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2022
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[2022] ZALMPPHC 66
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Roads Agency Limpopo SOC Ltd v Matla Consultants CC and Another (5103/2018) [2022] ZALMPPHC 66 (29 November 2022)
IN
THE HIGH COURT OF SOUTH AFRICA,
LIMPOPO
DIVISION, POLOKWANE.
CASE
NO: 5103/2018
REPORTABLE:
YES/NO
OF
INTEREST TO THE JUDGES: YES/NO
REVISED.
In
the mater between:
ROADS
AGENCY LIMPOPO SOC LTD
Applicant
(Plaintiff
in the main action)
and
MATLA
CONSULTANTS CC
First
Respondent
(First
Defendant in the main action)
AXTON
MATRIX CONSTRUCTION CC
Second
Respondent
(Second
Defendant in the main action)
JUDGMENT
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email. The date and time
for
handing down shall be deemed to be the 29 November 2022.
LITHOLE
AJ:
Introduction
1.
The applicant, Roads Agency Limpopo Soc Ltd (RAL) seeks an order
setting aside the dispute resolution proceedings (
inter alia
in terms of
section 3(2)
of the
Arbitration Act, 42 of 1965
),
including the arbitration agreement contained in Clause 10 of the
General Conditions of Contract for Construction Works (2010)
("the
GCC"), referred to in paragraph 19.2 of Plaintiff's amended
particulars of claim in the Main Action in case number
5103/2018 in
this Court.
2.
Alternatively, RAL seeks an order that the dispute resolution
proceedings/arbitration agreement shall cease to have effect with
reference to any dispute between RAL and the second respondent,
Axton
Matrix Construction Cc (Axton), which has already been referred or
which may be referred, by any of the parties in future
of dispute
resolution in terms of this specific construction contract in issue.
3.
Axton opposes the relief sought by RAL. In essence Axton opposes
the
application on the ground of non-joinder of the interested parties
with direct and substantial interest in the relief sought
and the
separation of power doctrine. Axton further opposes this application
on non-compliance with the test as set out in the
judgement of
Delange v Methodist Church and another
2016 (2) SA 1
(CC)
.
4.
The RAL contend that it is only the specific contract between
the
parties which is the subject matter of this application, and not all
similar contracts between the parties or in the industry,
that
renders Axton’s arguments about non-joinder invalid.
5.
It is trite law
that for a third party to be joined in the proceedings, he should
have a direct and substantial interest in the
subject matter which
may be prejudicially affected by the judgment of the Court. In
considering these two tests, Navsa JA, on behalf
of the Court in
Transvaal
Agricultural Union v Minister of Agriculture and Land Affairs
,
[1]
adopted the following test:
“
In Van Winsen,
Cilliers and Loots Herbstein & Van Winsen’s the Civil
Practice of the Supreme Court of South Africa 4
th
ed at 172 the learned authors supply a useful
summary of the approach of the Court in the Amalgamated Engineering
case in determining,
by way of two tests, whether a third party has a
direct and substantial interest in the outcome of litigation.
Concerning the two
tests, the learned authors state as follows:
‘
The first was
to consider whether the third party would have locus standi to claim
relief concerning the same subject-matter. the
second was to examine
whether a situation could arise in which, because the third party had
not been joined, any order the Court
might make would not be res
judicata against him, entitling him to approach the Courts again
concerning the same subject-matter
and possibly obtain an order
irreconcilable with the order made in the first instance’.”
6.
This point
in limine
is dismissed.
7.
The first respondent, Matla Consultants Cc (Matla) is not
participating
in this application. Matla did not file any opposition
in this application.
Factual
background
8.
On 22 August 2018, the Roads Agency Limpopo SOC Ltd (“RAL”)
issued summons in this Court in case number: 5103/2018 against Matla
Consultants CC (“Matla”) as the first defendant,
and
against Axton Matrix Construction CC (“Axton”) as the
second defendant, claiming an amount of R64 907 543.01
from
the defendants jointly and severally, pursuant to damages suffered by
the applicant as a result of the defective construction
of the D3537
road in the Limpopo Province (the “main action”).
9.
