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[2009] ZAGPPHC 10
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Shazi Developments (Pty) Ltd v Elkon Construction CC and Another (08/33274) [2009] ZAGPPHC 10 (19 March 2009)
19/3/2009
not reportable
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG, PRETORIA.)
CASE
NO: 08/33274
In
the matter between:
SHAZI
DEVELOPMENTS (PTY)
LTD
Applicant
and
ELKON
CONSTRUCTION
CC
First Respondent
VAN
DER LINDE, WILLEM
S.C.
Second Respondent
JUDGMENT
Delivered
R
D CLAASSEN J:
1.
In this application the Applicant seeks the following relief:
1.1
Declaring that the arbitrator’s (the Second Respondent’s)
appointment as arbitrator
is of no force and effect; (Clause 7)
1.2
That the referral to arbitration was not done in terms of the
contract between the parties;
1.3
That the dispute between the parties is not subject to arbitration.
Alternatively,
1.4
Firstly, in terms of
Section 3(2)
of the
Arbitration Act No. 42 of
1965
that the arbitration agreement contained in Clause 7.1 of the
Building Contract shall cease to have effect with reference to the
disputes referred to in the arbitration proceedings,
1.5
Secondly, that the Honourable Court should order that the arbitration
should commence
de novo
.
2.
At the start of these proceedings a supplementary notice of
motion
was filed amending prayer 5 of the original notice of motion so that
a further alternative be included to the effect that,
should the
other prayers not be granted, that the Applicant should be entitled
to cross-examine the First Respondent’s witnesses
that gave
evidence at the arbitration and to produce any evidence or witnesses
of its own. The supporting affidavit then also requests
authority
from the Court to alter his stance regarding a dispute between the
parties to the effect that whereas he formerly denied
that the
original building contract had been cancelled, that he now be allowed
to contend and accept the fact that it had in actual
fact been
cancelled.
3.
Second Respondent, for obvious reasons, did not take part in
any of
these proceedings and First Respondent did not wish to object to the
admission of the supplementary notice of motion because
it did not
want to waste any further time and wanted the matter to be finalised.
4.
The Applicant and First Respondent (“
Respondent
”)
concluded a written building contract on the 12
th
of
December 2006 at Johannesburg. It contained an arbitration clause.
During the construction period certain disputes and issues
arose. A
round table conference was held on the 16
th
of May 2007.
The following terms were agreed upon (I refer to
Annexure “JHH1”
at page 145).
“
Present:
Julius Lecoana, Sharon Slaughter, Martin Oosthuisen, Sarel
Stapelberg.
”
The following was
decided and agreed:
1.
Messrs Elkon Konstruksie to complete units in progress and not
start any newly allocated units.
2.
Messrs Elkon Konstruksie to complete all units currently in
progress, hand over keys as the units are completed, and complete all
of the works by no later than 29 June 2007, including cleaning of all
builder’s rubble on site. Estimated progress as on
16 May 2007
is as follows:
(Ten erven are then
referred to, which are not relevant for present purposes.)
3.
A retention of R10,000.00 per unit will be held on all the
above units, and paid into the trust account of Messrs Shazi’s
lawyers, and released as soon as the Owners signed off their 30-day
defects list. All other monies, apart from the retention will
be paid
to Elkon Konstruksie prior to handing over of keys.
4.
A retention for any civil services damaged by Elkon
sub-contractors or suppliers to be determined and kept to cover
repairs.
5.
NHBRC certificates issued under Elkon Konstruksie and need to
be cancelled: (
21 Erven are referred to which are not relevant
for present purposes
.)
A separate letter, on
Elkon’s letterhead to be directed for each and every ERF Number
to the NHBRC stating that Elkon will
not be building the units, and
requests that it be deregistered.
(Signed by: Julius
Lecuoana, Sharon Slaughter, Martin Oosthuizen, Sarel Stapelberg)”
As
indicated the document was signed by all four attendees on different
dates. Although it is alleged by Applicant’s deponent
(“
Lecoana”
). That his
signature is forged, the terms of the agreement were never disputed
(more about the forgery
later).
5.
On
31 July 2007
Respondent’s attorney wrote a letter to
the Applicant (for attention Lecoana and Slaughter). After relating
the recent past
history of the matter and the salient terms of the
agreement of 16.05.2007 it states that Applicant has “
once
again failed to comply with your obligations.
