Court name
High Court
Case name
Goverment of the Republic of Namibia v Uvhungu-Uvhungu Farm Development CLose Coprporation
Media neutral citation
[2009] NAHC 75












CASE
NO.: [P] I 1332/2009





IN
THE HIGH COURT OF NAMIBIA



In
the matter between:








THE
GOVERNMENT OF THE REPUBLIC


OF
NAMIBIA PLAINTIFF/APPLICANT








and








UVHUNGU
– VHUNGU FARM


DEVELOPMENT
CLOSE CORPORATION DEFENDANT/RESPONDENT











CORAM: HINDA
AJ








Heard
on: 04 August 2009





Delivered
on: 14 August 2009













JUDGMENT








HINDA
AJ:






[1] This is an opposed application for
summary judgment. On 16 April 2009 the applicant, the Government of
the Republic of Namibia, instituted action proceedings against the
respondent, Uvhungu–Vhungu Farm Development Close Corporation for
an order ejecting the defendant and all those who claim on its behalf
from the property of the Plaintiff at the Vhungu – Vhungu
Agricultural Project situated 10km East of Rundu, Republic of Namibia
and return of all movable and immovable assets entrusted to the
respondent in terms of annexure “A”, alternatively an order
cancelling the management agreement dated 21 July 2003, a copy of
which is attached to the summons and marked “A”. An order
ejecting the respondent and all those who claim on its behalf from
the property of the applicant at the Vhungu – Vhungu Agricultural
Project, situated 10km East of Rundu, Republic of Namibia and the
return of all movable and immovable assets entrusted to the
respondent in annexure “A”. Costs of suit and further and/or
alternative relief.







[2] On 23 April 2009, the respondent
entered an appearance to defend the action to which the applicant
delivered a Notice of Summary Judgment application on 11 May 2009
supported by the verifying affidavit deposed to by the incumbent
Permanent Secretary of the Ministry of Water, Agriculture and
Forestry of the applicant. On 12 May 2009, a day after the summary
judgment application was delivered; the respondent filed a Request
for Further Particulars –
cum
– Exception to the particulars of claim. The respondent proceeded
to file the notice to oppose the summary judgment application on 13
May 2009 and the opposing affidavit on 26 May 2009. The application
was set down for hearing on 29 May 2009 but was removed and set down
04 August 2009. The respondent raised a number of defenses,
objections and points
in
limine.







[3] In this judgment I intend to set
out in summary form the material allegations in the applicant’s
particulars of claim, study the defences raised by the respondent in
the opposing affidavit, asses its soundness in the light of the
arguments advanced by the applicant and conclude whether the defences
are in accordance with rule 32(3)(b).







[4] On 03 August 2009, one day before
commencement of oral argument in order to clear what appeared to me
as a potential impediment I asked counsel to consider and address on
whether the appeal against a spoliation order granted by this court
in favour of the respondent in any way impedes this court to hear
this application for summary judgment. Having considered the
submissions by counsel I am of the opinion that the pending appeal is
irrelevant for purposes of this application.







[5] The following material averments
are set out in the applicant’s particulars of claim. On 23 July
2003, applicant and the respondent entered into a written management
agreement (the agreement) a copy of which is annexed to the
particulars of claim marked “AN1”. The agreement was signed on
applicant’s behalf by the Permanent Secretary, Ministry of
Agriculture, Water and Rural Development and on behalf of the
respondent by Mr. C.J. Lewis, its member.





[6] Paragraph 4 of the particulars of
claim sets out the following material terms of the agreement:







[6.1] The land upon which the Project
is located as well as all assets bought by the Project or donated by
the Government of the Republic of Namibia including all the assets in
existence at the time of the signing of the agreement shall remain
the property of the Government of the Republic of Namibia and no
right, title or interest shall vest in any fashion or form with the
defendant (Service Provider). It is equally apparent that the assets,
at the time of the conclusion of the agreement are set out in sub
clauses 3.1.1 – 3.3.6, inclusive, of the agreement;







[6.2] The respondent would provide
management services for the project and would manage all aspect of
the project on sound business principles.







