South Africa: High Courts - Gauteng

CASE NO: 05/16566

GILDENHUYS J:

Introduction

[1]      On 11 August 2005 the applicant obtained ex parte an interim search and seizure order (commonly known as an Anton Pillar order) against the first three respondents. Execution thereof took place on the same day. Certain items were seized.

[2]      The first and second respondents are (or were) insurance brokers. The third respondent provides management services for entities operating in the insurance industry. Mr David Janse van Rensburg is its majority shareholder. On 11 October 2005 the fourth respondent was joined to the proceedings, following upon allegations that it had previously acquired the businesses of the first and second respondents. Application was also made to join the sheriff as fifth respondent; as far as I could ascertain, no order was made on this application.

[3]      The matter came before me on the return date of the order. Ms Robinson, who appeared with Ms Giai-Coletti for the respondents, submitted that the Anton Pillar order and the subsequent seizure are to be set aside, firstly because if the judge who granted the interim order was aware of the true facts, the order would not have been granted, and secondly because the execution of the order was fatally flawed.

[4]      Should I be convinced that the execution of the interim order was seriously flawed and I am persuaded that I should show my displeasure at the manner of execution by setting the order aside, it would not be necessary for me to deal with those of Ms Robinson’s submissions which are directed at showing that, had the judge who granted the interim order been aware of the true facts, he would not have granted the order.

The applicant’s cause of action

[5]      The applicant was established on 5 December 1993. It is principally involved in the development of computer software applications, mainly in the insurance field. It has three shareholders and directors, being Kurt Groenewald, Adriaan (Adri) Vinke and Desmond Fischer.

[6]      The applicant alleged that it owns all rights, including copyright and intellectual property rights, in a computer software system utilised by the insurance industry for the purpose of processing and effecting payment of policy premiums and insurance claims. The software is marketed under a business name “Insurance Information Exchange” (IIX). According to the applicant, it “has been sold to various companies”. The respondents submit that the applicant has not shown that it is vested with copyright in the IIX system. For purposes of this application I shall assume, without so deciding, that the applicant holds the copyright in the IIX system.

[7]      On 12 September 2002 the applicant concluded a written licence agreement with the first respondent for use of the ICC system. The system, however, found its way to the computers of the third respondent. The licence agreement provides for the payment of monthly seat licence fees “charged each month for the users”. Over time, there was an increase in the number of seat licences charged and paid for under the licence agreement. During the period from May 2004 until September 2004 there were 24 seat licences.

[8]      Some time after the conclusion of the licence agreement, the third respondent (according to the applicant) requested that it be substituted for the first respondent as lisensee under the licence agreement. Although this request was never acceded to, the intention was clear, viz that the third respondent would be using the IIX system, either independently from the first respondent or instead of the first respondent. The respondents allege that it was always in the contemplation of the parties that the third respondent would be the correct contracting party.

[9]      By letter dated 30 July 2004, the third respondent gave the applicant notice of cancellation of the licence agreement. The letter reads as follows:

                  “re: CAMS (BonaFide) IIX System

It is with regret that we hereby present you with notice of cancellation of our contract. In terms of the contract we have to provide you with 60 days notice. This means that our contract with you will expire on 1 October 2004 at 00h00.
We wish to retain the option to extend the contract expiry for an additional 30 days (up to the end of October 2004) at our discretion, if this meets with your approval.
We would like to take this opportunity to wish you well for the future.”

After the cancellation was (at the behest of the applicant) confirmed by the first respondent, it was accepted by the applicant. The applicant furthermore agreed that the licence agreement could be extended up to the end of October 2004, and that the licence fees for October would be based on a minimum of 15 seats.

[10]     The third respondent installed a new software system, known as TAIL software, to replace the IIX system. According to Mr van Rensburg (who deposed to an answering affidavit on behalf of the respondents), the licence agreement was cancelled “because of the highly unsatisfactory performance of the software application”. The applicant denied the alleged unsatisfactory performance.

[11]     Since the third respondent found itself unable to translate the data on the IIX system into the new TAIL system by the time the extended notice period expired, the third respondent (by e-mail dated 1 November 2004) asked the applicant for “administrator access” to the IIX System beyond the expiry date. The applicant responded by e-mail as follows:

“I also want to note that in terms of your request for ‘administrator access’ to IIX, I confirm that we are prepared to allow access on the same basis we had in October, where system activation is based on a minimum of 15 seats as per the contract that we had in place.
Should you wish to have the system re-activated, please advise us at your earliest convenience.”

The respondents did not reply to this e-mail communication.

