MUTEMA J: The applicant is the lessor of premises known
as Rear Room, Chesterton House, 42
Sam Nujoma Street, Harare.
On 31 August, 2009, through its agents CB Richard Ellis, it entered into a
written lease agreement in respect of the premises with the first respondent.
The first respondent was represented by its director, the second respondent as
surety and co-principal debtor. The period of the lease was to run for two
years from 1 February, 2009 to 31 January, 2011. The basic rent was pegged at
US$150 per month from 1 February, 2009 to 30 June, 2009 and was subject to
review on subsequent review dates.
The
applicant contends that the respondents have breached the lease agreement by
failing to pay rent as agreed upon hence this application for, inter alia:
1.
an
order to confirm the cancellation of the lease agreement;
2.
an
order for the ejectment forthwith of the first respondent together with its
sub-tenants, assignees, invitees and any other persons claiming rights of
occupation through first respondent from the leased premises; and
3.
an
order compelling respondents jointly and severally, one paying the other to be
absolved, to pay applicant US$1 813,04 being arrear rentals accrued by first
respondent from February, 2009 to date.
The respondents' opposition to the
application is premised on four main
planks.
They
are these:
1.
The
amount of arrear rentals quoted of US$1 813-04 is incorrect because annexure
'B' (Tenant Transactions – January 2009 – December, 2009) “shows that we made
payments on 22 May 2009, 15 July, 2009, 28 August, 2009 and 30 September,
2009”.
2.
“The
balance of the alleged arrears should be set off against an amount of US$4
291-00 which we spent on renovations and refurbishments of the premises and
which costs should have been paid by the applicant”.
3.
The
cancellation of the lease agreement is invalid for want of compliance with
clause 20.1.2. of the lease agreement which provides that failure to rectify
breach within 14 days of written notice
having been given by the landlord to the tenant, the landlord may then
cancel the lease. In casu, after the
alleged failure to pay rent on time, the first to come was annexure 'C' – the
letter of cancellation of the lease. No written notice was ever given to
rectify breach within 14 days. In the event the cancellation was invalid so the
lease agreement remains binding till properly cancelled;
4.
The
matter cannot be resolved on the papers in view of the material disputes of
facts regarding whether or not the repairs done by the respondents were authorised
by the applicant's agents. A trial is required to hear evidence on whether or
not Mujati who authorised the repairs had no such authority.
I will proceed to deal with these
defences in their chronological order
WHETHER THE ARREAR RENTALS OF US$1
813-04 ARE CORRECT IN VIEW OF THE PAYMENTS ALLEGEDLY MADE
The accuracy or other wise of the
arrear rentals quoted is neither here nor
there. What is relevant and material
is whether the first respondent incurred arrears in rentals. If is did, this
would constitute breach of lease in terms of clause 20.1.1 as read with 20.1.3.
of the lease agreement (annexure 'A'). Clause 20 reads as follows:-
“20. BREACH OF LEASE
20.1
In the event of:
20.1.1 non – payment of rent or any portion thereof on due date;
or
20.1.2 ………; or
20.1.3 ………; the landlord shall have the
right to cancel this lease and obtain possession of the leased premises and the
contents thereof provided that such action by the landlord shall not prejudice
any claim that the landlord may have against the Tenant for rent already due or
for damages or breach of contract or otherwise”.
A
perusal of annexure 'B' which is the tenant transactions pertaining to first
respondent for the period January, 2009 to December, 2009 clearly shows that
first respondent only made four payments during that period as follows:-
22
May, 2009 $172-50
15
July, 2009 $ 30-00
28 August, 2009 $150-00
30
September, 2009 $100-00
All
these payments were deducted from the balances brought forward leaving a
balance carried forward of $1 813-04.
In
view of the foregoing, it goes without quarrel that first respondent did breach
clause 20.1.1 as read with clause 20.1.3 of the lease agreement. In fact, the
papers show that the respondents never disputed this breach. Annexure 'C' is a
letter written by applicant's legal practitioners on 7 December, 2009 addressed
to the second respondent. In the letter, both the breach and the amount of the
arrears, inter alia, were brought to
second respondent's attention. In his response dated the same date, the second
respondent in paragraph 2 of his letter clearly admitted being in arrears. He
wrote:-
“2. Payment Plan for Outstanding Rental and
Operating Costs (02/06/2009):
We advise you refer to the payment plan we offered your
client so as to settle outstanding bills accruing to Alec Ryals & Skotril.
