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[2021] ZAGPJHC 360
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The South African Breweries (Pty) Ltd v Ocean Linght Shipping CC (225 /2020) [2021] ZAGPJHC 360 (1 June 2021)
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NO: 225 /2020
REPORTABLE:
/ NO
OF
INTEREST TO OTHER JUDGES: /NO
REVISED.
DATE:
1/6/2021
In the matter between:
THE
SOUTH AFRICAN BREWERIES (PTY)
LTD
Applicant
and
OCEAN
LINGHT SHIPPING
CC
Respondent
In re:
OCEAN
LINGHT SHIPPING
CC
Plaintiff
and
THE
SOUTH AFRICAN BREWERIES (PTY)
LTD
Defendant
JUDGMENT
MAKUME,
J
:
INTRODUCTION
[1]
In this matter the Applicant who is the Defendant in the action
proceedings seeks
an order compelling the Respondent to comply with
the notices served on it in terms of Rules 35(12) and (14) of the
Uniform Rules.
Secondly interdicting the Respondent from delivering a
notice of Bar.
[2]
The application is opposed on various grounds as will appear
hereunder. I shall refer
to the parties as the Plaintiff and the
Defendant as in the particular of claim.
BACKGROUNDS
FACTS
[3]
During or about July 2019 the Plaintiff and the Defendant concluded
an agreement in
terms of which the Plaintiff undertook to provide
clearing, forwarding, transportation and warehousing services for the
Defendant.
[4]
On the 8
th
January 2020 the Plaintiff instituted action
against the Defendant following the Defendant’s failure to make
payment to the
Plaintiff of the outstanding amount of R44 050 813.23.
This amount represents numerous invoices issued by the Plaintiff
pursuant
to the rendering of the agreed services by the Plaintiff
during the period 21
st
August 2019 to the 5
th
December 2019.
[5]
The Defendant refuses and or failed to make payment and instead
delivered notice to
defend on the 29
th
January 2020.
[6]
On the 25
th
February 2020 the Defendant filed and served
notices in terms of Rule 35 (12) (14) of the Uniform Rules of Court.
The Plaintiff
had five (5) days from the 25
th
February
2020 to comply with the notices.
[7]
The Plaintiff failed to respond to the notices as a result on the 5
th
March 2020 the Defendant served on the Plaintiff notices in terms of
Rule 30 A of the Uniform Rules of Court. In terms of that
notice the
Plaintiff was afforded a further 10 days within which to comply with
the Rule 35 (12) and (14) notices failing which
an application to
compel would be proceeded with.
[8]
On the 23
rd
March 2020 the Plaintiff filed its response to
the Rule 35 (12) and Rule 35(14).
[9]
On the 2
nd
April 2020 the Defendant’s Attorneys
Messrs Bowman addressed a letter to the Plaintiff’s Attorneys
and said the following:
“
We
received your client’s responses to our client’s notices
in terms of Rule 35(12) and Rule 35(14).
We notice that in the responses to
the extent that your client undertakes to provide requested documents
it has undertaken to provide
the requested documents via email.
In the notices our client
specifically requested, as it is entitled to do in terms of Rule
35(12) and Rules 35(14) that your client
makes the requested
documents available for inspection and copying and to the extent that
such documents emanate from a computer
or computer programme that our
client inspects originals on the computer from which the documents
originated.
Our client will not be satisfied
merely by the emailing of the requested documents.
Kindly clarify whether your client
will make available the original documents as requested once the
period of lock down currently
in place ends, and the place at which
such inspection will take place.”
[10] On
the 7
th
April 2020 the Defendant served its second notice
in terms of Rule 30A in which it complained that the Plaintiff has
not adequately
complied with the notices in terms of Rule 35(12) and
35(14).
[11] On
the 23
rd
April 2020 the Plaintiff’s Attorneys in
reply to the Defendant’s letter of the 2
nd
April
2020 said the following:
“
SARS
attended at our client’s premises on 20 January 2020 in order
to obtain shipment files pertaining to this audit period
and to
remove same from our client’s premises. These shipment files
were removed under seal by SARS officials, our client
was only
permitted to make copies of these files under the supervision of and
with the permission of SARS officials and it is only
these copies
that remain in our client’s possession. SARS has retained all
of the original shipment files and it will therefore
not be possible
for your client to inspect and copy the original documents until such
time as the original shipment files have
been released back to our
client.
