Farmers Co-operative (N.R) LTD v Joan Margaret Drake ((1963 - 1964) Z and NRLR 74) [1964] ZMHCNR 6 (10 April 1964)

FARMERS CO - OPERATIVE (N. R) LTD v JOAN MARGARET DRAKE (1963 - 1964) Z and NRLR 74 1963 - 1964 Z and NRLR p74 [Before the Honourable Mr. Jus�ce CHARLES on the 10th April, 1964.] Flynote Writ of elegit - sale of land by order of the court - prac�ce under. Judgment or order - recogni�on of dis�nc�on between void and voidable. Working out orders - can only be made in proceedings in which given. Headnote A judgment creditor selling land under a writ of elegit must obtain direc�ons from a judge sufficient to create a binding contract with the purchaser; the strict prac�ce governing such direc�ons may be modified if all interests in the land are protected. Cases cited: (1) Re Ogilvie (1871) 41 LJ Ch. 336. (2) Re Bithray (1889) 59 LJ Ch. 66. (3) Macfoy v United Africa Co. Ltd [1961] 3 All ER 1169. (4) Re Pritchard [1963] 1 All ER 873. (5) Daws & Daily Sketch and Sunday Graphic Ltd. and another [1960] 1 All ER 397 G D Clough for the plain�ff J B Metcalfe - Walton for the defendant Judgment Charles J: This is an applica�on upon origina�ng summons for - (1) A declaratory order that a conveyance by the plain�ff to the defendant shall effec�vely pass all �tle and interest in the property and lands ordered to be sold by order of the court on the 30th January, 1963, to the defendant as purchaser. (2) An order that the plain�ff and defendant, as vendor and purchaser respec�vely, shall execute a conveyance of the lands ordered to be sold by the said order of the court. (3) An order for such further or other relief as to the court seems fit. (4) An order that in default of agreement the form of conveyance shall be setled by the court. The facts out of which this applica�on has arisen are as follows: In September, 1961, the plain�ff obtained judgment in the sum of £1,002 8s. 8d. and costs, taxed at £39 12s. 1d.; against Abel Daniel de Lange, in an ac�on between him as plain�ff and the said Abel Daniel de Lange as defendant (suit 1961/HP/145). On the 9th December, 1961, a writ of elegit was issued in respect of the said judgment and, following the usual inves�ga�on, the deputy sheriff caused to be delivered on the 3rd February, 1962, to the plain�ff, to hold un�l the judgment debt was sa�sfied, a piece of land near Broken Hill of which the said Abel Daniel de Lange was seized in fee simple under an indenture of grant of final �tle between the Bri�sh South Africa Company and one Charles Henry Murdoch Boon. The writ of elegit and the return to it were duly registered. Following a writen offer of purchase of this land by Mrs. Drake, the wife of de Lange's tenant, the plain�ff applied under the Judgments Act, 1864 (27 & 28 Vict. c. 112) by origina�ng summons (1962/HP/263) for an order 1963 - 1964 Z and NRLR p75 CHARLES J for sale of the judgment debtor's interest in the said land and for sa�sfac�on of the moneys due in respect of the judgment debt out of the proceeds of sale. The origina�ng summons was served on the said Abel Daniel de Lange in Perth, Western Australia. De Lange did not enter an appearance. On the 23rd October, 1962, Whelan, Ac�ng J., made an order in chambers authorising the sale of the land and direc�ng the applica�on of the proceeds from any such sale. On the 30th January' 1963, Whelan, Ac�ng J, made another order in chambers as follows: 1. That the lands ordered to be sold by order dated the 23rd October, 1963, be sold by private contract to Mrs. Drake at a price of not less than £1,500. 2. That the judgment creditor as judgment creditor shall convey all the lands delivered to him to Mrs. Drake at a �me and place to be agreed upon by the par�es. 3. That the balance, if any, of the purchase money a�er sa�sfying covenants arising in respect of the judgment be paid to the judgment debtor. On the 5th July, 1963, the solicitor for Mrs. Drake tendered a dra� deed of conveyance to the plain�ff's solicitors in respect of the said land. In that conveyance Abel Daniel de Lange was shown as a party. In a covering leter, Mrs. Drake's solicitor expressed the opinion that the order of 30th January, 1963, was permissive only: that it did not divest de Lange of the legal estate and that, consequently, he was a necessary party: that if de Lange could not be found, or if he refused to execute the conveyance, an order dives�ng him of the legal estate and ves�ng that estate in some other person would be necessary. On the 25th July, 1963, the plain�ff's solicitors returned the dra� conveyance with amendments and stated in a covering leter that in their opinion the court order was mandatory in its direc�on that the land be sold by the judgment creditor as such, and that, consequently, the judgment creditor had been appointed to convey that land to Mrs. Drake. On the 12th August, 1963, Mrs. Drake's solicitor again wrote to the plain�ff's solicitors sta�ng that " as the mater stands, the orders made by the court are useless to effect the