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SWAZI MTN LIMITED V SPTC _ ELIJAH ZWANE

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SWAZI MTN LIMITED V SPTC _ ELIJAH ZWANE Powered By Docstoc
					            IN THE SUPREME COURT OF SWAZILAND


HELD AT MBABANE                       CIVIL APPEAL CASE
                                      NO. 19/2011

In the matter between:

Swazi MTN Limited                     1st Appellant
MTN International (Pty) Ltd           2nd Appellant
Mobile Telephone Networks             3rd Appellant
Swazi Empowerment Limited             4th Appellant

and

Swaziland Posts & Telecommunication
Corporation                           1st Respondent
Elijah Zwane                          2nd Respondent

Coram                :                J.G. Foxcroft
                                      A.M. Ebrahim
                                      S. A. Moore

For The Appellants                    J.J. Gauntlett SC
                                      F.B. Pelser

For The Respondents                   W. Klevansky SC
                                      P.E. Flynn


Heard                :                20th May 2011
Delivered            :                31st May 2011
                                   SUMMARY




Application for interim relief – Application withdrawn following agreement which
was made an Order of Court – Whether Court considered application before it –
Government of Swaziland not a contracting party – Matters in dispute still
unresolved – Outstanding disputes to be resolved by Arbitration in terms of Joint
Venture Agreement – Respondents acting in defiance of Court Order – Costs
awarded on Attorney-and-Client scale.




1
                            JUDGMENT
__________________________________________________________________

MOORE JA

OPENING

[1]   This matter is regarded as urgent by all parties concerned. It

      reached the roll for the month of May 2011 by way of an order

      of the Honourable Chief Justice Ramodibedi dated 4th May

      2011 under which it was directed by consent that the appeal

      be enrolled for hearing on the 20th May 2011. There was no

      order as to costs.



      BACKGROUND



[2]   In an urgent application instituted on the 20th May 2010

      under Case Number 1896/2010 (“the first application”) the

      Appellants sought an interim order interdicting the First

      Respondent herein from providing or rolling out any fixed

      wireless and/or mobile network services using its Next

      Generation Network (“NGN”) and/or Fixed Wireless Solution in

2
      competition with the First Appellant (Swazi MTN) pending the

      resolution of Arbitration proceedings to be instituted by Swazi

      MTN. Those proceedings were withdrawn under the terms of

      the Agreement which was made an Order of Court dated 4th

      June 2010.



      THE PARTIES



[3]   The parties to the controversy before us have been described

      in the affidavit of Ambrose Dlamini The Chief Executive Officer

      of   the    1st   Appellant.    It    should    be    observed   that   the

      Government of Swaziland was not a party to the Joint Venture

      Agreement nor was it a party to the Appeal.


      THE APPEAL



[4]   The grounds of appeal were fully set out in the Notice of
      Appeal. They are that the learned Judge:


            1. Erred in not granting the Application to Compel the
                 Respondents     to        comply    with   the   Agreement    of
                 Settlement which was made an Order of the Court a
                 quo on 4 June 2010 (the Consent Order).
3
    2. Erred by dismissing the Application directing the
      Respondents to comply with the Consent Order.


    3. Misdirected himself and committed an irregularity by
      deciding another Application that was not before him
      for    decision      and   had   been     withdrawn      by     the
      Appellants and the withdrawal made an Order of
      Court, in the course of deciding the Application to
      Compel compliance with the Consent Order.


    4. By deciding an Application that was not before him
      took    into    account     irrelevant        considerations    not
      germane to the issues before him.


    5. Erred in not holding that the matter before him
      concerned       the   interpretation      of    the   Settlement
      Agreement and the Consent Order dated 4 June
      2010,       namely     whether    the     Respondents          were
      violating      the    undertakings       in     the   Settlement
      Agreement which was made an Order of Court.


    6. Erred in not holding that on a proper interpretation of
      the Consent order and having regard to the rights of
      the parties under the Joint Venture Agreement and the
      surrounding circumstances, the Respondents were


4
      violating the undertakings made in the Settlement
      Agreement.


