ARBITRATION

Facts: Level Seven concluded a management agreement with the respondent, Signature, under which Signature was to manage Level Seven’s restaurant. The arrangement turned sour and Level Seven cancelled the management agreement. Signature claimed that the cancellation was in fact a repudiation of the agreement and referred a claim for the damages allegedly sustained to arbitration, in line with the arbitration clause in the management agreement. Level Seven defended the claim for damages and brought its own counterclaim. Signature then excepted to Level Seven’s statement of defence and counterclaim on the basis that it failed to disclose a cause of action. The arbitrator upheld the exception, and granted Level Seven leave to amend its statement of claim.

Application: Level Seven noted an appeal against the arbitrator’s decision. Clause 19.9 of the management agreement provides that either party “shall be entitled to review or appeal the arbitrator’s decision, in which case the High Court of South Africa, Gauteng Local Division shall be authorised to determine such review or appeal”.

Discussion: Section 28 of the Arbitration Act 42 of 1965 states that: “unless the arbitration agreement provides otherwise, an award shall, subject to the provisions of this Act, be final and not subject to appeal and each party to the reference shall abide by and comply with the award in accordance with its terms”. This embodies the default position: that, by agreeing to arbitration, the parties generally waive their right to appeal, with the effect that the arbitrator’s decision is final, even if it is wrong. The only rights of appeal are those created by agreement between the parties. Section 28 does not set out to whom an agreed right of appeal lies. The question is accordingly whether the High Court is entitled to assume appellate jurisdiction merely because the parties, relying on section 28, agree that it should.

Findings: To read section 28 of the Act as permitting a right of appeal to the High Court would defeat everything else the Act seeks to achieve, and would contradict the numerous indications elsewhere in the Act that the courts should have no jurisdiction over the merits of an award. The Arbitration Act cannot reasonably be interpreted to permit an appeal to the High Court against an arbitral award. The pursuit of arbitration implies submission to the legal machinery that makes arbitration possible. Under the Arbitration Act, that means the waiver of any right of appeal to the High Court. The right of appeal agreed to in clause 19.9 of the management agreement does not exist and the clause is of no force or effect to the extent that it purports to confer such a right on the parties.

Order: The application to set aside the arbitrator’s award is dismissed. The applicant will pay the respondent’s costs, including the costs of two counsel where employed, which may be taxed on the “B” scale.

WILSON J

Facts and issue: The plaintiff sues the defendant for damages and the return of equipment in terms of a written contract concluded. The defendants raised a special plea that the disputes between the parties are subject to an arbitration agreement. A written contract for the provision of services was entered between the plaintiff and the defendant. The contract includes an arbitration clause.

Discussion: There are several reasons why the opposition to the special plea must fail. First, the plaintiff did not act in terms of section 3(2) of the Arbitration Act 42 of 1965. Second, it did not plead to the special plea. In terms of Uniform Rule of Court 25 the plaintiff is taken to have denied all the allegations in the special plea. Although the plaintiff admitted all the allegations in argument, it persisted in its challenge to the relief. Third, the paragraphs relied upon by the plaintiff set out its case regarding the defendants’ alleged breach of the agreement, and nothing more. On no reasonable reading of these paragraphs, or the declaration, did the plaintiff plead a basis to avoid the consequences of the arbitration clause. Fourth, the allegations in the paragraphs relied upon are not common cause.

Findings: Save for admitting the delivery of the notices of suspension and termination, the defendants denied these allegations. The plaintiff elected not to lead any evidence in support of its opposition to the special plea. The plaintiff did not establish any of the facts upon which it sought to rely in its opposition to the special plea. The plaintiff has not established any reason for the court to exercise its discretion to refuse arbitration.

Order: The action is stayed pending the final determination of the disputes on the pleadings by an arbitrator in terms of clause 24 of the agreement.

Facts and issue: This is Part B of the application brought by the applicants seeking relief declaring that the arbitrator has no jurisdiction to adjudicate the dispute between the first respondent (Paul’s Homemade) and the applicants. The applicants’ case is predicated in their view that the franchise agreement that they entered with Paul’s Homemade offends certain provisions of the Consumer Protection Act68 of 2008. The applicants seek to invoke the provisions of section 52(1)(a) and (3) of the CPA on the basis that Paul’s Homemade contravened sections 40, 41 and 48 of the CPA.

