CHATUKUTA J: On 6 May 2014, this court granted a default
judgment against the applicant in case No. HC 1747/14 for its ejectment from
Lot 3 of Lot 22 of Lot 1 Block C of Avondale (the premises). This is an
application for stay of execution of the judgment pending the determination of
an application for rescission yet to be filed by the applicant.
The background to the application is that the applicant and
the respondent entered into a lease agreement in 1968 whereby the applicant
leased the premises from the first respondent. The applicant was
operating a supermarket from the premises. The lease agreement was
renewed from time to time. According to an arbitral award dated 18 June
2009, the lease agreement expired in 2003 whereupon the parties entered into a
new agreement which was due to expire by effluxion of time on 28 February
2014.
The applicant did not vacate the premises at the expiration
of the lease. The first respondent issued summons on 3 March 2014 in case
No. HC 1747/14, for the ejectment of the applicant from the
premises. The first respondent allegedly served the summons on the
respondent on 6 March 2014. The applicant did not enter an appearance to
defend. On 21 March 2014, the first respondent applied for default
judgment. The application was granted on 6 May 2014 by this court.
The second respondent commenced evicting the applicant on 16 May 2014 without
notice to the applicant. Certain items belonging to the applicant were
removed from the premises. The applicant instituted the current
proceedings. The second respondent ceased the ejectment upon being served
with this application.
It is trite that the main guiding principle for the court
in determining such applications is to grant stay of execution of a judgment
where real and substantial justice requires such a stay or conversely, where
injustice would otherwise be done. (See Chioza vIndependent
Property Development (Pvt) Limited and Another HH 76-94 at p3; Murumbechi
vTownsend HH 185-90; Cohen v Cohen 1979 (3) SA
420 (R) at 423B-C; Chibanda v King 1983(1) ZLR 116 (H); Santam
Insurance Co Ltd v Paget 1981 ZLR 132 (H) and Strime v Strime
1983 (4) SA 850 (C).)
The applicant contended that it has prospects of success on the application for
rescission and that if the application to stay execution is not granted it
stands to suffer irreparable harm. It claims that it was never served with the
summons commencing action and was surprised when the second respondent
commenced ejecting it from the premises. It was therefore not in wilful
default.
In support of this contention, the applicant filed an
affidavit by one Sarudzai Muzodza. The same Sarudzai appears on the
return of service as Nancy Muzodza. Ms Muzodza deposed that she is a
receptionist at the applicants head office. She has been in the
applicant's employment for the past 27 years.
She stated in the affidavit that the applicant established
a system where legal process would be received by a duly authorized person on
the first floor of the applicant's head offices at Jaggers, 194 Mutare Road
Msasa. She is stationed on the ground floor and is therefore not
authorised to receive legal process. She averred that the second
respondent did not attend to the applicant's head office to serve the summons
and declaration. Had he done so, she would have referred him to one Jane
Mukwewa on the first floor who is authorized to receive the process. She
further explained that the second respondent might have known her name from his
previous interactions with the applicant at the head office for a period of six
months before the service of the summons in issue.
Jane Mukwewa, another receptionist, deposed to an affidavit
supporting Ms Muzodza's claims on the procedure regarding service of legal process.
The application was vigorously opposed by the first
respondent. The first respondent contends that the applicant was in
willful default and does not have prospects of success on appeal.
It was submitted for the first respondent that on 4 March
2014 the second respondent attempted to serve the applicant with the summons
and the declaration at 90 Speke Avenue, Harare. He reported back to the
first respondent that the applicant had moved offices. The second
respondent was thereafter instructed to proceed to serve the applicant at its
new head offices in Msasa.
The return of service identified the person who received
the service as Nancy Muzodza. Nancy Muzodza is the same person as Nancy
Muzodza. The second respondent would not have identified her by name if he did
not attend at the applicant's head office.
The return of service of the sheriff or his deputy is indeed prima facie
evidence of the matters contained therein. (See S 20 (3) of the
High Court Act [Cap 7:06], Gundani vKanyemba 1988
(1) ZLR 226 (S) and Wattle Company (Pvt) Ltd v Inducom
(Pvt) Ltd 1993 (2) ZLR 108 (HC)). However, the presumption is
capable of being rebutted by clear and satisfactory evidence. (See Gundani,(
supra) at p 229 E-F).
