MTSHIYA
J: On 7 March 2010 the plaintiff issued summons against the plaintiff claiming:-
a.
"An order for the cancellation of the Lease Agreement
made and entered into by and between the parties on 1 March 2008;
b.
An order for the ejectment of the defendant from 1st
Floor, Runhare House North Wing, 107 Kwame Nkrumah Avenue, Harare together with
all person(s) claiming title through the defendant;
c.
An order for payment of an amount of US$22 941.40 in
respect of arrear rentals and operating costs as at February 2010;
d.
Payment of holding over damages calculated at the rate
of US$58.40 per day calculated from 1 March 2010 to the date of ejectment;
e.
An order for payment of operating costs apportioned on
the leased premises calculated from 1 March 2010 the date of ejectment;
f.
Interest on the amounts claimed at the prescribed rate
calculated from the date of summons to the date of payment; and
g.
Costs of suit."
The
defendant denied the claims which, briefly, were based on the following facts:
On March 2008 the plaintiff and the
defendant entered into a lease agreement.
The plaintiff leased to the defendant 584 square metres of the 1st
floor of Runhare House, Harare. The
plaintiff and Communications and Allied Industries Pension Fund are owners of
stand number 14940 Salisbury Township, which houses the leased premises (ie 584
square metres of the 1st floor of Runhare House, Harare.) Initially
the defendant was paying rent in Zimbabwe dollars. The position changed in February 2009 when a
multi-currency regime was ushered in by Government. Accordingly as at 1 February 2009 the rent
payable was $1.75 per square metre and given the rented area that translates to
$1 022.00 per month. That amount does
not, however, include operating costs which were indicated separately on a
monthly basis. The defendant made erratic
rental payments resulting in a default payment of US$22 941.40 in respect of
both rent and operating costs as at February 2010.
Apart from the default in the
payment of rent and operating costs, the plaintiff also alleged that the
defendant, without its consent, sublet the leased premises. Failure to pay rent and subletting was,
according to the plaintiff, in breach of the contract and hence the relief sought
and quoted at p 1 of this judgment.
The defendant
denied the plaintiff's allegations and rejected the plaintiff's claims.
Upon
handing in its bundle of documents as exh 1, the plaintiff then called one
witness only, namely Grace Murenzvi (Murenzvi).
Murenzvi said she was employed by
the plaintiff as the Estates and Administration Officer. She said the lease agreement appearing at pp
1-16 of exh 1 was signed between the parties before the introduction of
multi-currency in February 2009. She
said the lease agreement did not allow the defendant to sublet any part of the
area leased to it.
Muremzvi said that in February 2009 the
plaintiff introduced new rentals in United States dollars. The agreed monthly rental, including value
added tax of 15%, was US$1.75 per square metre for the 584 square metres
occupied by the defendant. She said although
there were further increases in June 2009 and June 2010, the plaintiff's claim
was based on the original rate of US$1.75 per square metre which the defendant
accepted in February 2009. She said, on
the basis of that agreed rental, the defendant had, in March
2009, paid US$1 022.00. She said although further part payments had later been
made, the defendant had, however, not made any payments for several months as
shown in the schedules under exhibit 1.
She went on to say the defendant was also not
paying operating costs to cover electricity, water, security and other services
in the building. Furthermore, she went
on, the defendant had, without the plaintiff's consent, proceeded to sublet part
of the area allocated to it.
Murenzvi
said the outstanding rental amount, including operating costs, as at end of
February 2010 was US$22 941.40. She said
on the basis of US$1.75 per square metre,
the rental arrears as at March 2010 was US$45 047.80. She said of that amount, the defendant had
paid US$7 154.00 in October 2011 and thus leaving a balance of US$37 893.80 for
the period of March 2010 to September 2011 which the plaintiff was now claiming.
The
defendant also called one witness only.
It called Miss Nancy Majome (Majome).
Majome
told the court that she is an Estate Agent operating under the defendant's
name. She said she was one of the owners
of the company (the defendant) and was a tenant of the plaintiff. She said in 2009 the plaintiff wanted to
raise rent and as a result she had approached the Rent Board. The rent Board had not dealt with the matter
pointing out that the plaintiff had already taken the matter to the High
Court. Majome agreed that a lease
agreement existed between the two parties but said there were disputes relating
to payment for electricity, repairs and general maintenance. She said between 2008 and November 2010 the
defendant had engaged its own general hands to clean the offices - including
toilets. She said the general hands were
provided by Sacing fire Security whom she had paid between US$200 and US$220 in
January 2010.
On
the issue of rent, she confidently stated:-
"We
thought we were to pay US$1 022."
