Continental Ore Construction v Highveld Steel & Vanadium Corporation Ltd

• Jurisdiction: South Africa
• Judge: Margo J
• Judgment Date: 07 September 1971
• Citation: 1971 (4) SA 589 (W)
• Court: Witwatersrand Local Division

Continental Ore Construction v Highveld Steel & Vanadium Corporation Ltd
1971 (4) SA 589 (W)

1971 (4) SA p589

Citation	1971 (4) SA 589 (W)
Court	Witwatersrand Local Division
Judge	Margo J
Heard	June 10, 1971; June 11, 1971
Judgment	September 7, 1971

Flynote : Sleutelwoorde A

Discovery — Defendant admitting possession of documents — Refusal to disclose as such not relevant to main issue — Proof of relevance — Onus — Rule of Court 35 B (3), (6) and (7).

Headnote : Kopnota

Plaintiff had instituted an action in which it claimed, inter alia, (a) a declaration that the defendant was bound by an agreement to supply it with vanadium-bearing slag in certain minimum quantities, at prices to, be determined by reference to, inter alia, the price at which during each quarter the defendant was selling and supplying vanadium-bearing slag to its other customer or customers on the North American continent. The summons alleged that a written agreement had C been concluded in March, 1966, at Johannesburg under which the price to be paid was that fixed by negotiations between the parties. On 3rd. April, 1968, an oral agreement was concluded at Luxembourg, whereunder the prices to be paid for the slag were defined. Plaintiff alleged that the defendant had been in breach of this agreement and had wrongfully refused to disclose the price at which it was selling and supplying the slag to customers on the North American continent. The defendant admitted the written agreement but denied the oral agreement. It admitted its refusal to supply the slag or disclose the D prices at which it was selling the slag on the North American continent. After its discovery affidavit had been served the plaintiff served a notice in terms of Rule of Court 35 (3) for the discovery of other documents relevant to the issue. The defendant admitted that it had in its possession certain documents but stated that they related to the prices at which the slag was sold and delivered to the customers on the North E American continent. It refused to disclose the documents at this stage as it would be premature and disclosure can only be given if the Court in fact gave judgment for the plaintiff on the man issue, viz. whether there was an oral agreement. In an application brought under Rule of Court 35 (7) read with sub-rules (3) and (6),

Held, that the defendant ought not at this stage to be ordered to make discovery or allow inspection of documents which were relevant only to the question of the price paid by the customers on the North American continent.

Held, further, that the onus of proving relevance where such is denied still rested on the party seeking discovery and F inspection.

Held, further, that these documents were not relevant to the main issue, viz. whether an oral agreement had been concluded in Luxembourg.

Case Information

Application for an order on defendant to make discovery and inspection. The facts appear from the reasons for judgment.

S. W. Kentridge, S.C., (with him A. W. Mostert), for the G applicant.

R. S. Welsh, Q.C. (with him R. H. Peart), for the respondent.

Cur adv vult.

Postea (September 7th).

Judgment

H Margo, J.:

This is an application to compel further and better discovery and to order the production for inspection of certain documents.

The applicant is the plaintiff in an action pending in this Court in which the respondent is the defendant. It will be convenient to refer to the parties as the plaintiff and the defendant respectively. The pleadings in the action have closed, but the matter has not yet come to trial. In the action the plaintiff clauses the following relief, inter alia :

1971 (4) SA p590

Margo J

(a)

A declaration that the defendant is bound by an agreement for the supply by the defendant to the plaintiff of vanadium-bearing slag in certain minimum quantities, at prices to be determined by reference A to, inter alia, the price at which during each quarter the defendant was selling and supplying vanadium-bearing slag to its other customer or customers on the North American continent.

(b)

An order directing the defendant to deliver 1 800 000 lbs. of vanadium-bearing slag to the plaintiff f.o.b. B Lourenço Marques before 31st December, 1970, at a price fixed in accordance with the provisions of the agreement.

(c)

An order directing the defendant to disclose to the plaintiff the price at which during each quarter of 1970 it was selling and supplying vanadium-bearing slag to its other customer or customers on the North American continent.

