Davids and Others v Veritas Kapital (Pty) Ltd and Another (SA 18/2022) [2024] NASC 32 (1 November 2024)

NOT REPORTABLE

CASE NO: SA 18/2022

IN THE SUPREME COURT OF NAMIBIA

In the matter between:

O’BRIAN BARRY DAVIDS PAMELA DAVIDS O’B DAVIDS PROPERTIES CC BV INVESTMENTS SIX HUNDRED AND EIGHTY NINE CC BV INVESTMENTS SIX HUNDRED AND NINETY CC BV INVESTMENTS SIX HUNDRED AND NINETY ONE CC BV INVESTMENTS SIX HUNDRED AND NINETY TWO CC BV INVESTMENTS SIX HUNDRED AND NINETY THREE CC BV INVESTMENTS SIX HUNDRED AND NINETY FOUR CC BV INVESTMENTS SIX HUNDRED AND NINETY FIVE CC BV INVESTMENTS SIX HUNDRED AND NINETY SIX CC BV INVESTMENTS SIX HUNDRED AND NINETY SEVEN CC BV INVESTMENTS SIX HUNDRED AND NINETY EIGHT CC BV INVESTMENTS SIX HUNDRED AND NINETY NINE CC BV INVESTMENTS SEVEN HUNDRED CC BV INVESTMENTS SEVEN HUNDRED AND ONE CC BV INVESTMENTS SEVEN HUNDRED AND TWO CC BV INVESTMENTS SEVEN HUNDRED AND THREE CC BV INVESTMENTS SEVEN HUNDRED AND FOUR CC	First Appellant Second Appellant Third Appellant Fourth Appellant Fifth Appellant Sixth Appellant Seventh Appellant Eighth Appellant Ninth Appellant Tenth Appellant Eleventh Appellant Twelfth Appellant Thirteenth Appellant Fourteenth Appellant Fifteenth Appellant Sixteenth Appellant Seventeenth Appellant Eighteenth Appellant Nineteenth Appellant
BV INVESTMENTS SEVEN HUNDRED AND FIVE CC BV INVESTMENTS SEVEN HUNDRED AND SIX CC BV INVESTMENTS SEVEN HUNDRED AND SEVEN CC BV INVESTMENTS SEVEN HUNDRED AND EIGHT BV INVESTMENTS SEVEN HUNDRED AND NINE CC BV INVESTMENTS SEVEN HUNDRED AND TEN CC BV INVESTMENTS SEVEN HUNDRED AND ELEVEN CC BV INVESTMENTS SEVEN HUNDRED AND TWELVE CC BV INVESTMENTS SEVEN HUNDRED AND THIRTEEN CC BV INVESTMENTS SEVEN HUNDRED AND FOURTEEN CC BV INVESTMENTS SEVEN HUNDRED AND FIFTEEN CC BV INVESTMENTS SEVEN HUNDRED AND SIXTEEN CC BV INVESTMENTS SEVEN HUNDRED AND SEVENTEEN CC	Twentieth Appellant Twenty-First Appellant Twenty-Second Appellant Twenty-Third Appellant Twenty-Fourth Appellant Twenty-Fifth Appellant Twenty-Sixth Appellant Twenty-Seventh Appellant Twenty-Eighth Appellant Twenty-Ninth Appellant Thirtieth Appellant Thirty-First Appellant Thirty-Second Appellant
and
VERITAS KAPITAL (PTY) LTD	First Respondent
FUTENI COLLECTIONS (PTY) LTD	Second Respondent

Coram: FRANK AJA, MAKARAU AJA and SCHIMMING-CHASE AJA

Heard: 12 July 2024

Delivered: 01 November 2024

Summary: This is an appeal against a judgment and orders of the court a quo delivered on 14 December 2021 in favour of the respondents and against the appellants. The first and second appellants entered into a loan agreement in May 2007 with the first respondent. Alleging that this agreement was breached by the appellants, the first respondent issued summons under case no. I 44/2013 for payment of the outstanding amount on the loan plus interest and costs of suit.

On a subsequent date which is not readily ascertainable, appellants entered into another credit loan agreement with the second respondent. Alleging breach of that agreement, the second respondent issued summons under case no. I 709/2013 against the appellants.

Both actions were defended. The actions a quo were referred to mediation before the same mediator. Subsequent thereto the actions were consolidated as one and proceeded as such to trial. At trial, the court a quo had to determine a limited issue as agreed to by the parties per their pre-trial reports which were subsequently made orders of court, that is, whether the parties had settled the matter.

The court a quo in addition to finding that the two actions were improperly consolidated, made two pertinent factual findings as regards the limited issue it had to determine. These findings were firstly that there was insufficient and unsatisfactory evidence to establish that the parties were ad idem as to the agreement and that it was unsafe to accept that they were. Secondly, that there was overwhelming and uncontroverted evidence in the form of status reports that were filed with the court showing that the appellants were not challenging the capital debt outstanding but only the applicable interest and costs of suit. The court therefor, applying the quasi mutual assent doctrine/the reasonable reliance principle, found that the appellants had given out that they had agreed to settle the matter with regards to the capital debt. It accordingly found for the respondents.

The appellants appealed the judgment of the court a quo. On appeal, the issue was whether or not the court a quo erred in holding that the appellants were bound to the respondents for the capital amount on the basis that an agreement to settle the debt had been reached.

Held that; the order referring the matter to trial on the limited issue was not only made in terms of the rules but was also made with the consent of the parties. A pre-trial report constitutes an agreement as between the parties, limiting the issues for determination by the court. The parties to a suit are thus bound by that agreement. Therefore, when the court made the pre-trial order it did so based on and in terms of the pre-trial reports, without having to determine the suit based on the claims in the particulars of claim. The agreement per the pre-trial reports obviated the need to determine the underlying issues in the litigation.

Held that; the court a quo could only have come to the conclusion that the evidence led on behalf of the respondents as plaintiffs, was insufficient to prove express agreement on the capital debt by comparing the evidence led on behalf of the respondents against that of the appellants, which included to a large extent, the evidence of Mr Kisting.

