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[2021] ZAWCHC 12
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Cancom (Pty) Ltd and Others v TMT Services and Suppliers (Pty) Ltd and Others (21394/2019) [2021] ZAWCHC 12 (19 January 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE NO:
21394/2019
In
the matter between:
CANCOM
(PTY) LTD & 108 OTHERS
Applicant
and
TMT SERVICES AND SUPPLIES (PTY) LTD
&
15
OTHERS
Respondents
Date of hearing: 22 October 2020
Date of Judgment: 19 January 2021 (delivered by
email to the parties’ legal representatives).
JUDGMENT
DELIVERED ELECTRONICALLY ON 19 JANUARY 2021
HOCKEY, AJ
Introduction
[1]
This is an interlocutory application brought by the first applicant
(“Cancom”)
against the first and seventh respondents in
the main application. Cancom seeks
orders
compelling the first and seventh respondents to
produce copies of contracts between them and, in the case of the
first respondent,
between it and other respondents in the main
application. The contracts, according to Cancom, concern the
provision of physical
and administrative infrastructure for, as well
as the administration and imposition of motor vehicle infringement
notices (ie traffic
fines) on, amongst others, the various
applicants.
[2] The first
respondent (“TMT”) initially filed a notice to oppose
this interlocutory
application, but later filed a notice indicating
that it would abide the decision of this court. The seventh
respondent (“Bitou”)
therefore stands alone in opposing
this application.
[3] In these
proceedings Cancom represents the second to eighth applicants (its
clients),
who are commercial car rental and fleet companies, as well
as the ninth and further applicants, who are proxies nominated by the
second to eighth applicants as required by the
National Road Traffic
Act 93 of 1996
.
[4] Cancom’s
business includes the administration of infringement notices
(“traffic
fines”) issued to its clients by various
authorities throughout the country. Such authorities include the
second to eleventh
respondents, who are various local authorities
within the Province of the Western Cape (“the municipalities”).
[5] The
dispute in the main application concerns the issuing of traffic fines
incurred
by third-party drivers of rental and/or fleet companies’
vehicles that are registered against the names of the proxies.
The issuing of fines results in so-called ‘admin blocks’
being placed on the proxies nominated by the rental or fleet
companies, which results in neither the proxies nor the companies
themselves being able to license or re-license vehicles.
In
accordance with a version put up by some of the municipalities, all
of this can be averted by the proxies or the companies providing
information concerning the person/s actually driving the vehicles
when the offences were committed, in which case the fines would
be
diverted to such drivers – this is the so-called ‘redirection
process’.
[6]
Cancom alleges that TMT and the municipalities are two sides of the
same coin, in
that TMT administers the entire redirection process,
including the issuing of court processes. TMT and the
municipalities,
on the other hand, allege that TMT’s functions
are limited to administrative support and the provision of
technology, and
that TMT is not involved in the enforcement process
at all. Cancom’s case is that the contracts it seeks in
this application
will clarify these issues.
The applicable legal principles
[7] Cancom
initially sought the contracts under Rule 35(12) of the Uniform Rules
of Court,
by issuing a notice to that effect in terms of this
subrule. Under this subrule, a party is obliged to produce a
document
referred to in its pleadings upon receipt of a notice
calling upon it to do so, unless the document is irrelevant,
privileged or
cannot be produced. In relation to the subrule,
it was held in
Contango Trading SA and Others v Central Energy
Fund SOC Ltd and Others
2020 (3) SA 58
(SCA), per Cachalia JA, at
para 9:
‘
. . . In general, any
reference to a document - even if not by name - triggers the
entitlement to claim its production. A
detailed or descriptive
reference to the document is not required, but in the absence of any
direct or indirect reference thereto,
a document will not have to be
produced under this subrule merely because its existence may be
deducted by inferential reasoning.
Reference must have been
made to it.’
(Internal footnote
omitted.)
[8] Since
there is no direct or indirect reference to the documents in
question, Cancom
relies on Rule 35(13) for the production of the
documents it seeks. In general, Rule 35 regulates discovery in
action proceedings,
but subrule 35(13) provides that ‘[t]he
provisions of this rule [rule 35] relating to discovery shall
mutatis
mutandis
apply, in so far as the court may direct to
applications.’
