Du Toit v Dreyer and Others (SA 22/2013 & SA 64/2013) [2017] NASC 5 (27 February 2017);

Group

Full judgment

REPORTABLE

CASE NOs: SA 22/2013

SA 64/2013

IN THE SUPREME COURT OF NAMIBIA

 

In the matter between:

 

WILLEM DU TOIT

Appellant

and

 

ALETTA CATHERINA DREYER

First Respondent

WILLEM DREYER

Second Respondent

ZARIS FARMING CC

Third Respondent

 

Coram: SHIVUTE CJ, MAINGA JA and CHOMBA AJA

Heard: 15 April 2016

Delivered: 27 February 2017

 

APPEAL JUDGMENT

 

 

CHOMBA AJA (SHIVUTE CJ and MAINGA JA concurring):

Introduction

  1. This appeal emanates from a hotly contested action tried in the High Court before Damaseb JP. At the centre of the dispute was a contract concluded between the appellant, on one hand and the first and second respondents on the other, whereby the latter two agreed to sell to the appellant their entire beneficial interest in the third respondent. The last named party was a close corporation in which the first two respondents were the only members. The corporation was used by the respondents as a vehicle for carrying out farming activities on land situated in Namibia.

 

  1. The appellant was at the time of concluding the contract, and still is, a foreign national holding South African citizenship while the respondents were, and continue to be, Namibian citizens.

 

  1. As will be elucidated later on in this judgment, the domestic law of Namibia restricts the alienation of agricultural land to foreigners. In purporting to conclude the contract aforementioned, the parties failed to abide by the requirements of that law, thereby vitiating the contract ab initio.

 

  1. By the time when the parties appreciated that they could not proceed with the contract to its logical accomplishment because of the vitiation, the appellant had paid a substantial part of the agreed contractual price for the benefit of the respondents. I use the expression ‘for the benefit of the respondents’ because the money was paid not directly to the respondents but to a developer who was constructing a flat (referred to as the Sand and See) which the respondents intended to purchase. In the light of that turn of events, and as was to be expected, the appellant claimed restitution of the amount he had paid together with interest thereon. However, the respondents resisted the claim for two reasons. The first of these was that the contract was, within the knowledge of the appellant, concluded in breach of the law. That reasoning was grounded on the well-entrenched legal maxim, ex turpis causa non oritur actio, meaning that a legal action cannot be founded on an immoral or, as in the present case, illegal transaction. The second reason they relied on was that they had some counterclaims to make against the appellant.

 

  1. Not enchanted by the respondents’ negative attitude, the appellant felt entitled to resort to his legal right to justice. He consequently instituted the court proceedings from which the current appeal emanates. In his particulars of claim he basically demanded restitution of the N$672 000 which he had so far paid towards the purchase price of the flat, plus interest thereon and his costs in convention. On their part the respondents filed a plea effectively stating that it was incompetent for the appellant to claim restitution in the light of the illegality, and they complemented that plea with counterclaims totalling N$502 000; they also claimed interest thereon and costs in reconvention.

 

  1. It suffices at this stage to state that the learned trial judge granted judgment in favour of the appellant and ordered restitution of the principal amount of N$672 000 but, despite his success in this regard, the appellant was denied both interest and costs.

 

  1. The counterclaims were in due course abandoned by the respondents and therefore further comment on them will be made henceforth only in as far as they are intertwined with the grounds of appeal.

 

  1. As per the notice of appeal, the ambit of this appeal is limited to '. . . that portion of the judgment refusing the appellant any costs in respect of the respondents’ (defendants a quo) abandoned and failed counterclaims and also against the resultant order refusing the appellant the costs of his action'.

 

The grounds

  1. In his endeavour to dislodge the High Court’s orders denying him the said costs, the appellant filed the following grounds of appeal, viz:

 

'1. The court a quo made no distinction between the claim and the counterclaims.

 

2. The court a quo did not give proper consideration to the fact that the disallowance of interest was already sanction enough of the conduct of the plaintiff.

 

3. In view of the disallowance of the interest, there was no basis to depart from the normal rule as to costs, namely that costs should follow the result.

 

4. The disallowance of the interest on the claim and costs in respect of the abandoned and dismissed counterclaims amounted to excessive punitive measures against the plaintiff.

 

5. The court a quo did not give proper consideration to the fact that plaintiff was compelled by the defendants to institute the action in respect of the claim.

 

6. The court a quo did not give proper consideration to the fact that plaintiff was compelled by the defendants to defend the instituted counterclaims.

 

7. The court a quo did not give proper consideration to the fact that, even assuming plaintiff was correctly not allowed his costs in respect of the claim, that the majority of costs were incurred in respect of the abandoned and failed counterclaims.

