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[2011] ZAGPJHC 50
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Dayan v Dayan (014482/09) [2011] ZAGPJHC 50 (13 May 2011)
SOUTH GAUTENG HIGH COURT, JOHANNESBURG
CASE NO
:
014482/09
APPEAL CASE NO: 674/2010
DATE: 13/05/2011
In
the matter between:
DAYAN,
ARIEL
...................................................................................
Appellant
….........................................................................................
(Respondent
a quo
)
and
DAYAN,
DOV
..................................................................................
Respondent
….............................................................................................
(Applicant
a quo
)
______________________________________________________________
J U D G M E N T
______________________________________________________________
LAMONT, J
:
[1] This is an appeal against an order made by Brassey AJ making an
arbitration award an order of Court.
[2] The submissions are twofold:
The judge erred when he found
that the proper approach to the matter was that consideration need
not be given to section 129(1)
of the National Credit Act No. 34 of
2005 (the Act) as the application before him concerned the making of
an arbitration award
an order of court. The submission was that the
court should have regard to the “
underlying
causa
”.
The arbitrator had made a number
of awards during the course of the arbitration and was
functus
officio
after he made
the first interim award.
[3] On 4 March 2009 the appellant and the respondent referred a
dispute between them concerning the right to payment of R360 900,00
to arbitration. The arbitrator was the Beth Din of Johannesburg. The
appellant and respondent agreed to abide by its decision.
In due
course the arbitrator made a decision. Under and in terms of that
decision the appellant was obliged to pay the respondent
the sum of
R176 400,00 immediately (11 August 2008).
[4] The Arbitration Act 42 of 1965 (the
Arbitration Act) provides
in
Section 31
that an award may on application to a Court of competent
jurisdiction be made an order.
[5] The application before Brassay AJ was for that relief. There was
no counter-application for the setting aside of the award
or for the
interference with the award in any way.
[6] There being no attack on the
award in the form of a properly launched application the question of
the validity or otherwise
of the award in my view does not arise.
Issues considering whether there was a procedural irregularity,
whether the award as a
matter of law is incorrect and the fairness of
the procedure do not arise before me as they did before courts in for
example
Telcordia
Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (2) All SA 243
(SCA) and
Lufuno
Mphaphuli and Associates (Pty) Ltd
v Andrews
2008 (1) All SA 321
(SCA) (and also
2009 (6) BCLR 527
(CC).
[7] I accordingly agree with Brassey AJ that unless there was an
application before him to set aside the arbitration that this
was not
an issue for him to consider.
[8] The appellant contends that the provisions of the National
Credit Act No 34 of 2055 (the Credit Act) are of application in
that
the debt is a mortgage bond debt. It appears from the founding
affidavit that approximately R1 million was raised by way of
obtaining a mortgage bond. From the proceeds some R700 000,00 had
been used by the respondent and some R360 900,00 (“the
capital”
forming the subject-matter referred to arbitration) had been used by
the appellant. The capital was not interest-bearing
and had no
connection to the mortgage bond otherwise than that the bond was the
source by which the capital used by the respondent
to fund the loan
to the appellant had been raised. The loan was not interest bearing.
It is accordingly not a credit agreement
as contemplated by Section 8
of the Credit Act.
[9] In addition the agreement was
entered into by half brothers who had a close relationship and who
concluded a number of transactions
over the period. The transactions
included loans, transfer of immovable property, an employment
contract and a number of payments
of salary. These two persons were
related as contemplated by the Section. When they concluded the loan
agreement in question were
not dealing at arm’s length. The
parties were not independent of each other and were not striving to
gain the utmost advantage
for themselves out of the transaction. See:
Hicklin v Secretary for
Inland Revenue
1980 (1) SA 481
(A) at 495;
Cooper
and Another NNO v Merchant
Trade Finance Limited
2000 (3) SA 1009
(SCA) at 1030. The transaction was accordingly
excluded from being a credit transaction by reason of Section 4 (2)
(b) of the Credit
Act which provides.
“4.
Application of Act.—(1) Subject to sections 5 and 6, this Act
applies to every credit agreement between parties
dealing at arm’s
length and made within, or having an effect within, the Republic, ….
(2) For greater certainty in applying subsection (1)—….
(b) in any of the following arrangements, the parties are not
dealing at arm’s length:…
(iii) a credit agreement between natural persons who are in a
familial relationship and—
(aa) are co-dependent on each other; or
(bb) one is dependent upon the other; and
(iv) any other arrangement—
(aa) in which each party is not independent of the other and
consequently does not necessarily strive to obtain the utmost
possible
advantage out of the transaction; or
(bb) that is of a type that has been held in law to be between
parties who are not dealing at arm’s length;”
[10] As the agreement was not a credit transaction it is unnecessary
to consider whether or not the Court is obliged to consider
the
underlying cause by reason of an obligation arising out of the
provisions of the Credit Act
[11] The second series of
submissions concerned the fact that en route to making the final
decision the arbitrator had made interim
decisions. It appears from
the arbitration that on 17 April 2008 an award was made in favour of
the respondent for R180 000,00.
The appellant had a counterclaim.
From time to time the arbitrator dealt with the counterclaim. In the
course of dealing with
the counterclaim the arbitrator made rulings
concerning the payment pro tem and on an interlocutory basis of a
reduced amount to
the respondent including an interim ruling that
afforded the appellant time to pay. The indulgences and calculations
were dependent
upon the appellant making payment and establishing the
reduced amounts. The appellant failed to do so and the arbitrator
accordingly
made a ruling that it “
…
now issues a final ruling that Ariel is liable to pay to Dov the
amount of R176 400.00 forthwith
”.
It is that final ruling which came before Brassay AJ and which he
was asked to make an order of court. That ruling is
the only final
ruling and constitutes the award of the arbitrator.
[12] In my view the appeal must fail.
[13] I would accordingly dismiss the appeal with costs.
____________________________
LAMONT
J
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
I agree
____________________________
TSOKA J
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
I agree
____________________________
BIZOS AJ
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG