MTSHIYA J: The applicant is the owner of premises
known as 11 Stourbridge Road,
Donnington, Bulawayo
(the premises). It is common cause that in August 2004 the applicant appointed
the respondent as its agent for the distribution or sale of its products in Matabeleland. In order to facilitate that arrangement the
applicant, through a signed agreement dated 31 August 2004, leased its premises
to the respondent. The initial period of the lease was to run from 1st
September 2004 to 30 November 2004. The lease agreement was subject to
extension upon agreement between the parties. The lease was silent on the
notice period for termination.
The
agency agreement (i.e. distributorship agreement) which prompted the lease
agreement was of no fixed duration.
It
is also common cause that in a separate arrangement the parties had agreed that
depending on agreement on a purchase price the respondent would buy the
premises. As revealed in the papers before the court, the parties were never
able to agree a purchase price for the premises. The premises therefore
remained the property of the applicant.
On
10 April 2008 the applicant gave respondent three months notice to terminate
both the lease agreement and the distributorship agreements. The respondent, in
terms of the notice, was to vacate the premises at the end of the three months
notice. This was understood by both parties to be 31 July 2008. The reason
for the termination of both agreements was that the applicant was dissatisfied
with the respondent's performance on the distributorship agreement. The
relevant part of the notice read as
follows:-
“We note with concern the decline in
your performance over the given period. As you are aware as a distributor we
expert a contribution of at least 15% of our monthly turnover.
We are also concerned by market
information that one of your customers has received imported cable via DSK
Wholesalers in conflict with our exclusive arrangement with High Peak.
On the basis of the above scenario,
we are considering other plans of distribution in the Bulawayo
and Southern area of Zimbabwe
as we realize there is adequate potential which is evidently under siege from
imports from Botswana and South Africa.
We are therefore giving you three months notice to rescind your distributorship
and vacate 11 Stourbridge in, Donnington so that we can resuscitate our CAFCA
operations”.
In
response to the above notice the respondent, through Kevin Ellerman, requested
for an extension in the following terms:-
“I am in receipt of your e-mail re
vacation of the premises at 11 Stourbridge Road at the end of July I have taken
it up with Worthwhile and we would like to request that you permit us to remain
in the premises until after a written presentation on Worthwhile's part is
submitted to the CAFCA Board sitting in August as per Rob's suggestion”.
On
23 September 2008, the applicant, through its chairman responded to the request
for extension as follows:
“We acknowledge receipt of your
submission made directly to the Board in appeal to the Executive's decision to
terminate both the CAFCA distributorship and the lease of 11 Stourbridge Road property.
The Board studied and discussed in
detail the documents presented. It is with regret that we must advise that the
Board stands by and supports the decision taken by management.
On the distributorship the Board
notes that there is no disagreement on the facts and therefore the rationale
given by management to the Board previously to terminate still holds valid.
On the property, there is dispute as
to any authority given to either sell the property or allow the tenant to make
renovations at our risk or cost. We can find no approval given. In fact the
last paragraph of the attached lease agreement dated 31 August 2004 states,
“the property and effects within shall be returned to the landlord in the same
condition as at the start of the lease period”
As notice had previously been given,
we would like to request that you vacate the property by the end of October
2008 so that we may take vacant possession on Monday 3 November 2008”.
On
23 September 2008, the respondent again requested that the period to vacate the
premises be extended to the end of December 2008. The request was granted, with
the period to vacate the premises being extended to 5 January 2009. The
respondent did not, however, vacate the premises on 5 January 2009.
The
papers before me show that the matter was then referred to the respondent's legal
practitioners who, in the main, argued that the applicant was not entitled to
order the respondent to vacate the premises “until or unless the issue of the
sale to it of the property is rendered. The lease was to continue until the
premises had been sold to respondent”.
On
24 March 2009 the applicant filed this application seeking the following
order:-
“1. That respondent's lease from plaintiff of
11 Stourbridge Road,
Donnington,
Bulawayo is confirmed as terminated at 31
December 2008.
2.
That
respondent vacate the said premises within seven (7) days of service of this
order at 11 Stourbridge Road and failing compliance therewith that the Deputy
Sheriff evict from the said property the respondent and all those claiming a
right of occupation thereof through respondent.
3.
That
respondent pay the costs of this application.
4.
That
applicant shall be entitled in due course to bring an action against respondent
for holding over and any other damages applicant may have suffered in
consequence of the occupation of the property by respondent”.
The applicant submitted that it had given
reasonable notice for the termination of
the lease. It also argued that in
requesting for extensions the respondent acknowledged the existence of the
notice and indeed the fact that the lease was terminable on notice. Accordingly
due to the extensions the termination date became the 5th of January
2009.
The applicant further submitted that
the lease agreement, was based on the distributorship agreement. The
distributorship agreement was the basis for both the sale and lease agreements.
The distributorship agreement had terminated on 31 July 2008. The parties had
failed to agree on a purchase agreement for the property. There was therefore
no longer any basis for the lease agreement to continue. In reference to the
issue of sale, the applicant submitted that “a lease agreement which is
dependent for its duration on an event, which may never occur cannot be treated
as an indefinite lease but as a lease terminable on reasonable notice”. In the
circumstances, argued the applicant, three months notice was reasonable.
The
respondent submitted that the distributorship and lease agreements were to be
treated separately and that being the case the applicant could not rely on the
distributorship agreement to terminate the lease agreement. The respondent
argued that the applicant's notice of 10 April 2008 did not clearly state that
it was the applicant's intention to terminate the lease. Furthermore, it was
argued, the applicant had not disclosed whether or not the extensions of the period
within which to vacate the premises were consented to by the respondent. It was
argued that such extensions called for a fresh notice.
The papers before me and the
submissions by both parties confirm to me that:
(a)
There
were three agreements between the parties, namely the distributorship
agreement, the lease agreement and the sale agreement. The sale agreement was never reduced to a formal written agreement as acknowledged by the
applicant who, on 28 September 2004, stated, in part,
“then we can look
forward to drawing up the final purchase agreement to enable the formal hand
over of the premises this December 1, 2004”.
As already stated, there
was never any such final agreement because the parties failed to agree on the
purchase price for the premises.
(b)
Although
separate, the agreements, in my view constituted a package in the sense that
the applicant was saying: “In order for you (respondent) to carry out the
business of distributing my products in Matabeleland as agreed, I shall lease
to you 11 Stourbridge Road, Donnington, Bulawayo and in the event of us
agreeing on a purchase price, I shall sell the premises to you”. The sale of
the premises did not occur as indicated in (a) above.
(c)
The
challenge to the termination of the distributorship agreement did not succeed
and accordingly that agreement terminated on 31 July 2008. This is confirmed by
the applicant's letter of 23 September 2008 reproduced herein at page 3.
(d)
The
respondent acknowledged the three months notice of termination of both the
distributorship and lease agreement dated 10 April 2008. The respondent then
specifically requested for extensions of the period to vacate the premises. The
respondent did not then argue that the notice excluded the lease agreement.
Extensions were granted with the last one ending on 5 January 2009. The
respondent has however, refused to vacate the premises.
Given the above scenario, I am
inclined to ignore details relating to rentals and dwell on the issue of
whether or not a reasonable notice was given to the respondent to vacate the
premises. In so doing one would have to determine whether or not there was
indeed a notice given and if so, was the three months notice of 10 April 2008
reasonable and applicable to the lease agreement. In any case the respondent's
main argument is that there was never any notice to terminate the lease
agreement.
My
finding is that the notice of 10 April 2008 applied to the lease agreement dated
31 August 2004. In the last paragraph of the notice the applicant clearly
requested the respondent to vacate the premises after the three months notice. The
applicant wrote: “We are therefore giving you three months notice to rescind
your distributorship and vacate “Stourbridge in Donnington so that we can
resuscitate our CAFCA operations”. It is therefore clear to me that the
respondent acknowledged the notice and hence its specific requests for
extensions of the period to vacate the premises. The requests were not for the
extension of the distributorship agreement. The requests were for the extension
of the lease agreement. The respondent clearly understood that vacating the
premises meant the termination of the lease. I therefore agree with the
applicant's submission that there could be no lease without the right of
occupation. The respondent's argument that extensions killed the original
notice, is, in my view, misplaced. The extensions were anchored on an accepted
existing notice.
Also misplaced in the arguments of
the respondent is the notion that the lease agreement would remain in force
until the property was bought by the respondent. There is nothing in the papers
which supports that argument and there is also nothing in the papers which
suggests that the parties cannot agree on the purchase price outside the lease
agreement. The lease agreement itself envisaged termination and hence the last
paragraph which provides as follows:-
“It is understood by both parties
that upon completion of the lease period the property and effects within shall
be returned to the Landlord in the same condition as at the start of the lease
period”.
In
the circumstances, my finding is that the respondent was given reasonable
notice to terminate the lease and should therefore render vacant possession to
the applicant (See Kerr, Law and Lease,
2nd Edition, gages 31- 2). The notice was, in my view, in accordance
with our law in respect of a reasonable notice required for a statutory tenant.
The applicant has not claimed holding over damages.
I
therefore order as follows:-
1. That
respondent's lease from plaintiff of 11
Stourbridge Road, Donnington,
Bulawayo, is confirmed as terminated as at 5
January 2009.
2.
That
respondent vacate the said premises within seven (7) days of service of this
order at 11 Stourbridge Road Donnington, Bulawayo, and failing compliance
therewith that the Deputy Sheriff evict from the said premises the respondent
and all those claiming a right of occupation thereof through the respondent;
and
3.
That
respondent pays the costs of this application.
Coghlan Welsh &
Guest, applicant's
legal practitioners
Moyo
& Nyoni, respondent's legal
practitioners
