Rose Natalie Heuer v Songxiang Industry Investments (Pvt) Ltd and Minister of Mines and Mining Development, N.O

### Preamble
1
HB 250/20
HC978/20
---------


ROSE NATALIE HEUER

Versus

SONGXIANG INDUSTRY INVESTMENTS (PVT) LTD

And

MINISTER OF MINES AND MINING DEVELOPMENT, N.O

HIGH COURT OF ZIMBABWE

MAKONESE J

BULAWAYO 9 SEPTEMBER AND 5 NOVEMBER 2020

Opposed Application

Advocate L Nkomo, for the applicant

Advocate T Cherry, for the 1st respondent

MAKONESE J:	This is an application for leave to execute the judgment of this court in Rose Natalie Heuer v Lugania Investments (Pvt) Ltd and Others HB 84-20 handed down by MABHIKWA J on 21st May 2020 pending an appeal noted with the Supreme Court.

The applicant contends that the appeal noted by 1st respondent was filed without the bona fide intention of testing the correctness of the judgment but was noted for the sole purpose of buying time to enable 1st respondent to continue having its mining equipment at the applicant’s mining claims at Empress Mine in defiance of an extant judgment of the Harare High Court per MUZOFA J, in Songxiang Industry Investment (Pvt) Ltd v Chivere and Others; Lugania Investments (Pvt) Ltd v Heuer and Others HH 428-18.  Applicant prays that this court exercise its discretion in her favour and order that she execute the judgment in HB 84-20 despite the noting of an appeal by 1st respondent.  Applicant further contends that the balance of equities favours the granting of leave to execute pending appeal as there is no priority of contract between the applicant and 1st respondent in respect of Empress Mine.  It is further argued that 1st respondent has no locus standi to prevent applicant from carrying out mining activities at Empress Mine as applicant remains the registered owner of the mining claims.

1st respondent has opposed the application for leave to execute pending appeal under case number SC 209-20.  1st respondent avers that this court should decline to exercise its discretion to grant applicant leave to execute pending appeal.  1st respondent indicates that in matters of this nature the applicant has an absolute right to appeal and to test the correctness of the judgment appealed against and that by ordering execution, the whole object of the appeal would be stultified and consequently, the High Court would be usurping the functions of the Supreme Court if it ordered execution merely on the basis that, in its opinion the prospects of success were slim.  The purpose of the principle against execution pending appeal is generally to prevent irreparable him.  Each matter must however, be decided on its own merits and peculiar circumstances.

FACTUAL BACKROUND

Applicant is the registered owner of 14 gold reef mining claims in Mashava commonly known as Empress Mine.  On 27th March 2017 applicant entered into a written agreement of sale with an entity known as Lugania Investments (Pvt) Ltd (hereinafter referred to as Lugania).  In terms of clause 8 of the agreement of sale it is provided that in the event of the purchaser (Lugania) failing to make any payment on duedate the seller (applicant) shall have the right to cancel the agreement of sale and re-take possession of the mining claims.

Clause 28 of the agreement provides that Lugania shall not be entitled to let, cede, or assign its rights under the agreement of sale without prior written consent of the applicant and the Mining Affairs Board.  As fate would have it, Lugania breached the terms of the agreement by failing to pay the full purchase price despite repeated demands for it to do so.  Faced with the breach, applicant invoked the termination clause in the agreement of sale and gave Lugania written notice to remedy the breach within 21 days, failing which the applicant would cancel the agreement.  Despite receiving the notice of breach, Lugania failed to remedy its breach within the stipulated period, resulting in applicant serving Lugania with a notice of cancellation of the agreement of sale on 18th June 2018.  Lugania issued summons on 19th June 2018 out of the High Court Harare under case number HC 5673/18 against applicant, the Provincial Mining Director and the Minister of Mines and Mining Development.  Lugania sought an order granting it permission to sell the mining claims at Empress Mine.  Applicant entered appearance to defend and filed a counter-application seeking confirmation of the cancellation of the agreement.  It then emerged that there was a dispute between the shareholders of Lugania and 1st respondent wherein 1st respondent alleged that on 4th July 2017 it had purchased the mining claims from one Simon Chivere and other shareholders of Lugania and, that on the strength of the purchase of shares 1st respondent had taken possession and control of Empress Mine with effect from 4th July 2017. On 6th July 2018, Simon Chivere allegedly despoiled 1st respondent of possession of Empress Mine.  The dispute between 1st respondent and the shareholders of Lugania spilled into the courts.  1st respondent filed an urgent chamber application on 13th July 2018 at the High Court, Harare under case number HC 6533/18 against Simon Chivere, Lugania Investments, the applicant herein, the Minister of Mines and Mining Development and the Officer In Charge ZRP Mashava, seeking a spoliation order placing it in undisturbed possession of Empress Mine.

