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[2012] ZAKZDHC 94
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Sky's the Limit Investments CC v van der Merwe (533/2012) [2012] ZAKZDHC 94 (6 December 2012)
In
the KwaZulu-Natal High Court, Durban
Republic
of South Africa
Case No : 533/2012
In
the matter between :
Sky’s
the Limit Investments
CC
Applicant
and
Gerrit
van der
Merwe
Respondent
Judgment
Lopes
J.
[1]
The applicant in this matter is a limited liability company which
carries on business
as a property investor. Pursuant to an
agreement which it concluded with Empangeni Cold Storage CC (‘the
corporation’)
it instituted action against the corporation on
the 5
th
August 2009 for arrear rental and damages.
The action was initially defended by the corporation, but at the last
moment it
desisted with its opposition, and the applicant was granted
judgment against the corporation for payment of the sum of R196
962,60
in respect of arrear rental, and damages in the sum of R204
491,52 together with interest on those amounts and costs.
[2]
Pursuant to the judgment which it obtained the applicant caused three
trucks which
it believed belonged to the corporation to be attached.
On the 22
nd
March 2012 the Sheriff of the High Court
issued an interpleader notice informing the applicant that a third
party, Briekdraai Beleggings
(Edms) Bpk which traded as Pongola Cold
Storage, had claimed ownership of the attached trucks. Shortly
thereafter and on
the 29
th
March 2012 the corporation was
placed under voluntary liquidation.
[3]
The applicant avers that the respondent in this application, one
Gerrit van der Merwe,
in his capacity as the managing member of the
corporation, caused or was party to causing, the assets of the
corporation to be
transferred to a third party which in turn
transferred it to Briekdraai Beleggings, in order to frustrate
the claims
of creditors against the corporation. The
applicant was accordingly advised that it should institute action
against the respondent
based on the provisions of s 64 and
s 65
of
the
Close Corporations Act, 1984
. It was also originally
advised to pursue matters in terms of
s 34
of the
Insolvency Act,
1936
, but that avenue of recovery was abandoned by the applicant.
[4]
In order to prosecute its claim against the respondent the applicant
then submitted
to the respondent a request for access to information
in terms of sub-s 53(1) of the Promotion of Access to Information
Act, 2000
(‘the Act’) This was done by way of a
letter addressed to the respondent on the 28
th
March 2012
together with a request contained in Form C of the regulations
promulgated pursuant to the provisions of the Act.
The details
of the information and documents required by the applicant, were
contained in an annexure to Form C.
[5]
The respondents’ attorneys replied to the applicant’s
request for information,
stating that they believed that in the light
of the liquidation of the corporation, the person to whom the request
should have
been addressed was the liquidator, at that stage one Mr J
Z H Müller.
[6]
The applicant’s attorney replied almost immediately demanding
that the respondent
comply with the request, and expressing the view
that the liquidation of the corporation was irrelevant and that the
information
was in the possession of the respondent. When a
third demand was made and not responded to positively the applicant
brought
this application.
[7]
The preamble to the Act recognises that our system of government
before 1994 resulted
in a secret and unresponsive culture in both
public and private bodies which often led to an abuse of power and
human rights violations.
In terms of s 32(1)(b) of the
Constitution provision is made for the horizontal application of the
right of access to information
held by another person, to everyone
when that information is required for the exercise or protection of
any rights. It was
pursuant to that recognition and the
establishment of the right of access that the Act was promulgated.
[8]
In his answering affidavit the respondent raised, inter alia, the
following
:
(a)
the
applicant’s alleged lack of jurisdiction – this was dealt
with in reply and abandoned by Mr
Ryneveld
who appeared for the respondent;
(b)
that
the application was made when there was pending litigation between
the parties. In this regard reference was made to
the
interpleader proceedings.
S 7 of the Act provides :
‘
(1)
This Act does not apply to a record of ... a private
body if –
(a)
that record
is requested for the purpose of criminal or civil proceedings;
(b)
so
requested after the commencement of such criminal or civil
proceedings, as the case may be; and
(c)
the
production of or access to that record for the purpose referred to in
paragraph (a) is provided for in any other law.
(2)
Any record obtained in a manner that contravenes subsection (1) is
not admissible
as evidence in the criminal or civil proceedings
referred to in that subsection unless the exclusion of such record by
the court
in question would, in its opinion, be detrimental to the
interests of justice.’
In my view the section does not
preclude the provision of the record on the basis of the existence of
the interpleader proceedings.
Those proceedings are between
different parties and the respondent was not a party to those
proceedings;
(c)
that the information sought by the applicant was not ‘required’
in order
for it to protect its rights.
[9]
S 50(1) of the Act provides :
‘
A
requestor must be given access to any record of a private body if –
(a)
that
record is required for the exercise or protection of any rights;
(b)
that
person complies with the procedural requirements in this Act relating
to a request for access to that record; and
(c)
access
to that record is not refused in terms of any ground for refusal
contemplated in Chapter 4 of this Part.’
[10]
What has been the subject of considerable judicial discussion and
opinion is the meaning of the
work ‘required’ in ss
50(1)(a)
[11]
This was dealt with in
Unitas
Hospital
v van Wyk and
Another
[2006] ZASCA 34
;
2006 (4) SA 436
(SCA) where the court considered the
meaning of the word ‘required’. In that case the
plaintiff’s husband
had died whilst a patient in the Unitas
Hospital. She sought access to a copy of a report prepared by a
doctor at the hospital
dealing with nursing conditions at the time
her husband was a patient. The court held that in view of the
fact that the plaintiff
did not require the doctor’s report to
formulate her claim for the purposes of instituting action, and that
in the course
of litigation the hospital would be obliged to provide
it in terms of the discovery rules, the real issue in the case was
whether
s 50 of the Act afforded the plaintiff a right to what would
amount to pre-action discovery.
