MTSHIYA J: This is an application for a relief based on
the principle of parate executie (i.e summary execution). The applicant seeks the following
relief:-
(i)
That
the applicant, in terms of the agreement signed by the parties on 22 January
2010, be allowed to attach and sell in execution, two Renmson Refrigerator cold
rooms together with the compressors as spelt out in the agreement of the
parties.
(ii)
That
the messenger of court be allowed to carry the execution and such costs of
execution be levied on the respondent.
(iii)
That
the respondent pays costs of this application at an Attorney and client scale.
The background to the
relief sought is as follows”:
In
2009 the applicant supplied the respondent with flour worth US$7 500 (Seven
thousand five hundred United
States dollars).
Upon failure to pay the applicant
for the flour, the respondent pledged its refrigerator
and coldrooms for the debt. The pledge agreement, signed by both parties
on 22 January 2010, provides as follows:
“AGREEMENT TO PLEDGE
made and entered into by and between
BRIGHTLAND FARMING P/L T/A as Q-TEES,
(Hereinafter referred to as 'THE PLEDGOR')
and
CEPRAT FARMING P/L
(hereinafter referred to as
'THE PLEDGEE')
WHEREAS the parties herein have
agreed to enter into this pledge agreement.
AND WHEREAS the parties have agreed
to reduce the terms and conditions of this agreement into this document as
follows:
“1. The parties have agreed that Q-tees owe
the pledge US7 500 arising from flour supplied to the PLEDGOR.
2. The PLEDGOR undertakes to settle USD 5
000 by 15th February and the
balance of USD 2 500 by 28
February 2010.
3. The Pledgor herein pledges the following
movable assets to the Pledgee
as security for the debt;-
3.1. Two Renmson Regrigerator Coldrooms.
3.2. One coldroom is non functional and the
other is working.
3.3. Each of the coldroom has a compressor
3.4. It is agreed that the coldrooms are
valued at USD9 000.
4. The parties have agreed that in the
event of failure of payment by the Pledgor,
CEPRAT FARMING shall
proceed to attach and sell the coldrooms to recover
their money. This shall be done immediately”.
It will be noted from the above document
that final payment was due on 28 February 2010. That did not happen and hence
this application which was filed on 9 April 2010.
In
line with the principles of parate
execution, the applicant wants this court to compel the respondent to honour
clause 4 of the pledge agreement. The
applicant submitted that in approaching the court it did not want to take the law into its own hands and
realises that in terms of the law it is the sheriff or his/her deputy who is
authorised to execute orders/judgments of this court. Furthermore, the applicant submitted that the
agreement relates to the delivery of movable assets. To that end the applicant correctly relied on
Change v Standard Finance Limited 1990(2) ZLR 412 (SC) where the
Supreme Court said the following:
“It was settled in Osry v Hirsh, Loubser and Co Ltd 1922
CPD 531 that as far as movables are concerned an agreement for their delivery
to the Creditor and sale by him by means
of parate execution is valid and
binding. That decision was approached and followed by BEADLE J (as he then was)
in Aitken v Miller 1951 SA 153 (SR), 1950 SR 227. The recognition
extended under the civil law to such agreements is subject , however, to the
qualifications expressed at p 547 of Osry's case (supra) in these terms;
'It is however, open to the debitor
to seek the protection of the court if, upon any just ground he can show that
in carrying out the agreement and effecting a sale, the creditor has acted in a
manner which has prejudiced him in his rights”
In other words, the creditor,
although entitled to parate executie,
is not entitled to
act in a manner that prejudices the rights of
the debtor.
Notwithstanding
the decision in Sakala v Wamambo &
Anor 1990(2) ZLR 263 (HC) where it was held that “the law regarding parate execution is not in accordance
with sound jurisprudence and require fresh examination”, the above remains the
law in this country.
In
my view, the pledge agreement, quoted in full at pp 1 and 2 of this judgment,
constitutes clear consent by the respondent to parate executie. Accordingly once the existence of the document is
established and found to be authentic or genuine, the applicant's case must
succeed.
It
was the applicant's submission that the application procedure followed was
correct because there were no material disputes of fact in the case.
The respondent was of the view that
in order to execute on the basis of the pledge agreement the applicant ought to
obtain a judgment first authorising the sale of its (the defendant's) property.
The
respondent also alleged that the pledge agreement was not signed freely and
voluntarily. The Managing Director of
the respondent, who signed the agreement, states the following in the opposing
affidavit:
“i) While it is admitted that there was a
document that was signed, I need to highlight that the document was not signed
freely and voluntarily as I was under a great deal of undue influence and
pressure. This becomes vividly apparent
if one looks at paragraph 4 of the which literally ousts the jurisdiction of
this Honourable Court and it gives the Applicant power to resort to self help
by allowing him to “attach and sell” immediately the pledged property. I am advised by my legal practitioners that
such an agreement which outs the jurisdiction of the courts is unlawful and I
believe the advise to be correct. The
agreement is therefore not enforceable
ii)
In
the normal circumstances, I could not accept to sign a document in terms of
which I had actually contracted out of my rights. The reason was that the Applicant's officials
had come to my place of business and made a lot of threats and in fear of my
life and limb, I ended up succumbing to their demands that I should sign the
document. I signed it against my
will. It was signed at the police station
with the threat of incarceration.
iii)
There
being no judgement, the Deputy Sheriff and not the Messenger of Court cannot
make an attachment and thus the application should fail on an attorney scale
because it is misconceived and a waste of this court's time”.
