Staff Reporter
SPERREGEBIET Diamond Mining (Pty) Ltd is suing Namdeb Diamond Corporation (Pty) Ltd for an alleged breach of contract or misrepresentation, claiming that Namdeb allegedly recovered diamonds from the Elizabeth Bay mine, which it had sold to Sperregebiet Mining.
The matter appeared on the court roll on 29 August 2024, where Sperregebiet Mining sought leave to amend some paragraphs in its particulars of claim. However, this application was dismissed in a judgment by High Court Judge Boas Usiku.
In its initial particulars of claim, Sperregebiet Mining explained that during 2018, it participated in a bidding process for the purchase of Elizabeth Bay Mine and Associated Mining Licences (the “Sale Assets”) as a going concern. The plaintiff (Sperregebiet) submitted a final, binding, and fully financed offer (the “Binding Offer”) for the Sale Assets on or before 20 July 2018, premised on an assumed valuation of the Sale Assets as at 30 September 2018.
The mining company stated that, in terms of clause 13.1.1 of the SPA, Namdeb materially represented to the plaintiff that the Sale Assets had been shut down and placed under a state of Care and Maintenance. Further, all prospecting, mining, and processing operations had ceased in or around October 2018.
“In and around February 2019, the plaintiff received notification of additions to the Virtual Data Room reflecting production information, showing for the first time that Namdeb had continued to process recovery tailings from October 2018 to January 2019. More specifically, Namdeb had continued processing the waste materials left after the recovery of diamonds from diamond-containing ore, known as the X-Ray recovery tailings (“X-Ray Tailings”),” the claim stated.
These X-Ray Tailings were stockpiled within the main processing plant area under high-security surveillance and were considered high-grade material still containing diamonds that could be reprocessed to recover more diamonds. One of the final methods of processing the tailings is through an X-ray separation machine, which identifies and separates the diamonds from other material, producing high-concentrate diamond-containing material.
“Namdeb recovered 13,715 diamond carats from an estimated 2,667 tonnes of material between the months of October 2018 and January 2019, as evidenced by the Production Report,” Sperregebiet claimed. “The estimated revenue obtained by Namdeb is the sum of N$ 32.5 million. In the circumstances, the plaintiff has suffered damages, and Namdeb has been unjustly enriched at the plaintiff’s expense, in the sum of N$ 32,491,397.29.”
Additionally, Sperregebiet claimed an extra N$ 43.1 million in damages, alleging that Namdeb failed to undertake Care and Maintenance operations during the interim period as agreed.
In his judgment on Sperregebiet’s application for leave to amend the particulars of the claim, Justice Boas noted that there was ambiguity as to whether the plaintiff relies on ‘breach’ or ‘misrepresentation’ for its claim. This ambiguity, he said, prejudices the defendants in determining the case they must meet.
Justice Boas further stated that the plaintiff had not pleaded details regarding who represented the defendant, who made the fraudulent representations, when they were made, or whether they were made orally or in writing. He concluded that the plaintiff failed to fully disclose the nature and grounds of its fraud-based claim, rendering the particulars of claim insufficient to sustain a cause of action against the defendants.
In conclusion, the judge upheld the defendants’ grounds of objection and stated that amendments which render a pleading excipiable or do not cure an excipiable pleading will not be allowed. As a result, the application for leave to amend was dismissed.
The matter has been postponed to 18 September for case planning.
