The debt collection agency RedForce Debt Management has lost a case in which it sued the Rundu Town Council for N$9.2 million.
Judge Orben Sibeya dismissed RedForce Debt Management’s claim against the Rundu Town Council in a judgement delivered in the Windhoek High Court on Thursday.
Sibeya also ordered RedForce to pay the council’s legal costs in the matter.
The claim against the Rundu Town Council was dismissed after Sibeya found that RedForce failed to prove the council repudiated an agreement it had with RedForce.
He also found RedForce did not prove the council failed to support it to achieve the objectives of their agreement.
The court was informed that in terms of an agreement concluded between RedForce and the council in August 2020, RedForce was to collect debts due to the town council on the local authority’s behalf, and also was to collect data from residents of Rundu on behalf of the town council.
RedForce claimed the town council agreed to provide it the necessary support to enable it to achieve the objective of collecting debts due to the council.
RedForce also alleged that members of the council actively sabotaged the fulfilment of the agreement and refused to provide it with the necessary support.
The town council denied this allegation.
RedForce also claimed that members of the council held meetings with the local authority’s debtors to encourage them not to pay debts when requested to pay by RedForce, and that they encouraged debtors not to cooperate with RedForce when it tried to collect debts and data in terms of its agreement with the council.
According to RedForce, it suffered damages in an amount of N$5.1 million as a result of lost income in respect of the collection of debts, and a loss of income in the sum of N$4.1 million that it would have earned from data collection services.
In a plea filed at the court, the Rundu Town Council said RedForce failed to meet its monthly debt collection target of N$5 million that was agreed with the council.
The council also said it notified RedForce in January 2023 that this was a breach of their agreement, and asked it to remedy the breach.
RedForce filed its claim against the town council in the Windhoek High Court in February 2023, after it informed the council that it accepted the council’s repudiation of the agreement between them.
In his judgement, Sibeya said the town council showed there was a material breach of the agreement when RedForce failed to meet its monthly collection target, and because of that breach the agreement could be terminated.
Sibeya stated: “When this matter is stripped to the bare bones, what comes out, in my considered view, is that there was consistent failure by the plaintiff [RedForce] to meet its monthly collection target, and when this was brought to its attention and it was given notice to remedy the breach, the plaintiff turned around and claimed that the council repudiated the agreement.”
Legal counsel Tinashe Chibwana, instructed by Ulrich Etzold, represented RedForce.
The town council was represented by Wilhelm Amukoto.
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