FORESTRY COMMISSION v VARDEN SAFARIS (PVT) LTD

SUPREME COURT, HARARE

[Civil Appeal SC 58-16]

May 12, 2016

ZIYAMBI, GARWE AND BHUNU JJA

Property law – Lease agreement – Essential requirements.

The respondent successfully sued the appellant in the High Court for damages alleging various breaches of a lease agreement. On appeal, the appellant challenged the validity of the lease agreement inter alia on the grounds that the lease agreement failed to identify the property leased.

Held, that it is an essential requirement for a valid lease agreement that the property leased must be identified or identifiable. A lease that does not identify the leased property is void for vagueness.

Case cited:

Muskwe v Nyajina & Ors SC 17-12 (unreported), referred to

Legislation considered:

Forest Act [Chapter 19:05], ss 15, 16, 16 (b), 17

Books cited:

Bradfield G and Lehmann K Principles of the Law of Sale & Lease (3rd edn, Juta & Co Ltd, Cape Town, 2012) p 138

Christie RH Business Law in Zimbabwe (1st edn, Juta & Co Ltd, Cape Town, 1998) p 273

Kerr AJ The Law of Sales and Lease (4th edn, LexisNexis South Africa, Durban, 2015) pp 249-250

T Magwaliba, for the appellant

F Girach, for the respondent

ZIYAMBI JA:

At the end of the hearing of this appeal we gave the following order:

“1. The appeal is allowed with costs.

2. The cross appeal is dismissed with costs.

3. The judgment of the court a quo is set aside and is substituted with the following:

‘The plaintiff’s claim is dismissed with costs’

4. Reasons for this order are to follow in due course.”

The following are the reasons:

The respondent sued the appellant in the High Court for damages alleging various breaches of the appellant’s obligations in terms of a lease agreement signed by the parties, dated 9 April 2010 and attached to the Declaration as “Annexure B”.

It was alleged in the Declaration that the appellant had leased to the
respondent:

“a 1000 hectare portion of Sikumi Forest known as Site 6 Sikumi Forest in the District of Hwange including the Nkonkoni pan and borehole for the purposes of conducting game viewing, wild life photographic expeditions and accommodation camp and other activities”.

The lease was for a period of 10 years commencing 1 April 2010. However, in breach of the lease agreement, the appellant had:

“indicated it intended to hunt in the photographic area and unilaterally moved the agreed site from area 1 to site demarcated by the word 2 seen on the annexed diagram Annexure D. In furtherance of the breach defendant prevented plaintiff from conducting further activities by posting armed guards to prevent plaintiff from access to site 6 thereby ejecting plaintiff from peaceful occupation thereof…”

The respondent claimed damages incurred in setting up at the premises in the sum of US$ 160 000, as well as, US$ 2 579 179 being the expected net income over the period of lease.

The appellant, while admitting signature of the lease agreement, pleaded:

“At para 3

2.1 It is admitted that the parties signed Annexure ‘B’ to plaintiff’s Declaration. It is however denied that this agreement was in respect of the property claimed. Plaintiff was clearly under a mistake of fact.

2.1.2 Annexure ‘B’ to the Declaration is silent on the property description. An annexure, Annexure ‘A’ referred to in the agreement specifying the leased property was not annexed thereto.”

Clause 14 of the contract of lease provides:

“(a) It is specifically agreed and understood that there shall be no agreement between the parties hereto until this agreement has been signed by or on behalf of the parties hereto and that on signature hereof as aforesaid this agreement comprises the whole contract between the parties hereto and no representations made by either of them to the other prior to the execution hereof shall be of any force or effect unless recorded herein. No alteration of this agreement shall be of any force or effect unless recorded in writing executed by the parties hereto”.

The learned judge was of the view that extrinsic evidence could be admitted in order to ascertain the terms of the agreement. She said:

“The mere fact that the map is not attached to the agreement cannot be fatal. As such, I do not regard the factual evidence adduced, as warranting exclusion in terms of the parole evidence rule because it does not seek to introduce new evidence in conflict with the agreement. In the absence of a finding that the factual evidence seeks to alter the agreement, this is clearly an appropriate case where the court must of necessity look at the factual background in determining the rights of the parties. The parties at all times entered into discussions against the background of a map”.

Having heard evidence from the parties, she found that there had been a unilateral mistake for which the appellant was responsible. She therefore ordered the appellant to pay to the respondent:

Costs relating to preliminary construction activity, including costs for transport and hiring of labour, both professional and manual;

Refund of lease fees paid for 2010 and costs of the trial”.

Aggrieved by this decision the appellant has appealed to this Court on various grounds the principal ground being that the court erred in finding that a valid lease agreement had been concluded by the parties.

The respondent, also discontented with part of the judgment, cross appealed on grounds that the learned judge had, against the express agreement of the parties that only the issue of liability would be determined by the court, determined the issue of damages without having heard evidence from the parties on the question of damages. The respondent prayed that the matter be remitted to the High Court for a quantification of the damages suffered and that the appellant be ordered to pay the costs of the hearing in the High Court on the issue of liability.

The cross appeal was conceded by the appellant to the extent that it attacked the decision by the court a quo to deal with the question of damages when the parties had specifically requested it to determine the question of liability only. However, the prayer that the matter be remitted to the High Court as well as the issue of costs were not conceded.

Validity of the agreement

I turn to determine whether there was a valid lease agreement between the parties.

Mr Magwaliba contended that the lease was void on three grounds:

It was void for non-compliance with statute, namely, s 17 of the Forest Act [Chapter 19:05] (“the Act”);

It was void for failure to identify the property leased; and

It was void for mistake as to the premises leased.

In my judgment, a finding that the agreement is void for any one of the above reasons, will dispose of the appeal.

Whether the lease was void for non-compliance with statute?

Section 17 of the Act provides:

“17 Lease of demarcated forest

(1) The Minister may, on the recommendation of the Commission, lease to any person any portion of a demarcated forest.

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