Amadhila v Pepata Investment CC (HC-MD-CIV-ACT-CON-2022/02608) [2025] NAHCMD 142 (2 April 2025)

REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK

JUDGMENT

Case no: HC-MD-CIV-ACT-CON-2022/02608

In the matter between:

ONESMUS TOBIAS AMADHILA PLAINTIFF

and

PEPATA INVESTMENT CC DEFENDANT

Neutral citation: Amadhila v Pepata Investment CC (HC-MD-CIV-ACT-CON-2022/02608) [2025] NAHCMD 142 (2 April 2025)

Coram: PARKER AJ

Heard: 16 – 19 & 24 July, 22 October & 5 December 2024

Delivered: 2 April 2025

Flynote: Defendant lessee’s breach of a material term of lease agreement – Defendant failing to pay water bill leading to disconnection of water supply to the leased property – Lessee vacating property upon expiry of lease – Plaintiff lessor claiming contractual damages for the breach.

Summary: The defendant breached its obligation under the lease agreement by failing to pay a water bill presented by the Windhoek Municipal Council. The defendant’s defence was that it and other tenants of the property should be responsible for defraying the amount charged. The defendant pleaded that it was responsible for 60 per cent only of the total amount charged. Its reason was that since it carried on the business of restaurant on the premises, it should bear the lion’s share of the amount charged. The defendant’s defence was not met by the plaintiff.

Regarding the claim for contractual damages arising from the defendant’s breach of the lease agreement, the court found that not one iota of evidence was placed before the court to establish fully the damages claimed. Consequently, the court rejected the claim.

Held, that damages cannot be presumed just because there was breach of contract.

Held, further, that what the plaintiff claims are special damages, and they must be established fully by evidence; for, mere expectation of loss, however probable, is not enough.

ORDER

1. Judgment for the plaintiff in the amount of N$107 709.40, plus interest on the said amount at the rate of 20 per cent per annum, calculated from 19 July 2022 (the date of issuance of summons) to date of full and final payment.

2. The defendant must pay 50 per cent only of the plaintiff’s costs on the scale as between party and party.

3. The matter is finalised and removed from the roll.

JUDGMENT

PARKER AJ:

Introduction

[1] The instant matter concerns a lease agreement and the plaintiff’s contention that the defendant breached some of the material terms of the lease agreement. Consequently, the plaintiff claims:

(a) payment of the rent in arrears;

(b) payment of stamp duty;

(c) payment of Windhoek Municipal Council’s water bill;

(d) contractual damages;

(e) declaration that the lease agreement be cancelled; and

(f) collection of commission.

[2] I note from the evidence that the defendant carried on the business of culinary, restaurant and catering services. It was for those purposes that it rented the plaintiff’s property situated at Erf. No. 3176, Beethoven Street, Windhoek West, Windhoek. Ms Shikale-Ambondo represents the plaintiff, and Mr Mutorwa represents the defendant.

[3] As I see it, the parties have found themselves in the present legal-judicial pickle for the following reason: In the implementation of the lease, certain rights of the lessor were not insisted on by the lessor at the appropriate time. A notable example is that, although the lease agreement contained a non-variation clause, the parties – by their conduct accepted a variation of some terms of the agreement.¹ Another notable example in that regard is the payment of ‘a deposit’ by the defendant under clause 9 of the agreement. The lease agreement provided the payment of ‘a deposit equal to two times (monthly) rent’, but the deposit that the defendant paid was equal to one – not two – month’s rent. I fail to see the relevance of Mr Mutorwa stating the obvious. In any case, if that happened, the result is that one month’s rent was outstanding.

[4] Besides, certain provisions of the lease agreement could not be implemented as envisaged because those provisions were out of touch with the reality on the ground, as it became apparent during the implementation of the lease, particularly the provisions respecting utility charges under clause 7 of the agreement. The evidence established the following fact, and the plaintiff was aware of it: There were other tenants living on the property (‘the backyard tenants’), who also consumed water supplied to the property. I do not accept with Ms Shikale’s submission that the backyard tenants ought to have been joined by the defendant. I find that the defendant set up as her defence the fact that the backyard tenants lived on the property and consumed water supplied to the property by the Windhoek Municipal Council, as the defendant did, and, therefore, the defendant alone should not be responsible for the paying of the Municipality’s water bill.

[5] The findings laid out in paras [3] and [4] are crucial in the determination of the plaintiff’s claim. I shall return to them in due course, where necessary.

