Sotho Development Corporation(Pty) Ltd v Nedbank (Lesotho)(Pty) Ltd (C. of A. (CIV) No. 18 of 2000 )

Media Neutral Citation: 
[2000] LSHC 133
Judgment Date: 
13 September, 2000

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C. of A. (CIV) No. 18 of 2000

IN THE COURT OF APPEAL OF LESOTHO


In the Appeal of:


SOTHO DEVELOPMENT CORPORATION(PTY)LTD Appellant

vs

NEDBANK (LESOTHO)(PTY) LTD Respondent


HELD AT MASERU


Coram : Steyn, P

Friedman, J.A.

Ramodibedi, J.A.


JUDGMENT


STEYN P.


Yesterday, the 2nd of October 2000, the appellants filed a document headed "Notice of Withdrawal of Appeal". Upon receipt of this notice, the respondent filed an affidavit deposed to by its attorney setting out certain facts and making certain submissions upon which it relied for an order for costs on an attorney and client


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scale. (In the notice of withdrawal the appellant had tendered to pay respondent's costs.)


In order to decide this issue I summarise the facts.


On the 12th November 1999 the respondent issued a summons in which it claimed the following relief from the appellant:


"1. Payment of the amount of Ml,493,412.27;


  1. Interest thereon at the rate of 23% per annum from the 1st November, 1999 to date of payment;


  1. An order declaring the property specifically mortgaged under the below mentioned Deeds of Hypothecation No. 22697 registered on the 26th July, 1997 and No. 24281 registered on the 14th July, 1994 in respect of Plot No. 12293-013, situate at Thetsane Industrial Area, Maseru Urban area in the district of Maseru, executable;


  1. Costs of suit;


  1. Further and/or alternative relief."

In its declaration which was filed on the same day the respondent sets out its cause of action as follows :


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"3.1 In terms of an agreement between Standard Chartered Bank


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Africa PLC Limited (whose name was subsequently changed to Nedbank (Lesotho) Limited and the Defendant, and at a special instance and request of the Defendant, the Standard Chartered Bank Africa PLC Limited advanced money to the Defendant from time to time on an overdraft facility, which agreement also provided for the payment of overdraft facility on demand, payment of which amount was secured by way of two (2) Deeds of Hypothecation registered in favour of the Standard Chartered Bank Africa PLC in the Deeds Registry, Maseru, under the Deeds Registry Act of 1969. Such Deeds of Hypothecation are the first Deed of Hypothecation No. 22697 registered on the 26th July, 1991 for the amount of M2,000,000.00 (Two Million Maloti) (a copy of the 1st deed of Hypothecation is hereto annexed and marked "A") and the 2nd Deed of Hypothecation No. 24281 registered on the 14th July 1994 for the amount of M 1,000,000.00 (One Million Maloti). A copy of the 2nd Deed of Hypothecation is hereto annexed and marked "B".


3.2 The Deeds of Hypothecation annexed hereto specifically stipulate that should the Defendant fail to make payment of any amount on demand, the Mortgagor would be entitled to proceed forthwith for the recovery of the full amount due and payable by the Defendant to the Mortgagor without notice and to have the mortgaged property declared executable for the full amount of the Bond.


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The Plaintiff had demanded payment of the amounts due, owing and payable by the Defendant but not withstanding such demand, Defendant fails, refuses, and/or neglects to pay the full amount.


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In the premises, the Plaintiff states that that full amount due, owing and payable by the Defendant has therefore become payable. The Plaintiff has calculated the amount it has advanced to the Defendant together


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with interest thereof as at the 31st October, 1999 in the sum of Ml,493,412.27. The Plaintiff is secured to the total amount of M3,000,000.00 (Three Million Maloti) in respect of the Deeds of Hypothecation hereto annexed."


There are also claims for consequential relief. It is not necessary to record these.


On the 18th of November 1999 the appellant entered an appearance to defend. On the 24th of November 1999 the respondent filed an application for summary judgment in the conventional form and in accordance with the provisions of Rule 28 of the High Court Rules. A notice of an intention to oppose the application was lodged the next day by the appellant and on the 1st of December an answering affidavit was deposed to on behalf of the appellant.


It is not necessary to set out in any detail the defences raised by the appellant. They were "technical" defences alleging e.g. a non-compliance with the provisions of Rule 28, and a failure to prove the authority of the deponent who substantiated the cause of action. The appellant also alleged that the respondent had failed to prove that it was the lawful successor to Standard Chartered Bank. The factual averments which underpinned the respondent's claims remained uncontested.


