Henwood and Anothe v Swaziland Tobacco Cooperative and Others (2500/09) [2010] SZHC 93 (25 June 2010);

 

IN THE HIGH COURT OF SWAZILAND

 

HELD AT MBABANE                      CIV. CASE NO. 2500/09

 

In the matter between: 

 

BETRAM HENWOOD                                     1^st Applicant

 

LAZARUS MABHENGU HLOPHE                  2^ND Applicant

 

NONHLANHLA FAKUDZE                                     3^RD Applicant

 

VERSUS

 

THE SWAZILAND TOBACCO

COOPERATIVE COMPANY LIMITED            1^st Respondent

 

THE SWAZILAND TOBACCO COMPANY

(PTY) LTD                                                      2^nd Respondent

 

THE LICENSING OFFICER –

SHISELWENI DISTRICT                               3^rd Respondent

 

MATHEW KHUMALO                                    4^th Respondent

 

BERNARD NXUMALO                                   5^th Respondent

 

JANE NDZINISA                                            6^th Respondent

 

TAKHONA MAVUSO                                              7^th Respondent

 

Date of hearing: 15 June, 2010

Date of judgment: 25 June, 2010

 

Mr. Attorney S. Mndzebele for the Applicants

Mr. Attorney T.M. Mlangeni for the Respondents

 

 

 

MASUKU J.

 

 

[1]    On 13 July, 2009, following an urgent application moved by the present applicants, this Court granted an order which will be detailed in due course.  Certain portions of that Order were decreed to operate with interim effect pending the return date of a rule nisi. The question for determination is whether the said rule nisi ought to be confirmed, as the applicants contend, or as the respondents contend, it should be dismissed with costs.

 

[2]    The facts giving rise to the question for determination are the following:- The 1^st Respondent, a co-operative company, duly established in terms of the Co-operative Societies Act, 2003 is the subject of disagreements and tensions amongst its members.  These have resulted in certain applications being brought to this Court.  The present application was launched for following relief:-

1. Dispensing with the usual provisions of the rules of this Honourable Court as relate to form, service, procedures and time limits and hearing this matter as an urgent one.
2. Interdicting and / or restraining the 1^st, 2^nd and 4^th to the 7^th Respondents from unilaterally dealing with the assets of the 1^st Respondent in any manner whatsoever pending finalization of the proceedings pending before this Honourable Court under Case Nos. 1797/08 and 258/09.
3. Interdicting and / or restraining the 3^rd Respondent from entertaining the trading licence application for a filling station licence meant to proceed on the 14^th July 2009, at 9:00 am at the Nhlangano Trading Licences offices, pending the outcome of the application.
4. Setting aside the decision or purported resolution of the 1^st Respondent allowing the 2^nd Respondent to utilize the filling station premises situate at Plot 773 Nhlangano, in the Shiselweni District;
5. Alternatively to 5 hereinabove, setting aside the purported decision or resolution of the 1^st Respondent, giving the 2^nd Respondent the purported permission to use the filling station in whatever form the transaction purporting to do so was in.
6. Directing that prayers 2, 3, 4 and 5 hereinabove are to operate as a rule nisi with immediate and interim effect returnable on a date to be determined by this Honourable Court.

 

[3]    The matter served before Court on 13 May, 2009 and this Court granted the application as prayed, inter alia:-

 

1.     As concerns prayers 1, 2 and 3 of the Notice of Motion dated the 13^th July 2009:

1.1   The provisions of rules of this Honourable Court as relate to form, service and time limits be and are hereby dispensed with;

1.2   The Notice of Intention to Oppose in relation to these prayers is to be filed by 09:00 am on Tuesday, the 14^th July, 2009;

1.3.  The 1^st, 2^nd and 4^th Respondents, be and are hereby interdicted and restrained from unilaterally dealing with the assets of the 1^st Respondent in any manner whatsoever pending finalization of the proceedings before this Honourable Court under case number 1797/08 and 258/09;

1.4   The 3^rd Respondent be and is hereby interdicted from entertaining the trading licence application for a Filling Station Licence meant to proceed on the 14^th July, 2009 at the Nhlangano Trading Licence Offices pending the outcome of this application;

1.5   Orders 1.1, 1.2 and 1.3 herein are to operate as a rule nisi with immediate and interim effect returnable on the 24^th July 2009 with the Answering Affidavit having to be filed by noon on Thursday, the 16^th July 2009.

