ERNEST KAHAN and
(P) A 329/99
ELIANE LIDCHI CHRISTOPHER RAYNER
PHILLIP ERNEST KAHAN and
OFFSHORE DIAMOND (SWA) LTD
DIAMOND DREDGING & MINING
COMPANY (PTY) LYF PRACTICE
SUMMARY JUDGMENT - This is the
Return Day of a Rule nisi in an Application made by the Peregrinus
to sue another Peregrinus
by Edictal Citation.
Applicant must apply to attach
property of Defendant situated in Namibia and show that the cause of
action arose within the jurisdiction of this Court. The Applicant
must also show that it has a prima facie case.
An agreement cannot be interpreted
on motion or on application of this nature, but only in an action.
Prescription is an issue for the
trial Court. Rule nisi
THE HIGH COURT OF NAMIBIA
matter between: PHILLIP ERNEST KAHAN
LIDCHI CHRISTOPHER RAYNER in re:
ERNEST KAHAN and
DIAMOND (SWA) LTD
DREDGING & MINING COMPANY
LEVY, A.J. Heard on: 2000.05.19 Delivered on: 2000.05.30
RESPONDENT SECOND RESPONDENT
DEFENDANT SECOND DEFENDANT
DEFENDANT FOURTH DEFENDANT
The Applicant herein is represented by Adv. D. F.
and the Respondent by Adv G H
territorial jurisdiction of the High Court of Namibia extends
throughout the Republic of Namibia up to the Republic's geographical
boundaries, but no further.
purposes of litigation, anyone residing within the said boundaries,
whose residence is not temporary, even though it may be indefinite,
is said to be an incola of Namibia. Such person need not be a
citizen of, nor even domiciled in, Namibia. A person not so residing
is said to be a peregrinus.
1940 T.P.D 177 at 179
Sons (Pty) Ltd v.Mavromati
1946 W.L.D 312 at 315.
jurisdiction of the High Court does not extend beyond the
geographical boundaries, any litigant whether an incola or a
peregrinus desirous of sueing out of the High Court of Namibia, a
peregrinus, such litigant must obtain the leave of the High Court to
sue by edictal citation. Originally Courts, in the aforesaid
circumstances, were reluctant to permit such an action, in that
effect to a judgment, could not be given. The Courts therefore
required that when the litigant applied for leave to sue by edictal
citation, such litigant must also attach property belonging to the
peregrinus which was situate within the Court's jurisdiction. Such
attachment was referred to as an attachment ad
depending upon the circumstances of each case.
For a number
of reasons immaterial hereto, the requirements of effectiveness
became irrelevant, and property of any value, could be attached.
litigant who is sueing is itself a peregrinus, in addition to the
attachment of the property, the litigant must rely on a cause of
action which arose within the Court's jurisdiction. Only then will
the court grant the attachment and permit the litigant to sue the
peregrinus by edict. There is, however, another requisite. The
applicant for leave to attach and to sue, must satisfy the Court
that he has a prima
there is no jurisdiction until the property is attached and the
litigant has leave to sue, the application to Court must by
necessity be ex parte.
and the duplication of proceedings are saved by joining different
parties instead of bringing separate actions. Apart from
consideration of convenience, if a third party has a direct or
substantial interest in any order the Court might make in
proceedings, or if such an order cannot be sustained or carried into
effect without prejudicing that party, such party is deemed to be a
necessary party and must be joined in the proceedings.
Engineering Union v. Minister of Labour
1949 (3) SA 637(A).
Even if some
defendants are incolae
while others are peregrini, they must all be joined.
December 1999, the Applicant (who is a peregrinus) applied to the
of Namibia for leave to attach certain property (more
fully set out hereunder) and for
leave to sue by edict First
Respondent, Eliane Lidchi, a peregrinus and Second
Christopher Rayner, also a peregrinus .
property, the Applicant sought to attach was
Respondent's assets situate in Namibia comprising. :-
shares in Offshore Diamonds (S.W.A) Ltd
in Moly Copper Mining and Exploration Company (SWA) Ltd 3. 3400
shares in Diamond Dredging and Mining Company (SWA) Ltd
registers, Applicant said, are at the registered offices of the
respective companies being the office of one Van Schalkwyk & Co,
floor N G Church Center, 17 Luderitz Street, Windhoek.