RAL is an organ of state, which is responsible for the planning,
construction, maintenance and control of usage of all provincial
roads in the Limpopo Province, and Matla and Axton were respectively
the design and supervising engineer and the construction contractor,
who had been appointed by RAL during 2013/2014 to upgrade
the D3537
road from gravel to tar.
10.
In the first special plea, Axton alleged that RAL’s claim
against it arose
from the General Conditions of Contract (“GCC”)
between the parties, and are time-barred, because of RAL’s
failure
to comply with clause 10.3 of the dispute resolution
provisions contained in the GCC, which prescribes that a dispute
notice should
be delivered within 28 days of the event giving rise to
the dispute that has arisen, failing which the parties have no right
to
dispute the matter.
11.
The second special plea relates thereto that RAL’s attorney,
who had acted
on behalf of RAL, had allegedly previously given an
undertaking that RAL will not institute action against Axton, and
which undertaking
according to Axton constitute a defence of waiver
and/or constitutes a
pactum de non petendo
.
12.
Subsequent to the summons, 18 months after the summons was issued,
Axton on
10 January 2020, and despite the main action, commenced with
a separate adjudication procedure in terms of the dispute resolution
provisions of the GCC, wherein Axton claimed the alleged outstanding
retention money in respect of the construction contract of
R5 257 959.31 from RAL, despite RAL’s objections to
the adjudication procedure, for the reason
inter alia
that it
was commenced with way too late having regard to the stipulations of
the GCC, and despite RAL’s numerous requests
that the claim for
retention money should rather be adjudicated in the same forum as in
the main action, by way of a counterclaim.
13.
The adjudication procedure was persisted with by Axton, and the
adjudicator
Mr Westcott in respect of the issue of the retention
money delivered two decisions, the first on 27 February 2020 and
thereafter
the second on 7 August 2020.
14.
Due to RAL’s refusal to abide by the decision of the
adjudicator, Axton
then on 18 November 2020, referred the dispute
between the parties in respect of the retention money to arbitration
in terms of
clause 10.6.2 of the GCC. RAL launched this application
after the dispute was referred to the arbitration. This application
was
thus launched on 9 December 2020.
RAL
(the applicants)
15.
This application is brought in terms of section 3(2) of the
Arbitration Act,
No. 42 of 1995 (“the Act”), which gives
a court a discretion to set aside, on good cause shown, an arbitrator
agreement,
or to order that the arbitration agreement shall cease to
have effect with reference to any dispute referred.
16.
RAL submitted that good cause exist which is sufficient for the court
to exercise
its discretion under sections 3(2)(a) to 3(2)(c) of the
Act .RAL relies on the submitted grounds which are dealt with below
to
be the reasons for seeking the relief they sought in this court.
17.
First, the dispute resolution provisions and arbitration agreement on
which
Axton rely do not cover all the parties which have a direct
interest in this matter, which is a damages claim against two
separate
defendants resulting from the defective road designed by
Matla, as engineer, and build by Axton as the contractor, who are
now,
blaming each other for the deficiencies in the road, the main
deficiency being the incorrect vertical alignment of the road.
18.
RAL contend that to give full effect to the dispute resolution
provisions and
arbitration agreement will lead to a multiplicity of
proceedings, as RAL will have to litigate against Matla in this
Court, and
against Axton before an arbitrator in an arbitration. The
logical next step flowing from the adjudication procedure is now an
arbitration
procedure if regard is had to the stipulations of the
GCC.
19.
RAL submitted that It would be inconvenient and expensive for RAL to
prepare
and present its case on two occasions, namely in the
arbitration process against Axton, and in separate court proceedings
against
Matla.
20.
Second ,that, there are several matters in dispute in the main action
and only
some will fall within the ambit of the dispute resolution
proceedings/arbitration agreement, and specific issues such as
determination
of public and legal policy, and constitutional norms
raised by RAL in its independent delictual claim, cannot be
conveniently and
properly dealt with separately and independently in
an arbitration process but should be dealt with by the court where
both Axton
and Matla are before the court in one hearing.
21.
