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[2014] ZAFSHC 11
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Sasol Chemical Industries Ltd v Odell and Another (401/2014) [2014] ZAFSHC 11 (20 February 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No. : 401/2014
In
the matter between:-
SASOL
CHEMICAL INDUSTRIES LTD
…...............................
Applicant
and
PETER
ODELL
…......................................................
First Respondent
E-HEL
CIVIL SERVICES (PTY) LTD
......................
Second
Respondent
HEARD
ON:
17 FEBRUARY 2014
JUDGMENT
BY:
KRUGER, J
DELIVERED
ON:
20 FEBRUARY 2014
[1]
This matter came before me as an urgent application on 17 February
2014. The reason why applicant went to court is that
the first
respondent, who was appointed as adjudicator in respect of disputes
arising from the contract between the applicant and
the second
respondent, E-Hel Civil Services (Pty) Ltd, took the view that it was
not within his power to grant the applicant an
extension of time for
it to lodge its submissions more than four weeks after the referral
date, being 17 December 2013.
[2]
The main question in this case is whether the adjudication decision
of the first respondent can be set aside because first respondent
did
not entertain a request by the applicant for an extension of time.
[3]
In terms of the dispute resolution mechanism agreed upon between the
parties, clause W1.3(3) provides that further information
is to be
provided to the adjudicator within four weeks of the referral.
In this case that means that the applicant had to
place its
information before the adjudicator before 16 January 2014. When the
referral notice of the second respondent was served
on the applicant
on 17 December 2013 the builders’ holiday had commenced and the
person dealing with this matter was on leave.
The deponent to
applicant’s founding affidavit, who worked with the contract,
says he went on leave on 14 December 2013 and
returned to work on 13
January 2014. On 14 January 2014 he requested the second respondent
for an extension and the second respondent
was not willing to accede
to such request.
[4]
On 30 January 2014 the applicant launched this application. The
relief sought in prayer 2 was that the first respondent be
interdicted from giving a decision in the adjudication and prayer 3
reads:
“
3.
That a declaratory order is made that the first respondent is
entitled to consider a request by the applicant for an extension
of
time in which to file a response or to furnish information to the
second respondent’s Referral Notice.”
[5]
The applicant explained in its papers that in terms of the contract
the first respondent was obliged to give his decision on
11 February
2014. For that reason the application was set down in the
urgent court for hearing on 10 February 2014.
The answering
affidavit was filed on 3 February 2014.
[6]
On 3 February 2014 the first respondent made his decision. This
meant that the applicant could no longer seek an order
that the first
respondent be interdicted from making his decision.
Consequently the applicant on 6 February 2014 filed a
“Notice
of Amendment of Notice of Motion” together with a supplementary
(founding) affidavit and its replying affidavit
in reply to the
second respondent’s answering affidavit.
[7]
In the Notice of Amendment of Notice of Motion the applicant stated
that it would at the hearing of this application amend prayer
2 to
read as follows:
“’
2.1
That the first respondent’s Adjudication Decision dated 3
February 2014 in the adjudication proceedings between the applicant
and the second respondent is set aside.
2.2
Alternatively to 2.1 –
That the second
respondent is interdicted from obtaining payment of the amount
awarded to it in terms of the first respondent’s
Adjudication
Decision dated 3 February 2014 and from enforcing compliance with the
Adjudicator’s Decision through legal proceedings
pending the
final determination of proceedings to set aside the first
respondent’s decision.’”
Prayer
3 in the original notice of motion remains unchanged:
“
3.
That a declaratory order is made that the first respondent is
entitled to consider a request by the applicant for an extension
of
time in which to file a response or to furnish information to the
second respondent’s Referral Notice.”
Mr
Burman in argument said that the need for the amendment of the notice
of motion arose due to the unexpected conduct of the first
respondent
in not being willing to consider the applicant’s request for an
extension. It is important to note that the Notice
of Amendment of
the Notice of Motion does not seek the court’s leave to amend.
It reads:
“
Take
notice that the applicant intends at the hearing of the application
to amend the Notice of Motion as follows:”
[8]
The applicant could just as well have said:
“
Take
notice that the relief sought by the applicant at the hearing will be
the following:”
[9]
The applicant says the first respondent was wrong in not even
considering its request for an extension.
[10]
Mr Snellenburg, on behalf of the second respondent, took three
points:
(i)
urgency;
(ii) the amendment
of the notice of motion should not be allowed;
(iii) the applicant
has suffered no prejudice, and has an alternative remedy.
