REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK

JUDGMENT

Case no: HC-MD-CIV-MOT-GEN-2016/00342

In the matter between:

NEW ERA INVESTMENT (PTY) LTD APPLICANT

And

FERUSA CAPITAL FINANCING PARTNERS CC 1ST RESPONDENT

DESERT PAVING 2ND RESPONDENT

HOWARD & CHAMBERLAIN ARCHITECTS 3RD RESPONDENT

HENDRIK HERSELMAN QUANTITY SURVEYORS 4TH RESPONDENT

IMPACT PROPERTY MANAGEMENT & SERVICES 5TH RESPONDENT

Neutral citation: New Era Investment (PTY) LTD v Ferusa Capital Financing Partners cc & 4 Others (HC-MD-CIV-MOT-GEN-2016/00342) [2016] NAHCMD 380 (02 December 2016)

Coram: E ANGULA AJ

REPORTABLE

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Heard: 10 November 2016

Delivered: 02 December 2016

Flynote: Mandament van spolie — Effective possession and control —

Suspension of building construction works — The applicant as contractor

engaged to build low cost housing placing security guards on site for the safety of

the property during suspension of works — Lack of evidence as to the nature and

extent of the applicant’s possession of property — Court holding that due to

scantiness of direct evidence that there was sufficient exercise of physical control

by the applicant of the property, there was no effectual possession — The

applicant must show that it exercised effective control over the property. —

Spoliation order refused.

Applications — Spoliation orders — Builder’s Liens — A lien is dependent on

possession — There must be physical control or occupation (detentio) and the

intention of holding and exercising possession (animus possidendi) —

Possession in order to exercise a builders lien is not sufficient — There must be

an intention to exercise a builders lien over the property — The intention must be

continuous and actual or effectual possession is a requisite.

Builder’s lien — Security — Builder’s lien is security for work done—contractual

lien limited to the terms of the contract — In a building contractual relationship a

party may exert a lien over the property for damages or losses arising due to the

suspension of works— A builder’s lien may be exercised over the building or

structures which the applicant has actually constructed.

Builder’s lien — Possession of entire property — The applicant claiming a

builder’s lien over the entire property— Court finding that from the papers it was

not clear which portion of the property applicant had occupied or exercised

control to the exclusion of the respondent— The applicant bears the onus to

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prove on balance of probabilities that it was in possession of the entire property

— Court holding that the applicant did not discharged the onus.

Dispute resolution mechanism — Interdict pending the institution of proceeding

for specific performance — The dispute should be resolved as provided for in the

contract — Court cannot entertain the Interdict as the dispute has as yet not

been declared as provided for in the dispute resolution mechanism in terms of

the contract — The parties are required to exhaust such dispute resolution

mechanism before approaching court for an interdict.

Summary: The applicant and the respondent entered into a building

contract in terms of which the applicant was contracted to construct low cost

houses on the property in Swakopmund presumably belonging to the NHE or

Government. The applicant alleged that it had possession of the property to

construct the houses and in fact commenced construction when the first

respondent, due to cash flow problems was unable to meet its financial obligations

towards the applicant. As a result thereof, the works were suspended initially by

the applicant, and subsequently on instruction of NHE. During the period of

suspension applicant secured the property by guarding the premises. The

respondent paid the applicant some of the money owing to the Plaintiff but a

balance remained unpaid. The parties could not agree on the amount due to the

applicant. After the negotiation failed, the respondent contracted the second

respondent to complete the construction on the property. The applicant claimed

that it was exercising its builder’s lien over the property when it was spoliated from

the property by the first and second respondent who commenced construction on

the houses partially constructed by the applicant. This amongst others, prompted

the applicant to bring this application.

The application is opposed by the first respondent who is the contract holder with

the National Housing Enterprise (NHE) to construct low cost houses in

Swakopmund. Second respondent is a company contracted by first respondent to

complete the construction works on the said property. First and second respondent

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are alleged spoliators of the property from applicant.

The applicant seeks two separate but distinct reliefs in respect of the property. In

the first respect, applicant is seeking a spoliation order, and in the second respect,

an order interdicting the respondents from commencing or continuing with any

building construction works on the property.

Held that in order for the applicant to succeed in its application for mandament van

spolie it must adduce evidence that there was sufficient exercise of physical control

by the applicant on the property to constitute actual or effectual control. Held further

that when the property is too wide, the applicant is required to demonstrate how it

exercised control over the property.

Held that the applicant, on the conspectus of the common cause and the

undisputed facts, did not establish it was in possession of the site by having its

employees on the property. The employees were on site to guard the premises

for the primary purpose to secure the safety of the site from outside threats.

Held further that the applicant did not have exclusive possession of the property

as the respondent occupied a part of the property to complete the constructions

of the mass housing project

Held a builders’ lien is applicable over the buildings or structures which the

applicant has built and not over the entire property. The onus is upon the

applicant to prove that its lien extends over the entire property.

Held further that the applicant lost possession of the property already in October

2016, before the alleged spoliation took place.

Held further that clause 26 of the contract provides for adjudication and

arbitration of the dispute and that the applicant ought to engage the dispute

resolution mechanism first before approaching the court for an interdict under the

circumstances of this case.

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ORDER

1. The applicant’s application is dismissed with costs.

JUDGMENT

E ANGULA, AJ

The applicant instituted mandament van spolie on an urgent basis, asking for

restoration of the property dispossessed by the respondent. The applicant also

sought an urgent interdict against the respondent for continuing or commencing

with the constructions on the property. The Court dismissed the application with

costs, with reasons to follow. These are the reasons.

Introduction

[1] The applicant approached the court on an urgent basis seeking an order

in the following terms:

‘1. That applicant’s non-compliance with the forms and service provided for

by the rules of this Honourable Court is condoned and that the matter is

heard as one of urgency as contemplated by Rule 73(3) of the Rules.

2. That first and second respondent immediately and forthwith restore

possession for the property fully described as Blocks 9C, 10A and 10B,

Swakopmund Mass Housing Project, Swakopmund, Namibia, (the

“property”) to applicant.

3. That an interim interdict be issued calling upon the respondents to show

cause, if any, on a date determined by this court, why the following Order

should not be made final:

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4. That first and second respondent be interdicted from commencing or

continuing with any building construction work on the property pending

the outcome of an action or arbitration to be instituted by application

against first respondent for specific performance of the building contracts

entered into between applicant and first respondent in respect of the

property.’

