Raygar Properties (Pvt) Ltd v Rauf Abdul Mandhu

### Preamble
HH 86-2007
HC 373/07
RAYGAR PROPERTIES (PVT) LTD
versus
RAUF ABDUL MANDHU
---------


==============================

RAYGAR PROPERTIES (PVT) LTD
versus
RAUF ABDUL MANDHU

HIGH COURT OF ZIMBABWE
KUDYA J
HARARE, 13-16 November and 5 December 2007

Civil Trial

Mr P.C. Paul, for the plaintiff
Mr P. Ranchhod, for the defendant

KUDYA J: The plaintiff company seeks the eviction of the defendant from 5 Windermere Road Strathaven in Harare (“the property”), holding over damages and costs of suit on a legal practitioner and client scale.

THE PLEADINGS

The plaintiff issued summons on 24 January 2007 and served it on 27 January. An appearance to defend was filed on 30 January. The defendant requested for further particulars on 15 February, which were supplied on 21 February. The plea was filed on 26 March and the replication on 28 August. The pre-trial conference was held on 29 August.

THE ISSUES

Four issues were referred to trial. These were:

1. Did plaintiff enter into any lease agreement with defendant? And if so, what were the terms and conditions thereof
2. If a lease agreement was entered into did defendant commit a breach of any of the terms thereof
3. If the late Mr. Gard purported to enter into any agreement with the defendant, was he authorized to do so
4. Is plaintiff entitled to damages for holding over and if so in what amount?


THE EVIDENCE

The plaintiff called the evidence of 5 witnesses. These were Judith Guzha, Lynda Claire Hoggarth and her husband Melvin Hoggarth, Jonathan Shaw and Shahid Siddiqui. The defendant was the only witness in his case. A total of 12 documentary exhibits were produced by the parties.

The plaintiff’s case

Judith Guzha (“Judith”) works as a property controller in the letting department of Tony West Real Estate (Pvt) Ltd (“TWRE or the estate agent”). Her evidence was to the following effect. She has been with the estate agent since 2001. She outlined the process followed by the estate agent in executing a lease. A prospective tenant collects a residential tenancy application form from them. It contains information on the property sought, monthly rental; occupation date; period of lease and deposit. It also has space for the personal details of the tenant, which is used to assess his suitability as a tenant. The second page has a portion for a guarantor; six conditions for the attention of the tenant, and provision for full name, signature and date. The last portion is filled in by the estate agent.

The assessment is done through Dunn and Bradstreet. A confirmed prospective tenant signs the lease, pays the good tenancy deposit and rental before he takes occupation.

In the present matter, the sequence of events was as follows. Mr M.C. Gard (“Gard”) whom she referred to as the owner through out her testimony gave them a mandate to find a suitable tenant for the house in question. He completed their standard management instruction form, exhibit 1, on 22 June 2006 and facsimiled it to them on 3 July 2006. The length of the tenancy was 12 months. It was available immediately at a negotiable rental. Twelve conditions were set out in the management instruction. Condition 9 directed that no expenditure could be done on any necessary and essential repairs to the house without his prior consent or in his absence that of Melvin Hoggarth (“Melvin”). He added one special instruction to the effect that rent was to be reviewed every three months. The management form gave the plaintiff company as the registered owner of the property.

At the time the mandate was given there was a tenant who was leasing the house directly through Gard. The estate agent assessed the market value of rentals at that time at $70
000.00. The sitting tenant terminated his lease because he was unable to pay the suggested rental.

Jonathan Shaw was the general manager at the time that Gard gave the mandate to the estate agent. He left the estate agent in December 2006 and joined Realty Africa. He supplied the background information on how the estate agent received the mandate. He was with the then letting manager at TWRE Ramsey Diwara when he held a discussion with Gard and Melvin in Melvin’s office at the Bluff Hill Industrial Park. His testimony in this regard was confirmed by Melvin. Melvin shared an office with his father-in-law Gard who was 74 years old. His wife was suffering from Alzheimer’s disease. His savings had been depleted by inflation. He at first worked for his son-in-law during mornings only from Monday to Friday but this had been reduced to three days a week. He was confused by the rate at which prices were escalating. He was drinking heavily, had stomach ulcers and was severely stressed by the vicissitudes of life that buffeted him from all angles. He had been managing the lease of the house to the three tenants who preceded the defendant. The meeting in Melvin’s office had been at the suggestion of his daughter Lynda Claire Hoggarth, Melvin’s wife. Lynda had held a meeting with her father and her husband and they had agreed that he needed a reasonable flow of income to look after his wife and be with her more often. They had agreed that he was to assign the management of the property to a professional estate agent.

