Naidoo v Mile Downe Manor Body Corporate and Another (7232/2012,36030/2011) [2013] ZAGPJHC 73 (15 March 2013)

NOT REPORTABLE

IN THE SOUTH GAUTENG HIGH COURT, JOHANNESBURG

REPUBLIC OF SOUTH AFRICA

CASE NO. 7232/2012

CASE NO. 36030/2011

DATE:15/03/2013

In the matter between:

NAIDOO, SUDESH..........................................................................APPLICANT

and

MILE DOWNE MANOR BODY CORPORATE.........................1ST RESPONDENT

GIULIO LUCCARDA....................................................................2ND RESPONDENT

JUDGMENT

MONAMA J

[1] In this matter there are two applications. These are a review application [Case No 7232/2012] and application for an order making the arbitration award the order of this court [Case No 36030/2011]. The issue and parties in both applications are the same. Accordingly they were heard together.

[2] I deal first with the review application which is brought in terms of Section 33(2) of Arbitration Act, 42 of 1965 “the Act”. The applicant in this review application relies on the following grounds:1

The arbitration process was conducted in his absence; He was denied the right to be legally represented; The arbitrator displayed history of prejudging the issues; The arbitrator held an erroneous view that the applicant was employing delaying tactics when he requested the matter to be postponed.

The applicant,Sudesh Naidoo, is a highly qualified businessman and resides at Unit 6, Mile Downe Manor, French Lane, Morningside, Johannesburg. He acquired this unit on or during 1995. He is the respondent in the application under case no 36030/2011. for the confirmation of the arbitration award. I will refer to him as “the applicant” throughout this judgment.

[3] The first respondent in the review application is the Body Corporate of Mile Downe Manor. Its chosen domicilium is Whitfield Property Management, 37 Grosvernor Road, Bryanston, Johannesburg. It is incorporated according to laws of South Africa. I will refer to it as the “first respondent” in this judgment.

[4] The second respondent is the sectional title consultant. He presided over the arbitration proceedings in which made the award. His business address is 104 Lee Ann, 75 Dorothy Road, Norwood, Johannesburg.

[5] During 2003 the applicant became involved in a series of disputes with the first respondent. These centred around the management, electricity, maintenance, repairs, salaries and wages of the security services.2 The upshot of the dispute was the institution of the arbitration proceedings. This happened in October 2003. Mrs Erasmus of Cliff

Dekker was appointed as an arbitrator. The late Lester Fuchs of Harry-Goss Attorney represented the applicant.

[6] In May 2007 Mrs Erasmus withdrew as an arbitrator. Form the date of her appointment until her withdrawal there was insignificant progress. During January 2010, the second respondent was appointed by the Deed Registry as an arbitrator in terms of the provisions of the Sectional Title Act. The applicant was represented by Mr Fuchs whodied in April 2010.The firm Snaid Edworthy was appointed to represent the applicant.

[7] During December 2010 the applicant terminated the services of Snaid Edworthy. In February 2011 Mr A Du Plessis was appointed by the applicant to represent him. On 8 March 2011 Mr Du Plessis informed the second respondent that there were problems in getting the files pertain to this matter from Snaid Edworthy Attorneys.

[8] On 16 March 2011 the second pre-arbitration meeting was held. In April 2011 the first respondent changed the attorneys. They subsequently appointed Steward-Garden Attorneys. On 14 July 2011 the first respondent supplemented its statement of the case. At that stage the tentative date of hearing was agreed. This date was 19 and 20 July 2011.

[9] On 19 July 2011 the second respondent rescheduled the hearing to 10 and 11 August 2011. The pre-arbitration was accordingly set down for 2 August 2011. In the meantime the applicant became dissatisfied with the services of Mr Du Plesssis.

[10] On 2 August 2011, the applicant terminated the services of Mr Du Plessis. At the same time the applicant then appointed Attorney Dev Maharaj to represent him.

[11] On 11 August 2011 Mr Maharaj appeared for the applicant before the second respondent. He came late and the proceedings were delayed in order to accommodate him. The matter was rolled over to 12 August 2011.The applicant’s attorney was in default. The applicant appeared alone and without any documentation. The request for a postponement to obtain legal representation was denied and the process proceeded in his absence.A full and comprehensive efforts of arbitrator to have the proceeding going are well documented. 3 The contents of paragraphs 6 – 11 above must be read together with paragraphs 1 – 74 of the arbitrator’s award in which he itemised his efforts to get the proceedings started. At the conclusion of the hearing an award was made.

[12] On 29 August 2011 the second respondent delivered the award. At the end of August 2011 Mr Maharaj withdrew. On 21 September 2011 the first respondent launched an application in this court to have the award made the order of court. The order was granted by default on 9 November 2011.

[13] On 24 November 2011 the first respondent issued a writ for payment of the sums in terms of the ward. The writ prompted the applicant into same action. On 4 and 9 December 2011 the applicant issued motion proceedings claim the following reliefs.

“1. That the order against the Applicant on the 9th November 2011 in favour of the Respondent be and is hereby rescinded.

2. That the Applicant be and is hereby granted leave to oppose the Respondent’s application to have the arbitration award made an order of court.