 

8. The court a quo did not give proper consideration to the fact that, not to award costs in respect of the abandoned and failed counterclaims was to, has the effect of rewarding defendants for their failure and not of penalising them. (sic)

 

9. That the blanket refusal to award costs was inequitable in that it in fact means that the successful party, who was compelled by the unsuccessful parties to institute the action and to defend the counterclaims, is the only party penalised in this respect.

 

10. That the costs order in effect rewarded the unsuccessful parties for obstructing and delaying the successful party’s claim.

 

11. That the costs order in respect of the counterclaims is not only a deviation from the normal rule that a successful party is awarded costs but also, instead of taking cognisance of the fact that the counterclaims were dismissed, penalising the successful party for defending those meritless claims.

 

12. By not considering the amount of time spent in respect of the claim and counterclaims respectively.

 

13. The effect of the costs orders on their own and in conjunction with the disallowance of interest on the capital amount successfully claimed is such as to render the costs orders disquietingly inappropriate.'

 

Condonation

  1. As a corollary to his notice of appeal, the appellant prayed for condonation for the late filing of the exhibits appertaining to the trial record; he also asked that his lateness in filing the heads of argument be condoned. However, both in their heads of argument, as well as at the inception of the appeal proceedings in this court, the respondents, through their legal counsel, Ms Schneider, indicated that they were not opposing the appellant’s prayers on both limbs. For that reason the court granted both prayers for condonation at the outset and without hearing argument. Condonation is, therefore, not an issue in this appeal.

 

The appeal

  1. The appeal came to this court with the leave of the court below. It is necessary to mention this because, as I shall be elucidating in due course, trial courts use their discretion in granting costs to parties in cases heard before them. For that reason there is no automatic right of appeal against costs orders made by them as is the case when a party is not happy with a trial court’s decision on the merits. This implies that in order to appeal against a costs order, a disgruntled party has, in the first place, to obtain the leave of the trial court, or, in the event of that court refusing to grant leave, with the leave of the appellate court.

 

Overview of the grounds of appeal and the submissions thereon

  1. Despite the fact that they are numerous, the grounds of appeal raise one single issue only, viz, whether or not it was proper for the court below to deny the appellant, who is said to be the successful party, his costs which in this case were in two categories. In the first category were costs relating to his claim for restitution, and the second pertained to his reputedly successful contest against the counterclaims in which the proponents had persisted at length during the trial but only to abandon them very belatedly in midstream. For this reason I find it unnecessary to deal with the grounds seriatim. Instead, I shall consider them in reaction to submissions as they were made by the appellant’s counsel during the appeal hearing. In doing so, I shall start with the aspect of costs for the claim in convention, that is the claim for restitution of the purchase price.

 

  1. Mr Frank, the learned senior counsel representing the appellant, opened his submissions by restating the normal rule governing the award of costs in trial courts, namely that costs follow the result of an action. In other words, he argued that a successful litigant deserves a favourable costs order. To this end counsel emphasised that the appellant was one hundred per cent successful in his action for restitution. He had paid N$672 000 towards the purchase price and the trial court determined that the whole amount should be refunded to him. In the event and going by the general costs rule, counsel argued that the appellant ought to have been granted a favourable order for costs as a successful party.

 

  1. Counsel conceded that in the present case the contract was tainted by an illegality, to wit, breach of s 58 of the Agricultural (Commercial) Land Reform Act 6 of 1995, for which his client shared the blame with the respondents. If I understood him correctly, Mr Frank, however, contended that the appellant was condignly punished for his share of the mischief in that regard by being deprived of interest on the awarded refund. In the event, it was, according to him, inclement for the court a quo to have additionally denied him the costs.

 

  1. Mr Frank underscored the fact of the equality in blameworthiness between the parties as to the illegality tainting the contract. That notwithstanding, counsel noted that the respondents had resold for an astronomical profit the Sand and See flat which they had effectively bought for only N$672 000. They had also sold for a handsome price of N$3 500 000 the Zaris Farm, which they had earlier repossessed from the appellant following upon the frustration of the contract. The net effect of those happenings was that the respondents were unfairly enriched as against the appellant who was implicitly impoverished. It was for that reason, he reminded this court, that the trial judge relaxed the par delictum rule in order to do justice as between man and man. On that basis, counsel submitted, the trial court granted judgment to the appellant in his action for restitution.

 

  1. To further prop up his fervent submission for a favourable and full costs order for his client, Mr Frank made reference to the very belated attempt by the respondents to amend their plea by suggesting that the agreed contract price was N$1 000 000 and not N$840 000. Pointing out that the respondents had not only previously conceded in their initial plea that the price was indeed the latter, but that in addition and according to the evidence, the text of the contract was prepared by Mr Dreyer, the second respondent. He, therefore, questioned how the drawer of that selfsame contract document could gainsay its contents. Counsel concluded that the respondents’ abortive attempt to amend the original plea in this way was intended only to delay and prolong the trial, thereby increasing the costs of the proceedings. In addition, counsel asserted that in fact all the delays that occurred after commencement of the trial were occasioned by the respondents.