 

2.     As concerns paragraphs 4, 5 and 7 of the Notice of Motion dated the 13^th July, 2009:

2.1   the Notice of Intention to Oppose in relation to these prayers is to be filed by noon on Thursday, the 16^th July, 2009;

2.2.  the Application for Review as sought in terms of prayers 4 and 5 of the said Notice of Motion is to be heard on the 31^st July 2009 at 9:30am;

2.3   the Respondents be and are hereby ordered to file their opposing affidavits in respect of the said prayers by noon on Thursday, the 23^rd July, 2009.

 

[4]    The Respondents anticipated the return date of the rule nisi and in that vein, raised certain points of law by virtue of which the Court was implored to discharge the rule with costs.  I shall deal with these points of law presently but not before dealing with one issue of major concern.

 

[5]    A question may justifiably arise as to whether this was a proper case in which the respondents were entitled to anticipate the return date of the rule nisi.  This question arises chiefly because Rule 6 (22), which governs matters of anticipation of the return date, stipulates the following:-

 

“Any person against whom an order is granted ex parte may anticipate the return date upon delivery of not less then twenty-four hours’ notice.”

 

 

[6]    It is clear from the papers filed of record that the urgent application was prepared on 13 May, 2009.  The respondents contend that they were served with same per the affidavit of the 5^th Respondent, at 16:05 hours.  The notice of motion indicates that the matter was to be heard at 1600 hours, meaning that when the respondents were served, the matter would already have been heard.

 

[7]    It is therefore clear that although this was not meant to be an ex parte applicationstrictu censu, it was for all intents and purposes ex parte for the reason that the re-designing of the Rules relating to notice, in particular, was such that the respondents were denied their right to affectively access the Court before any relief could be granted against them.  This is more so considering that the respondents are all resident in the Shiselweni District, more than 80 Kilometres from this Court’s seat.  The 3^rd Respondent, in particular, has its lawyers, being the Attorney-General’s Chambers, only in Mbabane.  These are issues that should have been factored in the redesigning of the Rules relating to notice.  In this regard, the Attorney-General ought to have been cited and served with the papers connected to the 3^rd respondent, in terms of section 3 of the Government Liabilities Act, 1967. This was evidently not done.

 

[8]    I have previously expressed grave concern regarding some applicants in matters of urgency, seeking immediate redress from this Court, often with interim effect. As often happens, the rights of respondents, even in matters that are not ex parte in nature, are literally run roughshod over.  In Lisa Evans v Gareth Evans and Another Case No. 1470/09 at page 14-15, [paras [16] and [17], I stated the following in the cyclostyled  judgment:-

 

“16. That finding in the Applicant’s favour not withstanding, it is my considered view that although urgency is established on the papers, a proper balance necessarily has to be struck by any applicant in redesigning the Rules relating to the time limits so to speak, between that applicant obtaining the urgent relief he or she seeks in order to forestall any damage, injury or prejudice to him or her on the one hand, and the right of the respondent to adequate notice in the circumstances, so as to consider the application, instruct an attorney (who depending on the circumstances, complexity and importance of the latter, may have to instruct Counsel) who can adequately prepare to fulfill the twin solemn duties to his client and the Court.

 

[17]  The present practice, where respondents are routinely given little or no notice or in any event an unreasonable length of time to deal with urgent matters, is obnoxious and certainly has a negative effect on their right to access the Court and to meaningfully exercise the right they have at law to be heard.”

 

[9]    It is abundantly obvious herein that the respondents were served with the papers after the time stipulated for the hearing had already passed.  To that extent, it would appear, the stables were locked after the horses had already bolted.  Residing in Nhlangano as they do and to the Applicant’s knowledge, with their attorneys of record in Manzini, there was no prospect whatsoever of them finding their attorney in good time and instructing him fully to represent them.  This is certainly odious and a serious negation of the full effective and beneficial of the principle and audi alteram partem.

