About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2015
>>
[2015] ZAGPPHC 150
|
|
Thomas t/a Torga Optical Mokopane v Heystek N.O. and Another (9631/14) [2015] ZAGPPHC 150 (25 March 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
(
GAUTENG
DIVISION, PRETORIA
)
CASE
NO: 9631/14
DATE:
25 MARCH 2015
IN
THE MATTER BETWEEN
SANDRA
THOMAS t/a TORGA OPTICAL
MOKOPANE
..........................................
APPLICANT
AND
ADVOCATE
MARIUS HEYSTEK
N.O
..........................................................
FIRST
RESPONDENT
PREFERRED
PROVIDER NEGOTIATORS
(PTY)
LTD
.....................................................................................................
SECOND
RESPONDENT
JUDGMENT
TOLMAY,
J:
INTRODUCTION
[1]
This is a review application in terms of sec 33 of the Arbitration
Act 42 of 1965 (the Act) of an award given by the first
respondent
(the arbitrator) in an arbitration instituted by the applicant
against the second respondent (“PPN”).
The applicant is
an optometrist and franchisee of Torga Optical (Pty) Ltd (“Torga
Optical”). PPN is a managed Health
Care Organization as
provided for in the Medical Schemes Act No 131 of 1998, (“the
Medical Schemes Act&rdquo
;).
[2]
The arbitrator did not oppose application and I infer from that, that
he abides by the Court’s decision.
[3]
The applicant brought an application for condonation for the late
filing of the review application, this application was not
opposed.
Therefore the application for condonation is granted.
BACKGROUND
[4]
PPN provides a managed health care service to medical schemes in
terms of
regulation 15A
of the regulations made under the
Medical
Schemes Act. Acting
in this role, PPN makes payments to service
providers (such as the applicant) with whom it has agreements. The
payments are made
in respect of claims by patients who are members
of the medical schemes with which PPN has agreements.
[5]
The background that led to the dispute between the parties was as
follows:
5.1
In 2012, Torga Optical, which is a chain of optometrists that
operates on a franchise basis, introduced a special promotion.
The
PPN agreement with Torga Optical permits Torga Optical service
providers (such as the applicant) to charge up to R400 per eye
examination, Torga Optical offered eye examinations for R100. In
2013, Torga Optical amended its offer to the public. It raised
the
price of its promotional eye examinations to R150 each, and
introduced certain terms and conditions, (“the 2013
promotion”).
5.2
PPN was willing to honor claims made by Torga Optical service
providers (such as the applicant) after the 2013 promotion came
into
effect, only if they were accompanied by a document setting out the
details of the patient and indicating whether the 2013
promotion
applied. If the 2013 promotion applied, PPN would pay R150 to
the optician in question. If the 2013 promotion did
not apply, then
PPN would pay the full R400 envisaged by the PPN agreement. The
purpose of the document was therefore to
enable PPN to ascertain
whether the 2013 promotion applied or whether the 2013
promotion did not apply.
[6]
The issue in the arbitration was whether PPN was contractually
entitled to insist on the submission by the applicant of a document
(“the disputed document”) containing patient and claim
details as a prerequisite to the payment by PPN of claims
lodged by
the applicant.
[7]
The applicant during the arbitration challenged the legality of this
practice on several grounds arising from the Participating
Service
Provider Agreement concluded between the applicant and PPN on 22
March 2009 (“the PPN agreement”).
[8]
The issue at the heart of the arbitration was whether PPN was
contractually entitled to require Torga Optical service providers
to
lodge the disputed document in order to indicate whether or not the
2013 promotion applied. The arbitrator held that PPN was
entitled to
do so, and consequently dismissed the claim.
THE
TEST APPLICABLE TO REVIEWS IN TERMS OF SECTION 33 OF THE ARBITRATION
ACT
[9]
The applicant
brought this review application in terms of sec 33 of the Act.
Section
33(1) of the Act provides as follows:
“
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”.
[10]
On a perusal of the papers it becomes clear that the applicant is of
the view that due to a variety of reasons, with which
I will deal
later, the award should be set aside because a gross irregularity
occurred as envisaged in sec 33(1)(b) of the Act.
