About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2021
>>
[2021] ZAGPPHC 372
|
|
Vosloo N.O and Another v South African Medical Association NPC and Another (44983/2020) [2021] ZAGPPHC 372 (4 June 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE
NUMBER: 44983/2020
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED
In
the matter between :
GERHARD
VOSLOO N.O
First
Applicant
(Administrator of the
South African Medical
Association
Trade Union)
THE SOUTH AFRICAN
MEDICAL ASSOCIATION
TRADE
UNION (under Administration)
Second
Applicant
and
THE SOUTH AFRICAN
MEDICAL ASSOCIATION NPC
First
Respondent
THE
REGISTRAR OF LABOUR RELATIONS
Second Respondent
Heard
on:
31 May 2021
Judgment
handed down: 4 June 2021 (by publication on CaseLines)
VAN
ZYL AJ
Introduction
1.
This is an interlocutory application by the
First Respondent to compel discovery of documents requested from the
Applicants in terms
of rule 35(12) of the Uniform Rules of Court.
The Applicants opposed the application.
A brief background
2.
The main application is an application for
the final winding-up of the First Respondent brought by Mr Gerhard
Vosloo (hereinafter
referred to as “
the
Administrator
”) in his official
capacity as the court appointed administrator of the South African
Medical Association Trade Union (“
SAMATU
”),
the Second Applicant. For purposes of distinction, the
winding-up application is referred to as “
the
main application
” and this
application as “
the rule 35(12)
application
” or “
this
application
”. I also refer
to the Administrator and SAMATU jointly as “
the
Applicants
”.
3.
The First Respondent is the South African
Medical Association (“
SAMA
”),
a non-profit company established in 1927, which represents the
interest of the medical profession in South Africa, with
a specific
focus on medical doctors, who are normally either self-employed or
employed by the public sector (e.g. state-run hospitals).
4.
The Second Respondent is the Registrar of
Labour Relations.
5.
The SAMATU was placed under administration
by the Labour Court on 10 October 2019 and the Administrator was
appointed in terms of
an order of the same court on 27 February
2020. These two orders are hereinafter referred to as
“
administration order
”
and “
the appointment order
”
respectively.
6.
The terms of reference attached to the
appointment order sets out the powers and obligations of the
Administrator (these are hereinafter
referred to as “
the
Terms of Reference
”). In
particular, paragraph 1.18 of the Terms of Reference records that the
Administrator “
is directed to
report on
[SAMTU’s]
affairs
to the
[Registrar of Labour Relations]
on a monthly basis during the aforesaid
12 months and such further period of administration
”
(parenthesis added).
7.
These
earlier proceedings in the Labour Court were followed by an urgent
application by the Applicants, again in the Labour Court,
before Van
Niekerk J, who gave judgment on 18 May 2020. SAMA sought leave
to appeal against this judgment, which leave was
refused by Van
Niekerk J on 25 June 2020.
[1]
This was followed by an urgent application by SAMA in this court
before Raulinga J, which was struck from the roll with costs.
8.
The main application was launched on 9
September 2020 and relies upon two grounds for seeking SAMA’s
winding-up, namely, on
the basis of SAMA being insolvent
alternatively deemed insolvent as contemplated in sections 344(f) and
345 of the Companies Act
(61 of 1973) (“
the
1973 Act
”) and because it is just
and equitable to do so in terms of the section 344(h) of the 1973 Act
alternatively section 81(1)(c)(ii)
of the Companies Act (71 of
2008). The averments made in respect of each of these grounds
are germane to determining this
application and are dealt with,
insofar as is necessary, further below.
The rule 35(12)
application
9.
In paragraph 32 of his founding affidavit,
the Administrator stated the following:
“
I
am obliged to provide regular reports to the Registrar of Labour
Relations, who exercises oversight over the administration process.”
10.
This statement, together with two others,
elicited a request from the Respondent in terms of rule 35(12) for
inter alia
“
the
reports submitted to the Registrar of Labour Relations referred to in
paragraph 32 of the founding affidavit
”.
For the sake of convenience, these documents are referred to herein
simply as “
the reports
”
and the notice as “
the rule 35(12)
notice
”.
11.
It bears pointing out that the winding-up
application was launched on 9 September 2020. The appointment
of the Administrator
occurred on 27 February 2020. Assuming
that the Administrator thereafter submitted monthly reports to the
Registrar of Labour
Relations, the request would notionally be in
respect of reports for the months of March to August 2020, i.e. 6
reports.
12.
The Applicants satisfied two of the three
requests, but refused to provide the reports on grounds formulated in
its response to
the rule 35(12) notice as follows:
“
2
Ad paragraph 2
2.1.
The Applicants dispute the relevance of the said reports. Further to
the aforementioned these
reports are submitted to the Registrar of
Labour Relations who exercises oversight over the administration
process.
2.2.