conveyance to my client " as " they may merely purport to convey the property ' as judgment creditor ' (whatever that may mean) ". As a result of this difference of opinion the plain�ff took out the present origina�ng summons against Mrs. Drake. It will assist in the determina�on of this applica�on to summarise the usual prac�ce pertaining to the sale of land held by a judgment creditor under a writ of elegit. A judgment creditor to whom legal possession has been delivered under a writ of elegit is a tenant by elegit under the judgment debtors (Halsbury 1st edi�on., Vol. 14, page 69.) Under the Judgments Act, 1864 (27 and 28 Vict. c. 112) he may apply by pe��on (now by origina�ng summons) for an order for sale of the land to which the writ relates. Before gran�ng the order, the court or judge may direct inquiries as to the �tle, nature and par�culars of the interest of the judgment debtor in the land, but it need not do so when those maters are clear. (Re Ogilvie (1871) 41 L. J. Ch. 336; Re Bithray (1889) 59 LJ Ch. 66.) 1963 - 1964 Z and NRLR p76 CHARLES J When an order for sale is made, it is to be carried out in accordance with the prac�ce of the court in respect of the sale of real estate of deceased persons for the payment of debts. (Judgments Act, 1864, sec�on 4.) That prac�ce is governed by the general rules contained in Order 51 of the English High Court Rules and the general chancery prac�ce, so far as the later is not inconsistent with those rules, in rela�on to sales by the court. (See High Court Ordinance, Cap. 3 of the Laws of Northern Rhodesia, sec�on 10; High Court Rules, General Rule 4.) Under that prac�ce, where a sale has been ordered, a judge may authorise the carrying out of the sale either by proposals being placed before him for his sanc�on or by proceedings altogether out of court. An order authorising the carrying out of the sale by proceedings altogether out of court must be prefaced by a declara�on that the judge is sa�sfied that all persons interested in the land are before the court or bound by the order and by a statement of the evidence upon which such declara�on is based. (English Rules, Order 51, rule 1A.) The order as to the mode of sale may be given either with the order for sale itself or subsequently on summons. Before the land can be put up for sale subject to the approval of the judge, an abstract of �tle must be submited to a conveyancing counsel approved or appointed by the judge, unless otherwise ordered. The purpose of the submission is to enable proper direc�ons to be given respec�ng the condi�ons of sale and other incidental maters. (English Rules, Order 51, rule 2.) The next step, in the case of a sale subject to the approval of the court, is to obtain, on summons, the judge's approval of the proposed mode of sale, that is whether by auc�on or by private contract, and of the proposed price and condi�ons of sale, and the judge's direc�ons as to who is to conduct the sale and who are to join as par�es in the contract and conveyance. (English Rules, Order 51, rule 3.) When a contract of sale has been entered into, a cer�ficate of the result of the sale must be obtained from the court, if the sale was by public auc�on, or the contract of sale must be placed before the judge for his approval, if the sale was by private treaty. Un�l whichever of those steps is appropriate has been taken, the contract of sale is not binding but is condi�onal only. Approval of the contract is to be obtained on summons. Once the contract has become binding, performance and comple�on of the contract proceeds as in the case of a private contract of sale, subject to the par�es being able to obtain, on ordinary summons, the direc�ons of the judge in respect of any difficul�es or disputes arising in the course thereof. (See Daniel's Chancery Prac�ce, 8th edi�on, Vol. 1, pages 938 - 971; Halsbury 3rd edi�on, Volume 34, pages 267 - 270.) All summons for direc�ons or further orders must, of course, be served on all interested persons unless the judge otherwise directs. If a necessary party to the deed of conveyance neglects or refuses to join in the execu�on of the deed, the order may be enforced against him by atachment or commital. Alterna�vely, an order may be made under the Trustee Act, 1943, ves�ng the land in, or appoin�ng to convey, another person. Yet another alterna�ve, and the one usually resorted to, is for the court to nominate a person under sec�on 14 of the High Court Ordinance to execute the conveyance. That sec�on corresponds with sec�on 47 of the Supreme Court of Judicature (Consolida�on) Act, 1925, which is a re-enactment of sec�on 19 of the Judicature Act, 1884. 