That said it is not possible for
our client to permit the physical inspection of documents so
requested.
As regards your client’s
insistence that it must inspect the balance of the documents set out
to enable it to file a plea,
exception or counter-claim our client
stands by its position as set out in its replies to your client’s
Rule 35(12) and 35(14)
notices.”
[12]
Simultaneously with the above letter the Plaintiff replied to the
Defendant’s latest Rule
30A notice in brief repeating contents
of its letter of the 23
rd
April 2020. In paragraph 2 of
its response the Plaintiff says the following:
“
The
Plaintiff has advised the Defendant that it is not possible to permit
the inspection of the originals of the documents as such
documents
are in the possession of the South African Revenue Services.”
[13] In
paragraph 2(c) the Plaintiff continues as follows:
“
To the
extent that the Defendant requests an inspection of the documents
that emanate or were generated from a computer system such
physical
inspection is not presently permitted in light of a National Lockdown
implemented by the President of the Republic of
South Africa pursuant
to the global covid-19 pandemic.”
[14] On
the 30
th
April 2020 the Defendant’s attorneys sent a
letter to the Plaintiff attorneys and said the following:
“
Further
to your letter and notices sent last week we note and accept your
offer to physically inspect the original documents when
these are the
returned from SARS and to physically inspect the computer system once
lockdown has been lifted and the regulations
and directives allow
from such movement. We will be in touch in due course to make
arrangements in this regard, once we have greater
clarity on when
such movement shall be allowed.”
[15] On
the 12
th
May 2020 the Plaintiff served on the Defendant a
notice of Bar in terms of Rule 26 calling on the Defendant to file
its plea within
five days or be barred
ipso facto
resulting in
an application for default judgment.
[16] On
receipt the notice of bar the Defendant addressed a letter to the
Plaintiff’s attorneys
informing them that their notice of Bar
is premature on the basis that the Plaintiff has not yet complied
fully with the notices
in terms of Rule 35 (12) and (14) Defendant
requested the Plaintiff to withdraw the notice of Bar by not later
than the 13 May
2020 failing which an application will be launched to
set aside the notice of bar.
[17] On
the 14
th
May 2020 the Plaintiff informed the Defendant by
letter that they will not withdraw the notice of Bar. As a result the
Defendant
filed a notice in terms of Rule 30 (2) (b) to declare the
notice of Bar an irregular step.
[18] On
the 15
th
May 2020 the Plaintiff withdrew the notice of
Bar. On the 25
th
May 2020 the Defendant served this
application to compel as well as for an order interdicting and
restraining the Plaintiff from
delivering a notice of Bar on the
Defendant pending the outcome of the inspection and copying of
documents set out in the Defendant’s
Rule 35(12) and 35(14)
notices.
THE
PLEADINGS
[19] In
paragraph 9 of its particulars of Claim the Plaintiff’s pleads
as follow:
“
The
Plaintiff issued numerous invoices in respect of each designated
shipment of the Defendant for which the services were rendered.
The
invoices are set out in the table below and are described hereafter
as the outstanding invoices.
[20] In
paragraph 12 the Plaintiff pleads as follows:
“
On 12
December 2019 and 23 December 2019 the Plaintiff issued the Defendant
with two demands for payment of outstanding invoices.
To date payment
has not been received from the Defendant.”
THE
DOCUMENT SOUGHT IN TERMS OF RULE 35(12)
[21] In
the Rule 35(12) notice dated the 25
th
February 2020 the
Defendant requires seven items marked 1-7. The Defendant has however
abandoned items 5,6 and 7 only requests
production and inspect of
items 1-4.
ITEM
1
[22] As
far as it concern item 1 being the invoices listed in the table set
out in paragraph 9 Plaintiff
has made copies of the invoices
available but refused to permit the Defendant to inspect the
originals.
