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[2018] ZASCA 189
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Viziya Corporation v Collaborit Holdings (Pty) Ltd and Others (1189/17) [2018] ZASCA 189; 2019 (3) SA 173 (SCA) (19 December 2018)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 1189/17
In
the matter between:
VIZIYA
CORPORATION APPLICANT
and
COLLABORIT HOLDINGS
(PTY) LTD FIRST
RESPONDENT
JANNIE
POTGIETER SECOND
RESPONDENT
NICO VAN DER
WALT THIRD
RESPONDENT
DOLF
MARITZ FOURTH
RESPONDENT
MORNÉ
PARSONS FIFTH
RESPONDENT
JOHAN
CARSTENS SIXTH
RESPONDENT
WERNER
ROESTORF SEVENTH
RESPONDENT
KUBAN
NAIDOO EIGHTH
RESPONDENT
Neutral
Citation:
Viziya
Corporation v Collaborit Holdings (Pty) Ltd & others
(1189/17)
[2018] ZASCA 189
(19 December 2018)
Coram:
Wallis, Saldulker, Mathopo and Van
der Merwe JJA and Rogers AJA
Heard:
22 November 2018
Delivered:
19 December 2018
Summary:
Anton Piller order
– requirements –necessity for evidence of prima facie
existence of vital documents and materials
– electronic
searches – need for specificity in regard to objects of search
– purpose of order not to give the
applicant access to
documents or material or to search for evidence on which to base
claim – not to be used to obtain early
discovery
ORDER
On
appeal from
:
Gauteng Division of the High Court, Pretoria (Van Nieuwenhuizen J
sitting as court of first instance):
1 The respondent’s
application to lead further evidence on appeal is dismissed with
costs.
2 The application for
leave to appeal is dismissed with costs including costs consequent
upon the employment of senior counsel.
JUDGMENT
Mathopo JA (Wallis,
Saldulker and Van der Merwe JJA and Rogers AJA concurring):
Introduction
[1]
Certain businesses, particularly those operating in the oil and gas
and metals and mining industries, employ enormous quantities
of
plant, equipment and heavy machinery, which require maintenance.
Organising their maintenance in an efficient manner and, where
applicable, taking advantage of warranties by the suppliers of the
plant, machinery and equipment, requires considerable planning,
to
minimise or avoid ‘downtime’ and to limit the extent of,
or avoid entirely, plant shutdowns. The applicant, Viziya
Corporation
(Viziya), develops and sells computer systems and software that
assist businesses in performing this task. Its flagship
product is
referred to as ‘WorkAlign’. It claims that this product
is unique in the field, very successful and that
it took a
considerable amount of time and money to develop.
[2] On 25 August 2014
Viziya concluded an agreement with the first respondent, Collaborit
Holdings (Pty) Ltd (Collaborit), in terms
of which Collaborit was to
facilitate the referral and sale of Viziya products and services. In
return for this it would be paid
fees in accordance with a formula
set out in the agreement. This case revolves around two provisions in
clause 5 of that agreement.
The first required Collaborit to use
all necessary precautions to ensure that disclosure of Viziya’s
proprietary property
would not be made available to a competitor or a
suspected competitor of Viziya. The second provided that:
‘
Other
than [Collaborit’s] existing Mobility software product,
[Collaborit] shall not sell or develop solutions that are competitive
to existing Viziya products.’
[3]
The agreement terminated on 10 January 2016, pursuant to notice given
by Collaborit on 10 November 2015. Viziya alleged that
during the
period of the contract and in breach of the quoted provision of
clause 5, Collaborit developed both a work scheduler
and a
warranty tracker for its own product described as Work Manager Work
Bench (WMWB). It alleged that these products did not
exist when the
agreement was concluded and that Collaborit endeavoured to market
this product in competition with Viziya’s
WorkAlign product.
Additionally, Viziya contended that, in developing its own work
scheduler and warranty tracker, Collaborit made
use of confidential
information it had obtained from Viziya pursuant to and during the
course of the contract. Lastly, it alleged
that in March 2016
Collaborit engaged in unlawful competition with Viziya by sabotaging
its endeavours to sell the WorkAlign product
to Anglo American. It
said that Mr Maritz, the fourth respondent, attended marketing
presentations it made to Anglo American on
31 March 2016 and 1 April
2016, representing himself as an employee of Anglo American and
taking the opportunity to persuade the
representatives of Anglo
American not to acquire Viziya’s WorkAlign product but to build
an appropriate solution in-house.
[4] Based on these
allegations Viziya brought an application for an Anton Piller order
in the Gauteng Division of the High Court,
Pretoria on 12 May 2016.
As is customary with such applications, it was brought
ex parte
and was heard in chambers by Mabuse J. He granted an order as
prayed for by Viziya. After service of the order and its partial
execution,
Collaborit and second to eighth respondents, who are
either directors or employees of Collaborit, applied to set aside
Mabuse J’s
order (‘the reconsideration application’).
