KUDYA
J: On 20 October 2010, the plaintiff
issued summons out of this court against the two defendants. The plaintiff and the first defendant
concluded a lease agreement on 23 March 2009. The second defendant stood as
surety and co-principal debtor to plaintiff for the due performance by first
defendant of all its obligations arising from the lease agreement.
The
first claim was against the first defendant for an order confirming the
cancellation of the lease agreement between the plaintiff and the first
defendant and its ejectment from the ground and Mezzanine floors of MIPF House,
5 Central Avenue Harare. The second claim was against both defendants jointly and
severally the one paying the other to be absolved for the payment of arrear
rentals and arrear operating costs together with interest thereon at the rate
of 5% per annum from 2 October 2010 to the date of payment in full. In addition
it claimed for the payment of holding over damages in lieu of rent and
operating costs, and interest at the prescribed rate from 2 November 2010 to
the date of ejectment and costs on the scale of legal practitioner and client.
The defendants contested the claims.
At
the commencement of trial, the amendment to the plaintiff's claim to the
figures sought as arrear rentals and arrear operating costs was granted. The
amounts were reduced from US$ 31 317.19 and US$ 9 102.24 to US$28 489.00 and
US$7 417.07 respectively.
The
plaintiff called the evidence of a single witness Shepherd Razunguzwa, the
credit controller of its managing agent Southgate and Bancroft, and produced
three documentary exhibits. These were the four page detailed transaction
schedule exhibit 1, the 228 page bundle of documents exhibit 2 and the one
paged Fartingale transaction reconciliation account, exhibit 3. The defendant
called the evidence of two witnesses, its managing director the second
defendant and its former administration manager Simbarashe Munetsi and produced
exhibit 4, the lease agreement and exhibit 5, the 17 page bundle of documents.
The defendants' witnesses dealt with Mr Gomba thegeneral manager ofSouthgate
and Bancroft. Mr Gomba did not testify. The allegations made against him stood
unchallenged. I considered this unchallenged evidence given for the defendants
as common cause.
It
was common cause that the lease was for three years commencing on 1 April 2009
and terminating on 31 March 2012. In terms of clause 28 the agreement
constituted the whole agreement between the landlord and tenant and no
warranties or representations whether express or implied not stated therein
were binding on the parties unless such variations and conditions were in
writing and signed by the landlord and tenant. Again, in terms of clause 24
acceptance by the landlord or its agents of any rent or other payment, unless
stated otherwise in writing by the landlord would not prejudice or waive,
rescind or operate as an abandonment of any right of cancellation acquired before
such acceptance.
The
agreed rental was US$3 200.00 per month. The operating costs were agreed at an
estimate of US$990.00 per month.Rent was due in advance on the first of each
month. It was common cause that the defendant made actual payments for rentals
on the dates that are indicated in exhibit 1.
The amount due for rental from 1 April 2009 to 31 March 2010 was US$ 38
400.00. During that period the first defended paid a total amount of US$29
700.00. The following table, an extract from exhibit 1, indicates the datesand
amounts of rent due and the dates and rental amounts paid.
Date
and amount of rent due amount
paid and date of payment
01-04-09 3
200
3 200 20-03-09
01-05-09 3 200
1 000 07-05-09
2 500 14-05-09
01-06-09
3 200 2
000 08-06-09
01-07-09 3 200 4 100 07-07-09
01-08-09 3 200 3 200 13-08-09
01-09-09 3 200
1 600 28-09-09
01-10-09 3 200 2
000 09-10-09
01-11-09 3 200 3
200 11-11-09
01-12-09 3 200 1 200 15-12-09
01-01-10 3 200
01-02-09 3 200 1 200 15-02-10
2 000 16-02-10
01-03-10 3 200 3 400 17 -03-10
Total 38 400 30 600
The
table shows that the first defendant did not make timeous payment of rent in
May, June, July, September, October and December 2009 and that it did not make
any payment in January 2010 and all the subsequent months from April 2010. It
was common cause that the first defendant last paid rent on 17 March 2010. Even
though it remains in occupation on the date of this judgment, it has not paid
any other amount as rent for the last 25 months that it has been in
occupation.
