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[2016] ZANCHC 39
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Liciano Coal (Pty) Ltd v Assmang Ltd and Another (2406/2016) [2016] ZANCHC 39 (2 December 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTHERN
CAPE HIGH COURT, KIMBERLEY)
CASE
NO
.
:
2
40612016
Date
heard
:
1
0-1
1
-2016
Date
delivered: 02-12-2016
In
the matter between:
LICIANO
COAL (PTY)
LTD
Applicant
And
ASSMANG
LTD 1
st
Respondent
OCHRE
SHIMMER TRADE AND INVEST 78 (PTY)
LTD 2
nd
Respondent
CORAM:
WILLIAMS J:
JUDGMENT
WILLIAMS
J:
1.
On 10 November 2016, after hearing argument in this application which
was brought on an urgent basis, I made the following orders:
"1)
That first respondent restore the applicant's access to the property
known as FARM DOORNFONTEIN 446 forthwith;
2)
That
first
respondent
be
interdicted
and
restrained
from refusing
or in any
way
prohibiting
the applicant
access
to the
property known as FARM DOORNFONTEIN
446; and
3)
That first
respondent
pay
the
costs
of
the
application
on the party
and party
scale."
I
indicated that I would provide reasons for the orders in due course.
These now follow.
2.
The applicant Liciano Coal (Pty) Ltd, entered into a written
agreement with the second respondent Ochre Shimmer Trade and Invest
78 (Pty) Ltd (Ochre Shimmer), which held a prospecting right over the
property of the first respondent Assmang (Pty) Ltd (Assmang),
on 12
May 2014 and in terms of which Ochre Shimmer conferred use and
enjoyment of its prospecting right over the property to the
applicant.
3.
During 2015 Ochre Shimmer purported to cancel the agreement with the
applicant due to non-compliance by the applicant with certain
of the
terms thereof and locked the applicant out of the property. This led
to the applicant bringing an urgent application before
Pakati J on 12
June 2015 under case no 1060/15 for
inter
alia
access to the property. Pakati J on 21 August 2015 held (in the
main) that Ochre Shimmer had prematurely cancelled the agreement,
having not complied with the requisite notice to remedy the breach
before cancellation in terms of Clause 8.2 of the agreement
between
the applicant and Ochre Shimmer and made the following orders:
1.
The first respondent, Ochreshimmer, s ordered to comply with its
obligations under and in terms of the agreement between
the
applicant, Liciano Coal, and the first respondent dated 12 May 2014
set out in Annexure "A " to the Founding Affidavit.
2.
The respondents, Ochreshimmer, Assmang and Spi Mining are ordered to
give the applicant access to the prospecting area
in respect of which
the first respondent is the holder of a prospecting right granted by
the South African Department of Mineral
Resources under Protocol No.
07512009 conferred in terms of section 20 of the Mineral and
Petroleum Resources Development Act,
28 of 2002 (as amended).
3.
The applicant is ordered to comply with its obligations in terms of
the agreement, and in particular to make payment to
the first
respondent of the sum of R1 387 700.00 plus VAT, such payment to be
made within 30 (thirty) days of this order, into
the trust account of
the first respondent's attorneys.
4.
The aforesaid relief, save for any payments made by the applicant to
the first respondent, operate as an interim interdict
pending the
outcome of the action instituted by the applicant against the first
respondent under Case No. 1582712015 on 29 April
2015 out of the
South Gauteng High Court, subject to the following conditions:
4.1
That in the course of carrying out the prospecting works
under and in
terms of the agreement the applicant is ordered to provide the first
respondent with weighbridge reports accounting
to the first
respondent for all ore removed from the said prospecting area;
4.2
That the applicant gives an observer appointed by the
first
respondent access to the prospecting site at any reasonable time to
inspect the applicant's weighbridge reports: Provided
that the first
respondent 's attorney gives the applicant's attorney at least 12
hours' notice of an intended inspection setting
out the name of the
person who will carry out the inspection and the date and time of the
proposed inspection;
4.3
That the applicant makes timeous payment to the first
respondent of
all amounts due to the first respondent under and in terms of the
agreement for the period of the operation of this
interim interdict.
5.
The first respondent is ordered to pay the costs of this
application.
6.
The applicant is ordered to pay to the first respondent,
Ochreshimmer, the wasted costs of 02 June 2015."
