Koch NO v Gous NO and Others (A 195/2010) [2010] NAHC 51 (16 July 2010);


Full judgment

CASE NO: A 195/2010



In the matter between:












Heard on: 2010.06.28

Delivered on: 2010.06.30

Reasons on: 2010.07.16


Urgent Application

HOFF, J: [1] This is an urgent application brought by the applicant on 28 June 2010 in which she sought the following relief:

2. A rule nisi be issued directing any of the respondents to show cause if any on a date to be determined by the Registrar of this Honourable Court why the following order should not be made:

2.1 staying the execution in the matter between Everhardus Petrus Fackulyn Gous N.O. and Christoff Tscharnkte N.O. in their capacity as trustees of the La Rochelle Rochelle Ranch Trust as plaintiff and La Rochelle (Pty ) Ltd pas defendant, Case No. I 4241/2009 be stayed pending an application to be brought in due course by the applicant as per the unsigned copy of the affidavit marked “RNK 14” and a further application to be brought against the third respondent both of which shall be filed in the period between the 22 June 2010 but before a period of 10 days after the court order in this matter;

2.2 that the third respondent be ordered to return goods attached as per the inventory attached hereto to the farm La Rochelle Ranch Hunting and Guest Farm, Tsumeb district pending the finalizaton of the applications to be brought by the applicant in due course as per paragraph 2.1 hereof;

2.3 directing the first, second and third respondents in case they oppose this application, to jointly and severally the one to pay the other to be absolved to pay the costs of this application on the scale as between legal practitioner and his own client granting to the applicant;

2.4 further and/or alternative relief as this Honourable Court may deem fit in the circumstances;

2.5 that the rule nisi in paragraph 2.1 and 2.2 above shall serve as an interim relief with immediate effect.”

[2] The first and second respondents opposed this application.

[3] RNK 14 relates to an application to be brought to review and set aside the decision of the Registrar of this court given in a default judgment in respect of a claim by La Rochelle Ranch Trust against La Rochelle (Pty) Ltd (4th respondent) and given in favour of La Rochelle Ranch Trust in the amount of N$11,250.000.00.

[4] The second application referred to (supra) relates to the attachment of applicant’s personal goods and belongings by third respondent.

[5] At the inception of this application I ruled that the application may be argued only on the founding affidavit as agreed between the parties.

[6] On 30 June 2010 I dismissed this application with costs which costs include the costs of one instructing and one instructed counsel. At that stage I indicated that reasons would be provided on 10 July 2010. Since 10 July 2010 fell on a Saturday I now provide the reasons on 16 July 2010. These are the reasons:

[7] The applicant, cited as bringing this application in her capacity as executor of the estate of the late Hans Jurgen Koch, stated in her founding affidavit that the application was being brought also in her personal capacity.

[8] The applicant was married to the late Hans Jurgen Koch on 29 December 2006 out of community of property. On 3 October 2008 Hans Jurgen Koch died.

[9] The applicant in her founding affidavit stated that after the death of her husband she had been involved in a dispute with the first and second respondents. She stated that she brought an application which was purportedly settled during December 2008 and that she subsequently had been advised that the settlement agreement was unenforceable in particular clause 1 thereof.

[10] The settlement agreement referred to was signed subsequent to an application brought by the applicant inter alia to interdict and restrain first respondent from exercising any function as director of La Rochelle (Pty) Ltd and to set aside first respondent’s purported appointment of himself as director of La Rochelle (Pty) Ltd.

[11] Clause 1 of the settlement agreement reads as follows:

The parties hereto agree that the Deed of Donation into Trust dated the 1st of November 2002 of the La Rochelle Ranch Trust, executed by Danie Jansen van Vuuren on that date is accepted by all parties cited herein valid and binding on them.”

Clause 5 reads as follows:

In full and final settlement of all Applicant’s claims against any of the Respondent jointly and severally, from whatever cause and howsoever arising, the parties hereto agree that on the distribution of the trust assets of the La Rochelle Trust, the trustees shall pay the Second applicant 20% of the amount to be distributed to the Namibian capital beneficiaries, being the second and third respondents.”

