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[2024] ZAFSHC 196
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Jonker v Land and Agricultural Development Bank of South Africa (2683/2020) [2024] ZAFSHC 196 (19 June 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable: NO
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
Case
no:
2683/2020
In
the matter between:
LOUIS
JONKER
Applicant
And
THE
LAND
AND
AGRICULTURAL
DEVELOPMENT
Respondent
BANK
OF SOUTH AFRICA
AND
Case
no:
2686/2020
In
the matter between:
LOUIS
JONKER N.O.
1
st
Applicant
JOHANNA
JACOBA JONKER N.O.
2
nd
Applicant
ANNETTE
LIEBENBERG N.O.
3
rd
Applicant
And
THE
LAND AND AGRICULTURAL DEVELOPMENT
Respondent
BANK
OF SOUTH AFRICA
CORAM:
JP DAFFUE J
HEARD
ON:
23 MAY 2024
DELIVERED
ON:
19 JUNE 2024
This
judgment was handed down electronically by circulation to the
parties' legal representatives by email and release to SAFLII.
The
date and time for hand-down is deemed to be 16h30 on 19 June 2024.
Introduction
[1]
The Land and
Agricultural Development Bank of South Africa (the Landbank)
instituted three claims against Mr Louis Jonker under
case number
2683/2020. Claim one is for payment
in
the amount of
R 13 480 486.33 together with interest, claim two for payment in the
amount of R 4 708 710.41 plus interest and claim
three, being an
alternative to claim one, for the amount of R 8 517 431.29 plus
interest. Costs of suit on an attorney and client
scale are sought as
well.
[2]
The Landbank
also instituted action under case number 2868/2020 against the
trustees of the Louis Jonker Familie Trust, they being
Louis Jonker,
Johanna Jacoba Jonker and Annette Liebenberg, for payment of exactly
the same amounts as claimed from Mr Jonker in
case number 2683/2020
under claims one and two. In this instance an order is also sought to
declare two farms in the Senekal district
specially executable. The
pleadings in both actions have been closed nearly four years ago.
[3]
The defendants
in both actions filed two interlocutory applications in which the
same relief, based
on rule 35(3),
is claimed
.
The parties
are in agreement
that insofar
as the
applications are mirror images of each other, the outcome should be
the same in both instances and that one judgment should
be delivered.
[4]
In
both instances, a so-called written recordal, annexed as annexure POC
4 to each particulars
of
claim,
is
relied
upon
by the Landbank.
This
recordal
will be dealt with in more detail when I evaluate the parties'
submissions hereunder. The difference between the two actions
is the
Landbank's reliance on a covering mortgage bond, annexed as annexure
POC 6 to the particulars of claim in case number 2686/2020
and the
request
to
declare the immovable properties specially executable
.
The
mortgage bond was duly endorsed by the registrar of deeds, indicating
that all rights, title and interest in the mortgage bond
was ceded by
Unigro Financial Services (Pty) Ltd (Unigro) as mortgagee to the
Landbank.
[1]
The
relief claimed
[5]
As
mentioned, the
same orders are sought in both applications, to wit:
'1.
An order
compelling
the respondent
to comply with the rule
35(3)
notice and
make available the additional documents,
as requested
by the first and, second
applicants
in their Rule
35(3) Notice,
which
was served on the respondents'
attorney on
19
October
2023,
within
10 days after the granting of this order or to state under oath
within ten days that such documents are not in its possession,
in which event
the respondent shall state the whereabouts of the documents requested
if known to the respondent.
2.
That the
respondent be directed to pay the costs of this application on an
attorney and
client
scale.'
[6]
Both
applications are opposed by the Landbank.
Adv FG Janse
van Rensburg appeared before me for the applicants and Adv S
Tsangarakis for the Landbank. In order to prevent confusion,
I shall
herein later refer to the plaintiff in the main actions and the
respondent in the applications as the Landbank and to the
other
parties as the applicants.
Relevant
factual background
[7]
The Landbank
instituted both actions on 23 July 2020. Pleas were filed on 17
September 2020. The replications were filed on 10 November
2020.
Therefore, the pleadings in both actions have become closed nearly
four years ago.
