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[2011] ZAGPJHC 241
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Makate v Vodacom (Pty) Ltd (2011/07680) [2011] ZAGPJHC 241; 2014 (1) SA 191 (GSJ) (18 November 2011)
Links to summary
REPORTABLE
SOUTH
GAUTENG HIGH COURT, JOHANNESBURG
CASE
NO: 2011/07680
DATE:18/11/2011
In the matter between:
MAKATE,
NKOSANA
KENNETH
............................................
Applicant/Plaintiff
and
VODACOM
(PTY) LTD
….................................................
Respondent/Defendant
JUDGMENT
SPILG,
J:
NATURE
OF APPLICATION
The Applicant, Mr
Makate, instituted action proceedings against the Respondent,
Vodacom (Pty) Ltd, for an order declaring that
he had concluded a
binding oral agreement with Vodacom represented by Mr P
Geissler, its Director of Product Development
and Mr Muchenje, the
head of its Finance Division. The Applicant also seeks an order for
a statement and debatement of account
together with payment of the
amount to be found due.
The trial which had been
set down for November 2010 was postponed pursuant to a formal
application by the Applicant. The Applicant
claimed that he was
unable to proceed because the Respondent had failed to properly
discover relevant documents necessitating
a Rule 35(3) notice. The
notice was served on 15 October 2010; it sought both discovery and
inspection of documents (Rule 35(6)
and (10) notices had previously
been served). Subsequent to the postponement, and because not all
the documents sought were produced,
in May 2011 the Applicant
brought an application under Rule 35(7) to compel the respondent to
make further and better discovery
of certain specified documents and
to inspect them. The Rule 35(7) application was opposed and is now
before me for adjudication.
BACKGROUND
The issues in the main
action are principally concerned with whether or not the Applicant
was the originator of a product used
by Vodacom known as “
Please
Call Me
”, and if so whether Vodacom had agreed to
remunerate the Applicant. Vodacom effectively denies both these
allegations in
what can best be described as a rolled up plea to
which objection has not been taken.
The Applicant faces
formidable obstacles, not the least of which is documentation in the
hand of Mr Alan Knott-Craig, the former
CEO of Vodacom claiming that
he originated the product. He is supported by Vodacom’s
Director of Product Development and
Management, Mr Philip Geissler.
If correct, the documentation is destructive of the Applicant’s
claim. Even if the Applicant
can demonstrate that the product was
not the creation of Mr Knott-Craig a further difficulty is
overcoming the defence that any
rights attaching to a product
originated by him during the course and scope of his employment with
Vodacom belonged to it. In
this regard the Applicant claims that he
was employed in Finance and not in the Research and Development
Department (“
R&D”
) of Vodacom. He also
claimed that staff in R&D received additional remuneration for
originating or devising products and
that Mr Geissler had expressly
agreed on behalf of Vodacom to remunerate him.
In his published
biography “
Second is Nothing
”(with Eunice
Afonse), Mr Knott-Craig wrote (at p154):
“
The Please
Call Me idea happened by chance. Alan was leaning over the railing of
the Vodacom building chatting to a colleague, Phil
Geissler, when
Phil pointed out one security guard trying to attract another’s
attention, and because his buddy didn’t
see him, the security
guard called him on his cellphone. Alan immediately spoke to Leon
about creating a Please Call Me service.
Because the Please Call Me
SMS sent was free, Vodacom made money by adding short advertisements
just below the message, but the
real money came from the return call.
This concept generated hundreds of millions in revenue. By 2008,
Vodacom generated 20 million
Please Call Me requests daily”
The colleague mentioned
in the extract, Mr Geissler, sent an email to Mr Knott Craig on 25
December 2009 effectively corroborating
the account. He wrote:
“
As discussed,
I read latest book and agree in principle with the way Please Call Me
was created on the 4
th
floor outside your
office with two of Vodacom’s security guards playing a role of
two ‘prepaid’ users without
any credit on their phones
communicating with each other.
The concept of ‘Call
Me’ was refined inside your office minutes later and launched
officially in late 2001.
I hope this helps with
media queries.