[6.3] Applicant would hand over
management and control over to the respondent and would pay to the
respondent an amount of N$ 500 000, 00 for the project to commence
operations payable in terms of the agreement.





[6.4] Respondent would manage all
aspect of the project on sound business principles and would be
responsible for:







[6.4.1] the commercial production,
storage, processing, marketing, sale of agricultural products
produced by the project with the view to ensure sustainable
agricultural economic activity in the region, resulting in food
production and employment creation.







[6.4.2] the respondent has to ensure
that the project becomes self-sustaining with regard to operations
and maintenance costs;







[6.4.3] the respondent would act as a
service provider to local community and irrigations farmers for
purposes of agricultural production;







[6.4.4] applicant was in terms of
clause 13.2 of the said management agreement entitled to cancel the
agreement after an investigation by the investigating Committee if
the project made losses of two consecutive periods of six months.







[6.5] In terms of clause 17.2 the
written agreement constitutes the whole agreement between the parties







[6.6] In terms of clause 17.10 the
respondent has no claim against the applicant in respect of any
improvements made to the project or at the project during the
currency of the agreement unless expressly agreed between the parties
in writing, subject to the further provisions of the agreement
pertaining to an amendment and addition to it.







[7] The respondent delivered an
affidavit in terms of rule 32(3)(b) of the Rules of the High Court
of Namibia, the relevant part of which reads:







(3)
Upon the hearing of an application for summary judgment the
defendant may-







(a) …







(b) satisfy the court
by affidavit (which shall be delivered before noon on the court day
but one preceding the day on which the application is to be heard) or
with the leave of the court by oral evidence of himself or herself or
of any other person who can swear positively to the fact that he or
she has a bona fide defence to the action, and
such
affidavit or evidence shall disclose fully the nature and grounds of
the defence and the material facts relied upon therefore



(my
emphasis)





[8] I now proceed to set out and
consider the respondent’s defences as set out in the opposing
affidavit.







[9] The first objection to the
particulars of claim is that the particulars of claim are excipiable
for vagueness and also because it does not disclose a cause of
action. The respondent has set out this objection in its Request for
Further Particulars –
cum
– Exception delivered on
12 May 2009, a day after the Notice and affidavit in the application
for summary judgment was delivered by the applicant.







[9.1] The issue that arises from this
objection is whether this court may take into account the Request for
Further Particulars –
cum
– Exception to assess the
validity of the respondent’s defence on this aspect. It is trite
law that in an application for summary judgment litigants are
confined to summary judgment documents –
viz
the summons, the notice
of intention to defend, the notice of application for summary
judgment, the plaintiff’s verifying affidavit and defendant’s
opposing affidavit.



See Bank Windhoek V Kessler 2001
NR 234 HC at 237 A-B.







[9.2] However, one instance where the
court may have regard to extrinsic evidence is where
prior
to
the application for
summary judgment
further
particulars have been requested and provided
.
As a matter of fact the Further Particulars were requested after the
application was delivered and it is also trite that the applicant is
precluded from filing any other document except the verifying
affidavit. Furthermore, the further particulars requested for was
not delivered and cannot be part of the extrinsic evidence that this
court may consider. Thus, this objection is without merit.



See Bank
Windhoek v Kessler
(supra)
at Pages 237 J-238 A







[10] The second objection raised by
the respondent is that the annexure to applicant’s particulars of
claim is marked “AN1” instead of “A” as indicated in
applicant’s particulars of claim. Is this objection a
bona
fide
defence to applicant’s
claim as envisaged by the relevant rule? The applicant’s answer in
this regard is that the respondent does not make issue that “AN1”
is not the copy of the agreement entered into between the parties.
This objection when considered against the agreement is cosmetic than
real and does not pass the muster of a defence, let alone a
bona
fide
defence.







[11] The respondent further claims
that applicant’s particulars of claim do not disclose a cause of
action because the provisions of clause 12 of the management
agreement were not complied with.







[12] Clause 12 deals with breach of
agreement and the rights of the parties upon such breach. The
applicant submitted that this part of the defence is also without any
foundation whatsoever. The procedure followed in this case is
clearly pleaded in the applicant’s particulars of claim with
particular reference to paragraphs 5, 7 and 8.1 of applicant’s
particulars of claim.







