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[2021] ZAGPJHC 166
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Hudaco Trading (Pty) Ltd v Apex Superior Quality Parts (Pty) Ltd and Others (12825/2020) [2021] ZAGPJHC 166; [2021] HIPR 167 (GJ) (12 April 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER:
12825/2020
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED
NO
12/04/2020
In
the matter between:
HUDACO
TRADING (PTY)
LTD
APPLICANT
AND
APEX
SUPERIOR QUALITY PARTS (PTY) LTD
1
st
RESPONDENT
CHANTELLE
DANTU
2
nd
RESPONDENT
JUSTIN
STONE
3
rd
RESPONDENT
ZENNET
BARNARD
4
th
RESPONDENT
JUDGMENT
Delivered:
This judgment was handed down
electronically by circulation to the parties’ legal
representatives by e-mail. The date and
time for hand-down is deemed
to be 10h00 on the 12th April 2021.
DIPPENAAR
J
:
[1]
This is the reconsideration on its extended
return date of an Anton Piller order granted
ex
parte
and
in
camera
on 12 June 2020. The applicant
sought confirmation of the rule whereas the respondents sought its
discharge together with a punitive
costs order.
[2]
The application concerns the Partquip
business, acquired by the applicant during 2014, which conducts
business in the aftermarket
replacement automotive parts industry and
is housed in a separate division within the applicant. The applicant
is part of a listed
conglomerate which employees in excess of 400
people with an annual turnover in excess of R700 million. Partquip
specialises in
the import and distribution of a select range of
quality guaranteed aftermarket replacement automotive parts
throughout the Southern
African region including South Africa,
Namibia Botswana and Zimbabwe. Over the past 36 years it had
developed a database containing
in excess of 19 000 active Partquip
part numbers and other relevant information. The applicant based its
application on breaches
of contractual undertakings not to utilise
applicant’s confidential information and protection of its
copyright.
[3]
The first respondent is a new competitor in
the market who also supplies aftermarket replacement parts to motor
vehicles and industrial
bearings. The second respondent, the chief
executive officer of the first respondent, left the employment of the
applicant in 2017.
The third and fourth respondents are employees of
the first respondent, respectively employed as sales and customer
services manager
and sales consultant. They are also previous
employees of the applicant. No contractual restraints of trade were
concluded between
the applicant and the second to fourth respondents.
[4]
The applicant’s case was that the
respondents were individually and collectively unlawfully competing
with the applicant using
its confidential and proprietary information
and were unlawfully infringing its trade secrets and intellectual
property rights.
It produced evidence that the respondents had
utilised an extract of its Original Equipment Manufacturer (“OEM”)
cross
reference database, which it was contended infringed the
applicant’s copyright. The applicant intended to institute
legal
proceedings for
inter alia
interdictory relief, damages and delivery up and destruction in
respect of its intellectual property. Such claims would be based
on
breaches of their contractual confidentiality undertakings, passing
off, unlawful competition and infringement of copyright.
It contended
that the application was aimed at the preservation of evidence
necessary and vital to substantiate its claims against
the
respondents and that the applicant had a real and well-founded
apprehension that the respondents, if given notice of the
proceedings,
may remove or destroy the evidence before it could be
inspected or attached or discovered or utilised, given the
duplicitous conduct
of the respondents.
[5]
The respondents’ case was that it is
a small new start-up business which employs six people, started by
the second respondent
early in 2019 when an international supplier,
Xiamen L& Imp and Co Ltd (“XMLZ”), approached the
second respondent
looking for a distributor in South Africa for its
industrial and automotive loose bearings and bearing kits. The second
respondent
was also approached by another unidentified supplier who
was concerned about the substantial fall off of orders from the
applicant
and was looking for an alternative distribution route into
South Africa. The second respondent saw a business opportunity and
spent
considerable time and effort from the second half of 2019 to
set up the business of the first respondent, which commenced trading
in February 2020. The second respondent particularised all the steps
taken by her to do so, which do not require repetition here.