    7. Erred by finding that there were no longer any
      arbitrable issue between the parties as the 1st
      Respondent is no longer a Controlling Shareholder in
      the     1st   Appellant       and    a    Regulator     of    the
      Telecommunications in Swaziland.


    8. Erred by not finding that the 1st Respondent’s
      contention that it is no longer a Shareholder of the 1st
      Appellant is disputed by the Appellants, having
      regard to the fact the 1st Respondent can only exit as
      a     Shareholder     in     terms   of   the   Joint   Venture
      Agreement.


    9. Erred by not holding that since the parties had agreed
      that by resolving the conflict of interest arising from
      the    1st    Respondent’s       shareholding     in    the   1st
      Appellant       and    its     position    as    Regulator     of
      telecommunications, it was necessary that the parties
      agree to the terms of the 1st Respondent’s exit as a
      Shareholder and the delegation of its Regulatory
      Authority as part of the dispute resolution process and
      not to unilaterally declare the dispute resolved as the
      1st Respondent did.


5
    10. Erred by holding that the dispute between the
      parties has been resolved when as a matter of fact
      there   still   existed   a   dispute   regarding   the   1st
      Respondent’s shareholding in the 1st Appellant and
      the terms and conditions of the delegation of the 1st
      Respondent’s Regulatory Powers.


    11. Erred by holding that since the dispute has been
      resolved, “the basis of the Court Order, being interim
      in nature has fallen away”, and that as a result there
      is no basis for holding as the Appellants pray, that the
      Respondents are acting in breach of the Joint Venture
      Agreement and the Court Order.


    12. Erred by not finding that the parties had not
      resolved    the   dispute     between   them,   hence     the
      Appellants’ Application for an Order to Compel the
      Respondents to comply with the Consent Order.


    13. Erred in deciding matters that are not within his
      jurisdiction such as the issue of ownership of the 1st
      Respondent’s shares in the 1st Appellant which is a
      matter that may only be decided by an Arbitrator
      appointed in terms of the Arbitration Clause 27 of the
      Joint Venture Agreement.




6
    14. Erred in not finding that he only had jurisdiction to
      grant interim relief pending resolution of matters in
      dispute by alternative dispute resolution procedures in
      terms of Clause 27 of the Joint Venture Agreement,
      and not to decide the merits of the dispute.


    15. Erred by holding that the Government is a beneficial
      owner of the 1st Respondent’s shares in the 1st
      Appellant and that the 1st Respondent was merely a
      nominee    holding    the   shares     on   behalf   of   the
      Government, despite evidence by the Appellants that
      they contracted with the 1st Respondent as principal
      and not as agent and dealt with it as such throughout
      their relationship.


    16. Erred by holding that the disposal of shares in the
      1st Appellant could be dealt with in any manner other
      than as set out in Clause 11 of the Joint Venture
      Agreement.


    17. Erred in not finding that a company in law only
      recognises its registered Shareholders.


    18. Erred in not finding that there was not admissible
      evidence     to   support   the      allegation   that    the
      Government was a beneficial shareholder and the 1st


7
             Respondent merely a nominee holding the shares on
             behalf of Government.


           19. Erred in not finding that the terms of a written
             contract cannot be contradicted by extrinsic evidence
             outside the contract and that the legal notices
             purporting to declare the 1st Respondent an agent of
             Government had no legal effect and could not vary the
             Joint Venture Agreement which is the exclusive
             memorial of the Agreement between the Appellants
             and the 1st Respondent.


           20. Erred in not finding that the relationship between
             the Appellants and the Respondents is governed by
             the Joint Venture Agreement and that a Court of Law
             may only interpret and enforce the terms of the
             Agreement and may not contradict its terms by other
             evidence   other   than   what   is   contained   in   the
             Agreement.


[5]   The grounds of the appeal were reinforced by written Heads of
      Argument and oral submissions.          As is their right, the
      Respondents also produced written Heads of Argument
      supported by an ample oral presentation in Court.