[13] The clause of the agreement
relevant for termination is clause 13.2. Clause 13.2 gives the
applicant the right to investigate the situation as regards net
losses made by the Project and to terminate the agreement if found
justified by officials designated by the Ministry to do the
investigation.







[14] It does not deal with minor
breaches of the agreement that can be rectified but with the very
essence of the agreement; - its raison
d’etre:
- that is to create a viable agricultural project that would benefit
local communities. Failure to achieve this objective defeats the
whole purpose of the agreement and it is submitted that that is the
reason for existence of clause 13.2, giving the option to the
applicant to terminate the agreement due to unsustainable losses.
This discretion is vested solely in the applicant.







Respondent’s reliance on clause 12
is therefore misplaced, not bona fide, and is also once again merely
made for purposes of delay.







[15] The next issue by respondent is
that the formulation in applicant’s particulars of claim of
paragraphs 4.1, 4.2, 4.3, 4.4 to 4.7 and 4.11. It remains hazy what
the real objection is. I understood the objection as a complaint
that there is no foundation for the averments contained in those
paragraphs in the agreement. For the sake of completeness I shall
restate the paragraphs as set out by the applicant indicating the
source of the information in the relevant similar paragraphs in the
agreement.







[15.1] paragraph 4.1 of applicant’s
particulars of claim is a paraphrasing of paragraph 4 of the written
agreement between the parties;





[15.2] paragraph 4.2 of applicant’s
particulars of claim where it is alleged that applicant would hand
over management and control of the project to the respondent appears
at numerous instances in the agreement as follows. In the preamble
the following is stated:







The Ministry being
desirous of obtaining and maintaining the services of the service
provide in regard to the management and related activities of and
pertaining to the Uvhungu – Vhungu agricultural project;



the service provider
being amicable to conclude an agreement with the Ministry in regard
thereto;”





(ii) paragraph 1 of the management
agreement dealing with the purpose of the agreement state the
following:







(iii) clause 3 records the
infrastructure that was in existence at the time of signing of the
agreement for purposes of handing over of the management of these
assets to the respondent.





(iv) clause 5 enumerates the
objectives of the project and in sub- clause 5.1 the following is
stated:





5.1 Managing all
aspects of the Project on sound business principles;”







(v) clause 6 dealing with the
responsibility of the respondent enumerates a number of such
responsibilities and in clause 6.1 the following is stated:







6.1 The Service
Provider shall ensure that the Project objectives detailed in clause
5 hereof are met”.







thus clearly
indicating that the project objectives are the responsibilities of
the Service Provider.”







(vi) clause
6.3 reinforces this by stating:







6.3 Subject
to clause 5 hereof, the Service Provider shall:”





(vii) Finally the tenor of the
agreement clearly demonstrates and illustrates that it is a
management agreement, and by its very nature entails the handing over
of management and control of the project or the assets of the project
to the respondent for purposes of working towards achieving the
objectives of the management agreement. It is submitted therefore
that this claim by the respondent that paragraph 4.2 does not appear
anywhere in the agreement has no foundation.







[15.3] paragraph 4.4 of the
particulars of claim clearly appears from clause 5.1 of the
agreement. This is reinforced by paragraphs 6.1 and 6.3 of the
agreement.





[15.4] Paragraph 4.5 of applicant’s
particulars of claim clearly appears from paragraph 5.2 of the
agreement. It also appears from paragraph 1.2 and is reinforced
similarly by paragraphs 6.1 and 6.3 of the agreement.







[15.5] Paragraph 4.6 of applicant’s
particulars of claim appears from paragraph 5.3 and 6.1 and 6.3
including all the sub-paragraphs of the agreement.





[15.6] Paragraph 4.7 of the
particulars of claim appears from paragraph 5.4 of the agreement.





[15.7] Paragraph 4.9 of applicant’s
particulars of claim appears from paragraph 13.2, in particular
13.2.1 of the management agreement.







[15.8] Paragraph 4.11 of applicant’s
particulars of claim appears from paragraph 17.10 from the management
agreement.





