Contango Trading SA v Central Energy Fund SOC Limited

The Central Energy Fund (CEF) and Strategic Fuel Fund Association (SFF), two state entities, instituted a review application to set aside their own decisions and agreements concerning the disposal of approximately 10 million barrels of crude oil reserves. Eight oil companies, including Contango Trading SA, Natixis SA, and Glencore Energy UK Limited, were cited as respondents in the review due to their interest in the impugned decisions. After receiving the review application, the oil companies issued notices under Rule 35(12) of the Uniform Rules requesting production of certain documents referred to in the CEF/SFF's founding affidavit. The respondents refused to produce these documents. The oil companies then brought Rule 30A applications to compel production. The documents in question included: (1) a "legal review" of contracts; (2) two legal opinions from senior counsel; (3) a KPMG report on financial implications; and (4) a PwC report. The CEF/SFF cited these documents in their founding affidavit when explaining a two-year delay in instituting the review proceedings. The high court dismissed the applications to compel production. The oil companies appealed.

• Whether a reference to a 'legal review' process constituted a reference to a document within the meaning of Rule 35(12)
• Whether legal advice privilege over counsel's opinions was waived by referring to their conclusions in the founding affidavit
• Whether the KPMG and PwC reports were protected by litigation privilege
• What constitutes waiver of legal professional privilege – the distinction (if any) between implied and imputed waiver
• The requirements for establishing litigation privilege

1. The appeals by Contango and Natixis regarding the legal review were dismissed. 2. The appeals by all three appellants regarding the counsel's opinions were dismissed. 3. The appeals by all three appellants regarding the KPMG report were upheld, and the respondents were ordered to disclose the KPMG report within 10 days. 4. Glencore's appeal regarding the PwC report was upheld, and the respondents were ordered to disclose it within 10 days. 5. Each party was ordered to pay its own costs of the appeal. 6. The high court's costs order was set aside and replaced with an order that the respondents pay the costs of the applications, including the costs of two counsel.

1. Under Rule 35(12), a party must refer to a specific document, not merely a process or category of documents, to trigger the obligation to produce it. A reference must be direct or indirect, not merely inferred. 2. Litigation privilege requires: (a) that the document was obtained for the purpose of submission to a legal advisor for legal advice; and (b) that litigation was pending or contemplated at the time. The purpose for which documents were obtained is determinative. 3. Waiver of legal advice privilege (whether termed 'implied' or 'imputed' waiver – the terms are synonymous) requires: (a) objective conduct by the privilege holder inconsistent with maintaining confidentiality; AND (b) that fairness in the litigation process requires disclosure because the privilege holder has made the privileged material part of their case in a way that prevents the opponent from responding fairly without access to it. 4. Mere disclosure of the conclusion or gist of legal advice, coupled with an express assertion of privilege, does not automatically constitute waiver. The court must examine: the nature and extent of the disclosure; whether the content of the advice was made an issue in the proceedings; whether the opponent needs the privileged material to respond fairly to the case advanced; and the overall context. 5. There is no overarching principle that privilege can be overridden on grounds of fairness alone. The rule is 'once privileged, always privileged' – only waiver can disturb it.

1. The court severely criticized the conduct of the state entities (CEF and SFF) and their legal representatives in dealing with the discovery requests. Their responses were described as 'contradictory', 'obtuse', and serving to 'obfuscate rather than clarify'. This conduct was 'not the conduct of organs of state who had a duty of candour when compiling their affidavits, and is to be deprecated.' 2. Wallis JA extensively discussed the evolution of the terminology around waiver of privilege, clarifying that the shift from 'implied waiver' to 'imputed waiver' in some Commonwealth jurisdictions was terminological rather than substantive. He noted that both terms refer to the same concept and criticized the suggestion in S v Tandwa that they represent different legal doctrines. 3. The court noted that arguments over waiver do not commonly arise with express waiver, but with cases where waiver is suggested by conduct. 4. The court observed that waiver is always a factual inquiry and that reference to ostensibly similar factual situations can be potentially misleading. Each case must be decided on its own facts. 5. Cachalia JA suggested that Glencore's extensive document requests amounted to a 'fishing expedition'. 6. The court noted the difficulty in resisting the inference that Glencore had embarked on a fishing expedition given that it abandoned many of its claims on the morning of the hearing and the relevance of documents obtained was 'not yet apparent'.

This case is significant for clarifying several important aspects of South African discovery law and legal professional privilege. It provides authoritative guidance on: (1) the scope of Rule 35(12) and what constitutes a 'reference' to a document; (2) the requirements for litigation privilege, emphasizing that the purpose for obtaining documents is critical; (3) the law on waiver of legal advice privilege, particularly clarifying that 'implied waiver' and 'imputed waiver' are synonymous terms, not separate doctrines; (4) that waiver requires both objective conduct inconsistent with maintaining confidentiality AND unfairness in the litigation process if disclosure is not ordered; (5) that mere disclosure of the conclusion or gist of legal advice does not automatically waive privilege – the extent of disclosure, incorporation into the case, and necessity for the opponent to respond are all relevant factors. The judgment also emphasizes the duty of candour expected of state entities in litigation and criticizes the obfuscatory conduct of the respondents in resisting legitimate discovery requests.