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[2014] ZAGPJHC 48
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Adcock Ingram Critical Care (Pty) Ltd v Batswadi Pharmaceuticals (Pty) Ltd and Another (20402/2012) [2014] ZAGPJHC 48 (14 March 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER: 20402/2012
In
the matter between:
ADCOCK
INGRAM CRITICAL CARE (PTY) LIMITED
APPLICANT
and
BATSWADI
PHARMACEUTICALS (PTY)
LIMITED
FIRST
RESPONDENT
BATDSWADI
BIOTECH (PTY) LIMITED
SECOND
RESPONDENT
Coram:
WEPENER J
Heard:
12 MARCH 2014
Delivered:
14 MARCH 2014
Summary:
Discovery and inspection – Rule 36(6)- inspection and
examination of computer on which disputed documents generated
–
Rule permits such inspection and court has inherent power to order
inspection and examination where the interests of justice
require
such inspection and examination
JUDGMENT
WEPENER
J:
[1] The
applicant, who is also the plaintiff in the main action, seeks an
order directing
the respondents to comply with the applicant’s
notice in terms or Rule 36(6) of the Uniform Rules of Court (the
Rules) by
making the items therein described available for inspection
and examination by the applicant and it’s information
technology
consultant for a period of ten days. The items referred to
in the Rule 36(6) notice are:
' i) the personal
computers and / or laptops and / or iPads or other similar devices of
Christopher Whitfield (‘Whitfield”)
and Hennie Visser
(“Visser”) and their personal assistants or any other
persons whose devices were used to generate
the documents detailed
below:
ii) the
server/s of the First and Second Defendants as well as any metadata
relating to the documents listed hereunder
(‘the
documents’)
iii) any
backups of the devices where the documents may have been saved; for
the purposes of inspecting and examining
the electronic versions the
documents and forensic copies thereof.
The documents are as
follows –
a)
the letter addressed by Whitfield to Visser dated
10 April 2010 (annexure SP3 to the First Defendant’s Plea);
b)
the letter addressed by Visser to Whitfield dated
11 April 2010 (Annexure SP4 to the First Defendant’s Plea),
collectively referred to
as the April correspondence;
c)
the letter addressed by Whitfield to Visser dated
3 November 2010 (annexure CC10 to the Second Defendant’s Plea);
d)
the letter addressed by Visser to Whitfield dated
4 November 2010 (Annexure CC11 to the Second Defendant’s
Plea)’.
collectively
referred to as the November correspondence.
[2]
The relevance of the letters lies therein that the applicant
challenges the authenticity
as well as the dates upon which these
documents where created.
[3]
The background to the application is that the applicant instituted an
action which
arose out of the return of various pharmaceutical stock
products. It is in essence common cause that such products have been
returned
by the applicant and that the applicant has not received
payment therefor. The only real dispute, in addition to a
counter-claim
institutied by the second respondent, is which of the
two respondents is liable therefor.
[4]
The parties’ various relationships, not only with each other
but also with the
producer and supplier of the pharmaceutical
products, is governed by a series of detailed and complex written
agreements. These
include a sales agreement, a shareholders’
agreement, a distribution agreement, a technical agreement, initial
licencing
agreements and new licencing agreements.
[5]
The first and second respondents are affiliated companies. The
deponents to the affidavits
are both directors of both companies,
either directly or via trusts. They are also shareholders in both
companies.
[6]
The applicant initially instituted action against the first
respondent alone.
The claim was met by a defence that first
respondent was only acting as the agent of the second respondent. The
April correspondence
was proffered as proof of such agency agreement.
[7]
In pleading to the applicant’s original claim, the first
respondent also raised
a special plea of the non-joinder of the
second respondent and in doing so, relied upon and introduced the
distribution agreement
and technical agreement, which I have referred
to. Those agreements contained arbitration provisions, and
accordingly, the applicant
suggested that all the parties’
disputes should be referred to arbitration by agreement. This
suggestion was rejected
by both the respondents. Despite this,
the second respondent subsequently pleaded to the applicant’s
claim and raised
a special plea to the effect that the applicant
ought to have invoked those very arbitration provisions.
