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[2010] ZAGPJHC 194
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Bax Global (Pty) Ltd v Tecmed (Pty) Ltd (2009/53039) [2010] ZAGPJHC 194 (4 November 2010)
IN THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
(REPUBLIC OF SOUTH
AFRICA)
CASE NUMBER: 2009/53039
DATE: 04 NOVEMBER 2010
In the application between
BAX GLOBAL (PTY)
LTD
................................................................................................
APPLICANT
And
TECMED (PTY)
LTD
....................................................................................................
RESPONDENT
JUDGMENT
EF DIPPENAAR AJ
[1] This is an interlocutory
application in which the Applicant seeks an order in terms of Rule
35(13) that the provisions of Rule
35 be made applicable to this
application. In addition, the Applicant seeks an order that the
Respondent provides certain documents
set out in paragraphs 1 to 3 of
the Applicant’s notice in terms of Rule 35(14) as well as the
documents set out in paragraphs
6, 7, 8 and 10 of the Applicant’s
notice in terms of Rule 35(12) .
[2] The main application is one in
which the winding-up of the Respondent is sought at the instance of
the Applicant. One of the
grounds upon which the Applicant seeks the
winding-up of the Respondent is in terms of Section 344(c) of the
Companies Act, 61
of 1973 contending that the Respondent has
suspended its business for a period of a whole year. In the founding
affidavit the
Applicant asserts the Respondent is dormant, does not
trade and has not traded for more than two years based on various
reasons
not relevant to the current application. In the answering
affidavit the Respondent asserts various technical and other defences
and denies that it no longer trades.
[3] The Respondent’s response to
the Applicant's Rule 35(12) notice was that the documents sought in,
inter alia, paragraphs
6, 7, 8 and 10 (being the paragraphs relevant
to this application) fall outside the ambit of the Rule 35(12) as no
reference was
made to a document in the paragraphs in issue. The
response to the Rule 35(14) notice was that the rule applied only to
actions
and not to applications.
[4] In the Rule 35(14) notice the
Applicant requests, inter alia, the Respondent’s VAT returns,
balance sheets and income
statements as these financial documents
will demonstrate whether or not the Respondent has ceased trading.
[5] The Applicant contends that the
production of these documents is to the advantage of the Respondent
if indeed it continues to
trade as they will demonstrate that the
Applicant is wrong in its assertion that the Respondent has ceased
trading. The Respondent
resists disclosure of the said documents on
the technical grounds that the rule does not apply to applications.
[6] The documents requested in the Rule
35(14) notice appear to be relevant if not decisive of the issue in
the main application
as to whether the Respondent is dormant or
continues to trade.
[7] The Respondent has raised four
points in limine, which I will deal with in turn.
[8] First, the Respondent contends that
the Applicant does not have locus standi in the winding-up
application and accordingly also
does not have locus standi in this
application. The Respondent contends that it is res judicata that
the debt alleged by the Applicant
is being contested on bona fide
grounds because Respondent’s application for a rescission of
judgment in respect of the same
debt was successful and further
relies on the so-called Badenhorst rule. Therefore the Respondent
contends that the Applicant
cannot rely on the debt and is
accordingly not a creditor with locus standi in the main application.
The main application is however
not before me and I am not inclined
to predetermine the issues which are to be debated in the main
application.
[9] In essence, the Respondent wants
this Court to determine the Applicant’s locus standi in the
main application and in this
application first and as a separate
issue before making a decision on the merits of the application.
[10] The Applicant contends that its
locus standi in the main application is not an issue in this
application and cannot be decided
in this application whether as a
separate issue or not.
[11] I agree with the Applicant's
contention that I cannot decide on an issue in the main application
which is not before me as
a procedural step to determine whether the
Applicant has locus standi in this interlocutory application and that
whilst the main
application is pending, I must accept that the
Applicant has locus standi for purposes of this interlocutory
application.
[12] The Respondent secondly contends
that the order sought is defective as the application in terms of
Rule 35(13) should be framed
as seeking relief that the discovery
procedure set forth a Rule 35 applies to the main application as
opposed to the present application
and that the service of the Rule
35(14) notice was accordingly premature.
[13] The Applicant contends that this
application is interlocutory to the main application. The effect of
making an order in terms
of Rule 35(13) in this application would
clearly result in it being applied also in the main application.
[14] In my view the route proposed by
the Respondent is highly technical and it is formalistic to require
the Applicant to obtain
an order in terms of Rule 35(13) and
thereafter to be required to serve a further Rule 35(14) notice
requesting the same documents
as in my view this would be a waste of
time and result in unnecessary costs being incurred. Such
formalistic approaches have been
strongly condemned by our Courts.
See for example Federated Trust v Botha,
1978 (3) SA 645
(AD) at
654D-F.
[15] The third point in limine raised
by the Respondent is that the Applicant has failed to set out
exceptional circumstances that
justify the relief sought.
[16] It is trite that a Court will only
in exceptional circumstances make an order in terms of Rule 35(13) in
application proceedings.
See: Premier Freight (Pty) Ltd v Breathtex
Corporation (Pty) Ltd,
2003 (6) SA 190
(SE) at paragraph 7.
[17] The Applicant contends that the
following facts and circumstances constitute such exceptional
circumstances:-
[17.1] Relying on the Premier Freight
case referred to above, the Applicant contends that Section 39(2) of
the Constitution of the
Republic of South Africa, 108 of 1996
requires a Court to interpret Rule 35(13) in such a way that the
spirit purport and objects
of the bill of rights is promoted. The
founding constitutional value of the rule of law enshrined in Section
1(c) of the Constitution
and the right of access to a Court
entrenched in Section 34 of the Constitution encapsulate a commitment
by the State to make available
to the public for the resolution of
disputes, Courts that function according to fair procedures. Section
32 of the Constitution
provides for access to information held by the
State or private bodies, if it is required for the exercise or
protection of a right.
