Mokatse v Manager- Boliba Savings and Credit and Another (C of A CIV 36 of 10) [2011] LSCA 10 (20 April 2011)

IN THE COURT OF APPEAL OF LESOTHO HELD AT MASERU C OF A CIV 36/10 In the matter between:- MOTSAMAI JACOB MOKATSE APPELLANT and THE MANAGER - BOLIBA SAVINGS AND CREDIT 1ST RESPONDENT BOLIBA MULTI PURPOSE COOPERATIVE 2ND RESPONDENT CORAM: MELUNSKY, JA HOWIE, JA HLAJOANE, JA HEARD: 8 April 2011 DELIVERED: 20 April 2011 SUMMARY Co-operative Societies Act 6 of 2000 - membership and accounts of member terminated – whether termination unlawful or at member’s instance. JUDGMENT HOWIE, JA [1] In the High Court the appellant applied unsuccessfully for an order requiring the second respondent, Boliba Multipurpose Co-operative (Boliba), to restore his membership of, and to reactivate his accounts with, the society. [2] It is common cause that the appellant applied to Boliba for a loan. He said in his loan application that he required the money to buy furniture costing M42 000.00 from Prestige Furnitures, a retail furniture store in Maseru. The loan was granted. In accordance with its policy relating to credit risk, Boliba did not pay the loan amount to the appellant but issued a crossed cheque not negotiable for that sum payable to the retailer. The cheque was handed to the appellant who took it to Prestige Furnitures. [3] The appellant’s case is that when he sought to make his purchase (this was on 9 June 2009) the shop assistant with whom he dealt told him that the store required, for what he recounted as “commercial reasons”, that the cheque be one simply made out to “cash” before they could assist him. He therefore returned to Boliba’s offices and reported what had happened. The cheque was taken from him and some while afterwards the Sales Manager of Boliba told him she had contacted the store and heard a different account as to the alleged requirement of a cash cheque. She said she was retaining the cheque and that she required him to accompany her the next day to investigate the issue further at Prestige Furnitures. He asked for the cheque but she refused to give it to him. Later that day he telephoned the Sales Manager of Boliba and said he would lodge a letter of complaint about her “seizing” the cheque from him. He referred to it as “tantamount to spoliation”. (Being Deputy Registrar of Deeds, the appellant holds a legal qualification). True to his word, the appellant did write such a letter. It was dated that day – 9th June 2009. It elicited a letter the following day from the first respondent, Boliba’s Manager, informing him that his accounts would be closed with immediate effect. He maintains that the closure was unlawful because it occurred in conflict with the provisions of section 31 of the Co-operative Societies Act 6 of 2000 (the Act). He complains, too, that the exchange of letters referred to brought an end to his membership, which termination was also unlawful because it was in conflict with section 32 (3) of the Act. [4] The case for the respondents (first respondent being the principal deponent) is that the appellant told the store assistant he was not there to buy furniture, he wanted to exchange the cheque for cash. When this was relayed to Boliba’s Sales Manager, Mrs. Mapota, (after the appellant had returned from the store and given her his version as to what occurred there) she decided that she and the appellant should go to Prestige Furnitures the next day, her intention being that the store employee who had dealt with the appellant could disclose in front of him what she had relayed to Mrs. Mapota. When the proposed visit to the store was put to the appellant he did not at first respond negatively. Some hours later, however, he telephoned Mrs. Mapota, saying he would not accompany her but would send her a letter. [5] In a replying affidavit the appellant branded the factual allegations in conflict with his case as fabricated. [6) It is appropriate at this point to set out the crucial paragraph of the appellant’s letter of 9th June 2009. Having stated an account of the events of that day, and having said that he declined to visit the store with Mrs. Mapota because she had ‘despoiled’ him of the cheque, he said the following: “ I therefore move that I should be awarded redress to an effect that a cheque written cash not Prestige Furnitures be presented to me to clear up the inconvenience that I have encountered so far in the entire transaction, or alternatively ‘omnia ante’ for any further negotiations. Thus, if my ‘plea’ is not upheld I have decided to cancel loan contract in question, membership and every contractual relationship that exists between me and Boliba. I am expecting a response before the close of business on the 10th day of June 2009 upon receipt of this note failing upon which I will decide on appropriate legal remedies”. [7] The first respondent’s letter of 10th June reads “ Your letter of 09/06/0029 nears [sic] reference. Please be informed that all your accounts with Boliba Savings and Credit will be closed with immediate effect. You are therefore kindly requested to bring your savings passbook with you to facilitate the -```````````````````````````````````process of accounts closure”. [8] Subsequent to the commencement of the litigation, and in settlement of a prayer in the appellant’s notice of motion for an order for the refund of the loan fee and the credit balance in one of the accounts plus interest, the appellant was paid, and accepted, M2,651.35. It is not in dispute that that amount included M100 in respect of “membership contribution”. [9] In support of the appeal the appellant argued, firstly, relying on section 32 (3) of the Act, that he was not given a hearing before his membership was terminated. Section 32 of the Act is headed “Expulsion of member” and provides as follows:- “ (1) A member who contravenes any of the provisions contained in this Act, the Rules and Regulations made under this Act, or the by-laws of the society or who acts in any way detrimental to the interests of the society may be expelled from the society. 