23
HH 205-2010
HC 6411/07
IN THE HIGH COURT OF ZIMBABWE
HELD AT HARARE
In the matter between:-
AFRICAN CONSOLIDATED RESOURCES Plc
and
DASHALOO INVESTMENTS (PVT) LTD
and
POSSESSION INVESTMENTS (PVT) LTD
and
HEAVY STUFF INVESTMENTS (PVT) LTD
and
OLEBILE INVESTMENTS (PVT) LTD
versus
THE MINISTER OF MINES AND MINING DEVELOPMENT
and
ZIMBABWE MINING DEVELOPMENT CORPORATION
and
THE COMMISSIONER OF POLICE
Opposed Application
HIGH COURT OF ZIMBABWE
HUNGWE J
HARARE, 25 August & 6 September 2010
Mr J Samukange, for the applicants
Mr F Mutamangira for the first respondent
Mr J Muchada for the second respondent
Mr JR Tsivama for the third respondent
HUNGWE J: This is an application for the rescission of a judgment of my own that I gave on 24 September 2009 in favour of the applicant’s regarding the legality of the registration of various mining claims in the names of the applicants. It is important that I set out the order which I gave then and what thereafter occurred leading to the present proceedings.
On 24 September 2009, I gave the following order:
“1. African Consolidated Resources plc claims issued to the third, fourth, fifth and sixth applicants within the area previously covered by Exclusive prospecting order 1523 held by Kimberlitic Searches (Pvt) Ltd are valid and have remained valid since the date they were originally pegged.
2. The right granted to the third respondent by virtue of the special grant shall not apply in respect of the African Consolidated Resources plc claims area as indicated on annexure ‘B’ to the papers. In that regard it is hereby ordered that third respondent cease all its prospecting and mining activities in the said area.
IT IS FURTHER ORDERED AS FOLLOWS:
3. That the second respondent returns to the applicants’ possession the 129 000 carats of diamonds seized from the applicants’ offices in Harare on 15 January 2007.
4. The second respondent returns to the applicants all diamonds acquired by the second respondent from the African Consolidated Resources plc claims area using the register kept by the second respondent in compliance with the Kimberley Process Certification Scheme.
5. That fourth respondent be and is hereby ordered to direct the police to cease interfering with the applicants’ prospecting and mining activities.
6. That first, second and third respondents pay applicants’ costs on a legal practitioner and client scale, the one paying the others to be absolved.
7. Any appeal noted against this order shall not suspend the operation of this order.”
The second and third respondents noted an appeal to the Supreme Court. They made a chamber application under SC 230/09 seeking to set aside para 7 of the above order. In SC 1/10 the Supreme Court issued an order effectively setting aside that paragraph. The appeal is, however, still pending in the Supreme Court.
In the meantime, on 28 April 2010, first respondent, through his legal practitioners, addressed correspondence to the registrar of this court seeking directions in terms of Rule 4C of the Rules of this Court. The relevant portion of that correspondence reads:
“3. In arriving at this decision (the order of 24 September 2009 above) the court determined the issue of the currency of De Beers 1520 and 1523 Exclusive Prospecting Orders, (“EPOs”) over the Marange area (“Marange”) and whether an application for the extension of EPO 1523 had the effect of reserving the ACR claims area from prospecting and pegging.
4. The court held that the EPO’s were invalid by reason of their expiration and that, consequently, the application for extension of EPO 1523 did not have the effect of reserving the ACR claims area.
5. The Court further held that the ACR claims area was open for prospecting and pegging at the time that ACR pegged and registered their claims, and further that the ACR claims were valid and remained valid from the date they were pegged.
6. In arriving at the decisions aforementioned, the ACR group concealed certain fundamental facts which completely disentitle the ACR group of the relief which the court granted. The ACR group fraudulently concealed the facts in order to gain an unfair advantage and for the purpose of procuring a favourable judgment. It is therefore our humble request that the Court, having regard to the fraud committed by the ACR group, give directions, on the proper course of action and procedure to be taken at law in order to procure the rescission of the Judgment procured by fraud.
7. We assert that the following facts were fraudulently concealed by the ACR group:-
7.1 The subsidiary companies; Dashaloo Investments (Private) Limited, Possession Investments (Private) Limited, Olebile Investments (Private) Limited, and Heavy Stuff Investments (Private) Limited (“the ACR subsidiaries”) did not exist at the time of the prospecting, pegging and registration of the mining title that is subject of the above matter.
7.2 section 20 of the Act provides that only a ‘person’ can be granted a prospecting licence. A ‘person’ in this context refers to a juristic person, so constituted by the act of incorporation, or a natural person;
7.3 It is clear that at the time that the Certificates of registration were issued to the ACR subsidiaries, there was no such person to who such certificates could be granted because all mining rights purportedly held by the ACR subsidiaries were acquired between 4 April and 19 June 2006, yet the ACR subsidiaries were incorporated on 29 June 2006 up to 14 July 2006, after the purported issue of the certificates of registration (mining claims);
7.4 … …………………………………………………………………………
7.5 ……………………………………………………………………………..
7.6 Further and more importantly, at the time of the ACR group pegged their claims, the Marange area was reserved against prospecting and pegging by virtue of the operation of Reservation Notice 1518 issued on 19 February 2004, which notice was posted on the Notice Boards of the Mining Commissioner’s offices in Mutare and Harare, and recorded in a ‘Reservation Notice Register’.
7.7 It is incompetent to acquire mining title through a prospecting licence or the pegging of claims in an area reserved against prospecting and pegging. The ACR group fraudulently concealed the fact of the existence of the reservation from the court and procured the registration of their claims by fraud……….
