Property Plus Realtors (Pvt) Ltd v Prestbury Enterprises (Pvt) Ltd

### Preamble
1
HB 311/20
HC 257/18
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PROPERTY PLUS REALTORS (PVT) LTD

Versus

PRESTBURY ENTERPRISES (PVT) LTD

IN THE HIGH COURT OF ZIMBABWE

MABHIKWA J

BULAWAYO 18, 19 MARCH 2020 AND 22 JANUARY 2021

Civil Trial

Advocate T.T.G. Musarurwa for the plaintiff

Miss S. Mbondiya for the defendant

MABHIKWA J:	The plaintiff company in this matter issued summons against the defendant company and prayed for the following:

An order confirming the cancellation of agreement of lease between plaintiff and defendant in terms of which plaintiff leased to defendant the premises located on a portion of stand 391 Bulawayo Township, also known as Warehouse, Haddon & Sly Complex, Bulawayo.

An order for the ejectment forthwith of the defendant and all its subtenants, assignees, invitees, and all those claiming occupation through defendant from plaintiff’s premises.

Payment in the sum of US$33 950,00 being arrear rent as at 31 August 2016, together with interest thereon at the rate of 5% per annum from 31 August 2016 to date of payment in full.

Damages for continued occupation by defendant of plaintiff’s premises at the rate of US$2 500,00 per month for rent from 1 September 2016 to date of defendant’s ejectment, together with interest thereon at the rate of 5% per annum from the due date to date of payment in full.

Cost of suit at the legal practitioner and client’s scale and collection commission on all amounts claimed herein calculated in accordance with by-law 70 (2) of the Law Society of Zimbabwe By-Laws 1982.

The defendant denied the plaintiff’s averments.  It averred that the basic rent was initially reduced by the parties.  It also denied accruing arrears in rent and operating costs in the amounts alleged.

It further averred that a portion of the plaintiff’s claim in respect of arrear rent for the period preceding 31 August 2014 has prescribed.

Further, defendant claimed that the plaintiff company is indebted to it in the sum of US$133 118,22, which amount forms the subject matter of plaintiff’s counter claim under case number HC 2928/16.  Defendant company denied that the agreement was cancelled.  It also averred that it is entitled to, and claimed set-off of any amount proved by plaintiff against its indebtedness to the defendant.

Defendant denied plaintiff’s entitlement to costs of suit on an attorney and client scale and prayed that plaintiff’s claim be dismissed with costs.

At the commencement of the trial, Ms Mbondiya for the defendant raised a point in limine that the plaintiff should be barred and denied the platform to be heard.  Counsel claimed that the plaintiff was in contempt of an extant court order by Honourable Justice Kabasa granted against it on 9 March 2020 under case number HC 541/20.  The order allegedly related to the supply of electricity which applicant was ordered by the court to re-connect after it had disconnected it. It was the defendant’s submission that inspite of being so ordered, the plaintiff still had not complied with the court order even at the time of the commencement of this trial.  For that reason, the defendant urged the court to find that plaintiff had approached the court with “dirty hands”.  It had no platform or right of audience until it had purged its contempt.

Advocate T. T. Musarurwa for the plaintiff responded briefly that he had no full instructions concerning case number 541/20.  However, he argued that that case and the present one had different companies.  He therefore argued that whilst there may be some relationship known by the defendant between the two companies, it is not the plaintiff that was in contempt if any.  The sins of the other company cannot legally be visited upon the plaintiff company in casu.

This court noted that the defendant in case number HC 541/20 referred to by Ms Mbondiya was Stonework Construction (Pvt) Ltd.  This was indeed an entity completely different from the plaintiff in casu.  The order by KABASA J was against that company.  The court therefore could not be persuaded to hold that the order should also operate against the plaintiff in casu (Property Plus Realtors (Pvt) Ltd), and that it is in contempt of the said order.

In any event I agree with Advocate Musarurwa that it would be inappropriate to allege contempt ex facie curiae against the plaintiff without filing the necessary papers.  Further, one cannot hold a junstic person to be in contempt without filing proper papers and pointing to a specific individual like a director or chief executive officer who was ordered to do a specific act but disobeyed the order.

