THE
HIGH COURT OF SWAZILAND
KHARAFA
TRADING (PTY) LIMITED
Applicant
And
ZODVWA
GCEBILE MAZIYA
DUMISANI
MAPHALALA N.O
FIRST
NATIONAL BANK OF SWAZILAND
Respondents
Coram S.B.
MAPHALALA - J
For
the Applicant MR.MOTSA
For
the Respondents MR. MDLADLA
JUDGEMENTS
(18/07/2002)
The
Background
The
applicant moved an application under a certificate of urgency on the
12th December 2001, for inter alia that the 1st and 2nd respondents
be hereby interdicted from effecting any withdrawals on any of the
1st respondent banking account pending finalisation of institution of
an action to be instituted by the applicant.
The
applicant was granted an order ex parte and a rule nisi was issued on
the 14' December 2001 in terms of prayers 1, 2, 3, 4 and 5 of the
notice of motion returnable on the 25th. January 2002. The rule has
been extended a number of times until the matter came for arguments
before me on the merits of the dispute on the 4' July 2002,
2
where
I reserved my judgement to this date. The central issue is whether or
not the said rule ought to be confirmed. Following is my judgement in
this matter.
The
Facts
The
application is based on the affidavit of one Graham Keith Mills who
is a Director of the applicant Kharafa Trading (Pty) Limited. The
respondent has filed a notice of intention to defend together with
the answering affidavit of the 1st respondent Zodvwa Gcebile
Maphalala which is further supported by the confirmatory affidavit of
her husband one Dumsani Maphalala. The applicant then filed a
replying affidavit of one Richard John Culver who is employed by
Management Services as a Business Consultant. The said Mr. Culver is
currently working with the applicant on a short-term contract to
assist the organisation's operations and accounting practices.
The
applicant's application is for the attachment of [a pre-judgment
interdict] of certain funds held by the 1st respondent in certain
accounts within the 3rd respondent's Manzini, pending an action to be
instituted by the applicant against the 1st respondent for recovery
of approximately E79, 000-00, which has been defrauded from it by the
1st respondent.
At
all material times hereto, the 1st respondent was employed as the
Depot Sales Manager of the applicant at its branch in Lomahasha. The
applicant's prime business at Lomahasha involves the sale of day old
chicks and chicken products to local farmers in that area.
The
applicant avers in its founding affidavit that from the 10th December
2001, a massive fraud within the applicant's operations at Lomahasha
was discovered. As Depot Sales Manager, the 1st respondent was
responsible for the entire operation therefore including the receipt
of money and stock. As a result of an internal audit it has been
discovered that certain stock and money although reflected as having
been received at the Lomahasha branch could not be accounted for.
3
Upon
this discovery, it is alleged by the applicant, the 1st respondent
realising that fraud has been uncovered, she simply absconded from
work and had not attended since Wednesday 12 December 2001.
The
applicant then reported the matter to the Royal Swaziland Police
(Fraud Department) and the police are at present investigating the
matter.
The
applicant has ascertained that the applicant's mother is operating a
chicken business exactly the same as that of the applicant. The
applicant avers that although it has no concrete proof therefore, it
has reason to believe that many of the applicant's day old chicks
which were for sale at its Lomahasha branch, could well have been
stolen and whittled away to the 1st respondent's mother business.
The
applicant avers at paragraphs 12, 13, 14 and 15 of the founding
affidavit of Mr. Mills facts establishing urgency.
On
the other side of the coin the 1st respondent addresses au contraire
arguments to applicant's allegations. First and foremost she contends
that the applicant was not entitled to the rule nisi issued on the
14th December 2001 as there is and has never been any need for such
an attachment. She denies in the strongest terms that she ever
defrauded the applicant. She alleges that the applicant is clearly
out to undo her image and reputation.
Her
version of events is that for no apparent reason Mr. Wills detained
her in his office on the 11th December 2001 accusing her of stealing
money. She was detained from 10.00am in the morning to 6.15pm in the
afternoon. She was only released when her husband arrived. At
paragraph 7, she gave a graphic description of how Mr. Mills
subjected her to degrading and insulting treatment. That she had
always done her job well up until the month when the applicant
constructively dismissed her.
As
to the allegation that her mother operates a chicken business that
this is indeed the position and that this fact was brought to the
knowledge of the applicant as far back as July 2001. The fact of the
matter is that on the 9th July 2001, the applicant circulated a
memorandum to the staff members. (annexurc"B").
4
The
said memorandum annexure "B" reads in extenso as follows:
MEMORANDUM
To: All
staff C/L & KT
From: Mr.
