REPORTABLE ZLR 61
Judgment
No. SC 52/07
Civil
Appeal No 302/04
RIXI
TAXI SERVICES CO-OPERATIVE LIMITED v UK
ELECTRICAL (PRIVATE) LIMITED
SUPREME COURT OF
ZIMBABWE
CHEDA JA, MALABA JA &
GARWE JA
NOVEMBER 6, 2007 &
JUNE 9, 2008
J B Wood, for
the appellant
H Simpson, for
the respondent
CHEDA JA: This is an appeal against the decision of the High Court
in which the respondent was granted an order for cancellation
of the
sublease agreement between the parties, and to evict the appellant.
The appellants grounds of appeal are as follows -
The court a quo erred in finding in effect that the notice to
vacate given to the appellant was adequate.
The court a quo erred in finding that the respondent has
discharged the onus on it to show that the premises are
required for reconstruction for its own use.
The court a quo erred in failing to find that the respondent
was seeking to approbate and reprobate at the same time.
The background of the matter is as follows.
The respondent was leasing property known as stand No 1582, Harare
Township. The appellant entered into agreement with the respondent
as a sub-tenant. The sublease was to commence on 1 March 1997 and
end on 31 December 1998. Rental was to be paid in advance on
the
first day of each month, and if payment was made after the seventh
day of each month a 5% late payment fee would be levied.
The agreement also provided that:
(a) Should the sub-tenant fail to pay rental or any other monies
due by the sub- tenant
in terms of this lease on due date; or
(b) commit any other breach of any condition of this lease and
fail to remedy such
breach
within seven days after delivery of written notice to the
sub- tenant by the main
leasee to remedy such breach or;
(c)
(d) Suffer any judgment against it to remain unsatisfied
for a period of seven days;
then
and in any such events, the main lessees shall be entitled,
without prejudice to
any other
claim of any nature whatsoever, which it may have against
the sub-tenant as
a result of such breach or the occurrences
referred to (c) and (d)
hereof, to cancel this lease forthwith without notice to
the sub- tenant,
and to evict the sub-tenant from the leased premises. (my
underlining)
On 27 February 1997, a day before the signing of the lease, the
appellant wrote a letter headed:
LETTER OF GUARANTEE TO VACATE PREMISES BY 31 DECEMBER 1998
We hereby give guarantee that we will vacate the premises, 5 Samora
Machel Avenue, Harare by the 31st December 1998 or
earlier.
On 26 June 1998 the parties held a meeting within the leased premises
and discussed the lease agreement which was due to expire
on 31
December 1998.
The respondent advised that it was not feasible to extend the lease
agreement as the respondent needed more space, and that there
was a
clause in the Tobacco Hall Insurance Agreement which did not permit
subletting without express authority of the landlord.
The parties
were also taken on a tour of the tiles warehouse to emphasize the
need for more space. All this is reflected in
the minutes of that
meeting.
However the appellants did not vacate the premises by 31 December
1998. It remained on the premises and continued to pay increased
rental as required by the respondent. By letter dated 8 September
1998 the appellant requested an extension of the lease agreement
to 31 December 1999.
In reply to this letter the respondent advised the appellant that the
lease could only continue on a month to month basis.
On February 2003 the respondent wrote to the appellant reminding it
about the notice to vacate the premises delivered by the Messenger
of
Court on 6 December 2002. This letter had been acknowledged by the
appellant in its letter dated 10 December 2002. In that
letter the
appellant admitted that it owed the respondent a sum of $621 893,88
and proposed to pay it off by installments of $50
000.00 per week
starting that week.
On 9 June 2003 the respondent wrote to the appellant and attached a
schedule showing arrears of rent, rates, water, electricity
and
requested the appellant to settle the amounts without delay.
The appellant did not vacate the property until the respondent
obtained a court order from the High Court to evict the appellant.
Turning now to the appellants grounds of appeal, it is clear that
the original lease agreement expired on 31 December 1998.
The
appellant was allowed to remain on the premises only on a month to
month basis. This arrangement meant that the appellant
was now a
statutory tenant but as long as it continued to pay the rent as
arranged.
The appellant admitted being in arrears with its rental payments.
This was clearly a breach of the conditions of the lease agreement.
Even if the appellant became a statutory tenant it lost the
protection of the provisions of s 22(2) of the Commercial Premises
Rent Regulations SI 676 of 1983. Those Regulations protect a
statutory tenant who continues to pay rent as arranged, not one who
defaults.
The section reads as follows:
22(2)
No order for the recovery of possession of commercial premises or the
ejectment of a lessee therefrom which is based on
the fact of the
lease having expired, either by the effluxion of time or in
consequence of notice duly given by the lesser, shall
be made by a
court, so long as the lessee
continues
to pay the rent due, within seven days of due date; and
performs
the other conditions of the lease;
unless the court is satisfied that the lesser has good and sufficient
grounds for a requiring such order other than that:
the
lessee has declined to agree to an increase in rent; or
the
lessor wishes to lease the premises to some other person.
The appellant also argued that there was no breach of the conditions
of the lease agreement.
The failure to pay rent was a very clear breach of the agreement.
The rental payments were in arrears and the respondent complained
about that. The appellant admitted liability in its letter to the
respondent.
On the respondents need for the premises the issue was discussed
at a meeting and the appellant has not disputed the accuracy
of those
minutes and the fact that the appellants representatives were
actually taken on a tour of the premises to be as evidence
of the
need for more room by the respondent. There was therefore no need
for the respondent, after that, to produce any plans
when the
appellant accepted the situation and had undertaken or guaranteed
that it would vacate the premises.
It is therefore clear that the appellant breached the conditions of
the lease agreement and the respondent was entitled to cancel
the
lease agreement and get an order for eviction.
A further point raised by the appellant is that there was no proper
notice of cancellation, as stated in the case of Jackson v Unity
Insurance Co Ltd 1991 (1) ZLR 381.
This argument overlooks the contents of the agreement that the
parties entered it. Clause 22(d) of the lease agreement under
BREACHES authorises the respondent to cancel the lease forthwith
without any notice to the sub-tenant and to evict it.
A reading of the correspondence between the parties shows that the
appellant was well aware that the lease period had long expired
and
in fact it had requested extensions while it was looking for
alternative accommodation.
In such a case there would have been no need to give the appellant
notice of cancellation as it had accepted and undertaken to
move out
of the premises. This point distinguishes the appellants case
from Jacksons case (supra).
In the circumstances I am satisfied that there is no merit in the
appeal and it is dismissed with costs.
MALABA JA: I agree
GARWE JA: I agree
Byron, Venturas & Partners, appellants legal
practitioners
Manase & Manase, respondents legal practitioners
