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[2020] ZAGPPHC 234
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Van der Merwe and Others v Bevcon Management Services (Pty) Ltd and Another (3519/17; 21816/1) [2020] ZAGPPHC 234 (21 February 2020)
IN
THE REPUBLIC OF SOUTH AFRICA
THE
HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO:3519/17
CASE
NO:21816/17
REPORTABLE
NO/YES
OF
INTEREST TO OTHER JUDGES: NO/YES
REVISED
DATE:21/02/2020
LYDIA
ANNA VAN DER
MERWE
1
ST
APPLICANT
RUSSEL
JOHANNES VAN DER MERWE
2
ND
APPLICANT
ELIZABETH
SNOW HOLTZHAUSEN
3
RD
APPLICANT
And
BEVCON
MANAGEMENT SERVICES(PTY)LTD 1
ST
Respondent
ADVOCATE
JOHAN PRINSLOO
2
ND
Respondent
JUDGMENT
KHUMALO
J
[1]
The Applicants, Mrs LA van der Merwe and Mr R J van der Merwe, who
are
husband and wife, 1
st
and 2nd Applicant, respectively
and Ms ES Holtzhauzen, the 3
rd
Applicant, seek an order in
terms of Rule 53 of the Uniform Rules of Court, reviewing and setting
aside an arbitration award that
was granted by the 2
nd
Respondent on 17 November 2016 in favour of the 1
st
Respondent and dismissing their counterclaims.
[2]
The 1
st
Respondent is a building construction company. It
was contracted to the Applicants to built or erect a residence and
effect alterations
on their stand in Benoni. In these proceedings the
1st Respondent is represented by their director Brian Robert Houghton
who has
deposed to its Answering Affidavit.
[3]
The 2nd Respondent is cited in his capacity as the Arbitrator who
presided
over the Arbitration Hearing (referred to herein as the
“Arbitrator”) and whose decision the Applicants are
seeking
to review. No order is sought against the Arbitrator and he
is not opposing the Application.
[4]
The 3rd Applicant is the 1st Applicant's mother in law. She together
with
the 1
st
and 200 Applicants signed the building
contract dated 4 December 2013 that is now a subject of contention.
Background Facts
[5]
In September 2014, nine (9) months after signing the contract, nearly
at the end of the contract, the Applicants took occupation of the
building. Subsequently a dispute arose between the parties. They
agreed to send the matter for arbitration for adjudication as per
terms of their contract. The 2
nd
Respondent an advocate of
five years’ experience was appointed by agreement between the
parties to preside over the proceedings.
The terms of arbitration
were then concluded.
[6]
The 1st Respondent had sought in his application for arbitration:
[6.1]
as Claim 1, compensation for certain
extras and variations
with
regards to
certain materials and fixtures,
which were alleged
to have been done on the instructions of the 1st Applicant amounting
to R452 976.00.
[6.2]
as Claim 2. Compensation for alleged enrichment in the amount of R312
451.00.
[7]
On the other hand the Applicants filed a counterclaim for:
[7.1]
Rental Expenditure amounting to R50 000.00
[7.2]
Payment for various expenses
[7.3]
Alleged bad workmanship by the 1st Respondent which totals R957
478.00
[8]
The Arbitrator upheld 1st Respondent’s Claim 1 and in Claim 2
he
only granted an order for 2 amounts that totals R27 815.00 plus
interest. The Applicants’ Counterclaim was dismissed.
[9]
The award was to be complied with within 30 days from the date
of the
award, that is 17 November 2016. As a result of no payment
forthcoming from the Applicants, the 1
st
Respondent
applied in terms of s 31 (1) of the Arbitration Act 42 of 1965 (“the
Act”) for the award to be made
an order of court which was
opposed by the Applicants who indicated their intention to bring an
Application in terms of section
32(2) of the Act for Review of the
Award. They consequently applied for the suspension of the s 31 (1)
Application until after
they have filed their Review Application. On
29 March 2017, the Applicants proceeded to launch their Review
Application. The 1
st
Respondent’ s 31 (1)
Application was subsequently pended to be heard simultaneously with
the Review Application, in the event
the matter is decided in favour
of the 1st Respondent. Both Applications are therefore before me.
[10]
It is the Applicants’ contention that the award is
reviewable as it was
improperly obtained
and also as
there
was
gross
irregularities
committed by the
Arbitrator during the arbitration proceedings.
Failure to administer an
Oath on the witnesses
[11]
The Applicants allege that:
[11.1]
the evidence of the witnesses was not given under oath, that even
though reference
to an oath was made it was never administered. The
witnesses only confirmed having no objection to taking an oath and to
consider
it binding on their conscience. As a result their evidence
that was not sworn to has no bearing on the decision of the
Arbitrator.
The total proceedings therefore constitute a gross
irregularity.
[11.2]
the Arbitrator failed to apply the laws of evidence, the Supreme
Court Act and
the Uniform Rules of Court as agreed to be applicable
to the dispute.
On
1
st
Respondent's Claims) (lack of supporting documents)
[11.3]
The arbitrator granted the award for Claim 1
finding that the 1
st
Respondent has proven the quantum of its claim, without the
discovery and production of the necessary invoices, slips, proof of
payments and bills of quantities for the materials and fixtures in
relation to extras and variations
claimed in Claim 1 in order to
substantiate the Claim. (No documentary evidence to substantiate its
claim).
[11.4]
As a result, the Arbitrator failed to apply the laws of evidence to
the quantum
of the 1
st
Respondent’s claim, therefore
the granting thereof constitutes a gross irregularity.
[11.5]
In addition, the 1
st
Respondent’s claims were
granted without certificate of final completion being issued or the
date of final completion being
established,
whereupon any summons
or statement of claim issued for payment by the Respondent would be
premature and without a cause of action.
Certain snaglists were not
yet
completed.
On Applicant’s
claim and defence
(Decision based on Lateness of enquiries/claims
or
contentions)
[11.6]
The Applicants’ defence was not fully and or fairly determined
in that:
[11.7]
The
arbitrator never
determined or
confirmed
the
completion date,
yet rejected Applicant’s claims
as well as the evidence of the experts appointed by the Applicants on
the basis that they
fell outside the
timeframe envisaged in
Clause 13 of
the
agreement,
contrary to his
finding that the experts reports fall outside the time periods as set
out in the contract for which any defects
should be attended to /made
mention of or notice to be given to the Claimant.
Clause 13 reads:
13.1
The contractor shall at its own cost
13.1.1
Make good any defects in the workmanship and materials which may have
manifested themselves during a period of three (3) months from the
Completion Date and any damage to the works resulting from the
materials or workmanship.
13.1.2
Carry out such repairs and or to make such replacement as may be
necessary to eliminate
roof leakages which may have manifested
themselves during the period of twelve months from the
Completion
Date
and ensure that rain water is properly discharged from the
roof and diverted away from the building.
