Trustees for the time being of the Burmilla Trust v Van Zyl and Others (32980/19) [2020] ZAGPPHC 802; [2021] 1 All SA 578 (GP) (4 November 2020)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NO: 32980/19

REPORTABLE: YES

OF INTEREST TO OTHER JUDGES: NO

04/11/2020

In the matter between:

TRUSTEES FOR THE TIME BEING OF

THE BURMILLA TRUST

First Plaintiff

JOSIAS VAN ZYL

Second Plaintiff

and

PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA First Defendant

GOVERNMENT OF THE REPUBLIC OF

SOUTH AFRICA

Second Defendant

JUDGMENT

Tuchten J:

1 Because of the current pandemic, I heard argument in this case through video-conferencing technologies. Counsel appeared at a virtual hearing. This judgment will be signed by me and distributed electronically to the parties. In due course I shall lodge the judgment with the registrar of the High Court. I granted counsel permission tosubmit supplementary written argument, which has now been provided.

2 This is an exception to the plaintiff’s amended particulars of claim. The amended particulars are lengthy. They comprise, with annexures, some 1 400 pages. This is largely because the case before me has a history, with several previous cases all brought by the second plaintiff, Mr van Zyl and vehicles controlled by him, and the plaintiffs have chosen to incorporate much of this history in their particulars of claim. Among these previous cases are several to which I shall refer in this judgment and which culminated in written and reported judgments. Two of these cases were decided in Lesotho, one in the Lesotho High Court and the other in the Lesotho Appeal Court,

on appeal from the High Court decision. Two of such cases were decided in South Africa, in the Transvaal Provincial Division and in the Supreme Court of Appeal, on appeal from the TPD, respectively. Other than in relation to obiter observations, the SCA decision is absolutely binding upon me and the decision in the TPD is binding upon me unless I conclude that it was clearly wrong. Then there was a decision, by majority, in a case before the Permanent Court of Arbitration (PCA), sitting in Singapore and two further cases in Singapore originating from a review of the arbitral decision; first a decision of the Singapore High Court and then a decision of the Singapore Appeal Court, on appeal from the High Court decision.

3 The plaintiffs’ claim, in brief summary, is for constitutional damages, which are said to arise from the drastic curtailment of jurisdiction and capacity (“shuttering”) of an international tribunal, before which the plaintiffs and others had a case pending against the Kingdom of Lesotho. The plaintiffs’ bring three claims in their amended particulars of claim. The first is for loss of profits of R641 109 723 alternatively R176 934 213, a claim said to have been ceded to the first plaintiff (Burmilla). The second is for R80 million said to have been suffered personally by the second plaintiff as “moral damages” for humiliation,

indignity and the like caused by harassment and intimidation. The third is for the wasted costs incurred in cases before the international tribunal in question, the PCB and the Singapore courts, all of which were from the plaintiffs’ perspective ultimately unsuccessful, in an effort to prevent or reverse the shuttering or to have their claims against Lesotho heard in another forum. All three claims are said to have been escalated by interest This case concerns the conduct of two governments, of Lesotho and South Africa. Where I refer to a government without a qualifier, I mean the South African government.

4 In their supplementary argument, counsel for the plaintiff described the plaintiff’s case in this way:[1]

The starting point of the plaintiff’s case is the proposition flowing from the Zimbabwe Farmers judgment of the Constitutional Court[2] that the South African State (represented by the defendants in the present action) acted unconstitutionally in participating in the shuttering (the suspension and dismantling) of the SADC Tribunal while the claims brought by the plaintiffs in their own right were pending before the SADC Tribunal, and thus violated the plaintiffs’ fundamental rights under section 34 of the Constitution.[3] The plaintiffs allege that, but for this unconstitutional conduct of the South African State, the plaintiffs would have won their claims before the SADC Tribunal and would have been awarded the amounts that they claimed from the SADC Tribunal; and would not have had to incur the legal expenses they incurred in their subsequent litigation before the SADC Tribunal, the Williams Tribunal, the Singapore Courts and the Mauritius Tribunal in their unsuccessful attempts to compel Lesotho to submit to the litigation of the plaintiffs’ claims before an appropriate independent tribunal.

5 Because this is an exception, I must take at face value all the plaintiffs’ pleaded allegations, except where they are palpably untrue or so improbable that they cannot be accepted. Where the exception is brought on the ground that the pleading in question does not disclose a cause of action, the excipient must establish that on every reasonable interpretation of the pleading, no cause of action is disclosed.

6 In what follows, I shall set out the background to the plaintiffs’ claim, but only to the extent that it is relevant for present purposes.

7 Mr van Zyl is a South African citizen. He controls several Lesotho companies, ie Swissborough Diamond Mines (Pty) Limited, (Swissborough), Matsoku Diamonds (Pty) Limited, (Matsoko), Motete Diamonds (Pty) Limited (Motete), Orange Diamonds (Pty) Limited (Orange), Patiseng Diamonds (Pty) Limited (Patiseng) and Rampai Diamonds (Pty) Limited (Rampai). The plaintiffs have called Matsoku, Motete, Orange, Patiseng and Rampai collectively the “Tributing Companies” and for convenience I shall where necessary do the same.

8 In 1996, a corporation called the Lesotho Highlands Development Authority (LHDA) was created by Lesotho statute to give effect to a very large project called the Lesotho Highlands Water Project (the water project). The main purpose of the water project was to supply water to South Africa from a dam to be built in Lesotho. The governments of Lesotho and South Africa concluded a treaty in this regard (the water project treaty) on 24 October 1986. In 1988, the LHDA began construction of the dam in the Rampai area in Lesotho.

9 A month after LHDA had commenced construction, Swissborough concluded mining leases with the Lesotho government which purported to give Swissborough mining rights in several areas in Lesotho including Rampai (the Rampai lease). The Rampai lease was registered in the Lesotho Deeds Registry’s register of mining leases on 26 October 1988. Lesotho was only prepared to conclude such mining leases with corporate vehicles registered in Lesotho. Mr van Zyl acquiesced in this requirement.

10 The purpose of the construction in Rampai was to build the Katse dam. It was anticipated that the dam would collect water and feed it to South Africa as part of the water project. For this purpose, a portion of the Rampai lease area would be flooded and mining there would become impossible. Swissborough then claimed that it was entitled to a large sum of money as compensation for loss of profit which it would have made, had Swissborough not been prevented from recovering considerable quantities of diamonds which, according to Swissborough, lie beyond its reach beneath the waters of the Katse dam.

