Swaziland High Court Ruling: Pyramid Scheme Case Hinges on Validity of Commissioned Affidavit

On February 28, 2013, the Swaziland High Court delivered a judgment in the case of Pricewater House Coopers Advisory Services (Pty) Ltd & Another v Diamond Africa Ltd (3082/2010). presided by M. Dlamini J. This case focuses on a winding up application against Diamond Africa Ltd, which was accused of running a pyramid scheme.

Preliminary Issues

Two preliminary issues were addressed by the respondent in this case:

1. Validity of the commissioned affidavit: An affidavit from Linda MaCphail of the 1st applicant, critical in proving pyramid scheme allegations, was contested due to the lack of a formally recognized Commissioner of Oaths or Justice of the Peace at the time it was signed.

2. Standing of the applicants: It was argued that Pricewater House Coopers and the Central Bank of Swaziland lacked standing since Diamond Africa was not a financial institution under the Financial Institution Act No. 6 of 2005.

Background

The court recognized that the supporting affidavit of Linda MaCphail, which established the foundation for pyramid scheme allegations, was commissioned by a Police officer in South Africa, but signed in Swaziland. The applicant claimed that Swazi law only required an oath to be administered by a “Commissioner of Oaths,” but failed to provide legal authorities to support this claim.

Authorized Individuals to Administer Oaths

Under Swazi and South African laws, Commissioners of Oaths, Judges, justices of the peace, and certain high-ranking police officers are authorized to administer oaths. Both the Commissioner of Oaths Act No. 23 of 1942 and the Justices of the Peace Act No. 63 of 1954 outline the various categories of individuals who can administer oaths in the jurisdiction.

Irregularities with Supporting Affidavit

Despite a police officer from South Africa administering the oath to Linda MaCphail in Swaziland, which goes against formal recognition of those authorized to administer oaths under Swazi law, no evidence was presented to the court to proceed under international or regional provisions.

Impact on Application

The judge concluded that the supporting affidavit could not be relied upon as valid under Swazi law due to its inconsistencies with the Swazi legal principle of affidavits being sworn before a person competent to administer an oath. This left the applicants without sufficient evidence to prove their pyramid scheme allegations and rendered the basis for the winding up application invalid.

Next Steps

The court has yet to decide if the application should be dismissed or if the parties will be given an opportunity to rectify any discrepancies in their papers to prevent unnecessary delays and escalating costs.