Eric Meyer and Alcopexia Trading (Private) Limited v Alchart Mine (Private) Limited and Kailash Palrasher

### Preamble
1
HH 184-2013
HC 6521/11
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ERIC MEYER

and

ALCOPECIA TRADING (PRIVATE)

LIMITED

versus

ALCHART MINE (PRIVATE) LIMITED

and

KAILASH PALRASHER

HIGH COURT OF ZIMBABWE

MATHONSI J

HARARE, 4 June 2013 and 12 June 2013

Civil Trial

F M Motsi, for the plaintiffs

C Chinyama, for the defendants

MATHONSI J:   At the conclusion of the trial in this matter, and after the two defendants virtually abandoned their defences to the plaintiffs’ claims, I entered judgment in favour of the plaintiffs and said the reasons for doing so would follow. These are they.

The two plaintiffs instituted summons action against the two defendants seeking confirmation of the cancellation of a lease agreement allegedly entered into between the first plaintiff and the first defendant, the ejectment of the first and second defendants from number 93 Enterprise Road, Highlands, Harare (“the property”), outstanding rentals, municipal and electricity bills, holding over damages and costs of suit.

In their declaration the plaintiffs averred that the first plaintiff, who was then the registered owner of the property, had sold it to the second plaintiff and transfer was then pending. The property has since been transferred to the second defendant, a company registered in Zimbabwe, which holds title by Deed of Transfer No. 537/2011. They further averred that on 17 February 2010 the first plaintiff had entered into a written lease agreement with the first defendant represented by the second defendant, in terms of which he let out the property to the first defendant, on certain terms, until 31 December 2010.

Upon expiry of the lease, the defendants refused to vacate the property even after being given prior notice to do so and that the lease was not going to be extended. Consequently, the plaintiffs alleged that the defendants were in unlawful occupation of the property without paying rentals, water and electricity bills.

The defendants opposed the action and in their joint plea they averred that the second defendant had a right of first refusal in the event of the property being sold which right was not accorded to him. They denied that the property was sold to the second plaintiff averring that the latter had no right whatsoever over the property. The defendants also denied ever receiving a notice to vacate the property and challenged the reasons given for cancellation of the lease agreement adding that the lease had been overtaken by events in light of the second defendant’s right of first refusal.

At the pre-trial conference held before a judge the issues for trial were identified as:

Whether or not the second defendant had a right of first refusal of this property before it could be sold to anyone inclusive of the second plaintiff rendering the whole purported sale of this property by the first plaintiff null and void.

Whether or not the first and second defendants were given notice to vacate the property.

Whether or not the first and second defendants and all those claiming occupation through them should be ejected from 93 Enterprise Road.

The plaintiffs led evidence from two witnesses, namely Debra Louw and Angela Marian Bowen. Debra Louw was employed by the first plaintiff as an assistant charged with the collection of rentals for the first plaintiff’s three properties which were rented out including the one forming the subject of this dispute. She stated that she would collect rent from the second defendant who used to come to her place to pay. Once in a while she would also go to inspect the property.

The witness stated that she was unaware whether the first plaintiff and the second defendant had any direct interaction but at all relevant times the first plaintiff was based in England and would visit Zimbabwe once a year around the month of May. She is not aware whether the second defendant was given any right of first refusal outside the written lease agreement signed between the parties on 17 February 2010 which she produced as exh 1.

The said lease agreement was signed between the first plaintiff and the first defendant duly represented by the second defendant. She signed on behalf of the first plaintiff although she did not have a power of attorney to represent the first plaintiff. In terms of that lease agreement the first defendant was required to vacate the property upon expiration of the lease on 31 December 2010.

When the property was put on the market the second defendant verbally advised the witness that he had a right of first refusal before submitting a written offer to purchase the property. She cannot readily recall the exact amount offered although she thinks it was in the region of US$300 000-00. She dutifully forwarded the offer to the first plaintiff but is unaware of what became of it as she had handed over all responsibility to the Estate Agents who were handling the sale.