The result of the meeting was that on 22 June 2006, Melvin completed the management instruction form in the presence of Gard who could not do it himself as he had hurt his arm. Gard, however managed to fill in his banking details and append his signature on it. The form was then faxed to the estate agent on 3 July 2007.

Judith stated that on receipt of exhibit 1, she looked for a tenant. She found one who was interested in paying a rental of $120 000.00 per month for the house. She stopped this prospective tenant from submitting the tenancy form after Gard telephonically advised her that he was sending the defendant to the estate agent as his preferred prospective tenant. It was clear from her testimony that Gard directed her to follow the estate agent’s procedures of vetting the applicant through the application form and if found suitable the tenant was to sign a lease, pay rent and a good tenancy deposit in advance.

Melvin stated that the defendant came to see Gard at the Bluff Hill office. He was not available. Melvin then referred the defendant to the estate agent. Jonathan stated that he was advised by Gard not to place the house onto the market because he had found the defendant who was interested in leasing it out. He had advised him to refer the defendant to the estate agent to complete the tenancy application form for the verification of his creditworthiness. The defendant eventually came to his office. He had partially completed the application form, exhibit 2. Judith saw him in Jonathan’s office with exhibit 2. The form indicated that the right to accept the application was the prerogative of the owner. Next to those words the defendant had written “agreed by the owner”. The defendant wrote that the property was to be leased at a monthly rental of $60 000.00 from 1 September 2006 for a period of 3 years with a three year option and no deposit was payable. The defendant gave his full name, identity number, date of birth, occupation contact business, home and cellular numbers, his marital status, the name of his wife and the ages of his two children, his bank and account number. He did not supply his salary, the name of his previous employer, his present address, the owner or estate agent who handled his current lease, his reasons for vacating, two trade references and guarantor.

He cancelled the fifth condition which required a good tenancy deposit and indicated against the second condition that he was in discussions with the lessor on whether he was leasing the property as it stood, and referred to an attached list. Jonathan said he saw the list of the 17 items that required attention. The defendant inserted that rent was to be paid within 7 days as opposed to by the first day of each month. It was signed on 8 August 2006. The figure of the month was altered from 9 to 8 and the alteration was countersigned by the defendant only. Judith alleged that she asked him why he had omitted to complete the whole form and he responded that he had discussed the requested information with the owner. That he dealt with Judith over the form was confirmed by Jonathan, who stated that he referred the defendant to her in her capacity as the property consultant.

Jonathan did not recall when exhibit 2 was returned by the defendant. Judith believed after consulting the memorandum that she wrote on 23 August, which was in her file, that it was submitted together with the list of repairs on any one of the dates between 19 and 22 August 2006 and not on 8 August. She said this was because she must have written that memorandum a day or two after receipt of the application.

The submission of the application form prompted both Judith and Jonathan to individually contact Gard. Judith stated that Gard insisted that he had sent the defendant to them so that they would deal with him in accordance with their standard procedures. Gard did not confirm that he was in discussion with the defendant over the list of repairs that was compiled by the defendant. He had not agreed on the cancelled portions. Jonathan stated that when he brought the application form and the list of repairs, the defendant indicated that he had agreed with Gard that the costs of the repairs would be deducted from the rentals. He had told the defendant that the estate agent would need to see the receipts of the work done and he gave him some of the receipts of work done. This was clear proof to my mind that the form was returned after the work in exhibit 6 and 7 of fixing the wardrobe and cupboard keys by Multi-Weld (Pvt) Ltd on 17 August, the cleaning of the carpet by Carpet Kings on 18 August and the fumigation by Pest Exterminators on 22 August had been done. These were done after 8 August.

Jonathan discussed with Gard the defendant’s request for a three year lease. He recommended the prevailing trend in the business of annual leases with a three month rent review to him. He further advised him to step back from the negotiations and leave these to the estate agent which he had mandated to act on his behalf. He also told him that the suggested method of deducting rentals from the repairs of the 17 items would not work as it would deprive the estate agent of income.

Judith stated that Gard told her that the defendant was pestering him to pay $60 000.00 and do the repairs for which he would be refunded. Gard refused to refund him for fumigation of fleas but would accept the repair and replacement of items. It appeared from Judith’s testimony that Gard was ready to accept a rental of $60 000.00 rather than $120 000.00 because the defendant was prepared to carry out some repairs at the property. It was also for the same reason that he was to pay the good tenancy deposit for one and not two months as stated in condition 5 of the management instruction. She advised him of the market trend in leasing and he agreed that the defendant be given a six month lease in accordance with this trend and if he proved to be a good tenant this was to be increased to 12 months and if he continued to acquit himself well then it could be reviewed to 3 years. She then prepared the lease agreement, exhibit 3, on 23 August 2006. It was for a period of 6 months and provided for the review of rentals every 3 months. The rental was set at $60 000.00 per month. Judith further stated that the defendant never availed himself to sign the lease, which took her 45 minutes to craft, even though she requested him to return after two to three hours.


