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[2015] ZAGPJHC 66
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Mullane and Another v Smith and Others (2014/28264) [2015] ZAGPJHC 66; [2015] 3 All SA 230 (GJ); 2015 BIP 474 (GJ) (20 April 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 2014/28264
DATE:
20 APRIL 2015
In
the matter between:
MULLANE,
ANNE
..........................................................................................................
First
Applicant
COLEMAN
TUNNELLING AFRICA (PTY)
LTD
...................................................
SecondApplicant
And
SMITH,
PATRICK
JOSEPH
.......................................................................................
First
Respondent
AMOD,
AHMEN
RASHEED
..................................................................................
Second
Respondent
BOTHAR
BORING AND TUNNELLING
SOUTH
AFRICA (PTY)
LTD
....................................................................................
Third
Respondent
JUDGMENT
SPILG,
J:
NATURE
OF APPLICATION AND THE PARTIES
1.
The case came before me on 12 August 2014 as an
urgent application in terms of which interdicts were sought to
prevent the respondents
from unlawfully competing against the second
applicant. I was of the view that the matter was
prima
facie
urgent and I was disposed to
provide some form of urgent relief of short duration bearing in mind
that the respondents had only
been afforded since 4 August to deliver
an affidavit. Moreover
Adv
Dippenaar
indicated that the first and
second respondents wished to engage an IT expert to deal with the
allegations regarding the improper
accessing and deletion of data
that was located in what is commonly known as a ‘
drop
box’
.
2.
Fortunately the matter could be directed to my court during the
opposed motion court week of 8 September 2014. The respondents
accepted that there would be no real prejudice if a diluted interim
order along the lines I had mooted was granted.
Mr Nowitz
on
behalf of the applicants agreed not to persist with the interim
orders as originally formulated. The order made as an interim
solution was without prejudice to either party’s rights,
including the respondents’ right to contest urgency.
3.
Ms Mullane is the first applicant and a 24% minority shareholder in
the second applicant. She is also a director of the
second
respondent and brought the application seeking leave to institute
the proceedings in the name, and on behalf, of the
second applicant
in terms of section 165(6) of the Companies Act 71 of 2008 (‘
the
Companies Act’
>). She did so because, at the time, she
believed that the first respondent was still a director in the second
respondent and that
he would frustrate the application by challenging
any proceedings purportedly brought by the company against him. He
certainly
has remained a 24% shareholder in the second respondent.
4.
The second applicant is Coleman Tunneling Africa (Pty) Ltd which
conducts business as a pipe jacking and specialist tunneling
contractor (‘
Coleman Tunneling
“).
5.
As mentioned earlier the first respondent is also a 24% shareholder
in Coleman Tunneling. It subsequently emerged that he had
subsequently resigned as director.
6.
The second respondent was an erstwhile employee of Coleman Tunneling
who resigned with effect from 15 July 2014. He is now employed
by the
third respondent.
7.
The third respondent is Bothar Boring and Tunneling (Pty) Ltd.
Although it did not fully identify itself and the applicants
mentioned only its trading name, it is evident that the
third respondent is an external company that was obliged to
register
with the Companies and Intellectual Property Commission (‘
the
Commission
‘) under
section 23
of the
Companies Act.
However
its directors are Australian residents and the company is a
wholly owned subsidiary of Petroserv International (Pty) Ltd, itself
an Australian Company with its head office in Brisbane. Petroserv is
a specialist engineering service company involved
inter alia
in
the installation of underground services and facilities used for
housing cables.
The
third respondent claims that through an associate company, EnviroServ
South Africa it “already
has a footprint in South Africa and
Southern Africa with several multinational industry players amongst
its current customer base”
.
8.
It is common cause that the third respondent competes directly with
the second applicant for custom. It is also common cause
that they
compete in a specialised sector where the client base is readily
identifiable because there are a relatively few
number of
clients, which aside from the large civil contractors, include
municipalities, utility corporations and transport authorities
whose
details are generally in the public domain.
INTERIM
ORDER OF 13 AUGUST
9.
The terms of the order made on 13 August 2014
read:
1.
The Application is postponed for
hearing before Spilg J at 09h30 on 8 September 2014.
2.
