MAKONI J: The applicant approached this court seeking an
order in the following terms
“It is hereby ordered that:
1. The sale in execution of
stand Number 9876 of Ruwa, concluded under case number MC 6022/07 be and is
hereby set aside
2. That Stand Number 9876 of
Ruwa be unconditionally delivered to the applicant.
3. Respondents to bear costs
of suit on an attorney-client scale.”
The background to the matter is that, prior to the sale in
execution in issue (sale), the applicant was the owner of Stand No. 9876 of
Ruwa (the property). It would pay rates for the property to the first
respondent through bank deposits into the first respondent's bank account.
On 10 September 2007 the first respondent instituted proceedings in the
Magistrate's Court under Case No. 6022/07 claiming arrear rates against the
applicant. The summons were served on a vacant and underdeveloped stand
which is the property in issue. As a result the matter was not
defended. The first respondent proceeded to obtain default
judgement. Pursuant to the judgement, a sale in execution of the property
took place at which the second respondent purchased the property. The
sale was confirmed on 17 June 2008. The applicant became aware of the issue
when it sent its representative to pay rates to the first respondent on 28 July
2008. The applicant applied for the rescission of the default judgement
and it was granted. It then proceeded to file its plea in the main
matter.
The applicant's basis for seeking the order is three
pronged. Firstly it avers that as the judgement and the warrant of
execution on which the sale in execution was founded had been set aside, the
basis for the sale had fallen away. Secondly, it avers that the sale in
execution could not and cannot give title to the second respondent as it was
premised on a judgement which has since been set aside. Thirdly, it is
contended that the first respondent's conduct in obtaining the default judgement,
warrant of execution and attachment and consequently the sale amounts to a
fraud.
The first respondent challenges the application on the
basis that the applicant has not established grounds in terms of Order 26 of
the Magistrate's court, Civil Rules (Rules) for the setting aside of the state.
The second respondent challenges the application on the
same basis and further contends that the applicant's remedy would be to obtain
damages for wrongful execution. It also contended it was an innocent purchaser.
The applicant formulates the issues for determination in
its Heads of Argument, as follows
“ a) whether or not the sale in execution was valid, or
founded upon a just cause or valid cause of action so as to found a proper sale
in execution?”
(b) whether or not the sale in execution can stand after
the basis upon which it was founded has been rescinded or set aside”.
(sic)
Mr Tandi submitted that the default judgement was
founded on a non-existent cause of action. This is based on the averments
by the applicant that it was actually in credit when first respondent issued
summons for arrear rates. There was therefore no cause of action
justifying the grant of the default judgement. He referred the court to
the case of Ngani v Mbanje 1988 (2) SA 649 (25) where it was
held that if there is no cause of action, then a judgement pronouncing that a
non-existent cause of action exists, is void and of no effect. He also made
reference to Joosub v JI case SA (Pty) Ltd 1992 (2) SA665 W
at 679 D-E where MCCALL J stated
“In my view, if a purported sale in execution by the Deputy
Sheriff of the Supreme Court is nullified for lack of compliance with statutory
formalities, it court conters no title upon those who purport to purchase the
property and the owner may recover his property by means of rei vindicatio
unless possibly, he is estopped from doing so. In the present case there
was no attachment such as required by r 46(3) before there can be a sale in
execution and accordingly there was no valid sale in execution. ---”
On the second issue, Mr Tandi submitted that the
default judgement leading to the sale was rescinded.
As regards the bona fides of the second
respondent, for Mr Tandi conceded that the second respondent was a bona
fide purchaser but went on to argue that the sale was invalid. He
referred to the case of Katsande v Katsande HH113/10 where it
was held that when an act is a nullity, the innocence or otherwise of the other
party to the act is of no assistance.
Ms Chimombe, for the first respondent, submitted
that the applicant had failed to lay a basis for the sale to be set aside as is
provided for in Order 26 r7 (15C) of the Rules. She further
submitted that the issue of whether there was a cause of action or not is still
to be determined by the Magistrate Court and this court cannot interfere with
those proceedings by making pronouncements of that issue.
Mr Uriri for the second respondent, submitted that
the juristic act which the applicant wants set aside is an act provided for in
the Magistrate court rules, undertaken by the Messenger of Court. The
Rules provide for a procedure to set aside the sale. No explanation had been
given why the procedure was not followed. As regards the second issue, he
submitted that at the time of the sale, there was a valid order which was given
effect to. The applicant's remedy would be to seek damages for wrongful
execution.
