Builders Junction (Pvt) LTD Versus Moses Mukoko

### Preamble
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HMT 43-21
HC 209/20
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BUILDERS JUNCTION (PVT) LTD

versus

MOSES MUKOKO

HIGH COURT OF ZIMBABWE

MWAYERA J

MUTARE, 27 May 2021 and 15 July 2021

OPPOSED APPLICATION

C Maunga assisted by K. Kabaya, for the applicant

V Masaiti, for the respondent

MWAYERA J: The applicant filed an application for confirmation of cancellation of the lease agreement between itself and the respondent dated 2 May 2019. It having been duly cancelled in terms of clause 4 of the said agreement. The respondent is opposed to the confirmation of the cancellation of the lease agreement.

Brief Background to the Matter

On 28 April 2019 the applicant and respondent entered into a lease agreement. The applicant leased from the respondent, a slidtech sawmill machine. The terms of the lease agreement were properly captioned a Memorandum of Agreement of Lease. Among other clauses was a clause speaking to termination headed Notice. It was part of the contract that it would be terminated on 24 hours’ notice in the event that the applicant failed to secure a timber milling contract from Allied Timbers Zimbabwe (Pvt) Ltd where the machine was being used.

On 22 June 2020, the applicant wrote to the respondents through its legal practitioners advising that the lease agreement between the parties would automatically terminate on 31 August 2020 as the applicant’s contract with Allied Timbers was coming to an end on 31 August 2020. The applicant gave notice of termination of the lease agreement on 19 August 2020. The respondent challenged the termination on the basis that the parties amended the contract and that the purported termination by the applicant is as a result of a deliberate misinterpretation of the provisions of the agreement. At the time of hearing the respondent abandoned the points in limine raised in relation to jurisdiction and alleged material disputes of fact. The court was thus to determine only one issue. The issue being whether or not the termination of agreement between the parties was valid.

Submissions by the Parties

Mr Maunga argued that the agreement between the parties was properly cancelled in compliance with clause 4 of the said agreement. He contended that the amended agreement which the respondent sought to rely on was an agreement between different parties altogether. The initial agreement which related to the cancellation in terms of clause 4 was between Moses Mukoko of Plot 3 Skoonveld Farm Marondera and Builder’s Junction represented by Thembinkosi Mbambo of Stand No 6011 Nyakamete Mutare. While on the other agreement the respondent sought to rely on as effecting on amendment 15 on a Zebra Kicks letter head and it is between M. Mukoko and T Mbambo.

Mr Maunga argued that T. Mbambo is certainly not Builder’s junction the applicant who entered into the Memorandum of Agreementof lease. He further argued that the lease agreement was crafted in clear terms that if the applicant had no contract with Allied Timbers where the machine was to be used then notice of cancellation and or termination of agreement was to be given in terms of clause 4.

Mr Masaiti on the other hand argued that the parties stated, agreed and amended the original lease agreement. He further pointed out that termination was to be on 3 months notice as per amendment reflected in the amended agreement for notice.

“Each party shall give 3 months written notice of termination of this contract but the lessee can terminate this agreement without notice. If the lessee fails to abide himself to the agreed terms of this contract and breaches terms.”

Mr Msaiti contended that the applicant did not give adequate notice and as such cancellation of the agreement is not valid. Counsel for the respondent further referred the court to the case of Tarvest Trading (Pvt) Ltd t/a Sunset Mbare v Southey Road Investment (Pvt) Ltd HH 771/15 where the court opined in regard the issue of different names to a lease agreement.

“It is therefore imperative in my view that this court keeps in mind the true gist of the dispute between the parties…”

The respondent argued the parties to the agreement headed Amendment of Memorandum Lease Agreement are the same and thus insisted notice for cancellation was supposed to be 3 months and not 6 months.

Analysis and Disposition

It is imperative that the parties to the agreement be ascertained and sufficiently identified. Further it is important that their intentions as spelt out in the agreement are put in perspective. A close reading of the Memorandum of Agreement of Lease reveals that the lessor Moses Mukoko leased to Builder’s Junction (represented by Thembinkosi Mbambo). The availability of a contract to Builder’s Junction (the lessee) from Allied Timbers where the machine was to be used was a condition precedent as denoted from the wording of the agreement.

Clause 4 four of the Memorandum of Agreement of Lease is pertinent.

“4	 Notice

Each party shall give 3 months written notice of termination of this agreement. But the lessee does not get the actual contract from Allied Timbers. The lessee can give 24 hours notice but not including this month of the signing of the lease agreement. The initial deposit of $25 000 paid on the first month is not refundable if the contract is terminated before running for a month”

The applicant’s contract with Allied Timbers which was a prerequisite for the lease agreement was coming to an end on 31 August 2020. The applicant notified the respondent in June 2020 and issued out a notice of termination on 19 August. This notice was way beyond the 24 hours notice stipulated in clause four of the Memorandum of Lease Agreement. The purpose for which the machine was required was not availed hence the notice of termination of 19 August 2020. The argument by the respondent that there was a subsequent agreement amending the initial agreement is not supported by documents filed of record. It is settled novation occurs when parties to an original contract agree that the original obligations are extinguished and new obligations created. It amounts to replacement of the old contract with a new contract. It follows that the novated agreement is only valid if it is between the same parties. In this case the respondent relied on an Amended Lease Agreement which amendment relates to different parties. As reasoned in the case of Siwawa v Coper Construction (Pvt) Ltd HH 790/15 the applicant in that case could not successfully sue the respondent in his personal capacity as he was not privy to the contract. This position buttresses the novation of privy of contract which spells out clearly that a person who is not party to a contract cannot be liable or claim as he is not privy to the contract.

In casu the parties as outlined in the initial agreement are different from the parties outlined in the intended amendment which the respondent sought to rely on. When one considers the spirit of the total agreement, it is evident that the lease was to be perfected by availability of contract between the lessee Allied Timbers further where the machine was to be used. In the event of there being no contract then the machine would not be of any use hence the 24 hour notice of termination or cancelation as dictated by the spirit of the agreement in particular clause 4. If individual entered another agreement not in their representative capacity then that agreement cannot be binding on the applicant a private limited company.

In the circumstances it is clear that the agreement dated 2 May 2019 was between Builder’s Junction (Pvt) Ltd and Moses Mukoko and it encompassed the availability of a contract with Allied Timbers where the machine would be used. Whereas the agreement of July 2019 which respondent sought to rely on was between M. Mukoko and T. Mbambo. The parties are different and the nature of the contract in so far as rental of machine was dependant on availability of contract with Allied Timbers is not spelt out in second contract. The applicant cannot be held liable for new obligations of a contract for which it is not party to.

Accordingly the applicant in this case properly cancelled the agreement entered into on 2 May 2019 in terms of clause 4. The applicant sought for costs on a punitive scale but however did not justify such costs. As such costs will be on an ordinary scale.

It is ordered that:

The termination of agreement of lease entered into by and between Applicant and Respondent in respect of a Slidtech Sawmilling machine, be and is hereby confirmed.

The Respondent shall bear the costs.

Maunga Maanda & Associates, applicant’s legal practitioners

Saidi Law Firm, respondent’s legal practitioners