The
first respondent would focus at least initially, on suspensions,
bearings and mountings which are all high wear and tear items
with a
particularly lucrative market.
[6]
The respondents admitted that they had used
the extract of the OEM cross reference database, which they adapted,
to prepare the
first respondent’s own cross reference database,
which, they contended, differed from that of the applicant in various
respects.
According to the second respondent, the spreadsheet was
deleted thereafter during March 2020 as she recognised it should not
be
used. The applicant’s spreadsheet was contained on a flash
drive of Mr Stone, the third respondent. There is a dispute on
the
papers as to whether Mr Stone had been given an empty flash drive or
one containing the extract from the OEM cross reference
spreadsheet.
[7]
The respondents contended that the
applicant’s numbering system has become an industry standard
and that the information on
that database was readily available, in
the public domain and was not confidential. On this basis it was
argued that the possession
and use of the applicant’s OEM cross
reference spreadsheet did not constitute unlawful competition,
whether springboarding
or otherwise.
[8]
The
respondents further denied that they were unlawfully competing with
the applicant and were entitled to utilise information of
the
automotive industry acquired whilst working for the applicant as it
forms part of their own innate knowledge, is in the public
domain and
is neither confidential nor a trade secret.
[1]
.
It was further argued that there was nothing untoward in the second
to fourth respondents taking up employment with a competitor
of the
applicant as they did not sign any restraint of trade undertakings in
favour of the applicant.
[9]
The respondents’ main grounds of
opposition were that: (i) no proper case was made out for the
granting of the Anton Piller
order, (ii) the order obtained was in
the broadest and vaguest of terms and did not comply with the law and
practice directives;
(iii) the process was abused by the applicant
with the aim of stifling competition between itself and the first
respondent; and
(iv) the execution of the order exceeded the law in
several respects, justifying its discharge.
[10]
The
first dispute between the parties was what applicable test was to be
applied. The respondents contended that on the opposed
return date of
an Anton Piller order, the test of prima facie proof was
inappropriate
[2]
and the
ordinary rules concerning the proof of fact in motion proceedings
apply, thus the so-called Plascon Evans test must be
applied to
resolve factual disputes
[3]
.
[11]
I
however agree with the applicant that the application remains one for
interim relief
[4]
and that upon
reconsideration of the
ex
parte
order
a court must consider whether a prima facie case has been made out on
the basis of all the information before court. The respondents
argued
that, even applying the test pertaining to interim relief
[5]
,
the applicant has not established the requirements for Anton Piller
relief.
[12]
I
turn to consider whether a proper case for Anton Piller relief was
made out and whether it constituted an abuse. It is apposite
to refer
to a few general principles. The requirements of Anton Piller relief
is well settled in our law.
[6]
The applicant must establish that:
(i)
it has
prima
facie
established a cause of action against the respondents which it
intended to pursue; (ii) the respondents have in their possession
documents or things which constituted vital evidence in
substantiation of the applicant’s cause of action (but in
respect
of which the applicant cannot not claim a real or personal
right); and (iii) there is a real and well-founded apprehension that
this evidence might be hidden or destroyed or in some manner be
spirited away by the time the case comes to trial or to the stage
of
discovery.
[13]
An
Anton Piller order is not a form of early discovery, nor is it a
mechanism for a plaintiff to ascertain whether it may have a
cause of
action.
[7]
It is directed at
preserving evidence that would otherwise be lost or destroyed. The
cause of action must already exist and the
preserved evidence must be
identified. I turn to consider the various requirements.
[14]
To
establish a
prima
facie
cause of action, an applicant need do no more than show that there is
evidence, which established would establish a cause of action.
[8]
It was not disputed by the respondents that the applicant established
a
prima
facie
case against them based on a copyright infringement pertaining to the
applicant’s OEM cross reference spreadsheet. The respondents
however disputed that a
prima
facie
case was made for unlawful competition or the other grounds alleged
by the applicant.
