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[2016] ZAGPJHC 44
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Body Corporate of the Delfora Scheme N.O SS 117/1984 v H & M Property Management (34270/2014) [2016] ZAGPJHC 44 (8 March 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 34270/2014
DATE:
08 MARCH 2016
In
the matter between:-
THE
BODY CORPORATE OF THE DELFLORA
SCHEME
N.O. SS
117/1984
.....................................................................................................
Applicant
And
H
& M PROPERTY
MANAGEMENT
................................................................................
Respondent
JUDGMENT
CORAM:
CRUTCHFIELD AJ
[1]
This opposed interlocutory application came
before me in the course of the unopposed motion roll of Tuesday, 16
February 2016.
[2]
The applicant claimed the following relief:
2.1
That the respondent make available to the
applicant, within two days of the date of this order, complete and
unredacted copies of
the bank statements referred in the applicant’s
notice in terms of Rule 35(12) dated 24 July 2015; and
2.2
That the respondent pay the costs of this
application on the scale as between attorney and own client.
[3]
The respondent opposed the application
claiming that it be dismissed with costs.
[4]
The relevant common cause facts are set out
below:
4.1
The respondent previously acted as the
de
facto
managing agent of the applicant.
4.2
As such, the respondent received payment on
behalf of the applicant of levies and utility charges raised against
the owners in the
sectional title scheme, and paid various expenses
on behalf of the applicant.
4.3
The account designated by the respondent
into which payments on behalf of the applicant were made, was held by
the respondent with
Standard Bank under account number 081371291
(‘the designated account’).
4.4
The respondent’s purported mandate
was terminated not later than 28 February 2014.
4.5
During September 2014, the applicant
commenced the main application for inter alia, payment of an amount
of R378 216.85 from
the respondent, being monies received by the
respondent on behalf of the applicant which the respondent failed to
pay over to the
applicant (‘the main application’).
4.6
The respondent did not initially deliver an
answering affidavit in the main application but issued an
interlocutory application
challenging the authority of the
applicant’s trustees and attorneys,
which application the respondent
withdrew on 24 June 2015.
4.7
Thereafter, on 8 July 2015, the respondent
furnished its answering affidavit in the main application.
4.8
The respondent conceded that it remains in
possession of funds received on behalf of the applicant as
aforementioned, the quantum
of which is the issue in the main
application.
[5]
The respondent alleged inter alia, that
there is a dispute of fact in
respect of the amount owing by the respondent to the applicant, which
dispute cannot be resolved on
the papers before the court without the
hearing of oral evidence.
[6]
The applicant calculated the amount owing
by the respondent with reference to the last statement rendered by
the respondent (for
November 2013), by adding thereto the amounts
paid to the respondent on behalf of the applicant from December 2013
onwards, and
deducting the payments which it was able to identify as
having been made by the respondent.
[7]
The applicant invited the respondent in the
main application, ‘...in the event that the respondent
dispute(d) that any of
these payments were made to it, to disclose
the bank statements in respect of the designated account which
(would) conclusively
prove or disprove these payments’.
[8]
The respondent referred in paragraph 42 of
its answering affidavit to two specified bank accounts which it
operated in relation
to the applicant’s funds: account number
081371291 with Standard Bank under the name ‘Current Account H
& M Property
Trust’, (the designated account
aforementioned), and, account number 081372027 also with Standard
Bank in the name ‘Current
Account H & M Property
Management’.
[9]
The respondent, despite it not having
access to certain documents allegedly in the applicant’s
possession and necessary to
determine the amount owing to the
applicant, compiled a schedule of payments made by it on the
applicant’s behalf from 25
October 2013 (‘the schedule’).
[10]
The respondent referred to the schedule
compiled ‘with reference to the respondent’s bank
statements’ in paragraph
85 of the answering affidavit, and
included the schedule as an annexure thereto, but declined to furnish
the bank statements with
reference to which the schedule was
compiled.
[11]
On 17 July 2015, the applicant delivered a
notice in terms of rule 35(12), requiring the respondent to produce
the bank statements
for the two bank accounts identified in paragraph
42 of the respondent’s answering affidavit in the main
application.
