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IN THE HIGH COURT OF SOUTH AFRICA

(CAPE OF GOOD HOPE PROVINCIAL DIVISION)

Case No: A 105/2000

In the matter between:

S A SOGEM NV Appellant

and

BANRO RESOURCE CORPORATION First Respondent

SOCIÉTÉ AURIFÈRE DU KIVU ET DU MANIEMA SARL Second Respondent

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JUDGMENT: 11 JUNE 2002

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VAN ZYL J:

INTRODUCTION

[1] This case has had a long and somewhat complicated history. It started when the respondents, the Banro Resource Corporation ("Banro") and the Société Aurifère du Kivu et du Maniema SARL("Sakima SARL") brought an urgent application for the attachment of a cargo of ninety-nine tons of a mineral known as cassiterite (a form of tin oxide) on board a ship in the Cape Town harbour. The first respondent in that application was the Société Minière du Congo SARL("Somico"). The appellant in the present matter, namely the Société de gestion de l'energie de Manantali("Sogem"), was cited as fourth respondent. The second and third respondents were the respective Masters of the Ships MV Uranium MV Congo. On 12 February 1999 Traverso J issued an order authorising the attachment of the cassiterite pending an application to determine its ownership.

[2] The matter subsequently came before Davis J, who held, in a declaratory order dated 15 June 1999, that Banro was the owner of the cassiterite and was entitled to possession of it. Somico and Sogem were ordered to pay the costs of the application. Only Sogem noted an appeal against this judgment and order.

[3] With the leave of the Supreme Court of Appeal, the matter came on appeal before this court as presently constituted. On 20 June 2000 an order by consent was issued referring the matter to evidence on a number of defined issues and granting certain ancillary relief. The appeal on the merits was postponed sine diesubject thereto that either party could arrange for a hearing of the appeal, "including an appeal against any finding or order of the Judge hearing the evidence, either on the merits thereof and/or on any relevant question of costs".

[4] The matter thereupon came before Griesel J for the hearing of evidence. Despite expressing certain reservations as to whether he had the power to determine the disputed issues, the learned judge held, in a judgment handed down on 29 September 2000, that Banro had lawfully acquired ownership of the cassiterite from Sakima SARL and that Sogem was liable to pay the costs. He hence concurred, in substance, with Davis J's finding and order.

[5] At the commencement of the hearing of the present appeal, the appellant brought an application for leave to adduce further evidence in terms of section 22 of the Supreme Court Act59 of 1959. In the alternative it sought to adduce such evidence by way of affidavit in terms of section 38(2) of the Uniform Rules of this court. The application was dismissed on the basis that reasons would be furnished later. The costs thereof stood over for consideration in the main appeal. This court ruled, however, that the issue on which the appellant was seeking to adduce further evidence, namely the interpretation of Zaïrian decree 0035 of 6 May 1997, has become an issue on appeal. It was extensively traversed in evidence and argument, and comprehensively dealt with in the judgment of Griesel J. I shall address this matter later (par 76-84 below).

[6] I now return to the appeal before us. At the outset Mr Pincus, for Sogem, suggested that the effect of this court's referral of the matter for the hearing of oral evidence was that the appeal against the decision of Davis J had been upheld and that his judgment and order had been set aside. This suggestion loses sight of the fact that the order of this court was by agreement between the parties and expressly provided that the appeal on the merits would be postponed sine die. It provided in addition that the parties would be entitled to appeal against any finding or order of the judge, in casuGriesel J, on the issues referred to evidence, be it on the merits or on questions of costs. This court is, therefore, required to consider the findings and orders of both Davis J and Griesel J. In truth, as Mr Badenhorst, for Banro and Sakima SARL, quite correctly submitted, the effect of the order of this court referring the matter for the hearing of oral evidence on certain issues, was to suspend the operation of Davis J's judgment. The judgment of Griesel J can, and I believe must, be regarded as supplementing and augmenting that of Davis J, in that Griesel J had the benefit of a considerable body of evidence and documentation that were not available to Davis J when he was initially seized of the matter.

[7] We have also been called upon by the appellant to consider a number of further issues arising from the hearing before Griesel J. They include whether or not: (a) the appellant received a fair hearing; (b) an application to compel further discovery in terms of rule 35(3) of the Rules of this Court should have been granted; (c) an application that Griesel J should recuse himself from hearing the matter was properly dismissed; and (d) a commission de bene esseshould have been ordered. These issues, it would appear, all relate to whether or not, generally speaking, the appellant received a fair hearing. I shall return to them later.

BACKGROUND

[8] The first respondent, Banro, is a public company incorporated in Toronto, Canada, and registered as an external company in South Africa in terms of section 322 of the Companies Act67 of 1973. It is traded on the Dealer Network of the Toronto Stock Exchange and engages in the acquisition, exploitation and development of natural resource properties. Many of its activities have been conducted in the Democratic Republic of the Congo ("DRC"), formerly known as the Republic of Zaïre. Mr Bernard Renier van Rooyen ("Van Rooyen") is its chairperson and chief executive officer.

[9] Banro owns all the issued shares of Banro American Resources Inc ("Banro American"), a company with its principal place of business in Denver, Colorado, USA. With a view to becoming involved in mining activities in Zaïre it sought, during 1995, to acquire control of a Zaïrian company formed in 1974 and known as the Société Minière et Industrielle du Kivu SARL("Sominki"). Sominki had, pursuant to a mining convention concluded with the government of Zaïre, which held a 28% share in it, been mining in that country for decades. The convention, however, was due to expire during 1999. This prompted Banro, after acquiring 72% of Sominki's shares, to negotiate a new mining convention with the Zaïrian government and to establish a new private limited liability company, Sakima SPRL, to develop certain mining rights and concessions. Banro held 999 of the 1000 shares in Sakima SPRL, which was registered in Kinshasa during August 1996. The remaining share was held by a nominee shareholder employed by Banro's Kinshasa lawyers.

[10] It was, Banro avers, at all relevant times the intention of the parties to transform Sakima SPRL from a private limited liability company into a public ("joint-stock") limited liability company, Sakima SARL, which would acquire Sominki's mining rights and concessions. SPRL is the abbreviation for société privée à responsabilité limitée("private company with limited liability") SARL for société par actions à responsabilité limitée("joint-stock company with limited liability"). This was approved, it would appear, by a unanimously adopted resolution of the shareholders of Sakima SPRL at an extraordinary general meeting held on 21 October 1996. It was similarly approved in a mining convention, concluded on 13 February 1997 between Banro, Sominki and the Government of Zaïre. The mining convention was subsequently approved by ministerial decree 0021 of 17 March 1997, and the formation of Sakima SARL was authorised by ministerial decree 0035 of 6 May 1997. I shall return to these decrees, and other relevant documentation, at a later stage in this judgment, when consideration is given to the various issues between the parties.

[11] Suffice it to say that, in terms of the said mining convention, it was agreed that the mining rights and concessions held by Sominki would be transferred to Sakima SARL. Like its predecessor, Sakima SPRL, it was to engage in the acquisition, exploitation and development of natural resources in Zaïre. Banro American would own 93% and the Zaïrian government the remaining 7% of its shares. Van Rooyen would be its executive president.

[12] Sakima SARL is said to have been the holder of some forty-seven mining concessions issued by the Zaïrian government and directed at the exploitation and development of mineral and mining rights in Zaïre. They entitled Sakima SARL, inter alia, to mine a metal substance identified as a tin oxide and known as cassiterite. This would then be transported to Kindu, where Banro would purchase it for approximately $2 500 per ton. Since August 1997 Banro has bought every consignment of cassiterite produced by Sakima SARL and resold it to the Malaysian Smelting Corporation Berhad in Butterworth, Malaysia ("Malaysian Smelting Corporation") in terms of a written agreement.

[13] On 7 May 1998 Banro purchased 99 tons of cassiterite, packed into 132 drums and valued at approximately US$400 000, from Sakima SARL. According to Van Rooyen he negotiated the transaction from Johannesburg in his dual capacity as chief executive officer of both companies. The purchase price was duly paid to Sakima SARL whereupon, Van Rooyen avers, ownership of the cassiterite passed to Banro which in turn sold it to the Malaysian Smelting Corporation. The cassiterite, however, remained in the possession of Sakima SARL, in its Kindu warehouse, pending the issue of a government declaration of export to Malaysia.

[14] Before shipment of the cassiterite could be effected, a political upheaval took place in Zaïre. Towards the end of May 1998 the Zaïrian government of President Mobutu Sese Seko was overthrown and replaced by the DRC regime of President Laurent Désiré Kabila who, on 29 July 1998, issued a number of presidential decrees that had a devastating effect on Sakima SARL and its activities. Thus decree 101 abrogated ministerial decree 0035, which had authorised the formation of Sakima SARL, while decree 102 abrogated ministerial decree 0021 in terms of which the mining convention of 13 February 1997 had been approved. Decree 103 provided for the incorporation of a new company, the Société Minière du Congo("Somico"), to replace Sakima SARL. In terms of decrees 104 and 105 one Naluhwindja Makuba and one Maketa Mbaki Makanda were appointed as president and director general respectively of Somico.

[15] On 31 July 1998, by virtue of an order issued by the Minister for the Strategic Zones of Development, the president of Somico and one Ndume Nzogu, an adviser to the Ministry of Mines, took physical control of Sakima SARL's office in Kinshasa. They forthwith appropriated substantial assets of both Sakima SARL and Banro.

[16] During the course of September 1998 Somico removed the aforesaid cassiterite (par 13 above) from the warehouse in Kindu to a warehouse in Kinshasa. It thereupon purported to sell the cassiterite to a company known as W.E.M.I. SPRL, which in turn purported to sell it to Sogem. Sogem then arranged for it to be loaded onto a motor vessel, the MV Congo, bound for Cape Town. In Cape Town it was to be transferred to the MV Uraniumfor shipment to Singapore. On its arrival in Cape Town, however, Banro and Sakima SARL obtained an order for its attachment, as pointed out earlier in this judgment (par 1 above).

THE ISSUES

[17] The issues to be determined were agreed on by the parties and incorporated in the order of this court dated 20 June 2000. They may be paraphrased as follows:

1. whether or not Sakima SPRL was properly incorporated and registered as a private company with limited liability in accordance with the laws of the DRC, and the legal consequences thereof (par 3.1 of the order);

2. whether or not Sakima SARL was properly incorporated and registered as a joint stock limited liability company in accordance with the laws of the DRC, and the legal consequences thereof (par 3.2);

3. whether or not a private company with limited liability (SPRL) may be transformed into a joint stock limited liability company (SARL) in accordance with the laws of the DRC, and if so:

1. what the prerequisites are for such transformation;

2. what the effect in law is of such transformation on the SPRL (par 3.3);

4. whether or not, if Sakima SARL was not so incorporated and registered:

1. it nevertheless acquired ownership in the cassiterite pursuant to the mining convention dated 13 February 1997; and

2. it was entitled, as a matter of law, to transfer ownership in the cassiterite to Banro on or about 7 May 1998 (par 3.4);

5. whether or not ownership of the cassiterite was lawfully acquired:

1. by Sakima SARL from Sominki in terms of the mining convention dated 13 February 1997; and

2. by Banro from Sakima SARL on or about 7 May 1998 (par 3.5);

6. whether or not Sakima SARL had locus standi in iudicioto launch these proceedings, should this question become relevant (par 3.6);

7. whether or not the removal of the cassiterite by Somico from the possession of Sakima SARL, and its subsequent sale thereof to Sogem, was lawful (par 3.7);

8. whether or not Sogem had locus standi in iudicioin view of certain allegations in the papers (par 4).

