Likuwa v The Government of The Republic of Namibia NAHCMD (24 September 2024)

What transpired?

The applicant (Felix Ndara Likuwa), an incola of the High Court (a person who is a resident of Namibia applied for a loan from the fifth respondent (Letshego Bank Namibia Ltd), and it was granted. 

The applicant then authorised the first respondent (the government) to deduct the monthly repayments directly from his remuneration, in favour of Letshego. The applicant also gave Letshego an undertaking not to cancel the instruction given to government to deduct the
monthly repayments directly from his remuneration.

The applicant subsequently wrote to the government respondents to revoke the authority for the deductions to be carried out, without success. According to him, he was provided with the loan without Letshego carrying out an affordability assessment in order to determine whether he could afford the monthly instalment. 

Moreover, the applicant contends that although he authorised the monthly deductions from his remuneration, the deductions contravened section 12 of the Labour Act 11 of 2007.

The applicant then instituted motion proceedings against the respondents seeking, inter alia, a declaratory order that the monthly personal loan repayment made from his remuneration by the first respondent in favour of the fifth respondent’s loan agreement is unlawful, illegal and unconstitutional.

The fifth respondent (Letshego) and sixth respondent (Avril Payment Solutions (Pty) Ltd) subsequently brought this application for security for costs against
 the applicant in terms of rule 59(1).
However, they did not file answering affidavits. The applicant averred that Letshego and Avril are barred from filing further papers, and that the notice for security for costs does not stay the filing of pleadings. 

The applicant further averred that no relief is sought against Letshego and Avril, therefore, no basis exists for their demand for security for costs.

What were the issues?

As a result of the parties not seeing eye to eye on the notion that an application for security for costs stays the filing of further papers, the court was called upon to determine that question in a ruling that was delivered just three months ago. The court held that the application for security for costs in that instance indeed stayed the filing of answering papers.

The determination this time around was whether or not the applicant is liable to pay security for costs. This issue was only alive between the applicant, Letshego and Avril. 

Points of law in limine

‘[18] The applicant raised two points of
 law in limine, namely: that the respondents are not parties entitled to demand security; and that the respondents have not established all the jurisdictional facts to support a finding that the applicant is a front for Mr Thersius Biermann, a legal practitioner of this court, on a balance of probabilities.

[19] I hold the view that the second point of law in limine about establishing the jurisdictional facts to support a finding that the applicant is a front for Mr Thersius Biermann is, strictly-speaking, not a point of law, and certainly not one that has the attributes of being raised as a point of law in limine. For that reason, I shall address the said point as one of the applicant’s contentions to substantiate his resistance to the respondents’ application for security for costs. 

In the event that I am wrong, and that the second point of law in limine qualifies to be treated properly as a point in limine, I am of the considered opinion that the said point is intertwined with the merits of the application for security for costs and, therefore, in the exercise of my discretion, I have decided to determine the sustainability of the said point raised together with the merits of the matter. 

This leaves only the first point of law in limine to be determined at this stage, which I turn to right away.

Discussion 

[20] As stated, the applicant contends that the respondents lack the necessary capacity to demand security for costs in this matter. Simply put, the applicant contends that the respondents are not parties entitled to demand security in this matter. The applicant bases his point on the fact that, in the main application, he seeks no relief against the respondents. He further contends that the fact that he cited the respondents in the main application for the interest that they may have, does not ipso facto bestow standing on the respondents….

[22] In a ruling of this court delivered in this matter on 27 June 2024, this court remarked as follows at paras 31-33: 

‘[31] I have opted to take a detour and address the contention by the applicant that no relief is sought against Letshego and Avril, therefore, no basis exists for their demand for security for costs. The applicant contends that the said respondents are not directly affected by the relief sought in the application.  

[32] The applicant, in the first place, cited Letshego and Avril in his application as parties. In my view, he cited them as he appreciated the interest that they may have in the matter and the relief sought. I, therefore, do not agree with the applicant’s contention that just because no direct relief is sought against the respondents, they have no basis on which they seek security for costs. 

[33] In my view, the respondents have a duty to protect their rights and interests. Considering that they were cited by the applicant in these proceedings, they have the right to investigate the applicant’s papers and case, engage and consult counsel, and file the necessary papers. In the process, it is inevitable that they will incur legal costs. I find that the applicant’s contention that because no relief is sought against them, they have no basis to seek security for costs, lacks merit. On that premise, I hold
that Letshego and Avril were entitled to enter the battleground of the application, and present their case. I find that the respondents were therefore, entitled, in law, to seek security for costs.’

