Lusangen Zambia Ltd v The Minister of Mines and Minerals and Anors (Appeal 146 of 2017) [2019] ZMSC 368 (7 June 2019)

JI Selected Judgment No. 17 of 2019 P. 528 IN THE SUPREME COURT OF ZAMBIA APPEAL NO. 146/2016 HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN: ^PUBLICqF^ fj W LUS AGEN ZAMBIA LIMITED "<<^67, LUSM^ APPELLANT AND THE MINISTER OF MINES AND MINERALS DEVELOPMENT 1st RESPONDENT THE ATTORNEY GENERAL 2nd RESPONDENT Coram Mambilima CJ, Malila and Mutuna JJS. On 4th June 2019 and 7th June 2019 For the Appellant Mr. M. Ndalameta, Messrs Musa Dudhia and Company For the Respondents N/A JUDGMENT MUTUNA, JS. delivered the judgment of the court. Cases referred to: 1) Royal British Bank v Turquand 1843 to 1860 ALL ER reprint 435 2} Mahony v East Holyford Mining Company Limited (1875) LR 7HL 3) Rudnap (Zambia) Limited v Spyron Enterprises Limited (1976) ZR 4) Fresh Mint Limited, Hemant Jallan, Thomson Lloyd and Ewart Limited v Kawambwa Tea Company Limited (2008)2 ZR 32 5) Indo Zambia Bank Limited v Mushaukwa Muhango (2009) ZR 266 J2 P.529 6) Construction and Investment Holdings Ltd v William Jacks and Co. (Zambia) Ltd (1972) ZR 92 7) Attorney General v Millian Juma (1984) ZR 1 8) Matilda Mutale v Emmanuel Munaiie SCZ judgment No. 14 of 2007 9) Central Estates (Belgravia) Ltd v Woolgan (1971) 3 ALL ER 651 10)Zambia Bata Shoe Company Limited v Vin-Mas Limited (1993/1994)ZR 136 ll)National Airports Corporation Limited v Reggie Ephraim Zimba and Savior Konie (2000) ZR 154 Works referred to: 1) Gower's Principles of Modern Company Law, 6th edition by Paul L. David 1997, London 2) Oxford Advanced Learners Dictionary, 8th edition, Oxford University Press 3) M. Malila, Commercial Law in Zambia: Cases and Material, UNZA Press, Lusaka, Zambia. 4) Chitty On Contracts, volume 2, Specific Contracts, by H. G. Beale, General Editor, Thomson Reuters (Legal) Limited, London, trading as Sweet and Maxwell Legislation referred to: 1) Mines and Minerals Development Act, No. 7 of 2008 2) Mines and Minerals Development Act, No. 11 of 2015 3) Companies Act, Cap 388 4) Companies Act, Number 10 of 2017 Introduction 1) The appeal in this matter challenges a decision of the Learned High Court Judge which upheld the decision by the Minister, reversing the transfer of a mining licence J3 P.530 from Zamphos Minerals Limited (Zamphos) to the Appellant. 2) The Learned High Court Judge found that the Minister was on firm ground when lie reversed the transfer of the mining licence because the purported transfer of the licence to the Appellant by Zamphos was not legally and validly effected. Background 3) The facts of this case are that on 15th January, 1998 ' General Christen Sifapi Tembo (RTD) (General Tembo) was issued with a mining licence to prospect for phosphate in the Chilembwe area of Petauke District. The mining licence was for a period of two years from 15th January 1998 and it was numbered PLL5105. 4) On 20th September, 2001, General Tembo obtained another Small Scale Mining Licence number SML 100 for the same area which had a ten year life span. He transferred this licence to Zamphos, a company in which J4 P.531 he was a shareholder and director. Pursuant to this transfer... the First Respondent issued mining licence number PPI08. By letter dated 4th December 2008, General Tembo applied to the First Respondent to transfer this same licence from Zamphos to the Appellant. 5) After considering the application, the First Respondent's entity known as the Mining Condastre Unit, confirmed that the application fulfilled the requirements of the law and later, the Mining Advisory Committee meeting recommended to the First Respondent that the application for the transfer should be approved. The transfer was duly approved and the licence transferred from Zamphos to the Appellant. • 6) On 30th November 2010, a firm of Chartered Accountants, acting for and on behalf of Zamphos, appealed to the First Respondent challenging the transfer on the ground that Zamphos, through its board of directors or shareholders, did not authorize the transfer J5 P.532 of the licence and requested the Minister to reverse the transfer. The First Respondent upheld the appeal and reversed the transfer. He later informed Zamphos and the Appellant of his decision by way of letters dated 31s’ May, 2011 and 14th June, 2011, respectively. 