Judgment record
Songxiang Industry Investments (Pvt) Ltd v Simon Chivere and Lugania Investments (Pvt) Ltd and Rose Natalie Heuer and Minister of Mines and Mining Development (N.O) and Officer in Charge – Zimbabwe Republic Police Mashava Policestation (N.O)
HH 484-18HH 484-182018
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1
HH 484-18
HC 6533/18
1. SONGXIANG INDUSTRY INVESTMENTS (PVT) LTD
versus
SIMON CHIVERE
and
LUGANIA INVESTMENTS (PVT) LTD
and
ROSE NATALIE HEUER
and
MINISTER OF MINES AND MINING
DEVELOPMENT (N.O)
and
OFFICER IN CHARGE – ZIMBABWE
REPUBLIC POLICE MASHAVA POLICESTATION (N.O)
2. LUGANIA INVESTMENTS (PVT) LTD HC 6440/18
versus
ROSE NATALIE HEUER
and
THE PROVINCIAL MINING DIRECTOR
and
THE MINISTER OF MINES AND MINING DEVELOPMENT
HIGH COURT OF ZIMBABWE
MUZOFA J
HARARE,13,18, 19 and 25 July 2018 &15 August 2018
Urgent Chamber Application
1. C. Daitai, for the applicant
I. Mataka, for the 1st and 2nd respondents
No appearance for 3rd respondent
P. Macheka,for the 4th respondent
2. I.Mataka, for the applicant
J. Tshuma,for the 1st respondent
No appearance for the 2nd and 3rd respondents
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HC 6533/18
MUZOFA J: The two urgent chamber applications were consolidated upon request by
parties, on the basis that the parties are substantially the same and the resolution of one
application has a bearing on the outcome of the other. For convenience l will refer to parties by
their names.
The background to the case which is undisputed is as follows.Rose Natalie Heuer “Rose”
is the owner of several mining claims collectively known as Empress Mine in Mashava. Lugania
Investments (Pvt) Ltd ‘Lugania’ is a registered company in terms of the law. Lugania entered
into a tribute agreement with Rose to mine at Empress Mine. The tribute agreement expired and
the parties entered into an agreement of sale. The agreement of sale is subject of a pending
matter HC 5673/18 in which Lugania seeks transfer of the mining claims from Rose. Simon
Chivere “Simon” was or is one of the shareholders in Lugania. There is an agreement of sale
wherein Simon together with two other shareholders inLugania, sold their entire shareholding in
the company to Songxiang Industry Investments (Pvt) Ltd “Songxiang”. The sale agreement is
subject of a pending matter under HC 172/18 wherein Simon seeks cancellation of the agreement
of sale.
In case HC 6533/18 Songxiang approached the court on an urgent basis seeking
spoliatory relief and an interdict as follows;
That you show cause to this Honourable Court why a final order should not be made in
the following terms;
Terms of Final Relief Sought
1. The 1st respondent, his agents and assignees be and are hereby interdicted from entering,
taking over operations or interfering in any manner whatsoever with the applicant’s
lawful operations at Empress Mine until the determination of HC 172/18 in his favour or
unless he is authorised to do so by any competent court.
2. Pending determination of HC 172/18 and HC 5673/18 the 4 th respondent’s decision to
stop the applicant’s lawful operations at Empress Mine be and is hereby set aside.
3. The 1st respondent shall pay legal costs on a legal practitioner-client scale.
Interim Relief Granted
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HC 6533/18
That pending the determination of this matter on the return day, the applicant be and is
hereby granted the following relief:
1. The 1st respondent, his assignees and agents be and are hereby ordered to return
possession and control of Empress Mine to the applicant upon service of this order.
2. The 1st respondent, his agents and assignees be and are hereby interdicted from entering
Empress Mine without the authority of the applicant or interfering in any manner
whatsoever with the applicant’s lawful operations at Empress Mine until the
determination of HC 172/18 in his favour.
3. Pending determination of HC 172/18 and HC 5673/18 the applicant be and is hereby
granted authority to carry out lawful mining operations at Empress Mine.
