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[2014] ZAGPJHC 34
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Zelpy 1866 (Pty) Ltd v Gomes (24014/2013) [2014] ZAGPJHC 34 (17 February 2014)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
CASE
NO: 24014/2013
In
the matter between:
ZELPY
1866 (PTY)
LTD
Applicant
and
ROSA
GOMES
Respondent
J U D G M E N T
(iro
Stay Application)
BHAYAT,
AJ
INTRODUCTION
Main Application
[1] The applicant brought
an application for an order in the following terms:
(a)
Directing
the respondent to install a prepaid electricity meter from City Power
at premises situated at Shop no. [….] (“the
premises”);
(b)
Directing
the respondent to do all such things and sign all such documents as
may be necessary to procure the said installation,
within a period of
ten (10) days from the granting of this order;
Alternatively
(c)
Permitting
and authorising the applicant to install a prepaid electricity meter
on the premises and to take all such steps as may
be necessary to
procure the installation of the said meter;
(d)
Directing
the respondent to furnish to the applicant all invoices issued by the
respondent to its tenants situated at the premises,
in respect of
electricity consumption and invoices received from the Johannesburg
Municipality in respect thereof, for the period
December 2012 to
date.
Stay of the
Proceedings Application (“Stay Application”)
[2] In reply to the Main
Application, the respondent made an application for an order in the
following terms:
(a)
The
application instituted by the respondent be stayed pending the final
determination of the disputes between the parties by way
of
alternative dispute resolution (“ADR”);
(b)
In
the event of any opposition to the relief sought above, the
respondent to pay costs of the application on an attorney and client
scale;
[3] The parties agreed
that the Stay Application be heard first and be disposed of before
the Main Application can be considered.
[4] The applicant (Zelpy)
relies on the fact that there exists a dispute between the parties
which falls within the ambit of the
alternative dispute resolution
clause contained in clause 25 of the written lease agreement
concluded between the parties on 23
January 2013 which reads as
follows:
“
25.
DISPUTE RESOLUTION
25.1
Should any dispute or disagreement arise between the parties relating
to:-
25.1.1 any matter
in respect of which provision is made in terms of this agreement for
such dispute to be determined by an
adjudicator; or
25.1.2
the interpretation of the parties’ rights and obligations in
terms of this agreement and in circumstances where
neither party
alleges that a material breach of this agreement has been committed
by the other party which entitles such party
to cancel this
agreement,
such dispute or
disagreement shall be resolved by an adjudicator in accordance with
this clause 25, it being the intention of the
parties that any
dispute or disagreement shall be resolved as amicably,
quickly
and in the most cost-effective manner possible in the circumstances.
. .”
APPLICANT’S
(ZELPY) CASE
[5] The applicant wishes
to invoke the ADR clause and bears the onus to allege and prove the
jurisdictional facts required in order
to rely on the clause.
[6] The onus is on the
applicant to allege and prove:
(a)
the
existence of the ADR clause;
(b)
the
ADR clause is applicable to the dispute between the parties;
(c)
that
the dispute has been properly raised.
[7] Once the requisite
jurisdictional facts have been established, the onus shifts to the
respondent to satisfy the court that it
should not in the exercise of
its discretion, refer the matter to adjudication.
The existence of an
ADR clause
[8] Clause 25 of the
lease agreement provides for ADR in the event of any dispute or
disagreement arising between the parties.
Applicability of
clause 25 to the dispute
[9] The applicant denies
that a dispute has not been identified which falls within the ambit
of the ADR clause. The dispute is clearly
illustrated and identified
in the correspondence attached to the founding affidavit in the Main
Application and reference is also
made to the disputed issues in
founding affidavit in the Stay Application.
[10] The dispute is
whether the applicant is obliged to install a prepaid meter on the
premises leased by the respondent; whether
the installation
will resolve the underlying allegation by the respondent against the
applicant, that the respondent is being over
charged for electricity
consumption and whether any agreement reached between the parties is
binding, if it is not reduced to writing
and signed by the parties.
[11] There are disputes
between the parties that have been identified which falls within the
ADR clause.
The manner in which
the applicant raised the dispute
[12] The applicant has
two options, namely to apply for a stay of the proceedings or it may,
in a special plea, pray for a stay
of the proceedings pending the
final determination of the dispute by ADR.
[13] The applicant has
followed the correct procedure in launching an application for stay
of the proceedings before delivering
an answering affidavit.
RESPONDENT’S
(GOMES) CASE
[14] The onus is on the
applicant to allege and prove:
(a)
the
existence of the ADR clause;
(b)
that
the ADR clause is applicable to the dispute between the parties;
(c)
that
a disputes exists between the parties; and
(d)
that
such dispute must be demarcated.
[15] In the event of the
applicant discharging the onus, the respondent is required to
demonstrate that due to exceptional circumstances,
the stay should be
refused.
Lack of arbitral
dispute
[16] The applicant has
not positively alleged the existence of a dispute in its affidavit.
It is not clearly demarcated.
