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[2022] ZANCHC 85
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Klipdam Diamond Mining Company (PTY) Ltd and Another v Nathan Alec Datnow t/a Shawshank Mining (2673/2017) [2022] ZANCHC 85 (20 January 2022)
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IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE DIVISION, KIMBERLEY
Case
number: 2673/2017
Heads
of argument filed: 08 September 2022
Complete
court file to judge: 01 November 2022
Date
delivered: 20 January 2022
In the matter between:-
KLIPDAM
DIAMOND MINING COMPANY (PTY) LTD
FIRST
APPLICANT
(REGISTRATION NUMBER:
1994/001754/07)
DIRK
JACOBUS FOURIE
SECOND APPLICANT
(IDENTITY
NUMBER: [....])
and
NATHAN
ALEC DATNOW T/A SHAWSHANK MINING
RESPONDENT
IN RE:-
NATHAN
ALEC DATNOW T/A SHAWSHANK MINING
PLAINTIFF
and
KLIPDAM
DIAMOND MINING COMPANY (PTY) LTD
FIRST DEFENDANT
DIRK
JACOBUS FOURIE
SECOND
DEFENDANT
JUDGMENT:
APPLICATION FOR LEAVE TO APPEAL
STANTON,
AJ
INTRODUCTION:-
[1]
For ease of reference, I
shall refer to the
parties as in the main action.
[2]
During the trial, I was called to adjudicate upon the
following separated issues, as agreed to by the parties, namely:-
2.1 The
validity and contents of the oral agreement/s as pleaded by the
plaintiff in paragraphs 4, 5 and/or 9
of the amended particulars of
claim, read with paragraphs 4, 5 and 9 of the amended plea, in
general, and specifically, pertaining
to section 11 of the Mineral
and Petroleum Resources Development Act, Act 28 of 2002 (“the
MPRDA”) and/or clause 9
of the mining right;
2.2 In
the event that I found that the oral agreement/s is/are invalid, that
the plaintiff’s claim should
be dismissed, and the counterclaim
should succeed with costs;
2.3 In
the event that the terms of the oral agreement/s is/are to be found
to be legally permissible to be implemented,
I was requested to:-
2.3.1
make a declaratory order to this effect;
2.3.2
declare what the terms and conditions of the agreement/s are; and
2.3.3
order that the defendants must pay the costs relating to the decision
on the separated
issues, and postpone all remaining issues.
[3]
The issue for adjudication was thus whether the oral contractor
agreement/s is/are
valid in law.
[4]
On 20 April 2021, I granted the following orders, namely:-
4.1
The 2015 oral agreement between the plaintiff and the first
defendant is declared valid;
4.2
The terms and conditions of the 2015 oral agreement are:-
4.2.1
The plaintiff obtained the right to mine on the Farm
Klipdam-North Site 5, an area of approximately 250 hectares, as more
fully
set out on the map, attached to the particulars of claim as
annexure A;
4.2.2
The 2015 oral agreement commenced on 17 June 2015 and shall
continue to operate until Site 5 is optimally mined and/or it is
lawfully
cancelled by either one of the parties;
4.2.3
The
plaintiff shall pay to the first defendant the following:-
4.2.3.1
17.5% of the selling price of the diamonds mined which are sold for
less than R 1,000,000.00 (One Million Rand); and
4.2.3.2
22%
of the selling price of the diamonds mined, which are sold for more
than R 1,000,000.00 (One Million Rand);
4.2.4
The first defendant shall remain liable for rehabilitation in
view of the fact that the plaintiff agreed to pay a higher percentage
of royalty per stone;
4.2.5
The plaintiff shall, as reasonably practical, comply with the
lawful instructions of the first defendant and its lawfully appointed
agents in respect of the provisions of the Mine Health and Safety
Act, Act 29 of 1996 (“the Mine Health and Safety Act”)
and its regulations and other applicable legislation;
4.2.6
The plaintiff shall remain the owner of structural
improvements and/or structures erected as part of his plant;
4.2.7
In the event of a breach of the 2015 oral agreement, the
defaulting party would be notified of its default by the other party
and
shall be allowed a reasonable time in which to remedy same. A
reasonable time will depend upon the circumstances;
4.2.8
The plaintiff shall rehabilitate only in areas where the
mining operations were conducted by the plaintiff;
4.2.9
The plaintiff shall co-operate with the engineer appointed by
the first defendant and remunerate the engineer for his services in
respect of Farm Klipdam-North Site 5, an area of approximately 250
hectares;
4.2.10
The first defendant shall:-
4.2.10.1
Provide the plaintiff with undisturbed and unimpeded access to
