Van der Berg v Coopers & Lybrand Trust (Pty) Ltd and Others

• Jurisdiction: South Africa
• Judge: Smalberger JA, F H Grosskopf JA, Melunsky AJA, Mpati AJA and Mthiyane AJA
• Judgment Date: 29 November 2000
• Citation: 2001 (2) SA 242 (SCA)
• Docket Number: 466/98
• Hearing Date: 01 November 2000
• Counsel: W G Burger SC (with D Van der Walt) for the appellant. M J D Wallis SC for the first and third respondents (the heads of argument having been drawn by M J D Wallis SC and L Burger). O Rogers SC for the second and fourth respondents (the heads of argument having been drawn by C Z Cohen SC and with O Rogers SC).
• Court: Supreme Court of Appeal

Smalberger JA:

[1] The appellant is a senior advocate practising as such in Cape Town. J

Smalberger JA

The third respondent, Mrs Eileen Fey (Fey), and the fourth respondent, Mr Michael Lane (Lane), are the joint trustees in the A insolvent estate of Mr Jurgen Harksen (Harksen). Together I shall refer to them as 'the trustees'. Fey is an employee of the first respondent (Coopers & Lybrand) and Lane is a director of the second respondent (Republic Trustees). Where appropriate I shall refer to the four respondents collectively as 'the respondents'. B

[2] The appellant instituted an action for damages against the respondents in the Cape of Good Hope Provincial Division arising out of an admittedly defamatory statement made of and concerning him by Lane in a condonation application in civil judicial proceedings between the trustees, on the one hand, and a number of C respondents, including five firms of attorneys, on the other. Fey associated herself with Lane's affidavit containing the defamatory statement. Coopers & Lybrand and Republic Trustees were joined in the action on the basis that they were vicariously liable for the conduct of Fey and Lane respectively. D

[3] In the Court a quo Cleaver J upheld the respondents' defence that the defamatory statement had been published on a privileged occasion and had been relevant to the matter at hand. He did so after hearing evidence from the appellant and the trustees' attorney, Mr Fischer (Fischer), who gave evidence on behalf of the defendants (respondents). Neither of the trustees testified. The E learned Judge accordingly non-suited the appellant but subsequently granted him leave to appeal to this Court. The judgment of the Court a quo is reported as Van der Berg v Coopers & Lybrand Trust (Pty) Ltd and Others 1998 (4) SA 890 (C).

[4] In order to determine the issues on appeal before us it is necessary to place the defamatory statement in its proper perspective. F This in turn involves an appreciation of the relevant events which preceded its making. These are set out accurately, succinctly and lucidly in the heads of argument filed on behalf of Lane and Republic Trustees. In recounting the history of the matter I propose to borrow extensively from them. G

[5] Harksen's estate was finally sequestrated on 16 October 1995. The trustees, in their then capacity as provisional trustees, experienced difficulty in obtaining any co-operation from Harksen in relation to his financial affairs. On 11 November 1995 the trustees launched an ex parte application which had as its object the preservation of assets thought to belong to Harksen, as well H as the preservation of documents which it was believed might throw light on his financial affairs and dealings (the main application).

[6] In essence, the case in the founding papers was that Harksen, while claiming to have no assets of significance, was in truth the owner of substantial assets to which he had access through various I front entities (the Harksen entities), and that he used the services of various firms of attorneys to enable him to lead an affluent lifestyle on funds available to him through such entities. These entities were alleged to include certain of the respondents in the main application (the fifth and 10th to 13th J

Smalberger JA

respondents). The Harksen entities which featured as respondents and Harksen's spouse were, A in terms of an ex parte order of 15 November 1995, provisionally interdicted from parting with any assets except in terms of a Court order obtained on notice to the trustees.

[7] The first to fourth respondents and the 15th respondent in the main application were firms of attorneys who were alleged to B have acted for Harksen and/or the Harksen entities (the attorneys). In terms of paras 3.1 and 3.10 of the ex parte order of 15 November 1995, the attorneys were provisionally interdicted from dealing with, paying out or transferring any funds or assets held by them on behalf of the Harksen entities alleged by the trustees to be front companies for Harksen, and from parting with any documents or C computer discs relating to the affairs of Harksen and the said entities. The remaining respondents (the sixth to ninth respondents) were banks, and they were interdicted from parting with funds held in the name of any of the alleged Harksen entities, except in terms of a Court order. D

[8] The attorneys all filed opposing affidavits during November - December 1995, in which they sought the discharge of the interdict and a costs order against the trustees de bonis propriis on the attorney/own client scale. With one exception the Harksen entities which were respondents also opposed the application, and sought the discharge of the interdict with costs. One E of the banks (ABSA) filed a notice of opposition but did not file an opposing affidavit, and the banks did not play any further part in the subsequent proceedings.