[15]
They contended that the deponent to the
applicant’s founding affidavit did not have the necessary
personal knowledge as she
was not a director and was not involved in
the sale of the Partquip business. In my view, this contention lacks
merit.
[16]
The respondents further contended that the
applicant had omitted material information from its founding
affidavit and made misrepresentations
therein as it did not properly
explain or contextualise how the aftermarket spare industry operated
and conflated the OEM cross
reference database with its password
protected catalogue database. The applicant allegedly did not
disclose that its part numbering
system has become an industry
standard or that the design and unique numbering system is
proprietary to the OEM involved and that
the information on the OEM
spreadsheet is readily available and in the public domain.
[17]
There are numerous factual disputes on the
issues surrounding unlawful competition, which are not resoluble on
the papers. Those
disputes will be ventilated in due course in the
proposed legal proceedings between the parties. It would not be
appropriate to
consider the merits of the case at this stage. Suffice
it to state that it cannot at this stage be concluded that the order
should
be discharged on the basis of material non disclosures in its
founding papers as argued by the respondents.
[18]
Considering the concessions made by the
respondents I am persuaded that the applicant has made out a
prima
facie
case and has met the first
requirement for Anton Piller relief.
[19]
The
interplay between the second and third requirements was considered by
the Supreme Court of Appeal in
Vizyia
Corporation Ltd v Collaborit Holdings (Pty) Ltd and Others
[9]
(“Vizyia”),
wherein, Mathopo JA stated the position thus:
“
In
my view identification of vital and specific information is necessary
for the preservation of evidence. Its context cannot be
widened as
Viziya wishes to do. Such information must be measured against what
can be obtained through discovery. If a party can
obtain information
on discovery, then it means that a party does not need an Anton
Piller order, unless it shows that what would
be discoverable would
be concealed or destroyed thereby defeating the purpose of
discovery”.
[20]
Turning to the second requirement
pertaining to specified documents constituting vital evidence, it is
necessary to consider the
order granted. In terms of the
ex
parte
order, the respondents were
directed to grant access to the sheriff and the forensic expert for
the purposes of “
searching the
premises, the vehicles and all electronic equipment on the premises
in order to enable any of the search persons to
identify and point
out to the sheriffs “the Evidence”, being the items
listed in Schedule 1
”.
[21]
Schedule 1 listed the items as being:
“
1
Regardless if the medium on which it appears or the format in which
it appears and in respect of the applicant’s confidential
information, trade secrets and copyright, any component thereof or
any copy thereof or any adaptation of any or all of the aforesaid:
1.1 the applicant’s
Original Engine Manufacturer (“OEM) cross reference database;
1.2 the applicant’s
pricelists in respect of any aftermarket products;
1.3 the applicant’s
part numbers;
1.4 the applicant’s
photographs of any aftermarket products;
1.5 any lists
containing the contact details in respect of the applicant’s
suppliers, including the business contacts (natural
persons) and
their contact details;
1.6 any lists
containing the contact details in respect of the applicant’s
customers, including the business contacts (natural)
persons and
their contact details;
1.7 the source
document(s)(including electronic files) utilised to create the Excel
document attached to the emails circulated to
the first respondent’s
(Apex’s) customers on or about 4 March 2020 as “P. LIST
WITH GEN PR AND CONV MARCH 20.xisx”;
1.8 the source
document(s)(including electronic files) utilised to create the Excel
document attached to the emails circulated to
Apex’s customers
on or about 20 February 2020 as “NEW STOCK ARRIVAL
20.02.20.xisx”;
1.9 all communications
(be it through email or otherwise) exchanged between all the
respondents and the applicant’s suppliers
and third parties;
1.10 all
communications (be it through email or otherwise) exchanged between
all the respondents and the applicant’s customers
and third
parties;
1.11 the first
respondent’s bulk customer mailing lists;
1.12 documents;
1.13 invoices,
quotations, proof of payment;
1.14 requests for
quotations;
1.15 requests for
manufacturing;
1.16 any evidence of
telephone calls and/or Skype calls and/or zoom calls and/or WhatsApp
calls and/or WeChat calls between any
of the respondents on the one
hand and the applicant’s suppliers and/or customers and/or
manufacturers and/or business contacts
on the other hand.”
