Jiang Xuemei and Fu Youren v Laura Malane and True Double Investments (Private) Limited

### Preamble
1
HB 23/21
HC 10/21
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JIANG XUEMEI

And

FU YOUREN

Versus

LAURA MALANE

And

TRUE DOUBLE INVESTMENTS |(PVT|) LTD

IN THE HIGH COURT OF ZIMBABWE

MAKONESE J

BULAWAYO 22 JANUARY 2021 & 11 MARCH 2021

P. Mukono for the applicants

A Muchadehama for the respondents

MAKONESE J:	This is an urgent chamber application for an interdict.  The draft order is in the following terms:

“INTERIM RELIEF

That the respondents be and are hereby interdicted from carrying out mining activities at True Double Investments Mine at the exclusion of 1st and 2nd applicants and/or denying the applicants the right to benefit from the activities of the 2nd respondent being carried out at the mining site pending the return date.

That there be no order as to costs if the application is unopposed.

TERMS OF FINAL ORDER SOUGHT

That the 1st respondent and anyone acting through her is interdicted from conducting the affairs of the 2nd respondent at the exclusion of the applicants.

That the 1st respondent be interdicted from denying the applicants access to the mining site.

That costs of this application shall be borne by the 1st respondent.”

FACTUAL BACKGROUND

On 4th November 2019 2nd respondent was incorporated in terms of the laws of Zimbabwe.  1st applicant was allocated 15 shares and 2nd applicant was allocated 5 shares.  The 1st respondent is a director of 2nd respondent holding 50% shares.  The remainder of the 30% shares was allocated to Chinese nationals who have not been cited in this application.  1st applicant is a director of 2nd respondent and so is 2nd applicant.  2nd respondent is an entity with a mining and gold processing licence.  In order to carry out its mandate in accordance with the mining licence, 2nd respondent secured a mining site in Umzingwane, Filabusi.  Applicants allege that on or around 10th January 2021, 1st respondent kicked out applicants’ employees from the mining site.  1st respondent then proceeded with mining activities to the exclusion of the applicants.  Efforts by applicants to have an audience with 1st respondent was met with resistence.  In the meantime applicants allege that mining operations proceeded at the mining site.  Some photographs taken at the mining site were attached to the application as proof that mining activities were in progress.  Applicants contend that 1st respondent has taken the law into her hands and that this court ought to intervene and interdict the respondent from conducting any mining activities at the mining site to the exclusion of the applicants.  Applicants contend that they have lost their source of livelihood and if the court does not intervene their investment would have been lost without any recompense.  Further, the applicants aver that due to the current economic hardships imposed by the Covid – 19 pandemic their exclusion from the mining site will spell financial doom.

In their response, the respondents deny that the applicants are entitled to an interdict.  1st respondent denies that any mining operations are currently underway.  1st respondent denies that applicants’ employees have been kicked out of the mining site and that in any event, if such an event occurred it would amount to a labour dispute.  1st respondent alleges that the application is based on hearsay as 1st applicant has never been to the mine in her life and does not know where the mining site is located.  Respondents have raised certain preliminary points which have to be dealt with before dealing with the merits of the application.

Matter is Res Judicata

1st respondent contends that a similar matter between the same parties was dismissed by the High Court in Harare under case number HC 6319/20.  It is argued by 1st respondent that in that matter applicants were seeking the same relief on more or less the same facts.  I have taken time to examine the papers filed at the High Court, Harare under case number HC 6319/20.  In that matter an application was filed by the applicants for an interdict on the 29th October 2020.  The interim relief sought is in the following terms:

“Pending the finalization of the matter, applicants are granted the following relief:

1.	An interdict restraining the respondent from interfering in the affairs of 4th applicant pending finalization of the matter under case number HC 6316/20.

2.	An interdict restraining the respondent from unilaterally making decisions for the 4th applicant without the approval of the Board of Directors.”

