
Spartan
Caselaw
CASE LAW UPDATE
22 November 2024
ARBITRATION – Arbitrator – Removal – Transnet having sought arbitrator’s recusal in another matter – Harsh words used to describe arbitrator’s conduct – Transnet in current matter seeking arbitrator’s removal – Assertion that arbitrator failed to disclose the prior legal dispute – Potentially compromised his impartiality – Arbitrator breached the duty to disclose – Previous communications mean that Transnet will not have confidence that arbitrator will render an unbiased verdict – Arbitrator is removed – Arbitration Act 42 of 1965, s 13(2).
Facts: The arbitration process between Transnet and Umhlatuze initiated in June 2021. The parties agreed that King SC would serve as the arbitrator. Another division of Transnet, Transnet Pipelines, was engaged in an arbitration with a company called Spill Tech. Transnet Pipelines initiated an urgent application in the High Court to prevent King from continuing with that arbitration. Transnet Pipelines sought King’s recusal based on assertions made in their founding affidavit, which included comments that his “approach has been unfortunate and flawed at best, and dismissive and callous at worst.” Transnet criticised King's ruling on his jurisdiction as being “questionable at best, and downright unfair at worst.” King delivered his decision in the matter between Transnet and Spill Tech, ruling in favour of Transnet. The following day, the urgent application seeking his removal as arbitrator was removed from the roll, since it was rendered moot in light of his ruling.
Application: Transnet brings this application for the removal of King from his role as the appointed arbitrator in terms of section 13(2) of the Arbitration Act 42 of 1965 which provides recourse, on application by any party to court, to set aside the appointment of or remove an arbitrator from office, on good cause. The basis for Transnet's application is its assertion that King failed to disclose the prior legal dispute that potentially compromised his impartiality, giving rise to a reasonable apprehension of bias.
Discussion: Transnet contends that, had King informed them that he was a respondent in a matter where Transnet SOC sought to interdict his involvement in an arbitration, they would have immediately sought his removal. They further argue that this, combined with his perceived "bad attitude" and "hostility" towards them in the current arbitration, makes him unsuitable to continue. Transnet contends that King’s failure to disclose the Spill Tech litigation, especially given his later stance that Transnet should have been aware of it as a single corporate entity, lacks reasonable explanation. Transnet submits that it is significant that King found the allegations in the Spill Tech matter offensive, using the term “disparaging” to describe them. This conclusion is understandable considering the litigant’s use of terms such as “flawed, callous, dismissive, and unsuited” to describe an arbitrator’s conduct. It was contended that any right-minded litigant, having levelled such remarks against an arbitrator and having regard to his response thereto, would likely apprehend prejudice in a subsequent hearing before the same arbitrator, especially one occurring just months later.
Findings: King concluded that a reasonable person, after reading his decision in the Spill Tech case, could not objectively and reasonably find him biased against Transnet Pipelines. However, the critical issue is whether there was a duty on King, having become aware of the nature of the allegations against him by Transnet in the Spill Tech matter, to have as soon as possible thereafter, disclosed the existence of that litigation, as well as his response thereto. As King breached the duty to disclose, the court is satisfied that the facts of the matter warrant the granting of an order for his removal as arbitrator. Furthermore, In light of the missives exchanged between the applicant’s legal representatives and those of Umhlatuze, as well as towards the arbitrator who has been accused of acting in a manner that raises the likelihood of impartiality and bias, too much water has passed under the bridge for the parties (or for the applicant, at least) to have confidence that King will render an unbiased verdict. A fair and just result would be best served by having a fresh perspective cast on the dispute between the parties, with the proceedings commencing de novo before a new arbitrator.
Order: King SC is removed as an arbitrator in the arbitration between Transnet and Umhlatuze General Sales. Each party is liable for its own costs.
CHETTY J
CRIMINAL – Evidence – Witness – Testifying via video link from abroad – Objection raised by defence – State contends granting application will prevent unreasonable delays – Evidence of witness is crucial as case for State stemmed from his evidence – Exceptional circumstances present – Accused’s rights not infringed – Witness from overseas can testify via video link in terms of section 158(2) – Application granted – Criminal Procedure Act 51 of 1977, s 158(2).
Facts: The State requests that the witness Marcenaro, an Italian citizen, who currently resides outside the Republic of South Africa, present his evidence by way of electronic media or video link. The State has argued that this application is just and in the interest of justice as it shall prevent unreasonable delays, in that a State witness is willing and readily available to give evidence despite the passage of time between the date of the incident and the current proceedings. It shall save costs to the State in that the witness will not need to be physically in attendance at court and most importantly, the evidence of this witness is crucial as the case for the State stemmed from his evidence. The defence has opposed the application citing that the State has not provided any reasons for the absence of the witness in South Africa or why the witness is not able to be present at court to testify, despite the witness having been present in the Republic at the time he presumably made a statement in the case.