C For present purposes nothing turns on the fact that the times mentioned in clauses (b) and (c) have long since expired.

The cause of action alleged in the plaintiff's particulars of claim is that on or about 11th March, 1969 and at Johannesburg, the parties concluded a written agreement in terms whereof, D inter alia, and subject to certain conditions and contingencies, the defendant agreed to supply and sell to the plaintiff a minimum of 1 800 000 lbs. of slag per annum from 1969 onwards, delivered f.o.b. Lourenço Marques, at prices to be fixed by negotiation between the parties from time to time, the agreement to become effective and binding as from the date E of signature thereof and to continue in force indefinitely until terminated by six months' notice at any time after June, 1971, or by 90 days' written notice due to failure to agree on price, or by three months' notice due to adverse currency changes; and that in April, 1968, and at Luxembourg, an oral agreement was concluded in terms whereof the prices to be paid for the slag were to be as follows:

(i)

F The price of the slag was to be fixed in respect of deliveries made in each quarter of a calendar year by reference to a graph numbered THV 5849/2. The price of the slag was to be functionally related in terms of the said graph to the average selling price of G vanadium in the form of ferro-vanadium on the North American continent during the relevant quarter, the said average price being shown on the vertical axis of the graph and the price to be paid by the plaintiff for the slag being shown on the horizontal axis of the graph;

(ii)

The price to be paid by the plaintiff was, however, not to exceed that at which during the relevant H quarter the defendant was selling and supplying such slag to its principal customer on the North American continent, namely Vanadium Corporation of America Inc., or to any other customer on the North American continent.

The particulars of summons go on to allege that, in the circumstances therein referred to, the defendant became obliged to supply to the plaintiff during the 1970 calendar year 1 800 000 lbs. of slag f.o.b. Louren�o

1971 (4) SA p591

Margo J

Marques at a price ascertained in accordance with the agreement; but that the defendant had wrongfully and in breach of its contractual obligations refused to supply any slag, had wrongfully contended that no valid agreement for the supply of such slag existed between the parties, and had further A wrongfully refused to disclose the price at which it was selling and supplying the said slag to its other customer or customers on the North American continent.

The particulars of summons, were amplified in reply to a request for further particulars, but it is not necessary for present purposes to examine the further averments.

In its plea the defendant admits the conclusion of the written B agreement of 11th March, 1966, but denies that any further agreement was concluded at Luxembourg. The defendant says that on or about 19th November, 1969, it gave to the plaintiff 90 days' written notice of its intention to cancel the written agreement due to the failure to agree on price. The defendant C admits that it has, refused to supply any slag, and that it has refused to disclose the price at which it was selling and supplying such slag to its customer or customers on the North American continent, but denies that there is any agreement in existence or that the plaintiff is entitled to any of the relief claimed by it.

D The main issue, therefore, is whether or not an agreement was concluded at Luxembourg as alleged by the plaintiff. Only if that issue is decided in favour of the plaintiff will the defendant became obliged to disclose the prices to its customer or customers on the North American continent during the relevant period. There are other issues defined by the pleadings, such as whether or not it is objectively possible to determine the price at which the defendant was selling slag on E the North American continent, regard being had to different prices for different customers and fluctuating prices, over any particular quarter. However, for present purposes it is not necessary to explore those issues.

On 28th April, 1971, after the defendant's discovery affidavit had been served, the plaintiff served a notice under Rule 35 F (3) of the Uniform Rules of Court. In the notice the plaintiff stated that it believed that, in addition to the documents already disclosed by the defendant in its discovery affidavit, there were other documents (including copies) which might be relevant to the matters in question and that such documents were in the possession of the defendant. A general description G of such documents was given in a schedule to the notice. Further in terms of the notice the defendant was required to make the said documents available for inspection in accordance with Rule 35 (6), or to state within 14 days that such documents were not in its possession, in which event it was required to state their whereabouts, if known to it.

The defendant's attorneys replied by letter dated the 28th May, H 1971, stating that the defendant was in possession of certain documents referred to in the plaintiff's notice, but that the defendant declined to disclose them...