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[2018] ZAGPPHC 705
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Matshaya v TPO Consulting (Pty) Limited and Others (58093/13) [2018] ZAGPPHC 705 (23 March 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)
(1)
NOT REPORTABLE
(2)
NOT OFINTEREST TO OTHER JUDGES
(3)
REVISED.
CASE NO: 58093/13
23/3/2018
In the matter between:
ZWELENKOZI
LENNOX
MATSHAYA
Applicant/Plaintiff
and
TPO CONSULTING (PTY) LIMITED
First Defendant
TOLPLAN INVESTMENTS (PTY)
LIMITED
Second Defendant
WILLEM JOHANNES PIENAAR N.O.
Third Defendant
WILLEM JOHANNES PIENAAR
Fourth Defendant
TOLPLAN (PTY) LTD
Fifth Defendant
JUDGEMENT
Matter
heard on: 15 February 2018
CONSTANTINIDES
AJ:
1.
The
applicant has launched applications to compel further and better
discovery and further and better trial particulars . The applicant
is
the plaintiff and the first to fifth respondents ("the
respondents") are the defendants in the action under the above
case number. Both matters were set down simultaneously to be dealt
with at the present hearing.
2.
At
the outset I wish to make certain comments for purposes of
"housekeeping " and for future reference.
The court file was in total
disarray due to the following:
2.1.
All
the notices were thrown into the file without being properly secured
and without a proper index.
2.2.
The
Respondents heads of argument were not filed in the court file.
2.3.
This
displays a total disregard for compliance with the practice
directives and the judicial officer hearing the matter as a lot
of
time is wasted attempting to decipher which documents and bundles are
relevant to the applications being heard.
2.4.
In
cases where two applications are to be heard by the same judge it
will be prudent to compile a consolidated bundle of the relevant
documents and the heads of argument of all the parties and to index
and paginate same.
3.
I
shall deal with each of the applications separately.
4.
The
applicants have alleged that:
"2.
.
. .
The
respondents have complied only partially with the notice in terms of
Rule 35(3) and with
a
request for
further particulars for trial
...
"
[1]
4.1.
In
the notice of application in terms of rule 35(7) the plaintiff seeks
an order that:
The Defendants be compelled to
deliver their supplementary discovery affidavit and to discover seven
categories of documents detailed
in prayers 2.1 to 2.7 of the notice
of motion.
5.
The
plaintiff has filed a detailed affidavit setting out the reasons for
launching the present application.
6.
The
answering affidavit was deposed to by the director of the first
defendant wherein he also acts as representative of the third
defendant and is cited in his personal capacity as the fourth
defendant. He deposes to the answering affidavit on behalf of all
the
defendants. What is relevant in the defendants' answering affidavit
is the following:
“
6.
SUMMARY
OF DEFENDANTS' GROUNDS
OF
OPPOSITION
AND REASONS THEREFORE:
6.1
Upon receiving the application,
the Defendants ' attorney of record carefully perused and considered
the content of the application.
6.2
As
an initial response on the Defendants' behalf, Mr Leander Opperman,
the Defendants' attorney of record, sent the attached letter
to Mr
Saltzman,
a
copy
of which is annexed hereto marked annexure 'WJP1
'.
6.3
I
reiterate and confirm the content of numbered paragraph 3 of annexure
'WJP1' which is
a
summary,
albeit not conclusive, of the points to be raised by the Defendants
in opposition to the application.
…
. Certain
common or recurring themes appear from the defendants' responses
(namely
(a)
"impermissible
interrogatory;
(b)
an
abuse aimed at eliciting documents Plaintiff is not entitled to
bearing in mind the cause of action
as
pleaded by the Plaintiff; and
(c)
the
application being
a
fishing
expedition on the part of the Plaintiff.)
"
[2]
7.
The
relevant portion of "WJP1" reads as follows:
"1.
