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[2020] ZAGPJHC 323
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Kotzen NO and Another v Thorn Valley Estate Homeowners Association and Another (20653/2018) [2020] ZAGPJHC 323 (8 September 2020)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 20653/2018
In
the matter between:
DAVID
KOTZEN N.O.
First
Applicant
ROBERTO
CARLOS DE FREITAS DE VASCONCELOS
Second
Applicant
and
THORN
VALLEY ESTATE HOMEOWNERS ASSOCIATION
First
Respondent
JOSEPHSON,
JONATHAN H N.O.
Second
Respondent
JUDGMENT
FOULKES-JONES,
AJ
1.
The application is one in terms of sections
20(1), 32(2) and 33(1)(b) of the Arbitration Act No. 42 of 1965 (“
the
Arbitration Act”
>).
2.
Part A of the application relates to the relief
claimed in terms of
section 20(1)
; Part B relates to the relief
claimed in terms of
section 33(1)(b)
and
Part C
relates to the relief
claimed with reference to
section 32(2)
of the
Arbitration Act; Part
D relates to relief claimed with reference to
section 38
of the
Arbitration Act.
3.
The
matter arises from arbitration proceedings
between the applicants and the first respondent before the second
respondent, the Arbitrator,
who abides the decision of this Court.
4.
The applicants are the trustees of a trust which
owns an immovable property in respect of which there is a dispute as
to whether
same falls within the Thorn Valley Estate and thus whether
the Trust is subject to first respondent’s rules of
association.
The first respondent is an association as defined
in section 1 of the Community Schemes Ombud Services Act No. 9 of
2011 (“
the CSOS Act”
)
which is responsible for administering and managing the Thorn Valley
Estate (“
the first respondent”
).
5.
In the arbitration the first respondent was the
claimant and the applicants were the defendants. The applicants
raised three
special pleas of which two are relevant to the current
application, namely:
5.1
It was common cause that the first respondent
constituted an association as defined in section 1 of the CSOS Act
and that the dispute
constituted a dispute in terms of section 38
read with sections 39(1)(e) and 2(d) of the CSOS Act, and as such the
second respondent
did not have the necessary jurisdiction to
entertain such dispute;
5.2
In terms of section 37(3) of the CSOS Act the
rights contained in the CSOS Act might not be waived or limited;
5.3
In the alternative to the second special plea the
applicants counterclaim for relief as envisaged in terms of section
39(1)(c),
3(c) or (d) and 7(b) of the CSOS Act on the premise that
the rules that the first respondent intended to rely upon (if found
applicable)
were unreasonable,
alternatively
the first respondent’s enforcement thereof against the
defendants are unfair, arbitrary, inconsistent and unreasonable.
5.4
That the arbitration be stayed pending the
outcome of such an envisaged referral in terms of section 38 of the
CSOS Act.
6.
The second respondent dismissed the second and
third special pleas.
7.
The applicants (while reserving their rights to
set aside such dismissals, sought that the second respondent refer
questions arising
from the dismissal of the special pleas to this
Court for an opinion in terms of section 20(1) of the Arbitration
act, which the
Arbitrator similarly dismissed.
8.
The first respondent raises the following points
in limine
:
8.1
The applicants seek in Part A of the application
an order that the second respondent be directed to state certain
questions of law
that arose in the course of the arbitration
proceedings between the applicants and the Association before the
second respondent,
in the form of a special case for the opinion of
the Court;
8.2
The applicants set out questions of law to be
determined by this Court pursuant to paragraphs 1.1 to 1.5 of the
Notice of Motion;
8.3
Part A of the Notice of Motion is identical to
the applicants’ application in terms of section 20(1) of the
Arbitration Act
No. 42 of 1065 attached to the applicants’
application in this matter;
8.4
The section 20(1) application was heard before
the second respondent who handed down his award on 23 April 2018.
The latter
found no legal merit in the application and dismissed
same, with reasons.
8.5
The section 20(1) application was brought after
the second respondent had made two final awards in respect of the two
special pleas
which raised similar legal questions. The result
is that the section 20(1) application was not brought in time, which
was
found to be fatally defective for a section 20(1) application and
the second respondent considered the points raised in the section
20(1) application;
8.6
The second respondent found that there was no
material difference between the points of law raised in the section
20(1) application
and the points of law that were argued in dealing
with the two special pleas. The first respondent further claims
that the
legal questions raised in the section 20(1) application
before the second respondent differed from those raised in the
special
pleas which were found to have no merit;
8.7
The first respondent raises that the present
application had already been finally determined between the same
parties on exactly
the same points and that the arbitration order is
final and not subject to appeal and cannot be raised again in this
forum;
8.8
The
first respondent raises that the application should be dismissed with
costs on a punitive scale as between attorney and client
in that
applicants had been aware of the final award on the same points yet
persist to renege on an arbitration order and to frustrate
the very
foundations of the arbitration award.
9.
The first respondent argues that Part A of the
Notice of Motion is simply an abuse of this Court’s process in
that the questions
of law sought to be determined by this Court have
been determined not only once but twice. It also argues that
Parts B and
C have no legal basis set out in the papers and stand to
be dismissed.
