Liquidator (Theko J. Moruthane) v Khoapha and Others (duplicate of A096 0017) (CIV/APN 51 of 2000) [2000] LSCA 121 (9 November 2000)

1 C I V / A P N / 5 1 / 2 0 00 IN T HE H I GH C O U RT OF L E S O T HO In the matter b e t w e e n: T HE L I Q U I D A T OR ( T H E KO J. M O R U T H A N E) Applicant and P A L E SA ' M A M P HO K H O A P HA ( b om Sebilo) 1st Respondent L E S E N Y E HO K H O A P HA T HE D E P U TY S H E R I FF R E G I S T R AR OF T HE H I GH C O U RT 2nd 3rd Respondent Respondent 4th Respondent J U D G M E NT Delivered by the H o n o u r a b le M r. Justice T. M o n a p a t hi on t he 9th d ay of N o v e m b er 2 0 00 In w as c o m m on cause that on the 27 July 1 9 99 a writ of execution w as issued by the Applicant. He says this w as in p u r s u a n ce of a ruling of this C o u rt given on the 14 D e c e m b er 1 9 98 a nd later amplified by j u d g m e nt w h i ch w as delivered on the 1st M a r ch 2 0 0 0. It cannot be correct that the ruling sanctioned the issuing of a writ of execution. W h at is correct is that this C o u rt m a de a ruling on the 14 D e c e m b er 1 9 98 in w h i ch it w as decided, that a certain site or plot N o. 1 4 3 0 3 - 6 69 Ha Matala was part of the estate of the First R e s p o n d e nt and the S e c o nd R e s p o n d e n t, in a declaration. T he said estate w as being liquidated following a divorce b e t w e en the parties. As Liquidator w as appointed the Liquidator m a de a report a nd a plan of distribution in w h i ch distribution the disputed plot w as d e e m ed to be part of the estate. I later confirmed that the report did go further. It spelt that the distribution a nd allocation of this site w as in favour of First R e s p o n d e nt w ho w as the wife of the S e c o nd Respondent. W h at my ruling of the 14th D e c e m b er 1 9 98 did w as to confirm that the disputed site w as part the c o m m on estate. This w as against the challenge w h i ch h ad been brought by the First R e s p o n d e nt in an application in which she sought a declaration that the site could not have f o r m ed part of the estate. T h is ruling of the 14th D e c e m b er 1 9 98 w as followed by my full reasons of the 1st M a r ch 2 0 0 0. It is correct that the ruling and the j u d g m e nt confirmed the liquidator's findings on the division of the joint estate of the parties and o ne could safely say to that extent the liquidator's r e c o m m e n d a t i o ns were m a de an order of Court. As a sequel to that there followed the ruling that I have s p o k en about. T he First R e s p o n d e nt herein filed the notice of appeal of the 12th January 1 9 99 and hastily followed it up with an urgent application to stay execution w h i ch w as granted ex parte on the 11th February 2 0 00 u n d er C I V / A P N / 5 1 / 0 0. T he application for stay of execution w as o p p o s e d. T he present controversy w as precipitated by this circumstances particularly in that the First R e s p o n d e nt failed to prosecute her appeal a nd did n ot prepare the appeal record in time. I did n ot hide my feelings on the first d ay that the parties appeared. It w as that in no w ay w o u ld the Appellant h a ve b e en held to h a ve b e en dilatory in a ny respect. W h at w as i m p o r t a nt w as that he w as led to prepare the record late by the fact that she w as awaiting the full reasons of the C o u r t. At the hearing M r. N t l h o ki said he h ad already p e r s u a d ed his client n ot to p u r s ue the appeal. W h at quite precipitated the present aspect of the m a t t er a nd the a r g u m e nt of this matter w as the situation that the rule to stay execution ultimately lapsed. A nd in the absence of an application to revive the rule the Liquidator filed as he c o n c e d ed the s o m e w h at unconventional application. A nd as he said it w as "in the interest of professional courtesy." He m o v ed this C o u rt to formerly discharge the rule on an a m e n d ed notice of m o t i on w h i ch w as filed of record on the 17th A u g u st 2 0 0 0. In his attack against the m o t i on to discharge the rule M r. N t l h o ki c o m p l a i n ed that the Liquidator h ad to u se w h at he says w as an unconventional w ay of seeking for discharge of the rule a nd he says there w as absolutely no n e ed for the attempt to discharge the rule. W h at the Liquidator should h a ve d o ne w as to seek to i m p l e m e nt the p l an as he h ad finalised it i n a s m u ch as he h ad n ot formally s o u g ht to vary it. I believed that m a de g o od