As of 15th July, 2009, after making the offer on (02/06/2009), we
have been religiously adhering to our settlement obligations, in respect of the
Agreement of Lease….. However, if the payment plan agreed to, as of then
(02/06/2009) has since lapsed due to some reason, unbeknown to Alec Ryals &
Skotril, we request that we meet and negotiate amicable solutions to settle
these issues without causing unnecessary prejudice to each other”
In
the heads of argument the respondents argued that “….. even assuming that there
are arrear rentals, which is denied, the applicant waived its right to cancel
the lease agreement by accepting subsequent payments”. To buttress this
proposition they relied on Parkview
Properties (Pvt) Ltd v Chimbwanda 1998(1) ZLR 409(H).
The
ratio in the Parkview Properties case supra is premised on
the ratio in Masukusa v Tafa
1978 RLR 167(A). The issue in these authorities was whether a landlord could
successfully invoke a non-waiver and non-variation clause where the landlord
had previously accepted late payments of rental without reservation and had not
made his election to cancel the lease within a reasonable time and at the
latest when the next payment is tendered. The answer was found to be in the
negative. In other words, an attempt by a landlord to go back in time to
previous months' defaults after acceptance of subsequent timeous payments
enables the lessee to resist a claim for ejectment by raising the exceptio doli against the landlord,
notwithstanding the provisions of a non-waiver and non-variation clause in the
lease agreement.
However,
the Parkview case supra is distinguishable from the present case.
What was held therein does not detract
from the operation of the non-waiver and non-variation clauses for where the
lessee again makes late payment the following month and the lessor cancels
within that month or before any remedy of the breach is done, the lessee
cannot, because of these clauses, be heard to argue that previous late payments
have been accepted in circumstances amounting to waiver or estoppel. To hold
other wise would definitely yield iniquitous results.
In
the instant case the first respondent's last late payment of rentals was on 30
September, 2009, having made only three other late payments from March, 2009.
By the time the letter of cancellation was effected on 7 December, 2009 no
rentals had been paid from September, 2009. The facts are therefore not on all
fours with those in the Parkview Properties case supra. In the event the notion of waiver is not applicable in casu. The landlord was accordingly
perfectly entitled to invoke the non-waiver and non-variation clauses in the
lease agreement.
In
the event I have no difficulty in finding that the first respondent breached
the terms of the lease agreement alluded to above, thereby entitling the
applicant to cancel the lease and retake possession of the leased premises
amongst a whole range of other rights it is entitle to. The respondents simply
have no legal defence to the breach.
THAT THE BALANCE OF THE ARREARS BE
SET OFF AGAINST THE AMOUNT SPENT ON RENOVATIONS AND REFURBISHMENT OF THE
PREMISES
In
support of this contention, the second respondent in para 4 of his letter dated
7 December, 2009 alluded to above stated as follows:-
“4. Recoupment of Water and Sewerage
Plumbing costs, Construction and tiling of 29.4 square metres of premises
floors, Re-building of Caretaker's room adjacent to ARS offices, Windows
Replacement, Glazing and Painting of all offices interior walls, fitting three
(3) Doors & Keys to offices.
Having been threatened with closure
of offices by Harare City Council's licensing inspectorate as our offices were
not meeting the basic hygienic standards required for business office
registration, ARS in formed CBRE about the plight but NSSA had no funds to
commit to those improvements
ARS refurbished the premises to
their current status. We requested CBRE to make their independent evaluations,
and deduct incurred costs from ARS account bills.
The evaluation has not been done
until now, but however ARS has continued to service its account with CBRE.
Kindly clarify your client's
position on this issue”.
Respondents
also attached receipts and invoices as annexures 'A1' to 'A10' to their notice
of opposition seeking to prove the cost of the renovations.
Further,
the second respondent in his opposing affidavit averred that in January, 2009
they asked CBRE to effect the renovations in terms of clause 15 of the lease
agreement. The assistant property manager, one Darlington Mujati advised them
verbally to renovate the premises at their own cost and the applicant would
reimburse the costs or set them off against their rentals. Given the verbal undertaking
the renovations commenced towards end of January, 2009 and were completed in
September, 2009. When they signed the lease agreement on 31 August, 2009, it
did not incorporate the issue of set off which had been agreed upon. On taking
up the issue with McDonald Chinyoka, the applicant's property manager he
promised to rectify the anomaly but he never did.