” The last
paragraph thereof, paragraph 7, reads as follows:
“
Our
instructions are accordingly to demand from you, as we hereby do,
that payment in the amount of R942,746.04 be effected to our
client
by close of business on Wednesday, 1 August 2007, failing which our
client will forthwith refer this matter to arbitration
as envisaged
in Clause 7 of the agreement of 12 December 2006.
”
(
Annexure “B” at page 65)
6
It was received by the Applicant and its attorneys replied thereto on
the
same day, admitting receipt of the letter and stating that they
will be consulting their client within the course of that week.
On
the 2
nd
of August 2007 Respondent’s attorney again
writes to Applicant’s attorney and in the second paragraph
thereof it is
stated “
Ons kliënt het
die aangeleentheid nou verwys vir arbitrasie. Die relevante
kennisgewing in hierdie verband sal ook aan u versend
word vandag
.
”
7.
Hereafter a long process ensued whereby a senior advocate from
Johannesburg,
Adv. W H G Van Der Linde, SC was appointed by agreement
between the parties by way of letters passed between the attorneys
and
obviously signed by them on behalf of their clients. More
specifically Applicant’s attorney writes to the Respondent’s
attorney on the 3
rd
October 2007. Paragraphs 5 and 6 of
the letter reads as follows:
“
5.
Our client believes that in terms of the agreement it signed with
Elkon Construction CC, the correct protocol in appointment of an
arbitrator was not, strictly speaking, followed.
6.
Be that as it may, the parties have agreed amongst themselves to
appoint an advocate to preside
as an arbitrator in this matter as the
outstanding dispute is a legal matter
”
.
8.
Applicant’s attorney then writes a letter to Respondent’s
attorneys naming five different possible counsel as arbitrators. Adv.
Van Der Linde was then agreed upon and a pre-arbitration
meeting was
scheduled and held on 9
th
of November 2007 with Adv. Van
Der Linde. At the meeting an arbitration agreement was drawn together
with the schedule of directions
by the arbitrator. This is sent
firstly to Respondent’s attorney who signed the agreement and
the schedule on behalf of the
Respondent. It was then sent to
Applicant’s attorneys who eventually did not sign the document
(
Annexure “Q”
at page 113 and further). However,
on the 28
th
January 2008 Applicant’s attorney writes
to Respondent’s attorney. Paragraphs 4 and 5 read as follows:
“
4.
With regards to the arbitration agreement, our client was reluctant
to sign the agreement and agreed
to time procedures, should he not be
in a position to obtain and procure counsel to assist in this matter.
5.
As we have informed you we have now procured the assistance of
Advocate Bothma. Advocate
Bothma however, is not available on the
11
th
of February 2008 but is available on
the 8
th
, 9
th
and
10
th
February 2008.
”
9.
Apart from all the other letters and documents this can only
be seen
as an unequivocal acceptance of the arbitration agreement. It may not
by necessity incorporate the schedule of the procedures
by the
arbitrator but that is not part of the agreement as such.
10.
Hereafter the parties exchanged pleadings. The Respondent was the
claimant and
Applicant the Respondent and the date for the
arbitration was eventually set as Friday, 8
th
February
2008. One date was then allocated. On the 5
th
February
Applicant’s attorney wrote to Respondent stating that they do
not believe the matter can proceed
inter alia
because one day
would not be enough and secondly, the question of forgery (referred
to above) had to be aired in a public forum.
In the result they
withdrew their counsel’s brief. They suggested that the matter
should be removed to a High Court for hearing.
This was not
acceptable to the Respondent and he stated clearly that they are
proceeding on the 8
th
of February. Certain events took
place on the 8
th
February. The arbitrator gave an interim
award, leaving further hearings / proceedings up to the parties.
11.
On 19 March 2008 the arbitrator convened a pre-arbitration meeting at
his chambers
for the 10
th
April 2008. The purpose was to
set further dates. Applicant’s attorney wrote that his client
is adamant that the matter must
go to the High Court for a ruling.
12.
On 15
th
April Applicant’s attorney writes to the
arbitrator and Respondent’s attorney that his client contends
that there was
no binding arbitration agreement, certain other
parties had to be joined and that the matter should be pursued in the
High Court.
13.
