About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Durban
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Durban
>>
2019
>>
[2019] ZAKZDHC 34
|
|
Distell Limited v Naidoo and Others (2557/2016) [2019] ZAKZDHC 34 (4 December 2019)
IN THE
HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE NO.
2557/2016
In the matter between:
DISTELL LIMITED
APPLICANT
(R
espondent in the
interlocutory application
)
and
CHRIS NAIDOO
FIRST
RESPONDENT
KANTHAKUMARI NAIDOO
SECOND RESPONDENT
PRAVESH RAJKUMAR
SINGH
THIRD RESPONDENT
HEMANTH RAJKUMAR SINGH
FOURTH RESPONDENT
(Applicants in the
interlocutory application)
O R D E R
In the result, the
following orders are made:
1.
The application is dismissed.
2. The first to
fourth respondents are directed to pay the costs of the interlocutory
application jointly and severally, the one paying the other to be
absolved. Such costs are to be on an attorney and client scale.
J U D G M E N T
Henriques J:
Introduction
[1]
This is an opposed interlocutory application in terms of rule 35(12)
of the Uniform
Rules of Court in which the first to fourth
respondents (the respondents) seek, inter alia, an order compelling
the applicant (Distell)
to produce for inspection and/or copying, the
documents referred to in the rule 35(12) notice of 6 May 2016, being
the ‘unpaid
invoices for June 2013 and July 2013’
referred to in paragraph 14 of the founding affidavit in the main
application marked
as annexure “FA10”.
[2] For ease of reference,
I will refer to the parties as they were cited in the main
application. The applicant will be referred to as Distell and the
respondents collectively as the respondents, alternatively in
their
individual capacities.
The relief foreshadowed in the notice of motion
[3]
Apart from seeking orders directing the applicant to produce the
documents for inspection
and copying, the respondents seek the
following orders:
‘
2.
In the event that the applicant fails to comply with the terms of
paragraph 1 above,
the respondents are granted leave to apply on the
same papers, supplemented as far as may be necessary, for an order
dismissing
the application instituted by the applicant under case
number 2557/2016 (“the main application”).
3.
To the extent necessary the respondents are granted an extension of
time to deliver
their answering affidavit in the main application and
are directed to do so within 10 (TEN) days of the date of the
applicant’s
production of the documents pursuant to paragraph 1
above.
4.
The main application enrolled for hearing on 04 August 2016 at the
instance of
the applicant is struck from the roll, alternatively,
adjourned
sine die
.
5.
The applicant is directed to pay the costs of this application.
6.
The applicant is directed to pay the wasted costs occasioned by the
enrolment
of the main application for hearing on 04 August 2016.’
[4] It is common cause that
Distell instituted application proceedings against the
respondents in their capacities as sureties and co-principal debtors
of Melody Hills Trading 184 (Pty) Ltd (Melody Hills) for payment
of
the sum of R2 001 523.24 together with interest and costs
(the main application). Prior to instituting the main application,
Distell obtained final liquidation orders under case numbers
10404/2013 and 10403/2013 against Melody Hills and 888 Liquor Depot
(Pty) Ltd (888) on 24 April 2015 before Ntshangase J as a consequence
of Melody Hills’ inability to pay the debt owed to
Distell in
such amount.
[5] A notice to oppose was
filed in the main application on behalf of all the respondents
on 23
March 2016. After the
dies
for the filing of an answering
affidavit had expired, the respondents served a notice in terms of
Uniform rule 35(12) on Distell
on 6 May 2016. In response to
such request, on 27 May 2016, Distell declined to produce the
documents as it held the view
that the rule 35(12) notice constituted
an abuse of process. As a consequence, the respondents instituted a
rule 30A application
after a rule 30A notice had been served on 7
June 2016.
[6] In the interlocutory
application before me, the respondents essentially indicate
they
require the documents in paragraph 1 to formulate their defence and
are relevant to the proceedings. Distell in turn indicates
that the
documents are irrelevant and the rule 35(12) notice and application
constitutes an abuse of process of court.
[7] Prior to dealing with
the merits of the interlocutory application, it is necessary
to deal
with the facts relied on by the parties which form the contextual
basis for the submissions of the parties, and the relief
sought in
the interlocutory application.
Melody Hills’ indebtedness
[8]
Distell instituted liquidation proceedings against Melody Hills and
888. The basis
on which provisional winding up orders were obtained,
was as a consequence of Melody Hills as principal debtor being unable
to
pay its debts to Distell and 888 as guarantor for Melody Hills’
liability. It is common cause that Melody Hills would purchase
liquor
products from Distell, take delivery thereof and would in turn
distribute the liquor products to Midmar Liquors Limited
(Midmar).
[9] From Ntshangase J’s
judgment, it is evident that Midmar was placed under business
rescue
in 2012. Despite this, Midmar continued trading and Melody
Hills continued supplying liquor products to it. The
third
respondent also deposed to affidavits on behalf of Melody Hills’
and 888 in opposition to the liquidation proceedings.
Although the
directors of Melody Hills were reflected as being the first and third
respondents, all the respondents save for the
second respondent were
copied in the email exchanges.
[10] The fourth respondent was the
attorney of record in such proceedings as well, and had approached
Distell for credit on Melody Hills’ behalf. In addition, it
would appear that the fourth respondent had a substantial interest
in
Midmar. It is also apparent from the papers filed in these
proceedings and the exchange of email correspondence, that
the fourth
respondent was engaged in discussions with Distell regarding Melody
Hills’ indebtedness and the business rescue
practitioner.
[11] In the liquidation proceedings,
Distell indicated that Melody Hills was indebted to it in the
amount
of R2 001 523.24 plus interest and costs in respect of
liquor sold and delivered on account to Melody Hills. The
debt sued
on consisted of unpaid invoices for June and July 2013. A statement
dated 31 August 2013 reflecting the amount of Melody
Hills’
indebtedness was put up in the liquidation proceedings, it being
common cause that no goods were sold and delivered
in August 2013. It
is apparent that this amount constituted the balance owed by Melody
Hills, it having made several payments towards
the capital amount
owing.
[12] The basis on which Melody Hills
and 888 opposed the confirmation of the provisional winding
up orders
was to dispute that Distell had made delivery of any liquor to it at
its nominated address and that it had a branch in
Parow North in the
Western Cape. In addition, they submitted that Distell had not proved
Melody Hills’ indebtedness as it
had failed to produce all the
invoices and delivery notes it relied on. Melody Hills did not
challenge the amount of the indebtedness
and sought copies of the
suretyship agreements.
[13]
Ntshangase J found that Melody Hills had registered premises situated
in the Western Cape and
that a director of Melody Hills, being the
third respondent, had signed minutes of meetings in which Melody
Hills had resolved
to relocate its registered premises from Parow
North to Bellville in the Western Cape. The court also found that
Distell had proved
on a balance of probabilities that goods had been
sold and delivered as evidenced from the statement of account annexed
to the
papers.
[14] In addition, the court found
Melody Hills request for all the invoices and delivery notes in
substantiation of its indebtedness unreasonable and that the
failure by Distell to produce all the delivery notes and invoices
was
not fatal to its case. Although the court indicated that it would
have been possible for Distell to provide the invoices for
June and
July 2013, it found that the third and fourth respondents exchanged
correspondence in respect of Melody Hills’ indebtedness
with
the creditors and did not dispute same.
[15] A factor which the court
considered relevant to Melody Hills’ indebtedness was clause
12
of the agreement concluded between the parties which provided that a
certificate would be prima facie proof of Melody Hills’
obligations to Distell and that the amount was due and payable
together with any interest thereon. Clause 12 of the credit agreement
was quoted in the judgment
[1]
and provided:
‘
Unless
the applicant (respondent) objects in writing within 14 (fourteen)
days of date of the statement to any item appearing thereon,
the
applicant shall be deemed to have accepted the statement as correct
.’
The court
found that as Melody Hills did not object to the statement, it
signified its acceptance of the certificate evidencing
the amount of
its indebtedness.
[16] In addition, correspondence
exchanged by the fourth respondent’s firm of attorneys
indicated
he was liaising with the business rescue practitioner,
Juanito Damons to ensure that monies held in trust be paid to Distell
in
settlement of Melody Hills’ indebtedness to Distell. The
email correspondence made it clear that liquor was supplied to Melody
Hills by Distell, who in turn onward supplied same to Midmar.
Consequently, Ntshangase J found that Distell had proved on
a balance
of probabilities that liquor had been sold and delivered as evidenced
from the statement of account annexed to the liquidation
papers. The
indebtedness to Distell was not disputed on bona fide and reasonable
grounds. Melody Hills and 888 were unable to pay
their debts, Melody
Hills being commercially insolvent as it was unable to pay its debts
when they fell due for payment. It was
for these reasons that the
court granted final winding up orders.
Submissions of the parties
[17]
The respondents submit that they are entitled to the documents as
they are relevant to the main
application and are necessary to
consider their defence and place relevant facts before the court in
an answering affidavit. Distell
opposes the granting of the order on
two grounds, firstly, that the documents are irrelevant to the
proceedings and secondly, the
rule 35(12) notice constitutes an abuse
of court process.
The respondents’ submissions
[18]
Mr
Alberts
, who appeared for the respondents, submitted that
the sureties, certainly three of them, were not intimately involved
in the running
of the businesses of Melody Hills, 888 and Midmar.
Therefore, in order to prepare their defence in the main application,
they require
access to the invoices which formed the basis of the
causa
between the sureties and Distell. It is for these
reasons, he submitted, that relevance had been established. In
addition, he indicated,
without conceding the point, that certainly
in relation to the fourth respondent, that as he was involved in the
day-to-day running
of the entities, he certainly could not make such
a request.
[19] However, given that the
respondents were sued both as sureties and co-principal debtors, they
were entitled to copies of the invoices which formed the basis for
Distell saying the amount was due by them. They would, in such
capacities, be entitled to copies of the invoices, certainly the
invoices of June and July 2013. He denied that the sureties were
embarking on a fishing expedition and indicated that all that the
sureties were seeking were copies of the invoices relied on by
Distell for Melody Hills’ indebtedness.
[20] In addition, Mr
Alberts
required me to have regard to the Supreme Court of Appeal
judgment in
Centre for Child Law v Hoërskool Fochville &
another
[2]
where Ponnan JA writing for the full court held 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’.
[21] At the hearing of the matter, I
raised with Mr
Alberts
that the rule 35(12) notice contained
incorrect references to the affidavit and annexures. He indicated
that the references are
references to the main affidavit filed in the
liquidation application and essentially all that the respondents’
sureties
required were copies of the unpaid invoices for June and
July 2013 to ascertain whether or not these goods were sold and
delivered.