4. The 1st respondent shall pay legal costs on a legal practitioner-client scale.
Songxiang claims that, on the 4 th of July 2017 it bought the entire shareholding in
Lugania from Simon and the two other shareholders. It paid in full the purchase price of
US$1 500 000, upon signing of the agreement it took control and management of the mining
claims under Lugania. The owner of the mining claims Rose was aware of this take over.
Sometime in April 2018 Simon claimed he had not sold his shareholding in Lugania and
instituted legal proceedings in this Court for the cancellation of the agreement of sale under HC
172/18. Despite the pending matter Songxiang continued to be in control of the operations in
Lugania. To Songxiang’s surprise, before the determination of HC 172/18, on 6 July 2018 Simon
took over the control of the company without a court order or even Songxiang’s consent. Simon
claimed to be the majority shareholder. Following this takeover, Songxiang says it reported the
matter to the police at Mashava Police Station and parties engaged but no amicable solution was
found. On the 9th of July 2018, Simon started the process of elution of gold that was mined by
Songxiang; Simon was likely to convert the proceeds of the sale of gold to his own use thereby
prejudicing Songxiang causing irreparable harm. On the same day a letter was written to Simon
by Songxiang’s legal practitioners to cease the activities he had engaged in at Lugania buthe did
not respond. To that extent Simon resorted to self help and despoiled Songxiang.
The application was opposed. Simon deposed to an opposing affidavit in his capacity as
first respondent and on behalf of Lugania. Simon’s authority to represent Lugania has been
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HC 6533/18
challenged in HC6440/18. I shall not delve into that challenge because in this matter he deposed
the affidavit in his personal capacity too. Simon averred that the application is not urgent on two
fronts. Firstly that Songxiang has no legal right to make any claim in Lugania because it was not
involved in the sale of Empress Mine. In any event the sale has not been concluded and is subject
of litigation under HC 5673/18 and no rights accrue to Songxiang, the applicant. On the second
front he alleged that, the need to act arose on the 3 rd of May 2018 when Songxiang was served
with summons under case HC 172/18 in which he seeks cancellation of the purported sale of
shares to Songxiang. Further to that, that Songxiang should not have proceeded by way of
application since there are material disputes of fact that require being resolved by way of
evidence.
On the merits various issues were raised. That the agreement of sale was of no legal force
for non compliance with relevant regulations, that Songxiang paid for 35% of the shares and that
Simon signed the agreement of sale while on a hospital bed. He states that Songxiang could not
have taken control of Lugania in July 2017 when Empress Mine had not yet been transferred into
Lugania’s name.Rose is the legal owner of the mine and Songxiang has no rights in the mine.
Simon denied that he despoiled Songxiang at all. He stated that he has been in control of the
company carrying on mining operations at Empress Mine with the knowledge of Songxiang.
Rose the 3rd respondent opposed the application too. She stated that she is the owner of
Empress Mine. She entered into a sale agreement with Lugania. Lugania has since breached the
conditions of sale and she has cancelled the agreement. A counterclaim shall be made for
confirmation of the cancellation in HC 5673/18.Currently Lugania has no right to mine because
the sale agreement has been cancelled and that right has been taken away by the 4 th respondent
‘the Minister’.
For the 4th respondent “the Minister” it was submitted that Lugania has no right to mine at
Empress Mine. As the administrator of mines it knows Rose as the lawful holder of mining rights
at Empress Mine. Lugania can only mine at Empress Mine if it has a tribute agreement with Rose
or where it is the legal owner. Lugania has no such rights. The Court was referred to Section 275
(6) (a) of the Mines and Minerals Act. It was said an agreement of sale is not enough. No
pleadings were filed in respect of the 5th respondent.
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HC 6533/18
I am satisfied on urgency. This is because where a party alleges spoliation, there is an
urgent need to stop the unlawful conduct and self-help and restore the status quoanteuntil the law
has taken its course. In this case, if indeed Songxiang purchased the whole shareholding in
Lugania in July 2017 and took control of the company and Simon without authority took control
of Lugania on 9 July 2018, then there could be a valid basis for the matter to be head on an
urgent basis.
