First Mutual Investment (Private) Limited v Jonsput Trading (Private) Limited and John Kondo and Zanele Kondo

The plaintiff was the owner of Rhodian House in Bulawayo and entered into a lease agreement with the first defendant on 1 October 2012 for Shop 2, leasing the premises for three years from 1 October 2012 to 30 September 2015. On 4 October 2012, the second and third defendants bound themselves as surety and co-principal debtors for the first defendant's obligations. Before the lease expired, the first defendant allegedly breached the agreement by failing to pay rent and operating costs, which attracted interest. The plaintiff instituted legal proceedings to recover the outstanding amounts and obtain vacant possession. The first defendant defended the action, denying liability and alleging the plaintiff had never cancelled the lease. At trial, the parties reached a consent order on liability whereby the defendants agreed to pay USD$34,219.81 with interest. The parties could not agree on costs, with the plaintiff claiming entitlement to legal practitioner and client scale costs based on a specific clause in the lease agreement (Clause 34:14).

• Whether the plaintiff was entitled to costs on a legal practitioner and client scale pursuant to Clause 34:14 of the lease agreement
• Whether the court should exercise its residual discretion to deviate from the costs clause in the contract
• Whether costs should be awarded equitably with each party bearing their own costs
• The application of the doctrine of sanctity of contracts to contractual costs provisions

The first, second and third defendants were ordered to pay the plaintiff's costs on a legal practitioner and client scale, jointly and severally, the one paying the others to be absolved.

Where parties to a lease agreement have expressly agreed that in the event of breach by the tenant leading to legal proceedings, the tenant shall pay costs on a legal practitioner and client scale, the court must enforce that contractual provision in accordance with the doctrine of sanctity of contracts. The court retains a residual discretion to refuse to enforce such costs provisions only in special or exceptional circumstances where the claimant's conduct warrants depriving them of the agreed costs. Absent such special circumstances, the court is bound to give effect to the contract as it stands and cannot make a new contract for the parties.

The court observed that both legal practitioners, despite not being novices, failed to draw the court's attention to the specific costs clause in the lease agreement (Clause 34:14) during their submissions, which perturbed the court. The court noted it had to discover this clause itself when reviewing the lease agreement. The court also commended the parties' legal practitioners for their efforts in settling the liability aspect of the dispute, thereby curtailing unnecessary proceedings, even though their clients could not agree on costs. The court remarked that the defendants were being "overly simplistic" in their expectations regarding what issues would be ventilated at trial, given they had also filed a counterclaim raising issues beyond just the measurement of leased space.

This case reinforces the principle of sanctity of contracts in Zimbabwean law, particularly regarding contractual costs clauses. It establishes that where parties have freely and voluntarily agreed to specific costs provisions in a contract (such as legal practitioner and client scale costs in the event of breach), courts will enforce those provisions unless special or exceptional circumstances exist warranting the exercise of residual discretion to deviate from the agreement. The case confirms that courts should not create new contracts for parties but must interpret and enforce existing agreements, and that both parties to a dispute may contribute to litigation complexity, not just the claiming party.