13.1.3
Carry out such works and repairs as may be necessary to rectify any
material structural
failure of foundations, brickwork and structural
timbers, which many have manifested themselves during a period of
five years from
Completion date
which undertaking may not be
ceded or transferred by the Customer.
13.1.4
The contractor shall forthwith upon receipt of written notice of the
defect commence
the work required to be performed to remedy the
defect and shall complete the same within a reasonable period.
13.1.5
The
contractor shall
be
absolved
and
relieved
form
the obligations
in
terms
of
13.1
if
the
customer fails
to
give
the Contractor notice in writing by registered post, within 21 days
of
the
expiry of any of the said periods of three months,
twelve months
or five years, as the
case may be.
Provided nothing in this clause 13 shall be construed to restrict
or eliminate in any way the Contractor's liability for any defects
or
insufficiencies in the works or materials which a reasonable
examination would not have disclosed.
Clause 12.3 reads:
12.3. The works shall
be deemed to have been completed on the date (hereinafter referred to
as “the Completion Date”)
stated in a certificate by the
bank or an architect or designer appointed by the Bank, that there
has been practical completion
of the works, subject to completion of
any outstanding minor works which may be listed in such certificate,
and subject to the
Contractors obligations in terms of clause 13.
[12]
Applicants therefore argue that as it can never be found that
completion took place in terms of the building agreement, the
granting
of the 1
st
Respondent’s
claims and rejection of the Applicants’
without
establishing the completion date or referring to evidence which
confirms the completion date, constitute a gross irregularity.
Furthermore that the completion date has yet to arise nor was it ever
communicated to the Applicants and therefore not aware when
complaints expired. The 1
st
Respondent had admitted that
the certificates including the occupation certificate were never
provided to the Applicants.
[13]
The Arbitrator held that the payments made by the Applicants indicate
that they were fully aware of
the payments being due, contrary to
clause 11.6 that states that “No payments made in respect of
work done and materials
supplied shall constitute an acceptance by
the
Customer of the adequacy or sufficiency thereof”
and
thereafter finding the enquiries made thereafter to be farfetched and
too late or due to the duration of time.
[14]
The Applicants also found it to be a gross irregularity for the
Arbitrator to have concluded that the
Applicants were not entitled
and had no legal basis to request vouchers from the 1st Respondent,
despite the agreement giving the
Applicants the right to do so.
[15]
They allege that no evidence was led on compliance by the 1
st
Respondent with clause 12.3. Further that, without a completion
date the Arbitrator ruled that the defects raised fell outside of
clause 13.1.
Also that the Applicants were out of time, thereby
claiming that their claims arose 3 months after the Completion Date,
when
the occupation certificate was not
properly obtained
from the Ekurhuleni Municipality
and ought not to have been
relied upon. No certificate as contemplated in clause 13.3 was
provided for the satisfactory attendance
to the snaglist by the
Contractor and therefore completion never established.
Improperly obtained award
Reliance on Invalid Certificates
[16]
The Applicants allege that;
[16.1]
the Engineer Compliance Certificate relied upon during arbitration
proceedings and accepted by the Arbitrator as authentic is
fraudulent
even though it is signed by the Engineer on 30 June 2014 and
countersigned by 1
st
Respondent on 20 February 2015. The
document in possession of Ekurhuleni Municipality was
discovered
by the Applicants on 25 February 2017
that it is not signed by
the 1st Respondent as owner's representative and does not have the
Professional Indemnity Insurance Policy
Number of the Engineer. Also
Engineer Certificate issued after the Occupation Certificate.
[16.2]
The Arbitrator rejected a witness’ testimony, Mr Ferreria, on
the authenticity
of the Certificates issued. Mr Ferreira had
testified that the Gas Certificate was signed off by a different
person from the one
that installed the gas, the gas bottles at the
house have not been installed properly and gas leaking, the Plumbing
Certificate
is signed off although there are numerous problems with
the plumbing with the owner raising inconsistencies around the house,
there
is poor storm water drainage at the back of the house.
Applicants allege that failure to take into
consideration
such integral part of the testimony amounts
to gross
irregularity.
[16.3]
Further that as the Engineer Completion Certificate
remains uncompleted,
the completion date never arose. As without it
the Completion Certificate cannot be issued.
The 1st Respondent
perjured himself or misled the
Arbitrator
when
he
stated
that
the
completion
date
was
September
2014.
[16.4]
The irregularities are very gross in nature and prevented the case
from being fully
and fairly determined. The evidence of all the
experts' witnesses was rejected on the basis of their inspections
being out of time
of the 3 months completion date.
Answering
Affidavit
[17]
In response thereto, the 1st Respondent raised a technical point
in
limine
with regard to the Founding Affidavit which was signed by
the 1st Applicant but also carried the full signatures of the two co
-
Applicants. He contended that the deponent to the affidavit is
indicated to be the 1st Applicant and indicating to her singularly
deposing to the Affidavit stating that “l the undersigned”
but full signature of the three Applicants appear on the
line for the
deponent. The Commissioner does not indicate which signature his
certificate refers to.
[18]
On allegations of the Applicants on the merits, the 1st Respondent
denies
that any irregularities occurred when granting the award. He
avers:
On the administering of
the oath
[19]
On administering of an oath - He says he believes that he was under
oath
and sure all other witnesses too and that the oath was properly
administered. During adjournments they were reminded that they were
under oath. None of the parties’ legal representative objected
to how the oath was administered. Whether the oath was properly
administered or not, all the evidence had a bearing on the decision
of the Arbitrator having been taken into consideration in its
totality. Therefore there could not be prejudice suffered by any of
the parties. He argues that by the Applicants' alleging that
he
committed perjury on the occupation date, it means that she admits
that the oath was properly administered by the Arbitrator.
On
the 1
st
Respondent's claim that:
[20]
On its claim the Respondent alleges that:
[20.1]
the Arbitration was referred to specific invoices and reliance was
also to the spreadsheet
which specifically sets out the amounts and
corresponds with the invoices that has been discovered. The
spreadsheet was provided
to the Applicants several times prior to
Arbitration.
[20.2]
each party was given an opportunity to present its case. The rules
and laws in terms of the
Uniform Rules of the High Court and the
Superior Court Act with regard to evidence as agreed upon were
properly applied taking
into account that
Arbitration Act would
still
be applicable.
On completion date
[21]
In respect of the completion date. He avers that:
[21.1]
the Applicants moved in on 27 September 2014 and the Certificate of
Occupancy was dated 12
November 2014, the experts for the Applicants
only examined and reported the property about or more than a year
thereafter when
the contract made it clear that the defects are to be
reported within three months of completion so the delay was out of
the time
frame in clause 13.
[21.2]
The evidence presented during arbitration was that the date to be
considered was
either the
date of occupation or date of issue of
the occupancy certificate. Applicants' Counsel
also
made
a
submission that
the date of the Occupancy
Certificate had to be considered as the date of completion.