The applicant did not dispute the first respondent's
submission that the second respondent did attempt to serve summons at the
applicant's old offices and was redirected to the new offices in Msasa. Ms
Muzodza's explanation that the second respondent had been interacting with the
applicant over the past 6 months and hence might have known her name does not
hold water. Firstly, there is no explanation as to the context of that
interaction. Secondly, it was conceded by MrMatinenga that
whilst Ms Muzodza's first name is stated in her affidavit as “Sarudzai” she is
also known as “Nancy”. The second respondent would not have known this
other name unless he served the summons and declaration on Muzodza.
Thirdly, if the second respondent had been interacting with the applicant “in the
past 6 months” in whatever context and would meet Ms Muzodza, he surely knew
that the applicant was no longer at 90 Speke Avenue, Harare. There would
therefore have been no need for him to attempt to serve process on 4 March 2014
at an address he knew the applicant no longer occupied.
Ms Muzodza's averments as to the procedure to receive legal
process were not supported by an affidavit from the powers that be within the
applicant company given that Ms Muzodza and Ms Mukwewa are both receptionists.
One would have expected the procedures to have been documented somehow in a
company as big as the applicant. If they were verbal, one would have
expected support from the relevant senior persons within the applicant company
that a receptionist on the ground floor is not authorized to receive legal
process whilst the one on the first floor is duly authorised. This would no
doubt have bolstered the applicant's case.
In the absence of such support, I find that the applicant has failed to present
a reasonable and acceptable explanation for its default.
Of concern to the court is that it appears that the
applicant cast unsubstantiated aspersions of fraud at the second respondent by
referring to the case of Mutebwa vMutebwa and Anor
2001 (2) SA 193. In Mutebwa's case, the situation was different.
The Deputy Sheriff in that case had filed a patently false return with the
court upon which divorce was granted. It was proved in that case that the
applicant had been out of the country when legal process was alleged to have
been personally served on him. There was therefore positive evidence
challenging the service. Mutebwa case is an apt example of what the
applicant should have proved.
There was no such evidence adduced in the present
case. The mere fact that Ms Muzodza had been in the applicant's
employment for 27 years did not form a basis for believing her. The
applicant could not explain what the second respondent would benefit by lying
that the legal process was served on the applicant.
Ms Muzodza did not state that she was not at work on the
date the summons were served and therefore would not have received service. Mr
Matinenga submitted that he could not say who between the second
respondent and Ms Muzodza was saying the truth. The court would have to
consider the probabilities of who was not telling the truth between an officer
of the court and applicant's employee. If the applicant is having
difficulties at this stage, one wonders how it would surmount the difficulties
in the application for rescission.
The second respondent is a public officer who is not
interested in the outcome of the case. Ms Muzodza is an employee of the
applicant of 27 years who is likely to face censure for not bringing legal
process to the attention of the relevant authorities. Jane is another employee
like Ms Muzodza. The applicant cannot expect the court to believe that
there would not be someone of higher authority in the applicant company to
explain the procedure or produce documentation regarding service of
process.
As submitted by Mr Magwaliba, the probabilities
favour an officer of the court in the absence of any allegations of impropriety
against the officer. The alleged recipient of the service normally has a strong
motive to claim that proper service did not take place. (See Fox and Carney
(Pvt) Ltd vSibindi 1989 (2) ZLR 173 (SC)).
The appellant in Gundani's case, was also not able
to satisfy the court that he had not been available to receive process.
The court found that the appellant's denial was insufficient to rebut the
presumption that the summons had been served upon him. It was further found
that his failure to react to it could only be taken as a deliberate intention
not to defend the action. The same fate falls on the applicant in this
matter.
It is my view that the applicant will not be able to rebut
the presumption that the Sheriff did indeed serve the summons and declaration
on the applicant and cannot avoid the conclusion that it was in wilful default.
Turning to the merits of the claim, the applicant conceded that the lease
agreement expired on 28 February 2014. It however submitted that it
thereafter became a statutory tenant. The provisions of the expired lease
agreement, and in particular on dispute resolution, would continue to apply.
The lease provided for resolution of disputes by arbitration. This court
would not have jurisdiction to determine the main claim. The default judgment
was therefore improperly obtained.