The reports so submitted are for the sole benefit of the Registrar of
Labour Relations in exercising
his statutory powers in respect of the
Second Respondent.
2.3.
The reports are therefore confidential and or privileged.”
13.
Paragraph 2.1 of the rule 35(12) response
bears specific mentioning since it alerted SAMA to a challenge to the
relevancy of the
reports. As explained below, the other grounds
of resistance fell by the wayside and the issue of relevance is the
only issue
remaining.
14.
SAMA was not satisfied with the response
and on 29 October 2020, SAMA’s attorney of record, Mr Bloem,
advised the Applicants’
attorneys that:
“
We
have been instructed to withhold service of our client’s
answering affidavit until such time as your client complies with
the
notice in terms of Rule 30A, by making available for inspection and
permitting the production of copies of the reports requested
in
paragraph 2 of our client’s notice in terms of rule 35(12).
15.
On the same day, SAMA also gave notice in
terms of rule 30A that it persisted in seeking discovery of the
reports. In that
notice, SAMA
inter
alia
recorded that “
the
reports supra is (sic) relevant to a reasonably anticipated issue in
the winding-up application
”.
While it is not required in terms of rule 35(12) for an issue to be
“reasonably” anticipated (I deal
with this further
below), SAMA made the statement that the issue (singular) to which
the reports would be relevant was one that
was reasonably
foreseeable.
16.
The Applicants did not respond to the
SAMA’s rule 30A notice and SAMA thereafter applied to compel
discovery of the reports
as requested by it. This is the
application before me.
The parties’ main
contentions
17.
In the founding affidavit in the rule 30A
application, deposed to by Mr Bloem, the statement is made that the
failure to make discovery
of the reports “
has
severely prejudiced
[SAMA]
in
that it is forced to litigate in the dark without having access to
the reports which are referred to in the Applicants’
founding
affidavit
” and also alleges that
as a result SAMA “
has been unable
to deliver its answering papers in the absence of the remainder of
the requested reports
”.
18.
Mr Bloem also states in his founding
affidavit that the reports were being requested because they “
are
relevant to reasonably anticipated issues in the main application and
which documents the First Respondent (sic) requested for
purposes of
preparing a comprehensive answering affidavit in the main
application.
” That is the
only statement made by Mr Bloem in support of the question of
relevance. It is, however, once again
worth emphasising that Mr
Bloem himself indicated that the anticipated issues are ones that may
be “reasonably anticipated”.
As an attorney, he is
no doubt appreciative of the substantive difference between
categorising the issues as “reasonably
anticipated” as
opposed to issues that might arise.
19.
Mr
Bloem then proceeds to attack the Applicants’ refusal to make
discovery on the basis that the reports are confidential
and / or
privileged. The attack became moot when counsel for the
Applicants indicated that the Applicants were not persisting
with the
contention that the documents are privileged, which is mentioned in
paragraph 2.3 of the Applicants’ response to
the rule 35(12)
notice. The Applicants persisted that the documents were
confidential, but this was correctly not argued
as a ground for
resisting discovery on its own.
[2]
20.
In answer, the Administrator contended that
the reports were only mentioned in passing and so as to simply
highlight and confirm
his duties as Administrator, but that he places
no reliance on the reports. In the heads of argument filed on
behalf of
the Applicants, the submission was made that “
the
Applicants do not rely on the “reports” submitted to the
Registrar of Labour Relations, in fact reference is made
to a process
and the obligations of the Administrator
”.
If the intention of the submission is to suggest that the reference
to the reports does not refer to actual documents,
it cannot be
correct. A verbal report is “made” and a
documentary report is “submitted”, which is
also what is
contemplated in paragraph 1.18 of the Terms of Reference. Any
suggestion that the reference to “reports”
is not to
actual documents should therefore be discounted immediately.
21.
The fact of the matter is, whether
mentioned to in passing or not, the affidavit refers to the reports.
In relevant part rule
35(12) provides:
“
(12)
Any party to any proceeding may at any time before the hearing
thereof deliver a notice […] to any other party
in whose
[…] affidavits reference is made to any document […] to
produce such document […] for his inspection
and to permit him
to make a copy or transcription thereof.”
22.
Reference is clearly made to the reports
and notionally the provisions of rule 35(12) come into play.
Mere reference
is, however, not the only requirement to be met for
discovery to take place under this rule. This is dealt with
further below.
23.
In
addition, the fact that the Applicants do not rely on the reports is
also not a bar to discovery under rule 35(12). The
reports
might not be relied on by the Applicants, but might be material in
relation to the issues that might arise or to a defence
that is
available to SAMA.
[3]
24.
In his answering affidavit the
Administrator also, again, put the relevance of the reports in
question and advanced an argument
that no case had been made out for
the relief being sought.
25.