[21.3]
The Applicants had three (3) months after completion of the work
to submit a snag list The fact that a snag list was submitted shows
that the parties had considered the building works to be completed,
also that the parties were aware of such completion. The issue
outstanding on the snaglist had no bearing on the fact that the
completion
date had already occurred.
[21.4]
1
st
Respondent takes note that it admitted that the
certificates including the Occupation Certificate were never provided
to
the Applicants,
but explains that this was due to the fact that
final payment was not yet made
and denies that the completion
date never arose.
[21.5]
There was no cause nor was any further agreement canvassed during
the
arbitration proceedings that
payment would only be
due
after the certificate of final completion.
The 1st
Respondent has incurred the costs and entitled to payment.
[21.6]
He admits to the contents of clause 12.3 however
denies that the
Arbitrator was tasked with the determination of the completion date,
and that it was necessary for the purpose of arbitration.
The
evidence of
both
parties was that it was either date of
occupation or date of occupancy
certificate.
[21.7]
it is not correct that the evidence about there being no Certificate
issued by the designed
persons in terms of clause 13 was never led
during the arbitration proceedings,
the Applicants instead put
before the arbitrator that the completion date was at date when the
occupancy certificate was issued
which was admitted by the 1st
Respondent.
[21.8]
it is not correct that the snaglist /obligations were never
completed, the Applicants
made it impossible for him to fulfill the
remainder of their obligations.
[21.9]
it is not correct that the completion date was never established or
never arose.
The Applicant's advocate had stated that they had
to go on the Occupancy Certificate. Even their expert testified that
“the
completion date is on the day that you complete the work
and all the certificates are issued and you have got an Occupancy
Certificate.”
1st Respondent never responded when asked about
the completion date as the Applicants had already taken occupation
when the enquiry
came.
[21.10]
it is not correct that the Arbitrator was to make a finding
with
regard to completion date
but it is the Applicant herself that
stated that the reports fell outside the correct time periods to
report defects.
The completion date was therefore determined.
Since the Occupation Certificate was issued, therefore
the date of
occupancy was confirmed.
Evidence was also led with regard to
Completion date and submissions made. Date of Occupancy sufficiently
confirmed.
[21.11]
it
is
not
correct
that
the
Arbitrator found
the
Completion Date to
have
arisen
without
saying
when
and
then
ruled
that
the
Applicants
were out of time in
terms of their claims as per clause
13.1.1. The 1st Applicant herself had determined that their report
was out of time and therefore
Arbitrator
finding
in
line
with
the
Applicant's
evidence
as
well
as
that
of
the 1st
Respondent
The reports were also out of time not only with few
days but months, so the Arbitrator did not need to make a ruling
thereon. The
claims were out of the time frame to report defects due
to the fact that the Applicants did not give notice of such defects
within
the required time period and therefore such claim had lapsed.
The Applicants only reported defects before the Arbitration
proceedings
which
the
arbitration
had
to
deal
with,
both
parties
agreed
it
was only the
snaglist
and the Occupation date did arise
and certificate of occupation issued.
[21.12]
the authenticity of the Occupancy Certificate was never
raised and no
witness from the Municipality was called to testify on its
authenticity, but only that the certificate used to obtain
occupancy
was not proper. With regards to other Certificates issued, the issuer
of the Certificate is responsible for it as confirmed
by the
Applicants’ witness.
[21.13]
Reference to the Housing Consumer Protection Measures Act
was
referred to during argument but not whilst presenting evidence.
[21.14]
the issue raised by the Applicants’ that it was wrong of the
Arbitrator
to
reject
their
claim
when
a
certificate
of
final
completion
had
not been
issued
or
date
of
final
completion
not
having
been
established
is not a review issue as it was never raised by
the Applicants during the Arbitration proceedings.
The outstanding
payments were with regard to variations to the
contract
where
the
Applicants would
choose fixture
or
materials over and above the cost or quantity as quoted
and would be paid as soon
as possible. The Applicants even
undertook to pay after the 1st Applicant received funds from a
pending deal.
There was no agreement that this would be
payable at the occurrence of any event. Therefore summons not
premature.
[21.15]
The
Applicants
were
aware
of
the
Completion
date
and
date
of submission
of
defects
reports
as
they
had
already
submitted
their
snaglist. He admits
that the Certificate including the Occupation Certificate were never
provided to the Applicants as the Applicants
had refused to make
payment
of
the
outstanding
amount
owed
to
the
1st
Respondent
With
regard to Applicants allegations that the Arbitrator established that
the snaglist that consists of small things was provided
to the 1st
Respondent in December 2014 and accepted the 1
st
Respondent's testimony that snaglist incomplete as attended to until
there was breakdown of communication. It can therefore never
be found
that completion took place in terms of the building agreement. He
says that Applicants' own witness who used to work for
the 1st
Respondent had testified that he had completed all items on the snag
list. Also the items on the snaglist are dealt with
after completion
date had arrived.
[21.16]
The payment of the 1st Respondent's fees was not dependent on the
completion date or upon
certain certificates being issued therefore
there was no gross irregularity in granting the 1st Respondent's
claim. With regards
to Applicant's claim all parties agreed that
there was only one snaglist to which the arbitration had to deal
with. The fact that
there was a snaglist indicate that the Applicants
were aware of the completion date as a snaglist follows a completion
date. The
Applicants' claim does not deal with the snaglist but new
items which were not reported to the 1st Respondent in terms of
clause
3.
[22]
The occupation certificate can only be obtained once all the
necessary compliance
certificates have been submitted.
[23]
The information on Mr Blyth was not raised at the arbitration
proceedings and therefore
inappropriate for the Applicants to raise
it now and no confirmatory Affidavit was filed by him. Mr Ferreira
does not work for
the Municipality and would therefore not have the
necessary information or knowledge of the reasons why an occupancy
certificate
had not been issued. He did not issue the Occupancy
Certificate. The Certificate stands as long as it is not retracted.
Also as
long it is not found to be invalid or fraudulent it remains
valid and used to determine completion date.
[24]
The document the Municipality alleges to have and AB10 was never
discovered or produced at the arbitration proceedings therefore
its
authenticity never tested under cross examination.
Since this is
a review of a decision taken on 17 November 2016, the allegations
made are therefore after the facts. The applicant
is attempting to
introduce new evidence. The experts report fell out of the relevant
time periods. The Arbitrator allowed the Applicants
the opportunity
to set out their case fully and in doing the matter was fully and
fairly determined.
Applicant’s Reply
[25]
The Applicants persists with its opposition to the administering of
an oath. They argue
that what had happened is not condonable. The
evidence was not under oath, therefore of no value.
