Court name
Supreme Court of Zimbabwe
Case number
SC 59 of 2005
Civil Appeal 361 of 2004

Marsh v Intermarket Building Society (61/04) (SC 59 of 2005, Civil Appeal 361 of 2004) [2005] ZWSC 59 (13 November 2005);

Law report citations
Media neutral citation
[2005] ZWSC 59













DISTRIBUTABLE
(53)


Judgment
No. SC. 59/05


Civil
Appeal No. 361/04








LESLEY
FAYE MARSH v INTERMARKET BUILDING SOCIETY








SUPREME
COURT OF ZIMBABWE


CHIDYAUSIKU
CJ, CHEDA JA & ZIYAMBI JA


HARARE,
SEPTEMBER 27 & NOVEMBER 14, 2005








R
M Fitches
, for the appellant





T
Biti
, for the respondent





CHEDA
JA: The parties entered into a lease agreement on 20 July
1997 in respect of a property known as Stand 506A,
Salisbury
Township, in the District of Salisbury (hereinafter referred to as
“the property”). The appellant signed the lease
on 25 July
1997 and the respondent signed it on 28 July 1997. The lease
was for a period of five years, commencing on
1 October 1997 and
terminating on 30 September 2002. The rental was fixed as
follows –






(a) $8 000.00 per month for
the period 1 October 1997 to 30 September 1998;







(b) $9 600.00 per month for
the period 1 October 1998 to 30 September 1999;







(c) $11 520.00 per month for
the period 1 October 1999 to 30 September 2000;







(d) $13 825.00 per month for
the period 1 October 2000 to 30 September 2001; and







(e) $16 590.00 per month for
the period 1 October 2001 to 30 September 2002.





On
11 November 2002 the respondent addressed a letter to the
appellant in the following terms:






“RE: YOUR LEASE AGREEMENT –
INTERMARKET CHAMBERS






I
refer to our previous communication in respect of the above matter
and advise that the Society has agreed to renew your lease for
a
further three years with effect from 1 October 2002.





The
lease will be on a nett lease basis and the rental structure will be
as follows –






01.10.02 - 30.09.03 $25 000
per month;


01.10.03 - 30.09.04 To
be negotiated;


01.10.04 - 30.09.05 To
be negotiated.






The
operation costs will be shared amongst all the tenants at Intermarket
Chambers based on the ratio which the floor area of the
leased
premises bears to the total lettable area of (the) building.





Your
landlord is currently considering taking over your leased premises
for its own use. However, no definite position has been
reached and
should such a decision be made you shall be given six months notice
to vacate the leased premises.





This
letter supersedes all other previous communication in respect of the
lease renewal. A copy of the lease agreement will be sent
to you
for signature shortly.





Yours
sincerely,






F NYAMBIRI



VALUATION MANAGER”





On
22 June 2003 another letter was addressed to the appellant in
the following terms:






“RE: CANCELLATION OF LEASE
– INTERMARKET CHAMBERS






I
refer to our previous communication in respect of the above matter
and advise that the Society (landlord) has decided to occupy
your
rented space for their banking business development. In this
respect we hereby regrettably grant you six months notice (up
to
(the) end of business on Friday 02 January 2004) to vacate the
premises.





We
would like to take this opportunity to thank you for your good
tenancy over the years and wish you the best.





Please
acknowledge receipt of file by signing below and return a copy of the
letter.





Yours
sincerely,






W MAPFUMO



(EXECUTIVE RISK ASSESSMENT)






In acknowledgement of receipt






Signature:
__________________





(For
and on behalf of Marsh Jewellers)





Date:
……………………………………………… 2003.”





On
8 September 2003 the appellant’s legal practitioners wrote to
the respondent and stated as follows in the second paragraph
of their
letter:






“We wish to draw your attention
to the fact that in terms of the Lease Agreement the lease is for a
period of three years with effect
from 1 October 2002. The
lease therefore expires on 1 October 2005. In the
circumstances you cannot purport to give
our client six months’
notice to vacate the leased premises before the expiry of the lease
period. Our client will vacate the
premises after the expiry of the
lease period on 1 October 2005.”