7) The Appellant was disgruntled by the decision and appealed to the Minister urging him to reverse his decision. The First Respondent declined to do so by letter dated 21st August 2012 prompting the Appellant to appeal to the High Court. The Appellant's claim in the Court below and arguments by the parties 8) The Appellant launched its claim in the Court below by way of a notice of appeal which was crafted as being an 4 I appeal against the decision of the Minister pursuant to Section 153(1) of the Mines and Minerals Development Act. I Jb P.533 9) The grounds of appeal tabled before the Learned High Court Judge were as follows: 9.1 The First. Respondent erred in law and in fact when he ■ failed to take into account the fact that the Appellant had validly and legally acquired small scale mining licence number 7824-HQ-SML; 9.2 The First Respondent erred in law and in fact when he failed to take into consideration Section 216(5) of the Companies Act, Cap 388 of the Laws of Zambia that a director of a company is empowered to manage all the : . business of the company and that a person dealing with the company in good faith shall not be affected by the failure of a director to obtain approval for the transfer or disposition from the shareholders of the company; and 9.3 The First Respondent erred in law and in fact when > ■ he failed to take notice of the timeness (sic| that the reinstatement of licence 7824-HQ-SML was done in breach of Section 150 of the Mines and Minerals Development Act and was against the rules of natural justice. J7 P.534 10) In support of appeal, the Appellant filed heads of argument. The Respondent also filed heads of argument opposing the appeal. 11) The Appellant began by justifying the appeal with reference to Section 153(1) of the Mines and Minerals Development Act. This Section grants the right of appeal to the High Court to any person who is aggrieved by the decision of the Minister. Here, the Appellant stressed the fact that arising from such an appeal the High Court has power to give directions to the Minister as it deems fit, which directions the Minister is obliged to follow. 12) Arguing ground 1 of the appeal, the Appellant contended that the First Respondent erred in law and fact when he failed to take into account the fact that the Appellant had 1 . validly and legally acquired Mining Licence number 7824-HQ-SML. The basis for the contention was that the transfer of the licence arose from a commercial agreement made between Zamphos, represented by General Tembo, a shareholder and director of the J8 P.535 transferor and Diego Casilli, the shareholder and director of the Appellant, transferee. 13) Further, the transfer had the support of the law because Section 61 of the Mines and Minerals Development Act allows a person to transfer his interests in a mining licence and sets out how the transfer can be done. The section states as follows: "(1) a small scale mining licence or interest therein shall not be transferred, assigned, or encumbered or dealt with in any other manner without the approval of the Director. (2) a holder of a small scale licence who intends to transfer, assign, encumber or deal in any manner with the licence shall apply to the Director giving such proposed transferee, assignee or other party concerned as would be required in an application for a small scale licence. The Appellant argued that in accordance with the provisions of Section 61, General Tembo acting on behalf of Zamphos, did apply to the director of Mines to transfer the mining licence to the Appellant. Following the said J9 P.536 application, the Mines Development Department endorsed the transfer of the licence. These acts, it was contended, were done within the provisions of the enabling Act and had the First Respondent taken note of this fact he would have found that the Appellant is the rightful owner of the licence. 14) Under ground 2 of the appeal the contention by the Appellant was that the First Respondent erred when he failed to recognize the fact that a director of a company is empowered to act on behalf of the company. The First Respondent should, therefore, not have re-instated the licence to Zamphos on the ground that it was not sanctioned by the shareholders of Zamphos. 15) According to the Appellant, General Tembo was not only the principal shareholder but also director of Zamphos, and as such, was empowered under Section 215 of the Companies Act (Chapter 388 of the Laws of Zambia, which Act was in force at the time until it was repealed P.537 by the Companies Act Number 10 of 2017) to act for and on behalf of Zamphos. The section states in part as follows: "215(1) subject to this Act, the business of a company shall be managed by the directors, who may pay all expenses incurred in promoting and forming the company, and may exercise all such powers of the company as are not, by this Act or the articles, required to be exercised by the company by resolution. • to r ' (2) to (6) shall apply to a company unless the articles provide otherwise. .‘ r .sv directors may exercise the powers of the company to (3) without limiting the generality of subsection (1), the borrow money, to charge any property or business of the company or all or any of its uncalled capital and to issue debentures or give any other security for a debt, liability • . - • or obligation of the company or any other person ..." 16) The Appellant argued further that in any event, assuming that General Tembo acted with want of authority, the Appellant is protected by Section 216(5) of the Companies Act which states as follows: JU P.538 "The validity of any transfer or disposition of property to a person dealing with the company in good faith, shall not be affected by a failure to comply with this section." Our attention was also drawn to the English case of Royal British Bank v Turguard1 whose holding is to the effect that any person dealing with a company is entitled to assume that the internal company rules are complied with even if they are not. The said principle, it ■ • . was argued, was affirmed inThecase of Mahony v East . ■ w-- Holyford Mining Company Limited2. 