
subsequently shown that the process of law was based
on a wrong
judgment. What is more, where execu­tion is not automatically
stayed by the noting of an appeal and an ejectment
order is granted
against a lessee who is dissatisfied with the judgment and wishes to
appeal, a stay of execution is freely granted;
see Weber v. Spira
1912 TPD 331; South African Breweries v., Solomon (2) 1984 OPD 76;
African Congregational Church Co Ltd &
African Congregational
Church v Dube 1944 WLD 204. It would indeed be a very drastic thing
to order a lessee to vacate the premises
in which he is actually
carrying on business, particularly where, as here, it is extremely
doubtful whether it would ever be possible
to restore such a
statutory tenant to the status quo, if the court were to uphold the
appeal."

In
similar vein, Dowling, J. held as follows in Ismail v. Keshavjee,
1957 (1) S.A. (T) at p. 688:-

"Regarding orders of ejectment, however, courts are more tender
towards occupier whose ejectment has been ordered. The principal

obstacle to allowing execution is that referred to in Weber v. Sher
1912 TPD 331. At page 333 De Villiers J P remarks:-

'It would be very drastic to order the Respondent to vacate premises
in which he is actually carrying on his business, and it would
be a
most difficult matter to restore him to the status quo if the appeal
court were to uphold the appeal. He might in the meantime,
have lost
customers and the damage to him would be irreparable".

8

I agree
with Mr. Dison that the law is as enunciated in the cases cited
above, however, I am of the opinion that the cases he has
cited can
be distinguished from the present case. In those cases it was a
simple dispute between a landlord and a tenant; but in
the present
case the matter is not so simple. The area in question has been
declared a selected development area in terms of the
Land Act of
1979. The respondent is refu­sing to vacate the premises on the
ground that the Minister's declaration is invalid.
This Court has
found that the declaration is valid. It follows that the respondent's
continued occupation of the premises is illegal.
In all the cases
cited above the premises had not been declared selected development
areas. In the present case the validity of
that declaration was
tested in a Court of law and was upheld. The mere fact that there has
been an appeal against the judgment
of this Court does not mean that
ejectment of the respondent from the premises cannot be enforced.

In Bam v.
Bhadha (2), 1947 (1) SA 399 (N), Selke, J. said at page 408:

"In those circumstances, I think that the Court is entitled to
consider where the substantial balance of convenience and justice

lies - that is to say, whether in allowing the judgment to be carried
into effect, or in directing that its operation be suspended.
Mr.
Milne suggested that the Court in exercising its discretion should
have regard to the probabilities or otherwise of the appeal

succeeding. It seems to me, however, that that is asking too much of
the Court, for it would involve the Court being obliged on
such an
application to canvass, at least in outline, the whole case about to
be presented for appeal. I think that such a situation
is obviously
impossible, and that the Statute does not contemplate that the Court
should undertake such a task. It seems to me
that all that can be
expected of it in such circumstances as these is that it will bear in
mind that the appellant has an appeal
as of right to the Appellate
Division, and that the exercise of that right may conceivably result
in the judgment being reversed
or altered in material respects., But
the actual probabilities that it will be so dealt with cannot, it
seems to me, be taken into
account".

9

I am of
the opinion that in the present case the substantial balance of
convenience and justice lies in favour of the applicant
for the
following reasons:

1. The
   present estimated escalation costs on the first phase only amount to
   M30,000 per month. This is the amount which the appli­cant
   shall
   have to pay eventually when the building operations start.

   
   

2. The
   Court of appeal will sit in January, 1990, which means that by then
   the cost of the building shall have escalated by about
   M180,000.
   This appears to me to be a very large amount of money and there is
   no reason why the applicant should be made to bear
   those expenses.

   
   

3. The
   first phase was planned in such a manner that it involves from the
   outset, the leased premises presently occupied by the respondent-Any

   change in this planning will involve extensive costs as well as
   further delays with consequent increased escalation of the overall

   cost of the project.

   
   

4. It
   is alleged that registration of the M9,000,000 mortgage bond is
   being delayed because of the respondent's continued presence
   on the
   leased premises and this in turn has serious consequences regarding
   the financing of the project. The financier may change
   its mind or
   impose new conditions which are less favourable than at the present
   time.

