Court name
High Court Main Division
Case number
APPEAL 362 of 2013
Title

Wispeco Namibia (Pty) Ltd v Majiedt and Others (APPEAL 362 of 2013) [2013] NAHCMD 320 (06 November 2013);

Media neutral citation
[2013] NAHCMD 320
Coram
Smuts J





IN THE HIGH COURT OF NAMIBIA






NOT REPORTABLE



REPUBLIC OF NAMIBIA



HIGH COURT OF NAMIBIA MAIN DIVISION



WINDHOEK








JUDGMENT













Case no: A 362/2013













In the matter between:













WISPECO NAMIBIA (PTY)
LTD........................
..
APPLICANT








and








IGCHAAN
MAJIEDT............................
1st RESPONDENT



PENDA YA OTTO
N.O...........................
2ND RESPONDENT



KYLLIKKI SIHLAHLA
N.O..................
..
3RD RESPONDENT



THE LABOUR COMMISSIONER.........
..
4TH RESPONDENT



THE REGISTRAR OF THE LABOUR COURT



OF
NAMIBIA............................................
5TH RESPONDENT



THE REGISTRAR OF THE HIGH COURT OF



NAMIBIA............................................................
..
6TH RESPONDENT



THE DEPUTY SHERIFF FOR THE DISTRICT



OF
WINDHOEK..........................................
.
7TH RESPONDENT



Wispeco Namibia (Pty) Ltd v Majiedt (A
362/2013) [2013] NAHCMD 320 (6 November 2013)



Coram: SMUTS, J



Heard: 31 October 2013



Delivered: 6 November 2013








Flynote: Application to declare
set-off had occurred in respect of debts. The first respondent raised
the point that his debt which was under a suretyship meant that the
applicant would first need to exhaust remedies against the principal
debtor before set-off could occur. This point was found to be without
substance. The first respondent also took the point that judgment by
default had been granted by the registrar in respect of his debt and
that this was unconstitutional. The court found that it was not
necessary to determine this point as liability for the debt was not
disputed and that set-off had occurred even in the absence of the
default judgment.










ORDER










The rule is confirmed.










JUDGMENT










SMUTS, J








1] The applicant approached this court
on an urgent basis on 18 October 2013 and was granted a rule nisi
calling upon the first respondent to show cause on the return date
(of 31 October 2013) why an order in the following terms should not
be granted:



2..1) That the indebtedness of the
applicant to the first respondent in the amount of N$179,970.00 is
declared to have been set off against the indebtedness of the first
respondent to the applicant in the amount of N$187,875.65;








2.2) That the first, second, third,
fourth and seventh respondents is interdicted and restrained from, in
any manner whatsoever, taking any steps whatsoever to secure or
enforce payment or satisfaction of the amount of N$179,970.00
referred to in 2.1 above. ;








2.3) That the first respondent is
ordered to pay the costs of this application, including the costs of
one instructing and one instructed counsel.’








2] This court further directed that
paragraph 2.2 operate as an interim order pending the finalisation of
this application. Directions were also given for the filing of the
first respondent’s answering affidavit, a replying affidavit
and heads of argument. The 2nd, 3rd and 4th respondents initially
opposed the application. After the applicant undertook not to seek
any costs order against them, they withdrew their opposition. I shall
refer to the 1st respondent as the respondent in this judgment.








3] The respondent filed an answering
affidavit and the applicant replied. Both parties also filed heads of
argument although the respondents were late. The applicant also filed
an application to strike certain portions of the answering affidavit.








4] Much of the factual matter in this
matter is not in issue.








5] n the founding affidavit, the
applicant stated that it is indebted to the respondent in the amount
of N$179 970 in terms of a settlement agreement reached between them.
This settlement had occurred in the course of conciliation
proceedings between the parties under the Labour Act, 11 of 2007.
This amount was, in terms of the settlement agreement, due and
payable to the respondent on 14 August 2013.








