Court name
High Court Main Division
Case number
APPEAL 374 of 2013
Title

Schutz v Pirker and Another (APPEAL 374 of 2013) [2014] NAHCMD 341 (12 November 2014);

Media neutral citation
[2014] NAHCMD 341
Coram
Ueitele J










REPUBLIC
OF NAMIBIA






HIGH
COURT OF NAMIBIA MAIN DIVISION, WINDHOEK






JUDGMENT






CASE
NO.: A 374/2013






DATE:
12 NOVEMBER 2014






In
the matter between:






GERD
ALEXANDER
SCHÜTZ........................................................APPLICANT/RESPONDENT




AND






CLAUDIA
PIRKER................................................FIRST
RESPONDENT / FIRST APPLICANT






HEFNER
FARMING CC................................SECONDRESPONDENT
/ SECOND APPLICANT







Neutral citation:
Schutz v Pirker (A 374 /2013) [2014] NAHCMD 341 (12 November
2014)






Coram:
UEITELE, J


Heard:
30 October 2014


Delivered:
12 November 2014






Flynote:
Practice - Applications and motions - Notice in terms of Rule
55 and Notice of Motion in terms of Rule 65(1) of the Rules of Court
- Meaning of.






Practice
– Interlocutory proceedings - Security for costs - Incola
claiming security for costs against peregrinus - Incola does
not have a right which entitles him as a matter of course to
furnishing of security for costs by peregrinus - Court has
judicial discretion - Court should have regard to particular
circumstances of the case, and to considerations of fairness and
equity to both parties.






Summary:
The applicant commenced proceedings on 21 October 2013, by way of
notice of motion. In his notice the applicant is asking this court to
order Ms Pirker (who is the first respondent) to refrain from
interfering with Mr Simon Gaeb (who is allegedly the applicant’s
agent) and to allow Simon Gaeb to enter onto farm Hefner No. 45 to
attend to the applicant’s interest on the farm.  The
applicant is furthermore asking this court to order Ms Pirker to sign
the amended founding statement in respect of Hefner Farming CC, so as
to reflect a certain Clemens Hellman as the holder of 25% of the
members’ interest in and to Hefner Farming CC.






On
30 October 2013 Ms Pirker gave notice that she will oppose the
applicant’s application.  On 17 January 2014 Ms Pirker
gave the applicant notice, under Rule 47(1), that she requires the
applicant to furnish her with security for costs in the amount of
N$150 000.  She gave as her reasons for requiring the applicant
to furnish security for costs the fact that, the applicant is a
peregrinus of this court.  On 28 January 2014 the
applicant gave notice to Ms Pirker that he disputes Pirker’s
entitlement to security for costs.  He disputes her entitlement
to costs on the basis that, to the knowledge of Pirker, he (the
applicant) has substantial assets in the Republic of Namibia, which
assets are in excess of the security requested by Pirker.  On 11
February 2014 Pirker gave notice that on 21 February 2014 she will
apply to the Court to order the applicant to furnish security for
costs in the proceedings commenced on 21 October 2013.






On
24 September 2014 the matter was postponed to 30 October 2014 for
hearing the application for security of costs. It was further ordered
that, Ms Pirker must file her heads of argument by no later than 20
October 2014 and the applicant must file his heads of argument by no
later than 23 October 2014.  Ms Pirker only filed her heads of
argument on 23 October 2014.  On 27 October 2014 Ms Pirker
brought an application (by way of simple notice) for the condonation
of the late filing of the heads of argument.






At
the hearing of the application for security of costs on 30 October
2014 Mr Mouton who appeared for the applicant indicated that, the
applicant opposes the application for condonation, this is despite
the fact that, no notice to oppose the application for condonation
was filed. Mr Mouton opposes the condonation application on two
grounds.  The first ground of opposition is based on the
argument that the application for condonation is invalid for want of
compliance with Rule 65(1) & (4). The second ground of opposition
is that the late filing of the heads of argument prejudices the
applicant in that he had to prepare his heads of argument without
insight to the arguments on behalf of Pirker.






Held,
that Ms Pirker’s failure to timeously file the heads of
argument was not intentional, and that she sufficiently explained the
failure.  The application for security for costs was, despite
the late filing of the heads of argument, heard on the date on which
it was set down for hearing.  No demonstrable adverse effects
were placed before this Court.  That this is a clear case which
calls for this Court to exercise its discretion in favour of Ms
Pirker, and condone her legal practitioner’s failure to
timeously compliance with the court order of 24 September 2014.






