The
applicants have been fighting tooth and nail since October 2011 to
save the immovable property known as Stand 2321 Bulawayo Township of
Bulawayo Township Lands, otherwise known as Number 46 Collenbrander
Avenue, Northend Bulawayo (“the property”) from sale in execution
to satisfy a debt they owe to the second respondent.
The
background is that the second respondent advanced to the applicants a
loan of US$15,000= in terms of a loan agreement signed on 15 March
2010. The property was mortgaged as security for the loan. As is now
the norm in this country, the applicants failed to repay the loan
resulting in summons being issued against them in HC3330/11 for
payment of the sum of $13,021=04 outstanding on the capital amount
and $12,553=57 being interest levied at the rate of 30% per annum.
The applicant did not contest the action, and, inevitably, default
judgment was granted on 31 August 2011 in terms of which the property
was declared specially executable to satisfy the debt. Following the
issuance of a writ of execution, the property was placed under
judicial attachment on 3 October 2011 and poised for sale.
The
applicants would have none of it.
They
approached this court in HC10970-11, in terms of Rule 348A(5b),
seeking a suspension of the sale of the property arguing that the
property was a dwelling house for the second applicant and his wife,
Enesiya, who would suffer great hardship if it was sold. That
application came to naught. The property was sold by public auction
on 22 February 2013, by Clipcrunt Real Estate, on the Sheriff's
instructions. The applicants could not accept that outcome. They duly
lodged an objection to the sale to the Sheriff in terms of Order 40
Rule 351(1)(b) of the High Court of Zimbabwe Rules, 1971. The Sheriff
conducted a hearing attended by all interested parties and concluded
as follows:
“The
respondent alleges that the sale was done despite assurances from the
Acting Sheriff, Mr Madega, that the sale will not go on. The other
ground of objection was that an application to suspend the sale,
filed under HC10970-11, was ignored. The respondent's assertion
that the Acting Sheriff, Mr Madega, advised them that the sale will
not go on is unfounded because the Acting Sheriff is just a holder of
public office and not an attorney of any of the parties to these
proceedings. Without instructions from the instructing attorney there
is no way the Acting Sheriff would have stopped the sale.
On
the issue of seeking to have the sale set aside on the basis that an
application to suspend the sale was ignored, which application was
filed under case number HC10970/11, it is only when a court order has
been granted stopping the sale and in this instance the court
application was still pending and the mere filing of a court
application does not stop the sale. The respondent has failed to
raise good grounds for the setting aside of the sale and therefore
the Sheriff will proceed to confirm the sale.”
After
confirmation of the sale, the applicants did not capitulate. Instead,
they filed this application in terms of Rule 359(8) of the High Court
Rules, which provides:
“Any
person who is aggrieved by the Sheriff's decision, in terms of
subrule (7), may, within one month after he was notified of it, apply
to the court by way of a court application to have the decision set
aside.”
The
founding affidavit of the second applicant repeats that the house is
the family's primary residence, and, as such, they will suffer
irreparable harm and far reaching hardship if it is sold resulting in
their eviction. As the applicants have paid a total of $15,700=,
according to his calculation, only a sum of $1,087= remains
outstanding and it would be unjust to sell the property for such a
small debt. He also alleges that the 30% interest levied by the
second respondent is unlawful without explaining why that would be so
when the applicants committed themselves to that on the loan
agreement. Luka Phakathi goes on to make reference to the application
to suspend the sale filed under HC10970-11 arguing that the sale
should not have been proceeded with against the backdrop of that
application, which does not appear to have been prosecuted.
The
Sheriff made a finding on that point, and correctly in my view.
He
then proceeds to argue, extraneously, that the respondents did not
respond to the application for suspension of the sale and that the
property should not have been sold without exhausting movable
property which movable property he does not even identify.
Extraneously in the sense that the filing of an application to
suspend a sale on its own did not stop the sale and the immovable
property in question was declared executable by order of this court.
It had to be because it was given as security for the debt owed to
the second respondent.
The
application has been opposed by the second respondent which states,
through the opposing affidavit of Daniel Nyamushamba, its Credit
Controller, that the applicants should have known when they put the
property as security for the debt that in the event of a default it
would be auctioned to recover that debt. Daniel Nyamushamba insists
that the applicants still owe $12,168=91 because whatever they paid
was appropriated first and foremost towards the costs, then interest
before capital in terms of clause 3 of the facility agreement of the
parties. The applicants are also liable for the taxed costs of the
second respondent in terms of the bill of costs attached to the
opposing affidavit.