   
   

5. The
   applicant's project is a massive building project which will change
   the face of Kingsway and in addition it will provide extenisve
   and
   various facilites to the public. Those facilities will include
   accommodation of the respondent but at higher rates of rentals.
   The
   applicant has actually undertaken to provide shop facilities to the
   respondent in the new premises.It means that the respondent
   will not
   stop trading for an in nite period nite period. It may be a long
   period but in the meantime the respondent may re-locate.

   
   

10

The
respondent has alleged that the applicant has made no attempt to
ensure that the appeal is heard speedily but merely complains
that it
will suffer prejudice if it is not. I think the respondent has got
its facts wrong somewhere. It is the respondent which
has appealed
and it is its duty to ensure that the appeal is heard speedily. In
Byron's case (supra) the appellant was given sixteen
(16) days within
which to set down his appeal. The respondent was under no obligation
to ensure that the appeal is heard without
delay. In the present case
the earliest date on which the appeal may be heard is January, 1990.
By then the appli-cant shall have
suffered a lot of damages.

I do not
pretend for a moment that the respondent is not going to suffer any
harm or prejudice if the Court grants the appli­cation.
However,
this is a case in which the Court has to resolve this matter by
taking into account the balance of hardship and convenience
which I,
have already found to be in favour of the applicant.

The
respondent may have to be out of business for some- time while trying
to re-locate. In the process it may lose some customers
but it can
claim damages from the applicant if the appeal is upheld, I do not
agree with the. suggestion that the respondent's
damages are not
quantifiable, it knows how much it collects every month or every day
and its annual turnover. On the other hand,
though applicant's
damages are quantifiable they are astronomical and it has been
alleged that the respondent may not be financially
strong enough to
meet applicant's claim for damages. In a letter dated the 3rd May,
1989 addressed to the Commissioner of Lands
in terms of section 56 of
the Land Act 1979, the respondent has stated

11

exactly
what damages it will suffer (see Exhibit A).

Mr.Dison
submitted that the order of the 14th April, 1989, on a proper
interpretation, means that applicant undertook to refrain
from
interfering with respondent's occupation of the premises until the
final decision, whether in this Court or in the Court of
Appeal, had
been given in respondent's review proceedings of the impugned order
of the Minister; If there was an appeal against
the decision of this
Court, the final determination of the matter would only take place
when the decision of the Court of Appeal
was given.

I do not
agree with the interpretation given by Mr. Dison to the order by
consent made by me on the 14th April, 1989. At the time
the order was
sought the bulldozers of the respondent wore demolishing the
buildings on both sides of the leased premises and the
respondent was
afraid that the respondent would demolish the leased premises on the
basis of the Minister's declaration. The respondent
has definitely
become wise after the decision. The undertaking never said the final
decision "whether in this Court or in
the Court of Appeal".
It read as follows: "Pending the final determination of review
proceedings to be instituted by
applicant, which proceedings shall be
set down and heard on 24 - 25 May 1989, First Respondent hereby
undertakes to refrain from
............................."

The final
determination of those proceedings in this Court was made on the 9th
June, 1989 when respondent's application was

12

dismissed
with costs. The mere fact that the respondent has a right of appeal
against the judgment of this Court does not mean that
the matter has
not been finally determined in this Court. The judgment of this Court
is a final judgment and cannot, under any
circumstances, be regarded
as an interlocu­tory decision. If the parties had intended the
final determina­tion of the review
proceedings on appeal they
would have said so.

In the
result I make the following i order:

1. The
   respondent is ordered to vacate plot no. 12284-362(formerly plot no.
   12284-024) Kingsway, Maseru within fourteen (14) days
   from the date
   of this order;

   
   

2. Failing
   compliance with order (a) above, the respondent must be ejected from
   the premises mentioned in (a) above by writ of this
   Court;

   
   

3. The
   respondent shall pay costs of this application.

   
   

J.L
KHEOLA

JUDGE

25th
August, 1989.

For the
Applicant - Mr. Geldenhuys

For the
Respondent - Mr. Dison.