11 On 16 September 1994 Swissborough ceded certain of its rights arising from the Rampai lease to Burmilla. Two years later, Swissborough ceded further rights which it claimed to have against the Government of Lesotho to Burmilla. It is on the strength of these two cessions that Burmilla claims damages against the Government in the present action.

12 Several rounds of litigation then ensued, all driven by Mr van Zyl. Ultimately, by counter-application in the Lesotho High Court case which I mentioned above,[4] LHDA sought orders against Swissborough and Rampai that the Rampai mining lease was void from inception. The LHDA contended, firstly, that the conclusion of the lease had not been preceded by a recommendation of an organ of the Lesotho state called the Lesotho Mining Board, made after prior consultation with and approval of the principal chiefs within whose area of jurisdiction the Rampai area fell. Secondly, it was contended, these requirements were peremptorily enjoined in s 6 of the Lesotho Mining Rights Act.[5]

13 The Lesotho High Court upheld both these contentions and found, in a judgment delivered on 28 April 1999 after a trial during which evidence was heard and argument presented for some fifty days, that neither of these requirements had been complied with before the Rampai lease was concluded. The Rampai lease was, thus the Lesotho High Court, void from inception.

14 Under Lesotho law, land belongs to the nation. The principal chiefs are the customary custodians of land within their areas of jurisdiction. That, according to the Lesotho courts, explained the purpose of the two peremptory requirements.

15 Swissborough and Mr van Zyl took the High Court’s decision on appeal to the Lesotho Court of Appeal. On 6 October 2000, the Lesotho Appeal Court affirmed the High Court’s finding that the Rampai lease was void from inception and dismissed the appeal.[6]

16 By letter dated 25 October 2000 Mr van Zyl, his wife and their vehicles mentioned in this paragraph initiated a correspondence by which they requested the Government of South Africa to provide them with diplomatic protection. Mr van Zyl’s complaint was that the mining leases had been expropriated without compensation. Correspondence ensued. Dissatisfied with the outcome produced by the correspondence, Mr van Zyl in his personal capacity and with his wife Gail van Zyl as trustees of Burmilla and of the Josias van Zyl Family Trust, Swissborough and the Tributing Companies applied to the TPD to review the decisions of the SA Government taken through various organs by which the SA Government declined to afford the then applicants diplomatic protection or effective diplomatic protection.

17 The case in the TPD was decided against Mr van Zyl and his several vehicles in a judgment handed down on 20 July 2005 and reported as Van Zyl and Others v Government of RSA and Others.[7] The High court held, following Kaunda and Others v President of the RSA and Others,[8] that any right which the applicants in that case might have to diplomatic protection vested, if at all, in them through their South African citizenship. It followed that a decision whether diplomatic protection should be given and, if so, how is essentially a function the executive. On that basis, the High Court could not fault the conduct of the Government.

18 The basis upon which the applicants before the High Court claimed that the Government should intervene on their behalf was that Lesotho had, by expropriating their property without compensation, committed an international delict. But the High Court held that the mining leases had no international character and that there had been no expropriation. The grounds on the strength of which the applicants submitted that the Government, and the High Court, should reject the conclusions in the Lesotho courts were baseless. The Rampai lease did not come into existence because it was contrary to the “very essence of the Lesotho property law which is the lex situs governing the acquisition by Swissborough to prospect ... and mine ...”.[9] Lesotho was not liable for damages under international law because the applicants were not subjects of international law.[10] While Mr and Mrs van Zyl were in principle entitled to diplomatic protection because they were South African citizens, the same could not be said for Swissborough and the Tributing Companies.[11]

19 The SCA delivered its judgment on appeal from the TPD on 20 September 2007. Its judgment is reported as Van Zyl and Others v Government of Republic of South Africa and Others.[12] The SCA held that the appellants in that case who were citizens (“nationals”) of the Republic of South Africa had a right to request the Government to consider providing them with diplomatic protection.[13] The Tributing Companies, all of them Lesotho companies, had no right to ask for diplomatic protection because that right derives from s 3 of the Constitution as an aspect of citizenship and nothing else.[14]

20 The SCA considered the claim by the then appellants that the Lesotho Government had violated their rights by conduct which they said constituted an expropriation of their mining rights that did not comply with minimum international standards. The then appellants asserted that the Lesotho Government was accordingly obliged to pay them some R3 089 million damages.[15] It considered the question whether the Government was entitled in terms of international law to grant the then appellants diplomatic protection.[16]

21 The SCA found that the Rampai lease, as well as the other four mineral leases, had been concluded in Lesotho by the Government of Lesotho under the Lesotho mining laws in respect of Lesotho diamond rights. Their validity had to be determined under Lesotho law by Lesotho courts.[17]

22 Contrary to the argument of the then appellants, this was not a case of expropriation or confiscation of existing rights. The issue was whether rights had come into existence according to local law which in the present case required compliance with prescribed formalities.[18]

23 The SCA proceeded to consider whether the mineral leases had been internationalised. That was, and is, central to the then appellants’ and to the present plaintiffs’ case because only if the leases were internationalised, could the Lesotho Government have breached international law by violating their terms. The SCA held that the leases had not been internationalised[19] and that no international delict had been committed.[20]

24 The SCA found that the then appellants had not established that they had any rights against the Lesotho Government. Accordingly, no international wrong could have been committed against them. The SCA further rejected the contention that the Lesotho Court of Appeal had been manipulated and that the proceedings in that court had been unfair.

25 This is by way of background. My summary is, intentionally so, incomplete. I have set out the matters which give necessary context to a component of the plaintiffs’ cause of action: that the Government violated the plaintiffs’ rights through the conduct of the Government in relation to the Southern African Development Community Tribunal (the SADC Tribunal). In brief, the Government was

a party to a series of decisions of the Southern African Development Community (SADC) which sought to alter and restrict the jurisdiction

and reach of the SADC Tribunal, a body which the SADC had created. The intention behind these decisions was to render the SADC Tribunal unable to hear and pronounce upon a pending case before the SADC Tribunal brought by the plaintiffs and the Tributing Companies against Lesotho as well as three other cases then pending before the SADC Tribunal.

