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REPORTABLE

REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK


JUDGMENT
Case no: I 2347/2014
I 795/2014
I 797/2014
I 799/2014
I 2385/2014
I 2389/2014
I 3618/2013
In the matters between:
KALAHARI WIRE PRODUCT (PTY) LTD AND 6 OTHERS

PLAINTIFFS

and
PROPERTY INVESTMENTS NO. 5 CC AND 6 OTHERS

DEFENDANTS

Neutral citation: Kalahari Wire Product (Pty) Ltd v Property Investments No 5


CC (I 2347/2014) [2014] NAHCMD 191 (20 June 2014)
Coram:

SMUTS, J

Heard:

16 June 2014

Delivered:

20 June 2014

Flynote:

Debt collection cases falling within the jurisdiction of the

magistrates courts. The court, in the exercise of its discretion, declining to


award any costs in such matter unless good and sufficient circumstances are

2
shown to exist to warrant the institution of such matters in the High Court.

ORDER

The plaintiffs in these matters are not awarded costs

JUDGMENT

SMUTS, J
[1]

During the past few years, there has been a growing tendency of debt collection matters

falling within the jurisdiction of the of the magistrates courts, being issued out of this court and
coming on the motion roll for default judgment. When setting in motion court on 29 November
2013, I granted costs on a magistrates court scale in a few matters of that nature but informed
counsel that in future parties may be denied any cost order in their favour in respect of debt
collection matters falling within the jurisdiction of the magistrates court of N$25 000. The JudgePresident has expressed similar sentiments and had previously noted with concern, this growing
tendency in his address on the occasion of the opening of the court year a few years before.
[2]

On 11 April 2014, I again presided in motion court. Despite the sentiments we had

expressed, this tendency had not abated but had, if anything, become more pronounced. A
number of matters on the roll comprised debt collection matters which fell within the jurisdiction
of the magistrates courts. In each matter, I raised these sentiments expressed previously with
each counsel and indicated that I would be reluctant to grant any cost order in view of the
excessive workload of this court and the deleterious effect upon the administration of justice if
this court were to be required also to deal with what is in essence magistrates court work.
Counsel in some of those matters then only moved for orders for the judgment amounts and
interest upon them and not for costs.

3
[3]

Ms De Jager, who appeared in at least 4 such matters stood those matters down to

obtain instructions from her instructing counsel. She then informed me that her instructing
counsel did not accept that those plaintiffs should not obtain a costs order on at least a
magistrates court scale. She then moved for judgment for the debts which was granted and
sought a postponement to argue the question of costs in accordance with the instructions she
had received from her instructing counsel. One other counsel who had some similar cases on
the roll, indicated in court that his firm would cease bringing such matters to the High Court and
would proceed against debtors in the magistrates courts.
[4]

Those four matter were postponed together with three others from a subsequent motion

court where Ueitele, J adopted a similar approach.


[5]

The plaintiff in five of the seven matters is a retail concern which supplies building

materials on credit terms to its customers. One of these terms of credit is that the debtors agree
to pay costs on the scale as between attorney and client in the recovery of its debts. One of the
other plaintiffs is a commercial bank, calling up a loan. Incidentally in the same motion court,
another firm acting for the same institution, did not press for costs in a matter similarly falling
within the jurisdiction of the magistrates courts. Then there is a claim for goods sold and
delivered on credit.
[6]

Ms De Jager prepared detailed and well researched heads of argument when the

question of costs was argued on 16 June 2014.


[7]

Ms De Jager confirmed that her instructing counsel would have been aware of what I had

stated in November 2013 on the issue. But she submitted that ss2 and 16 of the High Court Act,
19901 read with art 80 of the constitution afforded plaintiffs the right of recourse in the High
Court. Ms De Jager however accepted that this court had not denied that recourse, in granting
judgment and interest on the judgment debt. But she argued that the denial of costs in such
matter would be arbitrary merely because the claims were within the jurisdiction of the
Magistrates Courts.
1 Act 16 of 1990.