The arbitration eventually was scheduled to start on the 23
rd
June 2008. Applicant’s attorney appeared as also Respondent’s
attorney and advocate. The Applicant’s attitude
was explained
as follows by his attorney before the arbitrator (page 297,
Annexure
“EK 8”
).
“
Mnr
Swart: Dankie Mnr die Arbiter. Soos ek vroeër gemeld het, is die
doel van my teenwoordigheid vandag, wel ek sou sê
dit is nie
eers twee-ledig nie, dit is maar by eensydig. Die Respondent se
houding is nog steeds (1) Dat hy nie voel hy gebonde
is aan
arbitrasie nie. In sover as wat daar ‘n kontrak dan is wat op
hierdie stadium deur hom ontken word, repudieer hy dit
en hy voel dat
die arbiter vandag hom nie kan verplig om aan die arbitrasie deel te
neem nie. Dit is die eerste deel van die argument
is, kan die
Voorsittende beampte vandag ‘n bevel maak om te sê hy
moet of moes hier gewees het.
Die Respondent voel
voorts dan dat hy die geleentheid gegun moet word om ‘n
verklarende bevel te kry om dan vas te stel of
hy verplig is om te
arbitreer al dan nie. Verder wil ons dan versoek dat die Respondent,
sou die arbitrasie voortgaan vandag, die
geleentheid gegun word om
dan die getranskribeerde stukke op die verrigtinge van vandag sou hy
dit wil gebruik, gebruik om sy verklarende
bevel dan of te ondersteun
of nie en dit dink ek is die somtotaal van die submissie. So as my
teenwoordigheid verlang word sou
die arbitrasie voortgaan, wil ek vra
dat ek toegelaat word om as ‘n, ek ken nou net aan die Engelse
woord dink “observer”
in te sit, maar ons gaan geen
getuienis lei nie, ons wil ook nie inbreuk maak op enige van die
verrigtinge nie. Ons sal dan bloot
net teenwoordig wees, tensy daar
natuurlik van die teenkant af enige besware teen dit is.
...............
Arbiter: Het u enige
argumente om aan te voer oor waarom daar nie in ‘n bindende
arbitrasie ooreenkoms tot stand gekom het
nie?
Mnr Swarts: Ja, maar
die kliënt voel dat daar is wanvoeging en dan ook bedrog en hy
sal graag dit eerder in ‘n ope Hof
wil laat aanhoor. Ek het
ongelukkig geen gesag op hierdie stadium by my tot die punt nie.
Arbiter: Maar met
betrekking tot die vraag oor of daar ‘n geldige en afdwingbare
arbitrasie-ooreenkoms tussen die Eiser en
die Verweerder gesluit is,
met betrekking tot daardie vraag, wat is die Verweerder se standpunt?
Mnr Swart: Die
Verweerder se houding daar is daardie vraag kan nie vandag deur ‘n
arbiter voorgesit word nie. Die vraag moet
in die ope Hof aanvaar
word.
Arbiter: Waarom?
Mnr
Swart: Dit is ‘n interessante vraag. Die waarom is ek jammer is
ek nie op hierdie stadium reg om u antwoord op te gee
nie, maar my
instruksie is dat óf die arbitrasie voortgaan vandag of nie,
sal die Verweerder, dit sal nou eers oor twee
weke gebeur want
wanneer Advokaat Bothma terug in die land is, ‘n verklarende
bevel by die Hooggeregshof aanvra om te hoor
is hy verplig om te
arbitreer, ja of nee.
”
(sic)
14.
Further in the discussion between the arbitrator and Mr Swart, Mr
Swart confirms
that his client was ready to proceed on the 7
th
December with the arbitration and that they also had an advocate on
brief. In February 2008 however, his attitude changed and he
did not
want to proceed anymore.
15.
The arbitration then proceeded, with the concurrence of Mr Swart, to
examine
the witnesses of the Respondent that were present, without
deciding the question of enforceability of the arbitration agreement.
As stated the record of proceedings would, however, be put at the
disposal of the Applicant for further proceedings if he so wished.
16.
After these events the Applicant launched the present application. It
was initially
set down for the 8
th
December 2008 but on
that date the Applicant’s attorney informed the Court that thy
did not have an advocate and asked that
the matter be postponed. It
was granted but Applicant had to pay the wasted costs on attorney and
client scale. I shall refer to
this matter later on when dealing with
the costs.
17.
