Breckridge Investments (Pvt) Ltd v RioZim Ltd & 2 Ors; Breckridge Investments (Pvt) Ltd v RioZim Ltd & 3 Ors (HC 1380 of 2020; HH 19 of 2021) [2021] ZWHHC 19 (25 January 2021)

1 HH 19-21 1. 2. BRECKRIDGE INVESTMENTS (PVT) LTD versus RIOZIM LIMITED and NORTH RAND (PVT) LTD and MINISTER OF MINES AND MINING DEVELOPMENT HC 1380/20 BRECKRIDGE INVESTMENTS (PVT) Ltd HC 1381/20 versus RIOZIM LIMITED and NORTH RAND (PVT) LTD and SHERIFF OF THE HIGH COURT and MINISTER OF MINES AND MINING DEVELOPMENT HIGH COURT OF ZIMBABWE MUNANGATI-MANONGWA J HARARE, 7 September 2020 & 25 January 2021 Opposed Matter Z. Lunga, for the applicant T. L Mapuranga, for the 1st respondent C Chitekuteku, for the 4th respondent MUNANGATI-MANONGWA J: This matter is a consolidation of two cases HC 1380/20 and HC 1381/20 the parties of which are the same. In both matters, rescission of judgment is being sought. In HC1380/20, the applicant seeks the following relief: 1. The rescission of the judgment in HC 4945/18. 2. The joinder of the Applicant in Case No. HC 4945/18 3. That the 1st Respondent serves the Applicant with a copy of the application and founding affidavit in HC 4945/18 within 4 days from the date of this order being granted. 4. That Applicant is granted 10 days within which to file its opposition and opposing affidavit. HH 19-21 The relief sought in HC 1381/20 is as follows: 1. The rescission of the judgment in Case No. HC 8198/20. 2. The joinder of applicant as respondents in HC 8198/20. 3. That 1st respondent serves the applicant with a copy of the founding affidavit in HC 8198/20 within four days from the date of this order. 4. That applicant be granted 10 days to file their notice of opposition and opposing affidavits. The 1st respondent opposed the application. The brief facts of this matter are that on 3 October 1996, 1st and 2nd defendants entered into a Notarial Prospecting Contract and Option Agreement involving 50 (fifty) gold mining claims. In the contract Rio Tinto Zimbabwe Limited (now Riozim Limited, 1st respondent herein) was stated as “the Owner” and North Rand,( 2nd respondent herein) “the Company.” A pertinent clause in the agreement read as follows: “The Owner as the registered and beneficial owner of the said blocks and of the Mining Rights hereby grants to the company, which accepts from it, the sole and exclusive option during this agreement to buy, at any time on or before the 30 day of September, 1997, or such later date as the owner and the Company may agree in writing, the said blocks and all the mining rights relating thereto together with ore and mineral or metalliferous substance…for the sum of ONE MILLION DOLLARS ($1 000 000) (hereinafter referred to as “the initial payment”)…” The total purchase price was US$6 000 000. The other terms of the contract are not relevant in the determination of this application. The 2nd respondent issued out summons against second and third respondents seeking cancellation of the said agreement and transfer of certain claims from the 2nd respondent, back to it. On 6 June 2018, default judgment was granted in favour of the first respondent Riozim, against North Rand (Pvt) Ltd as follows: 1. The agreement between the plaintiff and the 1st defendant is hereby cancelled. 2. The 2nd defendant (Minister of Mines) shall transfer to the plaintiff all the mining claims registered in the 1st defendant’s name as of the date of this order and listed under annexures RZ3, which claims were transferred to the 1st defendant from the plaintiff pursuant to the agreement dated 3 October 1996. 3. Costs of suit on a legal practitioner client scale. HH 19-21 Apparently the applicant claims that it owns the 20(twenty) mining claims listed in Annex RZ3 referred to in the order. The mining claims are registered in its names. It is this default judgment that applicant herein seeks to rescind. Of note is the fact that the agreement aforementioned pertained to 50 claims and of these, the applicant claims that 20 claims are registered in its name. Suffice to say after the granting of the initial default judgment the 1st respondent went back to Court and sought another judgment which was granted against North Rand and the Minister of Mines in default on 10 October 2018. The order thereof reads: 1. The Sheriff is hereby authorized to sign all papers authorizing the 2nd respondent to transfer the following mining claims from the 1st respondent to the applicant as contemplated in Section 275 of the Mines and Minerals Act (Chapter 21:05) 1.1 Bono, registered no. 14860 in respect of Gold, 9 claims situated in Kadoma 1.2 Bono 2 registered no, 14770, in respect of Gold, 9 claims situated in Kadoma 1.3 Bono 3, registered no. 14771, in respect of Gold, 10 claims situated in Kadoma 1.4 Blue Streak, registered no.12918, in respect of Gold, 10 claims situated in Kadoma 1.5 Blue Streak 2, registered no.12989, in respect of Gold, 10 claims situated in Kadoma 1.6 Blue Streak 8, registered no.14132, in respect of Gold, 10 claims situated in Kadoma 1.7 Blue Streak 9, registered no.14145, in respect of Gold, 10 claims situated in Kadoma 1.8 Blue Streak 10, registered