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

• Jurisdiction: South Africa
• Citation: 2016 (1) SA 78 (GJ)

Venmop 275 (Pty) Ltd and Another v Cleverlad Projects (Pty) Ltd and Another
2016 (1) SA 78 (GJ)

2016 (1) SA p78

Citation	2016 (1) SA 78 (GJ)
Case No	2014/14286
Court	Gauteng Local Division, Johannesburg
Judge	Peter AJ
Heard	February 3, 2015
Judgment	August 3, 2015
Counsel	MM Segal for the applicants.; JK Berlowitz for the second respondent.

Flynote : Sleutelwoorde F

G Practice — Applications and motions — Affidavits — Length of — Caution as to — Practice to include statement by deponent that he made legal submissions based on legal advice, followed by such submissions — Criticism of practice.

Review — Procedure — Record on review — Applicant's duty to select relevant material from record, to serve as evidence — Consideration of — Uniform H Rules of Court, rule 53(3).

Evidence — Admissibility — Statement that is part of negotiations for settlement of dispute.

Arbitration — Procedure — Times fixed under Act — Extension of, if 'good cause' I shown — Nature of 'good cause' — Arbitration Act 42 of 1965, s 38.

Arbitration — Award — Setting-aside of — Right to apply for — Doctrine of peremption can be applied to right — Arbitration Act 42 of 1965, s 33(1).

Discovery and inspection — Failure to discover documents — Application to court to order their production — Whether court has discretion to not order J production of relevant documents — Uniform Rules of Court, rule 35(7).

2016 (1) SA p79

Headnote : Kopnota

Cleverlad Projects (Pty) Ltd obtained an arbitration award against A Venmop 275 (Pty) Ltd for the payment of a debt recorded in a written acknowledgment. Cleverlad later demanded payment of the award, and Venmop in response offered to immediately pay R50 000, and thereafter R10 000 each month. Cleverlad rejected the offer. Then, nearly 18 weeks after the publication of the award, Venmop applied to set it aside, on the basis of an B alleged gross irregularity on the arbitrator's part in the conduct of the proceedings. This was that he had refused to order the production of certain of Cleverlad's financial documents, despite concluding that they were relevant. (He acknowledged in his reasons for the award that if the documents contained reference to the debt, this would support Cleverlad's case; and if they didn't, it would support Venmop's defence.)

The issues were the following: C

(1) The length of the affidavits.

The court noted with disfavour the length, particularly, of Cleverlad's answering affidavit. It was 40 pages in extent without annexures, and Cleverlad's representative conceded that stripped of argumentative matter it would be reduced to a third of its size. (Paragraphs [14] – [15] at 87G – 88F.) D

The affidavit, made by Cleverlad's director, also included a statement that where he made legal submissions, he did so on the strength of legal advice. It was followed by voluminous argumentative submissions.

Held, that this practice was questionable in four respects:

(i)

the submissions had no evidential content;

(ii)

were hearsay; E

(iii)

constituted legal opinion on matters the court was required to decide; and

(iv)

it was unfair to allow selective disclosure of a privileged communication, where the disclosure was to secure an advantage in proceedings. If the substance of legal advice were revealed, fairness would require disclosure of the whole. (Paragraph [16] at 88F – 89H.)

(2) The proper use of Uniform Rule 53(3). F

Rule 53(1) allows an applicant to call the party who presided over a proceeding sought to be reviewed, to dispatch its record to the registrar of the High Court. Rule 53(3) then provides that 'the applicant shall thereupon cause copies of such portions of the record as may be necessary for the purposes of the review to be made' and for the applicant to furnish those copies to the registrar and other parties. G

Held, that it was the applicant's duty to select from the record only that which was relevant, to serve as evidence in the review. Only what was selected served as evidence. (Were the respondent of the view that documents contained in the part of the record not selected were relevant, it could introduce these as annexures to its answering affidavit. And any part of H the record not selected, which was needed by the applicant to rebut the respondent's answer, could similarly be introduced in an annexure to the replying affidavit.) (Paragraph [17] at 89I – 90D.)

The practice adopted by Venmop in the present case was to be deprecated: it had provided a written transcript of the arbitration proceedings numbering approximately 2400 pages, as well as pleadings, and 500 pages of documents. I This matter was included as the evidence to be considered. It made no attempt to discriminate between what was — and was not — relevant; nor did it supplement its notice of motion or deliver a supplementary affidavit; indeed all that was referred to — in argument — were four pages of the transcript. These could have been included as an annexure to an affidavit. (Paragraph [18] at 90D – G.) J

2016 (1) SA p80

A Court cautioning practitioners to heed rule 53(3), and to direct their minds to what was relevant. (Paragraph [19] at 90G – H.)

