Cyndrella Masimbe v Rainbow Tourism Group

The respondent obtained judgment against the applicant on 21 January 2015 under case HC 1548/13 for payment of $35,873.00 with interest and costs of $2,500.00. This led to attachment of the applicant's dwelling at Stand 907 Mt Pleasant Heights, Harare. The applicant had been employed by the respondent as Human Resources Director for 12 years. In 2010, she sought voluntary retrenchment but the respondent offered her a housing loan of $120,000.00 as a staff retention proposal. The loan was to be repaid upon separation from employment using terminal benefits. In 2012, following a change of management, relations deteriorated and the applicant resigned on 17 December 2012. Her terminal benefits reduced the debt from $67,124.00 to $35,172.00, but she could not settle the balance. She was unemployed from January 2013 to June 2015, preventing payment. In July 2015, she secured new employment earning $5,000.00 per month (paid in cycles of $1,800.00 every 3 weeks due to employer cash flow problems). The applicant received notice of attachment on 18 January 2016 and filed this urgent chamber application on 29 January 2016, seeking suspension of the sale in execution and offering to pay $1,000.00 per month toward the debt.

• Whether the application was procedurally proper under Order 40 Rule 348A(5a) of the High Court Rules
• Whether the applicant and her family would suffer great hardship if the dwelling was sold in execution
• Whether the applicant's offer to settle the judgment debt at $1,000.00 (later increased to $1,300.00) per month constituted a reasonable offer
• What constitutes 'great hardship' under Order 40 Rule 348A(5e)(a)
• What constitutes a 'reasonable offer to settle' under Order 40 Rule 348A(5e)(b)(i)

1. The sale in execution of Stand 907 Mt Pleasant Heights, Mt Pleasant, Harare is suspended on condition that the applicant pays monthly installments of US$1,300.00 to the respondent with effect from 31 March 2016 until the outstanding debt is extinguished. 2. If the applicant defaults on any one installment, the respondent shall be entitled to proceed with the sale in execution of the property. 3. Each party to pay its own costs.

Under Order 40 Rule 348A(5e) of the High Court Rules, an execution debtor seeking suspension of a sale in execution of a dwelling must satisfy two conjunctive requirements: (a) the dwelling is occupied by the execution debtor or family and they will likely suffer great hardship if the dwelling is sold; and (b) the debtor has made a reasonable offer to settle the judgment debt, or occupants require reasonable time to find alternative accommodation, or there is some other good ground. 'Great hardship' means hardship beyond the ordinary hardship of losing one's residence; it must be assessed cumulatively considering all circumstances including the debtor's financial situation, family circumstances, disparity between property value and debt amount, and prospects for alternative accommodation. A 'reasonable offer to settle' must be assessed in light of the debtor's actual financial circumstances, employment status and history, the nature and amount of the debt, the creditor's business interests, and the debtor's demonstrated commitment to repayment. Where a debtor's non-payment was caused by circumstances beyond their control (such as constructive dismissal) and they have since secured employment and made a genuine offer consistent with their financial capacity, coupled with agreement that execution may proceed upon default, such an offer may be deemed reasonable even if repayment extends over several years.

The court observed that procedurally, applications under Order 40 Rule 348A(5a) should be chamber applications resulting in final orders, not urgent chamber applications seeking provisional orders with return dates for confirmation, as the nature of the relief sought is final. The court noted its willingness to condone procedural irregularities where applicants are self-actors (litigants in person) not well-versed in court rules, provided no prejudice results to the other party. The court commented that generally, a 3-year repayment period for a debt of $36,000.00 is not unreasonable and is consistent with standard banking practices for similar amounts. The court observed that where a creditor is not a financial institution whose business depends on lending money but rather operates in another sector (in this case tourism), delay in debt recovery does not affect its core business operations in the same way it would affect a bank. The court expressed sympathy for the applicant's situation, noting that had the respondent's new management not made working conditions unbearable, forcing her constructive resignation, she would have continued servicing the debt from her salary and the current situation would not have arisen.

This judgment provides important guidance on the application of Order 40 Rule 348A of the High Court Rules concerning suspension of sales in execution of dwellings. It clarifies that applications under Rule 348A(5a) result in final orders, not provisional orders requiring confirmation. The case establishes a framework for determining 'great hardship' under Rule 348A(5e)(a), holding that cumulative inconveniences can constitute great hardship beyond ordinary hardship where the value of the property far exceeds the debt and the debtor has genuine prospects of repayment. The judgment also provides guidance on what constitutes a 'reasonable offer to settle' under Rule 348A(5e)(b)(i), considering the debtor's actual financial circumstances, employment history, and the nature of the creditor's business. The case demonstrates the court's willingness to protect family homes from execution where debtors show genuine commitment to repayment and circumstances explain previous non-payment. It reflects the constitutional values of protecting housing rights while balancing creditors' rights to enforce judgments.