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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA,

GAUTENG LOCAL DIVISION,

JOHANNESBURG

CASE NUMBER: 12144/2019

MGC EXPRESS PROPRIETARY LIMITED                                                             Applicant

and

SOUTH AFRICAN EXPRESS AIRWAYS SOC LIMITED                                   Respondent

JUDGMENT

SKIBI AJ

[1] This is an opposed money judgment application by the applicant against the respondent for the payment of an amount of R24 438 975.30.

[2] The applicant is a specialised commercial aviation company, which is in the business of leasing aircraft to various operators.  It is common cause that the respondent is a state-owned entity, which operates as a scheduled airline in Southern Africa. 

[3] The claim by the applicant arises out of the two written ad-hoc lease agreements which were entered into by the parties.  On 22 August 2017, the applicant duly represented by its Chairman, Mr Sam Matakane, and the respondent duly represented by its then Acting Chief Executive Officer Mr Victor Xaba,  concluded  two ad-hoc lease agreements.

The salient terms of the agreements are as follows:

[3.1] The applicant would lease to the respondent a Bombardier CL-600-2B-19 aircraft, with serial number 7161 and registration ZS-NMJ (hereinafter referred to as ZS-NMJ) for a lease commencing on 24 August 2017 to 23 February 2018 and Bombardier CL-600-2B-19 aircraft with serial number 7198 with registration ZS-NMK (hereinafter referred to as ZS-NMK) for a lease commencing on 26 February 2018 to 27 August 2018.

[3.2] The respondent agreed to pay the applicant a rental for the aircraft being

rand equivalent of US$1376 per hour plus VAT, per block hour for all block hours operated by the Aircraft.

[3.3] In the event of the respondent not making payment to the applicant on the due date thereof, the applicant would be entitled to interest on the overdue amount payable by the respondent to the applicant at the rate equivalent to the prime rate being the prime Overdraft Rate of ABSA Bank Limited, plus 5%.  The prime rate is defined in clause 1.1(29) of the agreements.

[4] The applicant alleges that on 28 February 2018 the applicant represented by its Chairman Mr Sam Matekane and the respondent represented by its then Acting Chief Executive Officer, Ms Matsietsi Mokholo concluded a further ad-hoc lease agreement with regard to ZS-NMK.  In terms of 1.19 this lease agreement[1] was to run from 26 February 2018 to 27 August 2018.  After the expiry of the ad-hoc lease agreement in respect of the aircraft ZS-NMJ in February 2018, the applicant allowed the respondent to utilise this aircraft (ZS-NMJ) without a signed contract by both parties.

[5] The applicant delivered the aircraft to the respondent in accordance with the agreements and performed all its obligations in terms of the agreements.  After the delivery of the aircraft the respondent, having flown the aircraft until 24 May 2018 for hours reflected in the invoices recorded in the schedule attached to the applicant’s affidavit, recorded the total amount payable by the respondent to the applicant in the amount of R42 552 086.39[2].  The respondent made payment to the applicant on various dates from 21 November 2017 to 30 November 2018 as reflected in the schedule[3] attached to the letter of demand which reduced the amount due to the applicant to the sum of R24 438 975.30[4].  The applicant alleges that it is the refusal or neglect to make payment in response to the demand for this amount which gave rise to the institution of this application.  The respondent denies owing the applicant any money despite having admitted the indebtedness in various correspondence before the institution of this application.

[6] The issue to be determined is whether the respondent is liable to pay the amount claimed.  The respondent is also challenging the jurisdiction of this Court to hear the matter when the ad-hoc lease agreements provide for a mechanism to resolve the dispute arising out of the ad-hoc lease agreements by way of arbitration process.  The respondent contends that the correspondence between the officials of the respondent where an admission of liability is made should be struck out on the basis that such correspondence was made without prejudice.  There is no formal application to strike out the paragraphs which refer to the said admission of liability.  The respondent alleges that there is a dispute of fact which cannot be resolved in motion proceedings. The respondent has also raised several grounds of opposition of this application; amongst others,  the constitutional validity of the ad-hoc agreement is challenged.

