Harare Motorways (Private) Limited and African Banking Corporation of Zimbabwe v The Sheriff of the High Court of Zimbabwe N.O. and Doves Funeral Assurance Company Limited and Bluestar Logistics (Private) Limited and The Registrar of Deeds N.O.

### Preamble
1
HH 684/22
HC 4348/19
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HARARE MOTORWAYS (PRIVATE) LIMITED

and

AFRICAN BANKING CORPORATION OF ZIMBABWE

versus

THE SHERIFF OF THE HIGH COURT OF ZIMBABWE N.O.

and

DOVES FUNERAL ASSURANCE COMPANY LIMITED

and

BLUESTAR LOGISTICS (PRIVATE) LIMITED

And

THE REGISTRAR OF DEEDS N.O.

HIGH COURT OF ZIMBABWE

MAKOMO J

HARARE, 11 May 2022 & 5 October 2022

Opposed Application

T. Mpofu, for the 1st applicant

R.G. Zhuwarara, for the 2nd applicant

R. Goba, for the 2nd respondent

J. Makanda, for the 3rd respondent

MAKOMO J:

INTRODUCTION

[1]	This is a court application wherein the applicants seek an order declaring the confirmation of sale by first respondent to the second respondent of a certain piece of land unlawful and set aside. As consequential relief to the declaration, applicants pray for an order compelling the first respondent to uplift the caveat placed on the property by him in favour of second respondent.

FACTS

[2]	It is necessary that I lay out the full facts of this case to put the dispute into perspective. In 2016 under case number HC4137, the second applicant a bank, obtained a judgment for repayment of a debt owed by the first applicant, Kukura Kurerwa Bus Service (Pvt) Ltd (KK) and two others for an undisclosed amount of money. A writ of execution was duly issued leading to attachment of several of the judgment debtors’ immovable properties including a certain piece of land held by first  applicant under deed of transfer no.6366/88 also known as Stand no. 173 Willowvale Township of Willowvale situate in the District of Salisbury (“the property”).

[3]	Following attachment, a public auction was held by the first respondent where the property fetched $675 000 after the second respondent was declared the highest bidder. As a requirement of the law, confirmation of the sale would only follow upon lapse of 15 days without objections to the sale having been received by the first respondent. When no objections had been filed, the judgment debtors, particularly first respondent were desirous that the sale go through as they considered the amount to be substantial enough to reduce the debt owed to second applicant. Second applicant as the dominus immediately wrote to the first respondent requesting him to confirm the sale as there were no objections filed. In the meantime and before confirmation, KK was placed under provisional liquidation culminating in a final liquidation order on 31 October 2018.

[4]	Following the placement on provisional liquidation of KK, the first respondent issued a directive that a moratorium was now in operation in respect of execution of judgments against the property of KK, first applicant and other judgment debtors involved and that all monies paid by the highest bidders be refunded, including the second respondent. This sparked a protest from second applicant who argued that the properties affected by the moratorium were those of KK and not its property, as such, the sale was supposed to go ahead. The first respondent refused to budge and insisted that he was now functus officio on the matter as he had already made his ruling and only a court order would reverse his decision.

[5]	Faced with the above situation and the stark reality that the money owed stood to be wiped off of its value by inflation, the second applicant as the judgment creditor engaged the first applicant to consider selling the property itself as this was the only available course of action beneficial to both parties given the position taken by the first respondent. They agreed that parties find a buyer for the property for immediate settlement of the debt. To this end, applicants withdrew the original title deeds which had been handed over for execution and the first t respondent obliged. At that point, second applicant also advised first respondent, through a letter, that it was also withdrawing its instructions to sell the property from the first respondent.

[6]	Pursuant to this, on 1 February 2019 an agreement of sale between first applicant and third respondent was entered into in respect of the property. The property was sold for $2 000 000 and the debt owed to second applicant was extinguished. All the necessary processes and procedures to effect transfer of the property from first applicant to third respondent’s name were done. However, the process hit a snag and could not be completed for the reason of the caveat that had been placed against the property by first respondent.

