CHIDYAUSIKU CJ: This matter was initially set down on the
Supreme Court roll as an appeal matter. At the hearing of the appeal, the
respondent submitted that the matter raised a constitutional issue of whether
the law of parate executie
violates the access to the courts provision, s 69(3) of the current
Constitution of Zimbabwe (“the Constitution”). Mr Matinenga applied for a referral to the Constitutional Court for
the determination of that issue. The application was granted and the court
issued the following order:
“IT IS ORDERED BY CONSENT THAT -
1. The matter be and is
hereby postponed sine die with
no order as to costs, the reason being that the matter raises a constitutional issue
as to whether the law of parate executie
violates section 69(3) of the Constitution of Zimbabwe.
2. The matter to be heard
by the full Bench of the Constitutional Court.”
The facts of this matter are fairly
simple and straightforward. They are virtually common cause. They are as
follows.
The respondent (the plaintiff in the court a quo and hereinafter referred to as “the plaintiff” for
convenience) entered into a contract of storage with the applicant (the
defendant in the court a quo and
hereinafter referred to as “the defendant” for convenience), in terms of which
she lodged her goods with the defendant. The agreement provided that the goods
were to attract a monthly storage charge and that payment was to be made in
advance. The agreement included as a material term of the contract that if the
storage charges:
“… remain
unpaid for three consecutive months Glens (the applicant) reserved the right to
sell part or all of the goods by Public Auction without notice to defray the
accrued charges”.
The plaintiff
breached the above clause of the agreement. The defendant sold the goods by
public auction. It used part of the proceeds to defray costs and kept the
balance for collection by the plaintiff at her convenience.
The plaintiff, aggrieved by this, approached the High Court for
redress. The plaintiff claimed damages for the loss of her goods and damages
for pain and suffering as a result of the defendant's actions. The
High Court found for the plaintiff and the defendant was ordered to pay
damages in the sum of US$20 000, being the value of the plaintiff's
property, which the defendant had, according to the court a quo, “wrongfully and unlawfully” sold. The defendant was
also ordered to pay damages for pain and suffering in the sum of US$1 500.
The defendant was dissatisfied with
the judgment of the court a quo and
appealed to the Supreme Court. As I have already stated, at the
commencement of the hearing of the appeal the constitutionality of the parate executie clause was raised
and the matter was referred to this Court for determination.
Before considering the
constitutional issues referred to this Court, I wish to make the following
observations on issues which were inadvertently left open by the Supreme Court.
The issues are not constitutional issues. They therefore fall outside the
jurisdiction of this Court.
The defendant appealed against the judgment of the court a quo on the following grounds:
“1. The learned Judge a quo erred in holding that the
Appellant was liable to compensate the Respondent for selling her property by Public
Auction.
2. The learned Judge a quo misdirected himself on a point of
law by finding that the parate executie
did not apply in this matter when in fact the parties upon concluding the
contract had agreed that it shall apply.
3. The learned Judge a quo erred in the exercise of his
discretion in holding that the respondent was entitled to damages in the sum of
US$20 000.00 in circumstances where the respondent had miserably failed to
prove her claim.
4. The appellant will pray
that the appeal be allowed with costs and that the judgment of the High Court
be set aside and substituted in place thereof by an order that the respondent's
claim against the appellant be and hereby dismissed with costs, including costs
of two (2) counsels where two (2) counsels are employed.”
The defendant's argument in simple
terms is that the plaintiff's pleadings establish no cause of action, in that the
claim for damages cannot be founded on a breach of contract. If anything, it
was the plaintiff who was in breach of the contract, which led the defendant to
enforce the contract and sell the goods by public auction in terms thereof. The
defendant further contended that the plaintiff's cause of action could not be
founded in delict, as the pleadings did not set out the requirements for a
delictual action. The defendant's contention appears unassailable.
Mr Matinenga, for the plaintiff,
did not make any meaningful submissions to the contrary. He virtually conceded
the point and predicated his case on the unconstitutionality of the parate executie clause in the
contract.
