Beacon Island Shareblock (Pty) Ltd v Larowiz (Pty) Ltd and Another (19/26749) [2019] ZAGPJHC 280 (9 August 2019)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, JOHANNESBURG

CASE NO: 19/26749

In the matter between:

Beacon Island Shareblock (Pty) Ltd

Applicant

And

Larowiz (Pty) Ltd

First

respondent

Adv. MM Rip, SC NO

Second respondent

Judgment

Van der Linde, J:

[1] This is an urgent application brought by a private company which owns a famous tourist landmark in this country, popularly known as the Beacon Island Hotel in Plettenberg Bay. The applicant seeks to have a favourable arbitral award made an order of court under section 31 of the Arbitration Act 42 of 1965. Since the arbitrator who was joined as second respondent appropriately took no part in these proceedings, I will refer to the first respondent simply as the respondent.

[2] The arbitral award, made on 22 July 2019 by the arbitrator, advocate MM Ripp, SC, directs that the respondent be evicted from the kitchen and certain restaurant facilities in the hotel on the basis that he held that the lease agreement between the applicant and the respondent had been validly terminated by the applicant. The urgency of the application is not disputed and the only resistance to the relief claimed is that the respondent wishes to exercise what it calls its “right” within six weeks of the publication of the award, to remit a “matter” to the arbitrator for reconsideration under section 32 (1) of the Arbitration Act.

[4] As to the merits and the asserted unlawful resistance by the respondent to an acceptance of the award of the arbitrator, the relevant facts are that the arbitrator heard both parties, in the case of the respondent represented by senior counsel, and pursuant thereto published his award. It is not disputed that the arbitration agreement that found at that procedure formed part of the lease agreement between the parties and that the arbitration agreement expressly provided that the parties could apply urgently to court to enforce any arbitral award made pursuant to the arbitration proceedings envisaged in the arbitration agreement.

[5] That provision is anathematic to the notion that the losing party in an arbitration is entitled by mere assertion of an intended remittal application to resist an application under section 31 to make an award an order of court until six weeks will have elapsed after the publication of the award. Generally, an arbitration award is final and binding, as section 28 of the Act expressly proclaims. Section 32 is an exception. If such a remittal is not by agreement as envisaged in section 32(1), an application as envisaged in section 32(2) may be brought within six weeks after publication.

[6] In this case there is no counter-application for a remittal, and there is not even an application for a postponement of this application in order to enable the respondent to bring an application for remittal. All that there is, is the expression of an intention to apply to remit a matter to the arbitrator.

[7] Without suggesting that Mr Aucamp for the respondent advanced such a notion, I would reject the proposition that the mere assertion of an intention to apply to remit a matter could block an application under section 31, if the intended application for remittal had no prospect of success. To the contrary, in terms of section 32 (two) the threshold for a successful remittal is “good cause”.

[8] This standard was discussed by the Supreme Court of Appeal in Leadtrain Assessments v Leadtrain 2013 (5) SA 84 (SCA) at [14] to [16]. The court held:

“[15] It is not desirable to attempt to circumscribe when ‘good cause’ for remitting a matter will exist. It will exist pre-eminently where the arbitrator has failed to deal with an issue that was before him or her – which was what occurred in York Timbers – but once an issue has been pertinently addressed and decided there seems to us to be little room for remitting the matter for reconsideration. The guiding principle of consensual arbitration is finality – right or wrong – and we see no reason why an award of costs is to be treated differently to any other aspect of an award. It would be extraordinary if the conduct of an arbitrator that falls short of the strict constraints of s 33(1) were nonetheless to be capable of being set aside and remitted for reconsideration under s 32(2). As pointed out in Benjamin v Sobac South African Building and Construction (Pty) Ltd, correctly, the effect of so holding would be to emasculate the provisions of s 33(1). However one approaches the question what is ‘good cause’ it seems to us that it inexorably requires something other than to mere error on the part of the arbitrator.

[9] Has a case been shown of something more than “a mere error on the part of the arbitrator”? Two popular notions used to describe thresholds of this kind, are a “prima facie case”, and “a triable case”. On the assumption that the latter notion is more favourable to the respondent, and without suggesting that that should be the standard, I will examine whether the “matter” which Mr Aucamp identified as that which will be remitted to the arbitrator, meets that threshold.

