Court name
Supreme Court
Case number
SA 80 of 2011

Weatherly International PLC v Bruni and Others (SA 80 of 2011) [2013] NASC 16 (15 November 2013);

Media neutral citation
[2013] NASC 16
Mainga J



CASE NO.: SA 80/2011



the matter between:







2 July

November 2013


AJA (MAINGA JA and O’REGAN AJA concurring):


main issue which was hotly contested and which this Court has been
called upon to consider and resolve is whether a compromise or
arrangement which a debtor corporate body enters into with its
creditors and receivers becomes executable solely by reason of it
having been sanctioned by order of the High Court pursuant to s 311
of the Companies Act, No 61 of 1973 (the Act). Before entering upon a
discussion of that issue, it is apposite to briefly refer to two
minor issues which were raised on the papers but which never raised
much controversy. The first was condonation and the second related to
competence to raise on appeal a legal issue which was never canvassed
in the Court


The condonation issue

Court below in this matter delivered its judgment on 14 September
2011. It is prescribed under sub-rule (5)(b) of rule 5 of the Rules
of the Supreme Court that the record of an intended appeal against
such judgment must be filed within 3 months from the date of
judgment. In the present case, therefore, the appeal record should
have been filed by 13 December 2011, but it was not. By sub-rule
is provided that if an appellant has failed to lodge the record
within the prescribed period, he or she shall be deemed to have
withdrawn his or her appeal. In order to pursue the appeal in the
instant case, Ms Elize Mutaleni Angula, legal practitioner for the
appellant, applied for condonation for the late filing of the record
and the reinstatement of the appeal pursuant to rule 18 of the said
Rules. In the affidavit accompanying the application she explained
that, acting on the appellant’s instructions to appeal, and
having thereafter received a favourable opinion from counsel
regarding the prospects of success, she diarised that the record of
appeal should be filed on 16 January 2012. She subsequently filed the
record on 19 January 2012. However, she later realised that in doing
so she had failed to comply with the rules of this Court as reflected
above and therefore apologetically deposed that she was genuinely
mistaken in filing the record on the said date. She has added that
contemporaneously with the making of that mistake, she experienced
personal difficulties at her place of work, leading to her
resignation temporarily. It was only upon her return to work, that
she caused the appeal record to be compiled and later filed as
stated. She finally deposed that despite the late filing of the
record, the respondents had not been prejudiced. The latter did not
oppose the application. Against that background, and as the delay was
for just over one month, the Court felt that a good case had been
made out for granting condonation for the late filing of the record
and the reinstatement of the appeal and, therefore, made an order


Competence to raise a
legal point not raised at trial

second minor moot point concerned the propriety of raising at
appellate level a legal issue which was never raised at first
instance. Counsel on both sides were, however,

in recognising that there was ample authority to the effect that a
legal issue not previously raised at a trial could be raised on
appeal if the legal issue is covered by the pleadings and no
unfairness to the other party would result. This was also the
approach adopted by this Court in
Nekwaya t/a Checkers Wholesalers & Supermarket v Younus Cachalia
t/a Younus Cachalia Wholesales and Another, SA 12/2001
delivered on 18 March 2003. In that case we held that a party to an
appeal can raise a legal issue for the first time on appeal even
though no prior notice of it was given to the other side, provided
that the issue was covered in the printed record of proceedings
obtaining in the Court below and it is in the record of appeal; in
such case the other side will be granted an adjournment in order to
prepare its response. Further,
Australia Ltd and Another v Amakutuwa


2011 (1) NR 262 (SC) presented the same issue for consideration by
this Court. After full argument by counsel for the parties the Court
adopted the following approach:


a new legal point is raised on appeal, two questions arise: is the
point covered by the pleadings and would there be any unfairness to
the other party were it to be raised on appeal. If the legal point is
covered by the pleadings, and no unfairness to the other party would
arise, then “the court is bound to deal with it”.’
para [22])


stated already, this issue did not raise any controversy and the
Court therefore resolved to, and did, allow counsel for the appellant
to raise the new issue. It is worthy of note that the new issue was
in fact the one which was hotly debated as stated in the opening
paragraph hereof.