[2] The application is opposed by the first respondent who was awarded a

contract by the National Housing Enterprise (NHE) to construct low cost houses

in Swakopmund. NHE is a state owned company enacted to primarily provide

housing solutions in order to alleviate the national housing needs to lower and

middle income nationals. Second respondent is a company contracted by first

respondent to complete the construction works on the property. First and second

respondent are the alleged spoliators of the property from applicant. Second

respondent did not oppose the relief sought by the applicant. I would simply refer

to the first respondent as the ‘respondent’ in this judgment.

[3] The applicant is seeking an order for the restoration of the ‘property’

described as Block 9C, 10A and 10B, Swakopmund Mass Housing Project,

Swakopmund. The applicant seeks two separate but distinct reliefs in respect of

the property. In the first relief the applicant seeks a spoliation order and in the

second relief, an order interdicting the respondents from commencing or

continuing with any building construction works on the property.

Background:

[4] On 22 August 2014, the applicant, a construction company, and the

respondent entered into a written building contract in terms of which the applicant

was contracted to build the low costs houses on behalf of the respondent for a

combined value of N$78 011 633.70. During August 2014, the applicant took

possession of Block 10B. In February 2015, the applicant took possession of

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Block 9C and in April 2015 of Block 10A. The applicant commenced

constructions of the houses on the property.

[5] From the papers it is unclear where on the property the applicant

commenced construction of the houses. It is also not clear if constructions took

place on all three blocks and to what extent.

[6] As at 31 March 2015, respondent owed N$7 560 145.20 to the applicant

for work done in terms of the contract. NHE, being the underlying employer of

the respondent, experienced shortage of funds resulting in the respondent not to

meet its financial obligations.

[7] On 16 April 2015, applicant suspended all works due to non-payment of its

accounts. In the letter suspending the works applicant states as follows:

‘The work team of Swakopmund housing project has been disbanded, but we still

keep a small construction group on site to complete all the possible work by

making use of the materials stocked on site. This will prevent further loss for

client and main contractor.

The safety for site is another issue for concern. Therefore we have arranged 5

safety guards on site to protect the materials and buildings. In the meantime,

any further action will be taken to protect the site whenever it is necessary’.

[8] On 10 June 2015, NHE instructed the respondent to suspend all works

with immediate effect. The Principal Agent communicated the suspension of the

works to the applicant in a letter as follows:

‘Our client, Ferusa Capital Partners, have been instructed by NHE to suspend

the works on the above project with immediate effect. This is an instruction that

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originates directly from the Minister. As a result of this, you are hereby formally

instructed to suspend the works on your Blocks.

1 Based on clause 23 of the AGREEMENT AND SCHEDULE OF

CONDITIONS OF THE BUILDING CONTRACT:

1.1 Clause 23.1- The contractor shall with all reasonable dispatch remove

from the site all his goods, machinery and plant and give facility to his

subcontractors so also to do so;

1.2 Clause 23.2 - The contractor shall be paid by the Employer:

1.3 Clause 23.2.1 – The value of the Work commenced and executed but not

completed at the date of such determination as aforesaid, subject to Clause

10;

1.4 Clause 23.2.2 – The value of the Work commenced and executed but not

completed at the date of such determination, the value being ascertained

mutatis mutandis in accordance with the provisions of clause 10;

1.5 Clause 23.2.3 – The costs of materials and goods properly ordered and

delivered for the Works actually paid for by the Contractor, or of which he is

legally bound to accept delivery and on such costs being paid by the Employer

the same shall become his sold property;

1.6 Clause 23.2.4 – The reasonable costs of removal under clause 23.1;

1.7 Clause 23.3.4 – Any loss or damage caused to the Contractor owing to

such a determination as aforesaid;

Provided that, in addition to all other remedies, the contractor upon the said

determination, may take possession of and shall have a lien upon all unfixed

materials and/or goods intended for the Works, which may have become the

property of the employer under this contract, until payment of all monies due to

the contractor from the employer.’(My emphasis)

2 In addition to the above, we require that the following information be

issued:

2.1 Valuation

2.1.1 A valuation for Works executed up to and including today’s date.

2.2 Test Results

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In order for payments to be affected (sic), the following test results must be

submitted to Impact Project Management …

We would like to take this opportunity to thank you for the manner in which your

Company has dealt with this rather unfortunate situation.’

[9] On 8 September 2015, the Principal Agent requested the applicant to

provide a schedule of materials stored off site in order to ensure payment to the

applicant. In response thereto, the applicant indicated that all materials were

stored at its several sites and warehouses in Walvis Bay and Windhoek. These

materials were ceded to the respondent who became the owner thereof.

[10] In applicant’s letter dated 8 September 2015 addressed to the principal

agent, therein contained the following extract which is of relevance:

‘As for the insurances, we can only provide the insurances for the three sites.

Imaging that the projects were not suspended and the construction team were on

site, all the materials were supposed to be delivered on site, and could be

covered by those insurances. The Building Contract can works as normal under

the natural and regular situation. But at this stage, Client cannot pay Main

Contractor for such a long time, and the construction is suspended by client,

therefore materials cannot and will not be delivered to site for safety

consideration. Main Contractor shall not bear the extra cost under this special

situation.’ (My emphasis)

[11] On 28 September 2015, applicant confirmed the suspension of the works

and informed the agent that it has arranged for 2 Chinese foremen, plus 7

security guards to be on site for security reasons. Applicant therein conceded that

the ‘site field’ was too large to secure.

[12] It is common cause between the parties that the security arrangement was

too expensive for the respondent to maintain. The respondent was particularly

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concerned about the costs of the 2 Chinese foremen. Eventually, the parties

agreed to pay for only one Chinese foreman to secure the site during the period

of suspension. The applicant maintained that security costs are claimable under

‘site security’ listed under preliminary and generals (P&Gs) in the contract.

[13] In terms of clause 12 of the contract, any unfixed materials and goods, the

value of which has been included in a certificate for payment, shall upon payment

thereof become the Employer’s property. It is a further term of the contract that

the applicant shall protect such materials and goods against damage.