[6]   It is common cause that an application instituted by the
      Appellant on the 20th May 2010 under Case No. 1896/2010,
8
      the first application, was withdrawn and settled in terms of an
      agreement to be made an Court Order on the 4 June 2010 the
      Agreement of Settlement.          The parties undertook, somewhat
      optimistically, to endeavour to resolve the dispute within a
      period of two (2) weeks “from the date this Agreement is made
      an Order of Court.” The First Respondent in both applications
      undertook that, pending finalization of arbitration proceedings
      to   be   submitted       in   terms     of   the     JOINT       VENTURE
      AGREEMENT, it shall:


                 3.1.1 “cease    marketing   and advertising    the   Fixed   Wireless
                       component of its NGN Network;
                 3.1.2 refrain from connecting new customers to its Fixed Wireless
                       component of its NGN Network;
                 3.2   The Respondent further undertakes to provide to the
                       Applicants an auditable system which will ensure that there
                       are no additional connections from date of this Agreement.”



[7]   It was clearly within the parties‟ contemplation that publicity
      was a factor capable of having an effect upon the dispute
      between them. Accordingly, they undertook that “none of the
      parties shall be entitled to make any public announcement or
      statement regarding this Agreement, the dispute between them
      and any issue which is a subject of the Court proceedings
      without the prior consent of the other parties before making
      such public announcement or statement.” Catering for the
      fallibility of human nature the signatories agreed that:


                 “Should any party breach the provisions of this Agreement, all of
9
                     which are material, the aggrieved party shall in addition to any
                     other rights it may have in law, be entitled to enforce the provisions
                     of this Agreement as if it were a Judgment of the Court.”

[8]   That Agreement of Settlement was duly made an Order of
      Court.        As such it was clothed with the full force and effect of
      a Court Order which obliged the parties concerned to comply
      with its terms.


[9]   The parties did not reach agreement as they had hoped. They
      could not see eye to eye on a number of issues. No arbitration
      proceedings were launched by any of the parties. Something
      of a stalemate was then reached. The Appellants again took
      action.        They brought a second application on the 18th
      February 2011 again under Case No. 1896/2010 seeking an
      order in the following essential terms.


           “3.       Directing the Respondents to comply with the Order of this
                     Honourable Court dated 4 June, 2010, pending the resolution of the
                     dispute between the parties or the final determination of the dispute
                     by Arbitration. The Respondents are ordered to forthwith cease and
                     desist from:


                     3.1    Marketing and advertising the Fixed Wireless Component of
                            its NGN Network;
                     3.2    Connecting new customers to the Fixed Wireless Component
                            of its NGN Network;


               4.    In the event of the Respondents failing to comply with the Order
                     referred to in prayer 3 above within two (2) days from the date of
                     issue of that Order, the 2nd Respondent be committed to gaol for a
                     period of 60 days for Contempt of Court.
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               5.      The Respondents jointly and severally pay the costs of this
                       Application on the Attorney and client scale;


              6.    Granting such further and alternative relief as the Court may deem
                   fit.”


[10] It is against the judgment on this application that the
      Appellants have appealed. The Judge a quo dismissed what
      he called “both the main and interlocutory applications.” The
      two applications to which the Judge was referring were the
      applications instituted by the Appellants before the Court a
      quo on the 20th May 2010 – See paragraphs [1] and [75] of the
      judgment – and the one where “on the 2nd of March 2011 the
      First Applicant instituted an urgent interlocutory application
      against the First and Second Respondents for an Order
      directing them to comply with the Order of this Court issued
      on the 4th June 2010 pending the resolution of the dispute
      between them or the final determination of the dispute by
      arbitration.” See paragraph [45] of the judgment. There is no
      reference in the judgment to the application made on the 18th
      February 2011.


