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[2010] ZAWCHC 68
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Mathias International Ltd and Another v Baillache and Others (23347/09) [2010] ZAWCHC 68; 2015 (2) SA 357 (WCC) (8 March 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
In
the matter between:
Case
No.23347/09
MATHIAS
INTERNATIONAL LIMITED
First
Applicant
MI
FOODS INTERNATIONAL RSA (PTY) LTD
Second
Applicant
and
MONIQUE
BAILLACHE
First
Respondent
FOB
TRADING
Second
Respondent
MERLOG
FOODS (PTY) LTD
Third
Party
CORAM:
Binns-Ward,
J
JUDGMENT
:
A.G.
Binns-Ward,J
DATE
OF HEARING
:
18
February 2010
DATE
OF JUDGMENT
:
8
March 2010
FOR
APPLICANTS:
Adv
I J Muller, SC et Adv R D E Gordon
INSTRUCTED
BY:
Edward
Nathan Sonnenbergs
(Mr
G van Niekerk)
ADV.
FOR FIRST RESPONDENT:
Adv
R Stelzner,SC
INSTRUCTED
BY:
Smith
Tabata Buchanan Boyes
(C
de Riego de Dios)
Republic
of South Africa
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
In
the matter between:
Case
No. 23347/09
MATHIAS
INTERNATIONAL LIMITED
First
Applicant
MI
FOODS INTERNATIONAL RSA (PTY) LTD
Second
Applicant
and
MONIQUE
BAILLACHE
First
Respondent
FOB
TRADING
Second Respondent
MERLOG
FOODS (PTY) LTD
Third
Party
JUDGMENT
DELIVERED ON 8
th
MARCH 2010
BINNS-WARD
J:
[1]
The applicants are a New Zealand based company which trades
internationally in frozen food products, especially meat, fish and
vegetables, and its South African subsidiary.
[2]
At all times material to the matters in issue the first respondent
was an executive director of the South African subsidiary and
managed
the applicants' business in this country.
[3]
The second respondent is cited as FOB Trading, allegedly a firm as
contemplated in terms of rule 14 of the Uniform Rules of Court.
The
evidence established the existence of a business by the name FOB
which had been established in Argentina by two former employees
of
the first applicant at its South American branch. For present
purposes it can be accepted that no distinction falls to be drawn
between FOB, the South American business, and FOB, the alleged Cape
Town firm. I shall refer to them indiscriminately as 'the second
respondent'.
It is common ground that the name of the second respondent is an
acronym derived from the surnames of the two former employees in
Argentina, Esteban Furlong and Tomas Ortuno, and that of the first
respondent, Monique Baillache. Indeed, one of the matters that
have
to be determined in this judgment is whether the first respondent was
already involved in the second respondent's business to
the extent
that her office at Camden Street, Cape Town, constituted its place of
business within the territorial jurisdiction of
this court. The first
respondent admits that it is her intention to go into business with
Furlong and Ortuno, but avers that this
was to happen only after the
termination of her employment by the second applicant at the end of
November 2009.
[4]
The third respondent is a South African company to which the
applicants had supplied frozen food products in large volumes for
a
significant period of time. It was one of the applicants' significant
customers in South Africa. The relief sought against the
third
respondent in terms of the notice of motion is to be stood over for
later determination and, by agreement between the parties,
I made an
order to that effect in chambers on 22 February 2010.
[5]
The first respondent gave notice at the end of September 2009 of her
intention to resign from the second applicant. She made it
known at
the time to the applicants' management that it was her intention to
remain actively involved in the frozen meat business
- an area of
enterprise in which she had in fact been engaged for many years
before she was initially employed by the first applicant
in Australia
in 2002. It was agreed that her resignation would become effective at
the end of November 2009, and that she would assist
in an orderly
transfer of her functions on behalf of the applicants in the South
African market. It seems that the directors of the
first applicant
were uncertain whether or not it would be necessary to appoint a
permanent replacement for the first respondent,
or whether the South
African business could instead be conducted remotely from outside the
country.
[6]
As a consequence of what, to it, were disconcerting indications in
the marketplace, the first applicant's management decided to
investigate the operation of the Argentinean office in the period
surrounding the resignation of Furlong and Ortuno. The computers
used
by these two former employees were brought to New Zealand and
forensically examined. The first applicant obtained the results
of
this examination on or about 26 October 2009. The information
indicated that the two employees had been engaged in setting up
and
operating the second respondent for several weeks before their
resignation. Of more central relevance to the current case, it
also
indicated that the first respondent had been intimately involved in
these endeavours and suggested that she had been party in
this regard
to the misappropriation by, or for the benefit of the second
respondent of corporate opportunities that would otherwise
have
accrued to, or been available to the first or second applicants; and
that there had been a misuse of the applicants' confidential
information in this connection.
[7]
Email
correspondence that was found on the Buenos Aires office computers
included material which suggested that the first respondent,
in the
course of 'packing up the office', had made or intended to make new
files and 'spreadsheets of clients' requirements'. The
email to
Furlong and Ortuna, in which this intention was conveyed, proceeded:
'Need
from you the template's (sic) for:- Costing sheets
COS
- you will do COP's in Argentina
Fax
/ email logo
I
am getting my IT guys to come and wipe off all my information before
returning all their equipment'
The
content of the emails uncovered in the forensic investigation showed
on the face of it that the first respondent had been directly
party
to the correspondence in many instances, either as sender or
addressee, and demonstrated her direct involvement in assisting
with
and furthering the establishment and business of the second
respondent.
[8]
The applicants instituted motion proceedings in which they claimed
(i) an Anton Piller order and (ii) interdictory relief directed
at
prohibiting unlawful competition by the first and second respondents
using the applicants' 'confidential information'. Relief
was also
sought against the third respondent, as an alleged joint wrongdoer in
the acts of unlawful competition alleged by the applicants.
The
Anton Piller relief
[9]
As ordinarily happens in such matters, the Anton Piller order was
sought in an application to a judge in chambers, without notice
to
the affected respondents. The claim that the applicants alleged that
they intended to institute against the first and second respondents,
against whom they sought the Anton Piller relief, was described in a
somewhat non-committal fashion in the founding affidavit. The
action
that was in fact later instituted was one for damages for
lostcorporate opportunities, and I have therefore assumed that to
be
the claim that the deponent to the founding affidavit sought to
identify in the founding affidavit as the cause of action in respect
of which Anton Piller relief was sought. In paragraph 11 of the
founding affidavit the deponent confirmed that the purpose of the
Anton Piller application was to preserve and protect evidence in the
claim that the applicants sought to prosecute. The application
was
brought as a matter of alleged urgency in terms of rule 6(12).
[10]
The purpose of the Anton Piller procedure is to secure the
preservation of evidence in proceedings already instituted,, or to
be
instituted by the applica
nt.
1
In
Shoba
v Officer Commanding, Temporary Police Camp, Wagendrift Dam, Maphanga
v Officer Commanding, SA Police Murder & Robbery Unit,
Pietermaritzburg 1995 (4) SA 1 (A); [1995] 2 All SA 300 (A)
, at 15H-I (SALR), the Appellate Division set out the essential
requirements for the establishment of Anton Piller relief. These
requirements were stated by Corbett CJ as follows:
'...what
an applicant for such an order, obtained in camera and without notice
to the respondent, must
prima
facie
establish,
is the following:
(1) That
he, the applicant, has a cause of action against the respondent which
he intends to pursue;
(2) that
the respondent has in his possession specific (and specified)
documents or things which constitute vital evidence in substantiation
of applicant's cause of action (but in respect of which applicant
cannot claim a real or personal right); and
(3) that
there is a real and well-founded apprehension that this evidence may
be hidden or destroyed or in some manner be spirited
away by the time
the case comes to trial or to the stage of discovery.'
[11]
The Anton Piller procedure was not part of the common law.
2
It
has been adopted by the superior courts in South Africa in the
exercise by the courts of their inherent jurisdiction to regulate
their own process in the interests of justice, having regard to
'modern problems in the prosecution of commercial suits'.
3
(The
continued existence of that inherent jurisdiction in the
constitutional era is confirmed in the provisions of s 173 of the
Constitution.)
It is a procedure which has draconian and extremely
invasive consequences for the respondents who are made subject to it.
Its use
has been described, in my view with justification, as an
example of the outer-extreme of judicial power.
4
The
implementation of the search leg of an Anton Piller order is a most
manifest intrusion on the subject's right to privacy under
s 14 of
the Bill of Rights, especially when the search occurs at the
subject's home. A limitation of that right can lawfully occur
only to
the extent permitted in terms of s 36 of the Constitution, which
provides:
'36
Limitation of rights
(1)
The rights in the Bill of Rights may be limited only in terms of law
of general application to the extent that the limitation
is
reasonable and justifiable in an open anddemocratic society based on
human dignity, equality and freedom, taking into account
all relevant
factors, including-
(a
the nature of the right;
(b)
the importance of the purpose of the limitation;
(c)
the nature and extent of the limitation;
(d)
the relation between the limitation and its purpose; and
(e)
less restrictive means to achieve the purpose.
(2)
Except as provided in subsection (1) or in any other provision of the
Constitution, no law may limit any right entrenched in the
Bill of
Rights.'
[12]
It seems well established that the Anton Piller procedure is one that
is reasonable and justifiable in an open and democratic
society based
on human dignity equality and freedom. The sobriquet 'Anton Piller'
derives from the English Court of Appeal's decision
in
Anton
Piller KG v Manufacturing Processes Ltd & Ors
[1975] EWCA Civ 12
;
[1976]
1 All ER 779
,
[1976] Ch 55.
In England the procedure was also
introduced in the exercise by the court of its inherent jurisdiction
to regulate its own process.
5
Although the United Kingdom does not have its own Bill of Rights, it
is a signatory to the European Convention on Human Rights and
has
given statutory effect to the provisions of the Convention in the
Human Rights Act, 1998 (c 42). The Anton Piller procedure in
the
English context was subject to an unsuccessful challenge before the
European Court for Human Rights in
Chappell
v The United Kingdom
[1989]
ECHR 4
;
(1990) 12 EHRR 1.
[13]
In
Chappell
the
applicant, who had been the subject of an Anton Piller procedure,
alleged that its implementation had infringed his rights in
terms of
Article
8 of the ECHR, which in material respects entrenches the rights to
privacy entrenched by s 14 of the South African Bill of
Rights.
Article 8 of the Convention (which in paragraph 2 contains its own
limitation provision analogous to that in s 36 of the
South African
Constitution) provides:
'1
Everyone has the right to respect for his private and family life,
his home and his correspondence.
2
There shall be no interference by a public authority with the
exercise of this right except such as is in accordance with the law
and is necessary in a democratic society in the interests of national
security, public safety or the economic well-being of the country,
for the prevention of disorder or crime, for the protection of health
or morals, or for the protection of the rights and freedoms
of
others.'
[14]
It is unnecessary to describe the detail of the
Chappell
case.
Suffice it to say that the judgment of the European Court describes
the English procedure in a manner that makes it clear that
it was
treated by that court as a procedure equivalent in all its material
characteristics to that adopted and applied in this country.
It is
also relevant to record that the application for and implementation
of the procedural remedy in
Chappell
had
not in all respects been compliant with the established strict
juristic requirements of the court, or the terms of the order
granted.
The identified defects had nevertheless been held by the
English courts to be insufficient to warrant the discharge of the
order.
In its consideration of whether the procedure was 'necessary
in a democratic society...' (within the meaning of Article 8 of the
Convention, quoted above), the European Court decided the issue on an
assessment of the proportionality of the means the procedure
provided
to achieve what was accepted to be a legitimate aim against the
measure of the resultant infringement of the affected basic
human
right . The careful safeguards against abuse and excess which
characterised the procedure - the particulars of the order granted
being determined in each matter by the judge in his or her
discretion, albeit with regard to identified norms
6
- persuaded the court that the procedure satisfied the part of the
legality threshold that it be a necessary intrusion on the right
to
privacy in a democratic society.
[15]
Anton Piller orders are granted by the courts in Australia,
7
New Zealand,
8
Canada
and India,
9
amongst many others, in essentially the same way as in England and
South Africa, and subject to similar requirements and safeguards.
In
most of the jurisdictions in which I have sought comparative
references, Anton Piller relief is now regulated either by statute
or
rules of court.
[16]
As far as I am aware it has never expressly been considered whether
the Anton Piller remedy, being a procedure not provided for
in the
common law, or by statute or the rules of court, and having been
developed by the court in the exercise of its inherent jurisdiction
to regulate its own process, qualifies as 'law of general
application' within the meaning of s 36 of the Constitution. The
issue
was, however, considered in a closely analogous context by the
European Court in
Chappell.
That
court accepted that the procedure developed by the English courts had
become subsumed as part of the law of England and Wales.
In this
regard the Court approached the matter on the basis of Mr Chappell's
contention that the procedure was entirely a judicial
creation and
accepting, for the purpose of deciding the matter, that it had no
basis in statute or the rules of court, as had been
contended by the
UK Government's counsel.
[17]
In dismissing the argument that the remedy was not in accordance with
a 'law' in the proper sense of the word, the court held
(at para. 56)
'...the
relevant
texts and case-law were all published, so clearly no problem arises
concerning the law's "accessibility", as that
expression is
understood in the Court's earlier judgments. As regards
"foreseeability", as likewise understood, the applicant
maintained that the granting of Anton Piller orders and, in
particular, their terms were largely matters of discretionary
practice
and that the state of the law was too "amorphous"
for it to constitute "law" for the purposes of paragraph 2
of Article 8 (art. 8-2). The Court does not share this view. Since
1974 a substantial body of case-law has restated and refined the
principles followed by the English courts as regards Anton Piller
orders (see paragraphs 10-24 above). It is true that some variations
may occur as between the content of individual orders. Nevertheless,
the basic terms and conditions for the grant of this relief
were, at
the relevant time, laid down with sufficient precision for the
"foreseeability" criterion to be regarded as satisfied'.
[18]
There was no challenge in the current matter to the constitutionality
of the court's jurisdiction to make Anton Piller orders;
rightly so
in my view. Allowing for the difference in the language of the
respective provisions, I consider that the analysis by
the European
Court in
Chappell
on
this issue to be of equivalentpertinence in the context of the
application of s 36(1) of the Constitution.
10
I
have considered it appropriate to deal in some detail with the issue
of constitutionality because it bears on the degree of rigour
which I
believe it is incumbent on the courts to apply when it comes to
deciding whether to make or confirm orders sought or granted
in terms
of the procedure. The corollary of the conclusion that Anton Piller
orders are made in terms of 'law of general application',
within the
meaning of s 36(1) of the Constitution, is that such orders are
competent only when they comply with the requirements
of the
postulated law. The fact that the decisions to grant or confirm such
orders are made in the exercise of judicial discretion
should not
obfuscate the fact that, notwithstanding that the law in issue is
judge-made,
11
such discretion is subject to the underlying constraints of legality,
and therefore by no means an unfettered one.
[19]
This matter comes before me in accordance with the practice that
Anton Piller orders granted
ex
parte
are
reconsidered after their execution, and with the opportunity of
hearing the respondent. This feature of the remedy demonstrates
the
provisional nature of Anton Piller orders.
[20]
One of the first respondent's complaints is that the breadth of the
order obtained by the applicants was unduly wide. The effect
of
this, so it wascontended, was that the procedure was utilised by the
applicants in effect as a fishing expedition. The impermissibility
of
the use of the procedure to enable searches to be undertaken to look
for evidence to identify or found a case, as distinct from
the
preservation of
vitally
needed
evidence for use in an already identified claim is fundamental. The
strict limitation of the use of the procedure to the preservation
of
evidence, as distinct from, say, a search for evidence (the so-called
fishing expedition), is a feature that is essential to the
legality
of the procedure within the requirements of s 36(1) of the
Constitution.
An application for authority to search for evidence in the nature of
a fishing expedition should flounder at the first hurdle for
want of
compliance with the specificity requirement mentioned as the second
of the three essential requirements for the grant of
an Anton Piller
order in
Shoba,
quoted
in paragraph
[10]
,
above.
12
The specificity requirement is a material factor in accepting that
the limitation of basic rights inherent in the Anton Piller procedure
is reasonable and justifiable as required by s 36(1) of the
Constitution.
[21]
The order made in this case authorised a search at the first
respondent's office and home for the documentary material described
in annexure A to the order. Annexure A to the order went as follows:
SCHEDULE
1. All
and any lists, spreadsheets or other documents recording and/or
reflecting all and any details of the applicants' suppliers.
2. All
and any lists, spreadsheets or other documents recording and/or
reflecting all and any details of the applicants' customers.
3. All
and any lists, spreadsheets or other documents recording and/or
reflecting all and any details of the second respondent's suppliers.
4. All
and any lists, spreadsheets or other documents recording and/or
reflecting all and any details of the second respondent's customers.
5. All
and any emails, letters, faxes or other written documentation
recording and/or reflecting all and any communications between
the
applicants or either one of them, the first respondent and/or the
second respondent with any of: -
5.1.
the applicants' suppliers;
5.2.
the applicants' customers;
5.3.
the second respondent's suppliers; and/or
5.4.
the second respondent's customers.
6. All
and any emails, letters, faxes or other written documentation
recording and/or reflecting all and any communications between
the
first respondent and/or the second respondent and any/or all of
Messrs Furlong, Ortuno and De Groot.
7. All
and any invoices, waybills, receipts, electronic fund transfers,
delivery notes, shipping documents and/or other similar documentation
recording and reflecting the transaction of business between the
applicants or either one of them, the first respondent and/or the
second respondent with any of: -
7.1.
the applicants' suppliers.
