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[2017] ZAGPJHC 327
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Allen and Another v Kirkinis (20428/2014) [2017] ZAGPJHC 327 (10 October 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case No. 20428/2014
Reportable
Of
interest to other judges
Revised.
In
the matter between:
PAUL
GARDNER
ALLEN
First
Plaintiff
VULCAN
INCORPORATED
Second
Plaintiff
and
MICHAEL
KIRKINIS
Defendant
Case
Summary:
Interlocutory
application: (a) Discovery, inspection and production of
documents – to compel production of documents
requested under
rule 35(3) of the Uniform Rules of Court - a probability has
not been shown to exist that defendant is either
mistaken or false in
his assertion of irrelevance or in his assertion
that
certain
documents
no
longer in his possession and their whereabouts unknown to him.
(b) Further particulars -
to
compel the furnishing of adequate further particulars requested under
rule 21 - particulars requested not strictly necessary
to prepare for
trial. Application dismissed.
Interlocutory
counter-application:
Discovery,
inspection and production of documents – to compel production
of documents requested under rule 35(3) of the Uniform
Rules of Court
- a probability has not been shown to exist that plaintiffs
either mistaken or false in their assertion of
irrelevance.
Evidence – Privilege – Legal professional privilege –
Rule that document once privileged always
privileged part of our law
– Privilege extends to consultation notes by plaintiffs’
attorneys made during consultation
with witness in preparation for
hearing of unrelated legal proceedings - consultation notes remain
subject to privilege and plaintiffs
not obliged to disclose them.
Counter-application dismissed.
JUDGMENT
MEYER,
J
[1]
These motion
proceedings are interlocutory to a pending action between the first
plaintiff, Mr Paul Gardner Allen, the second plaintiff,
Vulcan
Incorporated (a company incorporated in the United States of
America), and the defendant, Mr Michael Kirkinis (the action).
In this application the plaintiffs seek an order to compel the
defendant to deliver documents sought under two notices in terms
of
rule 35(3) of the Uniform Rules of Court, dated 13 May 2016 and 22
June 2016 respectively, as well as an order to compel the
furnishing
of certain further particulars that were requested under rule 21.
The defendant, by way of counter-application,
seeks an order to
compel the plaintiffs to deliver certain documents which the
defendant sought in terms of a rule 35(3) notice,
dated 12 July 2016.
[2]
The plaintiffs’ case in the action is that they used the
defendant for a period of about four years to arrange expeditions
for
them in Southern Africa. The expeditions included luxury game
viewing safaris in a number of countries in Southern Africa,
inter
alia
Botswana and Tanzania. The plaintiffs expended tens of
millions of dollars on the expeditions over a number of years.
In earlier years (2006 to 2010), the expeditions were arranged and
facilitated by two safari entities: Royal African Safaris,
a
partnership, and Passage to Africa, initially a partnership and later
registered and incorporated as a company. (These
entities,
including another partnership, Lebombo Safaris, of which the
defendant was a partner also, are referred to by the parties
as ‘the
PTA entities’ and I adhere to their nomenclature.)
[3]
In 2010, so allege the plaintiffs, they had a fall-out with the PTA
entities. By then the second plaintiff and his sister
(who
frequently travelled together) had formed a close personal
relationship with the defendant, who had been a guide on a number
of
the safaris. They had discussions with him and he agreed with
them that Passage to Africa (in which he was a partner and
later a
shareholder) had let them down unacceptably, both in the organisation
of the expeditions and in another area which is not
presently
relevant. The defendant, according to the plaintiffs, agreed to
extricate himself from his relationship with the
PTA entities and to
be personally responsible for organising and facilitating the
expeditions for them in the future. In
return, he would receive
a commission, which was to be recovered from the third-party
suppliers that ultimately provided the services
on the expeditions.
This agreement, allege the plaintiffs, was concluded in November
2010.
[4]
Pursuant to the conclusion of the agreement, the defendant, according
to the plaintiffs, arranged a number of expeditions to
Southern
Africa for them and various guests and members of their party.
(Those expeditions are referred to in the papers
as ‘the
relevant trips’.) Prior to any payments by the plaintiffs, so
it is averred in their declaration, the defendant
emailed them a
final itinerary/breakdown of costs, which reflected the costs of the
relevant trip. Once an itinerary had
been accepted by the
plaintiffs and the defendant had put the necessary arrangements into
place, he requested, where necessary,
an up-front payment from the
plaintiffs, either as a payment in full or a deposit. After the
relevant trip had been completed,
where the expenses incurred
exceeded those paid for by the plaintiffs, the defendant forwarded a
list of expenses actually incurred,
requesting payment of the
outstanding balance. The amounts requested, so aver the
plaintiffs, were deposited into a bank
account nominated by the
defendant.
It is
undisputed that the plaintiffs only ever made payments for their
African expeditions and safaris into a Guernsey bank account,
before
late 2010 and thereafter.
[5]
In early 2014, the second plaintiff became concerned about the level
of the expenditure – he could not reconcile the costs
with what
was going on the ground, and there were various features of the
expeditions that caused him concern. He, therefore,
asked the
defendant to account to them for the use and application of the funds
which had been paid to him. This did not
happen and litigation
ensued.
[6]
The plaintiffs initially instituted motion proceedings against the
defendant in June 2014 based on the alleged oral agreement
to obtain
a statement and debatement of account. However, because a
number of material disputes of fact had arisen on the
papers, the
matter was by agreement referred to trial in December 2015. The
plaintiffs seek the following order in their
declaration in the
action:
‘
1.
Declaring that a relationship of agency subsisted between the
plaintiffs and the defendant, from November 2010, which included
the
terms set out [in paragraph 6.3 of the declaration];
alternatively
declaring
that a relationship which included a duty to account subsisted
between the plaintiffs and the defendant, from November
2010.
2. That the defendant deliver to the
plaintiffs a full and proper statement of account for the use and
application of any funds
paid by the plaintiffs in relation to or in
connection with the relevant trips, within 14 days of this Order,
which account is
duly supported by all relevant vouchers (including,
without limitation, all relevant documents, agreements, receipts,
statements,
entries in books of account and correspondence) in
respect of the relevant trips (as defined in the plaintiff’s
declaration),
and for the use of any of the funds paid by the
plaintiffs in relation to or in connection with the relevant trips,
for the period
2011 to 2014.
3. Ordering that, after rendering the
account in prayer 2, the defendant shall . . . debate the aforesaid
account; and . . . disgorge
and pay to the plaintiffs, such amounts,
if any, as may be due to them upon such debatement.’
[7]
There are a number of factual disputes between the parties, but for
present purposes, they can be fairly simply stated.
The
plaintiffs aver, essentially, that they concluded an agreement with
the defendant personally. That agreement, according
to them,
was one of agency, or one of a similar nature that incorporated
various fiduciary duties, including the duty to render
an account.
The defendant denies that the plaintiffs concluded an
y
agreement
with him personally. The trips, according to him, were arranged
by the plaintiffs through Passage to Africa (Pty)
Ltd, represented by
him, until May 2013, and thereafter by Lebombo Safaris, also
represented by him. The defendant avers
that he only ever acted
in a representative capacity on behalf of the PTA entities, and did
not owe the plaintiffs a duty to account.
The expeditions, so
alleges the defendant, were purchased by the plaintiffs from the PTA
entities at a globular price, and the
plaintiffs, therefore, have no
right to any insight into the underlying costs.
[8] In explanation of his
defence the defendant states that no agreements were concluded
between himself and any service providers;
all agreements were
concluded between the PTA entities and the service providers;
all negotiations with service providers
were conducted by the PTA
entities; all bookings with service providers were made by the
PTA entities; service providers
issued their invoices to the PTA
entities; payments for services rendered were made by the PTA
entities to the relevant service
providers; and the plaintiffs
made payments in respect of their expeditions to the PTA entities.
