Takavarasha Nharara v Agricultural Development Bank of Zimbabwe T/A Agribank and 2 Others

### Preamble
1
HB 306/20
HC386/19
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TAKAVARASHA NHARARA

Versus

AGRICULTURAL DEVELOPMENT

BANK OF ZIMBABWE T/A AGRIBANK

And

SHERIFF OF THE HIGH COURT

And

AMANDA TWALA

HIGH COURT OF ZIMBABWE

TAKUVA J

BULAWAYO 24 JUNE 2020 AND 7 JANUARY 2021

Opposed Application

S.V Drau, for the applicant

B Sengweni, for the 3rd respondent

No appearance for the 1st and 2nd respondents

TAKUVA J:		In this court application, the applicant seeks the following relief;

“1.	The sale concluded by the 1st respondent in respect of the immovable property being stand No. 1986 of Gokwe, held under Title Deed of Grant No. 2072/12 be and is hereby cancelled.

2.	The applicant shall bear the costs of cancellation of the sale.”

BACKGROUND FACTS

Judgment in default was entered against the applicant in favour of the 1st respondent for the recovery of a sum of US$ 11 454.66.  In enforcing the judgment, 2nd respondent attached the applicant’s dwelling which property was then purchased by the 3rd respondent who had been the highest bidder on auction.

Applicant was advised by the 2nd respondent that the 3rd respondent was the highest bidder and invited to object within 15 days of the bid date.  Applicant failed to lodge objections timeously.  Applicant and 1st respondent later reached a settlement which settlement was communicated to the 2nd respondent way after 3rd respondent had been confirmed as the buyer.   Also, 3rd respondent had made payment of the purchase price.  The 2nd respondent then declined to cancel the sale.

Applicant has approached this court seeking cancellation of the sale.

The broad issue for determination is whether or not the sale should be set aside.

Applicant contended that the sale should be set aside for the following reasons;

a)	the property was sold at a very low price.

b)	that he was not aware of the proceedings of the sale as he had relocated after receiving summons.

c)	that the property is his sole principal dwelling whose sale should have followed formal procedures upon attachment.  In casu, these procedures were not followed.

d)	that he reached a settlement with the 1st respondent regarding the debt.  The 1st respondent through their legal practitioners wrote to the 2nd respondent asking him to cancel the sale.  The 2nd respondent declined to cancel the sale.

This in a nutshell is applicant’s case.

On the other hand, respondent submitted that;

1.	applicant failed to comply with the provisions of Rule 359 of the High Court Rules 1971 in that he failed to object to the sale of the immovable property within fifteen (15) days of the declaration of the highest bidder or at least before confirmation of the sale.

2.	Applicant failed to comply with Rule 348 A (5a) of the rules in that he should have objected to the sale on the basis that the immovable property was his sole principal dwelling within ten (10) days of service of Notice of Attachment on him by the 2nd respondent.

3.	The applicant had a duty to notify the Registrar and all other interested parties of his change of address to allow further process to be served on his new address.

4.	The 3rd respondent is an innocent purchaser who simply reacted to an advert by the 2nd respondent in which it was shown that the immovable property in question was to be auctioned.  At no time was 3rd respondent informed or became aware of issues between applicant and the 2nd respondent.

5.	The 1st respondent’s legal practitioners only advised the 2nd respondent to stop the sale when confirmation had already been made.

6.	Applicant is the author of his downfall through his carelessness.  Firstly, the judgment that brought about this sale in execution was obtained in default.  Secondly, applicant claims to have moved from his residence to a new address but he did not comply with this Court’s rules by failing to give notice of his change of address.  Thirdly, one of the returns of service shows that service was effected on his tenant’s daughter in law.  It follows that applicant was made aware of this important correspondence.  Finally, in view of the fact that some of the people who occupied the house were applicant’s tenants, it is highly unlikely that they would all receive process relating to the sale of a house they were residing in and all fail to notify the applicant.

I now revert to the law governing the confirmation or cancellation of a sale of immovable property attached in execution of a writ by the Sheriff.

O40 RULE 359 CONFIRMATION OR SETTING ASIDE SALE

“(1)	Subject to this rule any person who has an interest in a sale in terms of this Order may request the Sheriff to set it aside on the ground that-

(a)	the sale was improperly conducted; or

(b)	the property was sold for an unreasonably low price;

or on any good ground.

(2)	A request in terms of subrule (1) shall be in writing and lodged with the Sheriff within fifteen days from the date on which the highest bidder was declared to be the purchaser in terms of rule 356 or the date of the sale in terms of rule 358, as the case may be;

Provided that the Sheriff may accept a request made after that fifteen day period but before the sale is confirmed, if he is satisfied that there is good cause for the request being made late .

