IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 20653/2018

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED.

Date: 08 September 2020

In the matter between:

DAVID KOTZEN N.O. First Applicant

ROBERTO CARLOS DE FREITAS DE Second Applicant
VASCONCELOS

and

THORN VALLEY ESTATE HOMEOWNERS First Respondent

ASSOCIATION
JOSEPHSON, JONATHAN H N.O. Second Respondent

JUDGMENT

FOULKES-JONES, AJ
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1. The application is one in terms of sections 20(1), 32(2) and 33(1)(b) of

the Arbitration Act No. 42 of 1965 (“the Arbitration Act”).

2. Part A of the application relates to the relief claimed in terms of section

20(1); Part B relates to the relief claimed in terms of section 33(1)(b)

and Part C relates to the relief claimed with reference to section 32(2) of

the Arbitration Act; Part D relates to relief claimed with reference to

section 38 of the Arbitration Act.

3. The matter arises from arbitration proceedings between the applicants

and the first respondent before the second respondent, the Arbitrator,

who abides the decision of this Court.

4. The applicants are the trustees of a trust which owns an immovable

property in respect of which there is a dispute as to whether same falls

within the Thorn Valley Estate and thus whether the Trust is subject to

first respondent’s rules of association. The first respondent is an

association as defined in section 1 of the Community Schemes Ombud

Services Act No. 9 of 2011 (“the CSOS Act”) which is responsible for

administering and managing the Thorn Valley Estate (“the first

respondent”).

5. In the arbitration the first respondent was the claimant and the applicants
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were the defendants. The applicants raised three special pleas of which

two are relevant to the current application, namely:

5.1 It was common cause that the first respondent constituted an

association as defined in section 1 of the CSOS Act and that

the dispute constituted a dispute in terms of section 38 read

with sections 39(1)(e) and 2(d) of the CSOS Act, and as such

the second respondent did not have the necessary jurisdiction

to entertain such dispute;

5.2 In terms of section 37(3) of the CSOS Act the rights contained

in the CSOS Act might not be waived or limited;

5.3 In the alternative to the second special plea the applicants

counterclaim for relief as envisaged in terms of section 39(1)

(c), 3(c) or (d) and 7(b) of the CSOS Act on the premise that

the rules that the first respondent intended to rely upon (if

found applicable) were unreasonable, alternatively the first

respondent’s enforcement thereof against the defendants are

unfair, arbitrary, inconsistent and unreasonable.

5.4 That the arbitration be stayed pending the outcome of such an

envisaged referral in terms of section 38 of the CSOS Act.

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6. The second respondent dismissed the second and third special pleas.

7. The applicants (while reserving their rights to set aside such dismissals,

sought that the second respondent refer questions arising from the

dismissal of the special pleas to this Court for an opinion in terms of

section 20(1) of the Arbitration act, which the Arbitrator similarly

dismissed.

8. The first respondent raises the following points in limine:

8.1 The applicants seek in Part A of the application an order that

the second respondent be directed to state certain questions of

law that arose in the course of the arbitration proceedings

between the applicants and the Association before the second

respondent, in the form of a special case for the opinion of the

Court;

8.2 The applicants set out questions of law to be determined by

this Court pursuant to paragraphs 1.1 to 1.5 of the Notice of

Motion;

8.3 Part A of the Notice of Motion is identical to the applicants’

application in terms of section 20(1) of the Arbitration Act No.

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42 of 1065 attached to the applicants’ application in this matter;

8.4 The section 20(1) application was heard before the second

respondent who handed down his award on 23 April 2018. The

latter found no legal merit in the application and dismissed

same, with reasons.

8.5 The section 20(1) application was brought after the second

respondent had made two final awards in respect of the two

special pleas which raised similar legal questions. The result is

that the section 20(1) application was not brought in time,

which was found to be fatally defective for a section 20(1)

application and the second respondent considered the points

raised in the section 20(1) application;

8.6 The second respondent found that there was no material

difference between the points of law raised in the section 20(1)

application and the points of law that were argued in dealing

with the two special pleas. The first respondent further claims

that the legal questions raised in the section 20(1) application

before the second respondent differed from those raised in the

special pleas which were found to have no merit;

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8.7 The first respondent raises that the present application had

already been finally determined between the same parties on

exactly the same points and that the arbitration order is final

and not subject to appeal and cannot be raised again in this

forum;

8.8 The first respondent raises that the application should be

dismissed with costs on a punitive scale as between attorney

and client in that applicants had been aware of the final award

on the same points yet persist to renege on an arbitration order

and to frustrate the very foundations of the arbitration award.

9. The first respondent argues that Part A of the Notice of Motion is simply

an abuse of this Court’s process in that the questions of law sought to be

determined by this Court have been determined not only once but twice.

It also argues that Parts B and C have no legal basis set out in the

papers and stand to be dismissed.

