Thuthuka Matobo Mining Co-Op Limited v Teddy Gumbi & 2 Ors

### Preamble
1
HB 164.20
HC 463/20
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THUTHUKA MATOBO MINING CO-OP LIMITED

Versus

TEDDY GUMBI

And

MICHEAL CHRISTOPHER STONE

And

AKENAKA MINERAL SOLUTIONS (PVT) LTD

HIGH COURT OF ZIMBABWE

DUBE-BANDA J

BULWAYO 15 JULY 2020 AND 6 AGUST 2020

Opposed court application

G. Sengweni, for the applicant

N. Mangena, for the respondents

DUBE-BANDA J. 	On 12 May 2020, the applicant filed this court application seeking an order to set aside a consent order granted on 12 February 2020. It prayed that the consent order handed down at Bulawayo on the 12 February 2020 under case number HC 320/2020 be set-aside; the interim relief prayed for by respondents in case number HC 320/2020 be and is hereby granted in lieu of the consent order; applicants be and hereby ordered to file their notice of opposition within 10 days of this order and that there be no order as to costs.

This application is opposed.

Background

The background facts of the matter are that on the 7th February 2020, respondent’s filed an urgent application under cover of case number HC 320/20. The matter was set down for a hearing for the 12th February 2020. On the set down date the litigants were in attendance with their respective legal practitioners. Mr N. Sithole, of Ncube & Partners represented the now applicants (as respondents) in HC 320/20.

At the hearing of the chamber application, it was ordered by consent that the Tribute Agreement entered intoon the 28 January 2020 be and is hereby declared null and void and of no force or effect; that Thuthuka Matopo Mining Co-op Limited, respondent therein,be permanently interdicted from carrying out any mining operations on the basis of the said Tribute  Agreement at the following mining claims: Stella City H Mine registration number 11230BM; Rod C Mine registration number 11235BM; Rod D registration 11236BM and Simple Simon registration number 11233BM.

The applicant now seeks to have this consent order set aside on the grounds that its erstwhile legal practitioner, Mr Sithole misled it into believing that the consent order was in respect of the interim relief, not the final relief sought therein. What was granted is the final relief that was sought, not the interim relief. The allegation is that the erstwhilelegal practitioner failed to take proper instructions and misled the applicants into consenting to a final relief that was sought by the opposing parties.  In a nutshell the complaint is that the erstwhile legal practitioner failed to provide proper, effective and competent legal representation.

The law and the facts

This application has been launched in terms of Order 8 rule 56 of the High Court Rules, 1971 (Rules).  This rule provides that a judgment given by consent under these rules may be set aside by the court and leave may be given to the defendant to defend, or to plaintiff to prosecute his action. Such leave shall only be given on good and sufficient cause and upon such terms as to costs as the court deems just.

It is a fundamental principle, dictated by public policy, that as far as possible, there should be finality in litigation. The courts have accepted that in the case of consent orders circumstances do arise where such orders should, in the interests of justice, be set aside.In such a case the applicant must show good and sufficient cause to persuade a court set to aside a consent order.An applicant against whom a consent order has been entered can apply under the rules of court or under the common law or both for its rescission. Smith J states as much in Mukundadzviti v Mutasa, 1990 (1) ZLR 342 wherein he remarked that a judgment granted by consent can be set aside on the grounds of fraud, discovery of new documents, error or irregularities in procedure. Rule 56 offers a leeway to the court to set aside a judgment or order given by consent.

The law relating to the criteria that the court should take into account when considering an application to set aside a judgment given with the consent of the parties was clearly set out in the case of Georgias and Another v Standard Chartered Bank 1998 (1) ZLR 356 (H),this is what the court had to say at page 492 H- 493A“that a judgment given by consent may be set aside on good and sufficient cause; an inquiry to be determined in accordance with the same principles as are applicable to the grant of the indulgence of rescission of a judgment given by default.”