At about the same time 1st respondent filed an urgent chamber application under case number HC 6533-18, Simon Chivere filed an urgent chamber application at the High Court, Harare under case number HC 6440-18 against the applicant herein and other respondents, seeking an order compelling the issuance of a certificate to allow it to continue mining activities at Empress Mine.  The two urgent matters were consolidated and heard together before MUZOFA J.  In a judgment handed down on the 15th August 2018 the two urgent matters were dismissed with costs.  Following the judgment of MUZOFA J, the applicant as the registered owner sought to have access to Empress Mine.  Applicant was prevented from accessing the mine by 1st respondent’s respondent.  Applicant consequently filed an urgent chamber application seeking a provisional order allowing her access at Empress Mine and the right to carry on mining activities pending the return day.  The matter was heard by TAKUVA J who granted an order allowing the applicant access to Empress Mine. The order did not allow the applicant to carry out the mining activities pending the return date.  The confirmation of the provisional order was heard by MABHIKWA J.  In a judgment handed down on 21st May 2020 under HB 84-20 the final relief sought in the provisional order was granted inter alia, allowing the applicant to carry out mining activities at Empress Mine pending finalization of the case under case number HC 5673/18.

On 4th June 2020 1st respondent noted an appeal in the Supreme Court against the judgment of MABHIKWA J.  In the appeal, three grounds of appeal are raised, namely;

(a)	the learned Judge erred in granting an order that 1st respondent (applicant) be authorized to conduct mining operations at Empress Mine when the court had specially declined to grant such interim relief to 1st  respondent in the provisional order.

(b)	the learned Judge further erred in application proceedings in ordering that the appellant be ejected from the mining claims pending the finalization of the proceedings in HC 5673-18, notwithstanding that no order of ejectment had been sought by 1st respondent in the proceedings in HC 5763-18.

(c)	The learned Judge further erred in determining that appellant was in occupation of the mining claim “through a principal” when no such relationship was alleged or established on the papers filed in the proceedings.

This present application for leave to appeal is predicated upon the factual background set out herein, and the grounds of appeal as laid out above.

ISSUES FOR DETERMINATION

There are two principal issues for determination;

(a)	whether the applicant has made out a good case for leave to execute pending appeal.

(b)	whether 1st respondent ought to pay costs of suit on an attorney client scale.

WHETHER A GOOD CASE HAS BEEN MADE FOR LEAVE TO EXECUTE PENDING APPEAL

The applicant forcefully contends that the peculiar circumstances of this matter is such that this is a proper case for this court to exercise its discretion in favour of the applicant and grant leave to execute the judgment under HB 84-20, despite the noting of an appeal by 1st respondent.  The relevant factors which must be taken into account in deciding whether to grant leave to execute pending appeal were well set out by the Appellate Division in the leading case of South Cape Corporation v Engineering Management Services 1977 (3) SA 534 (A) at p 544 H – 545 H where the court stated thus:

“The court to which application for leave to execute is made has a wide general discretion to grant or refuse leave and, if leave be granted, to determine the conditions upon which the right to execute shall be exercised…  In exercising this discretion, the court should, in my view, determine what is just and equitable in all the circumstances, and, in doing so, would normally have regard, inter alia, to the following factors;

(1)	The potentiality of irreparable harm or prejudice being sustained by the appellant on appeal (respondent in the application) if leave to execute were to be granted.

(2)	The potentiality of irreparable harm or prejudice being sustained by the respondent on appeal (applicant in the application) if leave to execute were to be refused.

(3)	The prospects of success on appeal including more particularly the question as to whether the appeal is frivolous or vexatious or has been noted with the bona fide intention of seeking to reverse the judgment but for some indirect purpose, eg to gain time to harass the other party; and

(4)	where there is the potentiality of irreparable harm or prejudice to both appellant and respondent the balance of hardship or convenience, as the case may be.”

In Econet v Telecel Zimbabwe (Pvt) Ltd 1998 (1) ZLR 149 at p 154 F, SMITH J reaffirmed the same principles as follows:

“In determining an application for leave to execute pending appeal, the court must have regard to the “preponderance of equities”, the prospects of success on the part of the appellant and whether the appeal has been noted without the “bona fide” intention of seeking to reverse the judgment but for some indirect purpose, e.g to gain time or harass the other party.”

In examining the circumstances of this matter, I am satisfied that there is no potentiality of irreparable harm or prejudice whatsoever being sustained by 1st respondent if leave to execute were to be granted.  It must be noted that there is no privity of contract between the applicant and 1st respondent in respect of the mining claims at Empress Mine as to give 1st respondent locus standi to contest the exercise by the applicant of her rights to possess and carry out mining activities at Empress Mine pending any litigation under HC 5763/18.  The mere fact that 1st respondent, a separate legal persona has a pending case between it and the shareholders of Lugania, also a separate legal persona, does not confer 1st respondent the locus standi to litigate against the applicant in respect of the mining claims at Empress Mine.

