---

REPUBLIC OF SOUTH AFRICA

THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO 35516/2016

NOT REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

REVISED.

7/6/2018

In the matter between:

AON SOUTH AFRICA-

and

GORDON, GERALD                                                                                      1^st Respondent

GORDON, NATASIA                                                                                    2^nd Respondent

LATERAL UNISON INSURANCE BROKERS (PTY) LTD                            3^rd Respondent

TIGIZA HOLDINGS (PTY) LTD                                                                     4^th Respondent

SIMPSON CONSULTING (PTY) LTD                                                            5^th Respondent

DEPARTMENT OF EDUCATION WESTERN CAPE                                    6^th Respondent

 

JUDGMENT

Headnote

An Anton Piller had been executed on a group of companies – a former employee of the applicant had left it to join one of the companies and had emailed a large cache of applicant’s documents – the application was to order a seizure of documents and interdict the respondent companies from use thereof

On the facts, only two documents belonging to the applicants were uncovered – the bulk of the cache was not proven to have been received – nonetheless, complicity is receipt of confidential information was established – order granted as prayed.

 

Sutherland J:

Introduction

[1] This matter is the last chapter in a saga that commenced with the execution of an Anton Piller order by the applicant on the first to fifth respondents in October 2016.

[2] The relief sought now, after abandoning a prayer for an interdict against competition, is thus:

“1. The First, Second, Third, Fourth, Fifth and Sixth Respondents are hereby directed to forthwith hand over and deliver to the Applicant any document and or electronic record which belongs to the applicant pertaining to any of the Applicant’s clients’ listed in Annexure “X” to this notice of motion, including Nama Khoi Municipality;

2. The First, Second, Third, Fourth and Fifth Respondent are directed to destroy any and all remaining or other documents and or electronic records which belongs to the applicant pertaining to any of the Applicant’s clients’ listed in Annexure “X” to this notice of motion including Nama Khoi Municipality;

3. The First, Second, Third, Fourth and Fifth Respondent are interdicted and restrained from making use of any document, electronic record or information which belongs to the applicant pertaining to any of the Applicant’s clients’ listed in Annexure “X” to this Notice of Motion including Nama Khoi Municipality;

4. The First, Third, Fourth and Fifth Respondent shall jointly and severally pay the Applicant’s costs on the scale between Attorney and Client including the costs pertaining to Part A of the Notice of Motion.”

[3] The heart of the matter is whether the third respondent, (Unison) has in its possession documents belonging to the applicant and if so, are those documents confidential to the applicant. The other juristic respondents are related companies of Unison. The sixth respondent played no role in the matter.

[4] The first respondent, Gordon, is an ex-employee of the applicant. The improprieties of Gordon, in attempting to misappropriate the applicant’s documentary information upon his resignation on 1 August 2016 and taking up employment with Unison are not in dispute. Whether he succeeded in so doing is in dispute, as is the confidential status of what has been proven to have been transmitted by Gordon to the respondents. Gordon’s skullduggery was revealed when an email he sent on 1 August 2016, the date of his resignation, to his private email and to his wife’s email address was discovered on 4 October 2016. He had attached to these emails a vast quantity of documents, all being the property of the applicant and concerning its business with municipalities. It covered the 16 municipalities that Gordon serviced on behalf the applicant and many others. This fact was the trigger for the Anton Piller application.

[5] The timing of Gordon’s departure is said, with good reason, to be significant. During 2017, the applicant alleges about 70% of its municipality clients would be going out to tender for the forthcoming three-year period; ripe pickings indeed.

[6] The present debate focused on four documents:

6.1. The email from Gordon’s work computer to himself and his wife. (The plunder mail)

6.2. The ‘forecast for the next three years’. (The forecast).

6.3. The premium summary spreadsheet related to NKM (PSS)

6.4. “X”, being a list of applicant’s customers in the Local Government sphere. (“X”)

 

A brief account of the execution of the Anton Piller order and intervening litigious events

[7] An order was granted on 11 October 2016. The execution occurred at four places.

[8] On 17 October and 20 October inspections were conducted. During the inspection of what had been seized, among other documents, in electronic form, among the respondents’ data, the forecast and the PSS were found. The plunder email was not found on the respondents’ data-bases, nor the vast data reflected in the plunder email.

[9] On 23 January 2017, the respondents put up an answering affidavit. It alluded to various documents. This provoked a rule 35(12) demand to produce them. The demand was not met.

[10] The applicant then brought a compelling application. That was heard on 19 September 2017. (Astonishingly, a judgment in the applicant’s favour was granted only on 19 April 2018 about 8 months later. No reason is given in the judgment why a judgment in an interlocutory matter would take that long to decide)

[11] In any event during this period the respondents did give some of the material sought in the rule 35(12) demand, from time to time. None of this data constituted  documents belonging to the applicant.

