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[2021] ZAWCHC 19
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Scharrighuisen NO and Others v Scharrighuisen and Others (6837/2020) [2021] ZAWCHC 19 (21 January 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
Number: 6837 / 2020
In
the matter between:
REGARDT
SCHARRIGHUISEN N
O
First Applicant
TEUNIS
SCHARRIGHUISEN N
O
Second Applicant
JUDITH
SCHARRIGHUISEN N
O
Third Applicant
MICHIEL
SCHARRIGHUISEN N
O
Fourth Applicant
(as
trustees for the time being of the Regardt Trust (IT1483/92)
and
CORNELIA
MARIA
SCHARRIGHUISEN
First Respondent
REGARDT
SCHARRIGHUISEN
Second Respondent
THE
MASTER OF THE HIGH COURT
OF
SOUTH
AFRICA (WESTERN CAPE
DIVISION)
Third Respondent
In
re:
CORNELIA
MARIA
SCHARRIGHUISEN
Plaintiff
and
REGARDT
SCHARRIGHUISEN
First Defendant
REGARDT
SCHARRIGHUISEN N
O
Second Defendant
TEUNIS
SCHARRIGHUISEN N
O
Third Defendant
JUDITH
SCHARRIGHUISEN N
O
Fourth Defendant
MICHIEL
SCHARRIGHUISEN N
O
Fifth Defendant
(
as
trustees for the time being of the Regardt Trust (IT1483/92)
THE
MASTER OF THE HIGH COURT
OF
SOUTH
AFRICA (WESTERN CAPE
DIVISION)
Sixth Defendant
Coram:
Wille, J
Heard:
7
th
of December 2020
Delivered:
21st of January 2021
JUDGMENT
WILLE,
J:
[1]
This is an opposed application launched by the trustees of the
Regardt Trust
[1]
,
for an order setting aside a subpoena issued out by the plaintiff
against Investec Bank.
[2]
The subpoena, in essence, sought the production of certain financial
documentation in connection with the affairs of the
trust.
Investec
[3]
,
indicated their willingness to comply with the terms of the subpoena,
unless same was set aside by way of an order of court.
[2]
For the purposes of clarity and ease of reference, the parties will
be referred to
as they were cited in the action proceedings and the
trustees of the trust, in turn, will be referred to as the ‘trust’,
unless otherwise indicated. The plaintiff, the first defendant
and the trust are embroiled in divorce proceedings, pending
in the
above court.
[3]
The plaintiff is seeking, inter alia, the following relief; a
decree of divorce;
maintenance for herself and the (4) minor
children born of her marriage to the first defendant; an order
declaring
that the assets acquired by the trustees of the trust
(which they ostensibly hold in their capacities as trustees of the
trust)
are in effect owned by the first defendant; an order
that when calculating the joint estate (alternatively, any accrual
that
has taken place in the first defendant’s estate), the net
value of the assets referred to above (at the time of the dissolution
of the marriage), must be taken into account as forming part of the
joint estate (alternatively, the first defendant’s estate).
[4]
Further, in the alternative, an order is sought for damages against
the first defendant,
inasmuch as it is alleged, that he breached the
terms of the ante-nuptial contract, by acquiring assets in the name
of the trust
(so as to place these beyond any claim that the
plaintiff may have in regard to the joint estate and/or any accrual)
and, an order
that should the first defendant hold insufficient
assets to satisfy the order made against him, that sufficient assets
be transferred
from the trust, to satisfy such order.
[5]
On the 12
th
of August 2020, the plaintiff caused a subpoena to be issued against
the trust, which was served upon Investec.
The
trust launched an application to prevent Investec from complying with
this subpoena insofar as it related to the bank records
of the trust
held by Investec. The trust advanced that the basis for the
setting aside of the subpoena was that it was pre-mature,
irregular,
irrelevant and vexatious.
[6]
The trust lists the several grounds on which it confronts the
subpoena, which are,
inter alia, the following namely; that the
information sought from Investec
is irrelevant at this stage of the proceedings; that the
information sought from Investec
is private and confidential; that
the t
rust
intends to file a special plea of misjoinder; that
the
allegations against the trust
have not yet been proven; that the plaintiff will only be
entitled to the documentation once
she is successful in her claims;
that -
nothing in law
-
requires the trust to make available to the plaintiff the documents
requested from Investec; that the documents sought by
way of
the subpoena are currently needed solely for the purposes of
mediation and or settlement negotiations and, that the plaintiff
is
on a fishing expedition for information to -
try
and use
- against the first
defendant (this, seemingly in the mediation process).