[8]
The Landbank
filed
its
discovery
affidavits in both matters in March 2021, more than three years ago.
It discovered a total of 153 documents. The following
documents were
inter alia
discovered
in each of the two discovery affidavits:
a.
Sale Agreement
between Landbank, Gro Capital Financial Services and Afgri Operations
dated 21 October 2011;
b.
Service Level
Agreement between Landbank
,
Gro Capital
Financial Services and Afgri Operations dated 17 November 2011;
c.
Sale of
Business Agreement entered
into
between Gro
Capital Financial Services and Unigro Financial Services dated 27
September 2012;
d.
Cession and
Delegation Agreement between Landbank
,
Gro Capital
Financial Services
,
Afgri
Operations and Unigro Financial Services dated 27 September 2012
.
These four
documents are the very same documents referred to in the recordal
attached as annexure POC 4 to both particulars of claim.
[9]
On 19 October
2023 the applicants
served
notices
.
in
terms of rule 35(3) on the Landbank in terms whereof they required
discovery and the making available of a multitude of documents
.
I quote the
first two paragraphs of the one notice (the other reading essentially
the same)
:
'TAKE
NOTE
that
the 1
st
2
nd
and
3
rd
defendants
believe that there are, in addition to documents discovered by the
plaintiff, the below-mentioned documents in possession
of the
plaintiff, which are relevant to the matter.
The
defendants
require
the
plaintiff
to
discover
these
documents
and
make
them
available
to
the
defendants within 10 days of
receipt of this notice.'
[10]
No
response
was
received
from
the
Landbank
whereupon
the
applicants'
attorney served a letter dated 28 February 2024 on the Landbank's
attorneys,
[2]
requesting
compliance with the notice and the furnishing of copies of the
documents so requested within three days. Again, there
was no
response.
[11]
Two
identical
applications
were
issued
on
20
March
2024
and
set
down
for hearing in
the unopposed motion court of 4 April 2024. On that day the
applications were postponed as a result of belated notices
of
intention to oppose filed on 2 April 2024. This was after the close
of the motion court roll. The applications were postponed
by
agreement to the opposed roll of 23 May 2024. Answering
and replying
affidavits were filed in both applications.
The
procedure adopted by the applicants
[12]
The
applicants' reliance on rule 35(3) must be considered in accordance
with rules 35(6) and (7), read with Form 13 of the Uniform
Rules of
Court. Therefore, it is apposite to quote these three sub-rules:
'(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 such party
to
make the same available for inspection in accordance with subrule
(6).
or to
state on oath within 10 days that such documents or tape recordings
are not in such party's possession, in which event the
party making
the disclosure shall state their whereabouts,
if known.
(6)
Any party may at any time by notice in accordance
with Form 13
of the First Schedule require any party
who
has made discovery
to
make available for inspection any documents or tape recordings
disclosed
in
terms
of
subrules
(2)
and
(3
)
.
….
A
party's
failure to
produce any such document or tape
recording
for inspection
shall
preclude such party from using it at the trial,
save where the court on good cause shown allows otherwise.
(7)
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
c
ompliance
with this rule
and,
failing such compliance, may dismiss the claim or strike out the
defence.
(my
emphasis)
[13]
Form 13 is the
notice to produce referred to in rule 35(6). The party to whom the
notice is addressed is
required to
produce the documents
referred to in
that party's affidavit for inspection within five days. Clearly, the
emphasis is on making available for inspection
those documents
discovered under oath in terms of rule 35(2) or 35(3) and not on
documents that the one party believes are in possession
of the
opposing party.
Evaluation
of the parties' submissions and the authorities relied on
[14]
It
is trite that discovery ranks with cross-examination as one of the
two mightiest engines for the exposure of the truth ever to
have been
devised.
This
is apparent from the judgment in
MV
URGUP.
[3]
[15]
In
ST
v
CT
[4]
the
Supreme
Court
of
Appeal
pointed
out
that
discovery
is
not
dictated by a litigant's view of what is relevant, but it is a matter
for the court to consider with reference to the pleadings,
and not
extraneously therefrom. A discovery affidavit is taken to be
prima
facie
conclusive.