The Administrator also stated the following
regarding the content of the reports:
“
The
reports have no bearing on the winding up application it can neither
influence and or determine the outcome of the main dispute
as it
relates to my duties as Administrator. The reports clearly have
no relevance to any “reasonably anticipated issue
in the main
application”, it cannot assist the First Respondent in its
defence, being the ultimate test in applications of
the nature.”
26.
This
denial of relevance under oath has significance. In
Continental
Ore Construction v Highveld Steel & Vanadium Corp Ltd
[4]
at
597E – F it was held:
“…
when a
party to an action refuses to make discovery of or to produce for
inspection any documents on the ground that they are not
relevant to
the dispute, the Court is not entitled to go behind the oath of that
party unless reasonably satisfied that the denial
of relevancy is
incorrect. The affidavit denying relevance is generally taken
as conclusive, and the Court will not reject
it unless a probability
is shown to exist that the deponent is either mistaken or false in
his assertion.”
27.
Caution must by necessity apply to applying
this principle at this stage of the present proceedings given that
Continental Ore
supra
dealt with a situation that arose after pleadings had closed in an
action. Different considerations are at play in the present
context since the issues have not yet crystalised
28.
In his replying affidavit Mr Bloem relies
on the fact that SAMA is entitled to participate in the
administration process and that
the reports are public documents.
Neither contention has any relevance for the present application
since SAMA’s remedy
to compel its participation in the
administration process lies elsewhere and the fact that the reports
are public documents similarly
gives it different mechanisms to
obtain the reports if it so chooses, but it is not relevant to the
present application, save that
it could have been a counter to
contentions regarding confidentiality.
29.
In reply, Mr Bloem also states that “
some
of the trade union members will be members of the first respondent.
It is however unclear how many members the trade
union have, and
these reports will give some indication of the membership of the
trade union, and may well also give an indication
as to why the
Applicants have launched the winding up application
”.
I deal with this particular statement in greater detail below.
30.
In paragraph 8 of the replying affidavit,
Mr Bloem then states the following:
“
The
initial perusal of the winding up application indicates that the
winding up application is an abuse of process and stands to
be
dismissed. The reports may well validate that view.”
31.
Lastly, Mr Bloem states that unless and
until SAMA has inspected the reports it will not be in a position to
determine whether they
have any bearing on the winding-up application
or whether they may assist SAMA in its defence in the winding-up
application.
At face value these statements accord with Thring
J’s
dictum
in
Unilever plc
at 336H - I. SAMA’s stance in this aspect can accordingly
not be faulted, but, as the authorities make clear, it does
not
exonerate SAMA from dealing with the issue of relevance.
The applicable legal
principles
32.
In
Democratic
Alliance and Others v Mkhwebane and Another
[5]
,
Navsa ADP summarised the application of rule 35(12) and the role that
relevance plays. It is worth repeating the relevant
passage in
full:
“
It
appears to me to be clear that documents in respect of which there is
a direct or indirect reference in an affidavit or its annexures
that
are relevant, and which are not privileged, and are in the possession
of that party, must be produced. Relevance is assessed
in relation to
rule 35(12), not on the basis of issues that have crystallised, as
they would have, had pleadings closed or all
the affidavits been
filed, but rather on the basis of aspects or issues that might arise
in relation to what has thus far been
stated in the pleadings or
affidavits and possible grounds of opposition or defences that might
be raised and, on the basis that
they will better enable the party
seeking production to assess his or her position and that they might
assist in asserting such
a defence or defences.”
33.
Schreiner
A said in
R
v Mathews
[6]
that relevancy is based upon a blend of logic and experience lying
outside the law and referred to this as “
a
practical or common sense approach
”,
to which the considerations of legally relevant or irrelevant are
added. In
Van
den Berg v Cooper & Lybrandt Trust (Pty) Ltd
[7]
it was said that, ultimately, the concept of relevance is essentially
a matter of common sense, having its foundation in the facts,
circumstances and principles of each particular case.
34.
The
test for relevance, accepted and applied by our courts
[8]
,
was laid down by Brett LJ in
Compagnie
Financiere et Commerciale du Pacifique v Peruvian Guano Co
[9]
where it was held that:
“
It
seems to me that every document relates to the matter in question in
the action which, it is reasonable to suppose, contains
information
which may - not which must - either directly or indirectly enable the
party requiring the affidavit either to advance
his own case or to
damage the case of his adversary. I have put in the words 'either
directly or indirectly' because, as it seems
to me, a document can
properly be said to contain information which may enable the party
requiring the affidavit either to advance
his own case or to damage
the case of his adversary, if it is a document which may fairly lead
him to a train of enquiry which
may have either of these two
consequences.''
35.
Logically,
depending on the stage of the proceedings, determining whether
documents are relevant can be done with more or less precision.