no.14146, in respect of Gold, 8 claims situated in Kadoma 1.9 Blue Streak 11, registered no.14259, in respect of Gold, 6 claims situated in Kadoma 1.10 Blue Streak 12, registered no.14260, in respect of Gold, 10 claims situated in Kadoma 1.11 Blue Streak 13, registered no.14261, in respect of Gold, 10 claims situated in Kadoma 1.12 Concession Hill (W Portion) registered no. 319B, in respect of Gold, 5 claims situated in Kadoma. HH 19-21 1.13 Duchess 2, registered no.13938, in respect of Gold, 10 claims situated in Kadoma 1.14 Hilldene M, registered no 14144, in respect of Gold, 7 claims situated in Kadoma 1.15 Homelands 2, registered no.14143 in respect of Gold, 10 claims situated in Kadoma 1.16 Pickstone North, registered no.14037 in respect of Gold, 10 claims situated in Kadoma 1.17 Peerless, registered no. 8034, in respect of Gold, 10 claims situated in Kadoma 1.18 Venning, registered no.9315, in respect of Gold, 10 claims situate in Kadoma 1.19 Warren 2, registered no.14772, in respect of Gold, 10 claims situate in Kadoma 1.20 Duchess 3, registered no.6436, in respect of Gold, 11 claims situate in Kadoma 2. Any respondent opposing this application will pay costs of the application. The applicant herein further seeks rescission of this judgment. At the hearing of the two applications, the parties agreed that, if rescission of the judgment in HC 4945/18 (the initial order) is granted, the other default judgment, which sought execution, should also be set aside. The court acceded to the request as the proper course of action to follow as the second judgment/order was premised on the first order and simply sought to attain execution. It turns out that I granted the two orders for which rescission is being sought. The applicant seeks rescission of the initial order in terms of Rule 449 (1)(a). The applicant’s case is that it is the owner of the 20 (twenty) aforementioned claims which are stated in the order as listed under Annexure RZ3. The claims are registered in its name and it has proof of ownership by way of certificates. The applicant submits that it was not aware that there were court proceedings instituted in this Court which pertained to its claims. It only became aware of the case through the media when it was reported that the third respondent, Minister of Mines was found to be in contempt of court for failure to comply with the aforementioned court orders to transfer the claims to first respondent and was thus sentenced to 90 days imprisonment. HH 19-21 It its founding affidavit the applicant submits that the order was granted in its absence. As the registered holder of the mining claims applicant’s rights and interest in those rights are affected by the order. Further, that the order was granted in error in that it directed second respondent to transfer the mining claims to first respondent when second respondent was not the registered holder of the rights. The applicant further submitted that had the Court known that the mining claims were registered in the applicant’s names it would not have granted the order to first respondent. The applicant further submits that it was not a party to the agreement between the first respondent and the second respondent. It was not bound by that agreement hence there was no cause for the transfer of its rights to first respondent. The applicant further submits that clause 4 of the agreement between first and second respondent showed that the agreement had expired by effluxion of time. The applicant thus argued, had the court known that the agreement did not bind applicant the registered holder of rights, and that the agreement between first and second respondent had expired it would not have granted the order. Mr Lunga for the applicant argued that it is because of the assertion by the first respondent that the second respondent was the holder of the mining claims that the court granted the order. He submitted that no court fully conversant of the state of affairs would have proceeded to grant the order had the full facts been known, as this goes against the principle that a party cannot transfer that it does not have. The first respondent opposed the matter. Its initial stance was that the claims, which the order pertains to, are in the names of the second respondent. This respondent stated that applicant wants to irregularly invite itself in a matter in which it has no legal interest. The court notes that in all its opposition papers in both HC 1380/20 and HC 1381/20 the first respondent denies that the claims stated in the orders belong to the applicant arguing that the claims are different. In HC 1380/90 there is outright denial that the claims are the same (see p 102 para 5-11). The first respondent categorically stating in para 11 that “The claims to which the order of the court pertains are in the name of second respondent. The order does not relate to claims which are in the name of the applicant.” These averments are maintained in HC1381/20 from para 5-11. This stance was maintained until the day of hearing when ultimately there was a concession that the claims are the same. HH 19-21 The