Reasons for order:
DE JAGER J:
On 4 April 2025, the court heard an opposed rule 108(1)(b) application by the applicant (Bank Windhoek Limited) against the respondent (Menfret Melk) in residual court and made the order set out below, while both parties were represented by legal practitioners. The reasons for that order are as follows.
The legal principles surrounding rule 108(1)(b) applications are trite and not repeated in this judgment. The procedural requirements of rule 108(2) are undisputed. The only issues between the parties arising from the relevant legal principles are whether the property sought to be declared executable (the property) is the respondent’s primary home, and if so, whether there are less drastic measures than a sale in execution of the property to satisfy the judgment debt. According to the applicant, the property is not the respondent’s primary home and there are no less drastic measures that a sale in execution of the property to satisfy the judgment debt. The respondent disagreed. According to him the property is his primary home, and on the basis set out below, there are such less drastic measures.
Default judgment was granted in favour of the applicant against the respondent on 26 January 2024 in the capital amount of N$1 097 298,38 together with compound interest at the applicant’s mortgage lending interest rate from time to time plus one per cent from 24 October 2023 to date of final payment, and costs of suit on a scale between attorney and client. The judgment debt remains unsatisfied for a year and almost three months.
The rule 108(1)(b) application was instituted on 14 October 2024, but the respondent was already informed on 13 December 2023, 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.
The respondent was represented by a legal practitioner in the rule 108(1)(b) application since 31 October 2024. In opposition to the application, he delivered an answering affidavit and the applicant thereafter delivered a replying affidavit.
There is a mortgage bond for N$950 000 and an additional N$190 000 registered over the property in favour of the applicant as security for the judgment debt. The mortgage bond was executed on 21 April 2021. As such, the home loan was in its infant stage when the respondent defaulted. The judgment debt was incurred to purchase the property, and the property was provided as security for that debt.
In September 2023, the property’s market value was N$1 150 000 and its forced sale value was N$805 000. As of September 2023, the capital judgment debt exceeds the property’s force sale value and it almost exceeds its market value with N$52 701,62 to spare.
Considering the respondent’s identity number recorded in the mortgage bond, he is young at 34 years of age.
The respondent does not reside at the property but stated it is his primary home because it is his only immovable property. His legal practitioner submitted that he has a temporary rental arrangement where he currently resides. On the case facts and the liberal interpretation given to a primary home in Bank Windhoek Limited v Qhayiso, the property is regarded as the respondent's primary home for purposes of the application at hand. However, among the facts considered in adjudicating the application are the facts that the respondent does not reside at the property but has a temporary rental arrangement elsewhere and that he receives rental income from leasing the property to a third party.
The respondent was employed by the applicant in 2021 and took out a home loan from it. The respondent resigned from his employment with the applicant in December 2022. Since September 2024, he is employed by United PayPoint (Pty) Ltd. His gross salary is N$25 000.
In the answering affidavit, the respondent did not illustrate less drastic measures to satisfy the judgment debt. He stated that the applicant did not attempt to explore less drastic measures to satisfy the judgment debt. He further stated the application should fail because he is able to enter into a settlement agreement to cover the arrears and thereafter keep up with the loan.
The respondent’s approach is wrong. He 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 is not at large to compel the parties to enter settlement engagements to conclude new payment terms. 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 consented to judgment declaring the property executable on 31 March 2024 provided the applicant shall only execute the judgment after six months. The consent to judgment was made before the rule 108(1)(b) application was instituted. It was not made a court order but one of the facts considered in the instant application is that six months passed since the consent to judgment.
On 28 February 2025, the court already conducted a rule 108(1)(b) inquiry. The respondent was resultantly ordered to pay N$10 000 by 7 March 2025, to continue the instalment payment of N$10 000 at the end of each month and to report to court on how the arrears will be paid. The case was postponed to 14 March 2025 for a status hearing. At the time, the court stated that if the respondent fails to pay N$10 000 by 7 March 2025, the court can grant judgment on 14 March 2025.
In a status report filed on 13 March 2025 at 19:20 and without giving any reasons, it was reported on the respondent's behalf that he was unable to comply with the 28 February 2025 court order but that he will pay N$10 000 starting 31 March 2025 and N$14 000 per month to pay the instalments and the arrears starting 30 June 2025.
On 14 March 2025, the applicant's legal practitioner moved the application based on what the court stated on 28 February 2025 as set out in paragraph 16 above. The respondent's legal practitioner did not agree with the applicant's legal practitioner's submission on what the court stated on that day. The transcript of the court proceedings was not before court on 14 March 2025. The respondent's legal practitioner informed the court that the respondent was involved in a motor vehicle accident on his way to court and he could therefore not attend court on 14 March 2025. Due to the dispute on what the court stated on 28 February 2025 and the respondent's absence from court on 14 March 2025, the case was postponed to 4 April 2025 for hearing.
On 4 April 2025, the transcript of the 28 February 2025 court proceedings was put before court, and it supported the applicant's legal practitioner's submission on what the court stated on that day.
According to the applicant's status report dated 25 March 2025, as of 14 March 2025, the respondent did not make any payments in compliance with the 28 February 2025 court order. On 4 April 2025, the respondent's legal practitioner submitted that the respondent made a payment on 4 April 2025. Thus, the respondent did not adhere to the 28 February 2025 court order or what was reported on his behalf in the 13 March 2025 status report. Notwithstanding the respondent's legal practitioner's submission that the respondent's position did not change, he suggested that a further inquiry be conducted. That would serve no purpose especially considering the 28 February 2025 court order, what the court stated on that day, the respondent's non-compliance with the 28 February 2025 court order and the 13 March 2025 status report and the fact that his position did not change since 28 February 2025.
As of 14 November 2024, the outstanding balance was N$1 074 586,37 and the accrued interest was N$202 290,53. According to the applicant, with the respondent's salary of N$25 000 (gross), a monthly instalment of N$9 964,72 and arrears of N$191 000,48, the respondent's offer is unviable as a less drastic measure than a sale in execution of the property to satisfy the judgment debt. According to the 28 February 2025 transcript, the respondent's nett salary is N$17 452 (his payslip reflects his nett salary is N$17 099,78), the instalment is N$9964, the arrears are just over N$190 000, and that the judgment debt already exceeds the property's forced sale value of N$805 000. On 28 February 2025, the court asked why the rental income cannot be used to pay the arrears and it was stated that it was an avenue to explore. That submission by the respondent's legal practitioner is somewhat startling. One would expect a party in the respondent's position to make all efforts to pay the judgment debt to shield the property from being sold in execution. On 28 February 2025 the court insinuated that the respondent is not serious about his case. The converse of that insinuation is that the respondent is unable to make payments. Even after 28 February 2025 when the respondent was given a last opportunity to pay, he failed to do so. Moreover, he is employed, and he receives rental income from the property, yet he did not make payments. Conversely, he cannot make payments. The respondent’s position is exacerbated by the fact that despite being employed since September 2024 he did not make payments. Conversely, he cannot make payments.
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 17 October 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 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. The case facts further do not disclose less drastic measures than a sale in execution of the property to satisfy the judgment debt. In those circumstances, the application succeeded.
The court applied 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 was therefore declined.
In conclusion, on 4 April 2024 it was ordered that:
The following immovable property is declared specially executable:
CERTAIN: RF NO. 1122 OSONA VILLAGE (EXTENSION NO. 4) SITUATE: IN THE MUNICIPALITY OF OKAHANDJA REGISTRATION DIVISION “J” OTJOZONDJUPA REGION MEASURING: 74 (THREE SEVEN FOUR) SQUARE METRES HELD BY: DEED OF TRANSFER NO. T 2216/2021 SUBJECT: TO ALL THE CONDITIONS CONTAINED THEREIN SPECIFICALLY NOTARIAL DEED NO. K 265/2021S.
The respondent must pay the applicant's costs of suit on a scale as between party and party.
The matter is finalised and removed from the roll. |
