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[2016] ZAFSHC 47
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Ramakarane v Centlec (Pty) Ltd (4907/2006) [2016] ZAFSHC 47 (18 February 2016)
IN THE HIGH COURT OF
SOUTH AFRICA
FREE STATE DIVISION,
BLOEMFONTEIN
Case number: 4907/2006
DATE: 18 FEBRUARY 2016
In the matter between:
GOITSE GRIESSEL
RAMAKARANE
...............................................................
Plaintiff/Respondent
And
CENTLEC (PTY)
LTD
..........................................................................................................................
Defendant/Applicant
HEARD ON: 4 FEBRUARY 2016
JUDGMENT BY: PIENAAR, AJ
DELIVERED ON: 18 FEBRUARY 2016
INTRODUCTION
[1] The applicant applies in terms of
Rule 35(7) for an order that compels the respondent to comply with
the applicant’s Rule
35(3) notice delivered on the 25th of May
2015 by making the requested documents, being the respondent’s
IRP 5 documents,
bank statements, income tax assessments and
financial statements for the period August 2005 to 31 August 2010,
available for inspection,
alternatively that the respondent be
directed to file a further and better affidavit in terms of Rule
35(3) in response to the
applicants notice, failing which the
applicant be granted leave to approach the court for an order
striking out the respondents
claim.
[2] The essence of the matter involves
the interpretation and meaning of the word ‘possession’
as used in Rule 35(3)
and whether it must , in the context of the
rule and the specific nature of the documents involved, be given a
wider and secondary
meaning in order to require from the respondent
to make the said documents available for inspection although the
respondent is
not in actual and physical possession thereof but are,
according to the applicant, readily available and obtainable by the
respondent
from the relevant third parties.
BACKGROUND
[3] The respondent instituted action
against the applicant during 2006 for payment of damages in the
amount of R2 750 000.00. According
to the respondent, the applicant
appointment the respondent on a 5 year fixed-term contract at a
salary of R550 000.00 per year,
which the applicant breached by
failing to allow the respondent to commence her duties in terms of
the contract.
[4] The applicant disputed the
existence of the contract.
[5] However, on the 4 March 2014 the
parties settled the merits of the action and agreed that the
applicant will pay 50% of the
respondent’s proven of agreed
damages. This agreement was made an order of court.
[6] The quantum of the respondent’s
claim is still in dispute.
[7] Subsequent to the settlement of the
merits, the applicant amended its plea in respect of the issue of
quantum and, inter alia,
pleads that:
“9.2 By virtue of the Court Order
dated 4 March 2014, the defendant pleads as follows:
9.2.1 Once the plaintiff became aware
of the defendants
breach it was incumbent on her to
immediately take all necessary and reasonable steps to mitigate the
lost by seeking alternative
employment.”
THE RULE 35(3) NOTICE
[8] The applicant avers that it is
essential to consider the respondent’s financial affairs over
the 5 year period relevant
to the claim due to the nature of the
respondent’s case and the applicant’s defence.
[9] The applicant therefore delivered
the Rule 35(3) notice on the 25th May 2015, in which it requested the
respondent to make the
following documents available for inspection
in accordance with the provisions of Rule 35(6):
“1. The Plaintiff’s IRP 5
for the period 2005 to 2010;
2. The Plaintiff’s bank
statements for the period August 2005 to 31 August 2010;
3. The Plaintiff’s Income Tax
Assessment for the period August 2005 to 31 August 2010; and
4. Any financial statements prepared
for the Plaintiff in relation to the period August 2005 to 31 August
2010.”
[10] In response to the Rule 35(3)
notice, the respondent delivered an “affidavit in terms of Rule
35(3) & (6)”
on the 22nd of July 2015. In this affidavit,
the respondent stated that she does not have the documentation in her
possession
and that the documents are also not readably available.
[11] The applicant was not satisfied
with the respondent’s response and therefore brought this
application in terms of the
provisions of Rule 35(7) for an order to
compel the respondent to make the documents available for inspection
and to comply with
the provisions of Rule 35(3).
CRUX OF THE CONTENTIONS IN THE PAPERS
[12] In the founding affidavit, the
applicant contends that it is entitled to the relief as:
“16.
I respectfully contend that the
respondent’s affidavit fails to comply
with the prescripts of Rule 35(3).
17.
Furthermore, from the nature of the
requested documents, possession thereof cannot honestly be denied.
Bank statements, financial
statements and tax information remain in
the respondent’s possession even if she does not actually have
a physical copy thereof.
I submit that the respondent is being
wilful, obstructive and obtuse in her conduct.”