Merry Christmas
Philip”
By contrast the
Applicant relies in his particulars of claim on a number of admitted
documents emanating from Vodacom acknowledging
that he had
originated the product and undertaking to discuss remuneration. This
appears from certain emails between Mr Muchenje,
Mr Geissler or the
Applicant, the salient portions of which read:
“
From: Lazarus Muchenje
Sent
: …
December 19, 2000
To
: Kenneth Makate
Cc:
…;. Philip
Geissler; …
Subject
: Buzzer
product
Ken,
The company is going to introduce a
product similar in concept to the buzzer project soon. So well done
for coming up with the buzz
idea.
We appreciate your innovative ideas
Lazarus Muchenje
Executive Head of Income Financial
Control Division
-------------------------------
“
From:
Philip
Geissler
Sent
; 26 December
2000
To
: Lazarus Muchenje:
Kenneth Makate
Subject
: RE Buzzer
product
I will keep you guys in the loop
Philip Geissler
Director
Product Development and
Management
---------------------------
“
From
:
Kenneth Makate
Sent
: …
January 18, 2001
To
: Philip
Geissler; …
Subject
: Buzzer
product
How are we doing on this ….
Any developments so far (We still have to meet)
Mr Geissler then
requested the Applicant to provide a name for the service (“
What
do you think we should call it? I need a name.”
)
and the Applicant
replied by suggesting the name “
”Voda-Back”,
and added
“
Lastly as per our verbal conversation, I think we should start
talking about “REWARDS”, can you please notify
me when
can this be feasible.”
The response by
Mr Geissler on 6 February 2001 reads:
“
Thanks. I will pass this on
to the Adv people.
As for rewards. All staff are
expected to assist the company to achieve its goals. That is part of
normal business. As for you and
your assistance. Once the product is
launched (and assuming its successful) I will speak to Alan. You have
my word.
Thanks again”
Presumably “
Alan
”
is Alan Knott Craig who it is common cause wrote, or vetted, the
passage in his biography set out earlier which details
how he
originated the idea, the authenticity of which was corroborated in Mr
Geissler’s Christmas Day message mentioned earlier.
In an internal email
sent a few days later on 9 February 2001 to all staff members, the
authorship of which is admitted, Mr
Geissler states:
“
Vodacom is launching a new
product this weekend (Sunday Times) that will hopefully stimulate
call traffic on the network as well
as assist some of our subscribers
who do not have balance on their VodaGo accounts to be able to
communicate with family and friends.
Kenneth Makate from our Finance
Dept came up with this idea a few months ago and brought it to the
Product Development Division.
We wish to thank Kenneth for bringing
his idea to our attention.
The way it works:
You send what is called a USSD
message to another person asking the other person to call you back.
The other person must have a
Vodacom cellphone but can use any
telephone to return the call.
The USSD command is
*140*0821111111# (Send or Call)
A standard SMS will be sent to the
other person asking that person to “Call Me”.
Please try it and let us know what
you think of it
Regards
Philip Geissler
Director Product Development &
Mgt””
By way
of explanation, USSD is an acronym for “
Unstructured
Supplementary Service Data
”
,
a technology found in all GSM phones and networks.
In one of Vodacom’s
magazines a half page was devoted to
“Call Me”
and
included a photograph of the Applicant. The article, which forms
part of the particulars of claim, repeated much of the contents
of
Mr Geissler’s internal email to staff.
Other documents produced
by Vodacom reveal that on 22 January 2001 a confidential product
development report on the “
Call Me”
service
provided three possible revenue models ranging from a worst case to
best case scenario. The document was circulated to
senior management
for approval. The Finance Director expressed his reservation that
the product might change call patterns and
that it was not possible
to predict the extent to which the “
Call Me
”
service would off-set potential losses. He was concerned that the
pre-paid customer base was not clearly understood, that
there could
be a long term detrimental effect and advocated for a more cautious
initial approach. The Finance Director recommended
“that a
closed user group be established in order to determine changing
calling patterns.”
He also attached a document which
provided estimates of use by prepaid Vodacom subscribers.
