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[2011] ZAGPPHC 212
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Quondisa Development Facilitators CC v Regenass and Another (49702/10) [2011] ZAGPPHC 212 (8 December 2011)
NOT
REPORTABLE
IN
THE HIGH COURT NORTH GAUTENG,
PRETORIA
REPUBLIC OF SOUTH AFRICA
CASE
NUMBER :49702/10
DATE:08/12/2011
In
the matter between:
QUONDISA
DEVELOPMENT FACILITATORS
CC
.................................................
APPLICANT
and
HEINRICH
REGENASS
.........................................................................
FIRST-RESPONDENT
CORPORATE
& SOCIAL MARKET RESEARCH CC
........................
SECOND RESPONDENT
JUDGEMENT
BAM
AJ
1.
The applicant and the second respondent were parties in an action
adjudicated by an arbitrator, the first respondent. The first
respondent, in accordance with his mandate completed a Financial
Report which is now the center of dispute between the parties.
2.
The applicant, dissatisfied with the award in the Financial Report,
applies to this Court for the following relief:
(i)
That the late filing and service of this application be condoned in
terms of
section 33(2)
of the
Arbitration Act 42 of 1965
;
(ii)
That the Financial Report of the First Respondent, dated 10 October
2009 be reviewed and set aside in terms of section 33 of
the
Arbitration Act 42 of 1965.
(iii)
That the disputes between the parties (as set out in the founding
affidavit) be resolved by way of the action brought in this
Court
under case no 08/2162.
(iv)
That the first respondent pay the costs of the applicant in bringing
this application;
(v)That
t he second respondent pay the costs of the applicant in bringing
this application only in the event of it opposing the
application.
Both
respondents oppose the application.
3.
The applicant's application for condonation for the late bringing of
this application is brought in accordance with the provisions
of
section 33 of the Arbitration Act 42 of 1965 (the "Act").
The application should have been brought within six weeks
in terms of
the said section. This did not happen. The period of six weeks
expired before the end of May 2010 in view of the fact
that,
according to the applicant, the arbitration award became final on 9
April 2010.
4.
The applicant avers that he was out of town from 12 May to 23 May
2010, he visited Germany, and, on his return he consulted
with
counsel regarding the contents of the first respondent's letter dated
31 March 2010 concerning the first respondent's contention
that no
further work could be done by him concerning the dispute 'as it is a
legal argument'. Correspondence between the parties
followed
pertaining to the issue whether second respondent insisted that a
tacit agreement existed between the parties regarding
the issue
whether over-expenditure on the budget was permitted or not.
According to the applicant the situation developed to the
point, as
suggested by the applicant, that if second respondent insisted that
such an agreement indeed existed, then the matter
would have to be
resolved by the Court. In a letter dated 2 June 2010 the second
respondent's attorneys rejected the said suggestion
and informed the
applicant's attorneys on 19 July 2010 that an application to enforce
the first respondents report would be lodged,
which application was
served on the applicant's attorneys on 3 August 2010, after the
expiration of the six weeks deadline.
5.
The first respondent, however denies the averments of the applicant
regarding the tacit agreement and contended that his letter
of the
31st March clearly stated that should nothing happen or further
inputs be made by the parties on 9 April 2010 his finding
of 10th
March, the date of the Financial Report, would be final.
Apparently
the applicant's attorneys were only informed of the situation, by
their correspondent attorneys, on 16 August 2010, which
further
delayed the issue. The applicant also stated that he had to go to
Malawi on 4 July 2010 on family business, which caused
a further
delay.
6.
The provisions of
section 33
of the
Arbitration Act, no 42 of 1965
read 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 himself in relation to his
duties as arbitrator or umpire; 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"
1.
In terms of a written agreement entitled "AGREEMENT TO APPOINT
INDEPENDENT AUDITOR" between the applicant and the second
respondent, the first respondent was appointed " as the Auditor
to perform a forensic audit on the disbursements and work
done by
each party on behalf of the joint venture and to ascertain the exact
amount due and payable by each party in terms of the
itemized Budget
(Annexure 02 to the Defendant's Plea) of the joint venture and the
agreement concluded between the parties on 13
August 2007 as well as
the contract for consulting services between the German Agency for
Technical Co-operation and the Defendant
on behalf of the joint
venture (Annexure B to Plaintiff's Particulars of Claim) and any
subsequent agreements applicable."