[9]
The central issues raised on the pleadings, therefore, are whether
any oral agreement was concluded between the plaintiffs and
the
defendant in terms of which the defendant agreed to act as the
plaintiffs’ agent
or in
a similar capacity
in organising the
plaintiffs’ expeditions or trips, and what the terms of the
oral agreement were, if it had indeed been concluded.
[10]
Questions that require investigation with reference to the facts,
according to the plaintiffs, include: the capacity
in which the
defendant related with the plaintiffs and with the various service
providers; the
capacity in
which the defendant paid the service providers and in which he
received payment of fees or commissions or a salary;
how he
accounted for and described his earnings to the tax authorities;
what revenues he received, from whom, and in what
capacity; how
the underlying costs were passed on to the plaintiffs; and the
relationship between what was paid to
the various service providers
and what was charged to the plaintiffs. The plaintiffs contend
that the answers to these issues,
and others like them, will be the
best evidence of the true nature of the relationship between the
defendant and the plaintiffs.
The acid test, argue the
plaintiffs, of the contradictory versions of the parties is how they
treated that relationship at the
time, and the best evidence of that,
they contend, lies in the contemporaneous documentation. The
plaintiffs argue that from
such material can be determined how the
relationship between them and the defendant manifested itself in the
actual dealings between
the defendant and those third parties that
supplied services to the plaintiffs.
[11]
Rule 35(3) provides that-
‘
[i]f any party believes that
there are, in addition to documents … disclosed as aforesaid,
other documents …
which may be relevant to any matter in
question
in the
possession of any party thereto
, the
former may give notice to the latter requiring him to make the same
available for inspection …or to state on oath …
that
such documents are not in his possession, in which event he shall
state their whereabouts, if known to him.’
(Emphasis
added.)
[12] The documents sought
to be produced in terms of the plaintiffs’ first notice in
terms of rule 35(3), are:
(a)
all correspondence between the defendant or any of his agents or
employees and the service providers who provided services for
the
trips: e.g. accommodation; helicopters; aeroplanes; and the like
(item 4);
(b)
all invoices, receipts, quotations or
other financial documentation provided by the service providers in
relation to the relevant
trips (item 5);
(c) all agreements or
memoranda of understanding between the defendant or the entities
which he allegedly represented and the service
providers (item 6);
(d) all invoices,
receipts, underlying documentation, working papers, quotes,
statements, entries in books of account, agreements,
correspondence
and other documentation relating in any way, to the relevant trips
(item 7);
(e) all documents
recording, referring to and/or explaining any credits, rebates,
discounts, compensation, deposits, commissions
or other benefits or
fees, refunds and/or cancellations (as well as any policies in
respect of credits, rebates, discounts, compensation,
deposits,
commissions or other benefits or fees, refunds and/or cancellations)
which related to, were applied or were applicable
in respect of one
or more of the relevant trips (item 8);
(f) bank statements
reflecting all transactions on account 707440 of EFG Private Bank
Ltd, Leconfield House, Curzon Street, London
or St Peter Port,
Guernsey, Channel Islands, United Kingdom (the bank account) in
relation to the relevant trips and the outflow
of funds previously
paid into the bank account by the plaintiffs in relation to the
relevant trips (item 9);
(g) all invoices received
from Phil Mathews for the period 2010 to 2014 in relation to the
relevant trips (item 10);
(h) all correspondence
with suppliers and service providers for the period 2010 to April
2014, where the defendant negotiated to
have the suppliers and
service providers affording the plaintiffs credit for future
expeditions should the plaintiffs cancel service
requests already
paid for on a current or planned expedition (item 11);
(i) all correspondence
between the defendant or any of his agents or employees and any
‘operators’, as referred to in
the defendant’s
email dated 4 March 2014 and annexed to the founding affidavit marked
PA59 (item 12);
(j) all emails ‘on
record’ where the defendant requested any party to ‘channel
all travel requests associated
with Paul or Jody’s travel
through [the defendant]’, as appears from annexure PA63 to the
founding affidavit (item
13); and
(k) all non-disclosure
agreements referred to in annexure MK13 to the answering affidavit
(item 17).
[13] The documents sought
to be produced in terms of the plaintiffs’ second notice in
terms of r 35(3), are:
(a) all documentation,
including the documentation made available by or on behalf of the
defendant to the South African Revenue
Service or any other revenue
service in a country other than South Africa (revenue authorities)
for the period 2009 to 2014 demonstrating
or evidencing proof of the
defendant’s income, the source or sources of his income and the
expenditure incurred by him (item
2);
(b) any documents
evidencing, setting forth and/or supporting the defendant’s
income, the source or sources of his income
and the expenditure
incurred by him in the calculation of his income tax or VAT for the
2009-2014 tax years (item 3);
(c) any documents showing
how the income derived directly or indirectly by the defendant from
the relevant trips was declared by
the defendant to the revenue
authorities and how that income was treated in the defendant’s
financial records (item 4);
(d) any income tax and
VAT returns and documentation use to calculate the amounts set out in
the returns of the entities which the
defendant allegedly represented
(item 5); and
(e) the IRP 5 forms, IT
3(a) forms, IT 14 forms and supporting schedules, income tax
reconciliation computations and schedules,
directors’
remuneration schedules and trial balances, EMP 201 monthly employer
declarations, EMP 501 employer reconciliation
declarations and any
spreadsheet or calculation which show how any of the relevant
entities’ payroll company determined the
amount of PAYE to be
deducted per month for the period 2009 to 2014, be they in draft or
final form, relating to the defendant
and/or any of the entities
which the defendant allegedly represented (item 6).
[14]
The defendant objects to the disclosure of the documents on four
grounds: First, he contends that the plaintiffs’
application is an abuse of process because the plaintiffs seek to
pre-empt the outcome of the action. The defendant’s
argument is that the documents sought in discovery are at the heart
of the accounting, and the plaintiffs should therefore not
be
entitled sight of the documents unless and until the court has
determined the main issue in the trial, namely whether the plaintiffs
are entitled to an accounting. This objection is raised to the
discovery of the documents referred to in items 4, 5, 6, 7,
8, 9, 10,
11, 12 of the plaintiffs’ first notice in terms of rule 35(3).
Second, the defendant contends that the documents
sought are
privileged in the hands of the PTA entities which the defendant
alleges he represented and/or are confidential, and
on that basis are
protected from disclosure. This objection is raised to the
discovery of the documents referred to in item
6 of the plaintiffs’
first notice in terms of r 35(3). Third, the defendant contends
that the documents sought are
irrelevant in that they either do not
support the plaintiffs’ claim or undermine the defendant’s
defence. The
contention is that the documents will merely
advance the defendant’s own case, and therefore are not
discoverable.
This objection is raised to the discovery of the
documents referred to in items 4, 5, 6, 7, 8, 9, 10, 11, 12 and 17 of
the plaintiffs’
first notice in terms of rule 35(3) and to the
discovery of the documents referred to in items 2, 3, 5 and 6 of the
plaintiffs’
second notice in terms of rule 35(3). Fourth,
the defendant objects to the discovery of certain of the requested
documents
on the basis that they do not exist or are not in his
possession and their whereabouts are unknown to him. This
objection
is raised to the discovery of the documents referred to in
items 13 and 17 of the plaintiffs’ first notice in terms of
rule
35(3) and to the discovery of the documents referred to in items
2, 3, 4, 5 and 6 of the plaintiffs’ second notice in terms
of
rule 35(3).
[15]
The first objection of the
defendant is that the discovery of the documents at this stage will
pre-empt the relief sought in the
action. In his answering affidavit
he articulates this defence thus:
‘
30. Should
the plaintiffs fail in proving that an agreement was indeed concluded
between them and me and/or that such alleged agreement
included a
duty for me to account to the plaintiffs, then the plaintiffs will
never be entitled to the documents and/or information
that are now
demanded in this application (and which are sought in the main
action).
31. …
32. Because no agreement was ever
concluded between the plaintiffs and me, the plaintiffs are not
entitled to the relief sought
in the main action. Also, until
the trial court has determined the dispute between the parties in the
main action and found
that the plaintiffs are entitled to the relief
sought in their declaration, the plaintiffs are not entitled to the
relief sought
in this interlocutory application.’
