CASE
NO: A 195/2010
NOT
REPORTABLE
IN
THE HIGH COURT OF NAMIBIA
In
the matter between:
RACHEL
NATHANIËL-KOCH N.O. APPLICANT
and
EVERHARDUS
PETRUS FACKULYN GOUS N.O. 1ST
RESPONDENT
CHRISTOFF
TSCHARNKTE N.O. 2ND RESPONDENT
JOHN
PULESTON AS THE DEPUTY SHERIFF
OF
TSUMEB 3RD RESPONDENT
LA
ROCHELLE (PTY) LIMITED 4TH
RESPONDENT
BANK
WINDHOEK OF NAMIBIA LIMITED 5TH
RESPONDENT
THE
MASTER OF THE HIGH COURT OF NAMIBIA 6TH
RESPONDENT
THE
REGISTRAR OF THE HIGH COURT OF NAMIBIA 7TH
RESPONDENT
CORAM: HOFF,
J
Heard
on: 2010.06.28
Delivered
on: 2010.06.30
Reasons
on: 2010.07.16
JUDGMENT
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$11.250.000.00 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.
_________
HOFF,
J
ON
BEHALF OF THE APPLICANT: MR S NAMANDJE
Instructed
by: SISA NAMANDJE & CO.
ON
BEHALF OF THE RESPONDENT: ADV. HEATHCOTE
ASSISTED BY: ADV. SCHICKERLING
Instructed
by: KOEP & PARTNERS
Nathaniel-Kock NO v Gous NO and Others (A 195/2010) [2010] NAHC 78 (30 June 2010);