[11]
In order to determine the issue at hand and the approach that should
be followed the requirements for the setting aside
of an award
in terms of sec 33(1)(b) of the Act should be considered. In order to
do that it must be determined what would constitute
a gross
irregularity.
[12]
When one considers a review application it is appropriate to keep in
mind that the parties by agreeing to a private arbitration
limits
interference by the Court to the ground of procedural
irregularities
[1]
. The purpose
of a private arbitration is to bring the disputes between the parties
to finality and the grounds of review should
be construed reasonably
strictly so as not to undermine the achievement of the goals of a
private arbitration
[2]
.
[13]
As a result of the fact that reviews are limited to procedural
irregularities the grounds of review envisaged in section 33(1)(b)
of
the Act relates to the conduct of the proceedings and not the result
thereof
[3]
. It is also trite
that not every irregularity in proceedings will constitute a ground
for review under section 33(1)(b) of the
Act. In order to justify a
review on this basis, the irregularity must have been of such a
serious nature that it resulted in the
aggrieved party not having his
case fully and fairly determined.
[4]
[14]
If an arbitrator misdirects himself on the law, it is in itself no
reason for the setting aside of the finding
[5]
.
An Arbitrator is always entitled to be wrong on the merits and a
wrong interpretation of an agreement will not amount to a
misconception
of the nature of the enquiry and therefore to an
irregularity.
[6]
It is stated in
Telecordia
Technologies
that:
“
[86]
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,
and 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 transgression of his powers it would mean
that all errors of law are reviewable,
which is absurd
[7]
”.
[15]
In the same matter it was also stated that the Act “
does
not allow a review for material error of law
”
and “
it
is wrong to confuse the reasoning with the conduct of proceedings
[8]
”
– in other words, unless there was something procedurally
wrong, no relief is to be had in terms of section 33(1)(b)
of the
Act.
[16]
The learned Judge in that matter continued to state:
“
Errors of
law can, no doubt, lead to gross irregularities in the conduct of the
proceedings. Telecordia posed the example where
an arbitrator,
because of a misunderstanding of the audi principle, refuses to hear
the one party. Although in such a case the
error of law gives rise to
the irregularity, the reviewable irregularity would be the refusal
to hear that party, and not the
error of law. Likewise, an error of
law may lead an arbitrator to exceed his powers or to misconceive
the nature of the inquiry
and his duties in connection herewith
[9]
.”
[17]
As already stated it is not every irregularity which would justify a
review. The court must be satisfied that the irregularity
caused a
substantial injustice. Only in those cases where it can be said that
what happened is so far removed from what could
reasonably be
expected of the arbitral process the court would be entitled to
intervene.
[18]
The ability to set aside an award due to a gross irregularity is
designed as a long stop, only available in extreme cases
where the
tribunal has gone so far wrong in its conduct of the arbitration
that justice calls out for it to be corrected.
[10]
[19]
In the light of the aforesaid this court should not ask whether the
arbitrator was correct in law or fact or whether he interpreted
the
agreement correctly, but rather look at the procedure to determine
whether any irregularity occurred which would justify an
intervention
by the court whilst keeping in mind the principles already
discussed.
THE
APPLICANT'S GROUNDS FOR THE REVIEW
[20]
The applicant advances the general proposition that the arbitrator
did not issue an award that a reasonable decision maker
would have
issued with the effect that the applicant did not have a fair trial.
It is also submitted that the arbitrator committed
a gross
irregularity by failing to take account of information relevant to
the fairness of the applicant’s trial and it
is furthermore
submitted that the arbitrator committed a gross irregularity when he
failed to understand or apply the applicable
law relevant to good
faith clauses in the contract.
[21]
Despite these general propositions the applicants’ argument
boils down to the following main points which according to
her led to
her not having a fair trial and which would accordingly constitute a
gross irregularity. It is alleged by applicant
that the arbitrator
erred by:
(a)
finding that PPN was entitled to demand that the applicant forward
the disputed document to PPN before the applicant’s
claims were
completed;
(b)
finding that a value such as good faith does not constitute an
independent substantive rule that Courts can employ to intervene
contractual relationships. It needs mentioning that the agreement
between the parties made provision that the parties to the agreement
would display the highest degree of good faith to each other in all
matters pertaining to the agreement.