Lynda and her husband Melvin told the Court that Gard left with his wife for Cape Town, for holiday around 1 September 2006, where he passed away on 24 September 2006. Before he left he advised Melvin that defendant had signed the lease and he had given him vacant possession of the property. It was only when they were dealing with his estate that they discovered that the defendant had not signed any lease, paid rent nor the good tenancy deposit. Lynda visited him at the property in a bid to persuade him to vacate the house in order to enable her to find the wherewithal to support her mother. The defendant refused to negotiate his exit and insisted that he had a verbal 3 year lease agreement with her late father. She issued summons in casu and she in her name took him to the rent board, where even though he lost, he remains ensconced in the house as the rent board matter was appealed to the Administrative Court. Melvin took four pictures of the house in March 2007, which were produced as exhibit 4. Both did not believe Gard entered into the verbal lease with the defendant in the terms spelt out by defendant as these were at variance with the reason for going to TWRE and the terms set out in the mandate. It was absurd to agree to a flat $60 000.00 per month for 3 years, when the mandate was for rent review every three months. They thereafter declined to accept cheques tendered by the defendant as rent.

On 12 September 2006, a property inspector of the estate agent Mr. Wenyika went and inspected the property. Three days latter an irate defendant came to Judith complaining about water and threatened electricity disconnections at the property.

Lynda mandated her husband to contact the estate agent and request them to give two months notice to the defendant. Melvin wrote exhibit 8 on 11 October 2006 to the estate agent for the defendant to vacate the house on 30 November 2006. Judith then wrote exhibit 9 on 16 October 2006 giving him the notice to vacate. She failed to explain why exhibit 10 was dated 19 September 2006, yet it appeared to have been written on Melvin’s instructions. Her explanation that she had by then received verbal instructions for the defendant to vacate and had written to him to do so but he had insisted on seeing the written instructions did not make sense to me as the instruction was not given during the lifetime of Gard. It was either that she mistakenly printed the wrong month on the letter or she deliberately backdated the letter. Her failure to give a satisfactory explanation concerning this letter was a dent on her credibility.

The suggestion was made by Mr Ranchhod that exhibit 3 was a contrived document as it was not taken to defendant for signature either on 12 September or when he visited the estate agent on 15 September or at any other time before the death of Gard or even during the Rent Board proceedings despite the request for its production. The document that was produced in court was incomplete. It ends at page 10 and as no signature clause. When she referred to her file in Court, the copy she had had page 11, which contained the signature clause. Under cross examination she stated that it normally took 45 minutes to compile a lease agreement and that the defendant did not return to sign it in the two to three hour interval she asked him to return for that purpose when he came on 23 August. She also added that he refused to sit down and sign the lease agreement when he came on 15 September, for he was very angry. I am unable to hold that exhibit 3 was contrived for the reason that Jonathan testified that he saw the lease agreement soon after Judith had compiled it. Melvin also stated that he saw it on his return from South Africa where he had gone to collect his father-in-law’s body and his mother-in-law.

Under cross examination Judith, Lynda, Melvin and Jonathan all agreed that at some point in August 2006 the defendant discussed about the lease with Gard in their absence. They were therefore not privy to what transpired during those discussions. They all accepted that the defendant was not privy to the management instruction that had been given to the estate agent when he carried out these discussions with Gard. While Judith stated that she believed that the tenant who preceded the defendant Hans Colhurst was still in residence when the management instruction was received by the estate agent, I accept Melvin and Jonathan’s version that he had left. This is because occupation was to be immediate. If there was still a tenant I believe it would have been worded differently.

On the mental state of Gard, Judith confessed that she never physically came into contact with him. She only dealt with him over the phone. He sounded perfect to her. His daughter stated that he had an unstable mental make up during the last two years of his life. He was old and senile. Her version was corroborated by that of her husband. Jonathan also confirmed this by stating that at times he sounded confused over the phone. These averments were not challenged in cross examination. The other aspects of their testimonies that went unchallenged in cross examination were the averments by both Melvin and Lynda that the deceased often complained that the defendant was “hustling” him. Melvin’s version that he was the one who referred the defendant to TWRE was also not controverted in cross examination. The failure to controvert them meant that the defendant accepted them as the truth. His attempts to explain them away in his own version could not remove this inference.


He gave the impression that he was attempting to close the stable door after the horse had bolted.