Mills
Date: 09/07/01
Re: Misappropriation
of Funds
In
the past the company did not forbid employees to be personally
involved in Poultry Production. Indeed in most cases those staff
members that did want to grown chickens of their own requested my
consent.
As
a result of misappropriation of company funds and unexplained stock
discrepancies, the company will be prohibiting all staff from
becoming personally involved in Poultry Production as well as trading
in a private capacity with any poultry inputs including the sale of
finished in whatever form.
This
measure is necessary to protect you individually from possibly being
implicated and ensuring that the company is not further exposed to
fraudulent activities.
It
is a fact that a number of staff member's families are involved in
poultry production and therefore understood that this cannot be
prohibited. In order for all staff not to be falsely implicated in
such activities all staff are requested to declare should they be
involved in any such businesses.
1. Their
personal involvement in any poultry production.
Their
personal involvement in any other type of poultry business.
2. Their
involvement whether directly or indirectly in poultry business
Through family members or the staff employee's place of residence.
Their indirect involvement in any other type of poultry business.
3. Their
either direct or indirect involvement in any other type of business
act Activities.
Presently
I am only aware of one staff member who is directly involved with
poultry production. You are therefore requested to make written
declaration to be submitted to Personnel or myself by Friday
13/07/01..."
She
responded to the memorandum and declared her mother's business to the
applicant and her involvement therein (in annexure "C").
Annexure "C" reads as follows:
5
"11th
July 2001
Ms
Zodvwa Maziya
C/O
Kharafa Trading
Mr.
Graham Mills
Kharafa
Trading
Manzini
Dear
Mr. Mills
SUBJECT:
POULTRY BUSINESS - DECLARATION
As
per your request of memo dated 9th July headed "misappropriation
of funds", I have the following declaration to make:
My
mother, Lomhlangano Maziya, a resident of Mliba, has been running a
Poultry business since last year. She houses 500 day-old chicks at a
time, right up to maturity (7 weeks) and thereafter sells them. This
is her only was of earning a living since both my father and herself
are no longer employed.
Please
note that this is not my business, all 1 used to provide her with was
expertise on how to care for them, nothing more than that. All
proceeds go towards the running of the homestead. At Kharafa we only
buy feed. Chicks are bought at SBB.
Yours
sincerely,
Z.
MAZIYA (MS)"
The
applicant replied to annexure "C" in a handwritten note on
annexure "C" to the following effect:
"Zodvwa,
Thank
you for the information. My only concern is what is wrong with our
chicken. Please request Alson to open a cash account in your mother's
name so as to record all transactions. We would like to help where we
can.
6
(signed)"
(My emphasis)"
The
1st respondent denies that any chicks were stolen. The chicks in her
mother's business have always been bought. She attaches annexure "D"
and "E". These being receipts for chicks bought by her
mother from the applicant's company.
The
1st respondent at paragraphs 11, 12, 13, 14, 15 and 16 challenges the
need for such an interdict, that the matter was urgent and that
essentially this application is an abuse of the court process.
The
Arguments by the Applicant.
It
was contended on behalf of the applicant by Mr. Motsa that in the
present case the applicant was entitled to the confirmation of the
rule nisi granted on the 14th December 2001. Mr. Motsa advanced a
number of points in support of this contention.
First,
that it is trite law that an applicant can obtain an order
restraining a person from a bank account on fear that the drawer may
attempt to withdraw the money pending the institution of action
against the drawer. For this proposition the court's attention was
directed to the case of Television and Electrical Distribution (Pty)
Ltd vs Goodwin and another 1956 (1) S.A. at 514.
Secondly,
that the question for this court to decide is whether the applicant
has satisfied the requirements of a final interdict (see Lawsa Vol.
II at page 288). On the requirements of a clear right the applicant
has made a clear case of misappropriation of funds by the 1st
respondent to the sum of E230, 280-00. The applicant delivered chicks
to her in her capacity as Depot Manager. She has not accounted for
their whereabouts of about E48, 990-00 notwithstanding that she
accepted the chicks. She was the only one who prepared stock sheets
and she received payment from the Lomahasha depot and did banking.
Mr. Motsa argued that in the case of Lockie Bros Ltd vs Pezaro 1918
W.L.D. 60 the court granted an interdict where a strong case had been
made that the respondent had conspired with an employee of the
applicant to
7
steal
10, 000-00 (ten thousand pounds) of their money and that the
respondent paid this money into his current account. In casu the 1st
respondent did not conspire with anyone, but she is the person who
received the chicks' payment and did the banking and she cannot
explain the shortages.
