Pheiffer and Others v About IT Pretoria (Pty) Ltd and Others (65188/2014) [2021] ZAGPPHC 641 (4 October 2021)

IN THE HIGH COURT OF SOUTH AFRICA(GAUTENG DIVISION, PRETORIA)

REPUBLIC

OF SOUTH AFRICA

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: YES/NO

(3)

REVISED

DATE: 4 OCTOBER 2021

Case Number: 65188/2014

In the matter between

RUDI

PHEIFFER First Applicant

RUDI PHEIFFER N.O. [In his capacity as trustee of the Pheiffer Family Trust] Second Applicant

CORNELIA MARIA PHEIFFER N.O.[In her capacity as trustee of the Pheiffer Family Trust] Third Applicant And

ABOUT IT PRETORIA (PTY) LTD First Respondent

GERHARDUS

MARTHINUS OLIVIER Second Respondent

GERHARDUS MARTHINUS OLIVIER N.O.[In his capacity as trustee of the Reivilo Trust] Third Respondent

MADELEIN OLIVIER N.O.[In her capacity as trustee of the Reivilo Trust] Fourth Respondent

JUDGMENT

JANSE

VAN NIEUWENHUIZEN J

[1] This is an application in terms of rule 35(7) to compel the first

respondent to produce for inspection certain documents that were requested in a notice in terms of rule 35(3) dated 8 July 2020. Although the relief is only claimed against the first respondent, the parties have throughout their correspondence and in the affidavits filed of record referred to “the respondents”. In considering the matter, reference will only be made to the first respondent.

[2] Prior to considering the merits of the application, it is apposite to have regard to the provisions of rule 35(3) of the Uniform Rules of Court, which reads as follows:

“35(3) If any party believes that there are, in addition to documents or tape recordings disclosed as aforesaid, other documents (including copies thereof) or tape recordings which may be relevant to any matter in question in the possession of any party thereto, the former may give notice to the latter requiring him to make the same available for inspection in accordance with subrule (6), or to state an oath within ten days that such documents are not in his possession, in which event he shall state their whereabouts, if known to him.”

Facts

[3] The first respondent failed to comply with the rule 35(3) notice,

which prompted the applicants to launch this application on 20 August 2020.

[4] The first respondent did not oppose the application but provided the applicants with documents in electronic format via a “dropbox”.

[5] There was some to-and-fro between the parties as to when exactly the applicants could access the electronic file.

[6] Be that as it may, the applicants were of the view that the “dropbox” did not contain all the requested documents and filed a supplementary affidavit on 10 March 2021, in which they stated, with reference to the documents requested in the notice of motion, that the first respondent had still failed to make the following information available for inspection:

“4.4.1 Item 2 – All source documents that were used to make entries into the Pastel Evolution General Ledger for the period 1 January 2011 to 31 December 2014;

4.4.2 Item 3 – A complete list of journals together with the relevant descriptive reasons for the processing of the relevant journal for the period 1 January 2011 to 31 December 2014;

4.4.3 Item 5 – The source documents that relate to the transactions and movements of money relative to all natural persons and incorporated entities and/or related parties as appears from the Loan Receivable/(Payable) from the annual Financial Statements from the 2011, 2012, 2013 and 2014 financial years;

4.4.4 Item 6 – The Pastel Payroll database and related source documents for the period 1 January 2011 to 31 December 2014. In particular, a detailed 12-month report in excel format for the relevant time period above is required.”

[7] The matter was enrolled on the unopposed motion roll of 18 March

2021. On 15 March 2021, the first respondent filed a notice of intention to oppose the application and an opposing affidavit. The

opposing affidavit was deposed to by Simone Taljaard, a candidate attorney in the employ of the first respondent’s attorneys of record. In respect of the requested documents, Ms Taljaard stated that the documents were contained in the “dropbox”.

[8] The matter was consequently removed from the unopposed motion court

roll and the respondents were ordered to pay the costs occasioned by the removal.

[9] On or about 15 April 2021 the applicants filed a replying affidavit

in which they:

9.1 pointed out that the first respondent had to date of the commissioning of the affidavit failed to comply with the provisions of rule 35(3);

9.2 denied that Ms Taljaard had the requisite personal knowledge in respect of the requested documents to declare under oath that all the documents are contained in the “dropbox”; and

9.3 stated that the first respondent had failed to make the source documents underlying the financial records available.

[10] This led to further correspondence being exchanged between the parties. On 24 May 2021, the first respondent’s attorneys informed the applicants inter alia that: “…Our client instructed representatives to secure hard copies of the documentation which are not available electronically”. From the aforesaid, it appears that some of the requested documents were not included in the “dropbox”.

[11] In a letter dated 6 June 2021, the applicants were informed that the documents will be available for inspection from 10 June 2021. The respondents further tendered the wasted costs occasioned by the application to compel.

[12] On 22 June 2021 the applicants indicated that after inspection of some of the documents, the following documents remained outstanding:

“5.1 The vast majority of Credit Notes appearing from the statements;

5.2 The journals or their descriptive reasons.”

[13] On 28 June 2021, the first respondent’s attorneys stated that “our client produced the documentation in its possession and under its control”.

[14] This statement did not satisfy the applicants and on 10 August 2021 a notice of the set down of the matter on the opposed motion roll of 31 August 2021 was served on the first respondent.

[15] The first respondent proceeded to file a supplementary affidavit on 19 August 2021. The second respondent was the deponent to the affidavit. The second respondent referred to the correspondence supra and stated that the affidavit is also a formal reply to the rule 35(3) notice dated 8 July 2020.

[16] The second respondent stated under oath that: “I have no further documentation as requested in the Applicant’s notice in terms of rule 35(3) and rule 35(6) dated 8 July 2020 (and served 8 July 2020) under my supervision, in my possession or under my control save for those documents which I have made available for inspection and which my attorneys presented to the Applicants during the dates on which inspection took place.”

[17] The respondents tendered the wasted costs occasioned by the applicants having to launch the application to date of filing of the affidavit.

[18] The affidavit was, once again, followed by further correspondence between the parties. On 20 August 2021, the applicants stated that the journals requested under item 3 of the rule 35(3) notice, to wit:

“A complete list of journals with their relevant descriptive reasons for the processing of the General Ledger for the period 1 January 2011 to 31 December 2014.”

is still outstanding.

[19] The applicants maintained that the journals exist and advised the first respondent to comply with the provisions of rule 35(3) by stating the whereabouts of the journals.

[20] In answer to the aforesaid letter, the first respondent addressed a letter to the applicants on 20 August 2021 stating the following in respect of the alleged outstanding documents:

“4. Credit Notes 1 January 2011 to 31 December 2014

Our client confirmed, again, that the aforesaid credit notes are all uploaded on the Drop-Box file which was recently made available to yourself and your client. In fact, our client confirms that your client accessed the Drop-Box file and had sight of the credit notes. Is this still an issue? If it is we record that the aforesaid credit notes have been made available and your client had access thereto.

5. Journals 1 January 2011 to 31 December 2014

Our client is not in possession of the aforesaid journals and/or ‘their descriptive reasons’.

6. We have stated in the affidavit that the documentation made available by our client is the documentation in our client’s possession and/or under his control.

7. Our client informed us, again, that your client is aware of the fact that there are no “journals” which are a physical or a separate document. As such, there is no possibility of making such a document available for inspection.”

[21] The applicants were not satisfied with the explanation supra and filed a further supplementary affidavit on 24 August 2021. The applicants insisted that the first respondent, in compliance with the provisions of rule 35(3), must state under oath the whereabouts of the requested documents that were not in its possession.

[22] Prior to the hearing of the matter, the parties endeavoured to settle the matter without success.

Discussion

[23] The issue in dispute between the parties involves the recovery of damages, which damages reflect the fair value of 50% shares in the first respondent.

[24] In order to determine the value of the shares, the financial records of the first respondent and more importantly the journals, are no doubt relevant. The respondents did not seriously contend otherwise but allege that there are no such journals or “descriptive reasons”.

[25] The aforesaid denial is contained in the letter of the first respondent’s attorneys dated 20 August 2021 referred to supra. The second respondent, however, did not deal with the existence of the journals or “their descriptive reasons” in his affidavit.

[26] The failure to do so, precludes the court from relying on the principle that the contents of a discovery affidavit are regarded prima facie proof in respect of the existence of documents. [See: Swissborough Diamond Mines v Government of the Republic of South Africa and Others 1999 (2) SA 279 T at 317 E-G]

[27] Once a party has stated under oath that the document does not exist and the opposing party can show mala fides, it is open to the requesting party to refer the issue to oral evidence in accordance with the provisions enunciated in Plascon-Evans Paints Ltd v Van Riebeek Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 A at 634G.

[28] At present and due to the first respondent’s non-compliance with the provisions of rule 35(3), the applicants have been deprived of exercising the aforesaid remedy.

[29] Furthermore and without a proper response to Item 3 of the documents requested in terms of the rule 35(3) notice dated 8 July 2021, I am unable to direct the first respondent at this stage to produce the documents.

[30] In the premises, I propose to postpone the application and direct the first respondent to comply with the provisions of rule 35(3) in respect of Item 3. The haphazard manner in which the first respondent has conducted itself in complying with the applicants’ rule 35(3) notice is the sole reason for the postponement and in order to display my dismay at the first respondent’s conduct a special cost order will follow.

ORDER

[31] In the premises, I grant the following order:

1. The application is postponed sine die.

2. The first respondent is ordered to file, within five days from date of this order, a response to Item 3 of the applicants’ notice in terms of rule 35(3) dated 8 July 2020.

3. Upon receipt of the response, the applicants are granted leave to file a supplementary affidavit, if so advised.

4. The first respondent is ordered to pay the costs of the hearing on 1 September 2021 on an attorney-client scale.

N. JANSE VAN NIEUWENHUIZEN

JUDGE OF THE HIGH COURT OF

SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

DATE HEARD PER COVID19 DIRECTIVES: 1 September 2021

(Virtual hearing.)

DATE DELIVERED PER COVID19 DIRECTIVES: 4 October 2021

APPEARANCES

Counsel for the Applicant

Advocate B. Bergenthuin

Instructed by:

Gerhard Botha and Partners Incorporated

Counsel for the Defendant:

Advocate H.P. Wessels

Instructed by:

Van der Merwe and Associates Incorporated