[7] I am going to deal with the first three issues, firstly, jurisdiction (or lack

thereof) of this Court when the ad-hoc agreements provide for the mechanism to refer the dispute to arbitration secondly, whether the correspondence (allegedly ‘without prejudice’) between the respondent’s officials and the applicant should be admitted; thirdly, and importantly,  whether there is a dispute of fact which cannot be resolved on paper. I deem it unnecessary to deal with other grounds because of the order made regarding the dispute of fact.

 

(i) Jurisdiction

[8] The ad-hoc lease agreements make provision for resolution of a dispute between the parties by way of referring it to arbitration. However, the ad-hoc lease agreement does not provide a definition of the word “dispute”.  From the reading of the papers there is no dispute that the applicant leased these aircraft to the respondent based on written ad-hoc lease agreements and there is no dispute that the respondent had an obligation to make payment for the use of these aircraft. 

“16.2 Arbitration

If the parties are unable to resolve any dispute in the manner contemplated by clause 16.1, then subject to clause 16.3, such dispute shall on written demand by either party to the dispute be submitted to arbitration at the Arbitration Foundation of South Africa, in Pretoria and in accordance with the rules thereof by an arbitrator or arbitrators agreed on by the parties or should the parties fail to agree an arbitrator within 10(ten) days after the arbitrator has been demanded, the Arbitrator shall be nominated at the request of any party by the Arbitration Foundation of South Africa,  The arbitration shall be held in Afrikaans or English language.”

[9] The respondent’s contention is that by virtue of clause 16.2 in the ad-hoc agreement, the jurisdiction of this is ousted.  As a result of the applicant’s not following the said dispute resolution mechanism, the respondent is asking for the dismissal of the application or alternatively, to stay the proceedings pending the final determination of the dispute by the arbitrator in terms of the ad-hoc lease agreements.  The respondent places reliance on the case of Aveng Africa Ltd (formerly Grinaker-Ltd) trading as Grinaker-Lta Building East v Maidros (Pty) Ltd[5] where it was held that the modern approach to arbitration clauses is to respect the parties’ autonomy in concluding the arbitration agreement, and to minimise the extent of judicial interference in the process.  The historical desire of Courts to protect their own jurisdiction, and their consequent suspicion of arbitration as a means of resolving disputes, has been replaced by a recognition that arbitration is an acceptable form of dispute resolution with which the Courts should not interfere. 

[10] The respondent also relies to the case of Lufuno Mphaphuli and Associates (Pty) Ltd v Andrews[6] where it was held that the decision to refer a dispute to a private arbitration is a choice which, as long as it is voluntarily made, should be respected by the Courts.  Parties are entitled to determine what matters are to be arbitrated, the identity of the arbitrator, the process to be followed in the arbitration, whether there will be an appeal to an arbitral appeal body and other similar matters.

[11] Clause 16.1 of the lease agreement makes a provision that prior to the parties referring a dispute to the formal arbitration, the parties shall attempt to resolve the dispute informally with the high ranking executive (i.e. CEO) of the organisation or company upon written request by a party. On proper interpretation of both clause 16.1 and 16.2 of the ad-hoc agreements, there has to be a written request by either party once there is a dispute arising out of the agreement.

[12] At no stage prior to the institution of this application had either party made a written request as envisaged in terms of clause 16.1 of the ad-hoc agreements.  The respondent, when receiving a notice of demand for the amount allegedly owed by it to the applicant, never raised any issue disputing indebtedness to the applicant in respect of the existing signed ad-hoc lease agreements.  In my view the applicant was made to believe that there is no dispute arising out of the agreements as the respondent’s senior officials (Legal Advisor) repeatedly sent correspondence to the applicant acknowledging its indebtedness.  Both clause 16.1 and 16.2 of the ad-hoc lease agreements refer to instances where there is a “dispute” arising out of the agreements.  The respondent never raised any dispute about its indebtedness towards the applicant.  In the ad-hoc lease agreement there is no bar for either party from approaching the Court for relief without first resolving the dispute in terms of the mechanism provided in the ad-hoc lease agreement.