(3)	A request in terms of subrule (1) shall –

(a)	set out the grounds on which, according to the person making the request, the sale concerned should be set aside, and

(b)	be supported by one or more affidavits setting out any facts relied on by the person making the request; and copies of the request shall be served without delay on all other interested parties.

(4)	A person on whom a copy of a request has been served in terms of subrule (3) may, within ten days after it was served on him, lodge with the Sheriff written notice that he opposes the setting aside of the sale concerned.

(5)	A notice in terms of subrule (4) shall –

(a)	set out grounds on which the person who gives it opposes the setting aside of the sale concerned; and

(b)	be supported by one or more affidavits setting out any facts relied on by the person who gives it;

and copies of the notice shall be served without delay on the person making the request and on such other persons as the Sheriff may direct:

(6)	Within ten days after a copy of notice has been served on him in terms of subrule (5) the person making the request may lodge with the Sheriff a written reply and if he does so, shall without delay serve a copy of his reply together with any supporting documents on the person opposing the request and on such other person as the Sheriff may direct.

(7)	On receipt of a request in terms of subrule (1) and any opposing or replying papers filed in terms of this rule, the Sheriff shall advise the parties when he will hear them and, after giving them or their legal representatives if any, an opportunity to make their submissions, he shall either-

(a)	confirm the sale; or

(b)	cancel the sale and make such order as he considers appropriate in the circumstances;

and shall without delay notify the parties in writing of his decision.

(8)	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.

(9)	In an application in terms of subrule (8), the Court may confirm, vary, or set aside the Sheriff’s decision or make such other order as the Court considers appropriate in the circumstances.

(10) 	Where no request has been lodged with the Sheriff in terms of subrule (1) within fifteen days from the date on which the highest bidder was declared to be the purchaser in terms of rule 356 or the date of the sale in terms of rule 358, as the case may be, he shall, subject to the proviso to subrule (2), confirm the sale.”(my emphasis)

I have deliberately set out the detailed provisions of Rule 359 in order to lay bare its extent and consequences.  The rule lays out an elaborate procedure that is in some instances obligatory and not merely directory.  It is common cause in casu that applicant did not comply with this rule in its entirety.  He did not request the Sheriff to cancel the sale on any of the grounds stipulated therein. Despite being notified by the Sheriff that the 3rd respondent was the highest bidder and that if he had any objection he should submit them.  The notification by the Sheriff (2nd respondent) was done through two letters marked as Annexures “J”and “K”.

As pointed out above, applicant does not deny that he failed to comply with rule 359.  All he said was that he did not see or become aware of all notices and correspondence that was served on an address he no longer resided at.  However applicant does not shed any light on who was living in this house.  Further he has not attached an affidavit from any of the occupants of the property commenting on whether or not any process was served thereat, and if so what became of such process.  If at all applicant changed his address he did not notify the Registrar of this Court and all other interested parties of this development.  He chose to keep it to himself.  He has also not disclosed his new address.  Therefore any service that was effected on his known address is valid.

In a letter dated 17th day of December 2018 (Annexture J), the 2nd respondent advised the applicant of the highest bidder.  The letter states that the highest bidder was declared on the 14th December 2018.  It follows therefore that the applicant had up to the 18th of January 2019 to lodge an objection to the sale, yet no objection was lodged.  Accordingly, the Sheriff acted properly when he confirmed the sale to the 3rd respondent.  In terms of rule 359 (10), it is mandatory for the Sheriff to so proceed.  The applicant acted recklessly by ignoring rule 359 completely.  The law helps the vigilant not the sluggard.

The procedure in rule 359 was put there for a purpose.  Litigants should not be encouraged to repeatedly flagrantly disregard this court’s rules.  See Viking Woodwork (Pvt) Ltd v Blue Bells Enterprises (Pvt) Ltd 1998 (2) ZLR 249 (S) at 253 F-H.  Quite clearly, the applicant was not diligent in the conduct of his affairs.  It is apparent that his explanation for the failure to comply with rule 359 is fraught with dishonesty.

If applicant had wished to object to the sale on the basis that the immovable property is his sole principal dwelling he ought to have done so within 10 days of service of the notice of attachment – See rule 347 (5a) which states as follows;

“347 (5a)

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 (10) 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

(5b)	An application in terms of subrule.

(5a)	shall be made in Form No. 45b and filed with the Registrar.

(5c)	Upon the filing of an application in terms of subrule (5a), the Registrar shall without delay –

(a)	notify the Sheriff or his Deputy that the application has been filed; and

(b)	serve a copy of the application on the execution creditor; and

(c)	set the application down for hearing and notify the execution creditor and the applicant of the setting down date.

(5d)	Upon being notified of an application in terms of paragraph (a) of subrule (5c), the Sheriff or his Deputy shall take no further steps in regard to the sale of the dwelling concerned or the eviction of its occupants, as the case may be, pending the determination of the application.