[11]
The matter was fully argued before me and I am satisfied that an
urgent decision is required to avoid prejudice.
[12]
As to the amendment, the applicant states in the Heading of the
Amended Notice of Motion that the relief it will seek at the
hearing
is as set out in the amended notice of motion. These are urgent
proceedings and the applicant can amend the time
periods and
requirements as it deems appropriate, subject to what the court
hearing the matter decides is permissible. In
my view the
second respondent knew what case it had to meet.
[13]
Mr Burman, for applicant, said the real question before the court is
what the correct interpretation of clause W1.3(3) of the
contract is,
which reads as follows:
“
(3)
The Party referring the dispute to the
Adjudicator
includes with his referral information
to be considered by the
Adjudicator.
Any more information from a Party to be
considered by the
Adjudicator
is
provided within four weeks of the referral. This period may be
extended if the
Adjudicator
and
the Parties agree.”
[14]
The first respondent adopted the view that he had no power to extend
the period allowed for submissions by the applicant because
the
second Respondent did not agree to such extension, as contemplated in
the last sentence of clause W1.3(3).
[15]
The applicant’s case is that the first respondent had the power
to consider and grant an extension to the applicant.
Mr Burman argued
this on the basis of three separate and individual grounds:
(1)
The fact that clause W1.3(3) states that
the period may be extended if the adjudicator and the parties agree
does not exclude other
ways to get an extension. Mr Burman says
clause W1.3(2) contains an absolute bar:
“
(2)
The times for notifying and referring a dispute may be extended by
the
Project Manager
if
the
Contractor
and
the
Project Manager
agree
to the extension before the notice or referral is due. The
Project
Manager
notifies the extension that has
been agreed to the
Contractor
.
If a disputed matter is not notified and referred within the times
set out in this contract, neither Party may subsequently refer
it to
the
Adjudicator
or the
tribunal
.”
Mr Burman contends
that the parties could not have intended to shut the door to a party
who has not applied in time under clause
W1.3(3). That he says
would amount to an abortion of the process of adjudication.
(2)
The second basis upon which Mr Burman
contends that the first respondent’s refusal to allow the
applicant an extension has
the effect that the first respondent takes
a decision without all the information. Mr Burman relies on
bullet points 2, 3
and 4 at the top of page 46 of the papers under
clause W1.3(5):
“
(5)
The
Adjudicator
may
(1)
review and revise any action or inaction of
the
Project Manager
or
Supervisor
related
to the dispute and after a quotation which has been treated as having
been accepted,
(2)
take the initiative in ascertaining the
facts and the law related to the dispute,
(3)
instruct a Party to provide further
information related to the dispute within a stated time and
(4)
instruct a Party to take any other action
which he considers necessary to reach his decision and to do so
within a stated time.”
The adjudicator is
in charge of the proceedings, he is the master of the process.
He must see to it that he has all the information
he needs to come to
a fair decision. He has the power to obtain further
information. If he relies on clause W1.3(3)
to refuse to
consider a request for an extension he abdicates his responsibility
to come to a fair decision. The first respondent
says in his
finding that he did not have the applicant’s version to a
number of points, but closes his eyes to that.
Mr Burman
stresses that it is the duty of the adjudicator to get outstanding
information, which must include the applicant’s
version.
(3)
The last ground the applicant relies upon
to say that the first respondent should have considered its request
for an extension is
natural justice. Mr Burman says the
proceedings before the adjudicator are quasi-judicial proceedings and
the
audi alteram partem
rule
applies. The first respondent must be in a position to hear all
parties. The first respondent had the duty in law to
give the
applicant an opportunity to place its case before him.
[16]
Mr Snellenburg says the applicant has a remedy as contained in clause
W1.4, the review by the tribunal. The application for
review by the
tribunal must be made within four weeks of notification of the
adjudicator’s decision. Clause W1.4(4)
contains the
powers of the tribunal:
“
(4)
The
tribunal
settles
the dispute referred to it. The
tribunal
has the powers to reconsider any
decision of the
Adjudicator
and
review and revise any action or inaction of the
Project
Manager
or the
Supervisor
related to the dispute. A Party
is not limited in the
tribunal
proceedings to the information,
evidence or arguments put to the Adjudicator.”
Mr
Snellenburg stresses the last sentence of clause W1.4(4), that
parties at the tribunal are not limited to the evidence placed
before
the adjudicator. The applicant will have the opportunity to
place its case fully before the tribunal. This says
Mr
Snellenburg constitutes a suitable alternative remedy for the
applicant: It can place its case before the tribunal.
