Ramwide Investments (Private) Limited v Rondebuild Zimbabwe (Private) Limited & 2 Ors

### Preamble
Judgment No. SC 160/20
1
Civil Appeal No. SC 994/17
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DISTRIBUTABLE:   (149)

RAMWIDE     INVESTMENTS     (PRIVATE)     LIMITED

V

RONDEBUILD     ZIMBABWE     (PRIVATE)    LIMITED     (2)     MESSENGER     OF     COURT     FOR     MATABELAND     NORTH     PROVINCE      (3)     WILLIAM     MUKUSHA

SUPREME COURT OF ZIMBABWE

GWAUNZA DCJ, GOWORA JA & GUVAVA JA

HARARE: SEPTEMBER 17, 2019 & NOVEMBER 17, 2020

No appearance for the appellant

J. Rukanda, for the first respondent

R. C Muchenje, for the second respondent

S. Baira, for the third respondent

GOWORA JA: This is an appeal against a judgment of the High Court dated 27 July 2016, in which the court dismissed an application by the appellant seeking to set aside a sale in execution conducted by the second respondent in the execution of a writ of execution for the payment of a debt due to the first respondent.

When the matter was called the appellant was found to be in default. Upon enquiring with the legal practitioners of the parties present, the court was requested, notwithstanding the absence of the appellant, to deal with the matter on the merits.  The court was persuaded to follow this course as the Supreme Court Rules, 2018 S.I. 84 of 2018 allow this. Rule 53 is the pertinent rule and it reads as follows in relevant part:

53. Dismissal of appeal in the absence of heads of argument or appearance

(1)……n/a

(2)…….n/a

(3) Where, at the time of the hearing of an appeal, there is no appearance for the appellant or no heads of argument have been filed by him, the court may, at its discretion, determine or dismiss the appeal and make such order as to costs as it may think fit.

(4)………….n/a

THE FACTS

The appellant carries on business in construction and civil works. The first respondent supplied unspecified equipment to the appellant. When the appellant defaulted, the first respondent sought and obtained an order for the payment of the sum of USD 169 000. The parties entered into a deed of settlement in terms of which the appellant was allowed relaxed conditions for payment.

The appellant did not pay as agreed under the deed of settlement. The first respondent then caused a writ of execution to be issued by the Magistrates Court on 20 March 2015. The appellant acknowledges being served with the same on 14 July 2015. According to the appellant, thereafter parties entered into negotiations in a bid to settle the matter. On 9 August 2015, the first respondent caused an advertisement to be flighted in the Chronicle newspaper in Bulawayo.

The appellant does not deny the debt. It contests the amount reflected on the writ. It approached the Magistrates Court for a stay of execution of the writ in an effort to stop the sale. It was not successful. It again approached the High Court on a certificate of urgency in a bid to stave off the sale. By the time it approached the High Court the sale had already been held and the High Court struck the matter off the roll on the basis that it was not urgent.

The matter was thereafter set down on the ordinary roll of opposed applications, the issue in contention being the prayer by the appellant to have the sale set aside. The appellant was unsuccessful and the court dismissed the application with costs. The appeal is against that decision.

DETERMINATION OF THE COURT A QUO

The court a quo summarized the issues for determination before it as follows:

that the first respondent allegedly pointed out to the second respondent property belonging to the appellant which it wanted levied in execution in contravention of the law;

that the first respondent never communicated to the second respondent the correct sum to be levied in execution;

that the writ was not properly served on the appellant’s place of business;

that the second respondent failed to conduct a proper evaluation on the attached property which resulted in the sale of the property at abnormally low prices;

that the second respondent failed to properly advertise the sale and falsified the costs he claimed to have incurred; and

that the third respondent, who was at the time an executive officer in the first respondent,  wrongfully participated in the auction and organized the sale of the appellant’s property in execution.

As regards the first issue, based on a letter from the first respondent to its legal practitioners,  the court a quo found that the first respondent had indeed pointed out the property to be attached and that this conduct was in violation of Order 26 r 5 (1) of the Magistrates Court Rules 1980. The court also found that it was the third respondent who pointed out the property to be attached for sale in execution.

