Lescaut Investments (Pvt) Ltd and Breckridge Investments (Pvt) Ltd v Danangwe District Youth in Mining Cooperative Society and Minister of Mines and Mining Development

### Preamble
1
HH 450-18
HC 3951/18
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LESCAUT INVESTMENTS (PVT) LTD

and

BRECKRIDGE INVESTMENTS (PVT) LTD

versus

DANANGWE DISTRICT YOUTH IN MINING COOPERATIVE SOCIETY

and

MINISTER OF MINES AND MINING DEVELOPMENT

HIGH COURT OF ZIMBABWE

MATHONSI J

HARARE, 10 July 2018 & 25 July 2018

Opposed application

Z Lunga, for the applicants

FM Katsande, for the 1st  respondent

MATHONSI J: The two applicants are sister companies. In fact the second applicant is a management vehicle of the first applicant and they are represented by Michael Fowler who doubles up as a director of both of them. He has deposed to the founding affidavit in support of this summary judgment application on behalf of both of them. They seek an order for the eviction of the first respondent, a mining cooperative currently in occupation of and mining gold claims registration numbers 12731G, 12734G and 21715 BN situated in Chegutu, from those mining claims. The application is opposed by the first respondent which has not been lacking at all in raising perceived defences including 2 points in limine taken by Mr Katsande who appeared on the first respondent’s behalf.

In HC 3405/18 the applicants instituted summons action against the first respondent for eviction from the mining claims on the basis that the first respondent was in unlawful occupation of the mining location which is registered in the applicants’ names and therefore belongs to the applicants. The first respondent entered appearance to defend prompting the applicants to bring this summary judgment application as they believe the respondent does not have a bona fide defence to the claim and that appearance to defend was entered for dilatory purposes. The first respondent opposed the application.

In his founding affidavit, Michael Fowler states that he is a director of the first applicant, the managing director of the second and that he is authorised to depose to the affidavit by virtue of his position as such as well as by resolutions of the applicants purportedly attached to the founding affidavit. Unfortunately Fowler omitted to attach the resolutions in question, a circumstance lurched on to by the first respondent in an effort to defeat the application. I shall return to that issue later in this judgment.

Fowler went on to say that the first applicant is the registered holder of gold claims numbers 12731G, 127313G, 12734G and 21715BM and duly attached copies of the 3 certificates of registration after transfer in favour of the first applicant in terms of which it holds title. He stated that members of the first respondent cooperative occupied the location in 2012 without the authority and permission of the applicants. That situation was however later rectified when the parties engaged each other and signed an agreement on 2 December 2016 permitting the first respondent to mine the claims for a fixed period of 6 months. He attached a copy of the agreement encapsulated in a letter of that date written by Fowler on behalf of the second applicant. It reads in pertinent part:

“5.3 The temporary arrangement between the parties shall be subject to a maximum of 6 (six) 	months, commencing at the date of this letter (“the duration”), which thereafter, this letter 	and the material terms herein shall no longer apply.

5.4.	Breckridge shall, within reason, endeavour to complete its geological survey; and

5.5	Once Breckridge has completed its geological survey, the parties shall, in good faith,

resume negotiations regarding a tribute agreement herein.”

Fowler stated that negotiations between the parties did not yield anything as a result of which no tribute agreement was ever concluded between the parties. The first applicant no longer wishes to grant the first respondent a tribute agreement. Instead it intends to undertake substantial capital injection of over $10 million for it to mine the claims itself. In pursuance of that the first respondent was formally notified on 28 February 2018 to cease mining activities and vacate the location. It refused and continued mining resulting in this litigation.

Fowler said the applicants’ claim for eviction is premised on s 169 of the Mines and Minerals Act [Chapter 21:05]. Alternatively they rely on the rei vindicatio to recover their mining claims which the first respondent now occupies and mines without their authority. In the absence of a tribute agreement concluded by the parties, the first respondent cannot lawfully occupy the location and conduct mining activities on it.

