Opposed
Application - Interpleader
CHINAMORA
J:
Introduction
On
2 June 2020, I heard argument in relation to interpleader proceedings
brought in terms of Order 30 Rule 205A as read with Rule 207 of the
High Court Rules, 1971.
I
dismissed the claimant's claim, and the order which I granted,
inter
alia,
declared the property which had been placed under attachment
executable. I now provide the reasons for my decision.
Background
The
facts giving rise to this application are:
The
judgment creditor obtained a judgment in the sum of US$352,851-30
plus interest and costs against Sparkles Services (Pvt) Ltd and
Godfrey Munyamana (“the judgment debtors”). Pursuant to the
judgment, the judgment creditor caused a writ of execution to be
issued on 8 May 2018, resulting in the Sheriff attaching Stand 67
Guildford, Borrowdale Estate of Subdivision H of Guildford Borrowdale
Estate, measuring 6803 square metres, held under Deed of Transfer No.
1447/2009 (“the property”).
This
was done by notice of attachment issued on 22 May 2018.
The
property is registered in the name of the judgment debtor.
Not
amused by the attachment the claimant caused the applicant to
institute interpleader proceeding claiming that the property belonged
to him.
These
proceedings were commenced on 10 September 2019.
He
averred that he purchased the property from Mr Godfrey Munyamana and
Mrs Fadzayi Munyamana on 15 December 2013, and had fully paid the
purchase price.
The
claimant asserted that he had instituted proceedings under HC11367/15
seeking transfer, but the lawsuit was settled through a deed signed
on 12 December 2017.
He
further said that the parties had done the capital gains tax
assessments at ZIMRA.
On
that basis, he claimed that the property was his or special
circumstances existed for the property not to be declared executable.
On
his part, the judgment creditor was steadfast that the property was
executable since it was registered in the name of the judgment
debtor. He proceeded to argue that by law the judgment debtor owned
the property.
The
judgment creditor contended that the claimant applied under HC5642/18
to obtain transfer under the Titles Registration and Derelict Lands
Act
[Chapter
20:20],
never
pursued the application as it was incompetent.
Finally,
he submitted that as he had no title deed he should take issue with
the judgment debtor and seek an appropriate remedy through the court.
I
have to decide on the competing interests of the claimant and
judgment creditor.
The
Applicable Law
The
law relating to interpleader proceedings is settled.
A
claimant must set out facts and allegations which constitute proof of
ownership. The party objecting to execution must prove on
balance of probabilities that the property is his or hers. (See Bruce
N.O v Josiah
Parkers and Sons Ltd
1972 (1) SA 68 (R) at 70C-E).
The onus is on the claimant to prove ownership of the property
claimed. (See Deputy
Sheriff, Marondera v Travese (Pvt) Ltd & Anor
HH11-03).
As
already indicated above, the property to which the claimant lays a
claim is registered in the name of the judgment debtor. This raises a
presumption that such property belongs to the person (juristic or
otherwise) who has title to it.
The
position was put this way by de
villiers cj,
in Zandberg
v Van Zyl
1910
AD 258 at 272:
“…possession
of a movable raises a presumption of ownership; and that therefore a
claimant in her inter pleader suit claiming the ownership on the
ground that he has bought such a movable from a person whom he has
allowed to retain possession of it must rebut that presumption by
clear and satisfactory evidence.”
In
casu,
the judgment debtor has title to the property. It is indeed immovable
property.
However,
I propose to equate possession in the case movable goods to title in
respect of immovable property.
To
the extent that possession and title raise a rebuttable presumption
of ownership, the principle in Zandberg
v Van Zyl supra
equally
applies to immovable property.
The
starting point is to examine the legal implication of title.
Title
confers real rights in immovable property. It cannot be gainsaid that
a title deed is prima
facie
proof that a person enjoys real rights over the immovable property
defined in the deed.
In
Fryes
(Pvt) Ltd v Ries
1957 (3) SA 575 at 582, the court held that:
“Indeed
the system of land registration was evolved for the very purpose of
ensuring that there should not be any doubt as to the ownership of
the persons in whose names real rights are registered. Generally
speaking, no person can successfully challenge the right of ownership
against a particular person whose right is duly and properly
registered in the Deeds Office.”
The
same legal position obtains in this jurisdiction.
In
Takafuma
v Takafuma
1994 (2) ZLR 103 (S) at 105H-106A, McNALLY JA had this to say:
“The
registration of rights in immovable property in terms of the Deeds
and Registries Act [Chapter 139] (now [Chapter 20:05]) is not a mere
form. Nor is it simply a device to confound creditors or the tax
authorities. It is a matter of substance. It conveys real rights upon
those in whose name the property is registered.”