Held that; the trite position of the law of contract has become that where by word or deed, one party to a contract gives out to the other a certain position and that position is accepted by that other, both parties are thereby bound. In these circumstances, the contract comes into existence notwithstanding that one party’s conduct conflicts with his or her real intention. The principle is invoked against the avowed real intentions of the contesting party as in casu. It is invoked where there is insufficient evidence to establish true consensus or express agreement as in casu.

Held that; in holding that the appellants are bound by the conduct of their legal practitioners, two points must be stressed. Firstly, the evidence of Mr Linde as it related to the filing of the status reports was uncontroverted. The appellants had the opportunity, if not duty, to rebut this evidence by calling the two legal practitioners who signed and filed the status reports on behalf of the appellants. In the absence of such evidence in rebuttal, there was therefore no basis for the court a quo to reject Mr Linde’s evidence on the filing of the status reports. Secondly, by agreeing in the status reports that agreement in principle had been reached, the appellants’ legal practitioners gave out to the respondents that they had reached agreement on the capital amount.

Held that; the court a quo however erred in imposing joint and several liability on the appellants to two different respondents where there was no basis for doing so.

Held that; condonation for various non-compliances with the rules of court are condoned and the appeal is reinstated.

Accordingly, condonation is granted and the appeal reinstated. The appeal is dismissed with costs. Such costs to include the costs of one instructing and one instructed legal practitioner.

______________________________________________________________________

APPEAL JUDGMENT

______________________________________________________________________

MAKARAU AJA (FRANK AJA and SCHIMMING-CHASE AJA concurring):

Introduction

1. This is an appeal against a judgment and orders of the High Court delivered on 14 December 2021 in favour of the respondents and against the appellants. The operative part of the judgment reads –

‘In the result, I order as follows:

1. Judgment for plaintiffs against the defendants in the amounts of N$1 984 344,07 and N$1 210 115,92, one paying the other to be absolved.

2. The defendants shall pay plaintiffs, one paying the other to be absolved, interest on the amounts mentioned in para 1 of this order at the prime rate applicable from time in accordance with the credit agreements between the parties, and as already calculated by the plaintiffs; except that the interest payable shall be capped in terms of the in duplum rule.

3. Defendants shall pay one paying the other to be absolved, plaintiffs’ costs of the matters on the scale as between attorney and own client; and such costs include costs of one instructing counsel and one instructed counsel in respect of:

1. Proceedings in the matters up to 20 September 2019; and

(b) The instant proceedings wherein the court is to determine whether the parties had concluded a settlement agreement as to the balance on the capital amounts.

4. The matters are finalised and removed from the roll.’

2. Aggrieved by the order and the findings of the court a quo, the appellants noted an appeal to this Court. This is the appeal judgment.

Background facts

3. The first appellant is a businessman. He is the sole member of the close corporations cited above as third to thirty-second appellants.

4. In or about May 2007, the first and second appellants entered into a credit agreement with the first respondent. Alleging that the appellants had breached the credit agreement, the first respondent issued summons under case no. I 44/2013 for the payment of the amount of the outstanding amounts, interest thereon and costs of suit. The claim was defended.

5. On a date that is not readily ascertainable, the appellants entered into another credit agreement with the second respondent. Alleging breach of this agreement, the second respondent also issued summons against the appellants. This was under case no. I 709/2013. The claim was again defended and both matters proceeded individually and separately in terms of the rules.

6. I note in passing that the capital debt claimed in each of the two cases is not readily ascertainable. The amounts as claimed in the summons were deemed irrelevant for purposes of the proceedings a quo and consequently, for the purpose of this appeal.

7. In 2015, the disputes between the parties were referred to mediation. Three court-connected mediation sessions were held before Mr Louis du Pisani, a senior legal practitioner. The last report of the mediation session indicated that the parties had agreed to exchange financial documents. This was to enable the respective auditors of the parties to go through the documentation with a view to agreeing on the amounts outstanding. Whilst nothing turns on this, I note that this mediation report related to case no. I 709/2013 only. It reads in part as follows:

‘. . .

The parties will have their auditors discuss, review and verify the transactions reflecting in the statements of account relevant to this matter rendered to the defendant by the plaintiff and consider the same against the terms of the agreement(s) relevant to this matter concluded between the parties.

The auditor(s)/accountants of the parties will meet within 10 days from 26 February 2016 in order to determine and agree on the exchange of information and further meetings between them and the methodologies to be adopted by them.

The process referred to in 1 above is, if possible, to be concluded within 30 days from the initial meeting referred to in 2 above. If not, the said auditor(s)/accountants must give an indication by when they think it can be concluded.

To the extent that there is agreement between the auditor(s)/accountant(s) of the parties, the parties commit to accept the agreed determination and findings of the auditor(s)/ccountant(s).

The parties accept and agree that, should the above not result in final settlement, the mediation process will have failed.’

8. On 15 May 2020, the disputes remained unresolved and live before the court a quo which issued an order referring the matter to trial on one issue. The issue was whether or not the parties had reached settlement of the matter. All the parties were agreed that for the purpose of the referral, the merits of the matter as reflected and arising from the pleadings would not be adverted to as they did not fall for determination at that stage of the referral to trial.

9. In preparation for the trial, the parties set forth their respective proposals of the issues under rule 26 of the High Court Rules. This resulted in the managing judge referring the matter to trial on the following issues:

‘1.1 Whether or not the plaintiff and the defendants duly concluded a settlement agreement relating to the disputes in this matter.

1.2 If it is found that the plaintiff and the defendants did conclude a settlement agreement relating to the disputes in this matter, then, in that event:

1.2.1 When, where and how such settlement agreement was concluded;

1.2.2 Who represented the parties when such settlement agreement was concluded;

1.2.3 In so far as the defendant(s) is/are entitled to rely on this aspect as a defence vis-a-vis the plaintiff (and with reservation of the plaintiff’s rights in this regard), the authority or lack thereof of the defendant’s representatives; and

1.2.3 The terms of such settlement agreement.

1.3 Whether the matter has become settled on the merits and the terms of that settlement.

1.4 Whether the matter has become settled on the issue of costs and the terms of that settlement;

1.5 The issue of costs of these proceedings.’

[10] On 16 June 2021, the two matters were formally consolidated by an order of court. The parties were accordingly ordered to re-file their respective witness statements presumably so that these would relate to the two matters that had now been consolidated. This they duly did, making the consolidated matter ready for trial.

