RCC sues to recover B1 City mall project millions

THE Roads Contractor Company is taking legal action against the company in charge of the deeply troubled B1 City shopping mall property development in a bid to recover some N$5,7 million the parastatal has lent to be spent on the stalled project.

A case in which the RCC is asking the High Court to grant a provisional sentence against the company that initiated the B1 City development, Ae//Gams Engineering Company, has already been in court twice this month. It is set to return to the High Court tomorrow after a second postponement at the end of last week.The RCC is asking the court to direct Ae//Gams Engineering to pay some N$5,691 million to the RCC, plus interest of 11 per cent a year on that amount from May 15 this year onwards.The parastatal has also had a summons served on Ae//Gams Engineering to inform the company that it will ask the court to order the sale of Erf 10485 in Katutura, Windhoek, to raise money to be paid to the RCC.Erf 10485, the plot on which building work on the B1 City project has ground to a halt, is situated at a busy intersection of the Western Bypass section of the B1 main road and Independence Avenue, where this main road enters Katutura.With the B1 City project, the plan was to build a shopping centre and service station complex on the 2,26-hectare plot.Work on the project has ground to a halt, however.The plot belongs to Ae//Gams Engineering, but the RCC became involved in the project as project manager and civil works contractor.By late November last year, it was reported that the RCC had already spent some N$14 million on the development, which was estimated to ultimately cost some N$54 million, while no bond had yet been registered over the property in the parastatal’s name.A mortgage bond was finally registered on December 13 last year, a copy of the bond document filed with the High Court indicates.Ae//Gams Engineering has given notice that it plans to oppose the RCC’s court action.In an affidavit, David Imbili, a director of the company, has indicated that a legal loophole has been found in the supposed bond that was registered over the property.In his view, this invalidates the registration of the bond.According to Imbili, the document filed with the Deeds Office as a mortgage bond is not a bond and has not been validly registered.He stated in his affidavit that he gave only lawyer Marén de Klerk written authority to execute and register such a mortgage bond over the property.Another conveyancer, Karin Coetzee, registered the bond with the Registrar of Deeds, the copy of the bond document indicates.Imbili admitted in his affidavit that he had signed another copy of such a bond and that he was bound by such an agreement – but the supposed bond registered so far was invalid, he claims.Ae//Gams Engineering is not yet required to pay any of the monthly instalments to the RCC to repay the N$5,69 million that the RCC had lent it, though, he added.According to the loan agreement between the two companies the money had to be repaid in 120 consecutive monthly instalments, with the first payment due only when all building works on Erf 10485 had been completed.The building works on the plot – where no construction work has in fact been going on for months – “are far from completed”, Imbili states.He also claimed that the RCC’s provisional sentence summons was “fatally defective”.It does not allege or set out any failure by Ae//Gams Engineering to comply with the provisions of the bond document, and does not show that the money lent to Ae//Gams Engineering has become due and payable, he stated.It has been reported that Ae//Gams Engineering bought Erf 10485 from the City of Windhoek for N$3,905 million in October 2005.It is set to return to the High Court tomorrow after a second postponement at the end of last week.The RCC is asking the court to direct Ae//Gams Engineering to pay some N$5,691 million to the RCC, plus interest of 11 per cent a year on that amount from May 15 this year onwards.The parastatal has also had a summons served on Ae//Gams Engineering to inform the company that it will ask the court to order the sale of Erf 10485 in Katutura, Windhoek, to raise money to be paid to the RCC. Erf 10485, the plot on which building work on the B1 City project has ground to a halt, is situated at a busy intersection of the Western Bypass section of the B1 main road and Independence Avenue, where this main road enters Katutura.With the B1 City project, the plan was to build a shopping centre and service station complex on the 2,26-hectare plot.Work on the project has ground to a halt, however.The plot belongs to Ae//Gams Engineering, but the RCC became involved in the project as project manager and civil works contractor.By late November last year, it was reported that the RCC had already spent some N$14 million on the development, which was estimated to ultimately cost some N$54 million, while no bond had yet been registered over the property in the parastatal’s name.A mortgage bond was finally registered on December 13 last year, a copy of the bond document filed with the High Court indicates.Ae//Gams Engineering has given notice that it plans to oppose the RCC’s court action.In an affidavit, David Imbili, a director of the company, has indicated that a legal loophole has been found in the supposed bond that was registered over the property.In his view, this invalidates the registration of the bond.According to Imbili, the document filed with the Deeds Office as a mortgage bond is not a bond and has not been validly registered.He stated in his affidavit that he gave only lawyer Marén de Klerk written authority to execute and register such a mortgage bond over the property.Another conveyancer, Karin Coetzee, registered the bond with the Registrar of Deeds, the copy of the bond document indicates.Imbili admitted in his affidavit that he had signed another copy of such a bond and that he was bound by such an agreement – but the supposed bond registered so far was invalid, he claims.Ae//Gams Engineering is not yet required to pay any of the monthly instalments to the RCC to repay the N$5,69 million that the RCC had lent it, though, he added.According to the loan agreement between the two companies the money had to be repaid in 120 consecutive monthly instalments, with the first payment due only when all building works on Erf 10485 had been completed.The building works on the plot – where no construction work has in fact been going on for months – “are far from completed”, Imbili states.He also claimed that the RCC’s provisional sentence summons was “fatally defective”.It does not allege or set out any failure by Ae//Gams Engineering to comply with the provisions of the bond document, and does not show that the money lent to Ae//Gams Engineering has become due and payable, he stated.It has been reported that Ae//Gams Engineering bought Erf 10485 from the City of Windhoek for N$3,905 million in October 2005.