See – In re-Chinamasa 2000 (2) ZLR 322 (S) an allegation of contempt made ex facie curiae.  Also Wilson vs Min of Defence & Ors 1991 (1) ZLR 144 (H).

From the foregoing I dismissed the defendant’s point in limine.

In his opening remarks, Advocate Musarurwa urged the court to note that plaintiff sought to prove;

That the parties had a simple written agreement of lease and no other.

That the rentals have not been paid to date

That the operational costs also to be paid in terms of the said agreement had finally been paid but not at the time they became due and payable

That the defendant breached the agreement basically and it was cancelled

That as a result of the material breach of the agreement by the defendant, the plaintiff is entitled to immediate cancellation of the agreement and eviction of the defendant from the rented premises.

That as regards the quantity, plaintiff made the concession that the claim relating to all amounts due prior to 1 September 2014 had prescribed.  The plaintiff therefore abandoned a claim amounting to a total of US$224 355,00 leaving a balance of $160 275,00 plus holding over damages.

On the counter claim, plaintiff averred that there was never any agreement for the defendant to be reimbursed for renovations that had nothing to do with plaintiff but to benefit the defendant’s own ten (10) year occupation of the premises.  Plaintiff sought to show that there is no legal basis for the claim for renovations in the counter claim.  Ms Mbondiya for the defendant submitted that notwithstanding the existence of the written agreement, the defendant would seek to prove that the parties in substance had a verbal agreement which detailed the “real” agreement between them.

Defendant however made the concession that at some stage during the running of the lease, it fell into arrears and operating costs, but not in the amount alleged by plaintiff.  Ms Mbondiya argued further that in any event, the defendant had since paid whatever was due and owing.  There remained no cause of action, so to speak.  She also said the defendant insisted on its counter claim and that it was owed by the plaintiff due to renovations or improvements made by defendant on the leased property.

Shingi Norman Chibanguza

This witness was the managing director of the plaintiff company at the time the lease agreement was entered in 2010.  He took part in negotiating, drafting and signing the agreement.  He represented the plaintiff.  A Mr Ndlovu represented the defendant.

In terms of clause 1.5.1 of the lease agreement, the basic rent for the leased premises was $3 892,00 per month.  He said	 in addition, there were operating costs for services such as water, electricity etc.  In terms of 1.5.2 the operating costs would be the full amounts as billed by the respective service providers.  Mr Chibanguza denied that there was ever any other agreement between the parties.  He said there was no verbal agreement as alleged by the defendant.  He said as far as he knew, if there had been any verbal agreement, for whatever reason, it would consequently have been reduced to writing as dictated by clause 11 of the written agreement.  Clause 11 states that the signed written agreement constitutes the whole agreement between the parties.  It also states that any variations to the terms and conditions of the lease must be in writing and signed by both parties.

Chibanguza said that the only waiver in terms of payment was in terms of clause 3.1.  In terms of that clause, there was a three (3) months waiver of payment of rent in respect of the infrastructural adjustment that was to be made by the lessee to make the premises suitable for its desired project purpose.  He vehemently denied any other agreement or waiver of rentals.  When he was continuously cross-examined on claims in the counter claim which allegedly had been agreed to, Mr Chibanguza said he was seeing the document (alleged notice by the defendant), for the 1st time in court but had noted at least two (2) important issues.

There was reference to a meeting of 3 November 2016.  The written agreement was signed on 1 September 2010.  Mr Chibanguza said that it was clear that this was a document deliberately created over six years after the fact, in a bid to avoid payment by the defendant.

This court will agree as testified by Mr Chibanguza that it would not make any economic sense for any businessman to agree to forgo six (6) years rent for “alterations” that would benefit only the tenant for its purposes and the lessor had nothing to do with them.  He said the meeting of November 2016 was meant to try and get Prestbury to pay the operating costs, and to get an update as to when it would settle the outstanding arrears. That is when Mr Ndlovu brought up the claim that they had made some alterations or renovations.  They were reminded that in terms of the lease agreement plaintiff had agreed to 3 months waiver of rentals for any alterations made.  It was made clear to them that while the defendant was free to show the plaintiff the details of the alterations, anything outside the 3 months waiver was not on plaintiff’s account.

