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[2015] ZASCA 154
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Non-Detonating Solutions (Pty) Ltd v Durie (20440/2014) [2015] ZASCA 154; [2015] 4 All SA 630 (SCA); 2016 (3) SA 445 (SCA (2 October 2015)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
no: 20440/2014
DATE:
02 OCTOBER 2015
Reportable
In
the matter between:
NON-DETONATING
SOLUTIONS (PTY)
LTD
...........................................................
APPELLANT
And
MICHAEL
JAMES
DURIE
..............................................................................
FIRST
RESPONDENT
NXCO
MINING TECHNOLOGIES (PTY)
LTD
......................................
SECOND
RESPONDENT
Neutral
citation:
Non-Detonating Solutions (Pty)
Ltd v Durie
(20440/2014) [2015]
ZASCA154 (2 October 2015)
Coram:
Mhlantla, Theron, Petse and Mbha JJA and
Van der Merwe AJA
Heard:
24 August 2015
Delivered:
2 October 2015
Summary:
Civil procedure – Anton Piller application – requirements
for the grant of an Anton Piller order satisfied –interim
order
granted by court a quo amended and confirmed.
ORDER
On
appeal from
: Western Cape Division of
the High Court, Cape Town (Van Staden AJ sitting as a court of first
instance).
1
The appeal is upheld with costs, such costs to include the costs of
two counsel.
2
The order of the court a quo is set aside and substituted with the
following order:
‘
2.1.The
provisional order dated 16 August 2012 is amended by substituting
paragraphs 10.1, 10.4 and annexure A thereto with the
following –
‘
10.1
Applicant and its attorneys may inspect any of the removed documents
(save for any disc containing forensic copies of any hard
drives,
discs or other electronic storage devices containing information
found at the premises) relevant to the present application
or the
further legal proceedings envisaged in the application.
10.4
The Applicant and its attorney shall, 96 hours after the electronic
copy of listed items has been made as contemplated in paragraph
10.3,
be entitled to inspect such electronic copy relevant to the present
application or to the further legal proceedings envisaged
in the
application.’
SCHEDULE
A:
List
of items to be searched
‘
Regardless
of the medium on which it appears or the format in which it appears
and in respect of a self stemming cartridge substantially
identical
to the AutoStem cartridge or any component thereof; or based on the
concept or idea of the AutoStem cartridge, any component
thereof or
any adaptation of any or all of the aforesaid:
1.
Drawings, designs, depictions;
2.
Models; prototypes or three dimensional reproductions;
3.
Any stemming or self-stemming device or parts thereof;
4.
Communications (be it through email or otherwise) between the first
or second respondents and third parties;
5.
Documents;
6.
Invoices, quotations, proof of payment;
7.
Requests for quotation;
8.
Requests for assistance with development;
9.
Requests for manufacture;
10.
Any evidence of telephone calls between the first respondent and Mr
Priday of Spex CC; the first respondent and Mr Mark de Villers;
11.
The design and drawings made available by the first or second
respondents to Valmar Tool & Die CC and/or Blinex Plastiek
CC;
12.
The documents, designs and/ drawings returned by Valmar Tool &
Die CC and/or Blinex CC to the first and/or second respondent
following the letter from Loubser van der Walt Inc of 3 August 2012;
13.
The drawing made of the AutoStem cartridge by the first respondent.
2.2.
The provisional order as amended is confirmed
.’
JUDGMENT
Mbha
JA (Mhlantla, Theron and Petse JJA and Van der Merwe AJA concurring):
Introduction
[1]
This appeal with leave of this court, concerns the validity of an
Anton Piller order that was granted ex parte against the respondents,
at the instance of the appellant. The appeal also focuses on the
proper approach to be followed on reconsideration of the interim
Anton Piller order on the return day.
[2]
Non-Detonating Solutions (Pty) Ltd (the appellant) and Nxco Mining
Technologies (Pty) Ltd (the second respondent) are competitors
in the
field of propellant or gas filled rock breaking cartridges which are
mainly used for underground mining. The first respondent,
Mr Michael
James Durie, is the managing director of the second respondent. These
cartridges are non-detonating explosives which
are not characterized
by a violent shockwave, the latter being the characteristic of
detonating explosives. These cartridges
consist of a
propellant-filled tube closed on both ends with end caps and a
protruding initiation wire. The cartridges are inserted
into a
borehole in a rock. Sand is tamped above the cartridges using a
wooden stick to create an effective gas seal. This is commonly
referred to as stemming. Once initiated, the cartridges create high
volumes of gas which breaks the rock or concrete from the inside.
These propellant-based cartridges offer critical advantages over high
explosives in rock-breaking as they are much safer to handle,
transport and store. They do not provide highly destructive
super-sonic detonation waves, and they reduce fly-rock which enables
personnel and equipment to remain in closer proximity to the work
point.
[3]
Mr John Hofmeyer Godsiff, invented and developed a self-stemming
cartridge, the AutoStem, and owned the copyright in the design
and
manufacturing drawings from which it was made. The AutoStem has a
propellant filled cartridge with an integral stemming device
attached
to it. This unique feature has dispensed with the need for sand
tamping. As such, this self-stemming cartridge can simply
be inserted
into the borehole and ignited, thus saving much time and effort that
was needed for stemming the borehole. Godsiff
subsequently
assigned his rights in the copyright to Fowlds 3 Ltd (Fowlds), which
in turn assigned them to the appellant.
