Lapinta Road Network Limited v Bed- Rock Network Limited (2024/HN/420) (9 December 2024) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA 2024/HN/420 AT THE DISTRICT REGISTRY HOLDEN AT NDOLA (Civil Jurisdiction} BED-ROCK MINE LIMITED DEFENDANT Before: The Hon. Lady Justice Dr. Winnie Sithole Mwenda in Chambers at Ndola the 9th day of December, 2024 For the Plaintiff Mr. L. Tembo and Mr. J. Mukwemba of Messrs. Leonard Tembo Legal Practitioners For the Defendant: Mr. G. Mileji and Mr. C.M Sianondo of Messrs. Company RULING Cases referred to: 1. Shell & BP (Zambia} Limited v. Conidaris and Others (1975) Z.R. 174. 2. Turnkey Properties v. Lusaka West Development Co. Limited and Others (1984) Z.R. 85. 3. MTN Nigeria Communications Limited v. A Aluko and Another (2013) LPELR 204. 4. Standard Chartered Bank Zambia Plc v. Wisdom Chanda and Christoper Chanda, SCZ Appeal No. 92/2009. 5. Tawela Akapelwa (Sued as Induna Inete} and Others v. Josiah Mubukwanu Litiya Nyumbu (Suing as Chief Chiyengele), SCZ Appeal No. 004/2015. 6. Hilary Bernard Mukosa v. Michael Ronaldson (1993-1994) Z.R. 26. R2 7. Royal British Bank v. Turquand [1 856] All ER 435. 8. Lusagen Zambia Limited v. The Minister of Mines and Minerals Development and the Attorney General, SCZ Selected Judgment No. 17 of 2019. 9. ZIMCO Properties Limited v. LAPCO Limited (1988 - 1989) Z.R. 92. 1 a.Natural Valley Limited v. Fairly Bottling (Z) Limited and Others, SCZ Appeal No. 61/2016. I I .American Cyanamid Company v. Ethicon Limited (1975) 1 All ER 504. Legislation referred to: 1. The Interpretation and General Provisions Act, Chapter 2 of the Laws of Zambia. 2. The High Court Act, Chapter 27 of the Laws of Zambia. 3. The Rules of the Supreme Court of England and Wales, 1965 (1999) Edition ("the White Book"). 4. Article 118 (2) (e) of the Constitution. 5. Section 26 of the Mines and Minerals Development Act. 6. The Companies Act No. 10 of 2017. 1. Introduction 1.1 Lapinta Road Network Limited ("the Plaintiff'), commenced legal proceedings against Bed-Rock Mine Limited ("the Defendant"), on 22nd October 2024 by way of Writ of Summons and Statement of Claim. 1.2 The Plaintiff alleges that it entered into a Joint Venture Agreement ("JVA") with the Defendant on 26th July 2019 for a five-year term that expired on 26th July 2024. R3 1.3 In the Statement of Claim, the Plaintiff has alleged a number of breaches of the agreement relating to the distribution of profits and management of the JVA. 1.4 The Plaintiff thus, seeks the following remedies from the Court: (i) Immediate Payment of US$550, 000 being total amount invested towards the Joint Venture Agreement; (ii) An Order for the Defe nd ant to render an account to the Court from 26th July 2019 to date pertaining to the operations and gross profits made by the Defendant company; (iii) An Order by the Court to appoint a qualified Mining Auditor to authenticate the status in (ii) above; (iv) A restraining order against the Defendant from operating on the mine until the audit report is presented to the Court; (v) Interest; (vi) Legal Costs; (vii) Further or other reliefs the Court may deem fit. 1.5 The Defendant entered appearance and filed its Defence on 24th November 2024 denying the existence of the JVA. 1.6 In the alternative, the Defendant contended that if the JVA was established, there was no breach as the Defendant has neither made nor distributed any profits and the Plaintiff has not met its obligations. 1.7 On 7th November 2024, the Plaintiff filed an Ex-parte Summons for an Order of Interim Injunction restraining the Defendant, its agents, servants or whosoever otherwise from mining, excavating and exploitation of R4 minerals under the said mine 1n Lufwanyama District until the determination of the matter. 1.8 An Ex-parte Order for Injunction was granted on 8th November 2024. 1.9 On 27th November 2024, the Plaintiff filed a Summons for an Order to Raise Preliminary Issue on a point of law and seeking to expunge all the documents filed by the Defendant for being irregular as they referred to the Plaintiff as "Lupin ta" instead of "Lapinta". 1.10 There are, thus, two applications before this Court for determination, namely, the application for an order of interim injunction and the preliminary issue on a point of law. 2. The Application for Order of Interim Injunction Affidavit in Support 2.1 The Affidavit in Support of Summons for Order of Interim Injunction was deposed to by one Fred Kasweshi, a director in the Plaintiff company. It is the Plaintiff company's evidence that it entered a JVA with the Defendant company. 