At this stage there is
no evidence indicating whether or not the subsequent internal email
of Mr Geissler was intended to establish
such a group. Nonetheless
the desirability of monitoring the effect of the product and whether
it’s revenue returns would
off-set potential losses appears
from the document itself, which anticipates the need for the
following reporting requirements
at paragraph 2.4:
“
Number
of the SMS-MT sent with a break down indicating the type of users
i.e. pre-paid or post-paid (contract) users.
. The list of
subscribers that have made use of the service on a daily basis “
.
Under the paragraph
headed “
Interconnect
” it was noted that the
current implementation does not cater for sending requests to any
other Public Land Mobile Network
(“
PLMN”
) except
the Vodacom network and accordingly no direct impact on interconnect
charges or business processes was envisaged in the
original model.
SMS-MT is the acronym for
a Mobile Terminated Short Message System. In the context of these
passages it appears to refer, at least,
to the number of text
messages transmitted by a user on the Vodacom network to the
cellphone of another Vodacom customer.
The case made out by the
Applicant in his particulars of claim is that in about November 2000
he originated a product that would
allow a prepaid airtime
subscriber who had run out of airtime to send a free sms message to
the person he wished to call requesting
the recipient to return the
call. This necessitated the creation of a line that would identify
and permit the onward transmission
through the system of a free sms
message to the intended recipient who may or may not be a Vodacom
subscriber. If the recipient
then made a call back to the sender
revenue would be generated in cases where the recipient was a
Vodacom subscriber or where
part of the call went through the
Vodacom cell telephony system (commonly known as a switching fee).
The Applicant alleges that
he discussed this with senior Vodacom
personnel.
The proposed service
product was originally given the name “
Buzz”
then
changed to
“Call Me”
and is now known as
“Please
Call Me”.
The service will be referred to in this judgment
as ‘
Call me”
. The Applicant contends that he spoke
to, and concluded an agreement in relation to his concept with, Mr
Muchenje who headed Vodacom’s
Finance Division (and was his
immediate superior) as well as the Director of Product Development,
Mr Geissler. He avers that subsequent
to concluding the agreement the
“
Call Me”
product was launched and generated
income for Vodacom.
In partial response to
Vodacom’s defence that any invention or idea of an employee
during the course of employment enured
to it, the Applicant
averred that a Mr Pambos Soteriades, described as a manager in the
employ of Vodacom, had subsequently
patented the product in Greece
and that Soteriades and Knott Craig are personally receiving
financial reward from the product’s
use. These averments were
made in paragraph 38.4 of the reply and form part of Vodacom’s
application to strike out. Irrespective
of its status, Vodacom has
not been afforded an opportunity to respond and its evidential value
(even assuming that Vodacom could
have filed a further affidavit) is
questionable without corroboration.
THE
ISSUES
Ms McManus,
on
behalf of Vodacom
resists the Rule 35(7) application on the
following grounds;
Vodacom does not have
the documents identified in items 1 to 5, 12, 16 and 17 of the Rule
35(3) notice.
In broad terms these are
documents which would reflect the number of calls induced by the
“Call Me”
SMS-MT text message and the revenue so
generated as well as the contracts concluded with third parties
regarding the utilisation
of the
“Call Me”
product,
Vodacom’s incentive policy for innovations, contracts between
Schlumberger Sema (Pty) Ltd and Atos Origin regarding
the
“Call
Me”
concept and documentation served on ICASA (the mobile
service regulator) regarding the
“Call Me”
concept
prior to its launch;
Item 13 is irrelevant.
This is the KPMG Forensic Audit Report of August 2008;
In any event these
documents are not relevant to the main claim which is confined to
the existence of the contract and its terms.
The documents sought
are only relevant to quantification which is a contingent claim
dependant on the outcome of the main claim.
A number of other items
referred to in the Rule 35(3) notice were not included in the Rule
35(7) application. Mr
Magano
on behalf of the Applicant
indicated that these were excluded because Vodacom had undertaken to
provide them but different documents
were in fact forwarded. The
items requested were therefore re-introduced.
APPLICABLE
PRINCIPLES
The contents of a
discovery affidavit are regarded
prima facie
to be
conclusive with regard to the existence of documents and accordingly
a court will be reluctant to go behind the affidavit.
See
Swissborough Diamond Mines v Government of the Republic of South
Africa and Others
1999 (2) SA 279
(T) at 317E-G
.