7.2.
the applicants' customers;
7.3.
the second respondent's suppliers; and/or
7.4.
the second respondent's customers.
8.
All
and any contracts concluded between the first and/or second
respondent and the applicants' suppliers and/or customers and/or the
second respondent's suppliers and/or customers.
9. All
and any company or close corporation documentation in relation to the
second respondent, including but not limited to: -
9.1.
any pre-incorporation contracts or agreements;
9.2.
its memorandum and articles of association;
9.3.
any association and/or shareholder and/or membership agreements;
9.4.
relevant extracts from CIPRO.
[22]
There is, in my judgment, considerable cogency in the first
respondent's complaint that the content of annexure A ranged too
wide. I find it impossible to conceive that lists, spreadsheets or
other documents recording and/or reflecting all and any details
of
the applicants' suppliers or customers were material - even less,
'vital' - to the claims that the applicants indicated it was
their
intention to institute based on the alleged misappropriation of
corporate opportunities. The interdict application to prohibit
the
misappropriation of confidential information was already pending,
having been instituted simultaneously with, and in the same
notice
of motion, as the Anton Piller proceedings. There was no indication
given in the interdict application papers of any desire
by the
applicants to obtain discovery - in any event an exceptional
procedure in motion proceedings, requiring the leave of the
court -
and the opportunity to supplement their founding papers on the basis
of any such discovery. The first respondent was at
the time of the
execution of the Anton Piller search an executive director of the
second applicant and it would be neither surprising,
nor in any way
untoward were she to be found in possession of such lists or
spreadsheets. Why it should be necessary or important
to preserve
them for the trial of the applicants' intended claim for damages for
lost corporate opportunities is nowhere explained
in the founding
papers. The only lists and spreadsheets of relevance on the basis of
the founding papers that might have been found
would, in the context
of the indication given in the email the applicants had in their
possession in which the first respondent
stated her intention to
make copies to retain after the effective termination of her
employment, be such as by their nature could
be established to have
been recently made. Even those would be relevant only to support the
interdictory relief sought by the applicants
and, on the material
which the applicants already had, could hardly be categorised as
being vitally important to their claim.
[23]
It is also unexplained why lists of the second respondent's
suppliers and customers in the first respondent's possession would
be necessary evidence in the intended action for lost corporate
opportunities. There is also no, or insufficient, basis in the
founding papers as to the likely existence of such lists or
spreadsheets, or of the need to preserve them.
[24]
Paragraph 5 of the schedule to the order is also extremely widely
framed. It covers a breadth of material of either no, or
only
tangential, relevance to the claim the applicants averred they
intended to advance. Likewise, the material described in paragraph
6
of the schedule to the order is of an ambit far wider than what
would necessarily be relevant or important in the action for
lost
corporate opportunities. There is moreover a range of matters
relating to the first respondent's admitted intention to involve
herself in the business of the second respondent that could quite
feasibly have been addressed confidentially incorrespondence
between
herself and Messrs Furlong and Ortuno with no bearing whatsoever on
the applicants' claim against the first respondent
for damages for
lost business opportunities.
13
The same observation can be made about the wide ambit of material
described in paragraph 7 of the schedule to the order. I also
fail
to understand how the documentation referred to in paragraph 9 of
the schedule is in any way important, never mind 'vital',
to the
applicants' damages claim for lost corporate opportunities. One
looks in vain in the founding papers for an explanation.
Indeed it
is apparent on a careful reading thereof that the applicants failed,
other than by bland reference to the list quoted
in paragraph
[21]
,
above, to identify specific evidence in their founding affidavit
vital to their claim which required preservation by an Anton
Piller
order.
[25]
The inappropriately widely cast net included in the material
described in the schedule to the order resulted in the search
authorised by the order granted by the application judge being, in
my view, in the nature of an impermissible fishing expedition.
It
failed materially to comply with the requirements of specificity and
central relevance contained in the second of the three
requirements
described in Shoba
.
Save in regard to paragraph 6 of the schedule, and then only to a
limited degree, the applicants' counsel did not concede that
the
schedule was subject to the criticism to which I have subjected it.
They submitted in the alternative that if the court nevertheless
held that its content was indeed too wide, the appropriate course at
the return date stage would be to trim its breadth, rather
than to
discharge the order. Counsel submitted that in any event much of the
material described in the schedule was 'proprietary
to the
applicants'. I shall return to this argument presently.
[26]
The first respondent also alleged that the service of the order was
defective; in particular she alleges that annexure A to
the order
(the schedule particularising the subject matter of the authorised
search and seizure operation) was not drawn to her
attention. In my
view this allegation does not bear scrutiny.
[27]
The service and execution of the Anton Piller order occurred, as is
the practice, in the presence of a supervising attorney,
being an
officer of the court with no connection with the applicants and with
no interest in the merits of the dispute. The requirement
that there
be an independent supervising attorney is one of the in-built
protections against abuse of the Anton Piller procedure
and is
intended to afford a measure of protection to the party who is
subject to the invasiveness of a search and seizure order.
In the
discharge of his/her functions in the Anton Piller procedure a
supervising attorney acts solely in the capacity of an officer
of
the court; and is required to account to the court by way of report.
In the current case the supervising attorney was a senior
practitioner with 22 years' experience as a litigating attorney, who
happened at the time of the hearing before me to be serving
as an
acting judge of this court.
[28]
Annexure A is expressly referred to in paragraph 3 of the notice of
motion and in paragraph 2 of the Anton Piller order. Other
paragraphs in the notice of motion and the order mentioned 'the
listed
items'.
It
is only by reference to annexure A that the notice of motion
identifies the so-called 'listed items', being the articles to be
searched for and removed. The notice to respondent which, in terms
of the applicable practice note, is required, together with
the
notice of motion, to be served on a respondent in an Anton Piller
order expressly indicated that the search party was authorised
by
the order to 'search for, examine and remove or copy the articles
specified
in the order'.
It
is not in issue that the supervising attorney read the notice of
motion and the notice to respondent to the first respondent.
This
would have alerted both of them to the existence of annexure A. The
exercise of reading the documents would have been noticeably
nonsensical without reference to the annexure. It is also inherently
most improbable that the supervising attorney would not have
in any
event indicated in the course of his explanation to the first
respondent what the subject matter of the search comprehended,
or
that the first respondent would have consented to the search
proceeding without enquiring and being informed what it was that
was
sought. In this regard, although one may accept that the first
respondent would have been surprised, and no doubt somewhat
flustered by the unexpected intrusion into the privacy of her home,
the search did not commence until about three quarters of an
hour
after the arrival of the search party because of the delay attendant
on the first respondent's initial endeavours to obtain
the presence
of an attorney to represent her. The first respondent therefore had
a considerable time to reflect on the object of
the search before it
commenced.
[29]
The sheriff, who is also an officer of the court with no personal
interest in the matter, has made an affidavit confirming
that
annexure A to the notice of motion was served by him on the first
respondent. An attorney from the supervising attorney's
office who
accompanied the search party to provide a female presence, having
regard to the first respondent's gender, has also
made an affidavit
confirming that the first respondent's attention was drawn to
annexure A.
[30]
In the circumstances I reject the first respondent's allegation that
she was unaware of the content of annexure A to the notice
of motion
before the search occurred.
[31]
The search party authorised by the court to undertake or be present
during the search and seizure operation first attended
at the first
respondent's office in Camden Street, and when being informed by a
domestic worker there that the first respondent
was not present and
probably at her place of residence, it then proceeded to the first
respondent's apartment, where the first
part of the search operation
was carried out. It was only after the completion of the search at
the first respondent's apartment
that the search party, accompanied
by the first respondent herself, returned to the premises where the
office was situated and,
in the presence of an attorney who had by
that stage agreed to represent the first respondent, carried out a
further search.
[32]
Paragraph 2 of the notice to the respondent served on the first
respondent in accordance with the requirements of the applicable
practice note stated, insofar as relevant:
'When
these documents are handed to you, you are entitled, if you are an
employee of the respondents or either one of them or in
charge of
the premises, to contact the respondents or either one of them
immediately and you or the respondents or either one of
them are
entitled to contact an attorney and have him/her come to the
premises to advise you. The attorney must be called and must
arrive
without delay, and the supervising attorney must inform you as to
how long the search can be delayed so as to have the attorney
present....'
The
first respondent contends that the service of the order was not
compliant with the provisions of this paragraph because the
domestic
worker at the office was not afforded the opportunity to contact
,her. There is no merit in this contention. The provisions
of
paragraph 2 of the notice would have applied only in the event of
the search party having sought to carry out the search at
the office
in the first respondent's absence. That did not happen.
[33]
Finally, the first respondent contended that the Anton Piller order
should be discharged by reason of the failure by the applicants
to
make full disclosure in the founding papers. It is trite that there
is a duty on applicant which applies for relief
ex
parte
in
circumstances in which notice would ordinarily be given to the
affected respondents to make full disclosure of any facts that
might, not would, affect the decision of the court whether or not to
grant relief.