She
said at the pre-trial conference the High Court had also told them to continue
paying that amount. Majome said tenants
were prepared to pay US$1.75 per square metre but the plaintiff had
continuously hiked the rentals.
It
must be noted though that the plaintiff is not claiming more than US$1.75 per
square metre from the defendant.
Majome
said the defendant did not sublet any of the rented space as such but was given
sub tenants by the plaintiff's members of staff. That situation had resulted in defendant
occupying only 220 square metres of the contractually agreed 584 square
metres. That being the case, she argued,
the defendant was supposed to pay the said US$1.75 per square metre towards the
said area of 220 square metres. She said
her own audit indicated that rather than owing the plaintiff US$22 941.40 in
rental arrears and operating costs, the defendant was instead owed US$637 by
the plaintiff. Majome said the plaintiff
had no bona fide reason to evict the
defendant because it was up to date with its rental payments for the 220 square
metres it occupied.
In
his submissions, Mr Dondo, for the plaintiff, submitted that the evidence
adduced confirmed that the defendant had;
a)
Breached the terms of the lease agreement produced in
exh 1 by failing to pay agreed rentals and operating costs in terms of the
lease agreement; and
b)
Sublet the premises without the plaintiff's authority
contrary to the provisions of the lease agreement.
He said, as
indicated at pp 21-23 of exh 1 the defendant had failed or refused to pay
rentals in terms of clause 3.3 of the
lease agreement. Furthermore, where rent
was paid, it was either insufficient or erratic and thus leading to a total of
US$22 941-40 in respect of arrear rentals and operating costs as at February
2010. He said, calculated at US$1.75 per
square metre, the defendant owed the plaintiff a total of US$ 37 893-80 for the
period March 2010 to September 2011.
Mr Dondo also submitted that the
plaintiff had also proved that the defendant was subletting the premises to at
least three different companies without its authority. He said the defendant had dismally failed to
rebut the plaintiff's case. The
plaintiff, he said, had proved its case on a balance of probabilities and was
therefore entitled to the relief it sought. That being the case, he argued, the
plaintiff had thus demonstrated justification for the cancellation of the lease
and demanding the eviction of the defendant from the premises.
Mr Simango for the defendant
submitted that the evidence adduced showed that the parties had never reached
agreement on the rent payable. He said
that was the reason why the parties had approached the Rent Board. He went on to submit that the plaintiff had
merely imposed the rent payable on the defendant.
Mr Simango argued that although the
defendant acknowledged rental arrears, the quantum thereof was not known and
furthermore the plaintiff had waived it right to sue for breach of contract
when it accepted the defendant's apology for rental arrears.
Notwithstanding the fact that
Majome, the defendant's witness, admitted that the lease in exh 1 was the one
that regulated the relationship between the parties, Mr Simango submitted,
surprisingly, that there was no lease agreement upon which the plaintiff could base
on its claim. He said there was no addendum
to the lease agreement in exh 1 to show that after the introduction of
multi-currency , the parties had agreed to the rental of US$1.75 per square
metre. Furthermore, he went on to say
the plaintiff had never communicated to the defendant its intention to cancel
the lease agreement.
On the issue of subletting, Mr
Simango submitted that the plaintiff itself had brought in a subtenant and some
of the subtenant were employees of the plaintiff. He also submitted that the plaintiff was
using part of the 584 square metres let to the defendant. The plaintiff had not acceded to the
defendant's request for an inspection in loco.
I must, however, point out that there
was never any formal application for any inspection in loco.
Mr Simango said the plaintiff was
obliged to pay the defendant for the 220 square metres that it was using in the
leased premises. He prayed for the
dismissal of the plaintiff's claim.
In terms of the
Joint Pre-trial conference Minute filed on 24 September 2010 the issues for
determination are listed as follows:-
"1. Whether or not plaintiff refused to accept rentals due?
2.
Whether defendant is in breach of the Lease Agreement
made and entered into by and between the parties?
3.
Whether defendant owes to plaintiff in respect of
outstanding rentals and operating costs as claimed?
4.
Whether plaintiff was entitled to unilaterally alter
the terms of the Lease Agreement to start charging rental sin foreign
currency?
5.
Quantum of holding over damages calculated from 1 March
2010?
6.
What amount should defendant pay in respect of
operating costs on a pro-rata basis
from 1 March 2010?"
This,
in my view is a straight forward case wherein through Majome, the defendant's
witness, the non-payment of rent was admitted on the basis that there was no
agreed amount of rent payable and hence the approach to the Rent Board. However, in para 6 of its plea the defendant
states as follows:-
"There was no
conclusion regarding the quantum of rent to be paid by the defendant. The defendant's position is that rental
should stand at $1 022.00 per month while plaintiff is claiming $1 750.00 which
is not in accordance with the lease agreement signed by both parties which the
plaintiff has deliberately concealed."
