GARWE JA:
This is an appeal against the judgment of the High Court ordering the eviction
of the appellant and all those claiming rights through it, from premises known
as Lot 2, Manresa, Acturus Road, Harare and payment of holding over damages in
the sum of US$800.00 per month from 1 March 2009 to 31 August 2010 and in the
sum of US$1 575 per month from 1 September 2010 to the date of vacant
possession of the premises.
The background to this matter is as follows. The respondent and the
appellant entered into a lease agreement in respect of a property known as Lot
2, Manresa, Acturus Road, Harare in 1998. The lease agreement was for an
initial period of three years commencing 1 June 1998 but was to run for a
further seven years until 31 May 2008. After that date the appellant
remained in occupation and therefore became a statutory tenant. The appellant
remains in occupation to this date.
On 26 March 2010, the respondent issued summons out of the High Court seeking
an order for the eviction of the appellant and all those claiming through it
and holding over damages. The basis of the respondent's claim was that it
required the premises for its own use and alternatively that it had terminated
the lease owing to a number of breaches on the part of the appellant. The
breaches cited by the respondent were that the appellant had last paid rentals
in July 2007, that the appellant had erected a permanent structure on the
premises without the respondent's authority and relevant local authority
approval, that the appellant had sublet a portion of the premises without its
consent and lastly that the appellant had failed to maintain the premises in a
good state of repair.
In its plea before the High Court, the appellant disputed that it had breached
the agreement in any of the ways alleged by the respondent. In particular,
the appellant averred that it had attempted to pay rentals by cheque but on
three occasions the respondent refused to accept the cheques and returned
them. The last such cheque was for the sum of ZW$1 which the appellant
issued after the removal of several zeros from the Zimbabwe dollar. That
cheque was issued on 6 August 2008 and bore the inscription at the back “Rent
payment for 24 months”.
In its judgment, the court a quo found that although there was evidence
that the appellant had breached the agreement by sub-letting part of the
premises to one Munengwa, the respondent had failed to give the requisite
fourteen (14) days notice to the appellant to rectify the breach and
accordingly had not accrued the right to cancel the agreement. The court
also found that the claim by the respondent that the appellant had constructed
a permanent structure on the premises and that it had failed to keep the
premises in a state of repair had not been proved. The court further
found that since the quantum of the rental was not agreed, the appellant was
under obligation to pay what it considered to be fair rental for the premises
commensurate with the rentable market value of the premises. The court
concluded that the tender of ZW$1 was patently absurd and that therefore the
appellant was in clear breach of the obligation to pay rental from August
2008. Consequently the court a quo made the order that is the
subject of the appeal.
In its notice of appeal the appellant has attacked the judgment of the court a
quo on two bases. These are:
(a)
That the court a quo misdirected itself in concluding that the appellant
had lost its entitlement to the benefit of statutory tenancy with effect from
August 2008 because it had failed to tender a fair rental when there was clear
evidence that the respondent had refused to accept rentals from the appellant.
(b)
That the court a quo erred in concluding that the tender of ZW$1 was not
fair in the absence of evidence of what would have constituted fair rental,
regard being had to the fact that the rental previously paid of ZW$6 million
had been reduced to a fraction of a cent following the revaluation of the
Zimbabwe Dollar.
The respondent also filed a
cross appeal, not against the final order made, but against the findings by the
court a quo that the other breaches of the lease agreement had not been
proved and that the respondent had not shown it genuinely required the premises
for its own use.
At the hearing of the matter
before this Court, Mr Zhou, for the respondent, conceded that since the
cross appeal was not directed at the substantive order, the cross appeal was
not properly before the court and should be struck off. This concession
was made in the light of the decision of this Court in Chidyausiku v
Nyakabambo 1987(2) ZLR 119(S). Although the cross appeal is no longer
the subject of this appeal, it has in my view raised a fundamental question on
whether the decision in Chidyausiku v Nyakambambo (supra) is entirely
correct. I will revert to this aspect shortly.
