Mathias International Ltd and Another v Baillache and Others

• Jurisdiction: South Africa
• Judge: Binns-Ward J
• Judgment Date: 08 March 2010
• Docket Number: 23347/09
• Hearing Date: 08 March 2010
• Counsel: J Muller SC (with R Gordon) for the applicants. R Stelzner SC for the first respondent.
• Court: Western Cape High Court, Cape Town

Binns-Ward J:

E [1] The applicants are a New Zealand-based company which trades internationally in frozen food products, especially meat, fish and vegetables, and its South African subsidiary.

[2] At all times material to the matters in issue the first respondent was F an executive director of the South African subsidiary and managed the applicants' business in this country.

[3] The second respondent is cited as FOB Trading, allegedly a firm as contemplated in terms of rule 14 of the Uniform Rules of Court. The G evidence established the existence of a business by the name FOB which had been established in Argentina by two former employees of the first applicant at its South American branch. For present purposes it can be accepted that no distinction falls to be drawn between FOB, the South American business, and FOB, the alleged Cape Town firm. I shall refer to them indiscriminately as 'the second respondent'. [1] It is common ground H that the name of the second respondent is an acronym derived from the surnames of the two former employees in Argentina, Esteban Furlong and Tomas Ortuño, and that of the first respondent, Monique Baillache. Indeed, one of the matters that has to be determined in this judgment is

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whether the first respondent was already involved in the second respondent's A business to the extent that her office at Camden Street, Cape Town, constituted its place of business within the territorial jurisdiction of this court. The first respondent admits that it is her intention to go into business with Furlong and Ortuno, but avers that this was to happen only after the termination of her employment by the second applicant at the end of November 2009. B

[4] The third respondent is a South African company to which the applicants had supplied frozen food products in large volumes for a significant period of time. It was one of the applicants' significant customers in South Africa. The relief sought against the third respondent C in terms of the notice of motion is to be stood over for later determination and, by agreement between the parties, I made an order to that effect in chambers on 22 February 2010.

[5] The first respondent gave notice at the end of September 2009 of her intention to resign from the second applicant. She made it known at the D time to the applicants' management that it was her intention to remain actively involved in the frozen meat business — an area of enterprise in which she had in fact been engaged for many years before she was initially employed by the first applicant in Australia in 2002. It was agreed that her resignation would become effective at the end of E November 2009, and that she would assist in an orderly transfer of her functions on behalf of the applicants in the South African market. It seems that the directors of the first applicant were uncertain whether or not it would be necessary to appoint a permanent replacement for the first respondent, or whether the South African business could instead be conducted remotely from outside the country. F

[6] As a consequence of what, to it, were disconcerting indications in the marketplace, the first applicant's management decided to investigate the operation of the Argentinian office in the period surrounding the resignation of Furlong and Ortu|fno. The computers used by these two former employees were brought to New Zealand and forensically G examined. The first applicant obtained the results of this examination on or about 26 October 2009. The information indicated that the two employees had been engaged in setting up and operating the second respondent for several weeks before their resignation. Of more central relevance to the current case, it also indicated that the first respondent H had been intimately involved in these endeavours and suggested that she had been party in this regard to the misappropriation, by or for the benefit of the second respondent, of corporate opportunities that would otherwise have accrued to, or been available to, the first or second applicant; and that there had been a misuse of the applicants' confidential information in this connection. I

[7] Email correspondence that was found on the Buenos Aires office computers included material which suggested that the first respondent, in the course of 'packing up the office', had made or intended to make new files and 'spreadsheets of clients' requirements'. The email to Furlong and Ortu|fna, in which this intention was conveyed, proceeded: J

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A 'Need from you the template for:

•

Costing sheets

•

COS — you will do COPs in Argentina

•

Fax/email logo

I am getting my IT guys to come and wipe off all my information before B returning all their equipment'

The content of the emails uncovered in the forensic investigation showed on the face of it that the first respondent had been directly party to the correspondence in many instances, either as sender or addressee, and demonstrated her direct involvement in assisting with and furthering the C establishment and business of the second respondent.

