About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2016
>>
[2016] ZAGPPHC 1144
|
|
ISP Cash Ekurhuleni (Pty) Ltd v ISP Cash (Pty) Ltd (52620/2015) [2016] ZAGPPHC 1144 (7 December 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
7/12/2016
CASE
NO: 52620/2015
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
ISP
CASH EKURHULENI (PTY) LTD
Applicant
And
ISP
CASH (PTY) LTD
Respondent
JUDGMENT
MAIER-FRAWLEY
AJ
1.
This is an opposed interlocutory application to compel compliance
with a notice delivered in terms of Rule 35(12) of the Uniform
Rules
of Court (the rules). The application, ostensibly one in terms of
Rule 30A of the Uniform Rules of Court, is directed at
compelling the
respondent to produce and make available for inspection, certain
documents that were referred to by the respondent
in its answering
affidavit filed in the main application.
2.
The main application is for a final winding-up order against the
respondent. The main application has progressed to the stage
whereby
the applicant is to file its replying affidavit. Prior to filing its
replying affidavit, the applicant delivered a Rule
35(12) notice,
which the respondent failed to comply with.
3.
In the main application, the applicant relies on a restitutionary
claim for the establishment of a debt owed to it by the respondent.
The respondent's indebtedness is said to have arisen as a result of
the cancellation by the applicant of a licence agreement (''the
agreement") concluded between the parties, either on the basis
of a consensual cancellation during January or February 2015,
alternatively, a unilateral cancellation by the applicant on 18
February 2015 for breach of contract pursuant to a notice of default
having been dispatched to the respondent and the latter's failure to
remedy alleged material breaches, or further alternatively,
a
cancellation by the applicant on 24 June 2015 on account of false
representations made by the respondent both before and during
the
conclusion of the agreement.
4.
The relevant portion of Rule 35(12) reads as follows:
"(12)
Any party to any proceeding may at any time before the hearing
deliver a notice... to any other party in whose...affidavits
reference is made to any document... for inspection and to permit him
to make a copy... thereof. Any party failing to comply with
such
notice shall not, save with leave of the Court, use such document...
in such proceeding provided that any other party may
use such
document... "
5.
In its answering affidavit filed in the present application, the
respondent opposed the relief sought on two grounds, the first
being
that the documents sought were not relevant to the proceedings and
the second being that the documents called for were confidential
by
their very nature and therefore privileged from disclosure.
6.
In its answering affidavit filed in the present application, the
respondent avers that the documents referred to by it in the
main
application contain confidential information pertaining to itself and
third party entities with whom it contracted, which
contracts either
contain express confidentiality or non-disclosure clauses or are
protected by separate non-disclosure agreements.
The respondent
contends that disclosure of such contracts could lead to the
cancellation of those contracts or even expose the
respondent to
damages claims.
7.
Counsel for the respondent did not pursue the respondent's
confidentiality defence in argument, and quite correctly so, as no
case of privilege was made out in the respondent's answering
affidavit.
8.
Documents containing information of a confidential nature are not p
er
se
privileged.
[1]
Confidential information which is not privileged cannot be refused on
grounds of confidentiality.
[2]
The mere agreement between parties that certain communications will
be treated as confidential does not preclude a court from requiring
the disclosure of documentation that is relevant to a matter forming
the subject matter of litigation.
[3]
Furthermore, production of the documents under compulsion of a court
order would not expose the respondent to an unlawful breach
of any
confidentiality agreement.
[4]
9.
As regards the second ground of opposition, the argument proffered
was that winding-up proceedings should not be resorted to
as
a means
of enforcing payment of a debt, the existence of which is
bona
fide
disputed
on reasonable grounds,
as
liquidation
proceedings are not intended
as
a means
of deciding claims which are genuinely and reasonably disputed. This
rule is generally known
as
the
'Badenhorst rule'.
[5]
10.
The respondent's counsel argued that the main application constitutes
an abuse of the process relating to liquidations, in that
it is
directed at establishing (and enforcing) payment of an alleged debt
which is
bona fide
disputed. The alleged misrepresentations,
including the applicant's alleged right to cancel the contract, its
purported cancellation
thereof, the validity of the purported
cancellation and the applicant's right to restitution, are all in
dispute in the main application.
The documents sought to be inspected
are sought with the purpose of attempting to prove the alleged
misrepresentations and consequent
alleged cancellation and thereby to
establish the existence of a debt which is
bona fide
disputed,
as
was argued by counsel for the respondent.
11.