26 On 17 August 1992, the treaty of the Southern African Development Community (the SADC Treaty) was signed. The SADC Treaty entered into force on 30 September 1993. Lesotho was one of its original signatories and South Africa acceded to the SADC Treaty on 29 August 1994. Art 16 of the SADC Treaty provides for the constitution of the SADC Tribunal to, amongst other things, adjudicate upon such disputes

as might be referred to it.

27 On 14 August 2001, a protocol on the SADC Tribunal was incorporated into the SADC Treaty by amendment. This protocol provided, amongst other things, that the SADC Tribunal would have jurisdiction over disputes between natural or legal persons and states. In determining such disputes, the SADC Tribunal would apply the SADC Treaty, all protocols that formed part of the Treaty and all

applicable subsidiary instruments and develop its own “Community”[21] jurisprudence having regard to applicable treaties, general principles and rules of public international law and any rules and principles of the law of States.

28 The SADC and its member states were all required to act in accordance with the principles of human rights, democracy and the rule of law. Member states undertook to adopt adequate measures to promote the achievement of the objectives of the SADC and to refrain from taking any measure likely to jeopardise the sustenance of its principles, the achievement of its objectives and the implementation of the provisions of the SADC Treaty.

29 By notice of application instituting proceedings dated 15 June 2009, the plaintiffs, Swissborough, the Josias van Zyl Family Trust, Burmilla and the Tributing Companies instituted proceedings in the SADC Tribunal for relief against the Kingdom of Lesotho.

30 The thrust of the case for the applicants before the SADC Tribunal was that the mining leases in favour of Swissborough and the Tributing Companies were validly granted by Lesotho, which had subsequently unlawfully taken and expropriated them while failing to make full reparation to those applicants. The reliance by Lesotho on the decisions of its own courts in its favour was, thus the applicants, ineffectual because the judicial process constituted a denial of justice in violation of the obligations of Lesotho under international law and a failure by Lesotho to administer justice to the applicants in a fundamentally fair manner. Lesotho was precluded from relying on its internal law as justification to make full reparation “caused by the internationally wrongful conduct comprising the denial of justice.” In addition, both Swissborough and Mr van Zyl each claimed R80 million for “moral damages”.[22]

31 In amplification of the plaintiffs’ claim that they had been denied justice in the Lesotho courts, the plaintiffs pleaded that Lesotho had taken a number of actions.[23] The plaintiffs then proceeded to plead that the Lesotho courts displayed misconduct by sanctioning Lesotho’s misconduct and disregarding the material evidence and the applicable law.[24]

32 The effect of these allegations is that the plaintiffs assert in the present case that they raised their complaints of denial of justice and misconduct by Lesotho before the Lesotho courts but that these courts had ruled against them.

33 On 17 August 2010, while the applicants’ claim was pending before the SADC Tribunal, the SADC Summit, consisting of the heads of state or government of the member states of the SADC took steps which were designed to render the SADC Tribunal unable to hear the claims of the applicants and three other groups of applicants who all had cases pending before the SADC Tribunal. This decision was not endorsed by the signatures of the prescribed minimum number of states. Those states which did sign, however, included South Africa and Lesotho. The plaintiffs describe this conduct, together with the failure of the SADC to ensure by appointment or reappointment that a minimum number of judges were empowered to hear cases before the SADC Tribunal, as the shuttering of the SADC Tribunal.

34 As I shall show, the attempt to curtail the jurisdiction of the SADC Tribunal was ineffectual, not least because of the judgment of the Constitutional Court with which I shall deal below. But the SADC Tribunal was made dysfunctional because of the failure to appoint the necessary number of judges. I shall continue to describe the conduct of the SADC Summit as the shuttering of the Tribunal. But it must be

born in mind that while I use that metonym, the part of the scheme to render the SADC Tribunal dysfunctional by abridging its jurisdiction

did not in the legal sense achieve its purpose.

35 On 17 and 18 August 2015, the SADC Summit approved a proposal that each member state might decide on an alternative forum for the resolution of a case pending before the SADC Tribunal. Lesotho did not establish any such alternative forum.

36 Despite this, the plaintiffs brought their claim as articulated in the proceedings before the SADC Tribunal before the Permanent Court of Arbitration. Lesotho pleaded, together with other defences, that the PCA had no jurisdiction to hear the plaintiffs’ case. The plaintiffs persuaded a majority in that forum that the PCA did indeed have jurisdiction but Lesotho took the PCA’s decision on review to the Singapore courts. The plaintiffs lost in the Singapore High Court and, on appeal, in the Singapore Court of Appeal, which found in a judgment delivered on 27 November 2018 that the PCA had no jurisdiction to entertain the plaintiffs’ claim.

37 On 11 December 2018, judgment was handed down in the Constitutional Court case of Law Society of South Africa and Others v President of the Republic of South Africa and Others.[25] The plaintiffs were not parties in this case and the applicants in that case did not seek monetary compensation. The applicants there were the Law Society and certain owners of land in Zimbabwe (the Zimbabwe land owners) who had been dispossessed of their land under Zimbabwe’s “ambitious land and agrarian reform programme”. Their land was expropriated without compensation and the law of Zimbabwe was amended to remove the pre-existing jurisdiction of the courts of Zimbabwe over disputes relating to expropriation without compensation.

38 The Zimbabwe land owners took their case to the SADC Tribunal which concluded that Zimbabwe had violated certain provisions of the SADC Treaty. The SADC Tribunal made an order unfavourable to Zimbabwe. Zimbabwe should have complied with the decision of the SADC Tribunal but did not. The SADC Summit was then required to reflect on this non-compliance with a binding decision. But instead of facilitating

enforcement, the SADC Summit disregarded their undertaking to support and promote the SADC Tribunal and proceeded to

... eviscerate the possibility of the [member states] ever being held to account for perceived human rights violations, non-adherence to the rule of law or undemocratic practices. The source of that threat, of being obliged to account for the exercise of State or public power, was located in the justiciability of individual disputes against the State.[26]

39 The SADC Summit sought to achieve this purpose by neither reappointing the members of the SADC Tribunal whose terms of office expired in 2010 nor replacing those whose terms would expire in 2011 and by attempting to amend the jurisdiction of the SADC Tribunal by depriving it of jurisdiction over individual disputes.