Under cross examination Louw conceded that the lease agreement was probably invalid given that she had signed it on behalf of the first plaintiff when she did not have a power of attorney to do so. She also conceded that in light of that, the relationship between the parties may have been governed by an oral lease agreement which she was not privy to.

Louw confirmed that the property was indeed sold to the second defendant. This witness was not useful to the court as she appeared very timid preferring to profess ignorance on all the matters relating to the relationship between the parties.

Angela Marian Bowen is a director of the second plaintiff. She testified that the two adjoining properties namely Lot 119 and Lot 122 of Highlands Estate of Welwoed, Harare were advertised for sale as a unit. She responded to the advert and went to view the properties. Upon arrival, she met the second defendant who told her that he had made an offer to purchase the properties. The offer was between US$250 000-00 and US$300 000-00. She was aware that the first plaintiff’s asking price had been US$600 000-00. The second plaintiff then made an offer of US$520 000-00 for the two properties which was accepted.

In due course, the properties were transferred to the second plaintiff by Kantor and Immerman conveyancers at which stage the second plaintiff requested that they be kept and held by separate Deeds of Transfer. The witness then produced exh(s) 2 and 3 being Deeds of Transfer Numbers 536 and 537 of 2011 showing that Lots 122 and 119 of Highlands Estate of Welmoed are held by the second plaintiff. The property forming the subject of this action is Lot 119 held under Deed of Transfer No 537/2011.

The witness went on to say that the Estate Agents who represented the first plaintiff, The Laws Organisation (Pvt) Ltd, gave notice to the tenants occupying the two properties to vacate. While one tenant complied, the defendants refused to do so as a result of which the second plaintiff has been unable to gain access to the property.

She stated that the second plaintiff purchased the property in good faith and is being prejudiced by the defendants’ refusal to vacate especially as no rent has been paid to the second plaintiff. She is aware though that some rent was being paid to the estate agent who continues to receive it on a without prejudice basis.

Under cross examination, the witness maintained that the second plaintiff was not aware of any right of first refusal in favour of the second defendant. She was aware though that the second defendant had made an offer which was too low and was not accepted by the seller.

At the close of the plaintiffs’ case, Mr Chinyama for the defendants made an application for absolution from the instance arguing that the two plaintiffs had failed to establish a prima facie case against the defendants. He stated that the plaintiffs had sought to rely on a written Lease Agreement which was not signed by the first plaintiff. The agreement in question was invalid and therefore the relationship between the parties was regulated by the oral lease agreement alleged by the defendants. For that reason, the only person who could dispute the existence of the oral agreement was the first plaintiff who unfortunately was not called to testify.

When Mr Chinyama’s attention was drawn to the fact that it is indeed the defendants who allege the existence of an oral lease agreement and them who allege the existence of a right of first refusal and that they therefore bear the onus of proving the first issue for trial, Mr Chinyama abandoned the application for absolution.

In Gavaza v Shumba & Anor HH 268/12 at pp 4 – 5, I quoted with approval Herbstein and Van Winsen on what the court has regard to in an application for absolution. I repeat:

“What the court has to consider in an application for absolution at the close of the plaintiff’s case was stated by the learned authors Herbstein and Van Winsen, The Civil Practice of the Superior Courts in South Africa, Juta & Co Ltd, 3rd ed, at p 462 as follows:

‘The lines along which the court should address itself to the question of whether it will at that stage grant a judgment of absolution have been laid down in the leading case of Gascoyne v Paul and Hunter 1917 TPD 170, which contains the following formulation:

‘At the close of the case for the plaintiff, therefore the question which arises for the consideration of the court is: Is there evidence upon which a reasonable man might find for the plaintiff? … The question therefore is, at the close of the case for the plaintiff, was there such evidence before the court upon which a reasonable man might but not should give judgment, against Hunter?’