[7]
The plaintiff, in turn, advances that the trust does not have the
requisite -
locus standi
- to have launched the application and that it should have been
launched by the first defendant, or at the very least, should have
been procedurally supported by the first defendant. It is
submitted that no case has been made out (by the trust), that the
subpoena is an abuse of the court process and, that it has been
brought for any purpose, other than to
facilitate
the pursuit of the truth.
[8]
The argument is that the plaintiff is, at any stage of the
proceedings, entitled to
seek documents that will assist her with her
case, so to pursue the truth. Further, that the trust has
failed to set out
the -
extraneous
purpose
- for which the subpoena was
issued
. The
fact that the documents may or may not assist in the mediation
process, does not -
per
se
- mean
that the subpoena is an abuse of the court process or, has been
issued out for the purpose of obtaining some illegitimate
tactical or
other advantage, ulterior to the purposes of the court rules.
[9]
This argument is somewhat inextricably linked to the position taken
by the trust that
the documentation sought by the plaintiff is not
relevant at this stage of the proceedings. I disagree because,
relevance
is
essentially determined with regards to the -
issues
- that are in dispute on the pleadings. A party who wishes to
subpoena documents (that are relevant to the issues in dispute
on the
pleadings), may do so at any stage of the proceedings. It is
also clear to me from a reading of the pleadings, that
the first
defendant and the trust, both vehemently
deny
the allegations made by the plaintiff against the trust in the
divorce action.
[10]
The plaintiff takes the position that the financial information it
seeks from the trust, may
tend to prove the allegations made as
against the trust, which, inter alia, are; that the first
defendant contributed to
the financing of the acquisition of certain
trust assets, from assets of the joint estate; that the first
defendant caused
the growth in the value of the trust assets through
his personal endeavours; that the first defendant assisted in
the financing
of the maintenance and running costs of the trust
assets via the medium of the joint estate; that the first
defendant caused
the trustees of the trust to acquire some of the
assets of the trust (and facilitated the financing of the acquisition
of such
assets), and that at the time that the first defendant caused
the trustees of the trust to acquire assets, the first defendant
intended to retain control of such assets for his personal benefit
and to treat them as his personal assets. This, notwithstanding
the
provisions of the trust deed to the contrary.
[11]
Finally, it is submitted by the plaintiff that at all material times
during her marriage to the
first defendant and, (with the
acquiescence of his trustees), the first defendant conducted the
affairs of the trust and treated
the trust assets as his personal
assets and that he has been in effective control of such assets,
since their acquisition.
In summary, it is alleged that the
first defendant utilised trust assets, without remuneration to the
trust, for his own personal
gain. Further, the plaintiff
benefited from the trust, in that she received a motor vehicle that
was purchased for her by
the first defendant for her 40
th
birthday, but which remained registered in the name of the trust.
[12]
Historically, the first defendant received a monthly distribution
from the trust. The plaintiff
further submits that the bank
statements subpoenaed are very relevant, principally having regard to
the fact that the plaintiff
has a claim for maintenance against the
first defendant.
[13]
The trust also asserts that the documents sought in the subpoena are
not relevant at this stage
of the proceedings as they intend to raise
a -
special plea
-
of misjoinder and that, should they be successful, the trust will no
longer be a party to the proceedings. This approach,
I find
somewhat irreconcilable with the argument on behalf of the trust, to
the effect that the trust has the relevant and necessary
locus standi
to set aside the subpoena. This, because no exception has been
filed against the plaintiff’s particulars
of claim. In
addition, the amended particulars of claim clearly demonstrate that
the plaintiff’s case has not changed
in connection with the
relief that she seeks against the trust.
[14]
Further, the plaintiff in any event will retain her claim as against
the first defendant for
maintenance
[4]
and will retain her alternative claim for damages for an alleged
breach of the terms of their ante-nuptial contract. It is
not
the subject of any dispute that the first defendant is a trustee and
beneficiary of the trust and that he draws an income from
the trust.
