DISTRIBUTABLE (21)

Judgment No. SC 22/06

Chamber Application No. 104/06

PATRICK TEESDALE v

(1) DAVID LIONEL REED (2) SHERIFF FOR ZIMBABWE (3) GERALD LENARD MULHOLLAND

SUPREME COURT OF ZIMBABWE

HARARE, JUNE 7 & 29, 2006

P Machaya, for the applicant

I.E.G. Musimbe, for the first respondent

T.K. Hove, for the third respondent

No appearance for the second respondent

Before GWAUNZA JA, In Chambers in terms of r 31 of the Supreme Court Rules.

The applicant seeks leave to appeal, out of time, against a judgment of the High Court passed on 22 February 2006.

The applicant asserts that following renunciation of agency by his legal practitioners after the matter was heard in the court a quo, he personally took on the task of constantly enquiring with the Registrar of the High Court, whether the judgment was ready. He adds that up until 24 March, 2006, when he was, finally, able to collect the judgment in question, the answer to his enquiries as to its availability had been in the negative. The applicant professes ignorance as to the date on which the judgment was handed down, saying neither he nor his erstwhile legal practitioner Mr Kamdefwere had been notified of this fact.

The applicant’s assertion, that he checked for the judgment constantly between January and 24 March 2006, is not supported by any other evidence. He has, however, filed a supporting affidavit from his former legal practitioner, Mr Kamdefwere, who could only confirm that the applicant had indeed called him on 24 March 2006, to advise that the judgment had been handed down. Both the applicant and Mr Kamdefwere assert that further delay in noting the appeal (which the latter was given instructions to file, having resumed agency) had been occasioned by their failure to locate some of the documents related to the matter, which the applicant had collected from the legal practitioner upon the latter’s earlier renunciation of agency.

On these two grounds, the applicant urges me to find that he has tendered a reasonable explanation for the delay in noting the appeal in question.

The respondents, who oppose this application, dispute that the applicant’s explanation is reasonable. They argue that the applicant, like the other parties to the dispute, must have received notification from the registrar of the court a quo, that the judgment was to be handed down in motion court, as is the practice. Alternatively, that had he been more diligent in his enquiries concerning the judgment, he would not have failed to see the motion court roll indicating when the judgment was to be handed down.

I find on the evidence before me, that the possibility cannot be discounted, that the applicant may indeed not have received notice as to the date on which judgment was to be handed down. His assertion that at some point before the judgment was handed down, his lawyers had renounced agency, has not been disputed. It is in fact, corroborated by Mr Kamdefwere. He was therefore, for all intends and purposes, a self actor on the occasions he said he made enquiries about the judgment. It can be assumed that he could not, in that capacity, have had knowledge on the inside workings of the registrar’s office concerning motion court rolls and the handing down of judgments. For its part the registrar’s office might have had problems determining to whom to address the applicant’s notice concerning the date on which judgment was to be handed.

I am persuaded in the light of all this, that the applicant may be given the benefit of the doubt, and find, accordingly, that he has proffered a reasonable excuse for not timeously filing his notice of appeal against the judgment of the court a quo.

Having passed this first hurdle, the applicant still has to prove that he has good prospects of success on the merits of his appeal. To determine this matter it is necessary to consider the background to the dispute between the parties.

The applicant, as surety, defaulted in repaying a certain loan advanced by Stanbic Bank, to a company in which he had an interest. A default judgment was obtained against him for the amount owed. Rather than seek to enforce the default judgment, Stanbic Bank ceded its rights therein to the first respondent. The first respondent subsequently caused the applicant’s immovable property to be attached, and later sold by public auction on 27 July 2001. A company called Corundum Mining Company (Private) Limited objected to the confirmation of this sale by the Sheriff, on the ground that it had previously bought the same property from the applicant and was entitled to transfer of such property into its name.

When the Sheriff proceeded despite this objection, to confirm the sale, Corundum Mining Company resorted to a court application for the setting aside of the sale. At this juncture the first respondent, who as an interested party had not been cited in the application by Corundum, successfully petitioned the court to be joined as a party to the proceedings. The first respondent made it clear that while he agreed with Corundum Mining (Private) Limited that the sale in execution had to be set aside, he did not agree with the reason tendered by the company for such nullification. His objection to the sale was based on what he perceived to be an unreasonably low purchase price realised for the property. The parties subsequently entered into negotiations, which culminated in a consent order setting aside the sale in execution. The basis for the negotiated settlement was that the price realised at the sale by public auction was unreasonably low. It is the first respondent’s evidence that the parties further agreed that the property be sold by private treaty, consequent upon which advertisements for the sale of the property by private treaty were flighted in the newspapers. It is not in dispute that the property was then sold to the third respondent by private treaty, for $23 750 000. The sale was thereafter confirmed by the Sheriff.

Following this sale, the applicant, for the first time, raised an objection to the sale and filed an urgent chamber application in which he sought a provisional order interdicting the Registrar of Deeds from transferring the property to the third respondent, pending an application that he wished to file, for the setting aside of the sale. The applicant cited an unreasonably low price as a reason for seeking the nullification of the sale. For this he relied on what he termed a “desk top” evaluation by Gabriel Real Estate, which had placed the forced sale value of the property at between $50 million and $60 million. The High Court dismissed the application in what appears to have been a final order. That the High Court considered the merits of the application and issued a final rather than a provisional order, is evidenced by the applicant’s initial grounds of appeal against the court’s order. The second ground of appeal read as follows:

“2 The learned judge erred in denying that the professional opinion by Gabriel Real Estate Agents as to the value of the property at the time it was sold was a true indication of the value of the property, pending the compilation of a comprehensive report.”