[16]
The defendant thus contends that the plaintiffs must establish a
right to an accounting before they can obtain discovery of
the
documentation. In this regard the defendant further states as
follows:
‘
Should the
applicants fail in proving that an agreement was indeed concluded
between them and me/or that such alleged agreement
included a duty
for me to account to the applicants, then the applicants will never
be entitled to the documents and/or information
that are now demanded
in this application (and which are sought in the main action).
. . .
Also, until the
trial court has determined the dispute between the parties in the
main action and found that the applicants are
entitled to the relief
sought in their declaration the applicants are not entitled to the
relief sought in this application.’
[17]
I must disagree with the defendant’s argument that the
plaintiffs must establish a right to an accounting before they
can
obtain discovery of the documentation. If it is found that it
is reasonable to suppose that the documents contain information
which
may
be relevant to any matter in question
and that they are in the possession
of the defendant, then they must, in the absence of a legally valid
ground of objection, be
discovered. It matters not that certain
of the documents which the plaintiffs seek by way of discovery may
also ultimately
be provided by the defendant as constituting the
vouchers that accompany his account to the plaintiffs, should they be
successful
in their action. Furthermore, the defendant’s
position is premised on the incorrect understanding that the mere
provision
of documents constitutes an accounting. As Binns-Ward
J said in
Grancy
Properties Ltd and Another v Seena Marena Investments (Pty) Ltd and
Others
(15757/2007)
[2010] ZAWCHC 116
para [32] - [33], citing
Hansa
v Dinbro Trust (Pty) Ltd
1949 (2) SA 513
(T),
it was insufficient to provide an
account to the effect that-
‘
[h]ere
are my books and here are my vouchers, you are at liberty to go
through them and make up an account for yourself’.
[18]
The defendant’s objection that some of the documents constitute
confidential business information of Passage to Africa
or Lebombo
Safaris, which entities he maintains he represented, or that they are
private and confidential to him (such as his private
bank statements)
must also fail. Confidentiality is no basis to avoid
discovery. It is settled that the fact that documents
contain
information of a confidential nature does not
per
se
confer on them
any privilege against disclosure (see
Rutland
v Engelbrecht
1956
(2) SA 578
(C) at 579;
Van
der Linde v Calitz
1967 (2) SA 239
(A) at 260;
S
v Naicker and Another
1965
(2) SA 919
(N);
Crown
Cork and Seal Co Inc v Rheem South Africa (Pty) Ltd
1980 (3) SA 1093
(W) at 1099). If a court is minded to do so
(although this is not required in the present matter), it may put in
place a
confidentiality regime for the disclosure of documentation.
(See
Crown Cork
(supra) and
Bridon
International GmbH v International Trade Administration Commission
2013 (3) SA 197
(SCA), para [35].)
[19]
The defendant’s third objection is that the documents sought to
be discovered are not relevant. As was said by
Van Heerden J in
Rellams (Pty) Ltd v James Brown & Hamer Ltd
1983 (1) SA 556
(N) at 560F-G:
‘
It is generally speaking, no
doubt true that, whilst the Court should not and would not go behind
a party’s affidavit that
the contents of a document are not
relevant, such affidavit is nevertheless as far as the Court is
concerned not conclusive.
After an examination and
consideration of the recognised sources as well as the pleadings and
the nature of the case the Court
may come to the conclusion that the
party making discovery in all probability has other relevant and
disclosable documents in his
possession or power and may order
further and better discovery or production in conflict with the claim
in the affidavit.
Herbstein and Van Winsen (supra
at
410) and
Lenz Township Co (Pty) Ltd v Munnick
1959 (4) SA 567
(T).’
[20] In
Swissborough
Diamond Mines (Pty) Ltd and Others v Government of the Republic of
South Africa and Others
1999
(2) SA 279
(T), at 317E-I, Joffe J said the following:
‘
It is well established law that
Courts are reluctant to go behind a discovery affidavit, which is
prima facie taken to be conclusive.
In
Marais v Lombard
1958
(4) SA 224
(E) at 227G it was held that
“
when a party making discovery
has sworn an affidavit as to the irrelevancy of certain documents,
the Court will not reject that
affidavit unless a probability is
shown to exist that the deponent is either mistaken or false in his
assertion”.
This approach was held in
Richardson's
Woolwasheries Ltd v Minister of Agriculture
1971 (4) SA 62
(E) at 67C-F to be also applicable when possession, as opposed to the
relevance of a document, is in issue. In
Continental Ore v
Highveld Steel & Vanadium Ltd
(supra) the following was held
at 597E-H:
“
It has further been held in a
series of cases before the enactment of the present Rules that when a
party to an action refuses to
make discovery of or to produce for
inspection any documents on the ground that they are not relevant to
the dispute, the Court
is not entitled to go behind the oath of that
party unless reasonably satisfied that the denial of relevancy is
incorrect.
Caravan Cinemas (Pty) Ltd v London Film
Productions
1951 (3) SA 671
(W), per Murray AJP, at 675-7.
The affidavit denying relevance is generally taken as conclusive, and
the Court will not reject
it unless a probability is shown to exist
that the deponent is either mistaken or false in his assertion.
Marais v Lombard
1958 (4) SA 224
(E), per O'Hagan J, at
227G; Lenz Township Co (Pty) Ltd v Munnick and Others
1959 (4)
SA 567
(T), per Williamson J, at 572-3. See also the authorities
collected in
Federal Wine and Brandy Co Ltd v Kantor
1958
(4) SA 735
(E) at 745-8, a judgment of Wynne J, which was
described in the
Lenz
case (at 573) as a veritable thesaurus
of the decisions on discovery.'
And, at 320F-H, that-
‘
. . . the Court, in determining
whether to go behind the discovery affidavit, will only have regard
to the following:
(i) the discovery affidavit itself; or
(ii) the documents referred to in the
discovery affidavit; or
(iii) the pleadings in the action; or
(iv) any admissions made by the party
making the discovery affidavit; or
(v) the nature of the case or the
documents in issue.
See
Continental Ore v Highveld
Steel and Vanadium
(supra at 597H-598A);
Schlesinger v
Donaldson
(supra at 56);
Lenz Township Co (Pty) Ltd v Munnick
and Others
1959 (4) SA 567
(T) at 573D-F;
Federal Wine
and Brandy Co Limited v Kantor
(supra at 749G-H).’
[21] The plaintiffs argue
that the documents sought in items 4, 5, 6, 7, 8, 10, 11 and 12 of
the first notice in terms of rule 35(3)
would establish the capacity
in which the defendant arranged the relevant trips for the
plaintiffs; whether the defendant engaged
with the service providers
in his own capacity, as agent for the plaintiffs or on behalf of or
through any other entity.
The account transactions in respect
of the bank account transactions required to be produced in item 9 of
the first notice in terms
of rule 35(3), so argue the plaintiffs,
‘will show how and by whom the applicants’ funds were
used’, which ‘has
a direct bearing on the question of the
identity of the party with whom the applicants had a legal
relationship, and the terms
of that relationship.’ They
argue that the identities of the parties to the non-disclosure
agreement required in item
17 of the first notice in terms of rule
35(3) and the terms of those agreements ‘speak centrally to the
relationship among
the applicants, the respondent and each of the
service providers’.
[22] The documents which
establish the defendant’s income as declared to the revenue
collecting authorities, the source of
his income and the expenditure
incurred by the defendant requested in items 2, 3 and 4 of the second
notice in terms of rule 35(3),
so argue the plaintiffs, ‘would
show where the respondent derived his income and what effect the
relevant trips (and any
profit thereon) had on such income’.
They further argue that ‘[t]he documents underlying those
returns are not
only needed to test the veracity of the returns, but
more importantly to establish in what capacity the respondent acted
at what
time’. All income tax returns, other tax forms,
returns and supporting documents used to calculate the income of the
PTA entities required in items 5 and 6 of the second notice in terms
of rule 35(3), so argue the plaintiffs, are also relevant
since ‘the
income and expenditure pertaining to the relevant trips would only be
reflected in those entities’ books
and documentation’ if
the defendant’s principal contention that the plaintiffs’
legal relationship was with the
PTA entities, is correct.