Discussion: The applicants contended that, in the light of the fact that they intend to invoke section 52(1)(a) and (3) in their defence, the arbitrator has no jurisdiction to adjudicate the disputes between the parties and only a court can determine the issues. It was further submitted that upon a plain reading of section 52 of the CPA, it is a jurisdictional requirement that the matter be before a court, and not an arbitrator or tribunal, and clearly reserves the jurisdiction relating to remedies in terms of section 52 of CPA for the courts. This court does not agree with the suggested interpretation of the said provision of the CPA. The interpretation proposed by the applicants does not take into consideration the context of the legislation in question. Section 52 does not oust the jurisdiction of the arbitrator.

Findings: The applicants, in their objection to the arbitration process, state that the reason is because they intend to raise the provisions of section 52 of the CPA as a defence. A proper reading of section 52 envisages a litigant bringing a claim, as a consumer and as dominus litis. It does not afford a defendant or respondent the right to rely on the section as a defence. Section 52 can be invoked only in those situations where the CPA does not provide a remedy sufficient to correct the relevant prohibited conduct, unfairness, injustice or unconscionability. The parties voluntarily entered into an agreement that made provision for the resolution of disputes between them, which incorporated arbitration.

Order: The application is dismissed.

Facts and issue: Application to review and set aside an arbitration award. During Ms Masilela's shift, she administered medicine to Mr Basson via the wrong line. The hospital claims damages from V & A for the financial losses it alleges to have led as a result. The claim was referred to arbitration. The arbitrator gave an award in favour of the hospital. V & A relies exclusively on section 33(1)(b) of the Arbitration Act 42 of 1965 in support of the relief it seeks. The section provides for the review and setting aside of an award if an arbitration tribunal has exceeded its powers or committed any gross irregularity in the conduct of the arbitration proceedings.

Discussion: V & A’s first argument is that the arbitrator exceeded her powers by interrupting its counsel’s cross-examination. Even accepting that this review ground goes to anything other than substantive jurisdiction doesn’t assist V & A. The arbitrator was empowered to make findings of fact. She had to be able to understand witnesses’ answers to questions and know that the answers witnesses gave were in reply to questions they understood. The remaining nine arguments seek to convince the court that the arbitrator committed a gross irregularity in her conduct of the arbitration proceedings. Any argument based on this ground must have as its primary focus the methods or conduct of the arbitrator in her conduct of the proceedings they agreed upon. V & A’s second argument is that an irregularity occurred in the conduct of proceedings because the arbitrator was biased.

Findings: The assertion of bias has no merit and never had any prospects of success. While V & A’s founding affidavit is by no means clear on the point, the impression one is left with, is that the arbitrator eventually agreed with counsel for V & A that he is not to be interrupted during his cross-examination. This happened in the presence of the hospital’s legal representative. The arbitrator’s only “failure” was therefore not to directly reprimand the legal representative of the hospital. Even if the applicant’s failure to place any reliance on section 13 of the Act is overlooked, no good cause has been shown for the removal of the arbitrator.

Order: The application is dismissed with costs.

Facts and issue: Weinberg brought arbitration proceedings seeking payment of monies lent and advanced to the applicant, Kesef. Kesef failed to honour its payment obligations under the loan agreement. The learned arbitrator made his award in favour of Weinberg. Kesef seeks to have the award set aside and roots its cause of action in section 33(1)(a) and (b) of the Arbitration Act on the basis that the arbitrator is said to have displayed irregular and biased conduct to the prejudice of Kesef and which resulted in the arbitrator committing several gross irregularities in conducting the arbitration proceedings.

Discussion: The crux of the complaint is that the learned arbitrator showed partiality to Weinberg and his legal representatives to the detriment of the applicant and its legal representatives. There is no evidence to show that the arbitrator misconducted himself. The record does not begin to hint at it. The arbitrator appeared to be mindful of the attempts of Kesef to derail the arbitration proceedings and did no more than what he was entitled to, namely, to exercise the wide discretion entrusted to him to ensure the just, expeditious, economical, and final determination of all the disputes raised in the proceedings. He was therefore free to approach the matter as he deemed fit to ensure the expeditious resolution of the dispute before him with the parties in electing to resolve their dispute by way of arbitration, having chosen to forgo the strict formalism routinely association with High Court litigation.