1963 - 1964 Z and NRLR p77 CHARLES J The prac�ce outlined above does not have to be rigidly followed but may be adapted to meet the needs of par�cular cases, and with regard to avoiding delay and saving expense (see English Rules, Order 51, rule 1), so long as the interests of all persons interested in the land to be sold are protected and the proposed purchaser is not put in any less favourable posi�on than a private purchaser for ascertaining the �tle of the land being sold. Hence, in an appropriate case, the approval of a sale by private treaty, and the approval of the resul�ng contract of sale may all be obtained on one summons, and even on the origina�ng summons seeking the order for sale. That also seems to have been the opinion of Whelan, Ac�ng J The substan�al ques�on in these proceedings, therefore, seems to be: Has the judgment creditor obtained from a judge direc�ons which are sufficient or adequate to render whatever contract has been made between him and Mrs. Drake binding between them, bearing in mind the principle stated above as governing a departure from the strict prac�ce? It is clear from the affidavits upon which the two orders were made that the contract of sale between the judgment creditor and Mrs. Drake was made between them before the first order was made and that it was cons�tuted by an offer in wri�ng from Mrs. Drake and an acceptance orally or by conduct on the part of the judgment creditor or his agent. The contract so cons�tuted is an open one. The origina�ng summons on which the first order was made, and which was served upon the judgment debtor, merely sought an order authorising the land executed upon to be sold and for direc�ng the applica�on of the proceeds from the sale. The first order was made as so sought. Consequently, it was neither a direc�on as to the mode of sale nor an approval of the contract of sale which had been made between the judgment creditor and Mrs. Drake. The second order was supplementary to the first, having been made upon an ordinary summons in the proceedings which had been commenced by the origina�ng summons between the judgment debtor and judgment creditor. The ordinary summons was not served on the judgment debtor. That raises a preliminary ques�on whether the order was defec�ve to any and what extent on that account. A defec�ve judgment or order may be either void or voidable according to whether the defect amounted to a lack of jurisdic�on to make it or merely to an irregularity in the making of it. A void judgment or order is a nullity, and as such it is not binding upon any one, whether or not it is formally set aside or declared to be void, and it cannot be made binding by a subsequent act of a person interested in or under it. (MacFoy v United Africa Co. Ltd. [1961] 3 All ER 1169 (P. C.) at page 1172 per Lord Denning.) A voidable judgment or order, on the other hand, is valid and binding upon par�es affected by it un�l it is set aside at the suit of a party to it, though there are instances of such judgments or orders being set aside in such suits as a mater of course or ex debito justitiae. (Re Pritchard [1963] 1 All ER 873 (CA).) In the opinion of Lord Denning, M. R - an opinion with which I respec�ully agree - a 1963 - 1964 Z and NRLR p78 CHARLES J judgment or order which is defec�ve for want of service of the process upon which it is based is voidable only, since a person affected by the judgment or order will be bound by it if he waives service and appears in the proceedings in which it was given or otherwise submits to the judgment or order. (See the dissen�ng judgment of Lord Denning, M. R, in Re Pritchard, sup. at pages 878 - 9.) Upjohn, LJ, however, in the principal majority judgment in the case just cited (at page 883), was of the opinion that proceedings which ought to have been served but have never come to the no�ce of a necessary party at all are void and not merely voidable, but he excluded from such proceedings cases of subs�tuted service, service by filing in default, or cases where service had properly been dispensed with. On either view, the second order of Whelan, Ac�ng J, was voidable, and not void, as the summons did not have to be served personally upon the judgment debtor. (See 1963, Annual Prac�ce, Vol. 1, page 1972, note to Order 67, rule 2), but service would have been sufficient if it had been effected by filing it in default under Order VIII, rule 7 of the Northern Rhodesia High Court Rules - a process which is referred to in the 1964 Annual Prac�ce (Vol. 1, pages 1850 - 52) as an idle exercise. The fact that the second order is voidable, however, at the suit of the judgment debtor renders it an imperfect basis for forcing a conveyance pursuant to it upon Mrs. Drake, and she cannot be compelled to accept such a conveyance, notwithstanding that the possibility of the judgment debtor seeking to set aside the order and, having regard to Order 2 of the current English Rules, the possibility of him succeeding in any such atempt are remote. Turning to the terms of the second order it is to be noted that: (a) That part of it which authorises a sale to Mrs. Drake is in terms which does not extend to approving of the open contract of sale which had already been made between her and the judgment creditor: by its terms it is no more than an authorisa�on of the judgment creditor