CASE LAW UPDATE

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: The matter came before the court on the return day of a rule nisi issued calling upon the respondents to show cause why sanctions defined in the order of the court a quo should not be imposed upon them for contempt of court. The applicants are the trustees of the Heron Cove Body Corporate, a body corporate and residential community scheme. Limelight Property Solutions (first respondent) is a close corporation that operates a managing agent business for body corporates and homeowners’ associations. Grillenberg (second respondent) is the sole member and controlling mind of Limelight Property. The order found the respondents to be in contempt of the court’s order, imposed sanctions subject to the rule nisi, and awarded attorney and client costs to the body corporate. The sanctions so proposed are a judicial fine of R100,000 upon Limelight Property, and 90 days' imprisonment upon Grillenberg respectively.

Application: The body corporate no longer pursues the imposition of sanctions against the respondents, yet recognises the court’s prerogative to maintain its dignity and authority, and to nevertheless impose an appropriate sanction in view of its earlier finding that the respondents were in contempt of court. The respondents seek the discharge of the rule nisi.

Discussion: Grillenberg’s explanation for her supine attitude and disregard for the court’s orders is that she did not register their existence and significance. This was attributable to her falling into a major depression from late 2022, precipitated by the stress of a pending divorce from her husband. That stress was exacerbated by the dependency of her special needs adult daughter, aged 28, who, due to chronic separation anxiety, does not leave her side at any time. A measure of compassion for sufferers such as Grillenberg is appropriate. Grillenberg professes that until she consulted with her attorney and counsel on 25 June 2024, she did not have any awareness (appreciation of the meaning) of the correspondence addressed to her by the body corporate or its attorney from 25 January 2023 onward, or of the adjudication order, or of the July 2023 order. This explanation is not plausible, for several reasons. Grillenberg would have had to instruct her attorney and counsel on the correspondence and orders, and could only have done so if she was conscious thereof. She had participated in the exchanges of correspondence in a coherent manner. For a protracted period, Grillenberg was unwilling to purge her contempt.

Findings: Although she sketched a picture of gross neglect of her self-care due to her depressed state of mind, she adduced no admissible medical evidence that her mental health impeded her day to day functioning to such a degree that she was unable to register the existence of the July 2023 order, to comprehend its significance, and to appreciate the exigency with which she needed to take steps to comply therewith. There is no evidence that she was utterly incapacitated when she was served with the order. The respondents ought to have conducted themselves in a manner congruent with the gravity of a contempt finding: showing humility, contrition and a willingness to swiftly make amends. Grillenberg’s account does not exhibit the level of conduct that the court can expect. There is no remorse expressed for her breach of the order. The explanation for her delay in purging her contempt, substantially, but not completely, only by 27 May 2024, is unsatisfactory. It is not appropriate that the respondents escape sanction. Grillenberg’s poor mental health over an extended period, the difficulties in her personal life, and her responsibility for her adult dependent daughter do not constitute a licence to disregard a court’s order, but the court has taken account of them in structuring the sanction.

Order: The order of 2 July 2024 is varied. The first respondent shall pay a judicial fine in the amount of R100,000. The second respondent shall be committed to imprisonment for a period of 30 days, to be served as periodic imprisonment at weekends, such sentence of committal suspended on condition that she does not again commit the offence of contempt of court.

GORDON-TURNER AJ

Facts: The main application relates to disputed municipal charges, water and electricity consumption. The applicant contends in the main application that the charges are incorrect. The basis for this contention is that there has been no consumption at the property since August 2010; on four occasions between 2013 and January 2016 the representatives of the City (respondent) have recorded meter readings of 48,066 kWh and 3,633 kWh of its property; and during August 2021 the building on the property was demolished and the meters at the property were removed due to vandalism and still bear the readings referred to above. The applicant seeks the discovery of documents used by the respondent’s employees when they recorded consumption at the property. The documents sought are, so contends the applicant, the best evidence of the consumption at the property at various stages.

Application: This is an opposed interlocutory application for an order that the provisions of Rule 35(13) read with Rule 35(11) of the Uniform Rules of the court relating to discovery, apply to the main application brought under the main case. The issue for determination is whether the applicant is entitled to the production of the job card documents.

