Swanepoel v Swanepoel and Another (21202/2007) [2008] ZAGPHC 59 (8 February 2008)

IN THE HIGH COURT OF

SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

CASE NO: 21202/2007

DATE: 08/02/2008

UNREPORTABLE

In the matter between:

HENDRIK ARNOLDUS SWANEPOEL Applicant

And

JOHN HENDRIK SWANEPOEL First Respondent

DEREK ROBERT VERSTER Second Respondent

JUDGMENT

LEDWABA, J

[1] This is an application for a declaratory order that notwithstanding the terms of a written agreement between first and second respondents relating to confidentiality, the second respondent should be allowed to depose to an affidavit to support a sequestration application that the applicant intends filing against the first respondent.

[2] Applicant wants second respondent to divulge information pertaining to certain alleged unlawful and criminal conduct of the first respondent.

[3] It is common cause that first and second respondents entered into a written settlement agreement regarding some mining deals that they negotiated. Their agreement contains provisions relating to confidentiality which reads as follows:

‘2.2.6 Confidential Information means:

2.2.6. 1 all and any information of Swanepoel and/or his Associated Persons of whatever nature, whether analogue, digital, graphic, oral or written and any formulae, recipes, specimens, samples, patent applications, inventions, technology, plans, discoveries, approaches, techniques, methods, designs, concepts, flowcharts, other than any of such information and data expressly designed by Swanepoel as non-confidential, which has been disclosed to Verster and/or his Associated Persons by Swanepoel and/or his Associated Persons in the past, regardless of the form in which-it has been disclosed; and

2.2.6.2 all other information and data relating in any way to the markets, customers products, strategies, plans, assets, liabilities, costs, pricing, financial information, reports, management information, revenues, profits, organisations, employees, agents, distributors or business know-how of Swanepoel and/or his Associated persons to Verster or his Associated Persons in the past, regardless of the form in which it has been disclosed by Swanepoel and/or his Associated Persons.’

[4] The first respondent is opposing the application. Mr. Theron on behalf of first respondent submitted that since the applicant has not instituted any proceedings against the first respondent, applicant is essentially seeking from the court an interroqatio in jure which, he submitted, does not form part of South African law and has fallen into disuse. He referred the court to House of Jewels and others v Gilbert and Others 1983 (4) SA 824 (W) and Cerebos Food Corporation Limited v Diverse Food SA (Pty) limited and Another 1984 (4) SA 149 (T). (Cerebos case).

[5] Mr. Du Plessis se, on behalf of the applicant, submitted that applicant has no alternative but to bring this application against the first respondent, by way of application proceedings. He correctly submitted that Rule 38 of the Uniform Rules is only applicable to the securing of the attendance of witnesses at a trial and does not include application proceedings.

[6] The attitude of the second respondent is that he is willing to depose to an affidavit if the court can grant an order that he is lawfully entitled to do so. In essence, second defendant does not want to be held liable for breaching the confidentiality agreement and to expose himself to a possible claim for damages.

[7] Mr. Du Plessis se submitted that the second respondent is in the same position of medical practitioners, bankers, press, psychiatrists, who have a confidentiality relationship with other people. He referred the court to various cases and section 14 of the Constitution Act 108 of 1996 to support his submission for the granting of the order. He argued forcefully, that it was in the public interest that the order prayed for in the Notice of Motion be granted. He further submitted that it is trite law in terms of the law of contract that contracts suppressing prosecution for a criminal offence should be regarded as void. He further .submitted that an adverse order against the applicant may even preclude the applicant from bringing the sequestration application. The bringing of the sequestration application with the evidence of the second respondent included therein, would lead to a just and equitable finding pertaining to that application. He further said if the current application is successful it could probably lead to a saving of costs for all parties concerned.

[8] He further argued that Mr. Theron's submission that the relief sought by the applicant should be classified under the interrogatio in jure principle is misplaced. He argued that the said remedy was utilised for the purposes of obtaining information, evidence and facts before a claim was instituted. He remarked that decided cases of Hart v Stone, Stuart v Ismail, House of Jewels & Gems & Others v Gilbert & Others 1983 (4) SA 824 (W) and the Cerebos case pertaining to this remedy were all decisions before the anton pillar orders were recognised.

