A Ghost in a Legal Dispute

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By Hendrik Christiaans Khoisan Social Political Movement In a matter brought by Hewat and Erica Beukes on January 24 and 25, 2006 against the South West Africa Building Society, the First National Bank, the Registrar of Deeds, the deputy sheriff, and two speculants, the High Court heard that the South West Africa Building Society was a non-entity, which had ceased to exist in 1994. The matter arose out of a sale in execution of the Beukes couple’s home on March 24, 2005, which the couple maintain was sold unlawfully. The respondents ironically raised the point in their opposing papers that the Beukes couple had cited a non-entity. Mr Hewat Beukes and Mrs Erica Beukes then raised the point in limine, that if by own disclosure the South West Africa Building Society is a non-entity (and not a corporate body capable of suing or being sued), then they had unlawfully sold the property. The sale was therefore in any event void ab initio or unlawful from the outset. He further pointed out that the deputy sheriff had been instructed by a non-entity to sell the property and the speculants had bought the property from a non-entity. Mr Beukes pointed out to the court that it was in a serious dilemma as the court had issued a default judgement in favour of the non-entity on November 26, 2001 and the non-entity sold the property on March 24, 2005 and obtained an order of costs in the High Court in an urgent application brought by the Beukes couple against the sale on April 08, 2005. He posed the question that should the court rule in his favour, who would pay him, or should the court rule in favour of the respondents who should he pay. The Building Society and Others represented by Adv. Viviers and Adv. Corbett argue that the SWABOU Investments (Pty), which had changed its name from SWABOU Bank Ltd in January 2004, was the successor of South West Africa Building Society and for this reason applicants had to ascertain which body had to be cited as respondent. Mr Beukes rejected the argument as an absurdity as the Building Society had sold the property and not SWABOU Investments. He argued that even it were true that the SWABOU Investments was the true successor, it could not be cited as the defunct South West Africa Building Society which was making business outside the law, had obtained judgements and sold the house. In law one could therefore only cite it and not something or somebody else. Respondents then argued that the Beukes couple had introduced an entirely new cause of action, namely that the sale was null and void for the reason that a non-entity had sold the property. Beukes maintains that it is clear that the real issue in this case – notwithstanding the respondents’ best endeavours to fudge it – is not whether the applicants introduced new grounds for the relief. It is rather whether South West Africa Building Society is a corporate body capable of suing and being sued. He says it did not matter at what stage the court became aware of the non-existence of the first respondent, the court simply could not legalise a sale conducted by a spectre. The background to the issue was submitted as follows by the respondents: ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚· South West Africa Building Society was registered in terms of the Building Society Act, 1986. ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚· In 1994 the name change to Swabou Bank Ltd and transferred South West Africa Building Society assets and liabilities to Swabou Bank Ltd. ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚· The South West Africa Building Society was then dissolved and its registration cancelled by the Registrar in terms of the Act. It ceased to exist. ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚· In 2004 in a further change of names and conversion, Swabou Bank Ltd become Swabou Investments (Pty) Ltd. ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚· South West Africa Building Society sold the house on March 24, 2005. ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚· South West Africa Building Society ceded and transferred the property of the applicants to third parties. The short summary set out puts the nub of the point in limine in sharp focus. What is more, that this point in limine has become a concern to the country at large, and has been readily conceded by the legal representative of first, second and fourth respondent in their heads of arguments. For example, Adv. Viviers responded as follows inter alia and quoted provisions of the Building Society Act, 1986: “The issue pertaining to the legal entity which obtained the judgement and the entity which enforced the judgement: (….) South West Africa Building Society transferred all its assets and liabilities to Swabou Bank Ltd, who is the successor of the rights, title and interest of the South West Africa Building Society, in terms of Section 52 (A)(9)(b) of the Building Societies