Thirdly ,that ,It is possible that inconsistent findings might be
arrived at
by two tribunals if there are two tribunals involved, and
this would irreparably harm and prejudice RAL (one such finding was
already
made in the separate adjudication proceedings which reference
will be made below, in the adjudication procedure which has been
instituted by Axton against RAL subsequent to the issuing of summons
in the main action for payment of the retention money. (For
instance,
in the adjudication proceedings, the adjudicator found the time bar
clause in the GCC not to be applicable when it was
raised by RAL in
these proceedings, but Axton is now in this main action in its first
special plea relying exclusively on this
exact same time bar clauses,
and where the plaintiff now, in turn, disputes the validity and
applicability of the same time bar
clause).
22.
RAL submitted that a crucial reason why the dispute between the
parties cannot
be resolved by dispute resolution or in arbitration
procedure is the nature of the delictual claim for pure economic loss
which
was instituted by RAL, and as pleaded in paragraphs 26 to 34 of
the amended particulars of claim in the main action. This claim
will
entail the determination of public and legal policy, possibly the
application of constitutional norms, and possibly also the
development of the common law, and is thus not a matter which can
conveniently be decided by an adjudicator or arbitrator and has
the
potential of having to be entertained not only in the court but also
by the Supreme Court of Appeal and/or the Constitutional
Court.
23.
They submits that ,there is Compelling considerations of fairness and
convenience
exist in retaining the full matter in this court, and
which make it not suitable for hearing in any other forum than this
court.
Axton
(the respondent)
24.
Axton denies that the relief sought by RAL is competent, and it has
instead
launched a counter-application, wherein it seeks in essence a
declaratory orders that RAL should now pay the retention money
allegedly
owing to Axton, to declare the adjudicator’s
decisions binding on RAL, and to declare that Axton is not liable to
RAL for
the relief sought in the main action.
25.
RAL submits that Axton’s counter-application is ill-fated
attempt to take
a shortcut to circumvent the litigation in the main
action which has been instituted already in August 2018. RAL further
submitted
that Axton is making unfounded and vexatious allegations of
fraud, concealment and improper conduct at the side of RAL, as an
organ
of state, deliberately attempts to create an atmosphere in the
hope to gain the sympathy of the court.
26.
RAL had appointed Axton in 2014 as construction contractor to
construct and
had earlier appointed Matla as the responsible
engineer, for the design and supervision in respect of the contract,
to do the upgrading
from gravel to tar of a certain portion of the
D3537 road in the Limpopo Province.
27.
Axton submitted that practical completion was achieved during
December 2016,
subject to the remedying of 17 defects in a snag list
which was provided by Matla, triggered the defects liability period
in terms
of the contract of 12 months, which period lapsed during
December 2017, entitling Axton to payment of the full retention money
of R5 257 959.31 at that stage.
28.
RAL submitted that despite what is submitted by the Axton in respect
of the
practical completion of the works which was achieved during
December 2016, Matla, the engineer, in its plea which was filed on 14
November 2019 alleged the following :
28.1 Axton
had abandoned the site, and the project, before its completion and
has performed no construction services
between 30 June 2016 and 4
August 2016 (the “first abandonment”) (paragraph 3.3.4 of
Matla
28.2 ’s
plea);
28.3 On 9
November, Matla and RAL certified that the project had reached
practical completion subject to Axton remedying
17 defects in
relation to the works identified in a snag list which accompanied the
certificate of practical completion (paragraph
3.3.5 of Malta’s
plea in the main action);
28.4
According to Matla’s plea, (and that is confirmed by Mr Mabale
of RAL who was the project manager) between
late November 2016 and
about 2 December 2016. Axton finally abandoned the project and the
site, and ceased and/or refused to perform
any work or services
without remedying the identified defects, causing Matla not to issue
a final certificate of approval (“the
second abandonment”)
(paragraph 3.3.6 of Matla’s plea).
29.
In essence, Axton blamed Matla, who had allegedly been responsible
for incorrectly
designing the road, and Matla in turn blamed
respondent, who had constructed the road.
30.
Axton raised point in limine of non-Joinder which is dealt with
supra
.
Analysis
31.
RAL seeks an order setting aside the dispute
resolution proceedings ,including the arbitration agreement contained
in the GCC of
the specific construction which had been concluded
between RAL and Axton. The application is made in reliance with
section 3
(2) of the
Arbitration Act 45 of 1965
.
Section 3
provide
that:
“
3.
