RedForce loses N$9.2 million claim against Rundu council

The Windhoek High Court has dismissed a N$9.2 million claim by RedForce Debt Collection against the Rundu Town Council, ruling that the local authority did not abandon its debt collection agreement.

Judge Orben Sibeya said RedForce failed to prove that the council’s actions showed a clear intention to repudiate the contract.

Instead, the court found that RedForce repeatedly failed to meet its monthly debt collection target of N$5 million, a breach the council had formally raised and asked the company to correct. “When this matter is stripped to the bare bones,” Sibeya noted, “what comes out… is that there was consistent failure by the plaintiff to meet its monthly collection target”.

RedForce had claimed that council members actively undermined its work, refused to provide necessary support and allegedly encouraged residents not to cooperate between May 2021 and November 2022.

According to RedForce, this conduct made it impossible to meet its agreed monthly debt collection target of N$5 million and amounted to a breach of the agreement.

The agreement required the company to collect municipal debts older than 60 days on behalf of the council, as well as gather data from residents of Rundu. In return, council was reportedly expected to provide support to enable the company to fulfil its mandate.

Dismissed with costs

The court, however, rejected these arguments. It found that the council had provided reasonable assistance as required and that remarks made by individual councillors could not be considered official council actions. Sibeya also ruled that RedForce’s repeated failure to meet targets constituted a material breach of the agreement.

RedForce’s claim of N$5.1 million for lost debt collection income and N$4.1 million for data collection was therefore dismissed with costs. The ruling ends the company’s legal battle to hold the Rundu Town Council liable for the alleged contract violation.

The company terminated the contract in February 2023, claiming it had collected approximately N$91 million on behalf of the council during the subsistence of the agreement.