The Respondents are to deliver their
Answering Affidavit by 13h00 on 25 August 2014.
3.
The Applicants are to deliver their
Replying Affidavit by 16h00 on 1 September 2014.
4.
The parties are directed to deliver
their Heads of Argument by 13h00 on 4 September 2014.
5.
The relief sought in prayer 2 of
Part A of the Notice of Motion is postponed for hearing on 8
September 2014.
6.
Pending the outcome of the hearing
on 8 September 2014, with full reservation of their rights, including
the right to argue urgency
and without any admission of liability,
the Respondents furnish the following undertakings, which are
embodied in this Order of
Court:
6.1.
not to unlawfully utilise,
communicate and/or publicise any of the Second Applicant’s
confidential information and/or trade
secrets;
6.2.
not to approach directly or
indirectly, or assist any other person in approaching directly or
indirectly, any client, customer or
principal of the Second Applicant
or to engage with any of them in order to unlawfully compete with the
Second Applicant, for the
benefit of the Third Respondent or any
other person;
6.3.
not to directly or indirectly and
whether for their own benefit or the benefit of any other person,
offer employment to and/or entice
any employee of the Second
Applicant to become employed by the Third Respondent or any other
entity with which they are associated
in order to unlawfully compete
with the Second Applicant; and
6.4.
not to take advantage, to the
prejudice of the Second Applicant, of any relationship involving the
use of the Second Applicant’s
confidential information with the
Second Applicant’s clients or customers or any other employee,
which they established during
their employment with the Second
Applicant, for the benefit of the Third Respondent or any other
person;
7.
Each Respondent is directed to
return to the Second Applicant, all of the Second Applicant’s
confidential and proprietary
information and/or all copies thereof,
including but not limited to:
7.1.
BEE and the 198 more folders
contained in the device referred to in annexure JD1 on page 93 of the
Applicants’ Founding Affidavit;
and
7.2.
0001 Docs Sent for Coleman’s
BEE.pdf and 712 more files contained in the device referred to in
annexure JD1 on page 93 of
the Applicants’ Founding Affidavit
which
may be in such Respondent’s possession or under his/its
control.
8.
the costs of this Application are
reserved.
CHARACTERISATION
OF APPLICANTS RIGHTS
10.
The most important feature of this case is that neither the first or
second respondents were subject to a restraint of trade
agreement.
11.
Accordingly the applicant can only rely on a claim based on unlawful
competition against them and, in respect of the first
respondent only, an additional right founded on the breach of the
director’s duty towards his or her company, provided of
course
that he was still a director at the time.
UNLAWFUL
COMPETITION
12.
The
starting point is that competition is as essential for the operation
of an efficient free market economy as is the right to
freedom of
trade, occupation and profession in a constitutional democracy
[1]
.
Nonetheless each is limited; the former by the common law principles
of unlawful competition as a form of delict under the
Aquilian
action and the latter by the correlating rights of others, which
would include the rights to protection of property under section
25
of the Constitution. Both are also impacted by a number of statutes
which, aside from the
Competition Act 89 of 1998
, directly or
tangentially regulate business practice and competition law
[2]
.
13.
The right to protection from unlawful competition requires a wrongful
interference with another’s rights as a trader.
See
Schultz
v Butt
1986(3) SA 667 (A) at 678G.
14.
While mentioning at 678G that as “
a general rule, every
person is entitled freely to carry on his trade or business in
competition with his rivals”
Schultz
confirms at
678H to 679E that:
In
order to succeed in an action based on unfair competition, the
plaintiff must establish all the requisites of Aquilian liability,
including proof that the defendant has committed a wrongful act. In
such a case, the unlawfulness which is a requisite of Aquilian
liability may fall into a category of clearly recognized illegality,
as in the illustrations given by Corbett J in Dun and Bradstreet
(Pty) Ltd v SA Merchants Combined Credit Bureau (Cape) (Pty) Ltd
1968
(1) SA 209
(C) at 216F - H, namely trading in contravention of
an express statutory prohibition; the making of fraudulent
misrepresentations
by the rival trader as to his own business; the
passing off by a rival trader of his goods or business as being that
of his competitor;
the publication by the rival trader of injurious
falsehoods concerning his competitor's business; and the employment
of physical
assaults and intimidation designed to prevent a
competitor from pursuing his trade. But it is not limited to
unlawfulness of that
kind. In the Dun and Bradstreet case supra at
218 CORBETT J referred to the fact that in the cases of Geary &
Son (Pty) Ltd
v Gove (supra ) and Combrinck v De Kock
(1887) 5 SC 405
emphasis was placed upon criteria such as fairness
and honesty in competition and said:
"Fairness
and honesty are themselves somewhat vague and elastic terms but,
while they may not provide a scientific or indeed
infallible guide in
all cases to the limits of lawful competition, they are relevant
criteria which have been used in the past
and which, in my view, may
be used in the future in the development of the law relating to
competition in trade."