 

[10]  In the peculiar circumstances of this case where the papers are served on the respondents after the time stipulated for the hearing of the urgent application, there is no reason in law, logic or common sense, as to why that matter cannot be treated virtually as having been ex parte, thereby entitling the aggrieved respondents, particularly considering that orders adverse to the interests had been granted with interim effect, to anticipate the return date of the rule nisi.  The respondents, I find, were perfectly justified in anticipating  the return date, although the hearing took place many months after the notice to anticipate the return date had been issued.  This is a regrettable episode that points to an urgent need to deal with some of these matters in a speedy and efficient fashion, considering the adage that justice delayed is justice denied.

 

[11]  I could do well in closing this issue by making reference to Knox D’arcy Ltd And Others v Jamieson And Others 1994 (3) S.A. 700, where Stegmann J. made the following important observations regarding making orders in such and related matters at 707 I-708 B-D:-

 

“The making of an order which affects an intended defendant’s rights, in secret, in haste, and without the intended defendant having   had any opportunity of being heard, is grossly undesirable and is contrary to fundamental principles of justice. It can lead to serious abuses and oppressive orders which may prejudice an intended defendant in various ways, including some ways that may not be foreseeable. The exercise of such a discretion can therefore never be allowed to develop into a routine or standard practice. . . The exercise of such powers must be attended due caution; with all practical safeguards against abuse; and with a careful attempt to visualize the ways in which the order may prove to be needlessly oppressive to the intended defendant. Consideration should also be given to ways in which the order may interfere with rights and obligations of third parties such as banks or other debtors of the intended defendant, or other custodians of the intended defendant’s assets. Both the oppressiveness of the order to the intended defendant and its interference with the rights and obligations of third parties must be kept to the minimum that is necessary in order to achieve the objectives of the anti-dissipation interdict.”

 

 

[11]  At this juncture, I turn to consider the points of law raised by the respondents and by which this Court was urged to discharge the rule nisi in question. The unfairness of the granting of the interim relief in the circumstances where the respondents were served after the stipulated time and an adverse order with interim effect was granted against them, has been dealt with above. It was the respondents contention that this very reason constitutes good and sufficient grounds for the discharge of the rule nisi.  Mr. Mndzebele fairly and correctly conceded this in my view.  I shall say no more of this issue.

 

        Propriety of interdicting the 3^rd Respondent from performance of statutory duties.

 

 

[12]  In his spirited oral address, Mr. Mlangeni, submitted that the Court erred in granting interim injunctive relief precluding the 3^rd respondent from performing his functions, namely adjudicating on a licence application in respect of the 2^nd Respondent. Central to the determination of this issue are the grounds upon which the order sought in this regard was predicted.

 

[13]  At paragraphs 19, 24, 26 read conjunctively it would appear that the applicants saw an advertisement in a local newspaper for the grant of a trading licence in respect of the 2^nd Respondent but which it appears would operate on the 1^st Respondent’s premises.  This inculcated a fear that the respondents were desirous of illicitly transferring the 1^st respondent’s property to the 2^nd respondent.  Efforts to get further particulars regarding the licence application from the 3^rd respondent proved futile because the latter refused to hand over the information required by the applicants on the grounds that same was confidential.

 

[14]  The applicants further state at para 26 that they “have reason to believe that their application will not be heard fairly given the conduct of the 3^rd respondent in refusing them access to the application and its contents but insists that they must file their objection with which he was to deal, which indicates that he was taking sides and expected their objections to fail as they would not be informed.  To this extent a reasonable apprehension has been created on the Applicants to object to have the trading license concerned dealt with by Mr. Magongo as he exhibited bias in his aforesaid conduct,” they concluded.

 

[15]  Would such an apprehension of bias, reasonable or otherwise, form the successful interdict even on an interim basis, of the 3^rd Respondent from performing his official duties? Did the interdict cure the complaints leveled against the 3^rd respondent, pending whatever substantial relief was sought by the applicant? I must hasten to add that though complaining that they were not privy to the contents of the application, save what was published in the newspaper, the applicants did, however, file a letter of objection which runs into some three pages. This letter is not dated.