3. That the costs of this application be borne by the Respondent.”

In this application the applicant was then represented by Charmane Pillay & Company of Pietermaritzburg. These attorneys chose the applicant’s residence as address for service processes. The application was opposed although the first respondent had difficulties in effecting services of process. Sometimes processes had to be served on the security officer guarding the complex.

[14] The first respondent filed its answering affidavit on 14 December 2011. On 15 February 20102 the following order was granted:

“1. The order of Masipa, J on 9 November 2011 is rescinded.

2. Respondent is to file its answering affidavit by 24 February 2011 [sic 2012], such answering affidavit must include all material on which the Respondent intends to Defend this action with including a condonation application and arbitration review.

3. Costs reserved.

The respondent in this judgment refers to Mr Naidoo. The answering affidavit refers to the replying affidavit because the first respondent had already filed its answering affidavit on 14 December 2011

[15] It is common cause that the award was published on 26 August 2011 and hand delivered to the applicant on 29 August 2011. On 21 September 2011 the first respondent served a notice to have the award made an order of court. By then the applicant still had an opportunity until 3 October 2011 to set aside the award. He chose to remain inactive and passive until 4 December 2011 when Charmane Pillay and Companylaunched the proceeding referred to above.4 The present attorneys only came on board during 27 November 2012. In this regard the applicant statement that:

“I instructed my present attorney of record to oppose the first respondent’s application to have the arbitration made an order of court”.5

is not correct. He was referring to Charmane Pillay and Company and not Edward Nathan Sonnenberg, his present attorneys.

[16] On 24 February 2012 the applicant brought what is purported to be the condonation and review applications. He contends that the proceedings of 11 August 2011 constituted a miscarriage of justice and violated his right to a fair and proper hearing because the award was made in his absence. The first respondent is opposing the review application. The basis of the defence is that the applicant by his own conduct refused to participate in the proceedings. The respondent argued that he embarked on the delaying tactics. On the other hand the applicant contends that he should have been granted a postponement. He also argued that the first respondent also caused the delay during 2004 and 2010. Reference to this period is not entirely relevant.

[17] The second respondent is not opposing the application. He is abiding by the decision of the court.

[18] Before I deal with the issues and grounds relied upon in this application itis necessary to determine whether the provisions of the Act6 were complied with insofar as the setting aside procedures are concerned. There are time limits stipulated for setting aside of

award. The Act provides that:

“-An application pursuant to this section shall be made within six weeks after the publication pursuant to this section shall be made within six weeks after the publication of the award to the parties: Provided that when the setting aside of the award is requested on the grounds of the commission of an offence referred to in Part 1 to 4, or section 17, 20 or 21 (in so far as it related to the aforementioned offences) of chapter 2 of the Prevention andCombating of Corrupt Activities Act, 2004, such application shall be made within six weeks after the discovery of the offence and in any case not later than three years after the date on which the award was so published-“7

An award may be set aside on limited grounds. These are misconduct by arbitrator in relation to the duties, gross irregularity in the conduct of the proceedings, the exceeding of power and that the award obtained improperly.

[19] The proceeding to set aside the award commenced on 24 February 2012. This is some approximately twenty-five weeks later. In his application for condonation he has placed scant facts as to what caused the delay. He stated that:

“I pause to mention that the arbitration was served on my wife on or about the 29th August 2011 and which document my wife furnished to me a few days later. I also need to mention that by about the end of August 2011 Mr Maharaj of his own accord and by his own election withdrew as my attorneys. Hence, by the time I became aware of the award during or about the first week of September 2011, I was significantly confused about what steps to take to address my predicament.

My situation became significantly worse when during or about 21st September 2011 the first respondent served me with its notice of motion to have the arbitration made an order of court. I eventually instructed my present attorneys of record to oppose first respondent’s application to have the arbitration award an order of court. Since I was denied the opportunity to ventilate my defence by the second respondent’s refusal to permit me legal representation it was determined by my attorney that the proper approach would be to seek the first respondent’s co-operation to have the proceeding’s that it instated against me stayed to enable me to embark on the appropriate review proceedings.

The first respondent refused to provide its co-operation and instead pursued with its application to make the arbitration award made an order of court, which is subsequently managed to do by default on the 09th November 2011. When I became aware of the fact that the first respondent had obtained the court order against me by default during

or about the third week of November 2011 I initiated rescission proceedings which the first respondent opposed and which was finally determined in my favour on the 15th February 2012.”See Para 6.45 – 6.51 Page 20 of the record”.

In my view the analysis of these paragraphs does not reveal any acceptable reason why he was in default. When the application of the 21 September 2011 was served he should have acted. He had series of attorneys. The applicant is an astute businessman He had Accounting Science Honours Degree from Unisa.The Act provides that:

“-The court may, on good cause shown, extent any period of time limit fixed by under this Act whether such period has expired or not.”8

The applicant has not approached this court for such extension. There is no acceptable explanation for this delay. This delay is inexcusable and on this fact alone the review application stands to be dismissed.By virtue of his training and qualification and indeed his dealings with various attorneys he should have known the importance of an award. It is not good enough to say he was confused. The non-compliance with the time limits complete with the failure to advance reason renders the application for condonation to be dismissed.