[13] This was elaborated upon in reply:
“10.2 …….. Bank
statements (even those older than 5 years) are readily available and
obtainable from the respondent’s
bank(s) and constitute
documents in respondent’s possession and/or under the
respondent’s control.”
[14] On the other hand, the respondent
contends that she has discovered any and all related documents that
are in her possession
and which may be relevant to the enquiry of the
income she derived during the relevant period; that she was
unemployed during
the period and tried to make a living through
business interests she had; and that she does not have an onus and
duty to go and
source documents that are not in her possession.
[15] She further elaborated upon the
reasons why she is not in possession of the required documents:
“5.11 I am not in possession of
the documents asked. I have already stated so under oath. If I had
been in possession, there
would not have been any reason for me to
refuse. The simple reason why I had already stated that the
documents cannot be discovered,
is simply because they do not exist
(the IRP certificates – which are issued by employers to
employees ((as I have said I
was unemployed)), no financial
statements were drafted for me during this period (I am an
individual) and I am not in possession
of my then bank statements.”
and
“5.15 I mention in passing that
there rest no obligation upon me to keep financial records older than
5 years, for tax purposes
or otherwise. This is also the reason why I
am not in possession of any further documents related to the relevant
period (including
bank statements).”
THE ISSUES
[16] It is not the applicant’s
case that the documents are indeed in the respondent’s actual
and physical possession,
but that because the documents are readily
available and obtainable by the respondent from the respondent’s
bank and the
South African Revenue Services (“SARS”), it
constitutes documents in the respondent’s possession or under
her
control.
[17] Both parties were therefore ad
idem that the issues that have to be determined are:
(a) whether the respondent is in
possession of the documents as contemplated in Rule 35(3), although
she does not have actual and
physical possession of the documents and
are therefore obliged to discover and make the documents available
for inspection in terms
of Rule 35(3) read with subrule (6); and
(b) whether the respondent’s
affidavit in terms of Rule 35(3) and 35(6) complies with the
requirements of Rule 35(3) and,
if not, whether the respondent could
be compelled to file a “further and better affidavit in terms
of Rule 35(3)”.
[18] Mr. Grobler for the respondent
also submitted that the facts and circumstances relevant to the main
action, in particular the
period when the cause of action arose, the
relevant period for which the documents are requested and the lapse
of time since the
action was instituted need to be considered in
order to determine whether it will be fair and reasonable to compel
the respondent
to obtain and discover the said documents.
APPLICABLE PRINCIPLES IN RESPECT OF
DISCOVERY
[19] It is apposite to briefly deal
with the general principles in respect of discovery before dealing
with the parties’ contentions.
[20] Rule 35(1) and (2) requires from a
party to an action that has been requested thereto, to make discovery
on oath of all documents
and tape recordings relating to any matter
in question in such action which are or have at any time been in the
possession or control
of such party.
[21] If a party is not satisfied with
the other party’s discovery, it may make use of the procedure
provided for in Rule 35(3)
to obtain inspection of documents which
that party believes are in the possession of the other party and
which are relevant to
any matter in question. Rule 35(3) provides
that:
“(3) If any party believes that
there are, in addition to documents or tape recordings disclosed as
aforesaid, other documents
(including copies thereof) or tape
recordings which may be relevant to any matter in question in the
possession of any party thereto,
the former may give notice to the
latter requiring him to make the same available for inspection in
accordance with subrule (6),
or to state on oath within ten days that
such documents are not in his possession, in which event he shall
state their whereabouts,
if known to him.”
[22] The purpose of Rule 35(3) is
therefore to provide for a procedure to supplement discovery which
has already taken place but
which is alleged to be inadequate. (See
The MV Urgup Owners of the MV Urgup v Western Bulk Carriers
(Australia) (Pty) Ltd
1999 (3) SA 500
(C) at 515D; Swissborough
Diamond Mines (Pty) Ltd and Others v Government of the Republic of
South Africa
1999 (2) SA 279
(T) at 320C – 321F)
[23] The contents of a discovery
affidavit are regarded prima facie to be conclusive with regard to
the existence of documents.
A court is therefore reluctant to go
behind the affidavit. (See Makate v Vodacom (Pty) Ltd
2014 (1) SA
191
(GSJ) at par [16])
[24] In determining whether to go
behind the discovery affidavit, the court will have regard to:
(a) the discovery affidavit itself;
(b) the documents referred to in the
discovery affidavit;
(c) the pleadings in the action;
(d) any admissions made by the party
making the discovery affidavit; and/or
(e) the nature of the case or the
documents in question.