Held
further
that the question whether or not the court must order a
party from whom security for costs is demanded lies within the
discretion of the court. That the court must carry out a balancing
exercise. On the one hand it must weigh the injustice to the
applicant if prevented from pursuing a proper claim by an order for
security. Against that, it must weigh the injustice to the respondent
if no security is ordered and at the trial the applicant’s
claim fails and the respondent finds himself unable to recover from
the applicant the costs which have been incurred by her in her
defence of the claim.






Held
further,
that the scale must tilt in favour of Ms Pirker for the
following reasons. The applicant is a peregrinus of this court
and he does not dispute the fact that if Ms Pirker is successful in
the main application and an order of costs is granted in her favour
it will be difficult if not impossible for her to recover from him
the costs which she has incurred in her defence of the claim against
her. The applicant simply states that he has ‘considerable
assets’ in Namibia. Firstly the assets that he claims to have
are the subject of the dispute in the main application, secondly he
does not inform this court what the value of those ‘assets’
are.






ORDER


1.
The applicant is hereby ordered to furnish security for the costs of
Ms Pirker in the main application in an amount of N$150 000.






2.
The proceedings pending before the Court are stayed until security
has been given by the applicant.







3. The matter is
postponed to 28 January 2015 at 08h30 for a status hearing.







4.
The applicant must pay Ms Pirker’s costs of this application,
the costs to include the cost of one instructing and one instructed
counsel.


JUDGMENT






UEITELE,
J






BACKGROUND






[1]
The applicant commenced proceedings on 21 October 2013, by way of
notice of motion.  In his notice the applicant is asking this
court to order Ms Pirker (who is the first respondent, but I will, in
this judgment, for ease of reference refer to her as Ms Pirker) to
refrain from interfering with Mr Simon Gaeb (who is allegedly the
applicant’s agent) and to allow Simon Gaeb to enter onto farm
Hefner No. 45 to attend to the applicant’s interest on the
farm. The applicant is furthermore asking this court to order Ms
Pirker to sign the amended founding statement in respect of Hefner
Farming CC, so as to reflect a certain Clemens Hellman as the holder
of 25% of the members’ interest in and to Hefner Farming CC.






[2]
On 30 October 2013 Ms Pirker gave notice that she will oppose the
applicant’s application.  On 17 January 2014 Ms Pirker
gave the applicant notice, under Rule 47(1), that she requires the
applicant to furnish her with security for costs in the amount of
N$150 000.  She gave as her reasons for requiring the applicant
to furnish security for costs the fact that, the applicant is a
peregrinus of this court.  On 28 January 2014 the
applicant gave notice to Ms Pirker that he disputes Ms Pirker’s
entitlement to security for costs.  He disputes her entitlement
to costs on the basis that, to the knowledge of Ms Pirker, he (the
applicant) has substantial assets in the Republic of Namibia, which
assets are in excess of the security requested by Ms Pirker.  On
11 February 2014 Ms Pirker gave notice that on 21 February 2014 she
will apply to the Court to order the applicant to furnish security
for costs in the proceedings commenced on 21 October 2013.






[3]
The application for costs did, however, not proceed on 21 February
2014.  The matter was docket allocated to me and on 23 July 2014
I called for a case planning conference for 6 August 2014. On that
day, I postponed the matter to 24 September 2014.  On 24
September 2014, I postponed the matter to 30 October 2014 for hearing
the application for security of costs. I further ordered that, Ms
Pirker must file her heads of argument by no later than 20 October
2014 and the applicant must file his heads of argument by no later
than 23 October 2014.  Ms Pirker only filed her heads of
argument on 23 October 2014.  On 27 October 2014 Ms Pirker
brought an application (by way of simple notice) for the condonation
of the late filing of the heads of argument.






[4]
At the hearing of the application for security of costs on 30 October
2014 Mr Mouton who appeared for the applicant indicated that, the
applicant opposes the application for condonation, this is despite
the fact that, no notice to oppose the applicant for condonation was
filed. I will accordingly first deal with the application for
condonation, because a determination of the application will
determine the direction of the application for costs.






B
CONDONATION OF THE LATE FILLING OF THE HEADS OF ARGUMENTS






[5]
The affidavit in support of the application for the condonation of
the late filling of the heads of arguments was deposed to by Ms H
Schneider, instructed counsel for Ms Pirker, Ms Schneider explains
her failure to timeously file her heads of arguments as follows: 
She says that prior to preparing the heads of argument she perused
the Rules of Court which pertain to the filing of heads of argument
in interlocutory applications in application proceedings and
established that Rule 71(5)(b) requires heads of argument to be filed
by all parties not more than three days before the hearing of the
interlocutory application.  She was therefore convinced that she
had to prepare and settle the heads of argument ready to be filed by
no later than Friday, 24 October 2014, leaving three clear court days
prior to the date of hearing.  She submitted that she failed to
look at the court order (of 24 September 2014) which ordered Ms
Pirker to file her heads of argument on 20 October 2014.  She
further stated that it was only when she received the applicant’s
heads of argument on the afternoon of 24 October 2014 that she was
alerted by the opening remarks that she had failed to comply with
court order.






