About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2014
>>
[2014] ZAWCHC 176
|
|
Absa Insurance And Financial Advisers (Pty) Ltd v Moller and Others (20216/2014) [2014] ZAWCHC 176 (21 November 2014)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
number: 20216/2014
DATE:
21 NOVEMBER 2014
In
the matter between:
ABSA
INSURANCE AND FINANCIAL ADVISERS (PTY) LTD
...............
Applicant
And
CHRISTAAN
JOHANNES STEPHANUS MOLLER
.......................
First
Respondent
LIZL
GRIFFITHS
.......................................................................
Second
Respondent
SECURTAS
SHORT TERM BROKERS (PTY) LTD
.......................
Third
Respondent
JUDGMENT
DELIVERED ON 21 NOVEMBER 2014
Before:
The Hon. Mr Justice Binns-Ward
BINNS-WARD
J:
[1]
This matter concerns an application by the
respondents in terms of Uniform Rule 6(12)(c) for the reconsideration
of an order taken
against them in their absence in an urgent
application. The order was of two-fold effect. In the first
part it was a search
and seizure order and in the second part a
prohibitory interdict. The order was obtained by the applicant
pursuant to an application
brought without notice to the respondents.
[2]
The relevant provisions of the order go as
follows:
2.
The Sheriff of this Honourable Court is hereby authorised and
directed, accompanied by a representative of the Applicant and
two
information technology experts nominated by the Applicant to enter
upon the premises situated at Unit 610 …, as well
as the
residential address of First Respondent situated at .. and to attach
and remove from any such premises, or to remove from
any computer
electronic storage device situated at any such premises, any
document, whether in hard copy or digital format, containing
the
names, contact details or identity numbers of any of Applicant’s
clients, or details of policies, policy numbers, policy
expiry dates,
policy premiums or policy commission structures pertaining to any
policies issued to such clients, including any
information or files
sent by Second Respondent as attachments to any of the emails annexed
to the founding affidavit marked “
AH10
” to “
AH25
”
(“
Applicant’s client information”).
3.
Respondents are directed to point out to the Sheriff of this
Honourable Court, and to grant the Sheriff access to, by the
provision
of log in details and passwords, as may be necessary, as
any computers and/or external storage devices and/or cloud-based
storage
system(s) and/or cellular phones and/or iPads in their
possession or under their control at any of the premises stipulated
in paragraph
2 above which may contain any of Applicant’s
client information referred to in paragraph 2 above; (sic)
4.
The Sheriff of this Honourable Court is hereby authorised and
directed. accompanied by a representative of the Applicant and
two
information technology experts nominated by the Applicant, to search
any computers and/or external storage devices and/or cloud-based
storage system(s) and/or cellular phones and/or iPads, at any of
premises referred to in paragraph 2 above, for purposes of
identifying
on such devices Applicant’s client information,
and, upon so identifying, to copy any such information onto an
external storage
devise / devices and thereafter to permanently
delete such information from any of Respondents’ computers
and/or external
storage devices and/or cloud-based storage system(s)
and/or cellular phones and/or iPads upon which the information was
found:
provided that if, on the return day of the rule
nisi
referred to in paragraph 6 below, the Court finds that Applicant
is not entitled to retrieve and retain any of the information copied
onto the external storage device referred to above, then the Sheriff
(who shall retain such devices in safekeeping pending the
return day)
shall immediately take steps to reinstall such information on the
external storage device from which it was retrieved;
5.
Before copying any information onto an external storage device, as
authorised in paragraph 4 above, the technology experts nominated
by
the Applicant shall make a full disk copy of the hard drive of any
computers and/or storage devices and/or cloud-based systems
and/or
cellular phones and/or iPads which are searched pursuant to paragraph
4 above;
6.
That a rule
nisi
be issued calling upon Respondents to show
cause, on 9 December 2014, why an order should not be granted –
6.1
Interdicting and preventing Respondents from utilising, in any manner
whatsoever, any information regarding the insurance or
investment
portfolios, financial needs, analysis, recommendations or records of
advice or current clients of Applicant with whom
Respondents dealt,
in the last 3 years of their employment with Applicant.
6.2
Directing that Respondent shall forthwith return to Applicant any
documents, whether stored electronically or embodied in hardcopy,
obtained or generated by First Respondent, while in Applicant’s
employ, containing lists of Applicant’s clients or
the
personal, insurance or financial details of any such clients.
6.3
….