[15.9] It is therefore clear that this
part of the claim by the respondent is spurious and its sole purpose
clearly is the delay of these proceedings. There can be no bona
fides in the defence raised.







[16] Again there is no real defence to
applicant’s cause of action as required by the Rule 32(3)(b). All
the paragraphs referred to above appear in one or the other form in
the agreement, annexed to applicant’s particulars of claim.







[17] Respondent correctly takes the
point that impermissible evidence has been attached to the supporting
affidavit in the application for summary judgment. The two documents
that are attached and objected to, are, the report of the committee
that was appointed in terms of clause 13.2 of the management
agreement recommending the termination of the management agreement
and a letter by the applicant’s legal representatives dated March
2009. I agree with respondent that both these documents should not
have been attached to the verifying affidavit and I will ignore that.







See:
Bank Windhoek Ltd v Kessler

supra
at 237 A – 239 B







The letter objected to rears its head
as part of the respondent’s papers in the form of “CJL5”. In
this context it affirms notice of cancellation and the appointment of
the investigation committee.







[18] The next defence raised by the
respondent is that of
lis
pendens
. The respondent
contends that because the applicant’s urgent application for
ejectment in January 2009 should have been struck and not dismissed
and the application has not been withdrawn by applicant, which
application is pending. It is an unassailable fact that the said
application was dismissed for want of urgency and not struck. To
crown it, neither party nor the court,
mero
motu
, invoked Rule 44 to
vary the judgment which remains. This defence does not pass muster.
Another defence that the respondent had raised, in the alternative,
was one of r
es judicata.
Respondent’s counsel sensibly, in my view, abandoned reliance on
this defence in oral argument.







[19] Applicant’s next defence is
arbitration. It is apparent from the agreement that its termination
must,
inter alia,
be preceded by a procedure that accounts for the fact that there are
“the net losses over consecutive two six months periods followed by
the finding and recommendation by the investigation committee. It is
indisputable that the applicant appointed an investigation committee
that recommended termination of the agreement. Thus the applicant
complied with the prescripts of clause 13.2 of the agreement.
Against this defence is not
bona
fide
and fails. There is
no case made out on the papers to sustain the argument that clause 12
survived the termination agreement, as no such provision was made in
the arbitration clause.







See: North
West Provincial Government and Another v Tswaing Consulting CC and
Others
2007 (4) SA 452
(SCA) at 457I- 458B







[20] The respondent’s next claim is
that the applicant seeks inappropriate relief in that the movable
property requested for delivery is not specified. The applicant
contends that the moveable property is specified with sufficient
particularity in clause 3 of the agreement. I agree and find this
defence also without merit.







See Smit Kruger Incorporated v
Benvenuti Tiles (Pty) Ltd
1999
(2) ALL SA 242 (C) at 247







[21] The respondent’s defence on the
merits may be summarized as follows. The respondent contends that
the appointment of the investigation committee was fast tracked, its
recommendation for termination of the agreement was a foregone
conclusion, that one of its members was a judge in his own cause and
that the respondent would never have had a fair opportunity to make
representations prior to the cancellation of the management
agreement. The respondent avers further that it has complied with
its obligations in terms of the agreement but that the applicant has
failed to honor its obligations. Furthermore the respondent contends
that the management agreement imposes reciprocal obligations on the
parties which the applicant failed to comply with. These failures
are attributed to the failure on the applicant’s part to constitute
the steering committee.







[22] The applicant’s response to
these averments was that it had complied with its obligations because
it arranged regular meetings and information sessions with the
relevant local authorities to ensure, as far as reasonably possible,
the continuity of the project and that it had deposited the amount of
N$ 500 000, 00 into the current account. It contends that it was
under no further obligation to eject any further amount. Needless to
say, It is indisputable that the applicant injected in access N$ 9
000 000, 00. The applicant contends further that it followed the
prescripts of clause 13.2 of the agreement to its letter and spirit
when it cancelled the agreement because of none or poor performance
by the respondent.







[23] What did the parties agree to in
2003 on the issue of termination of the agreement? The answer to
this question lies in clause 13.2 of the agreement.







