Parkside Holdings (Pvt) Ltd v Londoner Sports Bar

### Preamble
HH 66-2005
HC 9626/04
PARKSIDE HOLDINGS (PVT) LTD
versus
LONDONER SPORTS BAR
---------


==============================PARKSIDE HOLDINGS (PVT) LTD
versus
LONDONER SPORTS BAR

HIGH COURT OF ZIMBABWE
PATEL J
HARARE, 24 February, 8 April & 3 August 2005

OPPOSED APPLICATION

Mr. Mutasa, for the applicant
Mr. Mhlanga, for the respondent

The Application

This is an application for summary judgement on a summons claiming the following relief: (a) the termination of a lease agreement entered into between the parties on the 1st of December 2003; (b) ejectment of the respondent from the leased premises; (c) payment of arrear rentals; and (d) payment of holding over damages.

The applicant’s position is that the fixed term of the lease terminated on the 31st of May 2004 and that the respondent failed to pay rentals for the next two months. The lease was then terminated on account of the respondent’s breach and the respondent has no defence to the applicant’s claim.

In its plea, the respondent averred that it withheld the rentals due because the applicant had barred the respondent from using certain toilets and had blocked the fire escape. However, in its opposing affidavit, the respondent avers that it had tendered the rent payments but that the applicant rejected them because it wanted to increase the monthly rental from $2.2 million to $13 million.

Points In Limine

At the hearing of this matter, respondent’s Counsel raised certain objections in limine. The first point taken was that the founding affidavit is fatally defective for want of compliance with Rule 64(2) of the High Court Rules, 1971, in that it does not verify the cause of action and the amount claimed. Secondly, it was submitted that the deponent to the founding affidavit does not indicate the capacity in which the deposition was made. Such capacity and authority to depose must, as was correctly argued, appear ex facie the affidavit itself. (See *Chiadzwa v Paulker* 1991 (1) ZLR 33 (S) and *Misid Investments (Pvt) Ltd v Leslie* 1960 (4) SA 473).

In response, applicant’s counsel submitted that the cause of action and amount claimed are verified in clause 4 of the founding affidavit by reference to the summons and the plaintiff’s declaration and that they are further verified in the draft order. With respect to the second point, it was contended that the deponent need not give full details as to his or her capacity to depose as long as the court is satisfied that the deponent was aware of the facts deposed to. As regards both of the points *in limine*, counsel argued that the applicant has substantially complied with the requirements. In such circumstances, the court has inherent jurisdiction to condone any departure from or failure to strictly comply with the Court Rules where there are good prospects of success on the merits and where justice would otherwise be delayed.

**The Merits**

On the merits of its application, the applicant avers that the respondent failed to pay any rentals after the expiry of the lease. Additionally, it is averred that the respondent did not pay for its share of the electricity and water consumption costs at the leased premises – except for 3 months at the end of 2004.

The applicant further avers that the toilets and fire escape were not blocked as alleged by the respondent. In any event, this afforded no basis for withholding rent payments. If a lessor interferes with the use of the premises, the lessee must either seek an interdict or claim damages. The
 lessee may withhold rentals only if he is deprived of the use of the entire leased premises.

The applicant also avers that the respondent did not offer to pay the old rentals upon the expiry of the lease. Moreover, there is no indication in the opposing affidavit as to when, to whom and how much was tendered as alleged.

For the respondent, it is argued that there are *in casu* material disputes of fact to be decided by way of trial, to wit, the question of the respondent’s access to the toilets and fire escape and whether or not the rent due was tendered by the respondent after the expiry of the lease.

The respondent further argues that clause 13(b) of the lease agreement entitles the lessee to an abatement of rent when the premises demised are not wholly fit for occupation.

Lastly, it is submitted for the respondent that the applicant has not given the respondent any statutory notice to vacate and therefore cannot claim its ejectment. Moreover, it is contended that ejectment, being in the nature of an unliquidated claim, cannot be granted by way of summary judgement.

**Judgement**

**Points in limine**

Rule 64(2) of the High Court Rules, 1971, requires that an application for summary judgement must be supported by an affidavit which: (a) is made by the plaintiff or any other person who can swear positively to the facts set out; (b) verifies the cause of action and the amount claimed; and (c) declares the deponent’s belief that there is no *bona fide* defence to the plaintiff’s claim.