I do not believe the need to act arose in May 2018 when the applicant was served with the
summons in HC 172/18. The need to act could only arise when Simon purportedly took over
the control of Luganiawhen Songxiang was in peaceful possession or control of Lugania. This is
an appropriate case to be heard on an urgent basis. `
This is primarily a dispute between the shareholders of Lugania over its control and
ownership.
Spoliation
In an application for spoliation relief, the onus is on the applicant to prove that it was in
peaceful possession and was dispossessed. The relief sought in such an application is final in
effect and therefore the onus on the applicant is on a balance of probabilities. HERBSTEIN J in
Kramer v Trustees Christian Coloured Vigilance Council, Grassy Park 1948(1) SA 748(C), at
753 said:
". . . two allegations must be made and proved, namely, (a) that applicant was in peaceful and
undisturbed possession of the property, and (b) that the respondent deprived him of the
possession forcibly or wrongfully against his consent"
ADDELSON J in Bennett Pringle (Pty) Ltd v Adelaide Municipality 1977 D (1) SA
230(E), at 233 observed that:
". . . it is not necessary that the possession be continuous, either by the claimant or his servants, if
the nature of the operations which he conducts on the premises do not require his continuous
presence In terms of all the authorities cited, the 'possession', in order to be protected by a
spoliatory remedy, must still consist of the animus - the 'intention of securing some benefit to' the
possessor; and of detentio, namely the 'holding' itself . . . If one has regard to the purpose of this
possessory remedy, namely to prevent persons taking the law into their own hands, it is my view
that a spoliation order is available at least to any person who is (a) making physical use of
property to the extent that he derives a benefit from such use; (b) Intends by such use to secure
the benefit to himself; and (c) is deprived of such use and benefit by a third person."
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HC 6533/18
In Runsin Properties (Pty) Ltd v Ferreira 1982(1) SA 658(SE), at 670, the same learned
judge said this on how the court should approach this remedy:
"The essence of the remedy by way of spoliation is that it is a robust one. Discretion and
considerations of convenience do not enter into it."
In relation to what rights have to be determined in Oglodzinski v Oglodzinski 1976 (4) SA
273(D) at 274LEON J had this to say:
"In a spoliation application the Court does not decide what - apart from possession - the rights of
the parties to the spoliated property were before the act of spoliation but merely orders that the
status quo be restored."
The requirement that the respondent's act of dispossession was unlawful can be met by
showing that the respondent despoiled without recourse to a court of law and without the
applicant's consent.
In this case the first issue for determination is whether Songxiang was in peaceful
possession or control of operations at Lugania. As properly submitted for Lugania, there are
material disputes of fact as to whether Songxiang bought the whole shareholding in Lugania and
thereafter took control of operations. Songxiang, the applicant said it bought all the shares in
Lugania in July 2017 and attached the purported sale agreement and the proof of payment. There
are material disputes as to whether the agreement of sale isperfecta. Whether the sale agreement
was perfecta is relevant as it is the basis upon which Songxiang claims it took control of
Lugania. Songxiangjust alleged that it took control of Lugania in July 2017 there is nothing to
support this averment. This was necessary in the light of Simon’s averment that Songxiang only
paid for 35% shareholding, that on 18 July 2017 the three shareholders in Lugania confirmed
such shareholding and produced a document confirming this position. If this were so then
Songxiang could not take control of all the operations. Most importantly, Simon indicated that he
has always been in control of Lugania. Lugania attached to its opposing papers a letter dated 11
August 2017 advising AMB (Global) of itsshareholding, and that one Xiang Pigang was
appointed a director with a 35% shareholding. The letter was signed by all the three shareholders
that sold the shares to Songxiang. A letter dated 23 August 2017 signed by Simon as director and
chairman of Lugania to Xiang Pigang was also attached. The letter advised Xiang Pigang of his
appointment as director and holder of 35% shares in Lugania and the requirements to be met to
regularizeoperations.