He also indicated that although the delivery notes may be
in the possession of Melody Hills and 888, as both these entities are
in liquidation, the respondents are not able to access these
documents easily.
Distell’s submissions
[22]
Mr
van Nieuwenhuizen
who appeared for Distell submitted that
Mr
Alberts
had three insurmountable difficulties namely:
(a) The submissions and argument
he raised at the hearing of the application were not canvassed
in the
affidavits in support of the relief the respondents seek.
(b) The Supreme Court of Appeal
decision of Ponnan J is also to the effect that when exercising
such
discretion a court must not make an order for the production of
documents
which cannot be produced, or which are privileged and/or
which are irrelevant
. The respondents have to satisfy me that the
documents are relevant to the relief they seek.
(c) That this is no more
than a fishing expedition adopted by the sureties as the affidavits
clearly show all three of them, save the second surety who is the
wife of the first surety, were intricately involved in the operation
of the businesses.
[23] Mr
van Nieuwenhuizen
submits that the documents are irrelevant to the main application
because of the manner in which Melody Hills opposed the winding
up
application. The respondents’ indebtedness arises not from them
being sureties, but being co-principal debtors with Melody
Hills. In
the liquidation application, Melody Hills only challenged the fact
that goods were delivered to the address from which
it operated its
business. The certificate of balance and the amount of the
indebtedness were never challenged during the liquidation
proceedings.
[24] As such defence was rejected by
the court in the winding up applications, and as there was no
dispute
in relation to the indebtedness, the respondents cannot now seek to
challenge the basis of their indebtedness. Distell
further submits
that the respondents agreed that any acknowledgement of indebtedness
and admission by Melody Hills would be binding
on them, that a
certificate signed by Distell setting out the amount of the sureties’
liability would be ‘
prima facie
proof for purposes of
obtaining judgment’ and that the respondents renounced any
benefits to which they as sureties might
in law be entitled,
including the benefits of excussion, division, cession of action,
revision of accounts and no value received.
[25] Juxtaposed against this are the
respondents’ submissions that the invoices are relevant,
as
being sureties, they are entitled to raise any defence which Melody
Hills could have raised in the proceedings specifically
in the main
application. In consequence thereof, they are in these proceedings,
entitled to challenge their indebtedness and the
amount allegedly
owed by Melody Hills.
Issues for determination
[26]
The issues for determination in this application are the following:
(a) Whether the respondents as
sureties are entitled to an order for the inspection and copying
of
the documents referred to in the rule 35(12) notice dated 6 May 2016?
Linked to this is whether the documents are relevant and
whether the
application is an abuse of process?
(b) Whether the respondents are
entitled to an extension of time within which to deliver their
answering affidavit in the main application?
(c) Whether the respondents
are entitled to the orders referred to in paragraphs 4 and
6 of the
notice of motion?
[27] Essentially the respondents
indicate they require the documents to formulate their defence and
are therefore relevant to the proceedings. Distell in turn indicates
that the documents are irrelevant and the rule 35(12) application
constitutes an abuse of process of court.
Rules 35(12) and 35(14)
[28] The starting point in my view are
the provisions of rule 35(12) and (14) which read as follows:
‘
(12)
Any party to any proceeding may at any time before the hearing
thereof deliver a notice as near as
may be in accordance with the
Form 15 in the First Schedule to any other party in whose pleadings
or affidavits reference is made
to any document or tape recording to
produce such document or tape recording for his inspection and to
permit him to make a copy
or transcription thereof. Any party failing
to comply with such notice shall not, save with the leave of the
court, use such document
or tape recording in such proceeding,
provided that any other party may use such document or tape
recording.
.
. .
(14)
After appearance to defend has been entered, any party to any action
may, for purposes of pleading,
require from the other party to make
available for inspection within five days a clearly specified
document or tape recording in
his possession which is relevant to a
reasonably anticipated issue in the action and to allow a copy or
transcription to be made
thereof.
’
[29] The respondents indicate that they
are entitled to deliver a notice in terms of rule 35(12)
at any time
before the hearing of the matter. The documents requested have been
pertinently mentioned by Distell in the main application.
They are
entitled to rely on rule 35(12) for this. In addition, in terms of
rule 35(14) they are entitled to deliver such notice
any time after
entering an appearance to defend for the purposes of pleading, in
this instance for the purposes of filing their
answering affidavits
and disclosing their defence to the main application. The respondents
submit that the documents requested
are invoices which relate to the
claim in the main application and the correctness thereof.
Consequently, there can be no challenge
that the invoices are not
relevant.
[30] In addition, the respondents
submit that once Distell referred to the invoices in the founding
affidavit, there was an obligation on Distell to produce such
documents when called upon to do so in terms of rule 35(12). In
support of this submission the respondents rely on the decision in
Magnum Aviation Operations v Chairman, National Transport
Commission, & another
[3]
in which Vermooten J in dealing with a rule 35(12) application held
the following:
‘
In
my opinion the ordinary grammatical meaning of the words is clear:
once you make reference to the document, you must produce
it. . .It
is significant that, while in Rule 35 (1), the notice calling for
discovery, it is said that discovery must be made of
documents
“relating to any matter in question in such action”, in
Rule 35 (12) there is no such, nor indeed any other,
qualification. I
am consequently of opinion that, having made reference to the
financial statements, Operations is obliged to produce
them for
inspection
.’
