CHATUKUTA J: This is an application
for leave to execute the judgment granted in case No. HH 103/09 pending an
appeal noted by the 2nd respondent against the judgment.
The background to the application is
that in December 1994 the applicant and the 1st respondent entered
into a lease agreement in respect of certain premises situate at number 9 Market Street,
Eastlea, Harare
(the premises). The lease agreement was
renewable from time to time and was due to expire on 30 March 2010 by effluxion
of time.
In April 2008, the applicant and the
2nd respondent entered into a joint venture to build trailers and
panel beat motor vehicles. The 2nd
respondent moved onto the premises pursuant to this arrangement. The joint
venture however failed. Despite the
failure of the joint venture, the 2nd respondent remained on the
premises.
In January 2009, the 1st
respondent summarily terminated the lease agreement on the basis that the
applicant had sub-leased the premises to the 2nd respondent in
breach of lease agreement. It proceeded
to lease the premises to the 2nd respondent. The applicant successfully instituted
proceedings in case No. HH 103/09 for an order nullifying the termination of the
lease agreement and the ejectment of the 2nd respondent's from the
premises. The court ruled that the 2nd
respondent had not established a defence to the applicant's claim for
ejectment. On 29 October 2009, the 2nd
respondent appealed against the decision hence the present application for
leave to execute pending the appeal.
In determining an application for
leave to execute pending appeal, the court must consider:
(a) the prejudice to be suffered by either of
the parties in the event of the success or failure of the application;
(b) the prospects of success of the 2nd
respondent on appeal; and
(c)
the balance
of convenience. (see South Cape
Corporation v Engineering Management Services Pty Ltd 1977 (3) SA 534 (A)
and Net One Cellular (Pvt) Ltd v Net One
Employee & Anor 2005 (1) ZLR 275
281 B-D)
The applicant contended that it is
likely to suffer irreparable harm if leave is not granted in that it had been
operating from the premises since 1994 and would lose its customers and that
its business would be adversely affected by the continued stay of the 2nd
respondent on the premises. It still has its property on the premises
and had been denied access to the same by the 2nd respondent. The 2nd respondent had not offered
a valid defence to the claim of ejectment nor had it filed a
counter-application asserting its rights under a purported lease agreement
between the two. It further contended
that the appeal by the 2nd
respondent is frivolous and vexatious having been noted without a bona fide intent to seek and reverse the
judgment but with the intention to gain time and harass the applicant.
On
the other hand, the 2nd respondent contended that it was likely to
suffer irreparable harm if the order for leave to execute pending appeal was
granted in that it had been in occupation since 2008. It had also established a successful business
on the premises. Its business would be
equally prejudiced if it is ejected from the premises. The applicant was unlikely to suffer any harm
as it had no been in occupation of the premises during that period. It further contended that the main ground of
appeal against the judgment in HH 103/09 was that it had proffered a defence to
the applicant's claim for ejectment which defence was improperly discounted by
the court. It claimed that upon the
failure of the joint venture the parties entered into a lease agreement. The lease agreement had not been properly
terminated and therefore it was entitled to remain in occupation pursuant to
that lease agreement. It contended that
if it were ejected it would not be able to be restored to the status qou ante and therefore the balance of
convenience weighed in its favour. Its
appeal did not lack bona fides in
that the court should not have discounted its defence.
It appears to me that it is not in
issue that the applicant is likely to suffer prejudice if leave to execute is not
granted. The applicant has been operating
from the premises from 1994 and has established a name for itself. The 2nd respondent is also likely
to suffer prejudice if leave to execute is granted. It had also started
establishing a name for itself, though over a shorter period having been in
occupation since 2008. It however,
appears to me that the applicant will suffer greater harm given that it has
been in occupation for a longer period than the 2nd respondent.
Considering that both parties are
likely to suffer harm, it appears that the determining factor is whether or not
the 2nd respondent has any prospects of success on appeal. The 2nd respondent does not appear
to have any prospects of success. The 2nd
respondent was relying on the lease agreement with the 1st
respondent as a basis for its present occupation of the premises. Following the setting aside of the
termination of the agreement between the applicant and the 1st
respondent by the court, the 2nd respondent can no longer rely on the
lease agreement for its continued occupation of the premises.
It appears it cannot also rely on the
purported sublease with the applicant.
The sublease is clearly in breach of the agreement between the applicant
and the 1st respondent. The
lease agreement does not allow the applicant to sublease the property without
the 1st respondent's authority.
Such authority does not appear to have been sought or granted. The 2nd respondent did not dispute
in its pleadings in case No. HH 103/09 that the sublease was invalid. In fact it argued that its lease agreement with
the 1st respondent was valid because the 2nd respondent
had subleased the premises to it in breach of the lease agreement with the 1st
respondent. The applicant's contention
that it is entitled to remain in occupation on the basis of an invalid lease is
therefore not sustainable. The court, in
case No. HH 103/09, ruled that the 2nd respondent did not have a
legal entitlement to remain on the premises and it appears on the basis that
the lease agreement with the applicant was invalid. It is therefore not correct for the 2nd
respondent to contend that the court did not consider its defence to the
applicant's claim for ejectment. The
court considered the defence and discounted it before proceeding to determine
whether or not the termination of the agreement between the applicant and the 1st
respondent was valid.
In view of the observations that I
have made above, it seems to me that the balance of convenience weighs in
favour of the applicant. The applicant
has been in occupation for a period of seventeen years. It will certainly lose the goodwill attached
to its operations on the premises if the 2nd respondent continues to
remain in occupation. The second
respondent will in fact be building its own goodwill if it remains in
occupation to the detriment of the applicant.
The 2nd respondent does not have any prospects of success on
appeal because it does not have any legal entitlement to remain in occupation
of the premises. It appears that the
appeal was therefore noted merely to delay the inevitable. Any further delays in the execution of the
judgment would in my view prejudice the applicant. It is therefore equitable in the
circumstances that the applicant must succeed.
In the result, it is ordered that:
- The applicant be and is hereby granted leave to
execute the judgment of this court granted on 21 October 2009 in case HH
103/09 pending the appeal noted by the 2nd respondent against
the judgment.
- The 2nd respondent be and is hereby
ordered to pay the costs of this application.
Muzangaza, Mandaza & Tomana, applicant's legal practitioners
Messrs Magwaliba & Kwirira, 2nd respondent's legal
practitioners
