why mls should win supreme court appeal!

Obviously the ruling by the Namibian High Court in respect of the case between MLS and Malakia Amakutuwa (Malakia) was disappointing.

The striking thing about the judgment was there was no mention of MLS' defence argument based on "estoppel".

According to South African / Namibian law, a party (the representor) who has by means of a representation willfully or negligently made another (the representee) reasonably to believe in the existence of a state of affairs and thereby induced that person to a change of position or act to his or her detriment, will in litigation between the parties, be precluded from denying the facts were as represented.

Malakia made various representations to MLS which it acted on to its prejudice (i.e. expenditure of significant monies on exploration and associated expenses):

1. In late 2005 Malakia signed his counterpart to a Heads of Agreement as Authorized Person representing Reliance Investment Agencies CC (RIA) which was the benifical owner of the Licences (EPLs 3306 and 3308 ) which would ultimately be transferred to MLS. Unbeknown to MLS, RIA was never set up as a company in Namibia.


2. In 2006, Malakia signed a letter that was sent to the Namibian Mining Commissioner to arrange for the transfer of EPLs 3306 and 3308 as Director/Authorised person for and on behalf of Reliance Investment Agencies CC. RIA is described in the letter as the sole beneficial owner .. entitled to be the registered owner of the Licences and Malakia as the current registered owner of the Licences and holds the beneficial interest in the Licences on trust for RIA (which) has full right, power and authority to sell, assign and alienate the Licences.

3. On 2 February 2007 MLS caused Malakia to execute on behalf of (non-existent) RIA a Deed of Amendment and Release relating to the heads of agreement in the following terms:
RECITAL:
A. Metals, Reliance and Malakia are parties to a Heads of Agreement (sic) dated the 7th day of November 2005 in respect of Licences 3306 and 3308 in Namibia.
B. Licences 3306 and 3308 have been transferred into the name of New Mining Company (Pty) Ltd which is a subsidiary of Metals.
C. It has become apparent to all parties that the Prospecting Licences do not contain the orebodies that the parties mistakenly thought they did and accordingly the parties have agreed to amend the terms of the Heads as herein set out.
And further -
2. The parties hereby agree that the Heads be amended such that no Consideration (as defined in the Heads) is payable by Metals to Reliance.
5. Moore and Malakia jointly and severally warrant that they have the authority to execute this Deed on behalf of Reliance.

Now the High Court judgment against MLS was based on the contention that the agreement is a nullity because RIA was not a registered company and therefore the agreements were impossible of performance from the outset.

Clearly, MLS would not have entered into these agreements with Malakia if he was not consistently misrepresenting the facts. Therefore Malakia should be estopped from trying to resile from these agreements years later!

Unfortunately there was nil consideration given to MLS estoppel argument in the judgment delivered by the Namibian High Court, which quite frankly, was unbelievable. Particularly given MLS counsel (and subsequently Senior Counsel from South Africa) were of the opinion that MLS had very strong prospects for success.

Hopefully, the Supreme Court will give MLS a fair hearing and we get the right result!