14
The first respondent alleges that the applicants were remiss in
failing to draw attention in their founding affidavits to the fact
that she had openly informed them of her intention to remain in the
frozen meat industry after the termination of her employment
and
that she had arranged to meet the managing director of the first
applicant in Melbourne, Australia, in early November 2009
to discuss
the handover of management of the applicants' operation in South
Africa and possible future business cooperation between
the first
respondent and the applicants. The first respondent's complaint is
not persuasive. The disclosure of the information
referred to is
unlikely in my view to have influenced the determination of the
Anton Piller application at its first stage. The
email
correspondence to which the first respondent was a party at
annexures 56 to 74 to the forensic report obtained by the first
applicant on the analysis of the computers from the Argentine office
painted a clear picture of the first respondent's involvement
in
trading by FOB in a manner
prima
facie
inconsistent
with her fiduciary duties to the applicants. The indication that she
had arranged to meet to discuss a future business
relationship after
the termination of her employment would not detract from this
indication of already incurred delictual liability.
It also would
not have detracted from the case made out in the founding papers of
an incentive by the first respondent to conceal
the evidence of such
wrongdoing. A difficult judgment call often falls to be made in
drawing founding papers in applications brought
without notice to
the respondent. While it is true that they should be drawn erring on
the side of greater, rather lesser, disclosure,
I find myself in
agreement with the submission by the applicants' counsel that the
evidence which the first respondent says should
have been disclosed
was not material in the relevant sense. I am not satisfied that the
application judge might have decided the
matter differently had the
evidence been included in the founding affidavit.
[34]
Accordingly, it is only in respect of the ambit of the order being
too wide that a decision must be made as to whether on that
account
it must be discharged. It will be recalled that one leg of the
applicants' counsels' argument on this issue was that the
wideness
of the ambit was excusable because of the applicants' alleged
proprietary interest in much of the material described in
the
schedule. I am not convinced that the argument bears close analysis,
but assuming for present purposes the soundness of counsels'
characterisation of the matter described in the schedule as
proprietary to the applicant, it does not follow that an Anton
Piller
order of the ambit obtained was properly sought or granted.
Indeed the argument suggests a misunderstanding of the nature and
ambit
of the Anton Piller remedy. The
sole
purpose
of the Anton Piller procedure is the preservation of evidence; it is
not a substitute for possessory or proprietary claims
(Memory
Institute SA CC t/a SA Memory Institute v Hansen and others
2004
(2) SA 633
(SCA) at para. [3].)
[35]
In
Audio
Vehicle Systems v Whitfield and Another
2007
(1) SA 434
(C) at para. [21], Bozalek J noted that
'[WJilfulness
or mala fides need not be present to result in the discharge of a
rule nisi where the original order was too widely
framed.'
I
agree; as a matter of policy and as a matter of law. If there is an
insufficiently rigorous enforcement of the requirement that
the
order should beframed with diligent compliance with the specificity
requirement, a tendency will be encouraged for practitioners
responsible for drafting applications for Anton Piller relief to
frame the material to be searched for too loosely, with the belief
that matters can be put right on the return date by requesting the
court to reframe the confirmed order and releasing part of the
material caught in the initially too widely cast net. An indulgent
approach by the courts in this respect would dilute the stringency
that should apply in the grant and consideration of this exceptional
procedural relief (cf.
Knox
D'Arcy Ltd and Others v Jamieson and Others
[1996] ZASCA 58
;
1996
(4) SA 348
(A) ([1996]
3 All SA 669)
at 379E-380B (SALR)). It would
result in an inappropriately lax application of the safeguards a
court is required to consider in
terms of s 36(1) of the
Constitution in determining the ambit of the process infringing on a
respondent's fundamental rights to
privacy and dignity which it is
able properly to permit. A strict approach on the reconsideration of
these orders is also justified
having regard to the circumstances in
which the initial order is frequently taken; that is as a matter of
urgency before an often
heavily burdened duty judge in chambers. It
is due to this consideration that it has more than once been
stressed how onerous is
the responsibility on practitioners in
framing the application to ensure that there is strict compliance
with all the requirements
of the procedural remedy.
15
I
reiterate that, in my view, the ambit of the court's discretion to
overlook or condone non-compliance and irregularity in relation
to
the Anton Piller order is in any event limited in law because it
cannot be exercised to purport to belatedly lend validity to
an
order granted outside the constraints of the applicable law.
[36]
I have nevertheless given consideration to applicants' counsels'
request that I should 'trim down' the order to address any
overreach
in the initially granted relief. In this regard it weighed with me
that, with greater attention to the need for the relief
to be as
narrowly formulated as practical, and with more diligent compliance
with the requirement to explain the materiality of
the evidence
sought to be preserved, the applicants might have been entitled to
some, albeit differently framed, relief in terms
of the Anton Piller
procedure. It also weighed with me that on the basis that
recognition of an entitlement by the applicants to
Anton Piller
relief, albeit on a much narrower basis than that granted, a
justifiable invasion of the first respondent's privacy
could have
resulted, and that it would have occurred in a way not materially
different from that which happened in terms of the
impermissibly
wide order that was obtained. A further consideration that could
weigh in favour of condoning the initial non-compliance,
subject to
a confirmation of the order in restricted terms, is the fact that
the applicants did not, at least directly through
the Anton Piller
order - as distinct from an access order obtained in subsequent
proceedings,
with
which I shall deal later in this judgment - obtain access to any
material seized in the search, and that to that extent the first
respondent's privacy therefore remains intact and susceptible to
protection by a partial discharge of the order. There is furthermore
no indication that the applicants or their representatives acted
mala
fide
in
seeking or implementing the order.
[37]
Against these considerations it is undesirable, as a matter of
policy, that the ambit of Anton Piller orders should be materially
settled on reconsideration, after the execution of orders initially
taken
ex
parte
and
in chambers in an unjustifiably wide form. I have been impelled to
the conclusion, for the reasons discussed earlier, that orders
initially taken in a materially non-compliant form are indeed
unlawfully obtained; and that they are therefore not susceptible
to
confirmation on reconsideration. I have emphasised that the scope
for the exercise of judicial discretion to condone and appropriately
deal with non-compliance with the requirements of the applicable
procedural law in a manner short of discharging the order can
occur
competently only within the framework of the law itself; that is
only if there has been substantial compliance by the applicant
with
the requirements of the procedure, and only if the content of the
order initially obtained did not materially exceed what
the law
permitted. In the circumstances I have found that the Anton Piller
order must be discharged.
[38]
The discharge of the Anton Piller order will not however result, as
would ordinarily be the case, in the release to the first
respondent
of all the material seized in the search. This is for two reasons.
Firstly because the first applicant, by separate
application brought
on notice to the first respondent, obtained an order for the release
to it of an image of a computer hard drive
made as a consequence of
the execution of the Anton Piller order. The discharge of theAnton
Piller order obviously does not undo
the effect of the release
order, which was sought and granted without qualification, and which
was not opposed by the first respondent.
The second reason is that
the first respondent's counsel agreed during the hearing before me
that seized material that the first
respondent accepted was the
property of the applicants could be returned to them. (In this
regard it bears recalling that by the
time the Anton Piller order
came up for reconsideration the first respondent was no longer
employed by the second applicant and
therefore was no longer
entitled to retain possession of the applicants' property against
their desire for its return.) During
argument the first respondent's
counsel did not give me a clear indication of what was comprehended
by the first respondent's consent
in this respect. Through my
registrar I requested a detailed list from counsel, which was
thereafter provided to me by the first
respondent's attorney. The
content of the list provided is set out in the annexure to this
judgment referred to in the relevant
order. Needless to say the
definition of the items that may be released to the applicants in no
way derogates from their right
to assert, by way of vindicatory
proceedings, if so advised, title to any
material
that the first respondent has chosen to retain.
Service
on the second respondent
[39]
Turning now to the interdictory relief sought by the applicants
against the first and second respondents. The first respondent
denies that she is a member of or part of the second respondent. She
also denies that her office address in Camden Street, Cape
Town, at
which service of the application was ostensibly effected by the
sheriff on the second respondent, is the address of the
second
respondent. Despite the clear indications in the email exchanges
between the first respondent and Messrs Furlong and Ortuno
that the
first respondent intended to join forces with them under the FOB
banner and despite the indications in that correspondence
that the
first respondent may have been party to securing corporate
opportunities for the business conducted by Furlong and Ortuno
under
the name of FOB, I am not satisfied on the papers that an office of
FOB has yet been established in Cape Town, or that the
first
respondent's office address has been established as FOB's business
address in this jurisdiction. I am accordingly not satisfied
that
service of the interdict application has been effected on the second
respondent.