Findings: Kesef expressly pleaded its case on repudiation in its statement of defence. It was accordingly before the arbitrator when he issued the award. Mr Garratt acknowledged that the learned arbitrator had the power to make the determination and it was incumbent on Kesef to prove a repudiation and its subsequent cancellation of the loan agreement before the learned arbitrator. It failed to do so and by making an award in favour of Weinberg, he by implication dismissed any defence based on an alleged repudiation by Weinberg. No basis exists to stay the enforcement of the award. There is in the circumstances no reason why the award should not be made an order of court. The allegations of bias levelled against the arbitrator lacked substance.

Order: The application is dismissed. The arbitration award is made an order of court in terms of section 31(1) of the Arbitration Act 42 of 1965.

Facts: This entire matter arose from a coal supply agreement (CSA) concluded between the applicant (Eskom) and the respondents. A dispute arose between the applicant and the respondents concerning a renegotiation of the pricing mechanisms under the CSA. This resulted in the respondents terminating the CSA on the basis that the applicant had allegedly repudiated the CSA. The arbitrator upheld the respondents’ alternative claims in the arbitration and awarded them R696,243,120.42 in damages. The applicant was dissatisfied with the award and noted an appeal. This was done by way a written notice of appeal sent to the respondents and the arbitrator. The respondents indicated that they were only prepared to submit their nomination of an appeal arbitrator under article 22.5 of the Arbitration Foundation of Southern Africa (AFSA) rules but were awaiting the directive from the Secretariat of AFSA as to the fees payable, before making its nomination. AFSA effectively refused to accept the appeal, because it did not administer the arbitration from the outset. The respondents’ view is that the applicant’s appeal had lapsed.

Application: The applicant seeks declaratory relief as against the respondents, that it be declared that an appeal, noted by the applicant against a private arbitration award in favour of the respondents, be declared not to have lapsed. Associated relief sought by the applicant is that it be directed that the arbitration appeal panel be formally appointed, so that the appeal proceedings can get underway.

Discussion: The applicant did file a notice of appeal promptly, being some five days after delivery of the arbitration award. The notice of appeal was served on all the parties involved in the appeal, including the arbitrator. That would at least prima facie constitute compliance with clause 33.6.2 of the CSA, as it reads. The respondents allege that the appeal notice should have been delivered to the Secretariat of AFSA. The distinction between an arbitration conducted under the auspices or administration of AFSA itself on the one hand, and an arbitration that is conducted by the parties themselves by applying the rules of AFSA, becomes critical. In terms of the AFSA Rules themselves, it is intended that these Rules apply as they stand, in all respects, only where AFSA administers the arbitration proceedings. The appeals process found in article 22 of the AFSA Rules clearly contemplates proceedings where AFSA administers the appeal itself. Conducting an arbitration outside the auspices/administration of AFSA, but "in accordance with" the AFSA Rules, must mean the applying of only those AFSA Rules that may be applicable to the conducting of the arbitration proceedings itself, subject to the specific processes prescribed in the arbitration agreement.

Findings: The CSA prescribed how not only the original arbitrator had to be appointed, but also how the appeal arbitrators should be appointed. This does not in any manner involve AFSA but requires appointment by the parties themselves. It should not be expected that notices are required to be issued to AFSA in the circumstances. The parties managed the exchange of pleadings, and the conducting of the arbitration process themselves, under the auspices of the arbitrator herself. That being so, it can hardly be now said that the proceedings are irregular or invalid because it may not have followed what is prescribed in the AFSA Rules about the referral of the dispute and then administration of the arbitration. It cannot be expected that a process, such as a notice of appeal, be delivered to an institution such as AFSA where such institution is not involved in the arbitration of the case at all. Such an action cannot serve any purpose. What is being propagated by the respondents is notice for the sake of notice, without the notice serving any purpose. The applicant has noted a proper appeal as contemplated by clause 33.6.2 of the CSA, and such appeal is valid and extant. The applicant’s appeal has accordingly not lapsed.

Order: It is declared that the applicant’s appeal against the arbitration award has not lapsed.

SNYMAN AJ

Facts: The Development Bank (applicant) agreed to advance funds to Proline Trading, for the purpose of funding, by way of a loan, a property development being conducted by Proline. This agreement was reduced to writing and was contained in a document known as a Loan Facility Agreement (LFA). In terms of the LFA, the applicant advanced a total capital amount of R125 million to Proline, payable in tranches as the development progressed. Suretyships were concluded between the applicant and the respondents. The applicant issued summons and an order ensued that the litigation be stayed pending the outcome of private arbitration. The LFA provided for private arbitration to resolve any disputes between the applicant and Proline.