The third ground of appeal charged that the learned trial judge had erred by deciding that the applicant had no prospects of success in the application he meant to file, for the setting aside of the agreement of sale between the Sheriff and the third respondent.

The notice of appeal containing the two grounds cited was, for reasons not too clear from the papers, withdrawn on 19 February 2003. Almost five months later, on 5 August 2003, the appellant filed an application to this Court, seeking to reinstate the appeal withdrawn in February 2003. The Supreme Court dismissed the application.

From a legal and procedural standpoint the dismissal of the applicant’s application for the reinstatement of this appeal should have brought finality to the litigation surrounding this dispute.

This was however, not the case, as the applicant went back to the High Court and, in a fresh application founded on a different cause of action, he again sought to have the same sale by private treaty, set aside. As the learned judge a quo correctly pointed out in his judgment, the applicant’s fresh application was filed fourteen months after the sale he sought to have set aside was concluded, and thirteen months after such sale was confirmed by the Sheriff.

The applicant argued in the court a quo, and for the first time, that the sale of the property by private treaty was null and void as it did not comply with subrule 358(1) of the High Court Rules, in particular that neither he as the judgment debtor, nor a judge, had consented to the sale by private treaty. The subrule reads as follows:

“… where all persons interested including the judgment debtor consent thereto, or otherwise with the consent of a judge, the Sheriff may sell the movable property attached in execution otherwise than by public auction, if he is satisfied that the price offered is fair and reasonable and that the property is unlikely to realise a larger sum by a sale at a public auction.”

The respondents opposed the application, and argued that the sale by private treaty had been conducted in terms of subrule 358(2) and not 358(1) of the rules. The respondents contended that subrule 358(2) provided for a sale by private treaty “after a sale by public auction has taken place and the Sheriff is not satisfied that the highest price offered is reasonable.”

They argued further that, since the condition precedent in subrule 358(2), (that the property must have been offered for sale at a public auction before being sold by private treaty), had, in the view of the respondents, been met, there was no need to secure the consent of the parties. In other words their case was that subrule 358(1) did not apply.

The learned judge a quo was persuaded by the respondent’s contention and accepted as correct, their interpretation of the law as set out in r 358.

The question to be considered against this somewhat long background to the dispute, is whether the applicant has good prospects of success on the merits of his appeal. A closer analysis of the facts of the case as outlined, reveals what in effect are two separate applications by the applicant, based on the same facts, involving the same parties, and seeking exactly the same relief. The only difference between the two cases is the basis for the application. It is at the juncture pertinent to note that there was nothing to stop the applicant, in his first application, from citing as an additional ground for the setting aside of the sale in question, the ground that he has taken up in the second application, that is the alleged non compliance with subrule (1) of r 358.

As indicated, the first application was heard, on the merits, and dismissed by the High Court. By dismissing his application for leave to appeal against this judgment out of time, this Court effectively and finally resolved the dispute. Surprisingly, neither the respondents nor the court a quo considered the correctness or otherwise of the applicant literally attempting to, as it were, have a “second bite of the cherry” through his second application. That application clearly sought to resuscitate a matter against which a defence of res judicata could, in my view, have been successfully raised. The learned trial judge, who it must be mentioned, was the one who had heard the first application and dismissed it, went on to hear the matter all over again, that is the second application, and made a ruling based on the new argument advanced by the applicant.

In argument before me, the respondents, while not specifically referring to res judicata as a defence, emphasised the point that the applicant had on numerous occasions taken the same dispute to court under various guises, resulting in the matter dragging on for over six years. Strong argument was also advanced on the need to bring finality to litigation. I fully agree with these contentions, as, indeed, did the learned trial judge.

Be that as it may, correctly or not, the learned trial judge considered the arguments concerning the interpretation of r 358, and determined that subrule 2 rather than subrule 1 of the rule, applied to the circumstances of this case. I am satisfied, for what it is worth, that his interpretation was correct. There is no dispute that the property in question was first sold by public auction. Nor is it disputed that the Sheriff, although he did so after initially confirming the sale and after an application had been made to court to set such sale aside, realised and was satisfied that the price that the property had fetched at the public auction sale was unreasonably low. This reality in my view stands despite the fact that the sale was set aside following negotiations and agreement between the parties and the Sheriff.

As correctly contended for the third respondent, no time limits are imposed by subrule (2) of r 358 as to when the decision by the Sheriff to reject a sale by public auction and resort to a sale by private treaty, should be made. There is therefore no merit in the argument advanced for the applicant that the confirmation of the sale by public auction, by the Sheriff, effectively barred him from dealing with the property under subrule 2 of r 358. The situation might, however, have been different had the purchaser;

(i) not agreed to the setting aside of the sale, and

(ii) proceeded to take transfer of the property in question.

This, as indicated, was not the case.

When all is considered, I am in the result not satisfied that the applicant has proved that he has good prospects of success on the merits of his proposed appeal.

In the premises, the application for leave to appeal out of time, is dismissed with costs.

Musunga & Associates, applicant’s legal practitioners

I E G Musimbe & Partners, first respondent’s legal practitioners

T K Hove & Partners, third respondent’s legal practitioners