[6]
Mr Mouton opposes the condonation application on two grounds. 
The first ground of opposition is based on the argument that the
application for condonation is invalid for want of compliance with
Rule 65(1) & (4).  He submitted that, in terms of Rule 65(4)
the application had to be in the form of Form 17, but because it did
not so comply, with Rule 65(4) it did not indicate when the applicant
had to file a notice to oppose and when he had to file his opposing
affidavit and is to that  extend void.  The second ground
of opposition is that the late filing of the heads of argument
prejudices the applicant in that he had to prepare his heads of
argument without insight to the arguments on behalf of Pirker. 
He further argued that Ms Schneider was personally present in my
Chamber and in court when I ordered that Ms Pirker file her heads of
argument on or before 20 October 2014.






[7]
Before I consider the objection raised by Mr Mouton I will briefly
digress and state that this application was argued before me on 30
October 2014 and Mr Mouton also argued an application for the
condonation of the late filing of an application to amend particulars
of claim on 03 November 2014[1]
In that application for condonation it was in exactly the same form
(the ‘short form’) as is the case in this application. 
I raised the question with Mr Mouton, whether in view of his
arguments in this matter, should I then not also regard the
application in the
Kehrmann
matter as a nullity because it did not comply with Rule 65(1) &
(4).  Mr Mouton could not give an unequivocal answer to that
question.






[8]
I now return to the current matter. Rule 65 (1) & (4) reads as
follows:






Requirements
in respect of an application






65.
(1) Every application must be brought on notice of motion
supported by affidavit


as
to the facts on which the applicant relies for relief and every
application initiating new proceedings, not forming part of an
existing cause or matter, commences with the issue of the notice of
motion signed by the registrar, date stamped with the official stamp
and uniquely numbered for identification purposes.






(2)
….






(4)
Every application, other than one brought ex parte in terms of
rule 72, must be brought on notice of motion on Form 17 and true
copies of the notice and all annexures thereto must be served, either
before or after the application is issued by the registrar, on every
party to whom notice of the application is to be given.’






[9]
When Mr Mouton argued the matter I drew his attention to Rule 55, and
asked him whether Rule 65(1) & (4) apply to interlocutory
proceedings.  His reply was that, Rule 65(1) & (4) equally
applies to interlocutory proceedings.  Rule 55 provides as
follows:






Upliftment
of bar, extension of time, relaxation or condonation






55.
(1) The court or the managing judge may, on application on notice
to every party and on good cause shown, make an order extending or
shortening a time prescribed by these rules or by an order of court
for doing an act or taking a step in connection with proceedings of
any nature whatsoever, on such terms as the court or managing judge
considers suitable or appropriate.






(2)
An extension of time may be ordered although the application is made
before the expiry of the time prescribed or fixed and the managing
judge ordering the extension may make any order he or she considers
suitable or appropriate as to the recalling, varying or cancelling of
the consequences of default, whether such consequences flow from the
terms of any order or from these rules. ‘






[10]
I do not agree with Mr Mouton for the following reasons.  In the
matter of
Yorkshire
Insurance Co Ltd v Rueben
[2]
the
court had the following to say:






There
is to my mind a substantial difference between an application being
brought on notice and an application brought on notice of motion. It
could never have been intended, when parties are already engaged in
litigation and have complied with such formalities as appointing
attorneys and giving addresses for the service of documents in the
proceedings, that, in further applications incidental to such
proceedings, the parties would be required to go through all the same
formalities again with all the concomitant and unnecessary expense.






I
am satisfied that the use of the word 'notice' in sub-rule (11) as
opposed to the 'notice of motion' in the other sub-rules to Rule 6
indicates clearly that interlocutory and other applications
incidental to pending proceedings were not intended to be brought by
way of formal notice of motion in the same way as applications
initiating proceedings.’






The
argument of Munnik, J in the Yorkshire Insurance case apply
with equal force to the present matter, and the objection by Mr
Mouton that the application for condonation does not comply with rule
65(1) & (4) is ill-conceived and I reject it.






