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Horizon (Pty) Ltd & Another v Southern District Council & Another (Civil Appeal No. 034 of 2004) [2006] BWCA 15 (27 January 2006)
.RTF of original document
IN THE COURT OF APPEAL OF BOTSWANA
HELD AT LOBATSE
Court of Appeal Civil Appeal No. 034 of 2004
High Court Cases Nos. MISCA 649 OF 2003 and MISCA 651 of 2003
In the matters between
HORIZON (PTY) LTD
1st APPELLANT
MPUISANG TRANSPORT (PTY) LTD
2ND APPELLANT
AND
SOUTHERN DISTRICT COUNCIL
1ST RESPONDENT
JOHN BLACKBURN GITTINGS
2ND RESPONDENT
AND
HORIZON (PTY) LTD
1ST APPELLANT
MPUISANG TRANSPORT (PTY) LTD
2ND APPELLANT
AND
SOUTHERN DISTRICT COUNCIL
RESPONDENT
Lobatse, 23 and 27 January 2006
S. du Toit SC, with him Dr. H. Lever SC for the appellants
J. Peter, with him Mr. B. G. Toteng for the respondents
J U D G M E N T
CORAM:
ZIETSMAN JA
MOORE JA
McNALLY JA
McNALLY JA
1.
These two matters arise out of a series of curiously complicated events. There are really only three parties in the appeals. Mr. Justice
Gittings, the arbitrator in the disputed arbitration, has properly stayed out of the arena. I will refer to the three remaining parties
as “Horizon”, “M.T.” and “the Council” respectively. The Chief Executive Office of MT is Mr.
Mpuisang.
2.
The essential facts are these -
(a)
On 12 November 2001 MT contracted to construct a road for the Council.
(b)
The contract provided, inter alia, that any dispute between the parties in relation to the contract
was to be referred to arbitration.
(c)
The contract also provided for extras and variations.
(d)
By agreement between Horizon and MT, Horizon carried out the work specified in the contract, as
a sub-contractor.
(e)
The Council agreed with MT on 6 December 2001, and in writing, to make direct payment (of sums falling
due under the contract) to Horizon, on condition that the Council “is directed in writing for every claim the specific amount
to be paid”.
(f)
A dispute arose about payment for certain extra work and the dispute was referred to arbitration.
(g)
The arbitration took place between April and June 2003. Although MT was the nominal plaintiff, the
evidence was given by representatives of Horizon. The Council lawyer cross-examined Mr. Pillay, a director of Horizon, as to his
authority to represent MT, and the witness for the Council also contended that Mr. Mpuisang had not “appointed” Mr. Pillay
to bring the proceedings. The Arbitrator ruled that he was satisfied that Mr. Pillay was authorized to act for MT.
(h)
The arbitrator made his award in favour of MT, but directed that the actual quantum be calculated
by agreement between the parties. This was done at a meeting on 26 September 2003 between Mr. Pillay and three representatives of
the Council. Under the headings “Standing Time” and “Processing tests” the lower amount contended for by
the Council was agreed. Under the heading “Haulage Costs” the proposed figure was accepted by the Council. The final
total agreed was P218 744.
(i)
That figure was incorporated into the supplemental Award by the Arbitrator on 24 October 2003.
(j)
On 3 December 2003, in case MISCA No. 651/2003, Horizon lodged a Notice of Motion in the High Court, citing the Council and MT as
respondents. It sought an order under section 20 of the Arbitration Act, Cap 06:01 to enforce the arbitration award in the same manner
as a judgment of the High Court of Botswana.
(k)
It further sought an order that payment under the order be made to Horizon (rather than to MT) and that Horizon’s attorney be
authorized to issue a warrant of execution against the Council and “to do all such things as may be necessary to bring the
execution of the judgment to finality.”
(l)
In his founding affidavit Mr. Pillay drew attention to the fact that Horizon had had great difficulties in contacting Mr. Mpuisang,
the CEO of MT. He was not at his house and his family was not aware of his whereabouts. Accordingly Horizon was making the application,
since it was the party entitled to payment.
(m)
In his supporting affidavit Mr. Lyons states that he is the attorney of record for Horizon and was also the attorney of record for
MT in the arbitration proceedings. He says “I was fully authorized by Mr. Mpuisang, the managing director of (MT) to institute
the said arbitration proceedings and I reported to him on progress thereof until such time as it was no longer possible to locate
him. In particular, the letter I wrote to him informing him of the institution of arbitration proceedings was delivered to him by
hand.”
(n)
The Council opposed this application, relying on an affidavit from Mr. Mpuisang in which he completely denied –
(i)
that MT had referred the matter to arbitration;
(ii)
that it had authorized Mr. Lyons to represent it in the arbitration.
(o)
Meanwhile, on 2 December 2003, the Council, in case MISCA 649/2003, had lodged a Notice of Motion citing MT and Judge Gittings (Horizon
being granted leave subsequently to be joined as a third respondent). In this application the Council sought a declaration that the
arbitration proceedings and award were a nullity, and prayed that they be set aside. It relied essentially on the averments of Mr.
Mpuisang set out in paragraph (n) above.
(p)
The two matters then came before the Chief Justice whose judgment was handed down in September 2004. It is against his judgment that
the present appeal has been lodged.
3.
The learned Chief Justice found in favour of the Council in both matters. In MISCA 649/2003 he set aside the arbitration proceedings
and award as a nullity. In MISCA 651/2003 he ruled that “the application fails in its entirety.” In both cases costs
were awarded to the Council against Horizon.