Clause
15 of the lease agreement alluded to above by the second respondent and sought
to be relied upon does not assist the respondents in view of the repairs that
were effected. That clause vests responsibility upon the applicant for
“maintenance, fair wear and tear excepted, of the exterior of the
premises excluding all signs, window panels, doors and plate glass attaching to
the premises which shall be the Tenant's responsibility…” (my emphasis).
Further
to the aforegoing clause, clause 9.3 of the lease agreement is so unambiguously
worded as to brusquely require no splitting of hairs. It provides:
“9.3
The Tenant shall clean, maintain and pay all costs and charges relating
to the maintenance, repair and renovation of the interiors of the leased
premises including doors, windows, plate and other glass…. fittings, equipment
and cables” (my emphasis).
Clause
9.4 is also opposite. It says:-
“9.4 The Tenant shall maintain
and repair the sanitary and plumbing services fixtures and fittings within the
leased premises, keep drains and traps free of blockages and comply with all
rules and regulations concerning the use of water and the disposal of effluent
and other waste materials”.
Clause
9.5 provides that the tenant shall not alter or change any locks etc without
prior written consent of the landlord and where such consent is given, the
alterations or repairs shall be by contractors approved by the landlord at the
tenant's cost.
And
clause 9.7 says that the tenant shall not make nay additions or alterations to
the leased premises without the prior written consent of the landlord and all
such additions or alterations shall be carried out at the tenant's cost and
expense by contractors approved by the landlord.
Clause
16.3 outlaws withholding/deferring payment of rental by the tenant under any
circumstances.
Second
respondent, in his letter of 7 December, 2009, stated the nature of the repairs
effected, water and sewerage plumbing costs construction and tiling of the
office floors, windows and door replacement, glazing and painting offices'
interior walls were, in terms of clauses 9.3 and 9.4 cited above, the first
respondent's responsibility at its cost. In terms of clause 9.5, the alteration
of locks was at tenant's cost. The rebuilding of the caretaker's room was not
the first respondent's obligation but that of the applicant in terms of clause
15.
The
totality of the foregoing means that all the repairs or renovations effected by
first respondent to the premises were its contractual obligations and at its
cost save for rebuilding of the caretaker's room. In the event, the applicant
does not owe the respondents anything that can be said to amount to a
reciprocal debt grounding a set-off. The rebuilding of the caretaker's room was
not the tenant's legal obligation. The tenant embarked on it at its own risk
As
long back as 1926, the doctrine of set-off was defined by INNES CJ in the case
of Schierhout v Union Government 1926
AD 286 at 289-290 in these words:-
The doctrine of set-off with us it
not derived from statute and regulated by rule of court, as in England. It is
a recognised principle of common law. When two parties are mutually indebted to
each other both debts being liquidated and fully due then the doctrine of
compensation comes into operation. The one debt extinguishes the other pro tanto as effectually as if payment
had been made. Should one of the creditors seek thereafter to enforce his
claim, the defendant would have to set up the defence of compensatio by bringing the facts to the notice of the Court - as indeed
the defence of payment would also have to be pleaded and proved. But,
compensation once established, the claim would be regarded as extinguished from
the moment the mutual debts were in existence together”.
In casu the claim of compensation by the
respondents against the applicant has not been established. In fact it does not
exist in view of the exclusionary clauses in the lease agreement cited above.
In the event, it cannot be said that the parties are mutually indebted to each
other.
It
is idle for the respondents to dig in the ashes by claiming that Darlington
Mujati verbally authorised the renovations by the respondents to be reimbursed
later or that McDonald Chinyoka verbally promised to rectify the issue of
set-off that had been omitted to be incorporated in the lease agreement when
the same was signed on 31 August, 2009. The insurmountable difficulty besetting
the respondents' argument is clause 28 the lease agreement. It provides that
the agreement of lease signed constituted the whole agreement between the
parties and no warranties or representations, whether express or implied not
stated herein shall be binding on the parties and that any variations of the
terms and conditions of the lease must be in writing and signed by both. Mere
verbal allegations by the respondents regarding variation of terms of the
written lease agreement are clearly ousted by this clause in tandem with the
parole evidence rule, not to mention the caveat subscriptor rule.