first respondent maintained in opposition that the agreement has nothing to do with the applicant and at any rate, the second respondent a party to the agreement refrained from raising any argument on the status of the agreement. The respondent further stated in the affidavit filed on its behalf that it is incompetent to seek a joinder consequent upon the granting of an order in terms of r 449 and prayed for the dismissal of the application with costs on a higher scale. Mr Mapuranga for the first respondent argued that rule 449 is not applicable in casu in that the errors that the applicant seeks to rely on are not errors of form or procedure. He submitted that before the summons were issued it was verified with the Ministry of Mines and the respondent was advised that the claims were registered in North Rand’s names. This therefore was an error of substance so he argued. He further submitted that the option agreement was attached to the application hence the court should have been aware of the provisions of paragraph 4 which related to the expiry of the agreement. He argued that in any case it was the main agreement that it sought cancelled. That being so, the court was functus officio. Mr Mapuranga further submitted that paragraph 1 of the order that granted cancellation of the agreement cannot be rescinded as the second respondent, North Rand was duly served and it did not defend the matter. However, the order could be rescinded in part. In what seems to be an about turn, Mr Mapuranga submitted that as the order seeks transfer of the claims in the name of North Rand and not in the names of any other party, if the claims are in a third party’s name the order will just be brutum fulmen. In seeking rescission of judgment in terms of r 449 an applicant needs to satisfy the following requirements: i) ii) That the judgment was erroneously sought and granted That the judgment was granted in its absence iii) That the judgment affects its rights or interests See Tiriboyi v Jani & Anor 2004 (1) ZLR 470. MAKARAU JP as she then was held at p472 D-E that “the purpose of r449 appears to me to be to enable the court to revisit its orders and judgments to correct or set aside its orders or judgments given in error and where to allow such to stand on the excuse that the court is functus officio would result in an injustice and will destroy the very basis upon which the justice system rests.’’ HH 19-21 The issue therefore is whether it is proper in the circumstances to revisit this judgment? Was the order given in error? Whether maintaining the order will result in an injustice. In making, this enquiry the court is conscious to the fact that it needs not enquire into the merits of the matter to find good cause. GUBBAY CJ (as he then was) held in Grantully (Pvt) Ltd & Anor v UDC Limited 2000 (1) ZLR 361 (S) “For there is no requirement that an applicant seeking relief under Rule 449 must establish “good cause.” If a court establishes that a judgment or order was erroneously granted in the absence of a party affected, it may be corrected, rescinded or varied without further enquiry. It is apparent from the Summons upon which default judgment was obtained, that the first respondent claims to have transferred the mining blocks in issue to the second respondent. (See p 66 paras 4 and 7 of the declaration). Precisely paragraph 4 states: “ The plaintiff entered into a Notarial Prospecting Contract and Option Agreement with the 1st defendant on the 3rd October 1996 wherein it transferred various blocks of mining claims attached hereto as “Annexure RZ1’’ to the first defendant.” The above is further buttressed by the contents of paragraph 7 which states that upon the payment of the initial sum of US$1 000 000 (One million dollars) to 1st respondent, the 1st respondent Riozim “duly facilitated the transfer of the claims to first defendant (second respondent North Rand). In the affidavit of evidence filed under the application for default judgment in HC 4945/18 the same averment is repeated in para 5 on p 38. Despite these assertions, it is common cause that 20 (twenty) out of the 50 (fifty) claims that are covered by the default judgment are in the name of applicant. The applicant provided proof of such ownership by way of certificates of registration. The court was thus made to believe that all the claims listed in the draft order were in the names of the second defendant. In that regard, retransferring them to the first respondent was legally proper. If therefore information had been placed before the court that twenty of the claims were in actual fact registered in the names of the applicant the order would not have been granted in the nature and form in which it is. There would not have been any causa or reason for the transfer in the absence of a contract or a legal obligation by applicant towards the first respondent. The issue of ownership was thus not placed before the judge which information was vital. The court thus erroneously granted the order in the absence of the other party who had a legal interest in the matter in so far as the subject pertained to it in