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RANDVEST CAPITAL INVESTMENTS (PTY) LTD First Respondent
OCEANSIDE TRADIND 644 (PTY ) LTD Second Respondent
CHRISTIAAN JOZUA ESKELL KLAAGSBRUN Third Respondent
CHRISTIAAN JOZUA ESKELL KLAGSBRUN Fourth Respondent
(In his capacity as trustee for the time being of the
Mpumi Maranga Family Trust (IT002734/2016T)]
THE COMPANIES AND INTELLECTUAL
PROPERTY COMMISSION Second Respondent
This matter was heard virtually (Ms teams) and disposed of in terms of the
directives issued by the Judge President of this Division. The judgment and
order are accordingly published and distributed electronically.
JUDGMENT
KUBUSHI J
[1] In accordance with the Commercial Court Practice Directives, this matter
was allocated to me for case management on 3 October 2023. A case
management meeting was held on 16 February 2024. One of the issues that
was on the agenda was an application in terms of rule 35(7) of the Uniform
Rules of Court, issued by the Applicants on 12 February 2024 in which they
sought an order to compel the First to Fourth Respondents (“the Respondents”)
to comply with the applicants’ notice in terms of rule 35(3) dated 20 Sep tember
2023. The rule 35(7) application, in essence, sought to compel the
Respondents to produce and make available for inspection all the documents
listed in the rule 35(3) notice . This is the application that is before court for
determination.
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[2] During the deliberations at th e case management meeting, the
Respondents disputed the relevancy of some of the documents that they
objected to handing over to the Applicants . They however, agreed to hand over
to the Applicants all the remaining documents that were not disputed. A
directive was subsequently issued directing the Respondents to file their
answering affidavit pertaining to those documents specified in the rule 35(3)
notice that they objected to providing to the Applicants on the contended basis
that the documents are not relevant to the dispute, by 1 March 2024. In respect
of the balance of the documents that the Respondents were not opposed to
handing over to the Applicants , the Respondents were directed to hand same
over to the Applicants by 8 March 2024. The Applicants were directed to file
their replying affidavit to the Respondents’ answering affidavit and the parties
to file heads of argument within specified timeframes. At the hearing of the rule
35(7) application, it was confirmed that all the documents, the relevancy of
which was not disputed, had been handed over to the Applicants .
[3] The material dispute between the parties, as appears from the pleadings
in this matter, turns on the alleged unlawful transfer of shares from the First
Respondent to the Second Respondent and the unlawful removal of the Fifth
Applicant as a director of the First Respondent. It is t he Applicants’ alleg ation
that certain shares held in the First Respondent by the Mpumi Marang Family
Trust and the Kgomo Jobe Family Trust were unlawfully transferred by the Third
Respondent to the Second Respondent without the knowledge and consent of
the Applicants ; and that the Fifth Applicant was unlawfully removed as a director
of the First Respondent. The said transactions are alleged to be invalid and fall
to be set aside.
[4] The Respondents allege in their plea that the shares were lawfully
transferred to the Second Respondent by virtue of a n agreement concluded
both orally and in writing between the Mpumi Marang Family Trust, the Kgomo
Jobe Family Trust and the Second Respondent. They, further, aver that the
First Applicant’s removal as a director is lawful because it was done with the
express knowledge and consent of the shareholders of the First Respondent
and that the Fourth Applicant was also notified about the intend ed removal.
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[5] After close of the pleadings, the Applicants served the Respondents with
a notice of discovery which was responded to. The Applicants were , however,
not satisfied with the response received from the Respondents . They, as a
result, proceeded to issue a rule 35(3) notice in terms whereof the Respondents
were called upon to make available for inspection certain documents that the
Applicants believed were in the Respondents ’ possession or control or for the
Respondents to state on oath within ten (10) days that such documents are not
in their possession. A list of those documents is contained in paragraphs 1 to
11 of the rule 35(3) notice.
[6] The Respondents failed to respond to the rule 35(3) notice. In a letter
dated 5 February 2024 sent to the Respondents’ attorney , the Applicants’
attorney demanded that a response be delivered by close of business on
9 February 2024 failing which the Applicants were to bring an application in
terms of rule 35(7) to compel the Respondents to comply with the notice. No
response was received to the letter ; hence the present application was
launched.