The application was heard by Janse van Nieuwenhuizen J. She handed
down
judgment on 3 August 2017, setting aside Mabuse J’s order.
Thereafter she refused leave to appeal. An application for leave
to
appeal addressed to this court was referred for oral argument in
terms of s 17(2)(d) of the Superior Courts Act 10 of 2013 (the
Act).
That is the matter before us.
Issues
[5] There is a
preliminary issue arising from an application to lead further
evidence on appeal. The main issues are whether leave
to appeal
should be granted and whether the high court exercised its discretion
properly when it discharged the Anton Piller order.
Application for leave
to appeal
[6] The high court found
that Viziya had satisfied the first two requirements of an Anton
Piller order namely that (1) Viziya had
prima facie established a
cause of action against Collaborit which it intended to pursue; (2)
Viziya had in its possession documents
or things which constituted
vital evidence in substantiation of Viziya’s cause of action
(but in respect of which Viziya
could not claim a real or personal
right). It, however, held that Collaborit failed to establish that
there was a real and well-founded
apprehension that this evidence
might be hidden or destroyed or in some manner be spirited away by
the time the case came to trial
or to the stage of discovery. It
accordingly discharged the Anton Piller order. Whether leave to
appeal should be granted is bound
up with the prospects of success
and I will deal with the two together.
Application to lead
further evidence
[7]
Collaborit brought this application in terms of s 19(b) of the
Act. It arose in these circumstances. In terms of the order
granted
by Mabuse J the hard drives of computers and other devices were
to be imaged and searched for relevant documents by
the forensic
services arm of Price Waterhouse Coopers (PWC). It is common cause
that the Anton Piller order was executed on or
about 13 May 2017,
resulting in the copying of all forms of digital and physical
information at the premises of Collaborit by PWC.
The aforesaid
information included laptops, phones, external hard drives, email
accounts, SAP Systems, shared online storage environments,
copies of
all handwritten notes or documents and even pictures of white board
sketches. On 31 May 2017 Fabricius J made an order
that no one might
access or examine the documents, or copy information that had been
preserved, pending the finalisation of the
reconsideration of the
order.
[8]
During October 2017, Collaborit sought to inspect the preserved
information in the care of PWC. Upon inspection of the
records in the
custody of PWC, it emerged that nine hard drives ‘had gone
missing’ from the custody of PWC. During
October 2017
Collaborit's attorneys corresponded with Viziya's attorneys with a
view to obtaining access. Permission was granted.
However, before the
access was actually exercised, PwC advised Collaborit's attorneys
that nine hard drives were missing. Collaborit’s
attorneys then
corresponded with PwC attorneys. At first PwC's attorneys refused to
grant access. Following an urgent application,
which Collaborit
issued in late November 2017, PwC's attorneys eventually agreed to
allow an inspection by a suitable expert for
Collaborit. This
inspection took place on 10 April 2018 and was the first occasion on
which anyone on Collaborit's behalf inspected
the imaged material. By
this time Collaborit had known for around five months that nine hard
drives were missing. The expert who
inspected the remaining material
on 10 April 2018 found that some of the material had been accessed
subsequent to Fabricius J’s
order of 31 May 2016, although
according to PwC only its own staff ever had access to the material.
Disturbed by the loss of the
hard drives, Collaborit addressed a
letter to PWC requesting information about the hard drives and
persons who might have accessed
them. PWC, through its attorneys,
denied that it had authorised anybody to access the documents and
further stated that it became
aware of the missing hard drives during
the period 25 October 2017 to 5 November 2017. It undertook to allow
independent experts
to examine when last those hard drives, still in
the possession of PWC, were accessed. After examination, the expert
concluded
that the hard drives had been processed and accessed after
31 May 2017. This is broadly the new evidence that Collaborit
sought
to have admitted on appeal.
[9] It is clear that Collaborit knew
as early as October 2017 that the hard drives were missing. Viziya’s
application for
leave to appeal to this court is dated 14 November
2017. The opposing affidavit was dated 13 December 2017 and contained
a letter
from PWC’s attorney indicating that his client was
withdrawing from performing any function in terms of the Anton Piller
order. An earlier letter advised of the missing hard drives. The
application to lead further evidence was only brought in July 2018
and related to both the application for leave to appeal and the
appeal itself, if leave were to be granted. The only additional
information it provided was that some of the remaining hard drives
had apparently been accessed in breach of the order of Fabricius
J.
Viziya opposed the application on the basis that there was a delay on
the part of Collaborit and no proper explanation proffered
for
bringing the application so late. This is true, although Collaborit
didn't know about such illicit access until its expert
inspected the
material on 10 April 2018. I agree with Viziya that, at the latest,
Collaborit should have brought this application
much earlier during
the application for leave to appeal. More importantly, however, is
that the proposed new evidence is not weighty
or material. It is not
relevant to the question of whether the Anton Piller order was
correctly discharged. There is accordingly
no merit in this
application.