In TBIC Investments & Another v Mangenje & Others SC 13-18, the Supreme Court per BHUNU JA, had the occasion to pronounce itself on the essence and effect of the doctrine of privity of contract.  At page 11 of the cyclostyled judgment the learned Judge held thus:

“… This brings us to the doctrine of privity of contract.  That doctrine restricts the enforcement of contractual rights and remedies to the contracting parties to the exclusion of third parties.  The learned author, Innocent Maja in his book The Law of Contract in Zimbabwe at page 27 paragraph 1.5.3 graphically explains the doctrine as follows:

“The doctrine of privity of contract provides that the contractual remedies are enforceable only by or against parties to the contract, and not third parties, since contracts only create personal rights.  According to Lilienthal, privity of contract is the general proposition that an agreement between A and B cannot be sued upon by C even though C would be benefited by its performance.  Lilienthal further posts that privity of contract is premised upon the principle that rights founded on contract belong to the person who has stipulated them and that even the most express agreement of contracting parties would not confer any right of action on the contract upon me who is not a party to it.”

On the facts of this matter, 1st respondent is a stranger to the contract between the applicant and Lugania in respect of the mining claims known as Empress Mine.  There is no privity of contract between applicant and 1st respondent. 1st respondent cannot sue over a contract entered into by Lugania.  1st respondent’s opposition to the application for leave to execute pending appeal is therefore legally untenable given the absence of locus standi andlack of privity of contract.  Further, and in any event, clause 28 of the agreement of sale between the applicant and Lugania precluded the letting, ceding, or assigning by Lugania of its rights under the agreement without the prior written consent of the applicant and the Mining Affairs Board.

It has not escaped the court’s attention that under case number HC 6533/18 1st respondent approached the High Court at Harare seeking a spoliation order on the grounds that it had been despoiled of possession of the mining claims at Empress Mine by one Simon Chivere, a shareholder of Lugania.  In judgment HB 484-18 MUZOFA J dismissed 1st respondent’s application and made a specific finding that 1st respondent had no right at all to restoration of possession of Empress Mine.  This judgment was never appealed and remains extant.  1st respondent cannot therefore be legally in occupation of the mining claims at Empress Mine without violating an extant order of this court.

In opposing confirmation of the provisional order in case number HC 2520/18, 1st respondent argued that it had equipment on its site at Empress Mine.  The judgment of MABHIKWA J allowed 1st respondent to remove its mining equipment from the mining claims.  1st respondent has refrained from removing the mining equipment in a sign of defiance.  This is further demonstration of 1st respondent’s mala fides in noting the appeal against MABHIKWA J’s judgment.  1st respondent is abusing court process by noting an appeal for the indirect purpose of buying time and harassing the applicant by denying her the right to carry out mining activities pending finalization of litigation.

It is my view, that applicant suffers the potentiality of irreparable harm if leave to execute pending appeal is refused.  Applicant remains the registered owner of the mining claims known as Empress Mine.  Applicant has a right to mitigate her damages in the contractual dispute between her and Lugania.

Applicant as registered owner of the mining claims is obligated to make regular statutory and annual payments to the Ministry of Mines.  Applicant incurs the costs of servicing and maintaining title to the mining claims.  In my view, this is a proper case where the preponderance of equities favours that leave to execute be granted.

As regards the prospects of success, the grounds of appeal betray the lack of bona fides of the appeal. The grounds of appeal are devoid of merit.

CONCLUSION

In closing, it is abundantly clear that there is no privity of contract between 1st respondent and applicant in respect of the mining claims known as Empress Mine.  1st respondent has no locus standi to contest applicant’s right to possess and carry out mining activities at the mining location.  The appeal noted by 1st respondent was entirely made for the purpose of buying time and frustrating the applicant.  The object of that appeal is not to test the correctness of the judgment being appealed against.  Applicant being the registered owner of the mining claims has the right to possess and carry out mining operations at Empress Mine.  I am satisfied that a good case has been made out for the granting of an order for leave to execute pending appeal in favour of the applicant.  In the end, the preponderance of equities favours the granting of the application.

In the result, and accordingly it is ordered that:

1.	The applicant be and is hereby granted leave to carry into execution the judgment of this court granted on the 21st of May 2020, in HB 84-20 pending the appeal noted by 1st respondent to the Supreme Court on the 4th June 2020 under SCB 209-20.

2.	The 1st respondent to pay the costs of suit.

Webb, Low & Barry Inc Ben Baron & Partners, applicant’s legal practitioners

Messrs Hussein Ranchod & Co. c/o Job Sibanda & Associates, 1st respondent’s legal practitioners