Binding effect of arbitration agreement and power of court in
relation thereto:
(1)
Unless the agreement otherwise provides, an arbitration agreement
shall not be capable of being terminated except by consent of all
the
parties thereto.
(2)
The court may at any time on the application of any party to an
arbitration agreement, on good cause shown-
(a)
set aside the arbitration agreement; or
(b)
order that any particular dispute referred to in the arbitration
agreement shall not be referred
to arbitration; or
(c)
order that the arbitration agreement shall cease to have effect with
reference to any dispute
referred.”
32.
Section 3(2)(c)
provides that a Court may set aside an arbitration
agreement “
on good cause shown”.
33.
In this context
the Court’s discretion must be judicially exercised and clearly
there must be “
good
cause”
before
a Court will release a party to an arbitration agreement and refer
this to Court. The authorities show that this discretion
is seldom
exercised.
[2]
34.
Such a discretion has however been exercised where:
34.1
Defendant’s
counterclaim affected third parties not subjected to the arbitration
agreement
[3]
;
34.2
Allegations of
fraud were made
[4]
;
34.3
There were a
number of legal problems relevant and where the technical matters are
easily to be resolved by a Court
[5]
.
35.
The other side of
the coin is that, a Court will not set aside an arbitration agreement
in the absence of good cause
[6]
.
36.
The issue of demonstrating good cause is not easily discharged and
there must
be compelling reasons for doing so.
37.
Where relevant
parties are parties to the arbitration agreement (being those with an
interest in the proceedings) this militates
against good cause, or
put differently, where some parties relevant are not parties to the
arbitration agreement and there is a
risk of a multiplicity of
proceedings with conflicting decisions and costs, this may
demonstrate good cause
[7]
.
“
[49] The
requirements of “
good
cause”
was
discussed in
Metallurgical
and Commercial Consultants (Pty) Ltd v Metal Sales Co. (Pty) Ltd
[8]
,
Colman
J said the following:
“
Such an
onus
is not easily discharged. There are certain
advantages, such as finality, which a claimant in an arbitration
enjoys over one who
has to pursue his rights in the Courts; and one
who has contracted to allow his opponent those advantages will not
readily be absolved
from his undertaking ... the discretion of the
Court to refuse arbitration under a submission was to be exercised
judicially, and
only when a "very strong case" for its
exercise had been made out.”
38.
The Courts have
said further that “
it
is not possible to define, and certainly it is undesirable for any
court to attempt to define with any degree of precision, what
circumstances would constitute a ‘very strong case’”
[9]
.
39.
RAL relies on the case of
Foize Africa Pty Ltd and Foize Beheer
BV and others
[2012] ZASCA 123
, where the court dealt with
the factors for consideration in excising the discretion. The court
said the following:
“
(a)
Flowing from the sanctity of contracts, it has often been said that a
decision not to enforce either an arbitration
or foreign jurisdiction
clause should only be made where there is a very strong case made out
for the parties not to be bound by
their agreement.
11
(b)
It is desirable if at all possible to avoid a multiplicity of actions
in different courts with the associated
potential complication of
conflicting decisions.
12
In
the present case this may well be a weighty factor bearing in mind
that there is no reason why the appellant’s claims in
respect
of all but the first and third respondents cannot be determined in
the high court and only those two respondents may seek
to invoke
clause 10 to have their dispute with the appellant determined
elsewhere.
(c)
Moreover, a single action has the undoubted advantage of saving time,
expense and costs when compared
to a multiplicity of actions. This
too may be a weighty factor as the appellant’s claims that are
capable of being determined
in the high court against most of the
respondents will involve the same factual matrix and the same
witnesses as in the foreign
proceedings against the first and third
respondents.
(d)
When considering the issue of costs, it should also be remembered,
certainly if the cost of litigation
in England is any
barometer,
13
that
the cost of litigation in Europe may well be astronomical when
compared to the cost of litigation in this country. Sight must
also
not be lost of the likely fees and charges of the arbitrators should
an arbitration take place.
(e)
If the dispute involves questions of law rather than of fact,
arbitration may well prove to be both
inconvenient and impractical.
Consequently, regard should be had to whether the dispute is readily
capable of being dealt with
by way of arbitration. If not, it would
count heavily against the enforcement of an arbitration clause”
40.