concluding a sale of the land to Mrs. Drake by private treaty and to entering into a formal contract of sale with her at a price not less than £1,500. (b) It is open to two construc�ons; as an authorisa�on of a sale subject to the court approving of a formal contract of sale or of a sale by proceedings out of court. Which of those two is the proper construc�on to accept is a ques�on which it is unnecessary, and undesirable, to decide here. (c) The appointment of the judgment creditor to convey is at least in an undesirable form. It is dependent for its validity upon sec�on 34 of the Trustee Act, 1893, since sec�on 14 of the High Court Ordinance was not applicable in the absence of any order to convey having been made against the judgment debtor and of any refusal or neglect on his part to obey such an order. No doubt, an appointment of a person by reference to a legally recognised official office may be made under sec�on 34 of the Trustee Act, 1893, but " judgment 1963 - 1964 Z and NRLR p79 CHARLES J creditor " is not such an office and it is desirable that, if a judgment creditor is to be appointed under the sec�on, he should be appointed personally by name so as to avoid any confusion arising should a second judgment creditor appear. (d) The order as to the payment of the purchase money and any balance a�er sa�sfying the judgment and costs and expenses is contrary to sound prac�ce. A purchaser under a sale with the authority of the court is en�tled, in the absence of any order to the contrary, to pay the purchase money into court. (See 1964, Annual Prac�ce, Vol. I, notes at pages 1243, 1248, 1250), to Order 51, rules 1A, 3, 3A. The new English Order 51 is the same as the old.) Whether the court has jurisdic�on to make an order to the contrary may be doubted. But assuming that it has, it is a jurisdic�on which should rarely be exercised, as by doing so it would virtually be le�ng the authorised sale, whether in or out of court, and the disposal of the proceeds pass out of its supervision. It follows from the poten�al, although perhaps, theore�cal, voidability of the second order on the applica�on of the judgment debtor, that the plain�ff in these proceedings, the judgment creditor, is not en�tled to any of the specific orders sought against the defendant, Mrs. Drake. That also follows from the nature of the authorisa�on for sale, given by the second order, whatever that nature may be. If that authorisa�on was to sell by formal contract subject to the approval of the court, the approval of such a contract has not been obtained. Further, such approval could not be obtained without either an abstract of �tle being first submited to an appointed or approved conveyancing counsel and his report placed before the court, or a dispensa�on by a judge from making such a submission and obtaining such report. If the authorisa�on is to be construed as one for a sale out of court and a formal contract has been made between the plain�ff and defendant pursuant to such authorisa�on, that formal contract has not been placed before me to enable the rights of the plain�ff to be determined under it. It was submited for the plain�ff that, if the specific relief asked could not be granted, orders which will enable the sale to be completed should be made under the general prayer. In my judgment, I have no jurisdic�on to make such orders in these proceedings. It should be apparent from the foregoing that addi�onal orders are necessary in order to supplement, work out or vary the second order of Whelan, Ac�ng J Such orders, however, can only be made in the proceedings under which the need for them arises: they cannot be given in dis�nct proceedings such as these. If a court or judge had jurisdic�on in new origina�ng proceedings to supplement, work out or vary interlocutory orders given in earlier separate proceedings, the door would be wide open to li�ga�on becoming confused, court orders being overlooked and injus�ce ensuing. I am confirmed in that opinion by the decision in Daws v Daily Sketch and Sunday Graphic Ltd. and another [1960] 1 All ER 397 (CA), where it was held that an order purpor�ng to consolidate two ac�ons was a nullity as it was made on a summons taken out in one only of the ac�ons instead of upon two summons, one taken out in each ac�on. 1963 - 1964 Z and NRLR p80 CHARLES J There is an order, however, which it is necessary to make in addi�on to dismissing the applica�on and disposing of its costs. At the conclusion of the hearing, I ordered that the purchase money be paid into court. As that order relates to the purposes of these proceedings and not to the earlier ones, the money paid in under that order will not be available in the earlier proceedings. I shall, therefore, direct that the moneys paid into court be paid out to or on the direc�on of the defendant so that, if desired she can have them transferred to the other proceedings. Subject thereto, the applica�on will be dismissed. I shall hear argument on the ques�on of costs.