It follows from this that the court is enjoined to bring to bear on the question the judgment of a reasonable man and ‘is bound to speculate on the conclusion at which the reasonable man of (the court’s) conception not should, but might or could arrive. This is the process of reasoning which, however difficult its exercise, the law enjoins upon the judicial officer.’”

See also Ebrahim v Pittman N O 1995 (1) ZLR 176 at 187 C-G and Chikowore v Chidavaenzi & Anor HH 436/12 at p 7.

Three issues were placed before me for trial in this matter. The first one relates to whether the second defendant had a right of first refusal. It is the second defendant who alleges the existence of such right and therefore bears the onus. The second defendant has to present his case for the court to determine that issue. There can be no basis for absolution arising from that issue.

The second issue is whether the first and second defendants were given notice to vacate the property. It is an issue which resolves itself from the pleadings filed of record. When the defendants denied the existence of a notice to vacate in their plea, the plaintiffs filed a replication in which they attached a copy of a letter from the defendants’ legal practitioners dated 13 December 2010, annexure “A” to the replication, in which they make reference to the notice of 8 November 2010 which is attached to the plaintiffs’ summons as annexure “B”. The notice letter written by The Laws Organisation (Pvt) Ltd reads in relevant part as follows:

“Alchart Mine

93 Enterprise Road

Highlands

Harare

Messenger delivery

FOR THE ATTENTION OF MR K PARASHER

Dear Sir

NOTICE TO VACATE 93 ENTERPRISE ROAD, HIGHLANDS, HARARE

We write on behalf of Eric Meyer regarding the lease of the above property. We would like to draw your attention to clause 2 of the lease agreement, which states that the lease will be terminated by 2010 December 31. We would therefore want to remind you that you have undertaken to vacate the premises by no later than 12 noon of 2010 December 31, according to clause 9 of the lease agreement.

Please sign the attached copy of this letter to confirm you will do so.

Yours faithfully

L Zindoga

SALES NEGOTIATOR”

The defendants may have wanted to challenge that notice, its validity or its legality. However it was dishonest to aver that no notice was given. As proof that the letter was indeed received by the defendants, Chinyama & Partners stated in their letter of 13 December 2010 as follows:

“RE: NOTICE TO VACATE 93 ENTERPRISES (SIC) ROAD 2010

Your letter of the 8th day of November 2010 was forwarded to us for possible advise (sic) and comments.”

The third issue for trial is whether the defendants should be evicted from the property. The evidence led on behalf of the plaintiffs includes that of Louw to the effect that the second defendant made a written offer to purchase the property for about $300 000-00. We also have the evidence of Bowen that the second plaintiff purchased the properties for $520 000-00 with the disputed property purchased for $320 000-00. The second plaintiff is now the registered owner of the property who would generally have a vindicatory right against the whole world. More importantly, the property was purchased for well over the offer made by the second defendant.

The question which arises therefore is whether the second defendant still had the right of first refusal even assuming it once existed. That is for the second defendant to establish.

To my mind, at the close of the case for the plaintiffs, there existed evidence upon which a reasonable man might find for the plaintiff. It is for these reasons that I refused to grant absolution.

Only the second defendant gave evidence, which was extremely brief. He stated that he resides at No 93 Enterprise Road Highlands Harare, a property he has occupied since 2004 “something like that”. He was renting the property through Gabriel Real Estate where he used to pay his rentals. He never defaulted in his rentals and never paid out of time. He has got receipts to prove that, although he did not produce any.

When asked by his counsel whether he was ever given a right of first refusal in respect of the property, the second defendant was emphatic that he was never given such a right. Asked whether he ever spoke to the first plaintiff when he took occupation in 2004, the second defendant was again emphatic that he never did. Asked again if it was his evidence that he was never given any right of first refusal, the second defendant repeated that he never had such right.