[31] The respondents further submit
that the provisions of rule 35(12) entitle them to the invoices
in
order that they consider their position. They can therefore exercise
their rights in terms of rule 35(12) before they disclose
their
defence in any answering affidavit in the main application. The
respondents draw on the decision in
Unilever plc & another v
Polagric (Pty) Ltd
,
[4]
where Thring J concluded as follows:
‘
It
is clear from these decisions that, otherwise than is the case with
discovery under Rule 35(1) and (2) read with Rule 35(13),
a defendant
or respondent does not have to wait until the pleadings have been
closed or his opposing affidavits have been delivered
before
exercising his right under Rule 35(12): he may do so at any time
before the hearing of the matter. It follows that he may
do so before
disclosing what his defence is, or even before he knows what his
defence, if any, is going to be. He is entitled to
have the documents
produced “for the specific purpose of considering his
position”. . . .’
[32] In reaching this conclusion,
Thring J referred to the dictum of Marais J in
Protea Assurance Co
Ltd & another v Waverley Agencies CC & others
[5]
where he said the following:
‘
Applicant’s
desire that second respondent should first have to file his affidavit
in response to the allegations made by Roberts
as to what second
respondent said to him during the telephone conversations which were
recorded on the tape before being allowed
to listen to the tape is
understandable as a forensic strategy, but to gratify it would be to
defeat the object of Rule 35(12).
That Rule plainly entitles a
litigant to see the whole of a document or tape recording and not
just the portion of it upon which
his adversary in the litigation has
chosen to rely. That entitlement, unlike the entitlement to general
discovery for which Rule
35(1) provides, does not arise only after
the close of pleadings in a trial action, or after both answering and
replying affidavits
have been filed in motion proceedings: it
arises as soon as reference is made in the pleading or affidavit to a
document
or tape recording. It is inherent in that that a litigant
cannot ordinarily be told to draft and file his own pleadings or
affidavits
before he will be given an opportunity to inspect and
copy, or transcribe, a document or tape recording referred to in his
adversary’s
pleading or affidavits
.’
[33] The respondents indicate that
Distell has not indicated it is unable to produce the documents
requested and once Distell delivers the invoices, they will be in a
position to consider their defence and place the relevant facts
before the court in their answering affidavits in the main
application. In addition, in answer to the submission by Distell that
the court in the liquidation proceedings did not deem it necessary
for Distell to produce the documents, the respondents submit
that the
liquidation proceedings have no bearing on this application and
further that they are entitled to raise any defence which
Melody
Hills and 888 could have raised in such proceedings.
[34] There appears to be a difference
of opinion as to whether or not an onus arises in terms of
rule
35(12) either on an applicant seeking those documents to show that
they are relevant, alternatively, on a party declining
to produce
those documents to show that they are not relevant. This emanated
from the decisions of the various courts.
[6]
[35] Although the effect of the
decision in
Magnum Aviation
was that the court held, albeit
obiter
, that relevance was not a requirement for the
production of documents in terms of rule 35(12), in
Universal City
Studios v Movie Time
,
[7]
the court held that such application could be opposed on grounds of
privilege or irrelevance. Booysen J held as follows:
[8]
‘
It
being an application, I would say that the
onus
is to be discharged on the usual basis, ie that the applicant bears
the overall
onus
of satisfying the Court that the respondent is obliged to produce the
document or portion in question, ie that the document has
been
referred to and that it is relevant to the issues which have arisen
(where the issues have been identified by the delivery
of opposing
affidavits) or that the applicant proposes to raise (where no
opposing affidavits have been delivered). Where the respondent
files
an opposing affidavit in Rule 30 (5) proceedings and either denies
relevance or avers that he is on the ground of privilege
not obliged
to produce a document referred to by him, it would seem to me that
the applicant would, in order to succeed, have to
satisfy the Court
on a balance of probabilities that the document is indeed relevant or
not privileged
.’
[36] In
Unilever
, Thring J also
considered whether the question of onus arises. In referring to
Universal City Studios
, he was of the view that if a party
files an opposing affidavit relying on privilege or irrelevance as a
ground for not producing
a document, then the onus lies on his
opponent to satisfy the court on a balance of probability that the
document is relevant or
not privileged.
[9]
In this regard, he quoted from the decision of Friedman J in
Gorfinkel v Gross, Hendler & Frank
,
[10]
where he held the following:
‘
There are undoubtedly
differences between the wording of Rule 35(12) and the other subrules
relating to discovery, for example subrules
(1), (3) and (11) of Rule
35. The latter subrules specifically refer to relevance whereas
subrule (12) contains no such limitation
and is
prima
facie
cast in terms
wider than subrules (1), (3) and (11).
It
is nevertheless to my mind necessarily implicit in Rule 35(12) that
there should be some limitation on the wide language used.
One such
limitation is that a party cannot be compelled under Rule 35(12) to
produce a document which is privileged.
.
. .
With regard to relevance there
must also, in my view, be some limitation read into Rule 35(12).
To construe the Rule as having
no limitation with regard to relevance
could lead to absurdity. It would be absurd to suggest that the
Rule should be so
construed that reference to a document would compel
its production despite the fact that the document has no relevance to
any of
the issues in the case. It is not difficult to conceive of
examples of documents which are totally irrelevant. Booysen J in the
Universal City Studios
case gave one such example. What
is more difficult to decide is where the line should be drawn. A
document which has no relevance
whatsoever to the issues between the
parties would obviously, by necessary implication, be excluded from
the operation of the Rule.
But would the fact that a document is not
subject to discovery under Rules 35(1), 35(3) or 35(11) render it
immune from production
in terms of Rule 35(12)?