*In casu*, I am of the view that the deponent has sufficiently verified the cause of action in paragraph 4 of the founding affidavit, by direct reference to the summons and the plaintiff’s declaration. The founding affidavit further avers that the respondent has no *bona fide* defence to the applicant’s claim and that the respondent has failed to pay outstanding rentals since June


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HH 66-2005
2004. As for the amount claimed, this is adequately verified by reference to the summons and the draft order annexed to the founding affidavit. In effect, the applicant has substantially complied with the requirements of Rule 64(2).

As regards the deponent’s capacity and authority, the deponent states in paragraph 1 of the founding affidavit that she is “duly authorised by Applicant to depose to this affidavit the facts of which I am aware”. However, the capacity in which the deponent is authorised to depose does not appear *ex facie* the affidavit. Nevertheless, despite this deficiency, there is nothing in the opposing papers or submissions to suggest that the deponent was not aware of the facts deposed to in her affidavit. Again, I take the view that the averments contained in the founding affidavit are in substantial compliance with the requirements of Rule 64(2).

Accordingly, given that there is substantial compliance with the governing rules and in order to avoid delaying the final determination of this case, I am inclined to hold that a departure from strict compliance with the rules can and should be condoned in this case. This approach is sanctioned by and entirely in accord with the provisions of Rule 4C(a) of the High Court Rules,1971. (See also *Koppell Gilbert (Pvt) Ltd v Alistair Campbell* HC-H 117/1989). It follows that the respondent’s objections *in limine* have not been sustained and must therefore be dismissed.

Material disputes of fact for trial

The respondent claims that the applicant has barred the respondent from using certain toilets and has blocked the fire escape. The applicant denies these allegations and contends that the applicant could not possibly continue to operate its bar and nightclub business if its allegations were true. Clearly, there is a dispute of fact in this regard. However, whether or not this dispute is material depends upon the legality of withholding rent payments on the grounds alleged by the respondent. In view of the position that I take later in this judgement, this dispute is clearly not material and does not warrant determination by trial.

The respondent also claims that it has tendered payment of reasonable rent to the applicant. However, the respondent does not indicate how much was tendered, at what stage it was tendered and to whom the money in question was tendered. More importantly, this averment was not made in its plea and was only raised in the respondent’s opposing affidavit, two months later. In its plea, the respondent merely cites its lack of access to the toilets and the fire escape as the basis for withholding rentals. In view of this clear contradiction and the generality of the respondent’s averments in this regard without specific detail, the court is unable to decide whether the facts averred, if proved at a trial, will constitute a valid defence. Accordingly, I am of the view that there is no material dispute of fact of a triable standard in this regard.

**Entitlement to withhold rentals**

At common law, a tenant is not entitled to withhold rent if he is denied the occupation or use of only part of the tenanted premises. He can only do so in the event that he is deprived of the occupation and use of the entire leased premises and where the lease has been duly terminated or cancelled for that reason. In all other cases, the tenant is confined to the remedies of interdict and/or damages or set-off against the cost of repairs effected by himself. He cannot withhold or claim remission of rent. (See Cooper: *Landlord and Tenant*, 2nd ed., at p. 123 and Kerr: *The Law of Lease*, 2nd ed., at pp. 50-51).

This common law position is clearly reflected in clause 13 of the lease agreement concluded by the parties *in casu*. Additionally, clause 13 entitles the lessee to an abatement in rent during any period in which the leased premises are not wholly fit for occupation. As I see it, an abatement of rent entails a proportionate reduction in the rental amount and not the withholding of the entire amount. Moreover, any abatement due under clause 13 is to be determined by mutual agreement or by arbitration. It cannot be unilaterally fixed and withheld by the lessee.

In the present case, even if the respondent has been denied the use of some toilets and the fire escape, as it alleges, it is not entitled to unilaterally withhold the full amount of rent payments due under the lease agreement. By so doing, it is in clear breach of its obligations under the lease agreement.