sense. M r. M o r u t h a ne conceded chat there w as no necessity to issue the notice of m o t i on (to discharge the rule) in terms of rules of C o u r t. He submitted that any h a rm w h i ch m ay have been perceived in that regard w as m i n i m al a nd could not alter the c o m p l e x i on of this matter f r om o ne of essentially seeking to re- emphasize the liquidator's opposition to the application for stay of execution, by the First R e s p o n d e n t, on the g r o u nd that the application w as frivolous a nd u n d u ly dilatory. I did not see any reason for this w h at I perceived to be an unnecessary complication that resulted in this a r g u m e nt before m e. M r. M o r u t h a ne appealed that any further delay in prosecution of this matter w o u ld adversely a nd severely bring unnecessary costs to the beneficiaries of the joint division of the joint estate. T h is C o u rt w as respectfully urged to finalize this matter in the interest of justice rather t h an be lured into an a r g u m e nt on technicalities w h i ch First R e s p o n d e n t, as alleged, s e e m ed to be bent on. He further said that it w o u ld be a sad day in the administration of justice if adversaries in litigation w e re to be allowed a carte blanche to exercise their wits on protracted technical arguments to no meaningful avail. T h is w o u ld constitute a serious travesty of justice. But my feeling a nd belief w as simply that the complication a nd the costliness of these proceedings w as caused by the Liquidator himself T he Liquidator h ad brought about the dragging out of the proceedings in a simple w a y. It w as that he n ow w a n t ed to bring a b o ut a sale of that site w h i ch w as allocated to the First R e s p o n d e nt in the said Liquidator's plan a nd the inventory. It is that later intention n ow to sell the disputed site w h i ch b r o u g ht a b o ut the stay of execution by M r. Ntlhoki's client. It w as that stay of execution w h i ch resulted in that rule w h i ch h ad lapsed. I agreed that essentially, barring for the intention to appeal, the First R e s p o n d e nt h ad n ot objected to the liquidator's r e c o m m e n d a t i o ns w h i ch after all h ad b e en m a de an order of C o u r t. T h at w as definitely so w h en o ne also n o t ed that the disputed site w as allocated to the First R e s p o n d e nt in t e r ms of the plan. S he c o m p l a i n ed later w h en the attitude of the Liquidator w as c h a n g ed to that of w a n t i ng to sell the site. T he liquidator says it w as only on the modalities of t he division that the First R e s p o n d e nt s e em to take issue b ut that aspect h ad b e en disposed of by the j u d g m e nt as aforesaid. I w o u ld n o te that it c o u ld n ot h a ve b e en s i m p le in the context that the First R e s p o n d e nt h ad intended to challenge the finding of the C o u rt that the site f o r m ed part of the estate. T he intention to sell t he site h ad n ot yet arisen. In the circumstances that the attitude to p r o c e ed w i th t he appeal h ad b e en a b a n d o n ed I w o u ld agree that the matter h ad b e c o me s i m p le a nd straightforward a nd it required that the liquidator h ad to bring into fruition the p l an that he h ad chiselled o ut in his report. I c a me b a ck to the m a t t er of the application for the discharge of the interim order granted on t he 11th F e b r u a ry 2 0 0 0. T he application w as as aforesaid o p p o s e d. To t he application the First R e s p o n d e nt raised certain points-in-limine: Firstly, s he said the application w as an a c a d e m ic exercise w h i ch only served to increased the costs in this matter. O n ce a rule h ad lapsed it w as n ot necessary to launch an application to discharge it. S he said effectively it w as no longer in existence. In view of the fact that as she contended the C o u rt h ad meru motu revived a nd extended the rule, the Applicant could n ot persist in this averment that it has lapsed. T he correct procedure available for h im w as to resort to rule 3 9 ( 2) that is to obtain date of hearing of the application w h i ch gave rise to the interim order a nd seek to have that application dismissed if the Applicant therein w as n ot pursuing the matter. T h is allegation that the C o u rt meru motu revived a nd extended the rule w as interesting b ut n ot too accurate. T he correct version could perhaps be that the rule w as revived a nd extended by agreement b e t w e en the parties. T h is is because w h en the issue