[7]	Having advised the first respondent that the debt had now been paid in full and that it was requesting the first respondent to uplift the caveat, the second applicant was advised that the matter was receiving attention of the first respondent. This remained so even after numerous follow-ups on the progress. Only on 19 April 2019 were the lawyers of the first applicant served with a letter from first respondent advising that he had confirmed the sale to the second respondent on 15 March 2019, a period of about eight months after the sale. This was despite his previous directive that the purchase price for the sale in relation to this case were to be refunded as the execution had been put in abeyance following the provisional order for liquidation of KK. It was also against his previous ruling that he had become functus officio when he ruled that the sale to second respondent was cancelled in light of the developments. It is for the above reasons that the applicants have now approached this court for an order declaring the confirmation a nullity and to compel first respondent to uplift the caveat, caveat no.552/16.

ARGUMENTS FOR THE PARTIES

Applicants

[8]	The applicants argue that the sale by public auction conducted by the first respondent was a conditional sale which would only consummate once all the conditions of sale had been met and confirmed in terms of r 359 of the High Court Rules, 1971 (“the Rules”) when no objections against the sale had been filed within 15 days following the sale. The first respondent’s refusal to confirm the sale when there was no cognizable legal impediment was unlawful. This is so because the moratorium only applied in respect of KK’s property and not to that of the first applicant. That notwithstanding, the second respondent however acquiesced in the illegal conduct of the first respondent as it neither protested nor sought to assert its rights, if any. It is further contended by Mr Mpofu that up until the sale was properly confirmed in terms of the rules, it was not “worth a row of beans” meaning that no rights would arise in favour of the second respondent in respect of it.

[9]	It is further argued that once the first respondent cancelled the sale there remained nothing to confirm. He thus became frolicsome when he purported to confirm the sale eight months later. Once the title deeds were returned and the instructions to sell withdrawn, it meant that the first respondent no longer had any mandate to proceed with the sale on behalf of the second applicant. The confirmation was therefore a non-event and must be held to be a nullity.

[10]	Finally, so the contention goes, the caveat can no longer be maintained where there is no sale.

second Respondent

[11]	For the second respondent Mr Goba argued that in a sale in execution by public auction, the purchase is concluded “as soon as the gavel falls”. At that point the highest bidder acquires rights in respect of the sale. This means that the moment the second respondent was declared highest bidder the sale concluded. The first respondent would therefore have no power to cancel the sale as he did. The rights of the second respondent therefore remained extant notwithstanding the pronounced cancellation by the first respondent. The second applicant could also not withdraw the mandate of first respondent for the same reason. He denied that the second respondent ever relinquished its rights flowing from the consummated sale, implicitly or otherwise.

[12]	He further stated that in essence the application is one for rei vindicatio and that where a judicial sale has concluded the rei vindicatio is no longer available. He maintains that whatever happened in the Sheriff’s office, second respondent had no control and was not involved. It is in the position of an innocent purchaser. Finally, he argues that in spite of how the first t respondent conducted himself, the circumstances do not justify the relief being sought by the applicants.

third Respondent

[13]	Third Respondent not being a respondent in the strict sense of the word because it is the ultimate beneficiary of this application did not file a notice of opposition. It merely filed an affidavit wherein it was deposed that it associated itself with the application and stated that it merely wished it recorded that when it purchased the property from applicant, the mandate of the first  respondent had been withdrawn and there was no judicial sale pending.

ISSUES FOR DETERMINATION

[14]	The issues that fall for determination in this case are only two as I see it. These are:

At what point does a purchaser at a sale in execution acquire personal rights of a purchaser?

whether the first respondent acted lawfully when he confirmed the sale of the property to the second respondent?

WHEN DOES A PURCHASER AT A JUDICIAL SALE BY PUBLIC AUCTION ACQUIRE PERSONAL RIGHTS?