Respondents assets in Namibia comprising:-
in Diamond Dredging and Mining Company (SWA) Ltd;
in Moly Copper Mining and Exploration Company (SWA) Ltd.
registers of the said Companies, Applicant said, were also at their
registered offices which was the office of the aforesaid Van
Schalkwyk and Co.
A copy of
the intendit wherein the Applicant set out its cause of action was
annexed to its Application for leave to attach and for leave to sue.
In terms of
the intendit (which Applicant described as Particulars of Claim),
Applicant alleged, as far as is relevant to the present proceedings
Plaintiff (Applicant) resides in Johannesburg and is therefore a
peregrinus and sues:-
personal capacity, and
representative capacity as beneficiary of the Clara Kahan Family
Trust, a trust registered in South Africa and on its behalf. The
trust is registered in terms of the Trust Moneys Protection Act 34
of 1934, alternatively, the Trust Property Control Act 57 of 1988.
Defendant is a widow Clara Kahan residing at 9 B Promenanden
Windhoek, and who is therefore an incola and is sued,
personal capacity, and,
capacity as trustee of the Clamodianel Trust, a trust registered in
in terms of the Trust Moneys Protection Act, 34 of 1934.
Defendant is Diane Lidchi who was sequestrated in South Africa
who resides at 9 B Promenanden Street Winhoek and is
therefore an incola,
and she is sued;
personal capacity and where necessary with the assistance of the
trustee of her insolvent estate Olivier Micheal Powell and Norman
capacity as trustee of the said Clara Kalan Family Trust and
capacity as trustee of the Clamodianel Trust
Third Defendant is Eliane Lidchi, an architect residing in
capacity as trustee of the Clara Kahan Family Trust
Powell and Simon agreed to abide the judgment of this Court.
Defendant is Christopher Rayner an adult businessman residing in
Johannesburg and a peregrinus,
in his personal capacity and in his capacity as trustee of or
alternatively as a former trustee of the said Clara Kahan Family
Defendant is Farrel Wainer of Johannesburg, a peregrinus
and sued in his capacity as trustee of the said Clamodianel Trust.
Defendant is Offshore Diamonds (SWA) Ltd a duly registered company
with its registered office at the office of the aforesaid Van
Schalkwyk, Windhoek, and is therefore an incola
of this Court.
Defendant is Diamond Dredging and Mining Co. (SWA) Ltd, duly
registered with its registered office at the office of Van Scalkwyk
at aforesaid, and is therefore an incola of this Court.
was sought against Sixth and Seventh Defendants who were joined by
reason of their substantial interests in the outcome of the
all material times: -
Defendant was the holding company of a group of companies including
and hence the other companies in the group including the Seventh
Defendant were directly or indirectly controlled by the Kahan and
Lidchi families headed by one George Kahan and First Defendant who
were brother and sister.
Plaintiff is a member of the Kahan family, the First Respondent is
his grandmother and Second and Third Defendant (being mother and
daughter) are members of the Lidchi family and the Plaintiffs aunt
and cousin respectively.