The former situation would be when, for example, a document is
referred to in a replying affidavit, at which stage the court has
the
benefit of a full set of affidavits before it. The latter would
be when proceedings are still at an embryonic stage,
such as the
present. In the context of rule 35(12), Friedman J said in
Gorfinkel
v Gross, Hendler & Frank
[10]
at 774B – C that deciding where the line should be drawn
between what is relevant and what is irrelevant is difficult.
36.
By
necessity drawing this proverbial line entails a judicial
discretion. In
Centre
for Child Law v Hoërskool Fochville
[11]
,
Ponnan JA stated that the court has a general discretion in terms of
which it is required to try to strike a balance between the
conflicting interests of the parties to the case. Ponnan JA
further stated that:
“
Implicit
in that is that it should not fetter its own discretion in any manner
and particularly not by adopting a predisposition
either in favour of
or against granting production.”
37.
Navsa ADP approved of this approach in
Democratic Alliance
supra
at
[40], albeit when dealing with what Navsa DPA described as “
the
question of onus in relation to an application to compel the
production of documents in terms of rule 35(12)
”.
After approving of Ponnan JA’s approach in
Fochville
supra
,
Navsa DPA goes on to state the following regarding how a court should
approach exercising this discretion:
“
The
court will have before it the pleading or affidavit in question, the
assertions by the party seeking production as to why it
is required
and why it falls within the ambit of the rule and the countervailing
view of the party resisting production. The basis
for requiring the
document, at the very least, has to be provided. The court will then,
based on all the material before it, exercise
its discretion in the
manner set out in Hoërskool Fochville
38.
Of particular relevance to the present
matter is the statement by Navsa DPA that, in the context of
relevance, “
the basis for
requiring the document, at the very least, has to be provided
”.
What is to be understood from the term “basis”? The
answer to that lies in paragraph [41] of the
Democratic
Alliance
(quoted in paragraph 32
above). This passage contemplates it is for
the applicant seeking discovery to identify aspects or issues that
might arise
in the pleadings or affidavits; that the requesting party
must identify possible grounds of opposition or defences that might
be
raised and, on the basis that they will better enable the party
seeking production to assess his or her position and that they might
assist in asserting such a defence or defences.
39.
The level of particularity that is required
to provide this basis for the request is not one that can be cast in
stone, but will
depend upon the facts of the particular matter.
To argue otherwise would be to undermine the discretion referred to
by Ponnan
JA in paragraph [18] of
Fochville
supra.
Self-evidently, if a party refers to and places reliance on a
document to advance its own case, then the document is obviously
relevant. Laying the basis in such a situation ought to be a
straightforward enough exercise.
40.
The
test at this stage of the proceedings is not what “will be”
or “is” relevant, but rather what “might”
be
relevant. It is self-evidently a much lesser hurdle to
overcome. In
Ismail
v R
[12]
the Supreme Court of the Transvaal were called upon to consider the
word “might” as used in section 4(2) of the Immigrants
Restriction Act (Act 2 of 1907) which read as follows:
"Prohibited
immigrant shall mean" (inter alios) "any person who at the
date of his entering or attempt to enter this
colony is subject, or
would if he entered this colony be subject, to the provisions of any
law in force at such date which might
render him liable either at
such date or thereafter, if found therein, to be removed from or to
be ordered to leave this colony,
whether on conviction of an offence
against such law or for failure to comply with its provisions or
otherwise in accordance with
its provisions."
41.
In interpreting the word “might”
as used in the section, Innes CJ said the following at 1091 - 1092:
“
Now,
in the ordinary sense, anything might happen which it is possible
could happen. But I am clear that "might" cannot,
in this
connection, be taken, in its literal and widest sense, as meaning
"might under any conceivable circumstances"
render him
liable to be removed from the colony; because that construction would
lead to the most extraordinary results. […]
The only way to construe
it so as to make the definition reasonably consistent is to read it
as meaning "might, under circumstances
then existing" ---
"might, under circumstances existing at the date of entry."”
42.
Applied to the present context it would
mean that the documents requested (
in
casu
the reports) need only be relevant
to aspects, issues or possible grounds of opposition that could
possibly arise, but it must be
a possibility rooted in the
circumstances of the matter at the time of the application, which
would include affidavits filed of
record, as well as any other
information placed before the court considering the application.
43.
In
argument counsel for SAMA submitted that the law in regard to the
role that relevance plays as a requirement for seeking discovery
under rule 35(12) was only laid down in
Democratic
Alliance
supra
.
That submission cannot be correct – the role of relevance was
already clearly stated in
Fochville
supra
at
[18]
[13]
– a case to
which no reference was made by SAMA in its heads of argument.
SAMA therefore knew or ought to have known
that it had to deal with
the issue of relevance of the reports and a failure to do so cannot
be excused on this basis.
The notional issues in
the winding-up application
44.
The present matter concerns a winding-up
application and these matters must be considered in that context.
45.
