Kudakwashe A C Chigoma N.O v Mohanlal Nathu Naran and Renaissance Merchant Bank (Pvt) Ltd

The claimant (Mohanlal Nathu Naran) purchased stand number 431 Victoria Falls Township from the judgment debtor on 22 December 2010 for $80,000. Before taking transfer, the claimant discovered he needed to clear a mortgage bond in favour of POSB encumbering the property. The claimant paid off this mortgage bond totaling $86,000. Before transfer could be effected, the property was attached by the Sheriff to satisfy a debt owed by the judgment debtor to the judgment creditor (Renaissance Merchant Bank). The claimant had paid the full purchase price and cleared the mortgage bond but title had not yet been transferred into his name at the Deeds Registry.

• Whether immovable property can be attached in execution against a judgment debtor when the judgment debtor has fully divested himself of all rights in the property through sale
• Whether a purchaser who has paid the full purchase price and is awaiting transfer has sufficient interest in property to prevent attachment by judgment creditors of the seller
• Whether registration of title at the Deeds Registry is determinative of ownership in circumstances where a bona fide purchaser has fully paid for property and is in the process of taking transfer
• Whether the court should apply a technical approach based on registered title or consider the equities and real interests when determining interpleader claims

The court released the property from attachment in favour of the claimant. The interpleader claim was granted.

Where an owner has fully divested himself of all interest in immovable property through a sale, and where the purchaser has paid the full purchase price and cleared all encumbrances preventing transfer, with only the formal registration of transfer remaining outstanding, the court will recognize the purchaser's real interest in the property and prevent attachment of that property by creditors of the seller, notwithstanding that legal title remains registered in the seller's name at the Deeds Registry. In such circumstances, the purchaser's proprietary interest in the process of completion takes precedence over a judgment creditor's claim for an unrelated debt, and the court will apply equitable principles rather than adopt a purely technical approach based on registered title.

The court observed that it would be unjust for the court, being fully aware of the judgment debtor's divested interest in the property and the claimant's real interest, to simply choose to go the technical route based on registration at the Deeds Registry. The court noted that such a conclusion would not be supported by the facts and would not represent a proper application of the judicial mind to the facts. The court also distinguished between the nature of competing interests, noting that the claimant was in the process of acquiring the asset and assuming ownership, while the judgment creditor was merely owed a debt which had absolutely no relationship whatsoever with the property in issue.

This case is significant in Zimbabwean property and execution law as it establishes that courts will look beyond mere registered title when determining interpleader disputes involving immovable property. The judgment affirms that where a purchaser has fully paid for property and the seller has completely divested himself of all beneficial interest, with only the formality of transfer remaining, the court will recognize the purchaser's equitable interest and protect it from attachment by the seller's creditors. The case prioritizes substantive justice over technical formalism and recognizes that the doctrine of registered title does not operate as an absolute bar to recognizing real beneficial interests in property, particularly in execution proceedings where innocent third parties would otherwise be prejudiced.