The respondent further
argued that the applicant had not proved the purchase by it of flour
worth USD 7 500-00 and in any case,
it was urged, the property allegedly pledged was worth much more than the
applicant's claim.
Notwithstanding acceptance by our courts of the law relating to
parate executie, it
should always be borne in mind that
summary execution is a drastic remedy. In Sakala (supra) SANSOLE J said:
“In my view summary execution is a
drastic remedy which a pledgee is able to extract from a pledgor because of his
advantageous position over the pledgor. It is tantamount to taking the law into
one's own hands. Consequently such a provision in an agreement should be
construed strictly. This is done “in order to protect debtors and to prevent
creditors taking undue advantage of the impecunious position of the debtors”. (See…
Osry's case at p 541). Speaking for myself Shylock may have his pound of flesh
but without any drop of blood. The law must not countenance any prejudice which
is caused by a pledgee who is in such an advantageous position”.
In casu, if the order sought were to be
granted, the court will have accepted that the respondent indeed owed the
plaintiff the sum of USD7 500-00. This
court can only arrive at that conclusion by way of accepting the pledge
agreement as having been entered into freely and voluntarily. Once the court takes that position, then
there would be no reason for it to deny the applicant the relief it seeks.
The applicant has approached this court on the understanding
that the debt is accepted/
acknowledged by the respondent
through the pledge agreement and hence the need to be granted authority by this
court to execute against the pledged assets.
The applicant is therefore not asking this court to decide on whether or
not the respondent owes it USD7 500-00.
That aspect distinguishes this application from one for summary judgment
brought in terms of r 64 of the High Court Rules. The applicant's approach to
this court is in line with sentiments expressed in SA Bank of Athens Limited v May Van
Zyl 431/03 (Supreme Court of Appeal of South Africa). It was, in that
case, stated as follows:
“In summary, the common law, insofar
as stipulations for parate execution are
concerned, is that stipulations, which are not so far-reaching as to be
contrary to public policy, are valid and enforceable; that, as a matter of
practice, creditors seeking to enforce such stipulations take the precaution of
applying for judicial sanction before doing so; and that the debtor can avail
himself of the court's assistance in order to protect himself against prejudice
at the hands of the creditors”
In casu the issue was not to
prove a claim but to enforce an agreement. All the applicant seeks is judicial
sanction to deal with the pledged assets.
In its submissions the respondent correctly states that “an
application should stand or
fall on the basis of its founding
affidavit”. Apart from what I quoted at
pp 3 and 4 in this judgment as having been said by the respondent's Managing
Director in the opposing affidavit, there is nothing more before me to support
the allegation that the pledge agreement was not signed freely and
voluntarily. It is alleged, that threats
were made at the respondent's place of work and at the police station. One would have expected independent evidence
in the form of supporting affidavits.
None were submitted. The alleged
threats were supposedly made on or before 22 January 2010. The respondent only found it necessary to
reveal the threats three months later i.e on 28 April 2010. If there were indeed any threats, same would
have long been reported to the police. The
respondent knew where the police station was. He says he had been there.
Accordingly my finding is that it is most improbable that any
undue influence and threats were ever used to force the respondent to sign the detailed
pledge agreement.
It was also
argued that the doctrine of parate executie
did not apply in casu because
coldrooms are fixed to buildings and
therefore become part of the immovable property. That submission does not find support from
the opposing affidavit. However, I also
do not agree that a coldroom necessarily becomes part of the immovable
property. A coldroom can be stationed/fitted in a building and remains capable
of being detached/removed from a building.
It is an identifiable, independent and movable asset that can be bought
separately. It is therefore, with respect to this case, executable. The assets were identified in detail and set
aside to meet the debt by their owner, namely the respondent in casu.
It is trite that a judgment creditor
can only execute to the extent of his/her claim. Accordingly if the executed assets realise
more than the claim, the balance remaining upon satisfying the judgment
creditor's claim, will always be for the credit of the judgment debtor. In view of the foregoing, and taking a robust
approach to this case as I believe I must do, I am unable to accept that there
are material disputes of facts to warrant trial. Accordingly the relief sought accords with
the principle of parate executie. The application, in my view, has merit.
I
therefore order as follows:
(i) That the respondent be and is hereby
ordered to pay the applicant the sum of US$7
500
(ii)
That
assets pledged by the respondent in the agreement signed by the parties on 22
January 2010, namely two Renmson Refrigerator cold rooms together with the
compressors, be and are hereby declared executable for the purposes of
satisfying the amount referred to in (i) above.
(iii)
That
the messenger of court be and is hereby authorised to carry out the execution
envisaged in (ii) above and that costs of execution be levied on the respondent;
and.
(iv)
That
the respondent be and is hereby ordered to pay costs of this application at an
Attorney and client scale.
Mtetwa & Nyambirai, applicant's legal practitioners
Madanhi, Mugadza & Co. Attorneys, respondent's legal practitioners