Application: The applicant seeks to make the arbitration award an order of court as contemplated by section 31 of the Arbitration Act 42 of 1965. The award was in its favour, with the respondents’ claim for rectification having been disposed of by the arbitrator, and is uncontested. In a counter-application, the respondents have prayed for either the dismissal of the applicant’s application, alternatively the stay of the proceedings until a further claim the respondents have instituted in the High Court against the applicant has been decided.

Discussion: Despite being ordered to do so in the award, the respondents refused to pay the R12,500,000 and this led to the current application to make the award an order of court, for the purposes of execution thereof against the respondents. The conduct of the respondents in this case and by raising a new defence (regarding their release from the suretyships) is lamentable. What happened in this case flies squarely in the face of what is sought to be achieved by way of private arbitration proceedings, which is to finally resolve all disputes between the parties and bring a final end to the litigation in an expeditious manner. The broad issue in both instances, is that the release of the respondents from their suretyships based on the terms of the LFA and suretyships and as a result of certain payment, was agreed to be arbitrated, and not be continued to be litigated. The respondents simply cannot do a volte face and return to litigation in the High Court again.

Findings: In conducting a comparison between the proceedings before the arbitrator and the proceedings before this court, it is clear that the parties to the dispute remain the same and the facts remain the same. The consequential relief demanded (sought) is also the same. The only difference between the case before the arbitrator and the case now articulated in the respondents’ new particulars of claim, is the issue of rectification. The distinction is of little consequence when considering the facts and the legal principles that have to be decided. The respondents cannot approbate, and rely on rectification, but when that does not turn out well for them, reprobate, and rely on the very same contractual provisions without seeking rectification. The claim/defence proffered in the counter application is not competent, either because it had been disposed of in the arbitration proceedings and thus being hit by the application of res judicata, or by way of the application of the “once and for all” rule, or because the respondents had made an election to which they must be held bound.

Order: The arbitration award is made an order of court. The respondents’ counter application is dismissed. The respondents are ordered to pay the applicant’s costs on a party and party scale C.

SNYMAN AJ

Facts and issue: Application for a stay of arbitration proceedings, currently before the arbitrator, pending the outcome of an action instituted by the applicant under the action proceedings. The applicant’s case is that the respondent made fraudulent misrepresentations in its bid documents. Therefore, alleges the applicant, the contract must be reviewed and set aside in terms of section 172 of the Constitution.

Discussion: In its tender bid document, the respondent made representation that it had in its employment various experts and specialist employees relevant to the energy saving services to be rendered. None of the experts or specialist employees listed were employed by the respondent at the time of the tender nor were they informed of the intention to procure their services for the contract in question. Since none of the persons were employees of the respondent, those representations were not only false but also fraudulent. Crucially, in response to the allegations of fraudulent misrepresentations, the respondent submitted that the deponent of the founding affidavit did not allege and prove any involvement in the tender evaluation process. Furthermore, it was submitted that the applicant had not even presented the reports generated in the tender process to demonstrate the award was made on the strength of the information in the tender documents.

Findings: Upon a proper reading of the particulars of claim, the court concludes that s 217 of the Constitution is pertinently raised in the particulars of claim and must be dealt with. The issues of alleged fraud and misrepresentation in the bid documents are too serious and the response to them leaves one with more questions than answers. Therefore, the applicant has established the existence of a prima facie case albeit open to some doubt. Moreover, if the applicant prevails in the action proceedings, the court will have to deal with the provisions of s 172(1)(b) and that is beyond the jurisdiction of an arbitrator. If the matter were to proceed before the arbitrator without the conclusion of the action proceedings, there is a well-grounded apprehension of irreparable harm that will be suffered by the applicant, not least the waste of public funds.

Order: The arbitration proceedings are stayed pending the outcome of the action proceedings.