See
also Stellenbosch Wine Trust Ltd and Another v Oude Meester Group Ltd
; Oude Meester Group Ltd v Stellenbosch Wine Trust Ltd
and Another
1972 (3) SA 152
(C) at 161G - H. In judging of fairness and honesty,
regard is had to boni mores and to the general sense of justice of
the community
(cf Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn
Ghwano (Pty) Ltd and Others
1981 (2) SA 173
(T) at 188 - 189 and the
cases there cited, and Lorimar Productions Inc and Others v Sterling
Clothing Manufacturers (Pty) Ltd
; Lorimar Productions Inc and Others
v OK Hyperama Ltd and Others ; Lorimar Productions Inc and Others v
Dallas Restaurant
1981 (3) SA 1129
(T) at 1152 - 1153). Van der Merwe
and Olivier Die Onregmatige Daad in die Suid-Afrikaanse Reg 5th ed at
58 note 95 rightly emphasize
that
"'die
regsgevoel van die gemeenskap opgevat moet word as die regsgevoel van
die gemeenskap se regsbeleidmakers, soos Wetgewer
en Regter".
While
fairness and honesty are relevant criteria in deciding whether
competition is unfair, they are not the only criteria. As pointed
out
in the Lorimar Productions case ubi cit, questions of public policy
may be important in a particular case, eg the importance
of a free
market and of competition in our economic system.”
15.
In
order to succeed with its application for final interdictory relief
the second applicant had to demonstrate that there is a wrongful
act
[3]
of competition, or one which
is impending, and which is infringing or threatening to infringe its
business goodwill and that no
other suitable remedy is available.
16.
Since
final relief is sought the second applicant must show the
infringement or threatened infringement of a clear right to the
goodwill of its business. The facts that the court can take into
account are limited to those presented by the respondents, including
admissions made to the applicants’ affidavit unless one of the
exceptions mentioned in
Plascon-Evans
applies
[4]
.
17.
The
generic description of the right attached to the goodwill of a
business is to be found in
Unlawful
Competition
(2
nd
ed
)
at Chap 3 para 2.2 where the co-authors, after explaining ‘
the
right to trade without wrongful interference
’
[5]
, rely on the following passage by Van Dijkhorst J in
Atlas
Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd and others
1981
(2) SA 173
(T) at 182D-E:
“
It
is important to note that the reference by the Court to the
plaintiff's "right to attract custom" as being the right
it
has as a trader which is protected from wrongful interference by a
competitor, is the same as the "reg op die werfkrag"
which
is the right H J O van Heerden seeks to protect in Grondslae van die
Mededingingsreg (supra). Sometimes this is referred
to as the
trader's goodwill, which is defined by Lord Macnaughten in
Commissioners of Inland Revenue v Millar & Co Margerine
Ltd
1901
AC 217
at 224 as "the attractive force that brings in custom".
18.
The concept of goodwill and its content was dealt with in two
separate judgments in
Commissioners of Inland Revenue v Muller &
Co.'s Margarine Ltd
1901 A. C. Firstly Lord Macnaughten described
goodwill as follows at 217:
"It
is a thing very easy to describe, very difficult to define. It is the
benefit and advantage of the good name, reputation
and connection of
a business. It is the attractive force which brings in custom. It is
the one thing which distinguishes an old-established
business from a
new business at its first start. The goodwill of a business must
emanate from a particular centre or source. However
widely extended
or diffused its influence may be, goodwill is worth nothing unless it
has power of attraction sufficient to bring
customers home to the
source from which it emanates. Goodwill is composed of a variety of
elements. It differs in its composition
in different trades and in
different businesses in the same trade. One element may preponderate
here and another element there...