[17.2] The notion of exceptional
circumstances does not exist in a vacuum. It is to be gauged within
the rules themselves are based
namely, ideas of fairness and equity
and the constitutional values of openness and transparency.
[17.3] The debt due to the Applicant by
the Respondent is substantial and is an amount of R3 433 483,30.
[17.4] The main application is for the
winding-up of the Respondent. If an order were to be granted in the
main application, it
would affect the Respondent’s status. The
matter is therefore of cardinal importance to both parties.
[17.5] The documents that the Applicant
seeks are, on the face thereof, relevant to the defence raised by
the Respondent in the
main application and would probably be decisive
of such defence.
[17.6] The application for a direction
that the rules of discovery apply is circumscribed and well directed.
It is not sought to
serve a discovery notice in terms of Rule 35(1).
It is only sought to have the rule extended to the documents sought
in terms
of the Rule 35(14) notice. It cannot therefore be described
as a fishing expedition and the limited discovery that is sought is
unlikely to result in an extension of the issues to be determined in
the main application.
[17.7] The issue of discovery has been
raised timeously and not at a late stage in the proceedings. Prima
facie the documents sought
are necessary to enable the Applicant to
settle its replying affidavit.
[17.8] The Applicant is not seeking to
invoke Rule 35(13) to obtain information that it ought to have had
before it launched the
Main Application. The documents it seeks are
directly relevant to the issues raised by the Respondent in the
Answering Affidavit
and could not have been anticipated by the
Applicant, bearing in mind the grounds upon which it relied for its
contention that
the Respondent had ceased trading.
[17.9] The documents sought by the
Applicant would in all probability resolve the matter one way or the
other. They will either
establish tat the Respondent has traded
during the period it contends it did or they will establish that it
has not traded.
[17.10 There is a reasonable
apprehension that not everything is before the Court for the just and
fair resolution of the dispute
between the parties. Where such an
apprehension exists and a party seeks an order in terms of Rule
35(13) that would have the effect
of placing all relevant documents
before the Court, the Court should be slow to exercise a discretion
against such a party.
[17.11] In any event, even if an order
is not made in terms of Rule 35(13), the Applicant places reliance on
the discretion afforded
a Court in terms of the Rule 35(11) to order
production of the documents. Reliance is placed for this contention
on Seale v Van
Rooyen NO & Others,
2008 (4) SA 43
(SCA) at 48G,
paras 11 – 14.
[18] There appears to be merit in the
Applicant’s contentions and I do not agree with the Respondent
that no exceptional circumstances
exist.
[19] Fourthly, the Respondent contends
that the replying affidavit in the main application was due before
the date on which the
Rule 35(12) and (14) notices were served. It
contends further that because the notices were not served prior to
the date on which
the answering affidavit was due, the notices were
out of time and that there was no requirement to respond thereto.
[20] The Applicant submits that if the
Respondent was of the view that the Rule 5(12) and (14) notices were
served out of time,
then it had the right to serve a notice in terms
of Rule 30(2) requiring the Applicant to remedy what it contended was
an irregular
step. It failed to do so and instead responded to both
notices. Having taken a further step in the cause without knowledge
of
the alleged irregularity, the Respondent was precluded from
raising the irregularity thereafter. Moreover, the Rule 35(12)
notice
could be served at any time before the hearing. From the
papers it does not appear that the Respondent had placed the
Applicant’s
contention that it required the documents for the
purposes of settling its replying affidavit in issue. The Applicant
contends
that its request accordingly falls within the ambit of
pleading as envisaged by Rule 35(14).
[21] I am of the view that the
Applicant’s submissions have merit and that this point in
limine similarly falls to be dismissed.
[22] I have also considered the
specific objections raised against the production of each of the
documents the Applicant requires
to be produced and make the
following general comments.
[23] The main objections raised by the
Respondent to the production of the documents are that the documents
are not specifically
referred to in the said paragraphs or are not
relevant to the issues in dispute. In my view these contentions are
without merit
as the documents are referred to in a document that is
referred to in the affidavit and which is annexed as an annexe
thereto and
in respect of which no proper basis has been laid for
them not to be relevant. As such, in my view, the Applicant is
entitled
to the production thereof. See Universal City Studies v
Movie Time,
1983 (4) SA 736
(D) at 760D.
[24] The Applicant is further entitled
to production of the whole of a document referred to and not just the
portion upon which
the Respondent has chosen to rely as enunciated in
Protea Assurance Co Ltd v Waverley Agencies CC,
1994 (3) SA 247
(C)
at 249B.
[25] After considering in detail the
documents sought by the Applicant, I make the following order:
1 It is directed that the provisions of
Rule 35(13) shall apply to this and the main application;
2 The Respondent is directed to
provide the documents set out in paragraphs 1, 2 and 3 of the
Applicant’s notice in terms
of Rule 35(14) dated 26 February
2010 within five (5) days of service of this order;
3 The Respondent is directed to provide
the documents set out in paragraphs 6, 7, 8 and 10 of the Applicant’s
notice in terms
of Rule 35(12) dated 25 February 2010 within five (5)
days of service of this order;
4 The Respondent is directed to pay the
costs of this application.
EF DIPPENAAR
ACTING JUDGE OF THE HIGH COURT
Date of hearing : 13 May 2010
Date of judgement : 4 November 2010
For applicant : Adv J F Roos SC
: Adv S S Cohen
: Wertheim Bekker Inc
For respondent : Adv M Nowitz
: Schindlers Attorneys