4
[8]

Ms De Jager referred to the purpose of an award of costs, being to indemnify successful

parties for the expenses they had been put through to initiate or defend litigation. She did so with
reference to authority.2
[9]

Ms De Jager correctly accepted that the basic rule on the issue is that an award of costs

is in the discretion of the court and that the general approach is that costs would follow the
result. This was recently expressed by the Supreme Court as follows:
[20] The issue of costs is a matter that is in the discretion of the court. The general approach is
that the costs should follow the result. However, the court may, in the exercise of its discretion,
depart from this rule.3

[10]

I accept that there would need to be good grounds to depart from the general rule that

costs follow the result.4


[11]

Ms De Jager argued that the only circumstance raised by the court in these cases was

that the plaintiffs should have instituted their actions in the magistrates courts. Ms De Jager
referred to the approach of Coetzee, J (later DJP) in Standard Bank of South Africa v Shiba,
Standard Bank of South Africa v Van der Berg5 where he had dismissed applications, for default
judgment in respect of claims within the jurisdiction of magistrates courts because of the
tendency in that court for certain financial institutions to pursue their debt collection in that court
(which could have been instituted in magistrates courts). In a carefully reasoned judgment,
spelling out the impact of such matters in fouling up the cogs of this very machine which must
be kept in running order (with reference to the High Court) he referred to the power of the court
to refuse relief altogether in the exercise of its discretion where there is an abuse of process and
2 AC Cilliers: Law of Costs at 1-4, par 103.
3 Mukapuli and Another v SWABOU Investment (Pty) Ltd And Another 2013 (1) NR 238 (SC).
4 See also Rally for Democracy and Progress v Electoral Commission of Namibia and Others
2013(2) NR 390 (HC) (full bench) at par 327.
5 Alexander v Minister of Justice and Others 2009 (2) NR 712 (HC) 1984 (1) SA 152 at par 80
and the authorities collected there.

5
proceeded to take that course.
[12]

In the course of his judgment, Coetzee, J also referred to the distinction between debt

collecting on the one hand and the settling of bona fide disputes on the other.6 He stressed that
this distinction had been made since time immemorial and that the true function of the (High)
court should exclude much of debt collection and focus upon the latter.7
[13]

The fundamental considerations, so articulately raised by Coetzee, J, some 30 years ago

apply with equal force to the High Court of Namibia. The volume of cases filed in this court has
vastly increased in recent years according to statistics kept by the Registrar. A significant portion
of these cases concern debt collection matters which fall within the jurisdiction of magistrates
courts. This alarming state of affairs is compounded by the very low jurisdictional limit of that
court which has not remotely kept abreast with inflation. The current level of N$25 000 was set in
1997. It has, despite inflation, remained at that level ever since. The position in South Africa is
salutary, given its similar court structure (except for its Constitutional Court which is not relevant
for present purposes) and with similar (although obviously not identical) trends in inflation, given
the link between our respective currencies. In that jurisdiction, the equivalent jurisdictional limit
for magistrates courts is set at R100 000. It can only be a matter of time before there will be
grave harm to the administration of justice if this dire situation is not addressed without delay. It
calls out for law reform and would entail only the slightest legislative invention by the mere
amendment of the amount (of N$25 000) in s29 of that Act and replacing it with a greater
amount of say N$100 000 or whatever amount the legislature considers appropriate. My
recollection of the several debt collection matters which served before me in recent motion
courts was that the claimed amounts in the overwhelming majority of such matters was below
N$100 000.
[14]

Ms De Jager however correctly pointed out that Coetzee Js judgment is Shiba was

overruled by a full court in Standard Credit Corporation v Bester and Others.8 The full court
found that it could not support his approach based upon an assertion of the inherent jurisdiction
6 Supra at 159 G-H.
7 Supra at 159 H-I.
8 1987 (1) SA 812 (W).