4.
In the application before Pakati J, Assmang was cited as the second
respondent by virtue of its being the owner of the property
and the
concomitant interest it might have had in the matter. Assmang did not
oppose that application and abided with the decision
of the court.
5.
In terms of paragraph 3 of the order of Pakati J, the applicant had
to make payment to Ochre Shimmer in the amount
of
R1 387 700.00 plus VAT within 30 days of the order.
6.
The applicant in its founding affidavit herein, deposed to by Ms
Licia Motsepe, the sole shareholder of the applicant, states
that due
to financial constraints such payment could only be made to Ochre
Shimmer during September 2016, almost 1year and 1 month
after the
date of the order, therefore 1 year late.
7.
During the time before payment the applicant had been denied access
to the property - which the applicant had accepted. However
after
payment had been made and when applicant attempted to access the
property on 18 October 2016, it discovered that the entrance
gate was
locked and access denied by Assmang. During a telephonic conservation
with the chief executive officer of Assmang, Mr
Mark Oosthuizen,
Motsepe was informed that the applicant will not be allowed access to
the property.
8.
Motsepe states that she thereafter tried on numerous occasions to
engage with Oosthuizen
regarding access, but that
Assmang's stance remained the same despite the order of Pakati J
and
the applicant's compliance therewith. In the mean time the
applicant's losses in terms of equipment it had sourced to commence
prospecting amount to R35 000,00 per day and it estimates loss in
productivity at R4 million per month as a result of Assmang denying
it access to the property. This situation is compounded by the fact
that the agreement between Ochre Shimmer and the applicant
expires on
24 January 2017, which at the time the application was launched left
the applicant with less than three months in which
to exercise its
rights in terms of the agreement.
9.
No relief is sought against Ochre Shimmer - which the applicant
states has actually assisted it in regaining access. Ochre Shimmer,
the second respondent herein does not oppose this application.
10.
Assmang in its opposing papers deposed to by Oosthuizen, avers that
the order of Pakati J has lapsed due to non fulfilment of
the
condition contained in paragraph 4 read with subparagraph 4.3
thereof. In addition it avers that the applicant had entered
into two
agreements subsequent to the order of Pakati J in which the applicant
assumed several obligations prior to it being re-admitted
to the
property - which agreements the applicant failed to disclose in the
founding papers.
The
order of Pakati
J
11.
Assmang contends that since payment of the amount of R13
87 700.00 plus VAT had been made a year late, there had
been
non-compliance with the condition contained in sub paragraph 4.3
of the order resulting in the order of Pakati J having
lapsed.
12.
On a proper reading of paragraph 4 of the order however, it excludes
the payment of the amount of R1 387 700.00 from the operation
of the
interim interdict. The payments referred to in sub-paragraph 4.3 are
payments which would become due during the period of
the operation of
the interim interdict, which was granted pending the outcome of an
action instituted in the South Gauteng High
Court. These payments do
not appear to be an issue since the applicant in any event did not
pursue its access to the property and
its operations until it had
paid the amount of R1 387 700.00 plus VAT. Assmang cannot rely on the
applicant's late payment of the
above amount for its refusal to allow
the applicant access to the property. Payment of the stated amount
has a bearing only on
the applicant and Ochre Shimmer. Should the
applicant, for whatever reason, fail to make such payment within the
stated time, Ochre
Shimmer's remedy would be to enforce the order by
execution. It certainly would not mean that the order had lapsed.
13.
Whilst on the topic of the order of Pakati J, it should be mentioned
that
in
casu
the
applicant sought orders that Assmang and
Oosthuizen be held in contempt of that order and that a sanction
be
imposed as a result of such contempt. I refused to grant these orders
on the basis that the applicant had not shown that Assmang's
and/or
Oosthuizen's non compliance with the order had been both wilful
and
ma/a
fide.
In my view there can be no
doubt that the disobedience of the order was wilful, but as was held
in
Fakie NO
vs
CCII
Systems
(Pty) Ltd
[2006] ZASCA 52
;
2006 (4) SA 326
at 333 (paragraphs 9 and 10):
"9)
The test for when disobedience
of
a
civil
order constitutes contempt
has come to be stated as
whether the breach
was committed 'deliberately and
ma/a
fide'.
