Lesotho Institute of Accounts v Mapetla and Others (CIV/APN/174/2001 )

Case No: 
CIV/APN/174/2001
Media Neutral Citation: 
[2003] LSHC 73
Judgment Date: 
2 July, 2003

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CIV/APN/174/2001

IN THE HIGH COURT OF LESOTHO


In the Application of:

LESOTHO INSTITUTE OF ACCOUNTS Applicant

and

EPHRAIM RAMOSEHLANA MAPETLA 1st Respondent

HONOURABLE MINISTER OF FINANCE 2nd Respondent

ATTORNEY GENERAL 3rd Respondent


REASONS FOR JUDGMENT


On 8th June 2001 I disposed of this matter and intimated that reasons for my decision would be filed in due course. These now follow:


On 4th May 2001 the applicant herein filed, with the Registrar of the High Court, a notice of motion in which the court was moved, on urgent basis, for an interim interdict framed in the following terms:


"[1] That the Rules of court as to forms and service be dispensed with as a matter of urgent relief.


[2] That a Rule nisi be issued returnable on the date to be


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determined by the above Honourable Court, calling upon the

Respondent to show cause on the ....... day of........ 2001

why an order in the following terms shall not be made.


  1. First Respondent be restrained and interdicted from holding himself out as the Chairman of the Board of Centre for Accounting Studies.

  2. First Respondent be restrained and/or interdicted from entering the premises of the Centre for Accounting Studies or its offices and desist forthwith from dealing with any of the Centre's business and equipment, pending the finalization of this application.


[3] Respondent be directed to pay costs of this application.


[4] The purported appointment of respondent by the Honourable Minister of Finance be declared null and void.


[5] That applicant be given such further and/or alternative relief as this Honourable Court may deem just.


Prayers 2 (a) and (b) operate with immediate effect as an interim interdict."


The application was, on the same day, 4th May 2001, moved, ex-parte. before my brother Lehohla,J. (as he then was) who granted the interim interdict. Confirmation of the order was opposed. Affidavits were duly filed by the parties.


The facts, disclosed by the affidavits were, in a nutshell, that the applicant was a statutory body established in terms of section 3 of the Accountants Act, 1977; The purposes for which the applicant was established were spelled out under section 6 of the Act. The section reads:


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"6. The function of the Institute shall be -

  1. to determine the qualification of persons for admission as members;

  2. to provide for the training, education and examination by the Institute or any other body of persons practising or intending to practise the profession of Accountancy;

  3. to regulate the practice of the profession of Accountancy in Lesotho;

  4. to promote the interests of the profession of Accountancy in Lesotho;

  5. to render pecuniary or other assistance to members or their dependants, as the Institute thinks fit, with a view to protecting or promoting the welfare of members and

  6. generally to do such acts as it thinks fit for the purpose of achieving any of the objects mentioned in the preceding paragraphs."


It was common cause, from the affidavits, that the applicant was run by council established and elected in terms of the provisions of section 8 of the Act. However, in its founding affidavit the applicant averred that in order to provide for training and education of accountants it had created, as its arm, the Centre for Accounting Studies. The Council had appointed one of its members viz, the 1st respondent to be the Chairman of the Board of Management of the centre for Accounting Studies.


In their answering affidavits, the respondents denied the applicant's averments that it had created/established the centre for Accounting Studies, as its arm and that the council had appointed 1st respondent to be the Chairman of the Board of Management of the centre. According to 1st


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respondent between 1979 and 30th August 2000 the Centre for Accounting studios was a joint property of Lesotho Government and Irish Government. As proof thereof 1st respondent attached in his answering affidavit annexure "ERM10", Cabinet's Savingram addressed to the Commissioner of Lands which read, in part:


"re: Certificate of user site No. 46 Old Europa - Centre for Accounting Studies


As you are aware that the above site was allocated to the Irish people for Centre for Accounting Studies, you are therefore requested to issue a certificate of user in respect of the Ministry of Finance........."


