Do Rego v JC Beerwinkel t/a JC Builders (SA 36 of 2010) [2012] NASC 17 (22 August 2012);
REPORTABLE
CASE
NO.: SA36/2010
IN
THE SUPREME COURT OF NAMIBIA
In
the matter between:
DR ANIBAL DA | Appellant |
and
J C | Respondent |
Coram:
SHIVUTE CJ, MAINGA JAetO’REGAN AJA
Heard
on: 05 July 2012
Delivered
on: 22 August 2012
APPEAL
JUDGMENT
O’REGAN
AJA (SHIVUTE CJ et MAINGA JA concurring):
This
matter arises from a building contract entered into in 1999 by the
appellant, Dr Anibal Da Cunha do Rego, and the respondent, JC
Beerwinkel trading as JC Builders. A dispute arose between these
parties as to monies allegedly owed by the appellant to the
respondent and that dispute was submitted to arbitration. Mr
Beerwinkel successfully applied to court to have the resultant
arbitration award made an order of court. Dr do Rego now appeals
against the whole of the judgment and order made in the High Court.
Facts
In
May 1999, the parties entered into a building contract for the
construction of a residential dwelling for the appellant in
Auasblick, Windhoek. Clause 26 of the contract provided for disputes
between the parties to be determined by arbitration. Towards the end
of the building works, a dispute arose between the parties
concerning amongst other things, defects in the building work
alleged by the appellant, additional building work done by the
respondent and the question of monies owed by the appellant to the
respondent.
Some
two years later, the parties agreed to refer the dispute between
them to arbitration and agreed that Mr Philip Main would be the
arbitrator. The parties exchanged pleadings in the form of a
statement of claim, as well as a plea and claim in reconvention.
However, the arbitration did not proceed as the parties terminated
the services of Mr Main. Some years later, in 2006, the parties
agreed to appoint Mr Eyvind Finsen as arbitrator in the dispute, but
again the arbitration did not happen as Mr Finsen died in early
2008.
On
25 July 2008, the legal practitioners for Mr Beerwinkel wrote to the
President of the Namibia Institute of Architects in terms of clause
26 of the building contract requesting him to nominate three persons
in good standing with the Namibian Council of Architects and
Quantity Surveyors who would be suitable to conduct the arbitration.
A copy of this letter was sent to Dr do Rego. The President of the
Institute replied to this letter on 14 August and provided the names
of three people who were willing to accept nomination to act as
arbitrator in the dispute. On 16 October 2008, Mr Beerwinkel
selected Mr Wouter van Zijl to serve as arbitrator and again
notified Dr do Rego of this decision.
On
the same date, Mr Beerwinkel’s legal practitioners informed Dr
do Rego that a meeting would be held with the arbitrator on 22
October in Windhoek. On the morning of 16 October, the appellant
contacted the arbitrator, Mr van Zijl, and informed him that he was
unable to attend the meeting. The meeting proceeded in his absence.
A minute of the meeting was prepared and faxed to Dr do Rego. The
minute recorded that the Summary Procedure Rules of the Association
of Arbitrators (Southern Africa), 5th ed (2005) would
apply to the arbitration. It also recorded the arbitrator’s
fee, as well as the date and place of the hearing. The arbitration
was set for 20 November but the minute also recorded that if either
of the parties had a problem with the date, they should contact the
arbitrator within seven days, before close of business on Thursday
30 October, and explain why they were unavailable and propose an
alternative date within 14 days of the proposed date. The minute
also recorded that if either party failed to be present at the
hearing, the arbitrator would make an award on the available and
submitted information.
On 17 November, Dr do Rego sent an
email to the arbitrator in which he stated that he would not be
available on 20 November and that 'this matter has long expired'. Dr
do Rego also stated that the arbitrator had'shown prejudice' in the
way he would be handling the matter.
On
20 November, the arbitration proceeded in the absence of the
appellant and on 8 December, the arbitrator handed down his award
upholding the respondent’s claim and dismissing the counter
claim lodged by the appellant.
