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[2014] ZAGPJHC 278
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Mutch Building Materials CC v Hanekom (2013/45313) [2014] ZAGPJHC 278 (8 October 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG LOCAL
DIVISION, JOHANNESBURG)
CASE
NO: 2013/45313
DATE:
08 OCTOBER 2014
In the matter
between
MUTCH BUILDING
MATERIALS CC
.................................
APPLICANT
And
JOHN
HANEKOM
..........................................................
RESPONDENT
Discovery and
Inspection – Discovery - Production of documents - Notice in
terms of rule 35(12) and (14) to produce documents
for inspection
referred to in the applicant’s founding affidavit - no
reference to such documents in the founding affidavit
or annexures
thereto - reference by mere inference not reference for purposes of
rule 25(12) - application dismissed.
Costs - punitive
costs - rule 35 procedure invoked by respondent merely to harass
applicant - abuse of court process - punitive
costs justified.
Costs – de
bonis propriis against attorneys acting for respondent - absence of
reprehensible conduct- order sought not justified.
J U
D G M E N T
VAN OOSTEN J:
[1] This is an
interlocutory application in which the respondent seeks an order
compelling the applicant to produce certain documents
allegedly
referred to by the applicant in its founding affidavit.
[2] The applicant
instituted proceedings by way of motion against the respondent in
which it seeks payment, in two separate claims,
of the amounts of
R416 567.53 and R382 513.11 respectively, together with interest
thereon and costs on the attorney and own client
scale. Each claim is
based on an acknowledgment of debt including a deed of suretyship.
The acknowledgment of debt and deed of
suretyship referred to in
claim A was signed by the respondent ‘in his personal capacity
as the duly authorized representative
of’ and ‘surety on
behalf of Build Plum and Tile Blackheath CC’ (the principal
debtor). The acknowledgment of
debt and deed of suretyship referred
to in claim B is in similar terms except that it was executed in
favour of a company, Mutch
Transport (Pty) Ltd (Mutch Transport), the
claim having been ceded to the applicant. The respondent filed a
notice of intention
to oppose the proceedings which was followed by a
notice in terms of rule 35(12) and (14) in which production and
inspection is
requested of certain documents ‘which are
referred to in the applicant’s application and/or which are
relevant to a
reasonably anticipated issue in the consolidated
application’.
[3] In response to
the rule 35 notice the applicant, although denying the respondent’s
entitlement to the documents sought,
and merely ‘in order to
avoid protracted ancillary interlocutory applications’ produced
copies of the documents requested
except for the following:
‘4. The
document/resolution referred to [in the acknowledgment of debt and
deed of suretyship on which claim A is based] authorising
Anton Carl
Landman to act on behalf of the applicant.
5. The appointment
letter and/or employment contract of Anton Carl Landman as a director
and general manager of the applicant, as
stated in [the certificate
of balance).
6. The
document/resolution referred to in [the acknowledgment of debt and
deed of suretyship on which claim B is based] authorising
Anton Carl
Landman to act on behalf of [Mutch Transport].’
In support of its
refusal to produce these documents the applicant advanced the grounds
that the documents are neither referred
to in the paragraphs referred
to by the respondent, nor required for the purpose of delivering an
answering affidavit and, in any
event, that rule 35(12) requires
production of documents mentioned in an affidavit and not in an
annexure thereto. This prompted
the respondent, much as was
predicted, to launch the present application.
[4] The founding
affidavit on behalf of the applicant in this application was deposed
to by the said Landman (Landman) who states
that he is the managing
member of the applicant. The documents in issue concern Landman’s
authority to act on behalf of the
applicant as well as on behalf of
Mutch Transport in the execution of the acknowledgments of debt and
deeds of suretyship and,
further, the capacity in which he signed the
certificate of balance (as the general manager of the applicant) on
which the applicant
relies as proof of the amount of the respondent’s
indebtedness to it in claim A.
[5] Rule 35(12)
provides for the production, at the request of any party to the
proceeding, of any document to which reference is
made in the other
party’s pleadings or affidavits [emphasis added]. The rule also
applies to a document referred to or mentioned
in an annexure to the
pleading or affidavit (see Universal City Studios v Movie Time
1983
(4) SA 736
(D) 750D). The objection on this ground raised by the
respondent in its response to the rule 35 notice accordingly is
flawed and
cannot be sustained.