In my view there is absolutely no merit in this point in limine.  Firstly, the issues canvassed in HC 6319/20 are not the same as those raised in the application before this court.  The relief sought in this matter is clearly different.  In the application before this court applicants seek to interdict the respondents from undertaking mining activities to the exclusion of the applicants.  I am therefore not persuaded by the argument that this matter is res judicata.  The preliminary point is therefore dismissed.

Matter Not Urgent

Applicants contend that their employees were kicked out of the mining site around 13th January 2021.  In response to that specific allegation on when urgency arose, the 1st respondent averred that the application was based on hearsay.  1st respondent insisted that 1st applicant has never set foot on the mining site and that she did not know where the mine was located.  The difficulty with 1st respondent’s response is that it is not denied specifically that the applicants and respondents were supposed to undertake mining operations for the benefit of all the shareholders and directors.  1st respondent makes the specific assertion that no mining activities are taking place at the mine.  In the same breath 1st respondent contends that 2nd respondent was granted a licence to carry out river bed mining along the Umzingwane River, Filabusi.  1st respondent contends that river bed mining was banned by the government on 8th September 2020.  1st respondent states that since the 8th of September 2020 no mining has been undertaken or commenced.  It is crucial to note that 1st respondent then states that the mine is at development stage.  It is contended by 1st respondent that the mine is at development stage even though on one hand it is alleged that mining activities were banned in September 2020.  To emphasise the point 1st respondent contends that an Environmental Impact Assessment Certificate from the Environmental Management Authority (EMA) has not yet been secured.  1st respondent then challenges the applicants to show the court how respondents have been benefiting from the mine.  The respondents’ contentions are fraught with contradictions.  If mining activities were banned in September 2020 how can the mine be at development stage.  The respondents do not disclose what development is being undertaken.  It has not been denied by respondents that applicants have invested in the project.  1st respondent’s opposing affidavit does little to controvert that specific allegation.  I am satisfied that on or around 13th January 2021, respondents kicked out applicants’ employees from the mining site.  This application was filed on the 17th January 2021.  There was no undue delay in the filing of this urgent chamber application.  The requirements for urgency were well set out in the case of Kuvarega v Registrar General and Another 1988 (1) ZLR 188 (H).  CHATIKOBO J summarised the position as follows:

“What constitutes urgency is not only the imminent arrival of the day of reckoning; a matter is urgent, if at the time the need to act arises; the matter cannot wait.  Urgency which stems from a deliberate or careless abstention from action until the dead-line draws near is not the type of urgency contemplated by the rules……”

It cannot be said the applicants did not act when the need to act arose.  I have taken note of the cases filed at the High Court in Harare.  The matter before me is based on substantially different circumstances and requires this court’s urgent intervention.  The alternative remedies of seeking recourse in the Labour Court are illusory.  The 1st respondent has stated that there are no mining activities and yet there is a broad assertion that the mine is still at development stage.  If there are no mining activities being undertaken why would applicants allege that their employees were chased away.  I conclude that the matter is urgent and that the preliminary objection has no merit.

Matter raises disputes of fact

The last preliminary point raised is that the matter cannot be dealt with on the papers.  Further it is alleged that the applicants’ case is based on hearsay.  It is indicated that both applicants do not operate from the mine.  This averrement on its own belies the falsity of the argument that there are no mining activities being undertaken.  The 1st respondent does not specifically deny that 1st applicant has a 15% shareholding in 2nd respondent.  1st respondent does not dispute that 2nd applicant hold a 5% stake in 2nd respondent.  1st respondent does not deny that applicants invested in 2nd respondent.  Whether or not the applicants reside or work at the mine is not relevant to the resolution of the matter.  A shareholder or director is not at law required to be present at all times at a mine in a mining venture.  Indeed in large corporations, a shareholder may never set foot at the premises of a company in which he is a shareholder.  This does not mean such a shareholder loses protection of his investment under the law.  In raising what is perceived as a dispute of fact, 1st respondent simply states that she denies the factual basis upon which the application hinges.  This is not a dispute of fact.  By simply alleging that one does not admit the factual basis of an application does not give rise to a dispute of fact.  This preliminary objection was not seriously taken.  The facts as set out in the applicants Founding Affidavit are fairly straight forward.  1st respondent’s response to the application is fraught with contradictions.  I do not consider that there is material dispute of fact.  The law on this aspect is well settled.  Where there is a material dispute of fact, the matter should be brought to court by way of action proceedings.  See: MacKINTOSH (nee PERKINSON) v MacKINTOSH SC 37/18.

