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[2017] ZAKZPHC 3
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Snowy Owl Properties 284 (Pty) Ltd v Mziki Shareblock Ltd (6997/2015) [2017] ZAKZPHC 3 (10 February 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU
NATAL DIVISION, PIETERMARITZBURG
CASE
NO. 6997/2015
In
the matter between:
SNOWY
OWL PROPERTIES 284 (PTY)
LTD
APPLICANT
and
MZIKI
SHAREBLOCK
LTD RESPONDENT
JUDGMENT
STEYN
J
[1]
Humans have always been fascinated by wild animals. In recent years
the interest has moved from hunting them to watching them
in their
natural habitat, an act that is soothing for the soul and mind.
Central to this dispute is the exercise of the parties’
right
to traverse over the land to watch the wildlife and game on the land
situate in the KwaZulu-Natal province, an area well
known for its
astonishing wildlife.
Parties
[2]
The applicant is Snowy Owl Properties 284 (Pty) Ltd, a private
company and the respondent is Mziki Shareblock Ltd, a public
shareblock company. The parties, respectively, own the land that
includes the farms Fagolweni and Ntabankosi, which previously
constituted one single cattle and hunting farm owned by the Van
Rooyen family. The land is no longer used for farming or hunting
purposes. It has developed into a private game reserve
[1]
that enhances the opportunities to observe the game on the farms.
Mziki’s land comprises of 248 hectares, whereas Snowy Owl’s
land comprises of two farms (Fagolweni and Ntabankosi) in the extent
of 2116 hectares.
[2]
The hours during which the respondent is permitted to traverse over
the property of the applicant has led to this dispute.
Seasoned game
watchers would tell you that wild game is generally most active and
visible before sunrise and just after sunset.
Throughout the years
the applicant and respondent have distinguished between the concepts
‘night driving’ and ‘the
hours of sunset and
sunrise’ as will appear from the clauses in the servitudal
agreement below.
Relief
[3]
The following relief is sought by the applicant:
1. Interdicting and restraining the
respondent together with any and all persons who derive any right,
privilege or title through
the respondent from traversing on the
applicant’s land, being the remainder of the Farm Fagolweni,
No. 16156 situate in the
County of Zululand, Province of Natal and
the remaining extent of the Farm Ntabankosi No. 14594, between the
hours of sunset and
sunrise unless in accordance with clause 4.2.8 of
servitude K1287/1990, and more particularly unless:
1.1 the prior written consent of the
applicant has been obtained; and
1.2 under the supervision of a duly
authorised representative of the applicant; and
1.3 in accordance with such conditions
as the applicant may in its sole discretion determine; and
1.4 upon payment of the charges as are
determined from time to time by the applicant in terms of the
“current charge list”;
2. Directing that the hours of sunrise
and sunset be determined with reference to the schedule that is
attached hereto as annexure
“AA”:
3. Directing that the respondent pay
the costs of this application.
[4]
Incidental to the main application is a condonation application for
the late filing of the answering affidavit by the respondent,
which
is opposed by the applicant on the basis that there is no prospect of
success with any of the defences raised therein.
[5]
The respondent has also filed a conditional counter-application
wherein the respondent (as owner of the dominant tenement) seeks,
firstly in the event
of its procedural objection in the main
application not being upheld
, an order nullifying the legal
effect of the said condition and, secondly in the event that it is
not so nullified, further orders
to enforce the conditions of the
same registered traversing servitude in respect of the perimeter
fences on the tenements being
reinstated (clauses 4.2.3-4.2.4
thereof) and in respect of an accounting for game (clause 7 thereof).
[6]
At the time when the concise heads of argument were filed on behalf
of the respondent, the conditional counter-application was
no longer
pursued. Mr Burger SC, on behalf of the respondent, contended that
the claim was conditional and the respondent elected
to abandon the
claim and not to argue it.
[3]
The respondent was convinced, so it was argued, that the applicant
had failed in its onus and accordingly could not succeed in
obtaining
the relief sought in the main application. I shall return to this
issue later in this judgment.
In
limine
[7]
The respondent raised the following point
in
limine
,
namely that the dispute resolution clause (clause 4.3) was not
followed by the applicant which justifies a dismissal of the present
application before court. It has been contended that the relief
sought by the applicant is not for an interdict in the true sense,
but it calls for an interpretation of clause 4.2.8, which renders it
a matter of law, which should have been resolved in arbitration
proceedings.
[8]
In the light of the point
in
limine
it is necessary to
cite parts of the notarial agreement
[4]
relevant to the dispute and the issue raised. Clauses 2.4, 3 and 4 of
the agreement read:
‘
2.4
Mziki, Elimans, Catharina and Martha have agreed for mutual interests
and with the payment of certain consideration,
to
create a reciprocal servitude of traverse over the land, on the terms
and conditions hereinafter set out
.
3.
AGREEMENT
Mziki,
Elimans, Catharine and Martha hereby agree to give and grant to one
another and their successors-in-title as owners of the
land
reciprocal servitudes in perpetuity for the purpose of traverse over
all the land on the following terms and conditions:
4.
TERMS AND CONDITIONS
4.1
The right of traverse is for the purpose of only viewing wild game
and for no other purpose whatsoever.
