Venmop 275 (Pty) Ltd and Another v Cleverlad Projects (Pty) Ltd and Another

• Jurisdiction: South Africa
• Judge: Peter AJ
• Judgment Date: 03 August 2015
• Citation: 2016 (1) SA 78 (GJ)
• Docket Number: 2014/14286
• Hearing Date: 03 February 2015
• Counsel: MM Segal for the applicants. JK Berlowitz for the second respondent.
• Court: Gauteng Local Division, Johannesburg

Peter AJ: E

Introduction

[1] The issues in this application to set aside an arbitration award are the admissibility of a letter in respect of which the 'without prejudice privilege' or 'privilege in aid of settlement' is claimed; the existence of 'good cause' as contemplated in s 38 of the Arbitration Act 42 of 1965 F ('the Act') for an extension of the time period prescribed in terms of the provisions of s 33(2) of the Act; and, in such context, whether or not the applicants perempted their right to apply for the setting-aside of the award; and whether or not the irregularity complained of is a 'gross irregularity' within the meaning of s 33(1)(b) of the Act. In addition to these evidentiary and substantive issues, the manner in which the parties G conducted this application merits comment on the role and function of affidavits in motion proceedings, and how the provisions of rule 53 of the Uniform Rules of Court are to be applied in review proceedings.

The facts

[2] In December 2010 Cleverlad Projects (Pty) Ltd (Cleverlad) H commenced action in the High Court against Venmop 275 (Pty) Ltd (Venmop) to obtain payment in terms of a written acknowledgement of debt. The principal issue in dispute was the authenticity of the signature appearing on behalf of Venmop. On 30 August 2012, and in terms of a written agreement, the High Court action was referred to arbitration I to a retired High Court judge to be conducted in accordance with the Uniform Rules of the High Court. The arbitration trial commenced on 13 November 2012 and proceeded for a total of 16 days, in intermittent periods over the ensuing months, seven days in November 2012, six days in February 2013, two days in July 2013 and culminating on 1 August 2013. On 12 December 2013 the arbitrator published a final award in J

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A favour of Cleverlad, finding the signature to be genuine and making an award of payment in terms of the acknowledgement of debt.

[3] On 9 January 2014 Cleverlad's attorneys addressed a letter to Venmop's attorneys demanding payment of the amount in terms of the B award. On 13 February 2014, not having received a response to this demand, Cleverlad made application to the High Court for the award to be made an order of court in terms of s 31 of the Act. On 19 February 2014 Venmop's attorneys replied to the letter of demand by way of a letter in which Venmop offered to make immediate payment of the sum of R50 000 with further payments of R10 000 per month and an C undertaking to 'review the offer every twelve months'. Cleverlad did not accept this offer. On 10 March 2014 Cleverlad obtained an urgent interim order in the High Court interdicting the disposal of certain immovable property by Venmop, pending an action to set aside such disposal. The disposal was alleged to be a dissipation of Venmop's assets in order to frustrate the enforcement of the award.

D [4] On 16 April 2014, one day shy of 18 weeks after the publication of the award, Venmop and the second applicant, whom I refer to as 'the mother', brought the present application to set aside the award on the grounds that the arbitrator had committed a 'gross irregularity in the conduct of the proceedings'. Three grounds were advanced in the E founding affidavit in support of the allegation of gross irregularity. First, the arbitrator had rejected evidence of a director of Venmop, the daughter of the alleged signatory, that the signature was not in fact her mother's signature. The signatory to the acknowledgement of debt was also the mother of the director of Cleverlad, and a defendant in the F arbitration (the mother). Secondly, the arbitrator allegedly committed an irregularity in finding that the evidence of an expert graphologist, which was not adduced, would not have swayed the probabilities of a factual finding on the authenticity of the disputed signature. Rather bizarrely, this graphologist was called by Venmop to give evidence that, G because he had received threats and intimidation, he would not be giving evidence in relation to his opinions on the authenticity of the disputed signature. The third ground was that the arbitrator refused to order production of certain financial documentation, notwithstanding that he had regarded such documentation as relevant. The first two grounds H were not pursued in argument, in my view rightly so.