Given
the above one would then ask:- So where
is the dispute on rent?
I
believe the starting point is to establish that there was indeed a lease
agreement. The defendant's witness
admitted that the lease agreement in exh 1 governed the relationship between
the parties. There was therefore a valid
lease agreement between the parties.
Majome, under cross-examination, also agreed that after the introduction
of multi-currency the rent payable was US$1.75 per square metre. That is the rate accepted in the plea as
shown above. The witness, further agreed
that payments were erratic and were not paid in terms of the lease
agreement. To me those admissions,
sealed the plaintiff's case. It is clear
to me that as from February 2009 the new rental was US$1.75 per square metre
and in June 2009 the plaintiff made an attempt to increase the rental to
US$3.00 per square metre. On 2 June 2009
the plaintiff wrote to the defendant in the following terms:-
"Following our
discussion on 1 June 2009 concerning above, please be advised that your rent
will be US$3.00 per square metre excluding value added tax with effect from 1st
of June 2009. This is a modest increase
which has been influenced by market movements that are taking place within the
economy. We request that you make your
rental remittance on the basis of the new rates at the earliest and clear all
arrears by 5 June 2009 without fail.
Thank you in advance for your cooperation in this matter we remain."
It
is interesting to note that on 4 June 2009 the defendant responded to the above
proposals in terms that even suggested a rental amount above the US$1.75 per
square metre that the plaintiff has insisted on in these proceedings. The defendant wrote:-
"Thank
you for your letter dated 2 June 2009 concerning the above. The tenants
have indicated
that the rental figure of US$3 per square metre which you suggested is still on
the high side, and they have requested us to plead for its review. As a compromise, the tenants offer a figure
of US$2.30 per square metre. Kindly let
us know your attitude to this compromise."
It
is clear to me that the proposed figure of US$2.30 was based on existing rental
as at 31 May 2009. That rental according
to evidence was US$1.75 per square metre and plaintiff admitted that at the
pre-trial conference GOWORA J had recommended that it continued paying that
rent. The defendant did not heed the
advice but instead went on to effect insufficient erratic payments.
Indeed,
some of the erratic payments made were based on the figure of US$1.75 per
square metre. There can therefore be no doubt
that as from February 2009 to 31 May 2009 the agreed rental was US$1.75 per
square metre. The plaintiff testified
that it abandoned proposals for increases and hence its claim is based on that
level of rental. I also believe that
when the defendant sought the indulgence of the plaintiff, it was focusing on a
rental figure of US$1.75 per square metre.
That is the rental it had been paying and that is the rental the court
had advised it to continue paying.
On
17 July 2009 the defendant wrote to the plaintiff in the following terms:-
"We thank you so
much for understanding with us and with your supportive attitude. Please accept our apologies of the rentals
arrears. We are still waiting for our
funds from abroad which are still in transit.
Please may you extend grace period up to 28 July 2009 for us to settle
the arrears."
Clearly
both letters from the plaintiff confirm the existence of an agreed
position. Furthermore, if indeed the
space occupied by the defendant had been reduced, both letters from the
defendant quoted herein would have said so.
Majome confirmed that the issue was never raised. The issue only emerged when the plaintiff
decided to take action against the defendant for non-payment of rent and
subletting.
All
in all the foregoing clearly shows that as from February 2009 to date the
plaintiff was supposed to be paying rent at the rate of US$1.75 per square
metre for the 584 square metres it occupied.
The defendant, in support of the schedules produced by the plaintiff (particularly
annexure B of plaintiff's further particulars), admitted that at times no rent
was paid and when ever erratically paid it was insufficient. P 21 of the schedule shows the erratic and
insufficient payments. The letter of 17
July 2009 confirms the rental arrears and indeed the breach of clause 3.3 of
the lease agreement. That breach alone
entitles the plaintiff to the action it took in cancelling the lease agreement and
demanding the eviction of the defendant from the premises. Clause 3.3 of the lease provides as follows:-
"The rent shall
be paid to the place of payment monthly in advance, free of exchange and bank
charges and without deduction whatsoever on or before the first day of the
month throughout the period of this Lease and renewal and extension thereof."
Furthermore
clauses 4.0 of the lease agreement provides as follows:-
"
4.1 The tenant shall meet the cost of
4.1.1 municipal rates and service charges
and taxes, fees, levies or charges
payable to the local Municipality
or any other responsible authority.
