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[1994] ZASCA 110
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Janit and Another v Motor Industry Fund Administrators (Pty) Ltd. (570/93) [1994] ZASCA 110; 1995 (4) SA 293 (AD); [1995] 1 All SA 395 (A) (12 September 1994)
Case no: 570/93
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE DIVISION
)
In the matter between:
MARTIN JANIT
First Appellant
SHELSTATON TWO (PROPRIETARY) LTD
.. Second Appellant
AND
MOTOR INDUSTRY FUND ADMINISTRATORS
(PROPRIETARY) LTD
First Respondent
MOTOR INDUSTRY PENSION
FUND
Second Respondent
Coram
: HOEXTER, E M GROSSKOPF, EKSTEEN, VAN DEN
HEEVER et HOWIE, JJ A
Heard
: 23 May 1994
Delivered
: 12 September 1994
JUDGMENT
EKSTEEN
, JA :
This is an appeal against an order granted by Myburgh J in the Witwatersrand
Local Division interdicting and restraining the appellants
from using the
contents of certain tape recordings in a case pending in that Division between
the parties, or in any other legal
proceedings; from disclosing the contents of
the recordings to any third party; and for the delivery up of the recordings and
transcripts
of them to the respondents.
It appears from the papers that
. . . . / 2
2
the second appellant, Shelstaton Two (Pty) Ltd ("Shelstaton") does business
as a property developer, and that first appellant ("Janit")
beneficially owns
Shelstaton and is its "guiding mind". The first respondent is a private company
which manages the affairs, i a,
of second respondent. From approximately 1989
first respondent entered into various agreements with companies controlled by
Janit
in terms of which these companies developed various projects such as
office blocks and shopping centres for first respondent.
During 1991 the relationship between the respondents on the one hand and
...../ 3
3
Janit and his companies on the other "soured". Matters seem to have come to a
head when, on 19 August 1991, Shelstaton's attorneys
wrote to the respondents'
attorneys purporting to cancel some five development agreements extant between
the parties. The grounds
for such cancellation were alleged to have been conduct
on the part of first respondent which amounted to an unlawful repudiation
of the
agreements, and which repudiation Shelstaton purported to accept. The letter
went on to allege that certain employees of first
re-spondent had defamed
Shelstaton and that
"such conduct actually renders it im-
...... / 4
4
possible for our client to remain contracted to your client in any way
whatsoever",
and furthermore that
"such conduct can be construed as a repudiation of the said agreements which our
client hereby accepts."
It also alleged that first
respondent's conduct had caused Shelstaton to suffer damages esti-mated at some
R300 million, and threatened
to institute action forthwith to recover that
amount.
The very next day - 20 August -Janit in his capacity as a director of
Shelsta-ton addressed a letter to one Pienaar the chair-man
of the Motor
Industry Employee's Union -i e the union whose members' pension contribu-
.... / 5
5
tions were held by second respondent and ad-ministered by first respondent.
In it Janit informed Pienaar of the "major dispute" which
had arisen between
Shelstaton and the respondents, and warned him that unless the dispute were
re-solved immediately it could cost
his members' fund "an amount in excess of
R60 million". A copy of this letter was sent to the chairman and four other
members of
first respondent's board.
On 21 August Janit addressed a letter to the Registrar of Pension Funds
in-forming him, also of the dispute and of the "distastrous
consequences for
the
.... / 6
6
pensioners if the dispute is not settled within the next few
days."
He called on the Registrar to
"intervene in this dispute as a matter of urgency, to assist to re-solve the
situation and to save the unnecessary losses of many
millions of
rands."
Again copies were sent to the chairman and
the same four members of first respondent's board.
It seems fairly evident from these letters that Janit was attempting to rally
sup-port for his cause from the Motor Industry Em-ployee's
Union and from the
Registrar of Pension Funds, and to bring pressure to bear on first respondent's
board to negotiate a settlement
of the dispute with him. In fact
...... / 7
7
in his replying affidavit Janit admits as much,
and says that "at all times" he had sought to avoid litigation which he could
ill
afford. This attitude, is however, hardly consistent with his cancellation
of all agreements with first respondent, and with the
avowed im-possibility of
remaining contracted to it in any way whatsoever. It seems that, in truth, the
termination of the contractual
re-lationships was the last thing that he
desired. Hence his immediate attempts to ensure that those relationships should
continue
- but pre-ferably on his terms.
On 23 August respondents' attor-
.... / 8
8
neys replied to Shelstaton's letter of the 19th disputing that first
respondent had repudiated any of the agreements, and asserting
that
con-sequently Shelstaton had no valid grounds for cancelling. The letter also
denied that first respondent or any of its employees
had defamed Shelstaton in
any way. It construed Shelsta-ton's letter as
"an unequivocal notice by your client to our client of your client's clear
intention that it does not intend to be bound or perform
its obliga-tions under
the aforementioned ag-reements."
This, it alleged,
amounted to a repudiation of
the agreements by Shelstaton, which repudiation
respondents accepted.
.... / 9
9
This letter prompted Janit to instruct his attorneys to write a further
letter to Pienaar demanding an immediate response to his earlier
letter of 20
August, failing which
"our client intends, through the media, if necessary, to convey its concerns
directly to your members."
Then on 4 September Janit
himself wrote to the chairman of first respondent's board, Mr Anderson,
requesting a meeting with him
"to avert present misconceptions continuing and protracted and expensive
litigation with resultant harm to both your Funds and my
company."
