Buchwa IRON ORE Mining Company (Pvt) LTD V THE Sheriff OF THE HIGH Court, Gweru AND Optimax Mining Resources (Pvt) Limited

### Preamble
1
HB 254/22
HC 1251/21
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BUCHWA IRON ORE MINING COMPANY (PVT) LTD

Versus

THE SHERIFF OF THE HIGH COURT, GWERU

And

OPTIMAX MINING RESOURCES (PVT) LIMITED

IN THE HIGH COURT OF ZIMBABWE

DUBE-BANDA J

BULAWAYO 29 JULY 2022 & 13 OCTOBER 2022

Opposed court application

M. Ndlovu for the applicant

B. Chipadza for the 2nd respondent

DUBE-BANDA J:

Introduction

This is an application to set aside a sale in execution. The applicant seeks an order couched in the following terms:

That the sale in execution of iron ore fines stockpile at Mukwakwe Plan site 338, Mberengwa in Midlands Province done by the 1st respondent in execution of court order under case number HC 12423/15 be and is hereby set aside.

Respondents to pay costs of suit on an attorney and client scale.

The first respondent is the Sheriff of the High Court. In the execution of a court order in HC 12423/15 the Sheriff attached iron ore fines stockpile (property) and sold it to the second respondent.

The application is opposed by the second respondent. The first respondent did not file a notice of opposition. He filed a detailed Report.

The factual background

This application will be better understood against the background that follows. In case number HC 12423/15 one Absalom Nganunu Sibanda (judgment creditor) obtained a judgment against a company called Na Jing Zhou Resources Africa (judgment debtor). The judgment creditor sued out a writ of execution and in pursuance thereof the Sheriff on the 12 October 2016 attached the property it says belonged to the judgment debtor. The Sheriff did not receive any claim from a third party. As a result the property was sold by public auction on the 26 November 2016 and the second respondent was declared the highest bidder. The 2nd respondent paid the purchase price. The proceeds were remitted to the judgment creditor’s legal practitioners in satisfaction of the debt.

On the 26 February 2021 the applicant addressed a letter to the Sheriff indicating an interest in the property that was attached and sold in execution. The applicant avers that it is the owner of the property attached and sold by the Sheriff to the second respondent and that it was not a party in case number HC 12423/15. It is contended that the property was sold in error on the basis of a mistaken belief that it belonged to the judgment debtor.

In his report the sheriff says he received instructions from Musengi & Sigauke Legal Practitioners acting on behalf of Absalom Nganunu Sibanda v Na Jing Zhou Resources Africa under HC 12423/15.  In executing the instructions he attached movable property belonging to Na Jing Zhou Resources Africa (Pvt) Limited. The property was attached on the 12 October 2016. The sale was advertised in the local newspaper and sold in situ on 26 November 2016. The property was sold and the proceeds remitted to the judgment creditor’s legal practitioners. The Sheriff did not receive any third party claims of the property. The applicant showed interest in the property five years after it was sold.

It is against this background that the applicant has launched this application seeking the relief mentioned above.

The preliminary points

At the commencement of this hearing I informed counsel that in this case I shall adopt a holistic approach. This approach avoids a piece-meal treatment of the matter, in that the preliminary points are argued together with the merits, but when the court retires to consider the matter it may dispose of the matter solely on preliminary points despite that they were argued together with the merits.

The second respondent took a number of preliminary objections which were subject of argument in this matter. It was contended that this application was not properly before court as it was not in accordance with the rules of court; that it was filed out of time and therefore it has prescribed; that there are material disputes of facts which cannot be resolved on the papers; and that there was a non-joinder of interested parties. The second respondent abandoned the preliminary point being that this application was not properly before court as it was not in accordance with the rules of court.  No further reference shall be made to this point.

I now turn to deal with the preliminary points.

Prescription

Regarding prescription it was contended that this matter has prescribed. In its opposing affidavit the second respondent averred that an application of this nature ought to have been filed within fifteen days from the date on which the highest bidder was declared. The sting of the evidence in the opposing affidavit in support of the defence of prescription turns on the applicant’s failure to comply with r 359 of the High Court Rule, 1971.

In its heads of argument the second respondent made a turn and anchored the defence of prescription on the facts that the property was attached on the 12th October 2016 and sold on the 26 November 2016. It was then contended that this application was filed on the 10th September 2021, i.e. five years after the sale and therefore the matter has prescribed.