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of the Supreme Court on the grounds of an abuse of process to refuse to hear a litigant and
entertain proceedings in a matter within its jurisdiction. The full court referred to an unreported
judgment subsequent to Shiba in which Coetzee DJP also relied upon authorities to refuse to
entertain proceedings so as to prevent an abuse of process and found that these cases were
distinguishable and not decided because a lower court also had jurisdiction. 9 The full court
however held that the court should hear a matter properly before it and within its jurisdiction,
despite its inherent power to prevent abuse. The full court found that the court could deal with
the issue in question (where a lower court also had jurisdiction) by discouraging such
approaches to the High Court by making an appropriate order regarding costs.10
[15]

In that matter (Bester), the attorney had filed an affidavit explaining why the matters had

been brought in the High Court. He referred to a longer period of time taken to finalise matters in
magistrates courts in view of queries received from magistrates and the necessity to instruct
correspondent attorneys in various magisterial districts. The attorney also made it clear that he
did not intend to abuse process by instituting the claims in the superior court. The full court
found, in view of what was stated in the affidavit, that there was not an abuse of process and
granted default judgment and costs on a magistrates court scale.
[16]

Ms De Jager correctly accepted that these cases were distinguishable. I had not

dismissed the plaintiffs claims on the basis of an abuse of process. On the contrary, judgment
had been granted in each of these matters in the claimed sums together with interest. I had only
indicated that costs would be declined in debt collection matters falling within the jurisdiction of
the magistrates courts in order to discourage parties from bringing such matters in the High
Court.
[17]

Ms De Jager also referred to a subsequent matter11 in which a chided Coetzee, DJP

discussed the full bench ruling in critical terms but nevertheless correctly found that he was
bound by it, and granted a costs order in such matter. The thrust of his judgment concerned a
9 Supra at p818 A-D.
10 Supra at 819 D-E.
11 Sealand air Shipping and Forwarding v Lash Clothing Co. (Pty) Ltd 1987 (2) SA 635 (W) AT
642.

7
discussion about the dismissal of matters on the grounds of abuse of process. Costs were only
dealt with briefly and in a sketchy manner.12
[18]

I have referred to these cases in some detail because of Ms De Jagers reliance upon

them. As I have said, many of the factors which motivated by Coetzee DJP in his approach at
the time also bear heavily on this court. I have already referred to the important distinguishing
feature in those cases. The plaintiffs claims in the cases before me have been entertained (and
judgment granted) and not dismissed as an abuse of process. That was the fundamental debate
upon which there was a divergence of views between Coetzee, DJP and the full bench. That
important issue is not raised in these matters. It is thus not necessary for me to express a view
on that issue and I decline to do so.
[19]

What is raised in these matter is whether the plaintiffs should be deprived of their costs in

the exercise of my discretion because their matters are debt collection matters which fall within
the jurisdiction of the magistrates courts so as to discourage litigants from prosecuting such
claims in an already overburdened High Court.
[20]

Ms De Jager submitted that there would need to be grounds to deviate from the general

principle that costs follow the result. She referred to the identical credit applications in 5 of the
matters, (where G. Jensen is plaintiff) and where the debtors agreed to pay costs on the special
scale sought. Ms De Jager referred me to authorities to the effect that a court would ordinarily
give effect to an agreement to pay attorney and client costs. 13 Ms De Jager submitted that I
should give effect to the agreement in the Jensen matters. I have no quarrel with those
authorities at all. They are, with respect, sound. But reliance upon them misses the point. Those
cases concerned the scale of costs to be awarded and not whether costs should be awarded at
all or not.
[21]

It is well settled that an award of costs in the discretion of the court as was stated in the

12 Supra at 642 H-I.


13 See Intercontinental Exports (Pty) Ltd v Fowles 1999 (2) SA 1045 (SCA) at 1055-1056. See
also Santam Bank Bpk v Kellerman 1978 (1) SA 1159 (C).

8
Intercontinental Exports matter:14
The courts discretion is a wide, unfettered and equitable one. It is a facet of the courts control
over the proceedings before it. It is to be exercised judicially with due regard to all relevant
considerations.15

[22]I asked Ms De Jager if there were any circumstances raised in any of the matters which
justified their institution in the High Court such as for instance the location of the debtor (where
there may not be legal practitioners in practice to pursue claims in the local magistrates courts)
and the complexity of a matter. She was unable to point to any such circumstance. She also
rightly accepted that the matters all fell within the category of debt collection.
[23]

The instructing attorney in these matters also did not make an affidavit (as occurred in the