[26]
In relation to the invoices they were also unwavering in their
contention
that no invoices were submitted and therefore there was no
evidence that led/justified granting of Claim 1. They argue that the
spreadsheet is not enough proof in a building dispute where the
amount claimed is placed in dispute, it has got no probative or
evidential value without evidence having been led on the source
document. The Applicants also allege that the Arbitrator’s
finding with regard to 1
st
Respondent’s claim is
incorrect. The vouchers and proof of expenses was sought and never
supplied. The spreadsheet was queried
before the Arbitration.
[27]
Furthermore they allege that it is evident from Blyth’s
Affidavit
filed with the Supplementary affidavit that Houghton
committed fraud and intentionally misled not only the Applicants but
also
the arbitrator, which constitute the most gross of reviewable
irregularities.
[28]
The Applicants deny that the completion date was agreed to be 12
November 2014.
The 1
st
Applicant indicates that when
she asked Houghton about completion date she never got an answer. The
date was disputed as was confirmed
by the 1st Respondent’s
Counsel. The 1st Respondent's worker also could not confirm the date.
[29]
The Applicants deny that the snaglist is sufficient proof that
completion took place.
Evidence in that regard led by the Applicants
has been ignored by the Arbitrator.
[30]
The Occupancy Certificate has since been withdrawn by the
Municipality that indicates that
it is a fraud. It is not only the
Applicants who were misled but also the Arbitrator with an invalid or
fraudulent Occupancy Certificate
as is conformed in Blyth Affidavit.
She confirms that the snaglist was within the time limits.
[31]
The Applicants argue that the Arbitrator applied the provisions of
the contract in a haphazard
and inconsistent manner.
They argue
that according to the contract payment can only be made after the
completion date.
The contract also makes specific reference to
the completion date.
[32]
Occupation was taken by the Applicants because they had nowhere
else
to live. The Occupation Certificate was withheld because it was
fraudulent or did not exist.
[33]
The Applicants reiterate that the purpose of this Application for
review is due to the fraudulent activities of the Respondent in
obtaining the Occupational Certificate
.
The fraud was
perpetrated prior and during the arbitration and confirmation of the
fraud came to light
thereafter.
This is the purpose of the
review. Had the arbitrator aware of the fraud the result would have
been different. Therefore submit
that valid and substantial grounds
exist to justify the review of the arbitration award.
Signing
of Founding Affidavit
[34]
On the proper signing of the Founding Affidavit the 1
st
Applicant states that she signed as the deponent as indicated on the
Affidavit, with the 2nd and the 3rd Applicant signing the
Affidavit
in error next to her signature after it was already commissioned. The
same Commissioner also commissioned the Confirmatory
Affidavits. The
Commissioner of Oaths and the 2
nd
and 3rd Applicants have
filed Confirmatory Affidavits attesting to the allegations made by
1
st
Applicant.
Issues
in dispute
[35]
The main issues in dispute are:
[35.1]
whether the contentions raised are reviewable issues. If yes
[35.2]
whether the arbitrator committed a gross irregularity in granting the
1st Respondent
the award for his claim 1 and Part of Claim 2 and /or
if it was improperly obtained considering the relevant evidence that
was
presented or led during the arbitration proceedings.
[35.3]
If the Applicants claims were not properly dismissed.
[36]
However prior to the main issues, the points
in limine
in
relation to the Founding Affidavit raised by the 1st Respondent have
to be resolved first. The Applicants have also applied for
condonation for their late filing of the Review Application which on
consideration of Counsel's argument and the relevant submissions
on
Affidavits I have concluded that the principles of justice and fair
play demand that condonation be granted.
[37]
In relation to the signing of the Founding Affidavit, the provisions
of the Regulations
on Administering Of Oaths and Affirmations as
promulgated in terms of Act 16 of 1963 are discretionary and
therefore the
court has got a discretion whether or not to
refuse an affidavit which does not comply with the Regulations
subject to whether
or not there has been substantial compliance. I am
satisfied with the explanation proffered by the Applicants. It is
clear who
the deponent of the Founding Affidavit is. The other two
signatories to the Affidavit have filed their personal affidavits
confirming
the contents of the 1st Applicants’ Affidavit. I do
not believe that the Respondent would suffer any prejudice if the
Founding
Affidavit is accepted in its form.
The
legal framework on review
[38]
The statutory position that governs the circumstances under which a
court can set aside
an arbitration award are found in s 33 of the
Arbitration Act reads:
“
(1)
Where -
(a)
any member of an arbitration tribunal has misconducted himself in
relation to his
duties as arbitrator or umpire; or
(b)
an arbitration tribunal has committed
any gross irregularity
in
the conduct of the arbitration proceedings or has exceeded its
powers; or
(c) an
award has been
improperly obtained,
the Court may, on the
application of any party to the reference after due notice to the
other party or parties, make an order setting
the award aside.”
[39]
In
Lufuno Mphaphuli and Associates (Ply) Ltd v Andrews and
Another2009
(4) SA 529 (CC) the Constitutional Court at para 235
also held that:
“…
the
values of our Constitution will not necessarily best be served by
interpreting s 33(1) in a manner that enhances the power of
Courts to
set aside private arbitration awards. Indeed, the contrary seems to
be the case.”
[40]
The Constitutional Court further held at para 236 that:
“
Courts should be
respectful of the intention 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
arbitration
has been
conducted,
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.”
[41]
If parties choose arbitration, courts endeavour to uphold their
choice and do not lightly disturb it;
see
Clarke v African
Guarantee and Indemnity
Co
Ltd
1915 CPD 68
at 77;
Telcordia Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA);
Lufuno
Mphaphuli
&
Associates Ply Ltd v
Andrews and Another
2009 (4) SA 529
(CC). The provisions of s 33
were a subject of detailed consideration in
Telcordia
[4] and
[5]
[42]
Where an arbitrator for some reason misconceives the nature of the
enquiry in
the
arbitration proceedings with the
result
that
a
party is
denied
a
fair hearing or a fair trial of the issues, that constitute a gross
irregularity;
see
Ellis v Morgan; Ellis v Desai
1909 TS
576
at 581;
Goldfields Investment Ltd v City Council of
Johannesburg
1938 TPD 551
at 560-561.
Where
an
arbitrator engages in
the
correct enquiry but
errs either on the facts or the law,
that is not an
irregularity and is not a basis for setting aside an award.
[43]
The onus of proof in such review proceedings is that Applicant must
first prove the existence
of the irregularity, and that it was so
gross that it was calculated to prejudice him/her, and, only if
he/she discharges that
onus, then his/her adversary or opponent must
satisfy the court that he/she in fact suffered no prejudice.
Hip-Hop
Clothing
(supra) at 230 D-E. It is therefore upon the Applicants
as the party alleging a gross irregularity to establish the
irregularity
that is so gross to justify a review of the decision.