Exhibit 5 was written on 15 September 2006 by Judith to Melvin. She asked him to attend to the 17 points of repairs and the telephone and electricity bills that had been submitted by the tenant. On the same day she wrote to the defendant advising him to pay for the telephone and electricity bills, which the owner declined to settle because he was not receiving any rentals from the property, and retain the receipts. Judith stated under cross examination that the owner she referred to was Melvin as by that date Gard who was already in South Africa was unreachable. Regrettably, this aspect was not explored with Melvin when he testified.

Jonathan and Judith maintained under cross examination that Gard revealed to them that he released the keys to the defendant after he intimated to him that he had signed the lease. Jonathan stated that the defendant had said to him he believed that exhibit 2 was the lease agreement. Melvin confirmed that Gard believed that the defendant had signed the lease before he left for holiday.

The last witness was Shahid Siddiqui. He has 12 years experience in the real estate business. He works for Realty Africa as its Sales and Letting executive. He left TWRE in 2005. He was called as the expert witness on market rentals for the period 1 September 2006 to 1 December 2007. He estimated the market rentals for 1 September 2006 for the property at between $80 000.00 and $100 000.00; for the quarter beginning 1 December 2006 at $250 000.00; for the quarter beginning 1 March 2007 at between $3 million and $4 million; the quarter beginning 1 June 2007 at between $10 million and $12 million; for the quarter commencing 1 September 2007 at $150 million and for the quarter commencing 1 December 2007 at $400 million. He stated that he compared the house with similar houses in the locality to arrive at these figures. He further stated that the house had an occupation value of between US$350 and US$400, which he converted using the parallel rate to arrive at the figures he gave. His basis for arriving at the market value was outlawed by section 17C of The Presidential Powers (Temporary Measures) (Amendment of National Incomes and Pricing Commission Act and Education Act) Regulations SI 159A/2007. Under cross examination he accepted that he used the parallel market rate to arrive at the market value. He was adamant that the value of occupation in September 2006 would have been at most $100 000.00.


Judith placed the value of occupation as at the date that she testified, 13 November 2007, at $350 million. Jonathan placed it as at 1 September 2006 at $60 000.00. None of the plaintiff’s witnesses put it at $600 000.00.

The defendant’s version

The defendant stated that he was looking for accommodation in August 2006. Shaheen Abdulla, his brother-in-law referred him to Melvin who in turn referred him to Gard. Melvin who shared an office with Gard left the two to discuss business. The two went to view the house. It was vacant. The previous tenant lived in doors with 16 dogs. The house was infested with fleas. The laundry sink was blocked. The toilet in the domestic quarters was broken. The second toilet in the main house was leaking. The electrical geyser in the servants’ quarters had been stolen causing the quarters to have an electrical fault. The door locks in the kitchen were not working and the main bedroom cupboards required attention. The Jacuzzi and pool pumps were missing. The pool required draining and needed to be covered by canvass to prevent mosquitoes from breeding. Three sides were durawalled and the fourth required a durawall. There was need to construct a driveway from the gate to the two back garages. He drew a list of 17 items that required attention at the premises.

The two struck a rapport. Gard wanted a long lease by a person who would look after the house and add value to it. Gard set the rent at $60 000.00. The lease period was three years with a renewal option of three years. The defendant agreed to first carry out minor repairs and to do the bigger projects latter at his own expense. He identified the minor repairs as cleaning the walls, cupboards, windows and the laundry sink and repairing broken toilets and stopping water leaks. Gard invited him to take occupation as early as possible to safeguard the house from vandalism and thefts. He declined and preferred to take occupation on 1 September 2006. Gard agreed to forego the need for good tenancy deposit as the defendant was to repair the damage. The two agreed that the cost of repairs would be deducted from the rentals.

After they had agreed on the terms, Gard referred him to the estate agent to fill details for Tony West Real Estate for the preparation of the lease agreement. At the estate agent, he completed exhibit 2 on 8 August in Jonathan’s office. The two of them went through it. This was not put to Jonathan when he was cross examined. Judith was then called by Jonathan and was asked to draw the lease. Jonathan did not comment on the amendments in exhibit 2. The defendant stated that he was not told what would happen next. He went to the premises and met Gard. He declined to occupy the property before it was habitable. Gard put two workers to protect the property. He was given the keys to clean the house on 14 August. He repaired cupboard and door keys on 17 August; cleaned the carpet on 18 August and fumigated the house for fleas twice by 22 August.

He took occupation on 1 September 2006. He never signed any lease agreement. He was never requested to do so on any of the times he visited the estate agent to leave the telephone bills and municipal bills of the previous tenant. Wenyika, the property inspector did not bring the lease to him when he came to inspect the property on 12 September. On 15 September, when he went to complain about the cessation of telephone and water services he saw Judith who never asked him to sign the lease. Judith even wrote to him exhibit 5A requesting him to pay the previous tenant’s bills and retain the receipts as the owner could not settle them as he was not receiving rentals. He never requested to sign the lease agreement, yet he wrote to the estate agent to come and inspect the property on 31 August. He was not requested to pay rent or the good tenancy deposit.

