Opposed
Matter
MANGOTA
J:
Loosely defined, a lease is an agreement in which one party (lessor)
offers his property
(subject
matter of contract) on hire to another (lessee) for a certain fixed
sum of money (rent) which is paid periodically.
The
lessor-lessee agreement is either written or verbal.
Where
it is written, its clauses spell out the rights and obligations of
the parties and all matters which are ancillary to the contract.
The
applicant and the first respondent entered into a written
lessor-lessee relationship respectively. The first respondent leased
from the applicant shop number 13, First Mutual Centre, 82-86 Herbert
Chitepo Street, Mutare (“the property”).
Clause
1.2 of the lease stipulates the rent which the first respondent was
to pay to the applicant.
The
second and third respondents stood as surities and co-principal
debtors for the due and punctual payment of the first respondent's
indebtedness to the applicant.
The
parties relationship subsisted from September 2010 to February 2016
when the applicant cancelled the lease.
It
did so on the allegation that the respondent(s) had breached the
terms of the lease. It contended that these failed to pay the rent
and operating costs as was stipulated in the lease. It alleged that
the respondents were indebted to it in the sum of $10,249.30 in
toto.
It moved the court to:
(i)
enter judgment against all the three respondents in the sum of
$10,249.30; and
(ii)
order that the respondents:
(a)
be evicted from its property;
(b)
pay to it holding over damages at the rate of $66.87 per day with
effect from 1 June 2016 to the date of their eviction from the
property; and
(c)
pay costs of this application on a higher scale.
The
respondents opposed the application. They raised one preliminary
matter.
They
averred, on the merits, that the lease agreement which, according to
them, expired on 31 August 2013 discharged the suretyship agreement.
They
stated that any claim against the second and third respondents was,
therefore, without any basis.
They
submitted that no claim lay against the second respondent as the
latter did not sign the contract of suretyship.
They
denied breaching any terms of the lease. They insisted that, if any
term(s) was/were breached, the applicant condoned such breach.
They
contended that the court did not have the jurisdiction to hear and
determine the application. They relied on clause 6.1 as read with
clause 34.1 of the lease agreement in the mentioned regard. They
stated that the applicant should have referred the rent dispute to an
arbitrator. They submitted that the arbitrator, and not the court,
should have determined the rent which they were enjoined to pay.
They
maintained the position that after 31 August 2013, the parties did
not renew their lease and the first respondent became a statutory
tenant.
The
first respondent, they stated, paid and continues to pay what it
considered reasonable rentals for the property.
They
denied that they owed the applicant any money. They challenged the
applicant's statement of account. They insisted that the statement
did not capture the parties transactions accurately.
They
moved the court to dismiss the application with costs on an attorney
and client scale.
In
the in
limine
matter which they raised, the respondents challenged the authority of
the deponent to the founding affidavit. They submitted that he was
not clothed with the applicant's authority to depose to the
affidavit on its behalf as he did.
They,
on the mentioned basis, insisted that the applicant was not before
the court and that the application should, therefore, be dismissed.
The
deponent to the founding affidavit, one Innocent Mupfururirwa, a
property manager in the employment of the applicant, stated to the
contrary.
He
said he was authorised to depose to the affidavit. He stated, in the
answering affidavit, that it was not necessary for him to attach
proof of authority to depose to the affidavit. He insisted that the
respondents knew that he had the requisite authority. He said they
knew of that matter because he had dealt with them on the matter
which was then in dispute.
He
attached to his answering affidavit Annexures E, F and G. The
annexures were, according to him, evidence of the letters which he
respectively addressed to the respondents on 10 December 2013, 20 May
2015 and 12 February, 2016. The letters related to the issue of rent
for the property.
He
contended that it was on the basis of the mentioned letters/annexures
that the respondents were made aware of his authority to sue for, and
on behalf of, the applicant.
The
deponent's argument is devoid of any substance.
Authority
to speak or act for, and on behalf of, the applicant can never be
derived from the correspondences which he made to, or with, the
respondents as he claimed.
A
company, as a legal person, has no mouth through which it articulates
its intentions. It has no ears with which to hear. It has no sense of
sight or smell. It has no mind of its own. It speaks to no one except
through its directors, not individually but collectively, through
resolutions which
they
pass when they are assembled in one room for the purpose of
transacting the business of the company. Directors and no one else
are, together, the eyes, ears, nose and mind of the company.