[13] I am invited by the applicant to exercise my discretion in favour of the applicant in finding that the jurisdiction of this Court is not ousted by clause 16.1 or 16.2 of the ad-hoc lease agreement in that the respondent has failed to show that either of the clauses is applicable.  The applicant contends that even if clause 16.1 or 16.2 is applicable on the facts of this case, there is no dispute.  The respondent repeatedly acknowledged its indebtedness to the applicant and never sought to invoke the provisions of either clause 16.1 or 16.2 of the ad-hoc lease agreements and gave no explanation whatsoever as to why it repeatedly acknowledged its indebtedness to the applicant and only in the answering affidavit has it disputed being indebted to the applicant.

[14] The applicant contends that the respondent’s reliance on clause 16.2 of the ad-hoc lease agreements to oust the jurisdiction of this Court has no merit.  Its submission is based on the fact that the respondent had many opportunities to refer the matter to arbitration if it had a dispute arising out of the ad-hoc lease agreements but all that it could do was to send several correspondences to the applicant, making payment arrangements of the debt in instalments varying from twelve and nine months respectively.  In the Aveng Africa[7] case referred supra the following was stated:

“…it is now well established that an arbitration agreement does not oust the jurisdiction of the courts.  Where a party to an arbitration agreement commences legal proceedings against the other party to that agreement, the defendant is entitled either to apply for a stay of the proceedings pursuant to s 6 of the Arbitration Act 42 of 1965, or to deliver a special plea relying upon the arbitration clause.  Whichever course it adopts, the onus rests on the claimant to persuade the court to exercise its discretion to refuse arbitration.  This requires a strong case to be made out…”

[15] In the decision by this Division in the case of Peel v Hamon J & C Engineering (Pty) Ltd[8] the following which is authoritative was said:

“[65] “In my view there are several obstacles to the respondent’s contention having regard to the particular circumstances of the matter. First, some applicable legal principles: the court would generally give effect to arbitration provisions in agreements.  However, it has been held on occasion that an arbitration clause does not necessarily oust the jurisdiction of the courts.  See Universiteit van Stellenbosch v JA Louw (Edms) Bpk 1983 (4) SA 321 (A)…

[66] As regards the onus, it is settled law that a party wishing to invoke an arbitration clause must alleged the underlying jurisdictional facts required in order to rely on the clause.  See Goodwin Stable Trust v Duohex (Pty) Ltd 1998 (4) SA 606 (C) ([1996] 2 All SA 558) at 615.  One of the requirements is that a party wishing to rely on an arbitration clause must show that such clause is applicable to the dispute between the parties.  In PCL Consulting (Pty) Ltd t/a Phillips Consulting v Tresso trading 119 (Pty) 2009 (4) SA 68 (SCA) Cloete JA said in para 7:

‘In the present proceedings, the defendant has simply pointed out that the lease agreements has an arbitration clause in wide terms.  That is not sufficient.  The defendant was obliged to further set the terms of the dispute’.  The whole exercise is one of interpreting the agreement’.” (own underlining)

[16] In Delfante v Delta Electrical Industries Ltd[9] Gauntlet AJ stated that in order for an arbitration clause in an agreement to be enforced “There must be an issue, palpable and genuine…” (own underlining).

[17] The respondent contends that the exchange of correspondence between the parties was a way to try to resolve a dispute which arose out of the ad-hoc lease agreements.  Mr Hutamo for the respondent was at pains to explain which dispute arose out of the contract when the only message was about the arrangement of the payment plan, not disputing indebtedness.

[18] In my view I find that the respondent’s reliance on clause 16.1 and 16.2 of the ad-hoc lease agreements has no merit. I am not inclined to enforce the provisions of clause 16.1 and 16.2 of the ad-hoc lease agreements.  In this matter we are not dealing with the relief sought in terms of the Consumer Protection Act[10] (CPA) whereby section 69(1)(d) makes it clear that a consumer who chooses to resolve the dispute in terms of the CPA should first exhaust all the remedies provided in the CPA before he/she approaches the Court.  In this case there is no bar for any of the parties from approaching the Court directly.  In addition to this, the respondent never denied liability to pay the debt at all until the date when it served its answering affidavit.  I make a finding that this Court has a jurisdiction to hear this matter.