(See Continental Ore Construction v
Highveld Steal and Vanadium Ltd
1971 (4) SA 589
(W) at 597 - 598;
Chester Wholesale Meat v Panayou and Another
[2006] JOL 17115
(D) at
para [29] - [36])
[25] The party who is not satisfied
with the discovery has the onus of proving on the probabilities that
the documents exist or
are relevant. (See Swissborough Diamond Mines
(Pty) Ltd and Others v Government of the Republic of South Africa
supra at 320C.)
[26] The aforesaid principles and
approach are not only applicable where the relevance of the documents
is in dispute, but also
in respect of a dispute about the possession
and/or existence of the documents. ( See Richardson’s
Woolwasheries Ltd v Minister
of Agriculture
[1971] 4 All SA 212
(E)
at 218)
[27] The courts require a sufficient
degree of certainty that the documents exist before it will go behind
the affidavit. However,
the court will go behind the discovery
affidavit where there is a probability that the party making the
affidavit has or has had
other relevant documents in his possession
or power or has misconceived the principles upon which the affidavit
should be made.
(See Swissborough Diamond Mines v Government of the
RSA, supra, at 320 F-G; Makate v Vodacom (Pty) Ltd, supra at para
[16] and
[17])
[28] As held by Spilg, J in Makate v
Vodacom, supra at par [16]:
“The consequence of a court order
being de facto impossible to implement exposes the offending party to
contempt proceedings
for not procuring something he did not have in
the first place and exposes the order to ridicule. Accordingly it is
necessary
to be circumspect before directing production in the face
of the denial of the document’s existence.”
[29] In applications under 35(7), the
court has a discretion whether or not to compel discovery or
inspection. This discretion
is clear from the wording of the
subrule, which provides that:
“If any party fails to give
discovery as aforesaid or, having been served with a notice under
subrule (6), omits to give notice
of a time for inspection as
aforesaid or fails to give inspection as required by that subrule,
the party desiring discovery or
inspection may apply to a court,
which may order compliance with this rule and, failing such
compliance, may dismiss a claim or
strike out the defence.”
(Also see Venmop 275 (Pty) Ltd v
Cleverlad Projects (Pty) Ltd
2016 (1) SA 78
(GJ) at par [29];
Continental Ore Construction v Highveld Steal and Vanadium Ltd supra
at 594 - 595.)
DETERMINATION OF THE ISSUES
POSSESSION
[30] In the founding affidavit, as well
as during argument, the applicant did not contend that the respondent
is indeed in actual
and physical possession of the documents, but
that:
“………Bank
statements, financial statements and tax information remain in the
respondent’s possession
even if she does not actually have a
physical copy thereof.”
and
“Bank statements (even those
older than 5 years) are readily available and obtainable from the
respondent’s bank(s)
and constitute documents in respondent’s
possession and/or under the respondent’s control”
[31] Mr. Johnson for the applicant also
accepted the respondent’s explanation that the IRP certificates
and financial statements
do not exist and therefore only persisted
with the main relief in respect of the respondent’s bank
statements and income
tax assessment for the period August 2005 to 31
August 2010.
[32] The applicant urged this court to
apply a wider and secondary meaning to the word ‘possession’
as used in Rule
35(3) rather than interpreting it in a narrow sense.
The crux of the wider meaning and interpretation which the applicant
seeks
to be applied is that a party who is required to discover
documents in terms of Rule 35(3), is required to make such documents
available for inspection when it is not in his or her physical
possession but are readily available and obtainable by that party
from the relevant third parties that have actual possession thereof.
[33] Mr Johnson submitted that the
wider interpretation is justified by virtue of the fact that the
respondent has easy and unrestricted
access to the required
documents; that the documents are in possession of institutions,
namely the respondent’s bank and
SARS, which are oblige to make
the required documents available to the respondent on request; and
the fact that the respondent
can easily gain access to the documents
in order to make it available for inspection.
[34] In support of the applicant’s
contentions, the applicant relied on the dicta in MIP Holdings (Pty)
Ltd v Dawkins 2004
JDR 0130 (W) and International Law and Institute
(Pty) Ltd v Firstrand Bank Ltd 2006 JDR 0911 (T).
[35] In the MIP Holdings-case, the
court had to determine whether a servant who possesses a thing on
behalf of his master is regarded
as the possessor, which was answered
in the negative.
[36] The International Law and
Institute-case involved the question whether documents that where in
possession of a company within
the Firstrand Group were to be
considered being in the possession of Firstrand Bank for purposes of
discovery. The court held
that the said company and the bank formed
part of the Firstrand group and divisions thereto and that the
entities in the same group
have easy access to documentation in
respect of the other entities from which a rigid reliance on
compartmentalizing of the different
entities of the group is
misplaced and misleading.
[37] The respondent is not part of SARS
nor the relevant bank that are, probably, in possession of the
documents.
