No. SC 51/03
Appeal No. 113/03
MINING (PRIVATE) LIMITED
METALLON CORPORATION LIMITED
COURT OF ZIMBABWE
CHEDA JA & GWAUNZA JA
NOVEMBER 25, 2003 & JANUARY 15, 2004
C Andersen SC,
with him G
for the appellant
W W Morris,
for the respondent
This is an appeal against a judgment of the High Court which
dismissed with costs the appellants application
for an order,
confirming the jurisdiction of the High Court in a dispute between
the appellant (Stanmarker) and the respondent (Metallon),
and granting leave for the service of Stanmarkers summons and
declaration in respect of its claim for damages against Metallon
be effected at Metallons registered office in Johannesburg,
factual background is as follows. Stanmarker is a mining company
registered in terms of the laws of Zimbabwe, and Metallon
South African company with its registered office in
On or about 24 June 2002,
Stanmarker and Metallon concluded a written agreement in respect of
their intended acquisition of
the shares in Independence Mining
(Private) Limited (Independence), a Zimbabwean company which
owns five gold mines in Zimbabwe
How Mine, Shamva Mine,
Arcturus Mine, Mazowe Mine and Redwing Mine. The
acquisition was to be effected
through a company to be incorporated
in Zimbabwe (Newco).
the relevant time Independence was a wholly owned subsidiary of
Cableair Limited (Cableair), a private company limited
shares and incorporated in the United Kingdom. In turn,
Cableair was a wholly owned subsidiary of Lonmin Public Limited
Company (Lonmin), incorporated in the United Kingdom.
Lonmin was, therefore, the holding company of Cableair, which
holding company of Independence, which owned the five mines.
intended to dispose of its shares in Cableair and, consequently,
divest itself of its interests in Independence. Thus,
on 28 October
2002 Lonmin wrote to the Minister of Mines and Mining Development
(the Minister) as follows:
we take the opportunity first of all to explain that the sale of our
Zimbabwe assets is the result of a decision taken, and made
some time ago, to concentrate on our core business only, which is the
mining and refining of platinum group metals.
agreement concluded by Stanmarker and Metallon on 24 June 2002
was in the form of written Heads of Agreement (the Heads).
Clause 2.2 thereof provided as follows:
Heads set out the main principles upon which the parties will
negotiate the detailed written agreements referred to herein.
Heads (save for 2.3, 9, 10 and 11) accordingly do not constitute
legally binding rights and obligations on the parties hereto.
Heads will fall away and be of no force and effect upon the signing
of the detailed written agreements and them becoming
accordance with their terms.
the only legally binding rights and obligations were those set out in
Clauses 2.3, 9, 10 and 11.
provided as follows:
parties undertake with effect from the signature date and until the
expiry of three months thereafter that they will negotiate
other in good faith in respect of the detailed written agreements and
that, subject to 3.5, they will not negotiate with
Lonmin or any
other person in respect of any matter relating to the acquisition of
all or part of the share capital, assets or business
or its immediate holding company.
referred to in Clause 2.3, provided as follows:
shall, on behalf of Newco, negotiate with Lonmin and make an offer to
acquire Independence or its immediate holding company
for the amount
of approximately twelve million US Dollars or such other amount
agreed upon between the Shareholders.
Clause 11.1 provided as follows:
the signature date and for a period of three months thereafter,
neither party shall, without the prior written consent of the
party, engage in or enter into discussions with any other party with
an interest in acquiring the share capital or business
Independence or its immediate holding company and/or engage in or
enter into discussions with any other party desirous of achieving
similar objectives than, or competing with, Newco.
Metallon pursued negotiations with Lonmin which resulted in an
agreement of the sale of the shares in Cableair to
International Investments (Pty) Ltd (Pemberton), a company
incorporated in terms of the laws of the British Virgin
its registered office in the Virgin Islands. Regrettably, in its
opposing affidavit Metallon did not indicate what
was with Pemberton.
it is pertinent to note that whilst Metallon alleged that the shares
in Cableair were acquired by Pemberton, on 5 November
Mzilikazi Khumalo (Khumalo), the chief executive of
Metallon, wrote to the Minister as follows:
serves to confirm that Metallon
Corporation Limited, a
black-owned South African company controlled by myself, has
acquired 100% of Independence Gold Mining Zimbabwe (Private) Limited
from Lonmin Plc.
does appear, therefore, that either Pemberton was a wholly owned
subsidiary of Metallon, or that it acquired the shares in Cableair
for and on behalf of Metallon.
