MAKARAU JP: The applicant
and the first respondent are landlord and tenant respectively. Their
relationship commenced when they concluded a written agreement in
respect of certain commercial premises situate at Throgmorton House,
Samora Machel Avenue, in Harare. The agreement was for a period of
one year, commencing on 1 July 2006 and terminating on 30 June 2007.
The second and third defendants as directors of the first respondent
bound themselves as co–principal debtors under the lease agreement.
In July 2009, the applicant filed this application seeking an order
evicting the respondents from the rented premises. In its founding
affidavit it averred that the respondents had breached the written
lease agreement by failing to pay rentals and operating costs for the
premises since January 2009. The amount of arrear rentals and
outstanding operating costs was also prayed for in the order.
It is pertinent in my view that at this stage, before I detail the
opposition that was filed by the respondents, I comment on the manner
in which the applicant proceeded to frame its cause of action against
the respondents.
The applicant has alleged that the respondents are in breach of the
written lease agreement of 2006.
It is common cause that the written lease agreement between the
parties terminated by the effluxion of time in June 2007. As at the
time of the filing of the application, it was no longer binding upon
the parties and could thus not found a cause of action for the
applicant.
Its terms and conditions may have continued to afford the respondents
protection against eviction under the operation of the provisions of
the Commercial Rent regulations S.I. 276/83(“the Regulations”),
under what is commonly referred to as statutory tenancy.
This is however not part of the averments made by the applicant in
its founding affidavit.
In my view, statutory tenancy is
not an issue that the court should take judicial notice of mero
motu. It must be
specifically pleaded as it brings into play different considerations
regarding the respective rights of the parties. It is a separate
cause of action, apart from the terminated lease agreement.
I shall avert to the provisions of the regulations in detail below.
At this stage, the point I am making is that the applicant could not
validly seek to rely on an agreement that had terminated without
first laying a legal basis for its revival so to say. As I shall show
later, this may have fatally compromised the applicant's quest to
recover its property from the tenant.
In opposing the application, the respondents argued that the written
agreement between the parties provided for payment of rent in local
currency and when that currency lost favour with traders and
generally, the applicant sought to impose a rental in United States
currency with the parties failing to reach agreement on the amount
payable.
Again I pause to make the point that the respondents were clearly
relying on the protection against eviction afforded them by the
Commercial Rent Regulations but did not specifically raise that
defence in their papers.
In moving for the granting of the order sought in the draft, the
applicant urged me to find that the parties had a written lease
agreement, that in terms of that lease agreement, the first
respondent was obliged to pay rentals and operating costs monthly and
in advance and that in breach of that agreement, the first respondent
failed to pay any rent or operating costs from January 2009 to the
date of the filing of the application.
As indicated above, the applicant's argument is flawed in one or
two respects and does not flow from the facts that are common cause.
(i) Firstly, the written lease
agreement terminated in July 2007. As from that date, the first
respondent became a statutory tenant and the expired lease agreement
can no longer found a cause of action between the parties.
The first respondent in my view, can now only be competently evicted
in terms of the provisions of the rent regulations.
It is common cause that the
applicant is not proceeding in terms of the rent regulations but is
proceeding ex
contractu, alleging
breach of the written agreement.
(ii) Secondly, and assuming that
the written lease agreement between the parties is still subsisting,
then, in that event, the first respondent's obligation is to pay
rentals monthly in advance in local currency. The obligation to pay
rentals monthly in advance must have been imposed by some other
agreement, which has not been pleaded.
The applicant has urged me to find that the agreement to levy rentals
in foreign currency and in the sum of US$700-00 per month was reached
between the parties at a meeting that was held on 12 May 2009.
I cannot agree.
It is common cause that on 8 May 2009, the applicant addressed a
letter of demand to the first respondent, claiming payment of the sum
of US$4,497.75 as arrear rentals and the sum of US$1,772,81 as unpaid
operating costs.
The parties met on 12 May 2009 to discuss the demand.
On the same day of the meeting, the first respondent responded to the
letter of demand in writing, acknowledging the letter of demand and
advising that at the meeting held with the applicant's
representatives, it had been agreed that the first respondent would
pay one thousand dollars towards the arrear rentals and the balance
over two or three weeks.
It is worth noting that the meeting of 12 May 2009 was in response to
the applicant's letter of demand. By then, the amount of the arrear
rentals had already been calculated. In other words, the breach had
already occurred.
It appears to me that by January 2009 the parties had not yet agreed
on the rental payable for the premises.
As detailed above, the applicant seeks to rely on the alleged
agreement concluded on 12 May 2009, some five months after the
alleged breach.