10.
Section 20(1) of the Arbitration Act No. 42 of
1964 (“
the Act”
)
provides that:
“
(1) An
arbitration tribunal may, on the application of any party to a
reference and shall, if the court, on application of such
party, so
directs, or if the parties to the reference agree, at any stage
before the making of a final award state any question
of law arising
in the course of the reference in the form of a special case for the
opinion of the court or for the opinion of
counsel.”
11.
Section 32(2) of the Act states:
“
(2) The court
may, on the application of any party to the reference after due
notice to the other party or parties made within six
weeks after the
publication of the award to the parties, on good cause shown, remit
any matter which was referred to arbitration,
to the arbitration
tribunal for reconsideration and for making of a further award or a
fresh award or for such other purpose as
the court may direct.
and section 33(1)(b) of
the Act provides that:
“
(1) Where –
…
(b) an arbitration
tribunal has committed any gross irregularity in the conduct of the
arbitration proceedings or has exceeded its
powers; or
…
the court may, on
application of any party or parties, make an order setting the award
aside.”
PART
A
12.
The applicants contend that they have demonstrated that the matters
raised in the special pleas differ from those raised in
the section
20(1) arbitration application whilst there may some overlapping.
13.
The applicant also creates a misguided impression that somehow the
process in approaching the Ombud in terms of the Community
Schemes
Ombud Service Act 9 of 2011 (the “CSOS”) is peremptory
and confuses the issue of what the term “unsuccessful”
means in terms of section 40 (c) of the CSOS. I will touch on this
later.
14.
The applicant furthermore challenged the arbitrators award on this
score on the basis that there was no reasoning and that he
did not
exercise a value judgement.
15.
It is common cause that the issues relating to the second and third
special pleas were determined by the second respondent who
made final
awards in those respects.
16.
The reasoning of the dicta of Harms JA must stand in that the timing
of an application is fundamental to its success or failure.
I agree
that the launching of the section 20 application in the arbitration
and in this application is simply an attempt to review
the section 20
award handed down by the second respondent.
17.
I am of the view that the second respondent applied his mind,
considered the issues and relevant case law and arrived at the
correct outcome.
18.
I accordingly dismiss Part A with costs on the attorney and client
scale.
PART
B
19.
The applicant submits that the arbitrator had exceeded his powers and
committed a gross irregularity in two respects namely
jurisdiction
due the CSOS and the arbitrator failed to deal with the submissions
of the applicant.
20.
The applicant places reliance on section 37(3) of the CSOS which
precludes a waiver of rights.
21.
The applicant’s averments are misplaced for two reasons:
21.1 The CSOS, with
reference to section 38(1) clearly states:
“
38.
Applications
(1)
Any person
may
make application if such…….
”
22.
The word may in the CSOS is clearly not peremptory and does not
impose an obligation on parties to approach the CSOS for relief.
23.
The parties clearly consented to the process of arbitration.
24.
Section 40 (c) of the CSOS reads as follows:
24.1 “
40
Further information…..
After
receiving an application, an ombud may require:
(a)……
(b)…..
(c)
the applicant to provide evidence that an internal dispute resolution
mechanism has been unsuccessful
”
25.
The above clearly envisages that parties may have endeavoured to
resolve the matter in another forum before approaching the
ombud.
26.
The nonsensical argument that the word unsuccessful (section 40 {c}
of the CSOS) requires a referral back to a Court for interpretation
holds no grounding.
27.
It would be an absurdity if parties who follow a process such as an
arbitration or even litigation in the Courts would need
to refer the
entire matter afresh for determination to the ombud for being
“unsuccessful”.
28.
This section of the CSOS, I believe would be in the event that some
sort of mediation or attempts at settlement have failed
through an
alternate dispute resolution process. In that event the ombud would
then proceed with the process in terms of the CSOS,
and not when a
matter and issues have already been ventilated and adjudicated upon.
29.
On the basis above Part B is dismissed with costs on the attorney
and client scale.
PART
C
30.
The second respondent applied himself when making the awards and the
I accordingly dismiss Part C with costs on the attorney
and client
scale.
PART
D
31.
In light of the remainder of my Judgement, PART D is moot.
32.
I view the applicant’s application was no more than an attempt
to delay the matter.
33.
In the circumstances I make the following Order:
33.1 The entire
application is dismissed with costs on the attorney and client scale.
K
I FOULKES-JONES
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
LOCAL DIVISION OF THE HIGH COURT, JOHANNESBURG
Electronically
submitted
Date
of hearing: 05 June 2019
Date
of judgment: 08 September 2020
Delivered:
This judgement is handed down electronically by circulation to the
Parties/their legal representatives by email. The
date for hand-down
is deemed to be 08 September 2020.
Appearances:
For
the Applicants: David Kotzen Attorneys
Counsel
for the Applicants: Adv. H P van Nieuwenhuizen
For
the 1
st
Respondent: Heather van Niekerk Attorneys
Counsel
for the 1
st
Respondent: Adv. C Marynowski
For
the 2
nd
Respondent: No appearance