[22]
The respondents took issue with the ambit
and generality of the order granted, which they contended was overly
broad and constituted
a fishing expedition.
[23]
The
applicant on the other hand contended that the order complied with
the requirements of specificity set out by the Supreme Court
of
Appeal in
Non
Detonating Solutions (Pty) Ltd v Durie and Others
(“Non-Detonating”)
[10]
and that it was sufficient to establish classes of documentation
[11]
.
The applicant further argued that the establishment of key word
searches was reasonable and a handy tool to be specific. It was
conceded that the use of key word searches was not identified as a
method search in the order but it was argued that such search
was
conducted in a reasonable exercise of the discretion of the attorney
and sheriff. It was also pointed out that paragraph 14
of order gave
the respondents a remedy to object which they did not pursue.
[24]
In
Non
Detonating
[12]
,
the Supreme Court of Appeal stated the following:
“
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.’ “
[25]
In
relation to specific categories of documents, it was held:
[15]
“
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.’
[16]
[26]
Although at first blush, the present order
is in materially similar terms as the order sanctioned by the Supreme
Court of Appeal
in
Non-Detonating
,
every case must be determined on its own facts. In
Non-Detonating
,
the qualification to the order was limited to a very specific and
identified item, being: “
a
self-stemming cartridge substantially identical to the AutoStem
cartridge”.
In the present
instance, the qualification in the
ex
parte
order, designed to limit the
broad categories specified in paragraphs 1.1 to 1.16 of Schedule 1,
was phrased in much broader terms
as being “
applicant’s
confidential information, trade secrets and copyright, any component
thereof or any copy thereof or any adaptation
of any or all of the
aforesaid”.
Each of these
elements is open to interpretation.
[27]
The items listed in
Non
Detonating
, are the same as those
listed in paragraphs 1.1 to 1.1 of Schedule 1. The ambit of the
present order is thus much wider than that
in
Non
Detonating,
despite the similarities in
wording. The order did not identify what would constitute the
applicant’s confidential information,
trade secrets and
copyright and included broad categories of documents in paragraphs
1.9 to 1.16 of the order.
[28]
This broad categorization left a broad
discretion for the independent attorney and the forensic expert to
determine what fell within
the ambit of the order and did not
identify with any degree of specificity what such categories of
documents would comprise of.
This lack of specificity constitutes a
material point of distinction between the present order and the order
granted in
Non-Detonating.
It
also had a material impact on how the order was executed and how the
“searching persons” exercised the discretion
afforded.
[29]
As
held in
Vizyia
,
considerations of practicality and convenience could render it
appropriate for a court to order imaging of hard drives and other
storage facilities and subsequent searching thereof by independent
persons with the use of keywords. But this must be carefully
limited
to discovery and preservation of specific and specified documents and
information or categories thereof that constitutes
vital evidence for
the applicant.
[17]
[30]
The
ex parte
order did not however sanction the imaging or mirroring of hard
drives or the copying of information in bulk. It also did not
authorise the use of any key words, nor did it specify or authorise
any such keywords to identify “the Evidence”. These
facts
are relevant in considering how the order was executed.
[31]
In terms of the order it was left to the
discretion of the “search persons”, being the independent
attorney and the
forensic expert to determine whether any documents
fell within the ambit of “the Evidence”. The order
further authorised
a representative of the applicant or its attorney
to be called upon to identify documents falling within the evidence,
although
not permitted to take part in the search. In reply, the
applicant stated that the evidence was identified by means of the use
of
keywords, such as “XMLZ’. I later return to this
aspect when considering how the order was executed.