Counsel appearing for the applicant sought to counter the
aforementioned argument on the basis that the Badenhorst rule is not
an inflexible rule,
[6]
as
the Supreme Court of
Appeal has held in
Exploitatjie-En
Belegginsmaatschappij Argonauten 11 BV and Another v Honig
2012
(1) SA 247
(SCA) at paragraph [12], where it was stated that ...
there can be no guarantee that the appellants will fail in the main
application
on that score alone'. He submitted that in the main
application the respondent merely made bald allegations that it
concluded contracts
with various entities, which were lacking in
particularity, such that it impacts adversely on the
bona
fides
of
the raised dispute.
12.
In this regard, the remarks of Heher JA in
Wightman
t/a J W Construction v Headfour (Pty) Ltd and Another
(66/2007)
[2008] ZASCA 6
at paragraph
[13]
are apposite. There is was said that
a 'real, genuine and
bona
fide
dispute
of fact can exist only where the court is satisfied that the party
who purports to raise the dispute has in his affidavit
seriously and
unambiguously addressed the fact said to be disputed. There will of
course be instances where a bare denial meets
the requirement because
there is no other way open to the disputing party and nothing more
can therefore be expected of him. But
even that may not be sufficient
if the fact averred lies purely within the knowledge of the averring
party'. As pointed out in
Gap
Merchant Recycling CC v Goal Reach Trading 55CC
2016
(I) SA 261 (WCC) at paragraph [20], in relation to the respondent's
liability, the question is whether the applicant's claim
is truly
disputed on reasonable and
bona
fide
grounds.
[7]
That will be for the court hearing the main application to determine.
13.
I pause to add that there is merit in the applicant's assertion in
its replying affidavit that 'other than a bald assertion
to this
effect, the respondent has not placed any evidence whatsoever before
this Honourable Court which demonstrates the existence
of the
alleged... agreements. Not only does this cast doubt upon their
existence, but it prevents the respondent from demonstrating
the
extent to which it may be liable or prejudiced, should the documents
be produced... '.
14.
The applicant contends that the documents called for are relevant
because: (i) the misrepresentations consisted of false
representations
made before and during the conclusion of a license
agreement between the parties on 9 October 2014 and related to the
alleged contractual
commitment by the respondent of various service
providers and merchants at that time; (ii) in the answering affidavit
filed in
the main application the respondent alleged that the
representations made were actually true and that various agreements
had been
signed with service providers and merchants in 2013 and 2014
prior to the conclusion of the license agreement with the applicant,
and (iii) whether or not these agreements were in fact concluded may
have the ability to either advance or destroy the case of
either
party, this being the test for relevancy.
15.
Relevance is a matter for the Court to decide, having regard to the
issues between the parties.
[8]
The test for relevancy is whether the documents contain information
which
may
- not
which
must
-
either directly or indirectly enable the party requiring the document
either to advance his own case or to damage the case of
his
adversary.
[9]
16.
Having regard to the issues in dispute in the main application and on
the strength of the quoted authorities, I am persuaded
that the
documents referred to by the respondent and which the applicant seeks
to have produced for inspection under Rule 35(12)
are indeed relevant
to the issues at hand. They reflect factually on whether or not the
representations made by the respondent
are true or false, this not
only being an issue that will impact on whether or not the dispute
raised by the respondent in the
main application is
bona
fide
and
reasonable,
[10]
but also
because the documents contain information which may advance the
applicant's case or damage the respondent's case.
17.
During oral argument presented to court, counsel for the respondent
sought to advance a further ground of opposition to the
relief sought
in the present application, namely, that the present application is
an ordinary application to compel and not an
application in terms of
Rule 30(A) of the rules of court in that it does not contain a
reference to Rule 30(A) in the heading of
the application. Further,
the applicant failed to comply with the requirements of Rule 30(A) in
that the respondent was not afforded
a period often days - but only
five days -within which to comply with the applicant's Rule 35(12)
notice.
[11]
This ground was
not addressed in counsel's written heads of argument or in the
respondent's answering affidavit.
18.
Rule 30(A) reads as follows:
"(1)
Where a party fails to comply with these rules or with a request made
or notice given pursuant thereto, any other party
may notify the
defaulting party that he or she intends, after the lapse of 10 days,
to apply for an order that such rule, notice
or request be complied
with or that the claim or defence be struck out.
(2)
Failing compliance within 10 days, application may on notice be made
to the court and the court may make such order thereon
as to it seems
meet."
19.
The argument that the heading of the application does not refer to
Rule 30(A) and that the application is not one in terms of
that rule,
lacks merit. I can do no better than to refer to what was stated in
Centre
for Child Law v The Governing Body of Ho
ë
rskool
Fochville
(156/2015)
[2015] ZASCA 155
(8 October 2015) at paragraph 17, namely, ' ... the
real complaint in this case is that however the application was
presented,
the learned judge in the court
a
quo
failed
to appreciate that he was, in truth, considering an application in
terms of rule 30A'.