The court
further stated that:
“
these
are some of the relevant factors which spring readily to mind. The
list is certainly not intended to be exhaustive. Of course,
the
discretion to be exercised is fact specific in the sense that each
case must be considered in the light of its own discrete
facts, with
the various relevant factors being afforded whatever weight in the
scales is appropriate in the circumstances. Certainly,
no hard and
fast rules can be prescribed.”
41.
This matter has not yet been referred to arbitration as yet, in the
sense that
no arbitrator has been appointed as yet and there is
therefore no pending arbitration before the arbitrator, between the
same parties
based on the same subject matter. Here RAL is not asking
that the arbitration be stayed, it is distinguishable from the matter
where there is arbitration pending.
42.
Axton contend that
the applicant ‘s case is falling short of the test set out in
Delange
v Methodist Church and another
[10]
.
Axton contend that the RAL has made no reference to what it is that
“would unjustifiably diminish or limit protection afforded
by
the constitution”, if the arbitration agreement were to be
enforced.
43.
In this matter the factors that the court takes
into consideration when excising its discretion are the following:
43.1
The
dispute is between the RAL, Matla, and Axton. Matla is not part
covered by the dispute resolution proceedings and arbitration
agreement. In essence Matla cannot be forced to be part of the
arbitration process. RAL would, if this application is dismissed,
must institute its claim for damages against Matla in court and
against the Axton in the arbitration proceeding or dispute resolution
proceedings. This will result in multiplicity of proceedings,
witnesses, and evidence.
44.
The other issue which must be considered by the
court is whether the RAL has satisfied the test as set out in
Delange. RAL must
show this court that if the arbitration agreement
is enforced, that it “
would
unjustifiably diminish or limit protection afforded by the
constitution”
. The only place
where the court found that RAL has attempted to deal with the test
set out in Delange is when it addressed the
issue of whether the new
constitutional dispensation has upset the long-standing principle of
outlaw.
45.
RAL
contend that the majority of the constitutional court when considered
the impact of the
section 34
of the constitution on private
arbitration, found that
section 34
does not directly apply to private
arbitrations. The constitutional court would be relevant whether
arbitration agreement, for
instance, contain a provision contrary to
public policy, in light of the values of the constitution, in which
instance the agreement
will be null and void to that extent.
[11]
46.
In
Lufuno
Mphaphuli & Associates (Pty) v Andrews and Another
the Constitutional Court held in this regard that:
"Courts
should be respectful of the
intentions of the parties in relation to procedure. In so doing, they
should bear in mind the purposes
of private arbitration which include
the fast and cost-effective resolution of disputes. If courts are too
quick to find fault
with the manner in which an arbitration has been
concluded, and too willing to conclude that the faulty procedure is
unfair or
constitutes
a
gross
irregularity within the meaning of
section 33(1)
, the goals of
private arbitration may well be defeated."
Axton’s
Counter Application
47.
Axton lodged a counter application in this matter that RAL be ordered
to make
payment of the following sums to the Axton (within 30 days of
this order) in accordance with its undertaking to do so, dated 11
June 2018:
47.1 Payment
in the sum of R5 257 959.31 (Incl. VAT), being the
retention money withheld by RAL in respect
of the construction
contract between Axton and RAL (which is the subject of these
proceedings) and admitted by or on behalf of
RAL on 11 June 2018 as
owing to Axton;
47.2 Payment
of the sum of R125 913.66 (incl. VAT) being the difference
between the sum of R1 630 617.18
(incl. VAT) admitted as
owing by or on behalf of RAL on 11 June 2018 in respect of a payment
certificate, and the sum of R1 504 703.52
(incl. VAT) paid
by RAL to Axton on or about 17 January 2019;
47.3 Payment
of interest at the prescribed rate of interest,
a tempore morae
,
from 11 June 2018, in respect of the sum payable in terms of prayers
1.1 and 1.2 above.
48.
