GOWORA J: The applicant seeks an order for the rescission of a default
judgment entered against it on 1 April 2009.
The background to the dispute is as
follows: The respondent is the registered owner of an immovable property,
namely – Shop 1 Murandy Square
West, Newlands, Harare. On 1 February 2001 the parties herein
entered into a written agreement of lease, wherein the respondent leased to the
applicant the premises referred to above for a period of three years commencing
on 1 February 2001 and terminating on 31 January 2004.
On 18 November 2008 the respondent,
through its legal practitioners of record sent a letter to the applicant which
stated that the applicant had not paid rental and operating costs for the month
of November 2008 resulting in it, the applicant incurring arrears for the same
in the sum of $881 566 345 216,25. The applicant was informed in the said
letter that the lease had been cancelled. The letter concludes by demanding the
applicant pay the arrears, vacate the premises and hand the keys over to the
respondent by no later than 20 November 2008. The applicant did not vacate the
premises and as a result the respondent caused summons to be issued out on 17
February 2009 under case number HC 429/09 wherein the respondent claimed
payment of the alleged arrears for rentals and operational costs holding over
damages, interest on the two sums being claimed and costs of suit. It is common
cause that the applicant did not enter appearance to defend resulting in the
default judgment which is the subject matter of this application.
I will deal first with the issue of
wilful default. The applicant states that it was not in wilful default as
regards the failure to enter appearance. This is what the applicant states in
para 10 of the founding affidavit.
On 21 February 2009, the same day
that the applicant was served with the letter dated 18 November 2008, the
applicant was served with summons in case number HC 429/09. A copy of the
summons and declaration is hereto attached as annexure “F”. At that particular
date the applicant's account balance with the respondent clearly indicated that
the applicant did owe the respondent anything. This was self evident from
annexure “E”. The deponent to the founding affidavit states that he had sought clarity
from Mr Chidemo of Richard Ellis who confirmed that nothing was owing to the
respondent and who advised the applicant to ignore the summons as they would be
withdrawn. The applicant contends that as a result of this assurance, it did
not enter an appearance to defend.
The opposing affidavit has been
deposed to by Kumbirai Chidemo, a portfolio manager with CB Richard Ellis who,
in the main, denies that he had spoken to Hassan the applicant's representative
about having the summons withdrawn. He states that the alleged statement by the
applicant is an attempt to found a basis upon which to justify its failure to
take any action when served with summons.
It has not been denied by the
applicant that it received the summons and decided not to enter appearance to
defend the action. The applicant has itself, in its heads of argument,
correctly defined wilful – within the context of default judgment -that wilful default
has been held to connote deliberateness in the sense of knowledge of the action
and of its legal consequences and a conscious and freely taken decision to
refrain from entering notice of intention to defend the claim.
The explanation given by the
applicant for its failure to enter appearance to defend and is not acceptable.
Summons was served upon a manager who would have, or ought to have been alive
to the consequences of not defending the summons. Even if one were to accept
the contention that the summons and the letter cancelling the lease were
received on the same day, it should have leapt to the mind that the respondent
was seeking the eviction of the applicant from the lease of premises and
prudence and good business sense would have required that continued occupation
of the premises had to be ensured and therefore that there was need to respond
to the summons. The letter may have emanated from Chidemo, the summons had not
and therefore any effort to obtain indulgence would have required that the
applicant speak, not just to Chidemo but to the legal practitioners who had
issued summons for eviction. No effort was made to deal with the summons. I
find that there was a wilful default on the part of the applicant in failing to
enter appearance.
I turn next to the issue of whether
or not the applicant has a good and bona
fide defence on the merits. The applicant does not dispute that rentals and
operational costs for November 2008 were not paid in time. It appears that even
the rentals for December 2008 were not paid in time. According to the
applicant, it made a payment of fifty quadrillion Zimbabwe dollars into the account
of C B Richard Ellis on 24 December 2008. The applicant explains its failure to
pay the rent for November 2008 in time on an alleged failure by the respondent
to issue an invoice for rent. Even assuming that this was the respondent's
practice the applicant should just have paid rent according to the previous
month's figure until advised otherwise. It is obvious that the amount paid on
24 December 2008 was not paid following the issuance of an invoice. The
applicant has however not taken the court into its confidence to explain how it
could have paid in December 2008 in the absence of an invoice and yet in
November the lack of an invoice had caused it to default in paying rentals. It
is the obligation of a tenant to pay its rental when due and unless the rental
has been altered the tenant is duty bound to tender such rental as appears
reasonable. To my mind, that would be the last amount agreed upon by the
parties as constituting fair rental. The applicant clearly breached the lease
agreement by failing to pay rental for November 2008.
The applicant has contended that it
was a statutory tenant and that based on the provisions of the Commercial
Premises (Rent) Regulations, 1983 the respondent did not have good cause to
eject the applicant from the premises. The protection afforded to a tenant by
the rent regulations protect a tenant from eviction of amongst other things,
the tenant continues to pay the rent due within seven days of due date.
From the applicant's own papers, the
rent for November 2008 was not paid within seven days of due date nor was the
rent for December 2008. The rent for November was paid a month and three weeks
later and that for December 2008 after three weeks.
In my view however the applicant
never became a statutory tenant. Clause 2 of the lease agreement provides:
“2.1 The
lessor lets to the lessee who hires the premises for the lease period.
2.2. at least three calendar months prior to
last day of the lease period the lessee shall advise the lessor in writing
whether –
2.2.1 the lessee intends to vacate on the termination
date, in which event the leassee undertakes to vacate on such date or
2.2.2
the
lessee wishes to renew the lease in which event a written agreement of renewal
shall be entered by the lessor and leassee on such terms as may be agreed
.2.3 If the lessee fails to give notice as
provided in clause 2.2 hereof, the lease will continue from the termination
date of the lease or option period on the same terms and conditions, other than
the rent payable, but subject to two months written notice of termination on
either side being given”.
The lease did not terminate by the effluxion
of time but was extended in terms of clause 2.3 on the same terms and
conditions except for the amount of rent to be paid and secondly that either party
could terminate the lease at any time or two months written notice. This is
what is referred to as a tacit relocation of the premises. Thus a periodic
lease came into being after the initial date of termination and the applicant
never became a statutory tenant. I am fortified in this view of the matter by
the description given to a tacit relocation by GREENLAND J in H & J
Investments (Pvt) Ltd v Space Age Products (Pvt) Ltd 1987 (1) ZLR (H) 242 at
252 A-B in the following terms:
“Cooper op cit at p 319 defines
tacit relocation as an implied agreement to relet and is concluded by the
lessor permitting the lessee to remain in occupation after the termination of
the lease and accepting rent from the lessee for the use and enjoyment of the
property.”
In casu, it was not just the landlord allowing the lessee to remain in
occupation, the written lease specifically provided for the continuation of the
lease after its date of termination. The landlord continued negotiating rentals
with the tenant but the other terms and conditions of the lease remained valid
and of force and effect between the parties. The lessee however did not abide
by the terms and conditions of the lease in that it failed to abide by its
obligations in terms of the same.
I am unable to find that the
applicant has established good and sufficient cause for the setting aside of
the default judgment granted against it on 1 April 2009 and in the premises the
application is dismissed with costs.
Mutamangira &
Associates,
applicant's legal practitioners
Gill, Godlonton Gerrans, respondent's legal practitioners
