Court name
High Court Main Division
Case number
APPEAL 273 of 2014
Case name
Laicatti Trading Capital Inc v Greencoal (Namibia) (Pty) Ltd
Media neutral citation
[2015] NAHCMD 240
Judge
Parker AJ










REPUBLIC OF NAMIBIA




HIGH COURT OF NAMIBIA
MAIN DIVISION, WINDHOEK





JUDGMENT





Case no: A 273/2014





DATE: 08 OCTOBER 2015





In the matter between:





LAICATTI TRADING CAPITAL
INC................................................................FIRST
APPLICANT





CHRISTOPHER PETER VAN ZYL
N.O.......................................................SECOND
APPLICANT





RYNO ENGELBRECHT
N.O.............................................................................THIRD
APPLICANT





EUGENE JANUARIE
N.O..............................................................................FOURTH
APPLICANT





(The second to fourth applicants in
their respective capacities as joint liquidators of Greencoal
Holdings Proprietary Limited (in liquidation), registration number:
2013/120207/07) (“Greencoal Holdings”)





And





GREENCOAL (NAMIBIA) (PTY) LTD


(REGISTRATION NUMBER:
2010/0314)......................................................FIRST
RESPONDENT





GERSHON
BEN-TOVIM............................................................................SECOND
RESPONDENT





Neutral citation: Laicatti Trading
Capital Inc v Greencoal (Namibia) (Pty) Ltd (A 273-2014) [2015]
NAHCMD 240 (8 October 2015)





Coram: PARKER AJ





Heard: 28 September 2015





Delivered: 8 October 2015





Flynote: Practice – Applications
and motions – Discovery in motion proceedings – Discovery
in terms of rule 28(1), read with rule 70(3), of the rules of court –
Court held that in application proceedings rule 28(1), read with rule
70(3), of the rules are enabling provisions and not entitlements; and
a fortiori, they are subject to the peremptory provisions of rule
66(1)(b) of the rules – Additionally, in motion proceedings
discovery is very, very rare and only permitted in exceptional
circumstances – Court found in instant proceeding that
respondents have not complied with rule 66(1)(b) and they have not
established any exceptional circumstances for the court to permit
discovery of a multitude of documents – Consequently, court
declined to direct that the respondents discover further documents.





Summary: Practice – Applications
and motions – Discovery in motion proceedings – Discovery
in terms of rule 28(1), read with rule 70(3), of the rules of court –
These rules are subject to the peremptory provisions of rule 66(1)(b)
of the rules – Respondents sought to introduce a multitude of
documents in violation of rule 66(1)(b) of the rules – The
documents have always been in respondents’ possession –
Respondents failed to identify, in an affidavit, the particular
documents or portions of the documents which the respondents desire
to use and rely on – Court found that the approach taken by the
respondents is alien to the rules of court and unreasonable and
unfair not only to the other parties, but also to the court –
Consequently, court declined to direct that respondents discover
further documents.





Flynote: Practice – Application
and motions – Application for hearing of oral evidence –
Generally, court will exercise discretion in favour of hearing oral
evidence only where genuine dispute of facts on the papers exists –
Courts will not readily refer application for a provisional
winding-up order to oral evidence – This will only be ordered
in exceptional circumstances – It will not be ordered where
material dispute of facts has not been clearly defined – It
will also not be ordered where referral will not lead to a just and
speedy determination of the matter as contemplated in rule 1(3) of
the rules of court.





Summary: Application and motions –
Application for hearing of oral evidence – Generally, court
will exercise discretion in favour of hearing oral evidence only
where genuine dispute of facts on the papers exists – Courts
will not readily refer application for a provisional winding-up order
to oral evidence – This will only be ordered in exceptional
circumstances – It will not be ordered where material dispute
of facts has not been clearly defined – It will also not be
ordered where referral will not lead to a just and speedy
determination of the matter as contemplated in rule 1(3) of the rules
of court – Court found that respondents have not clearly
defined the material dispute of facts necessitating referral to oral
evidence – Court found further that in the circumstances a
referral will not lead to a just and speedy determination of the
matter as contemplated in rule 1(3) of the rules of court which the
court’s order of 18 May 2015 sought to achieve –
Consequently, court declined to direct that the matter be referred to
oral evidence.





ORDER





(a) I decline –





(i) to direct that the respondents
discover further documents.





(ii) to direct that the matter be
referred to oral evidence.





(b) The set down dates of 2 and 3
November 2015, at 10h00, remains undisturbed.





(c) Costs are in the cause.





RULING





PARKER AJ:





[1] On the papers, it seems to me clear
that as between the first applicant and the respondents, the
application for the winding up of the first respondent has been ready
for hearing since 27 March 2015 when the applicant delivered its
replying affidavits. In the course of events the second, third and
fourth applicants intervened in the matter.





