Ascent Mining Services CC v Richards Bay Minerals
| Jurisdiction | South Africa |
| Judge | Vahed J |
| Judgment Date | 02 May 2014 |
| Docket Number | 3412/2011 |
| Court | KwaZulu-Natal High Court, Durban |
Vahed J:
The plaintiff claims that the defendant is indebted to it in the sum of R12 463 144,21 which it asserts was unlawfully deducted by the defendant from moneys due to the plaintiff arising out of the performance by the plaintiff in terms of certain supplemental mining contracts concluded between the parties. That sum was deducted in monthly tranches of R519 297,67 over the period 1 April 2008 to 1 March 2010 in terms of an acknowledgement of debt admittedly signed by the plaintiff but which the plaintiff contends was a nullity because it was not based on a valid cause of action. In the alternative, the plaintiff contends that its members were "…coerced alternatively forced, alternatively unduly influenced…" to sign that acknowledgement of debt. Accordingly, the plaintiff sues for the repayment of that sum together with interest and costs.
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Vahed J
At the heart of the dispute was the question whether the plaintiff or the defendant was to pay for diesel fuel used in the mining operations described in two written agreements, annexures "A" and "B" to the plaintiff's particulars of claim. The trial unfolded over seventeen court days and resulted in a transcript of evidence running to 1105 pages. In addition, certain documents contained another overfull 9 lever arch files of documents were referred to and relied upon by the witness who testified.
The defendant conducts mining operations, inter alia, along certain sand dunes in the vicinity of Richards Bay the object of which is to extract certain valuable minerals from the sand. In processing that sand for the purposes of the mineral extraction the plaintiff was contracted to the defendant to supply certain services, which essentially entailed the provision of earth moving plant and machinery and the skill and the labour to operate such plant and equipment. The defendant supplied the bulk diesel fuel required for the operation of the plant and machinery and the plaintiff was remunerated by the defendant on a Rand-per-Ton basis for the sand processed by it. The dispute centred around whether that Rand-per-Ton rate was a wet rate or a dry rate. It was described as being either wet or dry depending upon whom the contracts, properly interpreted, said had to bear the cost of the diesel fuel consumed by the plaintiff.
Although eventually nothing turned on it, the defendant accepted the duty to begin leading evidence. It led the evidence of the following witnesses:
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Desiree Ursula De Andrade, a forensic investigator operating in the field of mergers and acquisitions. It ultimately turned out that her evidence was irrelevant to the resolution of the dispute.
Brian Thompson ("Thompson"). He joined the defendant as a management accountant in 1987 and when he retired in 2010 he had risen to the position of manager: legal and administrative services.
Heze Emmanuel Mbuyazi ("Mbuyazi"), a member of the plaintiff.
Andrew William Denton ("Denton"). At the time of testifying he was the defendant's general mining manager. He was employed by the defendant in 1983 and occupied a number of positions over time. At the time of the issues in dispute he was the manager of the mining section that oversaw the area of operation where the plaintiff was employed.
Stefanus Esaias du Plessis ("du Plessis"), a service delivery manager responsible for procurement.
Benjamin Thomas Baxter ("Baxter"). He was employed by the defendant during 1986, initially as a geologist, and he progressed to becoming a mine planner. In 2004 he became a plant
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superintendent, and in 2006 became the manager of mine services.
The plaintiff led the evidence of the following witnesses:
Tumelo Gopane ("Gopane"). He was previously employed by the defendant firstly as an assistant engineer in 2003 and, after being promoted and moved around in various positions, last held the position of contracts specialist in supply chain.
Michael Stuart McColl ("McColl"). He was the plaintiff's chartered accountant and auditor.
Mr Aboobaker SC appeared for the plaintiff, sometimes assisted by his attorney, Mr Chetty, while Mr Broster SC (with Ms Ngqanda) appeared for the defendant. Counsel have provided me with extensive and well-researched heads of argument for which I am grateful. I am mindful of the caveat that judges ought not to slavishly adopt counsels' heads of argument but nevertheless consider it appropriate, from time to time, to borrow freely from that furnished to me. Where I do so I shall, in most cases, refrain from acknowledging any specific source, contenting myself that this paragraph constitutes sufficient, and appreciative acknowledgement.