17) Turning, to ground 3 of the appeal, the gist of the ‘ ' Appellant's argument was that it was not given an opportunity to be heard by the Minister prior to his making the decision to reverse the transfer of the mining . licence. The Appellant argued that in terms of Section 150 of the Mines and Minerals Development Act the Mining Advisory Committee was obliged to consult the Appellant prior to reversing the transfer of the licence. J12 P.539 Having failed to do so, there was a breach of the rules of natural justice. 18) The relevant portions of Section 150 of the Mines and Minerals Development Act which the Appellant referred to are subsections 3 and 4 and they states as follows: "(3) The Minister, the Director or the Director of Geological Survey shall, prior to exercising any power conferred upon them under this Act: (a) to refuse to grant or renew a licence or permit; ■ ■ (ty to terminate, suspend or cancel a licence or permit; c) to amend the terms or conditions of any licence or permit; (d) to determine any appeal that lies to the Minister; or (e) to grant a mining right or non-mining right; as the case may be, refer the matter to the Mining Advisory Committee for its advice. (4) The Mining Advisory Committee shall in considering a matter submitted to it under subsection (3) consult J13 P.540 any person, party or other stakeholder in the area to which the mining right or non mining right relates who . may be affected by the grant, termination, suspension, cancellation or renewal of the mining or non-mining right." 19) In conclusion, the Appellant contended that the provisions of Section 150 require an affected person be given an opportunity to be heard prior to termination of a licence. The Appellant was not given such opportunity and the result is that the reinstatement of the mining licence back to Zamphos was in breach of the rules of natural justice. 20) In response, the Respondents argued grounds 1 and 2 together. Their position was that the Minister’s decision to reinstate the Mining Licence to Zamphos was based on the finding by the Mining Advisory Committee that the transfer of the licence to the Appellant was not sanctioned by a resolution of the shareholders of Zamphos as required by the Section 246 Companies Act. The section states as follows: J14 P.541 "(1) The Director of a company shall not, without the approval in accordance with this section of an ordinary .hr' resolution of the company- la) Sell, lease or otherwise/dispose of the whole or substantially the whole of the undertaking of the assets of the conipany:- (2) The Approval of the transaction referred to in paragraph (a) of subsection (1) shall be an approval of the specific transaction proposed by the Directors." 21) The Respondents argued further that the Appellant could not seek solace in Section 216(5)of the Companies Act < . and rhe principle in the eases of Royal British Bank v Turquand1 and Mohoney v East Holyford Mining Company Limited2 because it did not demonstrate to the court that it acted in good faith. The facts as presented show that the licence was in. the name of Zamphos while it was being transferred by General Tembo. There was an obligation placed upon the Appellant to conduct a due diligence check to ensure that General Tembo had authority to transact on behalf of Zamphos. In support of JIS P.542 the foregoing, the Respondents relied on the case of B. Ligget (Liverpool) Ltd v Barclays Bank3 which they argued is an exception to the rule in the Turquand case. 22) Under ground 3 of the appeal, the Respondents' argument was that the Appellant had an opportunity to make representation through the Minister following the reinstatement of the licence to Zamphos. It made this representation through the appeal pursuant to Section 152 of the Mines and Minerals Development Act. Determination of the appeal and decision by the Learned High Court Judge 23) The Learned High Court Judge heard counsel for the parties following which she considered their arguments and identified three issues as falling for determination as follows: did the Appellant validly and legally acquire Small Scale Licence number 7824-HQ-SML; does Section 216 of the Companies Act Cap 388 of the Laws of Zambia apply to the facts of this case; and, was the . , H6 i L - P.543 ■ ' - ’ reinsteUement of the Licence number 7824-HQ-SML . l ; ..made in breach of Section 150 of the Mines and Minerals Development Act and consequently, in . violation of the rules of natural justice. : . . ; \ . ' ; . ■ ■ 24) In considering the first ground of appeal, the Learned .. . High Court Judge addressed the first issue. She. recounted the background leading up to the transfer of . , the licence by General Tembo, emphasizing the fact, that • ■ . f ■ he acted in his personal and individual capacity, . - notwithstanding that the licence was in the name of ■ Zamphos. She‘concluded that the provisions of the Mines and Minerals Development Act Ire clear to the effect . that the person named as a licence holder is the only one ■ . - ■ ■ ■ ■ who can transfer it to another person. ho ?’ 