The courts require a
sufficient degree of certainty that the documents exist (see
Continental Ore Construction v Highveld Steel and Vanadium
Corporation Ltd
1971 (4) SA 589
(T) and
Federal Wine and
Brandy Co Ltd v Kantor
1958 (4) SA 735
(E) at 749G-H(
a degree
of conviction approaching practical certainty”
).
This is hardly
surprising. The consequence of a court order being
de facto
impossible to implement exposes the offending party to contempt
proceedings for not procuring something he did not have in the
first
place and exposes the order to ridicule. Accordingly it is necessary
to be circumspect before directing production in the
face of a denial
of a document’s existence.
Nonetheless it is also
recognised that a party cannot rely on his denial under oath of a
document’s existence if, for instance,
mala fides
can
be shown (
Swissborough
at 321E), or the discovery affidavit
itself, a document referred to in discovery, the pleadings or an
admission evidences the
document’s existence to the requisite
degree (
Federal Wine
at 749G-H). Similarly statutory or
professional obligations, such as tax legislation or basic
accounting requirements , regarding
the retention of the records
may also suffice if no acceptable explanation is provided for their
non-production.
Where
mala fides
is
raised then the principles enunciated in
Plascon-Evans Paints Ltd
v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634G
apply. It remains open for an applicant ”
to seek a
referral of the dispute of fact for oral evidence or even trial”.
For both propositions see
Swissborough
at 321E.
The relevancy of a
document may also involve determining whether the ambit of the
issues in dispute (including the legitimate
testing of credibility
on a non-collateral issue or the existence of other pertinent
documents) is misconceived by the respondent.
In such a case the
existence of the document is already established and the enquiry is
more concerned with a legal determination
of whether the extent of
the issues in dispute has been properly comprehended. The
consequence is that the respondent’s
say so under oath does
not necessarily play as dominant a role (However compare
Marais v
Lombard
1958 (4) SA 224
(E) at 227G which holds that the
respondent’s affidavit remains
prima facie
conclusive .
Marais
was mentioned by Joffe J in
Swissborough
at
317E-F to support the general proposition regarding the conclusive
nature of a discovery affidavit).
In any event, it is open
for the court to scrutinise the document in order to determine
relevance and impose suitable safeguards
against unnecessary public
disclosure where issues of confidentiality arise.
There are two more
issues that require consideration. The first is to determine the
adequacy of the identification of the desired
documents in the Rule
35(3) notice where the document sought is not the source document
but is an extrapolation of electronically
preserved computer data on
a disc through a filtering , or series of filtering, processes.
The other is whether it
is sufficient to exclude documents on the grounds that they are not
now relevant since they do not arise
at the liability phase but only
at a resumed hearing should the claimant party be successful on the
merits of the case: In particular
whether the other party should have
discovery of documents that may only now be relevant for purposes of
settlement negotiations.
These issues will be dealt with when
considering the specific document to which objection is taken on the
grounds that they are
only relevant to a contingent issue.
I proceed to consider
each of the documents which are the subject of the Rule 35(7) notice
by reference to their subject matter.
DOCUMENTS
RELEVANT TO QUANTUM ONLY
The Applicant requires
discovery and inspection of the following documents;
the annual records
reflecting all
“Please Call Me”
product calls
since the beginning of 2000 to date;
the annual records
reflecting the total number of calls made in response to the
“Please Call Me”
message (ie the “
induced
calls”
) through the Respondent’s facilities since
the beginning of 2000 to date;
the documents
reflecting the annual revenue generated by the Respondent as a
result of the induced calls, from the beginning
of 2000 to date;
a list of all contracts
entered into by the Respondent’s with third parties which
regulate the use of the
“Please Call Me”
product
by third parties, indicating their names and the contract date;
documents reflecting
the Respondent’s policy for incentivising its employees for
new ideas and inventions
The Applicant also
requested copies of the last mentioned contracts and an electronic
copy of the annual records mentioned earlier.
These requests
properly form the subject the Applicant’s Rule 35(10).
Although the point was not taken, it would be more
correct to have
requested discovery of each of the contracts, as a list might not
have been maintained or the computer software
may not be programmed
to extract such a list.