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HC 6533/18
The letters contradict Songxiang’s assertion that it took control of Lugania in July 2017
for by August 2017 the understanding was that it was a holder of 35% shares only. Xiang Pigang
was one of the directors. Beyond the said letters there is nothing to show who was in control of
Lugania. It can only be inferred that by then Songxiang and the other three shareholders were on
board.
There is no information how Simon took over operations at Lugania, what exactly did he
do. This information could only be provided by a person who was present on 6 July 2018. The
deposer of the affidavit for Songxiang does not say he was present on 6 July 2018 to explain how
the takeover took place. It is necessary in such an application to file supporting affidavits to
confirm the averments set out in the founding affidavit see Swimming Pool and Underwear
Repair (Pvt) Ltd&Others v Jameson Rushwaya & Another SC 32/12. Nothing was filed to
confirm the events of the 6th of July. Songxiang’s application was not supported and it remained
a bare allegation. The onus is on Songxiang to show that it was in peaceful possession and it was
dispossessed. No affidavits were attached to confirm such possession and the dispossession.
It was submitted that Simon did not deny that he was involved in the elution of gold process at
Lugania. Indeed this was not denied, what the applicant overlooked is that Simon said he has
always been at Lugania, operating there. It therefore follows that the elution of gold on 9 July
2018 was just but part of operations.
I did not hear Songxiang make any meaningful submissions on the apparent disputes of
fact that presented themselves in this case and the procedure adopted. The applicant was content
to proceed with the matter under such circumstances. In Manduna v Mutizwa 1992 (2) ZLR
90(SC) in a matrimonial case where the husband alleged spoliation the wife disputed that he was
in control of the property. The Court accepted that there was a dispute of fact that could not be
decided on the papers. It is my view that in this case there are material disputes of fact that
cannot be resolved on paper as to the control of Lugania.
I am satisfied that Songxiang has failed to show that it was in peaceful possession or
control of Lugania and was dispossessed on the 6thof July 2018 and cannot grant the spoliatory
relief sought. Songxiang failed to discharge the onus placed on it by the law.
Interdict
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HC 6533/18
For an applicant to succeed in an application for an interdict it should show.
(a) A prima facie right even if it is open to doubt.
(b) An infringement of such right by the respondent or a well-grounded apprehension of
such an infringement.
(c) A well-grounded apprehension of irreparable harm to the applicant
(d) The absence of any other satisfactory remedy.
(e) The balance of convenience favours the granting of the interlocutory interdict. See
Setlogelo v Setlogelo 1914 AD 221
In this case the right that Songxiang has to show, is the right to operate or mine at
Empress Mine.
According to Songxiang, it bought all the shareholding in Lugania. A copy of the
agreement of sale was produced which show that Simon and two other shareholders in Lugania
sold all their shareholding. The price and method of payment was agreed on. The applicant also
produced the proof of payments. Although the agreement has been challenged by the first
respondent, for the purposes of this case it remains valid and binding until the cancellation has
been confirmed by a competent court.
The agreement of sale is prima facie evidence of Songxiang’s right in Lugania whether
its shareholding is 35% or 100%.The terms of the interdict indicate that Songxiang seeks to
prohibit Simon and his agents from interfering with its lawful operations at Empress Mine. In
other words that Simon does not interfere with operations atLugania. Songxiang therefore speaks
on behalf of Lugania. The prima facie right to be established is Lugania’s right to operate.
However it is not Lugania that is seeking the relief it is Songxiang a shareholder which is
inappropriate.
Rose’s objection is unsustainable. This is because Rose and Lugania entered into a sale
agreement. This sale agreement is still extant until its cancellation is confirmed by a competent
court. Clause 6 of the agreement provides:
“6. Risk Profit and Loss
The risk, profit and loss in the claims shall pass from the seller to the purchaser on payment of
the first instalment referred to above and from that date the purchaser shall be entitled to all
profits (in any) accruing from the claims and shall be liable for all fees, taxes and other expenses
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and imports levied thereon and all other expenses of whatsoever, nature, in respect of the said
claims however that it is hereby agreed …..”.
