Court name
High Court
Case number
APPEAL 368 of 1997

Powell and Another v Insolvent Estate D. Lidchi (APPEAL 368 of 1997) [1998] NAHC 2 (18 February 1998);

Media neutral citation
[1998] NAHC 2




Vesting of
movable property in trust1;uch property outside jurisdiction of Court
where person declared insolvent - necessity to show that Court
granting order of insolvency was Court of insolvent's domicile
-Domicile - what factors Court should consider to determine domicile.

NO. A.368/97


NO. A 368/97


In the matter






Heard on:

Delivered on:


two Applicants were appointed as joint provisional trustees in the
insolvent estate of Mrs Lidchi. For sake of convenience I shall
further herein refer to Mrs Lidchi as the Respondent. The estate of
the Respondent was provisionally sequestrated in Johannesburg,
Republic of South Africa, on 5 May, 1997. This provisional order was
confirmed and the estate of the Respondent placed under final
sequestration by Claasen, J, on 10 June, 1997. The granting of both
these orders were opposed by the Respondent.

On the 8th
September, 1997 the Applicants obtained, on a basis of urgency and
following order from Teek, J, in the High Court of Namibia, namely -

" 1.
That this matter is declared one of urgency and that the usual
and time periods laid down by the Rules of this Honourable
Court are
dispensed with. <

  1. That the
    appointment of the Applicants as provisional trustees in the
    insolvent estate of Diane Lidchi ('the insolvent") is hereby
    recognised, and they are hereby granted the powers bestowed upon
    them by virtue of section 18(3) of the Insolvency Act, 24 of 1936
    (S.A.) ("the Insolvency Act") made applicable in Namibia
    by virtue of Act 16 of 1943 (Namibia) and in particular authorising
    the bringing of this application and any further proceedings which
    flow from it.

  2. That such
    recognition and authority is hereby extended to the final trustees
    of the said estate, upon their appointment as such.

  3. That a Rule
    hereby issue calling upon the Insolvent and Clara Kahan in their
    personal capacities and the Insolvent, Clara Kahan and Farrel Wainer
    in their capacities as trustees of the Clamodianel Trust and all
    other interested parties to show cause on Friday 31st October, 1997
    why a final order should not be issued in the following terms:

Declaring that all movable property, including the shares registered
in the name of Diane Lidchi in the share registers of Offshore
Diamonds (SWA) Limited ("Offshore Diamonds"), Diamond
Dredging and Mining CO. (SWA) Limited ("Diamond Dredging"),
Moly Copper Mining and Exploration Company (SWA) Limited ("Moly
Copper") and Lorelei Copper Mines Limited ("Lorelei")
vest in the Applicants in their capacity aforesaid;

4.2 Declaring
that the immovable property situate at Erf 266


and Erf 267,
Luderitz vests in the Applicants and in their capacity aforesaid;

  1. Declaring
    that the purported resolutions of the boards of directors of
    Offshore Diamonds, Diamond Dredging, Moly Copper and Lorelei amexed
    to the founding affidavit as Annexures "OMP.14A" to
    "OMP.14D" are invalid and null and void and of no force
    or effect;

  2. Declaring
    that the costs of this application be costs in the administration
    in the insolvent estate of the Insolvent, save in the event of any
    party opposing this application in which event that this Honourable
    Court make such order in regard to the costs as it deems meet.

5. That
an interim interdict is hereby granted pending the
determination of this application that the Insolvent,
Kahan, and the Clamodianel Trust are interdicted and
from in any way whatever^

  1. directly or
    indirectly dealing in any manner with, alienating, or disposing of,
    encumbering or exercising any right whatever attaching to the
    shares in Offshore Diamonds, Diamond Dredging, Moly Copper and
    Lorelei, registered in the name of the Insolvent;

  2. alienating,
    disposing or encumbering or otherwise dealing with the immovable
    property situated at Erf 266 and 267, Luderitz;

  3. from in any
    way whatever implementing or giving affect to any of the
    resolutions more fully referred to in prayer 4.3 above.

6. That
the costs of this application be reserved for determination
the return date of the said

7. That
service of the
the Notice of Motion herein and the founding affidavit herein
together with all annexures thereto be served on:

  1. the
    Insolvent at 2 Upper Park Drive, Forest Town, Johannesburg;

  2. Clara Kahan
    at 2 Upper Park Drive, Forest Town, Johannesburg;

  3. Mr Farrel
    Wainer at c/o Fisher Hoffman Sithole, FHS

House, 5
Girton Road, Parktown, Johannesburg.

  1. Offshore
    Diamonds at N.G. Church Centre, Windhoek Namibia;

  2. Diamond
    Dredging at N.G. Church Centre, Windhoek, Namibia;

  3. Moly Copper
    at N.G. Church Centre, Windhoek, Namibia;

  4. Lorelei at
    N.G. Church Centre, Windhoek Namibia.


10. That in
addition to the service hereinbefore provided for, the
published iiv a local newspaper circulating in Windhoek and Luderitz,
Namibia and in a local newspaper circulating in Johannesburg in the
Republic of South Africa."

The matter
was not ready for hearing on the 31st October, 1997 and the Rule was
further extended. Because of the effect of the Order and the urgency
involved the matter came up for hearing on 9 December, 1997.
Applicants were represented by Mr Rubens, assisted by Mr. Smuts. The
Respondent was represented by Mr. Bregman.


