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[2016] ZAGPJHC 219
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Cagead Trading CC and Others v Dovelight Trading 17 (Pty) Ltd and Others; In re: Dovelight Trading 17 (Pty) Ltd v Omnilink Technologies CC and Others (20277/2016, 20278/2016, 20279/2016) [2016] ZAGPJHC 219 (17 August 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 20277
/2016
CASE
NO: 20278/2016
CASE
NO: 20279/2016
DATE:
17 AUGUST 2016
In
the matter between:
CAGEAD
TRADING
CC
................................................................................................
First
Applicant
OMNILINK
TECHNOLOGIES
CC
..........................................................................
Second
Applicant
NORMAN’S
CHEMICAL
MANUFACTURERS
.......................................................
Third
Applicant
RICHARD
O’FLAHERTY
..........................................................................................
Fourth
Applicant
GERT
JACOBUS VAN
NIEKERK
................................................................................
Fifth
Applicant
CAGEADONE
(PTY) LTD t/a AUTO CARE
FOURWAYS
.......................................
Sixth
Applicant
OMNILINK
TECHNOLOGIES ONE (PTY) LTD
t/a
AUTO CARE AUCKLAND
PARK
.....................................................................
Seventh
Applicant
NORMAN’S
CHEMICAL MANUFACTURERS ONE (PTY) LTD
t/a
AUTO CARE
RANDBURG
...................................................................................
Eighth
Applicant
And
DOVELIGHT
TRADING 17 (PTY)
LTD
..................................................................
First
Respondent
FIRST
SHERIFF OF THE HIGH COURT-
MIDRAND
......................................
Second
Respondent
SECOND
SHERIFF OF THE HIGH COURT – SOUTH
WEST
...........................
Third
Respondent
THIRD
SHERIFF OF THE HIGH COURT –
JOHANNESBURG
NORTH
...................................................................................
Fourth
Respondent
In
re: In the matter between: -
DOVELIGHT
TRADING 17 (PTY)
LTD
...............................................................................
Applicant
And
OMNILINK
TECHNOLOGIES TECHNOLOGIES
CC
.........................................
First
Respondent
GERT
JACOBUS VAN
NIEKERK
........................................................................
Second
Respondent
(Case
No. : 20277/2016)
NORMAN’S
CHEMICAL MANUFACTURERS
CC
...............................................
First
Respondent
GERT
JACOBUS VAN
NIEKERK
........................................................................
Second
Respondent
(Case
No. : 20278/2016)
CAGEAD
TRADING
CC
............................................................................................
First
Respondent
RICHARD
O’FLAHERTY
......................................................................................
Second
Respondent
(Case
No. : 20279/2016)
Judgment
Van
der Linde, J:
Introduction
[1]
This is an application for the relief
pending the reconsideration of an Anton Piller order. It comes
before me on the urgent
roll. The applicants, except the 6
th
to 8
th
applicants, were the respondents in the order, and the order has been
executed. I will refer to the parties as they appear in this
application. A large quantity of document was attached and is
currently under the control of the sheriffs.
[2]
The pleadings are not yet closed, not in
the main application and not in the interlocutory application. In the
main application
the 1st respondent’s replying affidavit is
outstanding, and in the interlocutory application the applicants’
replying
affidavit is outstanding. On this basis Mr Bester, SC who
appeared for the applicants expressly accepted in his practice note
and
heads of argument that the reconsideration application is not now
ripe for hearing.
[3]
The relief now sought by the applicants in
this interlocutory application, brought as a matter of urgency, is to
join the 6
th
to 8
th
applicants as respondents in the main application; to direct the
return to the 6
th
to 8
th
applicants of all matter seized from them and held by the sheriffs;
an order interdicting the 1
st
respondent from making copies of and conducting forensic audits of
all matter seized from all of the applicants; and a punitive
costs
order. I deal with these aspects in turn, but first offer some
background for greater understanding.
