SOLID REAL ESTATE (PVT) LTD v LOW PRICE INVESTMENTS (PVT) LTD T/A LOW PRICE FABRICS
HIGH COURT, HARARE
[Civil Trial HH 600-15]
June 30 and July 8, 2015
MATHONSI J
Property - Appeal - Appeal to the Administrative Court does not suspend the operation of an order of the commercial rent board.
The plaintiff sued the defendant for eviction and arrear rentals fixed by an order obtained from the commercial rent board.
Opposing the suit, the defendant claimed that it had paid the rentals and the outstanding amount ordered by the commercial rent board was the subject of an appeal to the Administrative Court. The defendant argued that the operation of the rent board order was therefore suspended.
Held, that in terms of s 4 of the Commercial Premises Lease Control Act [Chapter 14:04] an appeal to the Administrative Court does not suspend the operation of the rent order fixed by the board. Where an appeal has been noted, the order remains effective and should be complied with. Section 28 of the Commercial Premises (Rent) Regulations SI 676 of 1983 empowers the rent board to issue a directive for the rent order to be complied with pending appeal.
Judgment entered on behalf of plaintiff.
Cases cited:
Associated Newspapers of Zimbabwe (Pvt) Ltd v Minister of State for Information and Publicity & Ors 2005 (1) ZLR 222 (S), referred to
Longman Zimbabwe (Pvt) Ltd v Midzi & Ors 2008 (1) ZLR 198 (S), applied
South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd 1977 (3) SA 534 (A), referred to
Vengesai & Ors v Zimbabwe Glass Industries Ltd 1998 (2) ZLR 593 (H), referred to
Legislation considered:
Commercial Premises (Lease Control) Act [Chapter 14:04], s 4
Commercial Premises (Rent) Regulations, 1983 (SI 676 of 1983), s 28
RM Dhaka, for the plaintiff
M Kenende, for the defendant
MATHONSI J:
The plaintiff is a property management company which is charged with the management of 2A and 2B Leopold Takawira Building, Cameroon Street Side in Harare ("the property") belonging to The Goldman IV Trust. It has sued the defendant, a tenant at the premises, for eviction, US$ 18 799.10 in arrear rentals and operating costs, holding over damages, interest and costs of suit.
The plaintiff alleges that the defendant failed, refused and/or neglected to pay rentals fixed by a rent order accumulating arrears of US$ 16 345 during the period of January to July 2012 and US$ 2 454.10 operating costs which accrued during the same period. As a result of that breach the plaintiff cancelled the lease on 11 July 2012 but the defendant has failed, neglected or refused to vacate despite demand.
Opposing the suit, the defendant averred in its plea that it is a statutory tenant which has "religiously paid its rentals". Although acknowledging receipt of the rent order, the defendant maintained that it is unreasonable and has been appealed against to the Administrative Court which appeal is yet to be determined. Accordingly the purported cancellation of the lease is null and void.
In terms of the joint pretrial conference minute of the parties prepared following a conference held before a judge, two issues have to be determined at the trial namely:
(1) Whether the appeal to the Administrative Court stays the rent order.
(2) The amount due and owing to the plaintiff by the defendant.
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At the commencement of the trial Mr Dhaka made an application, which I granted by consent, for the amendment of the summons and declaration so that the defendant is cited as "Low Price Investment (Pvt) Ltd t/a Low Price Fabrics" instead of "Low Price 1" as originally cited in the process. Each of the parties called one witness with evidence being led by the plaintiff from Albert Mukechi its General Manager and by the defendant from Mohammed Joosab its director.
Mukechi testified that the plaintiff took over the management of the property in January 2012 at a time when there was a sitting tenant, the defendant, which was paying a rental of US$ 1 850 per month by virtue of a prior agreement with the landlord. The plaintiff estimated the floor area of the space rented by the defendant to be 279 square metres and immediately engaged the defendant to agree on new rentals to be paid. When no consensus was reached the dispute was referred to the rent board for determination of a fair rental. The rent board issued a rent order on 20 January 2012 fixing the fair rental for the property at US$ 15 per square metre.
Mukechi produced a letter from the rent board dated 20 January 2012 to the plaintiff which states:
"RE: DETERMINATION OF FAIR RENTALS IN THE CASE: SOLID REAL ESTATE (PVT) LTD v LOW PRICES INVESTMENTS
We hereby notify you of the decision of the Industrial and Commercial Rent Board reached after the Board sit (sic) to hear and determine a fair rent of the above case on January 19, 2012.