On or about
8 January 1987, and in Johannesburg First Defendant acting as
donor, concluded a trust agreement with Second, Third, Fourth
Defendants and one Max Levenberg as trustees. Plaintiff annexed the
trust deed to his pleadings and marked it "P2" (I shall
also refer to the trust deed as "P.2")
of the trust deed express or implied or tacit were inter
Dependents donated to and settled on the said Defendants and the
said Levenberg in their capacity as aforesaid the cash sum of
R1000.00 upon trust for the intents and purposes of the agreement,
and on the terms set out therein,
fund would comprise the amount so donated, all additions and
accruals thereto and all property and moneys vested in them in
thereby created was to be known as The Clara Kahan Family Trust,
and would terminate 90 days after the death of the last survivor of
and the said George Kahan and the Third Defendant (whichever was the
later) or 90 days after their simultaneous deaths,
DL beneficiaries" were defined to mean only beneficiaries who
were lawful descendant of the Second Defendant including the Second
PK beneficiaries" were defined to mean any beneficiary who was
a lawful descendant of the Plaintiff (including the Plaintiff
trust capital" was defined to include reference to property
and rights other than money, and the trust fund meant the property
of the trust for the time being, including money and rights,
trust fund" as constituted and remaining on the termination of
the Trust would then be awarded by the trustee to such
beneficiaries as the trustees may choose, and if to more than one,
in any proportions determined by the trustees, provided that 50% of
the total award at any one time was made to the PK beneficiaries
and 50% thereof was simultaneously made to the DL beneficiaries.
subsistance of the trust, the trustees could in their absolute and
unfettered discretion make awards of capital from the trust fund to
any beneficiary or beneficiaries, and if to more than one, in any
proportions determined by the trustees. There would be no limit to
the extent of such capital award, or any such capital award, and it
would even be within the discretionary power of the trustees to
exhaust the trust fund entirely by this means, should they so think
fit; provided that 50% of the total award at any one time was made
to the PK beneficiaries and 50% thereof was simultaneously made to
the DL beneficiaries,
5.1 and 5.2 of "P2" (the Clara Kahan Family Trust) were
incorporated in the trust deed without the provisos
referred to in 13.7 and
13.8 supra. As in evident form "P2"
the provisos are in a typescript which
differs from the main body
of the said sub-clauses.
14.1 On a
proper construction of sub-clause 5.2 of "P2" and in the
light of the background and surrounding circumstances the proviso
in substitution of the words " the trustees may in their
unfettered discretion make awards of capital from the trust fund
any beneficiary or beneficiaries and if to more than one, in any
determined by the trustees "
to the said trust deed:
Kahan Family Trust was registered with the Master of the High Court
of South Africa, Transvaal Provincial Division;
Third and Fourth Defendants and the said Levenberg were appointed
as trustees by the Master of the High Court of South Africa,
Transvaal Provincial Division, who issued them with letters of
Authority, and subsequently the said Levenberg resigned,
material times the trust fund was constituted of both income and
capital at all material times including; 15.3.1 295 000 shares in
the Sixth Defendant
shares in the Seventh Defendant
Plaintiff accepted the benefit conferred upon him in terms of the
Clara Kahan Family Trust and he has no descendants as contemplated
by the trust deed, and is accordingly the sole "PK
beneficiary" as contemplated therein;
and Third Defendants are the sole "DL beneficiaries" as
material times hereto, the Second, Third and Fourth Defendants were
obliged to administer the Clara Kahan Family Trust in the interest
and for the benefit of the beneficiaries, including the Plaintiff,
and in accordance with the terms of "P2" (the Trust Deed)
the provisions of the Trust Money Protection Act, 34 of 1934, the
Trust Property Control Act, 57 of 1988 and the common law.
particular, the said Defendants were obliged to:
exercise their powers with the care, diligence and skill which can
be expected of a person who manages the affairs of another. 17.3
administer the settled moneys and trust fund diligently and properly
their duties in a due can faithful manner,
prejudicing the interest of the beneficiaries,
maintain full books, records, accounts and documents relating to
the administration of the trust, disposal of it property,
investment thereof, safe custody, control, administration,
alienation or distribution
satisfactorily perform any duty imposed upon them by or under the
said legislation and the trust deed,
the trust property in accordance with the provisions of the trust
income and deliver or transfer the capital thereof to the persons
entitled thereto in accordance with the terms of the trust deed,
position where the trustee's duties and private interests
the beneficiaries all the information needed for them to form a
judgment as to whether a proposed cause of action for which their
consent was required or asked was in the interest of all the
beneficiaries, furnish to the co-trustees and/or any beneficiary on
request an accounting for the state of the administration of the
trust, and of any dealings with the trust property, such account to
be comprehensive and to give a true picture both of income and
expenditure during the period covered, supported by the relevant
or about September 1996, the First Defendant as donor, concluded a
agreement with herself, the Second and Fifth Defendants as
trustees. ( A copy of
the agreement was also annexed to the
interdict marked "P3" and is the
terms of the Clamodianel Trust agreement:
First Defendant donated and settled upon the said Defendants as
shares in the Sixth Defendant
in the Seventh Defendant
other assets, for purposes of the Clamodianel Agreement
fund of this trust would comprise the monies and shares so donated
as well as additions and accruals.