Background facts
[10] Viziya is a company
registered and incorporated in Canada. It specialises in developing
and selling third party/add-on Enterprise
Asset Management (EAM)
software solutions for Enterprise Resource Planning (ERP) systems.
Specific software solutions that form
part of Viziya’s
WorkAlign Suite of products include a graphical scheduler, a
web-based warranty tracker and an analytic
tool. The customer base of
Viziya consists mostly of asset intensive companies that operate in
the natural resources industries.
To enable customers to optimise
their asset management process Viziya developed and refined its
WorkAlign Suite of its products.
The WorkAlign Suite comprises the
following solutions:
A. A Work scheduler;
B. A pre-packaged Asset
Management analytics & cloud analytics suite (an alternative
solution compared to the traditional development
of Business
Warehouse reports);
C. A Maintenance
budgeting solution;
D. A Warranty tracker;
E. A
Mobile solution (a mobile solution to be used by persons in the
field).
[11]
Viziya explained that this software is sold as ‘bolt-on’
products, in the sense that it is compatible with and
can be bolted
on to any ERP software product. The work scheduler is Viziya’s
main product and takes an asset-centric approach
to planning and
scheduling maintenance to enhance each step in the work management
process. The WorkAlign scheduler was said to
focus on assets using
Viziya’s patent pending technology. The solution eliminates
Preventative Maintenance work order and
scheduling surprises and the
Preventative Maintenance focus process gives the customer insight
into its future needs. Viziya’s
WorkAlign Suite was said to be
unique because of its range of focus and richness in functionality.
[12] Viziya contended
that during May 2014, while co-sponsoring the ‘Mastering SAP
Conference’ in South Africa, it became
aware of Collaborit, as
a consulting company in what it referred to as the asset management
space. Later that year it did a presentation
and proposal to Anglo
Platinum with a view to selling some of its WorkAlign products to
Anglo Platinum. It came to the attention
of Collaborit that Viziya
had made a presentation to Anglo Platinum. Collaborit’s
Director, Mr Nico van der Walt (Van der
Walt). by email offered to
assist Viziya with the sale of its product. Van der Walt indicated to
Viziya that Collaborit wished
to explore the possibility of rendering
implementation services for Viziya. In the email sent to Viziya Van
der Walt set out Collaborit’s
proposal as follows:
‘
We
at Collaborit are aware that you have done a presentation to Anglo
American (Amplats) in respect of the Viziya products. Since
we are
intimately involved at Anglo Platinum, at various levels, we may be
able to assist this effort of yours with our local presence
(if
practical). We would also like to explore with you the possibility of
rendering the implementation services (with your support)
should you
have a successful sale of Amplats.’
[13]
In another email sent on 5 August 2014 Van der Walt informed Viziya
that Collaborit was involved in discussions with another
company that
was looking to enlist the services of Prometheus, one of Viziya’s
global rivals. He promised Viziya that he
would recommend to the
mining company, which later according to the evidence, turned out to
be Anglo American, to demonstrate Viziya’s
products as an
alternative to Prometheus.
[14] The discussions
between Van der Walt and Viziya led to the signing of a Referral and
Sales Agreement on 26 August 2014. In
terms of the agreement Viziya
would be the vendor and Collaborit would promote the sale of these
products (also known as solutions)
on the basis that Collaborit would
be a consulting agent (ie not a software product vendor). Collaborit
agreed to facilitate the
referral and sale of Viziya's products on
the understanding that Viziya would retain all of the intellectual
property rights in
its products. In terms of clause 5 of the
agreement Collaborit agreed not to sell or develop solutions that
were competitive to
Viziya’s products but promote them.
Collaborit further agreed not to modify, reproduce duplicate or copy
Viziya's products
or software.
Litigation history
[15]
On 18 November 2015 Collaborit gave notice of its intention to
terminate the agreement. Hahn & Hahn Attorneys, on behalf
of
Viziya, wrote a letter to Collaborit on 11 December 2015 reminding it
of its obligations in terms of the agreement, in particular
that it
should not sell or develop solutions that were competitive with
Viziya's products. It was further pointed out to Collaborit
that
their obligations of confidentiality and undertakings in regards to
proprietary information would endure beyond the agreement.
A written
undertaking to desist from allegedly unlawful conduct and to retain
all its records, was met with a denial from Collaborit
that it had
breached the agreement. Mr Potgieter, the managing director of
Collaborit, in his response stated that Collaborit’s
WMWB
product had been in the market for years before the agreement was
signed. He also stated that the termination of the agreement
came
about because Viziya did not adhere to its obligations in terms of
the agreement. As a result Collaborit refused to give any
undertaking. Despite threats of litigation Viziya did nothing until
six months later in May 2016.