In the alternative to prayer 1 above:
48.1 The
decisions delivered by Mr Bryan Westcott (“the adjudicator”)
on or about 27February 2020 (in respect
of the merits) and on or
about 7 August 2020 (in respect of the quantum), copies of which are
annexed, are binding on the applicant
(Axton) and the second
respondent (RAL);
48.2 The
second respondent (RAL) is hereby ordered to pay the following to the
applicant (Axton) within 30 days of this
order:
48.2.1
the sum of R2 440 031.05 (including
VAT), being the
different between the retention amount of R5 257 953.31
(incl. VAT) withheld by RAL and the sum of R2 450 372.40
(excl. VAT) authorised for deduction by the adjudicator on or about 7
August 2020;
48.2.2
the sum of R127 684.01 (exclusive
VAT), being the 50% share
payable by RAL for the costs of adjunction proceedings in terms of
the adjudicator’s decisions;
and
48.2.3
payment of interest at the prescribed
rate of interest,
a tampore
morae
, from 11 June 2018, in respect of the sum payable in terms
of prayers 2.1 and 2.2 above.
49.
That it be declared that the applicant (Axton) is not liable to the
second respondent
(RAL) for any claims for the alleged defects:
49.1 In
respect of the construction agreement concluded between it and the
second respondent (RAL), concluded on or
about 26 May 2014 (referred
to inter alia paragraph 19 of the particulars of claim in the main
action under ca number 5103/2018
– under contract no.
RAL/T547/2014 for the upgrading (gravel to tar) of road 03537 from
Harry Openheimer (N11) to Pudiyakgopa
to Bakenberg, 18km in the
Waterberg District of Limpopo Province; and
49.2
Including in respect the claims set in the second respondent’s
(RAL) particulars of claim, in particular
the follow paragraphs to
the extent that they relate the applicant (Axton):
49.2.1
19 to 25; and
49.2.2
26 to 34.
50.
In respect of both prayers 1, 2 and 3 (all including sub-paragraphs)
above,
the second respondent (RAL) shall pay costs of this
application:
50.1 on a
scale of attorney and client in the case of opposition thereof; and
50.2 jointly
and severally with any other respondent, on the scale of attorney and
client, in the event of opposition
by any other respondent.
51.
The counterclaim is based on the two decisions of the adjudicator who
was appointed
pursuant to clause 10.5 and 10.6 of the construction
clause. The adjudicator adjudicated a dispute referred to him by
Axton and
delivered two decisions ,on merits and quantum. RAL
participated in the adjudication proceedings .RAL submits that it has
participated
in the adjudication despite its objection to the
procedure. The adjudicator has ordered RAL, to pay Axton a sum of
R2 564 944,37.
RAL admitted in its founding affidavit that
it was ordered to pay Axton the sum of R2 564 944,37 by the
adjudicator.
52.
RAL is opposing this application on the basis that this counter
application
cannot be decided on affidavits alone without oral
evidence because there is substantial factual dispute between the
parties.
53.
The factual dispute between the parties as submitted by RAL are in
essence among
others the following:
53.1 The
factual dispute of whether or not Ms Mangena, the attorney acting for
RAL at that stage had indeed validly
bound RAL by an alleged
undertaking not to institute action against Axton or admitted
liability by way of acknowledgement of debt.
53.2 Whether
it is Axton or Matla or both parties, which are to blamed for the
defective road.
53.3 The
dispute whether Axton is entitled to the portion of the retention
money awarded to it by the adjudicator or
the full retention money it
is claiming in the counter application.
53.4 Dispute
of whether or not RAL, admitted liability in an email written by the
attorney on 11 June 2018 to Axton’
attorneys, and by making
payment on progress certificate and released the retention.
54.
Axton disputes that there is real dispute of fact and that Plascon
Evans is
not applicable in this matter. They contend that letter of
Ms Mangena if it was made without prejudice ,that privileged was
waived
by RAL when disclosing that letter in its replying affidavit.
They further contend RAL contention (in order to establish a factual
dispute of facts ) for any factual context which admission of
liability of 11 June 2018,it has not raise a genuine dispute of fact.
Axton Submitted that RAL has made payment pursuant to the alleged
“without prejudice” undertaking.
55.
Axton contend that the deponent of the replying affidavit is MR
Machaba who
is neither the Ms Mangena nor the author of the letter of
11 June 2018.According to Axton the real dispute can only arise on
the
letter dated 11 June 2018 ,if the deponent was the author of the
same letter.
56.
