BERE J: The plaintiff and the defendant entered into a verbal lease
agreement and pursuant to that lease agreement the plaintiff has sought the
eviction of the defendant on the ground that the defendant is in breach of that
lease agreement having failed to pay rentals as agreed by the parties.
It was the plaintiff's
position that it terminated the lease agreement on 17 December 2009 but the
defendant refused to give vacant possession of the leased property hence the
instant proceedings.
The plaintiff has basically
sought an order confirming the defendant's eviction and other ancillary relief
associated with the defendant's breach of the lease agreement The defendant
sought to resist the eviction on two grounds viz, that it has not defaulted in
the payment of its rentals and that it remains in occupation of the premises as
lien for the improvements it allegedly made on the leased property.
Apart from this the
defendant also filed a counter claim seeking to recover the value of the
improvements it allegedly made on the property.
The plaintiff denied
ever consenting to the improvements in question which in any event were made in
complete violation of the City of Harare as the Local Government Authority. It
argued that such improvements were of no value to it and that the defendant was
at liberty to remove such improvements.
At the pre-trial
conference conducted on 27 July 2009 the following issues were referred to
trial.
“1.1. whether or not defendant has paid rent due
to plaintiff's for the period from the 1st of May 2008 to date.
1.2. Is defendant entitled to remain in
occupation of the plaintiff's property by reason of a lien thereupon?
1.3.1 What improvements, if any did the defendant
effect to the plaintiff's property?
1.3.2. If so were these authorised by the plaintiff?
1.3.3. Were the improvements, in any event approved
by the Harare Municipality?
1.3.4. The value of such improvements.
1.3.5. Is defendant entitled to compensation in
respect of these improvements?”
OTHER SALIENT
FEATURES OF THIS CASE
The onus and duty
to begin was thrust upon the defendant on all the agreed issues.
Secondly,
it is also pertinent to note that at the pre-trial conference the plaintiff
sought and was granted the right to amend the amount of claim of the rent
arrears from Z$160 trillion to US6 800-00 and the rent value of the plaintiff's
property was amended from Z$20 trillion per month to US850-00 per month.
THE AMENDMENT OF THE
ARREAR RENTALS
Whilst the amendment of
the arrear rentals was made by consent with no issue being taken by the parties
on such amendment it occurs to me that such an approach inevitably triggered
another legal issue, viz, currency nominalism.
I have no doubt in my
mind that the amendment of the figure of arrear rentals was prompted by the
debasement of the Zimbabwean dollar. Arrear rentals in this case are clearly a
debt owed to the plaintiff by the defendant and in my view it was not competent
for the plaintiff to have amended its debt from Zimbabwe dollars to the United
States dollars. It is clear to me that the sole motive was to circumvent the
principle of nominalism of currency which underlines the fact that “a debt
sounding in money has to be paid in terms of its nominal value in respective of
any fluctuation in the purchasing power of the currency”.
On this point of law I
can do no better than to refer with respect to the statement of law expounded
by E.M. GROSSKOPF JA when he stated:-
“ Its essence, in the field of obligations,
is that a debt sounding in money has to be paid in terms of its nominal value
irrespective of any fluctuation in the purchasing power of currency. This
places the risk of a depreciation of the currency on the creditor and saddles
the debtor with the risk of an appreciation…”
It is clear to me that
even if the plaintiff had been able to lead evidence to show that the defendant
had not paid the rentals, the plaintiff would not have been able to recover the
amount in United States dollars but in Zimbabwe dollars.
However, fortunately in
this case, the defendant's representative was able to demonstrate that his
company was not in arrears. The plaintiff's counsel conceded this point.
Despite this I am of the
firm view that for the holding, over damages, different considerations would
apply particularly given the fact that the amount of claim under this heading
involves unpaid rentals at a time when the Zimbabwe dollar despite it remaining
legal tender had literally been elbowed out of circulation by the introduction
of foreign currency. Besides, the concept of unjust enrichment as expounded in
the case of Reza v Nyangani
would seem to favour this approach. I will come back later in this judgment
to explore this point. To avoid confusion I prefer to deal with the issues as
raised by the parties at the pre-trial conference.