In my view the parameters
governing discovery under Rules 35(1), 35(3) and 35(11) are not the
same as those applicable to the question
whether a document is
irrelevant for the purposes of compliance with Rule 35(12). A party
served with a notice in terms of Rule
35(1) is obliged to make
discovery of documents which may directly or indirectly enable the
party requiring discovery either to
advance his own case or to damage
that of his opponent or which may fairly lead him to a train of
enquiry which may have either
of these consequences
.
Documents
which tend merely to advance the case of the party making discovery
need not be disclosed. As Rule 35(12) can be
applied at any
time, ie before the close of pleadings or before affidavits in a
motion have been finalised, it is not difficult
to conceive of
instances where the test for determining relevance for the purposes
of Rule 35(1) cannot be applied to documents
which a party is called
upon to produce under Rule 35(12), as for example where the issues
have not yet become crystallised. Having
regard to the wide terms in
which Rule 35(12) is framed, the manifest difference in wording
between this subrule and the other
subrules, ie subrules (1), (3) and
(11) and the fact that a notice under Rule 35(12) may be served at
any time, ie not necessarily
only after the close of pleadings or the
filing of affidavits by both sides, the Rule should, to my mind, be
interpreted as follows:
prima
facie
there is an
obligation on a party who refers to a document in a pleading or
affidavit to produce it for inspection if called upon
to do so in
terms of Rule 35(12). That obligation is, however, subject to certain
limitations, for example, if the document is
not in his possession
and he cannot produce it, the Court will not compel him to do so.
(See the
Moulded
Components
case
supra
at 461D - E.) Similarly, a privileged document will not be subject to
production. A document which is irrelevant will also not
be subject
to production. As it would not necessarily be within the knowledge of
the person serving the notice whether the document
is one which falls
within the limitations which I have mentioned, the
onus
would be on the recipient of the notice to set up facts relieving him
of the obligation to produce the document.’
[37]
However, the SCA in
Centre for Child Law v Hoërskool
Fochville
held that it may not be correct to refer to an onus but
rather more appropriate to speak of a ‘burden to adduce
evidence’.
[11]
In para 18 of the judgment, it was held that the court has a general
discretion to strike a balance between conflicting interests
of
parties:
‘
In
my view 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. 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. And, in the exercise of that discretion, it
is obvious, I
think, that a court will not make an order against a party to produce
a document that cannot be produced or is privileged
or irrelevant
.’
[38] Mr
van Nieuwenhuizen
quite
correctly acknowledged that the decision of Booysen J has not been
overturned. The comments of Ponnan JA in
Centre for Child Law
were
obiter
but the legal position remains unchanged.
[39] Consequently, it would appear that
having regard to the decisions in
Universal City Studios
and
Gorfinkel
, the onus is on Distell to show on a balance of
probabilities that they do not have to produce the documents in terms
of the rule
35(12) notice served by the respondents. Relevance or the
irrelevance of the documents to the proceedings is a valid defence to
the production of same.
[40] What then is meant by relevance? The test for
relevance was laid down by Brett LJ in
Compagnie Financière
et Commerciale du Pacifique v Peruvian Guano Co
[12]
which has been applied and accepted by our courts with approval. The
test enunciated is the following:
‘
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.
’
[13]
[41] In its submissions as to why the
invoices are irrelevant, Distell submits that during the course
of
the liquidation proceedings, the third and fourth respondents deposed
to affidavits on behalf of Melody Hills and raised only
two defences
which are relevant for the purposes of the interlocutory
applications. These defences are firstly, that Distell delivered
goods to Melody Hills in the Western Cape at an address which was not
the nominated address of Melody Hills and that Melody Hills
did not
have a branch situated in the Western Cape at Parow North and
secondly, that the fourth respondent had no authority to
acknowledge
Melody Hills’ indebtedness to Distell.
[42] Ntshangase J rejected these
defences but more importantly also caused to consider the request
by
the respondents on behalf of Melody Hills for copies of the invoices
which were referred to in the statement annexed to the
founding
affidavit in the liquidation proceedings evidencing the amount of
Melody Hills’ and 888’s indebtedness.
[43] Ntshangase J found that the fourth
respondent was intimately involved in the day-to-day running
of both
Melody Hills and 888 and had acquired Midmar at the end of 2012 when
he made the application for credit from Distell on
behalf of Melody
Hills. In fact, email correspondence was put up in the liquidation
proceedings between the fourth respondent and
Distell’s credit
account manager in relation to Melody Hills’ and 888’s
indebtedness to Distell. Such correspondence
went so far as to also
include the exchange between the fourth respondent and the business
rescue practitioner Damons who dealt
with Midmar whilst it traded in
business rescue. The email acknowledged that Distell had supplied
liquor to Melody Hills who had
then onward supplied same to Midmar.
The fourth respondent had requested the business rescue practitioner
to pay the monies Melody
Hills owed to Distell from income received
from the sale of liquor products by Midmar. No dispute was raised
regarding the amount
owed.
[44] Distell indicates that despite
demand addressed to the respective sureties in their personal
capacities as appears from the founding affidavit in the main
application, they did not raise any dispute in respect of their
or
Melody Hills’ indebtedness to Distell. It is for this reason
the documents are not relevant.
[45] In addition, Distell indicates
that because there has never been any bona fide dispute regarding
the
money owed to it and the respondents have not challenged such
material allegations and have merely indicated that those affidavits
and proceedings are irrelevant to the current one, Distell submits
that its version therefore stands uncontradicted.