Where reference is made to the laws of the DRC it includes, where relevant, the laws of Zaïre. For the sake of convenience I shall henceforth speak of the DRC. As mentioned previously (par 10 above) ministerial decree 0035 is of special relevance in this regard inasmuch as its interpretation, meaning, ambit and effect have become an issue on appeal. Likewise relevant are ministerial decree 0021 and presidential decrees 101 to 103. They will be discussed in due course.

THE EVIDENCE

[18] What started off as an appeal record of five volumes (approximately 500 pages), consisting of affidavits, annexures, the judgment of Davis J and certain formal documentation, grew into forty volumes (some 3 700 pages). This included a plethora of documents in French, with English translations thereof, and wide-ranging oral evidence on the aforesaid issues. Griesel J was called upon to consider all this documentation and evidence.

[19] At the outset the learned judge expressed certain reservations as to whether or not he had the power to determine the issues referred to him. He was nevertheless prepared "to exercise the power ostensibly conferred" upon him. In doing so, it is clear from his comprehensive and informative judgment that he applied his mind to the aforesaid documentation and evidence meticulously and carefully, giving full reasons for his various findings on such issues and on the various applications with which he was confronted from time to time.

[20] Three witnesses testified on behalf of Banro and Sakima SARL, namely Van Rooyen, Professor André Thomashausen ("Thomashausen"), Professor of International and Comparative Law and Director of the Institute of Comparative and International Law at the University of South Africa in Pretoria, and Mr Lambert Shango Djunga ("Djunga"), Banro's lawyer in Kinshasa. Only one witness, Ms (referred to in the record of proceedings as Maîtreor Madame) Genevieve Decamp ("Decamp"), a lawyer practising in Kinshasa, testified on behalf of Sogem.

[21] Van Rooyen testified that he had been the CEO of Banro and the president of Sakima SARL at the relevant stage. He confirmed the contents of the various affidavits to which he had deposed. He set forth the history of his involvement, in the aforesaid capacities, in the mining activities of Banro and Sakima in the DRC. He explained why it had been necessary for Sakima to acquire the mining rights of Sominki and to convert from an SPRL to an SARL. In this regard he made extensive reference to the relevant documentation submitted as exhibits.

[22] Van Rooyen confirmed that Banro had, on 7 May 1998, purchased the cassiterite in issue from Sakima SARL and accordingly acquired ownership thereof. He had acted on behalf of both companies in concluding and executing the agreement of purchase and sale. He thereupon accepted delivery of the cassiterite on behalf of Banro, but agreed that it remain in the possession of Sakima SARL pending its removal and onward transmission to the Malaysian Smelting Corporation. The government of the newly formed DRC subsequently "expropriated" the cassiterite illegally by purporting to dissolve Sakima SARL and to abrogate the mining convention of 13 February 1997. For purposes of acquiring the cassiterite, it "created" a new company, Somico, which purportedly stepped into the shoes of Sakima SARL and illegally removed the cassiterite from the warehouse in Kindu where it was being stored. Sogem then purportedly purchased the cassiterite and still claims to be its rightful owner.

[23] Van Rooyen impressed Griesel J as "an astute international businessman of experience and integrity" who wished at all times to conduct his business "in a meticulously correct manner and 'by the book' as far as reasonably possible". His testimony was presented calmly and confidently. There was, according to the learned judge, no reason to reject it.

[24] By way of introduction Thomashausen explained, with reference to the principles emanating from the conflict of laws, that the applicable law in the present case was that of the DRC, being the domicile and place of incorporation of the companies in question. This court may, in terms of section 1(1) of the South African Law of Evidence Amendment Act45 of 1988, take judicial notice of such foreign law in so far as it "can be ascertained readily and with sufficient certainty".

[25] The gist of Thomashausen's evidence, which was supported by a substantial number of documentary and legal references, was to the effect that Sakima had, during August 1996, been duly incorporated and registered as a private company with limited liability (SPRL) in accordance with the law of the DRC. It was subsequently, during 1997, transformed into a public ("joint-stock") company with limited liability (SARL). This was permissible in the DRC after the 1960 legal reforms which made provision for the transformation of an SPRL into an SARL, or into any other form of company, without the SPRL losing its legal personality in the process. On his view of the facts, Sakima SARL had lawfully acquired ownership of the cassiterite in issue from Sominki, and had thereupon lawfully sold it to Banro. The attempt by the new DRC government to expropriate it by allowing Somico to wrest possession thereof from Sakima SARL, and subsequently selling it to Sogem, was wrongful and unlawful.

[26] Thomashausen was described by Griesel J as "obviously an eminent and well-qualified expert" and, indeed, "by far the most impressive" of the legal experts called to testify before him. The learned judge found his views to be "well-motivated and expressed in a clear and logical manner". This was clearly no exaggeration, as may be gleaned from the record of his testimony and even from the most cursory survey of the summary of his expert evidence, which he confirmed at the outset of his testimony. I shall return to his views on the salient issues later on in this judgment.

[27] Far less impressive as a witness was Djunga, who was perceived by Griesel J as being partisan, and hence unreliable, in that he "allowed his loyalty to his client to overshadow his professional judgment in a few instances by propounding views that were … clearly untenable". Despite his expertise in the field of Congolese corporate law and practice, he was seldom able to give succinct and direct answers to questions, but, rather, tended to verbosity and long, rambling responses. This criticism appears to be eminently justified by a perusal of the record of his testimony, with which I shall deal briefly in what follows.

[28] In general terms Djunga confirmed the evidence of Thomashausen regarding the requirements for the establishment and transformation of companies with limited liability. He was likewise satisfied that Sakima SPRL had been properly incorporated and registered. The subsequent transformation of Sakima SPRL into Sakima SARL, supervised by Djunga, similarly complied with the relevant requirements in terms of sections 6 and 42 (as amended) of the 1887 decree. The SARL retained the file number (AS number - see par 31 below) administratively allocated to the SPRL on its incorporation and registration, and also retained the legal personality the SPRL had acquired on registration.

[29] The fact that mining concessions had been transferred to Sakima before its conversion from an SPRL to an SARL did not invalidate the transfer of such concessions. The reason was that Sakima, at all relevant times from its registration as an SPRL until its registration as an SARL, was a legal person capable of taking cession of rights. The purported abrogation of decree 0035 hence did not affect the transfer. Inasmuch as the mining concessions must be regarded as having been legally transferred from Sominki to Sakima SARL, the latter was entitled to sell the cassiterite in issue to Banro. Transfer of ownership took place immediately on agreement being reached on the thing being sold and the price. At no stage could this ownership be terminated by any attempted expropriation of the cassiterite by means of a presidential decree. At no stage was it possible for Somico to acquire any rights in respect of the cassiterite. Its purported appropriation thereof was indeed unlawful and constituted theft. At no stage could Sogem hence have acquired any rights therein from Somico. Any purported sale thereof by Somico to Sogem would hence be null and void.

[30] Griesel J had similar problems with the evidence of Decamp as he had with that of Djunga. Although she was "more articulate and ostensibly better qualified from a professional point of view" than Djunga, she was clearly biased in favour of Sogem. This resulted in her putting forward certain indefensible opinions and in failing to make certain obvious concessions. When confronted by Banro's counsel in this regard, she adopted an evasive stance, which tended to colour her evidence as unreliable in so far as it differed from that of Thomashausen or Djunga. Despite these unsatisfactory aspects of her testimony, however, Decamp provided some important insights and interesting debating points in her evidence.

[31] Decamp emphasised the need to file, by means of a filing certificate or "deed of deposit" (acte de depôt), a copy of the by-laws of the company to be formed. The registrar of companies would then allocate a filing number or "company deed" (acte de société- abbreviated AS) number to it, thereby confirming its incorporation and registration. Only then would it acquire corporate and legal personality. In this regard she was initially of the view that Sakima SPRL had never been properly formed, incorporated or registered, in that she could find no AS number or acte de depôtin its file. When later confronted with the relevant documentation, she retracted her opinion and conceded that Sakima SPRL had indeed been duly incorporated and registered.

[32] With reference to decree 0035 aforesaid, Decamp opined that the government of the DRC had not authorised the transformation (transformation) of Sakima from an SPRL to an SARL, but had in fact authorised the creation (création) of a new joint-stock limited liability company. Inasmuch as Sakima SARL had not complied with the requirements for the creation of a new company, it was never properly constituted, incorporated or registered. This means that it could not acquire ownership of the cassiterite and could not, in turn, sell it to Banro. By the same token it could not receive cession of mining rights from Sakima SPRL. In any event, inasmuch as the purported cession took place on 13 February 1997, prior to approval being granted in terms of decree 0021 on 17 March 1997, the cession was invalid.

[33] As for the presidential decrees purporting to abrogate decrees 0021 and 0035, and the other decrees promulgated at the same time, Decamp was of the view that they were valid and binding. If Sakima SARL had come into existence, it was dissolved by decree 101 and clearly had no locus standito institute the present proceedings.

DID SOGEM RECEIVE A FAIR HEARING?

[34] Mr Pincus submitted that Sogem did not receive a fair hearing and that, at times, the hearing "resembled a farce". He relied in this regard on the provisions relating to access to courts as set forth in section 34 of the Constitution (Act 108 of 1996), namely that "[e]veryone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum".

[35] In the present matter, Mr Pincus argued, Griesel J failed: (a) to apply the principles of natural justice; (b) to give both parties a right of audience; (c) to admit all admissible and relevant evidence; (d) to avoid "a trial by ambush"; (e) to ensure that the parties were not taken by surprise; and (f) to ensure that the disputes were fully and properly ventilated. In addition the refusal by Griesel J of the various applications brought by Sogem were, according to Mr Pincus, strong indications of the unfairness of the hearing as far as Sogem was concerned. He referred specifically in this regard to the application for further discovery, the application for Griesel J's recusal and the application to appoint a commission de bene esse.

[36] The gist of Mr Pincus's argument was that Griesel J had a "preconceived notion" that Sogem was adopting dilatory tactics and raising new points as the hearing proceeded. He was bent on finalising the hearing as soon as possible, even at the expense of justice and fairness. In the process he made "flawed rulings" prejudicial to Sogem and exhibited such "obvious bias" and "antagonism" towards Sogem that he should have recused himself when called upon to do so.

[37] It would appear, Mr Pincus suggested, that counsel for Banro and Sakima SARL, Mr Badenhorst, succeeded in "poisoning the Judge's mind" by making emotive submissions and indulging in "mud slinging" against Sogem. This resulted in the parties not receiving even-handed treatment. An example of this was the court's treatment of Decamp, who was not given the opportunity to complete her evidence relating to the steps required to achieve transformation. She was "stopped in her tracks" while presenting vital and material testimony. Djunga, however, was allowed to testify on this score. In any event the credibility finding against Decamp, an eminent DRC lawyer, was totally unjustified.