[4]
The appellant thereafter approached certain toolmakers to provide
quotations for the manufacture of the AutoStem. Two of such
approaches are pertinent to this dispute:
First,
on 5 March 2012, the appellant’s representatives met with Mr
Priday, the managing member of Spex CC. They not only
furnished him
with full details of the AutoStem, but also provided him with copies
of drawings and three dimensional electronic
models of the cartridge,
under strict conditions of confidentiality. From the information and
documentation provided, Priday produced
machined models of the
cartridge. Secondly, on 7 June 2012, the appellant’s
representatives met with Mr Pieter Marè
of Valmar Tooling and
Die Manufacturing and Blimex CC (Valmar) and showed him a sample of
the AutoStem, its constituent parts and
various drawings relating to
the cartridge. As they were aware that Valmar already had a
relationship with the second respondent
(Valmar manufactured the
second respondent’s Nonex rock breaking cartridges), Marè
was specifically requested to sign
a non-disclosure agreement.
Although Marè was never given a sample of the AutoStem or its
drawings, he was nonetheless left
with a very clear concept and
understanding of it.
[5]
According to the appellant, the AutoStem was an innovation in the
area of non-detonating, self-stemming propellant-based cartridges
and
represented a major advance in the field of rock breaking. The
appellant intended to market, sell and distribute the AutoStem.
The
appellant anticipated that from the successful tests conducted on the
AutoStem, it would replace a large proportion of conventional
detonating explosives used underground and change the face of mining.
It also hoped that it would improve blast-clear support cycle
times
and contribute unimaginably to improved safety conditions. The
appellant anticipated that its commercial potential would
be
enormous.
Litigation
background
[6]
The Anton Piller application was triggered after the appellant had
received a letter from Valmar’s attorneys on 3 August
2012,
informing the appellant that the second respondent had on 21 July
2012 presented Valmar with drawings and designs representing
a
cartridge similar to the AutoStem and had requested Valmar to
manufacture that cartridge for it. As a result of the similarity
between the AutoStem and the drawings supplied by the second
respondent, Valmar declined to manufacture the cartridge and returned
all drawings and relevant documentation to the second respondent.
[7]
On the same day the appellant’s attorneys wrote to the
respondents demanding a written undertaking that the respondents
would not make use of or supply any cartridges based on the
proprietary information of the appellant, and further that they would
not infringe the appellant’s copyright in the drawings. The
respondents were also requested to return all drawings of the
cartridge in their possession and provide information of where the
drawings were obtained, and of parties to whom the respondents
had
supplied copies of the drawings.
[8]
Durie’s initial response was to deny that instructions were
given to Valmar to manufacture a cartridge. He contended that
the
respondents had not received any drawings from any third party and
that the drawings provided to Valmar were those of the respondents
and, importantly, asserted that they ‘were our own ideas or
from information that is freely available on the internet’.
Durie also stated that the respondent’s interaction with Valmar
related to a gas blaster cartridge which the respondents
had tested
on behalf of a UK company, which bore no resemblance to the AutoStem.
However, on 6 August 2012, Durie made a complete
volte face
,
and admitted that the second respondent’s instructions to
Valmar related to the manufacture of a self-stemming cartridge
which
was very similar to the AutoStem. Durie made a reference to the
appellant’s video on the AutoStem which he had not
seen, and
also stated that a friend of his had seen the AutoStem at the
premises of Spex CC.
[9]
A subsequent letter sent by Durie to the appellant on 8 August 2012,
is of particular significance. Whereas previously he skirted
the
issue saying that he knew of the AutoStem cartridge because a friend
had told him about it and because of a video which he
had never seen,
he now admitted to having seen the cartridge. Importantly, he
admitted that he made a drawing of the appellant’s
cartridge
that he had seen at the premises of Spex CC from his independent
memory. Durie explained further that his reason for
making the
drawing was not for the purpose of copying the appellant’s
product but ‘to show his staff what it was that
we could not
use whilst continuing our development work on a self-stemming
cartridge.’
[10]
Despite his protestations that none of the appellant’s rights
was going to be infringed, Durie consistently refused to
provide
copies of drawings and documentation which the second respondent had
made available to Valmar. Instead, on 13 August 2012,
and in response
to appellant’s threat to resort to litigation if such
documentation and details of instructions to Valmar
were not
furnished, Durie admitted that a competing cartridge was being
contemplated and that they were ‘talking to a number
of
designers’.
[11]
On 16 August 2012, the appellant brought an urgent ex parte
application in the Western Cape Division of the High Court,
Cape Town
(Van Staden AJ), in which it sought an Anton Piller order against the
respondents for the preservation of evidence and
articles relating to
the infringement of its rights. At the time of the application, the
AutoStem had reached a stage close to
production and sale, but had
not been introduced into the market. However, the appellant had by
then had prototypes and samples
made under conditions of strict
confidentiality. The AutoStem was also featured briefly in a video
which the appellant distributed
to key potential customers, again on
an understanding of confidentiality. Van Staden AJ, who heard
the matter in chambers
on the aforesaid date, granted an interim
Anton Piller order with the return day on 30 August 2012. The order
essentially permitted
the sheriff and deputy sheriff, a supervising
attorney and two independent Information Technology specialists to
enter the first
respondent’s residence for the purpose of
searching and seizing documents and articles specified in the order,
and computer
equipment or other information storage devices.