[9] In terms of an order made by agreement on 14 December 1995 the trustees were to file their replying affidavits by 30 December 1995. They failed to do so and had not yet done so by 22 April F 1996 (nearly four months later) on which date they launched their application for condonation (the condonation application). It was in Lane's founding affidavit made in support of the condonation application that the defamatory statement appeared. G

[10] Paragraphs 1 and 2 of the notice of motion in the condonation application sought condonation for the trustees' failure timeously to file their replying affidavits and leave to file them 'at this stage'. In paras 3 and 4 of the notice of motion, the trustees sought an order that a decision on the costs of the main application be postponed until after the completion of the insolvency interrogation, H which was under way, and leave to file supplementary replying affidavits in relation to costs after the representatives of the attorneys who had been involved with Harksen's affairs had complied with their subpoenas to appear and after the interrogation of all witnesses at the insolvency enquiry.

[11] With regard to paras 1 and 2 of the notice of motion, one of the I matters which the trustees were required to canvass in their founding papers was the reason for their delay in filing the required affidavits. In summary, the explanation advanced for such delay was as follows:

(1)

The trustees initially intended to file their replying papers by 30 December 1995 and their legal representatives reserved time J

Smalberger JA

to do so. However, the creditor who had been funding the litigation withdrew the funding and work had to stop until the creditors had been A consulted.

(2)

The trustees met with the creditors in Hamburg over the period 29 January - 2 February 1996. Although not expressly so stated in the founding papers, it appears that funding for the trustees must have been forthcoming pursuant to these meetings. B

(3)

During the period 6 February - 14 February 1996 the trustees' attention was diverted by an urgent application launched by Harksen in which he sought to interdict the commencement of the insolvency enquiry.

(4)

Harksen's urgent application was dismissed and the insolvency C enquiry began on 15 February 1996. Attorney Kulenkampff (of the second respondent) (Kulenkampff) and Mrs Jeanette Harksen were subpoenaed to attend on 22 - 23 February 1996. Both witnesses objected to testifying, Kulenkampff on the grounds of professional privilege. The presiding officer reserved his decision on these D objections and eventually only gave his ruling on 1 April 1996 (which was to the effect that Kulenkampff should testify and raise privilege as and when appropriate).

(5)

In the meanwhile, Harksen himself had been interrogated. He was (according to the trustees) extremely evasive, produced no significant E documents and generally said that requests for documents should be directed to his attorneys or to Mr Siegwart, the deponent for certain of the Harksen entities.

(6)

By 18 March 1996 the trustees had apparently come to the view that the attorneys were in possession of documents and information which would be highly pertinent to the main application. Although these documents and information might constitute F new matter in the context of the main application, the trustees submitted in their condonation application that a Court would probably allow them to introduce such matter in their replying affidavits. The documents and information which the trustees had in mind would appear G to have been documents and information which would assist to show that the various Harksen entities were merely fronts for Harksen. In other words, the additional information was likely to be relevant in assisting the trustees to maintain the interdict against the Harksen entities.

(7)

This view of the matter (namely, the relevance of the insolvency enquiry to the finalisation of the trustees' replying H papers) was expressed in a letter addressed by Fischer on 18 March 1996 to the respondents opposing the main application and they were asked to consent to its postponement. They refused.

(8)

On 28 March 1996 attorney Katzeff (of the first respondent) (Katzeff) was subpoenaed to produce documents at the I resumed interrogation scheduled for 1 April 1996. He requested and was granted an extension by Fischer and he undertook that his files (excluding privileged matter) would be handed over by not later than 12 April 1996. Also, in a letter from Fischer dated 26 March 1996 Katzeff was asked for information concerning a cheque of J

Smalberger JA

R7 749 000 which Harksen had claimed to have handed to Katzeff A in January/February 1994.

(9)

On 28 March 1996 a subpoena was also issued and served on Kulenkampff. The latter promised to make...