Farm Klipdam-North Site 5, an area of approximately 250 hectares,
as
more fully set out on the map, attached to the particulars of claim
as annexure A Klipdam-North;
4.2.10.2
Provide the plaintiff with undisturbed and unimpeded access to
Farm Klipdam-North to conduct mining activities from 06:00 am to
18:00 pm on Mondays to Saturdays and from 07:00 am to 13:30 pm on
Sundays;
4.2.10.3
Provide the plaintiff with access to water, including but not
limited to the existing excavated sand reservoir situated between
Site 1 and Klipdam-North;
4.2.10.4
Allow and supply the plaintiff with access and usage of Eskom
electricity supply, as and when required by the plaintiff for
purposes
of the mining operations;
4.2.10.5
Guide the plaintiff in regards to conducting the mining
operations in accordance with
inter alia
the first defendant’s
mining work programme and environmental management programme; and
4.2.10.6
Apply for all the necessary approvals, certificates and
consents required in terms of the MPRDA and the Mine Health and
Safety Act,
Act 29 of 1996;
4.2.11
The hearing of all remaining issues is postponed
sine die
;
and
4.2.12
The first defendant shall pay the costs in relation to the
separated issues.
[5]
The defendant now applies for leave to appeal to the Supreme Court of
Appeal against
the whole of my judgment.
GROUNDS FOR APPEAL:-
[6]
The defendants’ grounds of appeal can be distilled as follows,
namely that I
erred:-
6.1
In basing the judgment on evidence to the
effect that the plaintiff would be or was appointed as contractor of
the first or second
defendant, as such evidence is inconsistent with
the plaintiff’s pleaded case;
6.2
In finding the plaintiff’s evidence
credible;
6.3
In relying on the reference to the
plaintiff in the proposed written agreement as “
contractor
”,
as the label which contracting parties place on their agreement is
not necessarily decisive as to the true effect thereof;
6.4
In finding that the version of the
plaintiff remained consistent and without contradiction;
6.5
In finding that the plaintiff’s
evidence is supported by certain objective facts;
6.6
In not finding that the plaintiff
purportedly obtained the right to conduct the activities, which in
terms of section 5(2) of the
MPRDA may only be conducted by the owner
of the mining right, which activities are also specified in paragraph
2 of the mining
right;
6.7
In not finding that the oral agreement
between the parties was invalid as it purported to transfer or let
the mining right to the
plaintiff without the written consent of the
Minister,
alternatively
on
the basis that, if properly interpreted, the agreement between the
parties constituted a lease of rights to minerals in land,
which was
not attested by a notary public as is required by section 3 of the
General Law Amendment Act, Act 50 of 1956;
6.8
In
finding that the present case was distinguishable from the judgment
in
Elandskloof
Trust v Emjeff (Pty) Ltd
(“the Elandskloof matter”)
[1]
;
6.9
In finding that it was a term of the oral
agreement that, in the event of a breach thereof, the defaulting
party would be notified
of its default by the other party and be
allowed a reasonable time in which to remedy same, as there was no
cogent evidence to
justify this finding, as such evidence was
elicited by leading questions; and
6.10
In failing to grant an order in terms of
the first defendant’s counterclaim.
THE TEST FOR LEAVE TO
APPEAL:-
[7]
The defendants base their application for leave to appeal on section
17(1)(a)(i)
of the Superior Courts Act, Act
10 of 2013 (“the Act”), which reads as follows:-
“
17(1)
Leave to appeal may only be given where the judge or judges
concerned are of the
opinion that-
(a)(i) the appeal
would have a reasonable prospect of success; or…”
[8]
The interpretation of the rules and the law has evolved in case law
since 2013. The
view now held by the courts is that the threshold for
the granting of leave to appeal was raised with the induction of the
2013
legislation. The former assessment that authorisation for appeal
should be granted if “
there is a reasonable prospect that
another Court might come to a different conclusion”,
is no
longer applicable.
[9]
The discretion was therefore, in the words of the legislation,
amended to a mandatory
obligatory requirement that leave may not be
granted if there is not a reasonable prospect that the appeal will
succeed.
[10]
It must be a reasonable prospect of success; not that another court
may hold another view.