8.
The applicants' grounds for the review of the award was put as
follows in the applicant's supplementary heads of argument:
(I)
"The applicant's complaint in the present matter is that the
First Respondent failed to apply his mind properly to the
issue of
whether or not it had been agreed between the parties that over
expenditure on the budget of the project could be covered
by other
line items in the budget where there were savings."
9.
The first respondent's mandate inter alia involved meetings and
discussions with both
the applicant and the second respondent
separately in order to discuss how money
received from the German
Agency for Technical Co-operation ("GTZ") should
be
allocated.
According
to the applicant the first respondent was informed by the applicant
that a final instalment of R20S 320.34 was used by
the applicant to
finalize the report as authorized by GTZ at the end of January 2008,
after the second respondent sent his resignation
to GTZ. According to
the applicant it was further informed by GTZ that the applicant was
responsible for the finalization of the
project and authorized that
the said amount be used to pay for the costs of finishing the task.
The payment was made to the applicant
for the said purpose and dealt
with accordingly.
The
applicant averred that it's instructions to the first respondent to
allocate the said amount as an expense for the applicant
was refused
because first respondent decided that professional fees paid out for
finalizing the work could not be regarded as an
expense which,
according to the applicant, is an incorrect interpretation of project
management and project budget administration.
10.
The applicant blames the first respondent for not having determined
what had been agreed between the applicant and the second
respondent
whether or not over-expenditure could be recovered by other line
items in the budget where there were savings. The applicant
alleges
that the first respondent ignored the fact that GTZ, as stipulated in
the Itemized Budget had to authorize over-expenditure
on the line
items, which is allegedly a further irregularity committed by the
first respondent. According to the first respondent
the applicant
only raised the issue that there had been no agreement between the
parties after the filing of his report on 9 April
2010.
11.
The first respondent pointed out that the par 3 of the initial
agreement between the applicant and the second respondent, attached
to the applicant's founding affidavit as annexure MM5, reads as
follows:
"3.
Payment
In
the event of the bid submitted by QDF-CSR joint venture being
accepted by GTZ, CSR and QDF shall agree on the financial framework
for the project with the condition that such agreement shall
primarily cover all costs associated with the execution of the bid.
It
is furthermore agreed that the financial framework agreement shall
remunerate each joint venture partner for work executed in
relation
to the execution of the approved bid."
With
reference to the above quotation it was contended by the first
respondent that at the time the parties entered into the aforesaid
agreement all details of the financial framework envisaged in the
agreement, has not as yet been finalized and it is clear from
the
contents of paragraph 3, that it was anticipated that the parties
will finalise the details of the financial framework, once
the bid
has been accepted or at the very least somewhere in future."
12.
The first respondent, to my mind adequately explained in his opposing
affidavit how he came to the conclusion to finalise the
Financial
Report containing the award. It is clear to me that the first
respondent, apart from consulting with the parties also
had access to
all the relevant documentation.
13.
The ultimate question that had to be addressed was whether the award
was fair given the circumstances of the case. See Lefuno
Mphapuli and
Associates (Pty) Ltd v Andrew and Another 2009{4) SA 529 CC.
14.
The first respondent granted the applicant and the second respondent
the opportunity to supply him with further instructions
before the
award was regarded as having been finalized. The applicant's argument
that the first respondent only decided after his
final report whether
the footnote at the bottom of the budget framework was included in
the agreement between the parties or not,
does not seem to be
correct. The first respondent's alteration of the award prior to the
final date indicates to me that the first
respondent In fact gave
heed to the said footnote before the finalization of the award.
15.
After having considered the allegations of the applicant contending
that the award by the first respondent should be reviewed
and set
aside as a result of the irregularities allegedly committed by the
first respondent, and having taken into account the
response of the
first respondent and the arguments of counsel I am of the opinion
that the applicant's application is without merit.
I could find no
reason to say that the first respondent did not properly apply his
mind or that he acted irregularly in any way
or that the award is
unfair.
16.
Although the applicant's application for condonation should succeed
the application for the review of the award and the other
relief
sought by the applicant cannot succeed.
Accordingly
the application is dismissed with costs.
A J BAM
ACTING
JUDGE OF THE HIGH COURT