[4]
The 1
st
applicant is beneficially owned by the 4
th
applicant; the 2
nd
applicant in equal shares by the 4
th
and 5
th
applicants; and the 3
rd
applicant by the 5
th
applicant. The 1
st
,
2
nd
and 3
rd
applicants all conducted the same type of business in the retail
motor service industry, under the name and get-up of Car Service
Centre, at three different premises respectively in Fourways,
Auckland Park, and Randburg. This was a franchise of which the 1
st
respondent was the franchisor in terms of written franchise
agreements concluded in all three instances in 2012, with expiry
dates
in all three instances sometime next year.
[5]
Earlier this year the 1
st
to 5
th
applicants took advice and resolved that the franchise agreements
were null and void and advised the 1
st
respondent of their attitude. The 1
st
respondent disputed their entitlement lawfully to adopt that
attitude. The 1
st
to 5
th
applicants persisted, and with effect from 1 June 2016 ceased trading
as Car Service Centre.
[6]
Instead, the commenced trading from the
same premises, in the same type of business, under the name and style
of Auto Care, ostensibly
also a franchise. It transpired subsequently
that the juristic entities trading from these premises are the 6
th
to 8
th
applicants. The 1
st
respondent contends that these three companies are the alter egos of
the 1
st
to 5
th
applicants.
[7]
The 1
st
respondent, before it knew of the 6
th
to 8
th
applicants, applied urgently and ex parte to this court in three
separate but virtually identical applications for Anton Piller
orders
against the 1
st
to 5
th
applicants. These were granted by Van Oosten, J on 20 June 2016. Two
weeks later the orders were executed. the 1
st
respondent has subsequently instituted action for damages against the
1
st
to
3
rd
applicants for breach of contract, and against the 4
th
and 5
th
applicants as sureties.
[8]
The applicants say in this interlocutory
application that not only should the orders never have been granted
in the terms that they
were, but their execution was objectionable.
They contend on that the orders ought to be set aside on any of these
two bases independently.
[9]
However, for now, they contend that the
sheriff attached large quantities of documents that belong to the 6
th
to 8
th
applicants. Since these applicants were not then respondents in terms
of the court orders, that attachment was palpably unlawful.
So the
applicants all apply for the joinder of the 6
th
to 8
th
respondents, so that in turn they can claim back the documents that
were unlawfully removed from their possession.
[10]The
relief in the form of an interim interdict, to prevent the copying of
the documents that have been attached, is based on
a separate
proposition. It is that on the 1
st
respondent’s own answering affidavit in the interlocutory
application, the documents were attached in order to examine whether
they include documents that would constitute evidence in the intended
action for damages for breach of the franchise agreements.
Joinder
[11]
The attitude of the 1st respondent to this relief
was to abide. It contended that the 6
th
to 8
th
applicants are mere alter egos of the 1
st
to 5
th
applicants and that therefore it mattered not whether or not they
were joined.
[12]In
my view the relief sought should be granted. The 6
th
to 8
th
applicants say they have assets that have been taken from them,
unlawfully. If they are right they, and only they, may claim their
return. An appropriate order issues below.
The
return of the 6
th
to 8
th
applicant’s
assets
[13]
If the 6
th
to 8
th
applicants are the only ones who can vindicate their assets, then
this relief should, prima facie, follow; prima facie, because
the
court order does not operate against them, because it does not
mention them.
[14]The
problem with this ostensibly self-evident denouement is that the 1
st
respondent disputes that the assets attached belong to the 6
th
to 8
th
applicants; and they say that in any event the 6
th
to 8
th
applicants are the 1
st
to 5
th
applicants in disguise. What is more, it is common cause that these
two contentions are to form part of what is yet to be determined
down
the line when the Anton Piller order is revisited, whether in motion
or in trial proceedings. And in that main case the pleadings
are not
yet closed.
[15]The
applicants say however that, for now, and for the purposes of the
interim relief they seek, the 1
st
respondent must at least raise a bona fide and real factual dispute,
and not one that can simply be pushed aside on paper. The
resolution
of this, the second, issue is thus located in the realm of true
factual disputes.