IS THE PLAINTIFF OWED ARREARS RENTALS
I do not wish to revisit this issue. Suffice it to say
that the defendant's representative was able to demonstrate to the satisfaction
of the plaintiff's representative and consequently the court that the defendant
did not owe the arrear rentals claimed in the summons.
The defendant's representative's uncontroverted
evidence was that the defendant's rentals were paid up to February 2009 and
that it paid nothing after that date. It goes without saying that the defendant
did not pay any rentals from March 2009 to date.
The question that has exercised my mind is “How much
rentals was defendant supposed to pay from March 2009?
The defendant's position was that it was never advised
how much rentals were supposed to be paid. This position is understandable
given the plaintiff's mistaken position that the defendant was in default when
in fact the defendant had paid rentals up to February 2009. The thrust appeared
to have been on evicting the defendant and there was nothing in the form of
evidence showing that the defendant was asked to pay US$850-00 in form of
rentals from the agreed cut off date of March 2009.
It is even more confusing if one considers that the
valuation report (exh 14) was only compiled in June 2009. The situation is
further compounded by the fact that Innocent Muronzi who gave evidence on the
report itself on behalf of the plaintiff is not the one who compiled that
report. The report was compiled by R.F. Mangwiro who for some unexplained
reasons was not called to give evidence.
In his closing submissions on the issue of holding
over damages counsel for the plaintiff argued that the court must accept that
the figure of US$850-00 is reasonable as monthly rentals. The question that
comes to my mind is “from which period should that figure be computed?” Could
one say these rentals were from March 2009 or from June 2009 when the valuation
was allegedly computed?
Commenting on holding over damages the defendant's
representative's position was that whatever rentals his company has to pay must
take into account the fact that the plaintiff itself is using part of the
leased property to store its office furniture and stationery. This positioned
was confirmed by one of the key witnesses for the plaintiff, Sharon Samushonga
who said she was keeping some keys to one of the rooms which form part of the
leased property. The bottom line is there is no agreement between the parties
on the monthly rentals. Issues of rentals must be easily ascertainable and the
exact amount of rentals due to the plaintiff must never be a subject of
conjecture and speculation.
As highlighted earlier on, there is not the slightest
indication as to when the defendant was required to have paid any agreed
rentals as between the parties.
There is yet another dimension to this case. If one
accept that the original amount for rentals was Z$20 trillion per month which
was subsequently amended to US$850 per month would it not have been prudent for
the plaintiff to lead evidence to try and explain the amendment? As it stands
there was no evidence tabled in this court to show how the amendment came
about. If it is true that the conversion of Z$20 trillion to US$ is US$850-00,
then there is a yarning gap in the plaintiff's case to explain how this conversion
came about. Figures cannot just be slotted from the air. There must be a basis
upon which the amendment was made.
Whilst the court acknowledges that there are holding
over damages, the court is not able to ascertain the exact figure. This is
because of the poor manner in which the evidence has been presented in this
case.
IS THE DEFENDANT ENTITLED TO CLAIM ius retentionis IN THIS CASE?
What runs through the defendant's plea and counter
claim in this case is its mistaken belief that until such time it is paid the
amount it claims for improvements it is entitled to stay on the leased
property.
Authorities are in agreement on the legal position in
this matter. The position is eloquently expressed by GILLESPIE J in the case of
Ormashah v Karasain
the following:-
“The effect of this law is unequivocally
that a lessee, and consequently the defendant, has no right of retention of
occupation of leased property after the termination of the lease as a lien
against compensation for improvements.”
See also Bangure v Gweru City Council,
Derby Farm (Pvt) Ltd v Stewart Musonza and B Chirunga.
In essence the defendant
has no defence to the eviction in this case even if he were able to demonstrate
that it effected appropriate repairs on the plaintiff's property.
WHAT IMPROVEMENTS
WERE CARRIED OUT BY THE DEFENDANT
In his well researched
and quite detailed closing submissions, the plaintiff's counsel expressed the
view that as long as the defendant remained in occupation of the leased
property the court is precluded from determining its claim for compensation for
the alleged improvements. I am unable to share this view although I hold the
view that such a claim cannot be used as a shield against eviction.