[23]
The defendant’s objection that the documents sought to be
discovered are not relevant, however, is premised thereon that
they
will only serve to advance his own case and do not support the
plaintiffs’ claim nor do they undermine his defence.
The
test for relevance was thus stated in
Swissborough
,
at p 316E-317B:
‘
The
requirement of relevance, embodied in both Rule 35(1) and 35(3), has
been considered by the Courts on various occasions.
The test
for relevance, as laid down by Brett LJ in
Compagnie
Financiere et Commerciale du E Pacifique v Peruvian Guano Co
(1882)
11 QBD 55
, has often been accepted and applied. See, for
example, the Full Bench judgment in
Rellams
(Pty) Ltd v James Brown & Hamer Ltd
1983 (1) SA 556
(N) at 564A, where it was held that: After remarking
that it was desirable to give a wide interpretation to the words ''a
document
relating to any matter in question in the action'', Brett LJ
stated the principle as follows: ''It seems to me that every document
relates to the matter in question in the action which, it is
reasonable to suppose, contains information which may - not which
must - either directly or indirectly enable the party requiring the
affidavit either to advance his own case or to damage the case
of his
adversary. I have put in the words “either directly or
indirectly” because, as it seems to me, a document
can properly
be said to contain information which may enable the party requiring
the affidavit either to advance his own case or
to damage the case of
his adversary, if it is a document which may fairly lead him to a
train of enquiry which may have either
of these two consequences.''
See also
Continental Ore Construction v
Highveld Steel & Vanadium Corporation Ltd
1971
(4) SA 589
(W) at 596H and
Carpede v
Choene NO and Another
1986 (3) SA 445
(O) at 452C-J.
Counsel for the plaintiffs laid
special emphasis on the indirect relevance a document may have, that
is a document which may
fairly lead him to a chain of enquiry
which may advance the plaintiffs' case or damage the case of the
first defendant. Reference
was made hereto as “indirect
relevance” or “secondary relevance”.
The broad meaning ascribed to
relevance is circumscribed by the requirement in both subrules (1)
and (3) of Rule 35 that the document
or tape recording relates to
(35(1)) or may be relevant to (35(3)) “any matter in question”.
The “matter in question”
is determined from the
pleadings. See in this regard
SA Neon Advertising (Pty) Ltd v
Claude Neon Lights (SA) Ltd
1968 (3) SA 381
(W) at 385A-C;
Schlesinger v Donaldson and Another
1929 WLD 54
at 57, where
Greenberg J held
“
In order to decide the question
of relevancy, the issues raised by the pleadings must be considered .
. .”,
and
Federal Wine and Brandy Co Ltd
v Kantor
1958 (4) SA 735
(E) at 753D-G.’
[24] In his answering
affidavit, the defendant states:
‘
9. I have
always denied, and I still deny, that I have ever concluded any
agreement with either of the applicants in my personal
capacity.
I have maintained throughout the course of the litigation that the
applicants concluded contracts firstly with
Passage to Africa (a
private company that was registered and incorporated in the Republic
of Mauritius) (“
Passage to
Africa”)
and later with Lebombo
Safaris (a partnership) and that I only ever dealt with the
applicants in my capacity as a representative
of these businesses.’
[25] And the defendant
continues to state the following:
36. For the sake of avoidance of any
doubt, and as I have already stated under oath in my answering
affidavit:
36.1 I have never concluded any
agreement with the applicants;
36.2 I have not received additional
monies from Passage to Africa (or from Lebombo Safaris after May
2013), or from any service
providers for that matter, as a result of
being in charge of and/or arranging the applicants’ African
expeditions and safaris
that were booked through Passage to Africa
(or Lebombo safaris after May 2013);
36.3 I have never received any private
commissions or secret profits as a result of being in charge of
and/or arranging the applicants’
African expeditions and
safaris that were booked through Passage to Africa (or Lebombo
Safaris after May 2013);
36.4 all of the applicants’
expeditions and safaris were arranged by the applicants through
Passage to Africa (and Lebombo
Safaris after May 2013);
36.5 every one of the payments that
was made by the applicants, up and until May 2013, was made to
Passage to Africa. After
May 2013 all payments that were made
by the applicants in respect of their African safaris were made to
Lebombo Safaris.
In fact, even the applicants’ own
internal records reflect the ‘vendor’ to which payments
were made as “Passage
to Africa”;
36.6 the suppliers’ invoices
relating to the expenses incurred in relation to the applicants’
African expeditions and
safaris were made out to Passage to Africa;
36.7 all the payments to suppliers and
for expenses related to the applicants’ African expeditions and
safaris (such as accommodation,
fuel, helicopter and airplane
charter, etc.) were made by Passage to Africa (and post May 2013 by
Lebombo Safaris);
36.8 all the profits that were made in
respect of the applicants’ African expeditions and safaris
accrued to Passage to Africa
(and after May 2013 to Lebombo
Safaris).”
[26] Furthermore, the
defendant states that the plaintiffs (by means of subpoenas
duces
tecum
issued to various entities all over Africa that were
contracted between the period 2011 to 2014 to render services to the
plaintiffs
on their African expeditions and safaris) have come into
possession of hundreds of documents (two lever arch files), almost
all
of which clearly demonstrate that Ms Nicky Williams, an employee
of the PTA entities, communicated with the third party service
providers and booked the relevant services for the applicants and
that the third party service providers rendered invoices relating
to
the plaintiffs’ African expeditions and safaris to the PTA
entities and not to him. The defendant’s unchallenged
evidence is that those documents demonstrate that he, in his personal
capacity, never contracted with any service provider that
rendered
any services to the plaintiffs during any of their African
expeditions and safaris; almost all correspondence relating
to
the plaintiffs’ African expeditions and safaris that were
booked by the plaintiffs through the PTA entities were between
the
service providers and Ms Williams; PTA’s name appears on
various email correspondence between employees of the
PTA entities
and service providers; invoices were made out by the various
service providers to the PTA entities; and
the plaintiffs’
names appear as the client on various invoices that were made out to
the PTA entities.
[27] As far as the
requested documents is concerned, the defendant states on oath that
the goods and services were provided
by the relevant service
providers ‘in consequence of arrangements that were made with
them by either Passage to Africa or
Lebombo Safaris’; that the
invoices, receipts, quotations, or other financial documentation
provided by the service providers
as requested in item 5 of the first
notice in terms of rule 35(3) were provided by the relevant third
party entities to the PTA
entities; that agreements were
concluded between the PTA entities and the relevant third party
service providers and that
no agreement or memorandum of
understanding between himself and the PTA entities were concluded and
therefore does not exist;
that all documents recording,
referring to and/or explaining any credits, rebates, discounts,
compensation, deposits, commissions
or other benefits or fees,
refunds and/or cancellations which related to, were applied or were
applicable in respect of one or
more of the relevant trips were
provided by the third party service providers to the PTA entities
and/or by the PTA entities to
the plaintiffs; that the bank
statements and application of funds that are sought relate to the
bank account that was utilised
by the PTA entities; that
non-disclosure agreements were concluded between the PTA entities and
the relevant third party
operators/suppliers and that he never
concluded any non-disclosure agreement with any of the relevant
operators/suppliers in his
personal capacity and for this reason no
such agreement exists; and that none of the income that he declared
to the South African
revenue Service was derived from the plaintiffs’
expeditions and safaris and the documents requested are not relevant.
[28] The plaintiffs did
not depose to their founding and replying affidavits in this
interlocutory application. The affidavit
evidence of the
defendant is not and could not be refuted by the deponent to the
plaintiffs’ founding and replying affidavits,
Mr Michael-John
Spargo, who is an attorney practicing as an associate at the
plaintiffs’ attorneys of record. It is
correct, as the
plaintiffs contend, that the basis of their interlocutory application
is an analysis of the pleadings to determine
what the issues are
between the parties, an analysis of the type of documents sought, and
‘the likelihood of whether such
documents will speak to the
issues’. But Mr Spargo is in no position to dispute the
defendant’s evidence relating
to the contents of the documents,
in other words that they do not support the plaintiffs’ claim
or undermine the defendant’s
defence.