[16]
On 7 May 2016 a former employee of Collaborit, later identified as Mr
Dreyer (former Operations Manager), informed Mr Visser
of Viziya that
during the course of 2015, when the contract was still in existence,
Collaborit developed a scheduler in breach
of the agreement.
According to Dreyer, although the scheduler was initially customised
to the structure of the SAP user interface,
it had features of a user
interface similar to Viziya’s WorkAlign Scheduler (its
web-based graphic scheduler). It was also
revealed to Visser that
Collaborit had sub-contracted a company based in India, Maventic, to
assist them with the development of
their web-based interface.
Another former employee of Collaborit, one Ferndale, provided Viziya
with information that on one occasion
when employed there he was
prevailed upon by Collaborit’s CEO Mr Potgieter (the second
respondent) to give his password to
Mr Parsons (the fifth respondent,
a SAP solution specialist in Collaborit’s employ) so that
Parsons could examine Prometheus’
SAP solution.
[17]
As a result of the above information, Viziya formed the view that by
advertising its scheduling solution and becoming a product
development or vendor enterprise during the contract period,
Collaborit was in breach of the agreement. Once it transpired that
Collaborit was now marketing an EAM BW report pack on its website. Mr
Vujicic, the President and Chief Executive Officer of Viziya,
the
deponent to its founding affidavit, surmised that Collaborit started
such development during the currency of the contract.
[18]
Spurred on by this Viziya brought an urgent ex parte application in
the Gauteng Division of the High Court, Pretoria in which
it sought
an Anton Piller order against Collaborit for the preservation of
evidence and documents relating to breach of contract
and unlawful
competition.
[19]
The allegations made in support of the ex parte order appear from the
founding affidavit of Mr Vujicic. He averred that
whilst the
contract was extant, Collaborit developed and sought to sell a rival
solution to WorkAlign that was based and dependent
on Viziya’s
confidential and proprietary information. He claimed that Collaborit
changed from a consulting and maintenance
support business to a
product developer. It was Viziya’s view that because Collaborit
had been privy to their products and
all matters incidental thereto,
and having changed the nature of their business, Collaborit was
unlawfully using their proprietary
and confidential information. It
considered the conduct of Collaborit be a breach of clause 5 of the
agreement.
[20]
Viziya also averred that at a sales and marketing presentation it
made to Anglo American on 31 March 2016 and 1 April 2016,
an employee
of Collaborit, Mr D Maritz (Maritz), was present. He sat in the
meetings involving a product demonstration as a representative
of
Anglo American. Viziya contended that, while being an adviser on the
acquisition of Viziya’s solution, he was at the same
time
marketing and selling Collaborit’s solutions and that this
amounted to unlawful competition. It was contended that Maritz
was
represented as an employee of Anglo American, when in fact he was
not. According to Viziya Maritz gathered information about
Viziya’s
products and wanted to milk information, knowledge and skills from
Viziya without promoting their products.
[21]
The Anton Piller order directed Collaborit to grant access to the
Deputy Sheriff, two independent attorneys, anyone of the
forensic
specialists employed by PWC, all of whom were named in the order, to
search and seize documents specified in the order,
computer equipment
or any other storage devices. In terms of the order Collaborit could
anticipate the order on 24 hours’
notice and seek its
reconsideration order. On 31 May 2017 the matter came before
Fabricius J for reconsideration. It was postponed
to a later date to
be arranged with the Deputy Judge President of that court. Fabricius
J made an order that no one might access
or examine the imaged
documents. On 12 April 2017 the reconsideration application came
before Van Nieuwenhuizen J, who disposed
of it as described above.
An Anton Piller order
[22]
The requirements for an Anton Piller order were stated by Corbett CJ
in
Shoba
[1]
as
follows:
‘
The
use of Anton Piller orders in our law is now well established. The
requirements that must be satisfied for the granting of such
an order
were summed up by Corbett JA in
Universal
City Studios Inc. v Network Video (Pty) Ltd
,
as follows:
“
In
a case where the applicant can establish prima facie that he has a
cause of action against the respondent which he intends to
pursue,
that the respondent has in his possession specific documents or
things which constitute vital evidence in substantiation
of the
applicant’s cause of action (but in respect of which the
applicant can claim no real or personal right), that there
is a real
and well-founded apprehension that this evidence may be hidden or
destroyed or in some manner spirited away by the time
the case comes
to trial, or at any rate to the stage of discovery, and the applicant
asks the Court to make an order designed to
preserve the evidence in
some way . . . .”
‘
[23]
An Anton Piller order is directed at preserving evidence that would
otherwise be lost or destroyed. It is not a form of early
discovery,
nor is it a mechanism for a plaintiff to ascertain whether it may
have a cause of action.
[2]
The
cause of action must already exist and the preserved evidence must be
identified.
A prima facie case.