These
costs will be apportioned according to total floor space occupied by
the tenant.
4.1.2 cleaning
4.1.3 security
4.1.4 maintenance and repair
4.1.5
maintenance and running costs in respect of air-conditioning, electrical
installation, standby equipment,
pumps, lifts, escalators and other
mechanical, security or fire
extinguishing equipment;
4.1.6 electricity, water, gas, oil or other
fuel used in the Building, and the
property including surcharges and
any penalties;
4.1.7 all insurance premiums including public
liability in respect of the
building and the property;
4.1.8 building amenity including towel and
other toilet services and the costs
of maintaining indoor and outdoor
gardens and plants;
4.1.9 any personnel employed by the Landlord
to operate and maintain the
building or property including
wages, salaries or remuneration of any
nature, contributions to an
unemployment insurance fund, provident
fund or medical aid scheme;"
In Supline Investments P/L v forestry Commission Company of Zimbabwe, HH
76/07, MAKARAU JP, a she then was, had this to say:
"A tenant has
an undisputed obligation to pay rentals for property that he hires from the
landlord. That is the sine qua non for his continued
occupation of the leased property. He
has no right to occupy the landlord's property save in return for payment of
rent. Where the tenant disputes the
amount of the rentals chargeable for any premises, in my view, that challenge
does not absolve the tenant from paying any rentals at all. The minimum that the tenant in such a
situation must pay is the amount that it contends represents fair rentals for
the premises. This, the tenant must pay
to avoid being ejected on the basis of non-payment of rentals even if its
challenge to what constitutes fair rentals is subsequently validated. At most, the tenant can pay the disputed
amount and claim or be credited with the difference once its contentions as to
what constitutes fair rentals are validated."
I
am in full agreement with the above with respect to a tenant's obligations as
to the payment of rent.
For
the period in question the defendant did not deny its failure to pay operating
costs. Its witness could only claim that
it (the defendant) had hired its own general hands to clear and sweep toilets. The witness also said the leased premises had
no electricity and no specific amount had been indicated for water
charges. However, a clause look at the
schedules in exh 1 (particularly p 21-26) reveals that the applicable operating
costs were always indicated - either as arrear totals or actual figures for
each month. These, as per admission by
the defendant, were never paid. I
therefore want to believe that when, on 20 July 2009, the plaintiff warned the
defendant that failure to pay outstanding rental
arrears would
lead to eviction without further notice, it had placed before the defendant
figures representing both rent and operating costs.
The
defendant does not deny that there was subletting. Instead it argues that subtenants were
imposed on it by the plaintiff. The
pleadings do not say so. I did not
find sufficient
rebuttal of the plaintiff's averment in para 4 of its declaration that there
was indeed subletting.
My
finding, on a balance of probabilities, is that the defendant was in breach of
the lease agreement through failure to pay rent and operating costs and also through
subletting. This finding disposes of
issues 1-4 listed under the Joint Pre-trial Conferrence Minute and also the
purported counterclaim by the defendant.
I must point out that there was no counterclaim filed by the defendant
and there is no reference to a counter-claim in the agreed issues for
determination. The issue was only
brought through Majome's evidence and defendant's closing submissions.
As
for issues 5 and 6 on the Joint Pre-Trial Conference Minute, the plaintiff
claim to same has not been challenged.
The claims in respect of both issues are clearly spelt out in paras d-f
of its claim. The defendant has not
objected to the manner in which operating costs should be calculated.
In
view of the foregoing, the plaintiff's claims are upheld and I order as
follows:-
It
is ordered that:
a. The
cancellation of the Lease Agreement made and entered into by and between the
parties on 1 March 2008; be and is hereby cancelled;
b. The
defendant together with all person(s) claiming title through it; be and are
hereby evicted from 1st floor, Runhare House, North Wing, 107 Kwame
Nkrumah Avenue, Harare, and such eviction shall take place within 14 days of
service of this order.
c. The
defendant shall pay the plaintiff the sum of US$22 941.40 in respect of arrear
rentals and operating costs as at February 2010;
d. The
defendant shall pay holding over damages calculated at the rate of US$58.40 per
day calculated from 1 March 2010 to the date of eviction;
e. The
defendant shall pay operating costs apportioned to it on the leased premises
calculated from 1 March 2010 to the date of eviction;
f. The
defendant shall pay interest on the amounts claimed at the prescribed rate
calculated from the date of summons to the date of payment; and
g. The
defendant shall pay costs of suit.
Chinamasa Mudima & Dondo, plaintiff's legal practitioners
WOM Simango &
Associates, defendant's legal practitioners