Every witness in the case referred to the involvement of John Swithenbank ("Swithenbank"). He was a founder member of the plaintiff,
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initially holding a one-third interest. He was involved in every aspect of the events dealt with in evidence and from the actions ascribed to him both by the witness and as can be ascertained from the documents referred to, it is fair to say that he played a pivotal role in the plaintiff's operations. He was, to put it plainly and crudely, the brains and driving force behind the plaintiff. From my observations throughout the trial he was present in court for all of the proceedings and, from time to time, the plaintiff's legal representatives deferred to him for instructions. He did not testify.
As I observed earlier, there was a dispute as to whether the plaintiff was contractually obliged to pay for the diesel fuel supplied to it by the defendant and consumed during its operations. At face value the contract documents and other documents in the case sometimes lean in favour of one interpretation and sometimes lean the other way.
In the view I take of the matter no point would be served in a detailed sequential summary of the oral evidence. In the discussion that follows I will make appropriate references to the relevant aspects of the evidence.
It is the defendant's case that there existed a bona fide dispute concerning the liability for diesel fuel consumed by the plaintiff. It contends that that dispute was compromised, that compromise culminating in the acknowledgement of debt referred to earlier.
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The dispute is placed in context in the brief recount of certain of the events that follows:
On 23 November 2007 the defendant wrote to Swithenbank and the plaintiff in the following terms:
'23 November 2007
Mr J Swithenbank
Ascent Mining Services cc
P O Box 101369
MEERENSEE
3901
Dear John
REIMBURSEMENT OF FUEL DRAWN FROM RBM
We refer to our meeting with you on 16 November 2007 in which various anomalies relating to the accounting of fuel issues for the supplementary mining operations were discussed.
According to our calculations an amount of R10 211 207.53 was under recovered as a result of incorrect invoicing by AMS in respect of fuel issued to AMS by RBM. Details of these calculations are attached.
In view of the substantial amount involved we would be agreeable, without prejudice, to accept a refund of this amount in twelve equal monthly payments commencing January 2008. We suggest that payment should be in the form of credit notes generated on the last day of each month.
In order to prevent a reoccurrence of the incorrect accounting for fuel issues, the practice of issuing debit notes must cease forthwith. Credit notes must however continue to be issued for fuel drawn from RBM's ?xed stations for as long as this arrangement endures.
It is our intention to conduct a review commencing 14 January 2008, of the current contract terms in respect of plants 1 and 2 in order to ensure that all components of
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the service provided by AMS are adequately addressed and to incorporate the third supplementary mining plant in a combined contract. The review will be undertaken by an RTP specialist in conjunction with all the relevant role players.
As discussed, we will be scheduling a meeting with you and the other role players to agree the principles for contact price adjustments in line with the recently concluded contract.
Kindly acknowledge your agreement to the above by signing and returning a copy of this letter.'
Attached to that letter was a schedule setting out, by reference to various invoices, how the amount had been arrived at. The plaintiff responded thereto in the following terms:
'FUEL DRAWN FROM RBM
Regarding your letter of 23 November 2007 with respect to the fuel drawn from RBM.
As we do not agree that there has been incorrect accounting for fuel issues we are unable to sign the letter indicating our agreement with the view taken in your letter.
We believe that we have accounted correctly for the fuel issued by RBM on the contract. We believe that the terms of the contract entered into with RBM make it clear that the cost of fuel is not included in the contract and that this is for RBM's account, as accounted for by us. In this regard I would like to draw your attention to two points in the Memorandum of Agreements entered into between ourselves and [RBM].
ANNEXURE "A" speci?es a "DRY RATE".
The "Contract Price Adjustment" in clause 3.2 of the "CONDlTlONS OF CONTRACT"
speciacally excludes any adjustment in the Fuel Index. As this appears to be a standard formula used in your contracts this
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indicates that [RBM], like us, understood the contract to be at a "DRY RATE".
Notwithstanding the above we are prepared to co-operate with RBM to review the terms of the current contract for plants 1 and 2, and the contract for the supplementary plant.
At this stage we would like to point out that the terms of the current contract...
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