4.2
Bearing in mind that it is intended that the land shall be traversed
for the purposes only of game viewing as provided for in
4.1, it is
agreed that the parties shall have the following rights and duties in
regard to the land, namely:
4.2.1
Mziki undertakes to maintain its land in such a condition so as to
comply with 4.2.3;
4.2.2
Each of the parties shall take all steps necessary to adequately
maintain the existing roads on its land;
4.2.3
Each of the parties shall take all steps necessary to adequately
maintain the fencing on its land to ensure that as far as
possible
the game cannot leave the area comprising all the land. In this
regard, it is recorded that there will be no boundary
fences
separating the land from each other;
4.2.4
Each of the parties shall be obliged to ensure that the external
boundaries of its land are fenced as in 4.2.3, provided that
Mziki
shall be obliged, at own expense, to erect and maintain such internal
camps within the land in which is kept any dangerous
animals or such
other wild game as in such manner as Elimans and Catharina may from
time to time decide.
Elimans
and Catharina may in their sole discretion determine that the
internal camps referred to above or certain areas thereof,
may not
during certain periods, be traversed for game viewing purposes.
It shall be incumbent upon Mziki or a holder to ensure
that the
internal camps or any portion thereof are open for game viewing
purposes before exercising its rights in terms of this
agreement in
respect of such internal camps.
4.2.5
Mziki shall not be entitled to interfere with or hinder Elimans and
Catharina in exercising its rights in respect of the land;
4.2.6
Mziki, Elimans and Catharina shall take all necessary steps to
prevent veld fires and soil erosion on their land;
4.2.7
The party using the other party’s land in terms hereof, shall
do so at its own risk;
4.2.8
Subject to 4.2.9, should the right of traverse for the purpose of
viewing wild game granted in terms of this agreement be desirous
of
being exercised by Mziki or a holder between the hours of sunset and
sunrise, such rights shall only be capable of being exercised
with
the consent and under the supervision of the duly authorised
representative of the registered owner of the land concerned
upon
such conditions as the registered owner of the land in his sole
discretion may determine and provided that a party wishing
to
exercise such right between the hours of sunset and sunrise pays the
charges as are determined from time to time by the owner
of the land
concerned in terms of the “current charge list” published
from time to time by such owner in respect of
the viewing of wild
game between such aforesaid hours
;
4.2.9
Overnight camping on any area or part of any area of the land shall
only be permitted with the consent or approval of the
registered
owner of the land concerned and in the manner and upon such
conditions as the owner in his sole discretion may determine,
provided that a party wishing to use such overnight camping
facilities pays the charges as are determined from time to time by
the owner of the land upon which the overnight camping facilities are
situate in terms of the “current charge list”
published
from time to time by such owner in respect of the use of such
facilities.
4.3
DETERMINATION OF DISPUTES
4.3.1
Any dispute, arising out of or in connection with this servitude,
including the cancellation thereof except where an interdict is
sought or urgent relief may be obtained from a Court of competent
jurisdiction, must be determined in terms of this clause
.
4.3.2
If a dispute arises, the party who wishes to have the dispute
determined must notify the other party thereof. Unless the
dispute
is resolved amongst the parties to that dispute within 30
(thirty) days of such notice, either of the parties may refer the
dispute
for determination in terms of clause 4.3.3 hereof
.
4.3.3
If a party exercises his right in terms of clause 4.3.2 to refer
the dispute for determination, such dispute shall be referred to
a
senior advocate practicing as such at any Bar, and nominated by
Elimans and/or Catharina within a period of 30 (thirty) days
of the
notice referred to in 4.3.2
.
4.3.4
The person agreed nominated as aforesaid (the expert) shall in all
respects act as an expert and not as an arbitrator.
4.3.5
Subject to 4.3.6, the expert shall decide the matter according to the
general principles of South African law.
4.3.6
The expert shall be vested with the entire discretion as to the
procedure to be followed in arriving at his decision, including
the
giving and acceptance of evidence.
4.3.7
The parties shall use their best endeavours to procure that the
decision of the expert shall be given within 21 (twenty one)
days or
so soon thereafter as possible, after it has been demanded.
4.3.8
The expert’s decision shall be final and binding on all the
parties affected thereby, and shall be carried into effect
and may be
made an order of any competent Court at the instance of any of the
parties and at his cost.
4.3.9
The provisions of this clause –
4.3.9.1
constitutes the irrevocable consent by the parties to any proceedings
in terms thereof and none of the parties shall be
entitled to
withdraw therefrom or claim that any such proceedings that it is not
bound by such provisions;
4.3.9.2
severable from the rest of this agreement and shall remain in effect
even if this servitude is terminated for any reason
whatsoever;
4.3.9.3
the senior advocate appointed in terms of 4.3.3 hereof, shall be
entitled to nominate any other person if he is of the opinion
that
such person is better qualified to determine the issue. In such
event such nominee shall be the expert for the purpose
of this
clause.’
[5]
(My
emphasis.)
[9]
Clauses 4.1 and 4.2 deal with the conditions of the servitudal right.
In terms of clause 4.1 the right of traverse is for the
specific
purpose of viewing wild game. The rights and obligations of the
parties are, in my view, set out in clause 4.2, whilst
clause 4.2.5
provides that Mziki shall not be entitled to interfere with or hinder
Elimans and Catherine in exercising their rights
in respect of the
land. Clause 4.3 of the deed of servitude regulates that a party who
wishes to have a dispute determined must
refer it to a senior
advocate who ‘shall in all respects act as an expert and not as
an arbitrator’. Clause 4.3.1 compels
a party to seek relief
through an arbitration process, unless an interdict or any urgent
relief is sought.
