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[2018] ZANCHC 4
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Alexcor (SOC) Ltd v Richtersveld Mining Company (Pty) Ltd and Others (964/16) [2018] ZANCHC 4 (12 February 2018)
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IN THE HIGH COURT OF SOUTH
AFRICA
(NORTHERN CAPE HIGH COURT,
KIMBERLEY)
Case
No: 964/16
Heard
on: 12/10/2017
Delivered
on: 12/02/2018
In the matter between
ALEXCOR (SOC) LTD
Applicant
And
RICHTERSVELD
MINING COMPANY First
Respondent
(PTY)LTD
CRAIG
LLEWELLYN MATTHEWS Second
Respondent
RICHTERSVELD SELF
DEVELOPMENT Third
Respondent
COMPANY
(PTY) LTD
Registration
No. 2006/034315/07
RICHSTERSVELD SIDA!HUB
COMMUNAL Fourth
Respondent
PROPERTY
ASSOCIATION
DUNCAN
ERNEST KORABIE Fifth
Respondent
JACOB
HAROLD ADAMS Sixth
Respondent
DENNIS
ALPHONZO FARMER Seventh
Respondent
WILLEM
JOHANNES VRIES Eighth
Respondent
JOHN
WILLIAM BRISTOW Ninth
Respondent
RYNO
DENVER THOMAS Tenth
Respondent
BRIAN
KOOPMAN Eleventh
Respondent
PAULUS
DE
WET Twelfth
respondent
SAMUEL
NERO Thirteenth
respondent
And in the application
between
WILLEM
JOHANNES First Applicant
VRIES DENNIS ALPHONZO
FARMER Second
Applicant
And
ALEXKOR (SOC)
LIMITED First
Respondent
Registration No.
1992/006368/30
RICHTERSVELDT MINING
COMPANY Second
Respondent
(PTY)
LTD Registration No. 2006/034807/07
CRAIG
LLEWELYN MATTHEWS Third
Respondent
RICHTERSVELD SELF
DEVELOPMENT Fourth
Respondent
COMPANY
(PTY) LTD Registration No.
2006/034315/07
RYNO
DENVER Fifth
Respondent
THOMAS
BRIAN KOOPMAN Sixth
Respondent
JUDGMENT ON COSTS IN
THE COUNTER-APPLICATION
PAKATI J
[1] Alexkor
(SOC) Ltd, the applicant in the main application, approached this
Court on
an urgent basis seeking the appointment of
"the
Declared Representatives"
as comprising the representatives
of Richtersveld Mining Company (Pty) Ltd ("RMS"), the first
respondent in the main application
and second respondent in the
counter application, on the Joint Board of the Pooling and
Sharing Joint Venture ("PSJV"),
an unincorporated joint
venture between Alexkor and RMC. In the alternative it seeks an order
authorizing the
"Alternative Declared Representatives"
to conduct the affairs and activities of the PSN in their
capacity as representatives of RMC on the Joint Board, but not
limited
to taking all steps necessary for the purpose of attending
meetings of the Joint Board of the PSJV and voting thereat as
representatives
of RMC.
[2] The
main application and the counter-application were set down for
hearing on 25 November
2016. Before the counter-application was
argued Mr DW Gess, on behalf of the applicant (Alexkor) in the main
application, submitted
that it would be appropriate for the Court to
hear argument in relation to the counter-application and determine it
prior to hearing
argument and determination in the main application.
He requested that the
rule nisi
granted on 21 June 2016 be
extended pending the determination of the counter-application. He
submitted further that the determination
of the counter-application
was likely to determine the main application. By agreement between
the parties the
rule nisi
was extended until 12 October 2017,
hence the hearing of the counter-application.
THE
COUNTER-APPLICATION
[3]
In the counter-application Farmer and Vries, the applicants in the
counter-application
and seventh and eighth respondents in the main
application, sought the following relief:
"
"1.
