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[2016] ZAGPJHC 273
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KNS Construction (Pty) Ltd v Genesis Partnership (9861/2016) [2016] ZAGPJHC 273 (9 September 2016)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
CASE
NO: 9861/2016
REPORTABLE:
YES
OF
INTEREST TO OTHER JUDGES: YES
DATE:
9 SEPTEMBER 2016
In
the matter between
KNS
CONSTRUCTION (PTY) LTD
APPLICANT
and
THE GENESIS
PARTNERSHIP
RESPONDENT
Arbitration
- pursuant to arbitration agreement - application to make an arbitral
award an order of court in terms of
s 31
of the
Arbitration Act 42 of
1965
- whether or not the award is subject to a pending appeal -
applicant noting appeal - respondent noting a cross-appeal -
respondent’s
right to cross-appeal challenged – held:
such right afforded to the respondent on a proper interpretation of
the arbitration
agreement – arbitration agreement providing for
the High Court Rules of the Republic of South Africa to govern the
arbitration
– held: arbitration agreement capable of one
meaning only which is that the parties intended the rules of court to
apply
to the appeal procedure – applicant having withdrawn its
appeal the cross-appeal thus remains pending - application dismissed
with costs.
J
U D G M E N T
VAN
OOSTEN J:
Introduction
[1]
This
is an application to make an arbitral award an order of court in
terms of s 31 of the Arbitration Act 42 of 1965 (the Act).
Procedural
history
[2]
The crisp issue for determination is whether or not the award is
subject to a pending appeal. It is accordingly necessary to
refer to
the procedural steps that were taken in regard to the noting of
appeal by both parties after publication of the arbitral
award on 27
January 2016.
[3]
The arbitration was conducted in terms of an arbitration agreement
(the agreement) concluded between the parties. It expressly
provides
‘either party may appeal the award of the arbitrator to an
appeal tribunal consisting of three arbitrators’
and further
that ‘any party wishing to appeal must give notice of such
within 20 days after the publication of the award’.
[4]
On 16 February 2016 the applicant noted an appeal. On 17 February
2016 the respondent noted a cross-appeal. On 18 March 2016
the
applicant abandoned its appeal and launched the present application.
The cross-appeal however, remains valid (
Erasmus
Superior
Courts Practice 2
nd
Ed (Service 2, 2016) A2-35) and in
regard thereto, the issue arises whether or not it is pending.
The
opposing contentions of the parties
[5]
The applicant contends that the cross-appeal is invalid and
ineffectual on the ground that the respondents’ right of appeal
in terms of the agreement has lapsed the day before it was noted. In
this regard reliance is placed on the civilian method of computation
(
Nell v Mulbarton Gardens (Pty) Ltd
1976 (1) SA 294
(W)) of
the period of twenty days which would have expired on 16 February
2016.
[6] The respondent on the
other hand relies on clause 5 of the arbitration agreement, which
provides:
‘
The rules
governing the arbitration shall be High Court Rules of the Republic
of South Africa, except as amended herein, or as subsequently
amended
by way of agreement between the parties
In similar vein, I should
add, clause 11.1 of the arbitration agreement provides that the
Arbitration Act ‘shall
apply to the arbitration except as
varied herein, or as otherwise agreed between the parties, or by the
rules of the High Court
of South Africa’. The respondent
accordingly submits that the computation of the twenty day period as
laid down in the Rules
of Court applies. The rules define ‘court
day’ as ‘any day other than a Saturday, Sunday or public
holiday’
and further provide that ‘only court days shall
be included in the computation of any time expressed in days
prescribed by
these rules or fixed by any order of court’. The
notice of cross-appeal, employing this method of computation, was
served
within the twenty day period. As a corollary to this, the
respondent argues that, premised on the appeal procedure being
governed
by the rules of court, the respondent was entitled, as of
right
(rule 49(3))
to cross-appeal within 10 days of the applicant’s
notice of appeal. And lastly that the respondent remains entitled to
seek
an extension of time or condonation in terms of
rule 27
, should
it be found that the filing of the cross-appeal was out of time.
Discussion
Does the
arbitration agreement provide for a cross-appeal?
[7] The appropriate point
of departure is to consider the question whether the respondent was
of right entitled to note a cross-appeal.
[8] By way of background
and in regard to civil appeals from the high court,
rule 49
provides
for the procedure in regard to appeals and cross-appeals. The rule
therefore does not create a right to appeal or cross-appeal.
Appeals
are provided for in chapter 5 (ss 15 – 20) of the Superior
Courts Act 10 of 2013 (the SCA Act). The SCA Act however,
relating to
appeals, does not distinguish between appeals and cross-appeals (see
Gentiruco AG v Firestone SA (Pty) Ltd
1972 (1) SA 589
(A)
607G-608A, in regard to the distinction between appeal and
cross-appeal, based on the now repealed s 21 of Act 59 of 1959).
A
right to cross-appeal, accordingly, exists by inference and is based
on the construction of similar statutory provisions relating
to
appeals by the courts in the past (
Gentiruco
607E).
[9] Next it is necessary
to interpret the agreement in order to establish whether a right to
cross-appeal is afforded to the other
party, once one of the parties
has appealed the award.
[10]
The principles applicable to interpretation of documents were
summarised as follows in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) para 18:
‘
Interpretation
is the process of attributing meaning to the words used in a
document, be it legislation, some other statutory instrument,
or
contract, having regard to the context provided by reading the
particular provision or provisions in the light of the document
as a
whole and the circumstances attendant upon its coming into existence.
