The Sheriff for Zimbabwe v Gold Belt Zimbabwe (Pvt) Ltd and CBZ Bank Limited

### Preamble
1
HH 864-22
HC 2117/21
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THE SHERIFF FOR ZIMBABWE

and

GOLD BELT ZIMBABWE (PVT) LTD

and

CBZ BANK LIMITED

HIGH COURT OF ZIMBABWE

CHITAPI J

HARARE, 27 October 2021 and 24 November 2022

Opposed Court Application

N Chiota, for the applicant

P Tichaona, for the claimant

M A Musona, for judgment creditor

CHITAPI J:	The background to this application is that the judgment creditor obtained judgment against five defendants jointly and severally the one paying the other to be absolved in case no. HC 11281/17 on 31 October 2019 per Tsanga J for payment of the sum of US$3 632 984.41.  The five defendants in the order of the judgment listed first to fifth respectively were Chilruff Consultants (Private) Limited, Gift Madhlayo, Lucy Madhlayo, Nikkel Investments (Pvt) Ltd and Impala Properties (Private) Limited.  Four immovable properties were declared specifically executable to satisfy the judgment debt.  The properties are in the judgment order described as:

“(a)  The remainder of Lot 3 of Susurumba of Chinaka of Juliasdale measuring 13 8754 hectares and held under Deed of Transfer No. 4233/92 dated 28 July 1992 and registered in the name of the 4th defendant.”

“(b)  Lot 3 of subdivision E of Fernhill measuring 3.1797 hectares and held under Deed of Transfer no. 8487/72 dated 19 December 1972 and registered in the name of the 5th defendant.”

“(c)  Lot 4 portion of subdivision E parties of Fernhill measuring 1562 square metres and held under Deed of Transfer no. 4662/81 dated 28 July 1981 and registered in the name of the 5th defendant.”

“(d)	Lot 6 of subdivision E of Fernhill held under Deed of Transfer No. 4702/57 dated 31 August 1957 and registered in the name of RG Denton (Pvt) Ltd.”

Subsequent to obtaining the judgement, the judgment creditor caused by way of a writ of execution against immovable property, the attachment into execution by the applicant of the four properties aforesaid.  Following the attachment of the properties on 10 December 20219, the claimant laid claim to the four properties.  It sought that the properties be not executed upon because they belonged to the applicant who claimed to have purchased and paid for them on 19 November 2019.  The judgment creditor was not amenable to agree to the claimant’s claim.  The applicant was therefore faced with an adverse claim made by the claimant.  The applicant in seeking to have the adverse claim determined by the court filed this interpleader application in terms of order 30 r 205A of the High Court Rules, 1971, then in force.

The issue before the court in this application is whether or not the claimant has made a case for the removal from execution of the property concerned.  The claimant averred in the affidavit of claim delivered on the applicant with a sale of agreement attached thereto that it purchased the properties in question.

In para(s) 7, 8 and 9 of the affidavit aforesaid, the claimant’s representative, KM Muganhiri stated:

“7.	I purchased the aforementioned property from the judgment debtor, after a debt securitization scheme and the debentures were issued after such an arrangement.  I attach hereto marked as Annexure “F” a copy of the agreement of sale.

8.	In the circumstances, I submit that the property attached should not be sold in execution to pay off and settle debts of the judgment debtor since I was not involved in this legal dispute leading to the issuance of a writ upon which the execution was carried out.

9.	I therefore pray that the property herein described be released so that I can enjoy peaceful and undisturbed possession, ownership and use of it.”

The sale agreement referred to recorded the seller as Omega Architects (Pvt) Ltd and the purchaser as the claimant herein.  The seller is described as the “beneficial owners” of the first, fourth and fifth defendants in the main case HC 11280/17.  The agreement does not state the locus standi of the beneficial owners to dispose of the properties when the holders of the property are registered corporates under the Companies Act, as it was called.  The properties were sold for the sum of USD$600 000.00.  The sale agreement was entered on 19 November 2019 after the court had already declared the properties specially executable on 31 October 2019 under case no. HC 11280/17.  In that regard, the judgment preceded the sale.