40 The plaintiffs aver that this action was taken by South Africa and Lesotho with the intention of defeating their claims in the SADC Tribunal. The Constitutional Court saw the matter differently. It held that the conduct I have described

...is, or is traceable to, an offshoot of a masterplan that was devised by the Summit at the instance of the Republic of Zimbabwe. Clearly, Zimbabwe did not want to comply with the unfavourable decisions made against it by the Tribunal. It then crafted a strategy that would be fatal to the possibility of the Tribunal ever embarrassing it again.[27]

41 In that strategy, the Constitutional Court found, Zimbabwe had a willing ally in South Africa.[28] All our constitutional office-bearers were obliged to act in accordance with commitments made in terms of the SADC Treaty. The amending protocol was not a legally acceptable procedure for stripping the SADC Tribunal of the “most important aspect of its jurisdiction”.[29] As a consequence of the actions taken by South Africa and its counterparts, the SADC Tribunal was rendered dysfunctional, as good as dissolved.[30]

42 In conclusion on this aspect of its judgment, the Constitutional Court held:

Our President thus acted unlawfully by following an impermissible or irregular procedure. Worse still, not only did he not have the power to not appoint or renew the terms of Members of the Tribunal but also lacked the authority to suspend its operations. This illegality of his conduct also stems from purporting to exercise powers he does not have. And it cannot be overemphasised that his conduct was also unlawful in that he failed to act in good faith and in pursuit of the object and purpose of the Treaty we have bound ourselves to.

43 Building on the proposition that the President was not empowered to approve anything that undermined our Bill of Rights and international law obligations, the Constitutional Court held that the President thus

... lacked the authority to sign any international agreement that seeks to frustrate the pre-existing right of South Africans to access justice, that was secured for them by our supreme law-making body.[31]

44 And further on the same point:

In signing the Protocol, the President was effectively issuing a very serious threat to all citizens that their right of access to justice through the Tribunal was going to be taken away.

...

... it is constitutionally impermissible, as long as our Constitution and the Treaty remain unchanged, for the President to align herself with and sign a regressive international agreement that seeks to take away the citizens’ right of access to justice at SADC level.[32]

45 The Constitutional Court concluded that the decision to render the SADC Tribunal dysfunctional was unconstitutional, unlawful and irrational. The appropriate remedy was to direct the President to withdraw his signature from the amending Protocol. It is not suggested that this was not done.[33]

46 It is important to note that through the order of the Constitutional Court and its implementation, the scheme to curtail the jurisdiction of the SADC Tribunal was thwarted. But viewed from the perspective of the plaintiffs, this made little difference. The Tribunal remained dysfunctional because there were not sufficient appointed judges to enable the plaintiffs and the other applicants to have their case before the SADC Tribunal adjudicated. So the charge of shuttering the SADC Tribunal is, for present purposes and subject to any good defences raised by the defendants, established.

47 Against that background, I shall proceed to consider the exceptions noted by the defendants. There are fourteen separate exceptions. I shall give a short summary of the essence of each of the exceptions in an appendix. In the unusual circumstances of this case I need not deal with all of them individually. This is because there are certain issues of principle on which I believe certain of the exceptions must be upheld and because the exceptions in some respects overlap.

48 I do not think that the exceptions based on the pronouncements and relief granted by the Constitutional Court in Law Society preclude the plaintiffs from claiming constitutional damages or compensation. The question of such compensation and the situation of the present plaintiffs were not before that court. There is therefore nothing in the judgment or order which bears upon the subject of compensation. The exceptions based on the contention that the judgment and order of the Constitutional Court preclude the plaintiffs from claiming monetary compensation for the shuttering must be dismissed.

49 As is made clear from the exposition of the plaintiffs’ case in their counsels’ supplementary written argument, the plaintiffs must show that they would have won an order for compensation before the SADC Tribunal if their application there had proceeded to final judgment. In my view they would not; I am moreover, subject to a qualification with which I shall deal below, precluded by authority binding on me from finding that they would.

50 To deal first with the claim for loss of profits. This claim vested initially in Swissborough. I do not think that Swissborough and its successor in title can escape the consequences of the judgments in the Lesotho courts as interpreted by the TPD and the SCA. The Lesotho courts found that Swissborough’s claims had to fail because the Rampai lease was void from inception and because the assertion by Swissborough that its claims had been impeded by a corrupt conspiracy on the part of Lesotho was without merit.

51 The TPD and the SCA found that the challenges brought before the South African courts to those findings were baseless. I am bound by those findings; in the case of the TPD, I would not be bound if I considered it to be clearly wrong but in the case of the SCA I am absolutely bound.

52 I do not think that the conclusion of the TPD was wrong; on the contrary, I respectfully agree with both its reasoning and its conclusion. Before a valid lease could come into existence, both Swissborough and Lesotho had to comply with Lesotho law. The prior requirements for validity were not obstacles to the conclusion of mineral leases inserted in the relevant Lesotho legislation with the purpose of making the conduct of mining operations more burdensome or of frustrating the fundamental rights of aspirant miners. On the contrary, the prior requirements gave effect to the fact that the relevant chiefs were the customary custodians of land in Lesotho. It is obviously reasonable that those chiefs should be consulted before the areas in their custody were mined.

53 The issue of whether the Lesotho courts acted improperly in the sense imputed to them by the plaintiffs, or in any sense, was adjudicated in the TPD and confirmed in the SCA. The decision of the South African courts went against the plaintiffs. I agree with their reasoning. Moreover, it is simply not open to the plaintiffs to revisit that very issue. It is therefore not open to me to find that another tribunal might find that the South African courts were wrong.

54 But the plaintiffs raise a further factual issue at this level. This factual material was not considered by the TPD or the SCA and

constitutes the qualification I mentioned in paragraph 49 above. They say that in 1968 and 1971, mining rights over the areas in question were validly granted to an organ of the Lesotho state called the Lesotho National Development Corporation and that once that had happened, the chiefs had no further role to play in subsequent grants of mining rights. These facts, the plaintiffs say, were deliberately concealed from the plaintiffs and Swissborough by Lesotho and were only discovered by the plaintiffs after the judgment in the Lesotho Court of Appeal. The plaintiffs go on to say that

... in an extraordinary denial of justice, the President of the Court of Appeal flatly refused Claimants’ request to reopen the case in consideration of the new evidence.[34]

55 What is lacking in the particulars of claim, though, is any description of the process by which the then claimants sought to have the proceedings reopened. The plaintiffs make their argument at this level in the context of an alleged denial to them of justice. But unless the then claimants sought through appropriate procedural steps to have their case reopened and there was a denial of the right to have that case enrolled and adjudicated, there is no room for an allegation of a failure of justice. For example: if, as in South Africa, a case for reopening had in Lesotho to be made in appropriate legal proceedings, a mere letter to the President of the Court of Appeal might well legitimately have been met with a flat refusal to

reopen the case. Absent an explanation of this nature, the particulars of claim lack allegations necessary to disclose a cause

of action at this level.