What an irregularity in proceedings mean is according to Ellis at 581
explained
as follows:
“
But
an
irregularity
in
proceedings
does
not
mean
an
incorrect
judgment;
it refers not to the result, but to
the
method
of
a
trial,
such as, for example, some high-handed or mistaken action which has
prevented the aggrieved party from having his case fully and
fairly
determined.” (my emphasis)
[44]
In Goldfields Investment ltd v City Council of Johannesburg at p 551
its stated that:
‘
It is not merely
high handed or arbitrary conduct which is ascribed as a gross
irregularity; behavior which is perfectly well-intentioned
and bona
fide, though mistaken, may come under that description.
The
crucial question is
whether
it
prevented
a fair trial of the issues. If it did prevent a fair trial of the
issues then it will
amount
to a gross irregularity.
(my
emphasis)
Analysis of the grounds
for Review
[45]
It is contended by the 1
st
Respondent that no oath was
administered on the witnesses even though reference to an oath was
made, therefore the evidence of
the witnesses was not given under
oath. The witnesses only confirmed having no objection to taking an
oath and to consider it binding
on their conscience. As a result
since their evidence was not sworn to, it has no bearing on the
decision of the Arbitrator. The
total proceedings therefore
constitute a gross irregularity. 1
st
Respondent argued
that each party was given an opportunity to present its case. The
rules and laws in terms of the Uniform Rules
of the High Court and
the Superior Court Act with regard to evidence as agreed upon were
properly applied taking into account that
Arbitration Act would
still
be applicable.
[46]
Regulation 2
of the Regulations Governing the Administering of an
Oath or Affirmation Act as amended provides that:
(1) Before a
commissioner of oaths administers to any person the oath or
affirmation prescribed by regulation 1 he shall ask
the deponent-
(a)
whether
he knows and understands the contents of the declaration;
(b)
whether
he has any objection to taking the prescribed oath; and
(c)
whether
he considers the prescribed oath to be binding on his conscience.
2) If the deponent
acknowledges that he knows and understands the contents of the
declaration and informs the commissioner
of oaths that he does not
have any objection to taking the oath and that he considers it to be
binding on his conscience the commissioner
of oaths shall administer
the oath prescribed by regulation 1(1).
(3) If the deponent
acknowledges that he knows and understands the contents for the
declaration but objects to taking the
oath or informs the
commissioner of oaths that he does not consider the oath to be
binding on his conscience the commissioner of
oaths shall administer
the affirmation prescribed by regulation 1 (2).
[47]
In civil matters the Regulations Governing the Administering of an
Oath or Affirmation,
GN R3619, 21 July 1972 (the regulations)
promulgated in terms of s 10 of the Justices of the Peace and
Commissioners Of Oaths Act
16 of 1963 are merely directory and not
peremptory; see
Absa Bank v Botha NO
2013 (5) SA 563
(GNP);
S
v Msibi
1974 (4) SA 821
(T) at 830. The court has got a
discretion to refuse evidence which does not comply with the
Regulations subject to whether or
not there has been substantial
compliance with the Regulations.
[48]
Which had seemed not to be the same in Criminal matters, where it was
viewed as peremptory,
as evidenced by the provisions of s 163 of the
CPA. According to the section the testimony of a witness who has not
been placed
under oath properly, has not made a proper affirmation or
has not been properly admonished to speak the truth as provided for
in
the Act, lacks a status and character of evidence and is
inadmissible”
[49]
This was however also reversed in a number of judgments mainly in
Wayne Gavin Strong
A 265/16 17 September 2018 WCHC where the
Appellant had submitted that all of the viva voce testimony presented
at the trial was
inadmissible relying on the provisions of 162. The
witnesses have been sworn as follows “
Do you swear the
evidence
you
are
about
to
give
will
be
the
truth,
nothing but
the
truth, so
help
me
God?” Instead of them
saying ‘I swear that the evidence that I shall give, shall be
the truth, the whole truth and nothing
but the truth,
so
help
me God’.
The court held that at par 166 that:
“
The reason for
evidence to be given under oath or affirmation or for a person to be
admonished to speak the truth is to ensure that
the evidence given is
reliable. Knowledge that a child knows and understands what it means
to tell the truth gives the assurance
that the evidence can be relied
upon. In the present matter the requirement that the witnesses should
tell the truth was satisfied
by the administration of the oath albeit
without the words the whole truth” included.
[50]
The court held further that:
“
In the present
matter I have come to the conclusion that “the substance”
of the oath which was sworn to by the witnesses,………,was
sufficient to satisfy the requirement of section 162(1) and that the
use of the exact words quoted in section 162(1) is not pre-emptory.
Conversely the failure to use the exact words quoted in section
162(1) was not sufficient, on its own, to render the evidence of
the
witnesses unreliable.
“
Accordingly, in
the circumstances of this case, it seems to me that we should have
regard to the evidence given by all of the witnesses.
There is, with
respect, nothing in their evidence which indicates that they did not
take the oath seriously and undertake to tell
the truth, or to put it
differently, that the omission of the words “
the
whole
truth”
served in any way to detract from the reliability of their evidence;
See also
Cape
Sheet Metal Works (Pty) Limited v JJ Calitz Builder (Pty) Limited1981
(1) SA
697 (0) at 699A-C”
[51]
In the case of S
v Vumazonke
2000 (1) SACR 619
(CPD), it was
argued that the warning to be conveyed to the witness in terms of
section 164(1) did not comply with the provisions
of that section, in
that the words used were not in accordance with the formula, namely
“to speak the truth, the whole truth
and nothing but the
truth.” Jali J (with whom Van Zyl J concurred) rejected this
argument in the following terms:
“
[14] It is my
view that when
a
witness
is being warned in terms of
s
164(1),
it
was
not the
intention of
the
Legislature that exactly the
same
words
should be used
as
prescribed
in
s
162(1).
If that
was
the
intention of the Legislature it would have been prescribed or
conveyed ins 164(1)
as
ins
162(1), where the words
to
be used
when the oath is administered are quoted. I am saying this without
making any finding
as
to
what
the
failure
to
use
the
exact
words quoted ins 162(1) would result in.
In
my view there is no merit in the submission that the oath should be
in the
same
words
or form
as
set
out in the Act. It is the substance of what is being said which
matters and not the form”. (my emphasis)
[52]
In
S v Munn
1973 (3) SA 734
(NCO), the deponent to an
affidavit had signed it before taking the oath. It was accordingly
argued that this defect invalidated
the affidavit as the oath should
first have been administered by the Commissioner of Oaths before the
deponent signed the affidavit.
The issue for decision was whether
the relevant regulations were peremptory or
directory
[53]
The Court at p 736E analysed this issue in the following terms:
“
An oath is no
more than
a
calling
on God
to
punish
you if you
say
what is
not true; and, if it is to be clothed with any efficacy, it can
matter little what words or ceremonies are used in imposing
it,
provided the witness regards his conscience
as
bound
thereby. The purpose of administering an oath
-
normally
before a witness testifies
-
is to
ensure that he
does
not
speak lightly and frivolously, but weighs his words;
to
impress
on him the solemnity
of
the
occasion, and
above
all
to
provide
a
sanction
against
untruthfulness.
