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[2015] ZAWCHC 126
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Du Toit and Another v Stellenbosch University and Another (10332/2014) [2015] ZAWCHC 126 (8 September 2015)
THE
HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No: 10332/2014
DATE:
08 SEPTEMBER 2015
In the matter
between
PETER JACOBUS
VILJOEN DU
TOIT
.............................................................
FIRST
APPLICANT
MEDIA 24
LTD
..................................................................................................
SECOND
APPLICANT
And
STELLENBOSCH
UNIVERSITY
…............................................................................
RESPONDENT
JURIE
ROUX
..................................................................................................
INTERVENING
PARTY
Coram: ROGERS J
Heard: 31 AUGUST
2015
Delivered: 8
SEPTEMBER 2015
JUDGMENT
ROGERS J:
Introduction
[1] This is an
application in terms of the
Promotion of Access to Information Act 2
of 2000
to compel the respondent (‘the University’) to
give the applicants access to a forensic report by KPMG allegedly
considered
at a meeting of the University’s Audit & Risk
Committee (‘the Committee’) on 7 November 2013. The
report
deals with financial irregularities involving, among others,
the intervening party (‘Roux’). Roux was employed by the
University in a financial position until 2010. He is currently the
Chief Executive Officer of the South African Rugby Union (‘SARU’).
The alleged financial irregularities concern rugby expenditure.
[2] The University
refused access, relying on
s 40
of the Act. That section provides
that the information officer of a public body (it is common cause
that the University is such)
must refuse access if the record is
privileged from production in legal proceedings unless the person
entitled to the privilege
has waived it. In August 2013 KPMG gave an
oral report to the Committee regarding the financial irregularities
in question. The
University engaged Werksmans as its attorneys and
requested KPMG to furnish its written report, when ready, directly to
Werksmans,
with a view to the latter providing advice and
recommendations in regard to civil claims, criminal prosecution and
employment law
issues. KPMG delivered its draft report to Werksmans
on 30 August 2013. Werksmans thereafter furnished legal advice and
engaged
senior counsel for an opinion.
[3] The reports
considered at the Committee’s meeting of 7 November 2013 were,
according to the University, Werksmans’
advice and counsel’s
opinion, not the draft KPMG report (as the applicants had inferred).
Nothing turns on this, though,
because it is common cause that the
University is in possession of the draft KPMG report and understood
the applicants’ request
to relate to that document.
[4] KPMG delivered
its final report to Werksmans on 12 December 2013. In January 2014
the University gave a copy thereof (excluding
annexures) to SARU on
terms of confidentiality. The latter in turn confidentially gave a
copy to Roux (the University claims that
SARU breached the terms of
confidentiality by doing so).
[5] The applicants’
request in terms of
s 18
is dated 22 November 2013. It was framed in
such a way as to refer, in effect, to the draft KPMG report. Indeed,
the final KPMG
report was not in existence as at 22 November 2013.
The University refused access in a letter dated 20 December 2013.
[6] The present
application was issued in June 2014. The notice of motion sought to
compel the University to provide the applicants
with the record
requested in their request of 22 November 2013. (The applicants did
not know at that stage that the requested record
was a draft report
which had been superseded by a final report.) The University
continued to oppose production of the report, relying
on
s 40.
In
reply the applicants alleged that, if the report were found to be
privileged, the University should nevertheless be ordered
to produce
it in terms of
s 46
because the report’s disclosure would
reveal evidence of a substantial contravention of, or failure to
comply with, the law
and the public interest in disclosure clearly
outweighed the harm contemplated in
s 40.
[7] In August 2014
Roux delivered an application for leave to intervene, which
intervention was granted without opposition on 16
September 2014.
Roux alleged that the KPMG report was indeed legally privileged in
the University’s hands. He also alleged
that both SARU and he
had sought copies of the report with a view to obtaining legal
advice.
[8] The pleadings
closed in October 2014. On 8 April 2015 the matter was set down for 4
June 2015. On 21 May 2015 the University
delivered a notice
withdrawing its opposition, abiding the court’s decision and
tendering the applicants’ costs to
date. The matter was removed
from the roll and re-enrolled for 31 August 2015.