[38] It is further trite that documents
that are in the possession of a party’s agent, i.e. an attorney
or auditor, have to
be discovered by that party. (See Arlow v Arlow
(2008) JOL 22881 (T) at par [11]). It cannot be said that the
relationship between
the respondent and the relevant bank and SARS
are akin to that of principle and agent. This is also not what the
applicant contends.
[39] The aforesaid decided cases on
which the applicant relied are therefore distinguishable from the
present matter and are not
authority for the applicant’s
contentions.
[40] The only basis upon which the
respondent can therefore be compelled to make the documents that are,
possibly, in the possession
of the bank and SARS available for
inspection in terms of Rule 35(3), is if ‘possession’ is
given the meaning and interpretation
that the applicant urges this
court to give.
[41] The state of the law in respect of
interpretation was expressed in Natal Joint Municipal Pension Fund v
Endumeni Municipality
(2012 (4) SA 593
(SCA) at par [18]) as follows:
“Interpretation is the process of
attributing meaning to the words used in a document, be it
legislation, some other statutory
instrument, or contract, having
regard to the context provided by reading the particular provision or
provisions in the light of
the document as a whole and the
circumstances attendant upon its coming into existence. Whatever the
nature of the document, consideration
must be given to the language
used in the light of the ordinary rules of grammar and syntax; the
context in which the provision
appears; the apparent purpose to
which it is directed and the material known to those responsible for
its production. Where more
than one meaning is possible each
possibility must be weighed in the light of all these factors. The
process is objective, not
subjective. A sensible meaning is to be
preferred to one that leads to insensible or unbusinesslike results
or undermines the
apparent purpose of the document. Judges must be
alert to, and guard against, the temptation to substitute what they
regard as
reasonable, sensible or businesslike for the words actually
used. To do so in regard to a statute or statutory instrument is to
cross the divide between interpretation and legislation; in a
contractual context it is to make a contract for the parties other
than the one they in fact made. The ‘inevitable point of
departure is a language of the provision itself’, read in
context and having regard to the purpose of the provision and the
background to the preparation and production of the document.”
(Also see Bothma-Batho Transport (Edms)
Bpk v S Bothma and Seun Transport (Edms) Bpk
2014 (2) SA 494
(SCA) at
par [10] – [12] ; Novartis South Africa (Pty) Ltd v Maphil
Trading (Pty) Ltd
2016 (1) SA 518
(SCA) at para [24] – [31])
[42] Thus, in order to determine
whether the rule-maker intended to use the word ‘possession’
in the wide sense, the
context provided to the word by reading the
provisions of Rule 35(3) in the light of the whole of Rule 35, the
other applicable
rules of court and the circumstances attended upon
its coming into existence must be objectively considered.
[43] Rule 35(1) provides that any party
to an action may require from the other party, by notice, to discover
under oath all documents
to any matter in question in such action
which are or have at any time been in the possession or control of
that party.
[44] The manner in which discovery must
be made, is expressly provided for in Rule 35(2). It must be made in
accordance with Form
11 of the First Schedule to the rules. It
requires from a party to specify separately such documents and tape
recordings in his
or her possession or that of the agent; such
documents and tape recordings in respect of which he or she has a
valid objection
to produce; and such documents and tape recordings
which he or she, or the agent, had but no longer has in their
possession at
the date of the affidavit.
[45] Form 11 makes provision for the
following:
“(1) I have in my possession or
power the documents relating to the matters in question in this cause
set forth in the first
and second parts of the First Schedule hereto.
(2) I object to produce the said
documents set forth in the second part of the said schedule hereto.
(3) I do so for the reason that
................................... (here state upon what grounds the
objection is made, and verify
the fact as far as may be).
(4) I have had, but have not now in my
possession or power, the documents relating to the matters in
question in this action, set
forth in the Second Schedule hereto.
(5) The last-mentioned documents were
last in my possession or power...........
.................................................(state
when).
(6) The
............................(here state what has become of the
last-mentioned documents, and in whose possession they are
now).
(7) According to the best of my
knowledge and belief, I have not now, and never had in my possession,
custody, or power, or in
the possession, custody or power of my
attorney, or agent, or any other person on my behalf, any document,
or copy of, or extract
from any document, relating to any matters in
question in this cause, other than the documents set forth in the
First and Second
Schedules hereto.”