We refer to your client's:
1.1
rule
35(7) application; and
1.2
application
entitled: 'Notice of Motion' (sic) served on our offices on 31
January 2017 ('the applications').
2.
We place on record that:
2.
1
you were furnished with an unsigned copy of the supplementary
discovery affidavit of Mr Willie
Pienaar on behalf of the defendants
via email during the afternoon of 30 January 2017 and
a
signed version of
a
supplementary
discovery affidavit was served on your correspondent on 31 January
2017;”
[3]
8.
Therefore
prayer 1 of the notice of application in terms of rule 35(7) has
become academic as a supplementary discovery affidavit
was indeed
served on the plaintiff's attorneys so I decline to grant that order.
9.
It
is common cause that the first defendant disposed of its shares in
the fifth defendant to the Willem J Pienaar Trust (the third
respondent) and to Willem J Pienaar (fourth respondent) on 1 March
2009. The plaintiff has alleged that the aforesaid disposal
was null
and void, and was not at arms' length and falls to be set aside.
10.
The
defendants have alleged that the first defendant's shareholding in
the fifth defendant (Tolplan (Pty) Limited) as at the 15
1
st
March 2009 was valued at R9,724 million.
11.
Therefore
the applicant states the following:
"14.4 The
minutes of the meeting will reveal the motivation behind the dividend
declaration by the fifth defendant
of R1 077 169.00, will give
insight into the value of the fifth defendant and will assist in
testing the veracity of the alleged
'valuation' of the first
defendant's shareholding in the fifth defendant. Simply stated, the
size of
a
dividend
-
declared against
profits
-
will
provide
a
strong
indication of the true value of the shares in question.”
[4]
12.
The
respondents have countered the aforesaid explanation stating that the
plaintiff is embarking on "a
fishing
expedition .. ."
The defendants
have indicated in their rule 35(3) response that the
"
required dividend declaration is not relevant to the issues on the
pleadings."
[5]
13.
The
request for the annual financial statements including all and any
withdrawn statements of the fifth defendant for the years
ended 28
February 2010 to 2014. The defendants have stated that they refuse
additional discovery of anything more than the 28
th
February 2010 financials in which the defendants have allegedly made
discovery of in the supplementary discovery affidavit which
appears
as item 1 under schedule C on the last page of the document. I am
amenable to granting only the annual financial statements
of the
fifth, second and third defendants only for the year ending the 28
th
February 2010 as the aforesaid discovered documents are only
"draft"
financial statements for the year
ending 28 February 2010.
14.
It
is my view that to insist on further statements is indeed a fishing
expedition on the part of the plaintiffs. I am satisfied
with the
plaintiff's explanation that
"22.
...
The
annual financial statements will reveal whether the first defendant's
shares in the fifth defendant have been disposed of, other
than at
arms' length and importantly, whether the valuation provided is
accurate."
[6]
15.
I
am not convinced that the plaintiff is entitled to utilize the
present action which according to the plaintiff is to
"
quantify his damages
as
a
result of the
unlawful (and in fact illegal) disposal of the first defendant's
shareholding in and to the fifth defendant.
"
[7]
16.
In
prayer 2.4 the plaintiff requests annual financial statements
(including all and any withdrawn statements) of second defendant
for
the years ended 28 February 2008 to 2014. The defendants have in item
1 under schedule "C" of their discovery affidavit
[8]
stated that they refuse additional discovery of anything more than
the 28
th
February 2010 financials which they have made in their supplementary
discovery. However, I am in agreement that the plaintiffs
are
entitled to only the financial statements for the year ending the
28
th
February 2010 in respect of the second defendant.
17.
Counsel
for the plaintiffs was unable to motivate why he would be entitled to
any further financials in view of the fact that the
shares were
disposed of on the 1
st
March 2009.
18.
The
motivation of the plaintiff for such an extensive discovery from
before the disposal of the shares on the 1st March 2009 up
to the
year 2014, is as follows:
"29. It is
necessary to have access to the annual financial statements for all
of the years in order to understand
the 'Top/an' group structure and
to test the veracity of the defendants ' allegations regarding the
shareholders of each company.