The second applicant referred to is the applicant in this application.

[12] Applicant stated that during October 2009 first and second applicants unsuccessfully brought on application for an interim order against her. On 16 November 2009 La Rochelle Ranch Trust issued summons against fourth respondent in the sum of N$11,250.000.00 in respect of monies lent and advanced by means of a shareholder’s loan. She stated that she was surprised by such action given the interest she had in the matter and filed a notice of intention to oppose the action “and to, in due course, bring proceedings to be joined as a party”. She stated that the aforementioned claim has no basis in fact and in law and is simply “a sham claim”.

[13] The notice referred to reads as follows:

“Notice to intervene (join) and Defend

Kindly take notice that Rachel Nathaniël-Koch who was served with summons in the above matter shall be instituting proceedings in due course to join the action, and defend.”

[14] On 10 March 2010 the Registrar granted default judgment in favour of La Rochelle Ranch Trust.

[15] Applicant stated that on 21 June 2010 when her legal practitioners checked the court file they discovered that the Registrar had granted judgment against her while the aforesaid notice was on file and as such her rights to fair administrative action and decisions were infringed.

Applicant stated that subsequent to the filing of aforesaid notice to intervene there were meetings held between the legal practitioners of the respective parties. During one such meeting the second respondent had informed her that the first respondent had informed him that the trust that was created in 2002 was simply created for purposes of transferring assets of the late Koch to the trust and to disguise such assets so that in the case of a successful extradition application and possible court orders relating to his assets such assets would be concealed in a trust.

[16] On 14 June 2010 the third respondent attended La Rochelle Game and Hunting Farm and attached and removed all movable goods on the basis of a writ of execution.

[17] The applicant stated that her personal belongings had also been attached and gave a list of the goods she claimed to be her personal property.

She stated that the action of the third respondent is “overtly unlawful” and that he used the execution to force her off the farm La Rochelle.

[18] Applicant stated that the Registrar was not entitled to grant a default judgment since application should have been made to the court and that the Registrar improperly and “insufficiently” failed to apply her mind as she failed to realize that the summons of first and second respondents did not make out a cause of action and failed to grant applicant an opportunity to be heard before granting the default judgment since she has indicated an intention to defend the default judgments.

[19] The summons alleged the following:

Payment in the sum of N$11,250.000.00 being in respect of monies lend and advanced at defendant’s special interest and request by means of a shareholders loan, which amount was due and payable on demand but which amount demands notwithstanding the defendant failed to pay the plaintiff until date.

Interest on the amount of N$ at the rate of 20% per annum a tempore morae calculated from 16 November 2009 until date of payment.”

[20] Applicant stated that the transfer of the late Koch’s assets and shareholders account to the Trust during 2002 are wholly unlawful and unenforceable on the basis that such transactions were sham and designed in the face of the extradition of the late Koch, to conceal the true nature of the assets, as such the creation of the trust and the transfer of his assets thereto were against public policy alternatively unlawful as the purpose was unlawful.

[21] Applicant stated in her founding affidavit that she had been informed by one Rita Schwalm and second respondent that first respondent had advised the late Koch in the face of an extradition request from the German Government to have a trust created in which assets were to be transferred. Furthermore one Ernst Horr a friend of the late Koch and the one who introduced first respondent to the late Koch informed her that the trust was a sham trust to conceal Koch’s assets and that Rita Schwalm held shares as a nominee for the late Koch.

[22] Applicant argues that consequently the transactions relating to the transfer of the late Koch’s assets to the trust were unenforceable, that the settlement agreement signed by the parties during December 2008 which purported to confirm the lawfulness of the trust, is itself unlawful as it is against public policy to enter into an agreement with effect to cover an elict dealing and/or transaction, and that such clauses or provisions are therefore unenforceable.

[23] It was submitted on behalf of applicant that the allegations in the summons did not make out a case as to the terms of demand, if any, and in terms of a date on which defendant ought to have repaid the alleged amount or if the defendant was allowed to pay in a reasonable time after demand, it does not allege that a reasonable time has passed hence the alleged debt is due and payable.