[12]     The applicant alleged that on or about 18 January 2005 and with the assistance of one Mark Clulow, a microsoft certified professional of Diametrix Solutions (which is independent of the applicant), it learnt that notwithstanding the expiry of the licence agreement, the respondents unlawfully continued utilising the IIX programme to conduct its business of managing and effecting insurance claims. It also allowed other parties (particularly brokers) access to the system. Decryption software procured from an internet site was allegedly used to adapt the applicant’s software licencing protection system so as to obtain unlimited access to the IIX system by an unlimited number of users.

[13]     Mr van Rensburg did not deny the use of decryption software to obtain access to the IIX system. He replied to the applicant’s allegations as follows:

“I wish to make it quite clear that, as far as the usage of the system following the cancellation of the licence agreement with the applicant was concerned, the third respondent made no use of the IIX system for operational requirements for all transactions which accrue from 01 October 2004. The brokers who contract with the third respondent have made sole use of these purposes of the new software from 1 October 2004, which was when the initial notice period had expired. The third respondent did not permit any third party use of the software provided by the applicant up to at the latest, 31 October 2004, which was when the extended notice period had expired”.

No licence fees were paid for the use of the IIX system beyond the end of October 2004.

[14]     Mr Mynhardt, a consultant to the third respondent, described the use which the third respondent made of the IXX system after expiry of the licence period, in an affidavit before the Court as follows:

“The third respondent retained the IIX database for administrative purposes. Not all of the insurance claims accruing before 1 November 2004 had been finalised and it proved too difficult to translate the data on the IIX system into the new software. The applicant was fully aware that this use would be made of the IIX software by the third respondent, because of our various requests to it for the administrative use. It is, in any event, clear from the founding affidavit that the applicant knew of this use. It was not an option to store the data in hard copy format in November 2004, as there were still too many claims to be processed and finalised that had arisen before November 2004.”

[15]     The applicant replied that the IIX system was not the only software which could be applied to access data within the data base. Any number of proprietary software systems could have been used for that purpose. However, the third respondent evidently found it much cheaper simply to adapt the IIX licence key verification system by means of the decryption software and to continue using that system, rather than pay the minimum seat licence fees which the applicant required, or pay TAIL to convert the data on the IIX system to the TAIL system.

[16]     Mr van Rensburg attempted to justify the non-payment by the third respondent of licence fees for the use of the system since 1 November 2004 by stating that –

“……. the third respondent has made a with prejudice payment offer to the applicant to pay it for arrear licence fees. To date the applicant has not placed on record the licence fee it thinks ought reasonably to be paid in response to the tender made, nor has the applicant responded to the offer made…”

The applicant, in its replying affidavit, stated that the payment offer was unacceptable to the applicant and was declined. The offer only ensued “once the Respondents had been caught in the act, as it were”.

The law relating to the execution of Anton Piller orders

[17]     The granting of an Anton Piller order against a person and the execution of the order would infringe the person’s constitutional rights, particularly his right to privacy as set forth in section 14 of the Constitution, 1996, unless the limitation of these rights are in the circumstances of the particular case justifiable under section 36(1) of the Constitution. The issue in Anton Piller cases is whether the granting and execution of the order and the consequential harm occasioned thereby, is proportionate to the aim sought to be achieved through the Anton Piller order.

[18]     It was held in ex parte Dabelstein and others v Hildebrandt and others [1996] 2 All SA 17 (C) that the requirement of proportionality in Anton Piller cases will be satisfied if the order contains adequate safeguards. Farlam J (as he then was) expressed himself as follows (on p38 of the report):

“I am satisfied that a power such as the power to grant Anton Piller orders in appropriate cases is necessary in our society and that provided orders granted pursuant to such power contain adequate safeguards, the requirements of proportionality is satisfied, …”

If in the execution of an interim Anton Piller order there was a significant failure to adhere to the safeguards incorporated in the order, such failure will constitute an unjustifiable infringement of the constitutional rights of the person against whom the order was granted.

[19]     The type of remedy provided by the Anton Piller procedure requires that the order must be metriculously executed, according to its letter. See Petre & Madco (Pty) Ltd t/a T-Chem v Sanderson-Kasner and Others 1984 (3) SA 850 (W) at 855A/B. In Retail Apparel (Pty) Ltd v Ensemble Trading 2243 CC and Others 2001 (4) SA 228 (T), van der Westhuizen J held as follows (at 233I-234B):

“Certain guidelines can be extracted from the authorities referred to above. An Anton Piller order is a drastic and extreme measure with enormous potential for harm, since it would quite frequently be granted not only in camera and in the absence of a respondent but also at the instance of a competitor who would not be astute to see that no harm came to the respondent. One could add that constitutional considerations, such as respect for the rights to human dignity, privacy and property are also highly relevant. Therefore execution must be meticulous and according to the letter of the order. In appropriate cases a Court can show its displeasure or disapproval by setting aside the order (or previously by the urgent discharge of the rule nisi) to restrain the strong temptation which may exist on the part of an applicant to stretch the language of the order. It could be improper to hold that an applicant can abuse the considerable power which the order gives, without facing a penalty for doing so other than a possible claim for damages.”