[12]
The search and seizure proceedings authorized by the Anton Piller
order were executed on 17 August 2012 at the first respondent’s
residence and in his presence. An inventory of 18 attached documents
was completed by the sheriff. Forensic copies were made of
the data
stored on the hard drives of two laptops and an iPhone belonging to
the first respondent, and the items were removed in
sealed bags and
listed as items 19 to 20 on the inventory. The supervising attorney
filed his report on 27 August 2012. On the
same day, the appellant
instituted action against the respondents in the Western Cape
Division of the High Court (the action)
[1]
for an order restraining the respondents from infringing its
copyright in the AutoStem, for delivery of certain items and for
payment of damages suffered by the appellants due to the respondents’
unlawful actions. This action is still pending.
[13]
On the extended return day, Van Staden AJ considered the application.
In his judgment he was critical of Durie’s conduct
and noted
that in his opposing affidavit, Durie admitted that he infringed the
appellant’s copyright by making a drawing
of the AutoStem, and
also conceded that he should have come clean at the outset. The
learned judge also found that Durie’s
interest in the
development of a self-stemming cartridge and his approaches to
toolmakers after making a sketch of the AutoStem,
belied the denial
of the novelty of the AutoStem and of the respondents’
intention to infringe the appellant’s copyright
in the
AutoStem. The learned judge however discharged the interim Anton
Piller order on the grounds, inter alia, that the order
was
over-broad and stretched beyond what was reasonable and lawful, and
that its terms relating to the forensic enquiry were too
wide and
should have been limited to documents and items produced after a
specified period only and not before a particular date.
This appeal
is against the findings of the court a quo and in particular the
discharge of the interim order.
Issue
of mootness of the appeal
[14]
Before considering the merits of the appeal, it is necessary to first
dispose of a preliminary issue concerning the mootness
of the appeal.
This point was raised by the respondents in their heads of argument
in February 2015. The respondents aver that
the appellant lacks
locus
standi
as a result of the expiry on 15 August 2013, of the
assignment to it by Fowlds of the copyright and all common law rights
in the
AutoStem. They contend that as all copyright and common law
rights previously assigned to the appellant reverted to Fowlds on
expiry
of the assignment, the appellant is effectively deprived of
locus standi
to continue to seek any relief founded in an
alleged infringement of copyright and misuse of confidential
information, and therefore
also to appeal the judgment of the court a
quo which was handed down after the afore-mentioned expiry. To
counter the issue of
mootness raised the appellant brought an
application to this court to tender new evidence to prove that the
aforesaid assignment
had since been extended.
[15]
In my view this argument of mootness cannot succeed. At the time the
appellant launched the application on 16 August 2012,
it did so as
the owner of all copyright and relevant common law rights in the
AutoStem in terms of a valid assignment procured
on 15 August 2012.
This has been the case without interruption since that date. The
appellant also retains an interest in the litigation
instituted by it
in the court a quo on 27 August 2012 in which it claims damages for
alleged infringement of copyright and ancillary
relief. That action
is still pending. Clearly, such interest would have remained in
respect of the time during which the appellant
owned the copyright in
the AutoStem.
[16]
As the appellant has an enduring interest in this litigation until
its finality, the argument raised of mootness must fail.
It follows,
accordingly, that the application by the appellant to tender new
evidence is rendered nugatory. Consequently, it is
not necessary to
consider the application to tender new evidence.
[17]
Returning to the merits, the application for the Anton Piller order
has its source in the appellant’s claim that the
respondents
breached its rights to the copyright and confidential information in
a self-stemming rock-breaking cartridge (the AutoStem).
Accordingly,
the crisp issue for determination in this appeal is whether the
requirements for Anton Piller relief were satisfied
and consequently,
whether the court below was correct in discharging the interim order.
The
requirements for Anton Piller relief
[18]
The use of Anton Piller orders in our law is now well-established.
[2]
The requirements that must be satisfied for the granting of such an
order were summed up by Corbett JA in
Universal
City Studios Inc v Network Video (Pty) Ltd
,
[3]
as follows:
‘
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 or
things which constitute vital evidence in substantiation
of the
applicant’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
asks the court to make an order designed to
preserve the evidence in
some way . . .’
[19]
The purpose of Anton Piller orders is therefore to preserve evidence
to be used in a forthcoming dispute. Such evidence must
constitute
vital evidence in substantiation of the applicant’s cause of
action.
[4]
[20]
While it must be acknowledged that Anton Piller orders have the
potential to impact negatively on the right to privacy guaranteed
in
s 14 of the Constitution, they are necessary and proportionate to the
legitimate aim pursued.
[5]
Whatever harm or inconvenience might be caused to the respondent can
be attenuated by the inherent principle of proportionality
which
requires a balancing of competing interests and values. This
resonates with what Chaskalson P stated in
S
v Makwanyane and another
,
that the limitation of constitutional rights for a purpose that is
reasonable and necessary in a democratic society involves the
weighing up of competing values and ultimately an assessment based on
proportionality.
[6]
Thus
Corbett CJ recognized that in exercising its discretion whether or
not to grant an Anton Piller order, the court must
pay regard to
inter alia, the cogency of the prima facie case established, the
‘potential harm that will be suffered by the
respondent if the
remedy is granted as compared with, or balanced against the potential
harm to the applicant if the remedy is
withheld.’
