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[2020] ZASCA 74
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Namasthethu Electrical (Pty) Ltd v City of Cape Town and Another (201/19) [2020] ZASCA 74 (29 June 2020)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 201/19
In
the matter between:
NAMASTHETHU
ELECTRICAL (PTY)
LTD
APPELLANT
and
CITY OF CAPE
TOWN
FIRST RESPONDENT
JAMES ROBERT GARNER
NO
SECOND RESPONDENT
Neutral
Citation:
Namasthethu Electrical
(Pty) Ltd v City of Cape Town and Another
(Case no 201/19)
[2020] ZASCA 74
(29 June 2020)
Coram:
NAVSA, MBHA, MOLEMELA, PLASKET and NICHOLLS JJA
Heard:
13 May 2020
Delivered:
This judgment was handed down electronically by
circulation to the parties’ legal representatives by email,
publication on
the Supreme Court of Appeal website and release to
SAFLII. The date and time for hand-down is deemed to be 09h45 on 29
June 2020
Summary:
Contract-
Application for declaration
that contract pursuant to tender vitiated by fraud validly terminated
– arbitration clause in
a contract does not survive termination
of contract induced by fraudulent misrepresentation –
determination by arbitrator
following adjudication process in terms
of arbitration clause consequently liable to be set aside.
ORDER
On
appeal from
: The Western Cape Division
of the High Court, Cape Town (Boqwana J sitting as court of first
instance): judgment reported
sub nom
City of Cape Town v Namasthethu Electrical (Pty) Ltd and Another
[2018] ZAWCHC 150
;
[2019] 1 All SA 634
(WCC)
The appeal is dismissed
with costs on the scale as between attorney and client, such costs to
include the costs attendant upon the
employment of two counsel.
JUDGMENT
Mbha JA (Navsa,
Molemela, Plasket and Nicholls JJA concurring):
[1]
This appeal turns on the question whether a dispute resolution clause
in a contract survives the termination of that contract
on the ground
of fraudulent misrepresentations made during a tender process. More
specifically, it raises the following issue:
Does the clause in the
contract in question requiring the parties to submit any dispute
between them to arbitration or other adjudication
process, bind the
aggrieved party in an instance where the contract has been induced by
fraud? The Western Cape Division of the
High Court, Cape Town
(Boqwana J, sitting as court of first instance), having found that
the contract had been induced by fraudulent
misrepresentations by the
appellant, held that a dispute resolution clause in a contract did
not survive the termination of the
contract for fraud. Thus, the High
Court also set aside a determination made by the second respondent,
Mr James Garner (Garner),
following an adjudication process in terms
of the dispute resolution clause in the contract. The appellant,
Namasthethu Electrical
(Pty) Ltd (Namasthethu), appeals against these
findings with leave of the court a quo. The background is set out
hereafter.
[2]
On 7 March 2014 the first respondent, the City of Cape Town (the
City), advertised a tender for the supply, retrofit and installation
of energy efficient luminaries at the Cape Town Civic Centre. On 25
August 2014, the City awarded the tender to Namasthethu. The
tender
had an estimated value of R29 263 401.75, excluding VAT,
and its execution was contemplated to take 18 months.
During November
2014 a written agreement following on the tender was concluded
between the City and Namasthethu. That agreement
is the contract at
the centre of this appeal.
[3]
On 17 September 2014 an unsuccessful bidder, Citrine Construction
(Pty) Ltd (Citrine), a competitor in the tender process, sought
to
appeal the award of the tender to Namasthethu and called on the City
to set aside the award of the tender. Citrine complained
that
Namasthethu and its directors had been convicted of fraud and
corruption on 13 August 2013, arising from a complaint by the
Construction Industry Development Board (the CIDB). The City was
informed that Namasthethu and its directors were consequently
sentenced to a fine of R200 000 coupled with a wholly suspended
sentence of 5 years’ imprisonment. This was the basis
of the
appeal.
[4]
The significance of the complaint located in the appeal in relation
to the present dispute lay in the fact that in its tender
submission,
Namasthethu had completed an official tender document declaring that
neither it, nor any of its directors, had in the
past five years been
convicted of fraud by a court of law. If the allegations by Citrine
were true, it would mean that Namasthethu
was guilty of a fraudulent
misrepresentation. In terms of clause 36.1.3 of the contract, the
City was entitled to terminate it
where Namasthethu had committed a
corrupt or fraudulent act during the procurement process, or in the
execution of the agreement.
