Summary of Judgment

Introduction

This judgment concerns an application for leave to appeal heard and decided in the Gauteng Division of the High Court, Johannesburg. The application arose from interlocutory proceedings dealing with further and better discovery in ongoing litigation between the parties.

The plaintiff in the main action is White Oak Trade & Specialty Finance Cayman LLC. The first defendant is Santam Structured Insurance Limited, the second defendant is Credit Innovation (Pty) Limited, and the third defendant is Harper, Jansen. In the present proceedings, the first and second defendants were the applicants for leave to appeal, and the plaintiff opposed the application.

The procedural history, as recorded by the court, is that on 22 February 2023 the court granted the plaintiff’s application to compel further and better discovery (under Uniform Rule of Court 35(7)) and simultaneously dismissed a corresponding application by the first and second defendants to compel discovery from the plaintiff. Costs orders were made against the first and second defendants in favour of the plaintiff. The present judgment (dated 30 March 2023) resolves whether leave to appeal should be granted against those orders, and if so, to what extent.

The general subject-matter of the dispute in this judgment is therefore not the merits of the principal action, but rather the appealability and correctness (for purposes of leave) of interlocutory discovery rulings, including disputes over relevance, privilege, scope of the discovery order, and whether sufficient discovery had already been made.

Material Facts

The material facts are those relating to the nature of the orders granted on 22 February 2023 and the grounds advanced for leave to appeal.

It was common cause that two applications to compel had been determined together in the earlier judgment: one brought by the plaintiff to compel discovery from the first and second defendants, and a second brought by the first and second defendants to compel discovery from the plaintiff. The earlier outcome was split, in that the plaintiff obtained relief compelling further discovery from the first and second defendants, while the defendants’ attempt to compel discovery from the plaintiff was dismissed.

In seeking leave to appeal against the portion of the earlier judgment granting the plaintiff’s application to compel, the first and second defendants relied on contentions that the court had made incorrect factual findings and legal conclusions on whether there was any valid basis to refuse discovery. They specifically disputed findings that the requested documents were not privileged and/or were relevant, and contended in certain instances that the orders were framed too widely and that their explanations for non-production were not properly accepted.

A further factual contention advanced by the first and second defendants related to the scope of the “insurance documentation” to be produced. They argued that the order ultimately granted went beyond what had been sought in the plaintiff’s original Rule 35(3) notice, because it included correspondence involving the defendants’ current attorneys of record and Marsh with principal insurers, which they said was not foreshadowed in the papers and only emerged in a draft order presented during the hearing of the applications to compel.

On privilege, the first and second defendants’ position (as recorded) was that litigation was contemplated by about 20 August 2019, and that documents created after that date in relation to the insurance documentation should therefore be treated as privileged.

In relation to “FAIS documents”, the first and second defendants contended that the court should have accepted their explanation that all relevant documents had already been produced, and that the court should not have compelled additional production. The judgment records that similar themes were advanced in relation to other categories of documents ordered to be produced.

In seeking leave to appeal against the portion of the earlier judgment dismissing the defendants’ application to compel, the first and second defendants relied particularly on their stance that the plaintiff should have been compelled to produce listed documents, including the original “Guarantee Policy”. They contended that the plaintiff’s responses were equivocal, and that the court erred in accepting the plaintiff’s explanation that it was not in possession of the original policy.

The plaintiff raised a preliminary opposition point that the earlier order was interlocutory and therefore not appealable. This factual procedural stance required the court to determine appealability as a threshold matter for leave.

Legal Issues

The central legal questions the court was required to determine were, first, whether the earlier discovery order (despite being interlocutory in character) was appealable, and second, whether the applicants had satisfied the statutory requirements for leave to appeal.

The dispute was primarily one of application of law to fact within the statutory framework for leave to appeal, rather than a pure question of fact or a pure question of law. The court had to apply the legal standard in section 17(1)(a)(i) of the Superior Courts Act 10 of 2013 to the earlier conclusions reached in the discovery applications and decide whether the proposed appeal had reasonable prospects of success.

The appealability question involved a value judgment focused on whether permitting an appeal would be in the interests of justice, taking into account the nature and impact of the discovery order on the subsequent conduct and fairness of the litigation.

Court’s Reasoning

The court began by recording that the defendants’ submissions on leave to appeal largely repeated issues already addressed in the judgment of 22 February 2023. The court reiterated its view from that earlier decision that the plaintiff had made out a proper case for relief compelling further and better discovery, while the defendants had not. However, the court emphasised that this view was not itself decisive for leave to appeal, because the legal threshold for leave turns on prospects of success and the applicable statutory test.

In setting out the governing test, the court referred to the traditional approach that leave to appeal depended on whether there was a reasonable prospect that another court might come to a different conclusion. The court then situated this test within section 17(1)(a)(i) of the Superior Courts Act 10 of 2013, which requires that the judge be of the opinion that the appeal would have a reasonable prospect of success. The court accepted authority indicating that this formulation has raised the bar, creating a higher and more stringent threshold than under the prior regime.

