BP Zimbabwe (Pvt) Ltd v Cedar Petroleum (Pvt) Ltd

The plaintiff (BP Zimbabwe) entered into a written lease agreement with Solta Trading (Pvt) Ltd in September 1998 for stand number 10232 Highfield Township (Machipisa Service Station) until 31 July 2024. BP advanced a loan to Solta to purchase the premises, and the loan amount constituted prepaid rent for the entire 26-year lease period. In 1998, BP took occupation and built a filling station. In 2006, BP exercised its right to sublet the premises back to Solta under a written sub-lease agreement running from 1 January 2006 to 31 December 2006, with monthly rent of US$4,500. The sub-lease agreement prohibited Solta from further subletting without BP's prior written consent. After the sub-lease expired on 31 December 2006, Solta remained in occupation and became a statutory tenant. In February 2009, Solta sublet the premises to the defendant (Cedar Petroleum) without obtaining BP's prior written consent. The defendant took occupation and BP instituted ejectment proceedings. The parties agreed to proceed by way of special case to determine the legal issues.

• Whether the plaintiff has a valid cause of action against the defendant on the pleadings before the court
• Whether the plaintiff has a right to seek the defendant's ejectment from the premises
• Whether a person is legally capable of leasing his or her own property from his/her own tenant
• Whether the sub-lease of the premises by the plaintiff to Solta was legally valid
• Whether Solta was bound by the covenant against sub-leasing at the time of its agreement with the defendant such that the sub-lease to the defendant was legally invalid

1. The defendant and all those claiming occupation through it are hereby evicted from stand number 10232 Highfield Township, Harare (also known as Machipisa Service Station, Corner 112th and Main Streets, Machipisa, Harare). 2. The defendant pays costs of suit.

The binding legal principles established are: (1) Where a lessee acquires a real right in property through a lease in longum tempus, the lessor/owner can validly enter into a sub-lease of the same property with materially different terms without merger occurring, particularly where the arrangement serves as security for a debt owed by the owner to the lessee; (2) A lessor with a real right in property can sue a sub-tenant directly for ejectment in delict (not contract) where the tenant has sublet in breach of a covenant requiring the lessor's consent, without the tenant being joined as a necessary party; (3) A statutory tenant under the Commercial Premises (Rent) Regulations who remains in occupation after lease expiry remains bound by all terms and conditions of the expired lease (including restrictive covenants against subletting without consent) to the extent those terms are consistent with the regulations; (4) A sub-lease entered into without required consent is valueless and confers no rights on the sub-tenant, who becomes a trespasser subject to ejectment.

MUREMBA J observed that while it may be wiser for a lessor to join the tenant as a co-defendant in ejectment proceedings against an unauthorized sub-tenant, the omission to do so is not fatal to the claim. The court also noted that a lessor may choose to sue the tenant as a co-defendant where there is a forfeiture clause and the lessor wishes to eject both the tenant and sub-tenant, indicating that the decision to join the tenant depends on the circumstances and the specific relief sought. The court further observed that denying a lessor the right to eject an unauthorized sub-tenant directly might make it impossible for the lessor to remove an unlawful occupant where the tenant has disappeared, supporting the pragmatic approach taken by the authorities.

This case is significant in Zimbabwean (and by extension South African) property and lease law for establishing that: (1) An owner can validly lease their own property from their tenant where the tenant has acquired a real right through a lease in longum tempus (long-term lease), particularly where the arrangement serves as security for a debt and the terms of the head lease and sub-lease are materially different with no merger; (2) A landlord/lessor with a real right can sue a sub-tenant directly in delict for ejectment where the tenant has sublet without required consent, without necessarily joining the tenant as a co-defendant; (3) Statutory tenants under commercial lease regulations remain bound by restrictive covenants in expired leases (such as prohibitions against subletting) to the extent those terms are not inconsistent with the statutory framework. The judgment clarifies the interaction between contractual lease terms and statutory tenancy rights, and reinforces that courts will not permit arrangements that would allow parties to escape legitimate debt obligations through technical property law arguments.