56 The plaintiffs would have to allege and ultimately show that by denying the plaintiffs a hearing or otherwise improperly frustrating the plaintiffs from having their case on the new material heard in accordance with Lesotho law, Lesotho committed an international wrong. If the then claimants did not follow the proper procedural path to have their case on the new material heard, then the plaintiffs could not have been the victims of an international wrong. And if the plaintiffs have not properly sought relief on the new material in the courts of Lesotho, then the plaintiffs are in the position of having unutilized domestic remedies available to them. On either basis, their present claim, as formulated, must fail.

57 In order for the plaintiffs to have succeeded before the SADC Tribunal, they would have had to prove that Lesotho committed an international

wrong against Swissborough. In my view, Lesotho committed no wrong at all against Swissborough up to the time the Lesotho Court of Appeal gave judgment. There was no expropriation of Swissborough’s rights. Because there was no valid lease, there was nothing to expropriate.[35] Because the mineral leases were found, after a fair hearing, void from inception, Swissborough had no rights to mine and therefore could not have lawfully made, or lost, any profits. Properly characterised, the case in Lesotho concerned

contracts concluded in Lesotho between a Lesotho company and the government of Lesotho about rights to mine for minerals in Lesotho. If a wrong were committed, which there was not, that wrong had no international character. On that ground alone, the applicants would have failed before the SADC Tribunal. As I have said, what transpired in relation to the new evidence has not been adequately pleaded. If the plaintiffs had in this regard proved the allegations I have recounted, they would have failed to establish a violation of their rights to justice. This conclusion disposes too of the claim for the wasted costs of the proceedings in the SADC Tribunal.

58 Furthermore, at this level, if the plaintiffs had proved in Lesotho that their new point based on the new evidence was good, they would have established that the leases were valid according to the law of Lesotho and would not have suffered any denial of justice arising from the two Lesotho cases which I have discussed, let alone an international delict.

59 This is important because on the plaintiffs’ own showing, the only act of expropriation performed by Lesotho was effected on 25 October 1995 when, on the strength of the Lesotho Conditional Expropriation Act,[36] Lesotho expropriated the Rampai lease conditional upon a validly granted lease. While the judgment of the Lesotho Appeal Court stands, the plaintiffs cannot legitimately assert that Swissborough’s rights were expropriated. If the lease was invalid from inception, as found by that court, then the condition for the expropriation failed. And only if the plaintiffs were denied a fair consideration of a procedurally legitimate claim to reopen the hearing before the Lesotho Appeal Court, can the plaintiffs complain of a denial of justice in that regard.

60 The result is that the unconstitutional conduct of South Africa, committed when our President affixed his signature to the amending protocol and participated in the decisions to deprive the SADC Tribunal of judges to decide the cases before it, caused Swissborough and its successors in title no harm. In fact it saved them from incurring further costs in a proceeding they were bound to lose.

61 Counsel for the plaintiffs were at pains to point out that the considerations in this court are significantly different from those which were considered by Harms ADP in the SCA case. This is because while the issue before the SADC Tribunal was whether the plaintiffs

had a claim in customary international law, the issue here at the level under discussion is whether the plaintiffs were entitled to compensation or damages for a breach of the Constitution.

62 This may well be so; but in order for the plaintiffs to establish a claim in this court for the loss of profits allegedly suffered by Swissborough, the plaintiffs must show that they would have won before the Tribunal. The plaintiffs might have a claim in this court for compensation for the denial of justice before the Tribunal even though they would have lost before the Tribunal. But such a claim would be for non-pecuniary damages, similar to the claims of litigants who endure pain and suffering. Such a compensation claim has however not been quantified and pleaded. I express no opinion on the ultimate prospects of such a claim for non-pecuniary compensation, brought on the basis that the plaintiffs would have lost before the SADC Tribunal, except to say that it would not be based on Swissborough’s alleged loss of profits and would be mitigated by the fact that by preventing the plaintiffs from seeking justice in that forum, South Africa (although actuated by less than proper motives) actually saved the plaintiffs the costs they would fruitlessly have expended in that forum in pursuing their, ex hypothesi, unmeritorious claim for Swissborough’s alleged loss of profits.

63 A second ground of principle which I see as an insuperable obstacle to the plaintiffs’ claim is that Swissborough, and consequently its successors in title in their capacities as such, had no right under the South African Constitution to require South Africa and its president to uphold its terms. As was emphasised in the passages from Law Society to which I referred, that right vests essentially in South African citizens. Non-South Africans also have rights under the Constitution while they are in the Republic and in respect of acts performed by government actors within its borders. South Africa owes no duties to foreign corporate nationals for acts of and in conducting foreign policy performed outside its borders. In formulating and executing its foreign policy, South Africa is under no legal obligation to have regard to or protect the interests of foreign corporate nationals

when they are doing business outside South Africa.

64 To make it clear: the point is not whether Burmilla is entitled to protection under the Constitution. As a trust registered in South Africa, with trustees and beneficiaries who are South African, it is.[37] This is so because these persons are all South African nationals as described in Law Society. But the point is that Swissborough, which is not a South African national, has no such right to protection. And the cession of Swissborough’s claim to Burmilla cannot change the character of the claim ceded to Burmilla. To put it another way: a claim which is only cognisable when the claimant is a member of a certain class and which vests in the first instance in a person who is not a member of the class in question cannot be converted to a valid claim by cession of the claim from a disqualified to a qualified person.

65 If one approaches this aspect of the claim from the perspective of legal causation, the same result is achieved. In Van der Bijl and Another v Featherbrooke Estate Home Owners’ Association (NPC) and Another; In Re: Featherbrooke Estate Home Owners’ Association (NPC) v Van der Bijl,[38] the court reasoned as follows:

[10] It is not much of an oversimplification to observe that the law of delict once proceeded from the following simple distinction: conduct that caused physical, emotional and reputational injury to the person or injury to property was presumed to be wrongful, whereas omissions and actions for pure economic loss were generally dealt with on the basis that there was no recovery recognised for a plaintiff.