[17] The respondent
alleges that the applicant had agreed to install a prepaid
electricity meter at the premises and had subsequently
reneged. The
applicant had already exercised its sole discretion as per clause 7.5
of the lease agreement to install a prepaid
electricity meter. The
dispute therefore does not arise out of the lease agreement but out
of the subsequent undertaking to install
a prepaid electricity meter.
[18] There is no dispute
and therefore the ADR clause is not triggered.
ASSESSMENT
[19] Its common cause
that the onus is on the applicant to allege and prove the
jurisdictional facts on which its application is
based.
[20] The grant of the
stay of proceedings is a matter of discretion. It is not
something that can be decided as a matter of
law.
[21] The agreement that
the respondent relies on regarding the prepaid electricity meter has
not been reduced to writing and signed
by or on behalf of the
parties, which is a requirement of clause 27 of the lease agreement.
Any variation of the terms of the agreement
is not binding unless it
is reduced to a written agreement.
[22] The respondent
contends that there is no arbitration agreement or that there is an
arbitrable issue. The right to arbitrate
arises by reason of clause
25 of the lease agreement. The ADR clause is based upon consensus
between the parties and its provisions
must be interpreted in
accordance with the interpretation applied to contracts.
[23]
Clause 25, inter alia, states that
“
.
. . it being the intention of the parties that
any
dispute
.
. .”
(my
emphasis). The parties had the common intention of referring any
dispute arising out of the agreement to an adjudicator (for
all
intensive purposes, an arbitrator).
[24] The dispute referred
to arises or has its origins in the exercising of the sole discretion
of the respondent (landlord) (clause
7.5) to install a prepaid
electricity meter in respect of the leased premises. Any disagreement
arising therefrom cannot be treated
in isolation or separately in
order to avoid the ambit of clause 25.
[25] By agreement between
the parties and to preserve the sanctity of an agreement, the ADR
clause contains the mechanism by which
disputes or disagreements must
be dealt with and must be adhered to.
[26] The applicant wishes
to invoke the ADR clause and has the option of applying for a stay of
these proceedings which it has done
in the present case. The
applicant has adopted the correct procedure in launching the
application for stay of the proceedings.
Therefore no further comment
regarding the procedure adopted is required.
[27] Its common cause
that the application must clearly spell out the dispute required to
be referred to arbitration. The respondent
contends that the dispute
has not been clearly identified and demarcated. From the reading of
the Main Application it is clear
that the respondent, on its own
version placed before the court, defines and identifies the origin of
the dispute, namely, the
exercising of the sole discretion of the
landlord to install a prepaid electricity meter.
[28] I agree with the
applicant that the correspondence attached to the founding affidavit
clearly illustrates the dispute between
the parties. This is
further illustrated in the founding affidavit in the Stay
Application, in particular, para 23 and 24.
[29] In para 23, the
applicant points out that the respondent herself contends in the Main
Application that there is a dispute between
the parties and suggests
that such dispute is capable of resolution by the installation of the
prepaid electricity meter.
[30] In para 24, the
applicant clearly disputes the contentions raised by the applicants
respondent in the Main Application and
states that such dispute is
evidenced by the correspondence attached thereto.
[31] The discretion of
the court to refuse arbitration must be exercised judicially and only
when a very strong case has been made
out.
CONCLUSION
[32] The applicant has
satisfied the jurisdictional requirements for relying on the ADR
clause in the lease agreement and has discharged
the onus of proof
placed upon it in that the ADR clause exists, that a dispute exists
between the parties which falls within the
ambit of the ADR clause
and that the dispute is identifiable from a reading of both the Main
and Stay Applications, including the
annexures thereto.
[33] The respondent has
failed to discharge the onus in making a strong case for being
absolved from referring the matter to adjudication.
[34] The applicant has
achieved success in this matter and is therefore entitled to a cost
order in its favour. The respondent has
unsuccessfully sought to
resist referring the dispute between the parties to adjudication.
[35] I do not intend to
depart from the general rule in exercising the court’s
discretion regarding the awarding of costs.
The court is satisfied
that the respondent was not actuated in any way by improper motives
in launching the Main Application and
in resisting the Stay
Application.
[36]
In the result, it is ordered that:
(a)
The
Application for Stay of the Proceedings is granted;
(b)
The
application instituted by the respondent under case no. 24014/2013 be
stayed pending the determination of the dispute between
the parties
by an adjudicator as provided for in clause 25 of the lease
agreement;
(c)
The
costs of the Application for Stay of the Proceedings be paid by the
respondent on a party and party scale.
___________________
A Y BHAYAT
ACTING JUDGE OF THE
SOUTH GAUTENG HIGH COURT
COUNSEL FOR THE
APPLICANT
ADV J J BITTER
APPLICANT’S
ATTORNEYS
SCHOONEES, BELLLING & GEORGIEV
COUNSEL FOR THE
RESPONDENT ADV M M
SEGAL
RESPONDENT’S
ATTORNEYS
VELOS & ASSOCIATES
DATE OF
HEARING
11
FEBRUARY 2014
DATE OF
JUDGMENT
17 FEBRUARY 2014