 

[16]  In the first place, I am not aware if in terms of the relevant law, the applicants are entitled to peruse or have access to the files maintained by the 3^rd respondent.  If they were, and were denied access thereto, then, it would seem to me that they should have applied for an order staying the licence application hearing, pending the outcome of a hearing for an order by this Court or other competent and relevant body, granting the applicants the access they craved.  This was not done.

 

[17]  Second, I will not seek to comment on the reasonableness of the bias alleged against the 3^rd respondent, save that the allegations appear tenuous. If they had a reasonable apprehension that the 3^rd respondent was likely to be or was overtly biased in favour of the respondents, then they had a right to move an application before him, for his recusal from presiding over the application hearing.  As it is, the 3^rd respondent was judged unheard and he was never at any stage afforded the opportunity to say anything regarding the allegations of bias, which are serious and not to be lightly made.

 

[18]  If indeed the allegations of bias were properly laid in line with a Full Bench judgment of this court in StanleyW. Sapire v The Minister of Justice and Constitutional Affairs and Another Case No.        /2002 and the applicants were satisfied that he was wrong in his decision in to proceed with the hearing, only then would a proper case for staying the hearing pending appeal or review of that decision be made.  This course was also not followed. Mr. Mndzebele, again fairly and correctly, did not support the grant of the relief of the relief with interim effect in this regard.

 

[19]  It was Mr. Mlangeni’s contention that in view of the above and particularly considering that the applicants had remedies in terms of the Trading Licences Order, 1975, which include a right to appeal to the Minister concerned, and the common law powers of review exercised by this Court, it is clear that the applicants did have a suitable alternative remedy to the granting of an interdict. This contention is, in my view, correctly made and should carry the day in the circumstances, considering that an interdict is granted where certain requisites are, including a prima facie right though open to some doubt; no alternative remedy, irreparable harm, and the balance of convenience favouring the grant of the interdict, clearly shown to the Court’s satisfaction. See C.B. Prest, Interlocutory Interdicts, p 55.

 

[20]  It would not be out of place to comment briefly on the order granted by this Court, where it interdicted the respondents from “unilaterally dealing” with unspecified assets of the 1^st Respondent.  I commented thereon in my previous judgment under Case No. 3310/09, between the same parties which I delivered on 10 May, 2010.  I should just mention en passant that purporting to act in line with the prohibitions regarding “unilaterally dealing” with the 1^st respondent’s property, the applicants obtained relief which was way outside the four corners of that order.  These included freezing of certain of the 1^st respondents accounts when no such order was granted, let alone considering the fact the relevant papers were not served on the respondents and the banks concerned.  This is indeed regrettable.

 

Reviewability of the 1^st Respondent’s Decision

 

[21]  Another attack ferociously launched by Mr. Mlangeni against the interim relief granted, appertained to this Court’s powers to review a decision made by a limited liability company.  He contended that the scope of this Court’s powers of review is not so wide as to encompass the power to review decisions of private bodies.

 

 

[22]  In this regard, this Court was pertinently referred to Cronje v United Cricket Board of South Africa 2001 (4) S.A. 1361.  In that case the applicant, who was a renowned cricketer, was banned by the respondent for misconduct relating to match-fixing, from participating in its activities on and he sought to review this decision.  At page 1375 B-F, Kirk-Cohen J. had this to say:

 

“The audi alteram partem rule ordinarily applies only to public bodies in the exercise of their public powers.  Thus in South African Roads Board v Johannesburg City Council 1991 (4) SA 1 (A) at 10 G-I, the Appellate Division stated :

 

‘A rule of natural justice …comes into play whenever a statute empowers a public official or body to do an act or give a decision prejudicially affecting an individual in his liberty or property or existing rights, or whenever such an individual has a legitimate expectation entitling him to a hearing, unless the statute expressly or by necessary implication indicates to the contrary….’

               

The respondent is not a public body.  It is a voluntary association wholly unconnected to the state.  It has its origin in contract and not in statute.  Its powers are contractual and not statutory.  Its functions are private and not public.  It is privately and not publicly funded… The conduct of private bodies, such as the respondent, is ordinarily governed by private and not public law.  It does not exercise public power and its conduct is accordingly not subject to the public law rules of natural justice.”