[38] Another alleged irregularity highlighted by Mr Pincus was the use of Thomashausen as an interpreter during the leading of Djunga's evidence. The hearing became "farcical" when Djunga was asked whether there was any aspect of Thomashausen's evidence with which he disagreed. The situation was aggravated when Thomashausen was recalled to give further evidence on various issues that had arisen after he had first testified.

[39] It may be convenient first to deal with Griesel J's refusal of the applications for further discovery, to recuse himself and to appoint a commission de bene esse, before considering the various arguments raised by Mr Pincus in regard to whether or not Sogem received a fair hearing. I do so because the refusal of such applications is regarded by Sogem as part and parcel of the allegedly unfair hearing it has received (see par 35 above).

The Discovery Application

[40] The discovery application rejected by Griesel J was brought in terms of rule 35(3) of the rules of this court. It called upon the respondents to make further discovery of "documents relevant to the matters in issue". In this regard Sogem required, inter alia, documentary proof that Banro had become owner of the cassiterite in question and that it had paid Sakima SARL for it. In addition it called for documentation relating to an arbitration in Washington DC between Banro American and the DRC.

[41] In his affidavit opposing the application Van Rooyen averred that all the relevant documentation relating to ownership of the cassiterite and payment therefor had already been made available to Sogem. The documents relating to the arbitration proceedings in Washington DC were not, however, relevant to the issues in the present matter and Banro had justifiably refused to produce them.

[42] In his argument on behalf of Sogem, Mr Pincus suggested that Banro was being selective as to which documents it was prepared to discover. The documents required by Sogem were not only relevant but, indeed, essential for establishing the issue of ownership of the cassiterite. In refusing the application, Mr Pincus submitted, Griesel J "applied fallacious reasoning" and did not exercise his discretion judicially. His attitude appears to have been that the books and records of Banro would tend to advance only Banro's case, in which event they need not be discovered. He in fact "baldly accepted that the books and records of First Respondent [Banro] correctly reflect the necessary accounting entries".

[43] Griesel J gave reasons for his dismissal of the application for further discovery in his main judgment. His point of departure was that this court had defined the issues, which should be narrowly interpreted. Referral of such issues for the hearing of evidence did not justify their being extended in the sense of creating a "roving commission" by means of which a party could place before the court any facts which the party believes should be brought to the attention of the court. See Wepener v Norton 49 (1) SA 657 (W) at 658-659; Drummond v Drummond (1) SA 161 (A) at 170H.

[44] In the present case, Griesel J opined, Sogem had a new legal team that was intent on "sweeping clean". The further discovery, however, had little to do with the issues before the court and was aimed at obtaining "ammunition with which to shoot new holes into the case for Banro/Sakima". With reference to Cullinan Holdings Ltd v Mamelodi Stadsraad 1992 (1) SA 645 (T) at 648F, Griesel J was of the view that the application was being used by Sogem as a net to fish for vaguely familiar documents ("'n net … waarmee vir halfbekende dokumente gevis kan word").

[45] Inasmuch as Sogem had failed to persuade him that a probability existed that Van Rooyen was "either mistaken or false in his assertions", Griesel J was not prepared to go beyond the discovery affidavit. In any event, as held in Moulded Components and Rotomoulding South Africa (Pty) Ltd v Coucourakis and Another 1979 (2) SA 457 (W) at 470D-E, "discovery is a very, very rare and unusual procedure" in application proceedings and should be ordered "only in exceptional circumstances". In the exercise of his discretion whether or not to grant an application for further discovery, Griesel J was of the view that discovery should, in motion proceedings, be "restricted to a narrow ambit, having regard to the nature of the dispute(s) between the parties". This approach was a fortioriapplicable where a court of appeal, and not the trial court, had ordered oral evidence and discovery.

[46] In the present matter, Griesel J held, the probative value of certain of the documents sought by way of an application for further discovery was, at best for Sogem, questionable, having regard to the true issues before the court. Should the order be granted, however, "the potential inconvenience and prejudice" that Banro might suffer could be vast, in that some of the documents in question were scattered throughout a vast area, including Toronto, Kinshasa and Johannesburg. The case would certainly be disrupted, if not postponed for some time. In any event documents relating to the arbitration proceedings in Washington DC were clearly irrelevant.

[47] Griesel J was further of the view that Sogem had lost sight of a well-established general principle relating to discovery. A party to litigation is obliged to make discovery of documents that may- not must- either directly or indirectly enable the opposing party to advance its own case or to damage the case of its adversary. Documents that tend to advance only the case of the party that discovers need not be disclosed, unless they are to be used by such party in the trial. This principle is discussed in H J Erasmus (ed) Superior Court PracticeB1-250/1 and the authorities cited there. For these reasons the application was dismissed with costs, including the costs of two counsel.

[48] After careful consideration of the affidavits and other documents underlying the application for further discovery, I am in respectful agreement with the reasons tendered by Griesel J for refusing such application. I likewise concur with the learned judge's understanding and application of the relevant legal principles in the present case. With the full record of proceedings and relevant documentation now before us, it is eminently clear, if not unquestionable, that no further documentation was required for establishing the ownership of the cassiterite in question at any relevant stage. As will appear below, the documentation and supporting evidence placed before Griesel J were more than sufficient to assist in resolving the disputed issues. Documentation relating to the Washington arbitration proceedings was undoubtedly irrelevant and I respectfully agree with Griesel J that Sogem appears to have been indulging in a fishing expedition in the hope that it might uncover some or other document, or scrap of evidence, that might conceivably support its case.

[49] In view of these considerations I have some difficulty in understanding the submission that Griesel J adopted "fallacious reasoning" and failed to exercise his discretion judicially in refusing the application. In my view the learned judge considered the facts and the applicable legal principles carefully before coming to his fully justified conclusion. There was no question of selective discovery on the part of Banro and likewise no question of any likelihood that Van Rooyen was making mistaken or false assertions in his discovery affidavit. This does not equate with a bald acceptance of the correctness of Banro's books and records. On the issue of ownership of the cassiterite, there was no suggestion on the papers or in evidence that some or other undisclosed document, under the control or in the possession of Banro would, or could, if produced, cast a new light on such issue.

[50] It follows that there is no merit in the attack on Griesel J's refusal of the application for further discovery. There is likewise not the slightest indication that such refusal in any way constituted unfairness or injustice to Sogem in the hearing of the matter.

The Application for Recusal

[51] The application by Sogem that Griesel J recuse himself from further presiding in the present matter was based largely on the perceptions of one Guy Verhaegen, who described himself as the company secretary and internal law adviser of Sogem. He is a qualified lawyer from Belgium who has been handling the present case on behalf of Sogem and was present in court during almost all the proceedings. He was at all times in communication with Sogem's counsel and spent a considerable time deliberating and consulting with them.

[52] In his affidavit supporting the recusal application, Verhaegen commented on the attack by Mr Badenhorst on Sogem and the DRC government during what he described as an opening address. Much of the attack was directed at the possible involvement of Sogem in the decision of the DRC government to deny Professor Lukombe Nghenda, one of Banro's witnesses, leave to depart from the DRC. This had prompted Banro to apply for a letter of request to be made to the government of the DRC with a view to securing the attendance of Nghenda to testify in the present matter. Griesel J made no comment throughout this address and took no steps to curtail it. He likewise gave no indication that he was not being influenced by the "unsubstantiated allegations" against Sogem. Only when Mr Pincus objected, did Griesel J ask Mr Badenhorst what the meaning and purpose of the address was. When the costs of the application for a letter of request were reserved, Verhaegen saw it as an indication that Griesel J shared the view that Sogem might have had something to do with Nghenda's predicament.

[53] Another incident raised by Verhaegen was the attack by Mr Badenhorst on the honesty of one Kalamba, a legal practitioner from the DRC. Griesel J made no comment and allowed the accusation of dishonesty to remain in the record. This created the impression that the learned judge agreed that Kalamba was dishonest. Similarly, when the application for further discovery was refused, Griesel J, according to Verhaegen's perception, "passively accepted" Mr Badenhorst's suggestion that the application was simply a delaying tactic. On the other hand, when Banro sought to introduce documentation that had not been properly discovered, Griesel J had no problem with it.

[54] Verhaegen suggested in this regard that Griesel J was biased against Sogem. He also treated Mr Pincus badly, interrupting him rudely from time to time and not allowing him to place his objections to inadmissible evidence fully before the court. In this way hearsay evidence found its way into the record. In addition the refusal of the application for further discovery had the effect of curtailing cross-examination of Van Rooyen in regard to the sale of the cassiterite by Sakima to Banro, where he acted on behalf of both parties. This created the impression that Griesel J had prejudged the issue of ownership of the cassiterite in Banro's favour.

[55] In his opposing affidavit on behalf of Banro, Mr R N Wakefield, Banro's attorney, denied that Sogem had proved any actionable bias on the part of Griesel J. On the basis put forward by Sogem, no reasonable person would apprehend that the learned judge was biased and unable to bring an impartial mind to bear on the adjudication of the case. Wakefield described the accusations of Verhaegen as disgraceful, scandalous, scurrilous and contemptuous. They were untrue, unsubstantiated and unjustified, constituting a reckless attack on the integrity of the court and demonstrating merely that the recusal application was spurious.

[56] In his judgment Griesel J referred to the test for bias in recusal cases as laid down by the Constitutional Court in President of the Republic of South Africa v SARFU[1999] ZACC 9; 1999 (4) SA 147 (CC) and SACCAWU and Others v Irvin and Johnson (8) BCLR 886. In par 48 of the former judgment, the court stated in this regard:

It follows from the aforegoing that the correct approach to this application for the recusal of members of this court is objective and the onusof establishing it rests upon the applicant. The question is whether a reasonable, objective and informed person would, on the correct facts, reasonably apprehend that the judge has not or will not bring an impartial mind to bear on the adjudication of the case. That is a mind open to persuasion by the evidence and the submissions of counsel. The reasonableness of the apprehension must be assessed in the light of the oath of office taken by the judges to administer justice without fear or favour and their ability to carry out that oath by reason of their training and experience. It must be assumed that they can disabuse their minds of any irrelevant, personal beliefs or predispositions.

Griesel J added a gloss to this test, namely that:

"it must also be assumed that judges have the integrity and intellectual honesty to disabuse their minds of prima facieviews held or even expressed at some stage of a trial or an argument in the light of subsequent developments or more mature reflection".

[57] On the criticism that he had not intervened during Mr Badenhorst's attacks on Sogem and Kalamba, Griesel J pointed out that Sogem had been represented at all times by senior and experienced legal representatives. They were expected to be vigilant in the protection of their clients' interests and were free to object to any untoward, overly robust or questionable terminology employed by opposing counsel during cross-examination or argument. If they should choose not to do so, they should not expect the court to take over their function. On the occasions when the court did intervene, no rudeness was ever intended and certainly it could not be expected that experienced counsel would be in the least intimidated by it. On none of the grounds raised by Sogem was the court hence satisfied that any reasonable apprehension of bias had been made out. The application was accordingly refused with costs, including the costs of two counsel.

[58] In his argument on behalf of Sogem Mr Pincus submitted that there had been a perception of bias in that justice was not seen to be done as a result of Griesel J's failure to intervene when appropriate. Mr Pincus went even further in his suggestion that Griesel J appeared to have "wholeheartedly embraced the repeated attempts on the part of Respondents to besmirch Sogem". His conduct after dismissing the recusal application, Mr Pincus argued, demonstrated with even more clarity why he should have recused himself. In this regard he gave "flawed rulings" and failed to ensure that justice was done.