[14] It is noteworthy that in an email addressed by the applicant’s manager,

dated 29 September 2015, the following appears:

‘The ownership of materials already belongs to Client after the signing of cession

of rights. We suggest & claim 7 security guards and 2 Chinese is just hope to

protect the whole suspended area/houses/materials (10A 10B & 9C) for our

Client (My emphasis).

We have two proposals if Client cannot pay high cost on Security:

1. Withdraw two security guards on site; but the security risk will be much

higher than before and New Era cannot promise the safe of the whole big area.

2. If Client insist to not to pay the 25000N$/month for the Chinese, we can

withdraw the Chinese from site, but Client must take the risk of secure on site

and bear the loss if any accident happened after that. As we all know, most of

the stealing cases on Construction sites are premeditated by Security Guards.

No matter which proposal Client choose, The two Chinese must be paid as per

the Claim dated on June 30th. (June 10th to August 20th: 2 Chinese: August 21st

to now: 1 Chinese).

As you can see from our Security Claim, we haven’t take any profit on the

security, those are just cost prices. What we always considering is the safety of

the suspended site!’ (My emphasis)

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[15] On 7 March 2016, applicant maintained that as a direct result of the

suspension of works it has complied with its obligations to secure and protect the

works. The applicant also ensured that materials were kept off site for security

reasons in order to avoid same being stolen.

[16] By September 2016, the parties were in disagreement about amount owed

to applicant. It is common cause that by this time a substantial amount was

already paid to the applicant, whilst the remaining balance is disputed. The

remaining balance was to be determined by the Principal Agent. The Principal

Agent determined the amount due to the applicant at N$6 554 829.61. The

applicant however did not agree with the determined amount and asserted that it

was entitled to N$13 114 217.51. It is common cause that the parties agreed to

renegotiate and conclude new agreements in respect of each block after the

NHE terminated the underlying contract.

[17] On 26 September 2016, the respondent notified the applicant that it

terminates the negotiations in respect of the new construction agreements for

completing the works on blocks 10A,10B and 9C. The next day, the applicant

threatened to employ clause 26 of the contract which provides for dispute

resolution mechanism. Furthermore, no agreement could be reached between

the parties on the amount due to the applicant.

[18] After NHE cancelled its agreement with the respondent, a new agreement

was concluded between the respondent and the Government of the Republic of

Namibia (‘the Government’). The agreement gave the respondent a new

mandate to complete the mass housing project. On this basis, the respondent

contended that the cancellation of its agreement with NHE automatically

terminates its agreement with the applicant. This was in fact communicated to

applicant on 7 October 2016.

[19] On 10 October 2016, the applicant asserted for the first time that it was in

possession of the site and is entitled to exercise its lien until such time when ‘all

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monies’ due is paid. The applicant thereupon demanded to know from the

respondent whether it was responsible for the removal of approximately 500

bricks from the site. The respondent disputed that the applicant was exercising a

lien and in turn accused the applicant of attempting to obstruct construction of the

works which began two weeks earlier.

[20] On 24 October 2016, the respondent accused the applicant of disrupting

and causing work stoppage at the respondent’s site. The site is referred to as

block 9C and 10A. The applicant could not respond to the aforesaid allegations

which it considered as vague and unspecified. The applicant reiterated that it

was exercising its builder’s lien on the sites because its employees were

permanently staying on the site, in addition to the security guards employed to

safeguard the site.

[21] On 2nd November 2016, applicant instructed its legal practitioner to bring

an urgent court interdict against the respondents.

[22] The applicant averred that ‘shortly thereafter’ it erected 40 site boards as

depicted in the photographs’. It is unclear what is meant by ‘shortly thereafter’

however it apparent that the applicant was replying to the respondent’s legal

practitioner’s letter dated 14th of October 2016.

[23] The applicant alleged that on 1 November 2016, 13 people allegedly from

second respondent came to the site and removed all 40 sign boards and left

them lying in a pile. The boards were re-erected and the site was enclosed with

chevron security tape. On 4 November 2016, it is alleged that the second

respondent’s employees removed the chevron security tape. On unspecified

date the applicant alleges that the employees of the second respondent started

working on the site. On the same day, a letter addressed to the second

respondent, from which the following is extracted:

‘It is our instructions that you have entered (ostensibly on the instructions of

Ferusa Capital) a portion of portions of the sites where our client is exercising a

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builder’s lien, to wit blocks 10A, 10B and 9C, Swakopmund mass housing project

on the 01st of November 2016 in order to commence with construction work. (My

Emphasis)

We record that you have also made an illegal water connection to our client’s

water installations and will hold you liable for any damages suffered and payment

for the water so used as well as for the signs / notices erected around the sites

indicating that our client is exercising its builder’s lien which you removed and / or

attempted to remove.’

[24] The applicant’s legal practitioner thereupon, addressed a letter to the

respondent’s legal practitioner demanding the second respondent not enter or

remain on the site, whereupon the applicant was exercising its builder’s lien.

[25] The application was brought on the 7 th of November 2016 and heard on

the 10th of November 2016.

Submissions on behalf of the applicant

[26] Mr Heathcote representing the applicant submitted that the applicant had

a contractual lien over the site. This lien was exercised by the applicant’s

employees on site and the applicant was in possession of the site since 2014.

Since the respondent admitted owing the applicant an amount of N$6 554

829.61, the law confers on the applicant as security for payment by the employer,

a lien (a right of retention). In terms of the contract between the parties, the lien

extends to all unfixed materials and goods which have become the property of

the employer.1

[27] Mr Heathcote quoted an extract from Quail on the building contract,2 which

read as follows:

1 Quail on the building contract, second edition, revised and enlarged by Eyvind Finsen, at 133.2 Quail supra at 187.

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‘As was pointed out in the discussion of clause 25, the contractor has a lien on the

site of the contract works until he has been paid in full. Such lien, or right of retention, is

automatic and does not require prior agreement… (My emphasis)

[28] Although clause 23 of the contract provides, as security for payment by

the employer, a lien on all unfixed materials and goods which have become the

property of the employer, the employer is also required to compensate the

contractor for any loss or damage which he has suffered because of giving notice

of determination. The claim for compensation can arise outside the provision of

clause 23. A lien for contract works is available in terms of clause 25 and it is in

addition to the contractual lien provided for in clause 23 of the agreement. A

claim for compensation may include a debt or damages arising as a result of

suspension of the work

[29] Mr Heathcote further submitted that in view of the provisions of clause 23

and 25 of the building contract, the applicant was entitled to a lien in terms of

clause 23 and to such other remedies as may be available for compensation for

damages caused as a result of the suspension and subsequent termination of

the contract, as provided for in clause 25. In this respect, the applicant’s claim for

specific performance is well established. The applicant has made out a case for

an interim interdict in protection of its claim for specific performance. Mr

Heathcote referred this court to various authorities dealing with the requirements

of an interdict.