According to Rose the first instalment was paid.The consequences of the payment
therefore were triggered in terms of clause 6. Whether Lugania eventually breached the other
conditions to entitle cancellation is not for this court to determine. Rose’s objection therefore
cannot defeat this application.
However it is not in dispute that the Minister through the Provincial Mining Director
suspended underground operations at Empress Mine on the 17th of April 2018. A reading of the
letter suspending the underground operations shows that Empress Mine was expected to meet
certain conditions before it can be given authority to resume underground operations. In the
event that the conditions are met the operations may resume. I do not believe that the mining
rights were taken away in toto what transpired is an operational issue that could be addressed.
What Songxiang seeks is to conduct lawful mining operations. My understanding of that is that it
cannot conduct underground operations without the Minister’s authority.
The submissions made for the Minister were not controverted. Songxiang neither
produced a valid tribute agreement nor a certificate of registration from the Mining
Commissioner in terms of s 275 of the Act to demonstrate Songxiang’s right to mine at Empress
Mine. In any event Songxiang by itself has no rights in Empress Mine, whatever dealings for the
mining that took place were between Lugania and Rose and this application is not made by
Lugania but by Songxiang a separate legal persona. Where there is no prima facie right no
interdict can be granted.Songxiang is not Lugania, these are two separate legal personalities
where one is a shareholder in the other.
By mining at Empress Mine without a tribute agreement or a certificate of registration
Songxiang would be acting outside the law. It is trite that litigants who act outside the law cannot
approach the courts for relief until they have complied with the law CFU and Ors v Minister of
Lands and Ors SC 31/10. The court cannot be seen to aid and abet an illegality.
The order sought in terms of paragraph 3 of the provisional ordercannot be granted on account of
the foregoing reasons. Songxiang has not shown that it has any right to mine at Empress Mine.
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HC 6533/18
The company that entered into an agreement with Rose is Lugania and it is not synonymous with
Songxiang.
There is no merit in the application.
In case HC 6440/18 Lugania is the applicant and seeks an order in the following terms.
That you show cause to this Honourable Court why a final order should not be made in the
following terms;
Terms of Final Order Sought
(a) That 2nd respondent should not issue applicant with a resumption certificate for the
applicant to resume operations at Empress Mine, following compliance by the
applicant and inspection of underground workings thereon by 3 rd respondent’s Mines
Inspection Personnel
(b) 2nd respondent be and is hereby ordered to issue the applicant with the resumption
certificate to resume underground operations in terms of the 3 rd respondent’s Mines
inspection personnel’s report.
(c) 2nd respondent be and is hereby ordered to comply with the mining laws when
discharging the mandate on behalf of the 3 rd respondent in the transactions between
the applicant and 1st respondent for disposal of mining claims as per the mining
claims as per the agreement of sale dated 7 September 2017 between the applicant
2017 between the applicant and 1st respondent.
Interim Relief Granted
(a) 2nd respondent be and is hereby ordered to issue a certificate of resumption for
underground operations at Empress Mine Mashava.
(b) 2nd respondent be and is hereby ordered to comply with communication procedures
when officially communicating with the applicant relating to mining operations.
(c) The 2nd defendant be and is hereby ordered to pay costs of this application.
I inquired from Lugania’s legal representative whether it is competent for this Court to
regulate how an administrative body discharges its duties as to compel it to issue a certificate of
resumption. I asked because the second respondent the Provincial Mining Director “the
MiningDirector’ has to exercise his or her discretionon a properconsideration of pertinent issues.
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Certainly this Court cannot exercise that discretion on behalf of the Mining Director. Following
that enquiry an amendment was sought for the interim relief and final order to read;
“(a) 2nd respondent be and is hereby ordered to issue a written response to the applicant’s
letter dated 3rd of May 2018 for underground operations at Empress Mine Mashava.
(b) The 2nd respondent be and is hereby ordered to pay costs of this application.”
The application was not opposed and I granted it.