[6] The plaintiff’s particulars of claim are essentially a rehearsal of the terms of the lease agreement. Indeed, the trend is repeated in the plaintiff’s witness statement. Be that as it may, the long and short of the claim is this: The defendant failed to carry out some of its obligations under the lease agreement, particularly, its obligations to pay the rents when they fell due; to pay for the stamp duty that was affixed to the agreement; and to pay municipality bills for water consumption. In the result, the plaintiff claims arrear rents, cancellation of the lease agreement and contractual damages.

[7] In support of his claim, the plaintiff gave evidence and called one witness in the name of Ms Orodesia Amadhila, his daughter. I find that the plaintiff’s evidence consisted of mainly a rehearsal of the material provisions of the lease agreement and a great deal of hearsay evidence, particularly information given to him by Orodesia. Indeed, I find that it was Orodesia, who searched for and got hold of the defendant, and who, as the authorized agent of the plaintiff, entered into the lease agreement with the defendant; and who, managed the leased property.

[8] For the aforesaid reasons, I find that the greater part of the plaintiff’s evidence has no probative value and is, therefore, irrelevant. However, these pieces of evidence of his have probative value and are, therefore, relevant:

(a) The period for which payment of rent was outstanding at the relevant time was 12 months not 19 months.

(b) The period in respect of which contractual damages are claimed is 12 months not 19 months.

(c) The leased property has been sold and so the relief that the lease agreement be cancelled has been overtaken by events and is not persisted in.

[9] Orodesia’s evidence, too, in most part stands in the same boat as the plaintiff’s evidence. Some aspects of her evidence were a repetition of the terms of the lease agreement and aspects of an ‘Acknowledge of debt’ note duly made by Jolokeni Nambahu on 17 February 2021 (‘the Acknowledge of Debt’). The Acknowledgement of Debt was admitted as Exhibit ‘B’.

[10] Jolokeni described herself as the sole member of the defendant, a close corporation, and its sole managing member. Jolokeni gave evidence in support of the defendant’s defence. No other witness was called for the defence. Indeed, it should be remembered, it was Jolokeni, who, for and on behalf of the defendant, concluded the lease agreement with the plaintiff (represented by Orodesia), as aforesaid.

[11] Jolokeni admitted certain items. Such admission is in the nature of a settlement or compromise.² Consequently, in the absence of credible evidence capable of setting at naught that which was admitted, the court ought to give effect to the Acknowledgement of Debt. Significantly, Mr Mutorwa did not seek to condemn the legality and legitimacy of the Acknowledgement of Debt in toto. Counsel rather took issue with clause 4 thereof, which relates to the aforesaid water bills.

[12] As Ms Shikale submitted, in her examination-in-chief-evidence, Jolokeni confirmed the defendant’s indebtedness to the plaintiff. The only beef she had concerned the amount of the indebtedness. Consequently, the level of the enquiry is directed to the amount of indebtedness and in respect of what items.

Rent in arrears (N$49 200)

[13] The plaintiff pleaded and led evidence to sustain his allegation that rent in arrears to the tune of N$49 200 remained unpaid by the defendant at the relevant time, despite numerous demands made for payment. Those allegations are contained in paras 8-10 of the particulars of claim; and it is important to note that they are admitted unqualifiedly in para 3 of the plea.

[14] The plaintiff pleaded further in para 11 of the particulars of claim that in breach of the lease agreement, the defendant persisted in its failure to pay the outstanding rents as and when they fell due; and on some occasions when a rent was paid, the amount paid was not the total outstanding amount.

[15] The essence of the defendant’s defence thereto is that its failure to pay rents when they fell due ‘was not wilful’. I find that the basis of the defence turns on nothing, because the plaintiff did not plead that the defendant’s failure to meet its obligations to pay the rents when they fell due under the lease agreement was wilful. Additionally, the plaintiff replicated as follows: The defendant’s failure to pay outstanding debts did not start after the Covid-19 Proclamation 7 of 2020 but around the commencement of the lease in 2019. Moreover, during the Covid-19 lockdown, the defendant carried on business on take-away – not sit-in – basis, and the business was fully operational until the defendant vacated the property on 31 July 2021. That is why, accordingly to the plaintiff, in the Acknowledgement of Debt, the defendant did not raise the declaration of a state of emergency as a supervening impossibility.

[16] The foregoing replication remained undemolished at the close of the defendant’s case. Therefore, Mr Mutorwa’s submission on the point and the accompanying authorities are of no assistance on the point under consideration. They cannot take the defendant’s case any further.

[17] The conclusion is, accordingly, inevitable that on the pleadings and the evidence, the plaintiff has established his claim for payment of arrears of rent. I proceed to consider the claim for payment of stamp duty in respect of the revenue stamp that was affixed on the lease agreement.