Facts and issue: Application to review and set aside the arbitration award made by the arbitrator in arbitration proceedings between the applicant (employer) and second respondent (contractor). The ground of the review is that the arbitrator committed a gross irregularity in the conduct of the arbitration proceedings and/or exceeded his powers as contemplated in section 33(1)(b) of the Arbitration Act, No. 42 of 1965. The issue in dispute relates to the form of the final award the arbitrator made in relation to financial entitlements. The contractor submitted that it was entitled to an award sounding in money for payment together with interest thereon to the date of payment.

Discussion: The applicant submitted that the appropriate method by which the arbitrator should have given effect to the financial consequences of the revisions of the date for practical completion agreed to and awarded was to give an effective award to ensure that such financial consequences were processed by way of interim and/or final payment certificates issued in terms of the payment provisions of the contract. The applicant stated that the arbitrator committed a gross irregularity and/or exceeded his powers by making a final arbitration award for the payment of the amount sounding in money which was incompetent as it was inconsistent with his ruling of 21 August 2015 (2015 ruling) and confirmed on 25 November 2017, and also by making an award sounding in money which the Practical Agent could not have made and which was not permissible under the provisions of the PBA. The arbitrator stated in his 2015 ruling and November 2017 letter that he did not have a jurisdiction to make a “free standing” award which could be enforced outside of the contractual framework and that he considered his jurisdiction and power to extend to directing the applicant to include certain amounts in subsequent interim certificates and/or a final account and/or payment certificate.

Findings: The arbitrator added that the contractor’s claim in the pleadings is not for a lump sum but rather for reversal of the penalties, additional time related costs, additional escalation and the like. He made the award on the merits of the remaining claims in accordance with the ruling. The award of payment of a lump sum and an amount sounding in money is inconsistent with the 2015 ruling which was binding on the arbitrator, and November 2017 letter. The arbitrator could only award that which was in accordance with the terms of reference. He does not have inherent jurisdiction to decide matters which are not pleaded. By making the aforesaid award the arbitrator purported to exercise a power that he did not have. The jurisdictional challenge must therefore succeed.

Order: The arbitration award is reviewed and set aside.

Facts and issue: The applicant (Juvansu) applies to review and set aside an award made by an arbitrator in a dispute between the parties. The dispute has its origin in a dealer and supply agreement. In his Award on the separated issues the arbitrator held that the suspensive conditions had been fulfilled and that the settlement agreement had been concluded, and what the terms of the settlement agreement were. The applicant’s review raises the question of whether the arbitrator had jurisdiction.

Discussion: The arbitration clause allows the arbitrator to adjudicate the “termination” and “invalidity” of the agreement. The adjudication of the termination and invalidity of the agreement must include the adjudication of the continued existence of the agreement and the validity of the agreement. This in turn necessarily requires the suspensive condition issue to be determined by the arbitrator. The arbitrator had the power to determine whether the suspensive conditions had been fulfilled, and there is no basis to set aside the award on the basis that the arbitrator exceeded his jurisdiction in deciding this issue. In addition, Juvansu has argued that the arbitrator erred in finding that the agreement was valid. This criticism is founded on Juvansu’s view that the arbitrator erred in his assessment of the evidence that was presented to prove the fulfilment, or waiver, of the suspensive conditions. An error of the type suggested by Juvansu does not found a ground to review the award. The award declaring that the agreement was valid and binding following the fulfilment of the suspensive conditions is an issue that fell within the arbitrator’s jurisdiction and there is no basis to interfere with that finding. Accordingly, the suspensive condition issue must be decided against the applicant.

Findings and order: The application is dismissed with costs.

Facts and issue: This is an application, primarily, for specific performance of a Members Share Sale Agreement concluded between the applicants and the respondent. The agreement related to the sale, by the applicants, of their member’s interests in a Close Corporation (Sawatdi) to the respondent. The applicants allege that the respondent has failed to make full payment of amounts that are owing under the agreement.

Discussion: The respondent’s answer to the claim is that he is not liable for payment because the applicants did not perform their obligations in terms of the agreement, and because he has a claim against the applicants arising out of alleged defects in the liquor store premises. The respondent’s preliminary point is that there is a dispute between the parties which should be resolved by arbitration in terms of the arbitration clause of the agreement. It is clause 11.8.2 which is decisive. This clause permits a party to bypass the submission to arbitration, otherwise required by clause 11.1, and approach a competent court provided two conditions are met. First, the order sought must be for the payment of a liquidated amount of money. Second, the claim must be based on facts which were not bona fide in dispute at the commencement of such proceedings. The applicants’ claim for the unpaid stock is based on facts which were not bona fide in dispute at the commencement of these proceedings. The respondent does not dispute that the valuation was done. Nor does he dispute the value agreed. These are the relevant facts on which the applicants’ claim is based and they were not bona fide in dispute when the application was launched.