After a series of allegations of maladministration and dishonesty on the part
of members of
..... / 10
10
first respondent's board and of its administra-tive staff, Janit concluded by
threatening that
"unless you and your Board of Direct-ors and members of the Trade Union are
prepared to meet with me in the absence of lawyers and
if necessary, on an off
the record basis, I intend making all the facts known, and to pursue this matter
until such time as all the
people involved in this matter have been brought to
task."
Copies of this letter were sent to Pienaar
and to five members of first respondent's board.
First respondent's attorneys re-plied and pointed out that Janit's "letter
writing campaign" amounted to an endeavour to bring improper
pressure to bear on
the re-spondents, and that unless it ceased forthwith
.... / 11
11
respondents would consider applying to court for an interdict. This seems to
have had the desired effect and for a while Janit's letter-writing
stopped.
These letters again seem to re-flect a somewhat desperate attempt by Janit to
undo the harm done to his company and to its sub-contractors
by his initial
cancella-tion of the development agreements. They are consistent with his
previous attempts immediately after his
purported cancellation, forcefully to
influence the respondents to ne-gotiate a settlement in order to reinstate the
contractual
relationship. The further
.... / 12
12
inference that Janit wanted such reinstatements
to be on
his terms is inescapable.
His next move was to issue summons
against the
respondents and two other companies
on 8 April 1992 in which he claimed R40 million
as damages suffered by himself and Shelstaton
as a result of defamatory statements alleged
to have been made by first respondent's general
manager, Loock, and respondents' legal advi-ser, Breedt. The pleadings in
this action do not form part of the papers before us, but
in his judgment in the
court a
quo
Myburgh J summarised the appellants' cause of action, and in
argument before us Mr Slomowitz, who
..... / 13
13
appeared on behalf of the appellants, not only
accepted the correctness of this summary, but indeed relied on it in his
argument. In short it amounts to this - that on two occasions
(January - August
1991, and January 1992) Breedt accused Janit and Shelstaton of bribing
offi-cials of first respondent, and that
during June August 1991 Loock accused
Janit and Shelstaton of theft.
The day before the summons was issued, however, Janit wrote a long letter to
each of the directors of the second respondent (who seem
also to have been the
directors of the first respondent) in which he explained
.... / 14
14
how efficiently Shelstaton had performed its first three development
contracts with re-spondents; how during 1991 the respondents
had commenced a
"vendetta" against Shelstaton, obviously designed to bring an end to this
relationship; and how he had been defamed
by Breedt. He went on to tell them
that he had written to the chairman of their board "on a number of occasions to
request a meeting
with your board to try and resolve differences" but that this
request had been refused "in a most arrogant fashion" and hence that
"the price
that your Fund will pay for this act will be several millions of rands." He
then
..... / 15
15
went on to detail various other alleged mal-practices by certain unnamed
directors and warned that he would not rest "until a satis-factory
answer is
given to me and the members of your Fund."
This letter follows the same line as all Janit's previous correspondence, viz
an attempt to coerce the respondents' directors to negotiate
a settlement of
their dispute with him by threats of dire conse-quences which he so confidently
predicted. This attempt however,
met with as little success as his previous
ones, and the matter proceeded. In the course of the pleadings
..... / 16
16
Janit withdrew his allegations against Loock but increased his claim from R40
million to R113 648 051. This case was eventually set
down for hearing on 10
March 1993. Shortly
before that date Janit obtained a postpone-ment due to his ill health. Then
followed a number of settlement proposals by Janit to
respondents, all of which
were rejected. On 16 August 1993 respondents' attorneys wrote to Janit's
attorneys indicating that respondents
were not interested in settling the action
on the basis offered by Janit, and on the same day respondents' attorneys
received a fresh
offer of settlement. The next day - 17 August - a
.... / 17
17
supplementary discovery affidavit was deposed to by Janit and served on
respondents' attorneys. This affidavit purported to discover
copies of tape
recordings of three meetings of first respond-ent's Board of Directors
respectively held on 26 January 1993, 9 February
1993 and 23 March 1993. These
meetings took place long after the alleged defamation, and even after the issue
of summons. Janit alleged
that these copies had come into his possession after
he had deposed to his original dis-covery affidavit of 9 September 1992. He
gave
no explanation as to how they had come into his possess-ion. It is these tape
recordings which form the subject matter of the
interdict presently under
.... / 18
18
consideration.
At respondents' request they were given
copies of the tape recordings to listen to. Shortly afterwards they received
informa-tion
from an undisclosed source to the effect that Janit had made copies
of the tapes avail-able to the press. This prompted them to write
to Janit
through their attorneys on 24 August saying -
"1 We are instructed that Mr Martin Janit informed Mr Jowell (one of
respondents' directors) that unless our clients meet his demands
'certain tape
recordings and minutes damaging to the pension funds' which have already been
made avail-able to 'a newspaper' will
be published upon Mr Janit's in=
structions.
.... / 19
19
2 Your client, Mr Janit, is request-ed to furnish us with an under-taking in
writing by 12h00 to-morrow that no such publication will
take place of any
matter con-fidential to our clients or the pension funds administered by our
clients. Failing such under-taking
our clients will take such steps as they may
be advised to take."
