- July 21, 2023
- |Civil Law, Practice, And Procedure, Concise Law Reports (CLR)
This was a summary judgment application with a request for an order declaring immovable property executable. The plaintiff claimed breach of contract for two loans, one being a written loan agreement of N$2.7 million and the other a mortgage loan of N$1.8 million. Suretyship contracts were entered by the second, third, and fourth defendants. The first defendant defaulted in October 2022, leading to the issuance of summons.
The opposition to the application focused solely on the declaration of immovable property as especially executable, leaving this as the sole issue for resolution. With no defence presented and considering the nature of the summary judgment claims, the court was inclined to grant summary judgment, along with interest and costs, for both claims. The loans were secured by mortgage bonds, and the plaintiff was unsure if the property was the defendant’s primary residence. The applicant, representing the creditor, asserted that the necessary conditions for property execution were met. In opposition, the second defendant, affiliated with the first and fourth defendants, argued against property execution. They stated that the property was leased to Mr. Hango, used as a primary residence, and presented alternative payment arrangements based on a salt supply contract.
Service hasn’t been made on the property lessee regarding the execution application. The execution creditor’s counsel argued against strict adherence to Form 24, assuming the lessee saw documents based on references in the answering affidavit. Concerning the proposed use of rent to settle the debt, no viable alternatives were explained. The salt contract was disputed as a substantial debt settlement method due to being a one-time delivery.
The first defendant’s financial details were lacking. Opposition asserted that the property was the lessee’s primary residence, lacking personal service. Alternatives to selling the property included using income from the salt and rental contracts. The strike-out application was challenged as improperly filed and not easily granted. Referring to Bank Windhoek Namibia Ltd v Mokasa Trading Enterprises CC, rule 108’s requirements were summarized as being the execution debtor’s movable property inadequacy and court-approved immovable property execution. Regarding immovable property that is the execution debtor’s primary home or is leased as a residence, a court order for special execution can only be granted if specific jurisdictional conditions under Rule 108(2)(a) and (b) are met.
Additionally, in the case of mortgage creditors, they have the right to seek recourse against the mortgaged property, but the execution creditor must adhere to proper procedures. In Standard Bank Namibia Ltd v Shipila and Others, it was established that mortgage creditors can assert a limited real right to execute claims against specially mortgaged immovable property, provided there is no abuse of process or mala fides. When the property in question is someone’s home, judicial oversight is necessary to determine if foreclosure can be avoided by considering viable alternatives.
CLAASEN J:
The applicant’s request to strike out certain paragraphs in the respondent’s affidavit lacked basis, as no prior mention of this relief was made, nor was a specific application filed for it. The respondent’s purported late filing of its affidavit was debunked by evidence of joint agreements and filing. Despite the applicant’s claim of no opposition, the court reviewed the situation and clarified the timeline.
Addressing execution creditor requirements, the failure to serve the property’s lessee affects the argument against alternative accommodation. The court concluded that compliance with Rule 108(2)(b) was not met. Even if the assumption were made that the lessee learned of the execution, the court remained unconvinced that the debtor lacked viable alternatives. Notably, the lease contract and ongoing salt delivery contract provided sources of income. Consequently, the court deemed the debtor capable of settling the debt, leading to the rejection of the application.
As a result, the court granted the application for summary judgment with the following outcomes;
Claim 1: A payment of N$2,775,646.82, along with compound interest calculated daily and capitalized monthly at the plaintiff’s prime lending rate, currently 10.5% plus 1.5% per year, from 8 February 2023 until the final payment date. The cost of the lawsuit is to be determined on a scale between the attorney and client, as previously agreed.
Claim 2: A payment of N$1,889,629.31, along with compound interest calculated daily and capitalized monthly at the plaintiff’s prime lending rate, currently 10.5% plus 1.5% per year, from 8 February 2023 until the final payment date. The cost of the lawsuit is to be determined on a scale between the attorney and client, as previously agreed.
However, the application to declare the specified property executable, as mentioned in the notice of motion, was dismissed with costs.