Following the above cited Cabinet's Savingram the Commissioner of Lands did, on 16th March 1983, issue a certificate of user which read, in part:


"Certificate of user No. MSU 003 - (813)


The Ministry of Finance of P.O. Box 395 Maseru 100 is hereby authorised in terms of INTERIOR'S circular notice No. (1/2/2/8/4) - (0/6/6) P (A plan of the land is printed overleaf) for the following purpose:- Erection of Centre for Accounting Studies."


When on 1st September, 2000, the Irish Government ceased to be a co-owner of the centre for Accounting Studies, the Lesotho Government became the sole owner thereof. In that regard 1st respondent attached, to his answering affidavit, annexure "ERM8", memorandums of understanding between the Government of the Kingdom of Lesotho and the Government of


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Ireland. According to annexure "ERM 8", the parties agreed, inter alia, that the Irish Government would cease to be a co-owner of the Centre for Accounting Studies at the end of the year 2000 and hand over to the Lesotho Government all infrastructure and operational equipment it had funded in the centre. The -Lesotho Government would ensure the sustainability of the centre and provide a subvention thereto to cover operational expenses where fees would not be sufficient to cover costs. Annexure "ERM8" was to come into force on the date of its signature i.e 1st September 2000.


In his answering affidavit, 1st respondent further averred that, since inception, Chairman of the Board of the Centre for Accounting Studies had always been appointed by the owners thereof viz. Lesotho Government and Irish Government. Applicant, who was just one of several parties that had an interest in the training of prospective accountants in Lesotho, was merely invited, from time to time, by the owners of the Centre for Accounting Studies, to nominate suitable persons to serve on the Board of Management. Neither the applicant nor the council thereof ever appointed the Chairman of the Centre's Board of Management. That had always been the function of the owners of the Centre for Accounting Studies.


There could be no doubt, from the provisions of section 3 of the Accountants Act 1977, that applicant was a creature of statute. As such applicant could not do things for which it was not empowered to do by statute. I was not aware of the Accountants Act, 1977's provision which


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empowered applicant to create the Centre for Accounting Studies as its arm. Nor was any such provision brought to my attention. If it had, indeed, creator! the Centre for Accounting Studies as its arm, applicant would have acted, ultra vires, and, therefore, irregularly. Again, applicant's council was established in terms of the provisions of section 8 of the Accountants Act, 1977. Sections 9 and 10 of the Act spelt out the powers vested with the council. The sections made no provision empowering the council to appoint one of its members as Chairman of the Centre for Accounting studies. If it were true that it had appointed the 1st respondent Chairman of the Centre's Board of Management, as applicant wished the court to believe, the council would also have acted, ultra vires and, therefore, irregularly. The 2nd and the 3rd respondents, deposed to answering affidavits in which they corroborated, in matorial respects, the 1st respondents averments.


In my finding, the applicant did not create/establish the Centre for Accounting studies. Nor did the Applicant's council appoint 1st respondent the Chairman of the Centre's Board of Management, as the applicant wished the court to believe. The truth was in the averment of the 1st respondent corroborated by the 2nd and the 3rd respondents and supported by annexures "ERM10" and "ERM8" that the Centre for Accounting Studies was the property of firstly the Lesotho Government and the Government of Ireland, from its inception until 30th August 2000. From 1st September 2000 it became the sole property of the Lesotho Government. That being so, it was, in my view, reasonable that the appointment of 1st respondent as Chairman of the Board of Management of the Centre for Accounting Studies was the


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function of the owners of the centre and not the applicant or its council.


It was common cause, from the facts disclosed by affidavits, that on 31st August 2000, the 1st respondent who was admittedly the Chairman of the Centre for Accounting Studies' Board of Management, addressed to the applicants president an evenly dated letter, annexure "MRI", by which he tendered his resignation. Annexure "MRI" was copied to the Centre for Accounting Studies' Board members. However, in his answering affidavit, the 1st respondent averred that he had addressed annexure "MRI" to the applicant's president in error. He ought to have addressed it to the owners of the Centre for Accounting Studies, as the people who had appointed him the Chairman of the Board of Management. Copies thereof ought to have been sent to the Centre for Accounting Studies Board members and the President of the applicant for its information, as the body which had nominated him to serve in the Centre for Accounting Studies Board of Management.