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On the 23rd of May 2000 the application for summary judgment as claimed was granted by the High Court. An appeal was noted against this order on the 6th of June 2000. This appeal was enrolled for hearing at the current session of the Court of

Appeal.


What occurred when the parties were advised of the enrolment is set out in an affidavit of Mr Matsau, the respondent's attorney. He says that he telephoned the appellant's attorney and advised him that he intended to brief senior counsel to appear for the respondent in the matter. Before doing so, he sought affirmation from the appellant's legal adviser that the appeal would be pursued. He was assured by Mr Molete, on behalf of the appellant, that his client intended to proceed with the appeal.

The matter had been enrolled for the 6th of October 2000. This date was, for reasons set out in Mr Matsau's affidavit, not suitable for counsel and with the consent of the parties the Court advanced the matter on the roll to the 3rd of October - a date which suited both counsel.


Mr Matsau says that in these circumstances he was surprised when, less than 24 hours before the appeal was due to be heard the appellant filed a notice of


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withdrawal of the appeal. He points to the fact that his counsel had travelled at considerable expense from Durban and had to stay overnight in Maseru. In these circumstances, and particularly in view of the fact that additional costs - which may not be recoverable in pursuance of the conventional costs order - would be incurred. The respondent accordingly sought an order for costs on the scale as between attorney and client in order to enable it to recover all reasonable costs it had incurred, including those referred to above.


Mr Alkema, who appeared for the respondent, submitted that a special costs cover was appropriate for the following reasons :


  1. The appellant had abandoned its appeal at the last moment and had given the Court no explanation for doing so.


  1. The appellant had at no stage contested its liability to the respondent to pay the amounts claimed but had relied exclusively on defences based on alleged deficiencies in the respondent's papers such as the change of name of the respondent.


  1. The defences raised were spurious and devoid of any merit.


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  1. In all the circumstances the only reasonable inference to be drawn from the manner in which the appellant had conducted the litigation was that its conduct was an abuse of the legal process in order to delay payment of the claim for as long as possible.


Mr Fischer for the appellant was unable to gainsay any of the contentions advanced on behalf of the respondent. He said that he had been informed that the appellant had decided to apply for its liquidation. However, no explanation was forthcoming as to why the appellant had not informed the Court as to why it had delayed until 24 hours before the hearing of the appeal to take such a step - if indeed this was the reason for the abandonment of the appeal.


It seems clear to me that the appellant's conduct of this litigation was indeed designed to delay the fulfilment of its obligations and that it had no bona fide defence to the respondent's claims. The "last minute" abandonment of the appeal has caused prejudice - in the sense of the unnecessary incurring of additional cost. It has also caused this Court to devote time and effort to prepare itself for the adjudication of the appeal when the appellant apparently had no serious intention to proceed with it. That attorney and client costs are in all these circumstances justified seems clear. See Herbstein and van Winsen -The Civil Practice of the Supreme Court of South


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Africa (Fourth Ed) 720-721.


The South African Court of Appeal set out the principles upon which special orders of costs are made as follows :


"The true explanation of awards .of attorney and client costs not expressly authorised by Statute seems to be that, by reason of special considerations arising either from the circumstances which give rise to the action or from the conduct of the losing party, the Court in a particular case considers it just, by means of such an order, to ensure more effectually than it can do by means of a judgment for party and party costs that the successful party will not be out of pocket in respect of the expense caused to him by the litigation". (Nel v. Waterberg Landbouwers Ko-operatieve Vereeniging 1946 AD 597 at 607.)


See also In Re Alluvial Creek Ltd 1922 CPD 532 at 555 where the Court says :


".........an order is asked for that he pays the costs as between attorney and client. Now sometimes such an order is given because of something in the conduct of a party which the Court considers should be punished, such as malice, misleading the Court and things like that, but I think the order may also be granted without any reflection upon the party where the proceedings are vexatious, and by vexatious I mean where they have the effect of being vexatious, although the intent may not have been that they should be vexatious. There are people who enter into litigation with the most upright purpose and the most firm belief in the justice of their cause and yet whose proceedings may be regarded as vexatious when they put the other side to unnecessary trouble and expense which the other side ought not to bear. That I think is the position in the present case".


For these reasons and following the approach adopted above, the withdrawal


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of the appeal is noted and the appellant is ordered to pay the respondent's costs on

the scale as between attorney and client.


J.H.STEYN

PRESIDENT


I concur


G. FRIEDMAN

JUDGE OF APPEAL


I concur


M.M. RAMODIBEDI

JUDGE OF APPEAL


Delivered at Maseru on this 13th Day of September 2000


For Appellant:

For Respondent: