This
is an appeal against the decision of the Provincial Magistrate sitting at
Harare Magistrates Court on the 30th of July 2009. The learned
magistrate granted an order terminating the lease agreement between the parties
and requiring the appellant to vacate the leased premises, failing which the
appellant would be evicted by the Messenger of Court.
The
appellant initially noted four grounds of appeal. However, at the hearing of
the appeal, counsel for the appellant abandoned two of these grounds, the first
relating to the absence of any notice cancelling the lease agreement and the
second to the supposed granting of leave to execute pending appeal.
Consequently, the two remaining grounds for determination in this appeal are as
follows -
That
the court a quo erred in finding -
(i)
That the lease agreement entitled the respondent to cancel the lease after the
breach complained of had been rectified; and
(ii)
That clause 18(c) of the Agreement entitled the respondent to accept
rectification and still proceed to cancel the Agreement.
Background and
Decision of Court Below
The
relevant facts for the purposes of this appeal are as follows -
On
the 3rd of June 2009 the respondent's lawyers wrote to the applicant
indicating that the appellant was in breach of clause 5 of the lease agreement
relating to the payment and computation of monthly rentals. In particular, it
was stated that the appellant had failed to pay rentals since January 2009 and
that “unless we receive rentals within fourteen days our client will have no
option but to terminate this lease and to eject you from the premises.” Thereafter, on the 10th of July
2009 the respondent wrote to the appellant confirming that “you delivered the
outstanding rentals of $3,915=..., to Venturas & Samkange on the 8th
of June 2009”, and intimating that this was received without prejudice.
In
her ruling on the 29th of July 2009, the learned magistrate confined
herself to the late payment of rentals and did not address the other alleged
breaches referred to in the letter from the respondent's lawyers. She found
that the appellant had failed to pay rentals timeoulsy. Relying on clause 18(c)
of the lease agreement, she then proceeded to hold as follows -
“That
breach, even though it may have been rectified, is sufficient to cause the
lessor to elect to cancel the lease. The lease is hereby cancelled.”
Merits of Appeal
Before
turning to the lease agreement in casu, I should note that the case authorities
cited by counsel for the appellant do not provide any meaningful guidance in
this matter. The cases relied upon include Masukusa v Tafa 1978 RLR 167 (AD);
Agricultural Finance Corporation v Pocock 1986 (2) ZLR 229 (SC); Stracon
Development (Pvt) Ltd v Gruer 1990 (1) ZLR 354 (HC); and Parkview Properties
(Pvt) Ltd v Chimbwanda 1998 (1) ZLR 408 (H).
The
cases are essentially concerned with the acceptance of subsequent timeous
payments following previous late payments, or underpayments, of rent. They are,
therefore, not directly relevant to the issues at hand.
Clause
18 of the lease agreement between the parties stipulates the remedies of the
lessor in the event of any breach of the agreement by the lesse. Pursuant to
any such breach, the lessor is entitled either
–
“(a)
To forthwith terminate the lease and eject the lessee; or
(b)
Continue the lease and claim rental or remedy of any other breach; or
(c)
In either event, take or enforce any
other action or right for damages or otherwise arising from the lessee's
breach.”
In
the instant case, the appellant breached the lease agreement by not paying the
rentals due for several months. However, it then remedied that breach by making
payment to the respondent's lawyers, on the 8th of June 2009, within
the time limit of fourteen days given by them and in accordance with their
specific instructions.
In
essence, the respondent elected to proceed in terms of clause 18(b) of the Agreement
by accepting the late payment of rentals and continuing with the lease.
Having
regard to clause 18, taken as a whole, it is abundantly clear that clause 18(c)
is confined to any other action or right,
including damages, and does not include
the right to terminate the lease and evict the lessee in terms of clause 18(a).
Again,
the lessor can elect either to
terminate the lease under clause 18(a) or
continue with the lease under clause 18(b). On a proper construction of clause
18, the lessor cannot straddle both options, of formally demanding and
accepting the late payment of rent on the one hand, and then claiming the right
to terminate the lease on the other. In short, the lessor cannot purport to
exercise both options in respect of the same breach.
It
follows from the foregoing that the learned magistrate below erred in holding
that although the respondent had rectified its breach of clause 5 of the
Agreement, as was specifically required by the respondent's lawyers, that
breach was sufficient to justify the cancellation of the lease agreement.
The appeal accordingly succeeds with costs.