Originally
the
sanction lay solely in fear of deferred punishment by God. This
subjective potency
of
the
oath
has
tended
to
diminish
and
been
reinforced by the
sanction
of more immediate punishment by the State,
as
well as
being extended to extrajudicial proceedings by statute. And courts
and commissioners of oaths have inclined in modem times
to
fritter
away the effect of the spiritual sanction by administering the oath
in irreverent and perfunctory fashion, without giving
its theoretical
reinforcement effect, by informing or reminding witnesses of the
temporal one. See Wigmore, secs. 1815 et seq.
The valid criticism of
‘the thoughtless, trivial, and degenerate modern practice’
by Wigmore, vol VI, p.
295,
in all
probability led to the promulgation, in terms of Act 16 of
1963,
of the
new regulations contained in Government Notice R.1258 published in
Government Gazette dated 21.7.1972.”
AT
736E-737C
[54]
The court thereafter concluded that:
“
In my view both
the 1961 and 1972 regulations are directory only and the reasoning in
cases such is Ex parte Vaughan,
1937 C.P.D. 279
; Mtembu v. R.,
1940
N.P.D. 7
; and R. v. Sopete,
1950 (3) S.A.
769
(E),
irrefutable.
[55]
From the record it is apparent that all the witnesses went through
the same
procedure prior to them testifying. It is also correct that
none of the parties raised the issue of the manner in which the
witnesses
were being sworn in, which was short of administering the
oath itself. Indeed they were reminded as per the 1st Respondent’s
argument every time they resumed testifying after an adjournment that
they were testifying under oath or remain under oath. None
of the
witnesses or the parties and their legal representatives ever raised
a concern if there was any, or tried to stop or bring
it to the
attention of the Arbitrator, that they regard a witness/es not to be
sworn in. Up to the time the Applicant had filed
its application for
review. The Founding Affidavit does not make reference to such a
complaint.
[56]
It is also apparent from the record that all the evidence had a
bearing on
the decision of the Arbitrator having taken the evidence
into consideration in its totality. The Applicants had also not made
any
allegations of unfairness of the process as a result of the
shortcomings relating to the oath. It has also failed to indicate
having
suffered any prejudice. As a result technical objections to
less than perfect procedural steps should not be permitted in the
absence
of prejudice, to interfere with the expeditious and, if
possible inexpensive decision of cases, although parties and legal
practitioners
are not to be encouraged to become slack in the
observance of the rules; see
Trans African Insurance
Co
Ltd
v
Malu/eka
1956 (2) SA 273
(A) at 277A-B;
and
Rabie
v
De Wit
2013 (5) SA 219
(WCC) at
222E-223A.
[57]
The crucial question to be asked is whether the technical error
prevented a fair trial
of the issues. If it did, then it will amount
to a gross irregularity. It has not been alleged to have prevented a
fair trial of
the issues as all the witnesses had believed to have
been under oath and have not objected when they were warned that to
be the
case nor wasthere an objection from the legal representatives.
The Applicants' have also alleged on the basis of the same evidence
that Houghton committed perjury in his testimony on the occupation
date, it means that they admit and also believe that the evidence
to
have been sworn to.
[58]
The Appellate Division, as the Supreme Court of Appeal was then
known, in
Amalgamated Clothing and Textile Workers Union of South
Africa v Veldspun (Pty) Ltd,
[1993] ZASCA 158
;
1994 (1) SA 162
(A) at p. 169 C-E, when considering the effect of mistakes made by an
arbitrator similarly held that:
“
...
it is clear that the word [misconduct] does not extend to
bona
fide
mistakes
the arbitrator may make whether as to fact or law. It is only when a
mistake is so gross or manifest that it would be evidence
of
misconduct or partiality that a Court might be moved to vacate an
award: Dickenson & Brown v Fishers’s Executors
1915
AD 166
at 174-81. It was held in Donner v Ehrlich
1928,
WLD
159
at 161 that even a gross mistake, unless it establishes mala fides or
partiality, would be insufficient to warrant interference.”
On 1st Respondent's
Claims) (lack of supporting documents)
[59]
A gross irregularity is alleged to have been committed by the
Arbitrator
by granting the award for Claim 1,
finding that the 1st
Respondent has proven the quantum of its claim, allegedly without the
discovery and production of the necessary
invoices, proof of payments
and
bills of quantities for the materials, fixtures for the
extras and variations
to substantiate the Claim. As a result, the
Arbitrator failed to apply the laws of evidence to the quantum of the
1st Respondent’s
claim, therefore the granting thereof
constitutes a gross irregularity.
[60]
The allegation is denied by the 1st Respondent who alleges that the
Arbitrator was referred
to specific invoices and reliance was also to
the spreadsheet which specifically sets out the amounts and
corresponds with the
invoices that has been discovered. The
spreadsheet was provided to the Applicants several times prior to
Arbitration. The Appellants
denied that such a spreadsheet was sent
to them but then again it alleged that it was sent to them a long
time ago. The Applicants
further alleged that the invoices, slips,
receipts or proof of payment for the extras have not been discovered.
The principle espoused
in
Plascon-Evans Paints Ltd v Van
Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A), becomes
relevant and applicable. What is more important is that the
Arbitrator in his judgment does confirm that the invoices
and
spreadsheets were indeed presented to the arbitration, its
admissibility debated by the parties and oral evidence considered
by
the Arbitrator in deciding the matter. I am not required to determine
whether or not the award made by the Arbitrator is correct,
but only
as to whether the process was fair. Did this amount to an unfair
hearing. On this aspect it cannot be said of the process.
[61]
There is substantial authority that the grounds contained in
Section
33(1)
of the
Arbitration Act are
confined to the process that the
Arbitrator followed. In
Telcordia Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA) it was held that
“
[50] By agreeing
to arbitration parties to a dispute necessarily agree that
the
fairness of the hearing will be determined by the provisions of the
Act and nothing else.
Typically,
they agree to
waive
the
right of appeal, which incontext means that they waive the right to
have the merits of their dispute re litigated or reconsidered.”
“
[51] Lastly, by
agreeing to arbitration the parties limit
interference
by Courts to the ground of procedural irregularities set out in s
33(1) of the
Act.
By necessary implication they waive the right to rely on any further
ground of review, 'common law' or otherwise. If they wish
to extend
the grounds, they may do so by agreement but then they have to agree
on an appeal panel because they cannot by agreement
impose
jurisdiction on the Court.”