Because of
the way in which the Respondent was allowed to frame her answering
affidavit the application degenerated into another battle in the war
between the Respondent, Mrs. Lidchi, and her brother, Mr. Kahan,
(Kahan), which has now been waging for some years. From the documents
it is clear that the Respondent and Kahan inherited shares from their
father in a number of Companies. In a diagram, "OMP.10", a
schematic exposition is given of the various Companies and the
shareholding thereof. I will herein only deal with the shareholding
in those Companies affected by the Court Order.

to "OMP.10" Offshore Diamonds (SWA) Limited (Offshore
Diamonds) is the parent holding company in the group with a total
issued share capital of 5 393 000 shares. Kahan and his family (being
himself, his wife and children) (the Kahan Group) are registered
shareholders of 43,9% of the total issued share capital of Offshore
Diamonds. The Respondent and her family (being herself and her
daughter)(the Lidchi Group) are registered owners of 49,47% of the
total issued share capital of Offshore Diamonds. I am mindful of the
fact that Respondent alleged that she is holding her shares in
Offshore Diamonds and other companies as a nominee for her mother,
Clara Kahan, and will deal later more fully with this aspect.

The total
issued share capital of Diamond Dredging & Mining Co. (SWA)
Limited (Diamond Dredging) is 209608 shares. Offshore Diamonds is the
registered owner of 93,41% of the shares whilst Clara Kahan and
others own 1.15% of the said issued shares. According to "MPO.10"
the Lidchi Group are the registered owners of 3,15% of the total
issued share capital of Diamond Dredging of which the Respondent is
the registered owner of 3202 shares. The Kahan Group are the
registered owners of the balance of the said shares.

The total
issued share capital according to "OMP.10" in Moly Copper
Mining & Exploration Company (SWA) Ltd (Moly Copper) is 450 000
shares. The Lidchi group own 4.44% of the total share capital in Moly
Copper of which 13 332 shares are the property of the Respondent. The
balance of the shares are held by the Kahan Group and other outside

Moly Copper
is also the registered owner of a 100% of the total issued share
in various other private companies, as well as 99,65% of
the issued shares in Lorelei
Copper Mines Limited (Lorelei) with
Kahan. The Respondent and others account for
the balance of the
registered shareholding. It is further alleged that the
personally owns ,1245% of the total issued share
capital in Lorelei, amounting to 747
• /

The companies
Offshore Diamonds, Diamond Dredging, Moly Copper and Lorelei are

all companies
registered and incorporated in Namibia. These four companies have as

transfer secretaries, Welwitschia Nominees (Pty) Limited at the
offices of G.J.

van Schalkwyk
& Company, at N.G. Church Centre, Windhoek.


As previously
set out the Applicants alleged that the shares in the various
companies were inherited by the Respondent and Kahan on the death of
their father in 1964. In this regard it is the contention of the
Respondent that these shares were only held by them as nominees of
their mother, Clara Kahan. From the documents filed it seems that
dissension and head-on collisions soured the relationship between
Respondent and Kahan. Each party blamed the other for the development
of this situation.

During 1982
the parties entered into a written shareholders, or joint resolution
agreement, in terms whereof it was agreed to exercise joint control
in certain affected companies as defined by the agreement. See
Annexure "OMP.9A". In regard to such companies unanimity
was required for all resolutions of shareholders and directors and no
valid or effective resolution could be passed unless it was
unanimous. According to the Applicants, Offshore Diamonds, Diamond
Dredging, Moly Copper and Lorelei were, and still are, affected
companies. This is however denied by the Respondent and it is further
denied by her that the so-called shareholders or joint resolution
agreement is still in existence.

According to
Kahan the relationship between himself and the Respondent came to a
head during 1985 to such an extent that a deadlock ensued between
them in the administration of the companies. As previously stated
each one blamed the other for this situation. How it came about is
not really relevant to these proceedings. However it led to Kahan
initiating winding up proceedings in regard to certain companies,
including Offshore Diamonds. In order to solve the impasse the
parties agreed to refer their disputes to arbitration. According to
the Applicants the arbitration proceeded in three phases. There was
first a hearing and award in Kahan's favour by a single arbitrator,
Adv. H Slomowitz S.C. Thereafter an appeal was lodged which was heard
by a panel of three arbitrators. The appeal was upheld and the matter
was referred for the hearing of
again before a panel of three arbitrators consisting of a retired
Judge, the Honourable Mr. Justice Leon, Advocate M.D. Kuper SC and
Advocate P.A. Solomon S.C. A final award was handed down by them on
17 March 1995 upholding the contentions of Kahan. What is of some
relevance to the present proceedings is that the arbitrators rejected
Respondents contention that the shareholders or joint resolution
agreement was cancelled and that she as majority shareholder had
control of the companies. The Respondent withdrew from the final
hearing and her attitude is that the proceedings and award have no
relevance and, as previously stated, the shareholders or joint
resolution agreement, for various reasons, no longer govern the
relationship between the parties vis-a-vis their control and
administration of the companies involved.

Applicants stated that the dispute between the Respondent and Kahan
was settled during May 1995 as follows:

(i) By
payment of R21 million by theJRespondent to Kahan which had to
guaranteed within a specific time; and

(ii) by
the delivery of Kahan of his shares and interests in the group
companies to the Respondent.

It is common
cause that the Respondent failed to make payment of the amount of R21
million or furnished a guarantee within the time stipulated. This
lead to Kahan obtaining judgment against the Respondent in the
Witwatersrand Local Division of the Supreme Court of South Africa for
payment of the amount of R21 million against delivery of his shares
and interests in the companies. Steps taken to obtain leave to appeal
against this judgment were unsuccessful.