It
was common cause that the plaintiff did not render an account for operating
costs to the first defendant from April 2009 to September 2009. When it
eventually did so the first defendant disputed the amounts levied and of its
own accord paid US$300.00 on 9 October and US$ 1 275.00 on 19 October 2009 and
a further US$ 300.00 on 4 May 2010, thus making a total of US$ 1 575.00
directly to the landlord. Exhibit 2especially the reconciliation at page 218
shows the total operating costs for the whole building during the period in
issue from which the share due to the first defendant was calculated. The bulk
of the documents in exhibit 2 consist of actual invoices issued for various
sub-heads by service and utility providers. These are indexed on pages 226 to
228 for the period April 2009 to July 2010. These were conveniently reduced in
exhibit 3 to show the share of the first defendant undereight sub-heads of
staff costs, repair and maintenance, cleaning, rates, water, electricity,
security and repair and maintenance of lifts. Razunguzwa used this information
to calculate the first defendant's share of operating costs. He used the wrong
percentage of 8 % for the lettable area to arrive at US$8 992.07 and deducted US$1
575.00 to arrive at the amount claimed of US$ 7 417.07.When he used the correct
percentage of 7, 59% he calculated the first defendant's share at US$6 956.23
after deducting the payment of US$1 575.00.
It
was common cause that the first defendant expended US$23 200.00 from April to
September 2009 putting the leased property in good order on behalf of the
plaintiff who through the general manager of the landlord's managing agent
pleaded lack of funds for the job. I was satisfied from the letters written by
the second defendant on behalf of the first defendant as early as 25 March
2009, that it renovated and made the repairs it did at the cost it incurred for
and on behalf of the plaintiff who did not have the funds to put the rented
property in good order. I was satisfied from the second defendant's testimony, which
was confirmed by Munetsi and accepted by Razunguzwa, that the plaintiff did not
give the leased premises to the first defendant in good order and repair at the
commencement of the lease as required by clause 9.1 of the lease agreement.
That the leased premises were not in good order and repair is clear from the
extensive repairs done by the first defendant over the first six months of the
lease agreement. I, however, find that the cost was US$23 200.00 recorded in
the cash amounts paid to Weavendale Construction on 14 June and 18 August 2009
for the extensive work noted on pages 2 to 5 of exhibit 5. The repairs were to the floors, walls and
carpets including replacement of damaged wall plugs, switches and lighting in
both the storeroom in the Mezzanine floor and the ground floor. The first
defendant failed to lay the basis for seeking the administration manager's
salary for those six months as part of the costs of placing the leased property
in good order.
It
was common cause that on 27 January 2010 the second defendant wrote to Mr
Gomba. She made five proposals. These were that interest charged on the first
defendant's rental account be reversed, operating costs charged up to September
2009 be reversed as the first defendant was not yet using the building and that
the payment of US$1 575.00 be allocated to operating costs for September,
October and December 2009, the security costs be scrapped from operating costs
as the first defendant had engaged its own security guard and that rental increases
be frozen to give it time to clear outstanding arrears caused by the
plaintiff's maladministration. Gomba did not respond to the suggestions and
appears to have demanded payment of all outstanding amounts.
It
was common cause that the plaintiff cancelled the lease on 13 July 2010 and
demanded payment of arrear rentals calculated at US$21 693.62 and operating
costs of US$5 917.36 for the period from June 2009 to July 2010 and vacant
possession within 48 hours of receipt of the letter. The second defendant
responded to the letter on 14 and 16 July 2010. In the letter of 14 July she
indicated that there had been a serious dispute on the figures for arrear
rentals and in the other letter she indicated paying US$30 000.00 in rentals
directly to the plaintiff.