[62]
From the Judgment on the Arbitration Award it can be read that at the
Arbitration proceedings what
was presented and was considered by the
Arbitrator were 3 invoices and 3 spreadsheets marked E “F”
and “G”
which are pages 43-50 of the bundle together with
the agreement inter alia, clause 4.5. The factual findings made with
regard to
the interaction between the 1
st
Applicant and
the 1
st
Respondent when the alterations and extras were
commissioned and correlatively attended to also informed the
Arbitrator's decision.
[63]
On presentation of these documents to the arbitration there was no
allegation
that they never came to the attention of the Applicant but
only that they are disputed. It is only the discussion on the
spreadsheets
that is denied and the receipt of invoices. However the
record does not reflect the Applicants to have sought a ruling to
compel
the provision of any further documentation or information
since the installation of the alterations and the extras were not
denied.
The Applicants had indeed made a payment already towards the
costs. In these circumstances I do not see how the manner in which
the matter was conducted can be construed to have resulted in a gross
irregularity or to the prejudice of the Applicants. If there
are any
errors committed by the Arbitrator due to the insufficiency or
discrepancy of the evidence that was before him, it can
hardly be
referred to as a gross error that would be a subject of review. The
SCA stated that an alleged irregularity must be of
such a nature that
it renders the decision reached unreasonable in the circumstances.
This is viewed from the context of
Telcordia
where it was held
at para 85 that:
“
An arbitrator ‘has
the right to be wrong’ on the merits of the case, and it is a
perversion of language and logic to
label mistakes of this kind as a
misconception of the nature of the inquiry”.
To illustrate, an
arbitrator in a ‘normal’ local arbitration has to apply
South African law but if he errs in his understanding
or application
of local law the parties have to live with it. If such an error
amounted to a transgression of his powers it would
mean that all
errors of law are reviewable, which is absurd.”
[64]
As determined in
Volkswagen SA (Ply) Ltd v Koorts NO and others,
2011 (32) ILJ 1892 (LAC), a reviewing Court is not:
“
... legally able
to give effect to the parties' requirement that a private arbitrator
render an award which is "rational and
justifiable, or any other
review standard for that matter. Unless the error thus vitiates the
award
a
review Court is bound to
measure
the
product
of private arbitration proceedings against the
narrow
grounds of
review
encapsulated in the
Arbitration
Act of
1965
” at p. 1897 A - C.
[65]
Furthermore the Applicants allege that
the 1st Respondent’s
claims were granted without the certificate of final completion being
issued or the date of final completion
established,
whereupon any
summons
or statement of claim issued for payment by the
Respondent would be
premature
and without a cause of action.
[66]
The question of the prematurity of the 1st Respondent’s claim 1
was not a subject of contention
before the Arbitrator. It did not
form part of the Applicants' defence. It therefore cannot form part
of the information from which
it can be determined whether or not the
Arbitrator committed an irregularity. The matter of the Completion
date was also not presented
to the Arbitrator as an issue that he
needed to establish in order to determine the 1st Respondent's Claim
1. The 1st Respondent
had not put any reliance on the completion date
of the contract as the basis for the due payment of the amount he was
claiming.
As a result in determining the 1
st
Respondent's
Claim 1 the Arbitrator did not ponder on the date of completion. The
Arbitrator instead referred to the relevant clause
that deals with
extras, variations, alterations and modifications, the allegations of
consent of the 1
st
Applicant, of invoices, statement with
spreadsheets of costs that were sent to the 1st Applicant on numerous
occasions, together
with the part payment and an undertaking to
settle the remaining amount which allegations were not responded to
but only noted
by the Applicants. Therefore the issues raised in
relation to this claim fall outside the ambit of a review. The dicta
made by
Harms JA in
Telcordia
with reference to
Dickenson&
Brown v Fisher's Executors
1915 AD 166
at para 55 is relevant,
where he states that:
“
the general
principle that when parties select an arbitrator as the judge of fact
and law, the award is final and conclusive, irrespective
of
how
erroneous, factually or legally, the decision
was...
unless
the mistake was
so
gross
and manifest that it could not have been made without some degree of
misconduct or partiality, in which event the award would
be set aside
not because of the mistake, but because of misconduct.” .
On refusal of Applicant’s
claim and defence (Decision based on Lateness of enquiries/claims or
contentions)
[67]
The Applicants’ defence was not
fully and
or
fairly determined in that
the arbitrator never determined or
confirmed the completion date,
yet rejected Applicant’s
claims as well as the evidence of the experts appointed by the
Applicants on the basis that they
fell outside the
timeframe
envisaged in Clause 13 of the agreement,
contrary to his finding
that the experts reports fall outside the time periods as set out in
the contract for which any defects
should be attended to /made
mention of or notice to be given to the Claimant.
[68]
The parties in presenting their evidence had agreed that the snaglist
provided was within the three
months period envisaged in clause 13.1
which determined if their conduct and claims were in line with the
provisions of their contract.
They had indicated the date of
completion from which the terms of clause 13 and 12.1 are applicable
to be in relation to occupancy
(when the Applicants moved back into
the house). They therefore had presented both their argument in that
context. The Arbitrator
also dealt with the issue of the Completion
date in the same context, as is evident from his judgment, the matter
was concluded
from the perspective that the parties themselves had
submitted to the Arbitration. The claims of the Applicant were
adjudicated
on that basis. Seemingly the Applicants are not satisfied
with the Arbitrator's interpretation of the contract in relation to
their
submission, however it can hardly be regarded as a subject of
review. The Applicants must indicate the Arbitrators conduct that
is
so gross that it had unfairly prejudiced the Applicants in the
conduct of their case that taints the award that it has to be
set
aside.
[69]
In Telcorda at 85 the court opined that:
“
Likewise, it
is a
fallacy to
label a
wrong interpretation of a contract,
a
wrong perception or application of South African law, or an incorrect
reliance on inadmissible evidence by the arbitrator as a
transgression of the limits of his power. The power given to the
arbitrator was to interpret the agreement, rightly or wrongly;
to
determine the applicable law, rightly or wrongly;
to
determine what evidence was admissible, rightly or wrongly.
Errors
of the kind mentioned have nothing to do with him exceeding his
powers;
they
are errors
committed
within the scope of his mandate. To illustrate, an arbitrator in a
'normal' local arbitration has to apply South African
law but if he
errs in his understanding or application of local law the parties
have to live with it. If such an error amounted
to a transgression of
his powers it would mean that all errors of law are reviewable, which
is absurd.”
[70]
In evaluating the exercise of a discretion by a presiding officer
to
interrogate a claim, each case must be decided on its own merits and
that no hard and fast rule can be laid down as to when
a presiding
officer ought to be satisfied with the proof of a claim. The
Applicants claim for rental was also adjudicated on the
factual
conclusions that he made from the evidence. The 1st Applicant had
testified that she stayed in a house that was made available
to her
as an estate agent. The enrolment certificate for the construction
was March 2014 and she moved back into her residence
taking
occupation in September 2014 and Certificate of Occupancy dated
12 November 2014, both dates within 6 months,
that being the
period stipulated by clause 12.1 of their agreement. She therefore
had not made a case for her Claim 1. The Arbitrator
could not have
committed a gross irregularity by making deductions from the evidence
that has been tendered by the litigants.