In his submissions before this Court
Mr Uriri, for the appellant, argued that since the last rental to be
accepted had been Z$6 million, it was that amount that the appellant was obliged
to pay, irrespective of the effect of inflation. When the local currency
was revalued in June 2008 and several zeros removed from the Zimbabwe Dollar
the sum of Z$6 million was reduced to $0.06. The appellant had then
decided to pay rent for twenty four months and had accordingly tendered ZW$1.00
revalued. Since the parties were not agreed on the new rental payable,
the appellant had a duty to continue paying the last agreed rental. For
this proposition, Mr Uriri relied on the decision of the High Court in Negowac
Services (Pvt) Ltd v 3D Holdings (Pvt) Ltd HH-144-09. He further
argued that the obligation on the appellant was to pay the rent due and not
fair rent.
Mr Zhou on the other
hand submitted that since the parties were not agreed on the rental payable,
the appellant should have paid fair rental and a cheque payment of Z$1.00 was
not fair.
The real and perhaps only
issue for determination before this Court is the construction to be given to
the words “rent due” in s 30 of the Rent Regulations S.I. 32/07 and depending
on such construction whether the $1.00 tendered by the appellant in August 2008
constituted the rent due. Before attempting to make a determination of
the above issue, I feel obliged, as already indicated, to express my personal
view on the correctness or otherwise of the decision of this Court in Chidyausiku
v Nyakabambo. I confess that I do so without the benefit of argument
from both counsel.
Chidyausiku v Nyakabambo(supra)
is authority for the proposition that in order to be valid, a notice of appeal
must be directed to the whole or part of the order made by the court a quo
and not to its reasons for making the order in question. GUBBAY JA (as he
then was) remarked at p 124F-125A:
“... what this Court is being asked
to do is not to reverse the order of the learned judge but to cure the
procedural defects by either considering the merits of the application itself
or remitting the matter for the learned judge to do so. Once that is
done, the appellant will be content whatever the outcome should happen to
be. That this is the approach is evident from the wording of the
so-called prayer to the notice of appeal, which omits to seek an order that the
application brought in terms of Rule 18 be dismissed.”
I am prepared to accept that as a general rule, the above remarks correctly
reflect the law of this country. To the extent, however, that the
judgment suggests that this is a hard and fast rule I am inclined to
differ. There may well be cases, such as the present, where the slavish
adherence to the above principle would not only cause prejudice but would
result in a certain degree of absurdity. I revert to the facts of this
case to justify why I am of this opinion.
In the court a quo, the respondent approached the court seeking the
eviction of the appellant as well as holding over damages. It had several
causes of action. The main was that it required the premises for its own
use. In the alternative it alleged several breaches of the lease agreement.
These were that the appellant had, without authority, sublet a portion of the
leased premises, that the appellant had constructed a permanent structure
without authority, that the appellant had failed to maintain the premises in a
state of repair and lastly that the appellant had failed to pay the rental
due. It will be apparent from the above that each breach alleged by the
respondent constituted a separate cause of action which, if proved, would have
justified either singly or cumulatively, the eviction sought in the prayer.
The court a quo rejected the respondent's claim that it required the
premises for its own use. It also rejected all but one of the
respondent's claims that the appellant had breached the agreement. Having
accepted that the appellant had failed to pay the rent due the court then
ordered the eviction of the appellant as well as holding over damages.
However the appellant appealed to this Court against that order. It was
at this stage that the respondent had to make a difficult decision.
If the appeal filed by the respondent were to succeed, then the order of
eviction and holding over damages would fall away. Since the issue before
the Supreme Court would be only whether the court a quo was correct in holding
that the appellant had failed to pay the rent due, there would be no basis for
the respondent to attack the other findings by the court a quo, which
findings could also justify the order of eviction and payment of holding over
of damages, unless the respondent also cross appealed against those
findings. This is what the respondent, represented by Mr Zhou,
did. However faced with the decision of this Court in Chidyausiku v
Nyakambambo (supra) the respondent was forced to concede that the cross -
appeal did not comply with the law as it did not seek any relief on the
substantive order made. My understanding of the respondents' position was
that in the event the main appeal succeeded, this Court should revisit the
finding made by the court a quo in dismissing the other causes of action
and in the event that any one of them succeeded then the eviction and holding
over damages would stand.
