Old Mutual Property Investments v Metro International (Private) Limited and Thomas Meikles Centre (Private) Limited

The applicant (landlord) entered into two lease agreements for premises in the Westgate Shopping Complex in Harare: the W Store lease with the 1st respondent on 19 November 1995 and the TM lease with the 2nd respondent on 8 March 1996. Both leases were negotiated simultaneously. The W Store lease (2264.53 sqm) permitted use for a clothing store plus a supermarket not exceeding 1000 square metres. The TM lease (4183.48 sqm) was for a supermarket, with an exclusivity clause preventing the applicant from leasing any other premises over 1000 sqm as a supermarket. In June 2004, the 1st respondent informed the applicant it intended to convert the W Store to a Spar franchise. A dispute arose as to whether the 1000 sqm restriction applied only to the trading area or included ancillary facilities (storerooms, butchery, bakery, etc.). The 1st respondent proceeded with renovations and commenced trading as Spar in May 2005. The applicant sought a declaratory order on the meaning of "supermarket" in the leases.

• What is the proper interpretation of the word 'supermarket' in the context of the two lease agreements?
• Does 'supermarket' include only the trading floor area or also ancillary facilities such as storerooms, cold-rooms, kitchens, and other service areas?
• Whether the contra proferentem rule should be applied in interpreting the lease agreements
• Whether the exclusivity clause in the TM lease restricts the application of the W Store lease
• Whether an unsigned addendum to the W Store lease is binding on the parties

1. Declaration granted that the word "supermarket" in the two lease agreements includes the trading floor area and ancillary facilities (reception and pricing areas, kitchens, storerooms, cold-rooms, toilets and such other facilities as are necessary for or ancillary to the business of a supermarket). 2. Each party to bear its own costs.

The binding legal principle is that the word "supermarket" in a commercial lease agreement must be interpreted according to its ordinary colloquial meaning as encompassing the entire commercial enterprise, including not only the trading floor area accessible to the public but also all ancillary facilities necessary for conducting the business, such as storage areas, refrigeration facilities, kitchens, and ablution facilities. When interpreting contracts, courts may have regard to the surrounding circumstances and context in which agreements were negotiated, as well as the subsequent conduct of the parties, to ascertain their true intention. The contra proferentem rule is a rule of last resort applicable only where parties have unequal bargaining power and the proper meaning cannot be ascertained through ordinary interpretive methods; it does not apply where agreements were negotiated between parties of relatively equal bargaining strength.

The Court observed that the exclusivity clause in the TM lease (clause 40) was not entirely satisfactorily drafted in its reference to "any other premises over 1000 square metres in the Building as a supermarket" and could have been better drafted to reflect the parties' agreed intention. The Court drew instructive analogies with other commercial enterprises such as restaurants, bakeries, bottle-stores, pharmacies and butcheries, noting it would be absurd to divorce ancillary facilities (kitchens, storerooms, dispensaries, cold-rooms) from trading areas when determining what constitutes the relevant commercial enterprise. The Court noted that the propriety and necessity of seeking a declaratory order in the absence of consensus was not disputed by any party, indicating that resort to the Court was proper and unavoidable in the circumstances.

This case is significant for establishing principles of contractual interpretation in Zimbabwean law, particularly in commercial lease contexts. It affirms that technical terms in contracts should be interpreted according to their ordinary colloquial meaning and common usage rather than restrictive technical definitions. The judgment reinforces that courts will consider the surrounding circumstances and context of negotiations when interpreting commercial agreements, and that the conduct of parties after contract conclusion is relevant evidence of their original intention. The case also clarifies the limited application of the contra proferentem rule, restricting it to situations where parties have unequal bargaining power and where the intention cannot be ascertained through ordinary interpretive methods. The decision provides important guidance on the interpretation of exclusivity clauses in commercial leases and the relationship between contemporaneously negotiated lease agreements in shopping complexes.