[59] There is not the slightest merit in any of these submissions. I have read the application carefully and considered every point of criticism raised by Verhaegen and relied on in argument by Mr Pincus. I am inclined to agree with the strongly worded response of Wakefield in his opposing affidavit aforesaid. The accusations and criticism levelled at Griesel J were, in my view, quite unfounded and cast in totally unacceptable, if not abusive, terms. There was no basis at all for a perception of bias or lack of impartiality, let alone a reasonable perception. My impression, on the contrary, is that the learned judge conducted himself with remarkable patience and restraint. I need add nothing, with respect, to his impeccable reasoning and justification for dismissing the application. As in the case of his dismissal of the application for further discovery, his dismissal of the recusal application cannot be regarded as constituting in the least an unfair hearing to the prejudice of Sogem.

The Application for a Commission De Bene Esse

[60] Sogem next brought an application for the appointment of a commission de bene esseto take evidence on commission in Brussels, Belgium, of one Ms Hélène Ndombe Sita. She is described as the DRC Minister of National Economy, Industries and Small and Medium Size Enterprises at the time decree 0035 was issued on 6 May 1997. In the alternative Sogem sought that her affidavit relating to the issue and to the interpretation of such decree be admitted as evidence in terms of rule 38(2) of the rules of this court. According to Attorney Verhaegen's supporting affidavit, Ms Sita had refused, quite reasonably, to leave Brussels, where she was living, to attend the hearing, because she was in fear of her life after the coupdeposing President Mobutu Sese Seko and bringing President Laurent Kabila to power in May 1998. Her evidence regarding decree 0035, however, was "highly material and relevant" to the issues in dispute, particularly the issue of whether or not Sakima SARL was properly incorporated. Ms Sita had been present at the time the said decree was issued and was in fact a co-signatory thereto. It was hence in the interests of justice and fairness that her evidence be placed before the court.

[61] In his opposing affidavit on behalf of Banro, Attorney Wakefield averred that the application was yet another attempt by Sogem to delay proceedings. It concerned the interpretation of decree 0035, which had not been raised on the papers placed before this court at the time the matter was referred to evidence and was hence not one of the issues requiring determination in terms of the order of this court. In any event the interpretation of statutory or similar enactments lay within the function of the court, and was not a matter of opinion, however well qualified the person giving the opinion might be. Any such evidence would be irrelevant, inadmissible or immaterial.

[62] In his affidavit supporting the opposition to Sogem's application, Professor Thomashausen described decree 0035 as a "legal norm" and not an administrative act or contractual disposition. It should hence be interpreted in accordance with the relevant rules of statutory interpretation, and not as if it were a private convention between two or more parties. In this regard the principles of interpretation in the law of the DRC are the same as those subsisting in Belgian law and other civil law systems in Europe. This means that the literal meaning of the norm must be established within its proper context and with due regard to the objectively determinable intention of the legislator. The subjective aim or motive of the legislator is, therefore, neither admissible nor relevant. For these reasons Ms Sita's evidence would of necessity fall to be rejected. In any event, Thomashausen added, he was of the view that the wording of decree 0035 was clear and unambiguous and that Ms Sita's interpretation thereof was incorrect.

[63] In his replying affidavit Verhaegen rejected Thomashausen's description of decree 0035 as a "legal norm", averring that it was in fact an administrative act as opined by Professor Nghenda in his work on company law in the DRC. He questioned Thomashausen's expertise and suggested that his approach demonstrated that he had "lost his impartiality".

[64] In his judgment on the application Griesel J accepted that he had a discretionary power to grant or refuse the relief sought. He pointed out that rule 38(3) of the rules of this court afford the court a discretion to grant the relief sought provided it is "convenient or necessary for the purposes of justice". In the present matter the taking of evidence on commission in Belgium was clearly inconvenient. In addition the proposed evidence of Ms Sita did not pass the test of materiality, while its evidentiary value was "dubious at best". It would appear that she was passing off her personal opinion as the "collective view of the ministerial council". This might prompt Banro to acquire the services of the Prime Minister or other members of the ministerial council for purposes of presenting a contrary collective opinion. Ms Sita's evidence might then, Griesel J observed, "turn out to be tantamount to opening a can of worms, figuratively speaking". In any event the costs of the litigation up to that stage of the proceedings far exceeded the value of the cassiterite in dispute. Granting the application would inevitably increase such costs considerably and protract the hearing even more. Apart from the obvious inconvenience this would cause to Banro, it could not be in the interests of justice to grant such application. Equally unjust would be an order granting the alternative relief sought, namely to allow Ms Sita's evidence on affidavit, since her evidence could not then be tested by cross-examination. The application was accordingly refused with costs.

[65] In his argument on behalf of Sogem, Mr Pincus submitted that decree 0035 should be regarded as an administrative act akin to a licence or permit. It should furthermore be interpreted in accordance with South African, and not DRC, law. The reason is that evidentiary matters constitute procedural law and must hence be determined according to the lex fori. The wording of the decree was, Mr Pincus suggested, clear and unambiguous in that it authorised the "creation" (fondation) of a new SARL, separate and distinct from the SPRL. In this regard extrinsic evidence, such as that Ms Sita proposed to present, was admissible, relevant and material. The cost of taking evidence on commission should not be a factor in considering whether or not the application should be granted, since the parties were "obviously litigating on a luxurious scale".

[66] It is significant that it was nowhere suggested that the refusal of the application for a commission de bene essewas the result of partiality or bias on the part of Griesel J. If that was the intention in raising this issue, it can patently not succeed. There was not the slightest indication of impropriety in the form of partiality or bias or, for that matter, any other form of irregularity, in the record of proceedings relating to this application. Once again I am of the respectful view that the learned judge considered the application and argument carefully and in an exemplary fashion.

[67] The reasons given by Griesel J for dismissing the application cannot, in my view, be faulted. It is the function of the court to interpret legislation or documentary evidence, such as the decree in question. The subjective opinion of any person involved in the issue of the decree, on the ambit and meaning thereof, be it a legal norm or an administrative act, cannot be relevant or material. And if that person was only one of a number, it is clear that his or her opinion cannot represent that of all the persons involved. In any event the interpretation of the decree would become relevant only when consideration is given to the issue as to whether or not Sakima SPRL was transformed into Sakima SARL.

[68] In exercising his discretion whether or not to grant the relief sought, the learned judge was, with respect, clearly justified in holding that such relief was neither convenient nor necessary for purposes of justice, as required by the provisions of rule 38(3). It would clearly have been a time-consuming and unjustifiably expensive exercise (even if the parties had hitherto litigated "luxuriously"), with little hope of anything of substance being exposed.

A Fair Hearing in Other Respects?

[69] It follows from these considerations that the dismissal by Griesel J of the three applications in question cannot be regarded as demonstrating any partiality or bias on the part of the learned judge. It can likewise not be regarded as constituting an unjust, unfair or otherwise prejudicial hearing from Sogem's point of view. The only question remaining in this regard is whether or not Sogem received a fair hearing in other respects.

[70] Because of the gravity of this averment, I perused the complete record of proceedings with great care, giving particular attention to objections raised by Mr Pincus, debates between him and Mr Badenhorst, and observations made from the bench. I also listened carefully to the arguments raised by Mr Pincus in this regard, both in his heads of argument and from the bar. Having done so, I am at a loss to discover any failure by Griesel J to apply the principles of natural justice or to give both parties a right of audience and the opportunity to ventilate all disputes fully and properly.

[71] What exactly should be understood by the learned judge's alleged failure (par 35 above) to avoid "a trial by ambush" or to ensure that the parties were not taken by surprise, was not elucidated in the papers or in argument. Certainly if any party should feel prejudiced by unexpected tactics employed by another party, the court would not be averse to granting a postponement to enable the allegedly prejudiced party to consider his, her or its position. On the occasions that Griesel J refused a postponement or refused to admit evidence, it was only after he had heard full argument from both sides and only on eminently reasonable grounds.

[72] There is no merit in the suggestion by Mr Pincus that Griesel J had a "preconceived notion" that Sogem was adopting dilatory tactics and raising new points as the hearing proceeded (par 36 above). The learned judge was quite justified, in my respectful view, to regard the plethora of interlocutory applications raised by Sogem as causing unnecessary delays and protracting the hearing far beyond the time period allotted for it. On reconsideration and in retrospect, that is exactly what their effect was.

[73] As mentioned before, Griesel J, in my view, exhibited exemplary restraint and patience throughout the hearing, despite his being taxed to the limit by seemingly interminable interruptions. His conduct of the trial was certainly not characterised by undue haste to finalise the proceedings. To suggest that the rulings he made against Sogem were "flawed", unfair and unjust, if not indicative of bias and antagonism against Sogem, is abusive and devoid of substance. Even more abusive is the accusation that Mr Badenhorst succeeded in "poisoning the Judge's mind" with emotive submissions and mudslinging at Sogem (par 37 above).

[74] I agree with Mr Pincus (par 38 above) that it was not wise to request Professor Thomashausen to act as an interpreter when the regular interpreter was not available. It is quite unjustified, however, to describe that portion of the hearing as "farcical". Such criticism smacks of unwarranted exaggeration.

[75] It follows from the above that I am quite satisfied that Sogem did indeed receive a fair hearing.

THE APPLICATION TO ADDUCE FURTHER EVIDENCE ON APPEAL

[76] As mentioned earlier in this judgment (par 5 above), Sogem brought an application at the commencement of the appeal for leave to adduce further evidence in terms of the provisions of section 22 of the Supreme Court Act59 of 1959. In the alternative it sought to place such evidence before the court by way of affidavit in terms of rule 38(2) of the rules of this court. This application was dismissed, subject thereto that costs would stand over for consideration in the main appeal, and that reasons for this decision would be furnished later. It may be appropriate to deal with this now.

[77] The application was directed at acquiring leave to adduce the evidence of one General Likulia Bolonga Lingbangi (hereinafter referred to as "Likulia"), who was the Prime Minister of the DRC at the time decree 0035 of 6 May 1997 was issued. As appears from the supporting affidavit of Verhaegen, he was in fact "the grantor and signatory" of such decree. After the accession to power of former President Laurent Kabila, Likulia was apparently placed under house arrest and was therefore unable to testify in this matter or even to depose to an affidavit. Once President Joseph Kabila came to power, however, the situation relaxed somewhat and Likulia, a qualified lawyer and professor of criminal law at the University of Kinshasa, was able to furnish Verhaegen with an affidavit. He also indicated his willingness to testify in this matter should he be called upon to do so.