[24]
It will be recalled that Viziya's claims against Collaborit were
based on breach of contract and unlawful competition. The
claim in
contract was based on a breach of clause 5 of the agreement concluded
between the parties. The case for Viziya is primarily
based on two
alleged breaches of the agreement between the parties namely, the
development and sales of a solution competitive
to existing products
of Viziya, and the use of confidential and proprietary information.
The cornerstone of Viziya's case was that
because Collaborit had
developed a workplace scheduler and a warranty tracker, it must have
developed them during the contract
period and must have used the
proprietary and confidential information of Viziya.
[25]
The claim based on unlawful competition arose from the allegation
that Mr D Maritz of Collaborit and Mr Van der Walt by Webex,
attended
the demonstration of Viziya’s product to Anglo American on 31
March and 1 April 2016 without disclosing that he
was an employee of
Collaborit.
[26] Before us it was
submitted by Collaborit that it was never the intention of the
parties that it would cease its core business
of development of
products and solutions, because what it was expected to receive in
terms of the agreement was very little by
way of compensation. It
said that it was clearly not intended that it would cease its own
business activities. The argument advanced
was that Collaborit’s
solutions were developed prior to the conclusion of the contract and
independently of Viziya's products
and materially differed in nature
and functionality with the products of Viziya. Denying any
breach of contract on its part,
it relied on the affidavit of
Potgieter when he stated as follows:
’
40.
The First Respondent’s solutions are integrated SAP solutions.
This means that the First Respondent’s products can
effectively
be thought of as forming part of the client’s version of the
SAP program or framework itself. The First Respondent’s
programs access SAP databases to amend, store or display information
internally of the SAP program. It can be described as injecting
computer coding into the clients’ version of the SAP program to
add specific functionality or refine it.
41.
The Applicant’s WorkAlign suite of solutions are entirely “bolt
on” solutions. This means that the solutions
or programs run
completely independent of the SAP program and have to access
information stored in SAP databases through an interface.
An easy way
to explain it is that the bolt on program “talks” to the
SAP program to do tasks (Two separate and distinct
running in
isolation, but able to communicate with each other). The bolt on
solutions do not amend or extend the core code of the
client’s
version of the SAP program but add functionality.’
[27]
Collaborit contended that in terms of the agreement the limitation
pertained to competing directly with Viziya’s bolt-on
solutions. It was submitted that its solutions and products were
developed prior to the conclusion of the agreement. The contention
of
Viziya that Collaborit was bound by the terms of the agreement not to
do any work in competition with Viziya must be analysed
against the
evidence of Collaborit. In view of the fact that the agreement was
limited to a small commission in respect of the
sale of Viziya's
products, it is difficult to comprehend that Collaborit was expected
to cease its business operation in the circumstances.
So, while it
may be so that Collaborit would not have understood the agreement as
precluding it from marketing its WMWB, it is
hotly contested that the
pre-existing WMWB was seriously competitive to Viziya’s
WorkAlign product. There was clear and unchallenged
evidence that its
WMWB solution existed before the relationship with Viziya. It is
certainly improbable that it would have been
willing to abandon this
in favour of a possible modest commission.
[28]
On the other hand, the evidence of Mr Dreyer, although produced at a
late stage of the proceedings, is direct evidence of efforts
to
develop elements of the WMWB solution that overlapped clearly with
the WorkAlign product. Bearing in mind the low hurdle that
has to be
cleared in showing a prima facie case and given the fairly clear
language of clause 5 of the agreement it seems to me
that a prima
facie case has been made that Collaborit breached the provisions of
its contract. Whether that case can be sustained
at trial is a
different matter with which we do not need to concern ourselves.
[29]
Insofar as the case based upon use of Viziya’s confidential
information is concerned it suffers from the deficiency that
Viziya
never identified what was confidential about its WorkAlign solution.
Nor did it identify precisely what confidential information
it
provided to Collaborit.
[3]
The
only document it identified was a sales introduction letter, which
had nothing confidential in it and was in fact sent to clients
from
which Viziya wished to solicit business. There was no evidence of
Collaborit and its employees being given any information
about the
product that could be classified as confidential. It was not
suggested that it had been given any information concerning
the
underlying computer code or anything that would enable it to
manufacture a competing product. Mere knowledge that Viziya had
such
a product – a fact widely advertised on its website – is
not sufficient to make a case of use of confidential
information. On
this aspect of its case Viziya did not make a prima facie case
[30] I now consider Viziya's claim
based on unlawful competition. As I have said this case was founded
on the allegations that Mr
D Maritz (Maritz), an employee of
Collaborit and Van der Walt via Webex, attended the meeting organised
by Anglo American on 31
March and 1 April 2016 without disclosing
that he was an employee of Collaborit. Relying on the notes prepared
by Vujicic it was
submitted on behalf of Viziya that the conduct of
Maritz amounted to unlawful competition in breach of the agreement.