It is not for this Court to determine issues raised before the Supreme
Court that are not constitutional. Those issues are for the Supreme Court to
determine. The Supreme Court has the final word on those issues. Ideally the
Supreme Court should have determined those issues and thereafter referred the
issue of the constitutionality of parate
executie to this Court if so persuaded.
I now turn to deal with the
constitutional issues raised in this case.
Mr Matinenga, as I have
stated, rested his case on the illegality of parate executie. He submitted that this is a point of law
which can be raised for the first time on appeal. In support of his case,
Mr Matinenga made the following
submissions in para 6 of his heads of argument:
“6. These heads of argument
address the issue of parate execution
in three stages.
Firstly, it
is argued that parate execution is
not of general application. It is limited to a specific type of contract – a
pledge. In this type of contract there is no dispute on the principal
obligation between the creditor and (the) debtor.
Secondly,
and in the event that the court does not find favour with the above argument,
it is argued that, on the facts, the respondent suffered prejudice and that parate execution was inappropriate.
Thirdly,
and lastly, it is argued that the concept of parate execution is outmoded and has no place in modern
jurisprudence and does not pass the test of constitutionality in our law.”
Ms Mahere, for the defendant, submitted that the essence of the plaintiff's
contention is that parate executie
is unconstitutional on the basis that it offends the “access to the courts”
provision of the Constitution and that the plaintiff, in her heads of argument,
made reference to both the former and the current Constitutions of Zimbabwe. She
further submitted that the reference to the Constitution in the instant case is
inapposite because at the time that the parate executie
clause was carried into effect by the defendant, and at the time it was
adjudicated upon, the Constitution had not come into effect.
The issues that arise from these
contrary positions and which fall for determination are –
(1) Whether
or not parate executie offended
the “access to the courts” provision in the former Constitution of Zimbabwe
(“the former Constitution), namely s 18(9), as read with s 16(7), of
the former Constitution;
(2) Whether
or not parate executie offends
the “access to the courts” provision in the Constitution, namely s 69(3)
of the Constitution; and
(3) If parate executie is compliant with the
provisions of both the former Constitution and the Constitution, what is its
extent and whether this Court, using its powers in terms of s 176 of the
Constitution, should outlaw parate executie
on the grounds that it has no place in modern jurisprudence, on the ground that
it is against public policy.
IS PARATE EXECUTIE
COMPLIANT WITH THE PROVISIONS OF THE FORMER CONSTITUTION, NAMELY S 18(9),
AS READ WITH S 16(7)?
The issue of whether or not parate executie complied with the former
Constitution is not, as Ms Mahere
correctly submitted, a new issue. The issue was raised in the case of Nyamukusa v Agricultural Finance Corporation SC 174/94. The facts of the Nyamukusa case supra are that the appellant's farm had been seized and sold
because the appellant had failed to repay a loan. The respondent in the matter
acted pursuant to a contractual clause, which read as follows:
“Should the
borrower commit or be in breach of any of the terms and conditions of this
agreement the Corporation specifically stipulates, as provided in
section 40 of the Act, that it shall have the right in terms of that
section of the Act, after demand by registered letter addressed to the borrower
at his last known address or to the address given by him in his application for
this loan, and without recourse to a court of law, to enter upon the property
hypothecated and to take possession thereof and sell and dispose of the same in
whole or in part as the Corporation may determine always in terms of and
subject to the provisions of the Act.”
The appellant
in that matter challenged the above clause on the basis that it offended the
provisions of s 18(9) of the former Constitution. The court held that the parate executie clause in Nyamukusa's case supra was lawful and permissible in terms of s 18(9), as read
with s 16(7), of the former Constitution.
The plaintiff in casu, as in
Nyamukusa's case supra, seeks to
rely on the “access to the courts” provision set out in s 18(9) of the
former Constitution, which provided:
“18
Provisions to secure protection of law
(9) Subject to the provisions of this
Constitution, every person is entitled to be afforded a fair hearing within a
reasonable time by an independent and impartial court or other adjudicating
authority established by law in the determination of the existence or extent of
his civil rights or obligations.”
The
import of the words “subject to” is to render this access to the courts
provision subservient to other provisions of the former Constitution.