It was put to Chibanguza that the real and effective agreement between the parties was verbal and that the real value of the alterations would be set off against the rentals and operating costs.  Mr Chibanguza denied that fact and added that in any event the defendant’s letter dated 9 November 2016 claimed that the alterations amounted to US$150 000,00.  The defendant then went on to provide two (2) statements.  One statement was for US$181 000,00 and the other for US$891 000,00 which is impossible because the whole property itself is nowhere near that much.  He insisted that it was clear that the invoices were made up later to avoid the rent liabilities or for some other sinister purpose.

I must say that Mr Chibanguza was right when he invited the court to look at the document at page 82-82 of the defendant’s bundle of exhibits.  It purportedly showed a total of US$48 691,82 worth of “renovations” on the building.  However, almost all of them contained materials that had nothing to do with renovations.  The items shown on the document, such as typing, scanning, NSSA returns, rent and loan, bond paper, ink refill, bus fare, staff celebration at Haefelis, student furniture, printing, spare parts, telephone, HP laserjet and many more others clearly have no relationship to renovations to a building let alone the plaintiff.  The claim would indeed be a mockery and no court would take it seriously.

Chibanguza asked the court to take into account that although entitled to the amount outstanding, plaintiff has conceded the defence of prescription raised by the defendant.  The plaintiff then abandoned the rentals that were due up to 31 August 2014.  It then claimed holding over damages for rentals in the sum of US$3 892,00 per month with effect from 1 September 2017 to date of eviction.  Secondly, plaintiff claims hold over damages of US$2 500,00 per month with effect from 1 April 2020 to date o final vacation.

Plaintiff’s concession on prescription was short, easy to understand and commendable.  It also showed honesty and frankness.  Plaintiff admitted that the current action was only instituted in September 2017, the previous one having been withdrawn.  The plaintiff could not claim those rentals that were due before September as they would have prescribed.  See Old Mutual Assurance Company of Zimbabwe vs Nadick Trading (Pvt) Ltd HH-641-15.  The rentals due (including VAT) from 1 September 2014 to the time summons were instituted as at 30 August 2017 are $160 275,50.  Thereafter, plaintiff claims holding over damages totalling $116 760,00.

Agreements are often legally cancelled by reason of a breach.  There surely cannot be greater breach of a lease agreement than the failure to pay rentals let alone all rentals.  Mr Ndlovu admitted that they at times failed to pay rentals and that such failure to pay rentals would be a material breach of the agreement.  In any event, clause 9.1.1 to 9.1.3 also show clearly that failure to pay rentals would be breach leading to a cancellation of the agreement.

From the above, it would be untenable and difficult to understand why the defendant would resist eviction from the property in question.  Under the agreement and even under the law of rei vindicatio, there is no way the defendant would seek to hold on to the plaintiff’s property.

Finally, it was Chibanguza’s evidence that before the lease, the building was being used as a wholesaler.  The plaintiff had absolutely no reason or business using it as an educational institution.  It was the defendant who wanted to use it for educational purposes.  In fact according to Chibanguza, some of the structures made by the defendant have to be demolished if the building is to be used for its original purpose.  It matters not that the defendant thinks it looks more beautiful than it was originally.  The court also notes that the defendant did not dispute the fact that its use and alterations had absolutely no relation to applicant’s wholesale business.

Philanzima Mota Last Ndlovu

This defendant’s witness testified on behalf of the defendant company.  He said he was a co-director of the defendant.  The other director was his wife, one Thobekile Ndlovu.  I must say that in his evidence and under cross-examination, the witness literally admitted defendant’s liability in toto. He admitted the following:

He admitted that the written agreement related to the lease.  He could no longer spell out fully the terms of the “verbal agreement” although he said it was the ultimate agreement.

He admitted that the written agreement at pages 97-101 of the bundle of exhibits reflected all the terms and conditions of the lease.

He admitted that clause 3.1 of the lease agreement considered the effect of the structural adjustments on the premises.