[32]
The case made out in its founding affidavit
was that the documentary evidence sought to be preserved, consisted
of: (i) the OEM
cross-reference database or extracts therefrom; (ii)
the SYSPRO system or extracts therefrom, containing business and
contact details
of applicant’s customers; (iii) the Impact
software system or extracts therefrom and an “LO4202 report”
pertaining
to information of applicant’s suppliers and parts
and (iv) pricelists or extracts therefrom. These limitations
pertaining
to the documentary evidence sought to be preserved by and
large did not find their way into the order. Instead, the categories
of documents in the order are broad and general in their terms,
specifically in paragraphs 1.9 to 1.16 of the order.
[33]
The
applicant in its founding papers alleged that XMLZ was one of its
four international suppliers who were contacted by the second
respondent to supply aftermarket parts to the first respondent. In
its answering papers, the respondents averred that XMLZ is the
first
respondent’s loose bearing and bearing kit supplier, based in
China. They further produced evidence that the applicant,
via the
deponent to the founding papers, Ms Rogers, had terminated the
applicant’s relationship with XMLZ as a supplier in
a summary
fashion during 2018
[18]
, the
year before the present application was launched. Considering the
tone of the correspondence attached by the respondents,
from
September 2018 there was and would be no further business
relationship between the applicant and XMLZ. The applicant did not
dispute this in reply, but contended that these facts were
irrelevant. I disagree with that contention.
[34]
Not only was this allegation illustrated to
be false, but the admitted use of the name of XMLZ as a search word
by the forensic
expert in the execution of the order, meant that a
substantial amount of documents to which the applicant had no
entitlement and
which constituted information central to the first
respondents’ business operations were copied. This issue is
relevant in
the context of whether the order falls to be discharged
as a result of how it was executed, an issue to which I later return.
[35]
The applicant further did not refute or
meaningfully deal with the respondent’s evidence that on 5
March 2020, its procurement
manager, Mr Reddy, contacted Ms Lin of
XMLZ, attacking her for conducting business with the first respondent
and after she refused
to cease doing business, offered XMLZ a large
order if she agreed to stop supplying the first respondent. XMLZ
refused. These facts
were not disclosed in the applicant’s
founding papers. There is merit in the respondents’ contention
that the applicant’s
conduct including its purpose of the Anton
Piller order was to stifle competition.
[36]
In reply, the applicant also did not
meaningfully deal with the respondents’ detailed complaints
regarding the wide ambit
of the order and how it was executed. In
argument the applicant contended that it could not address the
respondent’s complaints
as it had not had access to the
documents and the discussion was one sided and contrary to the
audi
alteram partem
rule. The applicant’s
attempt to circumvent dealing with the issue, does not bear scrutiny.
Leaving aside a detailed analysis
of the documents obtained in
execution of the order, it is still necessary to consider the ambit
of the order. The applicant further
had access to the forensic expert
and the independent attorney and could have obtained affidavits from
them responding to the respondents’
complaints or at the very
least, explaining how the discretion was exercised in the execution
of the order. It did not avail itself
of that opportunity but rather
professed ignorance on what was attached.
[37]
Moreover,
the applicant’s case was largely based on inferential reasoning
and speculation that the second to fourth respondents
had access to
and had copied its confidential information on the SYSPRO and Impact
systems and its 2020 pricelists. These allegations
were disputed by
the various respondents, who produced evidence refuting the
conclusions sought to be drawn by the applicant
[19]
.
The respondents’ version that the customers in the market
constituted a finite pool and that the applicant’s main
suppliers were published on its website and both were well known to
the respondents by virtue of their innate knowledge of the
industry,
was not refuted in reply.
[38]
Reference was made to the applicant’s
confidential database, the subject matter of the factual disputes
already alluded to
and a password protected SYSPRO system containing
specific information about the applicant’s customers, their
business details
and business contacts, to which the fourth
respondent, Ms Barnard, allegedly had access. The applicant contended
it had reason
to believe she copied the customer information when she
left its employ because certain customer information found its way
into
a credit application prepared by Ms Barnard for the first
respondent. The respondents denied that either Ms Barnard of Mr Stone
had access to the catalogue database and explained the circumstances
surrounding the credit applications, pointing out that the
credit
applications were sent by a group retailer, Autobarn and were
completed by the clients. These averments were not disputed
in reply.
