Josea survives bankruptcy

ONE of the main figures in the Avid Investment Corporation investment scam, Nico Josea, yesterday left the High Court singing the praises of the Lord after he won a major victory in his battle to avoid being declared bankrupt and prevent being stripped of his personal earthly assets.

“Hallelujah! Praise the Lord,” Josea called out after hearing that Judge President Petrus Damaseb has discharged an interim court order that was the first step in getting his and his wife’s joint estate declared bankrupt and using their assets to pay off debts that Josea is claimed to owe Avid Investment Corporation as a result of a N$30 million investment that the Social Security Commission placed with Avid in early 2005. Josea won this round in his battle against the SSC and Avid’s liquidator thanks to alleged procedural errors on the part of the lawyers who acted for the SSC and Avid’s liquidators at the time that the legal action against Josea and his personal assets was launched.Relatives and friends of Josea soon joined him in exclaiming religious praises after they realised that he had won a battle in a continuing legal war that has so far seen him arrested and criminally charged, his personal estate placed under provisional sequestration and his asset management company, Namangol Investments, provisionally liquidated as well.”Write there: ‘NC Josea KO Avid and Social Security’,” Josea said to The Namibian as he and his praise-singing entourage departed from the court, trailing more “hallelujahs” and “praise the Lords” in their wake, after the ruling.A sensational Companies Act enquiry into Avid’s inability to repay the N$30 million that the SSC had invested through the company in early 2005 was under way in the High Court when Josea was arrested on July 26 2005.He was taken into custody at the end of the second day that he had spent on the witness stand in an overcrowded courtroom to explain the role he and his company had played in the supposed investment of the SSC’s money.On the day after his arrest, the provisional liquidators who had been appointed to take charge of Avid Investment Corporation brought an urgent application in the High Court, without warning to Josea, to have Namangol Investments provisionally liquidated and Josea’s personal estate provisionally sequestrated.The seed of the defeat that the only remaining liquidator of Avid, Eric Knouwds, suffered and the victory that Josea celebrated in the High Court yesterday was sown on that day in late July 2005 already.The basis of the legal action taken against Josea and Namangol Investments was a transfer of N$29,5 million from Avid to Namangol on January 28 2005, two days after the SSC had paid N$30 million into Avid’s bank account with the intention that the money was to be invested for a four-month period.From Namangol’s bank account, N$20 million was transferred to South Africa, where a supposed investment broker was supposed to invest the money, according to Josea.That broker, Alan Rosenberg, again paid N$15 million to Josea in March 2005 – but none of this money was returned to either Avid or the SSC.According to Josea, this payment was part of a settlement that he and Rosenberg reached after he accused Rosenberg of a breach of contract over the investment of the N$20 million.Josea has been claiming that as a return from that investment of N$20 million Namangol was still supposed to receive, by the first week of March 2006, some US$17,9 million (about N$120 million at the then exchange rate) from an investment that Rosenberg did.That money has never been forthcoming.In terms of the court order through which Josea’s estate was provisionally sequestrated, the order had to be served on Josea through publication in the Government Gazette and The Namibian, and by having the Deputy Sheriff for the Windhoek district serve it on Josea on his “registered address”.Josea afterwards objected that the court order and a copy of the sequestration application had not been formally served on him, and that he and his lawyers only became aware of the application and order through media reports and then got hold of the court papers through their own efforts.According to the liquidator, though, copies of the application and the order were handed over to Josea’s lawyers on July 27 2005 already.Josea however disputed this as well.The Judge President accepted in his judgement that neither the court order nor the founding papers had been handed to Josea’s lawyers as claimed.As a result of Josea’s complaint about not having had the court papers properly served on him, the court order was then formally served on him on October 20 2005.Namangol was not a party to the sequestration application, Judge President Damaseb pointed out in the judgement delivered yesterday.In relation to a natural person like Josea and his wife, a “registered address” “is a concept alien to our law,” the Judge President remarked, stating that the part of the first court order that required that the order had to be served on Josea’s “registered address” was therefore “a legal impossibility”.Avid’s liquidators approached the High Court with the application against Josea without having given prior notice to Josea, the Judge President noted.To require that only a court order was then to be served on Josea, “is in my view inherently unfair and unjust,” the Judge President stated.”It is the founding papers, not the court order, which contain the case that the respondent(s) were required to meet,” he stated.”A fair hearing, it can hardly be disputed, includes the right to know what case you are required to meet.”He further stated: “‘Service’ of process is the all-important first step which sets a legal proceeding in train. (…) “Where there is complete failure of service it matters not that, regardless, the affected party somehow became aware of the legal process against it, entered appearance and is represented in the proceedings.A proceeding which has taken place without service is a nullity and it is not competent for a court to condone it.”The root of the problem that has arisen in the case was that a court order was obtained which directed that the order had to be served on Josea at his “registered address”, the Judge President commented.The lawyers acting for Avid’s liquidator should have pointed out to the Judge who granted the provisional sequestration order that this sort of non-standard service was being asked, the Judge President also commented.Because they had a duty to assist the court to do justice in the case and to act fairly towards Josea, the lawyers should also have asked that both the order and the application had to be served on Josea, he stated.Because of the lawyers’ conduct a gross failure of justice was brought about, Judge President Damaseb stated.As a result