Be that as it may, the applicant's founding affidavit went on to aver that, notwithstanding his letter of resignation "MRI" and efforts by the teaching staff and his council requesting him to move out of the premises and the administration of the Centre for Accounting studies, as per letters marked annexure "MR2", the 1st respondent refused to do so. Instead, he continued to hold himself out as the Chairman of the Centre for Accounting Studies Board of Management and make decisions regarding the administration of the centre, to the detriment of both the teaching staff and


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the students. As a result, a crisis was looming at the Centre for Accounting studies, particularly so, because the students were about to sit for their examinations.


The applicant averred, in the founding affidavit, that its council had, with the assistance of the 3rd respondent's office, commissioned the investigation of the 1st respondent about his dubious or suspect mismanagement of the Centre for Accounting Studies as self-imposed chairman of its Board of Management. Indeed, one Pheello Masoabi, Principal Crown Counsel in the office of the 3rd respondent, had been charged with the duty to carry out the investigations.


The 3rd respondent deposed, to an answering affidavit in which he conceded that he was the Attorney-General. Pheello Masoabi was the Principal Crown Counsel in his Department and, therefore, under his supervision. He denied, however, to have ever appointed Pheello Masoabi to undertake any investigations of the 1st respondent, as averred by the applicant.


It is worth noting that Pheello Masoabi filed no affidavit in support of the applicant's averment that it had commissioned him to investigate 1st respondent. Not did he submit any report to the applicant, in that regard. I am of the view that applicant was, on a balance of probabilities, simply not being honest with the court in its averment that it had commissioned Pheello Masoabi to investigate 1st respondent. The truth of the matter was that


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applicant had commissioned a certain E.M. Khali to investigate the status of the Centre for Accounting Studies and 1st respondent as Chairman of the Centre's Board of Management. It has been stated, earlier in the judgment, that applicant had not been empowered to, and, in law, could not, therefore, establish the Centre for Accounting Studies. The centre was consequently not the applicant's property. That being so, it seems to me that the applicant simply had no right to commission the investigation of the Centre for Accounting Studies. Again, I have found, earlier in the judgment, that 1st respondent had not been appointed Chairman of the Centre for Accounting Studies by applicant's council as the applicant wished the court to believe. Applicant's council had, therefore, no right to meddle in the affairs of 1st respondent as Chairman of the Centre's Board of Management. That was the business of the person who had appointed him (1st respondent).


In the applicant's averment, the 1st respondent had misled the 2nd respondent into irregularly and un-procedurally re-appointing him Chairman of the Centre for Accounting Studies Board of Management. His (1st respondent's) manoeuvring acts and the involvement of the 2nd respondent were nothing but an attempt to counteract the investigation and a desperate move to cover up. However, in his answering affidavit, 1st respondent averred that, following his letter of resignation "MRI", he was approached by the proprietors of the Centre for Accounting Studies with a request to withdraw his resignation. The reasons therefor were that the proprietors (the Irish Government and the Lesotho Government) were about to implement their long standing intention of transferring the centre to Lesotho Government


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as its sole responsibility. He was, therefore, asked to renew his willingness to continue serving as Chairman of the Centre's Board of Management so that he could assist in the transition which was due to begin in September 2000. He agreed. As proof that he was serving the Centre for Accounting Studies as Chairman of its Board of Management with the approval of the proprietors thereof, 1st respondent attached, to his answering affidavit, annexure "ERM9", a letter of 7th February 2001 addressed to the 2nd respondent by Joseph Feeny, the Acting Consul General of Ireland and annexure "ERM14", a letter of 13th March, 2001 addressed to the 1st respondent himself, by the 2nd respondent.