[5]
Citrine's complaint, however, was admittedly submitted outside of the
time permitted for appeals in terms of s 62 of the
Local
Government: Municipal Systems Act 32 of 2000
.
[1]
The
City therefore did not regard it as a valid appeal. But it could not
ignore the complaint.
[6]
On 25 November 2014, the City sent a letter to the appellant, stating
that it had come to its attention that Namasthethu Electrical
(Pty)
Ltd t/a Nationwide Electrical and/or its directors during August 2013
had been found guilty on charges relating to fraud
and corruption.
Namasthethu was required to respond.
[7]
Namasthethu responded by letter dated 27 November 2014, written by
one S Chetty, indicated to be the chief executor officer
of
Namasthethu, stating that neither it nor its sole director, S Chetty,
had been convicted of fraud and corruption during August
2013. The
letter also confirmed that Namasthethu was cited as a respondent in
civil proceedings that had since been finalised,
but that no order
had been made against it.
[8]
The City replied to Namasthethu on 3 December 2014, stating that it
had now received information from the CIDB which indicated
that
Namasthethu and/or its directors had on 13 August 2013 been found
guilty, in terms of a plea and sentence agreement, entered
into under
s 105A
of the
Criminal Procedure Act 51 of 1977
, on various
charges of fraud and corruption. The information indicated further
that Namasthethu and/or its directors were sentenced
to a fine of
R200 000 plus five years' imprisonment, the latter of which was
suspended on certain conditions. Namasthethu
was notified that the
matter would be referred to the City's Forensics, Ethics and
Integrity Department (FEID) for further investigation
and it was
requested to furnish a response within seven days. The FEID was
formally instructed by the City on 9 December 2014 to
investigate the
allegations against Namasthethu.
[9]
Namasthethu responded to the City's letter on 12 December 2014,
stating that the sole director of Namasthethu at the time
of the
tender was Mrs Shamla Chetty. Reference was also made to an attached
letter, ostensibly written by one Colonel K Naidoo
of the South
African Police Service (SAPS) Anti-Corruption Task Team, which
recorded that no criminal conviction was obtained against
Namasthethu
or Chetty under criminal matter PMB CAS 611/5/2012 or case number
41/66/2013, as well as that 'Shamla Chetty was not
an accused at the
finalisation of the criminal matter . . .'.
[10] FEID's forensic
investigation into Namasthethu took a long time and was completed
around the beginning of 2016. In its report
to the City Manager,
dated 26 February 2016, FEID confirmed that there had been a number
of false misrepresentations and other
fraudulent conduct on the part
of Namasthethu. It was inter alia stated in FEID's report that:
‘…
Namasthethu
and its directors (S Chetty and R Chetty) were criminally charged
with fraud and corruption [while] Namasthethu, under
the trading name
of Nationwide Electrical and R Chetty, who at all relevant times
acted as a director, were convicted in the Commercial
Crimes Court in
Pietermaritzburg on 7 November 2013, less than [a] year prior to the
date of the tender application on 240Q/2013/2014.
…
Shamla
Chetty [the wife of R Chetty] made a prima facie misrepresentation to
the City when she stated in the negative on the tender
declaration to
the question whether any of the directors or the company/entity has
been convicted by a court of law for fraud or
corruption during the
past five years. This amounts to fraud.
…
S
Chetty in her tender submission provided the City with a local
business address for Namasthethu as 7 15th Avenue, Kensington,
which
was discovered to be false. Furthermore it was established that the
service provider operates from three containers located
at the Civic
Centre parking area on Hertzog Boulevard, Cape Town.’
As
a result of these findings, the FEID recommended the termination of
the contract. It also recommended the lodgement of a criminal
case of
fraud with the SAPS against S Chetty, R Chetty and Namasthethu for
the misrepresentations relating to information contained
in the
tender submission.
[11]
On 15 March 2016, the City wrote to Namasthethu informing it that the
contract was being cancelled with immediate effect because
Namasthethu had committed fraudulent acts during the tender process,
which had resulted in the tender being awarded to it. The
City
specifically referred to Namasthethu's failure to disclose the
conviction for fraud and corruption in November 2013 in the
Pietermaritzburg Commercial Crimes Court and the fact that it had
provided a local business address which was fictitious.
[12] Namasthethu disputed
the cancellation in correspondence which it sent to the City without,
however, addressing or challenging
the specific fraud allegations
against it, and thus the City's reasons for cancellation of the
contract. Its focus was to insist
that the dispute surrounding the
City's cancellation of the contract be adjudicated in accordance with
the dispute resolution procedure
specified in the contract. It is
necessary, at this stage, to have regard to the relevant clauses:
‘
40.1
Should any disagreement arise between the employer or his principal
agent or agents, and the contractor arising out of or concerning
this
agreement or its termination either party may give to the other to
resolve such disagreement.