[19] I am not persuaded that there is an issue palpable and genuine for me to make an order for an arbitration clause to be enforced as per Gauntlet AJ held in Delfante and Electrical Industries Ltd[11].  In terms of the Delfante judgment an issue must be clear and genuine whereas in the case at hand, the only dispute of liability emerged for the first time when the answering affidavit was served to the applicant.  There is not a single correspondence which demands the payment where there was a dispute about indebtedness of the respondent on the written ad-hoc lease agreements.  Based on the reasons set out above my finding is that this Court has a jurisdiction to hear the matter.

(ii) whether correspondence without prejudice should be admissible

[20] Despite having made some payments to the applicant, the respondent in its answering affidavit disputes the correspondence from its officials where an acknowledgement of debt is admitted.  The respondent contends that those engagements were made without prejudice and do not constitute acknowledgement of debt.  Some of this correspondence will be highlighted below.  For example on 20 March 2018 the respondent’s Chief Financial Officer, Mr Mpho Selepe sent an email to the applicant where he said the following: “Attached herein find the payment plan as discussed today for your review and response”[12].

[21] The applicant further relies on the correspondence by the Legal Assistant of the respondent, namely Mr Sewela Matumba, dated 31 July 2018 and sent to the applicant where it says:

“Re Aircraft Ad-hoc Lease Agreement between MGC Express CC and South African Express Airways (SA Express) SOC Ltd:

1. We refer to the 6 months agreement between SA Express and MGC Express entered into on the 24 February 2019, for lease of aircraft.

2. We wish to confirm that when the contract expires on 25 August 2018 it will not be renewed due to business needs

3. We further confirm that there are outstanding payments due to you and we wish to discuss a payment plan at your earliest convenience.  Please provide us with three suitable dates between 18-13 August 2018 for the meeting”.

[22] The applicant also relies on several correspondence from the senior Legal Advisor in the office of the respondent, Adv. Lerato Brimah where the correspondence dated 15 February 2019 says the following:

“2. We confirm that we are indebted to your client in the amount of R24, 438 975.30.

3. We wish to propose a payment plan of 12 months equal monthly instalments R2 036 581.28, with the first instalment payable on or before 7 March 2019 and the final and twelfth instalment payable on or before 7 February 2020”.[13]

[23] On 22 February 2019 Adv. Lerato Brimah sent another email to the applicant where it says the following:

“We wish to propose nine monthly equal instalments (capital sum plus interest commencing on 7 March 2019”[14]

[24] The dispute about the indebtedness of the respondent emerged for the first time in the answering affidavit where the respondent stated that correspondence recorded without prejudice does not constitute the acknowledgement of indebtedness of the respondent.  The respondent contends that the correspondence never meant to mean to be an admission of liability or acknowledgment of indebtedness. The respondent in its answering affidavit is asking the Court to strike out such correspondence.[15]

[25] In my view there is no substance in the contention by the respondent.  There are a plethora of authorities where it has been held that there is no magic in the use of the words “without prejudice” as a preface to a communication sought to be covered by privilege.  For the communication to enjoy protection the discussions must constitute a bona fide attempt to resolve a dispute and even where the phrase is not used by the party claiming privilege, the negotiations will be regarded as privileged if they were part of a genuine attempt to settle an existing dispute.  Where there is no dispute between the parties, the communication is not privileged against disclosure.  See in this regard the case of Group v WJ Da Grass Attorneys and Another[16]; Milward v Glaser[17]; Venmop 275 (Pty) Ltd v Cleverland  Projects (Pty) Ltd[18].