Dispensing with the ordinary time periods provided for in the Uniform
Rules of Court and directing that this matter be
dealt with as one of
urgency in terms of Rule 6 (12) (a) of these rules;
2. Dispensing with the
provisions in the First Respondent's Memorandum of Incorporation
requiring the appointment of the Seventh,
Eighth, Tenth and Eleventh
Respondents (in the main application) as directors of the First
Respondent at a general meeting of the
First Respondent;
3. Declaring that the
Seventh, Eighth, Tenth and Eleventh Respondents (in the main
application) are directors of the First Respondent,
alternatively
appointing the Seventh, Eighth, Tenth and Eleventh Respondents (in
the main application) as directors of the First
Respondent;
4.
In the alternative to paragraphs 2 and 3 above,
prohibiting:
4.1
The Second Respondent (in the main application), in his
capacity as sole director of the First Respondent; or
4.2
Any person elected to the board of the Pooling and Sharing
Joint Venture, an unincorporated joint venture between the Applicant
and the First Respondent ("the PSJV''), on behalf of the First
Respondent, from exercising a call option which entitles the
first
respondent to acquire the 51
%
interest of the Applicant in the
land mining operation of the PSJV subject to certain conditions ("the
call option''),
until and
unless the First
Respondent's board of directors ("the Board'') is properly
constituted and validly authorizes the call option
in accordance with
the First Respondent's Memorandum of Incorporation.
5.
Granting the Seventh and Eighth respondents (in the main
application), further and/or alternative relief;
6.
Costs of suit in the event of the counter application being
opposed.
"
[4] In
dismissing the main relief sought in the counter-application (prayers
2 and 3) I
stated the following in para [54] of my judgment:
"In my view, the
Court should not be seen to be drafting contracts for the companies
by dispensing with the provisions of the
company's Memorandum of
Incorporation. This prayer should fail."
I therefore granted the
alternative relief (interdict) sought in the counter-application and
reserved the issue of costs to be dealt
with in the main application.
Craig Llywellyn Matthews, the sole director of Richtersveld Mining
Company (Pty) Ltd ("RMC"),
second respondent in the main
application and third respondent in the counter-application, opposed
the main as well as the counter-application.
[5] In
the main application Messrs Dennis Alfonzo Farmer ("Farmer"),
Willem
Johannes Vries ("Vries"), Ryno Thomas ("Thomas")
and Brian Koopman ("Koopman"), are seventh, eighth,
tenth
and eleventh respondents respectfully. Vries and Farmer, are
applicants in the counter-application and Thomas and Koopman,
fifth
and sixth respondents. They were elected as RMC's Community Directors
by the Richtersveld Community during the IEC elections
held in 2013.
[6] On
09 October 2017 Adams and Adams, attorneys of record on behalf of
RMC, forwarded
an email to my registrar by facsimile requesting that
I make a directive on whether or not costs occasioned as a result of
the
counter-application should be argued before the determination of
the main application. The request was as a result of inability
to
reach an agreement by the parties regarding the manner in which costs
in the counter-application should be dealt with by the
court hearing
the main application, so they stated. The matter was the heard on 12
October 2017.
[7] On
12 October 2017 Mr Manentsa argued on behalf of Matthews that the
counter application
is distinct and separate from the main
application. He insisted that the issue of costs be heard and argued
prior to determination
of the main application scheduled to be heard
on 12 October 2018.
[8] Adv
Michelle O' Sullivan, on behalf of Vries and Farmer, submits that the
issue of
costs is brought prematurely as the Court has not yet made a
determination in the main application which may have a bearing on the
costs relating to the counter application. This is so because
the main application requires the appointment of the representatives
until a final determination by a court of competent jurisdiction as
to whether or not the Board of Directors of RMC is properly
constituted, so she argues.
