THE HIGH COURT OF SWAZILAND
the matter of
ESTATES LIMITED Plaintiff
HAYTER N.O. Defendant
PLAINTIFF : Miss
DEFENDANT : Mr.
plaintiff, by a notice dated 23rd February 1993 applied to the court
for an order requiring the defendant to make available for inspection
a voluntary sworn statement made by a Mr. D.R. Elworthy to the
defendant's attorney Mr. P.W. Keyter. In support of the application
it relied on an affidavit by Mr. Robert A. Crabtree, who is one of
defendant made an answering affidavit. He also applied to strike out
various portions of Mr. Crabtree's affidavit and the first annexture
to it, on the grounds that they contained material that was
vexatious, scandalous, irrelevant or speculative.
11th March, I made orders in terms of the defendant's application and
refusing the plaintiff's application to compel discovery of the
document. At the time I gave short
but I indicated that I would give fuller reasons in due course and
that I would also then deal with the question of costs. I now do so.
relevance of the document in question is not in dispute. The. issue
here is whether it is a document in respect of which the defendant is
entitled to claim legal professional privilege.
Crabtree attached as annexure 1 to his affidavit a copy of what he
described, in paragraph 4, as his complain No.11 to the Swaziland
Institute of Accountants. This (inter alia) accused the defendant of
supressing evidence during an inquiry held by him as liquidator.
Although neither the application nor the defendant's answering
affidavit said so in terms, I understand from what was said in
argument that this was a reference to an inquiry held by the
defendant as liquidator of Tonkwane Sawmill Co. Limited under section
65 of the Insolvency Act 1955 read with section 183 of the Companies
and Associations Act 1912.
Mr. Crabtree was alleging was that, having obtained a sworn statement
from Mr. Elworthy, the defendant then deliberately —
and by clear implication- dishonestly -suppressed it.
complaint contained in Annex 1 referred to an affidavit from Mr.
Elworthy which, in the complaint itself (i.e. the complaint to the
Institute) was described as being at page 4 of an Annexure 16 -
presumably of the complaint itself. An affidavit from Mr. Elworthy
was also annexed to Mr. Crabtree's affidavit here.
affidavit by Mr. Elworthy (which is not the voluntary sworn statement
for which discovery was sought) according to its tenor deals with a
report made by the defendant. Its
is to take issue with aspects of the report relating to Mr. Elworthy.
Crabtree also incorporated in Annex 1 of his affidavit a copy of a
letter apparently addressed by him to the Master of the High Court.
According to its tenor, this has to do with an application to remove
the defendant as liquidator of Tonkwane Sawmill Company Limited (in
4 and 5 of this letter also included allegations that the defendant
dishonestly suppressed evidence at the inquiry, and Mr. Crabtree
relied on them in paragraph 5 of his affidavit here.
allegations that the defendant suppressed evidence therefore emanated
from Mr. Crabtree himself. His affidavit did not identify formally
the affidavit from Mr. Elworthy that was included in his annexures.
The matters disclosed by Mr. Crabtree in his own affidavit, on the
plaintiff's application, were in themselves not sufficient to enable
the court to obtain a full understanding of the context in which Mr.
Elworthy made the affidavit annexed to Mr. Crabtree's affidavit. In
the present- action, the plaintiff has not averred in its pleadings
that the defendant acted dishonestly.
defendant applied to strike out Annexure 1 and its attachments in Mr.
Crabtree's affidavit as being vexatious and scandalous and/or
irrelevant. He also applied to strike out the allegations in
paragraph 5 of the affidavit, that it was clear that he was accused
of suppressing evidence in the inquiry, on the basis that it was
vexatious and scandalous.
paragraph 6 of the affidavit, Mr. Crabtree went on to allege that in
an affidavit made on 17th February 1992, the
had disclosed that he had in his possession a sworn witness statement
by Mr. Elworthy made prior to and in contemplation of the present
proceedings. (In fact this is a reference to the defendant's
affidavit of 17th February 1993 made by him in terms of rule 35(4) of
the notice first given by the plaintiff in respect of the present
matter under that rule.)
Crabtree then proceeded to aver that this could not be the sworn
statement for which the plaintiff plaintiff was seeking compulsion of
discovery, because it "relates to the enquiry and is the reason
why Mr. Elworthy was excused from attending it".
paragraph 7.1, Mr. Crabtree referred to paragraph 4.11 of an
incomplete letter, which he attached as Annexure 2 to his affidavit.
Again, his own affidavit described the nature of this portion of a
document somewhat unclearly, but the defendant did not dispute that
it was two pages of a letter written by him to the Institute in
response to Mr. Crabtree's complaints to the Institute. According to
its tenor, the letter was written on 30th November 1992. In paragraph
4.11 it states (inter alia):
wish, however, to specifically deny any suggestion that I endeavoured
to cover up evidence at the Enquiry. Mr. Elworthy had provided
information to me as the modus operandi and had also voluntarily made
a sworn statement to attorney P.W. Keyter. I was advised that there
was no need to put him under oath at the Enquiry."
paragraph 7,1 onwards of his affidavit Mr. Crabtree relied on this
excerpt to contend that the defendant took a sworn statement from Mr.
Elworthy (a) for the purposes of
inquiry and (b) in lieu of oral testimony at the inquiry - and to
contend further that it could not have been taken in contemplation of
the present proceedings. In these paragraphs of his affidavit, he
also stated, in support of his contention, that having been served
with a subpoena to attend the inquiry on several occasions, Mr.
Elworthy was never called to give oral testimony, that he ceased to
attend after November 1989 or thereabouts, and that the present
proceedings were not commenced until July 1990. In paragraph 7.4, he
described the inquiry as being held "in order to enable the
defendant to report to the creditors and the Master about the affairs
of the company in liquidation".
defendant applied to strike out paragraph 8 on the basis that it was
irrelevant and paragraph 9 because it was argumentative, irrelevant
or speculative. The first of these two paragraphs was in my view
irrelevant and the second a matter for argument - the relevance of
the sworn statement, as I have indicated already is not in dispute.
paragraph 10, Mr. Crabtree stated that he had been advised that the.
application to compel discovery was necessary because, inter alia,
the plaintiff's other application for discovery did not describe the
sworn statement sufficiently. In paragraph 11.2 or 11.3, he referred
to the fact that in item 65 of the First Schedule to the original
affidavit of discovery given by the defendant, the latter had
disclosed "Typed notes of statements by Messrs Crabtree and
Elworthy." He relied on this as demonstrating that that the
sworn statement itself should also have been made available on the
his original affidavit of discovery, in paragraph 3 as read with the
second part of the first schedule to it, the defendant had disclosed
but claimed privilege for statements
witnesses brought into existence "prior to, in contemplation of
and during the continuance" of the proceedings. In his affidavit
of 17th February 1993, he had sworn on oath, at paragraph 3.1.1, that
he had in his possession a sworn witness statement of Mr. Elworthy
made prior to and in contemplation of the proceedings; at paragraph
3.2, that he objected to its production on the ground of privilege;
and at paragraph 3.3, that he did not have any other document that is
now relevant in this application.
his affidavit in answer on the present application, he denied that he
had ever suppressed evidence.
paragraph 8, he deposed that the sworn statement was obtained from
Mr. Elworthy in November 1989 and that at that time proceedings in
respect of the matters in dispute (i.e. here) were in contemplation,
extensive correspondence having already been entered into. He annexed
to his affidavit four letters (marked JH1-4) written on various times
from August to October in 1989. It is apparent from this
correspondence that the plaintiff during that period did have the
present proceedings in contemplation, and that for his part the
defendant had under investigation matters to which his subsequent
counterclaims would relate.
paragraph 6.3, dealing with the purpose of the inquiry, the defendant
had deposed that Mr. Crabtree and other members of his family had
been called to give evidence on oath before the Master of the High
Court because they were then the controlling shareholders and
directors of the company in liquidation or of its associated company,
i.e. the plaintiff, and that the defendant considered it imperative
that they should be examined under oath as to the affairs of the
companies. In paragraph 8.3, he stated that the proceedings
encompassed in the counterclaims here were
because of his investigations into the books of the company in
liquidation and the evidence obtained from the Crabtree family at the
denied, in paragraph 8.5, that Mr. Elworthy's sworn statement was
obtained at the inquiry or that it formed part of the record of the
inquiry. In paragraph 8.6, he stated that his letter to the Institute
had been written in response to complaints made to it by Mr.