[20]     Conradie AJ, in Petre & Madco (Pty) Ltd t/a T-Chem v Sanderson-Kasner and Others 1984 (3) SA 850 (W), described the effect of an Anton Piller order as follows (at 855D-G):

“The order has enormous potential for harm, particularly since it would frequently be granted at the instance of a competitor who would not be astute to see that no harm comes to the respondent.
Severe sanctions are necessary to curb any abuse of stringent remedies. An unruly horse needs to be kept on a tight rein.
It would offend one’s sense of propriety to be told that an applicant could abuse the considerable powers which the order had given him without fearing any penalty for doing so other than a claim for damages, provision for which may or may not have been incorporated in the rule and which will always be difficult to prove and may in any event come too late to help a respondent ruined by an improper execution of the order. Of course, prejudice would not always be eliminated by a discharge of the rule. But I would like to think that the sanction of an urgent discharge of the rule – on an anticipated return day – would serve to restrain the temptation, which must often be great, to stretch the language of the order.”

See also Hall and Another v Heyns and Others 1991 (1) SA 381 (C) at 394H and Easyfind International (SA) (Pty) Ltd v Instaplan Holdings and Another 1983 (3) SA 917 (W) at 933F-H.

[21]     In an Anton Piller application, the applicant bears the onus to establish a prima facie case before an interim order will be granted. According to Basson J in Frangos v Corpcapital Ltd and Others 2004 (2) SA 643 (T) at 648H-I,

“….. the test of mere prima facie proof in disposing of the applicant’s onus may be inappropriate and that the ordinary rules relating to the proof of facts in motion proceedings ought to apply”.

See also Sunworld International Inc v Unifruco Ltd 1998 (3) SA 151 (C) at 162H-163C, on which decision Basson J relied. If on the return day of an interim order the manner of execution of the order is in dispute, the position should be no different. The well-known approach established in Stellenbosch Farmers’ Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C) at 235E-F and Plascon-Evans Paints Ltd v Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A) at 634I-635C must be followed. However, if the applicant’s version of what happened during the execution of the order is established by evidence from the sheriff who executed the order and an independent attorney who was present at the execution, the court might find it easier to reject a contrary version by the respondents as being clearly untenable.

[22]     Even if no harm was done by non-compliance with the provisions of an Anton Piller order, the Court would in appropriate circumstances and if the non-compliance was significant, still be entitled to set the order aside. The following dictum by van der Westhuizen J in Retail Apparel (Pty) Ltd v Ensemble Trading 2243 CC and Others 2001 (4) SA 228 (T) at 235G-J is relevant:

“Was any harm done in this particular case? It would seem that in practice not much harm was done as far as the attempt at a search and attachment is concerned. Nothing was found and attached and further searches are unlikely to happen, I am told. As stated earlier, the most serious consequence for the respondents seems to be the situation regarding the bank account. However, one must also not lose sights of the fact that there is a principle involved. Certainly the context and practical circumstances of a particular situation are relevant, but whether or not an order must be executed meticulously and according to the letter of the order cannot depend only on the question whether the facts of a particular case warrant or necessitate the meticulous execution of the order. This would mean that any sheriff or attorney could on his or her own consider the facts of a situation and then decide that certain parts of an order need not be adhered to, because those parts do not seem to be sufficiently important under the circumstances. Coincidence could not determine the degree of respect with which people and particularly lawyers are expected to treat court order.”