discussing the new legal point I must mention that in the Court
platform on the basis of which the parties fought this case related
to the issue whether it was competent in law for a debtor company to
delegate or cede its obligations (in this case Weatherly’s
alleged indebtedness in the sum of N$10 492 084,39) under a
compromise to a third party without the consent of the company’s
receivers as representatives of its creditors. The learned Judge in
the Court
that it was not so competent. In fact, he held that a delegation of
obligations made in such circumstances produces a sham cession. The
debtor, which is the present appellant, was aggrieved by that verdict
and hence the appeal. Initially the appeal was tailored to impugn
that verdict, but in the intervening period the appellant resolved
instead to base its appeal principally on the main issue



a better appreciation of the circumstances surrounding the new legal
point, it is opportune to outline the background from which the
compromise ensued. In doing so, I shall begin by identifying the
parties in the present matter. Weatherly International Plc
(Weatherly) is a public listed company under the laws of the United
Kingdom of Great Britain. Its registered address is City Point,
Ropemaker Street, London, EC2Y 9AW, United Kingdom. It is a holding
company with several subsidiary companies operating in Namibia. None
of these operating companies is a player in these proceedings and
therefore it is unnecessary to identify them by name. Roderick John
Webster, an adult male businessman resident in London, U K, is
Weatherly’s Chief Executive Officer. He is the one who
instituted the Court action leading to the current appeal. David John
Bruni and Ian Robert McLaren, having their business address at Hidas
Centre, 21 Nelson Mandela Avenue, Klein-Windhoek, Windhoek, are the
joint receivers standing in for the creditors of Weatherly. They are
the first respondents. The Deputy Sheriff of Windhoek, having his/her
principal place of business at 4 Hamman Street, Klein-Windhoek,
Windhoek, is the second respondent. I hasten to mention that the
inclusion of the Deputy Sheriff in the litigation was a mere
formality as no claim was made against him/her in the proceedings.

19 June 2006 Weatherly presented an ex parte application
before Honourable Lady Justice van Niekerk for an order in terms of s
311 of the Act. That order was replicated by a similar ex parte
order granted by Honourable Justice Acting Botes on 17 July 2006.
The two orders constituted one order the effect of which was the
sanctioning of the compromise termed an ‘offer of compromise
between Ongopolo Mining and Processing Limited (the company), its
subsidiaries (the group) and its/their creditors, in terms of s 311
of the Companies Act No 61 of 1973, as amended, which has been
proposed by Weatherly International Plc’. This is the
compromise which is at the centre of these proceedings. By clause 12
of the compromise, Weatherly was empowered ‘… at any
time and whether before or after the date of sanction, to cede,
assign or delegate all its rights and obligations hereunder’.
(Emphasis added.)


compromise stipulated that, to avoid the operating companies going
under, Weatherly would undertake to pay their debts by instalments.
Weatherly thus became the principal debtor. By the same instrument,
the first respondents were appointed receivers on behalf of
Weatherly’s creditors. In the proceedings
stance taken by the respondents was that because Weatherly had
defaulted in its instalment payments to the tune of N$10 492 084,39,
they were entitled to execute on the compromise and, therefore, on 1
June 2009 they had obtained a writ of execution against it. However,
Weatherly contended that by virtue of the power vested in it under
clause 12 of the compromise, on 26 March 2009, it had ceded and
delegated all its rights and obligations under the compromise to a
third party, namely Weatherly SMF St. Lucia Limited (Weatherly SMF),
a company having its registered office at 46 Micoud Street, Castries,
St. Lucia. Therefore, so Weatherly’s contention went, as of 1
June 2009 it no longer owed the said debt as its indebtedness had
been transferred to Weatherly SMF. It, consequently, further argued
that the receivers’ attempt to execute was directed against the
wrong party. For the foregoing reason, Weatherly applied to the High
Court for an order to the following effect,


That the
warrant of execution dated 1
June 2009 and issued by the Registrar of the High Court in favour of
the Receivers against the Applicant … be set aside;


Alternatively that the said warrant be
suspended pending further litigation by any interested party.’


reasons which I need not go into for the purpose of this judgment,
the application was unsuccessful.