(c)
not allowing cross-examination of the applicant’s witness Ms
Giulietti pertaining to the fact that she was present whilst
all the
witnesses testified on behalf of the applicant, in the light of the
fact that Mr Sutcliff of the applicant was
also present;
(d)
not taking into consideration that Ms Giulietti was a single witness
and not even mentioning this fact in his award.
[22]
Points (a) and (b) constitute criticism pertaining to the
arbitrator’s interpretation of the agreement between the
parties
and his understanding of the facts and the law. In his award
he dealt extensively with these issues and motivated his finding in
this regard. The legal position as discussed above makes it clear
that these criticisms do not constitute grounds for review and
in my
view the result is that this Court need not even consider, and
actually should not, whether the arbitrator was right or wrong.
I
can’t find that a gross irregularity occurred as a result
thereof.
[23]
This brings me to the fact that Ms Giulietti was present during the
testimony of the applicants’ case and the fact that
the
arbitrator stopped the cross- examination about this aspect. In this
regard it is important to take note of what happened at
the hearing.
The record with reference to this reflects that the following
occurred, and I quote:
“
MR
BOTHA: Are you representing PPN here today?
MS
GIULIETTI: Yes, I am.
MR
BOTHA: Or are you a witness for PPN?
MS
GIULIETTI: A witness for PPN.
MR
BOTHA: Your colleague here Mr Sutcliffe.
MS
GIULIETTI: Mr Sutcliffe ja
MR
BOTHA: Is he representing … [intervenes]
MS
GIULIETTI: He is representing PPN.
MR
BOTHA: So can I ask you why did you sit in here listening to all the
evidence?
MS
GIULIETTI: Because I am representing PPN.
MR
BOTHA: No, you just said Mr Sutcliffe is representing PPN.
MS
GIULIETTI: No, I said I am representing and I am a witness.
MR
BOTHA: You said you are a witness for PPN and Mr Sutcliffe is
representing that is what you said.
MS
GIULIETTI: No, I think your initial question was am I representing
PPN and I said yes.
MR
BOTHA: Yes and then I said are you a witness you said yes.
MS
GIULIETTI: Yes.
MR
BOTHA: Then you said Mr Sutcliffe is representing PPN but my question
is why did you sit here listening to all the evidence,
full well
knowing that you are going to testify? Now you have the advantage or
the benefit of listening to all the evidence.
Why did you do that?
MR
MARIAS: Mr Arbitrator, can I just say that she is the representative
and the co-manager and they were two and we decided that
we are going
to use her as representative and witness.
MR
BOTHA: Can I continue Mr Arbitrator?
ARBITRATOR: Yes,
no, you can continue.
MR
BOTHA: I want you to answer the question.
ARBITRATOR:
Sorry, can I just clarify one aspect. Yes, I also wanted to ask that
you said that you are the manager, are either
of you directors of
PPN?
MS
GIULIETTI: No.
MR
BOTHA: You are not a director?
MS
GIULIETTI: I am not a director of PPN, no.
ARBITRATOR: All
right. Mr Botha, I do not think you should continue with that
line of questioning.
It is so that she was present.
MR
BOTHA: Yes.
ARBITRATOR:
Obviously her lawyer allowed her to be preset.
MR
BOTHA: Yes.
ARBITRATOR: I do
not think it is fair to the witness to put it to her …
[intervenes]
MR
BOTHA: I will leave that for argument.
ARBITRATOR: That
she has been sitting in any why she has been sitting in.
MR
BOTHA: Right.
ARBOTRATOR: I do
not think it is fair to the witness.
MR
BOTHA: I will just well I wanted to have it on record of
course”.
[24]
From the above Mr Botha took issue with Ms Giulietti’s presence
during the applicant’s witness’ evidence.