[11] The modern law has, however, changed this binary position. Following the decisions in Trust Bank van Afrika Bpk and Ewels, claims predicated upon omissions and for pure economic loss may be actionable if the court finds that the defendant owed a legal duty to the plaintiff. That issue is determined by reference to a resonant formulation: the legal convictions of the community.

[12] The formulation has enjoyed some judicial interpretation. It has been rendered as the general criterion for reasonableness, based on considerations of morality and policy. In Indac it was said that the court is required to exercise a value judgment embracing all relevant facts and involving considerations of policy.

[13] The difficulty is in how to apply these formulations in determining,

as in this case, whether a particular duty is owed by a defendant. Three general answers are often given. First it is said that this a question of judicial discretion. Second, it is said, in the tradition of the common law, that guidance is to be found in the decided cases. Third, that it is precisely because the circumstances are so varied in which an omission or conduct causing pure economic loss must be considered, that the guiding criteria must perforce be somewhat abstract.

[14] These answers are not altogether helpful. Determining what is wrongful should not be a matter of discretion but of reason and reasoning. Decided cases provide important reference points, but, in order to lend coherence to the law, some application of clear criteria would assist. Lastly, invoking policy, morality or the legal convictions of the community may be the domain in which wrongfulness is to be determined, but provides little substantive guidance as to what the right answer is to a disputed question of wrongfulness.

[15] Morality is simply reasoning about what is right and wrong; and policy is the practical means by which we implement values. Referencing morality and policy may tell a judge what exercise he or she is engaged upon, but not what moral content or set of values is informative to assist in deciding the case. The legal convictions of the community may be a judge’s sense of what the majority of people in our society consider right or wrong or perhaps what some theoretical community would believe to be right. However, what the majority consider right and wrong is both hard to discern and is not always a sound guide to what is right and wrong in a constitutional democracy. And what a theoretical community thinks is right and wrong is simply one way of thinking about what morality requires

[16] In my view, it is of assistance, within the parameters indicated by our appeal courts, to formulate a number of more specific considerations relevant to the determination of wrongfulness, where

the case concerns an omission or conduct causing pure economic loss.

[17] First, the law of delict has been principally concerned with

liability for injury to persons and property. Such injury, it is generally considered, does not give rise to the problem of too many plaintiffs or indeterminate liability that is disproportionate to the defendant’s negligent conduct. In cases of omission and pure economic loss, the courts apprehend that these dangers are present and seek regulating principles to differentiate deserving plaintiffs from the plurality of potential plaintiffs who might have suffered foreseeable economic loss. The law thus proceeds from the precautionary premise of excluding liability for omissions and pure economic loss, unless there are good reasons to recognise liability.

[18] Second, injury to persons and property is a loss to society in two ways. It is a diminution of rights we recognize as fundamental in the Constitution. That diminution harms those who hold those rights and it harms aggregate welfare because society as a whole is worse off when persons are injured and property is damaged. Claims based on omissions and pure economic loss are more ambiguous as to their effects. Apart from the problem of too many plaintiffs, referred to above, these claims do not necessarily give rise to the infringement of fundamental rights, nor to aggregate welfare losses to society but may involve a loss to one person being a gain to another. The question is then whether the law has any reason to interfere with the residual principle that the loss should lie where it falls. This in turn requires a consideration of deterrence and the question as to who might most efficiently have prevented the risk of loss.

[19] Third, omissions and claims for pure economic loss should be considered in the light of the requirement of section 39(2) of the Constitution to develop the common law in conformity with the rights and value system to be found in the Constitution. If the common law falls short of what the Constitution requires, then the courts must develop the common law.

[20] Fourth, delictual liability for omissions has standardly proceeded

from the premise that we are free of any duty to avert harm suffered by others, absent some special public or private duty of assistance

that differentiates a defendant from the general norm of permissible indifference. And even such a public duty may not give rise to a cause of action in delict because other forms of accountability may be found to suffice. The norm of indifference, however, may not have the presumptive pull that is sometimes assumed because the fundamental rights in the Bill of Rights may be of horizontal

application, and thus give rise to duties that no longer permit of indifference.

66 The question in this case is whether the law should recognise liability under the South African Constitution to pay monetary compensation to a non-South African national for acts committed by South Africa in breach of our Constitution and in violation of international law, outside our borders, which cause economic loss which is suffered outside our borders. The effect of Law Society is that South Africa must account for such foreign policy actions to South African nationals. A finding in the plaintiffs’ favour would mean that South Africa would be required to account for those actions to non-South Africans. Foreign policy must on occasion require South Africa to act to the detriment of foreign nationals in their interests and activities outside South Africa. Payment of such monetary compensation to a non-national diminishes the store of wealth in this country available for South Africa’s fulfilment of its constitutional obligations to its own citizens.

67 In my view, morality, the convictions of the South African community and policy do not require that South Africa should be held liable to compensate a non-national where the South Africa Government breached international law in circumstances such as the present. The plaintiffs’ particulars of claim therefore do not establish legal causation, on the plaintiffs’ claim for monetary compensation.

68 Mr van Zyl claims no less than R80 million for moral damages for violation of his fundamental rights. One cannot tell from the particulars of claim whether the violation is said to have arisen from the conduct of Lesotho or of South Africa. There are no allegations in the particulars of claim to show what fundamental rights the second plaintiff alleges were violated, by whom they were violated or when and where they were violated. There is no basis laid in the particulars of claim for any claim that in violating Mr van Zyl’s fundamental rights, Lesotho acted in breach of international law.

69 Moral damages are damages not occasioning economic loss, but which cover suffering and afflictions caused to the victim, the emotional distress of family members and non-material changes in the living conditions of the victim and his family.[39] The claim for damages for breach of moral rights is simply too terse to pass muster. Neither of the plaintiffs’ counsel who presented oral argument before me said anything in support of this claim.