[30] It was argued on behalf of the applicant that the facts show that the

applicant was in peaceful and undisturbed possession of the property and that

the respondent had unlawfully deprived the applicant of its peaceful and

undisturbed possession of the property. ‘The happening of the events leading to

the bringing of this application’ threatened the applicant’s possession can be

summarised as follows:

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1. On 1 November 2016 the employees of second defendant removed all 40 lien

sign boards belonging to applicant and left them lying in a pile, which were re-

erected immediately after they left by Mr Huang Ding Wei (site foreman);

2. On 1 November 2016 the employees of second respondent started with

construction works at the site possessed and on the houses built by applicant; and

3. On 2 November 2016 Mr Uys (second respondent) informed Mr Albert Nicanor

(applicant) that he would cease the construction works but would re-commence

therewith on Monday 7 November 2016.

[31] In respect of non-joinder of the government and NHE, Mr Heathcote

submitted these parties do not have direct interests in the issues for

determination before court. A spoliation remedy can be brought against a

spoliator and as such, the government and NHE do not have an interest in the

outcome of the proceedings. In any event, so it was argued, the government and

NHE may be served with the application and be joined as parties after the rule

nisi was issued.

[32] In respect of urgency, Mr Heathcote submitted that a mandament van

spolie is regarded as an urgent remedy. In this case, it was brought as soon as

possible given the fact that spoliation took place on 1 November 2016. The court

has a discretion which must be exercised judiciously and each case must be

determined on its own facts. The applicant acted expeditiously and it cannot be

said that the applicant was in ‘culpable remissness’ as contended by the

respondent.

Submission on behalf of respondent

[33] It was argued on behalf of the respondent that the contract entered

between it and the government requires of it to comply with its obligations. The

applicant did not have ‘exclusive possession’ of the site. Furthermore, the

applicant did not have a builder’s lien over site except the contractual lien

provided for in the contract between the parties which is restricted to the

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provisions of clause 23 of the contract. The contractual liens provided for in

clause 23, is for the applicant ‘to take possession of and shall have a lien upon

all unfixed materials and/or goods intended for the works.’ On this basis, the

respondent cannot be deprived of its access and possession on the basis of the

applicant’s builder’s lien.

[34] Mr Muhongo representing the respondent submitted that the applicant did

not provide sufficient details as to what is included in the alleged builder’s lien.

He submitted that if the applicant has a builder’s lien, it does not extend to the

entire site. Mr Muhongo made an observation from the google maps of the site

provided by applicant, that constructions works are noticeable on block 10B, and

to a limited extent, on block 9C. He noted that no construction works took place

on block 10A.

[35] Mr Muhongo argued that the photographs in the founding affidavit should

be rejected as evidence because the identity of the photographer is unknown and

no confirmatory affidavit of the photographer is attached to the papers.

[36] It was further argued on behalf of the respondent, that applicant was not in

peaceful and undisturbed possession of the property because of the alleged theft

that took place on site. On the version of the applicant, on 7 October 2016,

possession of the site was disturbed based on the alleged theft of bricks and of

the illegal water and electricity connections. This is aggravated by the fact that

the applicant does not know who stole the bricks or made the unlawful water and

electricity connections. As a result of the aforesaid, so it was argued, the

applicant’s possession was not peaceful nor was it undisturbed.

[37] In terms of the agreement between the respondent and the Government

there are more pressing public interest issues that should take precedent over

the applicant’s alleged interdict. As a result, the balance of convenience does

not favour the granting of an interdict in favour of the applicant who can be

afforded substantial redress in due course. The commercial interest of the

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applicant should not outweigh the public interests for housing. In any event, it

was contended that the application was not urgent as the applicant created the

urgency through its own remissness.

[38] Mr Muhongo argued that the non-joinder of the Government and NHE who

have direct and substantial interests in outcome of the case involving the mass

housing project is fatal to the applicant’s case. The Government had contracted

the respondents to complete the construction of the mass housing project, and

as such, the respondent is enjoined in the obligations of the Government to

provide housing

The issues on spoliation

[39] The issues to be decided are:

a) Whether applicant had, enjoyed undisturbed and peaceful

possession since 2014 by having the applicant’s employees on

site?

b) Whether applicant enjoys a builder’s lien over the property and

whether such lien extends to the entire property, and if so, what is

the content and extent of applicant’s builder’s lien in view of the

provision of clause 23 of the building contract?

c) Whether or not the respondent have interfered or disturbed the

applicant’s right to the builder’s lien.

The issues on interdict

[40] The issues to be decided are:

d) Whether the applicant is entitled to claim specific performance as a

remedy in view of the provision of clause 26 of the contract.

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e) Whether the balance of convenience favour the granting of an

interdict in favour of the applicant and whether the applicant cannot

be afforded substantial redress in due course.

Spoliation

[41] I now turn to the legal principles applicable to spoliation and builder’s lien.

To succeed in an application for mandament van spolie, the applicant must

establish on a balance of probabilities that:

“He or she was in peaceful and undisturbed possession of the thing; and

that he or she was unlawfully deprived of such possession3”.

[42] It is generally accepted that the underlying rationale of the remedy of

spoliation is that no person is allowed to take law into his or her own hands. An

act that amounts to the breach of peace in the community should as a result be

discouraged.4 ‘In order to entitled the contractor to a spoliation order, it was

necessary that he proves not only that he was the de jure possessor of the

building but that he was actually in de facto possession of the building at the

moment when he was despoiled.’5

[43] Applicant further seeks a mandament van spolie based on the ‘unlawful

infringement of the applicant’s builder’s lien’ in that the respondent threatened

such lien by removing sign boards, chevron security tape, by commencing

construction on houses built by applicant. It is alleged that by making illegal

water and electricity connection to the property, the respondent has spoliated the

applicant of possession. It is the applicant’s case that it was dispossessed of the

property where it exercised a builder’s lien.

