- Court roasts CoW over land affairs
- Ignoring ministerial advice
- Awarding of land without receiving payment
- Preferential treatment for property developers
The City of Windhoek’s (CoW) refusal to heed instructions from two ministers over a controversial land deal has led to a bruising court defeat in which the judge casted serious concerns around the City’s land allocation procedures.
These details have emerged from an ongoing Patriot investigation and court documents from a recently-concluded High Court case in which Judge Boas Usiku found that CoW deals with land in a “cavalier fashion”.
But all this could have been avoided, had CoW heeded to instructions issued by two ministers in 2014 and 2015.
The Patriot can reveal that CoW bluntly refused to follow instructions from former ministers of Urban and Rural Development Charles Namoloh and Sophia Shaningwa to allocate the land to a firm called Quiver Tree Investments 26 that wanted to buy Erf 8413 measuring 5277 square metres by way of private treaty.
In a rather unprecedented move, CoW placed it on tender. At least two developers, who did not want to be mentioned, said CoW seldom puts on tender plots discovered by developers where no interest was initially shown by other parties.
After it was put on tender, the plot was allocated to Zest Investment CC 73.
Namoloh in 2014 told CoW that “council is not handling its land issues on the merits of the applications, transparency and fairness.”
Usiku’s judgment, which he delivered last month, comes at a time when most of the residents in Windhoek feel that land prices is out of their reach and subsequently accused the municipality of not being considerate of the public’s struggles when it comes to acquiring land as well as its failure to take account of the seriousness of the land situation in the country.
In 2016 Zest Investment dragged CoW, former Urban and Rural Development Minister Sophia Shaningwa and Quiver Tree Investment to court after the municipality cancelled the sale of a plot it had previously allocated to the firm.
According to CoW, the property developer failed to furnish a bank guarantee payable against the transfer of the property, which led to the subsequent cancellation of the agreement.
The court, shockingly, heard how CoW granted permission for a plot to be transferred and registered into the name of a property developer without receiving any payment or credible guarantee. Although such privileges are not extended to individuals, it seems some property developers enjoy benefits which ordinary land seekers can only dream of.
Zest Investment only furnished the municipality with a letter of undertaking from its legal team to pay the purchase price of N$8.5 million “subject to availability of funds”.
Zest Investment, according to court documents, asked for an extension of 30 days to secure approval for bank finance after it failed to provide bank guarantee within the prescribed 60 days. CoW on 25 August 2015 rejected the request for an extension and gave a notice to cancel.
On 21 September 2015, CoW received a letter of undertaking in favour of Zest from Ellis Shilengudwa Incorporated(ESI).
Surprisingly, a day later CoW’s Manager for Property Manager Elli Shipiki gave instructions and appointed ESI to transfer and register the plot into the name of Zest.
On the same day, First National Bank Limited’s Commercial Property Manager Margot Ackermann wrote to CoW informing it had approved an amount of N$6.46 million on behalf of Zest Investments to purchase the property.
“The facilities will be made available subject to conditions amongst others but not limited to the registering of a mortgage bond and the transferring of the Erf into the client’s name,” said Ackermann.
The City’s decision to accept a letter of undertaking from ESI was also questioned because “it does not guarantee payment of the purchase price against the registration of the transfer of the property” and the fact that “the letter is from a law firm and not from a bank or financial institution”.
The apparent cosy relationship between CoW and property developers, who have largely been blamed for the high land prices in Windhoek, has created animosity between individual land seekers and the municipality.
The CoW’s decision to endorse the transfer of a property without receiving payment leaves a bad taste in the mouth of land-hungry Windhoek residents who over the years have been subjected to living in backyard flats due to a lack of affordable housing and land to build on.
In his judgement, Judge Usiku found that ESI’s letter of undertaking does not comply with the requirement to provide guarantee because “only a person who has funds available can guarantee payment.”
“I find that the letter of undertaking furnished to the first defendant[CoW] guarantees nothing and is as good as no guarantee was furnished at all,” he said.
