Court name
Supreme Court of Zimbabwe
Case number
SC 22 of 2007
Civil Appeal 219 of 2006

Agriconcord (Pvt) Ltd. v National Railways of Zimbabwe Contributory Pension Fund (219/06) (SC 22 of 2007, Civil Appeal 219 of 2006) [2007] ZWSC 22 (06 September 2007);

Law report citations
Media neutral citation
[2007] ZWSC 22













DISTRIBUTABLE (20)


Judgment
No. SC 22/07


Civil
Appeal No. 219/06








AGRICONCORD
(PRIVATE) LIMITED v





NATIONAL
RAILWAYS OF ZIMBABWE CONTRIBUTORY PENSION FUND








SUPREME COURT OF
ZIMBABWE


SANDURA JA, CHEDA
JA & ZIYAMBI JA


HARARE, FEBRUARY 19 &
SEPTEMBER 7, 2007








H Zhou, for the
appellant





P Machaya, for
the respondent






SANDURA JA: This is an appeal against a judgment of the High
Court which dismissed with costs the appellant’s application
for
the rescission of a default judgment.







The background facts in this matter may be tabulated conveniently
as follows –






1. On 23 June 2003 the appellant (“Agricon”) and the
respondent (“the Pension Fund”) concluded a lease agreement in
terms of which the Pension Fund let to Agricon the premises at
2 Bristol Road, Workington, Harare (“the premises”).







2. Clause 15 of the lease agreement, in relevant part, reads as
follows:







“15 Breach of Lease







15.1 In the event of









      1. non-payment
        of rent or any portion thereof on due date; or …










then the Lessor shall have the right to cancel the lease and re-enter
upon and take possession of the premises and the contents thereof,
provided that such action on the part of the Lessor shall not
prejudice any claim that the Lessor shall have against the Lessee for
rent already due …”.







3. On 7 July 2005 the Pension Fund cancelled the lease agreement
for non-payment of rent on the due date, and demanded payment
of the
rental arrears amounting to $208 298 093.89 within five
days, and a surrender of the premises within that period.







4. On 28 July 2005, when Agricon had neither paid the rental
arrears nor vacated the premises, the Pension Fund filed a court
application in the High Court against Agricon, which was served on
Agricon, seeking an order directing Agricon to vacate the premises
and pay the rental arrears and certain operating costs.







5. Thereafter, Agricon did not file a notice of opposition and an
opposing affidavit in respect of the Pension Fund’s court
application.
Instead, Agricon contacted the lawyers acting for the
Pension Fund in an attempt to settle the matter, but that was not
successful.







6. On 4 August 2005 Agricon wrote to the lawyers acting for the
Pension Fund. The letter, in relevant part, reads as follows:







“Following our recent meeting please find enclosed a cheque for the
August rent for No. 2 Bristol Road, Workington.







I propose to pay the rent arrears in two payments on 31 August
2005 and 30 September 2005. However, I wish to discuss
the
rates issue with Richard Ellis in order to reach an agreement
and settle the issue.”







7. On 10 August 2005 the lawyers acting for the Pension Fund
replied as follows:







“We acknowledge receipt of your cheque in the sum of $11 242 500.00
and your letter of 4th August, 2005. We have
forwarded the same to our client for further instructions. We will
revert to you once our client furnishes
us with instructions in
relation to your proposals.







Meanwhile, we have not yet received instructions from our client to
suspend legal action against yourselves.”







8. On 2 September 2005 the lawyers acting for the Pension Fund
set down the court application for hearing on the unopposed roll,
and
the Pension Fund was granted an order directing Agricon to vacate the
premises and pay the arrear rentals and holding over damages.







9. On 12 September 2005 Agricon made part payment of the rental
arrears, and refused to pay in full the sum claimed by the Pension
Fund. It also refused to vacate the premises. Consequently, the
Pension Fund issued a writ of execution and ejectment.







10. On 22 November 2005, after Agricon had been served with a
notice of eviction, and the Pension Fund had refused to be involved
in any further negotiations on the matter, Agricon filed a court
application in the High Court seeking a rescission of the default
judgment granted against it in September 2005. The application was
opposed by the Pension Fund.






The learned Judge in the court a quo dismissed the
application on the ground that the explanation given by Agricon for
its failure to file its opposing papers was completely
unacceptable.
I have no doubt in my mind that the learned Judge was correct.







The explanation given by Agricon for not opposing the court
application was that “it had been assured (by the Pension Fund’s
lawyers) that litigation was being stopped to give negotiations a
chance”.







In my view, that explanation cannot be true. I say so because on
10 August 2005 the Pension Fund’s lawyers wrote a letter
to
Agricon in which they stated, inter alia, as follows:






“Meanwhile, we have not yet received instructions from our client
to suspend legal action against yourselves.”







In the circumstances, the Pension Fund’s lawyers could not
possibly have assured Agricon “that litigation was being stopped
to
give negotiations a chance”. No explanation, let alone a
reasonable one, was, therefore, given by Agricon for its default.







However, even on the merits Agricon had no chance of succeeding.
That is so because it was common cause that Agricon had not
paid its
rent on the due date for some time, and had accumulated rental
arrears amounting to millions of dollars. In terms of clause 15.1
of the lease agreement the Pension Fund had the right to cancel the
lease in view of that default.







In my view, there is no substance in the argument advanced by
Agricon’s counsel, that before the Pension Fund cancelled the lease
agreement it should have given Agricon fourteen days within which to
remedy the breach. Clause 15.1 of the lease agreement,
which I
have already set out in this judgment, does not say that in relation
to the non-payment of rent by the due date.







In the circumstances, the appeal is devoid of merit and is
dismissed with costs.







CHEDA  JA: I agree







ZIYAMBI  JA: I agree







Bvekwa Legal Practice, appellant's legal practitioners



Gill, Godlonton & Gerrans, respondent's legal
practitioners