Redstone Mining Corporation (Pvt) Ltd & Ors v Diaoil Group Zimbabwe (Pvt) Ltd & Ors (HC 3882 of 2015) [2015] ZWHHC 438 (5 May 2015)

1 HH 438-15 HC 3882/15 REDSTONE MINING CORPORATION (PVT) LTD and DIAOIL MINING (PVT) LTD and WILLEM LUKAS RUDOLF SWART and SWART FAMILY versus DIAOIL GROUP ZIMBABWE (PVT) LTD and MUTUMWAPAVI C. R VENGESAYI and VENGESAYI FAMILY and NAITASH INVESTMENTS and AGNES MASHAKADA HIGH COURT OF ZIMBABWE MATHONSI J HARARE, 6 May 2015 Urgent Chamber Application Ms R Zvimba, for the applicants TK Hove, for the respondents MATHONSI J: The applicants are in the mining business and have a substantial number of mining claims for tantalite, wolframite, gold, diamond and copper in Bakwa, Karoi, Buhera and Marange which they hold by certain certificates of registration. Duly represented by the third applicant, they, in December 2012, signed a memorandum of understanding with the first respondent ably represented by the second respondent the import of which was to identify the roles and responsibilities of the parties in respect of those mining concessions. In effect the parties were going into a kind of joint venture to operate together subject to certain terms and conditions. The applicants now complain that although the respondents were required to inject some capital into the joint venture in order to be admitted as partners in the mining concerns HH 438-15 HC 3882/15 they failed to do so even after their contribution had been reduced to $700 000-00 down from the original $3 million. When the second respondent purported to make a contribution in the form of 2 motor vehicles, a DAF truck registration number ACO 0841 and a Land Cruiser pick up, registration number ACO 0843 as well as a compressor, having failed to pay the money, it turned out that he was not the owner of those items. They belong to a third party Pitch Mining (Pvt) Ltd in which the second respondent is merely one of 5 directors of that company. The respondent having failed completely to fund the project, the third applicant states that he was constrained to do so himself with the assistance of his son who is based in South Africa. He developed the first and second applicants that way at a time when the respondents kept a very safe distance away from the mining activities. Displaying a lamentable trait of wanting to reap where they completely did not sow, the respondents are said to have only surfaced on 25 April 2015. They started interfering with mining operations, harassed the workers at the mine and labelled the third applicant a thief. They threatened the third applicant and vowed to disrupt operations at both the business premises of the first and second applicants and to cause the arrest of the third applicant on trumped up charges to enable them to remain taking over operations while he is in custody. The actions of the respondents have not only disrupted operations, they have unsettled the applicants who now seek in this application the following relief: “A TERMS OF THE FINAL ORDER SOUGHT That you show cause to this Honourable Court why a final order should not be made on the following terms: 1) The respondents be and are hereby ordered not to interfere and/or disrupt operations at the first and second applicants unless interms of the law. 2) The respondents be and are hereby barred from taking any equipment or machinery at the first and second applicants. 3) The respondents be and are hereby ordered not to visit the first and second applicants. 4) The respondents to pay costs of suit on a higher scale. B INTERIM RELIEF GRANTED Pending the return date of this matter, the applicant(s) be and are hereby granted the following interim relief: HH 438-15 HC 3882/15 1) The respondents be and are hereby ordered not to harass and threaten the third applicant and the mine workers. 2) The respondents be and are hereby ordered not to visit the first and second applicants unless in terms of the law. 3) The respondents be and are hereby barred from removing any machinery or equipment from first and second applicants and not to interrupt or interfere with operations thereof. 4) The respondents be and are hereby ordered to pay costs of suit on the attorney – client scale.” Mr Hove for the respondents has raised an array of points in limine in his quest to defeat the application. In the first place he complains that the third applicant is a fugitive from justice who is wanted by the police in Karoi and Avondale Harare in connection with charges preferred against him by inter alia, the second respondent himself. The third applicant is a fraudster and are crook who has been defrauding a number of people of their money and also has a judgment against him in the sum of $85 000-00 issued by this court. He should therefore be denied audience. In my view, there is a distinction between the criminal court and this court and where the police desire to prefer criminal charges against a person, as it is their constitutional mandate to do so, they should not hesitate to do so and the law should be allowed to take its course. Critically, it is a