[14]
[46] It is for these reasons that
Distell submits that as no facts have been placed in issue and
no
contrary evidence presented by the respondents there are no matters
in issue between the parties and consequently the production
of these
invoices are irrelevant. This court cannot make an order against
Distell to produce the invoices which are irrelevant
to the facts as
they stand presently on the papers.
[15]
[47] I agree with the submissions of
Distell in this regard. There can be no doubt that the sureties
are
aware of the amount of the indebtedness of the principal debtor and
this was not challenged. There can thus be no dispute concerning
the
amount of the principal debtor’s indebtedness and the documents
are thus not relevant. In addition,
Mr Van Nieuwenhuizen
is
quite correct that the submissions made in argument at the hearing
were not dealt with the affidavits the respondents field
in the
application.
[48] A further challenge, which has
been directed at the allegations contained in the interlocutory
application, is that the founding affidavit and replying affidavit
have not been deposed to by any of the sureties but by their
former
attorney of record. No confirmatory affidavits have been filed on
behalf of any of the respondents and Distell submits that
any
suggested version proffered in the interlocutory application is
admissible hearsay evidence. They rely on the following authorities
for this submission, namely
S v Ndhlovu & others
;
[16]
Freedom Under Law v National Director of Public Prosecutions &
others
.
[17]
I agree with these submissions of Distell and the principles
enunciated in the authorities referred to.
Abuse of process
[49]
The second basis of opposition to the relief sought is that Distell
submits that if the court
were to order the production of the
invoices it would give effect to ‘an abuse of process’.
In
Western Assurance Co., v Caldwell’s Trustee
[18]
the court held that every court has inherent jurisdiction to stay any
action that is shown to be an abuse of court process.
[50]
The basis on which Distell submits the interlocutory application is
an abuse of process and ought
not to be countenanced by this court is
that it is nothing more than a ‘fishing expedition’ and
that neither the sureties
nor Melody Hills have ever advanced a bona
fide defence to Distell’s claim nor has one even been suggested
by the sureties.
In this regard, the sureties have failed to propose
any issues which they intend to raise in defence in the main
application and
consequently ought not to be allowed to be advanced.
[51]
There is no dispute and there cannot be a dispute about the debt owed
by Melody Hills and 888.
Consequently, the respondents do not have a
defence to the main application. In support of this, Distell submits
the following
having regard to the contents of the founding affidavit
in the main application, together with the affidavits filed by Melody
Hills
and 888 in opposition to the liquidation applications:
(a) The fourth respondent acting
on behalf of the remaining respondents only requested a copy
of the
suretyship agreements.
(b) In the supplementary
affidavit deposed to on behalf of Melody Hills in the liquidation
application, the third respondent submitted that the court required
further evidence from Distell to substantiate its claim. This
is
incorrect as the judgment of Ntshangase J alluded to the fact that
one would have expected Melody Hills to dispute delivery,
which did
not occur, but in this instance Melody Hills, represented by the
fourth respondent, sought invoices of all transactions
between
Distell and Melody Hills dating back to October 2012.
(c) In the liquidation
application, the court was of the view that a request of such
magnitude was not justifiable and no explanation had been proffered
by Melody Hills as to why such information could not be extracted
from its own records. A statement was put up evidencing the amount
due, owing and payable as a consequence of the unpaid invoices
for
June and July 2013.
(d) The fourth respondent had
engaged in an exchange of correspondence with Distell in relation
to
Melody Hills’ indebtedness as well as the business rescue
practitioner of Midmar, Juanito Damons. Such correspondence
in no way
indicates that Melody Hills sought to dispute the amount of its
indebtedness to Distell.
(e) The fourth respondent was the
attorney of record for all the respondents, Melody Hills
and 888 in
the winding up applications. In addition, he was the attorney of
record for the respondents in the main application
instituted by
Distell against the respondents based on their suretyship agreements.
It is also apparent that he was intimately
involved in Midmar, as he
acquired Midmar at the end of 2012. New attorneys represented the
respondents in these proceedings but
no confirmatory affidavits were
filed by any of the respondents in support of the allegations made by
attorney Selva Naicker in
support of the relief sought in the
interlocutory application.
[52] Having regard to the affidavits
filed in the main application, at all material times the first
and
third respondents were directors of Melody Hills and the fourth
respondent acted as the duly authorised representative of Melody
Hills in the exchange of correspondence between Distell and Melody
Hills. All the respondents, save for the second respondent (whose
liability arises as a consequence of her marriage in community of
property to the first respondent), were copied in the emails
sent by
the fourth respondent.
[53]
In September 2012, when the approach for credit from Distell was made
by the fourth respondent
on behalf of Melody Hills, presumably after
submission of a credit application, Distell through its customer
accounts manager Carol
Wiese, raised a query concerning the fourth
respondent’s capacity as the documentation submitted indicated
that he was not
a director of Melody Hills. In response, the fourth
respondent indicated that he could not be an active director of
Melody Hills
but would sign any ‘surety/personal surety/cross
company notarial bonds’ in order to secure the credit granted
by Distell
to Melody Hills.
[54] It is not disputed that the first,
third and fourth respondents were actively involved in the
running of
Melody Hills and that the fourth respondent was the attorney of
record for Melody Hills in the liquidation application
and in these
proceedings until the firm withdrew as attorney of record. It
therefore cannot be said that the fourth respondent
was not
intimately involved in the litigation between Distell and all these
entities being Melody Hills, 888 and Midmar.
