Croco Properties (Pvt) Ltd v Swift Debt Collectors (Pvt) Ltd t/a Ruby Auctions and The Deputy Sheriff N.O Harare

### Preamble
1
HH 269-12
HC 6222/12
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CROCO PROPERTIES (PVT) LTD

versus

SWIFT DEBT COLLECTORS (PVT) LTD

t/a RUBY AUCTIONS

and

THE DEPUTY SHERIFF N.O HARARE

HIGH COURT OF ZIMBABWE

DUBE J

HARARE, 14 June 2012

Urgent application

T.P.Machiridza, for the applicant

V. Matipano, for the respondent

DUBE J: This is an application for stay of execution pending an application for rescission of a judgment granted against the applicant and in default by MUTEMA J under HC1916/12 on 22 May 2012.

The main claim is for storage costs. The applicant obtained a writ of ejectment against Tele Access its tenant in a premise in Harare. It instructed the Deputy Sheriff to evict Tele Access out of its premises. On 6 March 2009 the applicant’s legal practitioners wrote to the Deputy Sheriff instructing him to take the property of Tele Access to Ruby Auctions for safe keeping. Part of the letter reads as follows:

“Kindly be advised that all the property which is going to be ceased from BB House, on 9 March 2009, when the above eviction should take place shall be taken to Ruby Auctions for safe keeping.

We have noted with great concern that due to the position of the building, if there is property to be heaped outside it will be hazardous to traffic and to other people conducting their business within the same area.”

The property was taken to Ruby Auctions in accordance with this instruction.

The storage costs were not settled. On 12 December 2011 the first respondent’s legal practitioners, intending to sue the applicant for the storage costs, wrote to the applicant’s legal practitioners enquiring if they had authority to receive summons on behalf of their client. The letter was not responded to. Another letter dated 16 December 2011 was written to the applicant’s legal practitioners and it received no response as well. On 21 February 2012, the first respondent issued summons against the applicant claiming storage charges for property stored at its storage rooms by the applicants. The return of service shows that the summons was served on a receptionist named Eileen at the applicant’s registered address. The applicant did not enter appearance to defend resulting in default judgment being entered against it. A writ of execution was issued resulting in the first respondent serving a notice of removal on the applicant on 6 June 2012. On 11 June 2012 the applicant filed this urgent chamber application for a stay of execution pending the outcome of an application for rescission of judgment. The applicant has also filed an application for rescission of judgement.

The applicant avers that the summons was never served on it and that the applicant was never in knowledge of the claim against it until 6 June 2012 when the Deputy Sheriff came to attach its property in pursuance of the default judgment. The applicant further states that the person on whom the Deputy Sheriff purportedly served the summons is not known by the applicant and that there is no receptionist or employee  who goes by that name. That on the day service was effected a different person was at the reception and that receptionist did not receive service of any process. The applicant submitted that the default was not wilful as the applicant was not served with summons commencing action.

The general rule is that a party who has obtained a judgment or order is entitled to execute upon it. A stay of execution may only be granted where a party can show that special circumstances justifying a stay of execution exist. The approach the court should adopt was set out Mupini v Makoni 1993 (1) ZLR 80 (SC) where the court remarked that execution is a process of the court, and the court has an inherent power to control its own processes and procedures and in doing so, the court has a wide discretion and may set aside or suspend a writ of execution where real and substantial justice so demands. The onus is on the applicant to satisfy the court that an injustice would be caused to him or some irreparable harm or prejudice. This approach was enunciated in the case of Santam Insurance Co Ltd v Paget 1981 ZLR 132 where GUBBAY J (as he then was) had this to say on the onus which rests on the applicant in a case such as this,

"The onus rests on the party claiming this type of relief to satisfy the court that injustice would otherwise be caused him, or to express the proposition in a different form, of the potentiality of his suffering irreparable harm or prejudice. That task is by no means easy where, as in the present case, the judgment it is sought to suspend sounds in money, for the giving of effect to it, unlike with orders for ejectment or the transfer of property, does not render difficult any restitution that may have to be made. See Skinner v Shapiro (II) 1924 WLD 174 at 176, Graham v Venter 1924 OPD 46, Zaduck v Zaduck 1966 (1) SA 550 (SR) at 551E."

See also Cohen v Cohen (1) 1979 ZLR 184 at 187C, Chibanda v King 1983 (1) ZLR 116 (H) at 119C-H, Strime v Strime 1983 (4) SA 850 (C) at 852A.

The applicant denies that it was ever served with a copy of the summons or received notice of the summons. The assistant Deputy Sheriff who served the summons has deposed to an affidavit stating that he did indeed serve the process. The Deputy Sheriff is an officer of this court. His return of service is generally accepted as prima facie proof of service and cannot be lightly challenged. He is a neutral person in this dispute and has nothing to benefit from this dispute. No reasonable explanation or cogent reason has been advanced why he would lie that he served the process at the applicant’s registered office when he did not.