On 25 August Janit replied and
denied having spoken to Mr Jowell "in
recent
times"; denied the allegations in 1 above;
and concluded:
"In the circumstances there is no basis for your request for an un-dertaking,
nor will one be given and, in any event, nor is our
client capable of giving an
effective under-taking on the terms requested by
you."
..... / 20
20
Respondents then requested Janit to return to them "the original tape
recordings, all copies thereof and all transcripts or notes
and copies thereof"
failing which an applica-tion to court would be made. Janit's attorneys replied
that -
"... what has been discovered are copies
of tape recordings and not originals. Our client does not have original tape
recordings. If our client were in possession of original
tape record-ings it
would return them to your client as our client would not con-sider exerting the
right to possess-ion of property
created and owned by your client. However this
is not the case."
They then went on to say -
"You make much of the confidentiality
..... / 21
21
of matter on the copy tape recordings. Our client comments that your client
is in a similar position to a public body with responsibilities
towards its
pensioners and members. One would not expect that your client has anything to
hide from the public. Should our client
be incorrect in this regard please
advise us of the rea-sons why confidentiality is suddenly attributed to meetings
whereas, in the
past, this was not raised."
How Janit came to be in possession
of these copies of the tape recordings
is not in
serious dispute on the papers. It appears that
first respondent employed one A C Murray as
committee secretary at the time when the
relevant meetings were held. It was his duty
to draw up the minutes of the meetings of first
..... / 22
22
respondent's board of directors. As an aid in the preparation of these
minutes Murray was provided with a tape recorder and casettes
with which he
recorded the entire proceedings at the meeting. The confidential nature of these
re-cordings had been duly impressed
upon him.
During June 1993 Murray was dis-missed from first respondent's employ. When
he left, Murray stole the tape recordings of the three
board meetings referred
to above, and took them to Janit in order to embarrass first respondent. Janit
admits that Murray approach-ed
him and offered him the tape recordings. He says
-
.... / 23
23
"I suspected that Mr Murray did not own these tape recordings and was
accordingly not prepared to accept delivery thereof. I did
however take copies
of the tape recordings when he offered them to me. It is these copies of the
tapes which are in my possession
and which have been
discovered."
In the light of Janit's refusal to give
any undertaking not to publish confi-dential matter contained on the tapes in
his possession,
respondents brought an application on 31 August 1993 in which
they sought an order against Janit and Shelstaton in the following
terms -
"1 That this matter be heard as one of urgency in terms of the provi-sions of
rule 6(12)(a) and that the forms and service provided
for in the rules be
dispensed with;
..... / 24
24
2 That the first and second respond-ents (the present appellants) be and are
hereby interdicted from:
2.1
using in evidence in Case
92/9714 Witwatersrand Local Division, or in other legal proceedings, the
contents of tape recordings of
meetings of the Board of Direct-ors of the first
applicant held on 26 January 1993, 9 February 1993 and 23 March 1993 or any
other
recordings of meetings of the Board of Directors of the first applicant
which the re-spondents may have in their pos-session ('the
discovered
record-ings');
2.2
disclosing the contents of
the recordings to any third party.
3 The first and
second respondents be and are hereby directed to: 3.1 disclose under oath in an
affi-davit to be delivered to the
applicants' attorneys within 6 hours from this
order being granted the names of all persons and/or entities to whom the
.... / 25
25
respondents provided copies or
transcripts thereof;
3.2 hand to the applicants' attor-neys within 6 hours from this order being
granted all copies and transcripts of the record-ings
in the possession of the
respondents and/or their agents. 4 That the respondents, jointly
and
severally, pay the costs of this
application on the attorney and
own client scale."
In their application the respondents alleged that the tape recordings
contained con-fidential business information, information subject
to legal
privilege, and other material quite irrelevant to Janit's defamation action. The
theft of the recordings by Murray and his
handing them over to Janit, so it was
alleged,
.... / 26
26
constituted an unlawful invasion of the respond-ents' privacy; that Janit's
possession of them was unlawful; and that his supplementary
dis-covery was
mala fide
and an abuse of the legal process. They expressed the fear that
Janit would "give publicity in the financial newspapers and magazines
to certain
of the discussions which took place at the relevant board meetings" and that he
would disclose the confidential in-formation
relating to other litigation
between the respondents and third parties, to such third parties.
In their founding affidavit the respondents indicated that the
transcriptions
.... / 27
27
would be placed before the presiding judge at the hearing of the application,
and that they were not being annexed to the papers since
they contained "matters
confidential and privileged which may not be disclosed." In reply to this
allegation Janit denied that they
contained any confidential or privileged
information and promptly proceeded to annex complete copies of the
transcriptions of all
three meetings to his replying affidavit.
After hearing argument Myburgh J granted an order in terms of prayers 2.1,
2.2 and 3.2. He refused to make an order in terms of prayer
3.1. He ordered
Janit and Shelstaton,
..... / 28
28
jointly and severally, to pay the respondents' costs (as between party and
party), which costs were to include the costs of two counsel.
It is against
these orders that the present appeal is directed.
The papers reveal that what pri-marily prompted the respondents to approach
the court, was the desire to prevent Janit from publishing
in the press the
confidential information of what had transpired at their board meetings, and
from disclosing it to third parties.
