Oryx Oil South Africa (Pty) Ltd v Royale Gas (Pty) Ltd and Another (44830/12) [2015] ZAGPPHC 939 (15 December 2015)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

15/12/2015

Case Number: 44830/12

In the matter between:

ORYX OIL SOUTH AFRICA (PTY) LTD APPLICANT

and

ROYALE GAS (PTY) LIMITED 1st RESPONDENT

STEPHANUS JAN NOTHNAGEL 2nd RESPONDENT

Coram: HUGHES J

JUDGMENT

HUGHES J

[1] This is an interlocutory application where the applicant seeks a variation of an order to compel by Chetty AJ, as he then was. Whilst on the other hand, the respondent's seek the dismissal of the main application launched by the applicant, coupled with an order for costs of the main application including costs of this application.

[2] In the main application the applicants seek to interdict and restrain the respondent's from filling and distributing its LPG gas cylinders.

[3] The applicant, then BP South Africa (Pty) Ltd, during the course of the main proceedings was substituted by the erstwhile applicant, Oryx Oil South Africa (Pty) Ltd.

[4] The applicant in its founding affidavit in the main application stated the following at paragraph 11.3:

"The applicant makes use of a distribution network throughout the country and holds numerous contracts for the supply and distribution of LPG with its distributors, including the applicant's fuel station outlets".

[5] During the course of the main application the respondent caused a notice in terms of Rule 35(12) to be delivered to the applicant

requesting to inspect and make copies of all the agreements as was set out in paragraph 11.3. An opposed application to compel in terms of Rule 30A was heard and an order compelling the applicant to allow inspection and coping of its agreements with its distributors was made.

[6] The respondent's attempted to enforce the order, however, the applicant advised that it was considering appealing the order and that,

"To save time in the interim, on the basis that you are entitled, as it is confidential to BP South Africa (Pty) Ltd, your Mr Du Plessis and your Counsel if he is going to inspect, are to furnish us with written undertakings, as per a draft annexed hereto."

[7] The applicant refused to comply with the order in the absence of receiving the written undertakings, even in the face of a threat by the respondent's to return to court for a further application with a punitive cost order. The applicant rubbished the respondent's threat and persisted with its non-compliance of the order. This caused the respondent's to bring an application to have the main application dismissed. The applicant in turn launched a counter-application seeking the variation of the order to compel issued by Chetty AJ.

[8] I propose to first deal with the counter-application for the variation order sought by the applicant. The applicant's 'notice of counter-application' is set out as follows:

"1. Directing the respondents to provide the applicant with written confidentiality undertakings in the terms as contained in annexure "B1" ("the undertakings' ) within five days of the date of the grant of an order herein;

2. Directing that the applicant will only be required to provide the respondent with copies of the distribution agreements between it and its distributors as referred to in sub-paragraph 11.3 of the main application, on receipt of the undertakings;

3. In the event that the respondent fail to provide such written confidentiality undertakings within the required time period, directing them to deliver their answering affidavit, if any within a further period of fifteen days;

4. Ordering the respondents and severally the one paying the other to be absolved, to pay the costs of this counter-application only in the event of opposition thereto."

[9] The applicant in its founding affidavit for the counter-application contends that the order is vague and ambiguous as it "does not identify 'the Interested parties' and fails to stipulate precisely what agreements (as referred to in paragraph 11.3) are required to be provided."

[10] The respondent's argue that the order sought in the counter-application is at variance with that which is stated in the founding affidavit of the counter-application. They argue that it would seem that the order sought intends to supplement the court order and not correct the ambiguity as stated in the founding affidavit. Further, what is evidently lacking is the proposed manner to be adopted to vary and remove the ambiguity complained of.

[11] The respondent's complain that from the applicant's papers it is not evident if they are proceeding by way of Rule 42(1)(b) or the common law. In addition the applicant has not applied for condonation for bringing the application as it should have been brought within a reasonable period.

[12] Dealing with the issue that the counter-application is out of time with no condonation application, I am mindful of the fact that the order was handed down on 24 July 2013 and this counter-application was launched on 24 March 2014, eight months after the applicant became aware of the order.

[13] I agree with the applicant's argument that as this is an interlocutory order and does not have the effect of a final order it may be varied any time before judgment (See Bell v Bell 1908 TS 887). Thus, condonation is not necessary as there is no stipulated time period prescribed and that takes care of the counter-application being out of time.