Simon deposed to an affidavit on behalf of Lugania and stated that Lugania and
Roseentered into an agreement of sale for the sale of mining claims collectively known as
Empress Mine. The Mining Director approved the sale agreement but the third respondent the
Minister’s permission was not sought. On the 17 th April 2018 the Mining Director suspended
underground operations at Empress Mine following a gassing incident that occurred
underground. Empress Mine was required to satisfy certain conditions before resuming
operation. According to him the requirements have sincebeen fulfilled and the Mining Director
by letter date 3 May 2018 was advised. However the Mining Director has neglected or refused to
issue a resumption certificate. Due to work stoppage ground water is rising, damaging shaft
lining. Lugania shall incur huge costs in pumping the water from underground. To that extent
Lugania would suffer irreparable harm.
The application was opposed. The first respondent “Rose” deposed to an opposing
affidavit. She stated that Simon has no authority to represent theLugania, no board resolution
was filed. In addition she states that there is a shareholder dispute within Lugania, Simon sold his
entire shareholding in Lugania to Songxiang. The application therefore has not been brought by
Lugania but by Simon. On the merits Rose said Lugania has no rights to operate or mine at
Empress Mine because it has failed to fulfil the conditions in the agreement of sale between the
parties. Rose has since advised the applicant of the cancellation of the agreement of sale and will
make a counter claim in the pending case HC 5673/18 for the cancellation of the agreement and
demand vacant possession of the mining claims and equipment. According to Rose the applicant
cannot seek a resumption letter to continue operations where it has no ownership rights to mine.
The application should be dismissed with costs de bonis proprii as against Simon who alleges to
represent Lugania yet he does not have the authority to do so.
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For Lugania it was conceded that no board resolution was filed but insisted that Simon
had authority to represent Lugania by virtue of his being a director and shareholder in Lugania.
As correctly submitted on behalf of Rose, the position of the law is that a companyis a
legal person separate from its directors, it cannot be represented by a person who has not been
authorised to do so by a board resolution Madzivire and Others v Zvarivadza and Others SC
10/06.In Burnstein v Yale 1958 (1)SA 768 cited in the Madzivire case the court noted that as a
general rule the directors of a company can only act validly when assembled at a board meeting.
It means therefore that a company can speak through a person appointed by its directors by way
of a board resolution. I am also cognisant of authorities that are for the proposition that where
there are sufficient facts placed before the Court to warrant a conclusion that it is the company
that is litigating the court can accept the representation in the absence of a board resolution
seeDirect Response Marketing (Pvt) Ltd v Shepherd 1993 (2) ZLR 218 (H), Thelma Court Flats
(Pty) Ltd v Mc Swigin 1954 (3) SA 457 (c), Parsons Barkly, Mall (Cape) (Pty) Ltd v Merino Ko-
operaise BPK 1957 (2) SA 347 (c). The common thread in these cases is that it is not always
necessary for a board resolution to be produced, the Court should satisfy itself that the company
is the litigant.
Applying both positions Simon cannot validly represent Lugania. There is no board
resolution giving authority to Simon to represent Lugania in this case. So he cannot speak on
behalf of Lugania. Considering the facts of this case the more reason a board resolution should
be filed. The shareholders are embroiled in a dispute of ownership of the company. It was
submitted for Simon that since there is conflict the directors could not meet. That then points to
the need for evidence that it is Lugania litigating otherwise one shareholder through its appointed
directors may be on a frolic of their own, in the process prejudicing Lugania. On that basis I am
not satisfied that it is Lugania that is litigating.
In light of the finding on the incapacity of Simon to represent Lugania it is unnecessary to
delve into the merits of the application .There is no litigant before the court.
Rose requested for costs against Simon and I agree with her. Since there is a dispute among the
directors of Lugania it is not proper to saddle the company with costs incurred by it due to a
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decision by one director. In this case Simon had no authority to litigate on behalf of Lugania, it
was his sole decision to litigate therefore he should pay costs on an ordinary scale.
From the foregoing the following order is made.
1. The application in HC 6533/18 be and is herby dismissed with costs.
2. The application in HC 6440/18 be and is hereby dismissed with costs to be borne by
Simon Chivere.
Messrs Magwaliba & Kwirira, applicant’s legal practitioners
Makonese, Chambati & Mataka, 1st& 2nd respondents’ legal practitioners