Case Law[2023] ZAGPPHC 1146South Africa
TJM Investment Trust t/a Engen Thoyoyandou Convenience v South African National Road Agency SOC Limited (28653/2021) [2023] ZAGPPHC 1146 (6 September 2023)
Headnotes
of the background to this application and the action which the Applicant seeks to stay in terms of Section 6(1) of the Act.
Judgment
begin wrapper
begin container
begin header
begin slogan-floater
end slogan-floater
- About SAFLII
About SAFLII
- Databases
Databases
- Search
Search
- Terms of Use
Terms of Use
- RSS Feeds
RSS Feeds
end header
begin main
begin center
# South Africa: North Gauteng High Court, Pretoria
South Africa: North Gauteng High Court, Pretoria
You are here:
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2023
>>
[2023] ZAGPPHC 1146
|
Noteup
|
LawCite
sino index
## TJM Investment Trust t/a Engen Thoyoyandou Convenience v South African National Road Agency SOC Limited (28653/2021) [2023] ZAGPPHC 1146 (6 September 2023)
TJM Investment Trust t/a Engen Thoyoyandou Convenience v South African National Road Agency SOC Limited (28653/2021) [2023] ZAGPPHC 1146 (6 September 2023)
Download original files
PDF format
RTF format
make_database: source=/home/saflii//raw/ZAGPPHC/Data/2023_1146.html
sino date 6 September 2023
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
REPORTABLE:
NO.
OF
INTEREST TO OTHER JUDGES: NO
REVISED
Date:
06/09/2023
Case
no. 28653/2021
In
the matter between:
TJM
INVESTMENT TRUST t/a ENGEN
Plaintiff/Applicant
THOYOYANDOU
CONVENIENCE
(Registration
no. T25/2008)
And
SOUTH
AFRICAN NATIONAL ROADS AGENCY SOC LIMITED
Defendant/Respondent
JUDGMENT
The
judgment and order are published and distributed electronically.
P
A VAN NIEKERK, AJ
INTRODUCTION:
[1]
Applicant seeks an order against Respondent in the following
terms:
“
1.
That the proceedings by the Respondent in case no. 14457/2021 be
stayed pending the
determination of the dispute by arbitration.
Directing
that the dispute be referred for determination by arbitration
”.
[2]
The relief as claimed in the Notice of Motion is
incorrect, as the proceedings which Applicant seeks to stay were
instituted
by the Applicant under case no. 28653/2021 and no
proceedings were instituted by Respondent under case no. 14457/2021.
Throughout
the Founding affidavit reference is made to case number
28635/2021 (“the action”) which is the case number of the
civil
action instituted by Applicant and which the Applicant seeks to
stay in this application
[3]
The Application is opposed by Respondent on various grounds which
will be referred to
infra.
BACKGROUND:
ACTION AND EXCEPTIONS
:
[4]
For purposes of this judgment it is necessary to set out the
following concise summary of the background
to this application and
the action which the Applicant seeks to stay in terms of Section 6(1)
of the Act.
[5]
The action commenced on 9 June 2021 when Applicant caused a Combined
Summons and Particulars of Claim
to be issued from this court,
therein claiming damages from the Respondent in the action and for
which purposes the Applicant relied
on a contract entered into
between the Applicant and Respondent, a copy of which was annexed to
the Particulars of Claim (“the
Agreement”).
[6]
Respondent filed an exception to the Particulars of Claim, the crux
of which was that the Particulars
of Claim failed to disclose a
sustainable cause of action against the Respondent on the facts as
pleaded. The Exception so filed
by the Respondent is a relatively
complex and lengthy exception but essentially illustrate that the
alleged damages suffered by
the Plaintiff does not arise from any
breach of the Respondent in terms of the Agreement.
[7]
Following this Exception the Applicant attempted to cure the
defective Particulars of Claim by amending
the Particulars of Claim
on 25 February 2022. This Amended Particulars of Claim had the
following features:
(i) It did
not cure the Respondent’s Exception in relation to a lack of a
proper cause of action found on the
agreement as set out in the
Exception referred to
supra
;
(ii) It
introduced further and new alternative
causae
of action found on Sections 22 and 38 of the Constitution,
[1]
a claim based on an alleged duty of care which Respondent has in
relation to Applicant, as well as a claim purportedly found on
delict.