The trite principle of law in motion proceedings is that affidavits
constitute
both evidence and pleadings. It was stated by Harams JA,
in the
National Director of Public Prosecutions vs Zuma, 2009
(2) SA (SCA)
, at paragraph 26
,
that:
“
Motion
proceedings, unless concerned with interim relief, are all about the
resolution of legal issues based on common cause facts.
Unless the
circumstances are special, they cannot be used to resolve factual
issues because they are not designed to determine
probabilities. It
is well established under the Plascon-Evans rule that where in motion
proceedings disputes of fact arise on the
affidavits, a final order
can be granted only if the facts averred in the applicant’s (Mr
Zuma’s) affidavits, which
have been admitted by the respondent
(the NDPP), together with the facts alleged by the latter, justify
such order. It may be different
if then respondent’s version
consists of bald or uncreditworthy denials, raises fictitious
disputes of fact, is palpably
implausible, far-fetched, or so clearly
untenable that the court is justified in rejecting them merely on the
papers.”
57.
There is real dispute of facts in this counter application. For one
it is not
quite clear how much is Axton entitled to in the retention
money. Axton is claiming different amount to the amount awarded by
the
Adjudicator. Based on the facts it is impossible to decide on
paper as to whether ,it is Matla or Axton or both the parties ,which
are to be blamed for the defective road complained about. There is
real dispute which cannot be decided on paper.
58.
This principle
that applicable if there is dispute of facts is called the “Plascon
Evans Rule” which was developed in
the matter of
Stellenbosch
Farmers Winery Ltd v Stellenbosch Winery (Pty) Ltd
[12]
and applied in the
Plascon
Evans Paints ltd v Van Riebeeck Paints (Pty)Ltd
.
[13]
59.
The court held in
the matter of
Moosa
Bro & Sons (Pty)Ltd v Rajah
[14]
“the presence of a dispute of fact in an opposed application,
and the nature thereof, will often be the determining consideration
in deciding whether viva voce evidence should be ordered”.
60.
In the matter of
Room
Hire Co (Pty)Ltd v Jeppe Street Mansions (Pty)Ltd
[15]
,
it was held that the ‘principle’ ways in which a dispute
of fact may arise are set out as follows:
(i)
When the respondent denies all the material allegations made by the
various
deponents on the applicant’s behalf and produces or
will produce, positive evidence by deponents or witnesses to the
contrary.
He may have witnesses who are not presently available or
who, though adverse to making an affidavit, would give evidence viva
voce
if subpoenaed.
(ii)
When the respondent admits the applicant’s affidavit
evidence but alleges other facts which the applicant disputes.
(iii)
When the respondent concedes that he has no knowledge of the main
facts stated by the applicant,
but denies them, putting the applicant
to the proof and himself gives or proposes to give evidence to show
that the applicants
and his deponents are bias untruthful or
otherwise unreliable, and that certain facts upon which the applicant
relies to prove
the main facts are untrue. The absence of any
positive evidence possessed by the respondent directly contradicting
the applicants’
main allegations does not render the matter
free of a real dispute of fact.
61.
Axton is seeking the final relief in this counter application, the
relief can
only be granted if the facts as stated by the respondent
(RAL) together with the admitted facts in the applicant’s
(Axton)
affidavits, justify the granting of such relief, which is not
the case in this matter.
62.
RAL seek that the court struck allegation which are scandalous,
vexatious defamatory
and considered to be new information from Axton
replying affidavit. This application is made in terms of
rule 6(15)
of the uniform Rules of Court. The allegation which are scandalous
,vexatious defamatory and new information from Axton replying
affidavit are struck out.
CONCLUSION
63.
The “
onus”
to
demonstrate “
good
cause”
in
an Application is not easily met. This means no more nor less that
the applicant, in this matter it would be RAL, has to make
out what
has been referred to as a “
persuasive
case”
[16]
.
Our Courts, correctly, have not defined precisely what circumstances
constitute a “
persuasive
case”
(otherwise
put “
a
very strong case”)
[17]
.
Here
the arbitration agreements are valid and the contrary has not been
contended. This requires a consideration of the merits of
each
matter. This must overall result in a just and equitable outcome. A
party will not be held to an arbitration agreement that
will result
in an unfair or unreasonable outcome
[18]
.