[8] The applicants instituted motion proceedings in which they claimed (i) an Anton Piller order; and (ii) interdictory relief directed at prohibiting unlawful competition by the first and second respondents using the applicants' 'confidential information'. Relief was also sought against the third respondent, as an alleged joint wrongdoer in the acts of unlawful D competition alleged by the applicants.

The Anton Piller relief

[9] As ordinarily happens in such matters, the Anton Piller order was sought in an application to a judge in chambers, without notice to the E affected respondents. The claim that the applicants alleged that they intended to institute against the first and second respondents, against whom they sought the Anton Piller relief, was described in a somewhat non-committal fashion in the founding affidavit. The action that was in fact later instituted was one for damages for lost corporate opportunities, F and I have therefore assumed that to be the claim that the deponent to the founding affidavit sought to identify in the founding affidavit as the cause of action in respect of which Anton Piller relief was sought. In para 11 of the founding affidavit the deponent confirmed that the purpose of the Anton Piller application was to preserve and protect evidence in the claim that the applicants sought to prosecute. The G application was brought as a matter of alleged urgency in terms of rule 6(12).

[10] The purpose of the Anton Piller procedure is to secure the preservation of evidence in proceedings already instituted or to be instituted by the applicant. [2] In Shoba v Officer Commanding, Temporary Police Camp, H Wagendrift Dam, and Another; Maphanga v Officer Commanding, South African Police Murder and Robbery Unit, Pietermaritzburg, and Others 1995 (4) SA 1 (A) ([1995] 2 All SA 300; [1995] ZASCA 49) at 15H – I the Appellate Division set out the essential requirements for the establishment of Anton Piller relief. These requirements were stated by Corbett CJ as follows:

I '(W)hat an applicant for such an order, obtained in camera and without notice to the respondent, must prima facie establish, is the following:

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(1)

That he, the applicant, has a cause of action against the respondent A which he intends to pursue;

(2)

that the respondent has in his possession specific (and specified) documents or things which constitute vital evidence in substantiation of applicant's cause of action (but in respect of which applicant cannot claim a real or personal right); and B

(3)

that there is a real and well-founded apprehension that this evidence may be hidden or destroyed or in some manner be spirited away by the time the case comes to trial or to the stage of discovery.'

[11] The Anton Piller procedure was not part of the common law. [3] It has C been adopted by the superior courts in South Africa in the exercise by the courts of their inherent jurisdiction to regulate their own process in the interests of justice, having regard to 'modern problems in the prosecution of commercial suits'. [4] (The continued existence of that inherent jurisdiction in the constitutional era is confirmed in the provisions of D s 173 of the Constitution.) It is a procedure which has draconian and extremely invasive consequences for the respondents who are made subject to it. Its use has been described, in my view with justification, as an example of the outer extreme of judicial power. [5] The implementation of the search leg of an Anton Piller order is a most manifest intrusion on E the subject's right to privacy under s 14 of the Bill of Rights, especially when the search occurs at the subject's home. A limitation of that right can lawfully occur only to the extent permitted in terms of s 36 of the Constitution, which provides:

'36 Limitation of rights F

(1) The rights in the Bill of Rights may be limited only in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, G

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A equality and freedom, taking into account all relevant factors, including —

(a)

the nature of the right;

(b)

the importance of the purpose of the limitation;

(c)

the nature and extent of the limitation;

(d)

B the relation between the limitation and its purpose; and

(e)

less restrictive means to achieve the purpose.

(2) Except as provided in subsection (1) or in any other provision of the Constitution, no law may limit any right entrenched in the Bill of Rights.'

[12] It seems well established that the Anton Piller procedure is one that C is reasonable and justifiable in an open and democratic society based on...