In S v Pillay 1995 (2) ZLR 313 (H) at 315H Chatikobo J interpreted the meaning
of the phrase “subject to” in the following manner:
“The phrase 'subject to' has been
interpreted to mean 'except as curtailed by'.”
See
also Commissioner of Police v Wilson
1981 ZLR 451.
It follows therefore, as Ms Mahere correctly submitted, that the
“access to the courts” provision set out in s 18(9) of the former
Constitution is applicable except as curtailed by other provisions of that
Constitution. In the former Constitution, s 16(7) curtailed s 18(9)
in the following terms:
“16 Protection from deprivation of
property
(7) Nothing
contained in or done under the authority of any law shall be held to be in
contravention of subsection (1) to the extent that the law in question
makes provision for the acquisition of any property or any interest or right
therein in any of the following cases —
(a)
- (c) …
(d) as an incident
of a contract, including a lease or mortgage, which has been agreed between the
parties to the contract, or of a title deed to land fixed at the time of the
grant or transfer thereof or at any other time with the consent of the owner of
the land; …
except so far as that provision or, as the
case may be, the thing done under the authority thereof is shown not to be
reasonably justifiable in a democratic society.”
Thus, quite
clearly, parate executie was
permissible in terms of s 16(7) of the former Constitution.
It is apparent, therefore, that the “access to the courts” provision
enshrined in s 18(9) of the former Constitution applies, except as
curtailed by s 16(7) of the former Constitution which sanctions parate executie.
In the result, I am satisfied that
the “access to the courts” provision enshrined in s 18(9) of the former
Constitution applies, except as curtailed by s 16(7) of the former
Constitution which sanctions parate executie.
The former Constitution did not outlaw parate executie
per se. It was lawful to the extent allowed by s 16(7) of the former
Constitution, which exception covered the facts of this case.
DOES SECTION 69(3) OF THE
CONSTITUTION RENDER UNCONSTITUTIONAL PARATE EXECUTIE?
The issue of whether s 69(3) of
the Constitution renders parate executie
unconstitutional, of necessity raises the issue of whether or not s 69(3)
of the Constitution has retroactive effect and applies to the clause of parate executie that was entered
into, executed and adjudicated upon by the High Court before the
Constitution came into operation. Put differently, does s 69(3) of the
Constitution have retroactive effect?
I have no doubt in my mind that
s 69(3) of the Constitution has no retroactive effect.
In common law
countries, one of the fundamental rules of construction of Statutes is the
presumption against retrospectivity. The right of access to courts or other
lawful tribunals for the resolution of disputes is a substantive right and can
only apply retrospectively where the legislation in question clearly provides
for such a construction.
Ms Mahere argued that statutes must be
presumed not to prohibit or to prevent what has been done in the past. In
support of this submission she cited the case of Jockey Club of South Africa v Transvaal Racing Club 1959 (1) SA 441
(A) and the case of Phillips v Eyre
[1870] LR 6 QB 1 at 23 (as quoted from Francis Bennion Statutory Interpretation (1984) 444), wherein Willes J made the following remarks:
“… the general principle that legislation by
which the conduct of mankind is to be regulated ought, when introduced for the
first time, to deal with future acts, and ought not to change the character of
past transactions carried on upon the faith of the then existing law.”
These authorities are in line with
the maxim lex prospicit non respicit
(law looks forward and not back). The rationale for this presumption under the
common law is that new legislation must not be used to limit the enjoyment of
fruits of legal agreements entered into on the basis of an existing law. To
allow statutes to be interpreted and applied retrospectively would be
tantamount to second-guessing contracts entered into in good faith between two
agreeing parties. Therefore, whenever there is a substantive statute which
seeks to limit the rights that parties already have under a concluded contract,
the presumption should be applied in order to safeguard the legitimate
interests of contracting parties unless this is impossible, regard being had to
the language used in the legislation. In this regard Gubbay CJ had this to say in the case of Nkomo and Anor v Attorney-General and Others 1993
(2) ZLR 422 (S) at 428H-429C:
“It is a cardinal
rule in our law, dating probably from Codex 1:14:7,
that there is a strong presumption against a retrospective construction. See Agere v Nyambuya 1985 (2) ZLR 336
(S) at 338G-339G. Even where a statutory provision is expressly stated to be
retrospective in its operation, it is not to be treated as in any way affecting
acts and transactions which have already been completed, or which stand to be
completed shortly, or in respect of which action is pending or has been
instituted but not yet decided, unless such a construction appears clearly from
the language used or arises by necessary implication. See Bell v Voorsitter van die
Rasklassifikasieraad en Andere 1968 (2) SA 678 (A) at 684E-F; …” .
