Snat Savings and Credit Cooperative Society Limited v Nkabindze, in Re: Nkabindze v Snat Savings and Credit Cooperative Society Limited (122 of 2008) [2009] SZHC 243 (24 November 2009)


IN THE HIGH COURT OF SWAZILAND


HELD AT MBABANE CASE NO. 122/08


In the matter between:


SNAT SAVINGS AND CREDIT

COOPERATIVE SOCIETY LIMITED APPLICANT

v

APPLICANT RESPONDENT


PAUL NKABINDZE


In re:


PAUL NKABINDZE

v

SNAT SAVINGS AND CREDIT COOPERATIVE SOCIETY LIMITED

CORAM : Q.M. MABUZA -J

FOR APPLICANT : MR. S.C. DLAMINI OF S.C.

D LAM INI COMPANY
FOR RESPONDENT : MR. M. MKHWANAZI OF

MKHWANAZI ATTORNEYS



JUDGMENT 24/11/09



[1] In this application the following order is sought:



a) Directing the respondent to forthwith release to the applicant the loan amount of E37,000.00;

  1. Directing the respondent to refund applicant the amount of the instalments paid so far with accrued interest;

  2. Directing the respondent to pay the applicant his end of year dividends for 2007;

  3. Costs;

  4. Further and/or alternative relief.



[2] The application is opposed. The Respondent raised a point in limine to the effect that the matter was prematurely before Court as the Applicant had not exhausted all internal dispute resolution structures and has failed to comply with the dispute resolution mechanisms provided in the Co-operatives Act, 2003.



[3] This point in limine is ill-conceived because in certain and appropriate cases where there has been an abuse in the exercise of power by the other party in this case the Respondent, section 33 (1) of the Constitution entitles the Applicant to approach the Court directly for relief. Section 33 (1) of the Constitution states:



"A person appearing before any administrative authority has a right to be heard and to be treated justly and fairly in accordance with the requirements imposed by law including the requirements of fundamental justice or fairness and has the right to apply to a court of law in respect of any decision against that person with which that person is aggrieved."


[4] The Applicant has already exhausted the internal dispute resolution structures and they were of no assistance. It would be folly for me to send him back into the jaws of the crocodile as this would serve no useful purpose. In the event the point of law is dismissed. I turn now to the merits of the case.



[5] The background hereto is that the Applicant who is teacher by profession is a member of the teacher's organisation Swaziland National Association of Teachers (SNAT). The Respondent is a co-operative society operated by SNAT for its members who are teachers. The Respondent is formally registered in terms of the Co­operatives Act, 2003.



[6] The Applicant as a teacher is a member of the Respondent and this membership entitles him to make money loans from the Respondent. During 2007 he made an application for a loan from the Respondent for an amount of E37,000.00 (Thirty seven thousand Emalangeni).

[7] The Applicant states that the loan was approved by the Respondents Credit Committee. During July 2007 the Applicant received a telephone call from a staff member of the Respondent to collect the cheque. However, Absalom Shabangu who is a member of the Executive Committee of the Respondent telephoned the Applicant and informed him not to collect the cheque as the loan had not been approved.



[8] In his answering affidavit on behalf of the Respondent, Wilton Dlamini, chairman of the Respondent denies that the Applicant's loan was approved. The reasons given for the non-approval is that the Applicant had a prior loan which was in arrears which he needed to clear off before receiving another loan. Mr. Dlamini denies that a staff member telephoned the Applicant particularly as the Applicant has failed to state who telephoned him. In an earlier application for rescission of judgment filed by the Respondent and in its replying affidavit at paragraph 10.1, the deponent, Mr. Dlamini admits that the loan was approved but that the Management Committee declined to confirm the approval of the loan because the Applicant (Respondent then) had outstanding loans from previous years.

[9] Furthermore, a minuted meeting held on the 19th December 2007 of the Supervisory Committee found that the loan application had been approved (see annexure "RA1" and "RA2". The Applicant also attended this meeting.



[10] Ultimately, the Applicant was called to a meeting before the Supervisory Committee. The Executive Committee was also called. It was at this meeting that the Applicant learnt that he had been black listed by the Executive Committee for allegedly failing to repay the earlier loan. The Applicant states that he was surprised as he could not be lawfully blacklisted without a hearing first being held. At the meeting he denied that he was owing the Respondent and requested proof; no proof was forthcoming. He denies being indebted to the Respondent in any amount at all.