[39]
Reference was also made by the applicant to
an Impact software system and an LO4202 report pertaining to
information of Partquip’s
suppliers and parts to which the
second respondent, Ms Dantu had access. It was alleged by the
applicant that it had reason to
believe that Ms Dantu exported the
supplier and aftermarket parts information into an excel spreadsheet
and copied this electronic
information when she left the employ of
Partquip because the first respondent utilised the same suppliers as
Partquip. It was further
alleged that Mr Stone and Ms Dantu were both
able to view and export from either the SYSPRO system or Impact
system the pricing
and costing information for each of the Partquip
aftermarket parts. Ms Dantu denied that she had access to any
databases in her
last three years of employment with Partquip and
contended that in her 13 years in the industry she acquired
sufficient knowledge
to deal with suppliers, customers and movement
of parts. The respondents disputed that they had access or had copied
any electronic
information.
[40]
The applicant averred that the first
respondent had undercut its pricing by at least 35% and that the only
inference to be drawn
is that the respondents were in possession of
the applicant’s 2020 pricelists, which the fourth respondent
must have copied
before the left the applicant’s employ. The
respondents’ version that first respondent bases its prices on
a mark-up
on its landed costs entirely independent of the applicant’s
pricing, was not disputed in reply.
[41]
The
applicant’s reasoning was not supported by primary facts, other
than in respect of the OEM cross reference spreadsheet,
an issue
already referred to in this judgment. The applicant had the
information pertaining to the OEM cross reference spreadsheet
prior
to launching the application and referred to it in its founding
affidavit. The applicant could have obtained the necessary
information through the discovery process.
[20]
[42]
It
cannot be concluded that the applicant has established good grounds
for believing that the respondents have the documents or
information
on its SYSPRO and Impact systems or its 2020 pricelists in their
possession. The applicant further did not establish
that its search
was limited to specific documents constituting vital evidence.
Considering the wide ambit of the limitation section
of the order, it
did not specify or identify exactly what information was
requested
[21]
and entailed an
impermissible blanket search for documents
[22]
.
[43]
It
is trite that a fishing expedition to search for evidence to found a
case, is not permitted
[23]
. In
its founding papers, the applicant illustrated that it already had
evidence of the first respondent breaching its copyright.
In relation
to its search for evidence substantiating its claim based on unlawful
competition, the procedure can best be described
as an impermissible
fishing expedition to seek documentation which could establish a
claim.
[44]
I conclude that the Anton Piller order
sought and obtained was not justified by evidence of the existence of
specific vital documents.
I further conclude that the order did not
identify the documentation to be seized with the necessary
specificity. It follows that
the applicant falls at this hurdle and
that the ex parte order must be discharged. In light of this
conclusion it is not necessary
to consider the third requirement in
any detail.
[45]
Even
if I had not reached this conclusion, in my view the order falls to
be discharged as its execution was fatally flawed by exceeding
the
law and numerous irregularities occurred
[24]
in the execution process.
[46]
As
held in
Petre
& Madco (Pty) Ltd t/a T-Chem v Sanderson-Kasner and Others
[25]
,
an Anton Piller order must be meticulously executed according to the
letter of the order and the abuse of such stringent remedies
must be
sanctioned.
[47]
In its answering papers, the respondents
particularised various irregularities and conduct not sanctioned by
the order granted occurring
during the execution of the order. The
respondents’ complaints were that: (i) the applicant abused the
remedy so as to obtain
the first respondent’s own confidential
information and did so during the execution of the order; (ii) the
appointed forensic
expert and the applicant’s attorneys did not
properly perform their functions; (iii) the appointed supervising
attorney failed
to properly perform his functions; (iv) the
applicant’s attorney of record performed the search; (v) the
applicant’s
attorneys of record took photographs during the
search despite such conduct not being authorised by the order; and
(vi) a person
who was never nominated in the Anton Piller order
participated in the execution thereof, to wit Ms Jones an associate
of the independent
attorney, Mr Beyl.