[12]
The respondent replied that ‘the
applicant (was) not entitled to the information sought, as the
respondent did not refer (in
paragraph 85 aforementioned), to the
documentation required in terms of the Rule 35(12) notice’.
[13]
The applicant argued that whilst the
respondent did not refer to the accounts ‘by name and number in
paragraph 85 of the answering
affidavit’, in the light of the
respondent’s statement in paragraph 42 that the two specified
bank accounts were opened
in relation to the applicant’s funds,
the respondent could only have compiled the schedule with reference
to the bank statements
relating to those accounts.
[14]
Notwithstanding, on 28 July 2015, the
applicant delivered a second notice in terms of rule 35(12),
requiring the production of the
bank statements referred to in
paragraph 85 of the respondent’s answering affidavit for the
period October 2013 to June 2014.
[15]
The respondent replied by correspondence
dated 28 July 2015 stating ‘… We will only be in
possession of the required
bank statements during the course of next
week. Therefore, we will inform you as to when the documents
[sic] available for
inspection’.
[16]
The respondent’s counsel conceded in
argument that the correspondence abovementioned reflected a tender to
the applicant to
inspect the bank statements in their original form,
but stated further that the respondent’s representative
subsequently
‘changed its mind’.
[17]
Correspondence dated 6 and 14 August 2015
from the applicant’s attorney requesting inspection of the bank
statements referred
to in the second rule 35(12) notice, followed,
without any reply from the respondent. This resulted in a final
demand, on
20 August 2015, in which the applicant advised that absent
compliance by the respondent it would launch a compelling application
and seek a punitive costs order against the respondent.
[18]
On 25 August 2015, the respondent
advised that it would provide the applicant with redacted copies of
the bank statements only.
[19]
The respondent stated that it would delete
‘
all information not concerning
and/or about (the applicant)
’
, as a
trustee of the applicant, Ms Zahos, had allegedly threatened to
expose the respondent in the event that she ascertained the
identities of the other entities for which the respondent performs
services. The respondent alleged further that two of its
contracts had been cancelled as a direct result of the trustee’s
actions.
[20]
Notwithstanding receipt by the applicant on
4 September 2015, of correspondence which appeared to reflect that
complete and unredacted
copies of the relevant bank statements would
be furnished to the applicant, this did not transpire.
[21]
The respondent produced copies of the
required bank statements but deleted all information reflected
thereon which the respondent
considered to be irrelevant to the
applicant.
[22]
The bank statements furnished to the
applicant, albeit in a heavily redacted form, were the statements
initially requested by the
applicant in terms of rule 35(12).
[23]
The applicant argued that the required bank
statements are relevant as they evidence the payments made to the
respondent on behalf
of the applicant, the amounts and the source
thereof, which the applicant averred comprises ‘the nub of the
dispute between
the parties’.
[24]
The respondent alleged that it utilised the
bank accounts not only in respect of its services to the applicant,
but also to various
other bodies corporate. Accordingly, the
requested bank statements contain entries relevant to bodies
corporate other than
the applicant, which information the respondent
deleted.
[25]
Thus, the respondent contended that the
bank statements contain confidential information and information not
relevant to the issues
raised in this application, and refused to
produce the unedited bank statements.
[26]
In short, the respondent relied upon its
fear of abuse by the applicant of the information, to the detriment
of the respondent.
[27]
The respondent tendered, however, to
furnish the unedited bank statements to the court at the hearing of
this application in order
to enable the presiding judge and the legal
representatives of the applicant to satisfy themselves that the
edited bank statements
contain all entries relevant to the
applicant’s business.
[28]
Whilst the respondent’s tender failed
to materialise, the applicant was not to be appeased, arguing that
the tender did not
meet its right to due process, including the
applicant’s right to consult with its legal representatives in
respect of the
required bank statements.
[29]
Such
requests for limited production are not to be countenanced, however,
unless very special circumstances exist.
[1]
No such special circumstances were alluded to or relied upon by the
respondent, and it does not seem to me that any such special
circumstances exist.
[30]
Furthermore, the applicant demonstrated in
argument by reference to various annexures in the papers, that the
redacted bank statements
furnished by the respondent did not reflect
all of the information relevant to the dispute.