[26] The communication from Adv. Lerato Brimah shows that there is no dispute about the respondent’s indebtedness (in respect of the written ad-hoc lease agreements) to the applicant and instead it is the opposite; the respondent admits its indebtedness to the applicant and offers payment arrangements.  The said communication does not enjoy protection by privilege against any disclosure.  It follows the ruling that the said communication is admissible.

 

(iii) Dispute of fact

[27] Another technical defence raised by the respondent is that the there is a dispute of fact in this application and which dispute cannot be resolved on paper.  The respondent contends that based on the fact that the agreement in respect of the ad-hoc lease agreement in respect of the Aircraft Bombardier CL-600B-19 with registration number ZS-NMJ which contract has expired, the applicant cannot rely on it.  The respondent contends that in the replying affidavit the applicant seeks to put reliance on an oral agreement between the parties and these allegations are made without regard to the provisions of Rule 18(6) of the Uniform Rules of Court.  Therefore, proof of oral evidence would be needed, if one seeks to place reliance on an oral agreement to state when and where such agreement was concluded, who represented the parties during the conclusion of same and what were the terms of the agreement.

[28] A fact is said to be in dispute when it is alleged by one party and denied by the other, and by both with some show of reason.  A mere allegation, without evidence, or against the evidence cannot create a dispute within the meaning of the law.  A real and genuine dispute of fact can exist only when the Court is satisfied that the party who purports to raise the dispute has in his affidavit seriously and unambiguously addressed the fact said to be disputed.

[29] As far back as 1949 in the matter of Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd[19] the Courts have held that the crucial question is whether there is a real dispute of fact.  Disputes of fact arise when-

(i) the respondent denies allegations made in the applicant’s affidavit and further produces positive evidence to the contrary in the answering affidavit;

(ii) the respondent admits the allegations in the applicant’s founding affidavit but alleges additional facts and evidence which the applicant disputes;

(iii) the respondent alleges that he has no knowledge of the averments in the applicant’s affidavit and puts him to the proof thereof;

(iv) the respondent alleges that he can lead no evidence to dispute the truth of the applicant’s averments and puts the applicant to the proof thereof by oral evidence and subject to cross-examination.

[30] After the expiry (on 23 February 2018) of the lease agreement in respect of the aircraft ZS-NMJ, the applicant alleges that it sent an agreement to the respondent for signature but the said agreement was never returned by the respondent.  Nevertheless, the applicant agreed to allow the respondent to continue utilising ZS-NMJ on the same terms and conditions as the further ad-hoc agreement concluded between the parties in respect of the aircraft ZS-NMK concluded in February 2018.  The applicant says there is no answer by the respondent to this paragraph.  The applicant contends that there is no answer to its allegation that the lease agreement expired nevertheless it continued to allow the respondent to utilise the aircraft.  The applicant’s contention is that no proper answer was given to create a dispute of fact.  The applicant further contends that the respondent continued using ZS-NMJ and no explanation was given as to why it continued to utilise the said aircraft.

[31] The respondent contends that there is a dispute of fact which cannot be resolved in motion proceedings. It is further contended by the respondent contends that it did respond to the applicant’s averment and alleged that the utilisation of ZS-NMJ was on the applicant’s own version not based on a written agreement but on an oral agreement.  It contends that the applicant failed to plead the terms of such an agreement and therefore the application should be dismissed.  The respondent further contends that the applicant did confirm in its founding affidavit that a lease agreement was never concluded, if such a lease agreement was concluded it would have been an oral agreement which terms need to be pleaded fully and evidence be led to confirm same. The respondent’s main contention in its answering papers focus on the fact that the mere fact that the applicant says the agreement was not reduced to writing and the terms thereof not pleaded is therefore a dispute of fact.  The respondent does not deny nor dispute the essence of the allegation which is the utilisation of ZS-NMJ after the expiry of the written ad-hoc lease agreement.