On
the requirement of injury actually committed Mr. Motsa submitted that
in cases of vindicatory or quasi-vindicatory actions an actual or
well-grounded apprehension or irreparable loss is presumed until the
contrary is shown (see Stern and Ruskin, NO. vs Appleson 1951 (3)
S.A. at page 813) and also the case of Hillman Bros (West Rand) (Pty)
Ltd vs Van Den Hanvel 1937 W.L.P 41). In the present case, 1st
respondent has neither granted security for the debt nor has she
shown that she will be able to satisfy the judgment if applicant
succeeds.
On
the third requirement that a final interdict will not be granted if
there is another satisfactory remedy. Mr. Motsa contended that even
where an injury may be capable of pecuniary evaluation and
compensation the court will grant an interdict, if the respondent is
a man of straw (see Lubbe vs Die Administration Grange Vrystaat 1968
(1) S.A. 111 (o). To buttress this point Mr. Motsa directed the
court's attention to paragraph 11.1 of the applicant's replying
affidavit which reads as follows:
"9
paragraph 11.1.
9.1 I
submit that there is a need for the interdict as:
9.1.1 1st
respondent has not provided applicant any other form of security to
cover its claim of E230, 000-00 against her;
9.1.2 There
is no guarantee that 1st respondent business which applicant assumes
started after she left 1st respondent's employ can cover the amount
claimed in the summons; and
9.1.3 A
person can be resident in Swaziland and be penniless hence it is not
a question of 1st respondent leaving Swaziland, and 1st respondent's
husband was merely cited for procedural reasons so he cannot be
liable for this claim".
The
Respondent's Arguments.
8
Mr.
Mdladla for the 1st respondent advanced per contra arguments. His
first salvo is that the applicant has not shown the presence of the
requirements of interdict as outlined in the celebrated case of
Setlogelo vs Setlogelo 1914 A.D. 211 at 227 viz, i) that the
applicant must alleged in his papers and prove that he has a clear
right, ii) an injury actually committed or reasonably apprehended or
an actual or threatened invasion of that right and iii) the absence
of similar protection by any other ordinary or suitable remedy. To
support this proposition Mr. Mdladla cited the work by John Mayer,
Interdicts and Related Orders at page 59.
The
second attack by Mr. Mdladla is that the applicant should especially
in the case of an ex parte application place relevant facts before
the court a fortiori, no incorrect information may be furnished. Even
if this is done carelessly and not recklessly or deliberately. The
court is entitled to discharge the rule nisi on the ground alone. For
this submission Mr. Mdladla directed the court attention to the dicta
in the case of Hall and another vs Heyns and others 1991 (1) S.A. 38.
The applicant should disclose all material facts truthfully to the
court. Failure to make disclosure which are revealed by the
respondent is fatal to an application for an interdict. Mr. Mdladla
directed the court's attention to the applicant's papers to show that
certain material facts had not been disclosed to the court when it
granted the rule nisi on the 14th December 2001.
The
Issues for Determination.
There
are essentially two matters for determination in this matter.
Firstly, whether or not there has been non-disclosure on the part of
the applicant when the rule nisi was granted, and if so what effect
does that have on the application. The second issue is whether the
applicant has satisfied the requirements for a final interdict as
outlined above.
I
shall proceed to determine the issue ad seriatim:
a) The
issue of non-disclosure.
9
Having
brought the proceedings ex parte, it is trite law that the applicant
had an obligation to the court to disclose fully the true
circumstances and facts pertaining to the application; Roper J in the
case of De Jager vs Heibrow and others 1947 (2) S.A. 419 (w) said the
following, and I quote:
"It
has been laid down, however, in numerous decisions of our court that
utmost good faith must be observed by litigants making ex parte
applications, and that all material facts must be placed before the
court (see Re: Leysdorp and Pieterburg Estates Ltd 1903 T.S. 254;
Crowley vs Crowley 1919 T.P.D. 426). If any order has been made upon
an ex parte application, and it appears that material facts have been
kept back which might have influenced the decision of court whether
to make the order or not, the court has a discretion to set aside the
order on the ground of non-disclosure (Venter vs Van Graan 1929
T.P.D. 435; Barclays Bank vs Gilfs 1931 T.P.D. 9; Hillman Bros vs Van
Den Heuvel 1977 W.L.D. 41). It is not necessary that the suppression
of the material fact shall have been wilful or malajlde" (my
emphasis).
Margo
J in the case of Cometal Nometal vs Corlana Enterprises 1981 (2) S.A.
