Amakutuwa v Metals Namibia (pty) Ltd and Others (APPEAL 36 of 2009) [2009] NAHC 109 (30 July 2009);
(Not
important)
CASE NO.: A
36/2009
IN
THE HIGH COURT OF NAMIBIA
In the matter between:
MALAKIA
JOSES AMAKUTUWA
APPLICANT
and
METALS NAMIBIA (PTY) LTD
FIRST RESPONDENT
THE MINISTER OF MINES AND ENERGY,
NAMIBIA SECOND RESPONDENT
METALS AUSTRALIA LIMITED
THIRD RESPONDENT
BRIAN MOORE
FOURTH RESPONDENT
CORAM: MANYARARA,
A J
Heard on: 26 - 29 May 2009; 9 June
2009
Delivered: 30 July 2009
JUDGMENT
MANYARARA, AJ: [1] This
is an application for an order in the following terms:
Declaring
certain agreements entered into by and between the parties named
therein relating to exclusive prospecting licences 3306 and 3308 as
null and void ab
initio
and of no force and effect. (The alternative relief declaring such
agreements to have been procured by fraudulent means and setting
them aside has been abandoned).
Directing the second
respondent to transfer back into the name of applicant the said
exclusive prospecting licences upon the same terms and conditions
that attached to such licences upon the date of the original
granting thereof to applicant, alternatively on such terms and
conditions as may be imposed by second respondent in accordance with
the provisions of the Minerals Act;
Directing first
respondent to pay the costs of this application on the scale as
between attorney and client; and
Granting to applicant
such further and/or alternative relief as the Court may deem fit.
The parties are –
Applicant
who is a metallurgist and plies his trade for part of the time “on
land” and part “at sea” (sic).
First respondent
(hereinafter referred to as “Metals Namibia”) is a
Namibian registered company with its offices in Windhoek.
Second respondent is the
Minister of Mines and Energy against who no costs order is sought in
these proceedings.
Third respondent
(hereinafter referred to as “Metals Australia”) is an
Australian registered company with its offices in Perth, Australia;
and
Fourth respondent
(hereinafter referred to as “Moore”) is a businessman
with his offices also in Perth, Australia.
[2] The applicant is represented by Mr
Barnard and Ms Vivier represents the first and third respondents. No
one represents the fourth respondent and it will be assumed that he
abides the decision of the Court.
[3] The founding affidavit is a
lengthy and inelegantly phrased document which does not make for easy
reading but the relevant averments extracted from the document may be
summarized as follows:
1. During 2005 applicant applied for
and obtained exclusive prospecting licences 3306 and 3308 to explore
for uranium in the Erongo Region. His intention was to form a joint
venture with a technical partner to conduct the exploration
activities permitted by the Licences and the technical partner would
also fund the project.
2. The applicant commenced negotiating
with Moore, to whom he had been referred by an acquaintance called
Udo Froese (“Froese”) as a person capable of filling the
role desired by applicant. However, when applicant informed Moore of
the joint venture, Moore said that he would find someone else to fill
the role. Applicant agreed to the offer although Moore had
“previously presented himself as the “investor”
required by applicant.
3. However, Moore subsequently advised
applicant that an Australian registered company called Australian
United Gold Limited (“AUL”) was interested in the
proposed joint venture. He suggested that applicant was to take up
some shares in one of his (Moore’s) Australian registered
companies, Omegacorp, which would be the “technical party”
holding an 80% interest in the joint venture and that Moore and
applicant could jointly have a 20% interest in the joint venture
apart from controlling it. But when Matthew Yates, a director of
Omegacorp, was approached to finalise the deal he said that he was no
longer interested in the project “and we must seek a new
partner.”
4. It was at this stage that Moore
informed applicant that AUL “did not have cash” (sic)
after all to invest in the joint venture as a substantial payment
upfront for the 80% share it wished to hold in the joint venture but
AUL could, instead, pay the company that would hold the 20% interest
in the joint venture an amount of US$30 000.00 and transfer to such a
company 5 million shares in AUL. Applicant was not satisfied with the
proposal and instructed Moore to tell AUL that he required a minimum
of 8 million shares plus the US$30 000.00 offered by AUL.