[9] It is
unquestionably so that discovery under Rule 35 was designed, in
general, for
action proceedings. In application proceedings, it
has been held, ‘discovery is a very, very rare and
unusual
procedure’
(see
Moulded
Components and Rotomoulding South Africa (Pty) Ltd v Coucourakis and
Another
1979 (2) SA 457
(W) at
470D-E and also
4 Africa Exchange
(Pty) Ltd v Financial Sector Conduct Authority and Others
2020
(6) 428 (GJ) at paras 59 and 60).
It is so that Rule 35
makes provision for discovery in application proceedings, where
reference was made to a document in the affidavits
filed in terms of
subrule 12, or where ‘the court may direct’ in terms of
subrule 13. The words ‘as the
court may direct’
connotes that the court has a discretion whether to allow discovery
under subrule 13, which, in terms of
case law, should be ordered only
in exceptional circumstances.
[10] The reason why
discovery is limited in application proceedings is clear, as has been
held in
Saunders Valve Co Ltd v Insamcor (Pty) Ltd
1985 (1) SA
146
(T), at 149C: in motion proceedings, the affidavits constitute
both the pleadings and the evidence. In
African Bank Ltd v
Buffalo City Municipality
2006 (2) SA 130
(CkH) para 6 it was
held:
‘
. . . In the application
proceedings the pleadings and trial stage of a matter all rolled up
in one. A party pleads, so to
speak, and adduces evidence in
one process. Invariably the parties to application proceedings
will attach all the documents
that they seek to rely on in support of
the application for relief that they seek. It is not surprising
therefore that the
Courts have insisted that discovery in application
proceedings should be made only in exceptional circumstances.’
(Internal footnotes omitted.)
(See
also
Moulded Components
at
470D.)
[11] Usually, in action
proceedings, discovery takes place once pleadings have closed and the
legal
issues between the parties are clear and the battle lines are
drawn. Discovery of documents and the evidence given in court
clarifies the factual issues. In motion proceedings, on the
other hand, both the legal and factual issues are dealt with
in the
affidavits.
[12] Referring to the
Moulded Components
case, where it was held that discovery in
application proceedings is ‘very, very rare’, Thring J
has this to say in
The
MV Urgup: Owners of the MV Urgup v
Western Bulk Carriers (Australia) (Pty) Ltd and Others
1999 (3)
SA 500
(C), at 513G-I:
‘
I respectfully agree.
Discovery has been said to rank with cross-examination as one of the
two mightiest engines for the exposure
of the truth ever to have been
devised in the Anglo-Saxon family of legal systems. Properly
employed where its use is called
for it can be, and often is, a
devastating tool. But it must not be abused or called in aid
lightly in situations for which
it was not designed or it will lose
its edge and become debased. It seems to me that, generally
speaking, its employment
should be confined to cases where parties
are properly before the Court and are litigating at full stretch, so
to speak.
It is not intended to be used as a sniping weapon in
preliminary skirmishes, such as the main application in this matter
is, unless
they are exceptional circumstances present.’
(See
also
Firstrand Bank t/a Wesbank v
Manhatten Operations (Pty) Ltd and Others
2013 (5) SA 238
at paras 18 and 19.)
[13] Our courts are more
inclined to exercise its discretion in favour of ordering discovery
in motion
proceedings, in cases where discovery is asked for by a
respondent who requires documents to answer the case it has to meet.
This is understandable, as it is the applicant who chose motion
proceedings and the respondents would be prejudiced, without the
opportunity to resort to the usual discovery process provided for in
Rule 35, to answer a case against it. In this regard
see
Saunders Valve
supra
at 149F; generally
Premier
Freight (Pty) Ltd v Breathetex Corporation (Pty) Ltd
2003 (6) SA
190
(SE); and
Buffalo City
supra
Application of the legal principles to the present
matter
[14] In the present matter
it is the first applicant, who represents the other applicants in the
main
matter (who have chosen to bring that matter by way of motion
proceedings), who now seeks discovery of certain documents.