In the meantime the Applicant had obtained the services of Advocate E
Berg from
Cape Town. In a supplementary notice of motion supported by
an affidavit, the Applicant intimated that it had obtained certain
advices from Advocate Berg and therefore changed his stance regarding
the effect and standing of the original building contract
which
obviously included the arbitration clause.
18.
Regarding the Applicant’s altered attitude regarding the
proceedings,
the question now turned on the effect of the agreement
concluded on the 16
th
of May 2007. At least until the
previous hearing, the Applicant’s attitude was that main
building contract was not cancelled
or terminated. On the advice of
Advocate Berg he now maintains that that agreement of 16
th
May indeed terminated the original building contract including the
arbitration clause with the result that the whole arbitration
clause
also fell by the wayside. It is trite law that, should the building
contract be terminated, “
as if it never existed
”,
the arbitration clause would obviously also fall away and would be of
no further binding effect. The first question then
to resolve is what
the effect was of the agreement of 16 May 2007.
19.
Mr Berg’s point of departure was the manner in which the
Respondent (by
way of Mr M Oosthuizen) referred to this agreement.
Reference is made to various passages in the deponent’s
affidavit where
the deponent explicitly states that the “
termination
agreement cancels the building contract
”. He refers
inter
alia
to the following phrases in the affidavit:
19.1 “
It
was common cause that the parties agreed to terminate their
relationship on certain terms….
”
“
The nature of
the [termination] agreement …. was [that] the parties agreed
to terminate their contractual relationship on
certain terms.
”
(par 30.5 of the answering affidavit, page 221).
19.2 “
I
respectfully submit that the parties agree on what terms they will
dissolve their agreement or terminate their contractual relationship.
That is what occurred at the meeting of 16 May 2007. It was common
cause that the parties agreed to terminate the relationship
on
certain terms….. Whether or not the minute was signed is
immaterial. The content of the minute (insofar as it goes) were
agreed to.” (para 30.8, p 222)
19.3 “In
the premises on or about 16 May 2007 and at or near Johannesburg, the
parties, represented as aforesaid, met
with a view to terminating the
contractual relationship and to determine how to go about same and/or
on what terms.
” (para 8, pa 408 – Statement of Claim)
19.4 “
Save
to the extent that it was obvious and for pragmatic reasons that
certain of the terms of the agreement would still have efficacy
and
apply to unfinished obligations, the agreement between the parties
was cancelled.”( Par 9.1, page 404 – Statement
of Claim)”
Mr
Berg thus concludes that it is “
common cause”
that
the building contract was cancelled by
mutual consent.
20.
I cannot agree with this approach. Mr Berg never referred to the
terms of the agreement itself. It was clear that this was a written
agreement, signed by at least 3 of the four parties present. (The
terms thereof are not contested. In interpreting the meaning
and
effect of it full conisance must obviously be taken of the content of
the agreement.
a.
It is nowhere stated in the said agreement that the
building
contract
was cancelled or terminated.
b.
Secondly it refers in paragraph 1 and 2 thereof, to
completion
of
the works currently in progress.
c.
Thirdly, Mr Oosthuizen says, as quoted by Mr Berg in par. 3 of the
abovementioned
quotes that the agreement was to be
cancelled on
certain terms
.
d.
Lastly, it is also trite that the words used by the parties outside
and around
the agreement cannot by themselves be taken at face value
for interpreting the agreement. They must be seen against the terms
of
the contract itself and their actual conduct, it seems to me,
conveniently ignored.
When
all these references are taken together, it is very clear that the
clear intent of the agreement of 16 May 2009
was an agreement to
complete the contract,
albeit on amended terms. It can never be
said that it was intended to
cancel
the agreement, as if it
never existed. It only amended certain terms and what specificly was
to be built and what not and how payment
would be effected. Mr
Oosthuizen specifically mentioned as quoted in the fourth quote
above, that the agreement would still have
efficacy and
applied to
unfinished obligations
. For these reasons it can never be said
that the building contract was cancelled. That disposes of a great of
Mr Berg’s arguments.
21.
The next issue was the jurisdictions of the arbitrator, i,e. on the
basis that
there was no arbitration agreement. On this aspect he
raised several issues as to why the arbitration could not proceed I
will
deal with these individually.
22.1
There was no
written agreement to arbitrate and one cannot rely on an oral
agreement:
It is true that the
Arbitration Act requires
a written agreement, however the signing
thereof by the parties is not required. The law is clear that an oral
agreement is also
binding. The only difference then is that the Act
will not apply. However, an award can still be made an order of
Court.