40.2 Where such
disagreement is not resolved within ten(10) working days of receipt
of such notice it shall be deemed to be a dispute
and shall be
referred by the party giving such notice to either,
40.2.1 Adjudication where
adjudication shall be conducted in terms of the JBCC Rules from
Adjudication current at the time when
the dispute was declared.
Or
40.2.2
Litigation…’
[13]
In keeping with its stance that the dispute surrounding the
cancellation of the contract, which in its view was purely a legal
matter, be adjudicated in accordance with the dispute adjudication
clause, Namasthethu suggested as potential adjudicators three
senior
counsel at the Cape Society of Advocates. The City, however,
persisted in contending that the contract was validly cancelled
on 15
March 2016, and that Namasthethu's insistence on referring the matter
to adjudication, in the face of its fraudulent conduct,
was
inappropriate. Thereafter Namasthethu approached the Association of
Arbitrators Southern Africa, which then appointed Garner,
a
construction consultant and surveyor, as adjudicator.
[14]
The dispute which Namasthethu purported to refer to adjudication, and
in respect of which the Association of Arbitrators was
asked to
appoint an adjudicator, concerned the validity of the City's
cancellation of the contract. However, this dispute did not
feature
as a self-standing issue in Namasthethu's Statement of Claim. Neither
did it feature as a prayer for relief. It was instead
couched as a
component of Namasthethu's claim for damages in relation to a
contract which it claimed to have cancelled lawfully
in the face of
the City's alleged repudiation.
[15]
Garner prepared a determination on the basis of the Statement of
Claim, and the documents sent to him by Namasthethu, but without
hearing evidence. In that determination, the second respondent upheld
various claims by Namasthethu and found the City liable to
Namasthethu for damages in the amount of R516 671.04, R1 483 210
and R499 559.40, including VAT.
[16]
The principal issue to be determined in this appeal is, as stated
above, whether the adjudication clause in the contract survived
the
termination of that contract by the City on the basis of fraud.
[17]
An ancillary issue is whether the City should be held to have waived
its right to rescind the contract with Namasthethu, alternatively,
whether the City should be regarded as having elected not to do so,
in both instances by virtue of the time taken by it in investigating
the allegations of fraud against Namasthethu.
[18]
The appellant's challenge against the High Court's findings can be
summarised as follows. It was contended that, on a proper
construction of the contract, the parties contemplated that the
disputes regarding the cancellation of the contract, including
those
involving allegations of fraud during the tender process, were
subject to the dispute resolution process agreed to by the
parties.
It was submitted that the dispute resolution clause set out above is
widely worded so as to encompass disputes of whatever
nature. All the
more so, it was argued on behalf of Namasthethu, if regard is had to
clause 36, which deals, inter alia with termination,
after failure by
the contractor to comply with certain contractual obligations and on
failure to cure the default, after being
put on terms. Clause 36 also
permits, as stated earlier, the City to terminate the agreement on
the basis of corrupt or fraudulent
acts by the contractor. This, so
it was submitted on behalf of Namasthetu, supported its view that
disputes of any kind were to
be referred for adjudication in terms of
the dispute resolution clause.
[19]
It was also submitted on behalf of Namasthetu that there was no
contractual or other basis cognisable in law for the judicial
review
of the second respondent's determination, whose determination was in
any event not manifestly unjust.
[20]
Furthermore, it was contended that the City had waived its
entitlement to terminate the contract and/or elected not to do so
because of the considerable amount of time taken by it in
investigating the allegations of fraud against the appellant and
making
a decision in relation thereto.
[21]
Finally, as far as the allegations of fraud against it were
concerned, the appellant argued that there was a material dispute
of
fact in respect of the merits of these allegations and that its
version should not have been rejected by the court a quo. In
effect,
the appellant disputed that it was ever charged and convicted as an
accused for fraud and corruption.
[22]
The City, on the other hand, submitted that the contract was void,
alternatively voidable, as a result of specified fraudulent
misrepresentations and non-disclosures by the appellant. Upon being
satisfied that there had in fact been fraud on the part of
the
appellant, on the strength of a comprehensive forensic investigation,
so it was contended, the City elected to terminate or
rescind the
contract and validly did so. The one issue that was not in
contestation, so it was argued, was the conviction of Ravan
Chetty,
who was a director of Namasthethu, within the five year period
preceding the advertisement of the tender. Fraud, so it
was
contended, unravelled all.