[32] One need not be carried away by admissions made by Adv. Brimah.  From what I gather there was a ‘user agreement’ (which terms were not reduced to writing) after the expiry of the ad-hoc written lease agreement in respect of the aircraft ZS-NMJ of which the terms thereof are not clearly defined. This can be resolved if the matter is referred to trial. I cannot mero motu refer this matter to trial.  Adv. Hutamo for the respondent in his address contended that the issue of oral agreement regarding the aircraft ZS-NMJ should be referred to trial.  Adv. Hollander for the applicant also submitted at the end of his address that in the event I find that there is a dispute of fact I should refer the matter to trial.  The reason why I am saying one should not be carried away by the admission of liability by Adv. Brimah is that the central issue which gives rise to the claim is the hourly rate agreed upon by the parties to charge on 28 August 2018 when the ad-hoc written lease agreements were signed in respect of the aircraft ZS-NMK are extended to the aircraft ZS-NMJ.  In the absence of a written or specific terms and conditions of the oral agreement it cannot be an easy task, if not impossible, to say how much the respondent is liable for.  The applicant says the subsequent ad-hoc lease agreement regarding ZS-NMJ was never signed by the respondent.  I read the terms of conditions of the ad-hoc written agreement in respect of ZS-NMK and it makes no reference to the use of the aircraft ZS-NMJ.

[33] The applicant’s founding affidavit in respect of the oral agreement on ZS-NMJ reads:

“12 In regard to ZS-NMJ, although the Applicant sent a further Ad-Hoc Lease Agreement to the Respondent for signature, the Agreement was never returned by the Respondent.  Nevertheless, the Applicant agreed to allow the Respondent to continue utilising ZS-NMJ on the same terms and conditions as the further Ad-Hoc Lease Agreement concluded between the Applicant and the Respondent in respect of ZS-NMK (“FA4A”).”

[34] The respondent’s answer to the said para 12 is found in its answering affidavit[20] and says:

“82. The contents of this paragraph is denied:

83. The utilisation of ZS-NMJ, on the applicant’s own version, not based on a written agreement but on an oral agreement.  The applicant has failed to plead the terms of that oral agreement.  On the basis, that applicant has failed to plead the terms of that oral agreement.  On this basis, the application should be dismissed with costs, alternatively referred to trial.”

[35] The applicant in reply to the respondent’s answering affidavit turns to admit that there was oral agreement but says that the terms and conditions of such agreement as recorded in the signed ad-hoc agreement in respect of ZS-NMK (Annexure “FA4A” to the applicant’s founding affidavit) does not mean that there are any irresolvable issues on the papers. The applicant relies on that based on the common cause that the respondent used ZS-NMJ after the expiry of the initial ad-hoc lease agreement and the respondent does not state on what basis it utilised ZS-NMJ after the expiry of the Annexure “FA4”.

[36] I am persuaded that there is a real dispute of fact regarding the terms and conditions of the oral agreement in respect of whether there was a contract, who entered the contract and who represented the parties when such contract was entered into, for how long and what the terms and conditions were to use the aircraft ZS-NMJ.  This can only be resolved by the aid of hearing viva voce evidence.  I am unable to hold the respondent liable based on the “user agreement” of the said aircraft ZS-NMJ without evidence led on this aspect.  I agree with counsel for the respondent that the terms of such an oral agreement should have been pleaded in line with the provisions of Rule 18(6) of the Uniform Rules of this Court.  Although the respondent does not state the basis for the use of the aircraft ZS-NMJ after the expiry of the ad-hoc lease agreement, to rely on the terms of the agreement signed in respect of ZS-NMK to ZS-NMJ is a material dispute of fact.  There must have been a reason to separate the ad-hoc lease agreements for the lease of these aircraft.

[37] The applicant has not attached an addendum indicating the ad-hoc lease agreement was extended, and if so, with whom it entered the agreement with and what the terms and conditions were.  Paragraph 12 of the applicant’s founding affidavit pleads to terms and conditions on the signed agreement in respect of the other aircraft ZS-NMK.  From the applicant’s version this was never returned by the respondent.  This is a motion proceedings I cannot use extrinsic evidence or draw an inference based on the subsequent conduct of the respondent that it subjected itself to the expired terms of the written ad-hoc lease agreement or to the terms and conditions of agreement reached in respect of ZS-NMK. The cover sheet of the ad-hoc lease agreement in respect of ZS-NMK makes no reference to ZS-NMJ.  The agreement reads:  Aircraft Ad Hoc Lease Agreement between South African Express Airways SOC Ltd and MGC Express CC regarding ZS-NMK.”  The contents of this agreement makes no reference to aircraft ZS-NMJ or use thereof.