The high
court disagreed with Viziya and held that it was aware that
Maritz attended the sales pitch and that what was given was not
confidential
information about the sales pitch. That finding cannot
be faulted. A reading of Vujicic’s notes does not indicate that
any
confidential information was shared. Mr Jordaan of Viziya was
aware that Mr Maritz was an employee of Collaborit. It is plain that
he was there at the invitation of Anglo American and there was no
objection to his presence. The notes indicate that this was a
presentation to a group of people who asked technical questions about
how Viziya’s product would work in the light of their
own
technical experience. In my view Viziya failed to satisfy the
requirements for an Anton Piller order in respect of this claim.
Specific (and
specified) documents or things constituting vital evidence?
[31]
When the Anton Piller order was executed about 28 storage devices of
Collaborit were copied. They included laptops, phones,
external hard
drives, email accounts, SAP system shared on line storage
environments, copies of all written notes or documents,
even pictures
of white board sketches. Viziya proposed that 149 keywords be used to
comb through this vast trove of information
in order to locate what
might be relevant to its case. The nature of the keywords entailed a
broad and general search.
[4]
Collaborit’s
complaint was that because of its general nature it was highly
possible that information that did not relate
to Viziya's case may be
disclosed. It was submitted that the keyword search constituted a
risk that the confidential proprietary
information belonging to it
might be disclosed because of the broad and general nature thereof.
To demonstrate the risk in the
search engine proposed by Viziya,
Collaborit put up by way of an example its client, Sasol. One of the
keywords was its name and
that would produce multiple systems and
process design documents, which in the ordinary course of business
should not come into
the hands of Viziya.
[32]
The major flaw in Viziya's case was not so much the scope of the
search, which would always need to be comprehensive, but the
failure
in its affidavits to identify or specify which vital information was
in possession of Collaborit that needed to be preserved.
As this
court held in para 30 of
Non-Detonating
Solutions
, a blanket search for
unspecified documents or evidence, which may or may not exist, is not
permitted. Viziya was obliged to identify
the documents it sought to
preserve with the necessary degree of specificity, possibly by
category as occurred in
Non-Detonating
Solutions
. Counsel submitted that
‘things have moved on’ since Corbett JA laid down as a
requirement for an Anton Piller order
that the applicant show a prima
facie case of the existence of specific, or specified, documents or
things that were vital and
required preservation. That is a
proposition that must be firmly dispelled. The law has not changed in
that regard and this is
still a requirement for obtaining an Anton
Piller order. This requirement serves the important purpose of
balancing the rights
of the respective parties and enables the court
to assess whether there is a reasonable likelihood that without an
order they may
be destroyed.
[33]
Because the documents and material being sought were not properly
identified, PWC and the supervising attorney would be allowed
access
to all documents defined in broad categories. The ex parte order in
para 5 and 6 was wide and expansive. It encompassed
more than could
possibly have been required to protect Viziya's interest. It granted
access to Collaborit’s entire business
operation to the
potential detriment of it and its clients. Once one accepts that
there is a prima facie case that Collaborit breached
its obligations
under clause 5 by developing a competing product, it is logical to
infer that there would be evidence of the development
of the
competing product on the computers and other devices of Collaborit
and its employees. But there was no endeavour in the
affidavits to
identify these items or to confine the scope of the application or
the search to that class of documents. Viziya
would presumably know
what technical documents would have been prepared in that process,
especially as it had access to ‘inside’
information from
Mr Dreyer. Yet it did not attempt to identify them or to explain how
the list of key words that were to be used
to search the whole of
Collaborit’s data base would serve to confine the outcome of
the search appropriately.
[34]
Para 5.1.2 of the order provided authority to search for any
documents relating directly or indirectly to Collaborit using
or
deploying any of Viziya’s confidential information as defined
in the sales agreement. Reference to that agreement showed
that it
had a very specific and detailed definition of ‘confidential
information’. First it had to have been disclosed
by Viziya to
Collaborit. Second it had to relate to ‘patents, patent
applications, research, product plans, products, developments,
inventions, processes, designs, drawings, engineering, formulae,
markets, software, computer programs, algorithms, business plans,
Agreements with Third Parties or the services, customers, marketing
or finances’ of Viziya. Third, it had to have been marked
‘confidential’, ‘proprietary’ or in some
other way to indicate its confidential nature, or to have been
identified as confidential within thirty days of disclosure or by its
content or the nature of the circumstances in which it was
disclosed
ought in good faith to have been dealt with as confidential. Viziya
made no attempt to identify the confidential material
it had
furnished to Collaborit during the course of their relationship that
fell within these categories. It did not even say that
any
information of this character had been disclosed to Viziya. That was
the least that could have been expected of it.
[35]
It was rightly contended that the proposed keyword search was
invasive and a trawling expedition through every aspect of
Collaborit’s
business. In simpler terms it was submitted that
because of the general nature of the Anton Piller order, Viziya would
potentially
secure all the information relating to Collaborit’s
business, much of which it could not conceivable be entitled to.
