THE High Court has ordered the National Railways of Zimbabwe (NRZ) to surrender rentals collected from tenants at a complex in Victoria Falls following a protracted court battle with Landela Safari Adventure (PVT) Limited.
Landela had filed a spoliatory and interdict relief before the High Court following the dispute with NRZ.
The safari operator cited NRZ, The Victoria Falls Trading Post (Private) Limited, Dedication Collections (Private) Limited and Victoria Falls Adventures (Private) Limited as respondents.
In his ruling, High Court judge Justice Siyabona Musithu said he found nothing in the lease agreement that specifically precluded the court from granting the relief that was being sought by Landela.
“The court finds the preliminary point devoid of merit and it is accordingly dismissed. The applicant (Landela) was the majority shareholder in the second respondent (Victoria Falls Trading Post) and had exercised exclusive control of the entity for the past 20 years. The first respondent (NRZ) was a minority shareholder,” he said.
Justice Musithu also ruled that Landela had an interest in the affairs of the NRZ and could not stand by while matters deteriorate because of its fights with a fellow shareholder.
He said the tenants’ decision to pay rentals as dictated by NRZ was in breach of the contract, adding that Landela could sue them.
“The fact that NRZ confirmed receiving rentals from some of the tenants, yet it accepts the existence of a lease agreement between the tenants and the second respondent is quite revealing,” he said.
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The judge also called for the parties to respect the integrity of the arbitral process they submitted in the agreement.
Landela and the NRZ entered into a joint venture arrangement involving the affairs of The Victoria Falls Trading Post, Dedication Collections and Victoria Falls Adventure.
According to court papers, NRZ owns immovable properties in Victoria Falls and in terms of the agreement signed on November 27, 1998, the railway operator leased the properties to Landela.
The safari operator agreed to construct three houses and two lodges at its expense as consideration for the lease of the properties.
The operator also agreed to develop a commercial centre on the same land with the NRZ as a development partner which entailed the acquisition of shares in The Victoria Falls Trading Post.
The arrangement gave birth to the Victoria Falls Trading Post in which the parties were the only shareholders.
The properties were leased to the company in terms of an agreement signed between the parties on October 8, 1999.
The lease had a tenure of eight years from the date of signing and there was an option to renew the lease for a maximum of two further periods of eight years and four months.
The commercial structures, which were set up by Landela, were to be rented out to third parties with parties to the agreement sharing the rental income at agreed ratios.
However, a dispute arose between the parties about the lease and shareholders agreement which was referred to arbitration by NRZ in terms of the constitutive documents.
Landela accused the NRZ of taking the law into its hands and locking the Victoria Falls Trading Post out of the administrative block at the commercial centre.
The NRZ allegedly threatened to lock out some tenants from the premises while signing lease agreements with other tenants. Landela argued that NRZ,’s locking out of the Victoria Falls Trading Post, was contrary to the rule of law while undermining the lease, joint venture and the shareholder agreement.
It further argued that NRZ's conduct negated the arbitration proceedings which were underway, adding that it had bright prospects of success in the arbitration proceedings.
However, in its opposing papers, NRZ raised preliminary issues of locus standi, adding that Landela was never in possession of the premises. NRZ argued that the Victoria Falls Trading Post was given possession of two offices which it is occupying.
It also denied locking out the tenants arguing that the application for spoliation and interdict was a waste of time and misplaced.