[11] The Respondent did not respond to the Applicants allegations. All it did was merely note the contents herein (see paragraph 11 of its answering affidavit). This response is disallowed in pleadings and amounts to an admission of the things stated by the Applicant.



[12] Consequently, I find that the Respondent have not set out a defence to this allegation by the Applicant and I must accept the Applicant's version of events. The Respondents have failed to set out a counter-claim in respect of the money they say is owing. It may very well be owing but I suspect that they cannot properly document it. This is not the Applicant's fault. Furthermore, the Respondents have a claim in law and can issue summons once they have established proof of such outstanding loan.



[13] The Applicant has stated that even though the application for the loan was not approved, the Respondent started deducting repayment instalments from his salary with effect from the end of August, 2007 in respect of the loan for E37,000.00 which was not released to him. He has annexed his payslip (annexure "RA4") which shows a deduction of the sum of E2,300.00 in favour of the Respondent (see item 052). The year to date column shows a total deduction of El 1,500.00 for the past eleven months. Annexure "RA4" is dated 21/11/2008.



[14] The Respondents reply to the above allegation is that the Applicant at the time he made the application knew that he was indebted to the Respondent. The Respondent has once more failed to set out the extent of the Applicant's indebtedness. The impression made on me is that they have no idea whether or not the Applicant is indebted and to what extent.



[15] The Respondents response to the allegation of deduction of money from the Applicant's salary is that the deductions are in respect of the outstanding loans. Hereto there is a marked failure by the Respondent to respond properly to the Applicants averments.



[16] The Applicants next bone of contention is that the Respondent further withheld his end of the year dividends for 2007 on the basis that he was indebted to it. The Applicant has stated that he is entitled to the dividends as a contributing member of the Respondent as he is up to date with his contributions. Annexure "RA4" item 058 shows a deduction of E77.39 being SNAT subscription. Year to date column shows that a total E386.95 in the past eleven months had been deducted. Annexure "RA4" is dated 21/11/2008. The Respondents response hereto is a cryptic statement that dividends are ordinarily paid out to members whose accounts are not in arrears not members in the position of the Applicant.



[17] Here too, the Respondent has failed to address the issue. It has not responded to why it has not paid the Applicants his dividends. If it used the dividend to set off what is owed by the Applicant it should demonstrate this by setting out the amount owing, the amount of the dividend due to the Applicant and the balance after set­off. The Applicant is entitled to this information.



[18] The Applicant has stated that the loan was made in order for him to repair his trucks. As a result of the refusal of the application, the Applicant had suffered substantial damages because of the loss of the use of the trucks. The Respondents response is not a defence but an arrogant response namely that the Applicant should not expect to get a loan irregularly just to fix his truck and make money when he has shown that he is failing to repay his previous loans.



[19] Finally, the Respondent at paragraph 18 of its answering affidavit states that the Applicant should have involved the internal dispute resolution mechanisms if he was dissatisfied with the decision of the Supervisory Committee. I have already dealt with this response when dealing with the point in limine above.



[20] It is clear to me that the Respondent:



(a) Took a unilateral decision to blacklist the Applicant without first calling him to a hearing. In MPD

Marketing and Supplies (Pty) Ltd and 3 Others v The Prime Minister of Swaziland and 7 Others case no. 1705/06 (unreported). This Court held that the Prime Minister and his Cabinet had no right to blacklist the Applicants without hearing their side of the matter. See also section 33 (1) of the Constitution of Swaziland.



(b) By failing to produce proof of the outstanding prior
loan yet continue to deduct money from his salary is
an abuse of power.



(c) By withholding his dividend to his financial detriment
was not only punitive but abuse of power.



[21] I have in the past stated that it is a requirement of the rule of law that the exercise of power by public functionaries should not be arbitrary otherwise the courts will declare such exercise invalid.



[22] In the event the Respondent is ordered to:



  1. Release the amount of E37,000.00 to the Applicant.

  2. Refund to the Applicant the amounts of the instalments deducted from his salary together with accrued interest;

  3. Pay to the Applicant his end of the year dividends for 2007;

  4. Costs;

  5. Further and or alternative relief.


M.M. MABUZA

J

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