Justicia Shipena
The High Court has ruled that Trustco Bank Namibia Ltd knew as early as August 2023 that its review application challenging a Bank of Namibia (BoN) directive to remove its board, halt deposits and lending, and pave the way for liquidation had lost its purpose but failed to act.
High Court judge Lotta Ambunda on 16 January ordered Trustco and its holding company to pay the state’s legal costs from 1 September 2023.
The ruling relates to a review application filed in September 2022 by Trustco Bank Namibia Ltd and Trustco Group Holdings against the BoN, the attorney general, the government and the minister of finance.
Trustco challenged a directive issued by the central bank on 25 July 2022 under the Banking Institutions Act of 1998.
The directive ordered the removal of Trustco Bank’s board, barred the bank from taking deposits or extending credit, and set the stage for possible liquidation.
Trustco Bank argued that the directive was unlawful, irrational and unconstitutional.
They also challenged sections of the old banking law, saying these denied affected institutions a meaningful right of appeal.
The legal position later changed. In 2023, the Banking Institutions Act of 1998 was repealed and replaced by the Banking Institutions Act of 2023.
Trustco Bank also surrendered its banking licence, which took effect on 30 August 2023.
The court found that these developments meant the review application no longer presented a live dispute.
“Mootness is when a matter no longer presents an existing or live controversy,” Ambunda said.
“There was no, there could not have been, any consideration of the merits of the review application because there is no live triable controversy for determination by the court,” she added.
Despite this, the court said Trustco Bank did not withdraw its case. The parties continued with case management, settlement talks and preparations for a full hearing over the next two years.
Trustco Bank later argued that because the matter had become moot, each party should pay its costs under the Biowatch principle, which shields private litigants who unsuccessfully pursue constitutional claims against the state.
The court rejected that argument.
“Persisting with litigation or keeping litigation alive while knowing that the review application has become moot is inappropriate, frivolous and vexatious. Such conduct leads to unnecessary costs in further litigation and the unwarranted use of scarce court resources,” Ambunda said.
Ambunda said Trustco Bank had ample opportunity to stop the case once it lost its purpose.
“Already by 30 August 2023, the applicants had the opportunity to bring it to the attention of the court that the matter had become moot and that the review application would not be persisted with.”
“This would have obviated the need to incur costs with regard to further litigation.”
Ambunda said the court had to respond firmly to how the matter was handled.
“I am of the view that this court must show its displeasure in respect of how the applicant conducted this matter by granting an appropriate cost order,” she said.
The court removed the review application from the rolls and declared it final.
Trustco was ordered to pay the respondents’ legal costs from 1 September 2023, including the costs of one instructing and one instructed counsel.
Caption
Trustco Bank Namibia Ltd has been ordered by the High Court to pay the state’s legal costs after the bank failed to withdraw a court challenge that had lost its purpose.
- Photo: Contributed