[29]
I am not reasonably satisfied that the defendant’s denial of
relevancy is incorrect and I am unable to hold that it is
reasonable
to suppose that the required documents contain information which may
either directly or indirectly enable the plaintiffs
to advance their
own case or damage the defendant’s case. A probability
has not been shown to exist that the defendant
is either mistaken or
false in his assertion of irrelevance. The only documents that
are not included in this finding are
the emails ‘on record’
sought in terms of item 13 of the plaintiff’s first notice in
terms of rule 35(3) dated
13 May 2016 and the tax-related
documentation sought in terms of item 4 of the plaintiffs’
second notice in terms of rule
35(3) dated 22 June 2016.
[30] The plaintiffs have
requested the defendant to furnish to them all documents which
establish his income as declared to the
revenue collecting
authorities, the source of his income and the expenditure incurred by
him for the period 2009 to 2014.
He refused to deliver these
documents, claiming that they are irrelevant and, in any event, not
in his possession and he is unaware
of their whereabouts. In
this regard he states:
‘
155.
. . . None of the income that I declared to the South African
Revenue Service was derived from the applicants’
expeditions
and safaris and the documents, if they exist, would therefore not be
relevant. . . .
156. In any event, and as I have
stated in my response to the applicants’ request, the
requisitioned documents are not in
my possession or under my control
and I do not know in whose possession or control they would be.
I must have had the documents
in my possession when I completed the
tax returns. I have searched everywhere and I simply cannot
locate any of these documents.
I assume that most of these
documents were kept on my computer, which computer crashed in 2015 as
a result of which the hard drive
had to be replaced.
157. Lastly, as my earnings did not
exceed the threshold that was determined by the South African Revenue
Service at the time (which
if I recall correctly was R750 000-00 per
annum) I was not required to register for VAT. For this reason
no VAT returns or
any documents that usually relate to VAT returns
exist.’
[31] The plaintiffs also
required production of ‘[a]ll e-mails “on record”
where the defendant requested any party
to “channel all travel
requests associated with Paul or Jody’s travel through the
Defendant”, as appears on page
1 of “PA63” to the
founding affidavit (page 168 of the paginated motion bundle)’.
The e-mails requested
here are emails to which the defendant referred
to in his email of 16 April 2014 to the second defendant’s Mr
Bill Benack.
Therein the defendant stated that he made
‘repeated’ requests to channel all travel arrangements in
respect of the
plaintiff and his sister through him, and that there
are ‘[e]mails to this effect … on record’.
The defendant
states that he has disclosed all the documents which he
has in his possession or under his control, and that he is not aware
in
whose possession or under whose control further documents falling
within this category may be located.
[32]
An affidavit of discovery is generally taken as conclusive against
the party seeking further discovery in respect of the possession
of
documents. In
Richardson’s
Woolwasheries Ltd v Minister of Agriculture
1971
(4) SA 62
(E) at 67D-F, Kannemeyer J said the following:
‘
After a review of the
authorities, O’HAGAN, J., said in
Marais v. Lombard,
1958
(4) SA 224
at p. 227 –
“
What these cases establish, in
my view, is that when a party making discovery has sworn on affidavit
as to the irrelevancy of certain
documents, the Court will not reject
that affidavit unless a probability is shown to exist that the
deponent is either mistaken
or false in his assertion . . . The
sources from which the Court may infer that a discovery affidavit is
wanting in the respects
mentioned, has been referred to in
Schlesinger v Donaldson and Another,
1929 W.L.D. 54
, as being
the pleadings in the action, the discovery affidavit itself, the
documents referred to in such affidavit as well as admissions
of the
party evidenced elsewhere.”
In my view this approach is also
applicable when the possession as opposed to the relevance of a
document is in issue.’
[33]
Having regard to the admissible sources, I am not persuaded that a
probability has been shown to exist that the defendant is
either
mistaken or false in his assertions that
the
category of documents that underlie and support his tax returns
and the emails ‘on record’ are no longer in
his possession and their whereabouts unknown to him. The
defendant’s
discovery affidavit must, therefore, be taken as
conclusive as to the possession of these documents.
[34]
I now turn to prayer 2 of the plaintiffs’ notice of motion in
this interlocutory application in which they seek an
order,
in terms of rule 21(4) of the Uniform Rules of Court, compelling the
defendant ‘to deliver an adequate reply to paragraphs
2.4 to
2.8 and 2.9.1’ of their ‘request for admissions sought
and further particulars for trial dated 27 May 2016’.
Rule 21(2) in its presently relevant part provides as follows:
‘
After the
close of pleadings any party may, not less than twenty days before
trial, deliver a notice requesting only such further
particulars as
are
strictly necessary to enable him to
prepare for trial
.’
(Emphasis added.)
[35] Erasmus
Superior
Court Practice
at D1-252 states, and this is settled law, that-
‘
[t]he
purpose of permitting a party to call for further particulars for
trial is (a) to prevent surprise; (b) that the parties should
be told
with greater precision what the other party is going to prove in
order to enable his opponent to prepare his case to combat
counter
allegations; and (c) having regard to the aforegoing nevertheless not
to tie the other party down and limit his case unfairly
at the
trial.’
[36] The plaintiffs have,
in paragraphs 2.4 to 2.8 of the request for further particulars,
requested particulars pertaining to the
defendant’s role in
negotiating and concluding agreements with ultimate providers of
goods and services for purposes of the
relevant trips, the identity
and role of any other entities involved in that process, the
calculation of costs pertaining to the
relevant trips (and whether
any profit was made and by whom), and whose funds were used to fund
the relevant trips. The defendant
refused to furnish these
requested particulars on the grounds that the requested particulars
relate to admissions, are not strictly
necessary to enable the
plaintiffs to prepare for trial and/or are unrelated to the issues as
defined in the pleadings.
[37] The particulars
requested in terms of paragraphs 2.4 to 2.8 of the request for
further particulars relate to paragraph 7 of
the defendant’s
plea, which, in turn, is his response to paragraph 9.1 of the
plaintiffs’ declaration, wherein the
plaintiffs made the
following averments:
‘
Prior to any
payments by the plaintiffs, Kirkinis emailed the plaintiffs a final
itinerary/breakdown of costs, which reflected the
costs of the trip.’
In paragraph 7 of his
plea, the defendant responded as follows:
‘
Save to
state that it was
either
the defendant
or
Nicky Williams who sent the e-mails reflecting the
quotations
for the plaintiffs’ trips in relation to the trips, the
remainder of the content of this paragraph is admitted.’
[38] The plaintiffs
contend that the requested particulars in those paragraphs of the
request for further particulars ‘are
all directly relevant to
the issues in dispute as they speak to the capacity in which each
entity involved in relation to the relevant
trips acted and whether
the respondent acted in his own capacity, on behalf of the applicants
or on behalf of another entity’
and that they ‘are
strictly necessary for the purposes of preparing for trial’.
[39] The particulars
requested by the plaintiffs, in my view, are not strictly necessary
to enable them to prepare for trial on
the narrow factual issue
raised in paragraph 9.1 of the declaration read with paragraph 7 of
the plea. The defendant admits
the plaintiffs’ allegation
that prior to any payments by the plaintiffs, a final
itinerary/breakdown of costs, which reflected
the costs of the trip,
was e-mailed to the plaintiffs. The only issue is whether the
defendant e-mailed the itinerary/breakdown
to the plaintiffs, as they
allege, or whether it was either the defendant or Nicky Williams who
had sent the e-mails, as the defendant
alleges.