That this was their main concern appears
from their letter of 24 August. In it they sought an undertaking from Janit that
he
.... / 29
29
would not publish that information. It was
his refusal to
give such an undertaking and
his denial of any confidentiality that led
directly to the application being launched.
The relief sought in this respect was embodied in prayer 2.2, and it will be
convenient there-fore to deal firstly with this aspect.
It is not disputed that the re-spondents have a right to conduct the meetings
of their board of directors in strict confi-dence so
that any matters affecting
the company may be discussed freely and openly. In his judgment in
Sage
Holdings Ltd and Another v Financial Mail (Pty) Ltd and Others
1991 (2)
SA
.... / 30
30
117 (W) at 132 I - 133 A Joffe J held that -
"In exercising the right to trade and carry on a lawful business, a company or
other juristic person would be entitled to regard
the confidential oral or
written communications of its directors and employees as sacrosanct and would in
appropriate circumstances
be entitled to enforce the confident-iality of the
aforesaid oral and written communications. To my mind, such right would in
appropriate
circum-stances be enforceable against whomso-ever is in possession
thereof and whomsoever seeks to utilise it. The fact that the
person who is in
pos-session thereof was not party to the unlawful conduct in obtaining it does
not exclude the right which the appli-cants
would
have."
This view of the law was approved of by
this
court on appeal (
Financial Mail (Pty) Ltd and
Others v Sage Holdings Ltd and Another
1993 (2)
.... / 31
31
SA 451 (A) at 464 D-P). In delivering judgment
in that case Corbett CJ
quoted with approval the
dictum
of Griffiths L J in
Lion
Laboratories
Ltd v Evans and Others
(1994) 2 All E R 417
at 433
d-e that -
"There is a public interest of a high order in preserving confidentiality within
an organisation. Employees must be entitled to discuss
problems freely, raise
their doubts and ex-press their disagreements without the fear that they may be
used to dis-credit the company
and perhaps im-peril the existence of the company
and the livelihood of all those who work for
it."
This would, in my view, apply a
fortiori
to the
confidential discussions of a board of directors.
Murray's action in stealing the
.... / 32
32
taped recordings of those meetings and offer-ing them to Janit was an
unlawful invasion of their privacy for which there is here no
just-fication.
Janit concedes that when Murray offered him the original tapes he "suspected"
that Murray did not own them. That was
why piously he did not accept the
originals. He concedes that he "did however take copies of the tape recordings
when he offered
them to me". It is not quite clear from this whether Janit made
the copies himself, or whether he left it to Murray to make them.
Janit,
however, knew full well that the information on the tapes had been obtained by
means of an unlawful in-
..... / 33
33
trusion upon the privacy of the respondents,
and consequently any
disclosure by him of that
information would itself constitute an
invasion
of respondent's privacy (
Sage Holdings Ltd and
Another
v Financial Mail (Pty) Ltd and Others
(
supra
) at 463 C - F). In that case, while
laying this down as a general proposition,
Corbett CJ added (at 463 G) -
"It might well be that, if in the case of information obtained by means of an
unlawful intrusion the nature of the information were
such that there were
overriding grounds in favour of the public being informed thereof, the Court
would conclude that publi-cation
of the information should be permitted, despite
its source or the manner in which it was obtained."
..... / 34
34
In the present case there do not appear to be any such overriding grounds in
favour of the general disclosure of this information,
nor have any such grounds
been suggested to us. Respondents therefore had a clear right to pro-tect the
content of their confidential
dis-cussions from disclosure.
Mr Slomowitz contended that on the papers the respondents failed to show that
they had any reasonable apprehension that Janit would
indeed publish the
information or disclose it to any third party. He submitted that the letters
written by Janit to Pienaar, to the
Registrar of Pensions, to Anderson and
.... / 35
35
to the directors of the respondents were merely
laudable attempts to settle the dispute between the parties and subsequently
the ensuing liti-gation; and that none of this afforded
grounds for any
reasonable apprehension on the part of respondents that Janit might publish the
infor-mation in the press or disclose
it to third persons. I find myself unable
to agree with this submission.
In his letter to Pienaar on 20 August 1991 Janit not only informed Pienaar of
the dispute with respondents which could cost his members'
fund "in excess of
R60 million", but also went on to say that he was aware of
..... / 36
36
"various other developments of the ... Pension
Fund, the
results of which are, at the very least,
highly questionable" and offered to
give Pienaar
full details of these if he could meet him.
When Pienaar did not respond
to this letter
Janit, through his attorneys, addressed another
letter to Pienaar on 27 August in which he
threatened to convey his concerns directly to
the members of the trade union "through the media
if necessary" unless Pienaar responded to his
demands as a matter of urgency.
His subsequent letters of 4 and 11 September 1991 and 7 April 1992 contained
further threats to expose the respondents' alleged
....../ 37
37
malpractices and nor to rest until all concern-ed had been brought to book.
It is against this background that one must see respondents'
reaction to Janit's
explicit refusal to give any undertaking that he would not publish the
confidential information contained on
the tapes when requested to do so, and,
indeed, his refu-sal to recognize the confidentiality of any of the
information.
That respondents entertained a real apprehension that Janit would procure the
pub-lication of confidential information from the tapes
in the media, or at the
very least would disclose it to third persons admits of very
..... / 38
38
little doubt. The question is whether such an apprehension was reasonable.
