CHEDA J: This is an
application for a special plea and exception by the defendant.
Plaintiff is the landlord and owns shops 3, 5 and 6 Norvaal House, at
corner Fife Street and 6th Avenue.
First defendant is a business concern which leased the above property
from plaintiff while second defendant bound himself as surety and co-principal
debtor in the lease agreement entered into by the parties on the 11 May 2005. Despite the day of signing, the lease was to
run from 01 March 2005 to 28 February 2006.
One of the terms of the agreement was that the rentals were to be $5400 per
month, with an understanding that they would be increased from time to time by
agreement.
It is plaintiff's assertion that first defendant has failed to honour
the rental payments and as of the date the summons were issued, was in arrears
in the sum of $7938.76 and holding over charges in the sum of $600-00 per month
and $22.56 of the total expenses per month from 23 September 2010 to date of
full payment. Plaintiff also sought
eviction of first defendant. Defendant entered an appearance to defend, asked
for further particulars and they were duly furnished by plaintiff.
Defendants have filed a special plea and notice of exception. The ground for its exception is that
plaintiff has instituted proceedings before a wrong forum because, clause 35:1of
the lease agreement precludes them from doing so. Clause 35:1 of the said lease agreement
reads:-
“Where a dispute
arises between the parties hereto in regard to the interpretation or
application of this Agreement or any matter relating to or arising from this
Agreement, the Landlord shall be entitled (if the dispute has not been resolved
within seven days of it having arisen) to refer the dispute for arbitration by
a single independent arbitrator
(hereinafter referred to as “the Arbitrator”) appointed by The Commercial
Arbitration Centre in Harare (hereinafter referred to as “the appointing
authority”) and/or to institute legal proceedings against the Tenant for
such relief as the Court might grant, including interim relief pending the
decision of the Arbitrator.” (my emphasis)
It is their further argument that proceedings against them in the courts
must only relate to interim relief pending a decision of the Arbitrator. They argued that this was not the position
here, and that plaintiff never cancelled the lease agreement.
Plaintiff's contention on the other hand is that the clause referred to supra refers to a dispute which involves
legal issues and not a failure to pay rentals which is a clear breach,
therefore, factual. With regards to the
cancellation it is its argument that its claim is for the cancellation of the
lease agreement based on the non-payment of rentals. Such non-payment is, to it, a breach which
entitles it to cancel that lease agreement.
The question that falls determination in my view, is the interpretation
of clause 35:1. It is defendants'
argument that the correct interpretation of the said clause is that any dispute
arising out of this agreement should be referred for arbitration. However, on the other hand plaintiff is of
the view that such referral should be of a dispute relating to the quantum of
rentals and not the failure to pay rent.
Firstly, it is not in dispute that defendants are in rent arrears. It stands to reason, therefore, that, plaintiff
is entitled to seek relief in order to enforce its right. The question then is, should they approach
the courts or an Arbitrator? To me the
use of the words “---and/or to institute
legal proceedings against Tenant for such relief as the court might grant,
including interim relief pending decision of the Arbitrator”, gives
plaintiff an option to either refer the matter for arbitration or institute
legal proceedings or both.
In light of this, plaintiff is at liberty to resort to whatever legal
route it deems fit in order to obtain expedient relief.
Defendants have also argued that plaintiff has used the wrong procedure
by seeking an order for eviction before the agreement is cancelled. They further argued that plaintiff should sue
for damages and arrear rentals only.
Defendants, not in so many words 'admit that they are in rent arrears',
which in itself is a breach of the agreement.
Defendants' failure to pay rent, in those circumstances entitle
plaintiff to cancel the agreement. This
is one of the relief it is seeking.
Failure to pay rent entitles the landlord to cancel the agreement, see Venter v Venter 1949 (1) SA768
(A-D).
In my view, there is no legal basis for challenging the procedure
adopted by plaintiff.
Accordingly first and second defendants' special plea and exception be
and are hereby dismissed with costs.
Danziger
and partners' plaintiff's legal practitioners
Calderwood,
Bryce Hendrie and partners, defendants's legal practitioners