In the case where
the Service Provider makes a nett loss, in terms of the calculation
of the ‘nett profit’ as described under CLAUSE 9, for two
successive six months periods, the Ministry shall be entitled to
investigate the situation and to terminate the contract if found
justified by the officials designated by the Ministry to do the
investigation.”







[24] The respondent does not dispute
that the applicant appointed a committee to investigate as required
in clause 13.2. It is common cause that the applicant notified the
respondent about its intention to appoint the committee and to
terminate the agreement. This is evident from the letter by
applicant’s legal representatives to the respondent dated 23
January 2009 and annexed as “CJL5” to the respondent’s papers.







[25] The thrust of the respondent’s
defence on the merits appears to be that applicant has predetermined
the question of terminating the agreement and that the result of the
investigation and the decision to termination were foregone
conclusions.







[26] The applicant submitted that
these claims by the applicant have not been denied by the respondent
except for a rather tenuous denial of losses since October 2006. It
is clear that such a denial cannot stand in the absence of the
implementation of the profit sharing formula. There simply were no
profits to distribute. It is only reasonable for applicant to wish
to terminate this agreement on the basis that its objectives were not
met and to this end to institute an investigation.







[27] The respondent claims that
applicant had reciprocal obligations to the Project, more
particularly to make more capital investments of unspecified amounts
in the project to make the Project viable. There simply is no bass
for this claim in the management agreement.







[28] It is submitted that the
respondent’s defence on the merits has no foundation whatsoever and
was merely entered for the purposes of delay, does not appear in the
agreement and was not made bona fide.







[29] It is common cause that the
applicant’s claim is for ejectment. All that the applicant needs
to allege is ownership of the land and that the respondent is in
possession thereof, which the respondent does not deny in this case.







See: Graham
v Ridley,
1931 T.P.D. 476;
Aktar v Patel
1974 (4) SA 104 (T) at 109 G –H





[30] It is trite that once an owner
has made these allegations it is for the occupier to state on what
basis it claims to retain possession. That much the respondent has
not come out and explicitly deny.







See: Krugersdorp
Town Council v Fortuin

1965(2) SA 335(T) at 335 G, 336 B-H.







[31] The respondent also took issue
with the deponent who deposed to the verifying affidavit on
applicant’s behalf. It is a fact that the agreement was signed by
the Permanent Secretary of the Ministry of Agriculture, Water and
Rural Development during 2003. The deponent is the current Permanent
Secretary of the said Ministry. Furthermore, the deponent averred
that he had personal knowledge of the facts as he was involved in the
termination of this agreement. Again this defence must fail.







[32] I have weighed the respondent’s
positive averments against the applicant’s allegations in the
particulars of claim to which the agreement is attached. I am
unable to find anything that is inherently credible in the
respondent’s answer which, if proved, would support a defence which
is good in law that would oblige me to dismiss the application and to
give respondent leave to defend the action. I hold, therefore that
on the papers before me that the applicant has proved its ownership
of the land which respondent occupies and that the respondent has
failed to satisfy this court that it has a
bona
fide
defence in the action
as required by rule 32(3)(b) of the Rules of the High Court of
Namibia. In the circumstances I am satisfied that it will serve no
useful purpose to allow the defendant to defend the action.







[33] In the result there shall be
summary judgment for the applicant in the following terms:







[33.1] I confirm that the management
agreement dated 21 July 2003, a copy of which is attached to the
summons and marked “AN1” had been properly cancelled;







[33.2] the respondent and all those
who claim on its behalf the property of the applicant at the Vhungu –
Vhungu Agricultural Project, situated 10km East of Rundu, Republic of
Namibia are hereby ejected;







[33.3] the respondent is ordered to
return all the movable and immovable assets entrusted to the
respondent as set out in clause 3 of annexure “AN1”.






[33.4] costs of suit, including costs
of one instructing and two instructed counsel on a party and party
scale.



















___________



HINDA AJ







Counsel on behalf of the
Plaintiff/Applicant: Adv N. Arendse SC



Assisted By: Adv G Narib











Instructed By: Conradie &
Damaseb











Counsel on behalf of the
Defendant/Respondent: Adv J. Schickerling



Assisted By: Adv A van
Vuuren











Instructed By: Theunissen, Louw
& Partners