10. Section 20(1) of the Arbitration Act No. 42 of 1964 (“the Act”) provides

that:

“(1) An arbitration tribunal may, on the application of any

party to a reference and shall, if the court, on
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application of such party, so directs, or if the parties

to the reference agree, at any stage before the
making of a final award state any question of law
arising in the course of the reference in the form of a
special case for the opinion of the court or for the
opinion of counsel.”

11. Section 32(2) of the Act states:

“(2) The court may, on the application of any party to the

reference after due notice to the other party or
parties made within six weeks after the publication
of the award to the parties, on good cause shown,
remit any matter which was referred to arbitration, to
the arbitration tribunal for reconsideration and for
making of a further award or a fresh award or for
such other purpose as the court may direct.

and section 33(1)(b) of the Act provides that:

“(1) Where –

(b) an arbitration tribunal has committed

any gross irregularity in the conduct of
the arbitration proceedings or has
exceeded its powers; or
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the court may, on application of any party or parties,

make an order setting the award aside.”

PART A

12. The applicants contend that they have demonstrated that the matters
raised in the special pleas differ from those raised in the section 20(1)
arbitration application whilst there may some overlapping.

13. The applicant also creates a misguided impression that somehow the
process in approaching the Ombud in terms of the Community Schemes
Ombud Service Act 9 of 2011 (the “CSOS”) is peremptory and confuses
the issue of what the term “unsuccessful” means in terms of section 40
(c) of the CSOS. I will touch on this later.

14. The applicant furthermore challenged the arbitrators award on this score
on the basis that there was no reasoning and that he did not exercise a
value judgement.

15. It is common cause that the issues relating to the second and third
special pleas were determined by the second respondent who made
final awards in those respects.

16. The reasoning of the dicta of Harms JA must stand in that the timing of
an application is fundamental to its success or failure. I agree that the
launching of the section 20 application in the arbitration and in this
application is simply an attempt to review the section 20 award handed
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down by the second respondent.

17. I am of the view that the second respondent applied his mind,
considered the issues and relevant case law and arrived at the correct
outcome.

18. I accordingly dismiss Part A with costs on the attorney and client scale.

PART B

19. The applicant submits that the arbitrator had exceeded his powers and
committed a gross irregularity in two respects namely jurisdiction due the
CSOS and the arbitrator failed to deal with the submissions of the
applicant.

20. The applicant places reliance on section 37(3) of the CSOS which
precludes a waiver of rights.

21. The applicant’s averments are misplaced for two reasons:

21.1 The CSOS, with reference to section 38(1) clearly states:

“38. Applications

(1) Any person may make application if such…….”

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22. The word may in the CSOS is clearly not peremptory and does not
impose an obligation on parties to approach the CSOS for relief.

23. The parties clearly consented to the process of arbitration.

24. Section 40 (c) of the CSOS reads as follows:

24.1 “40 Further information…..

After receiving an application, an ombud may

require:

(a)……

(b)…..

(c) the applicant to provide evidence that an

internal dispute resolution mechanism has
been unsuccessful”

25. The above clearly envisages that parties may have endeavoured to
resolve the matter in another forum before approaching the ombud.

26. The nonsensical argument that the word unsuccessful (section 40 {c} of
the CSOS) requires a referral back to a Court for interpretation holds no
grounding.

27. It would be an absurdity if parties who follow a process such as an

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arbitration or even litigation in the Courts would need to refer the entire
matter afresh for determination to the ombud for being “unsuccessful”.

28. This section of the CSOS, I believe would be in the event that some sort
of mediation or attempts at settlement have failed through an alternate
dispute resolution process. In that event the ombud would then proceed
with the process in terms of the CSOS, and not when a matter and
issues have already been ventilated and adjudicated upon.

29. On the basis above Part B is dismissed with costs on the attorney and
client scale.

PART C

30. The second respondent applied himself when making the awards and
the I accordingly dismiss Part C with costs on the attorney and client
scale.

PART D

31. In light of the remainder of my Judgement, PART D is moot.

32. I view the applicant’s application was no more than an attempt to delay
the matter.

33. In the circumstances I make the following Order:

33.1 The entire application is dismissed with costs on the attorney

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and client scale.

K I FOULKES-JONES
ACTING JUDGE OF THE HIGH COURT
GAUTENG LOCAL DIVISION OF THE HIGH COURT, JOHANNESBURG
Electronically submitted

Date of hearing: 05 June 2019

Date of judgment: 08 September 2020

Delivered: This judgement is handed down electronically by circulation to the

Parties/their legal representatives by email. The date for hand-down is deemed
to be 08 September 2020.

Appearances:

For the Applicants: David Kotzen Attorneys

Counsel for the Applicants: Adv. H P van Nieuwenhuizen

For the 1st Respondent: Heather van Niekerk Attorneys

Counsel for the 1st Respondent: Adv. C Marynowski

For the 2nd Respondent: No appearance

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11.1 Kotzen NO and Another v Thorn Valley Estate

Homeowners Association and Another (20653/2018)
[2020] ZAGPJHC 323 (8 September 2020)