6.4
….
7.
Before commencing the execution of this order, the Sheriff shall hand
to the Respondents a copy of this order, together with
the Notice of
Motion and founding affidavits herein.
8.
Pending the return day of the aforesaid rule nisi the orders issued
in terms of prayers 6.1 and 6.2 above shall operate as an
interim
order and interdict.
9.
The Respondents are advised that Rule 6(12)(c) provides that a person
against whom an order was granted in this or her absence
in an urgent
application may, by notice, set the matter down for reconsideration
of the order.
[3]
Search
and seizure orders authorise very far reaching invasions of the
respondent parties’ privacy. The embarrassment
that their
execution can occasion, particularly when carried out at a person’s
home or on electronic devices such as personal
computers, tablets and
mobile phones on which, in the modern age, information concerning the
most intimate details of a person’s
life are likely to be
recorded, also carries obvious potentially adverse implications for a
respondent party’s dignity, as
well as the privacy and dignity
of any other persons with whom such party has been in electronic
communication on closely personal
matters. It is thus no cause
for surprise to read that the grant of such orders – of which
Anton Piller orders are
but an example – has been described an
example of the ‘outer-extreme’ (or ‘absolute
extremity’) of
judicial power.
[1]
[4]
Owing
to the infringing effect of search and seizure orders on the
respondent parties’ fundamental human rights, their granting
is
supportable only to the extent that it might be justifiable in the
sense contemplated in terms of s 36 of the Constitution;
see the
discussion in
Mathias
International Ltd and Another v Baillache and Others
[2010] ZAWCHC 68
(8 March 2010), with reference to the consideration
given by the European Court of Human Rights to the legality of Anton
Piller
orders in the context of Article 8 of the European Convention
on Human Rights
[2]
in
Chappell
v The United Kingdom
[1989] ECHR 4
;
(1990) 12 EHRR 1.
[5]
The
compatibility of search and seizure orders with the European
Convention was upheld in
Chappell
in
the main because of the safeguards invariably built in by the courts
to ensure an effective measure of protection to the respondents
in
such matters. It was accepted that the identified safeguards
were so generally established as to constitute a body of
applicable
(albeit judge-made) law.
[3]
That our law in this regard similarly implies as a requirement for
the issue of search and seizure orders the provision of
well-established and internationally applied
[4]
‘built-in protection measures’ was affirmed by the
Supreme Court of Appeal in
Memory
Institute SA CC t/a SA Memory Institute v Hansen and Others
2004 (2) SA 630
(SCA) at para 3. At the same place Harms JA
held that as the judge who had granted the order in issue in that
matter had
not had regard to the well-established precepts and
consequently failed to give effect to their protecting and limiting
effect
in the formulation of the order, he had in the result ‘granted
a rule
nisi
he was not empowered to grant and the setting aside of the rule had
to follow as a matter of course’.
[6]
When
Harms JA noted, in para 2 of the judgment in
Memory
Institute
,
that ‘What is permitted and what not for the grant of
these orders, considering the number of reported judgments on
the
matter, should also be common knowledge’, the learned judge of
appeal was in effect confirming the existence in this
country of a
body of applicable law. In
Mathias
International
supra, it was pointed out that that body of law was ‘law of
general application’ within the meaning of s 36 of
the
Constitution’
[5]
and held
that ‘[t]he 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 court reasoned that the ambit of
any judicial discretion to overlook or condone non-compliance
and
irregularity in relation to the issue of a search and seizure order
was thus 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. This approach is
consistent with that
reflected in para 3 of the judgment in
Memory
Institute
described
earlier.
[7]
In
this division of the High Court express provision is made in the
Court’s Consolidated Practice Notes for the safeguards
that
search and seizure orders must contain and the protections that must
be afforded in the manner in which they are executed.
The
practice note does no more than codify the established principles as
to what is permitted and not permitted, and which, as
Harms JA
recorded, should be well-known to legal practitioners.
[6]
The subheading to the relevant practice note is ‘“
Anton
Piller
”
Orders’. When the order obtained in this matter was
taken, the explanatory note submitted by the applicant’s
counsel (different counsel appeared before me in the current
proceedings) to the judge stated that the application was not an
application for an Anton Piller order. The note read as follows
in relevant part:
Applicant
contends that the information misappropriated is its property, and
that it is entitled to the return thereof. The
relief it seeks
in this this application is not an Anton Piller order, but an order
for the attachment of Applicant’s property.