terms of ownership rights. In the circumstances the court is not functus officio. To leave the order intact as the first respondent has suggested on the basis that the order HH 19-21 is brutum fulmen is not proper. Litigants cannot send the courts on a wild geese chase and obtain orders, which they can then shelve because they are not executable. The second argument by the applicants that the judgment was granted in error because the contract between the first respondent and the second respondent had expired cannot be sustained. This is because of the issue of privity of contract. The applicant is not a party to the contract and the concerned party did not defend the matter. As a third party the applicant cannot therefore seek to rely or base its case on the terms of a contract to which it is not party to. The applicant’s interest being limited to the protection of its assets. The applicant further seeks to be joined to the proceedings should rescission be granted. The application which has been combined with the one for rescission is clear that joinder is being sought in terms of Rule 87 Order 13. Whilst the court questions the wisdom of joining the applications it finds that it is not fatal as the averments pertaining to joinder are clearly distinct. Joinder is not being sought in terms of r 449. An application for joinder can be made at any stage. In Shumbairerwa v Chiraramiro & Ors HH731/15 this court held that the purpose of r 87 (2) (b) “is to prevent unnecessary multiplicity of litigation and to facilitate the speedy and wholesale resolution of disputes by ensuring that everyone whose legal interests are likely to be affected by the outcome of the proceedings is joined as a party to the proceedings. This ensures that all interested parties are aware of the proceedings, and advised of the outcome, which gives them an opportunity to protect their interests and fight for their rights…” Thus the applicant needs to satisfy the following for them to be joined as a party: 1. A party must have a direct and substantial interest in the issues raised in the proceedings before the court; and that; 2. His rights may be affected by the judgment of the court. Given the facts of this matter the court is satisfied that the applicant has satisfied the requirements for joinder. The court finds that the applicant has a direct and substantive interest in the issues raised in the proceedings and not just a financial interest. It is the owner of 20 mining claims which are subject of the proceedings and its ownership rights are at stake. The court being satisfied that the requirements for rescission of the default judgment have been met and the grounds for joinder satisfied, it is justiciable that the applicant’s prayer for joinder be granted. The court however finds merit in Mr Mapuranga’s argument that there cannot be a blanket rescission of judgment in this case. Clause 1 of the order in HC4945/18 provides for the cancellation of the agreement between the plaintiff (first defendant in casu) and the first defendant (second respondent). There is no need for the court to interfere with this relief as the applicant has no interest in that contract and furthermore the first defendant thereat had not HH 19-21 defended the matter. It is clause 2 which needs to be set aside in so far as it relates to the applicant. This is a case which it was not necessary for the first respondent to go all out and defend as parties could have made necessary concessions and saved time and costs. For this conduct, the court would have ordered costs against the first respondent. However the applicants have submitted that they will not insists on costs, so no order for costs will be issued. In view of the concession by the first respondent that if rescission of the order in HC 4945/18 is granted the rescission of the order in HC8198/18 automatically follows, the court therefore will grant the application as prayed for with necessary amendments. In the result, the following order is made: 1. Clause 2 of the order issued in default in HC4945/18 which reads: “The 2nd defendant shall transfer to the plaintiff all the mining claims registered in the 1st defendant’s name as of the date of this order and listed under annexures RZ3, which claims were transferred to the 1st defendant from the plaintiff pursuant to the agreement dated 3 October 1996” be and is hereby rescinded. 2. Clause 3 of the same order pertaining to an award of costs is set aside. 3. The applicant be and is hereby joined to the proceedings in HC 2587/18 as third defendant. 4. The 1st respondent shall serve summons in HC 2587/18 upon the applicant within 5 days calculated from the first business day following the last day of the lockdown period. 5. Thereafter the matter to proceed in terms of the rules. 6. The application for rescission of the default order in HC 8198/20 be and is hereby granted. 7. There is no order as to costs. Lunga Attorneys, applicant’s legal practitioners Coghlan, Welsh and Guest, 1st respondent’s legal practitioners Civil Division of the Attorney General’s Office, 4th respondent’s legal practitioners HH 19-21