ITEM
2
[23] In
respect of item 2 being purchase orders referred to in paragraph 6.2
of the Particulars of
Claim the Plaintiff denies being in possession
of such documents and says that because such purchase orders where
generated by
the Defendant it is the Defendant who is in possession
of same.
[24]
This is denied by the Defendant who in paragraphs 40 -41 of its
replying affidavit tells the
court that the
modus operandi
on
the generation of such purchase order is such that the Plaintiff is
placed in possession of the purchase order.
ITEM
3
[25] The
required documents here relate to invoices referred to in paragraph
6.5 read with paragraph
10 of the Plaintiff’s Particulars of
Claim. The Plaintiff has refused to produce such invoices on the
basis that same are
irrelevant.
ITEM
4
[26]
Item 4 refers to copies of the demands set out in paragraph 12 of the
Particulars of Claim. The
Plaintiff has made the copies available but
refused to allow the Defendant to inspect the originals.
[27] The
correspondence exchanged between the parties clearly demonstrates
that the Plaintiff promised
and undertook to avail the required
documents to the Defendant for copying and inspection. The Defendant
accepted such undertaking
in its letter to the Plaintiff dated the
30
th
April 2020.
[28] It
is common cause that the Defendant has been waiting to inspect the
original documents once
same shall have been returned to the
Plaintiff by SARS. Secondly in respect of documents generated by
Plaintiff’s computer,
Defendant would be allowed to have
physical inspections of those computer as soon as circumstances
permit in view of the Disaster
Management regulations.
[29] The
Plaintiff’s attorneys in partial compliance with the Rule
35(12) and (14) notices provided
a link to down load copies of the
documents which they promised to provide. The Plaintiff has however
persisted in resisting to
allow the Defendant to inspect the original
documents and says that by furnishing copies it has fully complied
with the notices.
[30] The
Defendant maintains and correctly so that the original documents
sought and emanating from
the Plaintiff’s computer system are
material to the Defendant’s defence. The Defendant disputed
that the Plaintiff
has acted in compliance with the terms under which
it engaged the Defendant to perform on its behalf as Defendant’s
Agent.
[31]
Rule 35(12) is clear an unambiguous it entitles a party to inspect
and make copies of documents
which have been referred to in that
party’s affidavit or pleadings. The entitlement to see or
inspect such documents arises
as soon as reference is made thereto in
the pleadings or affidavit. In
Protea Assurance Company Ltd v
Waverly Agencies CC
1994 (3) SA 247
(C) at 249
the court
concluded that the entitlement to inspect a document arises as such
as reference is made thereto in a pleading or affidavit.
[32]
Rule 35 (12) uses the word “produce such documents for
inspections it does not say make
copies available. In the matter of
Finlay and Another vs Kutoane
1993 (4) SA 675
(W) Flemming DJP at
page 685
said
“
Production
need not take the shape only of producing during the giving of
evidence. The word means what it normally means. Show
to the other
party like the Afrikaans word “toon”. It is not only toon
tydens getuienisaflegging which is good but
“production
anyhow.” The said natural meaning without straining and as a
matter of the original meaning of produce
avoids a non-legislated
limitation of its meaning.”
[33] The
Plaintiff’s defence that it will not be able to comply with the
order of inspection
because of the documents being in the possession
of SARS is not a good defence it is an excuse which has no base. All
that the
Plaintiff has to say is to grant the Defendant to make
arrangement with SARS to inspect the documents. In any case the
Plaintiff
has in its letter agreed that as soon as the documents are
returned to it by SARS it will make such available for inspection.
Such
inspection can only take place on production.
[34] The
second excuse that the Plaintiff’s computer software was
subjected to “ransomware”
on the 27
th
January
2020 is an afterthought it was never mentioned in the correspondence
exchanged between the parties preceding this application.
The
Plaintiff must accordingly allow the Defendant to inspect the
documents (originals) wherever they may be.
[35] As
far as the documents required in item 2 the Plaintiff pleads that not
only are the documents
irrelevant but says also that the Defendant is
in possession of such invoices. This defence as equally untenable
Vermont J in the
matter of Magnum Aviator Operation v Chairman
National Transport Communication
1984 (2) SA 398
W said that Rules
35(12) is not qualified by the requirements of relevance and that
once a document has been referred to, it must
be produced
irrespective of whether the party requesting has it in his or her
possession. It must be produced for inspection and
to enable the
Applicant to confirm that it is such a document upon which the
Respondent relies.