[9] On 22 July 2015
the applicants’ attorneys wrote as follows to the University’s
attorneys regarding their notice
of 21 May 2015:
‘Our
understanding of the notice is that your client has withdrawn its
objection to producing the report, and that if it had
not been for
the fact that the application is still opposed by Mr Roux, your
client would have tendered delivery of the report.
If your client has
not withdrawn its objection, our client will have to address this in
the court, which would of course have cost
implications.
We shall be grateful
if you would kindly confirm that our understanding of your client’s
position is correct.’
[10] The reply from
the University’s attorneys, dated 24 July 2015, was that the
applicants’ understanding of the University’s
position
was correct.
[11] On 28 July 2015
the applicants delivered an interlocutory application, to be made at
the commencement of the hearing on 31
August 2015, for an order
receiving further evidence. This further evidence concerned the
University’s recent issue of summons
against Roux, a copy of
which was attached to the supplementary affidavit. On 18 August 2015
Roux filed an affidavit opposing the
interlocutory application. After
filing a replying affidavit the applicants on 26 August 2015 withdrew
the interlocutory application
and tendered the wasted costs,
apparently with a view to avoiding a postponement.
[12] In the
meanwhile, on 5 August 2015, the applicants gave notice in terms of
rule 28(1)
of their intention to seek an amendment of their notice of
motion so as to include production of the final KPMG report. This had
been foreshadowed in their replying affidavit of 3 September 2014.
Roux delivered a notice of objection. At the start of the hearing
Mr
G Budlender SC, who appeared for the applicants, abandoned the
amendment, again apparently with a view to avoiding a postponement.
Argument then proceeded as to whether the applicants were entitled to
production of the draft KPMG report. Mr Kuschke SC leading
Ms van
Huyssteen appeared for Roux.
Draft KPMG report
privileged?
[13] The argument
focused on whether Roux could assert privilege, having regard to the
University’s withdrawal of its opposition
and its attorneys’
letter of 24 July 2015. However it is convenient first to consider
whether the draft KPMG report was,
subject to subsequent events,
privileged. This was not a question fully addressed in argument.
[14] The form of
privilege with which we are concerned is not legal professional
privilege relating to communications made for purposes
of obtaining
legal advice but the distinct form of privilege now recognised as
so-called litigation privilege (see Competition
Commission v
ArcelorMittal South Africa Ltd & Others
2013 (5) SA 538
(SCA)
paras 20-22; Hoffmann & Paizes The South African Law of Evidence
2nd Ed 678-682). In general, litigation privilege entitles
a person
to refuse to disclose documents, including communications from agents
and third parties, brought into existence at a time
when litigation
is pending or contemplated as likely and for submission to the
person’s lawyer for purposes of obtaining
the latter’s
advice in respect of the pending or contemplated litigation.
[15] Mr Budlender
submitted, with reference to pp 679-680 of Hoffmann & Paizes op
cit and the discussion there of United Tobacco
Companies (South
Africa) Ltd v International Tobacco Co (SA) Ltd
1953 (1) SA 66
(T),
that the scope of litigation privilege in regard to communications by
agents was not altogether settled. It was held by a
full bench in
United Tobacco that ‘a communication between a principal and
his agent in the matter of the agency giving information
of the facts
and circumstances of the very transaction which is subject matter of
the litigation’ is not privileged (at 70E-F
per Clayden J). The
court said that this ‘subsidiary rule’ was ‘really
but an illustration of cases where the
document is regarded as not
made for the purpose of being laid before legal advisers’. This
decision is criticised by Hoffmann
& Paizes, inter alia on the
basis that its English foundations have in that country been called
into question.
[16] However, even
if the ‘subsidiary rule’ articulated in United Tobacco
were correct, it does not find application
here. What seems to have
been contemplated as falling under the ‘subsidiary rule’
are cases where an employee or agent,
engaged to assist his employer
or principal in the conduct of some business, reports to his employer
or principal regarding what
he has done in the transaction of the
business (see the passages from Anderson v Bank of British Columbia
(1878) 2 Ch D 644
cited by Clayden J in United Tobacco at 68H-69B).
