Aretha Manase v Anex Investments (Private) Limited and the Sheriff of Zimbabwe N.O.

The applicant entered into a lease agreement for property at 6 Cannock Gardens, Cannock Road, Mount Pleasant, Harare. The original lease was terminated and a new verbal lease agreement was entered into around August 2019 between the first respondent (represented by Mrs. Hay) and Xylem Trading (Pty) Limited (a South African company) for the applicant's benefit. The first respondent issued summons for eviction in HC 5024/22, which was served by affixing the summons and declaration at the main gate at 4 Fairman Close, Mount Pleasant (the address in the terminated lease agreement), despite the respondent being aware that the applicant could be served at 6 Cannock Gardens where she was residing. The applicant did not see the summons until 14 October 2022 when served with a notice of Seizure and Attachment indicating removal was due on 19 October 2022. A default judgment had been granted in favor of the first respondent on 14 September 2022 in HC 5024/22. The applicant expeditiously filed an application for rescission (HC 7024/22) and this urgent application for stay of execution.

• Whether service of summons by affixing at an outdated address (4 Fairman Close) was proper when the respondent knew the applicant's actual address (6 Cannock Gardens)
• Whether the applicant's rescission application had prospects of success sufficient to warrant a stay of execution
• Whether the lease agreement was illegal and unenforceable due to contravention of exchange control regulations (S.I. 33/19, S.I. 42/19) by requiring payment of rentals in foreign currency
• Whether a stay of execution should be granted pending finalization of the rescission application

1. Execution of the Writ of Execution dated 11 October 2022 pursuant to an order dated 14 September 2022 obtained in HC 5024/22 was stayed pending finalization and determination of the Application for Rescission pending in HC 7024/22. 2. The first respondent was ordered to pay costs of the matter.

The binding legal principles established are: (1) Where a party seeking to serve process is aware of the actual residential address of the defendant but instead serves at an outdated address from a terminated agreement, such service may be improper and grounds for rescission of a default judgment. (2) A stay of execution will be granted where the applicant demonstrates that the rescission application has reasonable prospects of success. (3) Lease agreements requiring payment of rentals in foreign currency in contravention of exchange control regulations (S.I. 33/19, S.I. 42/19) and other financial regulations are illegal and unenforceable, regardless of whether the tenant is in rental arrears. (4) Courts will not enforce judgments obtained pursuant to illegal and unenforceable contracts.

The court made an observation that the applicant may indeed have been in rental arrears, but this fact did not override the illegality of the underlying transaction. This suggests that even where there may be merit to a claim in principle, the illegality of the contract taints the entire transaction and prevents enforcement. The court also noted that evidence of the first respondent's knowledge of the applicant's actual address was apparent from documentation attached to the first respondent's own legal practitioner's affidavit, suggesting that the improper service may have been deliberate or at least negligent.

This case is significant in Zimbabwean law (applicable to South African jurisprudence by analogy) for several reasons: (1) it reinforces the principle that proper service of process is fundamental to procedural fairness and that service at an outdated address when the actual address is known to the serving party may constitute improper service; (2) it demonstrates the court's willingness to grant stays of execution where rescission applications have reasonable prospects of success; (3) it emphasizes that courts will not enforce contracts that are illegal due to contravention of exchange control regulations and financial laws, regardless of whether one party is in breach of contractual obligations; and (4) it illustrates the protective approach courts take towards ensuring parties have a fair opportunity to defend themselves against default judgments obtained through potentially improper service.