[8]
The Amended Particulars of Claim referred to
supra
again drew
an Exception from the Respondent, based on several
causae
of
complaint. Clearly recognising that this second Exception was sound,
Plaintiff gave notice of a second amendment to its Particulars
of
Claim. This second amendment was substantially similar to the
first amendment, failed to cure any of the
causae
of complaint
in the previous exceptions, and particularly failed again to cure the
complaint that the Particulars of Claim fails
to disclose a cause of
action based on the agreement.
[9]
The Respondent objected to this proposed amendment on substantially
similar grounds that were raised
in the Exceptions referred to
supra
.
[10]
Applicant thereafter elected not to proceed with this amendment, but
instead opted to launch this application on
22 September 2022. This
occurred after the Applicant’s attorney of record informed the
attorney of record acting on behalf
of the Respondent in
correspondence that the intended amendment should be ignored as the
Applicant has elected to refer the matter
to arbitration. The obvious
result thereof is namely that in the pending action there is
presently no sustainable cause of action
disclosed in terms whereof
Respondent is liable to Applicant for any alleged damages.
APPLICANT’S
GROUNDS FOR REFERRAL TO ARBITRATION
:
[11]
It is the Applicant’s case that Clause 16 of the Agreement
affords the Applicant the right to seek a referral
to arbitration.
Clause 16 of the Agreement reads as follows:
“
16.
DISPUTE RESOLUTION
16.1
In the event of a dispute arising between the parties in regard to
any matter relating to this Agreement,
howsoever arising, including
but not limited to;
16.1.1 the
interpretation of; or
16.1.2 the
carrying into effect of; or
16.1.3 any of
the parties’ rights and obligations arising from; or
16.1.4 any
claims arising out of; or
16.1.5
determination or purported determination or arising from
determination of; or
16.1.6 the
rectification or proposed rectification of this agreement; or
16.1.7 out of or
pursuant to this agreement;
16.1.8 or
any matter which in terms of this agreement requires agreement by the
parties (the “Dispute”),
this Dispute shall be settled in
accordance with the procedures set out in this clause 16;
16.2
If within ten (10) business days of the Dispute occurring, it has not
been resolved through informal
negotiations, the Disputing Party
shall give written notice (the “Dispute Declaration Notice”)
to the Receiving Party,
formally declaring and recording the nature
of the Dispute as perceived by the Disputing Party.”
[12]
“Dispute” is defined in the agreement to mean a “
dispute
or disagreement arising between the parties in regard to any matter
relating to this Agreement, howsoever
arising, including but
not limited to the matters referred to in Clause 11.1 below
”.
Clause 11.1 referred to
supra
is irrelevant for purposes of
this application. On an analysis of the Applicant’s Founding
Affidavit in support of the relief
as framed (albeit incorrectly) in
the Notice of Motion, Applicant essentially makes the following
averments:
(i) That the Applicant
seeks damages against the Respondent for “breach of contract”;
(ii)
That the Applicant relies on Section 6(1) of the Arbitration Act for
the relief claimed;
(iii)
That Respondent is not prejudiced by the proposed stay and referral
to arbitration;
(iv)
That Respondent refuses to agree that the “disputes” be
referred to arbitration;
(v)
Applicant explains the motive for bringing this application as
follows:
“…
after
careful consideration of the memorandum of agreement particularly
Clause 16 of MOA. (sic) It became apparent that this claim
must be
prosecuted in terms of the said MOA
”.
(vi)
Applicant further makes the following averment namely:
“
(
Plaintiff
)
… does not desire to pursue and prosecute this claim to the
court determining the dispute in case no. 28653/2021.
The
Applicant is therefore obliged refer (sic) the dispute for
determination by arbitration
.”