The
evidence of the sole witness for the plaintiff was attacked on two grounds. The
first was the use of the wrong lettable area percentage and the second was for
claims on areas that the defendants alleged were not common to the first
defendant and other tenants.He maintained that repairs to the fourth floor
toilets of US$220.00 of 21 May 2009 and purchase of in door flowers of
US$108.00 on 13 July 2009 was properly apportioned to the first defendant under
clause 4.3.8 that defined common areas. There were obvious errors in exhibit 1
that were corrected by the plaintiff such as interest payments of US$480.00 and
US$15 975.00. While he failed to explain the total water bill for May 2009 of
US$1 210.37 under cross examination, he was able to do so in re-examination.He
conceded that the July 2009 bill of US$701.50 was an error. He was not aware
that the first defendant was exempted by the plaintiff from paying operating
costs for 12 months in lieu of the renovations.While the rationale for paying
security and staff costs by the tenant was questioned he maintained that the
basis was found in the terms of the written lease.He was not privy to
discussions between the second defendant and Gomba. He was simply called to
establish the alleged arrear rentals and operating costs and holding over damages
after the lease was cancelled.
The
defendants raised two defences to the claim. The first was based on illegality.
On rentals they averred that the lease agreement was concluded in fraud of
legislation. They stated that the leasing of the building for clothes and
electricalgoods was in violation of council by-laws. They produced an
application dated 17 January 2011 for sale of clothing and accessories and
electrical goods that was declined on the basis that the stand in question fell
within special zone 164 of the City of Harare City Centre Development Plan
which prohibited the operations of the proposed shop. The building was a
special offices' zone and not a commercial zone. The other defence was one of
set off against the plaintiff's claims of the sum expended on renovations and
amounts arising from loss of business. These amounts are set out on page 8 of
exhibit 5. These consisted of US$ 31 000.00 for the renovations, US$80 000.00
for interferences and harassment by council officials claiming licences,
meetings with the managing agent, failure to sell electrical goods due
non-disclosure by the landlord and the 24 hour eviction notice and US$6 000.00
for electricity cuts in February 2012. The second defendant and Munetsi averred
that the first defendant sustained losses by failing to trade in its main and
profitable line of electrical appliances but realised between US$60.00 to
US$100.00 a day from the sale of clothes. The defendants did not make a
counterclaim for loss of business and harassment. The witnesses for the defendants failed to
proof the loss of business sufferred by the first defendant, with which they sought
to counteract and reduce the plaintiff's claims. The second defendant also
averred that the figures in exhibits 1, 2 and 3 were exaggerated and that the
court action was premature.
The following issues were referred to trial at the
pre-trial conference held on 21 March 2011:
1. Whether
or not the first defendant breached the terms and conditions of the lease
agreement between the parties
2. If
it did, what is the quantum of arrear rentals and operating costs and holding
over damages that plaintiff is entitled to recover
3. Whether
or not the breach of the lease agreement is attributable to the plaintiff's
conduct, discretion or consent
4. Whether
or not the premises had been condemned by the City Council
5. If
so, whether or not the first defendant is excused from paying rent and
operating costs for the period when the building was condemned.
I have grappled with the issue of whether I should
determine the case on the basis of defences raised in evidence but which were
not pleaded. Mr Kadzere for the
plaintiff submitted that I could not do so without prejudicing the plaintiff.
Mr Mudambanuki, for the defendants
submitted that I could do so in order to achieve justice between the parties.
The parties are bound by their pleadings. In Robinson v Randfontein Estates G.M. Co. Ltd 1925
AD at 198 it was stated:
"The
object of pleadings is to define the issues; and parties will be kept strictly
to their pleas where any departure would cause prejudice or would prevent full
enquiry. But within these limits the Court has wide discretion."
In
Vos v Cronje and Duminy 1947 (4) SA
873 (C) at 879 NEWTON-THOMPSON J stated that:
"That
the court is not bound by the strict pleadings when the parties themselves have
enlarged the issues is beyond argument."
