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[2016] ZALAC 104
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Mogwele Waste (Pty) Ltd v Brynard (CA15/2015) [2016] ZALAC 104; (2016) 37 ILJ 2051 (LAC) (20 April 2016)
IN THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN
Reportable
Case no: CA15/2015
In the matter between:
MOGWELE WASTE (PTY) LTD
Appellant
and
GERHARD MATTHYS BRYNARD
Respondent
Heard: 23 February 2016
Delivered: 20 April 2016
Summary:
Employee causing a
subpoena
for the production of documents – Labour Court dismissing
employer’s application to set aside
subpoena
.
Although raised at the appeal stage, employer contending that
employer ought to have used the discovery procedure of rule 6(9)
of
the Labour Court Rules. Court holding that the objective of rule 6(9)
is to enable a litigant to discover documentation in the
possession
or under the control of the other party to the proceedings, whereas a
subpoena
in terms of rule 32 is to obtain documentary evidence in possession
of non-parties. Court finding that the failure of the employee
to
bring an application under rule 6(9)(b) to compel discovery and the
issuing of a
subpoena
against the employer is an abuse of process. Labour Court’s
judgment set aside and
subpoena
set aside.
Coram: Waglay JP, Tlaletsi DJP
et
Murphy AJA
JUDGMENT
MURPHY AJA
[1]
The appellant appeals against the judgment
of the Labour Court (Steenkamp J) declining to set aside a
subpoena
duces tecum
which the respondent caused
to be issued on 23 April 2015 in anticipation of a trial that was set
down to commence at a future date.
[2]
In terms of the
subpoena
,
the respondent required the appellant to produce all its annual
financial statements as well as management statements for the
financial years 2010, 2011, 2012, 2013 and 2014 (“the financial
documents”). The
subpoena
is vague in its formulation. It calls upon Mr. Kishor Chita, a
director of the appellant and states that the appellant is required
to bring the identified documents to court. It gives no details of
the time and location of the proceedings in question and
prima
facie
does not conform to Form 3 as
required by rule 32 of the Labour Court Rules.
[3]
The appellant contends that the Labour
Court erred because it ought to have set aside the
subpoena
on four grounds: (1) the respondent
should have made use of the provisions of rule 6(9) of the Labour
Court Rules dealing with the
discovery of documents by parties to
proceedings (as opposed to issuing a
subpoena
);
(2) the
subpoena
is
too general and wide in its nature and effect; (3) the information
contained in the financial documents under the
subpoena
is either irrelevant to the issues to
be determined or confidential and consequently serves no legitimate
purpose and could potentially
cause prejudice to the appellant in the
event of the confidential information falling into the hands of a
competitor; and consequently
(4) the
subpoena
constitutes an abuse of process.
[4]
The appellant manufactures corrugated
cartons in the Western Cape. It is one of the companies in the Golden
Era Group of companies
with its head office based in Johannesburg.
The respondent was employed by the appellant as the financial manager
of its operations
in Atlantis, Western Cape. He was responsible for
the financial affairs of the appellant, compiling financial
information and reporting
to head office on the financial position of
the company. The appellant terminated the respondent’s
employment on 18 March
2014. The respondent initially alleged that
the appellant terminated his employment due to operational
requirements. It has subsequently
become common cause that the
respondent’s employment was not terminated for reasons relating
to the appellant’s operational
requirement grounds. The
appellant contends that it terminated the respondent’s
employment because it lost confidence in
the respondent and could no
longer trust him due to various incidents involving alleged financial
irregularities that occurred
over a number of years.
[5]
The appellant has also instituted four
counterclaims against the respondent alleging negligence and
mismanagement on the part of
the respondent in relation to i)
stock-takes resulting in the appellant having to write off or dump
stock to the value of some
R3 million; ii) failure to control pallets
sent to clients resulting in their not being returned and a
consequential loss of R802 230.00;
iii) mismanagement of the
leave of the appellant’s employees resulting in a loss of some
R85 080.00; and iv) negligent
payment for repairs to forklifts
whilst under warranty in terms of service and maintenance contracts
to the value of some R350 000.00.
The respondent denies that he
was negligent as alleged or that he is responsible for any of the
alleged losses suffered by the
appellant.
[6]
The parties attended a pre-trial conference
in July 2014 and signed a pre-trial minute in November 2014. During
December 2014, they
were notified that the trial had been set down
for 9 February 2015. On 16 January 2015, the respondent’s
attorney addressed
a letter to the appellant’s attorney
requesting confirmation that certain witnesses would be available
failing which a
subpoena
would be issued. It also requested the appellant to make available
the signed financial statements for the years 2010-2013 and
the
monthly management reports in respect of 2011-2014. The respondent
contends that these documents are relevant principally to
the issues
arising under the counterclaim. The letter noted that should the
documents not be made available the respondent would
issue a
subpoena
to obtain them at the trial.