The Respondent raises
two objections. The first is a principled one, namely that discovery
relevant only to an accounting is premature
since that part of the
claim is contingent upon a court first pronouncing in favour of the
Applicant on whether he was the originator
and whether there was an
express (or possibly implied) agreement as to remuneration.
Ms McManus submits that
documents relevant to an accounting need not be discovered until the
question of liability is first resolved
and relies on
Continental
Ore Construction v Highveld Steel and Vanadium Corp Ltd
1971 (4)
SA 589
(W). In that case the question before the court was whether
the ordinary principles that discovery must be made in respect of
every relevant issue pleaded, even where the issue of the quantum of
the claim whether for profits or arising from damages, either
under
contract or delict, is contingent upon the plaintiff first proving
the existence of the disputed contract or proving a
basis for
attaching liability upon the defendant. The point arose because it
was evident that the issue regarding the existence
of the contract
would be separated and determined first while the defendant
contended that the documentation sought was highly
confidential
relating to its business relationships and would, if revealed, give
the plaintiff a competitive advantage.
In
Continental Ore
Margo J after referring to a number of earlier South African cases
indicated that Rule 35(7) had expressly been modified to
afford the
court a discretion to order discovery in a particular case (at 594H)
and proceeded to consider cases that had dealt
with its application.
The court however made it clear at p595E that deferment of discovery
“
will only be justified in the exceptional case, where the
Court will not oblige the defendant to contest the issue on which
the
discovery is claimed until the plaintiff has succeeded on the
primary issue”.
The court in
Continental
Ore
then considered the appropriateness of adopting English
authority on deferring discovery in relation to a contingent issue,
and
at 595 H-596A the following passage by Willmer LJ in
Buchanan-Michaelson v Rubenstein and Others
(1965) 1 WLR 390
(CA) at 384D-E was cited, a case where the Court of Appeal of its
own motion deferred discovery;
"The
documents to which the application relates are documents which, as I
see it, would be relevant only to the amount which
the plaintiff
might be entitled to recover if, but only if, he proves the contract
which he has sought to set up. Only if
he proves that contract
will he show that the defendants... are accountable parties."
A reading of the
subsequent passages in
Continental Ore
indicates that the
issue is case specific and involve considerations such as the
prejudicial nature of the information if it is
revealed to the
Applicant. Accordingly one cannot with respect read the earlier
passage at p595E of the judgment, which I have
extracted, as an
unqualified statement in every case where a contingent and severable
issue for later determination arises.
There are of course
other considerations such as immersing a litigant in an expensive
discovery process where innumerable documents
would be required. By
the same token it should not be overlooked that court procedures are
not there only to secure the resolution
of disputes through a
judgment pronounced by a court of law after hearing evidence. On the
contrary the majority of cases are
resolved through settlement and
Rule 37(6) (c), relating to the holding of a pre-trial conference,
expressly requires the parties
to at least discuss the possibility
of settlement after pleadings have closed and discovery made.
The settlement process
would clearly be inhibited by precluding a genuine settlement if one
of the parties withheld documents peculiarly
within its possession
which are not necessarily confidential but which allow the other
party to fairly appreciate the value of
his claim if successful. It
would be wrong for court procedures to encourage settlement if one of
the parties is entitled to withhold
material information for an
informed decision to be made on the advisability of settling or not
and on what basis. The Rules did
not intend that a party settles
blind while the other knows exactly what the downside is if it loses
on the merits. It also may
encourage technical defences to the merits
and force settlements where one of the parties has the financial
resources to out-litigate
the other. In short the question of whether
or not discovery should be deferred in exceptional circumstances has
regard to broader
considerations such as those that may impact on the
possibility of settlement and what bests serves the interests of
justice in
a particular case.
A court must however
remain alert to potential abuse of the discovery process. This may
arise if the procedure is utilised
in terrorem
to debilitate
a respondent by requiring it to incur exorbitant expense and tie up
large numbers of qualified staff and lawyers.
