Electroforce Wholesalers (Private) Limited and Chamunorwa Mawunganidze v FBC Bank Limited

The respondent obtained a judgment against the applicants on 10 October 2012 in case number HC 4944/12. On 11 March 2013, the applicants were served with a Notice of Attachment of movable and immovable property. The property in question was Stand Number 834 Adylin Township of Lot 2A Bluffhill measuring 1211 square meters held by the second applicant under Title Deed Number 549/07. The second applicant had mortgaged this property to the respondent as security for a debt advanced to the first applicant (a body corporate). When the first applicant defaulted, the respondent instituted foreclosure proceedings wherein it obtained an order declaring the property specially executable. The applicants did not contest this order at the time. On 19 March 2013, the applicants filed an application in terms of Rule 348A(5a) of the High Court Civil Rules 1979 seeking suspension of the sale in execution for 12 months. The second applicant resided at the property with his family and claimed he had no other house. The first applicant alleged it had capacity to pay the debt, claiming it was owed USD 1,200,000 by the ZRP and other debtors.

• Whether the first applicant (a body corporate) had locus standi to bring an application in terms of Rule 348A(5a) of the High Court Civil Rules 1979
• Whether Rule 348A(5a) applies to property that has been mortgaged and declared specially executable by a court order in foreclosure proceedings
• Whether an application for suspension of sale in execution can be brought after a court has already granted an order declaring property specially executable

The application was dismissed with costs.

1. Rule 348A(5a) of the High Court Civil Rules 1979 is available only to natural persons (execution debtors) who occupy the dwelling or whose family members occupy it, and is not available to body corporates. 2. Rule 348A does not apply to foreclosure proceedings or to the sale of immovable property that has been declared specially executable by court order. 3. Once a court has made an order declaring property specially executable in foreclosure proceedings, a mortgagor cannot use Rule 348A(5a) to suspend the sale, as this would amount to seeking rescission of the court order through the back door. 4. The mortgagee's right to foreclose and have secured property sold to satisfy the debt is a fundamental aspect of real security provided by mortgage bonds, which cannot be defeated by subsequent applications for suspension under Rule 348A.

The court noted with approval the principle articulated in Benson v Hirschlorin 1936 NPD 277 that if a mortgagor does not pay the capital when due or commits any breach of the conditions of the contract entitling the mortgagee to foreclose, the mortgagee is entitled to have the secured property sold and obtain the amount of the debt from the proceeds of sale. The court also noted the principle from Silberberg and Schoeman's The Law of Property (3rd Ed) that the significance of mortgage bonds and hypothecation lies in providing creditors with real security, entitling them to demand that the secured property be sold if the debtor cannot pay, with proceeds used to satisfy the claim. The court mentioned that the loan agreement and Deed of Hypothecation provided for costs on a legal practitioner and client scale, citing Scotfin Ltd v Ngomahuru (Pvt) Ltd 1997 (2) ZLR 567, though the final order only awarded ordinary costs.

This case is significant in Zimbabwean civil procedure as it clarifies the scope and application of Rule 348A(5a) of the High Court Civil Rules 1979. It establishes important limitations on the rule's applicability: (1) the rule is only available to natural persons who occupy or whose family members occupy the property, not to body corporates; and (2) the rule does not apply to property subject to foreclosure proceedings that has been declared specially executable by court order. The judgment reinforces the principle that mortgage bonds provide real security to creditors, and that mortgagors cannot use procedural rules designed to protect dwelling occupants to circumvent court orders obtained in foreclosure proceedings. It protects the finality and enforceability of court orders declaring property executable and upholds the rights of secured creditors.