The rental was fixed as follows a by HC1207300654

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									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;
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       (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.
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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)
                                         4                                     SC 59/05


       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.
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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
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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
                                         7                                         SC 59/05


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
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       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.
                                          9                                       SC 59/05




                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
                                           10                                         SC 59/05


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
                                           11                                       SC 59/05


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.
                                       12                SC 59/05




Hussein Ranchod & Co, appellant's legal practitioners

Honey & Blanckenberg, respondent's legal practitioners

								
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