[7] It is in the context of the background that the rule 35(7) application is to
be viewed.
[8] As already mentioned the Respondents were directed to file their
answering affidavit by 1 March 2024, which was done. In the answering
affidavit, the Respondents allege that the Applicants’ notice is overly broad and
unspecified and that the Applicants have not stated why the documents are
relevant. The Applicants, on the other hand, contend that as the Respondents
ignored the notice and did not raise the issue of relevance until they filed their
answering affidavit, the Applicants were, as such, not expected to deal with why
the documents are relevant in their founding affidavit in the present applicati on.
[9] The crux of the Respondents’ submission is that the Applicants have not,
in the founding papers, made out a case for an order directing the Respondents
to furnish them with the documents requested in their rule 35(3) notice. This is
the issue that this court should determine.
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[10] In resolving the issues in this matter t he court is to determine the nature
of the relief sought by the Applicants by scrutinizing the wording of Rule 35( 7)
with the background facts of the case. This will enable the court to determine
whether the Applicants have made out a case in their founding papers which
entitles them to an order compel ling the Respondents to produce the
documentation.
[11] The matter before court revolves around the discovery of documents.
The object of discovery has been held to be ‘to ensure that before trial both
parties are made aware of all the documentary evidence that is available. By
this means, the issues are narrowed , and the debate of points which are
incontrovertible is eliminated.’1 Furthermore, it is said that discovery assists the
parties and the court in discovering the truth and, by so doing, helps towards a
just determination of the case.2
[12] The context of this matter deal s with discovery under rule 35. Rule 35
regulates a procedure whereby a party to an action can: require his opponent
to specify on oath the documents and tape recordings in his possession or
under his control which relate to the action; and inspect and cop y such
documents and tape recordings.
[13] Subrule (3) of rule 35 provides a procedure for a party dissatisfied with
the discovery of another party. The intention of the subrule is to provide for a
procedure to supplement discovery which has already taken place, but which
is alleged to be inadequate.3 If the defaulting party does not comply with the
notice given under this subrule, the party requiring discovery is entitled to bring
an application under the provisions of subrule (7) to take the matter further.
[14] At this stage of the proceedings, the question is , based on the
background as set out above, should the court compel the Respondents to
furnish the Applicants with the documents requested in the rule 35(3) notice.
1 See Durbach v Fairway Hotel Ltd 1949(3) SA 1081 (SR) at 1083.
2 See Publishers and Printers Limited v Novus Holding Limited [2022] All SA 299 (SCA) para 25.
333 See Erasmus: Superior Court Practice vol 2 pD1 -472 and the cases referred to.
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[15] It is not in dispute that that Applicants served the Respondents with the
rule 35(3) notice. It is trite that a litigant that is not satisfied with the discovery
that has been made, must first exhaust the remedy under this subrule. Rule
35(3) provides that
"(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 him to make the same available for
inspection in accordance with subrule (6), or to state on oath within ten
days that such documents are not in his possession, in which event he
shall state their wh ereabouts, if known to him.”
[16] It has been held that it is important that a party who is dissatisfied with
discovery should describe the documents, and the tape recordings required for
inspection in such a manner that they are identifiable. Whilst a document need
not be described specifically within the notice, it must be described with
sufficient accuracy to enable it to be identified.4 This the Applicants have done.
There is no dispute that the documents that the Applicants seek the production
of have been clearly described in paragraphs 1 to 11 of the rule 35(3) notice.
[17] The subrule requires two things from the defaulting party, that is, either
to provide the documents requested or to state on oath that such documents
are not in his possession. Moreover, it has been held that under this subrule,
a party is entitled to state in the affidavit that the documents or tape recordings
referred to under the subrule are irrelevant to the issues in the action or that
they are privileged from disclosure.5
[18] It is common cause that the Respondents provided no response to the
Applicants’ notice. Thus, having failed to respond, there was no way in which
the Applicants would have known that the Respondents were not in possession
of the documents or that the relevancy of the documents was being disputed,
nor could they have known if the documents were privileged. This they could
4 See Erasmus: Superior Court Practice vol 2 pD1 -473.
5 Chauvier v Selero 1980 BP 222 at 232A.
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have known only if the Respondents had responded to the rule 35(3) notice.
But the Respondents failed to do so. As a result, when the Applicants
approached court for the rule 35(7) application, they had no knowledge that the
Respondents were going to dispute the relevancy of the documents to the
issues in the action.
[19] Subrule s (1) and (3) of rule 35 contemplate the discovery of all relevant
documents and tape recordings relevant to any matter in question . It was, thus,
incumbent upon the Respondents to respond to the Applicants rule 35(3) notice
and indicate that they were disputing the relevancy of the documents sought to
be produced as being irrelevant to the matters in question. This, they failed to
do even though they had no reason, none was in fact proffered, not to do so.
The Applicants had gone at length to d escribe the documents that they believed
were relevant to the issues in the action and were in the possession or control
of the Respondents. As already stated, the documents are succinctly described
in paragraphs 1 to 11 of the notice.
[20] The Respondents opted to ignore the Applicants’ rule 35(3) notice, and
a subsequent letter sent to their attorneys demanding a reply to the rule 35(3)
notice. This they did at their own peril.
[21] The rules allows a litigant to approach court in terms of rule 35(7) for an
order to compel the defaulting party to produce the documents sought in
subrule (3). And this is what the Applicants did in this matter. Rule 35(7)
provides as follows:
"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 compliance with this rule
and, failing such compliance, may dismiss a claim or strike out the defence."
[22] The relief that the Applicants seek in this application is for an order
‘Compelling the First to Fourth Respondents to comply with the entirety of the
Applicants' notice in terms of Rule 35(3) dated 20 September 2023 ("the
Notice" ) within 5 (five) days of the granting of this order ’.
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[23] The court is said to have the discretion whether to enforce discovery or
inspection. It has been held that the discretion is predicated on the documents,
in respect of which discovery is sought, being relevant.6 In Baard v Allem ,7 an
unreported decision of the full court of this Division, at paragraph 17 thereof,
the following is stated:
“[17] It is trite that the court deciding an application in terms of Rule 35(7)
exercises a discretion whether or not to grant the relief sought. The
relevance of the documents sought will be one of the factors which will
have an influence on the exercise of that discretion. Relevance is
determined having regard to the issues between the parties.”
[24] It means that the granting of the relief sought in the rule 35(7) application
is at the discretion of the court on condition that the documents sought are
relevant to the issues in the matter or to any matter in question in the case.
[25] The meaning of relevance is said to be circumscribed by the
requirements in both subrules (1) and (3) that the document or tape recording
may relate to or may be relevant to ‘any matter in question’. The matter in
question is further determined from the pleadings and not extraneously
therefrom .8 It follows, therefore, that a party may only obtain inspection of
documents and tape recordings or be furnished with documents and tape
recordings that are relevant to the issues on the pleadings.9
[26] It is my view that, in this instance, the discretion should be exercised in
favour of the Applicants and that the Respondents be compelled to furnish the
Applicants with some of the documents which are set out in the Applicants'
notice in terms of Rule 35(3) , which in my opinion relate to or may be relevant
to any matter in question that is determin able from the pleadings.
[27] There are two sets of documents that the Applicants seek production of,
namely, the documents falling within the period which it is alleged that the
shares were transferred to the Second Respondent and when the Fourth
6 Venmop 275 (Pty) Ltd v Cleverlad Projects (Pty) Ltd 2016 (1) SA 78 (GJ) at 93E – H.
7 Baard v Allem (A5005/2021; 44725/2016) [2021] ZAGPJHC 518 (14 October 2021) .
8 Makate v Vodacom (Pty) Ltd 2014(1) SA 191 (GSJ) at 197I – 198B.
9 Makate v Vodacom (Pty) Ltd 2014(1) SA 191 (GSJ) at 197I – 198B.
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Appearances:
For the First to Fifth Applicants :
Instructed:
For the First to Fourth Respondents :
Instructed :
Date of arguments :26 November 2024
Date of Judgment : 05 February 2025
Adv J Hoffman
Assheton -Smith Ginsberg Inc
Adv A Basson
JI Van Niekerk Inc Attorney s