6] The applicant further stated that
the respondent is indebted to the applicant in respect of a judgment
of this court under case number (P) I 846/2002 granted against the
respondent on 13 July 2012 in the amount of N$95 493, 85. The
applicant further stated that the amount outstanding in respect of
his judgment debt was N$187 875, 65 as at 1 July 2013. This amount
included capital and interest and certain legal costs. The applicant
contended that the debts had been set-off against each other and that
the set-off operated automatically. Despite this, the respondent had
applied for the settlement agreement reached in conciliation
proceedings to be made an arbitration award and thereafter to be made
an order of court in terms of s87(1)(b) of the Labour Act. The
urgency contended for arose from the respondent seeking to execute
the order in question. After the set-off had been pointed out by the
applicant’s legal practitioner, the respondent nonetheless
persisted with proceeding with execution steps, giving rise to the
application being brought as one of the urgency.








The respondent’s opposition



7] n the respondent’s answering
affidavit, he does not dispute that the debt, in respect of which
judgment by default was granted, was due and payable although he
states it was due and payable in about 2011 and not in October 2009
as claimed. The judgment included an award of interest a tempore
morae. The respondent disputed that interest prior to judgment was
permissible.








8] The respondent essentially raised a
two pronged defence to the application; He firstly contested the
set-off by raising matters related to the surety. He secondly
challenged the constitutionality of the default judgment.








9] He firstly pointed out that he had
signed as surety for the debts of another entity, National Aluminium
and Glass CC (the CC) to the applicant. He contended that this entity
should have been joined to this application and further contended
that the applicant was precluded from claiming the debt from him when
it had not exhausted its remedies against the CC.








10] The further defence raised
concerned the obtaining of the judgment debt. The respondent pointed
out that the default judgment was granted by the registrar under rule
31(5)(a) of the rules of this court. He submitted that the default
judgment was ulta vires the Constitution because he said that the
registrar was ‘an employee of the judiciary’ and not a
judicial officer or presiding officer as contemplated by the
Constitution. He contended that the default judgment was thus in
conflict with arts 78, 80 and 93 of the Constitution. This point was
further developed in argument at the hearing by Mr Mbaeva on behalf
of the respondent. He also relied in argument upon arts 12 and 25 of
the Constitution.








11] n the applicant’s replying
affidavit, it was pointed out that the respondent had unsuccessfully
attempted to bring a rescission application, as contemplated by rule
31(5). It had been set aside or struck out as an irregular
proceeding. It was stated that the judgment remained binding until
set aside and that the opposition to this application was an
ill-conceived attempt to recussitate the struck rescission
application. The applicant also took the point that the collateral
constitutional challenge upon the default judgment had not been
properly pleaded1
and that the respondent had not given notice to parties with a direct
and substantial interest in the constitutionality of the rule such
the Judge-President and Attorney-General.








12] The applicant further pointed out
in reply that mora interest had commenced to run upon the debt when
it had become overdue and payable in 2009.








13] The applicant’s notice to
strike sought to strike out several paragraphs in the respondent’s
answering affidavit primarily on the grounds of being irrelevant and
argumentative. In view of the conclusion I reach in this application,
it is not necessary to deal with that application which was also not
pressed in argument.








The suretyship








14] The point taken by the respondent
that the CC should have been joined (and that the application should
be struck in the absence of doing so) is without substance. The CC is
not a necessary party to these proceedings, given the nature of the
suretyship, in which the respondent bound himself jointly and
severally as surety and co principal debtor in solidum with the CC.








15] This leads to the point raised by
the respondent that the applicant was obliged to first exhaust its
remedies against the CC before it could hold the respondent liable.
This point must also fail as it fails to appreciate the nature of the
suretyship.








16] The deed of surety is attached to
the respondent’s answering affidavit. It is entitled
‘continuing covering suretyship.’ In it, the respondent
expressly binds himself ‘jointly and severally as surety for
and co-principal debtor in solidum with the customer (the CC) in
favour of (the applicant). . . for the due performance of any
obligation of (the CC) . . . to (the applicant) of an amounts which
may now or at any time be or become owing to (the applicant) by (the
CC).’








17] The deed of suretyship also
stated:



I/We
acknowledge and understand that as surety and co-principal debtor
I/we waive and renounce the benefits to which I/we may be entitled to
arising from the legal exceptions including but not limited to:



Excusion the right to require the
company to first proceed against the (CC) for payment of any debt
owing to (the applicant) before proceeding against the surety.’








18] The terms of the suretyship on two
scores relieve the applicant from first proceeding against the CC.
Firstly, the respondent had expressly renounced and waived the
benefit to rely on excussion. This express waiver and renunciation
meant that the respondent would be precluded from requiring the
applicant to first proceed against the CC.