History
[10]
The historical background to the dispute gives context to the
existing agreement between the parties and the purpose for the
‘traverse servitude’. Snowy Owl is the successor in title
to EJ van Rooyen, CP van Rooyen and MM Moolman. When
the
servitude was registered in 1990, Snowy Owl’s owners, i.e. the
present shareholders, were not part of the negotiations,
but as
successors in title became legally bound by the servitude once they
acquired ownership of the property.
[11]
Snowy Owl purchased Fagolweni and Ntabankosi in 2003. The 1990
servitude not only binds the respective successors in title
as the
owners of the land but endures in perpetuity. Ever since the
applicant discontinued all hunting activities on its farms
and
removed the fences that enclosed various parts of the land, it became
clear to both parties that amendments ought to be sought
to the
servitudes in order to protect their rights. A proposed Code of
Conduct was suggested by the applicant but not accepted
by the
respondent.
[6]
At this juncture, for the sake of completeness, it is important to
state that in operation between the parties are three servitudes.
There is a reciprocal traversing servitude between the applicant and
respondent, a restraint servitude and a right of pre-emption
servitude. I do not consider it necessary, for purposes of this
judgment, to deal with all of the servitudes or the negotiations
and
meetings that followed over the years to draft a new Code of Conduct
between the parties that would cater for the various developments
and
needs of the parties. The inter-relationship between the parties has
been concisely summarised by the Van der Linde referee
report, para
65:
‘
One
accepts too that the relationship between the Mziki share block
scheme development on the Mziki farm and the Snowy Owl game
farming
and viewing activities, are integrated to a significant extent. Mziki
views game, Snowy Owl provides traversing rights.
Snowy Owl places
camps, Mziki constructs them. Snowy Owl culls, Mziki shares in the
spoils. Both sides fence perimeters, neither
fences internally. The
parties have joint responsibility for road maintenance, veld fire and
soil erosion control, and game levels
control. They share, to an
ostensibly appreciable extent, the profits derived from the game
farming and viewing.’
[7]
What
is relevant to the point
in
limine
however are the
rights pertaining to the traversing servitude and the interpretation
thereof
.
[12]
Since the parties decided that their disputes should be resolved by
way of arbitration as per clause 4.3 of the agreement,
it is
essential to evaluate the agreement against the relevant provisions
of the
Arbitration Act 42 of 1965
.
[8]
The content should be interpreted by applying the rules of
interpretation as it developed in recent years. In
Bothma-Batho
Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk
[9]
the Supreme Court of Appeal departed from the approach expressed in
Coopers
& Lybrand & others v Bryant.
[10]
It held in para 12:
‘
That
summary is no longer consistent with the approach to interpretation
now adopted by South African courts in relation to contracts
or other
documents, such as statutory instruments or patents. Whilst the
starting point remains the words of the document, which
are the only
relevant medium through which the parties have expressed their
contractual intentions, the process of interpretation
does not stop
at a perceived literal meaning of those words, but considers them in
the light of all relevant and admissible context,
including the
circumstances in which the document came into being. The former
distinction between permissible background and surrounding
circumstances, never very clear, has fallen away. Interpretation is
no longer a process that occurs in stages but is “essentially
one unitary exercise”. Accordingly it is no longer
helpful to refer to the earlier approach.’
[13]
In addition to the aforesaid, the Constitution
[11]
and the impact of the Constitution, especially s 34 of the
Constitution,
[12]
will be considered.
[14]
In the light of the issues raised by the respondent in its point
in
limine
, this court has to decide whether the dispute between the
parties falls squarely within the arbitration clause, and whether it
should disturb the intended process by utilising its powers. I refer
to these powers since the applicant in its alternative argument
asked
the court to utilise its powers in terms of s 3(2) of the Act.
[15]
Section 3 of the Act regulates the binding effect of an arbitration
agreement and the power of a court to interfere in relation
thereto.
The provision provides as follows:
‘
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.’
[13]
[16]
The Supreme Court of Appeal in
De
Lange v Presiding Bishop, Methodist Church of Southern Africa &
another
[14]
reaffirmed that the onus resting on a party that aims at avoiding the
consequences of an arbitration clause is not easily discharged.
It
held:
‘
Such
an onus is not easily discharged (per Colman J in
Metallurgical
and Commercial Consultants (Pty) Ltd v Metal Sales Co (Pty) Ltd
1971 (2) SA 388
(W) at 391E-F). It has been said that the discretion
of the court is to be exercised judicially, and only when a very
strong case
has been made out (
Universiteit
van Stellenbosch v JA Louw (Edms) Bpk
1983 (4) SA 321
(A) at 334A). As Nugent JA pointed out (
South
African Forestry Co Ltd v York Timbers Ltd
2003 (1) SA 331
(SCA) para 14), “good cause” is a phrase
of wide import that requires a court to consider each case on its
merits in
order to achieve a just and equitable result in the
particular circumstances.’
[15]
[17]
I align myself with the authorities listed by Gorven AJA in
Zhongji
Development Construction Engineering Company Ltd v Kamoto Copper
Company SARL
:
[16]
‘
This
Court has said that parties who refer matters to arbitration
“implicitly, if not explicitly, (and subject to the limited
power of the Supreme Court under
section 3(2)
of the
Arbitration
Act), abandon
the right to litigate in courts of law and accept that
they will be finally bound by the decision of the arbitrator”.
The
Constitutional Court dealt with the question whether section 34
of the Constitution applied directly to arbitrations. In finding
that
it did not do so, O’Regan ADCJ said:
“
The
decision to refer a dispute to private arbitration is a choice which,
as long as it is voluntarily made, should be respected
by the courts.