In argument I put it to SAMA’s
counsel that the thrust of the request seems to be aimed at the just
and equitable ground for
winding-up. He agreed with me on this
score, albeit that he did not concede that SAMA’s alleged
insolvency had no bearing
whatsoever. It is therefore
appropriate that I deal briefly with the aspect of SAMA’s
alleged indebtedness and the
possible bearing that the reports may
have on that.
46.
In paragraph 7 of his replying affidavit in
the rule 35(12) application Mr Bloem stated that:
“
Some
of the trade union members will be members of the first respondent.
It is however unclear how many members the trade union
have, and
these reports will give some indication of the membership of the
trade union, and may well also give indication as to
why the
Applicants have launched the winding up application.”
47.
It is not clear whether Mr Bloem’s
statement is intended to go to the question of SAMA’s alleged
indebtedness or the
just and equitable ground. In the heads of
argument filed by SAMA’s counsel,
it was submitted that
“
the reports may contain important information regarding the
administration process which may include information regarding the
assets
and liabilities of the second applicant and the debt which it
alleges is owed by the respondent.
” This submission
is followed by the submission that the reports may therefore give an
indication why the Applicants
launched the main application and
reference is made to paragraph 7 of Mr Bloem’s replying
statement. Mr Bloem does
not couple his statement to SAMA’s
indebtedness, but rather to the reason why the Applicants launched
the application.
The submission accordingly does not accord
with what Mr Bloem states in his replying affidavit.
48.
SAMA’s alleged indebtedness is dealt with in paragraphs
91 to 106 of the founding affidavit, to which I was not referred in
argument. The alleged indebtedness of R12,283,317.33 is stated
to be the bargaining council levies received by SAMA on behalf
of
SAMATU for the period 2009 until 2020. The make-up of the
amount of R12,283,317.33 is stated to be:
48.1
Payments received from the Public Service
Bargaining Council for the period of 1 April 2012 to 1 November 2018,
amounts to R8,474,157.39;
48.2
Proof of contributions received as declared
in the annual financial statements of SAMA for the period of 1 April
2009 to 31 March
2012, in the total amount of R1,140,483.00;
48.3
A calculation of the Agency fee levies for
the period of 1 April 2005 to 31 March 2009, in the amount of
R2,668,676.94 as calculated
by actuaries appointed by the
Administrator.
49.
Each of the amounts making-up the
R12,283,317.33 is supported by annexures attached to the
founding affidavit.
50.
Mr Bloem made no attempt to indicate what relationship, if
any, the reports will have to the abovementioned allegations or to
the
annexures relied upon by the Applicants to support the amounts
making-up the R12,283,317.33, nor was any such attempt made in
argument
before me.
51.
The question of whether the reports may bear any relevance to
the question of SAMA’s alleged indebtedness is therefore
stillborn.
It comes as no surprise therefore
that in argument I was only referred to the paragraphs in the
founding affidavit that dealt with
the just and equitable ground of
winding-up.
52.
In
Rand
Air (Pty) Ltd v Ray Bester Investments (Pty) Ltd
[14]
at
349I, Coetzee J stated that “
just
and equitable' basis for winding up a company 'is rather a special
ground under which only certain features of the way in which
a
company is being run or conducted can be questioned to the point of
requesting the court to wind it up
”.
He then identified five categories, which were conveniently
summarised in
Wiseman
v Ace Table Soccer (Pty) Ltd
[15]
as:
“
1.
The disappearance of the substratum of the company .
2.
The illegality of its objects and fraud committed in connection
therewith.
3. A
deadlock in the management of the company's affairs.
4.
Grounds analogous to the dissolution of partnership.
5.
Oppression.”
53.
Although
these categories do not constitute a complete and closed list, they
do serve the purpose of useful practical guidelines.
[16]
I mention them because these grounds are notionally what relevance of
a document has to be assessed against in the context
of a just and
equitable winding-up. It is not clear upon which of these
grounds the Applicants rely. More pertinently
for the present
application, it is also not clear to me which of these grounds SAMA
intends attacking since none were specifically
identified by SAMA.
Analysis
54.
The founding affidavit in the rule 35(12)
application only contains the conclusionary statement that the
documents are relevant
to “
reasonably
anticipated issues in the main application
”.
The only statements that elucidate what is actually a conclusionary
statement are the following:
54.1
That the reports may give an indication as
to why the Applicants have launched the application;
54.2
That the refusal to provide the reports “
is
suspicious and may be an indication of collusion between the
Applicants and the Registrar
”;
and
54.3
That the discovery of the reports is in the
interest of “justice and transparency”.
I deal with each these
propositions in turn.
55.
In paragraph 64 of the founding affidavit,
the Administrator makes the following statements:
“
64.