The greater use of
electronic documentation (“
e-documents
”) whether
as a means of communication (such as e-mails) or as a means of
storing information (such as computer databases
or central servers)
exacerbates the risk of potential abuse. The issue has received the
attention of many jurisdictions and has
spawned specialist in the
field of discovery (or disclosure) of electronic material. Lord
Jackson in his
Review of Civil Litigation Costs (Preliminary
Report)
of May 2009 vol 2 at para 1.1 (which was prepared at the
request of the Master of the Rolls) summed it up as follows:
“
the existence
of a vast mass of electronic documents presents an acute dilemma for
the civil justice system. On the one hand, full
disclosure of all
electronic material may be of even greater assistance to the court in
arriving at the truth than old style discovery
of documents. On the
other hand, the process of retrieving, reviewing and disclosing
electronic material can be prodigiously expensive.
Certain short cuts
are available, such as the use of keyword searches. However, the
sheer volume of potentially disclosable electronic
material which is
now generated in the course of a project means that disclosure is now
becoming an even more expensive process
than
formerly.”
In the present case the
main issues relate, firstly to whether the Applicant is the
originator of the product or the idea for
the product and if so
whether there was an undertaking by Vodacom to remunerate him either
on a specific basis based on an implied
or tacit term of reasonable
remuneration to a person in the position of the Applicant employed
in that type of industry (compare
Middleton v Carr
1949(2)
SA 384 (A) at 386 last para;
N Goodwin Design (Pty) Ltd v Moscak
1992(1) SA 154 (C) at 166E-G and
Genac Properties (JHB) Pty
Ltd v NEC Administrators CC
1992(1) SA 556 (A) at 577G-578C),
or whether he was not entitled to any additional remuneration
because he was working for
Vodacom at the time and as a result, any
innovation on his part (irrespective of the fact that he happened
to work in accounts)
immediately became the property of the company
which employed him.
Earlier I set out the
conflicting versions of how Knott-Craig, supported by Geissler,
claimed to have originated the product while
Vodacom’s own
internal documentation emanating
inter alia
from Geissler
gives credit to the Applicant. This is relevant to determine whether
the discovery of documentation regarding the
quantum of the claim
ought to be deferred because the case falls within the type of
exceptional situation alluded to in
Continental Ore
. I am
satisfied by reference to these admitted documents (albeit that
their contents are not admitted by Vodacom) that the claim
is
bona
fide
made and that the Applicant is not seeking to abuse the
discovery process. Moreover the possibility of settling the case
before
the hearing cannot be ruled out, even if from a respondent’s
perspective it is precipitated by reason of the production.
This is
not a case where considerable cost and effort may have to be
incurred in a manifestly pointless exercise.
The second issue raised
by Vodacom in regard to this category of documents (ie. those
relevant only to
quantum)
is that it does not have these
documents. This raises the question of the veracity of the Vodacom’s
denial and whether
the court can go behind it with certainty.
There are a number of
difficulties in accepting at face value the contents of the
respondent’s affidavit denying the existence
of the
documentation sought. The first is that the deponent fails to
qualify himself as having sufficient knowledge of the documentation
possessed by Vodacom, bearing in mind that the documentation may
only be in electronic format.
On its own that would be
insufficient. However it is apparent from paragraph 2.4 of the
confidential product development report
of 22 January 2001 (see para
[11] above) that Vodacom’s executives considered that they
could extract from its database a
“
list
of subscribers that have made use of the service on a daily basis”
with a breakdown of whether the user was on a
pre-paid or term contract. It is evident that the dedicated USSD
command exclusive
to initiating a
“Call
Me”
request (
*140*0821111111# -
see para [8] above)
would be capable of ready
monitoring and that each sms utilising that dedicated code with at
least the time of despatch, and
to whom directed, would be retained
on Vodacom’s database and capable of ready extraction.
This does not require
expertise in the field. One’s own cellphone account and an
elementary understanding of the data it contains
suffice. Accordingly
I am satisfied that at least one key component of the documentation
sought is readily accessible and stored
on Vodacom’s database
and, subject to a consideration of whether it constitutes a document
for purposes of Rule 35, must
be discovered
.
The question of whether
Vodacom’s database can extrapolate the calls made by their
subscriber’s in response to a
“
Call Me”
sms
is more problematic based on what may be perceived to be “common
knowledge” to which a judicial officer is confined,
whatever
his or her specialised knowledge is perceived to be.