70 In the supplementary argument, for the first time, the plaintiffs claim that Mr van Zyl

... as the lawful rights holder sued as second applicant at SADC for the moral damages he had suffered in his own right as a result of the impugned conduct of the Lesotho State. These moral damages were based on conduct directed against the second plaintiff personally, including threats to his life by armed forces of the Lesotho Government, the unlawful eviction of himself and his family from their home and the publishing of defamatory statements in the media as a result of the conduct of the Lesotho Government acting with the knowledge and approval of the South African government.

71 This was not pleaded. The plaintiffs seek to make this case by reference to portions of an affidavit which apparently formed part of the record before the SADC Tribunal; a record which, I am told, comprised 12 000 pages, and was referred to as such in, but was not even attached to, the particulars of claim. The passages now relied upon were not identified in the particulars of claim. This is

impermissible. See Swissborough Diamond Mines (Pty) Ltd and Others v Government of the Republic of South Africa.[40]

72 The exceptions to the claim for moral damages must be upheld.

73 The claim for the costs of the proceedings before the PCB and the Singapore courts (the arbitration costs) can also be swiftly disposed of. Quite simply, the plaintiffs brought proceedings before a forum, the PCB, which had no jurisdiction to entertain the plaintiffs’

claims. The arbitration costs were incurred because the plaintiffs made a wrong legal decision, not because South Africa had somehow

caused them to institute and prosecute those proceedings. Furthermore, South Africa was for much the same reasons I gave in relation to the second ground of principle which I identified, under no duty to guard against the incurring of expense by foreign corporate plaintiffs which choose to bring proceedings against foreign governments based on a bad cause of action.

74 During oral argument, counsel for the plaintiffs submitted that the arbitration costs were costs incurred by the plaintiffs in a reasonable attempt to mitigate the damages caused to them by the shuttering of the SADC Tribunal. On that basis, the arbitration costs were not a stand alone claim but depended on the success of the claim in this court for Swissborough’s loss of profits. I have found that on the particulars of claim as they stand, the claim in this court for Swissborough’s loss of profits must fail. The exceptions to the claim for the arbitration costs must therefore be upheld.

75 The effect of my conclusions is that exceptions 2,3, 6, 8, 10 and 11 are good and must be upheld.

76 The defendants take exception no. 14 on the basis that the plaintiffs’ claims constitute debts claimed from organs of state. Consequently, they contend, the plaintiffs are hit by s 3(1) of the Institution of Legal Proceedings Against Certain Organs of State Act[41] and the plaintiffs were required to plead that there had been compliance with s 3(1) before the institution of action but did not do so. This section reads:

(1) No legal proceedings for the recovery of a debt may be instituted against an organ of state unless-

(a) the creditor has given the organ of state in question notice in writing of his or her or its intention to institute the legal proceedings in question; or

(b) the organ of state in question has consented in writing to the institution of that legal proceedings-

(i) without such notice; or

(ii) upon receipt of a notice which does not comply with all the requirements set out in subsection (2).

77 A court, however, is empowered to condone a creditor’s failure to serve such a notice. To obtain condonation, the creditor may apply to a court having jurisdiction for condonation of such failure. The court may grant the condonation application if it is satisfied that the debt has not been extinguished by prescription; good cause exists for the failure by the creditor; and the organ of state was not unreasonably prejudiced by the failure.[42]

78 An argument similar to the present was raised in Minister of Safety and Security v De Witt.[43] In that case the court found that condonation for complete non-compliance with the notice provision may competently be granted

after the institution of proceedings. I agree with counsel for the plaintiffs that the consequence of this conclusion is that despite the apparently clear language of s 3(1), it is not a component of a plaintiff’s claim for recovery of a debt against an organ of state that notice must be given before the institution of proceedings. A failure to give proper notice can of course be raised as a defence and must therefore be pleaded by the defendant who chooses not to consent to the institution of proceedings under s 3(1)(b). Exception no. 14 must therefore fail.

79 Finally, three exceptions were brought on the ground that the pleading was rendered vague and embarrassing. The first of these is based on the argument that the particulars of claim did not adequately set out why, after the shuttering (and the partial unshuttering resulting from the order of the Constitutional Court), it was not possible to restore the status quo ante the shuttering. In my view, the denseness of the factual matrix around the events relevant to this issue makes it inappropriate for these matters to be decided on exception, which should therefore be resolved at the trial. Exception no. 7 must therefore fail.

80 The second of this class of exceptions is based on the supposed vagueness as to whether the plaintiffs had local remedies available to them. By local remedies in this context is meant actions in the courts of Lesotho. I have dealt with this issue above and have come to the conclusion that the plaintiffs’ allegations in this regard do not disclose a cause of action for the reasons which I gave. I do not reach and shall therefore make no order on this exception, no. 12.

81 The third exception for vagueness and embarrassment is based on the argument that the pleading does not adequately set out why the plaintiffs allege that the defences advanced by Lesotho in the SADC Tribunal were without merit. The defendants might be entitled to more information in this regard by way of a request for further particulars but I do not think that the plaintiffs need to go further than they have in their particulars of claim. Exception no. 13 must therefore fail.

82 Exception no. 5 refers to an alleged liability on the part of South Africa to repay Lesotho any amount that Lesotho is obliged to pay the plaintiffs for the Rampai area. I do not understand this allegation to be material to any of the salient allegations going to the root of the plaintiffs’ claim in this action. In any event, I consider this allegation to have been adequately pleaded. Again, further information might be justified pursuant to a request for further particulars. Exception 5 must therefore fail.

83 Counsel for the plaintiffs submit that on the Biowatch principle, the plaintiffs should not be mulcted in costs even though they have been substantially unsuccessful. The plaintiffs are private parties who have unsuccessfully sought to vindicate constitutional rights. As the Biowatch principle has developed, the general point of departure is that such private parties should not be mulcted in costs orders in favour of the state. That point of departure does not inevitably entitle an unsuccessful private litigant to Biowatch protection. The incidence of costs is always in the discretion of the court of first instance. Mischievous, frivolous or constitutionally inappropriate conduct must also be weighed by a court in the exercise of its costs discretion.

84 In this case, the plaintiffs have sued for alleged loss of profits of over R600 million, escalating at 15% per annum from 1992, said to have been suffered by Swissborough because of the failure of a commercial venture outside our borders. This, to my mind, demonstrates that the true character of the case is commercial rather than constitutional. The claim of Mr van Zyl for moral damages is extravagant. I cannot think of an award for non-pecuniary damages in our courts anywhere approaching this figure. The claim for moral damages has not been adequately pleaded.