[14] Regarding the issue of whether the applicant intended to utilise Rule 42(1)(b) or the common law, it was submitted from the bar that reliance was placed on the common law. This is in variance to the heads of argument which places reliance upon Rule 42(1)(b) at paragraph 6.1 thereof.

Be that as it may, it is trite that under the common law once a final order is pronounced by a Judge he/she is functus officio and his/her authority over the matter ceases. It is also required that in the interest of the public, finality needs to be brought to litigation. The exceptions to this general rule were set out in Firestone SA (Pty) Ltd v Genticuro AG 1977 (4) SA 298 (A) reiterated in Zondi v MEG, Traditional and Local Government Affairs and Others 2006 (3) SA 1 (CC) at para [29]:

"These are supplementing accessory or consequential matters such as costs orders or interest on the judgment debt; clarification of a judgment or order so as to give effect to the court's true intention; correcting clerical, arithmetical or other errors in its judgment or order; and altering an order for costs where it was made without hearing the parties. This list of exceptions was not considered exhaustive. It may be extended to meet the exigencies of modern times."

[15] Ngcobo J further held in Zondi v MEG, Traditional and Local Government Affairs and Others 2006 (3) SA 1 (CC) at para [30]:

"Simple interlocutory orders stand on a different footing. These are open to reconsideration, variation or rescission on good cause shown. Courts have exercised the power to vary simple interlocutory orders when the facts on which the orders were based have changed or where the orders were based on incorrect interpretation of a statute which only became apparent later. The rationale for holding interlocutory orders to be subject to variation seems to be their very nature. They do not dispose of any issue or any portion of the issue in the main action."

[16] The applicant acknowledges that the interlocutory order to compel does not satisfy the test for an appealable order. The applicant also acknowledges that it should have raised the confidentiality issue when the Rule 30A application was being heard. Though the courts are reluctant to grant a variation of an interlocutory order, the applicant argues that this is a case where the common law should be developed, as the extent of the variation sought is limited and does not impact on the relief (to compel) obtained by the respondent's. The argument continues that the effect that the variation will have would only be to preserve the confidentiality of the applicant and limit any prejudice that would be suffered if the applicant were to disclose its distributor's agreements.

[17] I have already dealt with the considerations raised by the respondent, save to add, that the respondent's argue that the situation that the applicant is in is a self­ created one, in that when the Rule 30A application was heard they had the opportunity, then, to insist that confidentiality be consider but they failed to do so.

[18] I align myself with what was said by Ngcobo J in Zondi supra that simple interlocutory orders stand to be varied on good cause shown. A court in exercise its discretion, needs to take into account the changing circumstances and modern exigencies and conditions when adapting the common law.

[19] Of interest to me is the argument of the applicant, from the bar, that the issue of confidentiality raised by the applicant stands uncontested. Further, if the order is so varied to take cognisance of the issue of confidentiality, what prejudice will the respondent's suffer, if any? In fact, so their argument goes, the prejudice would be experienced by the applicant instead.

[20] Does 'confidentiality' constitute good cause in the circumstances of this matter to vary the order? I am mindful of the competing rights of the applicant, to protect its property, being the agreements, and the respondent's rights, as a litigant, the right to a free and fair trial. I am also mindful of the fact that Rule 35 does not recognise confidentiality as grounds for refusing the grant and I or compliance of an order under this rule.

[21] I am guided by the dicta and the cases mentioned therein, especially the English cases dealing with a 'balancing act' being adopted, in Crown Cork & Seal Co Inc. and Another v Rheem South Africa (Pty) Ltd and Others 1980 (3) SA 1093 (W). I accept the reasoning that confidentiality must always yield to a litigants right to a free and fair trial and that in considering cases of this nature a 'balancing act' of the rights of the parties needs to be invoked when exercising ones discretion.

[22] This discretion is the inherent power that this court has to regulate its procedures in the interest of justice in terms of section 173 of the Constitution.

[23] The following passage in Crown Cork and Seal at 1098C-G supra gives some perspective of my view in dealing with the two competing rights of the parties and the exercising of my discretion in deciding to allow confidentiality, in this case, to triumph:

"The facts in Riddick v Thames Board Mills Ltd (1977) 3 All ER 677 (CA) do C:tnot require mention. However, this case also mentions the "balancing act" which must be performed between competing public interests (per Lord DENNING MR at 6870 - F). After holding that documents obtained by means of discovery should not be allowed to be used for any ulterior or alien DCpurpose, such as bringing a libel action, Lord DENNING pointed out that were the law otherwise an order for

discovery would be counter productive:

"In order to encourage openness and fairness, the public interest requires that documents disclosed on discovery are not to be made use of except for the purpose of the action in which they are disclosed."