A
deliberate
disregard
is
not enough,
since the
non-complier may
genuinely, albeit
mistakenly,
believe
him-
or
herself
entitled
to
act
in
the
way
claimed
to
constitute
the contempt.
In such a case good
faith
avoids
the infraction.
Even
a
refusal to
comply
that is objectively u
n
reasonable
may
be bona fide (though unreasonableness could
evidence Jack of
good faith).
1
0
)
These
requirements
-
that
the
refusal to obey should be both wilful
and mala
fide,
and that unreasonable non-compliance, provided it
is
bona
fide, does
not
constitute contempt
-
accord with
the
broader definition of
the crime,
of which non-compliance
with civil
orders
is
a
manifestation.
They
show that the offence is committed
not by mere
disregard
of
a
court order, but by the
deliberate
and
intentional
violation
of the court's dignity, repute or authority
that this
evinces. Honest belief
that non-compliance is
justified
or proper
is
incompatible
with
that intent.
"
The
subsequent agreements
14.
These refer to firstly, an agreement reached between the applicant
and Ochre Shimmer following upon a meeting held by their
representatives on 7 October 2016. The written document emanating
from this meeting is titled Heads of Agreement and it was recorded
as
a working document to monitor the resumption of bulk sampling as per
the existing MOA (memorandum of agreement) and court order.
The
second agreement is alleged to be contained in the minute of a
meeting held between applicant, Ochre Shimmer and Assmang on
19
October 2016.
15.
As far as the first mentioned agreement is concerned, it should be
noted that Assmang is not a party thereto. That agreement
was
obviously entered into between Ochre Shimmer and applicant to
regulate their relationship as prospecting right holder and
contractor after payment of the outstanding money had been received
by Ochre Shimmer and prospecting could resume. Assmang cannot
rely on
a breach of an agreement (if any) to which it was not a party in
order to deny the applicant access to the property.
16.
Regarding the meeting attended by all three parties on 19 October
2016 . As is apparent from the minute, the meeting was chaired
by
Oosthuizen who restated Assmang's contractual obligation towards
Ochre Shimmer and stated Assmang 's intention to deal with
Ochre
Shimmer only, although it would honour court orders between the
applicant and Ochre Shimmer.
17.
Oosthuizen also raised certain
"
breaches"
of
contract relating to the Access agreement entered into between
Assmang and Ochre Shimmer, which Assmang expected Ochre Shimmer
to
rectify before any prospecting would be allowed on the property.
(The issues raised pertinently by Assmang in this
application
related to a railway crossing which Transnet had prohibited from
being used by heavy vehicles, the fencing off of the
mining area and
rehabilitation of the site as per the Environmental Management Plan
(EMP) and the Access agreement. I will
revert to these issues.)
18.
The minute of this meeting records that Ochre Shimmer's
representative acknowledged the contractual shortcomings and agreed
to address all issues
19.
It is recorded that during this meeting the applicant represented by
Motsepe; agreed that they would offer a solution to the
stockpile
issue; confirmed that the fence be erected; and committed to the
rehabilitation plan
"and
the
timeline
completion
date of
24 January
2017
.
"
20.
Despite having recorded that Assmang would deal solely with Ochre
Shimmer on issues of contractual obligations, the above
mentioned undertakings by the applicant are now what Assmang expects
the applicant to comply with before it will allow access to
the
property.
21.
The Access agreement between Assmang and Ochre Shimmer provides in
clause 14 thereof for the procedure to be followed in the
event of
breach of contract.
22.
In terms of clause 14 of the agreement the aggrieved party should by
written demand give the party in breach 14
days
notice to remedy the breach. Should the parties be unable to resolve
the dispute, provision is made for mediation and if that
fails,
arbitration.
23.
I think one can safely assume, no mention being made by Assmang in
its opposing affidavit of putting Ochre Shimmer or, for what
its
worth, the applicant on terms as provided for in clause 14 of the
agreement, that the provisions of clause 14 have not been
complied
with. What Assmang is in fact doing is to side-step the existing
agreement between itself and Ochre Shimmer on the basis
of some vague
undertakings and commitments made by the applicant, while Oosthuizen
himself acknowledges that the contractual obligations
are between
Assmang and Ochre Shimmer. This cannot be allowed.
24.
Though not strictly necessary for purposes of this application, I
deal briefly with the breaches alleged by Assmang since I
allowed
argument thereon.