Proceedings
in the High Court
Mr
Beerwinkel then launched proceedings in the High Court for the
arbitrator’s award to be made an order of Court in terms of s
31 of the Arbitration Act, 42 of 1965, on 13 August 2009. Dr do Rego
lodged a notice of intention to oppose on 21 August as well as a
rule 35(12) notice calling for Mr Beerwinkel to produce certain
documents for inspection. Mr Beerwinkel complied with the rule 35
Notice on 21 October 2009. Dr do Rego then requested an extension of
time for the filing of his answering affidavit until the end of
December. The respondent acquiesced.
However,
Dr do Rego did not lodge his answering affidavit by the end of
December 2009. In fact, it was not filed until 24 September 2010.
By then, the application had been set down on the unopposed roll for
hearing in the week of 11 October 2010. The respondent filed a rule
30 Notice on 6 October seeking for the answering affidavit to be set
aside as an irregular step. On 7 October the appellant lodged an
application seeking condonation for the late filing of his answering
affidavit, as well as the postponement of the hearing of the
application. The application was heard by Henning AJ in the High
Court on 11 October.
On
19 October, judgment was handed down dismissing both the application
for condonation of the late filing of the answering affidavit, and
the application for the postponement. The judgment also granted the
relief sought by the respondent in his notice of motion. It is
against this judgment that the appellant now appeals.
Issues
for determination in this Court
Three
issues fall for determination in this appeal. The first is whether
the High Court erred in refusing the appellant’s application
for condonation for the late filing of his answering affidavit and
the second is whether the High Court erred in refusing the
appellant’s application for a postponement. These two issues
are related and will be dealt with together below. The third is
whether the High Court erred in granting the substantive relief
sought by the respondent. I will deal with this issue separately.
Before
turning to these issues, there is one preliminary matter that needs
consideration. The appellant’s heads of argument were filed
five court days late. The appellant lodged an application for
condonation for the late filing of the heads. At the commencement of
the appeal hearing, counsel for the appellant moved the application
and the Court granted it orally. The reasons for that order are the
following.
The
appellant explained that the heads were filed late because the
appellant’s legal representative had mistakenly thought that
he had prepared written heads in the High Court, and therefore only
reserved one day to work on the heads for the appeal. He only
realized his error shortly before the heads were due which resulted
in theheads being late. The respondent did not oppose the
application for the grant of condonation. Given that the period for
which condonation is sought is only five days, that the reason
tendered for the delay is a bona fide mistake, that the respondent
did not suggest that he had been prejudiced by the delay, and that
the Court itself was not prejudiced by the delay, the Court granted
the application for condonation at the hearing of this matter.
The
refusal of the applications for condonation of the late filing of the
answering affidavit and for the postponement of the hearing in the
High Court
Both
the decision to refuse condonation for the late filing of an
answering affidavit1
and the decision to refuse a postponement are based on the exercise
of discretion.2The
approach to be followed by an appeal court in considering appeals
against such decisions was clearly set out by Mahomed AJA sitting in
this Court in Myburgh
Transport v Botha t/a S A Truck Bodies 1991
(3) SA 310 at 314F–G, which concerned an appeal against the
refusal of an application for a postponement:
'An
appeal court is not entitled to set aside the decision of a trial
court granting or refusing a postponement in the exercise of its
discretion merely on the ground that if the members of the Court of
appeal had been sitting as a trial Court they would have exercised
their discretion differently.
An
appeal Court is, however, entitled to, and will in an appropriate
case, set aside the decision of a trial Court granting or refusing a
postponement where it appears that the trial Court had not exercised
its discretion judicially, or that it had been influenced by wrong
principles or a misdirection on the facts, or that it has reached a
decision which in the result could not reasonably have been made by a
Court properly directing itself to all the relevant facts and
principles.'3
The
question thus arises whether the High Court in refusing these
applications did not exercise its discretion judicially, or was
influenced by wrong principles or a misdirection of the facts, or
that it was a decision that no court could reasonable have made.
In
relation to the refusal to condone the late filing of the opposing
affidavit, it is common cause that the affidavit was only served and
filed some 20 calendar days before the hearing of the matter, more
than 9 months after it was due. Despite this extreme delay, the
affidavit was not accompanied by an application for condonation of
the late filing of the affidavit. Indeed, an application for
condonation was only filed once the respondent lodged a rule 30
Notice some five days before the hearing. An application for
condonation was then lodged the day after the service of the rule 30
Notice.