The relief is
based on the decision of the Full Bench in
Cerebros Food
Corporation Ltd v Diverse Foods SA Ltd
1984 (4) SA 149
(T) at
164E.
An
Anton Piller order, properly so-called, is a search and seizure order
directed at authorising and facilitating the search for
and seizure
of evidence with the object of enabling it to be preserved for use in
pending or contemplated litigation; cf.
Shoba v Officer
Commanding, Temporary Police Camp, Wagendrift Dam, and Another;
Maphanga v Officer Commanding, South African Police
Murder and
Robbery Unit, Pietermaritzburg, and Others
1995 (4) SA 1 (A).
An Anton Piller order, in the true sense, is not a vindicatory
remedy.
[8]
It seems to me that counsel who appeared
for the applicant when the order was taken was misled by the
subheading to Practice Note
35. It is quite clear, if proper
regard is had to paragraph (1) of the Note, which provides
In
all applications brought
ex parte
for an order to allow the
entry and search of premises (an ‘
Anton Piller’
order
), a draft order substantially in accordance with
Form C
in the Schedule hereto (varied or amplified to the extent necessary
in particular circumstances) is to be attached.
that
it regulates search and seizure orders in general and not just Anton
Piller orders properly so-called. The order sought
was one that
would allow the entry and search of premises. Therefore it was
immaterial that the basis for seeking the order
in the current matter
was apprehended to be vindicatory.
[9]
The respondents’ counsel argued that
the seeking and apparent granting of the order on the grounds that it
was a vindicatory
or quasi-vindicatory entitlement was legally
incompetent and that this in itself afforded a complete and
sufficient reason to set
the order aside. The context of the
application was the alleged filching by the respondents of
information from the applicant,
which the latter claimed to be
proprietary. The first respondent had been employed by the
applicant as a representative in
respect of the marketing of
insurance policies. It was alleged that in that context the
first respondent was placed in possession
of information concerning
clients serviced by the applicant, the products purchased by them and
the terms on which the policies
involved had been procured.
This and other related information would be capable of being put to
use by the respondents in
competition with the applicant. The
first respondent’s contract of employment with the applicant
contained a covenant
in restraint of trade. The use by the
respondents of the applicant’s confidential information for the
purpose of competing
against it would also, in any event, amount to
unlawful competition entitling the applicant in principle to
appropriate delictual
relief. Relying on the judgment of
Serrurier AJ in
Waste-Tech (Pty) Ltd v
Wade Refuse (Pty) Ltd
1993 (1) SA 833
(W), the respondents’ counsel argued that so-called proprietary
information of the sort which the applicant purported to
be entitled
to vindicate in the contemplated search and seizure operation was not
property in the true sense and thus not legally
susceptible to
vindicatory relief.
[10]
While Serurrier AJ was probably correct, in
my respectful opinion, in holding that information is, in general,
not property amenable
to vindication, I am in agreement with the
argument advanced by the applicant’s counsel, with reference,
amongst other matters,
to the full court’s judgment in
Cerebros
Food Corporation
, that search and
seizure relief of the type sought by the applicant in the current
case is nevertheless competent if it is shown
to be required to
protect the applicant against harm that it is able to show that it is
likely to suffer as a consequence of the
use of the information by
the respondents in the context of unlawful competition, or breach of
contract. The judgment in
Cerebros
Food Corporation
in point of fact
serves as authority for the point, if such were required.
[11]
I do not think that it matters that the
applicant labelled its claim as vindicatory. If the founding
papers are read in a
businesslike way it is quite evident that the
applicant’s concern is not to regain possession of any property
in the sense
of a thing, but rather to enforce its contractual rights
in terms of the covenant in restraint of trade and to protect its
position
against what it alleges have been acts of unlawful
competition by the respondents. I am thus not persuaded by the
respondents’
counsel’s argument that search and seizure
relief was notionally incompetent on the facts alleged by the
applicant. To the
extent that the judgment in
Waste-Tech
suggests otherwise, I respectfully disagree with it.
[12]
In the circumstances the determination of
whether the respondents’ contention that the search and seizure
order should be
revoked on reconsideration turns on the question of
the effect of the non-compliance with the procedural rules and
principles generally
applicable to search and seizure order.
The degree of non-compliance was extensive.