[9] Reasons
why it was necessary for the applicants to bring the
counter-application are
summarized as follows:
9.1
It was brought in good faith and in the public interest by
community representatives in an effort to resolve problems that were
faced by RMC namely, ensuring that its Board was properly
constituted;
9.2
To ensure that RMC functions properly and effectively and
counter the fact that it had a sole director, Matthews, who lacks
powers
other than to call a general meeting. His term expired on 31
October 2017;
9.3
At the time the following entities in the RMC were defunct and
community directors could not be formally appointed although elected
by the community to RMC's Board and ultimately their representation
as directors was desired by the community;
9.4
RMC could not appoint its representatives to the PSJV to
manage the joint marine mining and land rights in the community's
interests
with Alexkor's representatives. The granting of the
alternative relief would serve to prevent the dissolution of the PSJV
through
the call option pending the proper constitution of the RMC
Board;
9.5
Ensuring that the restitution entities which are accountable
to the community function properly and effectively to the benefit of
the community;
9.6
The say so of Matthews that he has extensive power as the sole
director of RMC which he alleges entitles him to take all decisions
with regard to RMC; and
9.7
Matthews sought to exercise the call option while the judgment
of the Western Cape High Court was still pending.
[10] Mr
Manentsa, on behalf of RMC, submitted that the counter-application is
different and separate
from the main application as alluded to
earlier and therefore there is no reason why costs should not be
argued and determined
separately. He conceded that the Court's
finding might have a bearing on the main application but claimed that
RMC would be prejudiced
by the delay.
[11] It
is worth mentioning that the issue for determination in the main
application is whether RMC's
Board is presently properly constituted
with Matthews as its sole director. Vries and Farmer contended that
Matthews had limited
powers as sole director of RMC and lacked the
requisite authority and capacity to oppose the relief sought in the
main and counter-applications.
This is so because there are
insufficient numbers of directors in RMC's Board to form a
quorum.
Therefore Matthews' authority still has to be determined in the
main application. Regarding the main application Vries and Farmer
filed a notice to abide by the Court's decision dated 13 September
2016 on 14 September 2016. Articles 12.1 and 12.2 of the RMC's
Memorandum of Incorporation ("MOI") provide that a
quorum
of RMC's Board comprises of three directors. Article 19.8 of the
MOI states that should the number of directors fall below a
quorum,
the remaining director(s) only has the authority to summon a
general meeting of the company.
[12] According
to Vries and Farmer Matthews should be ordered to pay the costs of
the counter-application
based on the fact that the defence he raised
in the main application is not in the best interest of RMC because of
his contention
that the appointment of community directors would make
no difference to the decision making of RMC as well as his threat to
prolong
meetings by preventing a
quorate
decision making, and
yet Vries and Farmer represent the impoverished community who rely on
social and financial benefits afforded
by the operations of the PSJV.
[13]
Adv
O'Sullivan submitted that the fact that Vries and Farmer were
successful in the interdictory relief and are entitled to costs
without determining whether Matthews was indeed authorized to oppose
the main and counter-applications. For this contention she
relied on
GOLDING
v TORCH PRINTING CO (PTY) LTD
[1]
where
Herbstein J held:
"What the Court
must do is to try and make a fair and just estimate of the
liabilities of the parties for the costs of the
action, having regard
to their success or failure, and to the conduct of the case
generally. There is one important fact of which
the Court cannot lose
sight, and that is that the plaintiff succeeded. It is true, he made
claims on which he failed, and for the
extra costs involved in these
he must carry responsibility. He must also carry responsibility and
liability for the wasted costs
of one day. If I proceed on the basis
that as he succeeded he is entitled to the general costs of the
action and that he must pay
any extra costs he occasioned, then I
must try as best I can to estimate the time the case would have taken
if the claims on which
he failed had not been made and if a
postponement had not been necessary.
"
[14] Adv
O' Sullivan contended further that the following principle is
applicable:
''private litigants who bona fide seek to ventilate
issues of public interest, as in the present instance, are immunized
from
adverse costs orders".
[15]
A
proper approach to follow before awarding costs against an opponent
especially regarding constitutional issues is laid down by
the
Constitutional Court in
BIOWATCH
TRUST v REGISTRAR, GENETIC RESOURCES AND OTHERS
[2]
as
follows:
"[16] In my view
it is not correct to begin the enquiry by a characterisation of the
parties. Rather, the starting point should
be the nature of the
issues. Equal protection under the law requires that costs awards not
be dependent on whether the parties
are acting in their own interests
or in the public interest. Nor should they be determined by whether
the parties are financially
well endowed or indigent or, as in the
case of many NGOs, reliant on external funding. The primary
consideration in constitutional
litigation must be the way in which a
costs order would hinder or promote the advancement of constitutional
justice.