[7]
During January 2015, the parties engaged in
correspondence regarding the postponement of the trial, logistics and
the provision
of documents. On 9 February 2015, the Labour Court
postponed the trial
sine die
by agreement between the parties. It also made an order that “further
documents requested by the parties will be exchanged
and delivered by
no later than Monday 20 April 2015.” On 10 April 2015, the
respondent’s attorneys sent a reminder
requesting that the
documents be delivered by the date in the court order. The
appellant’s attorneys replied on 15 April
2015 advising that
the appellant was of the view that its financial statements and
monthly management reports were confidential
and would not take the
matter further. The appellant’s attorneys stated:
‘
Our
client is of the view that its financial statements and monthly
management accounts is (sic) of a confidential nature and will
in any
event not take this matter any further (unless if (sic) your client
can convince us otherwise).’
Instead
of replying to this letter and accepting the invitation to motivate
why he believed the documents were not confidential
and relevant, or
seeking to compel discovery under rule 6(9) of the Labour Court Rules
(which is set out below), the respondent
elected to use rule 32 and
on 23 April 2015 caused a
subpoena
duces tecum
to be
issued against the appellant, despite it being a party to the
litigation. He did so with full knowledge of the fact that
the
appellant regarded the financial documents as confidential and
irrelevant to the issues to be determined between the parties
and
accordingly had refused to discover the documents. The
subpoena
was issued five weeks prior to the date on which the matter was set
down for trial on 1 June 2015. The limited time left before
the trial
was due to commence may have prompted the respondent to issue a
subpoena
in respect of the financial documents because an
opposed interlocutory application regarding the discovery of the
financial documents
would most likely have delayed the trial.
[8]
On 20 April 2015, the appellant delivered a
600 page bundle of documents to the respondent’s attorneys,
which did not include
the requested financial statements and reports.
[9]
In the period between 20 April 2015 and 24
May 2015, attempts to obtain the documents did not prove successful.
As mentioned, the
subpoena
was issued on 23 April 2015. On 1 June 2015, the appellant obtained a
further postponement of the trial with a punitive costs award
against
it. The court directed that the
subpoena
should be complied with. However, on 24 June 2015, the appellant
brought the urgent application to have the
subpoena
set aside. Steenkamp J refused to set aside the
subpoena
and dismissed the application with costs. He held that the documents
sought are relevant to both a claim for dismissal based on
operational requirements and the counterclaims. He did not accept
that the appellant had proved an ulterior purpose to extract
a higher
settlement on the part of the respondent or that the documents should
be privileged on grounds of confidentiality. The
learned judge also
dismissed the contention that the
subpoena
was not validly issued and defective in form. This then is the appeal
against the refusal to set the
subpoena
aside.
[10]
The appellant has raised on appeal, as its
main ground of appeal, an additional ground for setting aside the
subpoena
which was not broached in the urgent court before Steenkamp J.
As noted earlier, it argued that the respondent
followed an irregular process by resorting to a
subpoena
without first attempting discovery and that such constituted an abuse
of process.
[11]
Parties to litigation proceedings have the
right to lawfully secure the production of documentation relevant to
the issues arising
from the dispute between them. The appellant
maintained in argument before us that this must be done in terms of
rule 6(9) of the
Labour Court Rules governing discovery and not in
terms of rule 32, which permits a party to litigation to
subpoena
a witness (as opposed to a party) to give evidence and to produce in
evidence any document or thing in his or her possession. The
objective of rule 6(9) is to enable a litigant to discover
documentation in the possession or under the control of the other
party
to the proceedings, whereas the primary objective of rule 32 is
to secure the production of documentation from persons or entities
who are not necessarily parties to the litigation proceedings.
[12]
Two rules govern the process of discovery
in the Labour Court. Rule 6(4)(b)(vi) provides that at a pre-trial
conference the parties
must attempt to reach consensus on the
discovery and exchange of documents and the preparation of a
paginated bundle of documentation
in chronological order. The other
rule is rule 6(9) which reads as follows:
‘
Discovery
of documents
(a)
A
document or tape recording not disclosed may not, except with the
leave of the court granted on whatever terms the court deems
fit, be
used for any purpose at the hearing by the person who was obliged to
disclose it, except that the document or tape recording
may be used
by a person other than the person who was obliged to disclose it.
(b)
If
the parties cannot reach an agreement regarding the discovery of
documents and tape recordings, either party may apply to the
court
for an appropriate order, including an order as to costs.’