25fc;\ ;Imaddition,The warned High Court Judge found that the • . features of the letter written by General Tembo show that he was writing in his individual capacity and not on behalf of Zamphos, the registered licence holder. To this extent she found.further that General Tembo was giving J17 P.544 ; effect to a personal decision he made as he was not . acting in the capacity of director, on behalf of Zamphos. : Therefore, there was no evidence on record to support the contention by the Appellant that he acted in such capacity and she accordingly found no merit in ground 1 of the appeal. 26) Turning her attention to ground 2 of the appeal, the . Learned High Court Judge considered it in light of issue 2. That is to say, should the First Respondent have ; considered that, since General Tembo was a director of Zamphos, he was empowered to manage all the business affairs of the company. As a result, a person such as the Appellant, who dealt with Zamphos in good faith, should : not be affected by General Tembo's failure to obtain approval from other shareholders of Zamphos for the transfer of the licence. 27) The Learned . High Court Judge took the view that the issues raised were tied to her findings under ground 1 of the appeal and that their resolution depends on the • : J19 P.546 ; / - Kdtudmbwa Tea Company (1966) Limited4in answer to ■ : . .. the question whether a company can be bound to-a. contract entered into without authority of the company. . : ' The holdings in this case are, inter alia, as follows: . ... : s. A in ■ ■ . \ yf. j : II ■ * • • 1) only contracts entered into on behalf of a company by authorized agents will bind a company. Such agents are formally authorized through resolution of a company ... 2) It was not for the Respondent company to prove that it had, in fact, not given such power. It was for the . appellants to have been on guard to prove that thd 2nd ; ' ■ in fact acted, within the authority given to him ... 3) Since the 2nd appellant acted without authority from the respondent company, the loan agreement entered . mto purportedly on behalf of the respondent company . v/.-. ... . was therefore ultra vires and was not binding on the • respondent company ..." . . ; j ■ ; ■ -y . . ■ Arising from the foregoing decision, and in view of the ' . ■ fact that there was no evidence to show that the Appellant transacted with General Tembo in his capacity as director and for the benefit of the company, the J20 P.547 ' ; Learned High Court Judge found that the Appellant did — .... ■ ■ not transact with him in good faith in terms: of Section-. 216(5) of the Companies Act. She also found that the . transfer of the licence was: not effected oh behalf of Zamphos but by an individual director acting in his personal capacity; by means of personal headed paper; and, without knowledge of the other directors and . shareholders? There was thus, no breach of Section 150 . of the Mines and Mineral Development Act when the Minister reinstated the licence. ... 29).... In addition, the Learned High Court Judge found tile Appellant's argument that the transfer of the licence was pursuant to a valid commercial agreement made between the Appellant,- 'represented by its shareholder and director,’ -Diego Chilli; and Zamphos, also represented, by ..... its shareholder and director, General Tembo,. negated by her finding that the latter acted in his personal capacity. As a consequence, the Appellant ought to have been put on notice or inquiiy as to the ostensible authority of J21 P.548 ' ’ ' General Tembo - Its failure to do so vitiated any claim on its. part,. as envisaged under Section 216(T) of the Companies Act The Judge found no merit in ground 2 as well. 30) Lastly, in .her consideration of ground 3 of the appeal, the Learned High Court Judge found that the ground of appeal could not succeed because of her findings in relation to grounds 1 and 2 of the appeal. She took the . view that the First Respondent in deciding to reverse the transfer relied heavily on the transfer request made by General Tembo and not Zamphos, the licence holder. He could not be faulted for so doing. 