Debt collector and Rundu reach settlement

THE High Court on Friday approved a settlement agreement between Redforce Management CC and the Rundu Town Council to end a dispute over the termination of a debt-recovery services contract.

Redforce on an urgent basis sought recourse from the High Court to stop the termination of the contract the council had awarded it on 20 July.

The minister of urban and rural development, Erastus Uutoni, on 9 October ordered the council to terminate the contract as the council did not consult his office in terms of the Local Authorities Act before appointing the debt collector.

In terms of the settlement agreement the parties reached on Wednesday last week, which acting judge Esi Schimming-Chase made a court order on Friday, the minister’s decision to terminate the contract was declared null and void.

The agreement also states Redforce will resume with its debt-collection services on behalf of the Rundu Town Council from 1 January 2021.

Equally, it states the council will issue a public notice informing residents that Redforce will resume its services next year.

Government attorny Matti Asino in a letter dated 11 November wrote to Uutoni advising him not to oppose Redforce’s court application challenging the contract termination, and to abide by the court’s decision.

He informed the minister that the council’s acting chief executive officer, Sem Nekaro, lawfully concluded the contract in question, adding there is no provision in the Procurement Act which required him to obtain permission from the minister of urban and rural development prior to the conclusion of the contract.

“The minister is also not required to co-sign the agreement in terms of the Procurement Act, as the signing powers of procurement agreements are solely vested in the accounting officer,” Asino stated.

He advised Uutoni that his decision to suspend the activities of Redforce has no legal basis.

“A public body may only terminate a procurement contract when the continuation of the contract is not and will not be in the public interest, or if any variation in the contract price causes the total contract amount to exceed more than 15%,” he said.

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