C of A
(CIV) No 36 of 2000
COURT OF APPEAL OF LESOTHO
(PTY) LIMITED Appellant
HARLEY & MORRIS JOINT VENTURE N.O. Respondent (previously LESOTHO
no procedure whereby the proceedings of the High Court can be
reviewed by this Court. The only remedy is to appeal.
of requirements which an applicant seeking to re-open a case and lead
further evidence will generally have to satisfy.
circumstances will a bank which has honoured cheques signed by
unauthorised signatories be liable in damages to its customer?
authority to institute proceedings may subsequently be ratified.
respondent ("the bank") brought an urgent application for
the liquidation of the appellant company ("the company")
June 2000. The bank alleged that the company was indebted to it in
the sum of M946 897 and that
for an amount of M375 801 had been granted against the company in
favour of Frasers Lesotho Ltd ("Frasers").
maintained that the company was unable to pay these debts and that it
was also just and equitable that the company be
wound up. The High
Court granted a provisional order of liquidation on 25 July 2000.
company opposed confirmation of the rule and filed an opposing
affidavit. It did not seriously dispute its indebtedness to the
and Frasers, but made the bald allegation that it in turn has a
substantial counter-claim of between M9 and M12 million against
bank and Frasers. No further particulars were supplied in the
opposing affidavit. That affidavit did refer to a letter of demand
dated 7 January 1998 with annexures which the company's attorneys had
previously addressed to the bank, but these annexures did
part of the court record. The letter, standing alone, does not shed
any further light on the company's alleged claim against
the bank. We
have subsequently, and after the hearing of the appeal, received
copies of these annexures. The annexures may have
the company's alleged cause of action against the bank, but that was
not the proper way to address the shortcoming.
In any event those
papers still did not adequately set out why the Court should not have
granted a liquidation order.
company filed a supplementary opposing affidavit on 11 October 2000
in which it sought to rely on certain bank statements showing
balance. This was a disingenuous attempt by the company to show that
the company did not owe the bank any money. It is common
the entries on these bank statements did not reflect payment of the
amounts due; they were brought about by the transfer
of the company's
accounts from one computer system to another.
the company launched an urgent application on 17 October 2000 to stay
all proceedings against it pending the determination
of an action and
a counter-application instituted by the company against the bank. No
particulars of the alleged claims were however
application was brought by the company in its own name,
notwithstanding the provisional order of liquidation. It
the founding affidavit that the main reason for bringing the
application was to stay the liquidation proceedings since
"has successfully reached agreement with a financier to whom the
liquidation proceedings posed a serious threat".
company brought another application in its own name on 31 October
2000. This was an application for leave to file a supplementary
affidavit in order to introduce new evidence. The additional evidence
which the company sought to introduce did not, however, relate
company's alleged counter-claim
the bank but to an invitation by the bank to Frasers to participate
as provisional liquidators of the company.
a quo granted a final order of liquidation on 3 November 2000 but
gave no reasons for its decision. We therefore do not
know what the
Court a quo had decided in connection with the company's applications
referred to above. We are in any event not
aware of any application
by the company for Leave to introduce new evidence relating to its
alleged claim against the bank.
company duly filed a notice of appeal. Thereafter the company
launched another urgent application, again in its own name, in
the High Court was asked to "suspend the mandate of the
liquidator" pending the determination of an application
review the decision of the High Court. This was followed by a "Notice
of Motion for Review" in terms whereof the company
application to this Court for an order in
"(a) That the order for the liquidation of the Applicant [the
company] be set aside.
the matter be referred back to the Court a quo.
the Applicant be allowed to supplement its opposing affidavit with
evidence relating to both prescribed and unprescribed
claims the Applicant may have against the Respondent [the bank]
jointly and/or severally with Frasers Lesotho Limited.
the Court a quo be ordered to receive such evidence and adjudicate
the matter against such evidence being considered as well."
of course no procedure whereby the proceedings of the High Court can
be reviewed by this Court. The only remedy is to appeal.
parte Scott 26 SC 520; Gentiruco AG v Firestone SA (Pty) Ltd 1972(1)
SA 589 (A) at 601 D-F; Lawsa first reissue vol.3(l)
para 392, 393.)