[8]
The applicant thereafter applied, and was granted, the joinder of the
second respondent
on an unopposed basis and, in fact, by consent. In
that application the applicant questioned the authenticity of the
April correspondence.
[9]
The second respondent, aside from repeating the first respondent’s
contentions
regarding the agency agreement between the two
respondents (based on the April correspondence), also initiated
various counter-claims,
one of which is predicated upon a further
alleged agreement between the two respondents being the written
portion of which is contained
in the November correspondence.
[10]
In pleading to that counter-claim the applicant has directly
challenged the authenticity of the latter
correspondence as well.
[11]
It is with this background that the applicant seeks an inspection and
examination of the April and
November correspondence. The applicant
requires access to the respondents’ computers upon which the
aforesaid letters were
generated so as to enable the applicant to
investigate and ascertain whether or not the letters in question are
indeed genuine.
The applicant’s assertions are that they are
not.
[12]
The respondents contend that Rule 36(6) does not found the
applicant’s entitlement to the inspection
and examination; that
the inspection and examination will reveal confidential information
and that the applicant’s expert
agents ought not to be allowed
access to the respondents’ computers. The latter two issues
were not pressed during argument
before me.
[13]
Rule 36(6) and 36(7) should, in my view, be read together to
ascertain its true meaning and the power
of the court pursuant
thereto and pursuant to the common law. Firstly, there can be no
dispute that genuiness and authenticity
of the impugned
correspondence is directly relevant with regard to the decision in
the matter at issue in the action. If the correspondence
is
contrived, the respondents’ defence is baseless and untrue.
This relevance, in itself, triggers applicant’s entitlement
to
rely on the provisions on Rule 36(6).
[14]
Likewise, the authenticity of those letters and the history as
contained on the relevant computers
to which the applicant requires
access, comprise their state or condition as contemplated in the
sub-rule.
[15]
Counsel for the respondents argued that the rule is only applicable
to property when the party relying
on the condition or nature thereof
is the claimant in relation to such condition or nature thereof; that
only in such circumstances
the party so relying on the condition or
nature of the property must make it available for inspection.
[16]
Rule 36(6) provides:
‘
(6)
If it appears that the state or condition of any property of any
nature whatsoever whether movable or immovable, may be relevant
with
regard to the decision of any matter at issue in any action, any
party may at any stage give notice requiring the party relying
upon
the existence of such state or condition of such property or having
such property in his possession or under his control to
make it
available for inspection or examination in terms of this sub-rule,
and may in such notice require that such property or
a fair sample
thereof remain available for inspection or examination for a period
of not more than ten days from the date of receipt
of the notice.’
I paraphrase the Rule as
follows:
‘…
any
party may at any stage give notice requiring the party…
having such property in
his possession or under his control to make it available…’
The property referred to
is property of which the state or condition of any nature whatsoever
whether movable or immovable and which
may be relevant with regard to
the decision of any matter at issue in any action. The argument by
counsel for the respondents that
the Rule only applies when the party
relying on the existence of such state or condition required to make
it available, is consequently
not correct as it ignores the word ‘or’
contained in the Rule. As long as a party has property, relevant to
any matter
in issue in his or her possession or under his or her
control, that party is obliged to make it available.
[17]
In so far as I may be wrong in this conclusion and to the extent that
the rules may be deficient in
this respect, I am persuaded that the
order is necessary in the furtherance of the administration of
justice – See
House of Jewels and Gems v Gilbert 1983
(4) 824 (W) at 828H
where Coetzee J (as he then was) said:
‘
Hence
for the applicants to succeed, these remedies must neither resist at
common law, or to the extent that these are purely procedural
matters
where rights themselves exist, the Court must be persuaded that the
Rules of Court are deficient in this respect and that
such orders are
therefore necessary in futherance of the administration of justice’.