[13]
In trial proceedings, a party thus has a
clearly defined right to call upon the other party to the proceedings
to provide documents
by way of discovery. All the financial
documents, insofar as they are relevant to the issues to be
determined and are required
for advancing the respondent’s case
or defending against the counterclaims,
could
have been sought and obtained through the discovery process. If the
parties were unable to reach an agreement regarding the
discovery of
documents, either could have applied to the court in terms of rule
6(9)(b) for an appropriate order. It is common
cause that the
respondent did not make use of rule 6(9)(b) to apply for an order to
require the appellant to discover the financial
documents. Instead,
it issued a
subpoena
.
[14]
The function of
discovery is to provide the parties with the relevant documentary
material before the trial begins so as to assist
them appraise the
merits of the suit and to provide an opportunity for a fair and
orderly disposal of the case before or at the
hearing.
Part of the purpose is to avoid trial by
ambush. Discovery aims to eliminate surprise through disclosure.
But also ensures that the progress of the trial is
not impeded by skirmishes about relevance, confidentiality and
privilege when
such matters could have been better dealt with in
pre-trial interlocutory proceedings.
[15]
Where a party fails to give discovery, the
application to compel contemplated in rule 6(9)(b) serves three
valuable purposes: it
permits the court by pre-trial motion to: i)
assess the relevance of the disputed documentation by deciding
whether the documents
relate to any matter in question in the
action;
[1]
ii) determine any objection to the production of the document on
legally recognised grounds of privilege or prejudice;
[2]
and iii) set a timetable for discovery and put the parties to terms
of compliance, failing which to dismiss the claim or strike
out the
defence.
[3]
An application to compel discovery can be made during a trial in
unusual circumstances, but the norm is that it should be brought
before the trial as this has obvious advantages for preparation,
orderly conduct and the curtailing of the proceedings.
[16]
Had the respondent
followed the discovery procedure, the appellant would have had an
opportunity to object to the discovery of the
financial documents by
opposing the application to compel discovery. By failing to bring an
application to compel and electing
rather to cause a
subpoena
to be issued in respect of the financial documents, the respondent
denied the appellant the right to object to the discovery of
the
financial documents in a pre-trial process.
The appellant submitted that a
bona
fide
litigant would not employ and
enforce a
subpoena
(which holds severe penalties such as a fine and/or imprisonment in
the event of non-compliance)
[4]
to obtain the financial documents without first availing itself of
the discovery process and consequently it urged us to hold that
the
respondent’s conduct constituted an abuse of process. In
Standard Credit Corporation Ltd v Bester
and Others,
[5]
the Court stated:
'In
general terms, however, an abuse of the process of the court can be
said to take place when its procedure is used by a litigant
for a
purpose for which it was not intended or designed, to the prejudice
or potential prejudice of the other party to the proceedings.'
[17]
A court may set aside a
subpoena
if it is satisfied that its issue constituted an abuse of the process
of the court.
[6]
The
onus
of proving abuse of process rests on a party alleging the abuse.
[7]
In
Beinash
v Wixley,
[8]
the Supreme Court of Appeal described an abuse of process in relation
to the issue of a
subpoena
in the following terms:
'What
does constitute an abuse of the process of the Court is a matter
which needs to be determined by the circumstances of each
case. There
can be no all-encompassing definition of the concept of "abuse
of process". It can be said in general terms,
however, that an
abuse of process takes place where the procedures permitted by the
Rules of the Court to facilitate the pursuit
of the truth are used
for a purpose extraneous to that objective….
Ordinarily,
a litigant is of course entitled to obtain the production of any
document relevant to his or her case in the pursuit
of the truth,
unless the disclosure of the document is protected by law. The
process of a
subpoena
is designed precisely to protect that right. The ends of justice
would be prejudiced if that right was impeded. For this reason
the
Court must be cautious in exercising its power to set aside a
subpoena
on the grounds that it constitutes an abuse of process. It is a power
which will be exercised in rare cases, but once it is clear
that the
subpoena
in issue in any particular matter constitutes an abuse of the
process, the Court will not hesitate to say so and to protect both
the Court and the parties affected thereby from such abuse.'
[9]
[18]
The abuse of process doctrine derives thus
from the court’s inherent power to act as the guardian of its
own procedures in
the interests of orderly and regular litigation.
The doctrine at common law is wide enough to encompass a power to set
aside an
irregular step in proceedings which causes prejudice. The
premature resort to a
subpoena
against a party is such an irregular step. The
discovery process is designed consciously to provide a mechanism to
resolve disclosure
between the parties at the pre-trial stage of the
proceedings. The letter of the
appellant’s
attorneys of 15 April 2015 was in
effect an invitation to the respondent to resort to an application to
compel in terms of rule
6(9). He declined that invitation, probably
because he feared it would delay the trial. But his chosen course was
bound to be fraught
with difficulty and in any event would have
delayed the trial with prior skirmishes at the trial regarding the
relevance of and
any privilege attached to the documents. Moreover,
discovery is the preferred process when seeking documentary evidence
from a
party to litigation. A
subpoena
duces tecum
is the mechanism ordinarily applied to obtain documentary evidence in
possession of non-parties.