Stamp duty (N$1 400)

[18] The defendant admitted in the Acknowledge of Debt that it was responsible for paying the stamp duty, and I have held previously that the Acknowledge of debt be given effect to. That puts to bed the claim that the defendant is responsible for paying stamp duty. I now proceed to consider the utility charges raised by the Windhoek Municipal Council.

Windhoek Municipal Council’s utility charges (N$95 182.47)

[19] These charges included principally charges for water consumption and removal of refuse. The evidence is that at the relevant time, the utility charges stood at N$95 182.46. The defendant pleaded that it was not responsible for paying the total amount of the charges because there were other tenants living at the backyard of the property, as I have found previously. The defendant pleaded further that it was responsible for only 60 per cent of the water consumption, and the backyard tenants 40 per cent. Jolokeni repeated it in her cross-examination-evidence and added that she had pegged her portion of the bill at 60 per cent because of the nature of the aforementioned business the defendant carried on.

[20] Significantly, the plaintiff did not replicate to the defendant’s averment. The plaintiff lost the opportunity of meeting the case made by the defendant in the plea.³ Not only did the plaintiff fail to meet the defendant’s aforesaid case, but it also failed to lead evidence to challenge the defendant’s version relating to the apportionment of responsibility for the water bill. Ms Shikale rebuffed the defendant’s version from the bar without more. At least, the defendant did well to assist the court, but the same cannot be said of the plaintiff.

[21] In any case, in her submission, Ms Shikale questioned only how the defendant arrived at the ratio of responsibility applied by it. I find that Jolokeni’s apportionment of responsibility between the defendant and the backyard tenants and the proportionality thereof for consumption of water supplied to the property is fair and reasonable, and it makes sense. Consequently, it would be unfair and unjudicial for the court to reject the defendant’s suggested ratio out of hand. Accordingly, I accept it. I now proceed to consider the next item of the plaintiff’s claim, which concerns contractual damages.

Contractual damages (N$207 000)

[22] The plaintiff pleaded that as a result of the defendant’s failure to pay the said utility charges, the plaintiff was unable to rent the property, and the result was that he lost income in the form of rent, which he would have gained from tenants for 12 months.

[23] The plaintiff’s claim faces two intractable obstacles. First, I have found previously that the defendant alone could not be responsible for the water bill. Second – and more important – damages cannot be presumed just because there was breach of contract.⁴ Additionally, what the plaintiff claims are special damages, and they should be established fully by evidence, as Mr Mutorwa seemed to submit. Mere expectation of loss, however probable, is not enough.⁵

[24] In the instant matter, not one iota of satisfactory evidence was placed before the court to establish fully the damages claimed. The damages claimed are based on expectation. It is not enough and cannot form the basis of action for special damages.⁶ It follows irrefragably that what the plaintiff claims is not established; it becomes a mere irrelevance.⁷ The inevitable result is that the claim is, accordingly, rejected. I pass to consider the last item of the plaintiff’s claim.

Declaration that the lease agreement be cancelled

[25] The property has been sold, and so the claim for cancellation of the lease agreement has been overtaken by events, as aforesaid.

Collection commission

[26] In the particulars of claim, the plaintiff claims collection commission in respect of ‘each instalment made by the Defendant or surety in reduction of debt’. No evidence was led to establish the claim, and, therefore, it is rejected.

Conclusion and costs

[27] Based on these reasons, the plaintiff succeeds in some of his claims and is entitled to judgment in respect of those claims. As to costs, since the plaintiff has succeeded in his claim to the extent of about 50.5 per cent of the total claim sounding in money, he is not entitled to all his costs. Furthermore, I disincline to order costs on the scale as between attorney and own client, as prayed for by the plaintiff. That scale of costs appears only in the Acknowledgement of debt. An acknowledgement of debt is a unilateral act. In that regard, it should be remembered, a most basic principle of our law of contract is that a contract is concluded by and between two parties. Consequently, such scale of costs will be considered if agreed by the parties.

[28] In the result, I order in the following terms:

1. Judgment for the plaintiff in the amount of N$107 709.40, plus interest on the said amount at the rate of 20 per cent per annum, calculated from 19 July 2022 (the date of issuance of summons) to date of full and final payment.

2. The defendant must pay 50 per cent only of the plaintiff’s costs on the scale as between party and party.

3. The matter is finalised and removed from the roll.

_______________

C Parker

Acting Judge

APPEARANCES:

PLAINTIFF: L Shikale-Ambondo

Of Shikale & Associates, Windhoek

DEFENDANT: N Mutorwa

Of Mutorwa Legal Practitioners, Okahandja