CHATUKUTA J: The applicant
filed an urgent chamber application and sought the following relief:
“TERMS OF FINAL ORDER SOUGHT
1. That the reallocation of stand number 32,
Muguta Shopping Centre, Epworth to the second, third, fourth respondent or any
other person be and is hereby reversed.
2. That the first respondent is ordered
to expedite the process of approving the applicant's building plans.
3. Alternatively that first respondent
allocates the applicant another commercial stand of the same size.
4. That first applicant to pay costs of
this application on the legal practitioner –client scale.
INTERIM RELIEF GRANTED
Pending the determination of this
matter the Applicant is granted the following relief:
1. That all respondents are ordered to stop any
further developments at number 32 Muguta, Shopping Centre, Epworth and first
respondent is ordered to ensure that no other person will do any work at the
stand.”
The
background to the application is that in September 2006, the applicant entered
into an agreement with the first respondent for the lease of a certain property
known as stand number 32, Muguta Shopping Centre, Epworth (the property). The lease agreement was valid for four years,
from August 2006 up to September 2010. The applicant was required under clause
5 of the agreement to commence constructing a building not later than twelve
months after the commencement of the agreement.
Clause 20 of the lease agreement provided for an option to purchase the
property upon completion of the building.
However, in terms of clause 17, the applicant could exercise the option
before the completion of the building if he satisfied the first respondent that
he had been granted a loan secured by a mortgage bond over the property, had
entered a contract for the construction of the building and had paid the full
purchase price of the property.
The
applicant contended that on 12 December 2007 he submitted, in compliance with
the lease agreement, building plans for the development of the property. The plans had not been approved at the time
of hearing this application despite numerous inquiries with the first
respondent. He had also paid the full
purchase price of the property.
On
18 April 2008 he was surprised to learn that someone, whom he later discovered
to be the third respondent, had commenced developing the property. The third respondent was in the process of
digging a foundation on the property. Upon inquiry with the first respondent's
offices, he was advised that the first responded had summarily terminated the
lease agreement and had repossessed the property because he had failed to commence
developing it within the time specified in the agreement. The property had then
been subdivided and allocated to the second, third and fourth respondents. On
30 April 2009, the applicant obtained an interim order restraining the third
respondent from continuing with his developments pending the determination of
this matter.
Only
the third respondent opposed the application.
He submitted that the first respondent had properly terminated the lease
agreement with the applicant because applicant was in breach of the lease
agreement by not commencing construction within the time stipulated in the
lease agreement. He further contended that at the time he entered into the
lease agreement and purchased his subdivision of the property, he was not aware
of the applicant's lease agreement. He
was therefore an innocent purchaser and therefore the applicant was not
entitled to the relief he sought. He had commenced constructing a building in terms
of his lease agreement. The granting of the order sought by the applicant would
therefore prejudice him.
It
appears to me that there are three issues for determination. The first issue is whether or not the first
respondent acted fairly and therefore lawfully in summarily cancelling the
lease agreement without affording the applicant a chance to respond to the
allegations that he was in breach of the agreement. The applicant submitted
that the first respondent was obliged at law to give him an opportunity to
respond to the allegation.
Although
the first respondent did not file any opposing papers the third respondent
advanced the argument that the applicant was in breach of the lease agreement
and hence the first respondent had been entitled to cancel the agreement. In
fact he went to great lengths in arguing the point.
The
rules of natural justice as embodied in the audi
alteram partem rule require that a person be given reasonable notice to
make representations where another takes action which adversely affects his/her
interests or rights. The rule as espoused
in the Administrative Justice Act [Chapter
10:28] (the Act) require that an administrative authority such as the first
respondent, with the responsibility to take an administrative action which may
adversely affect the rights or interest of any person, to give that person an
opportunity to make adequate representations. (See U-Tow Trailers (Private Limited v City of Harare & Anor HH 103/09).
It
appears that the first respondent did not give the applicant the opportunity to
make any representations before it unilaterally and summarily terminated the
lease agreement. The first respondent did not oppose the application. Therefore the applicant's averments and
contentions were not disputed. The third
respondent could not advance the argument that the cancellation of the
applicant's lease agreement was justified because he was not privy to the
agreement between the applicant and the first respondent. In the absence of any
opposition from the first respondent, it is my view that first respondent did
not act fairly by not giving the applicant the opportunity to make
representations. The lease agreement
between the applicant and the first respondent therefore still subsists.