Pursuant to
the judgment a writ of execution was issued and certain movable
property was attached. Steps taken by the Respondent to interdict the
sale in execution and any further attachment were dismissed. As the
proceeds of the sale were insufficient to pay the judgment debt,
Kahan instituted sequestration proceedings which ended in the final
sequestration of the estate of the Respondent on 10 June, 1997.

From the
papers filed it seems that the Respondent vigorously opposed each and
every one of the proceedings referred to herein before. At this stage
there are still appeals or applications for leave to appeal pending
in regard to some of the orders made. That includes the final order
of sequestration in regard of which a notice for leave to appeal has
been lodged by the Respondent.

On the 22nd
June, 1997, i.e. after the final sequestration of the Respondent's
estate, meetings of the boards of directors of Offshore Daimonds,
Daimond Dredging, Moly Copper and Lorelei were held in Windhoek.
These meetings were attended by the Lidchi group and directors
nominated by them. No notice of these meetings were given to the
Kahan group. These resolutions are set out in Annexures "OMP.14A"




The more
important of these resolutions are -


That Clara
Kahan is authorized to act as Chairman of the group and to

pursue or
enter into litigation;


To authorize
Clara Kahan to investigate the books of account and

records of
subsidiaries, and to employ the services of forensic


To authorize
the representatives of the company on the board of the

companies, who are subsidiaries of Moly Copper, to take steps

ensure that a resolution is passed to arrange for the immovable
properties to be realized and to take the necessary steps to
advertise the properties for sale.

  1. To provide
    that without the written approval of Clara Kahan, or her alternate,
    no new signatories be permitted to operate any of the bank accounts
    of the companies; and

  2. That all
    money of any of the subsidiaries of the companies be paid into
    authorized bank accounts and that no money be withheld from being
    so deposited.

1 i

It was
pointed out by the Applicants that Clara Kahan was a woman of 87
years with frail health and it was alleged that she was only set up
to do the Respondent's bidding. The Applicants further stated that
because of their entitlement to the shares vesting in the
Respondent, any action precipitously taken at the instance of the
Respondent, could diminish the value of their shareholding. The
Applicants pointed out, that according to Kahan, the value of the
properties runs into several million rand.

Respondent in turn pointed out that Kahan and his son exercised
unilateral control over certain of the companies and have availed
themselves frequently of funds and overdraft facilities regarding
these companies. As far as the joint shareholders agreement was
concerned the Respondent stated that it was no longer in existence.
The Respondent also referred to other alleged irregularities
committed by Kahan and

stated that the authority given to Clara Kahan was taken at properly
constituted meetings of boards of directors operating in terms of
the articles and memoranda of each of the companies.

Respondent therefore did not dispute that the resolutions were taken
and that they were so taken at board meetings of which the Kahan
group had no notice and were not present. The attitude of the
Respondent was that she was no longer bound by the joint
shareholders agreement and that the resolutions were validly taken
according to the articles and memoranda of the respective companies.
It was further also denied by the Respondent that the Applicants had
made out any basis on which to attack the resolutions.


In her
answering affidavit the Respondent further set out various grounds
on which she alleged maladministration of her estate by the
Applicants and it was further alleged that the Applicants identified
themselves with Kahan notwithstanding a clear conflict between their
interests as co-trustees in the estate and the interests of Kahan.
The Respondent further intimated that she intended to bring an
application for the removal of the Applicants as co-trustees in her


In his heads
of argument, and whilst addressing the Court, Mr Bregman raised
certain points in limine which, if successful, may lead to the
dismissal of the application or a postponement thereof in order to
give possible interested parties an opportunity to be joined in the
application. It will be convenient to deal with those points at the

2.1. THE

Mr. Bregman
submitted that there was no necessity for the Applicants to have
brought the application. His argument was that the Applicants, being
provisional co-trustees in the insolvent estate, brought the
application on the basis that the Respondent was domiciled in South
Africa. In that event they would
control of all movable assets of the Respondent that

there may
be. All the shares are movable assets which would thus come under


the control
of the Applicants. This would have entitled the Applicants to sit on
shareholders and other meetings of the companies. Together with
Kahan they could therefore control the companies and thereby undo
all those resolutions which they are now complaining about.

However the
Respondent vigorously opposed the application by the Applicants.
This she did in an affidavit which, together with documents
attached, comprised some 300 pages. In this affidavit her main
defence was that, at the time that she was sequestrated in South
Africa, that country was not her country of domicile. Respondent
further alleged that all the movable property in Namibia, namely her
shares to which the Applicants lay claim, did not belong to her but
was in fact the property of her mother Clara Kahan, and that she was
therefore only holding these shares in name.

In my
opinion, and that was also the attitude of both Counsel, these
defences go to the root of the Applicant's claims and if either
should succeed it would be the end of the Application. Both these
defences were foreshadowed by the Applicants in their founding
affidavit. And, as previously pointed out, these defences were not
only raised by the Respondent but was pursued with vigour and
energy. The Applicants, aware of Jhe contentions of the Respondent
regarding her domicile and that she was holding the shares only as a
nominee for Clara Kahan, were, as was submitted by Mr. Rubens,
entitled, and in my opinion compelled to approach this Court for a
declaratory order. That is precisely what they did and I therefor do
not agree with Mr Bregman's submission that the Application was
misconceived. In any event although it is strictly not necessary for
trustees, laying claim to movable assets in a Country other than the
Country of the insolvent's domicile where the sequestration was
obtained, for recognition, Berman, J, pointed out that such an
application is invariably made and the need for formal recognition
has now been elevated into a principle. See
Parte Palmer N.O: In re

Hahn. 1993 (3) SA 359 (CPD) at 362 E.