[16]The
beneficial shareholding of the 6
th
to 8
th
applicants was not examined on the affidavits thus far. The general
impression that is created, particularly since the 6
th
to 8
th
applicants do not distance their ownership from the 1
st
to 5
th
applicants, is that because the existing franchise agreements fell to
the ground, or never rose from it, the 1
st
to 5
th
applicants were free to brush them aside, and to hook up with a new
franchisor.
[17]In
argument the changing face of a supermarket was used as an
illustration of what has happened. In this analogy, if there was
a
valid contractual restraint against stripping off the original face,
then one can see the argument for a Janus-like appearance.
[18]
In argument too the issue arose as to whether the
6
th
to
8
th
applicants have even identified that which they say is their assets,
the 1
st
respondent arguing that they had not. The answer was that the order
sought specifically included a prayer that they, the 6
th
to 8
th
applicants, will identify that which they contend belongs to them.
But if the material is not patently discernible as belonging
to the
6
th
to
8
th
respondents, so that the sheriff as a third party could have
identified them as such, perhaps the factual dispute raised by the
1
st
respondent in this regard is not so far-fetched that it may be
rejected on the papers.
[19]There
is however a more profound difficulty. The intellectual exercise of
analysing whether or not the factual disputes on papers
may be
rejected as not being bona fide, still presupposes that the pleadings
are closed. While pleadings remain open, the playing
may change, and
no court order should issue on uncompleted papers. To be true, the
applicants did say that it was their choice
as to whether or not they
would be filing a replying affidavit. But that is an axiom, not an
election. While the parties on both
sides were still keeping their
powder try, since none has eschewed filing replying affidavits, there
was no scope for an order,
which would be final in effect, to issue.
Interdict
against copying?
[20]The
interdict sought is to operate in favour not only of the 6
th
to 8
th
applicants, but all the applicants. As far as the 6
th
to 8
th
applicants are concerned, even if the second order issues, they would
not want the 1
st
respondent nonetheless to copy the material before it would have been
returned to them.
[21]
The 1
st
respondent’s attitude is that they are not copying; they are
inventorying. They say that paragraph 6 of the order directs
the
Sheriff immediately to make a detailed inventory of all items
attached and to provide the Registrar of the Court, the 1
st
respondent’s attorney, and the appropriate applicant with a
clear copy. Since the Sheriff has failed to do this, they are
doing
it; all they want to achieve, is to be in a position when comes
discovery down the line and the weapon of rule 35(3), then
to
ensure that they get full and proper discovery of all material that
is lawfully discoverable in terms of the rules of court.
[22]
The Anton Piller orders granted, following as they
do the form of order suggested in the Practice Manual, do not permit
of copying.
They allow only searching for, examining of, inspecting
of, and inventorying of, the material to be attached and consequently
in
fact attached; and all of this by the Sheriff. For the rest, the
Sheriff is obliged to keep the material his custody until the 1
st
respondent authorises its release to the appropriate applicant (from
whom it was taken), or until a court directs otherwise.
[23]The
applicants argue too that the order goes further than the case law
permits; all that is attachable is material that is identifiable
and
identified, if not by specific description then by class
categorisation.
[1]
Here the
class of attachable documents includes the 1
st
respondent’s documents; the 1
st
respondent’s intellectual property; software re-engineered by
using the 1
st
respondent’s intellectual property or software; all computer
records relating to the relevant applicant’s turnover;
and
finally all invoices generated by the relevant applicant.
[24]
The applicants argued that within this description
one does not find “confidential information”; one finds
document
belonging to the 1
st
respondent (for which an Anton Piller order was not needed); one
finds “intellectual property” without elucidation;
and
then one finds documents relating to turnover. They say that clearly
this Anton Piller application was not about the preservation
of
evidence, the non-property of the 1
st
respondent, that is about to be secreted; rather, it is about fishing
for evidence to sustain a suspected case.