For my part, I think that if there
is one attribute common to all cases of goodwill it is the attribute
of locality. For goodwill
has no independent existence. It cannot
subsist by itself. It must be attached to a business. Destroy the
business and the goodwill
perishes with it, though elements remain
which may perhaps be gathered up and revived again. No doubt, where
the reputation of
a business is very widely spread, or where it is
the article produced rather than the producer of the article that has
won popular
favour, it may be difficult to localise goodwill."
Lord
Linley then said:
"Goodwill
regarded as property has no meaning except in connection with some
trade, business or calling. In that connection
I understand the word
to include whatever adds value to a business by reason of situation,
name and reputation, connection, introduction
to old customers, and
agreed absence from competition, or any of these things, and there
may be others which do not occur to me.
In this wide sense, goodwill
is inseparable from the business to which it adds value, and, in my
opinion, exists where the business
is carried on. Such business may
be carried on in one place or country or in several, and if in
several there may be several businesses,
each having a goodwill of
its own."
These
dicta
were adopted by the full court in
Horseshoe Caterers
(Greenpoint) (Pty) Ltd v Burnkloof Caterers (Pty) Ltd
1975 (2) SA
189
(C) at 196C-G. See also the extract from
Atlas Organic
at
182E (
supra
)
19.
The
concept of goodwill and its composition is well understood in cases
of passing off such as
Williams
t/a Jenifer Williams & Associates & Ano v Life Line Southern
Transvaal
1996(3)
SA 408 (A) at 418E-F
[6]
20.
It is also dealt with in tax cases dealing with expenditure in
respect of the sale of businesses as a going concern.
In
Commissioner for the South African Revenue Service v SA
Silicone Products
(Pty) Ltd
[2004] 2 All SA 1
(SCA)
Heher JA said at para
[21] that:
“
The
Sale of Business agreement contains
no reference to the customer connection as a specific item of the
business for which payment
was made. However, the sale was of a
business as a going concern and it is logical that the customer
connection went with it. There
were two possible sources for such a
connection, - derived from the use of the trademark or built up
independently of the trademark.
In the latter regard it is
significant that the respondent paid separately for the goodwill and
the trade mark rights. The usual
meaning of ‘goodwill’ is
‘the possession of a ready-formed connection of customers
considered as a separate element
in the saleable value of a business’
(Shorter OED 871).
“
See
also
SIR v Cadac Engineering Works (Pty)
Ltd
1965 (2) SA 511
(A) where the court
adopted the statement by Lord Lindley in the
Muller &
Co’s Margarine Ltd
case ([1901] AC 217) at 235 that defined
goodwill “…
to include whatever adds value to a
business by reason of situation, name and reputation, connection,
introduction to old customers
and agreed absence from competition”
.
21.
Dun & Bradstreet (Pty) Ltd v SA Merchants Combined Credit
Bureau (Cape) (Pty) Ltd
1968 (1) SA 209
(C) dealt pertinently
with the case where a business utilised confidential information
compiled by its competitor; Corbett J (at
the time) in categorising
the right claimed said at 221C- 222A:
"Reverting
to the position in our law, and without attempting to define
generally the limits of lawful competition, it seems
to me that
where, as in this case, a trader has by the exercise of his skill and
labour compiled information which he distributes
to his clients upon
a confidential basis (ie upon the basis that the information should
not be disclosed to others), a rival trader
who is not a client but
in some manner obtains this information and, well knowing its nature
and the basis upon which it was distributed,
uses it in his competing
business and thereby injures the first mentioned trader in his
business, commits a wrongful act vis-à-vis
the latter and will
be liable to him in damages. In an appropriate case the plaintiff
trader would also be entitled to claim an
interdict against the
continuation of such wrongful conduct. Although there is no precise
precedent in our law for this proposition,
I am of the opinion that
it is a well-founded development of our law relating to unlawful
competition in trade and is in accordance
with trends of legal
development elsewhere. Quite apart from questions of copyright, the
fact that the information is distributed
upon a confidential basis to
a limited class of persons prevents it, in my view, from becoming
public property capable of being
used or imitated by rival traders.