[24] In Standard Bank of South Africa (Pty) Ltd v Oneanate Investments (Pty) Ltd (In Liquidation) 1992 (2) SA 811 (SCA) at 825 E Zulman JA referred with approval to a passage in B W Kuttle & Association Inc. v O’Connell Manthe and Partners Inc. 1984 (2) SA 665 CPD at 668 C – D where Tebbutt J said the following:

The object of a summons is not merely to bring the defendant before court; it must also inform the defendant of the nature of the claim or demand he is require to meet. But it need do no more than that. It need not go into minute particulars. It is for this reason that a Supreme Court summons has been described as ‘merely a label … or a general indication of claim.”

See also Volkskas Bank Ltd v Wilkinson and Three Similar Cases 1992 (2) SA 388 CPD at 394 J – 395 D.

[25] In the Standard Bank case (supra) a simple summons was served and an amount of R1 011 010 65 was claimed “being the amount due and payable to the plaintiff by the defendant at its special instance and request (plus charges and interest thereon to October 24, 1990.”

[26] Zulman JA in Standard Bank (supra) said the following with reference to this claim at 825 E – G:

A simple summons stands on its own feet. So, for example, a plaintiff’s right to obtain summary judgment will be adjudicated upon in the light of averments made in the summons. There can be no doubt that the simple summons in the instant matter sets out a ‘cause of action’. This ‘cause of action’ is based upon a claim for an amount due and payable by the defendant to the plaintiff in respect of moneys lent and advanced to the defendant by way of overdraft at the former’s special instance and request. This is sufficient particularity to enable the defendant to be aware of what was being claimed from it and is sufficiently clear to have enabled a court to have decided whether to have granted judgment on it.”

[27] In my view the summons (referred to by the applicant in her founding affidavit) the basis on which default judgment had been granted contained sufficient particularity including a cause of action for the Registrar to have granted judgment on it.

[28] In respect of the “notice to intervene (join) and defend” which was filed on 15 December 2009 the following need to be stated: In terms of Rule 12 of the Rules of this Court any person entitled to join as a plaintiff or liable to be joined as a defendant in any action, may on notice to all parties at any stage of the proceedings, apply for leave to intervene as a plaintiff or a defendant and the court may upon such application make such order including any order as to costs as it may seem fit.

[29] This Rule requires an applicant to bring a substantive application for leave to intervene in, and oppose proceedings.

In Ex Parte Sudurhavid (Pty) Ltd: In Re Namibia Marine Resources (Pty) Ltd v Ferina (Pty) Ltd 1993 (2) SA 737 NmHC Hannah J held that in an application to intervene an applicant must satisfy the court that he has a direct and substantial interest in the subject matter of the litigation and that the application is made seriously and not frivolously.

[30] The applicant in this case never filed an application to intervene and offers no explanation in her founding affidavit why she has not followed up the notice with an application to intervene. The default judgment was granted on 10 March 2010 by the Registrar. In my view a reasonable time has lapsed during which applicant could have filed an application to intervene and the Registrar cannot be faulted for granting the default judgment in spite of the fact that a mere notice had been filed. The applicant did not even indicate in the notice when she intended to bring the application to intervene. It would in my view be unfair in these circumstances to expect of the plaintiff (La Rochelle Ranch Trust) not to apply for default judgment.

[31] It has been submitted on behalf of the first and second respondents that the applicant in her personal capacity should have instituted interpleader proceedings. I agree. In terms of Rule 58 (7) interpleader proceedings shall be stayed pending a decision by the interpleader. The applicant in this regard had an alternative remedy and there was no need to have approached this court on an urgent basis.

[32] This application is also brought by applicant in her capacity as executrix of the estate of the late Hand Jurgen Koch.

The purpose why applicant attacks the legality of the Trust, and to have it declared unlawful and void, is to obtain an order to declare all shareholdings the Trust has in the company (La Rochelle (Pty) Ltd), assets of the estate of the late Koch. The Trust is the sole member of the company, La Rochelle (Pty) Ltd.