 

  1. In the foregoing circumstances, and as the appellant had been denied interest, it was ‘disquietingly inappropriate’ – to use Mr Frank’s own expression - for the court a quo to have additionally denied the appellant a favourable costs order in respect of his claim in convention. In his view and at the very least, the appellant deserved a partial costs order in the event of being denied a full costs order.

 

  1. Adverting to the aspect of costs pertaining to the counterclaims, the first submission Mr Frank made was that the respondents well knew that the only prospects they had for the success of their counterclaims depended on their having to call an expert witness to verify their averments. Those averments concerned the respondents’ alleged losses said to have derived from the appellant’s occupation and use of the Zaris Farm before the frustration of the contract.

 

  1. Counsel referred to the minutes of the case management meeting held on 21 June 2011 preparatory to the commencement of the trial. At that meeting the respondents, just like the appellant, indicated that they did not intend to call expert witnesses, and indeed they called none. Despite that indication, the respondents, in particular Mr Dreyer, introduced evidence in extenso purporting to prove the very averments which only an expert witness had the capacity to adduce. It was contended that Mr Dreyer failed to impress the court, and in the end the counterclaims had to be, and were, abandoned. It was submitted that Mr Dreyer’s endeavour in this regard only served to additionally and unnecessarily prolong the trial. That, according to Mr Frank, was another aspect which the trial court should have recognised as having needlessly added to the cost of the trial and, therefore, of entitling the appellant to a full costs order.

 

  1. It was in the foregoing spirit that Mr Frank cited the trial court’s observation in its judgment that the respondents instituted the counterclaims solely for the purpose of avoiding repayment of the contract price, adding that the evidence they adduced in an endeavour to prove the counterclaims was meritless.

 

  1. In underscoring his submissions on this point, counsel for the appellant observed that his client’s victory over the respondents' counterclaims was untainted with any illegality, which therefore should have attracted an award to him of a full costs order.

 

The Agricultural (Commercial) Land Reform Act 6 of 1995

  1. As hinted in the foregoing part of this judgment, the dispute which was litigated on in the court below arose basically because the parties chose to contravene some provisions of the Agricultural (Commercial) Land Reform Act 6 of 1995 (the Act) in concluding the contract of 18 February 2003. It is consequently necessary to delve into the salient provisions of that Act.

 

  1. At the very outset, it states the following in its preamble:

 

'ACT

To provide for the acquisition of agricultural land by the State for the purposes of land reform and for the allocation of such land to Namibian citizens who do not own or otherwise have the use of any or of adequate agricultural land, and foremost to those Namibian citizens who have been socially, economically or educationally disadvantaged by past discriminatory laws or practices; to vest in the State a preferent right to purchase agricultural land for the purposes of the Act; to provide for the compulsory acquisition of certain agricultural land by the State for the purposes of the Act; to regulate the acquisition of agricultural land by foreign nationals; to establish a Lands Tribunal and determine its jurisdiction; and to provide for matters connected therewith.' (The underlining are mine and are intended for emphasis).

 

  1. In the spirit of that preamble, s 58 of the Act is couched in the following terms (quoting only the pertinent parts of it):

 

'58(1) Notwithstanding anything to the contrary in any other law contained, but subject to subsec (2) and s 62, no foreign national shall, after the date of commencement of this Part, without the prior written consent of the Minister, be competent –

 

(a) . . .

 

(b) to enter into an agreement with any other person whereby any right to the occupation or possession of agricultural land or a portion of such land is conferred upon the foreign national –

 

(i) for a period exceeding 10 years; or

 

(ii) for an indefinite period or for a fixed period of less than 10 years, but which is renewable from time to time, and without it being a condition of such agreement that the right of occupation or possession of the land concerned shall not exceed a period of 10 years in total.

 

(2) . . .

 

(2A) . . .

 

(3) . . .

 

(4) An application for the Minister’s consent for the purposes of subsection (1) shall be made in the prescribed form and be submitted through the Permanent Secretary to the Minister.'

 

  1. Firstly, it is to be noted that this section requires that the Minister’s permission must be obtained before one enters into an agreement to alienate agricultural land to a foreign national. In other words, the Minister is not to be presented with a fait accompli, thereby stultifying his powers to decide whether to grant or withhold permission.

 

  1. Secondly, it suffices to mention that by subsecs (5) and (6), ibid, the Minister is empowered either to grant or withhold permission for a foreign national to acquire or occupy agricultural land in Namibia. The effect of these two subsections serves to militate against the manner in which the parties to this appeal acted in agreeing to enter into the sale of land contract.