The
striking out application by the first respondent based on the
impropriety of the employment by the applicants of evidence obtained
pursuant to the release of material seized in the execution of the
Anton Piller order
[40]
In the circumstances I have entertained the interdict application
only insofar as it concerns the first respondent. It is necessary
in
this connection to refer again at the outset to the application
brought by the applicant for the release of the computer hard
drive
information held by the sheriff consequent upon the execution of the
Anton Piller order. The applicants discovered certain
email
correspondence in the hard drive information which they have
employed as new matter in their replying affidavits in the interdict
application to further support the relief sought by them. The first
respondent has applied to strike out those parts of the replying
papers in which this recently obtained material is utilised.
[41]
In an application, brought on one week's notice to the first
respondent, the applicants sought an order that the sheriff be
authorised and directed to advise the applicants' representatives,
with reference to the copies of the hard drives described in
annexure A4 to the supervising attorney's report in the Anton Piller
proceedings, which copy was a copy of the hard drive on the
second
applicant's laptop previously in the possession of the first
respondent; and authorising the applicants' representatives,
under
the supervision of the sheriff, to make a copy of and take into
possession such copy. This application was brought and determined
before the return date of the Anton Piller order, which, by
agreement between the parties, had been postponed to suit the first
respondent's convenience.
[42]
The reason given in the founding affidavit in support of this
application for extraordinary access to material seized in the
execution of an Anton Piller order was that 'the information stored
on such hard drive [was] essential to the conduct of the applicants'
business in South Africa and the applicants [would] be severely
hampered in the conduct of such business should they have to wait
for the release of copies of the hard drives (sic) in February 2010
or later'. The affidavit proceeded to describe at some length,
and
in great detail, various aspects of the applicants' business
operation that would be prejudiced if access to the information
were
not afforded. The founding affidavit also described how the first
respondent had agreed to return the laptop computer containing
the
information subject to having first removed her 'personal
information'. When the laptop was returned it was discovered,
however,
that all the information on the drive had been
indiscriminately removed. (There were allegations that the
information had been
deleted with a sinister motive. Why that should
have been the case is not apparent to me having regard to the fact
that first respondent
would presumably have been aware that a mirror
image of the entire content of the drive was being retained by the
sheriff, but
nothing turns on that for present purposes.)
[43]
The first respondent did not oppose the application; at least not in
a conventional way. She contented herself with the filing
of a very
brief affidavit, which stated in the material part:
'4.
I confirm..., for the reasons set out in the letter marked "Y",
that I do not intend opposing the above application,
without
prejudice to my rights to deal with the contents of the affidavit
and the relief sought therein, in due course when I file
my opposing
affidavit in the Anton Pillar (sic) application and in the main
application.
5.
I accordingly abide by the decision of the above Honourable Court in
the current application.'
[44]
The letter marked 'Y' referred to in the passage from the first
respondent's affidavit just quoted had been addressed by the
first
respondent's attorney in the Anton Piller proceedings to the
applicants' attorneys of record. Its most material part advised
as
follows:
'3.3
Our client is prepared to consent to an order in terms of prayer
2 of the Notice of Motion, namely that the Sheriff advise
yourselves
(and ourselves) which of the hard drives described in annexure "A4"
is the laptop hard drive which was previously
in the possession of
our client.
3.4 Once
this laptop has been identified, our client is furthermore prepared
to consent to your client obtaining a printout or taking
into its
possession in some other manner that information contained on the
relevant laptop, which falls under schedule "A"
to the
Anton Pillar (sic) order, and is the property of your clients, and
is indeed urgently required by your clients for purposes
of their
business, and is information which is not otherwise available to
them or in their possession.
3.5 Our
client would require the making available of this circumscribed
information to be done once again under the auspices of
the
supervising attorney who supervised the execution of the Anton
Pillar (sic) order, or some other Court appointed supervising
attorney, and in the presence of the writer.
3.6 In
this manner we are of the view that strict compliance with the Anton
Pillar (sic) order could still be preserved, while at
the same time
catering for your clients' alleged needs to have access to their
information urgently for the purposes of conducting
their
business....while ensuring that our client's constitutional right to
privacy.are recognised.'
[45]
It was badly advised of the first respondent not to expressly draw
attention in the body of her affidavit to the content of
the passage
in the annexed letter that I have highlighted above. It is well
established that it is undesirable to expect the court
or the other
litigant to look for the points that a party intends to rely on in
annexures to affidavits. The deponent is required
to identify in the
body of the affidavit what it is in the annexure on which he or she
intends to rely. I was advised by the respondent's
counsel from the
bar that the application for access to the hard drive came before
one of the duty judges on the enlisted motion
roll during the first
week of the December-January recess. It is apparent from the court
file that in addition to the 88 pages
of paper in the access
application, the papers in the Anton Piller application, which
appear at that stage to have run tomore than
850 pages, were also
placed before the judge. It seems probable from the fact that the
order made by the duty judge in accordance
with the draft submitted
to her, which had been prepared in accordance with the notice of
motion, that the learned judge was not
astute to the qualifications
to which the first respondent, albeit rather ineptly, had sought to
indicate any relief granted should
have been made subject. I say
this because the qualifications subject to which the first
respondent elected not to oppose the application
for access were
eminently appropriate.
[46]
The grant of access to the seized material for purposes other than
that intended in terms of the Anton Piller remedy should
have been
approached with considerable circumspection. The obtaining of
unrestrained access in the circumstances to the hard drive
material
undoubtedly occurred in a piggy-backed manner on the Anton Piller
order, even if it is accepted, as I do, that the effect
was
incidental rather than by design. The result demonstrates how
amenable to abuse, in the sense of creating consequences outside
the
limited ambit of the intended procedural relief, the Anton Piller
remedy can be if the utmost care is not taken by all concerned,
particularly legal practitioners, to avoid these.
[47]
The basis given by the applicants for
exceptional
access outside the ordinary procedure under the Anton Piller process
was to obtain information alleged to be essential for the
applicants' business to operate. However, because of an
inappropriately unregulated grant of such access on the basis sought
by the applicants some of the information has ended up being used
for forensic purposes. Had the applicants given any indication
in
their application for access that they wished to use the information
for the purpose for they did employ it in these proceedings,
I have
little doubt the application would have been granted only on
strictly qualified terms. To allow otherwise would significantly
depart from the purpose of the Anton Piller procedure, being the
preservation of the evidence seized in the search for use in the
action which the applicant intended to institute for damages for
lost corporate opportunities.
[48]
I consider in any event that a proper consideration of the content
of the founding affidavit in the access application, assessed
with
regard to the latter's context in the uncompleted Anton Piller
process, shows that the deponent gave the court an implied
undertaking by the applicant not to use the information obtained in
terms of the order for any other purpose than that for which
it was
averred to be sought. The effect is that the applicants were not
entitled to use the material in the manner in which they
did without
first obtaining the leave of the court. Compare the line of English
judgments, summarised in
Crest
Homes plc v Marks
[1987]
1 A.C. 829
([1987] 2 All E.R.1074 (HL)) at 853-854 (1078 All ER),
confirming the rule that a party which obtains documents through
discovery
from another party should not use them for any collateral
or ulterior purpose other than the proper conduct of the action in
the
course of which discovery was given.
(Crest
Homes
concerned
a matter in which the plaintiff sought to use in an action documents
which had been obtained by it pursuant to the execution
of an Anton
Piller order in relation to a different action.). Lord Oliver of
Aylmerton, whose speech set out the conclusions of
the House of
Lords, observed:
'The
purpose of an Anton Piller order is primarily, the preservation of
evidence which might otherwise be removed, destroyed or
concealed
but it operates, of course, also as an order for discovery in
advance of pleadings. It is clearly established and has
recently
been affirmed in this House that a solicitor who, in the course of
discovery in an action, obtains possession of copies
of documents
belonging to his client's adversary gives an implied undertaking to
the court not to use that material nor to allow
it to be used for
any purpose other than the proper conduct of that action on behalf
of his client (see
Home
Office -v- Harman
[1982]
1 All ER 532
,
[1983] 1 A.C. 280).
It must not be used for any
"collateral or ulterior" purpose, to use the words of
Jenkins J. in
Alterskye
-v- Scott
[1948]
1 All ER 469
, approved and adopted by Lord Diplock in
Harman's
case,
p.
302. Thus, for instance, to use a document obtained on discovery in
one action as the foundation for a claim in a different and
wholly
unrelated proceeding would be a clear breach of the implied
undertaking: see
Riddick
-v- Thames Board Mills Ltd
[1977]
QB 881.
It has recently been held by Scott J. in
Sybron
Corporation -v- Barclays Bank Plc
[1985]
Ch 299
- and this must, in my judgment, clearly be right - that the
implied undertaking applies not merely to the documents discovered
themselves but also to information derived from those documents
whether it be embodied in a copy or stored in the mind. But the
implied undertaking is one which is given to the court ordering
discovery and it is clear and is not disputed by the appellants
that
it can, in appropriate circumstances, be released or modified by the
court.'
The
basis of the rule is an implied undertaking to the court to that
effect. It is therefore accepted that in appropriate circumstances
the court may release the party receiving discovery from its implied
undertaking or modify the extent of the undertaking.