The contents of the interim order

[23]     The interim order made against the respondents contains the following provisions as to its executions which have a bearing on the issues in this case:

“2.1      That the Respondents and/or any other person in charge of the premises of the Second and Third Respondents ……… grant the sheriff of the above Honourable Court, and/or attorney Constantine Rakitzis, and/or computer operator Mark Clulow access to the said premises for the purposes of:

2.1.1    Searching the premises to enable Rakitzis and/or Clulow to identify and point out to the Sheriff originals or copies of or extracts from any document constituting or containing information and/or data produced or created with the computer software programme/application and the BonaFide IIX database known as ‘Insurance Information Exchange’ or any adaptation thereof (hereinafter referred to as ‘the IIX System’);
2.1.2    ……………;
2.1.3    ……………;
2.1.4    ……………;

                  2.2      ……………;

                  2.3      ……………;

2.4      Directing that the Respondents be granted a reasonable opportunity to secure the attendance of their attorney in order to represent them during the execution of this order;

2.5      ……………;

2.6      ……………;

2.7      Directing the Sheriff, before this order and this application is served or executed:

2.7.1    To hand to the Respondents or the other person/s found in charge of the premises a copy of a notice which accords with annexure Y2 of the practice manual; and
2.7.2    To explain paragraphs 2, 3 and 4 thereof; and
2.7.3    To inform those persons of the following:

2.7.3.1  That any interested party may apply to the above Honourable Court on not less than twenty four hours’ notice to the offices of the Applicant’s attorney for a variation or setting aside of this order, the Court’s practices and rules applying unless the court directs otherwise;
2.7.3.2  That the Respondents are entitled to make copies of any documents and/or USB memory stick and/or CD Rom onto which information and/or data has been copied which the Sheriff intends to remove unless the Sheriff declares that the time involved makes the procedure impractical and the Sheriff either does not remove the relevant item or removes it in a container sealed by him and which the Sheriff may not open except to give effect to this order or to any further direction from the above Honourable Court;
2.7.3.3  That the Respondents or their representative is entitled to inspect items in the Sheriff’s possession for the purpose of satisfying themselves that the inventory is correct.

                 

2.8      That the Sheriff is ordered to immediately make a detailed inventory of all items attached and information and/or data copied as well as to provide the Registrar of the above Honourable Court, the Applicant’s attorney and the Respondents with a copy thereof;

2.9      ……………;

2.10     ……………;

2.11     That the Sheriff is ordered to inform the Respondents that the execution of this order does not dispose of all of the relief sought by the Applicant and to simultaneously serve the notice of motion and explain the nature and the exigency thereof;

[24]     The applicant made the following submissions in its founding affidavit, relating to the contents of the interim Anton Piller order:

“The presence of Herbert Otto Schr der, the independent computer specialist of Chet Industries is necessary to assist in executing the order since he is crucial in identifying the evidence sought. In addition, in order to supervise the execution of the order, an independent attorney, Constantine Rakitzis of Dino Rakitzis Attorneys, 51 Eriswold Way, Saxonwold, will also attend the execution of the order.”

When it appeared that Mr Schr der would not be available as computer specialist, Mr Mark Clulow, the person who originally discovered the unauthorised use of the IIX System, was appointed “computer operator” under the preliminary order. The respondents placed his independence in issue. In my view, his appointment as “computer operator” to assist in the execution of the interim order, is unfortunate.

Was the service and execution of the interim order flawed?

[25]     The respondents allege that the execution of the interim Anton Piller order was significantly flawed in several respects. The dissatisfaction concerning the execution of the order must be seen against the background of a report made by the independent attorney, Mr Ratzikis. The report is dated 15 August 2005, which is well before the date of delivery (on 6 October 2005) of the respondents’ answering affidavits.

[26]     On 11 August 2005 Mr Ratzikis, the sheriff and Mr Clulow went to the execution address (10 Penelope Avenue, Florida North) to execute the order. He described what transpired in his report as follows (I quote the relevant portions only):

                  “1.       ……………;

2.       We arrived at and entered the building at the execution address at approximately 13h20 where the deputy sheriff and I introduced ourselves and Clulow to the receptionist, Mrs Germishuizen, and:

2.1      explained the purpose for which we were at the execution address;
2.2      confirmed that the execution address was that of the second and third respondents and from which they conducted their business; and
2.3      asked her to have all persons at the execution address stop working on their computers and congregate in the boardroom so that the deputy sheriff and I could explain the purpose of us being at the execution address.

                  3.       …………..;

4.       By 13h25 Mrs Germishuizen, Miss Newton, Mr Willemse and Mr Germishuizen had congregated in the boardroom together with the deputy sheriff, Clulow and I and when we were advised that the Germishuizens, Mr Willemse and Ms Newton were the only persons at the execution address at that time as all the other employees (save for one that was off ill) were on lunch and that the owner of the business, a certain Mr van Rensburg, was in Pretoria.

5.       I briefly explained the nature of the Anton Piller order to those present and in particular the role of the deputy sheriff, Culow and myself in the execution of that order. I then read to those present the notice by the registrar (annexure Y2 to the order) and as those present were Afrikaans speaking and our conversations until then had taken place in Afrikaans, I offered to explain the registrar’s notice to those present in Afrikaans. As all indicated that they understood their rights I did not explain the registrar’s in Afrikaans.

