This
is an application for summary judgment in the summons proceedings
under case number HC39/15 wherein the applicant claimed the
following:
(a)
An order declaring that the defendant's refusal to sign a lease
agreement with the applicant in respect of the applicant's
premises, namely, Shop 24/25 Ascot Shopping Centre, situate on Stand
16440, Bulawayo, constitutes repudiation of the lease between the
parties and same is terminated with effect from the date of this
order;
(b)
Alternatively, an order that the lease agreement between the parties
be and is hereby terminated forthwith in terms of clause 33.1 as read
with sub-clauses 33.1.1 and 33.1.3 thereof by reason of the
respondent's breach of 8.1; 17.1.2; 17.1.3; 20.1 and 20.5 of the
lease agreement.
(c)
An order that the respondent vacate the applicant's premises,
namely, Shop 24/25 Ascot Shopping Centre, situate on Stand 16440,
Bulawayo within 14 days of this order failure of which the Sheriff of
this court be and is hereby ordered to forcibly evict the respondent.
(d)
Payment of US$16,000= and US$866=20 being arrear rentals and
operating costs respectively, hold over damages of US$26=66 per day
and further operating costs the respondent would have incurred as at
the date of judgment.
(e)
Costs of suit on an attorney and client scale in terms of clause 33.2
of the lease agreement.
In
this application, the applicant sought summary judgment in respect of
paragraphs (a), (b), (c) and (e).
The
claim in paragraph (d) has been excluded.
What
happened here is that the parties entered into a written agreement on
the 20th
of October 2004, prepared by the applicant's erstwhile real estate
agent, Knight Frank Zimbabwe, in terms of which the applicant let to
the respondent certain business premises, being Shop 24/25 Ascot
Shopping Centre, situate on Stand Number 16440 Ascot Township,
Bulawayo. The lease agreement is attached as Annexure C to the
founding affidavit.
In
terms of the lease agreement, the parties were entitled to seek
renewal of the lease as and when it expires. That agreement expired
on the 30th
of November 2013. Prior to the expiry of the lease, the applicant,
through its current real estate agent, John Pocock and Company (Pvt)
Ltd, prepared a written lease agreement to renew the expired lease
between the parties with effect from the 1st
of December 2013.
On
two separate occasions, the respondent collected copies of the
written lease agreement from John Pocock and Co. (Pvt) Ltd to sign
and return same, but, despite several reminders, the respondent never
signed or returned the draft lease agreement. To date, the respondent
persists with its refusal to sign a written lease agreement to renew
the expired one and the applicant has not condoned that conduct. In
sub-clause 33.1 as read with sub-clause 33.1.1 and 33.2.3 the lease
provides that the applicant is entitled to forthwith cancel the lease
agreement in the event that the respondent commits any of the
breaches specified therein.
The
respondent failed to pay monthly rent and operating costs in advance
on the first day of each month and not later than the seventh day of
the month, thereby breaching sub-clause 8.1 as read with sub-clause
33.1.1 of the lease agreement. The respondent further breached
sub-clauses 20.1 and 20.5 as read with sub-clause 33.1.3 of the lease
agreement by failing to carry on its business in the leased premises
in compliance with the laws and regulations governing the Restaurant
Special Liquor Licence.
The
application for summary judgement
is opposed by the respondent on the following grounds:
1.
There is inordinate delay in filing the summary judgment application.
The contention here being that for a summary judgment application to
qualify as summary, it must be made summarily. Reliance was placed on
Stanbic
Bank Zimbabwe Ltd v Dickie and Ano
1998…,.
2.
In case number HC39/15, the applicant claimed payment in a sum of
US$1,600= and US$806=20 as arrear rentals and hold over damages in a
sum of US$26=66 per day in addition to the other relief recited. Yet,
in this application, there is no monetary claim against the
respondent.
3.
The matter ought to be referred to arbitration.
4.
The respondent was not obliged to sign the draft lease agreement as
it became a statutory tenant upon expiry of the lease on the 30th
of November 2013.
5.
The applicant, by accepting payment of overdue rentals and operating
costs, waived its right to cancel the lease on the ground of breach
of sub-clause 8.1.
6.