2.2 According to the Plaintiff, the Defendant failed to distribute profits in line with the agreement, namely Seventy (70%) percent to the Plaintiff and Thirty (30%) percent to the Defendant. Further, that the Defendant RS company allegedly excluded the Plaintiff from management by appointing key staff without the knowledge of the Plaintiff. 2.3 That, despite issuing a demand to the Defendant company, the parties have failed to amicably resolve the dispute. 2.4 The deponent also averred that that the JVA was executed by directors who had since resigned and evidence of their resignation and the resolution of the Company accepting their resignation was exhibited. 2.5 Further, that the failure by the Defendant company to amicably resolve the dispute left the Plaintiff company with no choice but to seek interim relief pending determination of the dispute Affidavit in Opposition 2.6 In response, the Defendant company filed an Affidavit in Opposition sworn by one Ryan Douglas Timmerman, a director in the Defendant company. 2.7 It was the deponent's testimony that the Defendant denies the existence of the JVA as there is no record of the agreement or any shareholder or director resolution permitting the JVA . R6 2.8 The deponent went on to assert that even if the JVA did exist, there was no breach as the Defendant had neither made nor distributed any profits and the Plaintiff had not met its obligations. Affidavit in Reply 2. 9 In the Affidavit 1n Reply also deposed to by Fred Kasweshi filed on 4th December, 2024, he averred that prior to the signing of the JVA , the directors of the Plaintiff and the Defendant companies resolved to work together and immediately set in motion arrangements to obtain the Mining Licence through the Ministry of Mines. As evidence of this averment, a copy of the Pegging Certificate showing dimensions/ coordinates of the total area where the Mine sits was produced as "FKl". 2.10 The deponent also stated that the Pegging Certificate issued by the Ministry of Mines is a requirement before final issuance of the Mining Licence. 2.11 Further, that it was the intention of the Plaintiff and Defendant companies to establish a profit-making venture and given that the JVA was signed when the Defendant company had an exploration licence does not discharge them from their obligations. 2.12 It was the deponent's evidence that it was resolved between the parties that since there was a delay in the issuance of the Mining Licence and for purposes of R7 formalising the working modalities, the exploration licence was used to establish legal obligations and the objects of the parties was to make a profit in the given ratios. 2.13 The deponent asserted that the Defendant had invested substantially and materially prior to obtaining the current Mining Licence known as 30081-HQ-SML wholly held by the Defendant. As evidence of this assertion, copies of the correspondences with ZEMA as it embarked on the task of obtaining the Mining Licence for and on behalf of the Defendant Company were collectively produced as exhibit "FK2". 2.14 That, upon meeting all the requirements, the Ministry of Mines issued the Mining Licence in favour of the Defendant while the JVA was still subsisting, whose expenses for obtaining the same were fully borne by the Plaintiff company. A copy of the Mining Licence issued on 28th December, 2021 was produced as exhibit "FK3". 2.15 Further, that after obtaining the said licence, the parties continued working together and at the time the exploration licence was no longer in force while the parties' undertakings and status quo in relation to the JVA remained the same. 2.16 The deponent avowed that he was reliably informed by his advocates and believed the same to be true, that a RS change in the shareholding/ directorship structure of a company does not discharge it from its legal obligations and contracts entered into before a given change. 3. Skeleton Arguments The Plaintiff and Defendant both filed a List of Authorities and Skeleton Arguments that the Court took into consideration in rendering this Ruling. 4. The Preliminary Issue on a Point of Law 4.1 The Plaintiff made an application on 27th November 2024 for the Court to expunge the Defendant's Memorandum of Appearance, Defence, Affidavit in Opposition and Arguments on the basis that the Plaintiff was cited as "Lupin ta" as opposed to "Lapinta". 4.2 The application was made pursuant to Order 33, rule 3 and rule 7 as well as Order 18, rule 19 of the Rules of the Supreme Court of England and Wales, 1965 ( 1999 Edition). 4.3 The gist of the Affidavit in Support deposed to by Leonard Tembo, learned Counsel for the Plaintiff, is that the wrong party to the proceedings was cited. 