[17] Section 9 (I) of
the Constitution provides that everyone is equal before the law and
has the right to equal protection and
benefit of the law. No party to
court proceedings should be endowed with either an enhanced or a
diminished status compared to
any other. It is true that our
Constitution is a transformative one based on the understanding that
there is a great deal of systemic
unfairness in our society. This
could be an important, even decisive factor to be taken into account
in determining the actual
substantive merits of the litigation. It
has no bearing, however, on the entitlement of all litigants to be
accorded equal status
when asserting their rights in a court of law.
Courts are obligated to be impartial with regard to litigants who
appear before
them. Thus, litigants should not be treated
disadvantageously in making costs and related awards simply because
they are pursuing
commercial interests and have deep pockets. Nor
should they be looked upon with favour because they are fighting for
the poor and
lack funds themselves. What matters is whether rich or
poor, advantaged or disadvantaged, they are asserting rights
protected by
the Constitution.
"
[16]
Notably, this matter involves the restitution entity, the PSJV, which
was established when
the community successfully claimed its land in
the Land Claims Court under Case No. LCC 151/1998. PSJV was
established pursuant
to a court order which incorporated the Deed of
Settlement signed on behalf of the Richtersveld Community, Alexkor
and the Government
of the Republic of South Africa. This was done in
order to hold the mining rights for the benefit of the community.
[17] The
applicants suggested that the parties should agree that each party
bears its own costs because
of
"the partial success of the
counter-application and the partial success of the defence (the
"Costs Proposal" in a
Calderbank letter sent on 27
September 2017)."
The applicants contended that the said
letter confirmed that should the offer be rejected and the court in
the end award costs on
the basis that each party is responsible for
its own costs the applicants would seek a punitive costs order on a
scale as between
attorney and client.
[18] Regarding
the Calderbank letter mention in para 17
supra
Adams and
Adams, for Matthews, declined the Costs Proposal and insisted that
Matthews is entitled to recover his costs against the
applicants. In
a letter dated 04 October 2017 Adams and Adams made a
counter-proposal in terms of which the applicants should pay
50% of
the attorney's costs and full extent of the disbursements incurred
when they defended the counter-application. The applicants
on the
other hand also seek costs in respect of preparation and hearing of
this application.
[19] As
noted in para [25] of my judgment I mentioned that the issues between
the main application
and the counter-application are interlinked. I
therefore stand by my ruling that costs of the counter-application
will be dealt
with in the main application. Para [65] of my judgment
states:
"Closer reading
of this section [s
57
(3) (a) of the
Companies Act, 71 of
2008
] does not give Matthews authority to act as he pleases. The MOI
also does not grant him sole decision making power, he is bound
by
the confines of the MOI as far as it is consistent with the
Companies
Act.
"
[20
] The
main application requires the appointment of the representatives
until a final determination
by a court of competent jurisdiction as
to whether or not the Board of Directors of RMC is properly
constituted as alluded to earlier.
For that reason I will not, at
this stage, deal with the
'Costs Proposal'
suggested to
Matthews in the
'Calderbank Letter'
forwarded on 27 September
2017 with the purpose of curtailing costs incurred when the matter
was argued. I will also not deal with
Matthews' counter-proposal at
this stage. In my view the outcome of the main application may have a
bearing on costs in the counter-application
especially if the court
finds that Matthews was not authorized to oppose the main and the
counter-application.
In
the circumstances I grant the following order:
The
costs of the counter-application are reserved and will be dealt with
in the main application.
B M PAKATI
JUDGE-NOERTHERN
CAPE DIVISION, KIMBERLEY
For the
Applicants:
ADV M O'SULLIVAN
Instructed by:
DUNCAN & ROTHMAN
For
the Respondents:
ADV B MANENTSA
Instructed
by:
ENGELSMAN MAGABANE
[1]
1949 (4) SA 150
(C) at263
[2]
2009 (6) SA 232
at paras [16]
and [17]