This
position taken by the appellant was not accepted by the respondent,
who replied on 1 December 2003 as follows:






“We refer to your letter dated
8 September 2003 on the above matter.





We
advise that the Lease Agreement between the Society and your client
expired on 30 September 2002. As you will note from a
reading
of the agreement there was no provision for renewal of the lease
agreement. On expiry, continued lease of the premises
by your
client was therefore dependent on the parties negotiating new terms
and signing a new Lease Agreement.





Intention
to enter into a new Lease Agreement was communicated to your client
on 11 November 2002.





Among
the conditions of the intended new lease, it was specifically stated
that the Landlord was considering taking over the premises,
in which
case once a firm decision in the affirmative was made, your client
would be given six months’ notice to vacate the premises.
It was
also specifically stated that a copy of the new Lease Agreement would
be sent to your client for signing. Such Lease Agreement
was going
to incorporate the conditions communicated in the letter and any
other terms that would apply to the new Lease.





The
new Lease Agreement was subsequently never signed. This would leave
your client in the position of only a statutory tenant.
…”






Faced with this disagreement, the
respondent applied to the High Court to have the termination of the
lease agreement declared valid
and for an order for the ejectment of
the appellant. Despite opposition by the appellant, the High Court
granted that order.





The
appellant has now appealed against the High Court’s decision. Her
grounds of appeal were that:






“1. The learned judge erred in
law in holding that (the) appellant did not justify her belief that
the respondent did not require the
premises for its own use.





2. Further,
the learned judge erred in law in finding that (the) respondent had
proved its case in the Founding Affidavit when (the)
respondent’s
proof was only attached in its Answering Affidavit.





3. Further,
the learned judge erred in law in finding that a lessor can give
notice to terminate a lease for a fixed term on the grounds
that the
lessor requires the premises for its own use. The principle of law
has been clearly established by the Supreme Court that
a lessor
cannot terminate a lease for a fixed term even if it requires the
premises for its own use and therefore the Order of Ejectment
should
not have been granted in favour of (the) respondent.”





The
main issues to be decided on appeal fall under the following headings
–






1. The renewal of the lease;


2. The
status of the tenant; and


3. The
cancellation of the lease.





1. THE
RENEWAL OF THE LEASE





The
lease did not provide for renewal after the initial period of five
years that was agreed to by the parties. Instead, it provided
that
if the tenant wished to remain in occupation after the end of the
agreed period she was to advise the lessor in writing, and
the lessor
would inform her if it was prepared to let her do so and the rent
that would be charged.





The
respondent’s letter of 11 November 2002, while purporting to
renew the lease for a period of three years, only fixed
the rental
for the period of one year only, that is, from 1 October 2002 to
30 September 2003. The rent for the remaining
two years was
not fixed but was to be negotiated.





We
are not told if the appellant responded to this letter, but since in
the letter from her legal practitioners dated 8 September
2003
she argued that the lease was for the three years given in the
respondent’s letter, it can be safely assumed that she accepted
the
new conditions given by the respondent.





However,
that acceptance would mean that the lease was validly renewed for the
further period of one year only because for that
period the rental
was stated and accepted.





The
remaining period of two years, that is from 1 October 2003 to
30 September 2005, cannot be considered as a valid lease.





While
the parties did not deal with this issue sufficiently in their
papers, there can be no lease where the rental was not fixed
and
agreed.





In
Globe Electrical
Transvaal (Pty) Ltd v Brunhuber and Ors

1990 (3) SA 99, it was held that the agreement was not valid as the
price payable was not readily ascertainable.





In
Hattingh v van Rensburg
1964 (1) SA 578, it
was held that:






“A right and option to purchase
in a lease ‘at such price as they may agree upon’ is of no force
or effect until a price is agreed
upon by the lessee and lessor.”