[23]
It is common cause that when Ms Shamla Chetty, a director of the
appellant, completed and submitted the tender documentation
on behalf
of the appellant on 1 April 2004, she expressly wrote 'NO' in the
specified column of para 1.3 of the declaration in
schedule 4 of the
documentation. This was in response to the question specifically
asked therein, namely, 'Was the tenderer or
any of its directors
convicted by a court of law (including a court of law outside of the
Republic of South Africa) for fraud or
corruption during the past
five years?'
[24]
The appellant had denied the alleged criminal convictions for fraud
and corruption. However, it conceded that criminal charges
of fraud
and corruption were indeed laid against Ms Shamla Chetty (accused
number 1), Mr Ravan Chetty (accused number 2) and Namasthethu
Electrical (Pty) Ltd (accused number 3) and that the charges against
Ms Chetty were later withdrawn. It then contended that Mr
Ravan
Chetty had pleaded guilty on charges of fraud and corruption in his
personal capacity, as well as on behalf of 'Nationwide
Electrical', a
sole proprietorship, as opposed to Namasthethu trading as Nationwide
Electrical. Furthermore, as Namasthethu was
only incorporated as a
company at a later stage, certain of the charges in respect of which
there was a guilty plea pre-dated the
incorporation of Namasthethu as
a company. The appellant then submitted that, notionally, it was
possible for the sole proprietorship
to have continued to trade even
after Namasthethu had been incorporated, whereas it was not possible
for Namasthethu to have traded
before it was incorporated.
[25]
In November 2013, the appellant’s director, Ravan Chetty, was
criminally convicted of fraud and corruption. That was
a relevant and
undisputed fact. It is not necessary to interrogate the name change
of the company and whether it was an expedient
measure. Nor is it
necessary to investigate any further the suggestion on behalf of the
City that the relevant charge sheet appears
to have been suspiciously
altered. The City and other state entities are entitled to be
concerned about the integrity of company
directors with whom they
envisage doing business. It was entitled to know whether persons who
were corrupt or fraudulent had been
directors during the relevant
window period. It is for that reason that the tender documents
required answers to questions about
convictions related to fraud and
corrupt activities. Ravan Chetty’s conviction, which ultimately
is common cause, is the
crucial element in this appeal. It is worth
noting that Mr Ravan Chetty, who purportedly resigned as a director
of Namasthethu
with effect from 12 May 2011, was however still
involved with Namasthethu and the tender, as on 11 April 2014 he met
with one Mr
Wayne Thomas to discuss awarding 25 per cent of the
tender to the latter’s company as a local sub-contractor.
[26]
There was no denial that the appellant had in its tender given a
fictitious business address as 7 15th Avenue, Kensington,
Maitland,
Cape Town. As a result, the unavoidable inference is that this was
done to give the impression that the appellant had
a local office.
The explanation given in the answering affidavit, that the premises
were identified by an unspecified project manager,
whose confirmation
affidavit is glaringly missing, and that the appellant never took up
those premises because the City provided
space for the premises in
containers located at the site, is contrived and nonsensical and was
correctly rejected by the court
a quo. Clearly, the appellant must
have known that a Cape Town business address was required, for
otherwise it would not have pretended
that it had one and filled in a
false address. There is no gainsaying the fact that in a tender
adjudication process, points get
awarded in respect of locality.
[2]
[27]
In the end, having considered the conduct of the appellant during and
after the tendering process, the court a quo was satisfied
that all
the requirements of fraudulent misrepresentation had been met, which
rendered the contract voidable at the instance of
the City, which it
then validly and effectively elected to rescind.
[3]
I
am unable to fault the court a quo in arriving at this conclusion.
[28]
The question that must now be answered is whether, in the light of
the fraudulent and corrupt conduct of which the appellant
was
undoubtedly guilty, the City, after validly cancelling the contract,
can be compelled to submit to an arbitration process in
accordance
with the dispute resolution clause in the contract, an issue to which
I now turn.
[29]
It is trite law that fraud is conduct which vitiates every
transaction known to the law. In affirming this principle, this
court, in
Esorfranki
Pipelines (Pty) Ltd
,
[4]
referred
with approval to Lord Denning's dicta in
Lazarus
Estates Ltd v Beasley
,
[5]
when
he said:
'No
court in this land will allow a person to keep an advantage which he
has obtained by fraud. No judgment of a court, no order
of a
Minister, can be allowed to stand if it has been obtained by fraud.