In such circumstances the conduct of a rival trader who obtains and,
well knowing the position,
uses the information to advance his own
business interests and activities amounts to a deliberate
misappropriation and filching
of the product of another's skill and
labour. Such conduct must, in my view, be regarded as dishonest and
as constituting a fraud
upon the compiler of the information. I
consider that, as in the case of false misrepresentations concerning
one's own wares or
of passing-off, our Courts should treat this as
constituting unlawful competition and as being actionable at the suit
of the trader
damnified thereby. As in those cases, the conduct of
the trader misappropriating the information would amount to an
infringement
of the rights of the compiler thereof to carry on his
trade and attract custom without unlawful interference from
competitors;
and the damage suffered would normally consist of the
loss of customers or potential customers who have been induced by
such conduct
to deal with his competitor rather than with the
compiler himself. Bearing in mind the Aquilian character of a claim
based upon
such conduct, it seems to me that the suffering of damage
in this form and its causal connection with the acts of unlawful
competition
are essential ingredients of the claimant's cause of
action."
22.
Nonetheless care must be taken in unlawful competition cases to
recognise the erstwhile employee’s right to utilise knowledge
and skills acquired when moving to a new employer.
In
this regard Adv Dippenaar submitted that the case of
Meter Systems
Holdings Ltd v Venter and another
1993(1) SA 409 (W) especially
at 428D-F and 430E-F was authority for the proposition that customer
lists derived from memory, or
the employee’s own endeavours do
not constitute confidential information and can be utilised by a
competing business that
subsequently engages that employee.
23.
In my view the submission goes too far and takes the passages relied
on out of context. In my respectful view the list set out
at pages
428D-430H of Stegmann J’s judgment in
Meter Systems
of
information that either qualifies for protection or does not is
intended to be construed holistically. The respondents seek to
isolate certain passages while ignoring the fundamental criteria that
will result in information being regarded as confidential
to the
employer.
24.
The respondents’ broad submission also fails to take into
account the case of
Rawlins & Another v Caravan Truck (Pty)
Ltd
[1992] ZASCA 204
;
1993 (1) SA 537
(A) at 542F-H. Albeit that
Rawlins
was
concerned with a restraint of trade agreement, certain of the
underlying principles to which I will refer are applicable in
relation to what does or does not constitute the proprietary
interests of the employer as opposed to the acquired skill and
know-how
that an employee is entitled to exploit in order to obtain
other employment. See also
Nampesca (SA) (Pty) Ltd & Another v
Zaderer & Others
1999 (1) SA 886
(C) at 894I- 895B and 896B
and
Ntsanwisi v Mbombi
2004 (3) SA 58
(T) especially at 62D -
63H.
25.
In
Dr
Jacovides & Partners Inc v Dr Moodley and others
2010 JDR 0418 I was obliged to consider these cases in the context of
a restraint agreement between registered medical practitioners
in
order to determine whether the applicant enjoyed goodwill in a
patient “
customer base
”.
Rawlins
was relied upon for determining when goodwill
attaches to a customer base. At 541D-I the then appellate division
confirmed that
the employer enjoyed a protectable interest in his
trade connections if “
... the
employee has access to customers and is in a position to build up a
particular relationship with the customers so that when
he leaves the
employer’s service he could easily induce the customers to
follow him to a new business
”.
The
appellate division also referred to the House of Lords decision in
Morris (Herbert) Ltd v Saxelby
[1916]
1 AC 688
(HL) at 709 where the extent of the relationship resulted in
the employee acquiring “
... such
personal knowledge of and influence over the customers of his
employer ... as would enable him (the servant or apprentice),
if
competition were allowed, to take advantage of his employer’s
trade connection ...
”.
The
court in
Rawlins
then
summarised the position in the following terms;
“
Much
will depend on the duties of the employee; his personality; the
frequency and duration of contact between him and the customers;
where such contact takes place; what knowledge he gains of their
requirements and business; the general nature of their relationship
(including whether an attachment is formed between them, the extent
to which customers rely on the employee and how personal their
association is); how competitive the rival businesses are ... and
whether there is evidence that customers were lost after the
employee
left
”.
26.