celebrated principle of our criminal jurisprudence that an accused person is innocent until proven guilty. It would be extremely unwise to judge a litigant in a civil matter by accusations that have been levelled against him by his business acquaintance in the criminal courts even before he has been convicted. Those accusations remain irrelevant to the present inquiry. More importantly, the third applicant is not the only one seeking redress in this application. There are 3 other applicants. In any event he has given his residential and business addresses and if indeed the police would like to interview him they know where to find him. Significantly, in his founding affidavit the third applicant states that he has been threatened by the respondents starting with their visit to the mine on 25 April 2015. He must therefore be available for arrest if indeed such is desired. I also find it interesting that the charge preferred by the respondents against the third applicant relates to a compressor which, according to the report made at Avondale Police Station on 18 April 2015 by the second respondent, occurred between February 2014 and HH 438-15 HC 3882/15 April 2015 a stretch of 14 months. One wonders how a single item could be stolen over such a long time. It has also not escaped me that this is the same compressor which Russia Muzanenhamo one of the directors of Pitch Mining (Pvt) Ltd which owns the compressor says the second respondent confirmed to him having authorised the third applicant to collect. I note that the second respondent, who had an opportunity to refute that, did not grab the chance. Ms Zvimba for the applicants produced a court order issued by this court in favour of the third applicant on 24 October 2013 directing that he be issued with a residence permit. I conclude therefore that the third applicant’s tribulations in the criminal justice system cannot be used as a weapon to ward off this application. Mr Hove also took the preliminary point that the third applicant is a South African national and therefore a peregrinus, who should be made to pay security for costs. As he has not made a payment of security for costs he should be denied audience. I have to repeat that the third applicant is not only the applicant, there are 3 others. In particular, the first and second applicants are incorporated in Zimbabwe and are therefore incola. There is no requirement for them to provide security for costs where they are suing in this jurisdiction. There are no rules governing the grant of an order for security for costs which issue arises out of judicial practice. The court has an exclusive discretion to make such order or not to: Bowes and Ors v Manolakakis 2011 (2) ZLR 59 (H) 63 D; Wong and Ors v Lin and Anor HH 380/13. The court has a discretion to dispense with security in exceptional cases but should exercise that discretion sparingly: Zendera v McDade and Anor 1985 (2) ZLR 18 (H) 20 A- D. In my view, it is always difficult, where an urgent application has been lodged, an application which demands the court’s urgent attention because of its exigencies, for the court to first attend an application for an order for security for costs. By the time such an application has been dispensed with, irreparable injury would have been sustained by the applicant. It occurs to me that as in an urgent application the court usually is required to grant interim relief, it would be a judicious exercise of discretion to entertain the urgent application first and let the party seeking an order for security to make its application for an order pending the return date of the provisional order should such be granted. What appears to be lost to litigants is that the requirement of security for costs to be given by a peregrinus is not only there for the asking, neither is it there as a weapon of defence by an incola bent on preventing an approach to the court by a peregrinus. The object HH 438-15 HC 3882/15 of the rule relating to provision of security is to ensure that an incola will not suffer loss if he is awarded costs of the proceedings. It protects the interests of the incola. See Herbstein and Van Winsen, The Civil Practice of the Superior Courts of South Africa, ed 3 at p 251, Zendera v McDade & Anor, (supra). In that regard a party requiring security for costs should make an application to the court for an order to be made. Such party is not the court and therefore cannot prevent the peregrinus from accessing the court until it has been paid ridiculous sums of money as security. It is the court which, in its discretion, should prescribe the amount to be paid, usually to the registrar. In casu, there has been no application made by the respondents, no figure has been proposed and indeed security for costs is being used to ward off an application by respondents who appear determined not to get to the merits of the matter. In the exercise of my discretion, I will therefore dispense with security for costs in respect of the third applicant. Thankfully Mr Hove, saw the light, albeit late, and abandoned that point