If the parties had greed to the rentals in January 2009, why would
they need to meet over the same issue in May?
Similarly, if the parties had not reached agreement on the rentals in
January 2009, on what basis can they be held to have breached the
contract before the parties had reached agreement on it?
These are questions that will go begging for an answer as in my view,
the applicant has placed its cart before the horse. It has proved the
breach before proving the agreement breached!
Assuming that I have erred in concluding that the applicant has
placed its card before horse and that by application of some other
legal principle, not argued before me, the applicant could prove that
the agreement reached on 12 May 2009 could apply retrospectively,
then the denial of the agreement by the respondent would raise a
material dispute incapable of resolution on the basis of the papers
filed of record.
I have considered whether I can convert the proceedings before me
into an action by referring the matter to trial.
In view of the reservations that I have regarding the cause of action
that the applicant has pleaded in this matter, I am of the view that
such exercise of discretion will not have the effect of saving to
expedite the resolution of this matter or of saving costs.
Before I dispose of this matter, it is important in my view that I
remark on the submissions made on behalf of the respondents.
They have argued that the first respondent is a statutory tenant and
is protected against eviction. In this regard, they have relied on
the provisions of section 22(2) of the Regulations which provide as
follows:
“(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.”
While the section specifically limits the right of landlords to
recover their properties where leases have terminated by expiration
for the reason given in the regulations, it simultaneously creates
the right in favour of the tenant to remain in occupation of the
leased premises provided the tenant pays the rent that is due in
terms of the lease within seven days of the due date and performs all
the other conditions of the lease.
The provisions of the section seek to protect the genuine tenant who
is not in breach of any of the terms of the lease agreement from
being at the mercy of a landlord who may wish to let out the premises
to another tenant.
The issue that exercises my mind in this application is whether the
statutory tenancy remains viable where the rentals payable were fixed
in local currency, in view of the lack of value now attaching to that
currency.
It is trite that for a statutory tenancy to be created and thus earn
protection, the tenant has to continue to pay the rent due within
seven days of due date and perform the other conditions of the lease.
The practical difficulty that arises is that where the tenant's
obligation is to pay in local currency, how does such a tenant remain
protected when the rentals are neither payable nor constitute a
valuable exchange for the right to use the landlord's tenant.
While it is not necessary for me to make a specific finding on this
issue, I would venture to suggest that in circumstances similar to
the facts before me, where the obligation in terms of the written
agreement of sale was in local currency, the protection afforded by
the statutory instrument becomes doubtful or of limited value as
payments for rentals in local currency are ludicrous and may in some
instances be impossible to effect.
Finally, I wish to refer to the
case of Negowac
Services (Private) Limited v 3D Holdings (Private) Limited and Others
HH144/09 in which
MTSHIYA J was faced with facts similar to the ones before me.
In that case, in upholding the landlord's right to evict the
tenant, the learned judge was of the view that the obligation of the
tenant to continue paying rent on due date imposed by the Regulations
in turn imposes an obligation on statutory tenants to pay “reasonable
rentals” in respect of the property leased where the parties fail
to reach agreement on the amount of rentals payable.
Mr Nleya
for the applicant urged me to follow the decision in that case.
Again it is not necessary in my view that I distinguish this case
from the application before me. It is my finding above that the
applicant has not pleaded statutory tenancy as its cause of action.
It has instead alleged breach of a specific written agreement and I
have disposed of the matter on that basis.
Had the applicant approached the
court on an action in rem,
seeking to recover its property from the tenant on the basis that the
parties had failed to reach agreement on a material term of the
lease, I would have found the reasoning by MTSHIYA J very attractive
in the general sense that the sine
qua non
for enjoying the use of the property of another is the payment of
rent and one cannot hope to have that enjoyment for nothing.
In the absence of proof of
payment of anything, a tenant would have no defence in my view, to
resist the enforcement of the right of an owner to recover their
property. As PATEL J observes, a tenant is not entitled to withhold
rentals except in a few and very limited instances. (See Parkside
Holdings (Private) Limited v Londoner Sports Bar
HH66/05).
As I indicated above, the applicant has approached court alleging
breach of a specific term of the lease agreement. It is my finding
that the averred lease agreement is no longer binding on the parties
and even if it were, it cast an obligation upon the first respondent
in a currency that is now redundant.
On the basis of the foregoing, it is my view that the applicant has
pleaded a cause of action that is not competent and cannot therefore
succeed.
In the result, I make the following order:
1. The application is dismissed.
2. The applicant shall pay the
respondents' costs.
Gill Godlonton & Gerrans, applicant's legal
practitioners
Sinyoro & Partners, respondents' legal practitioners