Metallon admitted that it pursued negotiations with Lonmin which
resulted in the sale of the shares in Cableair being concluded,
denied that the negotiations were embarked upon before the restraint
period of three months, specified in Clauses 2.3 and
11.1 of the
the circumstances, Stanmarker decided to institute a civil action in
the High Court against Metallon claiming damages for breach
contract in the sum of US$27 315 797.00. However, as
Metallon is a peregrinus,
and the High Court did not, therefore, have the jurisdiction to
entertain such an action, which sounded in money, unless the
was within Zimbabwe, or property belonging to the defendant
was within Zimbabwe and could be attached in order to confirm the
of the High Court, Stanmarker applied in the court a quo
for an order confirming the jurisdiction of that court in the
application was subsequently dismissed with costs on the ground that
the beneficial interest which Metallon had in Independence
the kind of interest which could be attached to confirm the
jurisdiction of the court. Aggrieved by that decision, Stanmarker
appealed to this Court.
common law position on the attachment of property in order to confirm
jurisdiction was set out by BECK J (as he then was)
Distillers Ltd v Zietkiewicz and Ors
1980 ZLR 135 (GD) at 136 F-H as follows:
well settled common law, for which there is no dearth of judicial
authority, is that for claims that sound in money brought by
or a peregrinus
against a peregrinus,
there must be an arrest of the person of the defendant peregrinus
or an attachment of his property within the territorial jurisdiction
of the Court in order to found jurisdiction, or to confirm
in those cases where some other jurisdictional ground
exists in relation to the claim such as, for example, that it
a contract concluded or a delict committed within the
Courts territorial limits of jurisdiction. Such arrests or
are necessary in order to satisfy, albeit only partially
and imperfectly in some cases, the doctrine of effectiveness, for the
will not concern itself with suits in which the resulting
judgment will be no more than a brutum
v Foord 1924 WLD 81 at
87; Thermo Radiant Oven
Sales (Pty) Ltd v Nelspruit Bakeries (Pty) Ltd
1969 (2) SA 295 (AD) at 300D and 307A-311E).
common law position was altered by s 15 of the High Court of
Zimbabwe Act [Chapter 7:06]
which reads as follows:
any case in which the High Court may exercise jurisdiction founded on
or confirmed by the arrest of any person or the attachment
property, the High Court may permit or direct the issue of process,
within such period as the court may specify, for service
either in or
outside Zimbabwe without ordering such arrest or attachment, if the
High Court is satisfied that the person or property
within Zimbabwe and is capable of being arrested or attached, and the
jurisdiction of the High Court in the matter shall
be founded or
confirmed, as the case may be, by the issue of such process.
whereas under the common law there must be an arrest of the person
of the defendant peregrinus
or an attachment of his property within the territorial jurisdiction
of the court in order to found jurisdiction, or to confirm
in those cases where some other jurisdictional ground
exists in relation to the claim, the court now has a discretion as
the arrest of the defendant peregrinus
or the attachment of his property should be ordered. However, the
plaintiff still has to show that the defendant peregrinus
is within Zimbabwe or that property belonging to the defendant
is within Zimbabwe and is capable of being attached.
the present case, as the contract in question was concluded in
Zimbabwe, a causa
from attachment of Metallons property, exists. Nevertheless,
Stanmarker had to establish that Metallon had property in
which could be attached.
said that, I now wish to deal with Stanmarkers application to
adduce further evidence on appeal. The application was
made at the
hearing of the appeal and was opposed by Metallon. After hearing
both counsel, we reserved our decision on the matter
that the decision would form part of the main judgment in this
basic requirements which must be satisfied by the applicant in an
application for leave to adduce further evidence on appeal
out by HOLMES JA in S
v de Jager 1965
(2) SA 612 (A). At 613 B-E the learned JUDGE OF APPEAL said:
this Court has, over a series of decisions, worked out certain basic
requirements. They have not always been formulated
in the same
words, but their tenor throughout has been to emphasise the Courts
reluctance to re-open a trial. They may be summarised
should be some reasonably sufficient explanation, based on
allegations which may be true, why the evidence which it is sought
lead was not led at the trial.
should be a prima facie
likelihood of the truth of the evidence.
evidence should be materially relevant to the outcome of the trial.