[9] He further submitted the Cerebos-food case was partly overturned by the Appellate Division in Union City Studios Inc. vs Motor Video (Pty) Limited 1~86J2)SA 734 (A) when the court recognised the anton pillar 'remedy to protect evidence and to obtain some form of discovery before proceedings were instituted. He clearly stated that the relief sought in applicant's application has been wrongly interpreted by Mr. Theron as an attempt to obtain information, facts and evidence and some sort of discovery before the sequestration application is launched.

[10] His submission was clearly articulated in paragraphs 8-11 of supplementary heads of argument which reads as follows:

‘8. The relief sought by the applicant is a declaratory order pertaining to the question if the second respondent, should he depose to an affidavit as part of the sequestration application to be instituted, will commit a breach of contract, with reference to the confidentiality agreement.

9. It is therefore a remedy pertaining to breach of contract, and a declaratory order sought in respect thereof.

10. There is no attempt by applicant to obtain any information, facts, evidence or documentation from the first respondent.

11. The application is simply based upon the position of the second respondent, and his possible breach of the confidentiality agreement should he depose to an affidavit.’

[11] He further submitted that the court has an inherent jurisdiction to regulate its own proceedings, see Nkwentsha v Minister of Law and Order and Another 1988 (3) SA 99 at 117B-F.

[12] It is trite that the High Court has common law jurisdiction to make a declaratory order in proper circumstances. A declaratory order will not be appropriate if there are other specific statutory remedies or alternative remedy. The fact that applicant's commercial or financial interests are affected will not be sufficient, see Jones and Another v Beatty N.O. and Others 1998 (3) SA 1097 TPD

[13] Applicant has set out in detail his previous relationship with first respondent. He further alleged that first respondent deliberately and fraudulently concealed certain facts from him to deprive him of his right to share in the partnership.

[14] In pages 44-50 of the indexed pages, (paragraphs 66-69) the applicant has set out in detail his claims against the first respondent. The first respondent's, financial circumstances are also mentioned in the papers. In page 60, (paragraph 80), of the founding papers the applicant made the following allegations:

‘In brief, it will be my contention in the papers to be filed in connection with the proposed sequestration application, that the First Respondent has deliberately and fraudulently divested himself of all his assets and that he is, as a result thereof, in fact insolvent. In this regard I respectfully refer to the Annexure “HS46” hereto and the statements made by the First Respondent and his attorney to the relevant creditor, as recently as 2006, regarding his inability to settle in full the debt to the relevant creditor, notwithstanding the Africo transaction.’

[15] If the first respondent was involved in some criminal activities applicant should report the matter to the police. The confidentiality agreement between first and second respondents does not prohibit criminal charges to be preferred. Furthermore, applicant, does not explain why he did not lay criminal charges against him. The second respondent too is not- prohibited-by the confidential agreement to report criminal activities to the police for further investigation.

[16] Having regard to the applicant's claims against the first respondent there is nothing prohibiting the applicant to proceed against the first respondent by action proceedings and later subpoena the second respondent to give evidence.

[17] It is clear that the applicant is not a party to the confidential agreement between first and second respondent and he is not challenging the validity of the agreement between first respondent. The second respondent has agreed, in the said confidentiality agreement, not to disclose certain information regarding him and first respondent to third parties. In my view, the court should not lightly interfere with the lawful terms of a contract that the parties signed.

[18] The applicant wants the court to make a declaratory order that would protect second respondent from a damages claim which the first respondent may institute against second respondent for breach of contract.

[19] In my view, the applicant intended application for sequestration is not necessarily doomed without the second respondent affidavit, especially considering the contents of his founding affidavit.

[20] I therefore make the following order:

Applicant's application is dismissed with costs.

A. P. LEDWABA

JUDGE

OF THE HIGH COURT