Court name
High Court
Case number
APPEAL 35 of 2006
Title

Zaahl and Others v Swabou Bank Ltd and Others (APPEAL 35 of 2006) [2006] NAHC 16 (23 November 2006);

Media neutral citation
[2006] NAHC 16





CASE NO: A 35/2006
















SUMMARY REPORTABLE



CASE
NO: A 35/2006







IN
THE HIGH COURT OF NAMIBIA



In
the matter between:











LEONI
ZAAHL AND OTHERS APPLICANT







Versus







SWABOU
BANK LIMITED AND 4 OTHERS RESPONDENT








SMUTS AJ



2006
November 23











Constitutional
practice-
If
a litigant seeks to impugn conduct and especially to set aside
legislation on grounds of an alleged conflict with the Constitution,
a proper basis must be set out in founding papers. The
constitutional provisions relied upon must be identified and a basis
should be set out as to how legislation or conduct conflicts with
that constitutional provision.







Costs- Special
order justified when a party makes unsubstantiated allegations of
dishonesty in legal proceedings. This warrants censure of courts.







Held, Parties
seeking to challenge the constitutionality of legislation need to set
out a proper basis in their founding papers. The constitutional
provisions relied upon should be identified. A basis should also
then be set out as to how the legislation infringes the
constitutional right in question. This would include placing
evidence before Court, where required.







Held, Unsubstantiated
allegations of fraud and dishonesty made in legal proceedings warrant
censure and are to be discouraged and justify a special order as to
costs.





CASE
NO: A 35/2006







IN
THE HIGH COURT OF NAMIBIA



In
the matter between:











LEONI
ZAAHL AND OTHERS APPLICANT







Versus







SWABOU
BANK LIMITED AND 4 OTHERS RESPONDENT







CORAM: SMUTS,
AJ



HEARD
ON: 2006.11.23



DELIVERED
ON: 2006.11.23







JUDGMENT:



SMUTS,
AJ:







[1] This
opposed application was originally set down on
3 July 2006. A
week before, the applicants filed a notice to postpone the
application on the grounds of an application for legal aid made some
time before.



[2] On
the date of hearing, there was however no appearance by or on behalf
of the applicants and the application was removed from the roll.
First and second respondents thereafter on
30 August 2006, served
a notice to apply for a trial date on the applicants by way of Deputy
Sheriff. This was in the customary form and required the applicants
to meet at the office of the Registrar on 28 September 2006 to obtain
a trial date. This notice was followed by the service of the set
down of this application for today’s date. It was also served
by the Deputy Sheriff.







[3] The
applicants are not in attendance in Court today. Their names have
been called out in both foyers of this Court. Nor have they filed
any process after their application to postpone of
20 June of
this year.







[4] Ms
Vivier appearing for the first and second respondents has moved for
the dismissal of the application and also for an order striking out
portions of the founding affidavit and substantial portions of the
replying affidavit. The notice to strike out had previously been
served upon the applicants.







[5] Ms
Vivier also moved for a special order as to costs in view of
statements made in both of the founding and replying affidavits.



[6] Thorough
heads of argument were filed in advance of the prior date of hearing.
Those heads address the application as well as the application to
strike out and the question of costs.







[7] This
application essentially concerns the sale in execution of immovable
property, namely Erf 138 Extension 5, Khomasdal, which I refer to as
“the property”. It belonged to the applicants.







[8] The
following relief is sought in this application:








  1. Setting
    aside the sale in execution of the property.









  1. Ordering
    the third respondent, the Registrar of Deeds to reverse the transfer
    of the property and restore its ownership to the applicants.









  1. Declaring
    the default judgment granted by the Registrar of the High Court as
    unconstitutional.









  1. Ordering
    that the Court shall oversee sales in execution of homes.









  1. Declaring
    the sale of the property below its market value as unconstitutional.









  1. Declaring
    sections 66(1)(a) and 67 of the Magistrates’ Court Act, 32 of
    1944 as unconstitutional.









  1. Ordering
    the respondents, except for the third, fourth and sixth respondents,
    to pay the costs of its application. (I would assume that this an
    intended reference to the fifth respondent because there is no sixth
    respondent cited in this matter.)








[9] The
application was initially opposed by the fifth respondent, but his
legal representatives subsequently withdrew. A detailed answering
affidavit was provided by the first and second respondents, namely
Swabou Bank Limited and First National Bank of Namibia Limited. The
applicant thereafter filed a replying affidavit.