Such a report, so the court held, is not privileged simply because
litigation
was contemplated, even though the employer or principal
had in mind to submit the report of his employee or agent to a lawyer
in
respect of contemplated litigation.
[17] This
‘subsidiary rule’ cannot apply to an agent engaged
specifically to undertake investigation and report to his
principal
on the subject matter of contemplated litigation and in circumstances
where the principal intends to submit the report
to his lawyer for
legal advice in relation to the contemplated litigation. This was
recognised by a subsequent ruling made by Clayden
J as the trial
judge in the same litigation. I refer to International Tobacco Co
(SA) Ltd v United Tobacco Cos (South) Ltd
1953 (4) SA 251
(W). There
a private detective, Mr Plumley, had been engaged by the plaintiff,
in advance of litigation, to investigate and report
on matters
relevant to anticipated litigation. Mr Plumley in the course of his
investigations received reports from his own employees
and from third
persons. It was taken for granted on both sides that Mr Plumley’s
report to the plaintiff was privileged.
Clayden J held that what Mr
Plumley’s employees and third persons had told him was likewise
privileged.
[18] In the present
case KPMG was specifically tasked to investigate and report to the
University on matters which were anticipated
to give rise to
litigation and for purposes of the submission of such report to the
University’s lawyers for legal advice
in relation to such
litigation. The draft report was thus legally privileged.
[19] I am not
concerned in these proceedings with any privilege which SARU or Roux
may have in regard to the copy of the final report
in their
possession. The applicants seek production from the University. Mr
Kuschke conceded that the only relevant question is
the University’s
privilege.
Has the privilege
been waived?
[20] Certain grounds
on which a public body may refuse access to a record exist for the
protection of third parties (eg,
ss 34
,
36
,
37
and
38
). The public
body cannot unilaterally waive such grounds of refusal. One can
understand in such cases that the third party might
wish to intervene
to fortify the public body’s grounds of opposition or to
advance grounds of opposition where the public
body fails to defend
court action.
[21]
Section 40
, and
s 67
, which is its counterpart in relation to private bodies, stand
on a different footing. Legal professional privilege and litigation
privilege exist for the sole benefit of the litigant. It can always
be waived (ArcelorMittal supra paras 32-33). It is thus not
surprising that
ss 40
and
67
permit the holder of the privilege to
waive it, in which case the record must be produced. Here the
recipient of the request for
access and the holder of the privilege
are one and the same person, namely the University. The same
principle would, however, have
applied if the request for access had
been directed not to the University but, for example, to its
attorneys. In terms of
s 67
the attorneys would have been bound to
refuse access unless the holder of the privilege, namely the
University, waived it.
[22] In the context
of
ss 40
and
67
I see little scope for legitimate intervention by a
third party (except, of course, where the third party is the holder
of the
privilege and the request has been directed to the latter’s
attorney or agent). In the present case, the privilege exists
solely
for the benefit of the University. The fact that disclosure of the
report might damage Roux’s reputation has no bearing
on
s 40.
Indeed, Mr Kuschke acknowledged that if the University had indeed
waived privilege Roux could not prevent production of the report.
He
has not raised any independent ground of refusal recognised by the
Act
[23] In terms of the
Act, the burden of proving a ground for refusing access rested on the
University. If the University had declined
to oppose the application
and assert privilege, I cannot see on what basis Roux could
legitimately have intervened to assert the
University’s
privilege. The position is now the same as if the University had
never opposed the application, because it has
withdrawn its
opposition.
[24] It is true that
the University, in withdrawing its opposition, added that it would
abide the court’s decision. However,
and bearing in mind that
the onus rested on the University and that it was the only person
with an interest in asserting the privilege,
the withdrawal of its
opposition could not have meant anything other than that it no longer
asserted the privilege. The University
was not merely saying that it
would no longer participate in the proceedings. That would not have
been a true withdrawal of opposition,
because the applicants would
then still have had to incur the costs of appearing and persuading
the court that the report was not
privileged. This would have meant
that the University remained liable for costs, whereas in its notice
of withdrawal it tendered
costs only to the date of the notice.