Clamodianel Trust would continue after the death of the First
Defendant and would terminate 90 days after the death of last
survivor of the Second and Third Defendants or 90 days after their
were defined to include the First Defendant, Second Defendant and
Third Defendant, but did not include the PK beneficiaries,
capital", "trust fund" and "income" and
the powers as the trustees to award same to the beneficiaries were
defined in substantially the same terms as appear in the Clara
Kahan Family Trust; but without the proviso that any award should
be as to 50% to the PK beneficiaries and 50% to the DL
Pursuant to the Clamodianel Trust Agreement
Master of the High Court of Namibia, Windhoek, appointed First,
Second and Fifth Defendants as trustees of the Clamodianel Trust,
and issued them with letters of authority,
Defendants assumed the duties previously listed above in relation
to the Clamodianel Trust and its beneficiaries,
Second, Third, Fourth and Fifth Defendants delivered the assets of
the Clara Kahan Family Trust to the First Defendant or to the
Clamodianel Trust (the Plaintiff at present being uncertain as to
which) such delivery was unlawful for the reasons set out below. If
the delivery was affected to the First Defendant then she was a
mere conduit for delivery to the Clamodianel Trust and in fact
delivered such assets to that Trust.
or about January 1997, and without the knowledge and consent of
Third and Fourth Defendants purported to wrongfully terminate the
Clara Kahan Family Trust, and
to award the full extent of the trust fund of the Clara Kahan
Family Trust (including the said 295 000 shares in the Sixth
Defendant and 3000 shares in the Seventh Defendant) to the First
Defendant, alternatively, via the First Defendant to the
Clamodianel Trust without the consent of the Plaintiff and without
awarding 50% thereof, or any portion to the Plaintiff as the PK
beneficiary and pursuant to such award caused the delivery of the
assets of the Clara Kahan Family Trust.
says that the aforesaid conduct was unlawful, was in breach of
duties of a trustee and was ultra vires the terms of the
Clara Kahan Family
Trust, and in breach of the provisions of the
said Trust, or it was made in error
and in the
absence of a valid cause and brought about an unjust enrichment of
the Clamodianel Trust.
Plaintiff alleges that by reason of the aforesaid conduct the Clara
Kahan Family Trust has in fact not terminated.
concludes his intendit making five claims the first three in the
says that the personal interests of Second and Third Defendants with
whom Fourth Defendants acted jointly conflicted with their duties as
trustees of the Clara Kahan Family Trust and that the said
transactions were not for the benefit of the Clara Kahan Trust or
its beneficiaries but for the benefit of inter
Second and Third Defendants. As a consequence Plaintiff says the
transactions are voidable, and the Clamodianel Trust is obliged to
restore the said 295 000 shares to Sixth Defendant and 3000 shares
in the Seventh Defendant to the Clara Kahan Family Trust as well as
all additions accruals thereto.
first claim i.e. Claim A, is for an order that the Clamodianel Trust
as represented by First, Second and Fifth Defendants in their
capacity as trustees restore the aforesaid shares and accruals to
the Clara Kahan Family Trust.