6.       Upon a request to those present by the deputy sheriff, Mr Germishuizen was identified as the most senior employee present and the deputy sheriff formally served a copy of the Notice of Motion and founding papers and court order on Mr Germishuizen.

7.       Pursuant to my recommendation and suggestion that contact be made with the boss of the business, Mrs Germishuizen and I proceeded to the reception area of the execution address and made telephonic contact with Mr van Rensburg.

8.      

……………;

9.      

Whilst I spoke to Mr van Rensburg, Clulow was shown the file/database server by Mr Germishuizen and proceeded to disconnect this server. In addition Clulow accompanied by Mr Germishuizen went to all the computers at the execution address and closed all active windows on all the computers.

10.     

…………….

11.     

…………….

12.     

…………….

13.     

…………….

14.     

At 14h20 Mr van Rensburg arrived at the execution address. After introducing myself, the deputy sheriff and Clulow to him, he was handed the copies of the Notice of Motion and founding papers and court order that were previously served on Mr Germishuizen and I explained the contents to him, the reason for us being there and in particular what was contained in the registrar’s notice referred to above. At this stage we were joined by a Mr Hendrik Heystek and a Mr du Toit that were respectively introduced as a business associate and the managing director of the third respondent.

15.     

Upon Mr van Rensburg indicating that his attorney would not be present during the search and having agreed for the search to commence, Clulow began his search on the computers at the execution address at 14h25. Clulow indicated that his search would be limited to a search on one or two of the desktop computers and the file server.

16.      …………….

17.      …………….

18.      …………….

19.      …………….

[Paragraphs 16-19 of the report deal with data relating to the IIX System found on the computers, all of which was downloaded onto two memory sticks.]

20.      Whilst Clulow was conducting his search on the network server and at approximately 14h35 I enquired of Mr van Rensburg whether there was any documentation in hard copy at the execution address that had been created with the IIX System and if so that he should point out his documentation to me. I was advised that all hardcopy documentation created with the IIX System would be on client files, but that all such documentation was created prior to November 2004.

21.      Clulow’s search of the computers and the making of hardcopy printout’s was concluded at approximately 15h40.

22.      At 15h45 Clulow in the presence of Mr van Rensburg and myself and in the boardroom handed to the deputy sheriff the two memory sticks to which the data had been downloaded. In addition Clulow handed to the deputy sheriff three packs of hardcopy printouts comprising 15 pages in total that were signed and dated by Mr van Rensburg for identification purposes.

23.      At 15h50 the deputy sheriff, Clulow and I left the execution address.

24.      …………….”

[27]     Mr Rakitzis made an electronic recording of what happened after he and the sheriff arrived at the execution address. A transcription of the recording reads as follows:

“Rakitzis:        Ek gaan net alles opneem mense. My naam is Dino Rakitzis ek is ‘n onafhanklike prokureur aangestel deur die Hooggeregshof vanoggend om toesig te hou oor wat hier aangaan. Hier is ‘n kennisgewing van die Registrateur van die Hooggeregshof, dit is in Engels en ek gaan dit vir julle voorlees. Ek wil net almal se name kry wat hier is. Mnr. Germishuizen?

Unknown:         Germishuizen

Rakitzis:        en dan Mejuffrou?

Unknown:         Michelle Newton

Rakitzis:        Mevrou of Mejuffrou?

Unknown:         Mejuffrou

Rakitzis:        Mejuffrou Michelle Newton?

Unknown:         Ja

Rakitzis:        en?

Unknown:         Mevrou Germishuizen

Rakitzis:        Mevrou Germishuizen. En?

Unknown:         Jan Willemse.

Rakitzis:        Mnr Jan Willemse. En daar is Mnr Clulow, die onafhanklike computer expert, myself en die Balju. Ek gaan die kennisgewing van die Registrateur vir julle in Engels voorlees en as julle wil h dat ek moet dit in Afrikaans verduidelik sal ek dit doen.

Rakitzis:        The order being served on you requires you to allow the person’s name therein to enter the premises described in this order and to search for, examine, download, copy and remove the items and/or information and/or data specified in this order. You are also required to point out and hand over such items to the Sheriff, particulars are state in the order. When this notice is handed to you, you are entitled if you are an employee of any of the respondents, or in charge of the premises to contact any of the respondents or more senior officer of the respondent. Ek dink dit is moontlik belangrik vir u, u kan een van die base bel hier as jy wil.