He carried out repairs to the electrical gate, vertical blinds, alarm system and paid the previous tenant’s expenses. These cost him $224 173.53. When I added the cost of the list in exhibit 11, the 12 documents that he produced to show the expenses, they totaled $229 592.77. I noted that three of the documents produced as exhibit 11 related to the repairs done by Guard Alert Electronics at 5 Viscount Dent Ridgeview, the place where he used to reside before he came to the property, to the tune of $34 132.00, on 30 April and 30 September 2006. The invoices were addressed to him at the plaintiff’s property. The production of wrong documents does impair the defendant’s credibility. It becomes difficulty to accept that the other receipts refer to repairs that were done at the leased property. If indeed he carried them out, they cost him $190 041.53 between August and 31 October 2006.

He claimed that Lynda gave him the right of first refusal when she came to persuade him to vacate. I find this incredible, especially in the light of his uncooperative attitude towards her. He was not even moved by the plight of Mrs Gard. To her credit Lynda stated that he asked to buy the property but she made no commitment in that regard.
 He alleged that he never saw exhibit 10 or the lease agreement despite requesting for its production during the rent board hearing. He did not commence building the fourth wall or the paved driveway or replace the Jacuzzi and swimming pool pumps.

He alleged that after the visit by Lynda, Melvin came with Mr Jacobs. They interrogated him and harassed him by seeking to see the repairs that he had done. He ran into the house in fear and threatened to call the police. Melvin was not cross examined on this aspect of instilling fear into him. He tendered rent of $75,000.00 for December 2006 and January 2007 and thereafter tendered rentals of $60,000.00 per month until 31st August 2007 when he unilaterally increased it, as per exhibit 12, to $1 million. These amounts were returned by the plaintiff.

He was agitated during cross examination. He failed to answer simple questions that were put to him. He sought to anticipate questions, answered what had not been asked and forgot the questions that had been asked. At times his legal practitioner had to intervene to restrain his excesses. He exhibited an angry countenance.

It emerged during cross examination that the words ‘in discussion as per list attached’ in condition two on page 2 of exhibit 2 meant that further discussions were to be conducted between him and Gard on the bigger repair and construction projects like the driveway, fourth wall and the Jacuzzi and pool pumps where the two were to source quotations and discuss them. The addition of within 7 days as the outer limit for payment of rent had been discussed with Gard. For the first time he explained that he cancelled the good tenancy clause because he had agreed with Gard that he would expend money on repairs. He accepted that he came to TWRE for the lease agreement.

He was to pay the rates, even though he was the tenant. He was shown a rates bill of $9 million which he said he did not pay because it was not sent to him. He thus continued to pay $60,000.00 per month. He mentioned for the first time that he agreed with Gard that the rentals were reviewable annually, as confirmed by Jonathan. The impression he had given in exhibit 2 was that the rentals were fixed for 3 years at $60,000.00 per month. It seemed to me that the absurdity of this suggestion, especially in a hyperinflationary environment must have made him realize that the terms he alleged he reached with Gard were incredulous.

He could not answer how the amount for the repairs would be established.
 He refused to accept the market value of occupation that was suggested by Siddiqui for the reason that it was based on the parallel market rate of the local currency to the United States dollar. He, however, accepted that he assigned Prestige Real Estate to assess the value of rent for the property, which was set at $80,000.00 per month as at 1 September 2006 and $150 million per month as at 1 September 2007. His suggestion that he was not aware of the existence of the lease agreement until 28 August 2007 was disproved by his written submission to the rent board which categorically stated that TWRE prepared the lease agreement after he had been given the keys to occupy the house.

The defendant was not a good witness. He seemed to me to be a cunning man who decided to capitalize on the death of Gard in order to prolong his stay at the property in question without a lease agreement. His version of the verbal lease was incredible. The probabilities in my view show that Gard assigned the letting of the house to TWRE. That is the sum total of Melvin, Judith and Jonathan’s testimony. This was after he had agreed to this course of action with his other co-director and daughter, Lynda. It was all done in order to relieve the stress that he was operating under. It does not seem to me that the defendant can be better placed to assess the character of Gard than his daughter and son-in-law. The discussions he had with Gard are similar to invitations to treat. Gard did not accept the defendant’s offer and terms. He may have found them attractive but he deferred acceptance to the professional advice of the estate agent. If he wanted to conclude a lease agreement with the defendant one would have expected him to act as he had done previously with the preceding three tenants, when he did not use professional advice and services. He referred defendant to the professionals for them to adopt and apply their procedures.