After
citing the
Moulded Component’s
case, referred to below, Kotze J in
M
v A
1989 (1) SA 416
(O) at 428D held
that an order of this nature is not such as to create a cause of
action or does not bring about a legal result.
It is a mere source of
evidence which can assist a court to have the truth prevail and in
that sense it is a procedural matter.
I agree.
[18]
The words of Williamson J in
Brown Brothers Limited v Doise
1955(1) SA 75 (W) at 77B-D are apposite:
‘
In
my view this is a case where the Rules of Court as framed do not
provide for one particular set of circumstances which can arise,
and
I think that the Court has inherent power to read the Rules
applicable to the procedure of a Court in a manner which will enable
practical justice to be administered and a matter to be handled along
practical lines. I propose to apply the remarks of Gardiner
JP, in
the case of
Ncoweni
v Bezuidenhout
1927 CPD 130
where
he said:
“
The
rules of procedure of this court are devised for the purpose of
administering justice and not hampering it, and where the rules
are
deficient I shall go as far as I can to grant orders which will help
to further the administration of justice”.
Where I am satisfied, as
I am in this case, that notice cannot be given, where I am satisfied
that the rule cannot be complied with
in the terms in which it is
framed, I feel that I am entitled to make an order which will entitle
a party to have his bill taxed
as is contemplated by the rules’.
[19]
Referring to Rule 36(6) Lewis J said in
Caltex Oil Rhodesia v
Perfecto Dry Cleaners
1970 (2) SA 44
at 47A to 48B as follows:
‘
In
this regard it is of some significance that the Courts in South
Africa, before the Rules made any provision at all for allowing
a
pre-trial inspection of property, regarded themselves as having an
inherent discretion to order an inspection of immovable property
where the interests of justice required that there be such an
inspection. See
Danziger
v The Worcester Exploration Gold Mining Co. (1890) 2 S.A.R. 126;
London and South African Exploration Co. v De Beers Consolidated
Mines
(1893) 10 S.C. 218.
In the latter case an
action was pending in which the plaintiffs, as lessors of certain
property, were seeking a declaration of
rights entitling them to the
surrender by the defendants, as lessees, of parts of the ground
leased in terms of a condition of
lease providing for such surrender
of any portion of the ground which was discovered to be
diamondiferous. The plaintiffs had obtained
prima facie
evidence
that certain ground was in fact diamondiferous and they sought the
leave of the Court for them to have access to certain
parts of the
claims to secure proof, for the purpose of the action, of the
existence of diamonds there. The defendants opposed
the application.
DE VILLIERS C.J. in granting the leave sought, said at p. 220:
“
I
quite agree with the defendants’ counsel that the plaintiffs
have no right to go
prospecting
all over the defendants’ ground. But if the plaintiffs have
reasonable
grounds for believing that any portion of the ground is
diamondiferous
and can satisfy the Court that there is
prima
facie
evidence
in
support
of that belief, I think the Court ought to assist the plaintiff in
further proof of that fact. If there were no precedents
to justify
such a course, the Court would be prepared in the interests of
the administration of justice to exercise a power
of this kind.”
Though it is not
specifically mentioned in the report, it seems to me it may fairly be
implied that the rights to inspect which
was granted in that case
necessarily involved some disturbance of the soil in seeking proof,
for the purpose of the trial, that
the ground was diamondiferous. The
decision in that case, and the reasons underlying it, were referred
to with approval by the
Appellate Division in the case of
Globe &
Phoenix Gold Mining Co. Ltd. V. Rhodesia Exploration Co. Ltd.,
1929
A.D. 434
at p. 440, although the Court held that the decision had no
application in the circumstances of that particular case.
The English case
of
Bennet v. Griffiths
[1861] EngR 155
;
(1861) 121 E.R. 517
, also provides support
for the grant of the present application. At that time sec. 58 of the
Common Law procedure Act of 1854 simply
provided that either party to
an action:
“
shall
be at liberty to apply to the Court or a Judge for a rule or order
for the inspection …of any real or personal property
the
inspection of which may be material to the proper determination of
the question in dispute”.