See
also Chapeyama
v Chapeyama
2000 (2) ZLR 175 (S).
Of
further relevance to transfer of title in immovable property, is
section 30A of the Capital Gains Tax Act [Chapter
23:01],
which reads:
“30A
Capital gains tax not withheld in terms of Part IIIA to be paid
before transfer of specified asset
(1)
No registration of the acquisition of a specified asset in respect of
which capital gains tax is not withheld in terms of Part IIIA shall
be executed, attested or registered by —
(a)
The Registrar of Deeds in terms of the Deeds Registries Act [Chapter
20:05];
(b)
the person responsible for registering the transfer of shares of any
company registered or incorporated in terms of the Companies Act
[Chapter
24:03];
unless
there is submitted to the Registrar of Deeds or the person concerned
by either of the parties or their agents concerned in the transaction
a certificate issued by the Zimbabwe Revenue Authority stating that
any capital gains tax payable on the acquisition of the specified
asset has been paid”.
The
essence of the above provision is that the process of transfer is has
not yet been completed. Thus, on a proper construction of section 14
of the Deeds Registries Act and section 30A of the Capital Gains Act,
acquisition
of ownership in land immovable registration.
Applying
the law to the facts
To
substantiate his claim, the claimant produced an agreement of sale
signed between him and the judgment debtor.
On
the basis of the authorities mentioned above, the legal effect of
registration of title in the judgment debtor's name is evident.
Title in the property remains in the judgment debtor. Such title can
only be legally divested upon transfer to the claimant or a third
party, whereupon the transferee would acquire real rights to the
property.
As
things stand, the agreement without the process of transfer through
the Deeds Registries Act only vests personal rights in the claimant.
The
legal reality was spelt by the court in Fischer
v Ubomi Ushishi Trading & Ors
2019
(2) SA 117 (SCA) at para 18, in the following terms:
“That
agreement, though binding on the contracting parties, did not by
itself vest ownership of Mr Haynes half share in the property in Mrs
Haynes, any more than a contract of sale of land passes ownership to
the buyer. It follows that Middleton
[2010
(1) SA 179 (D)] was
correctly decided. The vesting of ownership of the property in Mrs
Haynes required an act of transfer by way of an endorsement on the
title deed of the property in terms of section 45 bis
(1)(a) of
the Deeds Registries Act”.
That
said, I have already acknowledged that there is a rebuttable
presumption that if property is in the name of someone, that person
is presumed to be the owner of that property.
Since
the claimant has alleged that he is the owner of the attached house,
he bears the onus to prove, on a balance of probabilities that he is
the owner.
I
have to decide whether that onus has been discharged. Put
differently, the issue for determination is whether or not the
claimant has set out facts and allegations which constitute proof of
ownership.
It
is important to note that these interpleader were triggered by the
attempt to execute this court's judgment in HC11601/17.
As
title is still in the judgment debtor's name, prima
facie,
the property can be sold in execution of the judgment obtained by the
judgment creditor in HC11601/17.
The
claimant relied on CBZ
Bank v David Moyo & Anor
SC470-15 for the proposition that a deed of transfer is prima
facie
proof of ownership.
Developing
on this argument, he submitted that the registration of the property
in the name of the judgment debtor did not affect his claim to
ownership arising from the agreement of sale. He further argued that,
on the authority of that case, the property should not be declared
executable. One should not latch onto a legal principle from one case
and apply it to another without considering the factual context of
each case.
In
this respect, it is worth recalling that in Bariadale
Investments (Pvt) Ltd v Puwayi Chiutsi & Ors
HH842-19, where CHITAPI J aptly noted:
“I
do accept the general rule and the general approach of the court but
would caution that a case authority is only binding or persuasive if
the ratio
decidendi
sought to be invoked pertains to a factual scenario which is similar
to the case under determination because every case is determined on
its own peculiar facts and circumstance”.
The
decision in CBZ
Bank v David Moyo & Anor supra
turned
on its facts.
The
evidence showed that title
had not been effected due to circumstances beyond the purchaser's
control, after he had done everything expected of him to effect
transfer.
The
brief facts are that Mr Moyo purchased and paid the full purchase
price for the property in August 2010. He acted promptly to secure
registration of title by paying the transfer fees and obtaining tax
and rates clearance certificates. He took occupation 3 months after
the date of payment of the purchase price, in Novemebr 2010, in terms
of the sale agreement. The transfer could not be registered because a
creditor of one of the sellers had registered a caveat on the title
deeds of the property. The caveat was registered after Mr Moyo was
already in possession of the property and a day before his transfer
papers were filed in the Deeds Registry.