[78] The gist of Likulia's testimony was to be that he had presided at a meeting of the Council of Ministers on 2 May 1997. At that meeting Ms Sita, the Minister of National Economy, Industry and Small and Medium Size Enterprises, tabled a request by Sakima SPRL for the necessary authorisation to transform it from an SPRL to an SARL. After discussion, and with reference to the file and documents submitted by Sakima SPRL (in particular the by-laws of Sakima SARL), the Council of Ministers recommended that authorisation be granted for the creation of a new and quite distinct joint-stock limited liability company to be known as Sakima SARL. The reason for this decision was that the said file contained no reference, detail or particularity regarding the pre-existing SPRL. This means that the Council did not recommend the transformationof Sakima SPRL, but, indeed, that a new legal entity be created(bien qu'une nouvelle entité juridique soit créée). The decree subsequently signed and issued by Likulia on 6 May 1997, namely decree 0035, hence authorised the creation (la création) of a new and quite distinct SARL in accordance with the said recommendation. In Likulia's view, the decree did not give rise to any ambiguity (ne soulève aucune ambiguïté).

[79] In his argument on behalf of Sogem, Mr Pincus submitted that Likulia's evidence was of a factual, rather than legal, nature. In addition it was admissible and so material to the adjudication of the dispute in issue that, if adduced, it would be practically conclusive. In this regard Mr Pincus suggested that decree 0035 was not in the nature of a statute, but was, rather, an administrative act akin to a licence or permit.

[80] Mr Badenhorst, for Banro and Sakima SARL, opposed the application on the basis that it was clearly inadmissible. It was, he argued, an overt attempt to introduce evidence relating to the interpretation of decree 0035. As testified by Professor Thomashausen, decree 0035 was not an administrative act but a "legal norm" which must be interpreted in accordance with the rules of statutory interpretation. Inquiries into the motives and reasoning of the legislator are generally forbidden for purposes of such interpretation.

[81] This court has already ruled (par 5 above) that the issue of interpretation of decree 0035 has become an issue in that it was extensively traversed in evidence and argument, and comprehensively dealt with by Griesel J in his judgment. The parties were hence free to address us on this issue. This does not, of course, mean that either party would be entitled, as of right, to adduce further evidence on the interpretation of such decree. A court of appeal has the power, in terms of section 22 of the Supreme Court Act59 of 1959, to allow further evidence on appeal, but it is a power that is exercised sparingly and only in exceptional circumstances. The court must be satisfied that the further evidence will not unduly prejudice the opposing party and will in fact be necessary for purposes of doing justice between the parties. In addition the evidence sought to be adduced must be admissible, credible, relevant and of such significance that, if adduced, it would be practically conclusive. See Colman v Dunbar 1933 AD 141 at 160-161; Staatspresident en 'n Ander v Lefuo[1990] ZASCA 6; 1990 (2) SA 679 (A) at 692A-C; Simpson v Selfmed Medical Scheme and Another 1995 (3) SA 816 (A) at 825B-E; Herbstein and Van Winsen The Civil Practice of the Supreme Court of South Africa(4^thedition 1997) 909-911.

[82] To a large extent the present application accords with that brought by Sogem for the appointment of a commission de bene esseto solicit the evidence of the said Ms Sita (par 60-68 above). This is not surprising, since Ms Sita was also present at the meeting of the Council of Ministers and was in fact a co-signatory to the decree approved and issued by Likulia. The suggestion by Mr Pincus that Likulia's evidence relating to the decree would be factual rather than legal cannot be correct. Just as Ms Sita's evidence would have turned upon the interpretation of the decree, just so Likulia's evidence would of necessity turn upon its interpretation. It is patently absurd for Likulia to describe the decree as unambiguous, if he felt the need to tender an explanation as to why the Council of Ministers recommended the creation of a new SARL instead of a simple transformation from an SPRL to an SARL. The motivation and reasoning of the Council of Ministers in making this recommendation, with reference to the alleged paucity of information relating to the SPRL, can certainly not be admissible for purposes of establishing the meaning of the decree.

[83] In any event the issue of the creation of Sakima SARL, as opposed to its transformation from the pre-existing Sakima SPRL, was fully canvassed in the evidence of Thomashausen and Decamp and comprehensively argued by counsel on both sides. Thereafter Griesel J dealt with it in some detail in his judgment. Likulia's evidence would, in essence, amount to the confirmation of Decamp's opinion regarding the interpretation of the decree.

[84] It follows that the further evidence Sogem is seeking to place before this court is not such that it would, if adduced, be practically conclusive. It certainly cannot be regarded as necessary for purposes of doing justice between the parties and it is highly debatable, in my view, whether it can stand up to the test of admissibility and relevance or materiality. It is for these reasons that the application was dismissed. As for the costs, I am of the view that the costs should follow the event, including the costs of two counsel.

CONSIDERATION OF THE ISSUES REFERRED FOR FURTHER HEARING [85] I turn now to the issues referred by this court for the hearing of further evidence (par 17 above). The first issue, namely whether or not Sakima SPRL was properly incorporated and registered as a private company with limited liability in accordance with the laws of the DRC, was conceded by Sogem and does not require further consideration except for the costs relating thereto. Similarly Banro and Sakima conceded that Sogem had the required locus standi in iudicio act in these proceedings. It is hence not necessary to deal with the eighth issue.

[86] The seventh issue, namely whether or not the removal of the cassiterite by Somico from the possession of Sakima SARL, and its subsequent sale to Sogem, was lawful, would appear to have become academic, except for the costs relating thereto. In regard to this issue Griesel J declined, on the basis of the principle of judicial restraint, to make any determination. He found support for this approach in, amongst other authorities, the case of Swissborough Diamond Mines (Pty) Ltd and Others v Government of the Republic of South Africa 1999 (2) SA 279 (T). In any event the learned judge questioned the relevance of this issue in that Banro had, in his view, acquired ownership of the cassiterite some time before the issue of decree 101 on 29 July 1998.

[87] To some extent the sixth issue, whether or not Sakima SARL had, or has, locus standi, is tied up with the seventh. It arose by virtue of the provisions of decree 101 of 29 July 1998, which purported to abrogate decree 0035. According to Sogem, Sakima SARL ceased to exist from that date and was hence deprived of the necessary locus standito become involved in the present proceedings. On the other hand, Griesel J held that Sakima SARL was properly incorporated and registered and that it lawfully acquired ownership of the cassiterite from Sominki, whereafter it lawfully sold it to Banro on 7 May 1998, some time before the purported abrogation of the decree on 29 July 1998. If these findings are upheld, then the locus standiof Sakima SARL is, for purposes of determining the ownership of the cassiterite, no longer relevant. It may well be relevant, however, for purposes of establishing whether or not Sakima SARL has the required locus standito participate in the present proceedings. If it is assumed, as I am prepared to do, that decree 101 indeed terminated its existence, then certain costs implications may arise. I shall return to this later (par 141 below).

[88] The remaining issues may, I believe, be reduced to two. Firstly (incorporating the second and third issues and also the issue relating to the interpretation of decree 0035): was Sakima SPRL properly transformed into Sakima SARL and subsequently registered in accordance with the laws of the DRC? Secondly (incorporating the fifth issue): did Sakima SARL lawfully acquire ownership of the cassiterite from Sominki and thereafter lawfully transfer such ownership to Banro? The fourth issue was not considered by Griesel J since he was satisfied that Sakima SARL had been properly registered. If this finding is upheld, it will likewise not be necessary for this court to deal with such issue.

TRANSFORMATION AND REGISTRATION OF SAKIMA SARL

[89] The transformation of Sakima from an SPRL to an SARL became the central issue in the proceedings before Griesel J. To a large extent it turned upon the interpretation of decree 0035 of 6 May 1997, but also related to a number of other legal documents and proceedings. The issue was obfuscated by conflicting views and opinions, all of which Griesel J considered carefully. The learned judge likewise gave full consideration to the various arguments, as amended from time to time, raised by Sogem. Of some significance in this regard was that Sogem originally denied that an SPRL could be transformed into an SARL in terms of the relevant provisions of the law of the DRC. By the time the matter came before Griesel J, however, it was common cause among the experts that such transformation could take place. The only real issue was whether or not transformation had in fact taken place; in other words, firstly, whether decree 0035 had transformed the existing SPRL into an SARL or simply created a new SARL and, secondly, whether the process had been perfected by the registration of the new SARL.

[90] The learned judge dealt in detail with the various steps taken to effect the transformation of Sakima SPRL into Sakima SARL. It was common cause, he held, that the clear intention of all concerned was to transform the SPRL into an SARL. During the course of Ms Decamp's evidence, however, the issue of interpretation arose and the question was asked whether decree 0035 had sanctioned a transformation as such, or had authorised the creation of a new SARL. This issue was linked to the distinction between so-called "classic" and "non-classic" transformation. The former ensured that the legal personality of the SARL would simply be a continuation of the existing legal personality of the SPRL, while the latter had the effect that the SARL would acquire its own, distinct, legal personality after that of the SPRL had been extinguished.

[91] According to Ms Decamp the use of the word fondationin decree 0035 indicated the creation of a new SARL rather than the transformation of an SPRL into an SARL. She found support for this opinion in the fact that the by-laws of the SARL did not refer to the intention to transform the SPRL into an SARL. Professor Thomashausen, however, opined that fondationdid not bear this restricted meaning and was, indeed, equally consonant with a classic transformation. This was supported by the wording of the preamble of the decree and by the content of the mining convention, which recorded that Banro and the Government of Zaïre had agreed to transform the SPRL into an SARL.

[92] Having had regard to decree 0035 against the background of the surrounding circumstances, Griesel J concluded that Sogem's argument on the interpretation issue was "nothing other than an exercise in semantics". In view of the expressed intention of the parties, including the Government of Zaïre, to effect a transformation of the existing SPRL into a new SARL, it would have been absurd for that same government to refuse transformation and to grant the creation of a new SARL instead. The learned judge hence determined this issue in favour of Banro and Sakima.

[93] On the question whether or not the new SARL had been properly registered after such transformation, Griesel J was satisfied that it had. He found support for this finding in the fact that a copy of the by-laws of the SARL had been attached to the minutes of the extraordinary general meeting of shareholders of the SPRL approving the transformation. Those by-laws were duly received by the Registrar and were forwarded for publication in the Government Gazette. The learned judge rejected as "utterly devoid of merit" Sogem's argument that, because the filing deed or certificate of registration (acte de depôt) issued by the Registrar did not refer to such by-laws, Sakima SARL was never duly registered and hence never came into existence as a legal entity. In this regard he once again held in favour of Banro and Sakima SARL.

[94] Mr Pincus argued, on behalf of Sogem, that decree 0035 was unambiguous. The use of the word fondation, he submitted, indicated that authorisation had been given for the creation of a new SARL, and not for the transformation of the SPRL into an SARL. This appeared from the general context of the decree as a whole and from the ordinary grammatical use of the words used therein. He referred to various other DRC decrees in which transformation, and not fondation, had been used.

[95] In the alternative Mr Pincus argued that, if decree 0035 should be regarded as ambiguous, consideration should be given to the factual background and "contextual setting" pursuant to which the decree was granted. In this regard the by-laws of Sakima SARL made no reference to transformation in the sense of continuation of the legal personality of Sakima SPRL. On the contrary, they contained a number of provisions supporting Sogem's interpretation of decree 0035.

[96] Further support for this approach appeared, Mr Pincus argued, from Ms Decamp's evidence on the lack of "symmetry" between the articles of association of the SPRL and those of the SARL. It also appeared from the fact that the resolution of the shareholders of Sakima SARL, dated 21 October 1996, made no reference to article 42 of the decree of 1887, which provided for transformation with continuation of legal personality. Similarly the mining convention of 13 February 1997 contained provisions that conflicted with the interpretation of Banro and Sakima. More specifically section 51 thereof made provision for a suspensive condition which, if not fulfilled within six months, would nullify Sakima SARL. If this happened, the transfer of mining titles and assets and liabilities from Sominki to Sakima would have been similarly nullified.

