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[2011] ZASCA 245
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Industrial Development Corporation of South Africa Ltd v PFE International Inc. (BVI) and Others (910/10) [2011] ZASCA 245; 2012 (2) SA 269 (SCA); [2012] 2 All SA 71 (SCA) (1 December 2011)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 910/10
In
the matter between:
INDUSTRIAL
DEVELOPMENT CORPORATION OF
SOUTH
AFRICA LTD
….................................................................................
Appellant
and
PFE
INTERNATIONAL INC (BVI)
….................................................
First
Respondent
PFE
INTERNATIONAL INC (LIBERIA)
…...................................
Second
Respondent
VAN
DYCK CARPETS (PTY) LTD
…..............................................
Third
Respondent
MEHDY
ZARREBINI
…..................................................................
Fourth
Respondent
MEHRAN
ZARREBINI
…..................................................................
Fifth
Respondent
Neutral
citation:
Industrial Development Corporation of South Africa
Ltd v PFE International Inc (BVI)
(910/10)
[2011] ZASCA 245
(1Dcecember 2011)
Coram:
LEWIS,
SNYDERS and THERON JJA
Heard:
22 November
2011
Delivered:
1 December 2011
Summary:
Promotion of
Access to Information Act 2 of 2000
, s (7)1 –
Impact of PAIA on the
Rules of Court –
s7(1)
preserves the operation of the
Rules of Court in
relation to pending litigation.
_________________________________________________________________
ORDER
On appeal from:
KwaZulu-Natal High Court, Durban (Motala AJ sitting as court of
first instance):
1 The appeal is upheld.
2 The respondents are
ordered, jointly and severally, to pay the costs of the appeal.
3 The order of the high
court is set aside and replaced with:
‘
a The application
is dismissed.
b The applicants are
ordered, jointly and severally, to pay the costs of the application.’
JUDGMENT
THERON JA (LEWIS and
SNYDERS JJA concurring)
[1] The respondents
instituted proceedings, in terms of the Promotion of Access to
Information Act 2 of 2000 (PAIA), against the
appellant, the
Industrial Development Corporation of South Africa Ltd (IDC) in the
high court (Johannesburg) for an order that
the IDC furnish certain
documents and records to them. On 24 July 2007, the South Gauteng
High Court (Johannesburg) granted an
order pursuant to the provisions
of s 9 of the Supreme Court Act 41 of 2001, for the transfer of the
proceedings to the KwaZulu-Natal
High Court (Durban). That court
(Motala AJ) granted the relief sought, and it is against this order
that the IDC appeals, with
its leave. The issue on appeal, as in the
high court, is the interpretation of s 7 of PAIA and its
applicability to this matter.
[2] The first and second
respondents, PFE International Inc (BVI) (PFE) and PFE International
Inc (Liberia), respectively, are companies
in the PFE Group that
carried on various businesses including the manufacture of carpets.
Prior to 14 September 2001, the IDC owned
approximately 98 per cent
of the shares in South African Fibre Yarns Rugs Ltd (SAFYR). On 14
September 2001, an agreement was concluded
in terms of which PFE
acquired 45 per cent of the issued share capital of SAFYR from the
IDC. Pursuant to this agreement, the fourth
and fifth respondents
(Mehdy Zarrebini and Mehran Zarrebini, respectively), were appointed
as directors of SAFYR. The agreement
was subsequently terminated and
the fourth and fifth respondents resigned as directors of SAFYR. PFE
(BVI) re-transferred its shares
in SAFYR to the IDC. While the fourth
and fifth respondents were still directors of SAFYR, PFE acquired
shares in the third respondent,
Van Dyck Carpets (Pty) Ltd (Van
Dyck).
[3] SAFYR subsequently
instituted proceedings in the KwaZulu-Natal High Court (Durban),
contending that the fourth and fifth respondents
had breached the
fiduciary duties they owed SAFYR, as directors, in failing to afford
to SAFYR the opportunity to purchase the
shares in Van Dyck when
those shares were offered to the fourth and fifth respondents. SAFYR
sought an order that the respondents
‘disgorge’ the
shares in Van Dyck to SAFYR. These proceedings were referred to trial
and after the exchange and close
of pleadings, SAFYR requested
further particulars for trial.