..."
19.
The
plaintiff furthermore wishes to ascertain
"30.1 The
accuracy of the defendants' allegation regarding the 'unbundling ' of
the first
defendant's shares;
30.2 whether
the defendants' accountants , Van Sitterts, accurately recorded and
described the version of events described in already discovered
documents;
…
.
30.4 how
the ownership (or rather, inter-ownership) of shares in the various
'Tolplan'
companies is reflected over the years;
…
.
30.6
how dividends from the various 'Tolplan' companies were accounted for
over
the years ....”
[9]
20.
Based
on how the present cause of action is pleaded, it is my opinion that
the plaintiffs are entitled to the final financial statements
for the
year ending 28 February 2010 in respect of the second defendant.
Therefore I shall make an order in this regard as Item
1 of the
defendant's schedule "C" in the defendants supplementary
affidavit reflects "draft" financial statements.
The
Defendants are to provide the
final
financial statements for year end 28
February 2010 only in respect of the second defendant.
21.
Prayer
2.5 requests the annual financial statements
"including
all and any withdrawn statements"
of
the third defendant (the Willem J Pienaar trust) for the years ended
28 February 2008, to 2014. Once again for purposes of brevity
I am
not going to reiterate what I have stated hereinabove. The same
applies. I am only prepared to grant an order in respect of
the final
financial statements for the year ending 28 February 2010 in respect
of the third defendant.
"….
The Plaintiff alleges that :
39.
The departure of the first defendant's erstwhile BEE shareholder in
2007 is,
however, material and relevant to the plaintiff's cause of
action:
39.1
It is the plaintiff's version that he was excluded from the operation
of the first defendant,
despite being
a
shareholder and
a
director. He was
effectively put forward to be
a
"black face"
for the defendants; .
....
39.3.
The value received by the erstwhile BEE shareholder for his shares in
2007 will further illustrate
whether the 'disposal' of the shares by
the first defendant
was
at arms' length,
or not.”
[10]
22.
For
cautionary purposes, I am only prepared to grant an order in respect
of the general ledger accounts in the books of the second
defendants
reflecting their investment in the first defendant for the years
ended 28 February 2009 and 2010 years. (prayer 2.6)
23.
Prayer
2.7 of the notice of motion requests the general ledgers for the year
end 28 February 2008 to 2010 in respect of the first,
second, third
and fourth defendants.
24.
The
defendants have stated that the documents requested are
"overbroad
and not specific"
and are not
required for purposes of preparing for trial.
25.
The
plaintiffs have motivated the request for the aforesaid by stating
that:
"48.
...
the general
ledgers in the books of account are required for the very same reason
that the annual financial statements are required
...
"
[11]
26.
Item
number 51 of the defendants' supplementary affidavit provides for:
"Extract from the general
ledger account in the books of the second defendant reflecting the
investment in the first defendant
for year ended 28 February
2010."
[12]
27.
The
defendants furthermore state in their answering affidavit the
following:
"6.
5.
1.15.1
...
the
documents in respect of the third defendant do not exist ..."
[13]
28.
However
I shall order that the general ledger account for the year end 28
February 2010 of the fourth defendants also be discovered
by the
defendants.
29.
It
is trite that it is only in exceptional circumstances that the court
should go behind the parties' discovery affidavit.
30.
I
am in agreement with the defendants relating to the fact that the
general ledgers requested for the 2008 financial year are not
relevant to the plaintiff's cause of action.
31.
The
plaintiffs allege the following in their replying affidavit:
"9.1
Ad
paragraph
5.
3
9.1.1
The
2011 application has not been abandoned.
It has been stayed
pending the outcome of this action.
9.1.2
If
and when the action is resolved (and depending on the outcome of the
action), the 2011 application will be pursued."
[14]
32.