Mr. Bregman
furthermore submitted that the Court should dismiss the Application
on the basis that the four companies, Offshore Diamonds, Diamond
Dredging, Moly Copper and Lorelei were interested parties in these
proceedings but that the Applicants have failed to join them. The
main thrust of Mr. Bregman's argument was that the Court is, inter
alia, asked to interdict these companies from carrying out certain
resolutions and, unless they were joined as parties, any order of
this Court in this regard would not be effective and would not bind
these companies. It was however conceded by Mr. Bregman that the
companies were aware of the proceedings and so were the Lidchi and
Kahan groups. Counsel submitted however that this was not enough.

Mr. Rubens,
on the other hand, pointed out that the Notice of Motion and

documents as well as the Order of Court were all, in terms of the

served on the companies. Furthermore that all the interested parties

affidavits one way or the other and that the Respondent stated in
her answering affidavit that she opposed the relief sought in her
personal capacity as well as in her capacity as a director and
shareholder of the affected companies. In this regard Mr. Rubens
referred the Court to the case of
Provision Supplies CC v Exim International CC and Another,

1995 (1) SA 150 (T.P.D.).

It is
undoubtedly so that parties who have a real and substantial interest
in relief asked should be before the Court and that the Court could
such point even though the parties themselves did not take it (See
Engineering Union vs Minister of Labour 1949 (3) SA 637 (A))
J (as he then was) pointed out in the
Provision Supplies

-case, supra, at p 158 D-G, that this rule was not absolute and that
a Court must have regard also to the circumstances of a particular
case. After reviewing a number of cases the learned Judge stated as

observations clearly show, in my view, that the rule which seeks to
avoid orders which might affect third parties in proceedings between
other parties is hot simply a mechanical or technical rule which
must ritualistically be applied, regardless of the circumstances of
the case. For this reason the Court in
v Conelect

1987 (3) SA 689 (W) held that, where the third party has waived his
right to be joined, the failure to join him as a third party was no
bar when ordering the

which might affect him, because he was not prejudiced in



In the
present case the document initiating the process were served on the
companies. The companies act through their directors. All those
directors representing the Lidchi group deposed to affidavits in
support of the Respondent, Mrs. Lidchi. The Kahan group, as
represented by Kahan and his son Phillip, made affidavits in support
of the Applicants. The Respondent clearly states in her answering
affidavit that she also represents the affected companies as
director and she amply and vigorously put their interests and _
views before the Court. As was submitted by Mr. Rubens there is
nothing more that can be placed before the Court. There is in my
opinion also no suggestion in the documents filed before the Court
to suggest that the various companies had an interest adverse to the
interests of the Respondent. (See the

Engineering Union-case,

supra, p.649).

As was
stated by the learned Judge in the
Provision Suplies-case
at 1581
to deny the applicants relief under these circumstances if they are
entitled to it just because the companies were not formally joined
as a party would be without justification in law and would in no way
advance the interests of justice.

2.3 EX

In separate
heads of argument Mr. Bregman, without arguing it, submitted that


the Court
should dismiss the Application because it was brought
without notice to the Respondent. Counsel submitted that in those
circumstances there was a duty on the Applicants to act
to place all relevant facts before the Court. (See
v Schlesinger

1979 (4) SA 342 (W) at 353 C-D and
and Another v Hevns and Others
1991 (1) SA 381 (C) at 397C).

grouds were mentioned in the heads such as that the Applicants
failed to inform the Court of the prospects of success of the
various pending applications for appeal launched by the Respondent;
the shareholding disputes; the prejudice to the companies if the
resolutions taken are not being give effect to; the relationship
between Kahan and Applicants and their common attorney and their
possible removal as provisional trustees as a result thereof; their
maladministration of the estate and intended removal as a result
thereof etc.

With due
respect to Counsel I do not think that there is any substance in
these submissions. The applicants properly placed all relevant
material facts before the Court. They informed the Court of what
orders or judgments applications of appeal were launched. As
provisional trustees their duty was to secure and protect the
interest of creditors and this was the purpose of this application.
They informed the Court of the disputes regarding the companies'
shares. After all that was the reason for the application. That the
Applicants are in cahoots with Kahan or his attorney, or that they
did not properly administer the

estate, were
denied by them.

1 r

Of more
substance are Counsel's submissions concerning the fact that the
obtained before Teek, J, contains in two respects final orders to
which the Respondent had no opportunity to be heard. This is the
issue of urgency and the recognition of the Applicants as
provisional trustees in the estate. Regarding the first point Mr.
Bregman stated that the application was only launched months after
the resolutions complained of were already taken and minuted. In
this regard it was explained by the Applicants that the Kahan group
had no notice of these board meetings. When Kahan became aware
thereof he immediately informed the Applicants whereupon these
proceedings were prepared and launched. I have previously set out
the nature of the resolutions taken. That these resolutions were
taken is common cause, and also that no notice was given to the
Kahan group. As will become apparent later

I am of the
opinion that the Applicants had good reason to suspect that these
resolutions were calculated to, and enabled the Respondent to affect
the interests of creditors of the Respondent's estate adversely. In
my opinion the matter was urgent and Applicants were entitled to
approach the Court on that basis.

In regard to
the second point I have already referred to the fact that strictly
speaking it was not necessary for the Applicants to ask the Court
for recognition in order to be vested with the movable assets of the
Respondent. This happened by operation of law. (See
NO v Kotze and Others

1996 (4) SA
1293 (NmHC) at 1295 I - 1296 C). As the Applicants do not ask


the Court to
be also vested with any immovable property of the Respondent such
recognition was, as regards the present application, not of great
significance. More so also if this Court should decide that the
Respondent was not domiciled in the Republic of S.A. at the time of
the sequestration, such recognition will be a


3.1 THE

The parties
seem to me to be
regard to the law applicable to an application of this nature. It
was accepted that at common law a sequestration order granted by the
Court of the debtors domicile
an insolvent of his movable property wherever situated. However a
sequestration order granted by any other Court has
effect on a debtor's assets, whether movable or immovable, situated
outside jurisdiction of that Court. (See Mars:
Law of Insolvency

8th ed at p. 177;
v. Venter NO
(2) SA 152 (w) and the


From this it
follows therefore that if the Respondent was domiciled in South
Africa where the sequestration order was granted all movable
property of the Respondent situated in Namibia would vest in the




The question
of where the Respondent was domiciled at the time of the
sequestration goes to the heart of the Application. The Respondent
alleged in her answering affidavit that she was at the time, and
still is, domiciled in Namibia. To substantiate this claim the Court
was referred to the fact that she was born in Namibia and obtained
citizenship of this Country soon after it became independent.
Furthermore that she has immovable assets in Namibia and that her
business, regarding various companies, are in Namibia. The
Respondent also renders tax returns and pays tax in Namibia. It was
further pointed out that when in Namibia the Respondent stayed in a
hotel and when in Johannesburg she stays at the house at 2 Upper
Park Drive, Forest Town. Shortly before the application for
sequestration was launched the house in which the Respondent resided
was transferred to her daughter, according to

pursuant to an agreement of sale which was entered into in 1992.

Applicants alleged that according to Kahan the Respondent was born
in Namibia on 8 February, 1931. Some two years later the family
moved to South Africa where they first settled in Port Elizabeth and
then, since
Johannesburg where Respondent still resides to date hereof. In
certain affidavits in proceedings between Kahan and the Respondent,
she stated that she resides in Namibia or gave a Namibian address.
This address was however always that of van Schalkwyk's office.
According to Respondent she always resided at the Furstenhof Hotel
when she was in Namibia and where she was always addressed on her
arrival with the words "Welcome home Mrs. Lidchi." The
Respondent also stated inter alia "That Namibia is my place of
domicile and it is where I regard my permanent home to be."

It was first
of all submitted by Mr. Bregman that there was a clear dispute of
fact between the parties and that for that reason alone the matter
cannot be resolved by the Court on affidavit. Further referring to
the abovementioned factors Counsel submitted that it was clearly
demonstrated that the "centre of gravity" of the
Respondent was in Namibia. It was submitted that a distinction
should be drawn between residence and domicile. A person can be
resident in a country despite a tempory absence and may have two or
more residences. Residence can mean more and less than domicile and
Counsel referred the Court to
v Zwyssig
1997 (2) SA 467 at 470. The Court was also referred to
2nd Ed p 42/43 and
first reissue, Vol. 2 p 320 pa

Mr. Rubens
denied the proposition that in general a person would have no place
of residence in a country and still be domiciled there. With
reference to Pollak,
Mr. Rubens submitted that when a person is domiciled in a State he
usually also has his home there.,
p 43, states that it is well possible for a person to be domiciled
in a state without having a home there but further states that that
is an unusual case. Mr. Rubens also referred the Court to
: 2nd Ed.:
International Law,


I cannot
agree with Mr. Bregman that there is a clear dispute made out on the
papers or that it is uncertain whether
might not disturb the balance of probabilities wherever they may lie
in terms of the documents. (See
van Afrika v Western Bank en Andere
1978 (4) S.A. 281 at 299 H).

The approach
of a Court to this question seems to have been set out by

5:1:98 where the following is stated:

a place or country is a man's home, is a question of fact.

Whether a
place or country is a man's domicile, is a question of mixed

fact and
law, or rather, of the inference drawn by law from certain facts

, "quoted
in Lawsa,
p 332 footnote 2.

There would
in my opinion have been a dispute of fact if one or other of the
facts mentioned before, and from which the Court is asked to draw
its inference, were denied, but that is not the case. There is no
dispute between the parties as to what facts the Court should
consider in coming to its conclusion. What is vehemently disputed is
the inference which the Court is asked to draw from those facts. I
cannot see that evidence one way or the other could add or subtract
from the factual allegations made in the affidavits, and which is in
any event not in dispute. If I am wrong in this regard then, from
what follows, it is in any event clear that I am of the opinion that
such dispute is not genuine and that the probabilities
overwhelmingly support the contention of the Applicants.


my opinion it is clear that generally speaking domicile and the
place of a person's residence are closely connected. There are of
course exceptions. See in this regard Lawsa,
p 321,
op. cit, p 111,
op cit p 42, 43.

residence is accompanied by the necessary
to be inferred from the facts. Further it must be accepted that it
is always free to the propositus to choose his domiciluim.