[4] Applicant then sets out at
inordinate length his vision for the joint venture he had in mind.
This would have involved forming a close corporation with the name
Reliance Investment Agency CC (“RIA”) in which Moore,
Froese and applicant were to be “directors and shareholders”
with each of them holding 33.3% of the shareholding. The EPLs held
by applicant would then be transferred to RIA and AUL would pay the
amount of US$30 000.00 and transfer to RIA 8 million shares in AUL as
consideration for the entitlement to obtain an 80% interest in the
joint venture. A new company was then to be formed or purchased to
which RIA would transfer the EPLs and take up 20% of the shareholding
while AUL took up 80% of the shares in the new company. The new
company thus formed was New Mining Company, in respect of which Moore
addressed a letter to the Mining Commissioner (Annexure “M14”)
in the following terms:
“Re:
Application for the transfer of EPLS 3306 and 3308 from Malakia
Joses Amakutuwa to New Mining Company (Pty) Ltd.
My
partner Malakia Joses Amakutuwa and I would like to transfer 100% of
our interest in EPL’s 3306 and 3308 to the above company which
is a fully owned subsidiary of Australia United Gold (AUL), an
Australian public company listed on the Australian Stock Exchange.
AUL
will commence exploratory work as soon as the licences have been
transferred. Their geologist, Anthony Gates, is highly experienced in
uranium projects. He is on standby to travel to Namibia.”
[5] The Mining Commissioner approved
the transfer with effect from 14 March 2006 as appears from his
endorsement on the EPLs bearing his official stamp dated 7 September
2006.
[6] During the course of the period
from July 2005 to October 2005 negotiations continued between Moore,
the applicant and representatives of AUL for the purpose of giving
content to the joint venture contemplated by applicant. According to
applicant, a copy of the draft heads of agreement between AUL, RIA
and himself (Annexure “M5” to the founding affidavit) was
dispatched to him on an unspecified date during October/November 2005
and he signed the document as “Authorized Person”
representing RIA after making notes on the document of the amendments
he wished to be made to the agreement. Applicant’s signature is
the only signature appearing on “M5”. The document is
not dated nor did applicant put a date to his signature.
[7] The founding affidavit continues
as follows:
“Unbeknown
to me, copy of the draft heads of agreement without
my notes on it, but apparently still bearing my signatures (sic), was
used by AUL as a purported final agreement upon the basis of which it
addressed an announcement to the Australian Stock Exchange on 7
November 2005, stating that AUL ‘will acquire a 100% interest
in the two prospecting licences from Reliance Investment Agencies CC,
a Namibian registered company” (sic).
[8] Applicant avers that the document
on which the respondents rely (Annexure “M 11”) was
furnished to his legal representative, Mr Kasuto, “during or
about April 2008” (sic) and it was then that he “viewed
it for the first time” and noticed that the document bore his
signature. The document is dated 7 November 2005 and the implication
is that applicant’s signature was forged.
[9] This averment is disputed by the
respondents. They contend that a copy of Annexure “M 11”
was dispatched to all the parties and applicant signed and returned
to AUL the copy sent to him in terms of Clause 7 of the heads of
agreement which provides that –
“This
agreement and any amendments may be executed in two or more
counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.”
[10] Applicant contends that Annexure
“M11” is null and void ab
initio for several reasons
which all converge on the contention that as RIA was never registered
either as close corporation or as a company (which is common cause),
it could not be a party to the alleged agreement.
[11] Mr Barnard then embarked on a
lengthy dissertation on the passing or not passing of ownership of
the EPLs to first respondent. In my view, the relevant point made is
that the agreement is a nullity because at the time it was made it
was impossible of performance. See A.J. Kerr: The
Principles of the Law of Contract
6th
Ed p261 and the cases cites therein.
There is merit in the submission.
[12] Firstly, RIA is cited in the
agreement as “Reliance Investment Company CC a company
incorporated pursuant to the laws of Namibia” and it is not
disputed that RIA never was nor has it since been registered as a
company in accordance with the laws of Namibia, while the capacity in
which applicant becomes a party to the agreement is not defined.