In
my opinion the aforesaid statement appears to confirm the
respondents' allegations that the claim for certain documentation is
merely a
"fishing expedition"
for purposes of enabling the
plaintiff to quantify his damages.
33.
A
court, in the exercise of its discretion, must remain alert to the
potential abuse of the discovery process. This may arise if
the
procedure is utilized in
terrorem
to
debilitate a respondent by requiring it to incur exorbitant expenses
and to tie up large numbers of qualified staff and lawyers.
[15]
34.
The
court may wish to balance the expedition of allying the existence or
otherwise of the document to be tested during the main
trial against
the prejudice of being unable to properly prepare for the trial
itself.
[16]
35.
Having
heard the parties and having considered the matter, I make the
following order:
1.
The
defendants are compelled to discover alternatively, to make available
to the plaintiff in accordance with rule 35(6):
1.1
The
minutes of the meeting in which the dividend of R1,077,169.00 that
appears in the annual financial statements of the fifth defendant
dated 28 February 2009 was approved;
1.2
The
journal entries, general ledger accounts and all and any documents
relating to or reflecting cash payment relating to the dividend
of
R1,077,169.00 and how the said dividend was paid;
1.3.
The final Annual financial statements
including all and any withdrawn statements, of the second, and fifth
defendants for the year
ended 28 February 2010;
1.4.
The general ledger accounts in the books
of the second defendant reflecting their investment in the first
defendant for the year
ended 28 February 2010;
1.5.
The
general ledgers for the year end 28 February 201O in respect of the
first, second, and fifth defendants.
1.6.
The
defendants are afforded 30 business days from the date of this order
to comply with prayers 1.1 - 1.6 above;
2.
In
the event of the defendants failing to comply with prayers 1.1 - 1.6
above, the plaintiff is entitled to re-enrol this application,
on the
same papers, duly supplemented, for an order striking out the
defendants' plea and requesting default judgment in favour
of the
plaintiff.
3.
The
defendants are ordered to pay the costs of this application.
H
CONSTANTINIDES
Acting
Judge of High Court
Gauteng
Division Pretoria
22
nd
February 2018
Attorneys for the
Plaintiff:
Saltzman
Attorneys
Counsel for the
Plaintiff:
Adv. J Daniels
Attorneys
for the First
and
Second Defendants:
Adams & Adams
Counsel/Attorney
for the
First
and Second Defendants:
Adv. E C Labuschagne SC
[1]
Applicant's Combined Heads of Argument: Application to compel
further and better discovery, Application to compel further and
better trial particular - page. 2.
[2]
Para 6.Page 24 of the respondents' answering affidavit Rule 35(7)
application
[3]
Email message from Adams and Adams dated 2 February 2017, page 39,
respondents' answering affidavit.
[4]
Para.
14 Page 8
of the applicant's founding affidavit.
[5]
Paragraphs 6.5.1 .7.1 and 6.5.1.7.2 of the respondents' answering
affidavit, page 28.
[6]
Paragraph 22, page 10 of the founding affidavit.
[7]
Paragraph 24, page 10 of the founding affidavit.
[8]
Annexure "WJP6 ", page 77 of the defendants' answering
affidavit
[9]
Plaintiffs founding affidavit, pages 12 to 13.
[10]
Paragraphs 39.1 and 39.3, pages 15 and 16 of the plaintiffs founding
affidavit.
[11]
Paragraph 49, page 18, plaintiff s founding affidavit.
[12]
Page 74 of the defendants’ answering affidavit.
[13]
Page 35 of the defendants’ answering affidavit.
[14]
Paragraph 9.1, plaintiff's replying affidavit, page 84.
[15]
See:
Makate v. Vodacom (Pty) Ltd
2014 (1) SA 191
(GSJ) at 200 E
-
F. Erasmus
Superior Court Practice, Vol 2, D1-476 [Service 1,
2016]
[16]
Erasmus
Superior Court Practice, Vol 2, D1-476 [Service 1, 2016]