5. The Hearing 5.1 The application came up for hearing on 27th November, 2024. At the hearing, Mr. Tembo, learned Counsel for the R9 Plaintiff, submitted that the Plaintiff would rely on the Affidavit in Support and Skeleton Arguments in Support of the Preliminary Issue. 5.2 In response, Mr. Sianondo, learned Counsel for the Defendant, submitted that the misspelling of "Lapinta" as "Lupinta" is an error or defect that can be amended, without causing prejudice to the other party. He argued that the Court may at any stage of the proceedings order an amendment based on Order 18 of the High Court Rules, Chapter 27 of the Laws of Zambia. 5.3 He further argued that the defect was in form and not substance and based on Section 4 7 of the Interpretation and General Provisions Act, Chapter 2 of the Laws of Zambia, the document should still be upheld. 5.4 Mr. Mileji, learned co-Counsel for the Defendant, supplemented the Defendant's arguments but asserting that according to Article 118 (2) (e) of the Constitution, a court should not focus on technical or typographical errors such as the misspelling of a party's name. 5.5 In reply, Mr. Tembo asked that he be given leave to reply in writing. 5.6 As it relates to the interim injunction, Mr. Mukwenda, learned co-Counsel for the Plaintiff submitted that the Plaintiff would rely on the Affidavit and Skeleton Arguments in Support of the application. RlO 5.7 Both Mr. Mileji and Mr. Sianondo augmented their written submissions. Mr. Mileji argued that the criteria from the Shell & BP (Zambia) Limited v. Conidaris and Others1 case has not been met as the Plaintiffs have not demonstrated any arguable case or clear right of relief. 5.8 He further contended that the purported Joint Venture Agreement was entered into without a valid shareholders' resolution of the company. Mr. Mileji also argued that the agreement was also invalid based on Section 26 of the Mines and Minerals Development Act as minerals may not be removed without permission of the Director of Geological Survey. 5.9 Mr. Mileji further submitted that the second element of irreparable harm or injury has not been met as the Plaintiff has not demonstrated how they would suffer if the injunction is not enforced, and that in any case, damages would suffice to atone for any loss. 5.10 On the balance of convenience, Mr. Mileji argued that this lies in favour of the Defendant whose operations stand to collapse if the operations continue to be halted. 5.11 Mr. Sianondo argumentated Mr. Mileji's arguments by arguing that based on Turnkey Properties v. Lusaka West Development Company Limited and Zambia State Insurance Corporation,2 the Court should discharge the injunction to avoid pre-empting the issues Rll claimed in the Statement of Claim which are identical to the relief sought under the injunction. 5.12 Mr. Tembo argued on behalf of the Plaintiff that he would respond by filing a Reply. The Court granted seven (7) days to file the Reply. 6. Determination of preliminary issue 6.1 As the preliminary issue goes to jurisdiction, the Court will deal with it first. 6.2 The preliminary issue relates to an application regarding the alleged irregularity of the Memorandum of Appearance, Defence, Affidavit in Opposition to the Ex Parte Summons for an Interim Injunction and List of Authorities and Skeleton Arguments in Opposition for having cited the Plaintiff as "Lupinta" as opposed to "Lapin ta". 6.3 In the case of MTN Nigeria Communications Limited v. A Aluko and Another,3 the Court held that: "Now where there is a mistake with regard to the name of the litigant in an action, such a mistake is described as a misnomer. It simply means a mis-description or wrong use of a name. It is a mistake as to the name and not as to the identity of the particular party to the litigation." 6 .4 Based on the above, I am of the view that the misspelling of the name of the Plaintiff company was a genuine error R12 or misnomer that should not derail the determination of the dispute on its merits. In Standard Chartered Bank Zambia Pie v. Wisdom Chanda and Christopher Chanda, 4 the Supreme Court held that: "A party should not, in the ordinary way, be denied an adjudication of his claim on the merits because of procedural default. .. " 6.5 Considering the above authority, and the circumstances of this case, the Court shall not order the expunction of the Defendant's documents. An amendment shall be allowed to cure the defect. 6.6 I hereby invoke the provisions of Order 20, rule 5 of the Rules of the Supreme Court of England and Wales (1965)(1999 Edition) and grant leave to the Defendant to amend the Plain tiff's name so as to reflect the correct and intended party to these proceedings. 