[13]
There was no provision for a ‘supervising
attorney’. A ‘supervising attorney’ is an attorney
unconnected
with the litigants who is appointed to supervise the
fairness and propriety of the execution of the order and whose
functions include
advising the respondent party of his or her rights
before the search and seizure order is carried out. Another
important
function of the ‘supervising attorney’ is to
provide a report to the court on the execution of the order. In
ordinary matters a return by the sheriff of the court would suffice,
but by establishing the requirement of a report from a qualified
and
experienced legally qualified professional, the courts have marked
their recognition that special safeguards and protections
must attend
the execution of orders of the draconian and exceptional nature of
search and seizure orders.
[14]
The order did not make any provision for a
list or inventory to be made of matter deleted from the respondents’
electronic
devices. The absence of any such provision
potentially prejudiced an effective reconsideration of the order on
the return
day. It is trite that search and seizure orders
obtained without notice are provisional in nature and subject to
confirmation
or revision. The respondent party’s position
is potentially prejudiced if the issue of what has been removed (or
in
this case deleted) has not been accurately recorded by an
independent party who has been charged with keeping such a record for
the purpose of the subsequent stage(s) of the proceedings.
[15]
The order also made no provision for the
respondents to be advised that they were entitled to contact an
attorney and have him come
to the premises within a reasonable time
to advise them and to be informed by the supervising attorney as to
how long the search
could be delayed so as to have the attorney
present. Its terms furthermore failed to state that until the
attorney, if called,
arrived or until the delay allowed for him to
arrive had passed, the respondents need not comply with any part of
the order, except
to allow the supervising attorney, the sheriff and
the other persons named in the order to enter the premises and to
take such
steps as, in the opinion of the supervising attorney, were
reasonably necessary to prevent any prejudice to the further
execution
of the order.
[16]
The respondents’ counsel pointed out,
with justification in my view, that the order was also very widely
worded and embraced
information that the respondents might
legitimately have on their electronic devices about the applicant’s
former clients.
The restraint of trade provision in the first
respondent’s contract of employment did not prohibit him from
accepting approaches
from former clients provided that such
approaches were initiated by the client and not solicited by the
respondent.
[17]
The extent of the non-provision of the
established safeguards and protections required in respect of the
issue of search and seizure
orders resulted in something that
purported to permit an unjustifiable infringement of the respondents’
constitutional rights.
The granting of an order with that
effect was beyond the court’s powers and thus unlawful. The
applicant’s counsel
did not argue strongly against that
conclusion. In an able and eloquently advanced argument the
applicant’s counsel
however submitted that the order might be
suitably amended or pruned down on reconsideration rather than
revoked. Acceding
to that argument would, in my view, go
against the approach indicated in the
Memory
Institute
and
Mathias
International
judgments, in which it
was held that an order that had been beyond the judge’s power
to grant cannot be salvaged and must
be set aside. The matter
that is before the court is the reconsideration of an existing
order. If it should not have
been given in the sense that its
granting was outside the judge’s powers it should be revoked.
It is not amenable to
amendment because it was legally void.
These considerations certainly apply in respect of the search and
seizure order.
[18]
Even were the non-compliant features of the
order not as flagrant as they are, and their voiding effect
consequently perhaps open
for argument, it is established policy that
the courts look warily at attempts to salvage orders of a highly
invasive or oppressive
nature taken in secret and in haste without
notice to the effected party. In that regard I need do no more
than to repeat
what I stated in
Mathias
International
supra, at para 35:
In
Audio Vehicle Systems v Whitfield and
Another
2007 (1) SA 434
(C) at para.
[21], Bozalek J noted that ‘[W]ilfulness 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 be framed 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. …..
(Footnote omitted.)
Although
those remarks were made in the context of an Anton Piller matter
properly so called, they apply equally in respect of any
search and
seizure order obtained without notice to the respondent party.
[19]
In the context of what I consider to be the
indicated stringent approach to enforcing propriety in these matters
it is not necessary
for me to consider the suggestion by the
applicant’s counsel that I should weigh calling for evidence on
affidavit to inform
me whether, and if so, how, the order might have
been executed so as to determine the degree to which the respondents
may or may
not in fact have been prejudiced. It would not make
any difference to the result. I doubt in any event that, save
in
exceptional circumstances, an applicant should be permitted after
the event to repair the damage when it has overreached itself
in
obtaining relief of this nature.