In October 2015, CoW’s Strategic Executive for Urban Planning and Property Management Ludwig Narib instructed ESI to put the transfer of the property on hold till further notice.
A month later the CoW Council resolved to cancel the agreement between CoW and Zest Investments and further passed another resolution allocating the property to Quiver Tree following legal opinion submitted to Council on the matter.
Judge Usiku ruled that CoW was right to cancel the agreement between itself and Zest Investment.
CoW has faced legal action over its land dealings in the past which have been seen to favour certain individuals and groups. These land related court clashes over the years have plunged CoW in a dim light.
Cavalier dealings exposed
The clandestine and inconsistent manner in which CoW handles its land affairs was also laid bare during the court proceedings when Shipiki revealed that a practice has been adopted by CoW whereby it accepts letters of undertaking similar to the one provided by ESI as proper instruments for payment of the purchase price.
He said he did so on the strength of the letter of undertaking furnished by ESI.
He further underlined that he accepted the letter of undertaking against that background.
“Mr. Shipiki went as far as saying that in the course of his employment at the CoW, he had received so many letters of undertaking of the kind as the one provided by ESI and were accepted and acted upon. Mr. Shipiki could not give clear explanation why the CoW ultimately decided not to accept and act on the letter of undertaking provided by ESI in respect of the present transaction. All he could say is: ‘this one they did not accept’,” said Usiku.
Zest Investment however maintained that it had complied with its contractual obligations and the CoW breached the terms of the agreement when it resolved to cancel it and that the letter from its lawyers constituted a bank guarantee.
“When Mr. Shipiki accepted the letter of undertaking, CoW through him affirmed the agreement by instructing ESI to attend to the registration of the transfer of the property. Any attempt to cancel the agreement after CoW had elected to affirm the agreement must be seen as unlawful,” argued Zest Investment.
“Dealing with immovable property in such a cavalier fashion amounts to playing ducks and drakes with public assets. It is abdication of the responsibility that the public reposes in the CoW,” charged Usiku in 17-page judgment.
Usiku said he hopes CoW takes remedial action to ensure that the practice it has adopted to accept letters of undertaking or guarantees from legal firms is stopped.
On 3 February 2014, Namoloh wrote to CoW in his capacity as line minister instructing the Council to allocate the plot to Quiver Tree. His instructions were thrown in the dustbin.
When Quiver Tree Investment applied for the land there were no other interested parties, however Council decided put it out on tender which led to other property developers developing an interest in the property. Namoloh described the move as “unfair practice” and indicated that Quiver Tree should be allowed to purchase the property by private treaty as was initially the case. Council’s excuse was that there is a need to draft guidelines for selling land by way of private treaty, however, Namoloh shot it down saying “I am aware of land transactions that Council is currently selling off by way of private treaty despite the fact that Council claim there are no guidelines in the case of the application by Quiver Tree Investments 26.
The matter needs to be reconsidered in favour of Quiver Tree Investment 26 without prejudice, as Quiver Tree Investments 26, has solicited the opportunity and has thus made the offer to purchase Erf 8413. Giving an opportunity to Quiver Tree Investments 26 to make a meaningful contribution to the economic growth of the City Windhoek and to the economic mainstream of the country at large, meanwhile, the investors are aiming towards economic emancipation and empowering themselves through this project as well as meeting government halfway in curbing unemployment,” said Namoloh.
His successor Sophia Shaningwa also made the dispute a priority when she came into office in March 2015.
On 8 June 2015, Shaningwa wrote to Windhoek Mayor Muesee Kazapua informing him that she stands by Namoloh’s decision.
“I therefore reiterate his directives and I am hereby directing that the matter be reconsidered in favour of Quiver Tree Investment 26 without prejudice,” she said.
Shaningwa directed CoW to implement the directive before 30 June 2015. This directive was also flushed down the toilet by CoW.
An act which eventually landed CoW in court.