      THE FIRST RESPONDENT


[11   First          Respondent,            the       Swaziland        Posts     and
      Telecommunications Corporation is a creature of statute
      having        been      established       by    the    Swaziland   Posts   and
      Telecommunications Corporation Act, 1980 which commenced
11
     on the 1st April 1986.         Section 3 (2) of the Act enables the
     Corporation – a body corporate with perpetual succession and
     a common seal – to sue and be sued in its corporate name and
     to acquire, hold and dispose of moveable and immovable
     property for the purposes of the Corporation. The Powers and
     Functions of the Corporation are set out in Part III of the Act.
     Of importance to this case are the powers conferred by Section
     13 and particularly the power given by Subsection (2) (a) of
     that Section “to enter into such contracts as may be necessary
     for the purposes of the Corporation or otherwise for carrying
     into effect the provisions of the Act.”


[12] Section 4 provides for a Board of Directors of the Corporation
     and specifies its composition. Section 5 sets out the powers of
     the Minister and Section 6 the powers of the Board.                       The
     Minister may:

          “(a)   give directions of a general nature to the Board relating to the
                 operation of the undertaking of the Corporation and the Corporation
                 shall comply with such directions.”


[13] The phrase “directions of a general nature” is an imprecise and
     nebulous one: but the corporation is nevertheless required to
     comply with such directions.              The Appellants submit that
     “Board members are clearly under a fiduciary duty to the
     Corporation itself.” I agree. The Appellant has highlighted the
     following Sections of the Act:


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                  “(i)    Section 13 (2) (m) which authorises the Corporation “to hold
                          shares in any other corporation and to establish or acquire
                          any Subsidiary Corporation.”


                  (ii)    Sections 101 and 102 which specifically provide for the
                          vesting of assets acquired by the Corporation in the
                          Corporation itself.




                  (iii)   Sections 13 (1) (f) and (2) (i) and Section 99 which expressly
                          empower the Corporation, subject to Ministerial approval
                          where required, to act as an agent.


[14] Counsel for the Respondents drew attention to Section 115 of
     the Act which empowers the Board and the Managing Director
     to “delegate to any person any of the powers vested in them
     under this Act and may grant to any person powers of
     Attorney.”


[15] Counsel for the Appellants stressed, and Counsel for the
     Respondents was unable to deny, that by Section 3, the Act
     created a distinct and unique legal entity – a separate juristic
     person as he put it – separate and apart from the Government
     of Swaziland, from the Minister, from the Managing Director,
     from the Board, from Members of the Board, and from any
     public officers clothed with enabling powers and duties under
     the Act. Counsel for the Appellant is undoubtedly correct in
     his contention that Section 3 (2) created a corporation with the
     plenitude of powers and attributes conferred upon it by the
     subsection.
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     LIVE DISPUTES


[16] The findings of the Court a quo on the matter of disputes were
     encapsulated in paragraph [100] of the judgment which has
     been referred to in paragraph [22] infra. In the introduction to
     their Heads of Argument the Appellants allege that:

          “The Respondent (“the Corporation”) is set upon launching a rival
          telephony network, in breach of clear contractual obligations, in circum
          stances seriously prejudicial to the appellants and to the public interest,
          even    before   arbitration   proceedings   between    the    parties   can    be
          accomplished.”


     At paragraph 6.2.3 of the Heads of Argument the Respondent‟s
     counter:

          “that the JVA reflects the arrangement of the parties for the specific
          purpose of operating a GSM Network as opposed to the alternative
          technology known as CDMA.”


     Paragraphs 6.1 to 6.3.2 are devoted                         to elaborate but
     unavailing argument in support of the above contention.


[17] It is common cause that no arbitration proceedings have been
     initiated.   The      Appellant‟s       position    is      that:    “Given         the
     withdrawal of the first application, it was unfortunately
     necessary to reinstitute proceedings by way of the second
     application.”     This     was      done     in    order     to     restrain        the
     Corporation from marketing and advertising the rival service.
     The Respondents counter that “the parties are bound by the
14
     JVA and an „action‟ or application on the merits of a dispute is
     replaced   by    the    requirements         to   proceed      by    way     of
     arbitration.”