The adoption of those principles to an application to rescind a judgment given by consent enjoins the court to have regard to: the reasonableness of the explanation proffered by the applicant of the circumstances in which the consent judgment was entered; the bona fides of the application for rescission; the bona fides of the defence on the merits of the case which prima facie carries some prospects of success. Too much emphasis should not be placed on any one of the above factors. They must be viewed in conjunction with each other and with the application as a whole. A very strong defence on the merits may strengthen an unsatisfactory explanation. See Masulani v Masulani HH 68-2. The onus is upon the applicant to move the court to grant the indulgence sought. The judgment will not be set aside for the mere asking.

An examination of the reasonableness of the explanation is anchored on circumstances under which the consent was granted. In casu the explanation is predicated on the alleged misapprehension on the part of the applicant arising from the alleged failure by its erstwhile legal practitioner, Mr Sithole to consult and explain the import of the consent he entered into with the respondents. It is contended that the applicant was made to believe that the consent order had the effect of stopping applicant from carrying out any mining operations at the affected mining locations pending the finalization of the dispute between the parties. It is alleged that the applicant did not realise that the consent order handed down was in fact the final relief sought by the now respondents.

The deponent alleges that its erstwhile legal practitioner did not advise it of the import of the order that applicant was consenting to. The allegation is that applicant was made to believe that it was consenting to the interim relief, not the final relief in the application. The point is made that if the import of the final order granted was explained applicant could not have consented to it.

Respondents contend that the deponent to the founding affidavit in this application was in attendance during the hearing of the matter. It is argued that the consent order was entered after both litigants caucused with their respective legal practitioners and reached an agreement to have a consent order granted. It is further contended that the import of the consent order was explained to the parties inside the presiding judge’s chambers. It is contended that the judge read out the consent order to the parties in chambers. The net effect of the submissions of the respondents is that applicant is not being truthful that it was misled by its erstwhile legal practitioner.

This is a serious allegation made against the erstwhile Mr Sithole. The Constitution guarantees every person the right to a fair hearing. This includes the right to choose, and to be represented by a legal practitioner. The right to legal representation is a right of substance, not form: The constitutional right to counsel must be real and not illusory and a litigant has, in principle, the right to proper, effective or competent legal representation. Incompetent lawyering can wreck a hearing, thus violating a litigant’s right to a fair hearing. The right to legal representation therefore means a right to competent representation – representation of a quality and nature that ensures that the hearing is indeed fair. When a litigant complains about the quality of legal representation, such a complaint must be given serious consideration. If there is evidence that an inept advice of counsel improperly and unfairly thwarted a litigant’s exercise of the right to a fair hearing, the court must come to the rescue of such a litigant. See S v Tandwa [2007] SCA 34 (RSA).

During the hearing I asked Mr Sengweni, counsel for the applicant, whether the erstwhile legal practitioner was given an opportunity to put his version before this court. Counsel submitted from the bar that the erstwhile counsel was asked to put his version before court, and he declined. I find this unsatisfactory, first this explanation is not contained in the affidavits before court, i.e. the founding affidavit and answering affidavit. Second, no correspondence has been placed before court to show that the erstwhile counsel was requested to put his version before this court. I take the view that where the erstwhile counsel declines to put his version before court, he must still be served with the application, to give him an opportunity to seriously consider whether to put his version or let go. If he has been served with the court papers containing allegations against him and he declines to put his version before court, the court may then draw adverse inferences against such a counsel.

This court would not make a serious finding against an individual when there is no evidence that such an individual has had notice of the allegation being levelled against him. This court cannot conclude that the erstwhile counsel did not provide proper, effective or competent legal representation, without his version being before court or evidence that he is aware of the allegations being made against him. Faced with an attack on his professionalism, counsel has a right to defend his name. See S v Tandwa [2007] SCA 34 (RSA).To accuse a legal practitioner of misleading a client, and not give him an opportunity to defend his name is unacceptable and wrong.

The applicant’s case is deficient in that, in its affidavits, it does not place before court facts upon which a finding can be made that it did not consent to the order when it was entered into. It is trite that an application falls or succeeds on the basis of the contents of the affidavits before court. I therefore, find that there is no evidence that the erstwhile legal practitioner did not give applicant proper, effective or competent legal representation.  The onus is on the applicant to show that indeed its complaint has merit, it has failed to do so. I conclude on this issue that applicant, with correct legal advice consented to the consent order.