In
his affidavit in support of the condonation application, the
appellant pointed to the respondent’s delay in proceeding with
the arbitration and suggested that his delay in filing his opposing
affidavit should be viewed in the context of the respondent’s
delay in prosecuting the arbitration. The appellant also explained
that his delay had arisen because his legal representative was
engaged in other work and unable to find time to prepare the
opposing affidavit.
On
behalf of the appellant, it was argued that this Court should
interfere with the decisions of the High Court to refuse condonation
of the late filing of the opposing affidavit and a postponement of
the hearing. The basis upon which this Court should interfere with
the decisions of the High Court was that the High Court judge erred
in law or on the facts (a) by focusing on the manner in which the
appellant had approached the matter, and not on the delays that the
respondent had occasioned in pursuing the arbitration and (b) by
failing to consider the issue of good cause 'in its entirety' as the
determining factor which should have included a consideration of the
prejudice occasioned by the late filing of the opposing affidavit.
In
determining the condonation application, the High Court judge
focused on the reason given by the appellant for the delay in
lodging the answering affidavit. As mentioned above, that reason was
that appellant’s legal representative was unable to prepare
the opposing affidavit due to pressure of work. The High Court
judge, quite correctly, noted that at least since the reported
decision of Ecker v Dean
1939 SWA 22, the courts of
this country have been unwilling to accept that a litigant is
entitled to insist on being represented by a particular counsel.
The consequence of this principle is that it will not avail a
litigant to explain a delay on the basis that his chosen legal
representative was unavailable to assist him. The views expressed
in Ecker’s case
have been endorsed by other courts both here and in South Africa,4
including by this Court in Aztec
Granite (Pty) Ltd v Green and Others 2006
(2) NR399 at 403B where this Court reasoned:
'It
is trite law that a Court will be extremely reluctant to grant a
postponement of an appeal, when the sole reason is that an
application and/or the applicant’s instructing legal
practitioners have a preference for a particular legal representative
and that particular counsel is not available.'5
The
principle that a litigant is not entitled to delay the process of
justice by insisting on being represented by a particular legal
representative is an important one. Underlying it are two concerns.
The first is that the convenience of one party cannot be put above
the convenience of the other parties. The second concern, as
important as the first, if not more important, is the need to
protect the general public interest in the timely and efficient
administration of justice.6The
principle that a litigant may not cause delays by insisting on a
particular legal representative is one that will not ordinarily be
relaxed simply because there have already been delays in the conduct
of a dispute. Nor will it be departed from because the other party
is not prejudiced. For the principle protects not only the interests
of the other parties to the litigation but also the public interest
in the efficient administration of justice.
Accordingly,
the appellant’s argument that the High Court judge erred in
applying the rule that a litigant may not delay the administration
of justice by insisting on chosen counsel without regard to the
broader context of the dispute between the parties and, in
particular, the delays that had beleaguered the arbitration, cannot
be upheld. Whatever the earlier delays, the High Court judge cannot
be said to have applied a wrong legal principle in concluding that
the appellant’s material delay in filing his opposing
affidavit,for the reason that his chosen legal representative was
not available to draft it earlier, had not established the good
cause required to be afforded condonation. Similarly, the High
Court judge cannot be faulted for failing to consider whether the
respondent had been prejudiced by the inordinate delay caused as a
result of the non-availability of appellant’s chosen counsel.
For even if there was no prejudice, something the respondent
disputes, that would not have been determinative. For even if the
respondent was not prejudiced, there is a broader interest at stake,
the public interest in the speedy administration of justice.
The
application for a postponement was made from the Bar on the morning
of the hearing. It may be true, as appellant’s counsel argued
in the appeal hearing, that one of the reasons for the application
may have been to afford the respondent an opportunity to deal with
the material in the appellant’s opposing affidavit. Once,
however, the opposing affidavit was not admitted, that reason fell
away. In any event, an application for a postponement will only be
granted if an applicant can show that it is in the interests of
justice to grant the application.7
In determining this question, important considerations include that
the application for a postponement be timeously made,8
that it be made in good faith,9
and that the party seeking the postponement provide a full
explanation of the reason why the postponement is necessary.10
In this case, the appellant met none of these requirements.