The applicant in its answering affidavit avers that it only became aware of the fact that someone was claiming ownership of the property in February 2021 and became aware of the identity of the 2nd respondent on the 12th April 2021. It was argued that in terms of section 16(3) of the Prescription Act [Chapter 8:11] the prescription started to run on the 12 April 2021. It was argued that the claim has not prescribed and therefore this point in limine has no merit and must be dismissed.

Section 16(3) of the Prescription Act [Chapter 8:11] provides this:

A debt shall not be deemed to be due until the creditor becomes aware of the identity of the debtor and of the facts from which the debt arises:

Provided that a creditor shall be deemed to have become aware of such identity and of such facts if he could have acquired knowledge thereof by exercising reasonable care.

In terms of section 12 of the Prescription Act, prescription begins to run as soon as the debt is due. A debt is due when it is immediately claimable or recoverable. If the debtor has knowledge of the identity of the debtor and of the facts from which the debt arises, the debt is deemed to be due, as by that stage the creditor acquires a complete cause of action for the recovery of the debt. In terms of section 12(3) of the Prescription Act, the creditor is deemed to have had knowledge of the identity of the debtor and of the facts from which the debt arises if it could have been acquired by the exercise of reasonable care.

In a plea of prescription the onus is on one who alleges that the claim has prescribed. When one speaks of the need to discharge an onus, it immediately becomes clear that there is an evidentiary burden that must be met. See: Van Brooker v Mudhanda & Another AND Pierce v Mudhanda & Another SC 5 / 2018; Makgatho v Old Mutual Life Assurance Co Zimbabwe LTD 2015 (2) ZLR 5. In casu there is no evidence that the applicant became aware of the identity of the debtor before 12 April 2021 and of the facts from which the cause of action arose before February 2021. There is no evidence from which the applicant can be deemed to have had knowledge of the identity of the 2nd respondent and of the facts from which the cause of action arose before the dates contended by the applicant. There is no evidence that the complete set of facts necessary for the applicant to institute this application were known to it before February 2021. Therefore the second respondent has not discharged the onus of showing that this matter has prescribed. In the circumstances the preliminary point of prescription has no merit and is refused.

Material disputes of fact

The second respondent contended that there are material dispute of facts which cannot be resolved on the papers filed of record. It was contended further that the ownership of the property by the applicant is disputed and this issue cannot be resolved on the papers. It was argued that by its own admission, the applicant transferred ownership of the property to the Ministry of Industry and Commerce and in an agreement before court marked AM2 it is referred to as the previous owner. It was submitted further that previous owners do not have any rights in their former property. It was contended that there is no documentation to show that between 2013 and 2016 the ownership of the property reverted back to the applicant. It was contended further that it was not disputed that between 2013 and 2016 the property was owned by NJZ Resources who purchased it from the Ministry of Industry & Commerce. It is said that when the property was attached it was in the hands of the owners i.e. NJZ Resources.

The applicant contends that the first issue for determination is whether the applicant is still the owner of the property.  And the second issue is whether there is need for oral evidence for the court to determine the issue of ownership. In the founding affidavit it is averred that in the agreement marked AM2 the applicant was described as the previous owner of the property because it had temporarily passed on ownership to the Ministry of Industry and Commerce for the sole purpose of selling its products to the international customers. The applicant is said to have asked the Minerals Marketing Corporation of Zimbabwe (MMCZ) to sell iron ore fines on its behalf because it was under sanctions and could not access the international market. It was averred that the agreement marked AM2 was cancelled as the NJZ Resources failed to meet some of the conditions of the agreement. The amount deposited by NJZ Resources into the applicant’s bank account was refunded and that since the agreement was cancelled the property by operation of law reverted to the applicant. It was argued that assuming that there exists a material dispute of fact, the court should take a robust approach and resolve the matter on the papers.

In Supline Investments (Pvt) Ltd v Forestry Co of Zimbabwe 2007(2) ZLR 280 (H) @ 283C-D the court held thus:

In my view, it is the settled practice of this court for which authority is hardly necessary that for a dispute of fact to deter a court from resolving a dispute before it, the dispute must be material.

The need on the part of the court to be robust is now common place, the exhortation having been made by Gubbay JA (as he then was) In Zimbabwe Bonded Fibreglass (Pvt) Ltd v Peech 1987 (2) ZLR 338 (S) at 339C–D. The exhortation was taken up and endorsed by Sandura JA in van Niekerk v van Niekerk & Ors 1999 (1) ZLR 421 (S).