The proceedings a quo

[11] The first witness to testify at the trial was Mr Rohann Linde, a legal practitioner and the respondents’ legal practitioner in the two matters. In view of the findings that I make, it is necessary that I deal with the evidence of this witness in some detail.

[12] Mr Linde testified that in 2015, the two matters were referred to mediation before Mr du Pisani. He also testified on the position at which the matter was when Mr du Pisani filed his last mediation report. The witness further testified that after the court connected mediation sessions, the parties also attended two other private mediation sessions before the same mediator. This was between March 2017 and June 2017. It was his evidence that during the first quarter of 2017 and I quote: ‘ . . . the parties in their last two mediation sessions determined that the auditors of the parties concluded that the capital outstanding as per the financial records of the plaintiff is correct and that the methodologies applied to calculating and arriving at same are . . . in order. In other words, the parties agreed that as their respective auditors were satisfied with how the capital (as well as the interest for that matter) was calculated and arrived at, the capital amounts were agreed upon and what remained to be determined was the issue of interest and in particular the application or not of the in duplum rule’.

[13] The witness further testified that as a result, the parties had on 3 May 2017, jointly filed a status report with the court in which it was indicated that as an outcome of the last mediation session, the only remaining dispute between the parties was the calculation of the interest that had accrued on the capital amounts.

[14] The witness was clear that the capital amount was determined at the mediation sessions. In his words:

‘It was clear that the capital amount was no longer in dispute and that the capital was determined at the mediation.’

[15] It was the witness’s evidence that the agreement on the capital amount outstanding was based on the statements that the respondents’ auditor had availed to the appellants’ auditor ‘as Mr Kisting has agreed with the calculation and determination of the capital and the amounts reflected as same’. The witness was unaware of any communication indicating that the appellant’s auditors denied the accuracy of the figures that had been supplied to them by the respondents.

‘To date I am not aware of any correspondence directed to my office in which Mr Kisting indicated that he denies accuracy of the plaintiffs’ calculations in so far as the defendant intends to rely on the assertion that the plaintiffs’ accepted that his failure to respond to my e-mail of 2 May 2017 is . . . to the veracity or accuracy of the plaintiffs’ calculations.’

[16] The witness continued to testify that on 14 June 2017, the parties filed a joint status report with the court stating that the parties had reached consensus that the capital amount had been established and that the matter would be referred to court as a stated case to determine the interest due and payable.

[17] The witness duly prepared a draft of the stated case and submitted same to the appellants’ legal practitioners together with an annexure showing a breakdown of the capital outstanding. As at 14 March 2018, the appellants were still considering the draft stated case. A status report to that effect was filed with the court. On 7 November 2018, the appellants indicated that they did not think that the stated case route was viable. Thereafter the parties convened a roundtable conference during which it was agreed to file further pleadings in the matter.

[18] When the respondents failed to file a further pleading in terms of the court order, the parties met again to move the case forward and it was agreed at that stage to resolve the dispute by private arbitration. The issue that had to be referred to arbitration was the limited issue of interest. The parties failed to agree on an arbitrator. In an effort to have the matter finalised, the respondents agreed to have interest on the capital amounts capped by the application of the in duplum rule. The offer was made to the appellants who did not at that stage indicate that they had issues with the capital amount outstanding. A status report was filed on 14 August 2019 where it was indicated that should the offer of the application of the in duplum rule on interest be accepted, final figures would then be calculated and confirmed in a settlement agreement. Again the statement is made that: ‘the parties already knew what the capital figures were as these were determined and agreed upon at mediation’.

[19] The witness further testified that the appellants clearly represented that they knew the amount of the capital outstanding. This, the witness stated, was borne out by the fact that the first appellant never disputed these figures and accepted the respondents’ offer of applying the in duplum rule to the calculation of interest. On 19 September 2019, the second appellant specifically accepted the offer, saying the matter need not be postponed any further as the offer made on interest had actually been made by the appellants at mediation. Put differently, the appellants indicated that the offer made by the respondents was exactly the same offer that had been made by the appellants several years past. It was on this understanding that the parties filed another status report on 20 September 2019 where it was confirmed without reservation that the matter had been settled. The status report which was signed by all parties to the dispute reads in part:

‘The matter was postponed to the 25^th day of September 2019 for a status hearing in order for the defendants to consider the settlement offer made by the plaintiff. The parties have now reached settlement in principle and are in the process of finalizing and settling a settlement agreement on the merits of the matter. What remains is the aspect of costs. The parties request a hearing in chambers with the Honourable Judge in order to obtain a suitable hearing date to argue costs. In the interim the parties will procced to finalise the settlement agreement.’

[20] It was the witness’s testimony that the settlement agreement comprised of the capital amount as determined at mediation and confirmed by Mr Kisting. It was in the sum of N$1 984 344,07 for the one matter and N$1 210 115,92 for the other.

[21] The second witness to testify on behalf of the respondents was Mr Fourie, a chartered accountant who at the material time was in charge of the affairs of the respondents. He attended the mediation sessions before Mr du Pisani. He confirmed that it was at these sessions that the parties agreed that the source documents be supplied to Mr Kisting to enable him to review such documents to establish whether the respondents’ calculations were accurate. In the event that Mr Kisting was comfortable with the figures that would constitute agreement between the parties on the figures. He calculated the respondents’ figures and submitted them to the appellants.

[22] It was the specific evidence of this witness that after having received the statements and source documents, Mr Kisting ‘reverted and indicated that he was in agreement with the calculations and figures. The only issue he had highlighted was that it appeared to him that in certain instances the interest exceeded the capital. . . . He was in agreement fully with how the capital was calculated and arrived at’. The interest payments were calculated in accordance with the terms and conditions as set out in the loan agreements. (My own underlining)

[23] In view of the finding of the court a quo that the totality of the evidence led by the respondents did not establish express or true agreement between the parties, which finding I agree with, it is not necessary that I deal with the evidence of this witness to any great detail. After his evidence, the respondents closed their cases.

[24] The appellants called Mr Faniel George Kisting as the first witness. Again I summarise his evidence.