[18] Two issues were proving to be particularly thorny. First, the
     Appellant‟s position remained that the corporation being both
     regulator and commercial contractor simultaneously created a
     conflict of interest.     The second concerned the Appellants‟
     contention that the JVA required the corporation to act with
     the utmost good faith and not to compete against them. The
     Respondent‟s contention on the first issue is articulated in
     their Heads of Arguments in this way:


                “It is submitted that there is no provision of the JVA which prevents
                the respondent from competing with the first appellant’s GSM
                mobile network. The first appellant is protected in respect of GSM
                and not mobile networks generally. There is therefore no conflict of
                interest in that the first respondent is not launching a GSM network
                but a CDMA/WIMAX network which is a different technology and
                “NGN” is on the CDMA platform.”



[19] On the second issue the Respondents deny that they acted in
     accordance with a stratagem devised by the Attorney General
     and with strategic sleight of hand and in bad faith.


[20] Paragraphs 8 – 10 of the Respondents‟ Heads of Arguments
     recite:



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          8.    “The appellants have not submitted the dispute to arbitration in
                terms of the JVA or in terms of the Rules of Arbitration of the
                International Chamber of Commerce (“ICC”). The undertaking in the
                agreement       was   made   pending   finalisation   of   arbitration
                proceedings which were required to be submitted in terms of the
                JVA.


                       “See: Record of Appeal, Vol 1, page 156 paragraph 9.24
                       (Rule 4)


          9.    The first respondent alleges in its answering affidavit that the
                appellants are relying on arrangements made subsequent to the
                Court order which do not form part of the order and have the effect
                of varying the order.


          10.   In that the dispute has not been submitted to arbitration, the
                appellants have not made out a case for interim relief pending that
                arbitration.”



     THE JUDGMENT


[21] The opening paragraph of the judgment of MCB Maphalala J
     records that “the Applicants instituted proceedings before this
     Court on the 27th May 2010 on an urgent basis.”                          Some
     seventy four pages later on 20th April 2011 the Judge
     concluded that “In the circumstances, both the main and
     interlocutory applications are dismissed.                No order as to
     costs.” The Appellants noted an appeal on the very next day
     against the judgment which their Counsel described in their
     Heads of Arguments at paragraph 5 in this way:


16
          “The judgment is very lengthy, comprising substantially a paraphrase of
          the papers and of argument.        The actual analysis is brief, and core
          reasoning even briefer. The latter comprises one paragraph. It is this: that
          the whole matter had become moot, because there were no longer any
          issues to be arbitrated, and “the dispute has been resolved and the basis
          for the court order, being interim in nature, has fallen away.”



[22] What Counsel submits is the core reasoning is contained in a
     modest paragraph [100] which is to the following effect.


          “It is apparent that there are no longer any arbitration issues between the
          parties since the First Respondent is no longer a Controlling Shareholder in
          the Telecommunication Industry. The dispute has been resolved and the
          basis for the Court Order, being interim in nature, has fallen away; and
          there is no legal basis for holding, as the First Applicant does, that the
          Respondents are acting in breach of the JVA and the Court Order.”


     THE CHRONOLOGIES


[23] During the course of the hearings, this Court indicated to
     Counsel on both sides that a chronology of events might be of
     assistance in following the flow of events as they occurred
     sequentially. Both Counsel readily agreed and undertook to
     prepare a chronology with which they both concurred. Even
     in this seemingly non-contentious exercise, the parties could
     not reach a consensus.           As it turned out, the Respondents,
     having read the Appellants‟ chronology added a chronology of
     their own which highlighted six additional matters which they
     considered to be of importance. This Court is grateful for the
     chronologies which the parties have furnished, and would
17
     annex them to this judgment as Annex A being the Appellants
     chronology, and Annex B being the Respondents‟ chronology.