[15]	As already alluded to, Mr Goba argued that the contract of sale at a public auction comes into existence the moment the property is knocked down to the highest bidder. Thus, in this case the second respondent acquired rights when he was declared the highest bidder which rights remained extant until the confirmation of the sale was done on 15 March 2019. The second applicant could not therefore withdraw the title deeds and the instructions to sell on a property whose contract had already concluded. It is proper therefore for the first respondent to maintain the caveat on the property to protect the interests of the second respondent. The position taken by Mr Goba is partially correct in so far as it only relates to a simple sale.

[16]	There is however a distinction between the above scenario of a simple auction and an auction subject to conditions. The sale in execution is subject to conditions created in terms of provisions of r 353, r 356 and r 359 (1) as read with (7) and (10) of the Rules. Rule 353 provides as follows:

“353.	Conditions of sale

the conditions of sale shall be prepared by the sheriff, but it shall be competent for the execution debtor, or any other person having interest in the sale to apply to a judge in chambers, after due notice to the sheriff, for amendment of such conditions.”

[17]	This rule merely confirms that the sale by the Sheriff is subject to conditions generated by him which must be met by every bidder. Compliance with these set conditions and others imposed by the other above-mentioned rules is a sine qua non before the highest bidder is confirmed as the purchaser of the immovable property. It is the confirmation which creates iuris vinculum enabling the highest bidder to claim and enforce rights of a purchaser.

[18] Rule 356 provides for the declaration of a purchaser by the Sheriff and states:

“356.	Declaration of purchaser by Sherriff

If the sheriff is satisfied the highest price offered is reasonable, regarding the circumstances of time and place and to the state of property market and that the sale was properly conducted, he shall declare the highest bidder to be the purchaser subject to confirmation as herein prescribed.” (emphasis added)

[19]	The above-cited rule therefore makes it clear that the sheriff’s declaration of the highest bidder to be the purchaser does not conclude the sale until after objections and the processes stipulated in r 359 are complied with. If indeed the highest bidder becomes the purchaser “at the fall of the gavel”, then rules 356 and 359 would become superfluous ‘white elephants’ in the Rules. The rule is that the legislature does not intend to include superfluous words or provisions in a statute.

[20]	Rule 359 provides the process that must be undertaken leading to confirmation of the highest bidder as the purchaser. It is not necessary herein to repeat the rule as its provisions are self -explanatory.  Suffice it to state that following the lapse of the mandatory 15 days after the auction, the sheriff did not receive any objections to this particular sale. The amount was acceptable to the execution creditor and all parties concerned. The Sheriff was therefore enjoined to confirm the sale unless he had received a belated objection in terms of the proviso to r 359 (2). To the contrary, following the placement of KK under provisional and subsequent final liquidation, he cancelled the sale before confirmation. The instruction to the auctioneer to refund all the purchase price that may have been paid at that point was an act of cancellation of the sale relating to the property.

[21]	Mapedzamombe v Commercial Bank of Zimbabwe & Anor 1996 (1) ZLR 257 (SC) expresses the position of our law on the point under consideration at 260C-E:

“Before a sale is confirmed in terms of r 360, it is a conditional sale and any interested party may apply to court for it to be set aside. At that stage, even though the court has a discretion to set aside the sale in certain circumstances, it will not readily do so. See Lalla v Bhura supra at 283A-B. Once confirmed by the sheriff in compliance with r 360, the sale of the property is no longer conditional. That being so, a court would be even more reluctant to set aside the sale pursuant to an application in terms of r 359 for it to do so. See Naran v Midlands Chemical Industries (Pvt) Ltd S-220-91 (not reported) at pp 6-7. When the sale of the property not only has been properly confirmed by the sheriff but transfer effected by him to the purchaser against payment of the price, any application to set aside the transfer falls outside r 359 and must conform strictly with the principles of the common law.”