[48]
The independent attorney’s affidavit
is contradicted in various respects by those of the respondents and
their attorney. The
affidavit filed by the independent attorney is
contradictory to the respondents’ evidence and silent on
various salient aspects.
By way of example, no mention was made of
the use of any key words used in the conducting of the search of the
respondents’
devices. The identification of the documents was
made by the sheriff in consultation with the forensic expert and Mr
Beyl. The
basis on which they exercised their discretion to copy
certain information was not disclosed nor to what extent input was
obtained
regarding relevance from the applicant’s attorney.
There is nothing to gainsay respondent’s version that documents
were batched and grouped and removed in bulk.
[49]
The
applicant complained that it was at a disadvantage by respondent’s
reliance on an analysis of what documents were and
were not found
during the search in support of their contention that the search was
unsuccessful. It is in my view not necessary
to determine whether the
search was successful. What must be considered is whether the order
was meticulously executed in its terms,
as required at law
[26]
.
[50]
In reply, the applicant did not deal
meaningfully with the complaints raised by the respondents but rather
sought to dismiss them
in bald and broad terms or labelling them as
irrelevant. It further placed reliance on prayer 14 of the order
pertaining to legal
objections against inspection of identified items
and respondents’ failure to exercise that remedy. The existence
of paragraph
14 in the order does not in my view bar the respondents
from raising all their objections in the present proceedings.
[51]
In reply, the applicant conceded that
certain key words were used as a search method, including XMLZ. It
contended:
“
It
is reasonable to accept that the information attached and copied were
considered to be relevant to the allegations made in the
founding
affidavit and that those who exercised their discretion in so
deciding, acted reasonably”.
[52]
That conclusion cannot be sustained absent
cogent primary facts, objectively justifying such conclusion. First,
the use of key words
was not sanctioned in the order, as already
alluded to. Second, no evidence was presented by the applicant
pertaining to how the
independent attorney and the forensic expert
exercised their discretion or on what basis documents were determined
to be “relevant”.
Third, it is apparent from the
inventories, specifically the second inventory, that the majority of
the documentation seized pertained
to communications concerning XMLZ.
[53]
As stated earlier, the respondents
established that the allegation in the founding affidavit that XMLZ
was a supplier of the applicant,
was false. The applicant had no
entitlement to attach any documents pertaining to XMLZ. It was
further not disputed that groups
and batches of unidentified
documents and communications concerning the day to day conducting of
the first respondent’s business
activities were attached,
including first respondent’s confidential and proprietary
documents, rather than any of the applicant’s
documents as
stated in the order. The limitations imposed in the
ex
parte
order were ignored and
documentation was taken which exceeded its ambit.
[54]
It
does not appear that proper searches were conducted to determine
whether or not the contents of the information seized fell within
the
ambit of the order and no evidence was presented regarding such
searches. No evidence was presented that proper identification
of
relevant documents took place
[27]
.
[55]
There
are however further also undisputed transgressions of the order,
illustrating that it was not meticulously executed. First,
there is
the unsanctioned presence of Ms Jones ostensibly as representative of
the independent supervising attorney, Mr Beyl, whilst
she was not
appointed in terms of the order. Second, the taking of photographs, a
method of copying information
[28]
,
by a representative of the applicant’s attorneys, Mr Abdul,
during the execution, was not sanctioned and impermissibly involved
the applicant’s attorneys in the search
[29]
.
Moreover, it was not disputed that none of the photographs taken were
taken into the custody of the sheriff
[56]
From the undisputed evidence it is thus
apparent that the order was not meticulously executed in its terms.
These irregularities
constitute sufficient grounds to discharge the
ex parte
order granted on 12 June 2020. Considering how the order was
executed, the process can in my view be characterised as an abuse
worthy of censure.
[57]
The abuse of the process would also justify
the granting of an appropriate costs order. The normal principle is
that costs follow
the result. For the reasons already stated, a
punitive costs order is warranted. I am satisfied, considering the
complexities of
the matter, that the employment of two counsel was
justified.