[33] It was submitted by Mr Namandje that there was no intention to form a trust between the parties and that the respondents cannot rely on an agreement concluded during December 2008 that a valid trust had been created since the lawfulness of the trust is a matter of law and not what the parties agreed to would be binding. It was further submitted that since the allegations by the applicant are not disputed (counsel agreed to argue the application on applicant’s founding affidavit) the court should accept the applicant’s version as undisputed.

This court was referred to Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A) that court with approval referred to what was said by Innes CJ in Eastwood v Shepstone 1902 TS 294 at 302 viz:

Now this court has the power to treat as void and refuse in any way to recognize contracts and transactions which are against public policy or contrary to good morals.”

[34] Smallberger JA in Sasfin at p 9 B – C said the following in respect of contracts contrary to public policy:

No court should therefore shrink from the duty of declaring a contract contrary to public policy when the occasion so demands. The power to declare contracts contrary to public policy should, however, be exercised sparingly and only in the clearest of cases, lest uncertainty as to the validity of contracts result from an arbitrary and indiscriminate use of power. One must be careful not to conclude that a contract is contrary to public policy merely because its terms (or some of them) offend one’s individual sense of propriety and fairness.”

(See also Ex parte Minister of Justice & In Re Nedbank Ltd v Abstein Distributors (Pty) Ltd and Others and Donelly v Barclays National Bank Ltd 1995 (3) SA 1 (A).).

[35] The onus is on the applicant to show in her founding affidavit that a prima facie cause of action has been made out.

(See Stipp and Another v Shade Centre and Others 2007 (2) SA 627 Nm SC at 635 H – I ).

[36] Applicant in her founding affidavit stated that she had been informed by Rita and second respondent that first respondent had advised the late Koch, having regard to the extradition request by the German Government to the Namibian Government in November 2002, to have a trust created in which assets were to be transferred and that there was no bona fide intention to create a trust for and on behalf of the beneficiaries.

She also referred to what a certain Ernst Horr allegedly has said to her viz that the trust was a “sham trust” to conceal Koch’s assets.

[37] In Honore’s South African Law of Trusts 5th Edition the writer at p 107 states that the mere fact that the object of a trust is to protect the beneficiary against claims of creditors, does not make it unlawful.

[38] One of the essentials of creating a valid trust is that the trust object must be lawful. In Peterson and Another NNO v Claasen and Others 2006 (5) SA 191 CPD at 197 Bozalek J said the following:

There is, in my view, a material difference between the object of a trust and the purpose thereof. The object is openly proclaimed and ascertainable and all parties who have dealing with that trust will be held to have knowledge of the trust’s object.”

and continues at p 197 D – E:

By contrast, where a trust is formed for an illegal or unlawful purpose, this knowledge is jealously guarded by those who harbor such purpose. This is but one reason, although an important one, why the purpose of a trust, where it is an illegal or immoral purpose but is known only to the founder and to the trustees, cannot be equated, in all circumstances, with that trust’s (lawful) object.”

[39] I do not understand applicant to question the validity of the object of the trust, but the purpose for which it had been created. To this extent applicant relies on hearsay evidence i.e. what other persons had told her regarding the purpose of the trust. No verifying affidavits have been annexed by the applicant to support these allegations. It is trite law that hearsay evidence is impermissible in affidavits.

If the premise is that the allegations contained in applicant’s affidavit must be accepted as true, then only those allegations which are as a rule admissible in affidavits may so be accepted.

[40] It furthermore does not appear from the founding affidavit who the creditors were from whom the beneficiaries of the trust needed protection from at the stage when the trust was created.

[41] There is much merit in the submission by Mr Heathcote, appearing on behalf of the first and second respondents, that the applicant in her capacity as executrix of the estate of the late Koch stepped into the shoes of the late Koch. This being the case and applicant relying on fraudulent purpose in the creation of the Trust, applicant cannot rely on the very same fraud allegedly committed by inter alia the late Koch in order to benefit the estate of the late Koch, or put differently an applicant cannot rely on an illegality to sustain a cause of action.

(See Peterson (supra) ).

[42] In my view the founding affidavit of the applicant (acting both her personal and official capacity) does not disclose prima facie a cause of action and for these reasons the application was dismissed.




Instructed by: SISA NAMANDJE & CO.



Instructed by: KOEP & PARTNERS