Maphike v Pierre-Yves Sachet (C of A (CIV) 4 of 2019) [2019] LSCA 35 (1 November 2019)

Key Facts

Issues

• The court analyzed the contempt application, noting that the interim order was not validly served on all respondents (e.g., Total SA, Sachet, Tubela) and that the respondents' actions did not constitute wilful non-compliance. The deputy sheriff's attachment of property exceeded the order's scope, and no contempt could be established without proper service and evidence of mala fides.
• The case addressed whether attaching property (e.g., Motso'ene Road and Maputsoe Filling Station) of Total Lesotho (an incola) and third parties was permissible under Rule 6 of the High Court Rules. The court clarified that attachment to found jurisdiction is only valid for peregrines and must not prejudice incolae. The sale of shares by Total SA to Puma Energy did not transfer asset ownership, rendering the attachment invalid.
• The court evaluated the propriety of awarding costs on an 'attorney and own client' scale due to the appellant's procedural errors, including misjoinder, failure to comply with service rules, and conceptual misunderstandings of company law. The appeal was deemed a 'comedy of errors,' warranting sanctions to deter future abuses of judicial processes.
• The court examined the validity of an interim ex parte order issued by MAKARA J, which included attaching property and issuing interdicts. Key issues included the judge's failure to properly consider jurisdictional boundaries, the legality of attaching property belonging to third parties, and the competence of the order against peregrine respondents. The order compounded confusion by conflating the Labour Court's existing jurisdiction and improperly directing relief against parties not involved in the litigation.
• The Rule 45 application sought to correct patent errors in the first judgment, such as failing to address the contempt application and counter-application. The court affirmed the High Court's authority to supplement its judgment under Rule 45, even after an appeal was filed, to rectify omissions and ambiguities in the original order.

Holdings

• The court awarded costs to the respondents on the attorney and own client scale for the main application (founding jurisdiction and interdict), contempt application, and counter-application. These costs were justified by the appellant's abuse of process, conceptual errors, and failure to meet procedural requirements. Additional costs related to the Rule 45 application were awarded on the ordinary scale.
• The Court of Appeal dismissed the appellant's appeal against the High Court's judgments, concluding that the appellant's legal and procedural errors (e.g., misapplying company law principles, failing to comply with service rules, and incorrect attachment of property) justified the lower court's decisions. The appeal was also dismissed due to the High Court's proper handling of Rule 45 applications to correct omissions and errors in the first judgment.
• The court dismissed the contempt application, as the respondents were not in contempt due to non-compliance with service requirements (e.g., improper service on peregrini parties) and lack of proper evidence of wilful disobedience. The interim order's ambiguity and the deputy sheriff's irregular actions further invalidated the contempt claim.

Remedies

• The first judgment discharged the rule nisi and the contempt order, but this was later corrected in the second judgment as no contempt order was actually granted.
• The counter-application to stay and set aside the attachment was granted with costs, as the attachment was deemed invalid and not in compliance with court rules.
• The main application for jurisdiction was dismissed with costs by the High Court in the second judgment, as it was found to be improperly filed and lacked valid grounds.
• The Court of Appeal dismissed the appeal. The appellant was ordered to pay the respondents' costs in the court a quo on the attorney and own client scale for the main application, contempt, and counter-application, and on the ordinary scale for the Rule 45 application.
• The contempt application was dismissed with costs, as the respondents were not found in contempt due to lack of proper service and other procedural issues.
• The court granted interim relief including attachment of property at Motso'ene Road Maseru and Maputsoe Filling Station, prohibited removal/repatriation of property, interdicted transferring ownership of assets, prohibited Puma Energy from receiving asset transfers, and directed Liphoto to hand over property to the Registrar pending finalization of the application and the Labour Court review.
• The court ruled that the respondents should not bear the deputy sheriff's costs for the attachment, as the attachment was irregular and not properly served.

Legal Principles

• The court emphasized that a company is a separate legal entity from its shareholders, and thus, the property of the company cannot be transferred by its shareholders. This principle was central to dismissing the appellant's claims against Total SA and Puma Energy for repatriating or transferring the company's assets.
• The judgment highlighted procedural failures in the ex parte application, including non-compliance with Rule 6 of the High Court Rules regarding service of process on peregrini (foreign entities) and the absence of edictal citation. These procedural deficiencies invalidated the interim relief sought.

Precedent Name

• Tanki Mponye v Total Lesotho (Pty)
• City Capital SA Property Holdings Ltd v Chavonnes Badenhorst St Clair Cooper & Others
• Salomon v Salomon & Co

Cited Statute

Judge Name

• Chinhenho
• Mtshiya
• Damaseb

Passage Text

• The result was a thoroughly scrambled egg. Care must be taken by the courts in this jurisdiction not to grant interim reliefs without closely considering the issues and ramifications of the ensuing order.
• The court concluded that the learned judge ably and properly dealt with the Rule 45 application and correctly dismissed the contempt application and counter-application.
• It is trite that a company is a legal entity distinct from its shareholders. It has rights and liabilities of its own, separate from those of its shareholders. Its property is its own and not that of its shareholders.