Fraud unravels everything. The court is careful not to
find fraud
unless it is distinctly pleaded and proved; but once it is proved it
vitiates judgments, contracts and all transactions
whatsoever . . .'.
[30]
As regards an arbitration or similar adjudication clause contained in
an agreement which was found to have been induced by
fraud, this
court has emphatically ruled that once the agreement had been
rescinded by an aggrieved party, the said arbitration
clause cannot
stand. The reason, this court stated per Cameron JA in
North
West Provincial Government and Another v Tswaing Consulting CC and
Others
,
[6]
was
because '. . . the arbitration clause was embedded in a fraud-tainted
agreement the province elected to rescind' and 'cannot
survive the
rescission', for 'to enforce the arbitration agreement, the tainted
product of [the guilty contractor’s] fraud,
would be offensive
to justice'.
[31]
In
North
East Finance (Pty) Ltd v Standard Bank of South Africa Ltd
[7]
this
court had occasion to again consider the question of fraud in
relation to an arbitration clause and reiterated that the effect
of
fraud that induces a contract is, in general, that the contract is
regarded as voidable. This means that the aggrieved party
may elect
whether to abide by the contract and possibly claim damages, or to
resile from it and regard the contract as void from
inception. The
court held that the arbitration clause could not survive in the face
of allegations of fraud by one party, even
though it expressly
included the phrase 'any question as to the enforceability of this
contract'.
[8]
Thus,
disputes regarding the validity or enforceability of contracts
induced by fraudulent misrepresentation and non-disclosures
were not
generally intended to be arbitrable.
[9]
[32]
Relying on what was held in
Heyman
v Darwins Ltd
,
[10]
the
court stated that the position might only change if the parties
specifically made provision in the contract for such a dispute
being
referred to arbitration. In
Heyman
,
Lord Peter expressed this as follows:
'… I
see no reason why, if at the time when [the contracting parties]
purport to make the contract
they
foresee the possibility of such a dispute arising
,
they should not provide in the contract itself for the submission to
arbitration of a dispute as to whether the contract ever
bound them
or continues to do so. They might, for instance, stipulate that, if a
dispute should arise as to whether there had been
such a fraud,
misrepresentation or concealment in the negotiations between them as
to make a purported contract voidable, that
dispute should be
submitted to arbitration’.
[11]
But
even then, as the House of Lords stated in
Heyman
,
it may require very clear language to effect this result.
[12]
[33]
In the present case, the question that must be answered is whether
there is clear and unequivocal language in the contract
or even the
arbitration clause itself, providing for this kind of dispute to be
addressed by arbitration or adjudication. Alternatively,
can it be
inferred that the parties foresaw a possible dispute regarding
whether the agreement was induced by fraud, in which event
the City
would be required to participate in certain dispute resolution
procedures? Needless to say, this must be determined in
line with the
generally accepted approach to the interpretation of contracts,
viz.
by having regard to the context in which the agreement was
concluded.
[13]
In
addition, the contract must be interpreted so as to give it a
commercially sensible meaning.
[14]
[34]
A simple reading of the arbitration clause 40.1 reveals that it
merely provides that one party may give notice to the other
to
resolve a disagreement in the event of there being a disagreement
'arising out of or concerning this agreement or its termination'.
Clearly, this clause contemplates a dispute arising out of the
agreement when it was accepted to be valid from the outset. There
is
no suggestion that it covers fraud, nor that it involves an exception
to the general rule enunciated above. Indeed, clause 40.7
provides
that recording of a dispute under clause 40.1 'shall not relieve the
parties from liability for the due and timeous performance
of their
obligations', thereby indicating that the rest of the agreement is
considered to be valid. In any event, even the giving
of 'notice' as
stipulated in clause 40.1 would clearly not apply to a situation of a
contract which the aggrieved party has already
validly terminated or
cancelled as a result of fraud.
[35]
Clause 36 is of no assistance to Namasthetu. It deals with
termination for failure to meet contractual obligations, different
from termination based on fraud or corrupt activity. Notice of
default has to be given in respect of breach of contractual
obligations
before termination can take place. Fraud is provided as a
separate and distinct basis for termination. One can hardly be
expected
to give notice to cure fraud or corrupt conduct. Disputes
that arise for adjudication in terms of an arbitration clause usually
relate to a failure to comply with contractual obligations and the
consequences that follow.