[12]
The court a quo had taken the view that the avoidance of speculative
litigation and the early
determination of the dispute between the
parties would entitle a requestor to information under s 50 of the
Act. This would
be on the basis that such information could
possibly be of assistance in establishing the merits of the case to
be instituted.
The court a quo had held that that should be the
case because those underlying considerations ‘would accord with
the “philosophical
approach to dispute resolution in an open
and democratic society.”’
[13] In
argument, Mr
Omar
for the applicant referred me to the
minority judgment of Cameron JA in
Unitas
as support for the
grant of the order sought. However I am bound by the majority
judgment of Brand JA.
[14]
At page 445, paragraphs 21 - 22 Brand JA referred to the view of the
court a quo and stated :
‘
[21]
I find myself in respectful disagreement with these sentiments. I do
not believe that open and democratic societies would encourage
what
is commonly referred to as 'fishing expeditions', which could well
arise if s 50 is used to facilitate pre-action discovery
as a general
practice. Nor do I believe that such a society would require
a potential defendant, as a general rule,
to disclose his or her
whole case before any action is launched. The deference shown by s 7
to the rules of discovery is, in my
view, not without reason. These
rules have served us well for many years. They have their own
built-in measures of control to promote
fairness and to avoid abuse.
Documents are discoverable only if they are relevant to the
litigation, while relevance
is determined by the issues
on the pleadings. The deference shown to discovery rules is a clear
indication, I think, that the Legislature
had no intention to allow
prospective litigants to avoid these measures of control by
compelling pre-action discovery under s 50
as a matter of course.
[22] I hasten to add that
I am not suggesting that reliance on s 50 is automatically precluded
merely because the information sought
would eventually become
accessible under the rules of discovery, after proceedings have been
launched. What I do say is that pre-action
discovery under s 50 must
remain the exception rather than the rule; that it must be available
only to a requester who has shown
the 'element of need' or
'substantial advantage' of access to the requested information,
referred to in
Clutchco
, at the pre-action stage.’
[15] In
the present matter the plaintiff seeks to recover damages based upon
the provisions of s 64
and
s 65
of the
Close Corporations Act, 1984
.
In my view the founding affidavit of the applicant in this matter
discloses sufficient information for it to have instituted
such an
action without having to obtain the information sought by it in the
notice of request for a record in terms of the Act.
See
: Amler’s
Precedents of Pleadings, 7
th
ed by L T C Harms at pages 92 - 97
[16] Mr
Omar
submitted that the documents vest in the respondent
directly and not in the liquidator. In this regard he refers to
the judgment
of Combrink J in
Schoerie NO v Syfrets Bank Ltd and
others
1997 (1) SA 764
(D&CLD) at page 778 G – I.
Although the provisions of s 361(1) of the Companies Act, 1973 do not
vest the assets
of the corporation in the Master or liquidator, the
assets are deemed to be in the custody and under the control of the
Master
until the appointment of the liquidator. If the
documents vest in the respondent as suggested by Mr
Omar
then
he will be obliged to reveal them in discovery. If the
documents are in the possession of the liquidator they can be
subpoenaed. Either way the applicant is covered by the court
procedures which will apply in the action.
[17] Mr
Omar
also submitted that the provisions of s 5 of the Act are
overriding in that they apply to the exclusion of any provision of
other
legislation that prohibits or restricts disclosure of a record,
or is otherwise materially inconsistent with an object or specific
provision of the Act. The provision of laws relating to
discovery and the serving of a subpoena do not restrict the
disclosure
of a record, but rather facilitate it. In
interpreting the Act in any event, a court is required to look at the
entire Act
and in this regard the provisions of s 7 cannot simply be
ignored.
[18] Mr
Omar
submitted that because the respondent previously deposed
to a discovery affidavit in the interpleader proceedings he had
possession
of the information sought.
[19]
The respondent is one of three members of the corporation. The
fact that documents may
once have been under his custody and control
does not mean that they remain so. In his answering affidavit
he records
that ‘
All
the paperwork generated in the furtherance of the corporation’s
business was kept at its administrative offices in Richards
Bay.
None of those documents are stored or in my possession in Barberton,
or for that matter at White River where by (sic)
administrative
office is located.
’
I
understood the word ‘by’ to be intended to have been
typed as ‘my’.
[20] In
dealing with this denial I am bound by the dicta in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A)
where Corbett JA stated :
‘
It
is correct that, where in proceedings on notice of motion disputes of
facts have arisen on the affidavits, a final order ...
may be granted
if those facts averred in the applicant’s affidavits which have
been admitted by the respondent, together
with the facts alleged by
the respondent, justify such an order.’
[21]
The denial of possession by the respondent is not one which I am
inclined to regard as so far-fetched
or clearly untenable that I
would be justified in rejecting them merely on the papers.
In
these circumstances a final order cannot be granted. In my view
a referral to oral evidence is unlikely to disturb the
probabilities
as they emerge from the papers, and I decline to so refer the matter.
[22] In
the premises the application must fail and I make the following order
:
The application is dismissed with
costs.
Date
of hearing : 21
st
November 2012
Date
of judgment : 6
th
December 2012
For
the Applicant : M Omar of M S Omar & Associates)
For
the Respondent : P van Ryneveld (instructed by du Toit-Smuts Mathews
Phosa c/o Johan Jooste)