In annexure "ERM9" the Acting Consul General, inter alia, appraised the 2nd respondent as to who the members of the Centre for Accounting Studies Board of Management were, at the time the centre was handed over to Lesotho Government, as its sole responsibility. The members included the 1st respondent as the Chairman of the Board of Management. In annexure "ERM14", the 2nd respondent advised the 1st respondent, as the Chairman of the Board of Management, that the Government of Lesotho was in support of the existing Board of Management continuing to run/manage the Centre for Accounting studies.


It is, perhaps, worth mentioning that neither annexure "ERM9" nor annexure "ERM14" was copied to the applicant. If it were true that the Centre for Accounting Studies belonged to the applicant, as the latter wished the court to believe, one would expect the annexures to have at least been


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copied to the applicant institute, for its information. They were not.


In his answering affidavit, the 2nd respondent corroborated, in material respects, the averments made by the 1st respondent. In particular, he denied the applicant's claim that his (2nd respondent's) involvement, in the case, was brought up as a cover up and averred that the Centre for Accounting Studies, was his Ministry's responsibility inasmuch as it was a Lesotho Government's asset. His involvement, in the case, was, therefore, legitimate. Similarly, the 1st respondent, as the Chairman of the Centre's Board of Management, had a legitimate reason to interact with him and his Ministry concerning the affairs of the Centre for Accounting studies.


In his answering affidavit, the 1st respondent denied the applicant's averment that he made decisions (relating to the administration of the centre) that were detrimental to both the teaching staff and the students. He averred that decisions at the Centre for Accounting Studies were made by the Board of Management. He was only the Chairman of that Board which was accountable to the owners of the Centre for Accounting Studies for its decisions. 1st respondent further averred that, if it were true that he had made decisions detrimental to the teaching staff and the students, as alleged by the applicant, the owners of the Centre for Accounting Studies would have expressed complaints to him. They had never done so.


It was common cause that, in his answering affidavit, 1st respondent had given notice that he intended raising, at the hearing of this application,


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points in limine viz. lack of urgency and non-disclosure of material facts.

On the question of urgency, 1st respondent averred that, as far back as September 2000, he and applicant's President, Matsubane Putsoa, held a meeting, at which the latter enquired about the relationship between the Centre for Accounting Studies, its Board of Management, the Chairman thereof, the applicant, the Government of Lesotho and the Irish Government. According to him, 1st respondent explained the relationship to Matsubane Putsoa as he had already done in his answering affidavit. At the end of the meeting, Matsubane Putsoa fully understood the relationship and did not have any contrary view. In its replying affidavit, the applicant did not dispute that the meeting had taken place between Matsubane Putsoa and 1st respondent, as averred by the latter. It merely dismissed the meeting as irrelevant and of no substance. It averred that Matsuane Putsoa was, in any event, denying the averments made by 1st respondent about him.


In my view, the significance of the meeting between the applicant's President, Matsubane Putsoa, and the 1st respondent is that, as far back as September 2000, the applicant was, through its President, aware of the activities of the 1st respondent, at the Centre for Accounting Studies. That being so, the applicant could not properly dismiss the meeting as irrelevant, regard being had to the fact that it was only in May 2001 when it challenged, on urgent basis, the 1st respondent's activities or position at the Centre for Accounting Studies.


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Be that as it may, it is important to observe that the applicant's President, Matsubane Putsoa did not file any affidavit in support of the applicant's averment that he was denying the averments which the 1st respondent was making about him. The applicant's averment that Matsubane Putsoa was denying what the 1st respondent was saying about him, remained, therefore, inadmissible hearsay evidence and of no assistance to the court.