R v de Beer
1949 (3) SA 740 (AD) at p 748; R
v Wiemers and Ors 1960
(3) SA 508 (AD) at pp 514-5; R
v Madikane 1960 (4) SA
776 (AD) at p 780; R
v Nkala 1964 (1) SA
above requirements were subsequently quoted with approval by this
Court in S v Mutters
and Anor 1987 (1) ZLR
202 (SC) at 204G-205A; S
v Osborne 1989 (3) ZLR
326 (S) at 336 D-G; and S
v Kuiper 2000 (1) ZLR
113 (S) at 116 A-C.
now wish to examine Stanmarkers application in order to determine
whether the requirements set out above have been met.
the founding affidavit, a director of Stanmarker averred as follows:
the time of the preparation, argument and determination of the case
in the court a quo,
the appellant did not have the additional information relating to the
acquisition by the respondent of Independence Gold Mining
(Private) Limited that it seeks leave to produce. However,
subsequent to the handing down of the judgment of the court
on 25 March 2003, and as a result of the conduct of the
respondent in respect of the operations of Independence Gold Mining
Zimbabwe (Private) Limited and its own corporate activity in
Zimbabwe, the appellant has become aware of or has received from
sources, documentation which clarifies the relationship
between the respondent and Independence Gold Mining Zimbabwe
and sets out in more detail the exact nature of the
respondents interest in Independence Gold Mining Zimbabwe
determining the validity of these averments, the date when the
proceedings in the court a quo
were instituted is of crucial importance. The proceedings were
instituted as an urgent ex
application on 30 January 2003. When it was subsequently
placed before the learned judge in chambers, he directed
that it be
served on Metallon, and agreed to hear it later on an urgent basis.
The application was later heard on 8 March
2003 and the judgment
was handed down on 25 March 2003.
of the documents sought to be produced as additional evidence on
appeal are not dated, for example, those prepared for the
marking the launching of Metallon in Zimbabwe. These documents
show, inter alia,
Metallons Family Tree, and describe Independence as a
division of Metallon. The documents would not have been available
to Stanmarker when the urgent chamber application was filed in
January 2003 because Metallon was only launched in Zimbabwe on
the most important documents sought to be produced are dated, and
shed a lot of light on Metallons control over Independence
first of these documents is a letter bearing Metallons letterhead
and which was written to the Minister by Nonkqubela Maliza
(Maliza), Metallons head of corporate affairs. It is dated
12 March 2003, long after the urgent chamber application
been filed, and reads as follows:
INVITATION TO THE LAUNCH OF METALLON GOLD IN ZIMBABWE AND A TOUR OF
Chairman of Metallon Corporation, Mr Mzi Khumalo, would be
honoured if the Minister could join him and his colleagues
they launch Metallon Gold in Zimbabwe.
We would appreciate it greatly if the Minister would avail himself
to deliver the keynote address at this event.
event will be held on 03 April 2003 at 18H00 at Amanzi
Restaurant, Harare, and will be followed by a visit to Shamva Mine
Friday 04 April at 10H00. (emphasis added)
second document is another letter to the Minister, dated 28 March
2003. It was written by Maliza and, in relevant part,
to the telephone discussion between the undersigned and Honourable
we are pleased to forward:
letter detailing our
partnership with the Manyame Consortium in Independence Gold and an
outline of our production and expansion plans for Independence
. (emphasis added)
third document is a letter written by Greg Hunter, a director of
Metallon. It is dated 28 March 2003 and, in relevant
reads as follows:
STATUS OF INDEPENDENCE GOLD MINES (PVT) LIMITED
OF SHARES IN THE COMPANY
mentioned in my letter dated 27th March
2003, I indicated that we had now signed Heads of Agreement with a
grouping of local Zimbabweans that would allow them
to purchase up to
30% of the company. The grouping have elected to call themselves
the Manyame Consortium.
structure of the deal will result in the formation of a private
company, Newco, which will hold the 30%.