3 LAWSA vol. 27 at 78 par. 79; see also Bon Quelle (Edms) Bpk v Munisipaliteit van Otari 1989 (1) SA 508 (A); Telkom SA Ltd v Xsinet (Pty) Ltd 2003 (5) 309 (SCA).4 Nino Bonino v De Lange 1906 TS 120 at 122, Kuiiri and Another v Kandjoze and Others 2009 (2) NR 447 (SC).5 Ocean 102 Investment CC v Strauss Group Construction CC & Another (A) 119/2016)[2016] NAHCMD 274 (19 September 2016) at 12.

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[44] A builder’s lien is a right of retention over the building or structure which a

builder has constructed to secure payment of the contract price.6 The applicant

exercised control over the property which is subject to a lien. A spoliation

remedy does not protect a lien, but it protects a person’s control over a thing, in

other words, the possession. A spoliation remedy therefore protects a factual

situation. Accepting that a lien is an interest protected by law, if control of the

property is removed from a lienholder against her will, she can institute the

spoliation remedy to restore such control. It is for this reason that a lien never

constitutes a cause of action but that it is a defense against the owner’s re

vindicatio or enrichment claim in case the dispossession is done by a non-

owner.7

[45] If a person (a lienholder) affected the necessary or useful improvement to

another person’s (the debtor) property by agreement, the lienholder can defend

his possession when the debtor sues him for the return of the thing before being

compensated for his work done thereupon. He can defend his possession

against his contractual counterpart on the basis of his debtor and creditor lien or

against the owner who is not a contracting party on the basis of his enrichment

lien8.

[46] The builder’s lien entitles applicant to retain the property for buildings for

which the payment is still outstanding9. The onus is on the applicant to prove, on

a balance of probabilities that his lien extended to the entire premises10 made up

of Block 9C, 10A and 10B.

[47] I pause briefly, to state my dissatisfaction with the manner in which this

application was drafted. Letters and emails, which made up the bulk of the

6 LAWSA Vol. 15 par. 70.7 M Wiese, the legal nature of a lien in South African law, 2014 vol 17 no 6 at 2541 to 2542.8 M Wiese, supr.9 Fynbosland 435 CC v Torro Ya Africa (Pty) Ltd and 2 Others (1861/2011) [2011] ZANWHC 68 (15 December 2011).10 Fynbosland supra at 12.

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application, were attached and quoted in the body of the founding affidavit, while

containing mostly irrelevant facts. Photographs were inserted in the body of the

affidavit without providing sufficient details. The application, which essentially

ought to be short and simple, became instead lengthy and complicated. This has

caused severe prejudice to the court as a lot of time was spent deciphering

irrelevant facts in the founding affidavit and attachments (which at times are

duplicated). Urgent applications should be drafted in precise and accurate terms,

with reference to relevant facts to enable a court to provide its judgment

expeditiously.

Whether applicant had, enjoyed undisturbed and peaceful possession since 2014

by having the applicant’s employees on site?

[48] In applying the well-known rule in the Plascon-Evans Paint vs Van

Riebeeck (Pty) Limited11, I shall base my decision on facts that are common

cause or otherwise on the respondent’s version.

[49] In demonstrating its possession applicant attaches numerous

photographs. No confirmatory affidavit of the photographer is attached to the

papers. To make matters worse, the photographs do not make out what is

alleged by the applicant. In one of the photographs, a person is indicated as ‘a

security guard on site’, but if one glanced at the photograph in question, it simply

depicts a person standing on an empty site. The name of the security guard is

neither given nor is the exact location provided.

[50] If a deponent intends to rely on the truth of the contents of a document,

the facts relied upon must be proved by direct evidence. This requires the

affidavit by the author of the documents to state how she or he knows the

11 1984 (3) SA 623 (A) at 634I-635D.

21

contents as true12. The photographs are disputed by the respondent for reasons

that there is no confirmatory affidavit annexed to the founding affidavit and the

photographer is unknown. I am of the view that the photographer is required to

clarifiy that the content of the photographs are true and correct, failing which, the

photographs cannot be relied upon to prove their content. If their content is not

proved, then there are no photographs to consider.

[51] It is common cause that during August 2014, applicant took possession of

block 10B, in February 2015 of block 9C and in April 2015 of block 10A

respectively. On applicant’s own version, the applicant suspended all works on

the project on 16 April 2015. The works were further suspended on instructions

of NHE in June 2015. This court can safely assume that no constructions work

has commenced on block 10A. Furthermore, it is apparent that applicant was in

possession of block 9C for less than 2 months before it suspended all works on

the project. The above position is confirmed by google maps depicting the

property.

[52] Of importance is the fact that the applicant could not have been is

possession of the property since 2014 as argued. It is obvious that the applicant

was in possession of portion or blocks of the property at different times within the

construction phase. In this regards, it is essential that the applicant’s possession

of the property as alleged be considered.

[53] The court accepts that the property as alleged is made up of three blocks.

No evidence was presented to this court as to the number of house constructed

or not constructed on each block. What building or structures, if any, were

erected on each block? The size and area of the property or each block is

unknown. The court is not enlightened about the extent to which the materials

and goods are either on or off site. 12Cultura 2000 and Another v Government of Republic of Namibia and other 1992 NR 110 HC at 129 para D. See also Ex Parte Minister van Justisie: In re S v Wagner 1965 (4) SA 507 (A).

22

[54] Moreover, it is not clear where on the property the security guards and

foreman were located, whether they were located on all or only some of the

blocks. Is the property easily accessible and where the entry point (s) (gate or

fence) to the property is located? Neither party informed this court who the owner

of the property is. It is thus accepted that the owners of the property is either

NHE or the government.

[55] The construction works on the property was suspended and the principal

agent of the respondent informed the applicant that the suspension shall be

subject to clause 23 of the contract. In terms of clause 23.1, the applicant

(contractor) was requested to remove all his goods, machinery and plant from

site. The court was not informed if this was in fact done. The applicant indicated

that all materials were stored off site at several of its sites and warehouses in

Walvis Bay and Windhoek for safety reasons. In other words, does it mean that

all materials were off site? In addition, all materials were ceded to the

respondent, who became the owner. The court accepts that all materials,

although owned by the respondent, are in the possession of the applicant as

highlighted herein.

