NANHANGA v CHALMERS & ORS 2014 (2) ZLR 486 (H)

Flynote

Practice and procedure — execution — sale — sale by private treaty — price reasonable and sale confirmed by Sheriff — judgment debtor subsequently paying off debt — sale not thereby cancelled

Headnote

The first respondent was the registered owner of a property which was sold at a public auction in execution of a judgment granted against the first respondent. The applicant was the highest bidder. The first respondent objected to the sale on various grounds, including the price obtained. The Sheriff did not determine the objections, but put the property up for sale by private treaty. The applicant once more was the highest bidder and his bid was accepted. The Sheriff confirmed the sale and the transfer of the property into the applicant's name was ordered. About a month after the Sheriff had confirmed the sale, the first respondent's legal practitioners wrote to the applicant advising that the first respondent had managed to satisfy the judgment debt and notifying him that the transfer of the property had been reversed. The Sheriff then wrote to the first respondent and indicated that the confirmation of the sale was done in error. The applicant sought an order setting aside the cancellation of the sale and for the transfer of the property to him.

Held, that sales in execution by private treaty are governed by r 358 of the High Court Rules 1971. Under r 358(1) the Sheriff may, at the outset, sell a property by private treaty if he is satisfied that the price offered is fair and reasonable. He requires the consent of all interested parties, including the judgment debtor. The court may also sanction the sale. The provision was inserted with the judgment debtor in mind. The debtor has an interest in ensuring that the sale has maximum benefit and fetches the highest possible price as the residue will be paid to him. He is required to be consulted so that his interests are secured. He may bring a buyer with a better offer if he is in a position to do so. His consent must be express.

Held, further, that the second situation is where a sale by public auction has taken place and the Sheriff is not satisfied that the price offered is fair and reasonable. The Sheriff has an option to sell the property by private treaty so that he ensures that the sale realizes the best price possible. The Sheriff may opt for a private sale at any stage. He does not have to be requested by anyone to resort to a private treaty sale, nor does he need the consent of the judgment debtor or any other interested person. Where the Sheriff is not satisfied with the price offered at the private treaty sale, he may put the property up for sale by public auction again.

Held, further, that where a sale by public auction is held and is subsequently aborted and a sale by private treaty takes place and is confirmed, the objections to the public sale fall away and cannot stand in the way of confirmation of the sale by private treaty simply because the earlier objections were not determined at the time the public sale was in existence. The Sheriff had no grounds for cancelling his confirmation of the private sale. In any case, once the sale was confirmed, the Sheriff was functus officio.

Held, further, that where a debtor manages to settle the debt after the sale but before confirmation of the sale by the Sheriff, he may apply to court to have the debt cancelled. The odds are in his favour at that stage and this is a good ground for having the sale set aside. Where the sale has been confirmed by the Sheriff, the sale is no longer conditional. The transaction becomes perfecta and the sale is sealed. The purchaser acquires rights which can only be upset by a court of law. The approach of the courts is that judicial sales are not to be readily interfered with after they have been confirmed. The fact that the judgment debtor has subsequently satisfied the judgment debt does not automatically invalidate the sale. Here, the price was reasonable in the circumstances and there was no basis for cancelling the sale.