On the merits, has applicant presented a bona fide defence which, prima facie, carries some prospect or probability of success? In the founding affidavit, it is contended, inter alia as follows:

Applicant entered into a Tribute Agreement with Progressive Mining Syndicate where the second respondent and the third respondent in the urgent chamber application under case No. HC 320/2020 are members on the 21st January 2016.

The Tribute Agreement was in respect of the mining locations reflected in the preamble of the Tribute Agreement.

In terms of clause 1(b) of the said Tribute Agreement applicant had a right to extend the Tribute Agreement for a further three years on condition that they has complied with the terms of the agreement and they gave notice to the grantor. The grantor, through their accredited agent Michael Peter Mlilo confirmed applicant’s notice of extension and extended the Tribute Agreement for a further three years in the letter to the Fourth respondent dated 28 January 2020.

The mining locations in question are owned by Progressive Mining Syndicate which is wholly owned by Michael Peter Mlilo and Michael Christopher Stone t/a Progressive Mining Syndicate.

Third respondent is not anywhere near the ownership of the mining locations in question so there is no way they could be a party to any dispute arising from an agreement in respect  of the mining locations.

Applicant dealt with Progressive Mining Syndicate represented by their accredited agent, Michael Peter Mlilo.

Applicant went into the Tribute Agreement as innocent third parties who had nothing to do with the internal issues of the grantor.

Whatever agreement the grantor entered into with anyone in respect of their mining activities would not affect the Tribute Agreement innocently entered into by the applicants and the grantor.

We attach hereto as Annexure F the affidavit of Michael Peter Mlilo confirming his status as the accredited agent of the owners of the affected mining locations.

Mr Michael Peter Mlilo deposed to what is called a confirmatory affidavit, whose material parts reads as follows:

The mining locations in question are owned by Progressive Mining Syndicate and not belong to the third respondent.

Third respondent and Progressive Mining Syndicate entered into a Joint Venture Agreement on the 25 April 2018 well after Progressive Mining Syndicate had entered into a Tribute Agreement with the applicant.

Progressive Mining Syndicate remain the lawful owner of the mining locations in question.

I can confirm that in my capacity as Progressive Mining Syndicate’s accredited agent, I, on behalf of the Progressive Mining Syndicate endorsed the applicant’s right to extend the Tribute Agreement by signing the letter of renewal addressed to first respondent and dated 28 January 2020.

Applicant is an innocent party to the Tribute Agreement and I believe they should be allowed to enjoy their rights in terms of the Tribute Agreement.

In any event, the Joint Venture Agreement between the third respondent and Progressive Mining Syndicate explicitly spells out how any dispute arising from the agreement should be resolved and approaching this court for relief is not one of the options.

The worst that can happen to the applicant is that it be stopped from carrying out mining operations as an interim measure pending the finalisation of the matter as to permanently stop them from mining would be a travesty of justice.

The alleged Tribute Agreement between Progressive Mining Syndicate and Thuthuka Matopo Mining Co-Operative was signed on the 21st January 2016. The Joint Venture Agreement between Progressive Mining Syndicate and Akenaka Mineral Solutions (Pvt) Ltd was signed on the 20 April 2018.

The applicant’s case is that it signed a Tribute Agreement with Progressive Mining Syndicate. Mr Stone a member of the Progress Mining Syndicate categorically distances himself from the said tribute agreement with Thuthuka Matopo Mining Syndicate.  In his supporting affidavit in the notice of opposition, he contends that:

I am indeed a member of the Progress Mining Syndicate together with one Michael Peter Mlilo.

I am however unaware of the particular Tribute Agreement that the said Mr Michael Peter Mlilo purportedly entered into with the applicants in this matter.

Accordingly, the said Tribute Agreement would be invalid as I was not aware of it and have never been benefited from the proceeds thereto.

On the basis that the Michael Peter Mlilo and myself ceded our claims in the mining locations in question in this matter to 3rd respondent, I would never have agreed to and  / or gone ahead to enter into a Tribute Agreement with the applicant in respect of those claims.