have also agreed that Cableair and Newco will procure the formation
of the staff incentive trust (SIT), which will acquire up to
initiative we have instituted to
support our operations and to ensure that they are able to produce
without disruption is
the procurement of maize meal, rock drill spares, cement, steel
balls, pump spares and even cyanide outside of Zimbabwe. To
have outstanding orders for the above amounting to some R18.3m over
the next 3-6 months.
are also actively looking at the sponsorship of the School of Mines
in Bulawayo, a bursary scheme for the University and we have
injected more than Z$1m into our local school bursary fund. In
addition we continue to look at the best option for upgrading
the buses at our mines, a programme for the upgrading of housing
and the upgrading of clinics.
the above issues are continually examined, planned and where possible
are committed to building a substantial and profitable gold producer
in Zimbabwe and we have the assets and the people to do this.
fourth and last document of relevance in the application for leave to
adduce further evidence is a letter to the Minister.
It is dated
2 September 2003 and was written by Collen Gura, a director
of Independence. The significance of this letter
is that it shows
that Independences letterhead had been altered so as to indicate
that the company had become a division of Metallon.
the letter shows that Independence has three directors A J Reve
(Reve), G Hunter (Hunter)
and C Gura (Gura).
is pertinent to note that Reve and Hunter, both of whom are
South African, are also members of Metallons Board of
the test set out in S v
de Jager supra, I
am satisfied that Stanmarker has proffered a reasonably sufficient
explanation as to why the evidence sought to be adduced on
not led in the court a quo.
In addition, I am satisfied that the evidence is cogent and
materially relevant to the outcome of this appeal. The application
for leave to adduce further evidence is, therefore, granted.
However, I make no order as to costs as neither party was at fault.
said that, I now revert to the main issue in this appeal.
legal requirements for an order such as the one sought by Stanmarker
in the court a quo
were set out by OLIVIER J in Numil
Marketing C C and Anor v Sitra Wood Products PTE Ltd and Anor
1994 (3) SA 460 (C). At 463 F-I the learned judge said:
is common cause that an applicant for attachment must show that:
has a prima facie
cause of action against the defendant;
defendant is a peregrinus
of the Republic; and
defendant is within the area of jurisdiction of the Court or that the
property in which the defendant has a beneficial interest
requirement to establish a prima
facie cause of action
means, in this context, that the applicant must tender evidence
which, if accepted, will establish a cause of action.
The fact that
such evidence is in dispute does not preclude an order for attachment
being granted. (See Longman
Distillers Ltd v Drop Inn Group of Liquor Supermarkets (Pty) Ltd
1990 (2) SA 906 (A) at 914 E-F; Inter-Science
Research and Development Services (Pty) Ltd v Republica Popular de
Mocambique 1980 (2) SA
111 (T) at 118H-119A).
my view, those are the requirements which Stanmarker had to meet in
the court a quo.
The learned judge correctly fond that the first two requirements
had been met.
with regard to the third requirement he concluded that although
Metallon had a beneficial interest in Independence, that
was not the
kind of interest which could be attached to confirm jurisdiction.
In my view, the learned judge erred in this regard.
interest in property short of ownership nevertheless constitutes a
right capable of being attached and sold in execution. Thus
Nkwana v Hirsch
1956 (2) SA 219 (T), a decision of the Full Bench of the Transvaal
Provincial Division, DE WET J said the following at
seems to me that any vested right or interest which a debtor is
himself able to sell or dispose of for value is capable of attachment
and capable of being sold in execution for the benefit of a judgment
in Soja (Pty) Ltd v
Tuckers Land Development Corporation (Pty) Ltd and Anor
1981 (2) SA 407 (W) at 409 F-H NESTADT J said:
question that arises is whether what was purportedly attached was
capable of attachment. A creditor, having been granted a judgment
sounding in money against its debtor and not obtaining satisfaction
thereof, is entitled to have issued a writ of execution which
as a warrant to the Deputy Sheriff
to take possession, by
attachment, of so much property of the debtor as will realise
public sale the amount of the judgment and costs. Such property
includes the judgment debtors incorporeal rights (Herbstein
Van Winsen The
Civil Practice of the Superior Courts in South Africa
3 ed at 615, 635). The learned authors give a number of
examples of incorporeal rights which may be attached in execution.
