MAFUSIRE J: In
this country, unless otherwise provided, the noting of an appeal automatically
suspends the execution of the judgment or decision appealed against: Wood
NO v Edwards & Anor 1966 RLR 336 (G) (per LEWIS J). It is the
same in South Africa:Oliphant's Tin 'B' Syndicate vde Jager1912
AD 474 @ p 487; Verkouteren vSavage 1919 AD 183 @ p 184; Malan
v Tollekin 1931 CPD 214; Reid v Godart 1938 AD 511; Levin vFelt
and Tweeds Limited 1951 (1) 213 @ p 217 and Geffen vStrand Motors
(Private) Limited 1962 (3) SA 62.
The party that succeeds in the court of first instance has
to seek the leave of the court to execute the judgment whilst the appeal is
pending. This is a common law rule of practice. In Levin's case above
VAN WINSEN AJ, at p 217F, explained the rule as follows:
“The common law is clear that a notice of appeal, save in
certain exceptional cases, automatically suspends the execution of the judgment
appealed against. No application is necessary to ensure this result. If the
party who succeeds in the judgment against which the notice of appeal has been
lodged wishes to execute upon the judgment, then it is he who is required to
make an application to do so.”
The rationale for the common-law rule isthat there is need
to prevent an irreparable damage from being caused to the appellant. In Reid's
case above De VILLIERS JA said, at p 513:
“Now, by Roman-Dutch Law, the execution of all judgments is
suspended upon the noting of an appeal; that is to say, the judgment cannot be
carried out; and no effect can be given thereto, whether the judgment be one
for money (on which a writ can be issued and levy made) or for any other thing
or any form of relief granted by the court appealed from. …….. The foundation
of the common-law rule as to suspension of a judgment on the noting of an
appeal is to prevent irreparable damage from being done to the intending
appellant, whether such damage be done by a levy, under a writ, or by the
execution in any other manner appropriate to the nature of the judgment
appealed from.”
CORBETT JA put it as follows in South Cape Corporation vEngineering
Management Services1977 (3) SA 534 (A) at pp 544:
“… it is today the accepted common law rule of practice in
our court that generally the execution of a judgment is automatically suspended
upon the noting of an appeal… The purpose of the rule is to prevent irreparable
damage from being done to the intended appellant.”
If the purpose of the rule is to prevent an irreparable
damage from being caused to the intended appellant, the automatic suspension of
the judgment or decision appealed against may equally cause an irreparable
injustice or harm to the respondent who would have been the successful party.
It is him who is prevented from enjoying the fruits of his success in the court
of first instance. SMITH J criticised the rule in Econet (Pvt) Ltd vTelecel
Zimbabwe (Pvt) Ltd 1998 (1) ZLR 149 (HC). He noted that the position was
the other way round in England. In England an appeal does not automatically
suspend the execution of the judgment appealed against. The intending appellant
must apply and show special circumstances for the execution to be stayed. The
rationale for the English position is that a successful litigant should not be
deprived of the fruits of his litigation: The Annot Lyle (1886) 11 PD
114 (CA) andMonk v Bartram [1891] 1 QB 346.
In the Econet case SMITH J. proposed a change in
our law. At p 157 he stated as follows:
“It seems to me that there would be merit in changing our
law on this aspect so as to follow the English system. If a party has obtained
a judgment or order from a court of first instance, then prima facie
that party should be entitled to the benefit of that judgment or order. It
should be for the unsuccessful party to have to seek leave for the judgment to
be suspended if an appeal is noted. That party should be the one required to
show that special circumstances exist which justify the suspension sought. The
system that prevails in Zimbabwe must have the effect of encouraging some debtors
or persons with doubtful claims to appeal simply in order to play for time, as
in this case. In other words, since an appeal automatically suspends execution,
a debtor who wants to delay may as well appeal even if he knows the appeal is
hopeless or even if he knows that he will abandon it. At least it will buy him
time.”
I agree with the learned judge. Our rule in a way
encourages an abuse of the court process.In practice a party that loses the
first round in the court of first instance is less likely to want to press for
the expeditious determination of the appeal,especially as the outcome is
uncertain. Thus given the inevitable and often inordinate delays experienced in
the appeal process, the appellant is often content to let matters drag on and in
the process frustrate the respondent who was the successful party. The
respondent has to wait patiently before he can enjoy the fruits of his success.