In the circumstances, my position is that whatever Tribute Agreement Mr Mlilo purportedly entered into does not hold any water and is not binding on me neither is it binding on the 3rd respondent.

In fact the purported Agreement appears to have been manipulated as articulated in the main opposing affidavit. I confirm that I have always initiated all the pages of any such agreement. In the present case, page I is not initiated.

I believe applicant simply took a Tribute Agreement done for some other claims and changed page one, which is why it has not initials.

Mr Mlilo’s actions are clearly wrong and inconsistent with numerous board level decisions on these claims.

First applicant filed an answering affidavit. In respect of the allegations made by Mr Stone, applicant avers that:

No issues arise save that matters between the two Michaels are not for the applicant.

Applicant assumed at all material times that the representation of Progressive Mining Syndicate was through their accredited agent. Internal matters of Progressive Mining Syndicate are theirs and applicant would not want to delve into such matters.

These are serious allegations attacking the authenticity of the said Tribute Agreement, upon which applicant’s case turns. Mr Stone denies having signed the alleged Tribute Agreement. He contends that he  believes applicant, in connivance with Michael Peter Mlilo simply took a Tribute Agreement done for some other claims and changed or replaced  page one, which it says explains why page one has no initials. The applicant does not deal with this attack in its answering affidavit. It ignores it. Mr Mlilo, despite the fact that he deposed to a confirmatory affidavit in the application, does not answer and respond to the legations made by Mr Stone. Mr Stone avers that the purported Tribute Agreement appears to have been manipulated. He says he confirms that he has always initiated all the pages of any such agreement. In the present case, page I is not initiated and he believes Mr Mlilo simply took a Tribute Agreement done for some other claims and changed page one, which is why it does not have his (Mr Stone’s) initials.

This leaves this court with one version, i.e. of Mr Stone, that the Tribute Agreement placed before court is not authentic.  The failure to meet and traverse the sting of Mr Stone’s version has the effect of defeating applicant’s claim. This position was stated in the case of Loveness Sengeredo v Eric Cable N.O. HH 32/08 where MAKARAU JP, as she then was at p 2 stated that-

In my view, the purpose of an answering affidavit is akin to that of a replication in an action. It is filed not merely for the form but to specifically meet and traverse all 	the averments made in the opposing affidavit that have the effect of defeating the applicant’s claim. Like in any pleading filed with the Court, all issues that are not specifically denied and traversed in the answering affidavit are to be taken as if they have been admitted… It is my further view that answering affidavits, like all other affidavits, must be drafted with precision and must meet the sting of the defence being raised in the opposing affidavit.

I take the view that applicant’s failure to deal with the attack on the authenticity of the said Tribute Agreement is fatal to the applicant’s case. The unchallenged net effect of Mr Stone’s contention is that the Tribute Agreement before court is a fake document. If the authenticity of a document has been assailed, a court cannot attach any weight to its contents. I say so because a document is placed before court for the truthfulness of its contents, if it is not authentic, its contents cannot be true.

Mr Sengweni argues that Mr Mlilo is a member of the Progress Mining Syndicate together with the Mr Stone. It is averred that Mr Mlilo is the Accredited Agent of the Syndicate. It is averred that at all material times Mr Mlilo was lawfully acting on behalf of the Progressive Mining Syndicate as its Accredited Agent.

According to Mr Mangena, the authority of an accredited agent in terms of section 61(3) of the Mines and Minerals Act [Chapter 21:04] relates with one’s dealing with the Ministry of Mines and not with third parties. An accredited agent of a syndicate is the contact person between the syndicate and the Ministry of Mines. It is argued that such an agent cannot purport to enter into tribute agreements with third parties, without the consent and participation of other syndicate members. Section 61 (3) of the Mines and Minerals Act provides as follows:

Every partnership or company which is the holder of a mining location shall at the time of registration register at the office of the mining commissioner the name of an accredited agent residing in Zimbabwe, and such agent shall, when registered, be personally responsible under this Act for all matters, acts and omissions in connection with such location in the same manner as if such location were registered in his name as his own property.