Speaking for myself I find nothing wrong with such an approach and indeed it
seems to me that in a case such as this one there is no other
alternative. Hopefully this issue will come up for consideration by a
full court so that the principle can be revisited in order to ascertain whether
it still makes good law.
The only issue that falls for determination is whether the court a quo
was correct in determining that the tender of ZW$1 did not constitute tender of
the rent due. The place to start is s 30 of the Rent Regulations,
32/07. That section provides in relevant part:
“For the purpose of sub-section (2),
“rent due”, in relation to dwelling, means –
(a)
So long as an order fixing the rent for a dwelling is in force, the authorised
rent fixed by that order or
(b)
Rent agreed under the terms of the lease agreement.”
It is clear from the above
definition that the legislature had in mind two situations. These were
firstly where the rent was fixed in terms of an order by the Rent Board and
secondly where the rent is agreed in terms of the lease agreement. The
definition does not however cover a situation, such as the present, where the
rent was no longer agreed.
It is correct that the
appellant had been paying the sum of Z$6 000.00 per month as rent.
However, the cheque payments for May, June and July 2008 were returned by the
respondent because the respondent believed that the appellant had breached the
lease agreement and should vacate the premises rather than continue to pay
rentals and remain in occupation. In August 2008, the appellant forwarded
another cheque to the respondent in the sum of Z$1.00 with the inscription
“Rent payment for 24 months” at the back.
That the amount of rent as at
August 2008 had not been fixed or agreed upon is not in dispute. Neither
party had sought an order from the Rent Board to fix a fair rental in respect
of the premises. No agreement had been reached on what rental would be
payable for the occupation of the premises, notwithstanding the stance by the
respondent that the appellant was to vacate the premises. By the Presidential
Powers (Temporary Measures) (Currency Revaluation and Issue of New Currency)
Regulations S.I. 109/08 gazetted on 30 July 2008 new bank notes were introduced
whilst the old bearer cheque continued to be legal tender but at the revalued
rate. It is correct therefore that as at August 2008 the rental of Z$6
million previously paid by the respondent would have been a fraction of a
cent. Despite the revaluation of the local currency, hyperinflation
continued unabated resulting in the gazetting of the Presidential Powers
(Temporary Measures/ Currency Revaluation and Issue of New Currency)
Regulations S.I. 6/09 which became effective on 2 February 2009. That
legislation also had the effect of slashing a number of zeros from the existing
currency.
Given the fact that no
agreement had been reached on the quantum of rent due, can the tender of Z$1 be
said to have been a valid one? The appellant has argued that in terms of
the law, its obligation was to pay the “rent due” and not “fair rent” and that
the suggestion that it should have paid fair rental is at variance with the
Rent Regulations. Whilst that may be correct up to a point, the position
is clear that the Regulations did not specifically provide for a situation,
such as the present, where there may be disagreement on what constitutes the
rent due. One must of necessity resort to the common law to answer this
question. In other words where parties are not agreed on what rental is
payable and there is no order by the board what rental is payable in exchange
for occupation of premises?
The position is settled that a
tenant has no right to occupy property save in return for payment of rent and
that where there is no agreement on the amount of rental payable, the lessee is
liable to pay the lessor a reasonable amount for the use and occupation of the
property, the rental value of the property in the open market being the
criterion for the assessment of this amount. This would also apply to a
lessee who remains in occupation after the termination of a lease whilst
negotiations for a new lease are in progress. – see Landlord &
Tenant by W.E. Cooper, 2nd Ed., p 59.