[22]	In conclusion, I hold that a sale in execution is a conditional sale which creates obligations for the seller and personal rights for the purchaser only upon confirmation. Even so, the sale still remains impeachable on application to the court by any interested person on grounds provided by the Rules, although the court is loath at setting aside such sale. However, once ownership has passed to the purchaser, the purchaser’s position is further strengthened and the recourse provided for by the Rules no longer apply and any affected person will only have the common law to turn to. See Mapedzamombe case (supra) @ 260.

WHETHER CONFIRMATION OF SALE WAS LAWFUL AND OF EFFECT?

[23]	It is common cause that there was a properly conducted sale and the property was knocked down to the second respondent at a price of $650 000. The 15 days within which objections are filed lapsed without any such objection to the sale being filed. At that point it became mandatory for the Sheriff to confirm the sale unless there were any other cogent reason for him not to do so. The judgment creditor pleaded with him to confirm the sale and after numerous correspondences, only did he state his position that the sale would no longer go ahead for the reason of KK’s liquidation. He was mistaken on the application of the moratorium because the property belonged to first  applicant and not KK.

[24]	I must hasten to state that when all this was happening, second respondent remained silent on its position. I have not been directed to any letter for the attention of the Sheriff requesting him to confirm it as the purchaser or any instance where it protested against the cancellation. As if that was not enough, second respondent was again advised by the second applicant that the second applicant was withdrawing its instructions to sell the property from the Sheriff. It merely acknowledged the development with no further action to assert its rights, if it perceived itself to hold any. The actions of the second respondent were consistent with acquiescence to the acts by the other parties including cancellation and later on, the withdrawal of the sale instructions. It may not now seek to assert any right in the circumstances.

[25]	The Sheriff has the discretion reposed on him to cancel the sale before confirmation if not satisfied that the auction was properly conducted; that the price is unreasonably low; that the purchaser has failed to comply with any condition; and any other good reason. On 2 October 2018 he exercised his discretion and cancelled the sale, though erroneously on the basis that placement of KK under liquidation affected the sale. Once cancelled, the sale remained cancelled. He was correct that after making and communicating that decision to the parties he had become functus officio. His decision could only be set aside or rescinded by the court. Not even himself could rescind his own decision.

[26]	The doctrine of functus officio is directed at the decision-maker. It operates as an injunction pointed at every judge, every arbitrator, and every tribunal or quasi-judicial officer. It kicks in when a final and valid decision is made. Upon the rendering of a final and valid decision, the decision-maker is barred from reconsidering the decided matter and rescinding or varying the decision in any manner. In other words, the doctrine circumscribes the jurisdiction of a decision-maker by delineating when his jurisdiction is exhausted. Once the jurisdiction is spent, the decision is fixed. With no going back, finality is achieved. It is important to note that the axis of operation of the doctrine is not defined by the correctness of the judgment. What matters is a valid decision regardless of its correctness or otherwise.

[27]	The importance of this doctrine is commented upon by Wong, who states that:

“First, functus officio lends finality to the conduct of proceedings by marking a definitive endpoint to it. A valid and final decision, as defined by law of functus officio, is the summit of all judicial, arbitral, and tribunal proceedings. It is essential to the administration of justice to have a clear stopping place, a point of no turning back; otherwise, there would no end to the case, nor any beginning of enforcement. The law of functus officio, together with the law of res judicata (Latin for “a thing adjudged”), defines what constitutes a valid and final decision, from which point the parties and the decision-maker are bound and enforcement may be had, lest the decision be struck on appeal or judicial review.”

[28]	A fortiori, the functus officio principle enables appeal or review. It binds the decision maker to the once and for all decision made. It is upon that decision that an affected party bases his/her/its appeal lest the decision maker frustrates him by shifting goal posts during the process of appeal or review by continuously revisiting his decision. The decision made is the basis upon which parties decide the next course to follow in litigation. In the present case, it is upon that decision of the first respondent that second applicant made a decision to withdraw instructions to sell and decided its next course which was to allow first t applicant to sell to a third party. To allow the first respondent to make a mockery of this time-honoured principle and revisit his decision to cancel the sale will be the very antithesis of what the doctrine stands for and seeks to avoid. Parties must be emphatically informed of their positions in a legal dispute so as to allow them to move forward towards finality of their litigation contestation.

