This is an application for the
setting aside of the decision of the Sheriff of Zimbabwe to confirm a sale in
execution in respect of the Remainder of Lot 330 Block B Hatfield of Hatfield
Estate otherwise known as Number 6 Wenlock Road, Hatfield, Harare .
The application is brought in terms
of Order 40 Rule 359(1) of the High Court Rules, 1979.
The applicant is the owner of the
property in issue. The first respondent is the Sheriff of the High Court of
Zimbabwe. The second respondent is Central Africa Building Society. The facts
of this matter are summarised in the applicant's founding affidavit as follows:
Sometime in August 2009, the
applicant borrowed $45,000= from the second respondent against security of a
mortgage bond over the applicant's residential property registered in favour of
the respondent. The applicant failed to repay the loan. The second respondent
sued the applicant and obtained a judgment from this court and a writ of
execution was issued. The amount of the judgment debt was $49,858=57. The
applicant's residential property was attached and the house subsequently
sold by public auction for $81,000=.The second respondent was declared the
purchaser. The applicant filed objections which were dismissed by the Sheriff
of Zimbabwe. On 3 May 2011, the Sheriff of Zimbabwe confirmed the second
respondent as the highest bidder at $81,000=.
The applicant seeks an order
settling aside the sale and an order that the Sheriff of Zimbabwe be directed
to conduct another sale in execution.
The applicant objects to the sale on
the basis that the sale was improperly conducted, and, further, that the
property was sold for an unreasonably low price. The applicant takes issue with
the fact that the property was advertised from 22 February 2011 to 2 March
2011.He contends that this period was too close to the date of the sale
resulting in many people who would have been prospective purchasers failing to
come to inspect the property and thus did not take part in the auction. The
only person that inspected the property and subsequently bought it is the
second respondent.
It was the only bidder.
The applicant further asserts that
the property was inadequately and misleadingly described in the advertisement.
The applicant submitted that the advertisement stated that the property was
held under Deed of Transfer Number 1793 when that is the mortgage bond number.
The main dwelling house is described as having 3 bedrooms whereas it has 5
bedrooms. That the following description of the house was omitted;
1. All rooms are carpeted.
2. There are floor tiles in all the
bathrooms, passages, kitchen and pantry.
3. There are two boreholes and two
water tanks in the property and not one of each as mentioned in the
advertisements.
4. There is a big fowl run with a
capacity to hold 1000 chickens.
5. There is a second house on the
property.
The applicant stated that there is a
second house on the property with five bedrooms and not three. There is no
cottage as advertised. The applicant contends that the advertisement was
inadequate as it omitted to refer to matters which had a direct bearing on the
value of the property and that this potentially affected the interest which
prospective purchasers could have developed.
The applicant further avers that the
price at which the property was sold was unreasonable and substantially lower
than the market price. The applicant engaged his own valuators who placed the
market value of the property at $140,000= and $105,000= as the forced sale
value. The applicant contends that the purchase price of $81,000= is
unreasonably low in relation to the forced sale value as assessed by the
independent valuators.
The second respondent is opposed to
the application and asserts that all the formalities were complied with by the
auctioneer. The second respondent's submissions may be summarised as follows;
(i) The sale was advertised three
times.
(ii) Rule 352 has no time
specifications as to when such advert must be made.
(iii) The advertisements described
the property and its location in detail .They contained sufficient information
required to attract potential purchasers.
(iv) The auctioneer relied on a
report from the valuations pegging the market value of the house at $95,000=
and the forced sale value at $67,000=.
(v) The valuation by
the applicant's valuators is inflated.
(vi) The house was not sold for an
unreasonably low price.
(vii) The debtor was given an
opportunity to bring a buyer offering a higher purchase price and failed to do
so and that the failure is due to the fact that there are no buyers in the
market willing to pay the price suggested by the judgment debtor.
The grounds upon which the applicant
is entitled to have the sale set aside are listed in Order 40 Rule 359(1). Rule
359(1) reads as follows;
“359.
Confirmation or setting aside sale
(1) Subject to this rule, any
person who has an interest in a sale in terms of this Order may request the
Sheriff to set it aside on the ground that -
(a) The sale was improperly conducted; or
(b) The property was sold for an unreasonably low price; or on
any other good ground.”
The courts will not lightly set aside
a judicial sale which has been confirmed as this may discourage people from
participating in judicial sales.
In Mapedzamombe v Commercial
Bank of Zimbabwe & Anor 1996 (1) ZLR 257 (S)…, GUBBAY CJ stated as
follows;
"Before a sale is confirmed in
terms of Rule 360, it is a conditional sale and any interested party may apply
to court for it to be set aside. At that stage, even though the court has a
discretion to set aside the sale in certain circumstances, it will not readily
do so. See Lalla v Bhura 1973 (2) RLR 280 (G) at
283A-B. Once confirmed by the Sheriff in compliance with Rule
360, the sale of the property is no longer conditional. That being so, a court
would be even more reluctant to set aside the sale pursuant to an application
in terms of Rule 359 for it to do so. See Naran v Midlands
Chemical Industries (Pvt) Ltd SC220-91 (not reported) at
pp 6-7."
