Criswell Jowa v NMB Bank of Zimbabwe

Achs Logistics (Private) Limited secured an overdraft facility from NMB Bank of Zimbabwe (the respondent). As security for the facility, stand 652 Bluffhill Township, 12 of Lot L Bluff Hill measuring 4,516 square metres, registered in the applicant's name, was mortgaged. The applicant represented Achs Logistics (Private) Limited in the transaction. Achs Logistics subsequently defaulted in servicing the facility. The respondent instituted proceedings and obtained a default judgment against both Achs Logistics (Private) Limited and the applicant for US$196,492.57 plus interest at 42% per annum. The judgment declared the property specially executable. The applicant then brought a chamber application seeking suspension of the sale in execution of the property, claiming he and his family occupied the dwelling and would suffer great hardship. He offered to settle the judgment debt in instalments of US$1,500 per month commencing July 2015, and claimed Achs Logistics failed to pay because it was owed money by the Reserve Bank of Zimbabwe.

• Whether the applicant could invoke Order 48 rule 348A(5a) of the High Court Rules to suspend the sale in execution of mortgaged property declared specially executable
• Whether the applicant demonstrated that he and his family would suffer great hardship if the dwelling was sold
• Whether the applicant made a reasonable offer to settle the judgment debt
• Whether rule 348A applies to foreclosure proceedings involving mortgaged property

The application was dismissed with costs.

Order 48 rule 348A of the High Court Rules does not apply to foreclosure proceedings involving mortgaged property that has been declared specially executable by court order. When a court declares property "specially executable" in a foreclosure action, it gives the mortgagee the legal right to sell the property in execution to recover the debt, and this right enjoys relative primacy over the mortgagor's claims of hardship. A mortgagor cannot use rule 348A to stay execution of mortgaged property, as allowing such applications would have the effect of rescinding, through the back door, an order made by a competent court. The mortgagee's right to "call up" or "foreclose" the bond is a fundamental aspect of real security - if the debtor cannot pay the secured debt, the creditor is entitled to demand that the secured property be sold and the proceeds used to satisfy the claim. To allow residential immovable property to be placed beyond the reach of execution would sterilize it from commerce, rendering it useless as a means to raise credit and creating systemic problems in the credit market.

The court made several obiter observations: (1) The requirements in rule 348A(5b) are not conjunctive, as an order for suspension may be granted on "some other good grounds" (citing Masendeke v CABS). (2) Although rule 348A does not require supporting affidavits, an applicant seeking such relief should be wise enough to either depose to an affidavit or provide adequate details in an unsworn statement to convince the judge. (3) The court expressed strong disapproval of business people who readily receive money from banks and undertake to repay on certain terms, but then "cry foul when the lender demands its dues," stating this practice is "utterly deplorable" and cannot be allowed. (4) Preventing debtors from using their homes as security would create a class of homeless persons unable to afford cash purchases but able to afford loan repayments, would lock up capital, prevent entrepreneurship, and particularly harm poor communities unable to obtain bank financing for property purchases.

This case affirms important principles regarding the enforceability of mortgage bonds and the limited application of Order 48 rule 348A of the High Court Rules in Zimbabwe. It establishes that rule 348A, which allows for suspension or postponement of sales of dwellings where occupants would suffer great hardship, does not apply to foreclosure proceedings where property has been declared specially executable pursuant to a mortgage bond. The judgment reinforces the sanctity of mortgage security and the principle that mortgaged property must remain executable to maintain the viability of credit markets. It prevents mortgagors from using procedural rules to circumvent legitimate creditor rights and undermining the real security provided by mortgage bonds. The case is significant in protecting the banking and credit system by ensuring that residential property used as security remains accessible for enforcement of debt obligations.