In England the presumption against
retrospective application of substantive law enjoys an almost hegemonic
position in the corpus of the law. In
In Re Athlumney [1898] 2 QB 547 at
551 (as quoted from Bell and Engle (eds) Cross
on Statutory Interpretation 2 ed (1987)) R S Wright J explained the law in the
following words:
“Perhaps no rule
of construction is more firmly established than this - that a retrospective
operation is not to be given to a statute so as to impair an existing right or
obligation, otherwise than as regards matter(s) of procedure, unless that
effect cannot be avoided without doing violence to the language of the
enactment. If the enactment is expressed in language which is fairly capable of
either interpretation, it ought to be construed as prospective only.”
Similarly, the Canadian approach with regard to the
presumption against retrospective construction and application of the law is
summarised as follows by Professor P W Hogg in Constitutional Law of Canada 3 ed (1992) at para 33.10 as
follows:
“Section 58 of the Constitution Act, 1982
provides that the Act is to come into force on a day to be fixed by
proclamation. That proclamation was issued by the Queen, who came to Canada for
the purpose, at a ceremony in Ottawa on April 17, 1982; and the proclamation
fixed April 17, 1982 as the day upon which the Constitution Act, 1982 was to
come into force. The Charter of Rights accordingly came into force on that day,
and operates only prospectively from that day. A statute (or regulation or
by-law or other legislative instrument) which was enacted before April 17,
1982, and which is inconsistent with the Charter, will be rendered 'of no force
or effect' by the supremacy clause of the Constitution, but only as from April
17, 1982. Action of an executive or administrative kind, such as search,
seizure, arrest or detention, which was taken before April 17, 1982, cannot be
a violation of the Charter, because the Charter was not in force at the time of
the action.”
The
same proposition was stated in R v James; R v Dzagic (1988) 33 CRR 107 at 131-2, wherein Tarnopolsky JA opined:
“It is not an effective way to promote
respect for Charter rights to apply new effects to actions taken before the
Charter came into effect … it is important that actions be determined by the
law, including the Constitution, in effect at the time of the action.”
In
Society for the Propagation of the Gospel
v Wheeler 2 Gall. 105 at 139
(Cir. 1814) it was held:
'Upon
principle, every statute, which takes away or impairs vested rights acquired
under existing laws, or creates a new obligation, imposes a new duty, or
attaches a new disability, in respect to transactions or considerations already
past, must be deemed retrospective …”.
In my view, the presumption against retrospectivity is
a necessary safeguard against the interference with legally obtained rights ex post facto. This stems from the
belief that at some point the State, the parties and third parties are entitled
to rely on a common understanding of the nature of the rights acquired or
transactions completed. See Du Toit
v Minister for Safety and Security and
Anor [2009] ZACC 22; 2010 SACR 1 (CC); 2009 (12) BCLR 1171 (CC) per Langa CJ at para 36. The question which inevitably follows is whether
s 69(3) of the Constitution takes away or impairs vested rights acquired
under existing laws, or creates new obligations, imposes a new duty or attaches
a new disability in respect of already completed transactions.
On the authority of the above cited cases and the
wording of s 69(3) of the Constitution, s 69(3) must be presumed to
have no retrospective effect. Section 69(3) provides as follows:
“69 Right to a fair hearing
(3) Every
person has the right of access to the courts, or to some other tribunal or
forum established by law for the resolution of any dispute.”
There is
nothing in the language of s 69(3) of the Constitution which suggests that
it is to be applied retrospectively, thus overriding the presumption.
Since s 69(3) of the
Constitution is not retroactive, it does not apply to the contract between the defendant
and the plaintiff, which was concluded before the Constitution came into
operation. Therefore the constitutional issue is determined in favour of the defendant.