The situation can be quite desperate in eviction cases. Where the landlord
obtains an order for the ejectment of the tenant from the rented premises for
which the tenant is not paying rent and the tenant appeals the order the
landlord can be stuck with the intransigent tenant for months on end, even
years, unless he obtains leave to execute.
SMITH J. noted with interest that the situation obtaining
in the English legal system has been adopted in Zimbabwe in maintenance cases.
In terms of s 27 (3) of the Maintenance Act, Cap 5: 09, the noting of
an appeal against a decision of a maintenance court does not, whilst the appeal
is pending, suspend the decision appealed against unless the maintenance court,
on application, directs otherwise.
I too note with interest that the English position has also
been extended to labour matters. The Labour Act, Cap 28: 01, in different
sections, provides for appeals to the Labour Court and for appeals to the
Supreme Court. Section 92E, a 2005 amendment, then provides that an appeal in
terms of that Act shall not have the effect of suspending the determination or
decision appealed against. The Labour Court is empowered, on application, to
make interim determinations on matters pending before it on appeal. In practice
these include applications for stay of execution pending appeal.
SMITH J. in the Econet, case concluded by
recommending the wholesale adoption of the English position. At p 157 of his
judgment he said:
“I would recommend that consideration be given to amending
the law insofar as it provides for the automatic suspension of the execution of
any judgment or order granted by the High Court or the Magistrates Court where
an appeal is noted.”
I support such recommendation.
The present application is a typical application for leave
to execute pending appeal. There was a trial in 2006. The applicant was the
plaintiff. The first respondent was the defendant. The applicant sought
specific performance. It said it had bought a property from the first
respondent. It said it had paid the agreed purchase price. The first respondent
contested the claim. It said there had never been any valid agreement between
the parties or that if there had been one then such agreement had been
cancelled because of a breach by the applicant. At the conclusion of the trial
this court, BERE J, inter alia, granted the order for specific
performance but reserved his reasons. It was only three years later, in
February 2012, that those reasons were made available.
Upon receipt of the reasons for judgment the first
respondent appealed to the Supreme Court. It had applied to the Supreme Court
for the condonation of the late noting of the appeal. Although neither the
application for condonation nor the order of the Supreme Court was placed
before me it was common cause that condonation had been granted.
Slightly over a month after the first respondent had noted
the appeal, the applicant applied for leave to execute. The applicant sought
the same order for specific performance as it had sought at the trial, namely
that the first respondent should be ordered to transfer the property in
question to it failing which the Sheriff for this court, or his lawful
deputy,should be authorised and empowered to do so. The applicant based its
application on the ground that it continued to suffer considerable prejudice by
not having the property registered in its name when it could mortgage it to
raise finance for its business operations. The applicant also attacked the
propriety of the first respondent's appeal. It said the appeal was frivolous
and vexatious, a ploy to buy time and one simply meant to harass the applicant
because it had no prospects of success.
On the other hand the first respondent opposed the
application. It relied chiefly on its grounds of appeal. They were as follows:
(1)
That the learned judge had erred by
holding that the applicant had proved its case on a balance of probabilities;
(2)
That no due weight had been placed on the
fact that the applicant had breached the terms of the original agreement of
sale between the parties;
(3)
That no due weight had been placed on the
fact that there had been no valid and binding agreement of sale between the
parties;
(4)
That the court had erred by not taking due
cognizance of the fact that there had been no resolution by the respective
boards of the parties authorising the sale of the property.
On the question of the lack of merit of the appeal the
first respondent argued, among other things, that the Supreme Court had granted
condonation for the late noting of the appeal on the same facts and that
therefore that court must have accepted that the appeal had prospects of
success.
The applicant objected to the first respondent's inclusion of ground no (4)
above in its ground of opposition on the basis that such ground had not been
part of the issues for trial. Apparently none of the parties' counsel had been
involved in the trial. Mr Hove, for the first respondent, submitted
from the bar that he had perused the trial record and had noted that the aspect
of the lack of board resolutions by either party had been one of the issues for
trial but that the learned trial judge had omitted it in his judgment. However,
Mr Hove conceded that nothing had been placed before me in the present
application to back him up on that point. I shall revert to this aspect later
on in my judgment.
