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 first and second respondents are Thea Olivier and Quentin Charles Ernest Olivier, respectively. The first respondent, who does not reside at the property sought to be declared executable (the property), did not oppose the application. She signed a consent to judgment declaring the property executable. The second respondent, whose primary home is the property, opposed the application. The second respondent appeared in court on 4 April 2025 and represented himself. The court explained to him that he must illustrate that there are less drastic measures than a sale in execution of the property to satisfy the judgment debt. The court informed him that he can do that by delivering an affidavit or by him subjecting himself to an oral inquiry in court under oath. The second respondent came to court armed with an offer which he considered a less drastic measure than a sale in execution of the property and opted for an oral inquiry under oath. The second respondent was sworn in. The court conducted an inquiry by asking the second respondent various questions and by allowing the applicant’s legal practitioner also to question him.
The legal principles surrounding rule 108(1)(b) applications are trite and not repeated in this judgment. The procedural requirements of rule 108(2) were met. The only issue arising from the relevant legal principles to be determined 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. It must be determined whether the second respondent’s offer detailed below is such less drastic measure.
The facts and circumstances of the case are as follows.
Default judgment was granted in favour of the applicant against the respondents on 6 September 2024 in the capital amounts of N$575 655 and N$933 639,52 (combined N$1 509 294,52), together with compound interest at the applicant’s prime lending interest rate from time to time plus 1 per cent from 11 June 2024 to date of final payment, and costs of suit on an attorney and client cost scale. The judgment debt remains unsatisfied for more than seven months.
The rule 108(1)(b) application was instituted on 7 October 2024, but the second respondent was already informed on 9 July 2024, 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 second respondent had known for a substantial period that execution was coming.
There is a mortgage bond for N$1 569 000 and an additional N$313 800 registered over the property in favour of the applicant as security for the judgment debt. The mortgage bond was executed on 13 August 2013. The judgment debt was incurred to purchase the property, and the property was provided as security for that debt.
The terms of the home loans were 240 and 300 months, respectively. As such, the one home loan reached half its term and the other almost half its term when the respondents defaulted.
In January 2024, the property’s market value was N$1 670 000 and its forced sale value N$1 169 000. The combined capital judgment debt exceeds the property’s forced sale value as of January 2024 and it almost exceeds its market value with N$160 705,48 to spare.
Considering the second respondent’s identity number recorded in the mortgage bond, he is almost at retirement at 56 years of age.
As of 12 September 2024, the accrued interest on the respective home loans were N$22 628,61 and N$36 619,55 (combined N$59 248,16), the arrears were N$61 781,37 and N$82 659,04 (combined N$144 440,41), the outstanding balances were N$579 571,95 and N$929 171,86 (combined N$1 508 743,81), and the instalments due were N$8 275,31 and N$11 449,02 (combined N$19 724,33).
The property is registered in both the respondents’ names. They divorced a couple of years ago. The first respondent got ‘the business’ and the second respondent got ‘the house’ (the property). Since the divorce, the second respondent was responsible for the home loans, and he was supposed to transfer the house to his name, but he never got to doing it, so he said. The second respondent is the only person residing at the house. He is unemployed. He used to bake pancakes in front of Metro two years ago, but he was asked to leave those premises and from there he could not keep up with the loan payments. In November 2024, he signed a power of attorney for the bank to sell the house, but they never did. The second respondent approached an estate agent to sell the house but now he rather wants to keep it because he found a way he could keep it. He provided the court with three handwritten pages containing meticulous calculations on how many hens he has, how many eggs they can produce per day, how much it cost to feed each hen per day and what his possible monthly profit will be for selling the eggs they produce. With 750 hens, his calculations conclude that he will be able to pay N$11 000 end July 2025, N$16 000 end August 2025, N$22 0000 end September 2025 and from end October 2025 he will be able to pay the instalment due and extra towards the arrears. According to the second respondent, his calculations are supported by average figures available on the internet. He was previously able to generate an income from the hens when he used their eggs for his pancake business, and he was left with a little profit. He already has a buyer for the eggs. The second respondent plans to expand his egg business with 200 hens every two months and once he has 2000 hens, he will be able to settle the judgment debt in five years. When asked where he is keeping the hens, it sounded that they are kept at the property but he was rather vague and said he will find a place for them. The three handwritten pages were subsequently loaded onto e-Justice by my assistant on my instruction.
The applicant’s case included the following circumstances. Since concluding the mortgage loans and before instituting the action, the respondents defaulted on 19 and 20 different occasions on the respective loans and the applicant granted them seven payment deferments to bring their arrears up to date, which they did but defaulted again in August 2023 and have since remained in arrears. The indebtedness is substantial. The payment offers for July and August do not even cover the instalments due. The applicant is prepared to stay execution for four months, but it is not prepared to accept the applicant’s offer. Although the applicant was not obliged to attempt execution against the respondents’ movable properties, the applicant obtained nulla bona returns of service on 16 October 2024 in respect of the respondents’ movable properties.
It would be prejudicial to all parties and not in any of their interest to allow the judgment debt to grow past the extent of the security it was intended to provide.
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 second respondent presented a well-articulated plan to save his house. He is of an advanced age, and it will in all probability be impossible for him to acquire another immovable property by way of a loan. The loan terms are still far from their full terms and there is a history of non-payment prior to action having been instituted, including several payment deferments. The court is not at large to compel the applicant to conclude new payment terms with the second respondent. The second respondent is commended for his efforts, but they are insufficient to ‘satisfy’ the judgment debt. The combined arrears are N$144 440,41, and the combined instalment due is N$19 724,33. If successful in his efforts, it would take the second respondent six months from end April 2025 to end September 2025 to make a monthly payment sufficient to cover the instalment due with N$2 275,67 to spare towards the arrears. By then the arrears and interest would have increased having a worsening effect on the second respondent’s position.
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 second respondent. The case facts do not disclose such stronger substantive right. The court considered all relevant circumstances with specific reference to less drastic measures than a sale in execution of the property. On the case facts the court finds there are no less drastic measures than a sale in execution of the property to satisfy the judgment debt. 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. 17, ROCKY CREST SITUATE: IN THE MUNICIPALITY OF WINDHOEK REGISTRATION DIVISION "K" KHOMAS REGION MEASURING: 510 [FIVE ONE NIL] SQUARE METRES HELD: UNDER DEED OF TRANSFER NO. T4369/2013 SUBJECT: TO THE CONDITIONS CONTAINED THEREIN
The second respondent must pay the applicant’s costs as between party and party.
The matter is finalised and removed from the roll. |