Looking at
the facts placed before the Court it seems to me that only one of
the facts mentioned by Mr. Bregman, from which the Court is asked to
draw its inference in favour of the Respondent, existed as an act of
volition, if I may put it so, by the Respondent. That is the fact
that she took up Namibian citizenship which' she was entitled to do
as she was born in Namibia. The immovable property that she owned in
Namibia she inherited. Those are in any event vacant plots situated
in Luderitz. What interest the Respondent may have in the companies
presently registered in Namibia, she also inherited or, on her
version, she is only holding the shares in those companies as a
nominee for her mother, Clara Kahan. As these companies are Namibian
based and may be a source of income, tax returns and the payment of
tax must be rendered and paid to Namibia. In this regard the Court
was not informed whether she also pays tax to the Government of
South Africa or not.

There is
further the repeated claims by the Respondent that she always
regarded Namibia as her permanent residence. Although a factor to be
considered the fact remains that the Respondent is now resident in
South Africa, and more particularly Johannesburg, for the past 60
years, where she also had her residence, at least up to 1992.
Coupled with this is the fact that there is no place in Namibia
which the Respondent can call home or where she resides. The fact
that she in this regard had invariably made use of van Schalkwyk's
office address demonstrates and underscores the fact that she is not
resident here and has no residence in Namibia. It also belies the
Respondent's claim that the Furstenhof hotel is her home in Namibia.
There is no indication on the papers that the Respondent stayed in
Namibia for any protracted time and the Furstenhof was in my opinion
merely the place where she stayed when she was in Namibia for
business purposes.

In the
present instance it serves Respondent's interest to claim that she
is indeed domiciled in Namibia. As was stated by Jansen, J (as he
then was), in the case of
v Masev

1968 (2) SA 199 (T) at 200H:

"(T) he
an interested party in these circumstances should

be carefully

In the light
of what I have set out herein before the say so of the Respondent
that she always regarded Namibia as her permanent home seems to me
to be no more than a selfserving statement which is raised at this
stage to safeguard her Namibian interests against vesting in the

In my
opinion the only reasonable inference that the Court can draw from
the facts is that the Respondent was indeed domiciled in South
Africa at the time of her sequestration. From this it follows that
any movable property which the Respondent has in Namibia vests in
the Applicants by virtue of her sequestration.


In this
regard it was alleged by the Respondent that all the shares
registered in her name are almost entirely held as nominee for her
mother. As previously stated there is no dispute between the parties
in regard to the effect of a sequestration order on the movable
property of the insolvent where such sequestration order was granted
by the Court of domicile of the insolvent.

there is also no dispute between the parties that shares constitute
movable property within the meaning of the definition of movable
property contained in section 2 of the Insolvency Act, Act 24 of
1936. See also
Bank of South Africa Limited and Another v Ocean Commodities Inc.
and Others.

1983 (1) SA 276 (A) at 288 and
Sixty Four Investments (Try) Ltd v Trust Bani 1993
was further in my opinion also not disputed that such shares, if
they were the property of the Respondent, entitled the Applicants to
obtain registration thereof
the register of members of the company as a result of which the
Applicants, in their aforesaid capacity, will be deemed to be
members of the said companies according to the provisions of sec.
103(3) of the Companies Act, Act No. 61 of 1973. Furthermore that no
instrument of transfer is required to effect such registration. See
sec. 133(2) of Act 61 of 1973.

Mr Bregman
submitted to the Court that if the issue of domicile is decided in
favour of the Applicants it would follow that all the shares
registered in the Respondent's name would vest by operation of law
in the Applicants which, as I understood Counsel, will make it
unnecessary at this stage to decide whether the Respondent was the
owner of such shares or whether she only held them as a nominee for
Clara Kahan. It would then be for Clara Kahan to take out
proceedings in the form of an interpleader, if she is so advised, to
enforce her claim to the shares. I am sure that technically speaking
Mr Bregman is correct and it is certainly a tempting thought to
leave the matter there and not to deal further with it in this
judgment. However to subject parties to further possible litigation
when both sides have put all the material relevant to the issue
before the Court and where both, at least on the documents before
the Court, have asked that the matter be determined, it would, in my
opinion, not be in the interests of Justice to leave this issue,
hanging in the air. I am therefore of the opinion that I should deal
with the issue of the ownership of those shares which are still in
dispute. Jn this regard the Applicants have conceded that the
Respondent did hold some shares in some of the companies as nominee
for Clara Kahan. I will deal with that aspect more fully at a later

Mr Rubens
pointed out that there is no dispute between the parties about the

number of
shares that are registered in the name of the Respondent and that
the real issue is whether she is the owner of those shares,
excluding the concessions made by the Applicants in their reply, or
only the nominee. As pointed out by Counsel this claim, namely that
she is only a nominee, is based on various grounds. In summary these
grounds are as follows:

That Clara
Kahan supported her husband and children whilst her husband was
prospecting in Namibia. On his death in 1964 she was owed some
R70,000 by his Estate. She was also owed payment for certain shares
in terms of a divorce settlement between her and her husband in
January, 1954. The transaction in regard to the shares referred to
above, arose as follows. In terms of the divorce settlement it was
recorded that Clara Kahan's late husband had sold 410 000 shares he
held in a company Diamond Mining & Utility Company (SWA) Ltd and
20 000 shares he held in Industrial Diamonds South Africa (1945)
Limited for certain amounts to Saddle Hill Diamonds (Pty) Ltd. The
right to receive payment for these shares was ceded by her late
husband to her in terms of the divorce settlement. It is then
alleged by Respondent that Saddle Hill transferred the said shares
to Offshore Diamonds without, according to Respondent, paying Clara
Kahan what was owed to her or without first obtaining her consent
for such a transaction.