The Board has set US$ 15 per square metre as fair rent for the leased premises occupied by Low Prices Investments at the leased premises at No. 2A & 2B L. Takawira Street, Harare. This rent is effective from January 1, 2012 to December 31, 2012.
Please note that this rent exclude(s) VAT and operating costs."
When the rent order was communicated to the defendant it refused to comply with it and continued to pay US$ 1 850 per month when the rent of US$ 15 per square metre set by the rent board should have yielded a total of US$ 4 185 per month for what was then regarded as 279 square metres of space occupied by the defendant. Much later, the plaintiff measured the space and discovered that it was in fact 296 square metres meaning that the defendant was obliged to pay a monthly rental of US$ 4 440. The plaintiff then adjusted the monthly rental accordingly. He produced the rent statement of the defendant, exh 1, showing the debit entries which started as US$ 1 850 when the plaintiff took over in January 2012, before being increased to US$ 4 185 in July 2012 and then
US$ 4 440 in November 2013. When the defendant vacated the property in April 2014, the amount outstanding including holding over damages was
US$ 67 066.30 which the plaintiff is claiming.
Mukechi stated that the defendant was also liable to pay operating costs which are outstanding in the sum of US$ 627.49. I must state that the defendant conceded that claim with its director Joosab pointing out that it was overlooked but should be paid. There will be an order for payment of that amount.
The plaintiff also produced an interim order dated 13 March 2012 issued by the rent board to the plaintiff in terms of which the defendant was among the tenants that were directed to pay rentals at the fixed rate despite the appeal. It reads in part:
"RE: APPLICATION FOR DIRECTION OF PAYMENT OF RENTALS IN TERMS OF SECTION 28 OF STATUTORY INSTRUMENT 676 1983 IN CASES: SOLID REAL ESTATE (PVT) LTD VS 14 TENANTS AT NO 2A & 2B L. TAKAWIRA STREET, HARARE DETERMINED ON JANUARY 19, 2012
We refer to your application for direction of payment pending the finalization of the appeal by the Administrative Court. The Board has in terms of section 28 of Statutory Instrument 676 of 1983, directed that... Low Prices Investments... shall pay rentals as it had (been)determined on January 19, 2012 until the finalization of appeal by the Administrative Court."
Most of what was said in support of the plaintiff's claim went unchallenged. Mohammed Joosab, the witness who testified on behalf of the defendant, confirmed receipt of the rent order and the interim determination that the rent order be complied with pending appeal. He also confirmed receipt of the invoices claiming rentals firstly at US$ 4 185 per month for 279 square metres which was revised to 296 square metres rental of US$ 4 440. According to Joosab, the defendant was not concerned about whatever amount the plaintiff was claiming. It was simply not going to pay such amount as it was rooting for payment of US$ 1 850 which it had been paying previously which it regarded as a fair rental for a property it had occupied for 10 years. It was not about to settle for any other amount.
He stated that the defendant was part of the tenants' association, Gazar Store Tenants Association, which noted an appeal against the rent board order issued on 20 January 2012. The appeal was lodged at the Administrative Court on 9 February 2012, exh 5, and it has not yet been determined. He last checked with the defendant's legal practitioners on the status of the appeal in February 2015 but does not consider that be the function of the defendant because it is the plaintiff which wants the increase, it should be the one prosecuting the appeal.
Joosab went on to say that when the plaintiff took over management of the property it measured the space occupied by the defendant and came up with an area of 279 square metres. It should stick to it and should not be allowed to vary that to 296 square metres, a figure probably arrived at during measuring done after the defendant had vacated. He stated that the defendant was not disputing the claim of US$ 627.49 in operating costs.
Mr Dhaka for the plaintiff urged me to find that the noting of an appeal to the Administrative Court did not have the effect of suspending the rent order appealed against because the rent board was empowered, in terms of s 28 of the Commercial Premises (Rent) Regulations (SI 676 of 1983) "the Regulations" made in terms of the Commercial Premises (Lease Control) Act [Chapter 14:04] to issue a directive for the rent order to be complied with pending appeal. He relied on the authority of Longman Zimbabwe (Pvt) Ltd v Midzi & Ors 2008 (1) ZLR 198 (S).
Section 4 of the Commercial Premises (Lease Control) Act provides:
"(1) An appeal shall lie from the decision of a rent board to the Administrative Court.