The Court in that case
held that the section gave the Court the same power as the Court of
equity possessed, i.e. the power to order
the removal of obstructions
on the land in order to facilitate inspection, as an ancillary to the
power to order inspection, and
it rejected the contention that the
inspection was confined to mere ocular inspections of the land as it
stood without the doing
of anything further.
Here
again it seems to me the Court felt itself free to act in the matter
in the best interests of justice. Mr.
Squires
for the defendant argues that the sole
reason for the decision in that case was the suspicion that the
defendant had deliberately
created the obstruction in the form of a
wall for the purpose of concealing his encroachment on to the
plaintiff’s mine.
It seems to me, however, that their Lordships
in that case recognised the principle that in certain circumstances a
party might
be permitted to execute certain works on the other
party’s land for the purpose of proper inspection and without
which the
right of inspection would be rendered nugatory, provided
that the owner or occupier of the land in question was safeguarded
against
any loss or damage as a result of the execution of the works
in question’.
[20]
In
Republikeinse Publikasies (Edms) Bpk v Afrikaanse Pers
Publikasies (Edms) Bpk
1972 (1) SA 773
, Rumpff JA (as he then
was) said at 783 A-B:
‘
In
verband met die vraag wat Appellant presies moes gedoen het nadat
Respondent sy aansoek gestaak het, is dit wesenlik om te herhaal
wat
in die algemeen van toepassing is nl. dat die Hof nie vir die Reẽls
bestaan nie maar die Reẽls vir die Hof.
[21]
The Appellate Division has recognised that courts should not be
powerless to act. In
Universal City Studios Inc. and Others v
Network Video (Pty) Ltd
[1986] ZASCA 3
;
1986 (2) SA 734
(A) at 755 A-E it said:
‘
In
a case where the applicant can establish
prima
facie
that
he has a cause of
action
against the respondent which he intends to pursue, that the
respondent has in his possession specific documents of things
which
constitute vital evidence in substantiation of the appellant’s
cause of action (but in respect of which the applicant
can claim no
real or personal right), that there is a real and well-founded
apprehension that this evidence may be hidden or destroyed
or in
some manner spirited away by the time the case comes to trial,
or at any rate to the stage of discovery, and the applicant
asked the
Court to make an order designed to preserve the evidence in some way,
is the Court obliged to adopt a
non
possumus
attitude?
Especially if there is no feasible alternative? I am inclined to
think not. It would certainly expose a grave defect in
our system of
justice if it were found that in circumstances such as these the
Court were powerless to act. Fortunately I am not
persuaded that it
would be. An order whereby the evidence was in some way recorded, eg.
by copying documents or photographing things
or even by placing them
temporarily, i.e.
pendente
lite,
in
the custody of a third party would not, in my view, be beyond the
inherent powers of the Court.‘
Although these remarks
were made in an Anton Pillar-type matter, I can see no reason why
they cannot be applied in the matter before
me.
[22]
Prest, in
The Law and Practice of Interdicts
at page 201 says:
‘
A
legal system, in its quest for the ascertainment of truth and
ensuring that justice is done, must not permit its procedures to
become so cumbersome and time-consuming that the end to which the
very system is directed is defeated. The lesson of history teaches
that the subject of the law is an impatient and restless creature.
When a crisis situation presents itself, he seeks expeditious
and
effective action, at least on an interim basis, until such time as
the principal dispute can be resolved. The law, if it is
to be
effective, must always keep pace with these demands. It is a servant
of circumstances, and not the master. It must not give
rise to
problems; it must provide a solution to such problems as arise out of
the requirements of modern commercial and social
developments.’
[23]
I fully agree with these remarks and indeed find support in reported
cases against the respondents’
narrow interpretation the ambit
of Rule 36(6). In
Moulded Components and Rotomoulding South Africa
(Pty) Limited v Coucourakis and Another
1979 (2) SA 457
(W),
Botha J (as he then was) decided a matter concerning an application
to inspect a number of documents and also a number of
items of
machinery. (See the report at 458D and 459A.)