See: LAWSA (1) (400 p
400, para 544.
In this respect Mr Swart
clearly told the arbitrator that December 2007 his client was ready
to arbitrate and had even appointed
counsel. That at least shows an
oral agreement but it goes further. Through his attorney, he agreed
to an arbitrator being appointed
differently to what it was described
in the building contract. They filed pleadings for the arbitration
and they agreed to meetings
with the arbitrator, although Applicant
did not sign the arbitrator’s agreement, as already pointed
out. His attorney, however
adopted the arbitration but not
necessarily the schedule of directions. All of the above was
confirmed and/or agreed to in writing
by and/or on behalf of the
parties. There can just be no doubt that the arbitration agreement
was in fact in writing.
22.2
The arbitration
was not called for within the time frame as specified in Clause 7.1
of the building contract:
This point also has no
merit. This point is also dealt with in paragraphs 5 - 7 above.
22.3
The
correct procedure was not followed in appointing an arbitrator:
This point also has no
merit. On Applicant’s own argument that the building contract
was cancelled, an
oral
agreement regarding Advocate Van Der
Linde was reached and confirmed in writing as already indicated. This
also clearly circumvents
the non-variation clause of the building
contract.
23.3
Lecoana’s
signature was forged:
If it is accepted that
his signature was indeed forged, the fact is still that the terms of
the agreement were never contested or
attacked. The alleged forgery
thereof is thus of no consequence. Furthermore, the signature of Ms
Slaughter, who is obviously also
a representative of the Applicant,
was never attacked.
22.5
If
fraud is alleged, it must be vented in open Court:
It is so that the Courts
have often accepted this as a good reason for staying arbitration
proceedings and referring the matter
to an open Court, it being
accepted as “
good cause
”. However, the fact is it
is for the “
accused
” (the one who allegedly
perpetrated the fraud) to ask that the matter be referred to open
Court. If he/she does not require
it, it is not for the accuser to
ask for it.
In casu
, the “
accused
” wants to
go to arbitration. From the cased quoted below, a party wishing to be
relinquished from his contract (to arbitrate)
has to show very good
reasons and in a case like the present the weight of the authority is
against the Applicant. I refer to the
following cases:
Metallurgical and
Commercial Consultants (Pty) Ltd v Metal Sales Company (Pty) Ltd
1971
(2) SA 288
(W);
Rawstorne &
Another v Hodgen & Another
2002 (3) SA 433
(W)
This point therefore also
fails.
22.6
Applicant
refused to sign the “Submission to arbitration” and a
schedule of directions thereto:
I have already indicated
that whether he signed the specific documents or not, the
terms
of the agreement (not necessarily the schedule of directions) were
accepted and signed on his behalf.
This point therefore also
fails.
22.7
Applicant’s attorney objected to the arbitration at the
time:
Mr Berg quotes the
following passage from the transcript of the proceedings: (
Annexure
“EK8”, page 297
):
“
Die
Respondent se houding is nog steeds dat hy nie voel hy gebonde is aan
die arbitrasie nie. In sover as wat daar ‘n kontrak
dan is wat
op hierdie stadium deur hom ontken word repudieer hy dit en hy voel
dat die arbiter hom vandag nie kan verplig om aan
die arbitrasie deel
te neem nie.
”
This
can only be a unilateral repudiation of the agreement to arbitrate.
Whatever was intended by what the attorney said there,
it cannot bind
the Respondent. This point fails.
22.8
Applicant
did not waive his rights in terms of the cancelled arbitration
agreement (i.e. in the building contract):
He refers to various
authorities for the trite proposition that the person waiving a right
must do so with full knowledge, appreciation
and consent. In this
respect he argues that when Swart consented to arbitration (at
whatever stage, I presume) he did so without
the knowledge,
appreciation and consent that the building contract as such was
actually cancelled (as Mr Berg has tried to argue).
Therefore the
Applicant cannot be held to the alleged waiver perpetrated on his
behalf. This argument is totally flawed. Firstly,
the building
contract was not cancelled as already set out earlier. Further, full
pleadings were exchanged between the parties
and this argument was
not raised. Only now on Mr Berg’s advice is it latched onto.