**Ejectment through summary judgement**

Under our law, it is now well established that a claim for eviction is a liquid claim. Accordingly, ejectment from leased premises may be claimed and granted by way of summary judgement. (See *Morris v Stern* 1969 (2) RLR 427 and *Ncube v Semwayo* HC-H 1101/91, following local and earlier Cape decisions on this point). The respondent’s resistance to the applicant’s claim is clearly ill-founded in this respect and cannot be upheld.

**Statutory tenancy**

Sections 22, 23 and 24 of the Commercial Premises (Rent) Regulations, 1983 (S.I. 676/1983), create what is commonly known as a statutory tenancy upon the expiry of a contractual lease. Under these provisions of the Regulations, a statutory tenancy continues for an indefinite period on the same terms and conditions as applied to the pre-existing contractual lease. Thereafter, so long as the tenant abides by the terms of the expired lease, including paying the rent due within 7 days of due date, he is statutorily protected from eviction. However, if the tenant materially breaches any term of the statutory tenancy, the lessor is entitled to seek the eviction of the tenant through the courts.

For ejectment to be granted, the lessor must show, firstly, that the lease has expired, either by effluxion of time or in consequence of notice duly given by the lessor. (In passing, it is pertinent to observe that the references in section 22 to expiry by effluxion of time or by notice are probably not intended to be exhaustive of the modes of expiry that might arise. At any rate, it is not necessary to delve into this aspect for present purposes). Secondly, the lessor must establish that he has good and sufficient grounds for requiring ejectment, other than his desire to increase the rent or to lease the premises to some other person.

**Legal status after termination of lease**

In terms of clause 2(a) of the lease agreement *in casu*, the lease was of 6 months duration. Thereafter, under clause 2(b), the lease continues indefinitely, on the same terms other than the amount of rent payable, subject to 2 months written notice of termination by the lessor or the lessee. However, if the lessee materially breaches the lease conditions by not paying the rent due timeously, clause 17(a) of the agreement entitles the lessor, notwithstanding clause 2(b), to cancel the lease forthwith, i.e. without any notice period.

In the instant case, the respondent failed to pay the rentals due after the expiry of the initial 6 month period of the lease on the 31st of May 2004. Thereafter, on the 22nd of July 2004, the applicant instituted the present action for ejectment, payment of arrear rentals and damages.

Ordinarily, upon its expiry on the 31st of May 2004, the lease would have continued as a consensual tenancy for an indefinite period, subject to 2 months notice of termination, as per clause 2(b) of the lease agreement. However, the respondent’s failure to pay rent on the relevant due dates, viz. on the 1st of June and 1st of July 2004, rendered clause 2(b) inoperative and the lease must be regarded as having expired by effluxion of time on the 31st of May 2004. The respondent then immediately became a statutory tenant under Part IV of the 1983 Regulations. Thereafter, in order to continue to enjoy its statutory tenancy status, the respondent was obliged to pay the rentals within 7 days of due date. *In casu*, the respondent failed to do so and consequently forfeited any entitlement to the protection afforded by section 22 of the 1983 Regulations.
 Alternatively, the consensual lease must be assumed to have continued to subsist after the expiry of its original 6 month period on 31 May 2004, in terms of clause 2(b) of the lease agreement. It is not clear from the papers and the submissions before the Court as to precisely when and how the applicant cancelled the lease agreement, in terms of clause 17(a), on the grounds of the respondent’s failure to pay rentals timeously. Nevertheless, whatever the factual position in this respect, the lease *in casu* must be regarded as having been cancelled by the applicant, at the latest, when it served its summons on the respondent on the 22nd of July 2004. At common law, it is clear that the service of summons claiming the ejectment of a lessee is considered to be notification of cancellation of the lease agreement. (See Kerr, *supra*, at pp. 100-102, and the authorities there cited).

In both cases, whether the lease *in casu* was terminated upon its expiry on the 31st of May 2004 or was cancelled by the issuance of summons on the 22nd of July 2004, it is undisputed that the respondent failed to effect the payment of rentals timeously, viz. by the 1st of each month in terms of the lease agreement or within 7 days of due date under the statutory tenancy. Accordingly, in either event, the respondent must be treated as having ceased to enjoy any protection from ejectment in terms of section 22 of the 1983 Regulations.