Hahlo
brings out the above stated principle in a clear and lucid manner in
his South
African Company Law
through cases, 6th
ed. The learned author makes reference to the board of directors and
their powers. He states at p343 as follows:
“The
powers of the company vest in the directors as
a board, and not as individuals.
Directors exercise their powers by passing resolutions at board
meetings; of which proper
notice must be given to all directors,
and at which a quorum must be present ….” [emphasis added].
Just
as the mind is the controlling faculty of a person's whole being,
directors are the controlling mind of the company. They manage it and
they act on its behalf.
The
Supreme Court restated that obvious position in Madzivire
& Ors v Zvarivadza & Ors 2006
(1) ZLR 514 (S) the headnote of which reads:
“A
company, being a separate legal entity from its directors, cannot be
represented in a legal suit by a person who has not been authorised
to do so. This is a
well-established legal principle which the courts cannot ignore….
The fact that a person is the managing director of the company does
not clothes him with the authority to sue on behalf of the company in
the absence of a resolution authorising him to do so. The general
rule is that directors of a company can
only act validly when assembled at a board meeting.
An exception to this rule is where a company has only one director
who can perform all judicial acts without holding a full meeting”
[emphasis added.]
It
is evident, from the foregoing, that the assertion of the deponent to
the founding affidavit which is to the effect that he did not need to
produce proof of authority was misplaced.
The
law is clear on the matter. Authority to sue is a sine
qua non
of applications of the present nature.
He
said his statement was anchored on the advice which his legal
practitioners tendered to him. That advice was unfortunately for him
a very poor one.
A
fortori
when his authority to sue for, and on behalf of, his employer was
being challenged. He did not say the applicant fell into the category
of exceptions which the Supreme Court enunciated in Madzivire's
case.
Madzivire
v Zvarivadza
over-ruled the case which he cited in support of his position on the
matter at hand. Direct
Response Marketing (Pvt) Ltd v Shepherd,
1993 (2) ZLR 218 (H) was decided by this court before Madzivire
v Zvarivadza.
I
mention in passing that the citation which counsel for the respondent
referred in Tattersal
and Anor v Nedor Bank Ltd,
1995
(2) SA 222, 228F did not match the names of the parties. I was,
therefore, unable to derive any benefit from that case as I did not
find it in the 1995 (2) set of case authorities.
Tattersal
v Nedor Bank
was, at any rate decided earlier than Madzivire
v Zvarivadza.
The
latter case therefore, over ruled the Tattersal
case as it did the Direct
Response Marketing
case.
The
deponent to the founding affidavit had every opportunity to attach to
his answering affidavit a resolution of the applicant's directors
as the law required him to have done. The resolution would have
constituted clear evidence of his authority to depose to the founding
affidavit.
His
decision not to attach the resolution left the applicant's case
standing on nothing. He failed to convince the court that he was
clothed with the requisite authority to speak for, and on behalf of,
his employer. The application cannot, on the mentioned basis, be
allowed to stand.
The
respondents assertion which was to the effect that the court did not
have the jurisdiction to hear the application fell more into the
realms of a wild goose chase than it fell into the domain of reason.
They
hinged that statement on clause 6.1 as read with clause 34 of the
lease agreement.
The
respondents know as much as I do that section 171(a) of the
Constitution of Zimbabwe did not, and does not, allow them to enter
into a contract which ousts the jurisdiction of this court. It reads:
“171
JURISDICTION OF THE HIGH COURT
(1)
The High Court -
(a)
has original jurisdiction over all civil and criminal matters
throughout Zimbabwe;
(b)……….;
(c)………...;
(d)…………..”
GARWE
JA
lucidly stated the inherent jurisdiction of this court in Gawa
& Anor v Willoughyhy's Investments (Pvt) Ltd, 2009
(1) ZLR 368 (S) wherein he remarked at 383 that:
“….
In terms of jurisdiction, the distinction between the Supreme Court
and the High Court may be summarised as follows:
Except
where specifically empowered, the Supreme Court has no jurisdiction
to hear or determine any matter and may only exercise powers in
respect of an appeal in terms of the provisions of the Act and Rules
of the court. The High Court on the other hand has the jurisdiction
to hear all
matters
except where limitations are imposed by law.