[5] The facts giving rise to this third ground was that, on Friday 26 July 2013, Venmop brought an application in terms of the provisions of rule 35(7), for the production of financial documents which it had demanded on Monday 22 July 2013, in terms of the provisions of rule 35(3). The I application was argued on 29 July 2013, the fourteenth day of the trial. On 30 July 2013 the arbitrator dismissed the application. In his reasons the arbitrator acknowledged that the documents were relevant, in that if they contained a reference to the alleged indebtedness in the books of account of Cleverlad, they would support Cleverlad's case and, if they did not, they would be evidence against Cleverlad. Notwithstanding J such finding of relevance, the arbitrator refused to order production of

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the documents by reason of the lateness of the application. Cleverlad had A led all its evidence, closed its case and there were no good grounds to recall its witnesses.

[6] Notwithstanding the refusal of the application, Cleverlad made available its 2010 audited financial statements to Venmop. These B financial statements showed that the indebtedness was probably not disclosed. This evidence was taken into account and mentioned in the arbitrator's final award, which did not accord the documents much weight. It was noted that the financial statements were introduced late in the trial and Cleverlad's main witness was not cross-examined on them. It was said that, although they did weaken Cleverlad's case, they did not C disturb the arbitrator's view that Cleverlad's case had been established overwhelmingly on the probabilities. The arbitrator dismissed Cleverlad's claim against the mother and ordered Cleverlad to pay to the mother half the defendants' costs on the High Court scale.

The affidavits D

[7] The efficient conduct of litigation has as its object the judicial resolution of disputes, optimising both expedition and economy. The conduct and finalisation of litigation in a speedy and cost-efficient manner is a collaborative effort. The role of witnesses is to testify to relevant facts of which they have personal knowledge. The role of legal E representatives has two key aspects. First is the supervision, organisation and presentation of evidence of the witnesses and, secondly, the formulation and presentation of argument in support of a litigant's case. The diligent observation of those roles facilitates the role of the judicial officer, which is to arrive at a reasoned determination of the issues in dispute, in favour of one or other of the parties. Where practitioners F neglect their roles, it leads to the protracted conduct of the litigation in an ill-disciplined manner, the introduction of inadmissible evidence and the confusion of fact and argument, with the attendant increase in costs and delay in its finalisation, inimical to both expedition and economy.

[8] In motion proceedings, affidavits serve a dual function of both G pleadings and evidence (Radebe and Others v Eastern Transvaal Development Board 1988 (2) SA 785 (A) at 793D – F; Minister of Land Affairs and Agriculture and Others v D & F Wevell Trust and Others 2008 (2) SA 184 (SCA) para 43; Absa Bank Ltd v Kernsig 17 (Pty) Ltd 2011 (4) SA 492 (SCA) ([2011] ZASCA 97) para 23; Foize Africa (Pty) Ltd v Foize Beheer BV and Others H 2013 (3) SA 91 (SCA) para 30). In Choice Holdings Ltd v Yabeng Investment Holding Co Ltd 2001 (3) SA 1350 (W) ([2001] 2 All SA 539) para 34 Goldstein J, in a judgment of the full court, summed up the principle thus:

'In application proceedings the affidavits serve two purposes: first that of I pleadings, ie delineating the facta probanda or essential averments necessary to found a cause of action or defence, and, secondly, the supply of the facta probantia or evidence to support a finding of the correctness of the facta probanda.'

[9] A consideration of these references reveals that the emphasis on the dual function of affidavits in motion proceedings is highlighted where the J

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A affidavits contain conclusions or allegations of a depth that is sufficient for a declaration, but are deficient in evidence of the facts upon which those conclusions or allegations are based. Deponents to the affidavits are testifying in the motion proceedings. Save in urgent applications for interim relief to restrain irremediable injury and to keep matters in status quo, B where otherwise inadmissible hearsay might be permitted (Cerebos Food Corporation Ltd v Diverse Foods SA (Pty) Ltd and Another 1984 (4) SA 149 (T) at 157E – G), there is no authority that the admissibility of the evidence of a witness in motion proceedings is somehow different from that in a trial action.

C [10] Inadmissible material falls to be struck out of affidavits, as does matter, in terms of rule 6(15), which is scandalous, vexatious or irrelevant. In the past, observance and enforcement of the rules through strike-out applications consumed a great deal of time and resources. These applications lead to an increase in costs and delay in the D finalisation of the proceedings — the polar opposites of economy and expedition. Strike-out applications were thus discouraged. For the past 50 years, rule 6(15) has required an additional element: that the court be satisfied that the applicant for the striking-out would be prejudiced if an order were not granted. Thus, almost 50 years ago, Margo...