This preliminary point is accordingly dismissed for lack of merit.

ON THE MERITS

This is an urgent application for an interdict.  The order sought in the interim relief is for the respondents to be interdicted from carrying out mining activities at True Double Investments Mine, Filabusi to the exclusion of 1st and 2nd applicants and/or denying the applicants the right to benefit from the activities of 2nd respondent being carried out at the mining site.  The facts as set out in the Founding Affidavit are that applicants hold a minority shareholding in the 2nd respondent.  Applicants have averred that they have invested in the mining project.  This has not been denied by the respondents.  What respondents seem to deny is that mining activities are being undertaken.

It is necessary to determine whether the requirements of an interdict have been established in this application.  The requirements for the grant of an interdict have been well settled in this jurisdiction.  These may be summarized as follows:

a clear or prima facie right.

a well-grounded apprehension of irreparable harm if the interim relief is not granted.

that the balance of convenience favours the granting of the interdict and

that the applicant has no other satisfactory remedy.

See: ZESA Staff Pension Fund v Mushambadzi SC 57-02 and Bangidza and Another v Kunaka and Others HB 07-20.

In this matter applicants aver that a prima facie right has been established in that the proved that they are shareholders in the 2nd respondent.  Applicants have a beneficial interest in any mining activities conducted by 2nd respondent.  It has not been denied that applicants invested financially in 2nd respondents.  The respondents may not shut out the applicants from mining activities in which they have direct interest.  Sufficient evidence was placed before the court in the form of CR14 Forms where applicants are recorded as directors and shareholders.  There is well grounded apprehension that if excluded from mining activities applicants will lose their investment and suffer irreparable harm.  As things stand the balance of convenience favours the granting of an interdict.  The balance of convenience is defined in Tornbridge Assets Ltd and Cut Rag Processors Pvt Ltd v Livera Trading Pvt Ltd and 3 Others HH 122-17 as follows:

“The balance of convenience is determined by weighing the prejudice to the applicants if the interim relief is refused against the prejudice to the respondent if it granted.”

See: Nyambi and Others v Minister of Local Government and Another 2012 (1) ZLR 569 (H).

In the present case if the interim relief is refused applicants will continue to be shut off from mining activities conducted at True Double Investments Mine at Filabusi by 1st respondent.  Applicants will continue to lose financially from such exclusion.

The 1st respondent avers that the applicants have an alternative remedy in seeking recourse in the Labour Court.  I find no merit in this suggestion.  A shareholder who is prevented from participating in a mining venture cannot obtain relief in the Labour Court.  The application is properly before this court. This matter has to be determined in favour of the applicants.

I find that applicants have made out their case and are entitled to the interim relief sought.  In the circumstances the following order is made:-

1.	Pending the determination of this application, the applicants are granted the following relief.

(a)	That the respondents be and are hereby interdicted from carrying out mining activities at True Double Investments Mine, Filabusi to the exclusion of 1st and 2nd applicants and/or denying the applicants the right to benefit from the activities of 2nd respondent being carried out at the mining site pending the return date.

(b)	The respondents to bear the costs of suit.

Dube, Mguni and Dube, applicants’ legal practitioners

Mbidzo Muchadehama & Makoni c/o Dube-Tachiona & Tsvangirai, respondents’ legal practitioners