Whether it is
competent to execute on a compromise

the new legal issue revolves around the interpretation of s 311 of
the Companies Act, it is necessary to reproduce in full its relevant
provisions. They are as follows:


Compromise and arrangement between company, its members and


any compromise or arrangement is proposed between a company and its
creditors or any class of them or between a company and its members
or any class of them, the Court may, on the application of the
company or any creditor or member of the company or, in the case of a
company being wound up, of the liquidator, or if the company is
subject to a judicial management order, of the judicial manager,
order a meeting of the creditors or class of creditors, or of the
members of the company or class of members (as the case may be) to be
summoned in such manner as the Court may direct.


the compromise or arrangement is agreed to by –


majority in number representing three-fourths in value of the
creditors or class of creditors, or


majority representing three-fourths of the votes exercisable by
members or class of members,


(as the case may be) present and
voting either in person or by proxy at the meeting, such compromise
or arrangement shall, if sanctioned by the Court, be binding on all
the creditors or class of creditors, or on the members or class of
members (as the case may be) and also on the company or on the
liquidator if the company is being wound up or on the judicial
manager if the company is subject to a judicial management order.




(6) (a)  An order by the Court
sanctioning a compromise or arrangement shall have no effect until a
certified copy thereof has been lodged with the Registrar (of
Companies) under cover of the prescribed form and registered by him.’


The new legal issue was fully canvassed by both sides in their heads
of argument and therefore the respondents did not complain of not
having had adequate notice to prepare to argue it. Consequently,
counsel who appeared before us at the hearing of the appeal, namely
Mr Coleman, representing the appellant, and Mr Mouton, for the
respondents, made full submissions on it. In the opening paragraph I
stated that issue in terse terms, but it is important to couch it
amply. The issue is whether upon its being sanctioned by Court as
shown above, the compromise per se sufficed as a spring-board
for obtaining a writ of execution against Weatherly so as to enforce
a term of the compromise (namely to recover the amount of N$10 492
084,39 which Weatherly had allegedly defaulted in paying), without
first going through the process of obtaining a regular Court judgment
against Weatherly. In short, is a sanctioned compromise executable?
Mr Coleman’s contention was that it was not, but Mr Mouton
argued to the contrary. However, before embarking on a consideration
of the arguments which both counsel put forward to buttress their
respective positions, let me begin by examining some basics.


Law Dictionary
a writ of execution as: ‘A Court order directing a sheriff or
other officer to enforce a judgment . . .’. By way of
illustration it adds, ‘A writ of execution is an authorization
to an executive officer, issued from a Court in which a

final judgment

has been rendered, for the purpose of carrying the judgment into
force and effect. It is founded upon the judgment . . .’. 
(My emphasis.) And to the term ’judgment’ are assigned
two definitive examples, viz: ‘1. A Court’s

that settles the rights of the parties
disposes of all issues in controversy.

