JCDecaux Zimbabwe (Private) Limited v City of Harare

The parties entered into a 10-year lease agreement commencing on 2 October 2006 for the lease of advertising sites for erecting billboards in the Greater Harare Area, expiring on 30 September 2016. On 13 May 2015, the applicant exercised its option to renew the lease for a further 10 years terminating on 30 September 2026. The respondent did not respond to the renewal exercise for over a year and continued to bill and receive rental payments from the applicant after the initial 10-year period expired. On 22 March 2017, the respondent issued a notice claiming the lease was not renewable and gave the applicant 24 hours to remove its advertising signs, failing which the respondent would remove them at the applicant's cost. The applicant then filed an urgent chamber application on 24 March 2017 seeking an interim interdict to prevent removal of the billboards.

• Whether the matter was urgent and deserved to be heard on an urgent basis
• Whether the applicant had a prima facie right to maintain its billboards on the leased sites
• Whether the respondent could rely on municipal by-laws to unilaterally terminate a contractual relationship without obtaining a court order
• Whether the respondent's silence in response to the exercise of the renewal option constituted acquiescence
• Whether tacit relocation applied to extend the lease relationship
• Whether the applicant satisfied the requirements for an interim interdict

The urgent chamber application was granted with costs. An interim interdict was issued stopping the respondent or anyone acting on its behalf from removing, defacing or otherwise interfering with the applicant's advertising signs and billboards located at various sites in the Greater Harare area, pending the return date for a final declaratur on the validity and subsistence of the lease agreement.

Municipal by-laws, even if valid, do not permit a local authority to act extra-judicially or oust the jurisdiction of the courts. A local authority cannot lawfully terminate a contractual relationship or remove property without first obtaining a court order establishing that the contract was lawfully terminated. Only a court of law has the power to make legal determinations regarding the validity and termination of contractual obligations. Where a party exercises an option to renew a lease agreement and the other party remains silent for an extended period while continuing to accept rental payments, this constitutes acquiescence and creates a tacit relocation that continues the landlord-tenant relationship, which can only be terminated on reasonable notice and through proper legal process. The existence of regulatory by-laws does not excuse a party from adhering to its contractual obligations or preclude it from entering into contracts.

The court observed that allowing a party to flout contractual agreements on the basis that the injured party can sue for damages would destroy the very foundations of the law of contract. The purpose of contractual damages is to put a party in the position it would have been had a breach not occurred, but an interdict is the appropriate remedy to prevent a breach from occurring in the first place. The court also noted that silence does not necessarily amount to acquiescence - each case must be decided on its own circumstances. However, where circumstances are such that a party was reasonably and fairly expected to respond and does not do so, especially where a document refers to the establishment of a legal relationship, the court may infer acceptance. The court cited with approval the statement from Farai Mushoriwa v City of Harare that the respondent "seeks to oust the jurisdiction of the courts so that it can operate as a loose cannon and a law unto itself."

This case is significant in Zimbabwean jurisprudence (though the user requested South African law analysis, this is a Zimbabwean case) as it reinforces the principle that municipal authorities cannot use by-laws to oust the jurisdiction of courts or to act extra-judicially in terminating contractual relationships. It affirms that even where by-laws exist, due process must be followed and court orders must be obtained before taking action that affects contractual rights. The case also illustrates the application of the doctrine of tacit relocation and acquiescence in lease agreements, and reinforces the sanctity of contracts - that parties cannot unilaterally escape contractual obligations by relying on regulatory provisions without following proper legal procedures. The judgment emphasizes that municipal authorities are bound by their contractual obligations despite having regulatory powers under by-laws.