[25] He was the appellants’ auditor when the dispute between the parties was referred to the court connected mediation. He attended some of the mediation sessions but not all. Specifically, he denied any allegations that the capital amount due by the appellants was settled or agreed upon by him because as he argued, he had no such mandate. It was his further evidence that at no stage was he ever invited to indicate that Mr Fourie and himself had settled the matter as in doing so he would have been acting outside his mandate. At some stage, he requested Mr Fourie to provide him with the detailed analysis, setting out separately the capital amount, the interest added and the legal costs. Mr Fourie had first refused to do so but later agreed. The documentation was never then handed over to him. At no stage was he ever presented with the accurate outstanding capital, and at no stage did he ever admit to Mr Fourie that the capital and or the interest due by the appellants had been correctly calculated. In his words:

‘I would never agree to the capital amount being correct. Fourie had not provided me with the detailed analysis setting out the capital, interest and legal costs which were debited to the amount, capitilised and interest added on top. Even legal costs were capitalised and were taken into account for purposes of calculating the interest monthly. This is not in accordance with proper auditing principles. The credit agreements or agreement did not reflect such a procedure.’

[26] The witness was emphatic that no settlement figures be it capital or otherwise were ever provided to him during or after mediation. He did not discuss settlement with the respondents.

[27] Mr Kisting then testified on the option available to a litigant to have costs taxed, which option the appellants were denied by the calculations made by the respondents. He proceeded to testify specifically on a loan account whose number he gave and which according to his analysis had a minimal balance outstanding of N$368,73 as at 31 March 2013. This he said was mere detail to show that no agreement from his side to establish the capital amount or the interest would have been agreed to by him. The wrong accounting principles were applied and under the circumstances, he would not agree with the calculations by Mr Fourie.

[28] After leading evidence from Mr Kisting, the appellants called as their witnesses, the second appellant, Ms Jansen and the first appellant in that order. Again in view of the point upon which the judgment a quo turned and the grounds of appeal, it is not necessary to set out in detail the evidence led from these witnesses. Suffice it to say that they all denied having settled the matter with the respondents as alleged.

[29] It was on the basis of the above evidence that the court a quo rendered the decision that it did and which I now proceed to summarise.

The decision a quo

[30] Firstly, the court a quo found that the two matters had been improperly consolidated as the parties were not the same and neither were the contracts upon which the causes of action were based.

[31] Secondly, the court was clear that the determination of the matter before it turned on the limited question whether or not the parties had settled the matter relating to the capital amounts outstanding in the two matters.

[32] The court was also clear that the burden of proof was upon the respondents to prove what they alleged and that the determination of the matter rested on the application of the legal principles establishing when a valid contract is formed.

[34] The court made several factual findings. For the purposes of this appeal judgment, I single out two as being the most pertinent. Firstly, the court a quo found that the evidence before it was ‘not sufficient and satisfactory to establish that the parties were ad idem as to the agreement and so, it was unsafe to accept it’. Secondly, the court found that there was overwhelming and uncontroverted evidence, in the form of the status reports that were filed with the court, that the appellants were not challenging the capital debt outstanding but the applicable interest and the costs of the suits that were pending before the court. On the application of the quasi-mutual assent doctrine, which the court referred to in its alternative name, ‘the reasonable reliance principle’, the court found that the appellants had given out that they had agreed to settle the matter with regards the capital debt. It thus found in favour of the respondents and against the appellants as detailed above.

[35] In the course of finding for the respondents, the court also remarked that it would attach very little if any probative value to the position of Mr Kisting on whether or not the parties had settled the matter. In its own words:

‘Defendants persisted in their contention that no such agreement about the capital amounts was reached. Indeed, in his evidence, Mr Kisting declared with great verve and alacrity that that could not be correct, because he would never have agreed to such agreement. All well and good. Mr Kisting is not a party to the proceedings, and so Kisting’s position is palpably irrelevant in this it has no probative value.’

[36] Whilst the ultimate decision of the court a quo did not turn on this observation, I advert to it because this finding gave rise to great consternation in the appellants’ camp and was raised as a ground of appeal. I will address the obiter dictum to a very limited extent when analysing the merits of the appeal.

The appeal

[37] Unhappy with the decision a quo, the appellants noted this appeal on the following grounds:

1. In the pleadings the respondents did not rely on a compromise and/or settlement agreement. In the pleadings they relied on certain agreements on the basis of which they sought the relief set out in the particulars of claim. The court therefore had no jurisdiction, competence and power to decide the matter on the limited issue, whether the parties had reached a compromise/settlement, in the absence of an amendment of the pleadings.

2. On a proper consideration of all facts together with the evidence of Mr Kisting and in the absence of a written and signed settlement agreement it was clear that there was no consensus between the parties to settle the matter as far as it related to the capital amount.

3. The court erred in its evaluation of evidence, particularly in holding that Mr Kisting’s evidence was irrelevant simply because he was not a party to the proceedings, notwithstanding that such evidence was highly relevant, assuming that the settlement agreement was properly pleaded by the respondents.

4. The court erred in not ‘making an order declarator of liability against the appellants in the absence of a declarator of enforceability and validity of the alleged settlement agreement, coupled with the fact that such settlement agreement by the parties and compromise by the appellants were not pleaded and were thus not the litis contestatio between the parties.

Written arguments

[38] In the heads of argument filed of record, the appellant argued that its attack on the judgment a quo was on three broad bases. These related firstly to the evidence of Mr Kisting which it was argued, should not have been disallowed. Secondly, it was submitted that the court a quo determined the matter (to finality) on the basis of the settlement agreement and compromise without the respondents having instituted action on that basis or amended their pleadings to allege a compromise. Lastly, it was argued that the court a quo erred in its analysis of the mediation reports, correspondence, the evidence of Mr Linde and in its application of the reasonable reliance principle in circumstances where if all the evidence was properly considered, including that of Mr Kisting, it would have found that there was no consensus between the parties to settle the matter.

[39] It was further argued, relying on authorities, that a compromise is a separate cause of action, independent from the underlying causa and must be pleaded as such.