It is evident that at
least the identity of the cellphone number to which the initiating
sms was directed would be known and that
again constitutes common
knowledge by reference to cellphone service provider’s monthly
statement to a subscriber. The question
whether, and if so what,
assumptions are made regarding which return call can be attributed to
the initiating sms is not self evident.
At the least one would expect
an assumption to be made by reference to a time limit within which
the return call is expected to
be made. Nonetheless whether the basis
is determined by reference to data that can be extracted or is an
actuarial estimate is
not known and it would be dangerous to
speculate. The information is peculiarly within the knowledge of
Vodacom although the ability
to monitor in an informed way remains
evident from the documentation referred to in the previous paragraph.
In
Swissborough
the
court at p 321G accepted that in an appropriate case an applicant
could seek a referral of the dispute to oral evidence or
to a
separate trial. Caution needs to be exercised before an issue
relating to discovery is referred to the hearing of oral evidence.
A
court may wish to balance the expedition of allowing the existence
or otherwise of the document to be tested during the main
trail
against the prejudice of being unable to properly prepare for the
trial itself. The present case will not allow for that
process since
the main hearing will be confined to the merits of the claim and in
any event it is in my view in the interests
of the proper and
expeditious finalisation of the case that the question of the extent
of the data that can be retrieved is determined
where already one of
its elements (ie. the number of initiating smses, when made and to
whom) are readily accessible.
There are other
documents sought which fall within the same category where serious
doubt exists as to the veracity of Vodacom’s
denial regarding
whether the documentation exists. In particular it is difficult to
comprehend why documentation which did exist
has been lost or
destroyed when Vodacom is an electronic documentation oriented
enterprise and one would expect communications
and documentation to
have originated on desktop computers within Vodacom. There appears
to be no sound reason for the removal
of such files, nor is the
issue addressed at all.
One also gets the
distinct impression that the deponent has concentrated exclusively on
the existence or otherwise of a hardcopy
of the document and has
either not considered looking for the originating electronic document
or considers that the request does
not cover it.
I accordingly consider it
necessary to consider whether an electronic document is covered by
the provisions of the Rule 35 discovery
process. In this regard the
key provision is Rule 35(15). It was amended together with a number
of other sub-rules in 1987 (Government
Notice 2164 of 27 November
1987) to require the discovery of “tape
recordings
”
in addition to documents. Rule 35(15) identified a tape recording for
the specific purposes of both Rules 35 and 38 to
include (ie. not
necessarily limited to but at least forming part of the same
genus
as) “
a sound track, film, magnetic tape, record or
any
other material on which visual images , sound or other information
can be recorded.
It is evident that a hard disc drive or
even a flashstick would constitute material on which information can
be recorded.
It
may be contended that the manner in which the Rule was amended
limited the scope of what could constitute a document, because
it
introduced the term tape recording and only extended its meaning, as
opposed to simply extending the meaning of a
“document
”
to incorporate all these other forms or means of recordal. In
Le
Roux v Hon Magistrate Mr Viana
[2007] SCA 173 (RSA), the SCA
pointed out at para [10] that the “
Concise Oxford English
Dictionary (10
th
edition revised) defines
….. a document as ‘a piece of written, printed or
electronic matter that provides information
or evidence or that
serves as an official record’
.
To the extent that the
amendment to Rule 35 (1) in 1987 dealt with advances in the storage
of data it did so by reference to the
term “
tape recording
”
instead. While this at first sight may be a distinguishing feature of
Le Roux
,
which was called on to interpret the meaning
of the word “
document”
in
section 69(3)
of the
Insolvency Act 24 of 1936
, as pointed out by Mlambo AJA this clearly
is the modern understanding of the term used by the legislature (or
in this case, the
delegated power) and fits within the purpose and
object of the use of the term then adopted. Certainly electronic data
recordal
fits within the term “
tape recording
” in
its extended
Rule 35(15)
form.
In any event
section 12
of
the
Electronic Communications and
Transactions Act 25 of 2002
provides that insofar as a data message
is concerned, such a message, provided certain requirements are
satisfied, would constitute
a document for the purposes of
Rule 35.