[49]
The evidence to which the first respondent objects in the replying
affidavits cannot be said to have been unlawfully obtained.
However,
for the reason given, it was impermissibly employed in support of
the application for interdictory relief. The applicants'
counsel
submitted, however, that, at worst for the applicants, the admission
of the evidence should nevertheless be countenanced
on the same
basis as a court might, in the exercise of its discretion, decide to
admit evidence that had been unlawfully obtained
(cf. e.g.
Protea
Technology and Another v Wainer and Others
1997
(9) BCLR 1225
(W) ([1997]
3 All SA 594
(W) and
Fedics
Group (Pty) Ltd v Matus; Fedics Group (Pty) Ltd v Murphy
1998
(2) SA 617
(C)). I do not agree. It is not apparent to me what
relevance the court's discretion to admit unlawfully obtained
evidence is to
the admissibility of evidence that was lawfully
obtained, but subject to an implied constraint on its use.
[50]
The proper enquiry, in my view, is whether it would be appropriate
for the court to condone the applicants' failure first to
seek the
court's permission to use the evidence; in other words whether to
grant the required permission
ex
post facto.
No
doubt the court can in its discretion grant such condonation in an
appropriate case, but the underlying principle bound up in
what I
have chosen to call the deploying party's 'implied undertaking'
would be rendered nugatory if condonation were granted in
any but an
exceptional case. I do not regard this as such a case; on the
contrary, I consider that to grant condonation in this
matter would
be to send entirely the wrong message on important issues incidental
to the implementation of Anton Piller orders.
A further
consideration that weighs against condoning the breach of the
implied undertaking is that the documentation which the
applicants
have employed in their replying affidavits, while they would be
discoverable in the pending delictual action for damages
for lost
opportunities, would not ordinarily have been so discoverable in the
interdict proceedings being prosecuted on motion.
[51]
The other basis on which the applicants' counsel argued that the
evidence obtained from the hard drive should be admitted was
because
it was proprietary to the applicants, or information in respect of
which the first respondent had in any event been bound
to account to
the second applicant, as her employer. That might be so; but the
constraints applicable as a result of the means
of obtaining the
evidence are the more pressing consideration in the context that I
have just described.
[52]
I am acutely conscious that by excluding the evidence, which on the
face of it is damning of the first respondent's conduct,
I am
perhaps allowing what may appear to be procedural formality to stand
in the way of getting to the truth of the matters in
issue. In my
judgment, however, the importance, as a matter of policy, of
strictly regulating procedure in regard to Anton Piller
orders and
matters closely incidental thereto must, as a matter of general
principle, prevail. (It should be clear from what I
have said
earlier that there is no reason why the applicants should not be
able to apply, notwithstanding the discharge of the
Anton Piller
order, for leave to employ the evidence in the pending delictual
action, should the first respondent not make discovery
thereof in
the ordinary course in those proceedings.)
[53]
The result is that the first respondent's application to strike out
succeeds to the extent to be set out in the order made
at the end of
this judgment.
Interdictory
relief against the first respondent
[54]
Returning then to the interdictory relief that is sought. The order
was eventually sought
16
in the following terms:
That
the first and second respondents be interdicted and restrained from,
in any way, either directly or indirectly, utilising,
copying,
distributing or in any other way disseminating the applicants'
confidential information being:
1. Lists
of the applicants' customers, their contact details and/or their
requirements;
2. Lists
of the applicants' suppliers, their contact details and/or their
requirements.
[55]
It is well established that, absent an enforceable restraint of
trade agreement, it is unexceptionable for an employee after
the
termination of his/her employment to compete with his/her erstwhile
employer and in that regard to utilise the business knowledge
and
experience gained during the period of the previous employment. The
erstwhile employee is also, in general, permitted to canvas
business
from the customers and connections of the erstwhile employer. The
erstwhile employee is not, however, permitted to compete
unlawfully
with his/her former employer. Using the former employer's
confidential information for the purpose of competing in business
with him/her would constitute unlawful competition; and the former
employer would be entitled to obtain an interdict prohibiting
such
conduct.
[56]
What is comprehended by 'confidential information' has been
discussed in a number of well-known judgments (see e.g.
Dunn
and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau
(Cape) (Pty) Ltd
1968
(1) SA 209
(C);
Meter
Systems Holdings Ltd v Venter and Another
1993
(1) SA 409
(W) at 428-430 and_ _ -
Van
Castricum v Theunissen and Another
1993
(2) SA 726
(T) at 731-2) and it is therefore not necessary in that
regard to go back in this judgment over well-trodden ground. Suffice
it
to say that lists of customers and suppliers maintained by a
business are regarded as proprietary to it, and ordinarily treated
as being of a confidential nature in that they are considered to be
specially compiled information that any owner of a business
would
quite reasonably not wish to fall into the hands of a competitor.
The taking away in his/her head by an erstwhile employee
of
information that might be apparent in such list is unexceptionable,
but the taking away of the list itself, or even the special
committing to memory of the content of the list for the purpose of
recreating it for use in competition with the erstwhile employer
is
regarded as wrongful.
[57]
I am satisfied on the papers that the applicants have established a
reasonable apprehension that the first respondent may use
their
customer and supplier lists for the purposes of competing with them.
[58]
I referred in paragraph
[6]
,
above, to an email in which the first respondent informed Mr Furlong
of her intention to make new files and 'spreadsheets of clients'
requirements' in the context of packing up her office in the lead up
to her departure from the second applicant's employ. The first
respondent denied that the email in question reflected any intention
by her to misappropriate information. The relevant passage
of her
answering affidavit went as follows:
"268.
To this end I indicated to Furlong that I would need to start
packing up the office (Applicants having already informed
me that
they would be moving the office of second Applicant to new premises
in Liesbeeck Park.)
269.
The new files I intended making up were for M-Trade (
a
close corporation of first respondent]
to use in its business once it had started trading. These files were
intended to provide for M-Trade's business licences, permits,
SARS
documentation, my registration as an employee of M-Trade etc.
270.
This was done on the expectation that MIL could have accepted my
resignation with immediate effect at the time.
271.
I thought of doing a spreadsheet of clients' requirements which
M-Trade could have used going forward and communicated this
intention to Furlong. I however never proceeded with this.
272.
I indicated in the e-mail of 1 October 2009 that
"my
IT guys"
would
be coming to "wipe off" all my information before
returning all
their
equipment (being that of MIL) to them (i.e. to MIL).
273.
This was intended to refer to my personal information, such as
photographs and private correspondence as well as business
information of M-Trade, which was on the lap top and all other
computer devices.
274.
I point out that I was permitted to use the lap top for personal
purposes.
275.
After my resignation, I was still under the impression that the Acer
lap top (the one I personally used) belonged to me (alternatively
M-Trade). I recall that the insurance policy, although a business
one, was in my name. This is despite whether or not MIL paid
for the
premiums of the insurance policy. Having this doubt, I requested
from MIL an asset register for the business in South Africa.
To date
I have not received one.
276.
Having resigned, and on the basis that I would be required to hand
back my lap top to MIL on termination of my services, (if
it was
proven that the said lap top was indeed MILs) I intended taking
steps to delete my personal information from the lap top,
and other
computer devices and handing same back to my employer with the
employer's information however still on it.
277.
This was also not done - as late as 5 November 2009, more than a
month after the e-mail was sent, when Applicants obtained
and served
their Anton Piller order this had still not been done.
278.
I asked Furlong for templates for the various documents he would
require were M-Trade to do work for him. This was also done
on the
basis of my not being required to work out the notice period which I
had tendered.
279.
Once again, this was not proceeded with."
[59]
In my judgment the explanation offered by the first respondent does
not bear scrutiny and is so untenable that it may safely
be rejected
on the papers. The correspondence discovered on the computers
uplifted from Buenos Aires clearly demonstrates, when
read together,
the intention of the first respondent to join Furlong and Ortuno in
business in competition with the applicants.
The correspondence
clearly indicates an intention that the parties with whom the
individuals concerned had been used to doing business
should be
persuaded that it would be business as usual, just under a different
label. The correspondence also reflects a certain
animus by the
first respondent against the applicants. I have been left in no
doubt that in making or intending to make the files
referred to, the
first respondent intended to copy or draw on documents and
information that the applicants could legitimately
regard as
confidential and containing information concerning their suppliers
and customers.
[60]
The first respondent says that she carries much of this information
in her head (and I have no reason to doubt her on that
score), and
that all of it is publically available. But if it were
all
in
her head, or readily available, she would have no reason to spend
time on the exercise she made mention of in the email.
She
also claims that the information with regard to the requirements of
suppliers and customers is constantly changing and that
anything she
might take away with her would be of only ephemeral benefit to her
in competing with the applicants. If that is so
there is little for
her to fear in the effect of an interdict prohibiting her from using
the lists in question. It does not detract
from the right of the
applicants to protect their confidential information to the extent
they consider necessary. The opportunity
for copying any such
information has probably now passed, but the applicants are
nevertheless entitled to an interdict framed with
regard to the
circumstances that obtained when the application for the interdict
was instituted (cf.