Accordingly it seems to me that as far as the plaintiff’s
claim for maintenance is concerned, she is -
prima
facie
-
entitled to the information and the documentation that she seeks in
terms of the subpoena.
[15]
Confidentiality -
per se-
is also not a basis to seek to avoid
a disclosure of documentation relevant to the proceedings. The
plaintiff has undertaken
to limit the dissemination of the
documentation to her legal representatives, the experts to be
appointed in the divorce action
and to the mediator. No
peculiar privilege is claimed by the trust and in any event, in my
view, any privilege that may sought
to be claimed, falls to be the
subject of a claim by the first defendant and, not by the trust.
[16]
Further, this claim of privilege seems to be somewhat diluted in view
of the fact that the first
defendant has furnished the plaintiff’s
attorneys with certain statements from another financial institution,
in connection
with the affairs of the trust. An argument is
also raised that -
nothing in law
- requires it to make
available the documentation held by Investec. On this score, it
is however significant to note that
the trust is not being requested
to make the documentation available, it is Investec upon whom the
demand is made in accordance
with the subpoena.
[17]
The trust also takes the position that because the bank statements
were requested by the plaintiff’s
attorneys on the 30
th
of July 2020 (this before the subpoena was issued on the 12
th
August 2020), this chronology lends some confidence to the argument
that the subpoena was issued for an ulterior purpose.
[18]
In
HG
[5]
,
a
similar argument was employed and was rejected and it was held, inter
alia, that:
‘
It
may well be that the evidence obtained under the subpoena might be of
use to the wife in any interlocutory proceedings related
to the
interim maintenance regime pending the determination of the divorce
action, but if that is incidentally so, so be it. It
would not
make obtaining the evidence at this stage an abuse. The
collection of evidence at any early stage is ordinarily
a legitimate
exercise in the preparation for a trial. It may even be
conducive to an early settlement of the case –
something that,
were it to be achieved, would generally be in the interests not only
of the parties themselves, but also in the
interests of
administration of justice because it would alleviate pressure on the
trial rolls’
[19]
It is the plaintiff’s case that she has only resorted to the
issuing a subpoena due to
the refusal by the first defendant and the
trust to provide her with the documentation she had requested.
Significantly,
after the service of the summons upon the first
defendant, the trustees passed a resolution to cease making any
further payments
to the first defendant. This to me, is a clear
signal that the financial position of the first defendant is
inextricably
linked to the financial position and financial affairs
of the trust.
[20]
The plaintiff takes the position that the first defendant has not
launched any application to
set aside the subpoena on the grounds
contended for on behalf of the trust. It is only the trust
requesting the relief that
the subpoena be set aside. The onus
accordingly falls squarely on the applicant trust to establish an
abuse of the court
process.
[21]
The plaintiff claims, inter alia, life-long maintenance from the
first defendant and accordingly
advances that the financial status of
the trust, vis a vis, the extent and nature of its payments to the
first defendant, is one
of the core issues to be traversed, in both
the mediation process and, if that fails, in the subsequent trial.
The first
defendant is renumerated by the trust and also receives
certain benefits from the trust. The plaintiff herself acquired
the
use of a motor vehicle, via the medium of the trust.
[22]
As mentioned, after the commencement of the action proceedings by the
plaintiff against the first
defendant and the trust, the trust
resolved
[6]
,
to cease making any distributions to the first defendant which, in
turn, directly impacted upon the first defendant’s ability
to
make any payments to the plaintiff and the (4) minor children, born
of their marriage.
[23]
In a letter from the plaintiff’s attorneys
[7]
,
the plaintiff re-affirmed her resolve to attempt not only to settle
the matter via the process of mediation, but also emphasized
that the
process of mediation, would run as a parallel process to and with,
the action proceedings. A rule (43) application
has also been
launched in the interim.
[24]
The plaintiff also contends for the position that the trust does not
have the necessary -
locus standi
- to apply to set aside the
subpoena, absent any application from the first defendant in this
connection. More importantly,
it is submitted that the trust
can hardly raise the argument that the provisions of the subpoena are
too wide, absent any intervention
and participation by the first
defendant himself. On this aspect, I agree. I cannot
imagine or foreshadow any prejudice
to the trust in this connection.