Section 12
reads:
“
A
requirement in law that a document or information must be in
writing is met if the document or information is-
(a) in the form of a
data message; and
(b)
accessible in a manner usable for subsequent reference.”
See also
sections 14
,
16
and
17
of that Act. See also
Le Roux
at ftn 1 to para [15].
It is necessary to add
that information stored on a computer’s hard drive or remote
server is extracted by means of commands
which can either limit the
data by means of a search request for corresponding data or through
a filter process (most commonly
found in basic off- the shelf
personal use accounting packages) by reference to date, subscriber
and innumerable other programmed
criteria. I am satisfied that it
still retains the characteristic of a document or tape recording,
the filtering or search function
simply limiting the amount of data
retrieved into a relevant form for its purpose.
I am accordingly
satisfied that an e-document, ie. electronic material whether it be
in the form of a communication or stored
data that is retrievable
through a filtering process or a data search, is discoverable under
Rule 35
procedures. Even if it were not so it would be open to
utilise the provisions of
Rule 35
(7) in order to ensure that the
discovery process achieves its objective in the electronic age. The
caution expressed earlier
about the need to ensure that discovery
remains within acceptable limits, having regard to the volume of
data captured and retained
by electronic means has received
consideration in other jurisdictions in the form of specific
discovery procedures for electronic
material. I have attempted to
be cognisant of these concerns. In the present case they do not
arise.
I have considered that a
referral to oral evidence of certain defined issues is appropriate.
I also consider that the other usual
limiting provisions contained
in what has come to be referred to as the
Metallurgical
type
order are unnecessary.
KPMG
FORENSIC AUDIT
I considered the
document and am of the view that only the contents of paragraphs 4.
5 and 4.7 are relevant having regard to a
matter in question as
determined by the pleadings.
ORDER
On 23 September 2011 I
consequently made the following order;
1. The Defendant is
directed to make further discovery within 15 days of:
The records
reflecting all “Please Call Me” product calls since the
beginning of 2000 to date;
Paragraph 4.5 and
4.7 , being pages 25 to 37 and 39 to 49 (but excluding the
contents of paragraph 4.8 on the last mentioned
page) of KPMG’s
Forensic Investigation Report dated 3 November 2008;
The contract between
Vodacom and Cellfind;
The signed and
approved scorecard and Performance agreement of the Plaintiff
during 1999 and 2000.
The issues of;
whether there exists
a record that can be extrapolated from the defendant’s data
base of ;
the total number of
calls made annually in response to the “Please Call Me”
message (ie the “induced
calls”) through the
Defendant’s facilities since the beginning of 2000 to date;
the annual revenue
generated by the Defendant as a result of the induced calls, from
the beginning of 2000 to date;
whether any written
contracts have been entered into by the Defendant with third
parties which regulate the use of the “Please
Call Me”
product by third parties, and if so with whom and when in each
instance;
whether the
following documents exist for the period 1999 to 2000;
the Key Performance
Area in respect of the Plaintiff;
the Key
Performance Incentive in respect of the Plaintiff;
the Incentive Bonus
Targets in respect of the Plaintiff;
the Key Performance
Incentive in respect of the Product Development Department for
managerial level employees;
the Key Performance
Incentive in respect of the Product Development Department for
non-managerial level employees;
whether documents
exist reflecting any policy for incentivising the defendant’s
employees for new ideas and inventions;
whether any written
contract governs the development, maintenance and upgrade of the
“Please Call Me” concept between
Schlumberger Sema
(Pty) Ltd and Atos Origin
are referred to oral
evidence.
The evidence shall be
that of any witness whom the parties or either of them may elect to
call with rights of subpoena and production
of documents under
subpoena.
The
costs of the application are reserved for determination after the
hearing of oral evidence.
______________________________________________
DATE OF HEARING: 24/08/2011
DATE OF ORDER: 23/10/2011
DATE OF JUDGMENT: 18/11/2011
DATE REVISED: 5/12/2011
LEGAL REPRESENTATIVES:
FOR APPLICANT: ADV F MAGANO
R MASILO ATTORNEYS
FOR RESPONDENT: ADV A McMANUS
LESLIE COHEN AND ASSOCIATES