The
legal position in respect of a sale of immovable property confirmed
by the Sheriff was stated in very clear terms by the Supreme Court in
Mapedzamombe v Commercial Bank of Zimbabwe & Anor 1996 (1) ZLR
257 (S)...,:
“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 would not readily do so; see
Lalla v Bhura (1973) (2) ZLR 280 (A) at 283 A-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 pp6-7.
When
the sale of the property not only has been properly confirmed by the
Sheriff but transfer effected by him to the purchaser against payment
of the price, any application to set aside the transfer falls outside
Rule 359 and must conform strictly with the principles of the common
law.
This
is the insurmountable difficulty which now besets the appellant.
The
features urged on his behalf, such as the unreasonably low price
obtained at the public auction and his prospects of being able to
settle the judgment debt without there being the necessity to deprive
him of his home, even if they could be accepted as cogent, are of no
relevance. This is because, under the common law, immovable property
sold by judicial decree after transfer has been passed cannot be
impeached in the absence of an allegation of bad faith, or knowledge
of the prior irregularities in the sale by execution or fraud.”
See
also Mhlanga v Sheriff of the High Court 1999 (1) ZLR 276 (H).
It
is not clear from the papers, and counsel did not allude to this in
submissions, whether transfer of the property to the third respondent
has taken place. What is clear though is that the sale was confirmed
by the Sheriff and he gave reasons for doing so. I have already
stated that the decision to confirm the sale was a correct one in the
circumstances. Whichever way, the issue of whether transfer has been
effected or not pales to insignificance when one considers that the
sale was confirmed. For that reason, the court will be very slow to
set aside the sale pursuant to an application made in terms of Rule
359(8). In my view, there exists no ground whatsoever to set aside
the sale. The applicants gave the property as security for a loan
advanced by the second respondent. By their own admission, the loan
has not been fully repaid. Whether what is owed is $1,087= or more is
neither here nor there. The fact remains that the applicants have not
repaid the loan in full. There is also the issue of interest and
taxed costs which have been shown to be owing. For that reason, the
second respondent was within its rights to proceed against the
property.
The
argument that it should have proceeded against un-named movable
property cannot be taken seriously either.
For
a start, the applicants did not point to any such property as would
satisfy the debt. More importantly, the second respondent instituted
foreclosure proceedings in respect of mortgaged property and obtained
a court order declaring such property specially executable. In that
regard, there was no need to look for unknown quantities of movable
property given that there existed security in the form of the
property. I am in total agreement with the views expressed by
GILLESPIE J in Morfopoulos v Zimbabwe Banking Corporation Ltd &
Ors 1996 (1) ZLR 626 (H)…, that:
“The
question of the setting aside of sales in execution of property is
one that has received considerable attention in recent times. The
administration of justice has not been without criticism, unjustified
in my view, of insensitivity to the plight of judgment debtors who
face the possible loss of immovable property, including residential
accommodation, in satisfaction of a judgment debt.
The
rules that have evolved concerning the sale of properties in
execution are designed to find a balance, on the one hand, between
the need to protect a judgment debtor who is unfairly being hounded
to insolvency and homelessness, and, on the other, the imperative to
ensure that the judgment creditor, forced to go to court to obtain
satisfaction of his debts, is provided with his just relief. A
further factor has been given additional consideration that is the
requirement that the reliability and efficacy of sales in execution
be upheld.”
In
my view, while a judgment debtor is entitled to test the efficacy of
the sale in execution before he loses his property, it should also be
borne in mind that financiers are only prepared to part with their
money to debtors as loans on the strength of security. They need the
assurance that upon a default, they will be able to foreclose on
mortgaged property to recover what is due. A judgment debtor standing
in the way of execution bears the onus of proving the grounds of
interference with a sale set out in the Rules. Where, as in this case
where counsel for the applicants stated that they rely on “any
other good ground” to set aside the sale, evidence relied upon for
interference should be placed before the court. The applicants have
dismally failed to show any good cause for interference. In fact, the
application exhibits desperation and a discernable unwillingness to
be bound by the terms of an agreement the applicants went into with
their eyes open than any merit.
In
the result, the application is hereby dismissed with costs.