I do not read this empowering provision to mean that an accredited agent can without the consent and participation of other syndicate members enter and conclude tribute agreements with third parties. I am persuaded by Mr Mangena’s argument that in terms of section 61(3) an accredited agent is the contact person between the syndicate and the Ministry of Mines. It cannot be used to mean that such an agent can start embarking on a frolic of his own and start entering into tribute agreements without the consent and participation of other syndicate members. Such an accredited agent becomes responsible to the Ministry of Mines. To argue that Mr Mlilo could seal a tribute agreement with applicant, without the consent of Mr Stone unassailable. He cannot.

On the 20 April 2018, Progressive Mining Syndicate and Akenaka Mineral Solutions (Pvt) Ltd signed the Joint Venture Agreement. The preamble to the agreement is detailed and provides as follows:

Whereas Michael Peter Mlilo and Michael Christopher Stone trade as progress Mining Syndicate and they are jointly the holders of various claims. The parties have met and share a vision to unlock the potential in the clams held by the Syndicate.

And whereas the Syndicate and Michael Christopher Stone wishes to formally partner with the company through this Joint Venture Agreement.

Furthermore, the Syndicate agrees to transfer their joint held claims to the company in return for shares in the company and subject to the conditions hereunder.

Whereas 	Michael Christopher Stone agrees, subject to conditions mentioned hereunder to contribute the Penny P claim, Stamp Mill and Leaching Plant as well as any assets on the Syndicate claims and Penny P claim to the joint venture.

And whereas Michael Peter Mlilo also agrees to transfer any and all assets held by him on the claims to the company.

Now, therefore in consideration of the mutual covenants and promises contained in this agreement, the parties agree to be bound by the terms and conditions set out in the agreement.

Under the subheading “Purpose of the Agreement” the following appears, it says: the purpose of the agreement is to clarify:

The claims that are to be transferred to Akenaka Minerals Solutions (Private) Limited No. 1175/2017.

The conditions under which the claims are to be transferred;

The number of shares in the company that are to be transferred to the various parties.

The manner and the process by which the Penny P claim, Milling and Leaching plant are to be transferred to the joint venture.

Enumerate the assets which are to be transferred to the company.

This agreement further wishes to clarify the nature of the parties’ relationship and their responsibilities.

Clause 3.1 of the Joint Venture Agreement states that, “it is explicitly recorded that any and all claims held by the syndicate are to be transferred to the company. The claims are currently under due diligence and include but are not limited to the claims listed below. It is common cause that some of the claims referred to in the Joint Venture Agreement are those applicant and Mr Mlilo say are subject to the Tribute Agreement. The Joint Venture Agreement is a binding contract. It has not been cancelled.

Mr Mlilo does not dispute that he signed this joint venture agreement. His contention now is that the mining locations in question are owned by Progressive Mining Syndicate and do not belong to Akenaka Mineral Solutions third respondent. How could Mr Mlilo on 20 April 2018 sign a joint venture agreement with Akenaka Mineral Solutions, well knowing that in 2016 he signed a tribute agreement with applicant involving the same mining locations? This gives credence to Mr Stone unchallenged averments that the Tribute Agreement is fake.

Again, even if for a moment one were to accept the authenticity of the said Tribute Agreement, its process of renewal would still have been nullity. The purported agreement would have expired on 20 January 2019. If valid, that agreement required three months’ notice to be given for its renewal. Mr Mangena for the respondents argue that on the 20 January 2019 no notice was given to renew the said tribute agreement. It is argued that the purported notice was given on the 25 February 2020, more than a year after its expiry. The notice was thus invalid. The right to exercise the renewal was lost. The agreement could not be renewed on the basis of an invalid renewal notice. I agree.

Mr Mangena contends that having lost the right to renew the tribute agreement, applicant would have had to engage both Mr Mlilo and Mr Stone for a completely new one. That is not a process that could have been undertaken with only one member of the Progress Mining Syndicate, i.e. Mr Mlilo. In any event, the agreement could have not been entered into or renewed without 2nd respondent’s approval.

