PATEL
J: The
background to this matter is as follows. On the 6th
of February 2006, the parties herein entered into a lease agreement
to run for a period of 36 months, from the 1st
of January 2006 to the 31st
of December 2008, in respect of certain premises situated in Harare.
On the 30th
of January 2007, the parties concluded an addendum to the main
agreement, providing for an option to renew and other incidental
matters.
At
the beginning of 2008, the applicant prepared a fresh draft agreement
requiring, inter
alia,
usage of the premises in a manner that would be complementary to the
applicant's cultural activities. This draft was rejected by the
respondents on the ground that it was an entirely different lease
arrangement with more onerous obligations.
On
the 27th
of March 2008, the applicant's lawyers gave the respondents notice
to vacate the premises on the 31st
of December 2008, indicating that the applicant intended to utilise
the premises for its own use.
In
June 2008, the applicant proposed an increase in monthly rental from
$4 trillion to $60 trillion. The respondents in turn consulted
various estate agents and tendered $25 trillion as being a fair and
reasonable rental.
In
July 2008, the applicant filed the present application seeking an
order requiring the respondents to vacate the premises by the 31st
of December 2008. The respondents resisted the application on the
ground that the applicant did not want the premises for its own use
but for some other ulterior purpose, viz. in order to lease the
premises to another party and/or accrue higher rentals.
For
reasons which are not clear from the record, the applicant's
lawyers only applied in February 2009 for the matter to be set down
for hearing. Moreover, they have not applied to amend the relief that
was originally sought, viz. eviction of the respondents by the 31st
of December 2008.
Duration
of Lease
The
original lease agreement of 2006 was filed of record as Annexure A to
the applicant's founding affidavit. In terms of the Second Clause,
the lease “shall continue to run for the term or period of 36
months on and up to 31st
December 2008”. The Third Clause stipulated the monthly rent for
the first 12 months. Thereafter, the rent was to be reviewed “in
line with current market trends” (as per the original typed
wording) or “monthly in line with inflation” (as per the manually
amended version).
At
the hearing of this matter, Mr.
Chikumbirike
attempted to disown the latter version with the specious explanation
that the manual amendment was in anticipation of what was to be
incorporated in the revised draft agreement. However, given that the
amended version was in fact filed by the applicant itself, and cited
without any qualification in the founding affidavit as the governing
lease agreement, it must be the version that must be adopted for the
purposes of this application.
Under
the common law, an essential ingredient of a contractual lease is
that the amount of the rent payable by the lessee must be fixed or
that some definite mode of fixing the rent must be agreed upon. In
other words, the rental must be in an ascertained or ascertainable
amount. See Totoyi
v Ncuka
1909 EDC 115. See also Film
and Video Trust v Mahovo Enterprises (Pvt) Ltd
1993 (2) ZLR 191 (H) at 195, citing Brown
v Hicks
(1902) 19 SC 314 at 315 & 316:
“Until
the rent, or some definite mode of fixing the rent, is agreed upon,
there is no contract of letting and hiring of the house. The letting
of services stands upon the same footing.”
In
this context, an objective indicator determined by a public body
would afford a definite mode of fixing an ascertainable rent.
In
the instant case, I am of the view that the stipulated review of the
rental “monthly in line with inflation”, in accordance with the
inflation index compiled and published by the Central Statistical
Office, provides an objective indicator and definite mode for fixing
the monthly rent.
It
follows that the duration of the contractual lease between the
parties was a term of 36 months, expiring on the 31st
of December 2008. Thereafter, inasmuch as the respondents did not
exercise their option to renew the lease, the contractual lease
lapsed and was converted into a statutory tenancy under Part IV of
the Commercial Premises (Rent) Regulations 1983.
Termination
of Lease
The
next question is whether the contractual lease was terminable by
notice given before the date of its expiry – as was done by the
applicant in March 2008. The lease agreement itself, as read with the
addendum of 2007, does not entitle the applicant to terminate the
lease by notice or otherwise, except on the ground of material
breach, at any time before the expiration of the fixed term of 36
months.
In
this regard, Mr.
Chikumbirike
contends that at common law the lessor is entitled to give notice of
termination to coincide with the date of expiration so long as he
respects the fixed term of the lease.
No
authority was cited for this spurious proposition and I am unable to
find any merit in it for the simple reason that a fixed term lease
terminates ipso
facto
upon the expiry of the fixed term, without the need for any notice of
termination from either party. The giving of notice to terminate so
as to coincide with the date of expiry of the lease is legally
pointless and practically futile.
In
the instant case, Mr.
Chikumbirike's
assertion is rendered even more untenable by dint of the option to
renew granted to the respondents. In terms of the Fourth and Sixth
Clauses of the lease agreement, as substituted by the addendum, the
respondents had the option to renew the lease for a further period of
36 months by giving written notice of their intention to do so no
later than 3 months prior to the 31st
of December 2008. This option, subject only to the satisfactory
performance by the respondents of their obligations in terms of the
lease, further precluded the applicant from terminating the lease
before the expiry of its fixed term.
It
follows from the foregoing that, except for material breach of the
lease agreement by the respondents, the contractual lease between the
parties was not terminable by the applicant by notice given at any
stage prior to the expiration of the fixed period of 36 months. It
also follows that the purported notice of termination given by the
applicant in March 2008 is a nullity with no legal force or effect
insofar as concerns the duration of the lease in
casu.
Statutory
Tenancy
As
I have already stated, the respondents did not duly exercise their
option to renew the lease before the expiry of the contractual lease
on the 31st
of December 2008. Therefore, as from the 1st
of January 2009, they became statutory tenants of the demised
premises under Part IV of the Commercial Premises (Rent) Regulations
1983 (S.I. 676/1983), as amended.
Section
22 of the Regulations restricts the ejectment of statutory tenants
and provides as follows:
“(1)
For the purposes of subsection (2), “rent due”, in relation to
commercial premises, means —
(a)
where the determination of a fair rent in terms of Part II is in
force in respect of premises, the rent fixed thereby, as varied from
time to time in terms of that Part; or
(b)
in any other case, the rent due in terms of the lease.
(2)
No order for the recovery of possession of commercial premises or for
the ejectment of a lessee therefrom which is based on the fact of the
lease having expired, either by the effluxion of time or in
consequence of notice duly given by the lessor, shall be made by a
court, so long as the lessee —
(a)
continues to pay the rent due, within seven days of due date; and
(b)
performs the other conditions of the lease;
unless
the court is satisfied that the lessor has good and sufficient
grounds for requiring such order other than that —
(i)
the lessee has declined to agree to an increase in rent; or
(ii)
the lessor wishes to lease the premises to some other person.”
Section
23 sets out the rights and obligations of statutory tenants and
governs the giving of notice by lessors and lessees as follows:
“A
lessee who, by virtue of section 22, retains possession of any
commercial premises shall, so long as he retains possession, observe
and be entitled to the benefit of all the terms and conditions of the
original contract of lease, so far as the same are consistent with
the provisions of these regulations, and shall be entitled to give up
possession of the premises only on giving such notice as would have
been required under the contract of lease or, if no notice would have
been so required, on giving three months notice:
Provided
that, notwithstanding anything contained in the contract of lease, a
lessor who obtains an order for recovery of possession of the
premises or for the ejectment of a lessee retaining possession as
aforesaid shall not be required to give any notice to vacate to the
lessee.”
Section
24 prohibits the unlawful removal of property or any obstruction in
the use of leased premises and stipulates that:
“No
lessor of commercial premises shall —
(a)
without a lessee's consent and without reasonable excuse, cause the
removal from the premises of any property belonging to the lessee; or
(b)
prevent a lessee from using or occupying the premises;
unless
he has obtained an order of court for the removal of such property,
if appropriate, or for the recovery of possession of the premises or
the ejectment of the lessee therefrom.”
Notice
to Vacate
For
present purposes, the overall effect of these provisions is that,
subject to compliance with the terms of the expired lease agreement,
the respondents are entitled to remain in occupation of the premises
and use them without obstruction, unless and until they voluntarily
vacate the premises or are lawfully removed therefrom in accordance
with the Regulations.
The
applicant has now approached the Court seeking the eviction of the
respondents from the leased premises. The question that arises is
whether or not it is required to give the respondents, who are now
statutory tenants, any notice to vacate the premises before seeking
their ejectment by the Court.
Section
23 of the Regulations is ambiguously unclear in this respect. While
it might be correct to infer that no notice to vacate would be
required where the lessee fails to observe the terms and condition of
the contractual lease, the position where the lessee religiously
complies with his lease obligations is not at all clear. The proviso
to section 23, in its express terms, only absolves the lessor from
having to give notice to vacate where he has already obtained an
order for recovery of the premises or for the ejectment of the
lessee. The necessary implication, in the case of the good statutory
tenant, is that the lessor is obliged to give him notice to vacate
before approaching the Court for an eviction order. The period of
such notice, again by implication, would be such notice as would have
been required under the lease agreement or, if no notice would have
been so required, a period of three months notice.
In
the present case, as I have already stated, the
purported notice of termination given by the applicant in March 2008
is a nullity insofar as concerns the duration of the lease. It
follows that the applicant has not given the respondents any valid
notice to vacate. Therefore, if the position postulated above is
correct, it also follows that the applicant is precluded from seeking
the eviction of the respondents and that the present application is
premature and should be dismissed on that ground alone.
In
any event, for the reasons that follow, I do not deem it necessary to
definitively decide this point and am inclined to leave it open for
present purposes.
Ejectment
from Premises
The
final issue for determination is whether or not the applicant has
good and sufficient grounds for requiring the eviction of the
respondents as envisaged in section 22(2) of the Regulations.
In
Checkers
Motors (Pvt) Ltd v Karoi Farmtech (Pvt) Ltd 1986
(2) ZLR 246 (SC), it was held that it is proper to attach substantial
weight to the fact that the owner reasonably requires the use of the
premises for his business operations. However, it was left open as to
whether the hardship the tenant will suffer as a result of eviction
ought to be taken into account in determining the issue of good and
sufficient grounds for eviction.
In
Mobil
Oil Zimbabwe (Pvt) Ltd v Chisipite Service Station (Pvt) Ltd
1991 (2) ZLR 82 (SC), it was held that where a landowner wishes to
use the premises for his own purposes, the court enquires only as to
his bona
fides
and not as to the reasons why he decided to use the premises for his
own purposes. On the facts of that case, the decision by the
appellant to use the premises for its own purposes was a legitimate
and bona
fide
commercial decision which constituted good and sufficient cause for
the purposes of the Regulations.
In
Film
and Video Trust v Mahovo Enterprises (Pvt) Ltd
1993 (2) ZLR 191 (H), the court adopted a robust approach in favour
of the lessor's position. It was held that an order for the
ejectment of a statutory lessee may be made once the lessor satisfies
the court that it is has good and sufficient grounds to require an
order for ejectment. The needs of the lessee are irrelevant in this
regard. While ejectment may not be ordered if the lessor's grounds
for requiring it are that the lessee has declined to accept an
increase in rent or because the lessor wishes to lease the premises
to another person, the fact that other grounds for requiring
ejectment may be motivated by one of those factors is immaterial as
long as the other grounds are genuine. It was further held that all
that the lessor is required to do is assert his good faith and bring
some small measure of evidence to demonstrate the genuineness of his
assertion.