It remains the practice of this court to endeavour to resolve applications without calling evidence where to do so will not result in the miscarriage of justice. I am to be guided by this practice in determining the application before me.

From the decided cases it is evident that a dispute of fact arises where the court is left in a state of reasonable doubt as to which course to take in resolving the matter. The alleged dispute of fact in the present case pertains to the ownership of the property. A closer look at the Memorandum of Agreement between Minerals Marketing Corporation of Zimbabwe; Vusani Grey Diamond Sibanda and Seamatters (Pvt) Limited (AM2) and the other documents on record the issue of a material dispute is just a red herring. The documentary evidence is clear and unambiguous. Taking a robust and common sense approach I come to the conclusion that there are no material disputes of fact in respect of the ownership of the property. This point in limine has no merit and is dismissed.

Locus standi

Locus standi relates to whether a particular applicant is entitled to seek redress from the courts in respect of a particular issue. Under the common law on standing, an applicant must show a direct and substantial interest in the subject matter and the outcome of the application. In Sibanda & Ors v The Apostolic Faith Mission of Portland Oregon (Southern African Headquarters) Inc SC 49/18, HLATSHWAYO JA considered the principle of locus standi and stated the following:

It is trite that locus standi is the capacity of a party to bring a matter before a court of law. The law is clear on the point that to establish locus standi, a party must show a direct and substantial interest in the matter. See United Watch & Diamond Company (Pty) Ltd & Ors v Disa Hotels Ltd & Anor 1972 (4) SA 409 (c) at 415 A-C and Matambanadzo v Goven SC 23-04.

In Zimbabwe Stock Exchange v Zimbabwe Revenue Authority SC 56/07, MALABA JA (as he then was) said:

The common law position on locus standi in judicio of a party instituting proceedings in a court of law is that to justify participation in the action; the party must show that he or she has a direct and substantial interest in the right which is the subject matter of the proceedings and the relief sought.

The authorities show that it is settled that the principle of locus standi is concerned with the relationship between the cause of action and the relief sought. Thus, a party needs to show that they have a direct, personal and substantial interest in the matter in contention.

The second respondent avers that the applicant has no locus standi in this matter. The contention is that the applicant is not the owner of the property. This point in limine can easily be disposed of by stating that to the extent the applicant alleges that it is the owner of the property it has standing in this matter.

The issue whether the applicant is the owner of the property in issue turns on the merits of the matter. The issue of ownership cannot be decided as a preliminary point simply because it is the anchor of the applicant’s case. It is unthinkable how the applicant can be said it does not have locus standi in a matter where it claims ownership of the property attached and sold by the Sheriff. Whether the claim succeeds or not is not the issue, the issue is it has a claim on the property and therefore it has a direct and substantial interest in this matter. This preliminary point has no substance. In the circumstances the preliminary point on locus standi has no merit and is refused.

Non joinder

The second respondent argued that the non-joinder of the Ministry of Industry & Commerce (Ministry), NJZ Resources Africa, NJZ Resources Limited and the Minerals Marketing Corporation of Zimbabwe (MMCZ) is fatal to this application. The applicant contended that the non-joinder of these parties is inconsequential to the relief sought in this application.

It is trite that the test for joinder is whether or not a party has a 'direct and substantial interest' in the subject matter of the action, that is, a legal interest in the subject matter of the litigation which interest may be prejudicially affected by the judgment of the court. In casu I take the view these parties have an interest in this matter, and not a peripheral one as argued by the applicant. However on the facts of this case the court is able to determine the issues or questions in dispute so far as they affect the rights and interests of the persons who are parties to this application. See: r 32 (11) of the High Court Rules, 2021. In the circumstances of this case this point in limine has no merit and is refused.

Points in limine taken by the applicant

In its heads of argument the applicant took a preliminary objection being that paragraphs 3 and 4 of the opposing affidavit contained legal principles and not the facts. It was contended that such was inappropriate and therefore the offending paragraphs must be expunged from the record. Paragraph 3 dealt with a point in limine that the application was not properly before court as it was not in accordance with the rules of court. Paragraph 4 dealt with the point in limine that the application had been filed out of time and it had prescribed. The second respondent abandoned the point in limine in paragraph 3 of its opposing affidavit and thus rendering redundant the applicant’s complaint relating to it. At the hearing Mr Ndlovu did not make any oral submissions in support of the point in limine regarding paragraph 4 and I took this as an indication that this point was not being pursued and therefore abandoned. No further reference shall be made to these points in limine.