w as raised n o ne of the parties rejected the suggestion by the C o u rt that to enable that there be a r g u m e nt a nd for the t i me being the rule be regarded as being in existence. T h is m ay have been technically inelegant. It m ay be that there arose a perception that the C o u rt virtually gave advantage to the party w ho w a n t ed to get a declaration that the rule did n ot have any life. T h at should n ot have been so. Despite that the rule w a s, conveniently as it were, revived I w o u ld still m a ke my declaration either w ay w h en the m o m e nt c a m e. So do I. T he Liquidator's application to discharge the rule that had lapsed h ad a second prayer. It w as this second prayer w h i ch the First R e s p o n d e nt submitted w as incapable of being granted. T he C o u rt w as virtually being asked to direct that a particular asset of the joint estate be sold in execution allegedly "as contemplated in the ruling of this H o n o u r a b le C o u rt issued on the 14th D e c e m b er 1 9 98 a nd subsequent j u d g m e nt entered on 17th M a r c h, 2 0 0 0 ". T h is M r. N t l h o ki c o n t e n d ed w as she d u ty of s o me other p e r s o ns n a m e l y: the D e p u ty Sheriff acting p u r s u a nt to a writ or, the Liquidator in the exercise of the p o w e rs vested in h i m. S u ch sale if it w as to be w o u ld n ot only d e p e nd on discharge of the interim order w h i ch stayed s u ch sale in the first place or the lapse of that rule if it h ad n ot b e en revived. I w o u ld also d e p e nd on w h e t h er it w as the original intention of the Liquidator in his p l an of distribution. T he First R e s p o n d e nt also resisted the a w a rd of costs as prayed or u n d er a ny scale. To repeat it w as s u b m i t t ed that the p r o c e d u re a d o p t ed by the A p p l i c a nt w as u n w a r r a n t e d. If A p p l i c a nt felt that the issues s u r r o u n d i ng the devolution of the joint estate b e t w e en the First a nd the S e c o nd R e s p o n d e nt o u g ht to be p u r s u ed differently he o u g ht to h a ve resorted to procedural steps already available a nd at his disposal as Liquidator instead of launching this application. He should h a ve applied for variation of his p l an b e c a u se the original p l an did n ot e n c o m p a ss sale of the disputed plot. In the interest of justice a nd in following the j u d g m e nt of the C o u rt a sale c o u ld n ot be c o u n t e n a n c e d. A nd that the application o u g ht to be dismissed with costs because it w o u ld serve no p u r p o se w h e t h er the rule therein lapsed or w as revived. I agreed. T wo questions r e m a i n ed to be answered. N o ne being a re-visit of the technical aspect of t he application for discharge of t he rule. T he u n d e r s t a n d i ng being that discharge or confirmation of a rule r e m a i ns a discretionary r e m e d y. T he first question w as this: w h at n ow h a p p e ns to the p l an of the liquidator n ow that the attitude of the First R e s p o n d e nt w as to a b a n d on the appeal, her intention being no longer to proceed with the appeal? T h at is the first question. T he s e c o nd question w as this: W as the liquidator entitled for a ny reason to resolve that there be a writ of execution seeking to place the site that w as allocated to the First R e s p o n d e nt on auction? A nd w as he n ot only entitled to p r o c e ed w i th the allocation as contained in the p l an a nd the allocation on the basis of w h i ch the C o u rt in its ruling in D e c e m b er 1 9 99 virtually c o n f i r m ed the p l an a nd further c o n f i r m ed that the site w as part of the estate by declaration of that Court's O r d e r? C o u ld the liquidator thereafter c h a n ge his o wn p l an that is t he p l an to allocate t he site to the First R e s p o n d e n t? If the a n s w er to t he last question w as that he w as i n c o m p e t e nt to actually vary his p l an after t he C o u rt h ad c o n f i r m ed the plan, it m e a nt that that application for stay of execution w as well f o u n d e d. In the circumstances the application to discharge the rule no longer mattered, it b e c a me n u g a t o ry indeed b e c a me a c a d e m ic as I c o n c l u d ed it w a s. It b e c o m es a c a d e m ic because o n ce the rule w as discharged if his application w as granted still it w as i n c o m p e t e nt as I c o n c l u de in l aw for h im (the L i q u i d a t o r) to c h a n ge the plan that w as virtually c o n f i r m ed by the C