In
Aris Enterprises
(Finance) (Pty) Ltd v Waterberg Koelkamers (Pty) Ltd

1977 (2) SA 425 it was held that the agreement was of no force or
effect as the price was uncertain and the parties might never have
agreed on the amount.





See
also W.E. Cooper on
Landlord
and Tenant
2 Ed
pp 54-55.





Similarly,
in this case the agreement was invalid, as it is not known whether
the parties would have agreed on the rental when it
was eventually
negotiated.





2. THE
STATUS OF THE TENANT





What
this means is that at the end of the period for which rental was
agreed, the appellant became a statutory tenant in terms of
s 22(2)
of the Commercial Premises (Rent) Regulations, SI 676/83.





Since
the appellant was given notice to vacate the premises by 2 January
2004, her right to occupy the premises fell away on
that date under
the above Regulations.





3. THE
CANCELLATION OF THE LEASE





The
respondent gave the appellant six months’ notice to vacate the
premises. The appellant argued that she should not have been
given
notice to vacate the premises since the agreement had been renewed
for three years.





Mr Fitches,
for the appellant, referred to the case of
Mungadze
v Marambiwa
1997 (2)
ZLR 44 (S). This case is not relevant regarding the issue of notice
to vacate before the end of the lease period because
in this appeal
the lease had expired, as I have already found.





The
part of the case
Mungadze
v Marambiwa supra
that
is relevant is the part that deals with the issue of notice to vacate
when the lessor requires the property for its own use.





In
the present appeal, the lessor indicated to the appellant why it
required the premises. The evidence submitted leaves no doubt
that
the respondent needed the property for its own use. The tenant had
been forewarned of this possibility when the lease was
renewed.





The
lessor eventually made a decision to re-occupy the premises and use
it for its own business purposes. The suggestion by the
appellant
that she heard from other people that the lessor did not require the
premises for its own use cannot be relied on. It
is not evidence
that disproves what the lessor has stated.





The
appellant has also argued that the respondent had not established, in
the founding affidavit, the averment that the premises
were required
for its own occupation.





This
was not an issue at the time the parties exchanged correspondence.
The appellant had not raised this point and as such it
cannot be said
that the respondent failed to deal with it. The appellant had only
raised the issue of the notice to vacate before
the end of the lease
period.





Having
found that the appellant was then a statutory tenant, how else was
she to be removed from the premises?





Section 22(2)
of the Commercial Premises (Rent) Regulations 1993 reads as follows:






“(2) No order for the recovery
of possession of commercial premises or for the ejectment of a lessee
therefrom which is based on
the fact of the lease having expired,
either by the effluxion of time or in consequence of notice duly
given by the lessor, shall
be made by a court, so long as the lessee
–






(a) …





(b) …






unless
the court is satisfied that the lessor has good and sufficient
grounds for requiring such order other than that –






(i) the lessee has declined to
agree to an increase in rent; or





(ii) the
lessor wishes to lease the premises to some other person.”








I
have already stated that the allegation by the appellant that she
heard from some people that the respondent was not wanting the
premises for itself is not sufficient evidence to be relied on.





The
respondent had previously advised the appellant that the repossession
of the premises was being considered and that the appellant
would be
advised once a firm decision was made.





Once
a corporate decision to expand the respondent’s business was taken,
the appellant was advised accordingly. The respondent
filed
architectural plans of the premises, drawn on 22 July 2003.
The plans show areas marked as “cash dispensers”, which
are part
of the respondent’s business.





I
am therefore satisfied that the respondent had good and sufficient
grounds for requiring the order that it sought in the High
Court.





Accordingly,
the appeal is dismissed with costs.














CHIDYAUSIKU
CJ: I agree.














ZIYAMBI
JA: I agree.














Hussein
Ranchod & Co
,
appellant's legal practitioners


Honey
& Blanckenberg
,
respondent's legal practitioners