[11]
The Supreme Court of Appeal, in the matter of
Four
Wheel Drive Accessory Distributors CC v Rattan NO
[2]
confirmed
that:-
“
There
is a further principle that the Court a quo seems to have
overlooked – leave to appeal should be granted only
when there
is ‘a sound, rational basis for the conclusion that there are
prospects of success on appeal’. In the light
of its findings
that the plaintiff failed to prove locus standi or the
conclusion of the agreement, I do not think that
there was a
reasonable prospect of an appeal to this Court succeeding that there
was a compelling reason to hear an appeal. In
the result, the parties
were put through the inconvenience and expense of an appeal without
any merit.”
[12]
Recently, the Supreme Court of Appeal in
Ramakatsa
and others v African National Congress and another,
[3]
confirmed that:-
“
Turning
the focus to the relevant provisions of the Superior Courts Act (the
‘SC Act’), leave to appeal may only be
granted where the
judges concerned are of the opinion that the appeal would have a
reasonable prospect of success or there are
compelling reasons which
exist why the appeal should be heard such as the interests of
justice. This Court in Caratco, concerning
the provisions
of section 17(1)(a)(ii) of the SC Act pointed out that if
the Court is unpersuaded that there are prospects
of success, it must
still enquire into whether there is a compelling reason to entertain
the appeal. Compelling reason would of
course include an important
question of law or a discreet issue of public importance that will
have an effect on future disputes.
However, this Court correctly
added that ‘but here too the merits remain vitally important
and are often decisive’.
I am mindful of the decisions at High
Court level debating whether the use of the word ‘would’
as oppose to ‘could’
possibly means that the threshold
for granting the appeal has been raised. If a reasonable
prospect of success is established, leave
to appeal should be
granted. Similarly, if there are some other compelling
reasons why the appeal should be heard, leave
to appeal should
be granted. The test of reasonable prospects of success
postulates a dispassionate decision based on the
facts and the law
that a court of appeal could reasonably arrive at a conclusion
different to that of the trial court. In
other words, the
appellants in this matter need to convince this Court on proper
grounds that they have prospects of success
on appeal. Those
prospects of success must not be remote, but there must exist a
reasonable chance of succeeding. A
sound rational basis for the
conclusion that there are prospects of success must be shown to
exist.”
LEGAL ARGUMENTS:-
[13]
According to the defendants, leave to appeal should be granted
because the plaintiff’s
evidence was inconsistent with the
plaintiff’s pleaded case in the following respects:-
13.1. In paragraph 5.1 of
the particulars of claim, the plaintiff pleaded that he obtained the
right to mine on the mining area.
He did not plead that he obtained
this right as a contractor;
13.2
In paragraph 5.3 of the particulars of
claim, the plaintiff pleaded that in terms of the oral agreement, it
was the plaintiff who
incurred the obligation to pay the first
defendant for the right to mine, which is inconsistent with the
plaintiff being a contractor
of the first defendant, as a contractor
is paid by its employer and not
vice
versa;
13.3
The plaintiff pleaded in paragraph 5.6 of
the particulars of claim that in terms of the agreement he is the
owner of any excavated
material, concentrate and diamonds produced as
a result of his mining operation. A contractor who mines for the
mining owner receives
remuneration for the services he provides and
does not become owner of the diamonds he excavates; and
13.4
In paragraph 5.4 of the particulars of
claim, the plaintiff pleaded that the payment made by the plaintiff
to the first defendant
is a royalty per stone, which demonstrates
that, in terms of the agreement, the plaintiff did indeed become
owner of the diamonds
which he excavated.
[14]
On this score, I am guided by the following remarks of Innes CJ in
the matter of
Robinson
v
Randfontein
Estates Gold Mining Co Ltd
[4]
:-
“
The
object of pleadings is to define the issues; and parties will be kept
strictly to their pleas where any departure would cause
prejudice or
would prevent full enquiry. But within those limits the Court has a
wide discretion. For pleadings are made for the
Court, not the Court
for pleadings. And where a party has had every facility to place all
the facts before the trial court and
the investigation into all
circumstances has been as thorough and as patient as in this
instance, there is no justification for
interference by an appellate
tribunal, merely because the pleading of the opponent has not been as
explicit as it might have been.”