The test is thus an objective one viz whether a reasonable
man would, in the
light of all the circumstances outlined above, have entertained such an
app-rehension (
Free State Gold Areas Ltd v Merrie
-
spruit (Orange Free
State) Gold Mining Co Ltd and Another
1961 (2) SA 505
(W) at p 518 A - C;
Nestor and Others v Minister of Police and Others
1984 (4) SA 230
(SWA)
at p 244 E - I and
Minister of Law and Order and Others v Nordien and
Another
1987 (2) SA 894
(A) at 896 G - I). The learned judge in the court a
quo
came to the conclusion that this question yielded an
.... / 39
39
affirmative answer. I agree. Janit brought matters to a head when he
purported to cancel his contracts with respondents. This would
seem to have been
done with an ulterior motive, because, far from withdraw-ing his purported
repudiation he immediately attempted
to draw the trade union and the Registrar
of Pensions into the dispute in order to coerce respondents to comply with his
demands.
Respondents' acceptance of his repudiation dismayed him, and prompted
him to step up his pressure by dire threats of retribution
against various
directors
.... / 40
40
and employees of respondents for alleged mal-practices. He
even threatened to invoke the
assistance of the media if necessary to expose the respondents and their
employees. When Murray stole the tape recordings of respondent's
board meetings
and offered them to Janit, he readily helped himself to the information they
con-tained despite the fact that he knew
that the tapes had been unlawfully
obtained, and that they contained the private and confidential discussions of
respondents' directors.
In so doing he violated and infringed their legal right
to privacy. This violation was subsequently compounded by making transcripts
.... / 41
41
of the recordings; by his refusal to give an undertaking not to publish the
information; and by his denial that it warranted any confi-dential
treatment.
This conduct was, in my view, calculated to raise the gravest apprehen-sion in
the minds of the respondents, and in-deed
of any reasonable man, that Janit
would in fact publish transcripts of the record-ings or disclose them to third
persons. In the
light of Janit's conduct this appre-hension which respondents
harboured was, in my view, a reasonable one. This is borne out by his
act of
annexing the trans-cripts to his replying affidavit.
.... / 42
42
It has not been suggested that respondents had any remedy other than an
inter-dict to protect the privacy of their discussions. The
interdict sought in
prayer 2.2 was therefore properly granted.
I turn now to consider the inter-dict granted in terms of prayer 2.1 i e
pro-hibiting Janit from using the tape record-ings in the
defamation action or
in any other legal proceedings. The transcriptions of these recordings which
Janit annexed to his replying affidavit
cover some 320 pages. They deal,
generally speaking, with :
(a) Discussion of certain of first
..... / 43
43
respondents' investments; the nature of these investments and how they should
be dealt with in the future; the administration of the
affairs of first
respond-ent - evident shortcomings and how they should be dealt with in future.
All this amounts to ge-neral business
information of a sensitive and
confidential nature, (b) Reports by Loock to the direct-ors concerning (i) the
progress and chances
of
success of litigation between
.... / 44
44
the respondents and third parties; and
(ii) the progress and prospects of success in the defamation act-ion
instituted by Janit and Shelstaton; facts relevant to the action;
proposed
stra-tegies of respondents' counsel in the action and particularly in respect of
the cross-exami-nation of Janit;
(iii) details as to future litiga-tion between Janit and the respondents.
.... / 45
45
(c) Discussion of various other
matters which can have very
little if any relevance to the defama-tion action between the parties. Mr
Gauntlett, on behalf of the
re-spondents, submitted that the privileged
infor-mation contained in the transcripts - i e the reports by the respondents'
legal
adviser to the board on the progress of the legal proceedings against
Janit and against other litigants, and the strategies respondents'
counsel
intended pursuing - could not be disclosed. This pri-vilege, designed to protect
the confidentiality of communications between
a legal adviser and
..... / 46
46
his litigant client, Mr Gauntlett submitted, was one of the cornerstones of
the functioning of our legal system, and one long recognized
by our courts. The
importance of this privilege and its ambit has been referred to i a in
Wig-more on Evidence, (Mc Naughton Revision, 1961
) Vol VIII para 2285 and
2291;
Euroshipping Cor
-ooration of Monrovia v Minister of Agricultural
Economics and Marketing and Others
1979 (1) SA 637
(C) at 643 H - 644 C
and
S v Safatsa and Others
1988 (1) SA 868
(A) at 885 D - 886 G.
As to the confidential information relating to respondents' business and
administra-tive activities, Mr Gauntlett again relied on
..... / 47
47
Sage Holdings Ltd and Another v Financial Mail (Pty) Ltd and Others
(
supra
) for his submission that inasmuch as the tapes had been
obtained
in an unlawful manner and had constituted an invasion of
respondents' privacy not only by Murray but also by Janit, he should be
prohi-bited
from using that information not only in the defamation action but in
any other pro-ceedings.
Irrelevant matter, he submitted, would, in any event, be inadmissible at the
trial and no good reason could be advanced for its discovery.
Mr Slomowitz did not seek to deny
...... / 48
48
that the transcripts contained matter that would attract professional
privilege, and that the court was bound to exclude it from discovery,
but
submitted that this could be achieved sim-ply by directing that the privileged
portions be deleted.
He did not concede that any portion of the transcripts could be regarded as
confi-dential, but submitted that, even upon that assumption,
this would be no
bar to discovery. The touchstone in this respect was admissibility in evidence
at the trial. A trial court, he submitted,
was not concerned with the way in
which evidence had been obtained, but only
..... / 49
49
with the consideration whether it was admissi-ble or not. The trial court was
therefore the proper forum to decide this issue and
not
the court a
quo
.