[31]
The respondent argued that the original
unedited statements were not relevant to the dispute as the
documentation in the applicant’s
possession was sufficient to
substantiate the amount claimed by the applicant in the main
application, and hence the unedited bank
statements were not relevant
to compute and prove the applicant’s claim.
[32]
The applicant’s reply, to the
effect that the unredacted bank statements remain relevant for so
long as the respondent disputes
the amount claimed by the applicant,
is self evidently correct.
[33]
As regards the respondent’s reliance
on the alleged confidentiality of certain of the information
reflected on the unedited
bank statements, the applicant argued that
the names of the respondent’s clients do not fall within the
category of information
which is classed as confidential. Moreover,
the applicant is not in competition with the respondent, and there
are no confidentiality
agreements between the respondent and its
clients.
[34]
In respect of the alleged threat by Ms
Zahos, or the respondent’s alleged reasonable apprehension that
the applicant would
expose the respondent and cause its contracts and
source of income to be terminated, the applicant alleged that there
was no evidentiary
basis that the applicant would expose the
respondent as alleged.
[35]
Uniform rule 35(12) authorises the
production of documents which are referred to by a party in its
pleadings or affidavit.
The rule creates a prima facie
obligation on a party who refers to a document in a pleading or
affidavit, to produce such document
when called upon to do so in
terms of the rule. The entitlement to inspect arises upon reference
being made to the document.
[36]
The
party requested to produce, the respondent herein, is obliged to
adduce facts relieving him of the obligation to do so and pursuant
to
which the court should exercise its discretion in favour of the
respondent.
[2]
[37]
The
issue of relevance of documents is to be determined by a court having
regard to the issues at hand, and does not depend upon
the subjective
view of the party called upon to discover.
[3]
[38]
The
applicant relied upon the unreported decision of the Supreme Court of
Appeal in
Centre
for Child Law v the Governing Body of Hoërskool Fochville and
another,
[4]
which held that:
‘
...
the court has a general discretion in terms of which it is required
to strike a balance between the conflicting interests of
the parties
to the case. Implicit in that is that it should not fetter its
own discretion in any manner and particularly
not by adopting a
pre-disposition either in favour of or against granting production.
And, in the exercise of that discretion,
it is obvious, I think, that
a court will not make an order against a party to produce a document
that cannot be produced or is
privileged or irrelevant.’
[39]
The respondent did not deny possession of
the required bank statements, nor contend that they are privileged.
[40]
As regards the relevance or otherwise of
the unedited bank statements, the disputed issue is the amount owing
by the respondent
to the applicant. The underlying transactions
relevant to the calculation of that amount comprise the payments made
to the
respondent on behalf of the applicant, and the expenses paid
by the respondent on behalf of the applicant, within a specified time
frame.
[41]
It follows that the statements of the
relevant bank account/s reflecting these transactions, are relevant
to the calculation of
the disputed amount. Correspondingly, the
required bank statements serve to prove, or disprove, the amount
claimed by the applicant.
[42]
Hence, the applicant is correct that for so
long as the amount claimed by it is disputed by the respondent, the
bank statements
reflecting the underlying transactions are relevant
to the issue.
[43]
In
respect of the respondent’s argument that the original unedited
statements are not relevant as the documentation in the
applicant’s
possession is sufficient to substantiate the amount claimed by the
applicant, rule 35(12) entitles the applicant
to inspect the bank
statements referred to by the respondent, for the specific purpose of
considering its position.
[5]
[44]
To my mind, the mere fact that the
respondent on its own version, utilised the bank statements in order
to compile a schedule of
payments made by it on the applicant’s
behalf, evidences the relevance of the required bank statements.
[45]
As referred to hereinabove, the applicant
demonstrated that the redacted bank statements do not reflect all of
the relevant information,
as claimed by the respondent.
[46]
No evidence was furnished by the respondent
as to any ulterior motive or threat on the part of the applicant, or
Ms Zahos, sufficient
to deny the applicant’s right to inspect
the required bank statements.
[47]
In any event, the respondent has its
remedies should the alleged threat be considered to be real, but
refusing to allow the applicant
to exercise its right to inspect the
bank statements referred to by the respondent, and to consult with
its legal representatives
in respect thereof, is not among those
rights.