[11]
The question whether or not I will condone the late filing of the
heads of argument falls within my discretion, which I must exercise
judiciously. Rule 56, assist me in the exercise of my discretion in
that it outlines some of the guidelines I must consider in the
exercise on my discretion, those guidelines are:






56.
(1) On application for relief from a sanction imposed or an
adverse consequence arising from a failure to comply with a rule,
practice direction or court order, the court will consider all the
circumstances, including -






(a)
whether the application for relief has been made promptly;


(b)
whether the failure to comply is intentional;


(c)
whether there is sufficient explanation for the failure;


(d)
the extent to which the party in default has complied with other
rules, practice directions or court orders;


(e)
whether the failure to comply is caused by the party or by his or her
legal practitioner;


(f)
whether the trial date or the likely trial date can still be met if
relief is granted;


(g)
the effect which the failure to comply has or is likely to have on
each party; and


(h)
the effect which the granting of relief would have on each party and
the interests of the administration of justice.’






[12]
In this matter, Ms Schneider has stated that she only came to realize
that she has not complied with the court order of 24 September 2014
in the late afternoon of Friday, 24 October 2014. When she realized
her non-compliance she promptly brought an application for the
condonation of her failure to comply with the court order on Monday,
27 October 2014.  She further stated that her failure to
timeously file the heads was caused by her oversight to take into
consideration the court order, she only had regard to the Rules of
Court.  I am accordingly satisfied that her failure to timeously
file the heads of argument was not intentional, and that she
sufficiently explained the failure.  The application for
security of costs was, despite the late filing of the heads of
argument, heard on the date on which it was set down for hearing. No
demonstrable adverse effects were placed before me.  I am
accordingly of the view that this is a clear case which calls for me
to exercise my discretion in favour of Ms Pirker, and I accordingly
condone her legal practitioner’s failure to timeously
compliance with the court order of 24 September 2014. I will
accordingly proceed to deal with the application for costs.






C
SECURITY FOR COSTS






[13]
The affidavit in support of the application for security of cost was
deposed to by Mr Udaneka Nakhamela the legal practitioner
representing Ms Pirker.  In the supporting affidavit Mr.
Nakhamela advanced the following reasons for demanding security from
the applicant.






(a)
That a search was conducted at the Deeds Registries Office and the
search did not reveal any immovable property registered against the
applicant’s name.






(b)
The assets which applicant claims to have are disputed by Ms Pirker.






(c)
That if Ms Pirker is successful in her opposition to the applicant’s
application she will have no effective way of executing a cost order
in her favour against the applicant.






[14]
Mr Mueller deposed to the opposing affidavit on behalf the applicant,
he raised a point in limine, namely that Ms Pirker has not
demanded security for costs ‘as soon as possible after the
commencement of the proceedings’. I have no difficulty in
dismissing the point in limine because, in my view the notice
for the furnishing of security for costs was given as soon as the
notice to oppose the main application was given and there was in my
opinion no unreasonable delay by Ms Pirker in giving the notice for a
request for security for costs. The grounds on which the application
for security of cost is opposed amount to the following:






(a)
Ms Pirker is not per se entitled to security for costs simply because
the applicant is a peregrinus and domiciled in a foreign
country.






(b)
The applicant holds and is the registered owner of the 50% member’s
interest in and to Hefner Farming CC.






(c)
That Ms Pirker has not made out a case why the applicant must furnish
security.   






[15]
The question whether or not the court must order a party from whom
security for costs is demanded lies within the discretion of the
court. The principles which may guide the court were set out as
follows in the matter of
Magida
v Minister of Police:
[3]






‘…an
incola by claiming security for his costs against a
non-domiciled foreigner did not assert a right flowing from
substantive law. In other words, an incola did not have a
right which entitled him as a matter of course to the furnishing of
security for his costs. It was a question of practice in the Dutch
courts that a Judge should hold an inquiry to investigate the merits
of the matter fully. The approach of the Judge was not to protect the
interests of the incola to the fullest extent. He had a judicial
discretion to grant or refuse the furnishing of security by means of
a cautio fideiussoria by having due regard to the particular
circumstances of the case as well as consideration of equity and
fairness to both the incola and the non-domiciled foreigner.
If the non-domiciled foreigner was, however, unable to find a surety
(fideiussor) he could, if he so wished, tender security by way
of pledge (cautio pigneraticia ) but he was not compelled to
do so, … The Dutch jurists in their treatment of the subject
of furnishing security by cautio fideiussoria or cautio juratoria
certainly did not consider the dice to be loaded against a
non-domiciled foreigner. On the contrary, their approach was most
benevolent to the non-domiciled foreigner by stressing inter alia the
following relevant aspects:






1.
Where the non-domiciled foreigner is a vagabundus without a
fixed residence and has no country of his own ('die ginck dwalen,
ende gheen seeckere woonplaats en hadde, geen eygen Landt ende
Jurisdictie van dien Rechter en besadt') the Judge should be more
readily disposed to order him to furnish adequate sureties
(fideiussores ) unless he possessed fixed property in respect of
which he could furnish a hypothec. (Damhouder (op cit cap 99 nr 6).)