It is argued that in any event entering into a tribute agreement would have been in breach of the joint venture agreement which all the parties were aware of, i.e. Mr Mlilo and Mr Stone. By operation of the said joint venture agreement, Progress Mining Syndicate lost its rights to the concerned claims. Progress Mining Syndicate, represented by Michael Peter Mlilo, signed the joint venture agreement with Akenaka Mineral Solutions. Both Mr Mlilo and Mr Stone, the members of Progress Mining Syndicate signed that joint venture agreement. Both the said members agreed to have their syndicate claims transferred into the joint venture vehicle.

It is submitted that Mr Mlilo lost the right to deal with the claims, both as an individual and also through the syndicate the day he signed the joint venture agreement. The transfer of the claims to Akenaka Mineral Solutions is a separate issue. Mr Mlilo signed the joint venture agreement in terms of which he undertook to transfer the claims. The claims shall be transferred in terms of the agreement he signed.  Mr Mlilo and Mr Stone’s interest in the claims is now through the joint venture agreement. Mr Mlilo cannot have it both ways, sign and surrender his claims to the Akenaka Mineral Solutions, and also purport to deal with the same claims outside the company. This is unattainable.

The argument that applicant believed that Mr Mlilo in purporting to renew the alleged Tribute Agreement was adequately empowered to act on behalf of Progress Mining Syndicate is not borne out by the facts of this case. On the 26 June 2018 Akenaka Mineral Solutions (Pvt) Ltd addressed a letter to applicant and I reproduce the letter in full:

We thank you for taking time to meet with our representative Mr Ted Gumbi.

Your subsequent letter was well received and noted by all board members.

We are in the final stages of concluding an extensive due diligence on various claims. Part of our strategy is to increase our milling capacity while simultaneously increasing our core production.

Our CEO, Gumbi will be our spokesperson and will be in contact with you regarding the implementation of our future growth strategy.

We look forward to a long standing working relationship for the mutual benefit of both our companies.

I trust that this letter be hand delivered to you by Mr Teddy Gumbi.

I look forward to meeting you in the foreseeable future.

John levy (Chairman)

The letter is clear that the person to deal with was Mr T. Gumbi, of Akenaka Mineral Solutions.  Applicant cannot aver that it dealt with Mr Mlilo, believing that he was adequately empowered to act on behalf of Progress Mining Syndicate. It was not for Progress Mining Syndicate to deal with anymore, but Akenaka Mineral Solutions (Pvt) Ltd. The person to deal with was Mr Gumbi. Applicant cannot pretend to have been unaware of this development, the letter of the 26 June 2018 is on this point.

On the facts of this case there could neither have been a tribute agreement nor its renewal between applicant and Progress Mining Syndicate. To accede to its application would be to undermine completely the principle that there should be finality to litigation. The reasons put forward by the applicant for rescission are wholly unsatisfactory and insufficient. Applicant has not shown good and sufficient cause to disturb the consent order granted by this court.

I comment briefly on the order sought by the applicant that the interim relief prayed for by respondents in case number HC 320/2020 be granted in lieu of the consent order. What is before this court is an application to set aside the consent order granted by this court. This court cannot start to substitute the consent order it granted with another order. I take the view that it is only an appeal court that can do what applicant is seeking. This court is not sitting as an appeal court. It would be irregular to accede to this request sought by the applicant.

As a result of the above, the applicant has no bona fide prospects of success on the merits. It has not shown good and sufficient cause to set aside the consent order granted by this court in case number HC 320/20.

The respondents have claimed that the application should be dismissed with costs on a legal practitioner-and-client scale. It has been argued that this application frivolous and vexatious.  The application lacks merit, but is not frivolous and vexatious to attract the rebuke of this court by way of costs on a legal practitioner and client scale.

Disposition

I take the view that applicant has failed to establish a good and sufficient cause to set aside the consent order granted by this court in case number HC 320/20.  In the result, I order as follows: the application is dismissed with costs on a party and party scale.

Sengweni Legal Practice, applicant’s legal practitioners

Coghlan and Welsh, respondents’ legal practitioners