Regarding the writ of execution, it was the finding of the court a quo that the appellant had not stated that the amount on the writ differed from what was ordered by the court. The judgment itself was not attached. It found that the judgment had not been settled in full and so the causa for the writ was extant. It refused to set aside the writ of execution. Nothing turns on the allegation that the writ was not properly served.

The court a quo dismissed the contention by the appellant that the property had been sold at unreasonably low prices. The court opined that the appellant simply speculated on the values of the machinery and failed to place before it concrete evidence as to its true value. The court also went on to find that the manner in which the property scheduled for sale was advertised was inadequate.  Notwithstanding the inadequacy of the advertisement, the court a quo was of the view that the appellant had not established that the failure to properly advertise the sale had resulted in the machinery being sold at unreasonably low prices.  The court a quo ultimately concluded that the appellant had not established that the shortcomings in the manner in which the sale was conducted had resulted in prejudice to the appellant.

The third respondent was found to have participated in the identification of the property to be attached and sold in execution. On that premise, the court concluded that he was not a bona fide purchaser when he bought goods at the auction.

Whilst acknowledging that the second respondent had failed to adhere to the rules in the process of attachment and advertising the sale, the court, relying on Order 26(b) r 4A(2) and Order 33 of the Magistrates Court rules concluded that failure to abide by the rules did not automatically result in the setting aside of the sale. It dismissed the application with costs.

THE APPEAL

The grounds upon which the appellant approaches this Court are as follows:

“1.    The court a quo erred in not setting aside the judicial sale of the appellant’s property when the court a quo managed to identify a myriad of gross irregularities in the manner the said execution had been carried out; such court was then enjoined at law to vacate the anomalous sale in execution.

2.	The court a quo erred in holding that the anomalies concomitant to the irregular execution could in the circumstances be lawfully condoned or ignored. In casu, the execution the appellant sought to impugn was replete with irregularities and brought judicial sales into disrepute. At law, such sales in execution ought to be vacated.

3.	The court a quo grossly misdirected itself in holding that the appellant had waived its right to impugn the execution and failed to show that its property had been grossly undervalued. With respect, such finding is patently unreasonable in that the record reflects that the appellant had on previous occasions pressed for its right to lawful execution and had enumerated the value of its properties. Had the High Court applied its mind to such datum it certainly would not have come to the aforementioned findings.

4.	Further the court a quo erred in dismissing the appellant’s petition to vacate the anomalous execution. The court a quo, having accepted that the sale in execution was conducted in defiance of the rules and legal propriety was enjoined to grant the appellant the relief it craved.”

What is at issue is whether or not in the execution of his mandate under the Magistrates Court Rules, the second respondent failed to comply with mandatory provisions in the rules and whether such failure rendered the process and the sale nugatory.

Mr Rukanda, who appeared on behalf of the first respondent moved for the dismissal of the appeal. He submitted that the failure by the second respondent to comply with the rules did not vitiate the sale in execution conducted by the second respondent. He urged the court to find that the failure by the appellant itself to challenge such non-compliance with the rules was fatal to its cause. He contended further that any failure to comply with the rules could not be used as a ground for nullifying a sale in execution.

In addition, it was contended by Mr Rukanda that the rules availed an opportunity to enforce compliance with the rules and that the appellant had failed to seek recourse in terms of the rules.

In addition to the above, Mr Rukanda submitted that the court a quo took into account that there was substantial compliance with the rules with regard to the execution process and the sale could not be set aside on trivial non-compliance. He prayed that the appeal be dismissed with costs being awarded on a punitive scale.

Messrs Muchenje et Baira on behalf of the second and third respondents respectively indicated that they would abide by the decision of the court.

WHETHER THE COURT A QUO WAS WRONG AT LAW

I will consider the first two grounds as they deal with the same issue; viz. whether the irregularities that the court a quo found to have been part of the process should have moved it to set aside the sale.