Act 2 of 1986 (“the Act”), which reads as follows: “(9) Upon registration by the registrar of the appropriate notice referred to in subsection (7)- (a)… (b) In the case of a transferred of assets and liabilities of a society to another society or to a bank- (i) Where all the assets and liabilities of the society are transferred, that society shall be deemed to be dissolved and its registration shall be cancelled by the registrar;” (our underlining) It is therefore common cause between the applicants and the legal representatives (Adv. Viviers) that South West Africa Building Society has been dissolved and its registration cancelled as a building society already in 1994, and therefore no longer a legal person. It was on this very basis that Mr Beukes argued that the South West Africa Building Society could never have obtained a default judgement and its registration cancelled already in 1994. Beukes expressed his surprise that these respondents should now put up an impassioned defence of the very default judgement while she has conceded to be obtained by a non-entity. Mr Beukes also raised constitutional provisions, particularly Article 1(1) of the Namibian constitution which provides as follows: “The Republic of Namibia is hereby established as a sovereign, secular, democratic and unitary state founded upon the principles of democracy, the rule of law and justice for all.” Beukes argued that Adv. Viviers and Adv. Corbet admitted the principles of the rule of law as well as Namibia’s sovereignty but referred the Court to the provisions of the Companies Act, 1973 and tried by all means to fudge the real issue in dispute. He argued that in all their fudging, the legal representatives missed (whether by accident or by design) one crucial point and it is that Namibia is established as a sovereign state founded on the principle of the rule of law. A very serious issue which emerges from this case is that the Companies Act, 1973 is no more applicable in the Republic of Namibia, it was repealed in whole and quoting from this South African act in our Courts to substantiate their heads of argument is tantamount to interference with Namibia’s sovereignty and violates the principle upon which Namibia is established the rule of law – in that a building society which has dissolved and its registration has been cancelled in terms of the applicable law of Namibia is still kicking by obtaining default judgements and selling people’s houses, as well as transferring such houses to third parties. As already mentioned in this article, South West Africa Building Society converted into SWABOU Bank Ltd whereby the Building Societies Act, 1986, unambiguously prescribes that at completion of such conversion, “… that society shall be deemed to be dissolved and its registration shall be cancelled …” At the completion of the conversion only Swabou Bank Ltd existed, and it obviously become subject to the Banking Institutions Act, which in terms of Section 69 (1) and (2) “Application of other laws to banking Institutions” (1) A company registered as a banking Institution or as a controlling company shall continue to be a company in terms of the Companies Act, and that Act shall, subject to subsection (2) continue to apply to any such company to the extent to which that Act is not inconsistent with this Act. (2) Notwithstanding subsection (1)- (a) The provisions of the Companies Act relating to the conversion of public companies into other forms of companies shall not apply to a company referred in that subsection; …” It is furthermore clear that the Section 52 (A) (9)(b) of the Building Societies Act is peremptory where it provides that society shall be deemed to be dissolved and its registration shall be cancelled. The same is true in regard to the provision in Section 69 (1) and (2) of the Banking Institutions Act shall not apply to Swabou Bank Ltd. The precarious situation of these applicants is exacerbated by the legal representatives – they admitted that South West Africa Building Society no longer existed since 1994, but masquerading that the default judgement obtained in 2001, they sold off the house and transferred the house to a third party in 2005 lawful. Beukes repeatedly expressed his perplexity over how a non-legal entity managed to obtain a judgement, sell and transfer property. There is nothing in any Namibian law that permits South West Africa Building Society, which dissolved and whose registration was cancelled in 1994, to obtain default judgement in 2001 and to sell and transfer the property in 2005. What is more, neither South West Africa Building Society nor Swabou Bank Ltd nor Swabou Investments can operate outside the parameters of the applicable laws of Namibia – the Building Societies Act, the Banking Institutions Act, etc. … It seems clear that this matter is set to determine the scope of financial and legal operations and the status of financial institutions in relation to their unquestionable supremacy in the colonial and apartheid era.