Local Authorities Pension Fund (Pvt) Ltd v Moonlight Provident Associates (Pvt) Ltd

The applicant and respondent entered into three lease agreements between November 2004 and October 2006 for the 4th, 5th, 6th, and 7th floors of LAPF Centre in Harare. The lease agreements provided for monthly rent payable in advance on the first day of each month and operating costs. Although the written lease agreements expired, clause 2.3 saved certain provisions. From February 2009, the respondent stopped paying rent and operating costs. On 6 February 2009, the respondent's legal practitioners offered to pay US$9,000.00 per month as rent, which the applicant accepted. Despite this undertaking, the respondent failed to pay, accumulating arrears of US$82,443.25. The respondent later claimed there was an overpayment in Zimbabwe dollars during the hyperinflationary period and surrendered portions of the premises on 27 May 2009.

• Whether a valid lease agreement existed after the written agreements expired, particularly regarding rental amounts
• Whether the offer of US$9,000.00 per month constituted a binding agreement on rental amounts
• Whether the respondent's claim of overpayment in Zimbabwe dollars raised a genuine triable issue
• Whether the respondent had a bona fide defence to the summary judgment application
• Whether the legal practitioners had authority to make admissions regarding the outstanding arrear rentals

Summary judgment granted in favor of the applicant with costs.

Where parties to an expired lease agreement continue the lease relationship and one party offers a specific rental amount which the other accepts, a binding agreement on rentals is created. Claims of overpayment or advance payment must be raised at the earliest opportunity and reflected in contemporaneous communications to be credible; belated claims raised only after legal proceedings commence will be viewed as raised in bad faith for purposes of delay. The authority of legal practitioners to make admissions on behalf of their clients will be presumed in the absence of evidence from those practitioners disavowing such authority. A defence will not succeed in defeating summary judgment where it is raised merely for purposes of delay and lacks bona fides.

The court observed that common sense dictates that if a tenant had made an overpayment or payment in advance of rentals, this would have been raised at the earliest opportunity and would have featured in subsequent communications between the parties. The court also commented that had the respondent not itself suggested the rental amount of US$9,000.00, it may have been within their rights to argue that no rentals were fixed after the adoption of the multi-currency economic regime in Zimbabwe.

This case demonstrates the Zimbabwean courts' approach to lease agreements during the transition from hyperinflation to the multi-currency regime in 2009. It establishes principles regarding the continuation of lease obligations after expiry of written agreements, the formation of rental agreements through offer and acceptance, and the courts' willingness to reject defences raised merely for purposes of delay in summary judgment applications. The case also illustrates the importance of contemporaneous documentation and the difficulty of raising belated claims of overpayment without supporting evidence from the relevant period.