The court aligned itself with the approach articulated in Mont Chevaux Trust v Tina Goosen, LCC 14R/2014 (unreported) (in an obiter dictum), which had interpreted the statutory wording as raising the threshold for leave. The court further noted that this approach had been endorsed by the Supreme Court of Appeal in Notshokovu v S, case no: 157/2015 [2016] ZASCA 112 (7 September 2016), and by the Full Court of the Gauteng Division, Pretoria in Acting National Director of Public Prosecutions and Others v Democratic Alliance In Re: Democratic Alliance v Acting National Director of Public Prosecutions and Others (19577/09) [2016] ZAGPPHC 489 (24 June 2016).

Turning to the preliminary question of appealability, the court rejected the plaintiff’s contention that the interlocutory character of the discovery order rendered it non-appealable. The court relied on the reasoning in Baard v Allem 2021 JDR 2521 (GJ), read together with constitutional authority, to the effect that the test for appealability has been widened since earlier formulations associated with Zweni, and that the critical consideration now is whether appealability and leave to appeal serve the interests of justice. The court reasoned that, in this matter, the interests of justice favoured appealability because if the discovery orders were not capable of appeal at this stage, the main dispute might ultimately be determined on the basis of material that, on appeal, could be found to have been improperly compelled or improperly excluded.

Having accepted appealability in the interests of justice, the court then differentiated between the two discovery rulings for purposes of prospects of success. In relation to the portion of the earlier judgment granting the plaintiff’s application to compel (and rejecting privilege and relevance objections), the court was persuaded that the issues raised were such that another court was likely to reach different conclusions. On that basis, the court held that there were reasonable prospects of success on appeal in respect of that portion, and leave was granted.

In contrast, regarding the portion of the earlier judgment dismissing the defendants’ application to compel discovery from the plaintiff, the court held that the plaintiff had responded more than adequately and that the court was not at liberty to go behind the plaintiff’s affidavits asserting, among other things, that the plaintiff did not possess documents beyond those already discovered. On that footing, the court concluded that an appeal against that portion lacked reasonable prospects of success, and leave to appeal was refused in respect of it.

Outcome and Relief

The court granted leave to appeal in part. Leave was granted to the first and second defendants to appeal to the Full Court of the Gauteng Division, Johannesburg against the portion of the judgment and order dated 22 February 2023 that related to the plaintiff’s application to compel further and better discovery under Uniform Rule of Court 35(7) (identified as paragraphs 57(a), (b) and (c), 57 and 57 of the earlier order).

The costs of the application for leave to appeal, in respect of the portion for which leave was granted, were ordered to be costs in the appeal.

The court dismissed, with costs, the first and second defendants’ application for leave to appeal against the portion of the 22 February 2023 judgment and order that related to the defendants’ own application to compel (identified as paragraph 57 of the earlier order).

Cases Cited

Mont Chevaux Trust v Tina Goosen, LCC 14R/2014 (Land Claims Court) (unreported).

Notshokovu v S, case no: 157/2015 [2016] ZASCA 112 (7 September 2016).

Acting National Director of Public Prosecutions and Others v Democratic Alliance In Re: Democratic Alliance v Acting National Director of Public Prosecutions and Others (19577/09) [2016] ZAGPPHC 489 (24 June 2016).

Baard v Allem 2021 JDR 2521 (GJ).

Tshwane City v Afriforum 2016 (6) SA 279 (CC).

Zweni (as referred to in the judgment, without a full citation provided in the text).

Legislation Cited

Superior Courts Act 10 of 2013, section 17(1)(a)(i).

Supreme Court Act 59 of 1959 (referred to as repealed legislation for comparative purposes).

Rules of Court Cited

Uniform Rule of Court 35(7).

Uniform Rule of Court 35(3).

Held

The court held that the interlocutory discovery orders were appealable because the decisive consideration was the interests of justice, and in this matter justice required appealability to avoid the main action being determined on the basis of potentially improper discovery material.

The court held further that the statutory test in section 17(1)(a)(i) of the Superior Courts Act 10 of 2013 imposes a heightened threshold, requiring a judge to be satisfied that the proposed appeal would have reasonable prospects of success.

Applying that test, the court held that the first and second defendants had demonstrated reasonable prospects of success on appeal in relation to the order granting the plaintiff’s application to compel further discovery, but had not demonstrated reasonable prospects in relation to the dismissal of the defendants’ own application to compel discovery from the plaintiff.

LEGAL PRINCIPLES

The judgment applied the principle that leave to appeal under section 17(1)(a)(i) of the Superior Courts Act 10 of 2013 may be granted only where the court is of the opinion that the appeal would have a reasonable prospect of success, a threshold described (with reference to authority) as more stringent than the pre-existing test under the repealed Supreme Court Act 59 of 1959.

The judgment applied the principle that the appealability of interlocutory orders is determined by reference to the interests of justice, and is not confined to whether an order has final effect or disposes of a substantial portion of the relief claimed.

In the context of discovery disputes, the judgment proceeded on the principle that a court is generally not entitled to go behind affidavits on discovery where a party avers that it does not possess additional documents beyond those discovered, and that this consideration can be decisive in evaluating whether an appeal has reasonable prospects of success in respect of an order refusing to compel further discovery.