7. Determination of the interim injunction 7 .1 Order 27, rule 1 of the High Court Rules empowers the court to grant an injunction ln appropriate circumstances. The provision reads as follows:- "In any suit in which it shall be shown, to the satisfaction of the Court or a Judge, that any property which is in dispute in the suit is in danger of being wasted, damaged or alienated by any party to the suit, it shall be lawful for the Court or a Judge to issue an injunction to such party, commanding him to refrain from doing the particular act complained of, or to give such order, for the R13 purpose of staying and preventing him from wasting, damaging or alienating the property, as to the Court or a Judge may seem meet, and, in all cases in which it may appear to the Court or a Judge to be necessary for the preservation or the better management or custody of any property which is in dispute in a suit, it shall be lawful for the Court or a Judge to appoint a receiver or manager of such property, and, if need be, to remove the person in whose possession or custody the property may be from the possession or custody thereof, and to commit the same to the custody of such receiver or manager, and to grant to such receiver or manager all such powers for the management or the preservation and improvement of the property, and the collection of the rents and pro.fits thereof, and the application and disposal of such rents and pro.fits, as to the Court or a Judge may seem proper." 7 .2 The Supreme Court further clarified the principles relating to the grant of an injunction in the case of Tawela Akapelwa (Sued as Induna lnete) and Others v. Josiah Mubukwanu Litiya Nyumbu (Suing as Chief Chiyengele)5 when it held that: , "It is clear to us that both learned counsel are fully alive to those principles to guide the Court in considering whether or not to grant an injunction, namely: (1) whether there is a serious question to be tried; (2) whether damages would be adequate to compensate the plaintiff (respondent in this case); (3) whether the balance of convenience tilts in favour of granting the injunction to the plaintiff (respondent); and Rl4 (4) whether the plaintiff (respondent) has come to court with clean hands." 7.3 It therefore, follows that the above criteria must be met whenever the Court is faced with an application for an injunction. 7.4 The first question is whether there is a serious question to be tried or put differently, a clear right of relief. The Plaintiff has adduced evidence that there was a JVA between the parties, to which the Defendant has raised an issue, claiming that it has no knowledge of the said agreement. 7.5 A perusal of the JVA appearing as "FKl" in the Plaintiff's Affidavit in Support of Ex-Parte Summons for Injunction indicates that the Defendant is listed as the First Party and the Plaintiff as Second Party. Further, John Mwenda, John Kateka and Michael Gaston Machingauta signed on behalf of the Defendant company as directors. The exhibits marked "FK4" and "FK5" show that they were directors of the Defendant company until they resigned from office. 7.6 In Hilary Bernard Mukosa v. Michael Ronaldson,6 the Supreme Court held as follows: ''An injunction would only be granted to a Plaintiff who established that he had a good and arguable claim to the right he RlS sought to protect." (Underlining by the Court for emphasis only) 7.7 Without determining the dispute at a preliminary stage, there appears, prima facie, to be an agreement between the parties and I have no hesitation in holding that at face value, the Plaintiff has a cause of action and clear right of relief that needs to be determined. The validity of the agreement and other issues will be determined during trial. 7 .8 It should, however, be pointed out that the purpose of an injunction was laid out in Turnkey Properties (supra) where the Supreme Court held, inter alia, that: "An interlocutory injunction is appropriate for the preservation of a particular situation pending trial ...A n interlocutory injunction should not be regarded as a device by which an applicant can attain or create new conditions favourable only to himself. ... " 7.9 The above underscores the fact that an interlocutory injunction is necessary to preserve the status quo pending determination of the dispute before the Court. 7.10 The Turnkey Properties decision (supra), emphasises the fact that a Plaintiff who establishes a prima facie case should be granted an injunction. 