Rockland International Corporation v. Alloys Anthony Duwe and another, Civ. Case 13-A-69, 28/6/69, Platt J.

Rockland International Corporation v. Alloys Anthony Duwe and another, Civ. Case 13-A-69, 28/6/69, Platt J.

The two respondents, Duwe and Juyawatu were joint owners of a mining claim. The first respondent had agreed to transfer to the applicants a quarter interest of the whole claim. This agreement was more favourable to the applicants, because although the applicants were really to under take the mining operations, only the applicants’ company was permitted to terminate the management contract. The scheme envisaged by this agreement appeared to be that the applicants shall carry out mining as far as half the claim was concerned but that in as much as it was understood that the first respondent was a joint holder of the claim with the second respondent, he was still beneficially entitled to a half share n all the proceeds of the claim. Presumably, the second respondent was equally so entitled to a share of all that the applicants and the first respondent mined. The transfer of one half of the first respondent’s share to the applicants was refused by the commissioner for Mines for three reasons. The first two were complied with but he third one, namely the second respondent’s consent to the transfer, was not forthcoming. The applicants asked the court for a temporary injunction with regard to their agreement with the first respondent, seeking to restrain him from infringement thereof by closing down the mines. The injunction was sough to be operative pending the hearing of the suit.

            Held: “On the basis of Duwe’s claim that he and Juyawatu mined the claim in partnership, then on the authority of section 210 of the Law of Contract (relating to Partnership) though Duwe could transfer his share in the partnership, he could not entitle his assignee during the continuation of the partnership to interfere in the management or the administration of the partnership business or affairs nor was he entitled to allow the assignee to look into the accounts of the partnership. The assignee was only entitled to a share of the profits. On this basis then the agreements between Duwe and the applicant appear to infringe Juyawatu’s right as a partner. I am now told that there was in fact no partnership at the time the agreements in the present case were made. However that may be, the result of the agreement between Duwe and Juyawatu settling their differences which brought the injunction to an end and apparently the settlement of suit No. 4 of 1969 itself, had the effect of necessitating the presentation the instant proceedings, if the applicant was going to justify his contracts with Duwe.”

(2) “When a prospector wishes to get a right to prospect, the Commissioner may issue a prospecting right “to any individual in his own right or as agent for another, or as agent for a partnership or company.” (See section 12 (1) of the Mining Ordinance 1964). Then when a holder of a prospecting right pegs a claim, he must apply within 30 days for registration of the claim. (See section 31 of the Ordinance). It that is accepted, he then becomes the registered holder of the claim. By virtue of section 2 of the Ordinance, a “claim” means a portion of land lawfully taken possession of for the purpose of prospecting and mining, and though it includes a disc claim it does not include land comprised in a mining lease. Thus the holder of the registered claim is licenced to go upon the land and entitled to take therefrom minerals which he may find. He has the right to possession of the land but has no other interest in it. As far as I can see from the scheme of the Ordinance, there should only be one registered holder of the claim but he of course, hold it on behalf of another person, partnership or company. I am not clear on what authority prospecting rights and mining claims are registered jointly in the names of more than one person, as seems to be the practice adopted by the Commissioner at present. In the instant case, it is clear that the Commissioner did grant the mining claims over two pieces of land to Duwe and Juyawatu jointly, and I think that arising out of that, much of the difficulty in this case has arisen. Consequently a good deal of argument has been addressed to me on the basis that the respondents are either joint tenants or tenants in common or co-owners of the mining claimed. But it seems to me that they are at best joint holders of a claim gibing them possession of land for the purpose of mining and no more. How they organize their mining operations, whether by way of agency or partnership or in a company, ought to have been disclosed in their application for prospecting rights so that the Commissioner would understand their position. (See Form No. in Schedule One, in the Ordinance). It is provided that the holder of a registered claim may, in the prescribed manner, divide his interest in the claim into such shares as he shall think fit and may allot shares or may transfer the claim or create or transfer any interest therein. And then in paragraph 33(1) (b), the holder shall register such transfer, allocation or interest with the Commissioner within 30 days of such transfer, allocation or division of interest. The section would appear to give the registered claim holder wide powers and where he is the single holder holding on behalf of himself, no doubt, the section can be operated fully. But it is difficult to see how he can transfer more than his beneficial interest where he is merely the joint holder of a claim. It is not difficult to envisage the substantial conflict of interest arising where one joint holder may be forced against his will to accept other persons operating the claim with him if his fellow joint holder can simply transfer the whole of his right to a third person. It is understandable, therefore, that the Commissioner refused to register Duwe’s claim to the transfer of a half his share to the applicant in the terms of these agreements without the concurrence of the respondent Juyawatu. It may be that it is arguable that the Commissioner was acting outside his powers. But if this was a joint holding of a claim, I cannot see that

Duwe could unilaterally cut down Juyawatu’s interest in the claim. Moreover, it may well be that section 65(b) of the Mining Ordinance Amendment Act No. 22 of 1969 did permit the Commissioner to refuse to allow the transfer of Duwe’s claim or half thereof, if it was understood that the applicant was then in effect asking to be granted the full rights of a claim holder at least to a quarter of the whole. If, of course, Juyawatu had accepted that position and the claim was then re-registered, all may have been well. But he did not accept that situation. I do not see that on grounds of principle or convenience Duwe could enforce Juyawatu’s concurrence. If this was a joint claim, then all that Duwe could assign was that interest which he had in it, which would not conflict with Juyawatu’s interest. In my opinion, that does not defeat section 33. as we have seen the terms are wide but they could also cater for the situation in which Duwe found himself. Therefore, under the present system operated by the Commissioner, which may be doubtful, nevertheless, joint holders of the claim can only operate within the limits of their interests. In my opinion, therefore, it seems very doubtful that the applicant could enforce his contractual position with Duwe as against Juyawatu. It follows that he must be left to his remedy in damages, if any, against Duwe and that I should refuse to order an injunction restraining Juyawatu from continuing to mine in accordance with his rights.” (5) Application dismissed with costs.