Second Claim i.e. Claim B, made in the alternative to A, is that the
Clamodianel Trust was unjustifiably enriched by not less than N$l
500 000 00 and that that trust is obliged to replay the Clara Kahan
Family Trust the said amount.
alternative to both claims A and B, and as his third Claim i.e.
claim C, Plaintiff says the value of the aforesaid shares was NS1500
000.00 and that Second, Third and Fourth Defendants jointly and
severally, the one paying the other to be absolved are obliged to
compensate the Plaintiff for the damages he has suffered, and which
amount to half of the value of the said shares in the said Defendant
companies, amounting to the sum of NS750 000 00 which would have
accrued to him had the trustee complied with the provisions of the
Clara Kahan Family Trust and their duties in terms thereof and he
accordingly claims the said sum from Second, Third and Fourth
Defendants in their personal capacities jointly and severally the
one paying the other to be absolved.
fourth claim i.e. claim D is that Second, Third and Fourth
Defendants account to him supported by vouchers for all their
dealings with the Trust Fund of the Clara Kahan Family Trust from
the date of their appointment to date.
fifth claim i.e. claim E, is for payment by Second, Third and Fourth
Defendants in their personal capacities jointly and severally the
one paying the other to be absolved the sum N$50 000 00.
Application of the Plaintiff with the said draft intendit and the
annexures thereto which included The Clara Kahan Family Trust
Agreement, were placed before the Court and the Court therefore
granted the Rule Nise referred to above, the return day whereof was
postpone from time to time. On 20 January 2000, First and Second .
Respondent (i.e. Eliane Kahan and Christopher Rayner) gave notice of
an affidavit by the aforesaid Eliane Kahan was filed. Therein she
contended that the cause of action relied on by Applicant did not
arise within the jurisdiction of the High Court of Namibia and that
therefore the Rule
should be dismissed.
application the Applicants alleged that First, Second, Third, Fourth
and Fifth Defendants delivered the assets of the Clara Kahan Family
Trust to the Clamodianel Trust the situs
of which Trust is Namibia and the Master of the High Court of
Namibia appointed the trustees in respect of the said Trust.
aforesaid assets were wrongfully and unlawfully removed from The
Clara Kahan Family Trust and delivered to the Clamodianel Trust
which is wrongfully and unlawfully retaining same and if such
wrongful and unlawful conduct is actionable at the instance of
Applicant/Plaintiff, then indeed, the cause of action arises within
the jurisdiction of the High Court. Furthermore, if the said
acquisition of those assets by the Clamodianel Trust unjustifiably
enriched the said Trust, the High Court would have jurisdiction to
hear an action arising therefrom.
First and Second Respondents who are trustees of the said
Clamodianel Trust are incolae of Namibia.
Oosthuizen representing First and Second Respondents argued
vigorously that there was no prima facie case in that the Applicants
claim if any had been prescribed.
must be pleaded by a Defendant. It is therefore a matter for
decision by the Trial Court and Applicant in his replying affidavit
says that the evidence will disclose that Plaintiff could not
reasonably have acquired knowledge of the circumstances giving rise
to the indebtedness of the First and Second Respondents more than
three years prior to the service on them of the intendit.
Furthermore if the evidence established that the Clamodianel Trust
may be retaining assets to which it is not entitled, prescription
may well not be an issue.
Oosthuizen also presented an argument that on a proper
interpretation of the Clara Kahan Family Trust Agreement if the said
assets were transferred to the Clamodianel Trust, such transfer was
not wrongful, unlawful nor ultra vires.
way to interpret agreements, no matter what there nature is, is by
way of Summons and appropriate pleadings, and then evidence at the
trial. Agreements cannot be interpreted by way of motion proceedings
or affidavits as in the instant case.
satisfied that Applicant has made out a prima facie case in this
application and that the Rule
issued on 15 December 1999 should be made final.
Application, Applicant had asked that costs of the application
(unless opposed) be costs in the main action.
I am of the
view that Respondents were entitled to present their case and that a
fair and just order would be to make the costs, costs in the cause.
the Order of this Court is:-
issued on 15
the return day whereof postponed from time to time, is hereby made
of this Application shall be costs in the cause.
BEHALF OF APPLICANT Instructed by:
ADV D F
SMUTS Lorentz & Bone
BEHALF OF Ist
ADV G H