(At 687 i f.)

I agree with that statement.

E:lt is also unnecessary to deal with Halcon International Inc. v The Shell Transport and Trading Co and Others 1979 RPC 97 save to quote the following useful summary (per MEGAW LJ at 121):

"But it is in general wrong that one who is thus compelled by law to produce documents for purposes of particular proceedings should be in F;peril of having these documents used by the other party for some purpose other than the purpose of those particular legal proceedings and, in particular, that they should be made available to third parties who might use them to the detriment of the party who has produced them on discovery."

The question is then whether the English practice may be adopted in South Africa and, if it may, whether it should."

[24] In the applicant's founding affidavit for their counter-application the applicant sets out why they claim confidentiality over the agreements with their distributor. They argue that the respondent, in selling and distributing the LPG gas, competes directly with their legally appointed distributors. The respondent has been observed filling gas in the applicant's cylinders at their business premises where they re-fill and distribute the LPG cylinders.

[25] The applicant further argues that if these agreements are made available the respondent will be able to see the terms and conditions

and the pricing and discount structures between the applicant and the distributors which are applicable to the sell and supply of LPG.

[26] This will strengthen the respondent's position to compete and undercut the applicant thereby putting at risk the applicant's

position as a wholesale supplier as well as the relationship between the applicant and its distributors. This ultimately would also affect the distributors businesses.

[27] Though the respondent does not admit these allegations they are not disputed by the respondent in the answering affidavit to the counter-application. The respondent goes on about the fact that the applicant had not raised confidentiality when it opposed the Rule 35(12) application instead of addressing this issue.

[28] On the one hand I have the rights of the respondent in respect of the order compelling the applicant granted by Chetty AJ and on the other side I have the rights of the applicant to protect the confidentiality of the agreements between the applicant and its distributors.

[29] The situation that brought the parties to court in the first place was the allegation that the respondent was engaged in the business of distributing LPG gas in the applicant's cylinders, whilst the respondent was not a lawful distributor of the applicant. As stated in Crown Cork and Seal supra, the applicant, in peril of the respondent, taking into account their history and the reason for this litigation in the first place, of having the agreements used by the respondent for that other than the trail preparation. This would be seriously detrimental to both the applicant and its lawful distributors.

[30] What prejudice would the respondent suffer if it concludes a confidentiality agreement? The applicant is not saying it will not make the agreements available, in fact it says they are available to you, the respondent, as long as only use the information

therein for the purpose intended. I see nothing amiss with the applicant's request in these circumstances especially as the applicant seeks to interdict and restrain the respondent from distributing its gas unlawfully, in direct competition with the applicant and its distributors.

[31] In these circumstances to serve the interest of justice and ensure that both parties are not prejudiced it would be prudent to allow for a controlled measure of disclosure of the agreements requested.

[32] The applicant seeks that the attorney and the counsel be the only ones who are to have sight of the distributing agreements. I must advise that this type of order has been granted in our courts. (See Supervisors of Bethelsdorp Institute v Port Elizabeth Salt Pan Co 1918 EDL 261).

[33] It stands to reason that as the applicant is successful in the counter­ application the respondent's fail in seeking to have the main application dismissed.

[34] In the circumstances prayers 1 to 3 in the notice of counter- application are duly granted. The application to dismiss the main application is dismissed.

[35] Consequently the following order is made:

[35.1] The order of Chetty AJ of 24 July 2013 is varied and the following paragraphs are add thereto:

(a) The respondents are directed to provide the applicant with written confidentiality undertakings in the terms as contained in annexure B1 within ten days from the date of this order;

(b) the applicant will only be able to provide the respondents with copies of the distribution agreements between it and its distributors as referred to in sub­ paragraph 11.3 of the main application, on receipt of the undertakings;

(c) In the event that the respondents fail to provide such written confidentiality undertakings within the required time period, the respondents are directed to deliver their answering affidavit, if any, within fifteen days after the lapse of time in paragraph [35.1(a)].

[35.2] The application to dismiss the main application is dismissed with costs.

[35.3] The respondents are directed to pay the applicants costs of the counter­ application.

________________________

W. Hughes

Judge of the High Court