(5e)	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 maybe; 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.

(6) 	…

(7)	…

(8)	…” (my emphasis)

Again, the first point to note is that the applicant flagrantly disobeyed the provisions of this rule.  He did not make a chamber application as mandated by this rule.  Such a chamber application was supposed to be filed with the Registrar and not the Sheriff.  The Registrar is then required to notify the other stakeholders before the hearing.

In my view the purpose and object of Rule 359 is to ensure that the reliability and efficacy of sales in execution are upheld.  In Marfopolous v Zimbabwe Banking Corp Ltd & Ors 1996 (1) ZLR 626 (H) it was stated that in such sales, there is need to ensure that the judgment creditor who has been forced to go to court to obtain satisfaction of his debt secures first relief.  The general rule is that sales in execution should not be unnecessarily set aside unless there is a valid reason for so doing.  The onus is on the applicant to show good cause for setting aside a sale in execution.

This point was made crystal clear by GWAUNZA AJA (as she then was) in Bobby Mapuvanyanga v The Sheriff of the High Court and 4 Ors SC 32-02 in the following grounds;

“There is one argument advanced on behalf of the second respondent that calls for comment.  It is contended for him that for public policy reasons as a result allowing the sale in casu to be set aside would bring the entire system of judicial sales in execution into disrepute.  It is submitted further in this regard that the public at large would lose entirely the confidence which it has had up to now in this well established device which for decades facilitate the recouping of debts owed to banks and the like.” (my emphasis).

The point is that public policy dictates that the efficacy of these sales should be preserved.  Commenting on this mechanism, McNALLY JA had this to say;

“Current public concern over the fate of people who lose their houses because of economic misfortunes is a good example of the clash between the stricter western legal mentality and the gentler, more compromising customary law outlook.  We must be careful not to drift in to maudlin sentimentality and excessive sympathy for the hard-luck stories.  If we do, we undermine the very efficient and effective mechanism by which housing is funded.  But there is no reason why the courts should not take account of the fact that forced sales generally realise a lower price than ordinary sales and that the judgment debtor’s interests rank low in the scale of priorities in those sales.  Perhaps too low.”(my emphasis).

In an application arising from the provisions of Rule 359, the court in essence exercises its review powers over the Sheriff’s decision.  Essentially, the Court is enjoined to consider the Sheriff’s decision in light of what information was placed before him/her.  In Nyadunhu & Anor v Barclays Bank of Zimbabwe 2016 (1) ZLR 348 the Court had this to say about the nature of the application;

“The procedure envisaged in Rule 359 is that of a review of the decision of the Sheriff by this Court.  The Court is required to look at the objections raised and test the decision of the Sheriff …  The High Court sitting as a review court, cannot enquire into matters that were not initially raised as objections and deliberated on by the Sheriff.” (my emphasis)

Put differently, this Court cannot sit as a Court of first instance to hear objections by a judgment debtor involving a sale in execution.  The legislature in crafting rule 359 granted the Sheriff a discretion to exercise before the matter is taken to this Court.  Therefore to allow judgment debtors direct access to this Court would not only defeat the intention of the legislature but would render the whole rule irrelevant.

In casu, despite being advised by the 2nd respondent that the 3rd respondent was the highest bidder and that if he had any objections he should raise them within 15 days of the bid date (24 January 2019), he did not object to the sale on any condition.  Applicant’s submission that he was all along not aware of the bids for all notices and correspondence were served on an address he no longer resided at, is without merit for he failed to notify anyone about the so called change of address.  He also failed to divulge the new address and the occupants of the house in question.  Therefore the Sheriff was not given any proof of applicant’s change of address.  Further, service of court process was always at applicant’s domicilium citandi and residence, namely 1968 Mapfungautsi, Gokwe.  As at 8 October 2016 the property was occupied by tenants.  On 6 August 2018, the notice of attachment on immovable property was served on one Desire Munemo I.D. 23-145208 J 23, a tenant.  See Annexure E.  Later, on 6 December 2018 an Instruction to sell letter was served on “a lady tenant who identified herself as Letwin Masuka.” The Sheriff sufficiently described her physical features and attire.  Service was effected at 1968 Mapfungautsi Gokwe at 0800 hours.  The lady accepted service on behalf of the applicant.  On 2 January 2018 an “Acceptance Letter” was served on “the daughter in law to Esnath Parazeni, the current tenant at the given address for service.” The daughter in law was named as Eveline Shanga whose physical features were also given in great detail.

The Sheriff described the gate to the house and that there were two vehicle shells in the premises.  Copies of these notices were served on 1st respondent’s lawyers.  Surprisingly in applicant’s “Answering Affidavit” there is deafening silence about the identity of these people other than a bare denial of their existence.  In light of the allegations that process was served on named tenants, applicant should have divulged the identities of the occupants of the house during this period.