Turning
to the instant case, the reasons proffered by the applicant for
recovering possession of the premises are set out in the letter of
the 27th
of March 2008 from the applicant's lawyers to the respondents'
lawyers. The letter refers to the revised draft agreement proposed by
the applicant but rejected by the respondents. At page 2 of the
letter, it is stated as follows:
“That
being the position, my clients are of the view that since there does
not appear to be any co-operation on the part of your client in
relation to certain fundamental aspects, especially aspects that are
covered in the preamble to the proposed lease agreement, in relation
to the complimentary [sic]
nature
which they feel your client's restaurant must give in relation to
the enhancement of the cultural perspectives which it exists for, my
clients do hereby give your clients notice that at the expiry of the
period that relates to the so called lease agreement, that is the
31st
of December 2008, they intend to utilise the premises that your
clients presently lease for own use. ……..
……..
Please
note that
the reason for wanting to terminate the statutory tenancy is not
because my clients require an increase in rent, which however in
respect of any business, is inevitable and in any event, is provided
in terms of the invalid lease agreement but because of the failure to
come to an agreement in respect of certain terms that relate to
complimentary [sic]
use
of the premises by them in relation to their activities.
It
is not intended that they be leased to any other party, but they will
be exclusively used by them as provided for in terms of the Rent
Regulations.”
It
is also necessary to consider the applicant's averments in its
founding and answering affidavits. At page 4 of the founding
affidavit, it is stated that:
“8.
Consequently for Applicant to utilise the premises by the 31st
of December 2008, and to carry out extensive renovations necessary
for it to utilise the premises, Applicants [sic]
seek
a declarator, in terms of section 14 of the High Court Act, that the
Lease Agreement between the parties be declared invalid for the
reasons that appear in Annexure “C”.
9.
…….. I must emphasise and reiterate that the decision to
terminate the Agreement (statutory tenancy) is based on the sincere
and bona fide desire by Applicant to use the premises for own use.”
In
the answering affidavit, the above averments are repeated as follows:
“3.
The Applicant have [sic]
contended
that it requires the premises for its own use. It intends to renovate
the place as well. ……..
4.
The Applicant therefore persists with its claim, reiterating that it
requires the premises for its own use, and the desire to do so is not
motivated by any of the grounds prohibited by the Rent regulations.”
As
averred in its affidavits, the applicant's unwavering assertion is
that it requires the premises for its own use. However, neither in
the affidavits nor in the letter of March 2008 does the applicant
disclose the specific purpose for which it intends to utilise the
premises. While this reticence does not necessarily preclude the
relief that the applicant seeks, it does render very questionable the
bona
fides
of its declared reason for evicting the respondents. More
significantly, what the applicant asseverates in its affidavits is
patently belied by the contents of the letter of March 2008. In
particular, the principal and avowed reason for terminating the lease
is “because
of the failure to come to an agreement in respect of certain terms
that relate to complimentary [sic]
use
of the premises”.
This,
it would appear, is the real reason for seeking the ejectment of the
respondents. In the present context, this reason in itself cannot
constitute a good and sufficient ground for evicting the respondents
inasmuch as the original lease agreement does not oblige the
respondents either to provide the complementary cultural activities
in question or to agree to provide such activities in terms of some
future lease agreement. As statutory tenants, the respondents are
merely bound to observe and adhere to the terms of the expired lease
agreement. They cannot be compelled to assume or comply with
obligations that they have not agreed to perform.
To
conclude, therefore, the applicant has failed to demonstrate the
genuineness of its assertion that it seeks to recover the premises
for its own use. The bona
fides
of that assertion is negated by the contents of its own lawyer's
letter. It follows that the applicant has failed to show that it has
good and sufficient grounds for requiring the ejectment of the
respondents from the leased premises. In the result, the application
is dismissed with costs.
Chikumbirike
& Associates,
applicant's legal practitioners
Atherstone
& Cook,
respondents' legal practitioners