o u r t. E v en if the rule e n d ed being c o n f i r m ed it c o u ld only be on the basis that there w as no reason for the Liquidator to c h a n ge the p l an that included the allocation of that site to the First R e s p o n d e n t. I h a ve to say s o m e t h i ng by w ay of a b a c k g r o u nd to the reasons for the liquidator's decision to sell the site. It will be a p p a r e nt that the reasons w e re n ot g o od reasons a nd the reasons w e re actually b ad in that they discriminated over the allocation that w as m a de to the First R e s p o n d e nt a nd c o u ld n ot d e m o n s t r a b ly lead to her advantage. T h is discrimination consisted in that instead of taking up a nd b u n d l i ng all the assets for sale the Liquidator p i c k ed o ut a nd singled o ut this allocation m a de to the First R e s p o n d e nt t h us separating it f r om others a nd c o m m i t t i ng it for sale. It will be apparent that the reasons for this sale w h i ch w as s o u g ht to be interdicted could n ot h a ve b e en g o od reasons. If the reasons w e re b ad it m e a nt the intention to discharge the rule could n ot h a ve b r o u g ht a ny justice a nd the a t t e m pt w as (even if n ot i m p e a c h e d) futile in its effect. I say even if the discharge w as in fact b r o u g ht a b o u t. I will n ow l o ok into the reasons. In l o o k i ng into the reasons I h a ve to r e m a rk at the w ay in w h i ch the Liquidator w e nt a b o ut the ventilation of his case in the replying affidavit. T h is he did in an u n u s u al w a y. M r. N t l h o ki correctly c o m p l a i n ed that it disclosed the privileged c o m m u n i c a t i o ns b e t w e en attorney a nd attorney . It disclosed the c o r r e s p o n d e n ce b e t w e en t h e m. It w as to s p e ak a b o ut w h at transpired b e t w e en the offices of the t wo C o u n s el a nd I believed a nd agreed w i th M r. N t l h o ki that that w as n ot the p r o p er w ay to go a b o ut it as s u ch c o m m u n i c a t i o ns are privileged a nd their disclosure in the m a n n er that M r. M o r u t h a ne w e nt a b o ut w as unethical c o n d u c t. B ut having said so I further n o t ed that this in fact facilitated this C o u rt in k n o w i ng a b o ut w h at w as in the m i nd of the Applicant. T he real reasons for bringing a b o ut the site on sale b e c a me apparent. Incidentally M r. M o r u t h a ne w as p ut in a cleft stick, so to speak, and w as unable to resist the conclusions as to w h at appears to have been his intention to bring the site for sale on auction. In the letter dated 29th July 2 0 00 M r. N t l h o ki wrote to the Applicant - Liquidator, said he has perused the Liquidator's report he found that he w as unable to find the "driving reason" for the Liquidator's intention to p ut up for sale the single i m m o v a b le property that w as awarded to his client by virtue of the s a me plan of the Liquidator. M r. N t l h o ki c o m m e n t ed further that if the idea w as to strike s o me f o rm of parity all the assets of the estate of the parties w o u ld have to be sold up a nd the proceeds w o u ld have to be divided equally b e t w e en t h e m. T h is he said because he intended to advise his client to accept the Liquidator's award. B ut if the only property that will be sold w as the o ne a w a r d ed to the First R e s p o n d e nt then he foresaw problems. T h is m e a n i ng that he h ad advised his client that the O r d er of C o u rt confirming that the property belonging to the c o m m on estate w as acceptable. A nd if the Liquidator w as intent on selling this site that w as allocated to the First R e s p o n d e nt as the C o u n s el contended there w o u ld be problems. T he letter of the 15th A u g u st 2 0 00 f r om the Liquidator then followed. T h is letter w as in three paragraphs. T he first o ne w as rather longish a nd the last t wo were a m e re t wo lines. I intend to quote letter in full because it really s h o ws the reasons for the Liquidator's intention to p ut up the site for sale. T he second paragraph seems to say so m u ch about the real reason. T h e re w as another reason to be found in the first paragraph: " W i th to y o ur letter of 29th July 2 0 00 on the a b o ve matter, as well as related discussions (previous a nd subsequent) w i th Mr N t l h o ki I w i sh to invite y o ur k i nd attention to p a r a g r a ph 3.1.4 of the first Liquidators R e p o rt (styled Liquidator's a w a rd R e c o m m e n d a t i o ns - R e p o r t ). T h is is the