[40] Finally, it was also argued that whilst the High Court Rules require that a party who relies on a contract must state whether or not a contract is written or oral and where and when and by whom it was concluded, and annexing the written contract where appropriate, in casu, the court a quo proceeded to find that the appellants had compromised their defence by agreeing to the capital amount without finding exactly when, where and by whom the compromise was made. Such details, not being apparent from the judgment, the compromise or agreement was thus not proved at all.

[41] The appellants also highlighted the fact that the mediation reports did not confirm a settlement agreement and none of the witnesses could say with specificity when the agreement was reached. In the circumstances, the court a quo should have been very slow in coming to the conclusion that it reached.

[42] On behalf of the respondents, it was argued in the heads of argument that the merits of the two matters were not up for adjudication a quo and are similarly not for adjudication in this appeal. If the appeal is upheld, the matters should proceed on trial a quo.

[43] It was further submitted that the evidence of Mr Linde should not be rejected as the other two legal practitioners involved in the matter were available to give evidence but did not do so.

[44] As the third and final leg of the respondent’s written submissions, it was argued that taken holistically, the evidence overwhelmingly supported the version of the respondents that the matter was settled along the lines of the order a quo.

The oral arguments

[45] The oral arguments did not differ materially from the written arguments. For the appellants, the argument that ‘a compromise’, the cause of action upon which judgment was entered against the appellants, had not been specifically pleaded, was not motivated. I take it this was a concession that in terms of the rules of court, such a procedure as was adopted by the court a quo is competent.

[46] It was the mainstay of the appellants’ argument that the court a quo could not have found that the matter had settled in the absence of a finding on the essential elements of a valid contract, in accordance with the pre-trial issues, particularly paras 1.2.1 – 1.2.2, which read:

‘1.2.1 when, where and how such settlement agreement was concluded;

1.2.2 who represented the parties when such settlement agreement was concluded . . . .’

[47] In this regard, Mr Namandje for the appellants forcefully argued and cogently so, that the totality of the evidence led, especially the evidence of Mr Fourie and Mr Kisting, who had to agree on the capital debt due, did not establish any agreement. In view of the fact that Mr Fourie had testified that Mr Kisting is the person who agreed to the capital amount, there could not have been a valid agreement as Mr Kisting did not have the authority to settle the matter.

[48] The argument that the court a quo had erred in rejecting Mr Kisting’s evidence was persisted with to buttress the main argument that the parties did not reach agreement on the capital amount. In an exchange with the court when it was suggested to him that in the absence of express agreement between the parties, the court was entitled to apply the quasi mutual assent doctrine in the circumstances of the matter, Mr Namandje argued that, the parties intended their agreement (when reached) to be reduced to writing. The fact that there was no such written and signed agreement was proof that there was no agreement. In support of this argument, Mr Namandje relied on Mr Linde’s email dated 12 August 2019 to the appellants’ legal representatives. In that email, Mr Linde wrote –:

‘1. Given that the capital amounts outstanding are not at issue and the only issue to be determined by an arbitrator is that of which principle should apply to interest calculations i.e. the in du plum (sic) rule or interest calculated on a morae basis, our client will agree that the in du plum (sic) rule apply in the calculation of the interest in this matter in order to bring finality to the dispute in this respect.

2. Should you agree, the only other issue that is outstanding is the legal costs of our client. Client seeks costs as claimed in the action.

3. A formal settlement agreement be drafted to record the specific terms of the settlement agreement which can be negotiated as per practice.

4. Should the parties agree on point number 1 and not point number 2, that the legal costs be set down for argument. . . .’

[49] Whilst maintaining this submission, Mr Namandje could not point to any evidence on record that evinced such an intention.

[50] To his credit, Mr Namandje conceded that the appellants could neither dispute nor escape the filing of the various status reports by the appellants’ then legal practitioners. He however submitted that, regardless of that, better evidence was required to establish the agreement.

[51] Mr Namandje further raised a point of law that since the parties in the two matters were different, there was no legal basis upon which an order could be made, imposing liability on the appellants jointly and severally. The point of law was well taken. It is conceivable that there was some relationship between the respondents but such relationship was not pleaded. As such the respondents remained two different legal entities. Each remained entitled to judgment in its own right and name. Similarly, the appellants did not all contract with the two respondents. They had specific contractual obligations which were independent and distinct for each loan. The judgment a quo erroneously entered judgment for both plaintiffs (respondents before us), against all the appellants jointly and severally.

[52] Ms van der Westhuizen for the respondents, submitted that settlement was not reached at the last mediation session, as was testified to by the respondent’s witnesses but at subsequent interactions between the parties. Subsequent to the last mediation session, the parties filed a status report dated 3 May 2017, signed by Ms Petherbridge and Mr Linde (and on the uncontested evidence of Mr Linde – agreed to by Mr Mueller), whose contents read in part:

‘1. . . .

2. The understanding from the last mediation session seems to be that the only remaining dispute is that of the calculation of the interest in respect of the capital amount.

3. . . .

4. . . . Thirty second defendant agrees that the only issue outstanding is the calculation of the interest on the capital amount. A stated case in respect of this issue is proposed by the thirty second defendant.’

[53] To buttress her point, Ms van der Westhuizen referred the court to the further status reports signed by all the parties’ respective legal representatives on 4 June 2017 and on 29 September 2019, where it was intimated that the parties had reached consensus on the capital amounts outstanding.

[54] It was Ms van der Westhuizen’s specific argument that the external manifestations of the parties in the filing of various formal court documents and the appellants’ failures at key moments to object to the assertions by the respondents that agreement on the capital debt had been reached, was cogent evidence that an agreement had been reached. In the circumstances, it was argued, the court a quo was correct in applying the quasi-mutual assent doctrine in favour of the respondents.

[55] The point was also highlighted in argument that the mandate of the legal practitioners to file the various status reports was not at any stage challenged. No suggestion was made that in filing the status reports, the appellants’ legal practitioners were acting outside the scope of their respective mandates.

[56] The respondents’ counsel further submitted, validly, that both Ms Petherbridge and Mr Mueller, who filed the various status reports with the court, were available to testify at the trial of the matter but, were not called as witnesses. In the reports that they filed, it was intimated that the parties had agreed on the capital debt and that the only outstanding issues were whether the in duplum rule should apply to the computation of the interest and the costs of suit.

