Caxton and CTP Publishers and Printers Limited v Novus Holdings Limited

Caxton and CTP Publishers and Printers Limited (Caxton), a minority shareholder (7.5%) and commercial competitor of Novus Holdings Limited (Novus), served a demand under s 165(2) of the Companies Act 71 of 2008 requiring Novus to institute derivative proceedings against Lebone Litho Printers (Pty) Ltd. The contemplated action sought to have a commission agreement between Novus and Lebone, linked to a Department of Basic Education printing contract, declared unlawful and void. Novus appointed retired SCA Deputy President Harms to investigate the demand under s 165(4). After receiving his report, Novus refused to institute proceedings. Caxton then brought a main application under s 165(5) for leave to litigate in Novus’ name. In resisting that application, Novus referred in its answering affidavit to numerous documents, including the Harms report. Caxton invoked Uniform Rule 35(12) to compel production of those documents. Novus refused, claiming irrelevance, privilege, confidentiality, and lack of entitlement at the s 165(5) stage. The High Court refused to compel production. Caxton appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court order was set aside and replaced with an order compelling Novus to produce specified documents under Rule 35(12), subject to a detailed confidentiality regime, and directing further procedural steps in the main application.

The case clarifies the scope and operation of Uniform Rule 35(12) in South African civil procedure, particularly in the context of derivative actions under s 165 of the Companies Act. It confirms that parties cannot rely on documents in affidavits while withholding them from opponents, and that statutory investigative reports are not automatically cloaked with legal privilege. The judgment reinforces procedural fairness and transparency in interlocutory litigation.