**Statutory notice to vacate before eviction**

Having decided the respondent’s tenancy status at the critical stage, there remains one further question for determination. Was any further notice to vacate, either statutory or otherwise, required before the applicant could institute the present proceedings for the respondent’s ejectment from the leased premises? The answer to this question, in my view, must be in the negative.

By reason of the respondent having failed to pay the rentals due timeously in terms of the lease agreement, the lease automatically expired by effluxion of time on the 31st of May 2004. Alternatively, the lease is deemed to have been cancelled by notice upon the issuance and service of summons on the 22nd of July 2004. In this respect, the decision of this Court in *Parkview Properties (Pvt) Ltd v Chimbwanda* 1998 (1) ZLR 408 is clearly distinguishable on the facts. In that case, the rent due had been properly paid for the month during which summons was issued and the lessor was therefore held disentitled to cancel the lease so long as timeous rent payments were being made. *In casu*, the rentals due were not timeously paid at any stage after the 31st of May 2004 and before the issuance of summons on the 22nd of July 2004.

As I have already stated, section 22 of the 1983 Regulations contemplates the possibility of ejectment upon the expiry of a lease by effluxion of time or following notice given by the lessor. The section cannot be construed to require any further notice to the lessee before seeking his ejectment. Certainly, there is nothing in the wording of section 22, whether express or implied, to support any contrary interpretation. It follows that the applicant *in casu* was entitled to institute the present proceedings for ejectment without having to furnish the respondent with any further notice to vacate.

Justification for ejectment

On the facts established in this matter, the material ground for seeking the respondent’s ejectment is not that it declined to agree to the proposed increase in rent but that it failed to pay any rentals after the 31st of May 2004. The failure to pay rent on time is critical not only in the case of a statutory tenancy but also in the case of a contractual lease where the lease agreement contains a forfeiture or cancellation clause. In both cases, the lessee’s failure to pay rent timeously amounts to a major breach of the lease justifying its cancellation and the ejectment of the lessee. (See Kerr, *supra*, at pp. 92 & 96-97). Having regard to all the material facts in this case, I am satisfied that the respondent’s breach *in casu* constitutes good and sufficient grounds for its ejectment and that it has ceased to be entitled to the protection afforded to a statutory tenant.


Finally, by virtue of the reasons stated earlier in this judgement, I am also satisfied that the respondent has no bona fide defence to the applicant’s claim for ejectment, arrear rentals and holding over damages.

Accordingly, the applicant’s claim succeeds and it is entitled to the relief that it seeks – except as regards formal termination of the lease and the claim for immediate eviction. As regards termination, there is no need for an order formally terminating the lease agreement since it has already been terminated, as I have indicated above, either by effluxion of time on the 31st of May 2004 or by cancellation upon service of the summons on the 22nd of July 2004. As for the proposed date of ejectment, I take the view that the circumstances in casu warrant that the respondent be given some leeway to vacate the leased premises.

**Order**

In the result, it is ordered that summary judgement be and is hereby entered against the respondent in favour of the applicant for:

(i) Ejectment of the respondent, within 30 days from the date of this Order, from the property known as First Floor, South Wing, Benhay Art House, No. 130 Chinhoyi Street, Harare.

(ii) Payment of arrear rentals for the months of June and July 2004, at the rate of $2,020,000.00 per month, together with interest thereon from the 1st of June 2004 to the date of payment, at the rate of 40% per annum compounded monthly in accordance with clause 17(b) of the lease agreement.

(iii) Payment of holding over damages from the 1st of August 2004 to the date of the respondent’s eviction, at the rate of $2,020,000.00 per month, together with interest thereon from the 1st of August 2004 to the date of payment, at the rate of 40% per annum compounded monthly in accordance with clause 17(b) of the lease agreement.


(iv) Payment of costs of suit on a legal practitioner and client scale in accordance with clause 17(d) of the lease agreement.

*Gill, Godlonton & Gerrans*, legal practitioners for the applicant.
*Chihambakwe, Mutizwa & Partners*, legal practitioners for the respondent.
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