Doves Funeral Assurance (Private) Limited v Fernaby Investments (Private) Limited & 5 Others

Quecom Engineering (Private) Limited (second respondent) entered into a loan agreement with Standard Chartered Bank Limited (fourth respondent) for a revolving credit facility of USD 800,000. The first and third respondents bound themselves as sureties and co-principal debtors. The first respondent executed a deed of hypothecation over its immovable property (lot 8 Brooke Estate, Harare) as security. The second respondent failed to pay USD 241,056 and the bank obtained judgment for USD 292,272.12. A writ of execution was issued and the property was attached. Multiple attempts to sell the property were made between 2015-2018, fetching prices of USD 150,000 initially. The judgment debtors repeatedly requested setting aside of sales, were given opportunities to sell by private treaty, and failed to do so. On 6 September 2018, the Sheriff sold the property by public auction to the appellant (Doves Funeral Assurance) for USD 260,000. The judgment debtors filed a request to set aside the sale under Rule 359(1). The Sheriff dismissed the request and confirmed the sale on 29 November 2018. The judgment debtors then approached the High Court under Rule 359(8) to set aside the Sheriff's decision.

• Whether the court a quo erred in setting aside the Sheriff's confirmation of the sale on grounds raised mero motu rather than on the merits of the objection under Rule 359(1)
• Whether the court a quo had jurisdiction to grant relief not sought by the parties (3 months to sell by private treaty) when it found the Sheriff's proceedings were a nullity
• Whether the failure to file written opposition to a request to set aside a sale in execution constitutes an irregularity that nullifies the Sheriff's proceedings
• Whether the price of USD 260,000 constituted an unreasonably low price justifying setting aside the sale

1. The appeal succeeded. 2. By consent, the first, second and third respondents bear the costs of suit. 3. The judgment of the court a quo was set aside and substituted with: (i) The application to set aside the Sheriff's sale is dismissed with costs. (ii) The sale of the property (remainder of lot Brooke Estate, measuring 7258 square meters, held under Deed of Transfer No. 4935/2004) sold by public auction to the third respondent (appellant) for USD 260,000 is confirmed.

The binding legal principles are: (1) A court's jurisdiction under Rule 359(9) to set aside a Sheriff's decision can only be engaged where there were valid proceedings before the Sheriff under Rule 359(7) - if the Sheriff's proceedings are found to be a nullity, the court has no jurisdiction to proceed under Rule 359(9). (2) The failure by an interested party to file written opposition to a request to set aside a sale in execution does not constitute an irregularity that nullifies the Sheriff's proceedings or gives rise to a default judgment - the Sheriff retains a duty to consider the request on the papers before him and determine whether there is basis for setting aside the sale. (3) A court commits a misdirection when it determines issues not placed before it by the parties and grants relief not sought by any party. (4) Where proceedings have a chequered history with repeated opportunities given to judgment debtors over many years to satisfy judgments or sell property, courts must ensure finality and not indefinitely frustrate judgment creditors in executing valid judgments.

The Court noted in passing that the court a quo could not grant relief (3 months to sell by private treaty) which was neither prayed for nor established in the application, reinforcing the cardinal principle that courts cannot grant relief not sought. The Court also observed that the valuation report relied upon by the judgment debtors, placing the forced sale value at USD 307,500, was done on 5 December 2018 long after the Sheriff's sale on 6 September 2018, and was therefore of no use in determining the application. The Court emphasized the importance of finality in execution proceedings, noting that the case had a chequered history where a judgment creditor had struggled to execute its judgment since 2014, and that judgment debtors had been given ample time to either pay the debt or sell the property at a higher price but failed to do so.

This case clarifies important principles regarding sales in execution under Rule 359 of the High Court Rules in Zimbabwe (applicable to South African law by analogy given similar procedural frameworks). It establishes that: (1) courts cannot grant relief on grounds raised mero motu where specific statutory grounds are prescribed; (2) courts cannot exercise jurisdiction under review provisions where they have found underlying proceedings to be a nullity; (3) failure to file written opposition to a Sheriff's request does not create an automatic bar or nullify proceedings; (4) courts must determine matters on their merits and cannot grant relief not sought by parties; and (5) there must be finality to execution proceedings where judgment debtors have been given repeated opportunities over many years to satisfy judgments or sell property at higher prices. The case emphasizes the importance of adherence to civil procedure rules and the principle that judgment creditors should not be indefinitely frustrated in executing valid judgments.