It
does so after answering affidavits had been filed.
[15] In the main
application, the applicants allege that TMT conducts business as a
service provider
to the various municipalities, and controls,
operates and coordinates virtually the entire traffic enforcement
procedure.
They go further to state that TMT operates the speed
cameras, issues fines, receives and adjudicates representations,
attends to
the redirection of traffic fines and causes warrants to be
issued. It questions whether the performance of these
functions
by a service provider, and not the municipalities
themselves, is legal.
[16] In response to these
allegations, Bitou alleges as follows (at para 37 of its answering
affidavit):
‘
TMT is merely a service
provider which assists the Bitou Municipality by providing traffic
law enforcement equipment, back office
assistance and related
services, together with operational support and the maintenance of a
traffic contravention system and renting
of speed cameras. It
is not responsible for exercise administrative descriptions and I
deny that prosecutorial or enforcement
functions are outsourced to
TMT. These functions are performed by municipal traffic
officers who oversee the administrative
functions performed by TMT.’
[17] TMT too, in its
answering affidavit, denies that it, as a service provider, plays the
role as
alleged by the applicants. It further states that the
deponent of the founding affidavit completely misunderstands TMT’s
role and the service it provides. It is alleged that had the
deponent of the founding affidavit understood TMT’s role,
relief would not have been sought against TMT. According to
TMT, its role as a service provider is as follows (as set out
in para
100 of its answering affidavit):
‘
100.1 Firstly, TMT does not
control or operate or coordinate virtually “the entire
enforcement procedure”. It
only provides the services I
have referred to above (the administrative function off capturing and
processing off traffic fines).
100.2 Secondly, and crucially, it is
simply inexplicable that Ms Olinsky [the deponent of the founding
affidavit] still persists
with her misguided notion that TMT
adjudicates representations from traffic offenders.
100.3 With respect, Ms Olinsky should
know better. It was clearly spelled out in my affidavit in the
previous application
that TMT has no standing to adjudicate
representations. This is within the exclusive purview of the
prosecuting authorities,
as regulated by law. No private
service provider may perform such a function. [It needs to be
mentioned that there
was a previous application, the “2018
application”, where the applicants sought similar relief as in
the present matter.]
100.4 Similarly, TMT does not cause
warrants to be issued as alleged. I have explained that it is
the magistrate who decides,
on application from the prosecuting
authorities, whether to issue the warrant, and if so deciding, stamps
and signs the warrant.
TMT makes no prosecutorial decisions in
this regard whatsoever.’
[18]
Facing the explanations in the answering affidavits, and the
realisation that these explanations
will most likely be accepted in
terms of the rule espoused in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A), Cancom is now seeking the contracts between TMT
and the various respondent municipalities. In its
endeavour
to make the rules of discovery applicable in the
present matter, Cancom faces an arduous task requiring it to show the
existence
of exceptional circumstances. As held in the
Premier
Freight
matter (paras 12 and 13):
‘
[12] The notion of exceptional
circumstances appears to encompass two aspects: the first is that, by
the very nature of applications
and the discovery procedures, as a
matter of practice, it is only rarely that a party seeks an order
directing the Rules of discovery
to apply; secondly, even then, a
case in which a party seeks an order to make the Rules of discovering
applicable must have special
features that render the making of such
a direction necessary …
[13] Apart from this, however, the
notion of exceptional circumstances does not exist in a vacuum: it is
to be gauged within the
broader context of the foundational values
upon which the rules themselves are based, namely ideas of fairness
and equity - and
the constitutional values of openness and
transparency.’
[19]
In the present matter, the applicants in the main application seek
declaratory relief as well
as mandatory interdicts against TMT and
the respondent municipalities, relating to the administration of the
National Road Traffic
Regulations. With the filing of TMT’s
and Bitou’s answering affidavits, Cancom argues that the
division of tasks
in relation hereto has become an issue.
Cancom applies for the documents concerned on the basis that the
division of tasks
would be spelled out therein.