in limine. The final point taken in limine relates to urgency. The respondents are of the view that the matter is not urgent and that the applicants have an alternative remedy to claim damages. The matter is not urgent because the dispute started on 11 April 2015 when the respondents discovered that the “3rd applicant had stolen mining equipment at their farm”. Mr Hove did not explain why the matter would not be urgent where allegations are made that the respondents rocked up at the mine on 25 April 2015 and disrupted operations, threatening to take over. There is no merit in that point in limine which is dismissed. There is no merit in the submission that the application should fail as there is no resolution of the companies authorising the third applicant to depose to the founding affidavit: Banc ABC v PWV Motors HH 123/13. What the applicants yearn for is a temporary interdict against what they regard as unlawful self help by the respondents who, by force and power, would like to take over mining operations they have not paid for. According to the applicants it was a condition of the agreement between the parties that before the respondents could secure shares in the group of companies, the first respondent, represented by the second respondent had to fund the group of mines until they became productive. That suspensive condition not having been met, the respondents have no right whatsoever over the mining concerns and should stay where they were when the third respondent funded the projects with his son. HH 438-15 HC 3882/15 Holmes JA set out the requirements for the grant of a temporary interdict in Ericksen Motors (Welkon) Ltd v Proten Morors Warrenton and Anor 1973 (3) SA 685(A) 691C – G in the following words: “The granting of an interim interdict pending an action is an extra ordinary remedy within the discretion of the court. Where the right it is sought to protect is not clear, the matter of an interim interdict was lucidly laid down by Innes JA in Setlogelo v Setlogelo 1914 AD 221 at p 227. In general the requisites are: (a) a right which, ‘though prima facie established, is open to some doubt’ (b) a well-grounded apprehension of irreparable injury; (c) the absence of ordinary remedy; In exercising its discretion, the court weighs inter alia, the prejudice to the applicant, if the interdict is withheld against the prejudice to the respondent if it is granted. This is sometimes called the balance of convenience. The foregoing considerations are not individually decisive, but are interrelated; for example, the stronger the applicant’s prospects of success the less the need to rely on prejudice to himself. Conversely, the more the element of ‘some doubt’ the greater the need for the other factors to favour him”. See also Charuma Blasting and Earthmoving Services (Pvt) Ltd v Njainjai & Ors 2000 (1) ZLR 85 (S) 89 E – H; The Joint Project Management Committee for Belvedere West/Warren Park v Mutingwende & Anor HH 541/14; Universal Merchant Bank Zimbabwe Ltd v The Zimbabwe Independent & Anor 2 000 (1) ZLR 234 (H). Before denying disrupting operations, the second respondent accused the applicants of failing to substantiate the claim of interference. He also challenged the applicants to prove that they funded the project. While claiming to have funded it, he also failed to produce proof in that regard. What I however find disturbing is contained in para 8 (b) of the opposing affidavit of the second respondent where he says: “3rd applicant should go to the police and defendant his case. It is therefore incorrect that the alleged interference started on 25th April 2015. 3rd applicant has been on the run since 11th April 2015. Respondents have always been running the business through 1st respondent with 2nd respondent as the chairman”. If this is no proof of interference nothing is. A person does not wake up one day “running the business” or “as chairman” of an enterprise. A lot has been held back from the court’s gaze. There can be no doubt that the first three requirements have been established. The applicants have funded a mining operation which they are running lawfully holding as they do mining certificates. They have a right to do so. The respondents appear to be threatening that investment unlawfully which action will certainly result in irreparable injury to the HH 438-15 HC 3882/15 applicants, giving rise to what they have called “commercial urgency”. I can conceive of no other remedy available to them other than an interdict. It remains for me to weigh the prejudice to be suffered by either side as a result of the grant or otherwise of the interdict. Clearly the balance favours the applicants because they are currently running the project without any input from the respondents who are “johnies came late” but wanting to take over without expending anything. I am therefore inclined to grant the interdict. Accordingly the provisional order is granted in terms of the amended draft order. Zvimba Legal Practitioners, applicants’ legal practitioners TK Hove & Partners, respondents’ legal practitioners