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[2021] ZALMPPHC 45
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Tawanda Water Initiative (Pty) Ltd t/a Limpopo Water Initiative v Lepelle Northern Water Board (6353/2020) [2021] ZALMPPHC 45 (16 August 2021)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
LIMPOPO DIVISION,
POLOKWANE
CASE
NO: 6353/2020
REPORTABLE:
YES/N0
OF
INTEREST TO OTHER JUDGES: YES/NO
REVISED
In
the matter between:
TAWANDA
WATER INITIATIVE (PTY) LTD t/a
APPLICANT
LIMPOPO
WATER INITIATIVE
And
LEPELLE
NORTHERN WATER BOARD
RESPONDENT
JUDGEMENT
KGANYAGO
J
[1] The
applicant was awarded a tender by the respondent, and on 17
th
August 2015 the applicant and the respondent entered into a written
Service Level Agreement (SLA) for the design, manufacture,
supply,
installation and commissioning of a 10 mega litre per day wastewater
treatment works at Burgersfort Wastewater Treatment
Works, as a
turnkey project. During the execution of the work by the applicant, a
dispute arose between the parties regarding the
extension of time,
contract price adjustment, exchange rate damage, interest charges
claims and the release of retention monies.
[2] The
parties agreed in writing to refer their dispute to an ad-hoc
adjudication in terms of clause
10.5.2 of the General Conditions of
Contract for Construction Works (GCC). Their dispute was to be
adjudicated by an Adjudication
Board conducted in terms of the
Adjudication Board Rules, in accordance with the provisions of the
GCC. Advocate Hubert Thompson
was appointed as the adjudicator, and
he found in favour of the applicant. As per the decision of the
adjudicator, the respondent
was liable to pay the applicant a certain
amount of money.
[3] When
the applicant’s attorney demanded payment of the money from the
respondent as per the adjudicator’s
findings, the respondent
served the applicant with a formal notice of disagreement with the
adjudicator’s decision in terms
of clause 10.6.1.2 of the GCC.
The respondent in that notice further notified the applicant that it
was referring the dispute for
arbitration. The respondent further
notified the applicant that they regard the process of adjudication
as a form mediation, and
that as per clause 7 of the SLA, the dispute
resolution agreed between the parties was by way of arbitration.
Based on that the
respondent objected to the applicant’s demand
for payment as per the adjudicator’s decision.
[4] On
30
th
September 2020, the respondent instituted an action
in the High Court seeking to review and set aside the tender awarded
to the
applicant which led to the signing of the SLA, and refund of
payment already made to the applicant in terms of the SLA. The
applicant
has already filed its plea to the respondent’s
action. On 6
th
October 2020, the applicant instituted the
present application seeking declaratory orders that the adjudication
proceedings submitted
to by the applicant and respondent were
conducted in terms of clause 10.5.10.6 of the GCC; that these
adjudication proceedings
were binding on the parties until and unless
it was revised by an arbitration award, as provided for in clause
10.6.1.1 of the
GCC. Further the applicant is seeking an order that
the respondent be ordered to comply with the decision of the
adjudicator including
payment as per that decision.
[5] The
respondent is opposing the applicant’s application. The
respondent in its answering affidavit
is contending that the
proceedings were not adjudication proceedings pursuant to clause 10
of the GCC, but rather some sort of
mediation that was not binding on
the parties. The respondent in the alternative is applying that the
applicant’s application
be stayed pending final determination
of the action it has instituted against the applicant. The applicant
contend that its application
should not be stayed, as the subject
matter in the action is the same subject matter as that of
arbitration proceedings, and that
the request for a stay is
demonstrably unmeritorious.
[6] The
first issue which this court must determine is whether the
applicant’s application should be
stayed pending the outcome of
the action instituted by the respondent against the applicant. Beside
the current application, there
are pending arbitration and action
proceedings against the same parties relating to the same issues. The
question is whether these
three processes can run parallel to each
other at the same time, and if they are allowed to do so what will be
the implication.
[7] In
Mokone v
Tassos Properties
[1]
Madlanga J said:
“
[65] In a similar
vein, and placing reliance on Kent, the court in Jorgensen held that
‘(t)he Courts do not however
act on abstract ideas of
justice and equity. They must act on principle.’ In Clipsal the
Supreme Court of Appeal quoted both
Kent and Jorgensen with approval.