 

  1. To clarify the foregoing observations, let us take a close look at the contract which is at the centre of this controversy. Reproduced hereunder is a certified true English translation of the agreement concluded by the parties on 18 February 2003. (The original version was prepared in the Afrikaans language). It reads:

 

'Sales Agreement: Farm Zaris

Zaris CC, property of W & A C Dreyer, is sold to W du Toit on the following terms

4 payments of R168,000.00 payable on the dates:

28/02/03

11/07/03

17/10/03

2 payments of R84,000.00 payable upon completion of the Zand and Zee Flats around 15 December ’03 and the following [one] on registration of the Flat.

Transfer of shares will be effected upon payment of the last instalment.

(signed)

(signed)

(signed)

18/02/03'

 

  1. It is to be noted that the transaction encapsulated in the agreement was an outright and unconditional sale, save of course, that the purchase price was made payable in instalments. It was also for an indeterminate period of occupation or possession by the appellant. To the contrary, the Act stipulates that unless with the prior permission of the Minister, it is not competent for a foreign national to acquire agricultural land through registration of transfer of ownership in the deeds registry or to enter into any agreement with any other person whereby any right to occupation or possession of agricultural land is conferred upon a foreign national for a period of more than 10 years or even for shorter periods but which could exceed 10 years in aggregate. Therefore, the purchase agreement in casu was undoubtedly in violation of the Act.

 

  1. It is evident from the testimony adduced in the court a quo that the appellant as well as the respondents were all well aware of the restriction imposed by the Act. To the contrary, the parties feigned ignorance of the requirement to obtain the Minister’s permission prior to entering into the contract. They elected to enter into the sale of the land agreement on the pretext that the Minister’s permission could be obtained after striking their deal. I shall shortly justify my labelling their action in this regard as being a pretext, but let me first recapitulate the position regarding contracts which are made in contravention of the law.

 

  1. When two parties enter into an illegal contract and are equally tainted with the illegality their transaction is caught by the maxim in pari delicto potior est conditio defendentis (possidentis). The result is generally that the defendant, or person in possession of the benefit of the contract, is in a better possession. This position is further bolstered by yet another maxim, namely ex turpi causa non oritur actio. In other words, one cannot institute a court action based on an illegal act. This in effect means that the purchase price is irrecoverable. However in Jajbhay v Cassim 1939 AD 537 it was decided that if a strict application of the two maxims, and especially the former, would lead to an unfair enrichment of one party at the expense of the other, it is sometimes necessary to relax the principle in order to do justice between man and man.

 

  1. The trial judge expressly acted pursuant to the principle in Jajbhay, in granting the order that the respondents should refund the whole N$672 000 purchase price they had received from the appellant. This is especially so taking into account the fact that after the abrogation of the contract the respondents got their farm back.

 

  1. It is to be noted, however, that the appellant got a favourable judgment not because he came to court with clean hands, but because the par delicto rule was relaxed. Therefore, although the appellant was mathematically 100 per cent successful in his action for restitution as Mr Frank submitted, his conduct relating to the contractual interaction with the respondents was reprehensible as found by the judge. That much is beyond peradventure. Therefore, in my view Mr Frank’s submission on that score missed the point.

 

Evaluation of the appellant’s contestations

  1. For a better appreciation of the submissions made on the appellant’s behalf, I now propose to appraise the judgment of the trial court with particular reference to the reasoning that led to the appellant being denied the costs aforementioned.

 

  1. The court below quite correctly held that the wording of that contract clearly evidenced a concluded and effective agreement, leaving no room for the Minister to give prior consent. That view is also sealed by the fact that the first four instalment payments were made and received. The last of those must have been made on 17 October 2003 according to the contract. That was almost eight months after the sealing of the agreement. Indeed, the evidence also showed that the appellant took vacant possession of the Farm Zaris and even commenced agricultural activities thereon. It was in fact the last mentioned activity which gave justification for the respondents to institute their abortive counterclaims. All these factors belie the suggestion that there was any inclination on the part of any of the litigants to secure the Minister’s statutory consent not only before but even after the execution of the contract. As already indicated, the Act required an antecedent permission. That is why I term the parties’ action as a pretext when they postured that they intended to obtain the Minister’s permission after entering into the contract.

 

  1. In the course of hearing this appeal the trial judge was roundly criticised for denying the appellant the two categories of costs identified in the preceding passages of this judgment. Did he deserve that damnation? In order to show how he justified his decisions on this matter, I can do no better than reproduce the relevant parts of his judgment which reflect his approach. The following are the relevant portions of it:

 

'Costs

 

[53] Plaintiff prays for a special costs order because of what plaintiff’s counsel argues was the undue prolonging of the matter by the defendants. On the other hand, the defendants pray for a costs order against the plaintiff on the scale of attorney and client for what is characterised by the defendants as the fraudulent and dishonest scheme employed by the plaintiff to obtain a controlling interest in the third defendant and the unfounded allegations made by the plaintiff against the defendants.