I now turn to consider the merits of the matter.

Merits

For the applicant it was argued that there was no rule in terms of the rules of court which provides for the setting aside of the Sheriff’s sale after the sale has been confirmed. It was contended further that such does not mean that a person whose property had been attached and sold in execution and who was not aware of the development until the property was disposed of does not have a remedy.  It was contended that a person with an interest in the property attached and sold in execution and who was out of time in terms of the rules to have the sale set aside may challenge such sale by virtue of the inherent powers of the court under the common law.  It was argued that a court may rescind and set aside such sale in execution. For this position the applicant cited the case of Mapedzamombe v Commercial Bank of Zimbabwe & Anor 1996 (1) ZLR 257 (S).

On the merits the second respondent identifies the issue for consideration as whether or not the applicant is the owner of the property and has the rights and interest in terms of the common law (rei vindicatio) over the said property. It is argued that the applicant is not the owner of the property and has no recourse at law to institute proceedings to recover the property. It was argued further that the owner was the Ministry of Industry and Commerce who transferred the property to the judgment debtor. The property was then sold in execution to the second respondent. It was argued further that the applicant failed to prove ownership of the property, failed to prove that the property did not belong to the judgment debtor, and failed to prove that the property was undervalued. The 2nd respondent prayed that the application be dismissed with costs on a higher scale.

The question that presents itself is whether a third party who failed to file a claim leading to interpleader proceedings until the property is sold in execution is left without a remedy. No doubt the rules of court provide a clear procedure for a person whose property had been attached on the basis of a judgment debt of another to vindicate his property. The procedure is in r 63 of the High Court Rules, 2021. It is the interpleader procedure. The interpleader procedure is best suited to deal with such ownership contestations arising from a writ of execution. It is designed to facilitate a quicker and cheaper resolution of ownership disputes arising from the Sheriff’s executions.

It seems to me, that although r 63 does not specify a time limit in which a party may lodge a claim with the Sheriff leading to an interpleader proceedings, what was envisaged was that such a claim must be filed prior to the sale of the attached property. I say so because once the property is sold it will no longer be held by the Sheriff which is a basis of instituting interpleader proceedings. Put differently, the interpleader proceedings are predicated on the property subject to execution being held or under the control of the Sheriff. Once the property is no longer held or under the control of the Sheriff, no interpleader proceedings may be instituted.

The question is whether a third party aggrieved by a Sheriff sale on the basis that the property sold did not belong to the judgment debtor but to itself remains without a remedy. By parity of reasoning one may look at the sale of immovable property. Regarding immovable property a judgment debtor aggrieved by the sale of its property and where the sale has been confirmed and the property transferred to the purchaser may proceed to seek the setting aside such sale by invoking the principles of the common law.  See: Mapedzamombe v Commercial Bank of Zimbabwe 1996 (1) ZLR 257 (S); Morfopoulos v Zimbabwe Banking Corporation & Ors 1996 (1) ZLR 626 (H).

Again by parity of reasoning one may consider the setting aside of the Sheriff’s distribution. A person who is out of time to make an application to have a Sheriff’s distribution set aside or amended is not without a remedy. He may challenge the distribution plan by virtue of the inherent powers of the court under the common law to rescind or set aside judgments. See: Barclays bank of Zimbabwe Limited v Sheriff of Zimbabwe & Anor 2000 (2) ZLR 143 (S). The same reasoning, in my view, applies to a situation where a third party who could no longer file a claim leading to interpleader proceedings is aggrieved by the sale in execution of movable property on the contention that such property does not belong to the judgment debtor but to itself. Mr Ndlovu made this submission and I agree with him. The court has an inherent power to regulate and protect its processes.

There appears to be no case law dealing specifically with the common law power of the court to set aside a sale of immovable property at the instance of a third party alleging that the property did not belong to the judgment debtor but to itself. I agree that the law cannot leave such a party in the middle of nowhere and without a remedy. The common law may in an appropriate case come to the rescue of such a litigant.

The applicant’s claim is anchored on the principle of rei vindicatio. But because the property has been sold by the Sheriff the applicant seeks that the sale be set aside. It is in this regard that it argues that the principles that apply in an application for rescission of a default judgment should also apply to such an application. Cut to the bone the applicant seeks the rescission of the sale so that the property is restored to it.

