REPUBLIC OF SOUTH AFRICA

SOUTH GAUTENG HIGH COURT, JOHANNESBURG

CASE NO: 30944 / 08

(1)	REPORTABLE: YES / NO
(2)	OF INTEREST TO OTHER JUDGES: YES/NO
(3)	REVISED. 

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                   DATE			        SIGNATURE

In the matter between:

CITYGUIDESA (PTY) LTD				Applicant / Plaintiff

And

KEBRAWARE (PTY) LTD				Respondent / Defendant	

______________________________________________________________ 

J U D G M E N T
______________________________________________________________ 

KGOMO J

INTRODUCTION

[1]	This is an interlocutory application by the applicant who is the plaintiff in the main matter herein against the respondent, who is the defendant in the main matter for an order compelling the respondent to comply with a notice in terms of Rule 35(3) of the Uniform Rules of Court served on the latter on the 16th November 2011.

[2]	The respondent refused to comply with the notice, stating its reasons as being the fact that the documents sought to be obtained are irrelevant to the dispute between the parties.

BRIEF FACTUAL MATRIX

[3]	The applicant and the respondent had concluded an agreement in terms of which the respondent allocated 120 hotel rooms to the applicant for use during the FIFA Soccer World Cup in South Africa for the period 10th June 2010 to 12 July 2010.

[4]	The amount agreed upon per standard hotel room was R2300-00 per night inclusive of VAT at 14% and a 1% Government Tourism Levy, totalling R8 280 000-00.

[5]	The applicant made a payment as deposit of the amount of R5 382 000-00 upfront, leaving a balance of R2 898 000-00 due and payable as per the agreement.

[6]	For one or other reasons the applicant did not take occupation of the rooms agreed upon. According to the respondent, it let out some of them to other guest during the World Cup period and recouped the amount of R2 132 128-04.

[7]	The respondent refuses to refund the deposit paid by the applicant and has counterclaimed for payment to it of the amount of R765 871-96 being the total contract price of R8 280 000-00 less the deposit paid by the applicant of R5 382 000-00 less the amount of R2 132 128-04 it recouped from letting out the rooms.

[8]	In its main suit against the respondent for repayment of the advance payments made on allegations of repudiation, alternatively material breach of the agreement by the respondent, the applicant formulated its pleadings as follows on the material parts thereof:-

“8. Defendant breached the agreement (as amended by the addendum) as follows:-

8.1	The Hotel was not completed and fully functional by 31st May 2010;

8.2	The Hotel was not of a four star grade as per the requirements of the tourism grading council of South Africa by 31st May 2010 or to date.

8.3	Defendant leased out, alternatively attempted to lease out, the rooms in the hotel allocated to plaintiff in terms of the agreement;

9.	Each of the aforesaid breaches constituted a repudiation of the agreement, alternatively, a material breach of a material term thereof.

10.	In consequence thereof the plaintiff cancelled the agreement, alternatively cancels same herewith.”

[9]	The respondent pleaded as follows to the above allegations or averments:-

	“4.	AD PARAGRAPHS 8,9 AND 10 THEREOF.	

The defendant admits that it leased out some of the rooms in the hotel but pleads specifically that it was obliged to do in an attempt to mitigate its damages, which damages arose as a result of the plaintiff’s breach as more fully set out in the defendant’s counterclaim. The remainder of the contents of these paragraphs are denied as if specifically traversed and the plaintiff is put to the proof thereof.”

[10]	The respondent pleaded the mitigation of losses as follows:-

“10.	The defendant mitigated its damages by letting out as many rooms as it could in the time allowed, which rooms were let for a total amount of R2 132 128-04.

[11]	In the course of their exchange of pleadings it thus happened that the respondent refuse to respond to the Rule 35(3) notice, advancing the reason of irrelevancy as aforementioned.

[12]	It is the respondent’s contention and submission that although the documents discovery is sought are alleged to be relevant to the question whether the hotel was completed and operational on 31st May 2010, the true situation was that the documents sought relate in the main to contractual obligations that existed between the respondent and third parties at a time before the agreed completion date of the hotel. That is the reason why it contends and argues that the documents sought cannot reasonably be said to be-

“….potentially advantageous to the applicant’s case or detrimental to the respondent’s case.”

(Paragraph 4.2 of the respondent’s heads of argument.

[13]	The respondent further argues that the employment contracts of its employees are irrelevant to the dispute. Furthermore, documents relating to the performance by the respondent of its contractual obligations towards third parties are irrelevant to the proceedings between the applicant and the respondent, as such entitling it to refuse discovery of the items sought.

[14]	The respondent also charged and argued that some of the items sought, especially items 4 and 10, were described with insufficient particularity to identify them, also justifying its decision to refuse to discover.

THE RULE 35(3) NOTICE

[15]	It is my considered view that a replication of the entire notice in terms of Rule 35(3) in issue here will make it easier for me to juxtapose its terms to any of the parties’ arguments or help in placing aspects in their  proper perspective when I embark on the evaluation of issues herein. It reads as follows:-
“BE PLEASED TO TAKE NOTICE that Plaintiff believes that there may be, in addition to the documents disclosed by Defendant in its Discovery Affidavit, other documents (including copies thereof) which may be relevant to the matters in question in this case in the possession, or which were in the possession, of the Defendant.

Defendant is required to state a time and place when such document (or copies thereof, as the case may be), will be made available for inspection, failing which to state on oath that such documents (or copies thereof as the case may be), are not in its possession or control, in which event Defendant shall state their whereabouts, if known to it.

The documents (or copies thereof, as the case may be) are the following:

a.	Photographs of the hotel relevant to the above matter (“the Hotel”) taken on or about 31 May 2010;

b.	Minutes of site meetings held after 1February 2010 to date;

c.	Snag lists in respect of the construction of the hotel
.
d.	All written communications in regard to the snag lists;

e.	All agreements with the main contractor/s are required;

f.	All agreements with the architects who acted in relation to the renovation of the Hotel is required;

g.	All agreements with the principal agent in regard to the building works at the Hotel;
.
h.	All agreements with the quantity surveyors in relation to the renovation of the Hotel;

i.	All agreements with the project manager(s) in relation to the renovation of the Hotel;

j.	The SAFIA report(s);

k.	All employment agreements with staff to be employed at the Hotel entered into between the period 01January 2010 to 30 September 2010;

l.	The certificate to commence business;

m.	The agreement in respect of public liability insurance;

n.	Invoices certificates and documentation in respect of the construction of the Hotel;

o.	Invoices from the principal agent in regard to the construction of the Hotel

p.	Invoices from the architect in regard to the construction of the Hotel;

q.	Documentary proof of payment of the amounts referred to in the documentation described in the above 3 paragraphs.  

ISSUE(S) IN DISPUTE

[16]	The central issue to be decided is whether or not the documents sought in this notice falls to be discovered and what the law is regarding discoveries such as these. Similarly it may even be necessary to determine when a document falls to be discovered.

EVALUATION

[17]	It is common cause that a court is not bound by what a party to a suit may have regarded or categorised as relevant.

[18]	It is my considered view, in the light of available legal authority that the test as to whether a document falls to be discovered is much wider or generous than the narrow aspect of “relevance” as submitted by the respondent.
[19]	In Rellams (Pty) Ltd v James Brown & Hamer Ltd 1983(1) SA 556(N), Van Heerden J laid out the test as follows at 563H – 564B:-   

“The test for determining this, as laid down in Compagnie Financie’re et  Commerciale du Pacifique v Peruvian Guano Co (1882) 11 CBD55, has often been accepted and applied in our courts. After remarking that it was desirable to give a wide interpretation to the words “a document relating to any matter in question in the action”, Brett L.J stated the principle as follows: “It seems to me that every document relates to the matter in question in the action which, it is reasonable to suppose, contains information which may-not which might- either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in the words ‘either directly or indirectly’ because , as it seems to me, a document can properly be said to contain information which may damage the case of his adversary, if it is a document which may fairly lead him to a train of enquiry which may have either of these two consequences.”

[20]	It is so that the purpose of particulars for purposes of trial is to prevent surprise, inform the other party what is going to be proved to enable that other party to prepare his case and, having regard to the above, not to tie the other party down and/or limit his case unfairly at the trial.

See Thompson v Barclays Bank DCO 1965(1) SA 365 (W) at 369 D-H

Also Evasmus, Superior Court Practice at B1 – B138.

[21]	One of the questions that would on all probabilities play an important role at the main trial in this matter is whether or not the hotel building was completed. An important part of the parties’ agreement was that the hotel had to be fully functional when the applicant’s guests checked in.
[22]	The completion date of 31st May 2010 is in my view relevant in relation to the implementation of the objectives of the agreement between the parties. This, in my view justifies the requests contained in items 5-9 of the notice in terms of Rule 35(3).

[23]	Items 14-17 of the request (notice) deals with invoices in relations to payments to contractors who constructed the hotel as well as the architects. They also are in my view relevant towards proving or disproving the parties case at the trial.

[24]	Item 11, the employment agreements of the hotel staff is relevant as a functional hotel would have had a staff complement. The dates of their engagement and starting of work is relevant towards a just decision of issues in the main trial.

[25]	Items 1,2,3 and 4 of the notice in relation to photographs of the hotel as on 31st May 2010, minutes of site meetings after 1st February 2010, snag lists in respect of construction work and written communications in regard to the snag list are also in my view, relevant.

[26]	It is consequently my considered view and finding that, having regard to the applicant’s particulars of claim as amended and in particular, paragraph 8 thereof as read with paragraph 4 of the respondent’s plea thereto, the denial by the respondent in paragraph 4 of its plea embodies by necessary implication a positive averment that the hotel or parts thereof were complete and fully functional as at 31st May 2010.

[27]	It is my further view and finding that particularity in regard to the status of the hotels as at 31st May 2010 would be strictly necessary for purposes of trial and fall in particular within the ambit which is referred to herein before regarding or relating to informing the other party of what is going to be proved at the trial but no tying the other down and thus limiting his case unfairly.

[28]	Particularity in regard to “some of the rooms” that the respondent had allegedly let out as stated in its plea would also in my view be strictly necessary for purposes of trial and fall within the ambit as referred to above. The respondent is thus duty bound to furnish the particulars sought in the notice.

[29]	It is so that the applicant was not involved in the building process and would thus not have access to documentation relating to that process. The respondent’s refusal to discover in keeping with the notice in terms of Rule 35(3) thus inhibits the applicant’s ability to prepare its case.

[30]	 I have been persuaded by the applicant’s counsel’s submissions in arguments that the agreements between the defendant and the relevant building contractors will contain references to completion dates which would be relevant to the dispute. They are likely to indicate as and when the third parties engaged to complete such work were expected to do so.
[31]	The invoices to contractors and proof of payments to contractors are relevant as they prove compliance or non – compliance by the parties to the terms of the agreement which in turn is relevant to the occupation- readiness of the hotel by the date the applicant was to take occupation.

[32]	It should be borne in mind that apart from this request in terms of Rule 35(3) there was an earlier request for further particulars for purposes of preparing for trial. Some of the items there- in as at now have been repeated in this application. The applicant stated that that request was complied with partially.

[33]	Nevertheless, these two requests are separate and independent from each other. In this application, this court is to decide whether the requested documentation may  advance application’s case or damage the respondent’s case, whether directly or indirectly, or lead one on a train of enquiry in either of these directions.

CONCLUSION

[34]	After listening to arguments and submissions advanced before me in this court, perusing the papers filed of record and considering the matter, it is my considered view and finding that the applicant has made out a case for the grant of the prayers sought in its Notice of Motion.

[35]	I have a Draft Order that was submitted by counsel for the applicant during his submissions or argument. He prayed that should court decide in the applicant’s favour, it can look at this Draft Order and if it is in line with what the court intended handing down as its judgment or ruling, that it be taken in for consideration.

[36]	After perusing the Draft Order I am satisfied that the prayers therein set out are in line with the order I intend granting. I thus accept and incorporate the Draft Order into this judgment, and mark it X, authenticated with my signature and date.

ORDER 

[37]	Order is hereby granted in terms of Draft Order X reproduced under and which is also made an Order of Court

DRAFT ORDER
IT IS HEREBY ORDEREDAS FOLLOWS:
1.	Defendant is ordered and directed to make available for plaintiff’s inspection the documents listed in paragraph 2 to 17 (inclusive) by 8 February 2012 and to allow Plaintiff to make copies thereof; or, in the event that such documents ( or portion thereof) are not in its possession, Defendant shall state on oath by 8 February 2012 which documents (or portion thereof) are not in its possession and, to the extent known to it, shall state their whereabouts.
2.	Failing compliance with the paragraph 1 above, leave is granted to the Plaintiff to apply on the same papers, duly supplemented where necessary, for the dismissal of Defendant’s plea and defence and counter claim and for judgment to be entered against Defendant and favour of Plaintiff with costs.
3.	Defendant is to pay the costs of this application 

	
					__________________________________
							NF KGOMO
					JUDGE OF THE SOUTH GAUTENG HIGH 
						COURT, JOHANNESBURG

FOR THE APPLICANT		:	ADV. A. KANTOR
INSTRUCTED BY			:	RUBENSTEIN ATTORNEYS
						CAPE TOWN
PER (Local Correspondents)	:	JI. AFRIAT ATTORNEYS
						SANDTON
TELEPHONE NUMBER		:	011 784 2496
FOR THE RESPONDENT 		:	ADV. HM VILJOEN
INSTRUCTED BY 			:	CHARL CELLIERS ATTORNEYS
						HYDE PARK, JOHANNESBURG
TELEPHONE NUMBER		:	011 325 4500
DATE OF ARGUMENT		:	01 FEBRUARY 2012
DATE OF JUDGEMENT		:	17 FEBRUARY 2012