Application: This is an interlocutory application to allow a witness who is abroad to testify via video link. The defence referred the court to the practice directive of this Division where it is stated that cases to be heard physically by default will be all criminal cases and all civil cases where oral evidence is to be heard, but that in the case of civil cases at the discretion of a judge, such cases may be heard in part physically and in part by way of video link, or wholly by video link if sound reasons are present to do so. This matter is a criminal trial and the question the court must consider is, should there be any difference between a civil court allowing evidence via video link as opposed to a criminal trial.
Discussion: Section 158 of the Criminal Procedure Act 51 of 1977 has made provisions for a witness to give evidence by means of closed-circuit television or similar electronic media, whether it is an initiative taken by the court itself, or by the State or any other party in criminal proceedings. The primary purpose of this section is to ensure that proceedings before courts are fair. The qualification is that courts in exercising this power must consider the interests of justice. It is clear from cases such as McLaggan v S [2013] ZASCA 92 and S v Mabena [2023] ZAGPPHC 1189, that the High Courts and the Supreme Court of Appeal have held that a witness can give evidence by means of closed-circuit television or video link, especially if they are far from the court or when they are abroad. Section 35(3)(e) of the Constitution dictates that the trial of an accused must take place in his presence. The State has argued that the witness is a busy businessman who travels the world and that he currently finds himself in Italy and that he only travels to South Africa when he is required to do so. At this stage, there appears no requirement for business purposes that he should be in South Africa.
Findings: This matter was set down for five days, however, since the commencement of the proceedings, this is the third ruling the court has had to pronounce upon due to the objections raised by the defence. The accused is entitled to object as many times as he wishes, but this will inevitably delay the finalisation of the proceedings. So too will it prevent the State from obtaining a clear date when to tell this witness to be in South Africa to present his evidence. The court finds that the request to proceed by way of video link is justified. There are exceptional circumstances in this matter as the State is applying for the evidence of this witness, who appears to be a key witness, and should be allowed, via a virtual link. The State argues that the entire case revolves around what he has to say as well as the exhibits that will be presented during his evidence. It would be efficient and practicable for this witness to testify, especially since he currently finds himself in Italy and it appears there will be logistical and financial implications to get him to South Africa to testify. The court does not find that the accused’s rights in terms of section 35(3)(e) of the Constitution are infringed.
Order: The application is granted.
DOSIO J
LABOUR – Suspension – Unlawfulness – Suspended pending investigation into allegations of misconduct – Alleges Municipal Council did not resolve to place applicant on precautionary suspension – Issues in question were not introduced by way of motion – Required to be ventilated, deliberated and put to vote – In absence of such, no resolution on issue of applicant’s suspension could validly have been taken – Purported suspension is declared invalid and set aside.
Facts: A special council meeting resolved to consider a decision to place Mr Sithole on precautionary suspension at the following meeting. The Mayor addressed a letter to Mr Sithole in which he was informed that the Municipal Council intended to investigate certain allegations of misconduct against him, and to place him on precautionary suspension pending the outcome of that investigation. He was accordingly requested to provide written representations as to why he ought not to be suspended within seven days of the letter, which representations he duly provided. Later that day, Mr Sithole was notified in writing by the Mayor that the Municipal Council had resolved to place him on suspension on full pay, pending an investigation into the allegations that he had committed misconduct.
Application: The applicant, Mr Sithole, applies for an order declaring his purported suspension as Municipal Manager invalid and set aside, and that the security services provided to him by the municipality prior to his purported suspension be restored. It was Mr Sithole’s case that his suspension was unlawful for the reason that the Municipal Council did not resolve to place him on a precautionary suspension and accordingly that the Mayor lacked any lawful authority to do so. Although he accepted what was purported to be a resolution to this effect, he alleged that such resolution was taken in the absence of any voting by the Municipality’s Council members having preceded it.
Discussion: In accordance with the Standing Rule 19, Municipal Council meetings are required to adhere to a specific format. Of relevance for present purposes is the distinction drawn therein between the types of matters which may serve before the Municipal Council for its consideration and in respect of which decisions may be required to be taken. The manner in which votes are to be cast is prescribed by Standing Rule 30, being by way of a show of hands (unless otherwise elsewhere prescribed), with the result recorded. The respondents did not suggest that the resolution upon which they relied had been taken by way of a vote, and nor did they dispute the correctness of the allegations made that no vote on the issue of Mr Sithole’s suspension had taken place. Instead, they sought to suggest that no vote was required to have been taken as the matter had been dealt with as a motion. The issue of Mr Sithole’s potential suspension had never served before the Municipal Council as a motion.
Findings: The issues in question were not introduced by way of motion. They were accordingly required to be ventilated, deliberated and put to the vote. As this did not happen, no resolution on the issue of Mr Sithole’s suspension could validly have been taken. Mr Sithole’s suspension necessitated that the Municipality appoint its Director: Technical Services to the position of Municipal Manager in an Acting capacity. At the time of her appointment, she was unfamiliar with the work undertaken by the Municipal Manager. The Municipality is in the midst of a regulatory audit which will require responses and explanations regarding its expenditure. This being so, it is inconceivable that the Acting Municipal Manager, whose knowledge of the internal workings and processes of the Municipality is evidently not on par with that of Mr Sithole, will be in a position to properly deal with whatever issues may arise. There is a potential risk that the absence of Mr Sithole will be to the detriment of the accuracy and transparency of the audit itself. The circumstances are such that a failure to grant the relief sought would lead to a grave injustice, and the court’s intervention is warranted.