Parties are entitled to determine what matters are to be arbitrated,
the identity of the arbitrator, the process
to be followed in the
arbitration, whether there will be an appeal to an arbitral appeal
body and other similar matters.”
O’Regan
ADCJ went on to state pertinently that:
“
Given
the approach not only in the United Kingdom (an open and democratic
society within the contemplation of s 39(2) of our Constitution),
but
also the international law approach as envinced in the New York
Convention (to which South Africa is a party) and the UNCITRAL
Model
Law, it seems to me 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.
The international
and comparative law considered in this judgment suggests that courts
should be careful not to undermine the achievement
of the goals of
private arbitration by enlarging their powers of scrutiny
imprudently. Section 33(1) provides three grounds
for setting
aside an arbitration award: misconduct by an arbitrator; gross
irregularity in the conduct of the proceedings; and
the fact that an
award has been improperly obtained. In my view, and in the light of
the reasoning in the previous paragraphs,
the Constitution would
require a court to construe these grounds reasonably strictly in
relation to private arbitration.”
It
seems to me that the note of caution about enlarging the powers of
courts in matters concerning arbitrations, although made in
relation
to section 33(1) of the Act, applies with equal force to powers of
courts in dealing with arbitrations in general.
‘
The
need to respect the provisions of arbitration agreements was
underscored by Harms JA in
Telcordia
Technologies Inc v Telkom SA Ltd
when he decried the approach of the High Court in setting aside an
arbitration award, saying that, in doing so, the court had –
“disregarded the principle of party autonomy in arbitration
proceedings and failed to give due deference to an arbitral award,
something our courts have consistently done since the early part of
the 19
th
Century. This approach is not peculiar to us; it is indeed part of a
worldwide tradition. Canadian law, for instance, “dictates
a
high degree of deference for decisions. . .for awards of consensual
arbitration tribunals in particular.” And the “concerns
of international comity, respect for the capacities of foreign and
transnational tribunals, and sensitivity to the need of the
international commercial system for predictability in the resolution
of disputes” have given rise in other jurisdictions
to the
adoption of “a standard which seeks to preserve the autonomy of
the forum selected by the parties and to minimise
judicial
intervention when reviewing international commercial arbitral
awards.”’
[17]
(Original
footnotes omitted.)
[18]
In
Metallurgical and
Commercial Consultants (Pty) Ltd v Metal Sales Co (Pty) Ltd
[18]
the court held:
‘
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.
In
Rhodesian
Railways v. Mackintosh,
1932 AD 359
, WESSELS, A.C.J. (as he then was), held that 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 (see p. 375). The Court was there
acting under a different statute from the one before me. But the
observation of WESSELS, A.C.J., is none the less apposite here,
because it was based upon general principles. Similarly, in
Halifax
Overseas Freighters, Ltd v. Rasno Export; Technoprominport and
Polskie Linie Oceaniczne PPW (The “Pine Hill”),
1958 (2) Lloyd’s List Law Reports 146, MCNAIR, J., held that
there should be “compelling reasons” for refusing
to hold
a party to his contract to have a dispute resolved by arbitration.
JESSEL, M.R. in
Russell
v. Russell,
(1880) 14 Ch. D 411
, said that the cases in which the discretion
against arbitration should be exercised were “few and
exceptional”.’
[19]
[19]
The respondent has submitted that the relief sought by the applicant
results in an interpretation of clause 4.2.8 of the servitude,
which
means that it should be referred to arbitration in terms of the
arbitration clause. Determining the rationale for clause
4.2.8 is
done by interpreting the clause, such interpretation of the content
and construction should be regarded as a ‘matter
of law’,
and therefore the dispute should be resolved in arbitration
proceedings as intended and agreed to by the parties.
Should the
court find that the dispute is essentially all about the
interpretation of clause 4.2.8, then the point
in limine
succeeds
and the application ought to be dismissed.
[20]
The papers filed on behalf of the respondent are indicative of the
fact that the dispute has its genesis in an annual traversing
fee
that was charged by Snowy Owl in 2012 in the amount of R1.6 million.
This fee was opposed by the respondent’s shareholders.
Subsequent to various exchanges between the parties, the applicant
proffered an apology and no fee was charged. However, on Christmas
Eve 2014, the claim resurfaced in an email to Mziki shareholders.
[20]
It so happened that an appeal award that favours the respondent was
granted on 15 December 2014. The award was made an order of
court and
reflects the outcome of the appeal hearing. It provides as follows:
‘
1.
The determination of WHG Van Der Linde SC of 16 August 2014, as
amended by the Appeal Award of December 2014 by the Honourable
CT
Howie, JW Smalberger and JH Conradie JJA, is hereby made an order of
court in the following terms:
1.1
The Respondent does not
have the right to use the following farms for anything than game
farming and game viewing:
1.1.1
the remainder of the Farm
Fagolweni, No. 16156, measuring 986,9628 (nine eight six comma nine
six two eight) hectares; and
1.1.2
the remaining extent of
the farm Ntabankosi, No. 14594, measuring 1129.7840 (one one two nine
comma seven eight four zero) hectares;
1.2
The respondent does have
the right to grant the right to third parties to traverse the
properties;
1.3
The respondent does not
have the right to:
1.3.1
erect lodges on the
properties; and
1.3.2
grant the right to third
parties to erect lodges on the properties;
1.4
The respondent bears the
costs of the appeal, which costs shall include the costs of senior
counsel, the costs of the appeal venue,
if any, and the fees of the
members of the appeal panel.