In its opposing affidavit to the interpleader application proper, the claimant averred that it concluded a sale agreement with a company called Omega Architects (Pvt) Ltd.  The company is said to have been operating two hotels in Juliasdale and Mutare whilst selling them at the same time.   The claimant was interested in venturing into tourism business.  The parties agreed upon a debt swap arrangement whereby the claimant would pay the sellers offshore debts from money realized from the purchasers’ operations in DRC and Sudan.  The claimant averred that it then took possession of the two hotels and was running them presumably at the time of the attachment.

The claimant averred that it was in the process of registering transfer of the properties in its name.  The claimant contended that it had cleared payment of outstanding rates and conveyancing documents had been drawn up but awaited signatures of the transacting parties.  The capital gains certificate was outstanding so contended the claimant because the tax authorities wanted to do their own valuation of the properties.

The judgment creditor opposed the application.  It averred that the claimant had in case no. HC 1686/20 lost another interpleader application seeking to save the same properties from execution.  That application failed.  I have considered the record in case no. HC 1686/20.  The applicant herein filed an interpleader following attachment of the same properties pursuant to judgment in HC 1280/17.  The same claimant herein had challenged the attachment.   The parties are the same as herein.   Zhou J made an order as follows:

“IT IS ORDERED THAT:

The claimant’s claim to all the property which was attached in terms of the Notice of Attachment dated 10 December 2019 in execution of the order in case no. HC 1280/17 be and is hereby dismissed.

The property attached in terms of the Notice of Attachment dated 10 December 2019 issued by the applicant is hereby declared executable.

The claimant shall pay the judgment creditor’s and applicant’s costs on the attorney-client scale.”

From the record HC 1686/20, the claimant noted an appeal No. SC 420/20 to the Supreme Court against the judgment of Zhou J.  The appeal was deemed to have lapsed and abandoned in terms of r 17(11) of the Supreme Court Rules on account of the claimant’s failure, as appellant, to inspect the record of proceedings.  The claimant did not in this application make the material disclosure that it had already had its claim to stop execution dismissed.  The judgment creditor pointed out that in the failed case no. HC 1686/20 the claimant did not disclose the existence of the agreement of sale which it relies upon in the current application to challenge the attachment.

Significantly in the opposing affidavit in case no. HC 1686/20 the claimant stated that it had realized that the property was under judicial attachment.  It appears to me that this is where the problem starts for the claimant.  The judgment of this court in HC 1280/19 ordered that the four properties be specially executable.  That order stands.  In my view as long as that order remains extant as it does, then the judgment creditor is entitled to execute or enforce it.  Interpleader proceedings in such circumstances are a misnomer because the court order is clear that the properties in question be executed upon.

Interpleader proceedings are not available for the purpose of varying or rescinding or correcting a judgment.  By asking the court to order that the properties are not executable then were the court to do so, two conflicting judgments issued by the same court which are mutually destructive would exist side by side which is untenable.  The situation would have been otherwise had a court judgment not declared the properties specially executable and the attachment related to other properties whose execution had not been declared by the court.  The rules of court are clear on how an interested party affected adversely by a judgment in which the affected person was not a party may apply to have it set aside, varied or corrected.  The interpleader procedure is not the appropriate procedure for that purpose.  It follows from my analysis that the interpleader was really unnecessary because the court order is clear that the properties were declared to be specially executable.  The challenge to the sale of the property declared executable by interpleader procedure, if granted, would in my view amount to defeating an extant court order.  At best the claimant if advised could have bought the property upon its execution as an auction buyer and not before as happened.  To seek an order that the properties declared specially executable be not executed upon would amount to rescinding the order in case no. HC 1280/19 through the back door.

In the event that I am wrong in holding that the interpleader is not a competent procedure to adopt in the circumstances of the case, I would still find that the claimant’s claim has no merit.  In the first instance there was a material non-disclosure of the judgment of Zhou J in which the four properties remained declared specially executable.  There was a further non-disclosure of an appeal noted against the judgment aforesaid and the abandonment and lapsing of the appeal.  Courts frown upon non-disclosure of material facts by litigants.  In the case of National Social Security Authority v Capital Bank Corporation and 3 Ors HH 6/2019 Manzunzu J stated at p 3 of the cyclostyled judgment:

“Non-disclosure of material facts

It is expected that those who bring matters on urgency have a duty to disclose all the material facts including those they consider infavourable to their case.  This is for the simple reason that the court must be put in the full picture of the facts in order to do justice to the full picture of the facts in order to do justice to the parties.  More often than not courts lean in favour of parties who are honest than dishonest ones.  Dishonesty may either be by commission or omission.”