[2] By agreement between the parties,
on 23 July 2015 the court postponed the hearing of the winding up
application to 2 and 3 November 2015. In keeping with promotion of
the overriding objectives of the rules of court (see rule 1(3)(c))
the court ordered that all interlocutory proceedings should be
completed and gotten out of the way so that the hearing of the
winding up application could proceed on the set down hearing dates.
It is for this reason that the two interlocutory matters were set
down to be argued on this day 28 September 2015.





[3] The two matters are the following,
as are set out concisely in the submission of Mr Steyn, counsel for
the first applicant, and with which Mr Corbett SC, counsel for the
second, third and fourth applicants make common cause. They are that
-





(a) the respondents are entitled as of
right under rule 28(1), read with rule 70(3), of the rules of court
to make general discovery of documents without the leave of the
court; and





(b) the court should at this stage of
proceedings refer the matter to oral evidence prior to the hearing of
applicants’ application for the provisional winding up of the
first respondent, which application is set down for hearing on 2 and
3 November 2015.





[4] On the interpretation and
application of rule 28(1) of the rules I had this to say in the
recent case of Telecom Namibia Ltd v Communications Regulatory
Authority of Namibia (A 448/2013 [2015] NAHCMD 66 (19 March 2015):





‘Rule 28 provides for discovery
rules generally and rule 70(3) makes rule 28 applicable to discovery
in motion proceedings; but in motion proceedings an applicant must
satisfy the court that exceptional circumstances exist. (Kauaaka and
Others v St Phillips Faith Healing Church 2007 (1) NR 276)) I,
accordingly, accept Mr Coleman’s submission on the point. In
addition to that, the applicant must satisfy the twin requirements
prescribed in rule 28(1), namely, that the documents required are
documents “that are relevant to the matter in question”
and “that are proportionate to the needs of the case”.’
(Italicized for emphasis)





[5] It is clear from the interpretation
and application of rule 28, read with rule 70(3), of the rules set
out in the preceeding paragraph that the respondents are not entitled
as of right under those rules to make general discovery. Those rules
are enabling provisions; they are not entitlements; and a fortiori,
they are subject to the peremptory provisions of rule 66(1)(b) of the
rules.





[6] The problems of the respondents do
not end there. In motion proceedings, ‘discovery is very, very
rare and only permitted’ in exceptional circumstances. (South
African Poultry Association v The Ministry of Trade and Industry (A
94/2014) [2014] NAHCMD 331 (7 November 2014)) In my view, in the
instant matter, there cannot be exceptional circumstances existing in
the respondents’ favour where (a) the respondents decide not to
pursue the procedural rules available to them under rule 28 to
request discovery of documents referred to in the applicants’
founding affidavit; but rather seek to dump a great number of
documents on the court and the other parties, and this, after the
respondents have already filed their answering papers. The rule of
practice, which is well entrenched in the court, is that a respondent
must (and I use ‘must’ in its peremptory connotation)
deliver its answering affidavit together with any relevant documents
(in terms of rule 66(1)(b)). And such respondent must – without
any allowance – explain in the affidavit the nature of such
documents and their relevance to the issues in dispute. Furthermore,
if the documents are so bulky that the respondent is not expected to
attach them to the affidavit, the respondent should say so in its
affidavit, and then identify, for the benefit of the court and the
other parties, the particular documents or portions of such documents
which the respondent desires to use and rely on, and explain the
contents of the documents or the portions thereof and their relevance
to the issues at hand.





[7] Joffe J put it crisply and clearly
thus in Swissborough Diamond Mines v Government of RSA 1999 (2) SA
279 (T) at 324F-G:





‘Regard being had to the function
of affidavits, it is not open to an applicant or a respondent to
merely annexe to its affidavit documentation and to request the Court
to have regard to it. What is required is the identification of the
portions thereof on which reliance is placed and an indication of the
case which is sought to be made out on the strength thereof. If this
were not so the essence of our established practice would be
destroyed.’





[8] The practice is predicated upon the
rule that in motion proceedings the affidavits constitute both the
pleadings and the evidence and that a party must make out its case on
its papers. See South African Poultry Association v The Ministry of
Trade and Industry, para 48.





[9] In the instant proceeding, what the
respondents seek to do is, with respect, to introduce the documents
through the backdoor by way of discovery. The approach that the
respondents seek to take is alien to the rules of court. Besides, it
is unreasonable and unfair not only to the other parties but also to
the court. Apart from all else, what takes away any chance of the
court granting any judicial largesse to the respondents is that the
documents they wish to introduce have always been in the respondents’
possession, as Mr Corbett submitted. In any case, Mr Möller,
counsel for the respondents did not point to the court the rule of
court which supports the route the respondents seek to traverse.





[10] To conclude; I find that that
route, with respect, constitutes an abuse of process of the court. In
that regard, the court should invoke its inherent power to protect
itself. See Arrangies v Quick Build 2014 (1) NR 187 at 195, para 19.