[13]
On an analysis of the Applicant’s Founding Affidavit as well as
the Replying Affidavit, no attempt is made
to provide any particulars
of the “Dispute” save and except for a generalised bold
averment that the Applicant
instituted an action for damages
based on a breach of the Agreement. No attempt is made in the
Founding Affidavit to explain
why the “Dispute” (whatever
it may be) “must” now at this stage be determined by way
of arbitration
notwithstanding the Applicant’s initial
election to institute civil proceedings contrary to the provisions of
Clause 16 of
the Agreement. There is no explanation in the
application why Applicant does not any longer “desire” to
pursue and
prosecute its “claim” in this court resulting
in the Applicant being “obliged” to refer the dispute to
arbitration. Whereas the Applicant seeks an order that the
proceedings in this court be stayed, pending the intended
arbitration,
no explanation is provided in the application as to what
the Applicant’s intentions are in respect of the stayed
proceedings
once the intended arbitration is finalised. On direct
questions posed to the Applicant’s Counsel during argument of
the matter,
it was disclosed that in the event of the arbitration
proceedings not being disposed of in favour of the Applicant, that
the Applicant
in those circumstances will then attempt to proceed
further with the stayed action. However, in the event that the
arbitration
proceedings are disposed of in favour of the Applicant,
then the stayed action will be withdrawn. Although this
response
by the Applicant’s Counsel is indicative of a failure
to appreciate the legal effect of finalised arbitration proceedings
or the applicable legal principles involved insofar as the Applicant
simplistically intends to merely proceed with or withdraw
the stayed
action, it clearly illustrates the fact that the stay of the
proceedings may potentially trigger further litigation
in the event
of the Applicant being dissatisfied with the outcome of the
arbitration proceedings.
[14]
In Heads of Argument filed on behalf of Applicant, it is submitted
that Section 6(1) of the Act “entitles”
a party to
exercise a right to stay proceedings where such right is provided for
in the agreement that binds the parties to the
proceedings. It
was further submitted in Heads of Argument filed on behalf of
Applicant that Clause 16 of the Agreement as
quoted
supra
leads to the conclusion that “…
it is
inescapable
from the reading of this clause (Clause 16 of the agreement) that
parties to it
are bound to refer their dispute to the
arbitrator for adjudication
…”. It was also
submitted that the discretion afforded to a court in terms of Section
6(2) of the Act should
only be refused on “
exceptional and
compelling grounds”.
DID
APPLICANT ESTABLISH A “DISPUTE” SUBJECT TO REFERRAL TO
ARBITRATION
?
[15]
Respondent, relying on the judgment of
Goodman
Stable Trust v Douhex (Pty) Ltd &
Another
[2]
submitted that a party who wishes to rely on an arbitration clause
bears the
onus
to allege and prove the underlying jurisdictional facts. In
that judgment Selikowitz J. held as follows on p. 615 c –
p:
“
Applicant now
contents that the first respondent bears the onus of proving that the
arbitration can proceed. Mr MacWilliam, who
appears for applicant
submits that although his client has initiated these proceedings the
onus to prove that there is a valid
arbitration agreement which
permits it to make a claim; an arbitrable issue and that the
arbitrator has been validly appointed
rest upon first respondent who
wishes to proceed with the arbitration.
These issues go to
jurisdiction and the party wishing to utilise the arbitration
procedure should, in my view, establish that it
is competent in the
particular circumstances to do so. Jurisdiction either exists
or does not. Jurisdiction cannot
arise simply because Applicant
fails to prove that the jurisdictional requirements are absent
.”
[16]
It was submitted that one of the jurisdictional facts which the
Applicant has to establish and prove is namely
that the arbitration
clause or agreement is applicable to the dispute between the
parties. Deciding whether the arbitration
clause applies to the
dispute or not is a matter of interpreting the arbitration clause in
the light of the dispute.
[3]
[17]
Respondent’s counsel further referred to the judgment of Lewis
JA. in
North
East Finance
(Pty)
Ltd v Standard Bank of South Africa Ltd
[4]
where the learned judge concluded that ultimately, in order to
determine whether a question was the subject of an arbitration clause
or not, including for instance the invalidity of the agreement
itself, depended on the context in which the agreement was concluded.
The learned judge found that this was in line with the South African
approach to the interpretation of contracts generally
[5]
.
[18]
Importantly, in order to determine whether or not a dispute fits
within an arbitration clause, gives rise to two
further related
requirements namely that there must be an existing dispute between
the parties, and the dispute must also be defined.
Counsel acting on
behalf of Respondent referred in this regard to the judgment of
Cloete JA. in
PCL
Consulting (Pty) Ltd t/a Phillips Consulting SA v Tresso Trading 119
(Pty) Ltd
[6]
where the following was held:
“
In the present
proceedings, the defendant has simply pointed out that the lease
contains an arbitration clause in wide terms. That
is not sufficient.
The defendant was obliged to go further and set the terms of the
dispute. As Didcott J succinctly pointed
out in Parekh v Shah
Jehan Cinemas (Pty) Ltd & Others; ‘arbitration is a method
for resolving disputes. That alone
is its object, and its
justification. A disputed claim is sent to arbitration so that the
dispute which it involves may be determined.