[36] In
as far as it concerns computer generated documents which the
Defendant seeks to be inspected
and copied these are data messages as
described by Spilg J in
Makate v Vodacom (Pty) Ltd
2014 (1) SA 191
(GSJ)
. The Plaintiff’s only objection as raised in its
answering affidavit and in the letter of the 23 April 2020 is that it
is
not possible to permit physical inspection of their computer
because of the current lockdown regulation in terms of the Disaster
Management Act.
[37]
Whilst it is correct that as at April 2020 the country was in total
lockdown level 5 it is so
that the restrictions have been drastically
relaxed as a result industries are back to normal with limited
restrictions thus to
allow access and inspection by agreement should
not pose any difficulties.
[38] The
Plaintiff’s version about the ransomware attack is in my view
spurious. The Plaintiff
has furnished no details about that
notwithstanding that it had earlier undertaken to furnish the
documents.
[39] The
refusal by Plaintiff as Agent to provide the Defendant as principal
documents which it is
ordinarily obliged to do is indicative of the
Plaintiff attempting to hide material documents which the Defendant
requires to inspect
to enable it to plead.
[40] All
the documents referred to in the Plaintiff’s Particulars of
Claim are relevant and
must be produced for inspection by the
Defendants.
DOCUMENTS
WHICH THE DEFENDANT SEEKS TO INSPECT AND COPY IN TERMS OF RULE 35(14)
[41]
Rule 35(14) reads as follows:
“
After
appearance to defend has been entered, any party to any action may
for purposes of pleadings require from the other party
to make
available for inspection within 5 days a clearly specified document
or tape recording in his possession which is relevant
to a reasonably
anticipates issued in the action and to allow a copy or transcription
to be made thereof.”
[42] The
only defences or objection which a party may raise against making
available documents requested
in terms of this sub-rule is:
a) if
such document is not clearly specified;
b)
such a document is not relevant to a reasonably anticipated issue in
the action.
[43] It
is trite law that if such document is not in the possession of the
party being requested then
such a party must indicate where such a
document is. This is to enable the requester then to subpoena such
document from the possessor.
[44] The
Plaintiff in opposing compliance with this sub-rule refers to the
decision of
Cullinan Holdings (Pty) Ltd v Mamelodi Stadsraad
1992
(1) SA 615
(T)
where the court held that to obtain an order to
compel production and inspection in terms of Rule 35(14) an Applicant
must establish
that the document is essential (not merely useful) for
purposes of pleadings. This decision was not supported as there is no
authority
for the additional requirements that such document or tape
recording should be essential for purpose of pleadings.
[45] The
decision in Cullinan Holdings (supra) was criticised in
UNITAS
Hospital v Van Wyk
[2006] ZASCA 34
;
2006 (4) SA 436
(SCA) at 444
where it was held
that the word require in the context of the phrase require for the
protection of any right does not mean that
“useful” or
relevant is enough, but on the other end of the scale the requester
does not have to establish that the
information is essential or
necessary.
[46] A
further objection raised by the Plaintiff in resisting production
under this sub-rule is that
the documents are not clearly defined in
that they constitutes broad categories of documents generated over a
substantial period
of time.
[47] It
is common cause that the services for which the Plaintiff alleges
that the Defendant is indebted
to it relate to clearing and
forwarding services over a long period of time. It is during that
period that the Plaintiff collected
funds from the Defendant to make
payment of any duties and taxes which are due to SARS in respect of
the importation of beverages.
The Defendant disputes that the
Plaintiff has acted in compliance with the terms under which it was
engaged by the Defendant to
perform on its behalf. In this regard the
Defendant disputes that the Plaintiff has properly declared the
imported alcoholic beverages
and paid SARS the full custom duty as
well as VAT claimed by the Plaintiff from the Defendant.