7 .11 However, the guidance in the Turnkey Properties (supra) case is that the status quo must be maintained. The R16 Plaintiff's application seeks to restrict the Defendant from mining, excavating and exploitation of minerals under the said Mine 1n Lufwanyama District until the determination of the matter. 7.12 I am of the view that the injunction will alter the status quo as it will preclude the Defendant from exercising its mining rights and running the mine when the same was not a term of the contract, even in the event of profits having not been declared or paid. 7.13 Further, it is also important to note that an interlocutory injunction must not be used to create a new state of circumstances designed for the benefit of a litigant. In the absence of any express statutory or contractual right limiting the mining right of the Defendant, this injunction will create new conditions favourable to the Plaintiff, a state of affairs that is not permitted when considering an interim injunction. 7.14 As correctly stated by Counsel for the Defendant, an injunction must not be used to pre-determine the main matter. In my view, granting of this injunction would have the effect of creating new conditions or determining the dispute at an interlocutory stage. 7.15 Further, the Supreme Court in Turnkey Properties, guided that an important question that has to be ascertained herein is whether or not the Plaintiff would R17 suffer irreparable harm that cannot be atoned for in damages if an injunction is not granted and if the balance of convenience lies in its favour. The Court held that: "In applications for interlocutory injunctions, the possibility of damages being an adequate remedy should always be considered" 7. 16 Further, 1n ZIMCO Properties Limited v. LAPCO Limited,9 the Supreme Court held thus: "We must make it clear that the question of balance of convenience between the parties only arises if the harm done will be irreparable and damages will not suffice to recompense the plaintiff for any harm which may be suffered as a result of the actions of the defendant which it is sought to restrain." 7. 1 7 Therefore, irreparable harm is loss that would be impossible or impracticable to rectify, even with an award of damages. The Plaintiff's claim is anchored on a refund of its investment and an account and payment of profits made in the first five-year term of the JVA. 7.18 I am of the view that based on the Plaintiff's claims, damages, or the potential for an account of the profits, will be sufficient recompense. As such, in the interim period pending determination of the dispute, it is not necessary to restrain the Defendant from carrying out its mining operations. In any case, it would be in the R18 interest of the Plaintiff to have the mine operate as it has claimed that it has a right to 70% of the profits. 7 .19 Going by the Supreme Court's decision in ZIMCO Properties Limited v. LAPCO Limited (supra), and having found as above, the next question to be addressed is the balance of convenience. However, in the circumstances, it is not necessary to consider the balance of convenience as, taking into consideration what the Supreme Court held in the LAPCO case above, the question of balance of convenience between the parties only arises if the harm done will be irreparable and damages will not suffice to recompense the Plaintiff for any· harm which may be suffered as a result of the actions of the Defendant which is sought to be restrained. 7.20 As such, the requirements for the maintenance of an injunction have not been met and the Ex-Parte Order shall have to be discharged forthwith. 8. Conclusion 8.1 In view of the foregoing, the Plaintiff's application to set aside the Memorandum of Appearance, Defence, Affidavit in Opposition to Ex-parte Order for Interim Injunction, Defendant's Skeleton Arguments in Opposition, List of Authorities and all other accompanying documents has failed and is dismissed. I R19 8.2 Leave is granted to the Defendant to amend the name of the Plaintiff on the Memorandum of Appearance and Defence and refile the same within seven (7) days of the date hereof. 8.3 The Plaintiff is granted leave to file a Reply within seven (7) days of receipt of the amended Memorandum of Appearance and Defence. 8.4 The Plaintiff's application for an order of interim injunction has failed. Consequently, the Ex-parte Order of Interim Injunction granted on 8th November, 2024 is discharged forthwith. 8. 5 Costs shall be in the cause. 8.6 Leave to appeal is granted. Dated at Ndola this 9th day of December 2024. Winnie Sit hole Mwenda (Dr.) JU ~\'y~16fc 9~ ~"18.~1 *I HIGH COURT - 9 DEC 2024 ,~