[71]
The Arbitrator made a decision after having taken into account the
evidence that was presented
by the parties who were both represented
by Counsel, generally accepted to be well acquainted with such
processes and obligated
to guard against any prejudicial conduct by
the Arbitrator to their clients. In their opening address the
Applicants’ Counsel
already conceded that the Applicants’
claim where delayed as a result of the provisions of clause 13. Also
having agreed
that the Applicants 'snaglist that was submitted in
December 2014 was within the scope of clause 13. The Applicants'
claim seem
to have come in only in 201 6.
[72]
It is also worth mentioning that a review of an arbitrator's award
does not deal with the
merits, but the manner in which a decision was
reached. It does not concern whether the decision was right or wrong.
An appeal,
on the other hand, amounts to a re-hearing of the matter
and the appeal tribunal is restricted to the record of the
proceedings
before it, unless the statute provide otherwise. (See
Telcordia
Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA
266
(SCA) para 85 where this court held that an arbitrator 'has the
right to be wrong'.) Therefore this ground is misconceived as a
ground to have the impugned award reviewed and set aside.
[73]
The Arbitrator held that the payments made by the Applicants indicate
that they were fully
aware of the payments being due, contrary to
clause 11.6 that states that “No payments made in respect of
work done and materials
supplied shall constitute an acceptance by
the
Customer of the adequacy or sufficiency thereof”
and
thereafter finding the enquiries made thereafter to be farfetched and
too late or due to the duration of time.
[74]
A wrong interpretation of a contract, or perception of what is the
law and its application
cannot be held to be a gross irregularity
that vitiates the award. Whether the interpretation of the agreement
is wrong or right,
or the determination of what evidence is
admissible is wrong, it cannot be a conduct that is to be classified
as a transgression
that goes beyond the limit of the Arbitrator’s
powers. The errors are still within his mandate and therefore not
reviewable:
see
Telcorda
on para 85, where it is further held
that:
“
To illustrate, an
arbitrator in a 'normal' local arbitration has to apply South African
law but if he errs in his understanding
or application of local law
the parties have to live with it. If such an error amounted to a
transgression of his powers it would
mean that all errors of law are
reviewable, which is absurd.”
[75]
At the same time the Arbitrator made a deduction that if the costs of
the extras and the
materials effected at the request of the 1st
Applicant were presented to the Applicants and they seemed not to
have a problem with
the amounts reflected therein, and also to have
actually made a part payment towards such costs with a promise to
settle the balance,
the Applicants were regarded as having acquiesced
to the costs reflected and therefore liable. The Arbitrator thus had
regarded
the enquiries made thereafter to avoid payment too late and
farfetched. Clause 11.6 is in respect of the acceptance of adequacy
of the work done or materials supplied not the costing the costs
thereof. These are deductions or conclusions that falls within
the
Arbitrator's mandate to make, whether wrongly or rightly.
Improperly
obtained
[76]
The Applicants alleged that the Engineer Compliance Certificate
relied upon during arbitration proceedings
and accepted by the
Arbitrator as authentic is fraudulent even though it is signed by the
Engineer on 30 June 2014 and countersigned
by 1
st
Respondent on 20 February 2015. The document in possession of
Ekurhuleni Municipality was
discovered by the Applicants on 25
February 2017
that it is not signed by the 1st Respondent as
owner's representative and does not have the Professional Indemnity
Insurance Policy
Number of the Engineer. Also Engineer Certificate
issued after the Occupation Certificate.
[77]
The alleged conduct was not presented before the Arbitrator and as is
indicated
by the Applicants that the facts that seem to solidify the
Applicants' allegations of fraudulent procurement of the Occupancy
Certificate
were discovered after the date of the award. It therefore
cannot impact on the conduct of the Arbitrator, the manner in which
the
Arbitrator conducted the proceedings or the award that was made.
There was no evidence led to indicate that the signing thereof
by the
Engineer and the 1
st
Respondent as alleged indeed affects
its authenticity. Prior its retraction the Arbitrator was justified
to decide on the basis
of the Certificate having assessed it from the
evidence that was presented by the parties and their witnesses. The
parties themselves
have indicated their consideration of the date of
occupation or date of issue of Occupancy Certificate as the date of
completion,
to work from with regard to the operation of Clause13.
The validity of the other certificates was also argued before the
Arbitrator
including accountability thereto, albeit that Mr Blyth's
Affidavit only came after the decision of the Arbitrator, indicating
the
withdrawal of the certificate due to a signature missing on one
of the related certificate not fraud. The information on Mr Blyth
was
not raised at the arbitration proceedings and therefore inappropriate
for the Applicants to raise it now; see
Patcor Quarries
CC
V
lssroff
1998 (4) SA 1069
(SE). The Certificate stands as long as
it is not retracted. Also as long it is not found to be invalid or
fraudulent it remains
valid and used to determine completion date.
The Arbitrator's decision might be not palatable to the Applicants
however it is devoid
of any misconduct.
[78]
In cases of fraud one party to the arbitration, through fraud or
other improper means,
obtains an Award in his or her favour. This can
either be in the form of a bribe or by misleading and false or
fraudulent representations
which lead to an Award being granted in
that party's favour.”
Moloi v Euijen and Others
[1997] 8
BLLR 1022
(LC) 1029 at E-G.72] I do not find that at the time that
the parties made their representations there was any deliberate fraud
that was alleged or committed by the 1
st
Respondent to
induce the Arbitrator to grant the Award in his favour. The
prevailing circumstances were presented by the parties
in their
evidence. The Applicants have failed to establish any misconduct on
the part of the Arbitrator or gross irregularity committed
by the
Arbitrator that could have resulted in the unfair conduct of the
proceedings which could have been prejudicial to the Applicants.
[79]
Under the circumstances the following order is made.
1. The
Applicants are granted condonation to their late filing of the Review
Application, no order as to costs.
2. The
Application for the review and setting aside of the Arbitrator's
award dated 17 November 2016 is dismissed
with costs.
3. The
Arbitration Award dated 17 November 2016 is hereby made an order of
Court.
N V KHUMALO J
JUDGE OF THE HIGH
COURT
GAUTENG DIVISION;
PRETORIA
Counsel
for Applicant: B D
Stevens
Instructed
by:
Jurgens Bekker Attorneys
Tel: 011622 5472
Ref: ACE Boerner/V
442/AB643
Counsel
for the Respondent:
Mandy Joubert
Instructed
by:
Roger Devachander
Attorneys
Tel: 012 361 3341
Ref:
sheree@rdlaw.co.za