[20]
The applicant’s counsel further
contended that even were the search and seizure order revoked, the
court should not revoke
the rule
nisi
acting as an interim interdict in terms of paragraphs 6.1 and 6.2 of
the order. He justifiably distinguished that part of
the order
from the search and seizure relief. He also quite correctly
conceded, however, that there had been no justification
in proceeding
for the interdictal relief on an
ex
parte
basis. The rule
nisi
procedure should only be used in matters in which immediate
interdictal relief is required if the applicant is not to suffer
irremediable
harm. I had occasion, quite recently, to rehearse
the applicable principles in
Arvum
Exports (Pty) Ltd and Others v Costa NO
[2013] ZAWCHC 176
(20 November 2013). As pointed out in that
judgment, the proper course in a case like this in which it is
alleged that relief
is required urgently is to avail of the procedure
described in
Gallagher v Norman's
Transport Lines (Pty) Ltd
1992 (3) SA
500
(W), which, to a material extent was informed by the approach
stated in
Republikeinse Publikasies
(Edms) Bpk v Afrikaanse Pers Publikasies (Edms) Bpk
1972 (1) SA 773
(A) at 781H - 782G. That that should have been
the approach adopted by the applicant is confirmed in the terms of
Practice
Note 34(2) of this Court.
[21]
While I accept that a different approach
might be taken on reconsideration to the second part of the order, I
am not persuaded in
the exercise of my discretion to do so. The
entire order is reflective of the misdirected approach taken by the
applicant
to the institution of these proceedings. A firm line
is necessary in order to encourage proper compliance with the
indicated
procedures. Those procedures are in place in the
interests of justice and the more efficient operation of the courts.
Litigants should be aware that non-compliance with them will not
lightly be condoned. The respondents should have been afforded
an opportunity, even on truncated time limits, to put up an answer
before interdictal relief was considered. I am thus not
persuaded to allow what I have called the second part of the order to
stand.
[22]
The respondents sought a punitive costs
order. I would be inclined to make such an order only if
persuaded that the procedures
of which the applicant availed had been
resorted to
mala fide
.
That was not the case in my view. It seems clear to me
from the terms of the explanatory note presented to the duty
judge
who made the order that the applicant’s legal representatives
allowed themselves to be misled into understanding that
the nature of
the search and seizure order sought by the applicant put the matter
outside the reach of the principles applicable
in respect of Anton
Piller orders and believed that what they contended to be the
vindicatory nature of the application excluded
the necessity for the
safeguards and protections ordinarily required for search and seizure
orders to be put in place. In
this regard they were badly
misdirected. I consider it to be punishment enough that the
order be revoked and the applicant
ordered to pay the respondents’
costs incurred in the rule 6(12)(c) application.
[23]
In the result the following order is made:
1.
The order made
ex
parte
in case no. 20216/14 on 11
November 2014 is revoked.
2.
The applicant is ordered to pay the
respondents’ costs of suit in the application in terms of rule
6(12(c), including the
costs of two counsel.
A.G.
BINNS-WARD
Judge
of the High Court
Date
of hearing: 20 November 2014
Date
of judgment: 21 November 2014
Applicant’s
counsel: A. Freund SC
Applicant’s
attorneys: Cliffe Dekker Hofmeyr Inc. (Cape Town)
Respondents’
counsel M. Janisch
A.
Morrissey
Respondents’
attorneys Bowman Gilfillan Inc. (Cape Town)
[1]
See the reference by Conradie AJ (as he then was) in
Petre
& Madco (Pty) Ltd t/a T-Chem v Sanderson-Kasner and Others
1984 (3) SA 850
(W) at 855A - E to Ormrod LJ’s remarks in his
concurring judgment in
Anton
Piller KG v Manufacturing Processors Ltd and Others
[1975] EWCA Civ 12
;
[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) and the
description by Hoffmann J (as he then was) in
Lock
International plc v Beswick and Others
[1989]
1 WLR 1268
(Ch) at 1281
of the grant of such an order in respect of domestic premises as
being at ‘the absolute extremity of the court’s
powers’
.
[2]
Article 8 is the provision of the Convention that entrenches the
right to privacy.
[3]
The Anton Piller procedure in England and Wales is now regulated for
by statute, in terms of s 7 of the Civil Procedure
Act, 1997
[4]
Cf.
Mathias
International
supra
at para 15 and the comparative law references in the notes thereto.
[5]
Mathias
International
supra
at para 18.
[6]
PN
35. The text of the PN is published in Van Loggerenberg et al
(ed)
Erasmus,
Superior Court Practice
at D3-7-D3-8.