Victor Katuli v Milgree Investments and Sheriff of Zimbabwe

### Preamble
1
HH 795-18
HC 8385/18
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VICTOR KATULI

versus

MILGREE INVESTMENTS

and

SHERIFF OF ZIMBABWE

HIGH COURT OF ZIMBABWE

CHAREWA J

HARARE, 18th September and 28 November 2018

Urgent Chamber Application

C. Ngweshiwa, for the applicant

W. Muchengeti, for the respondents

CHAREWA J: on 18th September 2018, I presided over an ex-parte urgent chamber application for stay of execution pending rescission of judgment at the conclusion of which I rendered an ex –tempore judgment dismissing the application. The applicant having appealed these are my written reasons for judgment.

BACKGROUND

On 30 November 2011, the first respondent issued summons against Shaylet Espinah Ngubo, Johannes Rushwaya and Tinos Jesmiel Rushwaya (the judgment debtors) claiming, inter alia, payment of $81 715.00 being loan repayment and an order declaring the property mortgaged as security for the loan, being Stand 351 Midlands Township of 3 Uplands of Subdivision A of Waterfalls registered in the name of the Tinos Jesmiel Rushwaya, duly executable. Summary judgment was granted in favour of the first respondent on 6 November 2013. The judgment was unsuccessfully appealed, and the first respondent proceeded to seek execution. Upon attachment of the immovable property aforesaid, the applicant in this matter caused interpleader summons to be issued, having laid claim to the attached property. The applicant’s then legal practitioner withdrew his claim, from the bar, on 19 September 2017, having correctly conceded the point of law that ownership of immovable property and real rights therein are only transferrable upon registration. Consequently, the applicant not having title to the property only had personal rights as against the seller which could not be protected by interpleader process.

On notification of the sale of the immovable property, fresh interpleader proceedings were again instituted at the behest of the applicant in HC2231/18. This new application was duly opposed and set down for hearing on 21 June 2018. The applicant being absent in Court “R” at the appointed time, his claim was dismissed.

On 3 July 2018, applicant filed an application for rescission of the default judgment granted on 21 June 2018. More than two months later, on 13 September 2018, he filed this ex-parte urgent chamber application for stay of execution, which I received at 1431 hours on 14 September 2018. I directed that he should serve the application on the respondent and set the matter down for 18 September 2018. On the hearing day, I directed the parties to address me both on urgency and the merits for the reason that this was a matter which, in my view, cried out for finality to ensure that, if appropriate, the first respondent should enjoy the benefit of the judgment in its favour granted in HC11899/11.

PARTIES’ SUBMISSIONS

The applicant submitted that the application meets the requirements of urgency in that the house in which he and his family find shelter is about to be auctioned. In that event he would suffer irreparable harm.  Further, his application is bona fide as he bought the property from the judgment debtor (third defendant in HC 11899/11) to whom he is not related. He also averred that he has good prospects of success as he is in possession of the agreement of sale in his favour which could lead to transfer of the property to him, which transfer process he alleged to be in progress. He further submitted that he has fully paid the purchase price for the property, but that the seller (the third defendant and judgment debtor in HC11899/11) was not prepared to effect transfer pending the conclusion of these court processes. He further submitted that he had not previously sought transfer of this property because he had been offered another property by the third judgment debtor. He conceded that ownership is key to the prospects of success of his interpleader process and by extension, the success of both the applications for stay of execution and for rescission.

On its part, the first respondent submitted that the matter is not urgent as the application for stay of execution was only filed on 13 September 2018 and served on 17 September 2018. This was despite the fact that the judgment pending which rescission, execution is sought to be stayed, was handed down on 21 June 2018, in circumstances where applicant became aware of the judgment on the same day it was handed down in default. Since the natural consequence of a judgment is execution, the logical thing would have been for applicant to immediately seek both rescission and stay in June 2018, rather than file an application for rescission on 3 July 2018, 13 days after judgment and worse still, seek stay of execution on an urgent basis only on 13 September 2018, more than two months later. In addition, first respondent submits that applicant filed an interpleader claim which he withdrew on 19 September 2017, and sat back and did nothing, only to wake up in 2018 to cause the filing of fresh interpleader process. The need to act clearly arose in 2017 when the writ of execution was first served. Therefore, first respondent submits, any urgency is self-created.

On the merits, first respondent avers that the default on 21 June 2018 was purposeful because at 0855, the clerk to Justice Musakwa made an announcement in Court “E” that the courtroom had been changed to Court “R”. Everyone on Justice Musakwa’s roll then moved from Court “E”. If applicant had been in court he would have followed suit. Or even if he had delayed, he would have followed to Court “R” as notices to that effect, which everyone else on the roll responded to, were posted at Court “E”.