20
In order to determine the nature of the application, the principle
that has been applied by courts for time immemorial is that
substance
rather than form has to be considered to ascertain the true nature of
a transaction.
[12]
21.
Rule 30(A) requires 10 days' notice within which to comply with a
notice given in terms of the rules before the launch of an
application to court. In the present matter, the respondent was
effectively given 12 days in which to comply with the applicant's
Rule 35(12) notice before the application was launched. I am
satisfied that there has been substantial compliance with the
requirements
of Rule 30(A).
[13]
22.
I therefore conclude that the documents called for in the applicant's
Rule 35(12) notice are subject to disclosure.
23.
The general rule is that costs follow the result. I see no reason to
depart therefrom.
24.
The following order is made:
24.1.
The respondent is ordered to make the documents listed in the
applicant's Rule 35(12) notice dated
5
October 2015 available
for inspection and to permit the applicant to make copies thereof
within ten days of the date of this order.
24.2
In the event of the respondent's failure to comply with paragraph l
of this Order, the applicant is given leave to apply on
notice, on
the same papers, supplemented if necessary, for a striking out of the
respondent's opposition in the main application
and for the grant of
a liquidation order.
24.3
The respondent is ordered to pay the costs of the application.
_______________________________
A.MAIER-FRAWLEY
ACTING
JUDGE OF THE WGH COURT
Date
of hearing: 29 November 2016
Date
of judgment: 7 December 2016
Judgment
delivered: 7 December 2016
Counsel
for the applicant: Adv
FP Strydom (082 446
3081)
Attorneys
for applicant: Mills
&
Groenewald (016 423 1946)
c/o
Serfontein, Viljoen & Swart (012 362 2556)
Counsel
for the respondent: Adv.
Z. Schoeman
Attorneys
for first respondent: Otto Krause
Inc. (011 675 2881)
c/o
Bares Basson Inc Attorneys Ref: A. Volschenk/NK/MAT
[1]
See Erasmus: Superior Court Practice at D1-460 fit 7.
[2]
Centre
for Child Law v The Governing Body of Ho
ër
skool
Fochville
(156/2015)
[2015] ZASCA 155
(8 October 2015) at 570B-571E
[3]
See
Independent Newspapers (Pty) Ltd v Minister of Intelligence
Services
:
in Re
Masetlha v President of the Republic of South Africa andAnother2008
(5) SA 31 (CC) at
paragraph 25, where the following is stated: - 'Ordinarily courts
would look favourably on claim of a litigant
to gain access to
documents or other information reasonably required to assert or
protect a threatened right or to advance a
cause of action. This is
so because courts take seriously the valid interests of a litigant
to be placed in a position to present
its case fully during the
course, of litigation. Whilst weighing meticulously where the
interests of justice lie, courts strive
to afford a party a
reasonable opportunity to achieve its purpose in advancing its case.
After all, an adequate opportunity to
prepare and present ones case
is a time-honoured part of a litigating party's right to a fair
trial.'
[4]
Support for this contention can be found in paragraph 43 of
Competition
Commission of South Africa v Arcerlormittal South Africa Ltd and
Others
(680/12)
[2013] ZASCA 84
(31 May 2013).
[5]
As propounded in
Badenhorst
v Northern Construction Enterprises (Pty) Ltd
1956
(2) SA 346
(T) at 347H- 348C.
[6]
The Badenhorst rule was not applied
in
Kalil v Decotex
1988
(I) SA 943 (A) at 980H-l.
[7]
Wightman's case supra offers an informative approach in determining
the resolution of disputes.
[8]
See Erasmus: Superior Court Practice at D1-460 and authorities cited
in fn 6.
[9]
See
Rellams
(Pty) Ltd v James Brown & Hamer Ltd
1983
(I) SA SS6 (N) at S63H-S64B.
[10]
This
being an issue which the court hearing the main application will
ultimately have to decide.
[11]
Notice was given in an email addressed by the applicant's attorneys
to the respondent's attorneys on 28 October 2015 that 'if
we do not
receive a reply within 5 days from date hereof, we are proceeding
with an application to compel'.
[12]
See for example
Roshcon
(Pty) Ltd v Anchor Auto Body Builders CC & others
[2014] ZASCA 40
;
2014
(4) SA 319
(SCA) para 23 and
Four
Arrows Investments 68 v Abigail Construction
(20470/2014)
[2015] ZASCA 121
para 8.
[13]
See:
Arendsnes
Sweefepoor CC v Dalia Marcelle Botha
(471/12)
[2013] ZASCA 86
(31 May 2013) para 14 and authorities there cited.