2.
…’
[21]
[21]
Snowy Owl in its replying affidavit
[22]
however contends that the purpose of its application was:
‘
The
purpose of the applicant’s application is simply to interdict
and restrain the respondent from traversing on the applicant’s
land in a manner that is
inconsistent
with and/or in breach of the conditions of the Servitude
.
Put differently, the applicant wishes the respondent to comply with
the provisions of clause 4.2.8 of the Servitude before the
respondent
traverses on applicant’s land between the hours of sunset and
sunrise, and thus wishes to enforce clause 4.2.8
of the Servitude
which is an integral part of the traversing right in question.’
[23]
[22]
Mr Gautschi SC, on behalf of the applicant, has in his oral argument
for the first time relied on
De
Lange v Bell & others.
[24]
He submitted that rule 71(1) in the application before Ploos Van
Amstel J is akin to clause 4.3.1 of the servitudal agreement
in
casu
and accordingly the
court should find that the arbitrator would lack the necessary
jurisdiction to decide upon the issue. In my
view, counsel followed a
very narrow interpretation of the
De
Lange
case. Ploos Van
Amstel J in his judgment weighed and considered the management rules
and compared the wording of the management
agreement to the
provisions of the
Arbitration Act and
whether it was agreed between
the parties that a dispute relating to an interdict would be referred
to arbitration. No general
rule was proposed by the court. I am
therefore not persuaded that the
De
Lange
case supports the
applicant in its contention. What makes this case distinguishable
from
De Lange
is that the servitudal agreement
in
casu
provides specifically
for arbitration in the event of a dispute arising out of the
agreement and prescribed who should act as an
arbitrator in the event
of a dispute.
[25]
[23]
Mr Gautschi, in an attempt to explain the relief sought in terms of
prayer 2, maintained that prayer 2 is not needed by the
applicant and
was merely requested as a convenience in order to avoid future
disputes. He also conceded that the website cited
in annexure “AA”
as part of the schedule attached to the papers is no longer
available.
[24]
I was informed from the bar that the website belonged to the US Navy
and was accordingly inaccessible. This information however
was not
contained in the papers. Counsel submitted that the non-availability
of the site only became known to the applicant after
the papers were
filed. What is evident from the papers is that the applicant
sought a declaratory from this court by requesting
that the hours
between sunrise and sunset be determined with reference to a document
that is no longer available. As much as the
applicant requires the
relief in terms of prayer 2, as a convenience, it failed to make out
a case for such declarator in using
“AA”. Mr
Burger, correctly in my view, submitted that the applicant failed to
address how the typography and
location compares to the land owned by
the parties.
[25]
Mr Gautschi was at pains to steer away from any interpretation of the
agreement but had to concede that this court might have
to interpret
a part of the agreement before the interdict can be granted. He
however specified that the clause that requires interpretation
is
clause 4.3.1 and not 4.2.8. According to Mr Gautschi, clause 4.3.1
excised the jurisdiction of an arbitrator. I disagree.
It was
further argued that the matter that was previously dealt with by Adv
van der Linde and the one pending before Kuper SC,
were for
declaratory relief and not interdictory relief and hence
distinguishable from the present matter. I have carefully considered
counsel’s submission on this issue. Whilst it is true that
clause 4.3.1 pertinently excludes ‘an interdict’ or
‘urgent relief’ from the arbitration clause, it is
necessary to analyse the relief sought and determine whether the
applicant is asking for an interdict.
[26]
What applicant seeks to enforce is compliance with clause 4.2.8.
Prayer 1 mirrors the wording of clause 4.2.8. The dilemma however
is
that the parties differ on the interpretation of clause 4.3.1 which
is the clause that regulates the process of determining
a dispute.
Presently the parties disagree on the interpretation on the aforesaid
clause and its construction. This issue,
in my view, cries out
to be dealt with by an arbitrator. Having considered the argument on
behalf of the applicant, I am not persuaded
that there is an urgency
to preserve or restore any right.
[27]
[26]
Counsel for the applicant in the alternative argued that the dispute
falls within the exceptions as per
s 3(2)
of the Act. Counsel
submitted that the main application raises difficult points of law
and/or legal interpretation that need to
be decided by a court of
law. In the long heads of argument submitted to this court, it was
stated that the resolution of the dispute
will not only impact on the
present owners of the two tenements in their personal capacity, but
given the fact that real rights
are at stake, the outcome in this
matter will also affect the successors in title for years to come.
[27]
In consideration of this argument, I shall be mindful of the approach
to arbitration clauses as has been succinctly referred
to by Wallis
J, as he then was, in
Aveng
(Africa) Ltd (formerly Grinaker-LTA Ltd) t/a Grinaker-LTA Building
East v Midros Investments (Pty) Ltd
:
[28]
‘
[13]
I am fortified in this approach to clause 40 by the fact that the
modern approach to arbitration clauses is to respect
the parties’
automony in concluding the arbitration agreement, and to minimise the
extent of judicial interference in the
process. The historical desire
of courts to protect their own jurisdiction, and their consequent
suspicion of arbitration as a
means of resolving disputes, has been
replaced by a recognition that arbitration is an acceptable form of
dispute resolution with
which the courts should not interfere. As
O’Regan ADCJ said in
Lufuno
Mphaphuli and Associates (Pty) Ltd v Andrews:
“
[219]
The decision to refer a dispute to private arbitration is a choice
which, as long as it is voluntarily made, should be respected
by the
courts. Parties are entitled to determine what matters are to be
arbitrated, the identity of the arbitrator, the process
to be
followed in the arbitration, whether there will be an appeal to an
arbitral appeal body and other similar matters.”