[56] A possessor must prove actual possession and not a right to possess.13

‘The builder has the right from the owner to go on the land to erect the building.

He has that right for the purpose of continuously working at the building and

completing it, and for so long as he does so and goes on site for that purpose,

the work must be regarded as under his control. During his possession he cannot

prevent the owner from coming on to the work, but the owner cannot turn him off,

and the work itself is under his control’.14

13 Nufesha Investments CC v Namibia Rights and Responsibilities Inc and Others 2013 (3) NR 787 (HC).14Scholtz v Faifer 1910 TPD 243.

23

[57] In the Ocean 102 Investment CC case15 the court cited with approval the

principles set out in Scholtz v Faifer16:

‘But where work is suspended for a considerable time, then it seemed to me that

if the builder desire to preserve his possession he must take some special step,

such as placing a representative in charge of the work, or putting a hoarding

around it, or doing something to enforce his rights to its physical control’.

[58] It is common cause that the applicant took the step to exert physical

control only after spoliation allegedly took place. In view of the scantiness of the

particulars to sway the court in holding in favour of the applicant, this court is of

the view that there is no evidence that there was sufficient exercise of physical

control by the applicant of the three blocks (the property) to constitute effective

control of the property. The ‘site field’, according the applicant, was too wide to

exercise effective control.

[59] Furthermore, and it is noteworthy, that on applicant’s own version the site

security was provided by the applicant for the benefit of the respondent during

the suspension of the works. This much is apparent from applicant’s email to the

effect that the security guards and the Chinese foremen are intended to protect

the suspended area or houses or materials ‘for our Client’. Furthermore, the

respondent is responsible for payment of the costs of the foreman and the

security guards, as additional costs of ‘site security’ during the suspension of the

works.

[60] On 29 September 2015, the applicant informed the respondent’s principal

agent that if the respondent does not want to pay for site security, the following

shall happen:

15 Supra.16 Supra.

24

‘Withdraw two security guards on site; but the security risk will be much higher

than before and New Era cannot promise the safe of the whole big area. If Client

insist to not to pay the 25000N$/month for the Chinese, we can withdraw the

Chinese from site, but Client must take the risk of secure on site and bear the

loss if any accident happened after that. As we all know, most of the stealing

cases on Construction sites are premeditated by Security Guards’

[61] On the conspectus of the common cause and the undisputed facts, the

contention that the applicant was in possession of the site by having its

employees on site is not established. The employees were on site to guard the

premises for the primary purpose to secure the safety of the site from outside

threats. It is doubtful that the applicant would have been in possession of the site

for its interests given the fact that the applicant was in possession of the

materials belonging to the respondent in its several warehouses. The

possession alleged by the applicant would not have been to the exclusion of the

respondent, given what I have just elaborated hereinabove.

[62] The possession of the blocks was not given to the applicant at the same

time, and therefore constructions on the block would vary. Possession of the

blocks would equally vary. It is more likely that the security services were

provided on block 10B where houses are visible on the google map provided, as

opposed to block 10A and 9C. In the absence of clear and direct evidence, the

court cannot hold in favour of the applicant on this point.

[63] I agree with the arguments advanced on behalf of the respondent that the

applicant did not have ‘exclusive possession’ of the site. It possessed the site to

mitigate the risks of the respondent, and for the safety of the site. The putting up

of lien boards and chevron tapes happened, on the version of the applicant, after

construction by the respondent commenced. The respondent contended that it

was in possession of block 10A and 9C already in October 2016 when it

commenced constructions. ‘The applicant must prove peaceful and undisturbed

25

possession at time of deprivation of possession. The possession must be without

interference or interruption.’17 Based on common cause facts, the applicant

failed to show that it was in undisturbed and peaceful possession of the property.

Whether applicant enjoys a builder’s lien over the property and whether such lien

extends to the entire property, and if so, what is the content and extent of

applicant’s builder’s lien in view of the provision of clause 23 of the building

contract?

[64] It is common cause that the respondent admits that it owes the applicant

money. Although the amount owing is disputed, it is accepted that the principal

agent determined the amount to be N$6 554 829.61.

[65] The respondent contends that the applicant builder’s lien is limited to what

is provided in clause 23 of the contract. The applicant on the other hand,

contends that in addition to the lien provided for in clause 23, it is entitled to a lien

over the constructions works. The applicant can equally claim compensation for

damages arising out of the suspension. In this respect, the builder’s lien is wider

than the provisions of section 23.

[66] The applicant has a right of retention over all the unfixed materials and

goods to secure payment of the contract price in full. Such a right is derived from

the contract. However in respect of compensation for damages, I am in

agreement with Mr Heathcote that a lien for compensation for damages would fall

outside the provisions of clause 23 of the contract. In this respect, the applicant is

entitled to withhold the buildings or structures which it has constructed until it has

been paid.

17Kuiiri and Another v Kandjoze and Others 2007 (2) NR 749 (HC).

26

[67] Mr Muhongo conceded that the applicant has a lien over buildings or

structures which the applicant has built, but disputed that the applicant has made

out such a case. I agree with him. The applicant’s case is that its builder’s lien

applies to the site in general and as such, the applicant did not elaborate on the

works completed or partially completed. No direct evidence was presented on the

building works conducted on each block. The court does not know the

construction works constructed by the applicant, and nor the value of such works

which remained unpaid.

[68] Suffice to say that the content of the applicant’s builder’s lien was not

established on the likelihoods of facts presented in this case. I am of the view

that is necessary to determine the extent of the applicant’s builder’s lien.

‘the fact that he has built houses on a portion of Naledi Extension 25 premises,

does not necessarily extend his builder’s lien to the entire part of the premises

where the construction of the remainder of the housing units has not

commenced.’18

[69] It is common cause that the builder’s lien is security for the work done on

the property, and not for breach of the agreement by the respondent. The latter

relief cannot be addressed by an order for mandament van spolie. It is clear in

this case that the applicant assert its builder’s lien over the entire property, while

it is not clear from the papers which portion of the property the applicant

occupies, if at all. Based on the version of the respondent, it is in occupation of

the area (block 10 A and 9C), where the applicant did not construct houses or

few houses were constructed. This much is evident from the letter dated 14

October 2016 addressed to the applicant by the respondent’s legal practitioner.