[55] In support of the application for
credit by Melody Hills, all the respondents signed agreements
in
which they bound themselves as co-principal debtors and sureties with
Melody Hills for its indebtedness to Distell. The second
respondent,
also provided written consent in terms of
s 15(2)
of the
Matrimonial
Property Act 88 of 1984
as evidenced from annexure “FA4”
to the main application.
[56] At all times when engaging with
Distell in relation to Melody Hills’ indebtedness, the
fourth
respondent’s firm corresponded with Distell on behalf of the
remaining sureties. At no stage was the indebtedness
of Melody Hills
to Distell disputed, but rather copies of the suretyship agreements
concluded between the respondents and Distell
were requested.
[57] Neither of the party’s
counsel referred to the decision of Chetty J in this division in
the
matter of
Savithree Samuel & Vinay Jayantilal Vallabh Gosai &
1 other
, Case No. 10732/2013, delivered on 22 January 2015.
[58] Although the facts in that
judgment differed from the present matter, the legal principles were
the same. The basis on which the copies of bank statements were
sought in that matter are on all fours with the current matter.
I
indicated to the parties’ legal representatives at the hearing
of the matter that I was of the view that I am bound by
the decision
of Chetty J as I share the sentiments expressed therein, specifically
in relation to the prevailing legal position.
[59] Having regard to the above and the
authorities referred to in this judgment, I agree with Distell’s
submission that the application constitutes an abuse of process.
The
relief sought in prayer 3 of the notice of motion
[60]
In paragraphs 14 and 15 of the respondents’ founding affidavit,
they submit the following
in relation to the relief sought in
paragraph 3 of the notice of motion, namely:
(a) The enrolment of the main
application by Distell for hearing on 4 August 2016 was irregular
and
constituted an abuse of process.
(b) The time period for the
delivery of the answering affidavit was suspended by the
rule 35(12)
notice until the finalisation of the interlocutory application.
(c) The respondents are
entitled to have sight of the documents requested in the
rule 35(12)
notice, prior to delivering their answering affidavit in the main
application.
[61]
It is common cause that the main application was issued by Distell on
15 March 2016, served on
the third and fourth respondents on 19 March
2016, on the first respondent on 7 April 2016 and on the second
respondent on 15 April
2016. The notice to oppose the main
application by all the respondents was served and filed on 23 March
2016 by attorneys Hemanth
Singh and Company. It would appear that the
notice to oppose was filed on behalf of certain of the respondents
being the first
and the second respondents prior to them even being
served with the application papers.
[62]
The
rule 35(12)
notice was served on Distell on 6 May 2016 and a
reply thereto provided on 27 May 2016. On 7 June 2016, a
rule 30A
notice was served on Distell. The interlocutory application was
issued on 12 July 2016 and enrolled for hearing on 4 August 2016.
Distell filed a notice to oppose such application on 21 July 2016.
[63]
Having regard to the notice of motion in the main application, the
respondents were required
to file their answering affidavits within
15 days after giving notice of their intention to oppose the
application, that is 15
days from 23 March 2016.
[64]
The notice in terms of
rule 35(12)
was served outside of the time
period envisaged in the rules and after the
dies
had expired
for the filing of an answering affidavit. No correspondence was
annexed to the founding affidavit in this application
indicating any
request by the respondents for an extension of time for the late
filing of their answering affidavit.
[65]
The respondents’
rule 30(A)
notice served on 7 June 2016 read
as follows:
‘
.
. .whereas the applicant has refused to produce the documents
requested in the respondents’
Rule 35(12)
Notice dated 6
th
of May 2016, the respondents intend, in the event that the applicant
fails to deliver a response within ten (10) days of the date
of
service hereof, tendering the inspection and copying of the documents
requested in the respondents’
Rule 35(12)
Notice, to apply to
court for appropriate relief, including an order compelling
compliance and/or that the applicant’s claim
be dismissed
.’
[66]
Rule 30(A)
provides for a party affected by another party’s
non-compliance with the rules of court to serve a
rule 30(A)
notice
requesting that there be compliance, failing which the claim or
defence is struck out. Failing compliance within ten days
of service
of such notice, an aggrieved party may apply on notice to court for
an order dismissing the claim or striking out the
defence. It is
common cause that after service of the
rule 30(A)
notice, Distell
enrolled the main application for hearing on the unopposed roll. Such
notice of set down also made reference to
the fact that the
respondents, despite serving a notice of opposition, failed to comply
with the rules of court and failed to file
their answering
affidavits.
[67]
Despite the notice of set down pertinently drawing the respondents’
attention to the fact
that the answering affidavit had not been filed
and would be out of time, they failed to bring any application to
extend the time
period in terms of
rule 27
of the rules of court.
There appears to be a suggestion by the respondents that there was no
need to do so as the
rule 35(12)
notice suspended the
dies.
Does
the delivery of the
rule 35(12)
notice suspend the 15 day period in
which the respondents are to file an answering affidavit?
[68]
There appears to be no authority on this issue apart from a reference
in the judgment of Gorven
J in
Potpale Investments (Pty) Ltd v
Mkhize.
[19]
A reading of
rule 35(12)
and (14) does not indicate that delivery of
such notice suspends the period referred to for the filing of an
answering affidavit.