[7]
This balancing of interests is particularly crucial on
reconsideration of the interim order on the return day when the court
adjudicating the application has been furnished with all the relevant
evidence including the respondent’s opposing affidavit,
as
happened in this case. Thus courts must constantly be wary that the
refusal to grant an Anton Piller order could, in a deserving
case,
result in a denial of justice.
Prima
facie cause of action
[21]
The requirement of a prima facie cause of action is simply that an
applicant should show no more than that there is evidence
which, if
accepted, will establish a cause of action.
[8]
In
Bradbury
Gretorex & Co (Colonial) Ltd v Standard Trading Co (Pty) Ltd
,
[9]
Steyn J, said the following:
‘
[T]he
requirement of a prima facie cause of action . . . is satisfied where
there is evidence which, if accepted, will show a cause
of action.
The mere fact that such evidence is contradicted would not disentitle
the applicant to the remedy. Even where the probabilities
are against
him, the requirement would still be satisfied. It is only where it is
quite clear that he has no action, or cannot
succeed, that an
attachment should be refused or discharged on the ground here in
question.’
[22]
The appellant’s cause of action, based on copyright,
confidential information and unlawful competition is made out in
the
founding affidavit. The appellant averred that it owns the copyright
in the two-dimensional works, the drawings, and in three-dimensional
works being the cartridge itself, or any adaptation thereof and had
at the time of the Anton Piller application, a right in respect
of
the confidential information in the AutoStem. The appellant alleged
that the respondents infringed the appellant`s copyright
in the
AutoStem when Durie made a two-dimensional reproduction of the
three-dimensional model of the cartridge shown to him by
Priday at
the premises of Spex CC, and by reproducing the drawing prior to
sending it to Valmar and to other toolmakers. The appellant
placed
reliance on Durie’s concessions as set out in his opposing
affidavit.
[23]
The appellant’s case of unlawful competition is based on the
allegation that the respondents were using information about
the
AutoStem which they obtained unlawfully as a springboard to produce
their own product. In this regard the appellant avers that
as the
respondents did not have their own design, they used the appellant’s
copy and then furnished it to mould makers and
their own employees.
By so doing, so the appellant contends, they were unlawfully
appropriating an unfair advantage to themselves
and were seeking to
interfere unlawfully with the appellant’s right to attract
custom.
[24]
As regards the
causa
for the imposition of a duty of
confidentiality, the appellant averred that this arose from the fact
that the second respondent
was the appellant’s trade rival,
which, through Durie had obtained the information relating to the
AutoStem, in an improper
manner. Furthermore, this information
enabled the second respondent to compete unlawfully with the
appellant using information
about its newly developed product to
enable it to place its own product on the market.
[25]
The respondents dispute all the aforesaid allegations. They
submitted, inter alia, that the appellant does not have a cause
of
action for copyright infringement, that the appellant is not the
owner of the copyright in the AutoStem, and that the AutoStem
is not
a work of craftsmanship nor ‘an original work’ as defined
in the Copyright Act.
[10]
Furthermore, they submitted that the assignment of the copyright by
Godsiff to Fowlds, and ultimately to the appellant constituted
impermissible export and import of intellectual property to and from
South Africa in terms of the Exchange Control Regulations,
[11]
and is therefore invalid. The appellant’s cause of action based
on unlawful competition and confidential information is similarly
challenged.
[26]
Be that as it may, all the issues in dispute raised by the parties
will properly be adjudicated in the action that is still
pending.
Although I am constrained not to enter into the merits of the
case at this stage and to attempt to adjudicate on
credibility,
probabilities or the prospects of success, I can nonetheless state
unequivocally, that on the facts and the evidence
as adduced on the
papers, I am satisfied that the court a quo was correct in finding
that the appellant had established a prima
facie cause of action
against the respondents.
Apprehension
or fear that evidence may be spirited away
[27]
The Anthon Piller order is made where a reasonable fear exists that
the respondent might in the normal course not discharge
its duty to
make full discovery. The establishment of an element of dishonesty in
the conduct of a respondent must ordinarily give
rise to a fear that
vital evidence might be concealed or that the respondent might not
make full discovery. Thus in
Dabelstein
and others v Hildebrandt and others
,
[12]
Farlam J said the following:
‘
I
think that it is clear from the summary of the disputed facts set out
above that the first respondent has shown himself to be
a thoroughly
untrustworthy person in his dealings with the applicants. In my view
the applicants have established that there is
a real and well-founded
apprehension that the evidence in his possession relating to the
funds paid over to the third respondent
may be hidden or destroyed or
in some manner spirited away by the time the applicants seek to
enforce the judgment they hope to
obtain against the respondents’.
Durie’s conduct justifiably spurred the appellant to approach
the court in the manner
it did on 16 August 2012. Durie’s
conduct and responses were, in my view, clearly indicative of
duplicity on the respondents’
part. This is underscored by,
inter alia, the initial denial that instructions were given to Valmar
to manufacture the cartridge,
the initial response that the subject
of the interaction with Valmar related to a gas blaster cartridge
bearing no resemblance
to the AutoStem, the obfuscation about how the
respondents came to know of the AutoStem, the false claim that the
drawings provided
to Valmar were those of the respondents, the
failure to admit at the outset to making the drawing and after
ultimately admitting
to having made the drawing, his patently false
reason advanced for the making of the drawing. Based on the
respondents’ glaring
duplicitous conduct, I am unable to fault
the learned judge’s criticism of Durie’s conduct.