4.
On 4 November 2004 the Notice of Appeal was lodged, and it is noteworthy that MT appears as an appellant in both matters. It is noteworthy
because MT was, on the face of it, a successful party in MISCA 651/2003. And in MISCA 649/2003, although nominally unsuccessful,
it had lost because of the affidavit of Mr. Mpuisang supporting the Council. So clearly, by the time the Notice of Appeal was drafted,
Mr. Mpuisang and MT had changed sides.
5.
We must examine the judgment of the court a quo to determine what the perceived situation was
at that stage. It becomes evident that Mr. Mpuisang’s change of heart had occurred before the hearing because at page 3 of
the judgment the learned Chief Justice, in a passage that has unfortunately become garbled in the record, but which is clear enough
in its meaning, is recorded as saying the following -
“At the hearing and in a dramatic way counsel for the 3rd respondent (Horizon), sworn his affidavit in Misca 649, against whom Mr. Mpuisang had brought the said Mr. Mpuisang into court and
applied that he be heard in evidence in order that he may contradict the contents of his own and explain how he had been induced
to make it by an officer of the council. That application was opposed on behalf of the council and I held that no oral evidence of Mr. Mpuisang was to be heard unless this court ruled that these applications cannot be resolved without
his and or other evidence” (my emphasis)
6.
The learned Chief Justice then went on to consider the evidence on the record. He came to the conclusion, as a matter of law, in case
MISCA 651/2003, that Horizon had no locus standi to apply under the Arbitration Act for the enforcement of the award.
7.
In regard to MISCA 649/2003 (the Council’s application to have the award declared a nullity) he held that Horizon, not being
a party to the arbitration proceedings, did not have locus standi to appear as a defendant (I think this should be “respondent”) to oppose the application to revoke the award. He went
on to say that –
“Even though there is a dispute as to the position of Mr. Mpuisang, it is a fact that before this court in the application of
the Council Misca No. 649/2003 Mpuisang Transport, the other party to the arbitration, has not entered opposition to the application
of the Council. It seems to me therefore that the application is unopposed. …”
Accordingly he proceeded to make the orders set out in paragraph 3 above, without reverting to the application that Mr. Mpuisang be
heard.
8.
It seems to me with respect that this very compartmentalized approach to the matter has led the court a quo to overlook two vitally
important questions –
(a)
What if Mr. Mpuisang’s retraction is true?
(b)
What are the probabilities that it is true?
9.
If what Mr. Mpuisang now says (or, more correctly, what he apparently wants to say) is true, then the arbitration proceedings are
entirely valid and binding, and the attempt to set them aside is founded on a lie, and is at least mala fide and at worst fraudulent, given the suggestion that Mr. Mpuisang will say that he was threatened by the Council that if he allowed
the arbitration to go ahead he would never get another contract from the Council.
10.
As to the probabilities, the stance adopted by MT and Mr. Mpuisang in his affidavit denying the authority of Horizon to proceed in
the name of MT, is very difficult to understand. If Horizon carried out the work (and we have the authority of the arbitrator to
say that it did) then it was entitled to be paid for it. Technically it did not have a contractual right to claim direct from the
Council. The right to take the dispute to arbitration lay with MT. What more natural than that MT should allow Horizon to proceed
in its name to arbitration? And what more odd than that Mr. Mpuisang should deny it?
11.
By the same token, the suggestion that Mr. Mpuisang now wishes to recant, and his alleged explanation as to the pressure put on him
by the Council, makes a great deal of sense. I will not say it has the ring of truth because I should not prejudge the matter. But
it is certainly a logical and plausible explanation for his initial improbable averments and his subsequent withdrawal of those averments.
12.
It seems to me that if His Lordship below had realized the danger that he might be giving a judgment induced by fraud, and that the
only way to avoid that danger was to hear the evidence of Mr. Mpuisang, he would not have hesitated to allow the hearing of that
evidence before coming to a decision.
13.
Learned counsel has placed before us a great deal of authority on a number of points of law. But I am not convinced that any of these
points arise for decision at the present stage. The first and most important priority is that Mr. Mpuisang must be heard. If his
“conversion on the road to Demascus” is accepted as a genuine recantation of an earlier improbable and untruthful assertion,
and if the reasons for the earlier untruthfulness are accepted, the court will have difficulty in granting any relief to the Council.
If there is a technical legal problem about Horizon’s application to make the award an order of court, the court will no doubt
look sympathetically on an application to join MT in that application. I note in passing that section 20 of the Arbitration Act,
Cap 06:01, is far more loosely worded than the equivalent South African or Zimbabwean sections.
14.
In the result I make the following order –
1.
The appeal is allowed with costs, including the costs of two counsel.
2.
The orders of the court a quo in cases MISCA 649/03 and 651/03 are set aside.
3.
The matter is referred back to the court a quo for further hearing.
4.
The court is directed to hear the evidence of Mr. Mpuisang, the Chief Executive Officer of the second appellant in both cases, and
such other evidence in support or rebuttal of that evidence as the parties may wish to call, and to come to a conclusion afresh in
the light of all the evidence.
DELIVERED IN OPEN COURT AT LOBATSE ON 27 JANUARY 2006.
___________________
N. J. McNALLY
JUDGE OF APEAL
____________________
I AGREE
N. W. ZIETSMAN
JUDGE OF APPEAL
___________________
I AGREE
S. A. MOORE
JUDGE OF APPEAL
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