About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2016
>>
[2016] ZAFSHC 51
|
|
Ramakarane v Centlec (Pty) Ltd (4907/2006) [2016] ZAFSHC 51 (18 February 2016)
IN THE HIGH COURT
OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Case
number: 4907/2006
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 a
pplicant’s
Rule 35(3) notice delivered on the 25
th
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 25
th
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 22
nd
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
(5
th
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
(4
th
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
/PC