SHOULD THIS COURT OUTLAW PARATE EXECUTIE ON THE GROUNDS OF
PUBLIC POLICY?
Finally, Mr Matinenga submitted that parate executie should be abolished
as part of our common law on the grounds that it offends public policy. I am not
persuaded by this argument for the following reasons.
Mr Matinenga submitted that this court should reconsider the cases of Aitken v Miller 1950 SR 227; 1951 (1) SA 153 (SR) and Changa v Standard Finance Ltd
1990 (2) ZLR 412 (SC), which cases are to the effect that parate executie is both lawful and constitutional.
Mr Matinenga urged the court to follow the approach adopted by South African
courts in the cases of Chief Lesapo v
North West Agricultural Bank and Anor
2000 (1) SA 409 (CC) and Findevco (Pty)
Ltd v Faceformat SA (Pty) Ltd
2001 (1) SA 251 (NPD), in which cases parate executie
was held to be both unlawful and unconstitutional.
In Chief Lesapo v North West Agricultural Bank supra the Constitutional
Court of South Africa had this to say at p 416C:
“The
judicial process, guaranteed by s 34, also protects the attachment and
sale of a debtor's property, even where there is no dispute concerning the
underlying obligation of the debtor on the strength of which the attachment and
execution takes place. That protection extends to the circumstances in which
property may be seized and sold in execution and includes the control that is
exercised over sales in execution.”
Thus, Chief Lesapo's case supra is authority for the proposition
that parate executie is not only
unlawful but unconstitutional, in that it violated the access to courts right
guaranteed by s 34 of the South African Constitution.
Chief Lesapo's
case supra was followed in Findevco's case supra, where froneman j had
this to say at 256E-G:
“If legislation which allows the
attachment and sale of movable goods given as security without recourse to
courts is unconstitutional, even where there is no dispute about the debtor's
indebtedness, why should the common law allow it? I can see no valid reason why
it should. Section 39(2) of the Constitution applies to the interpretation
of both legislation and the common law. The leading case for upholding the
validity of parate executie
clauses in respect of movables is Osry v Hirsch,
Loubser & Co Ltd 1922 CPD 531. In that case the rule against self-help
was considered unimportant (at 541, but compare Iscor Housing Utility Co and Anor v Chief Registrar of Deeds and Anor 1971
(1) SA 613 (T) at 616H). Lesapo's
case supra tells us that the rule is
of fundamental importance to our Constitution. I consider myself bound by the ratio of Lesapo's case supra in
the present matter.”
The above South African cases
were interpreting s 34 of the South African Constitution, which
provides as follows:
“Access to courts
34. Everyone has the right
to have any dispute that can be resolved by the application of law decided in a
fair public hearing before a court or, where appropriate, another independent
and impartial tribunal or forum.”
A comparison
of s 34 of the South African Constitution and s 18(9), as read
with s 16(7), of the former Constitution reveals that the two provisions
are very different. The South African provision is much wider than the
provisions of the former Constitution. Thus, in terms of the former
Constitution, parate executie
was expressly permitted. Accordingly, the above cited South African cases are
of no assistance when interpreting s 18(9), as read with s 16(7) of
the former Constitution.
I accept, however, that s 34 of the
South African Constitution is very similar to s 69(2) and (3) of the Constitution,
although not couched in exactly the same terms. They are of the same purport. I
also accept that the cases of Chief Lesapo
supra and Findevco supra were interpreting s 34 of the
South African Constitution and are authorities for the proposition that parate executie is unconstitutional
in terms of s 34 of the South African Constitution.
However, these two cases have not
been followed in a number of other South African cases. In some instances
it was held that they were wrongly decided.
In Bock v Duburoro Investments (Pty) Ltd 2004 (2) SA 242 (SCA) HARMS JA was led to state the
following in relation to the constitutionality of parate executie clauses:
“… I find
it difficult to extend the prescription of these statutory provisions by the
Constitutional Court to parate executie
of movables which are lawfully in the possession of the creditor. … since the debtor
may seek the protection of the court if, on any just ground, he can show that,
in carrying out the agreement and effecting a sale, the creditor acted in a
manner which prejudiced him in his rights, the creditor cannot be said to be the
judge in his own cause.”