The onus rests on the applicant to
show that the sale was improperly conducted or that the property was sold at an
unreasonably low price or any other ground.
The requirement to advertise the
sale is provided for in Rule 352 .The Rule reads as follows.
“352.
Day and place for sale: appointment: advertisement: notice to holders of mortgage
The Sheriff shall appoint a day and
place for the sale of property, such day being, except by special leave of the
court, not less than one month after service of the notice of attachment upon
the execution debtor; and he shall cause the sale to be advertised at least
once in the Gazette and in a newspaper circulating in the district in which the
property is situated and in such other manner as he may deem to be necessary.
The sheriff shall also send to each holder of a mortgage over the property, by
registered letter addressed to his last known address, or to his attorney,
notice of the date and venue of the sale.”
The Rule places a duty on the
Sheriff to advertise the property at least once in the Gazette and once in a
newspaper circulating in the district in which the property is situated. The
sale was advertised on three separate occasions being, the 23rd, 27th,
and 2nd of February 2011, over a period of about 10 days. The sale
was conducted on the 3rd of March. The Rule does not specify when the
advertisements must be made in relation to the sale date. Rule 352 places a
duty on the Sheriff to advertise only once.
That was done.
Whether the advertisements were
adequate and proper and sufficiently informed the public of the property being
sold is the next question.
What is implied from Rule 352 is
that the sale must be properly advertised. In Chizikani and Anor v Central
African Building Society 1998 (1) ZLR 371, the court allowed an
application to set aside a sale on the basis that the advertisements were
inadequate. Two advertisements were made in this sale. The first advertisement
listed only the address of the property to be auctioned and the date of
auction. A subsequent advertisement described the type of rooms available and
gave the impression that there was one cottage instead of two. The court dealt
with the question of the adequacy of advertisements and held that:
“An advertisement which inadequately
describes the property is no advertisement at all. It will fail to comply with
the Sheriff's mandate obligation. The purpose of properly describing the property
is not merely to identify it. It is also to inform the public of what which is
being sold, with the aim of attracting the interest of potential purchasers to
the auction…, for it is in the interests of the judgment debtor, and probably
in the interests of creditors, that the property to be sold should obtain as
high a price as possible.”
The court, in that case, remarked
that what must be inserted in the advertisements are the main characteristics
of the property. The court found that the advertisement of the sale was
inadequate as it did not give sufficient details of the nature and
characteristics of the property enabling potential purchasers to get a clear
appreciation of the property. GUBBY CJ emphasized the need for an advert in its
description of the property, to state the address, size of the Stand, type of
improvements or buildings, if any, and any special privilege related to the
property.
In this case, a number of features
of the property were omitted. The anomaly regarding the Title Deed is minor and
not material and could not have affected the outcome of the sale. The main
house is described as having three bedrooms when it has five (5) bedrooms. The
advertisement gives out that there is a cottage when there in actual fact is a
second house with five (5) bedrooms .There are two boreholes on the property.
The advertisement only mentioned one borehole and did not indicate that these
were fitted with tanks. The size and improvements on a property have a bearing
on the value of the property. In this day of epileptic water supplies, it is
important to inform interested parties of the existence of supplementary
sources and substitute water supplies in the form of boreholes. The existence
of two boreholes on a property is likely to generate more interest in the property
than where there is one borehole. The chicken run with a capacity to carry one
thousand chickens was not highlighted.
There is no doubt in my mind that
the advertisement was inadequate. I do not think that the objective of
informing the public of what was being sold with a view to attracting the
interest of potential purchasers to the auction was achieved. The purpose of
advertising is to ensure that all interested parties get to know of the sale.
They must get sufficient notice of the sale. An advertisement in a sale in
execution should give a full and complete description of the property
concerned.
I am not satisfied that this is the
case here.
In Chizikani and Anor v Central
African Building Society 1998 (1) ZLR 371, the court, following the case
of South African Appellate Division in
Messenger of the Magistrate's Court, Durban v Pillay 1952 (3) SA 678 (A), found that the provisions of Rule
352 are peremptory and entitle the applicants to have the sale set aside. The
term “shall cause the sale to be advertised” implies that the advertisement
must be adequate and proper.
I am aware of the sentiments
expressed in Lalla v Bhura 1973 (2) RLR 280 (G)
where the court remarked that;
“One would have expected here that
anyone interested in buying the property would not have been misled by the
statement in the brochure but would have made his own enquiries.”
This approach places a duty on
potential buyers to go to the property and view the property. One has to
consider that the provision is mandatory; a failure by the Sheriff of Zimbabwe
to describe the property adequately or properly invalidates the sale.
The application is allowed.
It will not be necessary for the
court to decide whether the price at which the property was sold is reasonable.
In the result, it is ordered as
follows;
1. That the decision of the Sheriff
for Zimbabwe handed down on 3rd May 2011 under Case No. SS17/2011 to
confirm the sale in execution held on 4th March 2011 in respect of
the applicant's immovable residential property be and it is hereby set aside.
2. That the Sheriff for Zimbabwe is
hereby ordered and directed to conduct another sale in execution in terms of
the Rules of this Court in relation to the applicant's immovable property which
is presently under judicial attachment.
3. That second respondent is ordered to pay the
costs of this application.