It
is also pertinent to note that para 4 of second respondent's letter of 7
December, 2009 makes no reference to anyone on behalf of the applicant
guaranteeing a set-off, contrary to the second respondent's contention in his
opposing affidavit in which set-off is alleged for the first time in March,
2010. This I find to be a clear afterthought in a vain attempt to escape
responsibility.
THAT THE CANCELLATION OF THE LEASE
AGREEMENT IS INVALID FOR WANT OF COMPLIANCE WITH CLAUSE 20.1.2 OF THE LEASE
AGREEMENT
This
argument should not detain me. The argument thus raised was as a result of a
misreading of clause 20.1 of the lease agreement. The respondents, so it seems
to me, read clause 20.1.2 in isolation. Clause 20 deals with breach of lease.
It is worded in this vein:-
“20.1 In the event of:
20.1.1 non payment of rent or any portion
thereof on due date; or
20.1.2 failure to rectify a breach of any
condition of this lease within
a period of 14 days of written
notice having been given by the landlord to the Tenant requiring such breach to
be remedied; or
20.1.3 the Tenant absconding, deserting
or vacating the leased premises without giving proper notice; the landlord
shall have the right to cancel this lease and obtain possession of the leased
premises and the contents thereof….”
The
wording relating to the landlord's recourse to cancel the lease is so
clear that only its ordinary
grammatical meaning ought to be given. There are spelt out three separate types/modes
of breach entitling the landlord to cancel the lease. Due to the use of the
disjunctive word “or” between the types of breaches, the landlord is entitled
to cancel the lease if any one of those breaches is committed. In casu the breach committed was
non-payment of rent on due date and the landlord properly invoked it as the
sole one exitant. The landlord was not obliged to forego the existing breach
and opt to first give 14 days written notice to have the respondents remedy the
non-payment of the rent. It is only a confused landlord who would opt for that
kind of delay given the clear wording of the clause in question. The applicant,
in the event, was not obliged to give the alleged 14 days notice let alone any
notice at all before cancelling the lease agreement. The argument raised in
this connection does not hold water and does not apply. The cancellation of the
lease for non-payment of rent on due date via annexure 'C' the letter dated 7
December, 2009 was accordingly valid.
ALLEGED MATERIAL DISPUTES OF FACT
NOT MAKING THE MATTER CAPABLE OR RESOLUTION ON THE PAPERS
The
alleged disputes of fact raised in this connection are whether Mujati who
allegedly authorised the repairs had or had not such authority. This dispute of
fact, so the argument went, can only be resolved by hearing evidence in a
trial. The second alleged dispute of fact is that relating to the amount spent
on the renovation of the premises. Given that some of the receipts pertaining
thereto are missing, so it was argued, it is only desirable that a trial be
held and full testimony be heard. In support of this contention, reliance was
placed on the case of Tamarillo (Pty) Ltd
v BN Aitken (Pty) Ltd 1982(1) SA 398 (AD) and Masukusa v National Foods Ltd and Another 1983(1) ZLR 232(HC) at 235.
I
am unable to subscribe to the respondents' contention that there are disputes
of fact not capable of being resolved on the papers to warrant referral of the
matter to trial. The two cases cited in this connection do not assist the
respondents' cause at all. In those cases the Court found that there were
material conflicting disputes of facts which were foreseeable hence proceedings
were brought by way of application at the applicants' peril.
It
is trite that in motion proceedings a court will take a robust and common sense
approach in endeavouring to resolve the matter on the papers. In the instant
case, the alleged disputes of facts are not only not material to warrant the
hearing of evidence on them but also irrelevant. They have already been
implicitly disposed of while dealing with the issue of set-off supra, wherein I found that the written
lease agreement constituted the entire agreement and the renovations that were
effected were, in terms of the quoted clauses, to the first respondent's cost
and in terms of the parole evidence rule, no extrinsic evidence is admissible
outside the four corners of the written lease agreement.
In
the result, judgment is entered for the applicant in terms of the Draft Order.
Gill, Godlonton &
Gerrans, applicant's
legal practitioners
Wintertons, respondents' legal practitioners