[57] Counsel also conceded that since the matter a quo consisted of two separate matters that were consolidated, the order a quo should be corrected to reflect the order made in respect of each. Put differently, the orders should be corrected to clearly indicate the amounts due to each of the two respondents. Ms van der Westhuizen also conceded that the order of costs made a quo be corrected to conform to the pre-trial order. The issue of costs a quo has to be remitted for argument as it did not fall for determination in the proceedings a quo.

The issue

[58] This matter turns on a sole issue. It is to establish whether or not the court a quo erred in holding that the appellants were bound to the respondents for the capital amount on the basis that an agreement to settle the debt had been reached.

[59] As I analyse the appeal below, the reason why I deliberately frame the issue in this narrow fashion will become apparent.

Analysis

[60] For structure, convenience and completeness, I shall analyse the appeal by addressing the appellants’ grounds of appeal.

[61] The first ground of appeal sought to attack the judgment a quo on the basis that the pleadings of the respondents a quo did not allege a compromise and/or settlement agreement and therefore judgment could not have been entered in their favour on the basis of a settlement as occurred in casu especially in the absence of any amendments to the pleadings. This is no longer an issue falling for determination in this appeal. As indicated in para [48] above, the argument that ‘a compromise’, the cause of action upon which judgment was entered against the appellants had not been specifically pleaded, was not motivated. As indicated above, I take this as a concession on Mr Namandje’s part. The concession, if it was one, was well made. The order referring the matter to trial on the limited issue was not only made in terms of the rules but was also made with the consent of the parties.

[62] A pre-trial report constitutes an agreement as between the parties, limiting the issue(s) for determination by the court.¹ The parties to a suit are thus bound by that agreement. Therefore, when the court made the pre-trial order it did so based on and in terms of the pre-trial report(s) filed by the parties. The court a quo was thus correct to determine the limited issue, without having to determine the suit based on the claims in the particulars of claim. The agreement per the pre-trial report(s) obviated the need to determine the underlying issues in the litigation. In the circumstances, it becomes untenable to argue that the court a quo lacked jurisdiction to determine the matter as it did.

[63] In the second ground of appeal, it was argued that on a proper consideration of the totality of the evidence, including the absence of a written and signed agreement, the court a quo erred in finding that there was agreement between the parties as to what constituted the capital debt. This was the main argument for the appellants and as I indicated above, forms the sole issue for determination in this appeal. The argument was made from various angles.

[64] The totality of the evidence that the appellants argued must have been properly assessed included the evidence of Mr Fourie and Mr Kisting, the two accountants who had to agree on the calculations of the capital debt and the interest chargeable on the debt. It was argued that such evidence did not establish the agreement that was upheld by the court a quo.

[65] At this stage, I digress for a moment to observe that the evidence of Mr Kisting on this point was not only relevant and material but had high probative value. His participation and assent would have been instrumental in establishing whether or not the parties had reached agreement on the amount of the capital debt. There can be no doubt about this. Any finding to the contrary would be erroneous. To the extent therefore, that the court a quo implied that the evidence of Mr Kisting on this aspect had no probative value, it would have fallen into error. I am however persuaded that this was not the finding of the court a quo. I say so because the overall finding of the court a quo was that the evidence led on behalf of the respondents as plaintiffs, was insufficient to prove express agreement on the capital debt. The court could only have come to this conclusion by comparing the evidence led on behalf of the respondents against that of appellants, which included, to a large extent, the evidence of Mr Kisting.

[66] Even assuming that the court a quo erroneously held that the evidence of Mr Kisting was of no probative value, it nevertheless came to the correct conclusion that the interactions between the parties involving Mr Kisting, did not yield a settlement agreement.

[67] It is important to emphasise that the parties themselves did not at any stage agree on the amount of the capital debt. It is also important to emphasise that the court a quo correctly made this finding that the parties did not expressly agree to settle the matter. Equally important to note is that it was not the finding of the court a quo that any agreement as to the capital debt was reached between the auditors of the parties as had been anticipated at the mediation sessions before Mr du Pisani. I make these observations because the bulk of the appeal was directed at urging us to hold that there was no express agreement between the parties, which position the court a quo endorsed in favour of the appellants. The bulk of the appeal was therefore mounted against a finding that was in actual fact in favour of the appellants. This is so because the court a quo specifically found that there was no evidence showing that the parties were ad idem the settlement.

[68] There was hardly any attack on the actual ratio decidendi of the decision a quo, if it is accepted, which it must, that the critical finding of the court a quo, one upon which its judgment rested, was that the appellants were bound because their legal practitioners misrepresented to court and to the respondents that they accepted the amount of the capital debt, in circumstances where their respective agency to represent the appellants was not challenged. This they did by filing the various status reports that I have detailed above.

[69] I note that no ground of appeal directly challenged this finding. That notwithstanding, Mr Namandje orally made submissions regarding the status reports filed on behalf of the appellants. Whilst conceding the filing of the reports, he urged us to find that better evidence was required over and above the status reports to prove the settlement.

[70] The position adopted by Mr Namandje in this regard is reminiscent of and consistent with the legal position obtaining before the quasi-mutual assent doctrine took hold in this and other jurisdictions. Case authorities of old indicate that consensus ad idem or the meeting of the minds, as a necessary ingredient of a contract, was subjectively tested and was only established by ‘true’ agreement.² Such cases, in which the doctrine of quasi-mutual assent was not raised and considered, hardly bind as precedent as the doctrine of quasi-mutual assent is now an entrenched part of the law of contract in the land and has been so for quite some time. The doctrine has become so entrenched in the law of contract that Christie makes the following observation:

‘In fact the importance of the doctrine is such that no dispute on the existence of an agreement can properly be resolved without calling it in aid. It has been said above that it is often sufficient to say that there is no contract because the parties were never ad idem, but even though this terse explanation of one’s reasoning may be sufficient in a clear case, one’s reasoning must always proceed as follows: judging by the external manifestations, were the parties ad idem? If so, there was an agreement. If not, was the one party entitled to assume, from the words or actions of the other, that they were truly ad idem? If so, there will be deemed to have an agreement. If not, then and only then is one entitled to say there was no agreement.’³

[71] The doctrine, upon which the judgment a quo is based, has become an intrinsic and objective assessment of whether there has been an offer made and accepted, resulting in the formation of a valid contract. The trite position of the law of contract has become that where by word or deed, one party to a contract gives out to the other a certain position and that position is accepted by that other, both parties are thereby bound. In these circumstances, the contract comes into existence notwithstanding that one party’s conduct conflicts with his or her real intention.