 

[23]  The 1^st respondent is a limited liability company.  It is  thus a private entity and would, in its memorandum and articles of association, the latter in particular, have procedures for dealing with any grievances. It is in exceptional circumstances e.g. fraud on the minority that the derivative action is allowed.  Ordinarily the Court does not exercise its public law powers of review over the actions and decisions of private bodies like the 1^st respondent.  This to me is a sound legal proposition that should obtain in this matter.  Mr. Mndzebele also conceded that Mr. Mlangeni’s legal submissions in this regard, were unimpeachable.  They must therefore stand, thereby leading to the conclusion that this Court could not correctly seek to review the 1^st respondent’s internal actions and decisions.

 

[24]  As correctly observed by the parties, it would appear that the order relating to “dealing” with the 1^st Respondent’s property, was in the nature of an anti-dissipation interdict.  Mr. Mlangeni, without much emphasis thereon, indicated that the said order had not been served on 48 other members of the 1^st respondent.  Those members, he further submitted, had not, in addition, been cited as parties.  Mr. Mndzebele’s quick response thereto, was to refer to the works of Herbstein and van Winsen, The Civil Practice of the Supreme Court of South Africa, 4^th Ed, 1997 at p 1089, where the learned authors state that “it does not necessarily follow, however, that third parties whose rights and obligations are affected by the interdict sought must invariably be joined as parties to the application : provided that adequate steps are taken in the framing of the order to guard against prejudice to the interests of third parties, the court will not insist that those parties be joined.”

 

[25]  Mr. Mlangeni retaliated in like manner, by referring to an earlier portion on the same page, where the learned authors say:-

 

“The grant of an anti-dissipation is discretionary, and may be obtained ex parte and in camera.  But, since this is an invasive remedy that can cause severe prejudice to the respondent and possibly to third parties, due caution should be exercised by a court in granting such an order. All practical safe-guards against abuse should be built in and a careful attempt should be made to visualize ways in which the order may prove needlessly oppressive to the intended defendant.  The oppressiveness of the order to the defendant and its interference with the rights and obligations of third parties must be kept to the minimum necessary in order to achieve the objectives of the anti-dissipation interdict.”

 

[26]  It will be clear from the foregoing that the Court should be astute where it is inclined to issue an anti-dissipation interdict, particularly where same is ex parte (as this was the case though otherwise appareled) to ensure that respondent’s rights are carefully factored into the order and any prejudice likely to eventuate, is kept to a bare minimum.  In this regard, it would appear tome, the Court has engage in a balancing exercise, leaning in favour of the grant of the order (where circumstances so dictate), without unduly and oppressively negating the respondent’s rights and interests.

 

[27]  As earlier observed, these were two unfortunate occurrences regarding the Court’s order regarding the anti-dissipation aspect viz the order was not sufficiently precise in its terms regarding the property in respect of which the Order applied.  Second, and this arises naturally from the first, the scope of the order was unduly extended by the applicants to cover terrain not contemplated or made reference to in the papers e.g. the freezing of banking accounts which was admitted and later ameliorated by a consent order.  I need not consider this issue in any deeper detail in this judgment.

 

[28]  In view of all the aforegoing, it would appear to me that the points of law pertinently raised by the respondents are well founded and should carry the day.  On a proper conspectus of all the aforegoing issues, it becomes abundantly clear that the rule nisi ought not to have been granted in the manner it was, particularly with interim effect.  The contentious of the respondents cast a totally different complexion on the entire application.

 

[29]  In the premises, I issue the following order:

 

29.1The rule nisi issued by this Court on 13 May, 2009, be and is hereby discharged.

 

29.2The applicants be and are hereby ordered to pay the costs of the application jointly and severally, the one paying the other being absolved.

 

• Such costs are ordered to be levied on the ordinary scale.

 

[30]  I have granted costs on the ordinary scale because there is no specific prayer for punitive costs and no allegations in support of such a higher scale are made by the respondents in their papers.

       

DELIVERED IN OPEN COURT IN MBABANE ON THIS THE 25^TH DAY OF JUNE, 2010.

 

 

______________________

T.S. MASUKU

JUSTICE OF THE HIGH COURT

 

Messrs. Magagula & Hlophe for the Applicants.

Messrs. Mlangeni & Co. for the Respondents.