In his judgment Myburgh J held that he had a discretion to disallow the
evi-dence because of the improper way in which it had been
obtained, and because
of the privileged and confidential nature of the information con-tained on the
tapes. He relied for this con-clusion
on a
dictum
of Lombard J in
Shell SA (Edms) Bpk en Andere v Voorsitter, Dorperaad van die
Oranje-Vrystaat, en Andere
1992 (1) SA 906
(0) at 916 E - I to the effect
that there
...... / 50
50
was no good reason why a court, in a civil case, should not have the same
discretion as it had in criminal cases to exclude otherwise
admissible evidence
because of the improper way in which it had been obtained. Courts in England
have for a long time accepted that
they have a right in criminal cases to
exclude otherwise admissible evidence when justice and fairness to the accused
require it,
for example where the evidence was obtained by a trick or by fraud
(cf
Noor Mahomed v R
(1949) AC 182
;
Kuruma Son of Kaniu v R
(1955)
AC 197
and
R v Sang
[1979] UKHL 3
;
(1979) 2 All E R 1222
(H of L). In South Africa our
courts have exercised a similar discretion (cf
..... / 51
51
S v Forbes
1970 (2) SA 594
(C) at 600 A-C and
S v Lebea
1975
(4) SA 337
(W)). Although the discretion was referred to by this court in
S v
Mushimba en Andere
1977 (2) SA 829
(A) at 840 D-F and
S v Mphalele and
Another
1982 (4) SA 505
(A) at 513 B-E a decision as to its existence in our
criminal law was left open. Until the
dictum
of Lombard J to which I have
referred, there seems to have been consi-derable doubt as to whether any such
discre-tion existed in
civil cases (Lawsa Vol 9 para 496 pp 298-9, and Hoffmann
and Zeffertt
The South African Law of Evidence
4th ed at pp 291-2.) In
the view I take of the matter,
..... / 52
52
however, it is not necessary to discuss this aspect any further.
As I have already pointed out, Janit's initial letter of 19 August 1991 - in
which he pur-ported to cancel the five agreements between
the parties because of
respondents' alleged unlaw-ful repudiation of them - was written with an
ulterior motive. Cancellation of
the agree-ments was the last thing Janit
wanted. This was apparent from his immediate and urgent attempts to draw the
trade union
and the Re-gistrar of Pensions into the matter in an ob-vious
attempt to bring pressure to bear on re-spondents to settle the matter
with him
on his
..... / 53
53
terms. Significantly this attempt was made even before the respondents had
reacted to his letter of cancellation. When on 23 August
respondents accepted
Janit's repudiation and indicated their intention to treat the contracts as
being at an end, Janit redoubled
his efforts to retrieve the situation without
apologising or expressing any regret for what he had done. Instead he resorted
to allegations
of mal-practice and dishonesty on the part of re-spondents'
directors and administrative staff, and threats to make all this public
"through
the media if necessary", and not to rest until all concerned had been brought to
book. These
.... / 54
54
threats were all directed at compelling respondent to enter into negotiations
with him to reinstate their contractual relationship.
To his dismay they did not
achieve the desired effect. He then went further and issued summons for
defamation claiming R40 million.
At the same time - a day before the summons was
issued -he made yet another attempt to get the directors of respondents to
settle
the whole dispute. In his letter to them he pointed to the "arrogance" of
their chairman in refusing to meet with him, told them
he had information of
dishonest practices of some of them, and warned them once again of the price
they were
...../ 55
55
going to have to pay. This letter, like his previous letters, was full of
thinly veiled threats designed to instil fear of the conse-quences
for them of a
trial in open court, and a warning rather to settle while they could still do
so. Again no success attended these efforts,
nor did the subsequent increase of
the claim to R113 648 051 bring respondents to heel. All Janit's overtures to
settle the matter
during 1993 were rejected. And then Murray approached him with
the cassettes he had stolen from the re-spondents. This was an unexpected
windfall for Janit. Now he had irrefutable and highly con-fidential information
of respondents' business
...... / 56
56
discussions covering the first three months of 1993. He must have realized
from the start how confidential and how sensitive this
information was, and how
embarrassing its disclosure would be to respondents. He also realized that it
constituted an unlawful intru-sion
upon the respondents' privacy but did not
hesitate to make himself a party to it. Exactly when he was offered and took the
information
is not disclosed on the papers. In their founding affidavit
respondents pertinently pointed out that in his discovery affidavit Janit
had
not explained "when, where, how and from whom such tape recordings
.... / 57
57
were obtained." Janit's reply was simply that the discovery affidavit was in
the usual form. He repudiated any suggestion of improper
conduct or
mala
fides
on his part.