[4] On 26 January 2007,
the respondents, via their attorney, delivered a request, in terms of
s 18 of PAIA, to the IDC for information
and access to the latter’s
records. The IDC did not respond to the request. This led to the
respondents instituting these
proceedings against the IDC in the
court below. The main grounds relied upon by the respondents for
their entitlement to the records
appear from the following paragraphs
of the affidavit filed on their behalf:
‘
the information necessary to
respond to some of the particulars requested [by SAFYR] … is
contained in the documents requested
… and the information in
those documents and records is perculiarly within the knowledge of
the respondent [IDC] in the
sense that in order to respond to the
request for further particulars for trial the applicants require
access to the documents
requested … so as to be able to obtain
the necessary information
…
.
the applicants also require access to
the information and records to prepare for trial but:
as the respondent is not a party to
the application, it cannot be compelled to make discovery;
the identity of the particular books
and records is within the peculiar knowledge of the respondent and
cannot be identified for
the purpose of a subpoena
duces tecum
.’
[5] The basis of the
IDC’s opposition to the application was set out in the
answering affidavit, as follows:
‘
On their own affidavit the
applicants seek the information which they have sought “for the
purpose of … civil proceedings”.
Those proceedings
commenced a long time before the request was made and the records
requested can be obtained by way of subpoena
duces
tecum
under Uniform Rule
38(1)(a). The result is that in terms of section 7(1) of the
Promotion of Access to Information Act 2 of 2000
(“PAIA”)
the information requested cannot be sought in terms of PAIA.’
[6] Section 32 of the
Constitution confers upon every person ‘the right of access to
any information that is held by the state’.
The section also
imposes upon Parliament the obligation to enact national legislation
to give effect to this right. PAIA is that
legislation. The purpose
of PAIA, as stated in the preamble, is ‘to give effect to the
constitutional right of access to
any information held by the State
and any information that is held by another person and that is
required for the exercise or protection
of any rights’. The
objects of PAIA are set out in s 9 and these include:
‘
(a) to give effect to the
constitutional right of access to-
(i) any information held by the State;
and
(ii) any information that is held by
another person and that is required for the exercise or protection of
any rights;
(b) to give effect to that right—
(i) subject to justifiable
limitations, including, but not limited to, limitations aimed at the
reasonable protection of privacy,
commercial confidentiality and
effective, efficient and good governance; and
(ii) in a manner which balances that
right with any other rights, including the rights in the Bill of
Rights in Chapter 2 of the
Constitution;
(c) to give effect to the
constitutional obligations of the State of promoting a human rights
culture and social justice .…’
[7] It was not disputed
that the IDC is a public body as defined in the Act. The issue in the
court below, and on appeal, centered
on the interpretation of s
7(1)(c) and in particular, whether it excludes the respondents’
request for records from the application
of the Act on the basis that
the Uniform Rules provide for the production of or access to such
records.
[8] The right of access
to information that is held by the state is, however, limited by PAIA
itself.
In terms of s 7(1),
PAIA
does not apply in particular circumstances. The section reads:
‘
This Act does not apply to a
record of a public body or a private body if—
(a) that record is requested for the
purpose of criminal or civil proceedings;
(b) so requested after the
commencement of such criminal or civil proceedings, as the case may
be; and
(c) the production of or access to
that record for the purpose referred to in paragraph (a) is provided
for in any other law.’
All three of the
requirements of s 7(1) must be met in order to render PAIA
inapplicable to the request. On the common cause facts
in this
matter, the first two requirements of s 7(1), namely, that the
records were requested for the purpose of civil proceedings
and such
request was made after the commencement of the civil proceedings,
were satisfied. This appeal turns on whether or not
the third
requirement was met, namely, that the production of or access to the
requested record is provided for in any other law.