[10] The
facts in this application are to be approached in accordance with the
well established approach to disputed facts in motion proceedings
laid down in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd

1984 (3) SA 623 (A) at 634-635, consistently followed by this Court.
In accordance with this approach, application proceedings will be
adjudicated on the facts as set out in the applicant’s founding
affidavits which are admitted by the respondents together with facts
alleged by the respondents, unless a denial by the respondents is of
such a nature so as not to raise a genuine or a
bona
fide

dispute of fact or is so farfetched that a Court is justified in
rejecting it merely on the papers.







[11] In
approaching the questions raised in this matter, my task is
alleviated by reason of the fact that the applicants in the replying
affidavit do not in any proper sense put in issue certain of the
pertinent facts set out by the first and second respondents.
Instead, the replying affidavit is replete with repeated allegations
of fraud and other serious unlawful conduct including robbery,
levelled against first and second respondents. I deal with this
aspect in the context of the first and second respondents’
application to strike out these allegations.







]12] The
relevant facts of this matter are briefly these: the property was
encumbered by a mortgage bond in favour of the then South West Africa
Building Society, established under
Act 2 of 1986. This
institution transferred all its assets and liabilities to Swabou Bank
Limited which then became the successor of the rights, title and
interests of the South West Africa Building Society in terms of
section 52(A)(9)(b) of that Act. Swabou Bank Limited had a change of
name to Swabou Investments Limited on 9 January 2004.







[13] On
3 March 2004, Swabou Investments Limited was converted from a public
company to a private company called Swabou Investments (Pty) Ltd. On
1 July 2003, Swabou Bank Limited transferred its assets and
liabilities and obligations, excluding its mortgage book to the
second respondent, First National Bank of Namibia Limited. The
excluded mortgage book was retained by Swabou Bank Limited which is
now Swabou Investments (Pty) Ltd. This includes loans secured by
registered mortgage bonds including the applicants.







[14] As
it happened, the applicants fell into arrears with their bond
repayments in 2003. Summons was issued against them in the same
year. It was not defended. Default judgment was granted and sales
in execution were advertised on a few occasions. On each of these
occasions payments were made to reduce the applicants’
indebtedness and the sale was then averted. Following a subsequent
default, a sale in execution proceeded on
28 September 2004. The
property was sold for N$180,000.00. This sale was however later
cancelled when the purchaser was not able to perform in terms of the
agreement.







[15] A
later sale in execution took place on 8 February 2005. This was to
the fifth respondent although he has not been properly cited in these
proceedings. Nor has his wife even been cited at all in these
proceedings. In view of the conclusion I reach with regard to this
application, it is not necessary to address this aspect any further.







[16] The
sale was for the sum of N$198,000.00. On
18 August 2005 and
pursuant to the sale, the property was then transferred to the fifth
respondent
and
his wife. This application was launched only on 3 February 2006.







[17] In
seeking to set aside the sale and the consequential relief directed
at the transfer pursuant to the sale, the applicants have not placed
any evidence before this Court of any vitiating irregularity or
defect concerning the sale or the subsequent transfer. This relief
would rather appear to be based upon the constitutional challenge
mounted in paragraphs 3, 5 and 6 of the notice of motion which I have
already cited.







[18] As
far as the default judgment is concerned, I pause to point out that
the summons was not opposed at the time. Nor has any defence to that
action been raised in this application. Indeed, after the default
judgment was granted, it is common cause that the applicants in fact
paid further sums in respect of that very debt. As I have indicated,
the relief against the default judgment would also appear to be based
upon the constitutional challenge.







[19] As
is pointed out by Ms Vivier in her heads of argument, no
constitutional provisions, and not even the term “unconstitutional”,
were raised in the founding affidavit. There is no reference there
to any provisions of the Constitution which are alleged to be
infringed.







[20] In
the notice of motion there are two sections in the Magistrates’
Court Act which are alleged to be in conflict with the Constitution.
But there is no reference to these provisions in the founding
affidavit and quite how these sections are alleged to be in conflict
with the Constitution. There is also no reference as to how these
provisions infringe against the applicants’ rights. In fact in
considering this application, it is clear that those sections have
nothing to do with the applicants. They were not invoked against
them.



[21] The
sale in execution instead took place in accordance with the Rules of
the High Court – and not in terms of the section cited of the
Magistrates’ Courts Act. For this reason alone, the challenged
is entirely misconceived and the relief sought in that regard would
fall to be dismissed.







[22] No
reasons or grounds have been raised as to why the default judgment
offends against the Constitution. There is a failure to refer to how
the provisions and the conduct complained of offend against the
constitutional provisions. There is also a failure to have placed
any evidence before this Court as to the market value of the property
and how the sale could then be unconstitutional on the basis of
fetching a price below unspecified market values. For this reason
alone, that relief is clearly not competent and also falls to be
dismissed.