All Janit's efforts after his ini-tial letters of 19 August 1991 were
persistently and continuously directed to persuading the re-spondents
to settle
the dispute and to restore their contractual relationship. Even the in-stitution
of his defamation action was directed
to this end, as is evidenced by the letter
he wrote to all respondents' directors the day be-fore summons was issued. The
probabilities
are therefore overwhelming that the use to which he
.... / 58
58
intended putting the tape recordings would be directed to this same end. This
was borne out by the fact that although his latest over-ture
for a settlement
had been rejected on 16 August 1993, a fresh offer of settlement was made that
very day, and the supplementary dis-covery
of the copies of the tapes was made
the next day i e 17 August. It is not unreasonable to infer, in the light of all
the attendant
cir-cumstances, that the discovery was so timed in order to
constitute a disclosure to the re-spondents that he was in possession
of the
tapes in the hope that this would extort from them acceptance of his latest
offer of settlement,
.... / 59
59
in preference to courting publication of their contents. It is conceded that
portions of the transcripts were privileged and ought
not to have been
disclosed. The rest was private and confidential to the respondents whether it
was relevant to the action or not.
Anything relevant to the action was, in its
very nature, confidential. Moreover the three meetings were held long after the
alleged
defamation and in fact just prior to and after the date set for the
trial, so that the discussions could hardly yield anything pertinent
to the
action other than that which was clearly privileged.
.... / 60
60
In the light of all this the supple-mentary discovery of the unlawfully
obtained tapes cannot be seen as an ordinary step in the course
of litigation.
On the contrary it amounts to an abuse of the process of the court directed to
the attainment of an ulterior goal
viz to compel respondents to reinstate their
contractual re-lationship, moreover, on Janit's terms. The court is in duty
bound to
protect its process against such intolerable abuse. In my view,
therefore, the court a
quo
was correct in in-terdicting Janit and
Shelstaton from using the contents of the tape recordings in the defama-tion
action between
the parties. The further order prohibiting their use "in any
other
61
proceedings", however, does not seem to me to
be warranted
on the papers. No "other pro-ceedings" are alleged to be in progress between the
parties or even to be contemplated,
nor is there any allegation that Janit or
Shelstaton
intend using them in any proceedings other than the defamation action for the
purposes I have
mentioned.
The order that Janit should hand
all copies and transcripts of the recordings
in his possession to the respondents' attorneys,
is one which, on the face of it, presents some
difficulty. The copies and the transcripts
did not belong to the respondents but were made
.... / 62
62
subsequent fo the theft of the original record-ings. The proceedings for
their recovery are therefore not of a vindicatory nature.
As I have indicated
above, it is not clear on the papers whether Janit made the copies or whether
they were made by Murray.
In support of his submission that respondents were entitled to the delivery
up of the copies and the transcripts Mr Gauntlett re-lied
i a on the judgment in
English and Ameri-can Insurance Co Ltd v Herbert Smith
(1988) F S R 232.
In that case the papers of counsel acting for the plaintiffs in an action
pending in the Commercial Court, were mistakenly
.... / 63
63
sent to the solicitors for the other side. The papers were clearly entitled
to legal professional privilege. On the instructions of
their clients the
solicitors for the defendants read the papers and informed their clients of what
they had discovered. They then
returned the papers to the plaintiffs'
solicitors. By notice of motion plaintiffs claimed an interlocutory order
restraining the
defendants from making any use of any information derived from
the privileged documents, and for an order that the defendants deliver
up to the
plaintiffs or their solicitors "any note, letter written record (including any
attendance note) or other
.... / 64
64
document within their possession or power con-taining any information derived
from the bundle" -i e plaintiffs' counsel's bundle of
papers. Both these orders
were granted - though with certain qualifications which are not of any
importance for present purposes.
In his judg-ment Sir Nicholas Browne-Wilkinson
V-C referred to the apparent conflict between the decision in
Calcraft v
Guest
(1898) 1 QB 759
(CA) which had held that secondary evidence could be
led as to the contents of a privileged document however it had been obtained,
and
Lord Ash
-
burton v Pape
(1913) 2 Ch 469
(CA) where an
injunction was granted restraining the use of
...... / 65
65
confidential information contained in privi-leged documents
obtained from the applicant by a trick. This apparent conflict, he held,
had
been resolved by the Court of Appeal in
Goddard and Another v Nationwide
Building So-ciety
(1986) 3 MLR 734
where it was held that the position
depended on whether the proceed-ings were taken before the document was
tender-ed in evidence
or not. The learned Vice-Chancellor then went on (at p
236) to say -
"If such proceedings are taken before the document is tendered, then the
person entitled to the legal pro-fessional privilege is entitled
to delivery up
of the documents and the copies and to an injunction restrain-ing the other side
from making any
.... / 66
66
use of them including the use of them in the proceedings which are
pending."
He followed the decision in
Goddard
's case in making the orders to which I have referred. In that
case, it must be borne in mind, it was the defendants' solicitors who
had made
the copies of documents contained in counsel's bundle before handing the
originals back to plaintiffs' solicitors.
A subsequent English case in which an injunction was granted restraining the
re-spondent from using information contained in certain
privileged documents and
ordering him
..... / 67
67
to return all copies of the privileged docu-ments to the applicant is
Derby & Co Ltd and Others v Weldon and Others
(No 8)
(1990) 3 All E R
762.
In that case the applicants' soli-citors had inadvertently disclosed
documents to which legal professional privilege attached in
their discovery, and
had given the re-spondents' solicitors copies of these docu-ments. The court
held that the documents were of
such a nature that respondents' solicitors must
have realized that they had been inadver-tently disclosed, and that therefore
they
were bound to return them.
In our courts consideration has
.... / 68
68
been given to the question whether, in grant-ing an Anton Filler order, the
court also has jurisdiction to order the attachment of
an article in which the
applicant had no proprie-tory right as an interim measure pending a claim for
delivery up of the article.