[12] A replying affidavit was then filed on 14 December 2017. None of the documents thus disclosed are of interest save in one respect; ie what was not included, being copies of documents similar in import to PSS, an aspect to which I shall return.

[13] The matter then came to this court for determination on 5 June 2018. The events described explain the delay. The applicant was criticized for not expeditiously seeking final relief. The circumstances recounted, in my view, do not give rise for criticism on that aspect of the matter.

[14] The relief sought initially included an interdict against competition to cover the two-year period from the date of the judgment but was abandoned at the hearing.

The current controversy

The Plunder email

[15] The dispatch is common cause. The respondents say that it was not received by Gordon as his gmail box could not accommodate the bulk. Further, his wife at his request, deleted it. She received an additional email relating to a potential tender, which she also deleted.

[16] Is there no evidence that the data in this category was found on the computers of Unison and its filials or that they were formerly in possession thereof.

The omission of the Nama Khoi municipality (NKM) from “X”, and the application to amend “X”.

[17] “X” is a list composed for the litigation based on routinely gathered information for which Gordon was responsible to assemble. It omits reference to NKM which had been a client of applicant from July 2014 up to June 2017; the tender for the period of three years thereafter, has yet to be awarded. This, says the applicant, was a culpable error attributable to Gordon. Because it was omitted from “X” the Anton Piller application could not apply to any documents relating to NKM. Notwithstanding that, such a document, the PSS, was taken from Rianna Munnik, a director of Unison, during the seizure exercise. Strictly construed, this ought not to have been allowed. The supervision of the inspection in this respect failed to confine the exercise to the identified documents. To address this gap an application to amend “X” to add NKM has been made. The application is opposed.

[18] The main application is premised, obviously, on the founding papers and the special remedy of an Anton Piller order. Such orders are to be executed strictly within their bounds.[1] As a matter of policy an ex post facto expansion of its scope is undesirable. However, can the unusual situation which prevails here wherein an “illegitimate” seizure took place be remedied? Is it sensible in the circumstances to ignore it?  It is plain from the papers that NKM was a client and its omission from “X” is perforce an error. (Whether the PSS is a document of the applicant is disputed, an aspect addressed elsewhere.)

[19] Where an Anton Piller order has been executed more broadly than its terms permit, is it ever appropriate for an applicant to disclose that fact to a court and endeavor to regularize the seizure by an amendment to the scope of the order ex post facto? It seems to me this question can only usefully be assessed in a fact-specific situation. A balancing of prejudice to the respective litigants ought to be assessed.

[20] In this case, the scope of the order was determined by reference to a schedule listing the applicant’s clients. The innocent inadvertent omission of a client’s name is a hazard in the preparation of such an urgent application. It may seem picky to resist an amendment under such circumstances, but any relaxation must be subject to the policy norms prevailing. Only in circumstances where no prejudice to the raided litigant, which arises from circumstances unrelated to the dispute between the litigants, exists, could such an amendment be seriously considered.

[21] In this case a document, supposedly implicating Unison in being improperly in possession of the applicant’s property, which but for the inadvertent omission of one client’s name, was improperly seized. In my view, the purpose for which the Anton Piller order was granted was not thereby thwarted, nor did the trespass put Unison in any greater peril than was contemplated by the aims of the order. It is thus, in such circumstances, proper to consider a grant the amendment.

[22] The ex post facto finding of fact that the improperly seized document was indeed the property of the applicant weighs heavily in finding that in this particular case, an amendment is appropriate, and is so ordered.

The provenance of the premium summary spreadsheet (PSS)

[23] The PSS was found on Riana Munnik’s computer. She is a director of Unison based in Johannesburg. The case for Unison is that the document was part of a suite of documents that emanated from Guardrisk, an insurer, as part of a quote sent by it to Unison. The explanation is false.

[24] On the probabilities, the PSS, is indeed, a document of the applicant.  Several induciae support that inference.

[25] The quote from Guardrisk consists of five pages, paginated as being 1 of 5, 2 of 5 and so on. These page references do not appear on the PSS. Prima facie, the PSS is a document not in the sequence and must have been prepared afterwards.

[26] Guardrisk, by way of the affidavit of Dean Naidu, repudiates the PSS as a document generated by Guardrisk and thus could not have been sent to Unison by Guardrisk. Moreover, Naidu acknowledges the quote relating to NKM which he specially says was not accompanied by the PSS.

[27] Despite a perusal of other documentation sent by Guardrisk to Unison, no other example of such a document as the PSS exists. If the PSS was a routinely generated document, there would have been others.