31) All three grounds of appeal having been found to be ■. unmeritorious, the Learned High Court Judge; dismissed :? the appeal. : Grounds of appeal to this court and arguments by the Appellant J22 P.549 32) The Appellant is aggrieved by the decision of the Learned ■ < - . . . ■ . . High Court Judge and brings this appeal on five grounds as follows: 32.1 The Learned Judge erred in law and in fact by finding that General Christon Sifali Tembo (RTD) ("Gen. C. Tembo"} applied for the transfer of licence No. 7824 HQ SML (formerly SML 100) in his personal capacity and not in his capacity as director on behalf of Zamphos Mineral Resources Limited; 32.2 The Learned Judge erred in law and in fact when she - l ; > failed to take into consideration Section 216(5) of the Companies Act Chapter 388 of the Laws of Zambia, that sg with ? uwy bt with a company in good faith shall not . be affected by the failure of a director to obtain approval for the transfer or disposition from the shareholders of the company; 32.3 The Learned Judge erred in law and in fact by finding that the Appellant ought to have been put on notice or ; inquis^ as the ostensible authority of Gen. C. Tembo in dealing with him in the transfer of the licence No.7824-HQ-SML (formerly SML 100} without evidence of f ; 1 < - : . a resolution authorizing the said transaction and that the failure to be put on such notice vitiated the claim by the Appellant that it was acting in good faith in the transaction that transferred the said licence; i ( J23 P.55O * 32.4 The Learned- Judge erred in law and in fact in finding . : that the transfer of licence No. 7824-HQ-SML (formerly SML 100} was not pursuant to a valid commercial .. agreement made between the Appellant, represented by .. its shareholder and director Diego Casilli; and Zamphos, also represented by its shareholder and director Gen. C. Tembo; 32.5 The Learned. Judge erred in law and in fact by finding that the reinstatement of the licence No. 7824-HQ-SML . .. (formerly SML . 100) by the 1st Respondent did not breach Section 150 of the Mines and Minerals Development Act No. 7 of 2008. , 33) ■ In support of the grounds of appeal the Appellant filed h : . heads of argument upon which it relied at the hearing of the appeal. It complimented these arguments with viva voce arguments. The Respondents did not file heads of ■: * argument and'were not represented at the hearing of the . appeal because they filed a notice of non attendance. 34) Arguing ground 1 of the appeal, counsel for the Appellant _ : Mr. M. Ndalameta. began by setting out the background to the transfer of the licence and confirmed that the transfer of the licence was initiated by a letter written on J24 P.551 General Teiiibo’s letter head. He then drew our attention -to our decision in the case of Indo Zambia. Bank Limited v Musaukwa Muhango5 and the High Court decision in the case of Construction and Investment Holdings Limited v William Jacks and Company (Zambia) Ltd6. In the former case we restated the ' principle that when interpreting documents the starting point is to. look at the plain and ordinary meaning of the words used. That the Court should assume that the parties have expressed themselves through the natural ■; meaning of the words used. On the other hand, Justice Scott, J., in the latter case stated that when interpreting a statute the meaning of any words or phrase used should be ascertained from the statue as a whole. : 35) ei; Applying the principles set out in the preceding paragraph, counsel argued that the letter requesting the transfer of the licence authored by General Tembo must . be interpreted using the natural and ordinary meaning of . the words. In addition, it must be read as a whole and J25 . P.552 ■ < - : not in part bee that would distort its meaning. To < < j demonstrate this, counsel contended that the use of the words "we" and "us” in the body of the letter referred to Zamphos and not General Tembo. 36) In a not too convincing manner, counsel for the Appellant . • advanced the argument further in his viva voce ... ■ arguments by contending that Zamphos had. acted in a . similar manner as General Tembo did in its appeal to the . Minister by causing its letter of appeal to be authored by . its accountants. ;We understood counsel to be saying that ' ■ ' ; ' ‘if Zamphos's letter of appeal to the Minister-was bn its accountant's letter headed paper, there was nothing . wrong in Zamphos's letter of transfer of the licence to be ' ■ fr’ oh General Tembo's personal letter headed paper. / - under ground Mr. -Ndalameta ■ contended that the application for the transfer of the licence was in compliance with Section 61 of the Mines and Minerals Development Act. There was, therefore, . no justifiable reason for the Learned High Court Judge to J26 P.553 • ' hold that the -transfer was a nullity. Section 61 of the !j Mines and Minerals Development Act states as follows: "(1) A small - scale mining licence or any interest therein shall not be transferred, assigned, encumbered or dealt with in any other manner without the approval of the director. (2) A holder of a small-scale mining licence who intends to transfer, assign, encumber or deal in ■dis; any manner with the licence shall apply to the Director giving such particulars concerning the proposed transferee, asignee, or other party ; i j « concerned as would be required in an application for a small-scale mining licence. ! - (3) The Director shall, where an application meets the requirements of this Act and the transferee is not disqualified under any provision of this Act holding a small scale mining licence, grant approval to the transfer, assignment, encumbered or other dealing with the small-scale mining licence or interest ,.t- 7,** therein:for the unexpired period of the small-scale mining licence. (4) For the purposes of this section, "interest" in a small-scale mining licence means, in the case of a holder who is a private company, a controlling interest in such holder. J27 P.554 (5) Any transaction purporting to transfer a small- scale mining licence in contravention of this section shall be void and of no effect.1' Counsel for- the Appellant, was saying that the transfer of . • the licence :from Zamphos to the Appellant complied in full with the provisions of this section. 