Foundation College v Additional Sheriff N.O. & Ors

### Preamble
1
HB 144/21
HC 706/20
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FOUNDATION COLLEGE

Versus

ADDITIONAL SHERIFF N.O.

And

WIRIRAI MATEVEKE N.O.

And

REALGATE PROPERTIES (PVT) LTD

And

PROGRESSIVE COMMERCIAL TRADES

ALLIED WORDERS UNION OF ZIMBABWE

And

MTHULISI HLABANGANA

IN THE HIGH COURT OF ZIMBABWE

DUBE-BANDA J

BULAWAYO 19 JULY 2021 & 29 JULY 2021

Court application

Adv. L Nkomo, for the applicant

Ms. V Chagonda, for the 5th respondent

DUBE-BANDA J: This is a court application for a declaratur. Applicant seeks a declaratory relief couched in the following terms:

It is ordered that:

The sale of applicant’s bus by the 1st respondent pursuant to the court order under cover of case number HC 2576/18, obtained by the 2nd respondent under a sale conducted by the 3rd respondent be and is hereby set aside.

Alternatively, to order in paragraph (a) above it be and is hereby declared that the sale of the applicant’s bus is and was a legal nullity.

The applicant be and is hereby granted the right to collect its bus through 1st respondent and with the aid of the Zimbabwe Republic Police if need be, from whoever has physical possession of the bus or property.

The 1st respondent be and is hereby directed to comply with paragraph (b) above in the recovery of the bus and restoring control, transfer and ownership to the applicant.

1st, 2nd, 3rd, 4th respondents did neither filed opposing papers, nor participated in these proceedings. The application is opposed by the 5th respondent.

Factual background

This application will be better understood against the background that follows. The events leading to this application arose from a labour dispute between the applicant (College) as an employer and some of its employees who were represented by a trade union called Progressive Commercial Traders Allied Workers Union of Zimbabwe. The labour dispute was conciliated by one Wiriranai Mateveke (2nd respondent), who issued an award in favour of the employees for payment of a certain sum of money.

2nd respondent made an application to the Labour Court seeking confirmation of the award pursuant to the provisions of the Labour Act [Chapter 28:01].  The College was the respondent. On the 18th July 2018 the Labour Court confirmed the award. This was a consent order as the parties had agreed on the amounts payable to the concerned employees.  The College was ordered to pay the sum of $148 741.47c. In terms of the Labour Court order, the College was given a payment plan.

Subsequent to the confirmation of the award, a chamber application was filed with this court in HC 2576/18, seeking an order registering the Labour Court order for the purposes of enforcement. The application was filed in the name of the Wiriranai Mateveke, and the founding affidavit was allegedly deposed by him. The application was granted on the 13 November 2018. In HC 2576/18 applicant was ordered to pay the 2nd respondent the sum of US$148 741.47. In pursuance of the order in HC 2576/18, a writ of execution was issued against the College. On the 3rd April 2019, the Sheriff placed under attachment the College’s school bus registration number ADC 4873. The bus was sold by auction to the 5th respondent. On the 13 February 2020, this court in HC 2968/19 rescinded the order in HC 2576/18. It is against this background that applicant has launched this application seeking the relief mentioned above.

The law and the facts

On the papers before me and the heads of arguments together with the oral submissions, the following issues arise for determination. Firstly whether the order in HC 2576/18 and the subsequent sale of the bus was null and void ab initio and secondly what rights, if any does a bona fide purchaser of property at a sale in execution where the judgement in terms whereof the sale was effected, has been subsequently rescinded has in respect of the purchased property. To crown it all, whether a case has been made for a rei vindicatio.

Was the order in HC 2576/18 null and void ab initio? Applicant contends that the order in HC 2576/19 was obtained by means of fraud and misrepresentation. It is averred that the founding affidavit was forged and the terms of the Labour Court order were altered. It is contended that the founding affidavit filed in support of the application for registration was purportedly signed by the 2nd respondent, when it was not. It is argued that the order in HC 2576/18 was null and void ab initio, as well as the subsequent sale in execution. 2nd respondent deposed to an affidavit that is before court. I reproduce his affidavit in full. It is this:-

Affidavit

I, Wiriranai Mateveke, I.D. number 66031797-R66, hereby make oath and state as follows:

I was applicant in the application for confirmation of the draft ruling in LC/B/LRA/226/18 (order No. LC/MT/387/18). The affidavit purportedly deposed by me in the registration of this Labour Court award at the High Court in HC 2576/18 is definitely not the original affidavit deposed by me.

I was not involved in the application for a writ of execution under HC 2576/18, at the High Court and I distance myself from the same.

I further deny deposing the affidavit, sound in US United States dollars that was presented at the High Court in the application in HC 2576/18, and distance myself from resultant High Court order. I disown that affidavit, and swear that it is a misrepresentation.