[23] I am of the considered view that the above remarks stand true to the present matter. It is the applicant who cited the respondents as parties. It is, therefore, the applicant who invited the respondents to join the proceedings and participate, if they so elect. 

There is a reason why the applicant did not cite Jack and Jill, but cited the respondents on recognition of the interest that they have in the application. The applicant, in my view, cannot run away from the fact that the respondents did not apply to intervene in the application, but because of the interest that they have in the matter, he cited them as parties.

Analysis

On the issue of whether the applicant was liable to pay security, the court considered the provisions of rule 59 and case law – Hepute and Others v Minister of Mines and Energy and Another 2008 (2) NR 399 (SC):

[40] In Hepute, this court, in a judgment by Muller J that was upheld by the Supreme Court, dealt with the issue of security for costs in the following terms:

‘It is trite that in an application for security for costs,

(a) the court has a discretion to grant or refuse such security;

(b) the question of security for costs is not one of substantive law, but one of practice; and

(c) the court does not enquire into the merits of the dispute, but may have regard to the nature of the case.’

[41] In the Hepute matter, the court is given the discretion to grant or refuse the application for security, and that the question is not one of substantive law, but one of practice. This means that the court will exercise its discretion by using practice as authority to do so, and not necessarily substantive law. In addition, the court does not delve into the merits of the case, but will merely have regard to the nature of the case.

[44] What is clear from the decision in the Hepute matter in the Supreme Court is that an incola generally enjoys the immunity not to pay security for costs, because every citizen should have uninhibited access to the courts. There is, however, an exception to the rule. The exception is that the process of the court should not be abused. An incola who is a man of straw and who litigates in a nominal capacity, or as a front for another, may be ordered to furnish security for costs.

[45] In the matter at hand, it is clear that the applicant is a man of straw, and that he will not be able to meet the legal costs, should costs be awarded against him. What is more interesting is that the applicant has engaged instructing and instructed counsel in this matter, and the applicant flip flops between the position that counsel are instructed pro bono and the position that counsel are paid by an unknown third party. It was pointed out to the applicant’s counsel that, in the normal course of events, it matters not as to who pays a party’s legal fees, but in the present matter, it is alleged that the applicant’s payment for legal fees is done to advance the funder’s own interest and, therefore, the applicant may be acting as a front. Still, Mr Biermann stuck by his submission that it does not matter who is paying, even in light of the allegations made against the applicant.

Conclusion

[52] This court, on the strength of Supreme Court decision of Hepute, cannot allow a party to institute cases just because they have uninhibited access to the courts. There must be a means to an end and in this case, it is one of the exceptions also laid down by the Supreme Court in Hepute. 

I am, therefore, of the opinion that the applicant is a man of straw, and he will not be able to sustain a costs order if such an order must be granted against him. I find that, in view of the above conclusions, that the applicant is acting as a front for Mr Thersius Biermann, who in this matter, is out to hunt Letshego to rekindle their business relationship, the applicant will be held liable to furnish security for costs for the respondents.’

How were the issues determined?

Held: that an incola generally enjoys the immunity not to pay security for costs, because every citizen should have uninhibited access to the courts. There is, however, an exception to the rule. The exception is that the process of the court should not be abused. An incola who is a man of straw and litigates in a nominal capacity, or as a front for another, may be ordered to furnish security.

Held further: that where a third party fuels another to litigate in order to frustrate or harass or coerce the respondent(s) to do something, that very fact qualifies it to be a front, or as one acting in a nominal capacity.

The applications for security for costs are upheld.

What the Court ordered

The application was adjudged to be liable to furnish security for costs to the fifth and sixth respondents. The nature, form and amount of security for costs to be paid by the applicant was to be determined by the Registrar of the High Court, within 7 days, together with the time and period within which to pay such security.  Should the applicant not furnish security as determined by the Registrar and within the time frame given, the proceedings were to be automatically stayed. The applicant was ordered to pay the costs of this application, consequent upon the employment of one instructing and one instructed counsel, subject to rule 32 (11).

The matter was postponed for status hearing; the parties were ordered to file a status report.

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