[23] If
a litigant seeks to impugn conduct and especially to set aside
legislation on the grounds of an alleged conflict with the
Constitution, then a proper basis must be set out in the applicants’
founding papers. This includes setting out the constitutional
provisions relied upon and setting out a basis as to how the
legislation or conduct infringes upon the constitutional




rights
in question including placing evidence to that effect before Court.







[24] Although
there has been an amendment to the Uniform Rules of Court in South
Africa to provide for the manner in which constitutional issues are
raised, the pronouncements of the South African Constitutional Court
in dealing with this issue are, in my view, also apposite to Namibia,
especially those which preceded the amendment to the Rules.







[25] In
this regard I refer to the judgment by Ngcobo, J in
Prince
v President, Cape Law Society and Others

2001 (2) SA 388 (CC) at paragraph [22] where the learned judge
stated:







[22] Parties
who challenge the constitutionality of a provision in a statute must
raise the constitutionality of the provisions sought to be challenged
at the time they institute legal proceedings. In addition, a party
must place before the Court information relevant to the determination
of the constitutionality of the impugned provisions. Similarly, a
party seeking to justify a limitation of a constitutional right must
place before the Court information relevant to the issue of
justification. I would emphasise that all this information must be
placed before the Court of first instance. The placing of the
relevant information is necessary to warn the other party of the case
it will have to meet, so as allow it the opportunity to present
factual material and legal argument to meet that case. It is not
sufficient for a party to raise the constitutionality of a statute
only in the heads of argument, without laying a proper foundation for
such a challenge in the papers or the pleadings. The other party must
be left in no doubt as to the nature of the case it has to meet and
the relief that is sought. Nor can parties hope to supplement and
make their case on appeal.”







[26] A
similar approach was echoed by that same Court by Ackerman, J,
although with reference to the amended uniformed rule in South Africa
in
Shaik
v Minister of Justice and Constitutional Development and Others

2004 (3) SA 599 (CC) in paragraphs [24] and 25] where the learned
judge stated:







[24]
The minds of litigants (and in particular practitioners) in the High
Courts are focused on the need for specificity by the provisions of
Uniform Rule 16A(1). The purpose of the Rule is to bring to the
attention of persons (who may be affected by or have a legitimate
interest in the case) the particularity of the constitutional
challenge, in order that they may take steps to protect their
interests. This is especially important in those cases where a party
may wish to justify a limitation of a chap 2 right and adduce
evidence in support thereof.







[25]
It constitutes sound discipline in constitutional litigation to
require accuracy in the identification of statutory provisions that
are attacked on the ground of their constitutional invalidity. This
is not an inflexible approach. The circumstances of a particular case
might dictate otherwise. It is, however, an important consideration
in deciding where the interests of justice lie.”







See
also:
Phillips
and Others v The National Director of the Public Prosecutions

2006 (1) SACR 78 (CC) at paragraph [43]







[28] I
may add in passing that in cases where legislation is challenged, it
is usually considered appropriate to cite the Government in the
person of the Attorney-General or the relevant Ministry or statutory
agency charged with the administration of the legislation in
question. Although this was not done in this case, the Registrar of
Deeds was however cited.







[29] In
view of the conclusion which I have reached with regard to this
matter, it is not necessary to further address this inadequacy. I am
mindful that the applicants are not represented. They also brought
this application at a time when they were not represented. But this
does not absolve them from the duty when raising a constitutional
challenge to properly specify the constitutional provisions relied
upon and to place evidence in support of their challenge.







[30] I
find that in this application there has been a comprehensive failure
to do so in both respects. No constitutional provisions have been
properly raised or even identified. Nor is there any evidence or
material placed before this Court to show any conflict with any
provision of the Constitution. The relief sought on constitutional
grounds must thus fail.







[31] In
reaching this conclusion, I am mindful of the judgment of the South
African Constitutional Court, dealing with sections 66 and 67 of the
Magistrates’ Court Act referred to in paragraph 6 of the notice
of motion in
Jaftha
v Schoeman and Others; Van Rooyen v Stoltz and Others

2005 (2) SA 140 (CC).







[32] As
I have already indicated, those sections are not relevant to this
case. Nor has any evidence been placed before this Court which can
in any way show that there is any basis for applicants to raise any
conflict of those provisions with the Constitution.







[33] I
also stress that this matter not only deals with different statutory
provisions, but that there is also an entirely different
constitutional setting. There are different constitutional
provisions applicable in South Africa, especially those with regard
to housing.







[34] The
reasoning in that judgement may well be distinguishable in any event,
even though, as I have indicated, it would not be relevant to this
application. A similar view was expressed by Muller, J sitting in an
application where strikingly similar relief was sought. This
occurred in
Erica
Beukes and Another v South West Africa Building Society and 5 Others

in an as yet unreported judgment delivered on 7 March 2006. He
dismissed that application on several grounds.