No purpose can be
served, on the other hand, by arbitration on an undisputed claim.
There is then nothing for the arbitrator
to decide. He is not
needed, for instance, for a judgment by consent or default. All this
is so obvious that it does not
surprise one to find authority for the
proposition that a dispute must be exist before any question of
arbitration can arise. It
includes re: Cars-Wilson & Greene
(1887) 18 QBD 7
(CA); London & Lancaster Fire Assurance Company v
Imperial Cold Storage and Supply Company Ltd (1905) 15 CTR 673; King
v Harris
1909 TS 292
’. This passage just quoted was
approved by this Court in Telecall (Pty) Ltd v Logan and
Pluman JA went
to say:
‘
[12]
I conclude that before there can be a reference to arbitration a
dispute which is capable of proper
formulation at the time when an
arbitrator is to be appointed, must exist and there cannot be an
arbitration and therefore no appointment
of an arbitrator which can
be made in the absence of such a dispute. It also follows that
some care must be exercised in
once use of the word ‘dispute’.
If for example the word is used in a context which shows or indicates
that what
is intended is merely an expression or dissatisfaction not
founded upon competing contentions no arbitration can be entered
upon
.”
[19]
In my view, what is required of the Applicant in establishing the
existence of a “dispute” for purposes
of relying on the
arbitration clause cannot be put more clearly than in the authorities
as quoted
supra
. As already alluded to
supra,
the
highwater mark of any attempt to disclose the existence of a
“dispute” is the assertion to be found in the Applicant’s
Founding Affidavit that the Applicant has a claim for damages arising
from breach of contract. In my view, this is tantamount to
“
merely
an expression of
dissatisfaction not founded on competing
contentions
….” as referred to in the judgment
quoted
supra
.
[20]
Apart from the aforesaid, it was submitted on behalf of the
Respondent that the terms of the arbitration clause
relate only to
matters relating to the Agreement. On a proper perusal of Clause 16.1
of the Agreement, specific specified categories
of disputes arising
between the parties “relating to this agreement” is
recorded, save and except for the introductory
paragraph of paragraph
16.1 of the Agreement which refers to “a dispute arising
between the parties in regard to any matter
relating to this
agreement”. Dispute, as already referred to
supra
,
is defined in Clause 1.1.5 of the Agreement to mean “a dispute
or disagreement arising between the parties in regard to
any matter
relating to this agreement”. In order to determine whether or
not the “dispute” which Applicant wish
to refer to
arbitration falls within the ambit of a class of disputes which arise
between the parties in regard to any matter relating
to the Agreement
as set out in Clause 16.1 of the Agreement read with the definition
of “dispute” in Clause 1.1.5 of
the Agreement, the
pleadings in the action and the affidavits in this application must
be analysed in order to determine whether
the Plaintiff has made out
a case for a referral to arbitration.
[7]
[21]
As already referred to
supra,
an analysis of the pleadings
(and in this respect I refer to the Plaintiff’s Particulars of
Claim the amendments which Applicant
intended to effect thereto, and
the exceptions and objections filed by Respondent in the action) to
date hereof failed to disclose
any discernable cause of action based
on the Agreement. A claim arising from delict, in terms of the
Constitution or as a result
of any alleged “legal duty”
which the Respondent owes the Applicant, is clearly not a claim which
arises from the Agreement.
[22]
In Heads of Argument filed on behalf of Respondent a thorough and
accurate analysis of the pleadings is made which
essentially
illustrate that the alleged duty to maintain a certain specifically
identified portion of road, which goes to the root
of the Applicant’s
claim in the action, is clearly not a duty which flows from the
provisions of the Agreement. For
this reason, so argue the
Respondent’s Counsel, the alleged damages claimed in the
Particulars of Claim is not a claim found
on the Agreement.
Considering the pleadings filed in the action, read with the
Agreement, and in the context of Clause 16(1)
of the Agreement, I
agree with this submission.
[23]
It is clearly for this reason, having realised that the exception
raised by the Respondent was well founded, that
the Applicant
attempted to introduce various alternative claims found on delict, an
alleged duty of care, and the Constitution.
These alternative
causae
of action do not arise from the Agreement. Applicant has
therefore failed to establish an essential jurisdictional requirement
required in terms of Section 6(1) of the Act namely to establish a
“right” to seek a referral of a “dispute”
to
arbitration in terms of Section 6(1) of the Act read together with
Clause 16(1) of the Agreement.