Findings: The applicants’ claim for R312,813.40 did not have to be submitted to arbitration, by virtue of clause 11.8.2 of the agreement. The applicants’ claim for payments to suppliers does not appear to lie in the agreement. The applicants have not pleaded sufficient facts to establish that the requirements of clause 11.8.2 are satisfied. The respondent has not established that his failure to pay the outstanding amount for the stock is justified.

Order: The respondent is ordered to pay the applicants the amount of R312,813.40. All other disputes between the parties may be submitted to arbitration in terms of clause 11.1 of the agreement.

Facts: The Strategic Fuel Fund Association (respondent) maintains South Africa’s strategic energy feedstocks and has oil storage installations at the Saldanha Terminal in concrete storage tanks, with a combined capacity of 45 million barrels of oil. A crucial aspect of the respondent’s function is to be able to measure accurately the precise volume of crude oil that is discharged into the tanks and subsequently exported out. To achieve this mandate, it issued a tender to procure service providers. Krohne (appellant) was successful, with the KOG metering system. A dispute later arose in regard to the accuracy of this metering system, which dispute was referred to arbitration. The parties reached a settlement agreement, whereby they agreed to refer the question of the accuracy of the KOG metering system to a third-party expert for determination. The settlement agreement was endorsed by the arbitrator, who issued it as an interim award. The parties appointed SGS Gulf Limited (SGS) as the third-party expert.

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Appeal: The appellant issued an application in the High Court in which it claimed payment on the basis of the SGS report, contending that the report disposed of the dispute between the parties. The appellant contended that the report confirmed that the metering systems operated within the specification agreed to by the parties. The High Court determined the matter on a completely different question to the central dispute in the affidavits. It was a question raised in the respondent’s argument, namely whether the appellant was barred from advancing a cause of action based on the arbitral award. The High Court dismissed the application and its reasoning included that the parties did not elect, without going to arbitration, to appoint an expert whose decision would be binding upon them and finally resolve the dispute. The High Court found that the interim award was patently in conflict with material provisions of the Arbitration Act 42 of 1965.

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Discussion: The crisp issue in this appeal is whether the appellant’s claim against the respondent, based on the enforcement of an arbitral award (the interim award) is founded on a valid cause of action. The High Court erred in its approach when it digressed from the main dispute raised in the papers, and dealt with a collateral issue raised in argument, styled as a point in limine. The issue before the High Court was not the validity or otherwise of the interim award. The issue before the High Court was whether the SGS report concluded that the system operated as set out in clauses 8, 9 and 10, read with clause 6.1 of the interim award. Clause 10 of the interim award was the agreed condition precedent to the payment being affected, in terms of the interim award. The High Court thus misconstrued the issue to be decided before it. The High Court also erred in concluding that the SGS report was not final and binding between the parties. It is evident from clause 5 of the interim award, that the SGS report would be final and binding on the parties. It is the finding in the final report of SGS which constitutes the cause of action.

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Findings: In terms of the definitions in section 1 of the Arbitration Act an “award includes an interim award”. The settlement agreement, signed by the appellant and the respondent to refer the dispute to an independent expert, was endorsed as an award by the arbitrator. This court has endorsed the principle that it is permissible for an arbitrator to record a settlement agreement, concluded by the parties to the dispute before him, as an award in terms of common law. Where the parties to a dispute referred to arbitration reach a settlement agreement on the main issue in the dispute, that could result in the arbitration proceedings being redundant, as there would be no further dispute to adjudicate. This question would be best answered with reference to the circumstances of each case, primarily on the merits. In this instance the High Court did not deal with the merits. This court therefore declines to adjudicate the merits as it is not a court of first instance. An appropriate order in this regard would be to refer the matter back to the High Court for the adjudication of the merits.

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Order: The appeal is upheld. Orders 1 to 4 of the High Court are replaced such that the second point in limine raised by the respondent is dismissed with costs. The matter is remitted to the High Court to be determined on the merits.

MOTHLE JA (NICHOLLS JA, MOLEFE JA, SMITH AJA and MBHELE AJA concurring)