2.
No one should be required to furnish security beyond his means to an
incola. Nor should a non-domiciled foreigner be compelled to
perform the impossible. Van Alphen (1608 - 1691) Papegay ofte
Formulier Boek (1682) Eerste Deel hoofstuk 24 request 9 'mandement
van arrest op goederen om de Jurisdictie te fonderen nr 10': 'Niemand
is gehouden te stellen cautie vorder as hykan...'







3.
The object of the cautio juratoria, based on considerations of equity
and justice, was to prevent an impecunious non-domiciled foreigner
from being deprived of his right to litigate against an incola.’[4]






[16]
In the matter of
Hepute
and Others v Minister of Mines and Energy and Another

[5] the Supreme Court said the
following:






[30]
What the court is engaged in is a balancing exercise. As was said in
Keary Developments Ltd v Tarmac Construction Ltd and Another
[1995] 3 All ER 534 (CA) at 540a - b:






'The
court must carry out a balancing exercise. On the one hand it must
weigh the injustice to the plaintiff if prevented from pursuing a
proper claim by an order for security. Against that, it must weigh
the injustice to the defendant if no security is ordered and at the
trial the plaintiffs claim fails and the defendant finds himself
unable to recover from the plaintiff the costs which have been
incurred by him in his defence of the claim.'






[17]
In the present matter upon perusing the affidavits filed in this
intermediate application for security for costs the applicable facts
seem to show that:






(a)
the applicant is a peregrinus of this Court, he resides in
Austria;






(b)
despite the fact that the Amended Founding Statement in respect of
Hefner Farming CC indicates that the applicant holds 50% members’
interest in that Close Corporation, Ms Pirker denies that the
applicant ever held members’ interest in the Close Corporation.






(c)
Pirker is an incola of this court.






[18]
It is against the backdrop of these facts that, I have to carry out a
balancing act. I am of the view that the scale must tilt in favour of
Ms Pirker for me to order the applicant to furnish Ms Pirker the
security for costs she has demanded. I say so for the following
reasons. The applicant is a peregrinus of this court (I am mindful of
the fact that the mere fact that one of the litigants is a peregrinus
does not entitle the incola party to security for costs)
and he does not dispute the fact that if Ms Pirker is successful in
the main application and an order of costs is granted in her favour
it will be difficult if not impossible for her to recover from him
the costs which she has incurred in her defence of the claim against
her. The applicant simply states that he has ‘considerable
assets’ in Namibia. Firstly the assets that he claims to have
are the subject of the dispute in the main application, secondly he
does not inform this court what the value of those ‘assets’
are.






[17]
In addition to my finding that the applicant must provide the
security for costs of Ms Pirker, I am of the view that I am in just
as good, a position to adjudicate the quantum of the costs in order
to avoid any further delay of this matter. Ms Pirker claimed an
amount of N$150 000 in her rule 47 notice. I am satisfied that N$150
000 is a reasonable amount for security for costs. As Ms Pirker has
substantially succeeded in her application, it seems to me that in
the circumstances it is just and equitable that the applicant must
pay Ms Pirker’s costs occasioned by his opposition to this
application. I therefore make the following order:






1.
The applicant is hereby ordered to furnish security for the costs of
Ms Pirker in the main application in an amount of N$150 000.






2.
The proceedings pending before the Court are stayed until security
has been given by the applicant.



3. The matter is
postponed to 28 January 2015 at 08h30 for a status hearing.







4.
The applicant must pay Ms Pirker’s costs of this application,
the costs to include the cost of one instructing and one instructed
counsel.






SFI
Ueitele


Judge






APPEARANCES:






APPLICANT/RESPONDENT
C J MOUTON


Instructed
by Mueller legal Practitioners






DEFENDANT:
H SCHNEIDER


Instructed
by Nakhamela Attorneys







[1]
Martin
Kehrmann v Stephane Gradtke case
No
I 1613/2004.




[2]
1967 (2) SA 263 at 265 (C-H).




[3]
1987 (1) SA 1 (A).




[4]
Also see the case of
Hepute
and Others v Minister of Mines and Energy and Another

2007 (1) NR 124 (HC).




[5]
2008 (2) NR 399 (SC) Also see the case of
Northbank
Diamonds Ltd v FTK Holland BV and Others

2002 NR 284 (SC).