I19] n the second place, the
respondent bound himself jointly and severally as co-principal debtor
in solidum with the applicant. This also gave the applicant the right
to proceed against him without first having to exhaust its remedies
against the CC.








20] The respondent also took the point
that the applicant had failed to give notice or serve the application
upon the members of the CC (the principal debtor). This point clearly
demonstrates a failure to appreciate the separate legal personality
of a close corporation. There is of course no need to give the
members notice of the application or cite them as parties. This point
is devoid of any substance.








Set-off








21] The principles governing set-off
were recently restated by the Supreme Court2
in the following terms:



It is
necessary to briefly pause here to explain the nature of a plea of
set-off. For this purpose I can do no better than to quote from
Amler's Precedents of Pleadings, where the learned author Harms in
the fifth edition states:








'Set-off comes into operation when two
parties are mutually indebted to each other and both debts are
liquidated and fully due. The one debt extinguishes the other
pro-tanto as effectually as if payment is made. Should the
''creditor'' seek to claim payment the defendant would have to plead
and prove set-off in the same way as a defence of payment has to be
pleaded and proved. But once set-off is established, the claim is
regarded as extinguished from the moment the mutuality of the debts
existed . . . Set-off is a form of payment brevimanu. It operates
ipso facto and not only after or as a result of a plea of set-off.



[Emphasis added.]








It is clear beyond doubt that –








only a debt
that is liquidated can be set-off. If a defendant wishes to rely on
an unliquidated debt, the defendant will have to file a claim in
reconvention and pray for the postponement of judgment on the
plaintiff's claim pending the judgment on the claim in reconvention.”








The learned author sets out the
essentials that must be alleged and proved by a party who wishes to
rely on set-off:








(a) the
existence of the indebtedness of the plaintiff;



(b) That both debts are fully due and
legally payable;



(c) That both debts are liquidated
debts. A debt is liquidated if:



(i) The debt is liquid in the sense
that it is based on a liquid document;



(ii) It is admitted;



(iii) Its money value has been
ascertained;



(iv) It is capable of prompt
ascertainment;



(d) The reciprocal debt is owed by the
plaintiff to the defendant. . . .”' 3








22] In these proceedings, the
respondent does not dispute his indebtedness under the deed of
suretyship. He merely incorrectly considers that the applicant must
exhaust remedies against the CC. In his answering affidavit he
accepts that the debt of N$95 493, 85 became ‘due on or about
2011’ but disputes that interest should run from 2009 and says
it should only run from 2011. But it is clear from the papers that
the CC was in mora in respect of the debt after October 2009 when the
amount became due. Mr Mbaeva appeared to be under the impression that
interest cannot be awarded from a date which precedes the date of
judgment. That assumption may to a large extent apply to delictual
damages which are determined in a judgment. But it has no place in
contractual claims where mora interest is claimed. What is of
importance in such claims is when the (principal) debtor was in mora.
That date can plainly precede the date of judgment and invariably
does.








23] Once the respondent had accepted
liability for the debt and given that it is also clear that he is
liable for mora interest, and given the fact that the other
requisites of set-off are present, it follows that the applicant’s
debt (under the settlement agreement) is thus extinguished by
set-off.








24] As set-off thus finds application
because the respondent’s debt was due prior to and even in the
absence of default judgment having been taken, it is not necessary
for me to deal with the constitutional challenge mounted against the
granting of default judgment by the registrar under rule 31(5)(a) and
I decline to do so, including the points raised by the applicant
against the challenge and the manner in which it has been raised and
whether art 12 can find application to the granting of judgment by
default where a debtor does not contest a claim.








25] It follows that the rule is to be
confirmed with costs. The applicant has engaged instructed counsel
and seeks a costs order to include those charges as is contained in
the rule. Those costs were in my view warranted by this matter.








26]] I accordingly make the following
order:



The rule is confirmed.













D SMUTS



Judge








APPEARANCES








APPLICANT:..............Y
Campbell



Instructed by:............Behrens
& Pfeiffer








RESPONDENTS:............T.
Mbaeva



Instructed by:....Mbaeva
& Associates









1In
accordance with
Lameck and Others v The
President of the Republic of Namibia and Others
2012
(1) NR 255 (HC).





2In
Ndjavera v Du Plessis 2010
(1) NR 122 (SC).





3Supra
at 128 – 129.