One of them is the right, title and interest of a litigant in an
action (Marais v
Aldridge and Ors 1976
(1) SA 746 (T) at 750).
test or criterion would seem to be that laid down by the Transvaal
Full Bench in Nkwana v
Hirsch 1956 (2) SA 219
(T) which was approved in Nkwana
v Hirsch 1956 (4) SA
various types of interests and incorporeal rights in property are
capable of being attached and sold in execution. In our
jurisdiction, the procedure to be followed in attaching incorporeal
property or incorporeal rights in property is set out in r 343
of the High Court Rules, 1971. Once the right or interest is
identified, there should be no difficulty in attaching it.
the present case it was common cause that Metallon had a beneficial
interest in Independence. In addition, and more importantly,
clear from the additional evidence admitted on appeal that Metallon
has complete control over Independence and its assets.
the first place, the documents produced by Stanmarker show that two
of the three directors of Independence are also directors
Metallon. That means that Metallon is in effectual and constant
control of Independence.
the documents indicate that all the production and expansion plans
are prepared for Independence by Metallon.
thirdly, Metallon is directly involved in all operational issues
affecting Independence, which include the procurement, outside
Zimbabwe, of maize meal, cement, rock drill spares, steel balls, pump
spares and even cyanide. In addition, Metallon takes decisions
matters such as the upgrading of buses, houses and clinics at the
five mines, matters which in fact should be handled by Independence.
Undoubtedly, it is Metallon which would decide whether the mines
should be sold or not.
my view, the control which Metallon has over Independence and its
assets is of great commercial value. It is property which
attached and sold in execution. I find support for that view in the
House of Lords decision in Short
and Anor v Treasury Commissioners
 AC 534 (HL).
that case, all the shares of a company called Short Brothers
(Rochester and Bedford) Limited (Short Brothers) were being
acquired by the Treasury under a Defence Regulation which provided
for payment of their value as between a willing buyer and a willing
seller. Each share was valued on the basis of the quoted market
the shareholders argued that as all the shares were being acquired,
stock exchange prices were not a true criterion, and
that there were
two ways of determining the real value of the shares. The first was
that the whole undertaking should be valued
and the global price thus
determined apportioned among the shareholders; and the second was
that the value of the shares should be
the price which one buyer
would pay for all the shares, which price should then be similarly
the alternative ways of determining the value of the shares were
rejected, it was conceded by the Court of Appeal and the
Lords that had any individual shareholder held a sufficient block of
shares to give him control of the company, then he
might have been
entitled to a higher price than the total stock exchange value of all
his shares, since he would then have been selling
an item of property
control additional to his shares.
546 LORD UTHWATT said:
desire only to add that if some one shareholder held a number of
shares sufficient to carry control of the company, it might well
that the value proper to be attributed to his holding under the
regulation was greater than the sum of the values that would be
attributed to the shares comprised in that holding if they were split
between various persons. The reason is that he has something
sell control which the others considered separately have
respectfully agree with the learned LAW LORD.
the learned judge in the court a quo
ought to have granted the order sought by Stanmarker to enable it to
litigate at home.
the circumstances, the following order is made
appeal is allowed with costs.
2. The order of the court a quo
is set aside and the following is substituted
(a) The jurisdiction of this
court in the dispute between the applicant and the first respondent
is hereby confirmed.
(b) The applicant is granted
leave to serve the Summons and Declaration in respect of its claim
for damages against the first respondent,
together with a copy of
this Order, upon the first respondents legal practitioners, Messrs
Gill, Godlonton & Gerrans.
(c) Service of the Summons and
Declaration, together with a copy of this Order, may be made on the
first respondent, or any responsible
person, at 161 Rivonia
Road, Sandton, Johannesburg, South Africa, by the Sheriff of
Johannesburg, Gauteng Province, South Africa,
or his lawful
Deputy or Assistant. The said Sheriff, Deputy or Assistant shall
certify service of the said documents by affidavit
sworn to before a
Notary Public in South Africa and filed of record with this
(d) The costs of this application
shall be paid by the first respondent.
JA: I agree.
JA: I agree.
appellant's legal practitioners
Godlonton & Gerrans,
respondent's legal practitioners