It also showed that the parties expected the adjustments to take 3 months after which the lease would have ten (10) years to enjoy the fruits of whatever they would had done and to recoup whatever was necessary and due to them.  At the same time, the plaintiff would enjoy its rentals.  He only lamented that perhaps the agreement overlooked to consider unforeseen circumstances like the economic hardships that emerged.  In fact on the point of renovations the following exchange took place in cross-examination.

“Q	-	Is it your evidence that in the negotiations for the lease, plaintiff agreed to reimburse you for renovations?

A	-	No, he only agreed to the renovations.

Q	-	Would it be correct to assume that the reason why you were given a ten year lease was to allow you to establish yourselves as a school and to realise whatever profit in capital you would have expended?

A	-	Yes, but also, it was a requirement of the Ministry of education that the lease must not be less than 10 years.

Q	-	What then is the basis for claiming that plaintiff should reimburse you?

A	-	We thought that at least the owner could consider our situation.

Q	-	So you are not seeking to be reimbursed based on any agreement to be so reimbursed.

A	-	No, not at all.  There was no such agreement to be reimbursed?”

So, it was then very clear even from Mr Ndlovu himself, that there was never any reimbursement agreement.  It follows that there could be no claim or liability to reimburse, on the part of the plaintiff.  In any event, the defendant did not claim, let alone prove any unjust enrichment.

Mr Ndlovu also admitted that the liability to complete the renovations or alterations in time was one of the unforeseen circumstances he complained of and that the failure was not the plaintiff’s fault.

He said all they were asking for was plaintiff’s understanding.  He was then asked;

“Q	-	So from what you have just said, it is correct therefore that you have no legal right to claim to be reimbursed?

A	-	From the agreement yes, we have no legal right but we can request for their understanding.

Q	-	In other words you are asking for a moral right?

A	-	Yes, that is all I am saying.  That, is there any harm in making a request. …”

Further, Mr Moyo was asked and he personally read clause 11 to the court, after which he agreed that it stated that the written agreement “constitutes the whole agreement between the lessor and the lessee”.

Finally, Ndlovu admitted the following.

That as at the end of 2015, defendant owed US$16 500,00

As at the end of 2016, defendant owed US$20 950,00

As at the end of 2017, defendant owed US$17 768,00

Total outstanding for 3 years – US$50 158,80

He admitted that the above was in fact a fundamental breach, which he blamed on the economic situation in the country.

With those admissions, there was really no need to waste the court’s time.  There was no doubt that the plaintiff was entitled to judgment as claimed minus the abandoned claim by reason of the Prescription Act and also the operating costs which admittedly had been paid in full at the time of the trial.  On the issue of costs, there is no doubt that plaintiff was unnecessarily caused costs and put out of pocket.  It was indeed a matter that was unnecessarily litigated.  It appeared quite possible even in court, that the law firm that represented the defendant advised it properly about its rights and perhaps that it had a hopeless defence and claim but the later insisted on having its day in court.

Accordingly, it is ordered that plaintiff’s amended relief is granted as follows that;

The cancellation of the lease agreement between plaintiff and defendant entered into on 1 September 2010 is confirmed.

The defendant and all those claiming occupation through it be and are hereby ordered to vacate the leased premises commonly known as Warehouse Haddon & Sly, 89 Fife Street, Bulawayo within seven (7) days of the issuance of this order.

Should defendant and all those claiming occupation through it fail to vacate the said premises within seven days of the issuance of this order, the Assistant Sheriff is authorised to evict them and give vacant possession of the premises to the plaintiff through its authorised representatives.

The defendant pays the plaintiff the sum of $160 275 being arrear rentals from 30 September 2014 to 1 August 2017 and the sum of $116 750 being holding over damages from 1 August 2017 to 31 March 2020.

Defendant to pay holding over damages at a rate of $6 392 per month (pro rata a daily basis 30 day month) with effect from 1 April 2020 to date of final vacation.

The defendant’s counter claim is dismissed.

Defendant to pay costs of suit on a legal practitioner and client scale.

Musarurwa Pasi Corporate Attorney c/o Calderwood, Bryce Hendries & Partners plaintiff’s legal practitioners

Webb, Low & Barry inc Ben Baron & Partners defendant’s legal practitioners