[97] Mr Pincus submitted further that, even if decree 0035 authorised transformation of Sakima SPRL into an SARL, its shareholders failed to take the necessary steps to implement and give effect to such authorisation. He submitted in this regard that it was a fatal defect in the registration process that the acte de depôtrecorded that the relevant minutes had been filed but did not make reference to the SARL by-laws. It was not sufficient, he argued, that there was evidence that the by-laws were in fact present in the relevant file. For purposes of acquiring a valid incorporation and registration of the SARL, there had to be formal proof, in the form of an acte de depôt, that its by-laws had been lodged with the registrar. This could be recorded in the same acte de depôtas that recording the filing of the minutes, or it could be recorded in a separate acte de depôt.In the absence thereof, however, Sakima SARL was never validly incorporated and registered.

[98] In order to determine whether or not there was a proper transformation of Sakima SPRL into Sakima SARL, reference must be had to the relevant documentation supplemented, in so far as it may be necessary, by the evidence of the respective expert witnesses. The starting point must needs be to establish the procedure required to be followed in transforming an SPRL into an SARL. This dates back, it would appear, to section 42 of the decree of 27 February 1887, as amended by a decree of 23 June 1960. Such section provides that an SPRL may be transformed into any other form of company without creating a new legal person. It reads:

La société privée à responsabilité limitée peut en tout temps, moyennant l'adhésion unanime des associés, se transforme en une société d'un autre type, sans que cette transformation donne naissance à une personne morale nouvelle et sous réserve des droits des tiers.

It may be rendered as:

The private company with limited responsibility may at any time, with the unanimous approval of its members and subject to the rights of third persons, be transformed into a company of another kind, without such transformation creating a new "moral" [ie legal] person.

In his text book on Congolese company law (Droit Congolais des Sociétés(1999) at 944), Professor Lukombe Nghenda sees this as the acceptance, by the Congolese colonial legislature, of the continuation of the legal personality of an SPRL when it is transformed into another kind of company. The learned author does not thereupon embark on a discussion of the concept of transformation, the reason being, I would suggest, that it does not require any elucidation. The words, se transformerand transformation, are, in the context of the cited provision, indicative merely of a change of form - a metamorphosis as it were - from one kind of company to another. In the relevant Congolese law it meant, in addition, that the change of form would not alter the essential character, or legal personality, of the company being transformed.

[99] Shortly after its incorporation and registration during August 1996, the shareholders of Sakima SPRL, at an extraordinary general meeting (assembléegénérale extraordinaire) held on 21 October 1996, resolved to transform the SPRL into an SARL, for which purpose it would adopt new by-laws (statuts). This appears from the first resolution (première résolution), which reads:

L'Assemblée décide de transformer la forme de la société qui devient une société par actions à responsabilité limitée.

This may be translated as:

The meeting resolves to transform the form of the company, which becomes a joint-stock company with limited liability.

As prescribed by section 42 of the decree of 1887, the resolution was directed at changing the form of the company from an SPRL to an SARL.

[100] The transformation resolution received the blessing of the Government of Zaïre, Banro and Sominki in their mining convention (convention minière)concluded on 13 February 1997. In the preamble the parties recorded their agreement that Sominki would transfer to Sakima SARL, "a company to be formed" (une société à créer) certain mining rights, while Banro would furnish the capital and necessary financial support. The introductory paragraph of article 7(a) reads, under the heading Création de SAKIMA SARL("Creation of Sakima SARL"):

Pour l'exercice des droits et obligations qui découlent de la présente Convention, BANRO et l'ETAT conviennent de transformer SAKIMA SARL en une société zaïroise par actions à responsabilité limitée. Cette société prendra la dénomination de Société Aurifère du Kivu et du Maniema ("SAKIMA SARL") et aura son siège social au Zaïre.

This may be rendered as follows:

For purposes of exercising the rights and obligations that arise from the present Convention, Banro and the State agree to transform Sakima SPRL into a joint-stock [the legal rendition of par actions, which would literally be translated as "by actions"] Zaïrian company with limited liability. This company will bear the name Société Aurifère du Kivu et du Maniema("SAKIMA SARL") and will have its registered office in Zaïre.

It is of some interest, for present purposes, to note that the passage cited from the preamble uses the verb "to create" (créer) in relation to a company "to be formed". It could just as easily have used the verbs former("to form" or "to create"), établir("to establish", "to institute" or "to create"), fonder("to found" or "to establish") or instituer("to institute" or "to establish").

[101] Article 51 of the mining convention indeed contains a suspensive condition. After stating that it will have a life span of twenty-five years, which may be extended under appropriate conditions, the convention provides that it will terminate with immediate effect should Sakima SARL not be properly constituted (régulièrement constituée) within six months of coming into operation. Once again a number of synonyms could have been used instead of "constituted" (constituée), namely "instituted" (instituée), "incorporated" (incorporée) or even "registered" (enrégistrée).

[102] Under the heading "Formation and By-laws of the Company" (Formation et Statuts de la Société), the introductory paragraph records that it has been decided, subject to approval by ministerial decree, to establish (fonder) a joint-stock Zaïrian company with limited liability, namely Sakima SARL. Once again any number of synonyms could have been used in the place of fonder(par 100-101 above). These by-laws were duly notarised on 20 February 1997 and, as mentioned above, found their way into the relevant file, either as an annexure to the minutes of the extraordinary general meeting of the shareholders of Sakima SARL, or by simply being filed there (par 93 above).

[103] The mining convention of 13 February 1997 was duly approved by ministerial decree 0021 dated 17 March 1997. This was followed, on 6 May 1997, by ministerial decree 0035, which authorised the establishment (fondation) of Sakima SARL. In the preamble specific reference was made to the approval of the mining convention by decree 0021 and the request by Sakima SPRL to convert or transform itself (se transformer) into an SARL. Article 01 of the decree then reads:

Est autorisée la fondation d'une société par actions à responsabilité limitée dénommée Société Aurifère du Kivu et du Maniema, en abrégé "SAKIMA, s.a.r.l.

It may be translated thus:

The establishment of a joint-stock company with limited liability, and named Société Aurifère du Kivu et du Maniema, is [hereby] authorised.

[104] I find it astonishing how much time and energy was wasted on attempting to distinguish between the use of the word "transform" (transformer) in the preamble of the decree, and the word "foundation" (fondation) in the body of the decree. Sogem preferred to render fondation "creation", but it could just as correctly have been rendered, literally, as "foundation", or, in the alternative, as "establishment" or "institution". My personal preference is for "establishment", but that does not mean that any of the other synonyms may not be quite as appropriate or acceptable.

[105] There is not the slightest indication in decree 0035 or, for that matter, in any of the other relevant documents on record, that "fonder" has any special meaning in the context in which it is used. There is likewise no indication that, if it should mean "to create", rather than any of the variety of synonyms that could have been used in its stead, it signifies the creation of a new company rather than the transformation of an existing one. Ms Decamp's suggestions in this regard are artificial, illogical and in direct conflict with the most basic rule of interpretation, namely to establish the ordinary, grammatical meaning of the words used, with reference to the decree as a whole and with due regard to their context. I am in respectful agreement with Griesel J that she was engaging in "nothing other than an exercise in semantics" (par 92 above).

[106] After careful consideration of the wording of the decree, and with due regard to its contextual setting, I agree with Mr Pincus that there is not the slightest ambiguity to be found in it. I disagree, however, with the interpretation he has sought to place on it (par 94 above). When the decree is interpreted in accordance with the ordinary grammatical meaning of the words occurring therein, the intention of the Council of Ministers is crystal clear, namely to authorise the transformation of Sakima SPRL into Sakima SARL. They had the authority and competence to do so in terms of article 42 of the founding decree of 1887, as amended and supplemented from time to time (par 98 above). By issuing the decree they were responding appropriately to a valid request by the shareholders of Sakima SPRL, as recorded in the minutes of their extraordinary general meeting of 21 October 1996 (par 99 above), to effect the conversion of Sakima from an SPRL to an SARL. This would also be in accordance with the express wishes and decisions of the parties to the mining convention of 13 February 1997 (par 100 above). Not only was the Government of Zaïre itself a party to such convention, but that very Government saw fit to approve the convention by way of ministerial decree 0021 of 17 March 1997 (par 103 above).

[107] There is no merit in the submission (par 91 and 95 above) that the by-laws of Sakima SARL should have referred to the intention to transform the SPRL into an SARL in terms of article 42 of the decree of 1887. There was no evidence of any such requirement, and even less of the need to have "symmetry" (par 96 above) between the by-laws of the SPRL and those of the SARL (whatever this may mean). It smacks suspiciously of a last-gasp thumb-sucking exercise. The by-laws of Sakima SARL were adopted on the basis of the decision recorded in the minutes aforesaid and confirmed in the agreement appearing from the mining convention. Both these documents refer specifically to transformation of the SPRL into an SARL. When reference is, therefore, made in the by-laws to the decision to establish (fonder) an SARL, it clearly refers to the decision to transform it from the one to the other. For this very reason the authorisation, in decree 0035, to establish (fonder) an SARL can mean nothing more nor less than to transform Sakima SPRL into Sakima SARL. This is placed beyond doubt by the reference, in the very preamble to the decree, to the request by Sakima SPRL to "transform itself" (se transformer) into an SARL.

[108] To suggest, as Sogem has done, that the Council of Ministers considered a request for transformation, but decided instead, mero motuand without any notice to Sakima SPRL or any other interested party, simply to authorise the creation of a new SARL, is patently absurd, if not fatuous. I have no hesitation in respectfully associating myself with Griesel J's rejection of Sogem's submissions in this regard. The learned judge's finding that decree 0035 authorised the transformation of Sakima SPRL into Sakima SARL cannot, with respect, be faulted.

[109] The related issue, namely whether or not Sakima SARL was properly incorporated and registered in accordance with Congolese law, may be dealt with briefly. An appropriate starting point is the official filing, on 12 June 1997, of a copy of the minutes of the extraordinary general meeting of the shareholders of Sakima SPRL, held on 21 October 1996 (par 99 above). It was duly recorded in a filing deed or certificate (acte de depôt) bearing the signature and official stamp of the divisional registrar of the Kinshasa/Gombe High Court (Greffier Divisionnaire du Tribunal de Grande Instance de Kishasa/Gombe). It would appear that the deed erroneously refers to the minutes of Sakima SARL, which was, of course, not yet in existence. This was clearly a bona fideerror that did not give rise to any suggestion that the deed was thereby invalidated or otherwise irregular. Likewise an apparent error was the fact that the deed did not certify that a copy of the by-laws of Sakima SARL were also filed, either as an annexure to the minutes or separately. That it was indeed received, however, appears with abundant clarity from a letter, dated 12 July 1997, from the Registrar to the Government Printer, requesting that the minutes and by-laws be published in the next Official Gazette (Journal Officiel).

