Reasons for order:
DE JAGER J:
This is an opposed rule 108(1)(b) application that was heard in residual court on 4 April 2025. The applicant is Bank Windhoek Limited, and the respondent is Vilho Kapembe. Both parties were represented by legal practitioners.
The property sought to be declared executable (the property) is the respondent’s primary home. The legal principles surrounding rule 108(1)(b) applications are trite, undisputed and not repeated in this judgment. The only issue between the parties arising from those principles is whether there are less drastic measures than a sale in execution of the property to satisfy the judgment debt. According to the applicant there are none. On the other hand, the respondent’s counsel contended that the offer set out below is such less drastic measure. The procedural requirements of rule 108(2) were met and are undisputed.
In opposition to the application, the respondent delivered an answering affidavit whereafter the applicant delivered a replying affidavit. The court considered all relevant circumstances with specific reference to less drastic measures than a sale in execution of the property. For the following reasons and on the case facts, the court finds that there are no such less drastic measures.
Default judgment was granted in favour of the applicant against the respondent on 11 July 2024 in the capital amount of N$511 225,12, together with compound interest at the applicant’s mortgage lending interest rate from time to time plus 1 per cent from 7 May 2024 to date of final payment, and costs of suit as between attorney and client. The judgment debt that was obtained more than nine months ago remains unsatisfied.
The rule 108(1)(b) application was instituted on 7 October 2024, but the respondent was already informed on 19 June 2024 (about ten months ago), when the combined summons and particulars of claim were served on him personally by the deputy sheriff, that the applicant would seek an order declaring the property executable.
The respondent had known for a substantial period that execution was coming.
There is a mortgage bond for N$500 000 and an additional N$100 000 registered over the property in favour of the applicant as security for the judgment debt. The mortgage bond was executed on 29 April 2020. The judgment debt was incurred to purchase the property, and the property was provided as security for that debt.
The term of the home loan was 300 months. As such, the home loan was in its infant stage when the respondent defaulted.
In January 2020, the property’s market value was N$500 000 and its forced sale value was N$350 000. The judgment debt not only exceeds the forced sale value, but it also exceeds its market value as of January 2020.
Considering the respondent’s identity number recorded in the mortgage bond, he is relatively young at 41 years of age. The respondent resides at the property with his 13-year-old son and his girlfriend. The respondent did not provide any details about the mother of his child.
The respondent was able to purchase the property because he had a housing subsidy when he used to be employed as a utilityman by Namibia Power Corporation (Pty) Ltd (NamPower), mostly doing welding work. He lost the housing subsidy when he was dismissed in March 2022. There is a pending dispute about his dismissal, but no details are provided in that regard to assist him in opposing the rule 108(1)(b) application.
The respondent has been unemployed for more than three years since March 2022 and efforts to find alternative employment were unsuccessful, so he said without providing any substantive supporting facts. He is a welder. He performs small projects as an independent contractor and with the revenue he receives, he continued paying the applicant with what he earned. He committed to paying a monthly instalment of N$6000, while the instalment used to be N$4 324,01. Considering the respondent’s age and physical abilities deduced from the facts in the answering affidavit, he has the capacity to be gainfully employed. No details are provided why the respondent cannot rent alternative accommodation within his means. For the time being, and considering the payments he has been making, the property appears to be beyond his means.
The bank statement provided confirms that the respondent made regular payments since April 2022 to November 2024. However, most payments were less that the instalments due, but a few were more than the instalments due. On record, the last payment of N$3300 was made on 8 November 2024. As of 4 March 2025, the accrued interest is N$80 229,74 the arrears are N$42 083,81, the outstanding balance is N$502 168,47 and the instalment due is N$5 267,30. The outstanding balance is more than the primary mortgaged debt of N$500 000. The suggested instalment of N$6000 would only be N$732,70 more than the current instalment not bringing any material relief to the total arrears of N$42 083,81.
The respondent relies on First National Bank of Namibia Limited v Iita and his counsel submitted that the court should adopt the approach in that case and dismiss the rule 108(1)(b) application. In that matter the application was dismissed in the particular circumstances of that case. In that case, the respondent proposed to pay several thousands of Namibia dollars in excess of the instalment towards the arrears and she undertook to pay N$30 000 which she expected to receive in agent’s commission towards the arrears. At the time, the respondent was undergoing her practical legal studies at the Justice Training Centre and the court stated that the omens were good that she would be able to earn a stable income and thereafter effortlessly clear her indebtedness. The facts of that case are distinguishable from the instant matter. In the instant matter, the respondent’s income is uncertain and dependent on the projects he may or may not receive in any given month with no form of guarantee or certainty in the near future.
The court is not at large to compel the applicant to conclude new payment terms with the respondent. Even though regular payments were made by the respondent, the applicant has a substantive right to ‘satisfaction’ of the judgment debt. The ordinary grammatical meaning of ‘satisfaction’ in the context of law is the payment of a debt or fulfilment of an obligation.
The respondent had an evidentiary burden to place facts before court illustrating less drastic measures to ‘satisfy’ the judgment debt than a sale in execution that would not result in the applicant’s commercial interest being defeated, thereby amounting to non-payment and stringing the applicant along until someday he has the means to pay.
The court was not provided with any concrete details when the judgment debt can be satisfied. The court was only provided with a suggested payment term of N$6000 per month which would basically take the loan to its full term instead of satisfying the judgment debt. Moreover, the uncertainty surrounding the respondent’s ability to pay N$6000 per month is glaring.
Although the applicant was not obliged to attempt execution against the respondent’s movable properties, the applicant obtained a nulla bona return of service on 18 September 2024 in respect of the respondent’s movable properties.
It would be prejudicial to both parties and not in either of their interest to allow the judgment debt to grow even further past the extent of the security it was intended to provide.
Subject to obtaining a court order, the applicant has a substantive right to foreclosure. Rule 108 should not be read to eliminate that right. The applicant’s right can only be overruled by a stronger substantive right by the respondent. The case facts do not disclose such stronger substantive right. In those circumstances, the application should succeed.
The court applies the general rule on costs that it follows the event. The applicant, however, failed to make a case for costs to be awarded on the punitive cost scale sought. The applicant’s prayer for costs on a punitive cost scale is therefore declined.
In conclusion, it is ordered that:
The following immovable property is declared specially executable:
CERTAIN: ERF NO. 2277 GOREANGAB (EXTENSION NO. 3) SITUATE: IN THE MUNICIPALITY OF WINDHOEK REGISTRATION DIVISION "K" KHOMAS REGION MEASURING: 299 (TWO HUNDRED AND NINETY NINE) SQUARE METRES HELD BY: DEED OF TRANSFER NO. T1988/2020 SUBJECT: TO ALL THE CONDITIONS CONTAINED THEREIN
The respondent must pay the applicant’s costs as between party and party.
The matter is finalised and removed from the roll. |
