Dods Bakers (Private) Limited v Central Africa Building Society

The respondent obtained a court order on 16 December 2015 compelling the applicant to pay $275,385.19, interest and costs. A writ of execution was issued and property being stand 303 Umtali Township measuring 1115m² was attached and auctioned on 3 February 2016. The property was sold for US$180,000.00 to the judgment creditor (respondent). The applicant objected to the confirmation of the sale, but the Sheriff dismissed the objection on 22 March 2017, finding that the applicant failed to show the property was sold at an unreasonably low price. The applicant then approached the High Court on 6 July 2017 seeking to set aside the sale in execution in terms of Order 40 Rule 359(8) and (9) of the High Court Rules. The application was filed approximately 14 days out of time.

• Whether the application was filed within the prescribed time limit under Rule 359(8)
• Whether condonation should be granted for late filing
• Whether the Sheriff erred in failing to advise the applicant on evidential requirements
• Whether the Sheriff should have interrogated the correctness of the judgment debt
• Whether it was improper for the judgment creditor to participate in and purchase the property at the auction
• Whether the property was sold for an unreasonably low price
• Whether the sale in execution was improperly conducted or should be set aside on any other good grounds

The application was dismissed with costs on the ordinary scale (not attorney-client scale as requested by the respondent).

A party seeking to set aside a sale in execution on the grounds that property was sold for an unreasonably low price bears the onus of providing supported valuations reflecting the upper and lower limits of the suggested market price to enable the court to determine whether the price achieved is substantially lower than would reasonably be anticipated. An "unreasonably low price" means a price which is substantially less than the market price, which lies between the highest and lowest prices the property can reasonably be expected to fetch in the open market. Mere assertions without supporting valuation evidence are insufficient to discharge this onus. Where a sale is properly advertised and conducted, courts are reluctant to reverse the result in the absence of compelling evidence, especially where the sale has been confirmed, as public confidence in the execution process must be maintained.

The court observed that while valuations are important indicators for determining fair market value, they are not decisive, as prices offered in competition at an open auction (determined by the nature of property, demand and economic conditions) cannot be ignored as reflections or indications of market price. The court also made sympathetic observations about the applicant's situation, noting that loss of property (particularly one forming part of the applicant's livelihood as a bakery and residence) is never easy, and that the applicant may have received wrong legal advice from a lawyer who abandoned them. This informed the court's decision to award ordinary costs rather than attorney-client costs, finding the application was not vexatious or reckless despite lacking merit.

This case reinforces important principles in Zimbabwean (and by extension South African) execution law regarding: (1) the strict time limits for challenging Sheriff's decisions to confirm sales in execution; (2) the heavy onus on an applicant seeking to set aside a sale in execution to provide proper valuation evidence showing the price was unreasonably low; (3) the reluctance of courts to interfere with properly conducted sales in execution to maintain public confidence in the execution process; (4) the permissibility of judgment creditors participating in auctions absent evidence of improper influence; and (5) the principle that "unreasonably low price" means substantially less than market price, which must be established through proper valuation evidence showing a range of expected prices.