Further
in Middleton v Carr 1949 (2) SA 374
(A) SCHREINER JA at 385-6 stated:
"Where
there has been full investigation of a matter, that is, where there is no
reasonable ground for thinking that further examination of the facts might lead
to a different conclusion, the Court is entitled to, and generally should,
treat the issue as if it had been expressly and timeously raised. But unless
the court is satisfied that the investigation has been full, in the above
sense, injustice may easily be done if the issue is treated as being before the
court. Generally speaking, the issues in civil cases should be raised on the
pleadings and if an issue arises which does not appear from the pleadings in
their original form an appropriate amendment should be sought."
Lastly,
in Mtuda v Ndudzo 2000 (1) ZLR 710
(H), where all the above cases are cited, GARWE J, as he then was, at 719A-B
stated:
"Although
there is no specific claim in the plaintiff's declaration for payment of the
sum representing her contribution during the subsistence of the union, this was
identified during the pre-trial conference as one of the issues for
determination at the trial. The extent to which the plaintiff, and the
defendant for that matter, contributed was fully canvassed during the trial. In
these circumstances, it is permissible for a court to determine such an issue."
In
the present matter the defendants did not specifically plead set off of the
debt as at the date of cancellation. In paragraph 9 of the declaration the
plaintiff averred that:
"In
breach of its obligation referred to in paragraph six (6) above[to pay rentals
of US$3 230.00 per month the first defendant has failed and /or neglected to
pay rent in full for the period between April 2009 and September 2010 thereby
incurring arrears amounting to US$ 28 489.00."
The
defendants pleaded in paragraph 5 that:
"Ad para 9
This
is denied. It is clear that as at December 2009, the alleged amount owing was
$2 000.00, which was attributed to operating costs which plaintiff had not
rendered an account to the first defendant. The defendants deny being indebted
to the plaintiff in the sum of US$ 28 489.00 since first defendant made payments
for the rent account.
Alternatively,
the plaintiff did not disclose to defendants at the time the agreement was
entered into that the building had been condemned by the city council, a fact
which the defendants only discovered several months later after the
commencement of the lease. As such the building was prohibited from occupation
and in the premise; the alleged lease agreement was void for illegality.
Plaintiff is estopped from making the claim more so when it misled the
defendants into entering the agreement of lease without disclosing the material
information."
Mr
Mudambanuki argued that the set off
was implied by the response. I disagree.
The response was a bare denial of indebtedness on the rent account. The
only time the amount defrayed in renovations is pleaded is in paragraph 10 of
the plea in answer to paragraph 14 (a) of the declaration, where the plaintiff
claimed holding over damages for rent in the sum of US$3 230.00 per month. The
defendants pleaded:
"Ad paragraph 14 (a)
This
is denied as plaintiff is being presumptuous. First defendant is willing to
continue paying rentals as agreed as it solely forked out money to have the
premises back in habitable order."
The
defendants did not impliedly plead set off of the money paid out in renovations.
They were willing to pay rentals as agreed to derive mileage from the amount
expended in renovations. The only document in which set off was implied was in
the letter of 16 October 2010 written to Gomba by the second defendant in
response to the letter of 13 July 2010 that cancelled the lease. She wrote:
"I am
a woman who has been paying rentals after sweating hard in these harsh economic
conditions. I have already sufferred about $30 000.00 in rental payments to
MIPF before operating. After putting the premises in good order to conduct
business, I am facing threats of eviction."
In
their respective testimonies, both the second defendant and Munetsi stated that
Gomba agreed on behalf of the plaintiff to either reimburse the first defendant
for the renovations or credit the cost to the rent account. It was there uncontroverted evidence that
they held discussions with both Gomba and Chief Executive Officer of the
plaintiff Kanjanda on the reimbursement. Kanjandasimply referred them to Gomba,
while Gomba was receptive to the idea until July 2010 when he attempted to
persuade them to relinquish the lease to Royal Bank at which time he became
hostile. The issue was fully ventilated in evidence by the defendants. The
attitude of the plaintiff portrayed by Mr Kadzere
was that the renovations were catered for by clause 9.3 of the lease agreement.