I accept that after the defendant deposited the application form; he misled Gard that he had signed a lease agreement at the estate agent. Both Judith and Jonathan had advised him that they would implement the current trend in lease agreements. The version of Melvin confirms that Gard left for South Africa under the misapprehension that the defendant had signed the lease agreement. It was clear from Judith’s version that the defendant was under the misapprehension that the tenancy application form was the lease agreement. He had signed it. He had cancelled clauses he believed were onerous to him. He took no steps to sign a lease, yet he acted as if the estate agent was responsible for Gard’s affairs. He wrote to the estate agent and Wenyika came. He complained to it when the telephone was disconnected. He sent to it the previous tenant’s bills. These actions confirmed Judith’s story that the defendant believed that when he signed the application for tenancy he had executed the lease agreement.

I find that notwithstanding some unsatisfactory aspects in Judith’s testimony, the probabilities favour the plaintiff’s rather than the defendant’s version on what transpired. The major hurdle is cast in the defendant’s version by the rules that relate to hearsay. Section 27 of the Civil Evidence Act [Chapter 8:01] states that:

“27 First-hand hearsay evidence

(1) Subject to this section evidence of a statement made by any person, whether orally or in writing or otherwise, shall be admissible in civil proceedings as evidence of any fact mentioned or disclosed in the statement, if direct oral evidence by that person of that fact would be admissible in those proceedings.

(2) Evidence of a statement referred to in subsection (1) shall be admissible even where the person who made the statement is called as a witness in the proceedings concerned.

(3) If a statement referred to in subsection (1)—

(a) is not contained in a document, no evidence of the statement shall be admissible unless it is given by a person who saw, heard or otherwise perceived the statement being made;

(b) is contained in a document, no evidence of the statement shall be admissible except the document itself, or a copy of the document if such copy is admissible in terms of this Act or any other law.

(4) In estimating the weight, if any, to be given to evidence of a statement that has been admitted in terms of subsection (1), the court shall have regard to all the circumstances affecting its accuracy or otherwise and, in particular, to—

(a) whether or not the statement was made at a time when the facts contained in it were or may reasonably be supposed to have been fresh in the mind of the person who made the statement; and

(b) whether or not the person who made the statement had any incentive, or might have been affected by the circumstances, to conceal or misrepresent any fact.

(5) This section shall not be construed as limiting any provision of this Act or any other law providing for the admissibility of statements made by persons who are not called as witnesses to testify to such statements.”

It permits the recital of any statement made by Gard directly to any of the witnesses who testified for both parties in this trial. The weight of that evidence is measured against the provisions of subsection (4) (a) and (b), above cited. **Hoffmann and Zeffertt in The South African Law of Evidence 4th edition** at page 636 deal with declarations made in the course of duty. **May in South African Cases and Statutes on Evidence 4th edition** at page 226-7 cover the same ground under declarations made in the course of duty or business. The maker must have died; had a duty to act and record; acted contemporaneously with the statement and lacked a motive to misrepresent.

The evidence of the plaintiff meets these requirements in so far as exhibit 1 confirms that Gard decided to delegate the leasing of the property to TWRE. Lynda, Melvin, Judith and Jonathan’s evidence confirms the accuracy of exhibit 1, the management instruction. The acts of Gard in dealing with the defendant confirm that his actions were in conformity with those instructions. That was why he would instruct Judith and Jonathan to apply their procedures. It explains why the defendant was referred to the estate agent. At the relevant time both Judith and Jonathan talked to him and received his instructions on the issue. The version of these witnesses reveal that Gard had talked to the defendant but that he had not entered into a verbal contract with him. He wanted the discussions taken into account in the written contract of lease drawn by TWRE. His conduct suggests to my mind that the written lease would bind the parties. This is clear from Melvin’s version that when he left for South Africa he believed that the defendant had signed a lease agreement.

There is no written document between Gard and the defendant that confirms the defendant’s version. The document that the defendant relies on was the application form, exhibit 2, which he completed. It was demonstrated during his cross examination that it was a misleading document. It did not record the full terms he alleged he verbally agreed with Gard. It omitted to mention that an annual review of rent would be carried out. It gave the impression that he was to pay a fixed rental for the three years. It contradicted the special clause in exhibit 1 for a quarterly review in rent. In the prevailing hyperinflationary environment, a fixed rental would defeat the very purpose Gard engaged the estate agent. He wanted a steady source of income to support his sick wife. In fact, the defendant never averred that Gard agreed that he would not to pay rent. He alleged that the cost of repairs was to be deducted from the rentals paid. He accepted under cross examination that he was to submit the repair expenses to TWRE who were then to meet them from rentals paid. He did not explain why he did not pay the first rental.