The rei vindicatio principle is premised on the notion that an owner may not be deprived of his or her property against his or her will, and is entitled to recover property from any person who retains possession of it without his or her consent. Therefore, no other person may withhold property from the owner unless he or she is vested with some right enforceable against the owner such as a right of retention against the owner or a contractual right.  It is trite law that possession should also be lawful in order to be a valid defence against the rei vindicatio. An owner who institutes the rei vindicatio is required to allege and prove that he or she is the owner of the thing; the thing was in the possession of the defendant at the commencement of the action; and the thing which is vindicated is still in existence and clearly identifiable. The onus to establish any right to retain possession of the thing always rests on the defendant. See: Nzara & Ors v Kashumba N.O. & Ors SC 18/2018.

The principles of rescission of judgment were enunciated in Barclays bank of Zimbabwe Limited v Sheriff of Zimbabwe & Anor 2000(2) ZLR 143 (S) where the court said:

What is to be determined, adopting the wide discretionary approach advocated in de wet’s case, is whether the appellant succeeded in proving the existence of sufficient cause for setting aside the plan of distribution. The power to rescind is one entrusted to the discretion of the court. Its exercise, in general, is influenced by notions of justice and fairness, having regard to all the facts and circumstances of the particular case.

Having regard to the facts and circumstances of this case, including the reasonableness or otherwise of the explanation for the default, was the learned judge right in refusing to set aside the plan of distribution?

For the applicant to succeed in its application to have the sale rescinded and set aside it must first show that it is the owner of the property. This is in sync with the applicant’s anchor of the application i.e. rei vindicatio. It appreciated that for it to succeed to have the Sheriff’s sale set aside it must show that it is the owner of the property.

The applicant by its own version avers that the Ministry of Industry & Commerce (Ministry) was said to be the title holder of the property. NJZ Resources Limited as the purchaser, NJS Resources Africa Ltd was a local subsidiary of NJZ Resources Limited, and Minerals Marketing Corporation of Zimbabwe as the selling agent. The applicant was described as the previous owner of the property. It is further averred that the applicant was described as the previous owner because it had temporarily passed ownership of the property to the Ministry of Industry and Commerce for the sole purpose of selling its products to the international market. It was contended that the Memorandum of Agreement was worded to exclude the applicant as a sanctions bustling mechanism. It was further contended that the Memorandum of Agreement was cancelled as NJZ Resources Limited failed to meet some of the conditions of the agreement and therefore by operation of law the ownership of the property reverted back to the applicant.

It is clear that the applicant is not the owner of the property. There is no evidence of temporary passing of the ownership to the Ministry. I take the view that whatever the reasons of passing on the ownership of the property to the Ministry are of no moment. The applicant seized to be the owner of the property when it passed ownership to the Ministry. Even if the Memorandum was cancelled the ownership of the property would not revert to the applicant, because it was not the last owner before the Memorandum. Again the issue of sanctions busting is not borne out by the papers on record, it is a mere ipse dixit of the applicant. It is for this reason that I will not even deal with whether the issue was of sanctions avoidance, if proved would provide a lawful reason for the applicant to claim ownership of the property.

The applicant is not the owner of this property. It will be contrary to the notions of justice and fairness to rescind and set aside the sale when the applicant has not shown by acceptable evidence that it is the owner of the property. Again in circumstances of the particular case it will be unfair to set aside the sale when the second respondent acquired the property for value. I agree with the applicant’s submissions regarding the applicable legal principles. The missing link is the evidence in support of this application. This application fails on the first hurdle. It is for these reasons that this application cannot succeed.

I am also of the view that in the circumstances of this matter, there is no reason in both the law and fairness to depart from the principle that costs should follow the results. The second respondent had sought costs on a legal practitioner and client scale.  To mulct a litigant with punitive costs requires a proper explanation grounded in our law. These are costs that are meant to be penal in character and are therefore supposed to be ordered only when it is necessary to inflict some financial pain to deter wholly unacceptable behaviour and instil respect for the court and its processes. In casu a case has not been made for costs on a legal practitioner scale.

In the result, I order a follows:

The application be and is hereby dismissed.

The applicant shall pay the costs of suit.

Mutatu & Partners applicant’s legal practitioners

B. Chipadza Law Chambers 2nd respondent’s legal practitioners