At that stage Mr Chinyama abandoned leading the witness, promptly closed the defendants’ case and declined to address the court in closing stating that he preferred to remain “mum”. Mr Motsi for the plaintiffs addressed the court on the issue of costs submitting that the manner in which the defendants had spurned the plaintiffs’ overtures for a settlement even at the last minute, only for the second defendant to testify that he effectively had no defence called for an order for costs on a punitive scale. The plaintiffs have been unnecessarily put out of pocket. I agree.

I have already resolved the issue relating to notice given to the defendants. On the issue of whether the second defendant had a right of first refusal, he stated himself that he did not have such right. It should be understood that in our law there is no automatic right of pre-emption enjoyed by a tenant. Such right must be granted to the tenant by the landlord. It was stated by MALABA JA (as he then was) in Eastview Gardens Residents Association v Zimbabwe Reinsurance Corporation (Ltd) & Ors 2002 (2) ZLR 543 (S) 548 G – H that:

“It is clear from all these decided cases that a right of pre-emption can only be created by contract or agreement between the grantor and the grantee. Where breach of the right is alleged as a cause of action and its existence is denied, the onus is on the plaintiff to show that there was an agreement between the parties in terms of which the defendant undertook to offer him the property at a price equal to that offered by another.”

See also Central African Processed Exports (Pvt) Ltd & Ors v MacDonald & Ors 2002 (1) ZLR 399 (S) at 403 C – H; Nerger Properties (Pvt) Ltd & Ors  v R Chitrin & Ors 2006 (2) ZLR 287 (S); Prize Commercial Holdings (Pvt) Ltd v Goldberg & Ors HH 446-12 at pp 11 to 12.

We have a case where apart from the second defendant’s surprising denial that he enjoyed a right of first refusal or pre-emption, the property was indeed offered to the second defendant but he failed to purchase it at the price offered by the second plaintiff. If ever the right existed, it was lost in that process. Central African Processed Exports (Pvt) Ltd & Ors v MacDonald Ors (supra).

I therefore find that the second defendant did not have a right of first refusal.

Regarding the notice given to the defendants, while I have found that the lease agreement signed on 17 February 2010 which provided for termination on 31 December 2010 was not valid for want of the first plaintiff’s signature, I am prepared to accept it as notice given to the defendants because the second defendant properly signed it and was aware of the termination aforesaid. The defendants were also reminded of the termination by the notice of 8 November 2010. I therefore conclude that notice was given.

To that extent, the plaintiffs are entitled to eject the defendants from the property. There is also the added right of the second plaintiff to vindicate.

As stated by MAKARAU JP (as she then was) in Alspite Investments (Pvt) Ltd v Westerhof 2009 (2) ZLR 226 (H) at 236 D-E:

“The rei vindicatio is an action that is founded in property law. It is aimed at protecting ownership. It is based on the principle that an owner shall not be deprived of his property without his consent. So exclusive is the right of an owner to possess his or her property that, at law, he or she is entitled to recover it from wherever found and from whomsoever is holding it, without alleging anything further than that he or she is the owner and that the defendant is in possession of the property. Thus it is an action in rem, enforceable against the world at large. This is settled law in this jurisdiction which requires little authority.”

See also Chotty v Naidoo 1974 (3) SA 13 (A) at 20B-D.

The second plaintiff is the registered owner of the property who alleges that the defendants are in unlawful occupation. It is therefore entitled to vindicate.

No evidence whatsoever was led on the alleged outstanding rentals, municipal and electricity bills and holding over damages. The plaintiffs’ are therefore not entitled to relief in that regard.

In the result, I make the following order, that:

The cancellation of the lease agreement entered into between the first plaintiff and the defendants is hereby confirmed.

The first and second defendants should be ejected from No 93 Enterprise Road, Highlands, Harare, also known as Lot 119 Highlands Estate of Welmoed, Harare.

The first and second defendants shall bear the costs of suit on a legal practitioner and client scale jointly and severally the one paying the other to be absolved.

M E Motsi & Associates, plaintiffs’ legal practitioners

Chinyama & Partners, defendants’ legal practitioners