NAL Properties (Pvt) Ltd v N-Show Technologies (Pvt) Ltd

### Preamble
1
HH 127-21
CASE No CIV “A” 83/20
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NAL PROPERTIES (PVT) LTD

versus

N-SHOW TECHNOLOGIES (PVT) LTD

HIGH COURT OF ZIMBABWE
CHINAMORA J & TSANGA J 
22 October 2020 & 24 March 2021

Civil Appeal

Mr P Mashiri, for Appellant
Mr E Dondo, for Respondent

CHINAMORA J: This appeal was against the lower court’s order granting absolution from the instance in respect of the appellant’s claim for eviction of the respondent and all those claiming occupation through it, from property known as 44 Greengrove, Greendale, Harare; (hereinafter referred to as “the premises”). The appellant noted its appeal on 16 March 2020, while the respondent lodged its cross-appeal on 18 March 2020.

The facts forming the dispute in the lower court were that, the parties entered into a lease agreement relating to the property sometime in 2016. Clause 4 of the lease agreement required the respondent to only use the premises as its principal private residence for a maximum of four persons and not for any other purpose not permitted in writing by the appellant. When the lease expired, the respondent remained in occupation, with the appellant issuing summons claiming US$10,000 as arrear rentals due on the premises, eviction of the respondent and anyone claiming occupation through him, plus other ancillary relief.

The respondent resisted the claim, and averred that the amount initially claimed by the appellant was US$3385-52 and was fully paid. Notwithstanding this, the respondent stated that the appellant wrongfully attached and sold in execution a motor vehicle belonging to one of its directors. In its plea, the respondent asserted that no amount was owed to the appellant, and prayed for the dismissal of the claim on an attorney-and-client scale.

At the trial in the magistrates’ court, the issue for determination was whether the respondent was in breach of the lease by failing to pay rentals in terms of the lease agreement and, as such, should be evicted from the leased premises. After hearing evidence, the court ordered absolution from the instance. In its judgment, the court a quo noted that as the parties were commercial entities, the premises were being utilised for commercial purposes. In addition, the court also concluded that the lease agreement had expired, and that the parties were no longer bound by its terms and conditions. The court made another finding that their contractual relationship was regulated by the Commercial Premises (Rent) Regulations 1983, (Statutory Instrument 676/83). On the basis of this premise, the court concluded that section 22 of these regulations applied to their case. The provision requires a landlord seeking the eviction of a tenant to show good and sufficient ground. The court a quo reached the conclusion that the appellant had failed to prove its case by failing to demonstrate good and sufficient ground, hence the order it made. Dissatisfied with this outcome, the appellant lodged an appeal to this court.

The grounds of appeal
Grounds of appeal in this appeal were that the court erred and misdirected itself in the following respects:

By finding and concluding that the lease agreement had expired, when in fact all indicators pointed to a tacit renewal of the lease by the parties and, alternatively, the respondent’s occupation is by virtue of statutory tenancy.

In holding that the Commercial Premises (Rent) Regulations 1983, Statutory Instrument 676/83 were applicable in a case involving breach of contract.

In making the conclusion that the lease agreement related to commercial premises when in fact it related to residential premises.

By finding that the appellant had failed to prove its case on a balance of probabilities, yet at the same time accepting that the respondent had last paid rentals in 2017.

In holding that the appellant persisted with a claim for payment of arrear rentals and holding over damages in United States dollars when the appellant had amended its claim in line with changes in law and/or abandoned the monetary claims and persisted with eviction.

The appellant prayed that the appeal be allowed with costs, and that the judgment of the court a quo ordering absolution from the instance be set aside and substituted with the following

“The respondent be and is hereby evicted together with all those who claim occupation through it from No 44 Greengrove, Greendale, Harare.”

At the hearing of the appeal, it was argued for the appellant that, whether or not the Commercial Premises (Rent) Regulations applied to the dispute, was not an issue before the court a quo. Reliance was placed on Kauesa v Minister of Home Affairs 1996 (4) ZLR 965 for the proposition that it is wrong for a court to decide on issues not put before it without affording the parties the opportunity to make submissions. The appellant proceeded to argue that the court a quo erred in concluding that the parties had failed to argue on the relevance of Commercial Premises (Rent) Regulations to the dispute between the parties. As the court’s decision was based on this point, it was submitted by the appellant that the court fell into error, and the appeal should be allowed.