The actions attributed to Gard by the defendant on the alleged contractual terms were contradicted by both Jonathan and Judith. It appeared to me that the defendant simply sought to snatch at an agreement when he realized that Gard had died. He had a motive to misrepresent the facts on the nature and import of his discussion with Gard. When this is viewed in the light of the misleading invoices for the repair of the alarm system at his former residence which he produced as exhibit 11, as evidence of the repairs that he carried out at the property, it becomes clear that he is a dishonest and untrustworthy person.

It is for these reasons that I disbelieved his version of events in those instances where it differed with that of the plaintiff. Thus even if Gard was held to have been an agent of the plaintiff, I would hold that he did not enter into a verbal lease agreement with the defendant.

**THE RESOLUTION OF THE ISSUES THAT WERE REFERRED TO TRIAL**

1. **Did plaintiff enter into any lease agreement with defendant? And if so, what were the terms and conditions thereof.**

Mr *Ranchhod* submitted that the plaintiff was the wrong party to sue in these proceedings because according to *Shell (Pvt) Ltd v Eliasov N.O.* 1979 (3) SA 9159(R) at 917H a party does not have to be the owner in order to let property. He submitted that this property was let by Gard and not by the owner. He also relied on Gubbay CJ in *Stewart Scott Kennedy v Mazongororo Syringes (Pvt) Ltd* 1996 (2) ZLR 565 (S) for the contention that the plaintiff could not be substituted for Gard. The facts in these two cases differ from those in the present matter. In *Eliasov’s* case the title holder had sold the property to Sheila and passed to it the risk and benefit associated with ownership before transfer of title. *Mazongororo Syringes, supra*, dealt with the question of whether a non existent party who issued summons could be substituted by an existing one. These issues do not arise in the present matter. His submission in this regard must therefore fail.

The plaintiff company did not enter into any lease agreement with the defendant. The onus to show the existence of a lease agreement lies on the defendant. The defendant sought to use Gard’s actions to bind the company. He relied on the provisions of paragraphs (a) and (b) of section 12 of the Companies Act [Chapter 24:03]. It states:

**“12 Presumption of regularity**
 Any person having dealings with a company or with someone deriving title from a company shall be entitled to make the following assumptions, and the company and anyone deriving title from it shall be estopped from denying their truth—

(a) that the company’s internal regulations have been duly complied with;
(b) that every person described in the company’s register of directors and secretaries, or in any return delivered to the Registrar by the company in terms of section one hundred and eighty-seven, as a director, manager or secretary of the company, has been duly appointed and has authority to exercise the functions customarily exercised by a director, manager or secretary, as the case may be, of a company carrying on business of the kind carried on by the company;

Mr Ranchhod argued as that Gard derived the title of director from the company; the plaintiff was estopped from dissociating itself from his actions. He contended that it was bound by his actions. I agree with Mr. Paul that the essence of this submission was that Gard had ostensible authority to act for the company. Mubako J in City Centre Hotel (Pvt) Ltd v Nyamanhindi 1999 (1) ZLR 81 (H) at 85E-86B stated thus:

“If T G P Nyamanhindi was the managing director, the purchaser might be able to claim ostensible authority on the basis of the rule in Turquand’s case (Royal British Bank v Turquand (1856) 6 E & B 119) so as to enforce the sale. But the papers describe Patrick Nyamanhindi as the managing director of applicant's hotel operations (opposing affidavit para 8(a)), a fact recognised by T G P Nyamanhindi who calls it ‘forced control of the company's business at City Centre Hotel’ (answering affidavit para 7). If T G P Nyamanhindi was not the managing director then he could not act alone without the authority of the board of directors. An ordinary person cannot bind the company unless expressly authorised by the board of directors or by the articles of association: Wolpert v Uitzigt Properties (Pvt) Ltd 1961 (2) SA 257 (W) at 267. This is a trite rule of law supported by a respectable pedigree of authority and common sense. SARGENT LJ stated the rule as follows in Houghton & Co v Nothard Lowe & Wills Ltd [1927] 1 KB 246:

“I know of no case in which a single director, acting without authority in fact, has been held capable of binding a company by a contract with a third party, merely on the ground that that third party assumed that the director had been given authority by the board to make the contract.”

Professor L C B Gower Modern Company Law 2 ed p 147 enunciated the rule with his usual clarity as follows:

“If therefore, the third party is dealing with the board of directors as a whole or with a managing director, he will usually be safe because, as we have seen, it is usual to confer the widest powers of management on those organs. But if he is dealing with an individual director (not being a managing director) he will not normally be protected, because a single director usually has no authority to bind the company” (the emphasis is mine).”

It was not averred that Gard was the managing director of the plaintiff. It was common cause that he was a director. Whether he had authority to act for the plaintiff in the manner suggested by the defendant would be a question of fact. The available evidence in the form of exhibit 1 shows the extent of the authority that he had. The defendant was not able to show that he had other authority to act outside the management instruction.