Clause
9.3 is better understood in the context of the preceding clauses that deal with
repairs and maintenance. Clause 9.1, 9.2
and 9.3 read:
9.1 The
leased premises shall be deemed to be in good order and repair at the
commencement of the lease, unless the tenant has given written notification of
any defects to the landlord within 14 (fourteen) days of the commencement of
this lease.
9.2 The
tenant shall keep the leased premises, entrance, fascias and signs in the same
good order and repair as they are at the commencement of the lease period and
shall redecorate all previously painted internal surfaces at intervals of not
more than (5) five years and on termination of this lease or any renewal,
extension or assignation thereof.
9.3 The tenant shall clean, maintain and pay
all costs and charges relating to the maintenance, repair and renovation of the
interior of the leased premises including doors, windows, plate and other
glass, lights, including fluorescent tubes, starters, ballast and incandescent
bulbs and electrical fittings, equipment and cables.
The
plaintiff's attitude during trial was that the renovations were at the cost of
the first defendant.
It
seems to me that clause 9.3 flows from clause 9.1. Clause 9.1 restates the
common law duty of a landlord to handover leased property in good order and
repair. It is only after the landlord has discharged this duty that clause 9.3
takes root. Mr Kadzere conceded that
the plaintiff did not handover the leased property in good order. He further
conceded that it was the duty of the landlord to place the property in good
order and repair at its cost before handing it over to the first defendant. The
concession confirmed the truthfulness of the evidence of the second defendant
that Gomba authorised the first defendant to renovate the property in lieuof
either reimbursement or set off with future rent obligations.The proximity of
the letter of 25 March 2009 to the date on which the lease agreement was
concluded satisfied me that the plaintiff consented to the arrangement.
I
am satisfied that even though the issue of set off was not specifically
pleaded, it was fully ventilated at the trial. I am at liberty to employ it in
the resolution of the issues referred to trial.
Mr
Mudambanuki submitted in the main
that the plaintiff was estopped from obtaining the relief it sought by the
illegality of the lease agreement. He contended that the lease agreement was in
fraud of legislation. He relied on the admission by Razunguzwa that at the time
the contract was executed the plaintiff did not have a certificate of fitness
for the whole building that housed the leased premises. He also relied on the
application dated 17 January 2011 on which the Director of Urban Planning
Services wrote on 21 January 2011 that:
"Stand
1031 STL falls within special offices zone 164 of the operative City of Harare
City Centre Land Development Plan No 22 wherein the proposed shop (for sale of
clothing and accessories and electrical appliances) is prohibited."
Mr
Kadzere contended that the defendants
failed to prove that when the lease was concluded the plaintiff knew that the
premises did not have a certificate of fitness or authority to trade in the
sale of clothes and electrical appliances. Razunguzwa admitted that it was
aware of the absence of a certificate of fitness. The uncontroverted oral
evidence of the witnesses for the defendants that Gomba prevailed upon them to
use their personal and political influence to persuade the municipal authorities
to grant them the certificate of fitness and turn a blind eye to the
contravention of its zoning regulations also confirmed the accuracy of these
averments. The core business of the plaintiff was to let out property. It is
deemed to have had such specialist knowledge.
That
the conclusion of a lease agreement for the use of premises contrary to
municipal zoning regulations is illegal was set out in Latimer Manley & Associates (Pvt) Ltd v Larverna Investments (Pvt)
Ltd 1990 (1) ZLR 200 (H) at 203 G where GIBSON J stated that:
"In
this case (where a dwelling was used as commercial premises in contravention of
both the Commercial Premises (Rent) Regulations SI 676/83 and the Rent
Regulations SI 626/82) the illegality was not in my view, innately
reprehensible, it was mala prohibita.
Ordinarily then one would incline to relax the rule-in pari delicto potior conditio defendentis."