We shall, however, treat this review application as an application by
the company in liquidation to introduce new
argument advanced by counsel for the company was that this Court
should, in the exercise of its discretion, set aside the
liquidation order and allow the company to introduce further evidence
relating to its alleged counter-claim against the bank.
held in S v De Jager 1965(2) SA 612(A) at 613 C-D that an applicant
seeking to re-open a case and lead further evidence will
required to satisfy the following requirements:
"(a) There should be some reasonably sufficient explanation,
based on allegations which may be true, why the evidence which
sought to lead was not led at the trial.
should be a prima facie likelihood of the truth of the evidence.
evidence should be materially relevant to the outcome of the trial"
S v Ndweni and Others 1999(4) SA 877 (SCA) at 880 D-F.)
guiding principles governing an application for the hearing of
further evidence on appeal have been enunciated in Colman
1933 AD 141 at 161-2. I would like to refer to only one of those
principles set forth in the judgment of Wessels CJ at
"The evidence tendered must be weighty and material and
presumably to be believed, and must be such that if adduced it would
be practically conclusive, for it not, it would still leave the issue
in doubt and the matter would still lack finality."
further Simpson v Selfmed Medical Scheme and Another 1995(3) SA 816
view the company has failed to satisfy the requirements for receiving
further evidence. Nowhere in the affidavits filed on
behalf of the
company prior to its final liquidation did the company fully set out
the actual evidence upon which it would rely
to prove its
counter-claim against the bank. It was only in the review application
that the former chairperson of the board of
directors of the company
disclosed some of the facts on which the company
rely. Only then did it appear on affidavit that the company's claim
for M9 to M12 million mentioned in its initial opposing
based on the bank's alleged unauthorised payment of cheques drawn on
it on behalf of the company by unauthorised
employees of Frasers,
Frasers obtained the signing powers on the company's bank account in
terms of a written agreement entered
into between the company and
Frasers in 1980. The company alleged that Frasers changed the
signatories to the bank account without
the company's approval but
that the company was unable to prove this because the paid cheques
were in the possession of Frasers.
However, it appears from the
affidavit of the said former chairperson that the company had
determined long before that cheques
have been "incorrectly"
paid from as early as 1988. There is therefore no reasonably
sufficient explanation as to why
the company's cause of action and
the supporting evidence could not have been set out fully in the
company's initial opposing affidavit,
even if the company was not yet
in a position to produce the paid cheques. The first requirement set
out in De Jager's case, supra,
has therefore not been satisfied in my
further of the opinion that the evidence now tendered on behalf of
the company might in any event not be "practically
as required in Colman v Dunbar, supra. The company's claim is for
damages based on the bank's breach of contract.
The cheques honoured
by the bank might well have
probably were drawn by Frasers and paid by the bank in favour of
trade creditors in satisfaction of trade debts, as provided
the written agreement. In these circumstances the company will have
great difficulty in my view in proving that it suffered
even assuming that the signatories were unauthorised. I may add that
there is no allegation that either Frasers or
misappropriated the proceeds of the cheques or forged any signatures
on cheques. In the absence of greater certainty the
accordingly not made out an adequate case to establish loss.
Australian case of Majesty Restaurant (Pty) Ltd (In Liq) v
Commonwealth Bank of Australia Ltd  47 NSWLR 593 dealt with
similar problem. In that case a company's mandate with its bank
required the signature of two company officers on cheques drawn
its cheque account. When the bank honoured cheques with one signature
only, it was sued by the company for breach of contract
negligence, notwithstanding that the cheques were delivered by the
company to its trade creditors in purported satisfaction
of its trade
debts. Damages were sought to the value of the cheques honoured. The
Court there held that the payments to the company's
operated to satisfy the company's indebtedness to them and that the
honouring of the cheques therefore caused no
loss to the company.
previously held in B Liggett (Liverpool) Ltd v Barclays Bank Ltd
 1 KB 48 that where the paying bank makes an unauthorised
payment which is assumed to have resulted in the discharge of the
customer's debt, the bank is entitled to have the advantage of
discharge of that debt when sued by the customer.
evidence which the company now seeks to introduce to prove its
alleged counter-claim against the bank cannot in my judgment
regarded (as required in De Jager's case, supra) as "materially
relevant" to the outcome of its claim if the company
suffered any damage. There is, therefore, no reason to receive the
further evidence or to stay the final order of liquidation
for by the company. A liquidator is in any event in a better position
to investigate claims and there seems to be no
reason why the
liquidator cannot pursue valid claims against the bank and Frasers.
