CIV/T/163/82

IN THE
HIGH COURT OF LESOTHO

In the
matter of :

LESOTHO
BUILDING FINANCE Plaintiff

CORPORATION

v

MICHAEL
MESHACK MTHEMBU Defendant

JUDGMENT

Delivered
by the Hon. Chief Justice, Mr. Justice T.S. Cotran on 3rd August,
1982

This is
an application for summary Judgment made by the plaintiff the Lesotho
Building Finance Corporation in terms of Rule 28(2)
of the High Court
Rules against defendant M. Mthembu for the payment of the sum of
M20,000 with interest and costs which sum plaintiff
allegedly
advanced by way of loan to the defendant at the latter's special
instance and request during or about March to September
1980, which
amount, despite demand, defendant has failed to pay,

A short
history of the pleadings ought to be given.

The
summons was filed in the High Court on 21st April 1982 by plaintiff's
attorney Mr. Koomhof and served upon the defendant on
the 26th April
1982 who personally endorsed it "I am defending the action".
On the 8th June 1982 Mr. Koornhof set down
the case for hearing to
obtain a default Judgment. The matter came before my brother Mofokeng
J on 14th June 1982 (a motion day)
who entered judgment "as
prayed in the summons". Mr. Koornhof tells me from the bar that
there was nothing on file to
show that the defendant entered an
appearance to defend and I have since

2

ascertained
that there was nothing in the Judge's file on that day to indicate an
appearance had been entered.

The
defendant (in person) moved the Court on the 28th June 1982 to
rescind the default judgment averring in an affidavit that he

attempted to serve the notice to enter appearance through a female
person working for him called Mamohau Masoka at the office of

plaintiff's attorney on 4th May 1982. Mr. Koornhof, allegedly through
a clerk, refused to accept it. The clerk endorsed the envelope
"refer
to Mr. Steyn". When this occurred defendant filed the notice
with the Registrar on the following day 5th May.
Miss Masoka filed an
affidavit in support. The defendant averred further that for some
reason or the other this notice was misfiled
or misplaced and did not
come or was not brought to the attention of the Judge on the 14th
June or subsequently. In that application
(which was before me) the
defendant was represented by Mr. attorney Kolisang. Mr-Koornhof did
not oppose the application and the
default judgment was accordingly
rescinded by consent with no order as to costs.

On the
30th June 1982 the defendant (in person) requested further
particulars. On the 10th July 1982 plaintiff's attorney made this

application for summary judgment. The managing director of the
plaintiff had appended an affidavit in which he averred that the

defendant is "indebted" to it in the sum of M20,000, the
cause of action being "as set out in the summons"
the gist
of which appears in the first paragraph of this Judgment. The
defendant (in person) opposed the granting of summary judgment
and
filed an affidavit denying that he was "indebted" to the
plaintiff in the sum of M20,000 or any other amount whatsoever,
and
further averred that since he denies being indebted he has a bona
fide defence to the action.

The
matter was argued on the 19th July 1982 and on this occasion Mr,
Maqutu represented the defendant. Mr. Koornhof argued first
on the
merits and then it was Mr.Maqutu's turn but his first objection was
that the application for summary judgment should have
been made
within 14 days of the 4th May 1982 when plaintiff attorney refused to
accept service. Mr. Maqutu adds that the reasons
for this refusal

3

remain
unexplained and attorney had not applied for condonation. Mr.
Koornhof contended in reply that he has not been called upon
to
explain, that his good faith is evident from the fact that he did not
oppose rescission of the default Judgment because there
was a
possibility of a mistake by his clerk, that he himself had been in
lengthy correspondence on this issue with the defendant's
regular
attorney Mr. Steyn, that he does not recollect deliberately refusing
or instructing his clerk to refuse service, that he
would not have
asked for a default judgment had he known the defendant intended to
defend, that he did not see an entry of appearance
notice in the
Court file, and finally that it did not lie in Mr, Maqutu's mouth to
speak about the Rules when he did not file a
power of attorney in
compliance with Rule 15 of the High Court Rules, which Mr. Maqutu
admitted, nor had Mr. Kolisang who appeared
before me on the 28th
June which the Registrar confirmed. I shall, in due course, consider
whether the Court ought to call upon
attorneys to show cause why some
of the costs should not be borne personally by them in terms of the
new Rule 61 of the High Court
Rules. Mr. Koornhof's explanation
however does not seem unreasonable (see McLandy v. Slateum 24 Q B D
504 quoted in Odgers, infra).
Furthermore Rule 19(1) of the High
Court Rules provides that entry should be filed at the office of the
Registrar within the time
specified in the summons and defendant was
already one day too late thus necessitating an application for
condonation or extension
of time. In my opinion equity demands that
the 14 days should start to run from the date of rescission, and I
shall now proceed
to deal with merits of the arguments addressed to
me.