[70] The applicant has the onus to prove on balance of probabilities that it was

in possession of the entire property (Block 10A, 10B and 9C). This, the applicant 18 Fynbosland case supra.

27

did not establish. The applicant established a lien in respect of clause 23 of the

contract. However all materials and goods are not in the possession of the

respondent but the applicant in its warehouses and sites around the country.

The applicant failed to show that it had a lien either over the entire premises or in

respect of any building works.

[71] In the applicant’s letter of demand for the restoration of the property, the

applicant asserted that the respondent has entered upon ‘a portion of portion’ of

the property occupied by the applicant. It further alleged that the portion is on

block 10A, 10B and 9C. Yet again, the applicant asserted that the entire property

was disposed from it.

Whether or not the respondent have interfered or disturbed the applicant’s right

to the builder’s lien.

[72] Based on the respondent’s version, the applicant was not in exclusive

possession of the site. On 8 June 2016, the applicant was made aware that the

respondent intends to bring on site a new contractor to complete the

construction. The reason why the aforesaid contractor was not instated is

because the local financier fell through.

[73] On 7 October 2016, the plaintiff was informed to ‘remain’ off the premises.

The theft of bricks took place already on 7 October 2016. The respondent does

not know who stole the 500 bricks. The illegal water and electricity connection

occurred on 14 October 2015. Furthermore, and on the same day, the applicant

was informed that construction on site 10A and 9C commenced two weeks

earlier and the respondent reported that the applicant was unlawfully obstructing

construction on site.

[74] On 24 October 2016, the applicants were warned that the applicant would

be charge for trespassing on the respondent’s property. The applicant was also

28

warned not to obstruct the works on the respondent’s site. Granted the size of

the property, it is likely that the respondent’s contactors’ presence on the

property at the beginning of October 2016 went unnoticed by the applicant. The

applicant however contends that the premises was spoliated on 1 November

2016 when second defendant’s employees removed 40 lien sign boards

belonging to the applicant and when the second respondent’s employees started

with constructions on houses built by the applicant. On the balance of

probabilities, if the applicant was in possession of block 10A and 9C, it lost

possession of the blocks already in October 2016 before the alleged spoliation

took place.

[75] In view of what I have already decided that the applicant’s builder’s lien is

limited to construction works actually done and the provisions of clause 23 of the

contract. It is inconceivable that the respondent could disturb the applicant’s

builder’s lien. The respondent took possession of block 10A and 9C for purpose

of completing the project. As stated previously, it most likely (based on the facts

as presented by the applicant, not denied by the respondent) that applicant was

not in possession of the entire property. It follow therefore that applicant’s

builder’s lien was not disturbed by the respondent.

[76] In any event, the applicant had to convince this court that its builder’s lien

was indeed disturbed as it alleged and this applicant failed to do.

Interdict

Whether the applicant is entitled to claim specific performance as a remedy in

view of the provision of clause 26 of the contract.

[77] The applicant seeks to interdict the respondent from commencing or

continuing with any building construction work on the property pending the

outcome of an action or arbitration to be instituted by applicant against first

respondent for specific performance of the building contracts entered into

29

between applicant and respondent in respect of the property. This relief is sought

independently from the spoliation claim dealt with above in this judgment.

[78] Specific performance is claimed as a remedy aimed to fulfil the envisaged

results at the conclusion of the contract.19 This remedy is granted at the

discretion of the court.

[79] Smuts J20 quoted and described specific performance as:

‘This right has been described as a cornerstone of our law relating to specific

performance. Once that is realised, it seems clear, both logically and as a matter

of principle, that any curtailment of the court's discretion inevitably entails an

erosion of the plaintiff's right to performance and that there can be no rule,

whether it be flexible or inflexible, as to the way in which the discretion is to be

exercised, which does not affect the plaintiff's right in some way or another.

……………

Practically speaking it follows that, apart from the rule just referred to, no rules

can be prescribed to regulate the exercise of the court's discretion. This does not

mean that the discretion is in all respects completely unfettered. It remains, after

all, a judicial discretion and from its very nature arises the requirement that it is

not to be exercised capriciously, nor upon a wrong principle. It is aimed at

preventing an injustice ……………….

Another principle is that the remedy of specific performance should always be

granted or withheld in accordance with legal and public policy.

Furthermore, the court will not decree specific performance where performance

has become impossible. Here a distinction must be drawn between the case

where impossibility extinguishes the obligation and the case where performance

is impossible but the debtor is still contractually bound. It is only the latter type of

case that is relevant in the present context, for in the former the creditor clearly

has no legal remedy at all.’

19 M A Fouche on Legal Principles of Contracts and Commercial law, 8th ed at 117.20 Ashipala v Nashilongo and Another 2011 (2) NR 740 (HC) at 748.

30

[80] In this case, the plaintiff alleged that it has fulfilled its obligation in terms of

the contract. On the other hand, the respondent failed to honour its obligation to

pay the applicant the amount due to it in terms of the contract and damages

arising out a breach.

[81] The fulfilment of the contract as envisaged is what is being enforced.

Consequently, it is a concomitant to the exceptio non adimpleti contractus which

admittedly applies to all contracts where the obligations of the parties are

reciprocal21. It would, of course, be inconsistent to claim cancellation and at the

same time enforcement, but I can see no objection to a claim in the alternative22.

[82] I accept that the applicant may enforce the contract and demand

performance from the respondent in terms of the contract. In this regard, the

applicant may enforce payment due to it. The applicant can demand that the

respondent continue to employ it as its main contractor on conditions that the

applicant tenders to perform its obligations in term of the contract. The applicant

has tender to perform in terms of its obligations as per contract.

[83] While I fully agree that the applicant can enforce the contract, I do not hold

a view that applicant can bring an action to this court without compliance with the

terms of the contract. The route opened to the applicant to enforce the contract is

the dispute resolution mechanism stipulated in the contract. As such, the

applicant is obliged to declare a dispute. In the absence of a declared dispute

this court cannot entertain the application for an interdict.