It was further contended that the termination of the lease agreement was in any
event unlawful as applicant, being a statutory tenant was entitled to notice in
terms of s 23 of the Commercial Premises (Rent) Regulations, 1983 (SI 676 of
1983), be it in terms of the expired lease or reasonable notice as provided for
in the Regulations. Such notice was not given.
The respondent disputed that the applicant was a statutory tenant. It was
contended that it consented, in a letter dated 1 October 2010 written by a Mr.
Beaumont, to vacate the premises at the expiration of the lease
agreement. Mr. Beaumont was applicant's director then.
It was further submitted that the first respondent
requested from the applicant access to the premise for its engineers and
architects to commence planning the rehabilitation of the premises in
anticipation of the termination of the lease agreement. The applicant
allowed the first respondent access. The applicant's conduct therefore
amounted to a waiver of its rights under the lease and the provisions of the
lease would therefore not survive the expiration of the lease.
It was also submitted that the applicant had been given
adequate notice over the years to vacate the premises upon the expiration of
the lease.
It is common cause that the applicant was supposed to have
vacated the premises by 28 February 2014. It is also not in issue that
there was communication between the applicant and the first respondent
regarding the respondent's intention to repossess the premises. As far
back as 1 October, 2010, the applicant was aware that the first respondent
intended to repossess its premises. In fact such intention appears to
have been the subject matter of the arbitration resulting in the 2009 Arbitral
Award.
On 1 October 2010, Mr B. J. Beaumont wrote to the first respondent expressing
the applicant's intention to hand back the premises at the expiration of the
lease. The letter reads:
“We refer to our discussion this morning and we acknowledge that we fully
understand that you will not entertain any negotiations with us regarding
either an extension of existing (sic) lease or a new lease. We would
however, like to have discussions with you to share some ideas which we have
regarding the property and reiterate that we have no intention of
contesting your right to take back the premises at the expiration of the
present lease. (Own emphasis)
The applicant, during oral
submissions, attempted to disown Mr Beaumont as having had authority to
represent the applicant. He was referred to as having been the chief
executive of Meikles and then a board member for the Meikles Group of Companies
which is the holding company of the applicant. However, it is clear that
as at 1 October 2010, he was a director of the applicant and wrote a letter in
relation to applicant's business and on applicant's letter head. His
capacity to represent applicant, is in my view, not in issue.
The applicant further attempted
to explain that the letter, despite the highlighted portions, was not a
reflection of the applicant's intention to vacate the premises. Mr
Beaumont was said to have expressed intentions “to share ideas” regarding the
property and according to the applicant this meant that the applicant had not
consented to vacate the premises.
It was not clear whether there
was any “sharing of the ideas” intimated between 2010 and 2013. The
applicant did not allude to any “sharing of ideas” about the property.
All that was placed before me relating to that period are letters from the
applicant dated 19 March 2013 and from its legal practitioners dated 27
November 2013 to the applicant restating the notice being given to the
applicant to vacate the premises at the expiration of the lease
agreement.
In both letters, the first
respondent expresses its intention to repossess the premises. It is
further clear in the letter dated 25 February 2014 from the first respondent's
legal practitioners to the applicant's legal practitioners that the applicant
had in fact consented to the first respondent accessing the premises with its
engineers and architects to prepare for the rehabilitation of the premises in
anticipation of the applicant vacating the premises on 28 February 2014.
It is my view, as submitted by MrMagwaliba, that
the applicant waived its rights to have the dispute resolved by arbitration by
consenting to vacate the premises at the expiration of the lease on 28 February
2014. The arbitration clause cannot survive the lease. The
applicant cannot now seek to rely on the provisions of the lease to oust this
court's jurisdiction to determine the matter. The judgment in case no HC
1747/14 was in my view properly obtained.
The applicant did not dispute the first respondent's claims
that it has already engaged engineers and architects who have commenced working
on the redevelopment and rehabilitation of the premises. This work has
been commenced under the watch of the applicant and with its consent and in
anticipation of the applicant vacating the premises on 28 February 2014.
The first respondent obtained an order of this court on the strength of these
facts and it would be unjust to prevent the applicant from enjoying the
benefits of that order.
The application is accordingly dismissed with costs.
Honey & Blanckenberg,
applicants' legal practitioners.
Magwaliba
& Kwirira Legal Practitioners, first respondent's legal
practitioners.