Mr.
Koornhof submitted that the claim was for a liquidated amount of
money, that the cause of action was to recover a loan that
has been
advanced to the defendant(the amount thereof and approximate dates
given) which loan has not been paid despite demand.
This was
supported by the affidavit of the managing director of the plaintiff
that the defendant had no bona fide defence to the
action and his
entry of appearance was merely for the purpose of delay. He cited the
judgments of the High Court in Barlows QFS
Ltd v. Makhoza
(CIV/T/122/81) dated 14th September 198l(unreported) since confirmed
on appeal in C. of A (CIV) No. 4 of 1982

4

dated
23rd April 1982 - unreported. Mr. Maqutu submitted that the cause of
action as advanced in the summons was a mere "label",
that
the Court had been denied vital information and that the issues have
not been ventilated. In the circumstances a denial of
indebtedness
can constitute a bona fide defence justifying the Court in dismissing
the application in toto or at least granting
the defendant leave to
defend. He admitted that these arguments were unsuccessfully raised
before the Court of Appeal in Barlow's
case supra, but he adds, if I
understand his argument correctly, that this case is distinguishable
since the defendant's denial
of indebtedness is of a specie that,
standing on its own, is capable of affording a bona fide defence and
he "need not give
the plaintiff a preview" of what it is
going to be. He cited the following authorities : P.I. (Pty) v
Moolnam Bros 1982 1
SA 249 at 251 F-G; Edwards v Menezes 1973 1 SA
299 at 304; Maharaj v Barclays N. Bank 1976 1 SA 418 at 426; Jones
and Buckle 7th
Ed Vol.11 p.116, Verrijidt v Honeydew Tractors and Imp
(Pty)Ltd 1981 1 SA 787 at 789; D & D Ind. Ltd v Van der Werf and
Others
1981 4 SA 417 at 419 C-E and 426 D-H.

Mr.
Mthembu does not of course traverse the allegation that a loan was
advanced. What he does is to traverse that he is "indebted"

and I asked Mr. Maqutu whether what he was saying tantamounts to
this: that whilst the plaintiff may have advanced the loan as
alleged
in the summons that the loan is not repayable as a matter of law and
whether if this was his real defence the rule requires
that he should
disclose it to save time. Mr. Maqutu demurred and refused to be drawn
contending that paragraphs 2 and 3 are clear.

I would
have ordinarily granted the plaintiff summary Judgment as prayed
because a party is entitled to claim in this form for money
lent with
interest (see Precedent No.392 p. 676 Bullen and Leake and Jacobs,
Precedents of Pleadings 12th Ed) and the defendant
has failed to
comply with the requirements of the Rule. The traverse is vague and
the defence must be stated with sufficient particularity
to appear
genuine: "You don't get leave to defend by putting forward a
case that is all surmise and Micawberism" (per
Megarry VC in the
Lady Ann Tennant v. Association Newspaper

5

Group
(1979) F S R 298 or a general statement that "I do not owe the
money or a vague suggestion of fraud or other mis­conduct
on the
part of plaintiff" (examples given in Odgers, Principles of
Pleadings and Practice in Civil Actions in the

High
Court of Justice2nd Ed pp 75 and 76).

However,
it is the Court, in the final analysis, that has got to be satisfied
beyond reasonable doubt that the plaintiff is entitled
to summary
judgment and not what the genius of lawyers may contrive by way of
pleadings. The authorities are collected in Edwards
v Menezes. supra,
at p 304 D-E and I need not repeat them. I must confess that I was
somewhat taken aback when a building society
frames its cause of
action in this manner and does not proceed on its security, for
usually this is the basis upon which it lends
money. However, a
mortgages is entitled to bring an action on the loan -See Snell's
Principles of Equity 27th Ed. p. 396. Unfortunately
for the plaintiff
it is a statutory corporation and its objects powers and duties are
published in the gazette as an Act of Parliament
and thus forms part
of the law of the land which the judges (s.6l of the Interpretation
Act 1977) must take judicial notice of,
unlike the memorandum and
articles of a limited company that, though accessible to the public
on payment of a small search fee
at the office of the Registrar of
companies, is not a matter of judicial notice. It is true that the
plaintiff describes itself
as "financiers" but they are
financiers of a particular kind. Looking at the provisions of the
Lesotho Building Finance
Corporation Act 1976 and the provisions of
the Building Finance Institutions Act 1976 to which the plaintiff
Corporation is subject
(Vol XXI Laws of Lesotho p. 24 et seq and 124
et seq) it seems to me that I ought not to grant summary judgment.
The parties themselves
may well be engaging in shadow boxing, but
court officers should be more forthcoming. I can see a number of
issues of

6

fact and
law to be resolved viz :-

1. Did
   the plaintiff advance a loan to defendant or did it-not?

   
   

2. If
   the answer to 1 is in the affirmative, did the plaintiff have, or
   obtain from the defendant, security, of the type envisaged
   by Act 7
   of 1976?

   
   

3. If
   the plaintiff did not have, or had not obtained from defendant,
   security, was the transaction otherwise intra vires plaintiff's

   objects and powers?

   
   

4. If
   not, i.e. if the transaction was ultra vires can the plaintiff
   nevertheless recover from the defendant the amount loaned or

   advanced?

   
   

On this
last issue, if it comes to that, the authorities are by no means
unanimous.

I think
the plaintiff is entitled to an expeditious resolution if these
eventually turn up to be the issues. In exercise of my discretion

under Rule 28(8) I shall not require the defendant to give security
but I make the following orders :

1. The
   defendant is given leave to defend.

   
   

2. The
   summons, plaintiff's managing director's affidavit on the
   application, and the opposing affidavit, shall constitute the

   pleadings in the action which pleadings are declared to be closed,
   save that the defendant will not be restricted in his defences

   (Odgers. supra,p. 79 and Langton v. Roberts (1894 10 TLR 492).

   
   

3. The
   plaintiff is granted leave to apply forthwith to the Registrar for a
   date of set down during this session of the High Court
   unless it
   decides to opt for full pleadings in which event it may move the
   Court for variation of this order.

   
   

4. The
   costs of the summary judgment proceedings to stand over for
   determination at the trial. (See Estate Potgieter v Elliot 1948
   1 SA
   1084).

   
   

5. The
   Registrar will ensure that if defendant wishes to be represented his
   attorney, must file a power of attorney before the hearing
   otherwise
   he will have to conduct his case in person.
   

   
   

CHIEF
JUSTICE

3rd
August 1982.