[28]
The court a quo therefore correctly held that there was a real and
well-founded apprehension that crucial or vital evidence,
particularly relating to the drawing made by Durie and the
respondents’ instructions and correspondence with the
toolmakers,
may be hidden, destroyed or spirited away by the time the
case came to trial. Significantly, to date such evidence has not been
produced by the respondents.
Requirement
of specificity
[29]
The issue whether or not the Anton Piller order was overly broad and
stretched beyond what was reasonable and lawful and therefore
not
competent, became the main focus of the appeal. Before I consider the
reasoning and finding of the court a quo on this issue,
it is
necessary to first briefly elucidate on the applicable principles
governing this aspect.
[30]
It is trite that an applicant must establish that the respondent
possesses specific documents or things that constitute vital
evidence
in substantiation of the applicant’s cause of action. Strict
compliance with this requirement is pivotal to the
legality of the
use of the procedure. The reason for this requirement is obvious. The
procedure has, potentially, draconian and
extremely invasive
consequences for respondents or defendants who are subject to it. The
implementation in particular of the search
leg of the order, can
amount to the most manifest intrusion of the respondents’ right
to privacy guaranteed in s 14 of the
Constitution as mentioned in
para 20 above. Thus as was stated in
Shoba,
[13]
and as part of the balancing act to be performed by courts based on
the principle of proportionality only vital evidence in the
sense of
evidence of importance to the applicant’s case, must be the
subject of the search. The specified documents must
constitute vital
evidence and a blanket search for unspecified documents or evidence
which may exist is not allowed. Binns-Ward
J in
Mathias
International Ltd and Another v Baillache and Others,
[14]
aptly emphasized the position thus:
‘
The
impermissibility of the use of the procedure to enable searches to be
undertaken to look for evidence to identify or found a
case, as
distinct from the preservation of evidence, for use in an already
identified claim is fundamental. The strict limitation
of the use of
the procedure to the preservation of the evidence, as distinct from,
say, a search for evidence (the so-called fishing
expedition), is a
feature that is essential to the legality of the procedure within the
requirements of s 36(1) of the Constitution.
An application for
authority to search for evidence in the nature of a fishing
expedition should flounder at the first hurdle for
want of compliance
with the specificity requirement mentioned as the second of the three
essential requirements for the grant of
the Anton Piller order. . .
The specificity requirement is a material factor in accepting that
the limitation of basic rights inherent
in the Anton Piller procedure
is reasonable and justifiable as required by s 36(1) of the
Constitution.’
[31]
In terms of the order, two categories of evidence were subject to
search and seizure at Durie’s residence. The first
category
consisted of physical documents like drawings, designs, communication
documents and so forth listed in Schedule ‘A’
to the
order (the listed items), and the second category referred to
evidence stored on electronic, photographic and recording
equipment
and making a forensic copy of information found on such equipment.
[32]
The order prescribed the manner in which the seized items were to be
dealt with, and provided in relevant parts that:
‘
10.1.
Applicant and Applicant’s attorneys may inspect any of the
removed documents (save for any disc containing forensic
copies of
any hard drives, discs or other electronic storage devices containing
information found at the premises) in order to
assess whether it
provides evidence relevant to the present application or the further
legal proceedings envisaged in the application.
.
. .
10.3.
Applicant will be entitled to cause an inspection to be held of
copies of the discs so provided, discs onto which information
(including images) had been copied and other electronic storage
devices containing information found on the premises. The inspection
will be done by the said IT Specialists under the supervision of the
supervising attorney and sheriff. The first respondent shall
be
entitled to have present thereat an independent attorney and IT
specialist. The inspection, which shall be done in respect of
each
forensic disc of which a copy has been produced as aforesaid or other
electronic storage device onto which electronic images
had been
copied during the search of the premises, shall be done for the
purposes of searching the discs or other electronic storage
devices
and copying onto another disc or other electronic storage device any
of the listed items. A copy of this disc or other
electronic storage
shall be provided to the each of respondents and to the sheriff.
10.4.
The Applicant and its attorney shall, 96 hours after the electronic
copy of listed items had been made as contemplated in
paragraph 10.3,
be entitled to inspect such electronic copy order to assess whether
it provides evidence relevant to the present
application or to the
further legal proceedings envisaged in the application.’
[33]
Schedule A to the order, which sets out the listed items reads as
follows:
‘
Regardless
of the medium on which it appears or the format in which it appears
and in respect of a self stemming cartridge identical
or similar to
the AutoStem cartridge or any component thereof; or based on the
concept or idea of the AutoStem cartridge, any component
thereof or
any adaptation of any or all of the aforesaid:
1.
Drawings, designs, depictions;
2.
Models; prototypes or three dimensional reproductions;
3.
Any stemming or self-stemming device or parts thereof;
4.
Communications (be it through email or otherwise) between the first
and/or second respondents and third parties;
5.
Documents;
6.
Photographs;
7.
Videos;
8.
Invoices, quotations, proof of payment;
9.
Requests for quotation;
10.
Requests for assistance with development;
11.
Requests for manufacture;
12.
Any evidence of telephone calls between the first respondent and Mr
Priday of Spex CC; the first respondent and Mr Mark de Villers;
13.
The design, drawings and documents made available by the first and/or
second respondents to Valmar Tool & Die CC and/or
Blinex Plastiek
CC;
14.