2) A society shall prescribe in its by-laws a procedure for the expulsion of members. 3) Such by-laws shall provide for reasonable notice of the charge and an opportunity for making representations concerning the charge to be given to the members against whom the expulsion proceedings are directed”. [10] Nothing in the record indicates that the matter of expulsion was ever raised. More particularly, the appellant was never faced with any charge such as entitles a member to a hearing under section 32 (3). His reliance on the subsection is therefore misplaced. [11] As regards the appellant’s reference to section 31, the section reads:- “ A member may withdraw from a society subject to such conditions, and by giving the society such notice in writing as may be prescribed by the by- laws: Provided that in the case of a primary society such notice shall not exceed six months and in the case of a secondary or an apex organisation such notice shall not exceed twelve months”. [12] The notice period in the second respondent’s by-laws was not referred to anywhere in the record. This is understandable. The appellant did not rely on the section in his affidavits or, apparently, his argument in the court below. However, assuming he is entitled to attempt reliance on the section for the first time on appeal, the section provides maximum, not minimum periods. Moreover, the appellant himself required a response to what was, in effect, his notice letter by the close of business the following day. Such response he indeed received. There was accordingly no non-compliance with section 31. There is also, in these circumstances, no merit in the appellant’s submission that the respondents’ response to his letter was premature. [13] The appellant’s next submission was that his letter meant no more than that on receipt of Boliba’s response to his letter, he would decide whether to terminate his accounts and membership. Assuming it is open to him to advance an interpretation of his letter in conflict with its tenor (which the interpretation ventured in argument certainly is), that interpretation was not set out in his affidavits in the court below and it is plainly not what his letter says. His “plea” was for a cash cheque (by inference, also for M42 000) as redress for alleged spoliation, “alternatively, ‘omnia ante’ for any further negotiations”. Whatever that alternative was intended to mean, there is no doubt what the remaining portion of the above–quoted passage meant. Rejection of either option by Boliba would result in cancellation by him of his relationship with Boliba in all respects, on which course he had already decided. Nothing in the letter conveys that he would decide on whether to cancel only after receiving Boliba’s reply. Obviously, if Boliba accepted either of the alternatives in his “plea” he would not cancel and would not need to resort to law. Consequently, what he did reserve for later decision was simply what legal remedies he would pursue if he received no cheque and then cancelled. [14] There is no basis in the evidence for concluding that Boliba would ever have contemplated giving the appellant a cash cheque in payment of the loan and he cannot seriously have thought that spoliation had occurred. The record contains a letter of demand which he addressed to Boliba on 12 June 2009 for damages for spoliation but such a claim, understandably, was not pursued in his notice of motion. In the circumstances he can have had no reasonable contemplation that his “plea” would be “upheld” and his letter was, I infer, no more than a stratagem by means of which he could be seen to terminate the relationship between them before Boliba did so. [15] Faced with the choice which he put to Boliba of accepting or rejecting his “plea”, Boliba by clear implication rejected it. After that there was nothing more Boliba was required to do or convey than that the accounts were closed. Closure, after all, was what the appellant told Boliba in his letter he had already decided upon. There is accordingly no ground for holding that the termination of the appellant’s accounts and membership was unlawful. [16] It remains to mention that the appellant sought to make something of two instances in which the court below misstated certain facts. Those misstatements have no bearing on the issues in the appeal. [17] The appeal must therefore fail. It is dismissed, with costs. __________________________ C. T. HOWIE JUSTICE OF APPEAL I agree: __________________________ L. S. MELUNSKY JUSTICE OF APPEAL I agree: __________________________ A. M. HLAJOANE JUSTICE OF APPEAL For Appellant: In person For Respondents: Advocate N. Nku