Court name
High Court Main Division
Case name
Ken Investments Close Corporation v Rouwans Investments CC
Media neutral citation
[2016] NAHCMD 51
Judge
Parker AJ










REPUBLIC
OF NAMIBIA


HIGH
COURT OF NAMIBIA MAIN DIVISION, WINDHOEK


JUDGMENT


Case
no: A 297/2015


DATE:
03 MARCH 2016


REPORTABLE


In
the matter between:


KEN
INVESTMENTS CLOSE CORPORATIONAPPLICANT


And


ROUWANS
INVESTMENTS CCFIRST RESPONDENT


ERNST
GAWANABSECOND RESPONDENT


THE
TOWN COUNCIL FOR THE MUNICIPALITY


OF
NKURENKURUTHIRD RESPONDENT


BANK
WINDHOEK LTDFOURTH RESPONDENT


NEDBANK
NAMIBIA LTDFIFTH RESPONDENT


Neutral
citation: Ken Investments Close Corporation v Rouwans Investments
CC
(A 297/2015) [2016] NAHCMD 51 (3 March 2016)


Coram:
PARKER AJ


Heard:
18 November 2015


Delivered:
3 March 2016


Flynote:
Applications and motions – Urgency – Application
brought ex parte and on urgent basis – Court held that
it is trite that good faith is sine qua non in ex parte
applications – Applicant owes a duty of utmost good faith to
the court to make full and proper disclosure to the court –
Failure to disclose all relevant facts to the court should lead to
dismissal of application – The court does not hold itself bound
by the order obtained in the rule nisi under the consequent
misapprehension of the true position – A respondent is entitled
to anticipate the return day of a rule nisi so long as he or
she delivers the requisite 24 hours’ notice – Court held
that the only limitation on that entitlement is the delivery of a 24
hours’ notice in terms of rule 72(7) of the rules of court.


Summary:    
Applications and motions – Urgency – Application brought
ex parte and on urgent basis – Court held that it is
trite that good faith is sine qua non in ex parte
applications – Applicant owes a duty of utmost good faith to
the court to make full and proper disclosure to the court –
Failure to disclose all relevant facts to the court should lead to
dismissal of application – In instant case applicant had failed
to disclose certain relevant facts to the court when it brought the
urgent ex parte application – Applicant did not disclose
to the court the fact that it was the applicant, in terms of the
Project Finance Agreement entered into between applicant and the
first respondent, who was responsible for managing the finances in
respect of the project awarded to the first respondent, particularly
the fact that in that behalf, applicant did have control over first
respondent’s bank account – Applicant, furthermore, did
not disclose to the court the fact that applicant, in breach of the
agreement, made transfers of substantial sum of money to third
parties, including applicant’s family members – Court
found that in the result applicant acted in material breach of his
bounden duty to act in utmost good faith in the urgent ex parte
application proceeding – Court concluded therefore that the
applicant has failed to make out a case for the confirmation of the
rule nisi – Consequently the rule nisi was
discharged and the application dismissed with costs.


ORDER


The
rule nisi issued on 29 October 2015 is hereby discharged, and
the application is dismissed with costs on the scale as between party
and party.


JUDGMENT


PARKER
AJ:


[1]
This matter revolves around the phenomenon that has now become a
quotidian practice in the supply of goods and services in the process
of tender and implementation of tender. After the successful
tenderers have been appointed, it becomes apparent that the
successful tenderers do not have the necessary financial ability or
technical capability required to supply the goods or services under
the tender; and yet in their tender documents they paint rosy
pictures of their financial ability and technical capability to
perform the works or supply the goods in terms of the tender
contract. The result is that third parties are drawn into situations
which more often than not result in proceedings such as the present.
In most cases, the third parties are the financial or technical
backers of the not so capable successful tenderers.


[2]
In the instant case, on 29 October 2015 the court granted interim
relief in the form of an anti-dissipation interdict whereby a rule
nisi was
issued, returnable on 3 December 2015 but which could be anticipated
by any respondent on not less than 24 hours’ notice to the
applicant. The application was brought
ex
parte
and was heard on the basis of
urgency; and so, papers were not served on the respondents. On this
anticipated return day, Ms Campbell represents the applicant, and Ms
Katjipuka-Sibolile represents the first and second respondents.


[3]
The first and second respondents have moved to reject the grant of
the interim interdict and confirmation of the rule
nisi.
They predicate their opposition on three main grounds.


[4]
The first ground is that the applicant did not act in utmost good
faith when it brought the urgent
ex
parte
application because it failed to
disclose material facts to the court. The second is that on the
papers the applicant did not establish that the first and second
respondents engaged in ‘dissipation or squandering of funds in
their effort to frustrate or defeat applicant’s claim against
them’. The third ground is that the applicant failed to meet
the requirements for an interim interdict.


