Allexer Namundjembo
The Supreme Court has overturned a High Court ruling that found a Windhoek law firm negligent in handling a municipal contract dispute involving Namibian Electrical Services CC (NES).
The case stems from a contract awarded to NES in September 2013 by the City of Windhoek to carry out electrical works at Otjomuise Extension 10 under a FIDIC-based agreement.
The contract required completion within ten months but dragged on for 18 months.
NES blamed delays on the municipality’s failure to approve drawings, while the municipality imposed penalties and deducted amounts from payments.
Under financial pressure, NES turned to lawyer Schurz, then with PD Theron & Associates, for assistance.
Schurz later brought in counsel Andries van Vuuren and Andrew Corbett. NES claimed the legal team bypassed the contractual requirement to appoint a Dispute Adjudication Board and instead pursued litigation, which the company described as ill-advised.
It sought damages of more than N$110 000, later reduced to N$57 677.
In September 2022, the High Court ruled partly in NES’s favour, finding that PD Theron & Associates failed to follow the contract’s dispute resolution mechanisms, which amounted to professional negligence.
The law firm appealed and it argued that NES had not objected to the steps taken at the time, that urgent cash flow problems influenced strategy, and that Schurz acted within his mandate.
The Supreme Court agreed, ruling that Schurz acted with reasonable skill and kept the client informed.
Testimony showed that Petrov, NES’s sole member, initially instructed Schurz to pursue the FIDIC adjudication process but later demanded urgent relief.
“Petrov required urgent relief. Counsel advised that with the High Court Rules introducing court-connected mediation, an action could be instituted leading to possible settlement,” the judgement read.
Schurz told the court he consulted counsel, arranged meetings with the municipality and acted on Petrov’s instructions.
“The institution of the action was the ultimate instruction Petrov gave,” the Supreme Court ruled, adding that Petrov’s failure to object at the time made Schurz’s version “more probable”.
The court dismissed Petrov’s testimony on professional standards, noting that as a layperson he could not judge legal competence.
“It was not proven that Schurz acted without reasonable skill and knowledge,” the ruling stated.
The Supreme Court set aside the High Court order and upheld the appeal with costs.
“The respondent simply did not discharge its burden of proof. The probabilities tilt in favour of Schurz’s version.”