[28] Moreover, Guardrisk had no need to provide such a document; the quote is comprehensive. The true significance of the PSS is not the summary of figures that indeed can be related back to the data submitted in Guardrisk’s quote, but rather the workings as to percentages for discounts, and an additional table consolidating the workings to propose what a final sum could be. These are extrapolations of interest to the broker not the insurer. It is these extrapolations that mark it as a working document distinct from the quote.

[29] Is it confidential? The answer is self-evident. A working document whose function is to massage the insurers quoted prices with possibilities to put to a client is indeed confidential. An argument was advanced that the data is in effect accessible to all, but this is simply incorrect.

The Forecast

[30] Unequivocally, the forecast is a document prepared by Gordon based on data he had from applicant’s sources.

[31] Gordon sent it to the respondents on 12 July 2016. It was found on Anneke Muller’s computer; she is the Human Resources Manager of Unison in Johannesburg.

[32] The forecast formed an attachment to Gordon’s contract of employment with Unison. The Contract is effective from 1 August; ie his date of resignation but a calendar month before formal termination.

[33] What value has it? The contents include a list of Gordon’s clients, among whom is NKM, a brief account of municipalities that would be going to tender in 2016 and 2017, and disclosure, in particular of the George Municipality prospects. It concludes by saying that Gordon’s success in winning the business of these municipalities, requires him to be involved in the tender pricing and annual renewals of the contracts. Perhaps the most important aspect is the disclosure of the 2015-2016 and 2016-2017 income; the first set of data being historical and unquestionably drawn from the financial information belonging to the applicant, and the second set an extrapolation based on Gordon’s familiarity with the historical data. That information self-evidently had value at the time it was transmitted.

Do these documents contain confidential proprietary information?

[34] The plunder email was not discovered on the computers of Unison or its filials. There is no evidence it reached them. On the contrary, given the bulk of the data, had it been received, the probabilities of not finding some of those items would be too slim to be realistic.  As it is, few documents were found.

[35] The forecast and the PSS do contain proprietary confidential information about costing and income.

Conclusion

[36] Accordingly, the Anton Piller application was justified by the plunder email and ex post facto justified by the discovery of the forecast and the PSS.

The Costs

[37] The costs were reserved in the Anton Piller order. Plainly, the applicant is entitled to these costs.

[38] The costs of the rule 35(12) proceedings were ordered by the court that heard that leg of the litigation.

[39] The Further costs up to and including the hearing were properly incurred by the applicant to finalise the matter.  However, a major part of the relief initially sought, in the form of an interdict was abandoned only at the hearing, and substantially reduced the scope of the hearing.  Obviously, the respondents had to prepare to meet that prayer, and the costs order should recognize that fact.

[40] Accordingly, in my view the appropriate order is that the applicants should get all their costs up to and including the filing of the replying affidavit, and in respect of the costs incurred thereafter up until the conclusion of this hearing, the applicant should get only two thirds of the costs incurred. In the light of this consideration the scale appropriate should be party and party costs.

The Order

1. The applicant’s application to amend the Schedule “X” to the Notice of motion, by adding the name Nama Khoi Municipality, is allowed.

2. The First, Second, Third, Fourth, Fifth and Sixth Respondents are hereby directed to forthwith hand over and deliver to the Applicant any document and or electronic record which belongs to the applicant pertaining to any of the Applicant’s clients’ listed in Annexure “X” to the notice of motion, including Nama Khoi Municipality;

3. The First, Second, Third, Fourth and Fifth Respondent are directed to destroy any and all remaining or other documents and or electronic records which belongs to the applicant pertaining to any of the Applicant’s clients’ listed in Annexure “X” to the notice of motion including Nama Khoi Municipality;

4. The First, Second, Third, Fourth and Fifth Respondent are interdicted and restrained from making use of any document, electronic record or information which belongs to the applicant pertaining to any of the Applicant’s clients’ listed in Annexure “X” to the Notice of Motion including Nama Khoi Municipality;

5. The First, Third, Fourth and Fifth Respondent shall jointly and severally pay the Applicant’s costs on the scale between Attorney and Client pertaining to Part A of the Notice of Motion.

6. The First, Third, Fourth and Fifth Respondent shall jointly and severally pay the costs of the applicant on the scale between Attorney and Client in respect of Part B of the application up to the filing of the replying affidavit, and the two thirds of the further costs of the applicant until the conclusion of the hearing.

 

 

______________________________

Roland Sutherland

Judge of the High Court,

Gauteng Local Division, Johannesburg

Heard: 5 June 2018

Judgment: 12 June 2018

For the Applicant:

Attorney K.J. Van Huyssteen of Fluxmans.

For the Respondents:

Adv JG Botha,

Instructed by N. Agnew Attorneys

[1] Petre & Madco (Pty) Ltd t/a T-Chem v Sanderson-Kasner & Others 1984(3) SA 850 (W) at 855A, an example where there was gross abuse of the scope of the order.

---