[46] According to the learned authors
of the work Herbstein and Van Winsen, The Civil Practice of the High
Courts of South Africa
(5th Edition, Volume 1, p 797), the wording of
Form 11 has been taken over from the English Rule in respect of
discovery. The
essence of the English Rule is summarised in
Halsbury’s, Laws of England (4th Edition, Volume 13, par 39),
as follows:
“The existence of all documents
must be disclosed which the party giving the discovery has or has had
in his possession, custody
or power. For this purpose ‘possession’
means the physical or corporeal holding of the document pursuant to
the right
to its possession, as in the case of an agent or bailee;
‘custody’ means the mere actual physical or corporeal
holding
of a document, regardless of the right to its possession, as
in the case of a servant or employee; and ‘power’ means
an enforceable right to inspect it or to obtain possession or control
of the document from the person who ordinarily has it in
fact. The
requirements of the rules that the documents to be disclosed must be
or have been ‘in the possession, custody
or power’ of the
party making the discovery are disjunctive in their operation, so
their disclosure must be of all documents
which are or have been in
possession or the custody or the power of that party; and equally
only those documents can properly
be withheld from disclosure which
have not been in the possession or custody or
power of that party.
Accordingly, all documents must be
included of which the party given discovery has, or has had,
possession or custody even if he
had, or has had, no property at all
in them; but documents which never were in his possession or custody
need not be included
unless he had some kind of property in them.
Documents which are or were in the possession or custody of the
party’s agent
must be included provided the agent held them in
his capacity as agent.”
[47] With regard to the purpose of the
first part of Form 11, the court in Carpede v Choene NO and Another
(1986 (3) SA 445
(O) at 453H) held that:
“What defendant should have done,
therefore, is that she should first of all, have made full and
timeous discovery of all
the documents in her possession and which
relate to the matters in question in the cause, in the sense that
these documents should
have been mentioned in the first and second
part of the first schedule to her discovery affidavit. Thereafter
she should have
deposed in paras (2) and (3) of the discovery
affidavit that she objects to produce the documents said forth in the
second part
of the first schedule of her discovery affidavit because
(seeming such to be the case) they …”
[48] The second part of Form 11,
paragraphs 4 to 6 thereof, further requires from the discovering
party to set out any documents
which has been in his or her
possession but is no longer in his or her possession or power, and,
in such event, to state when the
documents were last in his or her
possession, what have become of it and in whose possession the
documents are. It does not place
a duty on the discovering party to
source and obtain those documents in order to make it available for
inspection.
[49] It is trite that no discovery
order can be obtained against the person into whose possession the
document has passed if that
person is not a party to the matter.
(See Benson and Simpson v Controllers of Orenstein Arthur Koppel Ltd
(In Liquidation)
1918 WLD 45).
The party desiring production of such
a document will have to obtain it by means of a subpoena duces tecum
issued in terms of
Rule 38(1).
[50] Rule 38(1) allows any party
desiring the attendance of any person to give evidence at the trial
to sue out from the office
of the registrar one or more subpoenas for
that purpose. If any witness has in his possession or control any
deed, instrument,
writing or thing which the party requiring his
attendance desires to be produced in evidence, the subpoena shall
specify such document
or thing and require him to produce it to the
court at the trial.
[51] That witness must, in terms of
Rule 38(1)(b), hand the document over to the registrar as soon as
possible, unless the witness
claims that it is privileged.
Thereafter the parties may inspect the document and make copies or
transcription thereof, after
which the witness is entitled to its
return. (See Trust Sentrum (Kaapstad) (Edms) Bpk v Zevenberg
1989
(1) SA 145
(C) at 149; PFE International and Others v Industrial
Development Corporation of South Africa Ltd
2013 (1) SA 1
(CC) at
para [17] - [32])
[52] Having regard to the context of
Rule 35(1) and (2), as well as the provisions of Rule 38(1), it is
evident that the purpose
of the rule, and the intention of the
rule-maker, is not to oblige a party to search for and obtain any
documents that were previously
in his or her possession in order to
discover and make same available for inspection. All that is
required from the discovering
party is to specify such documents,
state when the documents were last in his or her possession or power,
what has become of the
documents and in whose possession they are.
[53] It is obvious that the purpose of
the aforesaid requirements in respect of those documents is to afford
the other party an
opportunity to obtain access to those documents in
terms of the provisions of Rule 38(1) by the issuing of a subpoena
duces tecum.
[54] The same principles that are
applicable to Rule 35(1) and (2) also apply to the provisions of Rule
35(3), as was confirmed
in Copalcor Manufacturing (Pty) Ltd v GDC
Hauliers (Pty) Ltd
(2000 (3) SA 181
(W) at par [24]):
“Rule 35(3) must be read in
context with subrules (1), (2), (4) and (6). Questions such as when a
document is under the control
of a party as referred to in subrule
(1) and the proper method of discovery of documents as referred to in
subrule (2) and the
sanction against use of undiscovered
documentation as referred to in subrules (4) and (6), are, in my
view, mutatis mutandis applicable
to discovery pursuant to a Rule
35(3) notice. These general principles of discovery are therefore as
applicable to discovery pursuant
to a notice in terms of Rule 35(3)
as they are pursuant to a notice for discovery under Rule 35(1).”