The appellant also contended that the court’s decision based on the Commercial Premises (Rent) Regulations was not based on any evidence led before the court, but on speculation. In this regard, our attention was drawn to page 11 of the record, where the court a quo said:

“My assumption given the nature of the claims and the relationship that existed between the parties is that the premises in question were still being used for commercial purposes”.

On the same page of the record, the learned magistrate went on to say:

“This therefore means that their obligations vis-à-vis eviction are within the ambit and realm of the Commercial Premises (Rent) Regulations as I rightly presumed were and are still being used for commercial purposes”.

The appellant submitted that the court a quo erred at law by basing its decision on assumptions not founded on evidence. It was argued that the property which was leased by the appellant was not covered by the Commercial Premises (Rent) Regulations as it was not being used to carry out any industry, business or trade. The appellant maintained that the property was leased for residential purposes and, as such, the conclusion of the court was wrong. Accordingly, the appellant prayed for the main appeal to be allowed with costs, and for the judgment ordering absolution from the instance to be set aside and substituted with an order that the respondent and all those claiming occupation through the respondent be evicted from No. 44 Greengrove, Greendale, Harare.

The appeal was opposed by the respondent and raised a preliminary objection that the appeal was not properly before the court, arguing that absolution from the instance granted at the end of trial is not appealable. In support of this proposition, the respondent submitted that, such a judgment could not be appealed against because it was not final and definitive and contended that section 40 (2) (b) of the Magistrates Court Act [Chapter 7:10] supported such a conclusion. Reference was also made to the case of Zweni v Minister of Law and Order 1993 (1) SA 523 (A). The respondent took the view that the judgment did not pronounce itself as final and definitive and did not decisively deal with the rights of the parties. The respondent referred to Order 34, Rule 5 (1) of the Magistrates Court Rules, 2019, and submitted that an order of absolution from the instance does not preclude the same matter from being brought to court again. Additionally, the respondent relied on the dicta from Phutuma Networks (Pvt) Ltd v Telkom SA Ltd [2017] 1 All SA 265 (SA), which states:

“An order of absolution from the instance is generally not appealable as it is not final in its effect and the order is still susceptible to being revisited and rescinded. The consequences of the award of absolution from the instance are that Appellant would be entitled to raise the issue between it and the Appellant again in future. I am accordingly of the view that standing on its own the order of absolution from the instance is not appealable”.

In respect of the merits, the respondent argued the appellant’s case in the court a quo was for eviction based on breach of material terms of the lease agreement. The respondent submitted that the appellant failed to prove breach at the trial. (Record pages 22-23). In addition, it was contended for the respondent that the court a quo was correct in holding that the Commercial Premises (Rent) Regulations applied to the dispute between the parties, as the parties were commercial entities and were in commercial business. The respondent asserted that the regulations were designed to govern commercial entities. Further, the respondent argued that its cross appeal must be allowed. The basis of this contention was that the court a quo had not considered its defence which was pleading set off.

At the hearing of the appeal, we observed that the respondents had not filed a counterclaim in the court a quo. Consequently, there was no valid cross appeal before the court. We struck off the cross appeal. There is merit in the appellant’s argument that, the court a quo determined an issue which was not before it in so far as it introduced the Commercial Premises (Rent) Regulations into the matter before it. The appellant’s claim in the lower court was for eviction premised on breach of the lease by reason of non-payment of rent on due date. There was certainly no claim for requiring possession based on section 22 of the Commercial Premises (Rent) Regulations. The requirements for eviction based on breach of the lease and for requiring possession by virtue of section 22 are different. The former requires proof of breach, while the latter needs the landlord to show good and sufficient ground. Moreover, none of the parties was asked to address the applicability of section 22 since it was not an issue before the court. By considering an issue not before it and which was not argued by the parties, the court grossly misdirected itself. The judgment ought to be vacated.

In the result, we issue the following order:

The appeal is allowed with costs.

The judgment of the court a quo is set aside and substituted  with the following:

“The respondent be and is hereby evicted together with all those who claim occupation through it from No 44 Greengrove, Greendale, Harare”.

Mavhunga & Associates, applicants’ legal practitioners

Messrs Saunyama Dondo, 1st respondent’s legal practitioners

Tsanga J agrees………………………………………