Whatever the nature of the document, consideration must
be given to
the language used in the light of the ordinary rules of grammar and
syntax; the context in which the provision appears;
the apparent
purpose to which it is directed and the material known to those
responsible for its production. Where more than one
meaning is
possible each possibility must be weighed in the light of all these
factors. The process is objective, not subjective.
A sensible meaning
is to be preferred to one that leads to insensible or unbusinesslike
results or undermines the apparent purpose
of the document. Judges
must be alert to, and guard against, the temptation to substitute
what they regard as reasonable, sensible
or businesslike for the
words actually used. To do so in regard to a statute or statutory
instrument is to cross the divide between
interpretation and
legislation; in a contractual context it is to make a contract for
the parties other than the one they in fact
made. The 'inevitable
point of departure is the language of the provision itself', read in
context and having regard to the purpose
of the provision and the
background to the preparation and production of the document.’
In
Bothma
Batho Transport v S Bothma & Seun Transport
(802/2012)
[2013] ZASCA 176
(28 November 2013), Wallis JA added thereto as
follows:
‘
Whilst the
starting point remains the words of the document, which are the only
relevant medium through which the parties have expressed
their
contractual intentions, the process of interpretation does not stop
at a perceived literal meaning of those words, but considers
them in
the light of all relevant and admissible context, including the
circumstances in which the document came into being. The
former
distinction between permissible background and surrounding
circumstances, never very clear, has fallen away. Interpretation
is
no longer a process that occurs in stages but is ‘essentially
one unitary exercise’.
[11] Applying these
principles in interpreting the agreement, it is necessary to consider
the wording of clause 10.5, which confers
the right of appeal on
‘either party’. ‘Either’ in this context
bears the meaning of ‘each of the
two’ (Oxford Dictionary
10
th
Ed) which leads to the conclusion that the right of
appeal is conferred on both parties. The right is phrased in wide
terms and
there are no indications in the wording of the clause which
would justify a restriction of the right of appeal to only the
aggrieved
party. The parties, having invoked the rules of court to
govern the arbitration and expressly conferring a mutual right of
appeal,
must moreover be assumed to have been aware of the rules of
court providing for the procedures to be followed in regard to
appeals
and
cross-appeals. Had it been their intention to
exclude a cross-appeal, words to that effect would have been used of
which there are
none. On a proper interpretation of the arbitration
agreement as a whole, it is my finding that the right of appeal
conferred on
both parties, includes a right to cross-appeal.
[12] Should I be wrong in
my interpretation of the arbitration agreement, the cross-appeal, in
my view, can and should be held to
constitute an appeal. Both parties
may conceivably appeal at the same time, the one fortuitously before
the other (
Gentiruco
supra). The cross-appeal may either arise
from or be incidental to the appeal. Substance over form dictates
that the cross-appeal
is simply an appeal merely tacked on to the
appeal and the mere denotation of the document as a cross-appeal, in
the context of
the agreement, is of no moment (
Goodrich v Botha
and Others
1954 (2) SA 540
(A) 544).
Do the rules of
court apply to the appeal?
[13] The decisive
consideration in determining the issue whether or not the
cross-appeal is pending, is whether the parties intended
in the
arbitration agreement that the rules of court should apply to the
appeal procedure. It must be remembered that the
Arbitration Act
specifically
ousts appeals. Parties may of course agree on the right
of appeal, as is the case here, but they cannot confer appeal
jurisdiction
on the court (
Goldschmidt and Another v Folb and
Another
1974 (1) SA 576
(T);
Daljosaphat Restorations (Pty)
Ltd v Kasteelhof CC
2006 (6) SA 91
(C)). It is for this reason
that provision is made in the arbitration agreement for the
constitution of an appeal tribunal consisting
of three members.
[14]
Read in the context of the arbitration agreement as a whole, the
reference to ‘arbitration’ in clauses 5.1 and
11.1 quoted
above, must be taken to include the procedure relating to the appeal
provided for in clause 10.5. An appeal procedure
(except for the
nomination of members of the appeal tribunal) is not provided for in
the arbitration agreement. Nor does the Act
contain any such
provisions. The arbitration agreement is accordingly capable of one
meaning only which is that the parties intended
the rules of court to
apply to the appeal procedure.
Is
the cross-appeal pending?
[15]
As correctly pointed out by counsel for the respondent, the notice of
cross-appeal, served on 17 February 2016, computing the
twenty day
period as provided for in the rules of court, occurred within the
twenty day period. Had it been out of time the respondent
would have
been entitled to invoke the rules of court in regard to condonation
or extension of time. In any event, in the absence
of a rule 30A
application by the applicant for the setting aside of the
cross-appeal as an irregular step, it remains valid and
effective.
[16]
It follows that the cross-appeal is pending and that the application
cannot succeed.
Order
[17]
In the result I make the following order:
1.
The
application is dismissed.
2.
The
applicant is to pay the costs of the application such costs to
include the costs consequent upon the employment of senior counsel.
_________________________
FHD
VAN OOSTEN
JUDGE
OF THE HIGH COURT
COUNSEL
FOR APPLICANT
ADV MvR POTGIETER SC
APPLICANT’S
ATTORNEYS
SENEKAL SIMMONDS INC
COUNSEL
FOR RESPONDENT
ADV AO COOK SC
DEFENDANT’S
ATTORNEYS
NORTON ROSE SA
DATE
OF HEARING
1 SEPTEMBER 2016
DATE
OF JUDGMENT
9
SEPTEMBER 2016