[19]
The respondent’s argument that the
appellant is being technical and formalistic misses the point. The
appellant is entitled
to put up a defence to any application to
compel discovery prior to the trial commencing. A pre-trial ruling on
disclosure could
bear significantly upon the appellant’s trial
strategy and preparation. Besides the denial of its basic right to be
heard
on the issues of relevance and privilege prior to trial, it has
been deprived of the opportunity to assess the merits of the suit
in
light of any judicially determined obligation to disclose relevant
information. Any negation of those rights will be prejudicial.
Moreover, I see no basis for refusing a litigant the benefits of a
contested pre-trial discovery process on the basis that labour
litigation should be conducted with minimal legal formalities and
speed. Avoiding pre-trial discovery is likely to have the opposite
effect, as this case shows. Proper discovery normally can contribute
to shortening trial proceedings.
[20]
In the premises, I am satisfied that the
failure of the respondent to bring an application under rule 6(9)(b)
to compel discovery
and his irregular issuing of a
subpoena
against his opponent in litigation is indeed an abuse of process in
the circumstances of this trial. That said, one has a measure
of
sympathy with the respondent arising from the fact that this issue
was mentioned for the first time on appeal and was not argued
before
Steenkamp J in the court
a quo
.
It is trite that a court of appeal is not bound by the terms of
issues as defined by the pleadings or affidavits. A new legal
point
not involving new evidence may be argued on appeal.
[10]
The fact that the point was presented belatedly can be taken into
consideration in determining an appropriate costs order. The
appellant at no stage prior to the appeal urged the respondent to
pursue pre-trial discovery procedures. Had the point been taken
earlier both the application and the appeal might possibly have been
avoided. This is consequently a situation where each party
should
bear its own costs in the application and the appeal despite the
appellant having succeeded on appeal.
[21]
The appellant has also addressed the issues
of the relevance and confidentiality of the documents. These are
matters best left for
the Labour Court to determine in pre-trial
discovery proceedings or at the trial. Likewise, having decided that
the issue of the
subpoena
was an abuse of process, justifying it being set aside, there is no
need to consider any issues regarding its alleged defective
form;
although the arguments raised are evidently not without merit.
[22]
In the result, the appeal must be upheld
and the following orders are issued:
i) The
orders of the court
a quo
are set aside and substituted with
the following:
“
The
subpoena
issued by the Registrar of this Court on 23 April 2015 is hereby set
aside”
ii)
There is no order as to costs.
JR
Murphy AJA
I
agree
Waglay
JP
I
agree
Tlaletsi DJP
APPEARANCES:
FOR THE
APPELLANT: Adv LM Malan
Instructed
by Bowman Gilfillan Inc
FOR THE
RESPONDENT: Adv A de Wet
Instructed
by Venter Attorneys
[1]
See rule 35(1) of the High Court Rules.
[2]
In
Mlamla v Marine and Trade Insurance
Co
1978 (1) SA 401
(E) the court recognised four main grounds
upon which discovery may be resisted: the document is incriminatory
or penal; legal
professional or other privilege; disclosure of the
party’s evidence; and disclosure injurious to the public
interest.
[3]
See rule 35(7) of the High Court Rules which authorises the court to
make an order dismissing the claim or striking out the defence.
Rule
6(9) is not that specific, it merely authorises the court to make an
appropriate order. It must be read with rules 11(3)
and 11(4) of the
Labour Court rules which provide that if a situation arises for
which the rules do not provide, the court may
adopt a procedure it
deems appropriate and may act in a manner that it considers
expedient to achieve the objects of the Act.
The Labour Court may
thus make an order such as that contemplated in rule 35(7) of the
High Court Rules.
[4]
Section 35(2)
of the
Superior Courts
Act 10 of 2013
provides the requisite sanction in the form of a fine
or imprisonment, if the witness disregards a
subpoena
,
and in any event a failure to obey a
subpoena
and/or attend court or produce documents is at common law a contempt
of court committed
ex
facie curiae
.
[5]
1987 (1) SA 812
(W). at 820A - B.
[6]
Beinash v Wixley
[1997] ZASCA 32
;
1997 (3) SA 721
(SCA) at 738H–739B.
[7]
SA Coaters (Pty) Ltd v St Paul Insurance Co
(SA) Ltd
and
Others
2007 (6) SA 629 (D).
[8]
1997 (3) SA 721 (SCA).
[9]
At 734G–735A.
[10]
BP (SA) (Pty) Ltd v Secretary for Customs and Excise
1985 (1)
SA 725
(A).