It was also not really disputed that, on 19th January 2001, the applicant was, per annexure "ERM1", informed by the Acting Director of the Centre for Accounting Studies that 1st respondent had withdrawn his letter of resignation from the Board of Management dated 31st August 2000. On 22nd January 2001 applicant made enquiries, per annexure "ERM2", from 1st respondent himself, about the latter's chairmanship at the Centre for Accounting Studies. On 24th January 2001, 1st respondent replied, per annexure "ERM3" and appraised the applicant of the correct position. Notwithstanding all that, it was only in May 2001 that the applicant instituted, on urgent basis, the present proceedings for temporary interdict, against the 1st respondent. In the premise, there was, in the contention of the respondents, no justification whatsoever, on 4th May 2001, for the applicant to suddenly snatch, ex-parte, an interim order, against 1st respondent, and without affording him the opportunity to be heard, on the ground that there was urgency in the matter. I respectfully agreed with the contention which, in my view, found support in the decision in Lesotho University Teachers and Researchers Union vs National University of Lesotho


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C. of A.(Civ) no. 13 of 1998 (unreported). In that case, the facts, disclosed by affidavits, were that the appellants had become aware of respondent's decision to freeze the car allowances on 11th December 1996. However, it was not until 23rd January 1997, i.e. some 43 days later, that appellants launched, on urgent basis, application to challenge the decision. It was held that no case of urgency had been made out as the appellants knew of the respondent's decision 43 days before launching the application. In the instant case, the 1st respondent had, as far back as September 2000, made the applicant aware, through its President, Matsubane Putsoa, of his position as Chairman of the Board of Management, at the Centre of Accounting Studies. However, applicant launched, on urgent basis, the present proceedings for an interim interdict against the 1st respondent only on 4th May 2001 i.e. over 216 days later. On the authority of the decision in Lesotho University Teachers and Researchers Union v National University of Lesotho, Supra, I found that, as applicant had known of the 1st respondent's position, as Chairman of the Board of Management at the Centre for Accounting Studies, some 216 days before launching the purported urgent application, no case of urgency had, in fact, been made out.


On the question of non-disclosure of material facts, applicant failed to disclose, in the founding affidavit, that in September 2000 its President, Matsubane Putsoa, and 1st respondent held a meeting at which the latter explained, at the request of the former, the relationship between the Centre for Accounting Studies, its Board of Management, the 1st respondent as the Chairman thereof, the applicant itself, the Irish Government and the Lesotho


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Government. Indeed, the founding affidavit, inter alia, failed to disclose annexure "ERM1", annexure "ERM2" and annexure "ERM3". In the contention of the respondents, had all those material facts been disclosed in the founding affidavit, the court would not have granted applicant the interim interdict, as it did, on 4th May 2001.


It is trite law that, in ex-parte applications, the applicant must make full disclosure of all material facts. In this regard see page 94 of the Civil Practice of the Superior Courts in South African (2nd ed.) by Herbstein and Van Winsen where the learned authors have this to say, on the issue:


"The utmost good faith must be observed by litigants making ex-parte applications in placing material facts before the court; so much so that if an order has been made upon an ex-parte application and it appears that material facts have been kept back, whether wilfully and mala fide or negligently, which might have influenced the decision of the court whether to make an order or not, the court has a discretion to set the order aside with costs on the ground of non-disclosure."


The points in limine were, in my finding, well taken. Consequently, the interim interdict granted against the 1st respondent, on 4th May 2001, was, in my discretion, discharged and the application accordingly dismissed.

COSTS

Applicant was, no doubt, aware that the facts of this application were seriously disputed. In reckless disregard of that fact, it brought the application before this court ex-parte. I found, on affidavits, that there was


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no urgency in this application which was instituted before the court, on the basis of urgency, merely to jump the queue of other cases awaiting the determination of the court. This being an application brought, ex-parte the applicant was required to show utmost good faith and make full disclosure of all material facts necessary to enable the court to make an order even where the other party had not been afforded the opportunity to be heard. In the instant case, I found that the applicant was guilty of non-disclosure of all such material facts.


In the result, I came to the conclusion that this was a fit case where the applicant should be ordered to pay costs on the attorney and client scale. It was accordingly ordered.


B.K. MOLAI

JUDGE


02/07/03


Mr. Sekake : For Applicant

Mr. Moiloa : For 1st Respondent

Mr. Letsie : For 2nd and 3rd Respondent