[36]
Clause 40 does not expressly, or by any necessary implication,
provide that an adjudication under that clause can determine
the
validity or enforceability of the agreement when the City claims that
it has been vitiated by fraud. In other words, it does
not enable an
adjudicator to determine whether the agreement was induced by fraud
and void, or voidable, as a result. Moreover,
as pointed out above
there can in any event not be any dispute about Ravan Chetty’s
conviction.
[37]
As this court emphasised in
North
East Finance (Pty) Ltd
,
[15]
in
order for the validity of a contract terminated for fraud to be
determined by reference to adjudication, the contract must
specifically
say so, or otherwise clearly indicate as much. In this
case, the contract unquestionably does not.
[38]
In the light of the conclusions reached above, it follows that the
referral of the dispute to the second respondent for adjudication
was
invalid and unlawful and that the court a quo was correct in setting
aside his determination following on an unlawful adjudication
process. Clearly, the second respondent was not clothed with any
authority to adjudicate the dispute.
[39]
There can be no question of waiver on the part of the City. It might
have acted with greater urgency but it appears to have
been intent on
obtaining verified and accurate information.
[40]
The court below considered that the appellant’s conduct
justified a punitive costs order. I can see no fault with that
conclusion. Our courts have repeatedly recognised the widespread
nature of fraud and corruption and its corrosive effect on society.
I
am in agreement with counsel for the first respondent that a punitive
costs order on appeal is equally justified.
[41] The following order
is made:
The appeal is dismissed
with costs on the scale as between attorney and client, such costs to
include the costs attendant upon the
employment of two counsel.
________________
B H Mbha
Judge of Appeal
APPEARANCES:
For
appellant: S Rosenberg SC
Instructed
by:
Anand-Nepaul
Attorneys, Durban
Honey
Attorneys, Bloemfontein
For
respondent: P Farlam SC
Instructed
by:
WJ
Da Grass Attorneys, Athlone
Holmes
Attorneys, Cape Town
[1]
Section 62(1) provides:
'A person whose rights
are affected by a decision taken by a political structure . . . of a
municipality in terms of a power or
duty delegated or sub-delegated
by a delegating authority to the political structure . . . may
appeal against that decision by
giving written notice of the appeal
and reasons to the municipal manager within 21 days of the
notification of the decision.'
[2]
Esorfranki
Pipelines (Pty) Ltd and Another v Mopani District Municipality and
Others
[2014] ZASCA 2
;
[2014] 2 All SA 493
(SCA) para 11.
[3]
See
Bowditch
v Peel and Magill
1921 AD 561
at 572: 'A person who has been induced to contract by
the material and fraudulent misrepresentations of the other party
may either
stand by the contract or claim a rescission.'
[4]
Op
cit fn 4
para
25.
[5]
Lazarus
Estates Ltd v Beasley
[1956] 1 QB (CA) at 712.
[6]
North
West Provincial Government and Another v Tswaing Consulting CC and
Others
[2006]
ZASCA 108
;
2007 (4) SA 452
(SCA) para 13. See too
Wayland
v Everite Group Ltd
1993 (3) SA 946
(W); and
Absa
Bank Limited v Moore and Another
[2016] ZACC 34
;
2017 (1) SA 255
(CC) para 39, where Cameron J warned
that the maxim 'fraud unravels all' was '... not a flame-thrower,
withering all within reach'.
He continued: ‘Fraud unravels all
directly within its compass, but only between victim and
perpetrator, at the instance
of the victim. Whether fraud unravels a
contract depends on its victim, not the fraudster or third parties'.
[7]
North
East Finance (Pty) Ltd v Standard Bank of South Africa Ltd
[2013] ZASCA 76; 2013 (5) SA 1 (SCA).
[8]
Ibid para 26.
[9]
Ibid para 30.
[10]
Heyman
v Darwins Ltd
[1942] 1 All ER 337
(HL) at 357B-D.
[11]
Ibid.
[12]
See
also
Gutsche
Family Investments
(Pty)
Ltd and Others v Mettle Equity Group (Pty) Ltd and Others
[2007]
ZASCA 45
;
2007 (5) SA 491
(SCA) para 14, where this court held that
where there is a dispute between contracting parties as to an
arbitrator's jurisdiction,
an arbitrator may only finally determine
his (or her) own jurisdiction if this is 'provided for specifically,
and in the clearest
terms'.
[13]
See
Natal
Joint Municipal Pension Fund
op
cit at fn 3.
[14]
Ibid para 18.
[15]
Op cit at fn 9.