[24]
In considering whether a court can order a party to produce for
inspection items of machinery which
are objects not being documents,
Botha J said at 461F to 462H:
‘
In
broader terms, the question relates to the Court’s inherent
jurisdiction to grant relief not specifically provided for
in the
Rules. In my opinion there can be no doubt at all that, generally
speaking, the Court has such inherent power. The cases
relied upon by
counsel for the applicant make this quite clear. He referred
inter
alia, to the following cases: MacKenzie v Furman & Pratt
1918 WLD
62
at 66: Cohen & Tyfield v Hull Chemical Works
1929 CPD 9
at
10;Van der Merwe v De Villiers and Another
1953 (4) SA 670
(T) at
672; Neal v Neal
1959 (1) SA 828
(N) at 832-833; and, finally,
Titty’s Bar and Bottle Store (Pty) Ltd v ABC Garage (Pty) Ltd
and Others
1974 (4) SA 362
(T) at 368G-H.
Examples
of the Court’s inherent power to grant relief outside the terms
of the Rules of Court afforded by these cases are
the ordering of
production for inspection of machinery, including allowing the
presence at such inspection of an expert of the
party desiring the
inspection
(MacKenzie’s
case
supra)
;
the authorisation of the presence at the inspection of documents of
experts to assist the party requiring the inspection, such
as
accountants or other experts (
Cohen
& Tyfield’s
case
supra
);
the ordering of matter to be struck out of an affidavit on grounds
other than those specifically mentioned in the Rules of Court,
namely
vexatious, scandalous, or irrelevant matter (
Titty’s
Bar & Bottle Store (supra)
).
The
argument for the respondents with regard to these cases was that they
were distinguishable from the situation in the present
case. Counsel
for the respondents said that the cases relied upon by the applicant
rested on a situation where a gap was found
to exist in the Rules of
Court, or, in other words, where there was a total hiatus in relation
to a certain situation. So,
for instance, in
MacKenzie's
case
counsel said there was no provision in the Rules for an inspection of
objects as opposed to an inspection of documents, and
the Court could
step in and fill that gap by using its inherent jurisdiction. In the
present case, however, counsel said the position
was not the same,
taking again the example of the inspection of items of
machinery. Counsel relied in this respect on the
provisions of Rule
36 (6), which provides for the inspection of objects with an express
limitation of the remedy to an action.
The Rule refers expressly to
"any action", and counsel argued that that showed
conclusively that the framers of the Rules
could not have
contemplated that a similar type of procedure would be possible in
the case of an application.
This
appears on the face of it to be an attractive argument, but I am
nevertheless unable to accede to it. I do not consider that
if
justice demands such a course in appropriate circumstances, the Court
would decline to come to the assistance of a party where
that party
requires inspection of an object referred to in the opposing party's
affidavits, simply because Rule 36 (6) is limited
by its wording to
actions and does not expressly include within its ambit applications.
If justice requires an inspection of an
object, in application
proceedings, I consider that the Court will exercise an inherent
jurisdiction to order production for such
inspection. I should add,
however, that I have no doubt that such a situation would be an
unusual one and that this is a power
that the Court would exercise
very sparingly. The point is, however, that I believe that it is
something that can be done. The
cases referred to earlier support my
conclusion, in my view. In
Neal's
case
supra
, for
instance, the Court was prepared to grant relief to a
peregrinus
to bring an application
in forma pauperis
although the Court
accepted, in the part of the judgment relevant for present purposes,
that the Rule in question did not apply
to a
peregrinus.
In
other words, the Court was prepared to grant relief in spite of the
fact that the Rule did not cover the situation and that
the Rule in
question was limited to another type of situation. The other case to
which I would refer in this regard is the case
of
Titty's Bar &
Bottle Store (supra
). In that case, too, the Court was not
deterred from granting relief on a ground not specifically mentioned
in the Rule in question,
but on a ground outside the terms of the
Rule.’