SAMA has engaged in a campaign to persuade union members to cancel
their union subscriptions (deducted
via stop order on the PERSAL
payroll system). This campaign persists despite the Labour Court
order. As far as I have been
able to ascertain from inquiries
to the Department of Health, this has resulted in approximately 1440
union members cancelling
their union subscriptions to date. I
estimate that there are approximately 7500 doctors in total who have
union subscription stop
orders in place. If my information is
correct, this means that to date, SAMA has managed to persuade
approximately 19% of the total
union membership to cancel their union
subscriptions.”
56.
If the intention is to raise an issue about
the number of union member referred to in paragraph 64 of the
founding affidavit, the
intention is evidently misplaced. The
Administrator is not contending for these numbers as matters of fact
– he states
these numbers as estimations and the statement has
no relevance to the Applicants’ causes of action. How the
reports
can be of relevance in this regard is not clear.
57.
In
regard to Mr Bloem’s statement that the reports may shed light
on why the Applicants brought the winding-up application,
the import
of the statement is not clear. More particularly, why is this
important and why would the reports be relevant
to such a topic?
Again, no detail was provided to place the court in a position to
evaluate this statement. If it sought
to obliquely make a
suggestion in the direction of the so-called clean hands
principle
[17]
, that is not
stated by Mr Bloem in his affidavits and it was also not argued
before me by counsel for SAMA.
58.
In regard to Mr Bloem’s statement
that the reports may validate the view that “
the
winding up application is an abuse of process and stands to be
dismissed
” the statement is
clearly hitched to what Mr Bloem describes as an “
initial
perusal
” of the founding
affidavit. However, what the court is not told is in what
respects a perusal of the founding affidavit
indicates an abuse of
process and in what respects the reports could even notionally
contribute to supporting the abuses which
Mr Bloem states he
perceives in the founding affidavit. My earlier comment in
regard to a possible suggestion in the direction
of the clean hands
principle also applies to this statement.
59.
Mr Bloem states that the founding affidavit
shows abuses of process and that the reports may validate this.
In that context
it is to be expected that Mr Bloem would state what
these abuses are that he has identified and why, given the reporting
obligations
of the Administrator and the topics upon which he is
expected to report, the reports may be relevant to an argument that
there
is an abuse of process. None of these details were
provide.
60.
The relevance of the contention that the
reports may show “
collusion
between the Applicants and the Registrar
”
is also not clear. For this loaded statement to be of any worth
in the present context it would have been necessary
for Mr Bloem to
indicate why such collusion is suspected at this stage, why it is
relevant to the present application and how reports
by the
Administrator to the Registrar might have a possible bearing on this
topic. No such information was provided and none
is readily
apparent.
61.
As to SAMA’s the reliance on “justice
and transparency” as a ground for compelling discovery, this
was not argued
before me and it is not clear what Mr Bloem intended
by this. If it seeks to import considerations applicable under
administrative
law and reviews to the present proceedings, it is a
misplaced endeavour. This contention should accordingly be
ignored as
a ground for compelling discovery.
62.
As mentioned above, in argument counsel for
SAMA referred me to a series of paragraphs in the founding affidavit
which he submitted
showed that the documents would have relevance.
This was not raised in the affidavits filed in the rule 35(12), but I
nonetheless
deal with them.
63.
It is alleged that the Administrator
started engaging with SAMA immediately after his appointment and
meetings with SAMA were held
on 5, 16, 19 and 25 March 2020.
64.
In an email dated 25 March 2020 (attached
to the founding affidavit as Annexure “GV16”) the
statement is made that “
there is
an agreed goodwill on both sides to reconcile on previous personal
and business differences
”.
65.
It seems that shortly after this recordal
relations soured and eventually led to urgent application under case
number J1973/19 in
the Labour Court on 13 May 2020 and the subsequent
judgment of Van Niekerk J issued on 18 May 2020. In his
judgment Van Niekerk
J recorded the following facts:
“
[11]
After the union was placed in administration, SAMA has continued to
deduct what it refers to as monthly membership
subscription payments.
There were a number of meetings during March 2020 between SAMA and
the administrator where SAMA avers that
it was explained to him that
there was no membership of the union and that the union had no
structures. In SAMA’s view, it
remains the administrator’s
function to determine which of SAMA’s members wish to be union
members and it was for him
to create the formal structures of the
trade union and to see to the election of office bearers. After the
meetings, the administrator
insisted that the monthly membership
payments of all employed doctors be paid over to him, in his
representative capacity. SAMA
avers that the administrator ‘could
not or would not understand that the monthly membership subscription
payments were the
subscription fee paid to SAMA by its members,
whether they are in private practice or whether they are employed’.
[12]
The difference between the administrator and SAMA led ultimately to
the communiqué issued
by SAMA to its members in which it
advised them of the problems experienced with the intended separation
of SAMA and the union.