[16]
The
requirement of relevance has been dealt with in several judgments
.
It
is not necessary for the party relying on rule 35(3) to prove that
the additional documents are relevant
,
but
only that these may be relevant to any matter in dispute. The
documents required by an applicant to be discovered and/or produced
may, as authority has it, lead to a so-called
'train
of
enquiry' in order to establish the truth.
[5]
[17]
The court
should
apply
logic and common
sense
pertaining
to
an applicant's requests and it is not necessary to rely on certainty.
It must be emphasised that an applicant shall not be allowed
to
proceed on a fishing expedition, although care should be taken not to
place undue or unnecessary limitation on a party's right
to a fair
trial.
[18]
In
the
same
vein,
a
court
should
also
consider
whether
an
applicant
is attempting
to make use of ulterior means to prove their case or disprove the
other parties' version. It is the court's duty to
prevent abuse of
process.
[19]
Rule 35(3) is
clear.
Any
party who believes that there are additional documents in the
possession
of
the other party thereto
which may be
relevant to any matter in question may give notice to the latter
requiring them to make the same available for inspection
in
accordance with rule 35(6), read with Form 13. The entitlement to
inspection does not arise, unless the other party has discovered
the
documents under oath.
[20]
In my view the
correct approach in a similar factual matrix is the following. If
further discovery
is not made as
requested,
the
applicant must
apply
in accordance
with rule 35(7) for an order to compel further discovery within a
certain period, usually 10 days, failing such compliance,
the court
may dismiss the claim or strike out the defence depending on whether
the plaintiff or defendant is in default.
[21]
Mr Van
Rensburg on behalf of the applicants conceded during oral argument
that the rule 35(3) notices issued herein are incorrectly
worded and
not in accordance with the rule. The same applies to the orders
sought. However, he submitted that the rule 35(3) notices
required an
answer under oath to which the Landbank failed to respond. He also
submitted that in the event of a dismissal of the
applications, the
applicants should not be penalised with costs. Instead of filing
affidavits in response to the rule 35(3) notices,
the Landbank did
not respond thereto and also not to the letters of demand which
followed these notices. Instead, it not only decided
to oppose the
applications on the merits, but eventually provided answers under
oath which should have been provided in response
to the rule 35(3)
notices.
[22]
Mr
Janse van Rensburg submitted that the present matters are on all
fours with the facts in
Trakman
N.
O
and
Others v The Master of High Court of South Africa, Johannesburg and
Others (Trakman)
[6]
.
In
Trakman
the
Master of the High Court accepted the validity of the Landbank's
claim filed against a company in liquidation. The joint liquidators
of the insolvent company sought a review of the Master's decision in
accordance with
s
151
of the
Insolvency Act 24 of 1936
.
[7]
Dippenaar J, who delivered the judgment on review, set aside the
Master's decision and expunged the Landbank's claim. In that case
the
Landbank relied
inter
alia
on
a sale agreement between it and GroCap as well as a cession of book
debts. The sale agreement did not form part of the claim
documents
lodged with the Master. As in this case, the Landbank also relied on
a document styled
'recordal',
but
the sale agreement was omitted on the basis that it contained
confidential information that the bank did not want to disclose
to
third parties. The court
inter
alia
held
as follows
[8]
:
'
...
For reasons
already
provided,
the mere
ipse
dixit
of
Land Bank and Grocap is insufficient to establish Land Bank's locus
standi as creditor or the sale of the Trademar debt to Land
Bank. A
proper consideration of all the underpinning agreements is required
to clarify what the agreements achieved, rather
than simply
accepting
what the
parties
thought
they
achieved.
The
provision
of the sale
agreement is also insufficient to reach this conclusion, absent
consideration of the "storage media", which
evidences
whether the
Trademar
debt
is
an
"A
sale
book debt"
in
terms
of
the
sale
agreement.' The
court
finally
concluded that
the
Landbank did
not
provide all
documents
necessary to substantiate its claim.
