CIV/APN/148/2006

IN THE
HIGH COURT OF LESOTHO

HELD AT
MASERU

In the
matter between:

MAHLOMOLA
JOSEPH MASENKANE APPLICANT

AND

SUNNY
HOLDINGS (PTY) LTD RESPONDENT

JUDGEMENT

Delivered
by the Honourable Mr. Justice T.E. Monapathi On the 19th day of
September, 2007

This is a
matter in which Applicant brought an application before this court
for an order as follows:

That the
sub-lease agreement between him and Respondent be declared to be
fully discharged for lapse of the period of five (5) years;

2

That the
said sub-lease agreement be declared null and void (in respect of the
15 years allegedly remaining) due to misrepresentation
(or mutual
mistake) and non-registration thereof.

It is the
Applicant's case that the said sub-lease was for the period of 5
years and not for 20 years as appears in the written
agreement; that
a year after the said agreement was effective, he noticed that the
Respondent had acted in bad faith and had lulled
him to sign it
without being made aware that clause 2 had "been changed to read
... twenty (20) years instead of five (5)
years as originally
agreed." Thus, there was, according to him, a mutual mistake on
the part of both parties which vitiated
the contract in respect of
the further fifteen (15) years. He further says that the said
agreement as it had never been registered,
it being for a period of
more than

3

three (3)
years, was inconsistent with the Deeds Registry-Act 1967, and
therefore null and void.

Respondent,
on the other hand, says the agreement was for twenty (20) years and
not five (5) years. While he admits that the agreement
had not been
registered he however denies the legal consequences which Applicant
seeks to read from the non- registration thereof
(that it is null and
void). According to Respondent the agreement is valid and enforceable
non-registration notwithstanding since,
according to him,
non-registration does not affect the contractual obligation of the
parties, but only as regards third parties.

This
court is called upon to make a determination whether there existed a
sub-lease agreement for twenty (20) years between the
parties and
what, in the event that

4

there was
such an agreement, is the effect of failure to register it.

When
there is agreement but the parties are under same fundamental
misapprehension it is said that they have agreed on the basis
of a
common mistake and there is no contract Dickson motors (Pty) Ltd v
Oberholzer 1952 (1) SA 442 (AD). Besides, where one party

misrepresents the facts and seeks, on the basis of them as so
misrepresented, that the other party contracts with him the party

induced to contract may seek assistance of the court to declare such
contract void.

The
Applicant has not in his papers provided enough facts on the basis of
which this court may infer mistake or misrepresentation.
However, I
do not find it necessary to make a finding in this respect; there is
enough material to

5

conclude
that the agreement was in fact for twenty (20) years and not for five
(5) years as Applicant argues.

Clause 3
of the said sub-lease states that rental shall be M5000.00 per month;
that it shall escalate at the rate of 3% p.a from
the 6th year to the
10th year and at the rate of 10% p.a from the 11th year on; that this
does not preclude meeting every 5 years
to review problems and
prospects.

It is
important to note that Applicant does not complain about the
irregularity of including this clause in the sub-lease.

Secondly,
the clause does not say "when the sub-lease is renewed, ... rent
shall escalate at 30% p.a from the 6th year"
etc. It states
unequivocally, and

6

without
imposing any pre-condition, that it shall escalate at 3% p.a from the
6th year, and 10% p.a from the 11th year. The terms
of clause 3
indicate nothing but that parties had agreed in positive terms to a
period of more than five (5) years. Clause 2 tells
us how long this
period was - twenty years;

Thirdly,
the five (5) year intervals were merely for the meeting of parties to
review problems and prospects.

In my
opinion, and on the grounds here above mentioned I found that the
contract between the parties was for twenty (20) years as
clause two
(2) indicates.

It is
common cause that the contract was never registered. In terms of
Deeds Registry Act 1967 agreements of sub-lease for a period
of not
less than 3

7

years
"shall be registered" section 24 (1). Section 24 (5) states
in no uncertain terms and without any equivocation what
shall be the
legal remifications of non­registration. Non-registration of a
sub-lease agreement within 3 months shall render
the agreement of
sub-lease null & void and of no force or effect. This is so
whether it is in relation to parties to that agreement
or third
parties. I therefore reject respondent's argument that the agreement
is never the less valid and enforceable. Once the
sub-lease agreement
is unregistered and it relates to more than three years, it is null
and void and of no force or effect.

I
therefore find that the contract between Applicant and Respondent is
null and void and of no force or effect in law.

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Application
is granted with costs as prayed.

T
Monapathi

Judge