In the present case the first respondent
was a director and employee of the second applicant. He had in fact
introduced the third
respondent to the second applicant as a
potential purchaser of its business. As a result of these overtures
the third respondent
was given access to the second applicant’s
confidential information for purposes of a due diligence. The third
respondent
was obliged to sign a confidentiality agreement. The
papers indicate that by the end of March 2014 the third respondent
sought
more information but had not yet signed the confidentiality
agreement. On 2 April 2014 the applicant informed the third
respondent
that it was prepared to hand over the information
requested and have the confidentiality agreement signed. The response
was a
volte face
and
the second applicant was told that they would not proceed to look at
acquiring its business. The first respondent claims that
the third
respondent, effectively out of the blue, approached him in May 2014
to enquire if he was still employed by the second
applicant. The
first respondent’s employment was terminated by the second
applicant by way of notice which set out a number
of grounds, which
if correct, demonstrated a serious undermining of the company’s
business by him and a failure to carry
out his director’s
duties. That issue is in dispute but it is unnecessary to make any
findings in that regard.
The
second respondent subsequently resigned from the second applicant and
quickly took up employment with the third respondent.
27.
The respondents contend that they are
entitled to make use of the information derived while at the
applicant for a host of reasons.
28.
In my view none of these reasons addresses
the fundamental issue of whether or not the applicant enjoyed a
protectable interest
in respect of its customer contact details of
persons with whom it deals, pricing information regarding contracts
for which it
has tendered, bid or was negotiating ( at least up to
the time it brought the application which was on 4 August 2014) and
confidential
information regarding the internal operations of its
business including its business and financial relationships with any
of its
suppliers or sub-contractors.
29.
I am however not satisfied in respect of
the other interdictory relief sought that the second applicant has
satisfied the requirements
of
Plascon-Evans
for the purposes of obtaining final
relief.
BREACH
OF FIDUCIARY DUTY BY FIRST RESPONDENT
30.
The first respondent effectively sought to
overcome the alternative ground for interdicting him based on his
directorship of the
second applicant by resigning from its board. It
is however unnecessary to consider that independent ground because of
the findings
already made on the first ground.
WRONGFUL
APPROPRIATION OF CONFIDENTIAL INFORMATION
31.
The respondents sought to make much of the
fact that knowledge of second applicant’s customers and
potential customers would
be readily available within the industry.
32.
The Achilles heel to this argument is the
customer lists that were claimed by the first respondent to have been
compiled from memory
and found on his email. The list however also
contains private contact details of the relevant persons at the
customer company.
That information was certainly acquired while at
the applicant and is confidential to it, irrespective of how good an
employee’s
memory might be. The good memory of an employee
cannot render otherwise confidential information no longer
protectable. That certainly
is not the ratio of
Meter
Systems
as is clear from the passages
referred to earlier. It would also conflict with the decision in
Dun & Bradstreet
mentioned
earlier.
33.
Moreover many contracts obtained by the
applicant are as sub-contractors to main bidding companies that
successfully acquired tenders.
A substantial number of the
applicant’s clients are smaller firms of civil engineers who
also feature on the first respondent’s
emailed list.
34.
The second applicant’s confidential
proprietary information was also found on the second respondent’s
computer. He claims
that this had presumably been copied onto his
computer by reason of the ‘
drop
box’
settings applied which
resulted in applicant’s files being automatically and regularly
synchronised with his own computer.
He was found in possession of
project measurement certificates, applications for BEE ratings,
workmen compensation annual returns
and information regarding what
are termed ‘
white collar’
information and the applicant’s
payroll. There can be little doubt that in its totality this
information is confidential to
the second applicant. The second
respondent also does not explain why he still retained the
information on his computer after he
had resigned from the applicant.
35.
There would also have been negotiations in
progress between the applicant and potential customers up to the time
that the application
was launched and to which the first or
second respondents would have been privy or would have had access
while still employed
or while still a director of the second
applicant. That information and the nature of the negotiations for
contracts, or ones which
were being prepared for tender, are
confidential to the second applicant. Any competitor would gain a
head start and an unfair
advantage by being able to undercut or
otherwise use such knowledge that was internal to the second
applicant. The applicant is
entitled to be protected in that regard
and has a clear right to the extent I have identified.