[72] The principle is invoked against the avowed real intentions of the contesting party as in casu. It is invoked where there is insufficient evidence to establish true consensus or express agreement as in casu. In this jurisdiction, the doctrine has been invoked and applied in the following cases: Namibia Office Equipment Company (Pty) Ltd t/a Nashua Namibia v de Waal CC (HC-MD-ACT-CON-2023/03755) [2024] NAHCMD 188 (24 April 2024), Geomar Consult CC v China Harbour Engineering Company Ltd Namibia & others (I 2115/2015) [2021] NAHCMD 455 (5 August 2021), Henred Fruehauf (Pty) Ltd v Enkali (HC-MD-CIV-ACT-CON-2016/03741) [2019] NAHCMD 392 (30 September 2019), Kaunapaua Ndilula N.O. v Caprivi Building Constructors CC & others (HC-MD-CIV-ACT-CON-2017/00954) [2019] NAHCMD 456 (5 November 2019).

[73] On the basis of the above, we must decline the invitation by Mr Namandje that we seek better evidence on whether or not a settlement was reached. The reasoning by the court a quo that the various status reports filed on behalf of the appellants constituted conduct that triggered the invocation and application of the doctrine against them cannot be faulted. Indeed, apart from submitting that there is need for better evidence, Mr. Namandje did not challenge the application or content of the principle.

[74] It was the specific finding of the court a quo that notwithstanding the fact that the appellants had not expressly agreed to settle the matter and further that the auditors they had mandated to look at the figures for that purpose had also not specifically reached agreement on how much was outstanding, the appellants legal practitioners had nonetheless conducted themselves in a manner that bound the appellants to the debt in the amounts alleged.

[75] The agency of the appellants’ legal practitioners to bind the appellants was not challenged either in the grounds of appeal or in the submissions made before the Court. As to the binding nature of the conduct of legal practitioners on their clients, I can do no better than repeat the remarks made in Worku v Equity Aviation (Pty) Ltd:

‘The lawyer and client relationship is no more than that of principal and agent. As such it is trite that when an agent acts within his apparent or ostensible authority, the principal is bound thereby even if he or she has given private or secret instructions to the agent limiting the authority. It is equally trite that the authority of the agent is generally construed in such a way as to include not only the powers expressly conferred upon him or her, but also such powers as are necessarily incidental or ancillary to the performance of his mandate. In order to escape liability it would be necessary for the principal to give notice to those who are likely to interact with the agent, qua agent, of the limitations imposed by him or her upon the agent's apparent authority. . . .’⁴

[76] In holding the appellants bound by the conduct of their legal practitioners, two points must be stressed. Firstly, the evidence of Mr Linde as it related to the filing of the status reports was uncontroverted. As was cogently pointed out by Ms van der Westhuizen, the appellants had the opportunity, if not duty, to rebut this evidence by calling the two legal practitioners who signed and filed the status reports on behalf of the appellants. In the absence of such evidence in rebuttal, there was therefore no basis for the court a quo to reject Mr Linde’s evidence on the filing of the status reports, which evidence I have summarised above.

[77] Secondly, and equally important, by agreeing in the status reports that agreement in principle had been reached, the appellants’ legal practitioners represented to the respondents that they had accepted the respondents’ invitation to tread as testified to by Mr Linde. In this regard, I make reference firstly to the joint status report dated 3 May 2017 signed by Mr Linde (who represented the respondents), Ms Petherbridge (who represented Ms Davids) and discussed with and agreed to by Mr Mueller (the legal representative of the rest of the appellants), which reads inter alia:

‘2. The understanding from the last mediation session seems to be that the only remaining dispute is that of the calculation of the interest in respect of the capital amount.’

Thereafter, the parties through their legal representatives filed a joint status report dated 20 September 2019. Therein they reported that the ‘parties have now reached settlement in principle and are in the process of finalizing and settling a settlement agreement on the merits of the matter. . . What remains is the aspect of costs. . . ’.

[78] In the circumstances, the appeal against the judgment and orders a quo cannot succeed and stands to be dismissed.

[79] Notwithstanding the finding that I make above, the judgment a quo erred in imposing joint and several liability on the appellants to two different respondents where there was no basis for doing so, a point raised by Mr Namandje and conceded to by Ms van der Westhuizen. The judgment a quo will need to be corrected in this respect.

[80] Further, regarding costs of the proceedings a quo, the pre-trial conference order referring the matter to trial was clear that the issue was excluded from the limited issue that the court a quo had to determine. Notwithstanding that exclusion, the court a quo did determine the issue and found that no evidence had been placed before it to persuade it to depart from the default position of costs following the event. It then made an order as to costs.

[81] The order of costs was not only made against the order of the judge referring the matter to trial but also against the submission of respondents’ counsel who throughout, was keenly aware that the determination of the limited issue would not dispose of the matter and that the question of costs was not part of the alleged agreement between the parties. I have referred to his observations in this regard in an earlier part of this judgment. In the circumstances, the costs order was improperly made and must be vacated. Again, counsel for both parties are agreed that the order a quo must be corrected in this regard, with the issue of costs being remitted a quo for determination.

Condonation application

[82] There are however a number of non-compliances on the part of the appellants. A condonation application was filed by Mr Davids, accompanied by an explanatory affidavit by the appellants’ legal representative, Ms Feris.

[83] The appellants’ notice of appeal was filed out of time. Since the impugned judgment was delivered on 14 December 2021, the notice of appeal was due for filing on 13 January 2022. The notice of appeal was however only filed on 25 March 2022. The record which was due for filing on 14 March 2022, was only filed on 24 June 2022. A condonation and reinstatement application was filed for these two non-compliances. However, in addition to these two non-compliances, the appellants also failed to comply with rule 11(10), the appellants’ heads of argument are not indexed and the judgment of the court a quo is incomplete, and further non-compliances were also pointed out by the respondents. The respondents pointed out that the record is incomplete in that, documents dealt with, referred to and handed up in court were omitted from the appeal record. These are, the sworn translation of the annexure to Mr Linde’s affidavit a quo as well as Annexures ‘WF 3.1, WF 6 and 4.1’. While no subsequent condonation application was filed for these further non-compliances, the appellants’ legal representative filed an explanatory affidavit, to supplement the already filed condonation application.