Philip
Morris Inc v Marlboro Shirt Co SA Ltd
1991
(2) SA 720
(A) at 735B-C).
[61]
The first respondent contends that the interdict
sought
is too widely framed and that it will have the effect of preventing
her from exercising her right to compete fairly with the applicants.
I disagree. The ambit of the interdict prevents her from competing
using the applicants' lists of suppliers and customers and the
information appearing on such lists. It does not prohibit her from
trading using information carried away in her head in the sense
mentioned earlier. I did raise with the applicants' counsel the
effectiveness of such an interdict, bearing in mind that the first
respondent could quite legitimately trade with customers and
suppliers on the lists without reference to the lists, but drawing
on her long standing knowledge of and dealing with them during, and
even before, her employment by the first, and then latterly,
the
second applicants. Counsel conceded that difficulties might arise in
proving any breach of the interdict, but pointed out that
interdicts
in like terms had been awarded in other matters. Counsel submitted
that the disincentive presented by the prospect of
committal for
contempt should a breach of the interdict be proven was reason
enough for the applicants to press for the relief
sought. I have
therefore been persuaded to grant the interdict against the first
respondent in the terms sought.
Costs
[62]
In view of the mixed success with which the various applications
before the court have been prosecuted and opposed, it is desirable
that some guidance be given for the assistance of the taxing master
in relation to the costs orders that are to be made. In respect
of
the hearing on 18 February 2010, I consider that it would be
reasonable to apportion time spent as to 40 per cent on the Anton
Piller order; 40 per cent on the interdict application and 20 per
cent on the striking out application. In regard to the preparation
of heads of argument, I consider that it would be reasonable to
apportion the fees allowed in the same proportions.
[63]
In the result the following orders will issue:
(i)
The Anton Piller order made on 5 November 2009 is discharged and,
subject to the provisions of paragraph (ii) of this order,
the
Sheriff is directed to return to the first respondent the material
seized in the execution of the provisional order.
(ii)
Notwithstanding
the discharge of the Anton Piller order, the Sheriff is authorised
to release to the applicants' attorneys of record
those of the items
seized in the execution of the Anton Piller order which are listed
in annexure A to this judgment.
(iii)
It
is recorded that the discharge of the Anton Piller order shall not
affect the applicants' entitlement to retain the information
obtained by them in terms of the order made by this court on 15
December 2009 in the application brought by them under case no.
25726/09, subject thereto that they shall not use such information
for any purpose other than for which it was sought in such
application without the leave of the court first being sought and
obtained.
(iv)
The
costs incurred by the first respondent in opposing the confirmation
of the Anton Piller order are to be paid by the applicants;
liability in respect thereof being joint and several, the one paying
the other being absolved.
(v)
The
following paragraphs of the applicants' replying affidavit (deposed
to by Peter Houlker) are struck out, with costs:
Para.s
7-8; para. 11; para.s 13-16; para.s 18-34; para.s 36-40; para.s
43-46; para.s 49-58; para.s 60-81; para. 91.3; and para.
132.6.
(vi)
The
first respondent is interdicted and restrained from utilising,
copying, distributing, or in any way disseminating any of the
applicants' lists setting out the names of the applicants'
customers, the customers' contact details and/or the customers'
requirements,
or those setting out the names
of the applicants'
suppliers, the suppliers' contact details
and/or the suppliers'
requirements.
(vii)The
first respondent is ordered to pay the applicants' costs of suit in
the interdict application, including the costs of two
counsel, where
such were employed.
A.G.BINNS-WARD
Judge
of the High Court
ANNEXURE
A
1.1
Box
1 - Annexure "A1" of the supervising attorney's report
1.1.1.
All
items
except
for item 2 dealing with:
1.1.1.1.
"travel
1.1.1.2.
credit
card statements
was
personal and will return to MB".
1.2
Box
2
-
Annexure
"A2" of the supervising attorney's report
1.2.1
All
items contained herein
except
the following:
1.2.1.1.
Item 12
-
fax
dated 26 June 2007 - Merchantile
Logistics
(x19
pages);
1.2.1.2.
Item
13
-
black
business card holder;
1.2.1.3.
Item 18
-
email
Fortuno to Monique dated 30 April
2009;
1.3
Box 2 continued
-
annexure
"A3" of supervising attorney's report
1.3.1.
All
items save for
1.3.8
Item 10 -
letter
First Respondent to Geoff Knight dated 30
November
2001.
1.3.9.
Item 12
-
binder
M Trade Consultancy for presentation to
Mathias
International;
1.3.10.
Item 13
-
email
dated 20 October 2006;
1.3.11.
Item 14
-
email
first Respondent to Farrand - 27 October
2006;
1.4
Box 3
-
annexure
"A4" of the supervising attorney's report
1.4.1.
All
documents may be returned.
1.4.2.
The copies of the hard drives may be released by the Sheriff after
the
first respondent has deleted any information thereon considered by
her to be personal to her.
1
See e.g. Van Niekerk and Another v Van Niekerk and Another 2008 (1)
SA 76 (SCA) at para. [10].
2
erebos Food Corporation Ltd v Diverse Foods SA (Pty) Ltd and Another
1984 (4) SA 149 (T).
See Shoba v Officer
Commanding, Temporary Police Camp, Wagendrift Dam, Maphanga v
Officer Commanding, SA Police Murder & Robbery
Unit,
Pietermaritzburg 1995 (4) SA 1 (A) at 8G, with reference to the
discussion in Universal City Studios Inc and Others v Network
Video
(Pty) Ltd 1986 (2) SA 734 (A) at 754E-F of the observation to that
effect by van Dijkhorst J in
3
See Universal City Studios Inc and Others v Network Video (Pty) Ltd
1986 (2) SA 734 (A) at 754E.
4
See the reference by Conradie AJ (as he then was) in Petre &
Madco (Pty) Ltd t/a T-Chem v C Sanderson-Kasner and Others 1984
(3)
SA 850 (W) at 855A - E to Ormrod LJ's remarks in the latter's short
judgment concurring with that of Lord Denning MR in Anton
Piller KG
v Manufacturing Processors Ltd and Others [1976] 1 All ER 779 (CA);
see also Frangos v CorpCapital Ltd 2004 (2) SA 643
(T) ([2004] 2 All
SA 146) at 654C-F (SALR). First respondent's counsel drew attention
to the description by Hoffmann J (as he then
was) of the grant of
such an order in respect of domestic premises as being at 'the
absolute extremity of the court's powers' (Lock
International plc v
Beswick and Others [1989] 1 WLR 1268 (Ch) at 1281).
See the reference by Conradie AJ (as he then was) in Petre &
Madco (Pty) Ltd t/a T-Chem v C Sanderson-Kasner and Others 1984
(3)
SA 850 (W) at 855A - E to Ormrod LJ's remarks in the latter's short
judgment concurring with that of Lord Denning MR in Anton
Piller KG
v Manufacturing Processors Ltd and Others [1976] 1 All ER 779 (CA);
see also Frangos v CorpCapital Ltd 2004 (2) SA 643
(T) ([2004] 2 All
SA 146) at 654C-F (SALR). First respondent's counsel drew attention
to the description by Hoffmann J (as he then
was) of the grant of
such an order in respect of domestic premises as being at 'the
absolute extremity of the court's powers' (Lock
International plc v
Beswick and Others [1989] 1 WLR 1268 (Ch) at 1281).
5
The Anton Piller procedure in England and Wales is now provided for
by statute, in terms of s 7 of the Civil Procedure Act, 1997.
6
At para.s 11-12 of its judgment, the European Court stated in this
regard:
' Over the years, the principles governing the grant and
the terms of these orders have been restated and refined in numerous
judgments.
12. An Anton Piller order will normally contain
restrictive or mandatory injunctions:
(a) prohibiting the
defendant from dealing with materials that are the subject of the
action (for example, "pirate"- that
is, unlicensed or
unauthorized - video tapes);
(b) requiring the defendant to
disclose to the person serving the order the whereabouts of all such
materials and details of suppliers
and customers, and to deliver up
the materials to the plaintiff;
(c) requiring the defendant to
make within a specified time-limit an affidavit containing all the
information to be disclosed by
him under the order;
(d) requiring
the defendant to permit the plaintiff to enter specified premises
for the purpose of searching for and removing specified
items.
As
regards this last injunction, the court will confine the items
specified to documents and materials directly relating to the
action. It will also restrict the time of entry (commonly from 9
a.m. to 6 p.m. on weekdays) and the number of persons who are
to be
permitted to enter (very rarely more than four or five). The latter
will include the plaintiff's solicitor, who is an officer
of the
court (see paragraph 17 in fine below).'