Mr Tandi, in reply, indicated that r 7 (15C)
applied where the sale had not been confirmed. That is why the applicant
had approached the court in terms of common law.
Mr Tandi was not very clear on which common law
principle he was relying on. It is also not clear from the founding
affidavit and in the Heads of Argument no wonder why the respondents challenged
the application inter alia, on the basis of non-compliance with rules.
Issue No. 1
The issue is whether or not the sale in execution is valid or founded upon a
just cause. I would want to agree with the submissions made by Mr Uriri.
As at the time when the sale was conducted, there was valid court order which
could and was given effect to by the Messenger of Court. The sale was done
under the sanction of a judicial process. In my view it was therefore valid.
I also agree with the positions of the first and second respondent regarding
the question of existence or otherwise of the cause of action. The
applicant argues that the first respondent obtained a judgement upon a
non-existent cause of action. It attaches to its founding affidavit some
proof of payment. The first respondent disputes these assertions.
It is not for this court to determine whether the applicant does owe the
respondent or not. It would be interfering with the proceedings which are
pending before the Magistrate's Court if it were to make pronouncements on the
issue.
The case of Mgani supra cited by the applicant does not take its case
any further. In that that case, the court made a pronouncement that there
was no cause of action at the time proceedings in that matter were instituted.
I therefore went on to hold that the judgment was nullity and that no valid
title can be passed to the purchaser in a sale in execution held pursuant to
such judgment. In casu no court has made such a finding, that
there was no cause of action in the action instituted by the first
respondent. The fact that the judgement was rescinded does not
necessarily mean that there was no cause of action in the first place. It could
be the issue of the manner of service.
Earlier on in the judgement, I deliberately quoted extensively the relevant
part, referred to by the applicant, in Joosub's case supra. The
aim was to show that the case is clearly distinguishable from the present one.
In Joosub's case the sale in execution was declared a nullity for lack of
compliance with statutory provisions. Incasu the applicant submitted
that it was not impurning the sale in terms of the Rules but in terms of common
law. The case does not therefore assist the applicant.
Issue No 2
Whether or not the sale in execution can stand after the basis upon which it
was granted has been rescinded. The applicant is not disputing that the
second respondent is a bona fide innocent purchaser. It
however asks whether the bona fides of the second respondent would validate
a sale in execution the basis of which is a nullity and or has been set aside.
I have already made a finding that no court has made a pronouncement regarding
the existence or otherwise of a cause of action in this matter and whether the
judgment is a nullity or not. As to whether the sale can stand after the
basis has been set aside, the answer can be found in Kanonyangwa v Messenger
of Court & Ors 2007 (1) ZLR 124 (S) at 129 F-130 A-C.
“What presents itself in the
final analysis is a situation where, on the one hand, there is a judgment
debtor who was aware of the impending sale of his property by public auction,
even though some requisite pre-sale formalities concerning advertisement of,
and the service of certain notices concerning, the sale, were not observed by
the relevant officials.
Against this, is the situation
where:
(i)
the sale by public auction was successfully conducted and the highest bidder
declared;
(ii)
the sale was then confirmed by the magistrate as required by the rules of the
court;
(iii)
the said highest bidder – the second respondent in casu – in good
faith took transfer of the property after duly paying the purchase price and
other related charges like auctioneers' fees, council rates and conveyancing
fees; and
(iv)
the proceeds of the sale were paid to the judgment creditor, that it,
UDC.
Added to all this, is the fact
that the sale in question took place some three to four years ago.
Given the situation outlined
above, the determination of this dispute, in my view, requires that the
interests of the appellant on one side, be balanced against those of the
respondents, on the other. In other words, the case must be determined on
the basis of equities and balance of convenience. This is what I shall
proceed to do.”
Incasu the sale in question was confirmed although the second
respondent had not yet taken transfer at the time of hearing. It was in the
process of doing so. As expounded in its papers, the second respondent
purchased the property in question together with the adjacent properties for
commercial purposes. The balance of equities favour the second
respondent. On the one hand, the applicant did not do enough to protect its
rights. It discovered that its property had been sold, on the strength of
a default judgement, on 15 June 2008. It only filed the present application on
27 September 2010. The law protects the vigilant and not the sluggard. In
any event it had not done anything to improve the property since it purchased
it in 2001.
In view of the above I will make the following order
(1) The application is dismissed.
(2) The applicant to pay the respondent's
costs.
Kantor& Immerman,
applicant's legal practitioners
Magwaliba & Kwirirai,
1st respondent's legal practitioners
Dube,
Manikai & Hwacha, 2nd respondent's legal
practitioners