driving reason for the solution - rather t h an intention - to p ut up for sale the i m m o v a b le property at Ha M a t a l a, in an a t t e m pt to strike an equitable balance in the distribution b e t w e en the parties. H o w e v e r, although the Liquidator's r e c o m m e n d a t i o ns h a ve n ow b e c o me an C o u rt O r d er there is still s o me r o o m, hopefully, for the parties to arrive at a negotiated settlement so l o ng as the stark i m b a l a n ce w h i ch it is a t t e m p t ed to r e m o ve is indeed effectually r e m o v e d. N o t h i ng is case in stone a nd no vindictive intentions s h o u ld be allowed to prevail on either side. If y o ur client is willing a nd able to p ay the costs, so let it be. a nd she c an k e ep the contentious property to herself w i t h o ut a ny a c r i m o ny h o w s o e v e r. Finally, please allow me to congratulate y o ur enlightened a nd m a g n a n i m o us a p p r o a ch in advising y o ur client to accept the Liquidator's award." ( My underlining) T he reasons n ow b e c a me clear a nd obvious. T o g e t h er with contents of the letter I n e e d ed to n o te a very significant statement that w as m a de by M r. M o r u t h a n e. It w as that the feeling of the Liquidator a nd indeed the feeling of the S e c o nd R e s p o n d e nt h ad been that in terms of the plan the First R e s p o n d e nt s e e m ed to have benefited m o r e. T h at w as w hy there w as that reference to "equitable balance." Related to this w as that reference to the p a y m e nt of costs that we find in the second paragraph of this letter. It w as further because in the m i nd of the Liquidator a nd indeed he expresses this to say that if his costs are paid the matter of the property can be left as directed in the plan. T h is matter of the costs of the Liquidator is even borne by the attitude of the First Respondent's C o u n s el as contained in the letter of the 2 6* A u g u st 2 0 0. I quote f r om the letter: " T he net effect of the solution is to leave our client without any i m m o v a b le property - a house to live in. At the s a me time the prize for retaining that house is for her to shoulder the entire costs of the liquidator. All these issues are difficult to live with. Perhaps y ou m i g ht consider selling all the assets belonging to the parties a nd divide the proceeds equally b e t w e en t h e m. T h ey should then bear the liquidator's costs in equal proportions. We are merely thinking loud a nd are yet to take up this matter with client." ( My underlining) T he statement is loud a nd clear that the changing of the. attitude of the Liquidator, that is his intention lately to have the site sold, w as based on the reasons of his o wn costs furthermore about an attempt w h i ch he said he w as m a k i n g, to even out things. It should be clear that the application for discharge of the rule w as not p r o p er in the circumstances. E v en if o ne w e re to rule that technically on application for discharge of a lapsed rule could be d o ne on a notice of m o t i on a nd therefore n ot u n c o n v e n t i o n al there w e re still serious hurdles. T he first hurdle w as that the application for stay of execution w as based on an eminently g o od g r o u nd that the appeal h ad b e en pending. S e c o n d ly the additional g r o u nd w as that it w as i n c o m p e t e nt for the Liquidator to w a nt to place the disputed sice on sale by auction w h en his p l an has n ot b e en varied. It w as incorrect to say that the sale w as c o n t e m p l a t ed in a ny j u d g m e nt of the 1st M a r ch 2 0 0 0. O n ce the First R e s p o n d e nt elected to accept the allocation as p r o p o s ed in the p l an of distribution that b e c a me the e nd of the matter because it b o u nd the Liquidator. T he application o u g ht to fail w i th costs against the estate. T he Liquidator's costs still have to be b o r ne by the estate failing w h i ch by the First R e s p o n d e nt a nd the S e c o nd R e s p o n d e n t. I do n ot see h ow the Liquidator should be driven to desperation n a m e ly because the issue of his costs r e m a i n ed unsettled. If a bill of costs h ad b e en prepared he s t o od a g o od c h a n ce of confronting the parties a nd asking for e n d o r s e m e nt of the C o u r t. T he bill w o u ld b e c o me a claim in his favour. W hy should the Liquidator confuse his g o od w o rk w i th his claim for costs? He deserved the costs. T he application fails w i th costs. T . M O N A P A T HI J U D GE