The
applicant is seeking an order for the suspension of the sale in
execution of Stand 652 Bluffhill Township, 12 of Lot L Bluff Hill
measuring 4,516 square metres.
The
background to this application is that Achs Logistics (Private)
Limited secured an overdraft facility from the respondent. As
security for the facility, Stand 652 Bluff Hill Township, 12 of Lot L
Bluff Hill was mortgaged. Achs Logistics (Private) Limited
subsequently defaulted in servicing the facility. The respondent
instituted proceedings and obtained default judgment against Achs
Logistics (Private) Limited and the applicant.
The
chamber application is not backed by a supporting affidavit. Instead,
there is a statement signed by the applicant in his capacity as
execution debtor. In that statement it is stated that the property
that was attached is occupied by the applicant and his family. A list
of the occupants is given. It is claimed the occupants will suffer
great hardship as they do not have an alternative dwelling. Some of
the occupants are attending school and would need 'massive'
relocation. It is further explained that Achs Logistics (Private)
Limited failed to pay the amount claimed because it is owed money by
the Reserve Bank of Zimbabwe. The applicant offers to settle the
judgment debt in instalments of US$1,500= per month commencing in
July 2015.
In
an opposing affidavit deposed to by Webster
Nyamuripa,
on behalf of the respondent, it is averred that the applicant cannot
seek the present relief when the consequences of mortgaging a
property are known. He further contends that with such risk being
obvious this application is disguised to seek rescission of judgment.
Lastly, it is averred that the amount being offered in settlement has
not been paid.
Counsel
for the applicant submitted that the applicant has always been
desirous of fulfilling his obligations as surety. The applicant did
not contest the suit giving rise to the default judgment because the
amount claimed by the respondent was owed. Commenting on Rule 348, he
submitted that it is meant to ameliorate hardship that may be visited
on a family when a dwelling is attached. He further submitted that it
is clear that if the amount claimed by the Reserve Bank of Zimbabwe
is paid, the applicant will be able to discharge the judgment debt.
Counsel
for the respondent submitted that the debt in issue arose in 2010. It
has nothing to do with the Reserve Bank of Zimbabwe. It was rolled
over, and, in December, the applicant promised to dispose of a Stand
and use the proceeds to settle the debt. In 2013 only two payments
were made.
Counsel
for the respondent further submitted that the requirements for
successfully invoking Rule 348 are:-
(a)
Whether or not the payment proposal being made is reasonable.
(b)
Whether or not the applicant will suffer great hardship.
In
support of her submissions, counsel for the respondent made reference
to the decisions in African
Banking Corporation of Zimbabwe t/a BANCABC v PWC Motors & Ors
HH123-13; Masendeke
v CABS
2003 (1) ZLR 65 (H); Priscilla
Meda v Homelink (Pvt) Ltd
HB195-11.
A
perusal of the file giving rise to the default judgment (HC1124/14)
shows that the plaintiff cited Achs Logistics (Private) Limited and
the present applicant as defendants. Summons and declaration were
served on the applicant on 26 April 2014. No appearance to defend was
entered by both defendants.
When
Achs Logistics (Private) Limited secured an overdraft facility from
the respondent it offered security in the form of Stand 652 Bluff
Hill Township 12 of Lot L Bluff Hill which is registered in the
applicant's name. The applicant represented Achs Logistics
(Private) Limited in the transaction.
The
judgment debt is US$196,492=57 together with interest at the rate of
42% per annum. The default judgment also ordered that Stand 652 Bluff
Hill Township 12 of Lot L Bluff Hill is specially executable.
Order
48 Rule 348A(5e) of the High Court Rules provides that:-
“Without
derogation from subrules (3) to (5), where the dwelling that has been
attached is occupied by the execution debtor or members of his
family, the execution debtor may, within ten days after the service
upon him of the notice in terms of Rule 347, make a chamber
application in accordance with subrule (5b) for the postponement or
suspension of -
(a)
The sale of the dwelling concerned; or
(b)
The eviction of its occupants.”
Then
Rule 348(5b) provides that:-
“If,
on the hearing of an application in terms of subrule (5a), the judge
is satisfied -
(a)
That the dwelling concerned is occupied by the execution debtor or
his family and it is likely that he or they will suffer great
hardship if the dwelling is sold or they are evicted from it, as the
case may be; and
(b)
That -
(i)
The execution debtor has made a reasonable offer to settle the
judgment debt; or
(ii)
The occupants of the dwelling concerned require a reasonable period
in which to find other accommodation; or
(iii)
There is some other good ground for postponing or suspending the sale
of the dwelling concerned or the eviction of its occupants, as the
case may be;
the
judge may order the postponement or suspension of the sale of the
dwelling concerned or the eviction of its occupants, subject to such
terms and conditions as he may specify.”
In
Masendeke
v CABS
2003 (1) ZLR 65 (H), CHINHENGO J held that the requirements in Rule
348(5b) are not conjunctive. This is because an order for suspension
of a sale or suspension of eviction may also be granted on some other
good grounds.
I
have already noted that the default judgment granted against the
applicant ordered that Stand 652 Bluff Hill Township 12 of Lot L
Bluff Hill is specially executable. On this aspect, NDOU J had this
to say in Priscilla
Meda v Homelink (Pvt) Ltd
HB195-11….,:-
“In
my humble view, execution of mortgaged property is different from the
property being referred to in Order 40 Rule 348A.