[25] In my view, the
only reason that the University added, in its notice, that it abided
the court’s decision was because
Roux as an intervening party
still opposed the application. However, the University’s
abiding the court’s decision
could not confer on Roux a legal
interest in the privilege which he did not otherwise have.
[26] Any doubt as to
the University’s intention is put to rest by its letter of 24
July 2015. Mr Kuschke submitted that the
letter could not be regarded
as a waiver by the University of its privilege. He suggested that the
University might have adopted
the attitude it did because it thought
the applicants might succeed on their alternative argument that
access should, in terms
of
s 46
, be ordered in the public interest
despite the existence of privilege. He complained that the University
had not stated under oath
that it had waived its privilege.
[27] In my view, the
University’s motive for withdrawing its objection to the
production of the report is irrelevant. What
is important is that the
University does not object to the production of the report. Insofar
as may be relevant, one can safely
infer that it has reached this
conclusion inter alia after taking legal advice. The only reason that
the report has not yet been
handed over is that Roux claims a right
to assert that the University is not obliged to hand over the report.
I do not think he
has any such right. Put differently, I am quite
satisfied that the University has waived any privilege that may have
existed in
the draft report. It has hitherto refrained from actually
giving the report to the applicants out of respect for the judicial
process
between the applicants and Roux. This display of deference
does not give Roux any right which he did not otherwise have.
[28] The complaint
that the University has not filed an affidavit stating that it has
waived privilege is without merit. The exchange
of correspondence has
been placed before the court by way of an affidavit from the
applicants’ attorney. Roux did not object
to the filing of that
affidavit. The waiver is clear from the correspondence viewed in its
factual matrix.
Conclusion
[29] For the reasons
set out above the application must succeed on the merits. It is
unnecessary to consider the applicants’
alternative reliance on
s 46
(the public interest override).
[30] As to costs, Mr
Kuschke submitted that if I was against Roux I should order the
parties to bear their own costs, bearing in
mind that the
University’s attitude was only clarified in an exchange of
correspondence brought to Roux’s attention
on 20 August 2014
(this was in the replying affidavit to the interlocutory application
which the applicant subsequently withdrew).
However, I do not think
there can have been any real doubt as to the University’s
intentions when it withdrew its opposition.
Furthermore, Roux did not
abandon his opposition upon learning of the exchange of
correspondence. And for the reasons I have explained,
I consider that
his intervention, though not opposed by the University, was
misconceived. I thus see no reason why he should not
be ordered to
pay the costs occasioned by his intervention. The costs caused by the
University’s initial opposition are covered
by its tender in
the notice dated 21 May 2015 and I therefore need make no order in
respect thereof.
[31] The applicants
in accordance with their tender must pay Roux’s costs relating
to the interlocutory application. The applicants
must also pay the
costs associated with the withdrawn
rule 28(1)
notice. Mr Kuschke
submitted that any costs in Roux’s favour should include the
costs of two counsel. In my view, the matter
as a whole did not
warrant the employment of two counsel, and the same applies to
interlocutory matters.
[32] I thus make the
following order:
(a) The respondent
is ordered, within 14 days of this order, to provide the applicants
with copies of all the records requested
in the first applicant’s
request for access to information dated 22 November 2013.
(b) The applicants
are to pay the intervening party’s costs associated with the
interlocutory application dated 24 July 2015
and the
rule 28(1)
notice dated 5 August 2015.
(c) Save as
aforesaid, the intervening party is ordered to pay the applicants’
costs occasioned by his intervention, including
the costs of the
hearing on 31 August 2015.
ROGERS J
APPEARANCES
For Applicants :
Mr G Budlender SC
Instructed by :
Willem de Klerk Attorneys
c/o Smuts
Attorneys
Bank Chambers,
2nd Floor
144 Longmarket
Street
Cape Town
For Intervening
Party : Mr L Kuschke SC & Ms E van Huyssteen
Instructed : by
Erasmus Inc
c/o Rapp van Zyl
Attorneys
2nd Floor, The
White House
34 Bree Street
Cape Town