Unknown:         Ja, ja

Rakitzis:        You are entitled to the attendance and the advice of such senior person, any of the respondents, or an attorney provided such person arrives without delay and not later than one hour after handing over of this notice.

Unknown:         Kan ek iets vra?

Rakitzis:        Ja

Unknown:         As jy ons ‘n uur gaan besig hou, hoe gaan ons daardie person binne ‘n uur hier kan wees?

Rakitzis:        Nee, die uur begin loop van wanneer ons nou …..

Unknown:         klaar is?

Rakitzis:        Ja.

Unknown:         Goed.

Rakitzis:        Ok.

Rakitzis:        Until the attorney or any of the respondents or such other officer arrives or until the time has passed for him or her to arrive you need not comply with any part of this order except that you must allow Constantine Rakitzis, the Sheriff and the computer operater Mark Clulow to enter the premises and to take such steps as in the opinion of Attorney Rakitzis is reasonably necessary to prevent prejudice to the further execution of this order. You are further entitled to have the Sheriff and Attorney Rakitzis explain to you what this notice and court order mean. You may be punishable for contempt of court if you obstruct the Sheriff wilfully and disobey the order, remove or intentionally cause harm of any item about to be attached, copied or removed. So ek dink ons gaan …. Wie is die baas van die plek?

Unknown:         Dave van Rensburg.

Rakitzis:        Het u sy telefoon nommer?

Unknown:         Ja.

Rakitzis:        Ek dink ons moet hom bel, hom in die hande kry. Is u die ontvangs dame?

Unknown:         Ja.

Rakitzis:        Laat is re l dat u sommer vir hom gou bel en ek kan moontlik met hom praat en vir hom s waarvoor ons hier is.

Unknown:         (inaudible).

Rakitzis:        Wie is die ander baas van die plek?

Unknown:         Hy is die enigste boss. Hy is die eienaar.”

[28]     Against the above background, I proceed to consider the instances in which the interim order was allegedly not complied with. I will disregard instances which I regard as insignificant or not properly established.

The steps necessary before service and execution of the order were not all taken

[29]     The sheriff was required under par 2.7 of the interim order to do certain things before he could serve and execute the order. He omitted to do everything he had to do. Although he read the Y2 notice, he failed to hand over a copy thereof before serving the order, as required under par 2.7.1 of the order. He also did not inform the persons present, as he was required to do under par 2.7.3 of the order, of their right to apply to Court for an variation or setting aside of the order, of their right to copies of documents and memory sticks onto which data was downloaded, and of their right to inspect the items taken. That is evident from Mr Ratzikis’ report, and also from his electronic recording of what happened.

[30]     Par 2.11 requires the sheriff, at the time when he serves the notice of motion, to inform those present that the execution of the interim order does not dispose of all the relief sought by the applicant. It does not appear from the return of service or from any other evidence that this was done.

The respondents were not permitted to make copies of the seized items

[31]     Mr van Rensburg, in his answering affidavit, described his attempts to obtain copies of the items and data seized by the search party as follows:

“At the conclusion of the search and, before the party was about to leave, Mr Hendrik Heystek, a business associate of mine asked, on behalf of the third respondent, for copies of what was being taken. Mr Heystek is a qualified attorney and had previously practised as such. Upon reading through the order, he noticed that the third respondent was entitled to copies of what had been taken at its premises. …… Mr Ratzikis replied that I could inspect what had been printed at the offices of the deputy sheriff. He was referring to the fifteen pages that had been printed out and which I had initialled. Thereupon, Mr Heystek demanded to know what the position was in respect of the data that had been electronically copied. ……. The deputy sheriff replied that we were not entitled to copies and, despite the insistence by Mr Heystek and I that we be given copies, the deputy sheriff refused to provide any copies of what was taken. His refusal was echoed by Mr Ratzikis. He replied that the third respondent would be entitled to copies once it came to discovery, which would be at about eighteen months’ time. Mr Ratzikis and the deputy sheriff persisted with this attitude even after Mr Heystek pointed out the relevant portions of the order that entitled the third respondent to copies.”

Mr Heystek confirmed the above in a supporting affidavit.

[32]     Mr Ratzikis replied as follows in an affidavit annexed to the applicant’s replying affidavit:

“It is correct that Heystek wanted copies of the items being attached and removed by the Sheriff. However, as it was late in the afternoon and there were no additional USB memory sticks it seemed practical and was generally agreed that the Sheriff would seal the items and keep them in his custody. It was also agreed that those who required copies could then, together with the Applicant’s attorney, arrange to copy the items at the Sheriff’s office. The Sheriff confirmed that he would make copying facilities available. This is in compliance with paragraph 2.7.3.2 of the court order.”