[17]
Mr Burman says if this court does not grant the applicant relief, the
point of not having had an opportunity to place its case
before the
adjudicator, is lost. That may be so, but the applicant is not
prohibited from placing its case before the tribunal.
CONCLUSION
[18]
Adjudication is not subject to the common law. Mr Snellenburg
referred to an unreported judgment of the Gauteng South High
Court,
Freeman and Another v Eskom Holdings Ltd
(Case No
43346/09, 23 April 2010) where the court points out that adjudication
is not arbitration. The
Freeman
case is referred to in
Tubular Holdings (Pty) Ltd v DBT Technologies (Pty) Ltd
2014 (1) SA 244
(GSJ). Both decisions make it clear that the purpose
of adjudication is to arrive at a speedy resolution of a dispute. The
proceedings
before the adjudicator are not subject to the rules of
natural justice, save in the plainest cases, as it is put in the
dictum
of the
United Kingdom Court of Appeal
quoted with
approval in para [24.4.2] of the
Freeman
case.
The parties are bound by the decision of the adjudicator and the
tribunal has the power to re-open the dispute.
[19]
Adjudication is meant to be a speedy remedy to assist cash flow and
not to hold up the contact. The finding of the adjudicator
stands
until it is set aside by the tribunal. The remedy of the applicant is
to place its case before the tribunal. Even if in
this case the
adjudicator may have made a mistake by not entertaining the request
of the applicant for an extension (and I do not
think the adjudicator
made a mistake) the adjudication stands. The strict time frames in
clause W1.3(3) accord with the intention
of adjudication as being a
speedy remedy, not subject to the rules of natural justice. The
bullet points 2, 3 and 4 on page 46
of the papers provide for further
additional information that the adjudicator may request. That
information is distinct from the
submissions dealt with in clause
W1.3(3). The proceedings before the tribunal are more in the nature
of arbitration.
[20]
The relief claimed by the applicant is a final interdict. For that
the applicant has to show a clear right, injury actually
committed or
reasonably apprehended and the absence of similar protection by any
other ordinary remedy –
Setlogetlo
v Setlogetlo
1914 AD 221
at 227.
The right the applicant relies upon is the right that the first
respondent must consider its request for more time to file
papers.
Adjudication is in its nature a summary procedure, aimed at speedy
resolution of disputes. The adjudication process exists
as a speedy
mechanism for settling disputes in construction contracts in a
provisional interim basis. Mistakes will be made by
adjudicators, but
that is inherent in the scheme of adjudication. Such mistakes can be
rectified in subsequent arbitration or litigation.
In
Bouygues
UK Ltd v Dahl-Jenson UK Ltd
[1999]
EWHC, a decision of the England and Wales High Court, Queen’s
Bench Division, Technology and Construction Court, Dyson
J made the
above points in paragraph 35 of the judgment and granted summary
judgment on an award by the adjudicator in which it
was clear that
the adjudicator had made a mistake. Other steps follow where the
applicant can again exercise its rights. In this
case the
consideration by the tribunal is a further procedure where the
applicant will have the opportunity to place the matter
before the
tribunal. On the papers the applicant has not shown that the first
respondent must consider its request. No clear right
has been shown.
[21]
As to the injury, Mr Burman says the only chance the applicant has to
raise the point that his request for an extension was
not considered
by the first respondent, is before this court. That may be so, but,
as I have indicated, applicant does not have
a clear right to demand
such indulgence by the first respondent. Further, the fact that the
applicant may not be able to raise
the point of failure to obtain the
indulgence from the first respondent before the tribunal, does not
detract from applicant’s
right to place such material as it
deems appropriate before the tribunal:
“
A
party is not limited in the tribunal proceedings to the information,
evidence or arguments put to the adjudication.”
(Clause W1.4(4))
The
applicant has not shown that it has suffered or will suffer
irreparable harm if the relief it seeks in these proceedings is
not
granted.
[22]
The third requirement for a final interdict is the absence of another
remedy. In this case the applicant’s remedy
lies in the
fact that it can place its case before the tribunal, without
limitation by what was before the first respondent.
The
applicant has failed to show that it is entitled to the relief
claimed.
[23]
The application is dismissed with costs.
____________
A.
KRUGER, J
On
behalf of applicant: Adv B.W. Burman SC
Instructed
by:
Webbers
BLOEMFONTEIN
On
behalf of second respondent: Adv N. Snellenburg
Instructed
by:
Christo
Dippenaar Attorneys
BLOEMFONTEIN
/spieterse/wm