Apart from the aforegoing Applicant and
his attorney also throughout
the proceedings, until Mr Berg appeared on the scene considered the
building contract not to have
been cancelled. That means firstly, no
rights were waived and secondly, to the extent that it might have
been, it was done with
full knowledge, appreciation and consent of
all the relevant facts.
22.9
The
construction of the Guard House was not part of the building contract
therefore not subject to arbitration:
It is conceded by the
Respondent that a large portion of the evidence in the arbitration
dealt with the construction of the Guard
House which was not part of
the initial contact. However, the arbitration agreement of the
arbitrator states as follows in paragraph
1.1 and 1.2 (
Annexure
“Q”
, page 113).
“
1.1 The parties
agree to submitting to arbitration certain disputes which have arisen
between them. The nature of the disputes,
from the claimant’s
perspective, is monies due for services rendered, and from
Respondent’s perspective, contractual
penalties.
1.2
The
issues in dispute between the parties will be further refined in
pleadings, any subsequent amendments to those pleadings and
any
additional pleadings to be filed in the arbitration as may be allowed
by the arbitrator.
”
The issue of the Guard
House is raised as a first claim in paragraph 13 of the statement of
claim (page 416) and pleaded thereto
by the Applicant, on the basis
that the Applicant was not the contracting party thereto (page 432).
Since the parties agreed to
arbitrate and agreed to the issues to be
arbitrated this argument cannot be sustained.
22.10
Certain parties
need to be joined to the proceedings:
This issue was raised as
a reason not to proceed with the arbitration before the arbitrator in
June 2007. However, this point was
not even touched on in argument.
23
This in essence deals with all the arguments on behalf of the
Applicant.
They all failed. However, Mr Berg’s argument further
was that in that case his prayers in the
alternative
for
prayers 2 of the notice of motion and the additional amended prayer 5
should be considered. It is convenient now to state all
the prayers
that are now sought:
1. Declaring that:
1.1
The appointment of the Second Respondent in the arbitration
proceedings pending between the Applicant
and the First Respondent
pursuant to the provisions of Clause 7.1 of the building contract
concluded between the Applicant and
the First Respondent on 12
December 2006 (the building contract) is of no force or effect;
1.2
There has not been a timeous and/or proper referral to arbitration by
the First Respondent of
a dispute between the Applicant and the First
Respondent in the terms regulated by Clause 7.1 of the building
contract;
1.3
Any dispute between the Applicant and the First Respondent arising
out of the terms of the building
contract is not subject to
arbitration provisions contained in Clause 7.1 of that building
contract.
2.
Alternatively
and in the event of the above Honourable Court not granting the
relief sought in paragraph 1 above, an order declaring that, in
terms
of the provisions of
Section 32
of the
Arbitration Act, No. 42 of
1965
, the arbitration agreement contained in Clause 7.1 of the
building contract shall cease to have effect with reference to the
disputes
referred to in the pleadings exchanged in the pending
arbitration between the Applicant and the First Respondent.
3.
Alternatively
to prayers 1 and 2
supra
: ( the amended prayer 5)
First and Second
Respondents be and are hereby directed to allow Applicant and/or its
legal representatives, prior to the date of
the publication of Second
Respondent’s award in terms of
Section 25
of the
Arbitration
Act, Act
42 of 1965 (the
Arbitration Act):
3.1 To
cross-examine
First Respondent’s witnesses and/or expert witnesses who
testified in the arbitration proceedings pending before
Second
Respondent;
3.2 To produce evidence
(if any) of witnesses and/or expert witnesses in support of its
statement of defence and its statement of
counterclaim in the
arbitration proceedings pending before the Second Respondent.
24
It is trite that the Court has a discretion to release a party from
an
arbitration agreement on good cause shown. There was huge a
dispute as to who bears the onus in this regard, i.e. whether the
Applicant
must show that the arbitration must be stayed, set aside or
deferred or the Respondent to show cause why it should proceed.
25
Whatever the answer may be, to my mind Respondent has shown very
clearly
that Applicant has not shown any good reason not to proceed.
Of course, even if all the points raised were bad but the Court still
feels it would be in the interest of justice to stay the proceedings,
it ought to do so. However, this is not such a case. From
all the
evidence it is abundantly clear that Applicant has done everything
possible to erase the inevitable and has used every
excuse possible
(or not) to achieve that end. Therefore any prejudice that the
Applicant might suffer because of these arbitration
proceedings was
caused solely by it and/or its attorney. They have tried everything
to stall the proceedings before the arbitrator.