of that, he ordered that the sequestration application is dismissed, and Knouwds has to pay Josea’s legal costs on the higher than normal scale of an attorney and own client.Josea was represented by Johannesburg lawyers Jaco van Rooyen and Derrick Greyling and Windhoek lawyer André Louw.Andrew Corbett, instructed by the firm Dr Weder, Kauta & Hoveka, acted for Knouwds.Josea won this round in his battle against the SSC and Avid’s liquidator thanks to alleged procedural errors on the part of the lawyers who acted for the SSC and Avid’s liquidators at the time that the legal action against Josea and his personal assets was launched.Relatives and friends of Josea soon joined him in exclaiming religious praises after they realised that he had won a battle in a continuing legal war that has so far seen him arrested and criminally charged, his personal estate placed under provisional sequestration and his asset management company, Namangol Investments, provisionally liquidated as well.”Write there: ‘NC Josea KO Avid and Social Security’,” Josea said to The Namibian as he and his praise-singing entourage departed from the court, trailing more “hallelujahs” and “praise the Lords” in their wake, after the ruling. A sensational Companies Act enquiry into Avid’s inability to repay the N$30 million that the SSC had invested through the company in early 2005 was under way in the High Court when Josea was arrested on July 26 2005.He was taken into custody at the end of the second day that he had spent on the witness stand in an overcrowded courtroom to explain the role he and his company had played in the supposed investment of the SSC’s money.On the day after his arrest, the provisional liquidators who had been appointed to take charge of Avid Investment Corporation brought an urgent application in the High Court, without warning to Josea, to have Namangol Investments provisionally liquidated and Josea’s personal estate provisionally sequestrated.The seed of the defeat that the only remaining liquidator of Avid, Eric Knouwds, suffered and the victory that Josea celebrated in the High Court yesterday was sown on that day in late July 2005 already.The basis of the legal action taken against Josea and Namangol Investments was a transfer of N$29,5 million from Avid to Namangol on January 28 2005, two days after the SSC had paid N$30 million into Avid’s bank account with the intention that the money was to be invested for a four-month period.From Namangol’s bank account, N$20 million was transferred to South Africa, where a supposed investment broker was supposed to invest the money, according to Josea.That broker, Alan Rosenberg, again paid N$15 million to Josea in March 2005 – but none of this money was returned to either Avid or the SSC.According to Josea, this payment was part of a settlement that he and Rosenberg reached after he accused Rosenberg of a breach of contract over the investment of the N$20 million.Josea has been claiming that as a return from that investment of N$20 million Namangol was still supposed to receive, by the first week of March 2006, some US$17,9 million (about N$120 million at the then exchange rate) from an investment that Rosenberg did.That money has never been forthcoming.In terms of the court order through which Josea’s estate was provisionally sequestrated, the order had to be served on Josea through publication in the Government Gazette and The Namibian, and by having the Deputy Sheriff for the Windhoek district serve it on Josea on his “registered address”.Josea afterwards objected that the court order and a copy of the sequestration application had not been formally served on him, and that he and his lawyers only became aware of the application and order through media reports and then got hold of the court papers through their own efforts.According to the liquidator, though, copies of the application and the order were handed over to Josea’s lawyers on July 27 2005 already.Josea however disputed this as well.The Judge President accepted in his judgement that neither the court order nor the founding papers had been handed to Josea’s lawyers as claimed.As a result of Josea’s complaint about not having had the court papers properly served on him, the court order was then formally served on him on October 20 2005.Namangol was not a party to the sequestration application, Judge President Damaseb pointed out in the judgement delivered yesterday.In relation to a natural person like Josea and his wife, a “registered address” “is a concept alien to our law,” the Judge President remarked, stating that the part of the first court order that required that the order had to be served on Josea’s “registered address” was therefore “a legal impossibility”.Avid’s liquidators approached the High Court with the application against Josea without having given prior notice to Josea, the Judge President noted.To require that only a court order was then to be served on Josea, “is in my view inherently unfair and unjust,” the Judge President stated.”It is the founding papers, not the court order, which contain the case that the respondent(s) were required to meet,” he stated.”A fair hearing, it can hardly be disputed, includes the right to know what case you are required to meet.”He further stated: “‘Service’ of process is the all-important first step which sets a legal proceeding in train. (…) “Where there is complete failure of service it matters not that, regardless, the affected party somehow became aware of the legal process against it, entered appearance and is represented in the proceedings.A proceeding which has taken place without service is a nullity and it is not competent for a court to condone it.”The root of the problem that has arisen in the case was that a court order was obtained which directed that the order had to be served on Josea at his “registered address”, the Judge President commented.The lawyers acting for Avid’s liquidator should have pointed out to the Judge who granted the provisional sequestration order that this sort of non-standard service was being asked, the Judge President also commented.Because they had a duty to assist the court to do justice in the case and to act fairly towards Josea, the lawyers should also have asked that both the order and the application had to be served on Josea, he stated.Because of the lawyers’ conduct a gross failure of justice was brought about, Judge President Damaseb stated.As a result of that, he ordered that the sequestration application is dismissed, and Knouwds has to pay Josea’s legal costs on the higher than normal scale of an attorney and own client.Josea was represented by Johannesburg lawyers Jaco van Rooyen and Derrick Greyling and Windhoek lawyer André Louw.Andrew Corbett, instructed by the firm Dr Weder, Kauta & Hoveka, acted for Knouwds.