Whilst it is noted that in Parkside
Holdings Private Limited v Londoner Sports Bar HH-66-00, the High Court
held that in a situation where there is no agreement on the rental, the lessee
must continue to pay the last agreed rental, that finding would be correct in a
normal economic environment and not applicable to a situation such as the one
under consideration where there was revaluation of the local currency both in
2008 and 2009 and the introduction of foreign currency which resulted in the
local currency becoming moribund.
In dealing with the
appellant's obligation under the lease, the court a quo remarked at pp
10-11 of the cyclostyled judgment:
“It is settled that where the amount
of rent payable has not been agreed upon by the parties, the lessee must pay
that amount which it contends represents a fair rental. The lessee's
failure to do so entitles the lessor to cancel the lease and repossess the
tenanted premises by ejecting the lessee. See Supline Investments
(Pvt) Ltd v Forestry Company of Zimbabwe 2007(2) ZLR 280(H) at 281, where
it was held as follows:
“A tenant has an undisputed
obligation to pay rental for property that he hires from the landlord.
That is the sine qua non for his continued occupation of the leased
property. He has no right to occupy the landlord's property save in return for
payment of rent. Where the tenant disputes the amount of the rentals
chargeable for any premises, in my view, that challenge does not absolve the
tenant from paying any rentals at all. The minimum that the tenant in
such a situation must pay is the amount that it contends represents fair
rentals for the premises. This, the tenant must pay to avoid being
ejected on the basis of non-payment of rentals even if its challenge to what
constitutes fair rentals is subsequently validated. At most, the tenant
can pay the disputed amount and claim or be credited with the difference once
its contentions as to what constitutes fair rentals are validated”.
I would add to these
principles the additional requirements that the lessee's contention as to what
represents a fair rental must be reasonably formed and defensible by some
commercial criterion. He cannot relieve himself of his obligation to pay
fair rent by tendering some arbitrary and paltry sum entirely incommensurate
with the rentable market value of the leased premises.”
I agree with the above remarks which accord with both common sense and the
common law. Indeed one of the functions of the Rent Board is to fix fair
rent, the intention being to ensure that a landlord continues to receive a fair
but not excessive consideration in exchange for the occupation and use of his premises.
In my view a tenant who seeks protection of his statutory tenancy must
endeavour to pay fair rent. Such fair rent must be objectively and not
subjectively assessed.
In the present case the appellant tendered Z$1 as rental for 24 months.
It had not been asked to pay rental for two years in advance. It
obviously must have appreciated that Z$1.00 as at 6 August 2008 was not
reasonable value for occupation of the premises for twenty four months.
Even after the introduction of the foreign currency system it felt no
obligation to pay any rentals for the whole of 2009, believing, one would
assume mischievously, that the $1.00 it had paid in August 2008 was, in terms
of the agreement, sufficient rental for 24 months. Indeed, Mr Fraser did
concede that the tender of Z$1.00 was neither fair nor reasonable. In
holding that the appellant lost the right to protection as a statutory tenant,
the court a quo remarked at p 10 of the judgment:
“.... The amount tendered was
unquestionably derisory and could not possibly have represented a fair rental
for the premises by any measure of value, mercantile or otherwise. The
subsequent tender of US$800 per month, 24 months later, was premised on the
contention that the intervening period had been duly accounted for by the
payment of ZW$1 in August 2008. This contention was not only mischievous
but also obviously fallacious. Moreover, the tender had been overtaken by
events, in particular, the cancellation of the lease and the institution of
this action 6 months before.”
Again I am inclined to agree with the above remarks. The appellant lost
its right to statutory tenancy. The court a quo consequently was
correct in ordering the eviction of the appellant and the payment of holding
over damages.
In the circumstances, I agree that the appeal is without merit and that it must
fail.
The appeal is accordingly dismissed with costs.
ZIYAMBI JA:
I agree
MAKARAU JA: I agree
Kantor & Immerman,
appellant's legal practitioners
Gill, Godlonton & Gerrans, respondent's legal practitioners