[23]
The Landbank
unsuccessfully applied for leave to appeal whereupon it applied to
the Supreme Court of Appeal for leave to appeal
which application was
also dismissed. Thereafter it applied in terms of
s 17(2)(f)
of the
Superior Courts Act 10 of 2013
for special leave to the President of
the Supreme Court of Appeal who held that there were no exceptional
circumstances warranting
a reconsideration or variation of the
decision
.
Consequently,
leave to
appeal was refused.
[24]
Mr Janse van
Rensburg submitted that this court does not have any discretion, but
to follow the
Trakman
judgment.
I do not agree. The
Trakman
judgment
is totally distinguishable from the facts
in
casu.
I am
not adjudicating the Landbank's claims in order to decide whether
judgment should be granted or not. That will be the prerogative
of
the trial court
.
Although the
Landbank only relied on a recordal which is annexed as POC 4 to the
particulars of claim, the first four documents
of the discovery
affidavit referred to above are the precise documents that the
Landbank will rely upon at the trials as is apparent
from the
recordal.
[25]
If
the applicants believed that the particulars of claim did not comply
with the provisions of
rule 18
insofar as the written contracts were
not attached thereto, they could and should have brought an
application in terms of
rule 30
which they failed to do.
[9]
Obviously,
insofar
as
it might have been their case that the Landbank
failed
to disclose causes of action, they should have excepted in terms of
rule 23
which they also failed to do.
[26]
Mr
Tsangarakis
on
behalf
of
the
Landbank
referred
me
to
an
unreported
judgment by Reinders J in
The
Land and Agricultural Development Bank of South Africa v Casparus
Johannes Rynhardus Cilliers.
[10]
In
that case the Landbank successfully applied for an order perfecting
it notarial bonds. The Landbank also relied on a recordal
similar to
the one
in
casu.
The
respondent's submission that the Landbank did not have
locus
standi
to
enforce the notarial bonds was dismissed. Although I agree with the
learned judge's approach, it is not necessary for adjudication
of
this application to say much more.
[27]
Unlike
as
indicated
in
Trakman,
this
application
does
not
concern
so-called
'storage
media' or
spreadsheets. If such documents appear to be important and/or
relevant at the trials in order for Landbank to prove its
claims, and
these have not been discovered, the Landbank shall be precluded from
using these documents, unless the court on good
cause allows
otherwise. Failure to prove relevant documents may lead to the
dismissal of its claims
.
These
considerations are totally irrelevant for purposes of adjudicating
the present applications
.
The validity
of the sale and service level agreements and/or
the
cession
agreements is not a bone of contention in these applications. It will
eventually be the task of the trial court to make
a finding in this
regard.
[28]
Mr Tsangarakis
submitted that the applicants' applications as presented to the court
are fatally flawed insofar as the Landbank
is compelled
in
terms thereof
to make available additional documents. He submitted that the
plaintiff is not afforded an opportunity to refuse to
make further
discovery of the documents sought on any of the grounds which are
available to it in law. It is debatable whether
the applications are
fatally flawed. In any event, the Landbank could have proceeded in
terms of
rule 30
relating to irregular proceedings which it failed to
do.
[29]
A party is not entitled, generally speaking to go behind the other
party's discovery affidavit. The same
applies
in
casu.
I
do not intend to deal with each and every
document
and/or
documents
required
in
paragraphs
1
-
6
of
the
rule
35(3)
notice.
I am satisfied that the applicants embarked upon a fishing
expedition, but in any event, the Landbank has fully and
comprehensively
and to my satisfaction dealt with all six paragraphs
in its answering affidavits.
[11]
In
conclusion, I am satisfied that the applicants' applications should
be dismissed.
Costs
[30]
I accept that
the applicants'
rule 35(3)
notices are not worded correctly and must
be regarded as irregular. Consequently, the relief sought in the
applications are not
in line with the relief afforded in
rule 35(7).
However, insofar as the adjudication of costs is concerned, I
consider the following in exercising my discretion:
a.
the Landbank's
attorneys bluntly ignored the
rule 35(3)
notices as well as the
letters of demand: they could and/or should have pointed out
non-compliance with the rules of court and/or
embarked upon
rule 30
procedure which they did not do;
b.
instead of
merely responding to the
rule 35(3)
notice in
-
answering
the present applications, the Landbank vehemently opposed the
applications on the merits, but deemed it necessary to eventually
respond to the
rule 35(3)
notices;
c.