[14]
An arbitration clause is inserted in a contract at the time of its
conclusion because the parties contemplate as a matter
of commercial
convenience that it is desirable to adopt this as a mechanism for
resolving the disputes that may arise in the course
of their business
relationship. Its construction should therefore be influenced by a
consideration of the underlying commercial
purpose of including such
a clause in the agreement. Lord Hoffman explained this in
Fiona
Trust & Holding Corporation and Others v Privalov and Others
when he said:
“
[4].
. I shall for the sake of convenience discuss the clause as if it was
a simple arbitration clause. The owners say that for
two reasons it
does not apply. The first is that, as a matter of construction, the
question is not a dispute arising under the
charter. The second is
that the jurisdiction and arbitration clause is liable to be
rescinded and therefore not binding upon them.
[5]
Both of these defences raise the same fundamental question about the
attitude of the courts to arbitration. Arbitration
is consensual. It
depends upon the intention of the parties as expressed in their
agreement. Only the agreement can tell you what
kind of disputes they
intended to submit to arbitration. But the meaning which parties
intended to express by the words which they
used will be affected by
the commercial background and the reader’s understanding of the
purpose for which the agreement
was made. Businessmen in
particular are assumed to have entered into agreements to achieve
some rational commercial purpose
and an understanding of this purpose
will influence the way in which one interprets their language.
[6]
In approaching the question of construction, it is therefore
necessary to inquire into the purpose of the arbitration
clause. As
to this, I think there can be no doubt. The parties have entered into
a relationship, an agreement or what is alleged
to be an agreement or
what appears on its face to be an agreement, which may give rise to
disputes. They want those disputes decided
by a tribunal which they
have chosen, commonly on the grounds of such matters as its
neutrality, expertise and privacy, the availability
of legal services
at the seat of the arbitration and the unobtrusive efficiency of its
supervisory law. Particularly in the case
of international contracts,
they want a quick and efficient adjudication and do not want to take
the risks of delay and, in too
many cases, partiality, in proceedings
before a national jurisdiction.
[7]
If one accepts that this is the purpose of an arbitration clause, its
construction must be influenced by whether the parties,
as rational
businessmen, were likely to have intended that only some of the
questions arising out of their relationship were to
be submitted to
arbitration and others were to be decided by national courts. Could
they have intended that the question of whether
the contract was
repudiated should be decided by arbitration but the question of
whether it was induced by misrepresentation should
be decided by a
court? If, as appears to be generally accepted, there is no rational
basis upon which businessmen would be likely
to wish to have
questions of the validity or enforceability of the contract decided
by one tribunal and questions about its performance
decided by
another, one would need to find very clear language before deciding
that they must have had such an intention.
[8]
A proper approach to construction therefore requires the court to
give effect, so far as the language used by the parties
will permit,
to the commercial purpose of the arbitration clause. But the same
policy of giving effect to the commercial purpose
also drives the
approach of the courts (and the legislature) to the second question
raised in this appeal, namely, whether there
is any conceptual reason
why parties who have agreed to submit the question of the validity of
the contract to arbitration should
not be allowed to do so.”’
[29]
(Original
footnotes omitted.)
[28]
Mr Gautschi, in support of his argument that this court should
exercise jurisdiction over the present matter, has referred
the court
to
Booz-Allen & Hamilton
Inc v Sbi Home Finance Ltd & Ors
,
[30]
a civil appeal of the Indian Appeal Court. As much as reliance was
placed on the judgment
supra
,
this court was not referred to the Indian code of civil procedure nor
was any comparative analysis conducted of the Indian civil
procedure
vis-à-vis
the
South African civil procedure. What was argued was that a right which
would affect successors in title should be dealt with
in a public
forum. In substantiating his argument, Mr Gautschi submitted that as
much as the earlier declaratory relief was sought
through the
arbitration process, the parties might have erred in referring the
disputes to an expert where the dispute involved
a right
in
rem
. I find this argument
unconvincing and without substance given the conduct of the parties
over the last few years.
[31]
[29]
The alternative submission by the applicant requires of this court to
determine whether the issue before court is so exceptional
that this
court should exercise its jurisdiction and decide upon the issue
rather than it being dealt with by an arbitration process.
Mr Burger
SC, on behalf of the respondent, has argued that the relief sought in
prayers 1 and 2 is not framed in the form of an
interdict. What is
asked of the court is to issue a declaratory which remains the
subject of arbitration.
[30]
The requirements of an interdict are well known. The Constitutional
Court in
Masstores (Pty) Ltd
v Pick ‘n Pay Retailers (Pty) Ltd
[32]
reaffirmed it:
‘
The
requirements for a final interdict are usually stated as (a) a clear
right; (b) an injury actually committed or reasonably apprehended;
and (c) the lack of an adequate alternative remedy. In order to
succeed in obtaining the remedy of an interdict against a
third party
like Masstores, Pick ‘n Pay thus had to show: (a) that the
contractual right it obtained from Hyprop protects
an interest that
is also enforceable against third parties outside the contract (part
of the “clear right” enquiry);
(b) that the third party,
Masstores, unlawfully infringed or threatened to infringe that right
(part of the “injury actually
committed or reasonably
apprehended” enquiry); and (c) that there was no adequate
alternative remedy.’