The
definition of and the jurisprudential justification for relaxing the in pari delicto maxim is set out in Dube v Khumalo 1986 (2) ZLR 103(S) at
109E-110E. In the Latimer Manley
case, supra, at 203C-D GIBSON J
stated that:
"It
is not open to the parties to negotiate terms which are clearly illegal and
then to turn around and invite the court to recognise or enforce their illegal
activity. I would therefore hold that if the lease agreement had not been acted
upon, this court would have refused to enforce it. But since it has been acted
upon, the court will intervene if justice and equity deem it proper."
In
the present matter the illegal lease agreement was acted upon, therefore I am
allowed to intervene if justice and equity deem it proper. The presence of
unjust enrichment often drives the court to intervene. In the present matter
the plaintiff contended that it was entitled to eviction and payment of arrear
rentals and operating costs and holding over damages otherwise were it denied
this relief, the defendant would be unjustly enriched at its expense. I find
merit in the plaintiff's contention.
Thus
while I would answer the fourth issue referred to trial in defendants' favour,
I would dismiss Mr Mudambanuki's main
submission and answer the fifth issue referred to trial against the defendants.
The
next issue for determination is whether the first defendant breached the terms
and conditions of the lease agreement.
The
plaintiff averred that the first defendant did not pay rent on due dates and
where rent was paid; at times it did not pay the whole amount due. It also
averred that the first defendant failed to pay operating costs. Mr Mudambanuki
conceded that the first defendant did not pay the full amount due per month
in January 2010 and the months from April 2010. I also find that it did not
make timeous payments in May, June, July, September, October and December 2009.Exhibit
1 and the table of payments I extracted from exhibit 1 shows that the first
defendant was not paying rent on time.
The first defendant has not produced evidence to dispute these facts.
The non- timeous payment of rent was a fundamental breach of the lease
entitling the plaintiff cancellation of the lease agreement.
The
first defendant did not pay the operating costs. The averment that it was
exempted from doing so for 12 months because it had face lifted the leased
premises was not pleaded. The failure to pay operating costs until October 2009
when Mr Lupahla notified them of the oversight in billing them can only excuse
non-payment up to the period of such notification. In her letter of 23 October
2009 to Razunguzwa (in response to Razunguzwa's request to pay outstanding
rentals for October of US$3 180.16), the second defendant stated that Lupahla
had submitted a bill for operating costs of US$4 000.00 from April 2009. She
further averred that they were prompted to balance payments and share rentals
between the plaintiff and its managing agent. She suggested that the managing
agent should have discussed a payment plan rather than threaten legal action. I
note in passing that she did not suggest that both rentals and operating costs
were to be offset by the cost of the renovations. The only valid defence the
defendants could possibly raise for non-payment of operating costs to October
2009 was that the plaintiff did not furnish them with a statement for operating
costs. Once the statement was supplied
for that period and subsequent months to the date of cancellation, it seems to
me that the defendants were obliged to pay.
In
the letter of 27 January 2010, the second defendant raised a dispute on the
amount of operating costs and challenged requests to pay certain classes of
operating costs such as security. During the trial the defendants also challenged
payment for indoor flowers. The second defendant averred that the defendants
were not obliged to pay for operating costs during the first six months of the
lease as they had not yet commenced operations. Mr Mudambanuki submitted that the plaintiff should have referred the
dispute to an independent expert for determination in terms of clause 4.7
instead of launching this action prematurely. Clause 4.7 reads:
"If
any dispute arises between the parties in regard to the operating costs, and
without derogating from the generality of the foregoing, any dispute as to any
amount payable by the tenant in respect of operating costs and the
reasonableness of the expenditure, such dispute shall be referred to an
independent person who has at least 10 (ten) years experience in the
management, maintenance and upkeep of premises, buildings and properties
similar to those forming the subject matter of this lease. Such independent
person whose decision shall be final and binding on the parties, shall be
agreed upon between the parties, and failing agreement within 30 (thirty) days
after the date of a written declaration of such dispute as notified by either
party to the other, shall be nominated by the President of the Advocates
Chambers. Such independent person shall, in making his determination, act as an
expert and not as an arbitrator, and shall have due regard to generally
accepted standards and practices in the property industry. The expert shall
determine which party shall bear the costs of such determination, having regard
to which party's submissions were substantially upheld in the determination of
the dispute."