At
para. 17, the Court continued:
'...the
court will nevertheless accede to the application only on terms
which will be incorporated in its written order, in the
form of
undertakings given to the court. These are designed to protect the
position of the absent defendant, counsel for the plaintiff
being
under a duty to ensure that the order contains all proper safeguards
for this purpose. The court determines in its discretion
what
undertakings are to be given, there being no invariable rules or
practice in this respect. Examples are the following, item
(a) being
found in all, and items (b), (c) (i) and (c) (ii) in most cases:
(a)
an undertaking by the plaintiff to pay to the defendant any damages
sustained by him as a result of the making of the order;
(b) an
undertaking by the plaintiff that the order and other relevant
documents, such as the affidavit evidence underlying it, the
writ
instituting the proceedings and the notice of the next hearing, will
be served on the defendant by the plaintiff's solicitors;
(c)
undertakings by those solicitors:
(i) to offer to explain to the
person served, fairly and in everyday language, the meaning and
effect of the order, and to inform
him that he has the right to
obtain legal advice before complying with the order or parts
thereof, provided such advice is obtained
forthwith;
(ii) to
retain in their custody any items taken by or delivered to them
pursuant to the order;
(iii) to answer any question from the
defendant as to whether an item is within the scope of the
order;
(iv) to prepare, before their removal from the premises, a
list of the items taken;
(v) to use any information or document
obtained under the order only in connection with the civil
proceedings in question;
(vi) to ensure that the exercise of
rights under the order remains at all times under the control of a
solicitor.
The significance of the intervention of a solicitor in
this procedure and in the undertakings given is that solicitors are
officers
of the Supreme Court and, as such, subject to its inherent
jurisdiction in disciplinary matters. A failure by a solicitor to
comply
fully with an undertaking given by him personally to the
court in his professional capacity will render him liable to summary
proceedings
for contempt of court with a potential sanction of
imprisonment, a fine or an order to pay compensation or costs. It
will also
constitute
professional misconduct, punishable in
professional disciplinary proceedings by striking off the roll,
suspension from practice
or a financial penalty.'
'...the
court will nevertheless accede to the application only on terms
which will be incorporated in its written order, in the
form of
undertakings given to the court. These are designed to protect the
position of the absent defendant, counsel for the plaintiff
being
under a duty to ensure that the order contains all proper safeguards
for this purpose. The court determines in its discretion
what
undertakings are to be given, there being no invariable rules or
practice in this respect. Examples are the following, item
(a) being
found in all, and items (b), (c) (i) and (c) (ii) in most cases:
(a)
an undertaking by the plaintiff to pay to the defendant any damages
sustained by him as a result of the making of the order;
(b) an
undertaking by the plaintiff that the order and other relevant
documents, such as the affidavit evidence underlying it, the
writ
instituting the proceedings and the notice of the next hearing, will
be served on the defendant by the plaintiff's solicitors;
(c)
undertakings by those solicitors:
(i) to offer to explain to the
person served, fairly and in everyday language, the meaning and
effect of the order, and to inform
him that he has the right to
obtain legal advice before complying with the order or parts
thereof, provided such advice is obtained
forthwith;
(ii) to
retain in their custody any items taken by or delivered to them
pursuant to the order;
(iii) to answer any question from the
defendant as to whether an item is within the scope of the
order;
(iv) to prepare, before their removal from the premises, a
list of the items taken;
(v) to use any information or document
obtained under the order only in connection with the civil
proceedings in question;
(vi) to ensure that the exercise of
rights under the order remains at all times under the control of a
solicitor.
The significance of the intervention of a solicitor in
this procedure and in the undertakings given is that solicitors are
officers
of the Supreme Court and, as such, subject to its inherent
jurisdiction in disciplinary matters. A failure by a solicitor to
comply
fully with an undertaking given by him personally to the
court in his professional capacity will render him liable to summary
proceedings
for contempt of court with a potential sanction of
imprisonment, a fine or an order to pay compensation or costs. It
will also
constitute
professional misconduct, punishable in
professional disciplinary proceedings by striking off the roll,
suspension from practice
or a financial penalty.'
7
For recent examples see Visy Board Pty Ltd & Ors v DSouza &
Ors (No 3) [2008] VSC 572 (18 December 2008) at para. 1; Metso
Minerals v Kalra [2007] FCA 2093; Pathways Employment Services v
West [2004] NSWSC 903; (2004) 212 ALR 140; 186 FLR 330. They are
now
called 'search and seizure orders' in that jurisdiction. The
procedure is in general now governed by the rules of the various
courts in Australia.
For recent examples see Visy Board Pty Ltd & Ors v DSouza &
Ors (No 3) [2008] VSC 572 (18 December 2008) at para. 1; Metso
Minerals v Kalra [2007] FCA 2093; Pathways Employment Services v
West [2004] NSWSC 903; (2004) 212 ALR 140; 186 FLR 330. They are
now
called 'search and seizure orders' in that jurisdiction. The
procedure is in general now governed by the rules of the various
courts in Australia.
8
See Part 33 of the New Zealand High Court Rules in schedule 2 to the
Judicature (High Court Rules) Amendment Act 2008 (New Zealand).
9
See
Taj Television & Anr. v. Mahalakshmi Communications & Ors
Suit 242 of 2004.
10
Cf. President of the RSA v Hugo 1997 (4) SA 1 (CC) (1997 (1) SACR
567; 1997 (6) BCLR 708) at para.s [95]-[102].
Cf. President of the RSA v Hugo 1997 (4) SA 1 (CC) (1997 (1) SACR
567; 1997 (6) BCLR 708) at para.s [95]-[102].
11
See Universal City Studios Inc and Others v Network Video (Pty) Ltd
1986 (2) SA 734 (A) at 754G-755G.
See Universal City Studios Inc and Others v Network Video (Pty) Ltd
1986 (2) SA 734 (A) at 754G-755G.
12
In The MV "Urgup": The Owners of the MV "Urgup"
v Western Bulk Carriers (Australia) (Pty) Ltd 1999 (3) SA 500
(C) at
508 I, Thring J expressed, aptly, in my respectful view, albeit
obiter, the requirement thus: The object of an Anton Piller
order is
not to sanction a search for evidence which may or may not exist and
which may or may not go to found a cause of action,
but to preserve
specific evidence which is known to exist, which prima facie
constitutes vital substantiation of a known cause
of action, and
whose concealment, loss or destruction is feared by the applicant
for the order.'
In The MV "Urgup": The Owners of the MV "Urgup"
v Western Bulk Carriers (Australia) (Pty) Ltd 1999 (3) SA 500
(C) at
508 I, Thring J expressed, aptly, in my respectful view, albeit
obiter, the requirement thus: The object of an Anton Piller
order is
not to sanction a search for evidence which may or may not exist and
which may or may not go to found a cause of action,
but to preserve
specific evidence which is known to exist, which prima facie
constitutes vital substantiation of a known cause
of action, and
whose concealment, loss or destruction is feared by the applicant
for the order.'
13
There would be nothing exceptionable about the first respondent
corresponding with Furlong and Ortuno in respect of any number
of
matters preparatory to her joining them in business after the
effective termination of employment with the second applicant;
cf
Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd 1981
(2) SA 173 (T) at 198 fin-199C.
There would be nothing exceptionable about the first respondent
corresponding with Furlong and Ortuno in respect of any number
of
matters preparatory to her joining them in business after the
effective termination of employment with the second applicant;
cf
Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd 1981
(2) SA 173 (T) at 198 fin-199C.
14
See Frangos v CorpCapital Ltd 2004 (2) SA 643 (T) ([2004] 2 All SA
146) at 649C-E (SALR) for an iteration of the principle in the
context of applications for Anton Piller orders.
See Frangos v CorpCapital Ltd 2004 (2) SA 643 (T) ([2004] 2 All SA
146) at 649C-E (SALR) for an iteration of the principle in the
context of applications for Anton Piller orders.
15
Cf
Memory Institute SA CC t/a SA Memory Institute v Hansen and others
2004 (2) SA 633 (SCA) at para. [3]. In the course of my preparation
of this judgment I came across a note suggesting that the practice
in some Canadian courts requires that save in cases of special
urgency, the application judge before whom an Anton Piller
application is brought in chambers must be afforded at least 48
hours
to consider the matter before an order is sought. In my view
such a practice would be a salutary means to reduce the likelihood
of inappropriately framed orders being given.
Cf
Memory Institute SA CC t/a SA Memory Institute v Hansen and others
2004 (2) SA 633 (SCA) at para. [3]. In the course of my preparation
of this judgment I came across a note suggesting that the practice
in some Canadian courts requires that save in cases of special
urgency, the application judge before whom an Anton Piller
application is brought in chambers must be afforded at least 48
hours
to consider the matter before an order is sought. In my view
such a practice would be a salutary means to reduce the likelihood
of inappropriately framed orders being given.
16
In terms of a draft order handed up by the applicants' counsel
during argument, which in some respects differed from the terms
of
the relief presaged in the notice of motion.
In terms of a draft order handed up by the applicants' counsel
during argument, which in some respects differed from the terms
of
the relief presaged in the notice of motion.