WINDHOEK – Three judges of the Namibian Supreme Court yesterday struck from the roll the appeal of the minority shareholders in the liquidated SME Bank for failing to file their heads of argument within the prescribed three months after the judgment to finally wind up the bank was handed down by the High Court.
An attempt by the lawyers of Metropolitan Bank of Zimbabwe and World Eagle Properties, who lodged the appeal to seek condonation for the late filing of the heads of argument, was unsuccessful, which meant the appeal lapsed automatically.
South African Advocate Anthony Bishop, instructed by Sisa Namandje, argued in their condonation application that the late filing was due to an erroneous belief by Namandje that the date of hearing of their appeal was November 9, 2018 and not the actual date of October 9.
According to Acting Justice of Appeal Dave Smuts, with Justice of Appeal Sylvester Mainga and Acting Justice of Appeal Elton Hoff concurring, the explanation was not unreasonable but that it only satisfied one leg of a two-pronged enquiry.
They said the appellants needed to satisfy the court that they have reasonable prospects of success in the merits of the appeal for condonation to be granted and the appeal reinstated. However, the appeal judges said the argument advanced by the appellants holds no merit and the appeal enjoys no prospect of success, and that condonation and reinstatement should therefore not be granted. The Supreme Court further said that because no issues of substance concerning the basis for winding-up were raised by the appellants, and that their procedural points were without merit and merely served to delay the winding-up process of the SME Bank, costs should be borne by them. As a result they ordered the appellants to pay the costs of the appeal on the scale of one instructing and two instructed counsel.
According to the appeal judges, the High Court was correct in finding that the SME Bank was insolvent and that it was just and equitable for it to be wound up and the Bank of Namibia’s (BoN) winding-up application was not an abuse of process.
The appellants argued that BoN abused its powers when it applied for the winding-up of the SME Bank. They argued that the winding-up of the SME Bank should have been a last resort and that BoN was obliged to exhaust less far-reaching remedies given the mandate of the SME Bank, which is to uplift previously marginalised and disadvantaged communities.
However, the appeal judges found that the supervisory and regulatory powers vested in BoN through the Banking Institutions Act provided BoN with a wide range of remedial powers when they find something afloat and to take corrective measures including the winding-up of any banking institution as well as for the incorporation, management and liquidation of companies. “BoN has a statutory duty to perform its supervisory functions and exercise its objective of maintaining a sound monetary, credit and financial system in Namibia.”
High Court Judge Hannelie Prinsloo, in accordance with the rules of the Supreme Court, granted the order for the final winding up of the SME Bank in November last year and ordered that the SME Bank be placed under a final winding-up order in the hands of the Master of the High Court of Namibia.
She also granted that the Metropolitan Bank of Zimbabwe and World Eagle Properties, which opposed the winding-up application, pay the costs of the opposition on the scale of one instructing and two instructed counsels.
MetBank had 30 percent shareholding in the SME Bank and World Eagle Properties 5 percent.
Liquidators DJ Bruni and Ian McLaren were appointed to liquidate the bank’s assets.
The Bank of Namibia was represented by Andrew Corbett SC assisted by Advocate Deon Obbes instructed by ENS Africa.