In
other words, whilst the Supreme Court may do nothing that the law
does not permit, the
High Court may do anything that the law does not forbid.”
[emphasis added].
For
the abovementioned reason, it was perfectly in order for me to hear
the application.
I
would, in any event, have heard it for the other reason that the
lease agreement which the parties signed contained a condition
precedent which the respondents did
not
fulfil.
The
condition rendered the contract inoperative until it was satisfied.
Reference
is made in this regard to clause 38 of the lease agreement. It reads:
“38.
SURETYSHIP IF TENANT IS A COMPANY
In
the event that the Tenant is a private incorporated company, it is a
condition
precedent to this Agreement
that at the time of signature thereof the Tenant shall furnish to the
Landlord with written deeds of suretyship and co-debtorship signed
by at least two (2) of the directors
of the Tenant (or in the event that the Tenant
has only one director,
that person plus one
other person of equivalent financial means),
binding themselves jointly and severally to the Landlord and as
co-principal debtors with each other and as co-sureties for each
other and renouncing the benefits of excursion and division owed to
the Landlord by the Tenant in terms of this Agreement.” [emphasis
added]
Annexure
B which the deponent to the founding affidavit attached to the
application is the Deed of Suretyship.
Only
one director of the first respondent signed the deed. Dadirai V. T.
Okonkwo signed it. The other director, Smith Okonkwo, did not.
No
reasons were advanced in regard to the observed matter.
It
is evident that the lease contains a suspensive condition. It is also
clear that the condition remained unfulfilled from the time that the
parties signed the lease to date.
A
suspensive condition suspends or postpones the operation of a
contract or obligation until the condition is fulfilled. (See
Innocent Maja: The
Law of Contract in Zimbabwe
p88).
A
suspensive condition, also known as a condition precedent, is an
event or a state of affairs that is required before something else
occurs. It is an event which must occur unless its non-occurrence is
excused before performance becomes due, i.e, before any contractual
duty exists (Wikipedia: the free encyclopedia).
Duhaime's
Law Dictionary
defines a condition precedent as a contractual condition that
suspends the coming into effect of a contract unless and until a
certain event takes place.
The
condition to which the parties subscribed when they signed the lease
is clear and unambiguous. It falls within the ambit of the remarks of
GREENBERG JA who, in Worman
v Hughes & Ors,
1948 (3) SA 495 (A) stated at 505 as follows:
“It
must be born in mind that in an action on a contract, the rule of
interpretation is to ascertain, not what the parties intention was,
but what the language used in the contract means, i.e what their
intention was as expressed in the contract.”
The
condition, in my view, should have been fulfilled informa
specifica
and not per
aequipollens.
In
forma specifica
because
the contract of suretyship required the signatures of at least two of
the first respondent's directors and not one.
The
fact that the first respondent has two directors means that the
signatures of those two to the suretyship deed would have sufficed.
That would have made the lease agreement operative with rights and
obligations of the parties to the lease flowing from the same.
Clause
39.2 of the lease provides that the agreement represents the parties
entire contract and that no amendment, etcetera,
shall be valid until it is reduced to writing and signed by them.
No
such amendment of the agreement was made by the parties.
That,
it is evident, constitutes the parties acknowledgment that their
agreement was to be carried out in its original form.
The
duty to comply with the deed of suretyship lay on the respondents.
They did not fulfil their obligation in the mentioned regard. They
proferred no reason for their non-compliance with the mandatory
provision of the lease which they signed with the applicant.
The
suspensive condition which existed in the deed of suretyship
suspended the rights and obligations of each party to the lease
agreement. The suspension is still extant until the condition is
fulfilled.
It
follows from the foregoing that, but for the lack of authority by the
deponent of the founding affidavit, the applicant could have lawfully
terminated the contract of lease. It, however, cannot do so as it
remained out of, instead of inside, the court.
The
applicant is not before the court.
The
application is, accordingly, dismissed with each party being ordered
to bear its own costs.
Atherstone
& Cook,
applicant's legal practitioners
Gama
& Partners,
respondents legal practitioners