Both parties were alive to the requirements for an
application for leave to execute as they not only dealt with them in the
affidavits but also in argument.
The court has an inherent power to control its own process.
Thus, in the exercise of its wide discretion it can order the stay of execution
of its judgment or order that the judgment be carried into execution. The court
strives to achieve real and substantial justice. In Santam Insurance
Company Limited vPaget (2) 1981 ZLR 132 GUBBAY J, as he then was,
stated as follows, at pp134 - 135:
“As observed by GOLDIN, J., as he then was, in Cohen vCohen
(1), 1979 R.L.R. 184 (G.D.); 1979 (3) S.A. 420 (R.) at 423 B – C, the
court enjoys an inherent power, subject to such rules as there are, to control
its own process. It may, therefore in the execution of a wide discretion, stay
the use of its process of execution where real and substantial justice so
demands. See also Graham v.Graham, 1950 (1) S.A. 655 (T.) at
658. The onus rests on the party claiming this type of relief to satisfy the
court that injustice would otherwise be caused to him or, to express the
proposition in a different form, of the potentiality of his suffering
irreparable harm or prejudice.”
In an application for leave to execute pending an appeal
the court considers the following factors:
(a) The preponderance of equities; that
is to say the potentiality of irreparable harm and prejudice to the applicant
if leave to execute is granted, or the potentiality of irreparable harm and
prejudice to the respondent on appeal if leave to execute is refused;
(b) The prospects of success of the appeal,
whether the appeal is frivolous or vexatious or has been noted not with the
genuine intention of correcting a perceived wrong but merely in order to buy
time;
(c) If the competing interests are equal,
then the balance of hardship to either party;
see Zaduck vZaduck
(2)1965 RLR 635 (GD); 1966 (1) SA 550 (SR); Graham v Graham
(supra); South Cape Corporation v Engineering Management Services
(supra); Fox & Carney (Pvt) Ltd vCarthew – Gabriel (2)
1977 (4) SA 970 (R); Arches (Pvt) Ltd vGuthrie Holdings (Pvt) Ltd 1989
(1) ZLR 152 (H); ZDECO (Pvt) Ltd v Commercial Carriers College (1980) (Pvt)
Ltd 1991 (2) ZLR 61 (H); Econet (Pvt) Ltd vTelecel Zimbabwe
(Pvt) Ltd (supra);
I now turn to consider each of the above requirements in relation to the facts
of this matter.
(i)
PREPONDERANCE OF THE EQUITIES
The applicant's position was that the first respondent had
both the money and the property. It said it was neither unable to develop the
property nor to utilize it for raising mortgage finance because it was still
registered in the first respondent's name.
On the other hand the first respondent argued that it would complicate matters
if in the meantime the property was to be transferred to the applicant. The
applicant would in all probability mortgage the property but only to have the
situation unscrambled again should the appeal succeed. The first respondent put
it this way in its heads of argument:
“Prejudice will be occasioned on the part of Respondent
(appellant) if leave to execute is granted because if an innocent third party
acquires the property or developments are effected on the property then this
will complicate the whole case.”
The first respondent also submitted that ever since the
disputed transaction it had refrained from transferring or selling the property
to any other person or to encumber it in any way and he undertook to keep the
situation like that until the appeal was determined.
Whilst the applicant was able to explain prejudice to itself directly if
execution was not granted and the status quo remained, first respondent's
concern was only in respect of potential third parties to whom the property
might potentially be sold or mortgaged by the applicant should it get transfer
whilst the appeal was pending. On this score I consider that a preponderance of
the equities favour the applicant. However, I cannot identify such harm to
either party as would be irreparable should execution pending appeal be granted
or refused.