[36]
In my view identification of vital and specific information is
necessary for the preservation of evidence. Its context cannot
be
widened as Viziya wishes to do. Such information must be measured
against what can be obtained through discovery. If a party
can obtain
information on discovery, then it means that a party does not need an
Anton Piller order, unless it shows that what
would be discoverable
would be concealed or destroyed thereby defeating the purpose of
discovery.
[37] The high court erred
in categorising the information sought by Viziya as vital and
specific. Properly understood it seems to
me that the execution of
the order was nothing but a fishing expedition. The net effect of the
order was that PWC and the supervising
attorney would trawl through
all documents of Collaborit by means of keywords, with only a very
general idea of what they were
looking for. It can hardly be denied
that the majority of the keywords were simply generic and not limited
to the business that
Collaborit conducts, but would include any
modern business enterprise. That this was a fishing expedition was
apparent from the
terms of clause 13 of the order, which in material
part read:
‘
The
representatives of the applicant and the applicant’s attorney,
after this Order is executed, are entitled to inspect the
documents
(or copies thereof) obtained in terms of paragraph 5.1 above, and to
inspect the electronic image or printed version
of documents or
material imaged in terms of paragraph 5.2 above,
to
assess whether it indeed provides evidence relevant to the present
application and to further legal proceedings contemplated
by
applicant …
’
(Emphasis added)
It
was unclear whether this is part of a standard order being used in
some courts in applications of this type. It bears some resemblance
to the opening paragraphs of the order in
Non-Detonating
Solutions
, but nothing in that judgment
suggests that this was a disputed issue. It involves a
departure from the basic premise upon
which Anton Piller orders are
granted, namely that they are to preserve evidence, not search for
it. An order in those terms should
not ordinarily form part of an
Anton Piller order and if it is to be sought there must be evidence
justifying its inclusion.
[38]
In this case, the breadth of clause 13 reinforced the point that
Viziya made no attempt to identify the vital documents that
it feared
Collaborit might destroy. I accept that there may be instances where
the applicant identifies a wider category of documents
as vital than
the evidence supports, or seeks an order that is broader than the
evidence would justify, and that in those circumstances
the court may
confine the order to that which is supported by the evidence. But an
applicant cannot, as occurred in this case make
no attempt to
identify the documents that it regards as vital and hope that the
court will come to their aid by fashioning an order
by way of
inference and guesswork.
[39]
Considerations of practicality and convenience could render it
appropriate for a court to order imaging of hard drives and
other
storage facilities and subsequent searching thereof by independent
persons with the use of keywords. But this must be carefully
limited
to discovery and preservation of specific and specified documents and
information or categories thereof that constitutes
vital evidence for
the applicant.
[40]
I agree with Collaborit that in the current matter the keywords were
cast in the broadest terms and were capable of placing
sensitive,
confidential and proprietary material of Collaborit and its clients
into the hands of Viziya. What is telling about
Viziya's case is that
it stated in the founding affidavit that it needed to inspect
Collaborit’s information and documents
in order to obtain
evidence. In its replying affidavit it stated that the purpose of the
application was based on an alleged entitlement
‘to see what
they were doing during this period’. It was not permissible for
Viziya to obtain an Anton Piller order
and seize documents in the
hope that there was something that would incriminate Collaborit.
[41] I conclude that the
Anton Piller order that was sought and initially obtained was not
justified by any evidence of the existence
of specific vital
documents or material. It materially prejudiced Collaborit by
unlawfully exposing its core business and proprietary
information.
Fortunately for Collaborit the order was discharged albeit for
different reasons to which I turn in the next section
of the
judgment. In view of that it is unnecessary to engage in a
painstaking analysis of the order and to compare it with what
was
granted on a far more specific basis in
Non-Detonating Solutions.
A reasonable
apprehension that Collaborit would destroy or hide evidence.
[42]
As stated earlier the high court discharged the Anton Piller order on
the basis that the requisites of the third requirement
were not met.
To fully appreciate the high court’s finding I think it is
appropriate that certain facts be put in their proper
perspective.
[43]
To recap, Viziya and Collaborit concluded an agreement on 26 August
2014. On 18 May 2015 Collaborit sought to terminate the
agreement but
the notice was ineffective. This led to an exchange of correspondence
between the parties. During November 2015 Collaborit
lawfully
terminated the agreement. In response Viziya’s attorneys wrote
a letter to Collaborit on 11 December 2015 alleging
that Collaborit
had breached the agreement and were unlawfully competing with Viziya.
Certain undertakings were sought from Collaborit
inter alia to desist
from any unlawful conduct and retain all its records. Collaborit did
not furnish the undertaking and denied
that it had breached the
agreement. Notwithstanding its suspicions as set out in the
attorney’s letter Viziya did not launch
any application. It was
only after a period of six months that it launched and obtained an ex
parte order on urgent basis.