38) Mr. Ndalameta argued grounds 2 and 3 together. In his opening remarks he repeated the arguments presented under ground 1 of the appeal in respect of interpretation of statute. The only departure from the arguments was c • tec the^refereiic©'^ decisions in the cases of Attorney- General u Million Juma7 and Matilda Mutale v Emmanuel Munaile8. In both cases we explained the principles of statutory interpretation that the starting ■ point is to apply the literal interpretation to a statutory provision except where the words are ambiguous. 39) Counsel .then argued that the literal interpretation to be given to Section 216(5) of the Companies Act is that for one to qualify for protection he or she must show that he J28 P.555 acted in the interests of Zamphos. He, in this regard* • . . questioned the finding by the Learned High Court Judge that the Appellant did not act in good faith because it failed to ascertain whether or not General Tembo was \ . J -y’.. i ■ V acting in the interests of Zamphos. He advanced his argument by stating what constitutes good faith by reference to the case of Central Estates (Belgravia) Ltd v Woolgar9, the learned author Paul L. Davis in Gower's Principle of Modern Company Law and Oxford Advanced Learner's Dictionary, 8th edition. The case states' that a claim is made in good faith where it is made honestly and with no ulterior motive; Gower states that a person acts . in good faith if he acts genuinely and honestly in the circumstances of the case; and, the ■J r-J; Oxford Dictionary defines good faith as the intention to be honest or helpful; a gesture of good faith. 40) . After he defined the phrase "good faith”, counsel argued that the facts of this case show that the Appellant acted in good faith and,was not required to take a step further J29 P.556 r and: enquire : into the authority which General Tembo had . . in transacting, with it. Further, the facts having established good faith on the part of the Appellant, it was protected in. line with the principle enshrined in the case of Royal British Bank v Turquand1, which principle was adopted, by us in the cases of Zambia Bata Shoe Company Limited v Vin-Mas Limited10 and National Airports Corporation v Reggie Ephraim Zimba and Savior Konie11. 41 ) ■ 'Arguing in the . alternative, counsel for the Appellant -■ b r i ' contended 'that'. Section 23 of the Companies Act provides additional protection to third parties dealing. . with companies. The section states as follows: co,..c?.■'propertyipwby, a company, shall be invalid by reason. ' "No act of a company, including any transfer of only, that, the Act or transfer is contrary to its article or this Act." - . Once again counsel urged us to apply the literal rule of interpretation in considering the effect of Section 23 which is to protect third parties against internal J30 P.557 management irregularities. To this end he concluded that on the basis of Sections 23 and 216(5) of the Companies Act the Appellant cannot be affected by the alleged want of approval of the transfer of the licence by the shareholders of Zamphos. 42) In respect of ground 4 and 5 of the appeal, counsel for the Appellant restated the arguments advanced in the Court below. For that reason we shall not repeat them. The only departure was under ground 4 where he defined A ■ : agent and the effect of the acts of an agent on the principal with reference to the works by one of our number, Honourable Justice M. Malila, writing in Commercial Law in Zambia: Cases and Material. i-.ms sir Consideration by this court and decision by this Court ' • " 43) Following our consideration of the record of appeal and ■ arguments by counsel for the Appellant we have concluded that three issues arise from all five grounds of J31 P.558 appeal. These are: is the principle of ostensible authority as explained in the Royal British Bank v Turquand1 case relevant to this case in view of the backdrop to the Appellant's claim; did the Learned High Court Judge err when she found that the Appellant did not validly acquire the mining licence, as such, the Minister was on firm ground when he reverted the transfer; and, did the Learned High Court Judge err at law when she found that the Appellant's right to be heard was not breached when the Minister considered the appeal by Zamphos. 