In regard to
6666 shares in Moly Copper and 1800 shares in Diamond Dredging
registered in the names of Respondent and Kahan, Respondent alleged
that due to payments and oral bequests made by the three of them,
namely Kahan, Clara Kahan and herself, these shares belong to Clara

It was
further alleged that over and above her legal right thereto Clara
Kahan also has a moral right to these shares.

From the
documentation put before the Court it seems that the source of the
ownership in the shares is the will of the late husband of Clara
Kahan who bequeathed these shares in the various companies to his
two children, the Respondent and Kahan. At least as a starting point
it seems to me that the Respondent was the owner of those shares
which she inherited from her father.

by some operation of law, rather than by any agreement or any other
voluntary action by the parties, Clara Kahan became the owner of the
shares, that, so I understood it, both the shares belonging to
Respondent as well as Kahan. If this is not so then there is no
logical explanation or reason why such a fate would only have
befallen the shares inherited by Respondent and not also those of
Kahan. It then further^seems strange that through all the years of
struggle and deadlock Clara Kahan never stepped in and claimed what
was rightfully hers. Such a conclusion as was contended for by the
Respondent gives rise to some strange anomalies. One need only look
at the way both Respondent and Kahan dealt with and controlled the

In this regard it is significant to note that Clara Kahan was not


even a party
to the shareholders or joint resolution agreement which governed the
basis on which resolutions etc. were to be taken in regard to the
companies. This agreement inter alia also deals with such topics as
shareholding and the loss thereof in the affected companies and the
resultant effect thereof on the Lidchi and Kahan groups. How this
could be, when the majority of the shares were Clara Kahan's shares,
is not clear.

I further
agree with Mr Rubens that it is difficult if not impossible to
extract any legal principle from the allegations made by Respondent
as a result of which it can be concluded that the said shares, at
some stage, became the property of Clara Kahan.

In regard to
the claim of R70,000 which Clara Kahan had against her late
husband's estate the Courts attention was drawn to the fact that a
claim was submitted in that regard which was reflected in the
liquidation and distribution account filed in the estate and which
was signed by Respondent and Kahan as joint executors thereof

Dealing with
the transfer of shares from Saddle Hill to Offshore Diamonds the
Respondent alleged that without payment to Clara Kahan, or her
consent, these shares could not be transferred. There is no
allegations that these shares were the only assets of Saddle Hill.
How Clara Kahan then became the owner of the shares is set out as
follows by the Respondent namely:


Kahan and I were the registered shareholders and vendors of Offshore
Diamonds shares, as nominees for our father to the extent of half of
the issued shares in Offshore Diamonds, we were legally responsible
to her for that default. I refer to the two letters annexed hereto,
signed by myself and Kahan, marked "PI" and

How the sale
of the shares by Saddle Hill to Offshore Diamonds could create this
legal obligation is not clear to me. The obligation to pay Clara
Kahan in terms of the divorce settlement and the cession rested on
Saddle Hill and they remained so obligated in the absence of any
agreement to the contrary. Annexures "PI" and "P2"
do also not take the matter any further. These documents, signed by
Respondent and Kahan, authorised Offshore Diamonds to allot 1 250
000 fully paid up shares to Mr. E Kahan, the father of Respondent
and Kahan.

On this
uncertain and unclear premis Respondent alleged that Clara Kahan
then permitted herself and Kahan to act as her nominees. As was
pointed out by Mr Rubens, Clara Kahan had at best a claim against
her husband's deceased for the R70,000-00. And as previously set out
this was in fact claimed from the estate. In regard to the shares of
Offshore Diamonds no legal basis was in my opinion alleged why Clara
Kahan would become the owner thereof just because of the transfer of
shares from Saddle Hill to Offshore Diamonds. It is also not clear
to me why such action by Saddle Hill would discharge the latter from
its obligation to pay Clara Kahan.

Mr. Bregman
submitted that the Court, considering what was in fact the
administration of assets amongst members of a family operating at
that stage in reasonable harmony, should not approach the issue too
technically. Mr. Bregman further explained that the transfer of the
shares by Saddle Hill divested Clara Kahan of her source of payment
as set out in the divorce settlement agreement and this could
therefore not have been done without her consent. I fail to see the
logic of this argument. In terms of the cession Clara Kahan was
entitled to payment by Saddle Hill and nothing more. There is no
allegation that the shares transferred to Offshore Diamonds were the
only or all the assets of Saddle Hill and even if that were so I
fail to see how that would have entitled Clara Kahan to the shares
of Offshore Diamonds.

Mr. Bregman
submitted that although some of the allegations could have been

stated more
fully the possibility of an arrangement between Respondent, Clara

Kahan and
Kahan is not so farfetched that it cannot be said that

could not disturb the balance of convenience as it exists on the

papers. I
have already referred to some of the anomalies to which the

of the Respondent will lead
was further pointed out by Mr.

Rubens that
Respondent had made statements under oath and in correspondence

which were
entirely inconsistent with her allegation that she only held the

shares as nominee for Clara Kahan. This concerns also the so called

bequests of shares. All documentation seems to me to refute this

by the
Respondent. See e.g. annexures "OMPR 28" and "OMPR
29". In my


opinion viva
far from disturbing the balance, can only further strengthens
Applicant's case.

It was
conceded by the Applicants that 1200 shares in Diamond Dredging and
125000 shares in Offshore Diamonds are held by the Respondent as
nominee of Clara Kahan and the Applicants do not claim that those
shares should vest in them.