[66] This seems to stand
in the way of Mokone getting the relief she is seeking. Must it?
Section 173 of the Constitution provides:
‘
The
Constitutional Court, the Supreme Court of Appeal and the High Court
of South Africa each has the inherent power to protect
and regulate
their own process, and to develop the common law, taking into account
the interest of justice’
[67] Put simply, this
says the mentioned courts may regulate their own process taking into
account the interests of justice. I will
say nothing about equity
but, based on this, I do not see why proceedings may not be stayed on
the grounds dictated by the interest
of justice. Whatever the import
of what was said by courts previously may be, the Constitution lays
down its own test; and everything
to do with the interest of justice.
[68] In this context, the
idea of interest of justice is quite wide. I will not attempt to
delineate what it encompasses. Suffice
it to say, what justice
requires will depend on the circumstances of the case.”
[8] The
respondent had instituted its action against the applicant before the
applicant could institute
its application against the respondent. It
can therefore not be said that the action that has been instituted by
the respondent
was in retaliation to the application that has been
instituted by the applicant. In its action proceedings, the
respondent is seeking
orders that the tender which has been awarded
to the applicant be reviewed and set aside on the basis of
illegality, that the applicant
refund it the money already paid as a
result of the alleged illegal contract. Should the applicant succeed
with its action, it
will have a huge impact on the current
application by the applicant. The applicant will be unable to proceed
with its claim against
the respondent in the current format. However,
should the respondent be unsuccessful, the applicant may still be
able to proceed
with its application in the current format, and also
be able to claim interest until date of payment.
[9] The
respondent has instituted action proceedings where the parties will
be able cross examine witnesses
and test their credibility in finding
the whole truth about this matter. The applicant does not stand to
lose anything if the action
proceedings is finalized first, but
instead it will benefit from the interest that will have accrued on
the outstanding amount.
However, should the applicant’s
application be finalized before the respondent’s action
proceedings, and the respondent
pay the applicant, there is no
guarantee that the respondent will be able to recover the full amount
if the applicant had already
expended that amount should the
respondent succeed in its action proceedings.
[10] In
Caesarstone
SDOT-Yam v World of Marble and Granite 2000
[2]
Wallis JA said:
[48] I stress that
I am not saying that it will would be an abuse of the process of the
court for the other members of the Sachs
family to try and
pursue the Western Cape action, when that action has been stayed
insofar as WOMAG and Mr Oren Sachs
are concerned. However, the
practical difficulty of their doing so, when their right to pursue
those claims is joint with the persons
in relation to whom the action
has been stayed, requires the court to exercise the inherent
discretion of which Milne J spoke,
in order to avoid those
difficulties. That discretion is now confirmed in s 173 of the
Constitution.
[49] The only issue
sensible way in which to address the problem is for the court also to
stay the proceedings against the remaining
members of the Sachs
family, not on the basis of lis pendens, but in the exercise of its
inherent powers to regulate its own procedures.
Once the Israeli
proceedings are complete and a final judgment has been given it will
be open to them, together with WOMAG and
Mr Oren Sachs, to resume the
Western Cape action…”
[11] In
the case at hand it is vital that the status of the tender which was
awarded to the applicant, which
led to the SLA been signed by both
the applicant and respondent be resolved. Once that has been
resolved, it may even curtail proceedings
in the current applicant’s
application. The applicant had already filed its plea in the
respondent’s action, which
soon might be ripe for trial. In my
view, the interest of justice favours the staying the applicant’s
current application
pending the final determination of the
respondent’s action against the applicant.
[12] In
the result I make the following order
12.1 The applicant’s
application under case number 6353/2020 is stayed pending the final
determination of the action instituted
by the respondent against the
applicant under case no 6229/20
12.2 Costs are reserved.
KGANYAGO
J
JUDGE OF THE HIGH
COURT OF SOUTH
AFRICA, LIMPOPO
DIVISION, POLOKWANE
APPEARANCES:
Counsel
for the applicant
Adv
GP van Rhyn
Instructed
by
Becker
Attorneys
Counsel
for the Respondent
Adv
NA Cassim SC
Adv
K Naidoo
Instructed
by
NJ
Morero Inc Attorneys
Date
heard
2
nd
August 2021
Electronically
delivered on
16
th
August 2021
[1]
2017 (5) SA 456
(CC) at paras 65-68
[2]
2013 (6) SA 499
(SCA) at paras 48 and 49