In addition, although
rule 35(12)
imposes
sanctions for non-compliance, it does not indicate that delivery of
any pleadings and/or any affidavits is suspended pending
compliance
with the rule. A litigant can utilise the provisions of
rule 27
to
ask for an extension of any time period not provided for in terms of
the rules.
[69]
Having regard to the judgment of Gorven J in
Potpale
, it would
appear that he was of the view that the delivery of the
rule 35
notice did not suspend the period in which the defendant was obliged
to deliver a plea. Consequently, the enrolling of the default
judgment was not an irregular step in terms of
rule 35(12).
A
document referred to in an affidavit may also fall within the ambit
of the rule. However, the obligation of a party to produce
such a
document is subject to limitations such as relevance. I agree that
the filing of the
rule 35(12)
notice did not suspend the
dies
and
that the respondents ought to have utilised the provisions of
rule 27
to request an extension of the
dies.
The relief sought in paragraphs 2, 3, 4, and 6 of the notice of
motion
[70]
In respect of paragraph 2 of the notice of motion, given the
conclusion reached there is no need
for the court to grant this
relief as the application is dismissed with costs. In respect of
paragraph 3, the court dealing with
the main application is best
placed to deal with any substantive application for condonation that
the respondents may elect to
bring. In any event, insufficient facts
have been placed before me to decide this issue. As regards the
relief in paragraphs 4
and 6 of the notice of motion, there are no
annotations endorsed on the court file in respect of proceedings for
4 August 2016.
In the absence of any submissions being made in this
regard, I am of the view the court dealing with the main application
is best
suited to deal with same.
Costs
[71]
It is trite that this court has a discretion in awarding the costs
occasioned by an application.
The usual rule in relation to costs is
that a successful party is entitled to such costs unless there is a
reason through conduct
to deprive such party of costs. In
Distell’s heads of argument, it seeks a punitive costs order,
an attorney and client
costs order as against the respondents given
the manner in which they have litigated in these proceedings, but
more so arising
from the submission that the interlocutory
application constitutes an abuse of court process.
[72] I see no reason to depart from the
usual rule in relation to costs and I am satisfied that the
award of
costs on the punitive scale is warranted in the circumstances of this
matter.
Conclusion
[73]
In the result, the following orders are made:
1. The application is
dismissed.
2. The first to
fourth respondents are directed to pay the costs of the interlocutory
application jointly and severally, the one paying the other to be
absolved. Such costs are to be on an attorney and client scale.
Henriques J
CASE
INFORMATION
APPEARANCES
Counsel for
the Applicant
: Mr H P van
Nieuwenhuizen
Instructed
by
: Van
Nieuwenhuizen, Kotze & Adam
Attorneys
c/o Thorpe & Hands Inc
4
th
Floor, 6 Durban Club Place
Durban
Ref: Mr Richard Pearton/cp/04/V004/158
Tel: 031 305 3641
Fax: 0866 361 562
Email: richard@thorpeandhands.co.za
Counsel for
the Respondents
:
Mr S
Alberts
Instructed by
: Asmal &
Asmal Attorneys
69 Mahatma Gandhi Street
KwaDukuza
Ref:
Tel: 032 552 1245
Fax: 032 552 1112
Email: asmalx2@telkomsa.net
Date of Hearing
:
31 July 2018 and 24 August 2018
Date
of Judgment
: 4
December 2019
[1]
Index, page 88, para 38.
[2]
Centre for Child Law v Hoërskool Fochville & another
2016 (2) SA 121
(SCA) para 18.
[3]
Magnum Aviation Operations v Chairman, National Transport
Commission, & another
1984 (2) SA 398
(W) at 400B-E.
[4]
Unilever plc & another v Polagric (Pty) Ltd
2001 (2) SA
329
(C) at 336G-J.
[5]
Protea Assurance Co Ltd & another v Waverley Agencies CC &
others
1994 (3) SA 247
(C) at 249B-D.
[6]
See in this regard
Universal City Studios v Movie Time
1983
(4) SA 736
(D) and
Unilever plc & another v Polagric (Pty)
Ltd
2001 (2) SA 329 (C).
[7]
Universal City Studios
at 748A-C.
[8]
Ibid at 748A-D.
[9]
Unilever plc
at 337C-E.
[10]
Gorfinkel v Gross, Hendler & Frank
1987 (3) SA 766
(C) at
773H-774I.
[11]
Centre for Child Law
at 122G.
[12]
Compagnie Financière et Commerciale du Pacifique v
Peruvian Guano Co
1882 (11) QBD 55.
[13]
Rellams (Pty) Ltd v Jamie Brown & Hamer Ltd
1983 (1) SA
556
(N) at 564A-C.
[14]
South African Breweries Ltd v Rygerpark Props (Pty) Ltd &
others
1992 (3) SA 829
(W) at 834B-C;
National Director of
Public Prosecutions v Kyriacou
2004 (1) SA 379
(SCA) at 391D-E;
Standard Bank of SA Ltd v Sewpersadh & another
2005 (4)
SA 148
(C) at 159G, 161D and 161H.
[15]
Centre for Child Law
at 133E-F.
[16]
S v Ndhlovu & others
2002 (6) SA 305
(SCA) at 317G-318A.
[17]
Freedom Under Law v National Director of Public Prosecutions &
others
2014 (1) SA 254
(GNP) at 313A-B.
[18]
Western Assurance Co., v Caldwell’s Trustee
1918 AD 262
at 271-272 and 274-275.
[19]
Potpale Investments (Pty) Ltd v Mkhize
2016 (5) SA 96
(KZP).