[110] The suggestion by Mr Pincus (par 97 above) that the failure by the Registrar to mention the by-laws in the acte de depôtconstituted a fatal defect in the registration procedure, cannot be correct. This would mean, as Griesel J put it in his judgment, that a "trivial omission" by the Registrar would have the effect of inevitably invalidating all legal acts undertaken by, or on behalf of, Sakima SARL pending registration. Despite the fact that it has done everything required of it, it would be at the mercy of a careless or inexperienced official who could, conceivably, cause it extreme prejudice.

[111] The fact of the matter is that the by-laws were properly filed and officially forwarded to the relevant official for publication in the Official Gazette. This was done in accordance with the relevant Congolese law, as discussed fully by Griesel J in his judgment. I do not propose to repeat it. And even if it should appear that there was not strict compliance with the prescribed regulations in that the acte de depôtfails to make reference to the by-laws in question, justice, fairness and reasonableness dictate that it must, of necessity, be accepted as substantial compliance with such regulations. It follows that I am in respectful agreement with Griesel J that Sakima SARL was properly registered in accordance with Congolese law.

OWNERSHIP OF THE CASSITERITE

[112] As mentioned in the introduction to this judgment (par 2 above), Davis J held that Banro was the owner of the disputed cassiterite and was entitled to possession of it. Griesel J subsequently (par 4 above) concurred in this finding, likewise holding that Banro became owner of the cassiterite after acquiring it lawfully from Sakima SARL on 7 May 1998. It will be recalled (par 13 above) that Van Rooyen averred that he had acted in his dual capacity as chief executive officer of both these companies in negotiating the purchase and sale of the cassiterite on the said date.

[113] It is common cause in this regard that, in accordance with Congolese law, ownership passes as soon as the parties have reached consensuson the thing sold and the price to be paid for it. Performance, in the sense of delivery on the one hand and payment on the other, is not required. This appears from article 264 of the applicable Belgian Civil Code (article 1583 of the present Code), which applies identically in the DRC. It reads:

Elle est parfaite entre les parties, et la propriété est acquise de droit à l'acheteur à l'égard du vendeur, dès qu'on est convenu de la chose et du prix, quoique la chose n'ait pas encore été livrée ni le prix payé.

It may be translated as:

[The contract of sale] between the parties is perfected, and the ownership is legally acquired by the purchaser from the seller, as soon as agreement has been reached on the thing and the price, even though the thing has not yet been delivered nor the price paid.

This may hence justifiably be regarded as a case of ownership passing by agreement alone (nudo consensuor solo consensu).

[114] Sogem has appealed the concurrent findings of Davis J and Griesel J regarding the ownership of the cassiterite. It persists in its averment that Sakima SARL did not lawfully acquire ownership in the cassiterite from Sominki, with the result that Sakima SARL could not lawfully transfer ownership therein to Banro. Much of its argument, however, was directed at whether or not payment had been made by Banro to Sakima SARL and whether or not there had been delivery of the cassiterite.

[115] In this regard Mr Pincus accepted that payment or delivery was not a prerequisite for the passing of ownership. He submitted, however, that, inasmuch as Van Rooyen allegedly acted in a dual capacity in concluding the agreement between Sakima SARL and Banro, the facts and surrounding circumstances, including those relating to payment and delivery, had to be carefully considered. This was essential to ensure that there was a meeting of two separate and distinct wills. In this regard he argued that there were certain unsatisfactory aspects of Van Rooyen's evidence pertaining to Banro's "payments in advance" to Sakima SARL and to the "standing arrangements" he had made, "again with two hats", with Banro and Sakima SARL. There was, Mr Pincus submitted, a dearth of documentation, which had not been discovered or produced, to support Van Rooyen's evidence on this point. It could hence not be held that there had been "a meeting of two separate and distinct wills" for purposes of proving the contract of sale of the cassiterite in question.

[116] In his judgment on the issue of ownership of the cassiterite, Griesel J held that the mining convention of 13 February 1997 had made provision for the cession of mining rights and for the cession of assets and liabilities from Sominki to Sakima SARL. On fulfilment of the suspensive condition contained in article 51 thereof (par 101 above), the cessions became operative and Sakima SARL duly acquired the rights, assets and liabilities of Sominki. Not only did Sakima SARL take over the cassiterite production from Sominki on 17 March 1997, but it in fact mined the cassiterite in question and became the "original owner" thereof.

[117] On the issue whether or not Sakima SARL subsequently transferred ownership in the cassiterite to Banro, Griesel J took note of the argument raised by Mr Pincus on the effect of Van Rooyen's acting in a dual capacity when concluding the agreement between Sakima SARL and Banro. With reference to Van Rooyen's evidence, and the relevant documentation, Griesel J held, on a balance of probabilities, "that this was indeed an instance of two wills, expressed simply through one person". He was hence satisfied that Banro had lawfully acquired ownership in the cassiterite on 7 May 1998 (the reference to 1997 is clearly a typographical error).

[118] The mining convention of 13 February 1997 expressly contemplated the transfer of certain mining rights and assets from Sominki to Sakima SARL, at that stage still a company to be formed. On the same date, by virtue of a written contract of cession of mining rights (contrat de cession de titres miniers), Sominki ceded such mining rights (titres miniers), together with their fixed assets (leurs dépendancesimmobilières) to Sakima SARL. Also on that date the parties concluded a written contract of cession of assets and liabilities (contrat de cession des actifs et du passif) in terms of which Sominki ceded to Sakima SARL certain movable and immovable property, and delegated to it certain debts.

[119] In a letter dated 18 February 1997 from Van Rooyen, as president of Banro, to Mr Mario Fiocchi, managing director of Sominki, Van Rooyen requested confirmation "that all cassiterite and gold bearing ore that has been mined at the Sominki concessions prior to the date of the Convention i.e. February 13^thhas been transferred to Sakima". In his reply dated 21 February 1997, Fiocchi assured Van Rooyen that all stocks of cassiterite and gold "located on the mines" were considered to be "an integral part of mining rights" and had been transferred to Sakima in terms of the relevant cession.

[120] As mentioned before (par 103 above), the mining convention was approved by ministerial decree 0021 of 17 March 1997 and the transfer of mining concessions from Sominki to Sakima SARL were confirmed in official documents emanating from the Ministry of Mines. For present purposes it is not necessary to discuss such documentation inasmuch as it is perfectly clear from the above that Sakima SARL became the owner of the relevant mining rights and concessions on 17 March 1997. I am in respectful agreement with Griesel J (par 116 above) that the two cessions were subject to the same suspensive condition as that governing the validity and empowerment of Sakima SARL. On fulfilment of the condition, the cessions became operative and the relevant rights, concessions, assets and liabilities passed to Sakima SARL. It accordingly became the owner of the cassiterite forming part of Sominki's stock holding at the time, and it is patently obvious that it became the owner of all cassiterite subsequently mined by it, including the disputed cassiterite.

[121] On the remaining issue, namely whether or not ownership in the cassiterite passed from Sakima SARL to Banro, it is common cause that Van Rooyen recorded the sale of the cassiterite by Sakima SARL to Banro in a letter dated 7 May 1998. The letter was addressed to Mr A T Kondrat, the co-chairman of Banro, and signed by Van Rooyen in his capacity as president of Sakima SARL. It bears the heading "Sale of Cassiterite - 99 Tons" and gives a description of seven lots of cassiterite contained in 132 drums with a total net weight of 99 000 kilograms. The rest of the letter reads as follows:

Pursuant to the standing arrangement between Sakima and Banro I confirm that Banro has today purchased and assumed ownership of the lots of cassiterite described below, which have been delivered to Sakima's warehouse in Kindu ready to be railed to Lubumbashi for onward transmission by road and ocean freight to Malaysian Smelting Corporation, Banro's smelter in Butterworth, Malaysia…I further confirm that the price for this material is US$2 500 per ton and that the amount due, totalling US$247 500, will be set off against previous advances to Sakima by Banro.

[122] This ought to have been the end of the matter, since it is abundantly clear from the letter that consensus been reached between Sakima SARL and Banro on the thing (99 tons of cassiterite) and the price to be paid for it (US$247 500). There was nothing to gainsay Van Rooyen’s testimony (par 22 above) that he represented both parties, in his capacity as chief executive officer or president of each, in concluding the agreement. Griesel J was impressed by his evidence and demeanour (par 23 above) and could find no reason to reject his evidence. Mr Pincus nevertheless questioned the learned judge’s finding that there had been a meeting of the minds in this case, averring that the relevant facts and circumstances did not support such finding. Inasmuch as the element of consensusis crucial to the determination of Banro’s claim to ownership of the cassiterite, I believe that Mr Pincus was perfectly entitled to raise this point.

[123] It has been held by this court that a person cannot, as representative of another, contract with himself. See Gutman N O v Standard General Insurance Co Ltd 1981 (4) SA 114 (C) at 119A, where Van den Heever J cited Professor J C de Wet’s contribution on “Agency and Misrepresentation” in the original edition of The Law of South Africavolume 1 (1976) par 107 as authority for this proposition. In the first reissue of The Law of South Africavolume 1 (1993, revised by A G du Plessis) (hereinafter referred to as LAWSA1), the discussion of contracts concluded by a representative with himself occurs in par 106.

[124] In LAWSA par 107 (par 108 of the original edition) Professor de Wet goes on to state, under the heading “double representation”, that a person “cannot conclude a contract on behalf of one person with himself as representative of another person”. In Joel Melamed and Hurwitz v Cleveland Estates (Pty) Ltd; Joel Melamed and Hurwitz v Vorner Investments (Pty) Ltd[1984] ZASCA 4; 1984 (3) SA 155 (C) at 164 D-F, however, Corbett JA, while taking note of this “contrary view”, assumed “in favour of Melamed and Hurwitz that it was legally competent for Melamed, in his capacity as managing director of TMC, to make a contract with himself, in his other capacity as partner in the firm of Melamed and Hurwitz, in terms whereof the latter was appointed as conveyancer for all the erven in the townships”. A similar assumption, once again with reference to Professor de Wet’s opinion and noting what was said in the Joel Melamedcase (supra), was made by Hoexter JA in Durity Alpha (Pty) Ltd v Vagg[1991] ZASCA 20; 1991 (2) SA 840 (A) at 843H-844D.

[125] In the present matter Mr Pincus referred in argument to the recent decision of Samcor Manufacturers v Berger 2000 (3) SA 454 (T). In that case a certain Mr L R Pitot, the “group treasurer” of the plaintiff company, Samcor Manufacturers, and a director of another company, Samcor Wholesale, acted in a dual capacity in concluding agreements of cession and re-cession between these two companies. This involved claims the plaintiff company had against a certain motor dealer. At 459A Le Roux J described Pitot as “the focal point of the decisions taken by both the boards of the plaintiff and of SAMCOR Wholesale”. The main defence raised against the plaintiff was that the cession and re-cession were invalid in that Pitot had purported to contract with himself in implementing the cession and re-cession. After discussing the authorities referred to above (par 124), Le Roux J said the following (at 460H-461B):

The question now arises whether I should be persuaded by the Cape judgment [the Gutmancase supracited in par 123 above] and the failure of the Appellate Division to decide finally on the legal validity of the statement of Prof De Wetthat a representative cannot contract with himself in another representative capacity. I can understand the argument that, where a person has an unfettered discretion to take a decision on an offer or acceptance of a contract, albeit in a representative capacity, he cannot contract with himself where the acceptance or offer in respect of a contract is raised. In other words, unless there is a meeting of two wills, the statement by Prof De Wetmust obviously be correct and there cannot be a contract or a valid agreement unless there is consensus in that sense. There must be a separate and distinct meeting of wills to constitute an agreement. But if the facts show that there were two wills, but that they were implemented or expressed simply through one person, that, in my view, distinguishes it from the Gutmancase and from the principle enunciated by Prof De Wet. In such a case you do not have the difficulty that one man simply decides for both sides whether to accept the offer or not. You have a fettered will or a guided instruction emanating from someone else and the natural person in the middle – as Mr Pitot here – was simply the instrument or the focal point through which the agreement was reached. In my view that would have been the position here.