It further submits that there are no prospects of success, either in the application for rescission or the interpleader process. This is because the applicant, not being a registered owner of the property has no real rights, but only personal rights against the seller (the third defendant and judgment debtor in HC11899/11). In any event, applicant has never lived at the premises, has produced no sale agreement to support this application or proof of payment therefor, has no utility bills for the property in his name and has not proffered any explanation why he never sought transfer prior to 2017.

Finally, the first respondent submits that all the applicant’s legal proceedings, from the two interpleader processes, the application for rescission and this urgent application for stay of execution are not bona fide. This is because it has been the pattern of applicant’s behaviour to belatedly file, default or withdraw from pursuing his applications to their logical conclusions.

Further, applicant in fact uses the second judgment debtor’s address as his address of service, all his processes being received by a Mrs Chimbeku, the wife of one Enock Chimbeku who is the judgment debtor’s employee. In addition, applicant is being represented by the judgment debtors’ legal practitioners. This, first respondent avers, raises the presumption that the judgment debtors are actually the power behind these applications which aim is merely to frustrate the first respondent rather than pursue any bona fide relief.

THE LAW

It is trite that in an urgent chamber application a litigant must satisfy the court of three requirements:

That he acted when the need to act arose and thus treated his matter as urgent. While no specific time limits govern when a matter can be regarded as urgent, and each matter must be treated according to its own circumstances, self-created urgency is not acceptable. A litigant must act as soon as he becomes aware of the facts and circumstances giving rise to his cause.

There must be prospects of success on the main matter. It is not necessary to show that one will definitely succeed, but that there are reasonable prospects of success in that a prima facie case is apparent.

The application must be bona fide, due regard being given to the need for litigation to be finalised and substantive justice achieved to avoid irreparable harm to a party.

ANALYSIS

Is this application urgent?

First respondent obtained judgment against its co-principal debtors on 6th November 2013. It issued a writ of execution thereon on 28 July 2015, seeking to attach the debtors’ movable assets at 430 Foxely Drive, Glen Lorne, Harare, and the pledged and duly executable property being Stand 351 Midlands Township 3 of Uplands of Subdivision A of Waterfalls. On 18 May 2017, applicant caused interpleader summons to be issued by way of HC4401/17, claiming ownership of the immovable property. On the date of hearing of the interpleader application on 19 September 2017, the applicant withdrew his claim for reasons already traversed at page 2 above. First respondent’s writ therefore remained extant and executable. However, applicant sat back and did nothing.

Upon notification to the judgment debtors by the Sheriff, on 17 January 2018, that the property would be auctioned on 9 February 2018, applicant dallied until the eve of the sale, to file an affidavit of claim with the Sheriff, thus causing the Sheriff to file another belated interpleader summons in HC2231/18 on 9 March 2018. The matter was set down for hearing on 21 June 2018. The applicant was not in court and default judgment was granted against him. According to his own affidavit, he immediately thereafter (on the same day), became aware of the default judgment. However, he waited until 3 July 2018 before he filed an application for rescission of judgment in HC6122/18. He then went back into his slumber and did nothing until the execution was reactivated again in September 2018. He then roused himself and filed this application for stay of execution pending rescission of judgment on 13 September 2018.

It is clear from the foregoing that applicant needed to act at the very least the day he withdrew his original interpleader claim on 19 September 2017. Even were I to be generous and grant that he needed to act when his second interpleader claim was dismissed on 21 June 2018, the inescapable truth is that applicant acted with an abysmal want of urgency. In fact, he admitted at the hearing of this matter that he did not think to stay execution at the time he sought rescission, but only did so upon receipt of the notice of execution.

I therefore cannot treat his matter as urgent in circumstances where the applicant himself saw no urgency in protecting his interests. I therefore find that his application is clearly not urgent as he himself did not treat it as such.

The merits of the applicant’s case

Having found that this application is not urgent I could have simply removed it from the roll of urgent matters. However, having gone through all the reference records, it is my view that, in the interests of sound and effective administration of justice, this is a matter which ought to be finally and definitively dealt with on the merits in order to allow first  respondent, if appropriate, to enjoy the judgment in its favour.

Is this application bona fide?

Having regard to the background of the case and the conduct of the applicant, I am hard pressed to find that this application is bona fide. As already stated, applicant instigated interpleader processes in HC4401/17, but withdrew his claim and then sat back and waited for second respondent to take any new step. Secondly, if indeed the applicant timeously attended court for the hearing of the second interpleader application in HC2231/18, he could not have missed the announcement that Judge Musakwa’s roll had moved to Court “R”. No other litigant appears to have missed that announcement. Further, if no such announcement had been made, he would have attached an affidavit from Judge Musakwa’s clerk confirming that no such announcement had been made. Despite requesting for such supporting affidavit, applicant appears to have made no effort to follow up on his request such that as at the time of this hearing, such affidavit is not available. In any case, he does not dispute that notices were placed inside and outside Court “E” advising that Judge Musakwa was now sitting in Court “R”.