The documents, designs and/or drawings returned by Valmar Tool &
Die CC and/or Blinex Plastiek CC to the first and/or second
respondent following the letter from Loubser van der Walt Inc of 3
August 2012;
15.
The drawing made of the AutoStem cartridge by the first respondent;
16.
IT search terms include, but are limited to:
16.1
Self-stemming; Auto-Stem; Auto Stem; AutoStem; Self stem cartridge;
new cartridge; stem; stemming; cartridge system; plug;
cone, conical;
reverse cone; sleeve; gas cartridge;
16.2
Josy Cohen, Jonathan Cohen, Reenen Muller, Ted Priday, Pieter Mare,
Stephan, Blinex, Valmar, Mark de Villers;
16.3
Gas blaster; gasblaster
16.4
GBT; Green Break Technology; Denel;
16.5
Mould manufacture; draftsman; design, cartridge design;
16.6
Patent; copyright; drawings; proto-types;
16.7
Compete; new product;
16.8
Non detonating systems; propellant.’
[34]
In discharging the interim order, the learned judge reasoned as
follows:
(a)
The appellant failed to identify properly the vital documents in
respect of the search and the terms of the order relating to
the
forensic enquiry (ie electronic enquiry) are too wide and should have
been limited to documents and items produced after 4
July 2012, the
day the copyright infringement occurred. Nothing before that date
could be relevant to the relief sought by the
appellant.
(b)
The search should have been limited to specified documents and items
specifically identified in the founding papers namely drawings
and/or
reproductions of the AutoStem and correspondence and annexures to the
correspondence between the respondents and the toolmakers.
(c)
It is unlikely that any further evidence would be discovered on the
return day and a further search would be nothing but a fishing
expedition.
(d)
As a consequence of the order, the first respondent’s home was
raided by several strangers and the search was directed
at Durie’s
personal and private data and correspondence.
(e)
The appellant was not entitled to discovery of the documentation
under the respondent`s possession and control pertaining to
self-stemming devices not infringing the rights of the applicant.
[35]
To my mind, in finding that the search should have been limited to
documents specified in the founding affidavit, the court
adopted a
too restrictive approach to the terms of the order. The court’s
approach in this regard was informed by the view
that only individual
documents identified for being exactly what they are, are properly to
be the subject matter of Anton Piller
orders.
[36]
In my view, this approach is against clearly established law which
permits search and seizure orders for specific classes of
documents.
The test for the identification of documents in Anton Piller orders
has been described as follows:
‘
There
must be clear evidence that the respondent has such incriminating
documents, information, articles and the like in his possession,
or
that, at least, there are good grounds for believing that this is the
case.
.
. .
The
applicant should satisfy the court that he has, as best the
subject-matter in dispute permits him to do, identified the subject
matter in respect of which he seeks attachment and/or removal, and
that the terms of the order which he seeks have been delimited
appropriately and are not so general and wide as to afford him access
to documents, information and articles to which his evidence
has not
shown that he is entitled.’
[15]
[37]
The court a quo agreed with the respondent’s submission that
the order was not limited to specific (and specified) documents
or
things which constitute vital evidence in substantiation of the
appellant’s case, and that it ought to have been formulated
as
narrowly as practically as possible. I do not agree. The opening
paragraph to Schedule A to the order contains, significantly,
a
proviso limiting the needed documents and items to those that are
identical or similar to the AutoStem cartridge, and to any
component
or any adaption thereof. Clearly, anything outside of this easily
defined class is irrelevant and not covered by the
order.
[38]
In my view, save for a few words which can easily be excised without
affecting the substance of the paragraph, there is nothing
irregular
about the aforesaid paragraph. It, in effect, accords with orders
made by our courts in similar applications. I will
refer to just a
few to demonstrate the point:
(a)
In
Aercrete
South Africa (Pty) Ltd and Another v Skema Engineering Co (Pty) Ltd
and Others
,
[16]
the court made an order which sought the attachment of ‘all
copies of any plans, specifications, manuals, brochures and
production sheets in their possession for the manufacture and
production of the said helical mixing device or aerated cement
mixer’.
(b)
In
Dabelstein
,
[17]
the documents to be attached in the Anton Piller search had been
identified, inter alia, as follows:
‘
any
financial statements, ledgers, accounting records, books of account,
invoices, receipts, bank deposit books, bank statements,
ledgers and
other documentation relating to the business of third respondent, or
to monies or investments administered or held
or controlled by first,
second or third respondent for or on behalf of applicants and all
other investors/creditors listed on annexure
“JH 1” to
annexure 1 to this Honourable Court’s order dated 23 August
1995 in case no. 3952/95, or to monies
due to Applicants;
all
bank statements, cheques, deposit books, proof of deposits, drafts,
swift codes, instructions to transfer funds relating to
the amount of
US$698 455 240,00 transferred from or to be transferred from the
accounts held by or in the name of the Respondents
and/or Interinvest
Limited and/or Mr Nezar Yamani at the Saudi Hollandi Bank, Main
Branch, Jeddah, Saudi-Arabia or any other funds
held at such bank by
or in their names’.