Applicant did not upon service of the notice of attachment, inform the 2nd respondent by way of an objection that the immovable property was his sole principal dwelling.  No such objection was ever lodged. Later, applicant and 1st respondent reached a settlement that was communicated to the 2nd respondent long after 3rd respondent had been confirmed as the purchaser and had made payment of the purchase price.  Can the 2nd respondent’s decision to decline to cancel the sale under these circumstances be classified as irregular or improper?  I think not, for the Sheriff’s decision must stand or fall on the papers and information placed before him before the confirmation.

In Jonathan Gapare v MBCA Bank Ltd and Ors HB 221-20, KABASA J held that “If courts were to set aside sales in execution on the basis that some money was paid well after the conclusion of the sale in execution and the confirmation of such sale, this would erode public confidence in such sales and work against the efficacy of such sales.” I agree with these sentiments.  The applicant in casu chose to deal with the Judgment Creditor, ignoring the Sheriff and the 3rd respondent.  Applicant conducted his case as if the 3rd respondent’s interests did not matter.  That kind of conduct was frowned upon by MATHONSI J (as he then was) in Chiutsi v The Sheriff and Ors HH 604-18.  The learned Judge said;

“The rights of third parties who would have purchased from the Sheriff should also be protected and cannot be defeated by fanciful arguments as the ones made by the applicant relating to the rate of exchange between the bond notes and the United States Dollars which do not make sense at all.”

Applicant’s case appears to me to be a cry for mercy based on equity and other practical considerations.  However, it should be noted that the law does not follow equity but equity follows the law, meaning that the court cannot do violence to the law in the name of equity – See Zimunhu v Gwati & Ors 2002 (1) ZLR 602 (SC) where SANDURA JA made the point that;

“It is only when the balance of equities is in favour of the judgment debtor that a sale in execution should be set aside on equitable grounds.”

In casu, the balance of equities is in favour of the buyer.

As regards the alleged low value, the court’s comments in the Morforpoulous case supra are apposite.  The court stated that;

“All too frequently, however, the debtor finds himself in an invidious position relating to the loss of his home precisely because of his own failure to address the problem efficiently at an early stage.  Where, his tardiness or evasion has contributed to his problems, a debtor cannot hope to persuade the court that equitable relief is due….

The price achieved is therefore itself taken as a reliable indication of value.  For these reasons there is recognized an onus upon the challenger to prove that the price so achieved is unreasonably low.  A litigant wishing to discharge this burden must be fully prepared with properly supported valuations of the property under considerations.

Finally, I wish to say that generally speaking, courts should not readily interfere in sales in execution .” (my emphasis)

In the present matter, the applicant contended that;

“The value of US$11 000-00 is held to be too low considering that this is not just a stand but a full house.  I have engaged property valuators to at least give a detailed report about the state of the house.  I attach here to a copy of the valuation report from Craft Properties as Annexure “C”.  The valuation report shows that the house can attract an open market value of US$29 275-00…. and a forced market value of US$26 347-00.”

This report was compiled on 20 February 2019 when the property had been sold on 14 December 2018 – a period of two and half months.  Under “Terms of Reference” in paragraph “a” the Valuation Surveyor noted that; “This valuation is current at the date of valuation only.  The value assessed herein may change significantly and unexpectedly over a period of time as a result of general market movements or factors specific to the particular property …”

In paragraph (d) he opined thus;

“At the time of our inspection the improvements were refurbished and appeared to be in good condition.”

Firstly it was accepted that the value can change significantly over a period of time due to general market movements.  During that period, the market was volatile characterised by high inflation thereby affecting the RTGS – USD interbank rate.  Secondly, there is an acknowledgment that the property was given a “wash” between December 2018 and 20 February 2019.  Applicant made the property more attractive and useful during this ten week period.  The gap between the date of sale and the date of valuation is important in that it affects the evidential value of the report.  The wider the gap, the less useful the report becomes.

In Stanley Mpofu and Cecilia Mpofu v Sampson Mlaudzi and 2 Ors HB 220-20, MOYO J commenting on a delay of 3 weeks said;

“In my view, the valuation report was going to be useful and reflect a time value of the property if it was made either close to the date of the sale, which was the 3rd of May 2019, or if having been made 3 weeks later, in USD values, it was converted to RTGS values as of the 3rd of May 2020.”

In casu, I take the view that the applicant has not shown good cause to set aside the sale in execution.

Accordingly, it is ordered that;

1.	The application to have the sale conducted by the 1st respondent in respect of the sale of stand No. 1968 of Gokwe, held under Deed of Grant No. 2072/12 cancelled be and is hereby dismissed.

2.	The applicant shall pay 3rd respondent’s costs of suit.

Pundu and Company, applicant’s legal practitioners

Sengweni Legal Practice, 3rd respondent’s legal practitioners