I directed the registrar to seek the other parties’ response to the request. On 19 May 2010 the applicants, through their legal practitioners, responded in the following terms:
“1. As the honourable judge has handed down his judgment and an appeal has been noted, the honourable judge is functus officio. He can no longer deal with the matter and indeed it is not ‘before him’ as contemplated in rule 4(C) of the High Court Rules. His decision in HC 6411/07 can only be considered by the Supreme Court on appeal.
2. Nonetheless our clients have requested that for record purposes we respond to the false allegations made on behalf of the Minister of Mines and Mining Development, without in any way conceding that they give rise to a need for directions in terms of rule 4(C) of the High Court Rules.
3. Our clients deny that they have fraudulently concealed that their subsidiary companies did not exist at the time the ACR claims were duly registered by the Assistant Mining Commissioner Mutare. When our clients decided to register the claims that had been pegged, they purchased shelf companies for this purpose from a local company, Paracor Company registration Services. This is common practice and indeed our client has purchased over 80 shelf companies from Paracor in this manner. Our clients were assured that the companies had been duly registered and accordingly they utilized the names of the shelf companies in order to obtain registration of the claims. To knowingly use unregistered companies would have been of no benefit to ACR and indeed would have been inexplicable in logic.
The Minister was however a party to case number HC 6411/07 and he filed opposing papers. In none of the opposing papers filed by him were any of these “new” and supposedly fraudulent issues mentioned, despite their existence at that time. It would seem that the reckless and unsubstantiated allegation of fraud is merely an attempt to conceal the incompetence and ineptitude on the part of the Minister in failing to mention these objections (which, surprisingly, now seem to have assumed huge importance).
4. Even if the shelf companies were incorporated a short time after the claims were registered in their names, there was no prejudice to the public interest. In Rajah & Rajah (Pvt) Ltd v Ventersdorp Municipality & Others 1961 (4) SA 402 (A) the Appellate Division considered a case where a trading licence had been issued to a company which had not been registered at the time the licence was issued. The court held that since there had been no intention to deceive on the part of the brothers who had applied for the licence in the name of the company, and in view of the fact that the municipality had failed to prove that there had been any prejudice or that it would be in the public interest to cancel the existing licence of the company, the licence would be considered valid………………………………..
5. Furthermore section 58 of the Mines and minerals Act provides for the barring of impeachment of title where a mining location has been registered for a period exceeding 2 years. It is not competent in terms of that section for any person to dispute the validity of title to the ACR claims on the ground that the pegging was invalid or illegal or the provisions of the Act were not complied with prior to the issue of the certificates of registration…………………………..
6. Our clients deny that when the ACR group registered the claims the Marange Area was reserved against prospecting and pegging in terms of RA 1518 that was purportedly issued in 2004. Minister does not admit, although he is well aware of it, that the Mining Commissioner, Harare purported to exercise her powers outside her area of jurisdiction. He also fails to disclose that notice of the said RA was not advertised in the Gazette as required by s.35(1) of the Act. …………. Further he does not disclose that in 2006 the Mining Commissioner Harare and the Mining Commissioner, Mutare recommended that the reserved area mentioned in RA 1518 “be extended” to include the Marange area and it was extended long after the ACR claims had been registered………..”
Upon careful consideration of the matters raised in both correspondences and having due regard to and mindful of the need for finality to litigation, I decided that it would not be in the interest of justice to ignore a party’s effort to draw the court to a possible fraud. I therefore directed that the first respondent files a court application in terms of Rule 449 of the esteemed Rules of Court dealing with the issues he raised in the correspondence. Consequently, papers were filed in which the first respondent seeks rescission of judgment on the basis that applicant had obtained a judgment favourable to its case by fraudulently suppressing certain information which would have disentitled it to the orders it eventually got in its favour.
The applicants strenuously oppose the application for rescission and raise five points in limine which, in the applicants’ view, ought to preclude this court from hearing the application. As I understood it, the first point raised on behalf of the applicants was that this court should not allow the respondents any audience since they come to this court with dirty hands. They had flagrantly and contemptuously refused to comply with the Supreme Court order of 25 January 2010. Mr Samukange who appeared for the applicants put this issue as follows:
“The Respondents have not complied with this order. They have not ceased all mining operations as ordered by the Chief Justice. They have gone further and auctioned the diamonds mined from Applicants’ claims, in total violation of the Chief Justice’s order. They have therefore approached the court with dirty hands. They should not be heard. The respondents have not shown respect for the rule of law. The principle for the rule of law is that court orders are obeyed, especially by the first respondent who took an oath to obey the laws of this country……..”
Mr Samukange submits that the respondents, by failing to comply with the order of the Supreme Court in the particular circumstances in which they have done so, have approached this court with dirty hands; and that by reason of that status they have forfeited the right to apply for any such indulgence as they now apply for. He relies for this submission on a number of cases. The first such case is an unreported 2005 judgment of this court in which reliance was placed on the American case of Tegan v Casaus (the citation of which is not given). He also placed reliance on a paragraph recited by the judge in the unreported 2005 judgment of this court from the judgment of De Waal J in the South African case of Mulligan v Mulligan 1925 WLD 164.
Secondly, Mr Samukange took the point that as this court had pronounced itself in the judgment of the 24 September 2009, this court was functus officio.
The third point taken by the applicants was that as the matter is under appeal in the Supreme Court, and since that court had made an order suspending the order of this court, then this court has no jurisdiction to entertain this application.
The fourth point in limine was that there is another pending matter i.e. HC 2230/10 brought by applicant against the respondents where first respondent’s decision is being challenged. First respondent can still raise these issues in that matter. In any event that matter deals with the same issues which are being raised here.