[11] Based on these reasons, I find
that the respondents have failed to persuade the court to grant them
the relief they seek, in invocation of its inherent power.





(b) Referral to oral evidence





[12] The starting point is this.
Applications for winding up of companies must be launched by motion
proceedings. The Companies Act 28 of 2004 (‘the Act’)
does not provide for trial proceedings. Section 352(2) of the Act is
relevant to the instant proceedings; and it reads:





‘(2) Where the Court grants an
application made under section 351, the Court must, unless there is
good reason not to do so -





(a) grant a rule nisi calling on the
company and all interested persons to show cause on the return day
why the company should not be finally wound up; and





(b) direct that the rule be published
in the Gazette and, if the Court deems it necessary, in a newspaper
circulating in Namibia.’





[13] The principle is well settled that
courts will not readily refer an application for a provisional
winding-up order to oral evidence. This will only be ordered in
exceptional circumstances.





[14] An insightful explanation and the
reasonability and fairness of the principle are set out in the
judgment of the Appellate Division in Kalil v Decote X (Pty) Ltd and
Another 1988 (1) SA 943 (A) at 979E-F (per Corbett JA):





‘Where, on the other hand, the
affidavits in an opposed application for a provisional order of
winding-up do not reveal a balance of probabilities in favour of the
applicant, then clearly no prima facie case is established and a
provisional order cannot at that stage be granted. The applicant may,
however, apply for an order referring the matter for the hearing of
oral evidence in order to try to establish a balance of probabilities
in his favour. It seems to me that in these circumstances the Court
should have a discretion to allow the hearing of oral evidence in an
appropriate case.’





[15] Having approved Kalil, the Supreme
Court, per Strydom AJA, held as follows in Executive Properties v
Oshakati Tower 2013 (1) NR 168, para 39:





‘What this court must now decide
(and what the court a quo also had to decide at the time of the
application) is what the prospects of the viva voce evidence tipping
the balance in favour of the applicant who applied to have the matter
referred to oral evidence are. In the Kalil case, (supra), it was
stated that the court would be less inclined to refer a dispute to
oral evidence where the balance of probabilities strongly favoured
the other party.’





[16] As long ago as 18 May 2015 the
court ordered that the first applicants’ application for a
provisional order of winding up the first respondent should be set
down for hearing without delay. In my opinion, referral to oral
evidence will not be convenient. There is some urgency in winding-up
the first respondent, and the attempt by the respondents to
unprocedurally discover two thousand pages of documents, discussed
previously, and then to refer the whole matter to oral evidence will
certainly not be convenient to the other parties and the Court.
Additionally, it will not conduce to the implementation of the court
order of 18 May 2015. The purpose of winding up applications is to
arrest the state of affairs as soon as possible by granting a
provisional order after which the affairs of the company can be
investigated and the provisional liquidator can deal further with the
matter. And what is more; the issues on which the respondents seek to
lead oral evidence are not clearly defined. Indeed, they are not
defined at all. There is merely a reference to material disputes of
facts in very broadly defined areas. As I see it, what the
respondents seek is a trial action to determine whether or not a
provisional order should be granted. This approach cannot be allowed.
It would be a different case where material dispute of facts is
clearly defined. In the instant case, no attempt has been made by the
respondents to define the alleged dispute of facts. As I see it, what
the respondents seek to refer to oral evidence are all the issues. It
need hardly saying that in that event a referral to oral evidence
will not lead to a just and speedy determination of the matter as
contemplated in rule 1(3) of the rules, thus, frustrating the 18 May
2015 court order.





[17] I think Mr Steyn’s
submissions have merit. They are that the court should grant a
provisional winding up order on the papers as a rule nisi, calling
upon the respondents and other interested parties to show cause, if
any, on the return day why the provisional order should not become
final. On the return day the court may grant a final order, or
dismiss the application or refer it to oral evidence at the instance
of either the applicants or the respondents. I think this is a proper
course to take in the circumstances. This is not appropriate case
where the court should allow oral evidence.





[18] For all the aforegoing reasons,





(a) I decline –





(i) to direct that the respondents
discover further documents.





(ii) to direct that the matter be
referred to oral evidence.





(b) The set down dates of 2 and 3
November 2015, at 10h00, remain undisturbed.





(c) Costs are in the cause.








C Parker





Acting Judge





APPEARANCES








FIRST APPLICANT: H Steyn





Instructed by Ellis Shilengudwa
Inc., Windhoek








SECOND, THIRD AND FOURTH APPLICANTS:
A W Corbett SC





Instructed by Fisher, Quarmby &
Pfeifer, Windhoek








FIRST RESPONDENTS: A Möller





Instructed by Du Plessis, De Wet &
Co., Windhoek