Southview Holdings (Pvt) Ltd v Bruce Nhamo Taruvinga and Micro Pal Finance (Pvt) Ltd

The plaintiff, Southview Holdings (Pvt) Ltd, entered into a written lease agreement with the first defendant, Bruce Nhamo Taruvinga, as tenant. The second defendant, Micro Pal Finance (Pvt) Ltd, stood as surety and guarantor for the first defendant. The first defendant breached the lease agreement by failing to pay rent. At the time of breach, rent arrears amounted to US$9,000.00. The first defendant continued to occupy the premises after the breach. The plaintiff sought cancellation of the lease, ejectment, payment of arrears, and holding over damages at US$1,500.00 per month from 1 April 2015. The defendants initially defended the claim but later admitted the breach and settled issues relating to rent arrears and ejectment before trial. The sole issue for trial became the quantum of holding over damages. The leased property was a 3-bedroomed apartment in a cluster development.

• Whether the plaintiff was entitled to holding over damages at the rate of US$1,500.00 per month
• What constituted the market rental for the purposes of assessing holding over damages
• Whether the plaintiff had discharged the onus of proving market rentals despite general economic downturn

The court ordered that the first and second defendants pay the plaintiff jointly and severally, the one paying the other to be absolved: (i) Arrear rentals in the sum of US$9,000.00; (ii) Holding over damages in the sum of US$1,500.00 per month for the period 1 April 2015 to the date defendant vacated plaintiff's apartment; (iii) 5% per annum interest on US$9,000.00 from 1 March 2015 to date of payment in full; (iv) 5% per annum interest on holding over damages from 1 April 2015 to date of payment in full; (v) Costs of suit on the scale of legal practitioner and client in terms of clause 24.4 of the cancelled lease agreement.

The binding legal principles established are: (1) Market rentals at the time of breach of a lease agreement constitute the yardstick for determining holding over damages; (2) The onus to establish market rentals for the purpose of proving holding over damages rests on the plaintiff/lessor; (3) The standard of proof required is on the usual balance of probabilities; (4) Where a plaintiff adduces unchallenged evidence establishing market rentals and the defendant fails to provide cogent evidence in rebuttal, the plaintiff will have discharged the onus of proof; (5) A surety and guarantor in a lease agreement is jointly and severally liable with the principal debtor for rent arrears, holding over damages, and costs.

The court observed that the economic downturn in Zimbabwe did not spare the plaintiff's property renting business and that 2 and 4-bedroomed apartments had been difficult to fill once vacated, with a number of units remaining vacant. However, the court noted that market conditions may affect different property types differently, with 3-bedroomed apartments proving more resilient in the particular market area. The court also noted that upon a proper reading of the defendants' summary of evidence, issue 1.1 of the joint pre-trial conference minute could not properly have been referred to trial, suggesting some procedural irregularity in the pre-trial process that was ultimately rendered moot by settlement.

This case provides guidance on the assessment of holding over damages in lease agreements under Zimbabwean law, particularly in the context of economic downturn. It demonstrates the application of the principle that market rentals at the time of breach determine holding over damages, and clarifies that the onus rests on the plaintiff to prove market rentals on the balance of probabilities. The case also illustrates that market conditions may vary for different property types even during general economic decline, and that unchallenged evidence may satisfy the burden of proof where defendants fail to adduce cogent rebuttal evidence.