CAN
APPLICANT RELY ON SECTION 6(1) OF THE ARBITRATION ACT?
[24]
In the Applicant’s Founding Affidavit it is averred that the
Applicant relies on the provisions of Section
6(1) of the Arbitration
Act no. 42 of 1965 (“the Act”) which reads:
“
6.
Stay of legal proceedings where there is an arbitration
agreement
(1)
If any party to an arbitration agreement commences any legal
proceedings in any court
(including any inferior court) against any
other party to the agreement in respect of any matter agreed to be
referred to arbitration,
any party to such legal proceedings may at
any time after entering appearance but before delivering any
pleadings or taking any
steps in the proceedings, apply to that court
for a stay of such proceedings.
(2) If on any such
application the court is satisfied that there is no sufficient reason
why the dispute should not be referred
to arbitration in accordance
with the agreement, the court may make an order staying such
proceedings subject to such terms and
conditions as it may consider
just.”
[25]
Respondent raised a further bar to the application based on the
submission that Applicant, being the Plaintiff
in the action, cannot
rely on Section 6(1) of the Act. It was submitted that a proper
interpretation of Section 6(1) of the Act
mitigates against an
interpretation that a plaintiff who institute an action can
thereafter apply to have such action referred
to arbitration.
Relying on various authorities
[8]
where it was repeatedly held that a document (including legislation)
should be interpreted having regard to purpose, the context
and the
wording thereof it was argued that it is clear from the language of
Section 6(1) of the Act itself that a plaintiff who
has instituted an
action in the first place, cannot rely on Section 6(1) of the Act for
a referral to arbitration of its own case.
[26]
I agree with this submission. In my view the reference in Section
6(1) of the Act to “ …
any party to such legal
proceedings may at any time after entering appearance but before
delivering any pleadings or taking any
steps in the proceedings apply
to the court for a stay of proceedings
” can not refer to
the plaintiff, for the following reasons:
(i) In the
context of the Act as quoted
supra
, it is not the plaintiff
but the defendant who will enter such appearance to defend and
thereafter take a further step such as
to file a plea or raise and
exception.
(ii) The use
of the term “any party” in itself does not necessarily
lend support to an argument that “any
party” refers to
both the plaintiff or the defendant. “Any party”
refers to the fact that a number of different
defendants may be
joined in one action, and/or a defendant may join a third party
thereby affording the remedy in terms of Section
6(1) of the Act to
anyone or a number of these defendants or third parties joined in the
action;
(iii) Reference is
made in the provisions of Section 6(1) of the Act as quoted
supra
to “any party” in the context of a right to seek a
referral to arbitration after appearance to defend was entered but
before delivering any pleadings. In my view, this clearly refers to
the Defendant and not the Plaintiff. To interpret this
part of
Clause 6(1) of the Act otherwise namely that it entitles the
Plaintiff, when one or more defendants enter an appearance
to defend,
to the right to apply for a referral to arbitration is in my view an
interpretation which would mitigate against the
principle that a
party to an agreement, in this instance an agreement containing an
arbitration clause, may chose not to abide
to such agreement (in
other words, to approbate) and then institute an action and when
faced with opposition to such action, thereafter
insist on relying on
such a clause (in other words, to reprobate). In my view, this
interpretation will lead to an absurd result;
(iv) The objective
fact that Plaintiff is a party who has already delivered a pleading
in the form of the Particulars of Claim,
clearly also mitigate
against an argument that Section 6(1) of the Act affords the
Plaintiff a right to apply for a referral.
[27]
Section 6(1) of the Act furthermore clearly disentitle a party who
has delivered a pleading after appearance to
defend, or who has taken
a further step in the proceedings, to the remedy afforded in terms of
Section 6(1) of the Act.
In casu
Plaintiff has taken
various further steps after Respondent entered an appearance to
defend, including the delivery of Notices of
Intention to Amend on
two occasions, filing an Amended Particulars of Claim, and delivered
Notices in terms of Rule 35(1), (6),
(8) and (10), albeit before
close of pleadings and therefore irregularly. Applicant further
irregularly launched an application
to compel such irregular request
for discovery which application was later wisely withdrawn. Taking
these further steps is clearly
a bar to the present application.