[39]
The requirement that the applicant must show, prima facie, that the
respondent has in his possession specific (and specified)
documents
that constitute vital evidence in substantiation of the applicant’s
cause of action, does not mean that only individual
documents
identified by, for example, date or origin, are properly liable to be
attached. Obviously, if it were so none of the
orders referred to
above ought to have been granted. Not even in the
locus
classicus
,
Anton
Piller KG v Manufacturing Processes Ltd and others
,
[18]
where a search and seizure order in respect of all documents, files
or things relating to the design, manufacture, sale or supply
of
copies of the plaintiff’s equipment or parts thereof was
granted, would, on the court a quo’s approach have been
unacceptable. In
Dabelstein
,
the applicants did not know precisely what documents they required
relating to the funds that were paid over to the third respondent.
However, they knew that documents so identifying the affairs of the
trust in question existed but could not identify them with
greater
specificity than, for example, stating that they required bank
statements, cheques and deposits books relating to the particular
deposit.
[40]
By parity of reasoning, the documents and items required
in casu
are clearly defined and limited to the subject matter in question,
namely a self-stemming rock breaking cartridge called the AutoStem.
The documents are specified and specific and there cannot be any
question of doubt regarding what is required to be searched.
[41]
Equally, I find the high court’s reasoning that the forensic
enquiry should have been limited to documents and other
items
produced after 4 July 2012, and that it should be confined to
correspondence and annexures thereto between the respondents
and
other toolmakers, to be erroneous. These presumably, related to
instructions by Durie to toolmakers to manufacture a competing
self-stemming cartridge for the second respondent. In so doing so,
the court a quo overlooked the evidence that Durie, on his own
version, saw the AutoStem and thus knew all about it before his visit
to Spex on 4 July 2012. Because Durie on his own version
approached
various other designers and toolmakers other than Valmar, there was
accordingly no cause to restrict the documents only
to those relating
to the interaction between the respondents and Valmar.
[42]
The court a quo’s finding that there would be no point in
conducting a further forensic search as it was unlikely that
any
further evidence would be discovered, is not supported by the
evidence. I say so because, as on the return day, no forensic
search
of the forensic copies of the data stored on Durie’s laptops
and IPhone, had taken place. Furthermore, the known documents,
namely
the drawings and instructions that Durie gave to Valmar and those
returned to the respondents, were not found during the
search of the
physical documents. They do not appear on the inventory. It follows
that the answer that Durie gave to the supervising
attorney, namely
that he did not have anything other than items 1-18 on the inventory,
cannot be truthful as the instructions to
Valmar, which Durie had
persistently refused to provide, are not listed on the inventory.
[43]
The court a quo’s criticism that the search operation was
directed at Durie`s personal and private data and correspondence
and
at documentation of the respondents pertaining to self-stemming
devices, is not supported by the evidence. No such targeting
appears
from the terms of the order. Furthermore, the respondents themselves
have made no complaint in this respect. The report
of the supervising
attorney contains an explicit account of what happened during the
search. Durie`s attorney Brian Bacon of Brian
Bacon Incorporated,
although not physically present at the time, was however involved and
kept abreast telephonically by Durie,
the sheriff and the supervising
attorney throughout the search. Significantly, no complaint was
lodged by Bacon regarding the search.
To the contrary, after the
search, Durie personally wrote a note which he gave to the
supervising attorney, in which he recorded
that he was ‘. . .
satisfied that the Anton Piller proceedings have been conducted in
accordance with the terms of the order’.
It follows that this
criticism has no legal or factual basis.
[44]
In the circumstances, the court a quo erred when it discharged the
interim order on the return day. The high court ought to
have
confirmed the interim order subject to a few amendments which do not
alter the substance of the order but further ensures
that the
forensic search is limited to relevant items. Counsel for the
appellant rightly conceded that the formulation of the interim
order
does not in some respects comply with the requirements for Anthon
Piller orders. In particular, the phrase in clauses 10.1
and 10.4 of
the order, which reads ‘. . . in order to assess whether it
provides evidence. . .’ should be deleted.
Schedule A to
the order should also be amended to limit the search and seizure to
relevant documents by deleting the words ‘.
. . identical or
similar to. . .’ in the second sentence and substituting these
with ‘. . . substantially identical
to. . .’. No case was
made out for the search and seizure of photographs and videos and the
appellant is thus not entitled
to an order in this regard. Paragraph
16 of Schedule A is irrelevant and should be deleted.
[45]
The relevant parts of the amended Anton Piller order, should read as
follows;
‘
10.1
Applicant and its attorneys may inspect any of the removed documents
(save for any disc containing forensic copies of any hard
drives,
discs or other electronic storage devices containing information
found at the premises) relevant to the present application
or the
further legal proceedings envisaged in the application.
10.4
The Applicant and its attorney shall, 96 hours after the electronic
copy of listed items has been made as contemplated in paragraph
10.3,
be entitled to inspect such electronic copy relevant to the present
application or to the further legal proceedings envisaged
in the
application.’
SCHEDULE
A:
List
of items to be searched
‘
Regardless
of the medium on which it appears or the format in which it appears
and in respect of a self stemming cartridge substantially
identical
to the AutoStem cartridge or any component thereof; or based on the
concept or idea of the AutoStem cartridge, any component
thereof or
any adaptation of any or all of the aforesaid:
1.
Drawings, designs, depictions;
2.
Models; prototypes or three dimensional reproductions;
3.
Any stemming or self-stemming device or parts thereof;
4.
Communications (be it through email or otherwise) between the first
or second respondents and third parties;
5.
Documents;
6.
Invoices, quotations, proof of payment;
7.
Requests for quotation;
8.
Requests for assistance with development;
9.
Requests for manufacture;
10.