 2.  A Court’s final determination of the rights and
obligations of the parties in a case’. (My emphasis.)  (See
the 8
ed, pp 609 and 859). So, it may be said that the essence of a
judgment is to finally prescribe parties’ rights and thereby
dispose of all issues in controversy. With the judgment in hand a
judgment creditor, as of right, can then proceed to secure a writ of
execution as a means of enforcing the judgment. The judgment is,
therefore, the bedrock from which the writ of execution springs. It
is a condition precedent to obtaining a writ of execution.


an effort to conform to the definitions afore-stated, the respondents
couched their writ of execution in words suggesting that the amount
of N$10 492 084,39 was awarded consequent upon court judgments
obtained on 19 June and 17 July 2006. However, in the affidavit
verifying the application for the writ, Ian Robert McLaren, one of
the two respondents, swore that on those very dates of 19 June and 17
July 2006, the Court sanctioned the subject compromise in terms of s
311. In other words, what happened in this case is that the
respondents believed that the very act of sanctioning the compromise
was sufficient to constitute the compromise as a springboard for
obtaining the writ of execution. This suggests that the sanctioned
compromise was by implication equated to a judgment. The question is
whether such equation was properly drawn.


sanctioning of a compromise begs the question whether that action by
itself finally disposes of all matters in controversy amongst the
parties. One or two examples will suffice to glaringly show that that
is not the case. As already stated, clause 12 of the compromise in
the present case empowered Weatherly to, ‘at any time and
whether before or after the date of sanction, to cede, assign or
delegate all its rights and obligations hereunder.’ Further,
clause 3.2.3 gave Weatherly power at any time to waive in whole or in
part some conditions precedent to the offer of compromise. Both these
provisions in the compromise can therefore be said to have created
potential bases for arousing controversy notwithstanding the
sanctioning of the compromise. Those bases remained intact even after
the sanctioning. In other words, the sanctioning did not finally
dispose of them.


fact that matters of potential controversy are not finally disposed
of by virtue of the sanctioning, must inevitably mean that they
remain litigable even after sanctioning. To the contrary when a Court
delivers a judgment, the issues in dispute are finally disposed of
and the judgment is etched in stone. It usually takes full effect
immediately after it is pronounced and any terms of it can only be
changed by the Court itself, either

or on application and notice to other interested parties. In the
ultimate, I have come to the conclusion that the apparent equation
which the respondents drew between a compromise and a judgment was


The nature of a
sanctioned compromise or arrangement

will be helpful to analyse more fully the nature of a compromise or
scheme of arrangement that has been sanctioned by a Court in terms of
s 311 of the Companies Act. That section creates a mechanism whereby
a company may enter into an agreement with its members and/or
creditors without requiring the agreement of every single member
and/or creditor. (see
parte NBSA Centre Ltd
(2) SA 783 (T) at 787G; see also discussion in Meskin
on the Companies Act,
ed. Vol.1
Durban) at 601 where the author states that s 311 ‘…
provides the means by which a compromise or arrangement between a
company and its creditors or members, or any class of either, may be
established. Its salient features are that (i) unanimous agreement to
the compromise or arrangement is not required but (ii) the agreement
to the compromise or arrangement by the majorities envisaged by
sub-sec (2) has no effect without its being sanctioned by the
Court’.) Once a Court has sanctioned the compromise or scheme
of arrangement, the compromise or arrangement becomes binding on all,
even those who have not consented to it. (See s 311(2) of the Act).
The nature of the sanctioned compromise was described by Coetzee DJP
Parte Kaplan NNO: In re Robin Consolidated Industries
(3) SA 413 (W) at 419B-C as follows:


the purpose of the section is to create the machinery to bind a
dissenting recalcitrant minority to the agreement between the company
and the majority, “agreement” would have been inapposite
to describe the result. Hence “arrangement”. But that
does not detract from its central characteristic which is plainly
contractual, albeit compulsory in respect of the minority.’


are clear dicta by both Namibian and South African Courts affirming
that an arrangement or compromise sanctioned by a Court does not
constitute an order of Court. For example, Hiemstra J in
parte De Wet NO: in re Mackville Motors (Pty) Ltd (in liquidation)
(1) SA 256 (W) at 258A reasoned as follows:


To sanction the compromise does not mean that its terms become an
order of  Court. It means that the parties to the arrangement
are authorized to go ahead with it, and they are bound to it.’