     CONCLUSION


[24] Counsel for the Appellants submitted that „the basis on which
     the High Court dismissed the application was untenable. The
     JVA subsists between the third Appellant and the Corporation.
     The Corporation is a juristic person separate from the
     Government, and it specifically is the contract-counterparty.
     The “relocation” of shares is not what the Attorney-General
     advised – and in any event has no effect on the continuing
     contractual obligation by the Corporation. That obligation is
     rooted in an express obligation of the highest good faith. It is
     not susceptible to strategic sleight of hand. And specifically,
     the Corporation is bound not to field another network in
     competition with that of the joint venture.‟ This Court accepts
     the correctness of the foregoing submission.


[25] The Court a quo fell into error by dismissing “the main and
     interlocutory applications,” which were not before him, and in
     effect, by not dealing with the application of the 18th February
     2011 which is the subject matter of this appeal. As illustrated
     in the preceding paragraphs a number of live issues remain in
     dispute. These were vigorously contended by Counsel for the
     parties both in the papers, and in oral arguments before us to
     such an extent, that the need for their resolution through the
18
     arbitration machinery as provided for in the Clause 27.2 of the
     Joint Venture Agreement became clearly obvious.


[26] Counsel for the Appellant submitted a chronology and Draft
     Order dated 24 May 2011. A Respondent‟s chronology was
     also filed on that same date which reflected that “The
     Respondents having read the Appellants‟ chronology would
     like to add the following:” This was followed by list of matters,
     their dates, and references to the relevant pages of the record.
     A missing reference was also attached. There was no objection
     or demur to the Appellant‟s proposed draft order. For that
     reason, and because the draft is reflective of the conclusion to
     which this Court has come, that draft forms the basis for the
     order of this Court.


          Accordingly, having read the papers filed and heard
          argument presented by counsel for the parties, it is
          ordered that:


               1.    The judgment of the court a quo is set aside,
                     and replaced with the following order:


                     (a)    The usual forms and procedures relating
                            to the institution of the proceedings are
                            dispensed with, and the application is
                            permitted to be heard as a matter of
                            urgency.
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            (b)   Pursuant to the Court Order dated 5 July
                  2010, incorporating inter alia paragraphs
                  3 and 4 of the Agreement of Settlement
                  between the parties dated 4 June 2010,
                  pending     the    resolution     between           the
                  parties or the final determination of the
                  dispute by arbitration pursuant to (c)
                  below,    the     respondents         are     ordered
                  forthwith to cease and desist from


     (i)    Marketing and advertising the Fixed Wireless
            Component of its NGN Network; and


     (ii)   Connecting      new     customers      to     the       Fixed
            Wireless Component of its NGN Network.


            (c)   The      appellants      shall    institute         an
                  arbitration, pursuant to the provisions of
                  clause     27.2    of    the     Joint       Venture
                  Agreement between the parties, dated 31
                  July     1998,    read   with    the        Rules    of
                  conciliation      and    Arbitration         of     the
                  International     Chamber        of    Commerce,
                  within 30 days of the date of this order,
                  failing which the order in terms of (b)


20
                           above shall lapse and be of no force and
                           effect.


                     (d)   Directing the first respondent to pay the
                           costs of the application.


               2.    The first respondent is ordered to pay the costs
                     of the appeal, including the certified costs of
                     two counsel, on the scale as between attorney
                     and client.


[27] The order in 2 above has been made for the following reasons.
     Some time after the hearing of the instant appeal on the 20th
     May 2011, it came to the attention of the members of this
     Court as presently constituted, that Ramodibedi C.J. had
     heard an application involving these parties on the 6th May
     2011 and had delivered his judgment on the 19th May 2011,
     which was a day before the hearing of this appeal on the 20th
     May 2011.


[28] A perusal of that judgment revealed that the Honourable Chief
     Justice had found that, notwithstanding the noting of an
     appeal by the Appellants herein on the very next day following
     delivery of the judgment of M.C.B Maphalala J on the 20th
     April 2011, and in violation of the well established rule in this
     Kingdom that the noting of an appeal operates as an
     automatic stay of execution, the Respondents had continued
21
     to roll out their Mobile Network and to advertise same after the
     appeal against the judgment of Maphalala J – delivered on the
     20th April 2011 – had been noted on the 21st April 2011.