The
issue of the railway crossing
25.
In its replying affidavit the applicant has attached correspondence
with Transnet from which it appears that Transnet would
be willing to
assist should heavy vehicles have to cross the railway line. That
should put to rest any concern Assmang has regarding
the railway
crossing.
The
i ssue regarding the fencing of the mining area
26.
The Access agreement between Assmang and Ochre Shimmer provides that
whenever deemed necessary Ochre Shimmer erect a fence around
the
mining area to provide protection against the entry into such area of
small or large livestock. This is typically an issue
covered by
clause 14 of the agreement and should be dealt with accordingly
Rehabilitation
of the site.
27.
The EMP submitted by Ochre Shimmer in support of its application to
the Department of Mineral Resources for a prospecting right,
estimates the duration of final rehabilitation of the site at 3
months. Assmang contends that the rehabilitation process should
in
terms of the EMP have commenced on 24 October 2016 i.e. 3 months
before the expiry of the contract between Assmang and Ochre
Shimmer.
The stance taken by Assmang is that the applicant could not be
allowed to start rehabilitation when it should in
fact have commenced
the rehabilitation process. This EMP which Assmang so heavily relies
upon, does not prohibit prospecting during
the prospecting phase and
it in fact states that rehabilitation will be done concurrently with
prospecting. In any event the Access
agreement between Assmang and
Ochre Shimmer (clause 7 thereof) provides for rehabilitation to take
place within 60 days of termination
of the agreement, for whatever
reason, failing which Assmang would be entitled to employ a third
party to attend to the rehabilitation,
the costs thereof to be paid
by Ochre Shimmer. The Access agreement also
records that Ochre Shimmer has
procured a financial guarantee
in favour of the Department of Minerals and Energy as security for
its environmental obligations.
This
reason for denying the applicant access to the property is in my view
insupportably.
28.
Mr Alli who appeared for Assmang, argued in addition that the
applicant is not entitled to interdictory relief since it has
an
alternative remedy, that of a claim for damages against Assmang. In
Setlogelo v Setlogele
1914 AD 221
the requisite is stated as
"the absence
of
similar
protection
by
any
other
ordinary remedy".
While it may be that a claim for damages
is an alternative remedy, it is not necessarily a bar to the granting
of an interdict.
(See
Peri-Urban
Areas Health Board v Sandhurst
Gardens
1965(1)
SA TPD
Health
Board
v
Sandhurst
Gardens
1965(1) SA TPD 683 at 684 G.) Would a
claim for damages constitute similar protection of the applicants
rights? I think not.
It must be noted that the granting or
refusal of an interdict is discretionary.Given the history of this
matter, Assmangs obstructive
attitude and the continuous violation of
the applicant's rights I see no reason why the applicant should be
put through the expense
and delay of an action for damages when an
interdict is the obvious remedy.
29.
I now turn to the issue of urgency. Assmang has denied that the
matter is urgent and if found to be so it contends that the
urgency
is of the applicant's own making. Firstly in making payment as per
paragraph 3 of Pakati J's order one year late and secondly
by waiting
approximately one month and one week after making such payment before
bringing this application. As already stated herein
the applicant has
explained that it was not in a position financially to make payment
to Ochre Shimmer before it did so. I have
no reason not to accept the
explanation. Regarding the period after payment, the applicant states
that it had secured equipment
for
its
operations from 18 October 2016. Two and a half weeks later, when
negotiations with Assmang proved fruitless, this application
was
launched. Having regard to the expiration date of the contract Iwas
of the view that this application was indeed urgent.
Costs
30.
The applicant being substantially successful, there existed no reason
to depart from the rule that costs follow the result.
The applicant
however sought a punitive cost order against Assmang. An award of
attorney and client costs is however not lightly
granted, and if
granted it would be on occasion where the opposing party had
displayed dishonesty, improper conduct or fraud -
generally ma/a
t
ides.
I am not of the view that this is a
proper case to award a punitive cost order
The
above are the reasons for the order of
1
0
N
ovember
2016.
__________________
CC
WILLIAMS
JUDGE
For
Applicant:
Adv. MJ Cooke
Makgahlela Mashaba
Attorneys
c/o Mervin Joel Attorneys
For
1st Respondent:
Adv. Y Alli
Edward Nathan Sonnenbergs
c/o Duncan & Rothman
Attorneys