(2) Where an appeal has been lodged in terms of subsection (1) to the Administrative Court, the lodging of the appeal shall not suspend the decision of the rent board concerned unless such board has made a direction to the contrary."
Section 28 of the Regulations provides:
"Where an appeal has been lodged in terms of this part, either of the parties concerned may, upon notice being given to the other party, apply to the board concerned for any direction or order relating to the payment of the rent concerned pending the determination of the appeal, and the board may make such direction or give such order as it deems fair and just in the circumstances."
The rent board was called upon to give direction in terms of that section and did issue the direction that its rent order should be complied with despite the appeal. In Longman Zimbabwe (Pvt) Ltd v Midzi & Ors, (supra), the Supreme Court made the pronouncement that the power of a court to order execution of its own judgment, despite the noting of an appeal is founded on the common law doctrine of inherent jurisdiction which is available only to the superior courts as courts created by statute do not have such inherent jurisdiction. Such courts do not have the power to order execution of their own judgment unless such jurisdiction is conferred on them by statute. A fortiori unless so empowered by statute, such a court does not have the power to order the suspension of its own orders or judgment.
See also Associated Newspapers of Zimbabwe v Minister of State for Information and Publicity & Ors 2005 (1) ZLR 222 (S) at 254D-E; Vengesai & Ors v Zimbabwe Glass Industries Ltd 1998 (2) ZLR 593 (H) at 598E-F; South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd 1977 (3) SA 534 (A) at 544H-545A
In the present case, by clear statutory provision, an appeal to the Administrative Court from a decision of a rent board, does not suspend the operation of the rent order fixed by the board. Even where an appeal had been noted, the order would remain effectual and should be complied with. Even with that provision, s 28 of the Regulations allows a party to apply to the rent board for direction pending appeal. An approach was made to the board in terms of that provision and the board obliged by ordering rent to be paid at the fixed rate, damn the appeal.
In the face of all the foregoing authorities, Ms Kenende for the defendant could not point to any basis upon which the defendant was entitled to resist first, the rent order and second, the direction issued in terms of s 28 of the Regulations. She clung to the untenable argument that the rent order had been appealed against. Clearly therefore the question whether the appeal to the Administrative Court had the effect of suspending the rent board order, has to be answered in the negative. It did not.
Having come to that conclusion, the second leg of the inquiry relating to the quantum of arrear rentals pales to insignificance, it being undisputed that if rent was computed at US$ 15 per square metre it would yield the amount claimed by the plaintiff. The only issue calling for further discussion concerns the exact area of space occupied by the defendant. Rent was initially charged for 279 square metres.
In determining that issue I am equipped with the evidence of Mukechi who said 279 was an estimation while 296 came as a result of actual measuring resulting in the rent being increased from November 2013, and that of Joosab who did not bother to measure but was content to hold the plaintiff down to the estimated figure. In my view the defendant was simply not bothered about such niceties as measurements. It was just not going to pay anything other than the US$ 1 850 it paid before the plaintiff came onto the scene. I therefore have no reason to doubt the correctness of Mukechi's testimony.
I conclude therefore that the plaintiff has managed to prove its claim for arrear rentals including holding over damages upto the time that the defendant vacated, in the sum of US$ 67 066.30.
Mr Dhaka asked for costs on the legal practitioner and client scale because the plaintiff was unnecessarily put out of pocket by the defendant pursuing an ill-conceived defence which had not the slightest chance of success. I agree. Throughout the dispute, the defendant had the benefit of legal counsel.
Not much industry was required for its legal practitioner to check the provisions of both the Act and the regulations. Had that been done, it would have become apparent that the plaintiff's claim was unassailable. The defendant must therefore face the consequences of its legal practitioner's lack of diligence, for tardiness has its just deserts, an award of punitive costs.
In the result it is ordered that:
(1) Judgment be and is hereby entered in favour of the plaintiff as against the defendant in the sum of US$ 67 066.30 for arrear rentals and holding over damages.
(2) Judgment be and is hereby entered in favour of the plaintiff as against the defendant in the sum of US$ 627.49 for operating costs.
(3) Interest on both amounts at the prescribed rate from due date to date of payment.
(4) The defendant shall bear the costs of suit on the scale of legal practitioner and client.
Wilmot & Bennett, plaintiff's legal practitioners
Tavenhava & Machingauta, defendant's legal practitioners
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