This
brings me to the second issue for determination which is whether or not the third
respondent is an innocent purchaser. The
third respondent pleaded that he is an innocent purchaser and is therefore entitled
to remain on the property. The applicant
submitted that the respondent was not an innocent purchaser. He alleged that the third respondent had
fraudulently entered into the agreement in order to defeat his claim over the
property.
Both
parties appear to have been operating under the same misapprehension that upon
paying the purchase price stipulated in their respective agreements they had
concluded valid sale agreements with the first respondent. I do not believe that they had. Clause 17 of the agreements, which are identical,
provided that in addition to the payment of the purchase price, they were
required to provide the first respondent with the proof that they had
respectively entered into contracts for the development of the property. None of them produced the proof that they had
entered into such contracts, neither did they plead that they had complied with
all the terms of the lease agreements. The parties, and particularly the third
respondent, appear in their pleadings to have been aware that the relationship
between them and the first respondent was that of a lessee and a lessor. The third respondent used the terms “bona fide purchaser” and “bona fide lessee” interchangeably.
In
any event, there is a distinction between the lease agreements the applicant
and the third respondent entered with the first respondent respectively. The
agreements were primarily lease agreements with an option to purchase the
property. The agreements were not agreements of sale. Therefore the question of an innocent purchaser
does not arise. I have therefore not
considered it necessary to determine the allegations of fraud raised by the
applicant.
It
therefore appears to me that both the applicant and the third respondent were
lessees. In view of my finding that the
lease between the applicant and the first respondent still subsists, I do not
believe that the lease between first respondent and the third respondent can
stand. The first respondent could not
have been able to lease the same property to the third respondent. Therefore no rights flowed from the third
respondent's lease.
The last issue for
determination as raised by the applicant is whether or not the first respondent
falls under the ambit of section 39 of the Regional, Town and Country Planning
Act, [Chapter 29:12] (the Act). Section
39(1)(a) prohibits the subdivision of any property without a permit from local
planning authority.
The applicant contended that the
first respondent allocated the property to the second to fourth respondents in
breach of section 39 (1)(a) as read with section 40 of the Act in that there was
no record that a permit had been issued for the subdivision of the property. The applicant contended that the respondents
had not produced such a permit to show that the subdivision of the property had
been approved entitling the first respondent to allocate the subdivisions to
the second, third and fourth respondents. The applicant however, overlooked the
provision of section 39 (2). Section
39(2) provides as follows :
“(2) Subsection (1) shall not apply to—
(a) land within the area under the jurisdiction
of a municipal council or town council which is owned by the municipality or
town concerned; or
(b) land within a
local government area administered and controlled by a local authority which is
owned by that local authority or by the State;”
The property in
issue belongs to or falls under the administration or control of the first respondent
who is a local authority. Therefore the first
respondent was not required to comply with the provisions of section 39 (1)(a) of
the Act.
Turning to the relief sought, it
appears that the draft order was not elegantly drafted. It is however clear
from the pleadings that the applicant was seeking the nullification of the
summary cancellation of the lease agreement with the first respondent. It will therefore be necessary for me to
first order the setting aside of the summary termination of the applicant's
lease. The other relief sought will
thereafter follow.
The
applicant is also, in my view, entitled to the expeditious processing of the
approval of his building plans. The lease agreement requires that he commences
constructing a building not later than twelve months after the commencement of
the agreement. The agreement commenced running from August 2007. The applicant
submitted his plan timeoulsy on 12 December 2007. Four years later the plan has not yet been
processed one way or the other. The third respondent's plan was processed and
approved on the very same day that it was submitted. The applicant therefore
has a legitimate expectation that the first respondent should expedite the
processing of his plan if he is to comply with the terms of the lease
agreement.
In
the result it is ordered that:
1.
The decision of the first respondent to summarily
cancel the applicant's lease agreement be and is hereby set aside.
2.
The allocation of stand number 32, Muguta Shopping
Centre, Epworth to the second, third, fourth respondents be and is hereby
reversed.
3.
The first respondent be and is hereby ordered to
expedite the consideration of the applicant's building plans.
4.
The first respondent be and is hereby ordered to pay
costs of this application.
Thondhlanga & Associates, applicant's legal practitioners
Sawyer & Mkushi, third respondent's legal practitioners
