IMVELO SAFARI LODGES (PRIVATE) LIMITED
HWANGE RURAL DISTRICT COUNCIL
HIGH COURT OF ZIMBABWE
BULAWAYO 18 MAY AND 18 JUNE 2015
Mr J. Sibanda for the applicant
Mr C Dube-Banda for the respondent
MOYO J: This is an urgent chamber application wherein the applicant seeks the following temporary relief:
INTERIM RELIEF GRANTED
“Pending the confirmation or the discharge of this order, this order shall operate as a temporary order having the effect of:
- Restraining the respondent from taking any further action in furtherance of its resolution made on 28 April 2015 terminating the agreement between applicant and respondent dated 17 July 2009 whereby applicant was granted rights to establish a tourist lodge of up to one hundred beds within a designated site under the jurisdiction of the respondent.”
The facts of the matter are that applicant entered into a contract with respondent where in on 17 July 2009 the parties agreed that applicant (then called Matupula Holdings before changing its name to Imvelo Safari Lodges Pvt Ltd) be granted a right to establish a tourist lodge of up to 100 beds within a designated area managed by the respondent. In terms of clause 5 of the agreement which is annexed as “A” to applicants’ papers, the agreement would be valid for a period of 9 years and 9 months and would be automatically renewed for another 9 years and 9 months for a further four consecutive periods until 31 December 2059 unless terminated earlier.
Applicant alleges in its founding affidavit that due to economic problems in the country over the last years they were not able to commence activities that they had agreed to undertake in terms of the agreement.
This caused respondent to write a letter dated 28 April 2015 to the applicant. The letter is annexed to the application as Annexure E. The letter reads as follows:
“Re: Termination of 100 bed lodge site (sic)
The above matter refers.
At an ordinary full council meeting held on 28 April 2015, council resolved that the Lease for (sic) 100 bed lodge site be terminated.
You are accordingly given three months’ notice effective 1 May 2015, in terms of the provisions of the agreement. The termination of the lease has been necessitated amongst other issues (sic) lack and/or inability to effect meaningful development since 2009.”
Clause 19 (a) of the agreement entered into by the parties, provides thus:
“The council shall have the right, upon giving a minimum of three months’ notice to that effect, to terminate this agreement if the operator (applicant) is in breach of any of the terms or conditions of this agreement in terms of section 22 of this agreement.”
Section 22 (b) of the same agreement provides as follows:
“If the operator commits or permits any breach of the terms or conditions of this agreement, the council shall give the operator at least three months’ notice in writing from time of receipt by the operator to remedy such breach or default and should the operator not remedy such breach or default within that period the council may have the right upon giving a minimum of a further three months’ notice declare the agreement to (sic) be terminated and may withdraw safari right and eject the operator, providing that the breach has not been rendered in the interim, but without prejudice to any rights which council or the operator shall have in terms of this agreement in particular reference to the terms of section 12 above (sic)”
In the case of Ministry of Public Construction and National Housing vs Zesco Pvt Ltd 1989 (2) ZLR 311 at page 316, KORSAH JA had this to say:
“Where parties to a contract have agreed upon a procedure for terminating an agreement, they are bound by the provisions spelling out those procedures as if they have been imposed upon them by law, and a departure from the agreed procedure will not result in an effective termination of the contract.”
In my view the parties are bound by the terms and conditions of the agreement they entered into. The doctrine of sanctity of contracts demands that once parties enter into an agreement, they must honour its terms and conditions.
Even if on the face of it applicant appears to be in breach of the contract, in terms of the agreement entered into with the respondent, respondent is duty bound on seeking to terminate same, to do so in terms of the agreement entered into by the parties, particularly clause 22 (b) thereof which is quoted herein. The respondent clearly has not followed the provisions of clause 22 (b) of the agreement entered into by the parties which provides that in seeking to cancel, respondent should first of all call upon applicant to remedy the breach within three months, and if that is not done, then further a three months’ notice be given for the termination of the contract.
This clearly was not done and therefore the purported cancellation by the respondent is unlawful and cannot be allowed to stand. Respondent can only cancel the agreement in strict adherence to clause 22 (b) in my view.
I accordingly grant the provisional order.
Job Sibanda and Associates, applicant’s legal practitioners
Messrs Dube-Banda, Nzarayapenga and partners, respondent’s legal practitioners