(3) Whether Venmop's letter, in which it offered to pay the amount of the award in instalments, was privileged and inadmissible.

Held, that a statement forming part of negotiations for the settlement or compromise of a dispute was privileged and inadmissible. (Paragraphs B [1] and [20] at 83E – H and 90H – 91A.)

Here, the letter was aimed at extending the time for payment of the award, and at the moment it was written, there was no dispute in existence. Consequently it was not privileged, and was admissible. (Paragraph [21] at 91A – D.)

(4) Whether Venmop had demonstrated good cause to extend the six C weeks it had had in which to apply to set aside the arbitration award.

(Venmop had made its application nearly 18 weeks after publication of the award.)

Section 33(2) of the Act requires that an application to set aside an arbitration award must be made within six weeks of the award's publication. Section 38 provides that if good cause is shown, the court may extend any D period of time under the Act.

'Good cause' comprises (1) a reasonable explanation for the delay; and (2) a bona fide case on the merits with some prospect of success. (Paragraph [23] at 91F – G.)

Held, that Venmop's explanation — that its new attorneys had taken time to E familiarise themselves with the matter before making the application — was inadequate. However, this might be compensated for, and good cause nonetheless shown, if there were strong prospects of success. (Paragraph [24] at 91G – 92B.)

Whether there were such prospects was dependent on the outcome of issues (5) and (6).

(5) F Whether Venmop had acquiesced in the award and so perempted its right to set the award aside.

Held, that while there was no precedent for applying the doctrine of peremption to a right to set aside an arbitration award, there was no reason to not do so. (Paragraphs [25] and [26] at 92B – F and 92F – H.)

Here, the only inference to be drawn from the letter offering to satisfy the award, G was that Venmop had acquiesced in it and perempted its right to set it aside. (Paragraph [27] at 92H – I.)

(6) Whether it had been grossly irregular for the arbitrator, having found the financial documents of Cleverlad to be relevant, to decline to order their production in terms of rule 35(7).

H (It states, 'If any party fails to give discovery . . . the party desiring discovery . . . may apply to a court, which may order compliance with this rule . . . .')

Held, contra the assertion of Venmop, that even where documents were relevant, the court retained a discretion in terms of the rule to not order their production. (Paragraphs [29] – [30] at 93C – H.)

Here there was no irregularity, the refusal to order production of the documents I stemming from careful consideration on the arbitrator's part. In any event, Cleverlad had voluntarily produced the documents (which Venmop had then introduced into evidence) — so it could not be said that the refusal prevented the full and fair determination of Venmop's case. (Paragraph [31] at 93H – 94A.)

Good cause for an extension of time not shown, and application dismissed. J (Paragraphs [32] and [34] at 94B – C and 94H – I.)

2016 (1) SA p81

Cases Considered

Annotations A

Case law

Southern Africa

Absa Bank Ltd v Kernsig 17 (Pty) Ltd2011 (4) SA 492 (SCA) ([2011] ZASCA 97): referred to B

Bothma v Protea Furnishers (Pty) Ltd1970 (3) SA 180 (O): referred to

Camps Bay Ratepayers' and Residents' Association and Another v Harrison and Another2011 (4) SA 42 (CC) (2011 (2) BCLR 121; [2010] ZACC 19): dictum in para [76] applied

Cerebos Food Corporation Ltd v Diverse Foods SA (Pty) Ltd and Another1984 (4) SA 149 (T): referred to C

Chetty v Law Society, Transvaal1985 (2) SA 756 (A): referred to

Choice Holdings Ltd v Yabeng Investment Holding Co Ltd2001 (3) SA 1350 (W) ([2001] 2 All SA 539): referred to

Claase v Information Officer, South African Airways (Pty) Ltd2007 (5) SA 469 (SCA): dictum in para [11] applied

Competition Commission of South Africa v Arcelormittal South Africa Ltd and Others D 2013 (5) SA 538 (SCA) ([2013] ZASCA 84): referred to

Continental Ore Construction v Highveld Steel & Vanadium Corporation Ltd1971 (4) SA 589 (W): dictum at 594 – 595 applied

Dabner v South African Railways and Harbours1920 AD 583: dictum at 594 applied

De Wet and Others v Western Bank Ltd1979 (2) SA 1031 (A): E dictum at 1042 applied

Ellis v Morgan; Ellis v Dessai 1909 TS 576: dictum at 581 applied

Epstein v Christodoulou and Another1982 (3) SA 347 (W): referred to

Ex parte Minister van Justisie: In re S v Wagner1965 (4) SA 507 (A): referred to

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