Martin Endjala
RedForce Debt Management (RDM) has filed an urgent application to the High Court to intervene in the termination of its contract by the Walvis Bay Municipality Council.
According to a notice of motion dated 27 April and the founding affidavit of RDM’s chief operations officer, Selma Nangombe, the termination of the contract is unlawful and devastating to its operations.
The urgent application to be filed on 30 April, through its legal practitioner Karel Gaeb, under the Sisa Namamdje law firm, is seeking to put aside the decision taken by the Walvis Bay Council on 23 April.
“The purpose of this application is to seek an interim order interdicting and restraining the implementation of the purported termination of a service agreement between RDM and Walvis Bay Municipality,” said Nangombe.
Last week the municipality of Walvis Bay passed a motion to end RedForce’s contract with immediate effect.
This also meant that Redfoce should stop collecting debts on behalf of the council.
It was then followed up by a notice the next day by the municipal chief executive officer, John Esterhuizen, to execute the decision, and as a result, RDM was forced to seize all its operations.
In her affidavit, Nangombe stated that the relief being sought is interim, due to the pending final determination in an action challenging the termination of the agreement and seeking the enforcement of the agreement.
Nangombe said since the immediate effect of termination of its contract notice, residents refused to cooperate when called for debt collections stating that they do not recognise RDM as it was fired by the council.
She stated that this led to suspending its operations and sending most of its staff home as a result.
Nangombe further argues that only an order from the High Court can stop the decision of the council.
According to her, the termination of the agreement is politically motivated.
“The termination is motivated purely by political agendas. Debtors are voters and if they are not appeased, with upcoming elections, it may make certain councillors less popular. However, the termination is to the extreme detriment of the 1st respondent (the municipality) and its financial health. It serves to protect only the politicians and the residents who do not pay their dues,” she said.
Nangombe stressed that RDM has invested more than N$7 million in its operations, and therefore the urgent application is within its rights to protect itself.
She indicated that at the time of termination, the agency was actively engaged with more than 9000 accounts at a combined book value of N$315 million.
The agency was also collecting an average debt of N$48,000 per day and N$14 million per month.
RDM alleged that certain councillors’ accounts were handed over to RDM which was not brought to the attention of the council before passing the motion.
“I am also aware that three out of the ten councillors have outstanding accounts handed over to RDM for collection. These councillors are Leroy Victor, Ryan Gordon (under the name of Greenibia Trading CC- annexure “RDM 24”) and Paulus Kauhondamua (annexure “RDM 25”). This was not disclosed to the municipality before the passing of the motion and subsequent resolution and as such, they acted contrary to the provisions of the council’s standing rules,” she revealed.