 

[54] Costs is a matter within the court’s discretion. Ordinarily, costs must follow the event. The plaintiff has succeeded in obtaining an order granting him restitution of the purchase price, while the defendants successfully resisted his claim for interest. That fact alone would have led me, in my discretion, to deny either side an order for costs. However, there is more than that. The manner in which this case was litigated calls for censure of both parties. There has, in my view, been after the fact rationalisation by either party during the course of the trial. To a greater or lesser extent, both parties amended pleadings or tailored evidence to suit the circumstances. The very extensive amendment by both sides had the result that the case to be finally adjudicated was very different from the one originally pleaded by the parties. That is common cause.

 

Reprehensible conduct by the parties

The plaintiff

[55] This case was commenced by the plaintiff principally relying on the alleged fraudulent misrepresentation by the defendants. It was alleged that the defendants knowing that the sales agreement between the parties was illegal ‘expressly misrepresented’ to the plaintiff that it was a lawful agreement. It was very late in the day after denials in the plea that this stance was abandoned. Remarkably, the plaintiff feigned ignorance of the allegations of fraud against the defendants under cross-examination and implied that it was made without his instruction. I reject that suggestion as palpably false and agree with Mr Nel that if indeed that was the case, his legal practitioners of record would have taken the stand to say so to the court. It is trite that the allegations of fraud should not be made lightly, and if made, requires strong evidence to be sustained. The plaintiff acted most reprehensibly in making allegations of fraud against the defendants, which he could not sustain. That calls for censure.

 

[56] Another aspect of the plaintiff’s conduct that calls for censure is the fact that he laid baseless charges of criminal conduct against the second defendant, which were so palpably unmeritorious that he never even pursued them and had hard time explaining in court why he did not pursue them to their logical conclusion. It was obvious to me that the reason nothing came of these charges was not lack of interest on the part of the authorities but his lack of interest in them. The inference that he initiated them in order to gain some advantage over the defendants over their dispute is inescapable. Another incident is a denial made by the plaintiff through the cross-examination of the first defendant that she met with the plaintiff on Farm Zaris on the weekend of 2 March 2003. He based the denial on the assertion made by counsel on his instruction that he could not have met the second defendant as alleged by her because on that date he was in South Africa and that his passport would prove as much. That allegation too had to be retracted because, when produced, his passport proved the contrary. Considering that the challenge to the first defendant’s version of events was made to place her testimony in unfavourable light in preference to his, such false instruction to counsel is most reprehensible.

 

[57] These incidents compel me to agree with the suggestion made by Mr Nel in argument that the ‘pattern of instructions given by the plaintiff to his legal representatives to launch very serious attacks’ on the characters of the defendants were ‘unsubstantiated and false’. In addition to all these considerations, the evidence amply demonstrated that he is a man who showed no respect for the laws of Namibia. He successfully flouted the laws of Namibia once and had the audacity to try to do so a second time. The least the courts of this land can do is to frown upon his conduct by denying him the costs of seeking legal redress from the courts of the land whose laws he has shown blatant and callous respect.'

 

  1. On the flip side of the coin, so to speak, the judge also examined the conduct of the respondents in relation to the manner in which they interacted with the appellant during the steps leading to this case. Having done so, it suffices, for the purpose of this judgment, to state that he found them equally reprehensible. In the result, he also denied them any costs which they might otherwise have been eligible to earn in respect of their successful and spirited opposition to the appellant’s claim for interest. There was, therefore, a lose-lose situation on the costs issue. This would therefore appear to be the complementary side of the undertaking the judge had made to do justice between man and man when he relaxed the par delictum rule.

 

  1. Reverting to the appellant, the story needs to be retold of how he managed to get the respondents to offer him the Farm Zaris CC. In his judgment, the trial judge recorded that the first respondent had questioned the appellant how he, as a foreign national, could acquire agricultural land in Namibia, namely the third respondent, in the light of the law of the country. The appellant reportedly replied that it was easy to deceive the authorities as he had once done when he purchased a certain Montana Farm also situated in Namibia. In that incident, he had falsely represented to the authorities that he had a Namibian partner, one Albertus Bernadus Van Niekerk (Albertus), who would be allotted the majority shareholding in the corporate entity into which the legal ownership of that farm was to be vested. To that end he had established a spurious company styled Avril 67 (Pty) Limited. He apparently convinced the first respondent that he would use the same stratagem in acquiring Farm Zaris CC.

 

  1. Albertus was subpoenaed as a witness in this case to confirm the Montana episode. His evidence very lucidly set out the matrix used to accomplish that deception. He testified how he was indeed enlisted as a 51 per cent shareholder, but to all intents and purposes he was not involved in the running of the Montana Farm, nor did he derive any dividends or any other benefits as a shareholder and, supposedly, as also a director of the Avril 67 (Pty) Ltd.