So much for the application to receive further
for the company argued two points on appeal. The first was a
so-called point in limine which was raised for the first time
appeal. The submission was that the deponent Vos who instituted the
liquidation proceedings on behalf of the bank was not properly
authorised by the bank to apply for the liquidation of the company.
Vos, who is a senior manager of the
alleged that he was duly authorised to do so. The resolution of the
board of directors of the bank which Vos annexed to his
certainly authorised him to bring legal proceedings on behalf of the
bank. It was couched in general terms but did not
authorise Vos to launch sequestration or liquidation proceedings
against the bank's debtors. The allegation by Vos
that he was duly
authorised to bring the application was nevertheless ''not disputed"
by the company in its opposing affidavit,
or questioned in any of the
subsequent affidavits. It was raised for the first time on appeal.
The bank could no doubt have ratified
the position if the alleged
lack of authority had been properly raised in limine. (Cf Smith v
Kwanonqubela Town Council 1999(4)
SA 947 (SCA).) I would therefore
dismiss the point in limine on this ground alone.
however satisfied on the papers before me that Vos had in fact been
duly authorised to bring this application. In the case
of Mall (Cape)
(Pty) Ltd v Merino Ko-operasie Bpk 1957(2) SA 347(C) no resolution to
institute the motion proceedings in that case
had been annexed by the
deponent. The full Court (per Watermeyer J) held as follows at 352:
evidence that the proceedings have been properly authorised would be
provided by an affidavit made by an official of the
a copy of the resolution but I do not consider that that form of
proof in necessary in every case. Each case must
be considered on its
own merits and the Court must decide whether enough has been placed
before it to warrant the
that it is the applicant which is litigating and not some
unauthorised person on its behalf. Where, as in the present
respondent has offered no evidence at all to suggest that the
applicant is not properly before the Court, then I consider
minimum of evidence will be required from the applicant (cf. Parsons
v Barkly East Municipality, [1952(3) SA 395(E)]; Thelma
(Pty) Ltd v Me Swigin, 1954(3) SA 457(C))."
authority of the person acting for the respondent bank was challenged
by the appellant in the case of Tattersall and Another
v Nedcor Bank
Ltd 1995(3) SA 222 (A). The Court there applied (at 228-9) the
approach adopted in Mall's case, supra, namely that
challenge to authority is a weak one, a minimum of evidence will
suffice. The learned judge further remarked (at 228)
"A copy of the resolution of a company authorising the bringing
of an application need not always be annexed."
in that case came to the conclusion that the deponent's authority had
present case the bank's resolution authorising Vos to institute
proceedings on its behalf had been annexed. Vos further asserted
he was duly authorised by the bank to bring the Liquidation
proceedings. The company did not dispute any of these allegations
offered no evidence at all to suggest
bank was not properly before the Court. I am accordingly satisfied on
all the evidence that the liquidation application
authorised. I respectfully adopt the approach of the learned judge in
the Tattersall case, suprar at 229, namely that
to hold otherwise
would be carrying formality too far.
second point which the company raised on appeal, though not with much
conviction, was that the bank's claim against the company
not properly set out". The company did receive bank statements
from time to time and never disputed that it was
indebted to the
bank. And the company did actually admit in its opposing affidavit
that there existed "a relatively normal
debt of less than plus/minus Ml,000,000.00".
judgment the appeal cannot therefore succeed.
informed that the bank had also been liquidated in the mean -time.
The bank's liquidator has now been substituted as the
petitioner/respondent in these proceedings.
following order is made:
appellant's application to introduce further evidence is dismissed
appeal is dismissed with costs.
at Maseru this 11th day of April, 2002
JUDGE OF APPEAL
Appellant: Adv. T J Botha and with him Adv Morethoane
Respondent: Adv. K J Kemp SC
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