Bester matter) setting out any circumstance which gave rise to difficulties with regard to
prosecuting such matters in the magistrates courts. Not only were no such facts or
circumstances placed before me on that issue, I put to Ms de Jager that my enquiry to my
colleague Hoff, J who chairs the Magistrates Commission revealed that the Magistrates Court
located in Katutura is currectly able to and does attend to debt collection matters without any
appreciable delay in that court. Ms de Jager conceded that nothing to the contrary had been
placed before me. I noted that in four of the seven cases, the debtors resided in or around the
Oshakati/Ongwediva area and that the causes of action had also arisen there at a retail outlet
in Ongwediva. It may also be unduly onerous for debtors. If they were to contest such claims,
they would need to instruct lawyers in the main division of the High Court, some considerable
distance from them. This is compounded by the fact that the Northern Division of the High Court
would in any event have concurrent jurisdiction in such matters
[24]

The full bench in Bester made it clear that a court can discourage litigants from

approaching it in matters where a lower court has jurisdiction by an appropriate cost order as a
facet of its control over proceedings before it. In this context an appropriate order could include
an order depriving such litigants of their costs if no circumstances are referred to which would
tend to justify the institution of those proceedings in the High Court. These considerations may
14 Supra
15 Supra at par 25.

9
include for instance the complexity of matters or where claims would be instituted against
defendants in areas where no lawyers are in full time practice. But none of these factors was
raised in these matters.
[25]

The legislature has recently re-affirmed that the primary function of the High Court is the

delivery of justice in complex matters and those excluded from the jurisdiction of magistrates
courts. This is contained in the recent amendment to s39 of the High Court 16 brought about in
2013.17 That section sets out the power of the Judge-President to make rules, with the approval
of the President. Subsection 39(1)(b) now extends that power:
To regulate the execution of judgments sounding in money against the property salary, earnings
or emoluments of a judgment debtor and in particular for(i)

...

(ii)

...

(iii)

...

(iv)

Any other procedure to be followed to effect the transfer of the execution of certain
judgments to a magistrates court, having regard to the jurisdiction of the magistrates
court, the function of the magistrates court as a debt collecting forum and its prescribed
procedures for debt collection, so as to ensure that the High Court remains efficient for the
purpose of its functions, being the delivery of justice in complex matters and matters which
are excluded from the jurisdiction of magistrates courts; (my emphasis)

[26]The legislative intention clearly stresses the function of the magistrates courts as a debt
collecting forum and expresses the intention that the High Court should remain efficient for the
purpose of the delivery of justice in complex matters and those outside the jurisdiction of the
magistrates courts.
[27]

Pursuant to this legislative intention which thus encapsulates the public interest, the

Judge-President recently made rules with the approval of the President18 which removed
financial enquiries a further function of debt collection from the High Court to the magistrates
16 Act 16 of 1990.
17 By Act 12 of 2013.
18 With effect from 16 April 2014 in Government Notice 4 of 2014 in the gazette of 17 January
2014.

10
courts.19 This court had also previously declined to assume jurisdiction in respect of such
enquiries where an amount of a judgment debt fell within the jurisdiction of the magistrates court
even though the judgment had been obtained in the High Court.20 This court made it clear in that
matter that unless there were good and sufficient circumstances warranting the High Court to
enforce what should have been for a magistrates court to enforce and what should have been
magistrates court judgment (even though it had been obtained in the High Court), the court
would decline to assume jurisdiction in such matters.21
[28]It would seem to me that a similar test of good and sufficient circumstances should exist to
warrant a costs order in matters pursued in the High Court which are within the jurisdiction of the
magistrates courts. In these matters no particular circumstances were placed before me to
warrant that any of them should have been instituted in the High Court. This, after it had been
stated in November 2013 to litigants that this court may not grant any cost orders in such
matters.
[29]

In these circumstances and for these reasons, I have in the exercise of my discretion

declined to award the plaintiffs their costs in these matters.


[30]

The order I thus make is that:

The plaintiffs in these matters are not awarded costs.

______________
SMUTS, J
Judge

19 Previously under the erstwhile Rule 45.


20 In Bank Windhoek v Kusch 2003 NR 67 (HC).
21 At p68.

11
APPEARANCES
PLAINTIFF:

B. de Jager
Instructed by Behrens & Pfeifer.