I have said the sanctioning of a compromise does not turn the
compromise into an order of the Court. To contravene its terms is not
contempt of Court. The compromise is contract which derives its
binding force from the fact that it was approved by the Court in
terms of a statute. This provision was necessary in order to make the
minority, which would otherwise not be bound, subject to the


at 258C–D; see also Administrateur-Generaal vir SWA v
Hotel Onduri
1983 (4) SA 794 (SWA) at 801 (per Strydom J); Ex
parte Ensor NO: In re Cape Natal Litho (Pty)
Ltd 1978 (3) SA 908
(D) at 911A – D (per Didcott J).


is also clear; as the respondents’ counsel argued that the
effect of the sanctioning of a compromise or arrangement will often,
depending on all the circumstances, result in the novation of the
earlier debts or contracts. (See Ex parte Currie, NO 1966 (4)
SA 546 (D) at 554E–F.) However, the novation does not in law
change the character of the compromise or arrangement; it remains
rooted in contract.


Zimbabwean courts have endorsed a similar approach. In
v WGB Kinsey & Co (Pvt)
(1) SA 42 (ZS) at 47D–H
Gubbay JA, as he then was, reasoned as follows:


my mind, it is of fundamental importance to have regard to the effect
of the sanctioning of a compromise or arrangement, … I
comprehend it to be this: the sanction is not an order of the Court
factum praestandum
a contravention of which is punishable by contempt of Court. It
merely gives the compromise or arrangement contractual force as
between those bound by it, deriving such force, not from their actual
consent, but by operation of law. The rights and obligations of the
parties bound are determined by the terms of the compromise or
arrangement, express or implied. They are not to be sought outside
the confines sanctioned by the Court. Questions relating to the
validity and interpretation follow normal contractual principles, for
the act of sanction does not convert the compromise or arrangement
into an order of the Court.’


of the cases to which counsel for the respondents referred us was a
case in which a litigant was seeking to enforce the terms of a
compromise. In
NO v Nel and Another
(3) SA 963 (W), the applicant who had been appointed receiver for the
creditors of the company in respect of which an arrangement had been
sanctioned by a court, approached the court for payment of amounts
alleged to be due in terms of the arrangement. The procedure followed
by the receiver makes it plain that the arrangement was not itself an
order of the court upon which a writ of execution could be issued.
Failure by a party to comply with the compromise required a further
application on the part of the aggrieved party to court for an order
before execution could be sought. Moreover, the need to approach a
court makes good sense, because a dispute may well arise as to
whether some or all the terms of a sanctioned arrangement have been
observed. Permitting a dissatisfied creditor to immediately issue a
writ of execution on the terms of the arrangement will not allow any
determination of such disputes.

the light of the foregoing, I am satisfied that properly understood,
the sanctioning of an arrangement by a Court in terms of s 311 of the
Act does not mean that its terms become an order of the Court.
Counsel for the respondents urged us to consider a different approach
to the section. He asked us to treat the sanctioning of a compromise
as an order of the court having the consequence of directing that
amounts of money be paid. In this regard, he cited the early decision
v Bovey
TPD 457. That case concerned an application for the committal of a
judgment debtor who had failed to pay instalments due in terms of an
order of court. The debtor had entered into an agreement with the
creditor, which agreement was then made an order of court. The court
held that a judgment debtor who fails to pay instalments in terms of
a court order may not be committed for contempt unless a court order
concerned a matrimonial suit. The remedy available to the creditor,
held the court, were the remedies of execution against movable
property. This case does not assist the respondents, however, for it
does not concern a compromise or arrangement entered into in terms of
s 311, nor any of its predecessor provisions. It appears to concern
an ordinary agreement between two litigants (who, it must be
emphasized, were a judgment creditor and judgment debtor) presumably
in settlement of pending litigation, which they agreed to have made
an order of the Court. As mentioned before, the sanctioning of a
compromise in terms of s 311 is a different process. The role of the
court arises, by and large, from the fact that the compromise or
arrangement is not consented to by all parties, and the effect of the
court sanctioning the arrangement or compromise is to render it
binding, even on parties who did not consent to it.

