Africa-Press – Namibia. THE Oshakati Town Council agreed to sell a prime piece of land to a close corporation of businessman Erastus ‘Chicco’ Shapumba at a “ridiculously low” price of N$2,5 million before the deal was stopped by the minister of urban and rural development, a Supreme Court judge has commented in a judgement of the country’s top court.
The remark by acting judge of appeal Theo Frank was made in a judgement in which the Supreme Court last week set aside the minister of urban and rural development’s decision to not approve the transaction, and referred the matter back to the minister to make a new decision on it.
The court set aside the decision of the then minister, Peya Mushelenga, after finding that he relied on a wrong section of the Local Authorities Act when he refused to approve the sale of the land to Shapumba’s close corporation Mouse Properties Ninety Eight.
Noting that more than seven years have passed since the Oshakati Town Council first called for proposals to develop the town’s Erf 1342 at Oshakati Extension 4, Frank also said the minister should now consider letting the town council make a new decision about the intended sale of the plot of land.
Erf 1342, which is 16 177 square metres in size, is known as the Old Open Market, and is described as being situated in a prime spot at Oshakati.
The Oshakati Town Council in August 2014 called for proposals to develop the property into a commercial business complex, and eventually, in June 2016, decided to accept the proposal of Shapumba’s Mouse Properties Ninety Eight CC.
In July 2016, the council decided the plot would be sold to Mouse Properties for N$2,5 million.
At that stage, the council did not yet have valuations for the piece of land.
On this, Frank said the council did not provide any rational basis for how it determined the price.
Subsequent valuations of the property ranged from N$16,6 million to N$45,5 million.
The council’s price of N$2,5 million was “ridiculously low”, and the fact that Mouse Properties almost immediately paid that amount to the council probably showed it knew it was getting “a real bargain”, Frank said.
After accepting Mouse Properties’ proposal, the town council referred the sale to the minister for his approval.
The council also decided in April 2017 to increase the price of the property to N$3,5 million.
In March 2018, Mushelenga decided to not approve the proposed sale.
Following that decision, Mouse Properties took legal action in the High Court and asked the court to review Mushelenga’s decision and to declare that the council did not need the minister’s approval for the sale.
The close corporation’s application was dismissed in the High Court in February 2020. Mouse Properties then lodged an appeal to the Supreme Court.
The appeal court found that the Local Authorities Act required the minister’s approval for the sale, but that Mushelenga dealt with the matter in terms of a section of the act which was not applicable. As a result, Mushelenga’s decision was set aside.
While stating that the matter has to be referred back to the minister to make a decision afresh, Frank also said if Mouse Properties cannot convince the minister that the council’s envisaged price of N$2,5 or N$3,5 million is reasonable, that alone would justify the refusal of an approval by the minister.
Deputy chief justice Petrus Damaseb and appeal judge Dave Smuts agreed with Frank’s judgement.
Mouse Properties was represented by senior counsel Jeremy Gauntlett, assisted by Frank Pelser, in the appeal, on instructions from the law firm Shikongo Law Chambers.
Thabang Phatela represented the minister.
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