U-Tow Trailers (Pvt) LTD Versus CITY OF Harare AND Superlux Trailers (Pvt) LTD

HH 05/11
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U-TOW TRAILERS (PVT) LTD
versus
CITY OF HARARE
and
SUPERLUX TRAILERS (PVT) LTD


HIGH COURT OF ZIMBABWE
CHATUKUTA J
HARARE,        25 March 2010 & 19 January 2011


Opposed Matter


L Mazonde, for the applicant
T Magwaliba, for the 2nd respondent


         CHATUKUTA J: This is an application for leave to execute the judgment granted
in case No. HH 103/09 pending an appeal noted by the 2 nd respondent against the
judgment.
         The background to the application is that in December 1994 the applicant and the
1st respondent entered into a lease agreement in respect of certain premises situate at
number 9 Market Street, Eastlea, Harare (the premises).          The lease agreement was
renewable from time to time and was due to expire on 30 March 2010 by effluxion of
time.
         In April 2008, the applicant and the 2 nd respondent entered into a joint venture to
build trailers and panel beat motor vehicles. The 2 nd respondent moved onto the premises
pursuant to this arrangement. The joint venture however failed. Despite the failure of the
joint venture, the 2nd respondent remained on the premises.
         In January 2009, the 1st respondent summarily terminated the lease agreement on
the basis that the applicant had sub-leased the premises to the 2 nd respondent in breach of
lease agreement. It proceeded to lease the premises to the 2 nd respondent. The applicant
successfully instituted proceedings in case No. HH 103/09 for an order nullifying the
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termination of the lease agreement and the ejectment of the 2 nd respondent’s from the
premises. The court ruled that the 2nd respondent had not established a defence to the
applicant’s claim for ejectment.       On 29 October 2009, the 2 nd respondent appealed
against the decision hence the present application for leave to execute pending the appeal.
       In determining an application for leave to execute pending appeal, the court must
consider:
   (a) the prejudice to be suffered by either of the parties in the event of the

       success or failure of the application;

   (b) the prospects of success of the 2nd respondent on appeal; and

   (c) the balance of convenience. (see South Cape Corporation v Engineering
       Management Services Pty Ltd 1977 (3) SA 534 (A) and Net One Cellular (Pvt)
       Ltd v Net One Employee & Anor 2005 (1) ZLR 275 281 B-D)


       The applicant contended that it is likely to suffer irreparable harm if leave is not
granted in that it had been operating from the premises since 1994 and would lose its
customers and that its business would be adversely affected by the continued stay of the
2nd respondent on the premises. It still has its property on the premises and had been
denied access to the same by the 2 nd respondent. The 2nd respondent had not offered a
valid defence to the claim of ejectment nor had it filed a counter-application asserting its
rights under a purported lease agreement between the two. It further contended that the
appeal by the 2nd respondent is frivolous and vexatious having been noted without a bona
fide intent to seek and reverse the judgment but with the intention to gain time and harass
the applicant.
                 On the other hand, the 2 nd respondent contended that it was likely to suffer
irreparable harm if the order for leave to execute pending appeal was granted in that it
had been in occupation since 2008. It had also established a successful business on the
premises. Its business would be equally prejudiced if it is ejected from the premises. The
applicant was unlikely to suffer any harm as it had no been in occupation of the premises
during that period. It further contended that the main ground of appeal against the
judgment in HH 103/09 was that it had proffered a defence to the applicant’s claim for
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ejectment which defence was improperly discounted by the court. It claimed that upon
the failure of the joint venture the parties entered into a lease agreement. The lease
agreement had not been properly terminated and therefore it was entitled to remain in
occupation pursuant to that lease agreement. It contended that if it were ejected it would
not be able to be restored to the status qou ante and therefore the balance of convenience
weighed in its favour. Its appeal did not lack bona fides in that the court should not have
discounted its defence.
       It appears to me that it is not in issue that the applicant is likely to suffer prejudice
if leave to execute is not granted. The applicant has been operating from the premises
from 1994 and has established a name for itself. The 2 nd respondent is also likely to
suffer prejudice if leave to execute is granted. It had also started establishing a name for
itself, though over a shorter period having been in occupation since 2008. It however,
appears to me that the applicant will suffer greater harm given that it has been in
occupation for a longer period than the 2nd respondent.
       Considering that both parties are likely to suffer harm, it appears that the
determining factor is whether or not the 2 nd respondent has any prospects of success on
appeal. The 2nd respondent does not appear to have any prospects of success. The 2 nd
respondent was relying on the lease agreement with the 1 st respondent as a basis for its
present occupation of the premises. Following the setting aside of the termination of the
agreement between the applicant and the 1 st respondent by the court, the 2nd respondent
can no longer rely on the lease agreement for its continued occupation of the premises.
       It appears it cannot also rely on the purported sublease with the applicant. The
sublease is clearly in breach of the agreement between the applicant and the 1 st
respondent. The lease agreement does not allow the applicant to sublease the property
without the 1st respondent’s authority. Such authority does not appear to have been
sought or granted. The 2nd respondent did not dispute in its pleadings in case No. HH
103/09 that the sublease was invalid. In fact it argued that its lease agreement with the 1 st
respondent was valid because the 2 nd respondent had subleased the premises to it in
breach of the lease agreement with the 1st respondent. The applicant’s contention that it
is entitled to remain in occupation on the basis of an invalid lease is therefore not
sustainable. The court, in case No. HH 103/09, ruled that the 2 nd respondent did not have
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a legal entitlement to remain on the premises and it appears on the basis that the lease
agreement with the applicant was invalid. It is therefore not correct for the 2 nd respondent
to contend that the court did not consider its defence to the applicant’s claim for
ejectment. The court considered the defence and discounted it before proceeding to
determine whether or not the termination of the agreement between the applicant and the
1st respondent was valid.
       In view of the observations that I have made above, it seems to me that the
balance of convenience weighs in favour of the applicant. The applicant has been in
occupation for a period of seventeen years. It will certainly lose the goodwill attached to
its operations on the premises if the 2 nd respondent continues to remain in occupation.
The second respondent will in fact be building its own goodwill if it remains in
occupation to the detriment of the applicant. The 2 nd respondent does not have any
prospects of success on appeal because it does not have any legal entitlement to remain in
occupation of the premises. It appears that the appeal was therefore noted merely to
delay the inevitable. Any further delays in the execution of the judgment would in my
view prejudice the applicant. It is therefore equitable in the circumstances that the
applicant must succeed.


       In the result, it is ordered that:


   1. The applicant be and is hereby granted leave to execute the judgment of this court
       granted on 21 October 2009 in case HH 103/09 pending the appeal noted by the
       2nd respondent against the judgment.
   2. The 2nd respondent be and is hereby ordered to pay the costs of this application.




Muzangaza, Mandaza & Tomana, applicant’s legal practitioners
Messrs Magwaliba & Kwirira, 2nd respondent’s legal practitioners