[48] In
Titus v RNE Holdings
[2000] 2 ALL SA 331
(TK) at 335
the court
held that:
If a defence is based on a continuous
conduct which occurred over a period of time it would be
inappropriate to expect the Applicant
to give a specific description
of each and every document required for the purposes of pleading
mismanagement which occurred over
a period of time.
[49] In
respect of item 1.1 the Defendant requested each bill of lading which
the Plaintiff relies
on for which it charged the Defendant in terms
of the agreement. In this regard the Plaintiff agrees to make
available copies of
such bills of lady and refuses inspection. The
refusal to inspect is unreasonable the copies originated from the
computer system
of the Plaintiff therefore the Defendant is entitled
to inspect such computer system.
[50] The
request for documents in item 1.3 has not been complied with despite
an undertaking to do
so. The Plaintiff will be ordered to make the
originals available for inspections and copying.
[51]
Similarly the documents referred to in item 3 being packaging lists
from the original supplier
of goods which relate to each transaction
listed in the table in paragraph 9 of the Particulars of Claim.
Initially the Plaintiff
denied the Defendant inspection and copying
thereof on the basis that those are the Defendants documents. This
stance changed when
the Plaintiff in its opposing affidavit now
agrees to make copies available but refuses inspection and copying.
[52] The
basis for denying inspection is unreasonable and can only point out
to a suspicion that the
Plaintiff is hiding something that may be
detrimental to its case.
[53] The
Plaintiff’s in response to item 4 of the request says that the
purchase orders in respect
of the invoices claimed were generated by
the Defendant or its service provider accordingly Defendant is or
should be in possession
of such documents. Once again the refusal to
make those purchase order is unfounded the sub-rule does not say that
if a requester
is already in possession of such documents he or she
is not entitled to same from the other party.
[54] The
Defendant is entitled to inspect those purchases orders in the
possession of the Plaintiff
to ascertain whether the Defendant can
admit or deny that the Plaintiff has performed in terms of the
agreement.
[55]
Item 6 Here the Defendant requested the Plaintiff to produce each
document that the Plaintiff
furnished to SARS and or customs in
respect of each shipment. The Defendant is entitled to those
documents because Plaintiff collected
money from the Defendant on the
basis of those documents which it the Plaintiff made payment to SARS.
The Defendant is entitled
to inspect those documents to verify if its
money were expended correctly.
[56] In
item 9 the Defendant requires the Plaintiff to produce its bank
statements which indicate
each and every payment the Plaintiff made
to SARS and or to Customs in connection with custom duty paid as well
as VAT. It is clear
that those bank statements all have relation to
the allegations in paragraph 9 of the Particulars of Claim.
[57] The
Plaintiff resists production of those bank statements on the basis
that the documents are
not necessary to enable the Defendant to
plead.
[58] As
indicated these bank statements have close relationship with what is
stated in paragraph 9
of the Plaintiff’s Particulars of Claim.
The Documents are highly relevant to determine whether Plaintiff
indeed performed
in terms of the agreement. Plaintiff itself will
rely on such bank statements to show that the amounts claimed for
clearing and
forwarding services as well as VAT were in fact paid by
the Plaintiff.
[59] The
documents requested under item 10 being those documents that SARS and
or Customs sent to
the Plaintiff acknowledging and confirming
payments of customs duty and VAT are related to the documents
requested under item 9.
I say nothing more and repeat my finding as
stated in respect of item 9.
[60] As
regards the last document referred to in item 13 the Defendant
requested each and every electronic
Data Interchange Communication
between Plaintiff and SARS. It must be understood that such
communication is only in respect of
the transaction affecting the
Defendant as in terms of the agreement between Plaintiff and
Defendant. Such electronic communication
is necessary and will assist
the Defendant to plead one way or the other. The communication will
indicate whether the Plaintiff
has performed its obligations strictly
in terms of the agreement it alleged in its Particulars of Claim.
[61] The
Plaintiff must accordingly make all such communication available for
inspection and copying.
It must make the originals available not
copies. The sub-rule dictates as such the Plaintiff has no right to
decide whether to
make copies or originals available. The sub-rule
does not say that the requested party should make copies available.