[40] The plaintiffs have,
in paragraph 2.9.1 of the request for further particulars, requested
particulars pertaining to the bank
account operated by the defendant
during the period 2010 to 2014. The defendant refused to
provide the further particulars
on the grounds that they are
requested in respect of a bare denial, are not strictly necessary to
enable the plaintiffs to prepare
for trial and/or are unrelated to
the issues as defined in the pleadings.
[41]
The particulars requested in terms of paragraph 2.9.1 of the request
for further particulars relate to paragraph 9 of the defendant’s
plea, which in turn is his response to paragraph 9.3 of the
plaintiffs’ declaration, wherein the plaintiffs made the
following
averments:
‘
Once an
itinerary had been accepted by the plaintiffs, and Kirkinis had put
into place the necessary arrangements, he would request,
where
necessary, an up-front payment from the plaintiffs, either as a
payment in full or for payment of a deposit, and would thereby
secure
the relevant services. The amount requested would be deposited
by the plaintiffs into Kirkinis’ nominated bank
account.’
In paragraph 9 of his
plea, the defendant responded as follows:
‘
9.1 It is
denied that any monies were ever deposited by the plaintiffs into the
defendant’s nominated bank account.
9.2 The defendant
admits that he and/or Nicky Williams requested the plaintiffs to make
payment of the costs-to-plaintiffs in respect
of quotations that had
been accepted by the plaintiffs, into the nominated bank account of
Passage to Africa (Pty) Ltd or Lebombo
Safaris, depending on which of
these entities organised the trip in question.
9.3 The remainder
of the contents of this paragraph is denied.’
[42] The plaintiffs deny
that the requested particulars in that paragraph of the request for
further particulars relate to a bare
denial and they contend that the
requested particulars-
‘
. . . simply
seek information about an issue which is within the exclusive purview
of the respondent, and which issue bears directly
on the action.
The applicants are not aware of any bank accounts used by the
respondent, other than the bank account stipulated
in para 21 of the
response to the request for further particulars. The applicants
must be allowed to investigate the respondent’s
(and the PTA
entities’) sources of income and to trace funds which he may
have received pertaining to the relevant trips.
This the
applicants cannot do as they have not been furnished with information
pertaining to the respondent’s (and the PTA
entities’)
other bank accounts as sought above.’
[43] The particulars
requested by the plaintiffs pertaining to the bank account operated
by the defendant during the period 2010
to 2014, in my view, are also
not strictly necessary to enable them to prepare for trial on the
factual issues raised in paragraph
9.3 of the declaration read with
paragraph 9 of the plea. The plaintiff requested the defendant
to furnish full details of
the nominated bank accounts of Passage to
Africa and Lebombo Safaris referred to in paragraph 9 of his plea,
which further particulars
the defendant provided in paragraph 21 of
his reply to the plaintiffs’ request for further particulars.
The defendant’s
allegations, in paragraph 186 of his answering
affidavit, that the plaintiffs ‘. . . are fully aware of the
fact (and it
is within their personal knowledge) that they only ever
made payments for the African expeditions and safaris, into the bank
account
which details appear at paragraph 21 of [his] reply to the
applicants’ request for further particulars’, are
undisputed.
The relevant issue, for present purposes, raised in
paragraph 9.3 of the declaration read with paragraph 9 of the plea,
is therefore
whether the account referred to in paragraph 21 of the
defendant’s reply to the plaintiffs’ request for further
particulars,
was the defendant’s ‘nominated account’
during the period 2010 to 2014, as is alleged by the plaintiffs, or
that
‘of Passage to Africa (Pty) Ltd or Lebombo Safaris,
depending on which of these entities organised the trip in question’,
as is alleged by the defendant.
[44]
Finally, the counter-application. It is common cause that
Messrs
Dave Stewart and Kevin Hamilton,
the plaintiffs’ legal counsel at the time, met with the
defendant at his home in France on
17 and 18 August 2013. They
consulted with him as a witness in relation to pending litigation in
which the plaintiffs and
the first plaintiff’s sister, Ms Jody
Allen, were involved in the United States of America, which
litigation is unrelated
to the pending action between the plaintiffs
and the defendants. The documents which the defendant seeks the
production of,
relate to those consultations which Messrs Stewart and
Hamilton conducted with him
.
The defendant testified in those unrelated arbitration proceedings
via teleconference on 6 September 2013.
[45] The defendant seeks
to explain the relevance of the consultation notes and other
documents by first explaining his understanding
of the case against
the plaintiffs and Ms Allen. In his founding affidavit in the
counter-application, he states that he
was requested by the second
defendant’s in-house counsel, Mr Stewart, to give evidence on
behalf of the plaintiffs and Ms
Allan in arbitration proceedings
involving them and a certain Ms Traci Turner (the Turner
arbitration). He states that he
was told that Ms Turner’s
attorneys would focus on his relationship with the plaintiffs and Ms
Allan in order to create the
impression of bias on his part.
Much of the preparation for his testimony, according to him, and the
notes of those consultations
that were copiously taken by the
lawyers, focused on ‘the exact nature of [his] relationship
with the [plaintiffs] and Jody’.
He states that he was
required to satisfy the legal representatives of the plaintiffs and
Ms Allen that he was not and never had
been in their employ, nor had
he ever acted as their agent and that he, at all relevant times, had
been dealing with them as a
representative of Passage to Africa and
Lebombo Safaris, through which businesses the plaintiffs booked their
African expeditions
and safaris.
[46] The plaintiffs, in
their answering affidavit deposed to by their in-house counsel, Mr
Stewart, deny that the defendant was
ever a witness, nor anticipated
to be one, in relation to the Turner arbitration in respect of which
proceedings he seeks the disclosure
of documents. He was not
deposed, and did not give evidence at the Turner arbitration.
There were no consultations
attended by Messrs Stewart and Hamilton
with the defendant in relation to that arbitration, and the role of
the defendant in organising
the relevant trips was never an issue in
that arbitration nor was it discussed with the defendant. Mr
Stewart admits that
some notes were taken at the consultations with
the defendant on 17 and 18 August 2013, but denies that they were
copious or that
they will demonstrate that the plaintiffs and Ms
Allen were at all times aware of the fact that he was not their agent
and that
the expeditions were arranged through Passage to Africa and
Lebombo Safaris.
[47]
The plaintiffs in their answering affidavit refuted the defendant’s
version set out in his founding affidavit.
His version in his
founding affidavit simply does not accord with the objective facts
that were presented in the answering affidavit,
such as the interim
and final arbitration awards and the court order confirming the
arbitration award. Ms Turner was a former
employee of the
second plaintiff. She asserted employment-related claims in two
separate lawsuits against the second plaintiff,
the first on 26
September 2011 and the second on 27 January 2012. In both
lawsuits filed by Ms Turner, the court granted
the second plaintiff’s
motion to compel arbitration and stayed the litigation pending
resolution of her claims in the arbitration
proceedings in which
evidence was heard on 26 November 2012. The defendant was not
called to testify. The interim award
on the merits was handed
down on 21 December 2012. A final arbitration award was
rendered on 7 March 2013, which confirmed
the findings of the interim
award. The costs order in the final arbitration award was later
amended, on 30 June 2014, but
no further hearings on the merits, or
any other issue took place after March 2013, which precedes the dates
of the consultation
with the defendant
at
his home in France on 17 and 18 August 2013.
[48]
Mr Stewart states in the plaintiffs’
answering affidavit that the consultations which he and Mr Hamilton
held with the defendant
on 17 and 18 August 2013 related to a
different arbitration, being an arbitration instituted against the
plaintiffs and Ms Allen
by one Mr RoseHaley, also a former employee
of the second plaintiff. Those consultations, he states, were
unconnected with
any one of the issues which the defendant raises in
his counter-application. In that arbitration, the centrality of
the bias
concerns, and the characterisation of the defendant’s
role as being merely a remote representative of a service
provider,
was, it is undisputed,
not an issue. In reply, the defendant states that if he had
been testifying in the RoseHaley arbitration,
rather than the Turner
arbitration, the issue of his relationship with the plaintiffs, Ms
Allen, Passage to Africa, and Lebombo
Safaris could not possibly have
been relevant.
[49] But, states the
defendant, the first plaintiff and the plaintiffs’ legal team
always led him to believe that he was required
in litigation that was
initiated by Ms Turner, and in fact, the first plaintiff, Ms Allen
and the plaintiffs’ legal team
expressly told him that he would
be testifying in the case that was instituted by Ms Turner. He
states that he was never
aware nor expressly otherwise told by the
first plaintiff, Ms Allen and the plaintiffs’ legal team that
he testified in the
case that was instituted by Mr RoseHaley.
He never met Mr RoseHaley and he does not know ‘who this person
is’.
He further states:
The only reasonable explanation for
the respondents’ version (namely that I could not have
testified in the Turner matter
as the evidence therein had been
concluded by December 2012) is that the arbitrations that are
referred to in the answering affidavit
were not the only legal
proceedings
between the respondents and Turner.’
[50] I permitted the
plaintiffs to file a supplementary affidavit to deal with the new
matter – particularly that the plaintiffs,
Ms Allen and the
plaintiffs’ legal team misled the defendant as to which matter
he was testifying in and the insinuation
that they misled this court
by only addressing one of the arbitrations in which Ms Turner was
involved - raised by the defendant
in reply. In the
supplementary affidavit Mr Stewart reiterates that the final
arbitration award had already been issued in
the Turner arbitration
prior to August 2013 and he further states that ‘there were no
other proceedings in respect of Ms
Turner, contrary to [the
defendant’s] speculations and conjecture’.
[51] The defendant’s
version that he never knew he was being prepared for the RoseHaley
arbitration, was unaware that he gave
any evidence therein, and was
told by the defendants, Ms Allen and their legal team that he was
required to testify in the Turner
arbitration, is also not credible.
Days after the consultation on 17 and 18 August 2013, the defendant
was informed by Mr
Hamilton, in an email on 29 August 2013, that:
‘
It is now
looking that we would need you to appear by video conference for the
RoseHaley arbitration on Friday, August 6.’
In his responding email
dated 29 August 2013, the defendant confirmed:
‘
That’s
fine for me for 6 September.’
(The reference in Mr
Hamilton’s email to ‘August 6’ should have been a
reference to ‘September 6’,
and it appears that that is
how the defendant understood it.)
[52] Further emails were
exchanged among Messrs Hamilton, Stewart and the defendant from 3 to
5 September 2013,
inter alia
arranging and re-arranging the
time when he would testify. The defendant testified by video
conference on Friday, 6 September
2013. Later that same day, Mr
Stewart sent an email to the defendant, saying:
‘
Mike,
Sorry about the moving schedule, but
it went well from the courtroom. You were pitch perfect.
Apologies to Andrea [the defendant’s
wife] for messing up any dinner or evening plans.
Dave’.
The defendant replied:
‘
Please don’t
apologise Dave. We’re still heading out now, it takes
more than Rose-Hayley to mess up my dinner
plans!
. . .
Mike’.
[53]
It cannot be said that the version put up by the plaintiffs in the
counter-application is ‘far-fetched or clearly untenable’
nor am I satisfied ‘as to the inherent credibility’ of
the defendant’s factual averments on the disputed issues.
(See
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 635A-C.) On the contrary, I am of the view
that the plaintiffs have refuted the defendant’s factual
averments
on the disputed issues in the counter-application. I
am not satisfied that the plaintiffs’ denial of relevancy is
incorrect.
A probability has not been shown to exist that the
plaintiffs are either mistaken or false in their assertion of
irrelevance.
[54] I am, however, for
the reasons that follow, of the view that legal professional
privilege attaches to the content of the consultations
which were
held between the second plaintiffs’ lawyers and the defendant
on 17 and 18 August 2013 and to the consultation
notes made at the
consultations. I nevertheless dealt fairly extensively with the
factual disputes that have arisen on the
papers in the
counter-application in connection with the plaintiffs’ denial
of relevancy, in the light of the plaintiffs’
request that a
punitive costs order be made against the defendant. The
defendant has made serious and scandalous allegations
against the
plaintiffs, Ms Allen and the plaintiffs’ lawyers, which
allegations have been refuted and proved to be unfounded.
The
defendant’s conduct, in my view, is deserving of judicial
censure through the imposition of a punitive costs order.
[55] Legal professional
privilege has two components; litigation privilege and legal advice
privilege. In
Competion Commission v Arcelormittal South
Africa Ltd and Others
2013 (5) SA 538
(SCA), Cachalia JA said the
following about the established requirements of litigation privilege,
with which we too are concerned
in this case:
‘
[20]
Litigation privilege is one of two components of legal professional
privilege, the other being the privilege that attaches
to
communications between a client and his attorney for the purpose of
obtaining and giving legal advice. Litigation privilege,
with
which we are concerned in this case, protects communications between
a litigant or his legal adviser and third parties, if
such
communications are made for the purpose of pending or contemplated
litigation. It applies typically to witness statements
prepared
at a litigant’s instance for this purpose. The privilege
belongs to the litigant, not the witness, and may
be waived only by
the litigant.
[21] Litigation privilege has
two established requirements: The first is that the document
must have been obtained or
brought into existence for the purpose of
a litigant’s submission to a legal adviser for legal advice;
and second that litigation
was pending or contemplated as likely at
the time.’
(Footnotes omitted.)
[56] It is common cause
that the consultation notes meet the two requirements for legal
privilege. But, argues the defendant,
the plaintiffs could only
have claimed litigation privilege in the litigation that gave rise to
the consultation notes and only
during the time when that litigation
was ongoing. Although legal advice privilege endures
indefinitely, so the argument
continues, litigation privilege does
not enjoy indefinite duration and comes to an end upon the
termination of the litigation that
gave rise to the privilege.
The defendant finds support for his contentions in the judgment of
the Supreme Court of Canada
in
Blank v Canada (Minister of
Justice)
[2006] 2 S.C.R. 319
,
2006 SCC 39
and in the judgment of
the Irish Commercial Court in
University College Cork –
National University of Ireland v Electricity Supply Board
[2014]
IECH 135.
[57] The Supreme Court of
Canada in
Blank
considered
inter alia
the distinction
between solicitor-client privilege and litigation privilege.
The conclusions of Fish J, who wrote the majority
judgment, are thus
concisely summarised in the headnote to that judgment:
‘
The
litigation privilege and the solicitor-client privilege are driven by
different policy considerations and generate different
legal
consequences. Litigation privilege is not directed at, still
less, restricted to, communications between solicitor
and client.
It contemplates, as well, communications between a solicitor and
third parties or, in the case of an unrepresented
litigant, between
the litigant and third parties. The purpose of the litigation
privilege is to create a zone of privacy
in relation to pending or
apprehended litigation. The common law litigation privilege
comes to an end, absent closely related
proceedings, upon the
termination of the litigation that gave rise to the privilege.
Unlike the solicitor-client privilege,
it is neither absolute in
scope nor permanent in duration. The privilege may retain its
purpose and its effect where litigation
that gave rise to the
privilege has ended, but related litigation remains pending or may
reasonably be apprehended. This
enlarged definition of
litigation includes separate proceedings that involve the same or
related parties and arise from the same
or a related cause of action
or juridical source. Proceedings that raise issues common to
the initial action and share its
essential purpose would qualify as
well.’
[58] The conclusion of
the minority judgment, written by Bastarache J, as summarised in the
headnote, is that-
‘
. . .
litigation privilege has always been considered a branch of
solicitor-client privilege. The two-branches approach to
solicitor-client privilege should subsist, even accepting that
solicitor-client privilege and litigation privilege have distinct
rationales.
[59] Although recognising
that it remains the position in England and Wales that litigation
privilege automatically lasts forever
(para 40), Ms Justice Finlay
Geoghegan in
University College Cork
found the analysis,
reasoning and conclusion of the Supreme Court of Canada in
Blank
in the majority judgment of Fish J ‘in relation, in
particular, to the distinctions in the purpose of legal advice
privilege
and litigation privilege . . . convincing and consistent
with the judgments of [Ireland’s] Supreme Court in
Smurfit
Paribas
[[1990]
1 I.R. 469]
’. She concluded thus:
’
46.