According to
the evidence both she and Mr Sutcliffe represented PPN. It was
apparently decided by the legal representatives that
she would be the
representative and witness of PPN during the arbitration. The
arbitrator apparently found the question
unfair due to the fact
that the legal representatives obviously made the decision to let her
sit in and as a lay person she would
not have any understanding of
what the legal consequences of the decision could be and would not be
in a position to justify or
explain her presence. I am of the view
that the arbitrator was correct in finding that the line of
questioning was unfair under
these circumstances.
[25]
From the above it is also clear that Mr Botha, when the arbitrator
refused further questions abided by the decision
and stated
that he only wanted to put it on record. There is no indication that
the applicant may have suffered any prejudice as
a result of the
refusal to allow the question, or that it could conceivably impact on
the fairness of the trial.
[26]
In any event, and as far as it may be relevant Ms Giulietti was the
only witness called by PPN. The purpose of letting witnesses
wait
outside court is to ensure that witnesses do not adjust their version
to support one another. Ms Giulietti was a representative
and the
only witness for PPN. As such she was entitled to be present as she
had to know what case PPN had to meet. There existed
no possibility
that her evidence could be tainted as a result of her presence
during the hearing, and in my view there was nothing
untoward about
her presence during the trial. Therefore no procedural irregularity
occurred.
[27]
Much was also made of the fact that Ms Giulietti was a single
witness. The arbitrator was criticized for not referring to this
in
his award. In my view this could never constitute an irregularity by
the arbitrator as envisaged in sec 33 of the Act. The
single witness
rule is a rule that arose mainly in the context of criminal
proceedings. The purpose of the rule is rather the
common sense
approach that the evidence of a single witness may, depending on the
context, not be wholly reliable
[11]
.
In this case most of the evidence was common cause and the dispute
between the parties depended on the question of the interpretation
of the contract. The facts were to a large extent common cause.
Credibility of the witnesses or their different versions was not
central to the issue in dispute. Consequently, for as far as it is
relevant, the fact that PPN had a single witness did not play
any
significant role. It is trite that a judgment or for that matter an
award needs not deal with each and every issue raised
and the fact
that the arbitrator did not deal with this aspect does not
take the matter any further.
[28]
In the light of all the circumstances no case was made out that a
gross irregularity occurred which could result in the award
being set
aside.
[29]
PPN seeks a punitive costs order as it was alleged that the applicant
was forewarned about the futility of the application.
In a letter
PPN's attorney referred to the relevant authorities, to which I have
also referred in my judgment. Despite this the
applicant persisted in
the application. The question now arises whether the insistence to
proceed with the application under these
circumstances would justify
the court exercising its discretion to grant a punitive cost order.
It is true that the application
was ill-conceived but I am not of the
view that a punitive cost order should follow. The applicant has a
right to approach the
Court even in the light of the fact that the
case law is against him and in my view there is nothing ontoward in
the decision to
proceed with the application and a punitive cost
order is not appropriate under the circumstances.
[30]
I make the following order:
The
application for review is dismissed with costs, which include the
costs of two counsel.
______________
R
G TOLMAY
JUDGE
OF THE HIGH COURT
[1]
Telecordia
Technologies Inc V Telkom SA Ltd 2007(3) SA 266 SCA [par 51]; Lufano
Mphaphuli & Associates (Pty) ltd v Andrews
& Another 2009(4)
SA 529 CC, p599, par 235; Ramsden, South African and International
Arbitration, p 201
[2]
Lufano,
supra
p
599, par 235
3
Bester v Easigas (Pty) Limited and Another 1993 (1) SA 30 (C),
[4]
Ramsden,
supra,
p 203,
Bester
,
supra,
Patcor
Quarries CC v Issroff and Others1998(4) SA 1069 (SE).
[5]
Telecordia
supra;
Ramsden,
supra,
RPM
Konstruksie (Edms) Bpk v Robinson & Ander 1979(3) SA 632 (C)
6 Telecordia,
supra
p 297, par 67
[7]
Telecordia,
supra
,
p 302, par 86
8
Telecordia, supra
, p 300, par 76
[9]
Telecordia,
supra
,
p 297, par 69
[10]
Ramsden
supra
at page 203, footnote 968 and the authorities there cited.
[11]
Zeffert et al The South African Law of Evidence (2003) at 799 - 801