 

  1. True to his word, the appellant had made similar arrangements for another fake majority shareholder in the Zaris Farm CC saga. This time, however, which was some 17 months or so after he had moved on to Farm Zaris but before the final execution of the agreement, the drift of circumstances went awry. The result was that the contract had to be, and was, aborted.

 

Costs to follow the event

  1. As already adumbrated in this judgment, it is settled law that a trial court has a discretion as to whether to award costs or not to a party, and if it has to make an award, to which of the parties to the proceedings. That discretion, however, has to be exercised judicially and not capriciously or arbitrarily. The general rule, however, is that costs follow the event, that is to say that the successful party gets his or her costs. Put adversely, the unsuccessful party is, as a general rule, mulcted in costs. This being the general rule, an appellate court will be slow to interfere with the trial judge’s decision in the manner the costs were awarded. Such interference cannot be justified on the mere feeling that if the appellate judge had been presiding at the trial he or she would have made a different costs order. The power to interfere can only be exercised if it is found that the trial judge did not act judicially, or when the appellate court is of the view that the order denying the costs is vitiated by a misdirection, or if the trial judge acted capriciously or arbitrarily.

 

  1. Examples of the application of the costs rule in the manner narrated in the preceding paragraph are replete in judicial precedents. A couple of examples will, however, suffice.

 

  1. In the majority decision in Fripp v Gibbon & Co 1913 AD 354 at 363, de Villiers JP, sitting with Solomon J, Lord de Villiers CJ, Maasdorp CJ and Buchanan AJP, rendered the rule in the following terms:

 

'Questions of costs are always important and sometimes complex and difficult to determine, and in leaving the magistrate the discretion the law contemplates that he should take into consideration the circumstances of each case, carefully weighing the various issues in the case, the conduct of the parties and any other circumstance which may have a bearing upon the question of costs and then make such order as to costs as would be fair and just between the parties. And if he does this, and brings his unbiased judgment to bear upon the matter and does not act capriciously or upon any wrong principle, I know of no right on the part of the court of appeal to interfere with the honest exercise of his discretion. The court of appeal assumes that the magistrate has exercised his discretion unless there are good reasons for holding that he has not done so.'

 

  1. And in Attorney-General, Eastern Cape v Blom & others 1988 (4) SA 645 (A) at 670D-E, Corbett JA, sitting with Hefer JA, Groskopf JA, Vivier JA and Viljoen JA concurring, expressed the same rule in the following words:

 

'In awarding costs the court of first instance exercises a judicial discretion and a court of appeal will not readily interfere with the exercise of that discretion. The power of interference on appeal is limited to cases of vitiation by misdirection or irregularity, or the absence of grounds on which a court, acting reasonably, could have made the order in question. The court of appeal cannot interfere merely on the ground that it would itself have made a different order. (See Protea Assurance Co Ltd v Matinise 1978 (1) SA 963 (A) at 976H; Minister of Prisons & another v Jongilanga 1985 (3) SA 117 (A) at 124B and the authorities cited in these two cases).'

 

  1. In broad terms, the same rule applies in English law. The following is extracted from Halsbury’s Laws of England 4 ed vol 37 para 714, viz:

 

'Exercise of court’s discretion to award costs

 

In general, costs are in the discretion of the court, which has full power to determine by whom and to what extent they are to be paid, although there are a number of limitations upon the exercise of this discretion. Where costs are in the discretion of the court, a party has no right to costs unless and until the court awards them to him, and the court has an absolute and unfettered discretion to award them. This discretion must be exercised judicially; it must not be exercised arbitrarily but in accordance with reason and justice, and the judge ought not to exercise it against the successful party except for some reason connected with the case. However, when a judge, deliberately intending to exercise his discretionary powers, has acted on facts connected with or leading up to the litigation which have been proved before him or which he has observed during the progress of the case, there is no ground for appeal.'

 

  1. The inevitable question which arises from the foregoing is whether the learned trial judge in casu did or did not satisfy the parameters which have been spelt out in the preceding paragraphs. In other words, did he act judicially in denying the appellant his costs, or, on the other hand, did he act capriciously or arbitrarily in doing so? Further still, can it be said that his order is vitiated by any misdirections? If his decision is captured by the former alternative, then this appellate court does not have power to interfere even if we feel that on the facts presented and proved in the case our order would have been different from his. However, if in keeping with the latter alternative, our considered view is that his action is vitiated by misdirection or irregularity, or that he acted capriciously, then our duty will clearly be to interfere with his discretion.

 

  1. Since the appeal is in two segments, namely, first, as regards costs relating to the claim in convention, and secondly those touching on the respondents’ counterclaim, I shall start with the former.