85 For these reasons, costs will follow the result. The defendants were substantially successful and will get their costs, including the costs of two counsel. The plaintiffs must be given an opportunity to apply to amend, if they so wish.

86 I make the following order:

1 Exceptions 2, 3, 4, 6, 8, 9, 10 and 11 are upheld.

2 Exceptions 1, 5, 7, 13 and 14 are dismissed.

3 No order is made on exception 12.

4 The plaintiffs must pay the defendants’ costs in relation to the exception, including the costs consequent upon the employment of two counsel.

5 The plaintiffs may seek to amend their particulars of claim by notice delivered within 30 days of the date upon which this judgment is published to the parties.

NB Tuchten

Judge of the High Court

4 November 2020

BurmillaVanZylPres32980.19

For the excipients:

Adv NH Maenetje SC, Adv A Coutsoudis and Adv L Zikalala Instructed by

State Attorney, Pretoria

For the respondents:

Adv M Chaskalson SC, Adv T Ngcukaitobi SC and Adv B Winks Instructed by

Couzyn Hertzog & Horak Pretoria

APPENDIX: DEFENDANTS’ EXCEPTIONS

Ground 1: Appropriate relief has already been granted by the Constitutional Court.

Ground 2: The relief claimed is not appropriate given the nature of the determinations required.

Ground 3: The plaintiffs have not established a causal link between the alleged loss and the breach of the Constitution.

Ground 4: The plaintiffs have failed to exhaust internal remedies.

Ground 5: South Africa would not be liable to Lesotho if the SADC Tribunal ordered Lesotho to compensate the plaintiffs.

Ground 6: The pleaded facts do not make it appropriate to allow a constitutional damages claim against the defendants.

Ground 7: Why is it not possible to restore the status quo ante?

Ground 8: No pleaded violation of the rights to access to court or property.

Ground 9: There is no basis to bring such a claim without pleading the absence of or inability to claim a remedy at common law.

Ground 10: There is no causal link between the defendants’ conduct and the legal costs incurred for litigation against Lesotho after the shuttering of the SADC Tribunal.

Ground 11: The plaintiffs had no clear legal right to the property in question and therefore no basis, on the pleaded case, to suggest they would be successful in the Tribunal against Lesotho.

Ground 12: Vagueness in respect of whether the plaintiffs had local remedies available to them.

Ground 13: Vagueness concerning Lesotho’s defences to the SADC claim.

Ground 14: The plaintiffs’ failure to plead compliance with a necessary jurisdictional requirement for their damages claim against the defendants, ie as provided for in s 3(1) of the Institution of Legal Proceedings Against Certain Organs of State Act, 40 of 2002.

---ooo000ooo---

[1] I have omitted counsels’ paragraph numbers. The footnotes to this passage are my own

[2] Law Society of South Africa and Others v President of the Republic of South Africa and Others 2019 3 SA 30 CC

[3] Access to courts Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.

[3] Access to courts

Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.

[4] Swissborough Diamond Mines and Another v Commissioner of Mines and Geology NO and others case CIV/APN/394/91

[5] 43 of1967

[6] Swissborough Diamond Mines (Pty) Ltd and Anor v LHDA 1999-2000 LLR-LB 432 CA. The costs order against the appellants was made more severe but nothing turns on this

[7] 2005 (11) BCLR 1106 T

[8] 2005 4 SA 235 CC

[9] Para 86

[10] Para 89

[11] Paras 61 and 81

[12] 2008 3 SA 294 SCA\

[13] Para 6

[14] Para 61

[15] Para 37

[16] Para 62

[17] Para 66

[18] Para 6

[19] Paras 70-74

[20] Para 81

[21] Meaning the organisation for economic integration established by art 2 of the SADC Treaty [22] The applicants before the SADC Tribunal also claimed damages for Lesotho's refusal to register certain further mineral leases but this claim is not covered by the plaintiffs' particulars of claim in the present case.

[21] Meaning the organisation for economic integration established by art 2 of the SADC Treaty

[22] The applicants before the SADC Tribunal also claimed damages for Lesotho's refusal to register certain further mineral leases but this claim is not covered by the plaintiffs' particulars of claim in the present case.

[23] Paras 30.9.1-39.1.10 of the notice of application

[24] Para 30.9.11 ibid

[25] 2019 3 SA 30 CC; referred to in the passage from the supplementary argument of plaintiffs' counsel which I have quoted above as the Zimbabwe Farmers case.

[26] Para 14

[27] Para 44. The plaintiffs however plead that the purpose of the shuttering was to defeat the plaintiffs' claims and I accept for present purposes that this is correct.

[28] Para 45

[29] Para 49

[30] Para 52

[31] Para 77. My emphasis.

[32] Paras 80 and 82; again my emphasis

[33] In their supplementary argument, counsel for the defendants say this: “Our colleagues for the plaintiffs invited us, as

representatives of the South African government, to place the current position in relation to the 2014 Protocol before the Court. In this regard, we have been advised by the Office of the Chief State Law Advisor: International Law, that in terms of the last general treaty update received from SADC as of August 2020, the 2014 Protocol was not in force, and no state had ratified it.”

[34] These allegations are shortly dealt with in the particulars of claim themselves but appear in more detail in paras 26-32 of an opinion from counsel put up as an annexure to the particulars of claim.

[35] I have not overlooked the argument of the plaintiffs that in international law, the decision of a court depriving an owner of the use and benefit of his property may amount to an expropriation. I was referred to Oil Field of Texas Inc. v The Government of the Islamic Republic of Iran Iran-US Claims Tribunal, Award in Case No. 43 (258-43-1), 8 October 1986, Yearbook of Commercial Arbitration, Vol XII (1987), 287-291. But in the present case the claims of Swissborough and the Tributing Companies to ownership rested on contracts which were invalid. So they never became the owners of the mining rights. 5 of 1995That is why there was nothing to expropriate.

[36]

[37] Or more accurately its trustees, in their capacities as such, are.

[38] 2019 1 SA 642 GJ; footnotes omitted

[39] See Mtikila v Tanzania application 011/2011, ruling on reparations, paras 34-36.

[40] 1999 2 SA 279 T

[41] 40 of 2002

[42] Section 3(4)(a) and (b)

[43] 2009 1 SA 457 SCA