MASERU — The Court of Appeal last Friday postponed a case between civil servants and money lending firms to October to allow the two parties a chance to argue on the correct interpretation of Lesotho’s money lending laws.
“Parties should make a case ready for proper interpretation of the law. It is for the interest of everybody. This case stands adjourned to the 6th October 2010,” Court of Appeal Judge John Smalberger said.
The money lending companies — Afrisure, B-Blue Financial Services and Select Management Services — have been locked in a fierce fight with civil servants since last year.
The civil servants took the three companies to the High Court last year alleging that the firms were charging exorbitant interest rates of 65 percent against the stipulated 25 percent.
The High Court ruled in their favour.
The money lending companies however took the case to the Court of Appeal.
A lawyer representing Afrisure, Advocate Motiea Teele, earlier on had asked the Court of Appeal to deal with the case in a manner that would assist the High Court to deal with similar disputes that are pending at the court.
“This is an important case which has to be dealt with in such a way that it would assist the High Court to deal with similar cases easily because there are other similar cases pending before the High Court which involve thousands of applicants,” Teele said.
The Court of Appeal ordered the lawyers to identify issues which are not in dispute to enable the court to deal with the disputed issues only.
The Court of Appeal is now expected to deal with the interpretation of the money lending regulations before getting into the facts of the particular dispute between civil servants and the money lenders.
The court is now expected to deal with interpretation of the Money Lenders Order of 1989 and the Money Lenders (Amendment Act) 1993.
The two laws are used to regulate the money lending business in Lesotho.
The focal point in the Court of Appeal session in October will be the interpretation of the 25 percent interest which the Money Lenders Order stipulates as the lawful interest rate to be charged on loans.
However, the law also allows for other administrative charges.
Addressing the civil servants outside the court on Friday, Advocate Kananelo Mosito said the Court of Appeal will have to interpret the meaning of the 25 percent interest rate.
“The issue here is whether the administrative charges should be calculated outside the 25 percent or whether they should fall under the 25 percent,” Mosito said.
The civil servants also demanded to know whether the money lenders will continue to deduct their salaries pending the hearing of the case by the Court of Appeal in October.
Mosito said negotiations were in progress between the Afrisure and B-Blue lawyers to advise their clients to stop deducting salaries until the cases have been finalised.
However, Mosito said lawyers for Afrisure and B-Blue were going to consult their clients.
“But if they do not stop deductions we are going to argue a full case on the 10th May in the High Court,” Mosito said.
Select has already stopped deductions from salaries of civil servants whose cases are still pending in the High Court.
The embattled money lending firms last November suspended the granting of loans after the High Court in October ruled that the companies were charging illegal interest rates.
The money lending firms said they had suspended the loan service to allow the Court of Appeal to first deal with the case.
The suspension however caused anguish among civil servants most of who virtually rely on loans to pay school fees and service other debts.