The High Court found that the first respondent had unlawfully pointed out the property to be attached in defiance of the rules. It further found that the second respondent failed to properly advertise the sale in execution. Although it found that there was no written valuation of the goods placed under attachment, it concluded that there was no requirement that such valuation be in written form. Despite it finding that there were failures to comply with the rules, the court concluded that the appellant had failed to establish that it had suffered prejudice from the non-compliance.

In my view, the failure by the appellant to show prejudice was the rationale for the court refusing to grant the relief sought by the appellant. That finding has not been appealed against. The grant of relief involves an exercise of discretion by the court. It has not been suggested that the exercise of that discretion was injudicious or grossly unreasonable. I am unable to fault the court a quo in finding as it did that the failure to comply with the rules resulted in prejudice to the appellant.

In any case, the court a quo had regard to the rules in its consideration of the extent to which non-compliance with the rules might have affected the sale in question. It sought reliance on Order 33 of the Magistrates Court rules, which reads:

ORDER 33

GENERAL

1. Effect of failure to comply with rules

(1) Except as is otherwise provided in these rules, failure to comply with these rules or with any request made in pursuance thereof shall not be a ground for judgment against the party in default.

(2)  Where any provision of these rules or any request made in pursuance of any such provision has not been fully complied with, the court may on application order compliance therewith within a stated time.

(3)  Where any order made in terms of subrule (2) is not fully complied with within the time stated, the court may on application—

(a) forthwith enter judgment in the action against the party so in default; or

(b) adjourn the application and grant an extension of time for compliance with the order on such terms as to costs and otherwise as it thinks just.

(4)  The court may on an application in terms of subrule (2) or (3) order such stay of proceedings as it thinks necessary.

The High Court, in construing the above-mentioned rule said:

“The above rules show that failure to comply with the rules does not automatically lead to setting aside of the sale in execution. This is so because courts must promote public confidence in such sales. Setting aside of public sales even on trivialities would lead to loss of public participation in such sales as that would create uncertainty.”

It is obvious from the grounds of appeal that the reliance by the court a quo on Order 33 and its construction thereof has not been impugned. In my view, the failure to attack the court on the premise of the provisions of Order 33 is fatal to the appellant’s cause. The appeal on the first two grounds must fail.

Turning to the third ground, the contention made therein is self-defeating. The appellant does not say that it placed the values of the property before the court. The appellant avers therein that it had previously enumerated the values of its property on previous occasions. This is an acceptance that before the court a quo the values of the properties were not established. The records of whatever previous litigation the appellant had been engaged in were not before the court a quo, and that court cannot be criticized for not having regard to evidence or facts not placed before it for its consideration.  The appeal in relation to this ground again fails.

The last ground raises issues dealt with regarding the first two grounds. It too lacks merit and the appeal on the last ground also fails.

COSTS

The first respondent has prayed for costs on a punitive scale. The contention by the first respondent is that it has been compelled to incur costs by the wrongful and unreasonable litigious conduct of the appellant. As a consequence, the appellant must be punished in costs. In my view, the first respondent has not made out a proper case for the award of costs on a punitive scale. Apart from a submission that the respondents have been dragged to court to defend an appeal lacking in merit, no other cogent reason for the award of costs on such a scale has been advanced. In my view, if such costs were to be awarded merely because a litigant had brought to court a process lacking in merit, then the majority of litigants appearing before our courts would be mulcted in costs. I do not believe that this is the correct principle to be applied when considering the level of costs to be awarded. Costs will be ordered as between party and party.

DISPOSITION

The appeal is devoid of merit. The rules are clear, and not every failure to comply with the requisites of a sale in execution results in a vitiation of the process. The finding by the court a quo to that effect was not challenged and as a result, the judgment cannot be impugned. In the premises, the appeal must fail.

Accordingly, it is ordered that the appeal be and is hereby dismissed with costs.

GWAUNZA DCJ		: 	I agree

GUVAVA JA			:   	I agree

Gill, Godlonton & Gerrans legal practitioners, for the appellant

Tamuka Moyo Attorneys legal practitioners, for the first respondent

Mbidzo, Muchadehama and Makoni legal practitioners, for the second respondent

Matsikidze and Mucheche legal practitioners, for the third respondent