(ii)
THE PROSPECTS OF SUCCESS ON APPEAL
Mr Hove, for first respondent, argued strenuously
that the fact that the Supreme Court had granted first respondent's application
for condonation in which it necessarily had to deal with its prospects of
success, must mean that the superior court had been satisfied with the merits
of the appeal. However, I have considered it quite unsafe to rely on this
argument. There was nothing placed before me to show what material had been
placed before the Supreme Court for the condonation application. The Supreme
Court judgment, if any, was not producedeither. It would be presumptuous to
hold as fact that the Supreme Court was satisfied that the appeal had prospects
of success.
I have carefully analysed the judgment of BERE J which the
first respondent has appealed against.In ground no 2 of its notice of appeal
the first respondent refers to a breach of the agreement by the applicant.
However, I consider that such a breach, if indeed there was, would have had no
bearing on the outcome of the case. The breach would have been an immaterial
factor. Whatever initial agreement there had been between the parties it had
undoubtedly been novated subsequently. A new agreement had come into being. The
applicant had paid the purchase price in terms of the new agreement. The first
respondent's own lawyers, evidently upon instructions from the first respondent
itself, and evidently upon being satisfied of the payments by the applicant,
had not only tendered transfer of the property to the applicant and had not
only raised a pro forma invoice for the transfer fees, but had also gone to
actually receipt the payment. That was the most telling piece of evidence which
was common cause and which tilted the scales of probabilities heavily in favour
of the applicant. I do not see the appeal court upsetting this finding.
First respondent's third ground of appeal is also without
merit. From the analysis of the evidence by the trial judge the conclusion
could not have been anything other than that there had been a valid agreement
between the parties that had been successfully consummated. It was manifestly
an afterthought that the first respondent was trying to shift the goal posts on
the question of interest. It is quite evident that the first respondent had
wanted to pass onto the applicant the whopping rate of interest of 600% which
it was allegedly being charged by its own bank but in an unrelated transaction.
It was undoubtedly the applicant's refusal to accept this rate of interest,
well after it had paid the purchase price in full, that the first respondent
had then turned around and had refused to pass transfer, alleging, a breach of
the agreement by the applicant. Again I do not see the appeal court upsetting
the trial judge's findings on this aspect.
First respondent's fourth ground of appeal, namely that the
court had failed to consider that the agreement of sale had not been sanctioned
by the boards of directors of both parties, is frivolous and, in my view,
opportunistic. If the aspect of the board resolutions had been identified as
one of the issues for trial it surely would have been listed in the joint
pre-trial conference minute. Almost at the beginning of his judgment BERE J
mentioned that the matter had been referred to trial at the pre-trial
conference held before KUDYA J and that there had been only four issues for
trial. Those had been listed as follows:
(1) Whether or not there had been a valid and
binding agreement of sale between the parties,
(2) If there had been a valid agreement of
sale, had the plaintiff breached the agreement of sale such as to enable the
defendant to cancel?
(3) Was the plaintiff entitled to take transfer
of the property into their name?
(4) What order as to costs was just and
equitable?
The trial court could not concern itself with an issue
which had not been referred to trial, if at all it had been raised as an issue.
At the hearing Mr Hove submitted from the bar that
before filing the notice of appeal he had perused the record of proceedings and
had noted that the aspect of the board resolutions had been an issue for trial.
However, when I queried why such evidence had not been placed before me in this
application, no plausible explanation was given.
I am satisfied that the appeal has no prospects of success.
I see no justification for the applicant to wait for the determination of the
appeal before it can enjoy the fruits of its success in the trial court. In the
premises the application for execution pending appeal is hereby granted with
costs. I make the following order:
(a) Execution of the judgement obtained
in this court in HC1140/07 on 6 February 2012 is hereby granted pending the
determination of the appeal to the Supreme Court in SC67/12.
(b) The respondents are hereby ordered to
effect transfer of ownership of Stand 4 of Subdivision B of Prospect to the
applicant and the first respondent is hereby ordered and directed to sign, or
cause to be signed, all the necessary transfer documents within fourteen (14)
days of the date of this order failing which the Sheriff for Zimbabwe, or his
lawful deputy, shall be authorised and empowered to sign any such documents.
(c) The costs of this application shall
be paid by the first respondent.
C Kuhuni Attorneys, legal
practitioners for applicant
TK
Hove & Partners,legal practitionersfor
first respondent
