Mohaleroe v Lesotho Public Motor Transport Company (Pty) Ltd (C of A (CIV) 6 of 9) [2009] LSCA 14 (23 October 2009)

IN THE COURT OF APPEAL OF LESOTHO C OF A (CIV) 6/09 In the matter between: MAKHOABE MOHALEROE APPELLANT And LESOTHO PUBLIC MOTOR TRANSPORT COMPANY (Pty) LTD RESPONDENT Heard: 13 October 2009 Delivered: 23 October 2009 CORAM: GROSSKOPF JA SCOTT JA HLAJOANE JA SUMMARY Proceedings on notice of motion – disputes of fact on affidavits – court a quo fails to apply Plascon-Evans rule, but decides case on the strength of documents which never formed part of the case. GROSSKOPF JA [1] The respondent (“the company”) was the applicant in the court a quo while the appellant was the fourth respondent. The company brought an urgent application on motion for a rule nisi calling on the six respondents to show cause why – “(a) 2nd to 6th Respondents shall not be interdicted forthwith from paying their monthly rental to anyone [except the Registrar of the High Court.] pending the finalisation hereof. (b) 1st Respondent shall not be interdicted forthwith and restrained from collecting monthly rentals from 2nd to 6th Respondent. (c) 1st Respondent shall not be interdicted and restrained from claiming any right and dealing in any way with the Applicant’s rented property situated at Cathedral Area Maseru urban area near Shell Oil Garage main bus stop area. (d) 2nd to 6th Respondent shall not be directed to pay their monthly rentals to the Applicant herein. (e) 1st Respondent shall not be directed to continue paying his monthly rentals to the Applicant herein.” [2] The application was opposed by the first respondent (Maluti Motors Lesotho (Pty) Ltd) and the appellant. Despite serious disputes of fact on the papers the court a quo (Mofolo A. J) granted the following order: “(i) 1st Respondent is stopped and restrained from collecting rentals from 2nd to 6th Respondents; (ii) 2nd to 6 Respondents are stopped and restrained from paying their rentals to anyone save the Applicant at the latter’s business premises; (iii) 1st Respondent is stopped and restrained from claiming any right and dealing in any way with the Applicant’s rented property situated at Cathedral Area, Maseru urban area near Shell Oil Garage, Main Bus Stop save, like all tenants, to pay its monthly rentals to Applicant at the latter’s business premises; (iv) 4th Respondent is directed to continue paying his monthly rental to the Applicant herein; (v) Costs of suit.” Appellant was the only respondent who appealed against this order of the court a quo. [3] The founding affidavit in the application was deposed to by Mr Moeketsi Tsatsanyane (“the deponent”) who alleged in the papers that he was a director of the company and that he had been authorised to depose to the affidavits on behalf of the company. The deponent relied for his authorisation on an extract of the minutes of the alleged board of directors of the company dated 22 November 2008. It should be observed that the extract of the minutes nowhere refers to the deponent as a director of the company. [4] The appellant in his answering affidavit denied that the deponent was a director of the company and alleged that he, on the contrary, was a director of the company and indeed the managing director. The appellant argued that the deponent had no locus standi. It is therefore clear from the outset that there was a dispute of fact on this vital point. I may mention that there were many other factual disputes on the papers. [5] It appears from the judgment of the learned judge in the court a quo that the parties then agreed that the following issues had to be decided: (i) Whether the appellant is a director of the company? (ii) Whether, on the contrary, the appellant is a tenant of the company? (iii) Whether the deponent is a director of the company? [6] Despite obvious disputes of fact the learned judge then proceeded to decide these three and other issues on the papers without the benefit of oral evidence. In order to reach a decision the learned judge relied on various documents (hereinafter referred to as the “additional documents”) which did not form part of the official record before the court a quo or before us. The additional documents included inter alia the memorandum and articles of association of the company and certain documents reflecting the transfer of the company’s shares. The additional documents were not annexed to any of the affidavits and were not even mentioned therein, but were apparently handed up to the judge in the course of counsel’s address in the court a quo. [7] The court a quo held that the appellant is not the managing director of the company but its tenant. The extent to which the court a quo relied on the additional documents in order to reach this conclusion appears from the following extracts from the judgment. (a) “In this court’s view, the so-called sale of shares by Moshe and their alleged purchase by [the appellant] was no more than a backdoor transaction and invalid”. (b) “the court holds that the sale to [the appellant] of shares by Moshe is irregular in that it contravenes Articles of Association of the [company] which forbid sale of shares to non-members” (c) “it was up to [the appellant] to prove, on a balance of probability, that he is, in fact, either director or managing director of the [company] and in my view [the appellant] has failed to do so for I fail to comprehend, if this is [the appellant’s] defence, how 0.5% purchase of shares against the spirit and dictation of the company’s statute would make [the appellant] managing director of the [company]”. The sale of the company’s shares never formed part of the company’s case before the court a quo or before us. [8] The court a quo referred in its judgment to articles 24, 25 and 26 of the articles of association of the company and even quoted extracts from those articles in its judgment in order to show that the appellant was not a director of the company. As in the case of the share transfers these articles never formed part of the case before the court a quo or before us. [9] To rely on the additional documents in order to reach a decision was of course irregular and is, on its own, a sufficient reason to set aside the order of the court a quo. [10] The parties in this case declined the opportunity to refer the matter to oral evidence and we are therefore bound to decide the appeal on the papers before us. The learned judge decided (as appears from paragraph [7] above) that the onus was on the appellant (who was the fourth respondent in the court a quo) to prove that he was director of the company. In my judgment the learned judge erred in this respect. There was no onus on the appellant in these circumstances. The legal position is clear, as was pointed out by this court in the case of MNM Construction Co (Pty) Ltd v Southern Lesotho Construction Co (Pty) Ltd and Others LAC (2005 – 2006) 112 at 116 E-F: “Where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may only be granted if those facts averred in the applicant’s affidavits which have admitted by the respondent, together with the facts alleged by the respondent, justify such an order. Plascon-Evans Paints Ltd v Van Riebeeck [Paints] (Pty) Ltd 1984 (3) SA 623 (A) at 634 E-635 C; Ramahata v Ramahata LAC(1985-89) 184 at 185 E-H; Makhutla and Another v Makhutla and Another LAC(2000-2004)480”. [11] The facts averred by the respondent (the applicant in the court a quo) and admitted by the appellant (the fourth respondent in the court a quo), together with the facts alleged by the appellant, i.e. that he and not the deponent, was the director of the company, did not justify the finding of the court a quo that the deponent was the director/chairman of the applicant. In the result the appellant’s objection to the deponent’s locus standi must be upheld. [12] The following order is made: 1. The appeal is upheld with costs. 2. The order of the court a quo is set aside and substituted by the following order; “Application dismissed with costs” I agree: I agree: _________________ F H GROSSKOPF JUSTICE OF APPEAL ________________ D G SCOTT JUSTICE OF APPEAL _________________ A M HLAJOANE JUSTICE OF APPEAL For the Appellant : Adv. A. M. CHOBOKOANE For the Respondent: Adv. E. T. POTSANE