Any evidence of telephone calls between the first respondent and Mr
Priday of Spex CC; the first respondent and Mr Mark de Villers;
11.
The design and drawings made available by the first or second
respondents to Valmar Tool & Die CC and/or Blinex Plastiek
CC;
12.
The documents, designs and/ drawings returned by Valmar Tool &
Die CC and/or Blinex CC to the first and/or second respondent
following the letter from Loubser van der Walt Inc of 3 August 2012;
13.
The drawing made of the AutoStem cartridge by the first respondent.
Costs
[46]
As the appellant was substantially successful with the appeal it is
proper that the respondents should be liable for costs.
I am
satisfied that the complexity of the matter also justified the
employment of two counsel.
[47]
I accordingly make the following order:
1
The appeal is upheld with costs, such costs to include the costs of
two counsel.
2
The order of the court a quo is set aside and substituted with the
following order:
‘
2.1.The
provisional order dated 16 August 2012 is amended by substituting
paragraphs 10.1, 10.4 and Schedule A thereto with the
following –
‘
10.1
Applicant and its attorneys may inspect any of the removed documents
(save for any disc containing forensic copies of any hard
drives,
discs or other electronic storage devices containing information
found at the premises) relevant to the present application
or the
further legal proceedings envisaged in the application.
10.4
The Applicant and its attorney shall, 96 hours after the electronic
copy of listed items has been made as contemplated in paragraph
10.3,
be entitled to inspect such electronic copy relevant to the present
application or to the further legal proceedings envisaged
in the
application.’
SCHEDULE
A:
List
of items to be searched
‘
Regardless
of the medium on which it appears or the format in which it appears
and in respect of a self stemming cartridge substantially
identical
to the AutoStem cartridge or any component thereof; or based on the
concept or idea of the AutoStem cartridge, any component
thereof or
any adaptation of any or all of the aforesaid:
1.
Drawings, designs, depictions;
2.
Models; prototypes or three dimensional reproductions;
3.
Any stemming or self-stemming device or parts thereof;
4.
Communications (be it through email or otherwise) between the first
or second respondents and third parties;
5.
Documents;
6.
Invoices, quotations, proof of payment;
7.
Requests for quotation;
8.
Requests for assistance with development;
9.
Requests for manufacture;
10.
Any evidence of telephone calls between the first respondent and Mr
Priday of Spex CC; the first respondent and Mr Mark de Villers;
11.
The design and drawings made available by the first or second
respondents to Valmar Tool & Die CC and/or Blinex Plastiek
CC;
12.
The documents, designs and/ drawings returned by Valmar Tool &
Die CC and/or Blinex CC to the first and/or second respondent
following the letter from Loubser van der Walt Inc of 3 August 2012;
13.
The drawing made of the AutoStem cartridge by the first respondent.
2.2.
The provisional order as amended is confirmed
.’
BH
Mbha
Judge
of Appeal
APPEARANCES:
For
Appellant: A R Sholto-Douglas SC (with him R M Robison)
Instructed
by: Von Seidels Intellectual Property Attorneys, Cape Town
Webbers,
Bloemfontein
For
Respondents: A J Bester SC (with him M Seale)
Instructed
by: Cliffe Dekker Hofmeyr Inc, Cape Town
Symington
De Kok, Bloemfontein
[1]
Case
no 16601/12
[2]
Universal
City Studios Inc & others v Network Video (Pty) Ltd
[1986] ZASCA 3
;
1986
(2) SA 734
(A) at 747E-F.
[3]
Universal
City Studios Inc
(above)
at 755A-C.
[4]
Shoba
v Officer Commanding
,
Temporary
Police Camp, Wagindrift Dam & a
nother;
Maphanga v Officer Commandi;South African Police Murder and Robbery
Unit, Pietermaritzburg & others
1995
(4) SA 1
(A) at 15F-16C.
[5]
Dabelstein
above
at 65E;
Shoba
above at 15F-16C.
[6]
S
v Makwanyane
[1995] ZACC 3
;
1995
(3) SA 391
(CC) at 104.
[7]
Shoba
above
at 16B-C.
[8]
Cargo
Laden and Lately Laden on Board The MV Thalassini AVGI v MV Dimitris
1989
(3) SA 820
(A) at 831H-J.
[9]
Bradbury
Greforex & Co (Colonial) Ltd v Standard Trading Co (Pty) Ltd
1953 (3) SA 529
(W) at 533C-E.
[10]
Copyright
Act
98
of 1978
.
[11]
Regulations
made under the
Currency and Exchanges Act 9 of 1933
published in GN
R1111 of December 1961 as amended up to GN R445, GG 35430 of 8 June
2012.
[12]
Dabelstein
& others v Hildebrandt & others
1996 (3) SA 42
(C) at 69F-G.
[13]
Shoba
supra at 15I-16C
.
[14]
Mathias
International Ltd & another v Baillache & others
2015
(2) SA 357
(WCC) para 20.
[15]
See
Roamer
Watch Co SA & another v African Textile Distributors also t/a M
K Patel Wholesale Merchants and Direct Importers
1980
(2) SA 254
(W) at 273C-274F.
[16]
[
1984]
(4) SA 814
(D) at 828D.
[17]
Dabelstein
v Hilderbrandt
above
at 27-28.
[18]
Anton
Piller KG v Manufacturing Processes Ltd and others
[1975] EWCA Civ 12
;
[1976]
1 ALL ER 779
(CA).