[84] In Scriven Bros v Rhodesian Hides and Produce Co Ltd and Others23, an

argument was presented that on cancellation of a contract, the contract lost all

efficacy and was of no further force and effect. Incidentally, the case dealt with

an arbitration clause and the attempt to circumvent the operation of dispute

resolution clause which gave rise to the following dictum:

21Scholtz v Thompson 1996 (2) SA 409 (C).22Jardin v Agrela 1952 (1) SA 256 (T).231943 AD 393 at 401

31

‘….But the heads of argument of Mr De Villiers, who appeared for Scrivens in this

Court, make the point that the company repudiated the contract in toto and was

therefore not entitled to avail itself of the arbitration clause, the claim and the

counterclaim going to the root of the contract. The fallacy underlying this

contention is the assumption that a repudiation of a contract in the sense of a

refusal to continue performance under it by one party puts the whole contract out

of existence. It is true that a repudiation of a contract by one party may relieve

the other party of the obligation to carry out the other terms of the contract after

the date of repudiation, but the repudiation does not destroy the efficacy of the

arbitration clause. The real object of that clause is to provide suitable machinery

for the settlement of disputes arising out of or in relation to the contract, and as

that is its object it is reasonable to infer that both parties to the contract intended

that the clause should operate, even after the performance of the contract is at

an end.

….if, for example, this contract had come to an end on a date stipulated for its

termination I do not think it could have been contended successfully that the

arbitration clause was no longer operative. So, too, it seems to me, that when the

contract is prematurely terminated by repudiation by one of the parties, the

arbitration clause is still operative. When such repudiation takes place it may or

may not be justified. Whether it is justified or not will be a question of difference

arising out of or in relation to the contract.’

[85] I agree that the claim for specific performance must be resolved as

provided for in clause 26. This court cannot entertain the interdict at this stage

because the dispute resolution mechanisms are yet to be engaged. I fully

endorsed the statements by Justice Parker in Harold Schmidt t/a Prestige Home

Innovations v Heita,24 where the following is stated:

‘I find that clause 11 of the contract provides for an alternative dispute resolution (ADR)

mechanism. There is no evidence that the parties did attempt to take advantage of this

domestic remedy before resorting to judicial proceedings in the court below. In my

respectful opinion, the procedures in clause 11 could have greatly assisted the parties in

242006 (2) NR 555 (HC) at 565

32

resolving their dispute outside the surrounds of the Court. What is the point, if I may ask,

in providing for the ADR mechanism in the contract if the parties were not prepared to try

it out?’

Whether the balance of convenience favours the granting of an interdict in favour

of the applicant and whether applicant cannot be afforded substantial redress in

due course.

[86] It is accepted that an applicant seeking an interdict is required to establish

a prima facie right, reasonable apprehension of irreparable harm and to prove

that the balance of convenience favour the granting of an interdict and there is no

other remedy. The respondent contents that the applicant was aware of the

substantial redress that it would be afforded at the hearing in due course in

respect of its claim, but did not take steps in terms of clause 26 of the contract.

The applicant has since 2015 to 2016 been aware of the dispute regarding the

amount payable to it. In September 2016, the applicant mooted its intention to

institute legal proceedings against the respondent in the event that the monies

(the amount in respect of which has not been finally determined by the principal

agent) due to it remained unpaid. The applicant did not exercise any of the

option available in terms of the contract and no dispute was declared.

[87] The respondent contends that the applicant fails to demonstrate in its

papers that it could not be afforded substantial redress in due course for its

unpaid claim. In other words if the amount due and payable to the applicant was

determined, the respondent would have been obliged to continue engaging the

applicant as its main contractor.

[88] I also take into account the fact that the contract between the respondent

and NHE was terminated. A new agreement was entered into between the

government and the respondent. The respondent is obliged to complete the

housing project. The applicant is aware of the change of the party founding its

33

contractual relationship with the respondent to the mass housing project. It can

simply not ignore the consequences flowing from such a change.

[89] Although the right of the applicant to claim specific performance is

established by virtue of the contract I do not believe, having regard to the

inherent probabilities, that applicant could, on the facts before me, obtain final

relief at the trial. I say so because since 2015, applicant was aware of its claim

but did not commence with the adjudication procedure. The applicant has not

abandoned its claim for payment nor has it followed the adjudication procedure

[90] The respondent contends the claims for cancellation of the contact and for

contractual damages are adequate remedies in the circumstances of the matter.

It is therefore unsubstantiated why a claim for specific performance is an

adequate remedy, given the alleged financial position of the applicant.

[91] I come to the conclusion that specific performance would not be an

adequate as I found that the applicant is not entitled to possession of the

property to the exclusion of the respondent I cannot make an order interdicting

the respondent from continuing to complete the houses as stipulated by the

contract with the Government. It is not in the wider public interest that this court,

in the circumstances of this case, prevents the respondent from completing the

housing project which commenced since October 2016.

[92] This court is bound to recognise that the Government was not joined as a

party in this litigation. While I do not agree that non-joinder of the Government is

fatal to the applicant’s case, as a rule nisi could be issued and be anticipated, if

necessary. I hold however that the Government has a substantial and a direct

interest in the outcome of the interdict proceeding.

Urgency

[93] The respondent argue that this application is not urgent in view of the fact

that firstly, the urgency alleged by the applicant is self-created and secondly, that

34

the applicant does not demonstrate that it cannot be afforded substantial redress

at the hearing in due course. In respect of the first argument, respondent

contends that the applicant’s claim is entirely and purely commercial in nature

being for unpaid monies.

[94] I am of the satisfied that applications for mandament for spolie are by their

very nature urgent, however having found that the applicant did not succeed in

establishing that it exercised a builder’s lien over the property or the entire

property, and that the applicant was not in effective possession of the property, I

do not deem it necessary to decide on urgency.

[95] For these reasons I make the following order:

1. That the applicant’s application is dismissed with costs.

_______________E ANGULA

Acting Judge

APPLICANT RAYMOND HEATHCOTEassisted by SALOMON JACOBSInstructed by Fisher, Quarmby & Pfeifer

FIRST RESPONDENT TUHAFENI MUHONGOTjombe-Elago Inc.

SECOND TO FIFTH RESPONDENTS NO APPEARANCE