In its opposition, through the affidavit of Steward Luckford its chairman, the first respondent raised a preliminary point that the proceedings in this matter should be stayed until such time that the applicants have settled its costs in respect of separate matters namely HC 245/18, HC 2636/18 and HC 3045/18 which were withdrawn by the applicant in those matters. This is because the applicant therein, although not any of the 2 present applicants, in fact the applicant in those matters is Dallaglio Investments (Pvt) Ltd, the 3 are sister companies. As such the sins of Dallaglio, a separate legal persona, should be visited upon the present applicants. They should not be afforded audience by this court until they have settled the costs.

On the merits of the case, the first respondent said a lot of things like how the applicants deliberately stalled the process of securing a geological survey thereby preventing the commencement of negotiations for a tribute agreement. It also spoke of the applicants having been untruthful in their claim that they moved onto the location unlawfully insisting that it was done with the knowledge and consent of the first applicant. However, as correctly contended by Mr Katsande, the only basis for contesting the eviction according to the first respondent, is that it effected what it calls “massive infrastructural development, the value of which now necessitates assessment by an independent evaluator.” Unfortunately no attempt whatsoever is made to particularise what that infrastructural development is or indeed to give an estimate as to its value, the first respondent being content to leave the claim as vague as that.

At the hearing of the matter Mr Katsande for the first respondent took 2 points in limine. The first one is that Dallaglio Investments (Pvt) Ltd, a member of a group of companies to which the 2 present applicants belong, owes the first respondent some wasted legal costs in respect of certain applications which it withdrew. This court has a discretion to order a stay of the present proceedings until such time that those costs, which are yet to be taxed, have been taxed and then paid.

It became apparent during my engagement with Mr Katsande that the point in limine had not been well thought out. The costs in question are not owed by the applicants but by a separate legal entity enjoying a personality of its own by virtue of the separate legal persona principle which is the cornerstone of our company law. Its debt and liabilities cannot be visited upon the doorstep of these applicants. In any event those costs are not due yet because they are in the process of being taxed and there is nothing to suggest that the liable entity is unwilling to settle the costs. Seeing the light rather late, Mr Katsande abandoned that point in limine.

He was however not done as he came up with a second point in limine namely that the founding affidavit is fatally defective by reason that Michael Fowler, the deponent of the founding affidavit, did not attach the resolutions of the directors of the applicant’s authorising him to represent them in the suit. Mr Katsande submitted that because the applicants omitted to attach the resolutions in question there is no proof that Fowler is authorised to represent the applicants. A company, being a separate legal person, cannot be represented by an unauthorized person. Further, an applicant for summary judgment must place himself or herself within the four corners of r 64 of this court’s rules. Without proof of authority the application is fatally defective and must be dismissed.

Mr Lunga for the applicants conceded that there was an oversight on their part in that they omitted to include the resolutions among the annexures to the founding affidavit. He however took the view that the omission is not fatal to the application by reason that, apart from adverting to the resolutions as the authority for deposing to the affidavit, Fowler did indicate that he was authorised to do so also by virtue of his position as a director of the first applicant and the managing director of the second applicant. I agree. In fact l have pronounced myself quite clearly on that point previously. See African Banking Corporation of Zimbabwe Ltd v PWC Motors (Pvt) Ltd & Ors 2013 (1) ZLR 376 (H) at 379G, 380 A – B.

In that case a similar point in limine had been taken in a summary judgment application for failure by the deponent of the founding affidavit to attach a resolution of the company authorising him to litigate on the company’s behalf. It had then occurred to me, as still it does, that in terms of r 64 (2) of this court’s rules an application for summary judgment must be supported by “an affidavit made by the plaintiff or by any other person who can swear positively to the facts” verifying the cause of action and stating that in his belief there is no bona fide defence to the action. As much as there is authority for demanding that a company official must produce a resolution, that form of proof is not necessary in every case. Each case must be considered on its merits. The court is only required to satisfy itself that there is enough evidence pointing to the fact that it is indeed the company which is litigating and not an unauthorized person and where the deponent of the affidavit states that he or she has the authority of the company to represent it, there is no need for the court to disbelieve that unless it is shown evidence to the contrary. Where no such contrary evidence is produced, the omission of a company resolution is not fatal to the application. I have no reason to depart from that pronouncement and firmly stand by it.