Discussion: The documents sought include job cards used in recording and quantifying the consumption. The applicant contends that the records ought to exist and should be discovered. It contends that if the documents required are made available, clearance certificates will be issued in respect of the property. This is so, given the genesis of the disputes that go back many years relating to the incorrect billing by the respondent in respect of the applicant’s property. The respondent’s defence is that the readings are correct because the tax invoices attached to the answering affidavit and the readings are either based on the actual consumption or estimated consumption. This is highly disputed by the applicant who states that no business activity has been taking place at the property since 2010. The applicant contends that it is not able to reply to the respondent’s answering affidavit because the first respondent’s answering affidavit is based on sources based on hearsay evidence. This is so because the deponent thereof is a legal advisor as opposed to someone who may have had a direct input in the generation of the tax invoices.

Findings: The court disagrees with the respondent. Mainly, that the job cards, which are the basis of the tax invoices generated for electricity consumption, were not listed in the answering affidavit and that the applicant is not entitled to have them discovered. The discovery of the job cards is an important factor to resolve the dispute relating to the consumption because the applicant has not been operating a business on the property since 2010. The job cards of the actual meter readings will enable the court seized with the main application to assess the veracity of the evidence before it and to make a determination. The discovery of the job cards is critical because, as the applicant contends, for the respondent’s representatives to record the information they collected from the actual meter reading when there was no business operating on the property does not represent the true situation. The buildings on the property were demolished by the applicant during August 2021 and the two meters were removed because of vandalism. The discretion to order the job cards to be discovered is appropriate and in the interest of justice. The applicant has succeeded in establishing that exceptional circumstances exist allowing for the discovery of the job cards relating to the disputed meter readings.

Order: The respondents are ordered to produce, under oath, the documents referred to in annexure “A”, or to confirm that such documents do not exist and the reasons therefor, within 5 days of the order.

SENYATSI J

Facts: The plaintiff is a 62-year-old teacher. A protection order was obtained by her brother, a 65-year-old retired former soldier and government employee, with whom she resided on the same property. She testified that she owns the property and pays the bond and the utility costs. She claims that her brother is addicted to drugs, does not work and does not contribute financially to the expenditure of the household. The brother laid a complaint at the Randfontein Police Station that she had contravened the protection order. The police arrested her while she was with her grandchild, despite her denials of contravening the protection order. On her appearance in court three days later, she was released on bail. The charges against her were later withdrawn for want of evidence.

Application: The plaintiff has claimed damages for unlawful arrest and detention. Her version is that at no stage during the arrest or detention was she afforded the opportunity to make a statement and that she never threatened to kill her brother or swore at him. Her testimony is that he had no reason to be afraid of her as he is a man of large stature and a former soldier in the liberation struggle and a very brave man.

Discussion: The arresting officer only received basic training on domestic violence and has, since he completed basic training, never received any further training on domestic violence. One of his functions is the executing of domestic violence arrest warrants, of which he executes between 5 and 10 per month. He does not know the contents of the Domestic Violence Act 116 of 1998 and specifically section 8, where the discretion dealing with arrest is contained. He does not know about the existence of National Instruction 7 of 1999 dealing with the conduct of police officers in dealing with complaints of domestic violence. He did not consult with the complainant and did not verify the contents of his statement or enquired what had transpired since the complainant had deposed to the statement. It was him who made the decision to arrest the plaintiff and detain her until Monday morning and not to take her to court on the Friday so that she could apply for bail.

* See from para [51] on the SAPS National Instruction 7 of 1999.

Findings: Due to the variety of conduct that could constitute domestic violence, the Act provides for arrest with a warrant only in those instances where there is a real danger that the complainant could be at risk of harm. For a warrant of arrest to be executed, an additional element has to be present, namely reasonable grounds for the existence of imminent harm to the complainant. The determination of the existence of the additional element has been assigned to the arresting officer in terms of the provisions of the Act. The guidelines in the National Instruction contain specific factors to be taken cognizance of by the arresting officer in exercising his or her discretion whether to arrest or not. These instructions are peremptory in nature and contain sanctions for contravention. None of the factors were considered by the arresting officer. He was not even aware thereof. Neither were any of the factors mentioned in the Domestic Violence Act considered by him.

Order: The arrest and detention of the plaintiff by the employees of the Minister was unlawful and the Minister is liable for any damages proved. The Minister is liable for the costs of the action on the scale as between party and party.

RAUBENHEIMER AJ