[15]
The Court in the matter of
Mastlite
(Pty) Ltd v Stavracopoulos
[5]
confirmed
that this principle has been followed and applied in numerous cases,
notably in
Shill
v
Milner
[6]
and
Marine
& Trade Insurance Co Ltd
v
Van
der Schyff
[7]
,
and
that what must be emphasised is that the contemplated departure from
the pleadings must not be such as to cause prejudice and
the new
issue or matter should have been fully canvassed by both parties to
the extent that it virtually amounts to a tacit agreement
between
them to enlarge the scope of the pleadings. The Court confirmed that
both parties must willingly participate in the effort
to canvass the
new issue, otherwise the possibility of prejudice must almost
inevitably arise which would be fatal to any attempt
to depart
substantially from the pleadings.
[16]
In my view, the contradictions between the pleadings and the
plaintiff’s evidence was not
seriously contested by the
defendants during the trial. In addition, the defendants extensively
cross-examined the plaintiff with
regard to the discrepancies. The
defendants were accordingly not prejudiced; and I find no merit in
this ground of appeal.
[17]
The remainder of the grounds of appeal can be dealt with
cumulatively.
[18]
According to the defendants, I erred in finding the plaintiff’s
evidence credible for the
following reasons:-
18.1
On 23 November 2015, the plaintiff’s
attorney recorded that it was his instruction that in terms of the
oral agreement the
plaintiff “
obtained
the sole mining rights’’
for the mining area and that “
in
return for the mining rights’’
the
plaintiff would make certain payments to the First Defendant;
18.2
On 8 January 2016, the plaintiff deposed to
the founding affidavit in his spoliation application and confirmed
that the material
terms of the oral agreement included that “
in
return for the aforesaid mining right” he
would make certain payments to the first defendant;
18.3
The plaintiff deviated from the aforegoing
for the first time during his oral evidence given in August 2021 by
stating
inter alia
that in terms of the oral agreement, he did not become the owner of
the diamonds which he excavated, without providing any cogent
explanation for his inconsistent versions under oath;
18.4
The plaintiff’s evidence that he had
taken diamonds excavated by him to the trading house to be sold and
received an advance
from the trading house prior to the sale thereof,
is inconsistent with his version that he never became owner of the
diamonds;
and
18.5
No explanation was placed before the Court
by the plaintiff as to why his pleaded case repeatedly stated that he
had become the
owner of the diamonds mined by him.
[19]
According to the defendants, I erred in finding that the plaintiff’s
evidence remained
consistent, for the following reasons:-
19.1
The plaintiff contradicted his pleadings,
his attorney’s communications and his earlier evidence under
oath as referred to
above, without offering any explanation for the
contradictions; and
19.2
His evidence during cross-examination
regarding the question whether he had owed the defendants money, was
contradictory and evasive.
[20]
The objective facts I considered in reaching my conclusion,
demonstrate that the effect of the
oral agreement was not to transfer
the first defendant’s mining right to the plaintiff, nor do
they show that this was the
parties true or continuing intention.
These facts are:-
20.1
The first defendant is the owner of the
immovable property that forms the subject matter of the mining right;
20.2
The first defendant’s mining right
covers the entire immovable property of the first defendant,
measuring 1466,0095 hectares
in extent;
20.3
It is common cause that in terms of the
oral agreement, the plaintiff acquired the entitlement to mine on the
portion of the property
identified as Site 5, same which measures a
mere 250 hectares of the immovable property;
20.4
There are at least four other mining sites
identified on the immovable property;
20.5
The first defendant employed a mine
manager, Mr Ben Nel, a mining engineer, Mr D van Heerden and a
medical practitioner, Dr Grobbelaar;
20.6
The unsigned written agreement, intended as
a recordal of the parties’ oral agreement, defines the
plaintiff as the “Contractor”
and the first defendant as
the “Holder”; and
20.7
No oral testimony was provided by the first
or second defendants. On the first defendant’s version, in his
affidavits filed
in the eviction and spoliation applications, he
confirms that he is the owner of a mining right in respect of the
mining area that
comprises the whole property. He furthermore denies
that the plaintiff was granted the right to mine exclusively on the
immovable
property.
[21]
The allegation that the plaintiff changed its version relating to the
ownership of the diamonds
is simply incorrect. The plaintiff, by way
of its attorneys, attempted to introduce a clause into the proposed
written agreement
to the effect that the plaintiff would become the
owner of diamonds excavated by him. This proposal was, however,
rejected by the
defendants and that was the end of the matter.
