CIV/APN/443/03
IN THE HIGH COURT OF LESOTHO
In the matter between:
LESOTHO NATIONAL DEVELOPMENT
CORPORATION APPLICANT
VS
CEE BEE CLOTHING (PTY) LTD RESPONDENT
JUDGMENT
Delivered by the Hon. Mr. Justice G. N. Mofolo On the 15th day of June. 2005
This is by no means a long, invalid case. It is very short.
On 17 November, 2003 after a long argument the Court recorded the following order by consent of the parties.
Respondent be interdicted from removing assess of the business;
Respondent be allowed to operate business with immediate effect;
Parties negotiate ways and means of settling rent outstanding pending judgment of this Court.
I am to say that the context in which (3) above is to be understood is that provisional order was granted for the respondent to continue business but that this was conditional on respondent not only paying current rent, but also settling arrear rent and if the respondent failed, the applicant would then approach the Court for judgment confirmation of the provisional order. Applicant has duly approached the Court on a Notice of Motion for variation and confirmation of the provisional order in the following terms:-
The Court's direction No.l directing respondent from removing assets of its business from Applicant's premises be confirmed.
Applicant be permitted to sell the movable assets presently within applicant's premises for recovery of arrears rental owed of it, in exercise of its' tacit hypothec, as had been prayed for in the main application.
The Court's directives No.2, No.3 and No.4 ordering respondent to pay current rentals while parties negotiate settlement of the rest of the arrear rental, and directing applicant to open premises so that respondents could carry on its manufacturing business, be cancelled.
The Court should award costs on a high scale.
Further and/or alternative relief.
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Respondent has taken a number of points in limine and there are: Dispute of fact, urgency, self-help. With respect this Court sees or appreciates no dispute of fact in this application in that applicant has proceeded by way of application and not by action. Proceeding by way of application is not the same thing as proceeding by way of action for in the former proceedings are shorter and material facts are to be disclosed. Besides, where one proceeds by way of application or action but the course of action and parties are the same, the defence of lis pendens succeeds. It cannot succeed where one proceeds by way of action and subsequently quite independently, proceeds by application. There can be no question of self-help in these proceedings for all that the applicant is seeking is confirmation of the provisional order. The application in this Court's view is urgent because for non-payment of rent applicant is suffering financial hardship. Points in limine cannot but be dismissed and they are so dismissed.
As to merits, according to paragraph 5 o the Chief Executive of the applicant, rent owing at the time of the original application was moved was in the sum of One Hundred and Seventy Six Thousand, Five Hundred and Eighty Maloti (M76, 580.00) and following the Interim Court Order respondent had paid Ninety Thousand Maloti (90,000.00) leaving a balance
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settlement was to be negotiated in terms of the Court order.
This Court is of the view that regardless of what respondent paid on the outstanding rentals, respondent was to in any event settle
outstanding arrears and it is to be noticed while respondent was paying off arrears, he has at the same time accumulating rentals for which he/she was accountable and liable to discbarge on a monthly basis.
It would seem following the Court's provisional order respondent occupied the premises sometime in January, 2003 the result of which was that as respondent was interdicted from removing assets from the premises applicant placed security thereon to protect own interest the operation costing thirty one thousand, five hundred Maloti (M31,500.00) as at 13 December, 2003 (paras 6 and 7).
Since respondent was not paying current monthly rentals by November, 2003 arrear rentals had accumulated to M141,173.77 (para. 8.2). It would seem on 31 March, 2004 respondent paid M32,444.70 requesting applicant to withdraw the interlocutory application. Applicant
refused the
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refused the request but note according to the applicant it was "until the 29th June, 2004 after Respondent had paid "current rentals" in (to read, I think, of) May and June. Applicant has not mentioned credits of M30,628.76 and M90,560.82 and since they are not mentioned it would seem they are deducted from the account owing in view of the fact that according to applicant's statement (annxure "T.S.I" the amounts were paid sometime in November, 2003. Ms. Tau-Thabane has complained that respondent is charged VAT twice, being building rental VAT and land rental VAT both at 14% and yet applicant has leased to respondent a building and not bare land. The lease has not been annexed to the proceedings and the Court is not able to confirm the allegation. However, I am of the view this is something the applicant and respondent must settle in view of the fact that the Court has found there are discrepancies in the rent charged and rent paid. For example, Mr. Molapo in his affidavit has claimed respondent refused to pay rentals for the months of July to December, 2004 resulting in the increase of arrears from M120,623.25 on 31st March, 2004 to M189,094.75 on 9 December, 2004. By my computation arrear rentals for months July to December, 2004 is M59,471.50 and if this
is divided by 6 months it is M9,911.41 while aggregate rentals per month amount to M9,489.13 with a discrepancy of M400+ unaccounted
for. The discrepancy must in any event
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be accounted for in that over a long period it may amount to much quite apart from the fact that as I have said above, question of land rent is also to be visited.
I have above referred to sums of M30,628.76 + M90,560.82 unaccounted for by the applicant and amounting in all to M121,189.5 8.
This amount deducted from Ml 80,094.75 leaves a balance of M58,905.17 and it would appear Ms. Tau-Thabane's figures slightly differ from mine though account has to be taken of the fact that while the Court worked from Ml 80,094.75 Ms. Tau-Thabane worked from a figure of M186,069.86.
According to the applicant though, the amount of M180,094.75 includes VAT, arrear rentals and security costs. In any event, apart from minor discrepancies, I am satisfied that as at 9 December, 2004 respondent owed rental as I have demonstrated above.
As I have said above, the Court granted a provisional order but extended it to give the respondent an opportunity negotiate terms as to the
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discharge of owing rent. In addition, the Court extended the provisional order in the interest of workers of whom the Court is informed work is no longer available for them. Be this as it may, the Court considers it has given applicant enough time to put its house in order and now that respondent still owes applicant the Court's hands are tied and any further negotiations can only be between applicant and respondent. This Court is also mindful of the applicant's task to create jobs, a task that may not be unnecessarily hampered or compromised.
In the result the application is granted as prayed save that there will be no order as to costs for in certain respects the respondent has also succeeded.
JUDGE
15/06/2005
For the applicant: Mr. Mofoka
For the respondent: Ms. Tau-Thabane
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