In refusing the application for a
postponement, the High Court judge noted the appellant’s
complete failure to comply with the Rules and with Practice
Directive 26(1), which stipulates that there should be five days’
notice between the filing of an interlocutory application and the
scheduled hearing. The High Court judge concluded that, given the
appellant’s flagrant non-compliance with the Rules, it was an
appropriate case to refuse the application for a postponement as
well as the application for condonation without a consideration of
the prospects of success.
Given
the circumstances of the application for the postponement, the
appellant has not established that the High Court judge erred either
on the law or the facts in refusing the application.
The
grant of substantive relief by the High Court
Given
the conclusion that the High Court’s decision to refuse the
applications for condonation and a postponement should not be
interfered with on appeal, the remaining issue is whether the High
Court was correct in granting the relief sought by the respondent
who was the applicant there. The relief sought was that the award
made by the arbitrator be made an order of court. Again given that
the opposing affidavit was never admitted, this question must be
determined on the basis of the founding papers lodged by the
respondent in the High Court.
For
the first time in oral argument before this Court on appeal, the
appellant argued that the High Court erred in making the arbitration
award an order of court, because on the record the arbitrator was
not properly appointed in terms of the building contract and
accordingly was not authorized to conduct the arbitration.
Clause
26 of the building contract between the parties provided for
arbitration in the event of disputes arising. Clause 26 reads as
follows:
'If
any dispute or difference shall arise between the Employer or the
Architect on his behalf, and the Contractor, either during the
progress or after the completion of the works or after the
determination of the employment of the Contractor under this
contract, abandonment or breach of the contract, as to the
construction of the contract, or as to any matter or thing arising
thereunder, or as to the withholding by the Architect of any
certificate to which the Contractor may claim to be entitled, then
the Architect shall determine such dispute or difference by a written
decision given to the contractor. The said decision shall be final
and binding on the parties, unless the Contractor within fourteen
days of the receipt thereof by written notice of the Architect
disputes the same, in which case or in case the Architect for
fourteen days after a written request to him by the Employer or the
Contractor fails to give a decision as aforesaid, such dispute or
difference shall be and is hereby referred to the arbitration and
final decision of the person named in the attached schedule or, in
the event of his death or unwillingness or inability to act, or if no
person is named therein, an arbitrator selected by the Contractor
from two persons nominated on the request of either party by the
President for the time being of the Namibian Council of Architects
and Quantity Surveyors, and the award of such arbitrator shall be
final and binding on the parties.'
Counsel
for the appellant submitted at the appeal hearing that the
conditions precedent to the appointment of an arbitrator stipulated
in article 26 of the building contract had not been met, and that
therefore the appointment of Mr Van Zijl as arbitrator was invalid.
Counsel further argued that before the arbitration award could be
made an order of court, the court has to be satisfied that the
arbitrator had been properly appointed. Counsel referred us in this
regard to Christopher
Brown, Ltd v Genossenschaft Oesterreichischer Waldbesitzer
Holzwirtschaftsbertriebe Registrierte Genossenschaft mit
Beschrankter Haftung [1953]
2 All ER 1039 (QB) in which Devlin J held that in order for a
plaintiff to have an arbitration award made an order of the Court,
the plaintiff must establish five things: the conclusion of an
arbitration agreement; the dispute fell within the terms of the
arbitration agreement; the arbitrators were appointed in terms of
the agreement; the award was made by the arbitrators; and the
awarded amount has not been paid.11
Section
31 of the Arbitration Act, 42 of 1965, provides that an arbitration
award may be made an order of court, on application by any party to
the agreement referring the dispute to arbitration after due notice
to the other party. Before a court will make an order, however, it
must be satisfied of that the arbitration took place in terms of a
valid arbitration agreement, that the arbitrator made the award and
that the award has not been met.12It
may be that a court will refuse to make the award an order of Court
if on the record it is clear that the award for some reason is
vitiated by illegality.13
The
appellant’s argument is that the arbitrator could not have
been validly appointed under clause 26 of the building contract
because the conditions precedent set out in that clause had not been
met, and that the arbitrator was not appointed under any other
arbitration agreement. 'Arbitration agreement' is defined in the
Arbitration Act as follows:
'a
written agreement providing for the reference to arbitration of an
existing dispute or any future dispute relating to a matter specified
in the agreement, whether an arbitrator is named or designated
therein or not.'