In that case
the court came to the conclusion that the judgment in the Findevco case supra
finding that the law relating to parate executie
of movables is unconstitutional was wrong.
Similarly, in Juglal v Shoprite Checkers
(Pty) Ltd 2004 (5) SA 248 (SCA) the Supreme Court of Appeal upheld the
validity of a notarial covering bond which entitled the creditor, in the event
of default on the part of the debtor, to take possession of the debtor's
business and assets as security for the debt, to sell the assets and to apply
the proceeds in settlement of the debt as parate executie.
The court a quo had granted an
order perfecting its security. The judge had expressly declined to follow the Findevco case supra. HEHER J commented
at para 9 of his judgment that the refusal was justified by the decision in
Bock supra. He also declared in
para 11 of his judgment that the common law in relation to parate executie does not limit the
right of access to the courts, “nor does it fall short of the spirit, purpose
or the object of the Bill of Rights”.
Again, in SA Bank of Athens Ltd v May van Zyl [2006] 1 All SA 118 (SCA) the
learned judge held at p 11 of the cyclostyled judgment that:
“I am,
however, unpersuaded that parate
execution is per se unconstitutional
or offensive to public policy.”
Thus, in South Africa the cases
of Chief Lesapo and Findevco supra have not been followed in
a number of cases.
Section 69 of the Constitution provides as follows:
“69 Right to a fair hearing
(1) Every
person accused of an offence has the right to a fair and public trial within a
reasonable time before an independent and impartial court.
(2) In the
determination of civil rights and obligations, every person has a right to a
fair, speedy and public hearing within a reasonable time before an independent
and impartial court, tribunal or other forum established by law.
(3) Every
person has the right of access to the courts, or to some other tribunal or
forum established by law for the resolution of any dispute.
(4) Every
person has a right, at their own expense, to choose and be represented by a
legal practitioner before any court, tribunal or forum.”
As I have
already stated, this provision, although worded differently, bears the same
import as s 34 of the South African Constitution. I see nothing in
the wording of both these provisions which explicitly or by necessary
implication renders parate executie
unconstitutional.
A party that is aggrieved by the manner in which parate executie has been carried out by the creditor has the
right to approach the courts to complain about the manner in which he/she has
been prejudiced by the application of parate executie.
The debtor's right of access to the courts remains intact and he is free to exercise
it.
This approach was highlighted in the case of Osry v Hirsch, Loubser & Co Ltd 1922 CPD 531 at 547 where it is
stated:
“It is,
however, open to the debtor 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.”
Similarly, in the case of Changa
supra the court held:
“An
agreement for the delivery of movables by a debtor to a creditor and their sale
by the latter by means of parate
execution is valid and binding subject to the qualification that the creditor
is not entitled to act in a manner so as to prejudice the debtor in his rights.”
In Nyamukusa supra this court adopted the same approach and concluded
that parate executie was both
constitutional and lawful.
I respectfully associate myself with
the authorities that have held that parate executie is not only lawful but
constitutional for the simple reason that the debtor's right of access to the
courts is not taken away by parate executie.
The debtor has unlimited access to the courts to complain about the manner in
which the creditor has performed the contract. To allow the debtor to escape
liability freely and openly undertaken on the basis of parate executie smacks of duplicity and strikes at the heart
of the time honoured principle of the sanctity of the freedom to contract. The
courts should respect the parties' freedom to contract and not seek to rewrite
contracts for the parties.
In the result, it is declared that parate executie is part of our
common law and that it does not contravene s 69(3) of the Constitution as
being contrary to public policy in the context of the right of access to the
courts.
There shall be no order as to costs.
MALABA DCJ: I agree
ZIYAMBI JCC: I agree
GWAUNZA JCC: I agree
GARWE JCC: I agree
GOWORA JCC: I agree
HLATSHWAYO JCC: I agree
PATEL JCC: I agree
GUVAVA JCC: I agree
Mtetwa & Nyambirai, applicant's/appellant's
legal practitioners
Goneso
& Associates, respondent's legal practitioners