[25]
There is much force in these submissions. But in
my view they stray into the field of revisiting the order, a topic
not now on the
table. For now, it seems to me that unless some
injustice is illustrated, the first business of this court should be
to protect
the integrity of the Anton Piller order, in its terms, and
to leave it to the final Anton Piller court, after pleadings will
have
closed and upon revisiting of the order, to decide whether the
order should be changed or confirmed.
[26]So
there are two immediate issues: should an interdict be issued against
the 1
st
respondent preventing it from copying the attached material? And
should the 1
st
respondent (and not the sheriff) be permitted to continue
inventorying? In my view the issues are related, in this way: the
applicants
say the 1
st
respondent is failing to comply with the court order by copying; the
1
st
respondent’s defence is, in effect, a denial that it is
breaching the court order in the manner alleged, by asserting what
amounts to a breach of the court order in a different manner.
[27]There
is an added consideration. The documents that are discoverable in
terms of rule 35 are not to be equated, without more,
with the
documents that are required to be preserved in an Anton Piller
context. The former is, by definition, much wider than
the latter.
What is required to be preserved are documents which, if not
preserved, will result in the applicant for preservation
losing
his/her case. What is required to be discovered are all documents
relating to any matter in question in the action. Viewed
from the
opposite perspective, an Anton Piller application is not a method to
secure completeness of discovery at an early stage,
before close of
pleadings, in the matter.
[28]In
the affidavits the 1
st
respondent denies copying; but there certainly was a measure at least
of that, in the form of the manuscript notes by the 1
st
respondent’s attorney, and if truth be told, the line between
inventorying and copying must be fine indeed. At this stage,
when the
1
st
respondent denies copying but can suffer no prejudice if it were
temporarily interdicted from doing it, and the converse position
could potentially be highly detrimental to the applicants, the
balance of convenience favours an interim order.
[29]In
these circumstances the applicants are in my view entitled to an
interim interdict prohibiting the copying of the attached
material. I
will not issue an interdict prohibiting the 1
st
respondent from inventorying, since such an order was not asked;
however, in my view the 1
st
respondent is not entitled to do it, even if the sheriff must be
appropriately resourced to be able to comply with the court order.
Punitive
costs
[30]Both
parties asked for punitive orders. In my view that is not justified.
The applicant has been partially successful; it obtained
the joinder
of the 6
th
to 8
th
applicants in the face of a 1
st
respondent who did not agree to it (but did not oppose it
vigorously), and it obtained an interdict prohibiting the copying of
the material (albeit that the 1
st
respondent denied copying).
[31]Despite
this, I am disinclined to issue any costs order now, again because
the pleadings have not yet closed. The final
Anton Piller court
will be in a better position to judge whether the current application
was really necessary.
Conclusion
[32]In
the result I make the following order:
(a)
The 6
th
,
7
th
and 8
th
applicants each is joined as 3
rd
respondent in respectively case numbers 20279/2016, 20277/2016, and
20278/2016 in this court;
(b)
The 1
st
respondent is interdicted from copying any of the material attached
pursuant to the ex parte orders granted against the 1
st
to 5
th
applicants;
(c)
The costs of the application are reserved
WHG
van der Linde
Judge,
High Court
Johannesburg
For
the applicants: Adv. A. J. Bester, SC
Instructed
by: D’Amico Incorporated
15
Peter Place, Bryanston
Johannesburg
Tel:
011 463 3110
Ref:
Ms D’Amico NOR16/0001
For
the respondents: Adv. Riley
Instructed
by: Georgiou Attorneys
51
Bristol Road, Parkwood
Johannesburg
Tel:
011 880 4407
Ref:
Mr Georgiou/hg
Date
argued: 10 August 2016
Date
of judgement: 17 August 2016
[1]
Compare
Non-Detonating Solutions (Pty) Ltd v Durie and Another,
2016 (3) SA
445
(SCA) at [37], [40].