In addition, it is apparent that applicant is currently represented by the same legal practitioners as the judgment debtors. In addition, the reference records reveal that the applicant’s address of service is the same as one of the judgment debtors. It is surprising that the property that he allegedly resides in is not his address of service. In fact he does not even state, in his founding affidavit that he resides on this property. He explains this by stating that he forgot to mention that he resides at the property in issue. It is noteworthy that nothing, apart from the agreement of sale tendered in the reference records, supports that applicant ever bought and paid for the property, which remains registered in the name of the third defendant and judgment debtor in HC11899/11. No supporting affidavit from the the registered owner has been availed to support that he in fact sold his house and the manner and date when he received the purchase price. All this, in my view, raises a strong stench of collusion between applicant and the judgment debtors.

The presumption is raised and is not discharged that applicant is not a bona fide claimant. In the circumstances, his default can only have been wilful, as suggested by the second respondent, to ensure that further delay in the finalisation of this matter is achieved by applying for rescission of judgment.

Are there any prospects of success in both the application for rescission and the interpleader application?

Applicant claims that he has prospects of success in the application for rescission of judgment and in the interpleader process because he is the owner of the property subject to execution, having bought it from the third defendant and judgment debtor in HC 11899/11. The difficulty he has is that firstly, having found that his conduct reveals that he is not bona fide and his default is thus wilful, there can be no prospects of success in his application for rescission.

Secondly, the prospects of success of his application for rescission of judgment cannot be divorced from applicant’s prospects of success in the interpleader process. I hold the view that in withdrawing his claim in HC 4401/17, the effect was that the Sheriff’s application remained unopposed by the applicant. In the circumstances, the Sheriff ought to have proceeded to seek an order in the judgment creditor’s favour. That he did not do so, does not entitle applicant to file fresh interpleader claims in HC 2231/18, since he was effectively barred in HC4401/18, as his withdrawal meant that the interpleader was unopposed by him.

In any event, the property which applicant claims as his own in the interpleader proceedings, was subject to a deed of suretyship pledging it as security for a loan taken out by the judgment debtors on 15 December 2010. This deed of surety was executed on 14 December 2010. Therefore any sale of the property could not have been validly conducted without the consent of the second respondent as the surety holder.

Further, and in any event, the reference records reveal that the sale agreement produced by the applicant was dated 13 January 2011, almost a month to the date subsequent to the property being pledged as security. More importantly, the applicant has not produced any proof that he actually paid for the property, either by way of receipts or supporting affidavits from the third defendant and judgment debtor in HC 11899/11. In fact the property has remained and still remains registered in such debtor’s name.

In addition, nothing in the records before the court show that applicant even attempted to compel transfer to himself. In fact applicant contradicts himself. In one breath he claims that transfer is in process. In the other, he asserts that the seller has refused to effect transfer until the conclusion of litigation. In the third breath, he claims that he has not sought transfer because he had been offered another property by the judgment debtor. The impression created is therefore that this agreement of sale is not bona fide.

And even if it is, the fact of the matter is that the property had, long before any sale to applicant, been pledged by its owner in security of his debt to second respondent, and, as it still remains registered in such debtor’s name, it is subject to attachment for his debts. It matters not that the seller claims that he never pledged the property. The fact of the matter is that on 14 May 2010, he does not deny that he gave power of attorney to second defendant and judgment debtor in HC11899/11 ceding his rights and interest in the property and authorising him to sign all documents with respect to the property. Until he withdrew that cession of his rights, he could not have validly sold his property to applicant. Nothing on the reference records shows that such cession was ever reversed. In any event, the third co-principal debtor has not brought any claim seeking to set aside the pledge on the basis that first and second co-principal debtors had no authority to pledge his property. Consequently, as properly conceded by the applicant in HC 4401/17, the applicant only has personal rights against the registered owner of the property and cannot claim ownership thereto.

In the premises it is my view that there are no prospects of success, either in the application for rescission or the interpleader application.

For these reasons, I find that the matter is not urgent and application for stay of execution should be dismissed.

Disposition

Consequently, it is ordered that the application is not urgent and is dismissed with costs.

Mavhunga & Associates, Applicant’s legal practitioners

Muchengeti & Company, 1st respondent’s legal practitioners

The Sheriff of Zimbabwe, N.O., 2nd respondent