Someone tempered with my affidavit. I hereby swear, under oath, that someone altered details on the first page after my signature on the second and last one in order to give the High Court a wrong impression of the actual figure the institution (Foundation College) owes.

I further swear, under oath, that the amount reflected on my application – as confirmed by Labour Court – was in RTGS local currency not US $. Whoever approached the High Court in my name in HC 2576/18, with that fraudulent affidavit had no right to do so, and certainly this misrepresentation without my knowledge whatsoever as the applicant. (My emphasis).

Has applicant made out a good case for vindicating the bus from the 5th respondent? I take the view that the following facts are either common cause or not seriously disputed: that the order in HC 2576/18 was granted on the 13 November 2018; the writ of execution was issued on the 27 February 2019; the attachment of the bus was effected on the 3rd April 2019; the attached bus was removed on the 28 November 2019; it was sold by public auction on the 19 December 2019, and 5th respondent was confirmed the highest bidder; the sale was conducted and concluded in terms of the law; 5th respondent paid the bid price and took the bus into his possession;  an application for rescission of judgment was filed in terms of rule 63; and HC 2576/18 was rescinded on the 13 February 2020. This application was filed on the 25 March 2020.

Applicant contends that the principles to the common law remedy of rei vindicatio are well settled. It is argued that to succeed in the rei vindicatio the owner is required to allege and prove that he or she is the owner of the thing; and that the thing was in possession of the defendant or respondent at the time that the action or application was commenced; and that the thing sought to be vindicated is still in existence and clearly identified. The judgment in Nyahora v CFI Holding Ltd SC 81/2014 and Savanhu v Hwange Colliery Company Ltd SC 8/2015, was cited as authority for this proposition.

On the other hand, the 5th respondent contends that property sold and delivered to a bona fide purchaser at a judicial sale cannot be vindicated.  Badenhorst, Pienaar & Mostert (5th edition) Silberberg and Schoeman's the Law of Property 261 is cited as authority for this proposition. It is said:

Property sold at judicial sales cannot, after delivery in the case of movables or registration in the case of immovables, be vindicated from a bona fide purchaser. Even when an article is sold by mistake as belonging to a judgement debtor, the true owner cannot vindicate it from a bona fide purchaser (though Matthaeus states that he or she can do so on refunding the purchase price to the purchaser).

It is averred that it is common cause that 5th respondent is a bona fide purchaser and that the bus was delivered and registered in his name. It is further contended that the judicial sale was conducted in accordance with the law. The recession in HC 2576/18, was granted some two months after the sale and its confirmation. It is argued that, on the facts of this case the rei vindicatio is not available to then applicant.

What emerges from the affidavit of the 2nd respondent is that:  he signed an affidavit in an application (HC 2576/18) for the registration of the Labour Court order, with this court. He avers though that someone tempered with his affidavit by altering details on the first page after his signature,  on the second and last one pages in order to give this court a wrong impression of the actual figure the college owed. He disputes that there was reference to amount of United Stated dollars in his affidavit. In his affidavit the amount was in local currency, i.e. RTGS dollars.  It is clear from the 2nd respondent’s affidavit that the signature in the affidavit filed in support of the registration application was indeed his signature.

Applicant contends that the order in HC 2576/18, was null and void ab initio. What is telling though is that the application for recession in HC 2968/19 was made in terms of rule 63 of the High Court Rules, 1971. I take the view that if the order was null and void ab initio, as the applicant contends, the application would have been made in terms of rule 449.  This is the death knell to the argument that the order in HC 2576/18 was a null and void ab initio. It was not. On the date of the sale there was a valid court order.

A Sheriff may not sell movable property attached pursuant to a duly issued writ of execution otherwise than by way of a public auction and his authority is created and circumscribed by the provisions Order 40 of the High Court Rules, 1971. Rule 338 says:

338. Conditions regarding sale of movable property

Unless the court or a judge otherwise directs, or the parties agree to the contrary, any movable property sold in execution shall be sold publicly and for ready money by the sheriff or his deputy to the highest bidder at or near to the place where the same was taken or to which the same has been removed as aforesaid as may be advantageous for the sale thereof; and the said sheriff or his deputy shall publish notice of the sale in a newspaper circulating in the district. (My emphasis).

It is not in dispute that the bus was sold by public auction for ready money to the highest bidder. Applicant contends no valid ownership rights accrued to the 5th respondent arising from the impugned sale in execution which was null and void ab initio. I do not agree. The sale was a valid sale complying with the applicable rules of court. The Sheriff’s report confirms this position.