[6] The hurdle the
respondent is facing concerns the requirement in rule 35(12) that the
documents required to be produced must
be referred to in the
affidavit or annexures thereto. It has been held, on the one hand,
that the rule must not be interpreted
too narrowly (Universal 750C-d)
and on the other, not too widely and subject to certain limitations
(see Penta Communication Services
(Pty) Ltd v King and another
2007
(3) SA 471
(C)). The documents we are here concerned with are not
referred to at all in the applicant’s papers. As much was
readily
and correctly conceded by counsel for the respondent. Counsel
however sought to justify the existence of such documents by way of
inference based on the startling proposition that Landman’s
authority and capacity could only have been conferred on him
in
writing. A process of reasoning and inference whether a document does
or may exist in order to invoke the rule, was specifically
disapproved of by Bozalek J in Penta (476 para [16]). In the absence
of any reference to the documents the application is doomed
to
failure. I should add that the applicant, rather belatedly in its
answering affidavit in this application, for the first time
alleged
that those documents in any event do not exist. The applicant was
severely criticised for not having disclosed this information
at an
earlier stage, in response to the rule 35 notice which, so it was
contended by counsel for the respondent, may well have
obviated the
launching of this application. I am unable to agree: the respondent
nevertheless persisted in the application. In
any event, as I will
presently deal with, the application was ill-conceived right from the
outset.
[7] Rule 35(14) adds
the qualification of relevancy to the documents required to be
produced: ‘which are relevant to a reasonably
anticipated issue
in the action’. Nothing in support of this requirement appears
in the papers before me. On the contrary,
the inference is
irresistible that the rule 35 notice procedure invoked merely to
harass the applicant which constitutes an abuse
of the process of
court (cf The MV URGUP. Owners of the MV URGUP v Western Bulk
Carriers (Australia) (Pty) Ltd and others
1999 (3) SA 500
(C) 513H).
The documents relating to the authority of Landman to act on behalf
of the entities I have referred to or, the capacity
in which he
signed the certificate of balance, assuming they did exist, cannot on
the facts of this matter have any relevance to
any anticipated issue
in the main application. At best for the respondent, those documents,
again assuming they did exist, concern
nothing more than a challenge
to the authority and capacity of Landman. It is abundantly clear that
the responde
nt embarked upon a
fishing expedition: Landman at all times acted on behalf of the
entities as is clearly and repeatedly stated
in the acknowledgements
of debt. The indebtedness in respect of which the securities were
obtained arose from goods sold and delivered
by the applicant to the
principal debtor during the period from May to July 2012. The
respondent was the sole member of and signed
the documents on behalf
of the principal debtor which was subsequently placed in voluntary
liquidation. A business relationship
thus existed between the
parties. Against this background I would have expected the respondent
to set forth a strong case in order
to afford any credence to the
challenges now raised, which he has evidently failed to do.
[8] It remains to
deal with the costs of this application. Counsel for the applicant
persisted in asking for costs on the punitive
scale and further
submitted that those costs be paid by the respondent’s
attorneys de bonis propriis. Reliance was placed
on the forewarnings
of an abuse of the court process in the applicant’s response to
the rule 35 notice as well as subsequently,
in somewhat stronger
terms, in a letter by the applicant’s attorneys to the
respondent’s attorneys. I am satisfied,
in the exercise of my
discretion, that a punitive costs order is amply justified in the
circumstances of this case which I have
already alluded to. Although
the request for a costs order against the respondent’s
attorneys is not altogether without merit,
I am unable to find that
their conduct was reprehensible in any way.
[9] In the result
the application is dismissed with costs, such costs to be taxed on
the scale as between attorney and client.
FHD VAN OOSTEN
JUDGE OF THE HIGH
COURT
COUNSEL FOR
APPLICANT ADV M DE OLIVEIRA
APPLICANT’S
ATTORNEYS JASON MICHAEL SMITH INC
COUNSEL FOR
RESPONDENT ADV V VERGANO
(HEADS OF
ARGUMENT SIGNED BY ADV N RILEY)
RESPONDENT’S
ATTORNEYS SNAID & EDWORTHY
DATE OF HEARING 6
OCTOBER 2014
DATE OF
JUDGMENT 8 OCTOBER 2014