[5]
For good reason, which will become apparent in due course, I shall
consider the first ground first. On the principle of the duty of an
applicant who brings an urgent
ex parte
application to act in utmost good faith by, for example, disclosing
all relevant facts to the court, I rehearse here
in
extenso
what I said in Jacobs
v Van Zyl
(A 106/2015) NAHCMD 254 (29
October 2015):


[5]
It is trite in the practice of the court that ‘[G]ood faith is
sine qua non
in
ex parte
applications’, to adopt the words of H J Erasmus, et al,
Superior Court Practice
(1994), p B1–41-42. I also take counsel from the explanation
for, and the raison d’être of, the principle in the
passage that follows the principle:


Good
faith is a
sine qua non
in
ex parte
applications. If any material facts are not disclosed, whether they
be wilfully suppressed or negligently omitted, the court may on that
ground alone dismiss an
ex parte
application. The court will also not hold itself bound by any order
obtained under the consequent misapprehension of the true position.
Among the factors which the court will take into account in the
exercise of its discretion to grant or deny relief to a litigant who
has been remiss in his duty to disclose, are the extent to which the
rule has been breached, the reasons for the non-disclosure, the
extent to which the court might have been influenced by proper
disclosure, the consequences, from the point of doing justice between
the parties, of denying relief to the applicant on the
ex
parte
order, and the interest of
innocent third parties such as minor children, for whom protection
was sought in the
ex parte
application.’


[6]
Approving the principle, the court (per Damaseb JP) states thus in
Knouwds NO v Josea and Another
2007 (2) NR 792 (HC), para 18:


This
application was brought
ex parte,
ie without notice to the respondent(s). It is trite that a party who
comes to court without notice to a person affected by the relief it
seeks must act bona fide and must disclose all relevant facts to the
court.’


[7]
Thus, it is well settled in the practice of the court that an
applicant in
ex parte proceedings
is required to make a full and proper disclosure to the court and,
indeed, owes a duty of utmost good faith to the court in that regard.
See
Standard Bank of Namibia v Potgieter
and Another
2000 NR 120 (HC). The
applicant must so act in order to assist the court in deciding
carefully and judicially whether to grant the order sought in virtue
of the fact that the court is being asked to make the order when the
court has not heard the other party which in itself has
constitutional implications.


[8]
As I said in
Hewat Beukes t/a MC Bouers
and Others v Luderitz Town Council and Others

Case No. A 388/2009 (judgment delivered on 3 March 2009) in exercise
of its discretion in an
ex parte
application the court should always bear in mind that by granting the
indulgence to hear an
ex parte
application brought on urgent basis, the court is in effect taking
away the respondent’s constitutional right to fair trial (ie
the right to be heard), and, therefore, there must be in existence
good grounds for the court to exercise its discretion in favour of
granting the indulgence. Good grounds exist where, for example, to
serve papers on the opposing party would defeat the very object of
the application (see
Bergmann v
Commercial Bank of Namibia Ltd
2001 NR
48) or where grave irreparable harm would occasion the applicant if
the application was not heard
ex parte
and on urgent basis.


[9]
And an applicant does not act in utmost good faith where he or she
does not disclose all material facts; material facts which in the
circumstances of the case were more likely to influence the court in
refusing to consider the matter on
ex
parte
basis and on the basis of
urgency, if the material facts had been placed before it when such
application was heard. Thus, apart from all else, on the return day
of a rule
nisi
a court should decline to confirm the rule
nisi
where the rule
nisi
was granted in circumstances where the applicant had failed to act in
utmost good faith.’


[6]
In the instant case, I make the following factual findings that are
relevant to a consideration of the aforegoing principles and
considerations respecting the instituting of urgent
ex
parte
applications. There is nowhere in
the founding affidavit that the applicant discloses this material
fact, namely, that it is, indeed, the applicant, in terms of the
Project Finance Agreement (‘the agreement’) entered into
between the applicant and the first respondent, who is responsible
for managing the finances in respect of the project awarded to first
respondent by third respondent, particularly, the fact that all
expenses arising from the implementation of the project are paid
promptly and in that behalf applicant did have control over first
respondent’s bank account. The applicant did not disclose the
relevant fact that it is the applicant who, in breach of the terms of
the agreement, made transfers to the tune of N$530,000 to third
parties, including family members. On the probabilities, I reject
applicant’s reply that those transfers were authorized and
agreed between the parties. The applicant does not reply on any
agreement other than the Project Finance Agreement in the founding
affidavit; and there is no term in that agreement which authorized
such transfers.


[7]
On the authorities, there are indubitably material facts which
applicant owed a duty of utmost good faith to disclose to the court.
An applicant does not act in utmost good faith where he or she does
not disclose all material facts, that is, facts which in the
circumstances of the case were more likely to influence the court in
refusing to consider the matter on
ex
parte
basis and on the basis of
urgency. It has been said that on the return day of a rule
nisi
a court should decline to confirm the rule nisi where the rule
nisi
was granted in circumstances in which the applicant had failed to act
in utmost good faith. See
Jacobs v Van
Zyl
, para 9.