The respondent did not breach sub-clauses 20.1 and 20.5.
The
issues
1.
Whether the respondent has any bona
fide
defence to the applicant's claims.
2.
Whether the respondent ought to pay costs of suit on an attorney and
client scale.
The
Law
The
starting point is Order 10 Rule 64 which states -
“(1)
Where the defendant has entered appearance to defend to a summons,
the plaintiff may, at any time before a pre-trial conference is held,
make a court application in terms of this rule for the court to enter
summary judgment for what is claimed in the summons and costs.
(2)
A court application in terms of sub-rule (1) shall be supported by an
affidavit made by the plaintiff or by any person who can swear
positively to the facts set out therein, verifying the cause of
action and the amount claimed, if any, and stating that in his belief
there is no bona fide defence to the action.
(3)
A deponent may attach to his affidavit filed, in terms of subrule
(2), documents which verify the plaintiff's cause of action on his
belief that there is no bona
fide
defence to the action.
(4)
Order 32 shall apply to the form and service of an application in
terms of this rule and to any opposition thereto.”
The
courts have, on innumerate times, stated the legal principles
applicable to summary judgment applications. In Scropton
Trading (Pvt) Ltd v Khumalo
1998 (2) ZLR 313 (S)…, it was held that:
“A
plaintiff seeking summary judgment must bring himself squarely within
the ambit of Rule
64(1) of the High Court Rules which requires that the cause of action
must be verified. It must be substantiated by proof and the
supporting affidavit must contain evidence which establishes the
facts upon which reliance is placed for the contention that the claim
is unimpeachable.”
The
nature of the defences that ought to be raised to successfully oppose
an application for summary judgement
was highlighted as follows in Kingstons
(Pvt) Ltd v L D Ineson (Pvt) Ltd
2006 (1) ZLR 451 (S)…,:
“In
summary judgment proceedings, not every defence raised by a defendant
will succeed in defeating a plaintiff's claim. What the defendant
must do is to raise a bona
fide
defence or a plausible case with sufficient clarity and completeness
to enable the court to determine whether the affidavit discloses a
bona
fide
defence. The defendant must allege facts which, if established, would
enable him to succeed. If the defence is averred in a manner which
appears, in all circumstances, needlessly bold, vague or sketchy,
that will constitute material for the court to consider in relation
to the requirement of bona
fides.
The defendant must take the court into his confidence and provide
sufficient information to enable the court to assess his defence. He
must not contend himself with vague generalities and conclusory
allegations not substantiated by solid facts.”
The
Supreme Court further held at p 452E that:
“Care
must be taken, in a suit for ejectment, not to elevate every alleged
dispute of fact into a real issue which necessitates the taking of
oral evidence, for to do so might well encourage a lease against whom
ejectment is sought to raise fictitious issues of fact thereby
delaying the resolution of the matter to the detriment of the
lessor.”
See
also Hales
v Doverick Investments (Pvt) Ltd
1998 (92) ZLR 235 (H)…,.
In
casu,
in order to assess whether or not the defendant has a bona
fide
defence, it is necessary to examine more closely the grounds of
opposition to the application.
(i)
Firstly, the respondent argued that the application for summary
judgment is stale in that it was not raised “summarily”.
This
argument is without merit, in my view, in that the primary rule on
when a summary judgment application can properly be made is Rule
64(1) of the Court's rules. It provides as follows:
“Where
the defendant has entered appearance to a summons, the plaintiff may,
at
any time before the pre-trial conference is held,
make a court application in terms of this rule for the court to enter
summary judgment for what is claimed in the summons and costs.”…,.
In
casu,
the respondent's contention that there has been inordinate delay is
misplaced as the application was made within the time limit
stipulated in Rule
64(1) supra.
(ii)
Secondly, the respondent argued that the cause of action has not been
verified because of the variance in figures in the summons and
founding affidavit.
Again,
this submission is without basis in that it overlooks the fact that
the applicant has relied on two distinct causes of action, namely;
(a)
Repudiation;
and
(b)
Breach.
In
respect of the latter, the respondent has not sought a specific
remedy in respect to the figures. In any case, from the nature of the
contract, the figures were always going to vary. The issue, in
respect of the breach, was that the respondent, by failing to pay
rent in terms of the lease agreement, was in breach. The extent of
the breach is insignificant in the circumstances.
(iii)
Thirdly, the respondent submitted that the matter ought to have been
referred to arbitration in terms of the arbitration clause in the
lease agreement.
In
Recoy
Investments (Pvt) Ltd v Tarion (Pvt) Ltd
2011 (2) ZLR 65 (H), it was held…, that:
“In
terms of Article
8 of the schedule to the Arbitration Act, which is clear and admits
of no ambiguity, the court has the jurisdiction to hear the matter
where none of the parties has applied for a stay of the proceedings
and a consequential referral to arbitration. A party wishing to have
the matter decided by arbitration is obliged to set the terms of the
dispute. An arbitration process cannot be set in motion in the
absence of a dispute. Before reference to arbitration, there must
therefore exist a dispute which is capable of formulation prior to
the appointment of an arbitrator. In the absence of a dispute, an
arbitrator cannot be appointed and therefore can be no reference to
arbitration…,. The respondent did not allege that there was a
dispute and had not applied for a stay of proceedings. The court
accordingly had jurisdiction.”
See
also Cargill
Zimbabwe v Culvenham Trading (Pvt) Ltd
2006 (1) ZLR 381 (H).
By
parity of reasoning, the respondent in
casu
did not frame a dispute for referral to arbitration and did not apply
for stay of action proceedings under HC39/15. Consequently, nothing
turns on the arbitration clause in the lease agreement. In any case,
the relief sought by the applicant, being a declaratory order, can
only be issued by this court in the exercise of its power under
section 14 of the High Court Act [Chapter 7:06].
(iv)
Fourthly, the applicant's contention is that the respondent's
refusal to sign a written lease agreement renewing the lease entered
into on 20th
October 2004, which expired on 30th
November 2013, constitutes repudiation by the respondent of the
landlord-and-tenant relationship between the parties.
The
basis of the applicant's contention is that from July 2013 it
changed its real estate agents from Knight Frank to John Pocock and
Company (Pvt) Ltd. The agreement entered into by the parties, on the
20th
of October 2004, was prepared by Knight Frank. It became imperative
that John Pocock and Company (Pvt) Ltd assume their mandate to
administer the applicant's property at issue in terms of a written
agreement prepared by them and not by Knight Frank. Thus, the expiry
of the lease on the 30th
of November 2013 was the rightful opportunity to replace the Knight
Frank lease agreement with one prepared by John Pocock & Co (Pvt)
Ltd.
The
respondent admitted that it refused to sign the lease but denied that
this is tantamount to repudiation. It contends that once a written
lease agreement expires, the tenant becomes a statutory tenant and
the lease is automatically extended by operation of the law on the
same terms and conditions as those which obtained under the expired
lease.
It
appears the respondent's contention is not applicable in
casu
because of the provisions of clause 3.5 of the lease agreement signed
by the parties. It provides:
“If
the tenant fails to give notice, as provided in this clause, this
lease will continue from the termination date of the lease period (or
the renewal period) on the same terms and conditions but subject to
three calendar months written notice of termination by either
party…,.”
In
view of the above, there was no justifiable reason for the
respondent's refusal to sign a renewal lease prepared by John
Pocock and Company in November 2013. I take the view that such
refusal constitutes a repudiation of the landlord-and-tenant
contractual relationship between the parties. In light of that, the
applicant is entitled to accept the respondent's aforesaid
repudiation.
(v)
Waiver of the right to cancel was the fifth ground raised by the
respondent.
The
argument is that by accepting the payment of overdue rentals outside
the stipulated time, the applicant waived its right to rely on the
failure to pay rentals on time as a ground for termination of the
lease.
This
contention is devoid of merit in light of the carefully and
extensively worded provisions of sub-clause 40.1 of the lease
agreement which reads as follows:
“The
failure by the landlord to exercise any right shall
not be deemed to be a waiver of any of his rights in terms of this
agreement
and the acceptance
of any overdue rent shall not constitute a waiver of any right which
the landlord has to cancel this lease arising out of such breach or
late payment of rent.”…,.
The
net effect of non-variation and non-waiver clauses is to negative the
raising of such defences.
In
Agricultural
Finance Corporation v Pocock
1986 (2) ZLR 229 (SC), the court had occasion to consider the
combined effect of a non-variation and non-waiver clauses in a lease
agreement which are similarly worded to sub-clauses 40.1 and 40.2 of
the lease in
casu.
The court's decision is captured in the head note which reads as
follows:
“A
non-variation clause in a contract entrenches the requirement that
any variation has to be in writing but does not prevent a party for
whose it is inserted from waiving the requirement.
A
non-waiver clause negatives any raising of a waiver or any estoppels
in that it amounts to notice given in advance acknowledged by the
other party, that conduct which might otherwise be a waiver or give
use to an estoppels may not be taken to be such conduct.
The
combine effect the two clauses is that two parties to a written
agreement containing carefully and extensively worded non-variation
and non-waiver clauses cannot enter an enforceable oral agreement
departing from the written terms since to the extent it is a
variation of the contract it is precluded by the non-variation
clause whereas
if it be said to be a waiver or conduct giving rise to an estoppels
then the non-waiver clause provides the complete answer to the
point.”…,.
In
casu,
the respondent's contention that the applicant waived its right to
cancel the lease on the ground of breach of sub-clause 8.1 thereof is
not a bona
fide
defence. The non-waiver clause in the lease agreement (sub-clause
40.1) provides the complete answer to the respondent's contention
and the applicant's claim for cancellation of the lease agreement
on grounds of breach by the respondent is, in my view, unassailable.
(vi)
Finally, the respondent denied breaching sub-clauses 20.1 and 20.5 of
the lease agreement. These two sub-clauses provide as follows;
“20.1
The tenant shall keep and maintain the Leased Premises and carry on
his business therein in compliance with all laws and for regulation
made from time to time.
20.5
The tenant agrees to abide and comply with all such Government or
Municipal Regulations or Bye-Laws as may relate from time to time to
the use of the Leased Premises. In the event of the Tenant failing so
to carry out any obligation imposed by any such Regulations and
Bye-laws…,
and the Landlord may treat any breach of such Regulations and By-laws
as a breach of the Agreement.”
In
order to prove the breach, the applicant attached annexure “D” to
the founding affidavit which is a copy of the respondent's
“Restaurant Special Liquor Licence”. Also attached is annexure
“E” a letter from the Bulawayo City Council dated 25 March
confirming at the respondent's licence for the leased premises is
for a restaurant special. Further, in paragraph 4(b)(vi), 10 and 11
of the respondent's plea attached to the founding affidavit as
annexure “B”, it is clear from the averments therein that the
respondent, in breach of the terms of the Restaurant Special Liquor
Licence, operated as a pub and night club.
In
light of the above, it cannot be a bona
fide
defence to deny such a glaring breach.
The
applicant, as the innocent party, is entitled, in terms of clause
33.1 as read with sub-clauses 33.1.1 and 33.2.3 of the lease
agreement, to exercise its right to seek cancellation of the lease
agreement.
In
view of the above, the applicant's claims for cancellation of the
lease on the basis of repudiation by the respondent, or,
alternatively, on the basis of breach of the lease, are unassailable
and the respondent has no bona
fide
defence thereto….,.
In
the result, it is ordered that:
1.
Summary judgment be and is hereby granted to the applicant.
2.
A declaratur be and is hereby issued that the lease agreement between
the parties, in respect of Shop 24/25 Ascot Shopping Centre, situate
on Stand 16440, Bulawayo, be and is hereby terminated by reason of
the respondent's repudiation.
3.
Alternatively, it is ordered that the lease agreement between the
parties be and is hereby terminated forthwith in terms of clause
33.1.1 and 33.1.3 thereof by reason of the respondent's breach of
clause 8.1; 20.1 and 20.5 of the lease agreement.
4.
The respondent, and all those claiming occupation through it, be and
are hereby ordered to vacate Shop number 24/25 Ascot Shopping Centre,
situate on Stand 16440, Bulawayo within 14 days of this order failure
of which the Sheriff of this court be and is hereby ordered and
empowered to forcibly evict the defendant.