Mr Katsande did not point to any evidence suggesting that it is not the applicants who are litigating. In fact the point was only taken from the bar as it had not been adverted to in the opposing affidavit. It should have been raised in the opposing affidavit in order to put the applicant on notice to avail the resolutions to the first respondent’s satisfaction. It is for those reasons that 1 concluded that the omission to attach the resolutions was not fatal to the application especially in a case such as the present where the point taken in limine was of no moment at all given that r 64 (2) allows any person who can swear positively to the facts to depose to an affidavit in support of a summary judgment application. I rejected the point in limine.

Mr Lunga for the applicants submitted that the summary judgment application is premised on s169 of the Mines and Minerals Act and alternatively on the rei vindicatio given that the first applicant is the registered owner of the mining claims entitled to vindicate against the whole world. As 1 have said the first respondent’s only defence is a perceived improvements lien in respect of alleged improvements which it has not even began to set out content to only refer to “massive infrastructural development” and nothing more. Mr Katsande for the first respondent submitted that the first respondent is not required to prove a defence but only to allege one in order to defeat an application for summary judgment. As shall become apparent shortly the authorities do not favour that argument.

In terms of s 169 of the Act every holder of a registered block of precious mental reef claims possesses an array of mining rights including the exclusive right of mining the claim. To the extent therefore that the first applicant is the registered holder of the claims, it is entitled, by operation of law, to occupy and mine them. The first respondent is not such holder, and by its own admission, it has not entered into a tribute agreement with the holder to occupy and mine the claims. Prima facie, the first respondent is in illegal occupation and is mining illegally.

The only question which remains is whether the first respondent can rely on an improvements lien to ward off the action for eviction. To begin with, in order to uphold such a lien the court must be satisfied that indeed there were improvements that were effected. In my view it is not enough to merely state that improvements were effected without stating what they are and their estimated value. This is because the court must indeed be satisfied that the property has been increased in value by the industry of the person asserting the lien. See Rhoode v De Kock [2012] ZASCA 179. The first respondent has produced no acceptable evidence pointing to the fact that it improved the value of the property and cannot resist ejectment on the basis of vague assertions.

While summary judgment is an extra ordinary remedy as it deprives the defendant who has indicated a desire to defend an action the right to do so in defiance of the audi alteram partem rule, it is deliberately provided for in the rules in order to thwart mala fide defendants intent on frustrating just claims. A plaintiff whose case is unassailable should be accorded the gateway to judgment instead of baby-sitting a mala fide defendant just to appear to satisfy the audi alteram partem rule. As stated by ZIYAMBI JA in Kingston Ltd v L D Ineson (Pvt) Ltd 2006 (1) ZLR 45 (S) at 458 F and 459 A:

“Not every defence raised by a defendant will succeed in defeating a plaintiff’s claim for summary judgment. Thus what the defendant must do is to raise a bona fide defence – a ‘plausible case’ – with ‘sufficient clarity and completeness to enable the court to determine whether the affidavit discloses a bona fide defence.’ He must allege fact which, if established ‘would entitle him to succeed---. If the defence is averred in a manner which appears in all circumstances needlessly bald, vague or sketchy, that will constitute material for the court to consider in relation to the requirement of bona fide.”

In my view that is where the first respondent fell short. To say that there was “massive infrastructural development”, without more, lack sufficient clarity and completeness. It is in fact needlessly bald, vague and sketchy. It points to a lamentable lack of bona fides. The first respondent has therefore failed to resist the summary judgment application which, in my view, is meritable.

In the result, it is ordered that;

Summary judgment be and is hereby entered in favour of the applicants for the eviction of the first respondent and all those claiming occupation through it from gold claims registration numbers 127321 G, 12734 G and 21715 BM situated in Chegutu.

The first respondent shall bear the costs of suit.

Lunga Attorneys, applicant’s legal practitioners

F. M. Katsande and Partners, 1st respondent’s legal practitioners