[8]
I hold that the applicant, having failed to disclose the
aforementioned relevant and material facts to the court, acted in
material breach of his bounden duty to act in utmost good faith in
instituting the urgent
ex parte
application. On this ground, as Ms Katjipuka-Sibolile submitted, the
application stands to be dismissed. This court does ‘not hold
itself bound by the order obtained under the consequent
misapprehension of the true position’. (
Jacobs
v Van Zyl
, para 13)


[9]
In virtue of the view I take of the case, it serves no useful purpose
to consider the respondents’ application to strike certain
matters from the applicant’s replying affidavit on the basis
that they are new matters. The preponderance of the conclusion I have
reached on the application is unaffected by any old or ‘new’
matter in the replying affidavit.


[10]
For completeness, it behoves me to consider the tussle between
counsel on both sides of the suit relating to respondents’
anticipation of the return date. It was raised as a point
in
limine
in applicant’s counsel’s
heads of argument. In her heads or argument, Ms Campbell submits
rhetorically ‘whether a litigant can simply anticipate a return
date at any time’. Ms Katjipuka-Sibolile’s answer is that
the respondents were entitled to anticipate the return day, as they
did, in terms of rule 72(7) of the rules of court. I agree with Ms
Katjipuka-Sibolile. In my opinion a ‘person’ mentioned in
rule 72(7) is entitled to anticipate the return day ‘on
delivery of not than 24 hours’ notice’. ‘On
delivery of not more than 24 hours’ notice’ is the only
limitation on such entitlement.


[11]
In the instant case, the order granting the rule
nisi
confirmed such statutory entitlement. The issue is, therefore, this.
The respondents were as a matter of law either entitled to anticipate
the return day on delivery of not less than 24 hours’ notice or
they were not. If they were, and they did pursue their entitlement
upon delivery of not less than 24 hours’ notice, their conduct
cannot be faulted on any legal basis.


[12]
With respect, I do not see how
Peacock
Television Co. (Pty) Ltd v Transkei Development Corporation

1998 (2) SA 259 (Tk), referred to the court by Ms Campbell, can
dislodge the clear and unambiguous words of rule 72(7) of the rules.
In our rule, a respondent is not allowed ‘to anticipate the
return day as he or she pleases’ without more (See
Peacock
Television Co. (Pty) Ltd
): A respondent
desirous of anticipating the return day must do so ‘on delivery
of not less than 24 hours’ notice’. If he or she
satisfies this peremptory requirement, the anticipation of the return
day cannot be said to be defective by any legal imagination.


[13]
I do not see any requirement in rule 72(7) other than or in addition
to the ‘on-delivery-of-not-less-than-24-hours’-notice
requirement. I should say; any attempt to add any other requirement
would be
per incuriam
because it would be outwit rule 72(7) of the rules. In any case,
Peacock Television Co. (Pty) Ltd
is of no assistance on the point under consideration because unlike
in the instant case, in that case the rule
nisi
granted
ex parte
had been extended with acquiescence of the party affected by the rule
nisi.


[14]
Furthermore, in the instant case, the respondent did not agree
extension of the return day as was the case in
Namibia
Banker Services (Pty) Ltd v Ets Katanga Futur and Another

2015 (2) NR 461 (HC), referred to the court by Ms Campbell; and so,
Namibia Banker Services (Pty) Ltd,
too, is of no assistance on the point under consideration.


[15]
It follows inexorably that the point
in
limine
has, with respect, no merit; and
so, it is rejected.


[16]
It remains to consider the matter of costs. Ms Katjipuka-Sibolile
asked the court to grant costs on a scale as between attorney (legal
practitioner) and client on the basis that the applicant did not act
in utmost good faith by failing to disclose material facts. I decline
to grant such punitive costs. It is because the applicant failed to
so act when he brought the urgent
ex
parte
application that is why the
application has been dismissed. The applicant cannot be punished
further on the same basis by the granting of punitive costs. In any
case, it has not been established that the applicant acted
vexatiously or frivolously in bringing the application, or that the
applicant is guilty of some reprehensible behaviour. See Andries
Charl Cilliers,
Law of Costs,
3
rd
ed, p 4-14.


[17]
Based on these reasons, I hold that the applicant has failed to make
out a case for confirmation of the rule
nisi;
and the respondents have established that the rule
nisi
should be discharged and the application dismissed; whereupon, I make
the following order:


The
rule
nisi
issued on 29 October 2015 is hereby discharged, and the application
is dismissed with costs on the scale as between party and party.


C
Parker


Acting
Judge


APPEARANCES


APPLICANT
: Y Campbell


Instructed
by Koep & Partners, Windhoek


FIRST
AND SECOND


RESPONDENTS:
U Katjipuka-Sibolile


Instructed
by Sisa Namandje & Co. Inc., Windhoek