The Courts will however hesitate to set aside an arbitration
agreement absent misconduct or irregularity unless “
a
truly compelling reason exists”
[19]
.
64.
In the Constitutional era good cause embraces an enquiry into whether
the arbitration
agreement, if implemented, would “
unjustifiably”
diminish or limit protections afforded by the Constitution. This
enquiry appears to have been ignored by the RAL entirely in their
heads and factual allegations, probably arising from the failure to
appreciate the significance of the Constitutional Court’s
judgment in
De Lange
(supra)
, to which they did
not refer to
.
65.
Importantly, absent the infringement of Constitutional norms, Courts
will hesitate
to set aside an arbitration agreement untainted by
misconduct or irregularity unless a “
truly compelling reason
exists”.
29
66.
RAL failed to prove that if the arbitration agreement, is
implemented, it would
“
unjustifiably”
diminish or
limit protections afforded by the Constitution. It only raised the
point that it would lead to multiplicity of proceedings
which it
would be inconvenient and expensive for RAL.
67.
Now turning into the counter application by Axton. The counter
application is
moulted with dispute facts, the principle of Plascon
Evans apply to the counter application.
Costs
68.
RAL is requesting that the order be granted in terms of prayer
1,alterntevely
,prayer 2 of the notice motion with costs including
costs of senior counsel. Further requested that the Axton Counter
application
be dismissed with costs on an attorney and client scale,
including the costs of senior counsel.
69.
Axton seeks that RAL’s application be dismissed with costs,
including
costs consequent upon the employment of counsel.
70.
Axton further seek a relief as sought in the notice of motion of the
counter
application and that RAL pay Axton’s costs in the
counter application. It is trite that the issue of costs are on the
discretion
of the court.
Order
The following order is
made:
1.
RAL’s application is dismissed with costs,
including the costs consequent upon the employment of counsel.
2.
Axton’s counter application is dismissed
with costs including the costs consequent upon employment of senior
counsel.
TC
LITHOLE
ACTING
JUDGE
LIMPOPO
DIVISION OF THE HIGH COURT
POLOKWANE
APPEARANCES
On
behalf of the Applicant:
with:
Adv
D Mills SC
Instructed
by:
Machaba
Inc .
On
behalf of the 2
nd
respondent:
Adv
S Tshikila
Instructed
by:
Orelowitz
Inc.
DATE
OF HEARING
:
04 AUGUST 2022
DATE
OF JUDGMENT
:
29 November 2022
[1]
2005 (4) SA 212
(SCA) at para 66
[2]
12
Metallurgical
& Commercial Consultants (Pty) Ltd v Metal Sales Co (Pty) Ltd
1971
(2) SA 388
(W) 391;
Sera
v De Wet
[1974]
All SA 295 (T); 1974 (2) SA 645 (T) 649-650;
[3]
Welihockyj
and Others v Advtech Ltd and Others
2003
(6) SA 737 (W).
[4]
Rawstorne
and Another v Hodgen and Another
2002
(3) SA 433 (W).
[5]
Sera v
De Wet supra
[6]
De
Lange v Methodist Church and Another
2016
(2) SA 1
(CC) (This decision was not referred to before the Court
a
quo
or
for reason that escapes me before this Court, in my view, a
fundamental omission.
[7]
Airport
Company SA Ltd v ISO Leisure OR Tambo (Pty) Ltd supra
[74]
;
Metallurgical (supra)
393G-394B;
Universiteit
van Stellenbosch v JA Louw (Edms) Bpk (supra)
339-342
[8]
1971 (2) SA 388 (T).
[9]
metallurgical
and Commercial Consultants
(supra)
391E-H
[10]
2016
(2) SA 1 (CC)
[11]
Lufhuno
Mphaphuli & Associates (Pty) Ltd v Andrews and Another
[2009]
ZACC 6
at Paras 218-220.
[12]
1957(4)SA234(C)
[13]
1984(3)SA623(A)at 634
[14]
1975(4) SA 87 (D) at 91D
[15]
1949(3) SA 115 (T) at 1163
[16]
Delange
Supra
[17]
Delange
Supra
[18]
Delange
Supra
[19]
Delange
Supra