[48]
Moreover, the respondent cannot rely upon
its own unlawful conduct as a means to prevent the applicant from
exercising its lawful
right to production of the documents. The
respondent only has itself to blame in the event that its unlawful
conduct becomes public
knowledge.
[49]
Whilst I do not consider the identity of
the respondent’s clients reflected on the bank statements to be
confidential, even
if it was confidential that is not a reason to
refuse the applicant access to the unredacted bank statements.
[50]
The
issue of confidentiality was dealt with in
Unilever
PLC
[6]
and
Comair
Limited v Minister of Public Enterprises and Others.
[7]
Confidentiality does not in and of itself, confer any privilege
against disclosure.
[51]
In
addition, rule 35(12) entitles a party to inspect a document to which
reference is made, in its entirety, and the rule does not
permit
production of only the portion of the document upon which the other
party relies.
[8]
[52]
The
applicant’s right is to full inspection of the relevant
documents, and disclosure of the content thereof in its entirety
is
the inevitable consequence of the respondent’s reference to the
required bank statements.
[9]
[53]
As regard the costs of the application, the
applicant sought costs as between attorney and own client, whilst the
respondent contended
that the costs, in the event that the Court
found in favour of the applicant, should be reserved. This because a
court seized with
the matter in the future might find that the
applicant was not entitled to the bank statements for the purpose now
claimed by the
applicant. I disagree.
[54]
I have heard full argument in this
interlocutory application, which deals with a crisp and
self-contained issue. I do not see any
good reason why a court
sitting at a later stage should have to reconsider the issues dealt
with by me, in order to determine the
costs consequent upon the order
that I intend to make. There is no merit in burdening another court
with the costs of this application.
[55]
The applicant requested the original
unedited bank statements from the respondent, repeatedly, and over a
period of some months.
In addition, two items of correspondence
apparently tendering production of unredacted copies of the
documents, were furnished
by the respondent who subsequently failed
to comply with its own tenders.
[56]
Thus the Applicant was put to unnecessary
trouble and forced to incur unnecessary costs, in circumstances where
no good reason existed
to prevent the applicant from exercising its
right to full inspection of the relevant documents consequent upon
the respondent’s
reference thereto.
[57]
Whilst
I am of the view that the respondent’s conduct justifies a
punitive award of costs, the respondent’s conduct
lacks the
element of extreme opprobrium necessary for the costs order sought by
the applicant.
[10]
[58]
I make the following order:
58.1
The respondent is ordered to make available
to the applicant, within 5 days hereof, complete and unredacted
copies of the bank
statements referred to in the applicant’s
notice in terms of Rule 35(12) dated 24 July 2015.
58.2
The respondent is ordered to pay the costs
of this application on the scale as between attorney and client.
A
A CRUTCHFIELD
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
COUNSEL
FOR APPLICANT: Adv A de Kok
INSTRUCTED
BY: Fluxmans Attorneys Inc
COUNSEL
FOR RESPONDENT: Adv M A Kruger
INSTRUCTED
BY: Scholtz Attorneys
DATE
OF HEARING: 19 FEBRUARY 2016
DATE
OF JUDGMENT: 08 MARCH 2016
[1]
Unilever
PLC & another v Polagric (Pty) Ltd
2001 (2) SA 329
(C) at 341B-342A
[2]
Centre
for Child Law v the Governing Body of Hoërskool Fochville and
another
[2015]
ZASCA 155
[18] (8 October 2015)
[3]
Haupt
t/a Soft Copy v Brewers Marketing Intelligence (Pty) Ltd
2005
(1) SA 398
(C) at 404H-I
[4]
Centre
for Child Law
above
n 2
[18]
[5]
Unilever
PLC
above n 1 at 336G/H-I/J
[6]
Unilever
PLC
above
n 1 at 340A
[7]
Comair
Limited v Minister for Public Enterprises & Others
2014
(5) SA 608
(GP) at [43]
[8]
Protea
Assurance Company Ltd v Waverly Agencies CC
1994 (3) SA 247(C)
at 249B
[9]
Unilever
PLC
above
n 1 at 342A
[10]
Hyperchemicals
International (Pty)Ltd v Maybaker Agrichem (Pty) Ltd
1992 (1) SA 89
(W) at 101J-102A