3.4 THE

resolutions all affect the companies relevant to these proceedings
namely Offshore Diamonds, Diamond Dredging, Moly Copper and Lorelei.
The minutes reflect that these resolutions were taken on the 22
June, 1997, i.e. at a time after the estate of the Respondent was
already finally sequestrated in South Africa. It is common cause
that these resolutions were taken without notice to or participation
by any of the directors of the Kahan group.

Mr Rubens
attacked the validity of the resolutions on two grounds namely:

  1. That they
    were contrary to the 1982 shareholders or joint shareholders
    agreement in that the resolutions were taken by the Lidchi group
    without any participation and consent by the Kahan group; and

  2. That the
    resolutions were adopted for an unlawful purpose, namely to


the consequences of the Respondent's sequestration.

Mr Bregman
on the other hand contended that the 1982 agreement was abrogated by
the parties. He referred the Court to the many instances where the
parties were at loggerheads and submitted that none of the parties
acted in terms of the 1982 agreement.

There is no
doubt in my mind that if the 1982 agreement is still valid that the
resolutions adopted on 22 June, 1997 were invalid. In terms of this
agreement the parties agreed to exercise joint control over certain
affected companies. The affected companies, in terms of clause 1.7
of the joint shareholders agreement, were defined as Offshore
Diamonds and Moly Copper. See annexure "OMP. 9A." Certain
other disqualifications were written in which are in my opinion'not
relevant to the present proceedings. Clause 3.1.2 further stipulated
that resolutions of directors of the affected companies,
their subsidiaries
would not be effective unless agreed to by directors nominated by
the Kahan group and Directors nominated by the Lidchi group. Diamond
Dredging and Lorelei are subsidiaries of the two affected companies
as Offshore Diamonds owns 93,41% of the issued shares in Diamond
Dredging and Moly Copper owns 99,65% of the issued shares in

One looks in
vain for any allegations that the 1982 joint shareholders agreement
was cancelled by one or other of the parties. That there were

when one or other of the parties breached the agreement may be so


but there is
no indication on the documents that as a result thereof the
agreement was cancelled by any of the parties. If there was such a
cancellation it would have been the easiest thing to allege. Given
the background of mistrust and suspicion one would expect also that
such an important step would be documented. No such document seems
to be in existence.

other grounds were set out in Respondent's answering affidavit as to
why the Court should regard the 1982 joint shareholders agreement as
non­existent. None of these grounds were argued or relied upon
by Mr. Bregman and in my opinion they were without substance. I
therefor conclude that the 1982 agreement was not terminated and
that when the resolutions were taken on 22 June, 1997 they were
taken in breach of this agreement and are therefor invalid.

I am
furthermore satisfied that the trend of these resolutions and the
way in which they were obtained, as well as various other factors
such as the Respondent's stance that she is domiciled in Namibia,
that she is virtually without any assets etc., were such that
Applicants had every reason to view the situation with distrust and
apprehension and they were therefor entitled to ask the Court for an
interim interdict to safeguard the rights of the creditors in the
estate of the Respondent pending the determination of those
interests and rights. In my opinion these resolutions were clearly
calculated to prepare the

ground for
unilateral action on the part of the Respondent to deal with the


assets of
the companies in a way which could be detrimental to the interests
of creditors in her insolvent estate.


Mr Rubens
submitted that the Court should grant the cost of two instructed
counsel on a scale as between client and own Attorney. Mr. Rubens
submitted that the Respondent made unfounded and serious allegations
against the Applicants, Kahan and others. It was furthermore argued
that the Respondent, not being insolvent as far as Namibia is
concerned, should be ordered to pay the costs and that it would not
be fair to saddle the estate and the creditors with such costs.

Mr Bregman
submitted that there was no reason why the Court should order the
Respondent to pay costs on a client and attorney scale and that the
costs should be born by the estate.

In my
opinion the Respondent by making irrelevant allegations and going
into issues not really related to the relief claimed opened the door
for the Applicants to come back with a full scale attack and a
replying affidavit which, together with annexures consisted of some
531 pages, and the whole application developed into a battle between
Respondent and Kahan and which ended in nothing less than a raking
up of past and present wrongdoings and accusations of injustices
committed by the one against the other. No restraint was exercised
by either party and it was more particularly the Respondent Who made
reckless and serious allegations of dishonesty and thievery against
Kahan and others. In one instance I counted the use of no less than
five adjectives describing Kahan. The Applicants and the Respondent
must take the blame for this situation and the fact that there may
or may not be an application for the removal of the Applicants as
provisional trustees is not in my opinion a good reason why the
Applicants should have entered into the arena. I am therefor not
going to grant an order that the costs be paid on an attorney and
client or own client scale. I however also do not see reason why
under these circumstances the costs should be bom in toto by the
estate, and hence the creditors. It would in my opinion be fair to
order the Respondent, who has assets in Namibia and who is not
insolvent as far as Namibia is concerned, to pay the costs of the
Application. Mr. Bregman conceded that this was an instance where
the Court could grant costs for two instructed Counsel.

In the
result the following order is made:

  1. Paragraphs
    4.1 and 4.3 of the Rule Nisi issued by this Court on the 8th
    September, 1997 are hereby confirmed and it is specifically hereby
    declared that 1,276,852 Offshore Diamond shares, 2002 Diamond
    Dredging Shares, 13332 Moly Copper shares and 747 Lorelei shares
    vest in the Applicants.

  2. The
    Respondent is ordered to pay the Applicants costs which costs shall
    include the costs of two instructed Counsel.