[20] The main issue between the parties is whether the conduct of the second respondent in proceeding with the hearing constitutes a miscarriage of justice or whether the respondent was justified in proceeding with the hearing. First, it is paramount that the tribunal acts fairly and impartial manner. By the same token the tribunal must act expeditiously and without undue delay. The arbitrator is a neutral empire whose function is to resolve the dispute according to the facts place before him. He has no interest in the matter at all.

[21] It is axiomatic that arbitration should be held in the presence of the effected parties. This is part of the rule of procedural fairness. I have been preferred to the decision where it was held that:

“-One of the most important rules applicable to arbitration is that proceedings should not be conducted in the absence of the parties.”9

I am in full agreement with the above statement. It is in accordance with the principle of fair trial. However, the rule is not immutable. I do not understand the statement to suggest that in every case the matter must proceed in the presence of the affect parties. It will be inappropriate to consider same as a law of Medes and Persians. It depends on the facts of each case. In appropriate cases, such as recalcitrancy, it may be in the public interest to proceed with the matter in the absence of the other party. This is also provided for in public law matters.10

[22] The record is replete with instances of unnecessary request for postponements.There are various instances of changing, dismissing, rehiring attorneys by the applicant. The question is and remains whether there was:

“good and sufficient cause”11

for the applicant’s inability to attend the proceedings on 12 August 2011 as arranged with Mr Maharaj. I am not persuaded that good and sufficient cause was demonstrated. It will be wrong to look at the conduct of11 and 12 August 2011 alone. To gain a complete picture regard must be had to the behaviour of the applicant as a whole since the inception of the proceedings.

[23] The applicant’s argument that because it was the first hearing the arbitration was obliged to grant a postponement. This argument fails to appreciate the position of the body corporate.The first respondent had financial obligations to meet. The applicant was not paying anything. This position has endured for a considerable time. It was for his benefit to delay the proceedings for as long as he could. It was urgent that this matter is bought to some finicality. The applicant was on a project to frustrate the finalisation thereof by his stratagems. He changed his attorney. He rehired the dismissed attorney. He dictated to them what to do and whento do it. When they do not oblige he dismisses them. Certain attorneys, such as Mr Maharaj appears without a proper notice of appointment. This is unacceptable and in my view he had to take a robust attitude. In any event the applicant had the services of Advocate Riley who appeared during the pre- arbitration hearing and never withdrew.

[24] The attitude of Mr Maharaj is unacceptable. The matter was postponed on 11August 2011 to the next day to accommodate him. He never indicated that the date does not suit him. The engagement which he attended was a conference. I am not satisfied that attending a conference is “a good and sufficient cause” for non-attendance. Mr Maharaj arranged the date with the arbitrator. Arrangements for the arbitration to proceed must be followed. The next day the applicant’s attorney defaults. The applicant appears and demands a postponement in aggressive manner. It later transpires that Mr Maharaj attended the conference. In my view,

this demonstrates the delaying tactics alleged. Accordingly, the arbitrator was justified to proceed with the hearing as he did. In my view the applicant is the only person to blame. He was indeed looking for a reason to later attack the fairness of the process.

[25] The applicant’s argument on the perceived bias stand to be rejected. The comments of the arbitrator must be seen in the light of the tactics of the applicant. The arbitrator remained calm in the face of extreme form of provocation. He maintained composure throughout. It must be mentioned that the arbitrator is a neutral person and is called to adjudicate the facts. However, he is not a traffic light nor a statute. He was expected to control the proceedings.

[27] The delay in bringing this application is yet another indication of the applicant’s stratagem. Taking all the evidence and factors mentioned above into consideration, I make the following order.

ORDER

Application for condonation is dismissed with costs. The review application is dismissed with costs.

Theaward of arbitrator dated 26 August 2011 in made an order of court. The applicant is ordered to pay the costs under case number 36030/2011.

The applicant is ordered to pay the reserved costs of the rescission application under case number 7232/2012.

___________

RE MONAMA

JUDGE OF THE SOUTH GAUTENG HIGH COURT

Counsel for the applicant: Adv. AL Roeloffze

Instructed by: Edward Nathan Sonnenbergs, Johannesburg

Counsel for the first respondents: Adv. M Lennox

Instructed by: Stewart-Garden Attorneys, Johannesburg

Counsel for the second respondent: No appearance.

1Paragraph 3 of the applicant’s heads of argument

2See Pages 8-9 Paras 6.6 of the record.

3See Paragraphs 1-74 on pages 335 – 341 of the record.

4See Paragraph 13 above

5See Paragraph 6.50 on Page 20 of the record.

6 Section 33 of the Arbitration Act

8Section 38 of Act 42 of 1965.

9Body Corporate Houghton Villas v Get Construction (Pty) Ltd 2002(1) SA 760 (WLD)

10See Section 159(1) of the Criminal Procedure Act 51 of 1977

11Shippel v Morkel and Another 1977(1) SA 429 (CPD) at 435 F-G and Section 15(2) Act 42 of 1965 as amended.