Clause
26 clearly constitutes an arbitration agreement as contemplated in
the Act in that it evinces the parties’ agreement to refer
disputes that may arise between them arising out of the subject
matter of the building contract to arbitration. The question then is
whether the appellant is correct to assert that on the record before
this Court the respondent has failed to show that the arbitrator was
appointed in terms of clause 26. In support of this argument,
counsel for the appellant asserted that clause 26 had not been
relied upon by the parties as the basisof an agreement to arbitrate
until the respondent’s representatives wrote to the President
of the Namibian Council of Architects and Quantity Surveyors in July
2008. Theseare questions of fact that require us to peruse the
record carefully.
The
record makes clear that when the dispute arose between the parties
as to the amount of money owing to the Contractor, the parties
referred the dispute to arbitration. The arbitrator was to be Mr
Main. From the documents attached to the founding affidavit, there
appears to have been a firm agreement between the parties that their
dispute should be resolved by arbitration, although no further
written arbitration agreement appears to have been signed. These
documents include the respondent’s statement of claim in the
arbitration as well as the appellant’s reply and counterclaim.
According to the founding affidavit, the arbitration did not proceed
before Mr Main for various reasons, including a dispute about fees.
Thereafter
Mr Finsen was appointed as arbitrator. Again minutes of a meeting
with Mr Finsen attended by both the appellant and the respondent are
annexed to the founding affidavit. These minutes evince a clear
agreement to have the dispute between the parties determined by
reference to arbitration. Again no formal written arbitration
agreement appears to have been signed.
There
were delays in proceeding with the arbitration before Mr Finsen and
then unfortunately Mr Finsen died unexpectedly at the beginning of
2008. Some time later, the respondent’s legal
representatives, relying on clause 26 of the building contract,
wrote to the President of the Namibian Council of Architects and
Quantity Surveyors asking him to nominate some names to serve as
arbitrator. Names were duly furnished and the respondent selected
Mr WH Van Zijl to act as arbitrator. This correspondence was copied
to the appellant.
The
appellant was also informed of the preliminary meeting before the
arbitrator and he contacted the arbitrator shortly before the
meeting to say that he would not be able to attend. Minutes of that
meeting were forwarded to the appellant.Those minutes made plain
that the date for the arbitration had been set for 20 November 2008
and that if he could not make that meeting he should inform the
arbitrator within seven days. On 17 November, the appellant sent an
email to the arbitrator that he would not be attending the
arbitration on 20 November, that 'this matter has long expired' and
that 'in your minutes you have shown prejudice in the way you would
be handling the matter'.
What
appears plain from the founding affidavit and the documents annexed
to the founding affidavit is that once the dispute between the
parties had arisen, they had mutually agreed that it would be
determined by arbitration. That the appellant had consented to
arbitration as a means of determining this dispute, appears from his
statement of defence and counterclaim in the proceedings before Mr
Main, as well as in the minutes of the meeting before Mr Finsen. In
neither of these documents is there any suggestion that the
appellant disputes that the matter has been properly referred to
arbitration. Nor is there any suggestion from any of these documents
that the parties were pursuing an arbitration agreement other than
the agreement expressed in clause 26 of the building contract.
On
the record before us, therefore, the appellant at least until
November 2008 acted consistently with an understanding that the
dispute between him and the respondent would be resolved by
arbitration. Nothing on the record suggests that that arbitration
would take place other than in accordance with clause 26 of the
building contract. Nor is there any suggestion that the appellant
ever asserted that the arbitration could not proceed because the
conditions precedent in clause 26 had not been met. Given the
conduct of the appellant up till November 2008, there is no
suggestion on the record that the parties considered that the
arbitration could not proceed because the conditions precedent in
clause 26 had not been met. In the circumstances, the respondent has
established on a balance of probabilities that the arbitration
followed from clause 26 of the building agreement.
The
record therefore establishes on a balance of probabilities that the
parties had entered into a valid arbitration agreement; that the
subject matter of the dispute between them fell within the scope of
that agreement; that the arbitrator was selected in terms of the
agreement; the arbitrator has made an award and the appellant has
failed to pay the amount ordered in the award. The appellant’s
argument that the arbitration could not be conducted because the
conditions precedent set out in clause 26 of the building
contracthad not been met cannot be sustained.