In
Roamer Watch Co SA and Another v African
Tex-tile Distributors
also t/a
M K Patel Whole-sale Merchants and Direct
Importers
1980 (2) SA 254
(W) Cilliers AJ held at p 275 H - 276 A that it
had such a jurisdiction where this was necessary "to render the principal remedy
of an interdict effective". In
Cerebos Food Corporation Ltd v Diverse Foods
SA (Pty) Ltd
.... / 69
69
and Another
1984 (4) SA 149
(T) at 173 F - I the court held that it
had no such power, but in
Universal City Studios Inc and Others v Network
Video (Pty)_ Ltd
[1986] ZASCA 3
;
1986 (2) SA 734
(A) at 756 A - B this court left the matter
open.
However, in what amounted to an
obiter dictum
(at pp 754 E - 755 E)
the learned Chief Justice referred to the "inherent reservoir of power" which
our Supreme Court undoubtedly
has to regulate its procedures in the interests of
the proper administration of justice. Re-cognizing that the court probably does
not have inherent power to create substantive law, he pointed to the
difficulties attendant upon
..... / 70
70
drawing a clear dividing line between substan-
tive and adjectival law. In further elabo-ration of this right adverting to
the matter before him - an Anton Filler matter - he ex-pressed
the view that
where an applicant could establish a
prima facie
cause of action against
a respondent, and where that respondent had in his possession certain specific
documents which would constitute
vital evidence in substantia-tion of applicants
cause of action "(but in respect of which applicant can claim no real or
personal
right)" it would not be beyond the inherent powers of the court to
order that that evidence be preserved by copying the
..... / 71
71
documents or even by placing them temporarily in the custody of a third
party.
In his judgment in the court a.
quo
Myburgh J does not deal
specifically with this prayer, but seems to have granted the order on the basis
that he had a discretion "to
exclude evidence which was unlawfully obtained."
Having come to the conclusion that he ought to exercise that discretion in
favour
of the respondents he simply preceded to grant prayers 2.1 and 3.2.
In the present case, as I have indicated, it is not clear on the papers
whether Janit made the copies from the original
.... / 72
72
tape recordings, or whether Murray did so. It would appear, though, from
Janit's replying affidavit that Murray offered to give him
the original tape
recordings. He immediately suspected that Murray did not own them but that they
belonged to respondents - in other
words that Murray had stolen them from
re-spondents. That was apparently the reason why he was not prepared to accept
the originals.
He was, however, very eager to have the infor-mation contained on
the tapes. In the absence of any explanation from Janit as to the
nature of the
surreptitious transaction whereby he acquired the copies from Murray, or how
the
.... / 73
73
copies came to be made, the inference seems to be irresistible that Janit
either had the copies made himself or that he asked Murray
to make them for him.
In either event they would have been made at his insistence at a time when he
knew full well that acceptance
of the tapes would make him a party to the
unlawful invasion of respondents' privacy. Nevertheless he took the copies and
had transcripts
of their contents made. The cassettes and the paper on which
these copies and transcriptions are contained were of minimal intrinsic
value.
it is the information recorded on them, which was of great value both to Janit
and to respondents and in
..... / 74
74
which respondents may be said to have had a proprietary interest. Having
regard to Janit's past behaviour and to his threats to publicise
respondents'
private affairs and alleged mal-administration widely - even through the media
if necessary - respondents were, in my
view, justifiably concerned at what might
leak out if Janit was allowed to remain in possession of the copies and
transcripts containing
not only legally privileged matter, but also a mass of
confidential and sensitive information -information to which he was not entitled
and which had been unlawfully obtained- I am not un-mindful of the fact that
respondents also asked
.... / 75
75
for and were granted an order restraining Janit from disclosing the contents
of the recordings to any third party, and that the additional
order to deliver
up the copies and the transcripts to respondent might be seen as presupposing
that Janit would disregard the interdict
(see
Cerebos Food Corporation
case,
supra
, at p 173 G - I). However, in the circumstances of the
present case - and particularly in the light of the circumstances pertaining
at
the time when the application was brought and when the judgment in the court a
quo
was given -it was a salutary precaution to take, because if Janit
were left in possession he might well
..... / 76
76
have been "tempted to commit a breach of the
injunction which he would not otherwise commit"
(per Russell J in
Mergenthaler Linotype Co v
Intertype Ltd
(1926) 43 RFC 381 at 382). It
was therefore an order which, in the present case, justice reasonably
required in order to
render the protection by the court of respondents' confidential information
effectual. In these circumstances the court has inherent
power to make such an
order.
Although, therefore, the appellant has succeeded in obtaining an amendment to
the first order made by the court a
quo
he cannot be said to have been so
substantially success-
..... / 77
77 ful on appeal as to affect the order of costs.
In the
result the following orders are made:
(1) The order made by the court a
quo
is
altered by the deletion of
the words
"or in any other legal proceedings"
in 1.1 ;
(2) Otherwise the appeal is dismissed
with costs, such costs to
include
the costs of two counsel, as well
as the costs incurred in the
app
lication for leave to appeal.
J P G EKSTEEN, JA
HOEXTER, JA )
E M GROSSKOPF, JA )
CONCUR VAN DEN HEEVER, JA )
HOWIE, JA )