44) We must begin by stating chat we are alive to the fact that the Mines and Mineral Development Act No. 7 of 2008 has been repealed and replaced by the Mines and Minerals Development Act No. 11 of 2015. In dealing , ■ with this appeal; however, we will- determine. it on the basis of the repealed act because that was the applicable one at the time. 45) The first issue raises the question of application of the rule in the Turquand case to the peculiar facts of this J32 P.559 case. The rule in that case is set out in the holding in that case as follows: "persons dealing with the company were bound to make themselves acquainted with the statute and the deed of settlement of the company, but they were not bound to do more; a person, on reading the deed of settlement, would find, not a prohibition against borrowing, but a permission to borrow on certain conditions, and, learning that the authority might be made complete by a resolution, he would have a right to infer the fact of a . resolution authorizing that which on the face of the document appeared to be legitimately done; and, therefore, the company was liable whether or not a resolution had been passed." % • . The Respondent, in the Turquand case sought to avoid * « x . .. • payment of a debt he contracted on behalf of a company he was representing on the grounds that the loan agreement between the Royal British Bank and the company he was representing was not authorized by way of a resolution by the shareholders. The House of Lords refused to accept the argument and held that the bank J33 P.560 was entitled to assume that a resolution authorizing the loan was passed and the company was, thus liable. 46) The important portion of the holding is the one which makes a company acting through an agent wanting in authority, liable to a third party dealing with it. Chitty on Contracts refers to this principle as the "indoor management rule" and explains it as follows at page 39: "... where the person acting for the company could have been authorized, and either was specifically held out as authorized or acted within the usual authority of J company agents of that type the third party might be entitled to assume that procedures for authorization had been complied." 47) This Court in the case of Zambia Bata Shoe Company v Vin-Mas Limited10 upheld the principle in the Turquand case when it held that "... where an innocent third party has acquired rights in land, the company cannot avoid an order for specific performance by pleading constructive notice of the lack of a special resolution allowing the sale of land at more than a certain minimum price". In this J34 P.561 case, the position we took is that a purchaser of land from the Appellant was not obliged to investigate if the representative of the Appellant had authority to sell the property to it. The fact that the representative was an authorized agent of the Appellant was enough for the Respondent to assume that it could legitimately transact with the agent. 48) We took the same position in the case of National ... . A .» - Airport Corporation Limited, v Zimba and another11 when we held that "an outsider dealing with a company cannot be concerned with any alleged want of authority when dealing with a representative of appropriate authority or standing for the class or type of transaction". " -.m. 49) We have gone to great length to explain the principle in the Turquand case because we are of the firm view that it is not applicable to the circumstances of this case. 50) The principle as explained in the cases we have referred to, in particular the Turquand case, will be applicable where: J35 P.562 1) There is holding out by the company of a person as being its authorized agent or such person acting within the usual authority of company agents of that type. 2) There is a contract and the third party seeks to enforce the contract against the company. The principle is thus intended to protect third parties dealing with companies and make such companies liable to the third parties. 51) In all the three cases we have referred to the common thread is that the third parties were arguing that the companies with which they transacted should be compelled to honour the agreements they entered into with them, directly or through the agents, acting with want of authority. In the present case, the Appellant seeks not, for an order to enforce the commercial agreement alleged to have been entered into by itself and Zamphos because General Tembo had authority to act on behalf of Zamphos; as such it was to assume that General Tembo had authority to transact; and, therefore, J36 P.563 Zamphos should be compelled to re-assign the licence, but rather compel the Minister to cancel the reversal of the transfer of the licence. The Minister, against whom the rule in Turquand is sought to be invoked, like the Appellant, is a third party or stranger to the "indoor management'1 of Zamphos and neither is he a party to the commercial agreement it is contended was concluded between Zamphos and the Appellant. As a result, the rule cannot be enforced against him. 52) Further although the Appellant contends that General Tembo acted as director or agent of Zamphos, there was no evidence produced to that effect because it solely relied on the personal letter by General Tembo to the Minister which, as the Court below correctly held, was a personal letter written in the General's personal capacity. This situation is compounded by the fact that the Appellant failed to prove the contention that the transaction was a commercial transaction between J37 P.564 Zamphos and the Appellant because no contract to that effect was produced. 