 

  1. Basically, the complaint regarding the claim for restitution was about the trial judge’s alleged failure to act judicially, implying that he acted capriciously or arbitrarily, and secondly that the judge, having denied the appellant interest on his claim for restitution, it was an imposition of double punishment to additionally deny him costs. I must here underscore the fact that the appellant did, through his counsel, emphatically concede that he was not disputing the negative interest order.

 

  1. What I can glean from the High Court’s judgment is that the judge was motivated by the circumstances he narrated in the paragraphs reproduced earlier on herein.

 

  1. First, the judge recapitulated that the appellant had initially alleged in his particulars of claims that in entering into the sale of land contract, he was induced by the fraudulent misrepresentations made by the respondents to the effect that the intended contract was lawful. However, owing to the heated cross-examination to which he was subjected, the appellant recanted from that averment. He then purported to take shelter in the evidently false excuse that he was not the source of that damning averment, thereby implying that the allegation was included in the particulars of claim without his instruction. That somersault led to a belated amendment of the particulars of claim. My immediate comment on that turn of events is that it goes against the grain vis-à-vis the submission by Mr Frank that all the delays which occurred after the start of the trial in this case were caused by the respondents. That submission was used to anchor the claim that the appellant should have been awarded his costs for his success in the restitution claim because the time wasters, so to speak, were the respondents.

 

  1. In fact the trial judge made the observation that both sides in this litigation had amended their pleadings so many times and altered their stances to suit the development of the evidence, and this resulted in a situation whereby the case which was eventually adjudicated on was different from what it was initially. This would appear to explain why an action which began in 2005 was only concluded in 2013, that is close to eight years later. I quote again from the judgment appealed from to explain why the judge found it justified to censure both sides:

 

[54] . . . The manner in which this case was litigated calls for censure of both parties. There has, in my view, been after the fact realisation by either side during the course of the trial. To a greater or lesser extent, both parties amended pleadings or tailored evidence to suite the circumstances. The very extensive amendment by both sides had the result that the case to be finally adjudicated was very different from the one originally pleaded by the parties. That is common cause.'

 

  1. Having gone through the thirteen records of appeal, I cannot agree more with the preceding observations by the judge. This again contradicts the submission by Mr Frank that all the delays which were occasioned after the commencement of the trial were caused only by the respondents. In fact the appellant was an equal culprit in this regard.

 

  1. Other facts connected to this case which the judge in the court below took into account in making the impugned costs order included the following: That the appellant never denied Mrs Dreyer’s evidence about him having informed her that he was capable of duping the officials of this country as he had done when he acquired the Montana Farm. It is also recorded that the appellant had made some criminal allegations against the first respondent. However, he failed to follow them up to their logical conclusion because they lacked merit. In the circumstances, the judge stated that he found it inescapable to draw the inference that the appellant had initiated the criminal allegations in order to gain (an unfair) advantage in his dispute with the respondents.

 

  1. Another of the incidents taken into account by the judge was that during her evidence-in-chief the first respondent had testified that she had met with the appellant on 2 March 2003 in connection with the transaction between the parties. That was challenged in cross-examination when it was put to her, under the appellant’s instructions, that the appellant could not have met her on that day because he was then in South Africa. However, an inspection of his passport revealed that he was in fact not in South Africa on that day. The judge noted that the challenge of the first respondent’s evidence on this score had been designed by the appellant only to show that the first respondent was an untrustworthy witness, but when it exploded, the appellant retracted from it.

 

  1. After considering what he termed the reprehensible conduct of the parties, the learned trial judge made the following critical remarks concerning the appellant:

 

'These incidents compel me to agree with the suggestion made by Mr Nel (the then respondents’ legal counsel) in the argument that the pattern of instructions given by the plaintiff (the present appellant) to his legal representatives to launch very serious attacks on the characters of the defendants (the present respondents) were unsubstantiated and false. In addition to all these considerations, the evidence amply demonstrated that he (the present appellant) is a man who showed no respect for the laws of Namibia. He successfully flouted the laws of Namibia once and had the audacity to try to do so a second time. The least the courts of this land can do is to frown upon his conduct by denying him the costs of seeking legal redress from the court of the land (for) whose laws he has shown blatant and callous disrespect.'

 

  1. The foregoing remarks would appear, at first blush, to pertain and only relate to the denial of costs as they touch on the claim for restitution. I have carefully examined the judgment and have not come across a portion of the judgment where the judge specifically and/or expressly dealt with the justification for denying the appellant costs relating to the counterclaim. However, during the time Mr Frank was making his submission, I quote hereunder the following part of his presentation:

 

'He (meaning the present appellant) could not have foreseen that there (sic) would come with meritorious, baseless counterclaims and he had to defend it (sic), he cannot have defended it my Lord. My Lord so we submit and that would be in accordance, there is no reason we submit not to have adhered to the normal rule, successful party to be awarded costs as far as the counterclaim is concerned. The claim in convention is a bit of a different (sic), it has got a different view to it, that is a more difficult one. But my Lord that is as far as the counterclaim is concerned, I will move on to the argument on the claim in convention.'