[35] In
a closely reasoned judgment, he also dealt in some detail with the
state of the law concerning the challenging of a sale in execution
after transfers have occurred to purchasers, as also occurred in this
matter. The purchasers in this case, the fifth respondent and his
wife, have an unassailable title and no evidence has been placed
before this Court to disturb that.







[36] I
am bound by his judgment in that regard, unless I am persuaded that
it is clearly wrong. Not only has nothing been placed before me to
suggest or persuade me that it is wrong, I am in respectful agreement
with the conclusion he reaches and the approach adopted by him in
this regard. For the reasons set out by him in his detailed
analysis, I am also persuaded for this reason that it would not be
competent to grant the relief sought in this regard.







[37] As
I have stressed, there is no evidence of any defect or irregularity
concerning the sale or relating to the granting of the default
judgment which led out to it. I have also indicated that a
constitutional challenge directed at the default judgment and the
sale of the property below its market value and the provisions in the
Magistrates’ Court Act was misconceived and ought to be
dismissed.



[38] There
is also no basis to direct that this Court should oversee sales in
execution of homes. This aspect was also dealt with by Muller, J and
I am in respectful agreement with what he states in that regard as
well.






[39] It
follows that the application is to be dismissed.






[40] I
now turn to the application to strike out. In the short replying
affidavit of approximately 7 pages, I noted that the applicants
attribute fraud to the first and second respondents on no less than
seven occasions. They accuse the first and second respondents of
robbing the applicants and unspecified others on four different
occasions. They also accuse them of making misleading statements and
being party to a scam. There are also two references to fraudulent
conduct in the founding papers. All of these allegations are not
substantiated by any evidence. They are fully set out in the
application to strike out. I see no purpose of quoting them in full
in this judgment.






[41] The
application to strike them out is on the grounds of that they are
scandalous and vexatious and are severely prejudicial to the first
and second respondents. In certain instances, some passages are also
are sought to be struck by raising new matter in reply.



[42] I
find that the application to strike out is well founded on both
grounds. In doing so, I apply
Vaatz
v Law Society of Namibia

1991 (3) SA 563 (Nm) at 566-567.







[43] The
first and second respondents also seek a special order as to costs in
view of the unfounded and unsupported allegations of fraud and
dishonesty levelled against them. I agree that they are entirely
unjustified in the sense that they are unsupported by any fact or
material place before me.







[44] Ms
Vivier points out that legal practitioner and clients costs may in
any event arise by reason of the mortgage bond. But there could
however been a novation and she moved for a special costs order on
the basis of the scandalous statements made concerning the first and
second respondents.







[45] Even
if the terms of the mortgage bond provided for costs on a legal
practitioner client scale, I certainly consider that such an order is
warranted in the circumstances of this case as a mark of disapproval
by reason of the unsubstantiated allegations of fraud and dishonesty
levelled by the applicants against the first and second respondents.







[46] These
allegations are compounded by being repeated and the intemperate
terms used. The resort to unsubstantiated allegations of dishonesty
in legal proceedings warrant the severe censure of Courts and are
certainly to be discouraged.






[47] The
Courts have justifiably held that unfounded attacks of this nature
warrant a special order as to costs.






[48] I
have been referred to several authorities by Ms Vivier. They include
Jewish
Colonial Trust Limited v Estate Nathan

1940 AD 163 and 184;
Nel
v Waterberg Landbouers Ko-Op

1946 AD 597 at 604;
Herold
v Sinclair and Others

1954 (2) SA 531 (A) at 539C-E;
Ernest
& Young and Others v Beinash and Others

1999 (1) SA 1114 (W) at 1148C-G; and
Hudson
and Others NNO v Wilkens N.O. and Others

2003 (6) SA 234 (T) at 243. In addition, I have also had regard to
Hawkins
v Gelb and Another

1959 (1) SA 703 (W) and
Spes
Bona Bank v Portals Water Treatment

1981 (1) SA 618 (W) at 637.
HaHahhkslkmf;lsmf;lsmkdf










[49] In
exercising my discretion, I consider that costs on scale of legal
practitioner and client are more than justified should be ordered,
even in the absence of an agreement to pay costs on that scale by
reason of these unjustified and unwarranted attacks upon the first
and second respondent.



[51] I
accordingly make the following order:







This
application is dismissed with costs and the application to strike out
is granted with costs. The costs in both instances are to be on the
scale as between a legal practitioner and client.















_____________________



SMUTS,
AJ



ON
BEHALF OF THE APPLICANTS: IN DEFAULT



Instructed
by:







ON
BEHALF OF THE RESPONDENTS: MS VIVIER



Instructed
by: FISHER, QUARMBY & PFEIFER