[13] Secondly, Annexure “M14”
by which Moore purportedly applied for transfer of 100% of his and
applicant’s shareholding in RIA is a nullity by reason of the
fact that the EPLs belonged to applicant and never passed to RIA (as
implied by Moore’s letter to the Mining Commissioner) because
such an entity was never created and Moore had no interest in the
EPLs to pass to New Mining Company. In the circumstances, the
description of RIA as “the sole beneficial owner …..
entitled to be the registered owner of the Licences” and of
applicant as “the current registered owner of the Licences and
holds the beneficial interest in the Licences on trust for RIA
(which) has full right, power and authority to sell, assign and
alienate the Licences” are meaningless and may be safely
disregarded. The same goes for the provisions relating to the payment
purportedly to be made by AUL to RIA for a stake in the EPLs and for
applicant’s signature as “Director/Authorised person for
and on behalf of Reliance Investment Agencies CC”, a
non-existent entity, and Moore’s co-signature also as
“Director/Authorised Person” of that entity.
[14] On 2 February 2007 first
respondent, a wholly owned subsidiary of AUL, caused applicant and
Moore to execute on behalf of (non- existent) RIA and themselves a
Deed of Amendment and Release (Annexure “M21”) relating
to the heads of agreement in the following terms:
“RECITAL:
A. Metals,
Reliance and Malakia are parties to a Heads of Agreement (sic) dated
the 7th
day of November 2005 in respect of Licences 3306 and 3308 in Namibia.
(“Heads”)
B. Licences
3306 and 3308 (“the Prospecting Licences”) have been
transferred into the name of New Mining Company (Pty) Ltd which is a
subsidiary of Metals.
C. It
has become apparent to all parties that the Prospecting Licences do
not contain the orebodies that the parties mistakenly thought they
did and accordingly the parties have agreed to amend the terms of the
Heads as herein set out.”
And further -
“2. The
parties hereby agree that the Heads be amended such that no
Consideration (as defined in the Heads) is payable by Metals to
Reliance.
5. Moore
and Malakia jointly and severally warrant that they have the
authority to execute this Deed on behalf of Reliance.”
[15] As already mentioned, it is
common cause that one of the parties to the heads of agreement as
well as “M21” was cited as “Reliance Investment
Agencies CC a company incorporated pursuant to the laws of Namibia”
whereas, in truth, such an
entity was never registered.
Accordingly, so Mr Barnard submitted, no one was authorized to sign
in the name of the non-existent entity as such a signature would be a
nullity.
I agree. As Lord Denning has said,
“You cannot put something on
nothing and expect it to stick. It will collapse.”
See McFoy
v United Africa Co Ltd
[1961] 3 All E.R. 1169 at 1172I.
[16] It is on the same principle that
RIA’s purported ownership of the Licences and applicant’s
purported trusteeship thereof as well as RIA’s alleged powers
to alienate the licences also collapse.
[17] To my mind, Mr Barnard’s
submissions are unassailable and they effectively dispose of the
case. However, a special costs order is not warranted.
[18] In the result there will be an
order in the following terms:
Declaring
the agreements dated 7 November 2005 and 2 February 2007, Annexures
“M11” and “M21” to the founding affidavit
respectively, as null and void ab
initio
and of no force and effect.
Directing
the second respondent to transfer back into the name of the
applicant the Exclusive Prospecting Licences 3306 and 3308,
originally granted to the applicant and thereafter purportedly
transferred to New Mining Company (Pty) Ltd and subsequently to its
successor or successors in title, upon the same terms and conditions
as attached to such Exclusive Prospecting Licences upon the original
granting thereof to applicant, alternatively on such terms and
conditions as
may be imposed by the second respondent in accordance with the
provisions of the Minerals Act.
3. The costs of the proceedings,
including the costs of one instructed counsel, shall be paid by the
first and third respondents on the party and party scale, the one
paying the other to be absolved.
__________________
MANYARARA, J.
ON BEHALF OF THE APPLICANT
Adv. T Barnard,
assisted by
Adv. E Kasuto
Instructed by:
E.K. Kasuto Legal Practitioners
ON BEHALF OF THE 1ST
AND 3RD
RESPONDENTS Adv. S Vivier
Instructed by:
LorentzAngula Inc.