CHIROSWA MINERALS (PRIVATE) LIMITED
BASE MINERALS (PRIVATE) LIMITED
MINISTER OF MINES
MORIS TENDAI NYAKUDYA
VAMBO MILLS (PRIVATE) LIMITED
HIGH COURT OF ZIMBABWE
HARARE, 5 May 2009 and 21 May 2009 and 16 June 2010
F M Katsande, for the applicants
R Benjamin, for the first respondent
S Hwacha,for the second and third respondents.
BHUNU J: The first applicant herein after referred to as the Grantor is the registered owner of certain six mining claims situate in the district of Shamva being:
Name Registration Number
Dodge 1 1990/ 1 BM
Dodge 2 20079/80 BM
Dodge3 11392 BM
Dodge 4 11541 BM
Dodge5 11542 BM
Dodge 6 15737 BM.
The second respondent is the tributor presently occupying the said mining claims by virtue of a tribute agreement. The parties however concluded two tribute agreements. There is a dispute concerning the validity of the two agreements.
The first agreement is dated 17 May 2005 and is valid for the duration of ten years extending from 23 May 2005 to 22 May 2015.
On the other hand the second agreement is dated the following day 18 May 2005 and is for the duration of three years from 23 May 2005 to 22 May 2008.
The first agreement was not registered with the Mining Commissioner whereas the second agreement was registered on the date of its execution that is to say 18 May 2005.
It appears plain to me that the first tribute agreement was superseded, novated or amended by this second agreement. This is for the simple but good reason that it was never registered with the mining commissioner. If it was meant to be binding there was no reason why the same parties could have concluded a different tribute agreement in respect of the same claims the following day after it had been concluded.
The first agreement having been novated, abrogated, superseded, or amended by the second agreement it became a nullity and of no force or effect. It is therefore not necessary to consider its terms and conditions.
It is however necessary to consider the terms and conditions of the second tribute agreement which was apparently valid. That tribute agreement was subject to specified terms and conditions which were binding on the parties. The tribute agreement provided for the payment of royalties to the grantor.or rentals. Clauses 2(j) 4 of the agreement provided as follows:
“2 (j) The tributor shall furnish to the grantor not later than the 15thof each month a statement, supported by all relevant documents, of all tonnages treated and the weight of all valuable products recovered from the operations of the previous month
4. In consideration of the rights granted by the grantor to the tributor under this agreement the tributor shall pay to the grantor a royalty amount of 5% of the total gross value of the gold and/or other valuable products worn by the tributor from the said mining location or a rental of $.... payable in the manner hereinafter setforth.”
Clauses 10 and 11 of the second agreement provided for penalties and remedies in the event of breach as follows:
“10. Should the tributor commit any breach of the conditions of this agreement, the grantor may make immediate demand upon the tributor to rectify any such breach within seven days from the date of the demand and should the tributor fail so to rectify such breach of agreement, then and in such case the grantor shall have the right to terminate this agreement by giving one month’s notice in writing to that effect to the tributor subject to such determination not in any way affecting any claim for damages sustained by the Grantor in respect of such breach.
11. (a) The tributor on the terms of this agreement whether by effluxion of time or otherwise shall remove his machinery or plant from the said mining location within three months or such longer period as may be agreed upon and shall hand over the said mining location with all workings constituting a danger to persons or stock dully fenced or protected in terms of the Mines and Minerals Act of Zimbabwe.”
On August 2006 the parties concluded another agreement nullifying the principal agreement and concluding a fresh agreement of sell. The terms of which provided as follows:
“The principal agreement was signed and witnessed on the 8thday of August 2005.
Whereas it is agreed that:
The principal agreement became null and void on 30 June 2006 and the Tribute Agreement likewise became null & void.
Now therefore, in view of prevailing circumstances within Zimbabwe the seller has agreed to grant an extension to the principal agreement to 31 December 2006 on the following terms and conditions:
All monetary claims, capital, payments, interest shall be denominated in US dollars.
That the first US$5000-00 capital which was due & payable by 30 April 2006 has been paid at the Inter-bank rate ruling at 31 July 2006 in the sum of Z$500 000 000-00 (Five hundred million dollars Zimbabwean dollars).
That a minimum of US$ 5000-00 capital payment shall be made on the last day of every third month. In Zimbabwe dollars at an exchange rate’, which shall be negotiable, in relation to the market rate for each U.S dollar, on that date, save that payments shall be due on or before 31 December 2006.
That on the last day of each month a sum in US dollars equivalent to 50% per annum interest on the capital sum of US$75 000-00 shall be paid in Zimbabwe dollars calculated at the exchange rate each month in relation to the market rate for each US dollar on that date.
That the monthly payment referred to in para 1.1.4 shall continue until such time as the capital sum has been fully paid up.
The foregoing shall hold in principle until 31 December 2006 at which time the capital payment schedule shall be reviewed.
Tribute payments have to be brought up to date not later than 30 September 2006 and thereafter paid in accordance with the agreement not later than 10thof the month following sale covered by a full declaration of sales in accordance with the terms of the Tribute Agreement.
In the event of non compliance with any of the terms and conditions granted in this addendum, the seller shall have the right to repossess the assets and to cancel the Tribute Agreement with immediate effect without further notice or compensation.” (My emphasis)
On 9 October 2006 the grantor addressed a notice of cancellation in the following terms:
“NOTICE OF CANCELLATION OF AGREEMENT
The above matter and in particular paragraph 3.0 of the Memorandum of Agreement dated 8 August 2006 refers.
From a perusal of or records, the tribute royalties have not been paid as agreed by not later than 30 September 2006.
Notice is hereby given that you have been given 30 days notice to rectify the breeches of the terms of the ten year agreement dated 17 May 2005.
In the event of your failure to rectify the breeches in regard to the Memorandum of Agreement dated August 2006, Chiroswa Minerals are entitled to cancel the ten year agreement without further notice to you.”
The central issues for determination are whether or not the respondents have persistently breached the tribute agreement as alleged or at all. If so, whether or not the tribute agreement was procedurally cancelled in terms of the laid down procedures as provided in the Tribute Agreement.
The basis of the applicant’s claim for breach is non payment of dues including royalties. It also claims breaches of procedures to enable calculation of amounts due and owing to it.
The respondents vehemently denied breaching any of the terms of the agreement as alleged or at all. They alleged that all payments were made in terms of the Tribute agreement directly into Mr Grove’s bank account on his instructions. Mr Grove is the applicant’s managing director.
It is clear that that there are serious disputes of facts which are incapable of resolution on the papers. It is accordingly ordered:
That the mater be and is hereby referred to trial after observing all the pre-trial preliminaries with the papers already filed standing as pleadings with parties being granted leave to file any supplementary papers.
Costs shall be costs in the cause.
FKatsande & Partners, applicant’slegal practitioners
Dube Manikai & Hwacha. respondent’s legal practitioners