One
final issue needs to be considered. In the written heads, though not
in oral argument, counsel for the appellant contended that the
arbitrator had misdirected himself in proceeding in the absence of
the appellant. As set out above the appellant was given notice of
the arbitration. Section 15(2) of the Arbitration Act provides that
an arbitrator may proceed in the absence of a party if that party
fails to appear 'after having received reasonable notice of the time
when and place where the arbitration proceeding will be held'
without having shown good cause for the failure to appear. There is
no suggestion on the record that once the appellant obtained notice
of the arbitration, he made any serious effort to be present or to
be legally represented. In the circumstances, it cannot be said that
the decision by the arbitrator to proceed on 20 November constitutes
a material irregularity such as to vitiate the award.14
It
is clear, as counsel for the respondent argued, that the appellant
took no steps to have the award set aside in terms of s 33(1) of the
Arbitration Act. That section permits a party to apply to court to
have an arbitration award set aside where the party considers that
an arbitrator has misconducted himself or herself, or committed a
gross irregularity in the course of the arbitration. It is not
necessary to decide now whether a party is obliged to pursue the
remedy provided by s 33 if he or she considers there to have been a
gross irregularity in the arbitration and not permitted to raise it
only as a defence in proceedings to have the award made an order of
court under s 31, as recently the Supreme Court of Appeal in South
Africaheld.15
Given that the appellant has not established that the arbitration
was tainted by a material irregularity, this question can stand over
for decision on another day.
For
the above reasons, the appeal must fail.
Costs
Given
that the appeal fails, the ordinary rule as to costs should apply.
The appellant must be ordered to pay the costs of the respondent,
such costs to include the costs of one instructed and one
instructing counsel. The Court’s attention was drawn to the
fact that the respondent was represented in the appeal with the
assistance of the Legal AidDirectorate. In terms of s 17(2) of the
Legal Aid Act, 29 of 1990, the costs awarded to the respondent shall
be paid to the Director of Legal Aid.
Order
The
following order is made:
1. The application for condonation of
the late filing of appellant’s heads of argument on appeal is
granted.
2. The appeal is dismissed.
3. The appellant is ordered to pay the
costs of the respondent in opposing the appeal, such costs to include
the costs attendant upon the employment of one instructed and one
instructing counsel.
________________________
O’REGAN
AJA
________________________
SHIVUTE
CJ
________________________
MAINGA
JA
APPEARANCES
APPELLANT: | Mr Instructed |
RESPONDENTS: | Mr Instructed |
3
Id at 314G – 315B. See also National Coalition for Gay and
Lesbian Equality and Others v Minister of Home Affairs and Others
2000(2) SA 1 (CC) at para 11.
6
See the similar point made by the South African Supreme Court of
Appeal in McCarthy Retail Ltd v Shortdistance Carriers CC
2001 (3) SA 482 (SCA) at para 28.
7
See National Police Service Union and Others v Minister of Safety
and Security and Others 2000 (4) SA 1110 (CC) at 1112C–F.
12
Id. See, in this regard as well, Vidavsky v Body Corporate of
Sunhill Villas 2005 (5) SA 200 (SCA) at para 17; Butler and
Finsen Arbitration in South Africa at273 and Ramsden The
Law of Arbitration: South African and International Arbitration
(Juta, 2009) at 189. See also Crystal Springs Aerated Water Co v
Kan 1902 TH 21 at 26 where the Court stated that a court may
refuse to make an award an order of court 'if it were clearly made
to appear that the award was illegal'.
15
See Bantry Construction Services (Pty) Ltd v Raydin Investments
2009 (3) SA 533 (SCA) at para 21. See also Butler and Finsen
Arbitration in South Africa: Law and Practice para 7.10. For
a possibly contrasting approach, see Vidavsky v Body Corporate of
Sunhill Villas, cited above n 12, at para 16, a case in which
an arbitrator proceeded where the appellant had not received notice
of the arbitration proceedings before they were held. The SCA held
this to be material irregularity vitiating the arbitration
proceedings and accordingly that the award was null and voice and
could not be made an order of court.