[28]
Arguing contrary to the position as set out in paragraphs [24] to
[27]
supra
,
Counsel acting on behalf of Applicant relied on the following passage
quoted from the judgment of Wallace J. (as he then was)
in the matter
of
Aveng
Africa Ltd t/a Grinnaker LTA Building
East v
Midros Investments (Pty) Ltd
[9]
where the learned Judge Wallace held as follows:
“ …
that
a party to an arbitration agreement who commences litigation instead
of proceeding to arbitration does not, merely as a result
of adopting
that course, abandon its rights to have resort to arbitration under
the agreement
.”
[29]
Applicant’s counsel went further and submitted that there is no
obligation on Applicant to abandon or withdraw
the action before
resorting to Section 6(1) of the Act and relying on Clause 16.1 of
the Agreement for which purpose reliance was
placed on the judgement
of Swain J. (as he then was) in
BDE
Construction v Balfour 3581 (Pty) Ltd
[10]
where it was held at follows:
“
The applicant
is accordingly entitled to seek a stay of proceedings and is not
obliged to withdraw them, before referring the parties’
dispute
to arbitration
”.
[30]
Neither of these authorities referred to
supra
assist the Applicant. In both the matters referred to the party
seeking a referral to arbitration did not rely on the provisions
of
Section 6(1) of the Act, but relied on the provisions of an agreement
which provided an arbitration clause whereas
in
casu
the Applicant relies on Section 6(1) of the Act. Furthermore, Wallace
J. held in the
Aveng
matter
that a party cannot rely on an agreement in respect of which that
party is in breach of (with reference to a breach of the
arbitration
clause) to seek a referral to arbitration and then relying on such
clause in the agreement of which the party is in
breach of. In
other words, a party may not approbate and then reprobate. It
was then specifically held in that matter
that a party who commenced
litigation must first abandon the litigation before he can proceed to
arbitration.
[11]
[31]
In the
BDE
Construction
matter Swain J. differed from Wallace J. and held if the innocent
party, being the party who did not elect to stay the proceedings
in
terms of an arbitration clause but condoned the conduct of the guilty
party who instituted litigation contrary to an arbitration
clause by
failing to seek a stay of the proceedings, the guilty party is not
obliged to abandon such litigation when it seeks a
stay of the
proceedings for purposes of a referral.
[12]
Those facts clearly do not apply
in
casu
.
[32]
In casu
Applicant refuse to abandon or withdraw the action
which it seeks to stay and Respondent has not yet filed any Plea.
In such
Plea Respondent would be entitled to raise as a Special Plea
the arbitration clause in the Agreement or condone the institution
of
the action by joining issue on the pleadings.
[33]
Neither of the matters relied upon by Applicant concerned an
interpretation of Section 6(1) of the Act and this
section was
therefore not interpreted in those matters. In the premises, I am of
the view that Applicant cannot rely on the provisions
of Section 6(1)
of the Act for the reasons set out
supra
.
EXERCISE
OF DISCRETION IN TERMS OF
SECTION 6(2)
OF THE
ARBITRATION ACT
>:
[34]
Furthermore, even if the Applicant would have been entitled to rely
on Section 6(1) of the Act and it could be
found that the
jurisdictional requirements of Section 6(1) of the Act had been
complied with, I would have refused to exercise
the discretion
afforded to this court in terms of Section 6(2) of the Act in favour
of the Applicant for the following reasons:
(i) In my
view the objective facts show that the motive for this application is
not to advance any dispute which may
legitimately have arisen between
the parties to finalisation, employing a process agreed between the
parties in the agreement,
but is clearly an attempt to escape the
Applicant’s persistent inability to establish a sustainable
cause of action against
the Respondent in the action which Applicant
elected to institute contrary to the arbitration clause in the
agreement,
(ii) The
conduct of the litigation by Applicant thus far is characterised by a
failure to appreciate the legal principles
involved or the rules
applicable. This has resulted in substantial costs already
incurred by Respondent and which the Applicant
simply refuses to
tender. The prejudice to Respondent is clear;
(iii) Considering
paragraph [ ]
supra
, the stay of these proceedings
has the potential of a multiplicity of proceedings to follow which is
not conducive to the principle
that disputes should be ventilated
speedily, once and for all and clearly will lead to a duplication of
costs.
COSTS
:
[35]
Respondent gave notice of its intention to seek a punitive order for
costs on the basis that the application is
an abuse of the
procedure. I am of the view that a court should be hesitant to
find that the application of a remedy, even
when done incorrectly,
constitutes an abuse of process merely due to the fact that it may
lead to unnecessary litigation or costs.