was also argued on the respondents’ behalf that an order by the
court sanctioning the compromise or arrangement under s 311 is an
pecuniam solvendam
an order to pay a certain amount of money). Such orders are generally
contrasted with orders where the Courts require a person to do
something (an order
factum praestandum
Non-compliance with the former does not entitle a dissatisfied
judgment creditor to seek the committal of the judgment debtor who
has failed to pay in terms of the court order. (See e.g
Metropolitan Industrial Corporation (Pty) Ltd v Hughes
(1) SA 224 (T) at 230B–C;
v Bezuidenhout
(1) SA 551 (O) at 554A-B.) There is a wealth of authority asserting
that an order sanctioning a compromise or arrangement does not
constitute an order
factum praestandum.
Cohen NO v Nel and Another, supra,


does not follow, however, that because an order sanctioning a
compromise or arrangement is not an order
factum praestandum,
is therefore an order
pecuniam solvendam.
are at least two reasons why the respondents’ counsel’s
argument in this connection cannot succeed. First, many compromises
or arrangements sanctioned by a court will not sound in money: they
may involve the transfer of shares or assets or the assignment of
liabilities. Courts have held firmly that orders sanctioning
compromises that impose such obligations are not orders
mentioned above. Accordingly, it would be inconsistent for a Court to
conclude that an obligation imposed in a sanctioned compromise or
arrangement that required the payment of money would constitute an
pecuniam solvendam.
and more fundamentally, however, and as mentioned above, the
obligations that arise from a sanctioned compromise are contractual,
albeit that the contract, at least in respect of the dissenting
parties, has been imposed by the court’s sanction rather than
undertaken by consent.


for the respondents also argued, apparently relying on
NO v Airomatic t/a Barlows Airconditioning Co
(4) SA 376 at 398, that this approach to s 311 compromises is ‘not
complete nor jurisprudentially satisfying’. That case concerned
the question whether a scheme of arrangement sanctioned under s 311
included claims that had been satisfied before the company had been
provisionally liquidated. It is not readily apparent what the
relevance of this case is to the appeal before us here. It is also
not clear precisely what counsel meant by arguing that the outcome is
not ‘jurisprudentially satisfying’. What is clear is that
s 311 is a provision that has an important role to play in permitting
arrangements or compromises to be entered into, even where not every
member or every creditor agrees. The consequence of a sanctioned
compromise or arrangement, as set out above, is a form of court
sanctioned contractual obligation that cannot, without more, give
rise to an entitlement to execution.


a compromise or arrangement is in nature part of contract law is now
so settled, as is shown by the authorities cited in this judgment,
that one cannot start redefining it in the manner suggested by the
respondents’ counsel. Doing so would render the law
unnecessarily uncertain. In the light of the views expressed in the
preceding paragraphs, I find this appeal to be meritorious and would
allow it.

the question of costs, I feel that there is good reason in the
present case to justify departure from the usual principle that the
costs should follow the event on appeal. This is because the issue on
which this appeal has succeeded was not raised in the Court below.
Had the appellant raised it there, the possibility of an appeal might
have been avoided. In any event, the likelihood of the Court not
making any order as to costs was put to the appellant’s counsel
and he seemed not to have had any vigorous opposition to it. In the
final analysis, therefore I make the following orders:


The appeal is allowed.


The order made in the High Court in this matter is set aside and
replaced with the following order:


The writ of execution dated 1 June 2009 and issued by the Registrar
of the High Court against Weatherly International PLC is hereby set

The applicant is ordered to pay the costs of the respondents in the
High Court, on the basis of one instructed and one instructing


Each party will bear its own costs in respect of the appeal to this






G Coleman

by LorentzAngula Inc



& 2ND RESPONDENTS:                                  
C J Mouton  

by Koep & Partners