The same point was made in the case of Central (Pvt) Ltd v Pralene Moyas & Anor HH 57/12 again a case quoted by Manzunzu J (supra) where it is stated:

“It is the accepted position that courts detest frown on those litigants or legal practitioners who desire to derive the sympathy of the court be deliberately withholding vital information which has a bearing on the matter that the court is called upon to determine.”

The issue was again dealt with by Kabasa J in the case of Robert Njanji v Knee Bongani Sanbo and 4 Ors HB 113/22 in an opposed application.  The learned judge quoted with approval.  The remarks of Ndou J in the case of Anabas Services (Pvt) Ltd Minister of Health and Ors HB 88/03 wherein the learned judge stated:

“The courts should in my view always frown on an order whether exparte or not, sought on incomplete information.  It should discourage material non-disclosure, mala fides and dishonesty.  They may, depending on the circumstances of the case make adverse or punitive orders as a seal of or mala fides or dishonesty on the part of litigants.”

In casu, the claimant first used legal practitioners Messrs Zimudzi and Associates in case no. HC 1686/20 In this application it used different legal practitioners L T Muringani Attorneys.  In both instances the subject matter is the same, being to claim and save from execution the same four properties.  The effect of the order of Zhou J was that two judgments of the court made orders that the properties are specially executable.  The non-disclosure of Zhou J’s judgment herein is material because assuming that the execution ordered by Tsanga J was varied, what would happen to the subsequent judgment of Zhou J ordering the same relief.  It would remain extant unless set aside.  It was in my view the duty of the applicant and its counsel to make the disclosure.  In failing to do so, counsel failed whether by design or inadvertently to discharge his or her professional duty.  I will assume in counsel’s favour that the claimant did not make disclosure of the previous application.  I want to assume so because no counsel worth his or her honour would fail or choose to hide this fact.  The other point is that the properties could not legally have been sold for as long as they had been declared to be specially executable and the court order being still extant.  The real rights in the properties to date reside in the first, fourth and fifth defendants in case no. HC 11280/17.  Transfer to the claimant even if the sale was valid has not passed.  There is a material non-joinder of the holders of title deeds to the properties in question.  The claimant has described them as dishonesty in its papers.  However, that alone would not divest them of real rights which they hold over the properties which rights the claimant seeks to also claim.

The application in this matter was ill-conceived and mischievous.  The court should not continue to be called to determine cases which have been completed without the litigant who petitions the court laying a sound legal basis to seek the court’s intervention.  The court ruled not once but twice that the properties are specially executable.  Those judgments should be set aside first

Without that happening that is the end of the matter.  The judgments will be enforceable.  The claimant thinks that the court can be hood winked by the material non-disclosure of the existence of the judgment of Zhou J.  The non-disclosure is to be deprecated.

On costs the applicant and the judgment creditor have claimed costs on the scale of legal practitioner and client.  The case of Mudzuri v Municipality of Chinhoyi and Anor 1986(1) ZLR 12 (HC) quoted in the applicant’s heads of argument is apposite.  The court stated at p 17 as follows:

“The basis of such an award is, in my view, that the litigant’s conduct is amounted to an abuse of the court process and his actions have thereby brought about additional and unwarranted expense to the other party.”

I have already described the conduct of the claimant in not disclosing the previously decided matter as deceitful and deplorable.  The punitive costs which the courts are slow to award are deserved in this case and will in the exercise of the court’s judicious discretion be ordered.

Resultantly, the application is disposed of as follows:

The claimant’s claim to all the four properties which were listed in the Notices of Attachment dated 10 December 2019, and placed under attachment in execution of the order in case no. HC 11280/17 be and is hereby dismissed.

The abovementioned properties attached in terms of Notices of Attachment dated 10 December 2019 issued at the instance of the applicant are hereby declared specially executable.

The claimant is to pay the judgment creditor and applicant’s costs on the scale of legal practitioner and client.

V Nyemba & Associates, applicant’s legal practitioners

L T Muringani Law Chambers, claimant’s legal practitioners

Mushoriwa Pasi Corporate Attorneys, judgment creditor’s legal practitioners