This reply was confirmed by the sheriff in a supporting affidavit.

[33]     Mr Ratzikis’ explanation for the failure to make copies, namely that it was late in the afternoon, is unacceptable. He admits in his report, which was compiled before receipt of the answering papers, that he search ended at 15h50, when the search party left the execution address. The search commenced at 14h25. The length of time which would have been required to duplicate the information copied electronically was not stated. It could hardly have been longer than 1hour and 25 minutes which it took Mr Clulow to find and download the relevant data from the third respondent’s computers onto the two memory sticks. The excuse that there were no additional USB sticks available, is also unsatisfactory. Electronic copies can be made in ways other than onto USB sticks, such as onto CD-Roms or disks.

[34]     The allegation that it was “generally agreed” that the items would be removed and copied later, seems feigned. The use of the passive term, designed to avoid giving details of who concluded the agreement and in what context it was entered into, wraps it in suspicion. Although Mr Ratzikis took care to record significant conversations, he does not provide a transcript or note of the alleged agreement. I would have expected that Mr Ratzikis would have recorded an agreement permitting such a significant variation from the terms of the interim order. There is also no mention of the alleged agreement in his report.

[35]     In this case, following the Plascon-Evans approach, the issue concerning copies must be decided in accordance with the respondents’ version, viz that the third respondent was refused copies. Even if I were to accept the explanation that copies were not made because of insufficient time, there was still a material breach of par 2.7.3.2 of the court order, as I will demonstrate hereunder. The vague allegation that it was “generally agreed” that the items would be removed and copied later, cannot prevail against the respondent’s contrary account of what happened when copies were requested.

[36]     One of the reasons for allowing a party from whom items are seized pursuant to an Anton Piller order, to copy the items before they are removed, is to protect the party against possible modifications of the items. Mr Mynhard (a consultant to the respondents) made an affidavit to which he annexed a copy of a file stored on a memory stick removed by Mr Clulow which contains an annotation that it was “modified” on 23 August 2005. Mr Fisher (on behalf of the applicant) replied as follows:

“No ‘modification’ of a memory stick occurred on 23 August 2005. This was the date upon which I inspected the material in the Deputy Sheriff’s possession in terms of paragraph 2.9 of the court order ….. The software merely logged the date of the inspection as a ‘modification’. In any event, the second USB memory stick contains essentially the same information as what is contained on the first one. If necessary, the contents of the two memory sticks can be utilized for comparison.”

If each of the two memory sticks contained the same information, I would have thought that one them could have been left with the respondents as their copy of the items taken. Be that as it may, the argument about the alleged modification illustrates the danger inherent in allowing the removal of items (particularly items containing electronic data) without leaving copies with the person from whom the data was taken.

The sheriff did not remove the items in a container sealed by him

[37]     The interim Anton Piller order stipulates that if the time required for making copies of documents or of memory sticks onto which information or data was copied, renders the duplication thereof impractical, the sheriff must either not remove the items or remove it in a container sealed by him. If the sheriff removes the items in a sealed container, he may not open the container except to give effect to the interim order. The sheriff, in his return, did not refer to Mr Heystecks’s request for copies of the documents and data downloaded onto the memory sticks, nor did he state that he removed the documents and memory sticks in a sealed container.

[38]     Mr van Rensburg alleged in his answering affidavit that the items removed by the sheriff were not sealed, but that they were placed in a folder which the sheriff carried with him. The folder contained a considerable number of other documents. The allegation by Mr van Rensburg that the items seized were not sealed but taken away in an unsealed folder also containing other documents, was not denied in reply. I must therefore accept it as correct. The failure by the sheriff to place the items in a sealed container before removing them, is a material breach of the interim order.

The sheriff did not make a detailed inventory of items attached and data copied

[39]     The Anton Piller order requires the sheriff to –

“immediately make a detailed inventory of all items attached and information and/or data copied”.

The so-called inventory reads as follows:

                  “2 Memory Sticks USB
                  Lot Documents (Print outs)
                  15 Bladsy”

It is impossible to ascertain from it what documents were taken and what data have been copied. It can, by no stretch of the imagination, be described as a detailed inventory.

[40]     Mr Clulow, the computer expert who was part of the search team, attempted to explain the failure by claiming that there was insufficient time to make a proper inventory. He stated:

“I confirm that to make a detailed inventory of all the data that I copied onto the two USB memory sticks would have been practically impossible in the time constraints available. In its uncompressed format alone, the data would have comprised tens of thousands of pages which would have taken more than a day to record in an inventory.”