[33]
[31]
As stated earlier, a close analysis of the relief in prayer 1 shows
that the applicant wants this court to interdict and restrain
the
respondent from traversing between the hours of sunset and sunrise,
unless certain conditions are met. The servitude however
has always
provided for those conditions as per clause 4.2.8. It was always
referred to as night viewing.
[34]
The parties are however in dispute over the interpretation of the
concept sunrise and sunset. Without a declaration from this court
regarding sunrise and sunset, the relief sought under prayer 1
becomes meaningless. I am not persuaded that the mere fact that
the
relief sought is couched in interdictory terms results in it being an
interdict. To the extent that the applicant is applying
for an
interdict that is final in substance, I am not persuaded on the
papers that the applicant has succeeded to prove that it
has no
alternative remedy than an interdict to enforce its rights. The
respondent has always maintained that it takes no issue
with the
enforcement of the night driving provision, i.e. clause 4.2.8.
[32]
This brings me to the applicant’s submission that the
application is so exceptional that the court ought to use its
jurisdiction in terms of
s 3(2)
of the Act. I have referred to the
cases dealing with a
s 3(2)
application
supra
and undoubtedly
the onus that rests on a party seeking the court’s assistance
is onerous. In fact, there should be compelling
reasons not to refer
the matter to arbitration. This dispute is not complex in nature nor
has it been shown that an arbitrator
would not be able to decide upon
the content of clause 4.2.8. What would be required of the arbitrator
is to interpret a clause
in a servitude and to apply the trite
principles of interpretation as it developed. This is something
generally entrusted
to an arbitrator. The applicant, in my
view, has failed in its endeavour to prove that there are compelling
reasons not to
give effect to the parties’ wishes to have the
dispute determined before an arbitrator.
[33]
Counsel for the applicant has conceded that the relief in terms of
prayer 2 is no longer needed, so there is no need to take
it into
consideration in determining the point
in limine.
What is
apparent from the papers filed is that the content of “AA”
attached to the notice of motion was introduced to
the respondent
decades after the servitude was registered. It is significant that
the parties interpreted clause 4.2.8 of the agreement
from 1990 to
2004 without the assistance of any preferred schedule.
[34]
Finally, counsel for the applicant raised the constitutional argument
that the applicant has a right to a public hearing. In
my view the
argument is not so much based on a public hearing as it is based on
the fact that the applicant is deprived or denied
access to
court.
[35]
The Constitutional Court in
Lufuno
supra
has decided that
arbitration proceedings are regulated by law and the Constitution.
The court did not decide upon the issue whether
s 34 has any indirect
application in the case of private arbitrations.
[36]
In my view the applicant is not deprived of its access to court given
the powers of a court in terms of s 33 of the Act
[37]
to set an award aside.
[35]
In conclusion the condonation application for the late filing of the
respondent’s answering affidavit, which was opposed
by the
applicant, is granted. I am not persuaded on the grounds raised
by the applicant that it should be refused.
[36]
Accordingly the point
in limine
succeeds. In consequence
I make the following order:
The application is dismissed with
costs, including the costs consequent upon the employment of two
counsel.
…………………………
..
STEYN
J
Application
heard on: 10 August 2016
Counsel
for the applicant: Adv A Gautschi SC, Adv MM Oosthuizen SC, Adv JL
Mÿburgh
Instructed
by: Errol Goss Attorneys c/o Tatham Wilkes
Counsel
for the respondent: Adv SF Burger SC, Adv L Combrink
Instructed
by: Cliffe Dekker Hofmeyer Inc c/o Stowell & Co.
Judgment
handed down on: 10 February 2017
[1]
The Mun-ya-wana Game Reserve.
[2]
Snowy Owl is the registered owner of the servient tenement and Mziki
of the dominant tenement.
[3]
The respondent had informed the applicant of its intention formally
on 4 August 2016. See the heads of argument filed by the
respondent
that reads:
‘
5.1
The respondent no longer persists with the counterclaim, with the
result that there are no third parties potentially
affected who are
not parties to the application.’
[4]
Servitude K1287/90 registered on 27 August 1990. See LAWSA Vol 24
para 540 where a servitude is defined as:
‘
A servitude is a limited real
right that imposes a burden on movable or immovable property by
restricting the rights, powers or
liberties of its owner in favour
of either another person (in the case of a personal servitude) or
the owner of another immovable
property (in the case of a praedial
servitude). Put differently, it is a right of one person in the
property of another entitling
the former either to use and enjoy
that person’s property or to prevent the latter from
exercising certain entitlements
flowing from the normal rights of
ownership. The fact that a servitude confers a real right on its
holder distinguishes it from
contractual rights with a similar
content against an owner of property.’
[5]
The entire notarial agreement of servitude appears at pages 240 to
257.
[6]
See page 301.
[7]
See pages 598 and 599.
[8]
Hereinafter referred to as ‘the Act’.