[55] If one has regard to the specific
provisions of Rule 35(3), it requires from the discovering party to
make the specified documents
available for inspection in accordance
with Rule 35(6). If the documents are not in his or her possession,
the party must state
it on oath and is then obliged to state their
whereabouts, if known.
[56] If it was the purpose of the rule,
or the intention of the rule-maker, to afford the wider meaning to
the word ‘possession’
as submitted by the applicant,
then the second leg and requirement of subrule (3), as well as the
second part of Form 11, are
superfluous. If that was the intention,
the party who received a notice to discover will have to search for
and obtain the documents
that were previously in his or her
possession from the person in whose possession the documents are in
order to make it available
for inspection. There would then be no
need for such a party to specify the whereabouts of any documents
that are not in his or
her possession in the Rule 35(3) response or
even in Form 11.
[57] Having regard to the contents of
Rule 35 as a whole and in context with the provisions of Rule 38(1),
as well as the principles
in respect of a party’s obligation to
make discovery of all documents in his or her possession, or that of
his or her agent,
there is no room to give a wider meaning and
interpretation to the word ‘possession’ as used in Rule
35(3).
[58] I can find no reason or
justification to do so. To do that, this court will have to negate
the provisions and purpose of the
rule, as well as the settled
principles and law in respect of discovery.
[59] The relevant relationship between
the respondent and her bank, as well as with SARS, also does not
justify the wider meaning
and interpretation of the provisions of
Rule 35(3).
[60] It is accepted that the basic
relationship between a banker and a customer is of a contractual
nature, being one of debtor
and creditor. (See Standard Bank of SA
Ltd v Oneanate Investments (Pty) Ltd
1995 (4) SA 510
(CPD) at 530G –
531E) There is no evidence of the specific obligations that the bank
has towards the respondent in respect
of the power, control and
possession of the bank statements nor is there any evidence that the
said bank is indeed still in possession
of the relevant bank
statements.
[61] Although it might be correct to
accept that a person has, in the ordinary course of business, access
to his or her bank statements,
the question to be answered in this
matter is whether it is also the position in respect of bank
statements that are older than
5 years and whether such statements
should be regarded as being in the possession, power or control of
the respondent. In the
absence of any evidence to the contrary, I am
unable to find that the respondent has any power or control over the
bank’s
affairs and administration, particularly with regard to
any bank statements in respect of accounts that are, or were, under
the
bank’s control. I am therefore of the view that the
respondent is not in possession of the required bank statements,
being
possession as contemplated in Rule 35(3).
[62] The relationship between the
respondent and SARS is also not a novel one. In the matter of Tooch
v Greenaway
(1922 CPD 331)
Watermeyer, AJ, as he then was, was also
requested to direct a respondent to discover and disclose his income
tax return, alternatively
to authorise the Receiver of Revenue to
allow inspection thereof. In that matter, the respondent also did
not discover and disclose
any income tax returns as he was not in
possession thereof. However, the applicant applied for an order
directing the respondent
to make discovery of the returns.
Watermeyer, AJ refused the application and held that:
“Here the respondent is not in
possession of the document applied for so I do not see how the
applicant can succeed in the
first part of the application.
Alternatively the applicant asks for an order authorising the
Receiver of Revenue, Cape Town, to
allow the applicant’s
attorney to inspect the income tax return. It seems to me in the
first place this is not an order
which the court can make, and in the
second place if it could, this is not the stage where such an order
should be applied for.
This income tax return is in existence and in
possession of the Receiver of Revenue, and he can always be called as
a witness
at the trial to produce it if it is relevant in the action;
and when he’s called as a witness and refuses to produce the
return, it is for the Court to decide whether it would order its
production in terms of the Income Tax Act. ….. It seems
to me
that the correct course, if the applicant wishes to put the document
in as evidence, is to call the Income Tax Commissioner
when the
action is tried, and if he refuses to produce it, the applicant can
then make the application for its production, and
the Court can
decide whether or not it should be produced. That is, however, quite
a different matter from granting an order for
inspection before the
trial for which no precedent has been quoted.”
[63] It is evident from the
abovementioned decided cases and the principles in respect of
discovery that the law as applied by Watermeyer
has since then not
changed. (Also see Scott v Scott [2006] JOL17813 (C) at p 10; Trust
Sentrum (Kaapstad) (Edms) Bpk and Another
v Zevenberg supra).