Further, Investec has not raised that the provisions of the
subpoena are too wide so that
they are unable to comply therewith.
To the contrary, they advise that they have complied with the
subpoena and are in a
position to collate and hand over the
documentation as requested under and in terms of the subpoena.
[25]
It does not appear to me how the rights of the trust may in any
manner be affected or violated,
should the subpoena be complied with
by Investec. The plaintiff has in any event tendered the
necessary safeguards in this
connection (regarding the dissemination
of the documentation sought to be obtained). Further, notably
the first defendant
has never offered up any complaints in this
connection.
[26]
Section 35 of the Superior Courts Act
[8]
,
grants a litigant a right to secure the attendance of a witness or
the production of any document or thing, which the litigant
may
require in terms of the rules of court.
‘
(1)
A party to proceedings before any Superior Court in which the
attendance of witnesses or the production of any document or thing
is
required, may procure the attendance of any witness or the production
of any document or thing in the manner provided for in
the rules of
that court
’
[27]
Rule 38 of the Uniform Rules of Court, in turn provides that:
(1)
‘(a) Any party, desiring the
attendance of any
person to give evidence at a trial, may as of right, without any
prior proceeding whatsoever, sue out from the
office of the registrar
one or more subpoenas for that purpose…’
‘
(b)
Any witness who has been required to produce any deed,
document, writing or tape recording at the trial shall hand
it over
to the registrar as soon as possible, unless the witness claims that
the deed, document, writing or tape recording is privileged’
[28]
In
Beinash
[9]
,
Mahomed CJ, set out the approach to be adopted by the courts in the
setting aside of a subpoena. It was held that:
‘
What
does constitute an abuse of the process of the Court is a matter
which needs to be determined by the circumstances of each
case.
There can be no all-encompassing definition of the concept of
“abuse of process”. It can be said
in general
terms, however, that an abuse of process takes place where the
procedures permitted by the Rules of the Court to facilitate
the
pursuit of the truth are used for a purpose extraneous to that
objective…’
[29]
In
South
African Coaters
[10]
,
it
was held that in order to succeed in an application where an
applicant, who is not the recipient of a subpoena, seeks to set
it
aside, the applicant will have to demonstrate that the subpoena is an
abuse of process. In my view, the trust has failed,
on these
papers, to exhibit that the subpoena issued out by the plaintiff is
an abuse of the process and they have also failed
to
demonstrate
that they have a sufficient or adequate interest in the outcome of
the application.
[11]
[30]
Finally, as mentioned before, a belated argument, raised for the
first time in the applicants’
heads of argument, is that the
wording in the subpoena is too wide and does not specify the specific
documents that the witness,
so subpoenaed, is required to produce. I
disagree, because although the wording of the subpoena may be open to
some criticism,
Investec itself had no difficulty in complying with
the terms of the subpoena. Further, and in any event,
this objection
was not raised by the first defendant, but rather by
the trust, which trust, has clearly suffered no prejudice, due to
these alleged
formulation defects.
[31]
For these reasons, the
application falls to be dismissed and
the
following order is granted:-
1.
That the applicants’ application is
dismissed.
2.
That the costs of and incidental to the
application, including the costs of two counsel (where so employed),
shall be paid by the
applicant trust, on the scale as between party
and party, as taxed or agreed.
E
D WILLE
Judge
of the High Court
[1]
The
trust
[2]
Investec
[3]
By
way of a letter
[4]
Both
personal maintenance and maintenance for her children
[5]
HG
v AG; AG v HG and Another
(2331/2017;
3487/19)
[2019] ZAWCHC 125
(20 September 2019), para 52
[6]
On
the 15
th
of July 2020
[7]
Dated
the 26
th
of August 2020
[8]
Act
10 of 2013
[9]
Beinash
v Wixley
[1997] ZASCA 32
;
1997
(3) SA 721(SCA)
, par 28
[10]
South
African Coaters (Pty) Ltd v St Paul Insurance Co (SA) Ltd and Others
2007
(6) SA 628 (D)
[11]
Four
Wheel Drive Accessory Distributors CC v Leshni Rattan NO 2018 JDR
2203 (SCA)