The applicant’s counsel explained that the reason why letters written to it by first respondent’s lawyers were not replied to is because the legal practitioner who was dealing with the matter was unavailable. The conduct of the applicant’s legal practitioners, of failing to respond to correspondence regarding an enquiry over where the summons should be served raises issues of management of that office as well as ethical questions. This type of conduct is questionable. The overall impression created is that the applicant has always tried to avoid service of summons in this case. This court is not satisfied that the applicant was not in wilful default.

The applicant sought to challenge the default judgment as irregular on the premise that the default was granted without proof to support the claim. This was a claim for a liquidated amount which can be proved by invoices. A perusal of the file shows that an invoice for storage costs was indeed attached to the application for default judgment. This point has no merit.

The applicant denies liability for the storage costs and claims that the respondent should have claimed its storage costs from Tele Access instead of the applicant. The applicant submitted that the goods stored do not belong to it but to Tele Access who have not been made a party to the action. That it was made known to the first respondent that the claim should lie with Tele Access. The court will determine whether the applicant has an arguable case with respect to the application for rescission of judgment.

There is no doubt that the instruction to store the property of Tele Access at Ruby Auctions came from the applicant. This is evidenced by their letter to the Deputy Sheriff dated 6 March 2009 instructing him to take the goods to Ruby Auctions for safekeeping. There is no basis for expecting Tele Access to pay the storage costs when they never gave any instruction to the first respondent to store the property. There is no agreement between the first respondent and Tele Access regarding the storage of the property in issue and there is therefore no contractual obligation on the part of Tele Access to pay the storage costs to the first respondent. There is no privity of contract between the first respondent and Tele Access. The applicant can always pursue Tele access in order to recover the costs.  There is nothing in the application to show that Tele Access requested the goods to be stored whilst paying its obligations to the applicant or that it undertook to pay the storage costs. The first respondent knows the applicant which brought property to it for storage and hence properly claimed storage costs from it. The applicant sought to rely on a lease agreement which purportedly provides that Tele Access was responsible for the storage costs. Unfortunately the applicant did not refer to the contract or its contents in the written application and the court, after objections from the first respondent, did not allow the applicant to make submissions related to the contents of that lease agreement. Even if there is a lease agreement that provides that in the event that the landlord sends property for storage the tenant will be responsible for the costs, the applicants did not act as agents of Tele Access when they stored the property nor did they indicate that they were doing so on behalf of Tele Access. The applicant is clearly responsible for the storage costs. It appears to the court that the application for rescission of judgment is without any prospects of success. The applicant’s case is weak. The court’s mercy may be extended only where the applicant has a strong case on the merits in the main matter.

The applicant averred that if the execution proceeds, the applicant stands the risk of having its property being removed from its business premises and this would force its business to close down to the detriment of the many employees whose livelihood depends on the applicant. That if execution proceeds before the application for rescission of judgment is heard, the applicant will suffer irreparable harm or serious prejudice. The applicant submitted further that if execution is not stayed, about 100 employees will lose their employment. The fact that execution will be harsh on the applicant is not a good enough reason to stay execution of a judgment. This approach is summarised in the headnote of Chibanda v King 1983(1) ZLR 116 (HC)   as follows;

‘’In an application for stay of execution of a judgment of the Court, it is not enough for the applicant merely to allege hardship. He must satisfy the Court that he may suffer irremediable harm or prejudice if execution is granted. One way to do this would be to adduce evidence that he now has sufficient means to make payment on due date; but he must have a strong case to present to the Court. It must also be borne in mind that if the Court were to extend mercy, it would be doing it at the expense of a litigant who has already established in Court his right and title to what is being claimed.  Such mercy should rather be sought in the action itself, before judgment is given, not afterwards.’’

The judgment the applicant seeks to suspend sounds in money and as a general rule courts will allow execution in cases where the judgment sought to be stayed is for the payment of money as restitution or payment of damages is not difficult. See Santam Insurance Co Ltd v Paget (supra), Geffen v Strand Motors (Pvt) Ltd 1962 R & N 259 at 260H; 1962 (3) SA 62 (SR) at 64A). The fact that the applicant’s employees will lose their employment is a moral consideration. All the respondent has shown is that the judgement will be harsh to it and its employees. The applicant has not been able to show that irreparable harm will be caused to it.

Mr Machiridza argued that the balance of convenience favours the granting of the order. He urged the court to consider the financial prejudice the applicant will suffer. The first respondent on the other hand argued that the respondent has had its storage space occupied for about three years and that the space could have been taken by somebody else who would have paid for it. That therefore the balance of convenience favours the respondent. Having found that there is no risk of irreparable harm likely to be occasioned to the applicant, the court finds that the balance of convenience favours the first respondent. The applicant has not been able to show that irreparable harm will be caused to itself. The carrying into operation of the judgment does not make restitution of the applicant’s original position difficult as any harm likely to be caused can be cured by damages.

In the result, the application for stay of execution pending the outcome of the application for rescission is dismissed with costs.

Manase & Manase, applicant’s legal practitioners

Matipano & Associates, 1st respondent’s legal practitioners