[9] The purpose of s 7 is
to prevent PAIA from having any impact on the law relating to
discovery or compulsion of evidence in civil
and criminal
proceedings.
1
In the event that ‘the
production of or access to’ the record ‘is provided for
in any other law’ then the
exemption takes effect. The
Legislature has framed s 7 in terms intended to convey that requests
for access to records made for
the purpose of litigation, and after
litigation has commenced, should be regulated by the Rules of Court
governing such access
in the course of litigation. This was the view
of Harms DP in
National
Director of Public Prosecutions v King
,
2
where it was held that
‘any other law’, in the context of s 7, refers to the
body of law which includes the rules relating
to discovery,
disclosure and privilege. The learned judge endorsed the view
expressed by Brand JA in
Unitas
Hospital v Van Wyk & another
,
3
that PAIA was not
intended to have any impact on the discovery procedure in civil
cases. Harms DP went on to quote, with approval,
the statement by
Brand JA that ‘[o]nce court proceedings between the parties
have commenced, the rules of discovery take
over’.
[10] In
Ingledew
v Financial Services Board: In Re Financial Services Board v Van der
Merwe & another
,
4
the Constitutional Court
noted that the adoption of the approach that once litigation has
commenced discovery should be regulated
by the Uniform Rules, can
give rise to ‘certain anomalies’. Ngcobo J, writing for
the court, stated:
‘
Under the wording of s
32(1)(a), the applicant would prima facie have been entitled to all
the documents he now seeks until the
day before summons was served on
him. Moreover, a third party might have approached another for access
to those documents during
the course of the applicant's litigation.
In the present case, however, it is not necessary to deal with these
issues or the different
views expressed in the decided cases and I
prefer to leave those issues open.’
5
This anomaly, that an
applicant may be entitled to information the day before the
commencement of proceedings but not the day thereafter,
must be seen
as a necessary consequence of the intention, on the part of the
Legislature, to protect the process of the court.
Once proceedings
are instituted then the parties should be governed by the applicable
rules of court.
6
[11] The IDC contends
that the Uniform Rules relating to subpoenas are laws that provide
for ‘the production of or access
to’ the records sought
by the respondents. Rule 38(1), which regulates the procedure
compelling the production of documents
by a witness for purposes of
litigation, reads as follows:
‘
(1) (a) Any party, desiring the
attendance of any person to give evidence at a trial, may as of
right, without any prior proceeding
whatsoever, sue out from the
office of the registrar one or more subpoenas for that purpose, each
of which subpoenas shall contain
the names of not more than four
persons, and service thereof upon any person therein named shall be
effected by the sheriff in
the manner prescribed by rule 4, and the
process for subpoenaing such witnesses shall be, as nearly as may be,
in accordance with
Form 16 in the First Schedule.
If any witness has in his possession
or control any deed, instrument, writing or thing which the party
requiring his attendance
desires to be produced in evidence, the
subpoena shall specify such document or thing and require him to
produce it to the court
at the trial.
(b) Any witness who has been required
to produce any deed, document, writing or tape recording at the trial
shall hand it over to
the registrar as soon as possible, unless the
witness claims that the deed, document, writing or tape recording is
privileged.
Thereafter the parties may inspect such deed, document,
writing or tape recording and make copies or transcriptions thereof,
after
which the witness is entitled to its return.’
In terms of this rule,
the production of a document by a witness is obtained by the issuing
of a subpoena
duces tecum
. It must be borne in mind that rule
38(1) is contemplated by s 30 of the Supreme Court Act 59 of 1959,
which provides that a party
to civil proceedings ‘may procure
the attendance of any witness or the production of any document or
thing in the manner
provided for in the rules of court’.
[12] Section 7(1)(
c
)
does not stipulate, as a condition for the application of the ouster
provision contained in that section, that the ‘other
law’
should provide for the production of or access to the record
concerned at the time when it might be obtained if the
provisions of
PAIA were to apply. The section simply requires that the ‘other
law’ (in this instance rule 38(1)) should
provide for the
production of or access to the record. Rule 38 achieves that purpose.
