Inter-Science Research and Development Services (Pty) Ltd v Republica Popular De Mocambique

• Jurisdiction: South Africa
• Judge: Margo J, Franklin J and Preiss J
• Judgment Date: 18 December 1979
• Hearing Date: 14 November 1979
• Date: 24 March 1982
• Court: Transvaal Provincial Division
• Citation: 1980 (2) SA 111 (T)

Margo J:

This is an application for leave to implead the Government of Mocambique as the defendant in an action for (a) payment of moneys alleged to have become due under certain contracts, (b) damages for A breach of those contracts, and (c) damages for the loss of certain vehicles alleged to have been expropriated without compensation. More specifically, the application is for the attachment of the alleged interest of the Government of Mocambique in certain immovable properties in Johannesburg and in moneys in a bank account there, in order to found B or alternatively to confirm jurisdiction in the proposed action, and for leave to sue in such action by edictal citation.

An application for the same relief was made on 12 June 1979, but, for reasons which appear from the judgment delivered on that date, no order was made, save that the applicant was given leave to renew the application on the papers as supplemented. The present application is a renewal of the C earlier one in terms of such leave. Though set down and heard as an ex parte proceeding, notice of the application was given to a firm of attorneys who claim to be acting for the Mocambique Government. Notice was also given to the diplomatic representative of the Government of Portugal in Cape Town, with the request that such notice be transmitted to the Government of Mocambique.

D Until 1974 Mocambique was a Portuguese colony, governed by a branch of the Government of Portugal (hereinafter referred to as the Colonial Government). On 7 September 1974 a treaty known as the Lusaka Agreement was concluded between the Frente de Libertacae de Mocambique (Frelimo) and the State of Portugal, in terms whereof Mocambique was to become E independent and there was to be a transfer of power to a transitional government. Arising out of the Lusaka Agreement, the Republic Popular de Mocambique (hereinafter referred to as RPM) came into existence.

In 1973 the Colonial Government entered into a contract with a company F named Empresa Tecnica de Levantamentos Aereos, Limitada, described in the papers as Etlal, an acronym formed from the first letters of its name. Etlal was a Mocambique company engaged in aerial and land survey and associated business. The contract was for the carrying out of certain survey and planning work relating to the development of agricultural areas and of water resources in a certain area of Mocambique. A second and G similar contract was concluded with Etlal in 1974. For the first contract Etlal engaged, as sub-contractors, a partnership known as R F Loxton, Hunting and Associates, and for the second contract it engaged as sub-contractors the same partnership and the applicant.

H In terms of the sub-contracts the sub-contractors were to render planning services in South Africa and were to carry out field work in Mocambique, and Etlal was to make all payments due under the sub-contracts to the sub-contractors in Johannesburg.

In implementation of the respective sub-contracts, the sub-contractors incurred large expenditure and carried out much of the work, but the transfer of power in Mocambique in September 1974 intervened to prevent them from completing their contracts and from being paid by Etlal for all the work done by them.

Margo J

Article 14 of the Lusaka Agreement, as translated, provided that:

'The Frente de Libertacao de Mocambique declares that it is prepared to A accept responsibility for the financial obligations assumed by the State of Portugal in the name of Mocambique provided that they were assumed in the effective interest of the territory.'

It may safely be assumed, for the purposes of this case, that the present Government of Mocambique, that is, the RPM Government, succeeded to the obligations accepted by the Frente, though views may differ on what was and what was not 'in the effective interest of the territory'.

B On Thursday, 23 October 1975, the Government of the RPM promulgated what is described in the translation thereof as a 'Decree-Law', it being Decree-Law 29 of 1975. In a preamble, or explanatory introduction, it provided that, since the profession of private surveyor, the activities of C which concerned principally the delimitation of private land ownership, had ceased to represent any objective, given the fact that all land had passed into State ownership, the Government had considered it most convenient that the entire technical structure relating to the branches of topography, photogrammetry and cartography should be 'considered' solely D in departments of State and that there existed no valid reasons to justify activities in topography, photogrammetry and cartography by private individuals. With that preamble, the Decree-Law went on to provide in article 1 that the activity of private surveyor under the title of liberal profession was no longer permitted in Mocambique; nor could any private E concern have as its principal activity the execution of work in the branches of topography, photogrammetry and cartography.