Mr Janse van
Rensburg submitted that if the Landbank had not elected to present a
full blown opposition on the merits, the applications
might not have
been dealt with on an opposed basis, causing unnecessary extra costs,
or put otherwise, if the Landbank's response
now presented to the
court was filed in response to the
rule 35(3)
notices, the
applications would not have been issued;
d.
Mr Janse van
Rensburg's submissions were duly considered, but I cannot agree
therewith, bearing in mind the applicants' stance in
the replying
affidavits as well as the submissions made in his heads of argument
and during oral argument. There can be no doubt
that the applicants
would insist on the same relief, even if the Landbank responded
earlier.
[31]
In my view it would be fair to the parties to split the costs. I
shall accept that the Landbank's failure
to respond should be held
against it. Mr Tsangarakis submitted, in an alternative argument that
the applicants should at best for
them, only be entitled to the costs
of the application until receipt of the answering affidavits on 23
April 2024. This would obviously
include the costs incurred on 4
April 2024 that stood over for later adjudication.
Instead
of accepting
the response
and/or
enrolling
the matter for
argument on costs only, it
proceeded with the filing of replying affidavits in an attempt to
justify their entitlement on the merits.
Therefore, so he argued, the
costs incurred after receipt of the answering affidavit and
consideration thereof shall be for the
account of the applicants. I
agree with Mr Tsangarakis'
alternative
submissions.
[32]
Mr Tsangarakis asked for costs on an attorney and client scale. I am
not prepared to grant such costs as the Landbank
is entitled to costs
on the usual scale, to wit party and party costs only.
Order
[33]
Consequently, the
following orders are issued:
In
application 2683/2020:
1.
The
application is dismissed.
2.
The Land and
Agricultural Development
Bank of South
Africa, the respondent in this application, shall pay the applicant's
costs until 23
April 2024, to wit the date on which the answering affidavit was
served.
3.
The applicant
shall pay the respondent's
costs
in
opposing the
application, such costs to be calculated from 24 April 2024 onwards,
including the costs of counsel on scale B of
rule 69
, read with
rule
67A.
In
application 2686/2020:
1.
The
application is dismissed.
2.
The Land and
Agricultural Development Bank of South Africa, the respondent in this
application,
shall pay the
applicants' costs until 23 April 2024, to wit the date on which the
answering affidavit was served.
3.
The applicants
shall pay the respondent's
costs in
opposing the application, such costs to be calculated from 24 April
2024 onwards, counsel on scale B of
rule 69
, read with
rule 67A.
JP
DAFFUE J
On
behalf of the Applicants in both applications:
Adv
FG Janse van Rensburg
Instructed
by:
Hendre
Conradie Inc
BLOEMFONTEIN
On
behalf of the Respondent in both applications:
Adv
S Tsangarakis
Instructed
by:
EG
Cooper Majiedt Inc
BLOEMFONTEIN
[1]
See
page
85
of
the r
eco
rd
in
case
number
2686/2020:
the endorsement
with
reference
number
BC8398/2014
dated 21 August 2014.
[2]
Annexure
EG
2
to
the
founding
affidavits.
[3]
MV
URGUP
Owners of
the
MV
URGUP
v
Western
Bulk
Carriers
(Australia) (Pty) Ltd & others
1999
(3)
SA
500
(CPD)
at
513H.
[4]
2018
(5)
SA
479
(SCA)
para
19.
[5]
Rellams
(Pty)
Ltd
v James Brown
&
Hamer
Ltd
1983
(1)
SA
556
(N) at
564A.
[6]
(2020/12432)
[2021] ZAGPJHC
168
(21
May
2021).
[7]
The
section
must
be
read
withs 399 of
the
Companies
Act
61
of
1973
and
item
9 of schedule
5
of
the
Companies Act
71
of
2008
.
[8]
Ibid
para
43.
[9]
See
rule
18(12).
[10]
4201/2019
(delivered on
19
December
2019).
[11]
Answering
Affidavit
paras
49
-
54.