36.
The conduct of each of the respondents
demonstrates a disregard for the applicant’s rights and a clear
attempt to take unfair
and wrongful advantage of inside knowledge
that is otherwise protectable against filching or economic espionage.
I see no reason
why such protection cannot be extended in the present
situation to issues of unfair competition.
URGENCY
37.
I am satisfied that this matter is urgent having regard to need to
protect the second applicant’s interests from unfair
competition before the horse has bolted, for reasons that ought to be
clear from the body of this judgment.
ORDER
38.
It is for these reasons that the following order was made;
1.
The first, second and third
respondents are interdicted from:
1.1.
Utilising, communicating or
publicising any of the Second Applicant’s;
1.1.1.
Customer
contact details of persons with whom it deals;
1.1.2.
pricing information regarding
contracts for which it has tendered, bid or was negotiating at any
time up to and including 3 August
2014;
1.1.3.
confidential information regarding
the internal operations of its business including its business and
financial relationships with
any of its suppliers or sub-contractors;
1.2.
Approaching directly or indirectly,
or assisting any other person in approaching directly or indirectly,
any client, customer or
principal of the second applicant or to
engage with any of them in order to unlawfully compete with the
second applicant, for the
benefit of the third respondent or any
other person in respect of any contract for which it has tendered,
bid or was negotiating
at any time up to and including 3 August 2014;
1.3.
Taking advantage, to the prejudice
of the second applicant, of any relationship involving the use of the
second applicant’s
pricing information or customer contact
details with the second applicant’s clients or customers or any
other employee in
respect of any contract for which the second
applicant has tendered, bid or was negotiating at any time up to and
including 13
August 2014, for the benefit of the third respondent or
any other person;
2.
Each respondent is interdicted and
precluded from accessing or utilising the following documents or
copies, whether in electronic
or hard copy format;
2.1.
The “BEE and 198 more folders”
2.2.
“
0001 Docs Sent for Coleman’s
BEE.pdf and 712 more files”
contained
in the device, and referred to in annexure JD1 on page 93 of the
Applicants’ Founding Affidavit
3.
The first and third respondents are
to pay the costs of the application including the costs of the
application in respect of the
second respondent, but excluding the
costs relating to the orders sought in Part B paras 8 to 13, jointly
and severally, the one
paying the other to be absolved.
DATES
OF HEARING: 12 August and 12 September
DATE
OF ORDER: 26 September 2014
DATE
OF FINAL JUDGMENT: 20 April 2015
LEGAL
REPRESENTATIVES:
FOR
APPLICANTS: Adv M Nowitz
Schindlers
Attorneys FOR 1
st
and 3rdRESPONDENTS: Adv F Dippenaar SC
Adv
HP van Nieuwenhuizen
Cliffe
Dekker Hofmeyer Inc
[1]
See
section 22 of the Constitution
[2]
See
the statutes mentioned in LAWSA vol2(2) (2
nd
ed) para 273
[3]
Negligence will suffice as i
ntention
is not a requirement for Aquilian liability. See generally Van
Heerden –Neethling
Unlawful
Competition
(2
nd
ed) Chap 3 para 4.3.3
[4]
See
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A)
at
634E – 635C. In
Wightman
t/a JW Construction v Headfour (Pty) Ltd and Another
[2008] ZASCA 6
;
2008
(3) SA 371
(SCA)
at
para
12 the SCA said the following when applying
Plascon-Evans
:
'…
an applicant who seeks final relief on motion must, in the event of
conflict, accept the version set up by his opponent
unless the
latter's allegations are, in the opinion of the court, not such as
to raise a real, genuine or bona fide dispute of
fact or are so
farfetched or clearly untenable that the court is justified in
rejecting them merely on the papers'
[5]
See
at Chap 4 para 3.1.2
[6]
At 418E-F: “
In
its classic form it usually consists in representing, either
expressly or impliedly (but almost invariably by the latter means)
that the goods or services marketed by him emanate in the course of
business from B or that there is an association between such
goods
or services and the business conducted by B....(
and)
...
it
results, or is calculated to result, in the improper filching of
another’s trade and/or in an improper infringement of
his
goodwill and/or in causing injury to that other’s trade
reputation”