 

  1. At that stage my brother, Mainga JA, made an intervention and said:

 

'But before you move on, is my understanding correct that the court took into account the overall conduct of the parties and therefore the decision also to deny the appellant costs on the counterclaim is based on the overall conduct of the way in which the entire proceedings were conducted and also what different stances that had been regarded as reprehensible conduct?

 

Mr Frank: Yes. I understand that My Lord . . .'

 

  1. I similarly take the view, for the purpose of this judgment, that the remarks the trial judge made concerning the reprehensible conduct of the parties embraced the whole case, including the part concerning the counterclaim. In that vein, I want to add that by embarking on the venture of leaving his homeland South Africa in order to come and make a quick buck, as the saying goes, in Namibia, the appellant opened a proverbial can of worms. After all, the institution of the counterclaims by the respondents was an offshoot of that venture. Inextricably so, in my view. In other words, there is no justifiable room for compartmentalising the repercussions flowing from the appellant’s adventure. After all the counterclaims arose from the use of the same Farm Zaris after its illegal purchase by the appellant.

 

  1. That the learned Judge-President was alive to the rule that the power to award costs was vested in his discretion is evident. He so directed himself at the very outset. Having done so, he then went on to state his reasons to justify denial of the same from the appellant notwithstanding that he was the successful party vis-a-vis the claim in convention. He also considered the overall conduct of the parties, in particular the appellant. His undoubted conclusion was that the appellant’s conduct militated against an award of costs in his favour. It is my deep conviction that the judge did exercise his powers judicially in this regard, and not in any way capriciously or arbitrarily.

 

  1. The fact that the judge granted the appellant leave to appeal would appear, on the face of it, to imply that he might have subsequently entertained some doubt about whether ‘another court’ might take a view adverse to his order on the costs issue. However, as Ms Schneider, counsel for the respondents, ably submitted, the judge was, at the time of considering the appellant’s application for leave to appeal against the costs orders, under the impression that the appellant’s right of appeal on the merits was still subsisting. To the contrary, appellant’s notice of appeal on the merits, just like the respondents’ notice of cross-appeal also on the merits, had lapsed. The judge was unaware of that eventuality. That that was his frame of mind is amply inferable from his statement on the matter, as I proceed to quote hereunder from his ruling at para 9:

 

'[9] It is inexplicable why the respondents did not set down their application for leave to appeal my cost order adversely affecting them at the same time as the plaintiff’s application. The court is therefore being placed in the position of having to undertake piecemeal adjudication of the matter. I am faced with a situation where the party who wants to oppose the applicant’s leave to appeal is itself seeking leave to appeal my cost order adverse to them. Not only that, all of the factual and legal disputes – and they are many as is evident from the respondents’ notice of appeal to the Supreme Court – are alive and being revisited in the Supreme Court. A finding by that court varying my findings on any of those issues will in all probability necessitate it considering afresh the costs order that I made.'

 

  1. And part of para 10 thereof is couched as hereunder, viz:

 

'. . . Both parties have, as of right, chosen to revisit on appeal all the issues that were ventilated in the trial court, including the costs liability. Fairness and justice demands that they be allowed to fully ventilate all those issues . . . (In both quotations the underlining are mine for emphasis.)

 

 

 

  1. In concluding my observations on the submissions designed to impeach the trial court’s judgment, I must state, in fairness to the learned counsel for the appellant, Mr Frank, that I did not hear him expressly indicting the trial judge of having failed to exercise his discretion judicially, nor that he had acted arbitrarily or that his judgment was vitiated by misdirections. Rather, what I heard him stress was something to the effect that the judge’s failure to grant the appellant favourable costs orders was 'disquietingly inappropriate'.

 

  1. In the result, I feel sure and certain that this appeal lacks merit. The following is, therefore, my consequential order:

 

1. The application for condonation for the late filing of both the exhibits and the heads of argument is granted.

 

2. The appeal is dismissed.

 

3. The appellant is to pay the:

 

(a) costs of the application for leave to appeal in the court below; and

 

 

(b) costs of this appeal such costs to include the costs of one instructing and one instructed counsel.

 

 

 

_________________________

CHOMBA AJA

 

 

 

 

 

________________________

SHIVUTE CJ

 

 

 

 

 

 

_________________________

MAINGA JA

 

 

APPEARANCES:

 

APPELLANT: T J Frank SC (with him G Dicks)

Instructed by Du Toit Associates

 

RESPONDENTS: H Schneider

Instructed by Francois Erasmus & Partners