Article 2.1 provided that material and equipment belonging to private surveyors and survey firms, as well as movable property and vehicles registered in their names, should be delivered and come under the F administration of the Ministry of Agriculture or of the Department which the Minister might indicate.

Article 3.1 provided that private surveyors and personnel of the firms mentioned might be integrated in accordance with their competence in departments dependent upon the Ministry of Agriculture.

Article 4 provided that, as from the date of the Decree-Law, contracts G entered into with surveyors and firms mentioned earlier in the Decree-Law should cease to be effective, whether they were for demarcation of lands for private concerns or for execution of work of topography, cartography and photogrammetry for the State.

Article 7 provided that amounts due to private surveyors and to those H firms mentioned should only be 'due' if the relative work should have been delivered to the competent department or to whomsoever might have ordered it to be performed, before the date of the Decree-Law coming into force.

In terms of article 8 any doubts concerning the execution of the Decree-Law were to be settled by a ruling of the Minister of Agriculture.

Article 9 provided that the Decree-Law was to come into force immediately.

Two days later, the Minister of Agriculture issued a Decree to take immediate effect. It provided as follows, in translation:

Margo J

'In view of the provisions of Decree-Law 29 of 1975 of 23 October, and in order to immediately ensure the administration and financial management of the firm Etlal (Empresa Tecnica de Levantamentos Aereos, Limitada), I appoint an administrative commission made up as follows: (Then the names A of the commissioners are set forth.)

This Decree goes into operation immediately.'

The applicant originally sought to justify its claims against the RPM Government on the basis of the Lusaka Agreement, read with the Decree-Law and the Decree of 25 October 1975 but, for the reasons stated in the judgment on the earlier application, nothing in the Agreement or in those B subsequent enactments rendered the RPM Government liable for Etlal's debts.

In the present application the applicant continues to rely on these documents, but now as the historical and legal basis for certain subsequent steps taken by the RPM whereby it absorbed Etlal and assumed C liability for its debts. There is now evidence, in the papers as supplemented, that, following the decree of 25 October 1975, Etlal was 'nationalised and integrated' into the RPM Government, so that the company ceased to exist as such; that since then its affairs have been conducted for the benefit of the Government; that moneys owing to Etlal in respect D of work performed and services rendered have been collected and deposited in Etlal's banking account in Maputo (formerly Lourenco Marques); that Etlal's bank account is at present being operated by the administrative commission; and that it is expected that creditors will be paid from funds available in the account.

There is also evidence that the administrative commission has regarded the E sub-contracts between Etlal and the sub-contractors as terminated, presumably in consequence of article 4 of the Decree-Law. On 5 July 1977 the administrative commission addressed a letter to Johannesburg representatives of the sub-contractors, in which certain details were requested of the amount said to be standing to their credit in Etlal's F books at the time of the integration of Etlal, so that 'the said amount may be duly proved by our books of account'. This letter provides some evidence of the administrative commission's recognition of Etlal's debts to the sub-contractors and of the liability of the commission therefor.

The applicant avers that the RPM Government, which is the legal successor to the Colonial Government, has taken over the rights and obligations of G Etlal. The applicant, which has taken cession of the rights and claims of the other sub-contractor under its sub-contracts with Etlal, alleges that the rights and claims so acquired, and also its own rights and claims under the second sub-contract with Etlal, are now enforceable against the RPM Government as having stepped into the shoes of Etlal. The applicant H has claimed payment on this basis from the administrative commission, but, notwithstanding the apparent recognition of liability for moneys due under the sub-contracts up to the time of integration, no payments have been forthcoming.

In the proposed action the applicant wishes to claim (a) the sums of R91 721,09 and R307 680,97 for services rendered to Etlal by the respective sub-contractors up to the date of Etlal's integration; (b) the sums of R11 289,65 and R57 900,75 as damages alleged to have been suffered by the respective sub-contractors by reason...