Zimbabwe International Trade Fair Company v Viking Plastics

The parties entered into a lease agreement on 5 April 2004 whereby the Applicant leased to the Respondent a portion of the Zimbabwe International Trade Fair (ZITF) grounds (sites B1, B2 and part of B4). The lease commenced on 1 January 2004 and expired on 31 December 2009. The Respondent was to pay annual rent with the Applicant having the right to increase rent annually by not less than 25%. The lease provided for renewal for a further 5 years if the Respondent complied with all terms and gave 3 months written notice before expiry. In 2009, Zimbabwe dollarized its currency and the Applicant negotiated new rentals with tenants, advising the Respondent of a rent of US$4,012.00. The Respondent responded in April 2009 requesting to pay in 3 equal instalments, thereby accepting the new rental amount. However, the Respondent failed to pay the balance owed in 2009 and paid nothing for 2010 and 2011. The Respondent remained in occupation of the premises without paying rent after the lease expired, and did not sign a new lease agreement or give proper notice for renewal.

• Whether the Respondent had a bona fide defence to resist summary judgment
• Whether the Respondent had accepted the new rental amount by conduct
• Whether the Respondent was entitled to remain in occupation without paying rent
• Whether the lease agreement had been validly renewed or whether the Respondent was a statutory tenant
• Whether the matter should have been referred to arbitration to determine rental amounts

The court granted summary judgment in favour of the Applicant with the following orders: (1) Confirmation of cancellation of the lease agreement; (2) Confirmation of the Applicant's hypothec; (3) Authorization for the Applicant to evict the Respondent and all persons claiming occupation through it; (4) Payment of outstanding rentals of US$11,633.00 with interest at 5% per annum from 1 September 2011; (5) Payment of holding over damages equivalent to annual rental of US$4,958.00 for occupation beyond 2011; (6) Costs of suit against the Respondent.

The binding legal principles established are: (1) In summary judgment applications, a defendant must raise facts which, if proved at trial, would constitute a valid defence at law that meets the claim squarely; (2) A vague, confusing and insufficiently detailed defence will not prevent summary judgment being granted as it indicates the defendant has no real defence; (3) Acceptance of contractual terms can be done tacitly through conduct - a party who requests to pay an invoiced amount in instalments thereby accepts the amount claimed; (4) A tenant who wishes to dispute rental amounts must nevertheless continue to pay what it considers to be a fair rental and cannot simply cease all payments while occupying premises; (5) Renewal of a lease agreement is conditional upon compliance with the terms of the original lease, including payment of rent and provision of written notice as stipulated in the agreement.

The court made observations about the position of statutory tenants, noting that the only basis for a tenant to continue occupation after expiry of a written lease would be as a statutory tenant, in which case the tenant must continue to pay rentals and observe all terms and conditions of the lease agreement. The court also commented that the Respondent was "not being candid with the court" and was opposing the application "merely for dilatory purposes and nothing else," indicating judicial disapproval of the Respondent's conduct in the proceedings.

This case is significant in Zimbabwean law (which shares common law principles with South African law) for reinforcing the principles governing summary judgment applications and the test for establishing a bona fide defence. It demonstrates that a defence must be clear, detailed and honest, not vague and confusing. The case also establishes important principles regarding tacit acceptance of contractual terms through conduct, the obligations of tenants to continue paying rent even where there is a dispute about the amount, and the requirements for renewal of lease agreements. It affirms that tenants cannot remain in occupation of premises without paying consideration and that raising a vague defence merely to delay proceedings will not prevent summary judgment being granted.