[64] Although the applicant also
contended that the contents of the respondent’s opposing
affidavit contradicted the respondent’s
affidavit in reply to
the Rule 35(3) notice, which according to the applicant demonstrates
that the respondent is not being open
and frank with the court and
which places the veracity of her denial in doubt, there is no basis
on which her version can be rejected.
In the Rule 35(3) affidavit,
she stated that she is not in possession of the documents. Rule
35(3) does not require from her
to give any reasons why the documents
are not in her possession. The respondent elaborated on this issue
in her opposing affidavit.
In any event, the applicant does not rely
on actual and physical possession in support of the relief.
[65] Accordingly, the respondent cannot
be compelled to make the said documents, being the bank statements
and income tax assessments
for the period August 2005 to 31 August
2010, available for inspection in terms of Rule 35(3) read with
subrule (6) as I cannot
find that those documents are in her
possession, being ‘possession’ in the ordinary sense and
meaning as contemplated
in Rule 35.
[66] There is another reason why I
would not have been inclined to grant the main relief. As stated
above, a court has a discretion
in applications of this nature. For
the reasons that follow, I am not inclined to exercise my discretion
in favour of the applicant.
[67] The main action was instituted
during 2006, approximately 10 years ago. Although the merits were
only settled during March
2014 and the said amendment to the plea was
effected thereafter, the issues between the parties were already
defined in the particulars
of claim and the initial plea.
[68] The respondent’s discovery
affidavit was already filled on the 30 August 2012.
[69] The applicant did not provide a
satisfactory explanation, if any, why discovery of the said documents
were only requested during
May 2015. From the onset, the applicant
knew that the respondent’s claim is disputed and ought to have
known that the documents
might be relevant to the respondent’s
claim and the quantum thereof. It, however, only decided to request
discovery of the
documents at this very late stage in the proceedings
and after such a lengthy period of time since the cause of action
arose.
By saying this, I appreciate the fact that a party may at any
time during the proceedings make use of the procedure in Rule 35(3).
However, the applicant ought to have known that there is a great
possibility that documents relating to the period in issue could
be
lost over time and that the respondent will in such event not be able
to make it available for inspection.
[70] The applicant now expects from the
respondent to search for and obtain the documents which relate to a
period of more than
5 years ago and which documents are not in her
possession. Notwithstanding the applicant’s own belated
actions, the applicant
blames the respondent of being wilful,
obstructive and obtuse in her conduct and failure to obtain the
documents, which are unfounded.
[71] The applicant can obtain the
documents and information through a subpoena in terms of Rule 38 of
the rules. The applicant
is therefore not without a remedy.
[72] Accordingly, the applicant’s
application in respect of the main relief cannot succeed.
COMPLIANCE WITH RULE 35(3) –
WHEREABOUTS THE OF
DOCUMENTS
[73] The respondent did not state the
whereabouts of the documents in her affidavit in response to the Rule
35(3) notice.
[74] Although it was not clear from the
applicant’s founding affidavit on what basis the applicant
contends that the respondent
did not comply with the provisions of
Rule 35(3), it was evident upon the mere reading of the rule and the
contents of the respondent’s
Rule 35(3) affidavit that she
failed to state the whereabouts of the documents.
[75] Mr. Grobler for the respondent
contended that the respondent does not have an obligation to deal
with the whereabouts of the
documents if it is not known to her. If
not known, this aspect does not have to be addressed in the
affidavit.
[76] It is not necessary to consider
the merits of that contention as it is evident from the respondent’s
opposing affidavit
that she indeed has knowledge of the whereabouts
of the documents. She gave her consent to the applicant to approach
SARS and seeks
whatever documents related to her. I similar consent
was not given in respect of her bank statements.
[77] The respondent ought to have known
when responding to the Rule 35 notice that the bank statements were,
and might be, in the
possession of the bank. The particulars of the
bank are undoubtedly known to her. The respondent did not advance
any reason why
the whereabouts of the bank statements, especially the
particulars of the bank, could not be disclosed.
[78] The applicant will only be in a
position to issue a subpoena to procure the bank statements if the
particulars of the bank
are disclosed by the respondent.
[79] Mr. Grobler however contended that
Rule 35(3) is not intended to be used to obtain information that a
party requires for the
preparation for trial. If the applicant needs
the particulars of the respondent’s bank, the bank accounts and
other related
particulars and information, it must do so in terms of
the provisions of Rule 21. The applicant could also informally
request
the whereabouts of the documents, which the applicant did not
do.
[80] In terms of Rule 35(7) the court
has a discretion to order compliance with the rule, being Rule 35.
This includes proper compliance
with Rule 35(3).
[81] In any event, section 173 of the
Constitution of the Republic of South Africa, 1996 gives this court
the inherent power to
protect and regulate its own process, taking
into account the interest of justice.