[9]
2014 (2) SA 494
(SCA). Also see
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) and
Unica
Iron & Steel (Pty) Ltd & another v Mirchandani
2016 (2) SA 307
(SCA) where Leach JA held at para 21:
‘
In considering the validity of
this argument, it is unnecessary to deal in any depth with the
principles applicable to the interpretation
of contracts. They must
now be regarded as well settled, particularly in the light of recent
judgments of this court in cases
such as
KPMG Chartered
Accountants (SA) v Securefin Ltd and Another
2009 (4) SA 399
(SCA) ([2009
2 All SA 523
;
[2009] ZASCA 7)
;
Ekurhuleni
Metropolitan Municipality v Germiston Municipal Retirement Fund
2010 (2) SA 498
(SCA) ([2009] ZASCA 154);
Bothma-Batho Transport
(Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk
2014 (2)
SA 494
(SCA) ([2013] ZASCA 176);
North East Finance (Pty) Ltd v
Standard Bank of South Africa Ltd
2013 (5) SA 1
(SCA) ([2013]
ZASCA 76); and, most recently,
Novartis SA (Pty) Ltd v Maphil
Trading (Pty) Ltd
[2015] ZASCA 111.
As Lewis JA stated in
North
East Finance:
“
The court asked to construe a
contract must ascertain what the parties intended their contract to
mean. That requires a consideration
of the words used by them and
the contract as a whole, and, whether or not there is any possible
ambiguity in their meaning,
the court must consider the factual
matrix (or context) in which the contract was concluded.”
All that needs to be added
is that
it can be accepted that the way in which the parties to a contract
carried out their agreement may be considered as part
of the
contextual setting to ascertain the meaning of a disputed term
–
see eg
Rane Investments Trust v Commissioner, South African
Revenue Service
2003 (6) SA 332
(SCA)
(2003 (8) JTLR 216
;
65
SATC 333
;
[2003] 3 All SA 39)
para 27. As is stated in Christie &
Bradfield
Christie’s The Law of Contract in South Africa
6 ed (2011) at 117, relying upon
Breed v Van den Berg and Others
1932 AD 283
at 292-293, this is because the parties’
subsequent conduct “may be probative of their common intention
at the time
they made the contract”.’
(My
emphasis.)
[10]
1995 (3) SA 761 (A).
[11]
The Constitution of the Republic of South Africa, 1996.
[12]
See
Lufuno Mphaphuli &
Associates (Pty) Ltd v Andrews & another
2009 (4) SA 529 (CC).
[13]
Section 3 should be read with s 1 of the Act that defines an
‘arbitration agreement’ as: ‘a written agreement
providing for the reference to arbitration of any existing dispute
or any future dispute relating to a matter specified in the
agreement, whether an arbitrator is named or designated therein or
not.’
[14]
2015 (1) SA 106 (SCA).
[15]
Ibid
para 23.
[16]
[2014] 4 All SA 617 (SCA).
[17]
Ibid
paras 56 to 57.
[18]
1971 (2) SA 388 (W).
[19]
Ibid
at 391E-H. Also see
Universiteit
van Stellenbosch v JA Louw (Edms) Bpk
1983 (4) SA 321
(A) at 333H-334C.
[20]
See email from Anton Louw at 616 that reads:
‘
To the Mziki Shareblock Board
and Mziki Shareblock Members,
I write to you on the instructions of
the Directors of Snowy Owl.
In accordance with Paragraph 4.2.7 of
the Notarial Agreement of Servitude, please note that with immediate
effect there will be
no driving on the Snowy Owl properties after
sunset and before sunrise.
All Mziki vehicles must be back at
Mziki Shareblock by sunset at the latest and may resume traversing
at sunrise the following
day…
…
For certainty, we have applied the
earliest sunrise times and latest sunset times for the period
December 2014 to December 2015,
as set out in the table below:
…
Please ensure that all of the Mziki
Shareblock members are made aware of the contents of this email.’
[21]
See pages 614 and 615.
[22]
To the extent that the applicant seeks interdictory relief by way of
motion, the trite rules of practice find application. See
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) para 26:
‘
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 the 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. The court below did not have regard to these
propositions and
instead decided the case on probabilities without
rejecting the NDPP’s version.’
(Original
footnotes omitted)
[23]
See page 736.
[24]
(013203/12) [2013] ZAKZDHC 36 (6 August 2013).
[25]
See clause 4.3 of the agreement.
[26]
Cf. s 21(1)(f) of the Act.
[27]
Cf.
Brink v Van Niekerk en
‘n ander
1986 (3) SA
428 (T).
[28]
2011 (3) SA 631 (KZD).
[29]
Paras 13 and 14.
[30]
Civil Appeal No. 5440 of 2002, 15 April 2011, [2011] 7 S.C.R. 310.
[31]
See pages 581 to 613 and 320 to 321.
[32]
2017 (1) SA 613 (CC).
[33]
Ibid
para 8.
[34]
See para 52 of the referee report at 594.
[35]
See s 34 that reads:
‘
34. Access to courts. –
Everyone has the right to have any dispute that can be resolved by
the application of law
decided in a fair public hearing before a
court or, where appropriate, another independent and impartial
tribunal or forum.’
[36]
See
Lufuno supra
para 215.
[37]
Section 33 of the 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.
(2) An application pursuant to
this section shall be made within six weeks after the publication of
the award to the parties:
Provided that when the setting aside of
the award is requested on the grounds of the commission of an
offence referred to in
Part 1 to 4, or section 17, 20 or 21 (in so
far as it relates to the aforementioned offences) of Chapter 2 of
the Prevention
and Compating of Corrupt Activities Act, 2004, such
application shall be made within six weeks after the discovery of
that offence
and in any case not later than three years after the
date on which the award was so published
(3) The court may, if it
considers that the circumstances so require, stay enforcement of the
award pending its decision.
(4) If the award is set aside
the dispute shall, at the request of either party, be submitted to a
new arbitration tribunal
constituted in the manner directed by the
court. ‘