It also informed employed doctors of the
intention to migrate their debit orders from PERSAL to personal debit
orders. It would
appear that this communiqué had the
consequence of the letter of demand, addressed by the administrator
to SAMA. In that
demand, certain information in respect of the
membership of the union was required. In the interim, the
administrator approached
the chief director: health sector
bargaining, with a demand that the banking account for the payment of
monthly membership subscriptions
deducted from PERSAL be changed from
SAMA to the union. On 20 April 2020, the chief director addressed a
letter to the director:
PERSAL with a request that the
administrator’s demand be executed. SAMA’s attorneys
addressed a letter to the director:
PERSAL to demand that the
instruction from the Department of Health be ignored. This demand was
refused, and proceedings were instituted
in the High Court to
interdict and restrain the National Treasury from heeding to the
Department of Health’s instruction.
That application has been
set down for hearing the High Court on 19 May 2020.
[13]
In short, SAMA takes the view that the union was always an integral
part of its own organisation,
and established solely for the purpose
of providing services to those of its members who are employed, as
opposed to those members
in practice for their own account. The union
never existed as a discreet legal entity, certainly since 2016 it has
had no separate
structures, and no separate list of union members was
ever maintained, and in reality, there are no union members. The
deductions
effected through the PERSAL system are in respect of
SAMA membership fees; they are not trade union membership
subscriptions.
On this basis, the information sought by the
administrator is simply not in the position of SAMA, and there is no
basis for the
interlocutory and other relief sought by
administrator.”
66.
Mr Bloem’s affidavit does not suggest
that these facts would be in issue, nor was I told from the bar that
they would be placed
in issue. On a plain reading of these
passages I also fail to see how they could in any way be contentious
or give rise to
aspects, issues or possible grounds of opposition
that would need to be dealt with.
67.
In paragraphs 52 to 62 of the founding
affidavit, the Administrator relates the lead-up to the judgment of
Van Niekerk J, as well
as the subsequent litigious travails between
the parties. These are all recordals of fact that are evident
from the judgments
of Van Niekerk J (both on 18 May 2020 and his
subsequent refusal of leave to appeal on 25 June 2020) and Raulinga J
(on 17 July
2020). I was not told which of these facts would be
placed in issue, if any.
68.
Paragraph 62 of the founding affidavit
repeats paragraphs out of the judgments of Van Niekerk J. I
fail to see how this recordal
could conceivably raise any issues.
69.
Paragraphs 64 to 67 of the founding
affidavit deal with what the Administrator calls a “campaign to
persuade union members
to cancel their union subscriptions”.
70.
I have already dealt with paragraph 64 of
the founding affidavit above. Paragraphs 65 and 66 of the
founding affidavit deal
with what the Administrator calls “
false
and deliberately misleading messages
”
from SAMA. The documents relied upon by him for his statement
in paragraph 65 are referred to in the sub-paragraphs
of paragraph 66
(later numbered erroneously as sub-paragraphs of paragraph 67) and
attached to the founding affidavit. He
states his opinion on
what is to be gleaned from these documents. Paragraph 67 deals
with conclusions that the Administrator
seeks to draw from the
communications referred to in paragraph 66. Again, this is his
opinion on the documents attached to
the founding affidavit. I
fail to seek what possible aspects, issues or possible grounds of
opposition might arise on these
paragraphs to which the reports could
have relevance.
71.
Paragraph 68 of the founding affidavit
relate the steps taken by him to normalise the SAMATU’s
affairs. In the context
of the main application this is at best
a neutral statement but more probably irrelevant to the main
application. What possible
issue might arise from this is not
clear nor does SAMA seem to contend for any. The reports could
accordingly not be relevant
in this regard.
72.
Paragraphs 70 to 74 of the founding
affidavit all deal with submissions made by the Administrator based
on the facts related by
him in the paragraphs 52 to 66 of the
founding affidavit. The reports could have no conceivable
relevance to these submissions.
73.
In paragraphs 75 to 83 of the founding
affidavit and under the heading of “
It
is just and equitable that SAMA be placed in winding up
”,
the Administrator advances a series of arguments, again all based on
the facts related by him in the paragraphs 52 to 66
of the founding
affidavit. Again, it is not clear how the reports could
possibly relate to these arguments. They are
either well-made
or not. The reports cannot contribute to the debate on this
score.
74.
Paragraph 86 deals with submissions made in
regard to extracts from SAMA’s audited financial statements.
The reports
could have no conceivable relevance to the statements in
this paragraph.
75.
Paragraph 87 deals with SAMA’s
refusal “
to account for and or pay
over to the Trade Union all funds received from SAMA for an on behalf
of the Trade Union since its registration
”.
This does not seem to be in issue that SAMA is refusing to make
payments. Again, how the reports could in any
meaningful way
contribute to a notional dispute of this statement is not clear.
76.
Paragraphs 88 of the founding affidavit
contains a submission that an investigation of the sums of money
received by SAMA, in the
form of subscription fees and bargaining
council levies, is in the interest of SAMATU’s members.