THE
INTERDICT
[62] It
is common cause that the Plaintiff served a notice of Bar on the
Defendant in terms of Rule
26 which it later withdrew. The Defendant
now seeks an interdict preventing the Plaintiff form serving another
Rule 26 notice as
it has threatened to do pending the outcome of this
application to inspect and copy the documents required by the
Defendant.
[63] I
have already made a finding that the Plaintiff must produce for
inspection and copying the
documents as requested in the Rule 35(12)
and (14) notices. That finding clearly confirms a right to the
Defendant in satisfaction
of the requirement of an interim interdict.
[64] The
Plaintiff relying on the decision of
Potpale Investments (Pty) Ltd
v Mkhize
2016 (5) SA 96
(KZP)
has indicated that it has the right
to at anytime serve a Rule 26 notice on the Defendant.
[65]
Reliance on the Potpale decision is misguided on the following basis,
the Rule 35 notices were
served after the Plaintiff in that matter
had already filed its Rule 26 application which is not the case in
this matter. Secondly
the court dismissed the application to
interdict the Rule 26 notice on the basis that the application for
default judgment in terms
of Rule 31 (5) was improperly before the
court when that Rule requires that it be dealt with by the Registrar.
[66]
Accordingly in my view Defendant has established on a balance of
probabilities that it has grounds
for a reasonable apprehension that
its rights will be detrimentally affected. That apprehension of harm
is reasonable and apparent.
[67]
Prest in The Law and Practice of Interdicts at page 201 says:
“
A
Legal System in its quest for the ascertainment of truth and ensuring
that justice is done, must not permit its procedures to
become so
cumbersome and time consuming that the end to which the very system
is directed is defeated
.
The lesson of history teaches us that the subject of the law is an
impatient and restless creature. When a crisis situation presents
itself, he seek expeditious and effective action at least on an
interim basis until such time as the principal dispute can be
resolved. The law, if it is effective, must always keep pace with
these demands. It is a servant of circumstances and not the master.
It must not give rise to problems it must provide solutions to such
problems as arise out of the requirements of modern commercial
and
social developments.”
[68] I
have accordingly come to the conclusion that the Defendants are
entitled to establish the authenticity
of the documents relied upon
by the Plaintiff in the action by also having access to the computers
on which they were generated.
[68] In
the result I hereby issue an order in the following terms:
ORDER
1
Within 5 days from date of service of this order on the
Plaintiff or
its attorneys of record, the Plaintiff is to comply with the
Applicant’s/Defendant’s notice in terms of
rule 35(12)
served on 25 February 2020 (“the Rule 35(12) Notice”), by
permitting and allowing the Applicant/Defendant
and its
representatives to inspect and copy all of the documents which are
set out and described in items 1, 2,3 and 4 of the notice.
2
Within 5 days from date of service of this order on the
Plaintiff or
its attorneys of record, the Plaintiff is to comply with the
Applicant’s/Defendant’s notice in terms of
rule 35(14)
served on 25 February 2020, by permitting and allowing the
Applicant/Defendant and its representatives to inspect and
copy all
the document which are set out and described in terms of
1.1,1.2,3,4,6,9.10 and 13 of the notice.
3
The orders in paragraphs 1 and 2 above are hereby suspended
until the
happening of the earlier of the following: Either the national state
of disaster declared in terms of the
Disaster Management Act, 2002
is
lifted or the regulations issued in terms thereof permit the
Applicant/Defendant and its representatives to inspect and copy
the
documents.
4
Pending the outcome of the inspection and copying of the
documents
set out in paragraph 1 and 2 thereof, the Respondent/Plaintiff is
interdicted and restrained from delivering a notice
of bar calling
upon the Applicant/Defendant to plead.
5
The Plaintiff/ Respondent is to pay the cost of this application
on
party and party scale.
Dated at Johannesburg on this the 31
day of May 2021.
M A MAKUME
JUDGE OF THE HIGH COURT
GAUTENG LOCAL DIVISION,
JOHANNESBURG
Appearances:
DATE OF HEARING
:
24 MAY
2021
DATE OF JUDGMENT
: 01
JUNE 2021
FOR APPLICANT
:
ADV
INSTRUCTED BY
:
FOR RESPONDENT
:
ADV
INSTRUCTED BY
: