FBC Bank Limited (applicant) advanced a loan secured by a mortgage bond over Stand 80 Borrowdale Brook (the whole property) to Success Auto (Pvt) Ltd and Honeypot Investments (Pvt) Ltd (sixth respondent). The sixth respondent had previously sold subdivisions of the whole property to various purchasers including the first to fourth respondents, but these subdivisions were never registered. The first and second respondents purchased their subdivision in 2003 and signed a cession agreement with the sixth respondent. The third and fourth respondents also purchased their respective subdivisions in 1997 and later. When the sixth respondent defaulted on the loan, FBC Bank obtained a default judgment from Takuva J under HC7402/13 on 7 October 2013, declaring the whole property specially executable. The bank took transfer of the entire property without notifying the subdivision purchasers who were occupying portions of the land. The first to fourth respondents only discovered this in 2016-2017. The first to fourth respondents initially brought an application under HC3564/17 to cancel the title deed, which was dismissed by Makoni J on the basis that they should first set aside the court order that authorized the transfer. They then brought an application under Order 49 Rule 449(1)(a) in HC3727/18 to set aside the order by Takuva J as erroneously granted. Ndewere J granted the application, rescinding paragraph 2 of Takuva J's order and directing restoration of title to the sixth respondent. FBC Bank then sought leave to appeal to the Supreme Court.
IT IS ORDERED THAT: 1. Leave be and is hereby granted to the applicant to appeal to the Supreme Court against the whole of the judgment of the High Court of Zimbabwe by NDEWERE J in HC3727/18, which judgment was handed down on 10 June 2020. 2. The applicant shall file its notice of appeal within ten days of the date of this order. 3. Costs shall be in the cause.
The binding principle established is that for leave to appeal to be granted, the applicant must demonstrate reasonably arguable grounds with substance, not merely that they wish to appeal. The test is not how good the prospects must be before leave is granted, but how poor they must be before it is refused. Where proposed grounds of appeal raise fundamental legal questions about the distinction between legal and personal rights, the enforceability of agreements that violate statutory provisions, the scope of relief available under Rule 449 applications, and the proper construction of court orders, leave to appeal should be granted as these issues have prospects of success and warrant determination by the appellate court.
The court made several important observations: (1) That a point of law can be raised at any stage of proceedings provided it does not involve unfairness to the opposing party and is not required to be specially pleaded; (2) That agreements forbidden by law are void and unenforceable; (3) That registration of real rights in the Deeds Registry is significant as it informs the world of the existence of such rights; (4) That the right of access to courts is a fundamental right under section 69(3) of the Constitution; (5) That finality in litigation must be balanced against access to justice when considering leave to appeal applications. The court also observed that the relief granted by Ndewere J appeared to go beyond what was specifically sought in the draft order, raising questions about the amendment of relief at the judgment stage.
This case is significant in Zimbabwean jurisprudence for addressing the tension between real rights (mortgage bonds) and personal rights (unregistered sale agreements) in property law. It raises important questions about when holders of personal rights must be joined in foreclosure proceedings, the enforceability of subdivision agreements that violate statutory requirements, and the limits of rescission applications under Rule 449. The case highlights the importance of purchasers protecting their interests through registration and demonstrates the complex interplay between banking security interests and third-party claims to subdivided property. It also addresses important procedural issues about the scope of relief that can be granted in rescission applications and whether courts can grant relief not specifically sought by applicants.