Henties loses appeal in Redforce case
The Windhoek High Court has dismissed an appeal by the Henties Bay municipality against a ruling that temporarily barred it from terminating its contract with Redforce Debt Management.
The decision, delivered last Friday by judge Anne-Doris Hans-Kaumbi, upheld the earlier ruling that Redforce’s contract remained valid pending the resolution of the ongoing dispute.
The court not only rejected the municipality's appeal but also ordered it to pay Redforce's legal costs.
The municipality and its acting CEO, Ignasia Neis, had sought leave to appeal against the ruling delivered on 11 November 2024, which had interdicted the council from unilaterally terminating the contract. However, in the latest ruling, the court determined that the municipality’s appeal was not based on an appealable order and consequently dismissed the application.
Justice Hans-Kaumbi explained that the High Court had not issued a final ruling that determined the parties' rights, making the order ineligible for appeal. She emphasised that the dispute remains open and must still undergo proper adjudication.
The court further ruled that the municipality had failed to provide sufficient legal grounds for an appeal, highlighting that the appropriate recourse would have been to clarify any ambiguities in the earlier ruling.
Ongoing dispute
The dispute centres on the municipality’s termination of its debt collection contract with Redforce, which was initially set to expire on 17 January. However, Redforce has maintained that a “wind-down period” clause in the agreement entitles it to continue services for up to 12 months post-expiry on a non-exclusive basis.
The municipality, on the other hand, argues that the contract was invalid due to being signed outside the statutory 30-day period prescribed under a section of the Procurement Act. Despite this, Redforce successfully obtained an interim court order preventing the termination, which was upheld in the latest ruling.
Redforce claims it has successfully recovered over N$43 million in outstanding municipal debts since its contract commenced in February 2022. The company has also accused the municipality of failing to settle invoices for services rendered in November and December 2024, further complicating the dispute.
Following the municipality’s issuance of a public notice on 31 January formally announcing the termination, Redforce took immediate legal action. The company’s attorneys argued that the notice was “misleading and deceptive,” as it failed to acknowledge the contractual wind-down period.
Redforce contended that the municipality misrepresented the situation to justify its actions. The company argued that the January public notice provided misleading information by instructing residents and businesses not to engage with Redforce regarding outstanding municipal payments, despite the contract still being legally in effect.
The company further demanded immediate access to financial records, including the February age analysis and January payment file, to continue its debt collection operations in accordance with the contractual terms.
Terms of contract
This is not the first time the two parties have clashed in court. The initial legal battle erupted in September 2024 when Redforce was first notified of its termination. Redforce successfully argued that it had not been given an opportunity to present its case before the decision was enforced.
At that time, the municipality listed six reasons for the termination, including allegations of underperformance, but Redforce refuted the claims, citing its N$43 million debt recovery success.
When approached for comment as to whether the Henties Bay municipality would pursue a Supreme Court appeal or adhere to the contractual dispute resolution mechanism, which may include arbitration, mayor Lewies Vermaak said the council will be reviewing its legal position.
“The whole of the council must sit now and decide on the way forward,” he told NMH on Wednesday.
The decision, delivered last Friday by judge Anne-Doris Hans-Kaumbi, upheld the earlier ruling that Redforce’s contract remained valid pending the resolution of the ongoing dispute.
The court not only rejected the municipality's appeal but also ordered it to pay Redforce's legal costs.
The municipality and its acting CEO, Ignasia Neis, had sought leave to appeal against the ruling delivered on 11 November 2024, which had interdicted the council from unilaterally terminating the contract. However, in the latest ruling, the court determined that the municipality’s appeal was not based on an appealable order and consequently dismissed the application.
Justice Hans-Kaumbi explained that the High Court had not issued a final ruling that determined the parties' rights, making the order ineligible for appeal. She emphasised that the dispute remains open and must still undergo proper adjudication.
The court further ruled that the municipality had failed to provide sufficient legal grounds for an appeal, highlighting that the appropriate recourse would have been to clarify any ambiguities in the earlier ruling.
Ongoing dispute
The dispute centres on the municipality’s termination of its debt collection contract with Redforce, which was initially set to expire on 17 January. However, Redforce has maintained that a “wind-down period” clause in the agreement entitles it to continue services for up to 12 months post-expiry on a non-exclusive basis.
The municipality, on the other hand, argues that the contract was invalid due to being signed outside the statutory 30-day period prescribed under a section of the Procurement Act. Despite this, Redforce successfully obtained an interim court order preventing the termination, which was upheld in the latest ruling.
Redforce claims it has successfully recovered over N$43 million in outstanding municipal debts since its contract commenced in February 2022. The company has also accused the municipality of failing to settle invoices for services rendered in November and December 2024, further complicating the dispute.
Following the municipality’s issuance of a public notice on 31 January formally announcing the termination, Redforce took immediate legal action. The company’s attorneys argued that the notice was “misleading and deceptive,” as it failed to acknowledge the contractual wind-down period.
Redforce contended that the municipality misrepresented the situation to justify its actions. The company argued that the January public notice provided misleading information by instructing residents and businesses not to engage with Redforce regarding outstanding municipal payments, despite the contract still being legally in effect.
The company further demanded immediate access to financial records, including the February age analysis and January payment file, to continue its debt collection operations in accordance with the contractual terms.
Terms of contract
This is not the first time the two parties have clashed in court. The initial legal battle erupted in September 2024 when Redforce was first notified of its termination. Redforce successfully argued that it had not been given an opportunity to present its case before the decision was enforced.
At that time, the municipality listed six reasons for the termination, including allegations of underperformance, but Redforce refuted the claims, citing its N$43 million debt recovery success.
When approached for comment as to whether the Henties Bay municipality would pursue a Supreme Court appeal or adhere to the contractual dispute resolution mechanism, which may include arbitration, mayor Lewies Vermaak said the council will be reviewing its legal position.
“The whole of the council must sit now and decide on the way forward,” he told NMH on Wednesday.
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