[29]	It follows therefore, that once he had cancelled the sale, the Sheriff could no longer be allowed a Damascene moment and purport to confirm the sale as he did. The horse had indeed already left the barn. The consequences of his cancellation had already been wrought.

[30]	Whatever was done after the cancellation in respect of the property was a nullity. He had already exhausted his jurisdiction to deal with the sale of the property, him having become functus officio and his mandate having been terminated. The confirmation was void ab initio and for all intents and purposes a nullity. Nothing can flow from it as one can not put something on nothing and expects it to stand, it will fall. No rights could flow from it as a result. The remarks of the Supreme Court in Muchakata v Netherburn Mine 1996 (1) ZLR 153 ((SC) at 157B-C are apposite:

“If the order was void ab initio it was void at all times and for all purposes. It does not matter when and by whom the issue of its validity is raised; nothing can depend on it. As Lord Denning MR so exquisitely put it in MacFoy v United Africa Co Ltd [1961] 3 All ER 1169 at 1172I:

"If an act is void, then it is in law a nullity. It is not only bad, but incurably bad ... And every proceeding which is founded on it is also bad and incurably bad. You cannot put something on nothing and expect it to stay there. It will collapse."”

[31]	Faced with this development and in light of soaring inflation, second applicant invoked its power to withdraw the Sheriff’s mandate. Rule 327 (1) in this regard provides:

“327.	Writ may be withdrawn or suspended

A writ of execution may, on payment of the fees incurred, withdrawn or suspended at any time by notice to the Sheriff or his deputy by the party who has sued out such writ.”

[32]	There was therefore nothing anomalous for the second applicant to withdraw its writ from the first t respondent as it did. Once it did so, the Sheriff became frolicsome in purporting to proceed with the sale by confirming it as he did. His authority is derived exclusively from the Rules. Once he started acting outside those rules he was acting illegally.

[33]	From the foregoing, I therefore come to the inescapable conclusion that the confirmation of the sale was illegal, invalid and of no force or effect.

CONCLUSION

[33]	There being no sale being conducted by the Sheriff in respect of the property nor any participating writ, there is no legal basis for maintaining the caveat placed on the property by the first t respondent. Second Respondent acquired no rights in the property. The Sheriff’s refusal to uplift the caveat is a sign of unwarranted intransigence and a blatant flouting of the law by an officer of the court. Such conduct must be frowned at.

[34]	In that regard I have been asked to consider issuing an order for costs against the Sheriff on a higher scale. While the conduct of the Sheriff in the present case remains unjustified for whatever reason, in my view the rule is that the court must be slow at mulcting an official executing his official duties with costs unless if it is proven that he acted mala fides. In the present case, while the decision ultimately proved to be wrong, the whole episode leading to this judgment was as a result of the Sheriff’s incorrect interpretation of the law when KK was placed under liquidation. That cannot be equated to malice.

As against the second Respondent there is no reason for the court to depart from the rule that costs follow the event.

DISPOSITION

In the result, it is ordered that:

first  Respondent’s confirmation of sale to second Respondent on 15 March 2019 of Stand No. 173 Willowvale Township of Willowvale situate in the District of Salisbury measuring 7438 square metres held by first applicant under deed of Transfer No.6366/88 dated 6 September 1988 be and is hereby declared unlawful and is hereby set aside.

first Respondent be and is hereby ordered to uplift caveat number 552/16 in respect of the property described in (1) above within five (5) days from date of this order, failing which 4th  Respondent is hereby authorised to uplift the said caveat.

Second Respondent to pay costs of this application.

Gill Godlonton & Gerrans, first Applicant’s legal practitioners

Danziger & Partners, second Applicant’s legal practitioners

Musekiwa & Associates, second Respondent’s legal practitioners

Kantor & Immerman, third Respondent’s legal practitioners