412 expressed the same sentiments at page 414 (G - H) in the
following terms; and I quote:
"It
seems to me that, among the factors which the court will take into
account in the exercise of its discretion to grant or deny relief to
a litigant who has breached the uberima fides rule, are the extent to
which the rule has been breached, the reasons for the non-disclosure,
the extent to which the court might have been influenced by proper
disclosure in the ex parte application, the consequences, from the
point of doing justice between parties, of denying relief to the
applicant on the ex parte order, and the interest of innocent third
parties, such as minor children, for whom protection was sought in
the ex parte application"
Further,
authority can be found in the following: Herbstein at el The Civil
Practice of the Supreme Court of South Africa (4th ED) at 367; Nathan
Burnett and Brink, Uniform Rules of Court, 1977 (2nd ED) at page 58;
Spieg vs Walker 1947 (3) S.A. 499 and Stanley Matsebula vs Aaron
Mavimbela Civil Appeal No. 54/1999. that if there are any material
facts that might have influenced the court's decision and such facts
are wilfully, negligently or in bad faith withheld, the court will as
a rule set aside or rescind its earlier order.
10
In
casu, it is my considered view, that on the reading of applicant's
founding affidavit the applicant has failed to make a full and frank
disclosure of all the relevant facts which were within its knowledge
at the time the application was launched on the 14' December 2001. At
page 9 of the Book of Pleadings in applicant's founding affidavit at
paragraph 11 the following appears:
"11. I
have also ascertained that the applicant's mother is operating a
chicken business exactly the same as that of the applicant. Although
I have no concrete (sic) proof therefore. I have reason to believe
that many of the applicant's day old chicks which were for sale at
its Lomahasha branch, could well have been stolen and whittled away
to the 1" respondent's mother business" (my emphasis).
However,
this statement is in sharp contrast to what appears in the
correspondence between the applicant and the 1st respondent on the
9th July 2001, and 11th July 2001 viz, the memorandum to staff
members and 1st respondent's response thereto, respectively. I have
earlier on outlined these annexures in extenso, but what is of
particular importance is the applicant's response to annexure "C"
to the following effect:
"Zodvwa,
Thank
you for the information. My only concern is what is wrong with our
chicks. Please request Alson to open a cash account in your mother's
name so as to record all transaction. We would like to help where we
can ..."
This
is completely at variance with applicant statement at paragraph 9 of
its founding affidavit and it amount to a non-disclosure of a
material facts which might have influenced the court not to have
granted the rule nisi, on the 14th December, 2000.
The
court was given the impression when it granted the rule nisi on the
14th December 2001 that the chicks were being stolen by the 1st
respondent to stock her mother's business whereas the true position
is that there was a well-established relationship between the
applicant and the 1st respondent's mother as evidenced by annexures
"B" and "C". Further annexure "D" being
delivery notes fro the applicant to 1st respondent's mother Mavis
Maziya of Mliba show clearly that the sale of chicks was
11
done
legally and she paid in each instance. These run from pages 40 to
page 55 of the Book of Pleadings.
I
agree with Mr. Mdladla, on the strength of the dicta in the case of
Hall and another vs Heyns (supra) that this court on this ground
alone is entitled to discharge the rule nisi for non-disclosure of a
material fact. Furthermore, on this point the applicant at paragraph
10 of the founding affidavit deposed that is had ascertained that
between the time the fraud/theft was discovered to date the 1st
respondent has already withdraw substantial amounts of monies out of
her account and could well withdraw . the remaining balance at any
time. Yet the true position as reflected at paragraph 15 of the 1st
respondent's answering affidavit show clearly in annexure "G"
and "H" that in fact at the material time money was
deposited into the account and there is no sign or indication that
any monies were being withdrawn. This was a material fact if known by
the court when it granted the rule nisi it might not have granted it.
In
the instant case the applicant has not conformed to the principle of
uberima fides required in ex parte applications and the rule granted
on the 14th December 2001 ought to be discharged on this ground.
b) Requirements
for a final interdict.
For
the sake of completeness I shall proceed to consider this aspect of
the matter despite my view on (a) above which disposes of the matter.
It
would appear to me that the applicant in the present case has not
complied with the third requirement for a grant of a final interdict,
viz the absence of similar protection by any other ordinary or
suitable legal remedy (see John Mayer at 59 (supra). There has to be
in the affidavits or even a suggestion of irreparable harm in the
affidavit (see Setlogelo vs Setlogelo at page 221 (supra)). No such
averment appears ex facie the applicant's founding affidavit.
For
the above reasons the application for a final interdict ought to
fail.
12
c) The
Court Order.
In
the result, the rule nisi granted by the court on the 14th December
2001, is discharged.
The
costs to follow the event.
S.B.
MAPHALALA
JUDGE