[84] In the condonation application deposed to by Mr Davids, it is explained that whilst he was informed by his son on 14 December 2021 (the day the judgment a quo was delivered) of the delivery of the judgment a quo, he was unable to get an appointment with any lawyer during December 2021 and early January 2022 as law firms had closed for the festive season. He had however spoken with a certain Mr Tromp a representative of the respondents ‘for purposes of seeing whether the parties could discuss the judgment to reach an amicable solution’. He too informed him (Mr Davids) that he was on leave. However and on 11 January 2022 after Mr Tromp’s return from leave, Mr Tromp, his assistant, Mr Davids, Ms Davids and Ms Jansen met to discuss the judgment in an attempt to seek an amicable solution. The meeting ended in a friendly manner. The settlement discussions continued and the appellants sold one of their units and instructed a lawyer from Koep & Partners to provide Mr Tromp with a letter of undertaking for the payment on behalf of the appellants. The appellants were also actively working towards disposing off further properties to enable them to settle the judgment debt.

[85] During these settlement talks, so it is averred, the Deputy Sheriff visited Ms David’s premises on instructions of the respondents for purposes of judicially attaching her property. Mr Davids contacted the Deputy Sheriff and requested that the execution of the court order be held in abeyance to afford him an opportunity to talk to Mr Tromp. He could however not get hold of Mr Tromp. When eventually he got hold of Mr Tromp, the latter refused to accept the letter from Koep & Partners and required immediate payment of the entire judgment debt. On 15 March 2022, some movable properties of the third respondent were attached in Outapi. Mr Davids forwarded the writ of execution to his son (in Windhoek) to speak to the Deputy Sheriff, who informed Mr Davids’ son that an auction was already scheduled for 13 April 2022.

[86] Mr Davids then contacted Mr Namandje, his present legal representative. He met with Mr Namandje during the period 18 – 21 March 2022 and was advised that there were ‘massive prospects of success’ on appeal. The notice of appeal was then filed on 25 March 2022. The appellants as such sought condonation for the late noting of the appeal and the appeal record and as such sought reinstatement of the appeal.

[87] In her explanatory affidavit, Ms Feris deposed that upon receiving instructions for the appeal, their office contacted the High Court to locate the court file (a paper file as opposed to an electronic file). As required in terms of High Court procedure, the file was requested on 6 April 2022. On 1 April 2022, she contacted Mr Linde, respondents’ legal representative calling for a meeting in terms of rule 11(10). The meeting was held on 6 April 2022 and at the meeting, she informed him of the difficulty she experienced in obtaining the file for the compilation of the appeal record. The file was only located on 28 April 2022. On 9 May 2022, she provided Mr Linde with a draft of the index to the appeal record. On 11 May 2022, a further meeting in terms of rule 11(10) was held between the parties’ legal representatives who then finalised the index.

[88] As regards the incompleteness of the record, Ms Feris averred that this was due to human error and condonation is sought in that regard as well.

[89] During submissions before this court, Mr Namandje argued that the two last pages of the judgment are inconsequential and that the portions of the judgment relevant to the appeal form part of the record. As regards annexure ‘WF1’, he argued that same could be found on page 239 of volume two of the appeal record and therefore forms part of the record. He also corrected the erroneous averment by Ms Feris that the record was filed within three months from the date the notice of appeal was filed. He correctly conceded that the record was indeed filed out of time as it was filed more than three months after the date of the impugned judgment. He sought condonation and reinstatement of the appeal.

[90] On her part, Ms van der Westhuizen, submitted that the fact that the record was filed only in June 2022, when the court file was located in April 2022, showed the relaxed approach by the appellants or their legal representatives in filing the record.

[91] Having considered the non-compliances by the appellants, the explanations for the non-compliances as well as the arguments on behalf of the respondents as regards such non-compliances, I am satisfied that the non-compliance was not a flagrant disregard by the appellants of the rules of this Court. I am further satisfied that the appeal presented the court with an arguable case. I therefore condone the non–compliances and reinstate the appeal.

[92] On the issue of costs of this appeal, I see no reason why these should not follow the event. As indicated above, the issue of the costs a quo is referred back to the trial court for argument and determination.

[93] In the result,

1. The condonation application is upheld and the appeal is reinstated.

2. The appeal is dismissed.

3. The order of the court a quo is altered to read:

‘1. In case no. I 44/2013 judgment is entered for the plaintiff against the defendants jointly and severally, the one paying the others to be absolved for N$1 984 344,07.

2. The defendants shall pay interest to the plaintiff on the amount N$ 1 984 344,07 at the prime rate applicable from time to time in accordance with the credit agreement between the parties and as already calculated by the first respondent, except that interest payable shall be capped in terms of the in duplum rule.

3. In case no. I 709/2013, judgment is entered for the plaintiff against the defendants jointly and severally, the one paying the others to be absolved for N$1 210 115,92.

4. The defendants shall pay interest to the plaintiff on the amount N$1 210 115,92 at the prime rate applicable from time to time in accordance with the credit agreement between the parties and as already calculated by the second respondent, except that interest payable shall be capped in terms of the in duplum rule.’

4. The order of costs in paragraph 3 of the order a quo is deleted. The issue of costs is remitted to the court a quo for argument and determination.

5. Paragraph 4 of the order a quo is deleted.

6. The appellants shall pay the costs of this appeal, including the costs for the condonation application. Such costs shall be in respect of one instructing and one instructed legal practitioner.

_____________________

MAKARAU AJA

_____________________

FRANK AJA

_____________________

SCHIMMING-CHASE AJA

APPEARANCES

APPELLANTS:	S Namandje (with A N Feris) Of Sisa Namandje & Co Inc.
FIRST & SECOND RESPONDENTS:	C E van der Westhuizen
	Instructed by Theunissen, Louw & Partners