The
difference is that we are dealing here with foreclosure proceedings.
In
foreclosure proceedings, the security which the mortgagor pledged is
the one that is sold after institution of judicial proceedings for
the amount of the debt whereafter a writ of execution against the
property is issued. In other words, if the mortgagor does not pay the
capital when due, or if he commits any breach of the conditions of
the contract entitling the mortgagee to foreclose then the latter is
entitled to have the secured property sold and obtain the amount of
his debt from the proceeds of the sale - Benson
v Hirschlorin
1936 NPD 277.
A
mortgagor cannot claim a stay of execution in terms of Rule 348A
supra.
It
has to be noted that, as a general rule, a creditor who has obtained
judgment is entitled to enforce such judgment by levying execution
and the court has no jurisdiction to restrain the judgment creditor
from enforcing such legal right - Sabena
Belgian World Airlines v Vas Elst 1981 (1) SA 1235 (T) and
South Cape Corp (Pty) Ltd v
Engineering Management Services (Pty) Ltd 1977 (3) SA
534 (A) at 544. Rule 348A should be viewed as an exception to this
general rule.
In
casu, in the summons and the summary judgment
application, the 1st respondent specifically sought an
order allowing it to sell the Northend house. The applicant was
served with all those processes and she was legally represented. She
could have defended the matter even on that aspect alone. She did
not.
On
3rd
March 2011, this court acceded to the prayer sought by the 1st
respondent and ordered that the Northend house be sold. Having made
an order directing the sale of the house, applicant cannot now bring
an application in terms of Rule 348A(5a) stopping the sale on the
basis she has made a reasonable offer. She is thus precluded from
doing so as allowing the application would have the effect of
rescinding, through the back door, the order that has been made by a
competent court. By declaring the house 'specially executable'
the court has given the 1st
respondent the right to sell the house in execution to recover what
is owed to it. The mortgagor's first and foremost duty is to pay
the debt secured and the mortgagee's corresponding right is to
'call up' or 'foreclose' the bond. The significance of
mortgage bonds and all other forms of hypothecation lies in the fact
that they provide the creditor with a 'real security' for the
payment of his claim; for if the debtor is unable to raise the
necessary funds to pay the debt which is secured, the creditor is
entitled to demand that the property, that being the thing which is
subject matter of his security, be sold and that the proceeds of such
sale are used for the satisfaction of his claim - The
Law of Property
(3rd
Ed) SILBERBERG and SCHOEMAN at 419 and 429.
The
rights of the judgment creditor will enjoy relative primacy. If this
were not so, it would bring about a situation in which debtors could
borrow money to purchase immovable property and defeat their
creditors' legitimate claims to repayment by using Rule 348A(5a).
To
put residential immovable property, which is a person's home, into
that class of assets beyond the reach of execution would be to
sterilize the immovable property from commerce thereby rendering it
useless as a means to raise credit.
Preventing
debtors from using their homes as security to raise credit will
create a class of homeless persons - those who are unable to afford
the full purchase price of their homes in a cash sale but could
afford to repay a loan for the purchase price. It would lock up
capital and prevent the home owning entrepreneur from using his home
as security to finance business initiative. Members of the poor
communities will not be able to obtain finance from Banks who will
not advance money to purchase immovable property if the immovable
property cannot be used as security for repayment - Nedbank
Ltd v Fraser & Anor
case
number 2011/00418 (Republic of South Africa - South Gauteng High
Court).”
Rule
348A does not provide that the application be supported by an
affidavit. Nonetheless, an applicant who wants to convince a judge to
grant him the relief sought ought to be wise enough to either depose
to an affidavit or provide adequate details in the unsworn statement.
In
the present application it was not canvassed whether the applicant
does not own any other immovable properties. What emerged from the
respondent's counsel is that the applicant previously offered to
dispose of a Stand and use the proceeds to settle the debt. This was
not done and it was not disputed during the hearing. It is not clear
if the Stand still exists and whether any improvements have been made
on it. Obviously, if the Stand still belongs to the applicant and
some improvements have been made, it cannot be said the applicant and
his family have no alternative accommodation. In addition, the
applicant did not explain if he cannot lease a dwelling for himself
and the family. In short, the information given regarding the
envisaged great hardship is woefully inadequate.
The
offer of settlement is manifestly unreasonable.
Taking
into account the judgment debt, it would take eleven years for it to
be extinguished. The maximum tenure of loans being offered by
financial institutions, excluding mortgage loans, is three years.
This serves to demonstrate how unreasonable the applicant's offer
is.
The
hypothecation of immovable property should not be a routine exercise.
The applicant ought to have borne this in mind before he mortgaged
the property. It is immaterial that a third party's breach of
contract ultimately placed the applicant in the present predicament.
In African
Banking Corporation of Zimbabwe t/a BANCABC v PWC Motors & Ors
HH123-13, MATHONSI J…, expressed the following sentiments -
“I
find it utterly deplorable that business people are very quick to
receive money from banks undertaking to repay on certain terms. When
they have expended the money and enjoyed the benefits they cry foul
when the lender demands its dues. We cannot allow a situation where
business people grab loans and then refuse to pay. As they say, the
time to pay the piper has come.”
In
the result, the application is hereby dismissed with costs.