I believe that once the
defendant has properly filed its claim like in the instant case, the court is
enjoined to determine the validity or otherwise of such a claim and I proceed
to do so.
It is the accepted legal
position that a leasee is entitled to compensation for necessary and useful
improvements provided such improvements are made with the consent of the
lessor, See Reza v Nyangani and Derby
Farms (Pvt) Ltd (supra).
The defendant's
representative gave evidence to the effect that it made numerous improvements
on the leased property, both on the existing structures and by the construction
of the additional structures which the witness constantly referred to as
“illegal structures”.
It will be remembered
that at the pre-trial conference it was agreed by the parties that the onus to
prove this claim lay on the defendant. The defendant's representative took the
court through the various renovations and repairs the defendant company
embarked on upon occupation of the leased property to make it usable. He also
advised the court that his company with the consent of the lessor constructed a
completely new structure on the leased premises. Exhibits 1, 9 and 10 were
tendered to try and confirm the alleged improvements and construction work done
on the leased premises. It is quite significant that none of the plaintiff's
representatives who directly dealt with the defendant's representatives at the
time of the defendant's entry onto the leased property were called to try and
rebut the defendant's claims.
The plaintiff accepted
that some improvements were made on the leased premises but denied that the
other improvements alleged by the defendant's representative had been carried out. Through Sharon Samushonga
the plaintiff denied ever consenting to the construction of the new structure
which the defendant claimed to have constructed. Sharon put herself in the most
unenviable situation of having to testify on issues that allegedly happened
long before she came into the picture. The accepted evidence is that the
defendant took occupation of the leased property in 2002 and that Sharon joined
the plaintiff as its chief operations officer in June 2008. The improvements
and construction of the new structures on the leased property took place long
before Sharon joined the plaintiff and naturally her evidence on the claimed
improvements and construction work by the defendant natural limitations. Her
evidence was poor and unhelpful to the plaintiff's case as she was not in a
position to rebut the defendant's representative's position.
The court accepts that
certain improvements were made by the defendant and that some construction work
was carried out by the defendant. I believe the turning point really was not
whether or not improvements had been made. The decisive point was the value of
such improvements and the alleged construction of the new structures.
As stated exhibits 1, 9 and 10 were produced in court to try and assist
the court in appreciating the value of the construction work and the
improvements made. A builder (Paul Machimbike) and not a valuer was called by
the defendant to try and give some value on the improvements.
The court did not loose sight
of the fact that the improvements carried out as well as the construction
itself were carried out long before dollarization but the claim itself was
computed in United States dollars with no clue at all in the form of evidence
to show how the conversion itself was done.
To compound the
defendant's position its representative conceded that the construction made was
done without city council approval and that it was indeed an illegal structure.
There was no sufficient evidence led to show how such an illegal structure
built during the Zimbabwe dollar era would assume a value in United States
dollars let alone assume any value at all.
In my well considered
view the cumulative effect of the evidence tendered before the court was
insufficient to enable the court to grant judgment in favour of the defendant.
The evidence fell short of what was expected and the claim suffered the same
fate suffered by the plaintiff's claim. All the pieces of evidence tendered by
the defendant's representative were most unhelpful in assisting the court in
the computation of the exact value of the improvements and construction work
carried out.
Consequently I order as
follows:-
1.
The cancellation of lease agreement between the defendant and
the plaintiff is hereby confirmed.
2.
The defendant is to vacate the leased premises before close
of business on 14 July 2011 failing which the Deputy Sheriff shall be
instructed to carry out the eviction.
3.
The defendant shall pay the costs relating to his eviction on
the ordinary scale.
4.
Absolution from the instance is granted in favour of the
defendant as regards the claim for holding over damages.
5.
Absolution from the instance is granted in favour of the
plaintiff for the defendant's counter claim.
Gill, Godlonton and Gerrans, plaintiff's legal practitioners
No
legal representation for the defendant