Crabtree. In paragraph 13, he said that the notes referred to in item
65 in the first part of the first schedule to his original affidavit
of discovery had been obtained by him at the ?outset of the
liquidation on 5th May 1988.
I have already indicated, I am satisfied that on the evidence before
me, the proceedings now before the court were as a matter of fact in
contemplation by the defendant at the time, in November of 1989, when
he obtained the sworn statement from Mr. Elworthy which he has
plaintiff has not shown that there is any basis for doubting the
defendant's statement on oath that he obtained the sworn statement in
contemplation of and for the purposes of these proceedings.
purpose of an inquiry or interrogation under section 65 of the
Insolvency Act (as applied) is to discover information, relating to
the company's affairs, which the creditors or the liquidator do not
possess or cannot effectively establish: see Spain N.O. and Another v
Officer Designate and Others (1958)3 S.A. 448((W), referred to in
Agyrakis and Another v Gunn and Another (1963)1 S.A. 602 (cited by
counsel) at paragraphs D - E on page 604. The liquidator was in my
view not obliged, on what is before me, to call Mr. Elworthy to give
evidence at the inquiry. He was entitled to take a sworn statement
from Mr. Elworthy for
purposes of the present proceedings. He is entitled to use
information obtained at the inquiry for the purposes of litigation in
which the company is involved, including these proceedings but I do
not consider that it follows that, because he may be bound to
disclose for inspection the record of those proceedings (as he has
done here), he is also bound to disclose for inspection the sworn
statement of Mr. Elworthy.
defendant has said on oath that he obtained Mr. Elworthy's sworn
statement for the purposes of these present proceedings. The excerpt
that I have already cited from his letter of 30th November 1992 to
the Institute, i.e. in paragraph 4.11, is not a statement that he
took the statement for the purposes of the inquiry. I would have been
reluctant to construe it as such without disclosure of the whole
context in which it was made, but in any event what it says, and all
that it says, is that Mr. Elworthy had provided information to him,
that he had also made a sworn statement to the defendant's attorney,
and that the defendant was advised that there was no need to put him
under oath at the inquiry. I see no good reason to go behind his oath
(a) that he obtained the statement in contemplation of these
proceedings and (b) that it was not obtained for the purposes of the
inquiry United Tobacco Companies (South) Ltd v International Tobacco
Co. of S.A. Limited (1953) TSA 66(T).
replying on the application, counsel for the plaintiff raised the
question of waiver. On this I agree with opposing counsel's
submission that Item 65 of the first part of the first schedule to
the defendant's original affidavit of discovery relates to a
different category of documents. They are not of a confidential
nature. For that reason, in my view no issue of waiver does arise.
material complained of by the defendant in Annexure 1 and its
attachment and in paragraph 5 of Mr. Crabtree's affidavit is in my
view vexatious and scandalous. The allegations are of a very serious
nature. It has not been pleaded in the plaintiff's particulars of
claim that the defendant acted dishonestly. In support of this
application to compel discovery, Mr. Crabtree has not disclosed in
full the circumstances in which he made those allegations to the
Institute and it is in my judgment apparent that in seeking to
justify their inference, he has misconceived the nature and purpose
of the inquiry that was held. They ought not to be allowed to stand.
have already dealt with the objection to paragraph 8 and 9 of the
these reasons I granted the defendant's application and dismissed
that of the plaintiff.
Keyter asks for party and party costs, save that he asks for attorney
and client costs on his own application. For the same reasons as I
gave on the application for discovery and striking out that have
already been dealt with, I make an order for costs in those terms.
The defendant has, at this stage in the proceedings, been put to
trouble and expense that he ought not to have to bear, by vexatious
and scandalous allegations.