[58]
I grant the following order:
[1] The ex parte order
granted on 12 June 2020 is discharged;
[2] The applicant is
directed to pay the costs of the application on the scale as between
attorney and client, including the costs
of two counsel where
employed.
[3] All the information
attached during the execution of the ex parte order and
particularised in the inventory, including the mirror
drive copies of
the respondent’s electronic devices are to be released the
respondents forthwith.
EF
DIPPENAAR
JUDGE
OF THE HIGH COURT
JOHANNESBURG
APPEARANCES
DATE
OF HEARING
: 22 February 2021
DATE
OF JUDGMENT
: 12 April 2021
APPLICANT’S
COUNSEL
:
Adv. MvR Potgieter SC
APPLICANT’S
ATTORNEYS
: Senekal Simonds Inc
Mr
JH Senekal
RESPONDENT’S
COUNSEL
: Adv I Miltz SC
: Adv
D Block
RESPONDENT’S
ATTORNEYS
: Webber Wentzel
: Mr C
Holfeld
[1]
Automotive
Tooling Systems (Pty) Ltd v Wilkens 2007 (2) SA 271 (SCA)
[2]
Frangos
v Corpcapital Ltd and Others
2004 (2) SA 643
(T) at 648H-649C
[3]
Plascon
Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A)
634H-635C; Friedshelf 1509 (Pty) Ltd t/a RTT Group & Others v
Kallanji
2015 (4) SA 163
(GJ) paras [67]-[69]
[4]
Friedshelf
1509 (Pty) Ltd t/a RTT Group and Others v Kalianji
2015 (4) SA 163
(GJ) –paras 61-69; Non-Detonating Solutions (Pty) Ltd v Durie
and Another
2016 (3) SA 445
(SCA) (“Non Detonating”)
paras 21-26
[5]
Applying
Webster v Mitchell 1948 (1) SA 1186 (W)
[6]
Non
Detonating fn 2 supra;
Shoba
v Officer Commanding, Temporary Police Camp, Wagendrift Dam and
Another; Maphanga v Officer commanding, South African Police
Murder
and Robbery Unit, Petermaritzburg and Others
1995 94) SA 1
(A)
(“Shoba”)
[7]
Van
Niekerk and Another v Van Niekerk and Another
[2007] ZASCA 116
;
2008
(1) SA 76
(SCA) para 10.
[8]
Non
Detonating supra para 21
[9]
2019
(3) SA 173
(SCA) at para [36]
[10]
Fn
4 supra
[11]
Para
[29]
[12]
Para
[30]-[31]
[13]
Shoba
supra at 15I-16C.
[14]
Mathias
International Ltd & Another v Baillache & Others (“Mathias”)
2015 (2) SA 357
(WCC) para 20.
[15]
Para[36]
[16]
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.
[17]
Para
[39]
[18]
Having
been a supplier for three years
[19]
Applying
the principles in Webster v Mitchell supra as qualified in Gool v
Minister of Justice and Another
1055 (2) SA 682
(C) at 688D-E
[20]
Vizyia
para [36]. Para 19 supra
[21]
Vizyia
supra paras []33] and [36]
[22]
Roamer
Watch Company supra para [9]
[23]
Matthias
International Ltd and Another v Baillache and Others 2015(2) SA 357
(WCC) para [20], quoted with approval in Non Detonating.
[24]
Friedshelf
supra para [26] [75]
[25]
1984
(3) SA 850
(W) at 855A-F
[26]
CB
Prest The Law and Practice of Interdicts, p173; Shoba supra
[27]
Friedshelf
supra para [75]
[28]
University
City Studios Inc and Others v Network Video (Pty) Ltd
[1986] ZASCA 3
;
1986 (2) SA
734
(A) at 755C-F
[29]
Memory
Institute SA CC t/a SA Memory Institute v Hansen and Others
2004 (2)
SA 630
(SCA) at para [3]