[10] He explained that the respondent wished to remit to the arbitrator the proposition which appears in the answering affidavit in the following terms: “The first respondent has substantially and per aequipollens complied with the contractual obligation the purported breach of which the second respondent relied upon in making the award.”

[11] Counsel did not suggest that this proposition was not advanced on behalf of the respondent to the arbitrator during the hearing; to the contrary, this court was addressed on the basis that the proposition was in fact advanced to the arbitrator but that the arbitrator “did not have regard to it”. It was not submitted that the arbitrator did not determine the full ambit of the dispute that had been referred to him. And it was not submitted that the arbitrator did not have regard to all the evidentiary material that was placed before him.

[12] In this regard the parties had agreed that no viva voce evidence would be led but that only the pleadings which had preceded the hearing and pertinent documents be placed before the arbitrator. It is also relevant that in terms of the arbitration agreement, the jurisdiction of the arbitrator was equitable; it was to “… decide the matter submitted to him on what he considers just and equitable in the circumstances and, therefore, the strict rules of law need not be observed or taken into account by him in arriving at his decision.”

[13] Counsel did not suggest that the arbitrator deliberately closed his mind to the proposition referred to above. Therefore it seems to me that the real thrust of the respondent’s case is that the result to which the arbitrator came inferentially justifies the conclusion that the arbitrator did not have regard to the identified proposition.

[14] But that is of course not the only inference that the result to which the arbitrator came, justifies. The inference may also be that the arbitrator came to his conclusion on the basis that he did not accept the validity of the proposition that was advanced

on behalf of the respondent, as identified above. And there is nothing to suggest that this inference is the less probable of the

two. But either way, the respondent’s case does not aspire even to the suggestion that the arbitrator erred. As I see it, the expressed intention to apply for a remittal does not disclose a triable case for a remittal application. It therefore has, in my view, no prospect of success.

[15] Counsel for the applicant referred the court to Kolber and Another v Sourcecom Solutions (Pty) Ltd and Others; Sourcecom Technology Solutions (Pty) Ltd v Kolber and Another, 2001 (2) SA 1097 (C) (approved in Leadtrain) in which Brand, J (then) said at [61]: “a party to arbitration proceedings should not be allowed to take the arbitrator on appeal under the guise of a remittal in terms of s32 (2).”

[16] In my view, at best for the respondent, that is what it seeks to do in this case. More probably, however, the respondent has not put up a bona fide response to the application under section 31, and is simply attempting to delay the order which is sought. That is conduct which in my view is deserving of the censure of this court, in the form of a special costs order.

[17] In the result I make the order below, which follows the wording of the arbitral award:

(a) the arbitral award delivered and published by the second respondent, advocate MM Rip, SC, on 22 July 2019 and the next to the founding affidavit as “FA 2”, is made an order of court.

(b) The first respondent, and all persons or entities claiming title through and under the first respondent, evicted from the premises in the Beacon Island Resort, Beacon Isle Crescent, Plettenberg Bay, Western Cape, measuring 1093 meter squared in extent, as depicted on the plans annexed to the lease as “A1” – “A10” to “SOC.1” to the statement of claim in the arbitration proceedings, and are to vacate the premises within five days from the date of this order.

(c) The first respondent is ordered to pay the applicant’s costs of the application on an attorney and client scale.

Date Argued: 8 August 2019

Date Judgment: 9 August 2019

WHG van der Linde

Judge, High Court

Johannesburg

For the applicant: Adv. CJ Bresler

Instructed by:

Kritzinger Ellish Attorneys

Applicant’s attorneys

Tel: 031 3014477

Fax: 031 3014483

Ref: Kritzinger/BEA3/0001

abri@keinc.co.za

ashleigh@keinc.co.za

For the first respondent: Adv. S Aucamp

Titan Incorporated Attorneys

First respondent’s attorneys

Tel: 011 5341579

Ref: S Titan/ldp/SP0064

stitan@mweb.co.za