Courts exist for the
very reason that parties and their legal representatives may hold
different interpretations of the law or
the application of the rules,
and parties should not be penalised simply because the interpretation
of the law or application of
the rules are incorrect.
[36]
However, in an instance like this, where there is a history of legal
blundering followed by an attempt to escape
the consequences thereof
without accepting the liability to pay the costs so occasioned can
only lead to the inference that the
application was launched with an
ulterior motive namely to escape the consequences of such legal and
procedural blunders.
Furthermore, after launching an
application which deals only superficially with the jurisdictional
requirements of Rule 6(1), Applicant
was presented with an Opposing
Affidavit which raised various defences to the application, and which
was followed by comprehensive
Heads of Argument which clearly
explains the legal issues involved and which properly referred to the
applicable authorities including
the fact that the authorities upon
which the Applicant relies do not support the Applicant.
Notwithstanding, the application
was persisted with as if the
Applicant is simply entitled as of right to seek a stay of the
proceedings and a referral to arbitration,
without having to disclose
justifiable grounds therefore.
[37]
I therefore exercise a discretion against the Applicant and award the
Respondent’s claim for punitive costs
against the Applicant.
ORDER
:
[38]
In the result, I make the following order:
1. The
application is dismissed;
2. The
Applicant is ordered to pay the Respondent’s costs on the scale
as between attorney and client, including
costs of senior counsel.
P
A VAN NIEKERK
ACTING
JUDGE OF THE GAUTENG DIVISION, PRETORIA
Appearances:
For
the Applicant:
Adv M
O MUDIMELI
Instructed
by:
SIGMA
ATTORNEYS
For
the Respondent:
Adv A
C BOTHA (SC)
Instructed
by:
SIM
ATTORNEYS
[1]
Constitution
of the Republic of South Africa, 1996
[2]
1998
(4) SA 606 (C)
[3]
Vide:
Universiteit van Stellenbosch v J A Louw (Edms.)
Beperk
1983 (4) SA 321A
; Stocks Construction (OFS) (Pty) Ltd v
Metter-Pingon (Pty) Ltd 1980 (1) SA 507 (A)
[4]
2013
(5) SA 1 (SCA)
[5]
North
East Finance (supra) para. 17 – 23
[6]
2009
(4) SA 68
(SCA) p. 72, par. 7
[7]
Vide:
Universiteit van Stellenbosch v J A Louw (Edms.) Beperk supra, par.
329 D – 333 B and 334 E - G
[8]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) at [18]; Dexgroup (Pty) Ltd v Trustco Group International
(Pty) Ltd
2013 (6) SA 520
(SCA) at [16]; University of Johannesburg
v Auckland Park Theological Seminary & Another
2012 (6) SA 1
(CC) at [65]
[9]
2011
(3) SA 613 (KZD)
[10]
2013
(5) SA 160 (KZP)
[11]
Aveng
judgment (supra), p. 639 H – 640 C
[12]
BDE
judgment (supra), par. [9] to [13] at 162 G – 164 C
sino noindex
make_database footer start
Similar Cases
JR 209 Investments (Pty) Ltd and Others v Homeless People Housing Co-operative Ltd and Others (49668/2020) [2022] ZAGPPHC 254 (24 March 2022)
[2022] ZAGPPHC 254High Court of South Africa (Gauteng Division, Pretoria)98% similar
ZD Investment CC and Another v Council for Geoscience and Another (15396/14) [2022] ZAGPPHC 944 (6 December 2022)
[2022] ZAGPPHC 944High Court of South Africa (Gauteng Division, Pretoria)98% similar
T.J.M v K.J.M and Another (11409/2022) [2025] ZAGPPHC 253 (3 March 2025)
[2025] ZAGPPHC 253High Court of South Africa (Gauteng Division, Pretoria)98% similar
Thusanyo Investments (Pty) Ltd v Maduo Supply & Projects CC (39913/20) [2022] ZAGPPHC 95 (24 February 2022)
[2022] ZAGPPHC 95High Court of South Africa (Gauteng Division, Pretoria)98% similar
JT International Manufacturing South Africa (Pty) Ltd v Commissioner for the South African Revenue Service (29690/14) [2023] ZAGPPHC 2061 (10 October 2023)
[2023] ZAGPPHC 2061High Court of South Africa (Gauteng Division, Pretoria)98% similar