Applying the principles set out above to litigation privilege, it
appears to me that the objective of litigation privilege,
which is
“in the public interest in the proper conduct of the
administration of justice”, is the creation of what has
been
referred to as a “zone of privacy” in the interests of
the efficacy of the adversarial system to permit a party
in
litigation to prepare its position without adversarial interference
and without fear of premature disclosure. In current
litigation
procedures, there may come a time in advance of the actual trial
where disclosure is required. In other instances,
disclosure
may not occur in the course of the litigation
e.g.
if the action settles prior to trial. However, as the objective
purpose is to give a party the opportunity to properly prepare
its
case without premature disclosure or interference from the opposing
party, it appears to me that such objective purpose does
not require
such privilege to automatically continue beyond the final
determination of either that litigation or, as has been identified
by
the Supreme Court of Canada in
Blank
,
closely related litigation. Where the second proceedings are
not closely related to the first proceedings, there is no objective
of the proper conduct of the administration of justice which can be
said to outweigh the disadvantage arising from the restriction
of
disclosure of all the facts.’
[60] In our jurisprudence
litigation privilege and legal advice privilege are viewed as the two
branches or ‘components’
of legal professional
privilege. As was recognised in the majority and minority
judgments in
Blank
, paras 31 and 71,
‘
[t]hough
conceptually distinct, litigation privilege and legal advice
privilege serve a common cause: The secure and effective
administration of justice according to law. And they are
complimentary and not competing in their operation.’
For my part I find the
distinction in duration of preserving the confidentiality of
communications between a client and his legal
adviser made between
legal advice privilege and litigation privilege to be somewhat
artificial. Limiting litigation privilege
not to continue
beyond the final determination of the litigation from which the
privilege arose or closely related litigation erodes
the right of a
client to consult freely with his or her legal adviser by clients as
much as any limitation in duration would have
eroded that policy in
the case of legal advice privilege.
[61] As was stated by Du
Plessis J in
Bogoshi v Van Vuuren NO and Others; Bogoshi and
Another v Director, Office for Serious Economic Offences, and Others
1993 (3) SA 953
(T), at 959H-960B:
The privilege between a client and his
legal adviser, which is the privilege presently at issue, has in the
past been regarded as
an evidentiary rule. (See
Andresen v
Minister of Justice
1954 (2) SA 473
(W); see also the
obiter
dictum
in
Mandela v Minister of Prisons
1983 (1) SA 938
(A) at 962H.) In
S v Safatsa and Others
1988 (1) SA 868
(A) at 878G and further, the Appellate Division considered the nature
of professional privilege. At 885 and 886 Botha JA
quoted with
express approval from the judgment of the High Court of Australia in
Baker v Campbell
[1983] HCA 39
;
(1983) 49 ALR 385.
One of the passages
thus quoted refers to professional privilege as ‘a mere
manifestation of a fundamental principle
upon which our judicial
system is based’. Another such passage reads that the
‘
privilege
extends beyond communications made for the purpose of litigation to
all communications made for the purpose of giving
or receiving
advice
and this extension of the principle makes it inappropriate to regard
the doctrine as a mere rule of evidence. It is
a doctrine which
is based upon the view that confidentiality is necessary
for
proper functioning of the legal system and not merely the proper
conduct of particular litigation.
(The italics are mine.) The
Appellate Division thus accepted that legal privilege is a right
necessary for the proper functioning
of our adversary system as a
opposed to a mere evidentiary principle.’
[62]
The application of the rule ‘once privileged always privileged’
to legal professional privilege,
is
as much part of our law as it is of English law. It contains no
limitations, except, perhaps, where the rule is invoked
as
justification for the infringement of a fundamental right (see
Khala
v Minister of Safety and Security
1994
(4) SA 218
(W), at 230F-G;
Qozeleni
v Minister of Law and Order and Another
1994
(3) SA 625
(E), at 642I-644J), which is not presently at issue.
[63] I find
Euroshipping
Corporation of Monrovia v Minister of Agricultural Economics and
Marketing and Others
1979 (1) SA 637
(C) to be instructive on the
nature of legal professional privilege. Friedman J said the
following (at 643H-644G):
‘
It is
important, therefore, that the protection which privilege affords
should be applied strictly in accordance with the conditions
necessary for the establishment of privilege. It is equally
important, however, that inroads should not be made into a right
of a
client to consult freely with his legal adviser, without fear that
his confidential communications to the latter will not
be kept
secret. As
Wigmore
states (vol VIII para 2291):
“
The policy
of the privilege has been plainly grounded, since the latter part of
the 1700s, on subjective considerations. In
order to promote
freedom of consultation of legal advisers, the apprehension of
compelled disclosure by the legal advisers must
be removed; and hence
the law must prohibit such disclosure except on the client’s
consent.”
The necessity for preserving the
confidentiality of communications between a client and his legal
adviser has never been questioned
in this country. To impose
qualifications on the rule “once privileged always privileged”
would, in my judgment,
create an unwarranted inroad upon this
fundamental right of a client. A client who consults his legal
adviser in regard to
contemplated legal proceedings, is entitled to
do so confident in the knowledge that his communications with his
legal adviser
will not remain protected from disclosure only in
regard to the litigation concerning which it is made, for, as
Wigmore
states (vol VIII para 2323):
“
. . . there
is no limit of time beyond which the disclosures might not be used to
the detriment of the client or of his estate.
It has therefore
never been questioned, since the domination of the modern theory
(under which privilege does not end with the
ending of the
relationship), that the privilege continues even after the
end
of the litigation or
other occasion for
legal advice, and even after the
death
of the client
.”
Significantly
Wigmore
refers,
in support of this statement, to
Bullock
v Corry
[(1878)
3 QBD 356]
and
Pearce
v Foster
[(1885)
15 QBD 114]
and
states, in a footnote, “The rule is once privileged, always
privileged”. In
Estate
Bliden v Sarif (supra)
[1933 CPD 271]
SUTTON J accepted the principle of “once privileged, always
privileged”, and stated (at 274):
“
The
privilege is for the benefit of the client, and it should not matter
what the nature of the subsequent proceedings is.”
Mr
Knight
invited me to find
that
Estate Bliden v Sarif
had been wrongly decided and to
hold that I was not bound by it. I find it unnecessary to
decide whether, on the facts,
Estate Bliden v Sarif
was
correctly decided or not, as I am satisfied that the rule once
privileged, always privileged is as much part of our law as it
is of
English law. The limitations to the rule suggested by the
authors of Wills on
Evidence
and Phipson on
Evidence
are
not supported by English authority. Our rules relating to
discovery are taken from the English authority.
Our rules relating to discovery are
taken from the English Rules and our Courts are accordingly guided by
the decisions which the
English Courts have given on those Rules.
(See
Goldberg’s
case
supra
at 500.) The
rule as laid down in
Bullock v Corry
and the decisions which
followed it, contains no limitation, and accords fully with the
principles stated by
Wigmore
to form the basis of the rule.
For these reasons I hold to the extent to which the documents in
annexure Z were privileged
in the Conasupa action, they are also
privileged in the present action.’
[64] The consultation
notes, therefore, remain subject to privilege and the plaintiffs are
not obliged to disclose them.
[65] In the result the
following order is made:
(a) The plaintiffs’
interlocutory application dated 25 April 2017, is dismissed with
costs.
(b) The defendant’s
counter interlocutory application dated 11 May 2017, is dismissed
with costs on the scale as between attorney
and own client, including
the costs of two counsel.
P.A. MEYER
JUDGE OF THE HIGH
COURT
Date of hearing: 25 May
2017
Date of judgment: 10
October 2017
Counsel for plaintiffs:
JPV McNally SC (assisted by Z Navsa)
Instructed by: Webber
Wentzel, Johannesburg
Counsel for defendant: J
Mÿburgh
Instructed by: Errol Goss
Attorneys, Parktown North, Johannesburg