[20]
Mr Hathorn, who appeared on behalf of Bitou, argues that the division
of
labour
between
TMT and Bitou in terms of their contractual relationship is not a
material issue, or even an issue at all, in the dispute
in the main
proceedings. Having had regard to the Notice of Motion in the
main matter, I agree with Mr Hathorn. This
issue has also been
dealt with in the affidavits, both in the present matter as well as
the 2018 application, which I deal with
below.
[21] Mr Hathorn pointed
out that in the 2018 application, which Cancom launched for the same
relief
as it now seeks in the principle application (which
application was not proceeded with after the claim for interim relief
was dismissed
for lack of urgency), Cancom, in response to a
statement that it is not within TMT’s power to place or lift
‘admin
blocks’, pointed out that as the relief had been
sought against all the relevant role players, it was largely
irrelevant
whether TMT had the power to place or lift ‘admin
blocks’.
[22] Furthermore, in its
founding affidavit in the present main application, Cancom states, at
para
95 thereof, that it is questionable whether the outsourcing of a
prosecutorial/enforcement function is legal, but that ‘that
question need not be determined in this application’
.
[23] It seems, therefore,
that the position the applicants adopted in the 2018 application, as
well
as in the founding papers in the present main application, is
that TMT’s role in relation to the placement or lifting of
‘admin blocks’ is irrelevant for purposes of the relief
it seeks. Any order granted against the relevant parties
will
be binding on all of them and, as pointed out by Mr Hathorn, it is at
most a peripheral concern for Cancom whether Bitou (or
the other
relevant respondent municipalities) performs the necessary action.
[24] What I find
compelling for the conclusion I come to, is that Cancom was aware of
what Bitou’s
and TMT’s stances would be regarding their
roles in the traffic enforcement process, these issues having been
dealt with
in affidavits in the 2018 application. Yet Cancom
and the other applicants chose to take the path of application
proceedings
whilst they had the option of proceeding by way of
action, in which case they would have had the discovery process at
their full
disposal.
[25] Furthermore, as we
have been reminded by Lamont J in
STT Sales (Pty) Ltd v Fourie and
Others
2010 (6) SA 272
(GSJ):
‘
[16] The essential feature of
discovery is that a person requiring discovery is in general only
entitled to discovery once the battle
lines are drawn and legal
issues established. It is not a tool designed to put a party in a
position to draw the battle lines and
establish the legal issues.
Rather, it is a tool used to identify factual issues once legal
issues are established.’
[26] If I allow discovery
at this stage of the proceedings in the main matter, which Cancom
seeks
in order to deal with allegations raised by TMT and Bitou in
their answering affidavits, relating to the former’s role in
the traffic fines enforcement process, it is likely that further
affidavits will have to be filed to deal with new issues, as in
the
case of the
STT Sales
matter, where it was held, at para 17:
‘
. . . The parties are likely
to file further affidavits, embrace new issues, and will need to
respond to each other. The formula
by which evidence is
produced in motion proceedings will surely mutate. This is
undesirable.’
[27] I am of the view that
despite TMT filing a notice to abide this court’s decision, no
order
for discovery should be made against it, as such an order would
subvert the conclusions I reach in this judgment.
[28] What remains is the
issue of costs. There is no reason why costs should not follow
the
result. I have no doubt that the main matter is one of
considerable complexity, wherein the costs of two counsel would be
justified, such justification to be extended to the present matter.
It has been held in several cases in this division that
if the main
matter justifies the costs of two counsel, the costs of two counsel
must also be allowed in all interlocutory applications
(see
Grancy
Property Ltd and Another v Law Society of the Cape of Good Hope and
Others
(3698/2014)
[2014] ZAWCHC 164
(5 November 2014) para 58).
[29]
In the result, the application for discovery is dismissed with costs,
including the costs of
two counsel.
___________________
S. HOCKEY
ACTING
JUDGE OF THE HIGH COURT
Appearances
For Applicant:
Adv. W Shapiro
Instructed by:
MacGregor Erasmus Attorneys
For Respondent: Adv. P
Hathorn SC
Adv. C Carolissen
Instructed
by: Regan Brown
Inc.