The point of departure under South African law is that every person should be afforded the opportunity to respond to evidence tendered against them; the so-called audi alteram partem rule. 

An Anton Piller is an exception to this rule.  The purpose of an Anton Piller order is to ensure that vital evidence is preserved for use in a subsequent trial.  It is a drastic remedy as the order is obtained ex parte (that is to say, with respect or in the interest of one party, namely the applicant, without notice to any potential respondents). 

The essential requirements for obtaining an Anton Piller order have been codified in our law.  In the case of Universal Studios Inc v Network Video (Pty) Ltd 1986 (2) SA 734 (A), and as repeated in Shoba v Officer Commanding Temporary Police Camp, Wagendrift Dam and Another; Maphanga v Officer Commanding, South Africa Police Murder and Robbery Unit, Pietermaritzburg, and Others [1995] ZASCA 49, [1995] 2 All SA 300 (SCA), 1995 (4) SA 1 (A), the court lists the following requirements: 

One, therefore, needs to carefully consider whether one can call upon this extreme remedy to preserve evidence where the remedy itself infringes upon the basic human right to privacy and dignity enshrined in our Constitution.  Although our courts have determined that the procedure has passed the test of reasonableness and justifiability under section 36 of the Constitution.  It has only been able to do so where courts apply strict limitations to ensure that the procedure is used only when absolutely necessary and, even then, strictly to the extent that the case in issue vitally requires it. 

In the case of Mathias International Ltd and Another v Baillache and Others [2010] ZAWCHC 68 (8 March 2010), 2015 (2) SA 357 (WCC) the learned judge noted that ‘(t)he impermissibility of the use of the procedure to enable searches to be undertaken to look for evidence to identify or found a case, as distinct from the preservation of evidence for use in an already identified claim, is fundamental.’  The purpose of the remedy is not to find a case against another (i.e., a fishing expedition), but to preserve the evidence to substantiate a case. 

But the buck does not stop with the award of the Anton Piller order. Once the order has been granted and executed, the respondent must on a return date, provided for in the initial ex parte application, show good cause why the objects and/or documents obtained through the execution of the Anton Piller order must not be delivered up to the applicant.  A failure to adequately specify the documents and/or objects to be seized during the execution of the order, thereby giving the parties conducting the seizure too wide powers, may very well be such a reason. 

The recent case of Cratos Capital (Pty) Ltd v Zimri Investments CC and Another (20968/2021) [2022] ZAWCHC 87 (24 May 2022) portrayed this issue.  The facts of the case can be summarized as follows. 

Cratos Capital (“the applicant”) traded in derivates on behalf of its clients.  The applicant had a contractual arrangement with Standard Bank Clear which acted as intermediary between the applicant and JSE Clear.  Standard Bank Clear is a clearing and trading member of JSE Clear (a wholly owned subsidiary and clearing house of the JSE). 

One of the applicant’s clients was Cygne Bleu (Pty) Ltd (“Cygne Bleu”).  Cygne Bleu was brought to the applicant as a client by Mr. Harper upon his employment with the applicant.  It is alleged in the supporting papers to the ex parte application that Cygne Bleu is the “alter ego” of the first respondent, Zimri Investments CC.  It is further alleged that the business of the first respondent is conducted by the second respondent from an address in Burgundy Estate where the Anton Piller order was executed. 

Cygne Bleu had investments in certain derivative instruments.  Derivative instruments present unique risks when compared to other securities.  One way to manage these risks is through the use of ‘margins’. Margins are there to ensure sufficient financial resources to honour derivative trades.  Depending on the direction of the mark-to-market, the investor’s margin is either debited or credited (known as ‘variation margin’). Variation margins are determined through the mark-to-market process by JSE Clear after the end of every business day.  The clearing member is then bound to the clearinghouse (i.e., JSE Clear) to pay all debit margins pertaining to the clients of its trading members by not later than 07:00 a.m. the next day. The required amount is paid by the clearing member (in this case Standard Bank Clear). Standard Bank Clear then sorts the information received from the clearing house and a reconciliation report is sent to each of the trading members.  The trading member (the applicant in this case), is then bound to pay any amount due in accordance with that report in respect of all its clients to Standard Bank Clear noon on that day. 

The applicant claims that it came into possession of email communications between Mr. Harper (the same employee that brought Cygne Bleu to the applicant as a client), and the second respondent, on the one hand, and two JSE employees who were responsible for determining the volatility levels of NNS options (which were the derivatives in which Cygne Bleu had an interest), on the other.  The email exchanges, which started in March 2018, evidenced attempts by Mr. Harper and the second respondent to persuade the two JSE employees to substantially reduce the volatility of levels that had been determined by them with reference to NNS options. They did so successfully. 

One such example is where Mr. Harper and second respondent persuaded the JSE employees to reduce the volatility level of the options from 26.5% to 21%.  The volatility level was already set at 26.5%.  This, in turn, resulted in a net positive mark-to-market gain on Cygne Bleu’s existing NNS options of R 1 369 900, whereas, prior to the reduction in volatility level, it would have suffered a net mark-to-market loss of R 5 070 400. 

As a result of the manipulations, Cygne Bleu owed the applicant over R 26 million in respect of variation margins for which the applicant had to account on its behalf to Standard Bank Clear.  Cygne Bleu failed to pay the applicant and was subsequently liquidated at the applicant’s instance. 

It is alleged that during the insolvency enquiries, the sole director of Cygne Bleu admitted that Cygne Bleu was the alter ego of the first respondent and that the second respondent had been the person responsible for its trading and business activities. 

This prompted the applicant to approach the High Court of South Africa, Western Cape, on an ex parte basis where it obtained an Anton Piller order.  The order was executed at the second respondent’s premises. 

On the return date, several discrepancies in the content of the Anton Piller order, as well as the execution thereof, came to light.  The second respondent, in its opposition, contended that the applicant had not made full and proper disclosure of all the relevant facts when making application for the order and that the application had failed to comply with the specificity requirement that is an essential element of an application for an Anton Piller order.  

The learned judge, in considering these arguments, found that the nature of the documentation subject to seizure in the Anton Piller order was far to widely stated in that it embraced any communications of whatsoever natures between the parties named. The order also left to any member of the searching party the unlimited authority to determine whether any item fell within the ambit of the authorized search and seizure operation.  This is wholly unacceptable and one of the things that the specificity requirement seeks to avoid. 

The court also noted the regrettable actions of the supervising attorney who permitted the search to commence before the arrival of the second respondent’s attorney, notwithstanding the request from the second respondent’s attorney to allow her thirty minutes to drive through to the premises to assist her client in the execution of the Anton Piller order.  The supervising attorney also made unnecessary personal remarks in its report on the tidiness of the second respondent’s home. 

In light of the above, the court ordered that the Anton Piller order is discharged, and the sheriff of the court is directed to return to the second respondent the material seized in the execution of the provisional order.  Thus, whatever probative value the seized material may have had in supporting the applicant’s case, such material will in all probability not make it before the court. 

This case highlights the importance of ensuring that great care is taken in seeking drastic relief on an ex parte basis.  The evidence obtained through an Anton Piller order could be the difference in succeeding with your claim, or having it dismissed.