The Development Bank of Namibia (DBN) is demanding over N$70 million from Rez Student Living Academia, after the luxurious student accommodation defaulted on payments.
In papers filed at the High Court, DBN said it entered into a loan agreement of N$42.9 million in August 2017 with a joint venture firm of Rez Student Living Academia and architect company Claud Bosch Group.
Rez Student Living Academia Managing Director Alfons Kaulinge has also been listed as a respondent, alongside Claud Bosch, the Managing Director of Claud Bosch Group.
The lending of the money, according to DBN, was for property development and working capital purposes. The loan security was a property in Windhoek’s Academia area, erf 719, unlimited suretyship by Kaulinge, then registered as Omata Consultancy Services as well as unlimited suretyship by Bosch and his company.
DBN’s lawyer, Kopplinger Boltman, argued that in October 2018, the parties entered into another restructured written property finance facility agreement, in which DBN would advance a loan for N$56 714 338.66 to Rez Student Living Academia.
The second loan agreement would reportedly finance the development of 31 residential units on the property.
It is the bank’s testimony that the defendants failed to pay amounts due, by way of monthly installments. The bank further acknowledges that the lockdown of the University of Namibia, when Covid-19 struck, which resulted in tenants, students vacating the rental units compromised and reduced the defendant’s capacity and ability to meet the loan obligations.
DBN said this is recognised as an event of default.
“On 7 July 2020, the plaintiff gave the defendants written notice that the loan is in arrears and demanded full payment of the overdue amount by 20 July 2020, failing which it would cancel the loan agreement and enforce its rights herein,” the bank argues.
However, in their heads of argument presented by Senior Counsel Raymond Heathcote and Advocate Geoffrey Dicks, the defendants said they fully paid the initial loan to DBN and are not aware of the second loan agreement.
“The so-called Restructured Property Finance Facility Agreement was not signed by the parties that entered the first one. Therefore, the allegations in the initial and amended actions that the first one was amended, varied or restructured by a substitution or replacement of the second loan agreement was fatal to the first action. This is so because the first one was not validly varied or amended as per the formality requirement as envisaged in the clauses,” the defendants argued.
Judge Orben Sibeya is presiding.