The rules of court relating to subpoenas,
are laws which provide for
‘the production of or access to’ records and these
include records held by persons who are
not parties to the
litigation. To find otherwise would be contrary to the basic
principle established in
Unitas Hospital
that PAIA was not
intended to have an impact on court procedure. It is so that the
court in
Unitas Hospital
was dealing with discovery while this
matter concerns the issue of a subpoena. However, both of these
procedures are provided for
in the Uniform Rules.
[13] It was argued that
there is a distinction because of the timing: discovery is required
after close of pleadings whereas a witness
is generally subpoenaed
only when the trial is about to commence. But there is no reason why
a party should not serve a
subpoena duces tecum
at any stage
of the procedure. The documents, tape recordings, computer records
and other material required may be deposited with
the Registrar,
under rule 38(1)(b), before the trial commences, and the party who
has issued the subpoena may inspect and copy
the material so
required. While it is true that the provisions of rule 38(1) are not
designed to enable a party to identify the
material to be made
available, they nonetheless may serve that purpose. There is no
reason to distinguish between discovery and
securing documentary
evidence from a third party. This is in accordance with an intention
to leave intact the existing body of
rules designed to facilitate the
conduct of trials.
[14] It is also so that
the application was brought against a body not party to the
litigation itself. The distinction makes no
difference given the
provisions of rule 38. This case then falls within the exclusion of
the application of PAIA by s 7(1), as
interpreted by this court in
the cases referred to above.
[15] The contention
advanced on behalf of the respondents that PAIA was intended to
supplement the rules of court, cannot be sustained.
First, s 7 does
not express such an intention. In fact, the section says the
opposite. Second, and as has already been mentioned,
and on this
court’s interpretation of s 7, it was the intention of the
Legislature that requests for access to information
made for the
purpose of litigation, and after litigation has commenced, should be
regulated by the applicable court rules. Third,
to create a dual
system of access to information, in terms of both PAIA and the
particular court rules, has the potential to be
extremely disruptive
to court proceedings, as is evidenced by this matter.
[16] For these reasons,
the following order is made:
1 The appeal is upheld.
2 The respondents are
ordered, jointly and severally, to pay the costs of the appeal.
3 The order of the high
court is set aside and replaced with:
‘
a The application
is dismissed.
b The applicants are
ordered, jointly and severally, to pay the costs of the application.’
____________
L V THERON
JUDGE OF APPEAL
Appearances:
Appellant:
P J Olsen SC
Instructed by: Deneys Reitz Inc,
Durban
Webbers, Bloemfontein
Respondents: D J Shaw SC (with A W M
Harcourt SC)
Instructed by: Bakers Attorneys,
Durban
Matsepes Inc, Bloemfontein
1
National
Director of Public Prosecutions v King
[2010]
3 All SA 304
(SCA) para 39;
Unitas
Hospital v Van Wyk & another
[2006] ZASCA 34
;
2006
(4) SA 436
(SCA) para 19;
Rail
Commuter Action Group & others v Transet Ltd t/a Metrorail &
others (No 1)
2003 (5) SA
518
(C) at 587I-J. See also Iain Currie and Jonathan Klaaren
The
Promotion of Access to Information Act Commentary
para
4.15.
2
National
Director of Public Prosecutions v King
[2010] 3 All SA304 (SCA)
para 39.
3
Unitas
Hospital v Van Wyk & another
[2006] ZASCA 34
;
2006 (4) SA 436
(SCA) para 19.
4
Ingledew
v Financial Services Board: In Re Financial Services Board v Van der
Merwe & another
[2003] ZACC 8
;
2003 (4) SA 584
(CC).
5
Para
29.
6
CCII
Systems (Pty) LTD v
Fakie
& others NNO (Open Democracy Advice Centre, As Amicus Curiae)
2003
(2) SA 325
(T) para 21.