I
make three observations concerning clause 4.7.The phrase without derogating
from the generality of the foregoing preserves the obligations set out in the
preceding clauses 4.1 to 4.6 that define the nature, computation, content and
payment of operating costs. The second is that the tenant must raise the
dispute and initiate a written declaration of such dispute. Thereafter the
parties agree on the expert and if they fail, one is appointed for them by the
President of the Advocates Chambers.
In
the present matter, the tenant raised a dispute. It did not initiate a written
declaration of the dispute but pursued dialogue and negotiation. Even when
dialogue failed to achieve the desired result, it neither provided a written
declaration of the dispute nor identified a possible independent expert. The
defendants' failure to initiate these preliminary procedures negated the
application of clause 4.7 to the dispute and absolved the plaintiff from
submitting the dispute to mediation. I do not agree that in bringing the
present action the plaintiff acted prematurely or violated the provisions of
clause 4.7. Mr Mudambanuki's
submission in this regard fails.
Accordingly,
I find that the first defendant breached the terms and conditions of payment of
both rent and operating costs.
Before
dealing with the amounts due to the plaintiff under the three heads sought, I
must deal with the third issue referred to trial. It seems to me that clause 28
answers the issue. By signing the lease agreement as it stands, the first
defendant agreed to all its terms and conditions. It was obliged to pay rent in
advance on the first of each month. It was obliged on presentation of a
statement for operating costs to pay such costs. It agreed to put the property
in good order for the landlord without extracting from the landlord written agreement
to waive timeous payment of either rent or operating costs. It agreed to pay
these costs in addition to the costs of renovating the leased premises. I am
not able to lay blame on the landlord for the first defendant's failure to pay
rent. I am also not able to blame the landlord for first defendant's failure to
pay operating costs after October 2009. I do not find that the illegality of
the lease exempted the first defendant from paying rent and operating costs
once it decided to remain in situ after discovering the illegality in December
2009. It was incumbent on first defendant to leave the premises once it
discovered that its line of business was prohibited in the leased premises and
if advised sue the plaintiff for its present and future losses. It chose to
remain in occupation and benefit from such occupation and use of associated
services. I answer the third issue
referred to trial against the defendants.
I
now consider the amounts due to the plaintiff as arrear rentals, arrear
operating costs and holding over damages.
Initially,
the plaintiff claimed rent of US$3 230.00 per month. The claim included
US$30.00 per month for parking fees. In his oral submissions Mr Kadzere correctly abandoned the claim
for parking fees on the basis that they were not contained in the lease
agreement. The claim for US$28 489.00 included the parking fees and interest
charged on over due rentals inclusive of parking fees. Interest on over due rent
was charged in terms of clause 7.1 at 5% above the minimum lending rate of the
landlord's bankers per month. The
plaintiff failed to prove the rate it levied interest on over due rentals. To
that extent, the claim for over due rentals inclusive of interest in the sum of
US$28 489.00 was not proved.
The
lease agreement was cancelled on 13 July 2010 when the July 2010 rent of US$3
200.00 was due on 1 July 2010. The first defendant had been in occupation for
16 months. The amount due for rent was US$51 200.00. In that period the first
defendant paid rent in the sum of US$30 600.00. The amount owing was US$20
600.00.
I
would order payment in this amount.
On
operating costs, Mr Kadzere conceded
that deductions be made for the pro rata
share of the first defendant for water charges in July (US$ 701.50),
October(US$764.29), November (US$942.08)
and December(US$942.08) 2009. The total amount for all the tenants at
the building for these months was in the sum of US$ 3 349.95. The share
attributed to the first defendant (7, 59 % of this amount) was US$254.26. After
deducting this amount from the corrected amount due of US$6 956.23, the amount
due for operating costs is in the sum of US$6 701.97.
Mr
Mudambanuki argued that the formula
used to compute the operating costs was unreasonable bearing in mind the actual
usage of the services such as water and electricity by the first defendant. It
is apparent that there was a bulk meter for such services for all the tenants.
In the absence of an individual meter on each tenant, there does not appear to
be any other rational method of sharing such costs between tenants. Mr Mudambanuki
did not suggest any. In any event, it is not the duty of the court to write
a contract for parties. It is the duty of tenants to negotiate terms of payment
with the landlord.
The
second contention was that the first defendant was exempted from paying
operating costs during the first six months that it was not operating. The contention, however, overlooks the
agreement reached by the parties. The definition of operating costs is provided
in clause 4.3 as the total amount reasonably and actually incurred by the
landlord in relation to the building and the property. That definition does not limit operating costs
to those actually incurred by the tenant. It limits them to the landlord's
costs. The fact that the defendant was not operating is irrelevant as in terms
of clause 4.1 the operating costs started to run from the date of commencement of
the lease. Those costs include cleaning costs, security costs and maintaining
indoor and outdoor garden for the whole building and the leased property. There
is no legal basis for the first defendant to challenge security costs, the cost
of purchasing indoor flowers or repairing public toilets in the fourth floor.
It
seems to me that the plaintif has proved claims for arrear rentals in the sum
of US$ 20 600.00 and arrear operating costs in the sum of US$ 6 701.97.
On
holding over damages, I am satisfied that the plaintiff has proved those that
are in lieu of rentals at the rate of US$3 200.00 per month for the period the
first defendant remains ensconced on the premises until ejectment. It did not prove holding over damages in lieu
of operating costs of US$ 800.00 per month. The average for the 15 months from
April 2009 to 30 June 2010 amounts to US$ 446.80. Operating costs are based on
actual expenditure incurred by the plaintiff. By the time of trial the
plaintiff would have been in possession of the actual expenditure incurred from
July 2010.I will grant the defendants absolution from the instance on the claim
of holding over damages for operating costs.
In
their evidence, the defendants pleaded set off of the cost of renovations
against claim for holding over damages in lieu of rent. The defendants proved
expending US$23 200.00 on the renovations. It is appropriate to set off this
amount against the proved arrear rentals and arrear operating costs of US$27
301.97. The amount due to the plaintiff after set off is US$4 101.97.
Costs
are always in the discretion of the court. The plaintiff sought costs on a
higher scale. They are justified by the conduct of the defendants who while
accepting the illegality of their stay on the premises from December 2009 has
remained ensconced therein. I find the conduct of the defendants reprehensible.
The court expresses its displeasure by mulcting them with costs on the higher
scale as prayed for by the plaintiff.
Accordingly,
it is ordered that:
1. The
cancellation of the lease agreement between the plaintiff and the first
defendant is confirmed.
2. The
first defendant and all its sub-tenants, assignees, invitees and all other
persons claiming occupation through it shall be evicted forthwith from the
plaintiff's premises being ground and mezzanine floor MIPF House, 5 Central
Avenue Harare.
3. The
first and second defendant, jointly and severally the one paying the other to
be absolved shall pay to the plaintiff:
i)
The sum of US$ 4 101.97
with interest thereon at the rate of 5 % per annum from 2 October 2010 to the
date of payment in full.
ii)
Holding over damages
for continued occupation by first defendant of plaintiff's premises at the rate
of US$ 3 200.00 per month from 2 November 2010 to the date of first defendant's
ejectment together with interest thereon at the rate of 5 % per annum as from
due date to the date of payment in full.
4. The
first and second defendant are absolved from the instance from paying holding
over damages for operating costs incurred from 13 July 2010 to date of
eviction.
5. The
first and second defendants shall jointly and severally, the one paying the
other to be absolved pay the plaintiff's costs of suit on the scale of legal
practitioner and client.
Gill, Godlonton
& Gerrans, plaintiff's legal practitioners
Mudambanuki and Associates, first and second
defendants' legal practitioners