In
casu,
the factual scenario is not comparable.
The
telling question to ask is: since the agreement of sale was signed in
2013, why was transfer not effected by the time of execution in 2018?
Mr
Govere,
for the claimant, initially explained that the claimant had applied
for registration of title in terms of the Titles Registration and
Derelict Land Act.
However,
when asked by the court if ownership could be obtained that way,
counsel conceded the futility of the application.
The
record shows that when that application was opposed, it was never
prosecuted.
Despite
the propriety of the application being challenged, the claimant took
no steps to seek an order compelling the judgment debtor to transfer
the property to him.
It
must be borne in mind that proceedings under HC11367/15 for the
judgment debtor to effect transfer preceded those under HC5642/15
purportedly in terms of the Titles Registration and Derelict Lands
Act.
Mr
Govere
argued that the lawsuit in HC11367/17 was resolved by a deed of
settlement signed on 12 December 2017.
It
is relevant to mention that the sale was concluded on 15 November
2013, and if we go by the receipts attached to the claimant's
papers, the purchase price was fully paid in July 2015. Yet nothing
was done to obtain transfer from November 2013 till 2017 when summons
was issued.
Also
amazing is that the capital gains tax assessment was done on 16 July
2020 for Mr Munyama, and only done on 20 March 2020 for Mr Munyama
had been assessed 2 years earlier on 16 July 2018.
Clearly,
no plausible explanation has been given for such a lackadaisical
approach to enforcing one's rights.
It
seems the claimant would have contentedly sat on his laurels were it
not for the interpleader proceedings. I say this because, quite apart
from the casualness outlined above, nothing had still not been by the
time the writ of execution was issued on 8 March 2018 and the
attachment done on 22 May 2018.
It
was not until 10 September 2019, that interpleader proceedings were
commenced.
I
have to decide whether the claimant has discharged the onus on him to
establish his claim to the property.
For
the property to be spared from execution the court must find that
“special
circumstances”
exist.
That
was the decision made in CBZ
Bank v David Moyo & Anor supra,
which defined special circumstances as follows:
“Special
circumstances exist where a purchaser has failed to have the property
registered in his name, when he and the seller have demonstrated a
clear intention to effect transfer and when there was no legal
impediment to such transfer or the impediment does not justify the
refusal to grant protection to the purchaser”.
Based
on the papers before me and the disconcerting chronology of events in
this matter, I am loathe to accept that the claimant acted in a
manner consistent with someone who proceeded with swiftness, but
failed to obtain transfer through no fault of his own.
The
promptness with which Mr Moyo acted in CBZ
Bank v David Moyo & Anor supra
was
certainly not mirrored in casu.
Lest
this view is taken as unfair, I must state that the claimant was
legally represented in all the proceedings he brought before this
court. Given that he was acting advisedly, the clumsiness evident
from the way the issue of transfer was dealt with is both
inexplicable and inexcusable. Once full compliance with the terms of
the agreement of sale had been made, transfer should have been sought
immediately.
Even
after deciding to deploy another option, what boggles the mind is:
why prompt action was not taken to obtain redress as soon as the
claimant and/or his lawyers knew that the Titles Registration and
Derelict Lands Act route was a cul
de sac.
Conclusion
At
the end of argument, I came to the view that not enough evidence has
been adduced to prove on a balance of probabilities that the attached
immovable property belongs to the claimant and not to the judgement
debtor. Nor was I satisfied that the claimant had established special
circumstances warranting me to declare the property not executable.
The
claim was, accordingly, dismissed.
Although
the judgment creditor sought costs on an attorney and client scale, I
was not satisfied that any conduct on the part of the claimant
justified such costs. Costs being in the discretion of the court, in
the exercise of that discretion I decided against awarding punitive
costs.
Disposition
It
is as a result of the foregoing that I made the following order:
1.
The claimant's claim to the property which is listed on the Notice
of Seizure and Attachment dated 22 May 2018, which were placed under
attachment in execution of the order in Case No HC11601 be and is
hereby dismissed.
2.
The above mentioned property attached in terms of the Notice of
Seizure and Attachment dated 22 May 2018 be and is hereby declared
executable.
3.
The claimant shall pay the judgment creditor's and the applicant's
costs.
V
Nyemba & Associates,
applicant's legal practitioners
Munangati
& Associates,
claimant's legal practitioners
Ngwerume
Attorneys at Law,
judgment creditor's legal practitioners