[44]
Before us, Viziya submitted that it was only after it obtained
information from Collaborit’s former employees, Dreyer
and
Ferndale, that its suspicions were confirmed. In the replying
affidavit Dreyer stated that Collaborit was a consulting firm,
but
had been involved in product development during the currency of the
agreement. Ferndale also confirmed that during the contract
period
Collaborit had embarked on the development of a scheduler in breach
of clause 5 of the agreement. Ferndale further stated
that
Collaborit’s scheduler was now web-based and competitive with
Viziya's WorkAlign Scheduler with the same functionality.
He also
stated that Collaborit adopted Prometheus products and that he was
requested by Mr Potgieter of Collaborit to access Prometheus
software. The sum total of Viziya's submission is that Collaborit and
its officials were untrustworthy and dishonest.
[45]
In my view Viziya failed to show that Collaborit was untrustworthy or
dishonest. That does not follow from the evidence of
Ferndale and
Dreyer,
or the SMS sent
to Dreyer by Potgieter. Properly considered the SMS invited Dreyer to
a meeting with Collaborit (Potgieter) to be
accompanied by his
representative if need be. I fail to see how the SMS can be construed
as intimidatory. In a similar vein the
events surrounding the Anglo
American sales pitch during March and April 2016 cannot give rise to
any reasonable apprehension that
evidence may be destroyed or hidden
by Collaborit. Similarly Ferndale’s allegation also cannot pass
muster. Ferndale did
not explain why he was asked to use his password
to access Prometheus software whilst still in the employ of
Collaborit. It is
clear that the affidavits filed in support of
Viziya's case were replete with speculation and conjecture. The test
of a reasonable
apprehension is an objective one and is based on the
view of a reasonable person when confronted with the facts. Viziya
failed
to set out any factual basis for an objective conclusion to be
reached of the well-founded and reasonable apprehension that evidence
would be concealed.
[46]
In argument counsel had no answer to questions from the bench
regarding why Collaborit would destroy or conceal information,
whilst
continuing to market its rival products. Collaborit never denied that
it had developed a work scheduler and a warranty tracker.
Its
attitude was that it was entitled to do so and it marketed these
products quite openly. In the circumstances it would make
no sense
for Collaborit to destroy its documents relating to the development
and marketing of these products and objectively there
is no reason to
believe that it would do so. The product itself, including its
coding, could be investigated by an expert on Viziya’s
behalf
(if necessary under terms of confidentiality) to determine to what
extent it was copied from Viziya’s product. As
regards
communications with third parties such as Anglo American or Sasol,
being two of the entities mentioned in the key word
search, it is
inconceivable that they would destroy communications with Collaborit
or not produce them under sub-poena
duces
tecum
. So there
would again be no point in Collaborit destroying these documents. It
follows that the finding of the high court cannot
be faulted and that
the Anton Piller order was correctly discharged. The merits of
Viziya’s case are so poor that I agree
with the high court that
this was not a case where leave to appeal should have been granted.
[47]
In short, Viziya’s evidence of dishonesty on Collaborit’s
part was flimsy. Without a substantiated case of significant
dishonesty, there cannot be a reasonable apprehension that a party
will destroy or conceal evidence. In every case it is notionally
possible that a litigant will, when it comes to the time for
discovery, suppress documents which are adverse to its case. This
notional possibility is not enough. An Anton Piller order is highly
invasive and must be restricted to those cases where, inter
alia,
there is a substantial case for believing that the respondent will
not properly honour its discovery duties in due course.
[48]
I therefore make the following order:
1 The respondent’s
application to lead further evidence on appeal is dismissed with
costs.
2 The application for
leave to appeal is dismissed with costs including costs consequent
upon the employment of senior counsel.
________________________
R S Mathopo
Judge
of Appeal
APPEARANCES:
For
appellant:
D Williams SC
Instructed
by:
Hahn &
Hahn Attorneys, Pretoria
Symington
& De Kok, Bloemfontein
For
respondent: E F Dippenaar SC
Instructed
by:
De
Vries Inc, C/o Riaan Bosch Attorneys, Pretoria
Matsepes
Inc, Bloemfontein
[1]
Shoba v Officer Commanding,
Temporary Police Camp, Wagendrift Dam and Another; Maphanga v Officer
Commanding, South African Police
Murder and Robbery Unit,
Pietermaritzburg, and others
1995
(4) SA 1
(A) at 15F-J.
See
also
Non-Detonating
Solutions v Durie
2016 (3) SA 445 (SCA).
[2]
Van Niekerk and another v
Van Niekerk and another
[2007]
ZASCA 116
;
2008 (1) SA 76
(SCA) para 10.
[3]
A matter
dealt with in greater detail in para 34 below.
[4]
By contrast
in
Non-Detonating
Solutions
there
were 41 search terms with a good deal of overlap among them. The
entire exercise was limited to items relating to a self-stemming
cartridge identical or similar to the applicant’s cartridge.