[82] The applicant, as all litigants,
has the right to a fair trial, which right can only be protected, in
the circumstances of
this matter, if the applicant is provided with
the whereabouts of the bank statements in order to procure it for
trial in terms
of the provisions of the rules.
[83] I am therefore inclined to compel
the respondent to provide the applicant with the particulars of the
bank and/or banks at
which she held bank accounts during the period
August 2005 to August 2010 as, firstly, the respondent was obliged to
state the
whereabouts in her rule 35(3) affidavit and, secondly, as
it is in the interest of justice that the information be provided to
the applicant to ensure a fair trial.
COSTS
[84] Although I am, in the exercising
of my discretion, inclined to grant the aforementioned order, it does
not mean that the applicant
was substantially successful with the
application.
[85] The applicant’s case is set
out in its founding affidavit. It is clear that the application was
premised on the applicant’s
alleged right to demand discovery
from the respondent of the documents that were not in actual and
physical possession of the respondent
and the proposed interpretation
and meaning of the word ‘possession”. These were the
material issues between the parties.
[86] The alternative relief did not
form part of the material issue nor was it the real substance of the
matter. This is evident
from the manner in which this issue was
raised in the founding affidavit.
[87] The applicant did not, as is
practice in this division, informally require from the respondent to
disclose the whereabouts
of the documents, in particular that of the
bank statements, before this application was launched. However, the
applicant addresses
a letter on the 3 August 2015 to the respondent
in which the applicant took issue with the fact that the respondent
contends that
she cannot obtain copies of the documents from SARS. In
that letter, the applicant did not address the issue of the
non-disclosure
of the whereabouts at all.
[88] A simple request could have had
the result that it would have been unnecessary to approach this court
with an application of
this nature merely to obtain the whereabouts
of the documents.
[89] However, even if the respondent
provided the applicant with the whereabouts of the documents, it is
evident that the applicant
would still have pursued the application
in respect of the main relief. This is clear from the fact that the
applicant persisted
with the main relief notwithstanding the fact
that the respondent gave an explanation of the reasons why she is not
in possession
of the documents and why she cannot make it available
for inspection.
[90] The main relief took up most of
the papers before this court, as well as the arguments during the
hearing of the matter. I
have already indicated that the applicant’s
application in respect of the main relief cannot succeed.
[91] Costs are in the discretion of the
court, which discretion must be exercised judicially upon the
consideration of the facts
and relevant circumstances of each case.
These would, inter alia, include the nature of the proceedings and
the conduct of the
parties. In essence, it is a matter of fairness
to both parties. (See Intercontinental Exports (Pty) Ltd v Fowles
1999 (2) SA 1045
(SCA) at par [25]; Ferreira v Levin, Vryenhoek v
Powell
[1996] ZACC 27
;
1996 (2) SA 621
(CC) at par
[3]
)
[92] The general rule is that a
successful party should be given costs. In determining who the
successful party is, the court looks
at the substance and not the
form of the judgment. If the matter turned on issues in regard to
which the ultimately successful
party was unsuccessful, the court may
depart from the general rule. (See Galion (Pty) Ltd v Burger
1972 (4)
SA 652
(C) at 654B; Herbstein and Van Winsen, The Civil Practice of
the High Courts of South Africa, Volume 2, at p 957 – 958)
[93] Although I am inclined to grant an
order against the respondent, the circumstances of the matter justify
the exercise of my
discretion in respect of the costs issue in favour
of the respondent. The matter essentially turned on the issue in
respect of
the main relief to which the applicant was unsuccessful.
That issue also forms the substance of this judgment. The respondent
was
therefore substantially successful. Having regard to the
aforesaid, as well as all the relevant circumstances of the matter as
a whole and in respect of to the alternative relief, such order will
also be fair and just. I therefore cannot find any reason why
the
respondent should not have her costs.
[94] Accordingly, the following order
is made:
[94.1] The respondent is directed to
file a supplementary affidavit as contemplated in Rule 35(3) within
10 days from the date of
this order in which affidavit the respondent
shall state the whereabouts of the respondent’s bank statements
for the period
August 2005 to 31 August 2010, as well as the
particulars of any and all bank institutions at which the respondent
held bank accounts
during the period August 2005 to 31 August 2010.
[94.2] The applicant is ordered to pay
the costs of the application.
PIENAAR, AJ
On behalf of plaintiff/respondent:
Adv. J Johnson
Instructed by:
Mr. HL Buchner
Honey Attorneys
Bloemfontein
On behalf of defendant/applicant:
Adv. S Grobler
Instructed by:
Mr. LE Companie
Phatshoane Henney Attorneys
Bloemfontein