53) Coming to the second issue which addresses the reversal of the transfer of the licence by the Minister. The undisputed facts of this case are that General Tembo purported to transfer the licence from Zamphos to the Appellant by way of a personal letter, written on his personal letter head which is in the record of appeal. The Learned High Court Judge, as a consequence of this letter, found as a fact that General Tembo was not acting in his capacity as shareholder or director of the company and, as such, the transfer was not valid as the Minister quite rightly found. We could not agree more with the Learned High Court Judge because the letter in issue speaks for itself as being a personal letter and not an official letter from Zamphos or its director or shareholder. 54) The finding by the Learned High Court Judge cannot thus be challenged as being perverse or made from a misapprehension of facts. The fact, in and of itself, that J38 P.565 there is a reference to the words "we" and "us" in the letter does not imply that it was by, or authored, for and on behalf of Zamphos. We, as a result, reject the arguments by counsel for the Appellant to that effect. We are also not swayed by the argument by Mr. Ndalameta which sought to liken General Tembo's letter to the letter of appeal by Zamphos. The latter letter begins by introducing the authors as acting for and on behalf of Zamphos which General Tembo's letter does not do. 55) We also reject the argument by counsel for the Appellant that in his capacity as director of Zamphos, General Tembo was authorized to act for and on behalf of the company pursuant to section 215 of the Companies Act. That section must be read with the other sections of the ■ Act, in particular section 216, which restrict the acts a director can perform on behalf of the company. Of importance is sub-section (l)(a) which does not permit a director to "... sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking or of J39 P.566 the assets of the company ..." without a resolution of the company. The act of assigning the mining licence by General Tembo without a company resolution, for consideration, to the Appellant falls squarely within the ambit of the prohibited acts pursuant to section 216(1) (a) of the Companies Act 56) Further, section 61 of the Mines and Minerals Act which we have set out in the earlier part of this judgment is very clear as to who can transfer a mining licence. Subsection 2 of the section provides for "a holder of small scale" licence as being eligible to transfer it. General Tembo was by no means a holder of the licence and, as such, he could not assign it. The Minister could not be faulted for reversing the transfer licence. - 57j Last of all, we come to the third issue. The issue stems from the contention by the Appellant that the Minister should have heard the Appellant prior to reversal of the mining licence in accordance with Section 150 of the Mines and Minerals Development Act. That since the J40 P.567 Appellant was not heard, there was a breach of the rules of natural justice on the part of the Minister. 58) We have set out the provisions of Section 150 of the Mines and Minerals Development Act in the earlier parts of this judgment. They do indeed require the Minister or entities acting on his behalf to hear a person who will be affected by, among other things, the termination of a mining licence. He should, therefore, have heard the Appellant. However, we are of the firm view that the omission by the Minister was negated by the subsequent opportunity he availed the Appellant to table its case by way of appeal. Conclusion 59) The consequence of our determination in the preceding paragraphs is that all five grounds of appeal must fail and we so order. We accordingly dismiss the appeal with costs in the Court below. We make no order as to costs in *1 J41 P.568 this Court because the Respondents did not take any steps in defending the appeal. The costs are to be taxed in default of agreement. I. C. MAMBILIMA CHIEF JUSTICE M. MALILA SUPREME COURT JUDGE N. K. SUPREME COURT JUDGE J41 P.568 this Court because the Respondents did not take any steps in defending the appeal. The costs are to .be taxed in default of agreement. I. C. MAMBILIMA CHIEF JUSTICE M. MALILA SUPREME COURT JUDGE IT COUP: ■ N. K. TUNA SUPREME COURT JUDGE J41 P.568 this Court because the Respondents did not take any steps in defending the appeal. The costs are to be taxed in default of agreement. I. C. MAMBILIMA CHIEF JUSTICE M. MALILA SUPREME COURT JUDGE N. K. MUTUNA SUPREME COURT JUDGE