Order: The purported suspension of the applicant as Municipal Manager is declared invalid and set aside.
ALLEN-YAMAN J
RAF – Intention to defend – Late delivery – Served electronically – Before plaintiff’s attorney had given written consent – Served on eve of hearing for default judgment – Defendant had various opportunities to file notice of intention to defend – Uniform Rule 19(5) not the “go to place” if one has ignored claim and now the clock has struck 12 – No intention to defend before the court – Even if there was, it stands to be set aside as an abuse of process of court.
Facts: In 2022 the plaintiff was the driver of a motorcycle when the insured driver exited a petrol station into the lane of travel of the plaintiff and a collision ensued. The plaintiff sustained various injuries, inter alia, a left scapula fracture, a left clavicle fracture and left rib fracture. The plaintiff is a 48-year-old carpenter. He lost his pre-accident employment at Stoffbaard Meubels as a direct result of the accident. The plaintiff currently works as a self-employed carpenter.
Notice of intention to defend: The matter was before court on the default judgment roll for 3 July 2024. The Road Accident Fund (defendant) electronically served a notice of intention to defend on the attorney of the plaintiff on 2 July 2024 at 4h39 pm according to the proof of service. The notice of intention to defend was uploaded on Caselines also on 2 July 2024. The plaintiff filed a substantive application in terms of Rule 30 for the setting aside of the notice of intention to defend.
Discussion: The notice of intention to defend in this matter was not delivered as prescribed by the Uniform Rules as it was “served” electronically on the attorney of the plaintiff in terms of Rule 19(3) before the attorney of the plaintiff had given written consent that subsequent documents and notices may be exchanged by way of electronic mail. The defendant had some 14 months after the service of summons by the sheriff to defend the claim of the plaintiff. Counsel for the plaintiff raised the issue that the notice of intention to defend was filed and served on the plaintiff’s attorney of record electronically on the eve of the hearing for default judgment, without a condonation application or any explanation for the lateness thereof. It was further argued that this is an abuse of process and should be set aside. Counsel for the defendant argued that such lateness is not an abuse of process and is specifically provided for in terms of Rule 19(5) and as such, no condonation application is necessary.
* See also Nathram v Road Accident Fund [2024] 46876-20 (GP).
Findings: The defendant has not evaluated the matter before it came before court. The defendant therefor could not know whether there are indeed grounds to defend the matter or not. The defendant had various opportunities to file a notice of intention to defend, had the defendant had any desire to defend the matter. Not only did the defendant not comply with the Rules but also used the Rules for ulterior motives and therefore as an abuse of the process of this court. The purpose of Rule 19(5) is not the “go to place” if one has ignored a claim and now the clock has struck 12. The general argument of the defendant in various matters is then that all can be cured by a cost order. There is no intention to defend before the court and even if there was, in the circumstances it stands to be set aside as an abuse of the process of court. The court proceeds to consider the application for default judgment.
* See paras [32]-[36] on the plaintiff's loss of income.
Order: The notice of intention to defend in terms of Rule 19(3) is set aside. The Fund is ordered to pay R823,774.05 for past and future loss of earnings. The Fund is ordered to furnish a certificate as per section 17(4) of the Road Accident Fund Act 56 of 1996. The issue of general damages is postponed sine dies.
KRUGER AJ
INSOLVENT APPLIES FOR REHABILITATION
If one considers that the value of the claims proved against the estate amounted to R545,029.93, as opposed to the liabilities that were disclosed by the applicant in the Statement of Affairs in the amount of R156,305.91, it is obvious that the applicant did not fully disclose his liabilities. The court finds it extremely difficult to believe that any person could have such little grasp of his financial affairs. The court accepts that an applicant may make an error, but in this case the "error" resulted in the applicant under reporting his liabilities by a factor of 3,5. It is much more likely that the applicant's liabilities were purposely understated in order to create the illusion that there would be an advantage to creditors. For that reason, this matter will be referred to the Director of Public Prosecutions for investigation.
CONTEMPT AND FAILURE TO PAY MAINTENANCE
The respondent states under oath that he has no assets. However, in court he confirmed after having been confronted with his SARS return, that he does own a BMW which he is currently using and paying for. He offered this motor vehicle to the applicant as payment for the arrear maintenance. In the same breath he says that he doubts if the applicant will get any money for the motor vehicle as it has no net value. He also offered to transfer an annuity to the applicant if the applicant can find it because according to him, he does not have one. Although the respondent submits that he is not wilful nor mala fides, his conduct points to someone that is intentionally and deliberately not complying with a court order regardless of the consequences, with the intention to deceive. The question is therefore, did the respondent, with his evidence around not being wilful and mala fide, create a reasonable doubt? Did the respondent convince the court that he was not wilful and not mala fide? The court finds that the answer is no.
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