[22]
The plaintiff’s uncontested evidence was that he was never
under the impression that he
would be taking over the mining right,
but merely that he had the right to mine; that the mining right
holder would remain the
owner of the diamonds; that the defendants
had the right to choose whether to retain or sell the diamonds, mined
by the plaintiff;
and that he would become the owner of a percentage
of the selling price of the diamonds. No other inference can be drawn
from the
evidence that the plaintiff did not become the owner of the
diamonds.
[23]
Whilst acknowledging that the plaintiff’s
evidence was not faultless, his version remained consistent and
without contradiction,
throughout chief-examination and
cross-examination. I also considered his response in respect of the
ownership of the diamonds
and his explanation in respect of the
payment procedure as adequate. When confronted with the fact that
neither the original nor
amended particulars of claim contained any
reference to the involvement of Christopher Stokes Tender House and
the split in the
payment by Christopher Stokes Tender House, he
agreed that no such reference was included, but insisted that the
second defendant
retained control of the diamonds and that such a
payment method is standard in the industry.
It is
evident that the parties intended to conclude an agreement whereby
the first defendant appointed the plaintiff as a mining
contractor.
It is further unlikely that the parties intended for the plaintiff to
act as a mining contractor without any remuneration.
In
S
v Monyane and others
2008 (1) SACR 543
(SCA)
at paragraph
[15] the learned Ponnan JA stated;
“
This court's
powers to interfere on appeal with the findings of fact of a trial
court are limited. ... In the absence of demonstrable
and material
misdirection by the trial court, its findings of fact are presumed to
be correct and will only be disregarded if the
recorded evidence
shows them to be clearly wrong (S v Hadebe and Others
1997 (2) SACR
641
(SCA) at 645e – f).
”
The
defendants’ arguments pertaining to these grounds of appeal,
are to my mind unconvincing and accordingly an
appeal
would not have a reasonable prospect of success.
[24]
I deem it necessary to separately deal with the defendants’
argument that I had erred in
finding that the agreement entered into
between the parties did not amount to a lease of minerals; and that I
found this matter
distinguishable from the
Elandskloof matter.
[25]
The main question that the court had to decide on in
Elandskloof
Trust v Emjeff (Pty) Ltd
was whether or not the owner of the
mining right retained ownership of the diamonds mined.
[26]
In view of my determination that the plaintiff did not become the
owner of the diamonds mined
under the agreement, the two cases thus
became distinguishable.
[27]
The first defendant’s allegations of illegality were contingent
on it being able to show
that the agreement has the effect of either
transferring the mining right or proving its allegation that same
amounts to a lease
for minerals.
[28]
It is a settled principle that a party who wishes to raise statutory
illegality as a defence
has the
onus
to prove the existence of the circumstances giving rise to such
illegality.
[8]
[29]
The defendants failed to provide any evidence that contradicted the
sworn testimony provided
by the plaintiff, not even in their own
statements made under oath in the affidavits filed in the preceding
legal proceedings.
The first defendant accordingly failed to show
that the effect of the agreement was to transfer the mining right. I
accordingly
do not agree that another court would find that the
defendants have proved the agreement to be illegal and therefore
invalid.
[30]
Based on the objective facts, I am not persuaded that another court
would come to a different
conclusion and find that the oral agreement
was concluded to transfer the first defendant’s mining right to
the plaintiff
or that the oral agreement was a mining lease.
CONCLUSION:-
[31]
It follows that in the circumstances there is no
reasonable prospect that another court would find for the defendants
and in these
circumstances, I must dismiss the application for leave
to appeal, with costs.
The following order is
made:
1)
The application for leave to appeal is dismissed, with costs.
A
STANTON
ACTING
JUDGE
For
the plaintiff:
Advocate R Nel
o.i.o.
Duncan & Rothman Attorneys
For
the defendants:
Advocate JP Vorster SC
o.i.o.
Van de Wall Incorporated
[1]
1988
(2) SA 15 (T).
[2]
2019 (3) SA 451 (SCA) at paragraph 34.
[3]
[2021] JOL 49993
(SCA) at paragraph [10].
[4]
1921 AD 168
at page 198.
[5]
1978
(3) TPD 296
at page 299.
[6]
1937 AD 101.
[7]
1972 (1) SA 26 (A).
[8]
Yannakou
v Apollo Club
[1974] All SA 129
(A); P Trimborn Agency CC v Grace
Trucking CC
2006 (1) SA 427
(N) 430-431.