This seems to be self-evident
if the prior submissions based on the
facts related by the Administrator in paragraphs 52 to 66 of the
founding affidavit are correct.
77.
Paragraph 90 of the founding affidavit is a
submission regarding the interest that the Registrar of Labour
relations has in the
application. The reports can have no
bearing whatsoever on this paragraph.
78.
As is evident from the above analysis, the
reports cannot be relevant to aspects, issues or possible grounds of
opposition that
might possibly arise.
79.
The case made out by SAMA for discovery
simply does not measure up to the standard in
Democratic
Alliance
supra
.
The application accordingly falls to be dismissed.
80.
The Applicants sought a punitive costs
order against SAMA’s legal representatives
de
bonis propriis
. On the facts
there is no basis for such a request.
81.
The parties agreed that, depending on the
outcome of the application, I should set time periods for the filing
of the further affidavits
in the matter. The order caters for
this as well.
Order:
82.
In the premises I make the following order:
82.1
The First Respondent’s application
for discovery in terms of rule 35(12) is dismissed.
82.2
The First Respondent is to pay the costs of
the application on the scale as between party and party, including
the costs consequent
upon the use of two counsel.
82.3
The First Respondent is directed to file
its answering affidavit within 10 court days from the handing down of
this judgment.
82.4
The time periods for the filing of further
process as provided for under the Uniform Rules of Court shall apply
thereafter.
DIRK
R. VAN ZYL
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
Appearances:
For
the Applicant:
Adv G. Fourie SC
Adv
D. Groenewald
Instructed
by:
Serfontein Viljoen & Swart
For
the Respondent:
Adv T. P. Kruger SC
Adv
F. Storm
Instructed
by:
Welman & Bloem Incorporated
[1]
In
the founding affidavit it is recorded that the judgment of Van
Niekerk J on 18 May 2020 is the subject of a petition to the
Labour
Appeal Court and it is also recorded that the judgment and order of
Van Niekerk J is the subject of an appeal.
[2]
Crown Cork & Seal Co Inc v
Rheem SA (Pty) Ltd 1980 (3) SA 1093 (W)
[3]
Democratic
Alliance and Others v Mkhwebane and Another
2021 (3) SA 403
(SCA) at
[34].
[4]
Continental Ore Construction v
Highveld Steel & Vanadium Corp Ltd
1971 (4) SA 589
(W) at
597E – F.
[5]
Democratic
Alliance and Others v Mkhwebane and Another (1370/2019)
[2021] ZASCA
18
(11 March 2021) at [41].
[6]
R
v Mathews
1960 (1) SA 752
(A) ay 758A - B.
[7]
Van
den Berg v Cooper & Lybrandt Trust (Pty) Ltd
[2000] ZASCA 77
;
2001 (2) SA 242
(SCA) at paragraph
[26]
.
[8]
See
inter
alia
Rellams
(Pty) Ltd v James Brown & Hamer Ltd
1983 (1) SA 556
(N) at
564A, Continental Ore Construction v Highveld Steel & Vanadium
Corporation Ltd
1971 (4) SA 589
(W) at 596H, Carpede v Choene
NO and Another
1986 (3) SA 445
(O) at 452C—J and
Swissborough Diamond Mines (Pty) Ltd v Govt of the RSA
1999 (2)
SA 279
(T) at 317F – G.
[9]
Compagnie
Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11
QBD 55.
[10]
Gorfinkel
v Gross, Hendler & Frank
1987 (3) SA 766
(C) at 774B –
C.
[11]
Centre
for Child Law v Hoërskool Fochville
2016 (2) SA 121
(SCA)
at [18].
[12]
Ismail
v R 1908 TS 1091.
[13]
Centre
for Child Law v Hoërskool Fochville
2016 (2) SA 121
(SCA)
at [18]; see also: Potch Boudienste CC v Firstrand Bank Limited
(23898/15) [2016] ZAGPPHC 335 (25 April 2016) at 21.
[14]
Rand
Air (Pty) Ltd v Ray Bester Investments (Pty) Ltd
1985 (2) SA
345
(W) at 349I.
[15]
Wiseman v Ace Table Soccer (Pty)
Ltd
1991 (4) SA 171
(W) at 182D – E.
[16]
Cuninghame
v First Ready Dev 249 (Assoc Incorporated under Section 21)
2010
(5) SA 325
(SCA) at paragraph [14].
[17]
Henochsberg on the
Companies Act
2008
, page 329; Thunder Cats Inv 92 (Pty) Ltd v Nkonjane Economic
Prospecting & Inv (Pty) Ltd
2014 (5) SA 1
(SCA) at [27];
Ebrahimi v Westbourne Galleries Ltd
[1973] AC 360
(HL) at 374;
[1972] 2 All ER 492
at 507.