[41]     The search party left the execution address at 15:50. In terms of the interim order, they were entitled to remain at the address until 18:00. Surely it would have been possible to spend the last two hours before 18:00, and also the 30 minutes that Mr Clulow waited for the data to download, to make some kind of summary towards the identification of the electronic data copied. A full description of the hardcopy documentation which was taken, would certainly have been possible. Even if it would have required a full day to make an inventory, then it ought to have been done the very next day, with an appropriate variation of the court order being sought.

[42]     The order to make an inventory is obligatory. It was not open for the sheriff to exercise a discression not to make an inventory, or to provide a ten word document purporting to be an inventory. The failure on the part of the sheriff to make a proper inventory is unacceptable, and a serious infraction of the court order.

CONCLUSION

[43]     The flaws in the execution of the interim order are significant. That alone is sufficient reason for the Court to set the order aside. The applicant cannot be heard to say that the respondents were not prejudiced by the non-compliance with some or all of the requirements contained in the order. Nor can the applicant escape the consequences of non-compliance by putting forward what it submits are good reasons for the non-compliance. If the persons responsible for the execution of the interim order are unable to comply with the terms of the order to the letter, application for a variation must be made.

[44]     An Anton Piller order has enormous potential for causing harm to those upon whom it is executed. The persons responsible for its execution cannot be allowed to deviate from its requirements in the belief that there is good reason for them to do so, or that it will cause no prejudice. It is not for them to decide those issues. Should the Court on the return day of an interim order accept less than full compliance, it would open the door for future deviations which might or might not cause prejudice. If cases where there was prejudice, the harm would have been done when the return day arrives. Parties must be made to realise that the Court will require strict compliance with an interim order in all cases, and that any non-compliance (unless it is insignificant) will result in the order being set aside.

[45]     After Ms Robinson completed her argument of Friday 14 October 2005, the matter stood down to Tuesday 28 October for Mr Kruger’s reply. On Tuesday, before commencing his reply, Mr Kruger applied from the bar for a postponement in order to supplement the applicant’s papers by further affidavits from the sheriff and the independent attorney (Mr Rakitzis) relating to the execution of the interim order. Ms Robinson strenuously objected to a postponement. I refused the application for a postponement. The flaws in the execution of the order were pertinently alleged by the respondents in their answering affidavits. Both the sheriff and the independent attorney gave affidavits which formed part of the applicant’s replying papers, in which they dealt with the alleged shortcomings, albeit rather superficially. No substantive application was made to file further affidavits, and no reason was given why the sheriff and the independent attorney did not deal more fully with the alleged shortcoming in their previous affidavits. All that was put before the Court was a letter from the applicant’s attorneys to the respondents’ attorneys which contains allegations relating to the sealing of the seized items, and a letter from Mr Rakitzis which take the matter no further. Both letters were handed up from the bar, and both were dated after Ms Robinson finished her argument.

[46]     I have come to the conclusion that because the execution of the interim order was significantly flawed, it should be set aside. This conclusion make it unnecessary for me to consider or decide upon the question of whether the interim order would have been granted at all, if the judge who granted the order had been aware of what Ms Robinson submits are the “true facts”.

[47]     I turn to the issue of costs. Costs relating to the appearance on 11 August 2005 were reserved. In my view, those costs should follow the outcome of the case. Ms Robinson asked for costs of two counsel, and also for costs on a punitive scale. I am of the view that the complexity of the issues in this case warrants the employment of two counsel. There is, however, no justification for costs on a punitive scale. The flawed execution of the interim order must be laid at the door of the sheriff and those who assisted him. There was no untoward conduct by any officers or employees of the applicant, nor by the applicant’s attorneys.

[48]     For the reasons set out above, I order as follows:

(a)     

The interim order made on 11 August 2005 is set aside.
(b)      The sheriff is ordered to return to the respondents all items seized during the execution of the order.
(c)      The applicant is ordered to hand over to the respondents all copies which it might have made of any such items.
(d)      The applicant must pay the respondent’s costs, including the costs of two counsel, and including the costs reserved on 11 August 2005.

_______________
A GILDENHUYS
JUDGE OF THE HIGH COURT
6 December 2005

Appearances:

For the applicant
         MR HJ KRUGER
instructed by
         SAVAGE JOOSTE & ADAMS.

For the respondents
         MS RM ROBINSON
with her
         MS GIAI-COLETTI
instructed by
         BELL DEWAR & HALL.