[126] Although, for present purposes, it is not necessary to respond to the proposition that a person acting in a representative capacity cannot contract with himself, that is to say in his personal capacity, I would like to make the following observation. This proposition is probably attributable to the fact that such person may have difficulty in dissociating himself from his, subjectively perceived, personal interests as a contracting party when he considers, however objectively and dispassionately, the interests of the other contracting party. The concept of the meeting of two separate and distinct wills may, under such circumstances, not easily be envisaged. On the other hand the relevant facts and surrounding circumstances may indeed indicate that he was able to separate his personal from his “representative” interests, in which event there may well be a meeting of two distinct minds.

[127] This is even more so the case where the person acts in a dual or double representative capacity on behalf of both contracting parties. His personal interests would, in such a case, not be relevant unless the applicable facts and circumstances demonstrate that he has allowed personal, subjective, considerations to play a role in the exercise of his representative function. This would, probably, be perceived as a bias or prejudice in favour of, or against, the one or the other. I do not, however, believe, with great deference to that eminent scholar, Professor J C de Wet, that this possibility justifies the proposition that a person cannot act in a representative capacity on behalf of both contracting parties. In this regard I am in respectful agreement with Le Roux J in the Samcor case (par 125 above) that, for purposes of determining whether a valid agreement has been concluded, there must be “a separate and distinct meeting of wills”. Such wills may be “implemented or expressed simply through one person” who may be regarded as “the instrument or focal point” through which the agreement is concluded. This can be established, however, only by a full consideration of the relevant facts and surrounding circumstances.

[128] The relevant facts and surrounding circumstances in the present matter appear from the evidence of Van Rooyen and from a number of documents to which he referred therein. Certainly the most important of these documents is the letter of 7 May 1998 (par 121 above) confirming Banro's acquisition of the cassiterite. As mentioned previously (par 13 and 22 above) Van Rooyen concluded the sale in a dual capacity. As chief executive officer or president of both companies, his intention was clearly to act in their respective interests, without any preference for the one or the other. The transaction was directed at a quid pro quo, Sakima SARL selling the cassiterite at a good, competitive price and Banro purchasing a substantial consignment of a valuable mineral. It was never suggested that either of the parties was being benefited at the expense of the other, nor was there any suggestion of bias or prejudice in favour of the one or the other.

[129] As mentioned earlier on in this judgment (par 23 above), Griesel J was impressed by Van Rooyen as a witness and had no difficulty in accepting his version of the sale of the cassiterite by Sakima SARL to Banro. My own assessment of his evidence is that he tried, to the best of his ability, to give a lucid and truthful account of the events giving rise to the present litigation. There is, in my respectful view, no reason to interfere with the learned judge's perfectly justifiable finding.

[130] Van Rooyen's version of the events preceding the sale of the cassiterite, as evidenced by a number of relevant documents, confirm the content of his letter dated 7 May 1998. Reference may be made in this regard to Banro's so-called "evergreen" contract, dated 8 July 1997, for the sale of cassiterite on an ongoing basis to the Malaysian Smelting Corporation. Van Rooyen insured the cassiterite while it was in transit and from time to time effected advance payments of the purchase price to Sakima SARL. In this regard Van Rooyen testified extensively on the earlier transactions between Sakima SARL and Banro on the one hand, and those between Banro and the Malaysian Smelting Corporation on the other. None of this evidence was seriously challenged in cross-examination and Sogem adduced no evidence to the contrary. As for the sale of 99 tons of cassiterite confirmed in Van Rooyen's letter dated 7 May 1998, Sogem in fact conceded that it was the same cassiterite presently under attachment, as appears from documentation recording the sale.

[131] It follows from these considerations that I must respectfully associate myself with Griesel J's finding (par 117 above) that, on a balance of probabilities, Van Rooyen, in negotiating the sale of the disputed cassiterite, expressed a separate and distinct will on behalf of both Sakima SARL and Banro. As the chief executive officer and/or president of each, he was duly and properly authorised to represent both these companies. Through him they expressed the clear and unequivocal intention to conclude an agreement of purchase and sale in respect of the cassiterite. They achieved consensuson the essential prerequisites for a valid sale, namely the thing and the price.

[132] In view of these considerations, I must respectfully associate myself with Griesel J's finding that Banro lawfully, and irrefutably, acquired ownership in the disputed cassiterite on 7 May 1998.

CONCLUSION AND ISSUES RELATING TO COSTS

[133] Inasmuch as none of the disputed issues has been decided in favour of Sogem, and the concurrent findings of Davis J and Griesel J have, in substance, been upheld, the appeal against both judgments must fail. Mr Badenhorst, on behalf of Banro and Sakima SARL, urged that we consider an order for costs against Sogem on the attorney and client scale. For the same reasons as those relied on by Davis J and Griesel J, I do not believe that a special order as to costs is justified, however tenuous Sogem's case might have become during the course of the proceedings. It cannot, in my view, be said that Sogem acted in bad faith, maliciously or vexatiously in opposing the application and in persisting in the various defences raised by it from time to time.

[134] I have already held (par 84 above) that Sogem must pay the costs of its unsuccessful application to adduce further evidence on appeal, such costs to include those occasioned by the employment of two counsel.

[135] As for the costs relating to the storage of the cassiterite from the date on which it was first attached, Griesel J held that such costs should be costs in the cause. It goes without saying that the storage costs have accumulated considerably since the attachment of the cassiterite. When this matter originally came before us on appeal, the suggestion was made that, to curb expenditure, the cassiterite should be sold at the best price possible and that the proceeds be held in an interest bearing account pending the finalisation of the proceedings. Van Rooyen testified in this regard that Sogem's legal advisers had refused to agree to the sale of the cassiterite under any circumstances. They likewise refused to furnish reasons for their attitude. I agree with Mr Badenhorst that Sogem should be ordered to pay the full costs arising from the storage of the cassiterite.

[136] At the commencement of the hearing before Griesel J, the parties agreed that the costs of the three interlocutory applications referred to in paragraphs 1.2, 1.3 and 1.4 of the order of this court dated 20 June 2000 would be costs in the cause.

[137] Griesel J held that the costs of the first appeal, namely that against the judgment of Davis J, would likewise be costs in the cause. This appears, with respect, to be fair and reasonable, no substantive argument being tendered by Sogem for any other appropriate order.

[138] Mr Badenhorst submitted that Banro and Sakima SARL were substantially successful in all aspects of the hearing before Griesel J. The costs thereof should, therefore, follow the costs of the appeal.

[139] Griesel J allowed the qualifying expenses of Professors Thomashausen and Lukombe Nghenda, as well as those of Mr Djunga, Mr Mitchell and Mr Gerard Caby. This was to include their travelling, accommodation and subsistence expenses. It was not suggested in argument that this order was unfair or unreasonable.

[140] Mr Pincus submitted that, if the appeal should be unsuccessful, the costs of the seventh issue (par 17 above) should be awarded to Sogem. This issue related to whether or not the removal of the cassiterite by Somico from the possession of Sakima SARL, and the subsequent sale thereof to Sogem, was lawful. It will be recalled that Griesel J declined (par 86 above) to determine this issue because it had become academic, in view of his finding that Banro had acquired ownership of the cassiterite. In addition the learned judge held that he was not empowered, in accordance with the principle of judicial restraint, to make a finding on the validity of presidential decree 101 of 29 July 1998, which purported to abrogate ministerial decree 0035, thereby undoing the authorisation for the formation of Sakima SARL. I do not agree with Mr Pincus that Sogem should be awarded the costs relating to this issue. Both parties agreed to submit the issue for determination. Griesel J’s refusal to consider it, on eminently justifiable grounds, cannot be regarded as a finding in favour of Sogem, warranting an award of costs to it.

[141] With reference to the concession by Banro and Sakima SARL that Sogem indeed had locus standiin this matter, thereby making it unnecessary to decide the eighth issue (par 17 above), Mr Pincus submitted that Sogem should be awarded the wasted costs arising from it. He appears to have lost sight of the similar concession made by Sogem in regard to the first issue, namely whether or not Sakima SPRL was properly incorporated and registered in accordance with the laws of the DRC. Far more time was, indeed, spent on this issue than on the issue of Sogem’s locus standi, and it was only after Ms Decamp was confronted with the relevant acte de depotthat this issue was conceded (par 31 above). Concessions of this kind occur frequently in litigation and it would be highly undesirable to make separate cost orders in regard thereto. In any event, inasmuch as these issues were inextricably interwoven in the evidence, I do not believe that it would be appropriate to award wasted costs arising from individual concessions made in respect thereof. This would clearly create nightmares for taxing masters who are burdened with the taxation of such costs.

[142] Mr Pincus submitted further that Sogem should be awarded the costs arising from the sixth issue, namely whether or not Sakima SARL had locus standi. As mentioned previously (par 87 above), this issue has become academic in that Sakima SARL was properly incorporated and registered at the time it acquired ownership in the cassiterite from Sominki and subsequently, on 7 May 1998, transferred such ownership to Banro. Assuming that presidential decree 101 indeed terminated the locus standiof Sakima SARL, it might not have been competent for it to be joined as a party to the present proceedings. In this regard, however, it would appear that it was so joined for the sole purpose of assisting Banro to establish its ownership of the cassiterite. I am in some doubt as to whether Banro really needed it as a crutch for such purpose, since its role in the present proceedings has been minimal. If it had not been a party, the result would, in my view, have been the same. In any event it would be difficult, if not impossible, to separate the costs relating to its participation from that attributable to Banro’s participation. An award of costs under such circumstances would clearly be undesirable and inappropriate.

ORDER

[143] In the event I would make the following order:

1. The appeal against the judgment and findings of Griesel J is dismissed with costs, including the costs of two counsel.

2. The appeal against the judgment and findings of Davis J is dismissed with costs, including the costs of two counsel.

3. The application for leave to adduce further evidence is dismissed with costs, including the costs of two counsel.

4. The appellant is ordered to pay the full costs arising from the storage of the cassiterite.

5. The costs of the present appeal include:

1. the costs of the three interlocutory applications referred to in paragraphs 1.2, 1.3 and 1.4 of the order of this court dated 20 June 2000;

2. the qualifying expenses, with inclusion of travelling, accommodation and subsistence expenses, of Professors A Thomashausen and L Nghenda, and Messrs Djunga, Mitchell and Caby.

D H VAN ZYL

Judge of the High Court of South Africa

I agree.

G JOSMAN

Judge of the High Court of South Africa

I agree.

M WIEHAHN

Acting Judge of the High Court of South Africa

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