[38] The applicant claims money judgment in respect of use of both aircraft on the written ad-hoc lease agreements as well as alleged oral agreement for use of ZS-NMJ after the expiry of its written lease agreement in February 2018.   There is no separate invoice in respect of utilisation of ZS-NMJ based on the oral agreement and a separate invoice/s on the written ad-hoc agreements in respect of use of ZS-NMJ and ZS-NMK.  Counsel for the respondent’s contention was that the matter be referred to trial to deal specifically with the alleged oral agreement.  Once it has been resolved the matter should be re-enrolled on the opposed motion court roll.  The issue is a narrow one; the best option is to refer the matter to oral evidence to deal specifically with the issue of the oral agreement for the continued use of ZS-NMJ by the respondent. However, due to the fact that there are other written ad-hoc agreements, and their constitutional validity have been put in dispute, the referral to trial will be the appropriate way to resolve these issues.  The trial court will be well equipped to deal with this matter to finality.  It will be time consuming for a judge in the trial court to peruse this voluminous file hear oral evidence and return to motion court where another judge will hear the matter.

[39] Based on the finding to refer the matter to trial court, I am not going to express my view on the respondent’s other grounds of opposition of this application, i.e. the procurement process (constitutional validity of the written ad-hoc lease agreements) and authority.  The argument will be presented to the trial court and trial court will decide on the issues.  It will be inappropriate for me to make a finding on the issue of the defence/ground of opposition on procurement processes and the issue of authority before the issue of the oral agreement for use of ZS-NMJ has been resolved by viva voce evidence.  The trial court will also determine the amount which should be paid by the respondent to the applicant on both ad-hoc written lease agreements and the alleged oral agreement, if any. 

[40] My finding not to refer the matter to arbitration was born by the fact that there was no dispute which arose out of the written ad-hoc lease agreements for use of both aircraft.  Prior to the launching of the money judgment application, the respondent never raised a dispute of fact regarding the existence of the oral agreement and the terms and conditions of the alleged oral agreement entered into between the parties after the expiry of the written ad-hoc lease agreement on the ZS-NMJ aircraft.  The applicant in its founding affidavit relies on the terms of agreement signed by the respondent in respect of ZS-NMK aircraft.  This is where the dispute of fact has arisen. This matter should  be referred to trial.  The applicant’s claim on the written agreements is based on just and equity and the respondent’s contention that the ad-hoc lease agreements are unconstitutional, unlawful and unenforceable will be determined by the trial court once the oral agreement has been proven if it is persisted with.

[41] After a thorough reading of the papers and hearing the submissions of the respective parties, I am of the considered view that a final relief cannot be made without the aid of the viva voce evidence and therefore an order for the said referral is made below.  The costs of this application are reserved to be determined by trial court.

 

Order

[42] The following order is made:

[42.1] The application is referred to trial.

[42.2] The notice of motion shall stand as a simple summons.

[42.3] The notice of intention to oppose shall stand as a notice of intention to defend.

[42.4] The applicant shall deliver a declaration within twenty (20) days of this order;

[42.5] Thereafter the rules to action shall apply.

[42.6] The costs to date shall be reserved for determination by the trial court.

 

_______________________.

N. SKIBI

Acting Judge of the High Court,

Gauteng Local Division,

Johannesburg

 

DATE OF HEARING: 20 November 2019

DATE OF JUDGMENT: 9 December 2019

APPEARANCES:

COUNSEL FOR THE APPLICANT: ADV. L. Hollander

Applicant’s Attorneys

Darryl Furman & associates

Johannesburg

COUNSEL FOR THE RESPONDENT: ADV. T.B. Hutamo

Werksmans Attorneys

96 Rivonia

Sandton

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