[29] This flagrant disregard of the law and practice in Swaziland is
     based upon the crass, avaricious, brazen and disingenuous
     contention that, as the deponent swore in his answering
     affidavit:

                          “It is in the public interest that the 1st Respondent
                          should continue to offer its products as well as the call
                          rates are cheaper and this will lead to more choice for
                          the consumer.”


     The above reasoning appears to be based upon a cynical and
     grasping calculation that the premature rolling out of their
     Mobile Network was worth risking. They were evidently enticed
     by the revenue and advertising advantages to be gained by this
     unsavoury bit of sharp commercial practice.                  The learned
     Chief Justice described this series of applications as cut-
     throat litigation. The conduct of the Appellants is an example
     of cut-throat competition.


[30] The situation before us represents business practice at its
     worst where contractual obligation and legal principle were
     callously sacrificed upon the alter of unfair commercial
     advantage over a competitor, and of the profits to be gained by
     jumping the gun and cornering the market before the

22
     continuing legal processes had been properly concluded. The
     advertisements        which      had    already        penetrated   the
     consciousness of consumers cannot now be recalled.


[31] In Swaziland Building Society v Sibongiseni Fundzile Xaba
     Civil Appeal Case No. 45/2010, this Court, at paragraph
     [21], restated the basic principle that vexations, unscrupulous,
     dilatory or mendacious conduct (this list is not exhaustive) on
     the part of an unsuccessful litigant may render it unfair for his
     harassed opponent to be out of pocket in the matter of his own
     attorney and client costs. The findings of the Court a quo that
     the Appellant in that case was guilty of grave misconduct in
     the transaction under inquiry, and that its conduct was highly
     reprehensibe, wrongful and unjust was endorsed by this Court
     as warranting the award of costs upon the attorney-and-client
     scale.


[32] The 5th Edition of Herbstein and Van Winsen The Civil Practice
     of the High Courts of South Africa cites a number of examples
     of conduct warranting the award of costs on the attorney-and-
     client     scale.   These     include   cases     in    which   special
     circumstances or considerations justify the granting of such
     an order. No exhaustive list exists. But some examples will
     suffice.


                  (i)    That the party has been guilty of dishonesty or
                         fraud   or   had    vexatious,       reckless   and
23
                        malicious, or frivolous motives, or committed
                        grave misconduct either in the transaction
                        under enquiry or in the conduct of the case.
                (ii)    Where an attempt was made to trifle with the
                        Court.
                (iii)   Where there has been an abuse of the
                        processes of the Court.
                (iv)    Where there has been unworthy, reprehensible
                        or blameworthy conduct.
                (v)     Where there has been an attitude toward the
                        Court    that       is     deplorable         and   highly
                        contemptuous of the Court.
                (vi)    Where there has been conduct warranting the
                        Court‟s disapproval and which the Court
                        should frown upon.


[33] In casu the Respondents have, as the Learned Chief Justice
     observed, flagrantly disregarded not only their contractual
     obligations, but the orders of the Superior Courts of this
     Kingdom.    That     conduct     has        led   to   a   continuation    of
     unnecessary litigation and represents a threat to the Rule of
     Law itself. For no litigant, however well heeled financially, or
     however    prominent        in   the        business       and    commercial
     community, can be allowed as the Respondents have done in
     this case, to disregard Orders of competent Courts with
     impunity. This case therefore is one where the egregious


24
     conduct of the Respondents warrants the award of costs upon
     the attorney-and-client scale.



                                      _______________________
                                      S. A. Moore
                                      Justice of Appeal



     I agree                          ______________________________
                                      A. M. Ebrahim
                                      Justice of Appeal



     I agree                          ______________________________
                                      J. G. Foxcroft
                                      Justice of Appeal



     Delivered in the open Court on this 31st day of May 2011.




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