In, my view, section 12 of the Companies Act would not assist the defendant.

I thus hold that no lease agreement was entered into verbally by Gard for and on behalf of the plaintiff. Gard expected the defendant to execute a written lease agreement compiled by TWRE. Apparently the defendant believed that the application for tenancy form was the lease agreement and misled Gard into believing that a lease was in existence, hence the surrender of the keys of the property to him to occupy it on 1 September 2006. In the absence of a lease agreement with Gard, there could be no lease agreement with the plaintiff. There were no terms that had been agreed between the parties as they were still in discussion. Gard was willing to accept $60 000.0 per month and a quarterly rent review but left the duration of the lease to the determination of the estate agent, which was to be guided by the prevailing market trend and the performance of the defendant during the first six months and the subsequent 12 months.

I resolve the first issue against the defendant. The natural consequence of this determination is that the second and third issues that were referred to trial fall away.

2. Whether the plaintiff is entitled to damages for holding over and if so the quantum thereof

Hiemstra J in *Alphedie Investments (Pty) Ltd v Greentops Ltd* 1975 (1) SA 161 (T) at 164H-165A held that after the termination of a lease the lessor would be entitled to damages and not rentals. It must follow that where a party occupies the property of another without a lease, the owner of that property is entitled to compensatory damages equivalent to the value of occupation. In casu, the plaintiff is entitled to holding over damages for the period the defendant has been and remains in occupation until his eviction.

The plaintiff initially sought holding over damages in the sum of $600 000.00 per month from 1 September 2006 to the date of eviction. In his oral address, Mr Paul maintained this claim. It was only after Mr *Ranchhod* pointed out that the evidence led by the plaintiff’s witnesses did not show that the value of occupation was $600 000.00 per month from 1 September 2006 that Mr Paul applied to amend his pleadings to reflect the plaintiff’s claim as $339 840 000.00 for the period 1 September 2006 to 31 October 2007 and $350 million per month thereafter until the defendant is evicted from the premises. The application was opposed on the basis that no evidence had been led to demonstrate how the new figure was arrived at.

I dismissed the application and indicated that my reasons would appear in this judgment. I dismissed it on the basis that the plaintiff’s witness used an unlawful formula to calculate the value of occupation.

The onus lay on the plaintiff to prove its damages. It relied on Siddiqui’s testimony to establish the value of occupation on a quarterly basis. Siddiqui considered the damages as the equivalent of market rentals charged for similar property in the locality. He then equated the value of occupation to between US$350.00 and US$400.00. He applied the unofficial rate of exchange of the Zimbabwe dollar to these figures and arrived at the market value of occupation. The use of this formula is outlawed by section 17C of The Presidential Powers (Temporary Measures) (Amendment of National Incomes and Pricing Commission Act and Education Act) Regulations, supra. I am aware that the provisions of this statutory instrument apply to the increase of rentals and do not cover the calculation of damages. It seems to me that the use of such a formula in this instance would also be unlawful for the reason that the calculation for damages relies on the calculation for rentals chargeable.

It seems to me that the evidence that was led was that as at 1 September 2006 the value of occupation ranged from $60 000.00 to $120 000.00 per month. Evidence was led from the defendant that Prestige Estate Agent, which he commissioned, placed the value of occupation at $150 million per month as from 1 September 2007. The plaintiff also proved that the market trend was to review the value of occupation on a quarterly basis. It failed to prove the amount it is entitled to as holding over damages during the period in question, on a quarterly basis. It is entitled to some amount. I accordingly hold that justice will be done on this question by granting the defendant absolution from the instance on the amount of holding over damages that are due to the plaintiff.

**COSTS**

Costs are always in the discretion of the court. I found the behaviour of the defendant inexcusable. He was dishonest and dishonorable in his conduct with Gard and the estate agent. He was aware that he had no lease agreement with the plaintiff. He simply wished to take advantage of the death of Gard in order to snatch at a bargain. He unnecessarily put the plaintiff to expense while at the same time prolonging his free stay in the property. I am satisfied that this is a proper case to award the plaintiff costs on a legal practitioner and client scale.

DISPOSITION

Accordingly, it is ordered that:

1. The defendant be and is hereby evicted from 5 Windermere Road, Strathaven, Harare.

2. The defendant is granted absolution from the instance in respect of the holding over damages which are due to the plaintiff.

3. The defendant shall pay the plaintiff’s costs of suit on a legal practitioner and client scale.

Messrs Wintertons, plaintiff’s legal practitioners

Messrs Hussein Ranchhod & Company, defendant’s legal practitioners.
--- END OCR FALLBACK ---