Case summary written by Courtney Altmuner and checked by Stefan Bezuidenhout
27 November 2020
BACKGROUND:
This matter deals with an interlocutory application, whereby Big Bell Investments (Pty) Ltd t/a Citynet (“the Applicant”), sought an order for a paragraph and an annexure in Willow and Aloe Grove Body Corporate’s (“the Respondent”) particulars of claim (“POC”), in action proceedings between the parties, to be struck out on the basis that same constituted “without prejudice” correspondence and was therefore inadmissible and irrelevant.
The High Court of South Africa, Gauteng Local Division, Johannesburg (“the Court”) dealt with the “without prejudice” rule and the legal principles of same, which were common cause between the parties.
The court held that the “without prejudice” rule under South African law is well established, and provides that “statements, including admissions of liability, made in an attempt to settle litigation between parties are inadmissible in subsequent litigation between them”, save in limited instances, such as ,for the purpose of interrupting prescriptionand an act of insolvency, where a party would want to establish that its opponent is unable to pay its debts. The Court further held that it is trite that inadmissible evidence is irrelevant.
The Court discussed the correct method to adopt for the interpretation of “without prejudice” negotiations for a settlement, is an objective approach, as confirmed in the case of Naidoo v Marine & Trade Insurance Co Ltd,[1] where it was held by Trollop JA that “the true enquiry is how a reasonable man in the recipient’s position would have read and understood [the without prejudice letters].”
The Court held that the intention behind the Respondent annexing the “without prejudice” correspondence to the POC, was to illustrate that the Applicant acknowledged liability to the Respondent. The Court held further that, the way in which the annexure had been formulated, was clearly designed to facilitate settlement between the parties, and that a reasonable man in the Respondent’s position would have concluded that it was an attempt to settle, as same contains an admission and a request to take part in honest and cordial discussions as to the amount that may be due by the Applicant, and to consequently avoid having to litigate.
The Court held that this type of correspondence, is “without prejudice”, as it forms part of settlement negotiations and does not fall within the ambit of one of the exceptions, as set out hereinabove.
The Court discussed the prescripts of Rule 23(2)(b) of the Uniform Rules of Court, in that a Court shall not grant an application to strike out, unless it is satisfied that the Applicant’s defence will be prejudiced, if the application is not granted. In these circumstances, the Applicant would have to plead to the allegations and annexure contained in the POC, where same would ordinarily be protected by the “without prejudice” rule, and the Applicant would not have to plead thereto.
Award
The Court held that the paragraph and annexure to the Respondent’s POC should be struck, with the Plaintiff being ordered to pay the costs of the application.
Value
The principle of “without prejudice” under South African law is well established, and provides that “statements, including admissions of liability, made in an attempt to settle litigation between parties are inadmissible in subsequent litigation between them”, save in limited instances, such as ,for the purpose of interrupting prescriptionand an act of insolvency, where a party would want to establish that its opponent is unable to pay its debts.
[1] 1978 (3) SA 666 (A) at 6758