The high-water mark of the applicant’s case is that the order upon which the sale in execution was effected was itself a null and void ab initio and for that reason applicant was entitled to vindicate the bus. The relief sought by the applicant is predicated on its alleged entitlement to recover the bus by means of the rei vindication, on the basis that the order in HC 2576/18, pursuant to which the writ was issued was itself a nullity. Our courts lay stress on the qualified inviolability of completed sales in execution. I consider this matter through the lenses of the principle stated in Ngirazi & Ors  v  Rensburg & Ors SC 89/21 that the courts of law will not readily interfere with judicial sales in execution in order to protect their efficacy especially after confirmation or transfer. The rationale for this principle is that sales in execution should not be easily interfered with after they have been confirmed because this can render the execution process nugatory as the general public will lose confidence in the same. Judgment debtors are given ample time to settle their debts and if they fail to utilize such opportunities they should not be allowed to frustrate the consequent process that follows. See: Kanoyangwa v Messenger of Court & Others SC 68/06; Walezim Investments (Pvt) Ltd v The Sheriff of the High Court SC 44/21. The bus was sold by public auction and for ready money. I have found on the facts that the order in HC 2576/18 was not null and void ab initio. At the time of the sale in execution the order in HC 2576/18 was valid. The sale was a valid sale complying with the applicable rules of court.

What has exercised my mind is what rights, if any, does a bona fide purchaser of property at sales in execution where the judgement in terms whereof the sale in execution was effected, has been subsequently rescinded? The current matter concerns the situation where a judgement is rescinded after the property sold at the sale in execution had been delivered to a bona fide purchaser, who had no knowledge of the claims of the owner at the time of taking delivery of the bus and registering it in his name.

In Knox v Mofokeng and Others 2013(4) SA 46 (GSJ) the court faced with a similar case of a bona fide purchaser who received transfer of property and yet rescision of judgment was ordered refers to three factual scenariors.  It states that :

It appears from the analysis of the case law and the relevant common law principles dealt with below that the judgment debtor’s entitlement to claim restoration of the property once the judgment, in terms whereof the property had been sold in executiion, has been rescinded, depends on the factual circumstances present at the time of rescision.  At least three factual scenarios can in general be envisaged, although other factual permutations are possible.  The first scenario is where the sale in execution had not been perfected by delivery in the case of movables and registration of transfer in the case of immovables.  As indicated above, in such event, the owner is in principle entitled to claim recovery of the property in question following the rescision of the judgment.  See Vosal Investments (Pty) Ltd v City of Johannesburg 2010 (1) SA 595 (GSJ); Jubb v Sheriff, Magistrate’s Court, Inanda District: Gottschalk v Sheriff, Magistrate’s Court Inanda District 1999 (4) SA 596 (D) at 605F-G.  The second scenario is where the sale in execution had been perfected by delivery in the case of movables or registration of transfer in the case of immovables, but the purchaser had knowledge of the proceedings instituted by the judgment debtor for the rescission of the judgment in question prior to delivery or registration of transfer.  In such event, the owner is also in principle entitled to recovery of the property in question, even where transfer had already been effected.  See the Vosal Investments judgment, above, at paragraph 16.  In third scenario is where the sale in execution has been perfected by delivery in the case of movables or by registratiion of transfer in the case of immovables to a bona fide purchaser who had no knowledge of the judgment debtor’s proceedings for the rescission of the judgment or where transfer of ownership has been effected prior to the institution of the rescission proceedings.  The conclusion reached in the analysis below is that where transfer of ownership had been effected pursuant to the sale in execution by the time the judgment has been rescinded, the judgment debtor is not entitled to recover possession of the property in question, unless it can be established that the judgment and/or sale in execution constituted a nulity.”

In casu, the case falls on the third scenario postulated in the above case. The sale in execution has been perfected by delivery to a bona fide purchaser who had no knowledge of the aplicant’s proceedings for the rescission of the judgment. Delivery of the bus had been effected pursuant to the sale in execution prior to the judgment being rescinded.  The applicant is not entitled to recover possession of the bus in question, unless it can be established that the judgment and/or sale in execution constituted a nulity.” I have found that at the time of the sale in execution the order in HC 2576/18 was valid, and that the sale was a valid sale complying with the applicable rules of court. Applicant is not entitled to vindicate the bus from the 5th respondent. Again, an action rei vindicatio does not lie against a bona fide purchaser at a sale in execution. See: Gwanangura v Founders & Anor SC 62-00. Having found that rei vindicatio is not available against the 5th respondent.  It is not necessary for me to consider 5th respondent’s defence of estoppel.

What remains to be considered is the question of costs. The general rule is that in the ordinary course, costs follow the result. I am unable to find any circumstances which persuade me to depart from this rule. 5th respondent claims costs on a punitive scale. On the facts of this case, there is no basis to order such costs. Accordingly, the applicant must bear the 5th respondent’s costs on a party and party scale.

Disposition

Applicant has failed to make a good case for the order it seeks. In the result, I order as follows: this application is dismissed with costs of suit.

T. Hara & Partners, applicant’s legal practitioners

Calderwood, Bryce- Hendire & partners, 5th respondent’s legal practitioners