Booth Manufacturing Private Limited v AG Venture Private Limited

On 1 April 2004, the plaintiff leased premises at 55 Coventry Road, Harare, to the defendant for light manufacturing purposes. The lease was extended multiple times, with the last extension ending 30 September 2009 at a monthly rental of US$4,050. A draft lease agreement for the period 1 October 2009 to 31 December 2009 was drawn up with a new monthly rental of US$8,000, but was never signed by the parties. Despite the absence of a signed agreement, the defendant made payments at the US$8,000 rate from October 2009 through December 2009 and made additional payments in January, February, October and November 2010 at that rate. In January 2010, the defendant discovered that its sub-tenant, Zacro Services (Pvt) Ltd, was also paying the plaintiff US$2,000 per month. The defendant then unilaterally decided to treat its US$8,000 payments as double payments of the old US$4,050 rate. The defendant also breached the lease by failing to pay utility bills. By February 2012, the plaintiff claimed rental arrears of US$126,000 (after deducting Zacro's US$50,000 payments) and utility arrears of US$35,677.

• Whether the defendant had accepted the new monthly rental of US$8,000 from 1 October 2009 despite the absence of a signed lease agreement
• Whether the defendant was entitled to unilaterally change the rental rate and treat payments as double payments at the old rate
• Whether the defendant's breaches (failure to pay utilities and rental arrears) entitled the plaintiff to terminate the tenancy and claim ejectment
• Whether an appeal should be noted and whether the order should be enforceable notwithstanding an appeal

The court ordered: (1) The defendant and all persons claiming occupation through it to vacate 55 Coventry Road, Workington, Harare, within 14 days from service, failing which the Deputy Sheriff is authorized to evict them; (2) The defendant to pay US$126,000 in respect of rental arrears within 14 days, together with interest at 5% per annum from 1 March 2010 to 28 February 2012; (3) The defendant to pay holding over damages at US$8,000 per month with interest at 5% per annum from 1 March 2012 to the date of eviction; (4) The defendant to pay US$35,677 in respect of arrear utility bills and such other utility bills that shall accrue up to eviction; (5) The defendant to pay costs of suit on an attorney-client scale; and (6) This order shall be enforceable notwithstanding the noting of an appeal.

The binding legal principle established is that acceptance of new lease terms can be demonstrated through conduct, specifically through consistent payment at a new rental rate, even in the absence of a signed formal lease agreement. A tenant cannot unilaterally change agreed rental terms without mutual consent, and conduct demonstrating acceptance of new terms binds the tenant to those terms. Material breaches of lease obligations, including failure to pay utilities and accumulation of rental arrears, entitle a landlord to terminate the tenancy and seek ejectment. Where a party makes clear concessions and admissions of breach in joint pretrial proceedings and during trial, the court may determine that an appeal would lack merit and order that its judgment be enforceable notwithstanding the noting of an appeal.

The court observed that the defendant's refusal to consent to judgment appeared to be solely for the purposes of noting an appeal to delay eviction, rather than based on any genuine dispute of facts or law. The court commented that it believed the matter could have been settled amicably as suggested by the defendant's witness during the hearing, expressing implicit criticism that this opportunity was not pursued. The court's statement that "the noting of an appeal in this case would have no merit at all" was a strong observation about the weakness of any potential grounds for appeal given the comprehensive concessions made by the defendant. The court also made observations about professional propriety, noting the defendant's counsel's submission that it would be improper on a professional basis to deny the admitted breaches.

This case is significant in Zimbabwe's landlord and tenant law for establishing principles regarding acceptance of lease terms through conduct despite the absence of a signed formal agreement. It demonstrates that consistent payment at a new rental rate can constitute acceptance of amended lease terms. The case also addresses the circumstances in which a tenant's breaches (non-payment of utilities and rental arrears) justify termination and ejectment. The court's willingness to make the order enforceable notwithstanding an appeal reflects the judiciary's approach to cases where appeals are perceived as delaying tactics lacking merit, particularly where clear concessions and admissions have been made.