[25]
The precedent for allowing a
n
applicant access to the real evidence, computers in this case, has
consequently been in place since 1979. The passage referred
to in
the
Moulded Component’s
case has been referred to with apparent approval
in
Universal City Studios Inc. and
Others v Network Video (Pty) Ltd
[1986] ZASCA 3
;
1986
(2) SA 734
(A) at 754H.
[26]
A statement about the importance of disclosure in court proceedings
was made by Moseneke DCJ in
Independent
Newspapers (Pty) Ltd v Minister of Intelligence Services: in Re
Masetlha v President of the Republic of South Africa
and Another
2008
(5) SA 31CC
at paragraph 25:
‘
Ordinarily
courts would look favourably on
claim
of a litigant to gain access to documents
or
other information
reasonably
required to assert or protect a threatened right or to advance a
cause of action. This is so because courts take seriously
the valid
interests of a litigant to be placed in a position to present its
case fully during the course of litigation. Whilst
weighing
meticulously where the interests of justice lie, courts strive to
afford a party a reasonable opportunity to achieve its
purpose in
advancing its case. After all, an adequate opportunity to prepare and
present ones case is a time-honoured part of a
litigating party’s
right to a fair trial.’ (own underlining )
[27]
It appears from the wording from Rule 36(7) that the court, when
considering an application of this
nature, has a wide discretion and
is empowered to make an order ‘…as to him seems meet’.
In the exercise of
a judicial discretion, I am of the view that the
entitlement of the applicant to inspect the computers, is paramount.
The respondents
have shown no grounds or reason why they would be
prejudiced by such an inspection, save the grounds not further
pursued in argument
before me. I am consequently of the view that an
order allowing immediate inspection is not only permissible, but also
required
in this matter.
[28]
Section 173 of the Constitution provides:
‘
The
Constitutional Court, Supreme Court of Appeal and High Courts have
the inherent power to protect and regulate their own process,
and to
develop the common law taking into account the interests of justice.’
[29]
In my view, the interests of justice, whether its origin be in the
Rules, common law, the cases
referred to in this matter or the
Constitution, require that the authenticity of the correspondence be
established.
[30]
Although the respondents did not persist with the argument, they also
opposed the relief based on the
confidentiality of the information.
This fear can be addressed by inserting safeguards in the order which
a court issues. This
ground of opposition is also, significantly,
weakened by the fact that on the respondents’ version the
applicant’s
holding company is a 45 percent shareholder of the
second respondent which would entitle the applicant, through its
holding company,
to access the information sought by the applicant.
Logic dictates that the applicant needs experts to analyse the
contents of the
computers and the safeguards regarding confidential
information will also bind the applicant’s experts.
[31]
Having come to the conclusion herein, I am of the view that the
applicant should be entitled to establish
the authenticity of the
documents relied upon by the respondents, by also having access to
the computers on which they were generated.
[32]
I issue an order in the following terms:
32.1. The respondents are
immediately to comply with the applicant’s notice in terms of
Rule 36(6) dated 14 October 2013 by
making the items more fully
described therein available for inspection and examination by the
applicant and its information technology
consultant, Cyanre the
Computer Forensic Lab, for a period of ten days after the date of
granting of the order herein.
32.2. The applicant and
its representatives and agents are to treat and regard all
commercially sensitive information which may
be revealed or disclosed
as part of such investigation and examination as strictly
confidential, and are not to utilise any such
information for any
purpose other than that which is legitimately and necessarily
required for purpose of the litigation in this
matter.
32.3.
The respondents are, jointly and severally, liable to pay the costs
of this application, the one paying the other to be absolved.
__________
Wepener
J
Counsel
for Appellant: Adv. B. Berridge SC
Counsel
for Respondent: Adv. A.J. Daniels
Attorneys
for Appellant: Read Hope Phillips Thomas & Cadman Inc.
Attorneys
for Respondent: Baker & McKenzie