26
Mr Berg also submitted that should the Court be willing to grant only
the
amended prayer 5, it should order the arbitrator allow such
procedures. Regardless of the outcome of this application, I am not
prepared to be prescriptive to the arbitrator on an issue that is
particularly within his jurisdiction.
27
For the above reasons the application must fail.
28
Costs:
Respondent
asked for costs on the basis of an attorney and client as against
Applicant and his attorney jointly and severally. The
basis for this
can be summarised as follows:
1
Applicant has tried every trick in the book to delay and frustrate
the proceedings.
2
Its attorney assisted therein by giving false reasons to the court
for requesting
a postponement on 10 December 08.
The first point has
already been alluded to in the body of the judgment. The second point
needs more elucidation. At the previous
date for hearing (on the
opposed motion court roll for 8 to 12 December 2008) the matter was
placed before me by the Senior Motion
Court Judge. At the request of
the parties the matter was to be heard on Wednesday, 10
th
December 2008. That morning Applicant’s attorney made an
affidavit stating that he had problems with obtaining counsel. After
several counsel were unavailable (one of which being not to his
client’s liking) Adv. J Lambrecht was obtained. He was
available
for only the one day, being the 10
th
December.
He was briefed with the papers. Mr Swart stated in the affidavit that
Lambrecht was no longer available “
for personal reasons
”.
The Court had no choice but to grant postponement but ordered the
Applicant to pay the wasted costs on an attorney and
client scale. I
also called on Adv. Lambrecht to give reasons to the Court on the
next hearing as to why he should not be ordered
to pay the costs
jointly and severally with the Applicant.
29
Adv. Lambrecht made an affidavit. He sets out that the attorney
called
him on Sunday, 7
th
December to ask about his
availability. He was willing and able to argue the matter on the
Wednesday, 10
th
December. That was then accordingly
arranged with me. On the Monday he studied the papers. On Tuesday he
discussed the matter with
his attorney and gave his views regarding
the matter. Due to professional privilege he is not able to divulge
what the advices
were. However, the brief was immediately taken away
and his mandate terminated.
30
Adv Lambrecht filed his affidavit. Respondent’s attorney
requested
Applicant’s attorney to indicate whether they
intended to reply to Lambrecht’s affidavit or not. Eventually
(after
a second request) they declined to do so. When the matter
again came before me in the week of 23 to 27 February 2009 I was
informed
by counsel, in Adv. Lambrecht’s presence, that they do
not seek any cost order against him and he was excused.
31
There is obviously a huge difference between the two versions of
Lambrecht
and Swart. In their letter to Respondent’s attorney,
Swart, in declining to submit an answer to Adv Lambrecht, states as
follows in paragraph 2 of his letter to Respondent’s attorneys:
“
The only issued
raised seems to be the difference in the choice of wording utilised
in writer’s affidavit i.e. that Adv. Lambrecht
was unavailable
due to personal reasons and Adv. Lambrecht’s affidavit setting
out the reasons are of a privileged nature.”
32
In argument Adv. Van Der Westhuizen submitted that Mr Swart was
blatantly
lying to the Court on the 10
th
December 2008.
But he goes further. He submits that Applicant, with consent and
approval of his attorney, had all along been attempting
to delay and
frustrate the arbitration process. His whole attitude at the
arbitration proceedings and his subsequent actions show
his
deliberate attempts to delay the inevitable. The attorney had at
least since 26 November 2008 time to obtain counsel for the
week of 8
to 12 December. He submits that this shows a wilful neglect, firstly
to obtain counsel and then offers a lie to the Court
as to the reason
why his counsel “
dropped
” him.
33
To me the most serious part of this whole saga is Mr Swart’s
blatant
lie to Court. Apart from being untruthful it is also
contemptuous. What could be easier than to tell a Court that he and
counsel
did not see eye to eye on the matter and therefore could not
proceed? For that reason alone I think the attorney should also be
held responsible for the costs of the postponement together with his
client.
I
therefore make the following order:
1.
The application, including the supplementary application, is
dismissed with costs.
2.
Applicant’s attorney is ordered to pay the wasted costs
occasioned by the
previous postponement jointly and severally with
the Applicant.
R
D CLAASSEN
Judge
of the High Court